After days of promising the “toughest sanctions in history”, the US announced punitive measures against Iran on Monday and threatened sanctions against Tehran’s trade partners. Treasury secretary Scott Bessent said nearly 60 Iran-linked entities, individuals, and vessels would be sanctioned as part of Operation Economic Outcast, without offering specific details on the measures. He said the scheme would amount to “economic asphyxiation” on the regime and warned that superpower China - Tehran’s largest trade partner - would not be beyond its scope.
"An economic engagement of any kind with this murderous regime will expose those responsible to the full reach of American power." Iran’s finance minister, Ali Madanizadeh, said Tehran is fully prepared to retaliate, while Beijing warned that the move would only serve to “intensify” tensions and vowed to take measures to “safeguard” its interests. But experts have questioned whether Trump has delivered on his promise of an “economic D-Day” on Tehran, pointing out that the most severe and impactful measures were not actually announced. Rather, they say the operation was intended as a warning shot.
Since 1979, US policy has been largely to punish, contain or isolate Iran and successive administrations have done so through a mix of primary, secondary and targeted financial economic sanctions. The Joint Comprehensive Plan of Action (JCPOA), negotiated by the Obama administration in 2015, placed limits on Iran’s nuclear program in exchange for sanctions relief. At the time, Iran’s economy was suffering under crushing inflation and surging food prices.
But Trump withdrew from the agreement in 2018 and later reimposed sanctions on Iran’s nuclear program, oil exports, banking and financial system as part of his maximum pressure campaign. These sanctions were broadly kept in place by Joe Biden. The sanctions have forced Tehran to seek creative workarounds to keep its economy afloat.
This includes the use of the “shadow fleets” shipping illicit Iranian goods, creating hand selling homemade military hardware such as Shahed drones and ramping up trade cooperation with Russia and China. During his press conference, Bessent did not name which countries could face secondary US sanctions, saying only that Trump was calling leaders to instruct them to immediately halt all trade activity with Tehran. The message is not only directed at Iran, but also at the countries and businesses that continue to facilitate trade with it.” But despite the symbolic significance of the announcement, Dr Quilliam says that “what matters now is enforcement”.
The measures are “potentially significant” because they broaden the targets of sanctions, he says. Trump’s war has proved unpopular with voters due to higher gas prices caused by Iran’s closure of the Strait of Hormuz. The threat remains on the table, but Washington has not taken that step yet.” China remains Iran’s biggest trading partner, having purchased oil from the country for years despite a US blockade impacting the flow of oil.
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