The Trump administration’s plan to crush Iran’s economy will likely negate the need for major U.S. military operations against the Islamic republic, Treasury Secretary Scott Bessent told CNBC on Thursday.
“If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,” Bessent said in an exclusive interview with “Squawk on the Street.”
The Cabinet secretary’s comments came hours after President Donald Trump declared on Truth Social that the U.S. plans to choke Iran’s economy by levying major economic penalties against any country that provides “any type of lifeline” to Tehran.
“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,” Trump wrote in the Wednesday evening post.
The announcement came as the war against Iran nears the six-month mark without any hint that the U.S. is close to clinching either a diplomatic or military victory.
Oil prices rose following CNBC’s interview with Bessent, who vowed that the U.S. will create “the greatest coordinated economic isolation in the history of the world” against Iran.
He said he will hold a press conference on Monday to “talk about exactly what we’re going to do.”
In a preview of the plan, he said that the U.S. will be telling all of its allies, “You are either with us or against us.”
“If you insist on doing business with [Iran], either transferring money, buying their oil or doing seaborne ship transfers, then the U.S. Treasury and the U.S. government … will put its full might and force toward enforcing against you,” Bessent said.
“It is time for our allies and the rest of the world to make a decision,” he said. “We are going to squash the economy of this murderous regime.”
He also brushed off early skeptics of the plan, arguing that the economic pressure campaign will work in concert with an ongoing U.S. Naval blockade of Iranian ports in the Gulf of Oman.
“It is a one-two punch. We have the blockade, and we are going to have the toughest sanctions in history,” he said.
“We are going to collapse this regime,” he added.
Trump has repeatedly claimed that the U.S. has already effectively destroyed Iran’s military and economy, and he insisted in his Wednesday evening Truth Social post that Tehran is “on the ropes” and “hanging by a thread.”
Indeed, Iran’s GDP is believed to have contracted amid the war, while inflation in the country has ballooned to historic highs. But some experts still caution against assuming that Iran’s economy is facing imminent collapse.
Iran also continues to exploit its ability to wreak havoc in the Strait of Hormuz, the waterway that saw 20% of the world’s oil trade before the war began.
Tanker crossings through the strait remain highly diminished despite ramped-up pressure from the U.S. and other regional powers. The United Arab Emirates said Wednesday it would halt all trade with Iran after facing new ballistic missile strikes.