The Week of Uno Reverse Cards

Or How I Learned to Stop Worrying about AI Chips and Love Globalization with Chinese Characteristics

Friends,

I’m old enough to remember that there were weeks, if not entire months, when very few things seemed happen, and policies of the U.S. Government generally remained constant.

I miss those times.

I’ll start with the issue that I’m sure everyone has heard about, the President’s complete reversal on the so-called “Epstein File,” an issue that the President and his followers used shamelessly during the campaign to paint the Establishment as corrupt and a cabal of child abusers.

For years, the President and his lieutenants amplified the (conspiracy) theory that Jeffrey Epstein was at the center of a cabal of elites who ran the world and committed horrendous crimes against children. This wasn’t difficult to do because Epstein DID commit horrendous sex trafficking crimes against young women, he was connected to the world’s rich and powerful (including President Trump himself), and he died under suspicious circumstances just before the details of his crimes, and his connections to elites, would have been revealed in a criminal trial.

Looking at the details of the whole Epstein affair, it is hard to dismiss that something strange happened.

[NOTE: There are a lot more details that I wasn’t tracking until I fell into numerous internet rabbit holes this week… I wouldn’t recommend following me there, it makes you question your sanity.]

During the campaign, the President’s supporters, including the Vice President and his Director and Deputy Director of the FBI, promised to the release of the file containing all the details which would finally uncover the crimes of these elites and bring about a millennialist reckoning (essentially confirming and fulfilling the worldview of the QAnon cult).

Over the past six months, the Attorney General hyped the Epstein File, promising to release the details and saying that there were thousands of hours of video.

But then last week, the President starting playing his reverse cards.

Apparently the “Epstein File” either doesn’t exist… or it was built by Democrats as a hoax (wait, what?!?)… or it is boring, and folks should just forget about it.

Nothing to see here, move along, move along.

One could almost see President Trump try to turn on his RDF (reality distortion field) to deflect questions from the press about the “Epstein File” during a Cabinet meeting.

This generated not just a WTF, but a collective WTAF?!?

Cue the Memes… including this one, which as the youngsters would say, was low-key:

It appears that President Trump was genuinely surprised that his most loyal followers did not fall for this gaslighting.

Instead, they questioned his reversal along with his incoherent (and contradictory) explanations.

Within hours, Trump lashed out in a rambling Truth Social post, calling his followers stupid, and asserted that he doesn’t need their support anymore because they are being tricked by Democrats into making a big deal about the “Epstein File” (this was a remarkably brazen attempt at gaslighting).

By Tuesday, the President’s nemesis in the House, Kentucky Republican Thomas Massie, was mounting an effort to force a vote in Congress on releasing the “Epstein File.” And during a podcast, Speaker Mike Johnson said it that the President should release the file.

I don’t know about you, but turning on his most loyal followers by saying the “Epstein File” is a hoax and then having those followers turn on the President, was NOT on my 2025 Bingo Card.

***

Speaking of not being on my 2025 Bingo Card, President Trump also conducted a reversal in AI chip policy this week… granting Beijing a huge win even as the CCP refuses to budge on his demands.

Going back to his first term, Trump championed the idea of denying the most advanced technology to the PRC. He directed his Administration to tighten rules on advanced chips, and his policy was adopted and improved upon by the Biden Administration (much to the dismay of the U.S. semiconductor industry, who like lemmings, rushed head-long into selling themselves to Beijing and bringing about their own demise).

President Trump saw the leaders of multinational corporations, who advocated for these unfettered sales to the PRC, as globalist fools who needlessly surrendered American technological superiority to the PRC for the mirage of market access with bad deals that further undermined America’s competitive position. He saw through the self-interested arguments that selling these advanced technologies would somehow result in achieving the dream of globalization.

All this changed on Monday when President Trump met with Jensen Huang, Nvidia’s CEO, just before Jensen left for a trip to Beijing and Shanghai where he spent days praising PRC leaders, their tech industry, and expressing hope that he would get to sell even more advanced chips there.

Apparently, Jensen achieved what countless CEOs, financiers, and economists have failed to do: convince President Trump that globalization is great for America.

Under this new policy logic, the United States should enable multinational companies, like Nvidia and AMD, to sell their Artificial Intelligence semiconductors to the PRC so that Chinese companies become “addicted” to American technology (as if that approach has never been tried before… eye roll). This new logic also demonizes export controls as “harming” American competitiveness because it opens the door for Chinese companies to undercut U.S. multinationals (never mind that we have a quarter century of experience that the PRC is even more effective at undermining U.S. multinationals when there are lack export controls).

Of course, Nvidia is already the most valuable company ever, so these restrictions on sales to the PRC hasn’t “harmed” the company at all.

[NOTE: Remember back during the Bush Administration when folks thought that a company like Exxon Mobile had too much political power and that with its influence it was able to manipulate the U.S. Government into pursuing really stupid policies like invading Iraq… well Exxon’s valuation is less than one eighth that of Nvidia]

What is left unsaid by the President and his advisors is that by removing the restrictions and allowing these multinationals to provide these advanced AI chips to the PRC, the U.S. Government is essentially hamstringing its own AI industry so that the world’s most valuable company can expand its’ sales in the near term and make its products even more expensive.

There is a serious supply constraint on advanced AI chips, and by selling them to the PRC, it means that U.S. and other allied AI companies will get fewer chips themselves. We are guaranteeing that PRC AI companies can compete on a level playing field with our own.

To steelman their arguments, the advocates of this policy reversal say that Huawei is quickly making a chip that could be sold at lower cost with about 80% of the capability. Many companies in the PRC and across the Global South will adopt this cheaper/less capable chip and eventually challenge Nvidia for market share by building lock-in. They argue that by lifting the restrictions on sales of their more expensive and more capable chips, they can prevent Huawei from gaining this foothold.

I think that is a fantasy… the PRC will pocket this concession, buy the advanced chips from Nvidia and AMD, thus boosting their AI industry and simultaneously provide even more support to their indigenous chip industry to ensure that Nvidia and AMD are eventually replaced. This policy shift will NOT result in a long-term competitive advantage; it will create a short-term boost to the valuation of Nvidia and AMD and enable the PRC to catch up even faster in the field of artificial intelligence.

There are some alternative approaches which don’t require caving to PRC demands over access to semiconductors.

First, the U.S. could leave the restrictions in place and Nvidia could reduce the price of their chips to ensure that the rest of the world, aside from the PRC, adopts American hardware and software. But that approach would undermine the short-term and medium-term valuation of Nvidia (analysts would adjust downward the projected profits of Nvidia’s future sales, if their chips cost less).

Another approach, that could be pursued simultaneously, would be to aggressively restrict Huawei’s access to EDA software, semiconductor manufacturing tools, and the spare parts and service contracts for the machines they have now.

We should have been doing this over the past five years, but we largely took our eye off the ball and allowed Huawei to build out a huge semiconductor manufacturing ecosystem inside the PRC (built largely on the arguments of companies that make semiconductor tools and software that they would lose out on market share and profits if they didn’t sell to Huawei… the same argument Jensen Huang and his lobbyists are making now).

The U.S. Government could also employ financial sanctions against Huawei, a company that is standing trial for multiple felonies including racketeering which the Justice Department brought during the first Trump Administration. If Washington were to block Huawei out of the dollar denominated financial system, it would be nearly impossible for the company to challenge Nvidia or AMD in the rest of the world (and nearly impossible for the company to provide chips inside the PRC). This is an approach that folks in the Treasury Department have pushed back on, but if the threat to U.S. technological competitiveness is as great as Jensen says, then we should consider this option of kneecapping Huawei AND maintaining the restrictions on chip sales to the PRC… as opposed to capitulating and hoping the CCP loses interest in building a domestic champion to rival Nvidia

Unfortunately, the officials who would have formulated these alternative policy options have been sidelined or fired over the past five months. The folks who are left are advocates for the classic globalization approach to technology competition. They trot out the same tired arguments for “technology addiction” and get all their data from the companies that stand to gain the most in the short-term from this reversal.

By outsourcing U.S. national security and technological competitiveness to Jensen Huang and gutting the capabilities to evaluate and implement policies inside the U.S. Government, the President has fallen into the same trap that he spent so many years criticizing his predecessors about. It is a mind-boggling turn-about, though unfortunately, not all that surprising.

As if to make the point that this reversal in AI chip policy represents a U.S. capitulation, Beijing greeted their good fortune by a series of actions that proves the adage that the Chinese Communist Party treats weakness with even more aggression and coercion:

• Beijing announced a further tightening of its own export controls on EV battery technology (suggesting that the PRC sees export controls as complimentary, instead of contrary, to their technology competition efforts).

• Beijing signaled that the Panama port deal would be blocked.

• Beijing imposed an “exit ban” on a Wells Fargo banker with this woman essentially being held hostage by the CCP to coerce the American bank.

Thanks for reading!

Matt

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MUST READ

1. Nvidia Says U.S. Has Lifted Restrictions on A.I. Chip Sales to China
   Tripp Mickle, New York Times, July 14, 2025

The Silicon Valley chip giant said the Trump administration, which had shut down its sales to China three months ago, had assured it that licenses for the sales would now be granted.

Three months after shutting down Nvidia’s artificial intelligence chip sales to China, the Trump administration has reversed course.

On Monday, the Silicon Valley company said in a blog post that the U.S. government had approved sales of a China-specific A.I. chip known as the H20. Nvidia will still need licensing approval from the U.S. government to fulfill those orders, but the Trump administration “has assured Nvidia that licenses will be granted,” the company said.

The decision came after Jensen Huang, Nvidia’s chief executive, met last Thursday with President Trump. Mr. Huang has spent months lobbying politicians across Washington to keep China open for A.I. chip sales. China has the potential to deliver billions of dollars in sales for the world’s most valuable public company, which last week became the first to reach a $4 trillion valuation.

Mr. Huang has also visited China several times this year, including a trip to Beijing this week where he is scheduled to give a news conference on Wednesday. He told reporters in China on Tuesday that Nvidia would also begin selling a chip for China called the RTX PRO GPU that is based on its latest Blackwell technology.

COMMENT – I understand how this decision helps Nvidia… but it escapes me how this actually helps the rest of the United States. American AI companies will now have to compete against Chinese AI companies that have access to the kinds of chips that gave American companies a technological advantage.

By providing the PRC with these chips, it will make Chinese industries in a variety of sectors more competitive, and it undermines the entire rationale for re-industrializing the United States. One of the cornerstones for building new manufacturing in the United States was the argument that doing so in the U.S. would give manufacturers unique access to the most advanced AI technology… now we are just giving that technological advantage to the PRC so that Nvidia can marginally grow its sales numbers.

2. Nvidia, AMD to Resume AI Chip Sales to China in US Reversal
   Mackenzie Hawkins, Bloomberg, July 15, 2025

Nvidia Corp. and Advanced Micro Devices Inc. plan to resume sales of some AI chips in China after securing Washington’s assurances that such shipments would get approved, a dramatic reversal from the Trump administration’s earlier stance on measures designed to limit Beijing’s AI ambitions.

US government officials told Nvidia they would green-light export licenses for its H20 artificial intelligence accelerator, the company said in a blog post on Monday — a move that may add billions to Nvidia’s revenue this year, restoring its ability to fulfill orders it had written off as lost due to government restrictions. Nvidia designed the less-advanced H20 chip to comply with earlier China trade curbs from Washington, which Trump’s team tightened in April to block H20 sales to the Asian country without a US permit.

AMD received similar assurances from the US Commerce Department and plans to restart shipments of its MI308 chips to China once licenses for sales are approved, the company said in a statement Tuesday. Shares of AMD jumped as much as 8.5% after markets opened in New York while Nvidia rose as much as 5%.

Chief Executive Officer Jensen Huang — who met with President Donald Trump last week and is currently in Beijing attending a government-sponsored conference — appeared on Chinese state broadcaster CCTV shortly after Nvidia announced the decision, saying the company had secured approval to begin shipping. The Commerce Department, which oversees US export controls on chips and the tools used to make them, did not immediately respond to a request for comment on whether the agency has already issued any H20 licenses.

3. Nvidia’s Huang Says China’s Military Unlikely to Use US AI Chips
   Ian King, Bloomberg, July 13, 2025

Nvidia Corp. Chief Executive Officer Jensen Huang said the US government doesn’t need to be concerned that the Chinese military will use his company’s products to improve their capabilities.

Addressing the largest concern Washington has cited in placing increasing restrictions on US technology exports to the Asian nation, Huang said the Chinese military will avoid using US technology because of the risks associated with doing so.

“We don’t have to worry about it,” he said in an interview on CNN’s Fareed Zakaria GPS broadcast Sunday.

“They simply can’t rely on it,” he added. “It could be, of course, limited at any time.”

Huang and his peers have lost out on billions of dollars of revenue under increasingly tough rules designed to shut off China from access to the most powerful artificial intelligence capabilities. Successive administrations in Washington have maintained that unfettered use of the most capable components would pose a risk to national security.

Nvidia’s CEO, who was in Washington last week before a trip to Beijing, has argued that the strategy will fail because it will spur growth of domestic capabilities in China that will eventually rival those created by the US technology industry. Nvidia and its peers say US companies should be allowed to ship to the world’s largest market for semiconductors to keep their products central to the development of AI.

Huang met with President Donald Trump last week to make his case again and has praised the administration’s push to increase domestic production of semiconductors. Nvidia and others are dependent on the manufacturing facilities of Taiwan Semiconductor Manufacturing Co., the majority of which are located on its home island, just off the Chinese mainland.

Trump touted the success of Nvidia and its growth to become the first US company to reach a $4 trillion market capitalization. Details of a White House meeting between the two weren’t made public but so far the administration and politicians on both sides have remained firm on not allowing more access for Chinese companies.

COMMENT – Jensen Huang isn’t dumb or naïve… but asserting that the PLA won’t use Nvidia chips because the risk is too high that the U.S. might impose restrictions again, is both dumb and naïve.

Beijing just witnessed Jensen spend months lobbying the Trump Admin to cancel these restrictions, PRC officials are incredibly confident that Jensen will continue to lobby on their behalf no matter what the Chinese Communist Party does. It would be one thing if Nvidia had an aggressive ‘know your customer” program in place and advocated for technological chip tracking, but Nvidia is willfully ignorant of what the PLA does or how it uses domestic Chinese companies to launder its activities.

To add to this problem, the Trump Administration is busy dismantling the offices and processes that would determine if the PLA is using these chips.

I think Jensen and the Chinese feel equally confident that PLA use of Nvidia chips will not be discovered with sufficient evidence to reimpose chip restrictions.

4. Trump AI Czar David Sacks Defends Reversal of China Chip Curbs

   Brunella Tipismana Urbano and Edward Ludlow, Bloomberg, July 15, 2025

White House AI adviser David Sacks defended the Trump administration’s decision to allow Nvidia Corp. and Advanced Micro Devices Inc. to resume sales of some artificial intelligence chips to China, reversing export curbs imposed by the US earlier this year.

In an interview Tuesday, Sacks said that allowing Nvidia to restart shipments of its H20 chips would position the US to compete more effectively abroad and blunt efforts by Chinese tech giant Huawei Technologies Co. to gain a bigger slice of the global market.

“We are not selling the latest and greatest chips to China, but we can deprive Huawei of having this giant market share in China that they can then use to scale up and compete globally,” Sacks said on Bloomberg Television. “The policy is nuanced and it makes a lot of sense.”

The move is seen as a win for Nvidia’s Chief Executive Officer Jensen Huang, who met last week with President Donald Trump after spending months arguing for a letup in US restrictions on sales to Chinese customers. “Jensen has been making the case publicly for competing in China and there are a lot of merits to the argument,” Sacks said.

Revived sales of the H20 promise to restore billions in revenue for Nvidia this year, according to the company. The H20 was originally designed to comply with export controls imposed under the Biden administration, but in April, the Trump administration tightened those rules to block sales to China of the H20 and AMD’s MI308 chip without a license.

The tighter curbs prompted Nvidia to announce a $4.5 billion writedown on H20 chip inventory in its fiscal first quarter and warn of an additional potential loss of $8 billion in sales. AMD said it would take an $800 million charge for its second quarter of 2025.

Sacks pushed back on criticism that allowing H20 sales to China poses a security risk, calling the H20 “a deprecated chip.” He warned that other countries are choosing between US and Chinese technology. “If you don’t let these countries buy American tech, you’re pushing them into China’s arms,” he said.

Photo of David Sacks, the White Artificial Intelligence and Crypto Czar who has demonized national security professionals that warn against the dismantlement of export controls for the purpose of benefiting 1-2 companies.

COMMENT – The policy is NOT nuanced, it’s a sellout to classic arguments about globalization.

The Nvidia H20 is perhaps the best chip for inference, a process that PRC firms have real problems with, so it is disingenuous to say, as both David Sacks and Commerce Secretary Luttnick have, that the H20 is a “deprecated chip” or that it is the “4^th best chip.”

5. How Nvidia’s Jensen Huang Persuaded Trump to Sell A.I. Chips to China

   Tripp Mickle, New York Times, July 17, 2025

With help from a longtime Silicon Valley investor turned White House insider, Mr. Huang got the administration to reverse course on restrictions.

In April, Jensen Huang, the chief executive of the chip maker Nvidia, received a blunt welcome to the world of geopolitics when the Trump administration shut down sales of an artificial intelligence chip the company had designed specifically for China.

Since then, Mr. Huang has turned himself into a globe-trotting negotiator as he has tried to persuade President Trump to reverse course. He has traveled with Mr. Trump, testified before Congress and charmed reporters in Washington. And he has courted allies in White House who have quietly supported global business interests despite Mr. Trump’s tough talk on trade with China.

That work has started to pay off for Nvidia. Last week, Mr. Huang met with Mr. Trump in the Oval Office and pressed his case for restarting sales of his specialized chips, said two people familiar with the meeting, who spoke on the condition of anonymity. He argued that American chips should be the global standard and that the United States was making a grave mistake by ceding the giant Chinese market to homegrown rivals.

Within days, Nvidia said the administration was changing course. It was a remarkable reversal that punctuated Mr. Huang’s arrival as the tech industry’s leading geopolitical player. It also underscored Nvidia’s quick rise from little-known Silicon Valley chip maker to the most valuable public company in the world as well as the linchpin to the tech industry’s A.I. boom.

Just last week, Nvidia, which controls more than 90 percent of the market for chips needed to build A.I. systems, became the first public company worth more than $4 trillion. Since then, it has raced past that milestone thanks largely to its return to China.

Mr. Huang “makes the same argument, even where it is unpopular, because he believes deep in his bones that winning developer mind-share in China and depriving Huawei of a monopoly market is the best way for the American A.I. to win around the world,” said Brad Gerstner, the founder of Altimeter Capital Management, a major Nvidia investor.

A White House spokesman, Kush Desai, said Mr. Trump’s “America First policies” had led to trillions of dollars in investments in U.S. manufacturing and technology, which “will create thousands of quality jobs and safeguard our country’s national and economic security.”

“Everything the president does is aimed at protecting America and American workers,” Mr. Desai added.

6. Nvidia CEO Jensen Huang wants to sell more advanced chips to China after H20 ban is lifted

   Arjun Kharpal and Evelyn Cheng, CNBC, July 16, 2025

Nvidia is looking to ship more advanced chips to China than its current generation, CEO Jensen Huang said on Wednesday, as he looks to revitalize sales in the world’s second-largest economy.

The comments come after Nvidia said on Monday that it will resume sales of its H20 artificial intelligence chip to China, reversing a previous ban. The H20 is a less-advanced semiconductor designed for AI workloads that comply with U.S. export restrictions to China.

“I hope to get more advanced chips into China than the H20,” Huang said during a press conference in Beijing, China, in response to a CNBC question.

“And the reason for that is because technology is always moving on ... today Hopper’s terrific but some years from now we will have more and more and better and better technology, and I think it’s sensible that whatever we’re allowed to sell in China will continue to get better and better over time as well,” he said referencing Hopper, Nvidia’s chip architecture that the H20 is built on.

COMMENT – The logical outcome of David Sacks’ approach is the complete dismantling of U.S. export controls on Nvidia’s AI chips, giving the PRC the most advanced hardware to build their own AI models which will displace the models from the United States and other countries.

This is how we lose the AI race.

7. Don’t Surrender China’s AI Market

   Aaron Ginn, Wall Street Journal, July 16, 2025

America’s best strategy for keeping our semiconductor lead: Get our rivals to buy from us.

Why did Jensen Huang go to China? The Nvidia CEO wants to make American tech platforms the global artificial-intelligence standard by gaining market share and engaging other countries with U.S.-developed computing infrastructure. That means doing business in the largest AI market outside the U.S.

Some in Washington seem confused by this. Sens. Elizabeth Warren (D., Mass.) and Jim Banks (R., Ind.) sent a letter in May asking Mr. Huang to explain why his company would “choose to enrich an authoritarian country’s innovation ecosystem.” They’re at it again, chiding him in another letter last week for meeting with Chinese business executives. It’s the second time these senators have questioned the patriotism of one of America’s most important CEOs. The objections reveal a deep misunderstanding of how America wins: not through fear and withdrawal, but through strength and engagement.

Mr. Huang’s strategy aligns with President Trump’s: Engage with all, compete everywhere, and avoid abandoning markets out of ideological fear. Mr. Trump hasn’t isolated. He has negotiated more with foreign countries than any modern president and built leverage for U.S. manufacturing. President Biden, in contrast, presided over a shrinking American share of the AI and semiconductor markets in China, offering moral lectures with little follow-through.

If Nvidia were violating export controls or handing over sensitive intellectual property, that would be a problem. But that isn’t happening. The company established a compliance center in China to ensure that its operations follow U.S. regulations, even shutting down chip sales after a recent ruling by the Bureau of Industry and Security. Nvidia could face billions of dollars in losses as it navigates a shifting legal landscape.

What critics don’t understand is that selling Nvidia chips to China doesn’t “enrich” China’s ecosystem. It locks China into ours.

Owning Nvidia hardware isn’t the same as creating a proprietary AI ecosystem, just as buying a PlayStation doesn’t make you Sony. China can buy the “console,” but the true value lies in the platform—its software, developer community and tools. That’s Nvidia’s enterprise suite and its parallel computing platform, CUDA. Nvidia’s strength is its hardware-software combo, like the Apple of semiconductors. When Chinese AI developers code on U.S. graphics processing units, they strengthen American software dominance, building on our system, not Huawei’s.

If we exclude Chinese firms from Nvidia, we won’t slow their progress. In fact, we might accelerate it. The reason other global customers consider Huawei’s AI infrastructure a suitable alternative is that we previously surrendered the largest AI developer market to the Chinese company based on faulty assumptions, not lack of demand. Export restrictions and mistrust in U.S. trade policies initially created Huawei’s early-adopter market. Its GPU division is expanding and is expected to ship millions of units within a year. The best way to erase our lead is to force our competitors to develop viable alternatives.

Here’s the best strategy for America to keep its lead: Get your rivals to buy from you, not your competitors.

America should endorse Nvidia’s globally linked approach. It boosts revenue, expands American jobs, reinforces our software leadership, and slows competitors’ growth. This isn’t about “enriching” adversaries; it’s about making them rely on us. China used this strategy against us with low-cost manufacturing over the past three decades. Now it’s our turn to reciprocate with semiconductors.

Mr. Trump’s approach involves strategic engagement with a mix of rewards and pressure. He uses tariffs when needed but always keeps negotiations active, closing deals rather than lecturing. In contrast, Mr. Biden’s more isolationist stance ended up pushing countries and customers toward China. The Chinese are ready. Their large language models are advancing, their chip industry is growing, and Huawei is stepping in to fill the gaps we’ve left.

Technological leadership is about leverage and adoption. Nvidia is playing to win, and a victory for them is a victory for America. It’s setting the global standard while keeping the largest AI market in the world tethered to American technology.

When senators try to make headlines by questioning a CEO’s patriotism, they undermine American economic leadership. America’s strength comes from open markets, free enterprise, and platform dominance, making us the default choice at scale.

Retreating equates to losing; competing leads to winning. Messrs. Huang and Trump realize this. Let America compete, and we will win.

Mr. Ginn is CEO and a co-founder of Hydra Host, a venture-backed AI data-center services and management company.

COMMENT – Where have we seen this argument before?

I’m pretty sure that this was Elon Musk’s argument for why Tesla should pursue the China market in 2019. That effort didn’t make Chinese citizens “addicted” to Teslas; it helped build the Chinese EV industry into something that has eclipsed Tesla.

U.S. companies in the clean energy sector also believed this argument as they sought to manufacture and sell their solar panels and wind turbines in the PRC. For the most part, those companies went bankrupt and were replaced by their Chinese competitors. Now the world is almost entirely dependent on a clean energy industry dominated by Beijing and used to coerce countries.

This is also the argument that telecom equipment manufacturers like Motorola and Nortel made back in the late 1990s. They believed that selling their equipment to the PRC would make China addicted to U.S. technology. That effort resulted in the creation of Huawei and the bankruptcy of Motorola and Nortel.

These arguments by Jensen Huang, David Sacks, and Aaron Ginn (along with all the other paid advocates of selling advanced AI chips to the PRC) have a long and sad history of not working out the way the champions of these arguments think they will. They all claimed that “competing leads to winning” and that if they were denied entry into the China market, America would be worse off.

What these folks will say when confronted by these examples is: hey, our industry is super special and shouldn’t be compared to those examples. They essentially say, we are smarter than the people in those other failed industries. But of course, those folks also thought their industries were super special and that they were smarter than everyone else.

We’ve seen this movie before, and we know how it will end.

It’s like watching a bunch of teenagers in a horror movie, they hear a noise in the basement, and they have a choice. They can either leave the house, or they can go down the steps and investigate the noise. No matter how loudly we shout at the screen, the teenagers go down the steps and that is when the axe murderer gets them.

As for this statement by Ginn:

“When senators try to make headlines by questioning a CEO’s patriotism, they undermine American economic leadership. America’s strength comes from open markets, free enterprise, and platform dominance, making us the default choice at scale.”

Wrong.

It is entirely appropriate for senators to question the patriotism of multinational companies and their corporate leaders BECAUSE those folks have a miserable track record of safeguarding national security (just look at the revelations this week that Microsoft outsourced DoD network operations to the PRC to save a few bucks… “A Little-Known Microsoft Program Could Expose the Defense Department to Chinese Hackers” (ProPublica, July 15, 2025)… you just can’t make this stuff up, it is so egregious).

The leaders of these companies are NOT evaluated on whether their business decisions positively or negatively affect the national security of the United States, it is simply not a part of their calculus. These leaders do not possess the expertise to make these judgments, and their shareholders don’t hold them accountable for it.

Our national security would be on a much firmer footing had senators spent the last 25 years questioning the patriotism of leaders like Tim Cook (Apple), Jeff Immelt (General Electric), Christopher Galvin (Motorola), Jim McNerney (Boeing), and Paul Otellini (Intel Corporation) BEFORE they dove headlong into the PRC. American multinational companies that have made themselves dependent on the Chinese Communist regime have done more to undermine America’s strength than nearly anything else.

Essentially, Ginn argues that we should just trust someone like Jensen because he has our best interests at heart even though he is unaccountable if things go wrong as they have done countless times before.

8. Nvidia CEO Lavishes Praise on China in Beijing, Drawing Rock-Star Reception
   Peter Landers, Wall Street Journal, July 16, 2025

Jensen Huang, head of $4 trillion chip maker, says Trump won’t mind his meetings in Beijing.

The head of America’s most valuable company delivered a love letter to China while visiting Beijing, extolling the country’s technological advances and praising its “best-in-the-world” electric vehicles.

Jensen Huang, chief executive of artificial-intelligence chip designer Nvidia, spoke a day after the Trump administration allowed the company to resume selling one of its advanced AI chips to Chinese customers.

The decision, part of a trade truce in which China agreed to speed up exports of rare-earth minerals, opens the door for Nvidia to step up its business in China again despite criticism from some in Congress that giving expanded access to advanced U.S. technology could benefit Beijing’s military and pose a national-security risk for America.

Huang rejected such views at a news conference, which he interrupted from time to time so he could autograph Chinese reporters’ clothing. “There’s always room in any house for two people, don’t you think?” he said.

The CEO said he was hoping to get approval to keep updating Nvidia’s offerings for the Chinese market. He expressed confidence that his meetings with top officials in Beijing, including the vice premier, wouldn’t bother President Trump.

When he visited Trump last week, Huang said, the president “was delighted to help celebrate a monumental day for Nvidia”—it became the first company to top $4 trillion in market capitalization—and “was telling everybody about that.” The CEO said he advised Trump that he was heading to Beijing and the president responded, “Have a great trip.”

From X(Twitter)

COMMENT - It is obvious Jensen knows this, but he is Taiwanese, not Chinese.

He grew up Taipei and Tainan, Taiwan, then spent a few years with his family in Thailand. At age 9, Jensen moved to the United States with his brother to live with an uncle. Jensen is a dual citizen in the United States and Taiwan… not the PRC.

9. China Puts New Restrictions on E.V. Battery Manufacturing Technology
   Keith Bradsher, New York Times, July 15, 2025

Beijing will now require government licenses for any effort to transfer abroad the technologies crucial for producing inexpensive electric cars.

COMMENT – Under the logic of Jensen Huang, David Sacks, and their supporters, Beijing shouldn’t do this because they risk not getting countries “addicted” to Chinese technology.

10. China Threatens to Block Panama Ports Deal Unless Its Shipping Giant Is Part of It

    Costas Paris and Jack Pitcher, Wall Street Journal, July 17, 2025

Beijing pushes for state-owned Cosco to become shareholder of two Panama Canal ports, dozens of others in BlackRock deal.

China’s government is threatening to block a deal that would transfer ownership of dozens of seaports to Western investors if Cosco, China’s largest shipping company, doesn’t get a stake.

The proposed sale includes two ports at the Panama Canal and more than 40 others around the world, all owned by Hong Kong-based CK Hutchison.

China is pushing for state-owned Cosco to be an equal partner and shareholder of the ports with BlackRock and Mediterranean Shipping Co., a containership operator, according to people familiar with the deal talks. BlackRock and MSC in March reached a preliminary agreement to buy the ports in a deal valued at nearly $23 billion.

Now, BlackRock, MSC and Hutchison all are open to Cosco’s taking a stake, the people familiar with the talks said.

The parties aren’t likely to reach a deal before a previously agreed upon July 27 end date for exclusive talks between BlackRock, MSC and Hutchison, the people familiar with the talks said. The parties can’t strike a deal that includes Cosco until the exclusivity period ends.

COMMENT – President Trump seems to have declared victory on this issue, but there are reports that U.S. Navy ships are still being charged excessive fees to use the Panama Canal, that a PRC SOE is still constructing a bridge over the canal, and that Beijing won’t let the sale go through.

11. U.S.-Based Wells Fargo Banker Blocked from Leaving China

    Chun Han Wong and Rebecca Feng, Wall Street Journal, July 18, 2025

Chinese authorities have placed an exit ban on a China-born executive after she entered the country recently.

A U.S.-based Wells Fargo banker who works in trade financing has been blocked from leaving China after traveling there recently, people familiar with the matter said.

Chenyue Mao, a Shanghai-born and Atlanta-based managing director at Wells Fargo, was subjected to an exit ban after she entered China sometime in recent weeks, according to the people. An automated reply from her corporate email account said she was traveling internationally on business.

The reason for her travel to China couldn’t be determined.

Mao attended an industry conference in Brazil in late June, according to a news release from the event. It couldn’t be determined precisely when Mao entered China, or what prompted the travel restriction. Wells Fargo has suspended all travel to China following Mao’s exit ban, the people said.

In a statement, Wells Fargo said it is “closely tracking this situation and working through the appropriate channels so our employee can return to the United States as soon as possible.”

Mao is a longtime specialist in international factoring, a process of exporters in one country selling unpaid invoices to third parties, who then collect payments later from importers in another country. She has worked and interacted with Chinese companies and industry groups on trade financing and international factoring matters, according to disclosures from these entities. She sometimes traveled to China for business, a person familiar with the matter said.

COMMENT – It sounds like Beijing isn’t afraid that Washington will retaliate.

12. A Little-Known Microsoft Program Could Expose the Defense Department to Chinese Hackers
    Renee Dudley, Propublica, July 15, 2025

Microsoft is using engineers in China to help maintain the Defense Department’s computer systems — with minimal supervision by U.S. personnel — leaving some of the nation’s most sensitive data vulnerable to hacking from its leading cyber adversary, a ProPublica investigation has found.

The arrangement, which was critical to Microsoft winning the federal government’s cloud computing business a decade ago, relies on U.S. citizens with security clearances to oversee the work and serve as a barrier against espionage and sabotage.

But these workers, known as “digital escorts,” often lack the technical expertise to police foreign engineers with far more advanced skills, ProPublica found. Some are former military personnel with little coding experience who are paid barely more than minimum wage for the work.

“We’re trusting that what they’re doing isn’t malicious, but we really can’t tell,” said one current escort who agreed to speak on condition of anonymity, fearing professional repercussions.

The system has been in place for nearly a decade, though its existence is being reported publicly here for the first time.

Microsoft told ProPublica that it has disclosed details about the escort model to the federal government. But former government officials said in interviews that they had never heard of digital escorts. The program appears to be so low-profile that even the Defense Department’s IT agency had difficulty finding someone familiar with it. “Literally no one seems to know anything about this, so I don’t know where to go from here,” said Deven King, spokesperson for the Defense Information Systems Agency.

National security and cybersecurity experts contacted by ProPublica were also surprised to learn that such an arrangement was in place, especially at a time when the U.S. intelligence community and leading members of Congress and the Trump administration view China’s digital prowess as a top threat to the country.

COMMENT - How does this even pass the common sense test inside a company like Microsoft… it does suggest that companies have little capability to judge whether or not something constitutes a national security vulnerability.

13. Justice Department Announces Arrest of Prolific Chinese State-Sponsored Contract Hacker
    Office of Public Affairs, U.S. Department of Justice, July 8, 2025

China’s Ministry of State Security Directed the Theft of COVID-19 Research and the Exploitation of Microsoft Exchange Server Vulnerabilities, Known Publicly as the Indiscriminate ‘HAFNIUM’ Intrusion Campaign.

The Justice Department announced today that Xu Zewei, 33, of the People’s Republic of China was arrested on July 3 in Italy at the request of the United States. Xu and his co-defendant, PRC national Zhang Yu, 44, are charged in a nine-count indictment, unsealed today in the Southern District of Texas, for their involvement in computer intrusions between February 2020 and June 2021, including the indiscriminate HAFNIUM computer intrusion campaign that compromised thousands of computers worldwide, including in the United States. Xu was arrested in Milan, Italy, and will face extradition proceedings.

According to court documents, officers of the PRC’s Ministry of State Security’s (MSS) Shanghai State Security Bureau (SSSB) directed Xu to conduct this hacking. The MSS and SSSB are PRC intelligence services responsible for PRC’s domestic counterintelligence, non-military foreign intelligence, and aspects of the PRC’s political and domestic security. When conducting the computer intrusions, Xu worked for a company named Shanghai Powerock Network Co. Ltd. (Powerock). Powerock was one of many “enabling” companies in the PRC that conducted hacking for the PRC government.

“This arrest underscores the United States’ patient and tireless commitment to pursuing hackers who seek to steal information belonging to U.S. companies and universities,” said John A. Eisenberg, Assistant Attorney General for the National Security Division. “The Justice Department will find you and hold you accountable for threatening our cybersecurity and harming our people and institutions.”

“The indictment alleges that Xu was hacking and stealing crucial COVID-19 research at the behest of the Chinese government while that same government was simultaneously withholding information about the virus and its origins,” said Nicholas Ganjei, U.S. Attorney for the Southern District of Texas. “The Southern District of Texas has been waiting years to bring Xu to justice and that day is nearly at hand. As this case shows, even if it takes years, we will track hackers down and make them answer for their crimes. The United States does not forget.”

“In February 2020, as the world entered a pandemic, Xu Zewei and other cyber actors working on behalf of the Chinese Communist Party (CCP) targeted American universities to steal groundbreaking COVID-19 research. The following year, these same actors, operating as a group publicly known as HAFNIUM, exploited zero-day vulnerabilities in U.S. systems to steal additional research,” said Assistant Director Brett Leatherman of FBI’s Cyber Division. “Through HAFNIUM, the CCP targeted over 60,000 U.S. entities, successfully victimizing more than 12,700 in order to steal sensitive information. This arrest, carried out with our Italian law enforcement partners, demonstrates the FBI’s relentless commitment to holding CCP-sponsored hackers accountable for their crimes.”

According to court documents, in early 2020, Xu and his co-conspirators hacked and otherwise targeted U.S.-based universities, immunologists, and virologists conducting research into COVID‑19 vaccines, treatment, and testing. Xu and others reported their activities to officers in the SSSB who were supervising and directing the hacking activities. For example, on or about Feb. 19, 2020, Xu provided an SSSB officer with confirmation that he had compromised the network of a research university located in the Southern District of Texas. On or about Feb. 22, 2020, the SSSB officer directed Xu to target and access specific email accounts (mailboxes) belonging to virologists and immunologists engaged in COVID-19 research for the university. Xu later confirmed for the SSSB officer that he acquired the contents of the researchers’ mailboxes.

Beginning in late 2020, Xu and his co-conspirators exploited certain vulnerabilities in Microsoft Exchange Server, a widely-used Microsoft product for sending, receiving, and storing email messages. Their exploitation of Microsoft Exchange Server was at the forefront of a massive campaign targeting thousands of computers worldwide and known publicly as “HAFNIUM.” In March 2021, Microsoft publicly disclosed the intrusion campaign by state-sponsored hackers operating out of China. Throughout March 2021, Microsoft and other industry partners released detection tools, patches, and other information to assist victim entities in identifying and mitigating this cyber incident. Additionally, the FBI and the Cybersecurity and Infrastructure Security Agency released a Joint Advisory on Compromise of Microsoft Exchange Server on March 10, 2021. However, by the end of March 2021, hundreds of web shells remained on certain U.S.-based computers running Microsoft Exchange Server software. In April 2021, the Justice Department announced a court-authorized operation to remediate hundreds of computers in the United States made vulnerable by HAFNIUM actors. In July 2021, the United States and foreign partners attributed the HAFNIUM campaign to the PRC’s MSS.

Among the victims of Xu’s exploitation of Microsoft Exchange Server were another university located in the Southern District of Texas and a law firm with offices worldwide, including in Washington, D.C. After exploiting computers running Microsoft Exchange Server, Xu and his co-conspirators installed web shells on them to enable their remote administration. These web shells were specific to HAFNIUM actors at the time. As with the earlier COVID-19 research intrusions, Xu and Zhang worked together on the HAFNIUM intrusions, under the supervision and direction of SSSB officers. For example, on or about Jan. 30, 2021, Xu confirmed to Zhang that he had compromised the other university’s network. Later, on or about Feb. 28, 2021, Xu updated a SSSB officer on his successful intrusions. This SSSB officer then directed Xu to obtain a list of other, successful intrusions from a second SSSB officer. Unauthorized access to the law firm’s network allowed Xu and his co-conspirators to steal information from mailboxes and search them for information regarding specific U.S. policy makers and government agencies. Their search terms included “Chinese sources,” “MSS,” and “HongKong.”

The announcement of charges against Xu is the latest describing the PRC’s use of an extensive network of private companies and contractors in China to hack and steal information in a manner that obscured the PRC government’s involvement. Operating from their safe haven and motivated by profit, this network of private companies and contractors in China cast a wide net to identify vulnerable computers, exploit those computers, and then identify information that it could sell directly or indirectly to the PRC government. This largely indiscriminate approach results in more victims in the United States and elsewhere, more systems worldwide left vulnerable to future exploitation by third parties, and more stolen information, often of no interest to the PRC government and, therefore, sold to other third parties.

COMMENT – Expect to see retaliation and perhaps some hostage taking of Italians by the CCP to make this go away.

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Authoritarianism

14. Chinese University Expels Woman for ‘Improper Contact’ With a Foreigner
    Vivian Wang, New York Times, July 14, 2025

15. Assessing China’s “National Model” Social Credit System
    Stanford SCCEI, July 15, 2025

INSIGHTS

• A 2019 “national model” social credit system scores people in a city of 1 million using 389 rules — 124 reward “good” behavior and 265 punish “bad” behavior.

• 66% of offenses (and 83% of the most severe offenses) already fall under established laws and regulations. Others expand local government authority into moral and social domains beyond the law.

• The system also allows local authorities to act more flexibly than the law, adapting the scoring system to shifting priorities like zero COVID policies or other campaigns.

• The system rewards and surveils government employees more intensely than ordinary citizens, reflecting the state’s effort to discipline both the public and its own agents.

• The system’s scoring gives urban residents and government staff greater access to rewards, while rural residents face more penalties and fewer reward opportunities.

16. Beneath China's resilient economy, a life of pay cuts and side hustles
    Reuters, July 16, 2025

Chinese state firm employee Zhang Jinming makes up for a 24% cut to his salary by delivering food for three hours every night after work and on weekends - and hopes he can avoid awkward encounters with colleagues.

"Being a part-time delivery person while working for a state-owned enterprise isn't exactly considered respectable," said Zhang, whose real estate firm pays him 4,200 yuan ($585) per month, down from 5,500 yuan.

While China has supported economic growth by keeping its ports and factories humming, the lack of real demand has hit profits, in turn squeezing workers like Zhang through wage cuts and forcing them to moonlight.

"There's just no other way," added the 30-year-old, who rides his scooter until 11.30 pm, making 60-70 yuan per evening. "The pay cut has put me under huge pressure. Many colleagues have resigned and I took over their workload."

China's economy posted robust 5.2% growth in the second quarter, showing its export-heavy model has so far withstood U.S. tariffs. But beneath the headline resilience, cracks are widening.

Contract and bill payment delays are rising, including among export champions like the autos and electronics industries and at utilities, whose owners, indebted local governments, have to run a tight shop while shoring up tariff-hit factories.

Ferocious competition for a slice of external demand, hit by global trade tensions, is crimping industrial profits, fuelling factory-gate deflation even as export volumes climb. Workers bear the brunt of companies cutting costs.

Falling profits and wages shrank tax revenues, pressuring state employers like Zhang's to cut costs as well. In pockets of the financial system, non-performing loans are surging as authorities push banks to lend more.

For the most part, the lopsided nature of growth in the world's second-largest economy is a product of policies that favour exporters over consumers.

COMMENT – This doesn’t seem sustainable.

18. The Chinese president’s concept of power was forged by the suffering of his revolutionary father, Xi Zhongxun.
    Katie Stallard, New Statesman, July 14, 2025

19. Hong Kong police arrest 4 men linked to a Taiwan-based group and accuse them of subversion
    Kanis Leung, ABC News, July 10, 2025

20. China Tightens Export Rules to Protect Its Lead in Lithium Battery Tech
    Lu Yutong and Han Wei, Caixin Global, July 15, 2025

21. MofCom restricts battery cathode, gallium extraction tech exports

    Trivium China, July 16, 2025

22. What does Beijing’s declared interest in Ukraine mean for UK-PRC relations?
    Grace Theodoulou, Observing China, July 16, 2025

23. CCP Influence In U.S, Pro-Palestinian Activism
    Jennifer Baker, Program on Extremism at George Washington University, July 10, 2025

24. China Adds Export Controls to Protect EV Battery Technology
    Yoko Kubota and Yang Jie, Wall Street Journal, July 15, 2025

25. Fearing collapse, Taiwan pulls billions from China's crumbling economy
    Tribune India, July 16, 2025

26. How national security permeates Hong Kong bureaucracy, 5 years after law enacted
    James Lee, Hong Kong Free Press, June 29, 2025

27. China Convicts Employee of Japanese Drugmaker of Spying
    Austin Ramzy, Wall Street Journal, July 16, 2025

28. Chinese stocks go down at night because no one trusts anyone: study
    Bryce Elder, Financial Times, July 15, 2025

29. China is growing with subsidies, debt and at the expense of the world
    China Business Spotlight, July 16, 2025

30. Hong Kong’s security net extends beyond arrests as small businesses pressured
    Kanis Leung, AP News, June 30, 2025

31. Project Sleeping Giant: Inside the Chinese Mercantile Machine Linking Beijing’s Underground Banks and the Sinaloa Cartel
    Sam Cooper, The Bureau, July 2, 2025

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Environmental Harms

32. Indian Ocean Nations Grapple with Illegal Chinese Fishing Trawlers

    ADF, July 15, 2025

The nature of the crime means the actual amount of money lost to illegal, unreported and unregulated (IUU) fishing in the Indian Ocean Region (IOR) is likely far higher. Many IUU fishing vessels in the region are from China, which commands the world’s largest distant-water fishing fleet and is the world’s worst illegal fishing offender.

Beijing’s fleet has expanded its activities in the Indian Ocean Region — and they are not limited to fishing. China has a well-documented practice of using its fishing fleet as a maritime militia. Its vessels double as military auxiliaries trained by the People’s Liberation Army Navy.

“These fishing boats potentially serve as China’s frontline assets for grey-zone operations in the IOR, equipped with sophisticated surveillance equipment like subsea lasers and cameras, and some also carrying military grade equipment,” analysts Ajay Kumar and Charukeshi Bhatt wrote for the Carnegie Endowment for International Peace.

The vessels operate under military command and are tasked with gathering data that can support the operations of underwater military assets.

“The presence of these vessels in the IOR, combined with China’s access to key ports across the Indian Ocean, secured through economic agreements with littoral states, can strengthen its strategic hold over this vital maritime route,” Kumar and Bhatt wrote.

33. US senators lambast IUU fishing and abuse in foreign fleets during hearing

    Nathan Strout, Seafood Source, June 18, 2025

U.S. senators used a subcommittee hearing to heavily criticize illegal, unregulated, and unreported (IUU) fishing practices – an activity they claimed reduces revenue for America’s seafood sector and poses a direct national security threat to the country.

“It is estimated that IUU fishing accounts for up to 20 percent of the global catch, which translates to global losses between USD 10 billion and USD 50 billion [EUR 8.7 billion to EUR 43.4 billion] annually for fishing fleets that actually fish legally like ours in America,” U.S. Senator Dan Sullivan (R-Alaska) said in the recent Senate Subcommittee on Coast Guard, Maritime, and Fisheries hearing.

Sullivan has been a frequent critic of Russia's and China’s distant-water fishing fleets, pushing hard for the U.S. to ban or severely limit seafood imports from either country. Sullivan collaborated with former U.S. President Joe Biden to close a loophole that allowed Russian seafood processed in China to be imported to the U.S. and, earlier this year, pressured Trump nominee Howard Lutnick, who now leads the U.S. Department of Commerce, to “promote American ‘freedom fish,’ Alaska ‘freedom fish,’ and [not] allow communist fish from Russia and China coming into our markets.”

During the 12 June hearing, Sullivan again lambasted China’s distant-water fishing fleet.

“Of course, the Chinese Communist Party in China plays a significant role in this problem in the global fishing industry and is the worst offender of IUU fishing by far, no surprise. The Chinese government has provided billions of dollars in subsidies to its distant-water fishing fleets, gray fleets as we sometimes call them, enabling their fishing sector to grow exponentially,” Sullivan said. “According to Global Fishing Watch, China operates approximately 57,000 fishing vessels, which accounts for 44 percent of the world's total fishing activity, operating in tandem with the Chinese military to protect its fishing fleet.”

COMMENT – Blocking the import of seafood from violators of IUU fishing sounds like a pretty reasonable action.

34. In Myanmar, a rush for rare earth metals is causing a regional environmental disaster

    Michael Sullivan, NPR, July 12, 2025

The Wat Tha Ton Temple sits high above the tourist town of Tha Ton, with a magnificent view of the Kok River valley to the south and an equally impressive view of the river winding its way out of the mountains of Myanmar from the north. Prasert Guytuan, a local school worker, says people here first started noticing a problem with the river about two years ago, when a mine just across the border in Myanmar started production and the water got a little murky and itchy. But it wasn't too bad, he says, until this February, when the water didn't clear as it normally would during the dry season.

"In the past, the river was central to village life. When it cleared, people would come down to bathe in it and use it for cleaning and other things. But after people started getting skin rashes, we realized it was unsafe, and people started avoiding it," Prasert says.

That's when the Department of Pollution Control started testing the water, and found arsenic levels nearly four times the World Health Organization (WHO) limits, and unsafe levels of other hazardous metals, in a river that flows some 150 miles through Thailand's Chiang Rai province before emptying into Southeast Asia's biggest and longest river, the Mekong — where unsafe levels of arsenic were also detected earlier this month. Pianporn Deetes is the regional campaign director for the NGO International Rivers.

"It's not safe anymore. And this is the water source that people are using for irrigation, for farming, for fishing and for their cultural activities," Pianporn says.

Pianporn and other activists blame unregulated gold and rare earth mining in Myanmar's neighboring Shan state for the transborder pollution. Rare earth minerals are critical components for manufacturing in planes, electric vehicles, smartphones, even military aircraft. The vast majority of their production is controlled by China, and the world's insatiable appetite for rare earths has led to a boom in unregulated mining in neighboring Myanmar. And it's not just the Kok River that's been affected.

35. Low-cost Myanmar rare earths feed China as border mines pollute Thailand

    The Nation Thailand, July 16, 2025

Myanmar's border regions have become a key source of low-cost rare earth minerals, such as terbium and dysprosium, for China.

Unregulated mining in Myanmar, particularly the "ore leaching" technique, causes chemical runoff and heavy metal contamination in rivers that flow into northern Thailand.

This cross-border pollution has created a health and environmental crisis in Thailand's Chiang Rai province, contaminating the Kok and Sai rivers with arsenic.

The cost of mining rare earths in Myanmar is seven times cheaper than in China, which has tightened its own environmental regulations and shifted polluting activities abroad.

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Foreign Interference and Coercion

36. Chinese hackers suspected in breach of powerful DC law firm
    Annie Grayer and Sean Lyngaas, CNN, July 11, 2025

Suspected Chinese hackers have broken into the email accounts of attorneys and advisers at a powerful Washington, DC, law firm in an apparent intelligence-gathering operation, the firm, Wiley Rein, told clients this week in a memo reviewed by CNN.

The hackers responsible have been known to target information related to trade, Taiwan and US government agencies involved in setting tariffs and reviewing foreign investment, said the notice from the firm.

“We believe, based on the evidence reviewed to date, that a group that may be affiliated with the Chinese government accessed messages in the Microsoft 365 accounts of certain Wiley personnel for intelligence gathering purposes,” the memo said.

The breach comes after the Trump administration escalated America’s trade war with China this spring by slapping unprecedented tariffs on Chinese exports to the United States. The tit-for-tat tariffs set off a scramble in both governments to understand each other’s positions.

With clients that span the Fortune 500 and a team of top trade attorneys, Wiley Rein is a powerful player in helping US companies and the government navigate the trade war with China. The firm describes itself as “wired into Washington” and says it provides “unmatched insights into the evolving priorities of agencies, regulators, and lawmakers.”

COMMENT – I suspect that the Chinese Communists didn’t try hard to keep this secret… they wanted U.S. companies to know that if they work with law firms to help the U.S. Government in any way that Beijing will find out and punish them in the future. Letting this go public is a form of deterrence and enables coercion.

37. China is still coercing Australia—with implicit threats
    Justin Bassi, Australian Strategic Policy Institute, July 15, 2025

38. Australia’s Anthony Albanese walks US-China tightrope in Xi Jinping meeting
    Joe Leahy and Nic Fildes, Financial Times, July 15, 2025

39. The Philippines Is a Petri Dish for Chinese Disinformation
    Nick Aspinwall, Foreign Policy, July 14, 2025

40. China Gets More Airtime Around the World as Voice of America Signs Off
    Aruna Viswanatha, Alexandra Wexler and Clarence Leong, Wall Street Journal, July 13, 2025

Chinese state media has expanded its reach from Indonesia to Nigeria after Trump’s March order to dismantle U.S. government-funded outlets.

For years, one of Indonesia’s most popular news channels hosted a weekly segment for the country’s Chinese diaspora that often featured reports in Mandarin from both the U.S.-government backed Voice of America and China’s state-run television.

Now, since the Trump administration moved to dismantle most of the U.S. Agency for Global Media in March, only the reports from Chinese state media show up.

In his second term, Donald Trump has blown up decades of U.S. foreign-policy efforts, eliminating billions of dollars of foreign aid and influence programs, saying the money was being misused and would be better spent elsewhere. Trump’s March executive order called for the $900 million media agency, which not only funds VOA but also other media outlets, including Radio Free Asia, to do only the things it was legally required to do.

The official overseeing its retrenchment, Kari Lake, accused the agency at a hearing last month of being incompetent, politically biased and itself a national-security threat. Most of the staff has been either fired or put on administrative leave and has filed lawsuits alleging the shutdown of programming was illegal.

In its wake, China’s perspective on global events has begun to dominate broadcasts around the world. In Thailand, for example, VOA’s regular appearances on the state-owned MCOT broadcaster went to a Chinese media outlet.

COMMENT – Dismantling the U.S. Agency for Global Media and defunding Voice of America, Radio Free Asia, and others is just shortsighted, vindictive, and stupid.

41. US-funded Radio Free Asia halts Cantonese service in face of Trump’s funding cuts
    Hans Tse, Hong Kong Free Press, June 30, 2025

42. Silencing RFA Uyghur Echoes Past Mistakes
    Omer Kanat, The Diplomat, July 8, 2025

43. The Price of Retreat: America Cedes Global Leadership to China
    Senate Foreign Relations Committee, July 14, 2025

President Trump’s sweeping and non-strategic cuts to core pillars of U.S. global strength and influence include:

• Waging a global trade war against allies and partners, which isn’t just driving economic chaos and higher costs at home, but is also making it more difficult for allies to increase defense spending, negatively impacting the U.S. defense industrial base and forcing some partners to reconsider closer economic ties to Beijing;

• Gutting USAID, including haphazardly cutting the workforce needed for effective foreign assistance programming;

• Attempting to shutter the U.S. Agency for Global Media (USAGM) and its affiliated networks, including Radio Free Asia, even as China expands the global reach of its propaganda;

• Dismantling key counter-disinformation functions at the State Department, which support the U.S. as well as allies and partners in detecting and responding to disinformation spread by adversaries;

• Pausing and potentially eliminating Millennium Challenge Corporation (MCC) projects around the world;

• Freezing Countering PRC Influence Fund (CPIF) and Countering Strategic Competitors (CSC) programming;

• Harming our ability to attract international talent to study and innovate in the United States by defunding U.S. government programs for basic scientific research, attacking international students and top U.S. academic institutions and eliminating U.S.-led people-to-people programs;

• Proposing to eliminate nearly all U.S. contributions to key international bodies like the United Nations, and suggesting that the United States will withdraw from these bodies in the near future; and

• Proposing to close U.S. diplomatic posts in regions where U.S.-China competition is acute.

Key recommendations in the report:

• Rebuild America’s Foreign Assistance and Development Capacity: Congress and the Administration must work to immediately restore humanitarian, food security and global health programs, many of which have been gutted in recent months, to reestablish U.S. presence, soft power and influence.

• Require a National Intelligence Estimate on U.S. Foreign Assistance Cuts: The Intelligence Community should conduct a National Intelligence Estimate that examines the impact that U.S. foreign assistance terminations have had on U.S. national security interests, including how China has taken advantage of these terminations.

• Rebuild Counter Disinformation Capabilities and Support Independent Media: Rebuild tools to expose and counter foreign disinformation from our adversaries, which are expanding the global reach of their propaganda, and maintain robust U.S. support for global independent media.

• Restore U.S. Leadership in Multilateral Bodies: Maintain U.S. contributions to the United Nations and UN peacekeeping efforts, expand American personnel in key international organizations and codify a strategic multilateral staffing initiative within the State Department.

• Strengthen Trade and Industrial Base Resilience: Reject the Administration’s reckless tariff policies that damage our economy as well as U.S. alliances and defense supply chains; mandate an analysis by the Department of Defense of tariff impacts from the Department of Defense or RAND Corporation.

• Secure Critical Mineral Supply Chains in Coordination with Allies and Partners: Reinstate and expand USAID, U.S. International Development Finance Corporation (DFC) and MCC projects that support alternative supply chains to markets dominated by China.

• Protect the U.S. Diplomatic Footprint: Enact legislation strengthening congressional oversight of U.S. diplomatic post closures to ensure that downsizing our footprint does not put the United States at a disadvantage vis-a-vis China.

• Maintain Robust Support for the Millennium Challenge Corporation: Protect and fully fund MCC programs that serve as a critical, transparent counterweight to China’s Belt and Road Initiative.

• Invest in Global Talent and People-to-People Exchanges: Provide robust funding for and modernize U.S.-led international educational and cultural exchanges such as Fulbright and the International Visiting Leadership Program, which the Trump administration is attempting to dismantle, even as Beijing expands its own programs.

• Fortify the Australia-United Kingdom-United States (AUKUS) Partnership: Maintain and strengthen the AUKUS partnership in order to enhance deterrence in the Indo-Pacific and deepen defense collaboration with our allies Australia and the United Kingdom.

• Ensure U.S. Diplomatic Workforce Stability: Enhance Congressional oversight of executive branch reductions in force, which have arbitrarily weakened America’s diplomatic corps during a time of rising global competition.

COMMENT – I find a LOT to agree with in this report by Senate Democrats on the Senate Foreign Relations Committee. We are not approaching this rivalry with the Chinese Communists in a sufficiently serious way.

But I would challenge Senate Democrats (and Republicans) to address our fundamental problem: the federal government is spending more than it is bringing in, which is not sustainable as interest payments on our debt exceed our spending on defense. Domestic costs for healthcare, infrastructure building, interest payments are going up AND we are simultaneously trying to maintain or lower the tax burden on American citizens.

Governments can do three things:

• Decrease spending

• Increasing borrowing

• Increase taxation

The Republican answer to this challenge seems to be the United States should do less in the world (decrease spending), since it must maintain a basic minimum of domestic spending, particularly around social security and Medicare/Medicaid, even as those costs are going up and even as Republicans try to reduce costs to those programs. The Republican view is that other countries need to take responsibility for their own security and for maintaining the international order. Republicans are also increasing borrowing as they try to reduce taxation.

The challenge for Democrats is how would they pay for these increasing domestic costs AND maintain spending on these activities outside the United States. Borrowing is becoming more expensive, and it is deeply unpopular to increase taxation. I think Democrats are right to title this the “Price of Retreat”, but it does beg the question: where would Democrats get the money to maintain this spending?

Contrary to popular belief, the tax burden on Americans has been steadily going down since 1945 and our spending on defense and foreign aid (as a percentage of GDP) has been going down as well… even as our costs, particularly domestic costs for healthcare, have been going up.

From Claude Sonnet 4

The questions we have to wrestle with as citizens are: what is the appropriate tax burden that we should carry as a nation (both federal and state)? How should that burden be divided among citizens? There is no scientific answer to that question, it is an inherently political question and its answers require compromise and consensus.

My suspicion is that our tax burden should be higher than what we are carrying now… that answer likely guarantees I could never be elected to Congress.

44. Hong Kong nat. security police arrest 4, aged 15 to 47, for alleged subversion via Taiwan-based group
    Hans Tse, Hong Kong Free Press, July 10, 2025

45. China's infiltration tactics backfire as Taiwan cancels Strait swim over security threats
    Ani News, July 16, 2025

46. TikTok faces fresh European privacy investigation over China data transfers
    Kelvin Chan, Associated Press, July 10, 2025

47. Spain awards Huawei contracts to manage intelligence agency wiretaps
    Alexander Martin, The Record, July 11, 2025

48. Caught in the contest between China and the west, the Cook Islands asks where its future lies
    Prianka Srinivasan, The Guardian, July 14, 2025

49. The Quiet Invasion: How Transnational Crime and Chinese State Actors Infiltrated Vancouver’s Ports and Eroded Canada’s Sovereignty
    Sam Cooper, The Bureau, June 27, 2025

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Human Rights and Religious Persecution

50. Chinese recruiter flaunts dispatch of North Korean workers despite UN sanctions
    Dave Yin, NK News, July 15, 2025

51. Hong Kong passes law barring ‘national security’ offenders from organizing unions
    James Brierley, Jurist, June 25, 2025

52. HRIC Executive Director Pushes for Measures to Counter Protect Students Against CCP Transnational Repression on US Campuses
    Human Rights In China, July 11, 2025

53. Hong Kong waiter charged with inciting subversion under Beijing-imposed nat. security law
    Hans Tse, Hong Kong Free Press, July 10, 2025

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Industrial Policies and Economic Espionage

54. Firsthand Accounts of China's Efforts to Pry Tech from West
    Lingling Wei, Wall Street Journal, July 15, 2025

55. France Urges Tariff Barriers to Stop China from Killing Industry
    William Horobin and Francois De Beaupuy, Bloomberg, July 5, 2025

56. China's Hesai loses lawsuit against US government for blacklisting
    Reuters, July 12, 2025

57. The 50 Percent Problem
    Eliot Chen, The Wire China, July 13, 2025

58. China’s Elastic Export Controls
    Audrye Wong, Viking Bohman, and Victor Ferguson, The Wire China, July 13, 2025

59. The Company that Refuses to Decouple
    Rachel Cheung, The Wire China, July 13, 2025

Walmart should be in trouble in China, where its competitors are in retreat and its sourcing operations have been criticised by both Beijing and Washington. But the American retailer seems to have found a way forward in a difficult sector and remains one of the biggest benefactors of China-U.S. trade.

60. Your Next Lawn Chair Is Coming from Vietnam, but It’s Still Kind of Chinese
    Jon Emont, Wall Street Journal, July 13, 2025

61. The coming rare earths war China has the advantage
    Helen Thompson, Unherd, July 14, 2025

62. China’s Exports Beat Expectations After Trade Truce with U.S.
    Jonathan Cheng, Wall Street Journal, July 14, 2025

63. How Long Can China Keep Propping Up Its Consumers with Subsidies?
    Daisuke Wakabayashi, New York Times, July 14, 2025

64. China’s luxury hotels sell street food to survive tough business climate
    June Xia, South China Morning Post, July 13, 2025

65. China’s garment makers cut out of US market as tariffs bite: ‘caught off guard’
    Mia Nulimaimaiti, South China Morning Post, July 12, 2025

66. Mexico to allow exports of China's favored 'cocaine of the sea'
    Tomohiro Ichihara, Nikkei Asia, July 13, 2025

67. In China, the master’s degree is the new bachelor’s degree
    Joshua Yang, Washington Post, July 13, 2025

68. China Says Its Economy Held Up Under Trump Tariff Attack
    Jonathan Cheng, Wall Street Journal, July 14, 2025

69. Inside One Company’s Prolonged Tariff Limbo
    Jennifer Williams, Wall Street Journal, July 15, 2025

70. China’s Economy Grows Steadily Despite Trump’s Tariffs
    Keith Bradsher, New York Times, July 14, 2025

71. Inside Beijing’s Chipmaking Offensive
    Jacob Feldgoise and Hanna Dohmen, CSET, July 14, 2025

72. US probes imports of drones and critical material in chips and solar panels
    Aime Williams and Steff Chávez, Financial Times, July 15, 2025

73. Airbus signs fresh deal with Chinese partner amid talk of massive China order
    Xiaofei Xu, South China Morning Post, July 16, 2025

74. China Earnings Pose Risks to Nascent Rebound in Onshore Stocks
    Bloomberg, July 16, 2025

75. Commerce Secretary Lutnick says China is only getting Nvidia’s ‘4th best’ AI chip
    Kif Leswing, CNBC, July 15, 2025

COMMENT – Secretary Lutnick is wrong…

76. Nvidia’s China Troubles Aren’t Over
    Asa Fitch and Dan Gallagher, Wall Street Journal, July 15, 2025

77. Howard Lutnick says easing of Nvidia’s AI chip exports linked to China deal
    Aime Williams, Financial Times, July 15, 2025

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Cyber and Information Technology

78. China Is Spending Billions to Become an A.I. Superpower
    Meaghan Tobin, New York Times, July 16, 2025

79. Startup Behind Manus AI Agent Shuts Down China Team
    Juro Osawa, The Information, July 10, 2025

80. China Biotech’s Stunning Advance Is Changing the World’s Drug Pipeline
    Amber Tong, Jinshan Hong, and Spe Chen, Bloomberg, July 13, 2025

81. TikTok Denies Report of Separate U.S. App That Could Pave Way for Sale
    Ding Yi and Guan Cong, Caixin Global, July 14, 2025

82. China's Hesai appeals US court ruling supporting blacklist inclusion
    Wataru Suzuki, Nikkei Asia, July 14, 2025

83. OpenAI Challenger Zhipu Said to Weigh Shifting IPO to Hong Kong
    Pei Li, Julia Fioretti, and Luz Ding, Bloomberg, July 11, 2025

84. TikTok’s messy merger in Indonesia could be a preview of what’s to come in the U.S.
    Michelle Anindya, Rest of World, July 14, 2025

85. Malaysia Controls AI Chip Exports as US Targets China Smuggling
    Ram Anand and Mackenzie Hawkins, Bloomberg, July 14, 2025

86. China Lags in Chip Lithography, Influential DC Think Tank Says
    Debby Wu, Bloomberg, July 14, 2025

87. The New Third Rail in Silicon Valley: Investing in Chinese AI
    Bloomberg, July 14, 2025

88. The final chip challenge: Can China build its own ASML?
    Cheng Ting-fang, Lauly Li and Shunsuke Tabeta, Nikkei Asia, July 16, 2025

89. China’s Lab‑Grown Brains Connected to AI Chips
    Sam Olsen, July 5, 2025

90. China looks to include AI in broader trade relationship
    Andrew Tillett, AFR, July 5, 2025

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Military and Security Threats

91. U.S. Army sinks target at sea using Typhon during Talisman Sabre 25

    Naval News, July 16, 2025

The 3rd Multi-Domain Task Force (MDTF) deployed a Mid-Range Capability (MRC) to Australia and conducted a Standard Missile 6 live fire on July 15th, 2025, successfully sinking a maritime target in support of Exercise Talisman Sabre 25, a bilateral exercise between the U.S. and Australian militaries. The deployment demonstrates the 3rd MDTF’s ability to deploy and support regional security and stability.

The MRC live fire is a significant milestone in the development of the U.S. military’s land-based maritime strike and strategic strike capabilities. The live fire validated the U.S. Army’s ability to forward deploy U.S. Army Long-Range Precision Fires (LRPF) and demonstrated the 3rd MDTF’s ability to execute command and control (C2) of land-based maritime strike from a combined muti-domain C2 node in conjunction with the Australian Army’s emerging multi-domain formations.

The live fire demonstration of the MRC’s capabilities was conducted in synchronization with the joint force. This was the first time that a land-based MRC has been fired west of the International Date Line (IDL), marking a significant milestone in the development and employment of the U.S. military’s land-based maritime strike capabilities.

COMMENT – I hope the PLA is paying attention.

For more on this and the Typhon system see: “Behold, the Typhon! Ode to the humble HEMTT” September 15, 2024.

92. China Surveys Seabeds Where Naval Rivals May One Day Clash
    New York Times, July 10, 2025

93. Japan voices strong concern over Chinese military and rare earth moves
    Jesse Johnson and Gabriel Dominguez, Japan Times, July 10, 2025

94. Philippines Says Canada Troops Pact Ready, Eyes China Deterrence
    Cliff Harvey Venzon, Bloomberg, July 9, 2025

95. China’s cyber sector amplifies Beijing’s hacking of U.S. targets
    Joseph Menn, Washington Post, July 16, 2025

96. Cyborg bees to be Chinese military scouts
    Allegra Mendelson, The Telegraph, July 10, 2025

97. In the Hills of Australia, Pacific Allies Are Training to Fight China
    Mike Cherney, Wall Street Journal, July 11, 2025

98. How China’s Military Is Flexing Its Power in the Pacific
    Austin Ramzy and Emma Brown, Wall Street Journal, July 13, 2025

99. China Bans Dual-Use Exports to Eight Taiwan Defense Entities
    Yian Lee, Bloomberg, July 9, 2025

100. Taiwan’s military takes preparation for Chinese invasion to civilians’ doorsteps
     Kathrin Hille, Financial Times, July 15, 2025

101. What opportunities and risks did Beijing see during the 12-day war between Israel and Iran—and what gains and losses did it draw at its conclusion?
     Galia Lavi and Ori Sela, Institute for National Security Studies, July 14, 2025

102. Drones Are Key to Winning Wars Now. The U.S. Makes Hardly Any.
     Farah Stockman, New York Times, July 14, 2025

103. 40,000 Troops, 19 Nations: The China Threat Unites U.S. Allies
     Mike Cherney, Wall Street Journal, July 15, 2025

104. Japan calls China’s military activity its biggest strategic challenge
     Mari Yamaguchi, AP News, July 15, 2025

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One Belt, One Road Strategy

105. China’s Belt and Road investment and construction activity hits record

     Joe Leahy, Financial Times, July 16, 2025

Rapidly expanding presence in countries signed up to Xi Jinping’s global initiative contrasts with US approach.

The value of Chinese companies’ new investment and construction contracts in countries that are part of President Xi Jinping’s global Belt and Road Initiative has hit a record high this year, a new study has found.

The expansion in overseas markets and China’s increased engagement with countries under its flagship BRI infrastructure programme contrast starkly with the approach of the US, where President Donald Trump is imposing bruising tariffs on trading partners around the world.

Chinese construction contracts and investments in BRI members totalled $124bn over 176 deals in the first six months of the year, greater than the total of $122bn for the whole of 2024, according to a study by Australia’s Griffith University and the Green Finance & Development Center in Beijing.

“The surge in Chinese engagement this year is surprising, even against the backdrop of steadily growing BRI activity since Covid,” said Christoph Nedopil Wang, the study’s author. “What sets 2025 apart is the scale: multiple megadeals each exceeding $10bn.”

Wang said slow domestic growth and the need to diversify supply chains and markets due to the trade war sparked by Trump’s tariffs had prompted some Chinese companies to look abroad, while BRI countries saw “an opportunity to deepen ties with China amid shifting global geoeconomic dynamics”.

Launched in 2013, Xi has used the BRI to deepen China’s economic influence and trade ties with 150 countries, particularly in the developing world.

The surge in the first half brought the total value of contracts and investments under BRI to $1.3tn, the study found, comprising contracts worth about $775bn in construction and $533bn in non-financial investments.

“China’s energy-related engagement in 2025 was the highest in any period since the BRI’s inception,” the study said, adding that the value of such investment and construction contracts was highest in Africa at $39bn and Central Asia at $25bn.

The study found oil and gas construction contracts and investment surged to a record high of about $44bn in the first half, exceeding full-year 2024, with $20bn of work involving processing facilities in Nigeria.

Kazakhstan received the most investment of any individual BRI partner at $23bn, while Latin America received its lowest value of contracts and investments in 10 years.

Chinese companies’ contracts and investment in wind, solar and waste-to-energy projects in BRI partners hit a record of nearly $10bn, while they also continued to invest in coal and ploughed a record nearly $25bn into metals and mining.

Other researchers also said their calculations showed an increase in BRI deals.

US-based Rhodium Group said that announced foreign direct investment by Chinese entities in BRI countries was worth nearly $15.9bn in the first quarter, up 10 per cent from the same period a year earlier.

Rhodium said south-east Asia accounted for much of the investment momentum in BRI countries as companies sought to diversify their production bases from China.

106. China’s Belt and Road 2.0: Smaller projects, bigger influence

     Imran Khalid, The Hill, July 14, 2025

On July 1, a cargo train from western China reached Chancay, Peru — a symbolic milestone in Beijing’s quieter but sharper new global infrastructure strategy. As the Belt and Road Initiative evolves, ports, railways and data cables are replacing fanfare with functional dominance. Since late April, Guangzhou port has operated direct maritime routes to Chancay, slashing transport costs for Chinese and Latin American exporters by nearly 30 percent.

With shipping times reduced, this once-sleepy fishing village has morphed into a logistical pivot point — and the latest jewel in China’s infrastructure crown. COSCO Shipping, which owns a 60 percent stake in the Chancay port, has positioned the terminal as a regional logistics hub that will handle more than 1 million containers annually by 2030.

107. China looks to Africa as testing ground for global roll-out of yuan
     Jevans Nyabiage, South China Morning Post, July 16, 2025

108. China urges Beijing-backed development bank to focus more on Belt and Road Initiative

     Evelyn Cheng, CNBC, June 25, 2025

Chinese Premier Li Qiang on Thursday urged the Asian Infrastructure Investment Bank to increase its support for Beijing’s Belt and Road Initiative.

His speech at the opening ceremony of the bank’s 10th annual meeting comes amid a pullback of U.S. support for Western-led institutions such as the World Bank and the International Monetary Fund, which U.S. President Donald Trump claims unfairly benefit other nations.

“I hope that the AIIB will stay committed to open regionalism and persevere in promoting connection and communication among Asian countries and countries across the world,” Li said in Mandarin through an official English translation.

“It is important to strengthen the synergy between the bank and the Belt and Road Initiative and Global Development Initiative,” Li said, referring to two Beijing-led programs.

109. Pakistan courts Chinese investors ahead of $250m panda bond debut
     Adnan Aamir, Nikkei Asia, July 14, 2025

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Opinion

110. Toward an Abundance National Security Agenda
     Kathleen H. Hicks and Wendy R. Anderson, National Interest, July 15, 2025

The central aims of the abundance agenda must include national security innovation to secure enduring prosperity.

For the first time in decades, there is real bipartisan momentum to make America a nation that builds again. Democrats are debating an abundance agenda to “build and invent more of what we need.” Republicans speak of reshoring critical industries and reclaiming manufacturing leadership. From semiconductors to infrastructure, housing to energy, both parties now agree: America must rebuild its capacity to make things. The core priorities of the abundance agenda—housing, clean energy, infrastructure, and industrial revival—must expand to include national security if prosperity is to take root and endure.

Yet amid this momentum, one vital domain remains conspicuously absent from the abundance agenda: national security. This is a critical oversight. An economy that cannot deliver defense capabilities with speed and at scale will struggle to protect the prosperity it creates. Any build agenda that fails to account for national defense is resting on quicksand.

111. America asks its allies the tough questions: It’s perfectly reasonable to ask Japan and Australia what they’ll do in the event of a Taiwan contingency

     Grant Newsham, Asia Times, July 14, 2025

The United States wants to know what Japan and Australia would do in the event of a conflict over Taiwan. Under Secretary of Defense Elbridge Colby is under fire, as he sometimes is these days.

But the US has asked a reasonable question since the Americans are expected to do the heavy-lifting over Taiwan, and they need help. The United States is also treaty-obligated to defend both Japan and Australia in event of a fight unrelated to Taiwan.

The question appears to have been asked behind closed doors – which is good – but also appears to have been leaked. Which is not good – no matter who leaked it.

Even friends don’t like being ordered around.

And another reason to keep it out of public eye? If Japan and Australia equivocate on support for Taiwan, which they undoubtedly will, that’s surely a signal to Beijing to press ahead.

Washington absolutely needs those commitments – but privately.

Ironically, even the US isn’t entirely clear on Taiwan – although it’s reasonably expected to fight since it does more than everyone else put together to bolster Taiwan’s defense..

And if Washington is going to war, it’s helpful to know who else is coming – and with what.

As for Japanese, they understand that a PRC-controlled Taiwan is an existential risk. There’s no sense of urgency, however.

War planning and preparations are lagging – beyond plans to evacuate Japan’s southern islands and building bomb shelters.

Tokyo has almost no security relationship with Taiwan.

On the plus side, Japan’s considerable support to the Philippines – radars, patrol boats, six retired destroyers and dual use infrastructure – is done with an eye toward a Taiwan fight. And one Japanese official explained that the long-range missiles (current and more advanced versions) that Japan has based on its southernmost island can reach quite a ways towards Taiwan and potentially beyond.

But it still appears Japan expects the US to handle things if Taiwan goes “hot” while Japan does what it feels like.

Washington is wise to get this ironed out beforehand.

Australia?

Will Australia play a role, let alone fight, if there is a conflict over Taiwan? Don’t be so sure.

The Australian military is game, but undersized and lacking capabilities and direction. And a powerful constituency in Australia is both anti-military and anti-American.

Prime Minister Albanese is in Beijing this week and is cozying up to China more than ever. The PRC banned exports of Australian lobster and wine a few years ago, and the possibility Beijing will do it again appears to have rattled Canberra.

The Australian Broadcast Corporation (ABC) said: “It’s entirely appropriate that Anthony Albanese is meeting Xi again before he meets Trump for the first time. Xi is more important than Trump now.”

Washington may be overestimating Australian support. Today’s Australia seems different from the one that stopped the Imperial Japanese Army in New Guinea in 1942.

Best to clear it up sooner than later.

More money

The Americans – as they’ve done for years – are also asking Japan and Australia to spend more on defense.

But even upping the budget doesn’t mean more capability and a willingness to use it – which is what the Pentagon is really asking for.

US requests need to include some well-thought-out advice on what to spend money on so as to be a more useful partner. Otherwise it’s just nagging.

As an exasperated Japanese Prime Minister Kakuei Tanaka relayed to the Americans over 50 years ago: “Tell us what you need … and don’t back down.”

Getting heard

These hard questions are asked at the defense secretary / minister level. But that’s not where they are decided.

Washington would do well to quietly summon the Japanese and Australian ambassadors, one at a time, to the White House and explain things with President Trump in the room.

Maybe even slide a “non-paper” across the table. That’s the diplomatic equivalent of telling someone what you want, but without formally telling them what you want.

And don’t publicize it, if you can help it. Just make it clear you’re serious.

There is of course the added challenge of America’s partners thinking they can wait out the Trump administration. Such is life…

These questions should have been asked and answers received from America’s allies a decade ago.

To its credit, the Trump administration is at least asking.

And it’s a fair question to ask when Americans are expected to do most of the dying in a fight over Taiwan – which is just as important to Japan and Australia as to the United States.

America needs help, and it needs to know where its friends stand long before the shooting starts.

“Winging it” means losing.

COMMENT – I’ve come around to Grant Newsham’s argument.

It is NOT unreasonable for Washington to ask, behind closed doors, Tokyo and Canberra whether they will assist militarily to prevent the PRC from annexing Taiwan militarily. While the United States may not discuss publicly the conditions under which it would intervene militarily, it is not a secret that the United States has postured its forces in the region to be able to do so.

The term “strategic ambiguity” refers to our public statements, not whether we have the forces trained and positioned to prevent the PRC from annexing Taiwan. The U.S. military is positioned to do so, and Beijing knows it. The Defense Department is right to press its allies to determine whether or not they are going to similarly position their forces to do so.

Back when it was fairly unlikely that the PRC would attack and invade Taiwan, we could afford to be less prepared and avoid difficult discussions and coordination. Those conditions no longer exist and it would be irresponsible if DoD did not press our allies to be more ready.

The real shame here is on the individuals who leaked these sensitive discussions.

112. Yes, We Do Want to Be Like China
     Robert D. Atkinson, Policy Arena, July 11, 2025

113. Tokyo, Manila moves arouse Chinese concerns about Asian mini NATO
     Cherry Hitkari, Asia Times, July 14, 2025

114. We Warned About the First China Shock. The Next One Will Be Worse.
     David Autor and Gordon Hanson, New York Times, July 14, 2025

115. Trump is enabling Chinese power
     Noah Smith, Noahpinion, July 16, 2025

An incompetent, selfish, inwardly focused administration is making America less of an obstacle to China's rise.

Beginning in Donald Trump’s first term in office, and then especially during the Biden administration, it seemed as if the world was moving into Cold War 2. A U.S.-led democratic bloc was facing off against the “New Axis” — a China-led bloc that included Russia, North Korea, and possibly Iran. The contest promised to spill over beyond the military and diplomatic realms, as both blocs strove for economic and technological supremacy.

Plenty of the Biden administration’s policies were oriented around the idea of that contest. Export controls on the Chinese semiconductor industry, targeted tariffs on Chinese tech products, and industrial policies — all championed by Biden’s National Security Adviser, Jake Sullivan — were all attempts to keep the U.S. at the pole position of advanced manufacturing, in order to reduce the risk that China would become the global hegemon.

When Donald Trump ran for President in 2024, I immediately worried that his priorities on Cold War 2 had shifted from his first term. Although Trump had a reputation as a China hawk from his first term, he now seemed to have abandoned the idea. He came out against the TikTok divestment bill, and threatened to cancel the bipartisan CHIPS Act that represented America’s best hope of retaining meaningful semiconductor manufacturing capacity.

COMMENT - It certainly looks like Noah Smith might be right.

116. A 21st-Century Democratic Alliance
     Rishi Sunak, Wall Street Journal, July 15, 2025