Trump Needs China — But China Wants a Multipolar World | Silk and Steel

Carl Zha (0:01)

Hello, and welcome to another episode of the Silk and Steel Podcast. I'm your host, Carl Zha. Today, I have the crowd favorite back, Einar Tangen, senior fellow from CICG.

Welcome back to the show, Einar.

Einar Tangen (0:18)

I love that crowd favorite. I mean, you'd lie really well. Have you considered politics?

Carl Zha (0:26)

Well, we're going to talk about our favorite politician today, Einar. We're going to talk about Trump. But more specifically, I would like to talk about Xi Trump Summit that just happened. This is a big event.

And what is your take on the whole thing? Did anything get accomplished? Why did Trump even want this to happen?

Einar Tangen (0:50)

Well, he needs something.

With Donald Trump, it's all transactional, so he doesn't want to meet you unless you have something he wants or he wants to shove some deal down your proverbial gullet. No, I mean, Donald Trump is in desperate need of rare earths. We all know that US munitions have been depleted. And it's not just the munitions. They take up smaller ones. But if you're going to sell an F-35, you need hundreds of pounds of rare earths. And guess who controls 90% of the market, including 98%? I mean, it's not like, okay, if I can't use this rare earth, I can use another one.

You have to have the complete set. And especially when it comes to these high-end magnets and some other things where you need extreme purity. China basically owns the market. They're the ones who can produce this at scale and at cost. So he's in a difficult position. He needs this. The question is, what is he prepared to trade for it on his side, but on the Chinese side, there's maybe just an iota of trust issue.

So given that he's not always been the most straightforward guy tearing up agreements like the JCPOA and then deciding he needs to go to war to try to get that agreement back. Always interesting. So there were, you know, I'm making fun of this, but there were some very, very important things that happened here. First off, foremost, Xi Jinping was treated as an equal. So this will be remembered as a watershed moment when it was the United States through the office of the president who in essence said China is our peer. Now, China isn't interested in being the US peer. What they want to be is cooperative. They want to have not a G2, but a multilateral, multipolar world which works for all countries. They've seen the mistakes that the colonial powers have made over the years, trying to enforce their ideology or religion or government systems on other people while taking resources from them. And they decided this is not the way to go. They prefer a civilizational approach which is, okay, this is going to be difficult, but we're going to sit and talk until we figure this out. They want to use peer pressure to a large extent, regional bodies who can come together and just make decisions and talk about things. And we saw that quite clearly with the BRICS meeting and also SEO. You had countries that are literally at war with one another, actually being able to meet and talk. And this is really the first step towards bringing about peace. So China has a different system.

The US has its own idea about maintaining hegemony, American exceptionalism, and how this is beneficial for the world. I don't know that the rest of the world agrees. But this was the moment when China ascended, at least in the US eyes, with the rest of the world watching to being appeared, to being treated as an equal, not something that the US is used to doing. So very important on the optics, also important because they talked.

If you don't talk, you run the risk of, you know, accidents, misunderstandings. The more you talk, the less, you lessen that risk. And this is a prime point for China. It also is important to the US. The US does not want a direct confrontation with China, nor does China want a direct confrontation with the US. But the US agenda, which is to contain China, obviously is not friendly. So how do you handle a situation like this? And from China's point of view, following the civilization model, you continue to talk, you figure out what you can agree on, as opposed to what you can't agree on. But in the end, there wasn't much there for Donald Trump. He had been hoping to get a big order of Boeing airplanes, and also a commitment to buy large quantities of American soybean, wheat and corn. Obviously, those had not materialized. So on the concrete front, there wasn't much. The Board of Trade was once again referenced, and they said they were given a task to reduce tariffs on both sides by $30 billion, based on the idea that none of these tariffs should have been put forth in the first place because they have really nothing to do with national security. So you have the pandas out there, like once again, great optics, but not exactly going to do it. The two-month extension of the trade truce.