Trump CALLED in China and several other countries over the weekend to join the proposed naval coalition to ensure freedom of navigation through the Strait of Hormuz amid the ongoing war in Iran.
Then he told him Financial Times the next day that “I think China should also help because China gets 90% of its oil from the Straits (sic)…We would like to know before (my trip to China at the end of the month). It’s (two weeks is) a long time. We might be late.” This significantly increases its requirements.
If China does not comply and Trump delays his trip, the fragile Sino-US trade truce could fall apart, exacerbating the global economic uncertainty caused by the oil crisis. On the other hand, compliance would lend legitimacy to the coalition proposed by that navy and would likely be seen by Iran as hostile.
Iran has already clarified that the strait is closed only to unfriendly countries – a category that currently does not include China – and a proposal was also is said to have sailed for China to start paying for Iranian oil in yuan.
An appreciated one 13.4% of the oil China imported by sea last year came from Iran, while the Gulf Kingdoms (excluding Oman, whose exports derive from the Arabian Sea) and Iraq combined CONTRIBUTORS about 35%, roughly 48.4%, or nearly half of China’s annual seaborne oil imports through the strait.
China also has strategic oil reserves evaluated to 1.3 billion barrels, enough for three to four months, and is making rapid progress on implementation its green energy agenda.
However, these data confirm that China is economically dependent on the resumption of regular cross-strait oil imports, a dependency it is. ANALYSIS argues that it can arm the US through control of Iran’s resources and pressure on the Gulf kingdoms to force China into a unilateral trade deal.
The goal would be to disrupt China’s superpower trajectory and then institutionalize a minor relationship with the US. Perpetuating Iran’s war and the seizure of Iranian ships carrying oil to China can advance this agenda as well.
If China bows to the US by legitimizing the proposed Hormuz naval coalition and pledging to sign a side trade deal during his visit to Beijing, Trump could then de-escalate the conflict and restore the reliability of China’s regional oil imports.
However, if Chinese leader Xi Jinping opposes the request, then Trump could perpetuate the conflict – by extending the Gulf kingdoms’ drastically reduced oil exports to China, seizing Iranian ships carrying oil to China, delaying his trip and then intensifying their trade war.
The US still is China’s largest trading partner despite China’s trade diversification since the trade war of Trump’s first term, and Washington still has great economic and financial influence over many of China’s other trading partners.
A new Sino-US trade war, along with drastically reduced oil imports, could hit China hard. In this scenario, Trump can too to reach an agreement first with Russian leader Vladimir Putin, further deteriorating China’s negotiating position vis-à-vis the US and potentially leading to the more fair trade conditions required of it.
Trump’s demand that China join his naval coalition is designed to present Xi with a dilemma. Xi must either subdue China to the US – lending credibility to this coalition and accepting a one-sided trade deal formalizing a small partnership during Trump’s visit – or fight another trade war from a weaker position than before.
However, the Chinese are historically astute strategists and can still find a way out of this dilemma.
it ITEM was first published on Andrew Korybko’s Substack and is republished here with editing for clarity, fluency, and updates on Trump’s response on Friday. Become a subscriber to Andrew Korybko’s newsletter here.
