RESOLVING THE LEDGER
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Vehicles drive past a billboard with an illustration showing the Strait of Hormuz and the sewn lips of President Trump in a square in downtown Tehran, Iran, May 2. Vahid Salemi/AP hide caption
When the U.S. and Israel launched their war against Iran in February, President Trump vowed a swift victory.
Now, nearly six months later, and on the heels of a failed 60-day ceasefire deadline that was meant to end the war, the U.S. instead finds itself entangled in a protracted conflict. The war with Iran has battered the global economy, agitated Gulf allies and depleted the U.S. arsenal . It has also weakened President Trump's leverage to pursue his primary war goal, which has shifted from curbing Iran's nuclear ambitions to regime change and is now aimed at prying the Strait of Hormuz out of Iran's grip.
State of the World from NPR Will the Trump Administration's latest economic pressure on Iran work? It is against this backdrop that U.S. Treasury Secretary Scott Bessent unveiled a new sanctions campaign Monday against Iran that intends "to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone." Bessent put nations that continue doing business with Iran on notice, saying they should "expect to share in the isolation of a withering regime."
Past administrations, including Trump's first, have attempted to pressure Iran economically through various sanctions campaigns over the years. But the regime has kept money flowing and the government afloat through various smuggling operations and schemes, according to past U.S. Treasury Department investigations. That has raised questions about whether another punishing economic campaign can really bend — or break — Iran's ruling establishment.
"One thing that we've seen over the years is that maximum pressure tends to generate maximum resistance from Iran's side," says Esfandyar Batmanghelidj, chief executive of the London-based Bourse & Bazaar Foundation, a think tank focused on Iran's economy. "What the Trump administration is likely to do is trigger Iranian leaders to resume some of the more aggressive targeting in the region in order to show they're not going to be coerced into basically capitulating to U.S. demands."
Middle East conflict Treasury Secretary Scott Bessent unveils new U.S. economic sanctions to isolate Iran Efforts to isolate and squeeze Soon after the U.S. and Iran dropped their first bombs on Iran, the Islamic Revolutionary Guard Corps launched retaliatory missiles against several U.S. Gulf allies.
Iran is starting to pay a price for those attacks.
The United Arab Emirates, which was the biggest importer of Iranian goods worldwide, valued at roughly $21 billion in 2024, according to the World Trade Organization, and a country Iran has used in the past to bypass sanctions, announced recently it's halting all trade and financial transactions with Iran.
"Regional countries seem to be taking steps — one step at a time — to make it more difficult for Iran to use those jurisdictions to bypass sanctions and as result of the Iranian regime's own decisions to target these countries," says Miad Maleki, a former senior U.S. Treasury official who is currently with the Foundation for Defense of Democracies, an organization with close ties to U.S. and Israeli national security establishments. "The landscape of economic sanctions evasion is shifting for Iran."
Former Treasury officials and analysts say the isolation and pressure the Trump administration intends to build on will ultimately come down to whether countries — like China, a longtime customer of Iran's crude oil supply — will cooperate.
Not long after Trump's Aug. 19 post on Truth Social vowing to unleash an "ECONOMIC D-DAY" on Iran, a spokesman for China's Foreign Ministry said that China opposed unilateral sanctions and that pressure would not resolve the crisis in Iran.
In 2025, China purchased an estimated $31 billion in crude oil from Iran, which accounted for nearly 45% of Iran's government budget, according to a March report from the U.S.-China Economic and Security Review Commission. In July, Secretary Bessent said those oil imports plunged by approximately 40% from prewar levels because of the U.S. naval blockade. It's not clear whether Beijing, which has provisionally tapped its oil reserves, will ultimately give in to Trump's demands and cut imports and whether the Trump administration will penalize China if it doesn't.
"There has been something of a détente between the U.S. and China after some tit-for-tat where we saw semiconductors, rare earth minerals used in economic warfare," says Adam Szubin, who served for nearly a decade as the director of Treasury's Office of Foreign Assets Control. "It seems like the Trump administration and the Chinese government want to see things quieter, and so we're probably at a moment where there's some hard discussions going on behind the scenes about how much China is willing to do without the U.S. following through on its threat."
A lenient stance toward China could amount to a lifeline for Iran's government. A hard-line approach may trigger blowback.
"The U.S. is going to be forced to impose sanctions on substantial Chinese entities to make this work," says Richard Nephew, who was the lead sanctions expert on the U.S. negotiating team that reached the 2015 nuclear deal with Iran. "If we do that, then we will lose any chance of a trade deal with China or will be forced to back down on Iran. That said, the blockade is still doing a lot of damage to Iran, so even if sanctions don't have Chinese cooperation, however grudging that may be, there will still be an impact."
Treasury Secretary Scott Bessent speaks at a news conference Monday at the Treasury Department in Washington. Julia Demaree Nikhinson/AP hide caption
When asked about possible sanctions against China at his Monday press conference, Secretary Bessent simply said "no one is above the reach of U.S. sanctions," never mentionin...
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