Frank Gaffney
Appearances
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But a lot of these other things I'd like to think we could get through in the first half of the year with close partners that have proven responsible and several others in the second half of the year so that you've got a 2026 that is on a bit more of a predictable trajectory.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Some of them, yes. The first 20% that are linked specifically to fentanyl precursors getting exported out of China, until there's real measurable evidence of that flow going down, which China could turn off like a spigot. It's one of the benefits of being an authoritarian government. They know who's doing what, they know where it's being banked, they could turn that off.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
As soon as they do that, those 20% could be reduced. Maybe they go to 10, maybe they go to five, maybe they go to zero. But if that flow does not measurably go down, they're staying in place, is at least what I hear. The others, if they get into the range of talks, they'll go from the sort of freak out stratosphere back down to just being high.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And I think that with other major partners, especially good allies that we've had free trade agreements with in the past, I think a lot of those tariff negotiations will go back close to zero. We'll maybe bank a few wins on investment and co-manufacturing of critical things.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But I would expect with the non-China economies, we're getting down to low to not very consequential rates by mid-year to the fall latest.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Yeah, well, it's just the kind of love that the Communist Party is so good at. They come and give you a nice hug, comrade, and sure hate for something bad to happen to your family. So just, you know, let's just smile for the cameras. And we're just a nice neighbor coming to say hello. But yeah. Don't make a deal with the Americans and better make sure it all works really well for us.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But the US is actually putting pressure on some of our partners and allies that are responsible for transshipment. And basically trying to make clear, China's giving you that burden. It's their... trade deficit that they're giving you to carry. And now you're getting grief from the United States about unbalanced trade, but it's China's unbalanced trade. So talk with us, work with us.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
We understand what's going on. And as long as you talk and work with us, we'll try to make sure the pressure goes where it belongs, but we're not going to pretend it's not happening. And when it comes to this, I think there's a little bit of the criticism of Europe and about seeking economic advantage from the threat you want us to pay to protect you from.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And so, in Southeast Asia, they don't want to choose. But guess what? You're just going to have to choose. Do you want access to the big American market? And do you want Uncle Sam to balance against this clearly aggressive neighbor? If you don't think it's aggressive, again, I always come back to, look at them picking a fight with the Philippines. Who does that?
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And so, if they're willing to pick a fight with the Philippines, Vietnam, you can't feel comfortable.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Yeah, I think it somewhat comes down to communications. I mean, when we were living through the crazy pandemic days, there were grocery stores with empty shelves. And it was kind of a question how it was communicated. But there was a tolerance for a time. for people to go through that. I don't think they want it.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But if it's communicated that, look, China's been eating our lunch, there's all kinds of problems with this supply chain, they are withholding it by being intransigent and confrontational with us, and we're going to backfill it somehow. I think people have to know why is this happening and how do we get from point A to point B where this is back online.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And if that can't be answered, then, yeah, there's going to be some unease and uncertainty, and it will come from the grassroots up. I mean, that's the main street the administration says it's going to bat for in all this. I think they mean it, but we're really going to have to be communicating this every step along the way. But I always live and learn.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
There are things on those shelves that are not made in China that people, when storms come, want to go hoard. And when those shelves are empty, it's not because of something in China. It's because people got crazy and went and took it all. And so, we'll have- Who would have guessed? A storm comes and there's no toilet paper. That's not made in China.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I don't think they've blinked. And I think there's actually something very different going on in China right now. Xi Jinping's been a different kind of leader. We've talked about that before. And there are a lot of off-ramps that were available to Xi Jinping where he might have even been able to improve terms with the United States.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Yeah. Well, I have to say, I know some of these people involved, and I sort of hate to see quick changes. And obviously, there are issues there that had to be addressed. I don't know why, but this was 100 days in this tenure. That's on the short end for those that are accounting. It's not the shortest, but it is on the short end. These guys have done like a thousand days of work.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I have never seen a beginning of an administration that is this active in taxing. But no one has said the change is happening because it's been active in taxing. So I'm still waiting to hear what the explanations are. I never take the first explanation to be the truth that I'll pay to the bank. But, you know, so I look at it. This is a year nine president. He had one term.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
He was still really, really active in politics and policy when he was out of office, was planning, talking, dealing with other people. So, when you're at a year nine, you're not asking these people to tell you what you think. You're not asking these people to tell you what your priorities and policies are.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
It's really all about, do you believe things are getting done the way you want to get them done? And you can change the great people that might be in the cabinet with anybody else. It's still this president, his priorities, moving in the direction he's going. And so we're in sort of a different place when it comes to the personnel question.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But is it a good look to make a change right at the heart of your national security team after 100 days? I mean, they're going to face questions about this.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I don't know if it's anything that says, we live in a world of systems and at the top of the government, there's a lot of systems. You put these different parts together, you start the machine going, you see things bump into each other, you learn as you go. Our media cycles are at light speed further ahead at any time they've been in the past.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I don't want him to, but those options were probably there if he'd have... Maybe used a little bit of conversation and sugar at the beginning of this administration and after these announcements. But at every turn, Xi Jinping has chosen escalation and confrontation and still is. So, I don't think they blinked yet. I do think they're under pressure. They just have a different kind of system.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
The multiple things being done at once are not like anything I lived through in the Bush administration. I think someone could just look at it dispassionately and say, okay, this system isn't doing what I want it to do for me if I'm the president. But I'd be lying if I didn't say there's also these inputs that come from the political world, the media world.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
The movement world where there's questions that get raised and presidents sometimes weigh that in. And ultimately, whether you like it or not, all of these jobs are at the pleasure of the president. You are switchable from day one or day 1000 and you don't get to know. And so I like Mike Waltz. I think he's a pretty smart guy, shrewd guy. The signal thing didn't look good.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I didn't understand why that happened the way it did. Was it a firing offense or worthy of moving or was it a symptom of other things that were just not clicking? But ultimately, the national security advisor's job is to be at the center of a tough, competitive coordinating process. It needs to flow. It needs to click.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And if change was required, the people on the inside would know better than I would. Yeah.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
It would be very, very unusual if Secretary Rubio did this long term.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
It's a pleasure to be with you, Mike. Thanks for having me.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I don't know what to make of it, honestly. The idea that we are continuing to have such discussions is frankly a bit of a puzzlement to me as well. We know for sure that the only thing that comes out of these things is delay and more work by the Iranians on their nuclear weapons program, which of course they deny they have, but we know they do.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And so, they have... warehouses that are getting too full and stuff not moving, ports that are getting empty. They're going to feel this, and they're going to feel it worse than we do.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And it's made more worrying by the fact that easily over a year ago, we were told they were only a couple of days away from having a nuclear weapon. At some point, that ceases to be in prospect. If it wasn't before now, the idea that we want to have further discussions with these guys, at the risk of it being in the near future,
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
The case that they've got these things, that they can actually operationalize them is insane, I think, in short. So, if there is a delay in these negotiations that winds up translating into more time for them, that's a bad thing. If there's the negotiations, which has the effect of delaying... Any action, that's a bad thing.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I personally believe that there's only at this point one option if you're serious about preventing the Iranian mullahs from getting nuclear weapons, Mike, and that is you put them out of business. And I don't think that requires a ground invasion. I don't think that requires blowing up their nuclear facilities.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I think it requires some strategic attacks on the IRGC, the Iranian Revolutionary Guard Corps that keeps these guys in business. That, I believe, could translate into, in short order... The end of this horrific regime that has brutalized the people of Iran for over 40 years and keeps threatening us.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
The question is the tolerance within China for eating bitterness, as they say in Chinese, versus Americans, who might start seeing some pressure at the pump and change in supplies, and small businesses might get squeezed.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I think it might look like what's been happening in Iran in the past week or so. A series of explosions. By my count, at least two of them, I think there have been three that have created these huge fires and a lot of damage, some loss of life, obviously. At least two of them, as I understand it, have been associated with sites associated with the Iranian Revolutionary Guard Corps.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Now, I'm not saying that those were targeted because they are trying to take down... And I do think it's the Israelis, the security apparatus and therefore the regime. I think that's where the Israelis are going, though. And it's where we ought to go to. Rather, apparently, they're drones and nuclear weapons related activities that seem to be being targeted as well. But the point is.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
There are known facilities, communications, networks, command and control centers and the like that if neutralized could, I think, create conditions under which The people of Iran's ambition for decades to free themselves from these guys could actually eventuate in the overthrow of this regime. And you know, Mike, I'm reminded here of an age where you may remember this too, of the day...
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
when the Ceausescus went from being president for life and his first lady to being corpses just like that. And basically what that involved was the security personnel responsible for their continued operations and changing sides and putting bullets in them. And suddenly that was done. That can happen in Iran, and I think it's long overdue.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And my bigger point is this, absent that, I think we're just deluding ourselves to think these guys with their ambitions and all they've invested are going to be talked out of actually completing their nuclear weapons program.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Well, where to begin? First of all, the people of Iran have risen up repeatedly. And you sort of qualified the point that they haven't by saying, something detective, you know, not decisively. Obviously, it wasn't decisive because that security apparatus was intact. It's a totalitarian regime, as you know. It's designed to try to make sure that nobody overthrows it.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And it's spent a lot of money and put a lot of people, not just the IRGC, but they've had Hezbollah, they've had the Pasijis, you know, all with the purpose of preventing
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
critical mass from developing but it's not because the people of Iran haven't wanted to or More to the point even done it in the face of all of that But you know when they were crying out literally to Obama just to you know, give them the Sort of blessing of the United States government Which he refused to do And nobody before or since has done it either, by the way.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
This has created a condition under which you've got to have, as you said yourself, strategic, targeted efforts to rupture the kind of control that the regime relies upon. And I would just say that I think that President Trump...
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
actually does understand this and i think his instincts say you just can't let this thing continue to metastasize i do think he's getting bad advice from people around him who are saying much as you did just now you know oh the military thing the military thing you can't do the military thing The Israelis have attacked Iran in retaliation, to be sure, decisively several times.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
They have thus not targeted the regime. They have targeted some of the bad guys who are operating under its protection. They have targeted some of the... facilities that support the nuclear weapons program. For heaven's sakes, they stole all of the nuclear data, records of the regime. So, they've demonstrated you can do things and you can, in fact, get away with doing things so far.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Now, they put a nuclear weapon on one or more of those missiles that they've in the past shot at the Israelis and it could be a different story. My point is, that's inevitably what's coming. If the Israelis, I think, best case, with our help,
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
make it possible for the people of Iran to liberate themselves from the regime that, as I say, has tortured them endlessly, but wants death to America as well as death to Israel.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Well, you probably know more about this than I do. I think some of those facilities that we know about are very hard to attack. I mean, they've not only built them deep underground, they've built them into the sides of hills where it's difficult to get access to them and all that. But the larger point is, who knows how many other facilities there are?
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And would you be able to take the ones down you know about? Yes, but maybe. But would you have any clue, let alone effectively impede the work that's being done in the other secret facilities? I don't know. I can tell you that the International Atomic Energy Agency... surely does not have a full understanding of what all is out there.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And I honestly don't think that your old agency and the intelligence community of the United States is confident of that either. So my point is, even if you knew where everything was, and even if you could successfully attack it, I think you're talking about buying some more time. But in the meantime, the Iranian regime is still doing all of the other awful things that it does.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And I think you said it very well. You're talking about endlessly destabilizing the rest of the region. To say nothing of, you know, attacking people like the Israelis, both directly and indirectly. And by the way, attacking through the Houthis, us directly. You know, it's the old Einstein, you know, crazy theory. It isn't working. It hasn't worked. It won't, in my estimation, work.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Try something different. And I think the different thing is, you know, he took out Soleimani. That was a huge step. And there are a few others in his food chain that we need to take down, too. And it could make all the difference, honestly.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Well, it's a fair test because there haven't been very many examples of Western leaders or counterparts to China that have been aggressive. For most of the last half century, the West has been pretty generous and accommodating, allowing China to skate under the radar as a developing economy, even though they're top tier on technology and eating our lunch. several different ways.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Well, it could have been an accident. I think the probability that it was an accident goes down when there were, as I say, not one but two other incidents in other places, one not far from the airport in Tehran, as I understand it, and the other, the Isfahan nuclear complex region. One's an accident, two may be a larger problem, but three is a plan.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And I think what we're talking about here is the Israelis activating capabilities that, amazingly, they still have inside Iran to do destruction on an immense scale. I mean, partly that's their work. They're targeting highly flammable things like solid missile weapons. propellant. You light that stuff off and you're going to get a big bang.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But more to the point, I think this is evidence that they know that time's up. And I think this is doing what they can without going frugally at the Trump administration. The Trump administration's desire to Not to do it just yet. Maybe soon, but not just yet. Well, I think the Israelis are right. We're on borrowed time. And I've been for years.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But it's now really the point at which there's plenty of highly enriched uranium that we know about. And estimations of how highly enriched it is, it differ. But it's close enough for government work, I believe.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And the idea that, well, maybe they've got all that, but they haven't figured out how to weaponize it or to actually integrate it into the immense number of missiles that they've got or other delivery system. Well, that's whistling past the graveyard, Mike. You can bet one thing's for sure. Having invested... Countless billions of dollars and decades now to acquire this stuff.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
They've got parallel tracks that they've been pursuing concurrently to get the weapons, the delivery systems, and so on. And I'm mindful of just, speaking of the time here, the United States of America in World War II went from inventing atomic weapons to dropping two of them on Japan in the space of about three years.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
It's frankly just my professional judgment that it is inconceivable that a country that has had access didn't have to develop anything on their own. They had access to the North Koreans. They had access to the Chinese. They had access to the Pakistanis, the Russians probably.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
So it's a fair proposition to wonder. The main counter argument to the thesis is that there was a first Trump term. It wasn't like this in terms of the rakes of tariffs going up and other kinds of pressure. But at the same time, China hadn't been pressing quite the same in the first term either. Now, at the end of it, they did give us the gift of COVID.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
If they didn't just buy this stuff outright, just get themselves a couple of nukes from, you know, Nukes R Us in Pyongyang, it's a miracle. But for sure, they should have been able to do all of this, even if it was just basically with access to what's on the Internet about building nuclear weapons. In less than 20 or 30 years, whatever it's been.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
So three years for us, 30 years for them seems unlikely. But if it was, it can't possibly be 40 years before they finish the job. So borrowed time translates into loss of life and maybe countries. And ours happens to be one of them, Mike, because as I've worked on for years, and you probably have too, scenarios...
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
that would enable a country that has inside ours assets capable of bringing in small nuclear weapons if they have, or a draft steamer off the coast with a scud that would pop it up and launch an EMP attack against this country. It's just not hard, frankly.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And if that's actually part of the plans, I think we are looking at possibly mass destruction inside the United States at their hands, not just someplace else.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And look, I don't relish a war with Iran or anybody else for that matter. I just think, you know, it's the old Trotsky line. You may not be interested in war, but war is interested in you. And a regime that has, as I said earlier, Mike, throughout its existence from day one, when the Ayatollah parachuted back in with our help,
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
You know, they've had this mantra in the streets, in their pulpits, whatever. Death to Israel. Death to America. And when they do that, it doesn't mean that the people of Iran who've been endlessly indoctrinated and brainwashed and all that want it or even would support it. But it doesn't come down to them. It comes down to the people who've got those weapons.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
and lied about it and there were consequences of that. But I think we're dealing with a more aggressive China now than even during Trump's first term. So to me, the dominant variable is Xi.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And I'm convinced we'll use them against not just Israel, but against us if they can.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
The obvious answer is that a lot of other people who also have the capability to go into the market and get themselves some nuclear capabilities. The hardest way to do this, obviously, is to go put all the infrastructure into place, the nuclear enterprise, as we call it here. back when we had one, just go buy one or five or 10 or whatever you decide you need. But that will happen.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
across the region. And unfortunately, what will also probably happen is that the Iranians will be emboldened to act quickly and not wait till other people get countervailing capabilities. And where do they do that? I don't know, but I think they certainly have made clear they would like to do it in Israel. And it wouldn't take that many nuclear weapons, as you know.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
to pretty much finish off that tiny piece of real estate.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Trump definitely turned the temperature up and there aren't really any rules about how do you sort of reset the world in a post-globalization era where the World Trade Organization ain't working and you can't fix it.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
If you don't have it that fully enriched, it's not as powerful and clean and all that. But your point is very well taken. They're there at the threshold. And they've got these centrifuges running all the time, which we allowed them to have under Barack Obama's famous deal. And it's just a question of time. And you couldn't have said it better.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
We don't have the kind of certitude about what is the actual state of their program to say we do have more time. And I think it's a bad idea to continue betting that that's the case. Well, Frank, on that...
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
uh yeah they've been eating our lunch from a technology perspective uh because they've been stealing everything yeah um subsidies yeah all kinds of stuff that you know the the past form of negotiation wasn't going to solve uh and it was getting to a point where i think it really was critical we had to change what we're doing.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I think the COVID was a wake up on supply chains in a number of different areas. And so just the accumulation kind of demanded a big hit of the reset button. But again, there just isn't much by way of a roadmap for what you fall back into.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
And because we made these across the board tariffs to get others to make better deals and rebalance there too, there's a lot of confusion out there that's got to get settled. But the prize is trying to reset this relationship with China and lessen our dependency and make sure that the neighbors and others are part of the program with us.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Well, primarily it's that. There are going to be friction points, transition costs. There are existing supply chains that need to move that can't move quite yet. There are inputs that we need to make sure that we secure how to get them, how to process them, how to get them into our supply chains.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
We need to work with allies that are important in these supply chains, too, to make sure they're doing the same kind of thing. I think that the Chinese... have been so undiplomatic about things of recent times that a lot of our allies and partners are reluctantly moving in this direction anyway. It's just that everyone's trying to figure out, how do we do it? It was at such scale that we allowed
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
the whole world to make China our manufacturing platform, that that level of dependency is just going to come with a lot of transition costs. So, we have to deal with the emotional and balance sheet freak out. Is that a technical economic term, a balance sheet freak out?
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I completely agree. And it also has held out another part of this conversation that really wasn't out there before. Everyone's talked about where the rivers come from and where the processing is done, but they hadn't talked about the hidden subsidies that were done by the Chinese government, where others had the capability to process. We did too, and so did some of our friends and allies.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But the subsidies inside China, basically using our money, taking from one pocket and put it into another. were killing the ability for our processing facilities to exist in a marketplace. And so, it's a form of dumping that was taking us out of the game. And so, what tariffs were doing, at least temporarily, and I think they could only last temporarily, is making it so that it is business viable.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
for us and some others to do some of this processing, to revive some of these facilities, and that can rebalance the flow of the market in a way. But people know about subsidies when they're buying goods, but they forget about how the subsidies distort the flow of processing, and that is a major, major part of this. Yeah, that's actually a great point there.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I don't think we will. I think the other thing that came out of all this is that the size and the power of the American consumer market is one of the purest forms of leverage there's been and almost no one's used it. We've always thought of, well, if we're dependent on buying things from other people, then they must have the leverage over us. And they do at times.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But these factories in China don't whir with activity at all if Americans aren't buying and taking the stuff in. And America is such a huge footprint. And so that is one of the big forces in this realignment. And because of the size of our economy, and it's a real size of our economy, they have kind of fake accounting. I'm not convinced their economy is as big as has been reported, but-
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Hours consumes a lot, drives a lot. And so this pain and disruption, it'll be felt in sort of the emotions of the stock market that go up and down. And so people will talk about, I lost this in my 501k, but 401k, I should say. This shows you how good I am at finance. But these things will come up, they'll come down, but they're coming down from a high watermark. And so we'll weather this.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
A lot better than the Chinese do. If we keep making deals with Japan, Korea, Taiwan, India, if there's real movement in moving manufacturing, Apple's talked more about iPhones coming out of India more than from China.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
I mean, the more these pieces move, China's leverage goes down, our supplies are diversified, and the president can reduce the tariffs and things kind of go back to normal post-globalization, post-WTO.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
Well, I think that we're going to hopefully before Memorial Day start to see some of the framework agreements, I guess they're calling them, with the big economies like Japan, Korea, maybe a few others, may become the pace setters for where the other deals might be flowing.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
As those begin to trickle in, I'd like to believe that Xi Jinping will find a phone and be able to call and say, I'd like to make a deal with you. Mr. President. The Chinese in the past, they would do that. It wouldn't mean a deal is coming soon. It wouldn't mean that everything's going to work out great.
The President's Daily Brief
PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
But it would get into kind of a predictable back and forth of communication that calms markets, buys time. I think that with China, we're in for a multi-year adjustment. I don't expect there to be kind of a new normal by the end of this year or maybe even by the end of the term of Trump's administration this time. I think we're on a glide path to negotiating a new normal there.