Trump avoids sanctioning Chinese banks on Iran ahead of Xi meeting
The U.S. has imposed airline sanctions but stopped short of targeting Beijing's financial system despite maximizing pressure on Tehran.
What to know
- Trump administration has sanctioned Iranian airlines and some Chinese companies but explicitly avoided sanctioning Chinese banks—the most economically potent pressure lever.
- Treasury Secretary Bessent signaled preference for quiet diplomacy with Beijing over public confrontation on Iran sanctions.
- Analysts cite U.S. dependence on Chinese rare earths and concern about Beijing's political sensitivity as reasons the administration will not escalate to targeting financial institutions.
“But it's not going for the jugular.”
Jennifer Welch, Bloomberg Economics analyst · Semafor ↗ · Sep 22
Donald Trump U.S. President
Scott Bessent Treasury SecretaryJennifer Welch Bloomberg Economics analyst, former NSC director for China and Taiwan
Xi Jinping Chinese President
How it unfolded 2 developments, newest first · click a bar or a number to jump articlesposts
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Analysts cite rare earth reliance and diplomatic risk as reasons for restraint
Bloomberg Economics' Jennifer Welch, former NSC director for China and Taiwan, explains that sanctioning Chinese banks would be politically sensitive to Beijing and risk significant tension, particularly given U.S. dependence on Chinese rare earths.
“I can't imagine ... that the US is going to really go for the jugular given its reliance on Chinese rare earths. Some of the banks ... would be rather politically sensitive to Beijing and so would risk some significant flare-up in tension.”
— Jennifer Welch -
2
U.S. declines to sanction Chinese banks despite Iran pressure campaign
Semafor reports the U.S. has so far declined to sanction Chinese banks while pursuing maximum economic pressure on Iran. A senior official said Friday that Treasury had already moved to sanction some Chinese companies and that effort would continue, but offered no commitment to target financial institutions.
“That's 'the last line to cross' if 'you really want to put the squeeze.'”
— Jennifer Welch -
background
Bessent discusses Iran sanctions with Chinese Vice Premier — Treasury Secretary Scott Bessent signaled he discussed Iran-related sanctions with Chinese Vice Premier He Lifeng over the weekend, framing the approach as preferring behind-the-scenes diplomacy.
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background
Iran airline sanctions take effect — The U.S. imposed sanctions on Iranian airlines, described as painful but not hitting the hardest economic targets.