What could China’s response to U.S. sanctions mean for Africa?

Africa is navigating the United States recent sanctions on China by strengthening economic ties with Beijing. On May 1, 2026, the continent welcomed a “zero-tariff policy” on commodities from 53 countries.

According to Bloomberg, Beijing has laid down the law for Chinese companies, ordering them to defy American sanctions for the first time, a step that threatens to put its banking sector in the crosshairs of competition between the world’s two largest economies. With this economic move, China has drawn a red line in the sand by wheeling out its “Blocking Rules,” ordering non-compliance with U.S. sanctions.

In response to this bold escalation of trade hostilities, China’s Ministry of Commerce (MOC) issued a formal blocking measure prohibiting domestic entities from complying with U.S. sanctions, several news agencies, including China’s news service Xinhua, reported.

“The move specifically protects five major Chinese petrochemical firms recently targeted by Washington for their alleged involvement in the Iranian oil trade,” reported ndtv.com, the digital platform for New Delhi Television.

The companies named include Hengli Petrochemical (Dalian) Refining Co., Ltd., Shandong Shouguang Luqing Petrochemical Co., Ltd., Shandong Jincheng Petrochemical Group Co., Ltd., Hebei Xinhai Chemical Group Co., Ltd., and Shandong Shengxing Chemical Co., Ltd.

In this unprecedented act that threatens to trap a vast banking sector in the crossfire as tension rises between the world’s largest economies, China has ordered its companies to ignore U.S. sanctions.

“Beijing has often railed against unilateral sanctions and pronounced them illegitimate, but it has also quietly allowed its largest companies to comply with them, in order to avoid blowback on its own economy and to preserve access to the U.S. financial system,” noted Bloomberg.com.

De-dollarization is a trend gaining momentum to reduce the world’s dependence—especially in the Global South—on the U.S. dollar, which has become the backbone of global trade and the dominant currency in global central bank reserves.

Proponents argue that de-dollarizing would free economies outside the U.S. from the risk of U.S. sanctions and give alternative tenders more sway and independence, Business Insider.com explained.

Africa and countries in the Global South need to decouple from the Western Bretton Woods imperialist model, economist Redge Nkosi, the Pretoria-based founder and executive director of First Source Money and Public Banking of South Africa, told Africa Watch. He is also a former member of South African President Nelson Mandela’s administration.

“They ought to be reformed, but reformation is unlikely because the powerful Global North nations benefit from the poverty of the Global South. Abusing its dominant position, the U.S. has done us a great favor,” he said.

The “favor,” explained Nkosi, is that the U.S. has “abused its dominant position by geopolitically weaponizing this position,” thus assuring the Global South, including Asia, Latin America, the Caribbean, and Africa, that their survival depends on decoupling from Europe and the U.S.

Today’s dominant reserve currency is the U.S. dollar and, to a lesser extent, the Euro. This means all invoicing of international trade is done mostly in U.S. dollars. According to Nkosi, foreign exchange is also done in U.S. dollars. The consequence is that the U.S. gains inordinate financial and geopolitical power. Since all reserves are in U.S. dollars, it gives America the ability to punish at will.

Any country that does not do U.S. bidding—like Russia, Iran, Afghanistan or Cuba—is sanctioned by confiscating the reserves in U.S. dollars or by blocking those countries from accessing the ability to transmit money globally.

These monetary transactions are conducted via the Society for Worldwide Interbank Financial Telecommunication, or SWIFT. SWIFT is a vast messaging network used by financial institutions to send and receive information, such as money transfers, quickly, accurately, and securely.

In 2023, Nkosi presented at the BRICS Summit in South Africa. “De-dollarization and the construction of a new global financial monetary architecture” was the substance of his talk.

“The Global South countries are sick and tired of the hegemony and the abuse of the hegemony led by the U.S. and Europe,” he said. “And we’re determined to ensure that institutions like the IMF (International Monetary Fund) and World Bank become as obsolete as they are destined to become.”

China’s response to U.S. sanctions—including zero-tariff policies for African goods (covering 53 nations through 2028), retaliatory tariffs on U.S. goods, and increased investments in tech—offers Africa a mix of new trade opportunities and potential economic risks. While enhanced access to China’s market helps boost African exports and income, heightened U.S.-China tensions can cause overall commodity price drops and currency volatility, explained Dr. Lauren Johnston, a Consultant Senior Researcher in SAIIA’s Foreign Policy Program, at SAIIA 90 (the 90th anniversary of the South African Institute of International Affairs). Dr. Johnston, who holds a PhD in economics from Peking University, wrote about her observation in an article published in The Conversation.

According to Dr. Johnston, “Substitute African products and potential exports will enjoy a price boost, and elevated Chinese support. China’s newly elevated interest in African development and market potential will bring major prospects. The question will be whether African countries are ready to grasp them, and to use that potential to foster an independent development path of their own.”

China’s challenge to U.S. sanctions comes right before the long-awaited meeting later in May between President Donald Trump and his counterpart Xi Jinping and signals a far more aggressive stance between the world’s largest economies.

Follow Jehron Muhammad @Africawatchfcn on X

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