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I thought it was an amazing. Philippe? He's a great leader. Peter of Powerful very Strong country channel. And uh Uh we what can I say?
We have It was an outstanding Group of decisions, I think, that was made. A lot of decisions were made. There wasn't too. Too much left out there. And uh we've come to conclusion I'm Many very important points.
And President Xi, before he went in, was very magnanimous. And of course, I'm looking for anything because they've blown up on us in the past. I remember Alaska. President Xi wasn't there, but his higher-ups were there, and they just blasted Anthony Blinken, Biden's people in the past. And we've had problems.
And we watched the eruption two weeks ago, and out of nowhere, they came out and said we are suspending rare earth sales to America and around the world.
So I didn't know what to expect, but I could not believe that it seemed like President Xi, in an understated way compared to Trump, was saying the same thing. Here's a little of what President Xi said through a translator, cut 12. Mr President, you care a lot about world peace. And you are very enthusiastic about settling various regional hotspot issues. I appreciate your great contribution to the recent conclusion of the Gaza ceasefire agreement.
During your visit to Malaysia, you witnessed the signing of the Joint Declaration on Peace along the Cambodia-Thailand border, to which you had provided input. China has been helping in our own way Cambodia and Thailand properly settle their border disputes, and we have also been promoting peace talks to resolve other hotspot issues. And he went on to say, you know, and they did say during the meeting they'll help resolve the Ukraine conflict, and of course, they are in total control, almost total control of that. Vladimir Putin would have to listen to him if he said, wind it down, be done. And there's just a lot of progress was made in a more positive way.
And I just hope we got the red flag, which is we have to be in control of our own rare earth and then pharmaceuticals, too. Let's bring in Chris McGuire, former National Security Technology and National Security Deputy Senior Editor, former State Department Senior Advisor for Critical and Emerging Technology. Chris, welcome. I don't want to put words in your mouth or skew your thinking. I don't think it's possible anyway.
But I see a lot of positives come out of this meeting. And what about you? Yeah, thanks a lot. Thanks a lot for having me, Brian. Yeah, I mean, look, I think this is a kind of short-term, in some ways, freeze for freeze.
I think that it's definitely good that the Chinese are rolling or not implementing their rare risk controls, which it really should de-emphasize how enormous of an escalation that was and how out of proportion that action was to anything the United States has done. And by the way, where did it come from?
Well, I mean, that just came out of nowhere. Yeah, I think it came from Chinese leadership, and it was an effort to kind of coerce the United States and show us that they have enormous control over us and deter us from taking any future action against China, which is actually very, very scary and dangerous, and something I think the administration is going to have to work hard in the future to make sure that China knows that they don't have the ability to coerce us. But the fact that they rolled it back. Is positive. I don't think it addressed the long-term systemic challenges in the relationship, but also I don't think those are things that are fundamentally addressable.
I don't think that China is going to be convinced to stop IP theft or change their political system, which I think are many of the barriers that prevent things like Chinese investment in the United States from being something that we can support. Farmers right away are going to feel the benefit. I mean, if they're not going to send ships, then the whole thing is going to fall apart. But evidently, they've already, according to Senator Marshall, they're already sending ships to pick up Soybeans And it looks as though they've already committed to a number of a purchase, and that could save our farmers this year right away.
So that is tangible.
So, I think the soybean purchases were good. It's good that we got that back in track. It's good that we kind of rolled back the rare earths. The things that the administration gave the Chinese were 10% reduction in tariffs for fentanyl cooperation, which, again, is a good thing. It's good to have the Chinese actually working on that.
We'll see if they actually follow through with it. Suspension of reciprocal port fees, and then the walk back of the 50% rule on export controls. I think the big thing that the Chinese got here is the perception that there will be a suspension of future activity from the United States to push back on China. If the deal is just kind of as negotiated here, I think that that can be quite strong because if the United States can continue to take the actions we need to protect ourselves from kind of Chinese coercive action.
So, I think to evaluate this, it really is important to look through what the administration does in the coming kind of days, weeks, and months. There are positives here that are good. It is important to get the rarest controls off the book. And I think the administration has taken a lot of productive action to actually realize this is something that needs to be fixed. And there's actual motivation and energy behind investing in the areas that could fix that-from kind of materials to batteries to magnets.
Like, we really need self-sufficient supply chains here. Action to do that and buying time to do that is good. I think that we just also have to make sure that we don't kind of take our foot off the gas generally in the interim. Right. This is why I don't Changed my trust level, and nor would you ever, or should Trump ever, anybody, any administration, don't be like, hey, I trust the Chinese now.
You can't be that naive. All I look at is from their perspective. What good would it be to alienate Trump knowing he's going to be there over three years, knowing that he's not afraid to take bold, unpredictable action, knowing that he's already assessed that China would be formidable and that we're trying to upgrade our military, trying to be free of rare earth.
So we're not sitting on the sidelines Pretending as if it is 1980 and we can bring them into the world markets.
So it's in their interests not to alienate Trump. If it was 2019 again and they maybe thought that he wasn't going to get elected and he had other issues, and the next thing you know, you're hit by the pandemic, I'd be In the camp, well, we can't trust them. They're probably not going to follow through. I think it's in their interest to follow through on this stuff. Am I wrong?
100%. And I think the administration really realized that and they communicated this to the Chinese that the United States has huge levers over China that if China thinks they can escalate and really kind of push us to do their bidding, If the United States were to cut off China from elements, element of Chinese financial sanctions from U.S. dollars or elements of the Chinese technology ecosystem from semiconductors that are made with U.S. chips or U.S. tooling, that would have enormous impacts on the entire Chinese economy.
There are things that we could do that would really, really damage them. And I think that Secretary Besant, Ambassador Greer, and the president himself definitely emphasized that to the Chinese. I think it's something that we just have to continue to emphasize because the Chinese really have to realize it. But it's absolutely true. It's not in their interest to go down this road because the administration absolutely has bullets that they could fire that would be way more painful on the Chinese side.
Chris, at a different time, a different administration, different party, they'd be like, if I can get the Chinese to burn less coal, if I can get them to use more windmills to get them closer to the Paris climate change, that would be a win. Aren't you glad and somewhat relieved that the green fever has broken? And we could focus on tangible things that affect the American people. Yeah, I think that the perception that China is going to be with us on any of these areas is really kind of smoke in mirrors, right? Even on green energy, obviously, that's an area where there was a bunch of push.
And at the same time, what were the Chinese doing? They were actually trying to steal the entire kind of. Green technology industry away from us and away from the West, and kind of use that as a force to coerce the world. And they make most of the solar panels in the world, too. Exactly.
Exactly. Right. And then that now plays into some of our concerns on, for instance, like EV batteries, right? Like they're all made in China. They have dominance over that supply chain.
So I think we have to be really clear-eyed about the challenge here, even in the areas where there are pushes to cooperate. The kind of best path is to have the self-sufficiency, which then I think. Gives us a lot more leverage in any conversations. I think being more clear-eyed about that and being more kind of transactional in this is probably the right approach because that's how the Chinese are approaching it.
So it's absolutely the way that we should approach it, too.
So they say the two teams are going to go ahead. They say they reached a basic consensus and we're ready to continue to work. They want to see something signed, right? Whether they call it phase one or not, get something signed. We want a contract to live up to on both sides.
And then we could, you know, instead of saying, well, you said this and you said that, and we thought we had agreement and we didn't, let's just get this thing done. And I wonder how close that is. I hope we're not going to have to wait until April until they meet again. Yeah, we'll see. I think we will be able to see pretty quickly in seeing Chinese soybean purses, also seeing like Chinese actually delivery of rare earths.
Like, I think there's been Chinese magnets that were delivered, but there's actually a lot of speculation that the actual underlying materials they haven't followed through on.
So, if we actually start to see supply chains actually open up and not just empty promises, I think that would be good. And we'll see that in the data relatively soon. But that would be positive. The one thing I just also want to mention that the administration really held the line on that was really important was there was a lot of speculation on advanced chips that they would be, that there was a potential trade for the most advanced AI chips in exchange for some of these things like soybean purchases. And I think the administration correctly realized that that was not in our interest.
That, first of all, they had the leverage to get the Chinese to resume soybean purchases and do fentanyl cooperation and other things without giving up our most advanced technologies. And second of all, that there's a really big risk in sharing those technologies and that there's no way for the Chinese to indigenize.
So the administration absolutely gets. A lot of credit for not giving that up in this. And I think Trump was clear that actually, like, Blackwell shifts didn't come up, which is good. I think that's not something that we should be sharing or cooperating with the Chinese, especially given the military application. Hi everyone, I'm Brian Kilmedy.
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So, Chris, let's talk about your column we wrote in the Free Press, and you talked about the car industry. What risks do we have with our car industry? Number one, and by all reports, whether they pirated it or not, they put together a heck of an electric car. And whether their labor costs are low, it's extremely affordable. And both Europe and America is really worried about them flooding us.
And Ford said basically, we could be out of the car business from what they saw when they visited the manufacturing. I'm talking about, I think Farley said that. last couple of weeks ago.
So what's your biggest worry? Yeah, I think that there's a huge worry that if we actually let Chinese, basically let the Chinese auto industry into the United States, it's just not going to be compatible with the United States because of the Chinese economic model that ultimately they would subsidize their vehicles to the point where they would drive us out of business. And whether that's because we allow imports from China, which fortunately we don't due to both some of the regulatory blocks, but also the very high tariffs, also imports from other countries, or investment here. And I think there's some concern that there is what the Chinese are pushing, what they were pushing on the administration as part of this deal, and I think which the administration wisely rejected, was a deal of we'll promise you huge investment in America, right? And you can all the words that sound great, shovel-ready jobs, very large numbers of dollars, and build plants.
But those plants are ultimately kind of ways to push out critical U.S. industry. If we do get big BYD factories in the U.S., eventually those will destroy the foreign GM factories that we have here. True. Here is Howard Luttnick.
that you refer to in your column. This is what he said when asked about it. Let's say China comes in and they say, okay, we're going to build stuff in the United States. We want to build. Automobile companies, our automobiles in the United States.
Well, that will kill our car industry. They're all over the Bahamas and Mexico.
So, would you allow that? No, that's what I call an Amy Winehouse, which is no, no, no.
So we don't have, we're not going to have Chinese companies beating up our companies. That's just not going to happen. You need to build in America. You need to build cars in America. They're all coming back.
You show those manufacturing jobs. They're all coming back. We spoke to the big three. You see semiconductors coming back. You know, this is all pharmaceuticals are going to come back.
Manufacturing is going to come back to America. But you are completely correct. We've got to watch ourselves with the Chinese because the Chinese are dumpers. What they do is they try to make their industries crush ours so they can have control of us. And that's what they've done under the Biden administration, under the Obama administration, all the way back to the Clinton administration.
It's got to end. And fortunately, Donald Trump has our back and he's going to protect America and bring those manufacturing jobs back to America. Chris, I see you nodding. You think we get it, right? You think these guys get it?
Yeah. I do. I do. And I was told from folks that the Chinese had been pushing these investment deals in the U.S. for some time and saying, hey, actually, they want rollback from, we have the CIFIAS, the Committee on Foreign Investment in the United States that reviews these for national security, and they basically want to work around that and just get these big deals.
And the administration said no. I think Secretary Lepnick was very, very clear in that. Secretary Besant also is very clear this is not, who oversees the CIFIA's body as well as FASIA's Treasury Secretary, was very clear this is not in our interest. And I think the President gets very much that this is not in our interest.
So it's good that this is not part of the deal. It's focused more on other areas. Chris, you know what I'm struck by in researching the President's trip ahead of time, especially? No one lets go with the past. I mean, there's a theory out there, and it's a solid one, that China's trying to poison us with fentanyl the way the British poisoned them with opium, the opium wars.
And then you have South Korea still not going to forget what Japan did them in World War II, and Japan and China will have friction because of what Japan did to China in World War II. This type of rivalry and retribution is still very much a part of the dialogue today. Yeah, no, I think that's right. I think that we have to be very wary of the Chinese role, whether it's willful or whether it's due to kind of blissful ignorance. A lot of the fentanyl in the United States comes from China, whether it's directly or indirectly.
And I think what we've seen in the past is there's been efforts to work on this, but they've never, they haven't, whether they haven't been implemented seriously enough on the U.S. side or the Chinese have just been unwilling to actually do what they need to do. We'll see what happens this time. I think we should be very suspicious, not only of any kind of direct shipments into the U.S., but we also have to think, just like we do with terrorists, we also have to think about, you know, what if the Chinese are circumventing our fentanyl cooperation by basically just having unrestricted exports to Mexico, and then all of it is going from Mexico to the United States, like that is a circumvention of what we're doing.
So I think that it's a good positive sign that they're willing to come to the table with this and work with this on this, but like we should not be, we should not underestimate the degree to which they all Well the Chinese ultimately don't. Don't care about this. They don't care about actually controlling fentanyl production, I think, in a real comprehensive way. And in some ways, this is something that distracts us and hurts us, and that's ultimately good for the Chinese Communist Party. But we're showing how serious we are by what we're doing to Venezuela and those ships.
And I think they understand: wow, they're dead serious about this. We could tell them exactly what port they're in, exactly what ship they're on, and exactly where they go in Mexico. And if we whipped out the maps, and I think we probably did and showed them. We just stop it. And I think that, you know, we just expose it.
Chris, always great to talk to you. Thanks so much. Hope to have you back again soon. Thanks a lot, Brian. Appreciate it having me.
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