Latest / China Considered / US-China Policy in Trump 2.0

Transcript

US-China Policy in Trump 2.0 · China Considered

0:06
>> Elizabeth Economy: Welcome to China Considered, a podcast that brings fresh
0:09
insights and informed discussion to one of the most consequential issues of our time,
0:14
how China is changing and changing the world.
0:16
I'm Liz Economy, Hargrove senior fellow and co-director of the US, China and
0:21
the World Program at the Hoover Institution at Stanford University.
0:25
Every two weeks,
0:25
I'll be joined in conversation by senior government officials, business leaders,
0:29
and prominent activists and authors from around the world.
0:32
We'll discuss China's most important political and economic trends, its foreign
0:36
policy ambitions, and its relations with the United States and other countries.
0:40
The China Considered podcast is produced by the Hoover Institution, and
0:44
you can subscribe to it via the Hoover Institution YouTube channel or
0:48
your favorite podcast platform.
0:50
Today, we're gonna focus on US-China relations,
0:52
where the biggest news comes not from China, but from the United States,
0:56
where Donald Trump was just re-elected for his second term as President.
0:59
To help us understand what this election is likely to mean for the US-China
1:03
relationship, I've invited two of the US's foremost China strategists,
1:07
Matt Pottinger and Evan Medeiros, to provide us with their take.
1:10
Matt and Evan share the distinction of having served as special assistant to
1:13
the president and senior director for Asia and the National Security Council.
1:17
Matt during the first Trump administration and Evan during the Obama administration.
1:21
Matt also served as Deputy National Security Advisor and
1:24
is currently a Visiting Distinguished Fellow at the Hoover Institution
1:27
as well as a principal at Garnaut Global.
1:29
Evan Medeiros is a renowned scholar of US-China relations and
1:32
is the Penner Family Chair in Asian Studies and
1:34
Kling Family Senior Fellow in US-China Relations at Georgetown University.
1:39
He is also a senior advisor at the Asia Group.
1:41
Welcome to both of you.
1:43
>> Evan Medeiros: Thanks, Liz. >> Elizabeth Economy: So
1:43
we're about to embark on Donald Trump's second term as President of
1:46
the United States, and there's a lot of speculation about what he may or
1:50
may not do vis-a-vis China.
1:51
But before we talk about what we're likely to see in a Trump second term,
1:56
I want to level set and ask where US-China policy is today.
1:59
Evan, let me start with you.
2:01
The Biden administration identified China as the most consequential long term
2:05
strategic threat to the United States.
2:07
Do you agree with this assessment, and how would you characterize
2:10
the Biden administration's strategy to manage this threat?
2:13
>> Evan Medeiros: So I do agree with that assessment of the China challenge.
2:17
The DoD likes to call it the pacing threat or the pacing challenge.
2:21
I think that accurately captures the range of economic,
2:25
diplomatic, military challenges that China poses.
2:30
I think the Biden administration has actually been very clear about what their
2:33
China strategy is.
2:34
They have a bumper sticker, invest, align, and compete.
2:38
But let me talk about it in more academic terms.
2:40
It's what political scientists would call a combination of internal balancing and
2:46
external balancing.
2:47
Internal balancing means investing more in your capabilities at home.
2:51
So that's military modernization, but also economic modernization,
2:55
whether it's the CHIPS Act or the Inflation Reduction Act.
2:58
It's about making substantial investments at home, so the US can compete with China
3:03
in key economic sectors and technology sectors over the long term.
3:07
And then there's external balancing.
3:08
External balancing is about forging alliances and
3:11
security partnerships with countries all over the world.
3:15
The Biden administration came in and
3:17
found that a variety of those alliances in Europe and Asia needed some work.
3:22
They needed to be repaired.
3:23
And so they went about doing that.
3:25
And then after the Russian invasion of Ukraine, the Biden administration
3:29
found that there was an even more permissive environment for updating,
3:34
expanding, and modernizing them.
3:36
And I think one of the most interesting aspects, Liz, has been how the US has
3:41
used the Ukraine crisis to sort of link alliances in Asia to alliances in Europe.
3:47
So I think the Biden administration's actually had a very consistent approach
3:51
from the beginning, and I think that they've racked up lots of successes.
3:56
>> Elizabeth Economy: What would you say is probably the biggest success in
3:59
your mind?
4:00
>> Evan Medeiros: Probably the way in which they reconfigured shaped
4:03
the external security environment in Asia, specifically the alliances and
4:09
partnerships, in a way that I think shaped Chinese views and Chinese preferences.
4:14
Because, at the heart of your China strategy is you wanna deter certain bad
4:19
behaviors.
4:20
Bad behaviors that the trifecta I like to use is Chinese deterring Chinese
4:25
predation, Chinese coercion, and Chinese aggression.
4:29
And what became very clear in previous administrations is that trying
4:34
to negotiate restraints or constraints on China didn't really work, right?
4:40
As China became stronger, they just sort of played for
4:43
time in negotiations or blew off their commitments.
4:47
And what we found over time, and
4:49
this is one of the ideas behind the original Obama pivot, was that the best
4:54
way to shape China is by shaping the strategic environment around China, right?
5:00
By sort of creating an environment in which the Chinese realize certain
5:05
behaviors are not going to work and may actually be costly for them.
5:09
And so I think the Biden team did great work on the alliances.
5:13
But to me, one of the most interesting dimensions of their policy was they
5:18
didn't just improve what we call the hub and the spoke system.
5:22
The hub and spoke being the US is the hub, the five allies being the spoke,
5:27
but they created an environment in where in which you began to have
5:32
spoke-to-spoke interaction.
5:34
In other words, Japan and Australia, Australia and India, Vietnam and Japan.
5:40
This is what Ambassador Rahm Emanuel calls the lattice work.
5:43
And to me, creating an environment where hub and spoke is not just bigger and
5:49
better, but you begin to have this sort of lattice work framework.
5:53
To me, improves the ability to deter the predation,
5:57
the coercion, and the aggression that we've seen.
6:02
>> Elizabeth Economy: And presumably this lattice works.
6:04
Lattice formation is something that could continue through to
6:08
the next administration, whatever President Trump may decide to do
6:13
in terms of the US relationship with allies or with China.
6:17
>> Evan Medeiros: Maybe, maybe not.
6:18
Because I think the lattice work,
6:20
the lattice system only works if the hub and spoke is strong, right?
6:25
And so we'll sort of see how it plays out.
6:30
You could argue that if the US Becomes less reliable, that Japan,
6:35
Australia, Korea, look for more partners in the region, but
6:40
the reality is nothing can really replace a credible and capable US presence.
6:47
>> Elizabeth Economy: Okay, so perfect entry point for Matt.
6:51
Matt, you spent four years working for
6:54
President Trump as his top adviser on China.
6:57
What were his priorities when it came to China policy, and
7:00
what do you expect to see from him on China this time around?
7:04
Do you see a lot of continuity or do you see a lot of change coming?
7:09
>> Matt Pottinger: Yeah, I think he'll pick up in many ways where he left off in
7:14
focusing on trade first, looking at the trade relationship as a proxy for
7:19
the problems in the broader relationship between China and
7:24
the United States and tariffs.
7:26
He viewed tariffs in the first administration as something
7:31
that was both an end in of itself, but also a tool for
7:36
building leverage to go into a negotiation with China for a trade deal.
7:43
And he actually achieved a trade deal, that on paper, was actually quite good.
7:47
The phase one agreement that came out in January 2020,
7:51
right before COVID hit the world like a tidal wave,
7:55
was novel in many ways because it gave the United States.
7:59
Unilateral ability to apply remedies if China was cheating or
8:04
failing to uphold its end of the deal.
8:07
And it also maintained tariffs until China complied, rather than doing
8:12
what the United States has done repeatedly over the prior 30 years,
8:17
which was we would reset or refrain from imposing tariffs in a show of good
8:22
faith to Beijing and then Beijing would, would sort of tap us along and,
8:28
you know, things wouldn't improve in terms of IP protection and so forth.
8:33
So the problem is that Beijing did not really uphold its end of the deal with,
8:38
with even the phase one agreement.
8:41
And so I think that if there's going to be a difference in his approach on trade,
8:46
President Trump might be more inclined to pursue significant tariffs on China,
8:52
a significant increase on tariffs without, without the, the goal necessarily.
8:57
He'll be open to a negotiation, but
9:00
without the goal of it leading to a phase two agreement.
9:04
Given that every, you know, the assemblage of, of Chinese trade deals that
9:09
it's made with us and with other partners that has accumulated over the decades,
9:14
you know, China just doesn't hold up its end of the bargain.
9:18
It's not a rule of law society.
9:20
So the idea that you could have an agreement that would work with another
9:24
rule of law society,
9:26
it doesn't really hold when you're dealing with a mercantilist dictatorship.
9:31
So I think that that's going to be a change.
9:34
>> Elizabeth Economy: So, I mean, he's pledged already 60% increase, right,
9:38
on tariffs already in some goods.
9:40
We have 25% tariffs.
9:42
So it takes to 85% tariffs on some Chinese goods coming to the country.
9:47
What do you think the impact of that's going to be?
9:49
And do you expect that he'll actually live up to that pledge?
9:53
>> Matt Pottinger: Yeah, I think he'll probably go big.
9:55
It's an open question as to whether he does this in phases or
10:00
whether he just goes big right at the outset.
10:03
I'm sure that that'll be a discussion and debate between him and
10:08
his cabinet when he installs his cabinet.
10:13
But I do think that the effects will be to start shifting more
10:18
American investment and more foreign investment back to
10:23
the United States and also to other countries that are at
10:28
least rule of law friendly economies to the United States.
10:33
We saw that to some extent already from just the existing tariffs President Trump
10:37
put in place.
10:39
It shifted a lot of foreign direct investment out of China, but to other
10:43
economies, some of it to the US I'd like to see more of that into US Manufacturing,
10:48
but a lot of it's gone to Mexico.
10:49
A lot of it's gone to Indonesia, Vietnam, and places like that.
10:54
>> Elizabeth Economy: So, okay, picking up on that point, I think one of the things
10:58
that Evan identified,, as one of the hallmarks of the Biden administration
11:02
strategy was the investment at home chips and science, the inflation reduction act,
11:07
the bipartisan infrastructure law, all of these sought to increase investment
11:12
in innovation and advanced manufacturing here at home.
11:16
In addition, we have the sort of focus on alliances.
11:19
To what extent do you think Trump, President Trump is going to continue
11:24
with these elements of a Biden administration strategy?
11:28
Are you [INAUDIBLE] to concede that the CHIPS and science will remain in place and
11:32
Inflation Reduction Act will remain in place and that we're going
11:36
to continue to have the pursuit of robust alliances with Europe and Asia?
11:41
>> Matt Pottinger: Well, look, on CHIPS and Science,
11:44
President Trump is generally suspicious of subsidies.
11:49
He likes tariffs, which is a different kind of subsidy in a way, but
11:53
it's his preferred tool.
11:56
He's been critical of CHIPS and Sciences, but
11:58
I think that if once he has a chance to really look at it and
12:02
hear from his team about some of the good aspects of that bill.
12:06
I think there are a lot of good aspects of the bill, namely bringing the most
12:12
cutting edge semiconductor manufacturers from Asia to the United States.
12:18
And that has accelerated under CHIPS and Sciences.
12:21
You've got Samsung building in Texas,
12:24
you've got Taiwan Semiconductor Manufacturing Corp.,
12:29
which is by far the leading producer of advanced semiconductors building.
12:35
And you've read a lot about hiccups, but it's actually coming along.
12:38
I've got, I've just got a briefing.
12:40
It's looking pretty good.
12:42
And I'd like to see, you know, chips and sciences leveraged to
12:48
get TSMC to invest in, in follow on phases of fab capacity in the United States.
12:54
Now President Trump believes that Taiwan sort of stole the American chip industry.
12:59
That's actually not the case.
13:02
The US shot itself in the foot by making poor decisions,
13:07
poor forecasts about what the chip,
13:10
what the market would need in the way of semiconductors.
13:15
We thought that it would just be Intel x86 infrastructure type chips that
13:20
we used to have on our desktop computers when desktop computers were still a thing.
13:26
In fact the world went on to smartphones and then to GPUs for making AI,
13:33
and Intel made the wrong decisions and sort of got left in the dust.
13:39
And Intel in any case never really did have a contract fab model for
13:44
making chips.
13:45
That was a wholly new industry invented by TSMC.
13:48
So I would like to see TSMC build more in the United States.
13:53
And President Trump.
13:55
One of the things that people misunderstand about President Trump is
13:58
that he's a jobs nationalist.
13:59
He is not a brands nationalist.
14:02
That is to say he wants to see people make stuff in America, irrespective of whether
14:07
they're Japanese companies or Taiwanese companies or Korean or German.
14:13
He doesn't say it has to be an American brand.
14:16
He just wants to see this stuff made in America and
14:19
to employ American labor and talent to do it.
14:22
And so that creates an opportunity for- >> Evan Medeiros: [INAUDIBLE] think that
14:26
includes Chinese investment, Matt, and how would that play out?
14:28
Because obviously, at the state level there's a lot of governors that are very
14:32
skeptical [INAUDIBLE].
14:34
>> Matt Pottinger: Well, look, this is a really interesting one.
14:36
This is one where President Biden, in a way, sort of outdid
14:41
President Trump in one area, and that is on electric vehicles.
14:46
President Trump, I think that his, his instinct.
14:49
President Trump's instinct was to say, look,
14:52
I'm going to put tariffs on Chinese EVs, but Chinese EVs are welcome to come
14:56
to the United States to build factories here to make their cars.
14:59
That, that was sort of where he's traditionally been over the decades on,
15:04
on foreign investment into the auto sector.
15:06
What President Biden's team did was.
15:09
And Liz, you were at the Commerce Department.
15:11
The Commerce Department used its new authority to investigate
15:15
the national security risks of allowing Chinese EVs on American roads,
15:20
even if those EVs were built in the United States.
15:23
And what the Biden administration determined, I think rightly,
15:28
was that the national security risk of having, these aren't really cars,
15:32
as Secretary of Commerce Gina Raimondo says, they're smartphones on wheels.
15:38
That there are significant dangers inherent in having Chinese software,
15:44
Chinese hardware that connects back, that listens to all of
15:48
your conversations, that could be used to actually shut down or
15:54
sabotage or do other things to endanger drivers.
15:58
Or even significant.
16:00
Parts of the economy by shutting down part of our transportation.
16:03
And so they actually banned not long ago the import of
16:08
Chinese EV software and other in, you know, architecture.
16:13
And so I think President Trump will probably see the wisdom of that and
16:17
inherit that and say, yeah, look, we're not going to build Chinese EVs in America.
16:22
We're gonna build other countries EVs.
16:25
And ideally, what the Trump, new Trump team really needs to do, quickly,
16:29
what the real competition about is, look, China's not going to take American cars.
16:35
They don't take American cars, now, practically,
16:38
we are not going to take Chinese cars.
16:40
And so the competition is going to be over the software and supply chains and
16:46
connectivity, all the Internet connectivity of cars.
16:51
And it's going to be a battle for
16:53
whose standard will be dominant in the rest of the world.
16:57
And we've got to make sure that we are working with the Europeans and
17:01
the Japanese and the Koreans and others to have a common standard, so
17:06
that our collective EV standards are the ones that dominate in the world.
17:11
And China is sort of the odd man out with its own
17:15
sort of exotic infrastructure and standards.
17:20
>> Elizabeth Economy: All right, let me push you a little bit more on this point,
17:24
because that then presumes that we are continuing to work with our European and
17:28
Asian allies in forums like the US EU Trade and Technology Council or
17:33
the Indo Pacific Economic Forum.
17:35
Or a number of the inner sort of international and
17:37
regionally based institutions that the Biden administration set up to talk
17:42
about precisely these issues.
17:44
President Trump was not known, for his collaborative speech spirit,
17:48
particularly with our European allies.
17:51
Do you see that changing in a second term?
17:53
>> Matt Pottinger: Well, look, the Biden administration put in a very good effort
17:58
in trying to pull the Europeans on side, if you will, with, with limited success.
18:05
Because I think the problem is not with the United States,
18:08
it's actually with Europe.
18:09
Europe needs to make a decision.
18:12
Does it want to be sort of, an appendage of China's manufacturing tsunami,
18:19
you know, basically a market to absorb Chinese overcapacity and
18:24
which will destroy even more manufacturing in Europe, or
18:29
does Europe want to band together with fellow democracies and
18:34
rule of law societies?
18:36
I think Europe is the one that needs to prove itself now more than
18:40
the United States.
18:41
Because I know how much effort the Biden team put into this, and
18:45
I haven't seen as much progress as I'd like to.
18:49
I don't blame the Biden team for that.
18:51
I blame Europe for being Myopic.
18:54
By the way, the Japanese are ready to play ball on this point.
18:58
And actually, President Trump, during his administration,
19:03
we made a lot of progress on sort of laying the architecture for,
19:08
data sharing standards that would protect privacy, protect intellectual property,
19:14
but allow shared pools of data between the United States and Japan.
19:20
That's the kind of thing that Europe should try to plug into.
19:24
There's already some work that's been done there during the first Trump term and
19:28
also during Biden's term, but balls in Europe's court, not President Trump's.
19:33
>> Elizabeth Economy: So then let me just take a quick step back from policy and
19:37
ask you about policymaking, because I think for many people,
19:40
the National Security Council, where you both served, is a black box.
19:45
Hard to have a real sense for what happens when you walk through the very grand doors
19:49
of the Executive Office Building, which is,
19:52
right next to the West Wing of the White House.
19:54
Can you just offer us a few insights into what it was like to work there?
19:59
What your daily, sort of what you did on a daily basis on an average day.
20:04
>> Evan Medeiros: My guess is that Matt's days were probably very different than my
20:08
days, just to guess that the Obama administration was different than
20:11
the Trump administration.
20:13
So, Matt, I'll let you go first.
20:17
>> Matt Pottinger: Look, the National Security Council staff, its superpower,
20:21
is that it is the only arm of the United States executive branch
20:25
that has the authority to convene the rest of our government,
20:30
the rest of the executive branch.
20:33
The State Department sometimes tries to lead and
20:36
tell the, build strategies and tell the.
20:39
Sort of whack them into place, right, Matt?
20:42
Yeah, yeah, yeah, exactly.
20:44
So that, that's really it.
20:45
The other super power.
20:46
>> Evan Medeiros: Or the Commerce Department,
20:47
I've heard that they've gotten very confident in their new capabilities.
20:53
>> Matt Pottinger: [LAUGH] So, yeah, we'll talk more about commerce.
20:56
But, but look, it is the President's staff, because,
21:00
the other departments and agencies have their own sort of parochial interests.
21:06
And, even a loyal, highly competent Cabinet secretary often gets pulled into
21:12
many of the sort of parochial interests of the bureaucracy that he or she leads.
21:19
And so the NSC is the one thing it works for the president to try to convene and
21:25
the rest of the government to come up with good options for the president and
21:30
to give the President a sense of, give him peripheral vision so that he knows
21:35
what the unintended consequences, the pros and cons of any policy option would be.
21:42
And, the other superpowers have proximity to the president himself because they
21:46
work, you know, down the hall and in the National Security Advisor suite or
21:50
right across the street in the Old Executive Office Building where most of
21:55
the NSC staff reside.
21:56
So look, I think the first Trump administration
22:02
had four National Security Advisors.
22:07
That was, that was, quite turbulent in, in the sense of that.
22:12
It was a regular turnover, but as if you look at, the sig,
22:18
this, how significantly policies changed in so many areas.
22:23
Middle east, on China.
22:27
I think that's a credit to the National Security Advisors who did serve
22:31
President Trump and his staffs.
22:33
The staff, there was staff turnover, but
22:36
there were a lot of people who stayed there for all or
22:40
most of the four years and I think served the President very well.
22:46
There were strategies that were handed off to President Biden
22:51
that were very complete.
22:53
They were well integrated.
22:54
They had campaign plans for how to implement, and
22:57
that gave President Biden's team the option of either tearing them up or
23:02
continuing those policies till they refine them or replace them.
23:07
And that's actually what happened on the Indo Pacific strategy.
23:09
I thought there was a lot of continuity.
23:12
President Biden, his team eventually updated their Indo-Pacific strategy, but
23:16
there was a lot of continuity between the two administrations.
23:20
>> Elizabeth Economy: And hopefully we'll see the same going from Biden to Trump.
23:23
Evan, what about on a daily basis though?
23:25
Can you be a little bit more granular about what you actually did?
23:29
>> Evan Medeiros: Yeah, so the first thing I would do,
23:31
I'd usually get in at about 7:30 in the morning, and that was my favorite
23:35
part of the day because it was usually pretty quiet and you would read intel.
23:39
You had a briefer from the CIA that would come and
23:42
give you a package of intel and as a scholar and
23:45
somebody that likes to read and learn, it was absolutely fantastic.
23:50
Because you have access to this extraordinary collection of information to
23:55
understand what's going on in the Indo Pacific, what's going on in China.
23:59
And then usually much of the day was a steady stream of internal meetings Matt's
24:04
precisely, right?
24:05
The two superpowers of the NSC is policy coordination and
24:09
advising the President and the Vice president.
24:11
So you spend a lot of time in meetings as senior director chairing those meetings,
24:18
trying to get the interagency to come up with policy recommendations
24:23
on hard problem how to respond to Chinese economic coercion,
24:28
how to improve relations between Japan and Korea.
24:32
And the way the process worked is you would sort of decide at evan Medeiros,
24:36
Matt Pottinger level,
24:38
then you would move it up to the deputy national Security advisor.
24:42
And then of course, Matt became the deputy and then to the national Security advisor.
24:46
So it was a very orderly process.
24:48
What I would say is, in the Obama administration,
24:50
there was a heavy emphasis on process.
24:53
So it felt like we were constantly in meetings and
24:55
constantly writing papers for those meetings.
24:58
So I think that's definitely something that could have been improved on.
25:03
It was a very process intensive nsc,
25:06
which meant that it just took time to get decisions.
25:12
Now, of course, the fun parts of the day were when Obama was meeting a leader.
25:17
I can remember after I became senior director in the summer of 2013, the first
25:22
leader level meeting I had was with the then president of Vietnam, President Sang.
25:27
And it was a big deal because Obama and
25:30
Sang were signing the US Vietnam Comprehensive Partnership,
25:35
which was the first time we had done that.
25:38
And it was a big deal for the Vietnamese.
25:40
The Vietnamese Politburo had met something like four or
25:43
five times to make sure that they were ready to do that.
25:47
And those are sort of, those are the fun days at the nsc because you go
25:52
down to the Oval Office, you sit on the big fluffy couches, pro tip,
25:57
don't sit back because you'll sort of get lost in the seat.
26:02
And you sit there and you sort of brief Obama.
26:04
Now, briefing Obama was always hard because you had given him a paper
26:08
beforehand.
26:09
He had basically, an eidetic memory, so
26:12
he would just remember everything that you wrote.
26:16
And so briefing him was hard because you had to figure out what your value added
26:19
was because he would always come in and say, guys, thanks for the paper.
26:23
Read the paper really good.
26:24
Sometimes he had questions, but you would sort of, you know, set him up for
26:28
success in the meeting.
26:29
And then the foreign leader would come in the Oval Office, you know,
26:32
you'd sort of have the meeting.
26:33
There was always something a little bit crazy that happened that nobody expected.
26:37
Then the press would come in.
26:40
So that that was sort of the fun days at the NSC.
26:42
But you basically spend your time doing a lot of meetings and
26:46
then you get to the end of the day, which is like meetings you usually didn't meet.
26:51
DO meetings past 6:00 and then you just have this inbox of email, hundreds and
26:56
hundreds of emails, including papers that you have to review, blah, blah, blah.
27:01
And you know, you basically work until you fall asleep at your desk,
27:06
go home and begin again.
27:09
>> Elizabeth Economy: That's great.
27:09
Thanks, Evan.
27:10
Matt, any favorite memory of yours from NSC days?
27:15
>> Matt Pottinger: Yeah, look, I mean it was, I think I- Do have a story about
27:20
a tweet or something that just like took everything through, right?
27:25
Well, I, I had a policy of having my staff always print out, you know,
27:29
to someone had to be monitoring the President's Twitter account and printing
27:34
out any tweets that were that touched on national security or foreign policy.
27:38
Because there were times when even the national security adviser would
27:43
be in a meeting with foreign counterparts.
27:47
And they would have just come in off the street and
27:50
the first question they'd have was about a tweet that was still scalding hot,
27:55
had just left the thumbs of Dan Scavino, who was the President's tweeter,
28:01
something that the President had just dictated.
28:04
And then they would ask us, [LAUGH] we'd be caught flat footed.
28:09
So there are people often running across the street carrying
28:14
printouts of tweets to get to me or, or Robert O'Brien or
28:18
others as we're, as we're going into meetings.
28:22
But yeah, look, I think the meetings with foreign leaders are,
28:26
I think the most memorable.
28:30
The NSE is amazing cuz it's this mix of politically appointed staff and
28:35
also people who are on loan from other departments and agencies.
28:40
And at its best, the NSC is a great
28:45
sort of gathering of talent.
28:51
And we ended up shrinking the NSC during the time that I was deputy
28:55
National Security Advisor working for Robert O'Brien,
28:59
who was the National Security Advisor.
29:02
We shrank the number of policy staff down to about,
29:05
I think it was around 107 or 108 people,
29:09
which was less than half of what it had been four or five years before that.
29:14
And it turned out to work better in our view.
29:17
We think that what,
29:19
what ended up happening was the people who remained had more authority.
29:23
It meant that there was less stepping on people's toes where there was
29:28
crossover jurisdiction and there were fewer meetings.
29:31
But it also meant that when something got elevated to the Deputies Committee or
29:34
to the national security advisor and the president.
29:37
It had already been worked very thoroughly at the senior director level so
29:43
that it would work more smoothly.
29:46
And usually, usually when there was a deputies meeting,
29:49
we usually didn't have to return to that topic for
29:52
a pretty long time because we would have very clear outcomes,
29:55
a summary of conclusions that explained what everyone was expected to do.
30:00
So it couldn't be relitigated.
30:02
We were good at tamping down efforts to relitigate things,
30:07
at least by the final 15, 16 months of the administration.
30:12
>> Elizabeth Economy: That's interesting, maybe more work up front, so
30:15
you had less work on the back end.
30:17
So let me just ask if you were sitting in Zhongnanhai, China's leadership compound,
30:23
instead of the White House, how are you looking at the US Election right now?
30:27
What do you think China's leader Xi Jinping sees as the new opportunities and
30:32
challenges of a second Trump administration?
30:36
Do you expect that he's gonna alter China's policy toward the US
30:41
in any meaningful way?
30:43
Evan, why don't we start with you?
30:44
>> Evan Medeiros: Yeah, so I think Beijing looks at the outcome of the election, and
30:48
I think they see two very different possibilities.
30:51
They look at Trump and they say, okay, do we try to deal with and
30:56
encourage Trump the dealmaker?
30:58
Right, or are we gonna be dealing with Trump, the strategic competitor?
31:05
And I think that they want the former.
31:07
They're concerned about the latter, right?
31:09
They understand that Trump, in the first Trump term, the first couple of years,
31:13
were very focused on, you know, tariffs in the trade one, the phase one trade deal.
31:18
The last year, he sort of, Trump obviously was frustrated with the Chinese for
31:22
a variety of reasons, especially Covid.
31:25
And let the strategic competitors, you know, move forward with a bunch of things.
31:32
And so the question is, will the Chinese be able to lean into and
31:37
extract maximum concession from Trump, the dealmaker?
31:42
Because that would require a sort of degree of restraint and
31:47
maneuvering on the part of Beijing that I haven't really seen to date.
31:52
It requires them to be pretty deft, right?
31:55
And it probably requires them to absorb some Some potshots and
32:00
stray voltage from the Trump administration early on.
32:05
What I do worry about is they lean into Trump the dealmaker, and
32:10
all sorts of stuff comes on the table, including Taiwan, right?
32:15
I worry that Trump looks at Taiwan and he just sees it,
32:19
he doesn't value it, its status, what it represents.
32:24
It's important to America's broader strategy, and
32:27
he just sees it as a bargaining chip.
32:30
We've all heard the metaphor where he says Taiwan's a Sharpie,
32:34
China's the Resolute desk.
32:36
And so I worry that Beijing really leans into Trump the dealmaker,
32:42
but Trump starts to do deals that don't have support in
32:46
the broader strategic community in the United States.
32:50
But I think it's gonna be tough for Beijing to get there because as Matt
32:56
rightly pointed out, Trump looks at tariffs as a source of leverage.
33:02
And the question is are the Chinese gonna be willing to absorb,
33:07
accept all these tariffs and not get locked into a tit-for-tat
33:12
action reaction cycle that just deteriorates?
33:16
And then you have the whole issue of Trump's advisors, right?
33:19
There's Trump's view and his advisor's view.
33:21
And the folks around Trump, I think it's fair to say,
33:24
are a combination of economic nationalists and national security hawks.
33:29
And they're gonna be whispering to Trump, and they're gonna be,
33:33
I think, leaning into his instincts to go hard on strategic competition.
33:37
I mean, these are people like Robert O'Brien, you know,
33:40
his article in Foreign Affairs, Matt's article with Mike Gallinger,
33:44
I think accurately captures that perception.
33:46
So the question is who sees Trump most, who talks to him most about China,
33:52
who's in the room last with him on China?
33:55
And final point is, so you have that, but
33:59
then you've got Elon Musk and Steve Schwarzman,
34:03
people that are very close to Beijing who probably,
34:08
are going to encourage him to reduce the intensity of strategic competition,
34:15
to find trade space, maybe some cooperation.
34:19
So I don't know how it all nets out, but what I think is that the range of
34:24
possible outcomes is, is wider than ever before in the US China relationship.
34:31
>> Elizabeth Economy: Really interesting, so, Matt, what do you think?
34:33
Do you agree largely with Evan's assessment,
34:36
or do you see Beijing as having different perspective?
34:39
>> Matt Pottinger: Well, look, no, I think, I think Evan covers a lot of it.
34:43
Xi Jinping Talks a lot in his internal speeches about
34:48
this dialectic of cooperation and struggle, right?
34:53
It sounds like an inherent contradiction.
34:55
But to a Leninist [LAUGH] Marxist, right?
34:59
Yeah, a Marxist-Leninist like Xi Jinping, it makes perfect sense.
35:04
The idea is that you oscillate sometimes you're pursuing both simultaneously,
35:11
but you oscillate between offering cooperation and
35:15
that often fools a lot of Americans and others into thinking,
35:20
there must have, there must be some, some fundamental shift underway.
35:26
And what it's really about is about acquiring leverage by really luring
35:31
in interests from the United States, including business interests,
35:37
in order to then acquire greater leverage and influence.
35:41
And then struggle is expending that leverage in ways
35:46
that are very painful for China's adversaries.
35:52
And so I think Evan's right that Beijing is gonna be
35:57
trying to leverage the US Business community as their main ally or
36:04
portions of the business community to do their fighting for them.
36:10
To try to constrain or restrain President Trump
36:15
by having them plead for less pressure on China.
36:20
Because pressure on China means pressure on those businessmen
36:26
who have entangled themselves, unfortunately, over the years.
36:32
But look, I do think that the thing that has changed most radically over the last
36:39
four years is, is that you now have a proper axis in place.
36:44
This predates the Biden administration in the sense that Xi Jinping
36:49
has always [LAUGH] wanted, has been working since his first trip abroad
36:54
to build closer ties with Vladimir Putin.
36:57
But now you've got the blossoming of a pretty deadly flower.
37:02
This is China, at the core of it is the main economic and
37:07
technology provider as well as the main financial provider.
37:12
And then you've got these tentacles in the form of Russia,
37:18
certainly Iran, North Korea.
37:21
I'd throw in Venezuela for good measure.
37:23
And they are, they are behaving like an axis.
37:26
They're increasingly well coordinated.
37:29
And so the first job that President Trump's gonna have is going to be
37:34
to restore deterrence.
37:36
Because right now, the fact that we've got reports in the news
37:42
this week that Russia was working to detonate bombs in US Bound cargo planes.
37:49
We've got stories from the last few days that Russia has been providing
37:54
the satellite targeting data to the Houthi rebels to target US Ships in
37:58
the Red Sea and other international shipping.
38:02
Beijing, as President Biden's administration has said,
38:07
which NATO has said is the decisive enabler of the war.
38:11
So, and you've got a division of troops from North Korea going to fight in Europe,
38:17
the largest war in Europe since 1945.
38:20
We're in a really dangerous world now.
38:22
And so I think his, in addition to the trade aspects that we've been talking
38:26
about and the technology competition,
38:28
the other key element of this is just gonna be to restore deterrence.
38:32
>> Elizabeth Economy: So I'm guessing from the very dark picture that you just
38:36
painted, and Evan's also pretty bleak picture, that there's not that
38:42
much room for renewed areas of cooperation between the United States and China.
38:48
Or am I reading you both wrong?
38:50
I mean, the Biden administration established a number of areas or
38:54
channels of communication on issues like climate change and trade and investment.
39:01
Thinking about the global,
39:04
the macroeconomic picture, controlling fentanyl.
39:09
So should these areas continue in a Trump, too, or
39:12
are there new areas we should be thinking about?
39:15
Or is there not really a point and
39:18
this is just a waste of time and energy for the US?
39:23
>> Matt Pottinger: Look, I'm in favor of dealing with the fentanyl crisis and
39:29
China helping us with that, but China is the source of that problem.
39:35
China is the main source of greenhouse gases that are heating the atmosphere.
39:43
China is fueling war in the Middle east and in Europe.
39:48
So, I mean, at a certain point, [LAUGH] the idea that at a certain point,
39:54
you have to shift to actually imposing costs before you're gonna get
39:58
to a production Productive sort of conversation.
40:02
I think we've let things go way, way, way too far,
40:07
and we've kidded ourselves for too long that Beijing
40:12
is interested in the common good of humanity.
40:16
Beijing's interested in seizing power and expanding its power worldwide,
40:23
and it's now using war and proxy warfare to do that,
40:27
as well as continuing to send chemical precursors.
40:32
And by the way, Chinese organized crime is now overwhelmingly
40:36
the number one money launderer for all drug trade, not just the illicit
40:41
fentanyl that is killing 100,000 Americans a year roughly.
40:46
But also for the cocaine, the amphetamine, methamphetamines,
40:51
all of the illicit drug trade, more than 90%, according to the U.S.
40:56
government, DEA agents and former DEA agents.
41:00
That is now all in the hands of Chinese organized crime.
41:04
Beijing has the authority and certainly the wherewithal and
41:10
knowledge to act if it wanted to there.
41:14
It clearly doesn't want to act in those areas.
41:16
So we have to give them a reason to want to act, and
41:21
that is to impose really stiff costs for
41:25
Beijing doing so much damage to our people.
41:29
>> Elizabeth Economy: Okay, Evan, any thoughts, cooperation, expand, shrink?
41:35
>> Evan Medeiros: So I'm not as dark as Game of Thrones about the world as Matt
41:39
is, but he made a very, very important point,
41:43
which is the Chinese consistently seek cooperation.
41:48
Whether it's on climate change, global pandemics, whatever it is, as a concession
41:55
to the United States as opposed to supporting a global public good.
42:01
And I think until they see it not as a gift to us, but is contributing to
42:06
a world in which they have substantial and growing interests, we're very
42:12
likely to see any kind of consistent cooperation on the part of Beijing.
42:17
I do think China's views have evolved over time from Jiang Zemin to Hu Jintao.
42:24
There were lots of internal debates, you and I, Liz,
42:28
have written about this in various books and articles.
42:32
As Chinese scholars and policymakers tried to figure out what it means for
42:37
China to have a great power mentality, for example.
42:41
So they sort of they were debating and
42:44
playing around with this idea of contributing to global public goods.
42:49
I think what shifted was the arrival of Xi Jinping.
42:52
I think he sort of put a definitive end to that and the emergence of the era of
42:57
strategic competition where the Chinese are constantly searching for leverage.
43:03
So when we go to them and say, hey, let's cooperate on North Korea,
43:07
maybe North Korean troops shouldn't be fighting for the Russians in Ukraine.
43:13
They don't say, you're right, this is a very dangerous
43:16
destabilizing development that could trigger war on the Korean peninsula.
43:19
They look at that and they say, aha,
43:21
we have a source of leverage from the Americans.
43:24
How can we use it?
43:26
And that very narrow definition of their self-interest,
43:30
I think is one of the long term structural features of the US/China relationship.
43:35
As we all know from the history of the Cold War,
43:38
the Cold War had its different phases.
43:40
And it was only after some very difficult experiences in the 50s and
43:45
the early 60s that the US and the Soviets, both collectively embraced
43:50
the concept of strategic restraint as serving their interests, right?
43:55
And that, that's what put the US and the Soviets on the pathway to,
43:59
to arms control.
44:00
We haven't reached that point in the US/China relationship,
44:04
and we may never reach it.
44:05
Let's see how the relationship evolves.
44:08
>> Elizabeth Economy: Okay, that was maybe slightly more optimistic than what Matt
44:11
had to say, but not.
44:12
>> Evan Medeiros: Yeah, that's sort of less Game of Thrones and
44:15
a little bit more Sopranos.
44:17
Does that work for you, Liz?
44:19
>> Elizabeth Economy: Okay, I think that's reasonable.
44:21
All right, I think we're coming to the end of our time, but
44:25
let me just do a quick lightning round of questions.
44:28
Just, you know, less than 10 word answers from each of you.
44:33
First question, and Evan, we'll start with you.
44:36
What is your must read book or article on China?
44:39
>> Evan Medeiros: So that's a freebie, Liz.
44:41
It's my new book, Cold the New Era of US China Strategic Competition.
44:47
I say that because it's the most systematic approach that includes multiple
44:51
scholars, including a great chapter by you, Liz,
44:54
to understand how did we get here?
44:56
How did we get to this era of strategic competition?
44:59
What does it mean and where might we go?
45:03
>> Elizabeth Economy: Okay, Matt, you wanna give boiling moat?
45:06
>> Matt Pottinger: [LAUGH] I see your book and raise you wanna, except it's out of
45:11
reach, I'd have to run across the room and I might not be wearing pants.
45:17
I actually am wearing pants.
45:18
But the John Pomfret's book, which is the Beautiful Country in the Middle Kingdom
45:25
is just a great history of US/China relations going all the way back to 1776.
45:31
And he published it about a decade ago, but it still holds up wonderfully.
45:35
>> Elizabeth Economy: Right, Evan,
45:36
what's the job you would most wanna have in a new administration?
45:40
>> Evan Medeiros: Well, given the fact that Trump just got elected,
45:43
this seems like a very distant question, but sure.
45:45
>> Elizabeth Economy: Four years from now, Evan, four years from now.
45:47
>> Evan Medeiros: Yeah, the dream job for
45:48
me would be to be chairman of the National Intelligence Council.
45:52
I think we need somebody who works on Asia sort of leading
45:56
the analytic community in the United States about global politics.
46:01
>> Elizabeth Economy: Okay, Matt?
46:01
>> Matt Pottinger: I would go to the Commerce Department, to the Bureau of
46:05
Industry and Security, and once and for all, close all of the loopholes.
46:11
This the sieve of leaky, leaky, leaky licenses that
46:16
get granted and waivers that get granted there so
46:21
that we really could put China in a much tougher position.
46:26
Squeeze the chokehold that prevents China from being, you know, industry leader in
46:31
some of the most important technologies, including semiconductor manufacturing,
46:36
possibly the toughest job in any administration.
46:39
>> Elizabeth Economy: Okay, Evan, what one thing do you wish the US had done
46:42
differently with regard to China when you were in office?
46:46
>> Evan Medeiros: Well, look, Hindsight is always 2020, Liz, but
46:49
I wish that we had recognized China's island reclamation plan quicker.
46:54
I wish that we had responded quicker and more forcefully.
46:59
>> Elizabeth Economy: Okay, Matt, look, I think there that I would like to see
47:02
the US and this is really a public private partnership, find ways to help Chinese
47:08
people communicate with the outside world and with one another more securely.
47:14
>> Matt Pottinger: I think I just don't think we're doing enough there.
47:19
We're playing defense because now Beijing controls our Internet platforms here
47:24
in the United States.
47:25
We should do a jiu jitsu move and flip that on its head.
47:29
>> Elizabeth Economy: Okay, one China issue that we don't know enough about.
47:34
>> Evan Medeiros: How the Politburo Standing Committee works.
47:37
I think we really don't understand how elite politics at
47:42
the top of the Chinese system operate.
47:45
>> Elizabeth Economy: Okay, Matt.
47:46
>> Matt Pottinger: Yeah, look,
47:47
China's economy and how weak it is right now and how broadly despised
47:52
I'm hearing Xi Jinping is even by people within his government.
47:57
That doesn't mean that people are going to be able to organize,
48:00
you know, some kind of a rebellion necessarily.
48:03
But understanding that really the last pillar of his economy that
48:08
they're standing on is massive exports.
48:11
So I think it's shame on us if we collude with that to let Beijing
48:16
continue exporting its excess capacity to the United States and to Europe.
48:22
It's really his entire strategic plan right now,
48:25
he's weakened every other element of his economy.
48:29
>> Elizabeth Economy: Okay, and last one.
48:30
On a scale of 1 to 10, how likely are we to see a Nixon Mao
48:35
moment in the US China relationship within the next decade?
48:40
>> Evan Medeiros: 0 being low probability, 10 being high probability, Liz.
48:43
>> Elizabeth Economy: Yes, yes.
48:44
>> Evan Medeiros: Yeah, I would say I'll give it a one.
48:47
>> Elizabeth Economy: Okay, Matt?
48:49
>> Matt Pottinger: Yeah, I think as long as Xi Jinping is the leader,
48:52
it's not gonna happen because Xi Jinping had his Nixon MA moment.
48:58
It was for him to go in early 2013 to Russia and
49:01
to tell Vladimir Putin, I've got, I've got an idea for you.
49:06
Over the next decade, we're gonna sow chaos in the world together.
49:10
So that was the moment, [LAUGH] and
49:12
we're not gonna break those two lovers from their embrace.
49:17
We've just got to prepare for what comes after and
49:20
try to lay a favorable ground for what comes after.
49:25
>> Elizabeth Economy: Okay, so a long struggle in front of us with not much hope
49:29
for a breakthrough in the US China relationship.
49:32
On that note, let me thank both of you for taking the time to speak with me, and
49:37
I really hope that you both find your way back to the White House to help lead us to
49:42
a better future for US China relations.
49:45
If you enjoyed this podcast and want to hear more reasoned discourse and
49:48
debate on China, I encourage you to subscribe to China Considered via
49:52
The Hoover Institution YouTube channel or podcast platform of your choice.
49:56
In the next episode, I'll be speaking with leading economic analyst and
50:00
Rhodium Group co-founder Dan Rosen.
50:02
We'll be talking about the current state of the Chinese economy,
50:05
which came up in our discussion today, whether it's poised for a rebound and
50:09
what it all means for the United States.
50:11
Thank you very much.
50:12
[MUSIC]