The summit between U.S. President Donald Trump and Chinese President Xi Jinping, who sat face-to-face for the first time in nine years in Beijing on November 14-15, laid bare the cold reality of international politics. Ideological causes and values-based diplomacy were pushed to the back burner, replaced by the hard-nosed calculation of maximizing national interests. The pragmatic equilibrium the two leaders reached after fierce wrangling represents a finely tuned interplay of geopolitical grand bargaining, economic pragmatism, and political calculation.
The most striking element — one capable of shaking the global order — was the "geopolitical grand bargain" that put Iran and Taiwan on the negotiating table. One of President Trump's top priorities is bringing the Iran war to a swift conclusion. His strategy is to use China, the largest importer of Iranian oil, as leverage to tighten the noose around Iran. If China tacitly agrees to the U.S.-led end-of-war scenario, including lifting the blockade of the Strait of Hormuz, Iran will face all-out pressure from the G2.
What does China get in return for cooperating with U.S. hegemony in the Middle East? Taiwan. President Xi's message was clear: the United States can take what it wants in Venezuela or Iran, but it must not touch Taiwan, China's core interest. The fact that President Trump did not utter a single word about the Taiwan issue throughout the summit suggests this subtle deal was struck. With Taiwan's political landscape in flux amid the rise of pro-China parties, the United States made the shrewd choice to step back from the Taiwan issue — the powder keg of Northeast Asia — in exchange for geopolitical victory and tangible gains in the Middle East.
The shift in tone on the economic front is also notable. The fact that major U.S. Big Tech CEOs joined the China visit signals a "tactical truce" in the trade war. Underlying this is U.S. confidence in its overwhelming technological supremacy. The intent is to pause the draining tariff war, at least until the midterm elections in the latter half of the year, and significantly expand exports of advanced tech products to China. One good turn deserves another. The United States, in a corresponding move, is likely to lower import barriers on Chinese general consumer goods, giving the market room to breathe.
At the end of this elaborate chessboard lies the U.S. midterm elections this November. If, as President Trump hopes, President Xi visits Washington this September, it will be the crowning touch on the dramatic political scenario Trump is sketching. He is taking aim at multiple targets simultaneously through this U.S.-China thaw. The plan is to stabilize global oil prices through an early end to the Iran war and curb inflation — the most pressing concern at hand — by expanding low-cost imports from China. The calculation is to bag both diplomatic achievements and economic stability, turning them into momentum for an electoral landslide.
The U.S. economy, weighed down by accumulated fatigue from successive expansionary wars, and the suppressed global markets have found a new breakthrough at this summit. The temporary, strategic mood of reconciliation, forged through both sides' thorough respect for each other's "red lines," is likely to substantially reduce global uncertainty and inject powerful vitality across the economy.
This cold new world order, sculpted by thoroughgoing exchanges of interests, poses a question to us. At a time when great powers so nimbly discard principle in favor of pragmatism, where exactly are our diplomatic and economic calculations heading? At this turning point in the international landscape, a more meticulous and flexible strategy is needed more urgently than ever.
