Trump declares 'economic war' on Iran, threatens sweeping new sanctions

US President Donald Trump announced on his Truth Social platform that he is launching what he called the most devastating economic operation ever carried out against a country. He said he had given Iran's Islamic Republic the greatest opportunity to reach a deal, but that Tehran had failed to take advantage of it. As a result, he said, an unprecedented economic war and isolation campaign would follow.

Trump warned that any country whose financial institutions, companies, airports or government bodies provide Iran with any kind of lifeline would itself face severe economic consequences. He stressed that the United States needs the support of all its allies to isolate Iran and counter the threats it poses.

Expanded sanctions

The US has long maintained sanctions against Iran, but Trump now plans to expand them further, targeting oil smuggling, currency swap lines, money transfers, currency exchange houses, ship registries and shell companies. He described his plan as an "economic D-Day," a reference to the 1944 Allied landings in Normandy.

It remains unclear exactly how Trump intends to force Iran to change course, or what consequences countries supporting Iran might face. This is particularly relevant for Russia, India and China, which continue to purchase Iranian oil — a key source of revenue for Tehran.

Political backdrop

The announcement comes roughly two and a half months before the US midterm elections, with Trump under notable domestic political pressure after failing to achieve visible progress with Iran either diplomatically or militarily. Tehran, for its part, has not been deterred by Trump's threats in talks over reopening the Strait of Hormuz.