WASHINGTON (AP) — U.S. and Chinese negotiators have made progress on several trade issues that could lead to a broader agreement and help avoid steep tariffs. However, one major sticking point remains unresolved: the U.S. request for China to halt its oil imports from Iran and Russia.

“China will always secure its energy supplies in alignment with our national priorities,” China's Foreign Ministry stated on social media platform X after two days of discussions in Stockholm. The message came in reply to the U.S. proposing a potential 100% tariff.

“Coercion and pressure won’t work. China will resolutely protect its sovereignty, national security, and development,” the ministry added.

These remarks come as both sides have expressed hope about reaching an agreement to stabilize trade relations between the world’s two largest economies. The comments also reflect China’s firm stance, particularly when trade matters intersect with its broader energy and foreign policy strategies.

U.S. Treasury Secretary Scott Bessent, speaking to reporters after the talks, acknowledged China’s strong position on the oil issue. “When it comes to Russian energy purchases, it’s clear they view it as a matter of sovereignty,” he said.

“We don’t want to interfere in that, which is why they’re willing to accept a 100% tariff,” Bessent continued.

On Thursday, Bessent described the Chinese delegation as skilled and persistent, but said negotiations had not broken down. “I think we’re moving closer to an agreement,” he said in an interview.

Gabriel Wildau, head of the consulting firm Teneo, expressed doubt that former President Donald Trump would actually impose a 100% tariff. “Following through on that would likely unravel recent diplomatic progress and block any opportunity to finalize a deal with China,” Wildau suggested.

The U.S. is aiming to limit oil revenue for Iran and Russia to curb their military funding—especially as Russia continues its campaign in Ukraine and Iran remains linked to militant groups in the Middle East.

China’s Firm Approach

When Trump proposed sweeping tariffs against multiple nations earlier this year, China alone responded with countermeasures. Beijing made clear it would not yield to American pressure.

“If Washington insists on raising tariffs, China will stand its ground. That is our government’s consistent position,” said Tu Xinquan, director at the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

Tu noted that Beijing may also be questioning whether the U.S. is serious about prioritizing limitations on Russian energy trade, given mixed signals from Washington.

Scott Kennedy of the Center for Strategic and International Studies agreed that China is unlikely to shift its stance unless U.S. policies toward Russia and Iran become clearer and more consistent. He also suggested China may be using its oil relationship with these nations as leverage in negotiations.

Danny Russel of the Asia Society Policy Institute said Beijing believes it has the upper hand. With Trump seeking a high-profile agreement with President Xi Jinping, rejecting U.S. demands about oil imports may not endanger the broader deal—even if it causes brief tensions.

Keeping oil flowing from Russia reinforces Xi Jinping’s growing alignment with Russian President Vladimir Putin while helping China reduce its energy expenses, Russel added.

“China can’t afford to give up this energy connection with Russia and Iran,” he said. “It’s vital for their strategic needs, and they’re obtaining it at highly discounted rates.”

China’s Reliance on Iranian and Russian Oil

According to a 2024 report from the U.S. Energy Information Administration, between 80% and 90% of Iran’s oil exports are purchased by China, amounting to over 1 million barrels per day—a crucial supply for China’s economy.

When Iranian lawmakers proposed closing the Strait of Hormuz following U.S. military actions against Iran’s nuclear infrastructure, China publicly opposed such a move, highlighting the waterway’s importance to global oil transport.

While India has surpassed China in buying Russian oil transported by sea, China remains a key buyer. Reports from April show China’s Russian crude imports rising 20% to approximately 1.3 million barrels daily, according to the Kyiv School of Economics’ KSE Institute.

An oil tanker received a shipment at the Sheskharis facility in Novorossiysk, Russia, one of the nation’s largest export terminals for petroleum products. The complex is operated by Chernomortransneft JSC, a subsidiary of Transneft PJSC. (File photo)

This week, Trump also declared that Indian imports from Russia will trigger a new 25% tariff, plus other duties. India’s Foreign Ministry responded by emphasizing its long-standing partnership with Moscow.

Stephen Miller, a key White House advisor, argued that it’s unacceptable for India to support Russia’s war in Ukraine by buying its oil. “People may be surprised to find that India’s oil imports from Russia are nearly on par with China’s,” he said.

Pressure from U.S. Lawmakers

Senator Lindsey Graham of South Carolina has led an effort to impose sweeping sanctions on Russia and nations buying its energy resources. In April, he introduced a bill allowing the president to impose tariffs as high as 500% on any country that knowingly continues oil, gas, or petrochemical trade with Russia.

Graham explained that the bill aims to end the cycle of China—governed by a communist regime—buying discounted oil from Russia, indirectly fueling its war machine in Ukraine.

The proposed legislation has bipartisan support, with 84 co-sponsors in the Senate. A similar bill has been filed in the House of Representatives.

Republican leaders say they’re prepared to move the bill forward if Trump requests it. However, no action has been taken for now.

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This article was contributed to by AP journalists David McHugh in Frankfurt, Rajesh Roy in New Delhi, and researcher Yu Bing in Beijing.