Trump unleashes 'most crushing economic war ever' on Iran, warns backers of consequences
Published: Aug 20, 2026 3:27 PM
Updated: 5:35 PM
US President Donald Trump has unveiled a sweeping new economic offensive against Iran, warning that countries and companies helping Tehran circumvent sanctions will also face punishing financial consequences, according to international media reports.
In a post on Truth Social, Trump described the campaign as the “most crushing economic operation ever taken against any country”, saying Washington would impose unprecedented economic isolation on the Islamic republic.
“This will be economic warfare and Isolation on an unprecedented scale,” he said.
Trump argued that Tehran had been handed ample opportunity to reach an agreement with Washington but had failed to seize it.
“No one has given the Islamic Republic of Iran a greater opportunity to make a deal than me,” he said, adding that “Tragically, for them, they have failed to take it.”
He claimed Iran’s military capabilities had already suffered devastating losses, with its navy, air force and military production facilities destroyed and its currency reduced to near worthlessness. The Iranian regime, he said, was now “hanging by a thread”.
Trump warned that the punishment would extend beyond Iran, saying governments, businesses and financial institutions that provide Tehran with a “lifeline” could be hit with what he called tremendous economic consequences.
Among the activities targeted are oil smuggling, currency swap arrangements, cash transfers, exchange houses, ship registries and front companies. Trump said these channels must be shut down immediately, reiterating that Iran would not be allowed to obtain a nuclear weapon.
‘Economic terrorism’
Iranian Foreign Minister Seyed Abbas Araghchi, however, dismissed Trump’s threat, accusing Washington of using the confrontation to divert attention from its own worsening fiscal problems, including soaring debt and interest costs.
“Doubling down on failed policies will only bring further defeat -and enmity of Iranians,” Araghchi said in a post on X on Thursday.
He also accused Washington of practising “economic terrorism”, arguing that the sanctions campaign could damage the wider global economy and undermine the sovereignty of countries beyond Iran.
Araghchi has previously accused the US of repeatedly tightening sanctions after earlier measures failed to force Tehran to change course, arguing that Washington’s approach has instead made a negotiated resolution to the six-month conflict more difficult.
Iranian Foreign Minister Seyed Abbas Araghchi
The UAE has taken steps to distance itself economically from Iran, announcing on Tuesday that it was halting trade, commercial dealings and financial transactions with Tehran indefinitely.
The move followed a statement from the UAE defence ministry that two missiles launched from Iran had been detected before falling into the sea. Iran rejected the claim as baseless. The UAE, which hosts a major US military base, has long maintained extensive commercial links with Iran.
However, Trump’s broader effort to squeeze Iran economically could prove far more complicated when it comes to China.
China accounted for more than 80 percent of Iran’s seaborne oil exports in 2025, according to analytics firm Kpler, making it by far Tehran’s most important oil customer.
China is a major supplier to the US, including critical rare-earth minerals, and could retaliate if Trump moves aggressively to disrupt its trade with Iran.
The UAE has taken steps to distance itself economically from Iran, announcing on Tuesday that it was halting trade, commercial dealings and financial transactions with Tehran indefinitely.
The move followed a statement from the UAE defence ministry that two missiles launched from Iran had been detected before falling into the sea. Iran rejected the claim as baseless. The UAE, which hosts a major US military base, has long maintained extensive commercial links with Iran.
However, Trump’s broader effort to squeeze Iran economically could prove far more complicated when it comes to China.
China accounted for more than 80 percent of Iran’s seaborne oil exports in 2025, according to analytics firm Kpler, making it by far Tehran’s most important oil customer.
China is a major supplier to the US, including critical rare-earth minerals, and could retaliate if Trump moves aggressively to disrupt its trade with Iran.
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