Clipped from: https://www.thehindubusinessline.com/opinion/trumps-china-challenges/article70965906.ece
Iran, trade issues will dominate Trump-Xi talks
US President Donald Trump and Chinese President Xi Jinping at the APEC summit, in Busan, South Korea, on October 30, 2025. (file photo) | Photo Credit: EVELYN HOCKSTEIN
Less than a week before his much awaited visit and in a summit with his Chinese counterpart Xi Jinping, US President Donald Trump has firmly rejected any notion that China is challenging the US over the war with Iran stressing his “very good” relationship.
“We haven’t been challenged by China. They don’t challenge us” adding that Xi “wouldn’t do that… I don’t think he’d do that because of me”. Separately, US Secretary of State Marco Rubio has said that Beijing was the worst hit by the closure of the Strait of Hormuz urging China to push Tehran to open the crucial navigation line.
It is not as if Iran is suddenly making the headlines ahead of Trump’s impending visit to China. Since the war started on February 28, Beijing has been expressing its opposition to the hostilities and in the aftermath of the shutting down the Hormuz has been calling upon Iran to keep the vital international waterways open.
China is the largest buyer of Iranian crude in the upwards of 80 per cent and the billions of dollars in revenue generated reportedly bankrolling about 45 per cent of Iranian government’s budget. More important, it is said that 50 per cent of all China’s imports come through the Strait of Hormuz.
China-Iran economic ties
China is Iran’s largest trading partner with official bilateral trade pegged at around $14 billion, which is said to exclude “significant” unofficial oil transactions through third country intermediaries to evade American sanctions. And in 2021 Tehran and Beijing signed a 25-year cooperation agreement that pledged $400 billion investment in Iran’s energy, infrastructure and technology sectors.
But media reports speak of very little of this having come through primarily because of hesitancy of Chinese companies due sanctions restrictions. In fact China’s interest in seeing a quick end to the war in Iran is also because of its extensive economic interests in the Middle East especially in Saudi Arabia and the United Arab Emirates that go far beyond energy to include investment, technology and market opportunities for Chinese companies.
US-China trade
Even without the war in Iran, Trump would have had a plate full during the summit for China is one of the largest export markets for the US and for China, the US is its top export market. The biggest trade friction has been Washington running a trade deficit in the upwards of $200 billion which has been coming down; but a surplus of about $34 billion in services. Often forgotten in all the rhetoric on trade surplus, tariffs and sanctions is China’s huge holding of US Treasury bonds — a whopping $760 billion. China is the second largest foreign creditor to the US after Japan.
In spite of a close relationship with Iran, China has been measured in its role in the Middle East war. Undoubtedly Beijing has called for cessation of hostilities and keeping the Hormuz open; but offering only diplomatic support to Tehran at international forums like the United Nations. There have been some unverified reports of China supplying weapons or components for Iranian missiles but even Trump has sought to downplay these purported transactions.
“I wrote him a letter asking him not to do that, and he wrote me a letter to say that, essentially, he’s not doing that”, Trump said in a recent interview. In fact Beijing has always carefully distanced itself from Tehran’s regional policies, especially regarding its proxies like the Hamas, Hezbollah and the Houthis.
Xi will want to come away with as much as he can on Taiwan and the South China Seas with nations eagerly perked up to see how the two leaders address outstanding concerns in a vital part of the world. Coming to an agreement with Iran including keeping the Strait of Hormuz open may get Trump the “big, fat hug” from Xi but the rest of Indo-Pacific is hopeful of its interests protected at the summit.
The writer is a senior journalist who has reported from Washington DC on North America and United Nations
Published on May 12, 2026
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