The US operation targeting channels that economically support Iran has once again raised the risk of trade tensions between Washington and Beijing. US Treasury Secretary Scott Bessent said countries and organizations that continue doing business with Iran could face secondary sanctions.
Bessent said the relevant parties had been given time to end the activities that had been identified. He also said organizations facilitating money laundering on behalf of Iran would be cut off from the US dollar system.
Responding to a question about possible sanctions on Chinese banks, Bessent said no country or organization was outside the scope of US sanctions. The statement prompted assessments that pressure on trade relations between the United States and China, the largest buyer of Iranian oil, could increase.
Beijing’s initial response
Asia markets analyst Sadi Kaymaz said China was the primary counterpart in terms of oil trade under US secondary sanctions targeting Iran. Kaymaz said China’s share of Iranian oil exports had at times reached 90 percent.
Kaymaz said Lin Jian, spokesperson for China’s Ministry of Foreign Affairs, had announced that Beijing would take the necessary measures to protect its own interests. He assessed that the statement remained relatively measured as China’s first official response.
Referring to legal regulations that recently took effect in China, Kaymaz said the Beijing administration could instruct Chinese companies not to comply with foreign sanctions decisions. He said these instructions were legally binding.
Options for retaliation
Kaymaz said Chinese officials had instructed companies not to comply with the sanctions after the United States imposed sanctions on some refineries involved in trade relations with Iran. He said similar instructions could come back onto the agenda in the coming weeks.
Kaymaz said the Chinese administration had particularly warned banks to act cautiously, adding that China could activate the sanctions provisions of its foreign trade law if tensions between the United States and China escalated.
Kaymaz said these provisions allowed sanctions to be imposed against US companies in response. He said China might initially seek to avoid imposing sanctions in practice, adding that targeting state-owned enterprises and major banks if the sanctions were implemented would increase the likelihood of a stronger response.
Kaymaz noted that China would be less likely to respond if a small bank or private refinery were targeted because of its relations with Iran. Washington’s next move toward China before a meeting expected to take place next month between US President Donald Trump and Chinese President Xi Jinping remains uncertain.
