US Targets Iran’s Auto and Rail Giants in Fresh ‘Operation Economic Outcast’ Sanctions

The Trump administration on Thursday imposed fresh sanctions on Iran’s automotive and rail sectors, designating the country’s two biggest carmakers, its state railway company and dozens of related firms as part of the “Operation Economic Outcast” pressure campaign, according to the US Treasury Department.

Announced by Treasury Secretary Scott Bessent, the action designates Iran Khodro Company (IKCO) and SAIPA Iranian Automobile Manufacturing Company — which together represent more than 90 percent of Iran’s domestic auto market — alongside subsidiaries including Iran Khodro Diesel, Pars Khodro and Zamyad, plus motorcycle maker Niroo Motor Shiraz, which Treasury said uses prison labour and works closely with the Islamic Revolutionary Guard Corps (IRGC).

Treasury also designated the state-owned Islamic Republic of Iran Railway Company, the Raja Passenger Trains Company and the Railway Transportation Company, a leading private freight operator, under two new sectoral sanctions determinations authorising penalties on anyone operating in Iran’s automotive or rail sectors.

Foreign suppliers feeding the sanctioned industries were designated as well, including companies in Indonesia, the United Arab Emirates, Türkiye and Hong Kong accused of shipping auto parts to Iranian manufacturers. Treasury said the move responds to Tehran’s growing reliance on overland routes to move petroleum, fertiliser and chemicals as the US maritime blockade chokes oil shipments through the Strait of Hormuz.

“Today’s action directly targets Iran’s enablers and lays the groundwork for the United States and our partners to drain the regime’s revenue once and for all,” Bessent said, according to the department. Treasury said Operation Economic Outcast, launched on August 24, aims to force Tehran to negotiate an end to the war with the US and Israel that began about seven months ago.

Sources

• US Treasury Department — Operation Economic Outcast press release
• Reuters — US sanctions target Iran’s auto, rail sectors after blockade chokes shipping lanes