US threatens toughest sanctions yet against Iran: What we know

EXPLAINERTehran has threatened to retaliate against any country that joins new US economic measures.Published On 24 Aug 2026With diplomacy stalled over ending the war on Iran, Washington is seeking to ratchet up pressure on Tehran with “unprecedented” economic pressure.After United States President Donald Trump threatened to punish any country doing business with Tehran last week, US Treasury Secretary Scott Bessent said that a new series of economic measures will “collapse” the Iranian government, calling on countries to join the effort.On Saturday, Tehran threatened to retaliate against any country that joins the US in economic sanctions against it.Here’s what we know about what the US is planning and how Iran could respond.What new measures is the US threatening against Iran?The Trump administration has already been waging an economic pressure campaign against Iran under the banner of “Operation Economic Fury”, since the launch of the war in February.In particular, it is currently running a naval blockade on Iranian ports in a bid to prevent oil exports and has targeted companies, brokers and tankers accused of helping Iran sell its oil abroad.It also has longer standing sweeping sanctions in place on Iran’s oil, shipping and financial sectors, seeking to cut off the revenue Tehran earns from energy exports. It has also imposed a naval blockade on Iranian ports.Now, the US says it will do more.In a Truth Social post on Wednesday, Trump announced what he called the “most crushing economic operation” against Iran.Trump said Iran had “failed to take” the opportunity to make a deal, and would face “economic warfare and isolation on an unprecedented scale”.He also threatened sanctions against any country that does business with Iran.“ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences,” he wrote.“Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies – it all needs to stop NOW. You know who you are. This will be an ECONOMIC D-DAY, and we need all of our Allies to stand with the United States of America to isolate, and defeat, the Iran threat.”On Thursday last week, one day after Trump’s social media tirade, Bessent told the news service CNBC that the US would apply the “toughest sanctions in history” on Iran.“It is a one-two punch. We have the blockade [on Iran], and we are going to have the toughest sanctions in history,” Bessent said. “It is going to work in Iran, and we are going to collapse this regime.”He then offered a warning to the members of the international community that they, too, could face economic penalties if they continue to trade with Iran.“We’re going to them and saying: You’re either with us or against us,” Bessent said. “If you insist on doing business with them – either transferring money, buying oil, doing seaborne ship transport – then the US Treasury and the US government, they will put its full might and force towards enforcing against you.”He billed the US’s strategy as the “greatest coordinated economic isolation in the history of the world”.“It is time for our allies and the rest of the world to make a decision,” Bessent added.How has Iran responded?Iran has decried any new, impending US sanctions – particularly economic action against other countries – as a “complete erosion of sovereignty”.In a post on X on Saturday, Iran’s Foreign Ministry spokesman Esmaeil Baghaei said the US announcement was “an assertion of extraterritorial sovereignty” against the United Nations’ member states.No state can compel foreign banks, enterprises or airports to renounce commerce with Iran, he said.“The end result would be the complete erosion of sovereignty as the foundational basis of the UN-based inter-State system, and a recipe for an abysmal return to full-scale classic colonialism,” Baghaei said.Iranian state media pointed out that Tehran has faced US sanctions for decades. Iranian Foreign Minister Abbas Araghchi said the new measures were “bound to fail”.“We have seen this movie before,” Araghchi wrote on X, alongside a screenshot of a tweet from former President Barack Obama referencing earlier sanctions in 2012. “Same bull. Different bullies.”Can Iran target countries that acquiesce to US demands?On Saturday, Tehran threatened to retaliate against any country that joins the US in economic sanctions against it.Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, told the IRIB state broadcaster that Iran was appealing to all countries around the world, including its neighbours, not to join the US’s “economic war”.“Any country that takes part in imposing economic restrictions on us will be regarded as an enemy,” he said, warning of a “seismic” retaliation.Rezaei described Iran’s strategy as a three-stage 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 aside and distance themselves from the United States. But if they do not act, we will strike. We will target that country’s interests,” he said.Rezaei also warned Iran’s neighbours that if they participate in Trump’s economic warfare, “not even a drop of oil” will leave the Gulf region, including by alternative export routes away from the Hormuz chokepoint through which one-fifth of global oil and gas exports pass in peacetime.Iran has already launched strikes on US military installations, infrastructure and civilian locations in the region since the war began on February 28.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 strikes by Iran or its proxy groups across the region.The US operates military facilities in more than a dozen locations across the Middle East and North Africa, including in Gulf nations, such as Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE. Thousands of US soldiers are also stationed across the region, including in Jordan.Hamidreza Azizi, a researcher on Iran at the Clingendael Institute, said in a post on X on Saturday: “Tehran appears to be trying to establish deterrence at an earlier stage, by signalling that even preparations for an attack could trigger an Iranian response.”Azizi said two elements in the new “offensive doctrine” are emerging: preemption, which is aimed at preventing a perceived threat from materialising; and disproportionate retaliation, which is aimed at raising the cost of any attack that does occur.How have other countries responded to Trump’s demands?China has pushed back against Trump’s threats.“Imposing sanctions and pressuring do not help to solve the issue,” China’s Foreign Ministry spokesman Lin Jian told reporters in Beijing on August 20.“China calls on relevant parties to take responsible measures and solve the issues through diplomatic and political means.”Gulf countries, which are Iran’s neighbours and also US allies, have increasingly been finding themselves caught in the middle of the war. Therefore, it is unclear if they would all join Washington in economically threatening Iran further.Last week, the UAE, on which Iran is believed to rely for critical imports and financial services through which it sells oil, announced an indefinite trade embargo on Iran, after accusing Iranian forces of firing two ballistic missiles at the country, an allegation Tehran denies.