As diplomacy stalls over ending the war against Iran, the US government is trying to increase pressure on Iran with “unprecedented” economic pressure.
After US President Donald Trump last week threatened to punish countries that do business with Iran, US Treasury Secretary Scott Bessent said a new package of economic measures would “destroy” the Iranian government and called on countries to join the effort.
On Saturday, the Iranian government threatened to retaliate against any country that joins economic sanctions against the United States.
Here’s what we know about what the US is planning and how Iran will respond.
What new measures is the US threatening against Iran?
The Trump administration has already been waging a campaign of economic pressure against Iran under the banner of “Operation Economic Outrage” since the war began in February.
In particular, it currently has a naval blockade of Iranian ports aimed at preventing oil exports, and is targeting companies, brokers, and tankers suspected of helping Iran sell oil abroad.
It also maintains long-term, wide-ranging sanctions against Iran’s oil, shipping, and financial sectors, aimed at cutting off the income Iran receives from energy exports. It also imposed a naval blockade on Iranian ports.
Now the US says it will do more.
In a post on Truth Social on Wednesday, President Trump announced what he called the “most devastating economic operation” against Iran.
Trump said Iran “failed to take advantage” of the opportunity to forge a deal and would face “economic warfare and isolation on an unprecedented scale.”
He also threatened to impose sanctions on countries that do business with Iran.
“Any country that allows its financial institutions, businesses, airports and government agencies to provide any kind of lifeline to Iran will find itself facing significant economic consequences,” he said.
“Oil smuggling, swap lines, cash transfers, currency exchanges, ship registries, front companies, everything has to stop now. You know who you are. This will be D-Day for the economy, and we need all of our allies to work with the United States to isolate and defeat the Iranian threat.”
Last Thursday, a day after Trump’s social media rant, Bessent told news service CNBC that the United States would impose the “toughest sanctions in history” against Iran.
“It’s a one-two punch. We’re blocking (Iran) and we’re going to impose the toughest sanctions in history,” Bessent said. “It will work in Iran, and we will bring down this regime.”
He also warned members of the international community that they too could face economic penalties if they continue to trade with Iran.
“We’re going to go to them and say, ‘You’re either with us or you’re against us,'” Bessent said. “If you insist on doing business with them — whether it’s sending money, buying oil, or shipping by sea — the U.S. Treasury Department and the U.S. government will do everything in its power to enforce enforcement against you.”
He called the U.S. strategy “the greatest coordinated economic isolation in the history of the world.”
“It’s time for our allies and the rest of the world to make a decision,” Bessent added.
How did Iran react?
Iran has condemned the impending new sanctions by the United States, especially its economic actions against other countries, calling it a “total erosion of its sovereignty.”
Iranian Foreign Ministry Spokesman Esmail Baghai said in a post on X on Saturday that the US announcement was an “extraterritorial claim” against the UN member state.
He said no nation can force foreign banks, companies or airports to abandon trade with Iran.
“The end result will be a complete erosion of sovereignty as the foundational basis of the United Nations-based inter-state system and a dire return to full-fledged classical colonialism,” Bagai said.
Iranian state media noted that the Iranian government has been facing US sanctions for decades. Iranian Foreign Minister Abbas Araghchi said the new measures were “inevitable to failure.”
“We’ve seen this movie before,” Arraguchi wrote to X, along with a screenshot of former President Barack Obama’s tweet referencing the earlier sanctions in 2012. “Same bull. Different bully.”
Can Iran target countries that acquiesce to U.S. demands?
On Saturday, the Iranian government threatened to retaliate against any country that joins economic sanctions against the United States.
Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, told IRIB state television that Iran is appealing to countries around the world, including neighboring countries, not to join the US’s “economic war.”
“Any country that participates in imposing economic restrictions on us will be considered an enemy,” he said, warning of “seismic” retaliation.
Rezaei described Iran’s strategy as a three-step sequence, starting with talks to de-escalate tensions.
“Of course, we will first negotiate with them. We will hold talks and tell them to step back and distance themselves from the United States. But if they do not act, we will attack. We will target the interests of that country,” he said.
Rezaei also warned Iran’s neighbors that if Iran joins Trump’s economic war, “every drop of oil” will leave the Gulf region, including through alternative export routes away from the Hormuz chokepoint, through which a fifth of the world’s oil and gas exports pass during peacetime.
Since the war began on February 28, Iran has already launched attacks on US military facilities, infrastructure, and civilian facilities in the region.
Energy and other facilities in Qatar, Kuwait, Saudi Arabia, Bahrain and the United Arab Emirates (UAE) have also suffered damage, mostly from debris from intercepted attacks by Iran or its proxies across the region.
The United States operates military facilities in more than a dozen locations in the Middle East and North Africa, including in Gulf states such as Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE. Thousands of U.S. troops are also stationed throughout the region, including Jordan.
“Iran appears to be trying to establish deterrence at an earlier stage, signaling that even preparation for an attack could provoke an Iranian response,” Hamidreza Azizi, an Iran researcher at the Clingendael Institute, said in a post on X on Saturday.
Azizi said two elements of a new “aggressive doctrine” are emerging. and unwarranted retaliation aimed at increasing the cost of an actual attack.
How have other countries responded to President Trump’s demands?
China is pushing back against President Trump’s threats.
Chinese Foreign Ministry Spokesperson Lin Jian told reporters in Beijing on August 20 that “sanctions and pressure will not help solve the problem.”
“China urges all concerned parties to take responsible measures and resolve the issue through diplomatic and political means.”
Gulf states, Iran’s neighbors and allies of the United States, are increasingly drawn into the war. Therefore, it is unclear whether all of them will join Washington to further threaten Iran economically.
Last week, the UAE, which Iran is believed to depend on for imports and financial services needed to sell oil, announced an indefinite embargo on Iran after accusing the Iranian military of launching two ballistic missiles into the country, a claim Tehran denies.
However, analysts told Al Jazeera that many Gulf states are concerned about possible chaos if the Iranian government collapses. They said that while confidence in regional diplomacy was low, no country could tolerate another prolonged war.
“At the end of the day, the Gulf states can’t change their geography. They have to live and work with Iran,” Simon Mabon, a professor of international relations at Lancaster University, said in an interview with Al Jazeera last month. “They don’t want the destabilization that would come from the collapse of the Islamic Republic of (Iran). I think some Gulf states are pushing for a stronger attack. Not to promote collapse, but to weaken the more hardline wing of the Revolutionary Guards.”
Will China and Russia be able to protect Iran from US measures?
Although the United States has threatened any country that continues to trade with Iran, analysts say Trump has limited influence over China and Russia, Iran’s main trading partners.
Paul Musgrave, an associate professor of government at Georgetown University in Qatar, told Al Jazeera last week that it would be “very difficult” for President Trump to effectively carry out a pressure campaign.
“President Trump is unilaterally insisting on the type of coordinated sanctions that traditionally required multilateral coordination, and that means joining China, Russia, and the P5 of the United Nations Security Council,” Musgrave said, referring to the five permanent members of the Security Council.
This is because some sectors in Russia and China have minimal dependence on the US financial system.
These sectors include most of China’s refineries. China bought 80% of the crude oil shipped from Iran in 2025, according to analysis firm Kpler. Evidence of ship-to-ship transfers of Iranian oil off the coast of Malaysia also shows how Iranian oil continues to be traded.
Analysts say China could strike back if the U.S. sanctions large Chinese banks for their handling of Iranian funds, as the U.S. Treasury has threatened to do.
Yu Jie, a senior fellow in the China and Asia-Pacific Program at think tank Chatham House, told Al Jazeera: “President Trump is trying to stabilize relations with China and (this is going to happen) because Beijing is seeking a temporary truce with Washington.”
Although Russia is not as important a trading partner for Iran as China, Russia and Tehran have spent years building important commercial and military ties to circumvent Western routes. Notably, Iran provided Shahed drones to Moscow for use in the war against Ukraine.
