Tehran

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.

China has long been a rare partner to Iran, with the economic heft to blunt the United States’ efforts to strangle the Iranian economy.

Yet even as China opposes US President Donald Trump’s latest pressure campaign, few observers expect it to go much further than the modest economic links it has thus far forged with Iran to shield it.

While China opposes the Trump administration’s military attacks and sanctions against Iran, Beijing’s relationship with Tehran is just one consideration in a foreign policy that seeks to balance relations with numerous countries, including the US and the Gulf states, limiting its appetite to prop up the Iranian leadership at any cost, analysts say.

“China, with broader global interests, can only actively promote de-escalation of the US-Iran conflict, and cannot and will not engage in fierce confrontation with the US for Iran’s sake,” said Hongda Fan, director of the China-Middle East Center at Shaoxing University in China.

“Ultimately, the US-Iran conflict must be resolved by the two countries themselves,” Fan said.

China and Iran share substantial trade links, particularly in energy, and a mutual suspicion of US dominance, but their relationship is heavily lopsided, with Tehran depending on Beijing far more than vice versa.

That asymmetry in ties was on full display this week at the annual gathering of the Shanghai Cooperation Organisation, a 10-member bloc widely seen as a counterbalance to US hegemony, where Chinese President Xi Jinping joined more than a dozen non-Western leaders, including Iranian President Masoud Pezeshkian.

While Iranian state media reported that Pezeshkian held a “brief meeting” with Xi on the sidelines of the summit in Bishkek, Kyrgyzstan, Chinese outlets made no mention of the encounter.

Xi immediately followed his attendance at the summit with his first visit to Egypt in a decade on Tuesday, using the visit to call on countries in the Middle East to oppose “external interference” and reiterate his calls for a diplomatic resolution to the Iran war.

As Iran’s top trade partner, China has taken up to 90 percent of Iranian oil exports since the US and Israel launched their war in late February.

Iranian crude, however, accounts for only about 2 percent of China’s overall energy mix.

While China’s oil purchases have been an economic lifeline for Tehran, Chinese importers have not been immune to fears of exposure to US sanctions.

China’s major state-owned refiners such as Sinopec and PetroChina have shunned Iranian oil for years, leaving the trade to independent “teapot” refiners with minimal links to the dollar-based global financial system.

Though the Trump administration has imposed sanctions on these “teapot” refiners and a limited number of China- and Hong Kong-based firms and individuals, it has yet to target major Chinese banks accused of facilitating Iranian oil purchases.

The Trump administration has hinted at targeting China’s financial system as part of its ramped-up sanctions campaign, dubbed “Operation Economic Outcast”, though analysts are sceptical that Washington will risk provoking Beijing’s ire as the sides seek to lower the temperature in their trade war before a scheduled summit between Xi and Trump on September 24.

“The legitimate question is why third countries should be expected to adopt Washington’s unilateral economic policy towards another sovereign state,” said Zichen Wang, deputy secretary-general of the Center for China and Globalization (CCG) think tank in Beijing.

“That does not, however, mean that Beijing will provide Tehran with a blank cheque,” Wang said.

“China is likely to continue opposing US secondary sanctions politically and to defend what it considers legitimate Chinese commercial interests. But past behaviour also shows that major Chinese banks and state-owned companies are highly conscious of sanctions exposure.”

Rhetoric versus reality

Even as Beijing and Tehran have forged closer ties, their relations have for years been marked by a substantial gap between rhetoric and reality.

While China pledged to invest up to $400bn in Iran over 25 years as part of a “comprehensive strategic partnership agreement” signed in 2021, few projects have materialised amid what analysts say is Chinese firms’ reluctance to navigate sanctions and the opaque Iranian bureaucracy.

In 2023, Iran’s then deputy economy minister, Ali Fekri, complained that he was “not satisfied” with China’s level of investment since the agreement, saying it had only amounted to about $185m.

“Iranian experts often blame their government for not doing enough to attract Chinese investors or not pushing Chinese companies to share more technology,” said Andrea Ghiselli, head of research at the ChinaMed Project.

“However, the reality is that there is no point for Chinese companies to give up their ties with the international financial system to expand their business in Iran,” Ghiselli said.

“It is much easier and more profitable to trade and invest elsewhere. Iran’s own domestic physical and bank infrastructure is also an obstacle.”

Meanwhile, the most tangible measure of China’s economic support, purchases of Iranian oil, has been dwindling amid the US blockade of Iranian ports.

Iranian crude exports via the Strait of Hormuz, mostly bound for China, fell from an estimated 1.85 million barrels per day (bpd) in March-April to just 240,000bpd in August, according to data from ship-tracking platform Kpler, though millions more barrels shipped before the blockade are still at sea.

In an interview with CNBC on Monday, US Treasury Secretary Scott Bessent said “only” about 30 million barrels of Iranian oil remained on the water and Chinese remittances to Iran were “going to run out”.

Kpler last month estimated that about 80 million barrels were in on-water shortage, enough to provide revenues to Tehran for up to six months.

“For China, Iran is valuable – but replaceable across many dimensions. Iranian oil matters, but China can obtain energy from Saudi Arabia, Russia, Iraq, the UAE, and numerous other suppliers,” said Mordechai Chaziza, an expert on China’s Middle East policy who lectures at Ashkelon Academic College in Israel.

“Iran offers geopolitical access, but China possesses relationships throughout the region. Iran supports China’s multipolar agenda, but so do many other states.”

China’s support for Iran is also not risk-free for Beijing, given its important relationships with Iranian rivals such as Saudi Arabia and the United Arab Emirates, Chaziza said.

“Saudi Arabia and the UAE are major energy and commercial partners.

“Gulf stability is vital because China obtains roughly half of its crude imports from the Middle East,” he added.

The “ideal outcome” for Beijing, Chaziza said, would be “a stable, sovereign, economically connected, and internationally non-Western” Iran, but not one “whose confrontation with Washington, Israel, or the Gulf monarchies forces China to choose sides”.

Wang, at the CCG, said that while Beijing appears determined to defend Chinese commercial interests, it is unlikely to sacrifice its broader interests in the region or elsewhere.

Beijing’s warning that it is ready to take countermeasures against unilateral sanctions is “not the same thing as promising to underwrite the Iranian economy”, Wang added.

For China, Iran is seen more as a customer than an ally, said Kerri Bitsoff, a former senior official at the US Treasury’s Office of Foreign Assets Control.

“I don’t think this is the alliance some people think it is, even though there’s real support. I think of a more like a customer relationship that Iran can’t walk away from,” Bitsoff said.

“And it was good for China – they got cheap oil, they got a US tied up in the Middle East, but I think that only lasts up until the point where it threatens China’s other interests,” she added.

US says its forces ‘successfully’ completed a wave of strikes against Iranian targets, accusing the IRGC of attempted attacks on shipping and US service members.

BEIRUT — Iran’s economy, already strained by high inflation, years of Western sanctions and a war that has sharply reduced oil revenue, is poised for more instability as the Trump administration tries to coerce other countries into ending all financial dealings with the Islamic Republic.

A decision by the United Arab Emirates to suspend trade relations with Iran last week kick-started the White House’s latest attempt to isolate Tehran into submission. Iran entered the war with its foreign commerce concentrated among a relatively small group of countries, leaving it with fewer places to turn now.

The success of the U.S. strategy largely will hinge on China, the main buyer of Iranian oil and its top trading partner. Russia, a fellow target of sweeping U.S.-led sanctions, has a military conflict and economic crisis of its own and probably can’t offer longtime ally Iran much hard financial support.

Regional partners like Turkey, Pakistan and Iraq maintain important relationships with both Iran and the U.S., giving them reason to avoid exposure to the secondary sanctions that Treasury Secretary Scott Bessent said awaited nations that did not cut economic ties with Iran.

“Those who stand with the United States will reap the rewards of our partnership,” Bessent said Monday while outlining the plan he called “Operation Economic Outcast.” “Those who tether themselves to the Iranian regime should expect to share in the isolation.”

The Emirates will be hard for Iran to replace as a conduit for foreign goods and payments

Despite Western sanctions, Iran in 2024 exchanged $125 billion worth of goods globally, according to Trade Data Monitor, a private firm. Iran is not a member of the World Trade Organization.

The bulk of its declared international trade, though, was with a handful of partners. The UAE, China and Turkey supplied nearly three-quarters of Iran’s merchandise imports. Four countries — China, Iraq, the UAE and Turkey — accounted for more than two-thirds of its non-oil exports.

On the supply side, the UAE held outsized importance. It was Iran’s biggest source of imported items and a gateway to financial channels that helped Iranian businesses make and receive international payments. Both roles kept Iran connected to the global economy.

As a reexport hub, the UAE processed shipments from foreign suppliers reluctant to deal directly with Iranian customers.

“From Iran’s perspective, the UAE can be replaced, but the Iranians are openly saying it’s not going to happen overnight,” said Alex Vatanka, a senior fellow at the Middle East Institute in Washington.

China has deep economic ties to Iran but depends less on the relationship

Beijing has economic interests in the Persian Gulf beyond Iran, and so far has avoided getting drawn into the conflict the U.S. and Israel initiated. China buys the overwhelming majority of Iran’s crude through opaque trading networks that bypass sanctions.

Its manufacturing clout and stranglehold on critical mineral supplies nonetheless give Beijing more room than Iran’s other partners to resist U.S. pressure, said David Lubin, a senior research fellow at Chatham House. Aggressive action against major Chinese banks and businesses could revive trade tensions as Chinese leader Xi Jinping prepares to meet with President Trump in Washington next month.

“I don’t see China playing ball by any means,” Lubin said.

China is both Iran’s largest reported export market and a supplier of essential parts and products, according to WTO and United Nations data.

During the Obama administration, Beijing did agree to reduce energy imports from Iran, said Atlantic Council fellow Daniel Fried, a former U.S. ambassador to Poland.

“We will want the Chinese to go a lot farther than they have gone in the past,” Fried said. “But it’s a lot harder now.”

China has experience helping an ally survive sanctions: It has long been North Korea’s economic lifeline and main diplomatic backer. Experts say China has avoided fully enforcing U.N. sanctions on North Korea and sent clandestine aid to help its impoverished neighbor stay afloat.

Expanding bilateral trade would create problems for Iran’s neighbors

Iranian Parliament Speaker Mohammad Bagher Qalibaf, who has been his country’s lead negotiator over the last six months, was in Iraq the day of the UAE’s trade suspension. A purpose of his visit, he said, was “speeding up efforts to expand joint cooperation among all countries in the region, without foreign interference.”

The U.S. dollar’s preeminence in international trade and finance, however, means none of Iran’s trading partners would antagonize Washington lightly, Vatanka said. “We’re still at a point where if the U.S. wants to hurt you, it will matter,” he said.

Underscoring potential consequences, Turkey settled a years-long U.S. dispute in July over the role of a state-owned bank in helping Iran evade sanctions through an oil-for-gold scheme. Trump also moved to lift sanctions on its fellow NATO member stemming from Turkey’s purchase of a sophisticated Russian missile system.

“I really don’t think Turkey would like to become the next country helping Iran to evade sanctions right now,” said Riccardo Gasco, an analyst at the IstanPol think tank in Istanbul.

Iran is a vital import source for Iraq and retains influence there through allied political factions and armed groups. Baghdad has sought closer economic and security ties with Washington. Since it invaded Iraq in 2003, the U.S. has significant control over the nation’s foreign currency reserves because they are housed in the Federal Reserve Bank in New York.

Oman, a frequent intermediary between Washington and Tehran, has found its balancing act suddenly precarious. Trump threatened Oman last week over its ongoing negotiations with Iran on the future management of the Strait of Hormuz.

One easy route for goods slipping past sanctions on Iran would be ports like Gwadar near the Persian Gulf in Pakistan, said Peter Harrell, a visiting scholar at Georgetown University.

“Ship an intermodal container of drone parts to one of the ports in western Pakistan and unload it onto a truck and have it driven across the border into Iran,” he said.

While Pakistan, a key ally and economic partner of China in the region, wants to increase trade with Iran, it faces competing pressures. It is serving as a key mediator between Tehran and Washington and has deep security ties with Saudi Arabia, Iran’s longtime regional rival.

Caspian Sea trade route alternatives unlikely to grow quickly

With the Strait of Hormuz mostly blocked and Russia’s war with Ukraine endangering ships on the Black Sea, Iran has sought to develop a “road of life” on the Caspian Sea, said Nikita Smagin, an independent analyst and a former Russian state news agency correspondent in Tehran.

Russia reportedly sent drones to Iran this year, repaying Tehran’s favor after Moscow’s full-scale invasion of Ukraine. It also rerouted exports to Iran via Caspian Sea ports like Astrakhan. Agricultural products make up 80% of Russia and Iran’s reported trade.

“Both economies are exporting natural resources and have little to offer each other,” Smagin said.

The other countries that border the Caspian — Azerbaijan, Turkmenistan and Kazakhstan — probably won’t rush to join in, said Umud Shokri, a fellow at George Mason University.

Yet Russia and Iran are already in an “axis of the sanctioned,” said Mark Galeotti, executive director of the Mayak Intelligence firm. For decades the pair have collaborated to thwart trade restrictions, and increasing bilateral trade in both “strategic goods” and contraband like military technology, microchips and Gucci handbags could be a next step.

“Pomegranates and tomatoes only go so far,” he said.

Chehayeb and McNeil write for the Associated Press. McNeil reported from Brussels. AP writers Amir Vahdat in Tehran and Dasha Litvinova in Tallinn, Estonia, contributed to this report.

Qatari Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani is due to visit Tehran on Thursday for talks on de-escalating tensions and reviving dialogue between Iran and the United States.

A spokesman for Qatar’s Ministry of Foreign Affairs announced the visit in a statement on X on Wednesday.

Majed al-Ansari said Sheikh Mohammed, who is also Qatar’s foreign minister, will meet with “a number of Iranian officials” in Tehran to “discuss ways to de-escalate tensions” and “create the conditions conducive to dialogue”.

“The visit comes in line with the State of Qatar’s firm position that the diplomatic path is the best means of resolving differences & promoting security & stability in the region,” he added.

Iran also confirmed the visit, saying the discussions will cover “the continuation of Qatar’s mediation efforts and initiatives, as well as other regional developments”.

Qatar has served as a back-channel negotiator between Washington and Tehran and helped secure a memorandum of understanding in June that briefly paused hostilities. The agreement collapsed in July, and the conflict is now nearing its sixth month, with fighting largely paused but no diplomatic breakthrough in sight.

The US has, meanwhile, promised to increase economic pressure on Tehran by sanctioning its trade partners.

US President Donald Trump told Al Jazeera on Wednesday that he was in “no hurry” to resume talks with Iran, saying that he believed economic and military action against Tehran were both effective.

“I have no time schedule; whatever it takes,” he said.

‘Economic terrorism’

Iran has continued to denounce the economic pressure campaign.

Foreign Minister Abbas Araghchi wrote to the United Nations on Wednesday calling the new sanctions an “act of state and economic terrorism” and urging member states not to implement them.

“The sanctions deliberately harm civilians by restricting access to food, medicine, medical equipment, energy and other essentials, violating rights including the rights to life, health, food and an adequate standard of living”, he said.

The two sides also remain at odds over the Strait of Hormuz, the strategic waterway that handled one-fifth of global oil and liquefied natural gas shipments before the US-Israel war on Iran began in February.

Iran wants control over the strait, while the US wants it to remain an international waterway that is free for all. That disagreement in part led to the collapse of the memorandum signed in June.

Oil flows through the strait have since fallen to a three-month low, with just 5 million barrels per day (bpd) transiting on Monday. Before the war, the strait carried roughly 20 million bpd of crude oil.

Qatar’s Foreign Ministry said Sheikh Mohammed will also discuss the waterway in his meetings in Tehran on Thursday, focusing on “the need for it to return to the status quo prior to February 28”.

Regional diplomacy

Sheikh Mohammed’s visit comes two days after Omani Foreign Minister Badr Albusaidi met his Iranian counterpart, Araghchi, in Tehran.

Following those talks, Iran’s deputy foreign minister, Kazem Gharibabadi, said the two countries had agreed on a new temporary route for shipping in the strait.

But he insisted that the waterway will not reopen until the US fulfils its commitments under the June deal, including the lifting of sanctions and the release of frozen assets.

Pakistan’s army chief, Asim Munir, also visited Tehran earlier in the week in a bid to “end the stalemate” in the conflict, with Islamabad reporting “significant progress” in those talks.

Mostafa Khoshcheshm, a professor at the University of Applied Sciences in Tehran, said that regional countries were pushing for dialogue because “they believe that the situation is moving towards escalation”.

“They know that if war breaks out, it would be a fully-fledged war and the fire would spill over into the entire region and beyond, leaving a detrimental impact on the global economy,” he said. “So there are hectic diplomatic moves on the part of these countries.”

US Treasury Secretary Scott Bessent announces new sanctions on Tehran to sever financial support for the regime, urging US allies to support the measures.

WASHINGTON — The United States unveiled plans Monday for new sanctions against Iran that Trump administration officials said are designed to sever Tehran from the global financial system as the nearly six-month conflict between the two countries drags on.

Treasury Secretary Scott Bessent, who previewed the announcement last week as “economic D-Day,” described the measures as the opening of an all-out financial assault on the Iranian government and its trade partners — a group that includes China, India, Turkey and the United Arab Emirates.

“To those who enable Tehran, do not discount the cost of testing Washington’s resolve,” Bessent said at a news conference. “No nation should expect to enjoy the rewards of our system while helping those who seek to destroy it.”

Bessent said it was time for world leaders to “make a decision” between “America and Iran,” adding that President Trump has already been calling foreign leaders to make specific requests ahead of the new sanctions.

But when asked whom the president had been talking to, Bessent said he would not “name names.” He also said the secondary measure would not take effect immediately, arguing that the administration is trying to give “everyone the opportunity to remedy bad behavior.”

“Why would I want to blow up the global financial system?” Bessent said when a reporter pressed him on why the sanctions weren’t immediate. “We believe that it is important to level set and give people a cure period, but they should know that that will move very quickly and that we are serious.”

The pressure campaign will build on a naval blockade and other sanctions the Trump administration has already imposed in its effort to force Tehran into a deal that ends the war on U.S. terms.

Trump’s latest economic push against Iran revives a familiar strategy from presidents of both parties, using financial leverage to pressure Tehran toward more serious negotiations over its nuclear program. Sanctions helped bring Iran to the table before a 2015 nuclear deal brokered by President Obama, but the agreement was widely criticized as weak by Republicans. After Trump withdrew from the agreement in his first term, a new “maximum pressure” campaign failed to secure a new deal.

Trump’s decision to return to a strategy of economic coercion has signaled to Iran that the fighting phase of the war is probably over, for now, with the U.S. administration choosing a path “neither of war nor of peace,” Masoud Pezeshkian, Iran’s president, said this week.

Iranian officials, who had been anticipating the move, pushed back on Washington’s strategy even before Bessent began speaking Monday.

Foreign Minister Abbas Araghchi told Iranian state media over the weekend that the sanctions amounted to a repackaged version of decades-old American pressure tactics that Tehran has already learned to withstand. Esmail Baghaei, Iran’s foreign ministry spokesman, warned of “grave consequences” for any countries cooperating with what he said was “illegal behavior” by the United States. And Mohsen Rezaei, the secretary of Iran’s Supreme Security Council, suggested that the economic pressure could shut down oil exports through the Strait of Hormuz, a threat that would ripple through global energy markets.

That defiance underscores the central gamble of Washington’s strategy. Rather than aiming sanctions at Iran alone, Bessent’s plan to potentially squeeze major economies like China and India over their ties to Tehran could pose a diplomatic risk to the U.S.

The fallout could also reach beyond foreign diplomacy as a hit to global markets also risks compounding Trump’s troubles at home ahead of the midterm elections, as Americans grow unhappy with the economy and their support for the conflict in the Middle East plummets. The Iran sanctions also land as the administration wages a separate trade fight with Canada, adding uncertainty to global and domestic markets.

Whether Washington will be able to apply pressure on Iran’s trade partners remains an open question.

China alone shares nearly $10 billion in bilateral trade with Iran, and paid roughly $31.2 billion for unreported Iranian crude oil imports in 2025, according to the U.S.-China Economic and Security Review Commission. That makes China the largest buyer of Iranian crude oil by a wide margin, accounting for more than 90% of Iran’s oil exports, according to the commission.

It is unclear whether Trump has spoken to China’s leader, Xi Jinping, about the sanctions. But the two leaders are set to meet in Washington next month, adding to the diplomatic dynamics of the moment.

Other trading partners have already made some moves.

The UAE said last week that it was suspending trade with Iran, a decision that followed accusations that Tehran had fired two ballistic missiles at the Emirates.

Afra Al Hameli, a spokesperson for the Emirati Ministry of Foreign Affairs, said in a post on Aug. 18 on X that all trade, commercial exchanges and financial transactions with Iran have been halted until further notice. She added that the Emirates was “firmly committed to safeguarding the integrity of the international financial system.”

Bessent said Monday that he expects other countries will “take similar actions as we continue our engagement.”

In an opinion article written for the Financial Times last week, Bessent has cast the new measures as the “single greatest financial offensive ever marshalled against an adversary.”

Bessent wrote that countries that “sever Iran’s remaining financial and commercial connectivity” will see their economies reinvigorated, and those who don’t will experience the end of their “lasting prosperity.”

“Any nation that serves as a financial artery of a withering regime should expect to share in its isolation,” he wrote. “To become a sanctuary for terror is to become, in the eyes of the United States, a global pariah.”

Ahead of the announcement Monday, Trump posted on Truth Social that Iran was “completely collapsing.”

Meanwhile, Iran’s central bank governor, Abdolnaser Hemmati, said the U.S. had already done all that it can against Iran and that the central bank had been shoring up its foreign currency reserves for months. Last week, he said Iran’s crude exports had “virtually stopped.”

“[The Americans] have done everything, so what else can they do?” he said in an interview with Tasnim News.

Despite his assurances that the central bank was working on preventing a devaluation of the Iranian rial, the currency has struggled to remain above a black market exchange rate of 2 million per dollar — a record low. The Central Bank rate stands at roughly 1.5 million rial to the dollar.

Though experts question the effectiveness of additional economic pressure on Tehran, Bessent’s threat to target Iran’s trading partners — especially the UAE, China and Turkey, who together comprise almost three-quarters of Iran’s foreign imports — will undoubtedly be painful for Iranians.

For example, Iran uses the UAE as a reexport hub and buffer, and receives vehicle spare parts from China, according to the Observatory for Economic Complexity. Iranian economic experts say both the agricultural and pharmaceutical sectors also rely on imports from countries such as Brazil and Turkey.

Ceballos reported from Washington and Bulos from Beirut.

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

China opposes the US and Western escalation against Iran and insists on condemning the US and Israeli attacks on Iranian nuclear targets. China considers the US and Israeli military attacks on Iranian nuclear facilities a blatant violation of international law and the UN Charter. While Beijing officially adheres to nuclear non-proliferation, it will hold the US directly responsible and will oppose the imposition of new international sanctions against Iran in the UN Security Council. China will work to hold Washington accountable. Beijing believes that the US withdrawal from the nuclear agreement is the root cause of the current impasse in the Nuclear Non-Proliferation Treaty (NPT) negotiations. The Chinese Foreign Ministry asserts that the policy of maximum pressure and economic sanctions against Tehran will not resolve the crisis but will only exacerbate tensions. China views Tehran’s threat to withdraw from the NPT as an understandable reaction to the maximum pressure exerted upon it, but it consistently prefers diplomatic solutions and supports maintaining the international legal framework to prevent escalation.  The Chinese stance came after Iranian parliamentarians, including Ebrahim Rezaei, asserted that withdrawing from the Nuclear Non-Proliferation Treaty (NPT) is the best response to the Trump administration’s escalation of economic warfare.

The main dimensions of the Chinese position regarding the Iranian threat to withdraw from the NPT are embodied in China’s rejection of pressure and sanctions against Iran. China maintains that the escalating US sanctions and policies against Tehran will not resolve the nuclear crisis but rather exacerbate it. Chinese intelligence, military, political, and strategic circles have adopted a strategy of legal consideration versus feasibility. Experts and observers close to Chinese circles argue that Iran’s withdrawal from the NPT is a legitimate legal right for independent states, but Beijing implicitly suggests that such a move could trigger harsher international sanctions against Tehran. Therefore, Beijing is working to (obstruct UN sanctions against Iran). China, along with Russia, has expressed its readiness to block the activation of the snapback mechanism or any harsh international sanctions against Iran in the UN Security Council to protect its interests and regional stability, while adhering to a political settlement. Beijing is calling on all parties to return to the negotiating table and maintain regional and international stability, instead of taking radical and escalatory steps that violate international treaties.

In my analysis, China will insist on referring the Iranian issue to international forums, such as the Security Council, using its veto power to condemn and block any resolutions issued against Iran. Here, China is expected to cooperate with Russia to obstruct any Western or American Security Council resolutions aimed at condemning Iran or imposing new, harsh UN sanctions. China will maintain its commitment to dialogue by continuing to call for a return to the political negotiating table, while publicly acknowledging Tehran’s previous assurances that it is not seeking to produce nuclear weapons. Here, we must understand all the strategic parameters of China’s position regarding the escalation against Iran over its nuclear program through the lens of China’s opposition to nuclear armament. Despite China’s understanding of Iran’s motives and its right to peaceful energy, it categorically rejects Tehran’s move towards acquiring a nuclear military arsenal in order to preserve the stability of the international order and prevent a regional arms race. This is coupled with the desire of relevant circles in Beijing to safeguard their interests. Therefore, Beijing will strive to avoid sliding into a direct confrontation with the West and the United States while continuing to provide Iran with as much economic and diplomatic support as possible in order to alleviate Iran’s isolation.

China supports Tehran diplomatically, emphasizing dialogue and rejecting the unilateral sanctions imposed by Washington. Despite the ongoing pressure, the likelihood of direct war remains low, as a major war of attrition is avoided. China’s position is characterized by its call for diplomatic solutions and dialogue based on mutual respect, its rejection of unilateral US economic sanctions against Iran, and its insistence that all parties address the root causes of the tension and resume the nuclear agreement. This is especially relevant given the Iranian threat to withdraw from the agreement, voiced by several members of the Iranian parliament who believe that remaining in the nuclear non-proliferation treaty is pointless under continued US pressure.  Intelligence, military, political, and strategic circles in Beijing considered the Iranian parliamentary proposal a political response to the tightened US economic sanctions against Tehran. Chinese intelligence circles are well aware that an actual Iranian withdrawal from the Nuclear Non-Proliferation Treaty requires the approval of Iran’s Supreme National Security Council. Should this occur—a slim possibility according to Chinese strategic assessments—it would mean the potential outbreak of a full-scale war. Therefore, strategic assessments in Beijing suggest that the potential confrontation between Washington and Tehran will likely escalate into a protracted war of attrition rather than a full-scale military clash. According to Chinese analyses, both Washington and Tehran prefer economic pressure and the prospect of open negotiations to the option of open warfare. Hence, China seeks to curb any military escalation that could threaten energy security and regional stability.

Accordingly, China supports the continuation of the diplomatic and political track to resolve the Iranian nuclear crisis. It rejects pressures, escalatory policies, and economic sanctions against Tehran, while simultaneously calling for dialogue based on mutual respect and the preservation of regional stability, without supporting any sudden steps that could fuel the conflict. China’s general position stems from its rejection of sanctions. Beijing believes that the policy of maximum pressure and economic sanctions does not resolve the nuclear issue. Therefore, China consistently calls for adherence to dialogue to resolve differences through peaceful political and diplomatic means and to resume negotiations. China also provides strategic support to Iran. In this regard, China stands with Iran in the face of Western and American pressure. China is working alongside Russia to submit draft resolutions to the UN Security Council to support de-escalation, extend the agreement’s framework, address threats of withdrawal, and avoid mutual escalation. China urges all parties to avoid any unilateral steps or escalatory measures, such as triggering the snapback mechanism or mutual withdrawals from international agreements and treaties, which could lead to a loss of control.  Therefore, Beijing prefers to contain this crisis and the Iranian threats to withdraw from the Nuclear Non-Proliferation Treaty through negotiating frameworks that preserve the basic structure of the non-proliferation regime, while holding the United States and European countries partly responsible due to Washington’s previous withdrawal from the same nuclear agreement that Tehran is now threatening to withdraw from.

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. 18 (UPI) — France will expel two Iranian diplomats in retaliation for an attack on a pair of French diplomats in Tehran in July, French Foreign Minister Jean-Noël Barrot said Tuesday.

After first telling a French regional newspaper group of his plans, Barrot confirmed the story with a social media post in which he declared, “I had announced that this intolerable act would be followed by consequences. It has been done.

“Two Iranian diplomats in France will be expelled in the coming days.”

The move deepens the standoff between Paris and Tehran over the July 19 incident, in which France says Iranian agents “deliberately assaulted” and detained without reason two French diplomats in Tehran.

Barrot said the two were questioned for hours and, in one case, “assaulted,” calling the incident “an extremely serious and unacceptable attack on the integrity of our agents [which] cannot go unpunished.”

After the pair returned to France, Iran declared them persona non grata and ineligible to re-enter the country.

On Tuesday, Barrot denounced that decision and followed through with his threat of retaliation while claiming the diplomats were attacked because of France’s support for the Iranian people in their struggle against repression.

“The Iranian people, a great people, are the primary victims of this period of extreme tension in the Middle East, caught in a vise between the bloody repression of the January 2026 protests and the [U.S.-Israeli] bombings,” he wrote.

“It is precisely because France stands alongside the Iranian people, supporting its artists, scientists, and researchers, that two French diplomats were scandalously and deliberately assaulted last July 19.”

The Iranian Foreign Ministry, meanwhile, said the two were banned because they had taken part in a “secret meeting” with suspects of a major case involving “foreign infiltration and interference.​”

The ministry told the semi-official IRNA News Agency the diplomats’ activities were “in violation of international law, especially the Vienna Convention on Diplomatic Relations of 1961.​”

Iran contended the move was made because the French government “has not taken any action to rectify their behavior and guarantee the non-recurrence of such conduct weeks after the disclosure of their illegal behaviors.”

WASHINGTON — Approaching six months of war with Iran after predicting a six-week campaign, President Trump has few options before him to bring the conflict to a close. But some experts believe a new strategy emerging from his administration could avert a more consequential defeat.

The president has repeatedly flirted with broadening the assault, hoping yet another round of bombardment might force Iran to yield. Yet he has ultimately resisted, once again stepping back this month from options to expand strikes across Iran’s critical infrastructure and leadership. And he has refrained since the beginning of the war from ordering a ground operation that would expose U.S. troops to direct attack, faced with dwindling U.S. munitions stockpiles and an entrenched Iranian government willing to retaliate.

The result has been a U.S. campaign that has failed to achieve any of Trump’s stated war aims — of regime change in Tehran, the elimination of Iran’s ballistic missile and naval capabilities, and the end of its nuclear program — but has also avoided the costs of uncontrolled escalation, experts said.

In remarks Friday, Trump said the United States was still in the process of “defeating Iran, which is being very badly defeated.”

“We have the blockade. No ships get through,” he said. “They still have missiles, but not a lot. They still have drones, but just a fraction of what they had. But their manufacturing is largely gone.

“We’re winning big with the Islamic Republic of Iran,” he added. “Nobody has any idea how successful we are — they don’t want to write it. But they know. You know who knows how well we’re doing? Iran.”

In an interview published last week, Trump explained his decision not to proceed with expanded strikes, telling Axios, “we are low-keying it.”

“We are only semi-negotiating with them,” he said. “We are just watching Iran with its huge inflation and the fact they have no money.”

It is a shift from an instinctual posture to one of restraint uncharacteristic of a president who launched the war in February after consulting a mere handful of people, including Israel’s prime minister and fewer than a dozen of his closest aides.

The current approach — an economic choke hold on Iran — is being led by Treasury Secretary Scott Bessent, who was not involved in Trump’s prewar deliberations.

“The options are escalating militarily, conceding Iranian victory through a phony negotiation, or continuing the economic pressure we have in place. The president’s problem is that he can’t simply choose — the ayatollah gets a vote,” said Elliott Abrams, a veteran diplomat who served under Presidents Reagan and George W. Bush, as well as under Trump in his first term.

“Trump has to choose now between sticking to the blockade and the risks it brings — including high oil prices and a loss in the midterm elections — or accepting defeat by Iran and the risks that brings,” he added, “to our friends and allies and to his own reputation.”

White House officials are betting the risks to Tehran, from soaring inflation and a shortage of goods, are greater than the political costs Trump will incur at the ballot box in November during the midterm elections, with oil prices holding stable under $100 a barrel since mid-July.

“We have the ability to accept costs because our resources are great. Iran does not, because theirs are few,” said Barry Posen, a political science professor at MIT.

And while restraint may not end the conflict on Trump’s preferred terms, it could prevent the kind of open-ended escalation that pulled the United States deeper into costly quagmires in Vietnam and Iraq, said Michael O’Hanlon, director of research in the Brookings Institution’s foreign policy program.

“He has resisted that temptation so far,” O’Hanlon said. “In this regard, he is showing greater humanity and greater thoughtfulness than either of those two American presidents during the Vietnam War. And he has avoided the mistakes of George W. Bush in launching big ground wars without adequate planning or preparation.

“It’s troubling, and far from victory,” O’Hanlon added, “but also far from quagmire or defeat.”

Trump’s reluctance to escalate has so far averted a high U.S. casualty count in the war. According to the Pentagon’s Defense Casualty Analysis System, 18 U.S. service members have been killed and hundreds have been wounded since the start of operations against Iran.

But his reticence to deploy additional U.S. troops within striking distance of Tehran — and the need to protect those already stationed across the region — has forced the administration to rely on long-range weapons systems that cost tens of millions of dollars and require complex international supply chains to produce, leading to critical shortages of drones, missiles and defense systems as the conflict continues longer than planned.

“Even limited operations, such as the air wars over Kosovo and Libya, dragged on much longer than policymakers expected, and the U.S. ran short of critical precision guided weapons,” said Stacie Pettyjohn, director of the Defense Program at the Center for a New American Security. “What really differentiates the current situation with Iran is that Tehran can hold U.S. forces in the region at risk with its long-range missiles and drones.”

Karoline Leavitt, the president’s outgoing White House press secretary, said the United States has “more than enough firepower” to carry out any operation the president wishes to order.

But Defense officials acknowledged to The Times that a protracted campaign, and the risk of an escalation that prompts Iran to expand its targeting of U.S. assets and allies in the region, could further stretch weapons systems to dangerously low levels.

A “low-key” campaign will mitigate the threat of dwindling supplies and high casualties, without necessarily providing Trump with a path to victory, said Stephen Biddle, a professor of international and public policy at Columbia University.

“The issue with Iran isn’t how long the war has lasted, though it’s already lasted longer than the Trump administration apparently expected,” Biddle said. “The issue is how we’ll get out of it with our interests intact. The administration has no viable plan for doing that, and none is immediately obvious.”