China defends Iran business ties after Trump threat

China’s business ties with Iran are open, transparent and lawful, its foreign ministry said on Wednesday, after U.S. President Donald Trump said companies doing business with Iran would be barred from the United States.

New U.S. sanctions on Iran have taken effect despite pleas from Washington’s allies.

Iran dismissed a last-minute offer from the Trump administration for talks, saying it could not negotiate while Washington had reneged on a 2015 deal to lift sanctions in return for curbs on Iran’s nuclear program.

Trump decided this year to pull out of the agreement, ignoring pleas from the other world powers that had co-sponsored the deal, including Washington’s main European allies, Britain, France and Germany, as well as Russia and China.

Beijing has cultivated close commercial links with Tehran, especially in the energy sector.

“China has consistently opposed unilateral sanctions and long-armed jurisdiction,” the Chinese foreign ministry said in a faxed statement to Reuters, responding to questions on the new U.S. sanctions and Trump’s threats on firms doing business with Iran.

“China’s commercial cooperation with Iran is open and transparent, reasonable, fair and lawful, not violating any United Nations Security Council resolutions,” it added.

“China’s lawful rights should be protected.”

China, Iran’s top oil customer, buys roughly 650,000 barrels a day of crude oil from Tehran, or 7 percent of China’s total crude oil imports. At current market rates, the imports are worth some $15 billion a year.

State energy firms CNPC and Sinopec have invested billions of dollars in key Iranian oil fields such as Yadavaran and North Azadegan and have been sending oil to China.

European countries, hoping to persuade Tehran to continue to respect the nuclear deal, have promised to try to lessen the blow of sanctions and to urge their firms not to pull out.

But that has proven difficult, and European companies have quit Iran, arguing that they cannot risk their U.S. business.

Few American companies do much business in Iran so the impact of sanctions mainly stems from Washington’s ability to block European and Asian firms from trading there.

Among large European companies that have suspended plans to invest in Iran are France’s oil major Total  and its big carmakers, PSA and Renault .

Reporting by Ben Blanchard; Additional reporting by Chen Aizhu; Editing by Nick Macfie