US sanctions Chinese firms assisting IRGC as Iran War looms large ahead of Trump’s China visit

The Trump Administration has been leveling sanctions against an array of Chinese companies profiting off of illicit Iranian oil sales and propping up the Iranian military ahead of a high-stakes meeting between President Donald Trump and Chinese leader Xi Jinping in Beijing this week.

The U.S. naval blockade has stopped Iranian vessels from making it to China and elsewhere to sell their sanctioned oil, while the State and Treasury departments have hit Chinese companies with significant sanctions over their roles in the illicit Iranian oil market and in helping provide the Islamic Revolutionary Guard with dual-use technologies and with satellite intelligence that could be used to target U.S. forces in the region.

For years, China has relied upon exploiting U.S. sanctions to import steeply discounted oil from pariah states such as Iran and Venezuela to fuel both its economy and military buildup. Trump’s interventions against each have upended this lucrative arrangement, and his administration has recently sought to tighten the screws further to limit China’s access to sanctioned Iranian oil and to call out Chinese firms assisting the Iranian regime militarily.

The Chinese Foreign Ministry confirmed Monday that Trump will be visiting China on Wednesday through Friday.

Trump was asked at the White House on Monday whether the war with Iran had changed the Xi meeting agenda.

“Look, I have a great relationship with President Xi," he responded. "We’re doing a lot of business, but it is smart business. ... I have a great relationship with President Xi, and I think you can see that with the fact that in [the Strait of] Hormuz – they get a big percentage, 40% of their oil, from Hormuz – there’s been no ships coming in, no nasty ships coming in.”

Trump also said of Xi: “I respect him a lot, and hopefully he respects me. He didn’t respect our previous government.”

State and Treasury spotlight CCP assistance to the Iranian regime

The State and Treasury departments have put the spotlight on Chinese companies that have been helping the Iranian regime during Operation Epic Fury, the United States' military offensive against Iran that began Feb. 28. 

State Department spokesman Thomas Pigott announced in late April that “the United States is taking decisive action to disrupt Iran’s illicit oil trade, the Iranian regime’s primary revenue streams that fund its terrorism and destabilization of the region.”

“The Department of the Treasury imposed sanctions today on a major, independent Chinese refinery and nearly 40 other targets – vessels and their respective owners or managers – that serve as critical lifelines for Iran’s oil exports,” he said. “This action cuts revenue streams that fund the regime’s destabilizing activities across the Middle East. The Administration’s maximum pressure campaign will hold Tehran accountable for its regional aggression and threats to American interests.”

At the same time, the Treasury Department said that its Office of Foreign Assets Control had sanctioned the “China-based independent teapot refinery Hengli Petrochemical Refinery” and argued that such small independent refineries in China "continue to play a vital role in sustaining Iran’s oil economy, and Hengli is one of Iran’s largest customers for crude oil and other petroleum products, having purchased billions of dollars’ worth of Iranian petroleum.”

Pigott announced in early May that the State Department had sanctioned “several entities, an individual, and a vessel involved in the trade of Iranian petroleum, petroleum products, and petrochemical products” and said that “this action targeted Qingdao Haiye Oil Terminal,” which was “a China-based petroleum terminal operator that has imported tens of millions of barrels of sanctioned Iranian crude oil” since the issuance of a national security presidential memorandum by Trump in February 2025.

“Haiye has enabled the flow of billions of dollars to Tehran that has relied on sophisticated evasion schemes, accepting cargo from vessels conducting illicit ship-to-ship transfers with sanctioned vessels,” Pigott said.

The Chinese Ministry of Commerce responded by saying that the U.S. sanctions, issued “on the grounds of their participation in Iranian oil transactions, shall not be recognized, implemented, or complied with” by the Chinese government. The ministry also said it was flaunting the sanctions “to safeguard national sovereignty, security, and development interests, and to protect the legitimate rights and interests of Chinese citizens, legal persons, and other organizations.”

A reporter last week asked Secretary of State Marco Rubio what his reaction was to the Iranian foreign minister visiting China, and also asked him to address Beijing instructing its firms to ignore U.S. sanctions.

“Well, I’ll direct you to Treasury on that front," he said. "There are options that we have. If you ignore our sanctions, you’re going to face secondary sanctions. And I don’t have an announcement for you on that today, but we don’t do these things for symbolic purposes."

He also said: “On the first point about the visit, it’s fine. I hope the Chinese tell him what he needs to be told, and that is, 'What you are doing in the straits in causing you to be globally isolated. You’re the bad guy in this. You guys should not be blowing up ships. You should not be putting mines, you should not be holding hostage the – trying to hold hostage the global economy.'”

Rubio then announced Friday that the U.S. was imposing sanctions on 11 entities and three individuals based in Iran, China and elsewhere that were “involved in Iran’s efforts to acquire or use arms and related material.”

He said the sanctions targeted “several China-based entities providing satellite imagery to enable Iran’s military strikes against U.S. forces in the Middle East” and that “we are designating entities and individuals enabling efforts by Iran’s military to secure weapons, as well as raw materials with applications in Iran’s ballistic missile and unmanned aerial vehicle programs.”

“Today’s action holds China-based entities accountable for their support to Iran,” Rubio also said. “The United States will take all necessary action at its disposal to target third-country entities and individuals aiding Iran’s military and defense industrial base.”

The related State Department fact sheet states, “The supply of satellite imagery of U.S. facilities in the Middle East to Iran threatens American and partner personnel” and that the U.S. “will continue to take action to hold China-based entities accountable for their support to Iran and ensure Iran cannot reconstitute its proliferation-sensitive programs following Operation Epic Fury.”

The Trump Administration said it was designating the Chinese companies “for having provided to Iran any technical training, financial resources or services, advice, other services, or assistance related to the supply, sale, transfer, manufacture, maintenance, or use of arms and related materiel.”

The State Department said that “Meentropy Technology (Hangzhou) Co. Ltd (MizarVision)” is a “China-based geo-spatial intelligence firm that published open-source images detailing U.S. military activity during Operation Epic Fury.” 

In addition, the department said that Earth Eye is also a “China-based entity that provided satellite imagery to Iran during Operation Epic Fury.”

The U.S. federal agency said it was also sanctioning companies “for having engaged, or attempted to engage, in any activity that materially contributes to, or poses a risk of materially contributing to, the proliferation of arms or related materiel or items intended for military end-uses or military end-users, including any efforts to manufacture, acquire, possess, develop, transport, transfer, or use such items, by the Government of Iran.”

The State Department specifically named Chang Guang Satellite Technology as a “China-based commercial satellite company that has collected satellite imagery of U.S. and allied military facilities to support Iranian imagery requests during Operation Epic Fury.” The department added that Chang Guang has previously provided satellite imagery to the Iran-backed Houthi terrorist group.

“While the surviving IRGC leaders are trapped like rats in a sinking ship, the Treasury Department is unrelenting in our Economic Fury campaign,” Treasury Secretary Scott Bessent said when recently announcing his department's actions.  “Under President Trump’s decisive leadership, we will continue to act to Keep America Safe and target foreign individuals and companies providing Iran’s military with weapons for use against U.S. forces.”

The Treasury Department said that “China-based Yushita Shanghai International Trade Co. Ltd. (Yushita) is a facilitator for the Center for Progress and Development of Iran (CDPI) – the latest name of Iran’s U.S.-designated Center for Innovation and Technology Cooperation (CITC), which coordinates Iranian technology acquisition efforts” and alleged that “CITC has sought to purchase weapons, including man-portable air-defensive systems (MANPADS), from China.”

The Office of Foreign Assets Control issued additional sanctions against the “Iran-based Pishgam Electronic Safeh Company (PESC)” and said the company had “procured thousands of servomotors with one-way attack UAV applications, which have been recovered in downed Shahed-136 UAVs, for Iran’s IRGC Aerospace Force Self Sufficiency Jihad Organization.”

The Treasury Department said there was a China connection, arguing that the “China-based Hitex Insulation Ningbo Company Limited (Hitex) has supplied – or attempted to supply – millions of dollars’ worth of carbon fiber, honeycomb fabric, and other raw aerospace‑grade materials to PESC, ultimately for the IRGC ASF SSJO.”

The Chinese Foreign Ministry responded on Monday with anger toward the U.S. actions.

“China firmly opposes illicit unilateral sanctions that have no basis in international law or the authorization of the UN Security Council,” ministry spokesperson Guo Jiakun said. “The Chinese government always asks Chinese companies to operate in accordance with laws and regulations. We will firmly protect Chinese businesses’ legitimate rights and interests. As to the Iran situation, we have made clear our position on many occasions. The pressing priority now is to prevent by all means a relapse in fighting, rather than exploit the situation to throw mud at other countries.”

China quietly plays key role in assisting the Iranian military

The U.S.-China Economic and Security Review Commission had assessed in March that “China enables Iran to mitigate global sanctions through trade and financial networks, technology transfers, and dual-use trade. Chinese banks, front companies, and intermediary firms facilitate oil transactions, the shadow fleet that transports Iranian oil, access to controlled technologies that support Iran’s missile and drone programs, and money laundering that enables it all.”

The Small Wars Journal similarly argued that month that “while Iran remains the primary military actor confronting U.S. and Israeli forces on the battlefield, China’s technological and intelligence support appears to play an important enabling role in strengthening Tehran’s operational effectiveness.”

The news outlet also said: “Access to advanced satellite intelligence, the BeiDou navigation system, modern radar technologies, and electronic warfare expertise can significantly enhance Iran’s ability to conduct more precise missile and drone strikes while improving its capacity to defend against sophisticated air campaigns.” 

The Wall Street Journal wrote an article titled “China Is Still Supplying Drone Factories in Iran, Russia Despite U.S. Sanctions” in early May.

The news outlet reported that “the open wartime marketing by a small, obscure Chinese company points to a growing source of frustration for Washington: its struggle to staunch the flow of so-called dual-use goods—items with both civilian and military uses—to adversaries.”

“Chinese companies are shipping hundreds of containers filled with such goods to Russia and Iran, according to Chinese customs data. Items on the packing lists range from engines to computer chips, fiber-optic cables, and gyroscopes,” the outlet also reported. “For a time, Chinese exporters intentionally mislabeled some shipments to skirt U.S. and European sanctions, but in many instances they no longer bother, according to former senior Treasury Department officials and weapons analysts.”

Jiakun said Monday that “China’s position on the Iran situation is consistent. We will continue playing a positive role in promoting peace talks and bringing about an end to the conflict.”

Trump says the ceasefire with Iran is on 'life support' ahead of China trip

Trump said from the Oval Office on Monday that the fragile ceasefire with the Iranian regime was on “life support.”

The president also said that an Iranian peace deal proposal “was just unacceptable” and called it a “stupid proposal.”

“Iran has been defeated militarily, totally. They have a little left they probably built up during this period of time. We’ll knock that out in about a day,” Trump said.

The president repeatedly insisted that “I have a plan” to continue to box in the Iranian regime. “It’s a very simple plan. Iran cannot have a nuclear weapon, and they won’t have a nuclear weapon.”

Trump also sought to push back on any sentiments that he might not be willing to see the conflict with Iran through to a U.S. victory.

“They didn’t want to believe it. They think that,' well I’ll get tired of this or I’ll get bored or I’ll have some pressure,” Trump said of Iran. “But there is no pressure, there is no pressure at all. We’ll have a complete victory.”

Trump seemed to reveal that the Iranians had agreed to hand over their enriched uranium stockpile, before saying that Iran had already backtracked on this.

“Iran told me very strongly, because they intend to give us the nuclear dust, as I call it," he said. "They told me: number one, you’re getting it, but you’re going to have to take it out, because the site was so obliterated that there’s only one or two controls in the world that can get it – it’s so deep and got hit so hard that there is no way they have the equipment to move it – you and China are the only two countries in the world that could take it out.”

Trump said Iran agreed to this a couple of days ago but then “changed their mind” on allowing the U.S. to go in and get the buried enriched uranium.

The president was asked whether the fractured Iranian leadership could actually reach a deal with the U.S., and Trump said yes.

“You have the moderates and you have the lunatics. I think the moderates are more respected. The lunatics want to fight to the end — it would be a very quick fight,” he replied.

The president was also asked whether the ceasefire could remain in place.

“It’s unbelievably weak, I would say. ... Right now, it’s on life support. ... I would say the ceasefire is on massive life support,” Trump assessed.

The high stakes Trump-Xi meeting in China 

Trump had said on Truth Social in late March that “My meeting with the Highly Respected President of China, President Xi Jinping, which was originally postponed due to our Military operation in Iran, has been rescheduled, and will take place in Beijing” in mid-May.

Last week, the president was asked about the relationship between China and Iran.

"I have a very good relationship with President Xi. You know, I find him to be a tremendous guy, and we get along well. And you see how we do. We do a lot of business with China and making a lot of money. We're making a lot of money. It's different than it used to be, but I'll be talking about – that'll be one subject,” Trump said.

Trump added: “But he [Xi] has been very nice about this. You know, in all fairness, he gets like, 60% of his oil from Hormuz. And he's been, I think he's been very respectful. We haven't been challenged by China. They don't challenge us. And he wouldn't do that. I don't think he'd do that because of me. But, I think he's been very respectful."

Rubio in October had said the U.S. “condemns the Chinese Communist Party (CCP)’s recent detention of dozens of leaders of the unregistered house Zion Church in China, including prominent pastor Mingri 'Ezra' Jin.”

“This crackdown further demonstrates how the CCP exercises hostility towards Christians who reject Party interference in their faith and choose to worship at unregistered house churches. We call on the CCP to immediately release the detained church leaders and to allow all people of faith, including members of house churches, to engage in religious activities without fear of retribution."

Last week, Trump reportedly indicated that “I’ll bring it up” when asked about the imprisonment of the Christian pastor.

Jimmy Lai, a prominent Catholic, is also being prosecuted by the Chinese government. Lai, a former Hong Kong media mogul and outspoken pro-democracy voice, was convicted on alleged fraud charges in October 2022, and he was already serving jail time for his role in Hong Kong’s protests in 2019 and for attending a 2020 vigil for those killed by the Chinese government during the Tiananmen Square protest clampdown in 1989.

Lai also faced charges related to “colluding with foreign forces” and putting together “seditious publications” — and he now faces potential life in prison.

Ten bishops from around the world signed a petition in November 2023 calling upon the CCP-led Hong Kong government “to immediately and unconditionally release Jimmy Lai. Mr. Lai’s persecution for supporting pro-democracy causes through his newspaper and in other forums has gone on long enough.”

The signatories included Archbishop Timothy Dolan and Bishop Robert Barron of the United States, both of whom were named by Trump to the recently-created Religious Liberty Commission last year.

Trump told conservative radio host Hugh Hewitt earlier in May, “I brought him up” with Xi previously, and “I will be bringing it up” again during his meeting with Xi this week.

“I’ll bring them both up. I brought it up before – Jimmy Lai, I brought up,” Trump said at the White House on Monday.

“Jimmy Lai, he caused lots of turmoil with China, he tried to do the right thing, he wasn’t successful, he went to jail, and people would like him to get out, and I’d like to see him get out too. So, I’ll bring him up again.”

The president said of Taiwan that “it always comes up.”

Trump said that the Russian invasion of Ukraine would not have happened if he were president, and added that “Taiwan, I equate it a little bit to that. If you have the right president, I don’t think it’ll happen. I think we’ll be fine. I have a very good relationship with President Xi, because I don’t want that to happen.”

Jiakun said Monday that “China stands ready to work with the U.S. to expand cooperation and manage differences in the spirit of equality, respect and mutual benefit, and provide more stability and certainty for a transforming and volatile world.”