US Treasury Secretary Scott Bessent has issued a direct ultimatum to international allies, demanding they support Washington's aggressive strategy to "squash" the Iranian economy and force the collapse of its ruling regime. Speaking on the administration's plan, Bessent declared that the international community must choose a side in this escalating economic campaign, warning that the U.S. is prepared to deploy its full power against any nation that continues to trade with Tehran.
"We are going to collapse this regime. It is time for our allies and the rest of the world to make a decision," Bessent stated during a broadcast interview. "You are either with us or against us," he added.
Bessent's forceful remarks align with recent declarations from President Donald Trump, who warned that countries offering "any type of lifeline" to the Islamic Republic will face "tremendous economic consequences." According to Bessent, implementing these sweeping international sanctions will "minimise the need" for the United States to return to an active military conflict with Iran.
The shift back to economic pressure follows a period of direct military engagement. In February, the United States and Israel initiated a war against Iran, justifying their airstrikes as a necessary measure to prevent Tehran from acquiring nuclear weapons—an accusation the Iranian government has consistently denied. Iran retaliated by launching attacks on Israel, U.S. military installations across the Middle East, and Gulf Arab nations allied with Washington. A key flashpoint of the conflict was Iran's near-total closure of the Strait of Hormuz, a critical maritime corridor that previously handled approximately 20% of the world's liquefied natural gas and oil transit. The closure triggered severe volatility in global energy markets.
Although the warring parties agreed to ceasefires in April and June to facilitate diplomatic talks, the truces have been repeatedly broken and negotiations have stalled. Rather than resuming active combat, President Trump is preparing what is described as the "most crushing economic operation ever taken against any country." Bessent characterized the impending penalties as "the greatest co-ordinated economic isolation in the history of the world." He warned international trading partners that the U.S. Treasury and government will use their full authority to penalize anyone transferring money to Iran or purchasing its oil. Full details of this massive economic campaign are scheduled to be unveiled during a press conference on 24 August.
The move to intensify economic pressure comes despite a Memorandum of Understanding (MoU) signed by the U.S. and Iran in June, which originally outlined a schedule for the U.S. to "terminate all types of sanctions." However, Washington had already launched a wave of sanctions in April against foreign banks and businesses dealing with Tehran, following the realization that initial military strikes had failed to overthrow the Iranian regime or secure its surrender. This was followed by "Operation Economic Fury," a joint initiative by the U.S. Treasury and the Pentagon designed to choke off Tehran’s revenues and degrade its military capabilities through a naval blockade on Iranian exports.
Iran's economy is already severely weakened by decades of international sanctions dating back to the 1979 Islamic Revolution and the U.S. embassy hostage crisis. Earlier this year, the country was rocked by weeks of protests over inflation and the soaring cost of living. Official statistics revealed that in the 12 months leading up to February 2026, the price of basic necessities rose by an average of 60%, while food prices doubled. During the unrest, Trump encouraged the demonstrators, telling them to "keep protesting" and promising that "help is on the way." However, the subsequent military strikes and port blockades did not lead to a regime change, and the Iranian government successfully suppressed the protests.
Inside Iran, citizens remain highly skeptical that the latest U.S. measures will succeed in toppling the government. A resident of the central province of Khuzestan pointed out that decades of enduring economic blockades have made the country resilient. "There may be an impact at first, but that doesn't necessarily mean Iran won't be able to overcome the crisis," he noted. Another local resident echoed this sentiment, arguing that the regime's longevity is unlikely to be affected by Trump's rhetoric. She explained that Iranians have long adapted to living under sanctions, adding, "Not everything changes because of statements made by President Trump. Iran has been living under sanctions for years, and people have become accustomed to this situation. I'm sure Iran will find other ways to continue trading. Of course, there will be some impact and the economy may weaken, but that doesn't mean it will collapse."
Faisal Islam: Iran war pause is welcome but the economic scars will last
Since then, more sanctions have been implemented, but the Iranian government has not collapsed – in fact it has succeeded in controlling dissent, most recently by cracking down on the protesters earlier this year.
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