Bessent Unveils New Effort To Cripple Iran’s Economy

Treasury Secretary Scott Bessent on Monday unveiled a sweeping new effort to economically isolate Iran, warning foreign governments and companies that they could lose access to the U.S. financial system if they continue doing business with Tehran.

The new campaign, which Bessent dubbed “Operation Economic Outcast,” however, stops short of immediately imposing penalties against financial institutions located in China and other countries that facilitate trade with Iran for oil and other commodities.

Instead, Bessent delivered a stark warning that the U.S. would give countries a final opportunity to “remedy bad behavior” and get in line behind 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 said.

The Treasury Department broadened the types of secondary sanctions it may impose on countries that facilitate the flow of money to Iran and imposed fresh direct sanctions on dozens entities linked to Iran. And it ended certain exemptions to existing Iran sanctions that permitted the flow of remittance payments to the country and allowed Iranians to access the U.S. cultural and academic universities.

Bessent said that President Donald Trump was calling foreign leaders with “specific requests” about cutting their economic ties from Tehran. U.S. officials from the Treasury and State departments and the Pentagon would be talking to their counterparts around the world seeking “immediate action” to cut off economic ties to Tehran.

Bessent said the message to Iran’s trading partners and other countries that do business with the country was: “It’s no longer acceptable to operate in the gray spaces of this conflict”

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. The war has disrupted global energy markets, raised the price Americans pay for gas and become a growing political liability for Republicans ahead of the midterm elections months away.

It also puts Bessent at the center of the administration’s war efforts after months of military strikes, a blockade of Iranian ports and diplomatic talks have failed to secure a lasting agreement to end the conflict.

The strategy could significantly raise tensions with China, which is a large buyer of Iranian oil. Treasury has already sanctioned smaller Chinese refineries, shipping companies and financial networks accused of helping Tehran sell oil.

But targeting larger Chinese banks or companies that facilitate Iran-linked transactions could provoke retaliation from Beijing as Trump prepares for expected talks with Chinese President Xi Jinping.

Asked about whether the U.S. would move forward on sanctioning Chinese banks on Monday, Bessent said that “no one is above the reach of U.S. sanctions.”