Trump’s tariff gambit over Iran risks derailing U.S.–China trade deal

President Donald Trump’s threat of 25% tariffs on countries doing business with Iran has raised the risk of derailing Washington’s fragile trade deal with Beijing, Tehran’s biggest trading partner.

Trump said Monday night that the United States would begin imposing a 25% tariff on imports from countries doing business with Iran. He said the decision “will come into force immediately” Real Social post.

The world’s two largest economies signed an interim trade deal in late October that calls for a rollback of punitive U.S. tariffs on China, while Beijing paused sweeping rare earth export controls.

In response to Trump’s tariff threat, China stated that it was “firmly opposed to any illegal unilateral sanctions and long-term jurisdiction” while warning that it would take “all necessary measures” to defend its interests. to post About X by a spokesperson for the Chinese Embassy in the United States

If Trump is serious about the 25% rate, “that would be a huge increase over current tariff levels,” said Deborah Elms, head of trade policy at the Hinrich Foundation.

He warned that, far from dashing hopes for U.S. soybean exports to China, the situation could easily escalate into a tit-for-tat escalation. “Last time we played this game, we faced tariff levels of 145%.”

Beijing, the world’s largest oil importer, has long bought crude from Iran and other U.S.-sanctioned countries, offering a vital economic lifeline to a Middle East regime reeling from Western restrictions.

Iran’s crude oil shipments to China have more than doubled on a daily basis to more than 1.2 million barrels between 2017 and 2024, according to estimates by Muyu Xu, senior analyst at commodity intelligence firm Kpler.

Fuel as of 2022 More than half of China’s imports are from IranAccording to the latest data from the World Bank.

But China has since pulled back on trade US sanctions are tighter. Imports from Iran will decline for the fourth consecutive year in 2025, falling 28% from January to November compared to the previous year, according to official data compiled by Wind Information. China is expected to release full-year trade data on Wednesday.

Cui Shoujun, an international studies professor at Renmin University of China, told reporters on Tuesday morning that Beijing will not reduce economic cooperation with Iran because of Trump’s tariff threat.

“Iran’s situation has definitely entered a very dangerous period. We should all be more careful,” Cui said in Mandarin, translated by CNBC. He attributed Trump’s interest in Iran to its energy resources; more oil production from Venezuela just at a time when U.S. demand for electricity is increasing to power AI.

While Cui declined to directly address the implications for U.S.-China relations, he said face-to-face talks were an important indicator.

After Trump met with Chinese President Xi Jinping in South Korea last fall, the two sides agreed on a 1-year trade ceasefire. Customs duties have been set for China’s exports to the USA Stay around 47.5%It has fallen from a high of more than 100% at the height of trade tensions in the spring.

The US President is expected to visit Beijing in April, followed by a reciprocal visit from Xi later in the year.

“Trump is eroding the weak trust in the environment” [the] “Trump was already widely viewed as inconsistent by the Chinese public and government,” said Dan Wang, China director at Eurasia Group.

The US and China have a history of taking pressure to gain leverage ahead of major diplomatic meetings. Tensions escalated sharply ahead of the Trump-Xi meeting in October, when Beijing expanded export controls on rare earths and launched anti-trust investigations into US chipmaker Qualcomm. reportedly plans to discontinue chip design software to China.

“There will probably be similar rounds of tit-for-tat until the April meeting,” Wang said.

Wang said China could respond with sanctions on U.S. firms linked to Taiwan arms sales or antitrust investigations into American technology firms operating in China, but could rule out additional rare earth restrictions.

It is not yet known to what extent the tariffs will be implemented. The US Supreme Court can do this Decision on Wednesday About the legality of Trump’s use of his powers.

Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, said the tariff threat to Iran’s trading partners is Trump’s “ever-changing focus of attention, not as part of a deliberate strategy to gain new influence with China ahead of a possible April summit.”

Still, “China will not hesitate to retaliate at significant costs to the United States.” [and it] Kennedy stated that he was preparing for various scenarios, including this one.