Top Shot – U.S. President Donald Trump (left) and Chinese President Xi Jinping arrive for a meeting at Gimhae Air Base adjacent to Gimhae International Airport in Busan on October 30, 2025.
Andrew Caballero-Reynolds | AFP | Getty Images
President Donald Trump’s threat to impose 25% tariffs on countries doing business with Iran raises the risk of derailing Washington’s fragile trade deal with China, Tehran’s largest trading partner.
President Trump announced Monday night that the United States will begin imposing a 25% tariff on imports from countries that do business with Iran. In a post on Truth Social, he said the order was “effective immediately.”
The world’s top two economies signed an interim trade agreement in late October that saw the U.S. lift punitive tariffs on China, while Beijing suspended broad rare earth export controls.
In response to President Trump’s tariff threat, China said it “firmly opposes any illegal unilateral sanctions or long-term jurisdiction,” and warned that it would take “all necessary measures” to protect its interests, according to a post on X by a spokesperson for the Chinese embassy in the United States.
Deborah Elms, director of trade policy at the Heinrich Foundation, said if President Trump were serious about 25% tariffs, “that would be a significant increase from current tariff levels.”
He warned that the situation could easily lead to a new escalation of retaliation, not to mention dashing hopes for U.S. soybean exports to China. “Last time I played this game, the tariff level was 145%.”
As the world’s biggest oil importer, Beijing has long bought crude from Iran and other countries sanctioned by the United States, providing a key economic lifeline for Middle Eastern regimes reeling from Western restrictions.
Iranian crude oil shipments to China more than doubled on a daily basis from 2017 to 2024, to more than 1.2 million barrels, according to estimates by Muyu Xu, senior analyst at commodity intelligence firm Kpler.
According to the latest data from the World Bank, fuel accounted for more than half of China’s imports from Iran in 2022.
However, China subsequently reduced trade in response to tougher US sanctions. According to official data compiled by Wind Information, imports from Iran will continue to decline for the fourth consecutive year in 2025, dropping by 28% from January to November compared to the same period last year. China is scheduled to release full-year trade statistics on Wednesday.
Cui Xiangjun, a professor of international studies at Renmin University of China, told reporters on Tuesday morning that Beijing has no intention of reducing economic cooperation with Iran because of President Trump’s tariff threats.
“The situation in Iran has certainly entered a very dangerous period. We should all pay close attention,” Cui said in Mandarin, as interpreted by CNBC. He believed that President Trump’s interest in Iran lies in its energy resources, as it produces more oil than Venezuela at a time when U.S. electricity demand is surging to power AI.
Cui declined to directly address the impact on U.S.-China relations, but said in-person talks are an important indicator.
President Trump met with Chinese President Xi Jinping in South Korea last fall, and the two countries agreed to a one-year trade ceasefire. Tariffs on China’s exports to the United States are expected to remain at around 47.5%, down from a peak of more than 100% in the spring, when trade tensions were at their peak.
The US president will visit Beijing in April, followed by Xi’s reciprocal visit later this year.
“Trump is undermining the tenuous trust built around the trade ceasefire,” said Dan Wang, China director at Eurasia Group. “Trump was already widely seen as inconsistent by the Chinese people and government.”
The United States and China have a history of increasing pressure to increase their influence ahead of major diplomatic meetings. Tensions have escalated sharply ahead of the Trump-Xi summit in October, with Beijing expanding restrictions on rare earth exports and launching an antitrust investigation into U.S. chipmaker Qualcomm, while the U.S. government is reportedly planning to restrict the supply of chip design software to China.
“There will likely be several similar retaliations before the April meeting,” Wang said.
Wang said China could respond with sanctions on U.S. companies related to arms sales to Taiwan and antitrust investigations of U.S. tech companies operating in China, while ruling out additional rare earth regulations.
It remains to be seen to what extent the tariffs will materialize. The U.S. Supreme Court could rule Wednesday on the legality of President Trump’s performance of his duties.
Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, said the threat of tariffs against Iran’s trading partners appears to be driven by President Trump’s “constantly shifting focus of attention and is not part of a deliberate strategy to gain new leverage with China ahead of a summit scheduled for April.”
Still, “China will not hesitate to retaliate in ways that impose serious costs on the United States,” Kennedy added.
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