The United Arab Emirates announced Tuesday night that it would be suspending all trade and financial transactions with Iran after coming under missile attack once again.
“In light of regional escalations that undermine regional and international peace and security all trade, commercial exchanges, and financial transactions with Iran have been halted until further notice,” the UAE Foreign Ministry said in a statement.
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Before the announcement, ballistic missiles triggered the UAE’s nationwide warnings to seek shelter. It was the first such warning in weeks, though the UAE has reported more than 2,700 ballistic missile and drone attacks from Iran during the conflict. The UAE also recently accused Iran of attacking Emirati oil tankers traveling through the Strait of Hormuz.
The UAE is a small country, only about 50 miles across the Persian Gulf from Iran, which has regularly attacked the UAE and other Gulf States that it accuses of helping the U.S. military, in addition to its frequent attacks on ships transiting the Strait of Hormuz.
Iran’s chief of staff, Gen. Ali Abdollahi, reiterated that threat on Wednesday to “countries on the southern shores of the Persian Gulf,” saying that “any assistance or facilitation provided to the aggressor U.S. military amounts to participation alongside U.S. military forces.”
The two countries’ trade amounted to approximately $28 billion in 2024, while the UAE served as Iran’s largest importer, accounting for approximately 30%, according to World Trade Organization data.
President Donald Trump appears to be leaning into economic pressure on Iran to force its capitulation instead of using military power. It is unclear whether the United States played a role in the UAE’s decision to suspend trade with Iran, though the announcement occurred the same day Trump spoke with Sheikh Mohammed bin Zayed, the Emirati president, and Secretary of State Marco Rubio spoke with Sheikh Tahnoon bin Zayed, the UAE national security adviser.
Last week, Treasury Secretary Scott Bessent warned that the administration is “going to apply measures like have never been seen in the history of the economic isolation of a country.”
One aspect of the economic pain the U.S. is trying to inflict on Iran is through a naval blockade of its ports.
The 60-day time period that began with the signing of the peace deal in June expired earlier this week. Trump indicated he would not seek an extension of the agreement on Monday, and on Tuesday, he said there are “no talk or conversations going on, or scheduled, with the Islamic Republic of Iran.”
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Both the U.S. and Iran have claimed control of the Strait of Hormuz, a waterway vital for the global shipment of oil and gas. Iran’s attacks on vessels passing by its coast have forced companies to reconsider sailing through the strait, as even the threat of getting attacked can serve as a deterrent. Traffic passing through the strait has slowed since the war began.
Iranian officials have said they want to implement a toll system, forcing ships to pay them for safe passage, though that violates international maritime law. Simultaneously, Trump has also suggested doing something similar while holding onto the strait indefinitely. The U.S. military patrolling the strait would be at additional risk, as troops would be well within range of Iranian attacks and would need constant security and protection.
