Trump Vows Unprecedented Iran Sanctions: What Tools Remain?

Washington is preparing to escalate economic pressure on Tehran, with Treasury Secretary Scott Bessent announcing new measures that have "never been seen" could be unveiled as soon as next week. The announcement comes as Iran's economy already reels under existing sanctions, a naval blockade, and a near-total halt to oil shipments through the Strait of Hormuz.

Since the start of his second term, the Trump administration has imposed sanctions on over 1,000 individuals, vessels, and aircraft. These actions have targeted Iran's shadow oil fleet, shipping insurers, and digital currency exchanges, freezing an estimated $500 billion in Iran-linked cryptocurrency. Tehran has denounced the planned measures, which threaten to further strain its economy.

With traditional tools already in place, experts point to several potential avenues for increased pressure. One option is targeting Chinese "teapot" refineries, which account for a quarter of China's refining capacity and buy a significant portion of Iran's shipped oil. While these independent refiners have little exposure to the US financial system, making them somewhat immune, secondary sanctions could still deter them.

Another lever involves pressuring Chinese banks. The US has already sanctioned smaller entities for processing Iranian oil payments and has warned two larger, unnamed banks about potential secondary sanctions. Designating these institutions could have a chilling effect on global finance, though it risks retaliation from Beijing.

The administration could also continue its "whack-a-mole" approach of sanctioning new entities that emerge to facilitate Iran's trade. However, experts note this has not altered Iran's behavior, as Tehran simply creates new front companies. Further aviation sanctions are also possible to degrade Iran's ability to move goods.

A more drastic option floated by some officials is a land blockade, which would require cooperation from Iran's neighbors like Iraq, Turkey, and Pakistan. While the US has leverage over some of these nations, experts say such a move would be difficult to execute and may not achieve the desired internal pressure.

Finally, the administration could pursue secondary tariffs on countries that do business with Iran. While the Supreme Court struck down the legal basis for such taxes, a new Senate-passed Russia sanctions bill includes provisions that could grant the president new tariff powers. This legislation faces an uncertain path in the House of Representatives.