Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The trade war between the US and China is on pause.
Speaker 2: Officials from both countries have lowered tariffs temporarily, and they've
Speaker 2: agreed to keep talking. Both countries hope they'll be able
Speaker 2: to draft a new trade deal by early August. Wall
Speaker 2: Street welcomed that news, but it is an ambitious timetable,
Speaker 2: and I wanted to get a better sense of how
Speaker 2: realistic it is that in ninety days the US and
Speaker 2: China could resolve their differences and the trade war between
Speaker 2: the world's two largest economies could end. So I called
Speaker 2: up Nicholas Burns, who was the US ambassador to China
Speaker 2: under President Biden. It's one of the toughest jobs in government.
Speaker 3: You've got to both defend and push and resist on
Speaker 3: one hand, and then you've got to stretch out your
Speaker 3: hand to work with them and shake their hand on
Speaker 3: the other. But that makes for a very complicated relationship.
Speaker 2: Burns's job in Beijing was the capstone of a decade's
Speaker 2: long career diplomat. He's held senior jobs under Republican and
Speaker 2: Democratic presidents. Now, Burns is a professor of diplomacy and
Speaker 2: international relations at the Harvard Kennedy School, which is where
Speaker 2: I sat down with him this week to talk about
Speaker 2: what he says is the most important relationship that the
Speaker 2: United States has. I'm David Gura, and this is the
Speaker 2: big take from Bloomberg News Today. On the show, Nicholas Burns,
Speaker 2: the former US Ambassador to China, on the trade war,
Speaker 2: the challenges facing his successor, who was just confirmed by
Speaker 2: the US Senate, and what he's telling his students at Harvard.
Speaker 2: We're worried about the future of diplomacy. I want to
Speaker 2: start with the meetings that took place over the weekend
Speaker 2: in Geneva, and I'm curious how you look at the
Speaker 2: way they unfolded and the outcome of them.
Speaker 1: Do you see it as a positive step?
Speaker 3: Well, first of all, I started from a first principle,
Speaker 3: and that is that China's been the largest and most
Speaker 3: important disruptor in the global trade system for about three decades.
Speaker 1: Right now.
Speaker 3: There's a reason why the United States and many other
Speaker 3: countries around the world have placed terraces on China. China's
Speaker 3: manufactured exports, in particular, is because China has been dumping
Speaker 3: them around the world below the cost of production and
Speaker 3: it's been a killer for jobs both in the United
Speaker 3: States historically in the last several decades, but also around
Speaker 3: the world. So I have a degree of sympathy for
Speaker 3: the situation that President Trump and his team inherited, which
Speaker 3: was a situation that we left when I left in
Speaker 3: mid January as ambassador to China. The Chinese are trying
Speaker 3: to act now is that they're the innocent party, that
Speaker 3: they're the victim of this trade war by President Trump,
Speaker 3: and that they're the responsible party, when in.
Speaker 1: Fact the reality is quite different.
Speaker 3: Having said that, these are going to be very very
Speaker 3: difficult negotiations over the next ninety days, I think in
Speaker 3: the end, self interest and logic will prevent both sides
Speaker 3: need an agreement. China's our third largest trade partner. About
Speaker 3: a million American jobs depend on trade with China. Manufacturing
Speaker 3: jobs in China depend on trade with the United States.
Speaker 3: So neither country can afford to sunder the economic ties
Speaker 3: and the millions of interactions that our private sector has
Speaker 3: had with the Chinese economy over the last forty years.
Speaker 3: And I think in the end there will be a
Speaker 3: trade agreement, but getting there, I think is going to
Speaker 3: be extraordinarily difficult.
Speaker 2: During your tenure, you were trying to, if I may,
Speaker 2: rehabilitate a relationship that had worsened during the first Trump administration,
Speaker 2: develop conduits for communication, re establish economic and security ties.
Speaker 2: When you left that post, could you've envision this turning
Speaker 2: out the way that it has in terms of how
Speaker 2: the rhetoric has been ratcheted up, the tariffs have been
Speaker 2: put in place. Is it the worst case that you
Speaker 2: envisioned or worse yet?
Speaker 3: Still, I certainly did not anticipate one hundred and forty
Speaker 3: five percent American terrorists on China or one hundred and
Speaker 3: twenty five percent on Chinese tariffs on American goods, and
Speaker 3: the trade war that has resulted effectively led to a
Speaker 3: trade embargo as of the past week, when no ships
Speaker 3: were sailing with goods back and forth, when manufacturers couldn't
Speaker 3: export to each other's countries, and you see the significant
Speaker 3: shortage of goods that traditionally are important to both economies.
Speaker 3: So I didn't expect that to happen at all. We're
Speaker 3: the two largest global economies, so we have a profound
Speaker 3: impact on the health of global economy. But we also
Speaker 3: need the global economy to be functioning in a rational
Speaker 3: and stable way, and I think you know, we're not
Speaker 3: anywhere close to being out of the woods. If the
Speaker 3: levels now are set at thirty percent tariffs on the
Speaker 3: American side imposed on China and ten percent by China
Speaker 3: imposed on the United States, those are historically high levels,
Speaker 3: and a lot of trade will not be able to
Speaker 3: take place. It just simply won't be economical.
Speaker 2: A minute ago, you spoke about how China is portraying
Speaker 2: not just the talks, but the way that this trade
Speaker 2: war is unfolded. How effective you think that is. Do
Speaker 2: they walk away from this feeling like they have the
Speaker 2: upper hand. Do you think the world views them as
Speaker 2: having the upper hand in these negotiations.
Speaker 3: Well, the Chinese press, the nationalist press, and to an extent,
Speaker 3: the government of China have been saying that they held out,
Speaker 3: that they stood strong, and that they faced up to
Speaker 3: the American tariff threats and they did not blink. And
Speaker 3: they've been trumpeting that line in the global South. President
Speaker 3: she just hosted most of the major leaders from South
Speaker 3: America at a major summit he's been making. He made
Speaker 3: a trip in Southeast Asia to the Asian country. So
Speaker 3: they clearly are signaling to the United States. You're not
Speaker 3: going to bully us. We have other options. You've seen
Speaker 3: a big increase in Chinese manufactured exports to their neighbors.
Speaker 3: So yes, the government of China is trying to portray
Speaker 3: itself as the steady, solid country that stood up to
Speaker 3: the United States. I think that China needs a deal too.
Speaker 3: There's a reason why the Chinese met with Secretary of Vessant.
Speaker 3: The economy is slowing down. They're facing lower GDP growth
Speaker 3: for the next five to ten years. They have a
Speaker 3: property crisis that continues to linger. They have a consumption problem.
Speaker 3: The Chinese people are not consuming in a rational way,
Speaker 3: sitting on their money because of the uncertainty of the
Speaker 3: investment environment in China itself. They have strength in the
Speaker 3: Chinese economy, enormous strengths, but they also have these weaknesses.
Speaker 3: China could not afford a sustained trade war with the
Speaker 3: United States. That's why they were at the table, and
Speaker 3: that's why they've agreed to a deal in ninety days.
Speaker 2: What did you learn being there about that country's capacity
Speaker 2: to whether something like this. So you're saying they couldn't
Speaker 2: sustain it long term, but give us some insight into
Speaker 2: how they had been preparing for a moment like this
Speaker 2: one where there would be this kind of geopolitical test.
Speaker 3: I was in China, of course, during the presidential election,
Speaker 3: our presidential election of November twenty twenty four, and as
Speaker 3: soon as President Trump was declared the winner in that
Speaker 3: election and prepared to office, the Chinese began to prepare
Speaker 3: for a trade war. They saw it coming. They had
Speaker 3: listened to Canadate Trump. They've did a lot of remobilization
Speaker 3: of their supply chain to try to stock up on
Speaker 3: minerals and on technologies that were important to them, and
Speaker 3: they expected this. They also have an authoritarian system of government,
Speaker 3: and so it's a one man rule, and President Hijinping
Speaker 3: whatever he says goes. He prepared the Chinese people for
Speaker 3: a long struggle with the United States. And you know,
Speaker 3: China is like the United States. People are patriotic about
Speaker 3: their country. I would say there's a highly nationalist element
Speaker 3: in Chinese social media, and there are hundreds of millions
Speaker 3: of Chinese involved in Chinese social media. So this was
Speaker 3: a moment where the leadership said, we have to stand
Speaker 3: strong and defend our country.
Speaker 1: And they think they've done that.
Speaker 2: After the break Nick Burns weighs in on the job,
Speaker 2: facing his successor and the effects of the Trump administrations
Speaker 2: cuts to the federal government. The US is going to
Speaker 2: have a new ambassador in Beijing soon, David Perdue has
Speaker 2: been confirmed.
Speaker 1: I wonder if.
Speaker 2: You've spoken with him, exchanged messages with him, and what
Speaker 2: counsel you would give him about the role itself and
Speaker 2: the ways in which you've found you can be the
Speaker 2: most successful.
Speaker 1: Well.
Speaker 3: I have spoken with him, and I wish him the
Speaker 3: best of success, because we have so much writing on
Speaker 3: this policy with China that we've got to be successful.
Speaker 3: I think he's very well placed to be ambassador. He
Speaker 3: worked in business in Hong Kong and Singapore. He's been
Speaker 3: to China. As a member of the Senate, he was
Speaker 3: on Foreign Relations and Armed Services Committees, which are the
Speaker 3: two relevant committees, two of them for China, and has
Speaker 3: a clear sense of what he wants to do.
Speaker 1: It's a tough job.
Speaker 3: I found out, it's not for the feint of heart.
Speaker 3: We have with China the most competitive relationship of any
Speaker 3: country in the world. China is our leading competitor for
Speaker 3: military influence and military power in the Indo Pacific, our
Speaker 3: leading competitor on the major technologies AI, biotech, quantum computing
Speaker 3: that will form the basis of the future of the
Speaker 3: global economy. Our third largest trade partner with which we
Speaker 3: have a very problematic trade and teriff relationship. And obviously,
Speaker 3: and maybe this is the most important part of it,
Speaker 3: we believe in human freedom and human rights, and the
Speaker 3: Chinese government does not practice that. There are major violators
Speaker 3: of the human rights of their own people. But at
Speaker 3: the same time, and this makes it so complicated, David,
Speaker 3: is that China's our largest and strongest competitor, but there
Speaker 3: are certain issues where China is one of our most
Speaker 3: important partners. We're the two stewards of the global economy.
Speaker 3: We're seeing that play out right now in the teriff issue.
Speaker 3: On climate change. We're the two leading emitters of carbon
Speaker 3: and so President Biden felt very important to work with China.
Speaker 3: If we want to do anything about fen, we've got
Speaker 3: to work with China to make that happen. So I
Speaker 3: always thought it was it wasn't a fifty to fifty balance.
Speaker 3: I actually thought I spent about eighty percent of my
Speaker 3: time on the competitive edge with China, about twenty percent
Speaker 3: on cooperative matters.
Speaker 1: And that I thought was the right ratio.
Speaker 3: But that makes for a very complicated relationship where you've
Speaker 3: got to both defend and push and resist on one hand,
Speaker 3: and then you've got to stretch out your hand to
Speaker 3: work with them and shake their hand on the other.
Speaker 3: That's the reality of being the American ambassador to China.
Speaker 2: Before I kind of pull back and ask you some
Speaker 2: broader questions, I wonder how you felt about the relationship
Speaker 2: between the US and China when you left.
Speaker 3: Well, I arrived in China, was sworn in in twenty
Speaker 3: twenty one, and arrived a couple months later hawkish about
Speaker 3: the relationship on national security grounds, because China is this
Speaker 3: very serious competitor impinging on a lot of American interests
Speaker 3: in the end opisis And I think I left China
Speaker 3: more hawkish.
Speaker 1: Yeah.
Speaker 3: I saw the reality of the relationship and the cynical
Speaker 3: nature of the government of China, and of the duplicity
Speaker 3: on some issues of the government of China, the fact
Speaker 3: that we would make an agreement and then it wasn't honored.
Speaker 3: So I think this is a long term structural rivalry.
Speaker 3: We're competing for global power.
Speaker 1: I don't think that will change.
Speaker 3: No, matter who's president, and so we've got to steal
Speaker 3: ourselves for the next decade or two to a historic
Speaker 3: competition with China, and China right now is stronger than
Speaker 3: any adversary of the United States has ever faced in
Speaker 3: the history of the United States, going back to the
Speaker 3: Revolutionary War, including the First and Second World Wars, including.
Speaker 1: The Cold War.
Speaker 3: The Soviet Union and its heyday was not as strong
Speaker 3: as China is today. And so we've got to face
Speaker 3: that competition. But here's the catch. We've got to do
Speaker 3: it in such a way that we don't end up
Speaker 3: in a war, because a war would be catastrophic. But
Speaker 3: to be engaged with the Chinese leadership, to talk to them,
Speaker 3: as Secretary Vescent did this past week on the teriff issue,
Speaker 3: but on a thousand other fronts. Be engaging them and
Speaker 3: talking to them so you can compete. We can cooperate
Speaker 3: where we can, but we avoid a conflict, which in
Speaker 3: the future would be an absolute catastrophe. That makes for
Speaker 3: a very difficult and complex job.
Speaker 2: There seems to be a message from this administration Washington
Speaker 2: that there can be bombasted and heated rhetoric, radically increased tariffs,
Speaker 2: but then you can flip the switch back and things
Speaker 2: can go back to normal. And drawing on your experience
Speaker 2: as a diplomat for many decades, do you think that
Speaker 2: that's folly or that that's accurate.
Speaker 3: I think we're at a moment of great transformation in
Speaker 3: the global power picture where alliance is shifting very rapidly.
Speaker 3: You see that China and Russia, in Iran and North
Speaker 3: Korea and Venezuela and Nicaragua are kind of all working together,
Speaker 3: the authoritarian dictatorships, and they're working together to try to
Speaker 3: cut down the power of the United States, reduce it
Speaker 3: in the world, and of our democratic allies. And I
Speaker 3: always felt, working for President Biden, that one of our
Speaker 3: strongest suits is that we have reinforced our alliances despite
Speaker 3: the fact that we are still the strongest power in
Speaker 3: the world. You do need friends and allies in the world,
Speaker 3: and I do think that's the greatest mistake that President
Speaker 3: Trump has made in his first four months in office.
Speaker 3: If Donald Trump had faced China down, but had not
Speaker 3: placed high tariffs on Japan, South Korea, the European Union, Canada,
Speaker 3: and Mexico, all those countries would have been on our
Speaker 3: side of the table. Have the same trade and tariff
Speaker 3: problems with China that we do, but they weren't interested
Speaker 3: in doing that once they were placed under the same
Speaker 3: tariff regime that China was placed under. And so I
Speaker 3: fear that the administration really has a blind spot. They
Speaker 3: think the United States can go it alone in the world.
Speaker 1: We can't.
Speaker 3: And so that's an own goal by the Trump administration.
Speaker 3: It's one that they've got to reverse if they hope
Speaker 3: to be effective.
Speaker 2: Can you recognize the State Department today? You can spend
Speaker 2: forty five years in government service, given the cuts that
Speaker 2: have taken place, the priorities of it, How different is
Speaker 2: it from the place that you first went to forty
Speaker 2: five years ago.
Speaker 1: David, I answer it this way.
Speaker 3: I spent a lifetime in government at the State Department
Speaker 3: in White House, serving in Washington and overseas. Every government
Speaker 3: agency can be subject and should be subject to reform.
Speaker 3: But taking a sledgehammer to USAID and firing eight thousand
Speaker 3: people in one week, without a thought, without a plan,
Speaker 3: without actually knowing what you're tearing down, that was a
Speaker 3: huge mistake. Treating nonpartisan civil servants, military officers, foreign service
Speaker 3: officers as if they are disloyal because they work for
Speaker 3: President Biden. Well, they also work for President Bush. They've
Speaker 3: worked people like me work for both parties. We take
Speaker 3: an oath to the Constitution to be nonpartisan, but the
Speaker 3: Trump administration has not appointed a single foreign service professional
Speaker 3: ambassador since it took office. They've appointed lots of political appointees,
Speaker 3: but nobody from the ranks of our serving career diplomats.
Speaker 3: Seventeen of our deputy chiefs of mission are number two
Speaker 3: officials in embassies who were assigned to these jobs and
Speaker 3: getting ready to go have been told they're not going.
Speaker 3: And many of them, if not all, of that group,
Speaker 3: are women and people of color. And so there is
Speaker 3: a crisis in our civil service right now. And if
Speaker 3: these cuts continue the way they are, and if the
Speaker 3: denigration of our civil servants continue, you're losing a great
Speaker 3: group of people who just want to serve the country
Speaker 3: and want to do it in a non partisan way,
Speaker 3: and they will be nonpartisan, that is the Foreign Service
Speaker 3: and US government way. And I think the Trump administration
Speaker 3: and has been extraordinarily destructive of this tradition we've had
Speaker 3: in this country now for about one hundred and thirty
Speaker 3: years of a professional civil service, not a political spoils
Speaker 3: system what we had in the nineteenth century, but professional
Speaker 3: civil service that would serve the country and serve any
Speaker 3: president at the American people elected. That's what's at stake,
Speaker 3: And I think when the pendulum does swing back at
Speaker 3: some point, we're going to have to recreate USAID, recreate
Speaker 3: the Voice of America, recreate Radio Free Asia. These are
Speaker 3: journalists who we employ to tell the story of the
Speaker 3: United States, in the case of China, to several hundred
Speaker 3: million Chinese listeners of VOA and Radio Free Asia. So
Speaker 3: enormous damage has been done by this very cynical effort.
Speaker 3: Doge to tear down all these institutions and not replace
Speaker 3: them with anything of value.
Speaker 2: But you're confident that that force of gravity will swing
Speaker 2: the pendulum back, that we will be able to do that.
Speaker 1: I don't recreate these I.
Speaker 3: Don't think anybody can predict when reason will prevail again
Speaker 3: and logic will prevail and sanity. But it has to
Speaker 3: because I think future administrations, future presidents will look around
Speaker 3: at their government and say, where are my AID workers?
Speaker 3: How do we run vaccine programs, global health programs, literacy
Speaker 3: programs that we ought to be doing around the world
Speaker 3: Because if Americans are generous people, where are my diplomats?
Speaker 3: Why do I not have any diplomats with thirty or
Speaker 3: forty years of experience? Well, they were all fired, summarily
Speaker 3: kicked out in the first couple of weeks and months
Speaker 3: of the Trump administration. It's a true national crisis.
Speaker 1: I'd like to.
Speaker 2: Close by asking you what you're telling students here who
Speaker 2: are here at the Kennedy School here at Harvard to
Speaker 2: learn from your experience, to learn an art of diplomacy
Speaker 2: that has been practiced and perfected for many decades.
Speaker 1: What do you tell them? Hang on, hang on to
Speaker 1: your ideals.
Speaker 3: It's a good thing to want to spend your life
Speaker 3: survey the United States of America, your country.
Speaker 1: It's a good thing.
Speaker 3: You want to be in the public square what Teddy
Speaker 3: Roosevelt called the arena of public service. Study hard, and
Speaker 3: don't leave that dream behind of public service. Because what
Speaker 3: a tragedy would be for our country if young people
Speaker 3: in this country felt, well, I can't serve in the
Speaker 3: federal government because I'm not welcome as a career official
Speaker 3: in the federal government. We need non partisan americans out
Speaker 3: there representing us without any regard to party allegiance. That's
Speaker 3: an enormous asset, and if we let it wither away,
Speaker 3: and this administration is doing that, it's going to do
Speaker 3: enormous damage to our country.
Speaker 2: This is The Big Take from Bloomberg News. I'm David Goura.
Speaker 2: This episode is produced by our senior producer Naomi Shaven,
Speaker 2: with help from Amber A.
Speaker 1: Lee.
Speaker 2: It was edited by Patty Hirsh, Tracy Samuelson, Molly Smith,
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Speaker 2: Rachel Lewis Chrisky and mixed and sound designed by Segura.
Speaker 2: Our senior editor is Elizabeth Ponso, Our deputy executive producer
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