On Monday, U.S. Treasury Secretary Scott Bessent announced a new wave of sanctions against Iran, describing them in dramatic terms. These measures form part of the Trump administration’s strategy to wield economic pressure in compelling Iran to submit, aiming to end the ongoing six-month conflict and to reopen the Strait of Hormuz.
Bessent declared that the U.S. is terminating the Iranian threat with sanctions designed to ‘break every economic link that keeps this oppressive regime afloat until Iran stands isolated.’ The initiative, dubbed Operation Economic Outcast, expands secondary sanctions affecting countries and entities engaged with Iran, adding new sanctions to sectors such as technology, shipping, and digital assets.
Nonetheless, Iran experts express skepticism about whether these new measures will effectively force Iran to admit defeat in a conflict initially predicted by President Trump to last just six weeks. Throughout decades, various U.S. administrations have leveraged sanctions against Iran. Despite this, the regime has endured using intricate financial maneuvers and smuggling schemes as per the U.S. Treasury.
Kate Dourian, associated with the Arab Gulf States Institute, shared her perspective with CBS News, noting, ‘Iran is proficient in finding alternatives.’ She highlighted that much of Bessent’s rhetoric appeared directed at other nations rather than Iran itself.
During his announcement, Bessent warned nations maintaining business associations with Iran to ‘anticipate sharing in the isolation of a weakened regime.’ Sixty entities suspected of aiding or trading with Iran were identified under the new sanctions on Tuesday, including entities in the UAE, Singapore, Malaysia, Hong Kong, France, the UK, and notably China.
However, the sanctions target specific private Chinese businesses rather than imposing more significant actions against China’s major financial institutions. Analysts argue that without this, Bessent’s grim forecasts for Iran might fall short.
Brett Erickson, a sanctions expert based in Washington, described the measures as anything but a decisive economic strike, referencing President Trump’s own language. He questioned whether Washington could justify harming its international relations and standing for a strategy with slim chances of success.
Iran has repeatedly demonstrated resilience under U.S. sanctions. The UAE’s decision last week to halt trade with Iran potentially represents a significant impact. As reported by the World Trade Organization, the UAE was the largest importer of Iranian goods in 2024, handling around 80% of Iran’s foreign currency exchanges in Dubai, according to Miad Maliki from the Foundation for Defense of Democracies.
Maliki explained the UAE’s pivotal role in severing Iran’s access to foreign currencies and reserve funds, originating from oil sales to China. Though China is deemed Iran’s crucial lifeline, facilitating close to 45% of the Iranian budget last year through crude oil purchases.
Maliki further elaborated on Iran’s economy relying on oil exports to China, with funds from these sales either facilitating Chinese imports or being rerouted outside China. Sometimes, proceeds are directed to support Iranian proxy entities in regions like Lebanon and Yemen.
Regarding the allegations linking China’s state-backed banks with loans to small refineries processing sanctioned Iranian oil, the U.S. Treasury accused China of disguising oil origins and altering ship ownership to appear Chinese. Rather than paying Iran, China allegedly constructs infrastructure like airports and grids, thus bypassing the SWIFT global banking sanctions.
In his remarks on Monday, when queried about Chinese banks being potential new sanctions targets, Bessent declared, ‘No one is immune to U.S. sanctions.’ He hinted at a forthcoming major financial institution sanction announcement by week’s end but shared no specific details.
Chinese Foreign Ministry spokesman Lin Jian issued a firm rebuttal on Tuesday, firmly rejecting ‘illegal unilateral sanctions’ and vowed to take necessary measures to protect its rights and interests.
Notwithstanding years of enduring U.S. sanctions, the Iranian populace has faced its currency’s depreciation against the dollar. Reportedly, the Iranian economy minister Ali Madanizadeh expressed readiness for the impending U.S. sanctions, predicting a U.S. defeat and hinting at retaliatory measures.
Madanizadeh emphasized that neither China nor Russia consented to the U.S. sanctions, anticipating resistance from other countries. He stated that Iran has a strategic two-year plan to handle these developments.
The report ends noting, ‘We possess our own resources and understand how to manage the situation.’ The narrative explores the complexity of the Iran-China economic relationship amidst U.S. efforts to curb Iranian economic activities.