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Welcome to the World in 10. In an increasingly uncertain world, this is The Times' daily podcast dedicated to global security. Today with me, Stuart Willey and Alex Dibble. China has today responded to Donald Trump's tariffs on the country, announcing new duties on a host of products from the US, including gas and oil. Beijing says the import taxes of up to 15% were in response to what it called malicious tariffs
imposed by the US president. One Chinese diplomat told reporters at the UN, nobody wins in a trade war. On yesterday's World in 10, we discussed how Trump's tariffs might benefit foes of the United States by damaging alliances in the West. Go back and listen if you missed it. But today we'll zoom in on the country that Washington sees as top of the list of potential foes, China.
Our guest today can help us, Scott Kennedy, a specialist in U.S.-China relations and a senior advisor at the Center for Strategic and International Studies in Washington. Scott, what's going through the mind of President Xi and those around him as they contemplate their response to Trump's tariffs? The Chinese know that President Trump is...
unpredictable that he's a unilateralist. They've had four years before of interacting with him and it was a complex challenge for
for them, which they managed to muddle through. In some ways, you know, he offers an opportunity to them because President Trump doesn't prioritize human rights. He deprioritizes allies. And so he doesn't present that kind of ideological challenge with the U.S. together with its allies that the
On the other hand, the unpredictability is very difficult. China depends a lot on foreign investment and trade, and predictability is really important to keep things going. Scott, China's response has been fairly predictable, we might say, imposing similar tariffs in return. We know Mexico and Canada have talked their way out of immediate tariffs. Do you think China's retaliation is going to be the end of it for them?
We'll see if that leads to a negotiation. I think probably what it will do is lead to a further escalation. And so we may get further away from a deal than we thought. And, you know, I think markets have been expecting U.S.-China tensions to stay relatively mild.
because everyone expects President Trump somehow to be rational and be worried about inflation. Well, I think they may be proven wrong. You know, as Mike Tyson said, you don't know how you're going to react until you get punched in the face.
And it could be that the U.S. is about to get punched in the face by China. And then we may see President Trump pull out a whole variety of stops. And we may be nowhere near a deal. And I think that will make markets react quite negatively.
Speaking of markets, they didn't take well to the announcement last week of China's new AI startup, DeepSeek. We saw hundreds of billions of dollars wiped off the value of US tech companies. That leap forward in AI came despite earlier US trade sanctions that were pitched as restricting China's development of certain technologies. Scott, you've argued in an article that these moves to restrict trade have actually backfired on the US.
Well, the U.S. certainly has had a very decidedly mixed record on its ability to constrain China's technological progress. Remember,
If you would, Stuart, the original motive here is not just simply straight out economic competition in tech. It is that the particular areas of technology that the U.S. wanted to impose restrictions on were directly related to military power and that these are adopted in –
four reasons of constraining China's ability to go to war and win a war with the U.S. or against its allies in a whole variety of different scenarios. And I think in some areas you could say that the U.S. has made some progress. Certainly in semiconductors, the U.S. has slowed China down and same with semiconductor equipment. But broadly speaking, we've incentivized the Chinese to throw everything they've got
at tech, and we've given them a blueprint of exactly where they need to invest, because that's where we're restricting or we're planning to restrict. And they have incentivized Chinese industry to get involved like never before. And what we're seeing in the case of DeepSeek is one of those Chinese companies coming up with an innovation that others didn't expect,
And what we now know is that no lead is safe in any part of this tech competition. Today, the Chinese look like they're doing really well with large language models in certain parts of AI. And we're going to see that in green tech. We'll see it in medicine. We'll see it in lots of different areas. This is now a full-on competition.
competition like it wasn't before. And it didn't need to be this way. But here we are. So Scott, what does a better path look like then perhaps one where the US and its allies keep ahead of China in those key technologies that will be so important in the wars of the future? I think of, you know, tech competition, not like a boxing match. I think of it like a running race.
So to some extent, slowing the other person down helps a little bit, but really what you need to do is get yourself faster. So you need to train in the gym, you need to lift weights, you need to get out and run intervals, you need to do long runs, and then you need to figure out how to win on race day.
regardless of how fast the other racers go. So the U.S. really needs to invest in basic science, research, broad-based education, needs to invest in some areas of supply chain resilience where there are threats that one needs to be worried about, whether it's critical minerals or our energy grid.
There's obviously some areas of data security and other things that pose real challenges to the United States. I would say we're going to need to do this with allies.
Economic security cannot be achieved by the U.S. doing it on its own. It has to be done in consultation and combination and partnership. And that's one of the things that the Biden administration got right. I'm a little bit worried looking at the first few weeks of the Trump administration that this is not one lesson that they came away with realizing that the Biden administration did something well. And so I'm really concerned that we're going to be less secure than we ought to be.
The former military leader of one of those allies, Ukraine, has been warning the future of war looks like AI-driven drones. China's succeeding with lower-cost drones and now lower-cost AI. Should we worry this all gives China an edge militarily? I think the U.S. and China are both worried.
have world-class militaries. The U.S. is much more battle-tested through experience of combat in a whole variety of theaters around the world. China's developed a lot of
capabilities that it hasn't tested yet. It's also developed a lot of asymmetric tools to respond that are in some ways less expensive than some of the technologies and systems that the U.S. has put together. I think what we have now is a rough balance of power where the costs of engaging in offensive war for either side
is too high to really seriously consider. But there's still a possibility of some type of conflict emerging in the South China Sea, around Taiwan, or on the Korean Peninsula, or just some accident someplace that draws us in. So we have to be much better prepared than we are right now. And so getting to a point where we avoid war is also going to require some very nifty diplomacy.
The man who is going to be responsible for the nifty diplomacy you described there is Donald Trump. He's been calling China's AI announcement a Sputnik moment, harking back to when the US put rocket boosters under its space program. How does all of this play out, do you think, in the next four years?
I think that the U.S. and China likely are, for the foreseeable future, going to be rivals. They have very different economic and political systems. They are now preparing for potential conflict with the other as their most likely opponent. So I think we're going to see this competition endure for some time. I think what I don't know is how volatile this is going to get.
To what extent will we be able to continue to have interdependent economies and societies? Right now, it looks like we are gradually, inch by inch, decoupling.
I don't know if we're going to be able to keep connectivity. And if we do decouple, whether it's going to be primarily China that gets isolated, the U.S. gets isolated or something in between. So I really think that we're at a turning point, which we could go in a variety of different directions. This sort of Cold War, you know, slow burning rivalry could continue.
Or things could get much hotter and quite suddenly. I think the soothing scenario of somehow the U.S. and China kissing and making up, I think we're long past that right now. The question is, can we manage these tensions? That is a giant question. It's why I go to work every day to try and figure out how we can avoid conflict and promote maintenance of the rules-based order. But that's far from assured.
Okay, Scott, thank you very much. That is Scott Kennedy, who is a senior advisor and China specialist at the American think tank, the Center for Strategic and International Studies. That is it from us. Thank you for taking 10 minutes to stay on top of the world with the help of The Times. See you tomorrow.
Pooka, Bella, I'm sure you've noticed some changes. Who are you talking to? I'm just practicing for when I have to tell the dogs about the twins. You know, because they'll... Be fine in the spacious third row seat. But, uh, twins... Can sleep peacefully thanks to the rear manual sunshade. And what about the... Extra cargo space for strollers and dog beds? I guess you're right. Can we go to the hospital now? The contractions are getting closer. The three-row Lexus TX. Because everyone should feel like the center of the universe. Experience amazing at your Lexus dealer.
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