AILSA CHANG, HOST:
U.S. Treasury Secretary Scott Bessent unveiled today what the Trump administration is calling an economic D-Day against Iran, almost six months after the conflict began. Dubbed Operation Economic Outcast, this includes measures to impose sanctions on any country or entity that deals with the Islamic regime in Tehran. And Bessent warned that that could include Chinese banks, which threatens to end a period of economic detente with Beijing.
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SCOTT BESSENT: It is now a time for world leaders to make a decision between prosperity and isolation, peace and terror, America and Iran.
CHANG: All right, to talk about all of this, I'm joined now by NPR diplomatic correspondent Michele Kelemen and NPR White House correspondent Deepa Shivaram. Hello to both of you.
DEEPA SHIVARAM, BYLINE: Hi there.
MICHELE KELEMEN, BYLINE: Hi, Ailsa.
CHANG: All right, let's start with you, Michele. What exactly are these new measures that Bessent laid out today?
KELEMEN: Yeah, so he's warning banks and businesses that they're going to be cut off from the U.S. financial system if they continue to deal with Iranian oil and five new areas. Those are cryptocurrency, technology, gold, aviation and shipping. Bessent is calling on countries to shutter all branches of the Iranian bank Melli, and he had some pretty tough words for countries that are allowing this kind of trade. He said the U.S. has mapped every node, every facilitator and every network that Iran uses to evade sanctions.
CHANG: Wow.
KELEMEN: Those were his words. And countries can't be blind to that. But, you know, Ailsa, unlike the surprise D-Day landing in France during World War II, on this D-Day, the U.S. is giving countries a heads-up about the sanctions that they could face. Take a listen to how Bessent explained that.
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BESSENT: We are giving everyone the opportunity via - to remedy bad behavior. Why would I want to blow up the global financial system?
KELEMEN: And that was a real moment of honesty there about the risks of imposing sanctions on countries like China or other big trading partners of Iran.
CHANG: Yeah, let's talk about that, Deepa, because Chinese President Xi Jinping is going to be coming to the U.S. in about a month, right? So does all of this risk reigniting tensions with China ahead of that meeting, you think?
SHIVARAM: Yeah, I mean, Trump considers himself to have a good personal relationship with Xi, and past meetings between Trump and Xi have ended mostly cordially. But on a global stage, there's a lot of economic pressure when Trump allows these tensions to build, and it puts the global economy in a pretty fragile position. Like, you guys remember last year's tariff war that was going on. And it's possible that tensions reignite because in response to economic sanctions like these, China would likely retaliate.
But keep in mind, Trump has a history of making big statements or threats, and then has a softened follow-through, sometimes backing away entirely. He's done that repeatedly over the course of this war with Iran, right? He said he was going to obliterate Iran. He said that he had a deal to end the war. He's put a lot of options on the table, and now the option is economic sanctions. We'll see how the administration follows through here. But I think even threatening these sanctions against China adds to that tension. You heard from Bessent himself that it really does threaten to have, you know, huge global impacts on the economy.
CHANG: Well, Michele, what's been Iran's response to this economic D-Day?
KELEMEN: Well, the Iranians remain defiant, even though some Iranian leaders have admitted it's likely to inflict a lot more pain on the economy, which is suffering huge losses right now. Even before Bessent's news conference, Iran's new security chief, Mohsen Rezaei, was warning that any country that, you know, helps the U.S. with these economic restrictions would be considered an enemy, and he warned that Iran would target their interests. He said that Iran would attack oil tankers trying to leave the Persian Gulf, again saying, quote, that "not a single drop of oil will leave the region." So, you know, Iran seems to be ready to use this new leverage that it has over the Strait of Hormuz and will continue to fight back.
CHANG: Well, then what does that mean for U.S. allies in the Gulf?
KELEMEN: Not good news at all for Gulf allies. They've really borne the brunt of this war. They've been hit by Iranian drones and missiles. Their economies are suffering, and they're really looking for de-escalation. Bessent says that they now see that appeasing Iran hasn't worked because they've been targeted despite appeasing Iran. Those were his words. Iran says it's targeting them because they house U.S. bases. So, you know, they're really in a predicament here. And to get ahead of these new sanctions, one country, the United Arab Emirates, last week announced that it would cut business ties with Iran, and that's a big deal since they have many.
CHANG: Right. Well, Deepa, I'm interested in the timing of all this. Like, why are these measures being announced now, a whole half year into this war?
SHIVARAM: Well, yeah, half year, as in six months of a war that Trump said would last less than six weeks, right?
CHANG: Yeah.
SHIVARAM: He hasn't been able to bring this conflict that the U.S. and Israel started with Iran to a close. There have been negotiations, but Trump has been saying now that he thinks Iran is not ready to strike a deal. And in the meantime, the conflict is ongoing. Prices are still high. And there's an election coming up that he has to be able to explain something here to voters about this war and why it's still going on.
CHANG: Exactly. An election is coming up. So how much is President Trump actually talking about Iran on the campaign trail?
SHIVARAM: You know, he mentions it often, talking about how he really believes Iran can't have a nuclear weapon. I was just traveling with the president in South Carolina on Friday, and in this crowd in Myrtle Beach, he was telling supporters that as soon as the war with Iran is done, oil prices will come down. So he's acknowledging that some - there's some economic pain there, right? And there were big cheers from the crowd when he said that. So with just over two months until the midterm elections, he's really just got to provide some kind of progress report, some answers here because this war, according to polling, is really unpopular among voters, even among some of Trump's own supporters. And Trump's approval ratings on the economy are also not doing well.
And, you know, back in March, when this war was close to the beginning, I was talking to Republican strategists who would say, you know, Trump still has time. He can turn this around. Now, though, he's running out of time, and adding these economic sanctions is a way of possibly showing his supporters that he's trying to move the needle here. I will point out, though, Trump himself hasn't spoken about these new sanctions. He just did an event at the White House this afternoon. Didn't mention Iran at all, which is kind of rare, but he did mention in a post on social media earlier that the U.S. is, quote, "winning against everyone, including Iran."
CHANG: That is NPR's Deepa Shivaram and Michele Kelemen. Thank you to both of you.
SHIVARAM: Thank you.
KELEMEN: Thanks for having me. Transcript provided by NPR, Copyright NPR.
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