Bessent unveils sanctions designed to cripple Iran

• U.S. officials say the expanded "secondary" sanctions are expected to be the main course of action against Iran until at least after the midterm elections, when a new military campaign could again be on the table.

What he said: "Let there be no ambiguity as to the position of the United States," Bessent said at a news conference. "An economic engagement of any kind with this murderous regime will expose those responsible to the full reach of American power."

• Bessent did not give a deadline for compliance, but said, "I'm not going to set a timeline, but we do not have infinite patience here."
• "No one is above this," Bessent said in response to a question about whether the initiative would encompass China. "This is economic asphyxiation of this regime ... and no one should test our resolve."

Zoom in: Bessent said the U.S. is expanding the categories of secondary sanctions to the fields of digital assets, technology, gold, aviation and shipping.

• He said those are all used by Iran to generate revenue, evade sanctions or otherwise mitigate economic pressure.
• In addition, the Treasury Department sanctioned nearly 60 entities, individuals and vessels that are involved in illicit procurement of nuclear and missile technology as well as cyber operations and oil smuggling.
• The Treasury Department also suspended several licenses it previously issued that allowed certain payments to Iran and Iranian access to U.S. cultural and academic institutions.

What to watch: Bessent pledged the Treasury Department will accelerate enforcement of existing and new sanctions.

• He said teams from the Treasury, State and Defense departments are starting to engage with counterparts around the world to make clear that the U.S. expects immediate action.
• Bessent said every country will be given a defined timeline to shut down its Iran-related business activity. If it fails to do so, the U.S. will impose secondary sanctions.
• He said that a major financial institution will be sanctioned by the end of this week because it's conducting business with Iran.
• Bessent noted that President Trump himself is going to call foreign leaders and ask them to stop "specific" trade and business with Iran.
• "It is time for world leaders to make a decision ... between America and Iran," Bessent said.

Yes, but: While Bessent has been conducting a PR buildup for the last 10 days over an "economic D-Day" against Iran, the reality is more complicated.

• The U.S. already has significant secondary sanctions targeting countries that trade with Iran, particularly its oil sector. But the U.S., including the current administration, has only partially enforced them.
• For the new economic pressure campaign to be effective, the U.S. will need to mobilize its Western allies to form a coalition to enforce the measures against Iran.
• The Trump administration will also have to aggressively confront countries like China, Russia, India, Pakistan, Qatar, Turkey and others that still trade with Iran, something it hasn't done so far.

Reality check: Iran has been under international sanctions for years, but the regime hasn't significantly changed its behavior in the region or its posture regarding its nuclear program.

State of play: The war has sunk the Iranian economy into an even deeper crisis. Its currency, the rial, hit a new low Monday, dropping to 2 million rials to the U.S. dollar.

• The current U.S. naval blockade has prevented Iran from exporting most of its oil, cutting off the lifeblood of the economy.
• U.S. officials say Iran is struggling to establish alternative transport routes over land or sea, eroding its ability to provide basic goods and services.
• Soaring inflation is driving up food prices.
• President Trump and other U.S. officials say the regime is struggling to pay the salaries of government workers, including the military and police.
• "Their system is designed to insulate the elites, but even their purchasing power is plummeting, and some of them — for the first time in their lives — have faced uncertainty about whether their paychecks will arrive on time," a U.S. official said.

The other side: The Iranian leadership has tried to downplay U.S. threats of a new economic isolation push and even threatened to retaliate against countries that cooperate with the sanctions.

• At the same time, several senior Iranian leaders have acknowledged that the threat of an economic collapse is real.
• Iranian President Masoud Pezeshkian said the government does not deny the economic shortages and stressed that Iran should end the war now, while it is in a position of strength.
• The speaker of the Iranian parliament, Mohammad Bagher Ghalibaf, who is also the country's chief negotiator, said in a meeting with Iranian and Iraqi businessmen in Baghdad last week that Iran will not be able to sustain its security without a strong economy.
• "No matter how much military power we have," he said, "if people are hungry and we don't have financial circulation, economic growth and domestic production, we will not endure."
• Shortly before Bessent's news conference, Ghalibaf wrote on X that the U.S. "is not in an economic position to further restrict its relations with other countries" that do business with Iran.
• "Iran's trading partners have made clear, both publicly and in messages sent to us, that they do not take these U.S. statements seriously at all," he added.