00:00when it comes to your expectations for deliverables, for outcomes of this?
00:04Because in many ways, the lead up and the circumstances of this state visit are highly
00:09unusual, right? The ongoing war in the Middle East, this has already been delayed from the
00:15previous sort of time frame that we're expecting it to take place, not to mention President Trump
00:20is quite unconventional in his diplomacy efforts. How does that frame the way that you go into
00:26this visit? Certainly, this is an unusual time. There's no two ways about it. But look, I think
00:32both sides have actually right-sized their expectations about what can be achieved,
00:36both through a leaders' meeting and more broadly in the relationship. A year ago, we were talking
00:40about a grand bargain, a strategic reset of the relationship. Now it is about managing a very
00:45difficult, conflicted relationship. The president is focused on trade issues. If you look at who's
00:50on that plane with him, the CEO delegation coming along to increase US exports, that is really the
00:55focus, not the tougher underlying issues like cyber, nuclear buildup, AI, or South China Sea and
01:03regional stability. That's not to discount the importance of that leader-level meeting. We just
01:08need to be realistic about what is possible in this context. There's a bit of a mismatch on time
01:14horizon as well. President Trump is looking at short-term gains, tactical wins on exports. And
01:20President Xi is looking long-term. How does he position China for a much more contested world,
01:25where the US-led order is starting to crumble?
01:31It's so very interesting that you mentioned about the right-size expectations, because I'm
01:36looking at this visit. And in a lot of ways, you're asking, is this a trade mission or a
01:41diplomatic mission, right? When it comes to some of the trickier topics like AI, like accessibility of
01:47chips, it was very interesting that we saw that last-minute inclusion of Jensen Huang from
01:50NVIDIA, right? Does that mean that this is now sort of front and center on the table? When I ask
01:55you this, because you were the person who was behind putting together that pledge that President
02:00Biden made with President Xi about not turning over nuclear capabilities to artificial intelligence.
02:06That's right. And that took us years to negotiate with the Chinese, even though it is a common-sense
02:11declaration that both sides had implicitly supported in the past. But there is such a high level of
02:17distrust, particularly when it comes to AI between the two sides. It's very difficult to reach even
02:22the most basic agreement. So look, if the US and China walk away from this meeting with an agreement
02:27to talk about the risks inherent in AI, military hallucinations, crisis communications, that would
02:34be a win. Even if we don't have details on what that would look like, starting a process would be
02:39helpful. But that's going to take hard-nosed diplomacy on the back end to really negotiate the details and set
02:44up those channels. And that will take time. On chips, you know, there are folks around the
02:50President in his own administration that are calling for continued controls on high-end chips to
02:56China. Congress has made its concerns clear, both through legislation and declarations, about the
03:02shipping leading-edge chips to China. But you're right, the inclusion of Jensen Huang in this delegation
03:07at the last minute indicates this might still be on the President's mind. And we really won't know
03:13until he walks into that room and has those conversations with President Xi whether we'll
03:17see additional flexibility on chip export controls. When it comes to the tech sector, of course, Beijing
03:25has its own leverage with critical minerals. How much of a gap is there between the US trying to catch
03:33up to China and how much has been done so far? This is a long-term effort to diversify away
03:39from
03:39reliance on China for rare earths. You know, Tokyo knew of this vulnerability and was, in fact,
03:46hit by rare-earth export controls 10, 15 years ago. And it took a concerted effort. And still,
03:51they were only able to step back from 90% reliance to 60% reliance. The supply chains,
03:57the processing, everything is concentrated in China or through Chinese companies. And so,
04:01look, we're hearing from the US government now that it is more likely to be four,
04:06five, six years away before we see real diversification. Beijing is not going to give up
04:12this tool of leverage, these rare-earth export controls easily. So I expect coming out of this
04:17summit, we will see pledges for continued flows of rare-earths, approval of licenses. But those
04:23controls will, in fact, remain in place with China able to ratchet up or down in order to apply leverage
04:30to the United States in the future. And Sarah, of course, another difficult topic will be US arms
04:36sales to Taiwan, which President Trump has said will be discussed at the summit. How risky is this
04:42topic, given that the US has avoided for decades bringing any consultations up with Beijing beforehand?
04:49I've prepared for four leader-level summits between the US and China. At every single summit,
04:55Taiwan was, of course, on the agenda. It's about managing risk, ensuring we're communicating clearly
05:01about intentions and about concerns. It was never about negotiating arms sales. That was not on the
05:07table. You know, the United States has a commitment to Taiwan's self-defense. It supports the status quo.
05:14These are all longstanding policies. If arms sales are put on the table as part of negotiations,
05:18I would be deeply concerned about the message that sends to regional partners, as well as to Taipei,
05:24and frankly, to Beijing. Now, again, I'm not worried about near-term escalation or invasion scenarios.
05:29I don't think that's on the table. But looking further out, if there is an indication that the
05:34US is starting to step back from that commitment, I do think it will embolden Beijing.
05:40Sarah, what can we expect in terms of concrete action coming from Beijing in terms of its support for Iran?
05:49Beijing has tread very carefully here, weighing its relationships, not just with the US and with
05:54Tehran, but also with Gulf countries, not taking a position on the mediation other than that the
05:59conflict should be brought to a close, that trade routes reopened and negotiations move forward. I think
06:07we're going to see a continuation there. I don't expect a shift in position here. Beijing is wary of being
06:13drawn into mediation directly. They see this as a trap, that they will be blamed if things go poorly.
06:20Instead, I think it's mostly about behind the scenes pressure on Tehran to stay at the table
06:25and support for Pakistan in playing that mediator role. That's about the most we can expect at this moment.
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