The US Treasury is threatening to cut off anyone who keeps trading with Iran from the dollar system, a serious risk for global markets and especially for China and Russia.

• Treasury Secretary Scott Bessent laid out a phased sanctions campaign against Iran's crypto, tech, gold, aviation, and shipping.
• The bigger threat is aimed at third countries: keep doing business with Iran and you lose access to US dollars.
• Bessent gave a grace period rather than acting immediately, calling it a warning shot before things move fast.
• Iran's two largest trading partners are China and Russia, so this doubles as pressure on the BRICS bloc.
• He admitted the tool is powerful enough to blow up the global financial system if used carelessly.

Outlook: If countries do not back away from Iran, expect the secondary sanctions to land in the coming weeks and markets to get choppy.