Iran could face economic collapse in months, US Treasury’s Bessent warns

US Treasury Secretary Scott Bessent stated that Iran is taking newly imposed US sanctions seriously, potentially facing economic collapse within months. Speaking at a G20 finance ministers meeting in North Carolina, Bessent indicated the sanctions, part of "Operation Economic Outcast," aim to bring Iran to the negotiating table. He suggested Iran's kinetic actions stem from economic losses. Last week, the US sanctioned five sectors of Iran's economy and 60 individuals and vessels. Bessent also highlighted support for these sanctions from trading partners, including the European Union, which stated it welcomes economic pressure to cease Iran's destabilizing activities and encourage good-faith negotiations.

The United States has imposed new sanctions on Iran, termed "Operation Economic Outcast," aiming for maximum economic isolation. However, the article argues these sanctions are unlikely to succeed. Pakistan and China have already stated they will continue trading with Iran, defying the US. Historically, economic sanctions have not toppled determined governments, instead potentially impoverishing populations and creating rallying points against the sanctioning nation. Furthermore, the sanctions target Iran's oil exports at a time when global oil supply is already significantly reduced due to the closure of the Strait of Hormuz, risking further stagflation for allied economies. The article suggests the US strategy of starving Iran into capitulation is illegal, cruel, and destined to fail.

The United States is increasing pressure on China through a series of sanctions and tariffs, with the latest move targeting nations purchasing Iranian crude oil. While China was not explicitly named, it is Washington's primary target as the largest customer of Iranian oil. The US has already imposed sanctions on individuals, companies, and vessels involved in Iranian trade, including those in China. This escalation follows recent US actions such as adding Chinese companies to a military list and imposing tariffs on various Chinese goods. China has responded with a calibrated approach, avoiding broad retaliation and instead focusing on striking back when its core interests are threatened. This ongoing tension signifies a potential major rupture in US-China relations.