China, which is Iran’s largest trading partner and largest crude oil importer, is in trouble as the United States resumed economic and financial sanctions against Iran on Tuesday. China revealed that it would maintain its economic relationship with Iran despite U.S. sanctions against the partner country. China, however, appears to be nervous as it is uncomfortable in forming another war while it is already suffering conspicuously from the trade war with the United States.
The second sanctions, which block trading Iran’s crude oil from November, will pose additional burden on China. The amount of crude oil China imports from Iran is an average of 650,000 barrels per day, which is worth 15 billion U.S. dollars in market value. Some 7 percent of China's overall imported crude oil is from Iran. That is, one-fourth of Iran’s export. Chinese state run oil companies have reportedly invested billions of dollars to Iran’s major oilfields.
It is not a surprise for China to resist U.S. sanctions against Iran as it violates China’s economic profit. It is, however, complicating for China in terms of sanctions against Iran, unlike fighting back with retaliatory tariffs with the same scale during the course of a trade war. China was able to appeal for joint response of the international society including Europe and other Asian countries under the name of protecting the ideology of free trade, which is against Trump's protectionism.
It is difficult for China to appeal to the international society for help. Moreover, U.S. President Donald Trump wrote on Twitter on Tuesday that anyone who trades with Iran cannot trade with the United States. Chinese corporations that engage in transactions with Iran may become the target of U.S. sanctions. China has also been responding sensitively to such secondary boycott with sanctions imposed on North Korea as well. European corporations begin halting investments in Iran as Trump reimposed economic sanctions on Iran, which shall also be a burden to China.
Wan-Jun Yun email@example.com