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 largest trading partner.

Trump said Monday night stateside that the U.S. will start charging a 25% tariff on imports from countries that do business with Iran. The order is “effective immediately,” he said in a Truth Social post.

The world’s top two economies had secured an interim trade deal in late October that saw a roll back of punitive U.S. tariffs on China, while Beijing paused its sweeping rare earth export controls.

In response to Trump’s tariff threat China said it “firmly opposes any illicit unilateral sanctions and long-arm jurisdiction,” while warning that it would take “all necessary measures” to defend its interests, according to a post on X by a spokesperson for the Chinese Embassy in the U.S.

If Trump is serious about the 25% rate, “that is a massive escalation from current tariff levels,” said Deborah Elms, head of trade policy at the Hinrich Foundation.

She warned the situation could easily spiral into fresh rounds of tit-for-tat escalation, not to mention dashing any hopes of U.S. soybean exports to China. “The last time we played this game, we ended up with tariff levels at 145%.”  

As the world’s largest importer of oil, Beijing has long bought crude from Iran — and other countries sanctioned by the U.S. — offering a crucial economic lifeline to the Middle Eastern regime reeling from Western curbs.

Iranian crude oil shipments to China more than doubled between 2017 and 2024 on a per-day basis to over 1.2 million barrels, according to estimates by Muyu Xu, senior analyst at commodity intelligence firm Kpler.

As of 2022, fuel accounted for more than half of China’s imports from Iran, according to World Bank’s latest data.

However, China has since stepped back its trade amid tighter U.S. sanctions. Imports from Iran were on track for a fourth-straight year of decline in 2025, falling 28% in the January to November period from a year earlier, according to official data compiled by Wind Information. China is expected to release full-year trade data on Wednesday.

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

“The Iran situation has certainly entered a very dangerous period. We should all pay closer attention,” Cui said in Mandarin, translated by CNBC. He attributed Trump’s interest in Iran to energy resources — more oil production than Venezuela, just when U.S. electricity demand is surging in order to power AI.

While Cui declined to directly address the…