The President's Daily Brief - PDB Situation Report | December 27th, 2025: Why This Year of War Rewrote the Ukraine Playbook & Asia’s Strategic Crossroads

Episode Date: December 27, 2025

In this episode of The PPDB Situation Report: We begin in Ukraine, where another brutal year of war has upended long-held assumptions on both sides of the battlefield. What’s changed, what hasn’t, and what it tells us about where the conflict is heading next. Joining us to break it all down is George Barros from the Institute for the Study of War. Later in the show, we shift our focus to the Far East, where strategic competition continues to intensify across the region—from Beijing’s long-term ambitions to Washington’s evolving posture. We’ll be joined by Steve Yates from The Heritage Foundation to break it all down. To listen to the show ad-free, become a premium member of The President’s Daily Brief by visiting https://PDBPremium.com. Please remember to subscribe if you enjoyed this episode of The President's Daily Brief. YouTube: youtube.com/@presidentsdailybrief Stash Financial: Don't Let your money sit around. Go to https://get.stash.com/PDB to see how you can receive $25 towards your first stock purchase. Birch Gold: Text PDB to 989898 and get your free info kit on gold ExpressVPN: Visit https://ExpressVPN.com/baker Learn more about your ad choices. Visit megaphone.fm/adchoices

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They have the tools you need to start and grow your business. From designing a website to marketing to selling and beyond, Shopify can help with everything you need. There's a reason millions of companies like Mattel, Heinz, and all birds continue to trust and use them. With Shopify on your side, turn your big business idea into... Sign up for your $1 per month trial at Shopify.com slash special offer. Welcome to the PDB Situation Report. I'm Mike Baker, your eyes and ears on the world stage. Well, believe it or not, this is our final situation report of 2025. My, how the year flew by. So today we're doing something a little bit different. We're stepping back to take stock of two of the most consequential regions, shaping the global security picture and looking ahead to what comes next. We'll start in Ukraine, of course, where another brutal year of war has reshaped assumptions on both sides, the battlefield. Joining us to break it all down is George Barrows from the Institute for the Study of War. Then, later in the show, we'll shift our focus out to the Far East, where strategic competition

continues to intensify. We'll be joined by Steve Yates from the Heronge Foundation, but first, this coming February will mark the fourth year of Russia's full-scale invasion of Ukraine. Imagine that fourth year. A war that many analysts once believed would be over in days. Do you remember that? There was once a time when we thought, oh, the Kremlin's going to roll right into Keev and in days, and it's going to all be over. But here we are. In 2025, proved to be another grinding, consequential year in the conflict. Ukraine dramatically expanded its drone campaign deep into the heart of Russia, striking targets tied to Moscow's economic infrastructure and oil industry, bringing the war closer to home for the Kremlin than at any point so far. On the battlefield,

however, the front lines told a familiar story. Russia made incremental sense. slow, costly territorial gains, but, again, only had an extraordinarily high cost in manpower and equipment, underscoring the brutal, almost stalemate that continues to define this war. Joining us now is George Barrows. He's the U.S. team leader at the Institute for the Study of War and a very good friend of the show. George, thank you very much. Hey, Mike. Good to see you once again. Thanks for having me. Oh, thank you, too, man. I hope you're having a fantastic holiday season. It's hard to believe that the year is flown by the way that it has, right?

It just maybe it's, you know, maybe I'm just Groundhog Day. I think every year I say the same thing, which is, wow, it's really snuck up on me, meaning the end of the year. But look, we're about to walk into 2026. And so what I was hoping to do is to get your thoughts on the year passed and where you think this is going.

I mean, what are we looking at for 2026? So let's start with that. What are your thoughts on the developments of 2025 in relation to the Ukraine conflict? What were the big surprises from your perspective? And where do you think this is going? I know that's a really, really big playing field. Yeah, it's good.

It's a good, broad place to start. So look, let's start with the facts. The facts for the 2025 is that the Russians see, not more than 1% of Ukraine's territory. They've actually seized less than 1% in Ukraine's territory. I suppose the crowning operational achievement of the Russians in the battlefield in the theater for all of this year was the seizure of Pachosk,

or the near seizure of Pachosk, but there's still some tactical fighting happening on its outskirts. But this is not something that the Russians achieved in the last six months or nine months, but they had been working on seizing Percost since April of 2024. So this was, you know, the 20-month campaign to advance literally 20 miles to seize Ukraine-74, most populous town, a town of formerly of 60,000 people.

And that was sort of the crowning Russian achievement. And it was the basis of that seizure that the Russians tried to convince the White House and the whole world that the front lines are collapsing, that Ukraine is on the edge of military catastrophe. And because the Russians are advancing at this very slow rate, you know, we have to cajole them to this sort of the ceasefire and conflict termination agreement. But beyond all of those. Well, it seems like, George, I mean, George, it seems like that, it seems like Putin was fairly successful in that effort, at least initially, right?

Because the White House then turned around and produced a 28-point plan that kind of took all of that into account and, you know, turned around and looked at Zelensky and Kiev and said, well, here you go, you know, you better take this deal because otherwise, you know, good luck. And then there was attached to it the deadline for, hey, sign this Ukraine by Thanksgiving or you're screwed. We successfully evaded that. And now it's sort of a sign this by Christmas or sign this by New Year's or you're screwed sort of things. Hopefully we can avoid that. But the good news is that the Russians have been very clear that they're actually not really interested in negotiating.

They're not interested in making any kinds of concessions. And Putin is actually, I think, insisting that he's going to seize all of this terrain. But look, as we look at the 2026, I'd like to see you try because the terrain that the Russians demand, it's the most heavily fortified and guarded terrain, is terrain the Russians have been trying to take for 10 years since 2014. And look, we look at the rate of advance. We look at the terrain analysis. It seems like it's going to take the Russians under multiple conditions two or three more years to take this terrain in the East and Donbass. And I don't know that the Russian military actually has two to three years worth of steam left to go on.

I mean, the one thing that no one's been paying attention to that has been very consequential in 2025 is just how the compounding effects of the war have been affecting Russia. And I don't want to go out there and say like, oh, Russia's on the edge of economic collapse. I think that's been really hyperbolic. But there are real mounting costs. The Russians this year had to start selling their bull reserves for the first time. The Russian inflation rate, as the Treasury assesses it, is around 20%. The Russians just started importing, you know, Indian migrants from India to start offsetting the labor short. Putin gave a speech the other day saying, oh, Russia's labor unemployment rate is so great.

It's 2% or 2. something percent. That's actually a bad thing, you know, when you have a labor pool that's that small and that stretch. So, you know, I don't, I'd like to see the Russians try to continue this. And I think they're desperate to try to achieve through a negotiation, these concessions that they're unlikely to seize on the battlefield any time soon. Okay. There's a lot of questions wrapped up in all of that. But one that pops in the mind is you talk about the labor rate. And we've looked at the economy here on the PDB from the perspective of it.

It's a war machine at this point, right? That's what drives their economy. Obviously, their only external revenue stream has been oil and gas for some time, and that's been shrinking to some degree. But if, say, for whatever reason, the war stops tomorrow, what happens to the Russian economy? I mean, because there goes to the military industrial base that it's been built on for the past few years. Yeah, I think you have a massive problem because I don't think there's enough jobs in Russia to actually accommodate all the people that would be returning to civil. billion life. I mean, you'd have major upsets, major shocks. The Russians actually have a term for or what happened in the aftermath of the Soviet Afghan war, you know, in the late 80s with that

conflict terminated it. We had all of these men, thousands of men, much smaller scale was happening in Ukraine right now, by the way. Return from the Soviet Union. And these were people that were, you know, traumatized. They had PTSD. They didn't call it at the time, but they had PTSD. And they actually resorted the lives of crime. I mean, they became the mafia bosses that that sort of ruled the unruly Russia in the 1990s. They called this the Afghan syndrome. It's the syndrome of these violent, unruly men who are not afraid of the use of force, coming back to domestic civilian life, but there's no opportunities for them.

And they became these sort of robber barons and lafiosos and the oligarchs and all that sort of thing. And so I think Putin is very, he understands there's a big sociological problem you're connected with ending the war, which is why he doesn't want to stop the war, which is why he doesn't want to stop the war, which is why he he's actually building up the forces and streaming us all along and wasting all of our time. Because actually, in many regards, ending the war causes more regimes to build the problems than muddling along and protracting it. Right, yeah, because then you've what have you got? Now you've lost your outside, you know, bogeyman.

And I would argue Putin's always been very good at that in times of potential instability from his perspective, he's always been very good at redirecting the population's attention to some external problem, right, that, you know, they can then potentially rally around. Something else that I wanted to ask you about, the recent discussions that have been taking place down in Miami. So you had the U.S. negotiating team, Steve Whitkoff, Jerry Kushner, or others talking with the Ukrainians, Ulmarov and some other folks who they've been trying to hammer out a revised framework, right? They took this 28-point peace plan, which pretty much leaned very heavily in favor of Putin and have revised it down to report of the 20 points.

But they've been still working on it. And then at the same time in Miami, they've been speaking, the U.S. has been separately with Russian envoys. So, Whitkov, Steve Whitkoff, came out of that and said something that I'd like to get your take on, which is that he believes Russia is fully committed to finding peace in Ukraine. I'm paraphrasing a little bit, but he did say Russia is fully committed to peace, essentially. Yeah. I'm going to have to prevent. I'm going to have to profession disagree with Mr. Wickcock here. All the available evidence indicates that the Russians are not interested in negotiating anything other than the capitulation of Ukraine. Putin gave a phenomenal speech on December 19th where he enumerated that the demands are unchanged. They want

this additional territory that they've claimed to have annexed. They're not willing to support any of the key provisions of the 28-point peace plan. It's a very Russian preferable agreement, but there are certain provisions in there that the Russians don't like. For example, they reject the notion of Ukraine receiving security guarantees, which is kind of the whole point that you need to linchpin to actually terminate the conflict. Why would Ukraine stop fighting a defensive war to only allow the Russians to rearm? And then, of course, the Europeans will do anything serious about it. The 28-point peace plant talks about having American operation of Europe's largest nuclear power plant,

there's a Parisian nuclear power plant, which is currently occupied by Russia. The Russians have decisively rejected that. And so what we're really seeing here is a strategy where the White House has been comfortable using coercion to put pressure on the Ukrainians to bring them to the table. And the Ukrainians have accepted several concessions. The Russians, however, have not indicated their willingness to make any kind of the concessions or even except a deal that's highly preferential to them. They really want to have their cake and eat it too.

And I really think that until we change this calculus, you know, using some coercion to bring the Russians to the table as we have the Ukraine's, I don't think that we're actually close to peace at all, honestly. So I guess just to pursue that just for one more question, but I know this is, speculative, and we're trying to rene somebody's mind, but they have these conversations. Whitkoff comes out and they talk about how optimistic they are. He says that they're fully committed to peace. The Russians, then, the Kremlin, you know, almost immediately pushes back and kind of shoots down the idea that there's been progress and things are moving forward down as a result of these

discussions in Miami. So what accounts for this? Because I would argue this is kind of similar to what we with Gaza, right? There's all this talk about, you know, how this is how we're going to have peace, while completely ignoring the fact that you got to deal with Hamas. And the only player there that matter in terms of the framework of those phases was whether Hamas was willing to disarm and give up governance. And clearly, they're not. But yet there was still this sense of optimism kind of constantly banging about. So what accounts for comments like Steve Wickoffs and this continued optimism. Is it, is it, are they just playing a diplomatic game and they know better?

So, look, um, I, I think the, we need to look to the Russian negotiators that are actually the interlocutors with Mr. Wickcob and Mr. Kushner. And one of the key Russian negotiators is Kareil Dmitriov. And I think Kareel Dmitriov has been, you know, a tremendous asset for the Russians in this whole negotiations thing, because Kareil Dmitriov really knows how to work the American side. He's very effective communicator, very slick guy. He knows what buttons to push, and he can perpetually convince the American side that, yeah, yeah. Actually, we're down to have a piece if we can just get these, you know, these concessions, get these things figured out inside these points.

We can just get all right. Really, that's not representative of the Russian position at all whatsoever, actual. And I think the whole point of this is to have this thing blow up. I think the point of this is to work out a document that the Russians don't intend to accept anyway, by the way, bring it to the Ukrainians with enough poison pills that the Ukrainians cannot accept it, mostly not because of the capriciousness of the Ukrainians, but because it's contrary to their core interest, and it's also, it would be a violation of Ukraine's constitution and law, so, you know, any president of legal standing wouldn't be able to do anything

with that in the first place. Have it dying the Ukrainian's hands, and then that becomes the basis. or a big information operation saying, look, we tried, we got a deal, it died with the Ukraine, the Ukraine's the obstacles to peace, they're the bad guys, so let's just plug, like, why are we even trying about this? They're completely, completely erased. And that's, I think, like, the really sophisticated campaign design behind all this whole thing is they're trying to put this tactic together, and the whole point of this is the blow up when Ukraine would really, it would blow up on the Russian that you were, put it to them to.

Yeah, yeah, absolutely. Well, and also, you know, the Russian side is, being helped somewhat by the mixed messaging coming out of the White House, where, you know, on a somewhat regular basis, it appears as if the administration, the U.S. administration is saying the roadblock here is Kiev, not Putin. So it is very interesting, but obviously, you know, the Kremlin's going to play that up. Look, George, if you could stay right there, I want to be mindful of time. We've got to take a quick break, but don't go anywhere. We've got to be right back with more from George Barros here on the PDB Situation Report, the last situation report of 2025. Stick around.

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Welcome back to the BDB Situation Report. Joining me once again is George Barros, Russia team leader at the Institute for the Study of War. We've been talking all things Ukraine. We've been looking at what's been happening over the course of this past year of 2025, and we're looking forward because it's right around the corner. We're looking forward. into 2026. George, thank you, first of all, for staying put and being willing to stick around. Going into 2026, do you have confidence? I'm trying to think of how to phrase this in an objective way.

Do you have confidence that the White House, the Trump administration, will continue to support Zelensky and Ukraine? Or do you think in relatively near future, they're going to lose interest or get frustrated to the point of saying, okay, that's it? Yeah. This administration is material, man. I mean, we'll go from the Ukrainians are cut off with intelligence sharing to, you know, we think they can get back all Ukraine and there may be some more in Russia. So it also is about wildly. I'm not, I'm not confident in particular. But what I am confident of is that the Russians are not going to end this war any time soon.

I'm confident that they're straying us along. And I'm confident that, you know, in order to actually have a conflict termination, you have to have a negotiating position where they're close enough is going on here. Look, the administration at this point really isn't giving freebies to Ukraine anymore. We don't send the military aid anymore. It's all under the rubric of sales, financed by the Europeans primarily. So at this point, it's actually a money-making in venture for the American. So it's not charity. The real thing is, even if the Europeans don't pay for it, would we turn off intelligence sharing, intelligence that we're already collecting ourselves, for European command with the Ukraine, which would be very bad.

I mean, a lot of Ukrainian civilians will die from the nightly air raids if we're not giving them the intelligence about that. And because we collected anyways, it would be really capricious to turn that off. So it's my hope that we wouldn't do that. It's my hope also that the Europeans will do the right thing. I don't think they will at this point, but do the right thing, seize the Russian assets that are sitting in Belgium. And by the Europeans, I really mean the Belgian, you know,

the Belgians would do that, the Danes would do that, or not the Danes, then the other ones, they would do that. Yeah, because they really don't want to do that. And they would use that to rebuild the arsenal of democracy

to re-kit Europe for all the things that we set in Ukraine and use Russian money for it. But, you know, we'll see. And I think it's important to understand the reason why Belgium is so reluctant to do it, right? They bring that somehow, and look, the Kremlin's already filed a lawsuit. Believe it or not, it's as surreal as that sound, the Kremlin has filed a lawsuit in an effort to

try to prevent the EU from using those frozen Russian assets to help support and, you know, potentially rebuild Ukraine from the actions of the invading country, which is filing lawsuit so that their money isn't used for that. And it's almost as absurd as, you know, Russia is still maintaining a permanent seat on the UN Security Council after all these years of their invasion. But that's another, that's another issue. Look, with the, let's look at the, at the weak points. I mean, if there were to be something that caused Putin to sit down at the negotiating table in a meaningful way, what would that be? Well, you've got to stop the Russian advance is cold, man.

Like, Putin, I'm confident about this. Putin is not getting accurate reports from his military apparatus. He's not getting good intelligence. He's not getting accurate reports. And we know this because General Grasimov, that is the chief of the Russian general staff, is giving inflated reports. I mean, the Russian general staff and the Russian MOD, they have these sit reps that they publish, they're public.

And they talk about towns and villages and things that they see, is a battlefield progress, and, you know, here I love the Institute where we're constantly verifying these things, looking into the data, you know, collecting satellite images. And some of them are true, sure, but a lot of them are false. And, you know, it was really interesting that in, you know, late November, early December, we had this Russian Putin announcement. We seized Kupens and Harki, this operationally significant town near the international border. And then the Ukrainians conduct a counter attack. They retake large portions of the town. Lenski goes and takes a selfie by the signed by the city limits,

sort of emphatically disproving what Putin had said. And I actually don't think that, I think Putin's lying about performance to make it seem like they're doing better, but I think Putin's also being duped a little bit because there's this sort of command economy, economy trickable up effect where the generals know that Putin wants to be told he's doing well. So the generals lie and the general officers lie and the men of the front lie. So there's sort of this garbage in, burbage out take.

And I think as long as Putin thinks that his forces are moving, and they are slowly, then, then, you know, and it's not going to stop. So we have to therefore figure out what's the military science problem, how to stop Russian forces cold. We did pretty good. The Ukrainians did good in 2025. Less than 1% of the country sees. I'd like to make that be zero.

I think it's really interesting in what you said about the quality of the intel that he's receiving. We've talked about that on the PDB before about his shrinking circle of trust, right, which is his advisors, the people that he listens to, you know, that's been shrinking really since the pandemic. He was very paranoid during the pandemic. But certainly now there's a very few people that I think actually get into him and feel empowered to give him truth. which I guess is not atypical for, you know, despots or dictators or strong men at some point. So what about, and you mentioned this earlier in the first segment, briefly you talked about the economy. Some of it is, you know, hyperbole when we talk about the collapse of the Russian economy.

But what is, you know, in short order, I know we could take a lot of time to talk about it, but in short order, from your perspective, the state of the Russian economy right now, and its ability to just continue this 32026. Yeah, so the Russian economy is overheating. We have inflation. We have a labor shortage. And we have regional budgets, which are a deficit. And so this is significant because the Russians embrace the strategy of recruitment

that is very resource intensive economically. I mean, the previous strategy for getting guys to the front line was paying them huge amounts of money, huge by Russian standards, three, four times the annual salary to go fight as a sign-up bonus. And it's very interesting. Putin, I think, is started to change that because he's facing an economic problem. Either he's running out of liquidity or the full of people who are willing to sign up and take a fat paycheck to go risk their lives is drying up, or both things are happening. Because in October of 25, the Russians pass a new law, which actually lowers the legal threshold for mobilizing reservists.

It used to be the case that in Russian law, the Russians could only mobilize reservists to go fight in expeditionary wars during an officially declared war or a state of emergency or that sort of thing. But this new amendment for the law actually lowers it and says, actually, no, we can actually mobilize reservists without declaring a state of war. And yes, they can go fight expeditionary wars, including in Ukraine, including in the parts of Ukraine, including in the parts of We had annexed and declared actually Russian territory anyway. And these reservists are actually starting to be mobilized now. And that's actually really mean because it's the violation of Putin's previous social

contract, which is, I don't use the monopoly of violence of the state to force you to fight. I pay you to fight. And if you die or wounded that, you know, you took the deal. But now the deal has changed. It's like, it's like Darth Vader to Lando in Star Wars, the Empire Striis. I've altered the deal. I'll alter it further. Now it's actually, you sign it to be reservists, but now we can recruit you anyways and put you in its impulsory.

And I don't think there's going to be a right notion of Russia or anything like that, but this is, I think, driven by the economic issues. And it's a problem too, because it means that Russia might be able to generate forces much more cheaply, but it's not because couldn't want it to. This is bad for his political stability. He's doing it out of necessity. Okay. I got to tell you something, George, that Star Wars reference went right over my head. I saw the very first Star Wars movie back in the 70s, whenever that was, and never saw another one. And it's been kind of a point of pride, my part. It's sort of like Star Trek. I watched the original Star Trek with William Shatner,

refused to watch any other version of it. And so I hold the line. I am nothing, if not, consistent. Let's talk about, if we could, over the last four or five months in particular of 2025, we've heard a lot and we've talked a lot about Ukraine's ability to target and strike at the Russian energy infrastructure. And whether it's, you know, through a long-range drone hits on facilities, whether it's naval drones, you know, targeting a tanker or, port facilities. From your perspective, again, you spend a lot of time focused on this. How effective has that been and can more of the same have some sort of cascading, I don't want to say catastrophic, that's the wrong word, but some sort of result on those energy revenues that Putin depends

on so heavily. Yeah. The Ukraine campaign has become increasingly sophisticated over. over time, in part due to American intelligence sharing, knowing exactly what part of the facility in target, what are the real critical, what are the really critical zones? And so it's matured and become more effective. So you're looking at the Korean long range strategic bombing campaign against the oil infrastructure in early 25 versus late 25, two different animals. And they've compounded. Look, this economic line of effort is important. It does. It does. does have an effect, it is like sanctions insufficient to end the war, because ending the war actually does require stopping the advances off the battlefield. And of course, this helps, but it's not by

itself. I think when people sort of think about the political factors or the economic factors, it's sort of like this fantasy that, you know, previous policymakers would entertain, which is we can, we can control Russia's intentions and control their actions with sanctions. We just sanction them. and those are good sanctions have a place on a role in statecraft, but without force, especially when it's a large war, it's necessary, but it's insufficient.

And that's like, that's the temptation. It's thinking there's always easy tools out, there really are no easy tools out. Is stopping the advance sufficient, or do they have to reverse that and actually regain territory? I would argue that, um,

re-gaining territory, be better and make a more compelling case to bring Putin to the table. That's the goal. That's ambitious, not impossible, ambitious. And I think it's something worth striving for. We've certainly not given at our all to try to actually strive for in good faith. There's a lot more that we can do. And the President Trump still has, you know, the cards on the table to do that sort of thing.

But stopping it would be a good place to be. I mean, it's difficult. Look, the Russians are currently saying we're going to take all of this. stuff in Ukraine, even though that we're advancing at, you know, 10 meters or less than 10 meters a day, and it took us 20 months to move 20 miles. We're going to keep doing this slog. If you change that to, you're going to spend 20 months to move 20 feet. I think that becomes a much more difficult proposition. And actually, you have a much more compelling case for a victory. Theory of victory. By the way, the big problem with this is that also, brain is entirely dependent on international backing.

I mean, there isn't a stable equilibrium right now because Putin's whole theory is, I just got to wait out this fickle alliance of Western countries in Korea and Japan. And as soon as they lose the political will to keep doing this and see this as a sunk cost fallacy and I trick them into thinking that my victory is inevitable, then I get to see if I get to have everything. And I think it's important that we call the club. Do you think he's right? Do you think he's right? I think he is right. I think he is right. Because the center of gravity for the war is the international coalition.

I mean, Ukraine doesn't have a state budget. They don't have, they will have weapons. They'll fight. I mean, they're not going to collapse overnight. But Ukraine is so reliant on everything that the international coalition provides. And then that's not, you know, that's not normal. I mean, that's completely normal for states that are fighting in existential war. United States in the American Revolution, probably wouldn't have won the revolutionary war against Great Britain, but we're not for France.

right so South Korea wouldn't have existed wouldn't exist today if we're out for the United States right so this is normal and if Putin can commence us to pull away and fall back yeah he will he will mop it up well George on that note people are going really wait a second

aren't you going to finish on an optimistic note give us something in a minute or less George give us something optimistic about this whole situation as we head into the new year yeah this administration I think is getting frustrated with being, you know, toyed with and dragged on and having their time wasted. We've seen Donald Trump, I think, actually realized when he's being having his time wasted and being taken for a fool. So, look, we have cards. It's possible, I would argue, to stop Russian advances.

The Ukrainians counterattack in Kupensk, I hope, is a foreshadowed things to come. There are actually ways to be able to counterattack. The war is still dynamic. It's not totally stalemated. There are opportunities to roll back the Russian gains. It's just a question of how do you resource it properly? How do you set the conditions for it? How do you do execute the intelligent generalship and campaign design to do those things? And it is possible.

Anyone that says it's not possible is not being, you know, they're either uninformed or not being intellectually honest with you. The question is, how do we get there to end this war and not simply let the Russians keep making a buffet of demands that we can actually satisfy? I'm going to use that term, a buffet of demands, right? It doesn't even have a sneeze guard on that buffet. George, thank you very much, man. As always, you know, we really appreciate your insight, your expertise on all of this.

It's been great having you on the Situation Report throughout 2025, and you can count on us pestering you to come back on early in 2026. George Barros, Russia team leader at the Institute for the Study of War. Great guy. And an incredibly complex issue, which here you have heard it from me, It's not going away as we approach the new year. All right, coming up next, we take a look back at 2025 in a different part of the world in the far east, where China pushed harder on Taiwan, tested its neighbors and forced the U.S.

and its allies to sharpen their response. Stay with us. Hey, Mike Baker here. Now, as the New Year approaches, did you know that the New Year is approaching, let me take a moment of your time to talk about protecting your hard-earned assets. Let me ask a question. Did you know that gold is up around 40%? percent this past year? It's true. It's not speculation. It's actually reality. And if a portion of

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Protect your future today with Birch Gold. They say everything happens for a reason, but I suspect everything happens for a recess. Like this commercial break. Did you need 15 seconds away from music? Or 15 seconds to eat arreases? Perhaps it's true. Everything happens for a reases. This is Euphoria Calvin Klein, the new illicit.

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deepened with Russia, even as China wrestled with some real economic problems at home. At the same time, the U.S. and its allies moved closer together, reinforcing deterrence and preparing for more contested region in the years ahead. Joining us now to walk us through it all is Steve Yates. He's the Senior Research Fellow for China and National Security Policy at the Heritage Foundation and also a very good friend of the show. Steve, thank you very much for coming back on for the last show of the sit-rep of 2025. It's an honor to join you. We'll see what we can do to look back, but look forward. Yes, that's exactly right. And you preempted my first question. What I was going to say was, was, give me your assessment of the 2025 developments related to China. I'm giving you a massive playing field here,

and then we need to look forward and see where it's all going for the new year. Well, Mike, it was a big year. And I think coming in, you have to start with the change of administration. It's hard to think of it at this point because there's been so many news cycles throughout 2025, but at the open of 2025, Joe, Biden was still president of the United States. And it wasn't until an extremely cold inauguration day that Donald J. Trump came back into office. Pretty soon out of the box, we had tariffs going out in a number of different directions. The first that involved U.S.-China relations was a 20% tariff on all Chinese goods that was tied to fentanyl. As, as you know, from conversations we've had, this is a problem near and dear to my heart, having lost my daughter to it in 2020.

but hundreds of thousands of other American families. So right out of the box, President Trump laid down a marker in that regard. But then we had Liberation Day as it came a little bit later in the year. And that was when tariffs went out across almost all directions, friend and foe alike. But tariffs with China went up to a theoretically impossible level of like 140 or 150 percent. And then we started having some meetings to negotiate things down. So really the beginning of the arc of 2025 had some economic tools in there, sort of a rebalancing and renegotiating with allies. The initial big meetings to the White House were Japan and India, and they were very, very well-received visits. And so you had some context setting around China but not yet direct dealing with China.

and then the president seemed to go really deep on things Russia and Ukraine, and then things with Gaza and the Israel situation. And the China and broader rebalancing sort of took a back seat to a kind of come full circle later in 2025. And he finally sits down face to face with Xi Jinping for the first time as he went to the APEC summit in Korea. and coming out of that, cut the fentanyl tariffs in half. There was sort of a plan put in place where he would visit China in 2026, so a little hit towards our look ahead. And the negotiations with friends seemed to settle down to a somewhat new normal, a little more stable with Japan. Korea was talked about as an ideal ally, which is an interesting,

having worked that account over the years. That is one that is a constant maintenance account from my experience, but if one was called ideal, I guess we can do that for a time. And the India relationship sort of has had some sweet and sour on it, but I think some unforced unpleasantness over the course of 2025. And so, yeah, that is not U.S. China, but it sure does have a lot to do with U.S. China. And I say the last punctuation point would be the notion of China's involvement in a lot of different areas, I think, kind of culminates with where we end the year. We have this standoff with Venezuela that can't really be seen in isolation, given that some of the oil that is being caught by this embargo actually is oil intended to go to China. And there are some other

influences of Venezuela beyond just the narco-trafficking concern. If we look at the protracted and unending war with Russia's invasion of Ukraine, China is one of the biggest financiers of that, and we sort of have not seen or heard the end of that. So that's how I would do my best at trying to squeeze all of 2025 into a Christmas stocking and try to tease what it looks like going around the bend. Yeah, no, that's excellent. Yeah, I would argue that President Trump, you know, pretty much put the kibosh on the idea that it was all about counter-narcotics with Venezuela, when he came out with that, with that social media posting, saying he was not letting up on Maduro until we get all the oil and land back that they stole from the U.S. I think that kind of

shifts the focus a little bit. Let me, let's do this. You can use either a number scale, one to ten, ten being amazing, or you can use a grade scale, letter grade scale. Give me a grade for how you believe the Trump administration has dealt with China over the 2025 year. Well, I'd be generally forgiving because they've tried and done a lot, but there are some of the areas where I have a really hard time swallowing. I'd probably give them more of the B range when it comes. to this. I'm sure that will incur some wrath in the golden age where nothing less than an A-plus

is acceptable. But I just put it at that because I think the rebalancing on economics was necessary, and that is a super, super important thing. It's incomplete, but I think it was really important to put that into play, and we'll see where all that goes. I think there was a late in the year arms sales package to Taiwan in the several billion-dollar range, which, kind of closes one of the loops that have been hanging out there of pressing our partners to do more and commit to spend more on their own, which they did, and then the U.S. having to get off of, I think, long delays

and delivering more, which it appears we may be doing. The fentanyl tariffs, I give them credit from making it a priority and putting pressure over it needed to go. I wasn't a super fan of cutting them in half. I'd rather see the progress and evidence in before pull. back, but going to 10%, and then, you know, if they don't follow through, going back to 20 and seeing where that goes, I can live with that. But then there's some things that have to do with export controls. I'm really not a fan of having relaxed some of the standards that Congress had

passed and urged, and I thought that core elements the administration were in favor of, and it seems like there's kind of an easing into more advanced chip sales to China that doesn't make a sense to me if we aim to win the AI and space race. Why are we selling increasingly more advanced things to our number one competitor in that race in my estimation? So that's where I give them a solid B. All right. Well, you know what? A, A B, frankly. I mean, look, C's to get degrees, right? I tell my boys schooner and sluggle and mugsie all the time that C students around the world. So, you know, B is pretty solid. I take your point. I think the White House would much prefer A plus. Yeah. But what you said about the advanced chip sales and their move regarding

Nvidia recently, I agree with you. Look, I've spent years talking about and dealing with the Chinese regimes, the Intel apparatus's efforts to hoover up all intellectual property and research and development. And every now and then I think that the Trump administration gets it. They understand and then they're serious about it. And then you get a move like this. So I'm not quite sure how to how to make sense of that. What do you think should be on our radar? This is going to be tough, I know. But if you had one item, one issue, one event, one concern to put on our radar screen going into 2026 in relation to China, what would it be? Well, I think it really comes down to the cemetery risk. And I say that, knowing that most normal humans aren't going to have any feel for this.

But when presidents get into dealmaking mode and they start visiting other countries and there's sort of almost just an inertia that we're going to tie every relationship into a bow so we all look good and we'll have great readouts of meetings and promises of progress. The darker forces of the world know how to play this game to a fairly well. And they can sort of get a whole bag of horse manure and sell it as if it's the nicest, brightest bow Christmas gifts you ever thought you got. or they'll just sell a whole box of nothing and pretend as if it was some kind of a big success, but there's no follow-through. And so with President Trump saying he plans to go to China in, say, April or so, then there's almost like this need to advertise deliverables. What would those deliverables be? Almost everything from the business community and from the Chinese side is going to be, well, shouldn't you walk back your support for?

Japan and Taiwan and all this effort that looks like you're containing China and shouldn't you ease even more of these tech concerns since we've promised that we're just going to have win-win outcomes together and would it be better if we did this G2 kind of world where we're solving the world's problems? There's just a huge risk of getting pulled into that rut. And that's what I worry about most. And that's the president's summit going to China in April. But then we host the G20, which I actually don't think should exist. Because any, G number more than single digits is a waste of time as far as I'm concerned. But we host that later in the year. And if we're going to have a big kumbaya gathering that's the new golden age

of summitry at the end of the year, same deal, same pressures. And that concerns me the most. Yeah, that's really interesting. I would argue that we've seen that in relation to the Gaza negotiations in relation to the Ukraine negotiations where sometimes it appears that the goal is just get a something on paper, right? Regardless to whether Hamas actually disarmed, right? Regardless of whether Putin actually cares about peace and has any interest in actual negotiations,

let's just get something on paper. Even if we have to give me a lot of territory to do it. So I take your point. I think it's I think that going into, well, you know what? You know what I'm going to do first? Because I got the the whole floor crew here waving signs at me saying that we've got to take a break.

Even the guys in the house band or, I think that my attention. So if you'll stay right where you are, we will take a quick break, and then we'll be back with more from Steve Yates here on the PDB Situation Report. Stick around. Hey, Mike Baker here. I want to take a moment to talk about security, specifically your online security. Now, here's the thing.

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All made with no artificial dyes. Try Welch's fruit snacks today. Welcome back to the BDB Situation Report. Joining us once again is a great friend of the show, Steve Yates, senior research fellow for China and national security policy at the Heritage Foundation. Steve, thank you very much for sticking around. Look, let's talk, if we could, let's talk military aggression on the part of China. What do you think 2026 will bring in relation to the Chinese-Taiwanese situation?

Well, we had some big developments over the course of 2025, and I just, I think the key test for 26 is, do these stay directionally the same, or is there sort of a pendulum swing? And the way I'd put it is, over the course of 2025, it wasn't because the United States came up with the next most brilliant memo or made the most attractive deal. Xi Jinping and his military folks and some quasi-military folks picked fights they didn't need to pick. And they sort of pushed the envelope with a lot of East Asia and Southeast Asia. So there's more solidarity in that first island chain. And what that means to normal America is from Japan down through Taiwan to the Philippines and into Southeast. Asia, there are more governments that regardless of what concerns or diplomacy that has been in play

from China and the U.S. in the past, they now sort of feel concerned that Chinese fishing boats, coast guard boats, and aggressive military vessels are encroaching upon them, even though they had very solicitous relations with China through a lot of this period. And so now it's not a question of what kind of offer can be put in place. They're investing more. They're working more to together, even if the U.S. isn't involved. And in some ways, I see that as a very positive development that Japan and the Philippines do more on their own without America having to do things. What it does for the Taiwan contingency and what the Prime Minister Japan's statement about this made very, very clear is there's no such thing as a Taiwan contingency that's

just a Chinese people on two sides of the straight matter only, or a U.S.-China negotiation only. There's nothing that a president of the United States can negotiate in a way if it goes against the Japanese national interest or the Philippine national interest. And so if this trend continues, I see less risk of that kind of a contingency coming around the 2027 timeframe. We may have bought some time. And we need that time because we need technology and the next revolution in military affairs to catch up so that maybe on less expense, we can make this first island chain less swallvable. by a more conventional military boom that China's experienced. So I see some trend lines that could move in a more positive direction, even though you're going to have constant friction and constant testing by China.

But the fundamentals could finally be getting somewhat better among that First Island chain membership. Yeah, it was remarkable how the Chinese foreign ministry, whomever in the regime there responded to Takeichi, the head of Japan's comments, saying that, you know, that from their perspective, the existence of Taiwan is sort of a survivability issue or, you know, an existential threat to Japan. And the immediate, harsh, aggressive response from China was really interesting. Well, it's worked for them for decades. I think the most novel part of it this time is that that horse is not selling anymore. And essentially, what the Prime Minister of Japan exposed was the proposition is, if China engages in extreme military aggression, that would raise the prospect of crossing the threshold where Japan's national interests are invoked and collective self-defense under their constitution would have to be considered. For some reason, China's leadership thought that was an unacceptably provocative notion, forgetting that they are the prime mover in that provocation scenario.

And most of the rest of the world seemed to get the joke this time because they've had these Coast Guard vessels ramming into other people's ships, the fire hoses blasting innocent people. And it's so far away from China and so far into the economic zones of these other people. other countries, the lie just isn't selling as well anymore. That to me was the happiest development in what is a somewhat scary scenario. Because in the past, they just talked like this and people just said, yep, yep, yep, yep, yep, and went on. Yeah. Yeah, that's really interesting. Also, to your point, about them not getting it, that they're the provocateur here, I don't think self-awareness and a sense of irony or really strong, you know, character traits for Xi Jinping or for that matter of Vladimir Putin or, you know, you'll pick any, you know, regime

strong man. So this is talked about all the time. And I know that in the Pentagon and the Intel community and elsewhere, it's being gamed out all the time. The very scenario of the small, you know, where is this going with Taiwan? So I'm going to ask you that question. Where is this going with Taiwan. Let's keep it confined to 2026. Well, 2026, the things we know where it's going is that Taiwan has a comprehensive civilian national resiliency program. Somewhat modeled after lessons they saw in Ukraine, but it's also sort of gaming out responses to natural disasters, which are conspicuously similar to how you would respond in a time of a military. attack, whether you have power outages, degradation of other kind of key services, having your civilians prepared for how to survive and respond in those times of crises, actually improves

deterrence, gives people confidence, and it changes somewhat the equation of China just threatening and maybe the political system cowing into submission, which has been kind of a risk that people who assess such things in the CIA and elsewhere around the world have always tried to try to figure out. The other thing is we are in the middle of something that I can't assess because I'm not smart enough, but the application of technology to defense systems is going gangbusters right now, and it makes it cheaper and faster to catch up. And if your aim is to thwart an invader, you have an advantage over this person who wants to take territory and hold it. That might actually change another part of this equation.

even just in 2026. But the key factor, I think, overall, is going to be, do we get our supply chains less dependent at a critical degree on China? Taiwan has moved farther and faster than others in this regard. But Japan, the United States, we still have a ways to go in this regard. So those rare earth's processing capabilities, getting a red-free supply chain, I think is a great-free supply chain, I think, is a critical variable for 2026. Yeah. I think that's a really good point. One of the things that I do very much like about the Trump administration is their focus on minimizing the regulatory pain of new permitting when we're talking about mining. I think at this point there's been enough of a focus or a spotlight put on it that I think the general public is starting to really understand.

understand the importance of this, but it seemed like for years that the goal was to just slow down any potential new mining operation to the degree where it just wasn't feasible, right? And now I think the administration is working extremely hard. I know some very good people in the interior and over an ag, and they're working very hard to try to responsibly completely minimize that permitting time, right? because, you know, we can't continue the way we are in terms of rare earth minerals, critical minerals. You can't say it's going to take you 10 years to put a shovel in the ground when you've got the potential for the Chinese regime to just lock it down. Anyway, look at me, I'm going to come off my soapbox now, but it was all accurate.

So, you know, people just take it. Yeah, there you go. Steve, I guess this is, you know, again, one of those hugely speculative questions. But Shijing-Finging, right? You'd have to go back to, you know, Deng Xiaoping or Mao or whatever to find somebody who has commanded as much control. Although you could argue he's getting some pushback. You could argue there's signs that perhaps he doesn't have the iron grip that, that we talk about here in the West. But from your perspective, you know, what's the duration of his

hold on power in China? Well, just in general, I would confess to having a depressing assessment about bad leaders, especially dictatorial-type leaders, always lingering longer than we want or think they should be able to do. I sort of stung by the intelligence community's broad-based assessment, not just ours, but everyone else is too, about the North Korean regime being at debt's door, and they're still around. And this was in the 1990s when it was just going to go away, and we were going to have an agreed framework that was okay to make some concessions because in a few short years, they're going to collapse, and we won't have to deliver on these promises.

I just sort of lost the ability to assume that these guys are going to die or get pushed aside. They're probably going to linger longer. and also say that Xi Jinping, in my assessment, has more control that any of the previous leaders had. I think he's more powerful than Mao was. I think he's much more powerful than Deng Xiaoping was. If you just look at his ability to kill off rivals or disappear them, it's unmatched. Mao had to struggle with that from time to time. He did have to shoot someone out of the sky when they tried to flee. And he had to go through a cultural revolution and some purges. But it wasn't a good look for them. and they went into grinding poverty.

Xi Jinping has held on with tenuous economic situation as, you know, property bubbles and other things burst. But really, no one capable of pushing him completely aside. You know, late Mao, there was a lot of doubt in that system. Deng Xiaoping had coalition management through his entire tenure, strong enough to clamp down when he had to. But he was making deals to buy time and let China's strength emerge. That was his fundamental strategy. She has presided over much less limited power. It's not perfectly unlimited.

But I don't see anything that changes that in the next several years, unless his health just drops out. Or there's sort of a bolt from the blue that you can't see or necessarily count on. I think, unfortunately, we're faded to deal with this direction, probably for the duration of the Trump administration. and maybe even through the early part of the next. Do you remember she and Putin walking along? I think they were on a hot mic talking about longevity. I know where you going. I don't have.

So, yeah, you're right. We could be looking at both of these cats being around 100 years. Yeah, yeah, man. Steve, look, I would love to continue this conversation, and we will in 2026. But for right now, we are out of time. I just want to say it's been a real delight having you on the show throughout the year, and I look forward to many more conversations coming into the new year. All right, that's all the time we have.

Situation Report, and as we wrap up 2025, my, wasn't it quite the year. All of us here at the President's Daily Brief want to thank each and every one of you for being part of the PDB community. I really mean that. We started this podcast book, very simply with the belief that folks, that includes you, just wanted the facts about major global events delivered in a straightforward and concise way, right, to be told what's happening without being told how to think about it. That's up to you. And millions of folks, I have to say, every month, well, they've agreed. We're honored to have

you tune in every day and spend a few minutes in the morning and afternoon with us. Thank you for that vote of confidence. And remember, if you have any questions or comments, please reach out to me at at thefirsttv.com. And of course, then listen to the podcast of the show ad-free. You can do that, just become a premium member of the President's Daily Brief by visiting PDB Premium.com. I'm Mike Baker, and until next year, well, that's just right around the quarter. I'll see you next week. Stay informed. Stay safe. Stay cool. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th,

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