In the long contest between American economic power and Chinese strategic patience, Washington's latest sanctions against Iran reveal as much about what the United States cannot do as what it can. By targeting sixty smaller intermediaries rather than the major Chinese banks that sustain Iran's oil economy, the Treasury Department has drawn a line it is not yet willing to cross — constrained by a September summit between Trump and Xi that neither side can afford to sacrifice. The episode illuminates a recurring tension in great-power rivalry: the most consequential pressure is often the pressur
US Iran sanctions test China-Trump summit diplomacy
Maintain baseline engagement with Iran, but do not abandon the summit.
Mark
So the US is sanctioning Iran, but it's tiptoeing around China. Why not just hit the big banks if that's where the money flows?
Mimi
Because Trump and Xi have a summit scheduled for September 24. Both sides have invested in stabilizing the relationship after the tariff wars of 2025. You don't blow that up over secondary sanctions.
Luke
But the source doesn't say what happens if the US does escalate. We know experts predict China will respond, but we don't know the actual trigger point or what retaliation looks like.
Mark
So this is a waiting game. The US is testing how far it can go without crossing a line.
Mimi
Exactly. The sanctions target 60 smaller entities—refineries, intermediaries, vessels. It's pressure without provocation. China buys 90 percent of Iran's oil, so there's real leverage here, but it's being applied carefully.
Luke
One thing to note: the source attributes the "economic D-Day" language to Bessent, but when asked directly about Chinese banks, his answer was vague. "No one is above the reach of US sanctions" is not the same as "we will sanction Chinese banks."
Mark
What does China actually want here?
Mimi
To maintain Iran as a partner while keeping Gulf states like Saudi Arabia and the UAE happy. It's a balancing act. Iran is important but not irreplaceable.
Luke
And the Middle East has changed. The US military setbacks since February have weakened America's security umbrella. That shifts the calculation for Beijing.
Mark
So China feels less pressure to comply because the US looks weaker?
Mimi
Not weaker exactly, but less able to guarantee stability. That makes China less willing to sacrifice Iran to please Washington.
Luke
The source quotes experts saying China will "defend its economic interests" if hit with secondary sanctions, but it doesn't define what that defense looks like. Retaliation? Tariffs? Rare earth cutoffs like 2025?
Mark
And the summit is the real pressure point.
Mimi
Right. Both sides need it to happen. So neither will take drastic action beforehand. But after September 24, all bets are off.
O Pulso
- Washington declared its Iran sanctions an 'economic D-Day' but quietly exempted the major Chinese banks that form the true financial backbone of Tehran's oil revenues.
- China, which absorbs roughly 90 percent of Iranian oil exports through a network of small refineries and intermediaries, dismissed the measures as illegal and ordered its businesses to disregard earlier restrictions.
- A September 24 summit between Trump and Xi looms over every decision, creating a diplomatic ceiling that prevents either side from escalating to the moves that would actually force a reckoning.
- Analysts warn that if the US extends secondary sanctions to major Chinese firms, Beijing will defend its economic interests — but for now, both capitals are choosing calendar over confrontation.
- Beneath the diplomatic restraint, a slower collision is taking shape: China is playing a long game, content to let American overreach compound its own errors while maintaining its position in the Middle East.
In the long contest between American economic power and Chinese strategic patience, Washington's latest sanctions against Iran reveal as much about what the United States cannot do as what it can. By targeting sixty smaller intermediaries rather than the major Chinese banks that sustain Iran's oil economy, the Treasury Department has drawn a line it is not yet willing to cross — constrained by a September summit between Trump and Xi that neither side can afford to sacrifice. The episode illuminates a recurring tension in great-power rivalry: the most consequential pressure is often the pressure that goes unapplied.
The United States has unveiled a new sanctions package aimed at strangling Iran's revenues, but the strategy carries a built-in contradiction: Washington needs China's cooperation, or at least its acquiescence, and cannot afford to push Beijing too hard. Treasury Secretary Scott Bessent framed the measures as an 'economic D-Day,' warning that no entity aiding Tehran would escape American economic power. The actual package, however, told a more cautious story — sixty smaller entities, vessels, and intermediaries spread across mainland China and Hong Kong, while the major Chinese banks that channel billions into Iran's economy were left untouched.
China is Iran's indispensable partner, purchasing around 90 percent of its oil exports through small 'teapot' refineries that repackage the crude to sidestep American restrictions. When the US targeted some of these refineries in May, Beijing's Commerce Ministry simply instructed domestic businesses to ignore the sanctions. Bessent accused China of financing the world's largest state sponsor of terrorism. The accusation registered; the consequences did not follow. China's Foreign Ministry responded this week with careful legal language, insisting that its cooperation with Iran operates within international law and should not be disturbed.
What keeps the pressure campaign measured is the September 24 meeting between Donald Trump and Xi Jinping in Washington. Both governments have invested in this summit, and neither wants Iran to derail it. Analysts at the International Crisis Group expect both sides to avoid drastic moves before the meeting — though they note that China will respond forcefully if the US escalates to secondary sanctions targeting major Chinese companies and banks.
The broader strategic picture complicates Washington's hand further. American military setbacks since the Iran war began in late February have weakened the credibility of its regional security umbrella. Political scientists tracking Beijing's posture argue that China has no intention of severing ties with Iran or helping the US reassert dominance in the Middle East — but neither will it fight a decisive battle over the issue. The preferred approach, in this reading, is to maintain baseline engagement, defend core economic interests if directly attacked, and allow American missteps to accumulate on their own. The smaller entities absorb today's sanctions. The summit stays on the calendar. And the larger collision, analysts suggest, is simply being deferred.
The United States has announced a new sanctions package against Iran designed to choke off its revenue streams, but the strategy carries an awkward constraint: Washington cannot afford to alienate China in the process. Treasury Secretary Scott Bessent called the measures an "economic D-Day" against Tehran on Monday, warning that any entity engaging with the Iranian regime would face the full force of American economic power. Yet the initial package reveals the limits of that threat. Rather than targeting China's major banks—the financial arteries that pump billions into Iran's economy—the sanctions focus on 60 smaller entities, individuals, and vessels scattered across mainland China and Hong Kong. These are the supporting cast: the intermediaries, the independent refineries, the logistics operators that keep the oil flowing and the technology moving.
China is Iran's lifeline. The country purchases roughly 90 percent of Iranian oil exports, much of it through small "teapot" refineries that rebrand the crude or route it through intermediaries to slip past American restrictions. When asked directly whether Chinese banks would be included in the sanctions, Bessent's answer was carefully calibrated: no one was above the reach of US power. But the actual policy told a different story. In May, when the US targeted several of these refineries, China's Commerce Ministry ordered domestic businesses to ignore the restrictions. Bessent responded by accusing China of funding the world's largest state sponsor of terrorism. The accusation landed, but the sanctions did not follow—at least not yet.
Beijing's response was measured and legalistic. Chinese Foreign Ministry spokesperson Lin Jian said on Tuesday that cooperation between China and Iran "has always been conducted within the framework of international law" and should not be disrupted. This framing matters. China is performing a delicate balancing act. It needs Iran as a partner—the country is useful, important, a source of energy and strategic alignment in a multipolar world that Beijing is trying to construct. But Iran is not irreplaceable. China also maintains substantial trade relationships with Saudi Arabia and the United Arab Emirates, Iran's regional rivals. Beijing wants to be seen as a stable, responsible superpower, not as a rogue-state enabler. The sanctions package, and the broader question of Iran policy, will likely surface when Iranian President Masoud Pezeshkian attends the Shanghai Cooperation Organization summit in Kyrgyzstan at the end of August.
What complicates Washington's pressure campaign is the calendar. Donald Trump is scheduled to meet Xi Jinping in Washington on September 24. Both countries have invested political capital in this summit. In 2025, when Trump tried to force China's hand with massive tariffs, Beijing threatened to cut off rare earth mineral supplies, and the administration retreated. Since then, Trump has worked to stabilize the relationship, including a high-profile summit in Beijing in May. Neither side wants to wreck the September meeting over Iran. William Yang, a senior analyst at the International Crisis Group, told Deutsche Welle that he expects both countries to avoid drastic action that would jeopardize the summit. But he added a crucial caveat: China will defend its economic interests if the US escalates to secondary sanctions targeting major Chinese companies and banks.
The strategic landscape in the Middle East has shifted in ways that make China less willing to bend to American pressure. Since the Iran war began in late February, the US has suffered military setbacks that have called into question its security umbrella over the region. Gu Xuewu, a political scientist at the University of Bonn's Center for Global Studies, argues that Beijing will not yield to pressure to sever ties with Iran or help the US maintain its regional presence. China's Foreign Ministry this week rejected what it called Washington's strategy of "economic asphyxiation," arguing it will only intensify Middle Eastern tensions. Gu said China disapproves of American assertiveness in the region and is unwilling to accept the US using every tool to block cooperation between Arab states and China in energy, military affairs, science, technology, and trade.
What Beijing will not do, Gu added, is fight a decisive battle with the US over the Middle East. It is enough, in his view, to provoke Washington into making mistakes and then allow those mistakes to compound without interference. This suggests a long game: maintain baseline engagement with Iran, defend economic interests if directly attacked with secondary sanctions, but do not abandon the summit. Gu predicted a collision course over Iran even as the two leaders sit down for friendly discussions in September. The question is whether the US will escalate sanctions to target major Chinese banks and firms—a move that would force Beijing to choose between its relationship with Iran and its relationship with Washington. For now, the smaller entities absorb the pressure, and the summit remains on the calendar.
Citações Notáveis
No one was above the reach of US sanctions.— Treasury Secretary Scott Bessent, when asked whether Chinese banks would be targeted
Cooperation between China and Iran has always been conducted within the framework of international law and should not be interfered with or disrupted.— Chinese Foreign Ministry spokesperson Lin Jian
Beijing will not yield to US pressure to sever economic and trade ties with Iran or to help the US maintain its presence in the Middle East.— Gu Xuewu, political scientist at the University of Bonn's Center for Global Studies
Quer a matéria completa?
Leia o original em Deutsche Welle ↗
Politics & Governance