In Focus delivers deeper coverage of the political, cultural, and ideological issues shaping America. Published daily by senior writers and experts, these in-depth pieces go beyond the headlines to give readers the full picture. You can find our full list of In Focus pieces here.
President Donald Trump’s military actions against Venezuela and Iran are hurting America’s primary geostrategic adversary, China. It is seeing allies removed or degraded, it is getting cut off from nations that supply nearly 17% of its imported oil at deeply subsidized prices, and it is even purportedly watching its military equipment be outclassed by American men and material.
These are bad developments for Chinese President Xi Jinping’s efforts to make China America’s global equal. Which is why we should expect him to try to upset the American apple cart in the coming days if it looks like the Iranian regime is on the cusp of collapsing.
China won’t militarily intervene in the conflict. It’s still unable to come anywhere near the United States’s ability to project meaningful power that far from its borders. It could theoretically send a carrier group to the region, but bereft of air and missile support from nearby land bases, the mighty fleet would be sitting ducks for America’s armada.
That doesn’t mean Xi doesn’t have cards to play.
The lowest-risk card involves mobilizing public opinion in the global South. China could attempt to push a resolution in the United Nations calling for a ceasefire, and perhaps even alleging that the attack violates international law. Such a proposal would not lead to U.N. intervention — America’s Security Council veto would see to that. But it could give many nations an easy way to protest the war and complicate American efforts to subsequently curry influence in those nations.
Xi’s next option is to postpone his scheduled April summit with Trump. Doing that would send a message that China is not open to easing economic tensions with the U.S. while the war continues. That carries some risk, as the volatile Trump could react by reimplementing high tariffs on China, but doing that could also give Xi the excuse to take countermeasures such as cutting off the U.S. from crucial rare earth exports.
Alternatively, Xi could use planned meetings with the two countries’ trade representatives in mid-March to quietly indicate that American economic desires can be accommodated more easily if the war comes to an end acceptable to Beijing. Trump clearly wants China to increase purchases of U.S. goods, such as soybeans, and to ensure U.S. access to rare earths. Xi therefore has leverage that he could deftly deploy to help salvage China’s position in Iran.
China could also accelerate its sales of U.S. Treasurys. It has already been quietly selling American bonds, decreasing its holdings from $1.3 trillion in 2013 to under $700 billion late last year. Dramatically increasing its sale of Treasurys would likely increase U.S. yields, thereby increasing American interest payments on its massive government debt and increasing interest rates throughout the economy. China’s export-led economy could suffer too as the dollar’s value drops, but that might be a price it is willing to pay to cause Trump trouble at home as the midterm elections approach.
That risk-reward trade-off is inherent to anything China might do. The more it feels harmed by Trump’s Iranian escapade, the more it might feel it necessary to incur some pain to inflict some on America in order to influence its policies.
American policymakers, therefore, need to assess how severely China’s interests are being damaged and estimate what price Xi might want to pay to minimize its losses or recover some lost ground.
They should keep in mind something that happened over 80 years ago. President Franklin Roosevelt was concerned about Imperial Japan’s war with China and conquest of French Indochina after the Fall of France. As diplomacy failed to alleviate Roosevelt’s concerns, in the summer of 1941, he froze Japanese assets in the U.S. and instituted a total embargo of oil sales to the island nation. That latter act severely harmed Japan, as it relied almost entirely on American oil to fuel its industry and military.
Japan was thus faced with two choices: retreat from its core objective to dominate China and the Southeast Pacific region, or war with the U.S. It chose war despite the risks. Pearl Harbor was the result.
China’s core strategic interests are not being so directly threatened, so it is highly unlikely to risk war with America over the diminution of its overseas influence. Reports that America might run low on key weapons components needed to defend Taiwan from Chinese invasion, however, might lead Xi to take the ultimate risk of all: move on Taiwan while America is committed elsewhere.
MARCO’S MOMENT: IT’S TIME TO TAKE A RUBIO RUN SERIOUSLY
This makes recent reports that the U.S. is considering moving more of its Terminal High Altitude Area Defense and Patriot missile systems from South Korea to the Middle East extremely concerning. The more Pacific-area equipment that is sent to fight Iran, the less that is available to fight China should Xi decide to gamble. That fact could make Xi, 72, more likely to take the ultimate risk to obtain what he has long coveted: the conquest of Taiwan.
China may end up doing nothing more than what it has done thus far: issue strongly worded but impotent statements decrying America’s war. The fact that it is losing face and allies, though, means that it may decide deeds carry more weight than words despite the risks. Policymakers should understand the options China could deploy to protect its interest and their potential costs to America as Operation Epic Fury moves forward.
