US Treasury: Tehran Leaders Transfer Massive Funds Out of Iran
The United States has recently raised concerns regarding financial maneuvers by Tehran’s leadership as they transfer substantial funds out of Iran. This situation has drawn the attention of the U.S. Treasury Department and spurred discussions about potential secondary tariffs on Iranian exports.
Impact of Proposed Secondary Tariffs
Announced by President Donald Trump, these tariffs are in response to violent protests in Iran. The proposed 25 percent tariff could affect a variety of Iranian goods, not limited to crude oil.
Commentators have debated the enforceability of these tariffs. Iran maintains trade relationships with over 140 countries, complicating the implementation of such measures. A significant concern comes from China’s position, as it is Iran’s largest trading partner.
Historical Precedents
Past experiences suggest secondary tariffs may impact the sanctioned country more heavily than their trading partners. For example, in 2022, the U.S. imposed tariffs related to India’s importation of Russian oil. Despite the tariffs, Indian exports to the U.S. remained stable.
Moreover, while Chinese exports to the U.S. dropped by 20 percent under tariffs, China’s overall exports grew by 5.5 percent. Discounts on Russian oil bolstered China’s trade, leading to an impressive trade surplus of $1.2 trillion.
Current Iranian Export Landscape
Iran reportedly exports around 1.3 million barrels of crude oil daily, predominantly to China. Additionally, significant volumes of refined petroleum products are sent to the United Arab Emirates, Turkey, Iraq, India, and Pakistan.
| Product | Annual Revenue (in billions USD) |
|---|---|
| Liquefied Petroleum Gas | 10 |
| Fuel Oil | 7 |
| Gas Exports | 5 |
These revenues indicate the financial stakes involved. However, Iran faces challenges as its gas supply contract with Turkey is nearing expiration, and gas deliveries to Iraq have recently stopped.
Potential Consequences of the Tariffs
The UAE, a major buyer of Iranian fuel, enjoys strong economic ties with the U.S. As such, they are unlikely to risk exposure to U.S. tariffs. Other countries, including India and Pakistan, may also refrain from larger purchases of Iranian goods to maintain their markets in the U.S.
If these tariffs come into effect, Iran may find itself increasingly dependent on China. To retain market share, Tehran might need to offer significant discounts, further straining its already limited economic situation.
Ultimately, the implementation of secondary tariffs could harm Iran more than its trading partners. These measures would likely limit Iran’s market options and pressure the nation to absorb economic impacts during a time of significant fiscal hardship.
