President Donald Trump has implemented a 25 per cent tariff on all of Iran’s trading partners in response to a violent crackdown by Tehran on protesters.
Oil prices jumped to the highest levels since November in the aftermath of the announcement, sparking concerns about an impact on the global economy.
The US leader has been unequivocal about using military force in Iran if protesters are killed and will discuss “several options” with senior military officials on Tuesday.
Experts say his latest strategy is an attempt to strong-arm the country into compliance – but the Supreme Court has struck down his previous tariff policy.
The Independent looks at whether the announcement of new tariffs on Iran’s economic allies will have a widespread economic impact.
What does Trump’s tariff policy entail?
The US president’s announcement came in a characteristically bombastic Truth Social post on Monday that was light on details. He said the order was “final and conclusive” and applied to “any and all business” being done with Iran.
But the president did not unpack what the scheme would mean in practice and whether the charge would be imposed on top of existing import taxes. If it is implemented, experts say it could lead to countries such as China – Tehran’s biggest trading partner – being charged a 75.2 per cent tariff.
In theory, the tariff would mean a higher price for US businesses importing products from several countries, including China, Russia, Pakistan, India and Turkey. It would effectively impose a financial penalty for trading with Iran.
Follow here for the latest updates on protests in Iran.
Who are Iran’s trading partners?
Iran is a member of the OPEC oil producers group and exports to 147 trading partners, according to 2022 data from the World Bank.
China, Turkey, Pakistan and India are among the country’s largest trading partners, according to figures by Trade Data Monitor, which collects customs data.
In 2025, China bought more than 80 per cent of Iran’s shipped oil, partly owing to Tehran’s limited customer base as a result of US sanctions. Iranian exports to China were valued at $22bn in 2022.
In response to the threat to impose the tariffs, China said it “will take all necessary measures to safeguard its legitimate rights and interests”.
Lie Pengyu, a spokesperson for the Chinese embassy in the US, wrote in a post on X (Twitter): “Tariff wars and trade wars have no winners, and coercion and pressure cannot solve problems. Protectionism harms the interests of all parties.”
He added that China “firmly opposes any illicit unilateral sanctions and long-arm jurisdiction”.
India, in comparison, is more of a modest partner. It trades mainly in food and pharmaceuticals but is “strategically significant”, according to Professor Ashok Kumar, associate professor of political economy at Birkbeck, University of London.
Iran’s other partners include Turkey, the UAE, Germany, South Korea and Japan. Despite these countries maintaining relatively low levels of trade with Iran, they could all face penalties.
What will be the impact of tariffs?
Experts have warned that the “blunt” strategy could trigger serious effects across the global economy as well as political ramifications.
“Iran’s imports consist largely of intermediate goods, machinery, equipment, foodstuffs, and pharmaceuticals, all of which are essential to maintaining industrial production and social stability,” says Prof Kumar.
“Cutting Iran off from this web of trade does not simply reduce revenue. It risks cascading disruptions across supply chains that extend far beyond Iran’s borders.”
His concern has been backed by others, including Maurice Obstfeld, former chief economist for the International Monetary Fund, who told The Washington Post that it could be “profoundly self-harming for the US, and [it] will not change the Iranians’ behaviour one iota”.
Prof Kumar says that the decision rests on whether the US can “credibly threaten universal tariffs without inflicting significant damage on its own economy”. Further, US demands for acquiescence could lead to political backlash and resentment.
“Will major powers accept a precedent in which their external trade relations are effectively vetoed by Washington?” he asks. “Does escalating economic pressure on Iran at a moment of internal unrest increase the likelihood of political change, or does it instead entrench hardliners and deepen global polarisation?”
Mr Trump has said the US will be “screwed” if his landmark trade policy is blocked by the Supreme Court.
