Iran war tests Trump's trade truce with China

Washington has initiated a fresh campaign targeting Iran's economy, dubbed "Operation Economic Outcast," while sidelining a key player—China. Treasury Secretary Scott Bessent called upon other nations to sever financial ties with Iran, emphasizing the choice between prosperity and isolation. With naval blockades failing to reopen the Strait of Hormuz, the US now seeks to pressure global partners to cripple Iran's economy further.

The US is expanding secondary sanctions to discourage foreign companies from engaging with Iran, threatening to cut them off from the dollar-based financial system. However, China, responsible for up to 90% of Iran's shipped oil in 2025, remains a potential exception to these sanctions. The US has placed sanctions on Chinese "teapot" refineries but has yet to target major Chinese banks or financial institutions.

While bilateral trade between Iran and China is valued at nearly $10 billion, the US has not yet imposed severe penalties on China. Analysts question the US's commitment to sustaining support from western allies, with many reportedly alienated by the administration. This campaign comes amid a fragile trade truce between the US and China, with China providing Iran with materials for missile and drone construction.

The US administration is now seeking diplomatic solutions and exploring private sector projects related to rare-earth minerals and other critical metals. The Iran war is reportedly depleting the US's military stockpile, which could take years to rebuild.