US Sanctions Threats on Iran Leave China's Trade Future Hanging

The US Treasury Secretary's recent threat of sanctions against nations buying Iranian crude oil has put China in a precarious position. Scott Bessent, the Treasury Secretary, did not explicitly mention China as one of the targeted countries, but it is clear that Beijing is Washington's next target.

China is Iran's largest oil customer, and any attempt to curb this trade would have significant implications for Beijing. The US has already imposed new sanctions on 60 individuals, companies, and vessels linked to Iranian trade, including some in mainland China and Hong Kong.

The fragile calm between the US and China, which appeared to be stabilizing after the May summit between President Xi Jinping and President Donald Trump, is once again being tested. The Pentagon has added dozens of Chinese companies, including Alibaba, Baidu, and BYD, to its list of 'Chinese military companies,' a designation that can restrict these companies' access to US capital and market.