I was welcomed onto David Lin’s Podcast, “The David Lin Report” to talk about Gaza, the Middle East and the US-China rivalry. Embedded video and transcript below.
He describes it this way:
The David Lin Report! I’ll be reporting on the most impactful market-moving events, as well as interviewing experts in finance, economics, science, and technology.
Will Trade War Go Nuclear? What's Next After Latest Escalations | Juan Cole
Transcript:
Interview: Juan Cole on Gaza, U.S. Policy, and the Future of the Middle East
Host (David Lin):
We’re talking about a potential peace in the Middle East with our next guest, Professor Juan Cole. He’s a professor of history at the University of Michigan and the editor-in-chief of Informed Comment. Will the ceasefire in Gaza last? We’ll find out. Professor, welcome to the show. Good to see you.
Juan Cole:
Likewise, David.
David Lin:
Let’s walk through what happened in the last week. There was a ceasefire brokered. Both sides—Israel and Hamas—agreed to exchange the bodies of hostages. What’s happened so far? Let’s give our audience a recap before discussing what may come next.
Juan Cole:
This horrible situation in Israel and Palestine has been going on for two years, with intense Israeli bombardment of Gaza and the destruction or damage of about 80% of its buildings and infrastructure. Since April there’s also been a blockade on food and medical aid. The United Nations has declared it a famine, and many observers have called it a genocide.
The United States could have stopped it at any moment, since Israel depends heavily on the U.S. for munitions resupply. In essence, Washington was a silent partner in this war.
The Trump administration eventually decided the time had come to end it, though it could have been ended long before -— during the Biden administration, for instance. The main obstacle to peace has been Prime Minister Benjamin Netanyahu and the extremists in his cabinet, who haven’t achieved their maximalist goals. Netanyahu himself is under indictment for corruption, and remaining in office protects him. The war has kept him in power.
Trump, however, grew dissatisfied with Netanyahu’s constant stalling. He reportedly told him, “I don’t know why you’re negative -— this peace deal is a win for you. Take it.”
Or by check:
Juan Cole
P. O. Box 4218,
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Trump’s Statement on Disarming Hamas
David Lin:
Let’s take a look at what former President Trump said in a press briefing on this subject.
(Clip plays.)
Donald Trump:
If Hamas doesn’t disarm, we will disarm them. I don’t have to explain how, but they know I’m not playing games. We got the hostages back—that was the first priority. Some gangs were very bad, and we took them out. That didn’t bother me much. It’s no different than other countries.
(End clip.)
David Lin:
If Hamas doesn’t disarm, Trump says the U.S. will do it for them. Is that really the role of the U.S. military in the Middle East right now?
Juan Cole:
There are many misrepresentations in Trump’s statement. To my knowledge, Hamas never agreed to disarm. They agreed only that they would no longer govern Gaza. They’ve repeatedly said they will not disarm.
As Israeli troops have withdrawn from roughly 45% of Gaza, Hamas forces have clashed with gangs that preyed on civilians. Those gangs were Israeli-backed and seen by Israel as alternatives to Hamas.
David Lin:
How do we know this?
Juan Cole:
It’s been widely reported—there’s no serious doubt about it. That Trump approves of Hamas destroying these Israeli-backed gangs is peculiar; the Israeli cabinet wouldn’t share that view.
The U.S. doesn’t have troops in Gaza and isn’t in a position to disarm anyone there. When a government and its military collapse—as we saw in Iraq earlier this century—chaos follows. Even with 170,000 U.S. troops in Iraq, we couldn’t disarm everyone. So this idea that Trump could simply “disarm Hamas” is posturing. The reporter was right to ask how he would do it; he couldn’t answer because there is no answer.
The Future of Gaza’s Governance
David Lin:
Reports indicate Israel has armed rival groups in Gaza, some allegedly linked to ISIS, to undermine Hamas. Regardless of that, Trump insists the violence must end and says the U.S. will intervene if it doesn’t. What do you make of that?
Juan Cole:
Aside from bombardment -— which hasn’t worked for Israel -— there’s nothing the U.S. can do about Hamas. The real question is: who will succeed Hamas in governing Gaza?
That new authority would need to establish order and security. There’s speculation that former British Prime Minister Tony Blair might lead an interim administration, or that the Palestine Liberation Organization could take over, or that an Arab or Turkish force might enter. These discussions are ongoing, and we don’t yet know Gaza’s future governance.
Whoever governs Gaza will determine whether peace can be maintained.
The Need for Palestinian Statehood
David Lin:
What needs to happen to maintain peace in the region?
Juan Cole:
The Palestinians need a state. All these conflicts in the Levant stem from Palestinian statelessness. People in the West often don’t understand that Palestinians live under Israeli military occupation. No one in North America would tolerate a foreign army running their province or state; they’d resist.
Peace will not come until Palestinians have the dignity of citizenship and access to courts that protect their rights and property. As it stands, the Israelis can seize Palestinian land at will.
Recognition vs. Reality
David Lin:
Palestinians are recognized as a state by about 157 countries. Isn’t recognition enough? What else must happen for peace?
Juan Cole:
Those recognitions are pro forma. In practice, Palestinians in Gaza and the West Bank live under Israeli military control. Israeli settlers have seized land, built settlements, and sent out militias to attack Palestinian villages—often with military complicity.
There’s no Palestinian court system to protect victims, and even the Palestinian police operate under Israeli authority. This is not a state; it’s a colonial regime, no different from British rule in India. The world agreed colonialism should have ended, and people should have self-determination. Palestinians still lack it—and the United States is the main reason they continue to suffer.
If Trump or any U.S. leader truly wanted lasting peace, they would work toward establishing a real Palestinian state.
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Obstacles to Peace
David Lin:
What could sabotage this peace deal?
Juan Cole:
The ceasefire is fragile. There’s no stable framework for peace—Israel has withdrawn from less than half of Gaza, leaving chaos. Hamas is a shadow of its former self and unlikely to reassert control.
Yes, spoilers exist: Hamas factions, Israeli far-right elements, or regional powers like Iran. But the main threat, in my view, comes from Netanyahu and his extremist cabinet, who have reignited wars before when peace loomed. They imposed a food blockade just months after a previous pause in fighting.
If the Israeli government truly sought accommodation with Palestinians, peace would be possible. But there’s no sign that’s how they think.
Host (David Lin):
This is a chart of the oil price, and I think investors and participants in the oil market would like to know from you, Professor, how fragile this deal really is. What we saw on October 10 was that oil dropped about three percent on the news—and it’s continuing to drop.
I think the market’s pricing in that no escalation is going to happen yet. But of course, this could all change overnight. So, in your calculation of probabilities, how likely is it that we could see a reversal—a complete end to the deal, a return to violence, and then perhaps even an escalation that drives oil back up?
Juan Cole:
I think there’s a 50/50 chance that the immediate fighting in Gaza has come to a close. In my experience, people fight for as long as they believe continued fighting might give them an advantage. I suspect both sides have reached the point where they see no further advantage in continuing.
The kinds of things that would affect the oil markets include the fact that the Houthis in North Yemen have been bombarding tankers and container ships in the Red Sea that move up and down from the Suez Canal. The Houthis are wild men, but they’ve been men of their word to some extent: they said they wouldn’t attack if the Israelis stopped attacking Gaza -— and they didn’t, during the pause in January and February.
That would be good news for oil markets and for global shipping. There are six major container-shipping companies, and oil also moves through the Suez Canal. Many ships have had to find alternative routes — mainly around the Cape of Good Hope, which adds expense, especially for trade with Asia.
So, should this peace hold -— and again, I’d say there’s a 50/50 chance -— it would likely mean that the Houthi blockade in the Suez–Red Sea shipping lane would subside. That would be good news for oil markets and container shipping alike.
Meanwhile, Iraq is pumping about 4.5 million barrels a day regularly. The Saudis and Kuwait are also pumping. There are restrictions on Iran, and that probably keeps the oil price from collapsing. If Iranian oil were not limited to the black market -— if it could be freely sold rather than smuggled to China -— it would add a lot of extra oil to global supply.
But I have to tell you, David, the Palestine–Israel issue is geographically far from the main centers of oil production, and in my experience, it hasn’t usually had a dramatic effect on them. I think the markets are overly jittery about conflicts in the Levant affecting oil prices. You see sharp reactions to outbreaks of violence between Israelis and Palestinians, but neither country has oil, and there isn’t any nearby.
The real centers are in the Persian Gulf, which usually aren’t dramatically affected—though, as I said, about 10% of global energy passes through the Suez Canal, so that has some effect.
David Lin:
That raises the question of whether matters in the Middle East still matter for oil. Historically, OPEC has been the dominant producer. But with shale production, the U.S. has become more or less self-sufficient—or so the news says.
First, is that true? And if it is, should oil investors even react to events in the Middle East anymore?
Juan Cole:
The Middle East still matters, broadly speaking. Although, as you say, there’s a lot of production outside the region, the Persian Gulf still accounts for roughly 22% of global production.
Oil is a fragile commodity -— 70% of it goes to transportation -— so people absolutely need it to run automobiles, trucks, and commerce. If even one major Middle Eastern producer suffered a strike or a terrorist attack, oil prices would skyrocket.
So yes, the Middle East remains very significant for oil prices. But I don’t think the Palestine–Israel conflict is the factor that mainly affects them. It would be conflicts within the Gulf itself that would have that impact.
Trump’s enormous pressure on Iran, for example, directly affects oil prices. Iran can’t sell its oil on world markets because of U.S. sanctions, so it smuggles it—typically to third countries like Malaysia, which then resell it on the black market, mainly to China.
Proxy Wars and Global Power Shifts
David Lin:
There’s a broader theory that what’s happening now is a proxy war between the U.S. and China—Israel backed by the U.S., Iran backed in some ways by China, and Iran funding groups like Hezbollah that oppose Israel. What’s really happening, some say, is a proxy war between an existing superpower and an emerging one.
Based on history, is there a precedent for these kinds of rivalries escalating on a wider scale?
Juan Cole:
There’s certainly historical precedent for challenger states emerging as rivals to dominant powers. The Soviet Union wasn’t significant in the 1920s, while the British Empire ruled much of the world. By the 1950s, the Soviet Union was a superpower, and Britain was just a small island. So yes -— those shifts happen.
However, I don’t think China’s leadership is truly invested in Iran’s projects. Iran is an inconvenient partner for them. The Chinese are wary of American sanctions and don’t want to get too openly involved with Iran. I also don’t think they approve of the violence associated with Iran’s regional policies.
To be fair, the Iranians would describe their actions as “resistance,” saying they and their allies have been under attack. But China’s official approach is “harmonious development.” They want to reach superpower status without getting dragged into regional conflicts.
My guess —- though I have no proof -— is that China has told Iran to cool it. The real challenge China poses to oil markets isn’t through geopolitical conflict, but through technological and industrial transformation.
China is leading the green-energy revolution, particularly in electric vehicles. Companies like BYD are producing ever-cheaper and more efficient EVs and batteries. EVs are taking over China’s automotive market.
Analysts such as Ember project that Chinese oil demand has already peaked this year because so many Chinese drivers are switching to EVs. They’re no longer importing petroleum to fuel these vehicles and will likely import less in the coming decade.
If China succeeds in exporting its EV model to other countries -— as it intends -— this will create long-term downward pressure on oil prices. That’s the real challenge: a structural, not geopolitical, one.
It may not happen quickly in the United States -— especially under the Trump administration -— but in the rest of the world, including Europe, Africa, and Latin America, the Chinese model could become dominant. That would mean a long-term, secular decline in the oil industry.
David Lin:
To your earlier point about China wanting to become a world superpower without conflict -— is that even possible? Doesn’t history show that emerging superpowers usually clash with established ones?
Juan Cole:
Well, yes -— there have been many situations like that. But let’s talk about the Soviet Union as an interesting case: because it emerged after nuclear weapons were introduced, and because the Soviets obtained their own nuclear weapons not long after the United States, there was never a direct war between the United States and the Soviet Union. The two had severe geopolitical conflicts, but they tended to divert them into third countries. The Vietnam War is one example -— third-world proxy wars.
David Lin:
Is that the more likely form a conflict between the United States and China would take -— not a direct military confrontation, but some kind of proxy war over an area or resource in the global south?
Juan Cole:
Yes. That’s the much more likely form —- proxy conflict rather than a direct U.S.–China war. At the moment, the Chinese have resisted taking that kind of bait. I don’t mean to portray them as heroic; I think they have selfish reasons for avoiding a diversion of resources into military confrontations.
They have rattled sabers with Taiwan and with the Philippines, and to some extent with Japan. They are not always a pleasant adversary to deal with. But pursuing a big war has not been their strategy so far, and I think they’re afraid it would drain resources they need if they’re to compete with the United States. By nominal GDP, they’re still behind, and the amount of poverty in China far exceeds that of places like the United States or Europe. They’re coming from behind and need national resources for things like making themselves an electro-state and competing in world markets. They don’t want to spend money on munitions.
David Lin:
How much animosity is there between China and the U.S.? We see rhetoric almost daily from the government warning about China being belligerent and an unreliable partner. I’ll show you a quote by Treasury Secretary Scott Ascent in a minute. How much of that is just political talk to galvanize the population? Behind closed doors, are they really just partners?
Juan Cole:
I think it’s a mixed bag, David. There are many areas in which they are, and continue to be, partners. If you look at the volume of trade between the two countries, it’s enormous and ongoing. Trump’s tariffs will affect it to some extent in some sectors -— the Chinese are not buying U.S. soybeans this year —- but that’s just one commodity. You’re talking about hundreds of billions of dollars in trade annually.
On some issues, Trump still talks about trying to enlist Chinese aid in resolving the Ukraine conflict, for instance. That may not seem likely from the outside, but he can certainly use Beijing to send messages. So yes, the U.S.–China rivalry exists and is important, but as someone who remembers the Cold War between the United States and the Soviet Union, it’s nothing like that.
Back then, the United States and the Soviet Union were toe-to-toe, with tanks lined up in Germany eyeing one another, and there was the danger of war at any moment. They were involved in heavy-duty proxy wars like Vietnam, and there was very little trade between them -— some wheat, maybe some oil -— but it was a tiny market. Today’s U.S.–China relationship is, as you say, much more complex.
David Lin:
This just came in from Treasury Secretary Scott Bessent in response to Trump’s 100% tariff announcement on China. China then announced it would stop exporting critical minerals. Ascent said: “If China wants to be an unreliable partner to the world, then the world will have to decouple. The world does not want to decouple—we want to de-risk—but signals like this are signs of decoupling, which we don’t believe China wants.”
Could it be that the Cold War of the future is purely economic? Instead of tanks lining up on either side of Berlin, each side threatens to pull the trigger on exporting critical minerals and materials the other side needs—thereby crippling the adversary’s economic bloc. Is that what’s happening?
Juan Cole:
I don’t think it will go to that extent. The Chinese were clever in developing rare-earth mineral extraction and refining before anyone else. “Rare earths,” which are very important to the green revolution in energy and transportation, are not actually rare; that’s a term of art. They’re everywhere, but nobody else developed them as the Chinese have. At the moment, China has a functional monopoly.
I see this as a “weapon of the weak.” If you put tariffs on them and hurt their economy, they can say, “We won’t share rare earths, where we currently have a temporary monopoly.” That’s a bargaining chip -— “You’re hurting us; we’ll hurt you back. Please back off.” In my view, it’s a sign of weakness that they feel they have to do something like that.
People like Bessent and Trump talk a big game about polarization, but as we’ve discussed, the trade volume between the two countries is enormous. It would be bad for the United States to polarize economically to that extent.
Our Future in 50 Years
David Lin (Host):
I’ll end on this final question. You’re a professor of history and a student of history. Looking at the last 50 years, how do you think the world will change in the next 50 years? In other words, if we take a starting point in the 1970s and an end point in the 2070s…
Which gives us a 100-year span—from the 1970s to the 2070s. How would the world change over that period?
Juan Cole:
I think the signs are that China will emerge as the major superpower in the world, partly because it has decided to go big on green energy. About 80% of the solar panels bought worldwide are made in China. There are enormous markets for these panels in Africa and Latin America, while the United States isn’t really in that game -— it’s only around 2% of the global market.
Electric vehicles are another area where the Chinese are innovating. The European auto markets are trembling with fear that the Chinese will simply take over—that “car” will mean “Chinese car.” BYD, for example, has a $16,000 EV with a very good range, and no one else has anything comparable.
If there were truly free trade, Chinese EVs would already be making enormous inroads into the American market. But they’re not allowed to sell them here. So, on technological grounds, the Chinese are positioning themselves to become the dominant economic power -— the first advanced “electro-state.”
Meanwhile, Trump administration policies risk making the United States a more backward country. He has decimated the scientific establishment; this year alone, some 10 to 15 percent of government scientists have been fired. These were the people conducting basic research that later led to commercial products and innovations.
Another major factor will be global heating and climate breakdown, which will cause many unpredictable changes. Some regions will become extremely difficult to live in because of excessive heat or drought. Hundreds of millions of people are going to move.
Canada, if it continues to welcome immigration, has the potential to become a very large and important country. Its climate will remain relatively temperate, offering enormous opportunities for immigration and development. I think Canadians sometimes underestimate their own weight in the world, but they could emerge as a major player
David Lin:
or perhaps as the 51st state -— one of the two.
Juan Cole:
It could go the other way around -—
David Lin:
I don’t see that happening.
Juan Cole:
One could theorize.
David Lin:
Excellent. Thank you very much. Where can we learn more from you—perhaps follow your work?
Juan Cole:
Yes, I have a blog called Informed Comment. If you Google “Juan Cole” it’ll come right up.
David Lin:
All right. Thank you very much, Professor Cole. We’ll speak again soon—and thank you for watching. Don’t forget to like, subscribe, and follow Juan Cole.
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