A number of hawkish lawmakers on both sides of the aisle are urging the Trump administration to focus its effort to cut off Iran\u2019s economic lifeline on one primary target: Chinese banks.<\/p>\n

Since Treasury Secretary Scott Bessent pledged Monday<\/a> to sanction Tehran\u2019s \u201cenablers,\u201d one big question has been whether the White House is willing to risk taking on Beijing, Iran\u2019s biggest trading partner.<\/p>\n

On Capitol Hill, at least, the appetite appears to be there \u2014 particularly in terms of going after Chinese financial institutions.<\/p>\n

\u201cAny country complicit in providing an economic lifeline to Iran\u2019s terrorist regime, including China, must be held accountable,\u201d said Rep. Darin LaHood<\/a> (R-Ill.), a member of the House Select Committee on China. Sanctions on Chinese banks that do business with Iran would send \u201ca clear message to China and every other nation that enabling Tehran\u2019s malign actions will come at a cost,\u201d he said.<\/p>\n

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\u2019s economy: digital assets, technology, gold, aviation and shipping.<\/p>\n

Bessent stressed Monday the need to sanction those who \u201cfacilitate the flow of its finances\u201d to keep the regime afloat and said \u201cno one is above the reach of U.S. sanctions\u201d when asked if he\u2019s willing to sanction Chinese banks.<\/p>\n

But the Treasury Department did not target any Chinese banks in its initial list of sanctioned entities<\/a>. The administration instead targeted several Hong Kong and China-based companies implicated in illicit Iranian oil transfers and assistance with Tehran\u2019s missile technology development program.<\/p>\n

Bessent said Monday that he\u2019ll sanction a major foreign financial institution by the end of the week as part of the new effort, but declined to provide details.<\/p>\n

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.<\/p>\n

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

The administration should \u201chold accountable any financial institution that knowingly helps the Iranian regime evade sanctions, finance terrorism, or fund activities that threaten Americans and our allies \u2014 that includes any Chinese institution the facts show are facilitating Iran\u2019s illicit oil trade,\u201d Olszewski said.<\/p>\n

That rare consensus reflects how fatigue with the Iran war \u2014 now entering its sixth month \u2014 is fueling bipartisan support for increasingly creative and aggressive moves to end it.<\/p>\n

While President Donald Trump declared the Strait of Hormuz \u201cvery functioning\u201d on Wednesday<\/a>, ongoing Iranian attacks<\/a> on shipping are throttling traffic through a waterway that was the gateway for 25 percent of global crude oil exports<\/a> from the region before the war.<\/p>\n

There are still plenty of lawmakers on Capitol Hill who are wary of provoking Beijing, including those whose districts suffered from Beijing\u2019s freeze on agricultural imports<\/a> and suspension of critical mineral exports<\/a> during the U.S.-China trade war last year.<\/p>\n

But the pressure from even some on Blue Light News to take on Chinese banks highlights a more general anger in Congress about China\u2019s reluctance to use its influence on Tehran to push Iranian leadership toward striking a peace deal with the U.S. That\u2019s despite Xi\u2019s offer to \u201c be of any help whatsoever<\/a>\u201d in ending the conflict when the two leaders met in Beijing in May.<\/p>\n

\u201cThere is real, bipartisan frustration building on Capitol Hill\u201d about China\u2019s role in enabling the Iranian regime, said Jon Stivers, a former senior adviser to former Speaker Nancy Pelosi<\/a> (D-Calif.) who now serves on the U.S.-China Economic and Security Review Commission.<\/p>\n

Chinese state banks serve as conduits for transactions in which Iran sells oil to China\u2019s \u201cteapot refineries,\u201d which purchase around 90 percent of Iran\u2019s exported crude<\/a>.<\/p>\n

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<\/a>.<\/p>\n

The Treasury Department declined to elaborate on whether it’s in contact with Beijing on possible sanctions. \u201cWe won\u2019t detail specific conversations with foreign counterparts,\u201d Treasury said in a statement.<\/p>\n

The Chinese embassy declined to comment on whether the administration is in contact with Beijing regarding possible sanctions on Chinese banks.<\/p>\n

Beijing has called the sanctions threat \u201ceconomic warfare\u201d and hinted it\u2019s ready to punch back.<\/p>\n

New U.S. sanctions will \u201cfuel 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,\u201d Chinese Foreign Ministry spokesperson Lin Jian said Tuesday<\/a>.<\/p>\n

Some lawmakers argued that the key is not to avoid sanctioning banks because of the risk, but to prepare for potential economic blowback.<\/p>\n

\u201cChinese banks that help Iran evade sanctions should be held accountable, but accountability has to come with strategy,\u201d said Rep. Haley Stevens (D-Mich.), a member of the House Select Committee on China. \u201cWe also can\u2019t ignore the risk of Chinese retaliation \u2014 Beijing has shown its willingness to weaponize its dominance of rare earths<\/a>.\u201d<\/p>\n

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

\u201cThe bigger fight is making sure China\u2019s Communist Party can never hold America’s supply chains hostage in the first place,\u201d Nunn said.<\/p>\n

The administration is likely also weighing the benefits of sanctioning Chinese banks against the risk that it may threaten Trump\u2019s summit with China\u2019s leader Xi Jinping in Washington next month<\/a>. Bessent avoided naming \u201cChina\u201d during his press conference Monday despite multiple questions from reporters about whether the threatened sanctions would hit Beijing.<\/p>\n

There\u2019s a danger that sanctions on one or more of China\u2019s four largest state-owned banks \u2014 Bank of China, China Construction Bank, Industrial & Commercial Bank of China and Agricultural Bank of China \u2014 could spark negative ripple effects across international finance institutions. They hold an estimated $25 trillion in combined assets<\/a>.<\/p>\n

\u201cWe’ve always called it the nuclear economic weapon \u2014 to really stop the Chinese would be to hit the big banks like Bank of China \u2014 with sanctions,\u201d said Dennis Wilder, former National Security Council director for China in the George W. Bush administration.<\/p>\n

Bessent alluded to that risk when he said he\u2019ll give potential sanction targets time \u201cto remedy bad behavior\u201d prior to possible sanctions. \u201cWhy would I want to blow up the global financial system?\u201d he asked.<\/p>\n

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<\/a>.<\/p>\n

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 \u201c relationships with U.S.-designated Iranian banks<\/a>\u201d in 2012 and Bank of Dandong for enabling \u201c illicit North Korean financial activity<\/a>\u201d in 2017, severing them from the U.S. financial system.<\/p>\n

China\u2019s 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 \u201cwill be removed from the U.S. dollar system.\u201d<\/p>\n

Those affected by U.S. sanctions on a large Chinese state-owned bank would \u201clikely include major banks and customers in the U.S., Europe, Japan and elsewhere,\u201d said Erik Woodhouse, former deputy assistant secretary of State for counter threat finance and sanctions.<\/p>\n

Yet lawmakers eager to kneecap China are undeterred.<\/p>\n

The administration \u201chas already sanctioned Chinese refineries, shipping companies, procurement networks, and other entities that help sustain Iran’s illicit economy,\u201d said Gus Bilirakis<\/a> (R-Fla.), a member of the House Select Committee on China. \u201cI 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.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"