President Donald Trump has already promised a decisive economic punishment to end the standoff, calling it "an ECONOMIC D-DAY." Bessent went further, saying the push would be "the greatest coordinated economic isolation in the history of the world" and that allies are being told they are either with the US or against it. Cooperating, he argued, is in their own interest.
The shift comes after months of US military strikes and a naval blockade of Iranian ports. That effort removed most of Iran's senior leaders and weakened its economy, but it did not force Tehran to surrender.
Iran's threats to commercial shipping have disrupted traffic through the Strait of Hormuz, and Trump's counter-blockade has sharply cut Iranian oil exports. Asked whether China would be targeted, Bessent said, "many conversations are best to have in private," and stressed that everyone wants the Strait of Hormuz open to commercial traffic again.
Beijing pushed back quickly. Chinese Foreign Ministry spokesman Lin Jian said, "sanctions and pressure will not help resolve the issue," and China wants the problem solved through political and diplomatic means.
Washington faces a hurdle because Beijing does not acknowledge American sanctions. The UAE has already moved: it cut economic ties with Iran on Tuesday after accusing Iran of firing missiles into its territorial waters. Iran denied responsibility. The UAE was Iran's top trading partner last year, followed by China, Turkey, and India.
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Iran has lived under sanctions for decades, so the plan is not starting from scratch. "Daniel Fried, a former US ambassador to Poland, told Bloomberg Television" there is "no magic bullet." He said the program has workarounds in place and that "US leverage is not great in the short run."
Iran's foreign minister, Abbas Araghchi, called the pressure campaign a distraction from America's soaring debt and interest costs. He wrote on X that "doubling down on failed policies will only bring defeat and deepen Iranians' hostility."
Trump wants Iran back in negotiations over its nuclear program and the Strait of Hormuz. A June memorandum of understanding collapsed after a series of retaliatory strikes. Iran wants its assets unfrozen, sanctions lifted, and compensation for war damage. There is also a tariff truce to protect, because hitting Iranian oil sales risks direct tensions with China and complicates Trump's deal with President Xi Jinping, who is scheduled to visit the US next month.
That has prompted a reminder that the crisis can still get messier before any deal.
For investors, the fastest way this shows up is oil. Higher energy costs flow directly into gasoline, shipping, and grocery bills. Trump is facing high gasoline prices, an unpopular war, and Republican fears about losing Congress in November. The economic plan is partly intended to change those political numbers without another round of airstrikes.
For Iran, the stakes are larger. The country has nearly 80% inflation, and its currency has fallen almost 30% against the dollar this year. Economists warn the crisis could become one of the worst in Iran's history, threatening its population of 90 million.
The plan is not fully public yet. If it works, Iranian oil exports could fall further and prices could keep climbing; if it does not, the standoff drags on. Either way, the next stage will show up at the gas pump.
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