President Donald Trump will travel to China this week and is expected to raise Iran’s oil exports as a central topic with President Xi Jinping, according to US officials briefing the trip. China is by a wide margin the largest buyer of Iranian crude — direct and via the so-called “dark fleet” — and Washington’s view is that Beijing’s continued purchases during the Iran war are propping up Tehran’s war economy at a moment when the US naval blockade has driven food inflation in Iran to crisis levels. The Guardian’s pre-trip survey of the dossier — Tehran, Taiwan, trade — captures the structure of a summit in which the United States arrives wanting Chinese cooperation on Iran while having very little to offer that China has not already obtained, and at which Beijing arrives knowing exactly that.
The received wisdom
The standard policy-community framing of the trip is that Trump’s transactional instincts and his personal rapport with Xi from the first term give him a real chance of obtaining at least a face-saving Chinese reduction in Iranian oil purchases, in exchange for some combination of tariff relief, technology export concessions, and a quieter posture on Taiwan. On this account, the war in the Strait of Hormuz has created a window in which Beijing’s interests and Washington’s overlap — neither wants Persian Gulf oil shipments interrupted long enough to crash the world economy — and the summit can be the venue for converting that overlap into a deliverable. The further version of this reading, articulated by some of the same hands who managed the 2018-19 trade negotiations, is that Trump’s threat to escalate tariffs even after the trade court ruling against his global tariff policy gives him leverage on China specifically, because the Chinese system reads Supreme Court reversal probabilities differently from the Federal Circuit and may concede now rather than wait to litigate.
A different read
The premise underneath the policy-community framing — that the United States and China have parallel interests in stabilising the Persian Gulf — is half-true and obscures the more important fact, which is that the Iran war has been a strategic windfall for Beijing and the costs to Beijing of letting it continue are negligible. The Iranian regime is more dependent on Chinese custom than at any point since the revolution; the Chinese refinery network, particularly the independent “teapot” refineries on the Shandong coast, has been buying discounted Iranian crude at terms unavailable on the open market; the dollar-denominated price of Brent has risen enough to put fiscal pressure on the United States, the Gulf states, and European industrial bases simultaneously. None of those outcomes is bad for China. The notion that Xi will trade them away for tariff relief that the federal courts may grant him for free in six months is naive in a way that the first Trump administration’s veterans should recognise from their own experience.
The historical parallel that ought to interest right-of-centre Americans is the 1973-74 oil shock, in which Henry Kissinger discovered that the United States’ relationships with the Gulf producers and with the OPEC bargaining structure were both more brittle and more important than the strategic-studies literature of the period had grasped. The lesson Kissinger drew, and which informed American policy for the next thirty years, was that the United States needed simultaneous relationships with the producers, the consumers, and the chokepoint controllers, and that the absence of any one of those legs collapsed the others. The contemporary analogue is that the United States has reasonable relationships with the producers (the Saudi-Emirati axis), increasingly fragile relationships with the consumers (Europe and East Asia), and almost no relationship with the chokepoint controllers (Iran by territory, China by financing). Trump is going to Beijing to negotiate the leg of that triangle that has atrophied most. He will discover, as Kissinger did, that the leg cannot be rebuilt in a single trip and that the price of trying to rebuild it quickly is concessions that will look very expensive in retrospect.
The conservative version of this argument — and it is one that Niall Ferguson has made in different forms for a decade — is that the United States has been running a foreign policy whose ends exceed its means, and that the proliferation of simultaneous theatres (Ukraine, Israel-Lebanon, Iran, Taiwan) is now exposing the deficit. The trade court striking down the global tariff policy last week was a domestic-legal event with foreign-policy consequences: it removed one of the few unilateral instruments Trump had been using to shape Chinese behaviour, and it did so on the eve of a summit at which that instrument was supposed to provide leverage. The honest conclusion is that the Beijing trip is being undertaken from a weaker position than the public framing admits, and that the question is not what Trump can extract but what he can avoid conceding.
There is a further, more uncomfortable point. The Trump administration’s announcement that it had seized Venezuelan enriched uranium — described, perhaps revealingly, as a substitute for what could not be obtained from Iran — was treated as a victory in some American press. Read against the Beijing trip, it reads more like a tell. A great power that has to take its non-proliferation wins from Caracas because it cannot generate them from Tehran is not in a strong negotiating position with the country that controls Tehran’s economic lifeline. Trump’s instinct, on past form, will be to compensate for this with a public theatrical success — a handshake, a tariff pause, a communiqué on jet fuel cooperation or some other technical matter — that the Chinese system will permit because it costs them nothing. The actual file, Iranian oil, is harder to move than that.
What to watch
First, whether the joint statement after the summit names Iran at all — silence would be a Chinese win disguised as a deferral. Second, the volume on the Iranian “dark fleet” over the following month: a quiet reduction would be the deliverable; sustained or rising volumes would mean Xi gave nothing. Third, the trade court appeal timeline: if the Supreme Court reinstates the tariff power, the leverage Trump lacked at the summit returns afterward. Fourth, Taiwan: Beijing’s price for any concession on Iran will involve Taiwan-policy language, and the form of that language will tell us how much Trump conceded.
— J