Andrew Ross Sorkin

Well, look, first of all, I wanted to say that when I'm on this show and I'm not talking about AI or crypto, I'm just a civilian, right? So I'm not a spokesman for the administration on anything but the two issues that I work on. So I don't want to come across as someone who has special knowledge because I'm not part of the trade conversation. So I can't answer your question directly.

Well, look, first of all, I wanted to say that when I'm on this show and I'm not talking about AI or crypto, I'm just a civilian, right? So I'm not a spokesman for the administration on anything but the two issues that I work on. So I don't want to come across as someone who has special knowledge because I'm not part of the trade conversation. So I can't answer your question directly.

But what I would say is that with respect to the China relationship, I think what's happened over the past few weeks has been a very important stress test. And it's basically flagged some serious weaknesses or dependencies that have evolved in this relationship over the past few decades.

But what I would say is that with respect to the China relationship, I think what's happened over the past few weeks has been a very important stress test. And it's basically flagged some serious weaknesses or dependencies that have evolved in this relationship over the past few decades.

I flagged this in a previous episode that we did with Larry Summers where I said that 25 years ago it was a huge mistake to walk China into the WTO. And I think that just to build on that thought, One of the problems with walking them into the WTO is that they got what's called developing nation status. So you can either be a developing nation or a developed nation in the framework of the WTO.

I flagged this in a previous episode that we did with Larry Summers where I said that 25 years ago it was a huge mistake to walk China into the WTO. And I think that just to build on that thought, One of the problems with walking them into the WTO is that they got what's called developing nation status. So you can either be a developing nation or a developed nation in the framework of the WTO.

And maybe there was something legitimate to that in 1978 when Deng Xiaoping began his reforms, the average Chinese person was making $2 a day, by the year 2000, it was much more questionable. And it certainly makes no sense in the year 2025. And still to this day, China gets developing nation status. Now, what is the benefit to China of that? Well, they have a whole different set of rules.

And maybe there was something legitimate to that in 1978 when Deng Xiaoping began his reforms, the average Chinese person was making $2 a day, by the year 2000, it was much more questionable. And it certainly makes no sense in the year 2025. And still to this day, China gets developing nation status. Now, what is the benefit to China of that? Well, they have a whole different set of rules.

They're allowed to have tariffs. They're allowed to subsidize their industries. They have all sorts of different timetables for doing things. They're allowed to do things that the U.S. simply can't do. Now, how have they leveraged that? They have identified strategically certain industries that are choke points in the global supply chain, and they have taken them over.

They're allowed to have tariffs. They're allowed to subsidize their industries. They have all sorts of different timetables for doing things. They're allowed to do things that the U.S. simply can't do. Now, how have they leveraged that? They have identified strategically certain industries that are choke points in the global supply chain, and they have taken them over.

And the best example of this is rare earths. So there was some good stories in the New York Times about this over the past couple of weeks, which I think were largely accurate. China identified this as a critical industry. And the rare earths, the ore itself is distributed all over the world. I mean, China has some advantages there, but they're not huge.

And the best example of this is rare earths. So there was some good stories in the New York Times about this over the past couple of weeks, which I think were largely accurate. China identified this as a critical industry. And the rare earths, the ore itself is distributed all over the world. I mean, China has some advantages there, but they're not huge.

It's the processing of the rare earths that's very expensive, very complicated. And they decide to dominate that industry. And they're responsible today for over 90% of the processing of rare earths. And then the next step in the supply chain is that those rare earths get cast into rare earth magnets. which are a critical component in pretty much every electric motor.

It's the processing of the rare earths that's very expensive, very complicated. And they decide to dominate that industry. And they're responsible today for over 90% of the processing of rare earths. And then the next step in the supply chain is that those rare earths get cast into rare earth magnets. which are a critical component in pretty much every electric motor.

And so they're a critical component of the automotive industry, but not just cars, lots of different products. And I think China makes something like over 90% of the cast rare earth magnets. Well, by the way, this issue still has not been resolved. China has now cut off the United States. And so as part of this trade negotiation, we're going to have to resolve that issue.

And so they're a critical component of the automotive industry, but not just cars, lots of different products. And I think China makes something like over 90% of the cast rare earth magnets. Well, by the way, this issue still has not been resolved. China has now cut off the United States. And so as part of this trade negotiation, we're going to have to resolve that issue.

And I trust that it will be. I mean, what you've heard from the president and the treasury sector over the past week is that they're They've indicated a desire to engage in bilateral negotiations with China and to essentially deescalate this trade war. But I think it's been very useful, again, as a stress test to reveal our critical dependencies on China that we've exposed.

And I trust that it will be. I mean, what you've heard from the president and the treasury sector over the past week is that they're They've indicated a desire to engage in bilateral negotiations with China and to essentially deescalate this trade war. But I think it's been very useful, again, as a stress test to reveal our critical dependencies on China that we've exposed.

We never should have let this happen. Just from a national security standpoint, We worshiped at the altar of this free trade god to the point where we became dependent on China for these critical components in our supply chain. I think that was a catastrophic mistake. And I think that it's exposed these dependencies we've created on a nation that is not our ally and that we can't count on them.

We never should have let this happen. Just from a national security standpoint, We worshiped at the altar of this free trade god to the point where we became dependent on China for these critical components in our supply chain. I think that was a catastrophic mistake. And I think that it's exposed these dependencies we've created on a nation that is not our ally and that we can't count on them.