Description: US Treasury Department has announced that more than 40 Chinese oil companies and their ships would come under sanctions for transporting illegally obtained oil from Iran. The move follows Trump’s threats for secondary sanctions on countries and companies that are providing Iran with economic or military support. The EU also included Chinese companies in its 20th package of sanctions against Russia, which officials in Beijing have declared illegal and counterproductive towards the partnership between EU and China. Due to the European sanctions on Chinese financial and energy companies, China imposed a ban on dual use exports to seven European defense companies which were reportedly involved in supply arms to Taiwan. The sanctions on all sides arrive ahead of a highly anticipated Trump – Xi summit in May, where the presidents are set to discuss their ongoing trade war.
Impact: The imposed sanctions on behalf of the US Treasury Department and the European Union are likely aimed at suffocating China’s economic ambitions in the long – term and crippling the country’s growth rates and access to energy in the immediate term. Europe finds itself as a conduit for US foreign policy, straining relations with China to avoid further deterioration in its transatlantic partnership with the US which is highly likely to backfire since the EU is heavily reliant on China on several macroeconomic fronts. China is likely to counteract the sanctions by posing further restrictions as both the US and China are hedging their negotiation positions ahead of the leaders meeting in May. The wide difference in geopolitical priorities under the current constellation of power dynamics between the US and China indicates that no major breakthroughs would be materialized in the framework of the summit.