When far away wars affect Sino-US trade negotiations in real time

THE negotiation tables of the 21st century are rarely clean. They are cluttered with war maps, military projections, and battlefield outcomes—even when the subject at hand is trade. Nowhere is this truer than in the uneasy, protracted negotiations between the United States and China, where the fate of faraway wars increasingly casts a long shadow.


At first glance, the war between Israel and Iran—escalated through missile exchanges, cyberstrikes, and targeted assassinations—seems disconnected from tariffs, semiconductor restrictions, and WTO disputes. But diplomacy is rarely linear. As Clausewitz once warned, war is merely the continuation of politics by other means. And in the case of the United States and China, it is also the continuation of trade negotiations by kinetic and psychological proxies.

Israel’s Gains, America’s Confidence

From Washington’s perspective, Israel’s early victories over Iran’s military and intelligence infrastructure—especially its air defense systems, radar arrays, and suspected nuclear facilities—are not just strategic wins for the Middle East theater. They are confidence-boosting victories that embolden U.S. negotiators in their broader geopolitical contests, particularly with China.

The logic is straightforward: if Iran’s clerical regime collapses—or is deeply destabilized—through Israeli precision and American backing, it not only neutralizes a longstanding regional adversary but also sends a powerful message to Beijing. That message: U.S. hard power still works. The specter of Iraq in 2003, when American forces swiftly toppled Saddam Hussein’s regime (before getting bogged down), is again being conjured—this time with the belief that military supremacy can be converted into global diplomatic leverage.

A successful Israeli campaign against Iran could provide President Donald Trump and his trade hawks the psychological high ground. If they can claim to have helped unseat the Islamic Republic’s regime or cripple its nuclear ambitions, they will approach China with newfound swagger. It will be easier for the U.S. to demand concessions on intellectual property rights, subsidies to state-owned enterprises, and restrictions on critical mineral exports, all under the assumption that America once again dominates the chessboard.

This moment is especially important as the U.S. pivots back to industrial policy, chips act subsidies, and attempts to rewire the global supply chain away from Chinese dependence. Demonstrating full-spectrum dominance—even through a proxy like Israel—is a potent way to compel Beijing to listen.

China’s Strategic Anxiety

But China sees the war through a very different lens. For Beijing, Iran is not just a geopolitical partner in the Belt and Road Initiative (BRI); it is also a key node in China’s energy security architecture. More than 30% of China’s imported oil comes from the Gulf region, with Iran and Saudi Arabia providing a substantial share. The Strait of Hormuz, already militarized, is now a red-alert corridor. Any conflict that risks regime collapse in Iran also threatens to unravel China’s carefully cultivated West Asia policy.

Moreover, the spectacle of Israeli and U.S. dominance—if left unchecked—reminds Beijing of the 2003 U.S. invasion of Iraq, when America asserted hegemonic willpower seemingly without consequence. If that pattern repeats, China fears it will be next in line, not through military action, but through economic containment and technological exclusion.

The stakes are high. If Iran collapses quickly, Beijing fears it will find itself on the backfoot in negotiations. A triumphant United States—buoyed by Israel’s battlefield dominance and perhaps a new secular or military regime in Tehran—will believe it has created a new regional order. In such a world, U.S. leverage over oil prices, maritime routes, and Middle Eastern politics could dramatically increase, threatening the viability of China’s westward economic corridors.

The Protracted War Scenario

However, not all scenarios favor the U.S. A drawn-out war between Israel and Iran, resembling the Russia-Ukraine quagmire, offers a different outcome. While the U.S. may still support Israel, a prolonged campaign would drain resources, raise the risk of regional conflagration, and embolden Iran’s proxies—Hezbollah in Lebanon, the Houthis in Yemen, and residual Shiite militias in Iraq—to escalate in multiple theaters.

A grinding conflict would also reveal the limitations of Israeli military power, which, despite its precision, cannot extinguish ideologies nor control urban insurgencies. The U.S., once again acting through proxies, risks being entangled in a Middle East war with unclear exit strategies—a strategic overextension that Beijing would quietly welcome.

For China, an Iran that survives and continues to resist—much like Ukraine’s resilience against Russia—offers valuable geopolitical breathing space. It reveals that American hard power cannot reshape regions at will, at least not anymore. It would also offer China more negotiating bandwidth and flexibility, enabling it to reject maximalist U.S. trade demands and instead pursue greater economic autonomy with its Global South partners.

Furthermore, if a regional war drives oil prices higher but not to catastrophic levels, Beijing could use the crisis to deepen its long-term energy agreements with Russia and Central Asian states. This would reduce its reliance on volatile Gulf supplies and weaken U.S. leverage in maritime chokepoints.

Trade Talks in the Shadow of Conflict

Both Washington and Beijing are watching the Iran-Israel war not as distant spectators but as calculating negotiators. The war’s outcome could shift the tempo and terms of their trade discussions. A swift U.S.-Israeli victory might enable Washington to press for more aggressive trade wins. But a messy, prolonged conflict will humble American negotiators and embolden China’s strategic patience.

In essence, the trade negotiation table is shaped by what happens thousands of kilometers away—from the airbases of Israel’s Negev Desert to the missile silos near Isfahan. The better Israel performs, the more assertive the United States becomes. The longer Iran survives, the more assured China feels that the world remains multipolar, with room for maneuver.

As always in great power competition, diplomacy is not isolated from violence. It is shaped, reinforced, and sometimes distorted by it. The tragedy is that while the people of Iran and Israel bear the brunt of conflict, its long-term consequences are being calculated in boardrooms and war rooms from Washington to Beijing.

And therein lies the uncomfortable truth: the world’s economic future may depend not only on tariffs and trade balances, but on the tempo of a war no one claims to want, yet too many are willing to exploit.

---

Phar Kim Beng, PhD, is Professor of ASEAN Studies at the International Islamic University Malaysia and a former Head Teaching Fellow at Harvard University.

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.

Dapatkan berita terkini di sini