Gordon Chang: This Is Exactly What Trump Should Say To China's Xi In Their Upcoming Phone Call

Forbes Breaking News

On "Forbes Newsroom," author and U.S.-China relations expert Gordon Chang gave his unvarnished take on the U.S.-China trade war, and what President Trump should say in his upcoming conversation with Chinese President Xi Jinping.

Transcript

00:00Hi, everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes. Joining me now

00:07is Gordon Chang, political commentator and author of Plan Red, China's Project to Destroy America.

00:12Gordon, thank you so much for coming back on. Well, thank you, Brittany.

00:16I want to discuss where we are right now when it comes to the trade talks between the United

00:20States and China, because it seems like we're at a really contentious point. Last month,

00:25we saw a big development in these negotiations. The two countries agreed to majorly roll back

00:30tariffs for 90 days as negotiations continued. But over this weekend, President Trump claimed that

00:36China, quote, has totally violated its agreement with us. This is an accusation that China has

00:42full wholeheartedly rejected. So what do you make and how do you characterize the moment we're in

00:47right now? This is an extremely difficult moment. And President Trump is right. China has violated

00:53the May 12th agreement. In that agreement, China said it would roll back non-tariff measures that

01:01it had put in place after April 2nd, what Trump calls Liberation Day. But clearly, China is still

01:09maintaining its ban on the export of rare earths to the United States. And that, we understand,

01:15was actually discussed in Geneva prior to May 12th. So clearly, the Chinese have not complied

01:23with their agreement. And I have to say, I'm not surprised. Talk to us about that. I mean,

01:29what are you not surprised about? Because you took issue with something the Deputy Secretary of

01:34the Treasury posted. He posted this, quote, China must follow through on its commitments to support

01:40global supply chain resilience and economic stability. And then this is what you said, quote,

01:44stop telling China what it must do and begin hitting the regime hard. We have cajoled,

01:49talked to and pleaded with the regime for decades. And for decades, the regime has procrastinated,

01:54lied and cheated. I've had enough. Sounds like you're pretty fed up right now.

01:58I guess I am. We have talked to China for decades about what we thought was in China's best interest.

02:06And I believe that we're right. But it doesn't really matter. Because right now, we know that Beijing

02:13does not agree with us. It calculates its interests very differently than the way we think they should

02:18calculate them. So let's get realistic. Let's stop talking to China about what it should do

02:23and start imposing severe costs on China for what it is, in fact, doing. You know,

02:29and now this is on us. We've gone through this so many different times. We just got to understand that

02:36Xi Jinping is intransigent, that political system is intransigent, and we must act accordingly.

02:41How do you think we should act? Because the administration said that they expect a call

02:47sometime soon between Xi and Trump. What do you think needs to be discussed? How do you think

02:52President Trump should handle that conversation? Well, President Trump should be tough. And he should

03:00say if China doesn't immediately comply with the agreement, the US will raise tariffs to 145% general

03:07tariff rate. 1000%. I really don't care. It needs to be extremely high. It needs to keep Chinese products

03:15out of the US as long as China refuses to comply with its agreements. Now, I believe that we should

03:22be at a time where it looks like we could end up in a war because China is preparing for war. It talks

03:28about it all the time. And it mentions us as its enemy. We need to get prepared, which means we need to

03:34be resilient. And I understand that that means we are going to be less efficient as an economy. But

03:40right now, efficiency is not really that important. What's important is resilience and the ability to

03:47make sure that we can continue to survive as a nation in a very difficult situation.

03:55I want to talk about that and dive a little deeper into those comments. When China is calling the United

04:00States an enemy when you bring up the word war? I mean, do you realistically think that A, we need

04:05to be so tough talking about China that we're using the word enemy? And B, do you foresee a potential

04:12future war with the United States and China? Yes, I do foresee a war, unfortunately. China's regime

04:20calls us an enemy. People's Daily, the most authoritative publication in China, in May 2019,

04:27carried a landmark editorial that declared a, quote unquote, people's war against us. Now,

04:33we're Americans, so we don't take propaganda seriously. But what China is doing with language

04:38of that sort is creating a justification for itself to strike the United States. Now, I don't think that

04:46Xi Jinping is going to wake up one morning and say, let's launch missiles against New York. But we see

04:53some very dangerous Chinese activity in its peripheral seas against South Korea, Japan, Taiwan,

05:00Philippines, and far away Australia. And I'm concerned that one of those incidents will spiral

05:07into a war. And that's partly because Xi Jinping has now configured the Chinese political system

05:13so that only the most hostile answers are considered acceptable. And that means China will not be able to

05:19deal with the international community after one of those incidents. And so that is the reason why

05:25we could very well see war. And President Trump, and this is all coming as we are in the midst of

05:31these what seem to be heated trade talks. President Trump recently posted this quote,

05:37I like President Xi of China always have and always will, but he is very tough and extremely hard to make

05:43a deal with. What do you make of that post? What do you make of his characterization of Xi? And do you

05:48think that's helpful to the current negotiations? We need to put that into the context that throughout

05:54this week, American officials have been saying that there will be a phone call between Xi Jinping and

06:01President Trump this week. But we haven't seen a date. And I think that it might not occur this week.

06:09And it might not occur for a very long time for a number of reasons. One of them is that the Chinese

06:14believe that they have our number. They believe that they can force President Trump to back down.

06:21And the other thing is that Xi Jinping is in political trouble at home. And so I don't think

06:25he wants to do something which could cause him angst. And, you know, President Trump after a phone call

06:32could say or do things that Xi Jinping would be blamed for. So right now, it is, I think,

06:39really hard to come to any sort of deal with the Chinese on trade or anything else for that matter.

06:46So I don't think that this is going to be a period where we are going to be happy with the results.

06:51But we just got to understand that's what's going on in China. And that is driving events right now.

06:57And there's nothing we can do about it. And do you think from that perspective,

07:01it will be easier if the two leaders get on the phone? It could cut out that noise.

07:06They can hash out things directly. Do you think that that's the easier route? Do you think we'll

07:11see more results that way? I don't think that that will lead to results because, you know,

07:18we believe as Americans that communication is critical, that we can always convince others to see

07:25things our way or it can lead to compromise. But after decades of having this approach and not

07:32getting good results out of China, we need to come to some conclusions that this just doesn't work.

07:38It sounds like it should work, Brittany, but in fact, it hasn't. So because of the structural

07:44differences between China and the United States right now, and because of the growing problems inside

07:49the Chinese political system, I don't see that that conversation is going to help matters.

07:56Do you think the Trump administration understands that, that they seem to be at an impasse where

08:00this isn't working and there are structural differences between China and the United States?

08:05Do you think that, A, they recognize that and, B, they should change their approach

08:09at all when it comes to these trade negotiations?

08:11Yeah, I don't know what's in the minds of people in the Trump administration. But the fact that they

08:18keep on talking about a phone call, which keeps being pushed further and further into the distance,

08:24indicates to me that they don't view things the way I do. So, no, I don't think that they get it.

08:31And because of that, I think they're going to get suboptimal results, as some people might like to put it.

08:38But, you know, this is not going in a direction that is good for the United States.

08:42We need to pivot. We need to impose those costs. And we got to realize that after decades of

08:48misguided China policy and after decades of misguided trade policy, we're not going to get

08:53out of this without costs. And President Trump needs to make that point clearer than he has in the past.

08:59You want to see a pivot. As we said, China and the United States agreed to majorly roll back

09:06these tariffs temporarily for 90 days. And we have less than 90 days now. So aside from that potential

09:12phone call between Xi and Trump, what are you looking out for as we go on through these 90 days

09:18before that pause is lifted? Well, I'm primarily looking at developments

09:23inside the Chinese political system because we're seeing events which are unusual and which are not

09:30consistent with the notion that the regime is stable. So, for instance, we have information that suggests

09:39that, for instance, Xi Jinping has lost considerable influence and maybe even control over the Chinese

09:46military. And that, of course, is a critical development. We are also seeing reports of instability

09:54inside the civilian side of the Communist Party, although we don't really have much corroboration

09:59on that. But we do have corroboration on the problems in the military side. So that's what I'm

10:05looking at, because the problems inside China's political system will drive China's external behavior.

10:11And that means it'll drive trade negotiations, for instance.

10:15And I want to get your opinion, switching gears, your reaction rather, to two Chinese nationals who

10:23were arrested recently over smuggling in fungus, allegedly. What's your reaction to that situation?

10:30This looks like they were caught in the middle of carrying out a biological weapons attack on the

10:35United States. This was a fungus that could blight American agriculture. And we need to see that this is

10:42in the context of a series of events that is at least a half decade long. So in 2020,

10:50Americans in all 50 states received seeds from China unsolicited. And this looks like an attempt to

10:57have Americans plant invasive species. We also saw this year that Timu, the online Chinese site,

11:05was sending seeds into the United States unsolicited. So this looks like a broad-based

11:10assault on America's farms. And we need to consider that when we think about our relations with China.

11:17You know, we're trying to come to a trade deal with China while they're attacking our farms.

11:22To me, that's just wrong for us to talk to China in these circumstances.

11:27To that point, I mean, how do you think this will, or if it will at all, impact those trade talks?

11:32I wish I knew. As I mentioned, I think it should lead the Trump administration to end the trade talks.

11:42But that won't happen, of course. But I think that we're going to see increasingly belligerent

11:49actions on the part of the Chinese that over time will lead to basically a breakdown in those trade talks.

11:56Right now, the problems inside China are too great for Beijing to deal responsibly with anybody,

12:03especially the United States.

12:04Well, there's certainly a lot to look out for. It's a very fluid situation.

12:08And Gordon Chang, per usual, I always appreciate you coming on and giving us your insight.

12:14Thank you so much. You're welcome back anytime.

12:15Well, I so much appreciate the opportunity to talk to you, Brittany. So thank you. And stay safe.

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