Beijing’s brokering of a historic peace deal between Iran and Saudi Arabia last year marked a significant shift in China’s engagement with the Middle East. The agreement was seen as a landmark achievement, positioning China as a mediator in one of the world’s most volatile regions.

For Tehran, facing economic and geopolitical pressure from the Biden administration, the deal was a diplomatic breakthrough. It also offered a chance to reduce isolation with Beijing’s support.

However, the recent overthrow of Bashar al-Assad in Syria and the setbacks faced by Hamas and Hezbollah in their conflict with Israel have fragmented Iran’s regional influence. These developments, coupled with growing threats from Israel, pose significant challenges to Tehran’s strategic position.

Experts suggest that the return of a hawkish U.S. administration under Donald Trump could strengthen the China-Iran alliance. Shared pressures may push both nations toward closer cooperation, reshaping the region’s diplomatic dynamics.

Chinese analysts caution, however, that Beijing’s ability to sustain its mediation role may be at risk. Rising tensions between Tehran and other regional powers could jeopardize the peace China’s diplomacy has fostered. Such conflicts would not only test Beijing’s influence but also challenge its long-term strategic interests in the Middle East.

Fan Hongda, a professor at the Institute of Middle East Studies at Shanghai University of International Studies, notes that U.S. pressure on Iran is unlikely to wane. “Coupled with Israel’s strikes and the destruction of Iranian-backed forces such as Hamas and Hezbollah last year, this will compel Iran to favor closer cooperation with other powers, including China and Russia,” Fan remarked.

Iran’s economic woes date back to the Trump administration’s withdrawal from the Iran nuclear deal and the imposition of stricter sanctions under the “maximum pressure” campaign. These sanctions continue to hinder Tehran’s economy, influencing its strategic partnerships and regional policies.

The Biden administration announced a new trade investigation on Monday, focusing on Chinese-manufactured “old generation” semiconductors. This move could lead to additional U.S. tariffs on chips that power everyday products such as cars, washing machines, and telecom equipment.

The Section 301 investigation, initiated just four weeks before President-elect Donald Trump is set to take office on January 20, will be handed over to the incoming administration for completion. This investigation may serve as a foundation for Trump’s proposed 60% tariffs on Chinese imports.

In his final weeks, outgoing President Joe Biden imposed a 50% tariff on Chinese semiconductors, effective January 1. Additionally, his administration implemented stricter export restrictions on advanced artificial intelligence (AI) chips, memory chips, and chip manufacturing equipment destined for China. Tariffs on Chinese solar panels and polysilicon were also increased to 50%.

The Office of the U.S. Trade Representative (USTR), which oversees the investigation, stated the goal is to safeguard market-oriented chip manufacturers from the surge in China’s domestic chip production.

U.S. Trade Representative Katherine Tai emphasized that Beijing’s aggressive policies target global dominance in the semiconductor industry. She compared these efforts to China’s expansion in sectors like steel, aluminum, solar panels, electric vehicles, and critical minerals.

“This allows Chinese companies to rapidly increase production capacity and offer artificially low-priced chips, harming or potentially eliminating their market-driven competitors,” Tai explained.

The Biden administration has invited public comments on the investigation starting January 6, with a public hearing scheduled for March 11–12. However, it remains unclear if Trump’s nominee for USTR head, Jamieson Greer, will secure Senate confirmation before the hearing.

The investigation falls under Section 301 of the Trade Act of 1974, a statute invoked by Trump in 2018 and 2019 to impose tariffs of up to 25% on approximately $370 billion worth of Chinese imports. The resulting trade war with Beijing lasted nearly three years.

If Trump inherits the investigation, it must be concluded within a year of its launch. The scope includes both imported chips and their use in critical industries like defense, automotive products, and medical devices. The inquiry will also target China’s production of silicon carbide substrates and wafers essential for semiconductor manufacturing.

US Secretary of Commerce Gina Raimondo revealed disturbing findings from her department’s research: Two-thirds of US products that rely on chips use older-generation chips made in China. Half of US companies, including those in the defense sector, do not know the origin of their chips.

“These findings are very troubling,” Raimondo said, adding, “This undermines U.S. companies and increases dependency on China for critical components.”

Despite partisan divides, China tariffs represent a rare area of alignment between the Biden and Trump administrations. Biden upheld all tariffs imposed during Trump’s tenure and even expanded them. For example, he imposed a 100% tariff on Chinese-made electric vehicles (EVs), effectively barring their entry into the U.S. market.

U.S. President-elect Donald Trump asserted on Saturday that the Panama Canal imposes “exorbitant prices and tolls” on U.S. Navy and merchant ships, threatening to demand its return if the fees are not reduced. His comments, shared on the Truth Social platform, reignited debates over the canal’s strategic and economic significance.

“The fees charged by Panama are ludicrous, especially given the extraordinary generosity bestowed on Panama by the United States. This complete ‘theft’ from our country will be stopped immediately,” Trump stated.

The United States, the canal’s largest customer, accounts for approximately 75% of its annual cargo transit. However, prolonged droughts have disrupted operations, exacerbating supply chain challenges. National Economic Council Director Lael Brainard linked these disruptions to inflationary pressures in a statement last week.

Despite its financial contributions, the Panama Canal Authority reported a $2.47 billion contribution to Panama’s treasury in fiscal 2024, marking a consecutive annual decline. Deepwater transits also dropped by 21% in 2024 compared to 2023 due to water conservation measures.

Built by the U.S. and completed in 1914, the 51-mile-long canal was handed over to Panama in 1999 as part of a 1977 treaty signed by President Jimmy Carter—a move Trump called “stupid.”

Trump raised concerns over the canal “falling into the wrong hands,” implying Chinese influence. China is the second-largest user of the canal, and a Hong Kong-based company manages two of the five ports on its flanks. Panama severed diplomatic ties with Taiwan in 2017 and established relations with China, further solidifying Beijing’s economic footprint in the country.

“It was not given for the benefit of others, but only as a demonstration of cooperation between us and Panama,” Trump declared, urging Panamanian authorities to respect the canal’s original intent.

Panama President José Raúl Mulino dismissed Trump’s claims, reaffirming that the Panama Canal and its adjacent areas remain under Panamanian sovereignty. “The sovereignty and independence of our country are non-negotiable,” Mulino asserted.

He defended the canal’s fee structure as being market-driven and aligned with operational and modernization costs. The canal remains a critical economic engine for Panama, contributing billions annually. Its fees are based on metrics such as tonnage and vessel capacity. For instance, Panamax-class container ships with a capacity of 2,500 TEU pay $172,000 empty and $247,000 full, and Neopanamax vessels with a 12,000 TEU capacity pay between $622,000 and over $1 million, depending on cargo.

The unit cost per ton is projected to decrease from $11.79 in 2024 to $10.63 in 2025, according to official estimates.

While Trump advocates for renegotiation, Panama continues to strengthen ties with China. Discussions on a trade agreement, stalled since 2018, may resume in 2025, signaling the deepening influence of Beijing in the region.

However, Mulino rejected allegations of foreign control, stating, “Neither China, nor the European Community, nor the United States, nor any other power has any direct or indirect control over the canal.”

During his campaign, Mulino emphasized cooperation with the U.S. on migration issues, including closing the Darién Corridor—a key transit point for migrants heading to the U.S.