Iran war tests Trump's trade truce with China

The United States launched a new economic blockade against Iran, known as "Operation Economic Outcast," as part of its maximum-pressure campaign, according to Treasury Secretary Scott Bessent's announcement on Monday. The strategy aims to isolate Iran further by cutting financial ties and severing economic links. However, the US refrained from imposing immediate penalties on China, a major importer of Iranian oil, which accounted for up to 90% of Iran's shipped oil in 2025.

Despite this, the US emphasized that no country is above its sanctions. China has been providing Iran with materials for missile and drone construction for decades, and bilateral trade between the two nations was valued at nearly $10 billion. The US has also targeted independent Chinese "teapot" refineries, though it hasn't yet targeted major Chinese banks or financial institutions.

Ali Wyne, a senior researcher at the International Crisis Group, expressed doubt about Washington's willingness to confront these major players. Critics, such as Stephen Fallon, founder of DBM Consulting, compared this new campaign to Trump's first maximum-pressure strategy in 2018, which was successful in alienating many western allies.

The current strategy is unfolding amidst a fragile trade truce between the US and China, with concerns that Iran's war is exhausting the US military and depleting its domestic critical minerals supply, a process that could take years to rebuild.