In 'warning shot,' US threatens sanctions on Iran’s trading partners
Treasury Secretary Scott Bessent said countries were given "defined timelines" to halt business with Iran or face US sanctions.
WASHINGTON — The US Treasury Department on Monday warned of secondary sanctions for countries doing business with Iran, announcing the launch of “Operation Economic Outcast” as the next phase of a pressure campaign aimed at ending the six-month war.
“Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Treasury Secretary Scott Bessent said at a news conference unveiling the sanctions.
Washington is doubling down on economic pressure as talks with Tehran to reopen the Strait of Hormuz and end the war have stalled. Last week, President Donald Trump said there were no discussions “going on or scheduled” with the Iranians, whose conditions for resuming regular traffic in the strait include war reparations and the lifting of a US naval blockade.
Analysts say Iran’s hard-line leadership believes time is on its side, betting that the Trump administration will eventually relent amid rising gasoline prices and the approaching midterm elections.
Bessent said the US Treasury Department was imposing sanctions on more than 60 entities, individuals and vessels that enable Iran’s nuclear and missile programs, cyber operations and oil sales. The newly announced sanctions are not expected to move the needle, as they are similar to previous measures imposed on Iran and its supporters in recent months.
President Donald Trump, however, was placing phone calls to world leaders issuing “specific requests” to cease their interactions with Iran, Bessent said. Pressed by reporters, the top Treasury official declined to name any of those countries or single out China, Iran’s top trading partner and biggest purchaser of its oil.
“We are giving everyone the opportunity to remedy bad behavior," Bessent said. "Why would I want to blow up the global financial system?"
The Treasury Department has previously imposed sanctions on independent “teapot” refineries in China that purchase Iranian oil but has so far stopped short of sanctioning the Chinese banks that process those transactions. Analysts warn Beijing would respond with significant countermeasures should Washington target its financial institutions with sanctions. Chinese President Xi Jinping is expected to meet with Trump in Washington next month.
“Every country has a defined timeline to shut down activities we have identified. If they do not take action, we will do so unilaterally through Treasury authorities,” Bessent said.
Without providing further details, Bessent said an unnamed financial institution would be sanctioned by the end of this week, telling reporters, “We believe that a warning shot and a level-set of expectations is appropriate.”
He also said the United States was starting to see results of its “economic onslaught” against Iran. The United Arab Emirates last week announced it was halting all trade, commercial exchanges and financial transactions with Iran “until further notice." The UAE is Iran’s biggest trading partner in the Middle East, with bilateral trade reaching roughly $28 billion as of 2024, according to World Trade Organization figures.
On state television Saturday, Iran’s top national security adviser, Mohsen Rezaei, vowed “earthquake-like” retaliation if the Trump administration imposed additional sanctions and warned any country cooperating would be “considered an enemy.”
This developing story has been updated since initial publication.
