Treasury launches ‘Operation Economic Outcast’ against Iran

U.S. Treasury Secretary Scott Bessent announced an “economic onslaught” against Iran’s global trade partners on Monday as part of the financial “D-Day” that U.S. President Donald Trump declared last week.

Bessent said that the sanctions program, “Operation Economic Outcast,” was an “unprecedented, whole-of-government” campaign to “collapse every last option for Iran.”

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“For decades, this regime has drawn strength from a calculus that regards Iranian retaliation as certain and American enforcement as negotiable,” Bessent told reporters. “That era is over.”

Iran’s economy has long been subject to primary economic sanctions aimed at hindering its ability to trade oil, fund terrorist groups around the region and finance its missile, drone and nuclear programs.

Successive administrations have declined, however, to impose secondary sanctions on many countries and companies that do business with Iran. Many of the countries that retain economic ties with Iran are close partners of the United States, including many of the Arab countries in the Persian Gulf.

The department has also generally refrained from imposing sanctions on Chinese banks and oil refineries that transact business with Iran in apparent fear of economic retaliation.

Though he declined to “name names,” Bessent suggested that those secondary sanctions would finally be imposed.

“We want to make clear here today that no one is above the reach of U.S. sanctions,” Bessent said in response to a question about the potential sanctioning of Chinese entities. “We find that the best way to engage with countries is through quiet diplomacy, and we are level-setting with every country to tell them our expectations.”

“We know who they are. They know who they are,” he said. “When the hammer of U.S. Treasury actions falls upon them, they will have no one to blame but themselves.”

Bessent said that teams from the U.S. military and Treasury and State Departments were meeting with counterparts around the world to explain the new policy.

The United Arab Emirates said that it was cutting off its trade and financial ties to Iran after the Islamic Republic fired a pair of ballistic missiles towards the country on Tuesday.

The treasury secretary said that he expected other countries to follow suit.

“You will see a wave of sanctions when you leave this meeting today, and you should expect that cadence to continue,” Bessent said. “I would expect that you will see a major announcement of a financial institution being sanctioned by the end of this week.”

Asked why the Trump administration was not imposing secondary sanctions immediately, Bessent said that he did not want to “blow up the global financial system.”

“We believe that it is important to level-set and give people a cure period,” he said.

As part of the sanctions announcement, the Treasury Department said it could now sanction “any person, regardless of where they are located” who dealt with the Iranian cryptocurrency, gold, technology, shipping and aviation sectors, which Bessent called “Iran’s most vital lifelines.”

The move comes as the United States and Iran remain in a deadlock after the collapse of a ceasefire memorandum that the Trump administration believed would allow energy shipments in the Persian Gulf to resume.Iran’s continued attacks on shipping led Trump to declare the ceasefire “over” on July 8 and to re-impose an economic blockade on Iran.

The Trump administration has claimed that it has enabled vast quantities of oil to transit the Strait of Hormuz despite the threat of Iranian attacks. Open-source analysts, who track international shipping, have disputed those claims.

Israeli Prime Minister Benjamin Netanyahu welcomed the new economic operation against Iran.

“You justly exact a steep price from that cruel dictatorship and from those who assist its continued aggression,” Netanyahu wrote.

Iran’s leaders have largely dismissed the threat of further U.S. sanctions.

“Americans know that no one buys their bombast. The United States is not in an economic position to further restrict its relations with other countries,” Iranian parliamentary speaker Mohammad Bagher Ghalibaf wrote shortly after Bessent’s announcement.

“Iran’s trading partners, both in the media and through messages sent to us, have made it clear that they don’t take these statements into account anywhere,” he said.

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