Latest / The President's Daily Brief / The PDB Situation Report | October 17th, 2026: Ukraine Is Taking the Fight to Russia's Critical Infrastructure & China's Growing Taiwan Threat

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The PDB Situation Report | October 17th, 2026: Ukraine Is Taking the Fight to Russia's Critical Infrastructure & China's Growing Taiwan Threat · The President's Daily Brief

• 0:07
  Welcome to the PDB Situation Report.
• 0:10
  I'm Mike Baker,
• 0:10
  your eyes and ears
• 0:12
  on the world stage,
• 0:13
  coming to you from my very posh wood paneled office,
• 0:16
  uh,
• 0:17
  somewhere in our
• 0:18
  secret compound.
• 0:20
  All right,
• 0:20
  let's get briefed.
• 0:21
  First up,
• 0:22
  Russia and Ukraine
• 0:23
  continue trading blows against critical infrastructure
• 0:26
  while new questions emerge about American support for Kiev.
• 0:30
  John Harding,
• 0:31
  deputy director of the Foundation for Defense of Democracy's Russia program,
• 0:35
  stop.
• 0:35
  stops by to give us his insight.
• 0:38
  Later in the show,
• 0:39
  China is stepping up its military activity around Taiwan,
• 0:43
  raising fresh concerns about Beijing's intentions.
• 0:46
  We'll be joined by Steve Yates of the Heritage
• 0:48
  Foundation for more on what that could all mean.
• 0:52
  But first,
• 0:53
  today's Situation Report Spotlight.
• 0:55
  The war in Ukraine is entering another period of uncertainty.
• 0:59
  President Trump announced an energy ceasefire,
• 1:02
  and he kind of announced it unilaterally,
• 1:04
  between Moscow and Kiev,
• 1:06
  but the agreement never materialized.
• 1:08
  Well,
• 1:08
  in part because Moscow and Kiev didn't know about it,
• 1:11
  and in part because Russia continued.
• 1:12
  Its attacks on Ukrainian energy infrastructure.
• 1:16
  Meanwhile,
• 1:16
  Ukrainian forces have reported sudden
• 1:18
  restrictions on the American satellite network
• 1:21
  that they rely on for critical battlefield operations,
• 1:25
  disrupting drone missions and raising questions about Washington's support.
• 1:30
  So,
• 1:31
  where does the war stand and
• 1:32
  what should we make of these latest developments?
• 1:34
  Well,
• 1:34
  those are good questions.
• 1:35
  For more on this,
• 1:36
  let me bring in John Hardy.
• 1:38
  He's the deputy director of the Foundation
• 1:40
  for Defense of Democracy's Russia Program.
• 1:43
  John,
• 1:43
  welcome back,
• 1:44
  man,
• 1:44
  to the Situation Report.
• 1:45
  Really appreciate you being here.
• 1:47
  Thanks for having me back.
• 1:50
  Well,
• 1:50
  let me ask you this to start with.
• 1:52
  Can,
• 1:52
  is it possible to have a ceasefire if neither
• 1:55
  party to the ceasefire knows that there's a ceasefire?
• 2:00
  Well,
• 2:01
  I think we've seen President Trump's best shot at doing just that,
• 2:04
  and so far it has not been working out very well.
• 2:07
  I think the Ukrainians showed that they were willing to
• 2:09
  at least see how it went,
• 2:11
  but obviously the Russians have been just striking harder than ever
• 2:15
  against their power plants,
• 2:16
  gas production,
• 2:17
  you name it.
• 2:18
  So I,
• 2:19
  you know,
• 2:19
  I think it's just unrealistic,
• 2:21
  frankly,
• 2:21
  to think that Ukrainians are going to
• 2:23
  sit on their hands and just,
• 2:24
  you know,
• 2:24
  let that happen without some sort of retaliation.
• 2:28
  It does seem odd when,
• 2:31
  you know,
• 2:31
  after all these years of Putin's invasion,
• 2:34
  one of the few things that has
• 2:36
  really worked in Ukraine's favor
• 2:38
  is to target Putin's energy infrastructure and his oil refineries.
• 2:43
  Um,
• 2:43
  and to your point,
• 2:45
  You know,
• 2:46
  Zelensky said,
• 2:47
  well,
• 2:47
  fine,
• 2:47
  we'll stop.
• 2:48
  And they did stop attacking,
• 2:50
  uh,
• 2:50
  Russian oil refineries for,
• 2:52
  I think 34 days,
• 2:54
  a little bit longer,
• 2:55
  and,
• 2:55
  and Russia just kept on pounding their infrastructure
• 2:58
  ahead of the approaching winter.
• 3:00
  So,
• 3:01
  again,
• 3:01
  to your point,
• 3:01
  you know,
• 3:02
  what's,
• 3:02
  I guess you could ask in simple terms,
• 3:04
  you know,
• 3:04
  what's in it for Keith?
• 3:08
  Right,
• 3:08
  and,
• 3:08
  and when you think about
• 3:10
  the Russians have developed
• 3:12
  just very detailed plans,
• 3:14
  uh,
• 3:14
  and,
• 3:14
  and
• 3:15
  put the munitions production against it to execute them,
• 3:18
  going after not just energy,
• 3:20
  you know,
• 3:20
  not just
• 3:21
  heat and electricity,
• 3:22
  but also even water,
• 3:24
  um,
• 3:24
  and,
• 3:25
  and so it goes down to like,
• 3:27
  you know,
• 3:27
  which particular substation gets,
• 3:28
  you know,
• 3:29
  which munitions,
• 3:29
  and of course they've
• 3:31
  increased production of,
• 3:33
  you know,
• 3:33
  Iskandder ballistic missiles,
• 3:35
  um.
• 3:37
  That kind of
• 3:39
  cheaper ballistic missiles that are fired by actually
• 3:41
  air defense systems to kind of complement those,
• 3:44
  those more powerful Iskanders.
• 3:46
  Um,
• 3:46
  and then you also have the drones,
• 3:48
  the Garon,
• 3:49
  these days 4 and 5,
• 3:51
  so jet powered,
• 3:52
  you know,
• 3:53
  faster,
• 3:54
  harder to shoot down for Ukraine's kind of cost effective systems.
• 3:57
  And,
• 3:58
  um,
• 3:58
  and so you think Ukraine really has its hands full right now.
• 4:01
  And as you know,
• 4:02
  the winter's coming,
• 4:03
  it's already getting colder.
• 4:04
  And I think the Russians are,
• 4:06
  are just trying to turn that
• 4:08
  brutality really of,
• 4:09
  of thinking about,
• 4:10
  think about like a senior citizen in their
• 4:12
  flat in Kiev who,
• 4:13
  who,
• 4:14
  you know,
• 4:14
  doesn't really have the means to,
• 4:16
  to go elsewhere,
• 4:17
  and they just have to tough it out.
• 4:18
  And,
• 4:19
  and so,
• 4:20
  uh,
• 4:20
  or,
• 4:20
  or,
• 4:20
  you know,
• 4:21
  a kid who basically has their entire school day interrupted by,
• 4:24
  uh,
• 4:25
  by air sirens,
• 4:25
  because it's not just nighttime strikes anymore,
• 4:27
  it's also daytime.
• 4:29
  And so,
• 4:29
  you know,
• 4:30
  Putin thinks that he can use this brutality to try to bend Ukraine to its will,
• 4:33
  to his will,
• 4:33
  and I think he's wrong about that,
• 4:35
  but
• 4:36
  it's going to be very,
• 4:36
  very difficult for Ukraine.
• 4:39
  Well,
• 4:39
  the Kremlin's implied that their goal here
• 4:41
  leading into the winter is to basically drive people out of the urban centers,
• 4:45
  you know,
• 4:46
  to,
• 4:46
  to,
• 4:46
  to leave the cities.
• 4:47
  I mean,
• 4:47
  to depopulate the,
• 4:49
  the,
• 4:49
  the cities.
• 4:50
  What do you make of,
• 4:51
  you mentioned the,
• 4:52
  the,
• 4:52
  uh,
• 4:52
  the,
• 4:52
  the Iskander,
• 4:53
  the ballistic missile launches.
• 4:55
  What do you make of the,
• 4:56
  the recent
• 4:58
  situation where,
• 4:59
  uh,
• 5:00
  the Ukrainian
• 5:01
  military and government said,
• 5:03
  You know,
• 5:03
  they,
• 5:03
  he was targeted by,
• 5:05
  I believe it was 5,
• 5:06
  Russian ballistic missiles,
• 5:08
  and
• 5:09
  they were unable to get any warning of the launch.
• 5:14
  Right,
• 5:15
  it's actually the other day we saw one of the biggest,
• 5:17
  uh,
• 5:18
  ballistic missile,
• 5:19
  uh,
• 5:19
  salvos of the,
• 5:20
  of the war,
• 5:21
  39,
• 5:22
  according to Zelensky.
• 5:23
  Again,
• 5:24
  this Iskandor and the cheaper RM-48U.
• 5:26
  Um,
• 5:27
  so I,
• 5:27
  I think with the intelligence,
• 5:29
  it sounds,
• 5:30
  there have been very,
• 5:31
  very credible reports saying the,
• 5:32
  the Trump administration has threatened to cut that off
• 5:36
  if Ukraine does not.
• 5:38
  Uh,
• 5:38
  you know,
• 5:38
  accede to its demands of halting the tax on oil refineries,
• 5:42
  that and the whatever meager supply of Patriot missiles
• 5:46
  is still getting to Ukraine to counter that threat.
• 5:49
  Um.
• 5:50
  I think so far it sounds like the intelligence has not been cut off.
• 5:54
  You know,
• 5:54
  President Trump said this.
• 5:55
  I think Zelensky
• 5:56
  alluded to this as well.
• 5:57
  And actually their Ukrainian Air Force spokesman the other day said,
• 6:01
  You know,
• 6:02
  we didn't get warning on basically the first wave
• 6:05
  of the attack and we did on subsequent waves,
• 6:07
  and that that happens.
• 6:08
  It's not unheard of,
• 6:10
  especially if you think about ballistic missiles that are ground launched,
• 6:13
  less,
• 6:14
  less kind of response warning time
• 6:16
  compared to,
• 6:16
  say,
• 6:17
  you know,
• 6:17
  an air launch cruise missile where you can see the,
• 6:20
  you know,
• 6:20
  the missiles being loaded onto the onto the aircraft and you
• 6:24
  see it fueling up and you have much more time,
• 6:26
  including the flight time
• 6:27
  of the missile itself.
• 6:28
  So,
• 6:28
  um,
• 6:29
  I think that early warning is still happening.
• 6:31
  If the US were to cut off any sort of intelligence sharing,
• 6:34
  I suspect they would start with
• 6:37
  the kind of targeting data that's helping Ukraine
• 6:40
  conduct attacks inside Russia.
• 6:43
  Yeah.
• 6:43
  How critical at this stage of the game,
• 6:45
  right?
• 6:45
  4+ years into it,
• 6:47
  almost going on 5.
• 6:49
  You know,
• 6:49
  early stages,
• 6:51
  uh,
• 6:51
  US intel sharing
• 6:52
  on targeting data was,
• 6:54
  was critical,
• 6:55
  absolutely critical.
• 6:56
  Uh,
• 6:56
  what's your assessment now?
• 6:58
  I mean,
• 6:58
  to what degree,
• 6:59
  um,
• 7:00
  has the Ukrainian military and their intel service been
• 7:03
  able to fill that gap so that if,
• 7:04
  if that does happen,
• 7:05
  if Trump's
• 7:06
  irritation,
• 7:07
  however you want to refer to it,
• 7:09
  with Zelensky.
• 7:10
  Uh,
• 7:10
  continues and it does impact intelligence sharing,
• 7:14
  uh,
• 7:14
  would it have the same impact as it would have had early on in the war?
• 7:19
  So Ukraine gets intelligence from,
• 7:21
  you know,
• 7:22
  Europeans,
• 7:22
  and even these days the thing has
• 7:24
  a small number of its own,
• 7:26
  uh,
• 7:26
  you know,
• 7:26
  kind of contracted satellites that it uses for its military intelligence service.
• 7:31
  Um,
• 7:31
  so it's not like there'd be zero intelligence,
• 7:33
  but,
• 7:34
  you know,
• 7:34
  nobody has the resources of the United States intelligence community.
• 7:38
  Um,
• 7:39
  and so certainly there'd be a
• 7:40
  pretty significant drop off.
• 7:42
  I think
• 7:43
  it'd be most impactful for air defense.
• 7:46
  And so,
• 7:46
  you know,
• 7:47
  the situation for Ukrainian civilians in cities
• 7:49
  and infrastructure would get even worse.
• 7:51
  More people would die,
• 7:52
  more things would be destroyed.
• 7:54
  I don't think it would be decisive in terms of,
• 7:56
  like,
• 7:57
  you know,
• 7:57
  breaking Ukraine,
• 7:59
  allowing Putin to impose his imperialistic
• 8:02
  demands.
• 8:03
  I think Ukrainian forces
• 8:05
  on the front lines would still continue to hold,
• 8:08
  um,
• 8:08
  but it would be quite a bit tougher.
• 8:12
  It is,
• 8:14
  it is worrisome and,
• 8:16
  and obviously,
• 8:16
  it's speculation.
• 8:17
  President Trump said they haven't stopped intel sharing,
• 8:20
  but his threats to do so certainly have rattled NATO.
• 8:24
  They're concerned about this and they've stepped up their own
• 8:27
  efforts.
• 8:28
  But,
• 8:28
  um,
• 8:29
  when you combine those threats
• 8:31
  with then this disruption,
• 8:34
  uh,
• 8:34
  in StarShield,
• 8:36
  uh,
• 8:36
  the,
• 8:37
  the military version of,
• 8:38
  of Starlink.
• 8:39
  And the problems that that now
• 8:42
  currently are causing the Ukrainian military,
• 8:44
  it does.
• 8:45
  You know,
• 8:46
  there's always coincidences,
• 8:47
  but sometimes you have to look and say,
• 8:49
  what,
• 8:49
  what is going on here?
• 8:51
  Right.
• 8:52
  Yeah,
• 8:52
  certainly the Ukrainians suspect that that that was no coincidence,
• 8:56
  just,
• 8:56
  I mean,
• 8:56
  the timing would be
• 8:57
  pretty incredible if that were just a technical glitch.
• 9:00
  It does sound like
• 9:01
  it's been turned back on,
• 9:03
  the throttling has stopped.
• 9:04
  So basically what was happening was,
• 9:06
  um,
• 9:06
  for StarShield,
• 9:07
  again,
• 9:08
  as you said,
• 9:08
  the military version of Star Lake.
• 9:11
  When,
• 9:12
  when the terminals,
• 9:13
  the things that receive the
• 9:14
  signal from the satellite,
• 9:16
  were going above a certain speed,
• 9:18
  maybe,
• 9:19
  you know,
• 9:19
  160 kilometers per hour,
• 9:21
  sometimes even much,
• 9:22
  much lower,
• 9:23
  70 or 80.
• 9:24
  Uh,
• 9:24
  they were losing connection and so
• 9:26
  that prevents you from,
• 9:27
  for example,
• 9:29
  using a Starlink controlled drone
• 9:31
  to conduct a strike against Russian logistics in the occupied territories.
• 9:35
  Um,
• 9:36
  it inhibits Ukrainian logistic drones and
• 9:40
  even vehicles who are moving fast enough with a Starlink,
• 9:43
  for example.
• 9:45
  And there were actually also some of Ukraine's defenses
• 9:48
  against
• 9:49
  kind of their newer,
• 9:50
  more recently developed defenses against
• 9:53
  Russian
• 9:54
  jet powered Iran 4 and 5,
• 9:57
  also use Starlink.
• 9:58
  So that was inhibited.
• 9:59
  It sounds like it's been turned back on.
• 10:01
  Um,
• 10:02
  as of this morning,
• 10:03
  Ukrainian units were reporting,
• 10:04
  uh,
• 10:05
  you know,
• 10:05
  the access had been restored,
• 10:08
  you know.
• 10:09
  Still have no explanation from the from Washington or the Pentagon though.
• 10:12
  So that,
• 10:13
  that to me is pretty strange.
• 10:14
  Um,
• 10:15
  and again,
• 10:16
  you know,
• 10:16
  again,
• 10:16
  as we said,
• 10:17
  the timing
• 10:18
  is very,
• 10:18
  very suspect,
• 10:19
  even it's coming on the heels of this war of words between Trump and Zelensky,
• 10:23
  uh,
• 10:23
  you know,
• 10:23
  that we've mentioned.
• 10:25
  Yeah,
• 10:25
  it is,
• 10:26
  it is fascinating and
• 10:28
  one of the,
• 10:28
  it's,
• 10:28
  it's kind of an absurd part of the whole story
• 10:32
  about the Star Shield and the disruption to services,
• 10:35
  but
• 10:35
  according to some,
• 10:36
  uh,
• 10:37
  credible reporting from inside the creative military,
• 10:39
  they didn't,
• 10:39
  they had no idea what was going on
• 10:41
  when it happened,
• 10:42
  and they had to call the
• 10:43
  customer support line,
• 10:45
  which
• 10:46
  again,
• 10:46
  In a way,
• 10:47
  is remarkable in today's world,
• 10:50
  right?
• 10:50
  I mean,
• 10:50
  they're,
• 10:51
  they're engaged in
• 10:52
  defense of their country from a,
• 10:54
  an invasion
• 10:55
  by
• 10:56
  Putin's military and
• 10:57
  there they are on,
• 10:58
  I'm,
• 10:58
  I'm,
• 10:59
  I'm,
• 10:59
  I'm oversimplifying it,
• 11:00
  but they're trying to reach somebody in customer support.
• 11:02
  And I think we all know what that's like,
• 11:04
  uh,
• 11:05
  trying to get somebody on the line.
• 11:07
  Uh,
• 11:08
  well,
• 11:08
  listen,
• 11:09
  I,
• 11:10
  I think if we,
• 11:11
  if,
• 11:11
  if you,
• 11:12
  if,
• 11:12
  if,
• 11:12
  if we step back just a little bit
• 11:14
  and we look at,
• 11:17
  Where
• 11:18
  we are in terms of any possible
• 11:22
  negotiated settlement.
• 11:26
  Where do you think that stands?
• 11:30
  Right,
• 11:30
  so,
• 11:30
  um,
• 11:31
  not a great place to,
• 11:33
  in short,
• 11:33
  I think,
• 11:34
  you know,
• 11:34
  Putin is just
• 11:36
  Despite the fact that his forces are not doing well on the battlefield,
• 11:40
  still clinging to these demands that outstrip,
• 11:45
  you know,
• 11:45
  military means,
• 11:47
  namely,
• 11:48
  first of all,
• 11:49
  you know,
• 11:49
  the rest of the Donbass,
• 11:51
  this region in eastern Ukraine
• 11:53
  that he's been trying to capture basically since
• 11:56
  the invasion of failed
• 11:59
  in
• 12:00
  winter of 2022.
• 12:01
  And so,
• 12:03
  you know,
• 12:03
  Russian forces are still in some areas making very slow gains.
• 12:07
  In some areas,
• 12:07
  the Ukrainians are actually taking back some chunks of territory.
• 12:11
  Um,
• 12:11
  but Putin is still insisting on this,
• 12:13
  on this demand.
• 12:14
  Fresensky.
• 12:15
  It's a red line,
• 12:16
  both for military and political reasons.
• 12:18
  And then you have kind of a host of other demands from the Russians
• 12:21
  regarding Ukrainian geopolitical status,
• 12:24
  uh,
• 12:24
  it's right to host
• 12:25
  Western forces,
• 12:26
  join NATO,
• 12:27
  etc.
• 12:28
  Um,
• 12:28
  it's sort of,
• 12:30
  we could call,
• 12:31
  um,
• 12:32
  legal changes to codify Russian cultural influence inside Ukraine.
• 12:36
  So those are all on the table.
• 12:38
  Um,
• 12:38
  and there's no indication Putin is budging on that.
• 12:41
  Um,
• 12:42
  I think
• 12:43
  recognizing this,
• 12:44
  one
• 12:45
  kind of more immediate,
• 12:47
  perhaps a little bit
• 12:48
  more achievable goal is,
• 12:50
  is this energy truce that,
• 12:52
  uh,
• 12:52
  you know,
• 12:52
  the White House had made some attempts to lobby the Kremlin for.
• 12:56
  Um,
• 12:56
  basically the idea is,
• 12:57
  is,
• 12:57
  you know,
• 12:58
  on both sides,
• 12:59
  you stop attacking the other's
• 13:01
  energy infrastructure,
• 13:02
  as we discussed,
• 13:02
  the Kremlin has been rejecting that.
• 13:04
  Um,
• 13:05
  and,
• 13:05
  and,
• 13:06
  and so it really hasn't gone anywhere.
• 13:07
  I think what's unfortunate is that we met with that
• 13:10
  resistance,
• 13:11
  um,
• 13:12
  President Trump's,
• 13:13
  um,
• 13:15
  Instinct or his reaction was to
• 13:17
  just kind of try to force Ukraine into a unilateral
• 13:21
  concession.
• 13:22
  And,
• 13:22
  you know,
• 13:22
  obviously that that's not going to fly.
• 13:24
  I think
• 13:25
  both for Ukraine's sake and for President Trump's,
• 13:28
  the sake of President Trump's own goals
• 13:30
  of A,
• 13:31
  lowering diesel prices,
• 13:33
  and then B,
• 13:34
  kind of eventually getting to a place with,
• 13:36
  with,
• 13:36
  with Putin where he's able to strike a deal.
• 13:39
  It would be in President Trump's interest to
• 13:41
  push for something that's,
• 13:42
  that's bilateral,
• 13:42
  it's mutual.
• 13:43
  Um,
• 13:44
  you know,
• 13:45
  if,
• 13:45
  if Ukraine's not going to stop striking,
• 13:47
  and there's no indication they will,
• 13:48
  they've resumed strikes on refineries today,
• 13:50
  um,
• 13:51
  you're,
• 13:51
  you're not going to really get substantially more
• 13:53
  Russian diesel to market and lower prices.
• 13:55
  If the
• 13:56
  refineries are able to have calm,
• 13:58
  then you can.
• 13:59
  Um.
• 14:00
  Uh,
• 14:00
  Obviously for you,
• 14:01
  I do think President Trump actually some part of it does care about humanitarian,
• 14:05
  you know,
• 14:06
  aspects in Ukraine.
• 14:07
  And so I think he does care about civilians there.
• 14:09
  Um,
• 14:10
  and,
• 14:10
  and right now I think the White House is undercutting its own,
• 14:14
  what has been its,
• 14:14
  it's consistent,
• 14:15
  um,
• 14:16
  negotiating position with the Russians going back to last year,
• 14:18
  which is
• 14:19
  we don't do business deals
• 14:21
  or sanctions relief until
• 14:23
  there's a deal.
• 14:24
  And so I,
• 14:25
  in recent weeks that's out the door.
• 14:27
  It it is,
• 14:28
  and,
• 14:28
  and I worry it's going more out the door
• 14:30
  because there's some White House officials who think,
• 14:32
  OK,
• 14:33
  not just the diesel thing,
• 14:34
  which is really driven more by electoral considerations,
• 14:36
  but also,
• 14:37
  you know,
• 14:37
  other business deals with Russia,
• 14:40
  you know,
• 14:40
  done now prematurely
• 14:42
  could
• 14:43
  in their mind.
• 14:44
  generate momentum.
• 14:44
  And I think that's
• 14:46
  the Kremlin probably reads that not as,
• 14:48
  as,
• 14:48
  uh,
• 14:48
  you know,
• 14:49
  a sign of goodwill,
• 14:49
  but as
• 14:50
  a sign of irresolution.
• 14:52
  And so I think I found Putin that just tells me,
• 14:54
  OK,
• 14:54
  here's mush.
• 14:55
  I'm going to push more.
• 14:56
  I'm going to double,
• 14:56
  kind of dig my heels in on these,
• 14:58
  on these demands,
• 14:59
  and
• 15:00
  at the very least try to intensify military pressure
• 15:03
  to exploit this,
• 15:04
  this friction between the US and Ukraine.
• 15:06
  So I think
• 15:08
  that's classic,
• 15:08
  yeah.
• 15:09
  That,
• 15:09
  that,
• 15:09
  that's a classic US,
• 15:11
  you know,
• 15:11
  not just this administration,
• 15:12
  but any administration.
• 15:13
  The idea that,
• 15:14
  you know,
• 15:15
  uh,
• 15:16
  another
• 15:16
  culture or another country is going to
• 15:19
  respond or process
• 15:20
  offers or
• 15:22
  information or
• 15:23
  negotiations the same way that we would,
• 15:25
  right?
• 15:26
  So,
• 15:26
  oh,
• 15:26
  let's make a deal.
• 15:27
  Putin's gonna love a deal.
• 15:28
  He's gonna look at it as goodwill.
• 15:30
  Well,
• 15:30
  you know,
• 15:31
  again,
• 15:31
  what a load of crap.
• 15:32
  Um,
• 15:34
  oh,
• 15:34
  wait a minute.
• 15:36
  I just,
• 15:37
  I was about ready to climb up on my soapbox there,
• 15:39
  John.
• 15:39
  Uh,
• 15:40
  listen,
• 15:40
  if you'll stay right where you are,
• 15:42
  uh,
• 15:42
  I,
• 15:43
  we do have to take a quick break,
• 15:45
  we'll be back with more from John Hardy right here on the Situation Report,
• 15:49
  so don't go anywhere.
• 15:50
  Hey,
• 15:51
  Mike Baker here.
• 15:52
  Let me take just a minute to talk to you about an incredibly important subject.
• 15:55
  I mean the absolute key to your health.
• 15:57
  I'm talking about
• 15:59
  sleep.
• 15:59
  So,
• 15:59
  let me ask you a question.
• 16:01
  Do you snore?
• 16:01
  I know it's a personal question.
• 16:03
  And as a result of snoring,
• 16:04
  did somebody,
• 16:05
  I don't know,
• 16:05
  maybe your partner,
• 16:06
  hand you a CPAP machine?
• 16:08
  And then,
• 16:09
  well,
• 16:09
  did you just stop using it?
• 16:11
  CPAP users know,
• 16:12
  right?
• 16:13
  The mask never quite seals,
• 16:14
  the,
• 16:15
  the hose is tugging at you every time you roll over,
• 16:17
  and eventually,
• 16:18
  like the rowing machine and the exercise bike.
• 16:21
  The CPAP machine ends up sitting abandoned in a closet.
• 16:24
  Well,
• 16:24
  here's your answer.
• 16:25
  Excite OSA works a different way.
• 16:28
  It treats a root cause instead of
• 16:30
  just managing the noise,
• 16:31
  and you use it while you're awake.
• 16:33
  It's an FDA cleared prescription device for primary snoring
• 16:36
  and mild obstructive sleep apnea.
• 16:39
  20 minutes once a day,
• 16:41
  that's it.
• 16:41
  Maybe while the coffee.
• 16:42
  Maybe while you'll watch an episode of something
• 16:45
  daily for 6 weeks,
• 16:46
  then a lighter routine to keep it.
• 16:48
  Most people notice a change in 4 to 6 weeks,
• 16:51
  and in clinical studies,
• 16:52
  90%,
• 16:53
  that's 90,
• 16:54
  90% of patients saw a reduction in snoring.
• 16:57
  And getting started is straightforward.
• 16:59
  There's no sleep lab,
• 17:00
  there's no appointments,
• 17:01
  there's no sitting around a waiting room.
• 17:03
  You answer a few questions.
• 17:04
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• 17:04
  a licensed provider reviews them
• 17:06
  and it ships straight to your door.
• 17:08
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• 17:09
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• 17:14
  and use code PDB for 20% off.
• 17:16
  Again,
• 17:16
  that's exciteOSA at springsleep.com/PDB.
• 17:21
  And of course,
• 17:22
  thanks very much to Spring Sleep
• 17:24
  for sponsoring this episode.
• 17:26
  Disclaimer,
• 17:27
  Excite OSA is an FDA cleared prescription-only device
• 17:31
  for primary snoring and mild obstructive sleep apnea.
• 17:34
  It's not for everyone.
• 17:35
  Individual results may vary.
• 17:37
  Check out the risks and benefits
• 17:39
  at springsleep.com.
• 17:42
  Welcome back to the PDB Situation Report.
• 17:44
  Joining me once again is John Hardy.
• 17:47
  He's the deputy director of the Foundation
• 17:49
  for Defense of Democracy's Russia program.
• 17:51
  John,
• 17:51
  thanks very much for sticking with us.
• 17:54
  Glad to do it
• 17:55
  Excellent.
• 17:56
  Listen,
• 17:56
  um,
• 17:57
  in the last segment,
• 17:58
  uh,
• 17:58
  you touched on the idea of sanctions,
• 18:00
  um,
• 18:01
  and the whole concept of,
• 18:03
  of fuel exports.
• 18:04
  Uh,
• 18:05
  the White House just eased sanctions
• 18:08
  on Putin,
• 18:09
  um,
• 18:10
  for the fuel exports in an effort perhaps,
• 18:13
  if you want more cynical,
• 18:14
  to
• 18:14
  lower diesel prices ahead of the US midterms.
• 18:17
  Um,
• 18:19
  It is a,
• 18:20
  it's a fascinating sort of sidebar conversation
• 18:23
  about how Putin
• 18:25
  views
• 18:26
  what he's seeing from the White House right now,
• 18:28
  where it seems Trump has once again decided that it's Zelensky's fault,
• 18:33
  uh,
• 18:33
  that there's no deal,
• 18:34
  that it's Zelensky's fault.
• 18:36
  He did blame him for,
• 18:37
  for fuel prices in the US.
• 18:40
  It does make you wonder
• 18:41
  what Putin is doing other than sitting in
• 18:43
  his chair chuckling while stroking his hairless cat.
• 18:48
  Well,
• 18:48
  I think
• 18:50
  that's,
• 18:51
  that's a great,
• 18:51
  uh,
• 18:52
  great visual.
• 18:53
  Um,
• 18:54
  I think,
• 18:54
  yeah,
• 18:54
  to put a finer point on it,
• 18:56
  if you think about
• 18:57
  this,
• 18:58
  this diesel deal,
• 18:59
  so
• 19:00
  according to President Trump's Truth Social post,
• 19:02
  it's something like 300,000 tons
• 19:04
  within,
• 19:05
  you know,
• 19:05
  October,
• 19:06
  another 500,000
• 19:07
  in November.
• 19:08
  After that,
• 19:08
  it's somewhat dependent on
• 19:10
  whether Ukraine stops strikes and what refinery capacity Russia has.
• 19:14
  I mean,
• 19:15
  300,000 tons is actually less than
• 19:19
  all of American demand for a single day.
• 19:22
  And so,
• 19:22
  um,
• 19:23
  I think it's something like
• 19:24
  even all the,
• 19:25
  all the tonnage that President Trump mentioned in his
• 19:29
  post,
• 19:29
  something like,
• 19:30
  you know,
• 19:30
  4.8
• 19:32
  million tons.
• 19:33
  That's about 0.25%
• 19:36
  of global demand.
• 19:38
  So you just
• 19:39
  consider that the tons we're talking about,
• 19:41
  the volumes,
• 19:42
  it's not going to make a significant difference
• 19:45
  for prices,
• 19:46
  certainly not before the midterms.
• 19:47
  So I think this is really kind of for show,
• 19:51
  um,
• 19:52
  like I said earlier.
• 19:53
  could
• 19:53
  make a difference is if
• 19:55
  you know,
• 19:56
  these Russian refineries are actually allowed to
• 19:57
  be prepared and you get full capacity.
• 19:59
  So
• 20:00
  instead of having,
• 20:01
  you know,
• 20:01
  very depressed
• 20:03
  amounts of exports each month,
• 20:05
  you start to get them back towards
• 20:07
  the maybe
• 20:08
  I think it's like
• 20:09
  3 million tons
• 20:11
  or so,
• 20:11
  like around that rate,
• 20:13
  um,
• 20:14
  uh,
• 20:14
  and,
• 20:14
  you know,
• 20:14
  every month.
• 20:15
  I think,
• 20:15
  you know,
• 20:15
  that,
• 20:16
  that could make a significant difference.
• 20:17
  Ultimately,
• 20:18
  of course,
• 20:19
  I think what what market analysts would say is,
• 20:21
  is the trade of Hormuz,
• 20:22
  that situation is having the biggest impact.
• 20:24
  So,
• 20:24
  you know,
• 20:25
  how much Russia would even affect it,
• 20:27
  I'm not sure.
• 20:28
  Well,
• 20:28
  of course,
• 20:29
  uh,
• 20:29
  you know,
• 20:29
  every,
• 20:30
  every dollar that,
• 20:31
  you know,
• 20:31
  goes
• 20:32
  to the Kremlin,
• 20:34
  you know,
• 20:34
  as a result of being able to sell more fuel,
• 20:37
  helps to fuel their war machine and that would be
• 20:40
  Ukraine's perspective on this.
• 20:42
  Uh,
• 20:42
  I mean,
• 20:42
  there's some,
• 20:43
  there's some inequities here that are very interesting.
• 20:45
  I find sort of the,
• 20:46
  the machinations,
• 20:47
  uh,
• 20:47
  and the,
• 20:47
  the strategy that's coming,
• 20:49
  uh,
• 20:49
  from the White House about this.
• 20:50
  And I agree with you.
• 20:52
  I think,
• 20:52
  you know,
• 20:52
  the president genuinely wants to see an end to this war for humanitarian reasons.
• 20:57
  Most people do.
• 20:58
  Um,
• 20:59
  but
• 21:00
  You know,
• 21:01
  it,
• 21:01
  it,
• 21:01
  it seems,
• 21:03
  um,
• 21:04
  a bit at odds
• 21:05
  with reality to then propose after that sort
• 21:08
  of bizarre unilateral ceasefire announcement on Truth Social,
• 21:12
  to then say,
• 21:12
  well,
• 21:12
  we'll do a refinery for refinery
• 21:15
  negotiated deal.
• 21:17
  Uh,
• 21:18
  because my understanding is
• 21:20
  Ukraine doesn't have a functioning refinery.
• 21:22
  That's,
• 21:23
  that's exactly the point I was going to make.
• 21:24
  Yeah,
• 21:25
  pretty,
• 21:25
  um,
• 21:26
  not exactly equal there.
• 21:28
  Um,
• 21:28
  you know,
• 21:28
  what Ukraine does have and rely on,
• 21:30
  of course,
• 21:31
  is power plants,
• 21:31
  and you know Russia has been
• 21:33
  struck maybe you know 3 or 4 of those just in the past few days and dozens of other
• 21:38
  energy and other critical infrastructure targets and
• 21:41
  Um,
• 21:41
  I think when you're thinking about,
• 21:43
  you know,
• 21:43
  how to deal with the Kremlin,
• 21:45
  and,
• 21:45
  you know,
• 21:46
  how to,
• 21:46
  how to get to a place where there's actually some
• 21:49
  space for a deal,
• 21:51
  uh,
• 21:51
  I'd want to be reducing their energy revenue,
• 21:54
  not,
• 21:54
  not increasing it.
• 21:55
  Of course,
• 21:56
  the,
• 21:56
  you know,
• 21:57
  to President Trump's credit,
• 21:58
  he initially started to do that back in October 2025,
• 22:01
  and the Treasury Department put sanctions on Russia's two biggest oil companies
• 22:05
  that added on to sanctions put on two smaller companies at the
• 22:09
  waning days of the Biden administration.
• 22:11
  And that really was,
• 22:12
  was having a bite
• 22:14
  on the Russian
• 22:16
  oil revenue and and in turn the federal budget,
• 22:18
  which
• 22:19
  takes around 20,
• 22:20
  2,
• 22:20
  25% of its market.
• 22:22
  Go ahead.
• 22:23
  So what,
• 22:23
  I'm,
• 22:24
  I'm sorry for interrupting,
• 22:25
  John,
• 22:25
  but I,
• 22:25
  I was just being mindful of time,
• 22:26
  but,
• 22:27
  but,
• 22:27
  so what changed?
• 22:29
  So what changed really was,
• 22:31
  was a,
• 22:32
  to begin with,
• 22:32
  there was never really enforcement of,
• 22:34
  of those sanctions.
• 22:35
  So
• 22:36
  the Russians quickly
• 22:37
  said,
• 22:37
  OK,
• 22:38
  we're not going to move money,
• 22:39
  at least on paper,
• 22:40
  you know,
• 22:40
  from or move oil rather from these,
• 22:42
  these sanctioned companies,
• 22:43
  we're going to have kind of cut out middlemen do it for us.
• 22:46
  And usually what you're supposed to do is,
• 22:48
  is come and say,
• 22:49
  OK,
• 22:49
  now.
• 22:49
  Those middlemen,
• 22:50
  they're sanctioned to,
• 22:52
  you know,
• 22:52
  kind of play whack a mole on those schemes.
• 22:55
  Um,
• 22:55
  Trump administration never did that.
• 22:57
  And then,
• 22:57
  of course,
• 22:58
  that was,
• 22:58
  was the Iran war.
• 22:59
  And so after that happened,
• 23:00
  you know,
• 23:01
  that the policy went from constricting revenue to just getting
• 23:03
  as much oil in the market as you can.
• 23:05
  And so we,
• 23:06
  you saw this series of waivers
• 23:07
  to kind of facilitate Russian shipments.
• 23:10
  Yeah,
• 23:11
  yeah.
• 23:13
  Uh,
• 23:13
  in the time we've got left,
• 23:14
  John,
• 23:15
  give me your,
• 23:16
  your
• 23:16
  current assessment on the battlefield situation.
• 23:18
  What's happening on the ground?
• 23:22
  And
• 23:22
  so
• 23:23
  we've,
• 23:23
  we've discussed kind of the stalemate.
• 23:24
  I think to put a few more details on it.
• 23:27
  The Ukrainians are doing a really good job
• 23:30
  of using a combination of,
• 23:32
  you know,
• 23:33
  traditional prepared defenses and,
• 23:35
  uh,
• 23:36
  you know,
• 23:36
  mass precision fires,
• 23:38
  especially from drones,
• 23:40
  you know,
• 23:40
  mixed with other kind of traditional arms
• 23:42
  to
• 23:43
  put up a really stout defense against the Russians
• 23:46
  who at the same time,
• 23:47
  due to,
• 23:48
  um,
• 23:48
  you know,
• 23:49
  massive casualties are just
• 23:51
  their force quality
• 23:52
  continues to plunge.
• 23:53
  And so,
• 23:54
  The Russians have tried to
• 23:56
  kind of
• 23:57
  adapt to Ukrainian
• 23:58
  way of fighting and their weaknesses with a lack of manpower
• 24:01
  by using infiltration tactics
• 24:04
  to kind of,
• 24:04
  you know,
• 24:05
  seep through those porous Ukrainian lines.
• 24:06
  The Ukrainians interns have counter
• 24:08
  adapted to that.
• 24:09
  And so
• 24:10
  what you have is basically Russians inching forward in exchange for just massive
• 24:15
  quantities of men.
• 24:16
  Uh,
• 24:16
  you know,
• 24:17
  maybe,
• 24:17
  you know,
• 24:17
  10 go forward
• 24:19
  in drips and drabs of 1 or 2,
• 24:21
  and,
• 24:22
  you know,
• 24:22
  maybe a few survive and they kind of accumulate.
• 24:25
  And so you'll have a situation for maybe 10 or so kilometers.
• 24:28
  They're interspersed positions and it's just a gray zone.
• 24:30
  You don't really know who controls what.
• 24:33
  Um,
• 24:33
  what that also means is that those,
• 24:35
  when Russia takes some territory,
• 24:36
  it's
• 24:37
  That first,
• 24:37
  you know,
• 24:38
  10 kilometers or so is,
• 24:39
  is not really that firmly held.
• 24:40
  So Ukraine has had some success
• 24:42
  in different
• 24:43
  areas in clawing that back,
• 24:45
  including because they are improving
• 24:48
  command and control under their new core system.
• 24:50
  They have a new chief of defense,
• 24:52
  General Drpati,
• 24:53
  who
• 24:53
  I think is going to do a great job,
• 24:55
  is doing a great job of
• 24:57
  kind of,
• 24:57
  you know,
• 24:58
  protecting manpower
• 24:59
  and also,
• 25:00
  uh,
• 25:00
  you know,
• 25:00
  attacking in
• 25:02
  where the where the where the circumstances and the land is worth it.
• 25:08
  So,
• 25:09
  I mean,
• 25:09
  at those casualty rates,
• 25:11
  and there's been talk that perhaps
• 25:14
  Russia would engage in or the Kremlin would engage
• 25:16
  in another mass mobilization after their parliamentary elections.
• 25:20
  Have you heard anything more about that,
• 25:21
  about their personnel situation?
• 25:25
  Right.
• 25:25
  So I think right now,
• 25:27
  uh,
• 25:27
  the Russians are super flush on manpower.
• 25:30
  They're still recruiting somewhere around 30,000 men a month,
• 25:34
  uh,
• 25:34
  probably losing around the same number,
• 25:36
  if not a bit more in,
• 25:38
  in,
• 25:38
  uh,
• 25:38
  killed and wounded.
• 25:40
  Um.
• 25:41
  So I think,
• 25:42
  you know,
• 25:43
  there's pressure on that on on them on the manpower on the manpower front.
• 25:47
  It's not yet at such a situation where
• 25:50
  it's so critical that that Putin would
• 25:52
  take the drastic step of further mobilization,
• 25:54
  which if you remember,
• 25:56
  really
• 25:56
  the most significant protests of this war,
• 26:00
  and they weren't even that big,
• 26:01
  but the most significant ones happened back during September 2022
• 26:04
  when Putin did the first round of mass mobilization,
• 26:06
  kind of forced mobilization
• 26:08
  rather than voluntary
• 26:09
  incentivized by mass,
• 26:10
  you know,
• 26:10
  big payments.
• 26:11
  Um,
• 26:12
  and,
• 26:12
  and he did that only when he really had no other choice because Ukraine had just
• 26:16
  caused the collapse of,
• 26:17
  of,
• 26:18
  of,
• 26:18
  of the of the front in Kharkiv
• 26:20
  oblast due to this,
• 26:21
  you know,
• 26:21
  drastic undermining of Russian lines there.
• 26:24
  So I don't think he's at the point where he would have to do that.
• 26:27
  Um,
• 26:27
  if we get to that point,
• 26:29
  you know,
• 26:29
  we'll,
• 26:29
  we'll see which ways he goes,
• 26:31
  you know,
• 26:31
  of,
• 26:31
  you know,
• 26:32
  making a deal,
• 26:33
  to sign the compromise or
• 26:35
  escalating.
• 26:36
  I think he would probably escalate.
• 26:38
  Um,
• 26:38
  and I,
• 26:39
  I don't think he would.
• 26:40
  I think the political conditions are such that he can get away with it,
• 26:43
  but it would be a little risky and it would be costly
• 26:45
  in terms of the men that would flee Russia
• 26:48
  and in turn,
• 26:48
  you know,
• 26:49
  hurt the economy,
• 26:50
  including the defense industry because of their
• 26:52
  tight labor market.
• 26:55
  Yeah,
• 26:56
  uh,
• 26:56
  finally,
• 26:57
  John,
• 26:57
  I know this is probably a simplistic question,
• 26:59
  maybe a stupid question,
• 27:00
  even although my,
• 27:01
  my mom always told me there's no such thing as stupid questions.
• 27:04
  I gotta disagree with her at this point.
• 27:05
  Over my years,
• 27:06
  I have heard some,
• 27:07
  um,
• 27:08
  and this might be one of them,
• 27:09
  but
• 27:10
  what?
• 27:11
  What
• 27:12
  would break
• 27:14
  The Russian population
• 27:16
  against
• 27:17
  Putin's invasion.
• 27:18
  I mean,
• 27:19
  maybe the mass mobilization,
• 27:20
  but at what point
• 27:22
  do they say enough is enough.
• 27:27
  So if you look at what polling there is out of Russia,
• 27:31
  most Russians want
• 27:33
  an end to the war.
• 27:34
  Um,
• 27:35
  they're,
• 27:35
  but they're sort of apathetic.
• 27:37
  So they're not going to take to the streets and try to topple Putin,
• 27:40
  uh,
• 27:40
  but they would like to see it come to an end.
• 27:42
  They'd like to see creature creature comforts return.
• 27:45
  The issue is that,
• 27:46
  you know,
• 27:47
  Putin,
• 27:48
  on the one hand,
• 27:48
  the Kremlin does monitor
• 27:50
  Russian public opinion,
• 27:51
  you know,
• 27:51
  very carefully.
• 27:52
  On the other hand,
• 27:53
  um,
• 27:53
  it's,
• 27:54
  they've they've tamed.
• 27:55
  Uh,
• 27:56
  the population,
• 27:57
  the opposite kind of destroy the opposition such that Putin is able to,
• 28:01
  to,
• 28:02
  you know,
• 28:02
  he had,
• 28:03
  he had the conditions where he's able to start an unpopular war like this,
• 28:06
  where he's able to do things like mass mobilization
• 28:09
  and and get away with it,
• 28:10
  even though it's of course,
• 28:11
  not in the,
• 28:12
  in either Russia's best interests or
• 28:14
  the will of his population.
• 28:18
  All right,
• 28:18
  man.
• 28:19
  Well,
• 28:19
  I have a feeling we're gonna be talking about this for
• 28:21
  quite some time.
• 28:22
  So,
• 28:22
  I look forward to having you back on.
• 28:24
  John,
• 28:24
  listen,
• 28:24
  thank you,
• 28:25
  uh,
• 28:25
  for,
• 28:26
  for coming back on the Situation Report.
• 28:28
  And,
• 28:28
  uh,
• 28:29
  I hope next time we give you a call,
• 28:30
  you'll pick up the phone and say,
• 28:31
  sure,
• 28:31
  I'll come back.
• 28:33
  Thanks again to John Hardy of the
• 28:35
  Foundation for Defense of Democracy's Russia Program.
• 28:38
  All right,
• 28:38
  coming up next,
• 28:39
  China's latest military maneuvers are
• 28:42
  raising new questions about whether Beijing
• 28:45
  is preparing to blockade Taiwan.
• 28:47
  Steve Yates,
• 28:48
  you know him,
• 28:48
  of the Heritage Foundation,
• 28:50
  joins us to discuss.
• 28:51
  Stay with us.
• 28:52
  Hey,
• 28:53
  Mike Baker here with a tip on how to jumpstart your day.
• 28:56
  Now,
• 28:57
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• 29:00
  especially when it comes to
• 29:01
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  Let me spell that for you,
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  up to 43% off with code PDB
• 29:42
  at mudwater.com.
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  I'll spell that for you one more time.
• 29:45
  It's M U D W T R mdwater.com.
• 29:48
  And after you purchase,
• 29:49
  they'll ask you how your bird heard about it.
• 29:51
  Do me a favor,
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  tell them the PDB set you.
• 29:55
  Welcome back to the PDB Situation Report.
• 29:58
  China is ramping up its military activity
• 30:00
  around Taiwan with a Chinese aircraft carrier
• 30:04
  heading into the Western Pacific
• 30:06
  as the US and Japan prepare for major military exercises in the region.
• 30:10
  The deployment follows another confrontation near Taiwan,
• 30:14
  raising fresh concerns
• 30:16
  about Beijing's intentions
• 30:17
  and whether China is laying the groundwork for a future blockade of the island.
• 30:22
  So,
• 30:23
  is this just another round of Chinese intimidation,
• 30:26
  or are we watching preparations
• 30:28
  for something much bigger?
• 30:30
  And with American forces heavily committed in the Middle East,
• 30:33
  does Beijing
• 30:34
  see an opportunity?
• 30:35
  Well,
• 30:36
  for more on this,
• 30:36
  let me bring in a great friend of the show,
• 30:38
  Steve Yates.
• 30:39
  He's a senior research fellow at the Heritage Foundation
• 30:42
  and the host of the podcast Nation States with Yates
• 30:46
  on the Clay Travis and Buck Sexton podcast Network.
• 30:49
  Thanks very much,
• 30:50
  Steve.
• 30:51
  Hey,
• 30:51
  is Buck Sexton still being a jerk to you?
• 30:54
  Yeah,
• 30:54
  he's rough around the edges sometimes,
• 30:56
  but you know,
• 30:57
  he's a dog guy,
• 30:58
  so all you gotta do is talk to him about your dog and everything just warms right up.
• 31:03
  Yeah,
• 31:03
  good,
• 31:04
  good.
• 31:04
  Well,
• 31:04
  I'm glad,
• 31:05
  I'm glad things are turning the corner.
• 31:07
  Yeah,
• 31:07
  he's very irascible.
• 31:09
  Uh,
• 31:10
  so
• 31:10
  that's my word of the day,
• 31:12
  irascible.
• 31:13
  Uh,
• 31:13
  it's more syllables than I can knit.
• 31:16
  Thanks for being on the show,
• 31:18
  Steve.
• 31:18
  It's always,
• 31:19
  it's always a delight.
• 31:20
  Um,
• 31:21
  even when we talk about things that are
• 31:23
  disconcerting,
• 31:24
  uh,
• 31:24
  as we are
• 31:26
  today.
• 31:27
  Give me the rundown,
• 31:29
  uh,
• 31:29
  on the latest,
• 31:30
  uh,
• 31:31
  from the
• 31:33
  China,
• 31:34
  Taiwan,
• 31:34
  kerfuffle.
• 31:35
  Where do we stand
• 31:37
  and what is the latest provocations that we're seeing from China?
• 31:42
  Well,
• 31:42
  there's a range of them,
• 31:43
  and it's one of these challenges where the movie never really stops,
• 31:46
  so we'll talk about what we know at the moment,
• 31:48
  but it's gonna keep going.
• 31:49
  Uh,
• 31:50
  there's one part of the sort of Chinese buffet
• 31:53
  are what we call gray zone,
• 31:55
  uh,
• 31:55
  harassment,
• 31:56
  uh,
• 31:57
  constrainment or coercion,
• 31:59
  and that's where
• 32:00
  things that could be,
• 32:01
  uh,
• 32:01
  fishing vessels but are not really fishing vessels,
• 32:04
  sometimes military craft,
• 32:06
  increasingly large numbers of military craft that
• 32:08
  will go all the way around Taiwan.
• 32:11
  It's meant to give the impression of a capability
• 32:14
  to cut Taiwan off temporarily,
• 32:17
  uh,
• 32:17
  maybe even to be able to cut off
• 32:20
  supply lines in a time of crisis that would come from the Pacific side of the island,
• 32:25
  and it's somewhat cost-free for China because international markets have not.
• 32:30
  Responded to these kinds of threats,
• 32:33
  the way they have in a kind of hypersensitive way to things in the Middle East,
• 32:38
  uh,
• 32:38
  so insurers are not rising,
• 32:40
  raising premiums,
• 32:41
  there's,
• 32:41
  even though
• 32:42
  there's,
• 32:43
  it's not just chips,
• 32:44
  there's a whole ecosystem that depends on
• 32:47
  the,
• 32:47
  the waterways and airways around Taiwan,
• 32:54
  uh,
• 32:54
  so,
• 32:54
  I'm sorry for interrupting,
• 32:55
  why
• 32:57
  even though I just did.
• 32:58
  Um,
• 32:59
  hey,
• 33:00
  why,
• 33:00
  why is that?
• 33:01
  Why,
• 33:02
  why
• 33:03
  don't insurers,
• 33:04
  why doesn't the transportation industry,
• 33:06
  why don't they take it seriously?
• 33:07
  Is it because they,
• 33:08
  they just don't believe
• 33:09
  it's anywhere in our
• 33:11
  near future?
• 33:12
  Is it because there's just too much else going on?
• 33:16
  Well,
• 33:16
  I just don't think they consider it real yet,
• 33:19
  uh,
• 33:20
  and so,
• 33:21
  uh,
• 33:21
  the difference between the two theaters
• 33:24
  is that some commercial vessels have actually been shot at in the Strait of Hormuz,
• 33:30
  uh,
• 33:30
  and with the Houthis now expanding that theater,
• 33:34
  whereas China
• 33:34
  Has been somewhat strategic in keeping most of its interference
• 33:39
  just around Taiwan and trying to avoid kinetic things.
• 33:44
  Although there are some times when things go bump,
• 33:47
  whether it is,
• 33:48
  and it's expanded to Japan and the Philippines,
• 33:51
  which gets closer to
• 33:53
  Uh,
• 33:53
  what the Middle East theater has been like in terms of real treaty allies,
• 33:57
  but it's really things that would literally
• 33:59
  go bump,
• 34:00
  a ship runs into another ship,
• 34:02
  or they're firing water cannons at each other.
• 34:05
  Uh,
• 34:06
  we haven't had an instance where they're really like blowing something up,
• 34:10
  uh,
• 34:10
  or firing on the command center of
• 34:14
  A tanker that's uh that's trying to carry a lot of fuel,
• 34:18
  uh,
• 34:19
  or these huge,
• 34:20
  huge,
• 34:20
  I mean people can't conceive of how big the container ships are,
• 34:24
  uh,
• 34:24
  that go from that point of the world to everywhere else,
• 34:28
  so
• 34:29
  they haven't taken that commercial hit yet,
• 34:32
  but the capability is there and it's being demonstrated.
• 34:36
  Is it all about,
• 34:37
  from
• 34:37
  Xi Jinping's perspective,
• 34:39
  is it all about just kind of pushing at the margins
• 34:41
  in an effort to,
• 34:42
  to test and probe and see
• 34:45
  what,
• 34:45
  uh,
• 34:45
  how far he can push or what the response is from the West?
• 34:49
  That is a very Chinese way of thinking,
• 34:51
  it's basically a traditional Chinese way of thinking,
• 34:54
  uh,
• 34:55
  and of course the communists are not traditional Chinese,
• 34:58
  the whole idea of the revolution was
• 35:00
  cutting away all of that,
• 35:02
  uh,
• 35:02
  but now it's fashionable again,
• 35:04
  so yes,
• 35:04
  it is kind of,
• 35:06
  tell me where the line is,
• 35:07
  and I will push my toe and then my foot over that line
• 35:10
  and see what happens,
• 35:11
  and if you haven't chopped my foot off,
• 35:13
  then I'll see whether I can make it up to the knee.
• 35:15
  Uh,
• 35:15
  and there's very much that kind of escalation test
• 35:20
  that is going on,
• 35:21
  but also there's a little bit of competition
• 35:24
  inside China about what exactly is the objective.
• 35:28
  Is the objective to take and hold and integrate Taiwan into something
• 35:33
  that goes on and prospers from that point forward,
• 35:36
  or is the idea
• 35:37
  to basically destroy Taiwan,
• 35:39
  or Give some kind of a demonstration of capability,
• 35:43
  where Taiwan basically cedes,
• 35:45
  and so you don't have to have to engage in a war.
• 35:48
  And so a lot of these theories are being tested out.
• 35:52
  Uh,
• 35:52
  I have my own belief is that China does not have the capabilities
• 35:57
  to military take and hold Taiwan.
• 36:00
  And I think that's among the reasons why Xi
• 36:02
  Jinping has purged 80% of his top military leadership,
• 36:07
  is they refuse to give the mafia boss the answer that he is asking for,
• 36:13
  because those who've grown up in the military
• 36:16
  don't want to sacrifice the military in what will be a losing mission,
• 36:20
  if you declare that as the objective.
• 36:23
  Do you think Hong Kong is
• 36:27
  perhaps the model that they'd be going for more likely rather than a,
• 36:31
  a,
• 36:31
  a full-scale military kinetic action?
• 36:35
  Prior to Xi Jinping,
• 36:36
  I think Hong Kong was the model,
• 36:38
  and it's sort of what uh Deng Xiaoping,
• 36:41
  uh,
• 36:41
  the gregarious short leader of of China.
• 36:45
  Who,
• 36:46
  uh,
• 36:46
  famously came to the United States.
• 36:48
  Really,
• 36:48
  you had to,
• 36:49
  you had to comment on it.
• 36:50
  I had to do the altitude.
• 36:52
  I had to do,
• 36:53
  well,
• 36:54
  you know,
• 36:54
  why leave it out of the story?
• 36:56
  And so,
• 36:57
  so you have a short leader of China.
• 37:00
  He comes to America.
• 37:01
  He puts on a 10 gallon hat in Texas,
• 37:03
  which again,
• 37:04
  you accentuate things.
• 37:05
  It's,
• 37:06
  it's cartoon-like,
• 37:07
  but Americans loved it.
• 37:09
  And,
• 37:09
  uh,
• 37:09
  and then they,
• 37:10
  and they reciprocated with
• 37:12
  trillions of dollars of investment.
• 37:14
  Over multiple decades,
• 37:16
  under this idea that,
• 37:17
  you know what,
• 37:18
  we can have this thing that's called one country,
• 37:20
  two system.
• 37:21
  We can be commie commie commie,
• 37:23
  but you guys can be free market,
• 37:25
  but under our sovereignty,
• 37:27
  you can continue to be the the goose that lays the golden eggs,
• 37:30
  we'll take the gold,
• 37:31
  thank you very much,
• 37:32
  you keep being the goose,
• 37:34
  uh,
• 37:34
  and that was sort of the promise.
• 37:37
  Now,
• 37:37
  did Deng Xiaoping mean it?
• 37:38
  I,
• 37:39
  I think he probably did,
• 37:40
  but he's dead and we can't ask him anymore.
• 37:42
  Uh,
• 37:43
  and does Xi Jinping,
• 37:45
  uh,
• 37:45
  believe in that?
• 37:46
  I don't think he does.
• 37:47
  It's actually under Xi Jinping
• 37:49
  that much heavier controls over Hong Kong came into place,
• 37:53
  the imposition of the national security law came into place,
• 37:56
  the,
• 37:57
  the threat that even if you're a Westerner engaging in
• 38:00
  Uh,
• 38:00
  unlawful information exchange,
• 38:02
  which might just be economic data
• 38:05
  from China that you can have your profits and your executives
• 38:10
  seized and tried inside of China.
• 38:12
  That's not one country,
• 38:13
  two systems anymore.
• 38:14
  And so I don't even think Xi Jinping is trying to sell that,
• 38:17
  but I think some of the old guard
• 38:19
  in communist China actually
• 38:21
  is still on that memo and thinks that's the way that's supposed to be going.
• 38:25
  Well,
• 38:25
  you could argue that,
• 38:26
  that Hong Kong has worked,
• 38:29
  uh,
• 38:30
  for the Chinese Communist Party.
• 38:32
  I mean,
• 38:32
  it,
• 38:32
  it,
• 38:32
  it took probably longer brilliantly than they imagined,
• 38:35
  yeah,
• 38:36
  but it's,
• 38:36
  it's
• 38:37
  done the trick.
• 38:38
  And so
• 38:39
  it is interesting that
• 38:41
  Xi Jinping,
• 38:41
  who's not
• 38:43
  stupid.
• 38:44
  And he's also not short,
• 38:45
  by the way.
• 38:47
  He's taller than Doug Xiaoping,
• 38:48
  so is most of.
• 38:49
  Yes,
• 38:49
  he is taller.
• 38:51
  Uh,
• 38:52
  it's surprising that he wouldn't look at that and go,
• 38:54
  all right,
• 38:55
  fine.
• 38:55
  And so that leads you to wonder,
• 38:57
  what's his timeline?
• 38:58
  Does he just not wanna take the time that it would take with Taiwan?
• 39:02
  Well,
• 39:02
  the problem is Hong Kong had a demonstration effect,
• 39:05
  uh,
• 39:05
  and so,
• 39:06
  you don't,
• 39:07
  you,
• 39:07
  the,
• 39:07
  the targets of your offer aren't going to believe it the way a
• 39:11
  lot of people in Hong Kong did at the time of the handover.
• 39:15
  Uh,
• 39:15
  the,
• 39:16
  the very distinguished barrister,
• 39:18
  as I think they call them
• 39:19
  in Hong Kong,
• 39:20
  Martin Lee,
• 39:21
  was an advocate for freedom and democratization,
• 39:24
  uh,
• 39:24
  but would also be very detailed in his
• 39:27
  defense and explanation of what the promises of
• 39:30
  the joint declaration with the British were,
• 39:32
  the fact that it was a registered treaty in the United Nations,
• 39:35
  and here are some covenants that are meant to apply.
• 39:38
  Uh,
• 39:38
  and so,
• 39:39
  I,
• 39:39
  I think that there were a lot of people who didn't
• 39:42
  necessarily want the handover to go the way it did,
• 39:45
  but saw the promise of one country,
• 39:47
  two systems as something to fight for and believe in.
• 39:50
  I think that a lot of those
• 39:52
  hopes are dashed to where you can't sell this pony twice,
• 39:56
  after you've basically taken its hoofs.
• 39:59
  It's my gross analogy for what they did to Hong Kong,
• 40:02
  you know what,
• 40:02
  because I was with you when you were just selling the pony when you started to
• 40:07
  shut up that pony,
• 40:08
  that,
• 40:09
  that,
• 40:09
  yeah,
• 40:09
  a lot of,
• 40:10
  I,
• 40:10
  I often too far,
• 40:10
  you know,
• 40:12
  yeah,
• 40:12
  I think you did.
• 40:13
  He really did.
• 40:14
  You took it one step too far,
• 40:15
  right?
• 40:15
  That's,
• 40:16
  that's exactly right,
• 40:17
  uh.
• 40:18
  Listen,
• 40:19
  Steve,
• 40:19
  uh,
• 40:19
  you know how this show works.
• 40:22
  Despite,
• 40:22
  uh,
• 40:23
  our scintillating conversation and,
• 40:24
  and my,
• 40:25
  my rape,
• 40:26
  you're like,
• 40:26
  wits,
• 40:27
  we do have to take a break.
• 40:28
  Uh,
• 40:29
  so if you'll stay right where we are,
• 40:30
  we'll be right back with more
• 40:32
  from Steve Yates.
• 40:33
  And by the way,
• 40:34
  if you're not listening to his podcast,
• 40:36
  right?
• 40:36
  Nation States with Steve Yates,
• 40:38
  I don't know what you're doing with your time.
• 40:40
  Anyway,
• 40:40
  we'll be right back,
• 40:41
  so stick around.
• 40:43
  Welcome back to the PDB Situation Report.
• 40:46
  Joining us once again is Steve Yates,
• 40:48
  senior research fellow for China at National Security Policy.
• 40:51
  There he is right there at the Heritage Foundation.
• 40:54
  He's also host of the
• 40:55
  new terrific podcast,
• 40:56
  Nation States with Yates.
• 40:59
  Sometimes I say nation states with Steve Yates because I like to give him
• 41:02
  a full shout out,
• 41:03
  but it's just Yeats because that's alliterative.
• 41:06
  And,
• 41:06
  uh,
• 41:07
  by the way,
• 41:07
  the,
• 41:07
  the way I'm marketing that podcast,
• 41:09
  Steve,
• 41:09
  I hope I get some of your swag at some point.
• 41:12
  Absolutely,
• 41:12
  we gotta,
• 41:13
  we gotta work on that.
• 41:14
  We,
• 41:14
  we,
• 41:14
  we're,
• 41:14
  we are light years behind the Mike Baker standards of the world,
• 41:17
  but we aspire one day,
• 41:20
  one day
• 41:21
  to at least be able to carry said bags with swag behind Mike Baker.
• 41:26
  Well,
• 41:26
  I tell you what,
• 41:27
  I've been pushing.
• 41:27
  I'm,
• 41:28
  this is between you and me.
• 41:29
  Uh,
• 41:29
  I don't think anybody else is,
• 41:30
  is,
• 41:30
  is listening.
• 41:31
  Uh,
• 41:31
  it's not true,
• 41:32
  millions are listening.
• 41:33
  But,
• 41:33
  uh,
• 41:34
  I've been pushing here
• 41:35
  with the PDB team
• 41:37
  for some swag for some time.
• 41:38
  And
• 41:39
  I,
• 41:40
  I don't mind saying,
• 41:41
  one of my
• 41:41
  best ideas,
• 41:42
  I mean,
• 41:43
  in my entire time on this planet
• 41:45
  has been for the President's Daily Brief
• 41:48
  to,
• 41:48
  to have as part of the swag bag.
• 41:51
  President's daily briefs,
• 41:54
  days of the week under,
• 41:57
  sign me up.
• 41:57
  That's pretty clever there.
• 41:58
  I gotta give you credit on that.
• 41:59
  I know,
• 42:00
  I love it.
• 42:00
  That could be my one epiphany
• 42:02
  over all my years.
• 42:03
  That's gonna be it.
• 42:06
  I,
• 42:06
  I know that people haven't tuned in to hear about that,
• 42:08
  but let's,
• 42:09
  let's continue this conversation.
• 42:10
  I'm,
• 42:11
  I'm curious from your perspective,
• 42:13
  to what degree is Xi Jinping.
• 42:16
  Spending his time
• 42:18
  staring at what's happening
• 42:19
  with the Iran conflict.
• 42:21
  And I mean,
• 42:22
  we've talked about how he's viewed the Ukraine conflict,
• 42:25
  but,
• 42:26
  you know,
• 42:26
  I guess we could,
• 42:26
  we could look at both and see to what degree does outside influences,
• 42:30
  the conflicts that are occurring outside of his region,
• 42:33
  have any sort of impact,
• 42:34
  do you think,
• 42:35
  on his mindset
• 42:37
  and strategy towards Taiwan?
• 42:40
  Well,
• 42:40
  there's a few things that I think weigh,
• 42:43
  uh,
• 42:43
  in the direction of he might feel like there's a window that is closing
• 42:48
  on him,
• 42:49
  uh,
• 42:49
  and there's some things that might be telling him by watching
• 42:53
  some of these developments in the technologies related in both conflicts,
• 42:57
  that,
• 42:57
  uh,
• 42:58
  his window might already be closed in terms of what they
• 43:01
  might have estimated as an easier operation than it is.
• 43:05
  Now,
• 43:05
  uh,
• 43:06
  what I mean by that is,
• 43:08
  uh,
• 43:08
  you,
• 43:08
  the,
• 43:09
  the kinds of technologies that were used by Ukraine to be able to
• 43:12
  extend its life against what people thought was an outmatched larger foe,
• 43:17
  uh,
• 43:17
  are already spreading around the world,
• 43:20
  and while the,
• 43:21
  the Trump administration
• 43:23
  has uh has uh committed a huge amount of arms to Taiwan for them to purchase,
• 43:30
  I might add,
• 43:30
  not given.
• 43:31
  Uh,
• 43:32
  and there's a 2nd $14 billion tranche that is in waiting,
• 43:37
  uh,
• 43:37
  that would be an historic amount,
• 43:39
  but not waiting for government,
• 43:41
  our private sector is surging capabilities into Taiwan,
• 43:45
  uh,
• 43:45
  one of the conspicuous examples of that is Ander and Palmer Luckey
• 43:49
  going in there with,
• 43:51
  uh,
• 43:51
  it's it's basically commercial to commercial,
• 43:53
  so there's nothing standing in the way.
• 43:55
  Of getting advanced drone,
• 43:56
  uh,
• 43:57
  capabilities
• 43:58
  going in there,
• 43:59
  I guess they call them uncrewed,
• 44:00
  I think that is the politically correct
• 44:03
  form of drone,
• 44:05
  uh,
• 44:08
  I try to keep up on that front,
• 44:10
  but
• 44:13
  that that gap is really important,
• 44:15
  and what it does is it makes a
• 44:17
  a power that is trying to protect and defend.
• 44:21
  Much harder to penetrate,
• 44:23
  much much cheaper
• 44:25
  and easier to frustrate,
• 44:27
  thwart and drain out
• 44:28
  the attacking force.
• 44:30
  And from Japan
• 44:31
  through Taiwan to the Philippines,
• 44:33
  they are racing ahead in that area in the Private sector,
• 44:37
  not having to wait
• 44:38
  for government.
• 44:39
  So I think that,
• 44:39
  and in a way,
• 44:40
  it's giving a fair due to China,
• 44:43
  which has
• 44:44
  mastered gray zone with ships,
• 44:48
  uh,
• 44:48
  where we're just just these fishing boats that are out here.
• 44:51
  Uh,
• 44:52
  and so they've used this as a form of constrainment and harassment.
• 44:56
  Now
• 44:57
  the weaponization of tech is working against them,
• 45:00
  and I think that was demonstrated in Ukraine,
• 45:02
  to some degree,
• 45:03
  the Iran conflict has to give them pause because
• 45:06
  the United States has proven that it can fly from the continental United States,
• 45:10
  drop the mother of all ordinance on a target,
• 45:13
  and it's home before you know what hit you.
• 45:16
  Uh,
• 45:17
  and China and Russia don't have any answer to that yet,
• 45:22
  and I think that's another part of what the
• 45:24
  generals have been raising by way of concerns.
• 45:27
  The last part
• 45:28
  is that the fact of the matter is,
• 45:30
  the United States is still ahead on AI,
• 45:34
  uh,
• 45:34
  and a lot of that application of advanced AI modeling
• 45:38
  and communication in space
• 45:41
  allows us to do some things that I think China's top generals
• 45:44
  are still quite afraid of.
• 45:47
  Yeah,
• 45:47
  I'm not sure,
• 45:48
  uh,
• 45:49
  now this will surprise you,
• 45:50
  but I'm not an AI,
• 45:52
  uh,
• 45:52
  expert,
• 45:53
  but I'm not sure.
• 45:54
  I'm on the artificial side.
• 45:57
  Yeah
• 45:58
  Uh,
• 45:59
  the,
• 45:59
  the,
• 45:59
  the gap between
• 46:01
  the US and China may not be as,
• 46:03
  as wide as people imagine,
• 46:05
  and I would argue,
• 46:06
  given
• 46:07
  the
• 46:08
  PLA,
• 46:09
  given the Ministry of State Security's abilities
• 46:12
  to
• 46:13
  Uh,
• 46:13
  to steal technology,
• 46:15
  I would
• 46:15
  argue that that gap,
• 46:17
  wherever it may be,
• 46:18
  months,
• 46:19
  months apart or a year apart,
• 46:22
  is inevitably shrinking
• 46:24
  because they're,
• 46:24
  they're extremely good
• 46:26
  at hoovering up,
• 46:28
  uh,
• 46:29
  information,
• 46:29
  research and development in particular.
• 46:31
  That story,
• 46:31
  uh,
• 46:32
  I'm sure you saw about the,
• 46:34
  the young Saudi,
• 46:35
  uh,
• 46:36
  employee at,
• 46:37
  at OpenAI who was,
• 46:39
  uh,
• 46:39
  installing a listening device.
• 46:41
  Into,
• 46:42
  uh,
• 46:43
  one of the conference rooms where they have sensitive conversations,
• 46:45
  common classic industrial espionage.
• 46:47
  Now,
• 46:47
  they haven't determined,
• 46:48
  and they haven't publicly said who he's working for.
• 46:52
  I,
• 46:52
  I'd be rather surprised
• 46:54
  if in fact he's probably not China,
• 46:55
  the Saudis,
• 46:56
  as opposed to China.
• 46:59
  Probably not China,
• 47:00
  but it is a tactic that is,
• 47:02
  as you know,
• 47:03
  used by all
• 47:04
  and some.
• 47:06
  Yeah,
• 47:07
  so yeah,
• 47:07
  I mean I think even the State Department famously had a
• 47:10
  had a conference room bugged for some time by the Russians,
• 47:13
  uh,
• 47:13
  that it finally got dug out of there.
• 47:17
  Yeah,
• 47:17
  no,
• 47:17
  they,
• 47:17
  they,
• 47:18
  it's,
• 47:18
  look,
• 47:18
  it,
• 47:19
  it is,
• 47:19
  it,
• 47:19
  it happens.
• 47:20
  Uh,
• 47:20
  my point being that,
• 47:22
  um,
• 47:23
  you know,
• 47:23
  I've,
• 47:24
  even at this stage where it's still speculation,
• 47:26
  of course,
• 47:26
  on,
• 47:26
  on my part and the investigations,
• 47:28
  uh,
• 47:28
  I'm sure ongoing,
• 47:30
  um,
• 47:31
  Yeah,
• 47:32
  I,
• 47:32
  I,
• 47:33
  it,
• 47:33
  it doesn't matter whether it's a Saudi national.
• 47:35
  You know,
• 47:35
  obviously,
• 47:36
  a,
• 47:36
  a prime target is a Chinese national or a Chinese-American
• 47:40
  from the Chinese intel perspective.
• 47:42
  Well,
• 47:43
  they don't care.
• 47:43
  They'll go after anybody that they feel has access,
• 47:46
  uh,
• 47:47
  is accessible,
• 47:48
  maybe has some,
• 47:49
  you know,
• 47:49
  some weaknesses.
• 47:50
  There could be some leverage points that they've identified.
• 47:53
  So,
• 47:54
  uh,
• 47:54
  but the point being anyway is I think that gap between the two is,
• 47:57
  is closing.
• 47:58
  Uh,
• 47:59
  and,
• 47:59
  and as far as weaponization of space and the utility there,
• 48:02
  you know,
• 48:03
  China's been putting a great deal of resource
• 48:05
  into their efforts
• 48:07
  and,
• 48:07
  and people talk about,
• 48:08
  well,
• 48:08
  I don't think we should weaponize space.
• 48:09
  Well,
• 48:09
  that,
• 48:10
  that
• 48:10
  horse left the barn some time ago.
• 48:13
  I agree with that completely,
• 48:14
  uh,
• 48:15
  and,
• 48:15
  uh,
• 48:16
  yeah,
• 48:16
  we,
• 48:16
  we definitely should not think of
• 48:19
  any form of warfare,
• 48:20
  uh,
• 48:21
  as,
• 48:22
  uh,
• 48:22
  one,
• 48:23
  an arena where our enemies that seek to constrain us,
• 48:26
  or worse,
• 48:28
  are not going to be governed by the rules that we pretend that we're going to follow,
• 48:33
  uh,
• 48:33
  and so,
• 48:34
  uh,
• 48:34
  we,
• 48:35
  and we do,
• 48:36
  we do have a pretty commanding lead in terms of quantity.
• 48:40
  Of,
• 48:41
  uh,
• 48:41
  what's up in space that is ours and that we use,
• 48:46
  uh,
• 48:46
  and
• 48:47
  we,
• 48:47
  we still,
• 48:47
  and I wouldn't want to be boastful or sit on our laurels about this,
• 48:51
  but not only do we have the technology,
• 48:53
  we have the entrepreneurial spirit to apply this
• 48:57
  to real world use cases that are being tested in battle now.
• 49:03
  Uh,
• 49:04
  and so,
• 49:04
  uh,
• 49:05
  the Chinese,
• 49:06
  they,
• 49:06
  they have the benefit of no ethics,
• 49:09
  and they can do whatever they want in their country,
• 49:11
  uh,
• 49:11
  and they do have an army of people and technology
• 49:14
  going out in the world to soak up anything and everything
• 49:18
  to their advantage.
• 49:19
  Uh,
• 49:20
  but we do have this test of concept
• 49:23
  that,
• 49:24
  uh,
• 49:24
  you know,
• 49:24
  it's sort of like having the best recruited team in football,
• 49:27
  but they've never taken a snap in a real game.
• 49:30
  Uh,
• 49:31
  and,
• 49:31
  uh,
• 49:32
  then I think they have to at some degree,
• 49:35
  have a degree of humility about that.
• 49:36
  Does Xi Jinping have that humility?
• 49:38
  I don't know,
• 49:39
  and I wouldn't bank on it.
• 49:41
  Uh,
• 49:41
  I also
• 49:42
  don't think that he's the healthiest guy in the world.
• 49:46
  Uh,
• 49:46
  now we have a president who has raised himself on McDonald's,
• 49:51
  uh,
• 49:51
  and yet
• 49:51
  to be a dynamo when it comes to energy.
• 49:54
  Xi Jinping has raised himself
• 49:56
  on what is categorically hard liquor
• 50:00
  for decades.
• 50:01
  Uh,
• 50:01
  and I don't,
• 50:02
  I don't know that he's going to break longevity records.
• 50:06
  Maybe he does.
• 50:07
  There's always those old stories about ladies in the 1860s
• 50:11
  that smoked a pack.
• 50:12
  A day and
• 50:13
  belted it down and they lived to 101.
• 50:16
  But I don't think Xi Jinping is in the greatest of health.
• 50:19
  He's purged all these people.
• 50:21
  The technology is more complicated.
• 50:23
  His targets are getting harder.
• 50:26
  He might personally feel like there's a reason to push on this,
• 50:29
  and he might start to feel some pressure from the politics in China
• 50:33
  that's saying his time is not unlimited.
• 50:36
  Plus this economy is having some significant problems.
• 50:38
  We've been covering that on the PDB,
• 50:41
  uh,
• 50:41
  for,
• 50:42
  for a while now in terms of digging into what that
• 50:45
  economy actually looks like as opposed to how they portray it.
• 50:48
  Let me ask you this though with Taiwan,
• 50:50
  because,
• 50:51
  you know,
• 50:51
  there was a,
• 50:52
  a fair amount of talk,
• 50:55
  um.
• 50:56
  About the idea of,
• 50:57
  of reshoring,
• 50:58
  uh,
• 50:59
  chip capabilities in the US,
• 51:01
  right?
• 51:01
  The idea of being,
• 51:02
  well,
• 51:02
  look,
• 51:02
  I mean,
• 51:02
  obviously,
• 51:03
  you know,
• 51:03
  the biggest issue with Taiwan is if we lose Taiwan,
• 51:05
  we lose,
• 51:06
  you know,
• 51:06
  the,
• 51:07
  the,
• 51:07
  the chip industry.
• 51:09
  And so the thought was,
• 51:10
  let's move it all back to the US.
• 51:11
  What are you hearing about that in terms of actual investments
• 51:15
  from the,
• 51:16
  the key players in the industry?
• 51:19
  Well there are some extremely serious investments,
• 51:22
  uh,
• 51:22
  I mean the TSMC is the most well known
• 51:26
  anywhere in the world,
• 51:27
  it's a substantial portion of Taiwan's GDP,
• 51:30
  but it's also a substantial portion of Arizona's GDP at this point,
• 51:34
  uh,
• 51:34
  and so I mean that that's a just a multiple,
• 51:37
  multiple billion dollar,
• 51:38
  maybe
• 51:39
  gonna be crossing $1 trillion investment.
• 51:42
  Uh,
• 51:43
  and that has substantial implications for the whole ecosystem that comes along.
• 51:48
  It's not just
• 51:49
  the fabs,
• 51:50
  there's a whole ecosystem
• 51:52
  of,
• 51:52
  of,
• 51:52
  of inputs and workforce
• 51:55
  that come along that add to Arizona,
• 51:57
  and there are other locations across the United States,
• 51:59
  and that's just one company.
• 52:01
  Uh,
• 52:02
  there's,
• 52:02
  I think,
• 52:02
  been a little bit of foolish talk and thinking about Taiwan,
• 52:06
  that's been committed by a lot of people that I like,
• 52:08
  but there's this notion that somehow Taiwan is far away.
• 52:12
  Uh,
• 52:12
  and so that we,
• 52:13
  we,
• 52:14
  we get,
• 52:14
  we get out of
• 52:16
  this dilemma of
• 52:17
  can we avoid a conflict with China because all they really want is Taiwan,
• 52:22
  and so if we just reshored the semiconductor industry,
• 52:26
  would we then be OK?
• 52:27
  And the answer to that is a deep,
• 52:29
  deep no,
• 52:30
  because
• 52:31
  our ally Japan has deep equities,
• 52:33
  but it's also the 4th most valuable stock market in the world.
• 52:38
  And so if you imagine missiles landing in Taiwan,
• 52:42
  or some kind of effort,
• 52:43
  even if it fails to try to take Taiwan by blockade of some sort,
• 52:49
  you're gonna have a crash in that stock market,
• 52:51
  and guess what,
• 52:52
  we're not insulated from that either.
• 52:54
  It would,
• 52:55
  it would be an order of magnitude that is greater
• 52:58
  than 1929,
• 52:59
  uh,
• 53:00
  when it comes to our market,
• 53:01
  London's market,
• 53:02
  Middle Eastern markets.
• 53:04
  Uh,
• 53:04
  and so,
• 53:05
  you have,
• 53:06
  there's,
• 53:06
  so this is economic nuclear weapon,
• 53:09
  uh,
• 53:10
  material,
• 53:11
  and we just haven't taken that side of it serious enough.
• 53:13
  And by the way,
• 53:14
  it's not that far from US territory,
• 53:17
  and we're not saying we're not gonna defend US territory.
• 53:20
  Yeah.
• 53:21
  No,
• 53:21
  you,
• 53:21
  you,
• 53:21
  you're raising a really important,
• 53:23
  really important point that sits up there at 30,000 ft,
• 53:26
  uh,
• 53:27
  which is,
• 53:28
  you know,
• 53:28
  how interconnected the world is.
• 53:29
  And,
• 53:30
  yeah,
• 53:30
  I'm sure you're,
• 53:31
  you know,
• 53:31
  you have the same sort of conversations that
• 53:33
  I do occasionally with individuals who think,
• 53:35
  well,
• 53:35
  oh,
• 53:35
  you know,
• 53:35
  let's just draw the curtains around the US.
• 53:37
  We should just worry about the US,
• 53:39
  you know,
• 53:39
  why are we doing these things overseas?
• 53:41
  What,
• 53:41
  and
• 53:42
  Yeah,
• 53:42
  yeah,
• 53:43
  sometimes it's adventurism and it's misguided,
• 53:45
  but sometimes there's a real reason
• 53:47
  for it and,
• 53:48
  and it involves the safety,
• 53:50
  stability,
• 53:50
  and national security of,
• 53:51
  of the US and,
• 53:52
  and our allies.
• 53:54
  Um,
• 53:55
  you know,
• 53:56
  before I get fully up on the,
• 53:57
  uh,
• 53:57
  old soapbox,
• 53:58
  Steve,
• 53:58
  I just looked at the clock on the wall
• 54:01
  and I realized that we're,
• 54:02
  we're out of time.
• 54:04
  Damn it.
• 54:05
  So must have been good.
• 54:07
  Tell,
• 54:07
  tell our,
• 54:08
  tell our,
• 54:08
  tell our wonderful,
• 54:09
  uh,
• 54:10
  viewers and listeners,
• 54:11
  uh,
• 54:11
  where they can catch your podcast.
• 54:14
  Well,
• 54:14
  please,
• 54:14
  uh just,
• 54:15
  you can look up the words nation states with Yeats,
• 54:18
  basically it's available wherever you get your podcast,
• 54:20
  you can use it for free on the iHeart
• 54:23
  app,
• 54:24
  you can even watch a video of the podcast if you are truly daring
• 54:28
  and would like to punish yourself.
• 54:29
  But the audio version,
• 54:31
  very easy to go down.
• 54:33
  Uh,
• 54:33
  and we're,
• 54:34
  we're still in the build-out parts of the operation
• 54:37
  where we're gonna try to make it easily accessible
• 54:39
  on YouTube and other places,
• 54:42
  but you know,
• 54:43
  I'm a child of the 70s and 80s,
• 54:45
  we're getting there,
• 54:47
  and I've got the help of some much more capable people,
• 54:49
  but for now,
• 54:50
  just go wherever you get your podcasts,
• 54:52
  Apple,
• 54:52
  Spotify.
• 54:54
  Uh,
• 54:54
  iHeart and download every single episode of Nation States with Yeats.
• 54:58
  Tell your friends,
• 54:59
  tell them Mike Baker said,
• 55:01
  if you don't do this,
• 55:02
  someone's gonna come knocking.
• 55:04
  Oh yeah.
• 55:05
  Is that why you haven't invited me,
• 55:06
  Steve,
• 55:06
  is because it's still in the build-out stage?
• 55:09
  I actually have not had a guest yet,
• 55:12
  but,
• 55:13
  you know,
• 55:13
  I wanna,
• 55:14
  if you're not,
• 55:15
  I wanna be your first.
• 55:16
  I definitely,
• 55:16
  definitely,
• 55:17
  we're gonna work in returning the favor
• 55:20
  and invite Mike Baker in for a conversation about the importance
• 55:24
  of the nation's state and the issues that affect its fate,
• 55:27
  just because we like to rhyme and alliterate.
• 55:30
  Yeah,
• 55:31
  yeah.
• 55:31
  It's good,
• 55:31
  you could get a run out of energy there real
• 55:33
  soon if you just keep doing that rhyme thing.
• 55:35
  But,
• 55:36
  uh,
• 55:36
  but the good news is,
• 55:37
  Steve,
• 55:38
  to wrap it up is that,
• 55:39
  uh,
• 55:39
  the,
• 55:40
  uh,
• 55:40
  the amazing Nick Rizzuto,
• 55:41
  who's the executive producer for,
• 55:43
  for the PDB operation and myself,
• 55:45
  we're almost finished with your theme song.
• 55:47
  You're gonna love it.
• 55:48
  I can't wait.
• 55:49
  I can't wait.
• 55:51
  Nice.
• 55:52
  All right,
• 55:52
  man.
• 55:52
  Listen,
• 55:52
  thank you as always,
• 55:53
  Steve.
• 55:53
  I look forward to the next one.
• 55:55
  Thanks,
• 55:55
  Mike.
• 55:57
  Well,
• 55:59
  Steve Yates,
• 55:59
  Heritage Fo Foundation,
• 56:00
  again,
• 56:01
  check out his podcast,
• 56:02
  Nation States with Yates.
• 56:04
  That is all the time we have for this week's PDB situation report.
• 56:08
  I know,
• 56:09
  but we'll be back next week.
• 56:10
  Uh,
• 56:11
  if you have any questions or comments,
• 56:12
  maybe a humorous anecdote,
• 56:13
  well,
• 56:14
  reach out to me at PDB at thefirstv.com.
• 56:17
  Please keep your cards and letters coming and every,
• 56:19
  every month we try to compile some of the great questions and
• 56:22
  comments you send along and do an Ask Me Anything episode.
• 56:26
  So as I said,
• 56:27
  keep your cards and letters and faxes.
• 56:29
  Finally,
• 56:29
  listen to the podcast and the show ad-free,
• 56:31
  you can do that.
• 56:32
  It is very,
• 56:33
  very simple.
• 56:34
  Just become a premium member of the President's Daily Brief
• 56:38
  by visiting PDBpremium.com.
• 56:41
  I'm Mike Baker,
• 56:41
  and until next time,
• 56:43
  you know the drill.
• 56:44
  Stay informed,
• 56:45
  stay safe,
• 56:46
  stay cool.