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Will Trump’s Iran tariffs force China to reshape its trade with Tehran?

Analysts urge China to protect strategic interests abroad after unexpected announcement, which is likely to push up oil import costs

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China, Iran’s largest trading partner, would be among the countries most affected by new US tariffs targeting Tehran’s commercial ties. Photo: Reuters
Kandy Wongin Hong Kong,Ralph Jenningsin Hong KongandXinyi Wuin Beijing
Washington’s secondary sanctions on countries trading with Iran are likely to push up China’s oil import costs in the short term and send a dire warning to Beijing’s policymakers, who analysts said need to urgently find ways to protect the country’s strategic interests abroad.
The shock waves arrived on Monday, when US President Donald Trump said a 25 per cent tariff would be imposed immediately on all goods and services imported from any country that “does business” with Iran, linking the measure to the civil unrest plaguing Tehran after weeks of anti-government protests.
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While advising caution to see how Trump’s action will play out, analysts said China – Iran’s largest trading partner – may have to reconsider its approach.

“Iran likely faces indirect isolation as trade partners weigh US market access against Iranian ties overall,” said James Downes, co-director of Italian think tank the Centre for Research and Social Progress.

This could push Beijing towards alternatives, such as other states on the Persian Gulf, if the Iranian unrest and overall volatility continue into the future, he added.

Trade between the two countries amounted to US$9.09 billion in the first 11 months of 2025, according to data from Beijing’s customs bureau. This includes US$6.23 billion in exports from China to Iran, which account for just 0.18 per cent of China’s total outbound shipments. In the other direction, China’s imports from Iran stood at US$2.86 billion – only 0.12 per cent of its total.

Meanwhile, China had a cumulative US$4.5 billion in outbound direct investment in Iran in 2024, up 14.7 per cent from a year earlier, according to the government’s latest statistical bulletin.

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02:33

Hundreds of protesters and security officers dead as Iran steps up efforts to quell unrest

Hundreds of protesters and security officers dead as Iran steps up efforts to quell unrest

The two countries signed a 25‑year strategic cooperation agreement aimed at deepening trade, economic and transport connectivity in March 2021.

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