Xi signals defiance as US threatens sanctions over Iran help

In a display of defiance towards the United States, China continues to maintain strong economic ties with Iran, despite the latter being targeted by US sanctions. President Xi Jinping is not eager to intervene in the ongoing conflict, instead opting to protect China's interests. Beijing has warned that its relationship with Iran should not be disrupted or undermined, and will take all necessary measures to safeguard its interests.

China is the largest buyer of Iranian oil, and the US has threatened to target a major financial institution over its dealings with Tehran. President Trump, in a bid to pressure Iran into a deal, has promoted an economic onslaught against the Islamic Republic. However, taking action against any major Chinese bank supporting Iran's wartime economy could invite bigger blowback from China, according to Jesse Marks, a founder of Rihla Research & Advisory and former Middle East policy adviser in the US government.

The US has redeployed its sole aircraft carrier to the Middle East and scrapped an exercise with South Korea to free up resources, potentially giving China more room to maneuver. China may consider reducing purchases of Iranian oil to appease Washington or keep income from such transactions locked in Chinese banks. Alternatively, Beijing could impose tighter controls on Chinese-made dual-use components that could reach Iranian weapons programs.

The looming summit between the two superpowers presents a delicate situation, as China is both the world's largest buyer of Iranian crude and holds a near monopoly on critical minerals essential for producing various commodities. Both nations are keen to prevent ties from spiraling out of control. The US, seeking to avoid additional economic upheaval, is planning to limit pending overcapacity tariffs on China at a level previously agreed upon.