China rejects U.S. demand to sever economic ties with Iran, saying it will not submit to “economic warfare”

China indicated Tuesday that it will not adhere to demands from the U.S. Treasury Department to cut off all economic ties with Iran, dismissing the sanctions framework as a form of “economic warfare,” according to The Washington Times. The response sets out China’s position as Washington continues to press other countries to limit Iranian-related transactions and relationships.

The dispute centers on whether U.S. sanctions can compel third countries to stop doing business with Iran in full, including through financial and commercial channels. In its comments, China rejected the U.S. characterization and framed its own approach as not submitting to coercive economic measures, while maintaining that it would not fall in line with the requested cutoffs.

Treasury’s demand, as characterized by The Washington Times, reflects an expansive effort to isolate Iran economically. The U.S. position has typically relied on the threat of secondary consequences for companies and intermediaries that continue certain dealings, a policy that can affect global shipping, banking, insurance, and goods movement even when transactions do not involve U.S. parties directly.

China’s refusal, if it becomes a consistent policy stance, could complicate U.S. efforts to close off remaining pathways connected to Iran. It may also raise compliance questions for firms operating in multiple jurisdictions, including whether they can continue permitted activity without triggering U.S. restrictions or penalties.

For Washington, the issue is not only financial leverage but also national security risk management. U.S. sanctions targeting Iran have long been tied to concerns about regional instability and Iran’s strategic behavior, and Treasury’s outreach often seeks to reduce the liquidity and operational capacity that sanctions are intended to limit.

For China, the response indicates resistance to what it views as externally imposed economic constraints. By publicly rejecting Treasury’s demand, Beijing is placing its position on the record and indicating to partners, regulators, and businesses that it may treat broad compliance requests as politically unacceptable.

It was not immediately clear from the reporting how China would define the boundaries of noncompliance in practice, including which categories of Iran-related transactions would be treated as permissible and which would face additional internal scrutiny. The next step will likely involve further statements from both governments, as well as continued attention to how sanctions enforcement affects shipping, trade documentation, and banking screening.

The standoff also has broader implications for international economic order, because public rejection of sanction compliance requests can affect negotiations among governments and increase uncertainty for companies trying to assess enforcement risk. As both sides continue to speak, the practical outcome will depend on how each country’s regulators and affected industries translate policy statements into day-to-day compliance decisions.