China has delivered a sharp rebuke to Washington, declaring it will not abandon its economic relationship with Iran despite the Trump administration's sweeping new "economic D-Day" sanctions campaign aimed at strangling Tehran's financial lifelines. Beijing's warning, issued on Tuesday, sets up a potential new flashpoint between the world's two largest economies at an already delicate moment in global diplomacy.
China draws a line over Iran sanctions pressure
Chinese Foreign Ministry spokesman Lin Jian made Beijing's position unambiguous at a press conference on Tuesday, stating that China's dealings with Iran were conducted within the framework of international law and were not subject to outside interference.
"China's cooperation with Iran has always been conducted within the international framework and should not be interfered with or undermined," Lin said, adding that Beijing was "closely monitoring relevant developments and will take all necessary measures to firmly safeguard its own interests."
China has condemned the latest US sanctions as unilateral measures that will worsen existing conflicts and has called for a return to diplomatic negotiations. Iran's Economy Minister Ali Madanizadeh echoed that defiance, telling state television that neither China nor Russia had accepted the US measures, and predicting broader international resistance to the campaign.
China's economic relationship with Iran is substantial. Beijing purchases as much as 90 per cent of Iran's oil exports, providing Tehran with a critical revenue stream that has helped sustain the Islamic Republic in the face of years of mounting Western sanctions. Any credible effort to sever Iran's financial connections to the outside world would inevitably require confronting that trade relationship — and the Chinese banks that process payments for it.
What Bessent's 'economic D-Day' actually targets
US Treasury Secretary Scott Bessent unveiled the expanded sanctions package on Monday, framing it in stark terms. "Around the globe, our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone," he told journalists, describing the measures as the "economic asphyxiation" of the Iranian regime.
The announcement came almost six months into a war that has ground toward stalemate, with peace talks stalled and Iran blocking most commercial traffic through the strategically vital Strait of Hormuz. You can read more about the background to this conflict and the US strikes on Iran that preceded the current standoff.
The Treasury Department announced new sanctions against 60 individuals, companies and vessels accused of helping Iran generate oil revenues, procure weapons, and conduct cyber operations. Targets span multiple jurisdictions, including entities based in Hong Kong, mainland China, the United Arab Emirates, Singapore and Europe. The expanded measures also extend secondary sanctions to Iran's digital assets, technology, gold, aviation and shipping sectors.
Bessent warned that any country continuing to trade with Iran would "share in the isolation" of Tehran, and said President Donald Trump was personally calling world leaders to press them to halt dealings with the Islamic Republic.
Despite the sweeping rhetoric, however, the measures notably stopped short of targeting major Chinese financial institutions — the entities most central to Iran's oil trade. When asked about Chinese banks specifically, Bessent offered a telling response: "Why would I want to blow up the global financial system?" He indicated the US was giving entities an opportunity to change their behaviour before further escalation.
For more on the broader economic pressure campaign against Tehran, see our earlier coverage of Trump's crushing economic warfare against Iran.
Iran vows retaliation as a tanker is struck near Hormuz
Tehran's response to the expanded sanctions was defiant and, in part, militaristic. Iran's Islamic Revolutionary Guard Corps vowed to deliver "heavy blows" to US vital interests and energy choke points if Iranian infrastructure came under threat. Economy Minister Madanizadeh told state television that Iran's posture had shifted: "Our defence is no longer so defensive; the enemies should wait for an attack."
The tension was underscored by a maritime incident on Tuesday, when an oil tanker was struck by an unidentified projectile and disabled approximately 17 kilometres northeast of Oman's Ash Shishah, near the entrance to the Strait of Hormuz, according to the United Kingdom Maritime Trade Operations.
The roots of the current conflict lie in the complex and long-running deterioration of Iran–Israel relations, which culminated in US and Israeli strikes on Iran in February that triggered the wider war.
On a more cautiously optimistic note, Pakistan — which has been playing a mediating role — said it had made "significant progress" in the latest round of talks with Tehran, focused on preventing further escalation and reopening the Strait of Hormuz to commercial traffic. Pakistani officials described the exchange as "very constructive."
The looming question: Beijing, Washington and a White House summit
The diplomatic stakes could hardly be higher. Donald Trump and Xi Jinping are expected to meet at the White House next month, a summit that both governments have been working to protect from disruption. Experts note that Washington is acutely aware that sanctioning Chinese banks over Iran could trigger Chinese retaliation — particularly restrictions on exports of critical minerals — at precisely the wrong moment.
The fragile trade truce struck between the two leaders remains in place, but any genuine move to cut off Chinese financing of Iranian oil would almost certainly shatter it. For now, the US appears to be threading a needle: applying maximum rhetorical pressure on Iran while carefully avoiding the direct confrontation with Beijing that would turn an already volatile situation into a full-scale economic war on two fronts simultaneously.
