China's government said this week it will take 'all necessary measures' to protect its interests after the United States unveiled a new round of sanctions targeting Iran, which US Treasury Secretary Scott Bessent dubbed 'Operation Economic Outcast.' At a regular briefing in Beijing, Chinese Foreign Ministry spokesperson Lin Jian said cooperation between China and Iran has always been conducted within the framework of international law and should not be interfered with or disrupted, according to reporting by The Guardian and Al Jazeera.

The response marks a fresh escalation in trade and diplomatic tensions between Washington and Beijing, just weeks before a planned summit between US President Donald Trump and Chinese leader Xi Jinping, set for September 24 at the White House. China is Iran's largest oil buyer, purchasing an estimated 80% of the country's exports today, according to The Guardian. Bilateral trade between the two countries totaled $9.96 billion in 2025, not including another $31.2 billion in Iranian oil shipments, according to figures cited by Al Jazeera from the US-China Economic and Security Review Commission.

The episode shows how a distant conflict can ripple through trade chains Brazil also depends on. Just as China seeks to diversify its energy and critical mineral suppliers amid friction with Washington, Brazil has been courted by both the United States and China in negotiations over tariffs and rare earths, an asset the Brazilian government has called strategic in the dispute between the two powers. A prolonged US-China standoff over Iran could reshape commodity flows and affect energy prices that reach the Brazilian market.

The interests at stake

Bessent announced initial sanctions on 60 individuals, entities and vessels for alleged involvement in trade with Iran, but no Chinese financial institutions appeared on the list, a sign analysts read as caution from Washington. Asked why the administration had not immediately targeted China, Bessent said he did not want to blow up the global financial system, according to The Guardian. Still, he said no one is above the reach of US sanctions and that any entity facilitating money laundering on Iran's behalf will be removed from the US dollar system.

For Beijing, the calculation cuts two ways: avoiding a rupture with Washington ahead of the Trump-Xi meeting, while not giving up a discounted oil supplier or bowing to pressure amid a broader dispute over critical minerals and tariffs. Trita Parsi of the Quincy Institute for Responsible Statecraft in Washington told Al Jazeera it is unlikely the US will move against Chinese entities only weeks before Xi is supposed to arrive in Washington. Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin University of China, told the same outlet that Beijing would inevitably take countermeasures if the US pushes forward, though the intensity of China's response would depend on the severity of US actions.

Iran, for its part, has kept up its defiant posture. Iranian Economy Minister Ali Madanizadeh said on state television that the country's defense is no longer so defensive and that its enemies should wait for an attack, according to The Guardian. The conflict also has ripple effects in the Strait of Hormuz, a strategic oil shipping route, where Iran and Oman are discussing an agreement to jointly manage the waterway. An oil tanker was reportedly hit by an unidentified projectile at the mouth of the strait this week, the UK Maritime Trade Operations Centre said, adding there were no reported casualties or apparent environmental damage.