Trump Battles Against an Economy of His Making

Radio Atlantic

The episode examines the high-stakes diplomatic week surrounding the United Nations General Assembly, focusing on the meeting between President

Key takeaways

• President Trump has rolled back export controls on advanced semiconductors, allowing China access to NVIDIA's H200 chips.
• Tech leaders including Elon Musk, Sam Altman of OpenAI, and Dario Amodei of Anthropic are increasingly calling for AI regulation due to safety risks.

Main topics

• U.S.-China Trade Relations
• Artificial Intelligence Regulation

Notable quotes

Whoever wins AI wins.

Conclusion

The episode highlights how domestic economic vulnerabilities in both s

Transcript preview

Speaker 3 (0:00) If Donald Trump's main way to negotiate is by threatening economic coercion, China now knows he doesn't have much to use. Speaker 4 (0:14) This is Radio Atlantic. I'm Adam Harris, and it's a big week in international politics. World leaders are meeting in New York for the United Nations General Assembly, and Chinese President Xi Jinping is coming to Washington for the first time in over a decade, at a moment when China is central to the global conversation around AI. President Trump continues to favor speed over caution to ensure the U.S. can remain ahead on artificial intelligence. But not everyone, including the CEOs leading AI companies, are so sure. The U.S. and China's relationship has been cold to lukewarm since the president returned to office. The nation's reached a shaky trade truce last year following Trump's terror fallout, and other countries have turned to China for trade deals amid the turmoil inflicted by his administration's policies. Meanwhile, in the U.S., Americans are feeling the pain of Trump's economic plans and a war that is driving up the price of everyday items from gas to groceries. What will all of the meetings this week lead to, if anything? With me to discuss all of this are my colleagues, Atlantic staff writers Vivian Salama and Roger Karma. Let's get to questions. Vivian, Roger, thank you so much for joining me today. Speaker 2 (1:33) Great to be here. Speaker 4 (1:34) Great to be here, Adam. Vivian, I want to start with you to sort of frame this a little bit for us. What is at stake during this week's meetings between Xi and Trump? Speaker 2 (1:45) I mean, the two countries have so much at stake because they basically thrive in this ecosystem in which they are codependent and yet trying to cooperate with each other at the same time, codependent economically on each other, trying to compete with each other and trying to and trying to kind of maintain their status as these two global superpowers. a lot of these interests face headwinds. So they're coming in a very strange moment geopolitically, both for President Trump and for President Xi, apart from the fact that they've had this up and down dispute rolling for the last year and a half over trade and tariffs and in particular competition about advanced semiconductors and artificial intelligence and just this race for rare earth minerals. They're both also squeezed economically. economically at home. President Trump obviously has the Iran war very heavy on his mind these days, and he has been frustrated with countries like China and Russia, who are believed to still be propping up the Iranian regime and helping them to sustain the attacks that the U.S. has launched with Israel, but also the economic impact that has come from this war, where It's basically sent shockwaves across the world and particularly for oil markets that have struggled. You know, that's something that also impacts China as well. Inflationary pressures in both countries have been really problematic. And so they're coming to the table with this understanding and the sense that they both really need to do something to help them domestically, first of all, while also sustaining their ability to kind of do the things that they do. around the world and do so in a way where they're competing with each other. It's a very strange dynamic, but one that President Trump has consistently said is a priority for him, and he wants that relationship to thrive. Speaker 4 (3:43) I guess, how has the president's posture changed, kind of, even from that first Trump term, right? It seems that there was... You know, kind of coming into this term, there was the outright kind of hostility with the with the tariffs. And it sort of changed into a well, we can we can work together. We have this this this sort of working relationship. How has the president's position on China changed since that first term? Speaker 2 (4:08) Yeah, well, I mean, he recognizes that. picking a fight with China is not advantageous to the United States, although he has insisted that tariffs, for example, help American businesses, help American producers. He has said that farmers are sort of insulated. He's denied the sort of economic impact of those tariffs that so many economists around the world say are the cause for driving inflationary pressures up and prices up here in the United States. And so he has completely dismissed that. It is the one of the core elements of his economic agenda. But what we've seen is that, you know, on top of the Iran war and the pressures that are happening because oil prices have gone up and inflation is going up, and on top of some of the other economic conditions that we see here, the president is really in a bind. And he recognizes that picking a fight with China would only probably exacerbate that. His news advisors continuously tell him that, you know, picking a fight with China just... does not present the ultimate advantages that you're seeking. And especially remind our listeners and viewers, we're in an election period right now where Republicans, especially those running for the House, for House seats, are up against a wall right now because of a lot of these issues. And so politically, it's not advantageous to... to pick a fight with China right now. And instead to try to find ways where, yes, we can compete, but ultimately we need each other in order to survive and thrive in this day and age. And so they are trying to kind of approach the relationship with China with a very open eye, a wide-eyed recognition of that, that they just can't shut the door to China. It's not even realistic. Speaker 4 (5:54) You know, Roger, one of the things I think we've learned over the last decade or so is that the president doesn't always listen to his advisers when they're telling him not to not to pick fights. And thinking about the the news over the last several weeks, right, that the panic about AI that's been coming out from the tech CEOs themselves who are talking about slowing down the pace of development to align and to allow for regulation to land in that time. The president, for his part, isn't necessarily buying it, right? He's said to reporters recently, We're Speaker 1 (6:29) leading China in AI. We're the most sophisticated country in the world. And frankly, I want to keep it that way because whoever wins AI wins. Speaker 4 (6:37) Roger, do you buy this argument from the president that this sort of push to disregard the tech CEO's warnings is about China? Speaker 3 (6:49) I don't fully buy it. So I think it's important to place this meeting in context. I do think the AI race is going to be the central issue in this meeting. You already are seeing reports of Treasury Secretary Scott Besant meeting with his Chinese counterpart and discussing the idea of, for example, an AI warning system. I think this issue is going to be central. And as you alluded