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Trump administration fighting economic wars with adversaries and allies alike
26 August 2026
As negotiations to end the war with Iran stalled, the Trump administration is now pivoting to economic measures to exert maximum pressure on Iran. On Monday, US Treasury Secretary Scott Bessant announced an “economic D-Day” to launch Operation Economic Outcast, a range of refreshed sanctions and sweeping penalties not just on Iran, but Iran’s economic partners as well. Bessant described the announcement as a “warning shot” to allow countries doing business with Iran to cut ties before the measures take effect.
Iran’s biggest oil importer and strategic partner, China, quickly denounced the announcement, calling the actions “illegal unilateral sanctions.” While many other trading partners with Iran have remained quiet, the United Arab Emirates said it halted trade with Iran last week, following missile strikes. Iranian Economy Minister Ali Madanizadeh called the announcement an “economic terrorist attack” but said, “we know how to play the game too.”
This economic focus on Iran follows a week of escalating economic tensions between the United States and Canada. Earlier this week, Canadian Prime Minister Mark Carney announced Canada was walking away from trade talks with the United States, calling the US actions a trade war and saying, “You’re at war when you get attacked. We got attacked.” The United States and Canada were negotiating ahead of the implementation of US tariffs that were announced in July. However, citing, “unacceptable” last-minute demands, Carney announced Canada would be imposing retaliatory tariffs on the United States.
These economic pressure points are flaring up as the midterm elections approach and the cost of living remains a leading issue for US voters. Tapping into a key cost of living concern, on Friday, President Trump announced a 90-day tariff exemption for beef imports (one of Australia’s largest exports to the United States), and said, “We have a commitment that this beef will be sold at 25 percent below current market prices.” This exemption will stretch just past the midterm elections. Given the Trump administration’s devotion to tariffs, this exemption is a significant concession; however, given the cost of oil is expected to remain high through the midterms, it is unclear these efforts will change voter perceptions when they go to the polls to determine which party controls Congress.
Mari Koeck
Director of Engagement and Impact
Lead image: US Secretary of the Treasury Scott Bessent speaks during a press conference in Washington, DC on 24 August 2026 (photo by Kent Nishimura via Getty Images).
"Any entity that facilitates money laundering on behalf of Iran will be removed from the U.S. Dollar system. The clock just started ticking."
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