Iran sanctions moved toward a broader transatlantic squeeze this week as European leaders signaled new measures over Iran’s protest crackdown, while U.S. President Donald Trump threatened a sweeping tariff penalty on Iran’s trading partners.
EU and UK signal expanded Iran sanctions
European Commission President Ursula von der Leyen said the EU will “swiftly” propose further Iran sanctions against those responsible for repressing demonstrations. She condemned the rising casualty toll and criticized restrictions on freedoms.
In London, UK Foreign Minister Yvette Cooper told Parliament the government would pursue “full and further sanctions” and bring forward legislation for expanded measures. The UK plan includes sectoral targeting, with a focus on finance, energy, transport, software, and other industries linked to Iran’s escalation risks.
The immediate effect of these Iran sanctions steps is political alignment. Brussels and London are framing the next tranche as accountability for repression. The market effect is indirect but real, because sanctions language often shifts compliance behavior before rules are finalized.
Trump’s tariff threat adds a new Iran sanctions channel
Trump said any country doing business with Iran would face a 25% tariff on all trade with the United States. He issued the warning in a social media post as protests spread in Iran.
The White House had not published formal documentation or a clear legal basis for the tariff plan at the time of Reuters reporting. That detail matters for how quickly firms can price risk, and whether the threat becomes enforceable policy.
If implemented, the tariff concept would function like secondary pressure. Traditional Iran sanctions target the sanctioned party or specific transactions. A tariff threat targets third countries and their broader U.S. trade exposure, even when the Iran-related trade is small.
Who could be exposed to the tariff net
Reuters flagged Brazil as an example of how the tariff threat could create unexpected spillovers. Brazil ran a $2.9 billion trade surplus with Iran in 2025, driven mainly by corn and soybeans. Iran was Brazil’s top corn buyer, importing 9.1 million metric tons, Reuters reported.
Brazil’s imports from Iran were far smaller, about $85 million, and included fertilizers such as urea, as well as fruits and nuts. Even so, the tariff threat would attach to Brazil’s entire U.S. trade relationship, not only the Iran lane.
Reuters also noted Iran’s export links that could raise larger geopolitical stakes. Iran continues to export oil mainly to China, and other key partners include Turkeyz Turkey, Iraq, the UAE, and India. China criticized the U.S. approach and warned of countermeasures.
That is why Iran sanctions now intersect with broader trade policy. The biggest leverage point is not Iran’s direct access to U.S. markets. It is the threat of friction with major economies that still buy Iranian oil or trade in permitted categories.
Why this matters beyond human rights
Iran sanctions are often discussed as a human-rights or security tool. This package introduces a trade-policy shock lever.
A credible tariff threat can widen U.S. disputes with Iran-linked traders. China is the clearest example because of energy flows. Yet the Brazil data shows agriculture can also become entangled quickly.
For commodities, the main risk is not a single embargo headline. It is incremental repricing of compliance risk.
Oil and refined products: traders may demand higher risk premia for any Iran-linked cargo chain.
Agriculture: buyers and sellers may pre-emptively reroute to avoid tariff exposure.
Fertilizers: importers may reassess Iran-origin product, even where alternatives are costly.
For markets, the lesson is that Iran sanctions can propagate through secondary channels. Insurance, financing, and letters of credit can tighten first. Freight schedules can shift next. Physical supply responds last.
What to watch next
EU and UK: scope and timing
The key question is how quickly proposed Iran sanctions become binding and which categories are covered. Watch for named individuals, entities, and sector lists, plus any enforcement guidance.
U.S. tariff: legal basis and implementation pathway
The tariff threat will not be fully priceable until the administration clarifies the legal authority, definitions of “doing business,” and enforcement mechanics. Reuters reported that formal documentation had not yet appeared.
Spillovers: China and agricultural routes
If China signals retaliation, broader trade volatility can rise fast. If Brazil and other agricultural exporters reduce Iran shipments, grain and freight patterns could shift, even without an outright ban.