U.S. Treasury Secretary Scott Bessent is expected to announce new measures Monday evening aimed at further isolating Iran’s economy, in the hope that the sweeping pressure campaign he has described as the “largest economic offensive ever” will force the mullah regime to yield and compromise in stalled talks on ending the war.
Bessent is expected to detail the new measures at a special news conference. They will reportedly come on top of the naval blockade already being enforced against Iranian ports and include threats of sanctions against countries that continue to provide Iran with an economic “lifeline” and maintain business ties with it, which allow Tehran, among other things, to evade sanctions already in place.
It remains unclear, however, whether President Donald Trump will follow through on such threats against Iran’s close allies, chief among them China, since sanctioning Beijing could risk reigniting a trade war that he has so far preferred to avoid.
For now, it is not clear exactly what the new measures will include, but a source familiar with the matter told Reuters that they will expand the use of secondary sanctions the administration can impose on countries or other entities that violate restrictions on ties with Iran. The source described the move as a “final warning” to countries to sever their ties with the Islamic Republic, adding that failure to do so could result in their companies or other affiliated entities being cut off from the U.S. dollar-based financial system.
The source did not specify which new activities or sectors of Iran’s economy could be targeted, but said that in some Iranian sectors any activity, even in a third country, could also be subject to secondary sanctions. A senior administration official added that the Treasury Department had “mapped Iran’s oil smuggling and sanctions-evasion network,” and that the information would be presented to countries helping Iran circumvent sanctions as part of the warning issued to them.
US President Donald Trump, Iranian Supreme Leader Mojtaba Khamenei
(Photos: Anna Moneymaker / AFP, CENTCOM, Vantor/Handout via Reuters)
Trump has shifted strategy in recent weeks following the deadlock in talks with Iran and Tehran’s refusal to allow the reopening of the Strait of Hormuz, the “oil artery” of the global economy, unless it receives U.S. recognition of its control over the strategic waterway. Rather than resume the war, Trump chose a policy of a suffocating economic blockade and last week promised to launch what he called an “economic D-Day,” invoking the Allied invasion of Normandy in World War II. He also threatened to punish countries that continue doing business with Iran.
So far, only the United Arab Emirates, which had been an important hub for Tehran’s efforts to evade sanctions, has formally announced that it is cutting all trade ties with Iran. But many analysts doubt whether economic pressure, even if additional countries join the effort, can force Iran into submission quickly.
Iran, which has already shifted to what has been described as a “survival economy” aimed at minimizing the effects of sanctions, has been dealing with them for decades. But its economic crisis has worsened significantly following the two most recent wars.
On a road in Tehran, in front of a giant billboard mocking Trump
(Photo: Majid Asgaripour/WANA (West Asia News Agency) via REUTERS)
According to the International Monetary Fund, inflation in Iran is expected to approach 70% this year. Since the latest war, prices of some food products, such as meat, have risen by far more, as much as 150%, while the economy as a whole is expected to contract by a steep 5.4%.
Unemployment has surged, with at least 1 million people losing their jobs since the war broke out in late February. The Iranian currency, the rial, fell to a new record low of 1.9 million to the dollar at the beginning of the month and continued to slide ahead of the expected announcement of the new measures. On Sunday, it crossed the threshold of 2 million to the dollar, and on Monday it fell further to 2.02 million.
Against that backdrop, and just hours before Bessent’s news conference, Trump wrote in a brief post on Truth Social: “IRAN IS COMPLETELY COLLAPSING!!!”
New testimony is also emerging from frustrated Iranian residents who describe growing difficulty affording basic food products.
“We have basically given up on a lot of things,” 52-year-old taxi driver and father of two Ahmad Karimi told The Associated Press. Karimi said he works 15 hours a day to make ends meet. “We give up fruit, we give up protein, we have given up leisure time, and we even work on weekends.”
Karimi said he believes Iran’s leaders will eventually have to act soon to ease the hardship he and many others are experiencing.
“People can't keep living like this,” he said. “We’re just breathing, surviving and trying to get through one day at a time.”
Sadeq Mahmoudi, a 73-year-old Tehran resident, expressed pessimism that a solution could be found that would lead to the lifting of sanctions.
“There is no hope for an agreement and peace,” he told AP while waiting in line to buy U.S. dollars with the last of his savings.
Although senior officials in Tehran repeatedly say they are aware of the severe crisis and the hardship facing citizens, they insist that the Islamic Republic will not surrender and are now threatening renewed escalation, including attacks on countries that join the U.S.-led economic blockade.
Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, warned Sunday: “If the economic war continues, not a single drop of oil will leave the Persian Gulf and the Strait of Hormuz. If Trump takes new aggressive steps, we will respond with force. If neighboring countries cooperate with the economic war, we will attack their interests. Any cooperation or support on their part will be interpreted as war."