Source: Fortune.com
Summary
Treasury Secretary Scott Bessent announced that the US is preparing to impose unprecedented economic pressure on Iran, despite the country already being subject to a naval blockade and thousands of sanctions. Critics are skeptical about the effectiveness of new measures, given the limited options available. The US could target China’s ties with Iran, exchange houses, Iran’s trading partners, overseas assets, or the shadow fleet, but each option carries risks of blowback on the US economy.
Our Reading
The numbers tell one story. The US has already sanctioned some Chinese teapot refineries and firms, but has stopped short of targeting major Chinese banks. Hitting Chinese companies or financial institutions risks worsening tensions with Beijing. The US could also target exchange houses, but Iran has built alternative channels to move money outside the formal financial system. The strategy enters a familiar phase, where the US tries to squeeze Iran, but Iran finds ways to adapt.
The announcement sounds familiar. The US has already floated the idea of secondary sanctions on entities doing business with Iran, but hasn’t followed through. The US could confiscate Iranian government assets, but the pool of assets within US reach may be limited. The US may also target the shadow fleet, but this would require a comprehensive effort.
The strategy enters a familiar phase. The US tries to squeeze Iran, but Iran finds ways to adapt. The US may need to choose between prioritizing the Iran threat over other issues, like China.
Author: Evan Null
