US warns Iran of "the single greatest financial offensive ever"

**Bisi Adebayo** (0:01)
How much more economic pressure can Iran take? It's World Business Express from the BBC World Service. I am Bisi Adebayo.
Washington is promising what it calls economic D-Day, and what it says will be America's toughest sanctions on Iran yet. And from boxing to table tennis, we'll hear about China's rapidly growing humanoid robot industry.
So, the United States is warning of what it's calling an economic D-Day for Iran, with a new round of sanctions expected to be announced today. US. Treasury Secretary Scott Besson says there will be the toughest sanctions imposed on the country yet. Iran has faced varying degrees of economic sanctions for nearly 50 years. And President Massoud Peshkian has acknowledged the growing pressures facing Iranians, but he says the country will stand firm.

**SPEAKER_2** (0:57)
We are in an all-out military, economic and security war in the face of the most devastating set of sanctions. But we're standing firm to secure the future of our people.

**Bisi Adebayo** (1:09)
And even before the war or before we hear about the latest US sanctions, businesses and households in Tehran and around Iran are already struggling with rising prices. Behreng Tajdin is BBC Persians economics correspondent.

**Behrouz Tajdin** (1:25)
The United States has been imposing new waves of sanctions on Iran for the best part of the last half a century.
Not just American companies or companies that have any base in the United States working with Iran that is banned, but any other company that would have any sort of business dealings with Iran would be sanctioned by the American authorities. The fact that there is a naval blockade, which has massively reduced Iran's ability to export crude oil or other products, has severely reduced Iran's exports. And that is one of the reasons why we are seeing this rapid fall in the value of Iranian currency real. If you look at the past two years, since we kind of knew that President Trump was on the way back to the office, the value of real against dollar has reduced by something like 70%, which means that anything important to Iran, for example, mobile phones, their price in real is now more than triple what it was two years ago. And this has fueled inflation, which currently stands at 66%, which is the highest rate for more than 80 years. And that is making life for ordinary Iranian families extremely difficult.

**Bisi Adebayo** (2:52)
The BBC's Bayrang Tajdin reported in there. So with Iran's economy already under significant pressure, how much further can Washington turn the screw and how will it punish countries which raid with Iran? Ali Vyas is from the International Crisis Group and author of How Sanctions Work Iran and the Impact of Economic Warfare.

**Ali Vaez** (3:13)
Imposing a hermetic seal on a country the size of Iran, which has 15 neighbors through land and sea, is just impossible. But certainly the US can increase the pressure. There are countries, Iran's neighbors, like Turkey, Pakistan, Iraq, who cannot really afford to totally cut off their trade with Iran. They are between Iraq and a hard place. They can't alienate the US., but they also cannot turn their back on their neighbor.
Now, there are two scenarios here. One is that the economic D-Day will work and will bring the Iranian economy, which is already in dire straits, to the verge of collapse. In that scenario, the Iranians will escalate militarily to try to break the blockade.
The other scenario is that this new round of pressure will have no better outcome than the previous round and the round before that, and the round before that in the past 47 years. And in that scenario, then the United States is left with no option other than resorting to military escalation again. So unfortunately, this solution is not a solution, it's been tried and tested, and it only complicates the possibility of resolving this issue diplomatically.

**Bisi Adebayo** (4:27)
Alivius from the International Crisis Group. Well, let's see how investors are looking at the threat of a so-called economic day day for Iran. And Victoria Scholar is head of investment at Interactive Investor. Pleasure having you, Victoria. Tell us, how's Wall Street looking right now?

**Victoria Scholar** (4:43)
Well, it's a bit of a mixed session on Wall Street, but the mood is cautious. The tech-heavy NASDAQ is under pressure with risk on chip stocks like Micron and AMD weighing on the index. Oil also lower as the market awaits those Iran sanctions from the US. And of course, it comes at a time when the market has already been dealing with a sharp rise in bond yields around the world because of deficit concerns as well as worries about inflationary pressure from the US around the world.