The Impact of U.S. Secondary Tariffs on Iran’s Regime

U.S. President Donald Trump has threatened to bomb Iran’s regime and impose “secondary tariffs” if this regime Republic refuses to negotiate with Washington and abandon its nuclear ambitions.

While the Trump administration has previously used tariff increases as a tool to pressure rival nations, this approach has had minimal direct economic impact on the Iranian regime.

In the past year, Iran regime’s exports to the United States amounted to just $6.2 million, a figure projected to drop to $2.2 million in 2023. However, secondary tariffs could present a significant challenge for Tehran.

Understanding Secondary Tariffs

Unlike direct tariffs, which apply to goods imported into the U.S., secondary tariffs target countries that trade with sanctioned nations. This mechanism allows Washington to penalize countries importing Iranian goods by imposing tariffs on their exports to the U.S. market. Given the regime’s limited direct trade with the United States, secondary tariffs could serve as an indirect but powerful economic weapon.

The Scope of the Regime’s Trade Network

The Iranian regime’s non-oil exports are highly concentrated, with 83% of these exports directed to just seven countries: China, Iraq, the United Arab Emirates, Turkey, Afghanistan, Pakistan, and India. Except Afghanistan, all of these countries have extensive trade relations with the United States. Secondary tariffs could force these nations to choose between maintaining access to the U.S. market and continuing economic relations with Iran’s regime.

Potential Disruptions to the Regime’s Export Strategy

Secondary tariffs could severely disrupt the Iranian regime’s trade strategy, which relies on intermediary nations to rebrand and reroute sanctioned goods. In the first 11 months of the last fiscal year, the regime exported $43 billion worth of goods to these seven key countries. Meanwhile, these nations collectively exported over $550 billion in goods to the United States—11 times their imports from Iran—according to the U.S. Census Bureau. This imbalance highlights the potential leverage of U.S. secondary tariffs.

China, the regime’s largest trading partner, imported approximately $13.8 billion in non-oil goods from Iran in the same period. Additionally, tanker tracking data indicates that China received around 1.5 million barrels of Iranian crude oil and fuel oil per day, valued at approximately $40 billion. While China benefits from significant discounts on Iranian oil, it exported $427 billion in goods to the United States last year—an indication of the substantial economic cost secondary tariffs could impose.

Discrepancies in Trade Statistics and the Regime’s Re-Export Strategy

The inconsistencies between the Iranian regime’s official trade statistics and those recorded by its trading partners suggest that a significant portion of its exports are being re-exported under different origins. For example:

• The regime reported $13.8 billion in non-oil exports to China, while Chinese customs recorded only $4.44 billion in non-oil imports from Iran in 2024.
• The regime claimed $6.4 billion in exports to Turkey, yet Turkish data—also including natural gas imports—reported only $2.45 billion.
• The regime reported $1.8 billion in exports to India, whereas India’s commerce ministry recorded just $718 million in imports from Iran.

Trade statistics from Iraq, the UAE, Pakistan, and Afghanistan are not fully transparent, but the UAE is known for re-branding Iranian sanctioned goods and re-exporting them to international markets. This reliance on intermediary countries makes the regime particularly vulnerable to secondary tariffs.

Key Sectors at Risk

U.S. sanctions extend beyond crude oil, targeting the regime’s petroleum product sectors, including liquefied natural gas (LNG), petrochemicals, and metals. In the first 11 months of the last fiscal year, the regime’s key exports included:

• $10 billion in liquefied natural gas,
• $13 billion in petrochemicals,
• $10 billion in metals (especially steel, aluminum, and copper),
• $5 billion in gas.

These four sectors alone constitute 70% of the regime’s total non-oil exports, with almost all shipments directed to the seven key trading partners.

The Broader Implications of Secondary Tariffs

If the United States enforces secondary tariffs, the Iranian regime’s ability to evade sanctions and use intermediary countries for re-exporting sanctioned goods would be significantly constrained.

This could lead to a sharp decline in exports and foreign exchange earnings, exacerbating the regime’s economic struggles.

Given the importance of these seven trading partners, U.S. secondary tariffs could force a reassessment of the regime’s entire trade strategy, making it increasingly difficult for Tehran to sustain its economic resilience in the face of ongoing sanctions.