Washington Signals an Escalation Unlike Any Before
The Trump administration is preparing a new wave of economic measures against Iran that Treasury Secretary Scott Bessent described as unlike anything that has "never been seen," with an announcement expected as early as next week [1]. President Trump reinforced that message on Friday, vowing to hit Tehran hard economically at a moment when the two countries are already at war — a conflict that began in February — and the United States has imposed a naval blockade of the Strait of Hormuz [4].
The pressure campaign is not starting from zero. Since the late 1970s, the United States, United Nations and European Union have collectively applied sanctions, trade embargoes and asset freezes over Iran's nuclear program, human rights record and support for militant groups [1]. Since Trump's second term began, the Treasury Department's Office of Foreign Assets Control (OFAC) has sanctioned more than 1,000 people, vessels and aircraft, with recent actions targeting Iran's shadow oil fleet, shipping insurers, weapons-acquisition networks and cryptocurrency exchanges — freezing an estimated $500 billion in Iran-linked digital assets [4].
So what escalation tools remain? Sanctions experts and policy analysts point to several distinct options, each carrying its own risks and limitations.
Squeezing China's Oil Buyers
Iran's oil revenue depends overwhelmingly on one customer. China purchases more than 80% of Iran's shipped crude, according to 2025 data from analytics firm Kpler, and a significant share of that volume flows through Chinese independent refineries — known in the industry as "teapots" — which account for roughly a quarter of China's total refining capacity [1].
These refiners are exposed to secondary sanctions, the legal mechanism that penalizes third-country entities for doing business with a primary sanctions target. Past U.S. designations have pushed larger independent refiners away from Iranian crude. But the teapots present a harder target: they operate on razor-thin or sometimes negative profit margins and have minimal exposure to the U.S. financial system, which blunts the leverage Washington can apply [4].
The more consequential pressure point may be China's major banks. OFAC has already sanctioned smaller China- and Hong Kong-based entities accused of processing billions of dollars in Iranian oil payments and funding weapons procurement [1]. Treasury has privately warned two larger Chinese banks — whose names U.S. officials have not publicly disclosed — that they could face secondary sanctions if Iranian funds are found moving through their systems, but has stopped short of formally designating them [4].
Sanctioning those institutions could send a chilling signal through the broader Chinese financial system. But experts caution it could also provoke Beijing's retaliation at a sensitive moment: Trump administration officials are managing tensions ahead of an anticipated meeting between Trump and President Xi Jinping, and Washington remains concerned that China could restrict exports of critical minerals essential to advanced technology production [1].
The 'Whack-a-Mole' Problem
A persistent frustration for U.S. policymakers is the adaptability of Iran's sanctions-evasion networks. Treasury has repeatedly designated firms that spring up to convert Iran's oil revenues into imports — only to watch Tehran reconstitute them under new names and structures [4].
Brett Erickson, managing principal of Obsidian Risk Advisors, described the approach bluntly: it amounts to a "whack-a-mole" strategy that "has not altered Iran's behavior," since Tehran simply creates new entities to replace those that are designated [1]. That assessment underscores the structural challenge facing any enforcement push.
Miad Maleki, a sanctions expert with the Foundation for Defense of Democracies, offered a more optimistic read of Bessent's signaling, suggesting the Treasury secretary was likely pointing toward a sharpened enforcement campaign targeting oil shippers, purchasers and currency exchangers who enable Iran to pay for imports [4]. Maleki also raised the possibility of expanded aviation sanctions — a tool that could degrade Iran's ability to move trade overland and by air now that maritime routes through the Strait of Hormuz are blockaded [1].
A Land Blockade: Theoretically Possible, Practically Daunting
Some U.S. and Israeli officials have floated the idea of a land blockade to complement the naval one. Iran shares borders with eight countries: Iraq, Turkey, Pakistan, Afghanistan, Turkmenistan, Azerbaijan, Armenia and a mountainous frontier with Afghanistan that experts describe as nearly impossible to patrol effectively [4].
The Trump administration maintains varying degrees of influence over most of these neighbors. Pakistan recently sought a $10 billion currency swap line from Treasury, and Turkey is pursuing re-entry into the U.S. F-35 fighter jet program — both potential points of leverage [1]. A successful land blockade could choke off Iranian imports of food, energy and textiles, intensifying domestic pressure on the government.
But analysts are skeptical. Coordinating eight sovereign neighbors, some with their own complex relationships with Tehran, would be a diplomatic undertaking of extraordinary difficulty. And even if executed, experts say a blockade of that kind might not translate into the internal protests or political pressure that Washington is hoping to generate [4].
The Tariff Option — and Its Legal Hurdles
Trump has also threatened to impose tariffs on goods from countries that continue doing business with Iran. That tool, however, hit a legal wall: the Supreme Court struck down the statutory basis for such taxes [1].
A potential workaround is moving through Congress. The Senate last week passed a broad Russia sanctions bill that included new Iran-related provisions and would grant Trump fresh tariff authorities he could deploy against countries aiding Iran's commerce or weapons procurement [4]. The legislation still needs to clear the House of Representatives, where it faces resistance from both Democrats and some Republicans worried about the scope of the tariff measures — making its passage far from certain [1].
What to Watch
The coming days will be critical. Bessent's "next week" timeline for unprecedented measures means markets, allies and adversaries are all waiting to see whether Washington moves against major Chinese financial institutions, expands its aviation sanctions regime or unveils some other tool not yet publicly discussed. Whether any new measure can break through Iran's demonstrated capacity to adapt — and whether it can do so without triggering a broader confrontation with Beijing — will define the next chapter of this economic campaign.
