US-China Policy in Trump 2.0

>> Elizabeth Economy: Welcome to China Considered, a podcast that brings fresh insights and informed discussion to one of the most consequential issues of our time, how China is changing and changing the world. I'm Liz Economy, Hargrove senior fellow and co-director of the US, China and the World Program at the Hoover Institution at Stanford University.

Every two weeks, I'll be joined in conversation by senior government officials, business leaders, and prominent activists and authors from around the world. We'll discuss China's most important political and economic trends, its foreign policy ambitions, and its relations with the United States and other countries. The China Considered podcast is produced by the Hoover Institution, and you can subscribe to it via the Hoover Institution YouTube channel or your favorite podcast platform.

Today, we're gonna focus on US-China relations, where the biggest news comes not from China, but from the United States, where Donald Trump was just re-elected for his second term as President. To help us understand what this election is likely to mean for the US-China relationship, I've invited two of the US's foremost China strategists, Matt Pottinger and Evan Medeiros, to provide us with their take.

Matt and Evan share the distinction of having served as special assistant to the president and senior director for Asia and the National Security Council. Matt during the first Trump administration and Evan during the Obama administration. Matt also served as Deputy National Security Advisor and is currently a Visiting Distinguished Fellow at the Hoover Institution as well as a principal at Garnaut Global.

Evan Medeiros is a renowned scholar of US-China relations and is the Penner Family Chair in Asian Studies and Kling Family Senior Fellow in US-China Relations at Georgetown University. He is also a senior advisor at the Asia Group. Welcome to both of you.

>> Evan Medeiros: Thanks, Liz.

>> Elizabeth Economy: So we're about to embark on Donald Trump's second term as President of the United States, and there's a lot of speculation about what he may or may not do vis-a-vis China.

But before we talk about what we're likely to see in a Trump second term, I want to level set and ask where US-China policy is today. Evan, let me start with you. The Biden administration identified China as the most consequential long term strategic threat to the United States.

Do you agree with this assessment, and how would you characterize the Biden administration's strategy to manage this threat?

>> Evan Medeiros: So I do agree with that assessment of the China challenge. The DoD likes to call it the pacing threat or the pacing challenge. I think that accurately captures the range of economic, diplomatic, military challenges that China poses.

I think the Biden administration has actually been very clear about what their China strategy is. They have a bumper sticker, invest, align, and compete. But let me talk about it in more academic terms. It's what political scientists would call a combination of internal balancing and external balancing. Internal balancing means investing more in your capabilities at home.

So that's military modernization, but also economic modernization, whether it's the CHIPS Act or the Inflation Reduction Act. It's about making substantial investments at home, so the US can compete with China in key economic sectors and technology sectors over the long term. And then there's external balancing. External balancing is about forging alliances and security partnerships with countries all over the world.

The Biden administration came in and found that a variety of those alliances in Europe and Asia needed some work. They needed to be repaired. And so they went about doing that. And then after the Russian invasion of Ukraine, the Biden administration found that there was an even more permissive environment for updating, expanding, and modernizing them.

And I think one of the most interesting aspects, Liz, has been how the US has used the Ukraine crisis to sort of link alliances in Asia to alliances in Europe. So I think the Biden administration's actually had a very consistent approach from the beginning, and I think that they've racked up lots of successes.

>> Elizabeth Economy: What would you say is probably the biggest success in your mind?

>> Evan Medeiros: Probably the way in which they reconfigured shaped the external security environment in Asia, specifically the alliances and partnerships, in a way that I think shaped Chinese views and Chinese preferences. Because, at the heart of your China strategy is you wanna deter certain bad behaviors.

Bad behaviors that the trifecta I like to use is Chinese deterring Chinese predation, Chinese coercion, and Chinese aggression. And what became very clear in previous administrations is that trying to negotiate restraints or constraints on China didn't really work, right? As China became stronger, they just sort of played for time in negotiations or blew off their commitments.

And what we found over time, and this is one of the ideas behind the original Obama pivot, was that the best way to shape China is by shaping the strategic environment around China, right? By sort of creating an environment in which the Chinese realize certain behaviors are not going to work and may actually be costly for them.

And so I think the Biden team did great work on the alliances. But to me, one of the most interesting dimensions of their policy was they didn't just improve what we call the hub and the spoke system. The hub and spoke being the US is the hub, the five allies being the spoke, but they created an environment in where in which you began to have spoke-to-spoke interaction.

In other words, Japan and Australia, Australia and India, Vietnam and Japan. This is what Ambassador Rahm Emanuel calls the lattice work. And to me, creating an environment where hub and spoke is not just bigger and better, but you begin to have this sort of lattice work framework. To me, improves the ability to deter the predation, the coercion, and the aggression that we've seen.

>> Elizabeth Economy: And presumably this lattice works. Lattice formation is something that could continue through to the next administration, whatever President Trump may decide to do in terms of the US relationship with allies or with China.

>> Evan Medeiros: Maybe, maybe not. Because I think the lattice work, the lattice system only works if the hub and spoke is strong, right?

And so we'll sort of see how it plays out. You could argue that if the US Becomes less reliable, that Japan, Australia, Korea, look for more partners in the region, but the reality is nothing can really replace a credible and capable US presence.

>> Elizabeth Economy: Okay, so perfect entry point for Matt.

Matt, you spent four years working for President Trump as his top adviser on China. What were his priorities when it came to China policy, and what do you expect to see from him on China this time around? Do you see a lot of continuity or do you see a lot of change coming?

>> Matt Pottinger: Yeah, I think he'll pick up in many ways where he left off in focusing on trade first, looking at the trade relationship as a proxy for the problems in the broader relationship between China and the United States and tariffs. He viewed tariffs in the first administration as something that was both an end in of itself, but also a tool for building leverage to go into a negotiation with China for a trade deal.

And he actually achieved a trade deal, that on paper, was actually quite good. The phase one agreement that came out in January 2020, right before COVID hit the world like a tidal wave, was novel in many ways because it gave the United States. Unilateral ability to apply remedies if China was cheating or failing to uphold its end of the deal.

And it also maintained tariffs until China complied, rather than doing what the United States has done repeatedly over the prior 30 years, which was we would reset or refrain from imposing tariffs in a show of good faith to Beijing and then Beijing would, would sort of tap us along and, you know, things wouldn't improve in terms of IP protection and so forth.

So the problem is that Beijing did not really uphold its end of the deal with, with even the phase one agreement. And so I think that if there's going to be a difference in his approach on trade, President Trump might be more inclined to pursue significant tariffs on China, a significant increase on tariffs without, without the, the goal necessarily.

He'll be open to a negotiation, but without the goal of it leading to a phase two agreement. Given that every, you know, the assemblage of, of Chinese trade deals that it's made with us and with other partners that has accumulated over the decades, you know, China just doesn't hold up its end of the bargain.

It's not a rule of law society. So the idea that you could have an agreement that would work with another rule of law society, it doesn't really hold when you're dealing with a mercantilist dictatorship. So I think that that's going to be a change.

>> Elizabeth Economy: So, I mean, he's pledged already 60% increase, right, on tariffs already in some goods.

We have 25% tariffs. So it takes to 85% tariffs on some Chinese goods coming to the country. What do you think the impact of that's going to be? And do you expect that he'll actually live up to that pledge?

>> Matt Pottinger: Yeah, I think he'll probably go big. It's an open question as to whether he does this in phases or whether he just goes big right at the outset.

I'm sure that that'll be a discussion and debate between him and his cabinet when he installs his cabinet. But I do think that the effects will be to start shifting more American investment and more foreign investment back to the United States and also to other countries that are at least rule of law friendly economies to the United States.

We saw that to some extent already from just the existing tariffs President Trump put in place. It shifted a lot of foreign direct investment out of China, but to other economies, some of it to the US I'd like to see more of that into US Manufacturing, but a lot of it's gone to Mexico.

A lot of it's gone to Indonesia, Vietnam, and places like that.

>> Elizabeth Economy: So, okay, picking up on that point, I think one of the things that Evan identified,, as one of the hallmarks of the Biden administration strategy was the investment at home chips and science, the inflation reduction act, the bipartisan infrastructure law, all of these sought to increase investment in innovation and advanced manufacturing here at home.

In addition, we have the sort of focus on alliances. To what extent do you think Trump, President Trump is going to continue with these elements of a Biden administration strategy? Are you to concede that the CHIPS and science will remain in place and Inflation Reduction Act will remain in place and that we're going to continue to have the pursuit of robust alliances with Europe and Asia?

>> Matt Pottinger: Well, look, on CHIPS and Science, President Trump is generally suspicious of subsidies. He likes tariffs, which is a different kind of subsidy in a way, but it's his preferred tool. He's been critical of CHIPS and Sciences, but I think that if once he has a chance to really look at it and hear from his team about some of the good aspects of that bill.

I think there are a lot of good aspects of the bill, namely bringing the most cutting edge semiconductor manufacturers from Asia to the United States. And that has accelerated under CHIPS and Sciences. You've got Samsung building in Texas, you've got Taiwan Semiconductor Manufacturing Corp., which is by far the leading producer of advanced semiconductors building.

And you've read a lot about hiccups, but it's actually coming along. I've got, I've just got a briefing. It's looking pretty good. And I'd like to see, you know, chips and sciences leveraged to get TSMC to invest in, in follow on phases of fab capacity in the United States.

Now President Trump believes that Taiwan sort of stole the American chip industry. That's actually not the case. The US shot itself in the foot by making poor decisions, poor forecasts about what the chip, what the market would need in the way of semiconductors. We thought that it would just be Intel x86 infrastructure type chips that we used to have on our desktop computers when desktop computers were still a thing.

In fact the world went on to smartphones and then to GPUs for making AI, and Intel made the wrong decisions and sort of got left in the dust. And Intel in any case never really did have a contract fab model for making chips. That was a wholly new industry invented by TSMC.

So I would like to see TSMC build more in the United States. And President Trump. One of the things that people misunderstand about President Trump is that he's a jobs nationalist. He is not a brands nationalist. That is to say he wants to see people make stuff in America, irrespective of whether they're Japanese companies or Taiwanese companies or Korean or German.

He doesn't say it has to be an American brand. He just wants to see this stuff made in America and to employ American labor and talent to do it. And so that creates an opportunity for-

>> Evan Medeiros: Think that includes Chinese investment, Matt, and how would that play out?

Because obviously, at the state level there's a lot of governors that are very skeptical.

>> Matt Pottinger: Well, look, this is a really interesting one. This is one where President Biden, in a way, sort of outdid President Trump in one area, and that is on electric vehicles. President Trump, I think that his, his instinct.

President Trump's instinct was to say, look, I'm going to put tariffs on Chinese EVs, but Chinese EVs are welcome to come to the United States to build factories here to make their cars. That, that was sort of where he's traditionally been over the decades on, on foreign investment into the auto sector.

What President Biden's team did was. And Liz, you were at the Commerce Department. The Commerce Department used its new authority to investigate the national security risks of allowing Chinese EVs on American roads, even if those EVs were built in the United States. And what the Biden administration determined, I think rightly, was that the national security risk of having, these aren't really cars, as Secretary of Commerce Gina Raimondo says, they're smartphones on wheels.

That there are significant dangers inherent in having Chinese software, Chinese hardware that connects back, that listens to all of your conversations, that could be used to actually shut down or sabotage or do other things to endanger drivers. Or even significant. Parts of the economy by shutting down part of our transportation.

And so they actually banned not long ago the import of Chinese EV software and other in, you know, architecture. And so I think President Trump will probably see the wisdom of that and inherit that and say, yeah, look, we're not going to build Chinese EVs in America. We're gonna build other countries EVs.

And ideally, what the Trump, new Trump team really needs to do, quickly, what the real competition about is, look, China's not going to take American cars. They don't take American cars, now, practically, we are not going to take Chinese cars. And so the competition is going to be over the software and supply chains and connectivity, all the Internet connectivity of cars.

And it's going to be a battle for whose standard will be dominant in the rest of the world. And we've got to make sure that we are working with the Europeans and the Japanese and the Koreans and others to have a common standard, so that our collective EV standards are the ones that dominate in the world.

And China is sort of the odd man out with its own sort of exotic infrastructure and standards.

>> Elizabeth Economy: All right, let me push you a little bit more on this point, because that then presumes that we are continuing to work with our European and Asian allies in forums like the US EU Trade and Technology Council or the Indo Pacific Economic Forum.

Or a number of the inner sort of international and regionally based institutions that the Biden administration set up to talk about precisely these issues. President Trump was not known, for his collaborative speech spirit, particularly with our European allies. Do you see that changing in a second term?

>> Matt Pottinger: Well, look, the Biden administration put in a very good effort in trying to pull the Europeans on side, if you will, with, with limited success.

Because I think the problem is not with the United States, it's actually with Europe. Europe needs to make a decision. Does it want to be sort of, an appendage of China's manufacturing tsunami, you know, basically a market to absorb Chinese overcapacity and which will destroy even more manufacturing in Europe, or does Europe want to band together with fellow democracies and rule of law societies?

I think Europe is the one that needs to prove itself now more than the United States. Because I know how much effort the Biden team put into this, and I haven't seen as much progress as I'd like to. I don't blame the Biden team for that. I blame Europe for being Myopic.

By the way, the Japanese are ready to play ball on this point. And actually, President Trump, during his administration, we made a lot of progress on sort of laying the architecture for, data sharing standards that would protect privacy, protect intellectual property, but allow shared pools of data between the United States and Japan.

That's the kind of thing that Europe should try to plug into. There's already some work that's been done there during the first Trump term and also during Biden's term, but balls in Europe's court, not President Trump's.

>> Elizabeth Economy: So then let me just take a quick step back from policy and ask you about policymaking, because I think for many people, the National Security Council, where you both served, is a black box.

Hard to have a real sense for what happens when you walk through the very grand doors of the Executive Office Building, which is, right next to the West Wing of the White House. Can you just offer us a few insights into what it was like to work there?

What your daily, sort of what you did on a daily basis on an average day.

>> Evan Medeiros: My guess is that Matt's days were probably very different than my days, just to guess that the Obama administration was different than the Trump administration. So, Matt, I'll let you go first.

>> Matt Pottinger: Look, the National Security Council staff, its superpower, is that it is the only arm of the United States executive branch that has the authority to convene the rest of our government, the rest of the executive branch. The State Department sometimes tries to lead and tell the, build strategies and tell the.

Sort of whack them into place, right, Matt? Yeah, yeah, yeah, exactly. So that, that's really it. The other super power.

>> Evan Medeiros: Or the Commerce Department, I've heard that they've gotten very confident in their new capabilities.

>> Matt Pottinger: So, yeah, we'll talk more about commerce. But, but look, it is the President's staff, because, the other departments and agencies have their own sort of parochial interests.

And, even a loyal, highly competent Cabinet secretary often gets pulled into many of the sort of parochial interests of the bureaucracy that he or she leads. And so the NSC is the one thing it works for the president to try to convene and the rest of the government to come up with good options for the president and to give the President a sense of, give him peripheral vision so that he knows what the unintended consequences, the pros and cons of any policy option would be.

And, the other superpowers have proximity to the president himself because they work, you know, down the hall and in the National Security Advisor suite or right across the street in the Old Executive Office Building where most of the NSC staff reside. So look, I think the first Trump administration had four National Security Advisors.

That was, that was, quite turbulent in, in the sense of that. It was a regular turnover, but as if you look at, the sig, this, how significantly policies changed in so many areas. Middle east, on China. I think that's a credit to the National Security Advisors who did serve President Trump and his staffs.

The staff, there was staff turnover, but there were a lot of people who stayed there for all or most of the four years and I think served the President very well. There were strategies that were handed off to President Biden that were very complete. They were well integrated.

They had campaign plans for how to implement, and that gave President Biden's team the option of either tearing them up or continuing those policies till they refine them or replace them. And that's actually what happened on the Indo Pacific strategy. I thought there was a lot of continuity.

President Biden, his team eventually updated their Indo-Pacific strategy, but there was a lot of continuity between the two administrations.

>> Elizabeth Economy: And hopefully we'll see the same going from Biden to Trump. Evan, what about on a daily basis though? Can you be a little bit more granular about what you actually did?

>> Evan Medeiros: Yeah, so the first thing I would do, I'd usually get in at about 7:30 in the morning, and that was my favorite part of the day because it was usually pretty quiet and you would read intel. You had a briefer from the CIA that would come and give you a package of intel and as a scholar and somebody that likes to read and learn, it was absolutely fantastic.

Because you have access to this extraordinary collection of information to understand what's going on in the Indo Pacific, what's going on in China. And then usually much of the day was a steady stream of internal meetings Matt's precisely, right? The two superpowers of the NSC is policy coordination and advising the President and the Vice president.

So you spend a lot of time in meetings as senior director chairing those meetings, trying to get the interagency to come up with policy recommendations on hard problem how to respond to Chinese economic coercion, how to improve relations between Japan and Korea. And the way the process worked is you would sort of decide at evan Medeiros, Matt Pottinger level, then you would move it up to the deputy national Security advisor.

And then of course, Matt became the deputy and then to the national Security advisor. So it was a very orderly process. What I would say is, in the Obama administration, there was a heavy emphasis on process. So it felt like we were constantly in meetings and constantly writing papers for those meetings.

So I think that's definitely something that could have been improved on. It was a very process intensive nsc, which meant that it just took time to get decisions. Now, of course, the fun parts of the day were when Obama was meeting a leader. I can remember after I became senior director in the summer of 2013, the first leader level meeting I had was with the then president of Vietnam, President Sang.

And it was a big deal because Obama and Sang were signing the US Vietnam Comprehensive Partnership, which was the first time we had done that. And it was a big deal for the Vietnamese. The Vietnamese Politburo had met something like four or five times to make sure that they were ready to do that.

And those are sort of, those are the fun days at the nsc because you go down to the Oval Office, you sit on the big fluffy couches, pro tip, don't sit back because you'll sort of get lost in the seat. And you sit there and you sort of brief Obama.

Now, briefing Obama was always hard because you had given him a paper beforehand. He had basically, an eidetic memory, so he would just remember everything that you wrote. And so briefing him was hard because you had to figure out what your value added was because he would always come in and say, guys, thanks for the paper.

Read the paper really good. Sometimes he had questions, but you would sort of, you know, set him up for success in the meeting. And then the foreign leader would come in the Oval Office, you know, you'd sort of have the meeting. There was always something a little bit crazy that happened that nobody expected.

Then the press would come in. So that that was sort of the fun days at the NSC. But you basically spend your time doing a lot of meetings and then you get to the end of the day, which is like meetings you usually didn't meet. DO meetings past 6:00 and then you just have this inbox of email, hundreds and hundreds of emails, including papers that you have to review, blah, blah, blah.

And you know, you basically work until you fall asleep at your desk, go home and begin again.

>> Elizabeth Economy: That's great. Thanks, Evan. Matt, any favorite memory of yours from NSC days?

>> Matt Pottinger: Yeah, look, I mean it was, I think I- Do have a story about a tweet or something that just like took everything through, right?

Well, I, I had a policy of having my staff always print out, you know, to someone had to be monitoring the President's Twitter account and printing out any tweets that were that touched on national security or foreign policy. Because there were times when even the national security adviser would be in a meeting with foreign counterparts.

And they would have just come in off the street and the first question they'd have was about a tweet that was still scalding hot, had just left the thumbs of Dan Scavino, who was the President's tweeter, something that the President had just dictated. And then they would ask us, we'd be caught flat footed.

So there are people often running across the street carrying printouts of tweets to get to me or, or Robert O'Brien or others as we're, as we're going into meetings. But yeah, look, I think the meetings with foreign leaders are, I think the most memorable. The NSE is amazing cuz it's this mix of politically appointed staff and also people who are on loan from other departments and agencies.

And at its best, the NSC is a great sort of gathering of talent. And we ended up shrinking the NSC during the time that I was deputy National Security Advisor working for Robert O'Brien, who was the National Security Advisor. We shrank the number of policy staff down to about, I think it was around 107 or 108 people, which was less than half of what it had been four or five years before that.

And it turned out to work better in our view. We think that what, what ended up happening was the people who remained had more authority. It meant that there was less stepping on people's toes where there was crossover jurisdiction and there were fewer meetings. But it also meant that when something got elevated to the Deputies Committee or to the national security advisor and the president.

It had already been worked very thoroughly at the senior director level so that it would work more smoothly. And usually, usually when there was a deputies meeting, we usually didn't have to return to that topic for a pretty long time because we would have very clear outcomes, a summary of conclusions that explained what everyone was expected to do.

So it couldn't be relitigated. We were good at tamping down efforts to relitigate things, at least by the final 15, 16 months of the administration.

>> Elizabeth Economy: That's interesting, maybe more work up front, so you had less work on the back end. So let me just ask if you were sitting in Zhongnanhai, China's leadership compound, instead of the White House, how are you looking at the US Election right now?

What do you think China's leader Xi Jinping sees as the new opportunities and challenges of a second Trump administration? Do you expect that he's gonna alter China's policy toward the US in any meaningful way? Evan, why don't we start with you?

>> Evan Medeiros: Yeah, so I think Beijing looks at the outcome of the election, and I think they see two very different possibilities.

They look at Trump and they say, okay, do we try to deal with and encourage Trump the dealmaker? Right, or are we gonna be dealing with Trump, the strategic competitor? And I think that they want the former. They're concerned about the latter, right? They understand that Trump, in the first Trump term, the first couple of years, were very focused on, you know, tariffs in the trade one, the phase one trade deal.

The last year, he sort of, Trump obviously was frustrated with the Chinese for a variety of reasons, especially Covid. And let the strategic competitors, you know, move forward with a bunch of things. And so the question is, will the Chinese be able to lean into and extract maximum concession from Trump, the dealmaker?

Because that would require a sort of degree of restraint and maneuvering on the part of Beijing that I haven't really seen to date. It requires them to be pretty deft, right? And it probably requires them to absorb some Some potshots and stray voltage from the Trump administration early on.

What I do worry about is they lean into Trump the dealmaker, and all sorts of stuff comes on the table, including Taiwan, right? I worry that Trump looks at Taiwan and he just sees it, he doesn't value it, its status, what it represents. It's important to America's broader strategy, and he just sees it as a bargaining chip.

We've all heard the metaphor where he says Taiwan's a Sharpie, China's the Resolute desk. And so I worry that Beijing really leans into Trump the dealmaker, but Trump starts to do deals that don't have support in the broader strategic community in the United States. But I think it's gonna be tough for Beijing to get there because as Matt rightly pointed out, Trump looks at tariffs as a source of leverage.

And the question is are the Chinese gonna be willing to absorb, accept all these tariffs and not get locked into a tit-for-tat action reaction cycle that just deteriorates? And then you have the whole issue of Trump's advisors, right? There's Trump's view and his advisor's view. And the folks around Trump, I think it's fair to say, are a combination of economic nationalists and national security hawks.

And they're gonna be whispering to Trump, and they're gonna be, I think, leaning into his instincts to go hard on strategic competition. I mean, these are people like Robert O'Brien, you know, his article in Foreign Affairs, Matt's article with Mike Gallinger, I think accurately captures that perception. So the question is who sees Trump most, who talks to him most about China, who's in the room last with him on China?

And final point is, so you have that, but then you've got Elon Musk and Steve Schwarzman, people that are very close to Beijing who probably, are going to encourage him to reduce the intensity of strategic competition, to find trade space, maybe some cooperation. So I don't know how it all nets out, but what I think is that the range of possible outcomes is, is wider than ever before in the US China relationship.

>> Elizabeth Economy: Really interesting, so, Matt, what do you think? Do you agree largely with Evan's assessment, or do you see Beijing as having different perspective?

>> Matt Pottinger: Well, look, no, I think, I think Evan covers a lot of it. Xi Jinping Talks a lot in his internal speeches about this dialectic of cooperation and struggle, right?

It sounds like an inherent contradiction. But to a Leninist Marxist, right? Yeah, a Marxist-Leninist like Xi Jinping, it makes perfect sense. The idea is that you oscillate sometimes you're pursuing both simultaneously, but you oscillate between offering cooperation and that often fools a lot of Americans and others into thinking, there must have, there must be some, some fundamental shift underway.

And what it's really about is about acquiring leverage by really luring in interests from the United States, including business interests, in order to then acquire greater leverage and influence. And then struggle is expending that leverage in ways that are very painful for China's adversaries. And so I think Evan's right that Beijing is gonna be trying to leverage the US Business community as their main ally or portions of the business community to do their fighting for them.

To try to constrain or restrain President Trump by having them plead for less pressure on China. Because pressure on China means pressure on those businessmen who have entangled themselves, unfortunately, over the years. But look, I do think that the thing that has changed most radically over the last four years is, is that you now have a proper axis in place.

This predates the Biden administration in the sense that Xi Jinping has always wanted, has been working since his first trip abroad to build closer ties with Vladimir Putin. But now you've got the blossoming of a pretty deadly flower. This is China, at the core of it is the main economic and technology provider as well as the main financial provider.

And then you've got these tentacles in the form of Russia, certainly Iran, North Korea. I'd throw in Venezuela for good measure. And they are, they are behaving like an axis. They're increasingly well coordinated. And so the first job that President Trump's gonna have is going to be to restore deterrence.

Because right now, the fact that we've got reports in the news this week that Russia was working to detonate bombs in US Bound cargo planes. We've got stories from the last few days that Russia has been providing the satellite targeting data to the Houthi rebels to target US Ships in the Red Sea and other international shipping.

Beijing, as President Biden's administration has said, which NATO has said is the decisive enabler of the war. So, and you've got a division of troops from North Korea going to fight in Europe, the largest war in Europe since 1945. We're in a really dangerous world now. And so I think his, in addition to the trade aspects that we've been talking about and the technology competition, the other key element of this is just gonna be to restore deterrence.

>> Elizabeth Economy: So I'm guessing from the very dark picture that you just painted, and Evan's also pretty bleak picture, that there's not that much room for renewed areas of cooperation between the United States and China. Or am I reading you both wrong? I mean, the Biden administration established a number of areas or channels of communication on issues like climate change and trade and investment.

Thinking about the global, the macroeconomic picture, controlling fentanyl. So should these areas continue in a Trump, too, or are there new areas we should be thinking about? Or is there not really a point and this is just a waste of time and energy for the US?

>> Matt Pottinger: Look, I'm in favor of dealing with the fentanyl crisis and China helping us with that, but China is the source of that problem.

China is the main source of greenhouse gases that are heating the atmosphere. China is fueling war in the Middle east and in Europe. So, I mean, at a certain point, the idea that at a certain point, you have to shift to actually imposing costs before you're gonna get to a production Productive sort of conversation.

I think we've let things go way, way, way too far, and we've kidded ourselves for too long that Beijing is interested in the common good of humanity. Beijing's interested in seizing power and expanding its power worldwide, and it's now using war and proxy warfare to do that, as well as continuing to send chemical precursors.

And by the way, Chinese organized crime is now overwhelmingly the number one money launderer for all drug trade, not just the illicit fentanyl that is killing 100,000 Americans a year roughly. But also for the cocaine, the amphetamine, methamphetamines, all of the illicit drug trade, more than 90%, according to the U.S. government, DEA agents and former DEA agents.

That is now all in the hands of Chinese organized crime. Beijing has the authority and certainly the wherewithal and knowledge to act if it wanted to there. It clearly doesn't want to act in those areas. So we have to give them a reason to want to act, and that is to impose really stiff costs for Beijing doing so much damage to our people.

>> Elizabeth Economy: Okay, Evan, any thoughts, cooperation, expand, shrink?

>> Evan Medeiros: So I'm not as dark as Game of Thrones about the world as Matt is, but he made a very, very important point, which is the Chinese consistently seek cooperation. Whether it's on climate change, global pandemics, whatever it is, as a concession to the United States as opposed to supporting a global public good.

And I think until they see it not as a gift to us, but is contributing to a world in which they have substantial and growing interests, we're very likely to see any kind of consistent cooperation on the part of Beijing. I do think China's views have evolved over time from Jiang Zemin to Hu Jintao.

There were lots of internal debates, you and I, Liz, have written about this in various books and articles. As Chinese scholars and policymakers tried to figure out what it means for China to have a great power mentality, for example. So they sort of they were debating and playing around with this idea of contributing to global public goods.

I think what shifted was the arrival of Xi Jinping. I think he sort of put a definitive end to that and the emergence of the era of strategic competition where the Chinese are constantly searching for leverage. So when we go to them and say, hey, let's cooperate on North Korea, maybe North Korean troops shouldn't be fighting for the Russians in Ukraine.

They don't say, you're right, this is a very dangerous destabilizing development that could trigger war on the Korean peninsula. They look at that and they say, aha, we have a source of leverage from the Americans. How can we use it? And that very narrow definition of their self-interest, I think is one of the long term structural features of the US/China relationship.

As we all know from the history of the Cold War, the Cold War had its different phases. And it was only after some very difficult experiences in the 50s and the early 60s that the US and the Soviets, both collectively embraced the concept of strategic restraint as serving their interests, right?

And that, that's what put the US and the Soviets on the pathway to, to arms control. We haven't reached that point in the US/China relationship, and we may never reach it. Let's see how the relationship evolves.

>> Elizabeth Economy: Okay, that was maybe slightly more optimistic than what Matt had to say, but not.

>> Evan Medeiros: Yeah, that's sort of less Game of Thrones and a little bit more Sopranos. Does that work for you, Liz?

>> Elizabeth Economy: Okay, I think that's reasonable. All right, I think we're coming to the end of our time, but let me just do a quick lightning round of questions.

Just, you know, less than 10 word answers from each of you. First question, and Evan, we'll start with you. What is your must read book or article on China?

>> Evan Medeiros: So that's a freebie, Liz. It's my new book, Cold the New Era of US China Strategic Competition. I say that because it's the most systematic approach that includes multiple scholars, including a great chapter by you, Liz, to understand how did we get here?

How did we get to this era of strategic competition? What does it mean and where might we go?

>> Elizabeth Economy: Okay, Matt, you wanna give boiling moat?

>> Matt Pottinger: I see your book and raise you wanna, except it's out of reach, I'd have to run across the room and I might not be wearing pants.

I actually am wearing pants. But the John Pomfret's book, which is the Beautiful Country in the Middle Kingdom is just a great history of US/China relations going all the way back to 1776. And he published it about a decade ago, but it still holds up wonderfully.

>> Elizabeth Economy: Right, Evan, what's the job you would most wanna have in a new administration?

>> Evan Medeiros: Well, given the fact that Trump just got elected, this seems like a very distant question, but sure.

>> Elizabeth Economy: Four years from now, Evan, four years from now.

>> Evan Medeiros: Yeah, the dream job for me would be to be chairman of the National Intelligence Council. I think we need somebody who works on Asia sort of leading the analytic community in the United States about global politics.

>> Elizabeth Economy: Okay, Matt?

>> Matt Pottinger: I would go to the Commerce Department, to the Bureau of Industry and Security, and once and for all, close all of the loopholes. This the sieve of leaky, leaky, leaky licenses that get granted and waivers that get granted there so that we really could put China in a much tougher position.

Squeeze the chokehold that prevents China from being, you know, industry leader in some of the most important technologies, including semiconductor manufacturing, possibly the toughest job in any administration.

>> Elizabeth Economy: Okay, Evan, what one thing do you wish the US had done differently with regard to China when you were in office?

>> Evan Medeiros: Well, look, Hindsight is always 2020, Liz, but I wish that we had recognized China's island reclamation plan quicker. I wish that we had responded quicker and more forcefully.

>> Elizabeth Economy: Okay, Matt, look, I think there that I would like to see the US and this is really a public private partnership, find ways to help Chinese people communicate with the outside world and with one another more securely.

>> Matt Pottinger: I think I just don't think we're doing enough there. We're playing defense because now Beijing controls our Internet platforms here in the United States. We should do a jiu jitsu move and flip that on its head.

>> Elizabeth Economy: Okay, one China issue that we don't know enough about.

>> Evan Medeiros: How the Politburo Standing Committee works. I think we really don't understand how elite politics at the top of the Chinese system operate.

>> Elizabeth Economy: Okay, Matt.

>> Matt Pottinger: Yeah, look, China's economy and how weak it is right now and how broadly despised I'm hearing Xi Jinping is even by people within his government.

That doesn't mean that people are going to be able to organize, you know, some kind of a rebellion necessarily. But understanding that really the last pillar of his economy that they're standing on is massive exports. So I think it's shame on us if we collude with that to let Beijing continue exporting its excess capacity to the United States and to Europe.

It's really his entire strategic plan right now, he's weakened every other element of his economy.

>> Elizabeth Economy: Okay, and last one. On a scale of 1 to 10, how likely are we to see a Nixon Mao moment in the US China relationship within the next decade?

>> Evan Medeiros: 0 being low probability, 10 being high probability, Liz.

>> Elizabeth Economy: Yes, yes.

>> Evan Medeiros: Yeah, I would say I'll give it a one.

>> Elizabeth Economy: Okay, Matt?

>> Matt Pottinger: Yeah, I think as long as Xi Jinping is the leader, it's not gonna happen because Xi Jinping had his Nixon MA moment. It was for him to go in early 2013 to Russia and to tell Vladimir Putin, I've got, I've got an idea for you.

Over the next decade, we're gonna sow chaos in the world together. So that was the moment, and we're not gonna break those two lovers from their embrace. We've just got to prepare for what comes after and try to lay a favorable ground for what comes after.

>> Elizabeth Economy: Okay, so a long struggle in front of us with not much hope for a breakthrough in the US China relationship.

On that note, let me thank both of you for taking the time to speak with me, and I really hope that you both find your way back to the White House to help lead us to a better future for US China relations. If you enjoyed this podcast and want to hear more reasoned discourse and debate on China, I encourage you to subscribe to China Considered via The Hoover Institution YouTube channel or podcast platform of your choice.

In the next episode, I'll be speaking with leading economic analyst and Rhodium Group co-founder Dan Rosen. We'll be talking about the current state of the Chinese economy, which came up in our discussion today, whether it's poised for a rebound and what it all means for the United States.

Thank you very much.