China Threatens Retaliation If US Disrupts Its Iran Trade

China warned Washington on Tuesday against interfering with its commercial ties to Iran, signaling potential retaliation if the U.S. broadens sanctions against Chinese companies as part of its campaign to isolate Tehran.

Beijing said its dealings with Iran were lawful and rejected Washington’s attempt to impose restrictions beyond U.S. jurisdiction.

“China's cooperation with Iran is conducted within the framework of international law and should not be disrupted,” foreign ministry spokesman Lin Jian said Tuesday.

Beijing Rejects Unilateral Pressure

The warning followed new U.S. measures against companies in mainland China and Hong Kong accused of supporting Iranian trade and procurement.

The sanctions stopped short of targeting major Chinese banks or energy groups, but Washington indicated that further action remained possible.

Treasury Secretary Scott Bessent said “no one is above the reach of U.S. sanctions,” as his department launched what it called “Operation Economic Outcast,” a broader effort to cut Iran off from international commercial activity.

Beijing responded by attacking the basis of unilateral American measures.

“China has made clear on many occasions its firm opposition to illicit unilateral sanctions that have no basis in international law or the authorization of the United Nations Security Council,” Lin said.

He added that “economic wars and maximum pressure are not the solution,” warning that such policies could intensify the conflict and disrupt the international economic and financial system.

Retaliation Risk

China said it was prepared to act if a wider U.S. sanctions campaign affected its interests.

“China will take all necessary measures to firmly safeguard its rights and interests,” Lin said.

Beijing has already developed mechanisms allowing it to impose countermeasures against foreign individuals and organizations involved in restrictions on Chinese companies and supply chains.

Washington has previously sanctioned some independent Chinese refiners that process Iranian crude. Chinese authorities instructed domestic companies not to comply with those measures.

China remains Iran’s largest oil customer, accounting for 90 percent of Iranian oil purchases according to the figures provided.

Large state-owned refiners generally observe restrictions on Iranian crude, while smaller private refiners known as “teapots” continue to handle supplies from Iran.

Trade Truce Raises Stakes

A major escalation against major Chinese companies could spill into the broader U.S.-China relationship.

Presidents Donald Trump and Xi Jinping are expected to meet in Washington in September, with the two governments also managing a one-year truce in their trade dispute.

The U.S. measures announced this week avoided large Chinese financial institutions and energy companies, limiting the immediate confrontation.

But Peking University scholar Wang Dong told the Financial Times tougher secondary sanctions would provoke a stronger response.

“If they do, then of course China will absolutely defend its national interest,” he said.

China Pushes Against Wider Escalation

Beijing is simultaneously pressing for de-escalation in the U.S.-Iran conflict.

Chinese officials have warned that continued disruption to shipping through the Strait of Hormuz carries economic consequences well beyond Iran.

Zhu Feng, an international relations expert at Nanjing University, said China did not want to become directly involved in the confrontation but remained exposed to instability in Gulf energy markets.

China relies heavily on Middle Eastern oil, including supplies from Saudi Arabia and Iraq.

President Xi has recently met Jordan’s King Abdullah II, while foreign minister Wang Yi has held talks with his Kuwaiti counterpart. Iran and the war in Gaza were discussed in both meetings.

For Beijing, the message combines opposition to U.S. economic coercion with pressure for the conflict itself to be contained.