Did Xi Really Trade Iran for Taiwan?

 

Ali Alizadeh: The American readout of the Trump–Xi meeting claims that Xi explicitly agreed that the Strait of Hormuz must remain open, that there must be no tolls, that China opposes the militarisation of the Strait, that China will buy more American oil to reduce its dependence on Hormuz, and that Iran must never have a nuclear weapon. 

The Chinese readout said almost none of this. It said only that the two leaders exchanged views on the Middle East. Meanwhile, Xi Jinping spent his political capital on Taiwan.

So Iranians watching this tonight are asking: did Xi Jinping just trade Iran for Taiwan? Did our most important strategic partner sell us out at the Great Hall of the People while our cities are under blockade? 

What actually happened in Beijing today?

Michael Hudson:  If you have listened to Donald Trump and to the American reports of earlier negotiations with Iran and with other countries, there are always two versions. There is the American version, which always reads the same way: the other side has agreed to total surrender to everything the United States has asked for. Then there is the other side, which says, no, we did not say any of those things.

So we are dealing not only with a translation of languages, but a translation of what the words mean. What does it mean for the Strait of Hormuz to be open? From China’s point of view, it means that there will be continued trade — that all countries, the Arab OPEC countries and Iran, will be able to send their ships through the Strait and onward through the Indian Ocean, eastward to China or wherever they are going in Asia.

That is exactly what has happened in the last few days. Chinese ships have been freely going through the Strait of Hormuz. They have been paying the tolls that Iran has said are an absolute precondition for any agreement, because Iran has been attacked unjustly, in violation of the United Nations Security Council rules of war and the rules of international relations. Iran under these rules is justified in receiving reparations. 

But the United Nations does not have an enforcement system. It does not have any equivalent of a Nuremberg trials commission. It does not have a set of judges who can enforce reparations. So, Iran has worked out a pragmatic way of extracting these reparations, and that is to impose tolls on all ships going through the Strait.

That has been discussed and explained very clearly by Iran, and other countries have agreed to these rules. And the issue is not limited to Hormuz alone. What happens when the ships emerge from the Strait and go into the open seas? The United States has been seizing Iranian ships, or threatening to seize them. Most of the ships that are able to go through Hormuz have been turned back, forced to stop from going further. Iran has said: we will send so many that some will get by, because the United States does not have a large enough navy to prevent them all. But the United States is blocking not only Hormuz; it has blocked the ocean outside Hormuz as well. Iran has been trying to send its ships very close to the Pakistani shore, to stay within Pakistani waters and move that way.

But obviously, from Iran’s point of view, and I believe from China’s point of view, this is opening the Strait of Hormuz. It was Donald Trump who made up his wish list. And his wish list is, of course, that Iran would not charge any tolls. But that is one of Iran’s red lines. I think Iran has learned from looking at Russia’s experience in Ukraine that you do not announce a red line and then fail to enforce it. Russia has announced its red lines for what NATO countries can do in support of Ukraine, again and again and again, and NATO has simply ignored them. Iran has said: we are not going to let the United States, Israel and their allies keep pushing on us with salami tactics, a little bit at a time. A red line is a red line.

So when the conference ends, which I gather will be tomorrow, you will read the Chinese report of what happened. I doubt there can be an agreed joint report — there rarely is in these things. There is always the U.S. report for the U.S. press and for American voters, which says that Trump has won a huge victory and has hurt other countries to the benefit of the United States. And then there is the other side, which says all of this is fantasy and that they have stuck to their guns. So you should wait for the Chinese reports to come out, and for the discussion with Chinese diplomats that is going to follow.

AA: Nonetheless, for some people the very fact that Trump is visiting China, that Xi Jinping is welcoming him, and that — apart from China’s insistence on Taiwan — the Chinese are open to flexibility and say they want a good partnership, is troubling. For many, multipolarity was imagined as another Cold War. You were one of the first people to write about multipolarity. Can you explain how China is different from what the Soviet Union was, and why China insists on de-escalating tensions with America and avoiding military confrontation?

MH: Every country in the world except the United States, Israel, Germany, England and France wants to reduce tensions. So of course the host countries that are not among these belligerent nations are going to say we all want to be partners in world peace. They are trying to talk reason: here is a reasonable way to resolve things.

What they are actually doing when they say “we are partners” is laying down the principles of international trade, international investment, international banking and military spending. If you are part of this partnership — meaning agreement to these principles — that is fine. But if you do not agree to these principles, then we are afraid you are not part of this partnership.

So when China and Russia refer to their enemies as “our partners,” as they have done again and again, they are not posing as if they will fight back in a confrontational way. That is not the Asian way of conducting a negotiation. You do not say: we will fight back, you fight and we fight. That is not the way to find any resolution. Of course you are prepared to fight. But of course you say: why don’t we have a peaceful, logical discussion? Here is the kind of world stability that we are going to create.

The United States does not want stability in the world, because stability means the status quo. The United States has continually lost what used to be the American empire. It has lost its trade and balance-of-payments surplus. It has lost its industrial dominance. It has lost its dollar financial dominance. It is now a big debtor. It has been losing almost everything. That is why the U.S. National Security Strategy said, in effect: we are no longer going to support the kind of unified world of equality, multipolarity, free trade and free investment that we supported back in 1945, when we had all the power, when we had most of the world’s gold, when we had the manufacturing and industrial power to help Europe survive. We do not have that anymore.

The only asset that the United States now has to cope with a changing world dynamic is the ability to hurt other countries. It can say: we can disrupt your trade. Trump can impose tariffs to stop your access to the American market. That, of course, will upset your exporters and cause chaos. But if you agree to America’s version of the world — if you agree not to trade with Russia, not to trade with Iran, not to permit Chinese investment in your country — if you obey us and become our political and economic satellites, then you can have access to the U.S. market. Otherwise we are going to disturb your situation.

Donald Trump has said again and again that if blocking trade from the Arab OPEC countries and from Iran creates a world depression, that will benefit the United States, because the United States, he says, is self-sufficient in oil. And right now the United States is making a killing from the rise in world oil prices. American oil and gas companies are selling low-priced American oil and gas at world prices, not at low U.S. prices. Their profits are going up, their stocks are going up, and they are able to benefit from all of this.

So for Trump, the United States wins when the rest of the world goes into crisis — just as happened in 1998 during the Asian currency crisis, when Asian currencies, apart from Malaysia which had capital controls, all declined, and American and international investors could swoop in and pick up Korean, Japanese and other Asian companies at much lower prices than before. The United States policy, as announced in its own strategy, is to create crisis abroad. And Trump has carried that to the logical extreme. We are pirates in the OPEC trade once it comes out of the Strait of Hormuz. We have grabbed the ship. We have confiscated the oil. We have taken it. We can do that. That is a situation that serves the United States.

Now, how on earth can there be any agreement with China on this? I think that by talking about Taiwan, China is saying: we are not going to try to talk about problems that obviously cannot be solved. If we make the centre of our discussion U.S. relations with Taiwan, then anything we discuss dovetails into that. That is their version of a diplomatic Strait of Hormuz.

Take the issue of rare earth exports. The Americans want China to begin selling rare earth exports again to the United States. China has said: we do not want to sell rare earth exports that can be made into armaments. It would be crazy for us to sell you yttrium, gallium and other elements for your military to make into F-35 airplanes, arms and missiles, to sell to Taiwan to attack China. 

This gets back to what Lenin joked: the capitalists are going to sell us the rope to hang them with. You can imagine what China is saying: we are not going to sell the United States the raw materials it needs to build arms and weapons to sell to its protégés such as Taiwan, to attack us militarily. This is our national defence strategy.

So by saying that Taiwan is the centre of any agreement that comes out of these meetings, China is saying that Taiwan shapes any agreement on international trade, international finance and almost anything else the United States would like to make a topic of discussion.

AA: Today military.com published an article that the Pentagon is rushing to buy 10,000 missiles because Iran has depleted U.S. stockpiles. It is striking that the United States is dependent on China for the manufacture of its weapons. But let me push you on a longer-running debate. I put this question to your colleague Professor Radhika Desai as well: was this war on Iran driven by some rationale of the deep state of the American empire, or of a sector of American capitalism? Or was it forced on America, against American interests, by Israel — was America duped by Netanyahu, as Professor Mearsheimer puts it? As you said, the American stock market has benefited from this war. In your reading, has there been strategising before this war, or is it, as Professor Desai put it, simply a manifestation of America losing its direction and declining rapidly?

MH: Yes, of course there has been strategising. I sat in on such strategising 50 years ago, in 1974, when I worked with Herman Kahn at the Hudson Institute. We had repeated meetings with the White House, the State Department, the Treasury and many military officials, and they discussed exactly the strategy against Iran. At that time, I remember Herman Kahn saying: we have got to break Iran into five or more separate sections. The way to begin, he thought, was going to be Balochistan, to break it away. Now the United States is trying to work with the Kurds.

For the last hundred years, the United States has had one paramount umbrella strategy to control the world: to control the world’s oil. I have discussed this in many of the articles I have been writing recently on my website. Every country in the world needs oil and power to run its factories, heat its homes, make chemicals, petrochemicals and plastics, make fertilizer. If we can control the oil trade, then we have the power to hurt any country that does not obey us. We can use that as a lever. We do not have to go to military war with them. We can simply cut off their supply of oil, and that will force them to follow whatever American policy we want.

At the beginning of the 21st century, the Project for the New American Century said, in effect, that the way to control oil was to prevent countries from buying oil from any country we do not control. That is why sanctions were imposed on Iran after the overthrow of the Shah and the rejection of America’s 1953 interference in Iranian politics to take control of the oil industry. That is why the United States destroyed Nord Stream and imposed sanctions to prevent people from buying oil from Russia. That is why the United States destroyed Libya, so that countries could not buy oil from Libya. That is precisely why George W. Bush waged the war against Iraq.

There is always a pretense. The pretense was that Iraq had weapons of mass destruction. The fact is that what Iraq had was oil, and America wanted that oil. So it bombed and destroyed the Iraqi economy, and essentially brought in al-Qaeda and Wahhabi terrorists to support its strategy. The Americans then spread the fight to Syria to grab its oil supplies.

But all along, when they were outlining the countries they were going to conquer throughout the Near East and the Middle East to control Middle Eastern oil, the sequence ended with Iran. Iran was always the final objective. The United States realised it could conquer Libya, Iraq, Syria and other countries, and it could enforce support from Saudi Arabia, the Emirates and the Arab countries, because all of these countries’ oil proceeds — in their government funds — were invested in the U.S. bond market and U.S. financial markets. So all along the purpose was to control world oil and be able to control the switch: turning off the electricity, the power, the lighting. It all required conquering Iran, recapturing Iran’s oil industry and reinstalling a military dictatorship — this time more vicious and more effective than the old Shah’s. This is a plan that has been 50 years in the making, refinement and elaboration.

AA:  But many analysts believe that even though such an attack on Iran would have been desirable for Washington, previous presidents avoided it because they thought it was impossible. George W. Bush, who was definitely one of the most warmongering presidents in the White House, refused to attack Iran. So did Donald Trump make a mistake, or do you believe he acted according to the rationale of America’s deep state?

MH: You remember that under George H. W. Bush there was the bloody Iraq war against Iran. A million Iranian soldiers died. The Americans provided the Iraqis with chemical warfare and other illegal means. So they already tried in the 1980s to conquer Iran. It did not work. Then George W. Bush and the rest of the deep state followed the plan and said: we cannot fight against Iran until we conquer Iraq and Syria and control the rest of the Middle East, so that we have our forces there. We have military bases in the Emirates, military bases in Saudi Arabia, military bases all around Iran, so that we can be in a position to conquer it.

Obviously some military strategists are more optimistic than others. Trump has around him all of the most optimistic neocons. These are the same neocons who were around Dick Cheney when he was vice president under George W. Bush. The same people have been there all along, and they are still there — the same pro-Israel Zionists who believe that the United States and Israel can make a condominium, where the United States uses Israel as its primary military base in the Near East, and uses the Israeli army as the enforcement force, now supplemented by Jolani’s jihadist al-Qaeda army in Syria, in partnership with Israel, to act as America’s client oligarchy and enforcers.

AA: In the last few weeks, you have had a very different narrative from most analysts. While everyone has been looking at missiles, drones and casualties, you have been telling a different story — and I do not think it has been fully registered, even inside Iran. So with your 50 years of work on the American financial system, can you tell our audience what Iran has actually accomplished? The headlines are all about missiles, ceasefire and casualties. But underneath, Iran has effectively closed the Strait, imposed tolls in Chinese renminbi, collapsed OPEC oil exports, brought Gulf monarchies to Washington asking for swap lines, sent gold flowing out of the United States at record rates, and made foreign central banks hold more gold than U.S. Treasuries for the first time since 1996. This is, in your own framework, the unwinding of the system you described in 1972. What exactly has Iran broken, and what has it achieved in these seven weeks of war?

MH: What Iran has achieved is saying: we will not surrender. It has realised that if it does not fight, the United States is going to do just what it said it would do. It is going to have regime change, as it tried to do when it recently killed Iranian leaders. It is going to take over the government. It is going to put in a client oligarchy, just like the Shah. And Iran is saying: we would rather fight than end up becoming a colony, a client dictatorship and a client oligarchy of the United States, which would take over all of our natural resources and oil for itself.

Iran realised that by itself it cannot defeat the United States and its allies in Europe and its allies in other countries such as Japan in the East. It needs the rest of the world to support it. How can it do this? Iran has said: if we cannot export our oil to Asia and to whatever markets we want, then there is not going to be any oil from the Arab OPEC countries or the Middle Eastern OPEC countries exported either. It is the job of other countries — China, Asian countries, Global South countries, even Europe — if you want free trade and access to the oil of this region, you have to include us as part of that oil region. You have to oppose the United States takeover of the Middle East. You have to support our drive to protect our own national security by driving out all American military bases in the Near East, so that we will no longer be threatened. You have to return the money that your banks have stolen from us illegally. You have to drop the sanctions on us.

If you want oil from us or from other countries, you have to permit us to survive. And if you are saying, well, we want oil, and it is okay if America takes Iran over and controls the oil — even if America is going to use this oil as a weapon against us to enforce our agreement with U.S. policy — then Iran says: if you do not care, you had better care, because the cost of not supporting our defence, our independence and our sovereignty is going to be a world depression as bad as the 1930s. Take your choice.

Iran is upping the ante to force the whole world to ask: do you want to permit America simply to grab Iran, to do to Iran what it has just done to Venezuela? To come in and simply grab the oil, and say that all Venezuelan oil exports are to be put into a bank account in Florida under the personal direction of Donald Trump? Trump has said that he wants to appoint the new leader of Iran after regime change. In other words, the Iranian people would have nothing. Iran is saying: if this is your idea of the world — if the rest of the world economy believes that Donald Trump and America should appoint the leaders of every country, and should be able to grab the oil, the mineral resources, the land, the public utilities and anything else they can grab — then quite frankly, to hell with you...

-CounterPunch

Did Xi Really Trade Iran for Taiwan? - CounterPunch.org