The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Sat, 10 May 2025
In this episode of The President's Daily Brief: The U.S. and China are set for high-stakes trade negotiations this weekend—but tensions are running high. Author Gordon Chang joins us to explain what’s really at stake. In South Asia, India and Pakistan are once again exchanging fire across the border, just weeks after a deadly terror attack in Kashmir. Are we witnessing the start of a larger regional conflict? Jeff Smith from The Heritage Foundation helps us break it down. To listen to the show ad-free, become a premium member of The President’s Daily Brief by visiting PDBPremium.com. Please remember to subscribe if you enjoyed this episode of The President's Daily Brief. YouTube: youtube.com/@presidentsdailybrief Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Who is Gordon Chang and what is his expertise on US-China relations?
Later in the show, India and Pakistan trade blows, just weeks after the Kashmir terror attack. Is this tit for tat just the beginning? Well, Jeff Smith, Director of the Asian Studies Center at the Heritage Foundation, he'll stop by for more on that. But first, the Situation Report Spotlight. Treasury Secretary Scott Besson heads to Switzerland this weekend. Oh, that sounds posh. Leading a U.S.
delegation for high-stakes trade talks with China. It's the first serious attempt to diffuse the economic standoff sparked by President Trump's tariff blitz. The White House says tariffs could come down if talks go well. But, as you could imagine, that's a big if.
While both sides have made quiet concessions in recent weeks, including China easing some retaliatory tariffs, well, there's still deep mistrust on both ends. So, should we expect progress or just political theater? I'm going to vote for political theater. Heute mit mir ist Gordon Chang, Autor von Plan Red, Chinas Projekt, um Amerika zu zerstören. Du kannst ihn auf X folgen, Gordon G. Chang.
Chapter 2: What are the stakes of the upcoming US-China trade negotiations in Switzerland?
Und ich suggeriere, dass du das tust. Ich suggeriere nicht nur, ich versuche tatsächlich, dass du das tust. Gordon, danke sehr, dass du zurückgekommen bist auf den Situation Report. Danke, Mike. Also, wir haben dieses Meeting in Schweizerland. If you could talk a little bit about who will be involved and, and I know this is speculation, but what you anticipate to come out of this weekend meetings.
Treasury Secretary Scott Besant and US Trade Representative Jameson Greer will be meeting one or more vice premiers from China. You know, the Senate actually started saying that this meeting would be talking about talking. Trump a few hours ago said, well, you know, we need something to come out of this meeting.
And of course he tweeted or he put on Truth Social that 80% tariffs seemed about right. That would be down from a general rate of 145. But on some Chinese products, the rate is actually 245 because of the existing tariffs. I don't know where this is going to go. The Chinese are hanging very tough.
We heard a statement from some Chinese premier or something in Russia now for the May 9th Victory Day celebrations with a very tough line on the U.S., So, we'll find out when we find out. And I know that's an unsatisfactory answer, but when we start thinking about the normal trajectory of US-China trade talks, they take forever.
And these will probably take forever unless President Trump makes concessions. So I hope that he doesn't make concessions for the sake of getting a deal. We have had this dynamic too many times in the past. It never, never works out for us. So I hope we don't go into it again.
When you say they're making hardline or one of the leadership that's currently in Moscow was making hardline statements, can you elaborate on that?
They were again saying what the United States was wrong and was engaging in bullying tactics. And China would never give in to this. They didn't actually make the specific statement, which is really important, and that is China was saying that the United States would have to withdraw its unilateral tariffs for even talks to begin. So that was a concession.
And we know from a substantive point of view that China has recently circulated what it calls a whitelist. In other words, goods it was going to allow into China tariff-free. Now, about a week and a half ago, we saw reporting that about 25% of America's products going into China were coming in tariff-free. In other words, China was making unilateral concessions, was not announcing it,
This was for things like semiconductors, aviation parts, industrial chemicals, medical devices and some medicines that China obviously couldn't get elsewhere. And so this was an important climb down from the Chinese and it was in, you know, they got nothing from the US for doing it. So look, the Chinese position is extraordinarily weak. President Trump recognizes that.
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Chapter 3: How is China’s economic and political position described amid trade tensions?
I just hope that he understands that now is the time to press the advantage.
Die Gespräche, die in Geneva stattfinden werden, was machst du mit der chinesischen Delegation? Ich meine, ich denke, mein Verständnis ist, dass es oft so ist, dass man lesen kann, was sie denken, von wem sie senden. Also, was ist mit dem Team, das der chinesische Regime sendet?
Sie senden ihren Vizepräsidenten He, der ihre Hauptverkäuferin ist und sehr beeindruckend, jemand, der gute Verhältnisse mit Xi Jinping hat. Und jemand, der einen Rang hat, der vergleichbar ist mit dem Vizepräsidenten Bissets. Das ist ein Beweis, dass sie das ernsthaft nehmen. Was noch mehr ist, kann ich nicht wirklich beurteilen.
von der Komposition ihres Gruppes, weil sie es nicht wirklich erläutert haben, außer für den Vizepräsidenten.
Die weiße Liste, die Sie bezeichnet haben, ist das, und das kann eine sehr simplistische Art und Weise sein, aber ist das ein Versuch der chinesischen Regierung, die Arbeiter zu plakieren, ihre Bevölkerung zu plakieren und Fabriken offen zu halten?
It is an attempt to keep some factories open. And the reason is that a lot of these items, like the industrial chemicals and the semiconductors, for instance, they're necessary for China to build and make the products that it then exports. So, yes, to keep some factories open, that's what they're doing. I don't think they're trying to placate workers as such.
Although there are worker protests across China, the regime has been able to control them up to now. So I don't think that at least now they're worried. They should be, but I think it's more just to make sure that China can continue to get the components it needs in order to export. With regard to some of the medicines and medical devices,
I think those are just that China needs them themselves and they can't get them elsewhere. So that's an attempt, I think, just to make sure that their health system doesn't break down.
What about the protests themselves, though? I mean, it seems... Es klingt wie ein ziemlich schwerer Lauf, richtig, um genaue Intelligenz zu bekommen, auf welchen Niveau diese Proteste einen Einfluss haben, weißt du, was für eine Scope und eine Größe wir schauen. Hast du etwas darüber gehört, was zu diesem Thema angeht? Sehen sie sich wach zu werden?
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Chapter 4: What is the nature of China-Russia relations and their involvement in the Ukraine conflict?
They're as exaggerated as they normally are about China-Russia relations, but make no mistake about it. China and Russia are on the same page and they're working very closely. Remember, at this point, there are Chinese military officers in the Ukraine war. They're at the front. They're nominally observers. I suspect they're also advisors.
But in addition to that, there are Chinese mercenaries actually fighting for Russia in Ukraine. And they are supposedly without the stamp of approval from Beijing, but you could not have... Military age men getting visas to go to Russia and when the regime knows exactly what's going on. So I think China is just trying this on.
They're seeing the reaction of the United States and the West to the introduction of Chinese soldiers. And so it is not inconceivable, Mike, that we are going to see not only mercenaries, but we're going to see China actually fighting in Ukraine.
I know that sounds a little bit inconceivable, but, you know, we go back about six months and the idea of North Korea having, you know, 12, 13,000, you know, North Korean soldiers actually fighting in Ukraine, I mean... No one would have said, oh yeah, yeah, of course that's going to happen.
But it did. No, absolutely. And it caught a lot of people by surprise, despite the support that North Korea had been providing to Putin up to that stage, obviously with hardware, munitions and other assistance. But Yeah, I think you're absolutely right.
It would be, to use your word, inconceivable to imagine that the Russian military is out there recruiting Chinese citizens to come fight in the war as mercenaries without having had any dialogue with the Chinese government to discuss this, given that Putin is kind of the lesser character in that relationship. But
Ich glaube, wenn man sich die Aufmerksamkeit betrachtet, Xi Jinping in Moskau zu sein und am anderen Tag darüber gesprochen hat, über ihre Freundschaft mit Steele und ihre vorherige No-Limits-Partnerschaft, How can you actually describe that relationship? My impression has always been China, the regime is always going to do whatever is in its best interest.
And it's very good at sort of strategic in the moment relationships and friendships. But they kick them to the curb, you know, once they view it as not in their best interest. Is this a best friends forever scenario? Or, you know, is China just doing what they've done in the past in terms of Russia?
Well, it's not best friends forever, but it could be best friends for decades. And it is a relationship which is much stronger than most people thought. You know, we had a lot of very smart people in New York and Washington say, oh, you know, China and Russia will never get along. Well, okay. I don't care what happens in the year 2100. I care what happens right now.
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Chapter 5: How does China exert influence over Pakistan in the India-Pakistan conflict?
The Pakistanis took the Indians by surprise by downing those at least two Indian planes. I don't think India is going to let that happen again.
Just being mindful of time, the discussion is about to take place in Switzerland, taking place possibly even as we speak. Do you expect anything to come out of those meetings other than we've agreed to continue talking?
A couple of hours ago I would have said yes, that's what I expected. With Trump saying he wants a result, I'm afraid that we're going to be pressured into some sort of mutual reduction of tariffs. Remember, there's the reduction of tariffs. That is a win for China. And the reason is, our tariffs are remedies for the theft of US intellectual property and for China's predatory trade practices.
If we reduce our tariffs, this is unilateral disarmament. Because we are taking away our remedies. Because China is going to continue to steal our stuff and they're going to continue with their predatory policies. So, that's a win for China. And I'm really afraid that that's going to occur.
But if they don't, if there's not some agreement to lower tariffs, right? Because I suspect if... If, say, the Trump administration says, we're holding the line, we're not dropping tariffs here, I mean, there's going to have to be some tit for tat, because it wouldn't seem likely in the face of that that the Chinese would make any sort of concessions, right?
So then we're at a stalemate, and then you're looking at the potential damage Nicht nur für die chinesische Wirtschaft, die das Schaden viel schneller als hier in den USA ausdrücken scheint, aber es wird mit dem amerikanischen Publikum zu einem gewissen Zeitpunkt Schmerzen verursachen, oder?
Absolutely. Look, we've had injurious China policies for three decades. We've had injurious trade policies for three decades. We Americans can't think that we can get out of this without costs. And if we're not willing to pay this cost, we are going to be a very diminished country. And so if you don't want a future, sure, yeah, let's continue to buy cheap stuff from China.
If we want more wars around the world, yeah, let's continue to buy this cheap stuff. But we're Americans and we've got to make sacrifices. And this is a tough message for the American public. I know it's not one that any politician is willing to say, but let's face truth. So many times in the past, we have failed to face reality and we have paid for it.
And sometimes we paid for it in the lives of many Americans. Let's not do this again.
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Chapter 6: What are the possible outcomes of the US-China trade talks and their implications?
Chapter 7: What challenges does the Chinese economy face including protests and bank liquidity issues?
That's true, but I think that it sort of creates an impression maybe a bit larger than it needs to be, because there are tens of thousands of these small factories. So if they lose the thousand or two, it is not something which is going to threaten the security of the regime.
The one thing about protests that we need to keep our eye on is that in the last few hours we've been hearing that in Shenzhen, which is the city across from Hong Kong, there was a protest in front of a bank. And that means, I think, to work back. We know that China's small loans and business loans are in trouble. They've been defaulting at an alarming rate.
That means probably some of the smaller banks and financial institutions are having problems with liquidity. which means they're probably restricting withdrawals. That would account for the protests in front of the banks. There are also reports, which I think are more speculative, that there are bank protests in Shanghai and Beijing.
I'm not sure I believe that, but the point is that those are the rumors that are now circulating. They come from manufacturing sources, which I think Normalerweise sind sie ziemlich gut berühmt, ziemlich akkurat. Wir bekommen also eine Bildung, dass nicht nur die Proteste verbreiten, sondern auch generell, jetzt geht es zum Banksystem.
Das kann für China kritisch werden, wenn der Zentralbank die kleineren Institutionen mit Liquidität nicht zerstört. Es gibt Restriktionen, was der Zentralbank tun kann. Das wird also die Herausforderung sein.
Okay. Ja, es ist interessant, dass Sie sagen, dass einige von diesen, die Pay-Issue und die Proteste dort, und sort of predate this tariff trade war situation, but then it's obviously certainly adding to it. I've seen some analysis that talks about some 16 million jobs potentially at risk in China. Do you think that's anywhere near accurate?
Yeah, that number comes from US investment banks and some foreign investment banks are releasing numbers in that range. You hear 16, you hear 20 million. This is a number which sounds precise, but I'm not so sure. And the reason is, it all depends on how the tariff war goes. So, if the tariff war goes really badly for China, we're talking well in excess of 20 million jobs.
If Trump caves in, then that number is really exaggerated. So, we'll find out. And by the way, I don't think Trump will cave, but I do believe that his general instinct to make a deal can sometimes push him into things that are not as advantageous for us as Remember, we've got all the high cards here right now. We're the trade deficit country. We're the bigger economy.
China's economy is probably contracting right now. So Trump doesn't need decay, especially because this is so critical to our future.
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