(Preview) What’s at Stake for China in Iran; Canada’s PM in Beijing; Notes on Chips, Apps, and Drones

Summary

Sharp China with Bill Bishop

(Preview) What’s at Stake for China in Iran; Canada’s PM in Beijing; Notes on Chips, Apps, and Drones

Date: January 15, 2026
Hosts: Andrew Sharp and Bill Bishop

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Episode Overview

In this preview episode, Andrew Sharp and Bill Bishop dissect the latest major US policy announcement from former President Trump: new 25% tariffs on countries doing business with Iran. They examine what’s at stake for China, the world’s top buyer of Iranian oil and a key player in Trump’s recent trade truce, and explore whether this signals a return to the US-China trade war. The hosts also reflect on the unpredictability of policymaking in Washington and the strategic calculations on both sides as the US looks ahead to midterms and Trump’s planned trip to Beijing.

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Key Discussion Points & Insights

1. Trump’s Surprise Tariff Announcement

• Donald Trump’s Policy: Trump abruptly announced a 25% US tariff on any country doing business with Iran, raising questions about potential impacts on China, the primary buyer of Iranian oil.

  • “Any country doing business with the Islamic Republic of Iran will pay a tariff of 25% of on any and all business being done with the United States of America.” – Reading from Trump’s post ([00:48])

• Lack of Policy Clarity & Coordination:

  • Bill Bishop highlights that the announcement appears to lack internal coordination:

    “There have been reports that the announcement surprised members of cabinet, including Secretary Treasury Bessant. … This went through a presidential thumb process…dictating to whomever actually writes his truth social posts.” ([02:00], [03:39])

  • The announcement’s scope, implementation, and real-world follow-through remain unclear in the days since.

2. Potential Impact on US-China Trade Truce

• Existing Truce: Trump recently negotiated a trade pause with Xi Jinping, granting the US access to rare earth minerals while China gained tariff relief.
• Stakes of “Stacking” Tariffs: Andrew presses on whether the 25% Iran-linked tariff would be added atop existing China tariffs, which Bill says would surely derail current understanding:

  “If this 25% tariff does get added on top of the existing tariffs on China, I mean that clearly violates the spirit of whatever we want to call the understanding they had in Busan, South Korea.” ([02:31])

• Odds of Actual Implementation: Bill’s assessment:

  “I think the odds are extremely low that they’re going to add that on top of the existing China tariffs because…they want to not upset the deal…the understanding, whatever you want to call it, that they reached.” ([02:55])

3. Political and Economic Calculus in Washington

• Show versus Substance: Both note a pattern of performative policymaking and social media-driven announcements, rather than coherent or well-planned strategy.

  “You’re assuming coherent policymaking. Again, it’s on me.” – Bill ([06:51]) “It doesn’t exist. At least around that.” – Bill ([06:58])

• Domestic Pressures:

  • Administration focuses on economic stability through November and the midterm elections.

    “They are extremely concerned about the midterm elections and they’re undertaking all sorts of policies designed to shore up Republican support before November, shore up the economy.” – Andrew ([05:15])

  • This would argue against risking economic tension with China.

4. China’s Leverage & Iranian Oil

• China’s Position: China buys about 70% of Iran’s oil, and its leverage over rare earths is a crucial bargaining chip.

  “China buys what, 70% or so of the Iran's oil. I mean, it’s not meaningless if China’s not included in that 25%, but it certainly is a lot less meaningful.” – Bill ([06:05]) “It just also shows how effectively scared they are of the leverage that China has around rare earths. And also Trump's desire for a positive, pageantry-filled trip to Beijing in April.” – Bill ([06:18])

• Domestic and Foreign Policy Tensions: The discussion underscores the administration’s competing objectives: tough rhetoric for domestic politics versus a quiet stance to preserve economic and diplomatic stability with China.

5. Uncertainty & Larger Implications

• The decision process shows little consistency, leaving uncertainty for markets and global diplomacy.
• Supreme Court expected to make a ruling on the legality of Trump’s tariffs, which could affect the broader US-China trade relationship.

  “There had been some talk that we might get the decision from the Supreme Court about whether or not his tariffs are legal. … That will have a broader impact on the China relationship.” – Bill ([04:24])

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Notable Quotes & Memorable Moments

• On US “thumb process” governance:

  “Presidential thumb process. Right. As he was, or dictating to whoever writes his truth social posts.” – Bill Bishop ([03:39])

• On the durability of the truce:

  “Back in November, we wondered how durable the trade truce would be and whether it would survive until Trump’s Beijing trip, let alone a full year as both sides planned.” – Andrew Sharp ([05:15])

• On China’s rare earth leverage:

  “It just also shows how effectively scared they are of the leverage that China has around rare earths.” – Bill Bishop ([06:18])

• On policymaking unpredictability:

  “You’re assuming coherent policymaking. Again, it’s on me.” – Bill Bishop ([06:51])
  “It doesn’t exist. At least around that.” – Bill Bishop ([06:58])

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Timestamps for Key Segments

| Time | Segment | |------------|------------------------------------------------------------------| | 00:24–02:00 | Trump’s new tariffs on countries trading with Iran; initial reactions | | 02:00–03:30 | Administration surprise and lack of internal policy process | | 03:30–06:05 | What happens if tariffs stack on existing China tariffs; assessment of odds | | 06:05–07:01 | China’s dominant position, rare earths leverage, and political priorities | | 07:01–07:49 | Reflections on policy incoherence and US-China relationship durability |

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Conclusion

This episode provides a timely breakdown of the new US tariff announcement targeting Iran’s trading partners, with a particular focus on China’s vital interests and Washington’s unpredictability. The hosts dissect the regional and domestic stakes, question the seriousness and durability of the policy, and underline how both electoral politics and global economic leverage shape ongoing US-China dynamics.

Transcript

[A]

Foreign. Welcome to Sharp China. I'm Andrew Sharp and you are listening to a free preview of today's episode.

[B]

Hello and welcome back to another episode of Sharp China. I'm Andrew Sharp and on the other line, Bill Bishop. Bill, how you doing?

[C]

I'm well, Andrew. Good to see you. And hi. Hello everybody.

[B]

Yeah, never a dull moment here, Bill. When we signed off last week, I said who knows what the world will look like next week. I'll be honest, I didn't anticipate quite as much upheaval within six or seven days as there appears to have been. But here we are. And we'll begin with a story from Bloomberg. Bloomberg writes Donald Trump's announcement of new tariffs on goods from countries trading with Iran risks derailing his one year trade truce with China, the world's top buyer of Iranian oil. Any country doing business with the Islamic Republic of Iran will pay a tariff of 25% of on any and all business being done with the United States of America. Trump posted on social media on Monday. The levy is effective immediately, he added, without elaborating on the scope or implementation of the changes or of the charges they write. Trump's threat, Bloomberg continues, comes months after he clinched a pact with Chinese President Xi Jinping at a summit in South Korea that paused tariffs and gave the US Access to rare earths. China dominates production of those minerals critical to making high tech goods and military weapons and had imposed export curves during their trade spat. So there are bigger picture questions about China and Iran, but first and foremost these tariffs would presumably be stacked on top of existing PRC tariffs under the Trump administration. What do you think? Is the trade war back on? You just shrugged on the other end of the zoom call here.

[C]

I mean this was one of those sounds like it was. I mean there have been reports that the announcement surprised members of cabinet, including Secretary Treasury Bessant. I think it's more of a trying again to govern by truth social without rather than actually having some sort of a coherent thought out policy. And so several days later still have no idea. I think if this 25% tariff does get added on top of the existing tariffs on China, I mean that that clearly violates the spirit of whatever we want to call the understanding they had in Busan, South Korea. Yeah, and everything else that the Trump administration has done has made it pretty clear that they want to be very careful about upsetting that deal and upsetting the flow of arrows and upsetting the prospects for a Trump visit to China in April. So again, I think the fact that there's been no clarification, no follow through probably means, I mean it's, it's not clear if the other countries have had these 25% tariffs applied either. But I think when it comes to China, I think the odds are extremely low that they're going to add that on top of the existing China tariffs because again, the Trump administration is doing everything it can to not upset the deal. The understanding, whatever you want to call it, that they reached with China, with Xi Jinping and China in South Korea.

[B]

And if these were stacked on top of existing China tariffs, it would almost certainly scuttle whatever was agreed upon in Busan. Right.

[C]

I mean, I think, yes. And again, I think the Trump administration has basically been at a standstill on almost all actions related to China since that deal. And so this again, I don't think this went through any sort of interagency process. I just think this went through a.

[B]

Feels right.

[C]

Presidential postage. Yeah. Presidential thumb process. Right. As he was or dictating to whomever actually writes his true social posts. You know, and again, it just he had also earlier on said that, you know, he would attack Iran if they shot protesters. Obviously the Iranians have shot a lot of protesters and still hasn't really done anything. And yeah. And I think there's frustration that he can't just get people to bow down because of what he posts on true.

[B]

Social media or because of what he threatens. Yeah, no, I mean it is interesting. Trump said this week he was in Detroit and he said if you're anti tariff, you're pro China. And of course he's citing Chinese threats in all his conversations about Greenland. So it's interesting to chart the administration's rhetoric on the PRC as it sort of ebbs and flows by the week.

[C]

And right now it's about 11am Eastern time on Wednesday here in D.C. and there had been some talk that we might get the decision from the Supreme Court about the whether or not his tariffs are legal. Nothing so far.

[B]

Clearly people were expecting it Friday as well. And it's right.

[C]

So we may not happen today. But again that's, I think, you know, that will have a broader impact on the China relationship because, you know, then the US Will have to add back maybe through like, like section 232, 3. There's other ways they can add these tariffs, but it's a tenuous understanding with China and that's why again, back to the year to what we started this conversation about. I just don't think that they're going to add 25% on China now over the Iran issue, because again, the Chinese have been pretty clear that that would be at a violation of the understanding.

[B]

Totally.

[C]

You want to call it.

[B]

And I mean, back in November, we wondered how durable the trade truce would be and whether it would survive until Trump's Beijing trip, let alone a full year as both sides planned. I think the administration right now, if you look at what they're doing domestically, they are extremely concerned about the midterm elections and they're undertaking all sorts of policies designed to shore up Republican support before November, shore up the economy. And in keeping with that strategy, I would expect them to be pretty invested in not inflaming tensions with China if they don't have to. But then by the same token, I just don't know how you announce that policy without understanding internally that China is the prime target. So maybe that's on me for trying to. Yeah, I mean, China strategy from true.

[C]

Social posts, China buys what, 70% or so of the Iran's oil. I mean, it's clearly, I mean, it's not meaningless if China's not included in that 25%, but it certainly is a lot less meaningful.

[B]

No kidding.

[C]

And it also just shows if the Trump administration follows through on this 25% tariff threat, but doesn't include China. It just also shows how effectively scared they are of the leverage that China has around rare earths. And also Trump's desire for a positive pageantry filled trip to Beijing in April.

[B]

Yeah, well, and economic stability through November is another priority for the administration. And that would all be an argument against making the threat earlier this week.

[C]

If you're again, you're, you're assuming, you're assuming coherent policymaking. Again, it's on me.

[B]

It isn't.

[C]

It doesn't exist. Yeah, okay. At least around that. So.

[B]

No, yeah, we've had 12 months of truth social post to, to teach me a lesson and I still haven't fully learned yet. Bigger picture.

[C]

We Met 1/4, 1/4 of the way through a second term of President Trump.

[B]

Yeah. And here we go. It feels like it's been four or five terms by now and we're not even to the one year anniversary. We mentioned last week that Iran was the ultimate wild card for the PRC and its interests abroad. As all of this plays out. Again, a completely fluid situation as we sit here recording at 11:15 on Wednesday. But just generally speaking, what sort of Chinese interests are at stake as the Iranian regime struggles to hold on to power here?

[A]

All right, and that is the end of the free preview if you'd like to hear the rest of today's conversation and get access to full episodes of Sharp China each week, you can go to your Show Notes and subscribe to either Bill's newsletter, Cynicism, or the Strathecary Bundle, which includes several other podcasts from me and daily writing from my friend Ben Thompson. I'm an incredibly biased news consumer, so I think both are indispensable resources, but either way, Bill and I are going to be here every week talking all things China, and we would love to have you on board. So check out your Show Notes, subscribe, and we will talk to you soon.