Kind: captions
Language: en
sunzu famously said the Supreme Art of
War is to subdue the enemy without
fighting but in today's high stakes
tensions between America China and
Russia what if the ultimate Battlefield
isn't military it's economic today's
guest Edward Fishman former lead in the
state department reveals the unspoken
methods of the US economic Warfare
machine including the risk and reward of
weaponized tariffs the hidden Ripple
effects of sanctions and how you can
topple a government without firing a
single shot as China threatens to fight
America in whatever kind of War it wants
and tensions continue to rise in the
Russia Ukraine war this is an episode
you do not want to
miss let me ask is Trump making a
strategic error by putting tariff on
friend and foe alike I do think he is um
tariffs can be a useful tool right I
think for too long the US has not
protected strategic industries from
competition from countries like China
China has become the dominant player in
things like electric vehicles and the
most recent Administration put 100%
tariffs on Chinese electric vehicles I
thought that was a smart move because
what are you going to do if every single
electric vehicle on the road is made in
China not only is that bad for us car
companies but in the event that we're in
a conflict with China what are we going
to do right they can stop selling cars
to us so I think tariffs have a place
the thing I'm a little worried about
though when it comes to tariffs on
friends like Canada and Mexico is that
if you do this companies can't make
investments anywhere really that they
feel confident about besides being in
the United States you basically move
towards something that looks like
autarchy when everything is made
domestically from an economic standpoint
that leads to higher prices slower
economic growth but actually the thing
that worries me more is if you look at
history when States can't acquire
markets and resources through open trade
the temptation to conquer or go to war
with other countries goes up quite a bit
it's one thing to oppose tariffs or
sanctions on an adversary like China
which is something I'm very much in
favor of but then when you start
wielding these weapons against Canada
Mexico the EU Brazil everyone sort of
starts hedging and and you no one really
feels confident that you can have a
long-term relationship with the United
States how do you create a situation
where the US isn't vulnerable to China
cutting them off not just from electric
cars but from uh medication chips
whatever the case all the things that
give us our modern way of life so much
is manufactured in China without
tariffing to incentivize people to
manufacture in the US it feels like we
went so far in the other direction in
the globalist period that we really did
put ourselves at pretty high risk the
reason is that the global economy we
live in is still designed for the benign
geopolitical environment of the 1990s
the ion days of the 90s but we have
intense geopolitical competition between
the US and China principally but also
Russia Iran and other countries so I
think you're right I think we need to
incentivize domestic manufacturing of
strategic Goods things like automobiles
like Technologies like semiconductors
right and I think that's why the chips
Act was a smart move right you're
putting in $50 billion to incentivize
the production of semiconductors here at
home instead of relying on countries
like Taiwan right the thing that
I worry about is tariffs against
everybody because you can't go toward
100% domestic production on your supply
chain it's just not how the economy
works so what I would support would be
higher tariffs on countries like China
where we have really significant trade
deficits and we're really worried about
China weaponizing things like critical
minerals against the United States the
the reason I called my book Choke points
are these are areas of the global
economy where one country has a dominant
position there's very little redundancy
there are a lot of these toe points that
that China controls so I think taking
proactive steps to reduce our
vulnerability is is essential whether we
should be doing that against Canada
where we actually have balanced trade
doesn't really add up or make sense to
me why do you think Trump is doing it
and what do you think is going to be the
knock on effect it's a good question
he's doing it actually under a 1977 law
called the international emergency
economic Powers Act this law is
specifically for National Security uses
so if you look at what Trump is saying
about the Canada and Mexico tariffs as
well as the actual legal authorities
that are being used for them it's all
about this idea of fenel and migrants
coming into the United States he's
basically trying to use the tariffs as a
cudel to force the Canadian and Mexican
governments to take the migrant and
Fentanyl issue more
seriously that's not necessarily a bad
thing right I mean that's how you use
things like sanctions or tariffs to a
certain extent a 25% tariff on Canada I
think is out of step with the degree of
the fentanyl issue coming from Canada I
think last year there was a couple dozen
kilograms of fentanyl seized at the US
Canadian border so it's not a massive
problem on the northern border with
Mexico it's a bigger problem and I think
there's a fair question whether or not
there we should be applying pressure to
The Mexican government and I support
that the challenge with tariffs is that
most American production industries like
the car industry are heavily dependent
on inputs from places like Canada and
Mexico and frankly this is largely
because of the US Mexico Canada
agreement or the US MCA which Trump
negotiated during his first term with
his us uh trade Representative Bob
leiser um you know who who sort of
pioneered that deal and what it did was
it created a highly interdependent North
American supply chain for things like
Autos right so for Ford or GM to produce
automobiles in the United States they're
sometimes relying on Goods that are
coming back and forth between the US and
Mexico multiple times if you put those
tariffs on for Mexico and Canada it's
it's actually going to benefit companies
like Honda who are making their cars in
Korea with no us content over an
American car manufacturer who needs to
buy inputs that are going into their
vehicles from Mexico or
Canada okay so if you had to Steelman
Trump do you just see him he's a loose
cannon he doesn't know what he's doing
he wants to slap people around or uh is
there is there at least something
internally consistent to Trump where
you're like he's wrong it's not going to
have the effect that he wants but at
least I understand what he thinks look I
think that Trump clearly likes using
economic Warfare um he loves tariffs he
said it's the most beautiful word in the
English language he downgraded it to
Fourth people gave so much love God
religion maybe I think are the first
three having served in government I
understand the appeal of sanctions and
tariffs for one they're very easy to
impose back if you go back to the 1990s
for instance when the US had a embargo
against Iraq this is when Saddam Hussein
had invaded Kuwait in 1990 um to
actually do effective sanctions on Iraq
back then you needed 13 years of US Navy
ships patrolling the Persian Gulf 247 to
ensure that oil wasn't going out of
Iraqi ports right so that was a pretty
burdensome type of an operation what
happened is in the wake of hyper
globalization in the 1990s when you
start getting these deeply integrated
financial markets and Supply chains
today president Trump can sign a
document in the Oval Office and just
with that signature impose economic harm
on another country order of orders of
magnitude more than that 1990s embargo
just by weaponizing these choke points
like the US dollar Financial system like
semiconductor Supply chains like oil
supply chains so I think that there's a
temptation to use these tools because
they're powerful and they're very easy
to use just takes a presidential
signature and so I I understand why he
likes using them I think the other thing
and this is just so far kind of reading
between the lines of his first month
back in the White House is it seems like
Trump is a little bit more comfortable
using these tools against countries who
may not be able to retaliate
aggressively against United States what
you haven't seen as much of is really
really aggressive measures against
Russia or China and so it could be that
Trump is sizing up the situation and
thinking well what's Canada going to do
right they're totally dependent on us
and so so we could wield this cudgle
over the Canadian government and they
frankly just don't have an alternative
well one of my favorite quotes about
history is that the only constant in
history is the law of unintended
consequences what do you think the
unintended consequences are going to be
here yeah so I think in the short run
the type of unintended consequences
you'll see are higher prices right and I
think this is the thing that might lead
Trump to eventually backtrack from some
of these tariffs because I think a big
reason he was elected was to bring down
things things like the price of eggs
right um I think a lot of the things
we're buying from Canada and Mexico are
basic Goods right Mexico um is providing
a lot of the fruits and vegetables that
Americans eat in the winter time because
it's warmer there than it is here you
know Canada is providing you know
millions of barrels of oil a day to the
United States I think you it could wind
up worsening inflation um I think it
also could wind up um hurting American
manufacturers and I think this is
arguably the reason that Trump would
move away faster and just going back to
this car example right the Autos that
are produced in the US are not 100% us
content right most of the inputs that
are going into them whether it's the
breakes or the windshield might be
coming from Canada or Mexico so the
costs for manufacturers in the US are
going to go up and and if there are no
if there's a 25% tariff on Canada and
Mexico but a 0% tariff on South Korea or
Japan or Germany for that matter you
know BMW or Honda Toyota who are making
Vehicles outside of the United States
not using content from Mexico and Canada
are actually going to have a benefit
over us-made cars so to me this is the
biggest unintended consequence which is
you actually might wind up hurting
domestic manufacturing if you tarff
Canada and Mexico in particular a
company like Ford so many of their parts
are touching something in Canada that
they're going to end up raising the cost
on those Elements which ends up hurting
them but if I'm Trump and I'm trying to
incentivize people
to manufacture everything in the US so
hey you're doing the windshield up in
Canada but I want you to stop I want you
to start doing it in America yeah feels
like he knows in the short term there's
going to be the raising of prices but in
the long term it's going to push people
to come here to America to do their
manufacturing that's going to create a
lot of jobs and if he can create the
jobs faster then prices rise or prices
are going to temporarily rise he's going
to blame Canada and say all they had to
do was solve the fenil crisis if they
had dealt with that no one's going to
understand how much you're talking about
he's going to have a spin story for that
anyway uh if they had just addressed
that seriously if we had a serious
partner or they became the 51st state
we'd be fine there'd be no problem and
by the way you can buy there's all these
other cars coming in from all these
great manufacturers and they're doing
fine and in the long run trust me your
manufacturers are going to bring
everything home here it's going to be
better for you um given that he
isn't applying it to Japan where we get
a ton of cars he's not applying it to
South Korea he's not applying it to
Germany won't the prices go up on
certain things but migrate over to
others which buys him time to force
people's hand to bring manufacturing
home to the US look I in an ideal world
that would happen I'm I'm skeptical and
I think this is why you've seen things
like even you know unions for automakers
come out against these tariffs because
car makers don't have that much time
right I mean how long would it actually
take to build a fully indigenized supply
chain for Autos it would probably take
musk pull that together a lot FAS than
that I don't think that the US car
industry could survive that long on the
one hand he talks about using tariffs
for structural reasons like bringing
jobs back to America or raising revenue
for the government right but then on the
other hand he talks about tariffs as a
tool in negotiation right where he could
use tariffs and then trade them away in
exchange for you know Canada beefing up
uh security at the US Canada border
right for the first thing to happen for
any structural change like the
investment to come into the US you need
tariffs to be permanent right because
any investment that's going to be made
in the US in a new Factory you're not
going to make that investment if you're
going to say oh well these tariffs could
come off in two years and all of a
sudden I'm going to be undercut on price
by the Mexicans yet again right who
whoever building that factory has to
have assurance that these tariffs are
going to stay in place for at least as
long as it takes for that factory to get
set up to start making their product and
to start selling their product so it's a
long proposition right but then if
you're just using these as sort of cards
to play at a table that's not going to
then you know you're going to keep
basically the US investors are going to
wait till the very last minute to
actually start re onshoring their supply
chains right and so I think that
ultimately and look this is normal for
any us Administration there are always
different factions who want policies for
different reasons there are definitely
people in the current Trump
Administration who see tariffs as
something that are just good and they
should be in place forever and we should
never trade them away that's that is
like the prot Tariff faction right but
then there are other people in the
administration who see tariffs as a tool
that Trump can use as a dealmaker and
frankly I think that is personally where
Trump stands like I think Trump sees
himself above all as someone who loves
making deals he's definitely beat that
drum to death yes and so even with the
Chinese right you'd be surprised at what
he'd be willing to give up in exchange
for a big trade deal with with xianping
um and in fact he was prepared to do
that during his first term he got a
phase one trade deal with the Chinese in
January of 2020 and then that quick
unraveled after Co started what did that
look like like what was going to be the
give and take the Chinese were promising
to buy a bunch of stuff from the United
States um what Trump doesn't like about
the US Chinese trade relationship is the
deficit right we import a whole lot more
from China than China Imports from us
right and so there are two ways that you
could really address that right one
would be we buy less from China and
that's probably the the most practical
way to actually close the deficit what
Trump wanted which makes sense because
he's a businessman he wanted China to
buy more stuff from us and so the
Chinese were promising to buy large
amounts of agricultural products from
the United States like soybeans and
whatnot um most studies that have shown
sort of how China behaved since the
phase one trade deal show that China did
not live up to its commitments they did
not buy the goods that they said they
would interesting so did that play out
during the Trump term or that was all
after Biden comes into office CO's in
full swing and they're like oh
disruption can't do it sorry was it
something like that this deal was signed
in January 2020 I think even as during
2020 they weren't living up to their
commitments the US China relationship
collapsed in 20120 because I think uh
Trump believed that xianping lied to him
about covid which I think is true he did
lie to him about Coan ping lied to
everybody yeah right exactly so and and
I think Trump rightfully thought that
that was what undercut his presidency
and so um and so China never lived up to
its phase one trade deal commitments and
um uh Robert leiser who's the US trade
representative during the first term who
was really the architect of Trump's uh
China tariffs on the phase one deal as
well as the architect of the US MCA
which is the US Canada the Mexico
agreement um I spoke to him at length uh
when I was researching and writing choke
points and I think for good reason he's
very proud of usmca of the US Mexico
Canada agreement and and not quite as
proud of of the China Phase 1 trade deal
yeah I want to quote something you said
in the book in the years to come
fighting and winning economic Wars will
only get harder especially as China and
other countries strengthen both their
offensive capabilities and their
defensive fortifications and the US is
not going to be able to um be a one-way
bully and China has spent a long time
with a lot of different initiatives not
the least of which is the belt and Road
initiative uh building a bunch of allies
building a smaller Reliance on the
American economy becoming more
self-sufficient if I'm Trump and I'm
looking at that trade imbalance and I
know that there's a potential um hot war
that needs to be avoided how does he
play that game well so he just doubled
the tariffs they're now at
20%
um if he has a partner in Gin ping who
he can't
trust is this gonna work does this fall
flat like where do we go from here yeah
look I'm I'm glad that you pic picked
that out because I think there's a
fundamental difference between the risks
of an economic conflict with China today
than during Trump's first term I think
one of the the sort of biggest legacies
of Trump's first term and one of the
stories that um you know was most
interesting for me to sort of retell in
choke points is how Trump really broke
the taboo during his first term that
China was too big to sanction you know
for for decades China had been waging
economic war against the United States
and there had been very little reaction
from US presidents and I think they were
afraid of China like why not react so
many US companies were basically so
heavily invested in China
CH perspect exactly and so dependent on
frankly cheap Chinese labor to make
profits and those companies were so
influential that there was just never a
significant constituency to do anything
against China I also think China
skillfully took advantage of the WTO
rules basically where they joined the
World Trade Organization the US helped
them join the World Trade Organization
right after the turn of the the 21st
century and what they did basically was
they stayed Within the very narrow
letter of the law of the WTO but broke
the spirit of it over and over again you
know forcing us companies to transfer
intellectual property to them in order
to operate in the Chinese market you
know manipulating their currency which
of course this is something that is a
little confusing if you're artificially
devaluing your currency you're basically
making your exports more competitive
than other countries right and so what
China was doing was almost equivalent of
putting a tariff on us and that's what
they did last time when Trump imposed
tariffs on China they devalued their
currency it sort of offsets the impact
of the Tariff right and what happened
during the first Trump turn is is is
that China was surprised by all this
they were like hold on a second like US
presidents don't you know impose
sanctions on big Chinese companies um
but Trump did this a number of times um
he oftentimes has kind of walked back uh
from uh you know from sort of delivering
a knockout blow to companies like ZTE
and Huawei because shin
um was pretty skilled at flattering
Trump and and kind of persuading him not
to you know not to like you know deliver
the Cuda grass to some of these big
Chinese companies But ultimately like
Trump changed the Paradigm on us China
relations and Biden in fact built upon a
lot of the China policies that Trump put
in place but I think what's different
this time Tom is that you know that
trade and Technology war that Trump
started in 2018 that was 7 years ago
right and so China's had a long time to
prepare and the way they've prepared is
really in two different ways they've
insulated themselves by investing
hundreds of billions of dollars in
domestic self-sufficiency this is a
program called made in China 2025 where
they basically tried to um decrease
their vulnerability to these American
controlled choke points like the US
dollar or semiconductor technology but
then they've also built out their own
retaliatory capabilities and I think
this is the the area that I'm a little
concerned that Trump may not fully grasp
because I haven't heard him say anything
to this effect but he seems to think
that in any trade war with China we can
win because we import so much more from
them than than they import from us that
we can always impose more tariffs than
they can right because if we impose
tariffs on all $500 billion doar of
imports from China they only have 150
billion of American Imports that they
can tariff right but what China can do
now because of the sort of retaliatory
preparation is they can retaliate
asymmetrically they can impose sanctions
on individual us companies and in fact
when Trump put his first 10% tariffs in
place in early February China retaliated
not just with tariffs they actually
imposed sanctions on alumina which is a
DNA sequencer company as well as pbh you
know the American Apparel company that
owns Tommy Hilfiger um they put
sanctions on skyio an American drone
maker the largest drone maker in the US
and it caused the company to ration
batteries where now their Battlefield
drones that the ukrainians are using
they only have one battery per drone
because of these sanctions and so I
think that's what you're going to get
more of and you know even the antitrust
investigations into Nvidia and Google
that China launched I think that's
direct retaliation right so they can
pinpoint us companies and impose
targeted pain on them and of course they
can also restrict the sales of things
like critical minerals to the US which I
think have been in the news lately for
good reason because it's an area that
China has a complete dominant role in
yeah we are very much going to have to
talk about minerals and Russia and the
madness that's going on there but um
sticking with China for a minute so uh a
couple things on the table you've got
Apple making a $50 billion investment so
going back to your they have to believe
that something's going to be permanent I
have no idea what Trump said to Tim Cook
that made him go this is a good idea but
that to me is a huge signal that Trump
is saying something that is very
compelling now if they're G to just you
know shuffle and dance and hope that you
know they can make it to four years
before they have to do anything maybe
that's what's at play there um but also
in the book you had another quote the
gist of it was that the China and
America are finally waking up to the
reality that they are in a um
technological rivalry that is zero sum
and that the wild globalization of the
90s and the 2000s like that has really
come to an end and now that these two
really understand each other as pure
competitors if diplomacy fails you move
to economics but if economics fails you
move to kinetic we'll get back to the
show in a moment but first let's talk
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back to the show and for the first time
it really feels like we're on this
really Shaky Ground of diplomacy didn't
get us very far um certainly not if
Trump feels lied
to economic sanctions they've hardened
themselves against and so the final chip
on the table here is kinetic how do you
see like when I read the Tim Cook move I
I admit I concede that maybe your Trump
read is right and people are just going
to try to buy time but another reading
of this would be
that Tim Cook knows I can't say I can't
even acknowledge Taiwan as like a
separate entity have to be very careful
what I say uh that if anything if China
cut off um manufacturing there for us as
a company we're we're in the most
dangerous position ever so they're
diversifying now into India they're
diversifying theoretically now here in
the US um do you think that read is
plausible that people are realizing okay
hold on this is a Zer some game
technologically charged meaning it's
happening at the tech level more than
anything M uh and even our own
manufacturers want the Trump song To Be
Sung which is why they were all at his
inauguration because they realize we
need somebody to give us the economic
incentive to onshore what you call
friend
Shoring yeah I think with respect to
China I fully agree and that's you know
why I talk about the age of economic
Warfare right we've we've it's it's been
clear I think to anyone who's paying
attention that globalization's been dead
for a while right I mean that's crazy
man I'm really slow to wake up to that
you can't unravel a full economic system
overnight but when I say it's dead it's
the belief that economic relations are
win-win you really have to have you know
you have to be wearing some real rose
tinted glasses to think that American
economic relations with China or Russia
are win-win right I mean I think there
there have been zero sum for quite some
time in in certainly in specific sectors
I think with a country like Russia
they're Zero Sum in almost every sector
there may be a couple exceptions so
these tariffs these sanctions these
export controls that the US imposes that
China imposes that the EU imposes Brick
by Brick they're building a new world
economy that's what's happening it's
it's taking time right it's not it's not
overnight it's not like 1944 when a
bunch of world lead leaders went to the
Breton Woods conference in New Hampshire
and negotiated the terms of the world
economy it's a different process right
it's a more halfhazard process that's
happening Yeahs to me exactly and so I
do think that um companies especially a
company like apple where they're just
incredibly dependent on China um it is
within you know very smart move by Tim
Cook to try to reduce uh Apple's
exposure to China it's hard for them to
do just given the depth of it I was
happy to see this announcement so I
support decoupling um from China
especially in critical areas that
involve technology I think it becomes
much harder to decouple with China if
you're also picking fights with our
other big trading partners like Canada
and Mexico where they're not really
National Security threats you know
economic relations with Canada I think
are almost exclusively positive sum
probably the same with Mexico so you
know it becomes harder because at that
point you know you're you're picking
trade fights with all three of our
biggest trading partners right I'd
rather see a strategy where Trump
Corrals other countries like the
Canadians like the Mexicans like the
Europeans into a block a block of
democracies that can be stronger against
sort of uh Chinese Le block right and
that that's this concept of friend
Shoring that was a word that uh Janet
Yellen who was the treasury secretary in
the Biden Administration used but even
leiser who sort of the architect of the
Trump uh tariffs he put out an opad
recently where he made the he he was it
was an opad in the New York Times that
was explaining why tariffs are actually
good and I think he did this because
there was kind of a um uh an onslaught
of anti-ar uh writing both in the times
and in the Wall Street Journal and and
leiser was saying No actually they're
good but the argument if you read
between the lines was what we need is a
block of democracies where we all have
very low tariffs against each other but
then big tariffs on you know the
dictatorships like like the China of the
world okay uh uh as we go into the
Russia of it all one thing that I found
really compelling about your book is in
getting to look at the history of how
this stuff came to be I had the same
sort of shock that I had when I realized
that oil is a relatively recent
phenomenon like oil is like the last
hundred years and reading about
Churchill and realizing oh there was
like a moment where he was like wait a
second our naval fleet could move a lot
faster if we used oil instead of coal
and so he goes on this big pitch to get
them to switch over to oil and then you
realize oh wait a second this is why
they were trying to have relationships
with the Middle East this is all about
uh economics might it it wasn't a um
just sort of inevitable law of nature I
felt the same way about tariffs that the
Playbook sort of happened and people
realized oh wait this was really awkward
and last minute and it was like reactive
instead of being proactive but then a
Playbook started forming and so now
people know oh with an executive order I
can stroke this and I can um really do
damage to another country and I can get
them to to heed uh
given that Playbook of things that have
been put together relatively
recently what is happening right now
with Russia because as somebody who
didn't really understand the economic
Warfare of at all I was like sort of
dimly in the back of my mind but I
didn't really engage with it um my
initial reaction was why would you
weaponize the dollar like now you're
just giving them every incentive to say
oh we want to be a part of brics uh we
want to get rid of the hemony of the
American dollar we no longer want them
to be the reserve currency other people
like China started selling their US debt
like crazy and um I didn't I'm still not
sure what to make of the way that we
have treated Russia um confused even
more now with what just happened
recently at least as of this
recording with Trump and zalinsky
breaking down over the mineral rights
and then Putin coming in and saying hey
I've got some minerals too look over
here baby um what do you make of all
that is this Putin just trying to um get
out from under all those sanctions and
get back in the financial good graces
yeah look I think um just reading
between the lines and look I I've you
know dealt with uh Russian officials for
for many years uh you know back when I
was the Russia and Europe sanctions lead
in the US state department um I myself
have been sanctioned by Russia when I
hear Putin come out and saying hey you
know check out our minerals what that
tells me is somebody who you know has
spent a big part of my career
negotiating deals um with other
countries it's a sign of desperation
right it's it's a sign that he needs
something he doesn't want the US and
Ukraine to sign this minerals deal
because he realizes that his best chance
at getting what he really wants which is
sort of a get out of jail free card
where you lift sanctions on Russia and
even more than that a rupture in the
transatlantic relationship basically
breaking the US and Europe right across
the Atlantic ocean and destroying NATO
his best way of doing that is by
preventing this us Ukraine minerals deal
because he knows that Trump doesn't care
about the appeals to alliances and
liberal International order these are
things that when Trump hears it he says
you know I could care less right but
what he does care about is investment
for us companies you know uh mineral
resources for the US economy and of
course being less vulnerable to these
choke points that China has over the US
like crit IAL minerals like graphite
like lithium these are areas that China
dominates that we could potentially have
an even better and more reliable source
from in Ukraine so when I when I hear
Putin basically trying to you know sty
this deal at the last minute I I think
he realizes that zalinski actually has
come up with potentially a wedge issue
to get Trump back into the Ukrainian
side that of course I think it's been
called into significant Jeopardy after
the whole blow up in the Oval Office and
know it's hard for me to explain exactly
what happened um if I you know just sort
of watching the tape and studying it um
it does kind of seem like JD Vance um
was sort of picking a fight to a certain
extent uh with zalinsky and then I think
Trump kind of came to Vance's Aid sort
of in that fight had a very different
take oh interesting what was your
thought do you know Robert Green's 48
Laws of Power um I'm familiar with it
but I haven't read it okay so law number
one has never outshine the master uh
zalinsky needs something from Trump so
in this case love him or hate him he's
the guy that you don't want to outshine
you've got all the cameras of the world
on you the tenor in the room changes
when he turns to uh Vance and says um
what diplomacy are talking about like
Russia has um broken treaties over and
over and over and the thing is I feel
for the guy like he is on the front line
risking his own life watching people who
I will choose to believe because people
are going to say what they're going to
say but these are his countrymen dying
on the front lines and he's seen God
knows how many mothers who have lost
children have the weight of having to
send these young men uh into battle to
die and he's like this guy will break
this stuff all the time I'm not going to
give you mineral rights unless there's
some security guarantees we can talk
about that in a minute yeah then you've
got Vance who um takes the emotional
bait and is annoyed that this guy's not
being thankful enough and gets put in a
weird position where In fairness I think
zalinsky had a killer question though he
never should have asked it not not in
that situation you have a goal in mind
you were trying to get this war ended
you're sitting across from the guy that
can make it happen and you literally
fumble the ball uh any one of them could
have diffused the situation none of them
did but I feel like if don't outshine
the master know who you're dealing with
it's like law 22 and he was not thinking
about what Trump and Vance are like and
so he totally misplayed that he's got to
in another one of the laws I forget the
number but is um play the surrender card
like no when to show your vulnerability
know when to roll over and show your
belly and let that person like trigger
that desire for them to take care of you
and once I started looking at the moment
through Robert Green's lens of the 48
Laws of Power which is basically
makavelli you're like oh my God zalinski
misplayed that moment because if he I
mean you even said like X knows how to
play Trump and zalinsky doesn't and if
again I'm I'm not saying I'm on Trump's
side I so wish he had been the bigger
man and just gone uh look we're not
going to talk about that right now guys
everybody clear the room I need to talk
to these two with the cameras off and
then fine slap him around all you want
but the way that it all became
theatrical you've got JD Vance playing
to the crowd because I think he realized
he'd been backed into a corner and he
didn't have a great argument which never
should have been brought up but it was
and he didn't know what to do with it so
anyway just because is total cluster
[ __ ] but um I think zalinsky could have
just come in known okay I have to show
my belly I have to make them look like
the hero I've got to be grateful on and
on and God it would have been such a
different play yeah well Tom I'm kind of
surprised you've never done diplomacy
because I thought that was a brilliant
analysis to be honest shout out to
Robert Green yeah no I I I I agree I
think that I understand I mean look it's
it's hard to it's hard to put yourself
in zilinsky shoes right he's a wartime
leader his country's been invaded and so
I can imagine being triggered when you
hear things like you know no doubt you
were you provoked them or something you
know dude that [ __ ] was crazy he was
like he he did it or he's a dictator and
this is his fault I forget the words
that Trump used forgive me forgive me
but the sentiment was God awful but I'm
I'm I'm with you though I think that you
know us support for Ukraine is
existential for zalinski and so if that
means he has to come and show his belly
to to Trump I think it's wor worth doing
that um so I I I don't dispute what
you're saying um I do wonder if JD Vance
was also like you said sort of playing
to the crowd or trying to show show up
you know the you know the Maga folks
that you know he's just as as badass As
Trump is or something hard for me to say
you know but that that was sort of how I
interpret it just because it's so rare I
mean I like I said I've been doing this
stuff for a while I've never seen
anything like that right the idea that
you have like a a public diplomatic spat
in the Oval Office while the camera are
rolling I mean do you love or hate that
they did that on camera I hate it I hate
it I am conflicted I hate it but I love
it so much I hate it because the cameras
were what made it fall apart because
privately I think Trump could have and
I'm not saying this is good I'm just
saying it's what he would have done he
would have reestablished his dominance
he would have told him don't tell me how
we're going to feel don't tell me how
we're going to feel like he would have
shut it down and been like you're out of
your [ __ ] mind you need to thank me
right now and zalinsky hopefully would
have come to a senses and gone even
though have to eat crow in this moment
and not saying I should have to but I do
have to and would have done it because
there's nobody watching but everyone was
playing to their base the reason I love
it is because we live in an age where
for the first time transparency is
really possible and it's a double-edged
sword it's not going to be all good but
wow we can really see how this stuff is
done now yeah yeah no and look I think
if that was all genuine and there wasn't
any playing to the crowd I'm with you I
I do worry though at least in in in the
advance side of the equation there did
feel like an a theatrical element he was
the one that felt theatrical they were
all aware of their base watching for
sure yes and of course and people forget
this like zalinski is a democratic
politician too and it's it's hard for
him as well in Ukraine to be seen to you
know sit in the Oval Office as comments
are being made about his country's
shared culpability in the war when
anyone can see that they were invaded by
their neighbor and not re respond but
I'm I'm with you I think you know at
some point you got to of you you know
bite your bite your tongue and and and
and do what it takes to get your country
going what I would say though Tom is you
know there there's this narrative out
there that I hear sometimes that you
know the sanctions on Russia haven't
been that painful to Russia and
everything's fine and you know if you go
to Moscow everyone's buying things and
department stores and everyone's happy I
think what that tells you though is that
it's more something just about like the
limits of economic Warfare where like
it's pretty hard to impoverish an
billionaire oligarch right like that's
not actually something sanctions do but
if you look across Russian society and
the Russian economy it's in very very
bad shape right now I mean they've got
interest rates at 21% is this because of
the sanctions yeah so you got a
benchmark interest rate at 21% whoa you
can't get a home mortgage in Russia for
anything below 30% yo and so it's it's
at the point now where if you're a
Russian the only rational thing to do
with money is let it sit in your bank
account like there's zero investment in
that economy except for the government
investment in military production in
weapons and those weapons are just
getting blown up on the battlefield in
Ukraine right so they're not actually
building anything right like they're not
it's not investing in the productive cap
you know uh capacity of the Russian
economy so I think what Putin sees and
what um you know the one area of the
Russian government that's still pretty
technocratic that's still has experts is
the central bank so the governor of the
Central Bank of Russia it's a character
in my book named Alvar nabul she's been
there for over a decade I mean if she
lived in the US she could be like the
chair of the fed you know she's
brilliant Economist and well respected
around the world she knows that Russia's
economy is going nowhere fast they
project that they're GNA have zero
growth this year and so you know you you
know study Kremlin statements long
enough that usually means you know
something like probably a significant
recession as opposed to zero growth I
mean the official inflation rate's 10%
so you got to imagine it's quite a bit
higher than that oh God you just give me
the chills yeah right I so like you
think what we've gone through in the US
in the last few years is bad I mean
things are really rough in Russia right
now and I think Putin sees this
opportunity with Trump as like his one
chance to get everything that he wants
which is he doesn't have to give up what
he's taken in Ukraine and he can get out
from under the weight of sanctions
that's what he's trying to do whether or
not Trump goes for it I'm not so sure
because Trump obviously is always
attracted to these ideas of business
deals and I think that's why the
Russians are playing today that but
there really aren't business
opportunities in Russia for the United
States right now and in fact it's quite
the opposite I think the key sector of
Russia's economy is the oil and gas
sector right so if you were to remove
all the sanctions on Russian oil and gas
what would it do you'd have more Russian
oil on the market and more Russian
liquefied natural gas on the market what
would that do to American companies
American LNG the liquefied natural gas
producers in the Gulf Coast they've been
making bank because Russian gas has
stopped going Europe right I mean
they've taken market share away from the
gas proms of the world you know gas prom
is a big Russian gas giant if Russian
crude oil floods the market and you get
lower prices American Shale producers
can't make money at an oil price that's
below $60 or $70 a barrel so if you get
lower much lower oil prices you're going
to wipe out the American Shale industry
and so I'm skeptical that Trump will
ultimately go for this I understand why
Putin wants it I don't really understand
from a dollar sense perspective what's
in it for the United
States okay uh let me throw out a a
hypothesis here tell me if this is crazy
okay so I'm Trump I'm looking at um I'm
racing towards conflict with China on a
technological front I understand that
the future of everything Warfare AI
drones all of it is it's all Tech it's
all chips it's um it's batteries and and
phones it's the things that rare earth
minerals are going to be necessary for
the US is distressingly low in rare
earth minerals um my major players are
going to be China and Russia stroke
Ukraine I go to Ukraine first because if
I'm Trump do I care about the moral High
Ground I'm not sure but certainly he
knows how to read the public and the
public was on the side of zalinsky I
would say until recently where it's
become a little bit shakier a little bit
less clear um certainly the mega right
is got some question marks or some are I
think swinging the other way I'll finish
that thought in a minute um so you've
got this play where you have an
opportunity to rebalance your um
Reliance on China with at least somebody
else maybe you can switch entirely but
you you now have options and when you're
the art of the deal guy you always want
options Leverage is when you can walk
away and if you can't walk away which
right now we can't walk away from China
you you're really in a tough spot so
cool I go to zalinski public is going to
like that better he was aggressed on
plus everybody already thinks I'm a
Putin public puppet so let me go to
zalinsky goes to zalinski thinks he's
got a deal and theoretically if they can
be believed that multiple times zalinsky
has said we've got a deal only to then
bulk now given what was said publicly in
that meeting I have a feeling zalinski
has been very clear and Trump has been
very clear but neither of them
understand each other and what's being
said is Trump is saying um I'm not going
to do security guarantees while you're
at War that's crazy I'm not going to
promise that America will come to your
they're they're actively shooting at
your people right now what kind of
security guarantee can I give you so I'm
going to intertwine our economies I now
care about what happens to your mineral
rights so I'm going to leverage as an
economic Warrior I'm going to engage in
economic Warfare against Russia the
likes of which they've never seen this
is me trying to channel Trump and
zalinski is saying bro this guy has
broken treaties multiple times that
means nothing to me if you can get him
to do a ceasefire what am I supposed to
do with that he's going to just
disregard it so what I need I will
happily share in these mineral rights
with you because it's existential for my
country but I need you to sign on that
dotted line and so they just keep
missing each other where you've got
zinski who doesn't believe I would say
at a minimum or let's all remember
zalinski has a right ring as well and so
they're not going to love him coming
back and being like no no no Trump said
that he'll care now about our country
sovereignty because of the mineral
rights well did you get in writing no
well he was a little weird about that
promised yeah right so I think they'll
be super sketched so he's like wait I've
got to get this in writing like you
don't understand and Trump is like
that's just a it's a non-starter
so the thing that um I find hard to
reconcile is the part of me that despite
understanding real politique hates real
politique because it's so aoral and so
here we've got I'm setting aside the
NATO pushed up against his border which
if you have a take on that I'll
definitely like to hear that yeah but
you've got Trump uh excuse me you've got
Putin who's like you guys have pushed
NATO right up to my doorstep and this I
will not abide and so um we're going to
reclaim what he sees is his rightful
territory anyway m MH we're going to
reclaim that but you've got a dictator
who poisons his
enemies going into a Sovereign Nation
invading it killing God knows how many
people and we're all like ignoring that
all a sudden not everybody but like it's
suddenly like receding into the
background of the conversation and I'm
like whoa whoa whoa wait a second like
the reason we don't negotiate mineral
rights with him is the same reason that
we don't negotiate oil prices with Iran
like what's happening right now yes so
uh I I don't know how to reconcile those
two impulses in my own mind but here's
here's here's the thing that worries me
Tom is I you're what you're saying is a
sign of Putin's efforts working right
where it's like he's changed the
conversation like you got to wonder like
who's driving the conversation like
because the conversation was all about
like you would wouldn't even be thinking
about business deals with Russia as a
conversation that was separate and apart
from an end game to the war in Ukraine
right the sanctions the idea was you
lift them if there's a peace that is
tolerable that you know it's part of it
that's the that's your carrot you know
that's what you get to play the card you
play at the negotiating table you say
Okay Putin you know if you pull back
from this part of Ukraine and there's
peace for this number of days and we
start lifting sanctions right Putin has
kind of reframed the conversation where
the US and Russia are just talking
bilaterally without really even
considering the Ukraine situation and
your point about you know Russia as an
adversary and like this is like why why
are we not negotiating oil deals with
Iran I think is really well said and I
think like I'll even say it just my own
personal uh experience you know I came
at this from as being a russof file you
know I studied Russian history Russian
literature I loved Russian culture I
lived in Russia for a summer when I was
a student um you know it's hard not to
you know if you you work on Russia
issues not to see the allore of a US R
Alliance right and in fact us and the
Soviet Union were wartime allies during
the second world war the problem though
is every single post Cold War president
has tried this you know uh Bill Clinton
and Boris yelton were best friends you
know uh George W bush said that he
looked in Putin's eyes and saw his soul
you know Obama I think one of the most
catastrophic decisions he made was he
became president 6 months after Putin
had invaded Georgia in the summer of
2008 and then he said he was was going
to reset us-russian relations so he
basically g