Overview
- The United States sanctioned five Chinese refiners in late April over alleged purchases of Iranian oil, naming Hengli Petrochemical as the largest target.
- China’s commerce ministry, which issued an order on May 2 under its 2021 Blocking Rules, told Chinese firms to refuse recognition or compliance with those US measures.
- The Blocking Rules act as a counter-sanctions law that can penalize Chinese entities for following certain foreign restrictions, turning past diplomatic protests into domestic legal enforcement.
- Banks and insurers have tightened checks and some customers canceled orders as companies weigh the risk of US penalties against potential violations of Chinese law.
- Multinationals are carving out China-only units and building separate payment and compliance systems, while analysts say the standoff could widen to sectors like shipping, semiconductors, and critical minerals ahead of a planned Trump–Xi meeting next week.