The Duran Podcast - US-China talks risk spiral into conflict

Episode Date: June 8, 2025

US-China talks risk spiral into conflict

All right, Alexander, let's talk about what is happening between the United States and China with the tariff and trade negotiations, the deals that the talks that allegedly they're having. Things appeared to have calmed down from where they were, say, three, four weeks ago. But now it looks like things are, and it appeared that there was some sort of an understanding. between China and the United States with the tariffs, we went from 145% to 50% or 40%. I forgot the numbers that both sides agreed towards two, agreed to. And now it seems as if things are deteriorating again between both sides. What's going on? Well, this is a very strange business because we're told that there's been negotiations between China and the United States.

Trump is unhappy about the way in which the Chinese are digging in over the course of these negotiations. And we're also told that the Chinese have, in some way, which is not clear to me, violated some of the understandings that Scott Besson reached with the Chinese in Switzerland, in Geneva. The trouble is, I don't know where these negotiations are supposed to be happening. I mean, I've not seen big negotiating teams meeting in public talking about these things. I'm no doubt there are contacts, but it doesn't seem to me as if there's any real push to try and negotiate anything at all. And I think, again, that some of the people who were advising Trump perhaps let him to think that the Chinese were interested in negotiations and that they would come round and would start negotiations for the kind of economic divorce that he clearly had. for. And I think, again, he's probably surprised and disappointed that the Chinese are not

coming forward and making proposals of their own. And this is, you know, boiled over. And that's why we've now had these threats, basically to go back to the sanction, the tariff war that we had between China and the United States a few weeks ago. So I think, again, that some, Somebody perhaps should speak to Trump and tell him, look, if you've got, if you want to pursue a protectionist economic policy, if you want to impose tariffs on China, that is your choice. You don't have to negotiate your economic policies with the Chinese. That is illogical. Just impose the tariffs that you think, currently, as I understand it, they're at 30%. If you want to keep them there, keep them there. The Chinese want to put their own tariffs at 10% against your products.

Well, that's their sovereign prerogative as well. I don't think you should get obsessed with this or try to work out all the time. It's a great deal with China. Perhaps they're not interested in a deal. Just let the tariffs that you already have do their work. That economic divorce that you're talking about is going to happen anyway and concentrate instead on developing an economic policy within the United States aimed at its re-industrialization.

And that's probably what I would say to him at this time. Is that what he's trying to do? Yeah, I think it is. Right about his administration? Because it doesn't seem like that's, I mean, it seems like they're split on the actual, on what they actually want to accomplish with all of this. I think this is exactly right. And I think, again, he's getting confusing advice from all sorts of people.

I think, again, there's this idea that he can negotiate some great overarching deal, with the Chinese. Well, that might be possible, but that will take two or three years to negotiate if you're going to go for that kind of negotiation. And I'm not sure that Trump has those two or three years, and I'm not sure why he would want to go there anyway.

As I said, he's got tariffs now against China, at 30%, which is very high. By any measure, those are very, very high tariffs, indeed. Leave it at that. Let those tariffs have their effect and go ahead, and as I said, focus now on how you're going to re-industrialize the United States. I mean, that's, it seems to me, the best thing to do, rather than get yourself drawn back into an economic war with China, which didn't work out very well when it was attempted before, and also could lead, and this is the danger,

could lead to other things like military confrontations with China in the South China Sea, Taiwan, all of those kind of things. There is a risk, and I don't think this is one to be discounted, that at some point the anti-China hawks, if we continue to have this standoff over tariffs and sanctions and things of that kind, we'll say to Trump, look, whatever tariffs we are imposing on China isn't working in the way that we should. We need to start putting military pressure, like, for example, starting to take steps to interfere with Chinese trade through the Strait of Malacca or in the South China Sea or something of that kind. That would be incredibly dangerous. But given the kind of people, some of the people that we see in Washington,

I don't think it's a possibility. They can be discounted at all. Yeah, I mean, Hegset's speech in Singapore was very hawkish towards China. I mean, I just get the sense. that there are parts of the Trump administration, maybe even Trump himself, that would just like to have this thing just be over with. Let's move forward with this managed divorce with China, and then they can do their thing, we'll do our thing. We don't have to be friends.

We don't have to be allies, but we don't have to be enemies either. We could be adversaries, and we'll just go our separate ways on the world stage. but I think there are many strong forces, powerful forces in the U.S. government and in the Trump administration that just want to punish China for whatever reason. They want to humiliate China, they want to punish China, they want to damage China, and a divorce is not enough. No, no, no. We're not going to just settle for divorce. What we have to do is we have to put China in its place. We have to destroy China.

We have to humiliate it. And only then will this dispute be settled. I mean, did you get that sense? Absolutely. And I get to say something else, which is, unfortunately, there may be understandable historic reasons for this, but unfortunately, this isn't just an attitude that is confined to the U.S. elite in Washington. this is this this anti-Chinese feeling does extend to parts of the US population as well and this is

something that I'm afraid we have to acknowledge and recognize I don't think it's wise in terms of policy you know one always says the decisions made in anger are repented at leisure but I think that there is this strong current feeling in the United States at many levels that somehow China needs to be brought down, that it's daring to challenge the United States as an economic rival and that its economic policies in the past have contributed to de-industrialization processes in the United States and that they've stolen U.S. technology and that they've done all of these things. And for all of these reasons, we must somehow put them back in their place and teach them that, you know, in future, they mustn't cross the United States in the way that they have allegedly done.

I think that sentiment is very widespread and it's very, very strong and it bubbles to the surface. And at some points, I think Trump himself is quite close to sharing it. I think his instincts are, as you say, that he wants an economic divorce from China. But a divorce can be amicable and it can be contentious. seen, when divorces become contingents, they can quickly evolve into absolute loathing and a desire by each party to inflict the maximum hurt on the other. And this is the risk, this is the risk that we see with this divorce, that it's heading in that direction rather than the other one. Just to finish the video, what does China want? What do the Chinese people want? What did

your sense of what the Chinese officials are wanting out of this? And what about the Chinese population? I mean, is China okay with an amicable divorce? Are they fine with it? Are they fine to move on? Are they prepared to move on? Do you think the Chinese leadership or the Chinese people, I mean, do they harbor any type of resentment to the West or to the United States, the leadership? or are they okay to just let whatever, whatever happens in the past, whatever happened over the last 10 years or centuries, doesn't matter, they're okay to just move on and just do their thing, or do the Chinese have this type of, do you get there's a sense from China that they're, that they're saying, okay, you want to humiliate us or you want to bring us down?

Well, we'll bring you down. I mean, is that how they operate? I'm just asking a question. I'm just kind of curious because everyone talks about the Trump and the U.S. side of things, but no one is really asking, what did the Chinese want or what's their feeling or attitude to all of this? Yeah. It is essential to understand that before the CPC came to power in China, in 1949, China had been through what the Chinese referred to as the century, humiliation, and a complete economic, societal and political collapse to a very, very great

extent engineered by the Western powers, not primarily by the United States. Maybe the major player was Britain, but of course it was in the mid-19th century. But of course, the Chinese sentiment doesn't distinguish between Western powers in that sort of way. But there is this sense, in China, that China must never be pushed around again in the way that it was pushed around before, that allowing itself to be pushed around in that way caused China to suffer this collapse, which was a terrible experience with the Chinese people. It was like the 1990s in Russia going on for a whole century and that China must never let that happen.

And there is that sense there and it is there and it's a constant and it's an understandable constant. It's constantly, you know, bubbling under the surface. And if you go to Chinese social media, you will find it expressed there many times. And, you know, this feeling is very, very strong. Now, I think, however, if we're talking about the Chinese leadership and the Chinese business community, they are very tough-minded, extremely pragmatic people. When Trump first became president back in 2017, Asi Jinping met with Trump.

At that time, it was all about a negotiated divorce. The Chinese thought that they could do deals with the Americans, that they would be able to maintain something of the economic relationship that had been built up since the 1980s. They were confident about that. They were working very, very hard to do this. When I myself was in China in 2017, I was told by a banker that I was there, that it was very interesting to see how, you know, who was going to the American consulate in Shanghai

and who was going to the Russian one. To the Russians, it was intellectuals and soldiers. To the American one, it was business people and party officials. In other words, there was still this interest at that time in maintaining a strong economic relationship with the United States. I think as time has passed, and here I should say the impact of the Biden administration cannot be underestimated. As time has passed, Chinese attitudes have hardened.

They no longer believe that the kind of economic relationship that developed under Bill Clinton and Obama can be sustained any longer. They too have been moving towards an economic divorce. And yes, there will be disruptions. But I think that they believe that they can handle it. They look at the percentage of GDP that is accounted for by. trade to the United States. They look at the enormous reserves the Chinese people, savings the Chinese people have in China itself. They say there's more than sufficient money in China to absorb

any loss in trade with the United States. There's also more than enough money in China itself now to propel China's economic development for at least the next 30 years. So, and I think that Over the last five years, they've been working steadily towards recalibrating their economy in that direction. So a divorce on amicable lines is something which the Chinese government and the Chinese business community, well, they may not exactly welcome it, but it's not something that, hold any great terrors for them, and they would rather that things went in that direction than, as I said, in some of the other ways, since they can't maintain the relationship, the trade relationship that they had before, I mean, they're prepared to go for that.

What the Chinese do not want is an out-and-out confrontation with the United States, a military one, obviously. And if they feel that the United States is indeed going in that direction and is trying to humiliate China all over again, then all of those resentments that you talk about will come to the surface and then we will see a massive consolidation of Chinese society and a determination not just to hit back. at the Americans, but perhaps to go beyond that and to try to humiliate the United States, China humiliating the United States in the way that some people in the United States want to humiliate China. And we could then find ourselves in an incredibly dangerous spiral, which it would be in no one's interests. But that's my own sense of things in China. I think they believe that they, and I think that they've worked out plans about,

how they can manage this divorce from the US. And yes, there will be problems. There will be higher unemployment. Some factory jobs will be lost. People are talking about 9 million jobs. That may sound a lot, but it isn't so much in a country with 1.4 million people. And China has the means to absorb those jobs too. Chaos can be avoided.

I think that's the lesson in all of this. Absolutely, yes. Yeah. But unfortunately, history has taught us otherwise, but this is completely manageable and chaos and destruction can be avoided. Absolutely. I agree. All right.

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