Latest Iran sanctions risk economic showdown with China

The Trump administration’s latest sanctions on Iran risk exposing a major gap in its strategy to put economic pressure on Tehran: China, Semafor writes.

US Treasury Secretary Scott Bessent announced new sanctions on August 24 targeting individuals and entities alleged to support Tehran, while threatening further measures. China was notably absent from the list.

China is Iran’s most important economic lifeline. Before the war, Beijing bought nearly all the crude Iran managed to export, at a significant discount, while effectively ignoring Western sanctions. Iranian oil accounted for about 12% of China’s imports.

“We are level-setting with every country to tell them our expectations,” Bessent said.

The US has stepped up pressure on China this year, including sanctions on one of the country’s biggest refineries over its purchases of Iranian crude. Meanwhile, the US naval blockade in the Strait of Hormuz has for now effectively halted most Iranian crude exports.

But with Chinese President Xi Jinping due to meet US President Donald Trump in Washington next month, the administration appears intent on avoiding a full-scale economic confrontation with Beijing. That could complicate its strategy for putting further pressure on Iran.

“Only measures that materially sever Iran-China trade — including sanctions on Chinese banks, state-owned enterprises (SOEs) and economically critical ports/terminals — would accelerate Iran’s economic breaking point, and we do not expect Washington to go that far,” Rapidan Energy Group analysts wrote on August 24.

By Aghakazim Guliyev