EU backs Trump's economic campaign against Iran, supports Operation Economic Outcast

US treasury secretary Scott Bessent on Thursday said the European Union has thrown its weight behind Donald Trump's strong economic campaign against Iran, claiming the bloc has "officially joined" the US-led "Operation Economic Outcast". "The European Union has officially joined Operation Economic Outcast and we appreciate their strong and early stance," Bessent said in a statement on X. The announcement came as the EU signalled that it could support further economic measures against Tehran, while making clear that diplomatic efforts and de-escalation must continue alongside the pressure campaign. "The United States stands firm with our allies in ensuring the murderous Iranian regime cannot exploit the global financial system to fund its nuclear ambitions, weapons programs, and terror proxies. The world is sending a clear message to the Iranian regime: We will not stop until every remaining financial lifeline has been severed," he added. The EU listed several areas of concern behind its position, including Iran's nuclear and ballistic missile programmes, its regional activities and its alleged support for Russia in the war in Ukraine. "The European Union has consistently urged Iran to curb its nuclear programme, and its ballistic missile programme, refrain from destabilising activities in the region and in Europe, stop its military support for Russia's war of aggression against Ukraine and cease the violence and repression against its own people," the EU said in a statement shared by Bessent. At the same time, Brussels stressed that economic pressure alone would not be enough to resolve the crisis. It said diplomacy remained essential for a peace settlement, restoration of regional stability and ensuring "full freedom of navigation and safe transit through the Strait of Hormuz". The Strait has emerged as a key flashpoint amid the conflict, with disruptions to shipping and energy flows raising concerns well beyond the region. The EU said it had already put in place broad sanctions designed to restrict Iran's ability to use international economic and financial systems to pursue activities that the bloc considers a threat to international security. "It remains ready to take further measures, where necessary, to safeguard its security and interests, including freedom of navigation through the Strait of Hormuz," the EU said. Brussels also linked any further economic action to efforts to bring Iran back to negotiations. The bloc welcomed moves aimed at pushing Tehran to end its destabilising activities and enter peace talks "with good faith", saying additional economic pressure through Operation Economic Outcast could form part of that approach. "The EU will continue to work closely with the United States and other G7 and international partners to maintain pressure on Iran and contribute to de-escalation and regional stability," it said.

What is Operation Economic Outcast

Washington unveiled the operation last month as a broad financial campaign targeting Iran's economic lifelines. Bessent said the US treasury was seeking to isolate Tehran from international financial networks while targeting sources of revenue that Washington believes help sustain the Iranian government. "The US Department of the Treasury has launched Operation Economic Outcast, an unprecedented campaign against the Islamic Republic of Iran and its neighbours," Bessent said when announcing the initiative. "Our goal is to sever every economic lifeline that sustains this tyrannical regime," he said. As part of the campaign, the US said it had mapped networks allegedly being used by Iran to move oil and get around existing sanctions. Washington also widened the range of Iran-linked activities that could trigger sanctions, with digital assets, technology and shipping among the areas coming under greater scrutiny. Bessent had framed the campaign as a choice between economic isolation and reintegration into the global economy. "Iran now faces a clear choice, with only two paths before them: complete global isolation and a subsistence economy, or a path to normalcy with the opportunity to rejoin the global economy," he had said.

Pressure and diplomacy

The EU's position represents a balancing act: Closer coordination with Washington on economic pressure, while keeping diplomacy at the centre of its approach. By signalling its readiness to participate in additional measures, the bloc could add greater weight to the US effort to squeeze Tehran financially. But its emphasis on negotiations, de-escalation and freedom of navigation also underlines Europe's interest in preventing the economic campaign from further widening the conflict.

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