China warns of retaliation as its cheap oil imports at risk
China, the largest buyer of Iranian oil, on Tuesday warned counter measures against US President Donald Trump’s decision to impose 25 per cent tariffs on countries trading with Iran, amid concerns that sanctions could end Beijing’s reliance on cheaper oil imports.
Trump announced on Monday that any country “doing business” with Iran will have to pay a 25 per cent tariff on its trade with the US, a move that could impact Tehran’s major trading partners such as China, India and the UAE.“There are no winners in a tariff war, and China will firmly safeguard its own legitimate and lawful rights and interests,” Chinese Foreign Ministry spokesperson Mao Ning said while reacting to Trump’s threat. Trump’s Iran tariff threats, coupled with the fall of the pro-Beijing Maduro regime in Venezuela which also supplied loan-linked oil supplies to China, sent “a dire warning” to Beijing’s policymakers who analysts said need to urgently find ways to protect the country’s strategic interests abroad.
His announcement sent shockwaves in Beijing, which may have to reconsider its approach, the Hong Kong-based South China Morning Post quoted China watchers as saying. China is already grappling with the fall of Venezuelan President Nicolas Maduro, one of its closest allies. His fall brought about an overnight end to Venezuela’s allegiance to Beijing, which, according to reports, invested over $106 billion in the Latin American country.
According to data compiled by intelligence firm Kpler, China imported around 400,000 barrels per day of Venezuelan oil last year for far cheaper prices. As per Kepler data, China also purchased on average 1.38 million barrels per day of Iranian oil last year, which constituted about 80 per cent of Iranian oil. With Trump’s new aggressive strategy to re-establish US dominance in Latin America, which threatens Chinese investments in Panama and Venezuela, and threats to Cuba, Beijing is redrawing its energy strategy, analysts say.
China, the largest importer of Russian oil, is reportedly redrawing its energy and investment strategy to lean more to the Persian Gulf, if the Iranian unrest and overall volatility continue, James Downes, co-director of Italian think tank the Centre for Research and Social Progress, told the Post.
China also had a cumulative $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. “The economic impact on China could be significant, as the new 25 per cent tariff would likely be cumulative on top of existing US tariffs on China’s exports to the US,” Rajiv Biswas, CEO of Singapore-based research firm Asia-Pacific Economics, told the Post.“The actual impact will depend on whether China decides to curtail trade with Iran,” he added. Liang Yan, a professor of economics at Willamette University in
the US, warned that the secondary sanctions on Iran serve as a wake-up call for Beijing to determine how to protect its overseas interests. “From Venezuela to Panama, now to Iran, China has more at stake in this than otherwise thought previously,” she said.“China will think more about how to protect its assets abroad and how to protect its investments, but also how to build relations,” she said. (PTI)
