Trump-Xi agreement a ‘fragile truce,’ former deputy national security advisor says

Amna Nawaz:

Now to another view.

Matt Pottinger was deputy national security adviser in the first Trump administration and he spearheaded China policy as the confrontation with Beijing accelerated. He serves now as chairman of the China Program at the Foundation for Defense of Democracies. That's a Washington think tank.

Matt, welcome back to the "News Hour." Thanks for joining us.

Matthew Pottinger, Former U.S. Deputy National Security Adviser:

Yes, thanks for having me.

Amna Nawaz:

Let's pick up with that issue of those advanced Nvidia chips you heard Ambassador Burns just talking about, because you have also previously said the sale of those chips to China would be a catastrophe for us technological leadership. You heard President Trump say they didn't discuss it in the meeting, that it's up to China and Nvidia to work out a deal and the U.S. would act as an arbitrator.

So does all of that assuage your concerns?

Matthew Pottinger:

Well, yes, I'm certainly relieved that President Trump was not talked into giving away the most advanced chips or even reasonably advanced chips, which is really what was on the table, really advanced chips made by Nvidia.

It's clear that the leader of the company Nvidia wants to sell — who can blame him. He wants to sell his chips everywhere, right? But for the reasons that you just heard Ambassador Burns talk about, that would be a real disaster for the United States, not only because it would help the People's Liberation Army.

It would put us in danger and in an inferior position militarily. But A.I. is going to be like electricity. It's going to permeate everything, the commercial uses. It means that information flow, the public square, all these things are going to be either controlled by an authoritarian government or they're going to be part of a free and democratic kind of order, which is what we all stand for here in the United States.

So it's really important that we maintain that leadership. The biggest area where we have a lead over China in A.I. is actually access to these high-end, very powerful chips.

Amna Nawaz:

Let me ask you take a bigger-picture look here at what was agreed upon in this truce, as it's being called, in the trade war. Do you agree with what you heard from Ambassador Burns here that this is just a truce, it's sort of a long-simmering trade war that will likely continue into 2026?

Matthew Pottinger:

Yes, I think that's about right.

I think this is a fragile truce. The can sort of gets kicked into 2026. None of the structural problems are addressed. But having a fragile truce isn't a bad thing.

It means that the most draconian steps that China was threatening to take, namely to regulate all trade of all technology between nations, not just with China, but even between democracies, China was saying as of the 9th of October that they were planning to regulate that trade if technological items and inputs contained even minute amounts of Chinese rare earths, which so many things do.

So that would have been a situation where we would have been in an escalatory spiral. You would have seen probably a global recession if China had gone forward with that. And then, on the flip side, President Trump is going to refrain from applying new tariffs.

As you just heard, as you just reported, he's actually even reducing the tariffs a bit in expectation that China is going to do something that it hasn't really done yet, which is refrain from selling all of these heavily state-subsidized chemicals that go to the drug cartels in Mexico and end up on the streets, killing — in fact, it's the leading cause of death in the United States for 18-year-olds to 49-year-old men.

So I will take a fragile truce.

Amna Nawaz:

So, if this is a matter of kicking a lot of these bigger issues down the road, what happens when you look at the leverage that both sides are left with now? And you heard some of what Ambassador Burns had to say in terms of what U.S. leverage is, the headwinds that China continues to face.

But if the big question here is whether the leaders of the world's two biggest economies are actually going to make good on the verbal promises they made, what does that look like to you ahead?

Matthew Pottinger:

Yes, look, I — well, first, I would say the United States actually has a lot more leverage than we even brandished in these talks.

That could include expanding control, so that China is not able to get even less advanced semiconductors across the board. That would be sort of our nuclear option, equivalent in a sense to what they were threatening to do with this rare earth regulatory approach.

Hopefully, it's not going to come to that, but what I would warn is that we're dealing with a Leninist dictatorship. And the pattern with Leninist dictatorships, including the People's Republic of China, is that, when they find a pressure point that seems to be working, they're going to keep returning to that pressure point. They're going to push again and again and again.

So you have not heard the last about American companies running into trouble in terms of shortages of rare earths. It's going to take us some years to invest and build and develop our way out of that. And it's actually an urgent situation still.

Amna Nawaz:

Matt, I have got less than a minute here, but I have to ask you. The president had said that Taiwan didn't come up in these conversations. If you're listening from Taiwan, should you be worried about wavering U.S. support here?

Matthew Pottinger:

Look, I don't think that President Trump's policy on Taiwan has deviated from where our presidents have been going all the way back to 1980, from Reagan onwards, really.

And that has been to follow the Taiwan Relations Act, which is a U.S. law that makes clear that we are going to provide weapons to Taiwan and that if China were to try to change the status quo through coercion, that would be a matter of grave concern for the U.S.

Amna Nawaz:

Matt Pottinger, always good to have you here. Thank you very much for joining us.

Matthew Pottinger:

Thank you.