#IranTradeSanctions

1) What’s Happening Now
New US Tariff Threat Linked to Iran
The United States government has threatened a 25 % tariff on any country doing business with Iran, a broad measure aimed at isolating Tehran economically by forcing other nations to choose between trading with Iran or keeping full access to the US market. This threat has drawn strong criticism from China and Russia, which oppose interference and argue such measures harm global trade and stability.
European Union Moves Toward New Sanctions
The European Commission is planning additional sanctions on Iran’s exports of advanced military technologies, especially elements used in drone and missile production. There is debate within the EU about sanctions strategy and accusations of double standards, reflecting internal political divisions.
US Targets Iran-Backed Proxy Networks
Separate from broader trade sanctions, the US Treasury has imposed sanctions on individuals and entities tied to Iran’s funding of the Houthi movement in Yemen. These measures aim to disrupt financial and logistics networks that support regional proxy groups, further squeezing Iran’s international operations.
Geopolitical Tensions Remain High
Iran’s ongoing confrontations with the United States and allies — particularly relating to Middle East conflicts and proxy engagements — continue to influence sanction policy and deep international disagreements
2) Background: How Sanctions Structural Impact Works
UN Sanctions ‘Snapback’ and EU Measures
International sanctions were re-imposed under the UN Security Council “snapback” mechanism tied to concerns about Iran’s nuclear activities. These reinstated a wide range of economic and financial restrictions, including asset freezes and trade prohibitions in certain sectors. The EU has also incorporated these UN measures into its own sanctions regime covering trade, transport, and financial flows.
US Targeted Sanctions on Energy Export Network
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has repeatedly sanctioned networks — including vessels, companies, and shadow banking systems — that facilitate Iran’s oil and energy exports. The goal is to choke off Tehran’s main source of revenue by interfering with crude and LPG shipments.
Sanctions on Indian and Other Firms
In 2025 the U.S. sanctioned several Indian companies and vessels involved in transporting Iranian crude oil. These actions signal how sanctions have extended beyond Iran itself to foreign companies that help Iran circumvent restrictions.
3) Effects on Trade & Economies
Iran’s Economy Under Pressure
Iran is experiencing one of its worst economic crises in decades. Inflation is extremely high, the rial has collapsed, and living standards have plunged, largely due to long-term sanctions, restricted access to global finance, and domestic economic mismanagement.
Oil Exports Remain Resilient
Despite sanctions, Iran’s crude oil exports have at times reached multi-year highs, showing Tehran’s ability to find buyers — especially in Asia — and use tactics like “shadow fleet” vessels to evade restrictions.
Challenges for Regional Trade Partners
Countries that trade with Iran — including India and Pakistan — face difficult choices. Strong bilateral trade growth in some sectors (e.g., air cargo) may be undercut by the new tariff threats, and strategic projects like India’s involvement in Chabahar port development have faced setbacks due to sanctions pressure.
4) Geopolitical & Diplomatic Responses
China and Russia Push Back
China, Iran’s largest trading partner, and Russia have publicly condemned new US tariff threats and sanctions. Their pushback reflects broader geopolitical tensions and competing visions for global trade rules.
EU Internal Debate
Within the European Union, lawmakers are divided over sanction strategies toward Iran, with some criticizing Western policies’ fairness, indicating that sanction decisions remain politically complex.
Balancing Act for Neighbouring States
Countries like India and Pakistan must navigate sanctions, economic interests, and diplomatic relationships carefully. While aiming to boost trade with Tehran, they confront significant pressure from Western sanctions regimes.
5) Why It Matters Globally
• Global energy markets: Iran’s oil and gas exports affect prices and trade routes; sanctions can influence global supply and shipping patterns.
• Regional geopolitics: Sanctions are tied to broader Middle East tensions and influence relationships with allies and rival powers.
• Trade and investment risk: Countries and companies face legal and economic risk when engaging with Iran, shaping global trade strategies.