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April 17, 2025 - Epoch Times
29:52
Gordon Chang: “This is an existential struggle… and we better win it.”
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Jamie Dimon said this, why don't you just pick up the phone?
Well, the reason is, we've had that attitude for five decades.
And look where it's gotten us.
You know, if the Chinese want to do something about our tariffs, it's up to them to pick up the phone.
As the U.S.-China trade war continues to escalate, I'm sitting down with China analyst Gordon Chang.
What is the current state of play when it comes to Trump's tariff strategy?
The only way China wins this trade war is if it gets Trump to preemptively surrender.
This is an existential struggle.
It is more than just a trade war, more than just a tariff war, and we better win it.
And how is Xi Jinping's leadership being challenged inside China?
General He, I think, was sacked not by Xi Jinping.
But by the adversaries of Xi Jinping and the Chinese military.
We have seen all of these unexplained and unusual disappearances of military officers.
I think this is the most dangerous moment in history.
This is American Thought Leaders, and I'm Jan Jekielek.
Gordon Chang, author of The Coming Collapse of China.
So good to have you back on American Thought Leaders.
Thank you, Jan.
So, Gordon.
245% is the new tariff number we're hearing about.
What's the meaning of this?
That tariff rate is for electric vehicles.
But electric vehicles are not going to get into the U.S. regardless of tariff rate because the Biden administration actually essentially prohibited them on American roads because of their capability of spying on America.
So whatever the tariff rate is, 245%, 2,450%.
They're just not getting in.
And so give me a picture as of today.
We're following up on our short conversation last week.
What's the state of play with these tariffs and what's your best sense of what they're really all about?
Well, President Trump is negotiating with those 130 or so countries that have contacted the White House since his April 2nd Liberation Day announcement.
And essentially what Trump is going to do is redirect trade flows around the world.
Everybody needs the U.S. consumer market.
It comprises almost 30 percent of global consumer spending.
And so he's going to negotiate with Japan and with other countries.
And this is going to really set a template.
Once he gets those first deals in place, he probably will extend them to others.
China, which is refusing to talk to the United States now, is probably going to be left out in the cold, and eventually it will have to come to the table.
But regardless of whether China talks to us or not, Trump is resetting everything around the world right now with these tariffs.
Well, that's actually very interesting because I've seen analyses on both ends of this.
Some people are telling me who I find quite credible that they will come to the table and it'll maybe take a month or something like that.
And there's other people who believe, for pretty credible reasons, that they're just not going to come to the table.
Any thoughts here?
Countries are not required to trade with us.
But if they don't trade with us, they're not getting access to our consumer market.
So I think countries will understand that they have to do that.
But, you know, we'll see.
There's a 90-day pause, and we'll see what happens at the end of that.
And we'll understand one way or the other.
But I think that economic reality is countries need the United States more than we need them.
So this is going to be, I think, good for us and not good for China.
Well, and so specifically on China, that's actually what I was, I probably didn't say the word China.
Specifically, I've heard that they may, of course, there's plenty of countries.
I mean, I think there's 80 plus right now that I'm aware of that have decided to come to the table.
But China itself, as you mentioned, has not been very forthcoming.
And the question is, will they ever?
I suppose at some point they will.
You know, Xi Jinping is perfectly capable of taking China off the cliff.
And so, yeah, you know, he says he won't be bullied.
He says he's not going to talk to us until we come begging.
So, I don't know.
But this is not going to be a good story for China.
Because remember, our economy is much bigger than theirs.
Even with their inflated gross domestic product reports.
Their economy is less than two-thirds the size of ours.
Last year, China ran an enormous merchandise trade surplus against us, $295.4 billion, which was 5.8% bigger than the merchandise trade surplus in 2023.
I mean, they've got everything to lose.
Now, they can retaliate, as they've done with the rare-earth export ban.
But, you know, they tried that against Japan in 2010.
It didn't work.
China collapsed in a couple months.
You know, they can tell Boeing we're not accepting deliveries of planes.
But if President Trump says if he prohibits Boeing from selling planes and replacement parts, there are going to be a lot of planes in China not flying.
So, you know, we have the power.
The only way China wins this trade war is if it gets Trump to preemptively surrender.
Now, Trump knows he holds the high cards.
But the question is, and a lot of people say, well, we're a democracy, we've got to give up.
I don't think so, because Trump actually believes in these tariffs.
He knows how important it is.
But that's China's only route out of this.
So one of the biggest, I guess, criticisms that I hear often is that these tariffs, the cost of the increased goods, good cost, is going to be transferred to the consumer.
And how do you view that?
Well, we actually have an experiment, and that was 2018 when Trump imposed 25% tariffs on China.
We know that China absorbed at least 75% to 81% of the cost of those tariffs.
The American consumer didn't feel it.
And by the way, we tend to think of tariffs as a bilateral matter.
When we impose tariffs on China, we think in binary terms, U.S. and China.
But we've got to remember that when we impose tariffs on China, Companies move supply chains and production out of China to areas which are lower-tariffed.
So, yeah, we didn't feel it in 2018.
Now is a different situation, but I think that if Trump is able to do what I think he can do, which is stitch up these trade deals with other countries, we're going to see a redirection of trade, and the American consumer is just not going to feel it.
But there's a more important point.
For decades, American presidents have pursued deeply injurious trade policies with China.
And we're going to have to pay some cost.
It's just, I think that's inevitable.
I don't think the cost is going to be as great as all the smart people in New York and Washington think.
But even if it is, this is a cost we have to pay.
Because if we don't pay this cost, we become a vassal state of China.
And so I just don't want to see that.
How exactly do we become a vassal state of China in the scenario you're describing?
Well, we basically have no industry left.
We sell China raw materials, like we sell them soybeans and wheat, and we buy their manufactured products.
And that is not a good scenario, which we're almost at that point anyway.
But we just have no industry left.
The United States, completely devastated like we see in the Rust Belt in the South, where towns and factories left, people have no hope, people are dying of fentanyl.
It just becomes a wasteland.
That's what we can become.
And President Trump understands that.
He has a heart.
He sees what's happened to those communities.
He's not going to leave the American worker behind like Wall Street wants us to.
So, yeah.
This is something we absolutely have to do.
We owe this to our fellow Americans.
And so you mentioned these injurious policies.
And of course, one of those very injurious policies was the hollowing out of the working class, of the shifting of manufacturing, of what's unfortunately called the rust, creation of what's called the rust belt.
Can you give me a broader picture of how these injurious policies played out, what they were and what the impact was, just broadly speaking?
Well, in 2001, China ceded to the World Trade Organization after it came to a 1999 agreement with the U.S. And China took all the benefits of being a WTO member, and it did not adhere to many of its promises.
And to our shame, we had a series of presidents who actually did not enforce the promises that China had made to us.
So factories just did what was, you know, the logical thing.
They said, well, look, we can move to China.
You know, and so that's exactly what they did.
And we allowed American business to sort of be intimidated by China.
We didn't enforce our WTO rights.
And that's how we got into this situation.
And every American president from George W. Bush on until Biden were guilty of this, including, by the way, a guy named Donald John Trump, who was the 45th president of the United States before Biden.
But Trump 47 is very different from Trump 45. Trump 45 signaled that he was going to impose tariffs.
He put him on at 25 percent, which was inadequate.
President number 47, he said, I'm not doing that again.
I'm not making the same mistakes that I made in my first term.
And great for him, because he's defending the American worker like no other president has done in the WTO era.
So the American people owe him a debt of gratitude.
We may not like the way he's doing things.
We may not like him.
You know, a lot of people in America don't.
But the point is, this is an existential struggle.
It is more than just a trade war, more than just a tariff war, and we better win it.
And we've only got one president who can defend us right now.
And like him or not, that's Donald John Trump.
Gordon, when I first saw those tariff tables, I was at the White House on Liberation Day when the announcement was made.
Something struck me immediately, and it was that these countries that are the prime transshipment hubs for the Chinese Communist Party that Started after, actually, 2018 with the Trump 45 regime on China.
Basically, it looked like the countries that have the highest tariffs—I mean, broadly speaking, there were exceptions—were these transshipment hub countries.
And I found myself wondering, is this— Part of the play to actually stop that and make that part of the deal, to cut out all the loopholes that the Chinese Communist Party has placed in order to be able to basically avoid this type of activity from the U.S.,
the change of the status quo with its relationship with the U.S. Well, Commerce Secretary Howard Lutnick has actually reportedly spoken to Vietnam and other countries in Southeast Asia and basically said, cut out this transshipment business.
You know, part of it is, you know, China's companies, they set up factories in Vietnam.
Don't add very much value in Vietnam, and they send it to us as a made-in-Vietnam product.
Well, that's our fault.
We know what's going on.
But there's something else, and that is we know that there's completely fraudulent bills of lading where goods never go to Vietnam, but they are labeled as coming from Vietnam.
And we see this on the trade documentation.
We know that this is going on.
And we haven't done enough about it.
So this is on us, Yan.
And this is something that I think that this administration, unlike previous administration, is actually going to go after the Chinese on this.
China has appointed a new top trade negotiator, seemingly unexpectedly, actually.
I didn't realize that would happen by any stretch of the imagination.
What do you make of that?
They want to talk, I guess.
You know, they say that they're willing to talk to us, but they really want us to call them first.
And I'm just, you know, a lot of people say, Jamie Dimon said this, why don't you just pick up the phone?
Well, the reason is we've had that attitude for five decades, actually more than five decades.
And look where it's gotten us.
So, you know, if the Chinese want to do something about our tariffs, it's up to them to pick up the phone.
You know, I'm just done pleading with China to do the right thing.
This is just not good for us.
It's not good for anybody else either.
And yet we have very smart people in our country suggesting that we continue policies that obviously haven't worked for decades.
Gordon, there's also been some very prominent exemptions that were announced as well on Apple, semiconductors, pharmaceuticals.
Some people have characterized that as being actually the US backing down somehow.
How do you read it?
Well, what's really important is the Chinese view it as us backing down.
And right after the exemptions were announced by the Trump administration, what did China do?
Did it reciprocate?
No, it didn't, Jan.
What it did was it started to impose the embargo on the export of rare earths to the United States.
In other words, they doubled down.
So this was not good implementation.
But apart from what the Chinese think, and I don't think the Chinese are right that this was the Trump administration surrendering.
I don't think the Chinese are right.
But apart from all of that...
Yeah, there should have been a better rollout of the tariffs.
If the Trump administration wanted to have an exemption for electronic products and semiconductors, that should have been part of the original announcement.
That makes much more sense to me, because then people can't say, oh, well, this was a climb down.
So implementation on the part of the Trump administration left a lot to be desired, but especially it left a lot to be desired because we saw the way the Chinese reacted, and that's important.
And you mentioned earlier, as you were talking about countries that are negotiating, I think you singled out Japan.
You said Japan and other countries.
Is there a reason you note Japan in particular?
Well, they're talking with Japan right now.
And Japan's really important because it's a country where the tariffs aren't the trade barrier.
The trade barrier, the non-tariff rules that inhibit trade.
So we have to deal with that.
If we deal with that general issue, that's important.
Also, Japan's an important economy.
It's the third largest in the world.
It's an important American ally, treaty obligation to defend Japan and Japan to defend us.
So yeah, I think Japan is really important in terms of the initial trade agreement.
We get a good deal with Japan.
Then I think that the other countries will fall in line.
That will be the form.
That will be the template.
To go back to something you said right at the beginning, this is kind of a renegotiation of the global trade order, really.
One analyst, Velina Chakarova, she has sort of characterized this as the U.S. basically asking, do you want to be part of us or do you want to be part of what she calls Dragon Bear, which is the Russia-China axis with some others?
You know, she's been talking about Dragon Bear for quite some time, and she's a very perceptive observer of what's going on.
And yeah, it's time for the United States to say enough is enough.
This is a very new world.
The one thing that Trump has recognized is that this world is very different than it was pre-COVID.
We're in a deglobalization phase, or at least we're beginning one.
And the countries that react the fastest to the new world situation, Are going to be the ones that prosper.
And we have a lot of people in this country talking about the way the world once existed, as if it was still in play.
You know, Larry Fink, globalist, certainly has got more reason to be a globalist than others because he's the head of BlackRock, the world's biggest asset manager, $11.6 trillion under asset management.
You know, he said it in March of 2022.
He said the Ukraine invasion has put an end to the globalization that we've experienced for the past three decades.
He came to that stark conclusion because he said globalization had already been weakened by COVID, which had weakened the connections among countries, among companies, and among people.
He's absolutely right.
This is a new world.
Trump recognizes it.
A lot of very intelligent people in our country and elsewhere don't.
And I'm very happy that we got a president who's doing something about it.
We can argue about whether President Trump's doing the right thing or not, but he's doing something which the previous president didn't.
One of the things we've talked about before, Gordon, is the fragility of the Chinese economy.
For example, the housing sector, this old building sector having collapsed and so forth.
Beyond that, there's also all sorts of rumblings of Big unrest among the Chinese Communist Party itself.
Questions about how much power does Xi Jinping have now, given the failure of some of his policies, broadly speaking.
I know you've been following this a bit.
I'm going to have one of our top analysts give us the whole entire picture in an upcoming interview.
But what do you see happening there?
I think Xi Jinping's in trouble.
Just to give you one example.
General He Weidong, the number two or number three uniformed officer in the People's Liberation Army, vice chairman of the Communist Party Central Military Commission, he hasn't been seen in public since March 11. Now,
he was Xi Jinping's hatchet man, but the general narrative is that Xi Jinping got rid of him.
Now, I don't think that that is right.
And there's a little bit of a history, but let me go through it.
Since July 9th of last year, PLA Daily, the main propaganda organ of the Chinese military, has been running these articles praising, quote-unquote, collective leadership.
That's a direct criticism of Xi Jinping.
Now, those articles could not appear unless the senior leadership of the military approved of them.
So, for instance, the number one uniformed officer, Had to be behind that.
This means that General He, I think, was sacked not by Xi Jinping, but by the adversaries of Xi Jinping and the Chinese military.
Makes much more sense to me.
And especially we have seen all of these unexplained and unusual disappearances of military officers, especially since the middle of 2023.
This is turmoil.
If there's turmoil, it is unlikely that Xi Jinping is in full control of the military.
And especially when Xi Jinping's loyalists are being detained, I think that Xi has essentially lost control of the military.
That's not to say he isn't still the most powerful figure in China.
He is.
But there are a number of factors that point, I think, to his problems, not only in the military, but among civilian leaders at the top echelons of the Communist Party as well.
So I don't know how strong Xi Jinping is.
If you let me go on for just a minute more, I know I'm going on, but to set the context, when Xi Jinping became General Party Secretary at the end of 2012, He inherited a consensual political system where no top leader got too much credit or too much blame because every decision of consequence was shared across the Politburo Standing Committee and indeed across the wider Politburo as well.
But Xi Jinping, by grabbing power from everybody else, he also ended up with near total accountability, which means he's got nobody else to blame.
Now, if you're Xi Jinping in 2017 and everything's going China's way, This is great.
You're getting the credit for all of this good stuff.
But if it's 2025, and things are not going China's way, and you're Xi Jinping, you're getting blamed for all of this.
So it seems to me counterintuitive that he is as strong as people says he is.
How should the US be responding to this?
Clearly, this presents I think we have to.
Ronald Reagan, his policy was that we could not exist with the Soviet Union, called it an evil empire, worked to get rid of it.
And that's not Trump.
But we got to remember that the Communist Party believes that it cannot exist with the United States.
And we know this from any number of, from what they actually say.
They declared a quote-unquote people's war in a landmark editorial in May 2019 in People's Daily, the most authoritative publication in China.
People's war in Communist Party lingo means total war.
And we know that they believe that we are an existential threat.
And we're an existential threat, not because of anything that we say or do, Yan, but because of who we are.
An insecure regime in Beijing is worried about the inspirational impact of America's values and form of governance on the Chinese people, so we will never have amicable relations with China as long as the Communist Party rules it.
It's either them or us.
There's only going to be one survivor.
It'll either be the People's Republic of China or the United States of America.
Not both.
I know that's a message that President Trump does not want to hear.
I know it's a message that most every American does not want to hear.
But if we don't start paying attention to what the Chinese are saying and doing, we're going to lose our country.
Remember, we could not have cared less about what Osama bin Laden was saying about us, even after he killed six Americans at the bombing of the World Trade Center in 1993.
We didn't pay attention until one day he killed 2,977 Americans.
And then we said, how did this happen?
Well, it happened because we're Americans and we believe that we have every God-given right not to pay attention to what our enemies say.
So we better listen up.
It's interesting how you said one survivor, United States or the People's Republic of China.
Now, the United States, I think, survives.
But the People's Republic of China, that is the Communist Party's version of China, not China proper.
At least that's my take on what you said.
Yeah, I said the People's Republic of China, which is the Communist Party.
I didn't say China.
I said the People's Republic of China.
But we've got to pay attention to what our enemies say, because we're going to lose a lot of Americans.
And I'm not entirely clear that if we don't pay attention that we're going to win nonetheless.
Yes, we're the far stronger society, but China is the much more malicious political system and it's willing to do whatever it wants and whatever power it has.
So we have an existential crisis.
And so it's kind of bizarre to be watching Europe If Europe was resolute,
there would not have been World War I. There certainly wouldn't have been World War II.
What can I say?
Europeans are Europeans.
Feeble. I don't know.
I don't want to get angry again, so I'll just leave it at that.
Do you think President Trump will be able to bring Europe in?
Because that seems to be part of the strategy indeed, right?
Yeah, but remember, Vladimir Putin invaded Crimea.
Europe didn't think anything about it.
Vladimir Putin invaded the rest of Ukraine in 2022.
Europe still didn't do very much about it.
It only until Trump's threatened to reduce or even withdraw from NATO that the Europeans started thinking about increasing defense spending.
So, I mean, these are much of Europe, Western Europe, they're feeble societies.
They just...
They don't know how to defend themselves.
And it's really going to take, I think, a lot of American persuading and threats and coercion.
And maybe that might not even work.
You know, we should try, because we do need a stable Europe.
But, by God, this is getting to be very, very difficult and may not be worth the cost at some point.
Gordon, this has been a fascinating conversational.
Final thought as we finish now?
I think this is the most dangerous moment in history.
You know, people will say, oh, the Cuban Missile Crisis 62 or the Checkpoint Charlie crisis of the preceding year in Berlin were more dangerous.
And they certainly look more dangerous, Jan.
But we know from the archives that neither Kennedy nor Khrushchev were willing to use their most destructive weapons.
I don't think we can say that about Vladimir Putin or Xi Jinping.
And so I really worry about this at a point where...
China is mobilizing for war.
It's not mobilizing just its military.
It's also a general societal mobilization, calling up reservists, taking over civilian factories to make war material, standing up militia units and state enterprises.
We've seen these war signals, and we're not responding with the required sense of urgency.
So I worry about this moment.
The way I'd put it is I hope the Almighty protects us.
Now, I know that you don't share the same religion I have, but I'm sure that you feel that whoever you pray to is going to protect you and all of us as well.
Well, I mean, 100%.
Let's say someone watching right now is thinking to themselves, wow, Gordon, I agree with you.
What does that person do now?
Prepare for the worst.
You know, China's infiltrated an unknown number of soldiers and operatives onto our soil.
And, you know, there's an increased rate of incursions and attempted incursions into our military bases, these illicit drone surveillance, that illegal drug lab, biological weapons facility in Reedley,
California. Where they had at least 20 pathogens and almost 1,000 mice had been genetically engineered to spread disease.
We're going to get attacked.
If there's a war in East Asia, and I think it's increasingly probable, it's going to be fought on American soil.
This is going to be the first time since the War of 1812 that we Americans will have had a sustained battle with a foreign enemy on American soil.
And we are so unprepared.
So basically, you're saying make yourself prepared.
But how does the typical person do that?
Stock up.
You have to assume that you're not going to get water or food for maybe six months.
You've got to be able to defend yourself.
You've got to be able to sustain life without anybody's assistance for a very long time.
Well, Gordon, these are heavy words you're leaving us with.
It's such a pleasure to have had you on.
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