The language used on Monday by Treasury Secretary Scott Bessent was dramatic as he revealed a new range of sanctions targeting Iran. The initiative is part of the Trump administration’s strategy to leverage economic pressure to compel Iran to surrender, aiming to end the ongoing conflict and reopen the Strait of Hormuz. Bessent stated with determination, “We are not managing the Iranian threat anymore; we are ending it.” These sanctions intend to cut every financial opportunity that currently supports the Iranian government until Tehran is isolated.
Known as Operation Economic Outcast, the plan broadens the scope of secondary sanctions on nations and organizations that conduct business with Iran. It introduces new sanctions aimed at sectors such as technology, shipping, and digital assets. However, experts specializing in Iran express skepticism about whether these measures will significantly influence the theocratic government. President Trump initially anticipated that the conflict with Iran would conclude within six weeks, not extend to multiple months.
Historically, U.S. administrations have tried to apply pressure on Iran with sanctions. Despite these efforts, Iran has managed to endure through various financial maneuvers and smuggling operations, per the U.S. Treasury Department. “Iran has strategies to manage,” remarked Kate Dourian, a fellow at the Arab Gulf States Institute. Dourian suggested that much of Bessent’s statement was likely directed at other countries, rather than Iran itself.
Bessent further warned nations maintaining business ties with Iran that they “should prepare to face isolation alongside a weakened regime.” The most recent sanctions affect sixty entities engaged with Iran, with some located in countries such as the UAE, Singapore, Malaysia, Hong Kong, France, the U.K., and China—although primarily targeting private Chinese businesses.
The sanctions, however, do not extend to major Chinese financial institutions, which would be a more significant step. Unless these institutions are targeted, analysts argue that Bessent’s ominous predictions about Iran will fall short. Brett Erickson, a sanctions expert in Washington, shared his doubts, questioning if the U.S. can justify risking international relations and its global standing for a strategy with limited chances of success.
Iran’s economic counterpart, the UAE, recently ceased all trade with Iran, potentially affecting the regime. In 2024, the UAE was the leading importer of Iranian products, with 80% of Iran’s foreign currency transactions occurring in Dubai. This action might hinder Iran’s ability to access foreign currencies and tap into reserves accumulated from oil sales to China.
China represents Iran’s primary economic partner. Iranian oil sales to China constitute almost 45% of Iran’s government budget. Maliki, a senior fellow from the Foundation for Defense of Democracies, explained that these funds are often used to support Iranian proxy groups such as Hezbollah and the Houthi rebels.
China’s state-supported banks have been accused of facilitating loans to smaller refineries that handle sanctioned Iranian oil. Reports also suggest that China is falsifying the origin of Iranian oil and changing the ownership status of vessels to appear as Chinese. Additionally, rather than paying Iran directly, China is investing in infrastructure within Iran to bypass global banking systems where sanctions apply.
Bessent hinted Monday that a prominent financial institution might face sanctions soon. In response, China emphasized its opposition to the sanctions and pledged to protect its interests.
The Iranian government has endured long-standing sanctions. The value of its currency against the dollar has dramatically declined. Recent comments from Hariri of the Iran-China Chamber of Commerce noted the severe impact of the U.S. naval blockade on Iran’s ports.
Yet, Iranian Economy Minister Ali Madanizadeh countered that Iran remains prepared for further sanctions, foreseeing another setback for the U.S. He announced Iran’s readiness to adopt a more aggressive stance and declared that countries like China and Russia do not recognize U.S. measures.
Madanizadeh assured that his government has a strategy to manage these challenges and possesses tools to navigate the circumstances effectively.