U.S. threatens sanctions on firms still doing business with Iran

On Monday, the Trump administration announced a comprehensive economic campaign to isolate Iran from the global economy, focusing on targeting entities that engage in business with Tehran. The US avoided naming major Chinese banks in its sanctions, which could be pivotal for the campaign's success. The Iranian rial experienced a record low against the US dollar amid the pressures.

Treasury Secretary Scott Bessent detailed the administration's operation, "Operation Economic Outcast," launched at President Trump's direction. The Treasury is intensifying secondary sanctions targeting Iran's financial connections, including digital assets, technology, gold, aviation, and shipping sectors. About 60 entities, individuals, and vessels have been sanctioned for supporting Iran's nuclear and missile programs, cyber operations, and oil revenue generation.

Bessent assured that every node, facilitator, and network Iran used to evade sanctions would be severed.

The administration did not immediately impose secondary sanctions on other countries, giving them a "cure period" to cease dealings with Iran. Washington threatened to impose sanctions on a major financial institution dealing with Iran later in the week. President Trump personally called foreign leaders demanding they halt transactions with Iran. Bessent warned that no one is above US sanctions.

Iran's Foreign Ministry spokesman, Esmaeil Baqaei, threatened that any action escalating the situation would have consequences. Member of the Supreme National Security Council, Mohsen Rezaei, warned that countries joining US sanctions would face an "act of war." Iran's Central Bank Governor, Abdolnaser Hemmati, claimed the US had done everything in terms of sanctions and that Iran had built up foreign currency reserves to import essential goods and medicine.

Iran's rial plummeted to a record low of 2.02 million to the dollar on the unofficial foreign-exchange market. The official rate is around 1.5 million rials to the dollar, but market rates are used for actual transactions. The currency collapse follows six months of war and a US naval blockade. Rice prices surged by about 60%, while beef prices rose over 150%. The International Monetary Fund forecasts Iran's GDP will contract by more than 5%.