David Marchese

Well, you know, Michael, for the Iranians, this is really a you bet your country moment. If they say, no deal, we can't put up with the American demands, then they still have the sanctions on them. They are vulnerable to the Israelis going to President Trump and saying, see, we told you they weren't serious. So the only solution here is a military one.

On the other hand, if they do cap the program, then, of course, their entire position in the region as a power to be reckoned with is really harmed. So the Iranians are up for a really tough choice here. And their big question is, can they find a face-saving way to avoid military conflict? Can they manage an unpredictable President Trump and a diminished set of defenses?

On the other hand, if they do cap the program, then, of course, their entire position in the region as a power to be reckoned with is really harmed. So the Iranians are up for a really tough choice here. And their big question is, can they find a face-saving way to avoid military conflict? Can they manage an unpredictable President Trump and a diminished set of defenses?

David, good morning. I should say you are in Hong Kong, which is 12 hours ahead of us here in New York City. And I do want to share that when this story about the new tariffs on China broke at around 2 p.m. Eastern time on Wednesday, we here at The Daily were debating how early is too early to call you and wake you up. 5 a.m., maybe 6 a.m.

David, good morning. I should say you are in Hong Kong, which is 12 hours ahead of us here in New York City. And I do want to share that when this story about the new tariffs on China broke at around 2 p.m. Eastern time on Wednesday, we here at The Daily were debating how early is too early to call you and wake you up. 5 a.m., maybe 6 a.m.

But being the generous colleagues that we are, we decided to let you sleep in. But nevertheless, it's early. And thank you so much for being here with us.

But being the generous colleagues that we are, we decided to let you sleep in. But nevertheless, it's early. And thank you so much for being here with us.

So while you were sleeping, Trump announced a pause on his so-called reciprocal tariffs everywhere except for China. And you cover China for The New York Times. You've been following the standoff between the United States and China very closely. Just to start off, were you surprised by the news when you woke up?

So while you were sleeping, Trump announced a pause on his so-called reciprocal tariffs everywhere except for China. And you cover China for The New York Times. You've been following the standoff between the United States and China very closely. Just to start off, were you surprised by the news when you woke up?

Right. China will now be subjected to sort of a staggering figure, 125 percent tariff. That number has just been going up and up and up. What is the state of play in this trade war at the moment? Like, what is China's appetite for negotiating right now?

Right. China will now be subjected to sort of a staggering figure, 125 percent tariff. That number has just been going up and up and up. What is the state of play in this trade war at the moment? Like, what is China's appetite for negotiating right now?

So basically, because China has all of their eggs in this export basket, so to speak, they're extremely vulnerable if all of those exports suddenly become much more expensive to export.

So basically, because China has all of their eggs in this export basket, so to speak, they're extremely vulnerable if all of those exports suddenly become much more expensive to export.

If a trade war is going to be so painful for China, potentially, why wouldn't they just be motivated to cut some kind of a deal? Like, even if it's a deal that is really just a victory in name only for President Trump, why would they not be motivated to give that to him?

If a trade war is going to be so painful for China, potentially, why wouldn't they just be motivated to cut some kind of a deal? Like, even if it's a deal that is really just a victory in name only for President Trump, why would they not be motivated to give that to him?

So it really feels like you have two leaders of two of the world's largest economic powers who both feel like they need to project power. They cannot back down. They cannot capitulate. Any deal that they strike would need to save face. And all of that seems like sort of a bad combination from the standpoint of trying to de-escalate and strike some kind of a deal that's productive for both sides.

So it really feels like you have two leaders of two of the world's largest economic powers who both feel like they need to project power. They cannot back down. They cannot capitulate. Any deal that they strike would need to save face. And all of that seems like sort of a bad combination from the standpoint of trying to de-escalate and strike some kind of a deal that's productive for both sides.

So I'm curious, David, what could they do here?

So I'm curious, David, what could they do here?

If both sides don't reach a deal and this whole thing does keep ratcheting up and escalating in the ways that we've already been seeing, what does that look like, just practically speaking, for both China and the United States?