Trump ramps up Iran sanctions as war drags on and US weapons dwindle

The Trump administration has unveiled a sharper sanctions drive against Iran, including possible secondary penalties on its trade partners. The move signals a high-stakes bet that financial isolation can succeed where war and diplomacy have stalled.

In Short

• Scott Bessent signalled secondary sanctions on nations and firms trading with Iran
• US officials say naval blockade and strikes have increased Tehran's vulnerability
• The UAE trade suspension could further squeeze Iranian re-exports and revenues

The Trump administration has announced what it called an unprecedented escalation of economic pressure on Iran, shifting focus to sanctions as the war nears the six-month mark and US stockpiles of key weapons come under strain. President Donald Trump said the move was meant to force Tehran to end its nuclear programme and fully reopen the Strait of Hormuz to oil and natural gas tankers.

The move comes as Trump faces growing pressure over a war he has struggled to end, with midterm elections approaching. The administration says tougher sanctions can push Iran to breaking point, but analysts remain divided, with some backing the approach and others warning that past US experience suggests Tehran does not respond well to pressure alone.

In an interview with CNBC on Thursday, Treasury Secretary Scott Bessent gave a glimpse of the next phase of what the administration has called "Operation Economic Fury", saying the US could impose secondary sanctions on countries and companies that continue to do business with Iran. He did not name specific targets, though China and India are major buyers of Iranian oil. "If you insist on doing business with them, then the US Treasury and US government will put its full might and force against you," Bessent said. "It's time for our allies and the rest of the world to make a decision."

Washington has argued that, despite decades of sanctions on Iran, the right economic pressure at the right time could now force a shift in Tehran. Richard Goldberg, who coordinated diplomatic pressure on Iran during Trump's first term, said US strikes on Iran's nuclear sites last year, this year's war and the American naval blockade on Iranian ports had created conditions for capitulation that did not exist earlier. "I think we're watching a strategy, whether it takes a short time or a long time, that is very much about fundamentally changing the future of the world by seeing the end of this regime," said Goldberg, now with the Foundation for Defense of Democracies. He added, "I caution everyone - including myself, who has worked on sanctions, who's worked on financial warfare - to have the humility to admit that we are in uncharted waters."

Goldberg also said the United Arab Emirates' decision this week to suspend trade with Iran over an alleged missile attack would deepen Tehran's isolation. The UAE had been one of Iran's most important trading partners and had helped soften the impact of sanctions through re-exports. With most of Iran's energy, financial and transport sectors already under US sanctions, the latest effort appears aimed at cutting off any income still reaching the country by penalising allies and partners that maintain ties with Tehran.

The approach marks a return to Trump's first-term "maximum pressure" campaign, now combined with military action. But the earlier effort also showed the difficulty of enforcing secondary sanctions without damaging US interests or triggering retaliatory steps, and the administration had granted waivers in several cases, especially to countries dependent on Iranian oil. Behnam Ben Taleblu, senior director of FDD's Iran programme, said, "Trump's strategy now rests on targeting Tehran directly by impeding its touch points and access to the formal financial system and international economy. This will require making the Iran issue more important in US bilateral relations with countries in Europe and Asia."

Iranian officials and other analysts have criticised the latest shift, accusing Trump of returning to a sanctions strategy he had earlier mocked in past administrations. In a post on X last week, Foreign Ministry spokesman Esmail Baghaei said Washington's habit of falling back on sanctions instead of diplomacy had repeatedly failed. "Iran has demonstrated over decades that it will not be strangled by these exhausted refrains," he said. "The real risk is that American politicians, clinging to this bad habit, will instead strangle their own remaining chances of a less humiliating exit from a crisis of their own making."

Ali Vaez, Iran director at the International Crisis Group, said the administration appeared to be ignoring years of US policy lessons showing that Iran does not respond well to pressure, and argued that the latest campaign had only "hardened Iran's position". "I think (Trump's) blind spot is the fact that the only thing that the Iranian regime views as more dangerous than suffering from US sanctions is surrendering to US terms," Vaez said. He added that stop-start diplomacy over the past year had further damaged trust, with Iranian officials believing that even if they conceded under economic pressure, Trump would "move the goalposts and ask for more". "And this is really the fundamental problem: Pressure without an open door is an exercise in futility," he said.

As the war continues, the Trump administration is betting that tighter financial isolation can achieve what military and diplomatic efforts have not, while critics argue that Iran is more likely to dig in than give way.

With PTI Inputs

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