Trump Threatens ‘Tremendous Economic Consequences’ for Countries Trading
with Iran
President Trump appeared to suggest that
the United States would impose economic penalties on countries that do business
with Iran, though he did not specify what actions he would take.
·
Trump’s warning: President Donald Trump
threatened severe economic consequences for countries doing business with Iran,
apparently seeking to further isolate Tehran and force it toward negotiations.
·
Possible oil sanctions: Though
no details were given, the threat could target countries purchasing Iranian
oil.
·
China most exposed: China is
Iran’s largest trading partner and the main buyer of its oil, reportedly
purchasing up to 90% of Iran’s oil exports.
·
Limited impact on China: Experts
believe China could replace Iranian oil with supplies from other producers,
reducing the economic impact of potential U.S. measures.
·
China’s strategic interest: Beijing
values its relationship with Iran largely for geopolitical reasons, including
maintaining a counterweight to U.S. influence.
·
India’s trade sharply reduced:
India-Iran bilateral trade fell to $1.63 billion in FY 2025-26, from
over $17 billion in 2018-19.
·
India resumed Iranian oil imports: After a
U.S. Treasury waiver in April allowed purchases to ease war-related energy
disruptions, India imported Iranian crude again for the first time in seven
years.
·
UAE under pressure: The UAE
announced a halt to trade and financial transactions with Iran. Iran-UAE trade
was worth around $28 billion in 2024.
·
Turkey and Pakistan vulnerable: Both
maintain significant trade with Iran and have strong political and geopolitical
incentives to preserve relations with Tehran.
·
Iraq exposed: Iraq could also face U.S.
pressure because of its continued economic links with Iran and existing
Iran-related sanctions.
·
Sanctions difficult to enforce: Analysts
say extending U.S. sanctions to Iran’s trading partners would be slow,
uneven and difficult to monitor.
·
Effectiveness uncertain: Greater
economic pressure may not necessarily produce the political concessions from
Iran that Trump is seeking.
President
Trump has threatened “tremendous economic consequences” on any nation that does
business with Iran, without offering details. The threat appeared to be his latest
effort to isolate the country from the global economy and pressure its leadership
into negotiating an end to the war.
The
United States has already imposed debilitating sanctions on Iran’s economy and its
leadership, and the Trump administration has previously sanctioned certain foreign
businesses and organizations that trade with Tehran. Mr. Trump’s vaguely worded
social media post on Wednesday seemed to suggest that he could target nations that
buy Iranian oil, without naming any.
The
president has, on occasion, backed down from such threats. Foreign Minister Abbas
Araghchi of Iran dismissed his latest warning, calling it “a diversion” from America’s
own crises.
If
Mr. Trump follows through, these are some of the countries that could be most affected:
China
China
is Iran’s largest trading partner and the primary consumer of its oil, according
to recent analysis by the U.S.-China Economic and Security Review Commission, a
group founded by Congress to examine America’s bilateral ties to China.
For
years, China has been practically alone in its willingness to defy Western sanctions
on Iranian oil, buying up to as much as 90 percent of Tehran’s oil exports. In recent
months, however, Iran’s ability to ship oil by sea has been all but cut off by a
U.S. naval blockade.
Last
year, China estimated its bilateral trade with Iran to be worth nearly $10 billion,
a figure that doesn’t include oil.
But
from a Chinese perspective, that is a drop in the ocean compared to the size of
its overall economy, said William Figueroa, an expert in Chinese-Iranian relations
at the University of Groningen in the Netherlands. “It wouldn’t be catastrophic
for China if it was to have its trade or its ability to import Iranian oil impacted,”
he said.
The
biggest advantage Beijing draws from that trade relationship is geopolitical, said
Andrea Ghiselli, a political scientist who specializes in China at the University
of Exeter in England. Beijing has some interest in preserving the Iranian regime
as a thorn in the side of the United States, he said.
Dr.
Ghiselli described the share of oil that China imports from Iran as marginal, and
said that “it can easily be swapped out” for other sources on the global market.
In
response to a question on Thursday about the possible effects of coercive U.S. economic
measures, the Chinese foreign ministry’s spokesman, Lin Jian, called for all parties
to resolve their differences through diplomatic channels.
“Sanctions
and pressure will not help solve the problem,” he said.
India
Iran
was once India’s most important energy supplier. But U.S. sanctions have pushed
New Delhi to reduce ties, and the value of trade between the two countries has shrunk
dramatically in recent years, according to official data from the Indian embassy
in Iran.
The
data estimates that in the 2025-26 financial year, total bilateral trade was $1.63
billion, down sharply from over $17 billion in 2018-19.
In
2019, India stopped buying Iranian oil altogether, under pressure from Mr. Trump.
In the last financial year, Indian officials said the country mainly imported apples,
pistachios, dates and kiwis from Iran.
But
in April, after the U.S. Treasury issued a 60-day waiver authorizing countries like
India to purchase Iranian oil to alleviate war-driven supply disruptions and soaring
energy prices, crude from Iran officially returned to India for the first time in
seven years.
United Arab Emirates,
Iraq, Turkey and Pakistan
These
four Iranian trading partners also appear vulnerable to Mr. Trump’s threat, said
Esfandyar Batmanghelidj, chief executive of the Bourse & Bazaar Foundation,
a London-based think tank focused on Iran’s economy.
On
Wednesday, the United Arab Emirates appeared to pre-empt the president’s
comments by announcing a halt to all trade and financial transactions with Iran.
According to data from the World Trade Organization, Iranian-Emirati trade was worth
roughly $28 billion in 2024. The Emirati decision could affect the ability of Iranian
importers to pay for goods, as a lot of those financial services are provided through
the U.A.E., Mr. Batmanghelidj said.
Pakistan
and Turkey have so far been relatively shielded from U.S. economic measures against
Tehran, even as they have continued significant overland trade with Iran, Mr. Batmanghelidj said.
In
2022, the latest year for which World Trade Organization data was available, Iran
imported more than $11 billion worth of goods from Turkey, its third largest source
of imports that year.
For
both Pakistan and Turkey, “it is politically and geopolitically very important that
both these countries maintain a good relationship with Iran,” said Mr. Batmanghelidj. “And I think this is where the Trump administration
is really going to struggle.”
Burcu
Ozcelik, a researcher at the Royal United Services Institute
research group in London, said Iraq was also vulnerable to U.S. economic pressure
because of its continued trade with Iran. American sanctions have already
targeted Iranian-linked groups in Iraq.
But
Dr. Ozcelik said that broader sanctions on Iran’s trading
partners would be far more complicated to impose, and that implementing them “will
be slow, uneven and difficult to monitor.” It was far from clear, she added, that
“greater pressure would produce the political behavior
Trump is seeking.”