Analysis: Why Trump's economic threats against Iran may fail in light of the Chinese position

Analysis written by John Liu

US President Donald Trump's threat to launch a "crushing economic operation" against Iran is unlikely to bend the country to his will unless China joins the effort, but Trump does not have much leverage over China to make that happen.

On Wednesday, the US President vowed to impose "massive economic consequences" on countries that continue to do business with Tehran. Treasury Secretary Scott Besent has since reiterated Trump's warnings, urging Beijing to "comply with the required action" in an interview with CNBC on Thursday.

Beijing has been a lifeline for Tehran, as it buys 90% of Iranian crude oil exports, according to data from Vortexa Analytics reported by Reuters, and China does not acknowledge the import of Iranian crude oil in its customs data.

This situation is unlikely to change now, especially since China is aware of how unpopular the ongoing conflict is inside and outside the United States, with Chinese leader Xi Jinping scheduled to visit the United States next month.

After a turbulent year in US-Chinese relations due to Trump's renewed tariff campaign, Trump has every reason to prevent renewed tensions between the two largest economies in the world, as his visit to Beijing in May has helped calm the atmosphere so far.

In response to Washington's economic pressure campaign against Iran, Lin Jian, Chinese Foreign Ministry spokesman, said, "Sanctions and pressure tactics are not the solution."

“China calls on relevant parties to act responsibly and adhere to the political and diplomatic approach,” he said on Thursday.

Trump also has increasingly limited economic options that he can leverage against China. While the US Treasury Department imposed sanctions on independent Chinese refineries that were importing Iranian crude oil, Beijing ordered its companies to ignore those restrictions.

Any major US moves against China could risk provoking Beijing to take countermeasures. China has a trump card: rare earth elements - vital minerals needed to manufacture many products, from smartphones to electric cars and fighter planes. Since China processes about 90% of the global supply of these materials, Trump must be extremely cautious as Western countries seek to build alternative supply chains.