Trump launches ferocious ‘economic onslaught’ to cripple Iran after bombing campaign and peace deal stalls… with chilling warning to China
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Iran's rial has collapsed to an all-time low after the Trump administration launched "Operation Economic Outcast", a sweeping new sanctions drive targeting any country or entity that trades with Tehran. Treasury Secretary Scott Bessent framed the move as an "economic onslaught" designed to sever Iran's remaining global economic links, explicitly warning China and other buyers of Iranian oil that continuing to trade with Tehran risks losing access to the US financial system. The escalation marks a shift in the nearly six-month conflict from military strikes towards financial pressure, coming after peace talks stalled last month and as the war approaches its six-month mark on 28 August.
The newly expanded sanctions cover digital assets, technology, gold, aviation and shipping, adding to decades of existing restrictions and closing loopholes Iran has used, such as shell companies, to keep trading. Following the announcement, the rial fell to roughly 1.3 million to the US dollar, its weakest level on record, deepening the inflation crisis that has gripped the country since the war began. Bessent said the campaign aims to "sever every economic lifeline" sustaining the regime, while Trump declared Iran to be in an "economic and military death spiral"; no fresh developments have followed the initial rollout.
- US launched "Operation Economic Outcast", sweeping new sanctions on Iran's trade partners.
- Iran's rial crashed to a record low, about 1.3 million per dollar.
- Move warns China and others: choose America or Iran, no exemptions.
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Iran's economy has been under severe strain for months, following a period of military conflict with the United States and Israel earlier this year that included American bombing raids on Iranian nuclear-related sites. Efforts since then to negotiate a lasting peace deal have failed to produce a breakthrough, leaving relations between Washington and Tehran deeply strained.
Rather than further military action, the Trump administration has turned to economic pressure as its main tool against Iran, using sanctions to restrict the country's access to global trade and finance. Treasury Secretary Scott Bessent is the official leading this effort, and China features prominently because it has continued buying Iranian oil despite existing US restrictions, making it a target of Washington's warnings.
Sanctions of this kind matter because they can cut a country off from international banking, trade and technology, often causing its currency to lose value and prices at home to rise sharply. Iran's government, economy and ordinary citizens have already been affected by previous rounds of sanctions, so any further tightening carries the potential to deepen hardship and heighten tensions in the wider region.
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The strongest fair case each way — we don't pick a winner.
The case for
Supporters argue that a maximum-pressure sanctions campaign is a legitimate and comparatively humane tool for compelling Tehran back to the negotiating table without further military action, targeting the regime's financial lifelines rather than its population directly. They contend that Iran's continued nuclear ambitions and support for regional proxies justify robust economic coercion, and that extending sanctions to third parties such as China who help Iran evade restrictions is necessary to close loopholes that would otherwise render the whole regime toothless. From this perspective, a collapsing currency and isolated economy are the price of past defiance, and sustained pressure is what ultimately brings adversaries to negotiate seriously and durably.
The case against
Critics argue that sweeping sanctions of this kind inflict disproportionate suffering on ordinary Iranians, driving up the cost of food, medicine and fuel while the political and military elite remain comparatively insulated. They contend that framing the policy as an ultimatum to the rest of the world, warning that other nations must choose between America and Iran, risks alienating allies and trading partners, straining relations with China, and pushing Tehran further from compromise rather than closer to it. Sceptics also warn that declaring an adversary in economic and military death spiral while peace talks have already collapsed may harden Iranian resolve, entrench hardliners domestically, and foreclose the very diplomatic opening the sanctions are ostensibly meant to produce.
More coverage
- The Hill — Trump forgoes military strikes, attempts economic chokehold on Iran
- NPR — Can Trump's economic war against Iran do what airstrikes and negotiations couldn't?
- The Hill — The Memo: Trump and Bessent crank up economic pressure on Iran as other options fall short
- The Guardian — ‘Economic D-day’: How desperate is Trump to end Iran war? – The Latest
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