Countries brush off new US threats, keep doing business with Iran — Bloomberg
US Treasury Secretary Scott Bessent (photo: Getty Images)
Partner countries of Iran are largely ignoring US threats of new, tougher sanctions. Washington's attempt to launch an "economic onslaught" has proven ineffective due to the position of China and the reluctance of allies to sever trade ties, according to Bloomberg.
What went wrong with US plan
The outlet says US Treasury Secretary Scott Bessent announced the start of a tough economic campaign against Tehran aimed at ending the war, comparing the plan to the historic 1944 D-Day landings in Normandy.
However, key regional players have effectively ignored Washington's warnings:
- Iranian banks, including Bank Melli, continue to operate as usual through their branches in the United Arab Emirates
- Commercial flights between Iran, Türkiye, the UAE, Azerbaijan, Russia and China continue without changes
- Pakistan said it is not obligated to comply with unilateral US restrictions and continues its overland trade.
At the end of the week, the United States announced plans to impose restrictions on branches of Egypt's Banque Misr in the UAE, but analysts consider such measures too weak.
"As the war passes the six-month mark, the public actions taken by the Treasury Department this week do not match the hype," said former US Treasury official Alex Zerden.
China as main obstacle
The main dilemma for the US administration remains Beijing's stance.
Any effective sanctions campaign would have to target China, which currently buys 90% of Iranian oil. However, Beijing has already issued a defiant warning to Washington and has no intention of backing away from trade with Tehran.
Trying to pressure Chinese financial institutions could trigger powerful retaliatory measures and risk undermining the global financial system as a whole.
"You can't unleash meaningful economic warfare on Iran while ignoring the one country that absorbs 90% of its oil exports," said Leland Miller, CEO of China Beige Book.
Experts are convinced that an attempt to knock out Iran through unilateral restrictions will not work.
"The idea Iran can be knocked out with this is risible—it's not going to move the needle. There are too many actors, and it's too rewarding for the people involved," Stephen Fallon, principal adviser at DBM Consulting, said.
US sanctions pressure on Iran
As previously reported, at the end of the week the United States announced plans to impose sanctions on branches of Egypt's Banque Misr in the UAE.
The United States considers the financial institution a longtime intermediary for the Iranian regime and plans to restrict its access to correspondent banking relationships with US banks.
In addition, US Treasury Secretary Scott Bessent announced unprecedented measures and an economic offensive against Tehran in mid-August, comparing the planned operation to the historic Normandy landings.
