Treasury Secretary Scott Bessent today unveiled “Operation Economic Outcast,” a sweeping new sanctions campaign targeting Iran’s remaining ties to the global economy — expanding secondary sanctions to digital assets, technology, gold, aviation, and shipping, and designating nearly 60 entities and vessels tied to Iran’s oil-smuggling and weapons networks. Cato scholars offer the following statements in response:
The devil is very much in the details – including the precise measures at issue and the extent to which China, a major buyer of Iranian oil, is targeted. Generally US unilateral sanctions have a long history of inefficacy, and – as we saw with Russia – authoritarian regimes can withstand even multilateral ones.
OFAC has been chasing down countries and companies doing business with Iran for decades, but every administration—including Trump One—declined to try to cut off China and India from the US economy because doing so would be crazy. Today, Scott Bessent seemed to recognize as much, responding to a reporter’s question about why the administration was making threats instead of forcing a choice today. “Why would I want to blow up the global financial system?” he replied.
He shouldn’t, and he likely doesn’t. So the question remains why anybody would believe a threat to do something the threat-issuer recognizes he doesn’t have an interest in doing.
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