PDB Situation Report | May 3rd, 2025: Economic Pain in Beijing & U.S.–Iran Negotiation Breakdown
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Welcome to the BDB Situation Report. I'm Mike Baker. Your eyes and ears on the world stage. All right, let's get briefed. We'll start things off today with the latest in the U.S.-China tariff war. Perhaps you've heard about this, where both economies are starting to feel the heat, and Beijing may be quietly looking for an off-ramp. Steve Yates from the Heritage Foundation joins us to break it all down. Steve Yates,

Later in the show, a fourth round of nuclear talks between the U.S. and Iran has been abruptly, yeah, that's a good word for it, postponed, with both sides blaming logistics. Oh, it was a logistical issue. Former Deputy Assistant Secretary of Defense Frank Gaffney, he stops by to give his insight on the negotiations. But first, today's Situation Report Spotlight.

The tariff war between the U.S. and China is showing signs of strain on both sides. I think that's fair to say. In China, reports continue to emerge of factories slowing down and even shutting their doors altogether. And in a quiet but telling move, Beijing is now circulating a 125% tariff exemption list to certain companies, trying to ease pressure on its economy without making a public concession in its ongoing fight with Washington.

Back here in the U.S., the economy shrank at a 0.3% annual rate in the first quarter. That's the first contraction in three years. Economists say the drop was driven in part by a surge of imports as companies scrambled to beat Trump's new tariffs.

Both governments claim that they're open to negotiations, but neither looks ready to blink. And frankly, this is a game of who blinks first. For more on this, let me bring in former Deputy National Security Advisor to the Vice President and Senior Research Fellow for China and National Security Policy at the Heritage Foundation. That's a mouthful. Steve Yates. Steve, thanks very much for joining us again.

Thank you, Mike. It's great to be with you again. Thank you. Hopefully you feel that way at the end of our discussion. Let's start with the China-US trade war, of course.

It's always been a matter of, with something like this, I think, of who blinks first. Do you think China's blinked? 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. I don't want him to, but those options were probably there if he'd 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. 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 question is the tolerance within China for eating bitterness, as they say in Chinese, and versus Americans who might start seeing some pressure at the pump and change in supplies and small businesses might get squeezed. Do you think, going back to your comment that you started out with, where he's had an opportunity to de-escalate or however you want to put it, but at every turn he's escalated, is that just simply a reflection of...

who's on the other side of the table, meaning President Trump and President Trump's tendency to be aggressive in something like this. So, what I'm saying is, if it had been someone different, of course, we may not even be in this position because we wouldn't be looking to rebalance trade, which I think is absolutely the right thing to do. But I'm just wondering whether this is just a characteristic of the, perhaps of the Chinese mindset that

if the person on the other side of the table is being aggressive,

There's no way you can de-escalate your position. 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 in several different ways.

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, with the end of it, they did give us the gift of COVID.

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. 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.

Yeah, they've been eating our lunch from a technology perspective because they've been stealing everything. Yeah, subsidies, theft, all kinds of stuff that the past form of negotiation wasn't going to solve. And it was getting to a point where I think it really was critical. We had to change what we're doing. 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. 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

and lessen our dependency and make sure that the neighbors and others are part of the program with us.

Well, what could be the downside to doing this? Because I agree, we need to do this, right? It's absolutely necessary. And for too long, the regime, not the people, the regime, people always say, well, you shouldn't talk about the people. I'm not talking about the Chinese people. I'm talking about the regime under Xi Jinping and previous leaders. They've spent years, decades, right? Clawing their way towards the top of the heap through the theft of intellectual property and economic information and research and development. But in trying to reset China,

this relationship. What could be the downside? Obviously, a hit to the economy, but what else do you think? 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. 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 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?

Is that you don't freak out in biorhythms? You know, you got to throw it all in there. Lots of bees. Okay. All right. No idea. Look, I mean, hey, to your point, I think some of their reactions, some of the way they play this, meaning the Chinese regime, the Communist Party, you know, I think

think in part has taken them by surprise. They've been very good, I think over the years at analyzing the leaders around the world, understanding how a country may react to a particular move on their part.

As an example, they came out recently and said, "We're not going to export rare earth minerals." And I mean, look, they've got a near monopoly certainly on the refining of it and a large percentage of access to rare earth minerals.

And then what happened, I think, caught them by surprise because suddenly the US, we're looking at, let's get rid of some of these regulations. We got to start digging, right? We have to produce our own because we have that ability. We've just stopped doing it because of the sage grouse or God forbid we should impact a particular plant. And then there's the European Union and

For the EU to say they need to reassess and maybe get more aggressive in their own efforts for both production and refining of minerals, I think that what's happened is, look, that's a necessary move. But I think the Chinese regime itself accelerated that movement, which probably caught them by surprise.

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.

But the subsidies inside China, basically using our money, taking from one pocket and putting 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.

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.

What do you think about, I mean, this is a two-part question. The notion that the regime, the Chinese regime seems to be saying, "Okay, look, we're going to take some of these items and exempt them from tariffs." You could argue that is in a sense a move on their part over the past week or so to try to start deescalating this issue.

And then earlier you talked about the pain that they're going to start feeling in China. I think they already have, right? Factories are reportedly coming to a standstill. A lot of containers stacking up at ports. Ships aren't moving.

So, there's the question of, okay, well, the Chinese population, they're feeling it. We're going to feel it here in the U.S. too over maybe a short time. But I get the sense that the U.S. population won't suffer the short-term pain quite the same way that the Chinese population would.

Yeah, 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.

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 ours 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 401k, but a 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 water mark. And so we'll weather this a lot better than the Chinese do if we keep making deals with Japan, Korea, Taiwan, China.

India, if there's real movement in moving manufacturing, Apple's talked more about iPhones coming out of India more than from China. 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.

Okay. I want to follow up on that. But first, Steve, as you know, we have some terrific sponsors. But if you can stay right where you are, don't go anywhere. Unless you got to take a bathroom break, perhaps, in which case you can. But we take a quick break and then we'll be right back with Steve Yates from the Heritage Foundation.

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Welcome back to the PDB Situation Report. Joining me once again is Steve Yates of the Heritage Foundation. We've been talking all things China, tariffs, trade war. You may have heard about it. Steve, in your estimation, how long is this going to last before we get to something that you could call normal?

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.

become the pace setters for where the other deals might be flowing. 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, but it would get into kind of a predictable back and forth of communication that calms markets down.

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. 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. Do you anticipate that these tariffs that currently exist between the US and China, you think that could continue through the rest of this year and into next?

Some of them, yes. So, like 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.

As soon as they do that, those 20% could be reduced. Maybe they go to 10%, maybe they go to 5%, maybe they go to zero. But if that flow does not measurably go down, they're staying in place, 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.

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. 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. Right.

Okay. Well, I certainly take your point that part of this in terms of what happens with China is dependent upon the US being able to negotiate these deals and get these agreements in place with economies like India, like China and other South Korea.

And so we and we have to assume that that will be the case. There's a lot of impetus for that. Although, what do you make of the Chinese regime? In a sense, it's almost, you know, a threat where they've reached out to some of our allies and said, you know, watch out, be careful. We do not want you to be making these trade deals.

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.

But the U.S. 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. 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 about seeking economic advantage from the threat you want us to pay to protect you from. 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? And so if they're willing to pick a fight with the Philippines, Vietnam, you can't feel comfortable.

Yeah, Xi Jinping, he's like the Tony Soprano of the diplomatic world. Yeah, he's coming in and saying the envelope's a little light to all our allies. But look, again, I think if we talk about, look, Target, Walmart, others, some of the big boxes have put out word that we expect that some of the shelves are going to look a little bare, prices may go up.

And so, I guess kind of going back to an earlier question, you do wonder, because part of this is a political, right? A domestic politics issue, right? So, and they're certainly looking at that, consumer confidence and sort of attitude towards the existing administration and

So, the question always is, well, how much pain would the US population be able to bear? And the White House is saying there will be some pain. Yeah, I think it somewhat comes down to communications. I mean, while 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. 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? 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

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. 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.

Yeah, I was just going to point out the whole TP, boo-ha-ha, right? And the hunt for toilet paper became paramount. Now, I think it's apples and oranges, right? I take your point about people put up with it to some degree, particularly early stages of the pandemic. But there was a sense of, I don't want to compare it exactly, but sort of a 9/11, we're all in this together kind of thing.

I don't know that they'll feel that way with a trade war, a trade war. But look, I want to pivot. I want to pivot. And because, you know, you and I can multitask here and I want to move from China and get your opinion on, you know, the shuffle kerfuffle. I'm going to I'm going to trademark that term at the White House involving Mike Walz and his deputy, Alex Wong.

Yeah. Well, I have to say, just I know some of these people involved and I sort of hate to see quick changes. And and obviously there there are issues there that had to be addressed. I don't know why, but this was 100 days in and this tenure that's on the short end for those that are counting. It's not the shortest, but it is on the short end.

These guys have done like a thousand days of work. 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. 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. It's really all about, do you believe things are getting done the way you want to get them done? And you can change that.

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. 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.

Yeah. Well, look, he lasted 100 days. You and I talked before the show that the measurement of time in Washington, D.C. now is referred to as a Scaramucci, right? In terms of- With all of them, it's the shortest measurement of time. Yeah, Mooch's. But look, I think Waltz is moving over to be UN ambassador, so it's not like he's being banished from the administration. But-

To your point that something had to be done, let me ask you why and in relation to what? Was it the pressure from that kind of the signal chat group gaffe or was it something else? Do you think there was a deeper underlying concern over Mike Waltz as National Security Advisor?

Yeah, so I don't know if it's anything that says, you know, 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 multiple things being done at once are not like anything I lived through in the Bush administration.

And so 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 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. 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 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. And if change was required, the people on the inside would know better than I would. Yeah. Well, I mean, apparently-

Marco Rubio will step in. He's going to do double duty. According to reports, anyway, they're currently vetting people for- That's what I expect. It would be very, very unusual if Secretary Rubio did this long term. Yeah. And I think given today's environment, the global concerns that we've got, the number of flashpoints and crises, you can't do that. I don't think we live in a world right now, anyway, where you can combine those two.

two positions. Listen, Steve, as always, delightful. And I don't say that lightly. I appreciate it. Take that one. No. Yes. Yes. Senior Research Fellow for China and National Security Policy at the Heritage Foundation. Listen, it's always excellent to get your insight. Thank you for stopping by. And I look forward to the next time, man.

Coming up next, well, the fourth round of nuclear talks between the U.S. and Iran hit a delay. What? You mean it's not going smoothly? This time, just hours before negotiators were set to meet in Rome. Former Pentagon official Frank Gaffney joins us with his take on what's really going on behind the scenes. Welcome back to the Situation Report. The fourth round of negotiations between the U.S. and Iran has been postponed to

Talks were scheduled to take place in Rome this weekend, but Oman's foreign minister, who's been serving as mediator, says the delay is due to, quote, logistical reasons. The timing, though, well, that raises questions. Just days earlier, U.S. Secretary of Defense Pete Hegseth issued a sharp warning to the Iranian regime, saying that Iran would, quote, pay the consequence for its ongoing support of Houthi rebels in Yemen.

Meanwhile, the U.S. slapped new sanctions on several companies allegedly tied to Iran's illicit oil and petrochemical trade. It's an economic lifeline for the regime.

The official line may be about logistics, but behind the scenes, frankly, the pressure is clearly mounting. Joining us now is Frank Gaffney. He's the former Deputy Assistant Secretary of Defense in the Reagan administration and the president of the Institute for the American Future. Frank, thank you very much for taking the time to join us here on The Situation Report. It's a pleasure to be with you, Mike. Thanks for having me.

What's your read on this news that the latest round of discussions between the US and Iran have been postponed? 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. 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. So, at some point, that ceases to be in prospect. And 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 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. 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. 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.

What would that look like? I mean, you talk about targeted attacks against the IRGC, because recently there's been a fair amount of discussion, surprisingly, about the idea of an Israeli-led attack on their nuclear infrastructure. But if it's not that, and I take your point, the IRGC has its fingers in every aspect of the Iranian government and economy. And

They really do pull the strings here, but what would that look like in your mind? 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've 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. 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, too.

Rather, apparently, they're drones and nuclear weapons-related activities that seem to be being targeted as well. But the point is, 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...

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. 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.

I take your point. Look, the holy grail for decades has been that the population in Iran would rise up and say enough is enough.

We all, I think, in varying degrees understand that you don't get any sort of mid to long-term peace and stability in the Middle East as long as the current Iranian regime continues its objective of trying to remove Israel and builds a network of proxies around Israel that has that objective. But I will say that for all these years that we've been hoping the Iranian population would rise up,

it hasn't happened and in a significant way, obviously. So I guess I tend to be a bit of a cynic because having spent all those years with the CIA and watching this closely, I don't know that without a more targeted approach to the Iranian regime, and I take your point about the IRGC, but

I guess, and I realize I've got to get to a question here, Frank, but work with me on this. I fear that the current administration, the Trump administration, just like with the Biden administration and previous administrations, goes the negotiating route. And to your point, it just delays the inevitable in terms of their nuclear weapons program because military attacks on Iran directly, it would just be considered a bridge too far.

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 to the 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. 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 Passages, all with the purpose of preventing 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.

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 actually does understand this. And I think his instincts say, you just can't let this thing continue to metastasize because

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. They have thus not targeted the regime. They have targeted some of the bad guys who are operating under its protection. They have targeted, you know, 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. 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, make it possible for the people of Iran to liberate themselves from the regime that, as I say, has tortured them endlessly, but wants to

Death to America as well as death to Israel. Are you against the idea of, maybe saying against is not the right way to put this, but do you feel that it's rather a fuel to exercise or just kicking the can down the road to target specific elements of their nuclear infrastructure in an effort to

Again, I wouldn't stop the program to your point. But do you feel as if that's also just kicking the can down the road? 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? 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. 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. 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. Yeah.

It isn't working. It hasn't worked. It won't, in my estimation, work. 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. Yeah. Look, I mean, you've raised some really important points. And you're correct. The

It's always been a heavy lift gathering credible and certainly actionable intelligence related to their weapons programs.

It's been one of the most difficult efforts within the intelligence community. And obviously, we've had to rely heavily on our liaison partners for that. Listen, Frank, we've got a lot more to talk about, but we need to take a quick break. So, if you could stay with us, we'll be right back with more from Frank Gaffney here on The Situation Report.

Welcome back to the Situation Report. Joining me once again is the president of the Institute for the American Future, Frank Gaffney. Frank, thanks very much for sticking around. You referenced in our earlier conversation the port explosion that took place recently in Iran. And clearly from your statement there, you don't believe that was an accident. It was attributed to mishandling of fuel supplies that were there at the port. What's your perspective?

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. 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 propellant. You light that stuff off and you're going to get a big bang. 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 doing frugally at the Biden, excuse me, the Trump administration, Biden. The Trump administration's desire 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. 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 differ, but it's close enough for government work, I believe. 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, 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. 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.

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. 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...

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.

And if that's actually part of the plan, I think we are looking at possibly mass destruction inside the United States at their hands, not just someplace else. Well, I think one of the...

ways to understand how difficult it's been to have accurate read on their programs and where they are in terms of a breakout is been the various estimates to breakout, which for years now have been, oh, it could be weeks, could be months, could be over a year. So that tells you that your intel is somewhat lacking in terms of specificities. It's charitable.

So, yeah, I know. I'm nothing if not terrible. But I think it's interesting because the Israelis, at least reports are, that the Israelis have developed some very specific plans in terms of targeting and...

attacking some of the nuclear infrastructure, right? But their most effective plans are a combination of air power and you've got to put some boots on the ground, right? In terms of special forces and some very specific targeting using small teams. And again, that's

That is a very complex operation. Not that they haven't engaged in other successful complex operations, but you can see, well, when they present a plan like that to the Trump administration, a potential default scenario is, well, okay, let's get those boots off the ground. Let's just talk about airstrikes. And then back to your point earlier, we're talking about some very hardened facilities here. So-

And also, again, to one of your points about where this would take us, if there is an attack on the nuclear infrastructure, some estimates are saying, well, maybe that buys us a year. So I think you raised a very important point. What are we doing? Are we just putting a bandaid on a sucking chest wound by doing that, as opposed to dealing with the actual problem, which is the existence of the current Iranian regime?

That's my bottom line. 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,

You know, they've had this mantra in the streets, in their pulpits, whatever. Death to Israel. Death to America. And, you know, when they do that, it doesn't mean that the people of Iran who've been endlessly, you know, 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. And I'm convinced we'll use them against not just Israel, but against us if they can.

What does it look like in your mind? What does the region look like if one day, say it's not too far in the future, the regime in Iran says, "Okay, we've done it. We're a member of the nuclear club." What does that then look like in the region?

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 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, to pretty much finish off that tiny piece of real estate.

Well, they're talking about estimates are somewhere in the region of 600 plus pounds of enriched uranium to 60%, right? And the heavy lift is getting to 60%. Getting to weapons grade of 90% or so is a relatively quick process. I don't want to oversimplify it, but- And you can even make it go.

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.

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 note,

Cheery note. Yeah. Listen, no, seriously, you know, Frank Gaffney, president of the Institute for American Future. I would love to have you back. There's a lot more that we could be discussing on air and taking it in different directions as well. Your insight is very much in perspective is very much appreciated. So I hope when when we call you, you'll you'll come on back. But we very much appreciate your time here on The Situation Report.

That's all the time we have for this week's PDB Situation Report. That's a lot to digest. If you have any questions or comments or humorous anecdotes, maybe you don't have any humorous anecdotes now after we've just talked about that, please reach out to me at pdbatthefirsttv.com. Every month, our incredible team, and they are incredible, they select a bunch of your questions and they produce one of our critically acclaimed and I'm sure at some point award-winning Ask Me Anything episodes.

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