appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Kandy Wong

Ralph Jennings

Xinyi Wu

Washington’s secondary sanctions on countries trading with Iran are likely to push up China’s oil import costs in the short term and send a dire warning to Beijing’s policymakers, who analysts said need to urgently find ways to protect the country’s strategic interests abroad.
The shock waves arrived on Monday, when US President Donald Trump said a 25 per cent tariff would be imposed immediately on all goods and services imported from any country that “does business” with Iran, linking the measure to the civil unrest plaguing Tehran after weeks of anti-government protests.
While advising caution to see how Trump’s action will play out, analysts said China – Iran’s largest trading partner – may have to reconsider its approach.
“Iran likely faces indirect isolation as trade partners weigh US market access against Iranian ties overall,” said James Downes, co-director of Italian think tank the Centre for Research and Social Progress.
This could push Beijing towards alternatives, such as other states on the Persian Gulf, if the Iranian unrest and overall volatility continue into the future, he added.
Trade between the two countries amounted to US$9.09 billion in the first 11 months of 2025, according to data from Beijing’s customs bureau. This includes US$6.23 billion in exports from China to Iran, which account for just 0.18 per cent of China’s total outbound shipments. In the other direction, China’s imports from Iran stood at US$2.86 billion – only 0.12 per cent of its total.
Meanwhile, China had a cumulative US$4.5 billion in outbound direct investment in Iran in 2024, up 14.7 per cent from a year earlier, according to the government’s latest statistical bulletin.


The two countries signed a 25‑year strategic cooperation agreement aimed at deepening trade, economic and transport connectivity in March 2021.
“The economic impact on China could be significant, as the new 25 per cent tariff would likely be cumulative on top of existing US tariffs on China’s exports to the US,” said Rajiv Biswas, CEO of Singapore-based research firm Asia-Pacific Economics.
“The actual impact will depend on whether China decides to curtail trade with Iran.”
Liang Yan, a professor of economics at Willamette University in the US, warned that the secondary sanctions on Iran serve as a wake-up call for Beijing to determine how to protect its overseas interests.
“From Venezuela to Panama now to Iran, China has more stake in this than otherwise thought previously,” she said.
“China will think more about how to protect its assets abroad and how to protect its investments, but also how to build relations.”
Those assets would be “disrupted” if “the US goes further”, Liang said, adding China would likely be more careful in its overseas investments in the future, choosing middle or high-income countries.


Over the life of the comprehensive strategic partnership, a Hong Kong Trade Development Council research paper released in 2021 said that China had committed to between US$280 billion and US$400 billion in foreign direct investment.
This was primarily in the oil, gas and petrochemical sectors, which were in line with the multimillion-dollar infrastructure projects carried out under the Belt and Road Initiative.
The situation is fast-moving and complex, according to a report by the Economist Intelligence Unit released on Monday, though the research firm retained its view that “the regime will do whatever it can to survive, although this could include major changes at the top.”
Jayant Menon, a senior fellow at the ISEAS – Yusof Ishak Institute in Singapore, said it will take time to “see how all of this plays out” and “whether there’s a regime change”.
This is “bad for China”, especially if Chinese foreign direct investment and Iran’s oil deals come under review, he warned.
Iran shipped some 1.38 million barrels of oil to China a day in 2025, accounting for around 13 per cent of total imports, according to trade data intelligence provider Kpler, which ranks Iran as China’s second-biggest source of oil amid Beijing’s import diversification strategy, joining other vital suppliers such as Saudi Arabia, Iraq and Russia.
Responding to the 25 per cent tariffs, Ministry of Foreign Affairs spokeswoman Mao Ning said in a press conference on Tuesday that China has a “crystal clear stance that tariff wars have no winners,” adding the country would “resolutely defend its legitimate rights”.


Xi ends 3-day Trump visit with promise to meet again in November in China – as it happened

China and EU deadlocked on medical devices, still talking on PHEV curbs: source

Chinese marques in driving seat as high petrol prices accelerate EU shift to electric cars

Xi at White House, trade-war truce extension, Golden Week travel

China trade

Will Trump’s Iran tariffs force China to reshape its trade with Tehran?

China, Iran’s largest trading partner, would be among the countries most affected by new US tariffs targeting Tehran’s commercial ties. Photo: Reuters

How the ‘world’s supermarket’ rode out Trump’s tariffs – and grew even stronger

Vendors work at the Yiwu International Trade Market, a vast emporium for wholesale goods often dubbed the “world’s supermarket”, in Yiwu, Zhejiang province. The city has recorded strong growth in exports this year despite the US-China trade war. Photo: AFP

Vendors and buyers are seen at the Yiwu International Trade Market, a vast emporium for wholesale goods often dubbed the “world’s supermarket”, in Yiwu, Zhejiang province. The city has recorded strong growth in exports this year despite the US-China trade war. Photo: AFP

China prioritises export controls, supply-chain security to shield economy in 2026

Beijing has deployed export controls amid the US-China trade war as well as trade and diplomatic disputes with other countries. Photo: AP

‘Soft landing’: China, EU see progress in EV trade dispute with price floor option

A drone photo taken on June 29 shows electric vehicles parked at an export terminal at the Hangzhou section of the Beijing-Hangzhou Grand Canal in Hangzhou, east China’s Zhejiang province. Photo: Xinhua

Goodwill or necessity? Why is China slashing solar and battery subsidies?

Authorities announced on Friday China will cancel export VAT rebates for solar panels and lower rebates for batteries from 9 per cent to 6 per cent from April 1. The rebates for batteries will be cancelled on January 1, 2027. Photo: VCG via Getty Images

China slaps tariffs on EU cheese and cream amid trade row

China has slapped provisional anti-subsidy fees of up to 42.7 per cent on European producers of certain dairy products, including various types of cheese and cream. Photo: AFP

Economy

China Economy

Analysts urge China to protect strategic interests abroad after unexpected announcement, which is likely to push up oil import costs


Analysts urge China to protect strategic interests abroad after unexpected announcement, which is likely to push up oil import costs.


Will Trump’s Iran tariffs force China to reshape its trade with Tehran?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Analysts urge China to protect strategic interests abroad after unexpected announcement, which is likely to push up oil import costs

Analysts urge China to protect strategic interests abroad after unexpected announcement, which is likely to push up oil import costs