The United States and China may settle many of their trade disagreements soon. However, one issue still causes tension—Washington’s demand that China stop buying oil from Russia and Iran.

After two days of talks in Stockholm, China responded strongly. On Wednesday, China’s Foreign Ministry posted on X, “China will always ensure its energy supply in ways that serve our national interests. Coercion and pressuring will not achieve anything. China will firmly defend its sovereignty, security and development interests.”

This response came even as both countries showed hope for a deal. It highlights how confident China feels while dealing with the Trump administration, especially when energy and foreign policy are involved.

US Warns of Heavy Tariffs

US Treasury Secretary Scott Bessent, who led the negotiations, admitted the talks got tense over oil. He said, “The Chinese take their sovereignty very seriously.” He added, “We do not want to impede on their sovereignty, so they would like to pay a 100 per cent tariff.”

Despite this, Bessent said the talks are still on track. On CNBC, he stated, “I believe that we have the makings of a deal.” He also called the Chinese "tough negotiators."

Still, experts doubt the US will follow through with such harsh tariffs. Gabriel Wildau from consultancy Teneo said, “Realising those threats would derail all the recent progress and probably kill any chance" for Trump and Xi Jinping to meet and sign a deal this fall.

US Wants to Cut Funds to Russia and Iran

The US wants to stop oil sales from Russia and Iran, as it sees this as a way to weaken their militaries. Washington believes oil money helps Russia’s war in Ukraine and Iran’s support for militants in the Middle East.

China Refuses to Back Down

China has made it clear that it won’t give in easily. When Trump announced new tariffs in April, China was the only country that retaliated.

Tu Xinquan, a top trade expert in Beijing, said, “If the US is bent on imposing tariffs, China will fight to the end, and this is China's consistent official stance.” He also said China doesn’t believe the US is serious about pressuring Russia.

According to Scott Kennedy from the Center for Strategic and International Studies, China sees the US approach as inconsistent. “Beijing is unlikely to change its posture,” he said. Kennedy believes China might even use this issue to get more concessions from the US.

China Feels It Holds the Advantage

Danny Russel from the Asia Society Policy Institute said, “Beijing now sees itself as the one holding the cards in its struggle with Washington.” He added, “Trump has made it clear he wants a headline-grabbing deal with Xi,” so China doesn’t see this oil issue as a deal-breaker.

Russel also said China’s ties with Russia are more important than ever. “Beijing simply cannot afford to walk away from the oil from Russia and Iran,” he explained. “It is too important a strategic energy supply, and Beijing is buying it at fire-sale prices.”

China’s Dependence on Iranian and Russian Oil

China heavily depends on oil from Iran and Russia. A 2024 report by the US Energy Information Administration estimated that 80–90% of Iran’s oil exports go to China. China buys over 1 million barrels of Iranian oil every day.

When Iran’s parliament threatened to close the Strait of Hormuz in June after US airstrikes, China strongly opposed the idea. It stressed that keeping the oil route open was essential.

China is also Russia’s second-largest customer for seaborne crude oil—after India. In April, China increased its Russian oil imports by 20%, reaching more than 1.3 million barrels per day, according to the Kyiv School of Economics.

India Faces Pressure Too

Recently, Trump also announced a 25% tariff on goods from India, plus an extra tax because of India’s Russian oil purchases. India defended its position, saying its ties with Russia are “steady and time-tested.”

Stephen Miller, White House deputy chief of staff, said on Fox News, “It is not acceptable for India to continue financing the Ukraine war by purchasing oil from Russia.” He added, “People will be shocked to learn that India is basically tied with China in purchasing Russian oil.”