U.S. Pressure on China to Join Iran Sanctions and Beijing’s Refusal: The Structure of U.S.-China Conflict and South Korea’s Response Strategy

Executive Summary

After a six-month military campaign against Iran failed to produce results, the Trump administration has shifted its exit strategy to an economic war centered on secondary sanctions. Treasury Secretary Bessent singled out China, which absorbs 80-90% of Iran’s crude oil, and pressed it to join the effort. However, China effectively rejected the demand simultaneously through three channels: its Foreign Ministry, its embassy in Washington, and state-run media. This response is seen not as temporary rhetoric but as an institutionalized approach treating the issue as a matter of principle in its relationship with the U.S. The most likely scenario is a dual-track approach in which China publicly maintains its firm refusal while pragmatically rerouting its crude oil imports. In this process, Asian energy importers, including South Korea, are likely to face sustained pressure that combines demands to join the sanctions with calls to contribute to security in the Strait of Hormuz. South Korea should refrain from taking a preemptive stance until the targets and scope of the sanctions are finalized, establish a principle of addressing the two demands separately, and preemptively assess its exposure to Iranian crude oil and transactions routed through the UAE.

I. Situational Analysis

China’s Rejection of U.S. Pressure to Join Iran Sanctions: A Situational Analysis

1. Background and Developments

The armed conflict with Iran, which began in late February 2026 with U.S.-Israeli airstrikes, has now continued for six months[6][8]. Concluding that military operations alone could not force the Iranian regime to submit, President Trump has shifted his strategy to economic warfare[4]. On August 19, President Trump announced via social media what he called the “strongest economic operation in history”[15]. He warned that any country providing even a minor economic lifeline to Iran would see its banks, companies, airports, and government agencies pay a heavy price[15].

On August 20, outside the White House, Treasury Secretary Bessent reaffirmed that the U.S. would impose the “strongest sanctions in history”[9][12]. He argued that this measure would reduce the need to resume large-scale military operations against Iran[9]. In an interview with CNBC the same day, Secretary Bessent singled out China, stating, “China gets 50% of its energy from the Gulf. It would be very helpful for China to be part of this program”[1]. He described the measure as “the largest coordinated economic isolation in world history”[1].

Structural factors explain why China has been identified as the key variable. China is the largest importer of Iranian crude oil, purchasing approximately 80-90% of its exports[3][6]. For decades, Iran has a history of evading U.S. sanctions via China and Russia[3]. No matter how stringent the sanctions announced by the U.S., their actual effectiveness depends on the participation of major trading partners like China[3].

2. Current Situation

In response to Secretary Bessent’s pressure, China expressed its refusal through two channels almost simultaneously[17]. Chinese Foreign Ministry spokesperson Lin Jian urged a political and diplomatic solution, stating that “sanctions and pressure do not help solve the problem”[17]. Separately, the Chinese Embassy in Washington conveyed a similar position to the South China Morning Post. Embassy spokesperson Liu Chang stated that pressure would not bring about any solution[17].

The reaction from state-run media was even more direct. In an August editorial, the Global Times described the U.S. measure as a 'reckless game' and stated that China would not participate[11]. The editorial pointed out that “economic sanctions can concentrate pressure on a specific country, but it is difficult to confine the costs to that country alone”[11]. It went on to criticize the U.S. approach itself, stating that “war does not solve problems, and sanctions are like pouring fuel on the fire”[11].

Gulf News reported that Beijing had urged all parties to pursue a political and diplomatic solution, making clear its position that sanctions would not resolve the conflict[7]. Foreign Policy summarized the situation with the headline, “Tehran’s Biggest Oil Buyer Doesn’t Seem Willing to Cooperate”[5]. This perspective reflects the concern in Washington circles that China's cooperation is essential for the Trump administration's Iran sanctions to be effective[5].

3. Key Actors and Positions

U.S. Department of the Treasury (Secretary Bessent)designed these sanctions as an alternative to military action[9]. With an unpopular war dragging on for six months and midterm elections approaching, the administration needs an economic tool to subdue Iran without a military victory[14]. Secretary Bessent's “with us or against us” framing targets both allies and China, but the real target is China's crude oil import structure[13][14].

China’s Foreign Ministry and State-Run Mediasimultaneously argue for both the ineffectiveness of sanctions and the importance of respecting sovereignty. While spokesperson Lin Jian's remarks were restrained in diplomatic language, the Global Times editorial dismissed the U.S. measure as a 'game,' thereby denying its political legitimacy[11][17]. China has consistently prioritized the economic benefits of sourcing crude oil over a strategic alignment with Iran[10]. As a country that also relies on the Strait of Hormuz for a significant portion of its oil imports, China is an affected party and thus prefers to maintain a pragmatic distance from Iran rather than indefinitely expanding ties[10].

The Iranian Governmentappears to be leveraging the U.S.-China conflict to enhance its own negotiating power. The Iranian president recently claimed, “The war must end now,” and that “the whole world is acknowledging Iran’s victory”[18]. Regardless of the actual situation on the battlefield, this can be interpreted as a rhetorical strategy by Iran to gain an upper hand in negotiations as the war concludes.

The UAE and other Gulf Stateshave shown a relatively compliant attitude toward U.S. pressure. The UAE decided to halt all trade and financial transactions with Iran, a move Secretary Bessent assessed as “not a coincidence”[3]. However, this is a differentiated response stemming from the fact that the Gulf oil producers' security dependence on the U.S. is different in nature from China's energy dependence on Iran.

4. Key Issues

The first issue is that the effectiveness of the sanctions depends entirely on China's compliance. If China, which accounts for 80-90% of Iran's crude oil imports, does not participate, the U.S. vision of the 'strongest isolation in history' is likely to remain a symbolic declaration[3][6].

Another key issue is the possibility that China's response will manifest not as open resistance but as indirect evasion. China is likely to publicly voice strong opposition through its Foreign Ministry, embassy, and state media, while in practice neutralizing the sanctions by diversifying oil import routes or adjusting payment methods[4]. This aligns with a typical pattern in Chinese diplomacy of avoiding direct confrontation while refusing substantive cooperation.

There is also potential for the U.S.-China conflict to expand beyond the sanctions issue into a competition over energy security and currency hegemony. Iran's attempt to expand yuan-based payments is less a sign of the Chinese financial system's growing competitiveness and more a last resort for an Iran excluded from the dollar-based payment network[10]. However, as U.S. sanctions pressure intensifies, there remains a possibility that the search for an alternative payment network among Iran, China, and Russia could accelerate.

Finally, the ripple effects of America's dichotomous pressure on third countries remain an issue. Secretary Bessent's “with us or against us” framing could serve as a signal forcing a choice not only for China but for all countries trading in Iranian crude oil, including South Korea[13][14]. With the targets and scope of the sanctions yet to be finalized, countries are likely to maintain a wait-and-see approach until the outlines of the final U.S. measures become clear.

II. In-Depth Analysis

China’s Rejection of U.S. Pressure to Join Iran Sanctions: An In-Depth Analysis

1. Analysis of Root Causes

The starting point of this conflict is the failure of the Trump administration's military operation. The six-month air campaign against Iran did not achieve its goal of forcing the Iranian regime to submit[4]. Domestically, public fatigue with the prolonged war has accumulated[4]. For President Trump, facing midterm elections, continuing the war without a military victory is a politically burdensome choice[14]. The shift to economic warfare is thus akin to an exit strategy born from these domestic political constraints[4].

The reason Secretary Bessent singled out China is simple: U.S. unilateral sanctions alone cannot effectively isolate the Iranian economy. Iran has decades of experience in circumventing U.S. sanctions[3], and China is the core of that circumvention route. China is the largest customer for Iranian crude, absorbing 80-90% of its exports[3][6]. Without disrupting this structure, no sanctions can achieve the effectiveness befitting the rhetoric of 'strongest in history'[9][12].

China's refusal is less a matter of principle and more a result of national interest calculations. Secretary Bessent tried to use the fact that China sources 50% of its energy from the Gulf region as leverage[1]. However, this logic can be inverted: it also means that China is structurally dependent on Gulf crude, particularly low-cost Iranian oil. A U.S. demand for cooperation without offering an alternative supply source is a request that Beijing has no incentive to accept.

2. Structural Context

Political Structure

The domestic political calendars of both the U.S. and China are shaping the timing of this conflict. President Trump faces public pressure over a prolonged military intervention ahead of the midterm elections[14]. Economic sanctions are an option with lower domestic political costs than military action[9]. China, on the other hand, cannot afford to be seen publicly capitulating to America's dichotomous 'with us or against us' demand[13]. For the Xi Jinping leadership, a subservient posture in relations with the U.S. would send a domestically untenable signal. The Global Times' use of a formal editorial to declare it would “not participate in a reckless game” is directly related to this domestic political imperative[11].

China's response method itself exhibits structural characteristics. The official comment from Foreign Ministry spokesperson Lin Jian and the separate communication from the Chinese Embassy in the U.S. occurred almost simultaneously[17]. This signals that Beijing considers the matter important enough to warrant a multi-channel response. The addition of the state media editorial created a structure in which three pillars—the Foreign Ministry, the embassy, and state media—conveyed the same message[11][17].

Economic Structure

China's dependence on Iranian crude is not one-sided. Chinese refiners, particularly the so-called 'teapot' refiners in Shandong province, have procured Iranian oil at a significant discount to international market prices. Abandoning this price structure would be a direct blow to the profitability of China's refining industry. At the same time, for Iran, China is virtually the only remaining large-scale customer[3][6]. This mutual dependence makes it difficult for U.S. pressure alone to break the structure.

The alternative route of expanding yuan-based payments also exists. However, this is less a phenomenon driven by the competitiveness of China's financial system and more a last resort for an Iran excluded from the dollar-based payment network[10]. With its capital markets not fully open and its bond market liquidity falling short of the conditions for a reserve currency, an expansion of yuan-based payments does not directly translate into the internationalization of the yuan[10]. China itself, as an affected party that relies on the Strait of Hormuz for a significant portion of its oil imports, maintains a cautious stance on strategic alignment with Iran[10].

Security Structure

The de facto blockade of the Strait of Hormuz forms the backdrop for the current sanctions phase[6][8]. The shipping lane, through which one-fifth of the world's oil supply used to pass, has not been functioning normally since the war began, causing oil prices to fluctuate within a range of $88-95 per barrel[6][8]. The trend of the U.S. reducing its security commitments also influences this structure. Having become a net energy exporter due to the shale revolution, the United States has less incentive to provide the public good of protecting Gulf sea lanes as it did in the past[8]. The shift in policy priorities from regime change and nuclear dismantlement to stabilizing consumer oil prices, as stated by Vice President Vance, is consistent with this structural change[8]. Ultimately, the U.S. is demanding China's cooperation while facing the dilemma of having to minimize its military burden and maximize the results of its economic pressure.

3. Historical Precedents and Comparison with Similar Cases

This is not the first time China has refused to cooperate with U.S. sanctions against Iran. During previous rounds of sanctions under the Obama and first Trump administrations, China responded not by openly protesting but by rerouting crude oil imports or changing payment methods. The possibility that China will again opt to bypass import routes rather than openly protest has been raised[4]. There is a potential for a repeat of the dual strategy of officially taking a principled stance urging a political and diplomatic solution while in practice exploiting loopholes in the sanctions regime.

However, the current situation differs from past cases in certain respects. Previous sanctions were generally based on an international consensus to curb nuclear development and were implemented through UN Security Council resolutions. This time, the measure is largely an exit strategy following the failure of a unilateral U.S. military operation, and its basis in international legitimacy is relatively weak[4]. China's criticism of the U.S. approach itself, with the statement that “war does not solve problems, and sanctions are like pouring fuel on the fire,” can be seen as rhetoric targeting this legitimacy deficit[11].

The UAE's decision to halt all trade and financial transactions with Iran is an exceptional case of compliance in this sanctions phase[3]. Secretary Bessent's assessment that this was “not a coincidence”[3] suggests that some Gulf oil producers may yield to U.S. pressure. However, the scale of the UAE's trade with Iran is incomparable to China's. There is little reason to believe that compliance from Gulf producers will lead to a change in China's stance.

4. Key Variables Shaping Developments

The first variable is the details of the new U.S. sanctions, scheduled to be announced on August 24[6]. Until the targets and scope of enforcement are finalized, all involved countries, including China, are likely to maintain a wait-and-see approach. Whether the sanctions will take the form of a secondary boycott targeting Chinese banks will be a watershed moment for determining their real-world impact[3].

The second variable is how China manages the timing of its compliance. While publicly rejecting U.S. demands, the possibility of gradual adjustments to actual crude import routes or payment methods cannot be ruled out[4]. This is a typical pattern for Beijing, aimed at managing risk without direct confrontation.

The third variable is the transit situation in the Strait of Hormuz[6][8]. A prolonged blockade of the strait would increase upward pressure on oil prices, which directly translates into domestic political burdens for the Trump administration. With oil price stability now a policy priority[8], the extent to which the U.S. can sustain its pressure on China will depend on oil price trends.

The fourth variable is the U.S. midterm election schedule. As the election nears, the Trump administration will have a greater need to showcase tangible achievements. Announcing sanctions without securing China's cooperation would be a politically vulnerable position. This could paradoxically create an incentive for Washington to lower the intensity of its pressure on China during the actual implementation phase compared to what was initially announced.