US sanctions plan puts China's Iran oil ties in crosshairs

August 25, 2026 (MLN): The united states has rolled out a sweeping new sanctions initiative aimed at cutting Iran off from the global financial system, warning that any country or entity facilitating Tehran's oil trade, banking, or shipping activities could be targeted with secondary sanctions.

Treasury Secretary Scott Bessent unveiled the scheme, branded "Operation Economic Outcast," at a press briefing in Washington, describing it as a coordinated effort to dismantle Iran's financial connections worldwide, according to CNBC.

President Donald Trump was said to be personally calling foreign leaders to press them to cut economic ties with Tehran.

Rather than imposing sanctions immediately, the US will first issue individual countries with timelines to wind down specific activities that have been flagged, Treasury Secretary Bessent said.

He warned that any entity found to be laundering money on Iran's behalf would be cut off from the US dollar system once the deadlines lapse.

The announcement immediately raised questions over whether Washington would extend the crackdown to China, which remains Iran's largest trading partner and top oil buyer.

Ties between Washington and Beijing have been on relatively stable footing in recent months following a bruising trade war last year, with President Trump and Chinese President Xi Jinping having held a high-profile summit in Beijing in May and a follow-up meeting planned in Washington for late September.

Treasury Secretary Bessent indicated Beijing would not be spared, stating that no party is beyond the reach of US sanctions.

Pressed on whether Chinese banks could be targeted, he said any institution found to be part of the network converting Iranian oil into revenue for the regime would face consequences, regardless of its origin.

The sanctions push comes as the US military campaign against Iran nears the six-month mark without a clear resolution in sight.

A fragile ceasefire brokered in June had largely broken down even before its 60-day window lapsed last week, while the Strait of Hormuz continues to offer Tehran leverage, with traffic through the vital oil corridor still well below pre-war levels.

US strikes against Iranian targets have reportedly slowed in recent weeks amid speculation that American weapons stockpiles have thinned.

Treasury Secretary Bessent said the objective going forward is to sever every economic channel sustaining the Iranian government until it is left without external support.

Those considered enablers, he said, include buyers and transporters of Iranian oil, financial facilitators, and parties permitting Iranian flights or seaborne transfers. The Treasury is also broadening its sanctions net to cover participants in Iran's digital assets, technology, gold, aviation, and shipping sectors.

The plan's scope has renewed scrutiny over China's exposure, given its position as Iran's largest oil customer, with suggestions that Chinese firms could become a focal point of enforcement even as both governments prepare for President Xi's scheduled visit to Washington next month.

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