The Sanction Washington Cannot Afford to Enforce

The Sanction Washington Cannot Afford to Enforce When the US and

Iran traded strikes in the Strait of Hormuz last week, the headlines focused on the military exchange - American attacks on Larak Island, Iranian missiles fired at US bases in Jordan. But the more consequential threat came from the US Treasury, not the Pentagon.

Secretary Scott Bessent promised an "economic D-Day": sweeping secondary sanctions on any country, company or bank that continues trading with Tehran. The trouble is that this threat has a structural weakness built into it and everyone involved knows it.

Why the Threat Is Harder to Execute Than to Announce

1. China is not a minor violator - it is the market: Secondary sanctions work by making the cost of trading with a sanctioned state higher than the benefit. That logic assumes the violators are marginal players who can be isolated without major cost to the sanctioning power.

China buys roughly 90% of Iran's oil exports. Sanctioning Chinese entities at that scale is not picking off a few violators - it is attempting to sanction the market itself.

2. The timing could not be worse for Washington: Donald Trump and Xi Jinping are due to meet in Washington in the second half of September for trade negotiations. Genuinely enforcing secondary sanctions against Chinese banks and companies buying Iranian crude, just weeks before that summit, would hand Beijing a reason to walk away from talks - or retaliate using its own leverage over critical minerals and manufacturing supply chains that US industry depends on.

3. Iran has adapted before and will again: Even setting aside the China problem, Iran has weathered layered sanctions regimes for years, building workarounds - shadow fleets, alternative payment channels, discounted pricing - that blunt the marginal impact of yet another sanctions announcement.

The threat's deterrent value depends partly on Iran believing it will actually be enforced at scale and Tehran has good reason to doubt that this time.

What This Reveals

Bessent's rhetoric plays a real role even if never fully enforced - it raises the cost of doing business with Iran at the margins, signals resolve to domestic and allied audiences and keeps pressure on Tehran's weaker, non-Chinese trading partners.

But treating it as a credible full-scale threat against China specifically misreads the actual balance of leverage in the room. The US holds military dominance in the Gulf; China holds commercial leverage over Iran's only major oil buyer relationship and reciprocal leverage over the US economy through critical minerals and manufacturing inputs.

Until Washington is willing to accept damage to its China relationship as the price of enforcement, the Strait of Hormuz will keep absorbing sporadic strikes and sanctions rhetoric will keep outrunning sanctions reality - leaving the underlying standoff, as the editorial's own conclusion puts it, always leading back to Hormuz.