The U.S. has intensified its economic pressure on Iran by expanding the scope of secondary sanctions targeting third-country companies and financial institutions that engage in trade with Iran. While the U.S. has publicly warned countries and businesses worldwide to sever economic ties with Iran, it has so far avoided direct sanctions against major trading partners, including China, the largest buyer of Iranian oil.
On August 24, U.S. Treasury Secretary Scott Bessen announced the launch of 'Operation Economic Outcast' during a press conference at the Treasury Department in Washington, D.C. Bessen stated, "Our goal is to cut off all economic lifelines supporting this oppressive regime until Iran is left isolated."
The U.S. Treasury has expanded the areas subject to secondary sanctions to include five sectors: digital assets, technology, finance, aviation, and shipping. Additionally, over 60 individuals, companies, and vessels involved in Iran's nuclear, missile, and cyber operations, as well as its oil revenue generation, have been newly designated for sanctions.
Bessen warned, "Any entity facilitating money laundering on behalf of Iran will be excluded from the U.S. dollar system." The Treasury Department also indicated that it would announce significant sanctions against a financial institution within the week.
The biggest variable in these sanctions is China, which is not only the largest buyer of Iranian oil but also possesses its own financial and trade networks that can potentially circumvent U.S. financial sanctions. The South China Morning Post noted that the effectiveness of the sanctions against Iran may depend on how much pressure the U.S. is willing to exert on China.
While the sanctions list announced on the same day included companies and individuals from mainland China and Hong Kong, major financial institutions, such as large Chinese banks, were not included.
Previously, the U.S. hinted at the possibility of secondary sanctions against two Chinese banks suspected of facilitating trade with Iran, suggesting that including these banks in the sanctions could significantly impact Iran's oil exports and financial transactions.
However, this could further strain U.S.-China relations, which are already in a precarious 'trade truce' ahead of a scheduled summit in September. Michael Sobolik, a senior fellow at the Hudson Institute, told Bloomberg that China might retaliate with measures that could significantly impact the U.S., such as tightening export controls on critical minerals or restricting exports of essential pharmaceuticals to the U.S.
China has strongly opposed the additional U.S. sanctions. The Chinese Foreign Ministry stated that U.S. sanctions and pressure do not contribute to resolving issues and vowed to take necessary measures to protect China's legitimate rights and interests. The state-run Global Times criticized the additional sanctions against Iran as 'reckless' and made it clear that China would not participate.
* This article has been translated by AI.
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