Trump announces ‘most crushing economic operation ever’ against Iran

United States President Donald Trump has announced what he called the “most crushing economic operation” against Iran, as Washington ramps up pressure on Tehran amid a deadlock in talks to end the war between the two countries.

In a post on Truth Social on Wednesday, Trump said Iran has “failed to take” the opportunity to make a deal, and would face “economic warfare and isolation on an unprecedented scale”.

He also threatened sanctions against any country that does business with Iran.

“ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences,” he wrote. “Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies — it all needs to stop NOW. You know who you are. This will be an ECONOMIC D-DAY, and we need all of our Allies to stand with the United States of America to isolate, and defeat, the Iran threat.”

This is not the first time that Trump has threatened Iran with economic sanctions.

His administration has waged an economic pressure campaign against Iran, under the banner of Operation Economic Fury, following the launch of the US-Israel war on the country in February.

The US has already imposed sweeping sanctions on Iran’s oil, shipping and financial sectors, seeking to cut off the revenue Tehran earns from energy exports. It has also imposed a naval blockade on Iranian ports and targeted companies, brokers and tankers accused of helping Iran sell its oil abroad.

Iran denounces ‘economic terrorism’

Iranian Foreign Minister, Abbas Araghchi, dismissed Trump’s latest threats of economic sanctions, calling it a “diversion from America’s own crisis: unprecedented debt & surging interest costs.”

“Doubling down on failed policies will only bring further defeat—and enmity of Iranians. US economic terrorism threatens global economy and sovereignty worldwide,” he wrote on X.

State media also dismissed Trump’s announcement as nothing new.

The IRIB state broadcaster said it followed “the failure of military aggression” while the semi-official Tasnim news agency said the announcement was “not a new development”. It said the US “has been trying for years to block any financial and economic ties with Iran” but that Tehran has “learned how to circumvent these restrictions and has become very skilled at doing so”.

The semi-official Fars news agency also dismissed Trump’s claims as “delusional”, saying that the US had repeatedly voiced assertions of Iran’s “imminent collapse” and military destruction without delivering concrete results.

Al Jazeera’s Mike Hanna, reporting from Washington, DC, said Trump’s latest move showed “a degree of frustration” over the deadlock in the five month old conflict.

Hanna said the first question was what economic pressures Trump could exert on Iran that are already not being exerted and said the announcement may look like “another shouting threat” to the Iranian officials.

“But perhaps his target audience is an American public that continues to oppose this ongoing conflict,” Hanna said. “He is now taking what he hopes will be seen in the public forum as a very strong stance, regardless of the fact that we do not have specific details on which to judge the possible efficacy of this particular move to strengthen economic action against Iran.”

The China challenge

Trump’s announcement came hours after the United Arab Emirates, a critical trade partner for Iran, suspended all financial ties with the country, accusing it of launching two ballistic missiles towards its waters.

Tehran denied the claim, calling it a “false-flag operation”.

Nader Habibi, a Middle East economics professor at Brandeis University, said he believed the US “strongly encouraged or induced” the UAE to impose the trade embargo, noting conversations between the two sides in recent days including a phone call between Secretary of State Marco Rubio and the Emirati National Security Advisor Sheikh Tahnoon bin Zayed Al Nahyan on Tuesday.

Habibi said other Iranian trade partners that Trump could target include China, Iraq and Turkiye.

In China’s case, “he can target the financial institutions that provide services to independent teapot refineries” that are “the last group still purchasing Iranian oil”, he said. But, “the challenge is that the Chinese government has warned Chinese entities not to cooperate with US sanctions,” he noted.

Habibi added that it would also be difficult for the US to fully enforce restrictions on Iran’s overland trade with Turkiye, Iraq and central Asia.

Brett Erickson, managing principal at Obsidian Risk Advisor, said the fact that the measures currently threatened by Trump had not already been used showed the risks involved.

“If they [the measures] offered a risk-reward profile that was favourable for the Trump administration, they would have already been implemented,” he said.

Erickson called punitive steps against Chinese banks that do business with Iran as “far and away the most consequential lever that Trump could pull”. Such measures, “combined with real enforcement of the UAE’s claim to be cutting off business with Iran” could become “truly potent,” he said.

But the biggest constraint to the US campaign “remains time,” Erickson said.

“Economic warfare on Iran not only needs to produce results, they need to produce said results in an expeditious manner,” he added.