Kathmandu— The United States is preparing to implement what officials are calling the “toughest ever” sanctions against Iran, aiming to cut off all major economic lifelines to Tehran. This aggressive approach, set to be announced Monday, risks a significant escalation of tensions with China – Iran’s largest trade partner – and could jeopardize ongoing efforts to stabilize US-China relations ahead of a planned summit between Presidents Trump and Xi Jinping later this month. The move tests whether the administration is willing to risk damaging ties with Beijing in pursuit of its goals for Iran, as analysts question if Washington will fully follow through on its rhetoric.

Economic Pressure Campaign Takes Shape

US President Donald Trump’s administration intends to sever “every” economic connection sustaining Iran. Treasury Secretary Scott Bessent warned that countries considering maintaining ties with Iran should not underestimate the consequences of defying US sanctions, stating that the president has empowered agencies to utilize previously untapped authorities. The planned measures will be unveiled in a news conference at 17:00 GMT.

China’s Role Under Scrutiny

The effectiveness of the US campaign hinges on whether it can curtail China's substantial economic relationship with Iran. In 2025, two-way trade between the countries totaled $9.96 billion, not including an additional $31.2 billion in Iranian oil shipments according to the US-China Economic and Security Review Commission. China accounts for approximately 90 percent of Iran’s oil sales, making Beijing a crucial lifeline for Tehran. So far, Washington has only sanctioned a handful of minor Chinese entities linked to trade with Iran.

Potential for Retaliation and Risk Assessment

Analysts are divided on whether the Trump administration will fully target China, as doing so could provoke economic retaliation from Beijing. Brett Erickson, a sanctions expert at Obsidian Risk Advisors, noted that targeting China would signal a commitment to a prolonged economic conflict with Iran. Jennifer Kavanagh of Defense Priorities believes the US won’t fully cut off Chinese economic ties, anticipating potential repercussions. China has already voiced opposition to US sanctions, arguing they will not resolve the situation and remains committed to promoting peace talks.

Balancing Act for Trump Ahead of Xi Summit

Invoking Beijing’s ire carries risks beyond economic retaliation, potentially derailing efforts to stabilize US-China relations just weeks before President Xi Jinping is scheduled to visit the White House. The upcoming summit on September 24 represents a second attempt to lower tensions since Washington initiated its policy toward Iran in late February. Zichen Wang of the Center for China and Globalization suggests both sides will likely try to prevent the Iran issue from overshadowing the broader agenda, though Chinese restraint shouldn’t be mistaken for inaction.

Limits of Economic Warfare

Despite aiming to “collapse” the Iranian government through sanctions, Erickson doubts economic pressure alone can achieve this goal. He argues that unless the US employs all available economic tools simultaneously and is willing to accept significant consequences, it's unlikely to succeed where military action has failed. While US sanctions may increase costs for Chinese companies doing business with Iran, some entity will likely continue to fill the role, especially if Beijing remains determined to maintain ties.

US officials are proceeding with the announcement of new sanctions Monday, but the extent to which they target China and the resulting response from Beijing remain uncertain. The situation is expected to be a key point of discussion during the upcoming meeting between Presidents Trump and Xi.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.