China has warned it will retaliate against the United States after Washington announced sweeping new sanctions targeting countries and entities that continue trading with Iran, including firms based in Hong Kong and mainland China. US Treasury Secretary Scott Bessent unveiled the measures on Monday, describing them as the toughest sanctions in history and warning that nations still doing business with Tehran risk being cut off from the dollar-based financial system. The move is significant because China buys roughly 90 per cent of Iran's oil, making it central to any US effort to isolate the Islamic Republic economically, and raises fears of a fresh escalation in US-China tensions following last year's trade war.

The sanctions target 60 individuals, entities and vessels but stop short of naming specific Chinese financial institutions. Beijing's Foreign Ministry spokesperson Lin Jian said China would "do everything necessary" to protect its interests and accused Washington of pursuing "economic warfare" that would destabilise global markets rather than resolve tensions. Analysts noted China could respond by restricting exports of rare earth minerals, as it did previously to disrupt US manufacturing, while Iran's Economy Minister Ali Madanizadeh said neither China nor Russia had accepted the measures and vowed Tehran was "fully prepared" to retaliate too.