In brief
After U.S. Treasury Secretary Scott Bessent announced a sweeping new sanctions package against Iran and its partners, China publicly declared it will safeguard its businesses and the broader trade relationship. The move underscores the risk that China’s status as the world’s largest importer of Iranian oil—and a major mining hub for critical minerals—could destabilise the fragile ecosystems built on rare‑earth supply chains. Analysts suggest the package will have limited short‑term impact owing to China’s historical resistance to unilateral sanctions and its strategic leverage over rare‑earth exports. The tension comes as world leaders prepare for talks between President Trump and President Xi, while green‑energy firms await clearer signals that supply chains will not be severely disrupted.
China has vowed to protect its interests after the US announced plans to widen economic sanctions against Iran and its trading partners, which include Beijing.
Foreign ministry spokesman Lin Jian said China was firmly opposed to what it called "illegal unilateral sanctions" and would take "all necessary measures" to safeguard its rights.
The announcement came after US Treasury Secretary Scott Bessent warned that any nation financially partnering with Iran would be isolated, describing the new measures as "the single greatest financial offensive ever" against Iran.
China is the largest buyer of Iranian oil, although trade has fallen under the US blockade of Iran's ports. Lin stressed that cooperation between China and Iran "has always been conducted within the framework of international law and should not be interfered with or disrupted."
Bessent also said that banks and businesses would share in Iran's isolation if they refused to cut ties, and that "no one was above the reach of US sanctions". The warning precedes planned talks between Donald Trump and Xi Jinping next month.
Washington's approach poses a particular risk for the already fragile supply of critical minerals. China processes the majority of the world’s rare earths, forcing high‑tech manufacturers to rely heavily on Chinese exports. The Biden administration has tightened export controls on rare earths as part of earlier trade negotiations, highlighting how sanctions can ripple through the entire technology ecosystem.
Iranian Economy Minister Ali Madanizadeh said Tehran was "fully prepared" to counter the wider sanctions, expressing confidence that the U.S. would suffer another defeat for its strategy. He described a two‑year plan to manage the sanctions and noted that Iran had "been waiting for these plans for a long time".
Experts suggest the sanctions will have a muted immediate effect on Iranian energy revenues due to China’s continued purchase of Iranian oil, which could be seen as a direct brunt to the global clean‑energy transition. Analysts warned that the package might not deter the Iranian regime, which has historically absorbed economic pain and then externalised it onto its citizens. The sanctions also threaten to push other trade partners—such as India and Russia—into new associations, potentially reallocating global supply chains for lithium, cobalt, and other battery‑critical minerals.
