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We're obviously disappointed with the case, which was wrongly decided, but the president and President Xi have developed a very strong and stable relationship. Scott Bessett and myself, we've established strong relationships with our counterparts. Our deals were not premised on whether or not this case remains in place or not. As you mentioned, we have a variety of tools. We've had tariffs on China since 2018.
Even now, the average tariff on China is still about 40%. We have other tools if we need to use it. The point isn't trying to fight with China. It's really to have stability for the soybean farmers you mentioned, for people who are selling aircrafts and medical devices, and folks who want to be able to import some things we can't get elsewhere from China. And we're still on track for that.
The meeting in April is still on track. We think it will be very successful. Jameson Greer, weighing in the crisis management that they're doing now because of that Supreme Court decision and how it affects the China visit. And there's going to be a follow-up visit if all things go well here. I'm sad to find out that we're holding up our weapons shipment to Taiwan just to make sure the March visit goes well.
Taiwan needs to be a porcupine. That's the phrase they use.
So China knows if they go in and try to fight a war, they haven't had a war since 1979, that they're going to get a lot of resistance and it's going to be trouble. And we're going to go for it, and we're going to hopefully watch their back. Dr. Victor Cha knows all the machinations of the region. He's got a brand new book out called China Weaponization of Trade Resistance Through Collective Resilience.
He's the Distinguished University Professor at DA Sion SF, endowed chair in government international affairs at Georgetown, as well as president of the Geopolitics and Foreign Policy Department and career chair at the Center for Strategic and International Studies, and a former director for Asia Affairs at the White House National Security Council. Victor, congratulations on the book. Thank you, Brian. I think when people think about weaponization of trade, we think of China not buying our soybeans and China not selling us rare earth. Is that an example?
Yeah, those are two very good examples. Basically, they take what is normal trade interdependence and they weaponize it for political purposes. And they've been doing this since 1979. We've documented over 600 cases, and it's really heightened under Xi Jinping. WHO being them putting bringing them in, big mistake.
Into the WTO, yes. It was probably a mistake at the time. But at the time, there was this prevailing assumption that China, as it got rich, would eventually become more like us. And so when they weaponized trade, we put up with it saying, oh, this is just a bump in the road. In the end, there'll be a good news story to come out of that.
But clearly, China got rich, and the CCP is still in control. They haven't politically liberalized, and they're not following the trade rules.
So, in your book, you categorize and you list and explain all the times China used trade against the world. Why did we how did we allow ourselves to let them control our pharmaceuticals? How did we allow ourselves to let them control rare earth? What was the West thinking? Because it wouldn't work to anyone's advantage, and we have plenty of these same resources ourselves.
I think there are two reasons. The first was his faith in globalization and just-in-time supply chains. It was trying to get the cheapest production costs, and often that ended up being in China. And we never really thought about trade disruption. Um the other was this view that you know again, eventually that As China grew, it would be more of a Responsible stakeholder in the international system, and therefore we could countenance a single act of trade coercion every once in a while, because in the end, China would become more like us.
That clearly was not the case. That clearly has not been the case. But now we find ourselves in the position where our supply chains, many of them, are compromised. And this really became clear during COVID, when so much, as you said, of our medical supply chains and PPE supply chains were dependent on China, and we saw a disruption and we didn't have a good answer. But many of us.
Now they're using. I was just going to say that just many governments around the world are well aware of it. They've all appointed economic security point people, and everybody is trying to shore up their supply chains now because they know this weaponization is not going to stop. Look at Japan. What have they done to Japan over the last six months?
Yeah, exactly. I mean you got a new prime minister in Japan Basically, all she did was restate existing Japanese defense policy when it came to Taiwan. And China is carrying out a full court economic coercion against her, not importing Japanese seafood, not allowing tourists or students to go from China to Japan, a variety of things of this nature. And also on heavy rare earth minerals, they're curtailing heavy rare earth mineral exports. Uh to Japan.
China had done this before in 2010. They curtailed. Light rare earth minerals to Japan over a territorial dispute. Japan, um Shore up that supply chain. And so, what does China do?
It doesn't go after light rare earths, it now goes after heavy rare earths.
So, trying to answer this problem with shoring up supply chains is good and it's necessary, but China's always looking for the next thing that they could press you on.
So what do you think is going to be a what do you think the President's strategy is now? We did confrontation, hit them with the fentanyl tariffs, backed off when they said we're going to hold back rare earth. They agreed to put everything on hold and then agree to work out the kinks. And then the President and President Xi decide, let's meet together, and they're going to do it in March. What do you think the President's strategy is now?
I think at the core of the basic strategy is to continue to use the threat of tariffs to try to stave off China using critical minerals. you know, trying to weaponize critical minerals. And this is kind of a holding pattern because the idea is eventually that the United States and like-minded countries will be able to develop to the best they can independent critical mineral supply chains so that they're no longer prone to Chinese threats of economic coercion. I think that's sort of the game plan right now. And so when we go into this summit this spring, there'll probably be a similar sort of ratcheting up of threats on both sides in the run-up to the meeting and then some sort of interim agreement that might last for another year or so.
But the last meeting basically bought a year. Where China said we said we would not raise tariffs further, and they said that they would not. Hit on critical minerals. But this is only a temporary solution. In the long term, we've got to shore up these critical mineral supply chains.
There's a critical mineral security partnership that both the Trump and the Biden administration have done. These are the things that are necessary to get out from under this constant threat of coercion. Do you think we're doing enough to make to get our own sources of rare earth between the deals we cut in Southeast Asia, the one in Australia, Argentina? I talked to Doug Bergham. He seems to see the urgency.
Are you seeing it? No, I think we are seeing it. I mean, I think there is pro, this is a top priority. For the administration, I think we're seeing it in their conversations with allies and partners, potential sources of critical minerals, and anywhere there are critical minerals, it's part of whatever bilateral meeting the president is doing with the leaders of those countries.
So I think there's an urgency attached to it because I think the idea is that within a decade we want to get out from under this. Japan, as I said in 2010, went on a major push to become less vulnerable to China on critical minerals. It took them about a decade. to reduce their dependence by about 50%.
So, it may take less time for the United States, particularly if we work in partnership. uh with other like-minded like-minded countries. Headline in the New York Times today. The looming Taiwan chip disaster that Silicon Valley has long ignored. Why?
Because Taiwan's making about 90 plus percent of all our chips, and China is determined to take the island, claiming it as their own. Number one, their claim isn't authentic. They've never had the island. And number two, they seem obsessed with taking it, and that would certainly hurt our na that certainly not be in our national interests. Yeah, I mean, yes, that's exactly right.
China, if China were to take Taiwan, it would have a chokehold on. uh you know these high-end computer chips uh semiconductor computer chips Um China, you know, season ping. Is in an increasingly precarious position. He's been purging some of his top generals. People that he put into place, which speaks both to the corruption.
in the PLA, but also to his own paranoia. Um and concerned that people are you know gonna stab him in the back. But that also means that he's become much more aggressive in terms of these. Quarantine exercises that they've been doing around Taiwan. You can't even call these exercises.
This is like practicing. quarantine around Taiwan, basically to try to choke, a strategy to try to choke off Taiwan so they cry uncle in the end because they can't get anything into the island. But the strategic value of Taiwan, both in terms of shipping lanes, this potentially being a permanent aircraft carrier for China if they ever were to get hold of it, as well as the chip issue make this strategically very important. I think the good news is that the administration is very focused on this. The Pentagon is very focused on this.
They've been building capabilities. But at the same time, the concern is that Xi Jinping may see his window opportunity closing by 2027. And that creates a lot of concern. Nearly home. Isn't home where we all want to be?
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Over 500,000 new listings every month based on average new for-sale and rental listings, February 2024 through January 2025. I mean, at one point, we'd still be waiting for AOC to answer the question: what do we do? I I hope. We are prepared to defend Taiwan. And I don't think he would do it with this president as president.
That's what I don't think. But uh My hope is we're prepared to do this because the West will begin to just lose gradually lose grip and credibility and basically give the world over to China if we do. Yes, there's a lot riding on Taiwan that goes beyond what's in Taiwan, the CHIP issue. In some research that we've done, we found that one of the most important indicators of U. S.
general commitment to allies and partners In Asia and in Europe, is what happens on Taiwan. U.S. credibility and strength in many ways rests on that. I mean, it's good in the sense that other countries in the region, Japan, Australia, the Philippines, South Korea, and others, really do understand what's at stake. In the past, they just saw it as a US problem, but now they really do see it as something that can affect their very lives.
So there's a lot more vigilance. We see defense spending increasing across Asia now. You know, as the president has wanted, 3.5%, 5% defense spending is going up in places like Japan and Korea. Nuclear submarines in Australia also talk about that in South Korea.
So things are happening now that are shoring up defense and deterrence that benefit the Taiwan Straits issue. No, that is great.
So Victor Chah guest, his book is now out, China's weaponization of trade, the resistance through collective resilience.
So where is China vulnerable?
So, what we found in the research we put into this book is that there are about 600 items that China trades. With countries that it has coerced, that are very important to its construction industry, to its solar panel industry, to a variety of industries. And if countries can work together, we can threaten retaliation if China continues to use economic coercion against any one of us. And that will deter them from using this as a tool as they're doing to Japan today, as they're doing to us, as they've done to us on critical minerals, and as they've done to many American defense contractors, software companies, clothing companies, airlines, you just name it, like they've gone after everybody. But there is capability that the United States, Japan, Australia and others have that could deter and stop this sort of activity.
I mean, it's pretty obvious the products. What I also hear, too, is their people don't buy anything. They need to sell their products, 70% to us.
So we are the consumers they need to sell, or else they're just going to be stuck with these products because they can't just, you know, the billions of people in China don't buy the billions of items because they don't have a social safety net and they don't trust any excess spending money that they have. And they got huge job issues, correct? They're out of make-work jobs. Yeah, no, that's absolutely right. I mean, you know, still the most important sort of consumer middle-class market is the United States.
Um And China, while it's a big market for production, for cheaper production, In terms of consumption, it's not nearly as big, and China faces vulnerabilities there as well. Do you think there's any chance of separating Russia and China at this point? Right now it seems pretty hard. China has been both keeping in arms distance length away from Russia while behind the scenes continuing to supply them in with microelectronics All sorts of industrial capacity so they continue the war in Europe. But right now, these two seem to be brought even closer together, as we saw in the Victory Day celebrations that Xi Jinping hosted last fall, where he had Putin on one side and he had Kim Jong-un on the other side.
Are you concerned about Canada's newfound relationship with China? Yeah, so I think there is a concern that the tariffs by the Trump administration are causing some of our allies and partners to look at what you might call Plan B's: what else they could do if they can't rely on the United States. And this relationship between Canada and China is one manifestation of that. I don't think that means that we're pushing everybody into the arms of China because nobody wants to be in the arms of China. They're just going to be squeezed to death if they do that.
Um but um you know it is a it is a bit of hedging. By Carney, and we'll probably see European leaders do the same thing. But again, you can't get in bed on trade and economics with China because they steal technology, they use economic coercion, they'll try to steal technology, they'll enter into a joint venture, they will try to steal your technology, they will then domestically produce and dump on the open market to basically kill your industry.
So, nobody, you know, they may be hedging a little bit by talking to China, but nobody's going to get fully in bed with China on investment and trade. I know, but this Prime Minister in Canada is a real piece of work. I don't know if he understands the dangers fully. I think it's taking it personal, and the hockey loss is not going to make him feel better. Victor Cha, congratulations on your book: China's Weaponization of Trade: Resistance Through Collective Resilience.
Appreciate it, Victor, and thanks for what you do. Thanks, Brian. Keep up to date with the very latest in Iran. Follow and listen to the Fox News Hourly Update Podcast. And dive deep with the Fox News Rundown Podcast.
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