Trump’s Economic D-Day for Iran Faces China Resistance

The Trump administration is attempting to sever all economic lifelines to Iran through a sanctions campaign dubbed “economic D-Day,” according to U.S. officials.

U.S. Treasury Secretary Scott Bessent is scheduled to unveil the details of the sanctions during a news conference at 17:00 GMT. In a Sunday op-ed in the Financial Times, Bessent warned that nations hesitant to break ties with Iran should not discount the cost of testing Washington.

Bessent stated that President Trump has created the conditions to use every agency, every authority and action many assumed we would never summon to squeeze the Iranian economy.

The effectiveness of the U.S. campaign depends largely on whether Beijing continues to support Tehran. According to the U.S.

Data from the US-China Economic and Security Review Commission shows that two-way trade between China and Iran totaled $9.96bn in 2025. This figure excludes some $31.2bn in Iranian oil shipments.

China’s Ministry of Foreign Affairs issued a statement on Sunday opposing the sanctions and stating that Beijing remains committed to promoting peace talks to restore tranquility in the region. Foreign Ministry Spokesperson Lin Jian later told reporters in a press conference that China’s cooperation with Iran follows international law and should not be disrupted.

Lin Jian warned that China would retaliate if Chinese companies are included in a significant expansion of secondary sanctions.

Until now, the Trump administration has targeted specific, smaller Chinese entities rather than the broader economy. Al Jazeera reports that the U.S. sanctioned the Hengli Petrochemical (Dalian) Refinery in April for alleged Iranian oil purchases. This was followed by sanctions on four Hong Kong firms in May and six shipping lines based in China and Hong Kong in August.

Washington has not yet sanctioned Chinese financial institutions, which are considered central nodes for Iran’s oil trade. Jennifer Kavanagh, a senior fellow at the think tank Defense Priorities, told Al Jazeera that while cutting these ties is key to success, the U.S. may avoid doing so because China has the leverage to impose costs on the U.S. in retaliation.

Brett Erickson, managing principal of Obsidian Risk Advisors, told Al Jazeera that the administration’s decision to target China will indicate whether the U.S. intends to wage a prolonged economic war. Erickson noted that if the U.S. avoids targeting China, it would be a tacit admission that economic hardship alone cannot change the Iranian position.

Nobel laureate and CUNY professor Paul Krugman characterized the “economic D-Day” plan as a Trump Fantasy in a Substack post. Krugman argued that the campaign is disconnected from U.S. constraints, specifically noting that China has both the ability and the incentive to help Iran withstand pressure.

Krugman cited figures showing Iran earned about $45 billion from oil exports in 2025. He noted that while this represents roughly 7 percent of Iran’s GDP, it is only 0.2 percent of China’s economy, giving Beijing significant room to support Tehran without facing a comparable economic burden.

Krugman also challenged the idea that restoring oil flow through the Strait of Hormuz would lower fuel prices. He pointed to a global shortage of refining capacity and a widening crack spread—the price difference between crude oil and refined fuels—as factors that keep energy costs high regardless of crude supply.

While Krugman acknowledged that the U.S. can cause substantial economic hardship on Iran, he argued that causing hardship is different from forcing a government to capitulate.