Trump should ‘hold the line’ and block AI chips from Chinese market, ex-ambassador says

Geoff Bennett:

Now, for the first of two views on the Trump-Xi meeting, we turn to former U.S. Ambassador to China Nicholas Burns, a diplomat with decades of experience under Republican and Democratic administrations. Burns served as envoy during the Biden administration and left his post earlier this year.

Mr. Ambassador, welcome back to the "News Hour."

Nicholas Burns, Former U.S. Ambassador to China: Thank you, Geoff.

Geoff Bennett:

So, this new Trump-Xi truce, what's really being gained here and what's still unresolved beneath the surface?

Nicholas Burns:

Well, you might picture President Trump and President Xi as two boxers in a ring and they're circling each other and they're punching and counterpunching. That's the last six months.

They don't entirely trust each other. In fact, there's not much trust at all. And the match didn't end today. I think you're right, Geoff, to call this a truce in a long-running trade war. And I think this trade war is going to continue well into 2026 because there are fundamental differences on both sides of the competition.

Geoff Bennett:

Well, let's talk about Xi, because, inside China, Xi has consolidated extraordinary power, as you well know. But what kind of pressure is he facing that might have pushed him to step back from confrontation?

Nicholas Burns:

He's facing a slowing economy. His GDP growth rate is not what they want. It's single digits. It's below 5 percent, despite what the Chinese say. They say it's 5 percent. It's really not. Massive youth unemployment, a property bust that has 80 million empty apartments. The entire population of Germany could fit inside them.

And so — and a lack of confidence, I think, in the direction of the economy. He also needs access to the U.S. market because China has an export- and manufactured- driven economy. So the United States has some leverage here and President Trump has used that leverage.

But China has leverage too, because they are manufacturing products well below the cost of production. They can do a lot of harm to our economy. I think they were two positive deliverables today for the United States that President Trump was able to deliver. First, Xi Jinping needs to help us on fentanyl. It's the leading cause of death in our society Americans age 18 to 49.

And the majority of the precursor chemicals that make up fentanyl come from the Chinese black market. Second, China is the largest market for American agriculture and has been for quite some time. And the Chinese played hardball this year. They didn't buy a single soybean from Midwest farmers. So, President Trump was able to convince him to buy 12 million metric tons of soybeans this year, 25 million metric tons each year over the next three years.

That's going to be of enormous help to our farmers. But here's the question, Geoff. The Chinese shouldn't have been withholding cooperation on fentanyl. President Biden raised that vigorously at two summit meetings with President Xi. As ambassador, I worked that problem and tried to push the Chinese. They never really gave us their full effort.

And so I think President Trump was right to say to President Xi, you need to do more on fentanyl. You need to do more on agricultural sales. But will the Chinese actually meet their commitments? That's been a problem in the past.

Geoff Bennett:

Fentanyl, agriculture. Let's talk about technology because a major point of contention has been China's access to Nvidia's advanced A.I. microchips, which, if allowed, could deal a major blow to the U.S. leadership in the A.I. race.

President Trump today said that he and Xi discussed Nvidia's access to China in general, but that he didn't personally sign off on any sales of the company's most advanced chips. What's your understanding of what that means in practice?

Nicholas Burns:

I think this is a vital issue for the United States. And I really hope that the Trump administration will hold the line here and not allow the sale of advanced chips, semiconductors for A.I. purposes, into the Chinese market.

Why is that? Because, in China, if we allowed Nvidia or Intel or any other tech company to sell those advanced chips into the market, the government of China would reach into that Chinese company that purchased the chips and use it to help the PLA, the People's Liberation Army, modernize its military technology to try to compete with our military in the Indo-Pacific.

And there's nothing more important than the United States remaining the strongest military power. We don't want China to leapfrog over us. And so the fortunes of a couple of tech companies and their increased revenues from selling into China are simply not equal to the national security damage that would be done by allowing China access to these chips.

President Biden put the prohibition in place three years ago, no chips, advanced chips into China. I really hope President Trump will hold the line here against these companies that want access. And it's understandable, but it's not in our national security interest.

Geoff Bennett:

Holding the line, what benchmarks should the administration use to judge whether this truce is actually working or whether it's time to change course?

Nicholas Burns:

I think that's the right question.

I think, over the next couple of months, the Trump administration is going to have to hold China's feet to the fire, do the right thing on fentanyl. They — the Chinese used to tell me, we can't possibly, Ambassador, control thousands of Chinese chemical companies.

And I would remind them, you're an authoritarian government. You can do whatever you want in this country. You can shut down the flow of these precursor chemicals. So that's certainly one. And certainly the second one is ag purchases. President Trump actually negotiated a major sale of American agriculture in 2019 and 2020, which the Chinese never implemented.

And so it's kind of interesting to me. I represented President Biden, obviously, as ambassador. But President Biden and President Trump have had a similar approach on trade. We implemented all of the Trump tariffs in the Biden administration towards China. And President Trump so far has implemented President Biden's 100 percent tariff, for instance, on the import of Chinese electric vehicles.

That would be very damaging to our auto industry. And so I hope we can keep a bipartisan consensus that, while we want to live in peace with China, we want to cooperate when we can, this is largely a competitive relationship. And I felt I had an advantage as ambassador because Republicans and Democrats did sing off the same sheet of music.

And I just hope the Trump administration and the president particularly will be as tough-minded as President Biden was on these issues.

Geoff Bennett:

Former U.S. Ambassador to China Nicholas Burns, thanks again for your time this evening. We appreciate it.

Nicholas Burns:

Thanks very much, Geoff.