Trump’s ‘economic D-Day’ to strangle Iran’s economy: But first he must take on China

On the first day of Donald Trump's "economic D-Day" strategy targeting Iran's economy, the White House declared its intention to choke off Iran's financial resources. However, a major hurdle has emerged in this new approach: China. Despite Iran experiencing a collapse in oil exports due to the U.S. blockade, China continues to play a crucial role in Washington's next phase of the plan.

This involves tightening the financial networks that allow Iran to sell oil and access the earnings. If the U.S. aims to deprive Tehran of virtually all revenue generated from oil, it must confront China, the dominant buyer of Iranian crude. Iran's oil exports are primarily sold to China, accounting for over 80% of the country's oil exports in 2025, according to The New York Times, and around 90% as per CNN estimates.

As such, Beijing has become the critical test of Treasury Secretary Scott Bessent's promise that "no one is above the reach of U.S. sanctions." When Treasury Secretary Bessent announced the campaign on Monday, China was noticeably absent from the list of targeted nations, as he only mentioned "quiet diplomacy" being used to communicate expectations to various countries.

This omission highlights the conundrum Washington faces. By crippling Iran economically, the U.S. risks triggering secondary sanctions against Chinese entities, potentially escalating an already tense relationship with Beijing. Moreover, the timing of this challenge is particularly sensitive, as Chinese President Xi Jinping is scheduled to visit Washington next month for his first official state visit in over a decade.

Given the existing areas of contention between the two nations, including trade, artificial intelligence, Taiwan, and China's expanding nuclear arsenal, adding Iranian oil to this list could further complicate efforts to stabilize relations. This presents a dilemma for Trump, who desires to make Iran an economic outcast but is uncertain if he is prepared to risk a new confrontation with Xi to achieve this goal.