Trump threatens Iran’s partners: How do secondary sanctions work?

What the report says

The United States has intensified economic pressure on Iran by announcing new sanctions and warning that countries, companies and financial institutions that continue doing business with Tehran could also be penalized. In reporting published by Al Jazeera on 26 August 2026, US officials described the effort as part of a broader campaign aimed at cutting off Iran’s revenue, including oil sales, while warning foreign actors that they must choose between access to the US system and ties with Iran.

The article explains that these “secondary sanctions” are designed to reach beyond the sanctioned country itself. Because the US financial system remains highly influential, banks and firms elsewhere may avoid Iran-related transactions if they fear losing access to US markets, dollar clearing or American clients. Al Jazeera notes that this can chill trade even when a foreign institution has no direct relationship with Iran.

The piece places the latest threats in the context of earlier US sanctions policy, including the CAATSA law and past actions against entities in China and Turkiye linked to Russian arms purchases. It also says Iran’s trade remains broad, with major partners including China, Iraq, the United Arab Emirates, Turkiye and Afghanistan for exports, and the UAE, China, Turkiye, the European Union and India for imports.

Al Jazeera’s explainer argues that the current strategy could have wider consequences for global markets, energy flows and the banking sector, especially if major economies or large financial institutions decide to reduce exposure to Iran.