What Trumps Hormuz coalition call really means for China

Trumpcalledon China and several other countries over the weekend to join his proposed naval coalition for securing freedom of navigation through the Strait of Hormuz amid the ongoingIran war.

He then told theFinancial Timesthe following day that “I think China should help too because China gets 90% of its oil from the Straits [sic]…We’d like to know before [my trip to China at month’s end]. It’s [two weeks is] a long time. We may delay.” This substantially raises the stakes of his demand.

If China doesn’t comply and Trump delays his trip, the fragile Sino-US trade truce could unravel, worsening the global economic uncertainty caused by the oil crisis. On the other hand, compliance would lend legitimacy to his proposed naval coalition and likely be seen by Iran as hostile.

Iranhas already clarifiedthat the strait is closed only to unfriendly countries – a category that presently does not include China – and a proposal was alsoreportedly floatedfor China to begin paying for Iranian oil with yuan.

An estimated13.4%of the oil that China imported by sea last year came from Iran, while the Gulf Kingdoms (excluding Oman, whose exports flow from the Arabian Sea) and Iraq togethercontributedaround 35%, approximately 48.4%, or nearly half, of China’s seaborne annual oil imports through the strait.

China also holds strategic oil reservesestimatedat 1.3 billion barrels, enough for three to four months, and is making rapid progress in implementingits green energy agenda.

Even so, this data confirms that China is economically dependent on the resumption of regular oil imports through the strait, a dependence this analysis argues could be weaponized by the US via control of Iran’s resources and pressure on the Gulf kingdoms to coerce China into a lopsided trade deal.

The goal would be to derail China’s superpower trajectory and then institutionalize a junior relationship with the US. Perpetuating the Iran war andseizing Iranian vessels sending oil to Chinacould advance this agenda as well.

If China subordinates itself to the US by lending legitimacy to his proposed Hormuz naval coalition and pledging to sign a lopsided trade deal during his visit to Beijing, Trump could then de-escalate the conflict and restore the reliability of China’s regional oil imports.

If Chinese leader Xi Jinping defies the demand, however, then Trump could perpetuate the conflict – prolonging the Gulf kingdoms’ drastically reduced oil exports to China, seize Iranian vessels sending oil to China, delay his trip and then intensify their trade war.

The US is stillChina’s largest single trade partnerdespite China’s trade diversification since Trump’s first-term trade war, and Washington still wields huge economic and financial influence over many of China’s other trade partners.

A new Sino-US trade war, coupled with drastically reduced oil imports, could hit China hard. In this scenario, Trump mightalso reach a deal with Russian leader Vladimir Putin first,further worsening China’s negotiating position vis-a-vis the USand potentially leading to more lopsided trade terms being demanded of it.

Trump’s demand that China join his naval coalition is therefore designed to confront Xi with a dilemma. Xi must either subordinate China to the US – lending credibility to this coalition and accepting a lopsided trade deal that formalizes a junior partnership during Trump’s visit — or fight another trade war from a weaker position than before.

The Chinese are historically astute strategists, however, and may yet find a way out of this dilemma.

Thisarticlewas 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 an Andrew Korybko Newsletter subscriberhere.