Could Korea get caught in the crossfire of new US sanctions targeting Iran?

South Korea has begun assessing the potential impact of the United States' new sanctions on Iran, dubbed "Operation Economic Outcast," on its businesses and financial institutions. Treasury Secretary Scott Bessent announced the operation, targeting countries dealing with Iran in digital assets, technology, gold, aviation, and shipping.

South Korean officials stated that the country is closely monitoring the situation and will examine the effects on related agencies. The sanctions, announced in response to Iran's withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in 2018 and the subsequent end of an exemption for South Korean oil imports, have already reduced South Korea-Iran trade to around US$150 million, down from US$17.4 billion in 2011.

While most South Korean companies have exited Iran, some food and pharmaceutical items still pass through. Analysts warn that the sanctions could lead to unintended consequences, such as pressure on South Korea to participate in the US-North Korea dialogue or increased demands for military support. If China, which is a major importer of Iranian crude oil, is not targeted by the US sanctions, the impact on Iran may be limited.

However, targeting Chinese companies could trigger a global economic response. China's Foreign Ministry spokesperson, Lin Jian, vowed to safeguard its rights and interests, expressing opposition to unilateral sanctions without international legal backing. As the US seeks a deal with Chinese President Xi Jinping, the world watches to see if Trump is willing to risk conflict with Beijing over Iran.