The Trump administration on Monday launched “Operation Economic Outcast”, a major campaign to isolate Iran economically by targeting the networks that help Tehran generate oil revenue and obtain technology, while warning countries and companies that continue doing business with the regime that they could face US sanctions.
US Treasury Secretary Scott Bessent said the Treasury Department had mapped the networks and entities Iran uses to smuggle oil and would pursue a “zero leakage” approach to enforcement.
Teams from the Treasury, State Department and US military are engaging with counterparts around the world, with Washington demanding that governments take action against activities identified by the US, Bessent said.
“Every country has a defined timeline to shut down activities we have identified,” Bessent said. If countries fail to act, the US will move unilaterally using Treasury authorities, he added.
Five target areas to cripple Iran’s economy
The new sectoral sanctions target five areas that Washington considers vital to Iran’s economy: digital assets, technology, gold, aviation and shipping.
Bessent said the measures would significantly expand the risk of secondary sanctions for companies and financial institutions that continue to conduct business with Iran.
The Treasury Department’s Office of Foreign Assets Control is also sanctioning more than 60 entities, individuals and vessels worldwide, according to Bessent. The targets are accused of helping the Iranian regime obtain nuclear and missile technology, conduct cyber operations and generate oil revenue.
The measures come as the Trump administration seeks to cut off Iran’s remaining sources of international economic support. Bessent said the campaign was designed to eliminate the regime’s economic options and would continue to intensify.
“This is a sustained campaign to collapse every last option for Iran,” Bessent said.
Bessent also warned governments and businesses that maintain economic ties with Tehran that they could face the full force of US sanctions.
“An economic engagement of any kind with [a] murderous regime will expose those responsible to the full reach of American power,” he said.
He also appealed directly to what he called the “ordinary soldiers of the regime”, arguing that economic pressure would increasingly affect their livelihoods. As paycheques are delayed or stop altogether, Bessent said, they should question whether their commanders are leading Iran towards “triumph or ruin”.
Will sanctions target China?
Invoking the fall of the Berlin Wall, Bessent warned supporters of Tehran against underestimating Washington’s determination.
“Those who support Tehran, do not discount the cost of testing American resolve,” he said.
“No nation should expect to enjoy the rewards of our system while helping those who seek to destroy it,” Bessent added.
The announcement also raised the prospect of tougher measures against countries that continue to facilitate Iranian trade. Asked whether China would be exempt from the new campaign, Bessent said no country was beyond the reach of US sanctions.
“We want to make clear here today that no one is above the reach of US sanctions,” Bessent said, according to CNBC.
“If they facilitate transactions and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted,” he said, according to CNBC.
Bessent’s comments come as Washington and Beijing maintain a fragile trade truce following last year’s escalation in tariffs and other trade restrictions. US President Donald Trump and Chinese President Xi Jinping met in Beijing in May, while Xi is scheduled to meet Trump in Washington in late September.
How the US markets reacted?
US stocks were mixed on Monday amid the announcement. The S&P 500 fell 0.3%, while the Nasdaq Composite declined 0.6%. The Dow Jones Industrial Average gained 0.2%, making it the only major US index to trade higher.
The latest action also comes amid rising trade tensions between Washington and Ottawa. US-Canada trade talks broke down over the weekend after Washington imposed new tariffs on Canadian goods, prompting Canadian Prime Minister Mark Carney to suspend negotiations and threaten retaliatory measures.
Trump on Monday separately threatened to raise tariffs on Canadian automobiles, auto parts and steel to 50% from January 1, 2027.
Leave a Reply