US warns countries to cut financial ties with Iran

The United States imposed fresh sanctions on Iran on Monday and warned countries that continue trading with Tehran could face penalties.

Treasury Secretary Scott Bessent said Washington launched “Operation Economic Outcast” and warned that countries enabling Iran’s illicit trade across oil, crypto, aviation, gold, technology and shipping will face devastating US sanctions, designed to bring about the regime’s “economic asphyxiation.”

But the administration is giving trading partners time to reduce their dealings with Tehran.

The Treasury Department also targeted nearly 60 Iran-linked entities accused of supporting nuclear and missile programs, cyber operations and oil shipments. Some sanctioned businesses operate in China and Hong Kong.

The United Arab Emirates, China and Turkey are among Iran’s largest trading partners. But Bessent noted the UAE had already ended trade with Iran last week, and that President Trump was asking other countries to follow its example.

What about China?
It remains unclear whether the Trump administration will risk worsening relations with China through sanctions, particularly with the trade truce still fragile and Xi Jinping expected to visit the US next month. Before the war, China purchased 80% of Iran’s oil.

Will the approach pay off?
The Trump administration hopes economic pressure will compel Iran to ease restrictions around the Strait of Hormuz, whose disruptions have driven up energy prices ahead of the US midterm elections.

The pressure comes as Iran’s rial plunged to a record low of about 2.02 million per dollar. Rising costs have worsened conditions, with rice prices climbing 60% and beef prices more than 150% since the war began.