Washington had imposed sanctions on Chinese firms for buying oil from Iran. But Beijing has taken a tough countermeasure, declaring the U.S. order completely void within its own territory.
China’s Ministry of Commerce issued a special order stating that the U.S. sanctions would have no legal standing in China.
The United States had earlier imposed restrictions on five major Chinese companies over their alleged involvement in oil trade with Iran, increasing scrutiny of the firms while also trying to block their normal financial dealings with other countries.
The companies targeted by the U.S. are Hengli Petrochemical, Shandong Shouguang Luqing Petrochemical, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group and Shandong Shengxing Chemical.
The Chinese government said flatly that forcing one country’s domestic laws onto another violates international norms. It said the U.S. government’s unilateral action is disrupting the normal business of Chinese companies, and that Beijing took this legal countermeasure against Washington to protect its companies’ rights and safeguard its economic security.
This decision is set to have a significant impact on global markets, since small and large independent refineries in China are the primary buyers of Iranian oil. While the United States has piled on restriction after restriction, this marks the first time the Chinese government has directly used a legal shield to nullify a U.S. sanction.
This clears the way for trade with Iran to continue normally, while also pushing the U.S.-China rivalry to a new level.