Trump’s ‘Economic D-Day’ Against Iran Risks U.S. Ties With China — SkimNews
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- Treasury Secretary Scott Bessent launched 'Operation Economic Outcast' in late August, an 'economic D-Day' campaign to 'asphyxiate' Iran's economy, designating nearly 60 entities, individuals, and vessels — including many in China and Hong Kong.
- China buys more than 90 percent of Iran's oil, providing Tehran with foreign currency, finished goods, and infrastructure investment, making it functionally impossible to strangle Iran's economy without targeting Chinese refiners, terminals, shippers, and clearing banks.
- Bessent estimated Iran has only 30 million barrels of oil left outside the US naval blockade of the Strait of Hormuz to sell to China, though the source notes these projections may understate remaining supply given his goal of calming markets.
- The August sanctions spared significant Chinese banking institutions and smaller teapot refineries, prompting former State Department official Daniel Fried to observe: 'The rhetoric was ferocious, but the punch less so.'
- In May, Beijing for the first time barred Chinese firms from complying with US sanctions on Chinese teapot refiners over their Iran ties — a move the source says likely contributed to Washington imposing tamer sanctions than expected.
- Xi Jinping is set to arrive in Washington Wednesday for the next round of US-China trade talks Thursday, just over a month before US midterm elections, with the Iran sanctions campaign now injecting new friction.
- Iran's enforcement of its Strait of Hormuz blockade and Houthi and Iran-aligned militia attacks on Saudi East-West pipeline and Red Sea port routes have driven diesel and crude transportation prices sharply higher, straining US consumers, businesses, and government borrowing costs.
Why it matters: With diesel prices surging from disrupted oil flows and US borrowing costs already rising, Washington faces a choice between accepting a toothless sanctions campaign that spares China or escalating against larger Chinese banks and triggering a trade war that compounds global economic damage just weeks before midterm elections.
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