China opposes US sanctions threat over Iran trade

China has pledged to safeguard its interests in light of the United States' decision to broaden economic sanctions against Iran and its trading partners, including China itself. The Foreign Ministry spokesman Lin Jian strongly opposed what China termed as "illegal unilateral sanctions" and vowed to take all necessary measures to protect its rights.

US Treasury Secretary Scott Bessent announced the new measures on Monday, warning that any nation financially partnering with Iran would face isolation. China is the largest importer of Iranian oil, though the trade has decreased under the US embargo on Iran's ports. Lin emphasized that China and Iran's cooperation has always adhered to international law and should not be interfered with.

Bessent described the sanctions as "the single greatest financial offensive ever" against Iran, stating that banks and businesses would share in Iran's isolation if they refused to sever ties with the country. The US President Donald Trump was expected to reach out to world leaders, requesting them to cut off their interactions with Iran.

However, Bessent clarified that no one was immune to US sanctions. The announcement preceded planned meetings between Trump and Chinese President Xi Jinping. Washington likely viewed potential retaliation from Beijing with caution, as China processes most of the world's rare earths and other critical minerals crucial for high-tech products.

China had already tightened export controls on rare earths as part of prior trade discussions with the US. Iran's Economy Minister Ali Madanizadeh declared that Tehran was "fully prepared" for the expanded sanctions, which he believed would result in another "defeat" for the US. Iran stated its readiness to counter the widened economic sanctions.

The US dubbed its latest sanctions "Operation Economic Outcast" and referred to it as an "economic D-Day" against Iran. Following six months of conflict, the Iran war has led to global oil price increases, with Iran effectively blocking exports through the Strait of Hormuz, a critical global trade route. Diplomatic efforts to resolve the conflict have thus far failed, and a 60-day ceasefire expired last week without any resolution.

The US Treasury Secretary declared that the country was ending the Iranian threat, rather than merely managing it. UK Chancellor John Healey supported the US' efforts to secure a diplomatic solution and welcomed pressures on Iran. Iran was already under stringent US sanctions, but Bessent claimed these were insufficient. He stated that the Treasury had identified financial channels, facilitators, and networks utilized by Iran to circumvent sanctions, imposing penalties on nearly 60 entities, individuals, and vessels.

However, analysts had questioned the effectiveness of the latest measures before China's response. David Oxley, a climate and commodities economist at Capital Economics, suggested that the new package would have a limited direct impact on Iran's energy revenues in the short term. This was partly due to China's non-recognition of US sanctions and its continued import of Iranian oil.

Ali Vaez, deputy director of the Middle East and North Africa Program at the International Crisis Group, asserted that China generally opposed unilateral sanctions. While China maintained good relationships with Iran's neighbors like Pakistan, Turkey, and Iraq, these countries could not afford to sever ties with Iran due to their economic interests. Trade partners like India and Russia had yet to comment on the US' sanctions announcement.