The Risks China and Major Trade Partners Of Iran Could Face From Trump’s Economic Pressure

The Trump administration is escalating its campaign to economically isolate Iran, threatening penalties against countries and companies that continue trading with Tehran as Washington seeks to cut off the commercial lifelines sustaining the Iranian economy through nearly six months of war.

The U.S. on Monday announced what officials described as an "economic D-Day" campaign targeting the "enablers" of Iran's economy. Although enforcement details remain unclear, the strategy could have major consequences far beyond Tehran, particularly for China, the United Arab Emirates, Turkey, Iraq and India, according to a CNBC analysis.

China faces the greatest exposure because of its central role in Iran's oil trade. Beijing is the largest buyer of Iranian crude, accounting for roughly 90% of Iran's oil exports, according to U.S. government estimates.

Official bilateral trade between China and Iran reached $9.96 billion in 2025, according to the U.S.-China Economic and Security Review Commission. That figure excludes an estimated $31.2 billion in Iranian crude exports to China that were not officially reported.

Independent Chinese refiners have absorbed much of that oil, with some shipments rebranded as originating from Malaysia or Indonesia and payments routed through intermediaries outside the U.S. dollar system, according to energy analytics firm Kpler data cited by the outlet.

The U.S. Treasury has already sanctioned several Chinese refiners over purchases of Iranian oil, although Washington has so far avoided directly targeting major Chinese financial institutions. Beijing publicly opposes U.S. sanctions against Iran and in May instructed domestic companies to disregard American restrictions imposed on five refiners connected to Iranian oil.

But the economic stakes could encourage a more cautious approach behind the scenes. "Chinese authorities care more about dollar access in financing and market entry to the U.S.," Dan Wang, China director at Eurasia Group, told CNBC. She said Beijing could "quietly step up compliance" among state banks and oil companies even while publicly opposing Washington's policy.

The United Arab Emirates represents another critical pressure point. Located about 50 miles across the Persian Gulf from Iran, the UAE has long served as a major commercial and financial gateway for Iranian businesses. Bilateral trade totaled roughly $28 billion in 2024, when the Emirates supplied more than 30% of Iran's imports, according to World Trade Organization data.

The UAE was also Iran's third-largest export destination. That relationship has already deteriorated. Last week, the UAE moved to suspend trade and financial transactions with Iran after two Iranian ballistic missiles were fired toward Emirati territory, including one targeting UAE-owned tankers.

Washington may now push Abu Dhabi to further restrict Iranian access to financial networks in Dubai, which U.S. officials and analysts have identified as an important center for Iranian transshipment, shadow banking and sanctions evasion.

Turkey also has significant exposure. Trade between Turkey and Iran reached $5.7 billion in 2024, according to Turkey's Foreign Ministry. Ankara sells machinery, chemicals and agricultural products to Iran while importing energy.

Iran's share of Turkish natural gas imports rose to 18.6% this year, although a 25-year gas supply agreement between the countries expired at the end of July. Turkey has increasingly diversified supplies through Russia and Azerbaijan but has not indicated that it plans to sever economic ties with Tehran.

For Iraq, the consequences could be more immediate because of its dependence on Iranian energy. Iran renewed a five-year agreement in 2024 to supply Iraq with as much as 660 billion cubic feet of natural gas annually. Iraq reportedly pays Iran roughly $4 billion to $5 billion each year for gas used in electricity generation.

Overall trade between the neighbors exceeded $10 billion in 2025, although commerce has declined this year amid regional security disruptions. India could also find itself caught in Washington's expanding sanctions net.

Bilateral trade with Iran fell to about $1.6 billion in the year ending March 2026, down from $2.3 billion three years earlier. India primarily exports rice, tea, sugar and pharmaceuticals to Iran. The stakes increased in April when India resumed imports of Iranian crude after a seven-year interruption, taking advantage of a temporary U.S. easing of restrictions.