Trump's threat of economic consequences: who will it affect and is it credible?

US President Donald Trump has threatened "economic consequences" for nations that engage with Iran, focusing on Asia and the Middle East. In a message on Truth Social, he demanded an end to financial support to Iran, including oil smuggling, swap lines, cash transfers, exchange houses, ship registries, and front companies. The US administration plans to implement the "most crushing economic operation" against Iran, targeting the nation with economic warfare and isolation. However, there are no details on the specific measures that will be taken.

Aathira Prasad, director of macroeconomics at Nasser Saidi and Associates, noted that the threat is aimed at compelling global players like China, India, and Middle Eastern nations to choose between trade links with Iran and access to the US market. This could increase pressure on Iran's export revenues, excluding oil. China and Iraq were Iran's top trading partners last year, accounting for $14.5 billion and $10.5 billion in trade, respectively.

The UAE has stopped all trade, commercial exchange, and financial transactions with Iran due to the threat. This comes after Iran fired missiles at the UAE, one of which landed in Emirati territorial waters. Iran's central bank chief stated that the country is currently not exporting oil, facing severe restrictions due to US economic pressure.

The threat is not the first from the Trump administration, who has been using economic measures to isolate Iran, although the implementation of these measures has been challenging, facing legal hurdles and potential risks to US inflation.