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Here is How China-US Trade War Impacts Iran

25 8 0
20.09.2019

In the last week of August, China added crude oil imports from the US to its tariff list for the first time in a retaliatory decision against the US decision to impose fresh tariffs on Chinese products. China imports about 6 per cent of its crude oil from the US. For an economy that increasingly relies on crude oil imports, this decision carries a lot of significance. While China is also preparing to impose high tariffs on import of US cars and the trade-war is likely to continue in the days to come, the all-important question is: why would China impose tariffs on import of oil, the life-line of its economy? According to some latest figures, China’s reliance on imported crude oil has already jumped to 70 per cent and gas moving towards 50 per cent. Most certainly, China would never have taken such a decision unless its leadership had first secured an alternative source of supply of oil. Here is where Iran and cheap/tariff free Iranian oil comes into play and the larger geo-political chessboard becomes active, allowing China to counter the US on three levels.

First, in terms of trade war, Chinese tariffs on oil imports from the US will undermine the US position as the world’s ‘new champion oil producer.’ Second, in terms of regional geo-politics, import of oil from Iran will boost Iran’s economy in the face of US sanctions and help Iranian economy keep afloat. Needless to say, Iran is a key territorial link for China’s Belt and Road Initiative to expand beyond Asia. Third, if the US and China........

© New Eastern Outlook