WASHINGTON—The Trump administration expanded its sanctions campaign against Iran on Friday, as Washington’s chief diplomat said the U.S. would have been negligent not to kill a top Iranian general last week given intelligence of an imminent threat against Americans.

The U.S. secretaries of state and treasury, in announcing fresh sanctions and new powers to hit additional Iranian industries and penalize anyone found helping the Iranian economy, signaled the administration is choosing to wage more economic war rather than use…

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