US launches ‘economic onslaught’ to isolate Iran

The US has warned countries to cut ties with Iran or face new sanctions as it ramps up its economic warfare against Tehran.

The White House promised an “economic onslaught” on Monday aimed at economically isolating Iran, after Donald Trump pledged to launch an “economic D-Day” campaign to force a deal to end the war.

Scott Bessent, the US treasury secretary, said he would use secondary sanctions to target a broad swathe of Iran’s economy, hitting companies who continue to deal with Tehran in cryptocurrencies, technology, gold, aviation and shipping.

Mr Bessent said: “We are launching an economic onslaught against Iran’s financial connections around the globe. You will see a wave of sanctions.”

Ali Madanizadeh, Iran’s economy minister, told state media that Tehran was prepared for the levies and warned that the Trump administration “cannot cut off our financial arteries”.

Six months into the war, Mr Trump has pivoted to squeezing Iran’s crippled economy amid reports that the US is running out of missiles and interceptors.

Last week, the US president said Tehran would face “economic warfare and isolation on an unprecedented scale” and called on allied countries to “stand with the United States of America to isolate, and defeat, the Iran threat”.

Mr Bessent said the initiative, called “Operation Economic Outcast”, would “block every potential source of revenue” that funds the Iranian regime.

He said Mr Trump had called several world leaders and requested that they “cease their interactions with the regime”.

“Those who stand with the US will reap the rewards of our partnership. Those who tether themselves to the Iranian regime should expect to share in the isolation of a withering regime,” he added.

Although Mr Bessent did not spell out who would be targeted, he warned a “financial institution” would face sanctions “by the end of this week” for dealing with Iran.

“If people do not want to meet our expectations, then we expect, and they should expect, that they will leave the dollar system,” he said.

The US treasury secretary warned “no one is above” being targeted, and did not rule out cutting off Chinese banks for facilitating transactions with Iran.

He added: “We are going to hold everyone accountable, and this is economic asphyxiation of this regime … No one should test our resolve.”

Oil prices dropped on news of the levies, which Mr Trump will welcome as he faces a tough midterm elections season because of rising petrol prices caused by the closure of the Strait of Hormuz.

American public approval of the war has declined to 31 per cent, the lowest since the early days of the conflict, according to a Reuters/Ipsos poll from Monday.

Iranian media called the sanctions a “campaign to increase psychological pressure on the Iranian people”, who face soaring prices of everyday goods and a rapidly devaluing currency.

On Saturday, Mohsen Rezaei, the head of Iran’s national security council, warned allies of the US that they would be considered enemies, and their interests harmed, if they joined Mr Trump in sanctioning Iran.

Despite the shift to an economic war, Pete Hegseth, the US defence secretary, said the US would not rule out resuming strikes in the strait or elsewhere in Iran.

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