Trump Signs Executive Order Threatening 25% Tariffs on Countries Trading with Iran

Introduction

In a significant escalation of economic pressure on Iran, President Donald Trump signed a new executive order on February 7, 2026, authorizing the imposition of secondary tariffs on any country that engages in trade with the Islamic Republic. This move, which threatens a 25% duty on goods imported from nations dealing with Iran, represents a bold use of U.S. trade policy to achieve foreign policy objectives. The order arrives amid a delicate diplomatic opening, with U.S. and Iranian officials holding indirect talks in Oman, and against the backdrop of persistent concerns over Tehran’s nuclear program and regional activities. This article provides a comprehensive, verifiable analysis of the executive order’s mechanics, its legal and geopolitical context, potential global economic repercussions, and practical implications for businesses and governments worldwide.

Key Points

Background

The History of U.S.-Iran Confrontation and Sanctions

Understanding the 2026 executive order requires context on the decades-long adversarial relationship between the United States and Iran. The core dispute centers on Iran’s nuclear program, which the U.S. and its allies allege is a cover for weapons development—a charge Iran consistently denies, insisting its program is peaceful. The 2015 Joint Comprehensive Plan of Action (JCPOA), or “Iran nuclear deal,” imposed strict limits on Iran’s nuclear activities in exchange for sanctions relief. President Trump unilaterally withdrew the U.S. from the agreement in May 2018, reimposing and expanding crippling economic sanctions.

Since then, Iran has progressively breached the deal’s limits, enriching uranium to near-weapons-grade levels and restricting international inspections. Efforts to revive the JCPOA under the Biden administration stalled, and tensions have repeatedly flared, including the U.S. drone strike killing of Iranian General Qasem Soleimani in 2020 and Iranian retaliatory missile attacks.

Previous Threats of Secondary Tariffs

President Trump’s use of secondary tariffs as a coercive tool is not unprecedented. In his first term, he imposed steel and aluminum tariffs on allies like the EU, Canada, and Mexico on national security grounds. His January 12, 2026, Truth Social post marked the first explicit threat to use this mechanism against nations trading with Iran. The new executive order provides the formal legal framework to implement that threat, moving from rhetoric to actionable policy.

Analysis

Legal Authority and Potential Challenges

The executive order is likely issued under the authority of the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act. IEEPA grants the president broad powers to regulate international commerce in response to an “unusual and extraordinary threat” to U.S. national security. The continuous national emergency declared for Iran since 1995 (originally over terrorism, later expanded to include nuclear concerns) provides the statutory foundation.

However, the order’s secondary tariff mechanism faces significant legal and practical hurdles:

• WTO Compatibility: Secondary tariffs that discriminate based on a trading partner’s relations with a third country likely violate World Trade Organization (WTO) non-discrimination principles (Most-Favored-Nation treatment). The U.S. could face widespread WTO disputes, though enforcement is slow.
• Overreach Concerns: Critics may argue the measure punishes neutral third-party nations for their sovereign trade decisions, potentially exceeding the “threat” requirement of IEEPA. Courts have historically deferred to presidential claims of national security, but this case stretches that precedent.
• Implementation Complexity: Customs enforcement would require U.S. importers to trace the entire supply chain of goods to prove no Iranian components or services were used—a monumental administrative burden prone to errors and fraud.

Global Trade and Economic Implications

The order’s impact would be seismic, affecting major economies that maintain trade ties with Iran:

• China: As Iran’s largest trading partner, China would be the primary target. Chinese exports to the U.S.—electronics, machinery, textiles—could face the 25% tariff, escalating the U.S.-China trade war and potentially triggering retaliatory measures.
• European Union: EU nations, while politically aligned with U.S. sanctions, have maintained limited humanitarian and diplomatic ties with Iran. EU exports like cars, pharmaceuticals, and luxury goods to the U.S. could be jeopardized, straining transatlantic relations.
• India and Others: India, a historic buyer of Iranian oil, and countries like Turkey, the UAE, and Iraq engage in substantial trade with Iran. Their exports to the U.S. market would be at risk, disrupting regional supply chains.
• Oil Markets: While the order targets all goods, its real aim is to strangle Iran’s oil exports by penalizing customers. This could tighten global oil supply, raising prices. However, it might also push Iran to sell oil at deeper discounts to non-U.S. markets, creating price disparities.
• Supply Chain Chaos: Multinational corporations would face immense pressure to fully decouple from any Iranian connection, leading to costly supplier audits, relocation of manufacturing, and potential shortages of intermediate goods.