economic

The Eastern Economic Forum (EEF) has been described as a successful solid platform since its creation. It increasingly attracts guests from widely different countries, especially leaders of China, India, Malaysia, Mongolia, and Myanmar. The leaders of Vietnam, Kazakhstan, Laos, and Thailand have visited it in various capacities. The business segment of the forum has long gone far beyond the geographical boundaries of Eurasia. Its frequent unprecedented large number of guests includes businesspeople from South America, Africa, and the Middle East. That, however, it remains open for entrepreneurial contacts with everyone whose natural interests are primarily in the trade, economic, and social spheres. This cross-platform cooperation between the structures is developing, growing deeper and creating a new agenda. The most essential feature is that the platform is guided by the principles of equality, mutual benefit, and honest dialogue, which are entirely different from those of Western-oriented structures. 

The EEF, which opened on 1st-4th September, in Russia’s Far Eastern city of Vladivostok, has become a solid platform for open and constructive dialogue among business leaders, government officials, and members of the expert community. It has also become a unique venue for discussing the strategic development of the Russian Far East and the country as a whole, while fostering and strengthening potential partnerships with counterparts, particularly from the Asia-Pacific region, in food production, infrastructure, logistics, industry, energy, and many other sectors of the economy. While recognizing the huge untapped economic potential of the region, it is also understandable that the development of the Far East largely depends on human capital, entrepreneurial efforts, and the ability of regions to create the necessary conditions for realizing the practical expectations.

On 2nd September, as part of the business program, the “Towards a Common Future: Inclusion as a Development Resource for the Far East” discussion was held with a strong focus on how to create an equal opportunity environment, develop human capital, and engage diverse groups in economic and social life. The following day, the majority of the participants in the “Inspiring Investments: A Development Strategy for Growth and Scaling” session touched on funding mechanisms for creative projects, opportunities to enter foreign markets, and collaboration between businesses, investors, development institutions, and government agencies. The key point focused on the development of the creative economy and international cooperation with Asia-Pacific countries, industry investments, the export of intellectual property and creative products, the media’s role in the development and positioning of regions in the Far East, new content formats, and training personnel for the economy of the future.

As part of the discussions at the forum, Russia and the United States continued their business dialogue, headed by Robert Agee, president and CEO of the American Chamber of Commerce in Russia (AmCham Russia), and with the participation of US representatives. It was spearheaded by the Roscongress Foundation in Russia.  Anton Kobyakov, Adviser to the President of the Russian Federation, noted, however, that there is a strong appetite on both sides for direct professional engagement. What matters most is to sustain the momentum and possibly broaden the agenda to include bilateral entrepreneurial partnership. 

“There is the need to facilitate more networking to identify specific strategic areas for cooperation,” said Robert Agee, president and CEO of the American Chamber of Commerce in Russia, and unreservedly agreed to continue their work on developing business ties and prepare for the participation of American representatives in the Russian Federation.

With many Asian and Pacific participants, explored opportunities for developing small and medium-sized enterprises. This is becoming increasingly important amid structural changes in the economy, as businesses look for new avenues for growth. The EEF made it possible not only to exchange experience but also to find concrete solutions that will help entrepreneurs adapt to changing conditions and unlock new opportunities for growth.

Developing trade, strengthening of interstate ties, and the creation of a common space for interaction among Asia-Pacific countries have assumed a new trend with Russia. The argument was logically based on Russia’s historical experience of cooperation with East Asian countries. It was further underlined that Russia and the Asia-Pacific attract politicians and entrepreneurs from around the world. In these current geopolitical circumstances, Russia needs to seek out new opportunities for development, particularly from the Asia-Pacific region, and with reference to the emerging new multipolar world. At the heart of the forum program was the search for new sources of growth and resilience for SMEs amid structural changes in the economy, from raising productivity and adopting new technologies to managing risks and adapting business models. One section of the program focused on the role of automation and artificial intelligence, changes in business processes, employees’ readiness to work with new technologies, and ways of improving productivity. 

In addition to the above, a special session was devoted to analysis where experts outlined the key economic trends across the Asia-Pacific region. As monitored, this session was set out in the analytical review entitled “Asia Trends 2026: The AI Boom, Industrial Relocation, and Geopolitical Fragmentation,” prepared ahead of the opening of the Eastern Economic Forum on 1st September. The review clearly noted, among other things, that Asia accounts for around 60% of global GDP growth and is becoming the world’s new center of trade, industry, technology, finance, and military power. Within the region, however, economic growth is highly uneven, while technology and capital are concentrated in a small group of states, making consolidation difficult. The ASEAN countries, meanwhile, face competition from Chinese manufacturers while also coming under growing geopolitical pressure from Washington. More broadly, the Asia-Pacific region is more exposed than any other to the effects of the energy crisis and to climate risks such as a super El Niño. 

According to the International Monetary Fund, Asian GDP grew by 5% in 2025, significantly ahead of global growth of 3.5%. Within the region, however, countries face a range of specific challenges, from high labor costs and insufficient industrial capacity to balance-of-payments difficulties and currency instability. These factors are driving increasingly divergent development paths among Asian economies. The region’s advanced economies, such as Japan and South Korea, posted lower growth rates, at 1.2% and 1%, respectively, in 2025. Asia’s emerging economies grew by 5.5% overall over the same period, with performance ranging from a 2% contraction in GDP in Myanmar to an 8% surge in Vietnam. 

Countries with the strongest growth prospects are attracting investment, leaving others with fewer opportunities to draw in capital. According to the United Nations Conference on Trade and Development, developing countries in Asia attracted US$644 billion in foreign direct investment in 2025. That is around 40% of the global total and more than 70% of all investment in developing countries. Capital flows are unevenly distributed: eight of the ten largest recipients of foreign direct investment among developing countries are in Asia, and together they account for around 60% of all inflows to developing economies and more than 80% of inflows to the region. 

Capital is becoming increasingly concentrated not only in a small number of countries but also in a narrow range of sectors, particularly artificial intelligence, clean energy, semiconductors, and critical minerals. In the longer term, this could deepen inequality and worsen the position of countries without a strong presence in these fields. Asia is one of the principal beneficiaries of the global AI boom. The investment cycle associated with its development has driven up demand for semiconductors, memory, servers, network equipment, and related electronics. The region occupies a central position in the global supply chain for these products. Technology exports will remain a powerful engine of economic growth in Asia, although the benefits will be distributed unevenly depending on each country’s position in the value chain.

South-East Asia’s role as an industrial center is growing as production capacity relocates there from China, which is no longer a low-cost manufacturing base. Chinese companies have begun redirecting production to Vietnam and Indonesia in particular in order to mitigate the impact of US tariffs. At the same time, China has increased its exports of industrial components and capital goods, supplying the equipment and parts needed by manufacturing centers in other countries. Exports of intermediate goods, including memory chips, other semiconductors, and industrial components, rose by 9% in 2025. Part of this represented an indirect offset to reduced shipments to the United States, as components, particularly in electronics, were used by manufacturers in other countries to produce goods that were subsequently exported to the US. A fall of roughly US$15 billion in smartphone exports, for example, was matched by a comparable increase in shipments of components, notably to India. 

In many other cases, however, the growth in exports of components and equipment was not linked to replacing sales China had lost in the US. Instead, it supported the expansion of production in third markets, especially developing ones, reinforcing China’s role as a supplier of production inputs rather than an exporter of finished goods. The result is an integrated supply chain taking shape across the region, encompassing research and development and the manufacture of high-technology components in China, assembly and packaging in an ASEAN country such as Malaysia or Vietnam, and the subsequent shipment of products to markets within the region and beyond. 

Amid the fragmentation of the global economy and trade, the development of the Eurasian space calls for resilient regional supply chains and logistical connectivity between states. Russia’s Far Eastern Federal District can play a strategically important role here. Thanks to its location, the district can serve as a resource and logistics gateway within the transport corridors linking European Russia with Asia. For a long time, infrastructure constraints held back the expansion of ties between Russia and Asian states, but the situation has begun to change with the development of the Eastern Operating Domain, which comprises the Baikal–Amur Mainline and the Trans-Siberian Railway. 

A program to modernize the Eastern Operating Domain has been under way since 2013, aimed at eliminating bottlenecks on the railways of Siberia and the Far East. Over that period, its carrying capacity has increased by 84%, reaching 180 million tonnes in 2025. The modernization is expected to raise that figure to 210 million tonnes by the end of 2030 and 270 million tonnes by the end of 2032. The development of the rail network and port infrastructure will largely determine the prospects for Eurasia and for the Asia-Pacific region in particular, as the world’s economic, financial, and trade center shifts towards the region. 

Emerging trends are reshaping the world; South-South economic partnership is seemingly becoming both the political and economic architecture. Logically, developing collaboration with Asian partners, anchoring discussions on technological leadership, and making breakthroughs in scientific fields and adopting innovative technologies are increasingly reshaping the world. Today, the role of academic institutions is to build a solid scientific and technological foundation that addresses applied industrial challenges while enhancing business efficiency, eco-friendliness, and sustainability. It is only through this synergy between science and the real economic sectors that can bring true multifaceted sovereignty. In conclusion, Asia-Pacific and Russia have to create a new model of economic and business and trade relations in the Global South.

As monitored from official reports, Russia is creating practically a new model of development of the Far East with maximally comfortable conditions for enterprises, as well as legal innovations for the investment climate in the region. Therefore, potential Asia-Pacific investors have to work on new ideas and new strategies for developing trade, agro-processing, industry, and other economic sectors in the Far Eastern region. The Eastern Economic Forum was held from September 1 to 4 on the campus of the Far Eastern Federal University. This year’s theme: “The Far East: Development for the Benefit of People.” It was the 11th EEF and organized by the Roscongress Foundation.

WASHINGTON — Confronted by an intransigent Iranian government that has refused to back down in the face of a massive military campaign, President Trump appears to have settled on a dual-prong approach that combines economic pressure with the potential of a devastating escalation in force.

Having launched “Operation Economic Outcast” just last week to try to isolate Iran from its remaining global trade partners, the Trump administration also resumed strikes in recent days, prompting Iranian retaliation that has renewed concerns of an all-out regional war.

However, the combination of already intense sanctions on Iran and an off-and-on bombing campaign since the war began more than six months ago has not bowed the Iranian leadership and has left the administration struggling to find a way to wind down the conflict. Tehran has dug in its heels — to Trump’s frustration — as energy prices rise, the global economy roils and poll numbers on the administration’s handling of the war dip ahead of November’s midterm congressional elections.

Trump said Wednesday that he didn’t think the conflict would last “much longer,” but he again shrugged off suggestions that its unpopularity and high gasoline prices resulting from Iran’s chokehold on the Strait of Hormuz would affect the elections for Republicans.

“It doesn’t matter. And I’m not affected by the election,” he told reporters. “I’m not running. But my party is running, and I’m going to help my party. But I think my party respects the fact that we’re not allowing Iran to have a nuclear weapon.”

A regional diplomat briefed on the matter described the current impasse between Tehran and Washington as reflective of both countries’ domestic priorities: the midterm elections for Trump and Republicans and the internal crises within Iran.

Domestic issues are critical reasons why neither side is willing to blink first, said the diplomat, who spoke on condition of anonymity to discuss sensitive negotiations.

The diplomat said negotiations, including those between Iran and Oman or even Iran and the U.S., will not go anywhere without addressing the initial catalyst of war: Israel. And the diplomat was skeptical of the Trump administration’s new sanctions plan, saying the threats require more explanation than what the U.S. has provided so far.

The Trump administration’s economic isolation of Iran is off to a slow start

The administration’s new push for Iran’s economic isolation was announced with great fanfare last week and a dire warning for all remaining countries to cut off financial and trade ties with Iran or face U.S. retaliation — but the campaign so far has fallen flat.

Just one branch of an Egyptian bank in the United Arab Emirates has been targeted so far. For actual sanctions to bite, experts agree that they must apply to Iran’s main trading partners: mainly China but also India and Russia. But Trump is loath to target China especially as he is preparing to host President Xi Jinping later this month.

Trump also insists that the U.S. has control over the Strait of Hormuz, where one-fifth of the world’s oil transited before the war began. The strategic waterway has been a key pressure point for Iran, and reopening it fully has become one of the prime goals for the U.S. administration.

Ship traffic through the strait is well below pre-war levels due to the risk of attack if vessels don’t comply with an Iranian vetting regime near its coastline, which is in sharp contrast to the unhindered navigation before the war. There were 102 transits last week and 126 the week before, according to shipping data company Lloyd’s List Intelligence, compared with 130 or more per day before the war.

“As President Trump said, the strait is open and all mines have been cleared,” White House spokeswoman Anna Kelly said Thursday. “The naval blockade remains in full force and effect, and Operation Economic Outcast is underway to sever every remaining economic lifeline sustaining the regime.”

The White House has repeatedly touted the economic impact that the sanctions have had on Iran, citing its rampant inflation and the massive loss in the value of its currency. U.S. officials have described Iran’s financial system as “one big house of cards.”

Going forward, Secretary of State Marco Rubio said “the price” Iran will pay will be primarily economic, “but we reserve the right … to take military action when necessary — not just to protect ourselves but to prevent them from being able to threaten others as well.”

“They’re going to continue to feel the squeeze,” he told Fox News host Brian Kilmeade in an interview that aired Wednesday.

Treasury Secretary Scott Bessent this week likened Iran to a snake that has been decapitated but whose body is still writhing.

“We are burying the head of the Iranian snake,” he said Tuesday. “The snake doesn’t know it’s dead yet, but it will stop wiggling when the sun goes down. And so the Iranian regime — they are in demise, and they will figure it out.”

Combining military force and sanctions on Iran ‘is the only option,’ one analyst says

Complicating things for the U.S., Iran’s leadership has shown signs of divisions between moderates more open to a diplomatic solution and hardliners who want to press ahead with a more confrontational approach.

President Masoud Pezeshkian is one of the most prominent voices still calling for a negotiated solution. But the hardliners appear to have gained the upper hand, and Iran shows no sign of backing down. Tehran continues to lash out at U.S. interests and allies around the region in response to military strikes.

“This kind of a hybrid approach — the combination of military force, blockade and economic pressure — that is the only option that seems to be available to the United States at this moment,” said Hamidreza Azizi, consulting senior Iran analyst for the International Crisis Group.

Still, he said, “it’s been for a long time, but now maybe more than ever, a battle of endurance between the two sides.”

Amr Hamzawy, director of the Middle East program at the Carnegie Endowment for International Peace, pointed to two main reasons for the deteriorating situation.

“One, none of the two parties is satisfied with the outcome — meaning that the current situation does not serve U.S. interests well, and it does not serve Iranian interests well,” Hamzawy said.

The other reason is how leaders from both sides are perceived at home.

“The Trump administration is afraid of being portrayed in the U.S. as an administration that failed to end a military campaign successfully, and that’s going to impact the midterm elections,” he said. “And the Iranians, especially the Revolutionary Guard, are quite afraid of appearing as if they are submitting to U.S. sanctions with no actions on their side, which might hurt them domestically.”

Lee, Magdy and Amiri write for the Associated Press. Magdy reported from Cairo. AP writers Will Weissert in Washington and David McHugh in Frankfurt, Germany, contributed to this report.

Washington has recently stepped up efforts to economically pressure Tehran amid the deadlocked truce talks.

Washington plans to impose sanctions on another bank this week as it steps up its campaign to economically isolate Tehran amid the deadlocked truce talks, the US Treasury chief has said.

In an interview with The Associated Press news agency on Sunday, Treasury Secretary Scott Bessent declined to name the bank to be targeted by sanctions.

The announcement comes just days after Washington said it would cut off the United Arab Emirates’s operations of Basque Misr from the US financial system after accusing Egypt’s second-biggest bank of doing business with the Iranian government.

“This is going to be financial violence if we have to,” Bessent told AP on Sunday. “We are showing people that we know who you are, you know who you are, and this has got to stop.”

⁠In an interview with the Reuters news agency, Bessent said the next step may be cutting off an institution entirely from the dollar-based financial system.

“You’re going ⁠to see a lot ⁠more of these every week,” he said on Sunday, ahead of a Group of 20 finance leaders ⁠meeting in Asheville, North Carolina. “We’re starting with the banks, and we’re telling ⁠the banks it’s not OK ⁠to have Iranian money and to aid the regime.”

The US has stepped up efforts to economically pressure Tehran to submit to Washington’s demands, a campaign dubbed “Operation Economic Outcast”, amid the stalled truce talks between both parties.

Last week, the Treasury Department imposed new sanctions on nearly 60 individuals and entities that Washington accused of being part of networks helping Iran generate oil revenue, procure weapons and conduct cyber-operations.

Iran, however, has rejected the latest US sanctions, with Minister of Finance and Economic Affairs Ali Madanizadeh saying they will fail.

Violence in the conflict resumed on Sunday, the first time since late July, with Iran launching missiles at two US bases in Jordan following a US attack on Larak Island in southern Iran.

Cooperation against Iran

Bessent is preparing to host the meeting of the G20’s finance leaders, where he will huddle individually with his counterparts from the world’s major and developing economies to encourage cooperation against Iran.

The US Treasury chief also told AP that he would speak to his Chinese counterparts at the meeting and “all options are on the table” in terms of sanctioning Beijing for its continued trade with Tehran. 

But he rejected the idea that the US was reluctant to confront China, calling it “a completely false narrative that the media picked up on”.

He insisted that Beijing and Washington agreed on the need to reopen the Strait of Hormuz and prevent Iran from developing a nuclear weapon.

Russian Foreign Ministry spokesperson Maria Zakharova told a briefing held on August 20, 2026, that “a substantial package of intergovernmental documents and commercial contracts is planned to be signed during the Russia-Africa summit, scheduled for late October.” Given the “mutual interest in stepping up our trade and investment cooperation, we plan to focus the agenda of the upcoming summit meeting on economic matters,” she said.

There, the attendees can discuss in substance a wide range of matters, including boosting Russian-African ties in agriculture, healthcare, education, and scientific-technical and cultural cooperation. “We expect to sign a substantial package of interstate documents and commercial contracts during the event. Well, and we also note, of course, with satisfaction, our partners’ considerable interest in the forthcoming event. Many African capitals have already confirmed their attendance and declared their intention to send representative delegations to Moscow, including heads of state entities and businessmen, of course,” Zakharova explained.

“We have a huge potential in this sphere, which has not yet been fully realized, as everyone admits. Key priorities have also been determined: to cooperate on peaceful uses of nuclear power; to develop independent payment systems, food security, and digitalization, including the adoption of artificial intelligence,” Zakharova underlined.

It is time to face rising realities and the balance of investment power in this 21st century. Whether Russia colonized Africa or never colonized Africa, the most convincing and essential factor is Africa simply has to work with the world’s players. Africa should collaborate with potential foreign investors with adequate funds, in practical terms, ready to invest in its development as exemplified by China. And there is still a growing sense of analytical debates over Russia’s policy approach, though. Ultimately, at least three fundamental assumptions, or appropriately primary principles, can be described as follows:

*Russia’s forthcoming October 2026 The Russia-Africa summit is framed as a chance to consolidate dozens of prior agreements and shift toward concrete economic cooperation in trade, investment, nuclear energy, food security, digitalization, and independent payment systems, yet critics note that rhetoric and signed MoUs have so far produced limited tangible results on the ground.

*Despite historical Soviet-era goodwill and frequent high-level visits, Russia remains a marginal player in African infrastructure, industry, and agriculture compared with China, the EU, and the United States; many announced projects have stalled, financing instruments are weak, and younger Africans see little contemporary economic impact beyond anti-Western messaging.

*Experts and African partners urge Moscow to move beyond nostalgia for past assistance, deliver on existing pledges with real capital and project execution, leverage platforms such as the African Continental Free Trade Area (AfCFTA), and engage Africa’s large youth and middle-class markets if it wishes to convert political alignment into sustained, mutually beneficial economic partnership.

The African Continental Free Trade Area (AfCFTA) provides a unique and valuable platform for businesses to access an integrated African market of over 1.4 billion people. The growing middle class, estimated at 380 (twice the aggregate of Russia’s population), among other factors, constitutes huge market potential in Africa. The African continent, currently, has enormous potential as a huge market, which some experts often refer to as the last business market frontier. Nevertheless, Africa’s trade with the European Union stands at $400 billion, and with China, almost $300 billion. And based on military equipment and weapons and agricultural products such as ice cream, chicken meat, fertilizers, and grain exports, Russia quoted a bilateral trade figure as $27 billion in June 2026.

The world is, increasingly, becoming multipolar. Therefore, Africa’s strength has to be directed at continental development and entrepreneurship, not at building solidarity for geopolitical games. Many African countries are enacting economic reforms; demand is growing for high-quality, competitive products. Russian businesses are interested in this niche, but Russian operators are extremely slow. The ‘snail-pace approach’ reflects their inability to determine financial instruments for supporting trade with Africa and corporate investments in Africa.

There is some level of optimism for a change, though. Russia plans to hold the next Russia-Africa summit in late October 2026. And Sergey Lavrov, minister of foreign affairs of the Russian Federation, indicated in an explicit message mid-July that “in these difficult and crucial times, the strategic partnership with Africa has become a priority of Russia’s foreign policy. Russia highly appreciates the readiness of Africans to further step up economic cooperation.”

At a meeting of the ministry’s collegium, Lavrov strongly suggested the necessity of borrowing a chapter on policy approaches and methods adopted by China in Africa. In fact, Lavrov’s suggestion exposes the inability to play catch-up and, most significantly, Russia’s financial fragility. Lavrov also said, “It is in the interests of our peoples to work together to preserve and expand mutually beneficial trade and investment ties under these new conditions. It is important to facilitate the mutual access of Russian and African economic operators to each other’s markets and encourage their participation in large-scale infrastructure projects. The signed agreements and the results will be consolidated at the forthcoming Russia-Africa summit.”

During the past years, there have been several meetings of various bilateral intergovernmental commissions both in Moscow and in Africa. The first Sochi summit discussed broadly the priorities and further identified opportunities for collaboration. There were 92 agreements signed in Sochi, which totaled RUB 1.004 trillion (equivalent to $12.5 bn), and approximately 240 agreements during the African Leaders Summit held in St. Petersburg, according to official documents. It, however, requires understanding the specific tasks and emerging challenges. The current tasks should concretely focus on taking practical and collaborative actions leading to goal-driven results. Notwithstanding the lapses, Lavrov hopes “the signed agreements and the results will be consolidated at the forthcoming Russia-Africa summit.”

Accentuating the importance of multilateral cooperation between Russia and Africa, Advisor to the President of the Russian Federation Anton Kobyakov said, “The current situation in the world is such that we are witnesses to the formation of new centers of economic growth in Africa. Competition for African markets is growing, accordingly. There is no doubt that Russia’s non-commodity exporters will benefit from cooperating with Africa on manufacturing, technologies, finances, trade, and investment.”

Kobyakov pointed to modern Russia, which already has experience of successful cooperation with African countries under its belt, as ready to make an offer to the African continent that will secure a mutually beneficial partnership and the joint realization of decades of painstaking work carried out by several generations of Soviet and Russian people.

The Soviet Union was quite extensively engaged in Africa, comparatively. Historical documents show that after the Soviet collapse, there were approximately 380 mega-projects across Africa. In the early 1990s, Russia exited, closed a number of diplomatic offices, and abandoned all these, and now there are hardly any signs of Soviet-era infrastructure projects across Africa. And now post-Soviet relations are interestingly engulfed in extensive geopolitics; Russia has only engaged in trading anti-Western slogans on the continent, which also threatens the African Union’s steps to consolidate African unity. 

In addition, Russia has only been criticizing other foreign players during the past two decades without showing any of its own template model of building relationships directed at transforming Africa’s economy. Moreover, Russian officials have underestimated the fact that Russia’s overall economic engagement is largely staggering; various business agreements signed are still not fulfilled with many African countries. Its foreign policy goal is simply to sustain the passion for declarations, signing several MoUs and bilateral agreements with African countries. Grappling with reality, there are equally many investment challenges, including official bureaucracy and the governance system in Africa.

Despite this policy rhetoric and attractive summit outlines, Russia still plays very little role, particularly in Africa’s infrastructure, agriculture, and industry. Investing in agriculture to ensure food security and investing in industry to add value to raw materials in the continent. While, given its global status, it ought to be active in Africa with noticeable corporate investments, similar to policy models of Western Europe, the European Union, the United States, and China, it is all but absent, consistently engages in geopolitical symbolism and rhetoric, and plays a negligible role, according to Professor Gerrit Olivier at the Department of Political Sciences, University of Pretoria, and former South African Ambassador to the Russian Federation.

Now at the crossroads, it could be meandering and longer than expected to make the mark. If existing challenges, obstacles, and impediments are not addressed, Russia’s return journey could take another generation to reach its destination, Africa. If not at the crossroad, then possibly at the periphery of Africa. With the current rapidly changing geopolitical world, Russia has to redefine and reassess policy parameters and adopt a more strategic approach, working with absolute consistency within the principle of finding common solutions to Africa’s development expectations and consolidating its economic sovereignty.

*This is part of the forthcoming book: Putin’s African Dream: Emerging Challenges and Opportunities (Third e-handbook).

There is a report of a new ship attack in the Strait of Hormuz, highlighting the difficulty of ending hostilities with Iran. The strike came hours after the Trump administration on Monday unleashed the threat of harsh new sanctions to further isolate the Islamic Republic. Though details were sparse, and no deadlines were issued, the goal was to compel the Iranians to return to negotiations by inducing additional economic pain instead of through bombardment. Originally touting the announcement as an “economic D-Day” against Iran, Treasury Secretary Scott Bessent’s lack of firm timelines presented Monday doesn’t seem to match that initial rhetoric.

Monday evening, the United Kingdom Maritime Trade Operations center (UKMTO) said it “received a report of an incident 9NM northeast of Ash Shishah, Oman.”

“The Master of an oil tanker reports the vessel has been struck by an unknown projectile causing damage to the engine room and disabling the vessel,” UKMTO reported on X. “Crew are reported safe. Environmental impact is unknown at time of report. Vessels are advised to transit with caution and report any suspicious activity to UKMTO. Authorities are investigating.”

UKMTO didn’t assign blame, but it’s obviously extremely likely the attack was carried out by Iran.

Hours before Bessent’s sanctions announcement, the Houthi rebels of Yemen also attacked another Saudi ship in the northern Red Sea. These strikes are a stark reminder that the war launched on Iran by the U.S. and Israel on Feb. 28 is still sending kinetic shockwaves around the region and roiling the global economy.

At a press conference in Washington, Bessent formally announced the broad outlines of a new list of measures to cut Iran off from global trade. The move comes as the Iranian economy, which was reeling even before the war broke out, continues to suffer after months of war and an ongoing U.S. naval blockade of its ports.

“We are level-setting with every country to tell them our expectations. We know who they are. They know who they are,” Bessent told reporters. “So when the hammer of U.S. Treasury actions falls upon them, they will have no one to blame but themselves.”

Dubbed “Operation Economic Outcast,” the plan calls for every country to “be given a defined timeline to shut down its Iran-related business activity,” Axios noted. “If it fails to do so, the U.S. will impose secondary sanctions.”

As part of this effort, the Treasury Department “issued determinations against five critical sectors––digital assets, technology, gold, aviation, and shipping––that the Iranian regime uses to try to prop up its failing economy,” it explained. In addition, the Office of Foreign Assets Control (OFAC) “sanctioned nearly 60 entities, individuals, and vessels in multiple jurisdictions that enable the Iranian regime’s recklessness, including illicit nuclear and missile technology procurement, cyber operations, and oil‑revenue generation networks.”

OFAC also “suspended several general licenses that previously authorized certain remittance payments to Iran and Iranian access to the U.S. cultural and academic system,” Treasury noted. “OFAC issued additional guidance on the sanctions risks of bowing to Iranian demands related to shipping in the Strait of Hormuz.”

Asked by a reporter what actions the U.S. might take against China, Bessent hinted that Beijing is not exempt. China has been a major importer of Iranian oil and its banks have helped support Tehran’s economy.

“We want to make clear here today that no one is above the reach of U.S. sanctions,” Bessent responded. “That if they facilitate transactions and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted.”

BIG: Bessent on China and Iran:

We want to make clear here today that no one is above the reach of U.S. sanctions.

That if they facilitate transactions and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted. pic.twitter.com/hVuFLlgaZa

— Clash Report (@clashreport) August 24, 2026

Bessent did not offer any further specifics. He was equally vague about any timelines for this effort.

“We are giving everyone the opportunity to remedy bad behavior,” Bessent told reporters. “Why would I want to blow up the global financial system?”

For their part, the Iranians dismissed Bessent’s plan and promised their own harsh response to the new sanctions.

“Americans know that no one buys their bombast; the United States is not in an economic position to further restrict its relations with other countries,” Mohammad Bagher Ghalibaf, speaker of the Iranian parliament, stated on X. “Iran’s trading partners, both in the media and through messages sent to us, have made it clear that they don’t take these statements into account anywhere.”

آمریکایی‌ها می‌دانند که کسی گُنده‌لافی‌های آنها را باور نمی‌کند؛ آمریکا از لحاظ اقتصادی در شرایطی نیست که بخواهد روابط خود با دیگر کشورها را محدودتر از این کند.
شرکای تجاری ایران، هم در رسانه‌ها و هم با ارسال پیام‌ به ما اعلام کرده‌اند که این اظهارات را به هیچ جا حساب نمی‌کنند.

— محمدباقر قالیباف | MB Ghalibaf (@mb_ghalibaf) August 24, 2026

“Any escalation of this situation will undoubtedly bring about consequences,” Iran’s Foreign Ministry spokesperson Esmail Baghaei said. “Our hands are not tied.”

Baghaei did not offer specifics, but Iran still possesses missiles and drones that it can use to strike U.S. and allied interests in the region. In addition, Tehran still maintains a large degree of control over shipping in the Strait of Hormuz. Even the threat of additional attacks could affect the flow of oil through the strategic chokepoint.

In addition, on Saturday, Mohsen Rezaei, the head of Iran’s national security council, threatened to attack U.S. businesses, The Telegraph reported. He also warned allies of the U.S. that they would be considered enemies, and their interests harmed if they joined Trump’s economic warfare. Cyberattacks on U.S. water systems that officials suspect may be linked to Iran-backed hackers have been reported in at least a dozen states, CBS News reported earlier this month. Iranian-linked hackers are also suspected of forcing a small British power generator offline for four days last month. Aside from that, there are still many U.S. business interests in the Middle East, and especially energy firms, with major facilities right across the Persian Gulf.

While the U.S. and Iran trade threats, the Houthis carried out a fresh strike on Saudi shipping as we noted earlier in this piece.

The Iranian-backed group claimed it hit the oil tanker Amzan off the coast of Yanbu. That’s the kingdom’s key port on the northern Red Sea, about 600 miles north of Houthi territory.

🔺Ansarallah says it struck the Saudi oil tanker Amzan with a ballistic missile off Yanbu in the northern Red Sea, declaring the attack part of its maritime blockade on Saudi Arabia and its “blockade for blockade” campaign.

Military spokesperson Yahya Saree said the missile hit… pic.twitter.com/PS6vna9XA2

— Drop Site (@DropSiteNews) August 24, 2026

Both the UKMTO and the Ambrey maritime security company confirmed the attack, which took place about 64 nm west of Yanbu, Ambrey noted.

After the vessel was hit, “the Egyptian Navy was reported to have responded and was transiting to the area of interest to conduct a rescue operation,” Ambrey stated. “At the time of the attack, the vessel was not transmitting its AIS signal. Its previous AIS transmission was recorded at 02:33 UTC on 8 August.”

The ship attack was the latest Houthi strike against the Saudis. The Yemen-based group had already struck Saudi ships in the southern part of that body of water and refineries along the northern portion after imposing a blockade on the Bab al-Mandeb Strait (BAM), leading several oil tankers in the Red Sea to avoid that route in favor of the Suez Canal. The expansion of the Houthi campaign against Saudi shipping began earlier this month with an attack off the port of Yanbu on the NCC Wafa, a Saudi oil tanker.

Though both the Strait of Hormuz and the BAM remain under pressure, ship traffic ticked upwards in both chokepoints last week, according to the Kpler global trade intelligence firm. Those numbers alone, however, don’t paint the full picture, Kpler cautioned.

“Traffic edged higher through the Strait of Hormuz and Bab el-Mandeb last week, but headline volumes obscure contrasting risk signals,” Kpler cautioned on X. “Hormuz crossings rose 2.5% to 121, while laden transits fell 27% and sanctioned crossings increased from 9 to 16. Use of Iran’s unilateral routing scheme also climbed to 46.3% of crossings.”

“Bab el-Mandeb traffic rose 3.1% to 269 crossings,” the firm added. “Dark transits declined, but sanctioned and shadow fleet crossings remained broadly flat at 74 combined. The data suggest commercial substance is weakening at Hormuz even as overall traffic holds up, while Bab el-Mandeb remains resilient despite an active threat environment.”

Hormuz traffic masks rising risk

Traffic edged higher through the Strait of Hormuz and Bab el-Mandeb last week, but headline volumes obscure contrasting risk signals.
Hormuz crossings rose 2.5% to 121, while laden transits fell 27% and sanctioned crossings increased from 9 to… pic.twitter.com/iHKsCigEJL

— Kpler (@Kpler) August 24, 2026

While the U.S. is threatening further moves to hurt the Iranian economy, doing so has inherent risks. For decades, Iran has weathered sanctions and isolation and yet the regime has persevered. It withstood mass protests against it earlier this year with bloody crackdowns that played a big role in moving U.S. President Donald Trump to take military action.

Iran continues to wield the cudgel of threatening the U.S. by resuming attacks on its assets in the region as well as against allies. In July, Tehran took rare initiative with a surprise attack on U.S. forces in Jordan, a contrast to its previous pattern of responding to strikes.

For the U.S., continued conflict risks further expenditure of its stocks of high-end offensive and defensive weapons and strain on its troops and equipment. It would also add new economic pressure. To help mitigate gasoline prices that shot up during the war, the Trump administration began releasing a large amount of oil from the strategic petroleum reserve. That move set off a cascade of downstream effects.

“Stocks of crude ​oil in the ‌U.S. Strategic Petroleum Reserve (SPR) ​fell ​by about 3.7 million ⁠barrels ​to 289.7 million ​barrels last week, the lowest ​level since ​November 1982,” Reuters reported, citing data from the Department of Energy. “The ​drawdowns ​are ⁠part of a ​U.S. agreement ​to ⁠release 172 million barrels ⁠from ​the ​facility.”

Barchart, the global market data and technology firm, offered a stark assessment of the state of the SPR.

“The U.S. has just 41 days of crude oil inventory left, the lowest level in half a century,” Barchart noted on X.

While that doesn’t mean gas pumps in the U.S. are about to shut down, the alarm bells are ringing.

Earlier this month, the president said his new strategy was to be “low-keying it” in Iran, a suggestion wants to avoid further major military action. However, in addition to global and domestic economic pressure, there are other factors weighing on Trump as he decides what to do next with regard to Iran.

The war is unpopular and the midterm elections are fast approaching. The White House and Republican leadership remain keenly aware that the conflict dragging on until November won’t help the party’s bid to hold onto control of both the Senate and the House.

We will have to see if the Treasury’s plan is actually enacted and what Iran’s response will be. As it sits now, the administration is clearly hoping the threat of such economic isolation will press them to the negotiating table, but Iran has shown no signs yet that it will.

Contact the author: howard@twz.com 

US President Donald Trump’s administration has said it aims to sever “every” economic lifeline sustaining Iran in what officials have warned will be the toughest sanctions campaign ever seen.

The threat, if followed through, would mean putting China, Iran’s biggest trade partner, squarely in the crosshairs of US sanctions.

That would be a risky proposition for Washington due to the likelihood of severe blowback from Beijing – so much so that some analysts doubt that the Trump administration’s measures, set to be announced on Monday, will match its rhetoric in scope or severity.

While the Trump administration has yet to provide details about what it has dubbed “economic D-Day”, US officials have made it clear that Iran’s trade partners are in their sights.

In an op-ed in the Financial Times on Sunday, US Treasury Secretary Scott Bessent warned that countries fearful of breaking ties with Iran should not “discount the cost of testing Washington”.

“The president has created the conditions to leverage every agency, every authority and action many assumed we would never summon,” said Bessent, who is scheduled to unveil the sanctions in a news conference at 17:00 GMT.

Brett Erickson, a sanctions expert and managing principal of Obsidian Risk Advisors, said the Trump administration’s willingness to target China will be an indication of its resolve to mount a sustained economic offensive against Tehran.

“That is not a relationship you degrade lightly. If the United States decides to really bring China into the ring, it will be a serious indication that the United States plans to wage this economic war for a prolonged period of time,” Erickson told Al Jazeera.

“If they do not, it will be a tacit admission from the Trump administration that they do not believe economic hardship can seriously bring about a change in the Iranian position,” Erickson said.

Any US pressure campaign that excludes China would be necessarily limited in scope given the outsized importance of Beijing and Tehran’s economic ties.

China reported $9.96bn in two-way trade with Iran in 2025, a figure that does not include some $31.2bn in Iranian oil shipments, according to the US-China Economic and Security Review Commission.

China’s purchases of Iranian oil have been a particularly crucial lifeline for Tehran, accounting for about 90 percent of its oil sales, according to the US Treasury Department.

Until now, the Trump administration’s Iran sanctions regime has targeted only a handful of relatively minor China-based entities.

In April, the Trump administration sanctioned Hengli Petrochemical (Dalian) Refinery, one of China’s largest independent refineries, commonly known as “teapots”, over its alleged purchases of Iranian oil.

The Trump administration also imposed sanctions on four firms in Hong Kong in May, followed by measures in August targeting six China and Hong Kong-based shipping lines.

Washington has so far left Chinese financial institutions, widely viewed as a key node in Iran’s oil trade, untouched.

“Cutting off Chinese economic ties will be key to the success of any attempt to increase pressure on Iran. However, the United States won’t do it,” Jennifer Kavanagh, a senior fellow at Defense Priorities, a Washington-based foreign policy think tank, told Al Jazeera.

“If it does, China will retaliate and has the leverage to impose costs on the US,” Kavanagh said.

China has vigorously opposed US sanctions against Iran, arguing that economic pressure will not resolve the nearly six-month-long war.

In a statement on Sunday, China’s Ministry of Foreign Affairs said that Beijing remained “committed to promoting peace talks” and willing to “continue making efforts for the early restoration of peace and tranquility in the region”.

Iran, for its part, has threatened to retaliate against countries that support the US measures.

Mohsen Rezaei, the secretary of Iran’s Supreme National Security Council, warned on Saturday that any country that participated in sanctions would be considered an “enemy” and that “not a drop” of oil would leave the Gulf if Iran’s neighbours joined the US campaign.

Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin University of China, said Beijing would inevitably take countermeasures in response to any US sanctions and their intensity would depend on the “severity of US actions”.

“China maintains its desire to avoid conflict, but its bottom line cannot be crossed,” Wang told Al Jazeera.

For Trump, invoking Beijing’s ire would risk not only economic retaliation, but also unravelling efforts to stabilise US-China relations only weeks before the US president is due to host Chinese leader Xi Jinping at the White House.

Trump’s scheduled summit with Xi on September 24 would be their second face-to-face meeting aimed at lowering the temperature in US-China relations since Washington launched its war on Iran in late February, following Trump’s visit to Beijing in May.

Zichen Wang, deputy secretary-general of the Center for China and Globalization (CCG) think tank in Beijing, said neither Beijing nor Washington were likely to want Iran to define the upcoming summit.

“Unless the US measures become very broad or directly target major Chinese interests, both sides are likely to try to keep this dispute from overwhelming the wider agenda,” Wang told Al Jazeera.

“That said, Chinese restraint should not be read as an absence of response,” Wang said.

“Beijing has often avoided immediate rhetorical escalation, but when unilateral US actions have materially affected Chinese companies or other Chinese interests, it has shown a growing willingness to answer with practical countermeasures.”

While the Trump administration could potentially make it more challenging and expensive for China to continue its economic support of Iran, it is unlikely to be able to stop Beijing outright if it is determined to maintain ties, said Erickson of Obsidian Risk Advisors.

“US sanctions can absolutely force companies to de-risk in order to avoid exposure, but there will always be an entity willing to fill this role,” Erickson said, adding that Xi is unlikely to “merely stand by while Trump flexes the powers of American economic statecraft without flexing Beijing’s own in return”.

Though US officials have stated their intention to “collapse” Iran’s government with ramped-up sanctions, Erickson expressed doubt that the Trump administration will be able to achieve its war goals through economic pressure alone.

“Unless the Trump administration is willing to burn serious bridges and employ all remaining levers of economic warfare simultaneously, there is no reasonable assertion that can be made that it will be able to produce the victory that kinetic warfare could not,” he said.

Published on
24/08/2026 – 11:00 GMT+2

The US is ramping up its economic pressure on Iran after Treasury Secretary Scott Bessent declared the start of an “economic D-Day”.

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According to Bessent, this represents “the single greatest financial offensive ever marshalled against an adversary.” He set out the position in a post on X late on Sunday and in a Financial Times opinion article published the same day.

Bessent stated that US President Donald Trump’s military campaign had “significantly dismantled Iran’s military capabilities and weakened its nuclear programme”. He added that the administration is now “entering the endgame” and that the economic measures begin at dawn.

The objective, according to the US Treasury Secretary, is to “sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone”.

Bessent cautioned countries that continue to buy or transport Iranian petroleum, facilitate financial flows through exchange houses and free trade zones, handle flights, maintain ship registries or enable seaborne fuel transfers, that any remaining links would accelerate their own isolation.

The comments follow remarks by US President Donald Trump last week. At the time, Trump announced in a Truth Social post “the most crushing economic operation ever taken agaisnt any country!”

Despite both declarations, specific measures have not yet been set out.

According to Bessent’s outline, the package could centre on secondary sanctions against nations and entities that keep purchasing Iranian oil, process its finances, operate related banks or support shipping and other commercial channels, layered on top of the existing naval blockade.

Bessent is scheduled to hold a press conference at 7 PM CET on Monday to announce the concrete steps.

Market reaction

Oil prices are lower on Monday morning even as the rhetoric intensifies.

At the time of writing, Brent crude, the international standard, is trading at around $91.5 which is 2% lower than Friday’s close while West Texas Intermediate stands at roughly $86.2, about 1.5% lower than last week’s close.

The fall may stem from profit-taking after recent gains and from reports of a temporary rise in tanker movements through the Strait of Hormuz.

According to shipping information cited by Axios, around 40 tankers transited the southern channel on Friday night, moving roughly 16 million barrels of oil, higher than the 15-20 vessels recorded on preceding nights.

Overall volumes through the waterway remain well below pre-conflict levels.

On the other hand, US futures are also in the red ahead of market open while European stocks are trading flat.

Iran has threatened to retaliate against any country that joins the United States’ “economic war” against it, as diplomatic efforts to end the months-long war have stalled and shipping through the Strait of Hormuz has drastically decreased.

The warning from Iran’s top security official on Saturday came as the US plans to announce new sanctions on Monday that could further strain the struggling Iranian economy.

So, how can Tehran retaliate?

Here’s what we know:

What has Iran said?

On Saturday, Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, told the IRIB state broadcaster that Iran was appealing to all countries around the world, including its neighbours, not to join the US’s “economic war”.

“Any country that takes part in imposing economic restrictions on us will be regarded as an enemy,” he said, warning of “seismic” retaliation.

Rezaei also warned Iran’s neighbours that if they participated in Trump’s economic warfare, “not even a drop of oil” would leave the Gulf region, including by alternative export routes away from the Hormuz chokepoint through which a fifth of global oil and gas exports pass in peacetime.

Iran has attacked US military installations and civilian locations since the war began on February 28 , on the pretext that Tehran was on the verge of having nuclear bombs. That claim was debunked by the US intelligence agency, as well as the UN’s IAEA nuclear watchdog.

The US operates military facilities in more than a dozen locations across the Middle East and North Africa, including in Gulf nations, such as Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE. Thousands of US soldiers are also stationed across the region, including in Jordan.

Rezaei’s remarks came days after US President Donald Trump announced that his government would undertake the “most crushing economic operation” yet against Iran. He also pledged “tremendous economic consequences” for any country that gives Iran “any type of lifeline”.

The US Treasury Secretary, Scott Bessent, echoed his threats the following day, saying, “You’re either with us or against us”. He also urged cooperation from China, which buys more than 80 percent of Iran’s oil shipments.

On Sunday, Iran’s President Masoud Pezeshkian said: Iran is “in a full-scale economic, military and security war” with the US. He said Washington falsely predicted before the war that it would fall amid US aggression and become like Venezuela.

“The enemy had assessed that if Iran falls, it will become Venezuela,” he said in a televised speech.

“Not only did it not happen, but it became a power that amazed the world with its resistance, solidarity and cohesion.”

How can Iran retaliate?

Rezaei described Iran’s strategy as a three-stage sequence, starting with talks with countries cooperating with the US to de-escalate tensions.

“Of course, we will first negotiate with them. We will hold talks and tell them to step aside and distance themselves from the United States.”

“But if they do not act, we will strike. We will target that country’s interests,” he added.

Rezaei’s warning that alternative export routes outside Hormuz could be targeted, probably points to the Bab al-Mandeb Strait gateway to the Red Sea. Saudi Arabia has used it to export its oil following the blockade of Hormuz. Tehran imposed a blockade on Hormuz in response to the US war and has since used it as leverage in negotiations with Washington to end the war. The US has put Iranian ports under a naval blockade, impacting Tehran’s international trade.

Hamidreza Azizi, a researcher on Iran at the Clingendael Institute, said in a post on X on Saturday: “Tehran appears to be trying to establish deterrence at an earlier stage, by signalling that even preparations for an attack could trigger an Iranian response.”

Azizi said two elements in the new “offensive doctrine” are emerging: preemption, which is aimed at preventing a perceived threat from materialising; and disproportionate retaliation, which is aimed at raising the cost of any attack that does occur.

Iran’s warning to Gulf states joining Trump’s economic war is “essentially an ultimatum” to the Gulf states, he said, adding that Iran’s military-security establishment “is increasingly preparing for another round of escalation”.

Will Iran’s neighbours join the US in its economic warfare?

Gulf countries, which are Iran’s neighbours and also US allies, have increasingly been finding themselves caught in the middle of the war. So it is unclear if they will join Washington in economically threatening Iran further.

Iran’s attacks on Gulf nations have impacted their economies, which use Hormuz for most of their exports, including oil and gas.

While Gulf nations have condemned Iranian attacks on their territories, analysts say Gulf states closely aligned with Washington recognise that a functioning political relationship with Iran is necessary due to its close proximity.

The UAE restored diplomatic relations with Iran in 2022 but imposed a trade embargo last week after accusing Tehran of a missile attack. Iran denies responsibility.

Saudi Arabia and Iran agreed to normalise ties in 2023 under a deal brokered by China, both likely a calculation that engagement with Iran was safer than permanent confrontation.

While the Iranian attacks on Gulf states have tested this idea, they have not necessarily shattered it.

“Ultimately, Gulf countries can’t change geography. They have to live and work alongside Iran,” Simon Mabon, a professor of international relations at Lancaster University told Al Jazeera in an interview last month. “They don’t want the instability that would come from the fall of the Islamic Republic. I think some Gulf states have pushed for harder strikes – not to precipitate its collapse, but to weaken the more hardline elements of the IRGC.”

Also last month, Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, told Al Jazeera that confidence in diplomacy to end the crisis remains low but, at the same time, no nation in the region “can afford another long war”.

As a result, that “will keep them away from a completely uncontrolled level of escalation”, and depleted global oil inventories will make a prolonged confrontation between the US and Iran unattractive.

“All inventories have not been able to be replenished” during the ceasefire, Parsi added. “We are at a much lower level globally.”

What we know about international sanctions against Iran over previous decades?

Since 1979, Iran has faced sanctions from the US and other nations in the West. The United Nations has also imposed sanctions on Tehran.

The US first imposed sanctions after the 1979 Islamic Revolution that toppled the pro-Western ruler Reza Shah Pahlavi. Washington said that was in response to Iranian students taking Americans hostage at the US embassy in Tehran.

Washington also halted oil imports from Iran and froze $12bn in Iranian assets following the revolution. Iranian products were banned from import into the US, apart from small gifts, informational material, foodstuffs and some carpets.

In 1995, President Bill Clinton issued executive orders preventing US companies from investing in Iranian oil and gas and trading with Iran. He banned US trade with Iran and investment. A year later, the US Congress passed a law requiring the US government to impose sanctions on foreign firms investing more than $20m a year in Iran’s energy sector.

Then in December 2006, the United Nations Security Council, whose members include China, Russia, the UK and France, imposed sanctions on Iran’s trade in nuclear-energy-related materials and technology and froze the assets of individuals and companies involved in related activities.

The sanctions were mainly an effort to curtail Iran’s growing nuclear capacity, but while programmes to enrich uranium were stopped in 2002, they restarted in late 2005. In subsequent years, the UN toughened the sanctions and imposed more. The European Union also followed suit.

In 2015, Iran signed a nuclear deal – the Joint Comprehensive Plan of Action (JCPOA) – with the US, EU, China, France, Germany, Russia and the United Kingdom. The deal put a cap on Iran’s nuclear programme in return for the complete lifting of sanctions.

However, in 2018, during his first term, Trump announced the US withdrawal from the nuclear treaty and reimposed all sanctions on Iran that were lifted under the treaty as part of his “maximum pressure” campaign against Tehran.

In 2019, the Trump administration designated Iran’s Islamic Revolutionary Guard Corps (IRGC) a ‘Foreign Terrorist Organisation’. Additionally, he imposed sanctions targeting petrochemicals, metals (steel, aluminium, copper) and senior Iranian officials.

During Trump’s first term, Qassem Soleimani, the head of the IRGC’s elite Quds Force, was assassinated in a drone strike in Baghdad in 2020. The US also imposed additional sanctions on Iran.

The Biden administration, in power from 2021 to 2025, kept in place most US sanctions.

Last September, UN sanctions were reimposed due to Iran’s nuclear programme when the UNSC voted against permanently lifting economic sanctions.

Iran security chief Rezaei says any state joining US would be considered an enemy and Tehran would target their interests in retaliation.

The warning comes as US President Donald Trump threatens to isolate Iran economically, to weaken its government.

Iran has threatened to treat nearby countries as enemies and target their interests if they join a United States campaign to cripple its economy.

Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, issued the warning in a Saturday interview with state broadcaster IRIB.

“We’re telling all nearby countries not to join the US economic war. Otherwise, we will consider them as enemies,” Rezaei told IRIB.

His remarks come on the heels of escalating economic threats from the administration of US President Donald Trump.

On Wednesday, Trump announced his government would undertake the “most crushing economic operation” yet against Iran, as part of ongoing hostilities between the two countries.

The US and Israel have been locked in a war with Iran since February 28, when the two allies launched an initial volley of attacks against Tehran.

In addition to threatening Iran’s economy this week, Trump pledged “tremendous economic consequences” for any country that gives Iran “any type of lifeline”.

His Treasury secretary, Scott Bessent, echoed his threats the following day, saying, “You’re either with us or against us.”

In Saturday’s interview, Rezaei described Iran’s regional strategy as a three-stage sequence, which would start with efforts to de-escalate tensions with neighbouring countries.

“First we negotiate. Then, we try to separate them from America with pleasant language, because we are not really looking to expand the war,” he said.

Any countries that continue to side with the US would then be given time to reconsider, he said. “But in the third stage, we will definitely act.”

While the US has not stopped its military operations against Iran, Rezaei suggested that the Trump administration was betting that economic pressure would fracture Iranian society, forcing the war to come to an end.

“They hope that, if possible, they can break our unity with economic pressure and a group of protesters will take to the streets, and in a way, they will come to the aid of American F-35s,” he said, referring to a kind of military aircraft.

Negotiations to end the conflict have stalled in recent months, following the failure of a June 17 memorandum of understanding (MoU) that called for an “immediate and permanent termination of military operations”.

Control over the Strait of Hormuz, a major shipping lane off the coast of Iran, has become an enduring sticking point between the US and Iran.

Iran quickly moved to shut down traffic through the strait early in the war, sending the price of goods like oil and fertiliser skyrocketing.

Countries in the Middle East that were previously reliant on the strait for exports have started to pursue substitute trade routes.

But Rezaei warned that Iran would target those alternative oil-shipping routes out of the Gulf if regional states took part in the US’s plans of economic warfare.

Iran’s Ministry of Foreign Affairs on Saturday also decried the incoming US measures as an assertion of “extraterritorial sovereignty” over United Nations member states.

Tehran has also reportedly considered widening its target list beyond the Middle East, with media outlets reporting it could strike US allies in Europe who have supported Trump’s operations.

NEW YORK — Nearing the six-month mark of the Iran war and facing diminishing stockpiles of key weapons, the Trump administration is touting a crushing financial campaign against Tehran, promising an “economic D-Day” against a country that has withstood nearly five decades of punishing American sanctions.

With sparse details, President Trump announced this week that the U.S. would be imposing an “unprecedented” level of economic warfare and isolation on Iran, aiming to force its leadership to cave to demands to end its nuclear program and fully reopen the crucial Strait of Hormuz to oil and natural gas tankers.

It reflects the dire reality Trump faces with an increasingly unpopular war he can’t seem to end just months before pivotal midterm elections that will decide whether his Republican Party keeps control of Congress. Whether out of desperation or strategy, the president is refocusing America’s might on bringing Iran to its knees through an accelerated sanctions campaign against one of the most economically penalized countries in the world.

In response to the threat, Iranian Foreign Minister Abbas Araghchi posted Friday on X the history of U.S. sanctions against Iran, saying, “We have seen this movie before. Same bull. Different bullies.”

The immediate reaction from Iran hawks has been praise and a call for patience as it plays out, while other analysts warn that Trump is refusing to learn the lessons of his predecessors.

In an interview Thursday on CNBC, Treasury Secretary Scott Bessent offered a small glimpse of what may be ahead, threatening secondary sanctions on nations and companies that conduct business with Iran.

He did not reveal who would be targeted as part of this next phase of the administration’s Operation Economic Fury, which earlier had focused on entities and people who buy oil from or bank with Iran. China and India, however, are major buyers of Iranian oil.

“If you insist on doing business with them, then the U.S. Treasury and U.S. government will put its full might and force against you,” Bessent said. “It’s time for our allies and the rest of the world to make a decision.”

Some experts see ‘uncharted waters’ that could force Iran’s hand

Despite decades of U.S. sanctions against Iran, the Trump administration is arguing that it’s only a matter of time and that striking the right economic target would get Tehran to its breaking point.

Richard Goldberg, who coordinated efforts to put diplomatic pressure on Iran in Trump’s first term, said the consequences of U.S. strikes on Iran’s nuclear sites last year, the war this year and the American naval blockade on Iranian ports have created the perfect storm for capitulation — one that didn’t previously exist.

“I think we’re watching a strategy, whether it takes a short time or a long time, that is very much about fundamentally changing the future of the world by seeing the end of this regime,” said Goldberg, who is now at the hawkish Washington think tank Foundation for Defense of Democracies, or FDD.

“I caution everyone — including myself, who has worked on sanctions, who’s worked on financial warfare — to have the humility to admit that we are in uncharted waters,” he said.

He said the decision this week by the United Arab Emirates — once one of Tehran’s most important trading partners — to suspend trade with Iran over an alleged missile attack will only further isolate the government.

Beyond trade in domestically produced goods, the Emiratis had helped the country absorb some of the shocks caused by sanctions through its re-export hub.

Targeting allies and partners comes at a price

With nearly all of Iran’s energy, financial and transportation sectors already covered by U.S. sanctions, Trump’s aim appears to be to apply secondary sanctions on countries, including allies and partners, that have not cut all ties with Iran to starve the country of any remaining income it may still be receiving.

In many ways, it is a redux of Trump’s first-term maximum-pressure campaign, which he has ramped up during his second term to include military action.

But as Trump and his allies discovered during his first administration, it can be difficult to enforce secondary sanctions without harming U.S. interests and provoking reciprocal measures. There were numerous instances of the administration granting sanctions waivers to countries, particularly those that rely on Iranian oil for their energy needs.

“Trump’s strategy now rests on targeting Tehran directly by impeding its touch points and access to the formal financial system and international economy,” said Behnam Ben Taleblu, senior director of the FDD’s Iran program. “This will require making the Iran issue more important in U.S. bilateral relations with countries in Europe and Asia.”

Iran doesn’t see an ‘open door’ at the end of the sanctions campaign

Iranian officials and analysts have accused the Republican president of flip-flopping with his latest pivot to economic pressure against Tehran. Trump has long derided past leaders who used sanctions to limit Iran’s ability to pay for its military and nuclear development.

In a post last week on X, Esmail Baghaei, a spokesman for Iran’s Foreign Ministry, wrote that Washington’s pattern of retreating to sanctions when it doesn’t want to pursue diplomacy has proven to be futile.

“Iran has demonstrated over decades that it will not be strangled by these exhausted refrains,” he said. “The real risk is that American politicians, clinging to this bad habit, will instead strangle their own remaining chances of a less humiliating exit from a crisis of their own making.”

Ali Vaez, Iran director at the International Crisis Group, said the Trump administration’s decision to take its own maximum-pressure policy to new heights with military action seems to ignore years of U.S. foreign-policy lessons that show Iran does not respond well to pressure.

If anything, he says, the latest economic campaign has only “hardened Iran’s position.”

“I think (Trump’s) blind spot is the fact that the only thing that the Iranian regime views as more dangerous than suffering from U.S. sanctions is surrendering to U.S. terms,” Vaez said.

Plus, the past year of start-stop diplomacy has only worsened the already fragile dynamic between the longtime adversaries, Vaez says, adding that Iranian officials’ lack of trust in Trump and his mediators has created an untenable foundation.

“They believe that even if they capitulate to U.S. terms under economic duress, Trump would move the goalposts and ask for more,” he said. “And this is really the fundamental problem: Pressure without an open door is an exercise in futility.”

Amiri writes for the Associated Press. AP writers Matthew Lee and Fatima Hussein in Washington contributed to this report.

Aug. 19 (UPI) — President Donald Trump declared “economic warfare” against Iran on Wednesday night amid stalled diplomatic efforts to end the war.

Few specifics were offered about what this apparent intensification of Trump’s maximum pressure campaign would look like, but the president said it would be “the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY!”

“This will be Economic Warfare and Isolation on an unprecedented scale,” Trump said in his social media statement.

Financial institutions, businesses, airports and government entities accused of providing “any type of lifeline to Iran” will face what Trump called “TREMENDOUS Economic Consequences,” though he did not elaborate further.

“Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies — It all needs to stop NOW,” he said. “You know who you are. This will be an ECONOMIC D-DAY.”

To enforce the plan, Trump called on all U.S. allies to work with Washington to isolate Iran.

“These maniacs are on the ropes, and these HISTORIC MEASURES will cripple them and their ability to project terror worldwide,” he said.

The announcement came hours after Trump told reporters at the White House that there are more sanctions the United States could impose on Iran.

“Well, we have things that we could sanction,” he said. “We have very draconian sanctions and we’ll see what happens.”

Earlier Wednesday, Trump also said formal negotiations with Iran could restart “at some point,” while suggesting there was no urgency to resume talks.

“Right now, I think the situation is so good, but maybe at some point,” he said.

Trump has long relied on economic pressure as a means to coerce Iran. During his first term, after unilaterally withdrawing the United States from an Obama-era multinational accord aimed at preventing Iran from obtaining a nuclear weapon, Trump launched his maximum pressure campaign of sanctions and other punitive measures against Tehran, failing in its objective to force Iran back to the negotiating table on a new deal. Instead, Iran began gradually reducing its compliance with the nuclear accord.

Trump reinstated that maximum pressure campaign after returning to the White House last year. The Treasury has since folded its sanctions efforts into a campaign it calls Economic Fury, complementing Operation Epic Fury, the U.S. military campaign that began Feb. 28 and ended May 5, though the broader war continues.

Trump has been seeking a phased end to the war, but negotiations have stalled over competing demands concerning the Strait of Hormuz. The United States is seeking to restore freedom of navigation through the important energy route, while Iran is seeking to retain the leverage it gained by restricting passage through the strait.

Serbia and Ukraine have agreed to deepen economic cooperation, with both sides pledging to finalise a long-stalled free trade agreement by the end of the year as Serbian President Aleksandar Vucic hosted his Ukrainian counterpart, Volodymyr Zelenskyy, in Belgrade.

The commitment came on the final day of a two-day visit that concluded on Saturday, Zelenskyy’s first to Serbia since taking office in 2019. The two leaders have met several times previously, most recently in Kyiv on July 15.

Speaking at a joint news conference, Vucic said Serbia would support Ukraine’s bid to join the European Union and maintain its support for Ukraine’s territorial integrity, including territories seized by Russia since 2014.

Belgrade has, however, refused to impose sanctions on Russia, its longtime ally.

Ukraine, for its part, has not recognised Kosovo’s 2008 declaration of independence. Serbia considers Kosovo part of its territory.

“You have never heard a single bad word about our country, neither from Volodymyr Zelenskyy nor anyone else [in Ukraine], and I am extremely grateful to our Ukrainian friends for that,” Vucic said.

“Our cooperation is expanding and will become much bigger,” he told reporters, adding that Serbia would help rebuild Ukrainian cities damaged by Russia’s invasion.

Long-delayed free trade agreement

The proposed free trade agreement has been under discussion for more than two decades, with both countries now aiming to complete a deal by the end of the year.

The agreement is crucial to Serbia’s bid to join the World Trade Organization and is a prerequisite for its EU membership. Ukraine has blocked a deal since 2005 over quotas and tariffs affecting its agricultural sector.

Both leaders pointed to progress on the agreement as a sign of strengthening economic ties, alongside Serbian commitments to provide humanitarian aid and infrastructure and energy support to Ukraine this winter.

Zelenskyy said the two leaders had discussed joint infrastructure projects as well as cooperation on energy and food security before the winter, saying that “virtually not a single thermal power plant remains intact” in Ukraine because of Russian strikes.

He said Russian attacks had also damaged railway stations, hospitals, universities and civilian businesses, and thanked Serbia for preparing a new humanitarian aid package focused particularly on the medical and energy sectors.

“We are developing all formats of cooperation which can give our people … more resilience,” Zelenskyy said.

In a post on X on Saturday, Zelenskyy said he also discussed economic and logistics projects with Serbian Prime Minister Duro Macut, including the Danube Corridor and closer links between Ukraine, the Western Balkans and the EU.

Zelenskyy thanked Serbia for pledging 2 million euros ($2.3m) to support Ukraine’s energy sector.

The two countries also signed a memorandum on animal health and food safety, according to the Kyiv Post. The agreement was signed by Serbia’s Agriculture Minister Dragan Glamocic and Ukraine’s ambassador to Serbia, Oleksandr Lytvynenko.

Serbia balances EU ambitions and Russia ties

Vucic expressed doubts that either Serbia or Ukraine would secure rapid EU membership.

“I wish Ukraine every success, but this is not just a merit-based process,” he said, noting that the bloc has not admitted a new member since Croatia joined in 2013.

He also warned that he did not expect the war in Ukraine to end soon.

“I’m very afraid that we’re in for a very difficult winter – especially for Ukrainians,” Vucic said, according to the Kyiv Post.

Belgrade had condemned Russia’s full-scale invasion of Ukraine in 2022 and has supported Ukraine’s territorial integrity, but it has resisted joining Western sanctions against Moscow. Serbia also remains dependent on Russia for most of its gas.

At the same time, Serbia has sought to reduce some of its military dependence on Russia, including through an agreement to replace its ageing Soviet-era MiG-29 fighter jets with French Rafale aircraft.

The Kremlin has repeatedly accused Serbia of selling ammunition that ultimately reached Ukraine through intermediaries. Belgrade has denied supplying ammunition to Ukraine, but has said it sells ammunition to buyers around the world.

Vucic and Zelenskyy said military cooperation was not discussed during the visit.

Pictures by Jesús Vizcaya

In Boca de Aroa, a village on the coast of Yaracuy state, Yaritza and her husband Fernando await the arrival of tourists who, for the past twelve years, have stopped for breakfast at their food stand “La Bendición de Dios”. This business has been the family’s main source of income. However, after the earthquakes of June 24, almost no vehicles are going through the road to the beaches.

Fernando says that traffic decreased significantly after the earthquakes. The epicenter of the first quake was very close to them, to the south, and some houses in the area were damaged. “Before the earthquake, the flow of travelers was considerably high, but our sales are now only 25% of what they used to be. Now we live on daily earnings. What we earn each day, we use to buy what we need.”

Fernando and Yaritza are not alone. In Boca de Aroa, as in other coastal communities near Morrocoy National Park, a large part of the economy depends on the constant flow of visitors from different parts of the country. To reach its keys and beaches from Valencia, many travelers take Troncal 3, the road that runs through Boca de Aroa before reaching the most popular beaches. After the earthquakes, the road shows evident damage: several sections remained closed, and traffic had to be diverted along alternative routes, further hindering access to the region. Buses that once arrived full of travelers now carry only a handful of passengers, mostly locals who get off one by one as soon as they recognize their usual stops.

Along this route, tourists sustain an economic chain of restaurants, small businesses, and people who work in the sea. Local fishermen find their main customers in hotels, inns, and restaurants, while others depend directly on tourism, relying on the sale of food, coconut products, fish and shellfish to make a living.

Tulio, owner of La Negra, a family restaurant specializing in seafood supplied by local fishermen, says the drop in tourism has hit both the business and its employees hard. “We couldn’t open the restaurant for three weeks after the earthquake. There’s no tourism, and people aren’t coming to town anymore,” says Tulio, sitting at one of the tables. “My employees keep coming to work because I want to help them financially, but this situation is really difficult.”

There was a reason for the lack of customers. Structural damage to the bridge leading to Punta Brava Beach, within Morrocoy National Park, forced the closure of this land access for weeks. The bridge reopened to light vehicles on July 25, yet the flow of visitors remained far below normal levels. Tourists could still board boats from the Tucacas pier to reach the keys, but the weeks-long closure disrupted the economic chain that sustained Boca de Aroa and Tucacas.

The day before authorities allowed light vehicles to pass again, local beach workers protested on that same road, demanding the lifting of the measures that prevented access to the coast.

The Food and Agriculture Organization of the United Nations (FAO) warns that small-scale fishing communities are among the most vulnerable to crises and natural disasters in Latin America and the Caribbean, due to their dependence on daily income and their limited capacity to absorb prolonged disruptions to their economic activity.

The Tierra Viva Foundation, a non-governmental organization dedicated to sustainable development, environmental conservation, and the strengthening of local communities, has been working for several years with coastal communities through its Costa Viva project. This sustained presence in the territory has allowed the organization to gain firsthand knowledge of the economic and social conditions that make these populations especially vulnerable to natural disasters. Just two weeks before the emergency, on June 9, the foundation announced a fundraising campaign—which had to be suspended after the earthquakes—to provide residents of the country’s main coastal communities with work tools and vocational training to strengthen their livelihoods. The initiative responded to a situation of vulnerability that these populations already faced before the earthquake.

This is also the conclusion of Alejandro Luy, the organization’s general manager. “Venezuela is going through a complex humanitarian situation, and the earthquake aggravated it by leaving people homeless, and the contraction of tourism in the area generated unemployment,” he says. “To support their activities, we implemented training programs to help improve the services many of them offer during 2025. If tourism decreases in these areas, their livelihoods are affected.”

But the vulnerability of these communities isn’t measured solely in economic figures. It’s also present in the stories of those who saw how the earthquake disrupted a way of life built over generations.

Jesús belongs to a family that has been connected to the sea for decades. For more than 60 years, his family has lived off fishing in Boca de Aroa, a way of life that Jesús continued and that for years allowed him to sell the fish he caught. For his family, this has been the most difficult situation caused by a natural disaster. 

“In 2022, the Aroa River rose and overflowed, flooding the entire Cayumar sector and the dock area where we boarded boats to go fishing, but the flooding only lasted a couple of days. But because of the earthquakes, we haven’t sold anything we catch from the sea for several weeks.”

On June 24, Jesús had decided to return home earlier than usual. At 11 a.m., he left the sea and returned to land. Hours later, his father advised him not to go fishing again, just a couple of minutes before the earthquakes.

“I went out to buy a Coca-Cola, and on my way back home, the shaking started. My wife was at home with my parents. They managed to get out when the wall of the garage collapsed,” he recalls.

The destroyed space wasn’t just part of the family home. It was also a workplace. There, his father prepared the fishing nets, and his mother prepared the food she sold to the community members and, on weekends, to the tourists who came to the area.

“We want to rebuild our garage because my dad uses it to prepare the nets.” “My mom sells food to people in the community, but on weekends she sells to tourists,” Jesús explains.

Now he’s trying to turn the loss into an opportunity. While he waits for the debris to be removed from his mother’s porch, he started planting coconuts with the idea of ​​selling them to visitors who return to Boca de Aroa and creating a small commercial area there, but it won’t be until five years from now that he’ll see the fruits of the barely sprouted coconut trees.

His story reflects a reality that is repeated in small-scale fishing communities around the world. According to the Food and Agriculture Organization of the United Nations (FAO), this sector represents about 40% of the world’s fish catches and supports approximately 90% of fishery workers. However, those who depend on this activity often have limited capacity to absorb prolonged interruptions in their income, due to their reliance on daily work and local markets.

In Boca de Aroa, that phrase sums up the uncertainty of a community that for years lived at the pace of those who arrived seeking the sea. The absence of tourists not only left empty tables in restaurants and fewer customers for the fishermen; it also disrupted an economy built around small commercial exchanges with visitors, which sustained hundreds of families in Falcón state.

The most significant damage in the cluster of coastal towns within the country occurred in Tucacas and Boca de Aroa, unlike other tourist areas. The condition of the roads leading to these towns, along with the preventative closure of the region’s most important national park, were the main causes of the economic slowdown in these villages.

Just a few streets away from where Jesús planted the first coconuts, traces of what happened that June morning remain. Some houses are damaged, and families who lost their homes continue to wait for a solution while living in tents set up near their land.

The recovery of these fishing villages will not depend solely on removing the debris or repairing the access roads. It will also depend on those who live there being able to reconnect with an activity that for generations defined their relationship with the sea: the possibility of working, selling and supporting oneself on a coast where, after the earthquake, many are still waiting for people to return.

A Pacific island has become one of the biggest economic success stories of the year so far.

Taiwan has witnessed a dramatic boom in recent months driven by the mania for artificial intelligence (AI). Earlier this year, its stock exchange soared to become the fifth largest in the world based on market capitalisation, the value of its publicly traded shares, overtaking the United Kingdom, Canada and India.

Much of that upward momentum has been driven by AI and other technology exports highly sought after by the United States.

Last year, the US imported $201bn worth of goods from Taiwan, nearly double its rate from 2024, when it acquired $116bn in imports. In May, Taiwan eclipsed China to become the third-largest source of US imports, after Mexico and Canada.

Experts have described Taiwan’s market acceleration as a return to its status as a “tiger economy” — a term used to capture surging growth in East Asia. Much of the credit, they say, falls to its flourishing technology sector.

“Artificial intelligence helps explain the rising importance of Taiwan,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.

But critics warn that, while Taiwan’s market remains strong, factors like tumultuous international relations, as well as demographic concerns, could complicate the island’s long-term outlook.

“It seems to be a win-win for now,” said Reza Hasmath, an academic faculty adviser at The China Institute at the University of Alberta. “But Taiwan is just postponing a reality that’s not sustainable.”

An economic boom

Taiwan’s thriving export market helped boost its gross domestic product (GDP) to 8.63 percent in 2025.

That rocket-ship trajectory continued into the first quarter of this year, when the GDP saw an exhilarating 13.69 percent rise.

Government data released on Friday showed that the island is continuing that momentum, with its economy growing an impressive 12.92 percent in the second quarter of the year, which ended in June.

“The GDP growth is going like gangbusters,” said Dexter Tiff Roberts, nonresident senior fellow at the Atlantic Council’s Global China Hub.

Roberts expects the trend to be “long term”, as Taiwan produces about 90 percent of the advanced chips used to power leading AI models.

“That’s not going to go away. We know the world, and the US, needs this,” he added.

While the AI boom is a global phenomenon, the US has become a major market for such chips, with billions of dollars flowing into the industry each year.

US President Donald Trump, meanwhile, has pledged to bolster his country’s status as “the world leader in artificial intelligence”. His administration has claimed to attract more than $2.7 trillion in tech and AI investments since the start of his second term.

To secure US access to Taiwan’s cutting-edge semiconductor technology, the Trump administration signed an agreement under which Taiwan will invest $500bn in the US.

Half of that amount is expected to come in the form of direct investments by Taiwanese semiconductor and tech firms, including through the development of onshore tech manufacturing.

The rest is largely comprised of credit guarantees for additional investments from Taiwan in the US.

Under the agreement, Taiwanese firms would be allowed to import 2.5 times the capacity of their US factories, without fear of steep tariffs.

In a subsequent trade agreement, Taiwan agreed to reduce its tariffs on 99 percent of US exports.

Taiwan has also boosted its tech exports to the US through investments in nearby Mexico, with cross-border plants manufacturing inputs for data centres in Texas.

‘Unbalanced relationship’

But Hasmath, the faculty adviser at the University of Alberta, warns that there are troubling signs on the horizon for Taiwan-US relations.

Trump has long sought to eliminate trade deficits with US economic allies, and he has lashed out at countries that export more to the US than they import.

Hasmath pointed out that Taiwan is building a robust trade surplus with the US, close to $200bn and counting. That could spark a backlash.

“This is an unbalanced relationship and not conducive to Taiwan in the long term,” Hasmath warned.

Trump will not tolerate a hefty trade surplus for long, he added. Hasmath believes the US president will soon look to renegotiate his country’s deals with Taipei.

Roberts at the Atlantic Council, meanwhile, warned that Trump is “mercurial” — and with such a temperament comes “uncertainty”.

Then there’s the question of political upheaval in the US. Trump’s approval ratings are low, and he is ineligible under US law to run for a third term as president.

Demographic problems

While Taiwan’s economic boom is “very real” and “very obvious”, Roberts said there are clear vulnerabilities even on the domestic front.

Taiwan’s traditional export sectors like plastics and textiles are underperforming. Plus, Roberts pointed out that only a small fraction of the Taiwanese population is involved in the AI sector.

“A majority of the younger population is not in hi tech, so that’s a real problem,” he said.

While the booming stock market has sparked a “wealth effect” — those with rising portfolios feel richer and are more inclined to spend — that helps the wider population only to an extent.

With most of Taiwan’s employment concentrated outside of the AI sector, economists have warned that the island could develop what’s called a K-shaped economy, where the wealthy see growth, while the poorer segments of society stagnate or decline.

The chip industry employs up to 350,000 people at most, experts say.

Meanwhile, TSMC, Taiwan’s biggest chip company, makes up to 40 percent of the stock market and provides four percent of the island’s GDP growth. That lopsided proportion is “unsustainable”, according to Hasmath.

Plus, Taiwan has a rapidly ageing population, with roughly a fifth of its population over the age of 65.

The island also has other vulnerabilities. For example, it relies heavily on foreign imports of energy products, particularly oil, and has struggled with water scarcity.

Then, there’s the superpower next door: China. The government in Beijing considers Taiwan, a self-governing island, as its own territory, and it has taken aggressive measures to limit the island’s ability to establish diplomatic relations of its own.

That conflict has added fuel to the debate around Taiwan’s growth, with a spokesperson for the Chinese government reportedly saying the island’s growing proximity to the US tech sector will “drain Taiwan’s economic interests” and “hollow out” the country’s major industry.

Hasmath said that, if the AI boom backfires on Taiwan, all of that ultimately adds up to a “recipe for electoral change, a shift in government” in Taipei.

WASHINGTON — With three months remaining until election day, there is now little the Trump administration can do to bring relief to Americans battered by years of stagnant wages and steep inflation before they hit the polls, experts say — complicating midterm campaigning for Republicans and sharpening the opportunity for Democrats to win back some control in Washington.

That’s in part because the Trump administration has very few levers to turn the tide in such a short period, and has shown little interest in using those it does have, experts said. Rather, President Trump has persisted in waging war in Iran and pushed forward with new tariffs on trade partners despite both contributing to soaring costs for food, gas and other basic necessities.

Other options, such as issuing rebate checks for consumers or releasing strategic oil reserves, would be costly in the long run, experts said.

“There isn’t much available on a 14-week clock that doesn’t cost more later than it delivers now,” said Patrick Harker, professor at the University of Pennsylvania Wharton School and former president of the Federal Reserve Bank of Philadelphia.

The Federal Reserve on Wednesday also declined to use its primary tool for reducing inflation — increasing interest rates — by instead holding rates steady. Trump had not supported a rate increase, instead pressuring the central bank to lower rates, which can lower borrowing costs but increase inflation.

Some factors driving up costs are virtually impossible to resolve in the near term, such as damage to oil refining capabilities in the Middle East as a result of the war in Iran. Others are already baked into pricing to come as a result of tariffs and fuel costs, including for groceries, experts said.

Incumbent parties often suffer midterm losses when voters are broadly pessimistic about the economy, as they are now despite remarkable resilience in the U.S. labor market and strong stock returns.

Consumer prices declined in June for the first time in six years, largely thanks to a decline in gas prices as the Iran war appeared headed toward a resolution — which is no longer the case.

New data Thursday showed the U.S. economy growing at a sluggish 1.5% pace from April through June. It also showed consumer spending and inflation slowing down. But slowing inflation has not meant lower costs.

As the Iran war entered its sixth month this week, average gas prices nationally climbed back above $4 a gallon. On Wednesday, the price of Brent crude oil rose to $90 a barrel as the U.S. and Iran carried out new strikes.

The White House did not respond to a request for comment. However, Trump asserted Wednesday that the economy is strong — citing in part new U.S. automobile plants as evidence — while slamming the Federal Reserve’s decision to leave interest rates unchanged.

“They want to keep rates up, but we will fight through this,” Trump told reporters at an Oval Office event. “We have things that are going on in our country in the likes of which no one has ever seen.”

As Democrats have seized on the economy as the midterms’ defining issue, Trump has promised improvements but also called affordability concerns a “hoax.” Last week, he rejected the notion that he should rethink his unpopular Iran strategy because of the looming midterms.

“No, the election — I can’t think about that having to do with this,” he said before renewing attacks last week. “I think people are very impressed.”

Jonathan Nagler, a New York University professor who studies how the economy shapes politics, said it is impossible to predict how voters will feel about the economy three months from now, because there are so many variables.

But data make clear that “the better the economy is, the better the incumbent does,” and voters will blame Trump and his party for their economic woes if they persist, Nagler said — particularly with gas prices, which are “a non-trivial expense” that is “super directly tied to Trump.”

“Democrats can draw a very straight line from a decision by Trump to go to war with Iran, and gas prices rising. That is just very, very easy to explain to people in a pretty convincing way,” Nagler said. “Democrats can try to say, ‘Hey, there should be some accountability here.’”

Diane Swonk, chief economist at KPMG, said inflation has compounded for years “to make the level of prices too high for too many,” and is clearly the biggest economic issue facing many Americans.

“And that’s not likely to change in the next few months, where you still not only have some of the spillover effects of the war in Iran to play out — most notably in terms of the fall harvest and food prices, which will go well into 2027 — but also just the on-again, off-again truces and the damages to refining capacities,” she said.

All of that is adding to “simmering” service sector inflation and Trump’s latest tariffs, which mean “more paperwork, more costs, and another bump in prices in the pipeline,” Swonk said.

Harker said the administration has no good options for bringing down prices by November. Reducing tariffs takes time to filter down to shelf prices, so that can’t offer a quick fix even if Trump were to decide to cut them, he said.

The biggest variable between now and November is energy, Harker said, and no economic tool allows the administration to control what happens in the Persian Gulf. Even if Trump’s war with Iran were to end, economists say it would take a significant amount of time for gas prices to come down.

The Fed could decide to raise rates in September, but Harker said that would take time to filter through the economy and would do “nothing” ahead of November.

On the campaign trail, Trump promised to immediately “reverse the disastrous effects of [President] Biden’s inflation and rebuild the greatest economy in the history of the world,” one where “incomes will skyrocket, inflation will vanish completely, jobs will come roaring back, and the middle class will prosper like never, ever before.”

A recent CNN poll found that 65% of Americans believe Trump’s policies have worsened economic conditions in the country, while less than a quarter — 22% — said they had improved conditions, and that 67% believe Trump’s choices in Iran hurt the U.S.

The poll found Trump had a 34% approval rating, matching a career low from the end of his first term, and that his support fell even lower on key issues: to 28% on Iran, 25% on inflation and 21% on gas prices.

A recent Pew Research Center survey found most Americans aren’t feeling great about the economy — with 24% rating economic conditions as excellent or good, 41% rating them as “only fair,” and 35% rating them as poor. It also found that voters want candidates running for Congress in November to talk about economic issues.

Democrats see the poll numbers as an opportunity to win over swing voters, which becomes more urgent as the campaign enters its fall stretch.

House Democratic Leader Hakeem Jeffries (D-N.Y.) last week placed blame for rising costs squarely on Trump‘s tariffs, his “reckless war of choice” in Iran, and cuts to healthcare made in last year’s federal spending package.

Vidhya Jeyadev, a spokesperson for Majority Democrats, which is focused on growing the party, said Democrats now have an opportunity to bring in Republican voters disillusioned with the president’s handling of the economy.

“We need to tie what people are feeling day to day — rising rent, groceries, utility costs — directly to the choices that Trump and Republicans have made,” Jeyadev said.

Many Republican leaders have acknowledged economic challenges while defending Trump’s policy decisions.

They have broadly backed the war in Iran as a necessary step to halt Iran’s nuclear ambitions. House Speaker Mike Johnson (R-La.) recently defended Trump’s tariffs, too, acknowledging some sectors have experienced “challenges” as a result, but saying “all that’s settling out as we go into this election cycle.”

Swonk said some economic indicators do show a surprisingly strong economy that benefits the rich.

However, “there’s a reason people are upset, and that’s because inflation, much like stock returns, has compounded — but not everybody has stock returns. Everybody feels inflation. And that drives a larger wedge between the haves and the have-nots,” she said.

“What anyone really cares about is the prices that went up didn’t come back down, and their wages didn’t keep up with it,” Swonk said. “It doesn’t feel like you can do as many things as you once did. And that’s hard.”

China’s top leaders pledged on Thursday to support the country’s slowing economy by accelerating spending on already-approved infrastructure projects instead of rolling out large-scale stimulus measures. The decision came after recent economic data showed second-quarter growth slowed to 4.3%, the weakest pace in more than three years and below the government’s annual target range of 4.5% to 5.0%.

The commitment followed a meeting of the Communist Party’s Politburo, where policymakers acknowledged mounting economic challenges but signaled confidence that existing fiscal resources would be sufficient to stabilize growth through the remainder of the year.

Infrastructure Spending Takes Center Stage

Rather than introducing fresh stimulus packages, Beijing plans to speed up implementation of projects that have already been budgeted. Analysts said the government still has significant fiscal room because infrastructure spending and bond issuance progressed more slowly than planned during the first half of the year.

Economists expect much of the spending to focus on China’s “six networks” initiative, covering investments in water systems, logistics infrastructure, underground pipelines, electricity grids, telecommunications and computing power centers. State media has previously indicated that roughly $1 trillion has been allocated for these projects.

Analysts viewed the Politburo’s statement as confirmation that Beijing intends to support growth without significantly expanding its fiscal deficit.

Concerns Over Overcapacity Remain

Chinese leaders continue to avoid aggressive stimulus partly because they remain focused on tackling industrial overcapacity and encouraging local governments to maintain fiscal discipline.

The Politburo reiterated its commitment to addressing what it described as “involution competition”—a term referring to intense price wars among manufacturers competing for market share at the expense of profitability. While many economists argue that excess industrial capacity is driving these price wars, Beijing continues to reject claims that overcapacity is a structural problem.

Weak Consumer Demand Continues to Weigh on Growth

Although manufacturing exports and advances in artificial intelligence have supported parts of the economy, domestic consumption remains weak.

China’s prolonged property downturn, sluggish wage growth and a challenging labor market have reduced household confidence. Millions of workers have shifted into lower-paying gig economy jobs with limited social protections, encouraging higher savings rather than consumer spending.

This imbalance has increased China’s reliance on exports to sustain growth, raising concerns among trading partners that Chinese manufacturers are flooding global markets while domestic demand remains subdued.

Employment Support Remains a Priority

The Politburo pledged to strengthen domestic demand by expanding employment support, particularly for flexible workers and those in newer forms of employment. However, officials did not announce specific policies aimed at boosting household incomes.

Economists noted that while Beijing continues to emphasize consumption, its strategy remains focused on improving the supply of goods and services rather than directly increasing consumer purchasing power through large-scale income support or cash stimulus.

Outlook

The latest policy signals suggest Beijing is seeking to balance economic stability with long-term structural reforms. Rather than relying on broad stimulus, China’s leadership is betting that faster implementation of existing infrastructure investments and targeted employment measures will be enough to keep the economy on track while avoiding a surge in debt and further industrial overcapacity.

With information from Reuters.

The announcement by the head of Yemen’s Presidential Leadership Council, Rashad al-Alimi, to resume oil exports starting July 20 following a halt that began in late 2022 has revived hope that the Yemeni government’s most important source of foreign currency will be restored. The government, struggling economically and facing continued Houthi rebel control over Yemen’s northwest, needs the money – and has pledged to direct the revenues towards paying salaries, improving services, and supporting economic stability.

However, the flow of oil from Yemen’s fields to global markets does not depend solely on a decision made by politicians; it requires creating a security environment, after years of war, that allows for the protection of facilities, pipelines and ports, in addition to restoring the confidence of shipping and insurance companies, as well as international buyers.

With Yemen’s war threatening to escalate after a four-year period of calm, the stability the country needs to resume oil exports may be elusive.

The export test

Yemen has proven oil reserves estimated at about three billion barrels, primarily concentrated in the Masila, Marib and Shabwa basins. While the United States Energy Information Administration (EIA) indicates that the country still holds sufficient resources for production and export, the security environment hinders their extraction and transport to global markets.

Yemen’s oil production reached a historical peak of about 439,000 barrels per day (bpd) at the beginning of the millennium, but it has gradually declined due to the depletion of some old fields. This decline accelerated with the outbreak of the war in 2014 and the targeting of oil infrastructure, settling at a level of 19,000bpd in 2024, according to the International Monetary Fund (IMF).

A report published by S&P Global estimated actual production, following the halt in exports, at about 7,000bpd to 10,000bpd in 2023 and 2024, almost all of which was for domestic use.

Yemeni Minister of Oil and Minerals Mohammed Bamqaa said that export revenues would be deposited in the Central Bank as part of a government directive to bolster the state’s financial resources, pointing out that there are oil stockpiles exceeding 1.7 million barrels ready for export.

Bamqaa added that total production will initially reach about 60,000bpd. He explained that the ministry has directed oil companies to prepare timelines to increase production and develop the fields, in a way that raises production capacity by up to 25 percent during the first month after exports resume.

Professor of financial economics at Hadramout University, Mohammed al-Kasadi, told Al Jazeera that while he expected oil production to meet the 60,000bpd figure mentioned by Bamqaa, the figure does not reflect the actual volume of exports, as the local market consumes about 20,000bpd to operate refineries and power plants, which makes the quantities available for export likely to hover at about 40,000bpd.

Hassan Mohammed Moghalis, an expert in Yemeni affairs, told Al Jazeera that most of the fields located in government-controlled areas remain capable of production. At the forefront of these are the Masila fields in Hadramout and the al-Uqla fields in Shabwa, which represent the fundamental base for any anticipated resumption. Moghalis explained that crude oil can be transported via pipelines to Arabian Sea ports.

However, Moghalis pointed out that resuming exports does not simply mean opening the valves, as some fields require maintenance and restoration after a long period of suspension. Additionally, pipelines and pumping stations require technical reviews to ensure their readiness before resuming regular operations.

Market confidence

Despite the importance of restarting production at the oilfields, experts believe bigger obstacles await after the oil reaches Yemen’s ports. Houthi attacks targeting export ports in Hadramout and Shabwa in late 2022 made shipping and insurance companies more wary of handling Yemeni crude, pushing up insurance costs and weakening buyers’ willingness to enter into contracts.

The Houthis have conditioned the resumption of exports on them receiving a share of the revenues to cover public sector salaries.

Al-Kasadi, of Hadramout University, says that the government’s success in pumping oil to the port does not automatically guarantee a successful export process. Maritime transport and insurance companies primarily assess the level of security risks and the likelihood of ports or tankers facing renewed attacks – currently a particular concern in light of Houthi attacks on shipments tied to Saudi Arabia, which supports the Yemeni government.

Al-Kasadi added that the oil market relies heavily on trust and stability. Therefore, any export operation requires buyers to be convinced that shipments will depart safely and that export activities will not suddenly halt again.

Moghalis, the expert, believes that providing military protection for ports and pipelines is the first step, but not the only condition. It is also imperative to restore the confidence of insurance companies and international buyers, as oil does not reach markets solely through production, but rather via an interconnected system of transport, financing and insurance.

He added that any new attack on the ports, even if it does not cause significant material damage, could be enough to send the sector back to square one, given shipping companies’ sensitivity to risks in conflict zones.

But, as al-Kasadi pointed out, a resumption in exports is vital. He argued that the halt in exports was not merely an oil sector crisis, but rather developed into a comprehensive financial crisis. The government lost its most crucial source of foreign currency, which negatively impacted the Yemeni rial’s exchange rate and the state’s ability to finance basic services.

Economic pressure

Despite the importance of resuming exports, Yemeni affairs expert Abdul Karim al-Ansi warned against overstating its immediate impact on the Yemeni economy.

He told Al Jazeera that the resumption of exports will undoubtedly provide a vital source of foreign currency and afford the Central Bank greater leeway to support monetary stability. However, it will not be enough on its own to end the economic crisis, as the Yemeni economy faces broader challenges related to the division between government- and Houthi-controlled areas, weak non-oil revenues and declining economic activity.

Al-Ansi added that the extent to which Yemenis benefit from oil revenues will ultimately depend on how these funds are managed and the government’s ability to channel them into salaries and basic services, rather than solely on the volume of exports.

And while successful initial shipments could send a positive signal to markets and investors, al-Ansi stressed that the real test would be whether exports can be sustained. Yemen’s economy needs a steady flow of foreign currency, rather than sporadic shipments that stop whenever security conditions deteriorate.

The suspension of oil exports has not only deprived the government of its most important source of revenue, but also intensified pressure on the foreign exchange market. As dollar inflows from oil sales have dried up, demand for foreign currency has remained high to finance imports of essential goods, particularly food, fuel and medicine. The resulting shortage has weakened the Yemeni rial and contributed to rising inflation.

These pressures have been compounded by the monetary division between the Central Bank in Aden and the Houthis in Sanaa, which has created two separate financial systems and exchange rates. The split complicates monetary policy and limits the authorities’ ability to use oil revenues in a coordinated way to stabilise the economy.

Al-Kasadi said that Saudi financial support for the government had recently helped contain currency volatility in government-held areas. However, he stressed that such support was no substitute for a steady and sustainable flow of oil revenues – which needs a period of stability, something that may be difficult if the conflict escalates in Yemen, as it is currently threatening to do.