US President Donald Trump’s threat to impose a 25% tariff on countries trading with Iran risks reopening old wounds with Beijing, Tehran’s largest trading partner.
Iran became a focus of tension in ties between the United States and China during Trump’s first term (2017-21), when Washington toughened sanctions on Tehran and targeted China’s Huawei, accused of selling technology to the Islamic Republic.
The detention in Canada of Meng Wenzhou, the daughter of Huawei’s founder, at Washington’s request sparked retaliation and a hostage crisis, with bitter recriminations that continued throughout the rest of Trump’s first administration.
With Iran in its sights once again, the tariff would cause Chinese shipments to the United States to incur tariffs of more than 70%, higher than the effective 57.5% tariffs in place before Trump and Chinese President Xi Jinping reached a deal in October to de-escalate their trade war.
It is not yet clear which countries with trade ties to Iran Trump might target, and he has not named China.
“China will challenge (Trump) to do it. I can assure you that Trump has no guts to impose the extra 25% tariffs on China, and if he does, China will retaliate and he will be punished,” said Wu Xinbo, dean of the Institute of International Studies at Fudan University, “just like in the case of Meng Wenzhou.”
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back to the future
Some Chinese experts wondered why Trump seemed determined to revisit one of the most contentious foreign policy issues of his first term, despite having already made Beijing think twice about providing economic support to Tehran.
“China and Iran are not as close as they are in the public imagination,” said a Beijing-based Chinese academic who advises the Foreign Ministry on Iranian policy, requesting anonymity because he was not authorized to speak to the media.
China has drastically reduced its Iranian imports in recent years, according to Chinese customs data, as Chinese companies fear sanctions by the US government. China bought just $2.9 billion of Iranian goods in the first 11 months of last year, according to the latest customs figures, compared with a peak of $2 billion in 2018, during Trump’s first presidency.
That said, Beijing moves about 80% of the oil shipped by Iran through small independent refineries that trade off the books to circumvent US sanctions over the country’s nuclear ambitions.
China’s state-backed oil majors have not done any business with Iran since 2022. Some analysts say shipments from independents mean the total value of China’s purchases remains in the tens of billions of dollars.
“China is just an excuse, a kind of disguise for the Trump administration, to impose new pressure (on) Iran,” Wang Jin said at the Beijing Club for International Dialogue think tank.
Asked at Tuesday’s regular press conference about Trump’s tariff threat, the Chinese Foreign Ministry said Beijing will “resolutely safeguard its legitimate rights and interests.”
strong bets
Still, Iran remains a substantially bigger deal for China than Venezuela, where Trump launched a commando raid to capture President Nicolás Maduro to face drug trafficking charges in the United States.
Trump’s renewed push to isolate Iran from global trade flows is likely to deepen scrutiny of Xi’s flagship Belt and Road Initiative, in which Iran is a strategic hub for the passage of Chinese goods to the Middle East, analysts say.
Uncertainty is also increasing over whether Trump will visit Beijing in April, as expected, with analysts anticipating the announcement of a broad trade deal with Xi.
“Whether Trump’s tariffs are enforceable remains an open question,” said Xu Tianchen, a Beijing-based analyst at the Economist Intelligence Unit. “Last year he announced tariffs related to ‘illicit’ trade in Russian oil, but their implementation was spotty.”
“Trump is also the kind of person who likes to bully the weak,” Xu said. “It should manage its actions to prevent these tariffs from escalating into direct confrontation with China.”
With information from Reuters
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