Tariffs on China is an idle threat, says CFR's Charles Kupchan

Key Concepts

• Axis of Autocracies: A geopolitical grouping comprising Russia, China, Iran, and North Korea that has emerged following the Russian invasion of Ukraine.
• Pivot to the Indo-Pacific: The U.S. strategic shift to prioritize the Indo-Pacific region, which is currently being hindered by Middle Eastern conflicts.
• Mercantilist Power: A state (in this case, China) that prioritizes economic growth, trade, and resource security over active intervention in global geopolitical conflicts.
• Strait of Hormuz: A critical maritime chokepoint for global oil transit, currently the focal point of potential U.S.-led blockades.

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1. China’s Ambivalent Stance on Middle East Conflict

Charles Kupchan argues that China maintains a dual perspective regarding the ongoing Middle East instability:

• Strategic Benefits: The conflict serves China by distracting the United States from its Indo-Pacific pivot and creating fractures within NATO and the Western democratic alliance.
• Economic Risks: As a nation that imports approximately 70% of its oil—with 14% sourced from Iran—China is highly sensitive to global economic disruptions. Consequently, China prefers stability, lower oil prices, and a swift end to the conflict.

2. The Role of Economic Leverage and Tariffs

The discussion addresses the potential use of 50% tariffs on Chinese goods as a tool to pressure Beijing:

• The "Idle Threat" Argument: Kupchan suggests that a 50% tariff is likely an empty threat because the U.S. administration still seeks a trade deal with China.
• Economic Impact: Such tariffs would significantly increase consumer prices in the U.S. and destabilize the global economy, making them an unlikely policy choice.
• Diplomatic Influence: China has already played a role in encouraging Iran to agree to a ceasefire. The current challenge is for China to bridge the remaining gap between U.S. and Iranian terms for a durable settlement, as the two nations remain "miles apart."

3. The Limits of the "Axis of Autocracies"

Kupchan highlights a significant realization regarding the power dynamics within the Russia-China-Iran-North Korea bloc:

• Isolation of Iran: Despite being part of this alliance, Iran is largely on its own during the current crisis.
• Power Constraints: Neither Russia (preoccupied with the war in Ukraine) nor China (prioritizing trade) is currently able or willing to provide substantial support to Iran. This demonstrates the practical limits of these nations' influence when faced with direct confrontation.

4. Operational Challenges in the Strait of Hormuz

The summary of the military/strategic situation includes:

• Blockade Strategy: The U.S. Navy is expected to monitor the Strait of Hormuz by inspecting and potentially boarding ships originating from Iranian ports.
• Risk Assessment: The Strait is considered too dangerous for standard commercial tankers or warships due to the threat of Iranian retaliation.
• The "6 Million Dollar Question": The critical uncertainty is how Iran will respond to a U.S.-led blockade. It remains unclear whether Iran will allow the blockade to take effect or if they will escalate the situation by targeting vessels.

5. Synthesis and Conclusion

The main takeaway is that China is acting as a "mercantilist power" that prefers to "keep its powder dry" rather than engage in active conflict resolution. While China benefits from U.S. distraction, its dependence on energy imports and desire for trade stability forces it to advocate for calm. The current geopolitical landscape reveals that despite the formation of an "Axis of Autocracies," these nations are not a monolithic bloc capable of unified military intervention, leaving Iran increasingly isolated as it faces potential U.S. maritime pressure.