Strangling China to stop Iran (and Russia). But Trump is not ready for a showdown with Xi

 The People’s Republic of China is prepared to retaliate against the United States should the ‘D-Day’ announced by Trump – namely, secondary sanctions against anyone doing business with Iran – also affect Beijing’s interests. Lin Jian, spokesperson for the Chinese Ministry of Foreign Affairs, said yesterday that trade with Iran is their own business and that China “will do whatever is necessary to resolutely safeguard its rights and interests”. According to many observers, however, before economically strangling the Iranian regime, Trump must assess how far he is prepared to go in clashing with China, and so far the US president has shown himself to be more inclined to safeguard agreements with Beijing. Above all, Trump has no intention of calling off the forthcoming bilateral summit with Chinese leader Xi Jinping, which is due to take place – if all goes well – in a month’s time, on 24 September, in the United States. 

After all, although there has been some slowdown in recent months, China remains the main buyer of Iranian oil and, for this very reason, represents the main channel through which the Tehran regime still manages to convert its crude oil into currency. Washington has sought to curb Iranian trade by targeting companies, ships and intermediaries, and by imposing new sanctions on Chinese and Hong Kong entities accused of helping Iran procure dual-use technologies for its nuclear and missile programmes. However, according to the majority of analysts – and even some Chinese observers – the US Treasury has so far targeted minor players such as certain independent Chinese refineries that purchase Iranian crude, the so-called ‘teapots’. None of the major Chinese banks, nor any of the country’s major energy companies, have been included on the US blacklists, and this is no coincidence: targeting the giants would mean turning the pressure on Tehran into a direct confrontation with Beijing. In the tariff war with Washington, China has so far had the upper hand, demonstrating that it can hit US strategic interests through restrictions on rare-earth exports – a sector in which the People’s Republic holds a near-monopoly. There is therefore a gap “as big as China” in the US strategy against Iran, Tim McDonnell wrote yesterday in Semafor, because to bring about a breakdown in trade relations between Beijing and Tehran, the US would have to impose sanctions “against Chinese banks, state-owned enterprises and economically strategic ports and terminals”, and then expect retaliation. 

Whilst, from a commercial perspective, the Trump administration is still seeking a balance with Beijing – which supports and funds Washington’s enemies – from a military standpoint, the situation is quite different. To justify cuts and cancellations of joint military exercises with South Korea, Trump spoke of saving taxpayers’ money and having other military priorities linked to the war in Iran. However, Beijing sees a broader signal in these small yet momentous changes: “An increasingly clear trend is emerging,” a Chinese military expert told the Global Times yesterday – the Chinese Communist Party’s English-language propaganda newspaper – “the era in which the United States was willing to bear a substantial portion of the cost of its allies’ security is coming to an end”. Trump’s strategy may be to ease military pressure on North Korea in the hope of reopening a channel of communication with the dictator Kim Jong Un, but the message could be misinterpreted by all America’s allies in the Asia-Pacific region, who might be tempted to move closer to Beijing once again. 

Meanwhile, the People’s Republic is not only the country with which Trump must negotiate, but also the major financier and facilitator of systems hostile to the West, from Iran to Russia via North Korea. Yesterday, a fire broke out at the Amur Gas Chemical Complex, a plant still under construction in the Russian Far East, established as a joint venture between the Russian company Sibur and the Chinese giant Sinopec, and set to become one of the world’s major centres for the production of polyethylene and polypropylene. The blaze left over a hundred people injured and claimed the life of at least one Chinese worker. Investigations into the causes are ongoing, and there is no official confirmation of Ukrainian involvement. But the point is another: whilst Washington is weighing every move to avoid turning the economic war against Iran into a clash with China, Kyiv continues to seek ways to undermine Russia’s industrial base. Those, indeed, are sanctions that work.