Treasury Secretary Scott Bessent told CNBC on Thursday that the Trump administration’s plan to destroy Iran’s economy likely eliminates the need for a large-scale American military operation against the Islamic Republic.
“If we’re applying maximum economic pressure, that means there’s probably not going to be a large-scale reopening of the economy,” Bessent said in an exclusive interview with Squawk on the Street.
The Chief Cabinet Secretary’s comments came hours after President Donald Trump declared on Truth Social that the United States plans to cripple Iran’s economy by imposing significant economic sanctions on countries that provide “all kinds of lifelines” to Iran.
“This will be an economic D-Day, and we will need all of our allies to work with the United States to isolate and defeat the Iranian threat,” Trump said in a post Wednesday night.
The announcement comes as the war with Iran nears its six-month mark, with no indication that the United States is nearing a diplomatic or military victory.
Oil prices rose following a CNBC interview with Bessent in which the US vowed to create “the greatest coordinated economic isolation in the history of the world” against Iran.
He said he will hold a press conference on Monday to “talk specifically about what we will do.”
In a preview of the plan, he said the United States would tell all allies: “You’re either with us or you’re against us.”
“If you insist on doing business with[Iran]sending money, buying oil, shipping by sea, the U.S. Treasury Department and the U.S. government … will do everything in their power to enforce against you,” Bessent said.
“The time has come for our allies and the rest of the world to make a decision,” he said. “We are going to crush this murderous regime’s economy.”
He also dismissed initial skepticism about the plan, arguing that the economic pressure campaign would work in tandem with the ongoing U.S. Navy blockade of Iranian ports in the Gulf of Oman.
“It’s a one-two punch. We have a lockdown and we will impose the toughest sanctions in history,” he said.
“We are going to bring down this system,” he added.
President Trump has repeatedly asserted that the United States has already effectively destroyed Iran’s military and economy, and in a post on Truth Social on Wednesday night, claimed that Iran is “in a corner” and “hanging on a thread.”
Indeed, while Iran’s GDP is thought to have shrunk during the war, the country’s inflation has soared to historically high levels. However, some experts still caution against thinking that Iran’s economy is facing imminent collapse.
Iran also continues to exploit its ability to wreak havoc in the Strait of Hormuz, a waterway that carried 20% of global oil trade before the war began.
Despite increasing pressure from the United States and other regional powers, tanker transits through the strait remain significantly reduced. The United Arab Emirates announced on Wednesday it would suspend all trade with Iran after facing new ballistic missile attacks.
