The Ben Shapiro Show - SHOWDOWN: Trump Stares Down China

00:00:00.000 Well, folks, we're going to get to the continued chaos in the markets in just one minute.

00:00:03.000 What does it all mean?

00:00:04.000 What does the incipient China-U.S.

00:00:07.000 trade war actually mean?

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00:00:27.000 There was a lot of puzzlement yesterday.

00:00:29.000 Among certain quarters about why exactly the stock market dropped precipitously after that massive run-up that happened on Wednesday.

00:00:36.000 So as you recall, President Trump decided that he was going to reverse many of the sanctions, tariffs that he had placed on foreign nations as of Wednesday morning, 12.01 Wednesday morning.

00:00:46.000 Within 13 hours, he reversed the vast majority of those, but he also put a 125% tariff on China and retained a 10% baseline tariff against everybody else.

00:00:55.000 Well, the markets responded.

00:00:56.000 To the avoidance of the car crash that would have been the imposition of all those tariffs all at once, based on this bizarre formula, the markets reacted to President Trump's postponement with joy and soared almost 3,000 points in the Dow Jones Industrial Average.

00:01:10.000 And then yesterday, there was a massive sell-off.

00:01:12.000 And so people were kind of puzzled.

00:01:14.000 Wait, aren't we out of the woods?

00:01:15.000 And the answer is the markets were now pricing in what exactly President Trump is doing.

00:01:20.000 We now have a policy.

00:01:21.000 That policy is going to be much more consistently applied.

00:01:23.000 You're not going to see as much variation, vacillation back and forth.

00:01:26.000 And so the markets are trying to price in that risk.

00:01:29.000 And that is why U.S. stocks, according to The Wall Street Journal, fell sharply on Thursday as investors sorted through a global economic outlook that remains uncertain despite drastic improvements over the past 24 hours.

00:01:39.000 The declines accelerated after the White House said the tariffs imposed on China by President Trump in his second term actually added up to 145 percent, not 125 percent.

00:01:48.000 Stocks paired those losses a little bit in afternoon trading.

00:01:51.000 The Dow Jones Industrial Average finished down about a thousand points.

00:01:54.000 Again, none of that should be particularly surprising.

00:01:58.000 What is a little bit surprising is that the bonds, the bond yields, for example, have been increasing precipitously at the same time, meaning that the market for bonds is really soft right now.

00:02:09.000 30-year bond yields are up to about 5 percent, which is a very, very high rate.

00:02:13.000 And that is happening because people are divesting from American investments overall.

00:02:18.000 And it is not just stocks.

00:02:20.000 It is also typically stocks.

00:02:26.000 If stocks go up, then bond yields tend to increase because the price of bonds is going down.

00:02:32.000 When you buy a bond, essentially what you're buying is a long-term investment that is going to pay off a certain amount at the end.

00:02:39.000 And it's not a particularly high amount, typically speaking.

00:02:42.000 So, if you are risk-seeking, you're going to buy stocks rather than bonds.

00:02:45.000 If you have a lot of faith in the American economy, you're probably going to buy stocks rather than bonds.

00:02:49.000 If you're a little nervous, you're going to buy bonds rather than stocks.

00:02:51.000 If people aren't buying either, what that means is that they don't believe either that the stock market is going to continue to increase at rapid rates or that the bond market is going to be a problem because America is not going to pay back our debts.

00:03:04.000 So that is just a sign of lack of faith in the American economy overall.

00:03:08.000 Another sign of that lack of faith is the decline in the DXY dollar index.

00:03:14.000 So that dollar index is a way of measuring the relative strength of the American dollar versus a basket of foreign currencies.

00:03:20.000 As Mohamed El-Erin of Allianz points out, the DXY dollar index is currently trading below 100, a level last seen in early 2022.

00:03:28.000 Unlike past moves, this year's sharp dollar depreciation is fueling worries about an erosion in international confidence in the dollar and in U.S. assets as a whole.

00:03:35.000 And part of that, again, is due to the fact that when you actually cut off international trade,

00:03:43.000 There's less demand for the dollar in international trade.

00:03:45.000 And so overall, the dollar can weaken.

00:03:47.000 And so what you see when you look at all of these things combined is enormous amounts of nervousness about the future of the global economy and the American economy in particular.

00:03:58.000 I mean, the thing to remember about what President Trump is doing here is that it's not as huge and large as it was slated to be on Wednesday morning.

00:04:05.000 It is still really, really big.

00:04:07.000 In fact, here is a chart of the effective tariff rates that President Trump has put in place.

00:04:12.000 This chart shows before Wednesday and then after Wednesday.

00:04:16.000 So as you can see, the EU's tariff rate that was proposed when he first put in place the tariffs was 20 percent.

00:04:23.000 Now it is about 10 percent.

00:04:25.000 Mexico was at 25 percent.

00:04:26.000 It's still at 25 percent.

00:04:27.000 China went from 54 percent to 145 percent.

00:04:31.000 Canada is still at 25 percent.

00:04:33.000 And all the other countries who had varying rates ranging from 46 percent for Vietnam, 24 percent for Japan, they all went to... 1.00

00:04:51.000 And we'll get to in a minute the necessity for a war, a trade war with China.

00:04:55.000 That is a real necessity.

00:04:56.000 What President Trump is doing policy-wise makes a lot of sense.

00:04:58.000 However, the actual comparison should not be, this is what the markets are figuring out right now, the actual comparison should not be to what President Trump would have done if the tariff rates had remained in place on Wednesday morning.

00:05:08.000 Instead of walking them back for 90 days.

00:05:10.000 The real comparison should be to what the tariff rates were, say, three weeks ago before any of this began, or six weeks ago before any of this began.

00:05:18.000 The tariff rates with China were fairly low.

00:05:22.000 The tariff rates with Canada and Mexico were virtually non-existent.

00:05:25.000 Now those are both up at 25%.

00:05:26.000 The tariff rates with regard to Europe were averaging 2.5%.

00:05:32.000 Now those are at 10%.

00:05:33.000 So no matter how you slice it, if you compare the average tariff rate Of the United States had on various countries that were not China, compared to what it is now, we basically quadrupled it overnight.

00:05:46.000 That obviously is going to cause a lot of consternation in the markets.

00:05:50.000 And this is why Scott Besson is going to be on the phone all weekend long and for the next couple of weeks trying to get trade deals that will reduce those 10% tariff rates back down towards zero.

00:06:36.000 Herein lies the issue with regard to China.

00:06:38.000 How fast you go, the measures that you take in order to box China in absolutely matter. 0.99

00:06:43.000 Now, China absolutely deserves this. 0.97

00:06:45.000 China is a geopolitical enemy of the United States.

00:06:47.000 They are.

00:06:48.000 All this pretend pussyfooting that's been going on between a wide variety of administrations over the course of my lifetime with regard to China is wrong, and President Trump is the only president who's had the courage to actually just say it.

00:06:59.000 He's the only president who's had the courage to say they're not just a strategic competitor, which is what Joe Biden called them.

00:07:05.000 They're not a rising market that we need to find a way to integrate with, which was the view of both George W. Bush and Bill Clinton.

00:07:11.000 And Barack Obama, by the way.

00:07:14.000 Donald Trump recognizes clearly that China is a geopolitical enemy of the United States, that they have been ripping us off, they've been stealing our IP, that they are spreading their tentacles all over the world, they're working with all the countries that hate our guts. 0.91

00:07:28.000 President Trump has the courage to say that thing.

00:07:31.000 Jordan Schachtel, who's an excellent foreign policy analyst, He has a list of the various IPs that have been stolen by the Chinese over the course of the last 10 years or so. 0.98

00:07:43.000 Those include Stolen from military applications.

00:08:06.000 Boeing C-17 data.

00:08:07.000 Military transport plane specs hacked and then linked to China's Y-20.

00:08:11.000 Apple's self-driving car tech.

00:08:13.000 Ex-employee actually took secrets to a Chinese startup.

00:08:15.000 Qualcomm chip technology.

00:08:17.000 Theft via partnerships to advance Chinese semiconductors.

00:08:19.000 Nuclear reactor designs.

00:08:21.000 Molar rotor radio systems.

00:08:23.000 Intel semiconductor processes.

00:08:24.000 IBM software code.

00:08:26.000 Cisco router code.

00:08:28.000 China steals, it is estimated, by certain measures.

00:08:32.000 China steals, no less. 0.87

00:08:34.000 Then $600 billion per year in American technology and IP.

00:08:40.000 $600 billion per year.

00:08:42.000 That is a massive number.

00:08:43.000 That is a massive number.

00:08:45.000 So yeah, we should be seeking to contain China. 0.99

00:08:47.000 Yes, we should be seeking to build an economic ring of fire around China.

00:08:52.000 Now, in order to do that, a few things have to happen.

00:08:55.000 First, you need better alliances.

00:08:56.000 You need to actually strengthen your alliances around China.

00:08:59.000 So that means better trade deals.

00:09:01.000 Better relations with Vietnam, South Korea, Japan, the entire Indo-Pacific region.

00:09:07.000 It means better relations with the EU, which is a major trading partner for the Chinese.

00:09:11.000 It means that you actually need to strengthen your alliances, just like any other war.

00:09:14.000 A trade war works like this.

00:09:15.000 If you're going to isolate China, you have to build better relations with everybody else on the planet, so as to isolate China. 0.97

00:09:21.000 This, by the way, is what Scott Besant has been pitching.

00:09:22.000 He says that President Trump's strategy here is to isolate China in this way, to flip everybody against China, so it's the US and all of our friends.

00:09:30.000 Against China. 0.75

00:09:32.000 The other thing that matters here is things like, for example, the strength of the US dollar as the international reserve currency.

00:09:38.000 That matters an awful lot.

00:09:40.000 It matters because if everybody is still trading in US dollars, we have leverage.

00:09:43.000 If you cut yourself off from world markets, what you end up doing is reducing the leverage you have against other countries, economically speaking.

00:09:51.000 One of the amazing things that has happened in terms of American power over the course of the last 30 years has been the integration of global financial systems.

00:09:59.000 It's what has allowed, for example, the Trump administration to successfully sanction the nation of Iran.

00:10:05.000 The state of Iran has been sanctioned by the United States.

00:10:08.000 Russia has been sanctioned by the United States through use of international financial mechanisms like, for example, cutting Russia off from the SWIFT system.

00:10:15.000 Doing these things is only possible because of the integrated nature of technological commerce in the modern era.

00:10:23.000 It's not just that the United States can say we're not going to trade with Russia anymore.

00:10:26.000 We don't do that much trade with Russia.

00:10:27.000 Is that the United States could sanction banks that were doing business with Russia.

00:10:31.000 It is not just that the United States could say we're not going to buy Iranian oil anymore.

00:10:34.000 It is that the United States could threaten any bank or entity that did business with America with a cutoff if they did business with the Iranians. 0.99

00:10:42.000 And that has major effect.

00:10:43.000 So in other words, removing yourself from the international system actually damages you if you're the most powerful person in the system.

00:10:50.000 And the United States is the most powerful being in that system.

00:10:54.000 It is the sun around which all of the other If we just disappear, if we just dissociate, that doesn't increase our power, it radically reduces our power.

00:11:05.000 So, we need to increase our economic power, and that means greater integratedness with other countries economically that are not China.

00:11:11.000 It means more integration into international financial systems that we control.

00:11:16.000 This is how you build up the power to actually take on China, which is again a rising power with the ability to truly throw a wrench into the global economy. 0.78

00:11:25.000 In amazing ways, while stealing American IP.

00:11:27.000 China is a rising power.

00:11:29.000 The United States has to battle its way into shape to take them on.

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00:13:38.000 You also need to build up the American military.

00:13:41.000 That means greater expenditure on different types of military tech.

00:13:46.000 A few weeks ago, we had on Sham Sankar, who's the CTO, the Chief Technology Officer for Palantir, which is one of the new defense firms that does business with the American government.

00:13:53.000 He was saying we need to reorient away from any of these sort of big-ticket items in the American military that are a legacy, and instead toward new technologies that allows for the United States, for example, to defend the Taiwan Straits or break a blockade around Taiwan.

00:14:05.000 That requires serious expenditure.

00:14:07.000 It also requires serious oversight.

00:14:10.000 It requires a real military strategy, not just throwing things against the wall and not just assuming.

00:14:16.000 That America's heretofore power is going to be its power dynamic going forward.

00:14:20.000 So you need better trade relations with everybody that's not China.

00:14:24.000 You need more military power, better military tech.

00:14:28.000 And then finally, you need the actual reshoring of national security-laden industries in the United States.

00:14:35.000 And that does require some time.

00:14:37.000 You can't just do that overnight.

00:14:39.000 There's a bunch of stuff that we need that is made in China, including certain forms of semiconductors.

00:14:44.000 Including rare earths materials, which we'll get to in a moment.

00:14:46.000 There are all these things that are necessary.

00:14:48.000 And so, in order for you to successfully fight a trade war that theoretically could go hot, if you're going to do that, you really need to put your ducks in a row.

00:14:57.000 So, you can agree with the strategy of the Trump administration overall, but the tactics matter.

00:15:02.000 How it gets implemented really, really matters.

00:15:07.000 Because there are some countervailing possibilities, and this is what the market's trying to figure out right now.

00:15:11.000 Even if you agree with Trump's tariff blitz on China and that it's going to do serious damage to China, you have to think, how could China strike back?

00:15:17.000 This is how you're going to fight any war.

00:15:19.000 You have to figure out, well, how does the enemy respond to the thing that you are doing?

00:15:22.000 So there are several things that China could do that would really, really damage America and the global economy in a very serious way.

00:15:30.000 China controls a heavy share of rare earth markets.

00:15:41.000 Like 90% of global rare earths markets, according to Fox Business, are dominated by China.

00:15:45.000 That is a group with 17 elements essential to defense, energy, and electronics industries.

00:15:50.000 Last week, China placed seven kinds of medium and heavy rare earths on an export control list.

00:15:55.000 That's not an outright ban, but if China just decides they're going to stop exporting all of that stuff, it really gums up the works.

00:16:02.000 In 2010, by the way, the CCP actually did this to Japan.

00:16:05.000 They halted rare earth exports to Japan during a diplomatic dispute.

00:16:10.000 And they've restricted shipments of germanium, gallium, and graphite to the United States over the past two years.

00:16:16.000 As Fox Business points out, U.S. companies would struggle to fill the gap.

00:16:19.000 It takes an average of 29 years to go from mineral discovery to production in the United States.

00:16:23.000 Meanwhile, in China, where they don't give a crap about the environment, they just drill it in months. 0.96

00:16:26.000 They go and get all that stuff in months.

00:16:30.000 So, tool number one that China could use against the United States is a total ban on rare earth mineral exports, which could render American missiles fighter jets Even consumer technology like smartphones, inoperable.

00:16:42.000 Okay, so that's tool number one that China could use.

00:16:44.000 Tool number two that China could use to strike back against the United States would be the mass sell-off of U.S. treasuries.

00:16:50.000 So the United States has been, because we like to borrow money and spend it, selling bonds to China at an exorbitant rate.

00:16:57.000 China likely owns well over $1 trillion in U.S. bonds at this point.

00:17:01.000 If China decides to sell off those bonds at bargain basement rates and just take the loss, just realize the loss.

00:17:07.000 It would destroy America's capacity to borrow in the market.

00:17:12.000 Because bonds are like anything else.

00:17:13.000 It's a debt.

00:17:14.000 It's a debt instrument.

00:17:15.000 If I can buy a bond for cheaper on the open market, then I'm going to buy it from, say, the Treasury Department.

00:17:20.000 Then I'm just going to buy it cheaper on the open market.

00:17:22.000 It makes it very difficult to raise new debt to pay for all the things that America wants to pay for.

00:17:28.000 So that is a tool.

00:17:29.000 That would be a shock to the American system.

00:17:31.000 If China were to just sell off en masse its bonds, it would crater the economy pretty much overnight.

00:17:37.000 So there's that as well.

00:17:39.000 So rare earth mineral export bans, treasury sales by the Chinese, and then finally, and most shockingly, China could simply try to blockade Taiwan.

00:17:47.000 They could say, listen, we're so boxed in at this point, we're going to blockade Taiwan, and we're going to hold you hostage until you remove the tariffs, until you back off.

00:17:57.000 They might not just blockade Taiwan, by the way.

00:17:59.000 They could theoretically invade Taiwan.

00:18:00.000 Now, a blockade of Taiwan is the safer option if you're the Chinese, because basically you're then daring the United States to fire on your ships. 0.95

00:18:06.000 If they were to invade Taiwan and things went hot, that would not be a super shock because Taiwan would fire back.

00:18:12.000 If they blockade Taiwan, they would be daring the Taiwanese to basically fire on Chinese ships and initiate a war that China would likely win. 0.64

00:18:20.000 So, if they blockade Taiwan, the question is, would the United States actually be able to or have the courage to break the blockade around Taiwan at the risk of a possible hot war with China?

00:18:32.000 And there are members of the defense establishment who have made pretty clear that they wouldn't.

00:18:36.000 That includes the brand new Undersecretary for Defense, who was just confirmed by the Senate, Elbridge Colby, who's basically said this.

00:18:41.000 He says we need to shift all of our focus to China.

00:18:43.000 But also, if China invades Taiwan, that's not a core national interest for the United States.

00:18:48.000 Well, China knows that, but here's the problem.

00:18:50.000 If China were to blockade Taiwan, all the semiconductors that are sophisticated semiconductors, all the stuff in your phone, your computer, in our military tech, all that stuff is coming from China and Taiwan.

00:19:00.000 All of it.

00:19:01.000 And what that means is that we have not yet built up the domestic capacity or the other offshoring capacity to make up for that.

00:19:08.000 So the question is, are enough of our ducks in a row to do the thing that we are doing?

00:19:13.000 This is the reason why there are many advocates of harsh policy against China who say that we should actually go slower here.

00:19:20.000 Instead of jumping to 145% tariff, for example, we should have gone to a 20% tariff on China.

00:19:25.000 Gradually cause the reshoring of industries away from China.

00:19:30.000 Given us time to build up relationships with other countries without, for example, yelling at them about Greenland or how we're going to invade Canada or some such.

00:19:38.000 Now, again, this all could do and probably will do severe damage to China.

00:19:43.000 But one of the things you have to make sure of is that when you do severe damage to a country, they don't try to break out.

00:19:50.000 One of the realities of the beginning of World War II in the Pacific sphere is that it was Western cutoff of oil and rubber, largely.

00:19:59.000 To the Japanese that created the impetus for the Japanese to invade Pearl Harbor.

00:20:05.000 Now, again, the cutoff of oil and rubber made perfect sense.

00:20:09.000 It was a thing that had to be done.

00:20:10.000 China was expanding its grip in Manchuria.

00:20:12.000 It was expanding into areas of the South Pacific, obviously.

00:20:17.000 And so the attempt to cut off resources to Japan, which was an FDR decision, that makes sense.

00:20:22.000 It doesn't make sense if you're not going to then put yourself on a military readiness, military preparedness footing.

00:20:29.000 The tragedy of Pearl Harbor is not just that we were surprised.

00:20:32.000 The tragedy is that we weren't ready to fight back immediately because FDR had not done the necessary work in order to ensure that we were ready to go to war at that time.

00:20:40.000 It took a couple of years for the United States Industrial Complex to fire up such that it could actually take on a war.

00:20:46.000 Japan thought that it had a moment of opportunity specifically because of that.

00:20:51.000 The face that you show to an enemy in a war ought to be impassive, invulnerable.

00:20:54.000 You ought to be a wall.

00:20:55.000 And that means that everything has to move in lockstep.

00:20:58.000 It means that when you take a trade policy that is likely to push in a more confrontational direction, you have to be ready with the iron fist inside the velvet glove.

00:21:06.000 Economics is the velvet glove.

00:21:08.000 Military force is the iron fist.

00:21:10.000 And if things get too bad economically for China, the chances that they actually try to start something like a hot war over Taiwan are not insignificant at all.

00:21:21.000 It's why the markets are very, very nervous right now.

00:21:23.000 They're not sure exactly what's going to happen.

00:21:24.000 They also don't know whether President Trump is willing to go all the way.

00:21:26.000 What is he willing to do?

00:21:28.000 Is he looking for an off-ramp?

00:21:29.000 What does that off-ramp even look like?

00:21:31.000 Now, in the meantime, again, I'm not saying that the tariff war with China isn't a good idea.

00:21:34.000 I think it is a good idea.

00:21:35.000 I'm just saying that we need to have a very concerted strategy for how we go about that trade war with China because international relations is certainly a delicate business.

00:21:46.000 According to the Wall Street Journal, the gloves are off.

00:21:48.000 The next chapter of U.S.-China decoupling has begun.

00:21:50.000 The pain will be felt everywhere.

00:21:52.000 In jacking up his tariffs on China and pausing steep duties on dozens of other nations, President Trump is pushing the world's two biggest economic powers into a battle that will leave neither unscathed and risks tanking the global economy.

00:22:02.000 The total tariffs imposed on China in Trump's second term now add up to 145%.

00:22:06.000 The tariffs could eventually be walked back, but already there are signs that a portion of the $582 billion in goods trading between the two countries is grinding to a halt.

00:22:14.000 Now again, that's going to hurt America. 1.00

00:22:15.000 It's going to hurt China way more.

00:22:18.000 As the Washington Post points out, Trump's tariff blitz could hardly have come at a worse time for China.

00:22:24.000 Exports have been a rare bright spot in the Chinese economy, struggling with a property market slump, high youth unemployment, and domestic spending that is so weak it threatens to turn into a deflation crisis.

00:22:32.000 The hit to exports threatens the legacy of Chinese leader Xi Jinping, who's trying to transform his country from the world's factory into an advanced manufacturing and technology superpower.

00:22:41.000 A delicate transition that could be thrown off by this bruising trade war.

00:22:44.000 By the way, there is great irony to the fact that while the United States is trying to up its manufacturing game, China is trying to downgrade its manufacturing game and move into high tech.

00:22:51.000 In less than a week, the world's two largest economies have progressively upped the ante to a point where their respective import duties are now at historic highs.

00:22:59.000 Now again, China requires the export market.

00:23:03.000 It's going to hurt China tremendously. 0.68

00:23:05.000 And that's good.

00:23:06.000 We want to hurt China. 1.00

00:23:08.000 But you then want to know what the next step is.

00:23:10.000 After you hurt China, what's the endgame? 0.97

00:23:11.000 What is the thing that you are looking for?

00:23:13.000 And if the idea is serious containment, then you have to make sure that you don't have holes in the wall of the containment facility.

00:23:20.000 There are no cracks in the edifice.

00:23:23.000 Already the EU is looking at cracks in the edifice.

00:23:26.000 Already the EU, again, they're cowards.

00:23:28.000 So of course the EU is looking for a way out.

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00:24:37.000 Also, did you hear about the recent study showing that about 20% of women who have medical abortions experience complications?

00:24:42.000 There have even been some horrifyingly tragic deaths.

00:24:45.000 What is concerning is the Biden administration relaxed the reporting requirements so the NIH doesn't have to track injuries related to these medications anymore.

00:24:51.000 These pills now account for over 60% of all abortions.

00:24:54.000 Many women still don't fully understand the risks. 1.00

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00:25:40.000 According to Reuters, China and the European Union have exchanged views on strengthening their economic and trade cooperation in response to U.S. tariffs.

00:25:47.000 The Chinese Commerce Ministry said on Thursday, again, that's not on Wednesday, that's on Thursday, that's after Trump relieved the tariffs on the EU, at least moved them down from what would have been 20% down to 10%.

00:25:56.000 The EU and China are now moving toward closer trade relationships.

00:26:00.000 So again, if the idea is that the policy is supposed to isolate China by basically forcing everybody to choose between the United States and China, you got to woo.

00:26:08.000 It's not just a steak, it's also a carrot.

00:26:11.000 Right now, we're using a lot of stick with our allies.

00:26:13.000 We need to use more carrot with our allies. 0.98

00:26:14.000 Presumably, that's what Scott Besant is going to try to do.

00:26:18.000 Because there are, in fact, limits to what you can do if there are cracks in the edifice.

00:26:23.000 You've seen this with Russia, by the way. 0.55

00:26:25.000 All of Europe and the United States were supposedly unified under the Biden administration in fighting off the Russian invasion of Ukraine.

00:26:32.000 And you know what happened?

00:26:32.000 Russia found a way around it.

00:26:34.000 They were able to find cracks.

00:26:35.000 They sold their oil to China.

00:26:36.000 They sold their oil to India.

00:26:37.000 And by the way, they sold an enormous amount of oil still to Europe.

00:26:41.000 Cracks in the edifice mean that there is a way for China to escape the ring that surrounds it. 0.98

00:26:47.000 And if they escape the ring that surrounds it, then you haven't actually achieved what you're seeking to achieve, which is complete containment of the Chinese economy. 0.94

00:26:53.000 In a video call on Tuesday, China's Commerce Ministry Wang Wentao discussed with European Trade and Economic Security Commissioner Maros Sefcovic the restart of talks on trade relief and to immediately carry out negotiations on electric vehicle price commitments.

00:27:07.000 One of the things that China's been doing is flooding the European market.

00:27:10.000 With cheap electric vehicles.

00:27:12.000 And the Europeans don't like it, so now they're coming to some sort of agreement over all of this.

00:27:17.000 The EU increased tariffs on Chinese-built EVs to as much as 45 last October.

00:27:21.000 45% last October.

00:27:22.000 Brussels and Beijing have floated the idea of lifting the tariffs through possible commitments to minimum prices, known as price undertakings for imported cars.

00:27:30.000 So what are the other countries going to do?

00:27:32.000 Are the other countries going to go along with the United States?

00:27:35.000 Will the isolation happen here?

00:27:37.000 That is the big question of the day.

00:27:41.000 And the Trump administration needs to make clear that they're looking for deals, deals, deals.

00:27:46.000 It's now deal time.

00:27:47.000 Let's get those deals.

00:27:48.000 Let's get those 10% tariffs down to zero.

00:27:50.000 Let's make sure that we now have free trade and open markets with all of our allies, except for China.

00:27:56.000 President Trump seems to be wavering a little bit on what exactly happens with regard to these deals.

00:28:03.000 Because, now again, the rest of the world market understands that deals are necessary for the United States, not just sufficient.

00:28:08.000 It's not just the U.S. wants those deals.

00:28:10.000 The U.S. actually needs those deals. 0.97

00:28:12.000 So there is a bit of a leverage issue.

00:28:13.000 President Trump says we'll have to see what happens if no deals are made after 90 days.

00:28:17.000 Maybe the United States goes back to its former posture as of Wednesday morning.

00:28:21.000 Well, that's what would happen.

00:28:23.000 I mean, if we can't make the deal that we want to make or we have to make or that's good for both parties, it's got to be good for both parties.

00:28:31.000 And then we go back to where we were.

00:28:33.000 Go back to the numbers that you announced last night.

00:28:35.000 I think so.

00:28:36.000 You wouldn't extend the pause?

00:28:37.000 Yeah. We'll have to see what happens at that time.

00:28:40.000 Bye. Thank you.

00:28:42.000 So, if that's still on the table, maybe that's leverage.

00:28:45.000 Maybe leverage is going to go back on the table and so you better sign on to a good...

00:28:48.000 But one of the things that is just true about foreign relations, if you continually come with a carrot and then a stick and then a carrot and then a stick to the same countries over and over and over, eventually they triangulate.

00:29:00.000 Again, there'll be a transition cost.

00:29:20.000 and transition problems but in the end it's going to be it's going to be a beautiful thing we're doing again what we should have done many years ago we're letting it get out of

00:29:35.000 control

00:29:36.000 Now, it is certainly true that the Trump administration is moving away from the Peter Navarro end of the administration, which is good.

00:29:42.000 As I said yesterday on the show, if he fires Peter Navarro, you're going to see a bull run.

00:29:46.000 Apparently, according to Politico.

00:29:49.000 President Trump upended not just his tariff strategy, but his trade team this week.

00:29:52.000 Former hedge fund manager and Treasury Secretary Scott Besant is now at the helm.

00:29:55.000 Populist Peter Navarro has been relegated to the sidelines.

00:29:58.000 Wall Street punching bag Howard Lutnick has been recast into the role of bad cop, according to three people close to the White House, granted anonymity to speak frankly about internal dynamics.

00:30:06.000 The diminished roles of Lutnick, the Commerce Secretary who for weeks had been the administration's point person for foreign leaders on tariffs, and Navarro, Trump's trade advisor, reflect this week's turmoil over Trump's trade policy and a shift toward the fair trade policies that Besant So,

00:30:21.000 again, that is a proper and smart shift by the presidents of the United States.

00:30:25.000 That is a much better orientation of his team.

00:30:27.000 Navarro, for his part, is still appearing on television, trying desperately to pretend that he has not been sidelined from all of this.

00:30:34.000 Before we let you go, this is just breaking here.

00:30:36.000 The media says you're in the doghouse with Trump.

00:30:40.000 Is that true?

00:30:41.000 Or is that fake news?

00:30:45.000 That's fake news, Jesse.

00:30:49.000 It's not really fake news, apparently.

00:30:51.000 I mean, at the very least, Trump has shifted his trade policy away from the preferences of Peter Navarro, who is very happy with that gigantic trade war that was going to happen as of Wednesday morning.

00:30:59.000 Meanwhile, in order for President Trump to continue to prop up and strengthen the American economy, the House and Senate need to get together on the one big, beautiful bill.

00:31:08.000 House Speaker Mike Johnson has been performing admirably with the world's narrowest majority in the House of Representatives.

00:31:13.000 According to the Wall Street Journal, House Speaker Mike Johnson performed another Houdini straitjacket escape on Thursday, passing a budget outline over doubts on his right flank.

00:31:21.000 Now comes the hard work of ironing out the tax and spending details of a policy bill.

00:31:25.000 That mission is no fail.

00:31:26.000 The House voted 216-214 to advance a budget bill.

00:31:30.000 That's the starting gun for passing a tax bill of 51 Senate votes under reconciliation.

00:31:34.000 Johnson only lost two Republican votes.

00:31:36.000 The line of the week came from President Trump.

00:31:38.000 Close your eyes and get there.

00:31:41.000 Points to Trump on that one.

00:31:42.000 The House holdouts fear the eventual policy bill will not include real spending restraint.

00:31:46.000 They're right that cuts are always promised in Washington and seldom delivered, but they held a fight on is the detail in the final bill and not the budget outline that just opens up the debate.

00:31:54.000 Senate Majority Leader John Thune also said that they were aligned with the House in terms of what their budget resolution outlines in terms of savings.

00:32:03.000 Supposedly, there's supposed to be $1.5 trillion in savings in the budget.

00:32:06.000 We'll see what actually materializes.

00:32:08.000 This is the first step toward getting the big, beautiful bill, so Johnson is steering that through.

00:32:12.000 If that bill were to fail, it would sign effectively the death knell of the Trump administration in terms of its possible efficacy.

00:32:18.000 Meanwhile, Democrats are already pouncing, hoping desperately that all of this collapses in like a house of cards.

00:32:24.000 Janet Yellen, the former Treasury Secretary who did a brilliant job of ushering in 40-year inflation, she of Hobbiton, she explained that this was a massive self-inflicted wound.

00:32:34.000 All a massive self-inflicted wound.

00:32:37.000 I'm afraid I could not give it a passing grade.

00:32:40.000 I'm sorry.

00:32:41.000 I think policy has been, this is the worst self-inflicted wound that I have ever seen an administration impose on a well-functioning economy.

00:32:58.000 Okay, I'll take that with a giant block of salt, given the fact that, again, she presided over the worst inflation that we've had in this country since 40 years, leading to the inflated stock market that then has come down pretty significantly because of the tariff war and all of the rest.

00:33:13.000 All of this is someone more expert than I in these matters.

00:33:15.000 Mike Gallagher, he, of course, a former U.S. representative representing Wisconsin's 8th Congressional District.

00:33:21.000 He is now the head of defense at Palantir.

00:33:23.000 He's the former chairman of the Select Committee on China.

00:33:25.000 Mike, great to see you.

00:33:26.000 Thanks so much for taking the time.

00:33:27.000 Thanks for having me.

00:33:28.000 Yes.

00:33:30.000 So let's talk about the tariff regime that President Trump has now placed on the entire world, but mostly China.

00:33:35.000 So he's gone to a 10% baseline rate with pretty much everybody except for Mexico and Canada, and he's gone to a 145% tariff rate on China.

00:33:44.000 Now, I'm obviously very warm towards smacking China as hard as humanly possible. 1.00

00:33:48.000 What do you think of the implementation of the policy?

00:33:50.000 What would a smart tariff policy look like?

00:33:53.000 The case that I've made is that strategically, obviously orienting toward China as a geopolitical enemy is correct. 1.00

00:33:58.000 But the tactics of how you actually box them in, that matters an awful lot here.

00:34:02.000 What do you think President Trump is doing right?

00:34:04.000 What is he doing wrong?

00:34:06.000 Well, the first thing I think President Trump should take credit for the 301 tariff investigation he launched in his first term.

00:34:13.000 And if you read the documents justifying the 301 tariffs, it's actually an incredible piece of work.

00:34:18.000 It really lays out in unprecedented fashion in terms of its scope and scale.

00:34:23.000 The economic war that China has been waging against America since they acceded to the WTO.

00:34:30.000 And so I think the 301 tariffs on China are justified.

00:34:33.000 I would go further and say.

00:34:35.000 As we endorsed in a bipartisan manner, even Democrats agreed to this on the committee, I think the time has come for us to remove permanent normal trade relations status with China. 0.97

00:34:44.000 You can argue that the tariffs effectively have done that already.

00:34:47.000 But if you remember, when we ratified PNTR, we basically said that China's economy is permanently a market economy.

00:34:55.000 Okay, China's economy has never been a market economy at all.

00:35:00.000 And so continuing the three...

00:35:01.000 ...

00:35:13.000 Because right now, we're subsidizing our own destruction, right?

00:35:16.000 Chinese ships, military equipment, American asset managers are subsidizing that.

00:35:20.000 So I think Trump can go hardcore on that.

00:35:22.000 And then at the same time, and this is where the strategy comes in, I do think you need to, I don't, I'm less sympathetic to the 232 tariffs.

00:35:30.000 I think you have to in order to mitigate the economic impact of China tariffs, but also just to rally the world against China's predatory practices.

00:35:37.000 You need to find ways to break down economic and technological barriers within the free world and expand the bounds of the free world to include countries that don't fall neatly into the ally category.

00:35:48.000 For example, even with our closest allies, the UK and the Aussies, we have this we have the AUKUS arrangement.

00:35:55.000 There are still barriers to collaboration because of outdated ITAR regulations that we could get rid of.

00:36:00.000 And Trump could claim, hey, I'm bringing the free world closer together.

00:36:04.000 We are joining hands to push back against the commies who are trying to destroy us right now.

00:36:09.000 That's like the highest level grand strategic move I think he needs to make.

00:36:14.000 So, Mike, I was talking about this on the show, and one of the things that I've suggested was that if you are preparing for this level of a trade war, which could get into some pretty severe risks of the actual shooting war, and we'll talk about that in a moment.

00:36:26.000 If you're doing a trade war like this, one of the things you have to make sure of is that all your ducks are in a row.

00:36:31.000 What that means is you have to draw your allies close.

00:36:32.000 You actually have to build these alliances to the point where they don't fracture.

00:36:35.000 You don't have the EU working back channels with China, for example.

00:36:39.000 You have to actually build up our military mechanisms such that if China should decide that it wants to try something, it's dissuaded by deterrence from doing anything.

00:36:48.000 And you actually have to reshore or allow for the reshoring of crucial industries away from China.

00:36:52.000 All those things take a little bit of time.

00:36:54.000 And so perhaps the idea of a gradual escalation here that sort of boils the frog slowly as opposed to turning the flame all the way up would have been a better idea.

00:37:03.000 What do you make of that?

00:37:04.000 I agree with that.

00:37:06.000 You know, if you read the final economic report of the Select Committee on China, when we endorsed getting rid of PNTR, we argued for the gradual phasing in of a new tariff regime.

00:37:16.000 There's some things that we care less about.

00:37:18.000 For example, like I want Wisconsin farmers to sell soybeans to China.

00:37:22.000 And quite honestly, I don't have a problem if Americans want to buy cheap textiles from China as long as long as those textiles aren't made with slave labor in Xinjiang province. 0.94

00:37:32.000 But continuing

00:37:33.000 I agree with that.

00:37:33.000 Continuing our dependency when it comes to advanced pharmaceutical ingredients, rare earth and critical minerals, all things that we know are going to be weaponized by China if we find ourselves in a confrontation over Taiwan, for example, strikes me as a very bad,

00:37:48.000 you know, strategic misstep.

00:37:50.000 it's easy to start to revive a kind of bilateral trade agenda.

00:37:54.000 I don't think anyone's arguing for a big multilateral trade agreement, perhaps a digital regional trade agreement in Indo-Pacific, but you could see a post-Brexit gold standard trade agreement with the UK with a docking provision.

00:38:05.000 I've argued for a free trade agreement with Taiwan, provided the standards are high.

00:38:09.000 You

00:38:10.000 How do you actually effectuate?

00:38:15.000 The onshoring, right?

00:38:16.000 Because I think the CHIPS Act provides a good example of how not to do this, right?

00:38:21.000 We're not going to fork over $50 billion for every industry we decide is important from a national security perspective.

00:38:27.000 And we certainly aren't going to have a good effect from that if we also saddle those grants with absurd conditions, right?

00:38:35.000 Like in order to get a CHIPS Act grant, you need to build like a woke daycare next to your facility.

00:38:40.000 There, I think the best mechanism for onshoring is a combination of bilateral trade agreements, technology agreements, and radical deregulation of the domestic economy and leveraging our asymmetric advantage, which is not throwing a ton of humans and money at the problem.

00:38:55.000 It's innovation.

00:38:56.000 It's leveraging software to reimagine, manufacturing, things like that.

00:39:01.000 Above everything you said, though, Ben, I want to hammer home the most important variable, the variable that matters more than anything else, is the balance of conventional military power.

00:39:10.000 Our economic moves are important.

00:39:12.000 They're non-trivial.

00:39:13.000 But if we don't fix the balance of conventional military power, which is sliding in the wrong direction, the odds of a war with China that will not end well for us go up and up and up.

00:39:25.000 Thank you.

00:39:26.000 Thank you.

00:39:27.000 you.

00:39:27.000 So one of the points that I've been making is that we are building this economic cordon or attempting to build this economic cordon around China.

00:39:34.000 Historically speaking, when countries Feel that cordon tightening.

00:39:37.000 It actually does lead to war.

00:39:39.000 I mean, this is presumably what happened with the attack on Pearl Harbor.

00:39:42.000 Historians basically suggest that because the West was working so hard to deprive Japan of rubber and oil, that basically Japan felt that the only way that it could break out was to preemptively strike the United States before the United States actually had time to mobilize its military capacity.

00:39:57.000 So one of the things that becomes very clear here is that as the news tightens around China, which is obviously what the Trump administration would like to do, China could pursue some pretty significant retaliatory measures.

00:40:08.000 And three that come to mind right away that we've been discussing on the show are the deprivation of rare earth minerals.

00:40:14.000 China controls a huge percentage of rare earth.

00:40:16.000 minerals. They could theoretically just stop exporting those.

00:40:19.000 Two would be the mass sell-off of American bonds, try to undermine the American economy by basically killing our debt.

00:40:25.000 And three would be the most extreme measure, which would be a blockade or even invasion of Taiwan.

00:40:29.000 Maybe you can talk about those various risks.

00:40:31.000 Thanks.

00:40:33.000 Well, maybe I'll attempt to connect sort of the economic dynamics you started with to the invasion of Taiwan.

00:40:38.000 Because traditionally, particularly when people on Wall Street analyze this problem, they say, well, China would never invade Taiwan, right?

00:40:44.000 It would be an economic catastrophe.

00:40:46.000 I think that is a dangerous form of mirror imaging.

00:40:50.000 And I think it actually gets the causality backwards, right?

00:40:52.000 Because they'll say, well, China's economy sucks.

00:40:54.000 Therefore, Xi Jinping wouldn't be...

00:40:56.000 Foolish enough to invade Taiwan.

00:40:57.000 Well, part of the reason China's economy sucks is because Xi Jinping is actually preparing his country for a war with America and the West over Taiwan, right?

00:41:06.000 He's encouraging his citizens to eat bitterness, to use a phrase he's used to young Chinese... 0.90

00:41:11.000 Citizens, right?

00:41:12.000 He's trying to sanction proof his economy.

00:41:14.000 And I think the more we engaged in that dangerous form of mirror imaging, the less prepared we are.

00:41:19.000 So how do you deal with it, right?

00:41:20.000 Just to reinforce the fact, you need to develop the ability, not just the threat, but the ability to put the entire PLA Navy on the bottom of the Taiwan Strait if they do something as foolish as trying to take Taiwan. 0.60

00:41:30.000 That's point one.

00:41:31.000 Point two, you know, figuring out the onshoring and critical... 0.96

00:41:34.000 I mentioned APIs earlier.

00:41:37.000 If you remember in the early stages of the pandemic, Chinese officials threatened to cut off the export of pharmaceutical ingredients and plunge us into a sea of coronavirus.

00:41:45.000 And in the wargaming we did on the Select Committee, we started off in the conventional military.

00:41:49.000 But we increasingly realized a lot of this would play out in the economic space.

00:41:55.000 It would become supply chain warfare.

00:41:56.000 And then third, I would say we have to, as of like yesterday, develop the capability to deal with the cyber weapons that China has pre-positioned in our critical infrastructure, right? 0.50

00:42:06.000 Imagine someone went around the country like strapping sticks of dynamite to every water utility or grid system around the country.

00:42:12.000 Well, effectively, that's what's happened with the revelations surrounding Bolt Typhoon.

00:42:17.000 That's a huge vulnerability.

00:42:19.000 And one thing that's also apparent, if you do any wargaming around Taiwan, the United States homeland is a target for attack, especially in the cyber domain.

00:42:27.000 In a meaningful sense, you can say the invasion of Taiwan has already begun in the cyber domain.

00:42:32.000 And therefore, in order to have an effective deterrent in cyber, we also need to develop the offensive capability to tear down the great firewall in China.

00:42:40.000 I've argued that that should take on a position of importance in our grand strategy, similar to the way tearing down the Berlin Wall was a centerpiece of late stage old Cold War strategy.

00:42:49.000 Thank you.

00:42:51.000 you.

00:42:51.000 So, Mike, obviously, as we watch all of this play out, I think we both agree that the orientation of the Trump administration is correct right here.

00:42:59.000 I'm asking you to look into a crystal ball, but again, you work at a company called Palantir, so I suppose that's okay.

00:43:04.000 What exactly do you think is going to be the Trump administration's plan going forward?

00:43:10.000 Do you think they stick with this high level of tariffs?

00:43:12.000 Are they able to broker these bilateral agreements?

00:43:14.000 Or do you think that the Trump administration will look for some form of off-ramp?

00:43:18.000 Because one of the things that we have to consider here is President Trump has said that he uses tariffs as leverage.

00:43:23.000 The problem I have is I'm not sure exactly what leverage you could ever receive from China that would be sufficient to make anyone sanguine about going back to anything like a trade normalized relationship.

00:43:33.000 I mean, they're stealing $600 billion a year in our intellectual properties, just

00:43:36.000 Well, I do think the Trump administration has an opportunity to go around the world now and cut various deals with countries that they threaten to tariff.

00:43:46.000 I think that would be good for Americans.

00:43:49.000 I mean, a lot of the devil will be in the details.

00:43:52.000 The area that my crystal ball or my palantir seeing stone is most murky is when it comes to the future of our economic relationship with China, right?

00:44:00.000 Because President Trump has signaled time and again that he wants to cut a deal with Xi Jinping, right?

00:44:05.000 In the first term, they had a phase one trade agreement with Xi Jinping.

00:44:09.000 And there were a lot of other priorities that got held up in pursuit of that deal, right?

00:44:13.000 I had an amendment to the defense bill that would have imposed the death penalty.

00:44:17.000 And then the catastrophe scenario would be if...

00:44:43.000 Some trade agreement with China or concession is bound up in a broader geopolitical agreement where we basically surrender a certain amount of our position in the Indo-Pacific.

00:44:53.000 Now, I don't think that's what's going to happen, right?

00:44:55.000 Because I know Mike Waltz, I know John Ratcliffe, I know Pete Hegsett.

00:44:59.000 These are hawkish folks when it comes to China.

00:45:02.000 I think they see the threat of the CCP clearly.

00:45:05.000 And to sort of end where I began, Trump does deserve credit.

00:45:10.000 We're the biggest shift in U.S. foreign policy since the end of the Cold War, right?

00:45:14.000 The entire now bipartisan realignment in a hawkish direction on China was started in 2017 with the first Trump term.

00:45:23.000 Now, the administration was divided on key issues.

00:45:25.000 The division, however, was resolved at the end by what we saw with China's behavior in the pandemic and covering up the origin of the pandemic.

00:45:33.000 If we had any lingering doubts.

00:45:36.000 About the genocidal Marxist-Leninist we were dealing with in Beijing, the pandemic sort of removed all of those doubts.

00:45:43.000 So similarly, now is the time to see our enemies clearly, work with our allies and partners to push back on that threat.

00:45:49.000 It's not going to be easy.

00:45:50.000 I think it's more complex than the old Cold War because we were never economically entangled with the Soviet Union.

00:45:54.000 But it is well within our power to not only prevent a hot war, but to win a Cold War against the CCP.

00:46:02.000 That's Mike Gallagher.

00:46:03.000 He's the head of defense at Palantir and former chairman of the Select Committee on China.

00:46:05.000 Mike, really appreciate the time and the insight.

00:46:08.000 Thank you, sir.

00:46:09.000 Meanwhile, the Trump administration was dealt a bit of a blow with regard to its immigration plans.

00:46:14.000 The Supreme Court on Thursday, according to the Associated Press, said the Trump administration has to work to bring back a Maryland man who was mistakenly deported to prison in El Salvador.

00:46:22.000 The court acted in the case of Kilmar Abrego Garcia.

00:46:24.000 That was the Salvadoran citizen who had an immigration court order preventing his deportation to his native country over fears he would face persecution.

00:46:32.000 So the U.S. District Judge had ordered Abrego Garcia return to the United States by midnight on Monday.

00:46:38.000 The order properly requires the government to facilitate Abrego Garcia's release from custody in El Salvador and to ensure his case is handled as it would have been had he not been improperly sent to El Salvador.

00:46:48.000 The Chief Justice had already pushed back the deadline, and the Justice said that the court order had to be clarified to make sure it didn't intrude into the executive branch power over foreign affairs.

00:46:56.000 So it basically split the baby.

00:46:59.000 The order says that they have to work to get this person back from El Salvador.

00:47:04.000 It was a Venezuelan immigrant who had basically been labeled by the administration and also in a formal court case a likely member of MS-13.

00:47:12.000 He had not been convicted of that crime, but he doesn't have to be.

00:47:14.000 The foreign policy of the United States suggests that the executive branch does have the ability to deem whether somebody is a likely threat and then remove that person if that person does not have citizenship in the United States.

00:47:26.000 This person happened to have a hold on him.

00:47:28.000 Based on a claim of essentially asylum.

00:47:32.000 The administration admitted that they had made a mistake in deporting the guy.

00:47:35.000 So basically the court said a few things.

00:47:37.000 The court said, number one, you got to work to bring this person back.

00:47:39.000 Number two, the district judge has to make sure that they're not intruding into the executive branch's determination of what this person's status is.

00:47:50.000 So this is not a complete rebuke to the Trump administration as many of the headlines would suggest.

00:47:55.000 It is not them saying the executive branch no longer has the power to adjudicate.

00:47:58.000 Whether this person should be in the country or not.

00:48:01.000 It just means they have to go through the proper process in order to actually do that.

00:48:06.000 So, the next move presumably would be for the Trump administration to actually work with the Salvadoran government in order to bring this person back and then the person will go through due process and then probably will be removed anyway.

00:48:19.000 Meanwhile, the Iranian government is obviously attempting to slow play the Trump administration with regard to its nuclear negotiations.

00:48:24.000 So President Trump wants to get to the end point, which is Iran dismantling its nuclear arsenal, its incipient nuclear program.

00:48:32.000 It is pretty obvious that Iran can do this at literally any time.

00:48:34.000 So there's not much to negotiate over.

00:48:35.000 If they want to be ushered back into the community of nations and have their economy unlocked, all they have to do is get off the nuclear pathway.

00:48:43.000 Instead, what they're trying to do is slow walk the administration so as to rebuild some of their air defenses to prevent against the possibility of a joint Israeli-U.S.

00:48:51.000 strike. All that would really amount to, by the way, is the United States loaning Israel some B-2s. 0.72

00:48:55.000 The real question for a while has been whether Israel has the unique capacity to actually hit the nuclear facilities in Iran.

00:49:02.000 The problem for Israel is that unlike, for example, the Syrian attempted nuclear reactor 15 years ago or so when Israel hit the nuclear reactor that the Syrians were building.

00:49:10.000 The biggest problem For Israel is that these nuclear reactors are actually built underneath mountains.

00:49:14.000 So the best that Israel might be able to do is they block the entrances. 0.99

00:49:17.000 It's unclear whether Israel has the overt capacity on its own to simply take out the entire nuclear facility.

00:49:24.000 You need bunker buster bombs and all the rest.

00:49:26.000 Iran is trying to slow play the United States. 0.88

00:49:29.000 They're trying to slow play President Trump.

00:49:30.000 According to Axios, Iran is considering proposing during talks with the United States that the two countries work on an interim nuclear agreement before pursuing negotiations over a comprehensive deal.

00:49:40.000 President Trump set a two-month deadline for negotiations with Iran on a new nuclear deal and has ordered a pretty significant buildup of U.S. military force in the Middle East if diplomacy fails.

00:49:47.000 If a deal is not reached, Trump could order a U.S. military strike against Iran's nuclear facilities or support an Israeli strike.

00:49:53.000 The latter is obviously much more probable.

00:49:55.000 Trump has basically said so himself.

00:49:57.000 The sources said the Iranians think reaching a complex and highly technical nuclear deal in two months is unrealistic.

00:50:02.000 They want to get more time on the clock in order to avoid an escalation.

00:50:05.000 Now, again, When they say that it's unrealistic, actually it could be very realistic.

00:50:09.000 You could sign a single page deal that says full transparency to the IAEA and to international inspectors.

00:50:16.000 We're dismantling our entire nuclear program.

00:50:18.000 We are shipping all fissile material out of the country to a third party.

00:50:22.000 They could do all of that today.

00:50:24.000 That does not require a heavy negotiation in any way, shape, or form.

00:50:27.000 So all this really is them trying to buy time, pretty clearly.

00:50:31.000 An interim agreement could include suspending some of Iran's uranium enrichment activity, diluting its 60% enriched uranium stockpile, allowing UN inspectors more access to Iran's nuclear facilities, but apparently that would only slightly, even if that were done, that would only slightly decrease their time to break out,

00:50:46.000 their time to the bomb.

00:50:49.000 Also, apparently, that interim agreement would force the Trump administration to suspend his maximum pressure campaign on Iran's economy, so there's no reason for the United States to buy into that.

00:51:00.000 On Thursday, the former head of Iran's National Security Council, a person named Ali Shamkhani, who is now a foreign policy advisor to the Supreme Leader Ali Khamenei, the Mullah, said the continued military threats against Iran may lead to deterrent measures.

00:51:12.000 He suggested that Iran could actually expel IAEA inspectors and cease to cooperate at all with the nuclear watchdog.

00:51:17.000 Well, if they do that, then the bombs are coming.

00:51:20.000 President Trump is not likely to sit on his hands with regard to all of this.

00:51:25.000 Okay, meanwhile, I know it's a Friday, so we're going to do a little bit of culture.

00:51:27.000 I've been told there is a movie.

00:51:29.000 Called the Minecraft movie.

00:51:30.000 And it apparently had $300 million in global box office revenue its first weekend.

00:51:35.000 And I was forced by my producers to watch this movie.

00:51:39.000 And those are hours of my life that I wish I had back.

00:51:44.000 It is...

00:51:45.000 I must have a massive disconnect with the younger generation now.

00:51:48.000 I have now reached full-on middle age.

00:51:49.000 I no longer am able to connect with people who think this movie was funny, entertaining, or interesting.

00:51:54.000 I'm hoping that all of it is just a big in-joke that if you really love Minecraft, then you're just laughing and nodding at jokes that I don't understand because my entire exposure to Minecraft was another YouTube video that we made one time where I was forced to sit there and play Minecraft with one of our employees and basically wanted to hang myself.

00:52:10.000 I hated the game.

00:52:11.000 I thought it was stupid.

00:52:12.000 I didn't understand how it worked.

00:52:14.000 Again, me being a dad of four and all of this.

00:52:18.000 In any case, apparently for Minecraft fans, this thing is like heaven.

00:52:22.000 And there are a lot of them.

00:52:24.000 Minecraft is a very, very popular game.

00:52:26.000 And I'll give it to the producers of the movie because at least they know the crowd to whom they are appealing.

00:52:31.000 They totally went for all the in-jokes.

00:52:33.000 And apparently, as I say, I saw the same movie all these people at this theater were about to show you saw, but they reacted like crazy to a chicken jockey, which is a character, I suppose, from the game that barely...

00:52:47.000 It's a rare and quirky creature.

00:52:50.000 It's something of a digital unicorn.

00:52:51.000 It's a baby zombie riding a chicken.

00:52:54.000 It barely appears in the game.

00:52:55.000 Sort of a rarity.

00:52:56.000 And so apparently fans are very into it.

00:52:58.000 And so here's what happened at one showing when the police had to be called because people were so enthusiastic about the appearance of the baby zombie riding a chicken.

00:53:21.000 And people are losing their minds over the appearance of the chicken jockey.

00:53:25.000 People standing up, screaming, cheering.

00:53:27.000 The police had to be called to calm everybody back down.

00:53:32.000 Oh, boy.

00:53:35.000 And then the police removed people.

00:53:36.000 So, this is what our culture has become.

00:53:40.000 I have been informed by Producer's Act that there was something once called the Gentle Minions Movement, which was apparently a bunch of high schoolers and college students who, when the Despicable Me movies would come out, Or the Minions movies would come out.

00:53:51.000 They would dress up in tuxes or suits and they would go to the theater as sort of a joke.

00:53:56.000 As sort of a funny in-joke.

00:53:58.000 And apparently that has now devolved into people going to these movies and finding the dumbest parts of the movies and acting rowdy and crazy.

00:54:04.000 So, cool.

00:54:05.000 Like everything else in our culture, something that began as ironic is now no longer ironic.

00:54:10.000 It has just become people acting like trash at the theater.

00:54:13.000 The actual movie itself is quite bad.

00:54:15.000 Again, perhaps I'm just missing all of it because I don't play Minecraft, but I'll give you the outsider's perspective.

00:54:21.000 If you don't play Minecraft, this movie makes no sense at all.

00:54:24.000 It's not entertaining.

00:54:27.000 The performances are ridiculous in the extreme.

00:54:31.000 Jack Black has just been playing the same character since School of Rock, and now he has a beard, and he's pretty significantly fatter, so that's pretty much all that's happened to Jack Black right there.

00:54:40.000 Jason Momoa is always Jason Momoa, and so he's just playing fat Jason Momoa, like slightly overweight Jason Momoa.

00:54:47.000 He's basically doing a riff.

00:54:49.000 On sort of fat Thor from the Marvel Universe.

00:54:54.000 It is not good.

00:54:55.000 The plot makes no sense.

00:54:57.000 The acting is bad.

00:54:58.000 Jack Black sings a couple of songs for no reason that I can discern.

00:55:03.000 The graphics are kind of interesting, I suppose, in the sense that they mimic the game, but kind of more 3D and more well done.

00:55:11.000 But it was a painful experience.

00:55:15.000 If you're not a Minecraft fan, I would just suggest that you do not engage with this movie because you'll want to gouge out your own eyeballs fairly quickly watching this thing.

00:55:24.000 Okay, meanwhile, my producers have exposed me to a new three-part Netflix docuseries that explores the shadowy world of child influencers called The Dark Side of Kidfluencing, and this is quite frightening.

00:55:35.000 Again, none of this is shocking to me because it turns out that a huge number of people who are interested in having their kids be famous are really screwed up.

00:55:44.000 That is not a shock at all.

00:55:46.000 That's been true for generations.

00:55:47.000 The entire musical Gypsy is based on this.

00:55:50.000 But apparently, in this documentary, there is a person named Tiffany Smith who is the mother of a child named Piper Raquel who began her career at age 8 and created dance videos,

00:56:05.000 pranks, challenges, and crush content on YouTube.

00:56:08.000 And her channel amassed over 12 million subscribers and was generating at its peak $625,000 per month.

00:56:14.000 These tween influencers were known as The Squad.

00:56:17.000 And apparently the mom manager, Tiffany Smith, is, I mean, the only way to describe this would be sociopathic behavior. 1.00

00:56:24.000 Apparently, this clip, she sold her daughter's used underwear to random men on the Internet. 1.00

00:56:29.000 Yeah, guys, I think the internet was a bad idea, maybe.

00:56:31.000 Piper had acting lesson, voice lesson, one of those. 1.00

00:56:39.000 After we dropped Piper off, Tiffany was like, I have to go to the post office and drop off some things.

00:56:45.000 And she had a bag, and she pulled out what looked like Piper's underwear.

00:56:50.000 And I asked her, like, why are you, like, shipping those out?

00:56:56.000 And she told me that old men like to smell them. 0.99

00:56:58.000 And I was confused.

00:57:01.000 I was like, what is she talking about?

00:57:03.000 But I confronted Tiffany.

00:57:06.000 She's like, ugh! 0.99

00:57:08.000 Stop being so dramatic.

00:57:12.000 Yeah, well, you know, instead of just confronting people over that, you might want to call the cops.

00:57:17.000 I mean, that's child exploitation right there. 0.99

00:57:19.000 So, there's that.

00:57:22.000 Yes, there's an entire side to the internet that is fake and made up and exploitative in the extreme.

00:57:30.000 My kids do not appear in any pictures online.

00:57:32.000 We keep my kids offline.

00:57:33.000 I will not take pictures with people on the street unless my kids are not in frame.

00:57:38.000 It is very, very bad for kids to be exploited in this way, obviously.

00:57:43.000 And a culture that knows what's going on.

00:57:46.000 I mean, let's be real about this.

00:57:47.000 We've known what's going on in these spaces for probably generations.

00:57:51.000 And it's certainly been true in Hollywood for a very, very long time.

00:57:55.000 There's a reason why every child star, with very few exceptions, ends up incredibly screwed up as an adult.

00:58:00.000 And that is not because high levels of fame and exposure are good for kids, especially when they are surrounded by adults who are willing to take advantage of them.

00:58:07.000 Horrifying stuff, obviously.

00:58:08.000 Apparently, in January 2022, 11 X Squad members filed a lawsuit alleging emotional, physical, and sexual abuse, and the case was settled for $1.85 million.

00:58:16.000 Which seems kind of low, frankly, if the career earnings of these people were...

00:58:21.000 Presumably in the tens of millions of dollars.

00:58:24.000 Alrighty, folks.

00:58:24.000 The show continues in just a moment.

00:58:26.000 We're going to be answering your questions.

00:58:28.000 But again, if you want your question answered or you want to see my answers, you have to become a member.

00:58:32.000 Become a member.

00:58:33.000 Use code ShapiroCheckout for two months free on all annual plans.

The Ben Shapiro Show - April 11, 2025

SHOWDOWN: Trump Stares Down China

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