By Eric Vandenbroeck and co-workers

President Donald Trump was meant to meet with his Chinese counterpart, Xi Jinping, at the end of March to stabilize the world’s most consequential bilateral relationship. But as the Middle East burned, energy prices skyrocketed, and the bodies of U.S. service members returned to the United States, Trump concluded that a trip to Beijing for a high-profile meeting would not be a good look. On March 16, he postponed the trip until May. The fact that he failed to foresee this collision of crises when he originally announced the summit - just eight days before he launched his war of choice on Iran - exposes the administration’s inability to manage multiple global challenges, even those of its own making.

The Trump administration has bandied about many goals for its war in Iran, including regime change and destroying the country’s nuclear program. Some Trump boosters have even argued that bombing Iran will help the United States in its competition with China. Matt Pottinger, who served as deputy national security adviser in Trump’s first term, contended in an interview with Bloomberg that the Iran war challenges China’s “axis of chaos,” which also includes Iran, North Korea, and Russia. The Republican senator and Trump loyalist Lindsey Graham, for his part, said in a March interview with Fox News that U.S. military interventions in oil-rich Iran and Venezuela, which are friendly to Beijing, were “China’s nightmare.”

The reality, however, is far different. Despite relying on energy imports that pass through the Strait of Hormuz, China has insulated itself against a near-term disruption in energy supplies. With the U.S. military bogged down in the Middle East, China has a freer hand in East Asia. As Trump behaves erratically and violates international law, China can present itself as a responsible peacemaker. Even if the U.S.-Iranian cease-fire that was agreed to on April 7 holds, the United States has injured its reputation by acting unpredictably, betraying its allies, and starting a war that has done serious damage to the global economy.

When the U.S.-Chinese summit eventually takes place, Xi will enter the talks with significant leverage. While the United States squandered precious military and political capital in the Middle East, China was preparing to get what it wants at the negotiating table. A flailing Trump could trade valuable U.S. assets in exchange for short-term commercial wins - and a lopsided deal with the United States’ biggest rival could undermine U.S. security and prosperity for decades.

U.S. President Donald Trump and Chinese President Xi Jinping in Busan, South Korea, October 2025

President Donald Trump was meant to meet with his Chinese counterpart, Xi Jinping, at the end of March to stabilize the world’s most consequential bilateral relationship. But as the Middle East burned, energy prices skyrocketed, and the bodies of U.S. service members returned to the United States, Trump reached the conclusion that a trip to Beijing for a high-profile meeting would not be a good look. On March 16, he postponed the trip until May. The fact that he failed to foresee this collision of crises when he originally announced the summit - just eight days before he launched his war of choice on Iran - exposes the administration’s inability to manage multiple global challenges, even those of its own making.

The Trump administration has bandied about a number of goals for its war in Iran, including regime change and destroying the country’s nuclear program. Some Trump boosters have even argued that bombing Iran will help the United States in its competition with China. Matt Pottinger, who served as deputy national security adviser in Trump’s first term, contended in an interview with Bloomberg that the Iran war challenges China’s “axis of chaos,” which also includes Iran, North Korea, and Russia. The Republican senator and Trump loyalist Lindsey Graham, for his part, said in a March interview with Fox News that U.S. military interventions in oil-rich Iran and Venezuela, which are friendly to Beijing, were “China’s nightmare.”

The reality, however, is far different. Despite relying on energy imports that pass through the Strait of Hormuz, China has insulated itself against a near-term disruption in energy supplies. With the U.S. military bogged down in the Middle East, China has a freer hand in East Asia. As Trump behaves erratically and violates international law, China can present itself as a responsible peacemaker. Even if the U.S.-Iranian cease-fire that was agreed to on April 7 holds, the United States has injured its reputation by acting unpredictably, betraying its allies, and starting a war that has done serious damage to the global economy.

When the U.S.-Chinese summit eventually takes place, Xi will enter the talks with significant leverage. While the United States squandered precious military and political capital in the Middle East, China was preparing to get what it wanted at the negotiating table. A flailing Trump could trade valuable U.S. assets in exchange for short-term commercial wins - and a lopsided deal with the United States’ biggest rival could undermine U.S. security and prosperity for decades.

It is, at once, a time of great hope and great despair for anyone who wants U.S.-Iranian relations to improve. On the one hand, delegations from each country met in person last weekend for the first time in a decade, and they negotiated through the night in hopes of forging a lasting peace settlement. The leaders for each country’s team were not diplomats but powerful politicians - U.S. Vice President JD Vance and Mohammad Bagher Ghalibaf, speaker of the Iranian parliament - indicating just how seriously the countries are taking negotiations. But on the other hand, tensions between the two countries are extremely high as a result of the six-week-long U.S.-Israeli bombing campaign. And for all the fanfare, the most recent round of talks failed to produce a deal.

It isn’t hard to see why Tehran and Washington are struggling to reach an agreement despite all the energy they are investing in forging one. There is a proverbial “sea of blood” between the countries that makes compromise extremely challenging. This is largely Washington’s doing. Over the last year, the United States has gone to war against Iran not once but twice. It has killed Supreme Leader Ali Khamenei, dozens of top military commanders, and over a thousand civilians. It does not help that the United States and Iran have both stood by their maximalist positions.

But despite the current impasse in talks, the cease-fire between the countries remains in place. Discussions are set to continue, so a peace deal is still achievable. To get one, however, Tehran and Washington will need to rethink their approach to negotiations. Most obviously, the two governments will have to make compromises on the Iranian nuclear program and the future of the Strait of Hormuz. They will need to set up a more cooperative regional order. More broadly, however, Iran and the United States have to abandon the fantasy of completely vanquishing a longtime rival and realize they must respect each other’s interests. Both need to accept that the other is too powerful to be defeated. Continuing to pretend otherwise will just invite more crises and conflict, now and in the future.

 

Inconvenient Truths

By now, the issues preventing a U.S.-Iranian peace deal are familiar. Washington wants Tehran to relinquish its enriched uranium, stop developing any more nuclear material, and cede control of the Strait of Hormuz. The Islamic Republic refuses to agree to any of these measures. For Iran, the right to enrich is tied up in questions of sovereignty, deterrence, and national pride. Tehran finds it deeply humiliating to be the only Nuclear Nonproliferation Treaty member that is facing demands to halt enrichment. The strait, meanwhile, is an essential strategic asset. It helps facilitate Iranian commerce and, as this war has shown, affords it geopolitical leverage.

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Formularende

But the negotiations failed for reasons that go beyond specific disagreements. They also failed because of differing perceptions of power. Iran entered the talks with a sense of resilience. It had, after all, withstood a combined U.S.-Israeli assault that Trump claimed would end in regime failure. The United States, however, also arrived at the table convinced it had the upper hand. Although frustrated by Tehran’s persistence, American leaders thought they had done incalculable damage to the Iranian military and security apparatus. They therefore assumed that sustained, maximum coercion could force Iran to make concessions. Both sets of perceptions are, at best, very flawed. But they have nonetheless made it extremely hard to break the deadlock.

The fact that the two parties are talking, however, suggests there is a path forward. And it must begin with preserving the cease-fire, because a return to hostilities might foreclose long-term negotiations. A cease-fire also helps generate at least some goodwill between the two countries: for example, it could allow for tangible confidence-building measures, such as humanitarian aid, partial sanctions relief, or technical maritime arrangements. For example, Tehran and Washington might set up a joint maritime corridor to make sure that food, medicine, and fuel reach Iranian shores. Tehran could also release imprisoned foreign nationals and let Red Cross workers into the country if Washington suspends certain sanctions for a temporary period.

An increase in trust would in turn, help Iran and the United States forge a permanent agreement - provided they can take a different approach to negotiations. Rather than simply haggling over their demands to no avail, Tehran and Washington should begin the next diplomatic process by deciding on a shared end goal: stable, non-adversarial relations and, eventually, full normalization of ties. Iranian and American officials should, in other words, set out to create a dynamic in which they can resolve their disputes through direct diplomacy and cooperate on issues of common interest. This understanding will make compromise easier by clarifying for each party which red lines matter and which don’t.

Each of the two sides will also need to abandon the assumption that it holds the advantage. Although both American and Iranian officials have made sweeping declarations of victory in the last two weeks, the truth is that both Washington and Tehran hold powerful cards they can play should conflict resume. Iran is a large, mountainous country that is home to 90 million people who share thousands of years of history. It can endure even a sustained U.S. effort at regime change. But the United States maintains the world’s most powerful and well-funded military, and it can continue to apply harsh sanctions and other kinds of pressure. It can thus keep targeting Iran’s leadership and inflicting great harm on civilians.

Once they accept these facts, Tehran and Washington might finally be willing to compromise on their core objectives. That begins with the central sticking point: Iran’s nuclear program. There are several viable deals the two parties could strike, provided that the United States drops its demand that Tehran give up all enrichment. Washington, for example, could recognize Iran’s right to enrich under the Nuclear Nonproliferation Treaty in exchange for a binding pledge by Tehran not to exercise that right for a specified period, as a way of increasing trust between the parties. The countries each seem open to such an arrangement. According to reporting by The Washington Post and The New York Times, the United States has sought a 20-year suspension on enrichment, while Iran has offered five years. The two might meet in the middle, perhaps at ten years. Iran would simultaneously promise that when it does resume enrichment, it will not exceed a level of 3.67 percent - far below the threshold needed for nuclear weapons, but high enough to help the country meet its energy needs. Tehran would also need to accept intrusive monitoring by the International Atomic Energy Agency. It would retain the existing 450 kilograms of 60 percent enriched uranium, but commit to diluting the entire stockpile to 3.67 percent, sealing it, and keeping it inside Iran under continuous IAEA custody and monitoring.

Tehran might also agree to establish a regional enrichment consortium with neighboring Arab states. This arrangement, modeled on the European Gaseous Diffusion Uranium Enrichment Consortium, or Eurodif, would distribute and jointly manage sensitive fuel-cycle activities. It would therefore address proliferation concerns not only about Iran but also about neighboring countries. (Saudi Arabia, for example, is demanding enrichment facilities.) Egypt, Turkey, and even the United States and other permanent members of the United Nations Security Council could join, too, providing even stronger guarantees that the Middle East will forever be a region free of nuclear weapons. These steps could be anchored in a parallel nuclear agreement between Washington and Tehran in which Iran would reaffirm its status as a non-nuclear weapons state and the United States would formally support Tehran’s right to peaceful nuclear technology.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf meeting with Pakistani Prime Minister Shehbaz Sharif in Islamabad, Pakistan, April 2026

 

Peace By Piece

Resolving nuclear tensions will get Iran and the United States most of the way to an agreement. But the countries will also need to sort out other disputes, including over the Strait of Hormuz. It is thus unfortunate that Washington has decided to blockade the waterway and, indeed, all maritime traffic to and from Iran’s ocean ports. This decision will not isolate the Islamic Republic, which can reroute trade through the Caspian Sea and overland networks via neighboring countries. But it will deepen mistrust and reinforce hard-line positions. In fact, the move risks widening the conflict. It might, for example, lead the Iranian-backed Houthi militia in Yemen to disrupt shipping through the Bab el Mandeb Strait, which would snarl even more global commerce. This situation could inflame U.S. tensions with China and India, both major importers of Iranian oil. The blockade could also push Iran to again close the Strait of Hormuz outright, sending energy prices skyward.

To avoid such a disaster, both Iran and the United States must commit to freedom of navigation in the Strait of Hormuz, in line with the United Nations’ 1982 Convention on the Law of the Sea. But resolving tensions over this waterway will likely require the involvement of all of the Persian Gulf’s eight countries. To establish a framework for collective security and cooperation in the Persian Gulf, the United Nations Security Council could even mandate that the UN secretary-general convene a permanent forum - including a maritime security task force - where these states and the five permanent members of the Security Council could hash out disputes. The war with Iran may be thought of as a bilateral affair, but it very much involves Arab countries.

It also involves Israel, and fostering peace between Iran and that country will prove far more difficult. But the United States has enough leverage over Israel to reign in its destabilizing activity. If Iran and the United States commit to respecting each other’s interests and ending proxy confrontations, U.S. mediation could play a decisive role in de-escalating tensions between Israel and Iran by helping both sides move away from mutual security, military, and existential threats and toward agreed rules of restraint and conflict management.

 

Unforced Error

Trump’s war of choice in Iran has come at the expense of the United States’ security umbrella in the Indo-Pacific, presenting an opportunity for Beijing. The United States has moved materiel from East Asia to the Middle East, including the USS Abraham Lincoln, one of only five U.S. aircraft carriers on active duty globally, and powerful missile defense systems. Many of these batteries were taken from South Korea, which for years endured aggressive Chinese economic pressure in retaliation for hosting U.S. antimissile systems that were supposed to permanently shield the country from an attack by China’s partner, North Korea. The United States’ repossession of those assets over Seoul’s objections showed how little Washington cared about its ally’s sacrifices - and its willingness to divert critical resources sent a message to all U.S. partners in Asia that the region is not a priority. Even if the United States moves key assets back to the Indo-Pacific as soon as the war ends, it has established a precedent that they can be withdrawn at any time, and it will take years for the U.S. military to replace the munitions it has deployed against Iran. The questions that have been raised about American staying power have already weakened deterrence against both North Korea and China.

The war in Iran has also given China a live demonstration of the United States’ military capabilities, which Beijing can now use to hone and adapt its own tactics. By simply observing, the Chinese military has gained a trove of information about U.S. weaponry, decision-making cycles, and use of artificial intelligence that it might put to use in future conflicts in Taiwan or elsewhere. For example, China has likely learned a lot about the way the United States intercepts cruise and ballistic missiles. In a conflict with the United States, China might adjust strike density to overwhelm U.S. defenses or modify sequencing of attacks to exploit reloading windows.

China has benefited from the war in less tangible ways, too. For weeks, Iran has effectively shut the Strait of Hormuz, causing the biggest disruption to oil exports in history and wreaking havoc on the global economy. Trump, meanwhile, called on China and other countries to send warships to keep the strait “open and safe” - effectively inviting Beijing to play the very role it seeks, that of a responsible provider of global stability, while the United States shows itself incapable of managing the fallout of its own unilateral decision to attack Iran.

To capitalize on the chaos, Beijing will likely position itself as a mediator, a muscle it has previously exercised during disputes between Iran and Saudi Arabia and between Cambodia and Thailand. Indeed, according to the New York Times, China helped persuade Iran to accept the April 7 cease-fire. And while the United States is distracted, China will race toward its national goals - reducing reliance on the rest of the world for its energy and technology needs to increase its bargaining power, especially over the United States.

 

Insulate to Dominate

To be sure, the war in Iran has caused some problems for China. Its manufacturing sector has been squeezed by higher energy prices, and Chinese farmers have had to deal with higher fertilizer prices during the spring planting season (much of the world’s urea, an ingredient in fertilizer, is shipped through the Strait of Hormuz.)

But China’s economy is resilient and its energy supplies are relatively secure. Beijing has worked for years to insulate itself from price shocks and volatility in global oil markets by developing sources of renewable energy and a massive overcapacity in coal power. Since 2008, renewables have more than doubled as a share of China’s energy mix and now provide more than one-third of the country’s power. In fact, China accounts for a third of the world’s total wind and solar capacity. Chinese manufacturers of batteries and electric vehicles have seen their market valuations surge since the beginning of the war, which investors view as a catalyst for a broader embrace of green energy. Because China already dominates manufacturing of batteries, solar panels, wind turbines, and electric cars, the war will likely increase global adoption of the country’s technology as a cushion against current and future energy shocks.

Although China cannot rival the United States in terms of oil production capacity, its massive stockpiles, now estimated at 1.4 billion barrels, dwarf the depleted U.S. Strategic Petroleum Reserve. For China, this can serve as a backfill for over six months of total disruption in the Strait of Hormuz. And even if China’s energy supplies were to be strained further, the country has other options, such as purchasing more Russian oil. According to the Financial Times, several ships have paid Iran tolls in Chinese yuan to pass through the strait - a success for Beijing, which has been trying to boost the international standing of its currency. A short-term disruption to the Strait of Hormuz, then, is far from a nightmare scenario for Beijing.

In the United States, increases in U.S. oil production can help protect the country against the worst consequences of a global energy shortage, too, but American consumers are still exposed to disruptions in the international oil market. Because of the global nature of the oil marketplace, a reduction in the supply of oil anywhere in the world means an increase in prices everywhere, including in the United States. And, unlike the Chinese leadership, the Trump administration has sought to sabotage the domestic move toward alternative energy sources, leaving American households at the mercy of price fluctuations.

For now, American consumers appear to have been more affected by increases in transportation costs and overall inflation than their Chinese counterparts. Because China has been experiencing a damaging cycle of deflation, higher energy prices could even help by pushing up the price of consumer goods.

 

Eye On The Ball?

The U.S. military intervention in Iran, like the one in Venezuela, is not going to help the United States in its competition with China by isolating Beijing from these two purported partners. China is the ultimate fair-weather friend. It is highly transactional and will not sacrifice its core interests to save Tehran or Caracas. If the goal is to weaken Beijing, U.S. operations in Iran and Venezuela consequently yield a negligible if not zero return on investment, serving only to deplete U.S. resources, tank the United States’ reputation, and raise fuel prices.

If anything, Trump’s impulsive militarism has weakened the United States’ position relative to China’s. It has triggered Iranian attacks on Gulf countries, driving a wedge between Washington and some of its closest partners in the region. These governments are unlikely to abandon the United States entirely in the years to come. But, as U.S. reliability erodes, Gulf countries will increasingly play the superpowers off each other. The United Arab Emirates, for instance, has already increased its cooperation with the Chinese military since Trump’s first term, even as it hosts American bases.

China does not need to replace the United States as a security provider to benefit from Washington’s deteriorating relationship with Gulf capitals. It is enough for Beijing to simply be a predictable partner. Once the smoke clears in Iran and Gulf countries, Beijing will probably step in with reconstruction contracts for damaged ports or energy facilities and long-term investments in infrastructure. The result is likely to be a more transactional Middle East that is less beholden to the United States and more willing to work with China. Put simply, Beijing may be able to pull off what the United States has long sought: significant influence in the Middle East at a manageable cost.

 

A Port In The Storm

Despite Trump’s “America first” branding, the impulsive war with Iran has been a master class in putting America last. Because of its hubris, United States finds itself in another quagmire without an exit strategy. The Trump administration traded national security for a short-term display of military muscle, and it is now asking the American public to pay the bill. The real winner of this avoidable conflict won’t be Washington or Tehran; it will be Beijing.

China prizes stability and does not want to take over every role the United States has filled for decades, such as serving as the Middle East’s policeman. Still, China stands to gain more than it loses from this war. As the United States becomes distracted, alienates its allies, and creates gaps in global leadership, Beijing can improve its relative standing simply by remaining the more predictable actor in an increasingly unpredictable world.

Ahead of the rescheduled Trump-Xi summit, China is likely laying a trap for the Trump administration. According to Bloomberg, Xi may dangle a commitment to buy 500 Boeing airplanes as a high-profile economic win for Trump, who is eager for anything he can spin as a victory. In exchange, Xi could draw an important concession from Trump, such as a loosening of restrictions on the export of advanced American technologies, including AI chips and jet turbines. Such a deal would be catastrophic for the United States. China would gain the tools to be more self-reliant in the long term; the United States would make a quick buck. China could even renege on the airplane order, which would take years to complete.

As the United States speeds up its own decline, China is accelerating its technological self-sufficiency, building its military strength, and upgrading its industrial policy. Its ultimate goal is so-called national rejuvenation. When Trump eventually lands in Beijing, he will represent the United States from a position of self-inflicted weakness. He will face a formidable counterpart in Xi, who has spent years preparing for this exact moment of U.S. overreach. It is time for the United States to stop fighting the wars China wants it to fight and instead train its focus back on its greatest rival: China.

 

 

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