Iran’s trade partners face pressure as US announces new economic offensive

The United States has declared that a new financial offensive, described as the single greatest of its kind, is intended to support the ongoing war effort alongside Israel against Iran. Washington has characterised the move as an economic D-Day, aiming to cut off revenue streams for the Iranian regime. However, Tehran has stated that it is fully prepared to counter the widened sanctions. Many economists argue that the impact of this latest measure will be limited, noting that Iran has faced near continuous US economic pressure since the Islamic Revolution of 1979. During this period, the country has developed deep trade ties with several nations that either ignore US economic pressure or cannot afford to cease trading with Iran.

China remains the largest buyer of Iranian goods, accounting for 26.9 per cent of its exports in 2025, according to data from the International Trade Centre. This figure is derived from a subsidiary of the United Nations and the World Trade Organisation. There are caveats to this data, which covers the period before the current conflict began. Several economists believe that Iranian oil sales, particularly to China, were underreported for political reasons. Additionally, the International Trade Centre relies mostly on import numbers reported by trading partners due to difficulties in obtaining up-to-date export data from Iran. Import data for some partners, such as Iraq, is also incomplete. Despite these limitations, China’s response to the US announcement was firm. Beijing stated that it is opposed to what it called illegal unilateral sanctions, arguing that economic pressure will not resolve problems and that it will safeguard its own interests.

Turkey presents a more complex situation as a large trading partner with a friendlier relationship with the United States than China. The US has threatened to punish those who continue to trade with Iran, placing Turkey in a challenging position. Economists point out that Turkey cannot stop trading with its neighbour without significant damage to its own economy, which is already struggling with inflation running at 31.8 per cent. As the only member of the North Atlantic Treaty Organisation to share a border with Iran, Turkey must balance its relationship with military allies against maintaining ties with a close economic neighbour.

Pakistan also borders Iran and is one of its biggest export partners. However, unlike Turkey, Pakistan’s top export partner is the United States, meaning it has more to lose from any economic punishment imposed by Washington. The country is also a key mediator in peace talks between the US and Iran, so a breakdown in relations with either side could complicate finding a solution to the conflict. A further complicating factor is that not all trade is within the government’s control. Evidence suggests that oil is being smuggled across the border by bikers, some as young as 15. This practice, which existed before the war, has reportedly increased since the conflict began. Although US and Pakistani oil firms have pressured the government to clamp down on smuggling, it has struggled to police remote parts of the 900km border. The Iranian government did not respond to requests for comment on allegations of involvement in fuel smuggling.

Armenia is another major trading partner, with its top export partner being Russia, which accounts for 34.9 per cent of all goods sold by Armenia in 2025. This is notable given that Russia has faced sanctions from the US and its allies since its full-scale invasion of Ukraine in 2022. This suggests Armenia may be willing to continue trading with Iran despite mounting US pressure. US Treasury Secretary Scott Bessent said the sanctions will tighten the noose and block every potential source of revenue. However, advisory firm Oxford Economics said the direct impact on Iran’s revenues would be somewhat of a damp squib. Ali Vaez, deputy director at the International Crisis Group, noted that anything moving in Iran has already been sanctioned by multiple layers of measures. He questioned whether the US has the capacity to impose fines on countries that continue to trade with Iran, noting that the US started an economic war with China last year but backed out of it.

Former senior advisor at the state department Aya Ibrahim said the US’s overreliance on sanctions incentivises countries to find ways around the system. She also raised concerns that the measures may have the biggest effect on people rather than economies, as they deny individuals necessities to stay alive. Global markets have had a muted response to the announcement. Global oil prices fell following the news but remain far higher than pre-war levels. Stock traders were even less moved, with major indexes in the US, Europe, and Asia barely shifting. The US still has a way to go before it convinces economists, investors, and the nations trading with Iran that its sanctions threat is to be taken seriously.