Bessent's Iran Sanctions Dodge China Ahead of Xi Talks — SkimNews
Get the Geopolitics newsletter
Daily geopolitics — wars, elections, sanctions, the diplomatic moves that move markets. Free.
- Treasury Secretary Bessent launched Operation Economic Outcast in late August—an "economic D-Day" to demolish Iran's economy—without naming China, even though Beijing buys more than 90% of Iranian oil and underwrites Tehran's foreign-currency needs, finished goods, factory parts, and infrastructure investment.
- Beijing responded by saying it would take "all necessary measures" to protect its right to engage with Iran, and Xi Jinping is set to arrive in Washington Wednesday for trade talks Thursday—just over a month before the US midterm elections.
- The August sanctions package designated nearly 60 entities, individuals, and vessels, including many in China and Hong Kong, but spared significant Chinese banking institutions and independent "teapot" refineries; former State Department official Daniel Fried noted "the rhetoric was ferocious, but the punch less so."
- In May, Beijing for the first time barred Chinese firms from complying with US sanctions on Chinese teapot refiners over their Iran ties—a move analysts say likely shaped the tamer-than-expected August package and signaled China's willingness to defend its commercial autonomy.
- Bessent estimated Iran has only about 30 million barrels of oil left outside the US naval blockade of the Strait of Hormuz to sell to China, but Iran's decentralized countersanctions network and the costs of sustained energy-market distress complicate any effort to wait Tehran out.
- Earlier wartime friction is already on record: the spring Trump-Xi summit was postponed after the war began; in March, the US issued a Russian oil sanctions waiver (during which Russian crude shipments to China rose); that same month, Beijing refused Trump's request to help reopen the Strait of Hormuz and vetoed a UN Security Council resolution on strait safety.
Why it matters: The Trump administration is publicly committed to "asphyxiating" Iran's oil-dependent economy—a campaign that mathematically cannot work without cutting off the Chinese refiners, terminals, shippers, and banks that handle Tehran's exports—but going after bigger Chinese institutions would detonate the fragile US-China trade truce just as Xi arrives for talks and US midterm elections approach, forcing a choice between an ineffective sanctions architecture and a separate economic war with Beijing.
Ask SkimNews
