US-Iran Tensions Escalate: Trump Imposes 'Toughest Sanctions in History' on Tehran
The United States will impose the ‘toughest sanctions in history’ on Iran, US Treasury Secretary Scott Bessent said in an exclusive interview with CNBC International on Thursday local time. The statement reinforces President Donald Trump’s earlier comments that he would shift strategy towards Iran from the current military operations, threatening an ‘economic war’ and warning of further economic consequences for any country providing ‘assistance in any form to Iran’.
‘If we apply maximum economic pressure, then it is highly likely there will be no resumption of large-scale military operations,’ Bessent said in the exclusive interview with ‘Squawk on the Street’, quoted on Friday (21/8/2026). ‘The US will create the largest coordinated economic isolation in world history,’ he asserted.
‘If you insist on doing business with Iran, whether by transferring money, buying their oil, or transferring ships by sea, then the US Treasury Department and the US government… will deploy their full force and capabilities to enforce action against you,’ Bessent continued. ‘It is time for our allies and the entire world to make a decision… We will destroy the economy of this murderous regime.’
Bessent also stressed that the economic pressure would proceed alongside the ongoing naval blockade imposed by the US on the Strait of Hormuz. Earlier in the week, Trump made headlines by claiming the Strait of Hormuz was ‘US territory’. ‘This is a one-two punch. We have the blockade, and we will impose the toughest sanctions in history,’ Bessent said. ‘We will bring down this regime,’ he added.
Iran’s gross domestic product is believed to be contracting due to the war, while inflation in the country has soared to its highest level in history. However, a number of experts say this cannot automatically be assumed to mean that Iran’s economy will soon collapse.
Meanwhile, Iran’s Ministry of Foreign Affairs said it condemned the US economic and trade sanctions, calling them ‘economic terrorism’ that would target the Iranian people and could be considered a crime against humanity. In a statement on X, Iranian Foreign Minister Abbas Araghchi described the new US measures as an attempt to ‘multiply a failed policy that will only bring further defeat and hostility from the Iranian people’.
Oil prices rose to their highest level in more than three weeks on Thursday following the US threats of financial punishment. The US is currently engaged in a six-month war with Iran that has left millions of barrels of Middle Eastern oil in limbo. However, Trump has so far not achieved the goals he set at the start of the war, namely ‘dismantling Iran’s nuclear programme’, limiting Iran’s ability to attack its regional rivals, and creating conditions for the Iranian people to overthrow their clerical leaders.
When asked whether the US could target China for doing business with Iran, Bessent said many discussions on the matter were better held privately. Citing Reuters, China buys more than 80% of Iran’s seaborne oil, according to 2025 data from analytics firm Kpler. ‘It should be remembered that China gets 50% of its energy from the Gulf region. So it would be very advantageous for them to follow this programme,’ he said.
Nevertheless, dealing with China would also be troublesome for the US. Data shows that China is a major exporter to the US, including critical rare earth minerals, and any sanctions would risk triggering retaliation from Beijing. Iran has in fact lived under US sanctions pressure for years. Separately, Iran is negotiating an agreement with Oman regarding the management of the Strait of Hormuz and in recent weeks has several times said that the agreement is nearly reached.