Beijing has rejected the possibility of the United States imposing sanctions on Chinese banks for their financial dealings with Iran, heightening uncertainty ahead of a planned summit between President Xi Jinping and President Donald Trump. The Chinese Foreign Ministry reiterated that dialogue and negotiation remain the only viable solutions concerning Iran, emphasizing Beijing’s consistent opposition to what it describes as unlawful unilateral sanctions.
The remarks followed comments from President Trump suggesting that sanctions targeting Chinese financial institutions could be forthcoming. Trump declined to confirm whether specific measures had been decided, stating, “Who said I’m not? Well, I don’t have to announce everything, do I?” This comment came amid heightened U.S. efforts to exert economic pressure on Tehran after diplomatic and military attempts failed to resolve ongoing regional tensions, including control over the Strait of Hormuz.
Earlier in the week, U.S. Treasury Secretary Scott Bessent announced fresh sanctions against 60 entities and individuals worldwide, including some in mainland China and Hong Kong. He warned that any institutions facilitating money laundering on behalf of Iran risk being excluded from the U.S. dollar financial system, signaling an intensified campaign against Iran’s economic networks. However, the recent measures stopped short of targeting major Chinese banks or refiners directly.
The Chinese Embassy in Washington responded firmly, asserting that China would take all necessary steps to protect its legitimate rights and interests. The embassy condemned economic warfare and maximum pressure tactics as ineffective means to resolve the situation. Chinese officials have underscored Beijing’s role as the largest importer of Iranian oil, accounting for over 80 percent of Iran’s oil exports in 2025.
The timing of these developments adds complexity to U.S.-China relations just weeks before Xi’s visit to Washington. Despite efforts on both sides to maintain a stable atmosphere for the summit, tensions persist amid ongoing sanctions, export controls, and blacklists that have intensified in recent months.
Pressure is mounting on the U.S. Congress for stronger action against China’s connections with Iran. Hawkish members of the House Select Committee on China advocate sanctioning Chinese banks to deter economic support for Tehran. Illinois Republican Darin LaHood argued that any country maintaining economic ties with Iran should face consequences. Conversely, some lawmakers express caution, citing concerns about potential retaliatory measures from China, particularly around rare earth exports critical to U.S. industries.
Experts have warned of the potentially severe consequences of sanctioning major Chinese financial institutions. Dennis Wilder, a former National Security Council China director, described such measures as a “nuclear economic weapon.” Meanwhile, some large international banks may preemptively limit their dealings with Chinese counterparts to avoid U.S. regulatory scrutiny.
Treasury Secretary Bessent affirmed Washington’s message that no entity is beyond the reach of U.S. sanctions and noted ongoing diplomatic outreach by President Trump to world leaders requesting them to curb economic engagement with Iran. However, Trump later suggested limited diplomatic interactions with other countries on the matter, stating there was “not a lot to speak to” and expressing little interest in further engagement.