Trump’s Nixon Playbook: Squeeze Iran, Dare China to Blink

The American Spectator  |  Francis P. Sempa

The Trump administration announced new economic sanctions targeting Iran's five primary financial lifelines alongside secondary sanctions against foreign entities doing business with Tehran, including Chinese banks and oil refineries. Announced ahead of a planned bilateral summit between President Trump and Chinese President Xi Jinping, this geoeconomic campaign aims to achieve total economic pressure against Iran despite Beijing's diplomatic objections.

Drawing explicit inspiration from President Richard Nixon's May 1972 decision to mine Haiphong Harbor before a Moscow summit with Soviet leader Leonid Brezhnev, the strategy leverages coercive leverage rather than diplomatic deference. Economic pressure must precede diplomatic accommodation. Secondary tariffs and potential land blockades complement existing maritime interdiction operations near the Strait of Hormuz to force an end to the Iranian conflict. This approach prioritizes neutralizing Iranian capabilities over preserving smooth summit optics, signaling that U.S. strategic credibility remains paramount.

Comment

Imposing secondary economic sanctions against Chinese energy buyers prior to bilateral summitry creates an unavoidable strategic trade-off between Middle Eastern conflict termination and Washington-Beijing diplomatic stability. During Operation Pocket Money in May 1972, Washington accepted severe risks to the Moscow Summit to disrupt North Vietnamese logistics chains passing through Haiphong Harbor. Imposing financial penalties on Chinese institutions trading in Iranian crude reflects a similar prioritization of immediate war termination over diplomatic friction.

This aggressive application of secondary pressures forces Beijing to choose between honoring long-term bilateral energy agreements with Tehran or risking exclusion from Western financial networks. Consequently, Chinese state-owned enterprises may shift energy transactions into non-dollar settlement channels, accelerating the creation of alternative financial clearing architecture outside the reach of the U.S. Department of the Treasury.

Strategic Question for Discussion

If Chinese state-owned enterprises accelerate non-dollar settlement systems to bypass the U.S. Department of the Treasury, which factor will determine whether secondary sanctions retain their coercive leverage over time?

The available evidence points toward the enforcement depth of Western clearing banks as the decisive factor, rather than the raw volume of non-dollar trade. If third-country intermediaries remain dependent on dollar-clearing mechanisms for broader international trade, Chinese state-owned enterprises will struggle to fully insulate their transactions from sanctions enforcement.

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