Washington is preparing to cut off any country or bank that does business with Iran from the US dollar system, a move that risks higher borrowing costs worldwide.

• Treasury Secretary Scott Bessant announced a sweeping new sanctions push aimed not just at Iran but at every nation still buying its oil.
• Any bank or company accused of moving money for Iran would be kicked out of the dollar system — the plumbing behind most global trade.
• China is the obvious target and the biggest problem, since Iranian oil covers most of its imported crude.
• Bessant admitted the plan could blow up the global financial system, which is why countries are being given a grace period instead of an immediate cutoff.
• If it goes ahead, the fallout would reach ordinary Americans through higher rates on mortgages and credit cards.

Outlook: The threat likely stays a threat for now, with Trump unwilling to wreck a planned meeting with Xi Jinping this fall.