US Warns Iran and China Against Major Investment and Security Deal

State Dept vows to impose costs on both nations

The exact terms haven’t been announced, but Iranian officials are reporting that they are close to finalizing a major deal with China that would expand security ties, and greatly expand economic ties, including in the all-important banking sector.

This stands to benefit both China and Iran considerably, but runs counter to US interests in isolating both of them internationally, leading the State Department to oppose the deal and threaten to impose more costs on Iran and China if they try to make the deal.

Despite US anger, Iran keeps looking to make deals with other nations the US is hostile toward. Recent trade with Venezuela has been met with a furious US backlash. Similar anger can be expected with this new deal with China.

And yet, while US sanctions, particularly banking sanctions, have given them the ability to dictate most ties for those nations, China has a strong enough system to flat out defy the US, and the State Department’s sanctions likely are to be of minimum value.

The deal would give China a huge presence across Iran’s economy, including telecommunications, ports, railways, and banking. In return, they would be given a substantial discount in buying Iranian oil over the next 25 years.

China is heavily dependent on Mideast oil, and getting access, especially at a discount, from Iran would be a big economic advantage. It might also force other nations to start resisting US restrictions.

China would also agree to joint training with Iran, and joint weapons research. China likely wants a foothold in Iran to ensure the flow of oil, while a Chinese presence probably will lessen the risk of US or Israeli military attacks on Iran.

That may be an even bigger problem for the US, as recent war-making has shown a strategy of weakening nations with years or decades of sanctions and then rolling in essentially unopposed.

Author: Jason Ditz

Jason Ditz is Senior Editor for He has 20 years of experience in foreign policy research and his work has appeared in The American Conservative, Responsible Statecraft, Forbes, Toronto Star, Minneapolis Star-Tribune, Providence Journal, Washington Times, and the Detroit Free Press.