US Treasury announces new sanctions initiative targeting Iran's economy

The U.S. Treasury Department announced a new sanctions program aimed at further isolating Iran from the global financial system. Treasury Secretary Scott Bessent described the effort as a coordinated attempt to deter foreign governments, banks and companies from conducting business with Tehran.

Iran’s economy, already strained by years of sanctions, war and a recent naval blockade, is experiencing high inflation, a depreciating currency and declining living standards. Iranian officials have said the country seeks a negotiated end to the conflict while maintaining what they consider “power and dignity.”

Mohsen Rezaei, head of Iran’s supreme national security council, labeled participation in the U.S. campaign an “act of war” and warned that Iran could target neighboring states that continue trade with it, including the possibility of disrupting Gulf oil flows.

The success of the U.S. plan depends on convincing major trading partners, particularly China, to comply with secondary sanctions. Beijing has instructed Chinese firms not to follow U.S. restrictions on Iranian oil purchases and has signaled it will protect Chinese interests if targeted.

When asked why the United States has not imposed the most extensive secondary sanctions, Bessent replied that destabilizing the global financial system would be counterproductive. The administration is also mindful of upcoming U.S. elections and the potential impact of heightened energy prices on the domestic economy.

Analysts note that the initiative creates a strategic standoff: Washington hopes Iran’s economy will collapse first, while Tehran appears prepared to endure sanctions and seek alternative trade routes, hoping to force a settlement.