China US Trade Tension: Trade tension between America and China has now intensified. Taking a major decision, China’s Commerce Ministry has ordered its country’s companies not to follow American sanctions. This step has been taken specifically to protect those Chinese petrochemical companies, which the US has accused of being linked to Iran’s oil business.

China’s ‘blocking statute’ comes into force

China’s Commerce Ministry issued an official order on Saturday barring domestic companies from complying with US sanctions. This is the first time that China has used its “Blocking Statue”, a legal weapon designed to neutralize the effect of foreign laws in its country. This move is being seen as more of a legal retaliatory action than just a diplomatic protest.

These 5 big Chinese companies got protection

According to Chinese state media Xinhua, the companies granted protection from the order include:

• Hengli Petrochemical (Dalian) Refining Co., Ltd.
• Shandong Shouguang Looking Petrochemical Co., Ltd.
• Shandong Jincheng Petrochemical Group Co., Ltd.
• Hebei Xinhai Chemical Group Co., Ltd.
• Shandong Shengxing Chemical Co., Ltd.

America has put these companies in its “Specially Designated Nationals (SDN)” list, under which their assets can be frozen and transactions with them are banned.

China’s strong reaction to America’s action

A spokesman for China’s Commerce Ministry said that the US is continuously imposing sanctions on Chinese companies through its executive orders from 2025, alleging that they are involved in Iran’s oil business. Criticizing these steps, the spokesperson said that this is unfairly restricting normal business activities between Chinese companies and third countries. He called it a violation of international law and basic rules of global relations.

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Shandong’s ‘teapot’ refineries also under watch

Last month, the US Treasury Department’s Office of Foreign Assets Control (OFAC) warned financial institutions around the world that there were risks in transactions involving China’s small independent oil refineries, known as “teapot refineries”. Especially these refineries of Shandong province are playing a big role in the import and processing of Iranian crude oil by 2026. Under this action, these five refineries were also targeted.

Earlier also action was taken on Hengli Petrochemical

Earlier, OFAC had also imposed sanctions on Hengli Petrochemical (Dalian) Refinery. According to the US Treasury Department, this company has been purchasing crude oil and petroleum products from Iran on a large scale and is playing an important role in strengthening Iran’s oil economy.

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China’s decision to protect national interests

China’s Commerce Ministry said that this blocking order has been issued to protect our country from the scope of foreign laws, protect national sovereignty, security and development interests and safeguard the legitimate rights of Chinese companies. China reiterated that it strongly opposes such unilateral sanctions, which have not received UN approval and are not based on international law.