The World This Week | US-China summit, BRICS split over war, India braces for Hormuz fallout

The summit, which marked the first visit by a US President to China since 2017, comes after a year of trade-related tensions, during which both sides increased import duties, and China implemented export restrictions on critical minerals.

Beijing’s stance on Iran

President Trump said Friday that he and ⁠his Chinese counterpart Xi Jinping “feel very similar about (how) we want it to end,” referring to the war. “We don’t want them to have a nuclear weapon.” Trump also said that President Xi offered his help to reopen the Strait of Hormuz.

While China has strongly condemned the US war against Iran, Washington acknowledges that Beijing has significant leverage over the Islamic Republic, importing about 90 per cent of Tehran’s crude – the lifeline of its cash-strapped economy. Moreover, their co-dependence is asymmetric as Iran contributes only 13 per cent of China’s total oil imports.

With 35 per cent of China’s crude imports coming from the Persian Gulf, which the war has effectively halted, the US intends to rally Beijing’s support to bring Iran to the negotiation table.

China previously worked with the US, Russia, and European nations to secure the JCPOA in 2015, which limited Tehran’s nuclear programme. Currently, the Trump administration is pressuring Iran to abandon its nuclear enrichment – at least for 20 years – and hand over its existing stockpile of near-weapons-grade uranium.

Underwhelming deals

While details of the summit’s outcome have not been disclosed, Boeing said it will make a major sale of 200 planes to China, a number much lower than the 500 that Trump had floated. This prompted Boeing’s shares to fall 4 per cent on Wall Street.

On the other hand, China has yet to indicate that it would purchase Nvidia’s advanced AI chips, the H200. Last December, Trump approved Nvidia to sell the H200 to China, but Beijing pushed its companies to rely on homegrown technology from chipmakers such as Huawei.

Taiwan issue

The issue of Taiwanese sovereignty has been the reason behind episodic flare-ups between the US and China.

While the US officially recognises the One China Policy – acknowledging that Taiwan is a part of China – Washington provides arms support to the self-governing island to defend itself from Beijing’s ‘aggression’ under its Taiwan Relations Act (TRA).

Over the past few years, China has built a naval fleet that now outnumbers the US in vessel count and has been displaying aggressive manoeuvres near Taiwan. In the meantime, Beijing has sharpened its ‘reunification’ rhetoric.

During the summit this week, Chinese President Xi said that “the Taiwan question is the most important issue in China-US relations,” warning the US that “if mishandled, the two nations could collide or even come into conflict, pushing the entire China-US relationship into a highly perilous situation.”

In an interview with Fox News’s Sean Hannity on Friday, Trump appeared to cast doubt on Washington’s ability and willingness to defend Taiwan in the event of a Chinese invasion. He pointed to the island’s proximity to China and accused Taipei of “stealing” the US semiconductor industry.

“When you look at the odds, China is a very, very powerful, big country. That’s a very small island. Think of it; it’s 59 miles away. We’re 9,500 miles away. That’s a little bit of a difficult problem,” Trump said.

“If you look at the history, Taiwan was developed because we had presidents that didn’t know what the hell they were doing. They stole our chip industry,” he added.

The middle power crisis

Donald Trump and Xi Jinping have both used their respective countries’ enormous influence to coerce middle powers, from punitive tariffs and sanctions to supply chain curbs. Amid this, middle powers have begun hedging to secure their own interests.

Weeks ahead of the US-China summit, countries began scrambling to finalise agreements to insulate themselves from the fallout of any form of recalibration in the relationship between the two economic superpowers.

Australia signed an agreement with Japan to acquire 11 advanced Mogami-class stealth frigates. Poland signed an agreement with South Korea’s Hyundai Rotem to manufacture K2 Black Panther tanks domestically. Brazil’s Embraer secured a landmark order for C-390 military planes from the United Arab Emirates.

In early March, India and Canada finalised an agreement for Ottawa to supply New Delhi with uranium. Reports suggest that India is also moving closer to an agreement for the supply of BrahMos missiles to Vietnam.

Pentagon’s defence strategy, released this January, acknowledged Beijing as a competent rival. However, the US diverted vast amounts of military assets to West Asia for the war with Iran. A report from the New York Times revealed that the US has already burned through half its stockpile of key munitions at a rate that outpaces its production capability, leaving allies in East Asia worried about the US’s readiness to support them.

Now, with Donald Trump appearing on the defensive over Taiwan after the Beijing summit, and the US moving troops out of Germany and military assets out of East Asia, we may see more such agreements in the coming months.

II. India hosts BRICS Summit

While the two economic superpowers met in Beijing, India hosted the BRICS Foreign Ministers’ Meeting in New Delhi. The Summit was held on the theme, “Building for Resilience, Innovation, Cooperation and Sustainability”, according to the Ministry of External Affairs.

With two members of the coalition (Iran and the UAE) on opposite sides of the ongoing conflict, the shadow of the war loomed over the meeting. The group ultimately failed to produce a joint statement due to a lack of consensus stemming from a member’s opposition to key issues.

Elusive joint statement

One of the parts in the proposed joint statement that the member opposed concerned the Gaza Strip.

The statement said that BRICS ministers “recalled that the Gaza Strip is an inseparable part of the Occupied Palestinian Territory” and flagged the importance of unifying the West Bank and the Gaza Strip under the Palestinian Authority.

An unnamed member state had reservations about another point that stressed the importance of freedom of navigation in the Red Sea and Bab Al-Mandab Strait, a maritime route periodically affected by the Houthis of Yemen, an Iran-backed militant group.

Iranian FM Abbas Araghchi meets EAM S Jaishankar

EAM S Jaishankar held talks with Iranian Foreign Minister Abbas Araghchi on Friday as India hosted the summit. He said they held a detailed conversation on West Asia and the implications of the war.

Iran Foreign Minister Abbas Araghchi (left) meets External Affairs Minister S Jaishankar, in New Delhi, on Friday. (Photo: X/@DrSJaishankar)

Araghchi expressed the hope that India will continue to develop the strategically vital Chabahar port in Iran. He described the port as a “golden gateway” and a “symbol of cooperation”.

The port was intended to help India access Central Asia by bypassing trade routes through Pakistan, but due to US sanctions on Tehran, India has largely withdrawn its personnel and operations.

III. India-UAE agreements

In a display of its ability to walk the diplomatic tightrope, balancing relations with Iran and the UAE, India signed several key agreements on Friday.

During Prime Minister Narendra Modi’s brief stop in Abu Dhabi as part of his five-nation tour, the two countries signed MoUs to expand strategic cooperation.

Prime Minister Narendra Modi and UAE President Sheikh Mohammed bin Zayed Al Nahyan. (Credit: X/@narendramodi)

The agreements include a framework for a defence partnership, storage of 30 million barrels in Indian strategic petroleum reserves, supply of LPG, and a ship repair cluster in Gujarat’s Vadinar.

Abu Dhabi also pledged $5 billion in investments in Indian infrastructure, RBL Bank, and Samman Capital.

IV. Appeal to citizens

On Sunday, Prime Minister Narendra Modi urged citizens to take steps to cushion the impact of energy supply disruptions owing to the war in West Asia. Among these measures were avoiding non-essential foreign travel and gold purchases for a year.

The war has virtually halted all trade through the Strait of Hormuz, the chokepoint through which about half of India’s oil imports, 60 per cent of its LNG imports, and a staggering 90 per cent of its LPG imports pass.

Since the beginning of the conflict on February 28, India has taken a host of measures to offset the impact of the war on energy consumers, including invoking the Essential Commodities Act to regulate the production and supply of natural gas and Liquefied Petroleum Gas (LPG).

While global oil prices increased by about 50 per cent, Indian oil companies have offset the impact on domestic consumers. However, prices have gradually risen, and in the latest, oil companies on Friday announced a hike of Rs 3 per litre for petrol and diesel.

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