Treasury Secretary Scott Bessent on Thursday said the US will impose its toughest ever sanctions on Iran, as Washington increases its economic threats amid an impasse in negotiations to end the conflict.
Mr Bessent said he plans to hold a news conference on Monday “to talk about exactly what we're going to do”.
“Economic pressure means that we are going to all of our allies – and this is going to be the greatest co-ordinated economic isolation in the history of the world – and we are going to them and saying, ‘You are either with us or against us',” he told CNBC.
The US has pledged to enact stronger economic measures against Iran as a US naval blockade in the Strait of Hormuz has failed to force Tehran to reopen the crucial waterway. A 60-day ceasefire between the two sides expired on Monday.
Iran's central bank governor said the country is not exporting any oil. Iran is also battling runaway inflation and a plunging currency.
Iran's regime has weathered sanctions for decades, going back to Jimmy Carter's administration, which began an economic pressure campaign in response to the seizure of the US embassy in Tehran in 1979.
More than 6,000 sanctions are in place across Iran's financial, banking, aviation, energy and cryptocurrency sectors.
“It is a one-two punch. We have the blockade [on Iran] and we are going to have the toughest sanctions in history,” Mr Bessent said. “It is going to work in Iran and we are going to collapse this regime.
“If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale [war] restart … but I would emphasise, that is for now.”
On Wednesday night, US President Donald Trump promised “economic warfare and isolation on an unprecedented scale”, while also warning that governments and financial institutions providing support to Iran would face economic consequences.
The US pitch received a boost this week when the UAE announced it was severing all trade and financial ties with Iran after Tehran fired two missiles at the Emirates.
“The United Arab Emirates remains firmly committed to safeguarding the integrity of the international financial system, in line with international law and the highest global standards,” Afra Al Hameli, director of strategic communications at the Ministry of Foreign Affairs, said in a statement posted on X on Monday.
Tehran also relies on Turkey, India and China for access to foreign currency, and Beijing's economic ties in particular have come under increased scrutiny.
“We are confident that everyone wants the strait reopened and for energy prices to come back down,” Mr Bessent said. “Keep in mind that the Chinese get 50 per cent [of their] energy from inside the Gulf. So it would do them a big service to get with the programme.”
Beijing is a heavy importer of Iranian crude oil, which accounts for about 90 per cent of China's. Beijing remains one of the few governments willing to bypass sanctions.
While Washington has imposed sanctions on China's so-called teapot refineries, it has not yet taken more escalatory measures against major Chinese banks.
Such measures could provoke Beijing before President Xi Jinping's visit to the White House next month, which would come two months before China's rare-earth mineral export restrictions are due to come into effect.
Mr Bessent did not elaborate on whether China would be a focus of the economic threats.
“Many conversations are best to have in private,” he said.
