RESOLVING THE LEDGER
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See the full story · 17 sourcesx whatsapp-stroke copylink google Add Al Jazeera on Google info By John Power Published On 24 Aug 2026 24 Aug 2026 US President Donald Trump’s administration has said it aims to sever “every” economic lifeline sustaining Iran in what officials have warned will be the toughest sanctions campaign ever seen.
The threat, if followed through, would mean putting China, Iran’s biggest trade partner, squarely in the crosshairs of US sanctions.
That would be a risky proposition for Washington due to the likelihood of severe blowback from Beijing – so much so that some analysts doubt that the Trump administration’s measures, set to be announced on Monday, will match its rhetoric in scope or severity.
While the Trump administration has yet to provide details about what it has dubbed “economic D-Day”, US officials have made it clear that Iran’s trade partners are in their sights.
In an op-ed in the Financial Times on Sunday, US Treasury Secretary Scott Bessent warned that countries fearful of breaking ties with Iran should not “discount the cost of testing Washington”.
“The president has created the conditions to leverage every agency, every authority and action many assumed we would never summon,” said Bessent, who is scheduled to unveil the sanctions in a news conference at 17:00 GMT.
Brett Erickson, a sanctions expert and managing principal of Obsidian Risk Advisors, said the Trump administration’s willingness to target China will be an indication of its resolve to mount a sustained economic offensive against Tehran.
“That is not a relationship you degrade lightly. If the United States decides to really bring China into the ring, it will be a serious indication that the United States plans to wage this economic war for a prolonged period of time,” Erickson told Al Jazeera.
“If they do not, it will be a tacit admission from the Trump administration that they do not believe economic hardship can seriously bring about a change in the Iranian position,” Erickson said.
Any US pressure campaign that excludes China would be necessarily limited in scope given the outsized importance of Beijing and Tehran’s economic ties.
China reported $9.96bn in two-way trade with Iran in 2025, a figure that does not include some $31.2bn in Iranian oil shipments, according to the US-China Economic and Security Review Commission.
China’s purchases of Iranian oil have been a particularly crucial lifeline for Tehran, accounting for about 90 percent of its oil sales, according to the US Treasury Department.
Until now, the Trump administration’s Iran sanctions regime has targeted only a handful of relatively minor China-based entities.
In April, the Trump administration sanctioned Hengli Petrochemical (Dalian) Refinery, one of China’s largest independent refineries, commonly known as “teapots”, over its alleged purchases of Iranian oil.
The Trump administration also imposed sanctions on four firms in Hong Kong in May, followed by measures in August targeting six China and Hong Kong-based shipping lines.
Washington has so far left Chinese financial institutions, widely viewed as a key node in Iran’s oil trade, untouched.
“Cutting off Chinese economic ties will be key to the success of any attempt to increase pressure on Iran. However, the United States won’t do it,” Jennifer Kavanagh, a senior fellow at Defense Priorities, a Washington-based foreign policy think tank, told Al Jazeera.
“If it does, China will retaliate and has the leverage to impose costs on the US,” Kavanagh said.
China has vigorously opposed US sanctions against Iran, arguing that economic pressure will not resolve the nearly six-month-long war.
In a statement on Sunday, China’s Ministry of Foreign Affairs said that Beijing remained “committed to promoting peace talks” and willing to “continue making efforts for the early restoration of peace and tranquility in the region”.
Iran, for its part, has threatened to retaliate against countries that support the US measures.
Mohsen Rezaei, the secretary of Iran’s Supreme National Security Council, warned on Saturday that any country that participated in sanctions would be considered an “enemy” and that “not a drop” of oil would leave the Gulf if Iran’s neighbours joined the US campaign.
Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin University of China, said Beijing would inevitably take countermeasures in response to any US sanctions and their intensity would depend on the “severity of US actions”.
“China maintains its desire to avoid conflict, but its bottom line cannot be crossed,” Wang told Al Jazeera.
For Trump, invoking Beijing’s ire would risk not only economic retaliation, but also unravelling efforts to stabilise US-China relations only weeks before the US president is due to host Chinese leader Xi Jinping at the White House.
Trump’s scheduled summit with Xi on September 24 would be their second face-to-face meeting aimed at lowering the temperature in US-China relations since Washington launched its war on Iran in late February, following Trump’s visit to Beijing in May.
Zichen Wang, deputy secretary-general of the Center for China and Globalization (CCG) think tank in Beijing, said neither Beijing nor Washington were likely to want Iran to define the upcoming summit.
“Unless the US measures become very broad or directly target major Chinese interests, both sides are likely to try to keep this dispute from overwhelming the wider agenda,” Wang told Al Jazeera.
“That said, Chinese restraint should not be read as an absence of response,” Wang said.
“Beijing has often avoided immediate rhetorical escalation, but when unilateral US actions have materially affected Chinese companies or other Chinese interests, it has shown a growing willingness to answer with practical countermeasures.”
While the Trump administration could potentially make it more challenging and expensive for China to continue its economic support of Iran, it is unlikely to be able to...
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