PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
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All right, let's get briefed. It's been a crazy week, if you haven't noticed. I suspect you've noticed. We'll kick things off with President Trump doing a U-turn on global tariffs, but not when it comes to China. In fact, he's ramping things up, slapping a 104% tariff on Chinese goods. And Beijing, well, they're already retaliating. Gordon Chang joins us to talk about what this economic showdown means for China and for us.

Later in the show, we'll bring you the latest from the battlefield. Both Russia and Ukraine have reportedly launched new offensives, raising the stakes on multiple fronts. George Boros from the Institute for the Study of War joins us with the latest on where things stand and where they could be headed. But first, today's Situation Report Spotlight. The past week has been a wild ride. That's putting it mildly.

Markets bounced around as President Trump hit pause on his global tariff push, except when it comes to China. After Beijing fired back with 84% tariffs on U.S. goods, Trump responded with a brutal 104% tariff on Chinese imports. That one's still in place.

Now, this could spell serious trouble for China. Their economy depends heavily on exports, and if those slow down, well, the pain could run deep. But just how much damage are we talking? Joining us now is someone who's been warning about this for years, and that, of course, would be good friend of the show, Gordon Chang. He's the author of Plan Red, China's Project to Destroy America, and you can check him out on Epps.com.

at Gordon G. Chang. Gordon, thanks very much again for joining us here on The Situation Report. Always excellent to talk to you. We've been on a rollercoaster ride here when it comes to tariffs, particularly with China. Give me your 30,000-foot view on what's been taking place over the past week or so and where you think it might be going. A lot of presidents have let the China trade matters slide, and Trump had the courage to take this on.

We hold all the high cards. We're the bigger economy. China is the trade surplus country. They ran a $295.4 billion merchandise trade surplus with us last year. So they've got everything to lose, and we don't. But Xi Jinping believes that he can intimidate President Trump into surrendering preemptively because they're trying to get Wall Street, C-Suite, Main Street to put pressure on Trump to cave in.

I don't think Trump will do that because we know on Wednesday, Trump imposed tariffs of 145% on China. And that's a real demonstration of political will. I think the Chinese are going to take a long time to come to the table. This is going to be a lot of friction, a lot of tension, but we need to get this done and we need to get this done on our terms.

What do you think they make or how do they interpret the pause? The 90 day pause has just been put into place. Do they look at that as a sign of weakness on the White House's part or are they interpreting it in some other fashion, do you think?

I think that they understood that Trump reacted to the bond market by the Japanese dumping bonds. So that's one way. But I think ultimately, they realized there's a real danger in this. And that is, the US is going to come to terms with a lot of countries. Japan, South Korea, the EU. That's going to leave China out in the cold. Because as senior Trump officials have been saying this week,

Those countries that come to terms with us early are going to get the best deals.

And China is sitting on the outside because they can't pick up the phone, which means they're going to be pretty much in trouble. Remember, these guys in Beijing, they're not going to be selling a lot of stuff to the US because of the 145% tariff. That means they're going to dump their products on other markets. Other markets, they're just not going to accept this flood of Chinese products because they cannot see their own manufacturing sectors being decimated.

So China is in a really difficult position because it is now more export dependent than it has ever been.

I've heard some people talk about the fact that China's fundamental structure will probably prevent them, in terms of the Chinese Communist Party I'm talking about, will probably prevent the CCP from proposing or agreeing to any deal that the Trump White House might deem

deem acceptable. What do you make of that? I mean, how much room does the CCP have here to actually negotiate a deal that the White House might look at and say, yeah, we can accept that?

Yeah, I think there's very little room to maneuver. And the reason is that China's predatory trade policies and its criminal acts, they're inherent in the nature of the Communist Party system. These are the things that have got us upset about China in the first place. These are the things that Beijing cannot negotiate away. The other thing here is that Xi Jinping has configured the Chinese political system

so that only the most hostile answers are considered acceptable. So the economically rational thing for Xi Jinping to do is to pick up the phone, call Trump, and sort of make a lot of concessions to get a deal. I mean, Xi Jinping can make concessions and say, I'm never going to honor them, but that would be the rational thing to do, to get Trump to say yes to something.

But Xi can't pick up the phone. And that's because he's boxed himself in. What do you mean by, I mean, if you could clarify that a little bit, when you say that only the most hostile responses are acceptable, can you elaborate on that? Xi Jinping has declared the US to be China's enemy.

They did that in May 2019 with a landmark editorial in People's Daily, which declared a quote unquote people's war on us. That is a phrase which has great resonance in Communist Party history. It's total war. So if you believe that you're in total war with an enemy, that you're in an existential struggle,

How can you make concessions to that enemy? Your position is you've got to defeat them. You've got to destroy them.

You can't sort of make nice to them. You can't make big agreements with them. So I think that Xi Jinping has now sort of put himself in a position where he is only going to accept something where it's clear that the United States has submitted, has gotten on its knees and begged China for an agreement.

I don't see Trump doing that. And so, this is going to be very, very difficult for the Chinese regime. And we have to understand that your regime may not survive this. Really? Okay. There's a soundbite that I think might get clipped out. Talk to me about that. I mean, from a timeline, I know this is a tough thing because there's so many elements here to take into account, but

From a timing perspective, at the current rate, at the tariff rate that has been set now for China, I mean, what are we talking about? If you're thinking about a breaking point, how long can they sustain that sort of back and forth in a trade war? I've been wrong on timing before, so I'm probably the worst person to ask that question. But I don't think that they can sustain it for too much longer. And there's a couple of reasons.

Xi Jinping, because he's turned his back on consumption as being the fundamental basis of the Chinese economy, there's only one way out to rescue an increasingly grim situation, and that is to export more. China's not growing at the 5.0% pace reported for last year. It may not even be growing at all, but we know the trend is down because we can see price signals that suggest, actually, screen deflation.

But even if China were growing at 5-0, it probably wouldn't be growing fast enough for those guys to pay back debt. China not only has a problem with Trump at this moment, China not only has a problem with an economy that looks like it's contracting, China has now its 2008.

In 2008, they did not want to suffer a recession. So they overstimulated their economy. They piled on the debt. And now that debt is just too heavy. So you've got all of these crises hitting at the same time. And so Xi Jinping, a couple of months ago, he looked like he was going to rule the world. Right now, he's going to be lucky just to wake up alive in the morning.

Okay. Well, that implies that they may do something drastic or he may do something drastic, right? I mean, give me the sort of the, from your perspective, the realistic scenarios. I mean, obviously we've got one, which is, okay, they sit down at the table and then negotiate and this thing blows over, but it doesn't sound like you believe that that's got really any running room. So how do you anticipate this thing solving itself?

Just to tie up that one point, I think that they're going to wait too long to sit down with Trump. I think that they are going to try and flood other markets. I don't think that's going to work. I think that Xi Jinping probably is seeing the closing window of opportunity. And this is the way I believe that he's calculating things right now.

He knows that a war would be really, really unpopular with the Chinese people, especially a war on Taiwan. But I think that Xi believes that a war would help him in one very critical way. That is, it would prevent other Communist Party figures from challenging him.

So I think it's in his interest for, you know, maintain these provocative activities. And remember, in the last couple of weeks, we have seen Chinese provocative activities in South Korea against Japan, against Taiwan, against the Philippines and against Australia.

So something's going on here, which isn't very good. And one of these provocations could escalate into a war. I don't think Xi Jinping can control that escalation. He can't come to terms with whatever he's picked on. So this is one of the more dangerous moments in history. Well, Gordon, on that cheery note, if you'd stay right there, we've got to take a quick break, and then we'll be back with Gordon Chang here on The Situation Report. Stay with us.

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Welcome back to the PDB Situation Report. Joining us once again is Gordon Chang. He's the author of Plan Red, China's Project to Destroy America. And of course, you can find him on X at Gordon G. Chang. Gordon, I'd like to pick back up where we were during the last segment and the notion that perhaps where this is heading is a conflict of some sort, perhaps what we've been waiting for related to Taiwan. Do you see that as more of...

Xi Jinping thinking, okay, I need a distraction. I mean, this is not a perfect analogy, but when you look at Putin over the years, oftentimes what Putin's done when he feels either threatened or perhaps looking to shore up support at home, he finds a bogeyman out there, right? And obviously the latest attempt is Ukraine.

But do you see any similarity there? Are you saying that Xi Jinping may look and go, okay, what I need is a distraction. So let's have a conflict.

Yeah, because I think he needs to make sure that other senior Communist Party figures don't challenge him. This is what Mao Zedong, his hero, did. He did it during the Cultural Revolution. Mao couldn't start a war abroad, but he could start a war on elements in Chinese society. That's exactly what he did to shore up his position in the Communist Party leadership.

Xi Jinping, however, has the military to start a war, and that's what I'm really worried about. I don't think that he would start hostilities with an invasion of the main island of Taiwan. I don't think the Chinese military is ready for that. I don't think that Xi Jinping is ready for it. And there's a lot there. But the point is...

Taiwan could easily get involved in a war that starts elsewhere because once a war starts somewhere, it's going to spread throughout all of East Asia and we're going to see conflict. It's just going to envelop all of these societies. Okay. Yeah.

Yeah. You mentioned Mao. Have you seen the, it was basically a blurb that the foreign ministry just put out that featured Chairman Mao talking about how the Chinese essentially will fight to the end and China will not back down. Have you seen that and what do you make of it?

Yeah, that was Thursday from the foreign ministry, which was really quite extraordinary when you think about it, because it was over the top. It was a throwback to the Korean War. It was basically a threat that we'll go out and kill people if you don't come to terms and our terms. So I...

I worry about that as a signal. It shows the mentality of the Chinese regime. And I think it shows desperation. And a desperate communist party is a very dangerous entity. So, yeah, I mean, we can't stop doing what we're doing because we absolutely have to do it. But we got to recognize and we got to be prepared for some pretty bad outcomes. And what...

How would you describe Xi's - you talked about this to some degree already, but how would you describe Xi's hold on power? How tight is that grip? I don't think it's tight at all. And let me give you an example. In the Communist Party's military, because the People's Liberation Army reports to the Communist Party, it's not a state army. There's been purges upon purges, especially since around July of 2023.

Most recently, the number three or the number two officer, depending on who you talk to, a guy named General He Wei Dong has been disappeared. He hasn't been seen in public since March 11th. And there have been reports that U.S. intelligence believes that he has, in fact, been taken out. This means, you know, a lot of people say, well, oh, you know, Xi Jinping just sacked another senior officer.

I don't think that's the case. I think it's more likely that Xi Jinping's enemies at the top of the Chinese military took out a Xi Jinping loyalist, General He. And the reason is that we have been seeing since July 9th of last year, these articles in PLA Daily, which is the main propaganda organ of the Chinese military. We've been seeing these articles praising collective leadership, quote unquote. That is a direct challenge to Xi Jinping.

And so these articles could not have been maintained without the support of the senior leadership of the PLA, which means the senior leadership of the PLA is in, you might say, open revolt or not open revolt, but it's in revolt against the Chinese leader. Now, if you've got the guys with the guns not happy with you,

That means your control over the military is weakened. And also, I believe that there's senior civilian party officials who are gunning for Xi Jinping, figuratively, not literally. What's the primary point of dissatisfaction from the military's perspective with Xi? Well, Xi Jinping is taking the country off the cliff. The military can see it. I don't think that they're happy about that.

The primary point of contention, though, would be that Xi Jinping has been purging people. They've been taking away their livelihoods. The other generals and admirals, they don't like that.

And so, they don't want this at all. I think you have a military right now which is very divided. So, it is not the type of military that is actually prepared to go to war, even though they've got some pretty neat weapons, some of them which are better than ours. But the point here is that the military is a political military, and now it's very politicized.

Is there a clear or obvious candidate, whether within the military or within the party, that stands to gain from Xi Jinping being pushed aside?

Yeah, everybody, basically. So, you've narrowed it down, Gordon. Yeah. I thought you were going to ask, is there a specific person? Which is the reason why I was shaking my head. No. I don't know if there's a specific person, but there are a lot of people who are unhappy. And the reason is, when Xi Jinping became general party secretary in 2012,

The understanding and the norms and the guidelines in the party was that he was only going to get two five-year terms as general secretary of the party. And that means after the 10 years, there would be a whole new generation of leadership. People would get promoted. What Xi Jinping did by taking a third term was he was denying a whole generation of leadership the chances for promotion.

And that means these people are not happy. They may not have the power to challenge Xi Jinping openly, but I think that they're waiting for Xi to fall so that they can rise. And that means he's got a lot of enemies within the political system, basically everybody. Maybe I'm asking the question that really doesn't have an answer, but how does that work then? I mean, if they're waiting for Xi to fall,

I mean, how does that is it's palace intrigue. Right. But I mean, how does that happen? Is the only entity capable of taking him out the military or is it can the party act? And are they, you know, from your perspective, are they able or willing to?

Yeah. There are no rules in the party anymore, so anything can happen. So, in arts, we always say, well, in America, the president has a short term because he's got midterms and then he's got four years, he's got to be reelected. And we say, we Americans are short-term thinking. But Xi Jinping, because he's jumped the roles, I mean, he has an election every day. I

And so he's got a really short term thinking he needs to get by hour by hour, because in that system, anything can happen. You know, if you go back to Mao Zedong, that was sort of supposed to be a collective leadership. Mao got rid of the rules. Mao was supreme, but it also meant there were no rules.

Now, his successor, Deng Xiaoping, instituted and started to institute norms and guidelines and understandings about the way the party would transfer power from leader to leader. Xi Jinping jumped that, which means anything can happen, Mike. So the mechanics of it are,

Anything. Anything is on the table. And especially, remember, Xi Jinping, I know this is going on a little long, but I need to give you some context. Yeah, please. When Xi Jinping took over in 2012-

No senior Chinese leader got too much credit or too much blame because every decision was made by consensus across the top of the political system. But by taking power from everybody else, Xi Jinping ended up with total or near total accountability, which means when things are going bad, Xi Jinping is being blamed for everything because he's got nobody else to blame.

So you can see how that system can work where enough people get together and say, Xi Jinping, you're out. And by the way, we've got a lot of unhappy military officers who are ready to come into Zhongnanhai, which is sort of like their White House. So things can be a little dicey there right now.

Well, okay. We've got a lot left to unpack, but I want to be mindful of the time. So all I can do is ask if you'd be willing to come back and pick this conversation up again. We'll see at that point whether there's been any movement related to the tariffs and trade negotiations. But Gordon, as always, it's excellent to speak with you. And I really appreciate you taking the time with the Situation Report.

Well, I really appreciate it, Mike, because this is an important conversation that you wanted. So thank you. I'm very happy to be here. Love to do this again. Excellent. Excellent. Well, we will be pestering you to come back on. You can count on that. Gordon Chang, as always, excellent. Thank you so much, man. All right. There is a...

That's a lot to digest right there. All right, coming up next, both Russia and Ukraine are on the move, each launching new offensives across the front lines. So you have to ask yourself, what's behind the sudden shift in momentum? It seemed like just yesterday we were talking about, oh, they're going to sit down at the negotiating table. Well, George Barros from the Institute for the Study of War, he'll join us next with the latest.

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Welcome back to the Situation Report. Ukrainian officials say Russia's spring offensive is officially underway. Moscow has launched a fresh push in the northeast, with Ukraine's top military commander reporting a sharp uptick in fighting, nearly doubling across all major parts of the front line in just the past week.

At the same time, Ukrainian forces are taking the fight across the border. Kyiv confirmed an incursion into Russia's Belgorod region. President Zelensky said the move is meant to ease pressure on other parts of the front, especially around the embattled Donetsk region, and to protect key northern areas like Sumy and Kharkiv.

Do you remember when it just seemed like yesterday we were supposedly going to be talking about peace settlements? So what does all this mean for the trajectory of the war? And who has the upper hand right now? Well, joining us to break that down is George Barros. He leads the Russia team at the Institute for the Study of War and tracks these movements daily. George, thank you again for coming back on to the Situation Report. Great to see you. Hey, Mike. Good to see you once again. Thanks for having me. Absolutely, man. Listen, let's...

Where do we start? It seems like, you know, it seems like yesterday when, you know, we were talking about, oh, they're going to sit down at the negotiating table, peace is going to be breaking out. And now we're talking about a spring offensive.

What's going on? So, I think the key thing to focus on is Vladimir Putin very much decisively rejected US President Donald Trump's very straightforward proposal for a 30-day unconditional ceasefire.

Putin rejected that. He instead said, "Well, we'll talk about a ceasefire and energy infrastructure. We'll talk about a ceasefire on the Black Sea." But the key issue there is that he rejected the main area where the actual fighting is happening, the land domain, which is where 95% of the killing is at. So, that's important not to lose sight of.

The Russians continue to want to conduct conventional operations. They want to keep war fighting. They see a military solution to this conflict. They think that they can wait out the West, they think they can wait out the Europeans. And time will tell whether or not we, the collective international community, are able to continue keeping the Ukrainians in the fight. This government, US government, they currently set this military solution to this war.

I frankly, as a student and a historian, I have to disagree. If you look back in history, pretty much all wars actually have a military solution. It's just a question of on whose terms and when.

Yeah, there was a comment made by, I think it was a foreign ministry spokesperson from Russia the other day. And I'm just paraphrasing, but essentially, it seemed like an incredibly revealing or insightful look at the Russian mindset right now, or at least Putin and his military's mindset.

And that was, he basically was saying, well, look, you know, why would we stop now, right? You know, the U.S. is backing away from Ukraine and we're making, you know, progress on the ground. So why stop? And that to me seemed like about the best assessment of Putin's mindset that I've seen to date. Yeah, precisely. I mean, it was not too long ago that Putin articulated the theory of victory and his theory of victory continues to be the same.

It's that it doesn't matter that the Russian military, pound for pound, is not as good as the US military. It's not the most professional military. They're advancing at a very slow rate. They're taking a horrific loss. So, Putin assesses that fundamentally, he can stomach a war of attrition. And as long as the West is not willing to continue keeping the Ukrainians in the fight,

Putin's going to win. And so, Putin wants to protract the peace process. He wants to protract the negotiations. He doesn't want to agree to a very straightforward 30-day ceasefire because Putin thinks that he actually can tactically win this thing by stringing everyone along.

There's a lot of pundits out there, right? A lot of experts who've been talking about, well, the Russian economy can't sustain this and they're on the ropes and Putin has a lot of reasons why he needs to sit down and get this sorted out because he just can't sustain the fight. Where do you stand on that? Somewhere in the middle. I actually agree that there's tremendous vulnerabilities the Russians have taken, particularly on the economics. I'm actually sympathetic to that argument. But I would argue that

Look, Putin is banking on the tempo of fighting going down. The real thing that's bankrupting the Russians at really banging up their economy, their inflation rate, their unemployment rate, or rather not the unemployment, the labor shortage, there's not enough Russians to go around between the military and their domestic economy and their monetary policy, it's the war.

I mean, there's a massive disruption to the Russian economy because of the war. The Ukrainians kill and wound on average 30 to 45,000 Russians per month. Those are 30 to 45,000 people whose families are entitled to benefits. They are wounded veterans who are entitled to lifetime benefits. They are people that can no longer work in the domestic economy, contributing to that labor shortage.

Putin is banking on that number coming down a little bit. He wants the tempo to slow down. He's waiting for the American aid to run out so that maybe instead of taking 45,000 casualties per month, it goes down to something like 10,000 casualties a month, which then the Russians actually can deal with. But at the current rate of which the Russians are being lost and the high price going for a head breach, it's not sustainable. Mike, to put it in a different

perspective, it's insane how much the average Russian service member gets paid to go fight in Ukraine. The one-time signup bonus for fighting in Ukraine offered by Samara Oblast is $40,000 US dollars. One-time signup bonus. That's not including your salary, not including other benefits. That's why they're able to attract...

tens of thousands of Russians per month, but it's bankrupting the Russian economy. I mean, their liquidity and their sovereign wealth fund, it's down from what it used to be around 100 billion US dollars before the war started in 2022. It's now down to somewhere in the bulk cargo, 45, $46 billion. And it's scheduled to be at the end of this year. Putting it into context, when you talk about a 40,000 US dollar signing bonus,

What is the average salary? Do you know for a Russian worker? Yeah. This is on Wikipedia. It's a Google way. If memory serves me, I believe the average or median annual salary in Russia is somewhere on the order of like

$13,000, $16,000 a year. Granted, Russia has an extreme level of wealth inequality because there's the very, very rich guy that live in Moscow, it's Gleersburg, and then there's the people living out in the sticks in Siberia who make next to nothing. So it's very skewed. No wonder they can find people to sign up if they're offering $40,000 a pop.

And remind me if you could, the manpower advantage, population wise, I mean, the manpower advantage that Russia has over Ukraine? Yeah. I mean, Russia has a population or had a population of 150 million people before the war. Ukraine was around 40 to 45 million people.

So, they're working with a little over a three to one manpower advantage net. But the Russians, despite this, they've not been able to decisively dominate the Ukrainians. I mean, the Russians only occupy 18 and a half percent of Ukraine. And at the current tempo of operations, it's going to take them well over 80 years to occupy all of Ukraine.

And so what is, I mean, because it can't be that, that's not the end game, right? So what is, from your perspective, what is Putin's mindset? What does winning look like at the end of the day? Well, I think there's several things that Putin would consider to be a victory. If he could, for example...

achieve a de facto veto over the NATO alliance and have the NATO alliance redo its charter and have the NATO alliance and the NATO side preemptively say, "It's part of an agreement. It's okay. Part of the agreement, you can't get into NATO." I think that'd be a massive win. Because as you know, NATO's charter includes an open invitation to any member state that meets the membership criteria. But if we change that and then allow the Russians to have a veto over NATO, that's a huge win.

I think Putin also wants to, at a minimum, continue seething in war fighting for the territory of the four provinces that he declared annexed back in fall 2022. Luhansk, Donetsk, Zaporizhia, and Kherson Oblast, none of which the Russians occupy in their entirety, and which would likely take a current pace at least two to three years to finish war fighting, assuming that there's on a massive collapse on either side.

But it's a tall order and I think there's no... Realistically, I don't really think there's an end in sight. You don't see there's an end in sight to the current conflict, to the war? In the short term, no. Because look, if the last piece of American aid is going to be that presidential draw, the President Biden authorized order, he departed office, Putin's just going to outweigh it. That aid is scheduled to last through maybe a few more months, certainly not get the Ukrainians through the summer.

We'll have to see what the Europeans end up doing. What extent can they offset Americans? I'm highly skeptical of that. We can talk about the reasons why. Yeah. Yeah. At which point, the Russians will actually be able to, I think, stalling the tempo better, operate a little bit more effectively. And if they can get some other concessions from the US, which in my opinion would be a massive mistake, sanctions relief.

cutting off intelligence sharing for the Ukrainians, and all this under the rubric of normalization with the Russians and that sort of thing, then the Russian rate of advance will expand drastically. Okay. But George, I do want to go back and talk about this issue of EU and US support for Ukraine going forward. But first, we need to take a quick break. So if you'll stay right where you are, we'll be right back with George Boros and the Situation Report. Stick with us.

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Toyota, let's go places. Welcome back to the Situation Report. Joining us once again is George Barros, the Russian team leader at the Institute for the Study of War. George, thanks for sticking around. We finished up the last segment just briefly touching on the issue of potential support for Ukraine continuing from whether the EU or the U.S.,

Where does all of that stand? Let's start with the U.S. What do you perceive the White House is going to do? Is it just going to stop support? Is it going to be minimal support? Where are we going?

Very difficult to forecast this administration, Mike. Yeah, good point. Look, if we look at President Trump's stated objectives, which include not getting Ukraine into Minsk III, a band-aid fix that they're simply just going to not solve the underlying causes of the conflict, but just give the Russians a reprieve to go back into Ukraine at the time of their choosing, then this is going to be really bad. Trump said he doesn't want Minsk III. Trump says that he wants a robust, stable peace.

He wants to ensure that this is permanently over and settled. And those are all good and positive things. Now, if you look at the current Russian demands, they're not compatible with President Trump's stated objectives, which means that actually it's the Russians who have to be coerced into concessions.

I think President Trump has exhausted or come close to exhausting the options of, hey, we make some concessions. Ukraine's making concessions. The Russians make some concessions and they're on turn. That's not working out. So now, I think imposing a decision point on President Trump, which is, we try with carrots, how are we going to use sticks? And part of the ways that you can go with the sticks are, of course, the economic tools against Russia. Try to target the price of oil, bring it down, cooperate with OPEC.

German-American, like cheaper gas prices as well. You could hit the Russians with some tariffs or other things, but our trade volume is pretty low. So, it's not really going to be a decisive tool there. The biggest tool that you could do is keep Ukrainians in the fight. You give them more aid, give them support. You give them the intelligence so that their targeting can be that more effective, even if we don't give them anything else. And then you continue to tell Vlad, "Well, Vlad, we're going to give the Ukrainians enough to keep them in the fight for another six months." That means, you know,

for another six months, you're going to be losing 45,000 guys per month. That's over 100,000 wounded and killed Russians by the time we come and talk again. So you tell me how you're doing in six months, given that you have a labor shortage of a billion people now, it's going to be even worse. So I think that's sort of the approach. Now,

And I don't know. At the same time, the Russians are being intransigent about their own objectives. They have made the ceasefire for the Black Sea, the maritime domain ceasefire contingent on preliminary American sanctions relief, which should be a non-starter. There's really no reason to do it. They want to have sanctions relief for some Russian import and export banks and people that work with agriculture, foodstuffs. It's just free butter for no reason, really.

we really shouldn't be in the business of helping the Russians out in that regard. So, we'll see. But I'm hopeful that President Trump will realize that his stated objectives, which in principle are good, that actually leads to a very natural conclusion, which is we got to keep the Ukrainians in the fight because the Russians got to back down from their non-starter demands.

Yeah, I mean, I agree with this. It's almost impossible to predict where the White House is going to go, not just on this issue, but on a lot of issues. I do find it hard to imagine the scenario where President Trump says, okay, I'm going to upgun the Ukrainians, keep them in the fight after all this talk and emphasis on getting to a peace settlement. So,

I find that difficult. I take your point about the difficulty of further economic leverage. There is a ridiculously low level of trade at this point, so the tariffs, that's why they're off the list anyway. They weren't even included on the list of tariffs. But if you could dry up the oil revenues-

Then you're talking a good game. But that then implies that you can somehow figure out how to get China, you know, to act and to not be as supportive as they have been of Russia. Do you see that as a possibility?

I see it as a possibility to be explored. I mean, you could work with OPEC. I mean, that's what Ronald Reagan did back in the '80s is we worked with OPEC, drive down the price of oil, that in combination with the Russians losing a lot in their war in Afghanistan. Those helped put in the final nails of the coffin of the Soviet Union. So, I'm not going to say it's not possible, but what I will say is that the mass pressure campaign that is necessary to get the Russians to back down is not achievable with economic tools alone.

the main driver of the Russian pressure points are their losses in Ukraine. And so, we're going to talk about how do we get the Russians to a better spot. The strategy has to, I think it should include economic instruments like trying to bring down the price of oil, but that should be in addition to the sustained military support. Now, I remain hopeful that we can do it, especially if we can get the minerals deal signed, because then that could become a mechanism through which the Ukrainians are not the recipients of military aid for free,

but the minerals deal can then become a means of financing. That minerals deal is an interesting one because I've read an awful lot of material that talks about

where the relevant, where the critical resources are located. And a lot of them are sitting in territory, the 20% or so of territory held by the Russians at this point. Right. And that's very interesting when you bring that up, when you especially mentioned that President Trump just a couple of weeks ago was talking about how he would like to have American personnel operating Ukraine's Zaporizhzhia nuclear power plant, which is

in Russian-occupied territory as well, which implies negotiations or war fighting that has to come under pregnant and then American jurisdiction. I'm not sure what the Trump administration is thinking about how that's possible, but if we're a world where the Ukrainians and US Americans get some of those minerals and get Americans supporting defending Europe's largest nuclear power plant, and the Russians' frontline goes closer to Russia and further away from mainland Ukraine,

That's a win in my book. So, we'll see. Sure. I think that's a very optimistic scenario. I'm not saying it couldn't happen. Now, what about the EU? We haven't touched on them yet, but as an example, here's a scenario. The White House

is reluctant to keep militarily, keep Ukraine in the fight, but they are willing to do whatever is possible in terms of the economic leverage. And maybe you turn to China and say, look, let's sit down at the table. I'll bet we could come up with a fair trade deal that would also include you not supporting the Russian oil industry. Maybe you tie those two things together. But

Can the EU actually pick up the slack? Would the EU be in a position, in other words, to keep them in the fight?

Independently, just using the European defense industrial base, at this time, no. And the reason why is because, look, the Europeans have money. Money is not the issue, but a lot of it has to actually do with the manufacturing capacity. Europeans are doing a lot in recent years to augment their defense industrial base, but as is with all things European, too little, too late. And when you need a factory today, you need to start breaking ground on the factory three or four years ago. Yeah.

And so, the timelines aren't exactly lining up. Europeans are expediting it. I believe the European Commission, they're currently talking about a decades-long European regarment initiative where they're going to spend somewhere around

800 billion euros to invest in the European defense industrial base. That's excellent. Again, needed to happen 10 years ago, but here we are. Now that said, Europeans can do a lot. They produce a lot of artillery ammunition. They produce a lot of working good stuff. Rheinmetall can make armored fighting vehicles and tanks. So in principle, that stuff can get to Ukraine. But there's some niche systems and capabilities that truly only the US has that the Europeans cannot replicate.

Two systems come to mind. The interceptors for the Patriot air defense system. I mean, Europeans themselves depend on the Patriots. It's kind of bizarre how the Americans have a monopoly over European air defense. And the Ukrainians are running low on those. The Europeans barely have any spare that they could give the Ukrainians that they haven't already. The American production rate of Patriot interceptors is actually quite low too. And so, no more American aid, no more Patriot interceptors, that's going to be a big problem for Ukraine.

Number two is the HIMARS for their operational strike capacity. The Ukrainians rely on the HIMARS. It has become a workhorse capability. It is the only system they have for reliable, effective operational range strikes, those being strikes beyond 30 kilometers, but sort of short of 70, 75 kilometers. The Europeans do not have a commensurate mature system like the HIMARS to be able to fulfill that very important need.

So even if the Europeans want to throw a lot of money and try to build up, they need that stuff. And the solution might be that the Europeans just go to the Americans and go to Robert Grumman and go to Lockheed and they're like, "Hey, we'll pay you at General Dynamics. Hey, we'll pay you to give us the interceptors and the HIMARS ammo." And then they'll give it to the Koreans that way, which in principle could work and would benefit the US industry too.

So, we've got, again, being mindful of your time, we've got the spring offensive as it's being referred to underway by the Russian military. Have you heard anything just in the past handful of days about what they're up to, how they're doing? Are they making progress? Where does that stand?

Right. So it seems like the Russians are in the beginning phases of their spring offensive. It seems that they are currently trying to take the Russian forces in Northern Ukraine, the ones that were clearing out Kursk where the Ukrainians were in Kursk and Russia, and they're trying to steamroll it across the international border into Sui and possibly into neighboring Northern Kharkiv oblasts in Ukraine. Now, candidly, Mike, I got to tell you, I'm not my

My forecast is not particularly grim on this operation. The Russian forces that they have up there has not been significantly augmented from what they were operating with in Kursk.

It's about ballpark 60 to 70,000 guys, so maybe six, seven divisions or so. A lot of the same units that have been there for a long time. We've not indicated any redeployments, so bringing in fresh troops so that those forces that were tired fighting and exploiting the agreement as we cursed, they're not going to have a lot of gusto and energy to keep going into Sumi. So it seems like the Rocklands might try to do some pushes in the north and call back to spring up Enthev, but

I don't see it going very far, to be honest, and they're certainly not going to take Sumy city. And that'd be kind of hard for the course. I mean, the Russians winter offensive has concluded and the Russians failed with their winter offensive in Donbas to take their objective for the all 2024 offensive, which was taking Pokrovsk. So, I'm sure they're going to make some tactical gains, they're going to make some territorial gains.

They'll get some villages and fields. They might even get a couple of small towns and stuff, but they're not going to be making any operational breakthroughs, I'm sure. Okay. George, last question. There have been reports over the past 48 hours or so that the Ukrainian military captured a couple of Chinese nationals. Have you heard anything about that and what do you make of it?

Yeah. It's not that surprising really. The Russian fourth generation apparatus is very skilled at going to all corners of the Russian Federation and other countries as well and trying to seduce migrant workers, students, foreigners,

both in Russia and outside of Russia, to come and volunteer in the Russian military. Because the Russian military is just trying to suck up as many bodies as they can to meet that replacement quota for those casualties that they're taking. Lots of foreign nationals have made it into the Russian military. Sri Lankans, Indians, Venezuelans, Cubans, Africans. These two Chinese guys that were captured by the Ukrainians, I reported there being at least a couple hundred in the ranks of the Russian military. That thought's surprising.

I don't have any dispositive evidence, but it's my impression that those captured Chinese were not PLA soldiers. I would be astonished if they were deliberately sent by Beijing to go there. It seems more likely that these were Chinese nationals located in Russia or in a Russian adjacent country, went to a urban office and voluntarily signed up to go

get a paycheck for $40,000 or something, clearly are captured along with many other impoverished foreign nationals who have made the same bad decision. Okay. So, you're not making much of what President Zelensky said. His initial comments were, well, these are probably just a couple, but there's many more. You don't necessarily buy that.

I believe, I buy that there are many more Chinese, but I don't think that they're PLA. I'd note for you, this is interesting, your listeners can look into this. Last year in 2023 or 2024, there was a massive scandal with India because there were several hundred, about thousands of Indian nationals

that a Russian human trafficking scheme had recruited and into going to serve in the Russian military. It became a massive international scandal. President Modi actually made a whole stink about it. The Indian foreign ministry formally went to the Russian foreign ministry and said, "Hey, quit it. Stop trying to recruit Indian nationals to go fight in the military." It was all public spat. It doesn't mean that the Indian government was sending Indians to go fight in Russia. Right. Right. Okay. Now, point taken.

Well, I tell you, a lot more to discuss here, George, but we are out of time. So I can only hope that we give you a call. You'll come right on back. It's been a few months. Obviously, a lot's happened. Let's get back together on the show sooner than later. And I guess I'll finish this up with a question for a prediction. I know people love making predictions. Will there be any...

serious negotiations for peace going on in the next month or two? I highly doubt it. I would be astonished. So, quick answer, I don't think so, but we'll see. Okay. All right.

Excellent. George Barros of the Institute for the Study of War. Listen, thank you for joining us here on The Situation Report. Really appreciated that. Well, that is all the time that we have for this week's PDB Situation Report. Look, if you have any questions or comments, and I hope you do, just reach out to me at pdbatthefirsttv.com because you know what we do. We collect the best ones and lots of them are good. We take them and we pile them into one big episode that we call Ask Me Anything.

We've got another one in the works. We'll get that out to you here very shortly. Finally, to listen to the podcast of this show ad-free, well, you know, you can do that. Just become a premium member of the President's Daily Brief by visiting pdbpremium.com. It could not be any easier. I'm Mike Baker. And until next time, well, you know the drill. Stay informed. Stay safe. Stay cool.