Needed: A Diplomatic Masterstroke

Not likely to happen with Trump in Beijing

President Donald Trump meeting with Chinese President Xi Jinping in South Korea last fall. Credit: Getty Images

The world is holding its collective breath as the most powerful man on the planet prepares to meet with Donald Trump. President Xi Jinping of China will host the Trump-led U.S. delegation later this week.

While the tenuous ceasefire with Iran is on Trump-proclaimed “life support” and renewed military action seemingly imminent, Trump is nonetheless packing his bags and heading to Beijing.

For a president who has sent his son-in-law and a real estate buddy to negotiate all over the globe, any mediations with Team Trump have low potential and high risk. Look no further than the current stalemate with Tehran. Or Russia and Ukraine. He promised that war would end on his first day in office. That was 476 days ago.

Now he has another war to end — one of his own making — that has upended the economic world order and downgraded the U.S. economy. We have soaring gas prices and all the impending downstream consequences, like higher food costs.

This is the second shot at this summit — the first postponed by the Iran war back in March. Because he views himself as the ultimate dealmaker, Trump heads to China with more bravado than is justified. His unpredictability, which has reached new heights recently, and Xi’s political acuity portend a meeting that will have significant global impact.

It’s hard to imagine, but in this upside-down political reality Xi is painting China as the safe and stable alternative to a volatile United States. And many international trading partners are buying it. But Trump is more concerned with Iran right now. And it so happens that China is the biggest buyer of Iranian oil. Hopes are that Trump can exploit that fact by urging Xi to pressure Iran to agree to the U.S. peace agreement.

China might do that, for a horrific price: Taiwan. Currently, America’s position on Taiwan, as negotiated by President Richard Nixon, is purposely ambiguous. But China wants to make explicit that the U.S. does not support a free and independent Taiwan.

That position would have been unthinkable in previous American administrations, but Trump’s inability to stay on script, and the fact that a free Taiwan versus a Chinese-controlled Taiwan has no material effect on him, could result in Taiwanese independence becoming collateral damage of the war in Iran.

The U.S. has historically sent billions in military assistance to Taiwan, which China claims to own. Washington has long seen Taiwan as a regional democratic counterbalance to Communist China.

If and when Taiwan is discussed, much less settled, the two leaders will likely move on to the economic battle simmering between the superpowers. The U.S. has attempted to slow China’s rise on the world stage, as a technological innovator and economic powerhouse. China has been doing its own pushing. Both countries are using steep tariffs, sanctions, and technology restrictions as cudgels in an ever-growing trade war.

Trump needs a win in China, considering the mess he has created at home. He lashed out at Tehran’s counter offer to the most recent U.S. proposal to end the war. “I would call it the weakest right now after reading that piece of garbage they sent us. I didn’t even finish reading it,” said the president to reporters on Monday, describing what was supposed to be a ceasefire.

Iran’s counteroffer is a limited agreement that would open the Strait of Hormuz and lift the U.S. blockade of Iranian ports. This half-measure is an effort to get global oil reserves moving again, as negotiations between the U.S. and Iran slog on.

The Iranian foreign ministry called their proposal “generous” and “reasonable.” Trump called it “TOTALLY UNACCEPTABLE” and suggested bombing could begin again soon. Israeli Prime Minister Benjamin Netanyahu told “60 Minutes” that the current Iranian government’s “days are numbered — but it could take a lot of days.”

Trump has talked about having “all the cards” in these negotiations. I don’t know what game he is playing, but it may as well be Go Fish. He has few cards because the Iranian regime’s tolerance for pain is so high. With no accountability to their people and a ruthless military, the Iranian theocracy is ready and willing to wait out a flailing Trump.

Writing in The Atlantic, Robert Kagan calls the situation a checkmate for Iran:

“The risk calculus that forced Trump to back down a month ago still holds. Even if Trump were to carry out his threat to destroy Iran’s “civilization” through more bombing, Iran would still be able to launch many missiles and drones before its regime went down — assuming it did go down. Just a few successful strikes could cripple the region’s oil and gas infrastructure for years if not decades, throwing the world, and the United States, into a prolonged economic crisis.”

None of this is going to help rising global oil prices. U.S. gas prices remain high, up $1.50 since the war began. To alleviate sticker shock, Trump reversed course on Monday and said he would endorse a suspension of the federal gas tax. This idea gets batted around Congress every time prices rise significantly.

The federal tax on a gallon of gasoline is 18.4 cents and 24.4 cents on diesel. While a “gas tax holiday” sounds like a good way to relieve pressure at the pump, it comes with a lot of downsides. This is why the president and congressional Republicans have been reluctant to propose it.

First, consumers would get some relief, but it won’t come close to offsetting the massive increase that will likely grow as the war continues. Second, the gas tax funds the national Highway Trust Fund, which is used for federal road maintenance.

The trust fund spends more than twice what the gas tax brings in, and it is getting harder to fund as cars become more efficient and consumers buy electric vehicles. A five-month tax moratorium would reduce the trust fund by $17 billion, or 46%, according to the Bipartisan Policy Center.

Though it amounts to little more than a stunt, with the summer driving season about to get started and the midterms less than six months away, odds have increased that Republicans in Congress will push for it.

Trump is essentially borrowing from Peter, not to pay Paul, but to keep from getting impeached by an increasingly probable Democratic Congress in 2027.

Meantime, America’s strategic position in a world that grows more dangerous by the day grows weaker.

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Stay Steady,
Dan