China warns it will protect its interests after US widens sanctions against Iran

August 25, 2026

The United States has announced an expansion of economic sanctions against Iran and its trading partners, which Treasury Secretary Scott Bessent called "the single greatest financial offensive ever" against the country. China, Iran's largest oil customer, has strongly rejected these measures, stating it will take necessary actions to protect its interests and asserting that such unilateral sanctions are illegal. The new sanctions package targets approximately 60 entities, individuals, and vessels involved in helping Iran evade existing restrictions and trade oil.

Who is affected

Iran and its economy
China (Iran's biggest oil buyer)
Chinese banks and businesses trading with Iran
Iranian Economy Minister Ali Madanizadeh and the Iranian government
Approximately 60 entities, individuals, and vessels sanctioned by the US Treasury
Iran's trading partners including Pakistan, Turkey, and Iraq
Global economy (due to oil price hikes and Strait of Hormuz blockage)
Banks and businesses worldwide that maintain financial ties with Iran

What action is being taken

The US Treasury is imposing sanctions on almost 60 entities, individuals, and vessels
The US is maintaining a naval blockade that is slowing traffic
Iran is blocking exports through the Strait of Hormuz
China is processing the majority of Iranian oil exports (though volumes have declined)
Beijing has tightened export controls on rare earths
President Trump is phoning world leaders with specific requests to cease interactions with Iran

Why it matters

This represents a significant escalation in US-Iran tensions occurring six months into the Iran war, with the US declaring it is "no longer managing the Iranian threat" but "ending it." The conflict has already caused worldwide oil price increases due to Iran's blockade of the critical Strait of Hormuz waterway. The sanctions threaten to trigger a broader economic confrontation between the US and China, the world's two largest economies, with China controlling most rare earth processing—materials crucial for high-tech manufacturing. The effectiveness of these measures is questionable since China has historically refused to comply with unilateral US sanctions and continues to be Iran's primary oil customer.

What's next

Planned talks between President Trump and Chinese President Xi Jinping next month
President Trump will be phoning world leaders with specific requests to cease interactions with Iran

Read full article from source: BBC