Is the War in Gaza Over?

Bloomberg

1 day ago

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00:00So the point has been made that now the hard part starts. Of course, the negotiation is very

00:05difficult, very complex. But talk us through what the rebuilding looks like and guaranteeing that

00:10this agreement will last and be sustainable. Well, just to be fair, what was accomplished

00:16was also difficult. Nothing in the Middle East is easy. And there's a lot of credit to go around

00:22just to get us to this point. And there's reasons to celebrate, obviously. But that said, you're

00:26right. I'm not fighting your basic point. Certainly the harder part is to come. One is to make sure

00:32the ceasefire holds. There's questions about the role of Hamas and how does one try to promote

00:38disarmament? What does one do to get enough food into the area? How does one create security in the

00:44area? What about governance for the area and so forth and so on? And that doesn't even get to

00:50questions about the future political process between Israelis and Palestinians. So there's

00:58any number of difficult challenges. But the most basic is to create conditions of order,

01:04of stability. And that at least creates an environment in which you can begin to address

01:09humanitarian issues, economic rebuilding, political governance and so forth. That is the

01:15prerequisite, stability and order for all else. Well, I guess to that point, and you list a number

01:20of potential issues. There are potential questions when it comes to disarmament, governance, rebuilding,

01:25the list goes on. But when it comes to enforcement, I mean, what do you think that the administration,

01:30the Trump administration, is prepared to do here?

01:34Well, the critical part of enforcement would probably come from this international or Arab

01:39stabilization force. And it is going to have to be militarily capable because you can't assume

01:45you have a permissive peacekeeping kind of environment. There are likely to be challenges,

01:50whether it's from Hamas or some other group that or individual that is there. So that is,

01:57I think, I would think that is the most basic. You can also try to make economic help contingent

02:03on certain types of behavior. If Israel wants to respond to some type of incident,

02:09you may want to say, look, that doesn't cross the threshold, hold back for now. So I think there's

02:14things you can do to incentivize certain kinds of behavior. But the most important thing is putting

02:19into place an international force that has enough capability to deter armed attacks. And if and when

02:27deterrence doesn't work, to respond to them decisively.

02:32Today is a day when I think a lot of President Trump's critics have come out and given him credit

02:39for this. Really a monumental achievement and historic achievements we've been saying all day.

02:44Certainly the freeing of the remaining hostages by itself is a pretty amazing feat. And he credits,

02:51you know, not only his team, but his sort of are the deal, his negotiation style, which is,

03:01you know, not typical of a U.S. president. Do you think that that's a huge part of this,

03:07Richard? And can he use that now to solve the Russia-Ukraine war?

03:13Look, he does deserve credit, but also he was able to operate in a context that was conducive

03:19to diplomacy. Hamas had been militarily weakened, as had Iran, its principal military benefactor.

03:26Iran is also economically in dire straits. The Arab countries wanted the situation to settle down.

03:33And then he was in a position to put pressure on Israel. But again, none of this should diminish

03:39the fact that the president did an interesting thing. Rather than waiting for every I to be

03:45dotted and T to be crossed, he essentially said, we've got a deal. Don't you now get in the way of

03:50it by raising this or that question? So I think he put some very effective leverage on both the Israelis

03:56and on Hamas and has succeeded. I think the fair question is whether such an approach will succeed

04:03going forward. One can hope. I just think that history leads you to be somewhat more sober about

04:09it. Speaking of leverage, J.D. Vance was on the Sunday talk shows or on Fox, I believe, yesterday

04:16saying that the president has more cards in this much colder, thankfully, war between the U.S.

04:22and China, a trade war. On the other hand, Meredith Whitney was out yesterday with a note pointing

04:29out that China's Ministry of Commerce has said it will ban any export of critical minerals to

04:36the U.S. for military purposes. And she points out, at least as far as she knows, that a lot of those

04:43big defense contractors, Lockheed Martin, General Dynamics, may be almost out of critical minerals.

04:50And some, like GE and FLOR, are depleted completely. How serious is this issue?

04:57It is a serious issue. My basic point would be both the United States and China are in a position

05:02to hurt one another. We don't want to see mutual assured destruction here. But the United States

05:07has allowed itself to get into a situation where its dependence upon Chinese rare earths and certain

05:13components is truly unhealthy. And that is something that will take time to address, time to

05:20reduce. But in the meantime, yes, China has significant leverage. We have some leverage over

05:24China in various ways in terms of technology transfers and so forth. Again, you've got the

05:30meeting between the president, Xi Jinping, and President Trump scheduled in a few weeks from now,

05:35potentially a summit sometime in the first half of next year in China. To me, the question is whether

05:40they can work out an economic relationship that makes economic sense and takes into account the

05:47military realities? I think it's possible, but it's not going to be easy. And I think we saw that

05:52what happened Friday, even though today we've seen both sides pull back a little bit from the brink.

05:58What's interesting when it comes to the U.S.-China relationship, where negotiations have progressed

06:03to or talks, whatever you want to call it, is that it feels like it's the non-tariff issues that have

06:09really taken center stage. We're talking about rare earths. Of course, that seems like a very urgent part of

06:13this conversation. How do you think tariffs and the threat of more tariffs filter in here? We were

06:20talking to Jeff Moon on Friday. He's the former USTR under the Obama White House. His view is that

06:26they will be limited and ineffective. And I wonder if you share that view. I tend to, because China has

06:32lots of ways of pushing back. We've seen it again with rare earths, certain things in supply chains.

06:38Also, China will be able, at least in part, to find alternative markets to the United States.

06:44One other factor also, which is going to come into all this, is going to be geopolitics.

06:48Economics don't take place in a vacuum. There's questions of the South China Sea,

06:52even more acutely questions about Taiwan. So when the two presidents get together, either in Seoul

06:58or next year in China, if the summer were to happen, it turns out to be a really big agenda,

07:04both economics and non-economics. And one of the questions is, are there any trade-offs between

07:09the two? Would economics get dealt with in their lane and geopolitics in its lane?

07:15What's also interesting when you think about how things are progressing with the US-China

07:19relationship, I remember a few months ago, the Chinese side made it clear that they wanted

07:23basically delegates to come in and negotiate these trade issues. They didn't want the two leaders,

07:29President Xi and President Trump, to be in conversation with each other. But it feels like

07:33that is the main channel of communication. Of course, it's not the only channel. We know that

07:38they have teams on either side. But it seems like there's so much focus on this meeting between these

07:44two leaders, whether or not they're going to meet in a week and a half. And that isn't necessarily how

07:50the Chinese wanted this conversation to happen.

07:53Well, I'm not sure either, President. I don't mean this is disrespect. Is it a position to

07:58negotiate details about tariffs or export controls? Some of those complicated meetings I ever sat in

08:04when I was in government dealt with export controls and technologies. And so I think that's too much to

08:11expect them to deal with. I think their job is to deal, if you will, with the big basic issues. And

08:17that's why you have aides and staff to deal with all the details, whether it's tariffs, export controls,

08:24or anything else on the economic side. But they're going to have to set the parameters. And again,

08:28they're going to have to decide whether there's any tradeoffs between economic issues and geopolitical

08:33issues. And I think that could be one of ultimately one of the really big questions to be decided

08:37either later this month or next year.

08:39I want to finally ask, Richard, about Argentina. Javier Malay is coming to the White House tomorrow.

08:48And of course, you've had Secretary Besant say he wants to guarantee Argentina's currency with,

08:55I think, an additional $20 billion. Seems like they'll go through that pretty quickly if the market

09:00doesn't believe it. What's your read on the situation?

09:04Well, I tend to agree. And the real question to me is, if you're going to guarantee something,

09:07what are the conditions? What is it we want from Argentina when it comes to economic policy,

09:15maybe even non-economic policies? We have leverage here. So the question is,

09:19what do we get for it? But to have an unconditional guarantee makes very little sense unless you think

09:24all they need is some financial help to get over some type of an obstacle. I don't see it that way.

09:31So I would think we ought to be linking it to all sorts of policy changes, which, by the way,

09:36would be in our interest in Argentina's as well.

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