00:00For both the governments, for both leaders, this is the most important relationship they have, the U.S.-China relationship.
00:06And they have ambitions for this year. They want to meet Xi Jinping, Donald Trump, two to three, even four
00:13times this year.
00:14And there's a lot to talk about. I think we'll see a big focus on trade, supply chain, and the
00:20commercial relationship.
00:21Do you think it's going to be productive? Do you think there's going to be an actual deliverable coming out
00:25of it?
00:26Because that takes a lot of groundwork to ensure that happens before the leaders get to that point.
00:31And do you think that has been done?
00:33Well, it's an unusual summit in this respect.
00:36The person leading the preparations for President Trump is not the secretary of state, the national security advisor, or the
00:42secretary of defense.
00:43It's the secretary of the treasury.
00:45And Secretary Besant has developed, I think, a very effective relationship with the key Chinese interlocutor,
00:51and that's Vice Premier Hurley Fung, who is both very experienced.
00:55He oversees the central bank, the finance ministry, the commerce ministry,
00:59but he also has a close personal relationship of 40-plus years with President Xi Jinping.
01:05And Secretary Besant and Vice Premier Hurley Fung have been meeting, both virtually and together,
01:11pretty consistently for the last 15 months.
01:14And I think their ambition, let's see if they can accomplish this,
01:18would be to bring stability to the trade and supply chain relationship.
01:22Can they agree to a freeze or a truce on tariffs so that neither side will raise tariffs over the
01:29course of this year
01:30and hopefully in the next year?
01:31Can they agree not to have a supply chain war of the type they had in 2025, so a supply
01:39chain truce?
01:40Can they agree in general, and Secretary Besant, I think, has been very persuasive about this,
01:47that we should not decouple this big trade relationship in goods and services,
01:53but we'll have to de-risk in certain dual-use technologies?
01:56That, to me, is a very sensible policy.
01:59If they can accomplish that and have the Chinese agree to a major buy of American agriculture,
02:06soybeans, pork products, fishery products,
02:09that will be, I think, a good summit in the economic realm for President Trump.
02:15I want to draw on your experience having participated in some of these leader summits before,
02:19and I'm curious what the Chinese hope to get out of this.
02:22What have you observed about the way that President Xi approaches meetings like these and his advisers as well?
02:26Well, first, they want no surprises, and what really struck me as I worked on these three big summit meetings
02:34between 2022 and 2024 for President Biden with President Xi, the Chinese want no surprises.
02:39They want everything to be worked out, everything, strategic, tactical decisions,
02:45before the two leaders walk in the room.
02:47They then want the two leaders in almost a highly stylized situation,
02:52with flanked by seven or eight people on each side,
02:56to have a conversation about the agreements and about the disagreements.
03:01But they don't want haggling at the table between President Xi and his counterpart.
03:06So I think that is going to hold true,
03:08because that's what the Chinese insisted on when I was working on this relationship.
03:13I also think the Chinese want stability with the United States.
03:17The Chinese have a number of economic strengths,
03:21but they're facing some internal tribulations in the Chinese economy that requires a period of stability.
03:27They don't want a sense of crisis with the United States in the immediate year or two ahead.
03:32And so I think I'll bet that we'll see some progress on the commercial side.
03:37Can they even go further?
03:38Could they agree that, in addition to our tech firms competing ferociously on AI,
03:46who's going to be first mover, first adapter,
03:48could they also agree that our countries need to be working together on the worst aspects of AI?
03:56For instance, if, look at the mythos model from Anthropic,
04:01could cyber terrorists, could cyber criminals get their hands on that very destructive technology?
04:06That might argue for the U.S. and China to begin a discussion about how we and the two of
04:13us in other countries
04:14should be working to balance against those kinds of threats.
04:17So in a way, this could be a very important meeting if all of that is discussed.
04:22The backdrop of this, of course, is the war in Iran.
04:25China gets 45 to 50 percent of its crew through the strait.
04:29I'm wondering how involved or not involved in Iran China has been.
04:33You've kind of seen them weigh in here and there, but you feel like they're taking a back seat
04:37and just kind of watching it play out.
04:38There was that great economist cover with Xi in focus kind of behind Trump, who was shouting.
04:43And the cut line was, you know, never get in the way when your enemy is making a mistake.
04:47Is that how they're viewing Iran in this conflict?
04:50I think it's a mixed bag.
04:52You're right on the one hand that the Chinese have been messaging across the world,
04:57we're the stable country.
05:00Our leader hasn't invaded anybody.
05:02Our leader believes in the global order.
05:05You can count on us to be a consistent, reliable partner.
05:08That's the Chinese message, juxtaposing Xi Jinping with President Trump
05:14and everything that's happened from Venezuela to Greenland to questioning Canadian sovereignty
05:21to warring with the NATO allies to the Iran war.
05:24And I think that the Chinese have been playing on that and making some hay,
05:27particularly in the global south.
05:29But on the other hand, I think the Chinese have taken a hit of sorts in their credibility.
05:34They did not in any way, shape or form stand up for Iran in this crisis from February 28th forward.
05:41They didn't stand up for Venezuela.
05:43They couldn't politically, diplomatically.
05:46They obviously couldn't militarily and wouldn't do that.
05:48So I think they look a little bit unreliable because Venezuela and Iran were strategic partners of China.
05:55In addition to that, it's very interesting that President Putin has been much more vocal in supporting Iran
06:02than President Xi Jinping has.
06:05President Putin delivered a personal message of condolence when the Iranian Supreme Leader Ali Khamenei
06:12was killed in the first day of the war.
06:13The Chinese didn't do that.
06:14And I think the Chinese have been messaging they don't want to live in the law of the jungle.
06:20And that's the hit against the United States.
06:22They've also been messaging the Strait of Hormuz needs to open.
06:26China depends on that.
06:27The global economy does.
06:29They've been very worried, the Chinese, about their capital investments and trade with the Gulf Arab states,
06:36not just with Iran in terms of energy.
06:38So I think the Chinese, like President Trump, want to see some kind of agreement with Iran
06:44to open the strait to commercial traffic where Iran's not the toll keeper.
06:48I'm sure you've seen the photograph of the Iranian foreign minister
06:51and the Chinese foreign minister meeting in Beijing in recent days.
06:54And I'm curious what message you think that sends.
06:56There was this back and forth about a potential one-page memo of understanding between the U.S. and Iran.
07:01And I noted that Iran thanked the Chinese for their four-point proposal.
07:05Are they stepping up to play a bigger role here in trying to resolve the conflict in the Middle East?
07:10I don't think they want to be the middleman.
07:13But they want an agreement and they want the war to end and the strait to open and energy to
07:18flow.
07:18I also thought that Foreign Minister Wang Yi, he's a very experienced diplomat,
07:23was sending two messages when Foreign Minister Arakshi of Iran came to see him a couple of days ago in
07:28Beijing.
07:28Message number one, of course, China supports Iran.
07:31They're strategic partners.
07:33China does not support what the U.S. and Israel have done in beginning this war back on the 28th
07:38of February.
07:39But on the other hand, I thought there were some subtle messages from the Chinese during the Arakshi visit.
07:46You need to negotiate seriously.
07:48We think there should be serious negotiations to enable the ceasefire to come about.
07:53They haven't really focused on the nuclear issue of the highly enriched uranium,
07:59but they've been laser-focused, the Chinese, on the strait.
08:02The Chinese, when they think of power and they think of their global power,
08:06they always think trade, economics, manufacturing, exports, free flow of goods first,
08:14because that sustains this huge manufacturing, export-led economy that is giving China the little growth that it has now.
08:21Before we let you go, I do want to ask you about Taiwan.
08:25This American president hasn't been very vocal on that issue,
08:28and some Taiwan supporters are concerned that that might be something he'd be willing to negotiate away in the room
08:34to pursue some of those other goals, or not negotiate away,
08:37but not send strong signals that America will have Taiwan's back in case of a Chinese invasion.
08:43Do you think this president will militarily support Taiwan if that happens?
08:47And are you concerned what happens with that issue at this summit?
08:51It's very clear the Chinese want to push President Trump on Taiwan.
08:55Foreign Minister Wang Yi came out and said that after a phone call with Secretary Rubio a couple of days
09:00ago
09:00that Taiwan is going to be the red line issue,
09:03that the United States should not cross Chinese red lines.
09:06That's a very familiar statement to me.
09:09They made that statement to me hundreds of times.
09:12And it's important that President Trump, I think, do two things.
09:15Number one, honor the Taiwan Relations Act, law of the land in the United States.
09:20We have to supply Taiwan with defensive military technology.
09:24And we have never, over 50 years, negotiated those military sales with the Chinese in Beijing.
09:31And there was a beginning of that when President Trump and President Xi had a discussion about that.
09:36A couple of months ago.
09:38I think that's a dangerous area.
09:39Number two, we should put the pressure on the Chinese government.
09:43They're the ones that are threatening to invade Taiwan.
09:47They're the ones who have simulated blockades, military blockades of Taiwan Island.
09:51And the rest of the world does not want to see a war.
09:54They don't want to see the Taiwan Strait close, consider the impact on the global economy.
09:59So I think we should be on the offensive, warning the Chinese government to be more reasonable,
10:04to meet with the Taiwan leadership, which they haven't done for 10 years,
10:08and kind of turn the tables on President Xi and on his team.
10:15I think Taiwan will definitely be on the Chinese agenda for this meeting.
10:19And I hope President Trump will maintain our 50-year one-China policy where we fulfill these military obligations,
10:27defensive sales of technology to the Taiwan authorities.
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