US set to unveil sweeping Iran sanctions, warns trading partners

Washington is preparing to escalate its economic pressure campaign against Iran, with Treasury Secretary Scott Bessent set to unveil what he has called an "economic D-Day" on Monday. The measures, expected at 1 p.m. (1700 GMT), will broaden the scope of potential secondary sanctions against entities and countries that maintain economic ties with Tehran, according to a source familiar with the plans.

The move is designed to isolate Iran further by threatening its trading partners with exclusion from the dollar-based financial system. Bessent has previously urged cooperation from China, the largest buyer of Iranian oil in recent years, though a US blockade of Iranian ports renewed in mid-July has already curtailed those flows.

Washington has already imposed secondary sanctions on smaller Chinese and Hong Kong-based entities accused of processing billions of dollars in Iranian oil and helping fund arms purchases. Two larger banks have been warned against handling Iranian funds. However, experts suggest the US is wary of Chinese retaliation ahead of an expected meeting between President Donald Trump and Chinese President Xi Jinping next month, with curbs on China's critical mineral exports a particularly sensitive issue.

Beijing responded by stating that sanctions and pressure tactics are unhelpful and that it would take necessary steps to protect its interests.

Bessent's plan could also sharpen enforcement against oil shippers, purchasers, and currency exchangers who facilitate Iranian imports. Aviation may also be targeted. Trump has threatened tariffs on goods from countries that do business with Iran, though the Supreme Court has struck down the legal basis for such taxes.

Iran has dismissed the threats, vowing to shut down all oil exports from the Gulf if the "economic war continues." Tehran has issued new warnings to shipping in the Strait of Hormuz, listing 45 vessels it claims violated its rules and threatening retaliation for ship-to-ship transfers with them.

In a sign of diplomatic efforts, Pakistan's army chief, Asim Munir, arrived in Iran on Monday for talks. Pakistani officials said the visit aims to promote regional peace and stability. Sources indicated that Trump had called Munir last week, with a request to bring Iran back to negotiations.

Meanwhile, a projectile struck a tanker west of the Saudi port of Yanbu in the Red Sea on Monday, causing a fire on the main deck, according to UK Maritime Trade Operations. Iran's Houthi allies claimed responsibility for an attack in the area.

The conflict, which began with US and Israeli strikes on February 28, has resulted in thousands of deaths, mostly in Iran and Lebanon. While Iran's conventional military capacity has been degraded, it retains enough missile and drone capability to threaten Gulf neighbours and disrupt shipping in the Strait of Hormuz, keeping world fuel prices elevated.

Iran's economy is under severe strain, with a record-low rial currency, 25% below its January level, and ongoing challenges from disrupted trade and infrastructure damage. Oil prices eased on Monday as investors took profits ahead of the expected US announcement.