China-Iran Barter Trade Revives Amid US Sanctions Evasion

China and Iran have developed a sophisticated barter trade system to circumvent U.S. sanctions imposed by President Donald Trump, enabling the exchange of Iranian oil and metal ores for Chinese goods and infrastructure projects. Chinese state-backed companies, including Sinosure and Chuxin, facilitate a complex financial mechanism supporting infrastructure development in Iran in return for crude oil shipments masked through indirect routes. Simultaneously, Chinese automotive giant Chery Automobile supplies semi-knocked-down cars to Iran, which are assembled locally and paid for with Iranian copper and zinc, routed via intermediary companies to avoid direct currency transactions and sanction violations. This barter system has evolved over several years, coinciding with tightened sanctions, and revives an old trade method that bypasses traditional cash payments, reflecting a modern adaptation to geopolitical restrictions. While these deals are significant, they represent a modest portion of China’s overall trade with Iran, yet signal a broader trend of barter trade resurgence among sanctioned countries. Criticism has arisen domestically in the U.S. regarding the effectiveness of sanctions, with some accusing the Trump administration of allowing side deals that undermine the sanctions' intended impact.