China's strategic squeeze

China is trying to keep its Iran ties intact while clearing the ground for Xi Jinping’s May 14-15 summit with President Donald Trump. (al-monitor.com) Reuters reported on April 17 that Beijing had stepped up efforts to end the Iran war without alienating Tehran, even as the White House confirmed Trump’s Beijing trip for mid-May. China is the world’s top crude importer and relies on the Middle East for about half its oil supply. (al-monitor.com) (abcnews.go.com) China’s foreign ministry has publicly called for an immediate halt to military operations and warned that the conflict could hit the world economy and energy security. In an April 2 briefing, spokesperson Mao Ning linked the fighting to risks around the Strait of Hormuz, a chokepoint for Gulf oil shipments. (fmprc.gov.cn) At the same time, Washington has kept tightening trade pressure. A House of Commons Library briefing says the United States began applying a 25% tariff on specific semiconductors re-exported to China on January 14, 2026, and is also investigating tariffs on pharmaceuticals. (commonslibrary.parliament.uk) Those measures hit sectors that sit at the center of Asian manufacturing networks. Chips often cross borders several times for assembly, testing and packaging, while pharmaceutical supply chains depend on active ingredients and contract manufacturing spread across multiple countries. (commonslibrary.parliament.uk) An Observer Research Foundation analysis published April 23 says the mix of tariffs, temporary truces and security pressure is forcing South-East Asian governments to recalculate how they balance between Washington and Beijing. It says China has expanded its economic influence in the region even as maritime disputes in the South China Sea continue. (orfonline.org) That leaves exporters in places such as Vietnam, Malaysia and Thailand facing two tests at once: whether they can keep benefiting from “China-plus-one” manufacturing shifts, and whether new U.S. rules will treat rerouted goods as Chinese anyway. The same Observer Research Foundation analysis says the old formula of separating economics from security is getting harder to sustain. (orfonline.org 1) (orfonline.org 2) Beijing is also trying to use the Iran crisis to show it can act as a diplomatic broker without joining Washington’s military approach. An Associated Press report published April 23 said China has worked mostly behind the scenes, including humanitarian assistance to Iran and quiet diplomacy with regional parties. (apnews.com) Trump’s advisers have made clear that Iran is part of the broader U.S.-China conversation, not a separate file. Bloomberg reported on April 10 that U.S. Trade Representative Jamieson Greer warned China against moving closer to Iran, saying the relationship could become more complicated if Beijing hurt American interests. (bloomberg.com) By the time Trump arrives in Beijing on May 14, China will be trying to protect oil flows, preserve leverage with Tehran and limit fresh trade penalties all at once. The squeeze is strategic because each move on one front now affects the others. (abcnews.go.com) (al-monitor.com)