China has issued a strong warning to the United States, indicating it will retaliate against any US sanctions targeting Chinese companies or individuals that continue to engage in trade with Iran. This comes as the Trump administration is preparing to announce new measures aimed at punishing Tehran's economic partners, with some analysts calling it an "economic D-Day" for Iran. The US Treasury Secretary, Scott Bessent, has stated that countries must sever business ties with Iran or risk being excluded from the dollar-based financial system, although the US initially held back from the most punishing options, instead putting other nations on notice to cease business with the Islamic Republic.
The potential for US sanctions on Chinese entities is particularly significant given the deep economic ties between Beijing and Tehran. China reported $9.96 billion in two-way trade with Iran in 2025, and this figure excludes an estimated $31.2 billion in Iranian oil shipments. According to the US Treasury Department, China's purchases constitute approximately 90% of Iran's oil sales, making Beijing a crucial economic lifeline for Tehran. The Trump administration has previously sanctioned Chinese entities, such as Hengli Petrochemical (Dalian) Refinery, over alleged purchases of Iranian oil, though these were considered relatively minor until now.
Experts believe that any US pressure campaign that excludes China would be limited in its effectiveness due to Beijing's outsized importance in Iran's economy. Jennifer Kavanagh of Defense Priorities stated that cutting off Chinese economic ties is key to increasing pressure on Iran, but she doubts the US will do so, fearing Chinese retaliation. Chinese officials, including Foreign Ministry spokesperson Mao Ning and Wang Wen of the Chongyang Institute, have reiterated that China would take countermeasures, the intensity of which would depend on the severity of US actions. Trump's proposed 25% tariff on countries doing business with Iran could have a significant economic impact on China, potentially piling on top of existing US tariffs on Chinese exports.
The broader implications of such sanctions extend beyond immediate economic costs. China is the largest buyer of Iranian oil, importing an average of 1.38 million barrels per day in the last year, representing about 80% of Iran's oil sales, according to Kepler data. The new tariffs could threaten China's access to this cheaper oil. The situation also highlights China's growing concerns about protecting its overseas investments and assets, particularly given recent US actions concerning Chinese interests in Latin America. While the US can make it more challenging and expensive for China to support Iran, analysts like Brett Erickson of Obsidian Risk Advisors believe it's unlikely to stop Beijing outright, as China would likely leverage its own economic power in response.
