Bessent Warns Iran’s Trade Partners to Cut Ties or Face Sanctions

**SPEAKER_1** (0:02)
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This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Tim Stenovec** (0:32)
That's the latest from Treasury Secretary Scott Bessent. He announced what he called a quote, unprecedented US campaign to sever Iran from the global economy, warning that any country doing business with Iran risks facing US sanctions, quote, we are launching an economic onslaught against Iran's financial connections around the globe.
The Treasury Secretary said at a press conference in Washington, here's a little more of what he had to say.

**Scott Bessent** (0:56)
Every country, every entity should know that they should be prepared to face US sanctions. And no one is above this.
We are going to hold everyone accountable, and this is economic asphyxiation of this regime. And Jennifer, as I said, no one should test our resolve.

**Tim Stenovec** (1:22)
That was the Treasury Secretary just in the last hour, live from Washington at a press conference. I promise this will be the focus, the first part of our program. And indeed, that's what we're doing with just a fantastic roundtable joining us from pretty much all over. We've got Ira Jersey, Bloomberg Intelligence, Chief US Interest Rate Strategist. Mike McKee is Bloomberg TV and Radio International Economics and Policy Correspondent. And Nancy Cook, Bloomberg News, Senior National Political Correspondent. Nancy is in Washington. Ira is at Bloomberg Intelligence Headquarters in Princeton. Mike's out there in Wyoming getting ready for the Jackson Oil Economic Symposium this week. Nancy, I want to start with you because Iran has had sanctions on it for close to 50 years.
How is this, quote, economic onslaught going to be any different than the sanctions that it's faced?

**Nancy Cook** (2:07)
Well, what was interesting to me was just the timing of this announcement. You know, Secretary Bessent is making this announcement with about 70 days to go to the midterms.
The Trump administration, I think, privately is pretty worried about its economic agenda and the drag that the economy, the drag that the war in Iran is causing on the economy. So I think that they're looking for ways to be proactive and show that they're trying to bring gas prices down and sort of make the economic conditions more favorable to voters. And that's why I think you're seeing the Treasury Secretary talk about sanctions today, even though we're still looking for a lot of details about what exactly those will look like.

**Tim Stenovec** (2:42)
So we're awaiting some of those details. Hopefully, we'll get those details in the coming days. Mike McKee, I want to bring you in here and sort of ask you a question that follows with what Nancy just said. And it was also one that was shouted at the Treasury Secretary as he left.
Why these sanctions now and not six months ago? Nancy spoke to the politics of this, but is it also, in your view, indication that the military part of the war didn't necessarily work or is not working?

**Mike McKee** (3:10)
Well, the military part of the war worked to an extent, but it hasn't brought Iran to the table. And so at this point, they don't have very many options to go on from here to try to get the strait open and oil flowing again. This is one of the fears that they have that might not lead to military activity, although my guess is that the Iranians would respond militarily to any serious impact on their economy.
The other question that stood out was Scott Bessent asking, why would I want to blow up the global economy? Good question. And there is a chance that something like that could happen if they sanctioned all the people who are cooperating in one way or another behind the scenes with Iran, because you have the Chinese, a huge participant in trade with Iran's behind the scenes. You have India and you have many other countries that are allowing trade to go one way or another behind the scenes with Iran. And so there is the potential for a huge impact on Iran and the global economy. But we didn't get enough detail from Scott Bessent today to know whether they really mean it, whether they'll go ahead with it, and what it would take for a country to end up in violation.

**Carol Massar** (4:30)
And Ira, I want to go to you because there's been a lot of focus as of late on the bond market. And of course, today, we do see yields falling, but that doesn't really take into account all the whiplash that we saw last week. So talk to me about what you're seeing right now in the bond market and whether or not there's any conviction behind today's move.