Gordon Chang
Appearances
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
I think the Chinese regime is a little unhinged because the rhetoric certainly is not justified by what's occurring today. And I think it reflects a couple of things. I think, first of all, the Chinese are just enraged that President Trump is not deferring to them. For millennia, Chinese diplomacy has been intimidation of others. And Xi Jinping has been particularly good at it.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And probably Trump right now has just said he's had enough. But the other thing is that these tariffs do pose a danger to the Chinese economy. Xi Jinping has turned his back on consumption as the basis of the Chinese economy. That means his only way out is to export. And it's not just Trump's tariffs. When Trump does this, he's giving inspiration to others.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
He's giving them cover to others to do the same thing. So I think that the Chinese are panicking in addition to just being so upset that we're not bowing down to them.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
That's a great question. Because if we go back to 2018, when President Trump imposed his Section 301 tariffs on China, 25% across the board, China absorbed somewhere between 75% to 81% of the cost of those tariffs. And now China has even more incentive to do that.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
The only thing is that China right now might have less flexibility to do that for various reasons, technical ones related to the currency. But the point is a good one. And I think China will absorb a majority of the cost. It's going to hurt them, but I think they're going to do it because they have no choice.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Canada and Mexico present a very different situation than China. And Trump did not back off on the China tariffs. He imposed two rounds of 10% across the board tariffs. He didn't blink. With Canada and Mexico, there are reasons to just deal with them in a different way. They're our neighbors. They're friends. We have an integrated economy with them.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And a lot of people think that Trump is trying to sort of isolate China. Well, to do that, you need to have both Ottawa and Mexico City on board. You need their help. So I think there's a lot going on here that is more complex with regards to the Canadian and Mexican tariffs, which President Trump has delayed.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
There's no indication that the Chinese have improved on fentanyl. You know, it was very interesting today that the Chinese government put out a timeline of all the fentanyl control measures that they've put in place over the years, but they've just gotten worse. Xi Jinping has violated promises to three American presidents now about fentanyl. As President Biden in 2023...
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
President Trump in 2018, and President Obama in 2016. So, you know, when the Chinese say, well, you shouldn't be imposing costs on us. You should just be trying to talk to us with mutual respect. Well, we've tried that now, and it hasn't worked. So President Trump did the only thing that he could do, which was to go after China for killing basically 70,000 Americans a year. Do you anticipate...
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
I think that we're going to see more trade turbulence. And the reason is that it's not just fentanyl. It's also predatory and criminal trade practices, especially the theft of US intellectual property. And I think Trump also knows that he's got the upper hand. Remember, the Chinese economy is less than two-thirds the size of ours.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And especially if you were to look at the Chinese economy and its real estate, because they exaggerate their gross domestic product numbers, it's even smaller than that. But the other thing is that China is the trade surplus country. Last year, its merchandise trade surplus against the U.S. was $295.4 billion. Trade surplus countries have no ammunition in trade wars. Trump knows that.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So, China's only hope is to try to convince parts of the American public to work on Trump. But if that doesn't work, and I don't think it will, Trump is going to hit these guys, as he should, no question about it. All right.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
It's probably the property sector, which is completely overbuilt. In September 2023, a former senior statistics official in a public forum said that China had enough vacant apartments for 1.4 billion people. But he admitted he might be wrong and the number of vacant apartments be sufficient for 3 billion people. There's just no way to get out of that in the near future.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
It's just a question of supply and demand, which, although China exercises a lot of control over the economy, supply and demand still works in China. So, that's probably their weakest link. But there are a lot of other weak links, Mike.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
I think he has less ability to change than he once did. I don't think he's the all-powerful supremo that he was, let's say, four or five years ago. And we're seeing signs in the Chinese political system of real instability. So, for instance, at the top of the Chinese military, the People's Liberation Army propaganda organs are now praising what they call, quote, collective leadership.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
That is a direct challenge to Xi Jinping. And that means that a lot of the turmoil that we see in the upper ranks of the military, this could very well be the foes of Xi Jinping actually purging Xi Jinping's people. We don't know that yet because it's obscure. But the point is, these things don't happen in periods where Xi Jinping would be the supreme leader.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So I'm not sure he has that same sort of strategic autonomy that he did when China was obviously successful and he was getting all the credit for it.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Well, two developments since Marco Rubio went there on his first trip as Secretary of State. First of all, the Panamanian president, Molino, said that he would not renew his Belt and Road memorandum with China, that he might even cancel the existing one. But the news this week is that BlackRock, the American financials company,
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
asset manager, biggest in the world, by the way, is buying and taking over two Chinese port operations in the canal from CK Hutchison, which is the mega port operator around the world in Hong Kong, subject to Chinese rule. Those are the ports at Balboa on the Pacific side of the canal and at Cristobal on the Atlantic side.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And these are the two port operations that have attracted a lot of attention because they could be easily turned into Chinese military bases when Beijing gives the order. So that is stunning news. It means that China is being muscled out of the canal zone, which is great because China still can block the canal, but it's losing its basis to do that.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
There are other Chinese operations in the canal zone. We need to get rid of those as well. But this is a very good sign. And it means that in other countries that are getting sick and tired of China, they'll be inspired to do the same thing. So with a little pressure from President Trump. We can do it.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Yeah, I think it is, actually, in Latin America, for sure. We've had some problems with some of the other Chinese ports, but generally, Beijing has been able to negotiate its way around them, most clearly in Sri Lanka. But yeah, this is really terrific news because this could be the beginning of not just a trend in Latin America, but around the world as well.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Yeah. In the People's Republic, no entity, no person can ignore or disobey an order from the Communist Party. And that's also true of Hong Kong. Hong Kong was supposed to be autonomous, supposed to have one country, two systems for 50 years. But that ended in 2020 with China adopting the national security law for Hong Kong. which meant essentially full Chinese control of Hong Kong.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And so we had to assume from a national security point of view that CK Hutchison would close the port, the canal zone, if given an order to do that. And clearly, the Chinese military and Chinese operatives, Ministry of State Security, were based in the canal zone, probably at those two port operations. So, it was really important to get them back.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And it's important to continue to eject China from the canal zone, because there's still a dozen ways that China can block that canal. Right.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Yes. And President Trump has opened up an office of shipbuilding in the White House itself, which shows you that it is a priority. American shipbuilding has withered away. And there are a couple of things that President Trump has done. So for instance, go back a week, The U.S.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
trade representative announced that it was imposing million-dollar-plus fees on Chinese-built ships and Chinese-owned ships that entered U.S. ports. That gives all sorts of people incentives to build ships elsewhere. And that's a good thing to get it out of the People's Republic of China. But it also incentives for American shipbuilding.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And we need to do this, not just for the Navy, which is woefully doesn't have the shipbuilding capacity anymore, but also just regular commercial ships, which are really important. It's the lifeblood of trade. So this is, again, great news.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
By far, by far. They're well ahead of South Korea, which I think is in second place. But China makes something, and correct me if I'm wrong, something like over 50% of the world's ships.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
That I don't know, Mike. But if you said 15th, I would say that's really high. Would have been, my guess, even lower than that. But one other thing. South Korea, which is a US treaty ally, is going through a political crisis. And it's not inconceivable that within three months, they could have basically a communist as president. This is really serious stuff.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So that means number one and number two, shipbuilder would basically be in Beijing's orbit.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
It's really high. About a month or two ago, it would have been close to 90%. Fortunately, things are moving in a much better direction. What happened is President Yun Suk-yeol, a conservative-leaning figure, declared martial law on December 3. He was impeached by the National Assembly on, I think, the 14th.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
The constitutional court decides this month and maybe in the next week whether to remove him or not. If he's removed, there's 60 days for another election. Now, Yoon was really unpopular even before martial law. He had an approval rating below 20%. Now, because the leftists have overreached, his approval rating is at least in the 40s and in some polls over 50%.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So even if he is removed, there's a real possibility that another conservative could be elected. But we know the leftists control the electoral, the National Election Commission. They've been rigging elections since at least 2020, which means no matter what the South Korean people, how they vote, is probably going to get a leftist as a president.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And the leftist candidate is pro-China, pro-North Korea. He might even be a communist himself. If he's not, he's very close to it. This is really, really very dangerous for us.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And often corrected by Mike Baker. So, yeah. Thanks very much.