Defense Secretary Pete Hegseth said Monday that the United States has not ruled out further military strikes against Iran, even as the Trump administration opened a new front in its campaign against Tehran with a sweeping package of sanctions that Treasury Secretary Scott Bessent branded "Operation Economic Outcast."
Asked whether kinetic strikes were currently off the table, Hegseth told reporters they were not. "If we need to use kinetic strikes, we'll use them," he said, adding a warning to Tehran: "If Iran is foolish enough to overplay their hand or mess with the American military, we'll do what we need to do." The Pentagon said it was "by no means" ruling out action "anywhere in the Strait of Hormuz or around Iran," with Hegseth describing the U.S. naval posture in the waterway — through which roughly a fifth of the world's seaborne oil passes — as "ironclad."
A widening economic front
Hours later, Bessent unveiled the Treasury Department's latest and, officials said, most expansive round of sanctions since the United States and Israel launched strikes on Iran in February. The measures target brokers and shipping networks operating out of the United Arab Emirates, Hong Kong, mainland China, Singapore, Switzerland and Europe, along with "shadow fleet" tankers accused of moving Iranian crude and revenue streams that Treasury says flow to the Islamic Revolutionary Guard Corps-Qods Force.
"Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone."
Scott Bessent, U.S. Treasury Secretary
Bessent said Washington was giving foreign banks and firms "the opportunity to remedy bad behavior" before facing secondary sanctions, and pointedly did not exempt Chinese financial institutions that continue to process Iranian oil payments. "No one is above the reach of U.S. sanctions," he said. The Treasury campaign follows a similar, smaller round of sanctions on Hezbollah financing announced earlier this month.
Diplomacy stalled since the ceasefire lapsed
The dual-track pressure — military threats paired with financial isolation — comes roughly six months after the U.S. and Israel launched what Trump called "major combat operations" against Iranian military, government and infrastructure sites in late February. A subsequent interim truce, brokered with a 60-day window for negotiations, expired earlier this month without a broader deal. Washington has rejected extending it, and Tehran has said the agreement was meant to end the war outright rather than serve as a temporary pause.
Trump has said the core obstacle remains Iran's nuclear program. "Most points were agreed to, but the only point that mattered, NUCLEAR, was not," he said of the stalled talks, a dispute the Congressional Research Service has tracked since the ceasefire first took hold in the spring. Iran, meanwhile, has continued to assert authority over shipping through the Strait of Hormuz even as U.S. officials insist the passage remains secure.
Iranian officials have dismissed the latest pressure campaign. Parliament Speaker Mohammad Bagher Ghalibaf wrote earlier this month that Bessent and Hegseth were "way out of their league," adding: "Americans think squeezing Iran harder will win concessions that were never part of the agreement." Iran has not announced retaliatory measures in response to Monday's sanctions specifically.
Hegseth also used Monday's briefing to press Congress to approve the Pentagon's full requested budget — which he has pushed toward $1.5 trillion — and urged defense contractors to shift onto what he called a "wartime footing." Separately, the Navy said the carrier USS Abraham Lincoln, which spent months deployed to the region, is now returning home, even as officials stressed that other assets remain positioned to respond in the Gulf.
With no new negotiating session scheduled and both sides publicly dug in, analysts expect the standoff to continue playing out through economic pressure rather than a return to open conflict in the near term — though Hegseth's comments Monday underscored that Washington is not taking the military option off the table.
