Trump’s ‘economic D-Day’ to strangle Iran’s economy: But first he must take on China
Trump’s ‘economic D-Day’ puts Beijing at the heart of Washington’s new Iran offensive
Dubai: Donald Trump has declared an “economic D-Day” designed to choke off Iran’s remaining financial lifelines. Less than 24 hours later, however, the biggest obstacle to his new strategy is becoming clear: China.
Iran says its current oil exports have collapsed under the US blockade, but China remains central to Washington’s next phase: squeezing Iranian crude already outside the blockade and shutting the financial networks through which Tehran can sell oil and access the proceeds.
If Washington intends to deprive Tehran of virtually every dollar it can earn from oil, it will ultimately have to confront the country that has long been the dominant buyer of Iranian crude.
China purchased more than 80 per cent of Iran’s oil exports in 2025, according to The New York Times, while estimates cited by CNN put its share at roughly 90 per cent.
That makes Beijing the crucial test of Treasury Secretary Scott Bessent’s promise that “no one is above the reach of US sanctions”.
Yet there was one conspicuous omission when Bessent announced the campaign on Monday: He did not name China.
Instead, he said Washington was using “quiet diplomacy” to tell countries what it expected of them.
“We know who they are. They know who they are,” he said.
The caution underscores the dilemma confronting Trump. Crippling Iran economically means threatening secondary sanctions against Chinese companies and financial institutions dealing with Tehran — potentially opening another front in an already difficult relationship with Beijing.
And the timing could hardly be more sensitive.
The China problem in 5 numbers
80%+ — Share of Iran’s oil exports bought by China in 2025, according to The New York Times
90% — China’s approximate share of Iranian exported oil, according to a US commission cited by CNN
1.4m bpd — Chinese imports of Iranian crude before the war
700,000 bpd — Estimated imports in recent months
38% — Share of China’s oil imports that transit the Strait of Hormuz
Why it matters
Iran needs China as its overwhelmingly dominant oil customer. Trump needs China to cooperate if his economic squeeze is to work. But confronting Beijing could reignite US-China tensions just as Xi prepares to visit Washington.
Chinese President Xi Jinping is expected in Washington next month for his first state visit in more than a decade, according to The New York Times.
Trump and Xi already have plenty to argue about, from trade and artificial intelligence to Taiwan and China’s expanding nuclear arsenal. Adding Iranian oil to that list could complicate efforts to stabilise relations.
“This will be tricky,” Peter Harrell, a visiting scholar at Georgetown Law School who has written extensively about sanctions, told the Times.
Earlier this year, Harrell said, Trump effectively faced a choice: Come down hard on Chinese companies purchasing Iranian crude or use military pressure against Iranian oil shipments.
It was politically easier to target the tankers than confront China directly, he said.
Now Washington may have arrived back at the same choice.
China has already cut purchases
There is some breathing room.
China’s imports of Iranian crude have already fallen sharply since the war began.
They averaged around 1.4 million barrels per day before the conflict but have dropped to roughly 700,000 barrels per day in recent months, according to Vortexa data cited by CNN.
Analysts say China could initially cope even if Iranian supplies disappeared entirely because it holds substantial inventories and can source crude elsewhere.
But forcing Beijing to stop buying is another matter.
China has rejected Washington’s latest threat. Foreign Ministry spokesman Lin Jian said sanctions and pressure would not resolve the crisis and would instead lead to further escalation.
The risk for Trump
There is another danger for the White House: A successful squeeze on Iranian oil could push global energy prices higher.
American motorists are already paying an average of about $4.10 a gallon for petrol, compared with $3.15 last year, according to AAA figures cited by CNN.
Iranian and other sanctioned oil also increasingly moves through opaque trading networks and shadow fleets, making enforcement harder.
Ship-tracking platform Kpler estimates shadow traffic recently accounted for around half of Strait of Hormuz transits, compared with about 12.5 per cent a month earlier.
So Trump’s “economic D-Day” ultimately presents Washington with an uncomfortable choice.
It can threaten Iran’s smaller trading partners relatively easily. But choking off Tehran’s biggest remaining source of revenue requires confronting the world’s second-largest economy.
Trump wants to make Iran an economic outcast. Whether he is prepared to risk another showdown with Xi to achieve it may determine whether his latest strategy succeeds.
