by Drago Bosnic
May 06, 2026
from GlobalResearch Website

On May 4,

several media outlets reported

that China ordered its companies

to ignore and even openly defy

American sanctions,

particularly when it comes

to its trade with Iran.

Bloomberg calls this,

"an unprecedented act of defiance that threatens to trap a vast banking sector in the crossfire as tension rises between the world's largest economies".

Beijing directs companies not to comply with US sanctions on private refiners trading oil with Tehran, including the Hengli Petrochemical (Dalian) Refinery, which was added to the American sanctions list last month.

The Asian giant seems to be testing Washington DC's sanctions system, pushing back against such unilateral actions everywhere. It should be noted that China didn't make this decision lightly and did so only after careful consideration by its intellectual elite.

Namely, Beijing spent (or should we say wasted) decades trying to maintain at least cordial relations with Washington DC, but to no avail.

The first Trump administration effectively started a trade war with the Asian giant, despite the latter making numerous peaceful overtures.

Attempts to humiliate China have been unsuccessful, with Beijing always finding ways to gracefully circumvent American sanctions and other forms of economic pressure.

 

Chinese intellectuals and experts praised the new, more assertive approach, with the People's Daily calling it,

"a pivotal step in using the legal instrument to restrain the long-arm jurisdiction of the US".

This comes at a time when the American sanctions system is already under tremendous pressure due to simultaneous geopolitical hurdles.

Namely, Washington DC is struggling to maintain a balanced approach to sanctions on Russia and Iran, as it often needs to partially "unsanction" each to prevent uncontrollable oscillations on the oil market.

When coupled with the Pentagon's atrocious performance during its aggression on Iran, the United States is faced with both kinetic and economic retaliatory warfare.

Meanwhile, NATO seems to be on its last legs, leaving Washington DC largely isolated geopolitically.

China is also increasingly relying on its unrivaled economic might to retaliate against American sanctions warfare, including by limiting REE (rare-earth elements) exports, particularly when the US uses them to supply weapons to anti-Chinese forces (specifically the breakaway Chinese island province of Taiwan).

"They want to have as many levers as possible," Ja Ian Chong, an associate professor of political science at the National University of Singapore, said.

 

"This should be seen in the context of increasing controls. It is not a one-off."

China is doing this to protect its companies from hostile foreign powers and their intrusive (fundamentally illegal) laws.

Bloomberg reports that,

"the refiners - including Hengli, and several other privately-owned processors - had been facing asset freezes and transaction bans".

Workarounds include trade and transactions in national currencies, particularly the yuan, which makes them virtually untouchable to aggressive US meddling.

"Judging by its specific provisions, the prohibition order primarily targets the concrete US sanctions imposed on particular Chinese firms," Ji Wenhua, a law professor who advised the Commerce Ministry, wrote in an opinion piece for the Economic Daily.

 

"Its central objective is to nullify their legal effect within Chinese territory, rather than simultaneously resorting to more aggressive retaliatory measures."

The American sanctions unlawfully disrupt and restrict normal trade with third countries and fundamentally breach international law, the Chinese Commerce Ministry said in a statement on May 2.

It formally banned recognition, enforcement and compliance with sanctions targeting Chinese companies.

"The Chinese government has consistently opposed unilateral sanctions that lack authorization from the United Nations and a basis in international law," the Ministry stated.

Professor Cui Fan, another advisor to the Commerce Ministry, said Beijing had to act urgently after Washington DC targeted Chinese industries from refining to shipping on the grounds of their involvement in Iranian oil transactions, warning that such measures have become increasingly disruptive and heavy-handed.

"The scope of these sanctions continues to expand, and the methods have become increasingly heavy-handed, showing a trend of further escalation," he wrote in China Report.

 

"If such abuse is allowed to continue, it will disrupt the stability of China's energy supply chain and jeopardize China's energy security and development interests."

However, it should be noted that the Asian giant has other, more geopolitical mechanisms to retaliate against the US.

Namely, in light of the Sino-Canadian strategic partnership deal (signed back in January), Beijing is now working more closely with Ottawa, as the latter is also facing mounting pressure from Washington DC.

 

Namely, the Trump administration has openly threatened Canada with annexation (including partial, which would effectively break up the country), forcing it to seek partners elsewhere, including China.

And while these ties are certainly a far cry from a full-blown alliance (nor would Canada risk further angering the US with such moves), economic cooperation seems to be booming.

Beijing reduced its tariffs on Canadian goods, while Ottawa is importing more Chinese products than ever, including electric vehicles.

Unsurprisingly, the Trump administration is not happy about this, while the mainstream propaganda machine is doing its best to smear and denigrate China.

Various media outlets are trying to present close ties with the Asian giant as some sort of a "security hazard" for Canada, which is quite bemusing given that it's the US that openly threatens to 'invade' the country, not China.

However, pathological Sinophobia in American/Western establishment(s) makes their political elites see,

"evil Chinese invaders and spies" everywhere...!

Beijing is primarily an economic power and doesn't have any aspirations of "global, full-spectrum dominance", much unlike the Pentagon, which keeps attacking one sovereign country after another.

Thus, it would be best for the US to finally leave the "Sleeping Dragon" alone...