The President's Daily Brief - PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning

Episode Date: March 8, 2025

In this episode of The PDB Situation Report: Donald Trump lays down the gauntlet, demanding that Hamas release all remaining hostages or face the full force of Israeli military power. With ceasefire talks stalled, what happens next? Jonathan Schanzer from the Foundation for Defense of Democracies joins us with his insight. Beijing fires back, warning that it’s ready for “any type of war” with the U.S. after President Trump reinstated tariffs on Chinese goods. How serious is the threat? Gordon Chang, author of Plan Red: China’s Project to Destroy America, joins us to break it all down. To listen to the show ad-free, become a pr 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 Beam: Visit https://ShopBeam.com/MIKE and use code MIKE for up to 40% off. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Let's get briefed. We'll start things off with President Trump laying down the gauntlet. I mean, not literally. That would be kind of odd, but demanding that Hamas release all remaining hostages or face the full force of Israeli military power. This ultimatum comes as ceasefire talks remain stalled. So, what happens next? Jonathan Chancer from the Foundation for Defense of Democracies joins us with his insight.

Plus, Beijing is hitting back, warning that it's ready for, quote, any type of war with the U.S. after President Trump reinstated tariffs on Chinese goods. How serious is the threat? Well, that's a good question. and we've got Gordon Chang, author of Plan Red, China's Project to Destroy America, here with us on the Situation Report, to break it all down. But first, today's PDB spotlight. President Trump isn't messing around.

There's no surprise there. He's telling Hamas that they have two choices, release all the remaining hostages now, or get ready for Israel to bring the hammer down. This comes as negotiations for a second phase of the ceasefire have hit a wall with, frankly, no deal in sight. Trump made his stance clear, posting to Truth Social, quote, Release all the hostages now, not later, and immediately return all of the dead bodies,

or it is over for you, end quote. He also blasted Hamas for keeping the remains of those they've killed, calling it sick and twisted. The ultimatum came just hours after it was revealed that his administration has been talking directly with Hamas. That's an unprecedented move. And reports say Israel wasn't even looped in on those talks. So, where does this all go from here? Jonathan Chancer from the Foundation for Defense of Democracies, he's here with us now to break it all down. Jonathan, thank you very much for joining us today.

Hey, my pleasure. There's a lot to talk about here. Let's start with what appears to be an ultimatum from President Trump to Hamas. What do you make of that? Well, it's interesting because we've been watching this play out. I think this is the fourth time that the president has issued an ultimatum to Hamas, threatening to unleash hell on them. Look, what he's already done is this. He's given the Israelis everything they need in order to completely destroy Hamas.

He's given them those 2,000-pound bombs, those MK84s. He's replenished a lot of the other arsenal that they had depleted over a course of time where the Biden administration was refusing to replenish. So the Israelis are made whole militarily. they now have the political backing of the president. The president says he wants to see all the hostages released and he wants Hamas out of the Gaza Strip. So right now there's very little else that the president could do to tip the scales in Israel's favor. What he has done, though, and we've just learned about this over the last 24 hours, is he has actually dispatched Steve Whitkoff and his team. This is the president's envoy to the Middle East. He's negotiating directly with

Hamas. I don't know what they're talking about. behind closed doors, but I think it's fascinating that he's talking to them with, you know, with one of his staff and then he's tweeting at them saying, I'm going to destroy you if you don't do what I ask you to do. So this is hardball. They were watching him play. I'll be fascinated to see what happens. I think Hamas is ready to fight this thing to the finish, but I think that would be disastrous for Gaza. I would welcome a Reagan-esque plan like we saw in Lebanon where, you know, Hamas is put on a boat or a plane, the top leaders are sent out of the Gaza Strip, never to be returned. That would be the ideal outcome. That way, Israel doesn't have to keep fighting,

and we can start to think about maybe what happens in Gaza when the fighting finally stops. Yeah, well, you would imagine that, you know, Qatar would be a logical destination for any of the remaining key leaders of Hamas to end up residing there. But you mentioned the direct negotiation I have between the U.S., I believe, of the hostage envoy, Adam Boller for the U.S. side, supposedly has been talking to Hamas directly about the U.S. hostages, but it sounds as if, at least, what's coming out of the White House, sounds as if they've broadened that discussion, a direct conversation with Hamas to include perhaps the other hostages as well as perhaps a peace settlement of some sort. What do you make of that? Because the U.S. policy,

has always been not to negotiate with terrorist organizations. Yeah, I mean, let's be real here. We've been negotiating with terrorists for a long time. I mean, we negotiated our own defeat in Afghanistan under Joe Biden, and, you know, we continue to negotiate with Iran, the world's largest state sponsor of terror. We don't, I mean, I think the United States has given up on this. This was a principle first introduced into American foreign policy under Richard Nixon.

It, I think, held for a time, has not held for quite a long time since. I mean, we have indirect negotiations with his Bala that are ongoing. I mean, we don't hold ourselves to this. I think it's interesting that the conversations are happening, but the only thing that I would say that it's positive about this is that it does look like, again, that the president's playing hardball, you know, with his envoys. And I think that's really, if you're going to negotiate with the terrorist group, you should be bearing your teeth and threatening to destroy them.

that's the kind of negotiation I can endorse. But is there a danger that, I mean, you pointed out this was not the first ultimatum from the White House, is there a danger that it's just perceived as hollow by Hamas and certainly by the Iranian regime that backs them? Yeah, there certainly is a danger. And I think, you know, we may have actually reached that point where Hamas is saying, you already gave the Israelis what you said you were going to give them. I've already seen your threats. not sure what else you can do to us because we're effectively destroyed anyway.

So you know what? We're going to go back to the fighting just to stick a finger in your eye. And that's actually quite possible. But I got to say, like I said, the Israelis have everything they need in order to win this battle. I will warn, though, that whatever fighting does take place in Gaza, it will not be easy to watch. Because when you think about it, Amos is already, I mean, they started, let's say, 35,000, fighters, between 5 and 10,000. Most of these guys are new recruits. They're young men in tracksuits who probably don't even know out of fire their AK-47s properly. They are not

hard in fighters. They're going to get shellacked on the battlefield. I think that is fairly safe to say. The Hamas doesn't have any above-ground infrastructure. Most of that underground infrastructure is not usable. Sure, they probably have some missiles left, some rockets. None of those are going to be particularly effective against Iron Dome. I just don't see how they think they're going to win this thing. You get a sense that they're willing to fight and die for the cause and maybe try to inspire future generations of hatred against Israel, the United States, the West. That may be their strategy, but this could be rather grim to watch.

Well, I also perhaps they imagine that, look, I mean, you say the fighters are going to take a shal. lacking, obviously the civilian population there in Gaza, you know, is also in the firing line, given how Hamas is embedded amongst them. But, you know, perhaps they look at it and go, okay, I don't think Israel can withstand the pressure from the international community if they take this even further than has been taken. Look, 90% of the Palestinian population, what's that, you know, total of 2.3 million or so individuals, 90% have been displaced reportedly. So, you know, perhaps Hamas is looking at this and thinking, you know, we have the international community on our side, right? So maybe they feel as if that's their leverage. I don't know.

I'm throwing that in a strange form of a question to you. Yeah. I mean, look, that may be their that was part of their play before, right? They mean, the Hamas strategy was, I think, twofold. One was to try to draw in the rest of the Iranian axis. So get Iran and the militias in Syria, the militias in Iraq, His Bala, the Houthis, get everybody fighting and, you know, in their mind, you know, destroy Israel. That obviously didn't happen. We saw a lack of unity, a lack of discipline, a lack of planning. So that failed. So you got a chance that maybe they could try it again with whatever fronts are left, although most of those are weakened proxies of Iran and probably have less of a stomach right now than they did the last time around. Then you get to

the question is you raise of, you know, trying to, you know, wield public opinion, international opinion against Israel. I'm not sure right now that it would work as well. I'm sure you're going to have bleeding hard liberals from Europe, you know, just, you know, joining the bandwagon of slamming Israel and working with the UN. But the big difference maker right now is the Biden administration, you know, was at least buying some of it. or they weren't rejecting all of it. Trump is not going to have any of it right now. I think he's made it clear that he doesn't place any stock in the UN.

He doesn't have a particularly good relationship with the Europeans right now. That's, of course, largely due to what's been going on in Ukraine and Russia. But, you know, the idea that Trump would care about what any of these actors might say, or that Israel's long stopped caring about this, you just get a sense that this war continues. you know, in accordance with Israel's plans. And I think that's what I would expect right now. There are, of course, unintended consequences with any war. And I would say Israel still needs to watch for a combined attack by some of these proxies that we've talked about, maybe even Iran itself. That's a danger. Maybe there's some other surprises that come out here. But again, I would say that if you look at things

on balance. Israel came out stronger at the end of this first phase of the fighting, right, ending sometime in January. And they have only, I think, gotten stronger since Trump came in. And I think the Iranian axis looks weaker. I can't imagine Hamas is looking on and saying, yeah, we got this. Yeah. From your perspective, to what degree is Khamas acting with autonomy, right? And to what degree do you think that they're taking their direction, strategic planning from the Iranian regime? So it's an interesting question because, you know, the way that Amos always worked is that you had these, you know, sure councils where different leaders from different parts of the Middle East were weighing in and they were kind of almost democratic. I don't want to take that bar, right? But, you know, they have, you know, they have leaders. in Gaza. They have leaders in the West Bank, in Lebanon, in Iran, in Turkey, in Malaysia, you know, in all these different places and they would all weigh in on, you know, on particular

issues, major decisions undertaken by the terrorist organization. On October 7th, it really does appear that it was Yahyaz Sinwar, the head of Hamas, the guy that hatched this plan in the first place and launched it. He was the guy who was driving all of this. And then once the war be again, he was the guy that was making all the decisions because at the end of the day, if he didn't want to stop fighting, he wasn't going to stop fighting. If he wanted to keep going, he was going to keep going. Today, the guy that's making those decisions is his brother, Mohammed Sinwar. And he still has, I think, a great deal of control of whatever is left of the Hamas fighting force. I don't expect him to last very long, but I do think that the center of gravity

remains in Gaza primarily. I do think that Iran has a lot to say about this, but how much communication they're able to have with the fighting force, that's an open question. These are the sorts of things that, you know, I question right now, and I don't really know how to answer. The other part of this equation is the Qataris. And I do think that there, the Qataris are running interference for Hamas. They're the ones who are saying that certain, you know, proposals are unacceptable. even if they're not even sharing them with the Hamas operatives that are there. And I actually think that it's for this reason, among many others, that the U.S., when this crisis is over, we need to have a serious accounting of whether we want to continue to treat Qatar as an ally.

I think we should strip them of their major non-NATO status. I think we should consider removing the Al-U-Dade airbase from Doha, it's our largest airbase in the Middle East. Yeah. I just don't think this is a regime we can trust because I think they're trying to tip the scales in favor of Hamas through these negotiations. Yeah, I take your point. It's a fascinating direction that we could go. I would also perhaps, you know, counter that with, we deal with a number of countries that play both sides of the equation. And that's just, you know, unfortunately the way

the world works, I guess, but I take your point. I don't know that we'd ever get to the point of moving that military facility out of Qatar. But it's a fascinating thought that you bring up. Listen, there's a lot more here to cover, but you may know that we have some terrific sponsors. We're going to take a break right now. Jonathan to hear from them, don't go anywhere. We'll have more with Jonathan Chancer from the Foundation for the Defense of Democracies coming up on the Situation Report. Hey, Mike Baker here. Let me talk to you a little bit about something that's very important, and that would be sleep.

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The outdoor cam plus protects your yard at night with a wide field of view and clearer retinal 2K video. Or upgrade to 4K cameras and doorbells with retinal vision for ultra-clear zoom in detail. Your door, your yard, your home. With Ring, it's protected. Shop cameras, doorbells, and more at ring.com now. Joining me once again is the executive director of the Foundation for the Events of Democracy's Jonathan. Jonathan Schanzer. Jonathan, you raised a really interesting question about the future of U.S. relations with Qatar after perhaps there's a settlement related to the Israel-Kamass conflict. But I want to switch gears right now, and even though Qatar is actually still involved in this next question, obviously President Trump had proposed a plan, a reconstruction plan for Gaza. And the key component of that was, relocate the population of Gaza and then spend 10 to 15 years or so rebuilding the enclave into

essentially a Middle East Riviera. Now, the Arab states right off the bat said, not going to happen. And then they met, had a summit, proposed a plan, and President Trump turned around and said that plan, meaning from the Arab states, not going to happen. So where do we stand with this? How do you interpret what the Arab states came up with as their proposal. And where do you think this is going? Well, look, at first, let's just acknowledge that the president's Gaza Lago plan was not a plan. I mean, it was an idea. Wait a second. That's fantastic. I'm sorry for interrupting. Did you say Gaza Lago? That's what I said. You should patent that. If that's your trade market immediately, you have my support. Okay. All right. As soon as soon as

were done here, I'm going to go send it in. But yeah, you know, I mean, Gazzalago was not a plan. It was a notion, if that, right? Definitely not even a full big idea. But here's what it was. It was the president tore a page out of his own book, The Art of the Deal. You throw an idea at the other side that is just preposterous, that they can't accept, that you know they're not going to accept. And they get outraged. And then finally, when they're done being outreach, they come back to you with something that's maybe a little bit more. line with reasonable, whereas before maybe they weren't even ready to talk at all. And so what's just happened is we started actually the real conversation. The real conversation is that the

Arabs came back and made a suggestion of a five-year process in Gaza, $53 billion fronted by the Arabs. Here's the thing that's not realistic. All of this so far is workable, but what they won't do is decide on the fate of Hamas. No Arab country right now wants to go as far as to say Hamas needs to go. They can't come back. We have to kick them out and never let them return. But why is that? Why are none of the Arab nations willing to come out and say that? None of them are profiles and courage. I mean, just put it that way first. Very few of these countries are going to come out independently and promote ideas that we would consider to be bold, courageous, brave. Look, there are a couple countries that have stepped out of line. You know,

the UAE, Bahrain, Morocco, I think they took bold and courageous steps back in 2000 when they signed the Abraham Accords with Israel. You know, in the past, Jordan had its moment, Egypt had its moment. But most of these countries are weak. They're run by strong men who don't want to risk angering their populations, nor do they want to risk getting into a spat with. if the Iranian regime, if the regime there decides to start turning its sights on these somewhat weaker Arab regimes. So yeah, you're not going to see a lot of bravery from these folks. These are not profiles in courage. But again, I think that this has started a conversation. I think it's important that Trump and Israel and everybody else fireback and say, hey, thanks for

starting the conversation. That's not good enough. Here's why. Come back to us when you're serious about dealing with Hamas because that's a serious problem that needs to get dealt with. Yeah, I think, you know, you raised a really interesting point, which I think sometimes people overlook, right? Because there's, there's so much going on around Trump and around the Trump White House. And there's, you know, every day, it's a new movie, right? And something's being thrown out there. And I think when he came out with, I'm going to use your phrase, Gazalago, it just rolls off the tongue, doesn't it? Then I think people said, what, you know, what is he talking about? You know, this is crazy. But to your point, it generates conversation.

It generates movement, right? Action. And so you're absolutely right. Almost immediately after that, we had the Saudis and others calling for a summit to get the Arab states together to say, now what? Look at this. We can't let this stay on the table. So how do we respond? And that can create dialogue that we haven't seen in decades, right, around this problem of Gaza. So I think you've raised a very important point. Yeah. And look, I'll just say that, you know, I think the president keeps doing this, right? Yeah, you know, he's created quite a flap with Ukraine too, came out, shocked everybody by basically saying, you know, not going to deal with this guy. He's not ready per piece. You know, and what he did is he forced Zelensky to come back and agree to a mineral deal that might

actually ultimately protect the territorial integrity of Ukraine, benefit the United States, and put us in a different position. Now, I'm not going to tell you that it's all going to work out perfectly, and I'm not going to tell you that he had it all planned in advance. Maybe he did, maybe he didn't. But this is kind of the way that this president operates. He'll throw something out there. He will create outrage. He will create a huge flap. And everybody focuses on what exactly that one thing was that they can't stand or they can't live with. And meanwhile, another conversation begins that actually may be beneficial. Now, it all can still fall apart. And again, I'm not telling you that all this was done exactly by design, but this is the style of the president.

That's what we're watching now on multiple fronts. Yeah, well, it's causing a lot of heads to explode in Washington, D.C. There's no doubt about that, right? Because there's a fair element that would just like to keep things sort of in this status quo, you know, the way that Washington moves, sort of that inertia. and certainly from a geopolitical perspective, right? You know, there's just this reluctance for change. So when it's happening at this current speed, I think it creates a lot of angst, but there's unexpected sometimes beneficial consequences. And you're right.

Sometimes, you know, it may head south, but you don't know. And so I think there's a lot of folks out there that actually, while they may be somewhat confused over strategy at times, they can appreciate whatever you want to call it, sort of the disruptive nature of it that could generate something different and better. And certainly with Gaza, look, we've been kicking this can down the road for generations. Now, talk to me about this idea. I know that, you know, it's just an idea that was thrown at the wall, but the idea of relocating 2.3 million Palestinians, it does raise an interesting question, which is the reluctance of, let's say, Egypt, to take in refugees. I mean, talk to me about that relationship.

Sure. Well, look, there's two countries that have been pressured to consider taking in refugees. One of them is Jordan. And I've got to tell you, I'm not surprised that Jordan said no, and I am not sure that I would want Jordan to say, yes. This is a pivotal country in the region. I don't love everything that they do, and I think a reckoning is needed between Israel and Jordan and the United States, because I don't think Jordan's been a particularly grateful recipient of American aid, and I don't think they've held up their end of the bargain as it relates to Israeli Jordanian peace. But they're 85% Palestinian, and they also have another one to two million Syrian refugees. This is not a country that can afford to have more destabilization and to have a greater influx of refugees.

That's Jordan. Now, Egypt is another story. It's one of the most populous countries on Earth, but at the same time, here's a thing. The Sinai Peninsula, which is the area that abuts the Gaza Strip, not very densely populated, certainly could be a place that could house Palestinians, especially if other countries like the UAE or Saudi Arabia or even the U.S. helped to foot the bill, kept them there, didn't let them integrate into mainland Egypt, and treated them like welcome guests and allowed them to stay there until such a time that the Gaza Strip was ready to be repopulated. I could imagine that being okay.

What we're hearing, though, from the Egyptians is absolutely no way, no way this happens, no circumstance whatsoever. And a lot of that is just, this is sclerotic Arab world thinking dating back to the 1950s where every Arab state basically said, we are not taking in Palestinians, we want them to stay where they are, even if it means that they stay there in misery, to make them living symbols of the Arab world's opposition to Israel. This is some seriously demented thinking that has brought us inexorably to where we are today. In other words, it kept the entire region on a war footing because they insisted on keeping this

misery at a high level. This has to end, and I actually thank the Egypt. should play a role here. I think you mentioned before, the Qatari should take in some of these refugees. I think the Turks, who are also sponsors of Hamas, they should take in refugees. The Iranians should. The Malaysians should. Every one of these patrons of Hamas should be forced to take in, I don't know, a half million, a quarter million, whatever it is, to pay penance for the war that they helped to create. But from a practical standpoint, do you see that happening? Or, Do you see a plan developing more along the lines of what the Arab nations are talking about, which is keep the Palestinians in place?

Obviously, they're still focused on this two-state solution. Do you think that's where this is headed? I think it's where the Arabs wanted to head. Maybe the Israelis have another idea. I think Trump doesn't really care which one prevails as long as a deal gets done. And so let's see. Let's see what kinds of creativity gets, you know, kind of injected into the equation here. And I do think creativity is going to be what's important.

The Arabs are not terribly creative here. I think Trump is more than happy to be creative. The Israelis just don't want to be saddled with this burden alone. They don't want to pay for this. And they certainly don't want to allow for Hamas to stay. I think it would be fine with letting all these other people stay as long as they, you know, they're not culpable, that they're not responsive. for what happens to them, and as long as things get rebuilt in such a way that keeps Israel safe for whatever happens next. And I think that's, you got to understand, that's Israel's

big motivator here. This isn't, it's never been about collective punishment. It's never been about anything other than getting Hamas out of there so that Israel knows that it can live peacefully without worrying about thousands of rockets or, you know, thousands of murderers coming across the border and slaughtering citizens you were going to a, you know, to a rock concert. Yeah. Yeah. And then, but I mean, obviously that raises then the big question, which is kind of looming over all of this is, is what do we do as far as governance of the area afterwards? But let me wrap up with this. This is going to be an impossible question and answer. So, wait, that's why I'm asking you, during the course of this month, yes or no, Israel gives up on

the peace process and goes back on a war footing with Hamas. You know, it's actually pretty simple. The Israelis have offered six weeks of additional calm. They basically said, look, we just started Ramadan. You want quiet. You want food. You want medicine. You want, you know, all the things that you want to keep your population happy. We want that too. Just keep quiet. And then after that, give us two more weeks of quiet until the end of Passover. That's what they told Hamas. Now, the big question now in my mind is, does Hamas agree? Because Israel's ready. If it needs to, it'll go back into Gaza and it can start fighting this war again. And they're ready to do it now because they're not ready to go to phase two of a hostage deal, at least as it was written, because that

would mean leaving Hamas in place. That is something that, I mean, this government in Israel will not abide by that. There is no chance that Bibi Netanyahu will agree to that. So they offered something else, that plan, that extra six weeks, Trump, Whitkoff and others, they're behind it now. That means that everything's aligned. The only thing that's out of alignment right now is Hamas itself. And that I think has a lot to do with the pressure that we just saw the president put on the group. He's threatening hell if they, you know, if they don't work with the system that he's created. And I think actually, you know, that leverage may yet work. It won't, it won't solve for the war. long term, at least not yet, but it might buy us another six weeks of quiet, calm,

and maybe during that time we can see some additional plans come into place, more negotiations that might take things in a better direction. All right. Well, listen, I'd take another hour or two talking with you about this problem, but we are out of time. Jonathan Chansler, great conversation, despite my involvement. foundation for the defensive democracies. I want to tell you, thank you very much for joining us, and I look forward to the next conversation, man. My pleasure, and you can feel free to sell that Gazelago T-shirt.

That's all you. Are you kidding me, Berkusie's hats? You know, we got some swag coming your way. All right, man. Talk soon. Take care. All right. Coming up next, Beijing isn't backing down.

Well, I guess that's not a surprise. after President Trump slapped new tariffs on Chinese goods, the Chinese government fired back, saying it's ready for, quote, any type of war with the U.S. Gordon Chang, good friend of the show, author of Plan Red, China's Project to Destroy America, a terrific book you should have it on your bookshelf, joins us to break it all down. Stay right there. This is Euphoria Calvin Klein, the new elixir collection,

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to alleviate the pickation of the eyes for allergy, actua more rapidly and super a clarity of flownays at 1 at 24 hours. Paradee. Adelante. Welcome back to the PDB situation report. President Trump is cranking up the pressure on China, or he's ratcheting it up.

He's increasing. Let's go with all those. Hitting Beijing with another round of tariffs. As of Tuesday, an additional 10% tariff on Chinese imports took effect, bringing the total tariffs imposed in just a month to 20%. And now, well, China's firing back. In a post on X, the Chinese embassy in the U.S. made it clear that they're not backing down, saying, quote, if war is what the U.S. wants, be it a tariff war, a trade war, or any other type of war,

we're ready to fight till the end, end quote. That's what we could call ominous. China also dismissed the White House's claim that these tariffs are tied to fentanyl production, calling it a flimsy excuse. So, is this just tough talk, or are we on the verge of a real economic battle or something else? Well, Gordon Jang, author of Plan Red, China's Project to Destroy America, and that's a book you should have on your bookshelf, joins us now to help explain. Gordon, thanks very much for joining us again on the Situation Report. I've got to go to the top line here, not to be sensational about it, but the quote from the Chinese embassy

that if the U.S. wants war, be it a tariff or trade war or any type of war, then they're down for the fight. What do you make of that? I think the Chinese regime is a little unhinged, because the rhetoric certainly is not justified by what's occurring today. And I think it reflects a couple things. I think, first of all, the Chinese are just enraged that President Trump is not deferring to them. For millennia, Chinese diplomacy has been intimidation of others, and Xi Jinping has been particularly good at it, and probably Trump right now has just said he's had enough. But the other thing is that these tariffs do pose a danger to the Chinese economy. Xi Jinping has turned

us back on consumption as the basis of the Chinese economy. That means his only way out is to export. And Trump, it's not just Trump's tariffs. When Trump does this, he's giving, and inspiration to others. He's giving them cover to others to do the same thing. So I think that the Chinese are panicking in addition to just being so upset that we're not bowing down to them. No, if they're so reliant on exports, do you think that's an indication that they're just going to eat the costs? I mean, because there's obviously this talk about, well, you know, what are these tariffs going to mean for the pocketbooks of Americans if people still carry pocketbooks? Let's go with wallets. I don't know what am I in the 1920s.

So, but do you think that, you know, if that's the case, that they're going to do everything possible, you know, to try to prevent a letdown in exports? That's a great question. Because if we go back to 2018, when President Trump imposed his Section 301 tariffs on China, 25% across the board, China absorbed somewhere between 75% to 81% of the cost of those tariffs. And now China has even more incentive to do that. The only thing is that China right now might have less flexibility to do that for various reasons, technical ones related to the currency. But the point is a good one. And I think China will absorb a majority of the cost.

It's going to hurt them, but I think they're going to do it because they have no choice. It's going to move from, because the tariffs, I think it's an interesting topic, but I think it confuses a lot of people. I mean, they've just now said, we're going to delay. the tariffs on Mexico and Canada, have you heard anything about that possibly being a case for China as well in terms of maybe backing off of this what now is essentially 20% tariffs? Canada and Mexico present a very different situation than China. And Trump did not back off on the China tariffs. He imposed two rounds of 10% across the board tariffs. He didn't blink.

With Canada and Mexico, there are reasons to just deal with them in a different way. There are neighbors, they're friends. We have an integrated economy with them. And a lot of people think that Trump is trying to sort of isolate China. Well, to do that, you need to have both Ottawa and Mexico City on board. You need their help. So I think there's a lot going on here that is more complex with regard to the Canadian of Mexican tariffs, which President Trump has delayed.

Have you seen any indications? Because, I mean, again, we mentioned at the top of this, but that the tariffs for China, anyway, there's a direct link to their failure to act on the fentanyl crisis. Let's even go with since the election that they've changed policy or that there's been any improvement in their efforts against the fentanyl crisis? There's no indication that the Chinese have improved on fentanyl. You know, it was very interesting today that the Chinese government put out a timeline of all the fentanyl control measures that they've put in place over the years, but they've just gotten worse.

Xi Jinping has violated promises to three American presidents now about fentanyl. As President Biden in 2023, President Trump in 2018, and President Obama in 2016. So, you know, when the Chinese say, well, you shouldn't be imposing. cost on us, you should just be trying to talk to us with mutual respect. Well, we've tried that now, and it hasn't worked. So President Trump did the only thing that he could do, which was to go after China for killing basically 70,000 Americans a year. Do you anticipate, I don't know how you would even describe it, do you anticipate a long-term trade war with China? I mean, if both sides are retreating to their corners and looking as if they're not going to back down, where do you think

this is heading? I think that we're going to see more trade turbulence, and the reason is that it's not just fentanyl. It's also predatory and criminal trade practices, especially the theft of U.S. intellectual property. And I think Trump also knows that he's got the upper pant. Remember, the Chinese economy is less than two-thirds a size of ours. And especially if you were to look at the Chinese economy and its real estate because they exaggerate their gross domestic product numbers. It's even smaller than that. But the other thing is that China is the trade surplus country. Last year, its merchandise trade surplus against the U.S. was $295.4 billion. Trade surplus countries have no ammunition in trade wars. Trump knows that. So China's only hope is

to try to convince parts of the American public to work on Trump. But if that doesn't work, and I don't think it will. Trump is going to hit these guys, as he should. I had no question about it. Well, if that's the case, then from Xi Jinping's perspective, right? And well, let me ask you, let me ask this question. I want to focus on the Chinese economy, but let's go with this first. What do you consider to be the weakest link in the Chinese economy? It's probably the property sector, which is completely overbuilt. In September 2023, a former senior statistics official in a public forum said that China had enough vacant apartments for 1.4 billion people, but he admitted he might be wrong and the number of vacant apartments be sufficient for 3 billion people.

There's just no way to get out of that in the near future. It's just a question of supply and demand, which although China exercises a lot of control over the economy, supply and demand still works in China. So that's probably their weakest link. But there are a lot of other weak links, Mike. All right. Well, I guess we don't need to list them all. But I guess what I'm looking for is, you know, you pointed out that Mexico and Canada are completely different cases. We're talking about as far as the tariffs go.

and I would also argue that their responses, their strategic thinking is going to be entirely different. So I'm trying to get a sense from you as to how Xi Jinping responds to all of this, right? Is there any chance that he'll say, well, okay, you know, Trump's not putting up with this anymore. So I'm going to have to change my direction. I'm going to change my strategic thinking. is that a possibility? I mean, does he have the ability to change, I guess, is what I'm asking. I think he has less ability to change that he once did.

I don't think he's the all-powerful supremo that he was, let's say, four or five years ago. And we're seeing signs in the Chinese political system of real instability. So, for instance, at the top of the Chinese military, the People's Liberation Army propaganda organs are now praising what they call, quote, collective leadership. That is a direct challenge to Xi Jinping. And that means that a lot of the turmoil that we see in the upper ranks of the military, this could very well be the thows of Xi Jinping actually purging Xi Jinping's people. We don't know that yet because there's a lot of, it's obscure.

But the point is, these things don't happen in periods where Siegimpin's, would be the supreme leader. So I'm not sure he has that same sort of strategic autonomy that he did when China was obviously successful and he was getting all the credit for it. Okay. Interesting. Gordon, I've got a, well, I'll show you the list of questions that I've got, but it's lengthy. But we've got to take a quick break. And then we'll be right back with Gordon Chang here on the Situation Report. Stick around. Make Mother's Day even more special at Whole Foods Market. Kick off brunch or dinner with quality cheese and charkootery with no synthetic nitrates. Then go seafood. There's

an abundance on sale at Whole Foods Market, where it's all sustainable while caught are responsibly farmed. At the bakery, grab seasonal treats like their strawberry pretzel cream pie, and you can't go wrong with a ready-to-heathe Kish Lorraine, Deviled Eggs, and fresh-cut fruits to go. Celebrate Mom with Whole Foods Market. Welcome back to the Situation Report. Joining me once again is Gordon Chang, of Plan Red, China's project to destroy America. If you don't have that one on your bookshelf, then go out to your bookstore, if there's still a bookstore

near you, and pick it up. Gordon, thanks very much for sticking around. I want to change gears a little bit here. We're still talking about China, but we had some news develop over this past week about the Panama Canal.

Talk to me about the developments there. Well, two developments since Marco Rubio, there on his first trip as Secretary of State. First of all, the Panamanian president, Molino, said that he would not renew his Belt and Road memorandum with China, that he might even cancel the existing one. But the news this week is that BlackRock, the American financials asset manager, biggest in the world, by the way, is buying and taking over two Chinese port operations in the canal from C.K. Hutchison, which is the mega port operator around the world

in Hong Kong, subject to Chinese rule. Those are the ports at Balboa on the Pacific side of the canal and at Christobal on the Atlantic side. And these are the two port operations that have attracted a lot of attention because they could be easily turned into Chinese military bases when Beijing gives the order. So that is stunning news. It means that China is being muscled out of the canal zone, which is great because China still can block the canal, but it's losing its bases to do that. There are other Chinese operations in the canal zone. We need to get rid of those as well. But this is a very good sign. And it means that in other countries that are getting sick and tired of China, they'll be inspired to do the same thing. So with a little pressure from President Trump, we can do it.

Yeah, it's interesting. I think, correct me if I'm wrong, I think this is the first country, at least in Latin America, to put the brakes on that Belt and Road initiative and even voice the idea perhaps that they're just going to renege and back out. Yeah, I think it is actually in Latin America, for sure. We've had some problems with some of the other Chinese ports, but generally Beijing has been able to negotiate its way around them, most clearly in Sri Lanka. But yeah, this is really terrific news because this could be the beginning of not just a trend

in Latin America, but around the world as well. Yeah, I think it's fascinating because President Trump, you know, obviously made headlines by talking about the Panama Canal, right, and talking about how it's important to national security, how that we gave it to Panama, we didn't give it to China, and that he was taking it back. and that of course, you know, created a buzz and, you know, a lot of people reacted as sort of the way they always do, you know, they're just saying, ah, he's crazy, what is he talking about? That's ridiculous. And then, right, it's like he throws something at the wall and the next thing you know, it generates, you know, movement over here that people weren't expecting. And like you said, we've got this consortium, you know, led by Black Rock to buy this back. C.K. Hutchinson is a very interesting company. And you made a brief comment about it, you know, based out of Hong Kong, but subject to the CCP's control, to what degree? I mean, talk to me about that if you could. Yeah.

In the People's Republic, no entity, no person can ignore or disobey an order from the Communist Party. And that's also true of Hong Kong. You know, Hong Kong was supposed to be autonomous, supposed to have one country, two systems for 50 years. But that ended in 2020 with China adopting the national security law for Hong Kong, which meant essentially full Chinese control of Hong Kong. And so, you know, we had to assume from a national security point of view that C.K. Hutchison would close the port, the canal zone, if given an order to do that. And clearly, the Chinese military and Chinese operatives, Ministry of State Security,

We're based in the canal zone, probably at those two port operations. So it's really important to get them back. And it's important to continue to eject China from the canal zone because there's still a dozen ways that China can block that canal. Right. And also just in terms of their surveillance capabilities, right? I mean, it's very good intel to understand ship movements. It's very good intel to understand cargo allocations.

movement. So yeah, I'm 100% on board with you. I think it's a brilliant move. And again, it's one of those fascinating moments where certainly, you know, the political opposition, the Democrats in the U.S., looked at that and thought, that's insane. Why would you say we're taking it back? And then you have this move. And that it just seems to happen on a somewhat regular basis now. And so maybe at some point people will understand that, you know, President Trump does have sort of a method to what they perceive as madness. Now, we were talking about ships. Let's talk about shipbuilding, right, because there's also been some news about that.

I understand that the U.S. is going to make shipbuilding great again. Yes, and President Trump has opened up an office of shipbuilding in the White House itself, which shows you that it is a priority. The American shipbuilding has withered away. And there are a couple of things that President Trump has done. So, for instance, go back a week, the U.S. trade representative announced that it was imposing million-dollar plus fees on Chinese built ships and Chinese-owned ships that entered U.S. ports. That gives all sorts of people incentives to build ships elsewhere, and that's a good thing to get

it out of the People's Republic of China. but it also incentives for American shipbuilding. And we need to do this, not just for the Navy, which is woefully doesn't have the shipbuilding capacity anymore, but also just regular commercial ships, which are really important. It's the lifeblood of trade. So this is, again, great news. Yeah, China, again, correct me if I'm wrong, and you always do because, you know, okay, maybe I'm wrong on occasion.

But China is the leader globally in shipbuilding. Is that correct? By far. By far. They're well ahead of South Korea, which I think is in second place. But China makes something, and correct me if I'm wrong, something like over 50% of the world's ships. Look at us. Look at us just correcting each other like this.

It's just the back and forth. You're right. South Korea is in number two position. I read that the U.S. is down that list is sort of, I think it's in 15th place in terms of shipbuilding. That I don't know, Mike, but if you said 15th, I would say that's really high. Would have been my guest even lower than that. But, you know, one other thing, South Korea, which is a U.S. treaty ally, is going through a political

crisis. And it's not inconceivable that within three months they could have a basically, a communist as president. This is really serious stuff. So that means number one and number two shipbuilder would basically be in Beijing's orbit. What's the potential for that? I know this is a bit of a detour for us in terms of our topics, but what's the potential for that sort of political sea change in South Korea? It's really high. About a month or two ago, it would have been close to 90%. Fortunately, things are moving in a much better direction. What happened is President Yun Sukyo, a conservative-leaning figure, declared martial law on December 3. He was impeached

by the National Assembly on, I think, the 14th. The Constitutional Court decides this month, and maybe in the next week, whether to remove him or not. If he's removed, there's 60 days for another election. Now, Yun was really unpopular even before martial law. He had an approval rating below 20%. Now, because the leftists have overreached, his approval rating is at least in the 40s and in some polls over 50%. So even if he is removed, there's a real possibility that another conservative could be elected. But we know the leftists control the electoral, the National Election Commission. They've been rigging elections since at least 2020, which means no matter what the South Korean people, how they vote, is probably going to get a leftist as a president. And the

leftist candidate is pro-China, pro-North Korea. He might even be a communist himself. If he's not, he's very close to it. This is really, really very dangerous for us. I tell you what, that opens up the next question, which is I hope you'll come back in the course of the between now, obviously, and three months from now sooner rather than later so we can talk about this because that is that that would be a seismic change in the region and certainly in a geopolitical standpoint. So Gordon, as always, listen, thank you very much for taking the time to sit down with us. Gordon Chang, author, incredibly smart guy, man about town. Hopefully we'll see you back here very soon. Yeah, and often corrected by Mike Baker. So, yeah, thanks very much.

I would not, you know what, I would keep that off your resume. I don't think you want to put that anywhere on that CV. All right. Thanks so much, Gordon. I'll see you soon. All right, well, that is all the time we have for this week's PDB situation report. Now, if you have any questions or comments, polite suggestions maybe, please reach out to me at PDB at thefirsttv.com.

Look, the highlight of every week, I've told you about this before, but the highlight for us at the PDB headquarters, which is located in a secret compound underneath a volcano, is when the mailman, who somehow finds us, drops off another sack of mail and postcards and faxes and telegrams. And every month, our amazing team gathers up the best of those questions and comments, and we mush them into what we call an episode of Ask Me Anything. All right? So what I mean by all of that is keep your cards and letters coming. Finally, to listen to the podcast of this show Ad-free, which you can do, just become a premium member of the President's Daily Brief by visiting PDB Premium.com. I'm Mike Bakers, and until next time, stay informed, stay safe, stay cool.

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