Iran threatens retaliation as US launches sweeping sanctions campaign

The United States has launched what its Treasury secretary calls the most comprehensive financial assault ever directed at a single adversary, and Iran is promising to strike back. Scott Bessent framed the campaign in stark terms: total economic isolation, enforced globally, with consequences for any nation or company that continues trading with Tehran. The message was unambiguous. Either align with Washington or face American economic retaliation.

The UAE, historically Iran's largest Middle Eastern trading partner, moved first. Days before the formal US announcement, it severed all commercial ties with Iran—a decision Tehran interprets as coordinated with Washington rather than independent. The timing suggested the shape of what was coming: a coordinated squeeze, tightening from multiple directions at once.

But the real test lies elsewhere. India, China, and Russia will determine whether American threats carry weight. China has been the dominant buyer of Iranian oil for decades, a relationship built on mutual need and strategic calculation. In May, when the US threatened sanctions against Chinese refiners and their lenders, Beijing's commerce department simply instructed Chinese firms to ignore the warnings. The Chinese foreign ministry called the threats illegitimate. Washington backed down, recognizing that a full trade war with China over Iranian oil was a fight it could lose. This time, the Chinese foreign ministry spokesperson Lin Jian repeated the same position: unilateral sanctions lack international legal standing, and military pressure solves nothing.

Yet circumstances have shifted in Washington's favor, at least temporarily. A US naval blockade of Iranian ports has already choked off nearly all oil shipments to Asia. Iran's central bank governor acknowledged last week that crude exports had essentially stopped. The rial has collapsed, losing 4.5 percent of its value in days as hyperinflation accelerates and foreign currency dries up. The White House believes the Iranian economy is teetering toward breakdown. President Trump declared on social media, in capital letters, that Iran was collapsing entirely.

But Iran has endured some form of American maximum pressure for more than two decades and survived. Tehran's security chief, Mohsen Rezaei, promised an "earthquake-like" response if the sanctions proceed. He also issued a direct warning to Iran's Gulf neighbors: if they join the American campaign, not a single barrel of oil will leave the Persian Gulf or pass through the Strait of Hormuz. Iran would target other export routes as well. Shipping through the strait was already severely disrupted over the weekend, adding fresh pressure to global energy markets.

Iran's foreign minister, Abbas Araghchi, dismissed the coming sanctions as evidence of American desperation, arguing they would fail as previous measures had failed. An international lawyer with ties to Iran's foreign ministry offered a different framing: the sanctions are not truly about Iran at all. They represent a claim of jurisdiction over the entire world, a demand that no country allow its banks, businesses, or shipping registries to engage in lawful trade with another sovereign nation. Sovereignty itself is the target.

A professor of West Asian studies at the University of Tehran noted that nothing in this campaign is actually new. Every sector of the Iranian economy has been under primary or secondary sanctions since 2018. Those measures failed to achieve their stated goals, which is why the US and Israel shifted to military action. The current economic offensive, he suggested, is a public admission of failure—a step backward after military operations proved insufficient. Iran has been signaling in recent weeks that it will no longer accept economic warfare passively. The calculations now involve military capabilities, American domestic politics, and conditions inside Iran itself.

Treasury Secretary Bessent has been explicit about the stakes. The US will use all its power against anyone who refuses to comply. Either countries are with Washington or against it. Those who sever Iran's remaining financial connections will gain deeper access to global capital and reinforce confidence in their own markets. But China and Russia have shown no interest in yielding to pressure. Pakistan's army chief arrived in Tehran on Monday to explore reviving a stalled memorandum of understanding, a reminder that even as Washington tightens its grip, other powers continue their own calculations in the region.