Iranian and Chinese security officials signed a military-cooperation agreement this week to establish a joint commission to boost defense ties. Since the 1979 Islamic revolution and the subsequent severing of U.S. military assistance, Tehran has relied on Chinese arms to supplement its defense industry. This week’s agreement, however, will significantly bolster ties that for decades existed mostly behind closed doors, and underscore the countries’ shared interest in challenging U.S. supremacy in their respective regions.

Iran’s close defense ties with Beijing started in the 1980s, when the Islamic Republic was engulfed in a bloody war with Iraq and desperate for arms. China, seeking secure energy sources and a bulwark against America, was eager to provide advanced weapons to Tehran. Among them were Silkworm anti-ship missiles, which targeted Kuwaiti oil tankers during that decade’s Tanker War.

China continued to supply arms to Tehran throughout the 1990s as Iran rebuilt its military after the war. These included newer anti-ship missiles such as the C-802 (which Tehran has since provided to its regional proxies) and the C-704. China has also equipped Iran with surface-to-air missiles, fighters, fast attack craft, and ballistic missile equipment. Key among these technologies are guidance systems for Iran’s missiles, which according to the director of national intelligence is the largest arsenal in the Middle East. China has even served as a transit point for North Korean missile technology en route to Iran.

Reports on the memorandum have thus far been vague, revealing only a stated interest in combating terrorism and a promise to hold joint military drills. Still, the increasingly public nature of their cooperation should not come as a surprise. Both Iran and China feel threatened by U.S. air and naval superiority and hope to supplant Washington as the preeminent military power of their respective regions. Moreover, Iran is now eyeing potential purchases for when a UN-mandated arms ban expires in 2020, or possibly earlier, per last summer’s nuclear deal.

Admittedly, China is not the only country positioning itself to cash in on Iranian arms purchases. Over the last two years, Russia has stepped up its relationship with Tehran, delivering the S-300 surface-to-air missile system this year, and is now reportedly negotiating a $10-billion arms deal involving T-90 tanks.

There is one military capacity Tehran desperately needs to deter a U.S. attack and which Beijing is best suited to provide: robust maritime Anti-Access/Area-Denial (A2/AD) capabilities. Over the past decade, China has dramatically increased its own A2/AD capacity in the South China Sea and its littorals, aiming to diminish U.S. room to maneuver in the western Pacific. Its tools include long-range anti-ship ballistic and cruise missiles, and layered air defense systems that force an adversary’s air and naval forces to operate from a distance. For Iran, these would allow it to control the strategic Strait of Hormuz while limiting an enemy’s ability to strike deep within its territory. China and Iran even began joint naval drills in 2014.

In an era when U.S. military resources are already strained globally, agreements like this between Iran and China make it harder for Washington to defend its partners and deter aggression around the world. As a new administration prepares to take office, U.S. policymakers must prepare for the likelihood that an Iran no longer under arms embargo will capitalize on its long-standing partnership with China.

Patrick Megahan is a research analyst focusing on military affairs at the Foundation for Defense of Democracies, where Behnam Ben Taleblu is a Senior Iran Analyst.