Kenneth Glad
Washington is extending its campaign against Tehran beyond Iran itself, putting foreign companies and financial institutions under greater scrutiny. Beijing’s response could become one of the most consequential tests of the new approach.
China is resisting Washington’s attempt to tighten Iran’s economic isolation, creating an immediate challenge for a US strategy that depends heavily on cooperation from Tehran’s major trading partners.
China bought an estimated 80 percent of Iran’s shipped oil last year, according to The Guardian., making Beijing central to any effort to reduce the revenue Tehran receives from overseas sales. Chinese officials have opposed unilateral sanctions and said the country will take measures to protect its interests.
The dispute comes after US Treasury secretary Scott Bessent announced Operation Economic Outcast. Associated Press reported that Washington also imposed measures on nearly 60 Iran-linked individuals, companies and vessels while warning governments and financial institutions about maintaining targeted commercial relationships with Tehran.
The threatened secondary sanctions could affect foreign companies or banks that continue prohibited dealings involving Iran. One possible consequence is restricted access to the dollar-based financial system, a particularly significant risk for institutions with substantial international business.
Bessent has not announced a single public deadline for countries to change their behaviour. Asked about the reach of the campaign, he said: “No one is above the reach of U.S. sanctions.”
China raises enforcement questions
Applying that principle to China would carry much greater economic consequences than targeting smaller trading partners. Washington must therefore decide how aggressively it is prepared to pursue Chinese institutions while maintaining a broader commercial relationship with Beijing.
Julian Borger, senior international correspondent at The Guardian, described the sanctions campaign as a shift in emphasis after military action failed to deliver all the outcomes sought by the Trump administration. On the possibility of escalation with Beijing, he said: “Predicting how far Trump will go in any direction is hard.”
Iran has responded with defiance, according to The Guardian, warning that countries participating in the US effort could face retaliation. Tehran is also confronting inflation, unemployment and a weakened currency after years of international restrictions and the economic consequences of the conflict.
For Washington, the immediate question is therefore not simply how much additional pressure can be placed on Iran, but whether major economies are prepared to cooperate when enforcement could also affect their own banks, companies and energy supplies.
Sources: The Guardian, Associated Press, U.S. Department of the Treasury
