China has denounced the threat of US sanctions for its trade with Iran, saying any such measures would be illegal, and warned it will take “all necessary measures” to protect its national interests. Beijing’s rejection of the US threat of secondary sanctions for any country or entity continuing to trade with Tehran had been predicted. China buys an estimated 80% of Iran’s oil exports and it has defied previous US efforts to limit the flow of revenue to the Tehran regime.
Its statement of opposition raises the question of how far the Trump administration would be prepared to go in confronting China and its financial system in the drive to isolate Iran. In making the sanctions threat on Monday, the US treasury secretary, Scott Bessent, announced an initial set of sanctions on 60 individuals, entities and vessels for alleged involvement in trade with Iran, but there were no Chinese financial institutions on the list, despite their involvement in financing the Iranian oil trade. The omission reflected US caution.
Asked why the Trump administration had not declared immediate sanctions and had stopped short of naming potential sanctions targets, Bessent replied: “Why would I want to blow up the global financial system?” Financial and trade experts say the administration is well aware of the risk of Chinese retaliation ahead of a scheduled summit next month between Donald Trump and Xi Jinping. China could strike back through financial markets or with limits on its export of critical minerals. The spokesperson for China’s foreign ministry, Lin Jian, told reporters on Tuesday: “Cooperation between China and Iran has always been conducted within the framework of international law and should not be interfered with or disrupted.
China will take all necessary measures to firmly safeguard its own rights and interests.” Iran has been economically wrecked by the war and the accompanying US blockade, but it maintained its defiance in response to Bessent’s threats of total isolation. The economy minister, Ali Madanizadeh, said on state television: “Our defence is no longer so defensive; the enemies should wait for an attack.” An oil tanker was reportedly hit on Tuesday by an unidentified projectile at the mouth of the strait of Hormuz. Only two commercial vessels were reported to have successfully made the transit through the narrow waterway on Monday.
The declaration of what Bessent called Operation Economic Outcast suggests that the prospects of a resolution to the conflict with Iran are still remote. It also suggests a lean towards economic measures and away from military force after a six-month war that has not brought about the intended Iranian capitulation. The near closure of the strait of Hormuz and knock-on effect on oil prices and the global economy is a political risk for Trump as congressional elections loom in November.
The US defense secretary, Pete Hegseth, insisted that further military action was not off the table. Bessent called the sanctions campaign unprecedented and compared it to the D-day Normandy landings, a turning point in the second world war. He said the deadlines imposed would depend on individual circumstances.
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