Latest / UK Column Radio / China's Rare Earth Squeeze Cripples America's War Machine | Silk and Steel

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China's Rare Earth Squeeze Cripples America's War Machine | Silk and Steel · UK Column Radio

0:00
Speaker 1: It is July twenty seventh, twenty twenty six, and it's
0:03
Speaker 1: just before seven pm local timecare in Texas, and the
0:07
Speaker 1: Trump administration is trying to act as though everything is fine.
0:10
Speaker 1: They're holding off on their attack against Irani, major attack,
0:15
Speaker 1: because they're trying to give diplomacy a chance, as if
0:18
Speaker 1: they haven't already done that a time or two and
0:20
Speaker 1: then screwed everything up when they've attacked Iran anyway and
0:25
Speaker 1: gone back on every agreement, on every memorandum that there
0:29
Speaker 1: ever was between Washington and Tehran. So what does that
0:34
Speaker 1: actually mean for where the US stands and their ability
0:37
Speaker 1: to continue to wage war? As we've had these glaring
0:41
Speaker 1: reports warning of munition stockpiles being depleted for not just months,
0:47
Speaker 1: but actual years. Now, as we have the fact that
0:51
Speaker 1: China's over here, they're not lifting their expert controls when
0:55
Speaker 1: it comes to the rare earth minerals that they were
0:57
Speaker 1: allowing the US military to gain access to. Now they
1:00
Speaker 1: are sitting back and making sure that they are keeping
1:03
Speaker 1: those restrictions in place. Yes, even as Trump is planning
1:07
Speaker 1: to welcome Chinese President Shijingping to the US in September,
1:12
Speaker 1: he says, we'll be trying to woo him and whine
1:14
Speaker 1: him and dine him as much as he possibly can,
1:17
Speaker 1: trying to get those export controls to be removed. But
1:21
Speaker 1: Beijing is showing no signs of letting up. So what
1:25
Speaker 1: does that mean for the US? What we got into
1:27
Speaker 1: all of that and more with a special guest earlier,
1:31
Speaker 1: So let's take a listen to that conversation. Now. Joining
1:34
Speaker 1: me now to discuss is Carl Zaw, a geopolitical analyst
1:38
Speaker 1: and host of the Silk and Steel podcast. Carl, thanks
1:42
Speaker 1: so much for taking the time to join me.
1:45
Speaker 2: Thank you for inviting you. Rachel.
1:48
Speaker 1: It's great to have you back on the show. Now
1:50
Speaker 1: I want to get your take on the latest here
1:52
Speaker 1: as I know that President Trump told Axios on Monday
1:55
Speaker 1: that he decided to pause US strikes on Iran in
1:59
Speaker 1: order to give negotiations another chances, if they haven't had
2:03
Speaker 1: enough chances already. Not because of the report saying that
2:07
Speaker 1: his advisors were warning about the lack of interceptor missiles
2:11
Speaker 1: the US is facing and how bad this situation would
2:14
Speaker 1: get if the US carried out a major attack, And
2:18
Speaker 1: of course Iran responded. Yet we've had talks, we've had
2:22
Speaker 1: a deal, we had the MoU. The US has violated
2:25
Speaker 1: all of it, and despite all of these warnings, the
2:28
Speaker 1: US keeps you returning to war. So to start out,
2:32
Speaker 1: how do you view the current stage of tensions between
2:35
Speaker 1: the US and Iran?
2:37
Speaker 2: Well, well, Iran controls the Strate of Amuz and US
2:40
Speaker 2: has no military options to force it open, which by
2:44
Speaker 2: the way, was open before US and Israel launch the
2:47
Speaker 2: illegal attack on Irans. The I don't know why Trump
2:52
Speaker 2: restarted the hostility. Maybe he thought that, you know, he
2:57
Speaker 2: can catch Iran off balance. This is very true, by
3:00
Speaker 2: the way, you know Trump, like you said, Trump is
3:03
Speaker 2: unpredictable in predictable ways because he always tried to test
3:10
Speaker 2: his opponent's trying to set them off balance, cast them
3:13
Speaker 2: off guard. But the problem is US still has no
3:17
Speaker 2: cards in this game. United States is still running out
3:20
Speaker 2: interceptor missiles. That has been a known issue since the
3:24
Speaker 2: Twelve Days War. You know Wall Street Journal reported after
3:27
Speaker 2: Twelve Days War they used up about a quarter they
3:32
Speaker 2: used up a quarter supply, and he has gotten even
3:36
Speaker 2: worse now like now there's before coming out. The United
3:40
Speaker 2: States Military Command is trying to figure out which running
3:45
Speaker 2: incoming miss out to intercept in order to save their
3:48
Speaker 2: missile interceptor. That's how dangerously low their stockpiles are. And
3:53
Speaker 2: that situation is not going to improve anytime soon because
3:57
Speaker 2: China still maintained a embargo of rare earthshipment to US
4:03
Speaker 2: military industrial complex, so they won't get their hands on
4:07
Speaker 2: enough real earth to make more missiles anytime soon. That's
4:11
Speaker 2: why it was foolhardy for Trump to restart this conflict
4:15
Speaker 2: because fundamentally United States still has no military options. You know,
4:21
Speaker 2: they try the aerial campaign, that didn't work. They try
4:24
Speaker 2: the blockade on blockade or that didn't work. This is
4:27
Speaker 2: why he had to sign that surrender document ever sigh
4:31
Speaker 2: in the first place. And that then maybe my guess
4:36
Speaker 2: is maybe there's some Israeli pressure, perhaps that drag him
4:40
Speaker 2: back to the war, because we know Israel definitely do
4:43
Speaker 2: not want to see a ceasefire. They want to drag
4:46
Speaker 2: this war as long as possible. They want to weak Iraan,
4:50
Speaker 2: but they know they cannot do it themselves, so they
4:52
Speaker 2: need United States to do it for them. But again,
4:56
Speaker 2: US has really been exposed as a paper tiger in
5:01
Speaker 2: this conflict. All the US bases are being let on
5:04
Speaker 2: fire by Irani and Junes and missiles and you know,
5:08
Speaker 2: one of the demands of yourang is that US withdraw
5:12
Speaker 2: from the region. Well, it looks like what Trump is
5:15
Speaker 2: now willing to concede on the negotiation table has happened
5:18
Speaker 2: on the ground because you run its systematically dismantling all
5:23
Speaker 2: the US bases in the region right now. And these
5:25
Speaker 2: are the installations that took years and billions of dollars
5:29
Speaker 2: to build. They're not going to be put back anytime soon.
5:33
Speaker 2: You know, the golf countries right now, they're probably evaluating
5:37
Speaker 2: their own options. Their old alliance with the United States
5:41
Speaker 2: was premise based on the fact that US is supposed
5:44
Speaker 2: to protect them, extend a security umbrella to protect these countries,
5:49
Speaker 2: but exactly opposite has happened. By hosting the United States
5:54
Speaker 2: military bases made them target. And I have a feeling
5:59
Speaker 2: there's pop some bathroom dealing right now. These countries are
6:03
Speaker 2: probably sending out fuelers to you around trying to negotiate
6:06
Speaker 2: some sort of understanding among themselves. You know, like countries
6:12
Speaker 2: like Kuwait, they haven't been able to sell oil for
6:15
Speaker 2: a month now. And this is a serious issue. This
6:18
Speaker 2: is an existential issue for these countries.
6:21
Speaker 1: Oh absolutely, And you launch as they're in this situation where,
6:25
Speaker 1: like you were saying, the straight up WOORMUS was open
6:27
Speaker 1: before all of this. You have all of these Gulf
6:30
Speaker 1: states that were relying on the US, and yet the
6:33
Speaker 1: Trump administration didn't pick up the phone and tell them, hey,
6:36
Speaker 1: we're going to start this war. They just did it.
6:38
Speaker 1: And now these countries are having to deal with the
6:41
Speaker 1: consequences of it. And when you look at the state
6:45
Speaker 1: of US munition stockpiles, I mean, this is not something
6:49
Speaker 1: that comes as a surprise. We've been talking about this
6:51
Speaker 1: for really years, with the war in Ukraine and the
6:54
Speaker 1: Biden administration throwing everything that they could add it, and
6:58
Speaker 1: then those warnings that came up of a, hey if
7:01
Speaker 1: we don't if we send all of the munitions to Ukraine,
7:03
Speaker 1: we're not gonna have them for the US. That was
7:06
Speaker 1: something that Donald Trump mentioned when he came into office,
7:08
Speaker 1: and a concern he said he had. Then he pursues
7:11
Speaker 1: all of these wars, and of course you have un
7:14
Speaker 1: Ambassador Mike Waltz. He did admit that there is a shortage, right,
7:19
Speaker 1: and then he quickly turns around and tries to blame
7:21
Speaker 1: it on the Biden administration. But it's like it was
7:23
Speaker 1: the Trump administration that chose to start this war against
7:28
Speaker 1: Iran not once, but technically twice if you count last
7:32
Speaker 1: year's version of it. What does that tell us about
7:35
Speaker 1: the US and the pressure they feel. I'm sure there's
7:38
Speaker 1: pressure from Israel, like you were saying, but also the
7:40
Speaker 1: pressure to be this global power that is able to
7:44
Speaker 1: go in and go, Okay, we're going to wage war
7:46
Speaker 1: on you. And it's like the US is spending all
7:48
Speaker 1: of this money, racking up all of this debt on
7:51
Speaker 1: their credit card literally and figuratively, and they don't have
7:56
Speaker 1: the money to back that up whatsoever. And now we're
7:59
Speaker 1: getting to the end of the line on that.
8:01
Speaker 2: Yeah, because the military industrial conflict is fully entrenched in Washington,
8:06
Speaker 2: and despite numerous presidency that came to office promising no
8:11
Speaker 2: interventionist foreign policy, including Generald Trump himself, they always do
8:16
Speaker 2: the same thing, launching more wars. The perpetual war must
8:20
Speaker 2: go on in order to feed the machine that is
8:24
Speaker 2: the army of lobbyists, think tanks, all the you know,
8:29
Speaker 2: all the arms manufacturers. They're profiting handsomely in this conflict.
8:35
Speaker 2: And as well as the big oil, the big oil,
8:37
Speaker 2: they are big Trump supporters and they you know, Shall
8:41
Speaker 2: reported their first quarter earning report that you know, they
8:46
Speaker 2: they made out like bandit. And that was just the
8:49
Speaker 2: first quarter. The first quarter was like ending in March.
8:53
Speaker 2: So like this quarter, I expect you know that they
8:56
Speaker 2: have even more gamebuster profit. But that is a profit
8:59
Speaker 2: and spence of everybody else, including average working Americans, were
9:04
Speaker 2: paying the higher price at the pump. But again, you
9:07
Speaker 2: know that's we know, Trump don't care about the average Americans.
9:11
Speaker 2: You know, he does care about his big donors and
9:14
Speaker 2: those people he likes to keep happy.
9:16
Speaker 1: Yeah, Trump is over here being like, oh, it's fine,
9:19
Speaker 1: the stock markets up right. Oil prices haven't started, not
9:23
Speaker 1: one hundred and fifty dollars a barrel, were fine, But
9:25
Speaker 1: he's seeing just enough profit from that. And I did
9:29
Speaker 1: think it was interesting too. This was a headline, but
9:32
Speaker 1: it didn't get a ton of attention in the news,
9:35
Speaker 1: at least not here in the West. But Trump imposed
9:38
Speaker 1: new tariffs of ten percent and twelve point five percent
9:42
Speaker 1: on goods from sixty trading partners, including the EU in China,
9:47
Speaker 1: alleging that those countries failed to curb imports made by
9:51
Speaker 1: forced labor. Just as a temporary ten percent global tariff expired.
9:57
Speaker 1: Now he is getting a lot of backlash for this
9:59
Speaker 1: because obviously, when you say that a country is using
10:02
Speaker 1: force labor with no evidence of that presented whatsoever, then
10:06
Speaker 1: that country is not going to be happy with you.
10:08
Speaker 1: But what I did find interesting was that China's Commerce
10:11
Speaker 1: ministry revealed that during bilateral trade talks, Washington actually promised
10:17
Speaker 1: to keep their replacement tariffs under twenty percent. So technically
10:21
Speaker 1: twelve point five percent is significantly under twenty How do
10:25
Speaker 1: you see this move by the Trump administration. I mean,
10:28
Speaker 1: it's expected that Trump is going to put on new tariffs,
10:30
Speaker 1: but at the same time he is still ruffling a
10:33
Speaker 1: few feathers here.
10:35
Speaker 2: Yeah, again, this is Trump trying out the same thing
10:38
Speaker 2: like you. We mentioned again and again. Trump is predictable
10:42
Speaker 2: in unpredictable way. He's trying to restart the tariff war
10:45
Speaker 2: the same way he restarted this crisis in the straight
10:50
Speaker 2: or home moves, because he thought he can keep his
10:53
Speaker 2: opponent off balance, catching them by surprise. But nothing has
10:58
Speaker 2: fundamentally changed. US still have no cards, especially come to China.
11:03
Speaker 2: You know, one of the big driver I think the
11:06
Speaker 2: latest run of the tariff increase is because they they're
11:10
Speaker 2: not as satisfied that their first terrafor didn't get the
11:15
Speaker 2: result they wanted. You know, one of their goal is
11:17
Speaker 2: to decouple from China, to force the big multinationals to
11:21
Speaker 2: move their supply chain away from China. What really happened was,
11:25
Speaker 2: you know, some more labor intensive assembly work was moved
11:29
Speaker 2: out of China. For example, Apple moved twenty five percent
11:33
Speaker 2: of the iPhone production to India, and some other company
11:39
Speaker 2: moved their assembly line to Vietnam. But what really happened
11:45
Speaker 2: is what has been moved is like the final and
11:50
Speaker 2: the most labor intensive part of putting all everything together.
11:54
Speaker 2: All the components still come from China, All the machine
11:57
Speaker 2: tools still come from China, and they even be Chinese
12:00
Speaker 2: technicians and Chinese engineers to come and set up the
12:04
Speaker 2: machines and service the machines. So this is why China
12:08
Speaker 2: continued to go on to have rector surplus after year
12:12
Speaker 2: after year. And so what Trump is trying to do,
12:16
Speaker 2: they're trying to use the so called forced labor issue
12:19
Speaker 2: as as an excuse. You know, it's like, oh, China
12:22
Speaker 2: used oigor slave labor, right, That's that's there, that's now
12:26
Speaker 2: their tool in Traine negotiations. Say okay, so that's why
12:31
Speaker 2: you have to all these countries, India and Vietnam. You're
12:34
Speaker 2: not sourcing your components careful enough. You know, these components
12:38
Speaker 2: are still coming from China. And at the end of
12:42
Speaker 2: the day, Trump still has no cards to play because
12:46
Speaker 2: all the cards are still made in China, because China
12:48
Speaker 2: still dominates the supply chain, and China is still not
12:52
Speaker 2: giving him the rare earth that he wanted. This this
12:55
Speaker 2: is another thing that he really wants China to lift
12:58
Speaker 2: the export control on Earth. This this ties to the
13:02
Speaker 2: US running short on ammunitions because they can't replent it
13:07
Speaker 2: should replenish their their ammunition fast enough because China hold
13:12
Speaker 2: a stranglehold on the critical minerals, which they place restriction
13:16
Speaker 2: on export to US military industrial complex. So so, and
13:20
Speaker 2: there's also the incoming visit of Chijinping in United States,
13:24
Speaker 2: possibly in September. So this is again Trump is trying
13:28
Speaker 2: to sit the stage, trying to gain some leverage on
13:31
Speaker 2: Xi Jinpin before his visit because you know, there's probably
13:34
Speaker 2: a lot of negotiation happening in the background in preparation
13:37
Speaker 2: for President She's visit to the United States. This gun
13:41
Speaker 2: is Trump trying to gain leverage, but he has no leverage.
13:44
Speaker 2: He has no cards to play in this. So I
13:47
Speaker 2: don't expect this new round of tariff increase will have
13:51
Speaker 2: any different results in the last time, except price increases
13:55
Speaker 2: for the American consumers.
13:57
Speaker 1: That's always how it goes. And yet Trump loves terear
14:00
Speaker 1: so much. I guess that goes back to what we
14:01
Speaker 1: were saying about how he does not care about the consumers,
14:05
Speaker 1: and just the fact that he would look at these
14:07
Speaker 1: countries and go, oh, well, you're using parts that are
14:09
Speaker 1: made in China. They're like, what else do you want
14:11
Speaker 1: us to do? Not provide a product to you, like,
14:14
Speaker 1: that's where you get them. And speaking of the rare
14:17
Speaker 1: earth minerals, because they did want to talk about that
14:20
Speaker 1: a little bit, and kind of the point that you
14:22
Speaker 1: were making, right, the US military industrial complex, they desperately
14:26
Speaker 1: need to ramp up production to get out more ammunition
14:30
Speaker 1: to be prepared with these interceptor missiles. Right, There's so
14:34
Speaker 1: much that they want to do that they are dreaming
14:37
Speaker 1: of when it comes to maintaining their hegemony around the world,
14:40
Speaker 1: but specifically in West Asia, or at least trying to.
14:43
Speaker 1: At this point, they're not doing too well at it.
14:45
Speaker 1: But when it comes to what China is doing, not
14:48
Speaker 1: only are they not letting up these restrictions, but they're
14:51
Speaker 1: expanding them. They increased export controls last month when they
14:55
Speaker 1: blacklisted two additional American companies, and then last week they
14:59
Speaker 1: banned fourteen European companies from shipments of dual use materials
15:04
Speaker 1: that could be used for both civilian and military applications.
15:08
Speaker 1: Europe really can't win here, right, They get hurt whatever happens,
15:12
Speaker 1: whether it's they're deciding that they're going to, you know,
15:16
Speaker 1: reduce their reliance on Russian energy and then they start
15:19
Speaker 1: getting energy from the Middle East and then the US
15:22
Speaker 1: which is a war against Iran. Now they're dealing with
15:25
Speaker 1: China and they're going, oh, wait a second, we also
15:27
Speaker 1: don't get the dual use materials. When it comes to
15:30
Speaker 1: just how much control China has and also how it's
15:33
Speaker 1: leveraging it, do you expect any change anytime soon or
15:37
Speaker 1: does it seem like this is going to continue to
15:39
Speaker 1: be the status quo.
15:41
Speaker 2: By the way China put the export control on Europe
15:44
Speaker 2: is in retaliation of the European ban on export. You
15:52
Speaker 2: use item export to China now The thing is China
15:57
Speaker 2: Europe is now like they decide to go down with
16:00
Speaker 2: the ship. You know, all the European leaders decide they
16:03
Speaker 2: have to attach themselves to Daddy Trump no matter what.
16:06
Speaker 2: This is why they're pursuing these suicidal policies that further
16:10
Speaker 2: isolate Europe in the world stage. As you mentioned, Europe
16:13
Speaker 2: has already cut off on the cheap energy from Russian gas,
16:17
Speaker 2: and now the Trumps war on Iran makes the matter
16:20
Speaker 2: even worse for them. Well, again, what the European leaders do.
16:23
Speaker 2: They go ahead and start a trade wark with China,
16:26
Speaker 2: their biggest market, right uh. And and this does not
16:30
Speaker 2: benefit Europe. This does not benefit the people of Europe.
16:33
Speaker 2: What the reason the lead European leader doing this is?
16:37
Speaker 2: They're they're trying to kiss up to Trump and hope
16:41
Speaker 2: that Trump will throw them a bone, and also to
16:44
Speaker 2: preserve their own position because most of them are in
16:47
Speaker 2: in the are where they are because of their connection
16:51
Speaker 2: to Washington, because the backing from from the United States,
16:55
Speaker 2: and so they are desperate trying to cling on that
16:58
Speaker 2: that Atlantic reallylationship, even at the detriment of the European
17:04
Speaker 2: economy and the European citizens. Now the you know, China,
17:08
Speaker 2: on the other hand, they are while they're you know,
17:11
Speaker 2: you have to remember Europe has been buying a lot
17:15
Speaker 2: of the drone components, engines, cameras, electronic equipment, everything, and
17:20
Speaker 2: then then they ship them to Ukraine, you know, to
17:24
Speaker 2: to to to to to to continue this proxy work
17:28
Speaker 2: against Russia. Now this is the perfect opportunity for China's like, Okay,
17:34
Speaker 2: well you're gonna bean. Guess what You're gonna ban duo
17:36
Speaker 2: use item so called you use item to me, I'm
17:40
Speaker 2: gonna ban all these drone parts could be dual used.
17:43
Speaker 2: There aren't being used as as an instrument of war,
17:46
Speaker 2: you know what, you forget about them. So this is
17:50
Speaker 2: another case of European shooting itself in the foot in
17:53
Speaker 2: trying to police Washington. And they're not getting any return
17:57
Speaker 2: on that because Trump keep on placing phone them as well.
18:02
Speaker 2: So they're kind of the you know, kind of the
18:06
Speaker 2: half stock Stockholm syndrome half because you know, I don't know,
18:11
Speaker 2: like the white countries must stick together. I guess I
18:16
Speaker 2: think that's the only explanation I can give because it
18:19
Speaker 2: does not make any logical sense.
18:21
Speaker 1: Yeah, and like you're saying there, it's not as if
18:24
Speaker 1: Trump is dangling all of these great things in front
18:28
Speaker 1: of Europe, It's like, what does Trump have to offer
18:30
Speaker 1: you protection from the threats that we're going to send
18:33
Speaker 1: your way if you don't listen to us, Because that's
18:35
Speaker 1: pretty much all the US had at the moment. They're like, yeah,
18:38
Speaker 1: we're protecting you from us if you don't team up
18:41
Speaker 1: with us. Oh okay, well China's over here. They weren't
18:44
Speaker 1: trying to work with you. Now you don't want to
18:46
Speaker 1: work with them, so okay, they're not going to work
18:48
Speaker 1: with you on this specific issue. But speaking of China's involvement,
18:54
Speaker 1: or at least alleged involvement, I feel like there's been
18:58
Speaker 1: a big uptick in the West of reporting saying that well,
19:02
Speaker 1: Iran strikes they're getting more precise, Therefore they must be
19:06
Speaker 1: using Chinese satellite technology to carry out strikes on US
19:10
Speaker 1: military basis. Now they've also blamed Russia, especially when it
19:14
Speaker 1: comes to Iran's targeting of CIA facilities in Saudi Arabia
19:18
Speaker 1: and Iraq back in March. Now, Iran and China, obviously
19:21
Speaker 1: they're not coming out and saying, yes, this is the
19:24
Speaker 1: exact satellite we use, this is how we carried out
19:26
Speaker 1: this attack. But how do you see these allegations? Is
19:29
Speaker 1: there some truth to it or is it also the
19:32
Speaker 1: West coming along? And anytime Iran achieves anything, they've got
19:36
Speaker 1: to blame Russia, blame China and really kind of put
19:39
Speaker 1: everything together in the mix there.
19:40
Speaker 2: You know, they actually have no solid evidence, you know,
19:43
Speaker 2: there's no smoking gun that says Russia and China is
19:47
Speaker 2: doing this. They just say, oh, Uran got a lot
19:50
Speaker 2: better at their target team. They must got help fund
19:53
Speaker 2: China and Russia. On one hand, this is almost kind
19:56
Speaker 2: of racist, believe that Iranians couldn't do anything by the self,
20:00
Speaker 2: you know, which is far from the truth. You know,
20:03
Speaker 2: I when I attended university in the United States, there
20:06
Speaker 2: were many Iranian engineers. You know, they're highly trained, very
20:10
Speaker 2: well educated in stem so Iraq has the human capital
20:15
Speaker 2: pool to pull it off. And but it is possible
20:20
Speaker 2: that China and Russia are providing assistance. I mean why not?
20:24
Speaker 2: Why not? United States is doing the same thing, you know,
20:29
Speaker 2: through through the European countries in Ukraine in the proxy
20:32
Speaker 2: war against Russia. Why can't China and Russia help you
20:37
Speaker 2: wrong their friendly ally and and and what your what
20:42
Speaker 2: Iran is getting from China are like the chemical precursors
20:47
Speaker 2: to make missiles ballistic missiles, which is in sharp contrast
20:53
Speaker 2: to Chinese export control over earth on the United States,
20:57
Speaker 2: which US cannot make more critical UH. US do lacks
21:02
Speaker 2: a critical muneral to make more missile interceptors, but Iran
21:06
Speaker 2: is getting shipment fund China UH of the basic components
21:10
Speaker 2: that to be used for making more ballistic missiles. And
21:14
Speaker 2: that's the main that's the main weapon in Iran's arsenal.
21:18
Speaker 2: Right now that's hitting all the US bases. But again,
21:22
Speaker 2: China's statement has been clear, we support Iran's struggle for
21:26
Speaker 2: its territorial integrity and safeguard. Is sovereignty. What you can
21:31
Speaker 2: interpret it that however you want, But I think, yeah,
21:35
Speaker 2: probably that means China is supplying continuity, supply Iran with
21:39
Speaker 2: some material and maybe even satellite intelligence to help them
21:43
Speaker 2: in this effort because let's let's let's face it, Iran
21:46
Speaker 2: is a victim here. United States and Israel are the aggressor.
21:50
Speaker 2: You know, they have they have no right to complain
21:53
Speaker 2: about Iran possess the weapons to fight back, you know
21:57
Speaker 2: that that's what they're complaining about. It's like, how can
21:59
Speaker 2: how dare to hit back and bombing your country?
22:02
Speaker 1: Yeah, exactly, like you can come in, you can you know,
22:06
Speaker 1: target and assassinated country's leader, you can murder their school
22:10
Speaker 1: children and all that's fine. But then when they start
22:12
Speaker 1: hitting you back on your military basis that are placed
22:15
Speaker 1: directly around their country, Suddenly the US acts like that's
22:19
Speaker 1: the end of the world. It's like, well, it's not
22:21
Speaker 1: why you put those bases there in the first place.
22:23
Speaker 1: For a future war. Aron is just making it so
22:26
Speaker 1: that they get a little bit of action, I guess
22:29
Speaker 1: while they're taking out those bases along the way. And
22:32
Speaker 1: it has been interesting to kind of watch the back
22:34
Speaker 1: and forth because, like you were saying, Trump comes out
22:37
Speaker 1: and he announces last week that Chinese President Shijingping will
22:41
Speaker 1: be visiting the US in September. He says, Now, at
22:45
Speaker 1: the time, he was saying, Oh, we're going to be
22:46
Speaker 1: talking about artificial intelligence. That's a big topic. I'm sure
22:50
Speaker 1: that will be one of the topics. Obviously, China is
22:54
Speaker 1: in this position of trying to get everyone to get
22:57
Speaker 1: along here, being like, hey, can we stop all of
23:00
Speaker 1: the war in this case, stop attacking Iran. Let's get
23:04
Speaker 1: the straight of horror moves opened back up. Obviously, you know,
23:07
Speaker 1: they're not exactly over here arguing against Iranian control because
23:12
Speaker 1: China is still benefiting from the energy that is coming
23:15
Speaker 1: out of the Strait and benefiting from Iranian energy directly.
23:19
Speaker 1: So how do you view kind of the place that
23:23
Speaker 1: China is in. We're on one hand, they are keeping
23:26
Speaker 1: these export controls in place, trying to rain the US
23:30
Speaker 1: in a little bit. But then on the other hand,
23:31
Speaker 1: they're over here going, hey, let's all get along, let's
23:34
Speaker 1: try to pursue some sort of a deal, even though
23:37
Speaker 1: I'm sure Iran is over here going, look, the US
23:40
Speaker 1: can't be trusted. We've tried. Our hands are kind of
23:42
Speaker 1: tied here.
23:43
Speaker 2: Yeah, I mean, China is acting like an adult in
23:47
Speaker 2: the room here, you know, because this is this conflict,
23:52
Speaker 2: is this conflict again started by United States and Israel,
23:56
Speaker 2: and this is what majority of the world do not want.
24:00
Speaker 2: And I think, and you know, I think part of
24:03
Speaker 2: the there's reporting that the one reason Trump is pausing
24:07
Speaker 2: the Opera US operation is because there there's an other
24:12
Speaker 2: country are urging him to return to the negotiation table.
24:16
Speaker 2: This is probably through Oman and Pakistan, and and you know,
24:21
Speaker 2: like the one of the reasons originally Pakistan was chosen
24:24
Speaker 2: as the kind of mediating ground is because Pakistan has
24:28
Speaker 2: good relationship with Irong, the golf countries, United States, and China.
24:34
Speaker 2: You know, China really don't like to take a high
24:36
Speaker 2: profile role in this, so but they are definitely working
24:41
Speaker 2: behind the scenes, you know, through Pakistan trying to mediate
24:44
Speaker 2: this conflict. Because this, this is what what Trump is
24:48
Speaker 2: doing is bad for the global economy. Trump himself admitted,
24:52
Speaker 2: he said he doesn't want to be the Herbert Hoover
24:54
Speaker 2: who dragged the world to a to a depression, but
24:58
Speaker 2: right now he is doing a Herbert Hoover and somebody
25:01
Speaker 2: have to set him down at the kids table and
25:04
Speaker 2: say hey, look, these are rules and you better behave
25:08
Speaker 2: and and I think, you know, China is one that
25:12
Speaker 2: that's that's acting as a rational voice right now and
25:15
Speaker 2: say hey, let's let's just sit down and work through this.
25:19
Speaker 2: You know, the United States, this is this is what
25:21
Speaker 2: you're doing is benefiting no one, including yourself. But again,
25:25
Speaker 2: like the US has some institutional interest in continuing the war.
25:31
Speaker 2: There's the military industrial complex, there is the Israeli lobby,
25:36
Speaker 2: and one of the you know, you brought up Mike Waltz,
25:40
Speaker 2: the UN the US ambassador to you, and one of
25:43
Speaker 2: the reasons he brought out the ammunition shortage is because
25:48
Speaker 2: the Congress right now is trying to pass through a
25:51
Speaker 2: bill that authorized additional military spending. And well, guess what.
25:56
Speaker 2: US can print all the money he wants, but they
26:00
Speaker 2: cannot print missiles. That's a problem they You know, Pentagon
26:04
Speaker 2: sure would appreciate all the additional funding. And that's this
26:07
Speaker 2: is all the Pentagon is good for nowadays. It's a
26:10
Speaker 2: drifting machine. But all the new additional congressional funding is
26:14
Speaker 2: not going to get them the critical minerals. It's not
26:17
Speaker 2: going to get them those missiles because US has de
26:20
Speaker 2: industrialized for the last forty years and now it's all
26:24
Speaker 2: like finance and AI bubble, all right, and like like,
26:28
Speaker 2: I'm sure one of the reasons another reason Trump is
26:32
Speaker 2: pausing the operation is let's let's remember, as much as
26:36
Speaker 2: he's talking about the stock market being high, a lot
26:39
Speaker 2: of that is AI bubble. A lot of that money
26:43
Speaker 2: is in the AI bubble. And they're expecting to continue
26:47
Speaker 2: to fund the AI bubble with the golf Arab money.
26:50
Speaker 2: And that's what that money is not coming in the
26:53
Speaker 2: current conditions. Like I said, Kuwait hasn't sold oil in month,
26:57
Speaker 2: and and the longer the words axund, the more the
27:02
Speaker 2: golf Arab countries would need to keep that money for
27:04
Speaker 2: themselves to rebuild their infrastructure. So I mean that is
27:10
Speaker 2: another reason I think a pressure point on Trump to
27:14
Speaker 2: bring him back to negotiation.
27:16
Speaker 1: Yeah. I know, it's this crazy house of cards where
27:19
Speaker 1: you have all of these different elements that can just
27:22
Speaker 1: topple everything over. And the last thing I wanted to
27:25
Speaker 1: bring up, you know, when it comes to the situation
27:28
Speaker 1: with the energy supply, with the oil supplying in particular,
27:31
Speaker 1: it's interesting because sure, if you look at the US
27:34
Speaker 1: and they're looking at the current war against Iran, even
27:36
Speaker 1: if they're not actively bombing Iran, they can look at
27:39
Speaker 1: it and go, oh, are we keeping energy from flowing
27:43
Speaker 1: to China or flowing to East Asia in general? Okay,
27:46
Speaker 1: that's not so bad for us, right Our vassal states
27:49
Speaker 1: will hold on for as long as they can. But
27:51
Speaker 1: if we're withholding stuff from China, then we're good. Well,
27:55
Speaker 1: China has built that bit strategic reserves. But when we
27:58
Speaker 1: get to the point where everyone's using their strategic reserves
28:02
Speaker 1: and everyone's getting to more of a desperate position. And
28:05
Speaker 1: then China looks over here and says, oh, we're going
28:07
Speaker 1: to need more of the supply off the global market.
28:10
Speaker 1: That could have a massive impact. So what are you
28:14
Speaker 1: keeping an eye on when it comes to really the
28:17
Speaker 1: economic war that is at play here and the role
28:20
Speaker 1: that China also plays in that with not only the
28:24
Speaker 1: supply it's taking, but the demand it has at home
28:26
Speaker 1: and how it's balancing everything.
28:28
Speaker 2: Yeah, so on one hand, the high oil prices is
28:33
Speaker 2: profiting all the US oil majors. On the other hand,
28:36
Speaker 2: China's saying, you know what, We're not playing that game, right,
28:39
Speaker 2: China is the largest importer of oil and gas, and
28:43
Speaker 2: they said, well, you know what, I will just follow
28:46
Speaker 2: the traditional smart way of buying low sell high. You
28:50
Speaker 2: know guess what. We bought all these oil for the
28:52
Speaker 2: last two years while the oil was at historically low prices,
28:56
Speaker 2: and we build the world's largest patrol strategic petroleum reserve
29:01
Speaker 2: at one point four billion barrels of oil. So we're good, no,
29:05
Speaker 2: thank you, We're not going to buy at inflated, inflated prices.
29:09
Speaker 2: And in China actually cut voluntarily cut their oil import
29:13
Speaker 2: by hand, which is about five point five million barrels
29:17
Speaker 2: of oil per day, which is huge. This is what
29:20
Speaker 2: has kept the oil price from breaking, you know, one
29:23
Speaker 2: hundred and twenty five dollars a barrel. But again that
29:28
Speaker 2: cushion could be disappearing because the Yamendi has restarted the
29:34
Speaker 2: operation in the Red Sea. You know, originally is there
29:38
Speaker 2: about twenty million barrels of oil flowing out of the
29:41
Speaker 2: Persian Gulf before United States started the war against Yubron.
29:45
Speaker 2: After the war started, Salty was still able to pipe
29:49
Speaker 2: their oil through the pipeline to the portal Yamboo and
29:53
Speaker 2: get shipped through Red Sea to the world market. And
29:56
Speaker 2: that's about four point five million barrels of oil day.
30:00
Speaker 2: And UAE was also using their pipeline to go to
30:04
Speaker 2: Foo food jet Jara just outside of the straight or
30:07
Speaker 2: home moves and that's about one to two million barrels
30:09
Speaker 2: a day. Well, guess what now, Uran has shut down
30:12
Speaker 2: the UAE pipeline by by by hitting the portal Fujara
30:17
Speaker 2: in UAE and the Yemenis are shutting down the Red
30:21
Speaker 2: Sea and the Uruan in Jamen's missiles are now hitting
30:25
Speaker 2: the Saudi refineries and the portal Yamboo. So that is
30:31
Speaker 2: that is total of you know, maybe five to six
30:35
Speaker 2: million barrels a day that's getting cut off right now.
30:38
Speaker 2: That's the equivalent of the oil that China has reduced
30:42
Speaker 2: its import from. So all the buffer that was present
30:47
Speaker 2: now is fastly diminishing. Another another thing that the reason
30:50
Speaker 2: why the oil hasn't gone stratosphere is everybody is drawing
30:54
Speaker 2: down their strategic petroleum reserve. Well guess what we're not
30:58
Speaker 2: what three four months into the war, US has only
31:02
Speaker 2: one month of crude oil inventory left. So the margin
31:09
Speaker 2: for air is getting very very thin right now. All
31:13
Speaker 2: the buffers is disappearing very fast. So if the war
31:17
Speaker 2: is allowed to drag, if you know, Trump do not
31:20
Speaker 2: come to the negotiation table, it's gonna be much much
31:24
Speaker 2: worse than last time. You know, last time, you know,
31:28
Speaker 2: the sky is the limit for the oil price. So
31:33
Speaker 2: but but on the other hand, you know, China was
31:35
Speaker 2: the best the nation that was best prepared for this
31:39
Speaker 2: because US Navy has been saying for decades, you know what,
31:43
Speaker 2: We're gonna choke off China's energy supplies through the Strait
31:46
Speaker 2: of Malacca, and China's like, oh really, okay, that means
31:50
Speaker 2: I better electrify our country, you know, but we were
31:53
Speaker 2: better like a switch to evs, you know, we better
31:57
Speaker 2: build more high speed feed rail and that, and we
32:01
Speaker 2: better you know, tried other way to get oil. China
32:03
Speaker 2: has the world most advanced code to oil technology, which
32:07
Speaker 2: becomes profitable at seventy five dollars seventy dollars seventy five
32:13
Speaker 2: dollars a barrel of oil price. Well guess what today's
32:18
Speaker 2: oil prices were like one hundred dollars. So China is
32:21
Speaker 2: just going to use cold to to to to satisfy
32:24
Speaker 2: their hydrocarbon need. And yeah, so so there goes to
32:28
Speaker 2: Washington's plan to squeeze China, and it turns out China
32:33
Speaker 2: became the price that China can actually set the price
32:39
Speaker 2: at the global oil market, being the largest buyer. You know,
32:42
Speaker 2: they would just reduce their demand when the oil is
32:46
Speaker 2: oil price is too high, and when the oil price
32:48
Speaker 2: comes down, they will go buy again, which makes total sense.
32:52
Speaker 1: Yeah exactly. And you watches the US thought that they
32:54
Speaker 1: were going to have this whole pivot to Asia that
32:57
Speaker 1: they were going to take on China. Well during that
33:00
Speaker 1: very publicly and China's over here like Okay, okay, you
33:03
Speaker 1: can do whatever you want to do. But like you
33:05
Speaker 1: were saying, they are adjusting their energy needs, adjusting their economy,
33:11
Speaker 1: adjusting their you know, the rare earth that they are
33:14
Speaker 1: allowing the US to get access to because China's over here,
33:18
Speaker 1: like they're not going to wage a war on us,
33:19
Speaker 1: and we're not going to fund your war against us. Essentially,
33:24
Speaker 1: if you want to work with us, then do that.
33:26
Speaker 1: But the US is over here acting like a spoiled
33:29
Speaker 1: child that can't get its war against Iran, can't get
33:32
Speaker 1: its war against China, is you know, badly losing its
33:35
Speaker 1: war against Russia. And it's like, well, that's the position
33:37
Speaker 1: that you put yourself in. And it's hard to see
33:41
Speaker 1: Trump backing away or too much changing, especially as I
33:44
Speaker 1: know that netnya Who's broomstick, is landing here back in
33:47
Speaker 1: the US this week, so I know we'll have continue
33:50
Speaker 1: to have a lot to talk about, a lot at
33:52
Speaker 1: stake care all around. And I always appreciate you taking
33:55
Speaker 1: the time to join me to break down all of
33:58
Speaker 1: the latest here. Carl's a geopolitical analyst and host of
34:02
Speaker 1: the Silk and Steel podcast. Thank you so much for
34:05
Speaker 1: your time and insight.
34:08
Speaker 2: Thank you Rachel.
34:09
Speaker 1: Anytime, if anything in this video resonated with you, be
34:12
Speaker 1: sure to like it, share it with your friends, leave
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