US President Donald Trump has imposed 25% tariffs on all countries doing business with Iran, saying he will ratchet up pressure on the Iranian government, which is facing its biggest protests in decades.
Years of Western sanctions have devastated the OPEC countries’ economies, causing high inflation, unemployment and a collapse in their currency, the rial.
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The current protests were prompted by growing economic hardship, but also economic isolation, which the Iranian government is struggling to cope with.
The company’s main source of income is exports to China, Turkiye, Iraq, United Arab Emirates, and India.
So how will President Trump’s threat on Monday affect Iran’s international trade? How will countries such as China, which buys 80% of Iranian oil, react?
What did Trump say?
“Effective immediately, countries doing business with the Islamic Republic of Iran will pay a 25% tariff on all transactions with the United States,” President Trump said in a post on his Truth Social platform.
“This order is final and conclusive,” the US president wrote, without providing further details.
The White House website had no official documents regarding White House policy or information about the legal authority President Trump might use to impose tariffs.
President Trump is increasing pressure on Iranian leaders, including threatening military action.
In response, Iranian Foreign Minister Abbas Araghchi warned in an exclusive interview with Al Jazeera Arabic on Monday that Iran is ready for war if the US wants to “try” war.
“If the United States wants to try military options that it has tried before, we are ready to do so,” Araghchi said, adding that he hoped the United States would choose the “sensible option” of dialogue, warning against “those who are trying to drag the United States into war for Israeli interests.”
Who are Iran’s main trading partners and what is the volume of trade?
China
China is Iran’s largest trading partner, with bilateral trade valued at more than $13 billion in 2024, according to UN Comtrade, a global database of official international trade statistics.
However, due to sanctions, much of the trade is conducted through shadow fleets and is not officially recorded. For example, according to World Bank data in 2022, total trade between China and Iran is worth $37 billion.
China imported 80% of Iranian crude oil last year, bringing in much-needed revenue as other major oil buyers such as India sharply cut imports following U.S. sanctions imposed during President Trump’s first term.
Al Jazeera’s Katrina Yu, reporting from Beijing, said China has been Iran’s largest trading partner since 2016 and trade provides “an economic lifeline for Iran.”
“China doesn’t just buy oil. It also buys other things like plastics, iron ore, and chemicals. China is also a major buyer of Iranian methanol. There are reports that China is even considering increasing its purchases of Iranian oil in light of the current turmoil in Venezuela.”
An Al Jazeera correspondent said the new tariffs “will be a huge blow to Chinese manufacturers” as they will be applied on top of the 35% tariff already imposed on Chinese products in the United States.
The potential new tariffs come months after the United States and China announced a trade truce, reducing China’s tariffs from more than 100 percent to 35 percent following a meeting between President Xi Jinping and President Trump on the sidelines of the Asia-Pacific Economic Cooperation meeting in South Korea in October.
An Al Jazeera correspondent said the threat of new tariffs “will not only jeopardize the current stability between Beijing and Washington, but also President Trump’s planned visit to Beijing in April this year.”
The Chinese embassy in Washington condemned Trump’s policies, warning that China would take “all necessary measures” to protect its interests and rejecting what it called “unlawful unilateral sanctions and long-term jurisdiction.”
“China’s position against the use of arbitrary tariffs is consistent and clear. No one wins in a tariff or trade war, and coercion and pressure are not the solution,” an embassy spokesperson told X.
“There are no winners in the trade war,” Chinese Foreign Ministry spokesperson Mao Ning said.
“China will resolutely protect its legitimate rights and interests,” Mao Zedong told reporters on Tuesday.
Mao Zedong emphasized that China wants peace in the Middle East, and said that China supports Iran’s efforts to “maintain national stability” and “oppose Iran.”[s] Interference in the internal affairs of a country and the use or threat of use of force in international affairs. ”
Tolkier
Turkiye was Iran’s second-largest trading partner, according to 2024 United Nations trade data. The trade volume between the two countries reached approximately $5.7 billion.
Turkiye faces a 15% basic tariff from the United States. Since June, the United States has doubled tariffs on steel and aluminum from most trading partners, including Turkiye, raising them from 25% to 50%.
Pakistan
Pakistan is Iran’s largest export destination, with total exports of approximately $1.2 billion in 2024.
Pakistan’s exports to the US are currently subject to a 19% tariff.
India
India is Iran’s largest export destination, with total exports of just over $1.05 billion in 2024.
India faces 50% tariffs from the US on steel and aluminum. A wide range of other Indian exports also face 50% tariffs from the United States.
Media reports last week said the Trump administration plans to impose a 500% tariff on India’s purchases of Russian crude oil.
How have sanctions affected Iranian exports?
The United States has imposed sanctions to cut off funding for Tehran’s nuclear program. The US government accused Iran of planning to build a nuclear bomb. But Iran insists its nuclear program is for civilian purposes only and has allowed inspections by the world’s nuclear watchdog.
However, after the US bombed a nuclear power plant during Israel and Iran’s 12-day war in June, Iran imposed restrictions on nuclear inspections. Talks aimed at breaking the deadlock have stalled, with Iran accusing the United States of imposing conditions.
Fuel is Iran’s largest export item by value, but major imports include intermediate goods, vegetables, machinery, and equipment.
According to the latest data from the World Bank, Iran exported products to 147 trading partners in 2022.
Most sanctions against Iran were lifted under the 2015 nuclear deal under President Barack Obama, but three years later, President Trump withdrew the United States from the deal, which placed limits on Iran’s nuclear activities in exchange for sanctions relief.
He also imposed additional sanctions targeting petrochemicals, metals (steel, aluminum, copper) and Iranian officials as part of his “maximum pressure” campaign against Iran.
The reimposition of U.S. sanctions since 2018 has put pressure on oil exports and access to global finance. Iran’s oil exports have fallen by about 60 to 80 percent, costing the government tens of billions of dollars in annual revenue.
The country’s per capita gross domestic product (GDP) fell from just over $8,000 in 2012 to just over $6,000 in 2017 and to just over $5,000 in 2024, according to World Bank data.
Iran exported about 2.2 million barrels per day (bpd) of crude oil in 2011. Export volume has sharply declined since 2018, reaching a record low of just over 400,000 barrels per day in 2020. Exports have gradually increased to about 1.5 million barrels per day in 2025, but are still below pre-2018 levels.
Foreign trade brought billions of dollars into Iran’s economy.
The country’s exports will reach approximately $22.9 billion in 2024, according to United Nations Trade data, and account for about 5% of the country’s total GDP of approximately $475.3 billion in 2024, according to World Bank data.
