US Treasury Secretary Scott Bessent takes questions from reporters after announcing a new round of sanctions targeting Iran on Aug. 24, 2026. (AFP/Yonhap)
Following the Trump administration’s Monday announcement of plans for its “Operation Economic Outcast” against Iran, the South Korean government began examining what impact the operation — which involves choking off Iran’s economy by sanctioning countries that do business with it — will have on South Korean businesses and financial institutions.Speaking at a press conference Monday at the Treasury Department in Washington, DC, Treasury Secretary Scott Bessent declared, “Today, we are launching Operation Economic Outcast to foreclose every other option available to the Iranian regime.”At its core, the plan involves imposing secondary sanctions on other countries and entities that do business with Iran in the five areas of digital assets, technology, gold, aviation, and shipping.In a briefing on Tuesday, South Korean Ministry of Foreign Affairs spokesperson Park Doo-soon said that Seoul was “closely observing the US’ activities in connection with the Treasury Department’s announcement of new sanctions against Iran.”“The plan is to conduct a close examination with related agencies on the impact that the new sanctions plan will have on South Korea, including the five new sanction areas,” he added.For now, the direct impact of the sanctions on South Korean businesses is expected to be limited. In 2018, the Trump administration unilaterally withdrew from its Joint Comprehensive Plan of Action (JCPOA) with Tehran and restored sanctions against Iran. The following year, it ended an exemption that had been granted to South Korea for imports of Iranian crude oil, halting most of the trade between South Korea and Iran.South Korea-Iran trade currently stands at around US$150 million, down all the way from a height of US$17.4 billion in 2011.“Most South Korean companies have already pulled out of Iran, trade has been almost completely cut off apart from some food and pharmaceutical items, and South Korean financial institutions are not doing business with Iran,” a Foreign Ministry official explained. The United Arab Emirates, which was Iran’s largest trading partner at one point, announced that it was suspending all trade and financial transactions with Iran “until further notice.” The major countries most impacted by the sanctions would be China, Russia, Turkey and India.Yun Kang-hyeon, who formerly served as South Korea’s ambassador to Iran, raised questions about the efficacy of the move by the US. “The focus of the US’ sanctions is on countries that have played a lifeline role to Iran in spite of the previous sanctions — namely China, Russia, India, and Turkey — but the Trump administration will have trouble applying much pressure against China, and Turkey isn’t simply going to go along with what the Trump administration says either,” he said. Some analysts suggested the South Korean economy could end up affected by unexpected knock-on effects as Trump ratchets up the pressure on Iran ahead of the US midterm elections in November.Yu Dal-seung, a professor of Persian and Iranian studies at the Hankuk University of Foreign Studies, said the sanctions suggested the war between the US and Iran was “entering its third phase.”“Trump is facing pressure with the upcoming midterm elections, and he keeps escalating as the Iran issue doesn’t progress the way he wants it to, but the situation is gradually getting more and more out of hand,” he added.According to this analysis, the first 40 days of the war was a unilateral attack, followed by a second phase that involved responding to Iran’s closure of the Strait of Hormuz with a naval blockade. Under pressure after that failed to produce the desired results, the Trump administration has continued fumbling with the third phase of increased economic pressure against Iran, Yu suggested.“If this doesn’t end the war with Iran like Trump hopes, there could be unintended consequences like Trump pressuring South Korea by leaving it out of the loop on North Korea-US dialogue or increasing its demands for a military contribution from South Korea,” he worried.Ultimately, the success of the Trump administration’s attempt to economically choke off Iran will hinge on whether it is supported by China — which is currently serving as an economic lifeline to Iran — or whether it actually implements secondary sanctions against Chinese financial institutions.Small-scale Chinese refineries account for 90% of Iranian crude oil imports, and Chinese financial institutions are backing the transactions. If China is not impacted by the sanctions, they are unlikely to deal much of a blow to Iran — but if the US targets Chinese companies, that risks triggering retaliation from China that causes economic havoc globally.In a regular briefing on Tuesday, Chinese Foreign Ministry Spokesperson Lin Jian responded to the increased US sanctions against Iran by saying China would “do everything necessary to firmly safeguard its rights and interests.”“China has made clear on many occasions its firm opposition to illicit unilateral sanctions that have no basis in international law or the authorization of the UN Security Council,” he also said.With Trump harboring hopes for a deal with Chinese President Xi Jinping at an upcoming bilateral summit in September, the world is now watching to see if he is willing to risk clashing with Beijing to make Iran capitulate.By Park Min-hee, senior staff writerPlease direct questions or comments to [english@hani.co.kr]
