US Treasury Secretary Scott Bessent to Discuss Iran Financial Ties with China Ahead of Trump-Xi Summit

US Treasury Secretary Scott Bessent has announced plans to hold talks with Chinese Vice Premier He Lifeng this weekend to address Beijing's financial relationship with Iran. This diplomatic engagement precedes the upcoming summit between US President Donald Trump and Chinese President Xi Jinping later this month.

With the ongoing US-Iran conflict entering its seventh month, Washington has intensified efforts to build global backing for new sanctions designed to cut off Iran's financial lifelines. These measures aim to force the regime back to the negotiating table as efforts to reopen the Strait of Hormuz remain deadlocked.

“We have had some very good private discussions, and I look forward to those continuing this weekend when I meet my Chinese counterpart ... and I'm sure it will continue during President Xi's state visit,” Mr Bessent stated during his annual Capitol Hill testimony. Although he did not provide specific dates or locations for the meeting, Beijing has not yet confirmed the schedule for the visit.

Last month, the US announced an expansion of secondary sanctions targeting businesses and nations engaging in transactions with Iran. The Treasury Department cautioned that companies maintaining financial ties with Tehran risk exclusion from the dollar-based global financial system.

While the US has penalized China's “teapot refineries” for purchasing heavily discounted Iranian crude, it has yet to target Chinese financial institutions directly—a move seen as significantly more escalatory. China remained Iran's primary trading partner in 2025, and Beijing previously stated it would “take all necessary measures to safeguard its own interests firmly.”

During the G20 finance gathering in North Carolina earlier this month, the EU expressed support for the renewed US sanctions campaign against Iran, noting the bloc's readiness to implement further measures. Meanwhile, the UAE had previously announced the suspension of its trade and financial transactions with Iran under the “Operation Economic Outcast” initiative, responding to regional security threats posed by Tehran.

“I think that we have seen some very forward-facing statements from the UAE,” Mr Bessent remarked during the Q&A session of his testimony, adding that a Treasury official recently visited the country for productive discussions with local financial system members. The Treasury Department did not immediately offer further details when contacted by The National.

These developments followed a Treasury Department announcement targeting Russia's second-largest financial institution, VTB Bank, over the transfer of billions in Iranian assets. VTB had previously faced heavy sanctions following the 2022 Russian invasion of Ukraine. Additionally, the US Treasury has penalized a Turkish investment bank and its subsidiaries, along with a Banque Misr branch located in the UAE. In response, the UAE Central Bank stated on August 30 that it would execute a “special and urgent examination” of the branch operations.