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US sanctions and China
The United States launched Operation Economic Outcast, described by Treasury Secretary Scott Bessent as an “economic onslaught against Iran’s financial connections around the globe,” while warning that “Any entity that facilitates money laundering on behalf of Iran will be removed from the US dollar system.”
““Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections around the globe,””
China denounced the threat of US sanctions over its trade with Iran, with China’s foreign ministry spokesperson Lin Jian saying, “Cooperation between China and Iran has always been conducted within the framework of international law and should not be interfered with or disrupted.”
The Guardian reported that the US sanctions announcement on Monday included an initial set of sanctions on 60 individuals, entities and vessels for alleged involvement in trade with Iran, and that there were no Chinese financial institutions on the list.
The Guardian also reported that Bessent said, “Why would I want to blow up the global financial system?” when asked why the administration had not declared immediate sanctions and had stopped short of naming potential sanctions targets.
In parallel, Al Jazeera reported that Lin Jian rejected Washington’s expanding pressure campaign and said, “China will take all necessary measures to firmly safeguard its own rights and interests.”
Hormuz, tankers, and talks
The Guardian reported that an oil tanker was reportedly hit on Tuesday by an unidentified projectile at the mouth of the strait of Hormuz, while the United Kingdom Maritime Trade Operations Centre said the crew was safe and no environmental damage was immediately apparent.
The Guardian said only two commercial vessels were reported to have successfully made the transit through the narrow waterway on Monday, and it added that Iran and Oman held talks on Tuesday aimed at agreeing joint management of the waterway.
After those discussions concluded, Oman’s foreign minister Badr al-Busaidi said there were hopes that a temporary agreed route through the strait would be announced soon, and the Guardian reported that a Pakistani delegation also in Tehran left on Tuesday after a day’s talks with Iranian leaders.
Reuters via SWI swissinfo.ch said Iran and Oman discussed a proposal to create a “temporary joint shipping corridor” through the strait and a plan to purge it of mines, and it reported that the British maritime operations authority said a tanker was targeted about nine nautical miles (17 kilometers) northeast of Ash Shisah, Oman.
SWI swissinfo.ch also reported that Pakistan’s military said Islamabad made “great progress” in its latest talks with Tehran, focusing on preventing further escalation and reopening the strait, while Reuters sources said the United States began redeploying staff to some diplomatic missions in the Middle East.
Partners weigh costs
The Washington Post reported that Treasury Secretary Scott Bessent unveiled a sweeping campaign of financial sanctions and diplomatic pressure designed to sever Iran’s remaining links to the global economy, but declined to say which countries would be targeted or when new penalties on Iran’s trading partners would take effect.
““If the US now goes after the Chinese only weeks before [Chinese President] Xi [Jinping] is supposed to arrive in Washington, I find it unlikely,””
Al Jazeera reported that some analysts said threats to sanction Chinese entities over trade with Iran were unlikely to materialise, and it quoted Trita Parsi saying, “If the US now goes after the Chinese only weeks before [Chinese President] Xi [Jinping] is supposed to arrive in Washington, I find it unlikely.”
Al Jazeera also reported that the president of the Iran-China Chamber of Commerce and Industries, Majidreza Hariri, criticised US policies by warning on X that, “What Trump has said makes it clear that he has entered into an economic war with us and considers it a new phase of military and security wars!”
CNBC reported that the US government said China accounted for about 90% of Iran’s oil exports, and it said the US Treasury sanctioned several independent Chinese refiners this year for Iranian oil purchases while sparing Chinese financial institutions.
In a separate framing of the stakes, Democracy Now! reported that Bessent announced “Operation Economic Outcast,” including secondary sanctions on trade related to Iran’s oil, shipping, cryptocurrency, gold and aviation industries, and it quoted Bessent saying, “Why would I want to blow up the global financial system?”