Hostage Swap

By Nick Catoggio

Wednesday, April 15, 2026

 

“What they have done is engage in this act of economic terrorism against the entire world,” J.D. Vance said of Iran on Monday. “They’ve basically threatened any ship that’s moving through the Strait of Hormuz.

 

Well, as the president of the United States showed, two can play at that game.”

 

To beat terrorists, we must out-terrorist them is a strange thing to hear from the second-highest-ranking official in the federal government. But it’s undeniably true to the spirit of Trumpism.

 

The “game” the U.S. military is now playing is a targeted blockade of ships entering or exiting Iranian ports. Iran has made it impossible for American allies to export oil through the strait so America is making it impossible for Iran to do the same. Hostage for hostage: With its cash cow cut off and its economy crippled, the regime will now hopefully have no choice but to capitulate and release its chokehold on Hormuz.

 

Under the circumstances, this move strikes me as uncharacteristically not-insane by the president and his team.

 

In the first place, it functionally accomplishes the same thing that an invasion of Kharg Island would have but without putting American troops in harm’s way. Instead of fighting a bloody ground battle to seize that island’s oil infrastructure, the White House has neutralized it from afar. Iran can keep processing crude, but that crude isn’t going anywhere.

 

And by one estimate, that could become a major crisis for the regime in as little as 13 days. Once it runs out of storage capacity for the oil it’s no longer exporting, it will need to begin shutting down wells, “which can cause severe damage and cost it billions of dollars in annual revenue” indefinitely. That would be a heavy blow to the Revolutionary Guard, which reportedly skims about half the proceeds of oil sales for its own uses.

 

Given the diplomatic posture of the current moment, the blockade also seems less likely to cause a new round of escalation than it would have, say, three weeks ago.

 

Iran’s military is talking tough, threatening to “completely block exports and imports across the Persian Gulf region, the Sea of Oman and the Red Sea” if the blockade isn’t lifted, but the country’s negotiators have quietly made notable concessions in talks with the U.S. According to the New York Times, they offered to suspend nuclear activity entirely for five years (the White House demanded 20), the kind of complete freeze that Barack Obama’s 2015 deal with Tehran failed to secure. And they’re willing to dilute the enriched uranium that’s momentarily buried under rubble at sites like Isfahan, rendering it—temporarily—unusable in a bomb.

 

It’s uncharacteristically not-insane of the White House, I think, to believe that economic hardball paired with the olive branch of a ceasefire might nudge the regime toward further concessions aimed at ending the conflict rather than away from them.

 

One can even begin to imagine what the endgame of the war might look like. Both sides agree to free their hostages, with Iran reopening the strait and the U.S. ending its blockade. Some sort of middle ground on a nuclear freeze (10 years?) is reached. And the White House agrees to release billions of dollars in frozen Iranian funds to help with “rebuilding,” which it may or may not already be willing to do. Numbers being kicked around by Iran range from $6 billion to $27 billion, dwarfing the $1.7 billion involved in Obama’s infamous “pallets of cash” deal.

 

It is very much not not-insane that a war fought for regime change and denuclearization might end with us paying a fat bribe to an enemy that’s more fanatic than it was six weeks ago, but it’s also the least bad plausible outcome at this point. Call it the art of the deal.

 

Hopefully the blockade will get us there sooner rather than later. There is one wrinkle to consider, though: What about China?

 

Beijing’s leverage.

 

Our blockade is primarily directed at Iran, of course, but secondarily at Beijing.

 

That’s because China has a near-monopsony on Iranian crude, purchasing more than 80 percent of the country’s annual output. Xi Jinping’s government has stockpiled reserves to last at least three months, so there’s no near-term danger of a Chinese oil shock. But a long embargo in the strait would eventually bite a nation that gets more than 13 percent of its oil by sea from Tehran.

 

And it would sharply raise the risk of a confrontation between the United States and China, needless to say. If Chinese tankers try to run the blockade, the U.S. Navy will be forced to intercept them.

 

Beijing isn’t thrilled about it. “Dangerous and irresponsible,” China’s foreign ministry called the White House’s new tactical gambit on Tuesday. Xi himself scolded certain unnamed nations about reverting to “the law of the jungle” abroad, warning that “to maintain the authority of international rule of law, we cannot use it when it suits us and abandon it when it doesn’t.” That appeared to get the president’s attention. “China is very happy that I am permanently opening the Strait of Hormuz,” Trump wrote this morning, not very convincingly. “I am doing it for them, also - And the World.”

 

He claimed to be “working together smartly, and very well” with the Chinese—before ending with this: “BUT REMEMBER, we are very good at fighting, if we have to - far better than anyone else!!!” Considering the degree of strategic deftness he’s demonstrated with Iran, I’d lay the odds of nuclear war with China before the month is out at, let’s say, 65 percent.

 

More seriously, though, there’s an uncharacteristically not-insane case for believing that dragging China deeper into this war might accelerate the endgame, not escalate it.

 

Beijing was already nervous about Iran’s stranglehold on the strait. Sure, Iranian oil was still safely making its way to China, but an economic slowdown driven by soaring gas prices across the rest of the world is very bad news for an economy that depends as heavily on exports as theirs does. So when the U.S. reached out to the regime proposing peace talks as Trump’s deadline to, er, end Iranian civilization approached, the Chinese reportedly told their Iranian counterparts that it was time “to show flexibility and defuse tensions” by taking the off-ramp. Which those counterparts dutifully did.

 

The strategic math here isn’t complicated. China has an enormous amount of leverage over the regime, economically and militarily, and will doubtless gain more after the war as Iran seeks help from its patrons in rearming and rebuilding. By exerting our own naval leverage over Chinese oil imports, the U.S. is pressuring Beijing to use its influence over Iran to force a peace settlement—i.e., getting it to reopen the strait so we can get the hell out of there.

 

Risky! But not insane. The Revolutionary Guard might be willing to destroy the global economy in the name of defying America, but China is not.

 

Xi might even see value in playing peacemaker. China would enhance its prestige by settling a conflict that American military might have started yet failed to solve, a feather in Beijing’s cap with the president scheduled to visit next month. Much of the world has already concluded that being led by Chinese totalitarians is preferable to being led by a depraved, predatory America; cleaning up Uncle Sam’s mess in Iran and ending a frightening economic crisis in the process would only grow that number.

 

I did not expect to live long enough to see communism semi-plausibly sell itself as the sober, stable alternative to what the West has got cooking, but here we are. Congratulations to postliberals on an almost unimaginable accomplishment.

 

A scenario in which China helps broker peace in Iran before any civilization-ending occurs isn’t an entirely happy one, though. Xi will expect something in return for bailing the president out of the momentous economic and political jam in which the Hormuz standoff has ensnared him.

 

And we can all guess what that something might be.

 

The price of peace.

 

We don’t need to guess, actually. Sources close to China’s leadership told the Wall Street Journal last month that Taiwan is on the menu when Xi and Trump meet in May.

 

“Xi sees Trump as unwilling to come to Taiwan’s defense, the people said—especially if America’s involvement in the Middle East, which has led the U.S. to redirect major military assets away from Asia, continues to distract Washington,” the paper reported. “Xi is working under the assumption that, while Washington still supports Taiwan, Trump’s attitude toward the island is so uncertain that he has an opening.”

 

He does have an opening. As a candidate in 2024, Trump complained, “Taiwan should pay us for defense.” Once back in office, he halted military aid to the island more than once. He accused the Taiwanese of having “stolen our chip industry” as recently as February, and he blitzed them last year with a 32 percent tariff, which he reduced only after squeezing their government to pledge hundreds of billions of dollars in investments in the U.S. and credit for Taiwanese businesses to follow suit.

 

That’s not the stuff of which sturdy alliances are made.

 

As a rule, postliberal America doesn’t do sturdy alliances anymore. That’s another reason Xi has to suspect Trump might be willing to abandon Taiwan: Someone who hints daily about quitting NATO and whose vice president boasts about his pride in weakening Ukraine’s ability to defend itself from Russian degeneracy clearly isn’t someone who will feel pulled by tradition to protect a longtime ally for whom he has little regard.

 

But the reality is even worse than that. In case you hadn’t noticed, the president has gone from being an outspoken China hawk during his first run for office to a China accommodationist in his second term.

 

No one should find that surprising, as postliberals obviously see more to admire than abhor in how Chinese totalitarians conduct business—and it was always preposterous to pretend otherwise. Trump’s grievances against Beijing were and are entirely grounded in protectionism, a matter Taiwanese sovereignty has little to do with. Now that he’s no longer accountable to Congress, the American electorate, or, really, anyone, he’s dropped the facade of treating China as an enemy and begun to approach it as a potential partner for “deals.” From the Wall Street Journal:

 

Since Trump met with Chinese leader Xi Jinping in the South Korean city of Busan in October, the administration has paused hefty tariffs planned on Beijing’s most prized industries; abandoned plans to penalize Chinese companies determined to be security risks to the U.S.; curbed investigations into Beijing-linked hackers; waved through Chinese investment in the U.S. with little scrutiny; and told officials to tone down their comments on China, current and former U.S. officials familiar with the changes said.

 

He went as far as having a draft of the National Defense Strategy rewritten because it cast China, accurately, as the top security threat facing America, according to the Journal. “President Trump seeks a stable peace, fair trade, and respectful relations with China,” the revised version read.

 

That sure does sound like a man who’s willing to hear Xi out about a new understanding on Taiwan—and Xi probably had it in mind when China leaned on Iran to accept the White House’s invitation for a ceasefire. “Beijing’s diplomacy is designed to send a message to the White House,” one former senior national-security official told the Journal. “If China can be reasonable on the Taiwan Strait and the Strait of Hormuz, Trump should be equally supportive of issues of paramount interest to China.”

 

There’s no interest more paramount than Taiwan. At next month’s summit, the Chinese will likely ask for slight semantic changes to U.S. policy that mean little to the average joe but hold great symbolic importance diplomatically. If they want the White House to say it “opposes” Taiwanese independence instead of “not supporting” it and favors “peaceful reunification” rather than “peaceful resolution,” it’s hard to believe that our deal-minded yet not very detail-oriented president will drive a hard bargain about it.

 

A guy who went from calling Iranian leaders “deranged scumbags” to wanting to turn control of Hormuz into a “joint venture” with them in the span of a few weeks is more than capable of deciding that communist China is a worthier ally for the United States than liberal Taiwan. It’s bigger, wealthier, more powerful, and more ruthless: To a mind like his, what possible argument to the contrary could there be?

 

Successful Chinese mediation to end the Iran war before Trump and Xi meet would be the icing on the cake, earning the president’s favor and incentivizing him to make concessions to Beijing in case its help is needed again someday to make Tehran behave. All Xi would have to promise to get some U.S. cooperation on Taiwan, I think, is that if “reunification” happens—peacefully or otherwise—the semiconductors on which the U.S. heavily relies will continue to flow across the Pacific.

 

And if the great Taiwan sellout does happen, I doubt there’ll be much of a fuss domestically. Ironically, the president’s unpopular Middle Eastern adventure has likely sapped whatever will the public may have had to use military force to contain our foremost international rival. Americans will be in no mood anytime soon for a conflict with a behemoth like China, with all the death and economic misery that promises.

 

Think of the potential deal at May’s summit as a sort of hostage swap, then: In exchange for the Iranians agreeing to release the strait, we tacitly agree to hand over Taiwan. There may be some question whether Xi has enough juice with Iran, and enough will to use it, to make that happen. But there’s no question, I think, that Trump will be receptive if he can.