Iran hits back at US 'D-Day' sanctions and hints it could drag war out for the rest of Trump's presidency: 'We know how to play the game'

By SOPHIA STANFORD, NEWS REPORTER and ELIANA SILVER, SENIOR FOREIGN NEWS REPORTER Published: 09:15, 25 August 2026 | Updated: 09:19, 25 August 2026 Iran has threatened to retaliate against expanded US sanctions that Washington says will cut off the regime's economic lifeline, with its economy minister warning that they 'know how to play the game' and have a two-year plan in place.  US Treasury Secretary Scott Bessent unveiled the measures he likened to 'economic D-Day' on Monday but stopped short of the most punishing sanctions, saying countries that continued trading with Iran risked being forced out of the dollar-based financial system. Tehran has said they are 'prepared' for these sanctions with a 'two–year plan to manage these events' – a similar duris a meation to the rest of Trump's presidency – and have even warned that their 'enemies should wait for an attack'. Although Bessent declined to identify the countries that would be targeted or reveal when the penalties would take effect, Tehran expressed confidence that major trading partners would resist Washington's pressure campaign. The US Treasury Department announced 'the toughest sanctions in history' on 60 individuals, entities and vessels, but the list did not feature any of the Chinese financial institutions suspected of facilitating Iran's oil trade. Before the news, Iran threatened both a possible military response and further reduction in oil exports from the Gulf in retaliation for any upcoming US economic measures. After they were unveiled, Iranian Economy Minister Ali Madanizadeh said, 'We are fully prepared for the US sanctions.' He told state television: 'Naturally, the enemies intend to launch an economic terrorist attack on us, but we also have our own tools and know how to play the game. Our defense is no longer so defensive; the enemies should wait for an attack.' Iranian Economy Minister Ali Madanizadeh said, 'We are fully prepared for the US sanctions' Mohsen Rezaei, the former Revolutionary Guards chief and secretary of Iran's Supreme National Security Council, has previously threatened to shut down oil exports (May 2021) Video footage shared by Iran's Revolutionary Guards's Sepah News website shows a missile being launched from an undisclosed location towards US targets in Jordan, Kuwait and Bahrain (July 2026) 'We've been waiting for these plans for a long time, and the government is and was ready and has a two–year plan to manage these events,' he added. Madanizadeh further claimed that neither China nor Russia had 'accepted' the US measures, predicting that other countries would resist them also.  The announcement sent the Iranian currency – the rial – plummeting to its lowest rate in history.  Although the US said the sanctions were intended to force Iran to buckle to its demands by crippling the nation's economy and bring its leadership back to the negotiating table with US counterparts, risk of further escalation in the region is feared as a consequence. Brigadier General Hossein Mohebbi, a spokesman for Iran's Islamic Revolutionary Guard Corps, vowed heavy blows to US vital interests and energy choke points if Iran's infrastructure is threatened, Press TV reported.  Beforehand, Mohsen Rezaei, the former Revolutionary Guards chief and secretary of Iran's Supreme National Security Council, had already threatened to shut down oil exports – one of Tehran's main strategic approaches since the war began on February 28.  'If the economic war continues, ⁠not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf,' he said. Iran has already spent decades under layers of US and international sanctions that have battered its economy but have not deterred its leadership.  At a press conference yesterday announcing the most recent measures, Bessent said: 'We are launching an economic onslaught on Iran's connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.' 'The United States Treasury has begun Operation Economic Outcast, an unprecedented campaign against the Islamic Republic of Iran and its enablers,' Bessent said at a press conference Iran has already spent decades under layers of U.S. and international sanctions that have battered its economy but have not deterred its leadership The new sanctions target digital assets, technology, gold, aviation and shipping, Bessent shared. 'No one is above the reach of US sanctions,' Bessent said when asked about China's trade ties to Tehran. 'It is now time for world leaders to make a decision between America and Iran.' The move serves as a final warning to countries still doing business with Iran and Bessent said he wanted to give countries and companies time to sever ties.  Bessent previously urged co-operation from China, the biggest buyer of Iranian oil for several years, although the US blockade of Iran's ports, renewed in mid-July, has already cut Iranian oil flows to China. Experts say Washington is wary of Chinese retaliation for any sanctions on its banks ahead of expected talks next month between Trump and Chinese President Xi Jinping, with any curbs on China's exports of critical minerals especially sensitive. The Chinese Foreign Ministry said sanctions and pressure tactics do not help and Beijing would do what was necessary to protect China's interests.    Iran and the United States signed an interim peace deal in June, but the Islamabad memorandum, as it is known, quickly faltered.  Mediator Pakistan made 'significant progress' in the latest talks with Tehran that focused on measures such as prevention of further escalation of the conflict and the reopening of the Strait of Hormuz, the Pakistani military said in a statement on Tuesday.  'The Iranian president candidly shared his government's perspective and we had a very constructive exchange on the issues involved,' Interior Minister Mohsin Naqvi, who accompanied army chief Asim Munir to Tehran, said on X. Despite the progress in the latest peace talks, unrest in the region has continued – although no major strikes have been made by either side in weeks.  Previous Iranian attacks and threats to shipping have already stopped most traffic through the Strait of Hormuz, largely shutting down a waterway that carried around a fifth of global energy before the conflict.  Although some oil tankers have been moving through the strait in recent weeks, volumes remain very low and on Sunday Iran blacklisted 45 tankers it says failed to comply with the rules it wants to impose on Hormuz shipping. Meanwhile, Tehran's Houthi allies have restricted Red Sea shipping with attacks and threats to blockade all Saudi Arabian shipping, which carries crude to Asia through the Bab el-Mandeb strait past the group's Yemeni stronghold.  While the attacks initially only stopped some vessels, with more than half still getting through in mid-August, the situation is difficult for shippers with Chinese shipping companies now rerouting away from Bab el-Mandeb, according to industry sources.  Iran has also threatened to retaliate against any neighbors who take part in US efforts to strangle the country's economy with 'earthquake' force.  It has targeted Gulf states and Jordan repeatedly during the war, mostly focusing on US bases but also hitting energy infrastructure and other targets.  The attacks on oil and gas facilities have contributed to driving up energy prices and are a means to inflict political and economic damage to the President Trump administration. There were recent attacks in the region on a vessel off the main Saudi Red Sea oil terminal at Yanbu on Monday, with another drone strike near the Suez Canal in early August. Beyond the Middle East, Tehran has been striking the West through cyber-attacks, most recently with Iran-linked hackers shutting down a small electricity station in the UK, according to the British government. US officials have said Tehran was also likely behind cyber attacks on water plants in Minnesota. Iran has not commented on those allegations.  Almost six months have passed since the US and Israel launched strikes on Iran. Thousands of people have died, most of them in Iran and Lebanon.