U.S. PREPARES BROADER IRAN SANCTIONS AS TEHRAN WARNS OF RETALIATION

Developing story: Sanctions details were expected later Monday and may change the scope of affected entities.

The United States moved Monday toward a broader sanctions campaign against Iran, preparing measures aimed not only at Tehran but also at countries and companies that continue doing business with it. Reuters reported that Treasury Secretary Scott Bessent was expected to outline an expanded use of secondary sanctions as Washington seeks to cut off Iran’s remaining economic channels. The announcement comes during a prolonged confrontation in which the U.S. says economic pressure is needed to force Iranian concessions, while Iran warns that support for new measures could be treated as hostile action.

The planned sanctions are significant because secondary measures reach beyond the direct U.S.-Iran relationship. They can threaten foreign banks, refiners, shipping firms, insurers and trading companies with exclusion from the U.S. financial system if they continue specified transactions with Iran. That gives Washington leverage over governments and private companies that may not otherwise accept U.S. policy toward Tehran. It also raises the risk of friction with countries that oppose unilateral sanctions or maintain energy and commercial ties with Iran, including major economies whose firms could be exposed to enforcement actions.

The new measures follow months of conflict and economic strain. Iran’s currency has fallen sharply, inflation remains severe, and trade has been disrupted by the war, shipping restrictions and existing sanctions. U.S. officials have described the coming campaign in unusually forceful language, with Bessent expected to frame the move as an intensified financial offensive. The administration argues that pressure on oil revenues, trade intermediaries and financial access can weaken Iran’s ability to sustain confrontation and compel it to accept terms over the Strait of Hormuz, regional activity and nuclear-related concerns.

Iranian officials have responded with warnings. The Associated Press reported that the new head of Iran’s top security body said Tehran would view any country’s support for the sanctions as an “act of war.” Iran’s Foreign Ministry also warned of a harsh response to the expected U.S. action. Those statements do not establish what Iran will do, but they show that Tehran wants to raise the diplomatic and commercial cost for governments considering cooperation with Washington. The language also reflects the stakes attached to the Strait of Hormuz, regional shipping and energy exports.

The sanctions push places U.S. allies in a difficult position. European governments, Britain and Canada broadly oppose Iran acquiring a nuclear weapon and have joined prior sanctions frameworks, but they must also manage energy security, shipping exposure and domestic economic pressures. If the U.S. measures are written broadly, allies may have to decide how aggressively to align with Washington and how to protect companies from retaliation or countermeasures. The dispute could also test transatlantic coordination if the Trump administration expects full compliance while offering limited consultation on timing or scope.

China is a central variable. Beijing’s foreign ministry said Monday it would watch developments and protect its rights as Washington prepared sanctions expected to target Iran’s trading partners. China has long objected to U.S. secondary sanctions as extraterritorial measures and could resist compliance if it sees the campaign as a broader attempt to pressure Chinese energy or finance networks. At the same time, many Chinese firms and banks must consider their exposure to dollars, U.S. markets and international clearing systems. That tension could determine whether the sanctions meaningfully restrict Iran’s trade or produce a parallel confrontation with Beijing.

The measures may also influence global energy markets even before formal enforcement begins. Iran has threatened to disrupt oil exports through the Persian Gulf if economic pressure continues, and traders are watching whether sanctions affect shipping, insurance or refinery purchases. Oil prices fell Monday as investors awaited details, but that movement reflected profit-taking and uncertainty rather than a settled judgment that risks had faded. If sanctions trigger retaliation in the Gulf or reduce available supply, energy prices could rise quickly, feeding into inflation concerns in the United States, Canada, Britain and the European Union.

The Trump administration is presenting economic warfare as an alternative to further military escalation, but sanctions and military pressure can interact in unpredictable ways. A sanctions package that Tehran sees as threatening regime survival may encourage Iranian leaders to harden their stance rather than compromise. Conversely, a weak package that exempts major buyers or lacks enforcement could undercut Washington’s credibility. The administration must therefore balance severity with manageability, especially when global markets and allied governments are already strained by conflict, trade disputes and high borrowing costs.

For Iran, the pressure comes as domestic economic pain becomes more visible. A collapsing currency raises import costs, reduces purchasing power and deepens public frustration. Sanctions may weaken the state’s fiscal position, but they can also allow Iranian leaders to attribute hardship to foreign coercion. The political effect is therefore uncertain. The U.S. objective is to change policy by restricting money and trade; Iran’s counter-objective is to survive the pressure, deter foreign cooperation and preserve enough regional leverage to force a better deal.

The details of Bessent’s announcement will determine the immediate impact. Key questions include whether the measures target major foreign banks, specific oil buyers, shipping networks, insurance providers, front companies or entire categories of transactions. Another unresolved issue is how far Washington is prepared to go against entities in large economies if they do not comply. For now, the U.S. has signaled a major expansion of economic pressure, while Iran has signaled that it will treat outside support for that pressure as a serious escalation. Fact-check date: August 24, 2026. Article type: News. Sources: Reuters; Associated Press. Developing note: Sanctions details were expected later Monday and may change the scope of affected entities.