(Preview) CEWC and Bleak Economic Data; Naval Exercises Around Taiwan; New Reporting on Chip Controls; Trump’s Standing Invitation to Xi
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Hello and welcome to Sharp China. I'm Andrew Sharp and you are listening to a free preview of today's episode.

Well, speaking of Trump and speaking of his relationship with Xi, I can now shift to the Trump section of the podcast. This is becoming a weekly tradition. We can close with whatever the hell is happening with President Trump. I'm going to play a clip of Trump discussing his invitation to Xi Jinping to attend his inauguration on January 20th. Here we go. Are you disappointed that China Xi won't be at the inauguration?

I don't know that he won't be at the inauguration. I mean, I haven't really spoken to him about it. I don't know that, actually. I would say that if he'd like to come, I'd love to have him. But there's been nothing much discussed. I have had discussions with him, letters, et cetera, et cetera, at a very high level. You know, we had a very good relationship until COVID. COVID didn't end the relationship, but it was a bridge too far for me. But...

If he'd like to come, I'd certainly be there. He hasn't, just so you understand, he hasn't said one way or the other. Because a lot of people say, he won't come, he will come. People think he will come, he won't come. It's something we barely discussed, just about didn't discuss. But I have had, especially through letters, some very good conversations. You know, because China and the United States can together solve all of the problems of the world.

If you think about it. So it's very important. And, you know, he was a friend of mine. I mean, he was here for a long time, right in that spot, except sitting in a very comfortable chair. He wasn't standing like you are. But we spent hours and hours talking. And, you know, he's an amazing guy. The press hates when I say that, but he's an amazing person. All right. So there we go.

What do you make of Trump's posture with Xi there? He's an amazing guy. They've had letters and letters, and he may or may not attend the inauguration. I would be, frankly, amazed if he did show up in D.C. on January 20th. I mean, I'd already heard that they're not, and they're going to send some, but they will send someone senior. But Trump said they haven't right out of the way. So it is interesting. It is

It was an interesting phrase around the communications. It sounds like it's more letters than actual conversation between Trump and Xi himself. And maybe there have been conversations by some of the folks around him. The language that China and the United States can together solve all the problems in the world is very much fits with how the Chinese talk about the relationship. I was going to say, it's sort of an echo of PRC messaging. So if you're in China, you know, again, and I asked yesterday in the newsletter is like...

you know, this PRC side, if they hear these comments, are they going to think Trump has opened to some sort of a, this mooted idea years ago of a G2, like grand bargain between the U S and China, or is he just speaking off the cuff? You know, I mean, he's definitely speaking off the cuff talking about what a comfortable chair she had at Mar-a-Lago. Actually open to some kind of a grand bargain. And again, we don't know. And I think I'm not sure his,

All his staffers know. I mean, there's so many cross currents in this administration. If you look at some of the folks from Silicon Valley who are going in and who are working on national security related issues, you know, their focus, especially the folks who have investments in, you know, the Silicon Valley companies trying to do the defense industrial base and military industrial companies, it's all, you know, it's all about China, right? It's all about reindustrialization of the U.S., ending reliance on China for critical components and critical minerals, right?

And that very much runs in the face of the idea of some sort of a broader grand bargain. And so it's too...

It's just too early to tell what's going to happen. And again, it's the same thing with TikTok, because of course, yesterday he also met with the TikTok CEO who showed up. He made the, you know, shows that she made his pilgrimage to Mar-a-Lago. Yeah. I mean, he also gave a meandering 90 second answer at that same press conference talking about TikTok. He was asked about what he plans to do in response to the TikTok legislation and he

He talked about how much he loved TikTok and how the Republican Party saw the greatest gains among youth voters because of TikTok.

So, I don't know. It was a real mixed bag. I mean, they also they asked him about preemptive strikes on Iran and Trump had a great response. I thought that was a good answer. Why would I tell you? I thought that was a refreshing departure from the Biden administration's approach to conducting foreign policy via press conference.

So, like I said, mixed bag across the board. I have no idea what to make of his posture with Xi. I mean, I kind of enjoy that China probably also has no idea what to make of any of it. And so, again, we're really going to have to wait until he's president and see all the positions he fills. And again, you know, this...

He likes having people fight under him. And I spoke to someone last week who does China stuff and briefed him and the team many times during Trump won and just said he likes the infighting. He wants them to argue in front of each other. And then he makes the decision. But that makes it really hard to sort of come up with, oh, this is all that Trump's going to do X, Y, and Z around China because I don't think it's a done deal yet.

Right. Well, and he also likes having world leaders off balance and unsure of what the direction would be. Including the governor of the great state of Canada, we've learned. That's right, the great state of Canada. Whose government may now be collapsing. No, I do think on the tariff piece, that's one area where there should be a fairly... There's a higher level of confidence that there'll be some pretty significant tariffs quickly. Yeah, yeah. But...

Higher level of confidence does not mean 100% certainty. Yeah. And even with the inauguration play here, you could spin it a number of different directions. On one hand, China, again, just executed an unbelievably aggressive hack on U.S. telecommunications firms. So then turning around and hosting Xi at inauguration is not ideal.

But it also could be sort of a transparent bear hug play from Trump. I mean, I think there's no downside for Trump. I think it's actually pretty smart because he looks magnanimous. He invited she. Yeah. If she comes, you know, and which I don't think he will. Again, I've heard he's not. But even whether or not what I heard is true, it makes him look a bit.

you know, it's not about she, it's about Trump and he won't get much time with Trump because it's, you know, he's got to take the inauguration and it just, it's a, it's a strange situation

visit for the leader of China. Exactly. But then he says no, and then Trump's like, well, I invited him. I made an offer. So now it puts the Chinese side a little bit on the back foot. Like, well, how are they going to reciprocate because Trump was being really magnanimous? That's what I enjoy about it. It does put the PRC on the back foot. It's a smart play. Yeah. Well, we will see. I don't expect to see Xi in D.C. in...

a couple weeks here, but who knows? So you did mention TikTok. Shochu at Mar-a-Lago on Monday. Also on Monday, TikTok appealed the D.C. Circuit's denial of its motion for a temporary injunction and is now moving the Supreme Court to temporarily enjoin enforcement of the TikTok law until it hears an appeal of the D.C. Circuit that upheld that same law

TikTok is requesting a judgment on the injunction by January 6th, telling the court that if the court won't enjoin the law, TikTok needs time to, quote, coordinate with their service providers to perform the complex task of shutting down the TikTok platform only in the United States alone.

And just so people know, in order to secure a temporary injunction, TikTok has to demonstrate a likelihood that their appeal of the law will succeed on the merits that they and they also have to establish that they will suffer irreparable harm if the injunction isn't granted. And they have to show that the burden on the government is limited if the law isn't joined.

And I don't love TikTok's chances of success on those fronts. They will suffer irreparable harm, but I don't think that they can establish in their motion that their appeal is likely to succeed on the merits because the D.C. circuit was pretty comprehensive in its rejection of TikTok's arguments. Do you have any thoughts on where things stand right now?

If the Supreme Court doesn't rule, either give them the injunction, doesn't rule in TikTok's favor, then their last hope is that they can convince the Biden administration to grant the one-time 90-day extension and punt it into the Trump administration. And then they'll have more ability to work together.

around work within, you know, speaking of surface area, work around that to try and get a more favorable outcome. I'm not sure why the Biden administration would do that. Right. Other than to say that TikTok has a, you know, there's tens of billions of dollars at stake. TikTok and some of its investors effectively have bottomless lobbying budgets. And they're pretty much in a name your price kind of situation.

Yeah, well, I mean, they've had a lot of time to negotiate a potential divestiture, and it's not clear. Honestly, we just don't know whether any of those talks have played out quietly behind the scenes. There certainly haven't been any rumors to that effect over the last nine months. And they really are running out of time. And what's interesting, too, that I had forgotten is that they actually—

if the law goes into effect, they actually have to allow users to export all their data. Mm-hmm. I mean, again, it's probably part of that sort of complex process they talk about for the reasons why they need to know by January 6th. Yeah.

no. And I mean, it will be a seismic disruption to the online economy. Like the, you and I don't use Tik TOK. Like I said, I signed up and haven't opened the app in years, not because of any security concerns, just because I'm a millennial and it's always been kind of this foreign world to me. I've never really adopted Tik TOK. Uh,

But a lot of people do. And there's like this elaborate infrastructure that could be unwound in a matter of weeks here. And so... And there's still a lot of... I think a lot of people don't realize what might happen. Right. And aren't at all... I would have thought at this point more people... I think some of the more...

Higher earning creators are starting to hedge out on other platforms like Instagram or YouTube. One of the other questions, of course, is going to be, so what do advertisers do? Do they commit to budgets on TikTok now into January? Do they wait until they hear from the Supreme Court?

I can't imagine they are in a hurry to commit to 2025 TikTok budgets. Right. And so and so, again, it just it becomes corrosive on on the business. And so if this ban goes into effect on January 19th, you know, the process for the Trump to undo it, it's not. I think that I think the law says there has to be like an interagency process for Trump.

for the president to decide basically to certify that it can continue. And so it's not like he could just come in at 12.01 p.m. on January 20th and sign something saying TikTok's fine. No, exactly. Yeah, and I would be, I'm not going to be stunned, but I would be surprised if the Supreme Court takes this case up at all. It involves complex constitutional questions about whether TikTok's algorithm constitutes speech

And therefore, a ban implicates First Amendment questions. And I don't know if the court is ready to address the algorithm question at all, because it would have implications for Section 230 policy, which impacts the tech ecosystem more broadly.

And I also don't think they would want to address it in this case where the net result would still probably be deference to congressional judgment on the national security threat question. And they would probably still uphold the law as it's written. TikTok's argument on the injunction is interesting because the idea that the interests of the government wouldn't be burdened because TikTok is not an imminent threat.

one of the arguments they raised is look, both presidential campaigns were on Tik TOK throughout the last year. And that's a fair argument to make. That's not an unreasonable argument. Yeah. I mean, and it is contradicted by the record in Congress where, you know, both the house and Senate considered this legislation and declared that Tik TOK is an imminent threat to national security. So that would be their problem in court. But rhetorically, uh,

a compelling argument to make. All right. And that is the end of the free preview. If you'd like to hear the rest of today's conversation and get access to full episodes of Sharp China each week, you can go to your show notes and subscribe to either Bill's newsletter, Cynicism, or the Stratechery bundle, which includes several other podcasts from me and daily writing from my friend Ben Thompson. I'm an incredibly biased news consumer, so I think both are indispensable resources.

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