Last year, Xi Jinping played the rare earths card, forcing Donald Trump to slow his roll on decoupling from the Middle Kingdom. This year, Trump played the oil card against China—first in Venezuela, then in Iran—and he just slapped it on the table again in Indonesia. Their summit in Beijing next month was already looking like a tense affair, especially with the U.S. holding significant leverage over Venezuela and the Navy taking charge of the Strait of Hormuz.
Until recently, both of those nations served as Beijing’s reliable sources of discounted oil. Today, Xi might be asking, “Et tu, Indonesia?” if he spoke Latin, that is. It probably seemed like one of those dry, bureaucratic announcements on Monday when War Secretary Pete Hegseth posted on X that the U.S. and Indonesia are elevating their relationship to a ‘Major Defense Cooperation Partnership.’
I can almost hear you yawning already. The joint statement mentions military modernization, professional education, and operational cooperation—the usual alphabet soup of defense-speak. But don’t let the dull language fool you; this is a massive shift aimed squarely at China’s energy supply lines. Nearly two-thirds of China’s raw materials and 80% of its energy imports pass through the Strait of Malacca. The smell of salt air and high-stakes diplomacy hangs heavy over these waters.
China’s reliance on this choke point is, well, it’s a vulnerability they can’t hide. While Beijing and Jakarta maintain a strategic partnership, the relationship is frayed by Beijing’s aggressive claims in the South China Sea and those pesky fishing fleets that keep intruding on Indonesian territory. Enter Washington. Unlike China, the U.S. isn’t sending out fleets to poach fish or claim islands, and that matters.
Honestly, China has become so aggressive that its neighbors should be gravitating toward Washington like iron filings to a magnet. It really took some significant displays of weakness—thanks, Obama and Biden—for countries like Indonesia to drift into Beijing’s orbit in the first place. This new partnership isn’t quite a formal alliance, but it allows both nations to act like allies if things ever get hot. We get military overflight access, and they get better training and weapons access. It’s a pragmatic arrangement, or maybe a calculated one.
Rare earths aren’t actually rare, despite what Beijing wanted us to think last year. The U.S. has plenty of deposits; we just outsourced the processing. We’re fixing that now. When Trump and Xi finally sit down in May, the power dynamic will have shifted quite a bit since 2025. It’s hard to see this new deal as anything other than another brick in the wall Trump is building around China. Or maybe it’s the whole wall. It’s definitely something.