Iran War Updates: U.S. to unveil new sanctions Trump said would hit Iran with an "economic D-Day"

Iran's Central Bank Governor Abdolnaser Hemmati said Monday that the country's leaders must speak honestly with the public about economic difficulties facing the country, but he argued that pressure from the U.S. will ultimately fail to force the nation to capitulate.

"I believe we must speak honestly with the people," Hemmati said at the Entrepreneurs' Assembly in Tehran. "We are meeting the people's basic needs. If our exports are cut off, we have made preparations for that as well."

Hemmati compared the current situation, as the Trump administration prepares to impose an "economic D-Day" on Iran, with the previous "maximum pressure" campaign adopted by Mr. Trump during his first term in office.

"I was also the head of the Central Bank from 2018 to 2020. Our circumstances were almost exactly like this. They imposed maximum pressure, imposed secondary sanctions, sanctioned all our banks, sanctioned all our agriculture, sanctioned all our oil purchases — they sanctioned everything," he said. "The country stood and got through that period. It is the same now. We stood through those conditions and, in practice, they were unable to do anything."

Hemmati questioned what additional measures Washington could even impose after having already subjected Iran to extensive sanctions for many years, and he argued that the U.S. has a greater interest than Iran in bringing the conflict to an end, and quickly.

"It won't take very long," Hemmati said. "The information I have tells me that it will not last long. They need this matter to be resolved sooner than we do."

Iran's foreign ministry spokesman warned Monday that Tehran would respond harshly to new U.S. sanctions, including with measures against countries it sees as cooperating with Washington.

"Any escalation of this situation will undoubtedly bring about consequences," Esmaeil Baghaei said. "Our hands are not tied."

Iran's foreign ministry spokesman downplayed the potential impact of new economic sanctions the U.S. is set to unveil on Monday.

Asked by a reporter about their impact, spokesman Esmaeil Baghaei said previous similar attempts by the U.S. to pressure Iran had failed, and "the Iranian people will show that they are determined and steadfast in safeguarding their rights."

Baghaei said the new measures were being imposed because the Trump administration had "miscalculated" its attacks and believed "military aggression could bring the Iranians to their knees."

The South Korean military said Monday the U.S. canceled a large, joint military exercise that had been scheduled to take place next month due to force limitations amid the war with Iran.

The Ssang Yong (Twin Dragons) exercise is a joint amphibious landing drill conducted regularly since 2012 by the South Korean Navy and Marine Corps alongside U.S. Navy and Marine Corps. British and other allied forces have taken part in previous years.

A spokesperson for the South Korean Marines said its U.S. counterparts had notified the force in June that "due to the situation in the Middle East," the U.S.'s ability to deploy forces for the exercise was constrained this year.

The news of this year's Ssang Yong drills being called off came a week after the U.S. cut short another major joint military exercise with South Korea, on President Trump's orders, fueling concern in Seoul, and in Japan, that Washington is becoming a less dependable ally in the face of rising threats from North Korea and China.

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Iran's currency hit a record low against the dollar on Monday as the U.S. government prepared to unveil new sanctions in a bid to further squeeze the country's economy to force Iran's theocratic rulers to capitulate in the nearly six-month war.

The rial dropped to 2.02 million to the U.S. dollar as trading opened on informal currency markets. Iran's official Central Bank rate stood at around 1.5 million rials to the dollar, but the informal rate is what most Iranians pay.

The currency had already been under pressure before the U.S. and Israel attacked Iran on Feb. 28, with double-digit inflation and negative growth, but it has been hitting new lows as the war takes an even greater toll.

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A ship was struck by an unknown projectile in the Red Sea off the coast of Saudi Arabia, the British military's Maritime Trade Operations agency said Monday.

The incident caused a fire on the main deck of the vessel, but the crew was safe, UKMTO said in a brief statement.

The incident took place 63 nautical miles west of the Saudi city of Yanbu, the agency reported.

Yemen's Iran-backed Houthi rebels said on July 20 that they would impose a blockade on Saudi ports and vessels in the Red Sea, and they have since attacked multiple Saudi-owned tankers in the region.

The Greek military on Monday moved one of its Patriot missile interceptor systems to the island of Crete in response to Iranian threats to hit U.S. military bases in Europe, local media reports said.

The battery was moved from the eastern island of Karpathos to Crete, where there is a major U.S. base at Souda, the reports said. Media images showed the Patriot system on a truck waiting to be loaded on a barge.

The Financial Times reported last week, quoting Iranian sources, that Iran would fire missiles at U.S. targets in Europe if President Donald Trump steps up military pressure over the Strait of Hormuz.

The Greek defence ministry did not comment on the reported transfer of the missile system.

Oman and Iran are set to continue their talks on the future management of the Strait of Hormuz on Tuesday, Tehran's foreign ministry spokesperson Esmail Baghaei said Monday.

The spokesperson said Oman's foreign minister will travel to Tehran to meet with Iranian officials.

The two countries, whose shorelines include the strategic waterway, have been engaged in talks for weeks to negotiate how to manage the chokepoint. Some details have emerged regarding the possible introduction of fees for ships transiting the strait, as well as specific routes for entering and exiting the area.

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Treasury Secretary Scott Bessent has warned Iran and its allies the U.S. will unleash an "economic D-Day" on Iran as part of a shift in strategy to pile economic pressure in the hope of breaking the stalemate in the conflict – a term first used by President Trump last week.

Writing in the British Financial Times newspaper, Bessent said the measures would be "the single greatest financial offensive ever marshalled against an adversary."

The secretary also urged Iran's allies to sever ties with Tehran, saying that doing so  would "deepen their access to global capital, reinforce confidence in their markets and attain the standing they seek in the world economy."

Bessent is set to hold a news conference on Monday at which he will unveil the new measures.

After months of military pressure and a failed agreement to negotiate an end to the war, Mr.  Trump signaled in recent weeks a shift in the strategy to exert economic pressure on Iran.

Iranian President Masoud Pezeshkian defended the memorandum of understanding signed with the U.S. in June as the best way for the country to move beyond what he described as a situation of "neither war nor peace."

In a speech published by state-run IRNA news agency Sunday, he said members of Iran's Supreme National Security Council believed the agreement was the best possible based on what he described as dignity, wisdom and the national interest.

"There is not a single provision in this agreement that amounts to capitulation," Pezeshkian said. "The supreme leader sets the policies, and we will follow that path."

The deal known as the Memorandum of Understanding was signed by President Trump in June. It set an ambitious 60-day deadline for ending the war with Iran and reaching an accord on its nuclear program. That period ended last week, after weeks of stalled progress and flare-ups, with both sides declaring they had abandoned it. There appear to be no signs of compromise on the crucial issue of reopening the Strait of Hormuz, vital to global shipping.

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Iran on Saturday warned countries against participating in the United States' "economic war" against the Islamic republic, saying they would be considered enemies.

"We declare to all countries ... do not join the economic war waged by the United States. Any country participating in the imposition of economic restrictions against us is considered an enemy," Mohsen Rezai, the head of Iran's Supreme National Security Council, said on state television.

If the countries concerned refuse to "distance themselves" from the United States, Iran would "harm" their interests, he added.

Rezai also insisted Iran had more cards to play in the war, claiming, "We have not yet attacked any American economic interests."

President Trump said  last week the U.S. will enforce "Economic Warfare and Isolation on an unprecedented scale." But he also called on the rest of the world to come to the aid of the U.S. in enforcing sanctions, the specifics of which have still not been announced.

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