Washington's new sanctions push aims at anyone doing business with Iran, and the fallout could hit the dollar, US debt, and global trade far harder than it hits Tehran.

• Treasury Secretary Scott Bessent is threatening to cut any bank that handles Iranian money out of the dollar system, with a major institution — likely Chinese or Hong Kong-based — first in line.
• China buys the vast majority of Iran's oil exports, so this is really a fight with Beijing, and India, Turkey, Iraq and the UAE are being forced to pick sides too.
• Squeezing everyone at once is risky when the US needs those same countries to keep buying its debt and using its currency; Russia already shifted to the Chinese yuan after being sanctioned.
• Debt is the weak spot at home: 30-year government bond yields are at levels last seen in 2007, AI data centers are being built with borrowed money, and a trillion dollars of commercial real estate needs refinancing.
• Sanctions have never forced a change in Iran's government in 50 years, and the bombing has left a harder-line regime with less reason to negotiate.

Outlook: Expect more sanctions and a tense meeting when China's Xi visits next month, with pressure building on the dollar and on borrowers facing high rates.