The President's Daily Brief - PDB Situation Report | December 14th, 2024: Inside The Collapse of Assad & China’s Massive Military Drills

Episode Date: December 14, 2024

In this episode of The PDB Situation Report: We're starting in Syria, where the fall of Bashar al-Assad has dramatically shifted power dynamics in the Middle East. We'll discuss what this means for the region with Brian Carter from the American Enterprise Institute. Plus, China's latest military exercises around Taiwan are among the largest in decades, with nearly 100 vessels mobilized. Senior Research Fellow at the Heritage Foundation, Steve Yates, joins us to break down the implications. 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  Blackout Coffee: https://www.blackoutcoffee.com/PDB  Patriot Gold: Call 1-888-870-5457 for a free investor guide. Learn more about your ad choices. Visit megaphone.fm/adchoices

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to every story. And when you see the money side, you understand what others miss. Get the money side of the story. Subscribe now at Bloomberg.com. Welcome to the PDP Situation Report. I'm Mike Baker. Your eyes and ears on the world stage this weekend coming to you from the Middle East. Let's get briefed. We're starting things off in Syria, where the fall of President Assad has dramatically shifted power dynamics in the Middle East. We'll be joined by Brian Carter of the American Enterprise Institute for more on that. Plus, we'll take a look at China's latest military exercises around Taiwan, and there have been a number of them, which are among the largest in decades, with nearly 100 vessels mobilized. That's a lot of vessels. Okay, joining us to break down the implications is senior research fellow

at the Heritage Foundation and a good friend Steve Yates. But first, today's situation report spotlight. Just last week, we were discussing on this program the astonishing speed of the rebel advance in Syria. And then, just one day after that episode aired, the Assad regime fell. Overnight, rebel forces stormed Damascus, toppling Bashar al-Assad's government, and ending over 50 years of authoritarian rule by the Assad family. And might I add, brutal rule. The embattled leader fled to Moscow as his grip on power collapsed, and this reportedly now shacking up with his best friend of Vladimir Putin. Now with the Assad dynasty gone, Syria stands at a crossroads.

It's fate in the hands of a motley coalition of rebels cementing their grip on power. And credit where it's due, our next guest predicted this outcome on last week's program. Joining me again is Brian Carter. He's the Middle East portfolio manager for the Critical Threats Project at the American Enterprise Institute. Brian, welcome back and thank you for showing up two weekends in a row. It's very impressive. Thanks for having me. Good to be back. Now, listen, we finished up last weekend's episode as the rebels were advancing.

And, you know, we all saw what was happening, which was a very rapid advance. But then I think my last question for you last weekend was, do you expect, out of all of this activity, do you expect Assad to be toppled? And you said, yes. but did you expect it to happen in the span of a few days? No, not at all. I thought he had at least a couple more days beyond that. It all happened so fast. I think one of the comparisons I've been drawing over the last couple of days

is for those of us who watch the collapse of the U.S. mission in Afghanistan, it was very reminiscent of that, except even faster, which was, I think, very surprising for a lot of us who have watched this conflict for many years. and, you know, we haven't seen the front lines move at all in four or five years. Why the speed of the regimes fall? I mean, what was it that led to, look, he battled them almost into submission back in, what, 2015, 2016, obviously largely with the Russians help. But what was the major contributor to his downfall this time?

Yeah, I'm not quite sure on specifics, although he was very evident just based on where we were seeing, that there's a bunch of institutional rot and demoralization within the Syrian Arab Army. I mean, if you watched what was happening and how these forces were just collapsing, you know, it was very clear that there was something very wrong with these forces. We saw, for example, I think it was right before I came on your program last weekend, the rebels had advanced to this large bridge over a major river. and instead of blowing the bridge, the Syrian Arab Army kept retreating and had an aircraft bombed the bridge, which is not very practical.

It usually doesn't work to actually destroy a bridge. And so that was a big indicator for me that, you know, something is badly wrong within these military formations and they're collapsing very rapidly. And to what degree was it a factor of the lack of support from either the Russians or the Iranians? Yeah, I think that was a factor. But I think if the Syrian Arab army hadn't collapsed as quickly as it did, the Russians and the Iranians would have tried to get forces, get some resources in there to try to stem the bleeding a little bit. The reality is everything happens so fast that by the time the Iranians in particular can mobilize and deploy forces, it would have been all over anyways, even if Assad had tried to hang on for a couple more days. Yeah, I mean, it is interesting.

Look, the Russians have two very important bases there, right? One air base, one naval base. So they had resources there. Now they don't because they've obviously moved them out of harm's way. They're not unsure what the rebels are going to do regarding the Russian assets. But it does seem like they could have done more, even with the fact that the Assyrian army wasn't performing up this mouth. On the Russian side, they had a bunch of resource constraints related to Ukraine. Now, they did have aircraft in Syria and those aircraft were conducting airstrikes.

But again, I think those aircraft can't hold ground. And so they needed a ground force to be able to prevent this collapse from happening. That ground force probably would have had to come from the Iranians. But the speed at which the Syrians collapsed kind of made that plan go right out the window because the Iranians just couldn't move enough resources there in time to really do anything about the problem. Yeah, so what degree do you know about what they did move here? I mean, were they moving in militia from Iraq? Were they moving in fighters from Hezbollah?

I mean, what were they attempting to do at least? We saw some Hezbollah, but mainly to secure Hezbollah objectives in Syria. And we did see some Iraqi groups reportedly moving earlier in the week to support Syrian forces around the city of Hama. I think that those forces either got blocked or stopped short of engaging in Hama. One of the things the rebels did was actually cut the roads east of Hama to prevent any reinforcements from getting towards Hama, which I thought was very smart operationally in military terms, but probably prevented these reinforcements from arriving. In terms of Hesbola, they try to secure a key town called Kuser. which is close to Holmes, which fell, I think on Friday. It all happened so fast to kind of lose track of when everything fell.

But Khosera is one of the conduits to which Hezbollah would get Iranian weapons. So Hezbollah pushed 2,000 fighters across the border to secure the area. But as the regime fell apart, they just withdrew back into Lebanon. Well, I mean, it does sound, I mean, it's clear from what you're saying that, I mean, you believe that the primary contributing factor to all all this was just the failure of the Syrian army. And that then influenced the Soviet and Iranian decisions in part because, again, of the speed of the deadline. So to what degree do you think that Syrian army is going to be completely disbanded? I mean, is there any sense that the incoming new government is going to do essentially the same thing that happened in Iraq when

we just decimated the ranks of the Iraqi army after the fall of Saddam? Yeah, they're going to have to rebuild some sort of fighting force because the Syrian Arab army does not exist anymore. The rebels in the South captured a lot of the tanks and that sort of equipment. I'm assuming the HTS-led rebels coming from the north also captured a lot of equipment. But, I mean, I haven't even seen serious reports of large remnants of the Syrian Arab Army out anywhere, whether that's in the desert or, you know, even in the kind of Assad heartland in the far west. I've seen reports of, you know, maybe five or six guys who are saying, we'll fight to the very end. But other than that, I mean, there are no real remnants of the army existing.

So not even up in sort of that northeast area of what Assad is from, where he sort of had his home base. Yeah, in the kind of northwest area, yeah, there's not even one way that's up there. And in fact, yeah, in fact, we're seeing that, you know, the rebels, have control in a lot of these areas now. I suppose a big question now is what next? And I realize that most people are just speculating on this because nobody really knows at this early stage. But what do you think?

Yeah. So I think that there are a couple different ways that this can go, obviously. The most concerning direction it can go is if there are widespread revenge killings and, you know, extremist groups taking advantage of the incomplete Syrian government control to kind of spin up sectarian hatred and those sorts of things.

We haven't seen too many indicators of that, but given it's so concerning, we are on, you know, sharp lookout for any indicators that, you know, that we might be on that sort of trajectory. I think in the immediate term, one of the biggest things I'm watching is in northeastern Syria with the U.S. backed forces and what's going to happen there. The U.S.-backed Syrian Democratic forces are Kurdish majority, they're Kurdish-dominated, and they have to control a lot of Arab areas, and they have a lot of tension with those Arab communities. And we're seeing these Arab communities trying to throw off the SDF and say, no, we're part of Arab Syria, and we want to no longer be under SDF control.

That is a big flashpoint and whether we will see continued fighting up there. Yeah, that's a really important point with you. I'm glad I brought up. But you have to imagine there was some uncomfortable conversation there over the fact that the Turks, and certainly Erdogan, view the Kurds as a terrorist organization and would very much prefer that the U.S. not be supporting their efforts. Exactly. And some of the areas that the Turkish-backed rebels have been fighting with the U.S.-backed SDF over are areas that Turkey has long sought to capture. from the SDF. They've made repeated threats to capture these areas, and it seems like they finally made their move. So now today we're seeing, you know, this week we've seen reports of the Turkish back rebels capturing the Mandéj area, which is one of those important areas for, for Turkey to take control of. And now, Brian, if you can stay right there, as you know, here at the Situation Report, we've got some terrific sponsors. We're going to take a break to hear from them, and then we'll come back with Brian Carter, and we'll be talking about Israel and their involvement in Syria to

date, as well as the rebel groups and who and what they represent. We've got a quick break, and we'll be right back. Hey, Mike Baker here. Look, if you're tired of the same old coffee from those mega corporations, and you know the ones I'm talking about, pushing their woke agendas, which they do, well, then listen up. It's time to take a stand and support a brand that truly embodies American values. And here, of course, you know, I'm talking about Blackout Coffee. Now, they stand with hardworking Americans who believe in family, faith, and freedom. They roast some of the most incredible coffee you'll ever taste, using only premium-grade beans roasted and shipped to you within 48 hours. Think about that. One minute, they're in the roaster,

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Love it! A Lego set is a gift that. always clicks and clicks. So beautiful. And clicks. For kids who love to create, choose a Lego set. A gift that always clicks. Welcome back to the PDB Situation Report. Now, let me bring back our guest, Brian Carter of the American Enterprise Institute. Brian, one interesting aspect of all this, with Syria is Israel's activities since Assad was toppled. Talk to me about that, if you could. Israel has conducted an air campaign into Syria to destroy a lot of these strategic assets that Assad held, stuff like chemical weapons, missiles, those sorts of things.

They've also gone after Assad military bases and that sort of stuff. In addition to all that, they have created a, what they're calling a buffer zone in southwestern Syria, just outside of the Golan Heights. they're moving in there to prevent any sort of situation from emerging out of the kind of chaotic situation in Syria that could threaten the Israeli state. Israel, as you know, after the October 7 attacks, has really had a very different security mindset, and they're really not willing to take any risk with their national security right now, which is why I think you see this very assertive policy developing as it relates to Syria. Yeah, I think that's a really important point,

So I was going to ask you about, you know, the sort of this more emboldened attitude towards a very proactive, you know, preemptive strikes. And I don't know that before 7 October, if this situation in Syria had happened, that Israel would have considered the same moves. They probably would have gone after the chemical weapons and the missiles. But, you know, I don't think they would have gone so far as to go into, you know, the disengagement zone and go into Syria. I thought that was a pretty big step. And it really drives into focus, again, like I mentioned, the changes in Israel after October 7th, to kind of put it into comparison. The October 7 attacks per capita, had they occurred in America, would have killed like 50,000 U.S. 50,000 Americans, which is just an unfathomable number. Where does all this leave the Iranian machine?

It leaves them in a very, very bad, invulnerable position. So obviously since October 7th, they have, for all intents and purposes, lost Hamas as a military organization in the Gaza Strip. Hasbola is badly weakened. Now you have the fall of Assad. So prior to the fall of Assad, the theory from the Iranian side was, well, you know, Hasbola is badly weakened, but we can ship more weapons, trainers through Syria. They'll get to Lebanon. You'll rebuild Hasbola pretty fast and we'll be in pretty good shape. Now they've lost that.

So they're going to need to rebuild some way to reconstitute some of Hesbola's forces, providing them with weapons and those sorts of things. So I think in the coming months, you're going to see Iran try to think about how to do that, but I think you're also liable to see in the coming years Iran really rethink its overall security strategy in the Middle East in a way that it hasn't in decades. I think that's going to be a really important thing to watch, especially as we go in to a new U.S. administration. Well, and then the Supreme Leader is, what, 85 years old and reportedly not in the best of health, and they've been talking already about the succession plans. And the IRGC, I believe, correct me if I'm wrong, but I think the IRGC is angling to play more of a role in who that will be at the end of the day.

So with the Iranian regime, is there a sense that they're done in Syria or is there a sense that perhaps they'll come to some accommodation with the new government, whatever that new government looks like? What do you think about that? I don't know. I think there's a sense that they're going to try. I don't know how successful they will be. Obviously, HTS and the rebels writ large have been fighting the Iranians for years at this point. So there's no love loss there. And I think that's a really important piece of context to keep in mind. But at the same time, I don't think Iran necessarily sees itself as bounded by this government in power. I think that it will try to work with this government. But I also think it will try to – Iran will try to get its hooks into other organizations in Syria, try to rebuild some sort of, you know, resistance network in Syria. In fact, they've talked a little bit about this.

The Supreme Leader said just the other day in a speech about Syria, He said, well, you know, the Syrian youth will rise up again, just like the Iraqi youth rised up against the U.S. occupation of Iraq between 2003 and 2011, clearly alluding that there is some idea in his mind that, hey, maybe we can build some sort of resistance organizations in Syria to fight this so-called occupying government. I mean, in the short term, the rebels, I think the citizens of Damascus, you know, they took to the streets and they ransacked Iranian facility, certainly the embassy

and other offices. But you look at the Russian side, and it seems like the Russian government has been able to somehow orchestrate an accommodation, because it doesn't appear as if there's been any movement towards those Russian facilities

or even the embassy in Damascus. I'm not exactly sure what is going on behind the scenes. I will say that the Russians have been slowly, kind of withdrawing their forces over the last couple of days. We're seeing indications now of Russians moving west to east towards Tartus and towards Hameim, where they have their naval base and air base, respectively. You know, honestly, from the rebel perspective, I'm sure it's a little bit of, hey, we've got Damascus. Let's try not to bite too much off more than we can

chew here and try to consolidate what we've got rather than, you know, trying to break into the Russian base and fight the Russians. It's similar in a sense to how the Taliban perhaps had a little bit of a disengagement system with the U.S. forces at Hamun Karzai International Airport during the Afghanistan evacuation. To what degree do you understand the various elements? Obviously, HTS is the lead dog in this pack of rebels who engaged in the offensive. But what do you know about the other groups. And to what degree do you believe HDS is going to be successful

and cobbling all of them together and holding them together rather than having, you know, some disastrous chaotic fracturing as we saw in a way in Iraq? Yeah. So I think that's a really important question that not enough people are asking right now.

We're trying to keep a good track of the different constituent elements of HTS. We're still working on that problem. right now. But I think, you know, one of the things to watch here is that HTS, while its leader is kind of putting forward this moderate face and saying, hey, you know, we're not going to go to Sharia law, we're not going to do this and that. He isn't all of HTS. And within HTS, there are a bunch of, you know, jihadist organizations that have a much more extreme line. And so the open question in my eyes is, is Jolani, the leader of HTS and kind of the leader of all the rebels at this point, going to be able to keep those extremist factions in line?

Are these extremist factions going to start kind of going off on their own and doing their own thing? And what will that look like? Will they begin to say, you know, Jolani is not implementing the Sharia and therefore we have a huge problem with this? And, you know, we're not going to be a part of this anymore. And so I think Jolani is going to have to do a lot of work within his coalition, but also those coalition members can just go off on their own and do things like, for instance, if they started spurring sectarian violence or widespread revenge killing, that could put us on a very scary trajectory like I talked about, you know, just a little ago.

Yeah, I was in a walk in the early days. It was this euphoria, much like we see on the streets of Damascus and elsewhere in Syria. You know, and rightly so. People are excited. They're happy. You also see a sense of nervousness, I think, amongst the crowds. They're a little unsure as to what comes next. But for right now, they're just enjoying the moment. I think that moment doesn't last long. And so I think whether it's Al Jolani or some coalition, he's named a bureaucrat, basically, to run an interim government, Muhammad al-Bashir. But, you know, I look at what happened in Iraq as sort of a case study of what not to do because that went from euphoria to chaos and brutality very quickly. That's exactly right. And that's one of the pieces that I kind of have in my own mind right now too is the Iraq case. And I actually think one of the interesting elements of the Syria case is whereas in Iraq, Saddam is toppled by a U.S.-led military invasion. This is led by internal uprising, which is important because there's even more euphoria, both in the international

community and within Syria, because people say, hey, the Syrians have overthrown the Assad regime. And everybody, like you said, is rightfully super happy about that. But we do need to keep an eye out for what comes next and be tracking any indicators that this is going to go on a, you know, a scary trajectory, just like Iraq did and kind of fall into chaos. Well, listen, last weekend when you were on the situation report, you predicted accurately that Assad would topple. Again, we had no idea with the speed that was going to happen. But look, you know, since you turned out to be the amazing Kreskin, do you have any predictions about Syria and what's going to happen in the short term for this weekend show? Yeah, I'll try to go two for two here.

But I think 8th and northeast, that's the area that I'm really looking at. And so one of my predictions would have to be, you know, I think that this, this pattern of Arab defection from the Syrian Democratic forces, the U.S.-backed group up there, is going to continue regardless of whether or not the Turkish offensive continues. And so I think that will cause significant problems for the U.S. presence going forward. And so that's kind of my prediction of the week. Yeah, let's hope you're right again, man. Listen, Brian, thank you very, very much for coming back. Brian Carter, the Middle East portfolio manager for the Critical Threats Project at the American Enterprise Institute. I look forward to the next time you're on the show.

Maybe it's next weekend, depending on what happens. Listen, thank you very much for your time, Matt. Thank you. Always a fun time. Appreciate it. Have a good one. All right. Coming up next, China's military. What do they do it? Well, they're flexing muscles near Taiwan. That's not shocking, I suppose. They've been doing that for a little while now. sparking global concern, rightly so, senior research fellow at the Heritage Foundation, Steve Yates, good friend, joins us to analyze what this means for the region and the U.S. response.

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admired vehicle? Oh, or really awesome vehicle. It really is the recreational activity vehicle. The stylish 2026 Toyota Rapp 4 Limited. What's your Rav 4? Welcome back to the BDB Situation Report. Now, in response to Taiwanese president, Lai Jing-Daz's recent visits to Hawaii and Guam, China has launched extensive military exercises around Taiwan. It's fairly standard. Anything Lai Ching-Dah does something that the Chinese regime doesn't like, Xi Jinping throws his teddy out of the crib. These maneuvers involve nearly 100 naval and coast guard vessels, marking one of the largest displays of forces in the last three decades.

Now, the drills span the Taiwan straight and instead into the Western Pacific, with China imposing temporary airspace restrictions along its southeast coast until December 11th. Taiwan's defense ministry has heightened its alert status, establishing an emergency response center, and conducting its own combat readiness exercises. The United States has expressed concern, well, that's good, urging China to avoid actions that could destabilize regional peace. For more on this, let me bring in Senior Research Fellow for China and National Security at the Heritage Foundation's Asia Studies Center, and that would be the insightful Steve Yates.

Steve, thanks very much for joining us here on the Situation Report. Pleasure, Mike. Thanks for having me on. So let's start with a 30,000-foot view on this thing. What is up with the Chinese military and their recent military exercises involving Taiwan? Well, the most recent one involved what we're told is about 90 vessels, which is a pretty significant uptick in total numbers. There's been an uptick in number of kind of encroachments of Taiwan that all seemed to fit a pattern of encirclement, trying to demonstrate an ability. to have a blockade, whether that is a short-term shock or something they'd like to try to do

long-term. This is a little bit of what people tend to talk about a gray zone operation that isn't full-on attack, destruction of Taiwan, and also not just sitting back behind the middle line of the Taiwan Strait and counting their ships. So it's pressure, it's intimidation. It also touches our allies. and you can't have a blockade against Taiwan without encroaching on Japan or the Philippines.

And Xi Jinping, in his infinite wisdom in recent years, has been kind of picking fights with them. So there's a lot in all of this. We often just think of it as it's just China and Taiwan or it's something of the United States. I think whatever's going on with Xi Jinping right now is kind of bigger. And in some ways, it's harder to try to counter

because a lot of our policy habits will just look at this and say, okay, well, can't the president talk to Xi Jinping or is there something going on Taiwan we have to address? China's got a lot of capabilities now. We've given them a lot of money. They've taken a lot of technology. And we've been really distracted. So this is not a great set of circumstances coming together in these headlines. Is this working towards an actual takeover in whatever form that is of Taiwan? Or is this all about messaging at this point? Well, that's the money question. And we don't really. really get the luxury of knowing the answer. They're kind of able to go pursue both at the same time.

They get a lot of what they would really want, we think, by just pressuring Taiwan and allies in the United States to sort of back off and make a deal and just concede that this area of responsibility is China's jurisdiction. And they push allies and the United States out beyond the first island chain to the Pacific. It impacts an immense amount of global trade, the likes of which I don't think people are really digested, but you don't have a tech juggernaut out of South Korea and a huge amount of economic exchange with Japan without encroaching on the territorial sea and airlines and communication around Taiwan. So a lot's at stake. But I think it's really ultimately a pressure campaign and a messaging campaign, but when you're

playing with big ticket items like aircraft carrier. and things that can go out in the deep blue water areas, you have to take it at face value. You can't bank on it just being a comms exercise. You think part of it is the fact that the Chinese military really hasn't been tested for a very long time and that part of this is an effort to kind of see what their current status is, what their capabilities are?

Yeah, I don't think a lot of the world stage has really paid as close attention to China's military modernization as our intelligence community and a lot of specialists and policy areas have. And so it might be news to a lot of people how many big ship platforms they have. Now, this is kind of one of the dilemmas we've faced. This is a big, new material navy that they have. It's untested in combat.

You know, China's had a perfect record under the Communist Party of killing other Chinese people. They don't really have much of a track record in modern warfare. I don't think we can afford to be overly hubristic about that. This is a tough challenge. But they should also be a little bit cautious. We've come up across some big navies when you look at order or battles or armies when it comes up to order of battle. That doesn't mean they stand up in combat.

But I don't think we really want to try to find that out anytime soon. Yeah. Is it true that their shipbuilding capabilities kind of dwarf those of the U.S.? Yeah, but that's one of those areas that's extremely frustrating where I think we've gotten in our own way. I don't understand whether it's over-regulation on environmental issues or if it was sort of globalization of supply chains. But America really pulled back from refining of energy and building proper supports. And when it came to submarines and big vessels, we really pulled back. China jumped way ahead. South Korea's still got some significant capabilities in this area.

But we have to figure out how we're going to work with our allies to rejuvenate these supply chains. We should do more in America, not quite on a switch. And maybe we ought to consider a novel idea about not transferring immense wealth and technology to a country like China so they can put it into jumping ahead in these kind of areas. Well, I mean, part of that is also, I think, in a way beyond our control, because I would argue that a lot of that transfer has been through economic espionage and theft of intellectual property and research and development. And it's done. So they've received the data, the input, the plans. Yeah, Elvis has left the building, I think. So, yeah, this is a tough question.

It's probably not a fair question even, but if you had to look at a time frame for Taiwan, What would that time frame look like in terms of a Chinese takeover? Again, no matter what the scenario is, how they do it, whether it's a kinetic war, whether it's a soft takeover. But what do you think that timeline looks like? Part of the answer is just the tough reality that we've lived with this kind of a threat for decades. And just the tools for Beijing being able to test us or impose its will or try to do things with Taiwan, there are a range of options. have expanded, their capabilities have gotten bigger and stronger, but really even going back from the missile exchanges in the 50s and the threat from the Taiwan election in the mid-90s,

where they had tests and splashdowns. We've lived with this all along. I think that really the main factors are, are we doing anything? When I say we, anybody that is on the receiving end of the CCP, do we doing anything to increase doubt? inside China? Are we doing anything to increase concern that should they behave irresponsibly? They pay a price that's too high. I mean, when they look at what's happened with Russia relative to the Ukraine conflict, do they think that they would fare better or worse than Russia has with the threat of sanctions or cut off from the wider West in certain ways? I think, unfortunately, Beijing probably is more optimistic that they would fare better than Russia has. But,

But if we do better at sewing that doubt and that credible pain to be imposed, I think that we buy more time and deterrence improves. Second variable is Japan. Japan is a much more powerful country. But how do you do that? Well, some of that is a lot of what we have by way of capabilities and cyber and a lot of other operational areas. We have kind of fought with one hand tied behind our back because we only talk about

executing things that are defensive. China has no such restriction. It's kind of why they've been able to run roughshot over some of the areas of our critical infrastructure. They've gamed all that out with Taiwan and Japan and others, too. But they don't distinguish between offensive and defensive. They don't distinguish between foreign and domestic. For them, the world is their oyster.

They go wherever they can go. And we've basically been an open door on that front. And they've closed us off. There hasn't been reciprocity on that. But there's a wide range of things we've never even made them believe we would be willing and able to do in their own country. I think there's some fun tests we could conduct that might send that kind of a message. But really getting our allies more prepared for these kinds of realities and having greater independent capabilities where they don't wait for Uncle Sam, they act on their own. I think that complicates things for Beijing.

It doesn't make the world scared that they'll have to live without the U.S. From a foreign policy perspective, though, national security and strategic intelligence perspective, what do you think, what's your assessment of the incoming administration, the Trump administration? Well, I mean, John Ratcliffe is a friend, and he's someone who's been in the intelligence world in multiple ways, but most recently at the office of the director of national intelligence, now going to be director of CIA. I think there's some big questions that are sort of a side issue, but just 9-11 was a long time ago. We lived in different circumstances. I think we put some of these structures in place and priorities in place at a time of crisis. I think it's worth looking at what makes most sense about how to organize the intelligence community resource, the intelligence community, all these many years later. I don't think that it has been reformed to look at a world where we say the Communist Party of China is the largest existential.

external threat to America's way of life. I believe that. I think John Ratcliffe believes that. I think President Trump believes that. Frankly, I think a lot of Americans do and don't think that the topics of recent years of climate change or other kinds of things are the top threat. Leave aside how those should be addressed, but I think people tend to see this this way. If this is a transformational moment for looking at reform and whether Doge is a real thing that's looking at how to find efficiency, and reorder things, then, you know, aside from being Republican or Democrat, blue, red, whatever, appears to me from what's being talked about, we're at one of those moments. I think the CIA has frankly been right for something like that for a time.

I don't know whether the Office of the Director of National Intelligence plays a forever role or maybe things get reordered there too. But what are we doing to make sure that we have the technology, personnel, language capabilities, and collaborations out in the world that reflect the priority that I articulated. A lot of members of Congress will echo that priority too. I think that's the heavy burden for the incoming team. I think it's worthy. The time is now. But that's where I think the work is. And I would just emphasize there are many Democrats that I've known over the years that will think this way. It's sort of been the hot politics of recent

past, where they sort of pulled back from where that emphasis was. But the select committee on strategic competition with the CCP and the House of Representatives was bipartisan. And there are a lot of Democrats that signed up with the thinking that I just articulated. And so I hope that's where it's going. I wish I knew. With the exception of perhaps the differences about the utility of tariffs, I think in terms of China as a concern as a threat, that does seem to be one of those few bipartisan issues. And you'd like to think, like you've said, that we're going to get some forward progress here with the incoming administration on something that's important. Look, Steve, if you'll stay right where you are, don't move, take a quick break,

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Save on the stay. Oh, and free waffles are yours to claim. Well, I hope you like my little song. Book direct at sourcevilletales.com. Welcome back to the PDB Situation Report. I'm joined again by Senior Research Fellow at the Heritage Foundation and good friend, Steve Yates. Steve, we're talking about the perhaps change in view towards China with incoming Trump administration. And I'd like to kind of keep on that subject a little bit more.

Obviously, there's been a lot to talk about tariffs, setting that aside. I'm wondering what you can, what you could say about the level of communication that the Biden administration has had with China, with the Chinese regime's leadership, because you've got to keep that channel of communication open in some fashion. And how you think that will go with the income. administration. Oh, Mike, I mean, it's really been an interesting contrast where if you look at the Biden administration, you had a war breaking out with Russia's reinvasion of Ukraine. And President Biden, best I can tell, never talked to Vladimir Putin from the time of the reinvasion forward. And yet there was this other challenge looming on the other side of the world.

Asia and President Biden did have conversations back and forth with Xi Jinping a time or two. There was some in person, some by a video conference, et cetera. And so in some ways, this idea that you should keep a channel of communication open wasn't held consistently and wasn't really kind of explained very well through that time in my estimation. Now, I also think that the content and the quality of the conversation matters much more than, you know, how did they talk and how often did they talk? President Trump has his own style of doing these kinds of things. Keith, that's a very diplomatic way to put it.

In my lifetime, I can't think of a president-elect throwing out there, hey, how about the leader of China come and attend the inauguration? It's a kind of a form of communication that really hasn't existed. And I don't think in a million years that Xi Jinping is going to show up and listen to the brilliant oratory. the best words coming from the Capitol on inauguration day. But clearly, Donald Trump is a kind of leader that is going to talk to adversaries and others. I mean, he talked to Little Rocket Man after insulting him for a long time, and then they met and had their conversations.

He's clearly, I think, said that his objective is to open these channels of communication to try to less intentions and to explore alternative paths to peace. and prosperity without necessarily opening with concessions. I can understand that logic. I can also see some things like that playing out. It goes against the grain of what sort of the dominant views it then in past Republican and Democrat administrations. But when you look at a situation like this, is he want to pull Xi Jinping into a conversation and say, you know, you really did a number on me on that COVID business. You lied to my face, and it cost a lot of people, a lot of money,

and the thanks you're going to get for that or some terrorists for a time. And, you know, something near and dear to me, I hope he goes and looks them in the eye and says, hey, you know, we know that you have subsidized the chemical precursors for fentanyl and you've trans-shiped these things in a number of ways. And hundreds of thousands of Americans

have been killed by this. You're going to pay for that. So how are we going to talk about? How are you going to pay for it? It's going to be some tariffs. But, you know, I lost my own daughter to the fentanyl plague. I want him to make them pay. Yeah, but is he going to do it in his own way with these tariffs or negotiations?

Is he going to invite him in for a talk? It sounds all good. And you get the quiet punch in the private meeting. That does seem to be some of what they have in mind to do. But we're just going to have to see how the results shake out. But I think they have to demand accountability on COVID and fentanyl. I think they're going to have to press on not having the phase one trade agreement honored. And then, you know, once you got them at the table, what are you going to do?

What do you got what's your offer, Mr. She? Yeah, I think those conversations definitely need to be had. I'm cynical over whether you can have those conversations and in any real fashion change the behavior of the. CCP, certainly with Xi Jinping in charge, it hasn't been the case. But I think you have to have those conversations. And I think the value add with Trump, look, like his style or not, is that he keeps other leaders on their back foot, right? He's just unpredictable, right, in a way that most leaders aren't comfortable with, including, I would argue, she. So I just think that there's a real value there that I don't know whether it's intended or not, whether he's doing it as a psychological

ploy to keep other leaders off balance, but it doesn't matter because I do believe it works. I've lived and shared that experience that you expressed on the skepticism, and I also can't say whether this is four-dimensional chess, which I don't understand, or whether this is one-dimensional chess, which I also don't play. But this is clearly something has to be tried differently. And one of the redeeming qualities I've seen in the Trump approach is that he is clearly comfortable in the most uncomfortable situations. And part of what he does to set up negotiations is he's blunt and direct about things that the counterpart might be uncomfortable being raised. I've worked for presidents before who were not comfortable making those kinds of conversations happen. And we didn't necessarily get the movement we wanted.

So I kind of support trying this other way and just sit back and measure it. measure those results, but we've we've kind of glided along a path where the economic trends have to change. I think Xi Jinping is forcing some of those changes. He began a process of strategic decoupling before Americans even understood what those words were. And I think that COVID and economics, and if you look at investment, some of this changing of supply change is moving of its own inertia, whether our leaders want it to or not. I want it to. But so, you know, she has to see some of this writing on the wall.

I hope Trump's style and opening salvos will move things forward. Every administration comes in with high hopes, and people sort of try to feel out where the progress can be had. Another good friend, Steve, Fell, Gordon Chang. He's talking with me about this idea that, and he firmly believes it, and I don't disagree with him at all, is that China is on a war footing with the U.S., the West, and that the U.S. just chooses either to ignore that

or doesn't understand it or is naive. What do you think? I agree a lot with Gordon's general analysis of these things. The only sort of a twist I would put on it, really, is it just reminds me of how we saw and talked about the war on terror after 9-11. It's this idea that a war is declared on us and we can choose whether we saw it or not, but really our only choice is whether and how we're going to respond. I think that basically the Communist Party of China never was planning to be our friend, but it certainly was happy to receive advantage over many years. I think it's been in a low-grade economic and political war with us for some time, and it's acquired the capability to be in a hot war with us.

Whether and how that plays out, I think that whether you look at what happened with COVID, whether you look at what's gone on with weird efforts to compromise parts of the United States or soda vision through psychological apps like TikTok and other kinds of things, you know, they clearly are engaged in. in what the Communist Party is built around, which is political warfare, ideological warfare, above all else, so that you get your opponents to divide and sort of get conquered by themselves. So you don't have to rise up as high to be the top dog. That, I think, has been tried and true for them. It's playing out more. And so are they on a war footing? I'd say they always have been, to a degree.

It's just these different lanes where it's accelerating or getting emphasis. more. I think it's a little more shocking to see the military part, space, AI, and technology really reaching farther and faster now. But the fundamentals really were us diluting ourselves that they thought otherwise during a reform and opening period. And Xi Jinping, I think, is a different leader that way. What can you tell us in the remaining time that we've got, Steve, what can you tell us about the state strength of the Chinese economy? Yeah. Well, there are more questions. than answers when it comes to China's economy. It's always been thus when I was a very, very young intelligence officer and my job was to kind of assess what was going on in a Chinese economy.

Some of our sources in government were better than what the private sector had. Now I'd say it's absolutely the reverse. The private sector has a better view into what's happening inside of China in terms of data. But that's still very, very incomplete. When it comes to their statistics, I think we fall back on the truism. They lie. But we still can sort of see trends. Their property sector has been weak for some time. Their people have significant restrictions on moving capital out of their country. They have significant lack of trust in the viability of their banks. And so they put a lot of their life savings into real estate. And so when people see pictures of real estate, high rises, crumbling or largely vacant, that's the hopes and dreams of a generation of Chinese workers who

haven't been living a lavish lifestyle, but we're trying to save for retirement or their children's better life, et cetera. They have some really bad fundamentals inside, but they're at scale very big. And these authoritarian totalitarian regimes like North Korea and in some ways we'd rather not admit China, they can stick around a lot longer than we would expect. And in some ways, that's more troubling to me. I see a weak and at risk China as maybe even more likely to risk conflict than one that is on the gravy train rocketing up in performance. And so I think in an odd way, that's why we're seeing some of what we are with picking fights they didn't need to around their periphery. Yeah, I think that's really interesting.

I mean, you could argue Putin has been sort of a master of that. whenever he feels in a threatened position, he finds an outside agitator. He finds some, you know, boogeyman out there that he can hopefully draw the support of the population and get their minds off of other things. And I think your point is absolutely spot on that potentially a weak economy, which I think she probably fears more than anything, you know, sort of a downward spiral and its impact on the population, I think that could impact a timeline on a potential move to Taiwan. Absolutely.

I mean, he basically has said that he doesn't believe in the reform and opening policies of Deng Xiaoping. He wants the ideology of socialism and the ideological struggle to be first priority because he wants control as the way toward stability. He doesn't see openness and growth as a way toward stability. and I think that is really in conflict with what our policy has been, what our assumptions have been, and I think it's leading to a lot of risk around China. Well, Steve, I got a lot more questions.

Unfortunately, I don't have any more time, which all that means is you've got to pick up the phone and agree to come back on the show when we call you. You got an open book, Mike, of course. Fantastic. Listen, thank you, Steve, very much for being here on the Situation Report. Steve Yates, Senior Research Fellow at the Heritage Foundation. Thank you again, joining us today and sharing your insights. Very much appreciated. That right there is all the time that we have for the PDB Situation Report for this weekend.

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