China has forcefully rebuked U.S. sanctions targeting small Chinese companies that trade with Iran. Amid President Donald Trump’s reluctance to sanction bigger Chinese targets, Beijing senses American weakness.
The Chinese rebuke follows Treasury Secretary Scott Bessent’s announcement of new, Iran-related sanctions on Monday. Bessent hyped up these sanctions as constituting an “economic D-Day,” and the “single greatest financial offensive ever marshaled against an adversary.” The world was told to expect a devastating no-quarters-given assault on anyone who dared deal with Iran.
In reality, these sanctions are more akin to a river-crossing reconnaissance operation than they are the pivotal 1944 invasion of Europe. After all, major Chinese banks, crucial to Iran’s export economy, have been excluded from U.S. action. And just as D-Day couldn’t have succeeded without the seizure of Omaha Beach by the Rangers and 1st Infantry Division, excluding big Chinese banks renders Bessent’s metaphor absurd.
China knows as much.
Beijing knows that Trump has left its bigger banks off the target list for two reasons. First, because he wants to preserve plans for a White House meeting with Communist Party Chairman Xi Jinping next month. Second, because Trump wants to avoid retaliation from Beijing that might cause U.S. economic difficulties in the run-up to the November midterm elections. As an extension, the Trump administration is delusional in hoping that these limited sanctions will persuade China to cut off Iran in fear of harsher sanctions otherwise following.
Had the United States imposed sanctions on the full gamut of Iran’s partners in China, Beijing would be enraged but also in a panic. The Chinese economy is struggling, and the choice between continued engagement with the U.S. or Iran would ultimately be a no-brainer for Xi. For Trump to impose that understanding, however, Beijing would first have to believe that Trump’s resolve was immovable.
China plainly does not sense that resolution. On the contrary, China senses Trump is weak.
Addressing the sanctions, a Chinese foreign ministry spokesperson observed that “China is closely following the developments and will do everything necessary to firmly safeguard its rights and interests.” The spokesperson then repeated the pledge twice that China “will do everything necessary to firmly safeguard its rights and interests.” The state media Global Times newspaper added, “China has a comprehensive range of legal and policy tools at its disposal and will take all necessary measures to firmly safeguard its legitimate rights and interests.” This is signaling language that Beijing has no respect for such timid American action.
Indeed, China senses a broader diplomatic and economic opportunity here. A separate Global Times editorial highlighted Trump’s new tariffs on Canada as evidence of America’s unreliability as a trade partner. In contrast, China, the newspaper said, offers “a stable, predictable, and mutually beneficial option for countries.”
It’s a powerful message. Alongside Trump’s recent restriction on U.S. military exercises with South Korea, the U.S. increasingly appears more concerned with appeasing adversaries than it does maintaining key alliances. China is certainly amplifying that perception.
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To be sure, the nations of the world know that dealing with China isn’t pleasant. It ultimately entails the subjugation of their political authority and the surrender of their intellectual property. The problem for the U.S. is that while China offers reliable if often unpleasant economic engagement, the U.S. now appears capriciously unpredictable. Needing economic growth and, in many cases, the support of their electorates, foreign governments do not like unpredictability.
In essence, then, Trump’s tariff-sanctions policy adopts the worst of all worlds. It alienates longtime partners while reeking of an American weakness that is ripe for Chinese communist exploitation.