Bessent urges US partners to back plans to 'squash' Iran economy

US Treasury Secretary Scott Bessent urged US allies to "make a decision" on whether they will support Washington's efforts to "squash" the Iranian economy.

Bessent's remarks come after US President Donald Trump said on his social platform Truth Social that countries providing "any type of lifeline" to the Islamic Republic's regime will face "tremendous economic consequences" .

The Treasury secretary did not offer any insight on the measures Trump's team is looking to implement but noted the underlying message to US allies will be: "You are either with us or against us".

"It is time for our allies and the rest of the world to make a decision," Bessent told broadcaster CNBC.

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Bessent said the new economic penalties will be part of "the greatest coordinated economic isolation in the history of the world".

"If you insist on doing business with them, either transferring money, buying their oil… then the US Treasury and the US government will put [their] full might and force towards enforcing against you."

The Cabinet secretary also argued that the planned pressure campaign on the Iranian economy will minimise the need of a "large-scale kinetic restart" of the conflict.

Bessent confirmed further details about the plan will be made public at a press conference on 24 August.

One Iranian businessman told Middle East Lifeline that the prospect of fresh sanctions is forcing global companies to consider the potential losses they face by investing in Iran.

"I do business with different countries, and if every country that trades with Iran is at risk of sanctions, I have to think very carefully before making any deal, because I could end up losing money," he said.

The Iranian economy has long been struggling under the weight of decades of international sanctions, which left it in tatters.

Earlier this year, Iran experienced weeks of protests due to the spiralling cost of living and inflation – with everyday Iranians blaming the regime for their difficulties.

Official figures show that in the 12 months to February 2026, the price of basic necessities increased by an average 60% , while food prices doubled in the same period.

At the time, Trump told demonstrators "help is on the way" as he urged them to "keep protesting".

A little over a month later, the US joined Israel in its attack on Iran - and later implemented a blockade on Iranian ports, threatening further sanctions.

In April, the US launched a wave of sanctions on foreign banks and firms doing business with Tehran after it became apparent military operations had not led to the overthrow of Iran's regime nor its surrender, as Trump had initially hoped.

Operation Economic Fury, announced by the US Treasury Department and the Pentagon in April, aimed at degrading Tehran's warfighting capability by cutting off its revenue streams, and also included a naval blockade aimed at stopping Iranian exports.

The Memorandum of Understanding (MoU) signed by Iran and the US in June included a clause stating that the US would "terminate all types of sanctions" against Iran in an agreed-upon schedule.

Instead, Trump is now gearing up to unleash the "most crushing economic operation ever taken against any country".

One resident in the central Iranian province of Khuzestan told the BBC the country has a long experience with sanctions, and will be able to overcome the additional economic pressure.

"There may be an impact at first, but that doesn't necessarily mean Iran won't be able to overcome the crisis," he said.

Another resident also doubts fresh penalties will have an impact on the longevity of the regime.

"Not everything changes because of statements made by President Trump," she told Middle East Lifeline.

"Iran has been living under sanctions for years, and people have become accustomed to this situation. I'm sure Iran will find other ways to continue trading."

"Of course, there will be some impact and the economy may weaken, but that doesn't mean it will collapse."

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