Bloomberg Audio Studios, podcasts, radio news. Tonight, so Russian explosive drones slamming into.
Now to Israel issuing new evacuation orders in Gaza. Dozens of Palestinians were killed by Israeli fire as it waited for food in northern Gaza. With I am now striking back, hiking tariffs on US goods arriving in China to one hundred and twenty five percent, and tonight here American farmers worry that China will now turn elsewhere.
I think that it's the most and many respects, the most perilous time since the late forties, maybe ever.
Robert Gates has had a storied career in national security.
Of the eight presidents I worked for, five were Republicans, three were Democrats. Ironically, my career was bookended by two Democrats, Lyndon Johnson and Barack Obama.
Over many decades of public service, Gates served as Secretary of Defense for two presidents consecutively and as the director of the CIA. And Since Gates left government in twenty eleven, he has remained influential as an author and as an advisor. Then President Electrump sought Gates's Council before he started his first term and today Gates runs a strategic consulting firm with President George W. Bush's Secretary of State Condaleza Rice,
alongside other officials from the Bush administration. I wanted to get Gates's perspective on this perilous moment in history, as he put it. I wanted to hear about what he's watching closely, what worries him, and what's at stake for the world. I'm David Gera, and this is the big take from Bloomberg News today on the show My conversation with former Secretary of Defense Robert Gates. I sat down with him away from Washington in Colorado at the Aspen
Security Forum. This is one of several interviews I did there with some of the biggest names in for we're in policy and national security. We'll share those with you over the next few weeks. I wanted to ask you, first, given your experience and your knowledge of history, how you're thinking about this moment.
Well, first of all, I think that it's the most and respects the most perilous time since the late forties, maybe ever. We have never confronted aggressive, nuclear armed great powers in both Asia and Europe. At the same time, we have a major war going on in Europe, major war going on in the Middle East, threatened war in Asia.
And this all comes at a time when we as Americans are divided about our role in the world, about our politics, about everything else, and lots of things that need fixing aren't getting fixed, from the deficit and the debt to figuring out once again how to do military construction, how to rebuild defense industries. So it's a pretty tough time.
It's also a time of you know, it's been hyped and headlined and everything, but it really is kind of an inflection point in terms of taking a hard, cold look at our government and seeing how we can do it better. As I like to put it, in any institution over decades, barnacles, film build up. It's true of every organization I've led, CIA, boy Scouts, Texas, A and
M and Defense. And the challenge for a leader is how do you preserve the tradition and the culture that made the institutions great in the first place, but scrape off all those barnacles and make the reforms that are needed to be successful in the future. I think that's the challenge and I don't think we're facing it very well.
I'm going to ask you about a few of these military conflicts that are ongoing in a moment, but first I want to ask you about the trade war, and we focus a lot on the economic ramifications of that, what it's going to mean for trading relationships. How do you see that in the context of national security? How does waging this war stand to change the relationships between yes, trading partners, but nation states as well.
So interestingly, I think the trade imbalances actually began as a national security matter, and that was after the war. The United States gave huge trade advantages to Germany and Japan, but also the Europeans trying to recover from the war, and we actually basically said, we'll take make a hit economically because it's really important for our security for these countries to get back up on their feet, have a working economy. That's what's going to keep the communists out.
Work pretty well. But we never turned back to those advantages that we had given, and over the years, those disadvantages piled up against the United States, and nobody really wanted to take them on because obviously, with our allies
that was a very sensitive subject. And then with the advent of China into the WTO, it sort of put rocket fuel behind these trade issues, and mainly because China didn't abide by the rules when China joined WTO, and we and other developed commentaries failed to hold them accountable. This should have begun in two thousand and one, two thousand and two saying you can't do that, you can't seal that IP, you can't dump over here. There are a lot of things you can't do. But we let
it go. And so in a way, I would regard what's going on right now as kind of a reckoning to readdress the imbalances that have existed with some countries since after World War Two in the early fifties, and then have built up since the creation of the WTO and with China and so on. You know, are there better ways to do it? Maybe? But in some ways.
Let me use the analogy of the Europeans decisions on arms control, on arms build up, on defense spending, I, among many many others berated the Europeans for years, decades to increase their defense spending, and we had no luck. We literally failed. So incomes President Trump with his two by four and he's got their attention, and guess what,
they've decided that they will spend more on defense. Now he had I think a lot of help from Putin, from Vladimir Putin, who may not scare the American people, but he sure scares the Europeans. So I think we're kind of reckoning with both in terms of trade but also defense spending on the part of the Europeans of readdressing or addressing problems that have been long extant, but we really haven't had the political fortitude or the willingness to potentially offend people to take them on.
The war in Gaza has gone on now for more than six hundred and fifty days, and I wonder how you see the path forward to resolution. Is it evident to you how long is this going to last?
You think, well, I hear people betting on different times. You know, will it end this year? Whenever? Well, the fastest way for it would end would be for Hamas to own up to the fact that they destroyed Gaza. Their attack on October seventh began all of this, and they created an environment in which Israel said enough is enough, and we're not going to put up with these attacks. Every few years. We're going to solve this problem one
way or another. Now, ideally you would have some kind of political entity for the Palestinians that would have some credibility internationally, if not with Israel. And that can't be the Palestinian authority in the West Bank, which everybody knows is corrupt and incompetent to boot. So where are the Palestinians finally leaders to say enough is enough, we need
to start rebuilding Gaza. And I personally think this thing will, this horrible thing will come to an end when Hamas finally concludes they can't win, They're not winning support abroad, and their people are being destroyed.
Benjamin Natnewe, who is somebody you know and have dealt with over these many years. What have you noticed or observed about his behavior in this conflict and how much is that path the resolution going to be shaped by his political fortunes.
Well, I've known Bibe a long time and we've had our disagreements along the way. I think it's fair to say, but I will give Natanian who credit for this. Since October seventh, he has trained the strategic environment in the
Middle East in a very significant way. Iran counted on its surrogates, his Belah Hamas, the whose the tribesmen in northern Iraq and others to intimidate others in the region and to attack Israel and taking advantage of that attack or in response to that attack, Natanie Who and I think the Israelis in general said enough, and so they went after his Belah. They went after Hamas. They certainly
played a role in the overthrow of Asad. His Bilah can't be rearmed now because that path was through Syria from Iran and dramatically weaken Iran, first through the initial attack and then through the more recent one that involved the United States. So I think Iran is very much on its back foot at this point. Whether we've long term solved any problems, I think remains to be seen.
But in Atia, Who's made it pretty clear that if the Iranians resumed that nuclear program, he'll go back in and as he puts it, mow the grass you were not. But the bottom line is the strategic environment in the whole region has been changed subsequent to October seventh, And the truth is, if some kind of a solution can be found for the Palestinians, then I think the opportunities in terms of Israel, Saudi Arabia, the other Arab states beyond the UAE and Cutter and so on, are really
pretty extraordinary. These guys are all interested in business. They want to expand, they want investment, they want to diversify their economy. They see Israel as a technological giant in the region, so there's a lot of potential there, but they've got to get past the Palestinian problem.
You were not somebody who was agitating for strikes on nuclear facilities in Iran, And as the dust settles on those strikes, how do you gauge their efficacy and where does that lead? Do you think?
Well, this verse came up when I was Secretary of Defense under President Bush so back in two thousand and seven, two thousand and eight, I said, you know, there's no doubt we can do a lot of damage to those facilities. And they hadn't started going really deep at that point, but I said, and my position from then until today has been, you can significantly damage and set back Iran's nuclear program, but you cannot eliminate it militarily. They can't
unlearn what they've already learned. The Israelis are now saying that they probably scattered the enriched uranium at three sites Esfahan, Fordoh and the Tons, so they probably have some of that and they have some suit centrifuges. My view for what I was telling President Bush fifteen years ago was you can damage it, but you can't destroy it. You're just buying time, and the question is whether the time that has been bought can be translated into some kind of an agreement.
My conversation with former Defense Secretary Robert Gates continues after the break. After former Defense Secretary Robert Gates and I discussed the trade war and the war in Gaza, we turned to another major conflict playing out today in Ukraine. How do you see President Putin's calculus in that convent? We see the economic vice the country is in, the incredible loss of life. Where do you see all of that headed?
I think Putin is not all that difficult to understand. Vladimir Putin believes it is his personal destiny to recreate the Russian Empire, and as my old mentorist Big Brzhenski used to say, there can be no Russian Empire without Ukraine. And so Putin sees it as his personal destiny to bring Ukraine back into the fold of the Russian Empire, if not as an integral part of Russia, then as a client state basically does what Russia wants it to.
And his objectives have not changed from day one. He wants the four provinces in the East, he wants Ukraine disarmed, he wants a pro Russian government in Kiev. He wants a ban on Ukrainian membership in NATO and the EU. That's all. And he hasn't waivered one whit from the very beginning, and he is willing to pay whatever price is involved. And it is beginning to bite. There was a sugar rush from a lot of the defense industries investments and a lot of the things coming from China
and so on. But I think they've run through that. The inflation is really beginning to ramp up twenty one percent interest rates, that's just a formal interest rate, who knows what the real one is. Things are getting life's getting a little harder in Russia. So I don't see any breakthroughs. That's one of those predictions that may turn out to be very embarrassing. But the Ukrainians have been able to hold their ground pretty well in the East, as it's kind of a drone versus drone war out there.
But Putin is clearly putting the pressure on the domestic side in Ukraine with these attacks by hundreds of drones every single night.
What did you make of what seemed like a change in tack from President Trump a few days ago. Seems to be growing frustrated with President Putin. There was a lot of talk about them meeting and having a summit, negotiating this themselves. His patient seems to being tested here.
Most of the presidents that I worked with felt that, I mean, they got themselves elected president of the United States. They basically feel like they can win anybody over. I've seen it Withn't Benny, and you know it started with Franklin Roosevelt and Uncle Joe Stalin. You know, I can win this guy over. And a lot of presidents feel that way, that they can develop a personal chemistry with the other guy that will make great things possible, and
most of them end up disappointed. And I think that's what's happened here. I don't think President Trump was unique in thinking he could bring Puton around, nor is he unique in being disappointed.
The president has Steve Witkoff his friend, a businessman, not somebody who was in the foreign service or a diplomat before leading the negotiations that he's been having with Russia with President Putin. Do you see wisdom in that using somebody who doesn't have that font of experience from government and diplomacy, or does it raise questions for you about how approaching well.
Lots of different presidents use lots of different techniques. When we were first starting to reach out to the Soviet Union and to the Chinese and so on, US businessmen would be used as intermediaries to carry the message, if you will. I think that other presidents have used special envoys. President Obama liked special envoys and he had a bunch of them. I personally have found there are a few instances where those of work. So on the Northern Ireland
problem George Mitchell, that worked out pretty well. But on Afghanistan Pakistan Richard Holbrook, that didn't work. So I'm inclined to give presidents a lot of leeway in the tools that they want to use. And you know, it's always also the fact that when appointing ambassadors, I always thought it was most important to the host government, not that they had somebody super experienced as the US ambassador, but somebody who could pick up the telephone and call the President of the United States.
It strikes me that the balance that we've had between hard power and soft power in economic power, isn't that the equilibriument was that before? Do you agree with that? How much of a problem is it that we have an administration that six months in has leaned very heavily on airstrikes and using hard power to solve some of these problems, while it's been cutting State Department, USCID, other foreign aid.
I've been a long believer and that while the Cold War was fought against the biggest the backdrop of the biggest arms race in the history of the world, because we were able to avoid a direct military conflict, that conflict was resolved by non military instruments of power economics, technology, strategic communications, development assistance, ideology, intelligence, and so the most powerful of those are economics and technology, and we are
very good at using those. I wish we could use them more in harness with one another of tariffs, trade sanctions, and so on, because in some cases one might work better than the other. But we kind of use them independently, and I think we diminish their effectiveness that way. But economic, with our economic power, that is a big deal, and we're seeing that in relationship, particularly with China and Russia right now. I think on strategic communications and foreign assistance.
You know, the Chinese under who Jentaal invested like seven billion dollars in strategic communication. There isn't a country in the world where you can't get Chinese television, Chinese radio, Chinese social media, Chinese print media, television, you name it, and they've spread all over the world. We're cutting everything back.
Our voice will not be heard around the world. We can't tell the Keerge's why it's important not to let the Chinese have too much power in their country, or the Kazakhs, or people in the Middle East, or people in South America. I don't think we've used trade effectively. China is now the biggest trading partner with one hundred and twenty countries in the world, all the countries in
South America except Columbia. So my problem is that we have all these tools that are really powerful for the United States, but we've decided to keep them in our backpack, and if we're to avoid a conflict with China, all these tools will matter in this long term contest. You know, the line is for the hearts and minds, but the fact is those hearts and minds also have security arrangements, their economic markets, their potential sources of instability and terrorism.
So I think pulling back on all of those is really a mistake. Now that said, all of them are in serious need of reform. I mean, Congress is self dismantled USIA in nineteen ninety eight. They tried to dismantle USAID then, but Bill Clinton wouldn't let him, but he reduced the size and brought it inside the State Department. There are a lot of problems with a lot of
the aid programs. You know, when the Millennium Challenge Corporation was established by Congress under the first President of second President Bush, there were a lot of conservatives who said, let's do that because of its rules in terms of accountability,
local buy in, and so on. So one of the things that I'm trying to do through a Global Policy center affiliated with William and Mary is bring together people on both sides of the aisle and experts and say kind of what new path forward can we have in these different using these tools that gets away from all the mistakes of the past, gets away from all the bureaucracy and the barnacles of the past, and points a way forward to make us much more effective and cost effective in these programs.
My conversation with former Defense Secretary of Robert Gates at the Aspen Security Forum continues after the break. In the final part of my interview with former Secretary of Defense Robert Gates, I circled back to China and the threat of the relationship between China and the US deteriorating further as President Trump wages a global trade war. You mentioned avoiding conflict with China at this moment. How much does that worry you? Do you think we're headed for it
for conflict? What needs to be done to forestall that to prevent that from happening?
Well, I mean, I don't think I'm fairly confident the leader of neither side want a war. It would be catastrophic for both sides. So the question is, how do you maneuver against each other over a period of decades as we did with the Soviet Union without it leading to war? And so I think we have to be very tough on China when it comes to intellectual property theft, when it comes to trade and some of these issues.
I think we need to be tough in terms of their military deployments, some of the things they're doing around the world. But at the same time, I think it's essential that we maintain the dialogue with them, particularly military to military, to prevent incidents that could balloon into a conflict nobody wanted. So I think keeping a dialogue with them going is very important. I'm encouraged by the fact that President Trump and President she talk from time to time.
I'm not sure they don't talk past each other, but that's okay. But I think maintaining those contacts, and I would say especially on the military to military side, is really important.
We've talked a bit about the reform agenda. Maybe I can tease out your barnacle's metaphor. There was an effort in the early days of this term to really go after those barnacles in forests, and I think kind of blew up the hull of the ship maybe trying to
do that. What's your council for doing it appropriately? Because we see with this administration in particular, a real sense of urgency a president who gets impatient, how do you do the kind of reform that you're describing in a thoughtful way, a careful way, and not have knock on effects that can be damaging to these institutions.
So in two thousand and nine, in over a period of four months, in probably forty meetings with all the military leadership, the joint chiefs of staff, the combatant commanders, all the senior civilians, we examine I saw a budgetary train wreck coming after the financial crisis in two thousand and eight, and as I said, we've got to show some responsibility here and better we look at what can
be cut than people who don't know what they're doing. No, I won't mention any names or institutions, and so we compiled a list of programs that were questionable and we went through it in these forty meetings. Bottom line, we ended up cutting thirty six legacy programs that, had they been built to completion, would have cost the taxpayers three hundred and thirty billion dollars. And we did it essentially
without a ripple. Now, some companies weren't too happy, but that goes with the territory and then the next year facing the same challenges, same kind of meetings over a three month period, same number of meetings roughly, and the meetings weren't just to vent meetings were kind of is this a good idea, what do we need this for? Or to the Air Force, you want a new tanker, a miss a new ICBM, you want the F thirty five, and you've got to make a choice or two here,
and the same thing with all the services. And but on the IF what we called the Efficiency Exercise overhead exercise in the spring of twenty ten, we identified one hundred and eighty billion dollars in overhead cuts in the military. Over a period of about five years. We eliminated an entire combatant command, Joint Forces man that it was Jim Madison's first four star job was to go. I sent him down to dismantle that command. And we didn't have any leakers. We didn't have people going to the hill
behind our backs. We didn't have we had a lot of support on the hill. You know, individual congressmen were very much against things that we were doing that were in their districts. That's that's life. But we did an enormous amount of change and reform and really without any without perturbing the force. As it were the gallery, he didn't collapse, and nobody on the hill was calling for
my head. So there is a way to reform these institutions and to do so in a thoughtful way that involves a lot of people, that gets a lot of input, gets a lot of suggestions, so that when a decision is made, even if it goes against you, well I've been respected. I got my chance to make my case. My case didn't work, but at least I was in
the room, so I think. And the other final point I'd make is my experience in leading organizations and leading change in organizations is that change imposed solely from the top without any engagement below that are changes that walk out the door the day that boss leaves. If you want sustainable change, change that lasts, you need to involve the people who deliver the mission.
Mister Secretary, Thank you very much, h my pleasure. This is the big take from Bloomberg News. I'm David Gura. That was my conversation with former Secretary of Defense Robert Gates, the first in a series of interviews I did with some of the biggest names in national security and foreign policy. We're bringing more of these conversations in the days ahead. Make sure you're following the Big Take so you can
hear them all. To get unlimited access to all of bloomberg dot com, subscribe today at Bloomberg dot com Slash Podcast offer. Thanks for listening. We'll be back tomorrow.