Congress

Lawmakers press Treasury to target Chinese banks over Iran

Published

2 months ago

August 26, 2026

A number of hawkish lawmakers on both sides of the aisle are urging the Trump administration to focus its effort to cut off Iran’s economic lifeline on one primary target: Chinese banks.

Since Treasury Secretary Scott Bessent pledged Monday to sanction Tehran’s “enablers,” one big question has been whether the White House is willing to risk taking on Beijing, Iran’s biggest trading partner.

On Capitol Hill, at least, the appetite appears to be there — particularly in terms of going after Chinese financial institutions.

“Any country complicit in providing an economic lifeline to Iran’s terrorist regime, including China, must be held accountable,” said Rep. Darin LaHood (R-Ill.), a member of the House Select Committee on China. Sanctions on Chinese banks that do business with Iran would send “a clear message to China and every other nation that enabling Tehran’s malign actions will come at a cost,” he said.

As part of the push to widen sanctions on countries with economic ties to Iran, the Treasury Department expanded its ability Monday to penalize foreign companies that operate in or support five sectors of Iran’s economy: digital assets, technology, gold, aviation and shipping.

Bessent stressed Monday the need to sanction those who “facilitate the flow of its finances” to keep the regime afloat and said “no one is above the reach of U.S. sanctions” when asked if he’s willing to sanction Chinese banks.

But the Treasury Department did not target any Chinese banks in its initial list of sanctioned entities. The administration instead targeted several Hong Kong and China-based companies implicated in illicit Iranian oil transfers and assistance with Tehran’s missile technology development program.

Bessent said Monday that he’ll sanction a major foreign financial institution by the end of the week as part of the new effort, but declined to provide details.

Going after Chinese banks would not only antagonize Beijing at a time when the U.S. is trying to hold on to a fragile trade truce with China, it also risks destabilizing the global finance sector.

That risk is one the U.S. may have to take, said Rep. Johnny Olszewski (D-Md.), a member of the House subcommittee on East Asia and the Pacific.

The administration should “hold accountable any financial institution that knowingly helps the Iranian regime evade sanctions, finance terrorism, or fund activities that threaten Americans and our allies — that includes any Chinese institution the facts show are facilitating Iran’s illicit oil trade,” Olszewski said.

That rare consensus reflects how fatigue with the Iran war — now entering its sixth month — is fueling bipartisan support for increasingly creative and aggressive moves to end it.

While President Donald Trump declared the Strait of Hormuz “very functioning” on Wednesday, ongoing Iranian attacks on shipping are throttling traffic through a waterway that was the gateway for 25 percent of global crude oil exports from the region before the war.

There are still plenty of lawmakers on Capitol Hill who are wary of provoking Beijing, including those whose districts suffered from Beijing’s freeze on agricultural imports and suspension of critical mineral exports during the U.S.-China trade war last year.

But the pressure from even some on Blue Light News to take on Chinese banks highlights a more general anger in Congress about China’s reluctance to use its influence on Tehran to push Iranian leadership toward striking a peace deal with the U.S. That’s despite Xi’s offer to “be of any help whatsoever” in ending the conflict when the two leaders met in Beijing in May.

“There is real, bipartisan frustration building on Capitol Hill” about China’s role in enabling the Iranian regime, said Jon Stivers, a former senior adviser to former Speaker Nancy Pelosi (D-Calif.) who now serves on the U.S.-China Economic and Security Review Commission.

Chinese state banks serve as conduits for transactions in which Iran sells oil to China’s “teapot refineries,” which purchase around 90 percent of Iran’s exported crude.

The transactions involve China-based smaller provincial banks that then transfer the funds to large state-owned banks that have Hong Kong subsidiaries, the U.S.-China Economic and Security Review Commission said in a November report.

The Treasury Department declined to elaborate on whether it’s in contact with Beijing on possible sanctions. “We won’t detail specific conversations with foreign counterparts,” Treasury said in a statement.

The Chinese embassy declined to comment on whether the administration is in contact with Beijing regarding possible sanctions on Chinese banks.

Beijing has called the sanctions threat “economic warfare” and hinted it’s ready to punch back.

New U.S. sanctions will “fuel tensions and lead to risk spillover, which will disrupt the global economic and financial order, and harm the legitimate rights and interests of other countries,” Chinese Foreign Ministry spokesperson Lin Jian said Tuesday.

Some lawmakers argued that the key is not to avoid sanctioning banks because of the risk, but to prepare for potential economic blowback.

“Chinese banks that help Iran evade sanctions should be held accountable, but accountability has to come with strategy,” said Rep. Haley Stevens (D-Mich.), a member of the House Select Committee on China. “We also can’t ignore the risk of Chinese retaliation — Beijing has shown its willingness to weaponize its dominance of rare earths.”

Addressing that danger should go hand in hand with sanctions on Chinese banks, said Rep. Zach Nunn (R-Iowa), a member of the House Select Committee on China.

“The bigger fight is making sure China’s Communist Party can never hold America’s supply chains hostage in the first place,” Nunn said.

The administration is likely also weighing the benefits of sanctioning Chinese banks against the risk that it may threaten Trump’s summit with China’s leader Xi Jinping in Washington next month. Bessent avoided naming “China” during his press conference Monday despite multiple questions from reporters about whether the threatened sanctions would hit Beijing.

There’s a danger that sanctions on one or more of China’s four largest state-owned banks — Bank of China, China Construction Bank, Industrial & Commercial Bank of China and Agricultural Bank of China — could spark negative ripple effects across international finance institutions. They hold an estimated $25 trillion in combined assets.

“We’ve always called it the nuclear economic weapon — to really stop the Chinese would be to hit the big banks like Bank of China — with sanctions,” said Dennis Wilder, former National Security Council director for China in the George W. Bush administration.

Bessent alluded to that risk when he said he’ll give potential sanction targets time “to remedy bad behavior” prior to possible sanctions. “Why would I want to blow up the global financial system?” he asked.

In recent years, the administration has only taken small steps toward going after Chinese financial institutions. The Treasury Department warned two Chinese banks earlier this year that they face U.S. sanctions “if we can prove that there is Iranian money flowing through your accounts,” Bessent said.

Over the last 14 years the U.S. government has imposed sanctions on two smaller Chinese banks with relatively limited links to the global financial sector. The Treasury Department targeted Bank of Kunlun for its “relationships with U.S.-designated Iranian banks” in 2012 and Bank of Dandong for enabling “illicit North Korean financial activity” in 2017, severing them from the U.S. financial system.

China’s large state banks have global operations involving debt payments and currency transfers that U.S. sanctions could disrupt. Bessent even threatened that institutions linked to money laundering for Tehran “will be removed from the U.S. dollar system.”

Those affected by U.S. sanctions on a large Chinese state-owned bank would “likely include major banks and customers in the U.S., Europe, Japan and elsewhere,” said Erik Woodhouse, former deputy assistant secretary of State for counter threat finance and sanctions.

Yet lawmakers eager to kneecap China are undeterred.

The administration “has already sanctioned Chinese refineries, shipping companies, procurement networks, and other entities that help sustain Iran’s illicit economy,” said Gus Bilirakis (R-Fla.), a member of the House Select Committee on China. “I support any efforts to expand that pressure to foreign entities providing Iran with the financial lifeline it uses to fund terrorism and destabilize the region.”

Congress

Johnson’s meeting request

Published

20 hours ago

November 6, 2026

Blue Light Newsroom

Sen. Ron Johnson is sending a letter Monday requesting a conference meeting to discuss the midterm results and a delay in the leadership election.

Johnson has gathered enough signatures to force the meeting under the Senate GOP’s rules and is proposing the gathering for 9 a.m. Tuesday.

“Tuesday’s result was a stunning defeat,” Johnson and his backers write in the letter to Conference Chair Tom Cotton (R-Ark.), a copy of which was obtained by POLITICO. “Holding leadership elections without engaging in a robust discussion and evaluation of how those running for leadership intend to lead would be political malpractice”

Republicans still expect their leadership election to be held Tuesday, where Majority Leader John Thune is so far unopposed to lead the party next year in the minority.

Congress

Chris Murphy released from hospital after stroke

Published

23 hours ago

November 6, 2026

Blue Light Newsroom

Sen. Chris Murphy announced Friday that he has been released from the hospital after suffering a stroke last week, but will miss “several weeks” of Senate votes while he continues to recover.

“The doctors are very encouraged by the progress I’ve made so far,” the Connecticut Democrat said in a statement. “In order to take my recovery seriously and get back to work on the quickest timeline possible, I will be spending several weeks at a rehabilitation center after being discharged from the hospital today.”

He added that he remains in touch remotely with his staff and colleagues.

Murphy, who was hospitalized last weekend, said Friday that he was “diagnosed with a small bleed in the thalamus region of my brain.” Jose Suarez, the Chief of Neurosciences Critical Care at The Johns Hopkins Hospital, said in a separate statement released by Murphy’s office that the senator “experienced a small hemorrhagic stroke.”

“He has shown tremendous progress, and at the current rate of improvement, we expect that he will make a full recovery following rehabilitation,” Suarez added.

Murphy is the latest senator to suffer a stroke in recent years. Sens. Chris Van Hollen (D-Md.) and Ben Ray Lujan (D-N.M.) were both hospitalized for strokes in 2022. Sen. John Fetterman (D-Pa.), at that time a Senate candidate, also had a stroke in 2022 that he later described as near fatal.

Congress

Congressional Progressive Caucus chair lays out strategy to ‘wield our power’

Published

23 hours ago

November 6, 2026

Blue Light Newsroom

The head of the Congressional Progressive Caucus said his group will still be power brokers in a massive Democratic majority in a strategy memo previewing plans for next term.

“While some in the press have speculated that a majority of this size undermines our influence within the caucus, they have it exactly backwards,” Rep. Greg Casar of Texas said in the Friday memo obtained by Blue Light News. “Big majorities are good for getting big things done. Our goal is not to win a battle against other Democratic caucuses. It is to pass longstanding progressive priorities that bring down costs, root out corruption, and boost wages.”

The CPC will have at least 105 members next term, according to the memo. If Democrats had a narrow majority, progressives — and any other faction in the caucus — could have used their votes as leverage. Now that presumptive speaker Hakeem Jeffries will have as many 30 votes to spare, Democrats broadly are recalibrating their approach next term.

Casar laid out a “three-pronged” strategy for the CPC to “wield our power” in the three-page memo — tackling legislation, oversight and “holding Donald Trump to his word on populist economic policies.”

“Small majorities give corporate special interest groups the ability to block popular populist policies by recruiting a small number of opponents; a big majority gives us the advantage,” he said.

Casar previewed how the CPC can engage with Trump, noting that “one of the few bright spots for bipartisan lawmaking” was a housing bill that banned private equity firms from buying homes. He noted the caucus should push Trump to cap credit card interest rates, lower credit card fees for small businesses and lower prescription drug costs.

“While we oppose [Trump] strongly on the vast majority of fronts, we should send bills to his desk that would lower prices and raise paychecks. If he signs them, good. If he vetoes those bills, that will propel us to a continued Democratic majority and a trifecta where a Democratic president can sign these proposals into law,” he said.

Casar also outlined oversight targets beyond the administration, urging Democrats to specifically investigate corporations that use customer data for “surveillance pricing,” health care companies that are “taking advantage of seniors” through the Medicare Advantage program and artificial intelligence labs who are “putting jobs and lives at risk.”

“By focusing not just on the Trump administration but also on big corporations and billionaires, we will show the American people we are not just anti-Trump but also pro-worker and pro-consumer,” he said.