President Donald Trump has stopped firing missiles at Iran — but he’s just launched the most aggressive economic assault on the regime yet. Treasury Secretary Scott Bessent is rolling out what he calls “economic D-Day” for Iran: a sweeping sanctions regime targeting not Tehran itself, but every nation still doing business with the dictatorship.
The stakes are massive. China, the EU, Turkey, Iraq — if they keep trading with Iran, their banks lose access to the U.S. financial system.
It’s a move so obvious observers are asking why it didn’t happen on Liberation Day. The answer: what Bessent is demanding is enormous.
“Their banks can either trade with the Iranians or bank with America.”
The top target is China. Before Trump’s military operation, Beijing was importing around 1.5 million barrels of Iranian oil per day — accounting for 90% of Iran’s exports. Even after the fighting forced supply chains overland, China still imported 823,000 barrels per day in July, according to Kpler data.
Bessent’s operation strikes at the heart of China’s oil arbitrage. The Chinese Communist Party buys Iranian crude at massive discounts and funnels it to Shandong’s teapot refineries. Now the Treasury is telling Beijing: stop, or your banks can’t touch dollars.
Turkey is another key target. Ankara has imported 13% of its natural gas from Iran. The United Arab Emirates has already suspended economic ties to the regime. But Iraq has persisted with $12 billion in annual trade with Tehran.
Then there’s the European Union. The bloc still traded billions with Iran last year — even as the U.S. foots the bill to defend Ukraine.
The ultimatum is binary: send a single dollar to Tehran, and your banks lose access to America’s financial system. The implications are spectacular.
Iran’s Banks Still Operate in Paris, Venice, London
Consider Bank Saderat Iran. The Treasury has sanctioned it for 20 years and designated it a terrorism sponsor for nearly 19 years. Yet the bank still operates branches in Paris, Venice, and London.
The Taliban allows Bank Saderat to keep two branches in Kabul. But NATO allies?
Operation Economic Outcast expects France and Italy to close those branches immediately. If they don’t, any entity enabling Saderat’s operations — other French banks, companies, clearing houses — could face secondary sanctions from the U.S. government.
The Treasury will not sanction foreign governments directly. But the White House expects full compliance and intelligence-sharing to ensure “zero leakage.”
The biggest unknown: what happens after the “cure period” Bessent is allowing before enforcement kicks in.
It’s easy to imagine Europeans and Gulf allies falling in line. The United Kingdom, Japan, and Bahrain have already voiced support. Germany revoked Saderat’s licenses after Trump tore up the Iran nuclear deal in 2025. Bessent expects such institutions to be “shuttered and dark.”
But will China play ball?
“The CCP officially says it does not recognize the sanctions threat as legitimate.”
Beijing won’t have much fiscal margin to chase out its last real reservoir of discounted oil. But if the administration enforces as seriously as it sounds, it could suffocate Iran without firing another shot.
The timeline is not fixed. Individual deadlines for countries vary. But Treasury should be announcing enforcement starting this month, with talks coming to a head during Miami’s Group of 20 meeting later this year.
The regime’s grasp on the Strait of Hormuz may be loosening — but its control is unraveling at home. Islamic Revolutionary Guard Corps operatives responsible for population control are going increasingly unpaid. The rial has plummeted to new all-time lows. Oil exports have fallen from 1.85 million barrels per day at the start of the war to 248,000 barrels per day now.
If Trump lets Treasury take its mandate seriously, the power of the U.S. dollar could finish the job.
