'Economic asphyxiation': US Treasury chief announces new sanctions campaign against Iran

The US on Monday announced an expansion of secondary sanctions it hopes will 'sever every economic lifeline' sustaining Iran, as President Donald Trump's administration struggles to resolve an unpopular war that has pushed energy prices higher. Treasury Secretary Scott Bessent unveiled what he described as an 'economic D-Day' that aims to give a final warning to countries to cut their business ties with Iran or risk having key companies and entities cut off from the dollar-based financial system. 'We are launching an economic onslaught against Iran's financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,' Bessent said at a press conference. Bessent laid out plans for the 'economic asphyxiation' of Iran, warning of dire consequences for countries that decline to join the pressure campaign. The US Treasury Department said Monday that it has 'issued determinations against five critical sectors — digital assets, technology, gold, aviation, and shipping — that the Iranian regime uses to try to prop up its failing economy.' Bessent added that it's 'no longer acceptable to operate in the gray spaces' of the conflict. The Treasury secretary did not name countries that could face potential secondary sanctions from the United States, but China, Turkey and the United Arab Emirates are Iran's largest trade partners. Asked if Chinese banks dealing with Iran could be targeted, Bessent said that 'no one is above the reach of US sanctions.' China has for several years been the biggest buyer of Iranian oil and Washington has intensified its efforts to clamp down on Chinese purchases, but has so far stopped short of designating larger Chinese banks that may be facilitating the oil trade. 'Why would I want to blow up the global financial system?' Bessent said. 'We believe that it is important to level-set and give people a cure period.' The UAE announced last week that it was suspending all trade, commercial exchanges, and financial transactions with Iran until further notice. Responding to Bessent, Iranian Economy Minister Ali Madanizadeh predicted 'another defeat' for the United States, saying the Islamic Republic had a 'two-year plan' to counter the new sanctions. The sanctions announcement came as the Iranian currency hit a new record low, dropping to 2.02 million rials to the US dollar as trading opened on informal currency markets.