Bessent unveils new effort to cripple Iran’s economy
The move marks the Trump administration’s latest attempt to force an end to an increasingly unpopular war that has stretched into its sixth month.
On Monday, Treasury Secretary Scott Bessent announced a comprehensive plan to economically isolate Iran, informing foreign governments and businesses that they risk losing access to the U.S. financial system if they continue trading with Tehran. Dubbed "Operation Economic Outcast," this campaign does not immediately penalize financial institutions in China and other nations that facilitate trade with Iran for oil and other commodities.
Instead, Bessent issued a stern warning, stating that the U.S. would give countries a final chance to "rectify bad behavior" and align with the Trump administration's efforts to isolate Iran. "The Iranian regime faces a clear choice: severe global isolation or a path to reintegration with the global economy," Bessent declared. The Treasury Department expanded the scope of secondary sanctions it can impose on countries aiding Iran's financial flow and introduced new direct sanctions on numerous entities linked to Iran.
It also lifted specific exemptions to existing Iran sanctions that permitted remittance payments and allowed Iranians to access U.S. cultural and academic institutions. Bessent revealed that President Trump was personally contacting foreign leaders to urge them to reduce their economic ties with Tehran. U.S. officials from the Treasury, State departments, and the Pentagon would engage with their counterparts worldwide to initiate "immediate action" to sever economic connections to Tehran.
Bessent emphasized that the message to Iran's trading partners and other countries doing business with the country is: "It is no longer acceptable to operate in the gray spaces of this conflict." This move signifies the Trump administration's latest attempt to end an increasingly unpopular war that has entered its sixth month, causing disruptions in global energy markets, raising fuel prices for Americans, and becoming a growing political liability for Republicans ahead of the midterm elections.
The strategy may significantly escalate tensions with China, a major purchaser of Iranian oil. While the Treasury has already sanctioned smaller Chinese refineries, shipping companies, and financial networks accused of assisting Tehran in selling oil, targeting larger Chinese banks or firms involved in Iran-linked transactions could prompt retaliation from Beijing as Trump prepares for anticipated talks with Chinese President Xi Jinping.
When asked about potential sanctions on Chinese banks, Bessent stated that "no one is above the reach of U.S. sanctions."
Written by urgent.news from Politico EU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
