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Trump Gives 'Economic D-Day' Warning 08/25 06:09
Treasury Secretary Scott Bessent announced a new round of sanctions aimed at
Iran on Monday and warned every country that does business with the Islamic
Republic to sever those financial ties or face retaliation from the United
States.
WASHINGTON (AP) -- Treasury Secretary Scott Bessent announced a new round of
sanctions aimed at Iran on Monday and warned every country that does business
with the Islamic Republic to sever those financial ties or face retaliation
from the United States.
President Donald Trump's pledge last week to unleash an "economic D-Day"
against Tehran turned out to be new warnings to cut off Iran from the rest of
the global economy. Asked why the U.S. was not imposing secondary sanctions on
Iran's trading partners, Bessent told reporters he wanted countries to have an
opportunity to shift away from Iran before it was too late.
"Why would I want to blow up the global financial system?" Bessent said.
The Trump administration is struggling to find an off-ramp nearly six months
into an unpopular war with an increasingly obstinate Iran. Diminishing
stockpiles of key weapons appear to have forced U.S. officials to pivot to
economic warfare, though Defense Secretary Pete Hegseth said later Monday that
he was not ruling out resuming strikes to hit Iran during a lull in hostilities.
Washington had promised new sanctions would put even more pressure on an
Iranian economy already battered by previous penalties and a U.S. naval
blockade.
But the announcement Monday provided little detail and did not name which
countries could face secondary sanctions. China, Turkey and the United Arab
Emirates are Iran's largest trade partners.
"We are level-setting with every country to tell them our expectations. We
know who they are. They know who they are," Bessent said. "So when the hammer
of U.S. Treasury actions falls upon them, they will have no one to blame but
themselves."
Dubbing the campaign "Operation Economic Outcast," Bessent said Trump has
been "making phone calls to world leaders with specific requests to cease their
interactions" with Iran and has already seen results.
The UAE announced last week that it was suspending all trade, commercial
exchanges and financial transactions with Iran until further notice after a
reported missile attack on the Gulf country. Bessent said the UAE decision was
"not a coincidence."
Shortly before the announcement, Iranian parliamentary Speaker Mohammad
Bagher Qalibaf said the U.S. is not in an economic position to further restrict
Tehran's relations with other countries.
"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," Qalibaf, who has been Iran's lead negotiator over the past six
months, posted on X.
Bessent is pressed on what the new campaign means for China
Asked whether the U.S. would target China, Bessent said that "no one is
above the reach of U.S. sanctions," despite the fragile trade truce in place
between the world's two largest economies.
"If they facilitate transactions and are part of the ecosystem that turns
Iranian oil into money, into repression, they will be targeted," he added.
Experts say the U.S. is likely to carefully calibrate its actions on China,
just a month before Chinese leader Xi Jinping is expected to visit the U.S.
How much the announcement matters "depends on the aggressiveness with which
President Trump is willing to enforce it," said Ali Wyne, senior research and
advocacy adviser for U.S.-China relations at the International Crisis Group.
"Thus far, despite threatening severe economic consequences for countries that
do business with Iran, he has largely given China a pass."
The Treasury Department said Monday that it was imposing sanctions on nearly
60 Iran-linked entities, accusing them of roles in Iran's nuclear and missile
programs, cyber activities and oil shipments.
That includes Hong Kong-based Sweet Ocean Industrial Limited and associated
people and businesses, which were accused of helping Iran acquire sensitive
goods such as laser optics equipment. Also penalized was China-based Shenzhen
Huamei, which is a service provider for the Iran-based logistics company BRE
Line, as well as BRE Line's branch in Hong Kong, for allegedly supporting the
missile and nuclear programs.
Iranian currency falls to a record low
Hours before Bessent's announcement, Iran's currency hit a record low.
The rial dropped to 2.02 million to the U.S. dollar as trading opened on
currency markets. Iran's official Central Bank rate stood at around 1.5 million
rials to the dollar, but the market rate is what most Iranians pay.
The currency had already been under pressure before the U.S. and Israel
attacked Iran on Feb. 28, as Iran faced double-digit inflation and negative
growth. The rial has repeatedly hit new lows as nearly six months of war have
taken an even greater toll.
Iranians find daily staples increasingly unaffordable. Since the war began,
rice is up some 60% and beef prices are more than 150% higher. The
International Monetary Fund forecasts that gross domestic product will contract
more than 5%.
Still, economic pressure has not yet translated into political pressure.
Iran retains a key strategic advantage: Its attacks and threats on ships in the
Strait of Hormuz have brought traffic in the vital waterway to a near halt,
damaging the world economy and heaping pressure on U.S. President Donald Trump
ahead of congressional elections.
The war, as a result, has devolved into a fight over who controls the
strait, through which a fifth of the world's traded oil transited before the
conflict. Iran is now refusing to fully reopen it unless it can charge ships.
Iran and Oman, which is on the opposite side of the strait, are reportedly
in the final stages of agreeing on a plan for joint management of the waterway.
Oman's foreign minister is set to visit Iran on Tuesday.
Pakistani delegation visits Iran
Pakistan, which played a key role in brokering a 60-day ceasefire in June,
sent a high-level delegation to Iran on Monday to encourage the U.S. and Iran
to return to negotiations, two senior officials said. The officials spoke on
condition of anonymity because they were not authorized to speak to the media.
The military confirmed only Field Marshal Asim Munir's visit, saying it was
aimed at de-escalating tensions in the region.
Trump spoke with Munir ahead of the army chief's visit to Iran, according to
a person familiar with the discussion who spoke on condition of anonymity to
confirm a private conversation. Reuters, citing Pakistani sources, first
reported the call.
Munir met Iranian Interior Minister Eskandar Momeni in Tehran, according to
the two senior officials. Munir was accompanied by Pakistani Interior Minister
Mohsin Naqvi and other officials. Munir was expected to remain in Iran
overnight and meet the Iranian president and other senior officials before
returning to Pakistan.
His previous visit to Tehran in May helped pave the way for a memorandum of
understanding signed by the U.S. and Iran in June.
In downtown Tehran, 73-year-old Sadegh Mahmoudi did not hold out hope for a
resolution. He joined a line of about a dozen people to purchase U.S. dollars
with his remaining savings to hedge against further declines.
"There is no hope for a deal and peace," he said.
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