China has a welcome mat for Trump: it just rewrote the rules on U.S. sanctions

Key Points:

• On May 2, China’s Ministry of Commerce issued Announcement No. 21, directing all Chinese entities to neither recognize, enforce, nor comply with U.S. sanctions related to Iran, specifically targeting Executive Orders 13902 and 13846.
• This announcement activates China’s previously dormant Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation, marking the first time these rules have been invoked to counter U.S. sanctions.
• The move allows Chinese refiners targeted by U.S. sanctions to sue foreign banks, traders, insurers, or shippers in Chinese courts if they comply with U.S. sanctions, introducing a private right of action with significant implications.
• The timing of Announcement No. 21 was strategic, serving as a direct message to the U.S. ahead of the Beijing summit, signaling a shift in the global sanctions landscape where China and potentially BRICS nations will challenge U.S. sanctions enforcement.
• This development underscores a broader trend where sanctions often provoke countermeasures, and China’s action represents a significant escalation in the use of legal and economic tools to resist U.S. extraterritorial sanctions.