US Treasury Secretary Scott Bessent has warned that new sanctions will be used to “squash” Iran’s economy and “collapse” its regime if Tehran continues its current nuclear trajectory, marking a sharp escalation in rhetoric from the Trump administration. Speaking in remarks that underscored Washington’s growing frustration, Bessent said allies will need to decide whether they “are with us or against us” regarding potential secondary sanctions targeting entities that continue doing business with Iran. The comments signal a hardening of US policy that moves beyond containment toward explicit regime destabilization through economic warfare.
What Happened
Bessent delivered the warning in public remarks that framed Iran’s nuclear program as an urgent threat requiring maximum economic pressure. The Treasury Secretary used unusually direct language for a senior financial official, stating that the administration intends to “squash” Iran’s economy and “collapse” its regime through sanctions measures that would significantly impair Tehran’s ability to conduct international trade and access global financial systems.
The Secretary did not specify which new measures are under consideration, but indicated the administration is preparing options that would go beyond existing restrictions. His “with us or against us” framing regarding secondary sanctions puts allies and trading partners on notice that continued engagement with Iranian entities could trigger US penalties. This approach mirrors the secondary sanctions architecture used during the 2018-2021 “maximum pressure” campaign, which targeted non-US companies and financial institutions conducting business with sanctioned Iranian sectors.
Iranian officials have not immediately responded to requests for comment on the US warning. The silence from Tehran follows a pattern of delayed official responses to major US policy announcements, with Iranian leadership typically coordinating messaging through the Supreme Leader’s office and the Foreign Ministry after internal consultations.
Why It Matters
Analysis: The Treasury Secretary’s remarks represent a significant shift in both tone and objective. Previous administrations, including the first Trump term, framed maximum pressure as leverage to force Iran back to negotiations or to curb specific behaviors. Bessent’s explicit reference to regime collapse as a goal moves the stated objective from behavioral change to structural political transformation. This framing aligns with longstanding advocacy from certain Iran hawks but had been avoided in official rhetoric due to concerns about rallying domestic Iranian nationalism and complicating diplomatic off-ramps.
The “with us or against us” formulation on secondary sanctions creates immediate diplomatic friction. Major European allies — particularly France, Germany, and the United Kingdom — have historically resisted broad secondary sanctions that expose their companies to US penalties while undermining the JCPOA framework they continue to support. The EU’s Blocking Statute, enacted in 2018 to protect European firms from extraterritorial US sanctions, remains in force and would likely be invoked again. Energy markets also face disruption risk: any sanctions targeting Iran’s oil exports, which have risen to approximately 1.5-1.7 million barrels per day according to tanker tracking data, could tighten global supply at a time when OPEC+ spare capacity is limited.
For Iran, the threat targets its most acute vulnerability. The Iranian economy has contracted under existing sanctions, with inflation exceeding 40% by official measures and the rial losing over 90% of its value against the dollar since 2018. The regime’s legitimacy rests partly on economic delivery; a sanctions regime explicitly designed to cause collapse could trigger social unrest, though the Islamic Republic has demonstrated resilience through previous pressure campaigns.
Background and Context
The current escalation occurs against a backdrop of diplomatic stalemate. The 2015 Joint Comprehensive Plan of Action (JCPOA) — negotiated between Iran and the P5+1 (US, UK, France, Germany, Russia, China) — placed verifiable limits on Iran’s nuclear program in exchange for sanctions relief. The United States withdrew in May 2018 under President Trump, reimposing and expanding sanctions. Iran remained in compliance for roughly a year before beginning calibrated breaches of enrichment limits and stockpile caps.
Since 2019, Iran has expanded its nuclear program significantly. According to International Atomic Energy Agency (IAEA) reports, Iran now enriches uranium to 60% purity — close to weapons-grade 90% — and maintains stockpiles far exceeding JCPOA limits. The IAEA has also reported unresolved questions about uranium particles found at undeclared sites. Iran maintains its program is peaceful and cites the US withdrawal as justification for its steps.
Indirect talks to revive the JCPOA stalled in late 2022. The Biden administration pursued a “compliance for compliance” approach but could not resolve disputes over guarantees against future US withdrawal, IRGC sanctions designations, and the scope of Iran’s required nuclear rollbacks. Meanwhile, Iran-Russia military cooperation deepened, with Tehran supplying drones and missiles for use in Ukraine, further complicating Western calculations.
The Trump administration’s return has shifted the framework from revival to replacement. Officials have signaled interest in a broader agreement covering missiles, regional proxies, and sunset provisions — terms Iran has repeatedly rejected. Bessent’s remarks suggest the administration is now prioritizing pressure over negotiation, betting that economic collapse will force concessions or regime change.
What to Watch Next
Several developments will determine whether the rhetoric translates into effective policy:
Allied coordination: The effectiveness of secondary sanctions depends on compliance from major economies. The EU3 (France, Germany, UK) face a choice between aligning with Washington and preserving their strategic autonomy and commercial interests. China and India, Iran’s largest oil customers, have historically resisted US secondary sanctions and developed alternative payment mechanisms. Their response will be decisive.
Implementation timeline: The Treasury Department typically rolls out sanctions through a series of designations, executive orders, and guidance documents. The first tranche of new designations — likely targeting Iranian financial institutions, shipping networks, or specific sectors like petrochemicals — will signal the administration’s seriousness and scope.
Iran’s nuclear escalation ladder: Tehran has historically responded to pressure with nuclear advances — increasing enrichment levels, deploying advanced centrifuges, or limiting IAEA access. The regime may calculate that rapid progress toward breakout capacity creates leverage or deterrence. The IAEA’s next quarterly report and Board of Governors meeting will be flashpoints.
Domestic Iranian politics: The June 2025 presidential election, which brought reformist Masoud Pezeshkian to office, created a factional dynamic. Hardliners may use US threats to undermine the president’s engagement agenda, while Pezeshkian’s team may seek limited de-escalation to buy economic breathing room. Supreme Leader Ali Khamenei’s public statements will set the regime’s red lines.
Congressional action: The US Congress has consistently pushed for tougher Iran sanctions. Legislation mandating secondary sanctions on Iranian oil exports and designating the entire Iranian economy as a sanctions target has bipartisan support. Executive-branch implementation may be supplemented or constrained by legislative timelines.
Conclusion
Bessent’s declaration that the United States intends to “squash” Iran’s economy and “collapse” its regime through sanctions marks the most explicit articulation of regime-change-through-economic-warfare by a senior US official in years. Whether this rhetoric becomes reality depends on the administration’s ability to enforce secondary sanctions globally, the resilience of Iran’s sanctions-evasion networks, and the willingness of allies and adversaries alike to absorb the economic and diplomatic costs of compliance. For now, the announcement injects new volatility into a confrontation that has resisted resolution for two decades.
Sources: BBC News World (https://www.bbc.co.uk/news/articles/c87n90eg0p2o)
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Story synopsis gathered from: BBC News World — source
