US Treasury Secretary Warns Iran's Economy Could Collapse Within Months
Al Jazeera Staff
US Treasury Secretary Scott Bessent warned on August 31 that Iran's economy could collapse within weeks or months without negotiations. He spoke at the G20 meeting in North Carolina amid Washington's intensified sanctions campaign, including the new "Operation Economic Outcast."
US Treasury Secretary Scott Bessent warned on August 31 that Iran's economy could collapse "within a few weeks or a few months" if the Tehran government does not halt its destabilizing activities and move toward negotiations. He spoke on the sidelines of the G20 Finance Ministers and Central Bank Governors meeting in Asheville, North Carolina.
Speaking to reporters, Bessent stressed that the goal of the latest sanctions is to "create conditions for Iran to want to sit down at the negotiating table." He also suggested that Iran's strong military response is a sign the country is suffering economically.
"I think they are acting in a military way because they are losing economically," Bessent told reporters on August 31, adding that a collapse "does not necessarily have to happen" if the Iranian government "changes its mindset."
Last week, the US imposed a new wave of sanctions targeting five sectors of Iran's economy—aviation, digital assets, gold, technology, and maritime shipping—while also sanctioning 60 specific individuals and vessels. This is part of an economic pressure campaign launched by the Trump administration called "Operation Economic Outcast."
Ahead of the G20 meeting, Bessent said the US could announce new sanctions weekly and that the next step could be completely cutting off a financial institution from the dollar-based payment system. "You will see more every week. We started with banks and made clear we do not accept them holding Iran's money or supporting this regime," he said.
Earlier, on August 29, the US imposed sanctions on the UAE branches of Egypt's Banque Misr bank over alleged financial ties to Iran.
The European Union (EU) also voiced support for the US campaign. "The EU welcomes efforts to ensure Iran ends its destabilizing activities and engages in peace negotiations in good faith, including through additional economic pressure such as the US-led Operation Economic Outcast," the European Commission said.
At the G20 meeting, Federal Reserve Chair Kevin Warsh delivered his first speech at an international economic forum since taking office in May. He argued that inflation remains too high and wages are consistent with full employment, while emphasizing that price stability remains the Fed's priority. In a previous speech at the Jackson Hole conference on August 29, Warsh had stated that policymakers would "have to work" if they do not believe inflation is returning to the 2% target. This remark could signal an upcoming interest rate hike.
Rising US-Iran tensions are affecting financial markets. Gold prices, considered a safe haven, fell 0.8% to $4,419.38 per ounce, the lowest level in two weeks. On Wall Street, major indices declined, with the Nasdaq down 0.4%, the S&P 500 down 0.5%, and the Dow Jones down 0.6%.
