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China defends Iran ties after U.S. sanctions on Chinese entities

Beijing vows countermeasures after Washington targets dozens of Chinese firms and a major financial institution for dealings with Tehran. Tensions escalate ahead of Xi-Trump summit.

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Sophie Laurent · FX & Rates Desk · 29 Aug 2026 · 13:53 · 1 min read
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China defends Iran ties after U.S. sanctions on Chinese entities

China’s Foreign Ministry said on Tuesday it would take all necessary steps to safeguard its economic and trade relations with Iran following U.S. sanctions that targeted dozens of Chinese entities and threatened penalties against a major Chinese financial institution over dealings with Tehran.

Hours after the U.S. Treasury announced the measures, Chinese Foreign Ministry spokesperson Lin Jian told a regular press briefing that Beijing opposed unilateral sanctions and would continue normal cooperation with Iran. The statement underscored China’s role as Tehran’s largest oil buyer, which has provided an economic lifeline amid international pressure.

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The U.S. action is part of President Donald Trump’s broader economic pressure campaign against Iran, which has intensified in recent weeks. Earlier this month, the U.S. redeployed its only Asia-based aircraft carrier to the Middle East, while American forces canceled a scheduled exercise with South Korea due to personnel shortages linked to regional deployments around Iran.

Analysts noted that while China seeks to avoid a broader conflict, it has little incentive to assist Washington in easing tensions without receiving tangible concessions. Jesse Marks, founder of Rihla Research & Advisory and a former U.S. government Middle East policy adviser, said Beijing could respond by reducing Iranian oil purchases, restricting payments through Chinese banks, or tightening controls on dual-use components that could reach Iranian weapons programs.

The escalation comes ahead of a high-stakes summit in Washington on Sept. 24 between Chinese President Xi Jinping and President Trump, aimed at preserving a fragile trade truce between the world’s two largest economies. Observers warn that further sanctions or retaliatory measures could undermine efforts to stabilize bilateral relations before the meeting.

This article was produced with AI assistance and edited by a Finance Review Daily journalist.
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Written by
Sophie Laurent
FX & Rates Desk

Sophie covers currency markets and central bank policy across Europe, with a focus on how rate decisions ripple through FX pairs. She has been tracking the ECB's policy path since the start of the current easing cycle.

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