The inability for a lasting deal between Iran and the United States has left markets in somewhat of a Neverland. Caught between dream and reality, A.I. ‘shoots for the second star on the right and on ‘til morning’, while everything is danger of being shot down by the Iran war taking on the role of ‘Tootles’. As in the ‘Peter Pan’ classic by J. M. Barrie, Captain Hook and Peter are not interested in a solution to their fight, they are just interested in the status quo. The WSJ offers a very worthy turn of phrase, “instead of fighting, both sides have doubled down on duelling blockades that are hard to undo without one side blinking.” Donald Trump has poured so much scorn on Iran’s response to the United States’ and admitted he did not even finish reading it, called it “garbage” and that the ceasefire was on “life support.” The underlying threat is not taken seriously in Iran, which at present considers the quagmire beneficial to its cause. Its chief negotiator, Parliament Speaker Mohammad Bagher Ghalibaf said on social media that the Islamic Republic is “ready to deliver a well-deserved response to any aggression, […] there is no alternative but to accept its 14-point proposal and the longer they drag their feet, the more American taxpayers will pay for it.” There is no opaqueness to this, Iran seeks to grind down the US by the cost of the American campaign which is being covered by bluster and the stonking value of US stock markets. The Pentagon, in what seems a very conservative estimate, says the cost of the war at present stands at $25 billion, but even in this very eerie state of ceasefire the ‘burn rate’ of ships, aircraft and supportive missions must be immense and is funded by an open-ended cheque book. The Iran regime is dug-in and fighting for its very existence be it through war or stalemate, its cost of failure is obvious. None of these considerations are apposite for the United States and in the end, as is always the case in modern Western society, it will be about the money and how much tolerance there is to it being sunk into this fairytale-cum-nightmare involving ‘Lost Boys’ with no clue.

China or bust

There is going to be a many-layered process of negotiation when the US President visits his Chinese counterpart at the end of this week. The original meeting was to have taken place in March but because of the US action in Iran, the postponement was hardly anything other than inevitable. Time may have soothed a ruffled Xi Jinping, but cutting off a source of cheap energy to the South-East trading giant might be regarded as an affront to China’s national security, and we all know how every superpower or bully loves to roll out that much abused excuse for unilateralism. Frankly, the US might have had held secret designs on how crimping China’s oil supply could make it a little more flexible on trade matters such as Taiwan, A.I., rare earth materials and trade in general. 

However, due to the current military campaign being as metaphorically bogged down as anything seen in the Somme or Ypres, the United States seeks to engage the diplomatic services of Beijing and use its heavy influence on Tehran for Iran to be less objectionable in agreeing to terms of a lasting peace. This is evidenced in how quiet the usually vociferous US President is on China’s burgeoning trade surplus. At the end of last year, the global value of its exports over imports ballooned to $1.2 trillion and during April’s trading month, China’s trade surplus with Uncle Sam increased to $87 billion despite it seeking greater exposure to trade with other destinations due its souring trading relationship with a tariff touting White House. Such numbers would likely have had Trump climbing the walls of ‘unfairnesses’ but such language is expedient when more pressing matters require a diplomatic two-step shift. Even the Donald realises this.

One wonders over the recent course of events whether Trump has painted himself into a corner. It is not preposterous, at face value, to describe the current relationship as a state of détente, but one that might just favour China. Notwithstanding a western philosophy of immediacy and an eastern one of patience and long-termism, last year’s raucous tariff attack carried out by this current US Administration at first seemed to have caught China napping a little. Screaming down with a tariff of 140 percent was an onslaught that even if negotiated back from would end in something of an American triumph, yet the ace in the hole for China is its global control of rare earth minerals and when it was introduced as a leverage point, Trump all but folded. 

Given the consistent non-performance by China on trade deals, the US President’s needy entry into this meeting leaves his scope for negotiating a little hamstrung. Even the ‘Phase One’ deal of 2020 where China was supposed to embark on an extra $200 billion worth of US goods and services was never realised and laid at the altar of Covid. Currently, it also stands accused of failing to derestrict US accessibility to critical minerals, of not bringing back its purchases of soybeans from US farmers to the levels seen before last year’s moratorium and has completely failed in giving any reassurance that it will address the industrial espionage it is accused of performing within the US technology industry, particularly that of A.I. 

What concessions Trump might make, and there will have to be if China is to do the US’s bidding on diplomatic pressure on Iran, will be keenly worried over on discussions over Taiwan. Will the hitherto unquestioned support from Washington toward Taipei have some of its staunchness loosened? Historical allies of the US will wait with bated breath especially from Tokyo which has undergone a serious spat with Beijing after former Prime Minister Shinzo Abe declared that a "Taiwan contingency is a contingency for Japan" and after gaining office, Prime Minister Sanae Takaichi, said, “a hypothetical Chinese attack on democratically governed Taiwan could trigger a military response from Tokyo.” China is a bad actor in supplying arms to, and importing oil from, Russia and Iran. It continues to breach trading agreements and is a constant threat to neighbours. For Donald Trump to overlook this, to engage Xi Jinping in what seems muted terms, portrays just how stuck for ideas he is in finding the coveted ‘off ramp’ for this war and why it will not end any time soon. 

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