Success of ‘Operation Economic Outcast’ will hinge on China’s cooperation

The Trump administration's latest move to expand its conflict with Iran to economic warfare hinges on China's cooperation. Known as "Operation Economic Outcast," the strategy aims to pressure companies and financial institutions outside the US that do business with Iran. Treasury Secretary Scott Bessent declared the initiative at the Treasury building in Washington, vowing to target entities aiding Iran's revenue generation or sanctions evasion in digital assets, technology, gold, aviation, and shipping sectors.

The US has already sanctioned 60 individuals, companies, and vessels involved in Iran's oil and missile activities. China, Iran's largest crude oil buyer, represents a critical wildcard in the plan. While the US has targeted smaller Chinese firms, it has not imposed broad sanctions on major Chinese banks processing such transactions.

Sanctioning these banks could expose them to secondary sanctions, including loss of access to US financial markets and frozen US-based assets, potentially isolating them from the global financial system. The US plans to call world leaders, including China, to suspend transactions with Iran, while its military and diplomatic branches will pressure foreign counterparts to halt Iran-related activities.

However, some experts question the effectiveness of the sanctions, particularly if the US hesitates to cross the "red line" of antagonizing China's trade relations.