U.S. sanctions Iran’s railway and automotive industries and their foreign suppliers

The Trump administration imposed sanctions on Iran's railway and automobile industries on the 1st, as well as foreign suppliers that supply the industries. The U.S. Treasury Department pointed out that this move expands the economic pressure campaign launched by the United States on Iran during the war and further isolates Tehran.

Reuters reported that the above sanctions are part of the "Operation Economic Outcast" announced by the U.S. Treasury Department on August 24 this year, aiming to cut off Tehran's funding sources for war, missile manufacturing, cyber attacks, and the Islamic Revolutionary Guard Corps (IRGC).

According to reports, this move will extend the U.S. economic pressure on Iran from sea to land. The U.S. blockade of Iranian ports has forced Tehran to rely more on automobiles and rail to transport petroleum products, fertilizers, chemicals and other goods. According to the U.S. Treasury Department, the sanctions announced on the 1st targeted these alternative transportation pipelines.

The sanctions targets include Iran Khodro Automobile Company (IKCO) and Saipa Automobile Manufacturing Company (SAIPA). The U.S. Treasury Department stated that these two companies accounted for more than 90% of Iran's domestic automobile market.

The U.S. Treasury Department also added the state-run Islamic Republic of Iran Railway Company, which provides passenger and freight services, to the sanctions list.

Others sanctioned include the Raja Passenger Trains Company and the Railway Transportation Company. The U.S. Treasury Department said the latter is Iran's main private rail freight operator.

U.S. Treasury Secretary Scott Bessent said the action "directly targets Iran's collaborators and sets the stage for the United States and our partners to completely cut off the regime's revenue."

The sanctions announced on the 1st also target foreign companies in Indonesia, the United Arab Emirates and Türkiye that supply the Iranian automobile industry.

Brett Erickson, head of risk advisory firm Obsidian Risk Advisors, said: "The blockade has squeezed Iran from the sea, sanctions are increasingly isolating Iran from the air, and now Washington is beginning to tighten Iran's economic lifeline on land."

However, expanding sanctions are likely to come at a heavy cost to ordinary Iranians. "You can't kill an economy like this without killing the livelihoods of the people who depend on it," Erickson said.