The US left out a major player as Washington opened a new front in its maximum-pressure campaign against Iran's economy: China.
When he unveiled “Operation Economic Outcast” at the Treasury Department on Monday, Treasury Secretary Scott Bessent urged other countries to cut their financial ties with Iran "and sever every economic lifeline that sustains this tyrannical regime".
“It is now a time for world leaders to make a decision between prosperity and isolation, peace and terror, America and Iran,” Mr Bessent told reporters.
With a naval blockade and military operation failing to force Iran to reopen the Strait of Hormuz, Washington is placing more pressure on global partners to further cripple an Iranian economy that has been weathering sanctions for decades.
As part of this new campaign, the US announced it is broadening its scope of secondary sanctions to discourage foreign companies or countries from doing business with Iran. Those that continue to do so are at risk of being cut off from the dollar-based financial system.
However, the US stopped short of imposing immediate penalties on China or indicating how far it is willing to go with it.
China bought up to 90 per cent of Iran's shipped oil in 2025 and Mr Bessent said no country is above US sanctions. But he added that the best way to engage with countries is through “quiet diplomacy”.
And although a US naval blockade in the Strait of Hormuz has dried up Iranian oil exports, China for decades has provided Iran with the materials to build missiles and drones, according to the US-China Economic and Security Review Commission.
Bilateral trade between Tehran and Beijing was estimated to be worth almost $10 billion, according to the group, which was founded to examine the US's bilateral ties to China. The US has also placed sanctions against independent Chinese “teapot” refineries, although it has not yet gone after major Chinese banks or financial institutions.
Little detail was also offered for Iran's other major trading partners including India, Pakistan and Turkey.
Ali Wyne, senior researcher for China-US relations at the International Crisis Group, said it remained to be seen how willing Washington is to go after these major players.
Mr Wyne questioned Mr Bessent's efforts to secure the sustained support of western allies, of which he said “many” had been alienated by the administration.
“The announcement of ‘Operation Economic Outcast’ betrays anxiety, not confidence, about Washington's ability to induce Tehran's capitulation,” he said.
Stephen Fallon, founder of DBM Consulting, compared the messaging with Mr Trump's first maximum-pressure campaign in 2018, after the US withdrew from the Joint Comprehensive Plan of Action, which offered Iran sanctions relief in return for concessions on its nuclear programme.
Those that would had already left the dollar-based financial system during Mr Trump’s 2018 sanctions campaign, he said, leaving few options for Washington.
“We saw this in 2018, and it was powerful and it worked,” Mr Fallon said.
Today's campaign comes amid a fragile trade truce that Washington and Beijing struck last year, placing a cap on tariffs and ensuring China's rare-earth minerals would continue to flow. While the US has been urgently seeking to secure its domestic critical minerals supply, experts say it is still years behind China, whose export restrictions are due to take effect only a few months after President Xi Jinping's visit to Washington.
Reports suggest the Iran war is depleting the US's military stockpile, which could take years to rebuild. Mr Trump's administration is now engaging in diplomatic efforts and tapping into the private sector for projects linked to rare-earth minerals, scandium and other metals crucial to developing advanced defence systems.
“Iran rather is … frustrating, humiliating and exhausting the US. Why would China interrupt that?” Mr Fallon said.
