Or are we on the brink of a technological golden age or the apocalypse? No one really knows, but I'm trying to find out. I'm Ross Douthat, and on my show, Interesting Times, I'm exploring this strange new world order with the thinkers and leaders giving it shape. Follow it wherever you get your podcasts. From New York Times Opinion, this is The Ezra Klein Show.
Here's a simple principle that I believe deeply. You cannot make a good argument for a bad policy. You cannot make a coherent argument for an incoherent policy. You can imagine tariff regimes that are defensible. You can imagine critiques of the previous era of global trade that are coherent. The problem is none of them fit what Trump is actually doing.
It's darkly funny watching Trump's defenders pivot online from defending the morning's tariffs as necessary shock therapy for an economy that has been corrupted by decadence and greed, for an economy where we care about the markets but have abandoned the Midwest. Only the shift by that afternoon to how brilliant it was for Trump to pause those very same tariffs. Just look at that stock market recovery. Brilliant stuff, sir. Textbook art of the deal.
Where we are right now, as I write this on Monday, April 14th, is an all-out trade war with China. We've also laid tariffs on the rest of the world, but the big ones are on China. The tariffs there are well over 100%. We're being told this is all necessary because we need to bring those supply chains back from China, particularly the advanced ones.
They built their economy. They built their power on the backs of our iPhones, our batteries, our semiconductors. We need all that back. But no, wait, wait, wait. Breaking news. Most electronics are now exempted from the China tariffs. We're going to tariff shoes from China at a higher rate than laptops in this policy apparently designed to reshore advanced manufacturing. Apple in particular seems to have wriggled out of the tariff.
Or no, wait, wait, maybe not. Now Trump is saying that the exemptions his own administration announced, that's just fake news. The same goods will be tariffed in some different way later for some unapparent reason. Even right now, I cannot tell you what these tariffs are or will be.
Imagine trying to make investment decisions based on them. What I can tell you is that China is retaliating. They've halted exports of rare earth minerals and magnets necessary for the production of many, many advanced products. Is that going to help our manufacturers? Do you be in a position where they cannot manufacture key goods, but China can? Did the Trump administration plan for this entirely foreseeable response? The questions answer themselves.
What if you get in a trade war with China and you lose? What if after infuriating the rest of the world, putting tariffs on them too, you make China look stronger, more reliable, more farsighted, more strategic? In the eyes of all these other countries that are now looking for an exit from the unreliable consequences of U.S. hegemony.
I want to talk about China today. I think one reason the administration felt it's safer to retrench to something that could be described more as a trade war with China is that a bipartisan consensus is hardened around China. Trump set this into motion in his 2016 campaign, but then Democrats embraced it too. China is a rising power. We've made a terrible mistake in letting them rise. We are in danger of being a falling power.
China ripped us off. They took our manufacturing jobs. They addicted us and our allies to their cheap labor and their cheap goods. And China, it doesn't just want to be rich. It wants to rule. First Taiwan, then who knows what else. I'm not going to tell you this story is entirely wrong. It's not. And I'm not going to tell you that all the Republicans and Democrats who believe it wanted Trump's trade war specifically. They didn't.
But I will tell you that I've been surprised and alarmed for years now by how this new, much more hawkish and angry consensus has hardened, how hard it has become to question. I get nervous when it comes clear to me that we've chosen a new foreign enemy in Washington. And that the politics on both sides no longer really allow for contrary voices or understandings. And so I've been concerned by the trends in China policy for a while. Not because I think China is a pure or good actor.
but because I think the politics have aligned around hostility and escalation in a way that can become self-reinforcing. And I worry about it because I think American policy is now outdated. It wants a redo of the 90s or the 2000s. It is focused on its mistakes in the past. It is out of touch with what China is in the present. One person who I've seen questioning this consensus more and more loudly is my New York Times colleague, Tom Friedman.
I talked to him after a recent trip he took to China. And I remember the first thing he said to me. He said, we're screwed. We are getting this wrong. And then he explained why. And I thought it'd be good for everyone to hear what it was he told me. Not because everyone has to agree with Tom's take on this. But if the consensus politics is leading us where Trump has gone, maybe it's time to hear some voices that are questioning that consensus. As always, my email is reclineshow at nytimes.com.
Tom Friedman, welcome to the show. Great to be with you, Ezra. So you said something in one of your recent columns that struck me, which is that the pandemic was bad for many things. But one of the things it was particularly bad for that is underrated is our ability to understand China. Why? Well, basically, all the American business executives in China left China during COVID, virtually all of them. And then after COVID, we began this process of decoupling.
So you basically had six years with very, very little American presence there. When I was in China last year, I felt like I was the only American in China. You just didn't see any other Americans. Not tourists, not business people, not nobody. I wrote then that it was like America and China were two elephants looking at each other through a straw. Having just been there two weeks ago, I would say now they're like two elephants looking at each other through a needle.
A point I've heard you make is that in that six year period, there was only one congressional delegation that went to China. And you said this in a column too, that typically in America, the problem right now in our politics... is that we are too divided on issues. It makes it hard to discuss them in any kind of comprehensible fashion. But that on China, on this issue specifically, we have too much consensus.
How would you describe the bipartisan Washington consensus on China? Yeah, I mean, basically over starting with Trump one and then into the Biden administration and now Trump two. economy came against the law in Washington, D.C. to say anything positive about China. And because of that, there was an aversion to going to China. There was an aversion in American industry began to develop of hiring Chinese.
There was an aversion of American college campuses to sending students to school in China. And so you've got this giant asymmetry where China has today 260, 270,000 students. studying America, and we have, I don't know, a few thousand studying there. And the backstory to this is not all an American failure at all. has to do with also what happened in China beginning with the rise of President Xi Jinping between 2012-2013, and then making himself, in effect, president for life.
China went in reverse. It made a U-turn. The China that we thought was, you know, more or less. Two steps forward, one step back. But on a trajectory for more openness at home and more integration with the world, that really stopped under Xi Jinping. And it was combined. with a program she launched. which was to basically make sure that China dominated all the 21st century industries, from aerospace to new materials to autonomous vehicles to robots.
And that changed the whole chemistry in the U.S.-China relationship. But central to that, Ezra, was that the ballast in this relationship was always the American business community. So they were the ones who, for many years, beginning in the late 70s, were making money in China. And even whenever the relationship got rocky, and even when we perceived China was not living up to trade obligations under WTO, American business would basically lobby and say, look.
Be cool. It's OK. We're still making money here. And what happened, this combination basically of. Fewer and fewer American businesses feeling they were getting the benefits out of China that they wanted and were having to transfer too much technology. And then China rising on its own. with its own technological homegrown tech prowess, those three things really kind of blew up the relationship.
You mentioned it in terms of the reduction in these cross-border exchanges, technology exchanges, student exchanges. The other side of that story I have heard from Americans, from business leaders, from other people in power was the growing... Recognition that China had been conducting.
a massive level of industrial and even educational and political espionage against america and some of the fears about Chinese students studying here, about hiring Chinese workers here, was a feeling that at a high level, though not predictable to any individual person. A lot of this was leading to spying, was leading to the theft of technological secrets. And connected to that, a belief that that was what was behind China's run.
That China wasn't just rising, that what they were doing was stealing from us and building on top of that. You have this quote from Senator Josh Hawley, a Republican influential in foreign affairs, that China can't really innovate. They can just steal from us. So I'm curious how you think that played into it.
Yeah, I can't speak to the espionage. I just don't know. And you get in these kind of Washington conversations with officials where it goes like, if only you knew what I knew, you would be more worried. And my reaction to that is, I wish I knew what you knew because it would put everything more in perspective.
But I also, part of my reaction to that too, Ezra, is that I hope we're doing the same to them. I hope we're spying and conducting whatever we need to do for our national security purposes. But the notion that they can't innovate, what gives the lie to that, as if you talk to American businesses who operate in China or European businesses who operate in China, what they'll tell you is that we first came here for the market. And now we come here to be close to the innovation.
that we cannot basically be in touch with the cutting edge of our field, particularly in autos, unless you're here. So China realized it could not compete. with combustion vehicles with America. And so it took the decision to leapfrog them right to EVs and ultimately autonomous driving cars. It did so by basically having its smartphone companies become car companies. So when I came to China after COVID, I said, whoa.
When I was last here, Xiaomi was a phone company. I came back, they were a car company. When I was here last, Huawei was a phone company. I came back, they were a car company. And so basically they put their cell phones on wheels. And the reason this is important is that when you get into a Didi, Didi's their Uber. It is a seamless digital experience.
from the rest of your life. It syncs up with your cell phone. I rode in a Huawei car when I was just there. I was riding with someone from Huawei. He took out his laptop. pulled down a screen that came out of the ceiling, and his laptop immediately synced with that screen, and he was working in the car. He says, what would you like to see? Do you want to see anything? I said, yeah.
Get me Paul Simon's concert in London's Hyde Park. I'd like to watch that on the way to your campus. It was up in, I'd say, about 30 seconds. The sound, Ezra, you know how you buy cars now every two years and they always say, it's got Dolby surround, yada, yada. I have never in my life heard sound like this in a moving vehicle. It is just so far ahead of anything I've seen here.
Volkswagen, for instance, I met with their China head when I was there. They've got a whole facility there, they call it, in China for China, that unless you're competing with the best. What my friend Jörg Witke, the head of the European Union Chamber of Commerce, calls the China Fitness Club.
Unless you're in the gym with them, you're going to get run over. So this conversation we're having emerges out of a conversation we had a little bit randomly on the phone. You had just come from China and I just come back from book tour. And we were talking about something else, but then I asked you how your China trip was. And what you said to me basically was.
Ezra, you have no idea how screwed we are. Yeah, because what you see, Ezra, when you're there is the product of 30 years of being in the fitness gym. and some particularly Chinese fitness gym. And it kind of works like this. New industry comes along. Let's call it solar panel. Every major city in China decides they need a solar panel factory.
And the local government subsidizes it, maybe domestically born, maybe a partnership with a foreign one, maybe a foreign one. And you end up in a very short period of time. I'm making the number up, but with 75 solar panel companies. They then compete like crazy against each other in the fitness gym, and five of them survive.
that they can then go global at a price and level of innovation that is very hard for a foreign competitor to deal with, which is why China today basically controls the global solar panel market. But what you also don't see is that process of winnowing down from 100 of those solar panel companies to five. produced a massive explosion of supply chains domestically to feed that industry. Same thing went on with cars. You know, the same thing goes on with robots.
And so where you end up five years later is with interlocking set of supply chains that now if you're young Chinese and say, I've just got this idea. I want to produce a shirt. that has a pink polka dot button that can sing the Chinese national anthem backward. Someone will have it for you tomorrow. So, the process you're describing here. The Chinese government identifies solar panels as an industry.
They, using a variety of mechanisms, absolutely flood the country with subsidized financing to become a solar panel company. And you get very strange things here. Like there was an example a couple of years back where, you know, one of the big real estate firms there that was in crisis tried to become an EV firm because then you can get a bunch of finance.
China absorbs, the Chinese government absorbs a huge amount of waste, failure, and graft. Solyndra times a thousand. Things we would never accept in this country. So a bunch of these firms just pocket money for nothing. A bunch of them fail. But in that, on the other side of that process of failure-waste graph... you get these very, very potent national champions, they're called, that then the Chinese government puts a huge amount of resources behind.
And I want to add one other thing because it speaks to some of the trade fights we're having. For China to have the money to do this. to not require more efficiency from their own companies and their own investments. Part of the way they're doing it is keeping wages suppressed in their country. Yes. Part of the way they're doing it is exporting much more than they consume.
Part of the way they're doing it is maintaining a kind of imbalanced economy, highly focused on production. But going back to this idea of the gym, the fitness, like we understand in America, right, capitalism, survival of the fittest. They don't demand that you're very fit at the beginning. They demand that you're fit at the end. We actually demand, with the exception of some VC investments that are usually fairly small scale, we demand that you're fit at the beginning.
It's a very good point, and I'll give you a perfect example of that. So there was Ford Motor today has built a battery factory in Marshall, Michigan, using the IRA money from the Biden administration. That factory makes batteries for EVs. The technology, though, comes from China. It's a company called CATL. That CATL technology was actually born in America in the Obama administration.
People tried to scale it here then. They failed. The founders, basically, it went into bankruptcy. And a Chinese entrepreneur bought it, took it back to China. scaled it there, and is now doing tech transfer to Ford, bringing it back here. It's a perfect example of what you're talking about, the lack of patience. I want to go back then to this question of the Washington Consensus, and it's a reason I wanted to have this conversation.
I get very nervous when both parties agree on something too much. And what I find now is that among Democrats and Republicans alike, you put it that you can't say a nice word about China, but I would put it as. It is a completely universal belief that would be politically lethal in most cases to question, if you have any national ambitions, that openness towards China would be the right strategy. You can have Trump's version of hostility, unfathomably high tariff.
Very antagonistic language. You can have sort of a more democratic version of hostility. The Biden administration trying to wall off a bunch of advanced technologies, which maybe was the right call. Nancy Pelosi visiting Taiwan. But what you can't have is the view that even if China isn't liberalizing.
That given how interconnected we already are, more interconnection and an effort to pull this relationship back from the brink where both sides are ratcheting up hostility and preparing for the possibility of all at war. that that would be the right approach. Tell me, look, you've been covering this for a long time.
Tell me how you think that consensus developed. How did we move from where we were even under the Obama administration when they're negotiating, you know, TPP as a way to sort of move trade away, but to pivot to Asia to be more engaged? How do we move from that space? which is a much softer form of competition, to what happens under Trump, then Biden, then Trump too, which is, I think, one of the sharper foreign policy changes we've seen in recent decades.
Let me back into your question, Ezra, by just giving you my worldview. So how I think of this whole China issue. I think that the net result of where we are as a world in terms of development right now, and call this the post-post-Cold War era, is the humanity faces basically three existential questions. One is how we manage artificial general intelligence.
And we are going to have to find a way to collaborate to make sure we get the best and cushion the worst out of what is going to be a new species. That's number one. Second, as a product of our development, we have unleashed a level of climate change that we have to collaborate in order to deal with. And thirdly, I believe the combination of all these stresses is going to blow up a lot of states, a lot of weak states.
And you're going to have zones of disorder. You already see that in some parts of the world. My view is there are only two superpowers who can manage this, but only if they collaborate, the United States and China. They can learn that early or they can learn that late. They can learn that painlessly or painfully. But my view is they're going to have to learn that.
And so for me, liking China, not liking China, it's just not in my equation. That is the world I think we're going into. I also think we're going into a world where I think of a kind of industrial ecosystem. So I was born into the late industrial revolution where the ecosystem to thrive as a country was coal, steel, aluminum, combustion engines, and combustion-driven vehicles.
and electricity. And you had to be playing in all of those industries to thrive. I think the world we're going into, the ecosystem to thrive. is going to be robots, electric batteries, artificial intelligence, EVs, electric vehicles, and autonomous driving cars. That ecosystem will be the flywheel that's going to drive everything. And therefore, to me as an American, it's essential that we play in that ecosystem and that we be able to compete head-to-head with China in that ecosystem.
So that's how I'm coming at this problem. I'm not even thinking about Taiwan. I'm not thinking about communism or capitalism. I quoted a Trump official a while back who said, you know, China's goal in the world is to spread authoritarian Marxism.
Oh, my God. China's got a lot of goals in the world, Ezra, but one of them is not spreading authoritarian Marxism, okay? They're trying to spread Muskism, not Marxism. That's the game they're trying to beat us at. They're trying to beat us at our game, not Karl Marx's game. And we need to understand that and be serious about it. And the last thing I'd say, given those are the industries we need to be in.
This China thing, this country, you can love them or hate them. And believe me, I do both every day. But these are serious people. OK, they're messing around like you've just seen Donald Trump mess around for the last week. And they don't hire knuckleheads and put them into key positions for the most part, okay?
So those are all the biases I'm coming to this story with. Then I walk into the Washington debate, you know, and it's, are you a panda hugger? Are you not a panda hugger? Did you say something nice about China or not nice about China? I just, I run away with my hair on fire because it's just not about the world I see us going into, a world I want America to thrive in, and a world where I think to thrive, we need to be serious about these issues.
Let me try to steel man what I think happened in the Washington consensus, which is, and I've talked to many Democrats about this. But they would say Tom Friedman is naive. that there was a bill of goods sold. And the bill of goods had a couple parts to it. One is that if we welcome China into the global trading order, they would trade more, they would get richer, they would consume more, and they would also liberal.
And they didn't do, I mean, they did get richer, but they have kept domestic consumption depressed through a bunch of different policies. And they become more authoritarian under Xi, which you mentioned, but it's a big deal here. You've had profound human rights abuses like with the Uyghurs. But deeper than that, you're very dismissive of this idea that the Chinese Communist Party at its core is an ideological project meant to spread.
Chinese power and communist ideology. They say, no, if you really look into it and the way he rules and the kinds of study sessions he makes people go through, that this is very much. an ideological expansionist power. The idea of the Thucydides trap becomes very common, right? That there are these two superpowers and there can be only one eventually. And we need to be prepared for that.
And that what we've ultimately been doing here is weakening ourselves and strengthening China. Our industrial base has moved too much to China. We're too dependent on them for supply. And I think this really all comes to a head after Russia's invasion of Ukraine, when people see how the dependence on Russian natural gas weakened Europe and the world's response. And the feeling becomes...
China is more dangerous than we've given it credit for. It has grown its industrial base at our expense without becoming the sort of good actor, both domestically and in the international political system we were promised. And we cannot allow ourselves to be in a position in the future where we are in some kind of war or conflict with China. And yet we are looking to them to make all of the things we need to compete with them.
And as such, what you need to do is decouple and you need to understand them as an antagonistic power that we treat as a hostile enemy. That is my account. of how the center of gravity changed. And I think what I just told you would be the thing that many Democrats in Congress would tell you, not just Republicans. What is wrong with it?
Well, I would say I only can speak for myself. I actually supported Trump's tariffs the first time around. In fact, I wrote a column saying Donald Trump is not the American president Americans deserve, but he is the American president China deserves. Somebody had to call the game. So I have a lot of sympathy with that view at one level. And the other thing I would say, Ezra, I will confess something here on your show.
Whether I'm writing about China from Washington or whether I'm writing about China from China, I'm always just writing about America. My goal is to use China as my permanent Sputnik. helping people understand what a formidable engine this is, however they got there, okay? And that if we aren't serious, then we're going to get steamrolled.
This is Somini Sengupta. I'm a reporter for The New York Times. I've covered nine conflicts, written about earthquakes, terror attacks, droughts, floods, many humanitarian crises. My job is to bear witness. Right now, I'm writing about climate change. And I'm trying to answer some really big and urgent questions about life on a hotter planet. Like, who is most vulnerable to climate change? Should we redesign our cities? Should we be eating differently?
What happens to the millions of people who live by the coast as the oceans rise? To make sense of this, I talk to climate scientists, inventors, activists. Mostly, I document the impact of global warming. And that impact is highly, highly unequal. And thank you. Here's one of the things that I think... deranges a bit the US debate on China, which is that two things are happening at the same time that we have trouble seeing at the same time.
On the one hand, I feel like the conventional wisdom at the end of the Biden administration is China's doing quite badly. They are not escaping the middle-income trap. They have not raised living standards in the way people thought they would. She's zero COVID policies went on way too long and were authoritarian in a very extreme fashion. There was this state-sponsored crackdown on tech companies.
And a bunch of other parts of Chinese life. And there's a real feeling that America was in a stronger position and they were in a weaker one. The thing that was missed in that is the thing that you're pointing out in some of these columns, that we sort of imagine, because this is how it is worked here, that the sophistication of the economy and what it can create.
And the living standards that that economy generates for its own people will be very tightly linked. And so as their living standards have not advanced in the way we thought, I think a view took hold that the Chinese experiment was not working out. At the same time, if you go and look at what they are creating and their factories and their industrial base.
They are at the forefront of a series of technologies. They are competing with us within months on AI, right? The AI timelines for the two countries are months apart, if that. And then, as you've mentioned, they're probably ahead of us at this point on batteries, on electric vehicles. Oh, not close, yeah. And on the ability to spin up highly complex supply chains.
I guess the question here is how can those two things coexist in this way? It's a question I ask every trip and did on this one as well. And the answer is a combination of things, partly culture and partly just not understanding how the systems work. As a general rule, not in every case, but as a general rule.
If you have an idea to start a company, there's actually not a lot standing in your way. The government's not going to interfere with that. In fact, it may help you far more than any local or state or national government would do here. If you want to write an op-ed piece condemning Xi Jinping, that'll be the last op-ed piece you write. So those two things are very decoupled there.
Not only that, China has a Mandarin tradition, going back a long way. People who want to work in the government have to take a test, and it's a very meritocratic test. And the product of that is on the whole, okay, as a generalization, the deep state there actually is pretty good, quite responsive when it comes to backing innovation. It's also very good at arresting you if you get online. But that's how these things go together.
So if Ezra does decide, he wants to make shirts with that pink polka dot button that can sing the Chinese national anthem. backwards, not only can he get that button overnight, but no one will stand in the way. In fact, you may find a lot of sources of capital locally to produce that button. And at the same time, if you want that button to sing Tiananmen Square 1989 over and again, you're going to get arrested. But those two things actually exist side by side.
I think people are used to thinking about the pink backpack with a button. I think they're not used to thinking about the dark factory or the new Huawei campus. What is a dark factory and what is it like to be in one? And what was that Huawei campus that you went to like and what did you take away from that experience?
The dark factories are fully roboticized factories, so they're dark. They don't need to turn the lights on, except at two and three in the morning when the engineers come in and clean the machines. There are dark factories all over China today. The Huawei campus was built in three years to house 35,000 researchers, including Ezra foreign ones that they hope to recruit. Had 100 different cafes. Each building was distinctly designed. Has a monorail, you know, going around a beautiful lawn campus.
By the way, I've been to Huawei's headquarters in Shenzhen. I have no illusions about Huawei, written about them. They stole stuff. They have not been at all good actors. But today, we tried to kill Huawei, the United States. I mean, we tried to deny them the chips, and they almost went into the tank. And they innovated their way out. Maybe they stole those chips from NVIDIA somewhere. I have no idea. All I know is today.
The same day that Josh Hawley declared that China can't do innovation, Huawei reported record profits on CNBC with some very new technology. And again, my job is to take the world as it is. All right. And the way the world is right now is however China got there, it's there. And if you don't think it's there, then you are really missing something.
Well, that maybe gets us to current policy. It's very hard right now to podcast about trade policy. We're recording this on Wednesday, April 9th. It'll come out Tuesday of next week, so six days. God knows what will happen if we recorded this morning. It would have been a different podcast than it is now. But after tanking global markets for a week... Then beginning to see the US bond markets unravel.
The Trump administration did a 90-day pause on tariffs on countries that have not retaliated, which is just a generally strange concept. Yes. But double down on Chinese tariffs, right? I think it's up to 125%, something in that range. China is retaliating against us. The Trump administration's broad view, articulated by J.D. Vance and others.
is that at the center of their entire trade strategy has been that we need to build all this in America again. And that the way to do this is very high tariffs, incredibly high on China specifically. But also, frankly, on the rest of the world, because what you're trying to do is bring it all back here. And that is a way of making us capable of competing with China. There's a series of papers out there that make this argument that...
China has a kind of hegemonic level of dominance over global manufacturing. They're not the only manufacturers, but they have premises there. And we have it on the financial architecture of the world. And in this theory, what Trump and his team are trying to do is take manufacturing back from China. Do you think their theory makes sense? Higher clowns expect a circus, okay? If that is your theory, then go ahead, put all the tariffs a thousand percent on China.
That's day one. But these guys are entirely first order thinkers. Day two has to be a strategy for what you do the morning after here. How do you then build the industrial base that you want to take advantage of the time you're buying with your tariff? So what are these guys doing? Trump put up a wall, okay, against China. And then they went out and shot the American car company. Ford was just downgraded today. I saw its stock, I think it was down to $7.50. Why is that?
Because Ford did everything that Biden asked it to do, that irrational company would ask it to do, that we would want it to do. And then what does Donald Trump do? He comes in with his right-wing woke bullshit. and says, we don't do EVs here. EVs are for girly men. We only do manly industries. Well, fuck that. OK, because look what happens now to Ford. So you say, we want to bring this here. I don't want to have my kids screwing in parts, okay, into cars. I want them designing.
Okay, investing in and inventing the next generation of EVs. But let's go back to that ecosystem I talked about, Ezra. EVs, robots, autonomous cars, batteries, clean energy. If you say, oh, we're not to do the EV part. Before I came over here, I read Trump wants to reopen coal plants. And he loves drill, baby, drill. Okay, so it doesn't make any sense. You're building a wall against China. Great, I'm all for it. But what are you doing behind the wall?
So we catch up. You're taking your own companies out and shooting them in the back if they're not right-wing woke. What's the project? What's the Trump administration's focus on? How many billions can we take away from American universities of their research funds? to punish them for DEI strategy. I'm here not to advocate DEI, but if I had a limited time in the world right now,
I sure wouldn't be focused on that. I'd be focused on doubling down on the research capacity of these universities. I'd be doubling down on NIH. What are they doing? They're cutting the budgets of our Crown Gem research facility. They're not serious people. They're clowns. But you are not all for building a wall with China. You're making an argument that even among Democrats, I think, is somewhat more subversive right now. which is it if you are a serious person.
You would do with China what we did with Japan in the 90s, which is, by the way, when Donald Trump came up with all of his trade theories. This guy's had the same opinions on everything for decades and decades now. What we did with Japan is we brought in their car companies here and we learned from them. What China did with us was they brought in our manufacturers and they learned from them. And what you are saying is something that if you take seriously.
how good China has gotten at manufacturing. then what you would try to do is begin bringing in its factories here as the condition of access to our market. Exactly. You should do 50-50 joint ventures with Shameh. You can build your cars here. 50-50 joint venture, number one and number two.
You have to build your supply chain here as well. So you're not going to just bring all the parts in, you know, from China. You got to build the supply chain and the factory here. Joint owned exactly what you did to us. I argued for this before with Huawei. Huawei has a very dodgy past. And they've been involved in all kinds of lawsuits, you know, with different companies over IP.
So what I said at one point was I would say to Huawei, here's the deal. We're going to let you wire Wyoming, Montana, and Idaho. You can sell your technology in those three states. We're going to watch you for three years. We're going to see how you handle that. We'll see how you handle the data. If you do well, we're going to give you to other states. We created no incentive.
for them to be a better actor. There was no ladder up or out at all. We just then tried to kill them. And their response was, you talking to me? You talking to me? And they now went out, got into the fitness gym, and they might kill us. So if all Trump is doing right now, Israel, I don't know, I've lost track what the tariff is on China. We may be getting toward infinity. I have no idea. But if behind that is a strategy.
to basically do what we did the other way, I'm all for it. But if the strategy is to only build a wall so we can go back to digging coal. and only depending on oil, and killing the wind business, and killing the EV business. then this is going to end in such a disaster. All right, that's the immediate problem. You have another problem coming down the road with AI. An AI going to be injected into everything, okay, from your car to your toaster to your refrigerator and maybe even your body.
If we and China don't have a trusted architecture for managing AI, Then everything, Ezra, is going to become TikTok. And this whole debate we're having over TikTok, can we have it? They're listening to us. What are they doing with the data? That's going to apply to your toaster, to your tennis shoes, to your car. And so that's coming down the road. But that's already here. They don't allow our major technology firms there. And with the exception of TikTok, really, we don't allow theirs.
Here, we are the governing, I always say with AI policy, there are three goals. Make it safe, make it faster, make it ours. And make it ours is always the goal that wins. In every conversation, in the Biden administration, in the Trump administration, make it ours. Which means, by the way, we are racing much quicker than we should be to make it safe. Because make it fast then becomes the overriding objective.
And we're already there. And you will like sever these two AIs off from each other, these two AI branches off from each other. You've already to a large degree severed the two internets off from each other. You are going to have this world where you do bifurcate. And there's something interesting about that, too. We are probably, by most accounts, a little bit ahead of them on AI, but not by much at this point. But they have something increasingly that we don't.
which is a digitized structure for their economy and for the integration of their economy with manufacturing and other things, but particularly payments. communications, et cetera, that you could embed AI in very, very rapidly. So when Elon Musk talks about making, you know, the app formerly known as Twitter, the everything app, what he wants it to be is what China already has.
which is these apps that do communications and payments and all these different things. And then if you embedded AI into them, which they're doing, you have much more surface area of the economy that you can optimize very, very, very fast. So that was the theme of my column, you know, that they have massively digitized. It's a cashless society now. You have beggars with a QR code in their begging bowl.
We went, I went with my colleague Keith Bradshaw to Zeker, one of their new car companies. We went to the design lab. watched a designer doing a 3D model of one of their new cars, putting it in different contexts, desert, rainforest, beach, different weather conditions. And we asked him what software you were using. We thought it was just some traditional CAD design. He said, it's open source AI. 3D design tool. He said what used to take him three months, he now does in three hours.
Three months to three hours. Because they have such a digital connected system, you just take that hypodermic needle, fill it with AI, and inject it into it, and it can optimize so many things. And it's for all these reasons that I'm worried about the bifurcated world. I'm worried about that. That world is not going to be at all stable. or at all prosperous in anywhere near the last 40 years. And so if I have a choice. My choice is to argue.
and I don't care if I'm the only one arguing for it, that we and China... are going to have to get together and actually be the partners that create an architecture for this. Otherwise, we're going to just keep racing each other in some kind of crazy AI version of nuclear, probably bankrupt ourselves in doing it. And this gets to my gut feeling about the whole world we're going into once we get to AGI, Ezra, which is that I think to manage this world, climate.
AI and disorder, we are going to have to learn to collaborate as a species. to a degree that we have never collaborated before. I am a big believer in my friend Dove Seidman's argument that interdependence is no longer our choice, it's our condition. The only question is will we have healthy interdependencies or unhealthy interdependencies? But we are going to rise together or we're going to fall together. But baby, whatever we're doing, we're doing it together.
That is my view. I don't know if that's true, though. I mean, look, you're much more of a student of international relations and history than I am. But countries can rise and fall separately. Superpowers decline and others rise. Japan was going to be the next great power. Now it's an aging society that is in much more trouble. One of the ways of thinking about this that has been on my mind watching the Trump administration.
Light the confidence the rest of the world has had in America on fire and call it greatness. is this idea that China's strength is manufacturing and America's strength, which we deride, is financial. One of the lessons of all history. Is he who controls the financing controls the world. And what the Trump administration, I think, thinks it's doing.
is taking back manufacturing from China. I don't think it's going to do it. But what they are definitely going to do, I think, is make it possible for China to take financial share from us. Because people are not going to trust us anymore. If we can tariff them at any moment and will at any whim, they will try to unwind themselves. from being part of our architecture of financial dominance. And it is an extraordinary source of American power. But if you use it too much,
then people will voluntarily release themselves from it because they are voluntarily part of it. China's very, very sophisticated payment structures. It is the capacity to lend a lot of money. It is playing itself up right now as a more stable player in international affairs. It is trying to create closer relationships. with Europe, with Japan, with South Korea, with a lot of people and countries that it is traditionally had very rough relationships with.
And so I don't think we're necessarily going to rise and fall together. I mean, if you told me that Trump was a Manchurian candidate and you had evidence of it, it would be very hard for me to refute. Like, what would the Manchurian candidate... if not this. Right. Look, let's go back to what would you be doing if you were serious on trade? The first thing you would be doing is saying to the Chinese, you now manufacture about a third of all products in the world.
You can't make everything for everyone. You have got to leaven out your economy to be retired in China to get like a $5 a month pension. And you've got to be using that energy domestically and buying more from others. The conversation has to start there. They are making too much and we are consuming too much. So why don't we then get our friends? and sit down with China as a united front, the European Union, Korea, Singapore, Japan, the Philippines, and make it the world against China.
On this issue, you would have told them over the next three years, we're going to gradually be raising tariffs 15, 20, 30 percent each year. So you can know what's coming, but we're going to keep doing that as a collective. And then behind that wall, you would be offering them, one, the opportunity to invest in America, and two, you would be serious about that ecosystem I talked about.
And giving our government, our companies incentives, doing everything we can to get the infrastructure and opportunities for that ecosystem to get going. That would be the rational thing. What did Trump do? He made it America against the world. the whole world at the same time. So he actually threw away our single greatest competitive advantage over China, which is that we have allies and China has vassals.
Our colleague David Brooks likes to say, you know, Trump is always the wrong answer to the right question. So I want to note something that I think is a useful way of thinking about trade here, that I think there's been this problem that people keep trying to... illustrate a more sophisticated architecture around Donald Trump's thinking than is actually there.
Yes. And one of the things they'll reach for is this issue with China. China makes about a third of the world's goods. As you mentioned, they're on track to make about 45 percent of it in the 2030s. And if I'm remembering the number right, I think they account for something like 12% of consumption. 12, 13%. Now, that's hugely inbound. For a country that big to be that imbalanced between production and consumption creates an instability across the entire global system.
One of the completely idiotic things that even skeptics of our relationship with China have been appalled by that the Trump trade effort has attempted. is to treat everything in terms of bilateral trade between America and other countries as if we should have a balanced trade account with Vietnam. What do we make?
with our advanced manufacturing that the Vietnamese are going to buy. It's a completely insane way to look at the world. But you do want to think, particularly in the very, very, very big players, about global imbalance. Because if there are huge global imbalances. not just like individual bilateral ones, like then you have a bit of a problem. Yes.
And this is where you might have imagined the world to put pressure on China. Not that they need to manufacture less, but they need to consume more. More of their manufacturing needs to be consumed domestically. And then more of their capacity needs to be shared with the rest of the world to maintain access to these markets. But this idea that we're going to infuriate every other country along the way.
It's just a very strange way to think about power. When your biggest fear is that China is becoming a compelling alternative to you, you're going to make yourself a less compelling alternative to them. to the rest of the world. Ezra, you have to understand, okay, today Trump, on my way over here, he decided he's going to pause the tariffs and whatnot. Lesotho doesn't have to worry. What he is missing... is the world but china in particular thinks he's an unstable actor
They look at what's going on here. They watch that Zelensky meeting in the Oval Office. And they have watched that Trump tore up a basically successor agreement to NAFTA that he negotiated with our two closest neighbors. And they're saying to themselves two things. One is, how do we even get in a room, our leader get in a room with this guy? We don't know what he's going to say. And number two, say we do do an agreement with him. He could tear it up the next day.
So he always thinks he's being cute. Like this is some, he's buying, you know, some apartment block on Long Island and he can kind of do whatever he wants. This is a big game, and they don't think he's a stable actor anymore. There's been a real cost for this back and forth. Hey, I'm glad the stock market went back up today, but don't think this has been cost-free. I am. livid about this particular thing. So the press secretary, the White House press secretary today said to the media.
I guess a bunch of you didn't read The Art of the Deal. Oh, my God. When he pulled off or did a 90-day pause, there was no deal. We didn't get anything. We vaporized a huge amount of wealth. We have created a signal that everybody else should trust us less and fortify themselves against these tariffs coming back in 90 days. Trump has become himself far less popular. We've put the financial system under a lot of strain. We have frozen a huge amount of future investment.
This idea that you act the madman in order to get these extraordinary concessions, we didn't get any concessions. And even if, I guess maybe the idea here would be we showed we're serious. And so people will come to us and offer, I don't know if you're Vietnam, to buy more of our something. We got nothing. What we did was we lit a lot of our political capital and geopolitical capital on fire. On fire. And we are calling that a victory. But also Trump is now shown.
that there is a place he can't go. So his leverage over the rest of the world just diminished because what the world just learned is that he actually can't destroy his own bond market. So if he tries to do this again, and the world does not want to be pushed around by us, they can wait us out. Now, there's a concentrating issue with China, and we'll see how that plays out. But there was no deal made here.
There was, as you say, worse than no deal. We shot ourselves in both feet. And now we are in a much less. powerful position because we've alienated all those allies we need to create leverage on China in the future. And so it's an unmitigated disaster. I want to pick up on the Washington consensus again, because we're talking about Donald Trump. And I think it's fair to say we agree that his policies here are dumb and destructive.
But there is the issue of the consensus again. And even today, Gretchen Whitmer, the Democratic governor of Michigan, somebody many people think will run in 2028. She was out giving a speech and basically saying, look. I don't agree with how Trump is doing it. But in general, tariffs are important. We don't produce enough here. You know, we produce too much there. I have talked to many Democrats who.
They will say that they don't agree with how Donald Trump is doing it, but he's sort of right about China. And my worry again is that they are wrong. They are trying to compete with the China of 15 years ago when maybe you could have tariffed your way out of it. And that the impulse Democrats have. on China is to be Trump-like.
that there is no one making a case for openness. Even if you don't believe in that case, I think it would be healthy for the debate for some people, aside from maybe just you, to be making it, but also no sense. that the technology transfer might now need to go in the other direction. And I guess the final thing that worries me is that there is the possibility...
for the relationship to call into existence the thing that is supposedly preparing for. Even during the Biden administration, when they're beginning to build technological walls. A lot of the reporting I saw suggested, I think quite reasonably, that China understood that as Washington coming to the view that it would try to... force China's progress to slow, that it would never allow it to achieve not even expansionary or hostile ambitions, just development at the frontier of technology.
And the agreement in Washington that China should be treated as an antagonist. certainly has the possibility of making China more of an antagonist because, well, don't they then have to treat us as more of an antagonist? And I'm not trying to take responsibility off of them. They've done plenty wrong there too, but I worry that we are.
careening towards a world where the tit for tit and the tat for tat almost ensures a future of hostility. And neither side seems in any way interested in even defining what an off-ramp from that might look like. So let me respond in two ways. I want to go back first to the point we were discussing about just the unseriousness of this administration. The morning after Trump... announced he was putting this massive tariff on China when the markets really melted down.
I actually called our editors and said, not the most important story of the day. Not the most disturbing story of the day. Please don't lose sight of this story. On the day before we learned, or maybe in the same day, that Laura Loomer, a conspiracy peddler who believes 9-11 was an inside job, was in the Oval Office.
And we have since learned, apparently or reportedly, urged Trump to fire the head of our national security agency and his deputy, two of the most respected intelligence professionals in the world, because they weren't pro-Trump enough. Who knows what it was, Ezra? And Trump did that. Fired the head of basically two of our most important cyber warriors, defenders and warriors, widely respected around the world. He did that on the advice of a political witch doctor.
I mean, it's market up or down. How can we be a serious country? Talk about things that filter down. that then filters down through the whole bureaucracy. Can I offer up intelligence that Trump will not like? So that's, to me, just, we have to get that in there. Let me offer a useful comparison here, I think. That just jogged for me. When two years ago, we were going through the decline in conventional wisdom about China's prospects, one of the big things that was driving that.
was that Xi Jinping had embarked on a campaign of humiliating, firing, it appeared even sometimes disappearing. Members of the party, the Communist Party, and leading tech executives like Alibaba's Jack Ma, who had displeased him. China is weakening because the thing it has had, which is competent government that is willing to absorb internal disagreement and, you know, wants to see its top entrepreneurs and CEOs succeed, is collapsing into a peevish dictatorship.
Now, Jack Ma is back in the good graces and Xi Jinping is trying not to destroy China's tech sector and is giving warm speeches to rooms that include Ma now. And we are doing the other thing. We are, we, Donald Trump, Elon Musk, on a campaign of retribution throughout the federal government, on a campaign of retribution against CEOs and universities and members of civil society who have angered the administration.
It is we now who seem to not care about how competent people are or what success they've achieved or what kind of linchpin they are in our national strategy. We are doing the exact thing that not that long ago. People like me were sharply downgrading their estimation of China's future prospects on. China's reversed course.
But we're just getting started with our cultural revolution. Yeah. Which is why on my trip, I can't tell you how many people ask me, are you having a Maoist cultural revolution? of, my words, right-wing wokest, basically. Because what was the revolution, the cultural revolution? It was Mao unleashing his ideological youth to tear apart, basically, the deep state in China.
And it didn't end well. It set China back. It went on for a decade, and God knows how much it set China back. And so I just couldn't agree more, Ezra. It's one of the things that so troubled me watching this happen. But I want to go back to your other point. I'm not running for office, but if I were as a Democrat. I would not be doing Trump Lite. I would provide this comprehensive alternative of leveraging our allies. Long-term tariffs on China gradually implement it.
behind which we invest in the ecosystem of the 21st century with government help as much as we can and taking a long view because we got into this the long way. We're not going to get out of it the short way. Well, it gets to a question I rarely hear asked, which is what should the goal be? What is the aim of all this policy? And I think most of the time... In a conversation that is quietly structured by this Thucydides trap idea, this idea that there can be only one.
It's that the goal of our policy is to make sure China in wealth and might and strength. never surpasses us. The goal is to keep ourselves ahead or to keep them down, as opposed to the goal being our own strength and partnership. And I think that you could listen to that and say, well, wouldn't that be naive to have partnership? But Europe's strength isn't bad for us. The fact that Nova Nordis has created an extraordinary class of GLP-1 drugs is not a bad thing.
And honestly, I would like to be able to buy excellent, cheaper electric vehicles. I've never been particularly on board with the Biden administration's tariffs on that. It's always seemed to me that this idea that you were going to choose in the way they did. that your competition with China was going to completely overwhelm your electric vehicle transition, suggested maybe you were not as worried about decarbonization on the timeline as they said they were. Yes.
But I recognize these are difficult choices, but they do reflect this question, which is, is the endgame here? a relationship between two prosperous superpowers. Or is the endgame here? We are trying to isolate China and keep it from becoming the superpower it might otherwise be because we believe coexistence to be fundamentally impossible. And I think if you're getting people to speak honestly now, what is most changed in the Washington conversation about the two countries?
is that almost all the key figures in Washington now believe the latter. They believe coexistence is impossible. And so you are just in an all-out fight for power and that AGI supercharges. the need to win that competition because whoever gets to that first is going to have a huge advantage over the other. It sounds to me like what you're saying is the goal should be the other thing. It all should be the other thing. And I am happy to be the advocate of it.
We just saw a little snapshot of what the other looks like. And I think we're going to grind ourselves up. I think we're going to make ourselves less stable, less prosperous, and less able to manage. The three key challenges of the 21st century climate, a trust architecture for AI and disorder. And so I'm perfectly ready to be called naive, idealistic.
But just don't say, I haven't done my homework, because I have. Let me ask as we come to a close here. You've had two pretty significant trips to China in the last year. You've had many, many more behind that. On these trips... What was the thing you heard most that worried you most? Or what was a meeting you had or the thing you saw that shifted your perspective the most? What do those of us who have not been there in some time or have never gone, what are we not seeing or hearing?
I travel with my colleague, Keith Bradshaw. Our colleague, Keith Bradshaw, has been in China for 23 years. We interviewed two professors who will go nameless, both super pro-American study, actually, the United States. One of them told us on his last trip to America as he was leaving, got to the gate, got pulled aside by what he assumed were FBI officers, taken into room. Give us your phone. The other one, when he arrived, got pulled aside, taken into a room. Give us your phone.
We're going to a bad place. And if we're going to that place, because that word gets out immediately. Boy, last time I was there, I got pulled aside by the FBI. Well, that word gets out. Then everyone says, I don't want my kids to study there. I don't want to travel there. I don't want to be tourism there.
We're going to make it a self-fulfilling prophecy. You know, there's a joke among the Chinese that the whole war, this is a little ethnocentric nationalism, the whole conflict is actually our Chinese versus their Chinese. You know, one of the things, Henry Kissinger is a very controversial figure in history. We know for all kinds of things from the Cambodia bombing.
But I would say he is missed right now in one sense. He was a Republican who understood the importance of this relationship. And his last book was about AI, which he wrote with Craig Mundy and Eric Schmidt. The Republican Party has no sort of credible authority figure right now that can actually, they have to listen to. And so it becomes just this competition for who can outbash China.
And that just doesn't end well. I can't emphasize to you more, Ezra, when I go to China, I'm writing about America. I'm trying to hold a mirror up of what it looks like to be serious about that 21st century ecosystem. And I'm doing it for my kids and my grandkids. And you can call me whatever name you want.
Then always our final question. What are three books you'd recommend to the audience? Oh, I forgot. Oh, Jesus. I'll tell you, I had the good fortune of speaking at this conference with Yuval Noah Harari. And he was so good because his whole talk was about trust. and whether we're going to learn to re-inject some trust into this relationship. And so my book recommendations or my thought is I got to go home and reread all of his books. Tom Friedman, thank you very much. Thanks, Ezra.
This episode of The Ezra Clown Show is produced by Roland Hu. Fact-checking by Michelle Harris with Mary Marge Locker and Kate Sinclair. Mixing by Isaac Jones with Amin Sahota and Nafim Shapiro. Our executive producer is Claire Gordon. The show's production team also includes Mary Cassione, Elias Isquith, Marina King, Jan Coburn, And special thanks to Zoe Zhangyin Liu, Kyle Chan, and Matt Sheehan.