Iran vows retaliation as US imposes 'greatest financial offensive' sanctions

Iran has vowed to retaliate against any country that cooperates with the United States' new sanctions, a move described by U.S. Treasury Secretary Scott Bessent as "the single greatest financial offensive ever marshalled against an adversary."

In a significant development preceding the U.S. announcement, the United Arab Emirates, Iran's largest trading partner in the Middle East, declared an end to all trade with Iran. Tehran views this action as a coordinated effort between Washington and Dubai.

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the single greatest financial offensive ever marshalled against an adversary

The U.S. has stated it will impose secondary sanctions on any country or entity trading with Iran. The effectiveness of this threat will likely depend on whether major economies like India, China, and Russia perceive credible U.S. reprisals against their own economies.

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China opposed unilateral sanctions that lacked basis in international law and China believed that military means, sanctions and pressure tactics were not the solution.

China, a long-time importer of Iranian oil, has previously resisted U.S. pressure. In May, the U.S. threatened sanctions against Chinese refiners and their banks, but China's commerce department directed firms to ignore these warnings, deeming them illegitimate and invoking a statute to render U.S. sanctions ineffective within Chinese jurisdictions. The U.S. had previously sanctioned Hengli Petrochemical but largely retreated when Donald Trump recognized the risk of a wider trade war that the U.S. might lose.

This time, China's foreign ministry spokesperson, Lin Jian, reiterated China's opposition to unilateral sanctions lacking international legal basis, stating that military means, sanctions, and pressure tactics are not solutions. However, Iran's oil shipments to Asia have already dwindled to almost nothing due to a U.S. naval blockade, pushing cargo costs to multi-year highs. Iran's central bank governor, Abdolnaser Hemmati, acknowledged that crude exports have "virtually stopped."

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virtually stopped

The White House believes Iran's economy is nearing collapse due to hyperinflation and a lack of foreign exchange, a direct result of the U.S. blockade on oil exports. The Iranian rial has depreciated significantly against the dollar. Despite over two decades of U.S. economic pressure, Iran has endured. Iran's security chief, Mohsen Rezaei, warned of an "earthquake-like" retaliation if the proposed measures proceed and cautioned Iran's Gulf neighbors against joining the U.S. sanctions campaign.

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earthquake-like