NEWSWEEK - analysis
Scott Bessent Slaps NATO Ally and Spares Xi Jinping’s Blushes on Iran
Published
Sep 04, 2026 at 11:38 AM EDT
updated
Sep 04, 2026 at 12:29 PM EDT
The latest Treasury action to squeeze the regime in Tehran travels via a financial institution located within a NATO ally and exposes the China problem inside Washington’s attempt to cut off Iranian oil money.
The U.S. Treasury sanctioned a Turkey-based bank on Friday over alleged Iranian financial flows, reaching into an allied nation while leaving the harder target—Chinese demand for Iranian oil—outside the day’s enforcement action.
Treasury said it placed Golden Global Yatirim Bankasi Anonim Sirketi and two subsidiaries under sanctions, accusing the bank of moving tens of millions of dollars for the IRGC-QF and giving Iran access to the international banking system.
The department also said Golden Global was established to transfer Iranian oil revenues from China to Turkey, where money exchangers could convert them into cash and gold.
Middlemen Take the Hit
Bessent framed the action as part of Operation Economic Outcast, an August 24 campaign he said would "block every potential source of revenue" for Iran.
On Friday, he said financial institutions would "find out the hard way" that Washington was serious.
The target was Turkey-based, a sensitive choice because of Ankara's membership in NATO and President Donald Trump's own warm relationship with Turkish President Recep Tayyip Erdoğan.
Yet Treasury’s account of the violation points well beyond Turkey and much further east: the money entered the network as oil revenue from China.
The timing raises questions about whether broader China-related sanctions are being weighed against other U.S. priorities.
Xi’s Washington Visit Narrows the Room
The White House said in May that Trump would welcome Xi Jinping in Washington this fall, reciprocating his own visit to Beijing that month.
Reuters reported Friday, citing two unnamed sources, that Xi was preparing an unusually large business delegation for the September 24 summit, adding a commercial test to the diplomatic one.
The Trump administration has already sanctioned China- and Hong Kong-linked intermediaries, shipping companies and independent "teapot" refineries, but has stopped short of targeting a major Chinese bank.
Bessent has rejected the idea that Washington was reluctant to confront China as a "completely false narrative."
But directly targeting a major Chinese bank could carry significant economic and diplomatic costs, particularly ahead of the summit with Xi.
Targeting a major Chinese bank before Xi's visit could trigger retaliation and complicate the summit.
Bessent denies Washington is reluctant to confront China, although his own rhetorical question—“Why would I want to blow up the global financial system?”—captures the risk.
The U.S. has arrived at a fragile truce with Beijing in a trade war that spread volatility across the financial markets and caused severe pain for importers and exporters on both sides of the Pacific.
Xi's visit is intended to stabilize the relationship after months of trade tensions. A sanctions escalation involving a major Chinese bank could complicate those efforts.
China’s Objection
China’s foreign ministry said August 25 that "economic warfare and maximum pressure provide no solution" and that China’s cooperation with Iran should not be disrupted.
It is a stance that leaves Washington with two paths forward: move from intermediary banks toward major Chinese financial institutions, or keep pressuring the networks around Iranian oil before Xi arrives.
If Treasury names a major Chinese bank before the planned summit, the Iran campaign will become a direct test of the U.S.-China thaw.
But if Treasury continues targeting intermediary networks rather than major Chinese financial institutions, it may be able to increase pressure on Tehran while avoiding a direct clash with Beijing.
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