US pressure on Iran hinges on China trade cooperation, analysts say

China's role in Iran's export economy

Beijing's public posture has hardened in recent months, with the Ministry of Foreign Affairs accusing Washington of economic coercion and defending what it calls the right of Chinese companies to conduct legitimate trade. Officials have warned that extraterritorial sanctions will be met with countermeasures, a stance that limits the diplomatic space for a negotiated arrangement.

Zhao Long, director of the Institute for International Strategic and Security Studies at the Shanghai Institutes for International Studies, said: "China is unlikely to accept a situation in which Washington determines what Chinese companies can legally trade with third countries." The remark captures the framing Beijing has used in private discussions with European and Gulf interlocutors, according to people familiar with those exchanges.

Arguments for a harder line

Supporters of a harder line within the US policy debate argue that only sustained secondary sanctions — and the credible threat of being cut off from the US financial system — can change Chinese corporate behavior. They point to past episodes in which major Chinese banks and state-owned firms curtailed dealings with Iran after enforcement actions, even if only temporarily.

Critics counter that the economic ties between China and Iran are now deeper and more institutionalized than in earlier sanctions episodes, and that Beijing's leadership under Xi Jinping views the issue as a matter of sovereignty as much as commerce. They warn that pushing too hard risks retaliation against US firms operating in China and complicates cooperation on other global priorities.

Limits of the current approach

The administration's reluctance to escalate openly with Beijing reflects those calculations. Officials have emphasized enforcement against individual violators while avoiding language that frames the issue as a systemic dispute with China. The result, analysts say, is a policy that is constrained from the start and that Iran's economy can absorb at the margin.

Whether that assessment changes may depend on developments in the Middle East rather than on bilateral US-China dynamics. A sharper escalation involving Iran — or a deal that materially lowers its nuclear capabilities — could shift Washington's calculus on whether the cost of confronting Beijing is worth the leverage gained.

For now, Iran's oil exports remain robust by historical standards, and Chinese refiners continue to operate in a legal gray zone, sometimes using ship-to-ship transfers and other workarounds. Until Beijing and Washington resolve their broader trade and technology disputes, analysts say, the secondary-sanctions route to Iran will remain a partial tool at best.