The United States has urged China to halt its purchases of oil and gas from Russia, threatening it with secondary sanctions, including possible 100% tariffs. The warning came after the US reached trade deals with the European Union and Japan that set tariffs at 15%.
In meetings in Stockholm, Sweden, earlier this week, US Treasury Secretary Scott Bessent expressed to trade negotiators led by Chinese Vice Premier He Lifeng Washington’s displeasure with China’s continued purchases of sanctioned Russian as well as Iranian oil.
Bessent also complained about China’s sales of over US$15 billion worth of dual-use technology goods to Russia that have reputedly supported Moscow’s war against Ukraine.
In a briefing on Wednesday (July 30), Bessent told the media that Chinese officials responded to his call by stating that China is a sovereign nation with its own energy needs and that oil purchases would be based on the country’s internal policies.
“The Chinese take their sovereignty very seriously. We don’t want to impede their sovereignty, so they’d like to pay a 100% tariff,” Bessent said, sarcastically.
He told the press that US and Chinese officials did not strike a deal to extend their 90-day tariff truce, which is set to expire on August 12. He said that US President Donald Trump would decide whether the US would extend the deadline, typically by 90 days, or reimpose punishing tariffs.
During his presidential election campaign, Trump vowed to end the war in Ukraine within 24 hours of becoming president. Since Trump took office on January 20, he has tried to bring Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin to the negotiating table.
On March 14, Trump admitted that he was being “a little bit sarcastic” when he said he could end the Ukraine war within a day. In early July, reports said he came to the realization that Putin had no intention of engaging in negotiations.
On July 14, Trump set a 50-day deadline for Moscow to end the war, or the US will send billions of weapons to Ukraine, impose a 100% tariff on Russian goods, and also on products coming from countries that bought Russian oil.
On July 22, Bessent said that he would discuss China’s oil purchases from Russia and Iran with Chinese officials. On Monday, Trump said Putin’s new deadline to end the war would be 10 or 12 days. That would be a few days before the US-China tariff truce ends on August 12.
The world’s spotlight is now on whether Beijing will distance itself from Russia to avoid 100% US tariffs.
“China will take energy supply measures that are right for China based on our national interests. Tariff wars have no winners,” Guo Jiakun, a spokesperson of the Chinese Foreign Ministry, said Wednesday. “Coercion and pressuring cannot solve problems. China will firmly safeguard its own sovereignty, security, and development interests.”
Chinese commentators said the China-Russia-Iran alliance will not be broken by US pressure.
Chen Fei, an associate professor of international relations at Central China Normal University, says in an article that the United States’ wish to break China’s ties with Russia and Iran is unlikely to succeed.
“As one of the world’s largest crude oil importers, China maintains close energy cooperation with Russia and Iran,” he writes. “The US tried to include this issue in the Sino-US trade negotiation framework and intended to exert pressure on China, attempting to use energy issues as a bargaining chip. This is a strategic test of Sino-Russian and Sino-Iranian relations.”
He opines the US played this “energy card” because it faced an unfavorable political and economic situation within its country.
“China will not change its foreign policy and the direction of international cooperation due to unilateral pressure from the US. It will continue to work hand in hand with like-minded countries to respond to global challenges jointly,” he adds.
Xin Qiang, a professor at China’s Fudan University, said China would not allow the US to make non-tariff issues the focus of the trade negotiations or bundle trade matters with non-trade issues.
A Shandong-based columnist argues that the US cannot intervene in China’s purchases of Russian and Iranian oil products, as all these transactions are settled in renminbi, rendering US sanctions a “paper tiger.”
Citing Customs data, the writer says that Russia has been China’s top crude oil supplier for 20 consecutive months, delivering 2.16 million barrels daily via pipeline, approximately 600,000 barrels more than those from Saudi Arabia. He says Iran also ships 1.8 million barrels of crude oil to China daily at peak times.
“The US wants to use secondary sanctions to force China to stop buying Russian and Iranian oil and shift to buy its shale oil,” he says. “China has not bought shale oil from the US for three consecutive months. The US seemed tough but exposed its anxiety about falling oil exports.”
He says the US will only fuel its inflation if it imposes an additional 100% tariff on Chinese imports. He says that European countries, including Germany and France, will not follow the United States’ call to reduce oil and gas imports from Russia and Iran, respectively.
Pressure on China
Trump said he decided to shorten Putin’s deadline to end the Ukraine war from 50 days to 10-12 days because he saw no progress being made toward achieving a ceasefire. His decision followed two significant developments.
On July 23, Trump announced that the US had agreed to a “massive” trade deal with Japan where Tokyo committed to invest $550 billion in the US, while the US will only impose a 15% tariff on Japanese imports.
On July 27, Trump and European Commission President Ursula von der Leyen met in Scotland and agreed on a similar 15% US tariff on all EU goods.
“I think that the Chinese were surprised by the magnitude of the Japan deal, and by the magnitude and the terms of the European deal,” Bessent said Wednesday. “I believe they were in more of a mood for a wide-ranging discussion. The discussion centered on the two economies.”
He said the US side expressed its concern about Chinese overcapacity globally and its impact on other countries within the next few years. He said he would not be surprised if Europe, Canada and Australia followed in the United States’ footsteps and imposed anti-dumping tariffs on Chinese goods at some point.
The fact that the Trump administration had reached trade deals with the EU, Japan and some ASEAN countries before the meeting with the Chinese side has created some pressure on Beijing, said Yang Shuiqing, a researcher at the Institute of American Studies at the Chinese Academy of Social Sciences.
He said that under their trade deals with Washington, the EU and Japan will open their markets to US companies, while their tariffs will hurt Chinese firms’ competitiveness. Additionally, the EU and Japan have pledged to increase investment in the US, potentially leading to a reduction in investment in China.
Yang said that, fortunately, China has a “rare earth card” to play, making America unable to ignore its demands.
Yuyuan Tantian, a social media account affiliated with the state-owned China Central Television, reported on Wednesday that Chinese Commerce Minister Wang Wentao met with representatives from approximately 10 American companies in Beijing. It stated that Wang discussed business opportunities for US firms in China.
Some other Chinese commentators also believed that the US would not escalate its trade war with China in the short term, as Trump does not want to jeopardize his chance to visit China on September 3, when China celebrates the 80th anniversary of its victory in the War against Japanese Aggression and the World Anti-Fascist War.
Read: China-EU play nice despite widening cracks
