US Expands Iran Pressure With Secondary Sanctions on Trading Partners

The US administration has intensified economic pressure on Iran, moving to impose secondary sanctions on third countries that do business with Tehran. Iran said it would not back down despite the tougher measures, pointing to a continued standoff between the two sides.

US Treasury Secretary Scott Bessent said on Aug. 24 that Washington was launching “Operation Economic Outcast” to “shut down every option that sustains Iran.” Any country maintaining economic ties with the Iranian regime “in any form” will face strong US sanctions, he said. The strategy is meant to choke off Iran’s economic lifelines after roughly six months of military operations failed to force Tehran to yield.

At the center of the new measures is a plan to impose secondary sanctions on countries trading with Iran in five sectors: cryptocurrency, technology, gold, aviation and shipping. Washington believes Iran has been generating revenue in those areas while evading existing sanctions. Bessent said the US had identified every link, facilitator and network used by Iran to smuggle oil and bypass sanctions.

The Treasury also placed more than 60 entities, individuals and vessels worldwide under new sanctions. The US government said they helped the Iranian regime obtain nuclear and missile technology, conduct cyber operations and generate oil revenue. Broker networks and shadow fleet vessels spanning the United Arab Emirates, Hong Kong, China, Singapore, Switzerland and Europe were also included.

Bessent made clear that countries failing to sever economic ties with Iran could be targeted with secondary sanctions. President Donald Trump has been calling world leaders to ask them to halt engagement with Tehran, he said. Any institution helping Iran launder money will be cut off from the dollar system, he added. The Treasury said it expects to announce significant sanctions on major financial companies linked to Iran by this weekend.

Iran pushed back strongly. The Times of Israel reported that Ali Madanizadeh, Iran’s minister of economic affairs and finance, said the country had prepared a two-year economic plan for sanctions like these. Earlier, Mohsen Rezaei, an Iranian security official, warned that not a single drop of oil would leave the Persian Gulf or the Strait of Hormuz if neighboring countries joined what he called the US economic war.

Skepticism has also emerged in the US over the effectiveness of the latest measures. Critics argue that enforcing secondary sanctions against major powers such as China will be difficult. The Wall Street Journal reported that Bessent did not mention China, Iran’s largest trading partner, in his remarks. Sanctioning foreign companies in countries such as China would carry the risk of retaliation, the newspaper said. China buys about 90% of Iran’s oil.

Some also argue the latest move is not materially different from existing sanctions. Hassan Ahmadian, a professor at the University of Tehran, told the Guardian that Iran has been under sanctions since 2018. Economic sanctions are essentially a public admission that the US failed militarily and is merely returning to square one, he said.

Separate from the confrontation, negotiations toward a ceasefire agreement appear to be continuing. Mohsin Naqvi, Pakistan’s interior minister, who met Iranian leaders in Tehran on Aug. 24, wrote on social media that there had been significant progress in the talks.

Han Myung-hyun, Hankyung.com reporter, wise@hankyung.com