Trump Signals Tougher Economic Pressure on Iran as US Weighs Sanctions on China | Ukraine news

Washington is considering measures that could reach far beyond Tehran, putting Chinese oil firms, banks and regional intermediaries in the crosshairs.

U.S. President Donald Trump said on August 16 that he intends to increase economic pressure on Iran. The day before, Treasury Secretary Scott Bessent announced new measures against Tehran that, he said, the United States could introduce as soon as next week.

The United States, the United Nations, and the European Union have imposed sanctions, trade restrictions, and asset freezes on Iran since the late 1970s. The reasons have included Tehran’s nuclear program, human rights violations, and support for militant groups.

Since the start of the war with Iran in February, Washington has tightened maritime, energy, and financial sanctions and begun a naval blockade. According to the U.S. Treasury Department’s Office of Foreign Assets Control, more than 1,000 people, vessels, and aircraft have been targeted by restrictions since the start of Trump’s second term.

The latest sanctions targeted Iran’s shadow oil fleet, maritime insurance companies, individuals and entities helping Iran purchase weapons, and digital exchanges. As part of these actions, cryptocurrency linked to Iran with an estimated value of $500 billion was frozen.

Sanctions against Chinese independent refineries

One possible U.S. step could be new sanctions against Chinese independent oil refineries, known as “teapots.” These facilities account for roughly a quarter of China’s refining capacity and often operate on slim or even negative margins.

According to Kpler data for 2025, China purchases more than 80% of the oil Iran ships by sea. A significant share of this oil is processed by independent Chinese refineries, making them potential targets for secondary sanctions for assisting an entity already subject to U.S. restrictions.

Previous U.S. sanctions measures forced some major independent Chinese refiners to stop purchasing Iranian oil. At the same time, smaller companies have limited ties to the U.S. financial system, which partially reduces their exposure to risk.

Pressure on Chinese banks

OFAC has already imposed secondary sanctions on small companies in China and Hong Kong accused of handling multibillion-dollar transactions involving Iranian oil sales and facilitating weapons purchases.

The U.S. Treasury Department also warned two larger Chinese banks of possible secondary sanctions if Iranian funds pass through their systems. U.S. officials have not publicly disclosed the names of these banks, and the institutions have not yet been added to sanctions lists.

Restrictions on major banks or other tough financial measures could affect the behavior of a broader range of lending institutions. At the same time, such a step could prompt a response from Beijing.

The Trump administration is seeking to avoid escalating tensions between Washington and Beijing ahead of expected talks between Trump and President Xi Jinping later this year. The United States and its Western allies also depend on China for supplies of critical minerals needed to manufacture advanced technologies while they develop their own supply chains.

New restrictions against intermediaries

The United States may continue imposing sanctions on Iranian individuals and entities, as well as organizations in China and Gulf countries that help Tehran evade restrictions and generate revenue to wage war.

Recently, the U.S. Treasury Department sanctioned companies set up to exchange Iranian oil revenues for imported goods. Brett Erickson, managing director of Obsidian Risk Advisors, believes this approach resembles a constant pursuit of new intermediaries: after restrictions are imposed, Tehran creates other structures to replace them.

Miad Maleki, a sanctions expert at the Foundation for Defense of Democracies, suggested that Bessent’s statement may indicate tighter scrutiny of oil shippers, commodity buyers, and currency intermediaries that help Iran pay for imports.

Additional sanctions in the aviation sector are also possible. Their aim could be to limit Iran’s ability to transport goods after the United States blocked maritime traffic through the Strait of Hormuz.

Possible land blockade of Iran

Some U.S. and Israeli officials have discussed the possibility of a land blockade of Iran. To implement it, Washington would need assistance from countries neighboring Iran:

• Iraq;
• Turkey;
• Pakistan;
• Afghanistan;
• Turkmenistan;
• Azerbaijan;
• Armenia.

The Trump administration maintains varying levels of relations with these countries, with the exception of Afghanistan. At the same time, the Afghan border runs through mountainous terrain that is extremely difficult to control.

Trump may have additional leverage over Pakistan, which recently approached the U.S. Treasury Department regarding a $10 billion currency swap line, and over Turkey, which seeks to return to the U.S. F-35 fighter jet program.

A land blockade could sharply increase pressure on Iran’s population through disruptions to imports of food, energy products, and textiles. However, it would be difficult to implement, and an outcome in the form of protests or internal pressure on Iran’s government is not guaranteed.

Secondary tariffs for Iran’s trading partners

Trump has repeatedly threatened to impose tariffs on goods from countries that do business with Iran. However, the U.S. Supreme Court struck down the legal basis for such tariffs.

Last week, the Senate passed a sweeping sanctions bill against Russia that included new restrictions on Iran. The legislation could also grant Trump additional tariff authority for use against states that assist Iranian trade or weapons procurement.

For the bill to take effect, it must still be approved by the U.S. House of Representatives. Its prospects remain uncertain because Democrats and some Republicans are concerned about the measure’s tariff provisions.

Thus, the Trump administration has a broad range of tools at its disposal – from sanctions on oil exports and banks to attempts to restrict Iran’s overland trade. At the same time, each of these options carries a risk of escalating tensions with China and other countries in the region.