What It Takes to Negotiate With China
19:28 Share

This is an iHeart Podcast.

Whatever challenge comes next, let Microsoft help you keep pushing forward. For more details, visit Microsoft.com slash challengers. Did you know that 92% of U.S. hiring decision makers expect to face challenges?

Finding qualified candidates this year? The costs of recruiting, advertising, interviewing, and onboarding can add up quickly. But Express Employment Professionals is your hiring solution. Go to expresspros.com today. Express streamlines your hiring process, saving both time and money. Whether you need contract staff or your core team member, visit expresspros.com.

Bloomberg Audio Studios. Podcasts, radio, news. The trade war between the U.S. and China is on pause. Officials from both countries have lowered tariffs temporarily, and they've agreed to keep talking.

Both countries hope they'll be able to draft a new trade deal by early August. Wall Street welcomed that news, but it is an ambitious timetable. And I wanted to get a better sense of how realistic it is that in 90 days, the U.S. and China could resolve their differences and the trade war between the world's two largest economies could end. So I called up Nicholas Burns, who was the U.S. ambassador to China under President Biden. It's one of the toughest jobs in government. He

You've got to both defend and push and resist on one hand, and then you've got to stretch out your hand to work.

with them and shake their hand on the other. But that makes for a very complicated relationship. Burns' job in Beijing was the capstone of a decades-long career as a diplomat. He's held senior jobs under Republican and Democratic presidents. Now Burns is a professor of diplomacy and international relations at the Harvard Kennedy School, which is where I sat down with him this week to talk about what he says is the most important relationship that the United States has.

I'm David Gurra, and this is The Big Take from Bloomberg News. Today on the show, Nicholas Burns, the former U.S. ambassador to China on the trade war, the challenges facing his successor, who was just confirmed by the U.S. Senate, and what he's telling his students at Harvard who are worried about the future of diplomacy.

I want to start with the meetings that took place over the weekend in Geneva, and I'm curious how you look at the way they unfolded and the outcome of them. Do you see it as a positive step? Well, first of all, I start from a first principle, and that is that China's been the largest and most important disruptor in the global trade system for about three decades right now. There's a reason why.

The United States and many other countries around the world have placed tariffs on China. China's manufactured exports in particular is because China's been dumping them around the world below the cost of production. And it's been a killer for jobs, both in the United States historically in the last several decades, but also around the world. So I have a degree of sympathy for China.

for the situation that President Trump and his team inherited, which was a situation that we left when I left in mid-January as ambassador to China. The Chinese are trying to act now as if they're the innocent party, that they're the victim of this trade war by President Trump, and that they're the responsible party when, in fact, the reality is quite different. Having said that, these are going to be very, very difficult negotiations over the next 90 days. I think in the end,

self-interest and logic will prevail. Both sides need an agreement.

China's our third largest trade partner. About a million American jobs depend on trade with China. Manufacturing jobs in China depend on trade with the United States. So neither country can afford to sunder the economic ties and the millions of interactions that our private sector has had with the Chinese economy over the last 40 years. And I think in the end, there will be a trade agreement. But getting there, I think, is going to be extraordinarily difficult.

During your tenure, you were trying to, if I may, rehabilitate a relationship that had worsened during the first Trump administration, develop conduits for communication, reestablish economic and security ties. When you left that post, could you have envisioned this turning out the way that it has in terms of how the rhetoric has been ratcheted up, the tariffs have been put in place? Is it the worst case that you envisioned or worse yet still?

I certainly did not anticipate 145% American tariffs on China or 125% Chinese tariffs on American goods.

And the trade war that has resulted effectively led to a trade embargo as of the past week, when no ships were sailing with goods back and forth, when manufacturers couldn't export to each other's countries. And you see the significant shortage of goods that traditionally are important to both economies. I didn't expect that to happen at all. We're the two largest global economies, so we have a profound impact on the health of a global economy, but we also

need the global economy to be functioning in a rational and stable way. And I think, you know, we're not anywhere close to being out of the woods. If the levels now are set at 30% tariffs on the American side imposed on China and 10% by China imposed on the United States, those are historically high levels. And a lot of trade will not be able to take place. It just simply won't be economical. A minute ago, you spoke about how China is portraying

Not just the talks, but the way that this trade war is unfolding. How effective do you think that is? Do they walk away from this feeling like they have the upper hand? Do you think the world views them as having the upper hand in these negotiations? Well, the Chinese press, the nationalists press, and to an extent the government of China, have been saying that they held out, that they stood strong, and that they faced up to the American tariff threats, and they did not blink at all.

And they've been trumpeting that line in the global south. President Xi just hosted most of the major leaders from South America at a major summit. He made a trip in Southeast Asia to the ASEAN countries. So they clearly are signaling to the United States, "You're not going to bully us.

We have other options. You've seen a big increase in Chinese manufactured exports to their neighbors. So yes, the government of China is trying to portray itself as the steady, solid country that stood up to the United States. I think that China needs a deal too. There's a reason why the Chinese met with Secretary Besant. The economy is slowing down.

They're facing lower GDP growth for the next five to ten years. They have a property crisis that continues to linger. They have a consumption problem. The Chinese people are not consuming in a rational way, sitting on their money because of the uncertainty of the investment environment in China itself. They have strengths in the Chinese economy, enormous strengths, but they also have these weaknesses. China could not afford a sustained trade crisis.

War with the United States. That's why they're at the table. And that's why they've agreed to a deal in 90 days What did you learn being there about that country's capacity to weather something like this? So you're saying they couldn't sustain it long term?

But give us some insight into how they had been preparing for a moment like this one where there would be this kind of geopolitical test. I was in China, of course, during the presidential election, our presidential election of November 2024. And as soon as President Trump was declared the winner in that election and prepared to take office, the Chinese began to prepare for a trade war. They saw it coming. They had listened to candidate Trump.

They did a lot of remobilization of their supply chain to try to stock up on minerals and on technologies that were important to them.

And they expected this. They also have an authoritarian system of government. And so it's a one-man rule in President Xi Jinping. Whatever he says goes. He prepared the Chinese people for a long struggle with the United States. And, you know, China is like the United States. People are patriotic about their country. I would say there's a highly nationalist...

After the break, Nick Burns weighs in on the job facing his successor and the effects of the Trump administration's cuts to the federal government.

How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast, free shipping to in-depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to AmazonBusiness.com for support.

In business, timelines shift, opportunities pop up fast, and your brand has to show up strong. That's why smart teams trust 4imprint. Whether you're planning ahead or responding to a last-minute need, 4imprint makes it simple to get the right promotional products fast, done right, and without stress. With thousands of options, including apparel, drinkware, tech, and trade show essentials, you'll find the right fit for your brand and timeline. Many available with a 24-hour turnaround.

Not sure where to start? 4imprint offers free product samples, expert guidance, and free logo assistance so your order turns out exactly as planned. And every order is backed by 4imprint's 360-degree guarantee, so it will arrive on time, on budget, and printed perfectly. That's what it means to be 4imprint certain.

Explore solutions at 4imprint.com and get your brand where it needs to be quickly, confidently, and without compromise. The U.S. is going to have a new ambassador in Beijing soon. David Perdue has been confirmed. I wonder if you've spoken with him, exchanged messages with him, and what counsel you would give him about the role itself and the ways in which you found you could be the most successful. Well, I have spoken with him, and I wish him the best of success because he's

We have so much riding on this policy with China that we've got to be successful I think he's very well placed to be ambassador. He worked in business in Hong Kong and Singapore He's been to China as a member of the Senate He was on foreign relations and armed services committees which are the two relevant committees two of them for China and Has a clear sense of what he wants to do. That's a tough job. I found out it's not for the faint of heart We have with China

the most competitive relationship of any country in the world. China's our leading competitor for military influence and military power in the Indo-Pacific, our leading competitor on the major technologies, AI, biotech, quantum computing, that will form the basis of the future of the global economy. Our third largest trade partner with which we have a very problematic trade and tariff relationship

And obviously, and maybe this is the most important part of it, we believe in human freedom and human rights. And the Chinese government does not practice that. They are major violators of the human rights of their own people. But at the same time, and this is what makes it so complicated, David, is that China's our largest and strongest competitor, but there are certain issues where China is one of our most important partners.

We're the two stewards of the global economy. We're seeing that play out right now on the tariff issue. On climate change, we're the two leading emitters of carbon. And so President Biden felt very important to work with China. If we want to do anything about fentanyl, we've got to work with China to make that happen. So I always thought it was-- it wasn't a 50/50 balance. I actually thought I spent about 80% of my time on the competitive edge with China, about 20% on cooperative matters.

And that I thought was the right ratio. But that makes for a very complicated relationship where you've got to both defend and push and resist on one hand, and then you've got to stretch out your hand to work.

and shake their hand on the other, that's the reality of being the American ambassador to China. Before I kind of pull back and ask you some broader questions, I wonder how you felt about the relationship between the U.S. and China when you left. Well, I arrived in China, was sworn in in 2021, and arrived a couple months later hawkish about the relationship on national security grounds because China is this very serious competitor country.

impinging on a lot of American interests in the Indo-Pacific. And I think I left China more hawkish. Yeah, I saw the reality of their relationship and the cynical nature of the government of China and of the duplicity on some issues of the government of China. The fact that we would make an agreement and then it wasn't honored. So I think this is a long-term structural rivalry.

We're competing for global power. I don't think that will change, no matter who's president. And so we've got to steel ourselves for the next decade or two to a historic competition with China. And China right now

is stronger than any adversary the United States has ever faced in the history of the United States. Going back to the Revolutionary War, including the First and Second World Wars, including the Cold War, the Soviet Union in its heyday was not as strong as China is today. And so we've got to face that competition. But here's the catch: we've got to do it in such a way that we don't end up in a war.

Because a war would be catastrophic. But to be engaged with the Chinese leadership, to talk to them as Secretary Besant did this past week on the tariff issue, but on a thousand other fronts, be engaging them and talking to them so you can compete, we can cooperate where we can, but we avoid a conflict which in the future would be an absolute catastrophe. That makes for a very difficult and complex job.

There seems to be a message from this administration in Washington that there can be bombast and heated rhetoric, radically increased tariffs, but then you can flip the switch back and things can go back to normal. And drawing on your experience as a diplomat for many decades, do you think that that's folly or that that's accurate? I think we're at a moment of great transformation in the global power picture.

where alliance is shifting very rapidly. You see that China and Russia and Iran and North Korea and Venezuela and Nicaragua are kind of all working together, authoritarian dictatorships.

And they're working together to try to cut down the power of the United States, reduce it in the world and of our democratic allies. And I always felt, working for President Biden, that one of our strongest suits is that we have reinforced our alliances. Despite the fact that we are still the strongest power in the world, you do need friends and allies in the world. And I do think that's the greatest mistake that President Trump has made in

in his first four months in office. If Donald Trump had faced China down,

but had not placed high tariffs on Japan, South Korea, the European Union, Canada and Mexico, all those countries would have been on our side of the table. They would have the same trade and tariff problems with China that we do, but they weren't interested in doing that once they were placed under the same tariff regime that China was placed under. And so I fear that the administration

Really has a blind spot. They think the United States can go it alone in the world We can't and so that's an own goal by the Trump administration It's one that they've got to reverse if they hope to be effective Can you recognize the State Department today? You can you spent 45 years and in government service given the cuts that have taken place the priorities of it and

How different is it from the place that you first went to 45 years ago? David, I'd answer it this way. I spent a lifetime in government at the State Department and White House serving in Washington and overseas. Every government agency can be subject and should be subject to reform, but taking a sledgehammer to USAID and firing 8,000 people in one week without a thought, without a plan, without actually knowing what you're tearing down, that was a huge mistake.

treating nonpartisan civil servants, military officers, foreign service officers, as if they are disloyal because they work for President Biden. Well, they also work for President Bush. They've worked, people like me, work for both parties. We take an oath to the Constitution to be nonpartisan, but the Trump administration has not appointed a single foreign service officer

professional ambassador since it took office. They've appointed lots of political appointees, but nobody from the ranks of our serving career diplomats. 17 of our deputy chiefs of mission are number two officials in embassies who were assigned to these jobs and getting ready to go have been told they're not going. And many of them, if not all of that group, are women and people of color.

And so there is a crisis in our civil service right now. And if these cuts continue the way they are, and if the denigration of our civil servants continue, you're losing a great group of people who just want to serve the country and want to do it in a nonpartisan way. And they will be nonpartisan. That is the Foreign Service and U.S. government way. And I think the Trump administration has been extraordinarily destructive.

of this tradition we've had in this country now for about 130 years of a professional civil service, not a political spoiled system, what we had in the 19th century, but professional civil service that would serve the country and serve any president that the American people elected. That's what's at stake.

And I think when the pendulum does swing back at some point, we're going to have to recreate USAID, recreate the Voice of America, recreate Radio Free Asia. These are journalists who we employ to tell the story of the United States, in the case of China, to several hundred million Chinese listeners of VOA and Radio Free Asia. So enormous damage has been done by this very cynical effort, DOGE,

to tear down

all these institutions and not replace them with anything of value. But you're confident that that force of gravity will swing the pendulum back, that we will be able to do that? I don't think anybody can predict when reason will prevail again and logic will prevail and sanity, but it has to because I think future administrations, future presidents will look around at their government and say, "Where are my aid workers? How do we run vaccine programs, global health programs, literacy programs that we ought to be doing

Around the world because of an Americans are generous people. Where are my diplomats? Why do I not have any diplomats with 30 or 40 years of experience? Well, they were all fired summarily kicked out in the first couple of weeks and months of the Trump administration It's a true national crisis

I'd like to close by asking you what you're telling students here who are here at the Kennedy School, here at Harvard, to learn from your experience, to learn an art of diplomacy that has been practiced and perfected for many decades. What do you tell them? Hang on. Hang on to your ideals.

It's a good thing to want to spend your life serving the United States of America your country It's a good thing you want to be in the public square or Teddy Roosevelt called the arena of public service Study hard and and don't leave that dream Behind of public service because what a tragedy would be for our country if young people in this country felt well I can't serve in the federal government because I'm not welcome as a career official in the federal government. We need non-partisan Americans

out there representing us, without any regard to party allegiance. That's an enormous asset. And if we let it wither away, and this administration is doing that, it's going to do enormous damage to our country. This is The Big Take from Bloomberg News. I'm David Gurra. This episode is produced by our senior producer, Naomi Chavin, with help from Amber Ali.

It was edited by Patty Hirsch, Tracy Samuelson, Molly Smith, John Liu, and Ramsey Al-Rakabi. It was fact-checked by Rachel Lewis-Kriske and mixed and sound designed by Alex Segura. Our senior editor is Elizabeth Ponso. Our deputy executive producer is Julia Weaver. Our executive producer is Nicole Beamster-Boer. Sage Bauman is Bloomberg's head of podcasts. If you liked this episode, make sure to subscribe and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back on Monday.

I know a lot of cops. They get asked all the time, have you ever had to shoot your gun? Sometimes the answer is yes. But there's a company dedicated to a future where the answer will always be no. This is Absolute Season 1, Taser Incorporated. I get right back there and it's bad. Listen to Absolute Season 1, Taser Incorporated on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

In Orlando, meetings reach another level thanks to a growing list of award-winning restaurants, a world-class convention center, a great hotel community, easy access through the airport, and of course, the weather. Andrew Moyes, VP of Fan Expo HQ, had this to say about Orlando.

Often we will bring our entire team to Orlando for the event, and that includes our executive-level team members as well. And we're able to give them a great experience with luxury hotels, special restaurants, all those key things to feed into the proper executive experience. Orlando's easy airport access and close proximity to hotels and transportation make it a top choice for hosting major events.

And while you may know Orlando for its attractions, industries like healthcare, aerospace, and advanced manufacturing make it a hub for cutting-edge businesses. Or in the words of Mr. Moyes, Orlando really can be that destination where you can innovate, collaborate, and look to the future. And that's what makes Orlando unbelievably real. Learn more at OrlandoForBusiness.com. This is an iHeart Podcast.