China’s ‘trump’ card, tariff brinkmanship, Epstein fallout, and more: Your questions, answered

Before I swap my keyboard for a Nantucket clam rake next month, I’m handing the column over to you. Thanks to everyone who lobbed in smart, snarky, and occasionally apocalyptic questions – too many for one edition. Below is the first batch (questions lightly edited for clarity), spanning chip wars, tariff poker, Taiwan’s future, Epstein drama, AI doom, and my apparently tragic brow. Keep ‘em coming.

Why is Trump suddenly giving away the chip store to China?

Because he overplayed his hand, the Chinese called his bluff, and he didn’t have the cards. Trump billed himself as the tough guy on China. During his first term, he pioneered containment policies that went on to become bipartisan consensus. Coming into office this time around, he put on what amounted to a trade embargo on China, expecting the Chinese would fold under the economic pressure and he’d get to bring home a big beautiful deal. That, of course, didn’t happen. Instead, the Chinese pushed back hard, responding not just with their own reciprocal tariffs but – most importantly – with restrictions on the export of critical minerals and rare earths.

As it turns out, that was the big kahuna, because the United States is hopelessly dependent on China for minerals vital to the production of a broad range of modern military systems and advanced tech goods, from computers, phones, and EV batteries to Patriot missiles and fighter jets. After decades of Western offshoring and underinvestment, the Chinese have come to dominate every link in the supply chain for rare earths and key minerals, from mining and extraction to processing and market infrastructure. Though the Chinese are global market-makers, until recently, they didn’t have an effective licensing regime to shut down this chokehold on demand. But they’ve rapidly put one together (mimicking the US semiconductor export control regime), giving Beijing a powerful lever they can weaponize against the Americans for years to come.

This is easily as big a vulnerability for the US as Europe’s decision to outsource so much of its energy to Russia (before Russia's invasion of Ukraine made the security problems too obvious to avoid any longer). Trump has vowed to “win the mineral war,” but weaning the US off Chinese value chains will take a matter of years (5+ for heavy rare earths). Which means Trump had to cave to get near-term access to key minerals. So on July 15, he reversed prior export controls on Nvidia H20 chips and chip design software, in keeping with the quid pro quo reportedly agreed to by the two sides in London. It amounts to unilateral disarmament, as advanced chips are the biggest constraint on China’s ability to compete with America on AI. Meanwhile, the Chinese haven’t formally eased mineral restrictions, and actually put new export controls on EV battery technologies the same day Trump announced the easing of the chip controls. The simple fact is that the Chinese had the cards and the Americans didn’t.

How important is the timing of the upcoming midterms in pressuring Trump to reach a negotiated agreement with China?

Not at all, honestly. It’s much more about concerns over the direct downsides of a head-on fight, given China's unique retaliatory ability, willingness to inflict damage on the US economy, and the potential for an escalatory spiral to cause market panic. Plus, Trump really does prefer deals to confrontation when possible.

Do you envision any scenario(s) where an invasion of Taiwan does not occur in the next 10-20 years? What can the United States do to preserve the status quo?

Sure. In fact, that’s China’s present strategy for unification: to gain control over Taiwan through mounting but incremental economic, political, and grey-zone military coercion short of all-out invasion. This plan assumes that the US-China military balance of power in the Asia Pacific will continue to shift in China’s favor, that US security commitments to Taiwan will eventually waver, and that a Taiwan left to its own devices is more likely to submit to peaceful unification. It follows that if the US wants to keep Taiwan independent, it needs to invest in upgrading and adapting both American and Taiwanese defense capabilities to erode Chinese military advantages and bolster the credibility of the US commitment to the island’s defense.

Will Trump chicken out on the tariffs he threatened to impose by August 1?

He’ll follow through on some, but not all, of the threatened hikes. Some deals are getting done (most notable this week: Japan and the Philippines); negotiating holdouts, smaller countries with no leverage and market salience, and political targets such as Brazil and South Africa will face tariff increases, while key trading partners who are playing ball in talks like Mexico, Canada, and the EU will probably see no change in their rates as negotiations continue. But all bets are off if talks with some of the latter eventually break down (or if Trump feels emboldened or needs a political distraction). The higher the overall increase (but especially on large countries such as the EU and Canada), the worse the retaliation and the market backlash, and the likelier the White House is forced to walk back the hikes quickly (as it did in April in the face of the bond market reaction to the Liberation Day tariffs). Either way, much higher tariffs on the largest US trading partners won’t last long, which is why markets are so complacent right now.

Do you think Europeans are right to be patient with the US administration in trade negotiations or should they take a "firmer grip," as some EU members have suggested?

European officials I talk to increasingly view the 30% tariff threat as a negotiating tactic, and I agree. The EU has leverage, and they’ve been preparing retaliatory measures ahead of the August 1 deadline. The approach they’ve taken thus far seems to be moving talks along. Ultimately, I think the EU ends up accepting a higher tariff baseline (than 10%) with quotas and exemptions for key European industries. This lets them avoid having to hit back strongly (most importantly, with penalties on US services exports) in a way that would lead to an escalatory spiral and a lose-lose trade war with the US.

What’s behind Trump’s 180 on Russia/Ukraine?

Well, it’s finally sunk in that ending the war isn’t as easy as he thought – and that the Ukrainians aren’t principally to blame for it (if only someone had told him sooner!). Since his infamous Oval Office dress-down, Ukrainian President Volodymyr Zelensky has worked hard to get on Trump’s good side, accepting a two-month ceasefire with no preconditions and signing a critical minerals deal that gives the Americans some stake in Ukraine’s long-term future. Meanwhile, Russian President Vladimir Putin has flattered Trump but rebuffed every chance to negotiate an end to the fighting, despite Trump’s best efforts to appease him. Trump recently recounted how after telling Melania about a “wonderful” conversation he’d had with Putin, his wife replied, “Oh really? Another [Ukrainian] city was just hit.” It’s not what MAGA voted for, but there’s nothing Trump hates more than being made to look like a powerless fool.

Can Trump still get a ceasefire in Ukraine this year?

I have a hard time seeing the war ending in 2025, for three reasons. First, Putin won’t drop his hardline terms for a ceasefire anytime soon. He continues to believe he can use military pressure to force Ukraine into making concessions and win a war that is existential for him. Second, while fragile, Ukraine’s battlefield position won’t be catastrophic enough in 2025 that Zelensky will have to agree to Russia’s terms or else Ukraine will collapse. Despite manpower shortages, a ramp-up in Western aid and domestic drone production can keep the Ukrainian military supplied. Third, growing Western economic pressure on Russia won’t be enough to bring Putin to the table in 2025. Specifically, Trump’s threat of secondary sanctions and 100% tariffs against Russia’s trading partners in 50 days (might as well be 50 years in Trump time) is not credible while he’s also trying to stabilize relations with China and close a trade deal with India. Accordingly, the Russian offensive in eastern Ukraine, the drone and missile attacks against Ukrainian cities, and Ukrainian targeting of military and defense industry sites in Russia will all continue.

Why is the Epstein issue causing such a rift inside MAGA? Will it last?

Because it's the one issue Trump ran on that he's not in any way embracing. Some of the base is also unhappy about the Iran bombings and the Ukraine pivot, but at least Trump really did try to end wars and keep the US out of them (even when he’s failed). But he's not draining the swamp. He's not trying to undo America’s two-tiered legal and justice system. He's leaning into them. And he’s now condemning his “past supporters” for falling for the Epstein “hoax” and not moving on, when he’s the one who taught them never to trust the government. The gaslighting makes the most powerful US president in modern history look incredibly insecure and vulnerable. I guess you either fight the deep state or live long enough to see yourself become it …

I don’t expect the issue to go away soon. Trump's natural instinct is to deny and punch back, like he’s doing with his $10 billion lawsuit against The Wall Street Journal. But while that strategy can unite the MAGA faithful against their common enemies (mainstream media, Democrats, etc.), it’ll also keep the rare 10/90 losing issue for Trump alive and risk the release of even more damaging information. The smarter play would be to try to change the subject altogether by giving the base other red meat to focus on – like Director of National Intelligence Tulsi Gabbard’s referring to President Obama and other former officials falsely perpetuating the “Russia hoax.” Expect more such “counterstrikes” meant to wag the dog and distract from Epstein.

With the freight train of AI coming fast, does America need to shift toward prioritizing training people for trades over putting them through four-year college degrees?

We need to focus more on trades but also on social/interpersonal, organizational, and management skills, whose premium will rise over time. Colleges will remain useful for networking but, increasingly, not for the education they provide. Not because AI will render all the knowledge and skills we currently learn in school unnecessary, but because we will be able to get the same (if not a better) education from AI far cheaper and more efficiently, no matter who or where we are.

And the social contract will have to change meaningfully. Even with reskilling, many humans won't have productive work available. How will they satisfy their material needs? And perhaps as importantly, how will they satisfy their psychological needs? Universal basic income may be expensive at current fiscal constraints (though if AI leads to 10% GDP growth it’s a different story) but it’s straightforward enough on a conceptual and technical level. Universal basic self-actualization? Not so much.

Are we moving further away from, or closer to, a geopolitical depression?

For now, we are moving closer to it, and we haven't yet hit rock bottom. The United States is unwilling to adhere to the rules of the order it once created, policed, and has long benefitted from, and other countries aren't stepping up to fill the gap. The resulting leadership vacuum is the G-Zero world I’ve been warning about for over a decade – and Eurasia Group’s top risk for 2025 – featuring ever greater geopolitical instability, disruption, and conflict. As the Italian political theorist Antonio Gramsci wrote, “The old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” Until the old institutions are reformed or destroyed and new ones are created to reflect the underlying balance of global power, the symptoms will worsen.

Why do you always have that face of anguish?

You mean the furrowed brow? I get that from TV people (and people who see me on TV) all the time, which surprises me because I’m not a particularly distraught person. It’s probably because I’m usually talking about serious stuff. Thankfully, the face goes away quickly after I go off camera. Sadly, the serious stuff does not.

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