Trump’s Iran tariff threatens to reignite China trade war

Singapore: The fragile US-China trade truce is facing its first major stress test after US President Donald Trump announced he would impose a 25 per cent tariff on goods from countries “doing business” with Iran.

Trump is also weighing whether to order a military response against the Iranian government as it continues a violent crackdown on protests that have left more than 600 dead and led to the arrests of thousands.

Beijing, the largest buyer of Iranian oil, made clear its opposition to the new measure on Tuesday, and signalled its preparedness to respond with countermeasures that could once again kick off a tit-for-tat escalation that derailed trade between the two countries in 2025.

“China’s position on the tariffs issue is very clear. Tariff wars have no winners. China will firmly protect its legitimate and lawful rights and interests,” a Chinese Foreign Ministry spokeswoman said at a press conference in Beijing.

It is unclear yet what exactly Trump’s latest tariff threat means for the one-year truce he and Chinese President Xi Jinping struck in South Korea in October, an action designed to pave the way for the two leaders to meet in Beijing in April to discuss a more expansive deal.

Under that truce, both sides agreed to extend their pause on triple-digit tariffs on each other’s goods, while also pausing their most recent export control restrictions, including Beijing’s bid to dramatically expand its chokehold on rare earths supply.

The Trump administration has so far provided no further details on the new tariff beyond the president’s social media post on Monday evening, US time.

“Effectively immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America,” Trump posted to Truth Social, adding the order was “final and conclusive”.

In recent months, Trump has taken a cautious approach to dealing with China in what analysts have interpreted as a bid to smooth the passage for his state visit to Beijing.

However, China’s ties with Iran could reignite tensions before then. China purchases about 90 per cent of Iran’s crude oil exports, providing it with an economic lifeline in the face of crippling Western sanctions. Beijing and Tehran also share a mutual goal in weakening US global influence.

As anti-government protests have gathered momentum across Iran, the US president has repeatedly threatened Tehran with military action if his administration found the Islamic Republic was using deadly force quash the unrest. It’s a red line that Trump has said he believes Iran is “starting to cross” and has left him and his national security team weighing “very strong options”.

But the US military – which Trump has warned Tehran is “locked and loaded” – appears, at least for the moment, to have been placed on standby mode as Trump ponders his next steps, saying that Iranian officials want to have talks with the White House.

“What you’re hearing publicly from the Iranian regime is quite different from the messages the administration is receiving privately, and I think the president has an interest in exploring those messages,” White House press secretary Karoline Leavitt said on Monday (Tuesday AEDT).

“However, with that said, the president has shown he’s unafraid to use military options if and when he deems necessary, and nobody knows that better than Iran.”

Hours later, Trump announced on social media that he would slap 25 per cent tariffs on countries doing business with Tehran “effective immediately”.

China, the United Arab Emirates, Turkey, Brazil and Russia are among economies that do business with Tehran.

The White House has offered scant details on Iran’s outreach for talks, but Leavitt confirmed that the president’s special envoy, Steve Witkoff, will be a key player engaging Tehran.

Meanwhile, Vice President JD Vance, Secretary of State Marco Rubio and key White House National Security Council officials began meeting on Friday to develop a “suite of options” from a diplomatic approach to military strikes to present to Trump in coming days, according to a US official familiar with the internal administration deliberations.

The official was not authorised to comment publicly and spoke on the condition of anonymity.

Can the protests be sustained?

Demonstrations continue, but analysts say it remains unclear just how long protesters will remain on the street.

Iran drew tens of thousands of pro-government demonstrators to the streets on Monday in a show of power after nationwide protests challenging the country’s theocracy. Iranian state television showed images of demonstrators thronging Tehran toward Enghelab Square in the capital.

An internet blackout imposed by Tehran makes it hard for protesters to understand just how widespread the demonstrations have become, Vali Nasr, a former State Department adviser and now professor of Middle East studies at Johns Hopkins University, said.

“It makes it very difficult for news from one city or pictures from one city to incense or motivate action in another city,” Nasr said.

“The protests are leaderless, they’re organisationless. They are actually genuine eruptions of popular anger. And without leadership and direction and organisation, such protests, not just in Iran, everywhere in the world – it’s very difficult for them to sustain themselves.”

The demonstrations are the biggest Iran has seen in years – protests spurred by the collapse of Iranian currency that have morphed into a larger test of supreme leader Ayatollah Ali Khamenei’s repressive rule.

With AP

Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.