Donald Trump has announced tougher economic measures against Iran and any country trading with it, calling the plan "Economic D-Day." The threat follows the UAE's decision to sever financial and trade ties with Iran over alleged missile fire, and it lands as Hormuz shipping traffic stays depressed and crude prices edge higher.
Donald Trump said on Wednesday he will launch against Iran what, according to CNBC, he called "the most crushing economic operation ever taken against any country". He also threatened financial penalties against any nation that helps Tehran evade sanctions.
Trump named the specific channels he wants closed: oil smuggling, currency swap lines, cash transfers, exchange houses, ship registries and front companies. He said those channels needed to stop immediately, addressing anyone still trading with or maintaining economic ties to Iran. He did not name which countries beyond Iran would face consequences.
A ceasefire lapsed without a deal
The threat comes after a 60-day ceasefire formally expired on Monday without a diplomatic settlement to the war the US and Israel began at the end of February. The US Treasury and Pentagon launched Operation Economic Fury in April, aiming to cut off Iran's revenue streams after military action failed to force the regime's surrender.
Iran's Foreign Minister Abbas Araghchi rejected the threat as a diversion from America's own mounting debt and rising interest costs. He said doubling down on failed policies would only deepen Iranian hostility toward Washington. China's foreign ministry spokesperson Lin Jian said sanctions and economic pressure would not help to solve the issue, and called for a diplomatic resolution.
UAE severs ties, Hormuz traffic stays thin
The escalation follows the UAE suspending all trade and financial dealings with Iran a day earlier, after it said Iran fired two ballistic missiles that landed in the sea near Gulf shipping lanes. Iran denied firing the missiles. Before the war, the UAE supplied more than 30% of Iran's total imports in 2024.
Ship transits through the Strait of Hormuz stayed well below pre-war norms, as Iran's targeting of vessels and a US naval blockade kept most operators away. Preliminary data showed 73 transits during the week ending Aug. 16, down from 91 the previous week.
Brent crude rose 0.5% to $92.09 a barrel on Thursday. WTI crude gained 0.3% to $86.07 a barrel over the same session. US S&P 500 futures were nearly flat after Trump's announcement pared earlier gains.
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