US President Donald Trump announced a 25% tariff on all goods from countries doing business with Iran. The declaration jeopardized the fragile trade truce with China, the world’s largest buyer of Iranian oil. On Monday, Trump wrote on social media, “From now on, any country doing business with the Islamic Republic of Iran will pay a 25% tariff on all transactions with the United States.” However, he did not specify details on how the duties would be applied.

The threat came just months after the October agreement between Trump and Xi Jinping, which paused the trade war and granted the US access to Chinese rare earth elements. Following the truce, the average US tariff rate on Chinese goods fell from 40.8% to 30.8%. The new duties could nullify those accords and put Trump’s planned April visit to Beijing in doubt.

Beijing treated the threat as an act of pressure and vowed to take “all necessary measures.” Financial markets responded cautiously, with investors largely treating the move as mere rhetoric. According to Union Bancaire Privee analyst Vey‑Sern Ling, Trump is unlikely to risk unraveling the truce with China solely to exert pressure on Iran. Ling added that a tangible market reaction would only come if tankers carrying Iranian oil were physically intercepted.