China has warned the United States not to hurt its financial interests in Iran after President Donald Trump meted out more economic punishment to Tehran this week and demanded that the world join in. Trump's latest sanctions will present questions that test the resolve of both China and the U.S. Beijing is Iran’s most important trade partner and the buyer of over 95 percent of its crude oil before the war.
China’s sanctions-busting oil refineries acquired the crude at heavily discounted rates from Iran’s “shadow fleet” network of vessels and intermediaries. Trump’s threat against governments refusing to help him turn Iran into a global economic outcast is a test of Beijing’s loyalty to Tehran and also a bet that it will want to preserve its hard-won stability with Washington ahead of Chinese leader Xi Jinping’s high-profile state visit to the U.S. next month—his first official visit in over a decade. Xi’s government has its own cards to play before abandoning Tehran, an ideological ally.
Trump’s desire to lock in better trade terms with China, including more access for American companies, remains a top agenda item and can only happen if the Chinese president’s travel isn’t used as a U.S. propaganda tool to declare victory in the Iran war. Beijing also has already demonstrated that the White House is amenable to its political demands when they are tied to the upcoming state visit—a $14 billion U.S. arms sale to China-claimed Taiwan remains in limbo after Chinese officials warned it could get in the way of Trump’s next summit with Xi. Trump also faces the uncomfortable truth that China has almost singlehandedly cushioned the global energy crisis triggered by conflict in the Middle East thanks to its large domestic stockpile of crude oil, which allowed it to cut imports within weeks and prevent a prolonged spike in oil prices, which would’ve raised U.S. gas and diesel costs too.
The Trump administration all but acknowledged this fact when it exempted Iran’s oil exports at sea from the U.S. blockade in two separate waivers—both now expired—although it presented them as leverage over Tehran.
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