Trump Has China Cornered

In a strange turn of events, the US became the one blocking oil shipments in the Persian Gulf. This wasn't just another plan to take down the Iranian regime. The real target was China. And it worked. Welcome to America Uncovered, I'm Chris Chappell. This episode is sponsored by Incogni. You probably know that companies are collecting your personal data, but you may not realize just how many. Dozens, maybe hundreds, most of which you've never heard of. And you have no idea what they're doing with it. Incogni helps stop them. I'll explain more at the end. So here we are, back in the Strait of Hormuz, Iran's economic lifeline to the world and the shipping lane through which roughly 20% of the world's oil supply passes. For decades, Iran threatened to close the Strait should any power try to overthrow the regime. Shutting down a fifth of the world's oil shipment was the nuclear option. Like, the metaphorical nuclear option, not the other one. But Trump understands the game being played here. And I'm not talking about 4G chess. I'm talking about the real Game of Kings. UNO! Trump just played the reverse card. In a surprise twist, the US Navy began its own blockade of Iran's ports. On Tuesday, US Central Command announced a blockade of Iranian ports has been fully implemented, noting that around 90% of Iran's economy is fueled by international trade by sea, and that US forces have completely halted economic trade going in and out of Iran by sea. But that blockade was short-lived. In a Truth Social post the next day, Trump said, China is very happy that I am permanently opening the Strait of Hormuz. I am doing it for them, also, and the world. This situation will never happen again. They have agreed not to send weapons to Iran. President Xi will give me a big fat hug when I get there in a few weeks. So what was the plan here? Obviously, choking off Iran's oil does serious damage to their economy. But is that enough to starve out the regime? Maybe, maybe not. Ultimately, it doesn't matter because this blockade wasn't about Iran. It was about China. And Beijing knew it. The CCP was quick to respond to the US blockade, calling it irresponsible and dangerous. With Xi Jinping himself saying we must not allow the world to revert to the Law of the Jungle. Oh come on, Xi, how can you be that naive? Just about any Chinese person could tell you the universe is a dark forest. And there are forces lurking out there that will boggle your mind and chill your soul. China! One sanctioned Chinese tanker even attempted a breakout during the blockade, but was forced to make a U-turn and go back. And this creates an absolute nightmare for Chinese ships and for the CCP. China is the factory of the world. Those factories need fuel. So does their agricultural sector. And of course, their military. Add on to the fact that China imports around 70% of its oil. That dependency on foreign imports is China's greatest weakness. And in the case of Iran, China is their biggest customer by far, snapping up 90% of the country's oil exports. But that source is no longer secure. If the blockade continued, it meant Iran would have had to cut back on drilling. That's because Iran only has two weeks before running out of storage capacity. And not restricting output risks inflicting long-term damage on the country's oil reserves. So the longer a blockade went on for, the more of Iran's oil has to be shut down. And that's to say nothing of the rest of the Strait. Tanker captains and their insurance providers have been pretty nervous about sailing through the contested waterway. Plus, earlier in the war, Iran ceded the area with naval mines, and since they don't really have a navy anymore, it'll be up to the US to go out and find them. That is, assuming Trump even wants them out. But Chris, you're asking, couldn't China just get its oil someplace else? Well, let's zoom out a bit and look at some of the world's other big producers. For example, China's no-limits partner, Russia. Ukraine has been running a systematic campaign against Russian oil infrastructure since early 2024. These aren't just a few lucky one-off strikes, but a methodical, planned effort to dismantle Russia's energy export capacity piece by piece. Over the last two years, Ukraine has launched an estimated 61 drone strikes on Russian oil refineries, plus countless more on storage depots and pumping stations, with at least 40 of those strikes resulting in fires or lasting damage. Now this isn't to say Russia's oil sector is about to collapse. But if Ukraine keeps fighting, and those refineries keep taking hits? Well, as the Carnegie Endowment so poetically describes it, Russia's oil refineries are a bit like a man who is being repeatedly punched. He will not die from one punch, or even half a dozen punches. But it becomes harder and harder for him to recover after each subsequent blow. Although no single punch is fatal, he could end up being beaten to death. So if Iran got cut off and Russia is bleeding, does China have any other friends who could spare a cup of crude? Venezuela is a no-go ever since Nicolas Maduro got dragged off to a New York courthouse. And most of the other large producers, like Canada and the Gulf states, are pretty firmly in America's sphere. So it's easy to imagine that they could be convinced to cut shipments to China in the event of, oh I don't know, an invasion of Taiwan resulting in World War 3. But honestly, even if those countries did choose to keep shipping oil to China, it might not even matter. I want you to look at this map. This is the route for oil tankers as they head to China and the rest of Asia. Now you see that narrow little choke point between Indonesia and Malaysia? That's the Strait of Malacca. Around 80% of China's oil passes through that small corridor. At its narrowest point, it's less than 2 miles wide. It is, effectively, China's jugular. And guess what just happened? On Monday, the US and Indonesia just signed a major defense partnership, meaning the two countries will work together to build up their military capacity, hold joint training and exercises, and cooperate for maintaining peace and stability in the Indo-Pacific. Huh, I wonder who that's for. Anyway, if the US and Indonesia are military partners, the US effectively has a hand on every major valve in China's energy pipeline. And you know what's crazy? China saw this coming more than 20 years ago. In 2003, at a Chinese Communist Party economic work conference, then-Chinese leader Hu Jintao stood up and talked about what he called the Malacca Dilemma. He warned that the Malacca Strait creates a potential choke point critical to the economy and hence to the security of China. And that certain powers have all along encroached on and tried to control navigation through the strait. I gotta say, Hu was right. But he and the rest of the CCP just couldn't stop it. As a matter of fact, China has spent the last two decades trying to dig its way out of the Malacca Dilemma. Pipelines through Myanmar, the China-Pakistan Economic Corridor, maybe even a canal through the Thai Isthmus. But it just doesn't even come close to replacing what goes through Malacca. The math just doesn't work. Chinese oil demand has grown from around 4.7 million barrels per day in 2000 to over 16 million barrels today. No pipeline can carry that. China needs Malacca to stay open. What we're seeing is the exact same playbook the United States used against Imperial Japan during World War 2. US oil embargoes starved Japan of resources. As a result, Japan made a desperate lunge for Southeast Asian oil fields that ended at the Battle of Midway and Guadalcanal. Now of course, China is a much scarier opponent than old Imperial Japan ever was. Back then, the US could make ships and planes and bombs at a scale Japan could only ever dream of. But China's a different beast. They've invested staggering sums of money into the People's Liberation Army over the past two decades. China's navy has more ships than the US Navy by hull count, and its shipbuilding capacity dwarfs America's. Its missile arsenal is vast and sophisticated and grows larger by the day. In a straight-up naval slugfest in the South China Sea, in Chinese home waters, against Chinese missiles and Chinese numbers, that is not a fight the US wants to have. So in the event that China does finally make that lunge for Taiwan, the US knows exactly what to do. Shut down the oil. Starve the PLA. Draw China's navy out from the safety of their well-defended coastline, and finish them. When you can't fight your enemy's strengths, you attack their weaknesses. And America has spent the last several years quietly and methodically executing that plan. But will it work? China's strategic petroleum reserves buy them time. Estimates put that at somewhere around 90 days of supply. That sounds like a lot, but it isn't. Not for a war. And not for an economy running at 16 million barrels a day. The longer a war lasts, the worse things get for China. As reserves draw down, industry starts to falter. Transportation networks, which move food across one of the most populous nations on Earth, get strained. Agriculture, which depends on diesel for machinery and fertilizer yield, takes a huge hit. This is where the math becomes very dark very fast. China feeds 1.4 billion people. It does so with a modern, mechanized agricultural system that runs on oil. Disrupt the oil, and you don't just slow the economy. You start unraveling the logistics of feeding all those people. The end result is a famine, one to rival the Great Leap Forward. You'd hope that a disaster at that scale would make the CCP think twice about ever starting a war in the South China Sea. But unfortunately, history tells us that they don't put too much stock into human life. Regardless, the US is getting ready for that war, which may be just over the horizon. From Venezuela to Iran to Russia's burning refineries to the Strait of Malacca, Trump has his finger on the switch, and he just reminded China of the US military's strength while working with them. But remember, we are very good at fighting, if we have to, far better than anyone else. So Trump got China to abandon sending weapons to Iran and has threatened their oil supply. What he will do next is anyone's guess. And China is left scrambling. And this episode is sponsored by Incogni. One time, I got a text from Amazon prompting me to log in and change my password. It was so convincing, I nearly logged in using their fake link. I was seconds away from disaster. 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