Trade negotiations between the United States and China have hit a snag as Beijing firmly rejects U.S. demands to stop purchasing oil from Russia and Iran.
The U.S. aims to curb funding for Russia’s military actions in Ukraine and Iran’s support for Middle Eastern militant groups by restricting their oil revenues.
China, however, views these oil imports as critical to its energy security and economic interests.
Following two days of talks in Stockholm, China’s Foreign Ministry emphasized its stance, prioritizing national interests over external pressures.
U.S. Treasury Secretary Scott Bessent acknowledged China’s firm position, noting that Beijing views its oil purchasing decisions as a matter of sovereignty.
Despite the disagreement, both sides remain optimistic about reaching a broader trade deal to maintain stable economic ties.
China’s reliance on Russian and Iranian oil underscores its strategic priorities.
A 2024 U.S. Energy Information Administration report indicates that 80-90% of Iran’s oil exports go to China, with daily imports exceeding 1 million barrels.
Similarly, Chinese imports of Russian oil increased by 20% in April, reaching over 1.3 million barrels per day, according to the KSE Institute.
Beijing’s commitment to these supplies is driven by favorable pricing and its strategic alignment with Moscow.
Analysts suggest China may be leveraging the oil issue to gain concessions in trade talks, doubting the U.S. will follow through on its tariff threats.
The U.S. has proposed a 100% tariff on Chinese goods if Beijing continues its oil purchases, but experts question its feasibility given the potential to derail trade progress.
The U.S. push to limit Russia and Iran’s oil revenues is part of a broader strategy to weaken their military capabilities.
Senator Lindsey Graham has introduced legislation authorizing tariffs up to 500% on countries buying Russian energy, targeting nations like China and India.
The bill, supported by 84 Senate co-sponsors, reflects bipartisan concern over foreign oil purchases funding Russia’s actions in Ukraine.
However, the legislation remains on hold, pending further direction from the Trump administration.
Meanwhile, China’s defiance highlights its confidence in navigating U.S. pressure while securing its energy needs.