China escalated its fight against the U.S. over Iranian oil, defying American sanctions in a show of resistance ahead of President Trump’s visit to Beijing planned for next week.
Beijing has typically been wary of being seen to openly violate U.S. sanctions, even as privately run Chinese refiners, known as “teapots,” buy nearly every barrel of oil Iran exports.
But China’s Commerce Ministry on Saturday told companies not to comply with the U.S.’s blacklisting of several Chinese refineries over alleged purchases of Iranian oil, invoking for the first time a 2021 “blocking rule” designed to counteract foreign laws it believes violate international norms or restrict trade.
“It sends a broader message that China is willing and can resist what it views as unilateral and unfair sanctions that hurt Chinese interests,” said Dylan Loh, a professor at Singapore’s Nanyang Technological University who studies China’s foreign policy.
The U.S. in recent weeks has taken new steps to target Chinese refineries. In April, it imposed sanctions on a unit of Hengli Petrochemical, a major industrial company in China that the U.S. said has purchased billions of dollars of Iranian oil. It also warned financial institutions that they could be targeted for facilitating transactions for Chinese refiners using Iranian oil.
China’s response to the sanctions is the latest example of Beijing’s use of policy tools to fight back against U.S. economic weapons. Beijing last week ordered the unwinding of Meta Platforms’ $2.5 billion acquisition of Manus—a China-linked, Singapore-based startup—on national security grounds, a move some analysts say resembles U.S. foreign investment reviews.
“Just as many didn’t know the U.S. had all these tools for economic coercion, China is now saying, ‘look, we’ve prepared a bag of tricks too,’” said Damien Ma, director of research center Carnegie China.
With Trump and Chinese leader Xi Jinping set to meet next week, Beijing is signaling it won’t tolerate the U.S. “creating bargaining chips” ahead of the summit, according to Feng Chucheng, founding partner of China advisory firm Hutong Research.
The move follows Beijing’s playbook for the second Trump administration of using retaliation to “force a negotiation reset ahead of an in-person leadership meeting,” Feng added.
Write to Hannah Miao at hannah.miao@wsj.com