Trump hints at sanctions on Chinese banks over Iran ties before Xi’s expected US visit

China has rejected the notion that the United States might impose sanctions on its banks due to commercial ties with Iran, raising doubts about the upcoming summit between US and Chinese leaders next month. Chinese Foreign Ministry spokesman Lin Jian affirmed on Friday that "dialogue and negotiation are the only viable way out" regarding Iran, emphasizing China's stance against illegal unilateral sanctions.

This comes after US President Donald Trump suggested on Thursday that sanctions could be considered for Chinese lenders, an idea the US had previously avoided.

Treasury Secretary Scott Bessent announced new sanctions on 60 entities and individuals, including some in mainland China and Hong Kong, demanding immediate action from nations with economic and commercial ties to Iran. Bessent described this as the "Economic D-Day" in their attempt to pressure Tehran further. The sanctions targeted a broad network of Chinese and Hong Kong-based intermediaries, but major Chinese banks and refiners were not blacklisted.

China's embassy in Washington vowed to protect its rights and interests, with spokesman Liu Chang stating that "economic warfare and maximum pressure provide no solution." With Chinese President Xi Jinping set to visit the US, Trump's comments add complexity to already tense US-China relations. Both countries are seeking to insulate the summit from broader tensions while intensifying economic and diplomatic pressure on each other.

The US has imposed sanctions, tightened export controls, expanded blacklists, and targeted companies, creating a growing list of disputes that could complicate the talks. In Congress, hawkish members of the House Select Committee on China have called for sanctions against countries supporting Iran economically, including China. However, some lawmakers remain cautious about provoking Beijing further.

Experts warn that sanctioning major Chinese banks could be a "nuclear economic weapon," while big international banks might start withdrawing from Chinese counterparts to avoid US regulatory scrutiny. China is the largest buyer of Iranian oil, accounting for over 80% of its exports in 2025. Treasury Secretary Bessent stated that "no one is above the reach of US sanctions," emphasizing that Trump was actively contacting world leaders to avoid engagement with the Iranian regime. However, he declined to specify which countries he had reached out to.