Michael Pillsbury: Skeptical about China holding up their end of the deal

Hi, Ryan Reynolds here for Mint Mobile. Are you looking for a beach read this summer? May I suggest your big wireless bill? It's got suspense, mystery, a slightly flat, emotional arc, and a shocking twist where you realize you've been overpaying the entire time. Fortunately, though, Mint's story is better. Every plan, $15 dollars a month a month. Every plan, even unlimited. That's it. Happy ending, zero tiers. Give it a try at mintmobile.com slash switch. Upbron payment of $45 for three months, $90 for $1.20 for $12-month plan required than $50 gigabytes, and slow when network is busy. See terms. Joining us now, Mike Pillsbury. Michael, we're hearing good things about a possible deal with China. What are you hearing? Well, the same thing, Brian. A key word that's being used is the framework, not an actual deal that will be signed with dollar amounts of soybeans or exactly when the next shipment of rare earth magnets will come. It's not that kind of deal. It's so-called framework as the word Scott Bessent is used several times now. That, to me, means no details are agreed to yet. It's awfully hard to get Xi Jinping. who's under threat himself from internal politics for his mistakes, to get him to come to the table, is President Trump's first big miracle, I think. The second miracle is the patience President Trump has shown. You know, he had Scott Bessent go off to Madrid, Stockholm, London, Geneva, almost every European capital for these one or two-day meetings. They didn't produce any agreement either. kept using the phrase, well, we had constructive talks. That means no deal was struck. So we're still going down to the wire in this meeting, which sometimes it takes two or three hours for even it's called the summit one-on-one, two or three hours where the two heads of state are going to go back and forth. I think they won't be bickering. I don't think it'll be an auction. I don't think Xi Jinping will say, how about 100 billion soybeans? And Trump then say, how about 200 billion soybeans? It won't be like that. But we need to see some kind of action come out of this meeting. Worst case is they cancel the trips. They've already announced. You know, Mr. Trump has said he and Melania are going to Beijing in about three months. And then he's invited Xi Jinping and his wife, Madame Pang, who's actually a general in the military, folksinger, that they're coming to Washington, D.C. So that's the good news is that if those two trips take place in the coming six months or so. We can get more concessions on trade, more jobs for Americans, and a safer Taiwan. If there's a walkout, the worst case, there's a walkout or the meeting is canceled at the last minute or they can't agree on anything at the meeting. So what I'll be watching for, Brian, is something in between, the walkout, canceling the future trips, or... Kumbaya, you know, China is going to buy 200 billion in soybeans in the next three or four years. Actually, I think they're going to start buying immediately. The word is they might have gone beyond framework in the last 24 hours. And they're really optimistic. It's going to be a major deal, including immediately buying soybeans. That's the key. If you ask these farmers, they need them sold yesterday. So you can't be like, okay, it's coming down the pike. I'll see you in a month. And we're going to send chips there. We'll get to the, we'll get to, no, no, it's got to be right away.

So, and we're not asking a favor. We got the best stuff and for the best price that have already been a proven commodity for China. And I understand, too, the rare earth deal, at least for a year, they won't touch it. But I think the U.S. made huge progress in trying to counter that checkmate that they have. And that's Malaysia signing a minerals deal. That's Thailand signing a processing deal. And that is a deal with Australia. And I think Argentina is also on the precipice, including getting some of these central and South American countries to leave the Belt and Road program like China did. So I think there might be some movement. Yeah, that's the optimistic side, Brian. I'm trying to give you both sides. In terms of soybeans, they promised very specifically last time in January 2020. And then they didn't do it. And everybody kept waiting day by day after Xi Jinping signed the deal. And he never bought additional soybeans. Nothing like what he promised to do. That's why I'm underlying the bad side for you, the downside. This kind of summit isn't necessarily scripted. You know, the topics are brought up by either side. And there's no sort of checklist. Okay, now we talk about Taiwan. Now we talk about ring magnets. That's what concerns me always is when you don't have a draft communique ready to be signed by the two leaders, which they've made clear they don't have yet. Things can go bad. So I want you to hear what did they did do. Evidently, China is really pushing Trump on Taiwan to soften his support. They want Trump to come out and say he does not support an independent Taiwan. He wants him to say Trump opposes Taiwan's independence. He said to incrementally move it forward and the next leader gets closer and closer to saying essentially do with Taiwan what you did with Hong Kong. Just go take it back. So they're really hyper focused on this. And, you know, Trump has not dug in like past presidents on Taiwan, although he says, I don't think they're going to take it, and I think he would back it. In fact, he's been critical of them to a degree, and he's right, saying, stop spending 2% on your GCP, do it 5. And they said, we will. And they say, why have you locked up all the chips? We should be sharing in that, but a free market goes to where it wants to. Your thoughts about China's focus on Taiwan, and what would that mean to them for the president to say he does not support an independent Taiwan? Well, you're right. But right now, our position has been for seven presidents. In Mandarin, we say, Biao-Jurcher. Jurcher means support. We don't support independence for Taiwan. That's the current situation. President Trump's already endorsed that in a truth social about a month and a half ago. Part of getting to these talks is he tweeted or exed, I support the one China policy.

It's a huge achievement just to get to the meeting and get a framework done. I'll be applauding and having a glass of champagne high in the air if just that much happens. And listen, I agree with everything, and no one knows China better than you. You wrote a book about it and you spend your career there. But I will say the pandemic and the election has a lot to do with China not fulfilling what they were supposed to be doing. You know, we even forgot about phase one of this trade deal because Trump lost and the pandemic came in and they did it and have not paid one dime and restitution for it. So we don't really think about phase one. So I do think that factors in to a degree. But get this. I think China. reportedly is starting to level off on their Russian oil purchases. And I got a report that they're going to make an announcement about that and the war in Ukraine. Now, look, we know they're tighter with Russia than they are with us. I get it. I'm totally, my eyes are wide open. But when it's a detriment to them on the global stage and they're looking to win us over to get access to our markets or relief on tariffs, they might be saying, you know what, guys? You know, take your foot off the gas because they did not have bad relations with Ukraine prior to the invasion. That's right. And China actually has its own Ukraine peace plan. It's kind of pro-Russian, but it's partly in between the American plan and China's own ideas. But what I'm afraid about is Trump needs to get a lot of credit if this works out. And I don't think we should be casual or overly optimistic that it's going to happen for sure because we're strong and China's weak. It could happen. I hope it does. about a huge amount of efforts going into this by President Trump in his second term. And his first term is you and I know very well, Brian. He was always fighting with Rex Tillerson or Jim Mattis or John Bolton. That's what I was just talking about. So now he's got a real team that works for him. I wish them a huge celebration if they pull this off. Right. And I think the Marco Rubio says, you know, when asked his opinion, he knows it, but he knows who the president, he'll give it. And he knows, but he's in, you know, he's very tough on China. Didn't China ban him from traveling there? I don't know if that's going to be even alleviated for this trip, even though they're going to meet in South Korea, if it ever happens. So I know he's just as tough on China, maybe as Pompeo, but he's going to say, Mr. President, what do you need me to do? And then he's going to say, if he says, Marco, what do you think? Marco will tell him. And that's what works. And that's basically what works in companies.

Marco Rubio one way over, Brian, when he held up a copy of my book on the floor of the Senate and everybody should read the 100-year marathon by Michael Pillsbury. So you can't be more of a fan than I am of Marco Rubio. But I think you're right. He knows who's the boss is, and he's put aside some of his really harsh anti-communist views in order to follow this Trump strategy of the two couples exchanging state visits in the coming year. That's the success that I'm really looking for because more concessions can come out of China, Brian, once they get past this obstacle and start looking for even more details. And frankly, I think President Trump wants China to help the American growth rate. Remember bringing back our jobs, expanding the markets in China under pressure for our companies. This is part of President Trump's dream that he wrote in a book 15 years ago very clearly. But he also said in that book, The Chinese are the world's best negotiators. He says, I decided not to invest in China because there's such good negotiators. I couldn't make any profit out of it. So Trump's got a kind of a positive view of the negotiating skills of the Chinese side. That's why I say it would be a miracle that he pulls off. But by the way, whether he believes it or not, it's a great thing to say. for a country that prides itself on its pride. Hey, you guys are great. You know, you're going to get over on me. I'm a little wary about going in here. It's a great play. You know, so Michael Pillsbury, I should have booked you on Friday. That's what I should have done to finally analyze the aftermath of the meeting. But thanks. It's always great to have you on. Thanks, Michael. Thanks, brilliant.