The United Arab Emirates suspended all trade with Iran on Wednesday after suffering another Iranian missile attack, ending a $28 billion relationship that kept Tehran’s sanction-choked economy alive.

Iran launched two ballistic missiles at the UAE on Tuesday — the first Iranian strike in three months. The UAE’s Defense Ministry confirmed its air defense systems intercepted both missiles, one falling outside territorial waters and the second within them.

The UAE Foreign Ministry announced the trade halt Wednesday, citing “regional escalations that undermine regional and international peace and security.”

“The first fell outside the country’s territorial waters, while the second fell within its territorial waters.”

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Foundation for Defense of Democracies senior fellow Miad Maleki said the UAE and China are “Iran’s two economic bloodlines.” If the Emirates follow through, the embargo “will close the one the U.S. Navy couldn’t touch.”

The UAE has been Iran’s number-one import supplier for five consecutive years. Emirati currency markets support 80 percent of Iran’s foreign exchanges for imports — including 40 percent of essential goods like soybeans and industrial machinery.

Dubai served as Iran’s window to the world economy. Most of what Iran labeled “imports from the UAE” were third-party goods — gasoline from India, car parts from China, soybeans from Brazil — all routed through Dubai to evade U.S. sanctions.

Maleki said there’s “no substitute for Dubai” in Iran’s economic strategy. China can’t fill the gap — shipping costs have already skyrocketed due to the Iran crisis, and Beijing can’t match Dubai’s proximity, logistics capacity, or exploitable Iranian diaspora.

“Dubai has been basically Iran’s window to the world economy.”

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The Iranian regime scrambled to contain the fallout. Early Wednesday, Iran’s military reportedly boasted of the strike and warned that “any assistance or facilitation provided to the aggressor U.S. military” could trigger comparable attacks on Persian Gulf countries.

Hours later, Iranian Foreign Ministry spokesman Esmaeil Baqaei frantically claimed the missile attack was a hoax — a “false flag” operation conducted by Iran’s enemies.

Iran’s state-run Islamic Republic News Agency reported Baqaei “expressed regret over unfounded accusations against the Islamic Republic,” claiming such allegations “undermine ongoing efforts to strengthen trust among regional countries.”

He allegedly blamed “continued US and Israeli malign activities” and referenced “the history of multiple alleged false-flag operations in the region.”

The UAE’s presidential adviser Anwar Gargash pushed back Wednesday against claims Abu Dhabi helped Iran evade sanctions.

“Some platforms targeting the UAE are circulating false information about the country,” Gargash said, calling reports of financial facilities provided to Iran “untrue information and part of desperate media campaigns.”

President Donald Trump spoke by phone with UAE President Sheikh Mohamed bin Zayed al Nahyan on Tuesday, according to Emirati media. Secretary of State Marco Rubio also spoke with UAE National Security Advisor Sheikh Tahnoon bin Zayed al Nahyan.

The State Department said Rubio “underscored the importance of freedom of navigation through the Strait of Hormuz” and discussed “U.S.-UAE coordination to hold Iran and its terrorist proxies accountable for ongoing attacks.”

Iran and the UAE are both members of BRICS, the China-led anti-U.S. coalition. The Emirates’ willingness to cut off Iran signals how far Tehran has pushed even its regional neighbors.

The charges remain allegations. The case has not been proven in court.

Air Forces Detected Two Missiles Headed Toward the Country; Both Fell Into the Sea

The UAE Ministry of Defence announced that the UAE's air defence systems detected two ballistic missiles launched from Iran towards the country. The first fell outside the country's territorial… pic.twitter.com/medXz9VoXy

— وزارة الدفاع |MOD UAE (@modgovae) August 18, 2026

The UAE and China are Iran's two economic bloodlines. If UAE is serious about its economic embargo against Iran, then it'll close the one the U.S. Navy couldn't touch.

~80% of Iran's import FX is procured through Dubai's dirham market. ~40% of essential-goods FX settles inside… pic.twitter.com/UOFaQVAA5h

— Miad Maleki (@miadmaleki) August 19, 2026