Trump is traveling to Beijing in the hope of extinguishing fires that he himself has lit. At the negotiating table, Xi Jinping holds the better cards.
From 13 to 15 May, Donald Trump will pay a state visit to President Xi Jinping in Beijing. Originally, the intention was to discuss the trade conflict between the two countries, but the agenda is now dominated by the war in West Asia – often erroneously called the Middle East. A great deal is at stake, but it remains to be seen whether this summit will yield any results.
Cold War
Relations between the two great powers are far from smooth. After the fall of the Berlin Wall and the dismantling of the Soviet Union, the US positioned itself as the undisputed leader of world politics. In 1992, one year after the Soviet collapse, the Pentagon wrote:
“Our first objective is to prevent the re-emergence of a new rival. We must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role”.
Thirty years later, China has become the primary “potential competitor” that must be contained. Within the context of the 2019 budget discussions, the US Congress declared that “long-term strategic competition with China is a principal priority for the United States.” This concerns an overarching strategy being waged on various fronts.
Washington is attempting to stifle China’s technological rise by blocking the export of advanced chips and other high-grade technology. The Chinese economy is being hampered by trade tariffs and investment controls. Additionally, the US is trying to economically isolate China from neighboring countries – such as Japan, South Korea, Vietnam, and India – by concluding trade agreements and forming a joint bloc.
The military strategy toward China follows two tracks: an arms race and the encirclement of the country. Per capita, the US spends 13 times as much on armaments as China, and Trump has announced that he intends to increase the budget by as much as half next year.
The United States maintains approximately 400 military bases around China. There are also plans to station a medium-range missile system in the Pacific Ocean, bringing China within direct range.
Beijing is responding to this new Cold War with domestic investment and foreign trade. Through its “new productive forces” campaign, China is focusing heavily on advanced industries such as electric vehicles, batteries, and biotechnology. With a massive annual investment of $1,600 billion, China aims to break its dependence on Western technology and protect itself against American aggression.
Regarding foreign policy, there is the Belt and Road Initiative, or the “New Silk Road.” This represents hundreds of investments, loans, trade agreements, and dozens of Special Economic Zones worth $900 billion. These initiatives span 72 countries, reaching a total population of about 5 billion people, or 65 percent of the global population.
Weak Position
When Donald Trump heads to Beijing, he does not do so from a position of strength. His erratic foreign policy and the escalating conflict with Iran have seriously weakened the United States. Last year’s attempt to impose trade tariffs of 145 percent on China was immediately abandoned when Beijing blocked the export of rare earth metals.
By initiating a war against Iran, Washington hoped to strike at China by pressuring its oil supply. However, that plan has failed. Furthermore, the instability in the Middle East seems to be playing directly into Beijing’s hands. While the US gets bogged down in the Strait of Hormuz, sowing unrest in financial markets, China presents itself as a stable and reliable factor in world trade.
Rising energy prices caused by the war have acted as a boost for green energy. Because Chinese companies control 70 percent of global green technology production, China is seeing its exports of solar panels and batteries rise sharply. Additionally, Beijing is acting as a “supplier of last resort” for fuels and fertilizer, increasing its diplomatic prestige across the Global South.
US attempts to obstruct the Chinese tech industry have also failed. Instead, they have stimulated China to innovate faster and reduce its dependence on foreign entities. The technological lead of the US is visibly shrinking. Chinese AI developments remain hot on the heels of the US, while American companies like Nvidia lobby for more flexible rules out of fear of losing their market share.
At home, Trump has his back against the wall. The blockade of the Strait of Hormuz is driving up fuel prices and fueling inflation. Consequently, his popularity has sunk to a low point, with 62 percent of Americans disapproving of his policies. As a result, prospects for the midterm elections in November are particularly bleak.
By unleashing a tariff war and a unilateral, unnecessary war against Iran, Trump has alienated allies and created space for Xi Jinping to forge a new, multilateral world order.
Financially, the war further undermines US hegemony. Countries are increasingly using the Chinese renminbi to circumvent the risks of the dollar and American sanctions. Iran now allows ships to navigate the Strait of Hormuz in exchange for payment in Chinese currency or cryptocurrencies.
This situation grants Xi Jinping significant negotiating leverage. In this new reality, Washington no longer dictates the terms; it must even ask President Xi for help in keeping international waterways open. In China, the conviction prevails that US power is in irreversible decline. Donald Trump is viewed as both a symptom of this decline and its accelerator.
Topics of Discussion
The upcoming meeting between Trump and Xi will revolve around three primary themes: the war in Iran, economic relations, and the situation regarding Taiwan. Throughout, the deadlock over the Strait of Hormuz will cast a shadow over all discussions.
The blockade of the Strait of Hormuz threatens the vital oil supply that fuels Chinese industry, but Beijing has built up large reserves lasting approximately four months. Trump will strongly urge Xi to use his influence in Tehran to secure a ceasefire and reopen the Strait.
However, the relationship between China and Iran is complex, as China also seeks to maintain good relations with the Gulf states. Therefore, Beijing cannot simply dictate Tehran’s course, even if it wished to do so.
Economically, Trump is looking for tangible successes ahead of the American midterm elections. Major deals, such as the purchase of Boeing aircraft and agricultural products, are on the table. In exchange, China demands lower import tariffs and less stringent export controls on high-grade technology.
The chance of a real breakthrough remains slim. An extension of the fragile trade truce seems more likely. China hopes for greater predictability in trade agreements.
On the Taiwan issue, the outcome is uncertain. Beijing is pressing for a firmer American rejection of Taiwanese independence – asking Washington to actively oppose independence rather than simply not supporting it. It is possible, though not certain, that Trump will concede to this to secure deals, despite resistance in Washington and Taipei.
In summary: for Xi, the stability of exports and a stricter US stance on Taiwan are central; Trump, meanwhile, strives for deals to please his base and a swift unblocking of the Strait of Hormuz.
Hegemonic Fear
The summit between Trump and Xi takes place at a moment when the balance of power is shifting. Washington arrives in Beijing with urgent needs: an exit strategy for the Iran crisis, lower oil prices, calm in the financial markets, and a political victory for the midterms. Xi, by contrast, can position himself as the leader of a country that, despite pressure on its oil supply and exports, appears better prepared for a prolonged confrontation.
Will China use its influence over Iran to resolve the American crisis in West Asia, and what price will Trump have to pay in terms of trade and the status of Taiwan?
A major breakthrough is unlikely. The most probable result is a temporary cooling-off: agreements to prevent the trade war from escalating further, diplomatic pressure on Iran, and vague formulations regarding Taiwan.
Meanwhile, the underlying contradiction between the two countries remains intact. The United States seeks to maintain its global dominance, while China strives for a multilateral world order. This summit will not change that.
What China fears most in the long term is the “hegemonic fear” of the US: a declining power that, out of desperation, lashes out – a phenomenon known since Greek Antiquity as “Thucydides’ Trap.” US actions in Iran and Venezuela, along with the oil blockade against Cuba, prove to Beijing that power now takes precedence over law. This makes the world an unpredictable and dangerous place.
Source: Global Research
Author: Marc Vandepitte
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