The United States has threatened sweeping sanctions against countries and businesses that continue trading with Iran, as Washington seeks to achieve through economic pressure what months of military action have failed to deliver.
However, uncertainty remains over whether the Trump administration is willing to risk a confrontation with China, Iran’s largest trading partner. Beijing has already indicated that it will resist US demands to sever economic ties with Tehran.
Iran has also warned that it will retaliate against any country supporting the US-led effort to isolate it economically.
US Treasury Secretary Scott Bessent announced the initiative, named Operation Economic Outcast, on Monday. Describing it as an unprecedented global campaign, he compared its launch with the D-day landings in Normandy, which marked a decisive moment during the Second World War.
“Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections around the globe,” Bessent said on Monday. “Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.”
When asked whether China would face sanctions, Bessent said Washington would target anyone involved in helping Iran convert its oil exports into revenue. China reportedly purchased about 80% of Iran’s seaborne oil exports last year.
“We want to make clear here today that no one is above the reach of US sanctions. That if they facilitate transactions and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted.”
Bessent said US officials had identified countries and organisations that continued to conduct business with Iran. Each would be given a deadline to end those dealings, although the timeframe would vary according to individual circumstances.
“Any entity that facilitates money laundering on behalf of Iran will be removed from the US dollar system,” he said. “The clock just started ticking.”
According to Bessent, President Donald Trump was “making phone calls to world leaders with specific requests to cease their interactions with the regime”. He did not confirm whether Trump planned to raise the matter directly with Chinese President Xi Jinping.
China rejected the use of economic coercion and urged the parties involved to pursue a diplomatic solution.
“Regarding the Iran issue, sanctions and pressure do not help resolve the problem. China calls on the relevant parties to take responsible actions and resolve the issue through political and diplomatic means,” the Chinese embassy in Washington told reporters.
Tehran responded by warning that it could use military or cyber capabilities against countries involved in enforcing the sanctions. Maj Gen Ali Abdollahi, chief of staff of Iran’s armed forces, said retaliation could involve operations by land, sea or air, as well as cyber-attacks.
The secondary sanctions were unveiled nearly six months after the US and Israel launched an attack on Iran that killed Supreme Leader Ali Khamenei.
Initial predictions that Iran’s government would collapse or accept Washington’s demands to abandon uranium enrichment and other central parts of its nuclear programme did not materialise.
Instead, hardliners appeared to tighten their control in Tehran. Iran subsequently declared the Strait of Hormuz closed and attacked vessels that defied the order, while Trump responded by blocking Iranian oil exports through the strategic waterway.
The resulting standoff has had far-reaching consequences for the global economy, while leaving Washington without either a military victory or a negotiated agreement.
Sina Toossi, a senior non-resident fellow at the Center for International Policy, said: “After nearly six months without a military or diplomatic victory, Washington appears to be trying to accomplish through intensified economic strangulation what military force has so far failed to achieve. But Tehran is answering that zero-sum approach with one of its own.”
Despite the shift towards economic measures, US Defense Secretary Pete Hegseth said Washington had not ruled out further military operations.
“By no means are we foreclosing using kinetic strikes anywhere in the strait of Hormuz or around Iran,” Hegseth told reporters on Monday.
Ahead of the US announcement, the United Arab Emirates, a close ally of Washington and Israel, said it was suspending trade relations with Iran. Turkey, another important Iranian trading partner and a critic of the US-led campaign, has not yet publicly responded to the sanctions warning.
Andrew Miller, a senior fellow at the Center for American Progress, said the latest measures illustrated Washington’s failure to destroy Iran’s nuclear capabilities or seriously weaken its government.
“The announcement of new economic sanctions on Iran and those countries trading with it signals what is plain to all: this war has brought the United States no closer to eliminating Iran’s nuclear programme or crippling the Iranian regime. But while sanctions can be effective, it is highly unlikely they will produce a quick settlement favourable to the United States.”
