Trump’s Upcoming Economic Threat to Iran and the Options Under Consideration

President Donald Trump is set to announce on Aug 14 that he will intensify economic pressure on Iran, following Treasury Secretary Scott Bessent’s indication that Washington will roll out “never-before-seen” measures as early as the following week. The United States, together with the United Nations and the European Union, has maintained a sanctions regime against Tehran since the late 1970s, targeting its nuclear program, human-rights record and support for militant groups. Since the start of the Iran-U.S. conflict in February, the administration has added maritime, energy and financial sanctions and instituted a naval blockade of the Strait of Hormuz.

The Straits Times

The Treasury Department’s Office of Foreign Assets Control (OFAC) reports that more than 1,000 individuals, vessels and aircraft have been sanctioned since President Trump began his second term. Recent actions have focused on Iran’s covert oil fleet, maritime insurers, digital-currency platforms and entities facilitating weapons procurement, collectively freezing an estimated US $500 billion in Iran-linked cryptocurrency. The Senate recently passed a comprehensive Russia sanctions bill that includes new Iran sanctions and would grant the president additional tariff authority, though the measure still requires House approval.

The IndependentThe Straits Times

• Targeting Chinese “teapot” refiners – Independent Chinese refineries that process roughly 25 % of China’s refining capacity handle more than 80 % of Iran’s exported oil, according to analytics firm Kpler. Sanctioning these refiners could disrupt Iran’s oil revenue, though their limited exposure to the U.S. financial system may blunt impact.

The Independent

• Secondary sanctions on Chinese banks – OFAC has already sanctioned smaller China- and Hong Kong-based entities for processing Iranian oil funds. Treasury officials have warned two larger, unnamed Chinese banks that they could face secondary sanctions if Iranian transactions are detected.

The Straits Times

• Aviation and land-based measures – Officials have floated additional aviation sanctions to hinder Iran’s trade routes and a possible land blockade that would require cooperation from neighboring states such as Iraq, Turkey, Pakistan, Afghanistan, Turkmenistan, Azerbaijan and Armenia.

The Independent

• Secondary tariffs – The president could invoke newly-granted tariff powers to levy duties on goods from countries that continue to do business with Iran, though the Supreme Court previously struck down the legal basis for such taxes.

The Straits Times

Treasury Secretary Bessent signaled a sharpened enforcement push against oil shippers, purchasers and currency exchangers that facilitate Iran’s imports. Miad Maleki of the Foundation for Defense of Democracies interpreted the signal as a move to curb Iran’s ability to fund its war effort. By contrast, Brett Erickson, managing principal of Obsidian Risk Advisors, described the “whack-a-mole” approach of repeatedly sanctioning new entities as ineffective, noting that Tehran quickly creates replacements. Analysts also caution that aggressive measures against Chinese banks or refiners could provoke retaliatory actions from Beijing, potentially complicating U.S. strategic interests in the region.

The Independent