The China in MENA Special Brief — Tariffs
U.S. Tariffs, China’s Messaging, and the Middle East’s Growing Stakes
This brief examines how China is using the Middle East to frame U.S. tariffs as a global threat, leveraging Gulf narratives to counter U.S. pressure and shift trade perceptions.
1. Beijing Strikes Back from Riyadh
China is mounting a sharp diplomatic offensive against the latest U.S. tariff hikes, framing them as unilateral, abusive, and globally destabilizing. At a media roundtable in Riyadh, Minister Counselor Ma Jian warned that Washington's escalation risks “serious harm” to global supply chains and deepens inequality between developed and developing economies.
The U.S. this week paused tariffs for all partners except China, pushing duties on Chinese goods to 125%, hours after Beijing hiked its own tariffs on U.S. products to 84%.
In pointed language, Ma accused the U.S. of “economic bullying,” calling the moves a “weaponization of tariffs” aimed at reshaping the global order around American exceptionalism.
Strategic Takeaways:
Message Discipline: China is sticking to a script built around mutual benefit, peaceful deliberation, and WTO principles—positioning itself as the rules-based actor amid U.S. disruption.
Global South Signaling: The Riyadh venue is no coincidence. Beijing is amplifying its message in emerging markets, warning that U.S. actions widen North-South trade imbalances.
Systemic Framing: Chinese officials aren't just contesting tariffs—they’re accusing the U.S. of dismantling multilateral trade norms to serve hegemony. The goal is to isolate Washington diplomatically, not just economically.
Red Lines Clarified: While calling for dialogue, Beijing has publicly affirmed it will “respond to the end” if provoked. This sets a ceiling on U.S. leverage and suggests retaliatory cycles are far from over.
2. As U.S. Hits China, India and UAE Forge New Bloc in Sri Lanka
India and the United Arab Emirates have signed a landmark deal with Sri Lanka to jointly develop an energy hub on the island’s eastern coast. Announced during Prime Minister Narendra Modi’s visit—his first since Anura Kumara Dissanayake assumed the presidency—the agreement is both economic and symbolic: a signal that Beijing’s grip on Colombo may be loosening.
The UAE’s Expanding Footprint
Long a commercial powerhouse, the UAE is now asserting itself as a strategic player in the Indian Ocean. Its partnership with India in Sri Lanka is part of a broader Gulf-Asia corridor strategy, leveraging capital, connectivity, and clean energy to anchor influence across key maritime chokepoints.
While China focuses on hard infrastructure through its Belt and Road Initiative, the UAE brings a nimble, finance-driven model—faster, less intrusive, and increasingly aligned with India’s regional ambitions.
Sri Lanka: From Debt Trap to Diversification
Beijing’s earlier dominance in Sri Lanka came with visible costs. Projects like the Hambantota Port, funded by Chinese loans and ultimately leased to a Chinese operator, triggered public backlash and sovereign debt strain. That experience has left Colombo more cautious—and open to partners who offer infrastructure with fewer strings.
The UAE-India deal reflects that pivot: energy security, not just shipping lanes; regional integration, not just foreign debt.
Strategic Takeaways:
Tripolar Momentum: The India-UAE-Sri Lanka energy hub is more than a project—it’s a template. A Gulf-South Asia strategic axis is taking shape, offering alternatives to Chinese dependency.
Energy as Leverage: By anchoring infrastructure in Sri Lanka, the UAE and India gain a strategic foothold in Indian Ocean energy flows, undercutting China’s earlier investments.
Messaging vs. Movement: China’s public condemnations of U.S. tariffs position it as a defender of the global order. But in key regions like South Asia, its real challenge is the erosion of trust—and the rise of agile coalitions offering less polarizing paths.
3. Crude Reality: China’s Refiners Struggle as U.S. Pressure Bites
China’s independent oil refiners—known as “teapots”—have marginally raised run rates in recent weeks, but the sector remains constrained by a tightening mix of tepid domestic fuel demand and escalating U.S. economic pressure.
While refinery utilization in Shandong has edged up, analysts warn that tepid domestic fuel demand and sanctions-related supply risks continue to weigh heavily. The sector’s structural fragility underscores a broader vulnerability: China’s oil appetite is becoming a casualty of the tariff war and shifting trade dynamics.
Independent refiners account for nearly 90% of Iranian oil imports into China, but growing U.S. scrutiny—especially the recent blacklisting of Shouguang Luqing Petrochemicals—has chilled new purchases. This comes as the White House raises tariffs on Chinese goods to 125%, signaling a willingness to escalate on multiple fronts simultaneously.
Strategic Takeaways:
Energy Meets Trade War: The U.S. tariff regime is no longer isolated to tech and goods. By tightening sanctions on oil-linked actors, Washington is extending pressure into China's energy arteries.
Muted Demand Signals: Tepid fuel consumption at home—especially in freight, industrial, and mobility sectors—is compounding teapot woes. If run rates remain suppressed, China's overall crude demand could dip, adding bearish momentum to global markets already on edge over tariff-driven recession risks.
Strategic Messaging vs. Economic Reality: While Chinese diplomats condemn U.S. tariffs as “abusive” from podiums in Riyadh, on the ground in Shandong, the pressure is real. Refiners are caught between geopolitical friction and declining margins.
Oil Markets in Flux: As U.S. and China lock horns over trade, oil markets are caught in the crossfire. With Iran-linked flows under threat and Chinese demand uncertain, volatility is set to persist.
4. China’s Subtle Offensive: Using the Middle East to Reframe the Tariff War
In a swift response to the United States’ April 2 announcement of sweeping new import tariffs—including a universal 10% duty and additional “reciprocal” levies targeting specific nations like China—Beijing has moved to reframe the conflict as a global economic threat, not just a bilateral dispute.
Less than 24 hours later, China Daily published a strategically timed article warning that Gulf Cooperation Council (GCC) nations could face indirect fallout from the U.S. trade war. While presented as economic commentary, the piece serves as calculated messaging: by highlighting risks to oil prices, budget deficits, and rising consumer costs in the Middle East, Beijing is using soft-power media channels to internationalize its narrative.
The underlying message is clear—U.S. tariffs are not just punitive toward China, but destabilizing for global partners, especially oil-dependent economies. By speaking through regional economists and avoiding overt confrontation, China is subversively recruiting the Gulf into its broader effort to diplomatically isolate Washington and reframe the U.S. as the aggressor in a global economic disruption.
Strategic Takeaways:
Middle East as Narrative Theater: Beijing understands the Middle East isn’t just a trade partner—it’s a messaging platform. By pushing warnings through China Daily’s Gulf coverage, China is signaling to GCC elites that U.S. policies threaten their economies, too, especially through energy markets and import inflation.
Soft Alarmism, Not Confrontation: The article leans on local voices—economists from Bahrain and Dubai—to lend credibility to the claim that the U.S. tariff regime may hurt regional consumers, increase deficits, and trigger oil price instability. The tone is subtle, but the implication is loud: U.S. policies are destabilizing, and China sees it coming before you do.
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