On "Forbes Newsroom," author and U.S.-China relations expert Gordon Chang discussed where U.S.-China trade will probably end up.
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00:00I want to read what President Trump posted on Truth Social regarding the talks.
00:05He said that they were a, quote, total reset negotiated in a friendly but constructive manner.
00:11We want to see for the good of both China and the U.S. an opening up of China to American business.
00:16You're a student of history here.
00:18Do you think that we will realistically see China open up to American business?
00:24No, I really don't think so.
00:25You know, it was a point that if this were going to happen, it would have happened when China joined the World Trade Organization in 2001.
00:36But for various reasons, it didn't happen.
00:39And it's just because the communist system really is resistant to foreign business.
00:45And sometimes, you know, in the history of China, we have seen the regime open up, especially starting in 1978.
00:55with the beginning of the reform era, but not under Xi Jinping, who has a very different vision of China.
01:02His vision is much closer to 1950s China.
01:05His hero is Mao Zedong.
01:07And we are seeing Xi Jinping, I think, move China in that direction.
01:11He doesn't have the power to fully push China there, but that's where he can and where he does have the power.
01:19That's what he's doing.
01:19So I don't think that President Trump's vision for China is the same as Xi Jinping's.
01:26If China is so resistant to foreign business, what then are you looking out for the next 90 days?
01:32Do you think that the United States can really have meaningful negotiations with China then?
01:38Well, we'll have meaningful negotiations, but I don't think they're going to produce a meaningful result, especially not within 90 days.
01:46And I think that China will just try to delay.
01:49Remember, China, with 90 days, basically its export factories are going to be producing for Christmas.
01:56This is great for China.
01:59And it really relieves a lot of the pressure that we have seen on the export sector.
02:04But I think China is going to say, well, you know, at the end of the 90 days, we really need to have another 90 days.
02:12So I'm going to see I see them trying to delay this.
02:16I don't know what Trump will do in terms of a request for another delay.
02:21He would just just have to wait.
02:24But remember, on TikTok, we actually have something on TikTok.
02:27Trump gave an extension on his first day in office, and then he extended the extension.
02:32And so probably Xi Jinping is thinking that he can TikTok the United States on the trade talks as well.
02:39Do you think that the United States and the team negotiating for the United States,
02:43do you think they're missing anything when it comes to China that perhaps you have some knowledge on?
02:49Well, no, they've got far more knowledge than I do.
02:54I have a very different outlook on China and a very different view of where it's going.
03:02So but I don't know any more than they do by any means,
03:06because they've been involved in these discussions for quite some time.
03:09And I'm just an outside observer.
03:12What then, as an outside observer that has plenty of expertise in this area,
03:17are you looking out for in this 90 day period?
03:19I'm actually looking to see what Apple will do.
03:25You know, it's very interesting that on the first of this month,
03:28Tim Cook said that during the current quarter,
03:32that most of the production of iPhones for the U.S. market will come from India.
03:37And he said the production for other devices, such as iPads, will come from Vietnam.
03:42That, to me, is really startling, because Apple has the most difficult to move supply chain.
03:49And if Apple can make that statement, then, you know, basically anybody can move their supply chains.
03:55So I'll be watching what companies actually start to do during this 90 days.
04:01Because although, you know, companies may say, well, if the U.S. and China are going to settle things,
04:05I don't think they are, for the reasons we just discussed.
04:09And I think that they're going to try, companies are going to try to protect their supply chains
04:14by making sure they're not as reliant on China.
04:17Because if they do, if they still remain reliant on China,
04:21they can get to a point where they don't have a business,
04:24because they can't bring products into the U.S.
04:26So just as a matter of business necessity,
04:30we'll be looking at how companies rearrange their supply chains.
04:35Is China concerned hearing that, hearing Apple saying,
04:39we're moving our supply chains,
04:41thinking that other companies might take a cue from Apple
04:44and move their supply chains out of China?
04:45I mean, how concerned, how big of a concern should that be for China?
04:50Oh, I think China is very concerned about that.
04:52You know, we've seen China try to do its best to keep Apple inside China.
04:58And, you know, there's a lot of turbulence now between Pakistan and India.
05:05I don't know, but I would just say this might not be a coincidence.
05:10We know that China has tried to tar India's image as a place for manufacturing.
05:17They've done that for years and years.
05:18Right now, I'm sure that people in Beijing
05:23are extremely concerned about Tim Cook's announcement.
05:27Well, there is certainly a lot to look out for,
05:29especially in this 90-day temporary pause.
05:33And Gordon Chang, I always appreciate your perspective.
05:35I hope you can come back on and join me
05:37as we see more developments play out.
05:39Thank you so much for the time.
05:41Well, thank you so much, Brittany.