The United Arab Emirates' decision last week to halt trade relations with Iran triggered the latest White House initiative to isolate and suffocate Iran through an operation dubbed 'Economic Pariah'. This plan aims to prevent any person or entity from doing business with the Islamic Republic.
Iran has entered this conflict, which was initiated six months ago by the United States and Israel. Its foreign trade is concentrated in a small number of nations, which, according to an Associated Press (AP) analysis of the effect of new US sanctions, reduces its alternatives.
The success of Washington's strategy will depend significantly on China, which is the main buyer of Iranian oil and its largest trading partner. Meanwhile, Russia, also under extensive Western sanctions, is dealing with the military conflict in Ukraine and pessimistic economic projections, raising doubts about its ability to offer considerable financial support to its long-time ally.
Neighboring countries, such as Turkey, Pakistan, and Iraq, maintain important ties with both Iran and the United States. This suggests there are arguments for these countries to avoid exposure to secondary sanctions, which, according to US Treasury Secretary Scott Bessent, will be imposed on nations that do not sever economic ties with Iran.
Bessent stated on Monday, when presenting his plan to strangle Iran, that 'those who align with the United States will reap the rewards of our partnership,' while 'those who tie themselves to the Iranian regime must expect to share its isolation.'
Despite Western restrictions, Iran, which is not a member of the World Trade Organization (WTO), negotiated $125 billion (equivalent to 107 billion euros) in global goods in 2024, according to the company Trade Data Monitor.
The UAE, China, and Turkey accounted for three-quarters of Iran's merchandise imports, and only four countries—China, Iraq, the UAE, and Turkey—accumulated more than two-thirds of its non-oil exports.
On the supply side, the UAE acted as the main source of imported items in Iran and served as a gateway for financial channels, helping Iranian companies make and receive international payments, keeping the Islamic Republic connected to the world economy. As a re-export hub, they processed remittances from hesitant foreign suppliers unwilling to negotiate directly with Iranian clients.
'From Iran's perspective, the UAE can be replaced, but Iranians are openly saying that this will not happen overnight,' commented Alex Vatanka, chief researcher at the Middle East Institute in Washington, cited by the AP.
China purchases most of Iran's oil through obscure trade networks that circumvent sanctions and has deep economic ties with Iran, although it depends less on this relationship. So far, Beijing has avoided getting involved in the conflict initiated on February 28 by the United States and Israel, which, six months later, remains without a visible diplomatic solution.
David Lubin, chief researcher at the British organization Chatham House, also cited by the AP, observes that China's industrial power and control over critical mineral supply give it more room to resist US pressure than other Iranian partners. However, aggressive actions against major Chinese banks and companies could reignite trade tensions, especially as Chinese President Xi Jinping prepares to meet his American counterpart, Donald Trump, in Washington next month.
Mohammad Bagher Ghalibaf, president of the Iranian parliament and main negotiator in the indirect dialogue with the United States, visited Iraq on the day the UAE trade was suspended. He explained that one of his central objectives was to 'accelerate efforts to expand joint cooperation among all countries in the region, without foreign interference.'
However, the primacy of the US dollar in international trade and finance implies that none of Iran's trading partners will easily dare to antagonize Washington, according to Vatanka. Peace negotiations between the United States and Iran are practically stalled, with regional mediators insisting on the need for a diplomatic resolution, despite growing tension over the blockades of Tehran and Washington to commercial navigation in the area.
Ghalibaf recently stated that Iran faces a 'total economic war,' but stressed that 'the enemy will be defeated' on this front as well. In statements released by the Mehr news agency, he declared that 'we will soon witness the discredit of the enemy's psychological operations in this area.' The politician observed that 'at a time when the war generated direct consequences for the country's economy, the enemy mobilized all its resources to exert greater pressure on the Iranian people.'
In response, he defended that 'the authorities have implemented effective measures to govern and heal their weaknesses,' arguing that following the directives of Supreme Leader Mojtaba Khamenei 'on unity, national cohesion, and trust' is the basis for 'the country's authorities to overcome challenges and improve the position of the Islamic Republic of Iran.'
The parliament president added that, 'given such critical circumstances,' the Government must preserve 'the country's values, prioritize the well-being of the population, their purchasing power, youth employment, and economic security,' in addition to mitigating the burden it faces during this period.
On June 17, Washington and Tehran signed a memorandum of understanding that included an immediate ceasefire, the suspension of Iranian military threats in the Strait of Hormuz—through which 20% of global hydrocarbons passed before the war—and the removal of the naval blockade imposed by the United States on Iranian ports. However, the parties returned to confrontation and respective naval blockades, without following up on the negotiations provided in the memorandum to reach a definitive peace agreement, whose two-month deadline has already expired.
Iran demands that the United States fulfill the commitments made in the memorandum, and the Deputy Foreign Minister reiterated that the Strait of Hormuz will only be 'reopened in exchange for the end of the war on all fronts and the lifting of the American blockade' on Iranian ports. Simultaneously, Iran and Oman are negotiating a bilateral agreement to create a temporary safe route in Hormuz, before setting a deadline of up to two months for a permanent scheme that may include charging tolls to commercial vessels.
Donald Trump has already expressed his opposition to parts of the agreement between Tehran and Muscat, threatening Oman with bombings if the Sultanate gets 'in the way' of Washington's interests. On Wednesday, he stated he was in no hurry or rush to resume dialogue with Tehran, a stance reinforced today by White House spokesperson Karoline Leavitt on Fox News, who reported that the United States is not currently engaged in active conversations. She emphasized: 'This situation will persist until the President believes the other side is willing to sit at the negotiating table.'
} , 3.