Read the full transcript of a conversation between host George Galloway and author Shaun Rein on “The Chinese People Won’t Kowtow To Trump”, Apr 13, 2025.
The interview starts here:
US-China Trade Tensions Escalate
GEORGE GALLOWAY: So who did we get to be our guest at the end of a week in which US-China relations and trade was the biggest story in the world? Well, only the doyen of China commentators Shaun Rein, author of “The Split: Finding the Opportunities in China’s Economy in the New World Order.” How lucky are we that Shaun joins us now? How did it all look to you? Were you gazing at it in disbelief, or did you expect it, Shaun?
SHAUN REIN: George, it’s great to be here during this age of uncertainty. First off, in the beginning of the week, there was a lot of anger and a lot of anxiety in China, but there was also a word that I want to highlight: resolve. The Chinese people coalesced around Xi Jinping and the CPC and said, if Trump is going to slap 84% tariffs on us, if Trump is going to slap 125% tariffs on us, we are going to bind together and we are going to be a strong Chinese nation and push back very hard.
I think Trump is getting very bad advice from people like Scott Bessent, the Secretary of Treasury, as well as Peter Navarro, his advisor on trade, because they think that the Chinese are going to bend their knee to Trump, and that’s just not going to happen. Basically, Xi Jinping has dealt with a lot more pain than Trump ever has. When Xi was 15 years old, he actually spent eight years living in a cave. When I first moved to China in the 1990s, many Chinese told me that they hadn’t eaten meat more than once every month or two.
So the Chinese people were prepared for pain. They were prepared to push back against Trump and show the world that China is the new global world superpower and there’s a new world order. So that was the beginning of the week, George, and then after Trump yesterday stepped back and said, well, we’re going to exempt tariffs on iPhones, computers and other electronic devices, the Chinese people feel they’ve beaten the United States in round one, and they’re pushing back and they’re laughing. They’re laughing at Trump right now.
One of the most popular memes in social media today is a picture of Donald Trump looking like a schoolgirl sitting on his bed saying, “When will Xi Jinping call me? Why won’t he call?” And that’s what’s happening right now. So there was a lot of anxiety and resolve in the beginning of the week, but by the end of the week, there was a lot of happiness and a sense of relief that Trump wasn’t going to go too far, George.
The Game of Chicken Between World Leaders
GEORGE GALLOWAY: I don’t know who should call who first? Probably Trump, because he’s the one that launched this blitzkrieg on China. Economic financial blitzkrieg. But it would be a good idea for Trump and Xi Jinping to meet at an early opportunity, wouldn’t it?
SHAUN REIN: Absolutely. Absolutely. The two should have a phone call. The two should meet. But both of them are playing a game of chicken. Neither of them wants to appear weak to the other. Neither of them wants to appear weak to the rest of the world. But look, these tariffs don’t make sense. Nobody wins with the tariffs. It’s not like China’s going to win. It’s not like the United States is going to win because customers on both sides are going to get hurt.
Now, aside from customers paying tariffs, you already see some of the pain that’s hitting, say American companies. So Tesla has stopped selling their Model S and their Model X. They’re two high-end vehicles in China which used to sell very well, but in the retaliation the Chinese have slapped 84% tariffs onto the importing Teslas. So Elon Musk and Tesla’s hurting. That’s got to pressure one of Trump’s most valued advisors.
But on the other side, for the Chinese, it doesn’t help either. So we need to have both countries, both leaders talking together and having some pragmatism. I’m not sure that’s going to happen anytime soon because the United States is really trying to cripple and contain China’s economic growth.
Global Reactions to Trump’s Trade War
The good side and the wild card, George, is that you’re getting pressure from the rest of the world. Last week I was in China, I was in Thailand and I was also in Brussels in Belgium, keynoting a conference there. And what I was surprised about was how even the Europeans and the people in Thailand were really against what Trump was doing. And these are historically strong allies of the United States.
And they were saying, well, why is Trump tariffing us? What have we done to deserve such tariffs? And you could even see even in Brussels where Ursula von der Leyen has always pushed for de-risking and even decoupling from China, she is starting to say it’s a new world order, it’s a new world, it’s a new time, maybe we need to pivot closer back to China.
And that’s why there are rumors that there are discussions about getting rid of the tariffs on Chinese NEVs (new energy vehicles) being imported into Europe. So right now Xi is not going to be the first person to make the call. He wants to show Europe, he wants to show ASEAN, he wants to show the global majority, that China’s not scared and isn’t going to bow down, and most importantly, that China isn’t going to bow down is a message that he needs to send to the domestic Chinese population who, again, have that word resolve to stand up to what they consider to be imperialism and bullying.
The Risk of Military Conflict
GEORGE GALLOWAY: Well, I hope I can finally get one of these Chinese new energy vehicles.
So I hope you’re right and that the sanctions are lifted, but the politics of this are what lies behind it, really. I mean, some people say that Brian Berletic being one eminent commentator who takes the view that the United States is bent on confrontation even to the point of war against China, and that these are merely the opening shots. Where do you stand on that? Do you think these are opening shots of something even more dangerous than global trade war, or is this about positioning for this new world that we unarguably are now entering into?
SHAUN REIN: So I think Brian is a very smart man and I have a lot of respect for him, but I disagree with him on this point. I actually think the threat of war has really gone down under Trump. He likes to talk. He likes to use a shock and awe strategy and try to scare people, unlike Biden, who is more quiet. But the difference is that Biden would actually sell arms to the Ukrainians. He would actually launch military action around the world. Trump is more like a paper tiger. He talks big.
And what he likes to do is use his acolytes or the people surrounding him, sycophants, almost. Marco Rubio, who’s one of the biggest China hawks, is now Secretary of State. And he’s constantly criticizing China for what happens in Tibet, what happens in Xinjiang, what happens in Hong Kong.
You have Scott Bessent, the Secretary of Treasury, who I actually know. I’ve known him for 10, 15 years now, and I used to advise him on his China strategy when he was a hedge fund investor. And it was very difficult talking to him because basically his whole thesis on China was “China’s communist, so it’s going to fail.” It was ideological. He wasn’t using numbers. He wasn’t looking at whether consumers were spending more. He wasn’t looking at what was fixed asset investment. For Scott, it was always, it’s a communist country, China can’t succeed.
And so I think Trump is using people like Bessent and Rubio to say, if you don’t follow what the US wants, you’ll cut your throat. Which is what Bessent said to the Spanish prime minister. You know, Rubio is attacking on human rights, but Trump will back down. As you’ve seen, in less than 12 hours, after slapping 125% tariffs on China, the bond markets went to over 4.5%. You started to see that Apple had hired six airplanes to ship 1 million iPhones from China and India into the United States to beat the tariffs.
GEORGE GALLOWAY: Look, we’re unable to get a video link back to Shaun Rein, but he’s rejoining the show on the telephone right now. Sean, I was fascinated by what you are saying. You got to the point about the bond markets and about the pressure, internal pressure from US Capital itself having forced this u turn. We agreed, you and I, that it’s about time these two men spoke. Pick it up from there, if you would.
Market Pressures Force Trump’s Retreat
SHAUN REIN: Well, it’s important, George, that Xi Jinping and Donald sit down and talk. And I think that importantly, Trump likes to do a lot of shock and awe strategies. So that’s what I was saying before I got cut off was that he’s using Scott Bessent and Marco Rubio as attack dogs to try to pressure China.
But the reality is two things happened. Trump started to get a lot of internal domestic pressures. So Apple, you know, allegedly flew 1 million iPhones on six airplanes from China and India into the United States to save about $400 million worth of tariffs. So you started to get the business community in the United States saying to Trump, wait a minute, this doesn’t make any sense. We’re going to get crushed. We’ve lost $5 trillion in the stock market. Companies like Apple are acting almost as if it’s on wartime footing.
And most importantly, the United States has $37 trillion of debt. And a lot of that debt is rolling over this year. And so they have to pay very high interest rates. And in the time of stock market volatility, George, what usually happens is America’s treasury bills are considered a safe haven and interest rates drop as investors flood into buying T-bills. But what happened last week was the exact opposite.
Global investors were so scared about the chaos in Trump’s methods and mind that the interest rates actually went up to 4.5%, which meant that America’s debt crisis was getting even worse. And global investors, there’s rumors that it was the Japanese, rumors that it was the Chinese were selling off their T-bills in mass and causing the interest rates to raise up.
And so Trump really had to back down because he was getting pressure not just from the Apples of the world, not just from the stock market, but most importantly, the debt crisis was getting worse. And so Trump had to back down. And that’s why in China the last two days, there’s been a sense of euphoria and excitement that the Chinese, at least in this round, have beaten Trump.
China’s Economic Leverage
GEORGE GALLOWAY: Yeah, a kind of Chinese New Year all over again. I can see that China, of course, possesses a lot of US debt and can at any time begin to sell it off. Obviously, dumping it would be an expensive loss for the Chinese, but it might be a price they would consider worth paying. So the ability to sell American debt, by Japan, China or whomsoever, is another source of pain that’s still there up the sleeve of the people who hold that debt, isn’t it?
SHAUN REIN: Exactly. You’re exactly straight on. So China and Japan, they don’t want to sell their debt too much because, well, they lose value. But this is just another tool in the shed, along with other mechanisms such as banning the sale of rare earths to the United States as a way to pressure the U.S.
So, for instance, in my new book, “The Split,” I have a whole chapter on rare earth. What a lot of people don’t realize is that China refines about 85% of the world’s rare earth supply. They refine almost 95% of the rare earth premium supply that goes to Europe. And rare earths go into everything that everyday consumers use. Rare earths go into refrigerators, mobile phones, electric vehicles. Without Chinese rare earths, even the United States can’t use good quality radar and missiles in their weapons. So this is really the nuclear option for China.
So they can use T-bills, they can ban the export of rare earth, and they have those nuclear options available that could really add pressure to the United States. Now, China doesn’t want to do this, George. China feels that this tension is stupid and foolish. They want to keep on making products and selling products for Europe and America because that benefits not just the Chinese worker, but it also benefits the American and European workers.
At the end of the day, the United States, in my mind, they don’t even have enough workers to work in hotels and work in factories. How are they going to get enough workers to make iPhones and T-shirts and Nike Air Jordans? It just doesn’t make any sense, this tension.
GEORGE GALLOWAY: Well, they’re having to lift the deportation orders on hotel workers and agricultural labor and so on precisely for the reason you just mentioned, and it was revealed today, I don’t know if you saw it, Shaun, that 80% of the goods in the Trump gift shop in Trump Towers are made in China. I mean, the American public are being played with all this anti-China stuff, aren’t they?
The Dangers of Sinophobia in American Politics
SHAUN REIN: They’re absolutely being played. I mean look, over the last 20 years, the United States, everyday consumer people like my family, I’m American, I’m a proud American, but our quality of life has certainly gotten better because Chinese factory workers are willing to make the products that we like to consume. Without China, then prices at Walmart, prices on Amazon would go up 30, 40, 50%. And that’s again why companies like Apple were trying to send their products on airplanes to beat the tariff deadline.
So it really just doesn’t make sense. The problem we have right now, George, is that there isn’t economic pragmatism in DC right now, there’s just full blown Sinophobia. It’s sort of an ideological battle between a liberal democracy or American imperialism versus China. And that’s where it gets very dangerous because you’re acting in ways in DC that doesn’t make sense for the best interests of the American people. Because too many people in DC are just scared. They’re fear mongering about China’s rise.
You know, you saw David Perdue, who is Trump’s pick to be the next US Ambassador to China, he wrote a few months ago that the Chinese are trying to implement a communist system in the United States and implement the Chinese way of life and political system which threatens the American way. Now this is ridiculous. I don’t see China trying to implement its political system in the United States, not in ASEAN, not in the Philippines, anywhere except what it considers its core areas of sovereignty. So that would be Tibet, that would be Hong Kong, that would be Taiwan. So those are areas that China is definitely trying to say. This is mainland China, this is under the purview and power of the CPC, there’s no question about that.
But China is not trying to become a hegemon, forcing other countries to adopt the Chinese political way in the same way that the United States since the end of World War II has tried to force American style democracy on the rest of the world. That’s just not happening with China. So there’s too much fear mongering, George in the United States; the US and China working together, that’s a real win-win for both countries.
Western Cultural Misunderstanding
GEORGE GALLOWAY: There’s also a staggering level of cultural misunderstanding from Western countries. And I alluded to it in my monologue when Vice President Vance talks disparagingly about Chinese peasants, he would appear to have no idea of how that kind of stuff plays in Beijing, to coin a phrase, the routine insult against 1.5 billion humans in the world’s biggest manufacturing power in the world. The second biggest economy in the world, if not indeed the first. This kind of orientalism is quite staggering from such high personages of the United States, is it not?
SHAUN REIN: Yeah, that’s a great point, and I agree 100%, George. I think there’s two points I want to highlight on this. The first is when JD Vance calls Chinese peasants, it just shows how unsophisticated he is personally. I mean, in many ways we should be calling him a peasant because he might be intellectually smart, but he’s very unsophisticated and he’s not very worldly. I think he’s a hillbilly.
GEORGE GALLOWAY: Yeah, he told us he was a hillbilly.
Underestimating China’s Innovation
SHAUN REIN: Exactly, he’s a hillbilly. You know, he might have gone to a few good Ivy League schools. Who cares? They’re overrated. I went to Harvard too. I think they’re an overrated system. But JD Vance I don’t think has ever been to China. I’ve spent the last couple days furiously researching if he’s ever actually visited mainland China, and I don’t think he has. So I think he’s kind of an unsophisticated rube.
The second thing is that sort of arrogance and condescension is inherent not just in the United States, but, let’s be honest, in Western Europe. A lot of leaders. When I was in Brussels last week, a lot of Europeans were telling me, “We’ve been to China, we do business with China. We see that Chinese companies have moved up the value chain. They’re not just producing cheap toys, but they’re now innovative.”
You know, I was talking with a Serbian businessman who said that he used to buy German equipment for €90,000, and now he switched to a Chinese supplier because they’re selling it for a third of the price at only €30,000. And the quality is just as good.
And so I think the reality is J.D. Vance and a lot of European leaders are underestimating the innovation and quality that’s coming out of China. And that’s very dangerous when you’re underestimating your allies. But it’s even more dangerous when you’re underestimating what could be called your competitors or even adversaries.
Chinese, as you’ve seen in the last couple months have caught up and surpassed the United States and Europe in things like AI with DeepSeek, the language learning model. They’re very close to getting 3 millimeter wafers. And Huawei is even saying that in the next year or so they’re going to have lithograph machines, which makes semiconductors that are as good, almost, maybe even as good as the Dutch’s ASML.
So I think it’s important that JD Vance needs to get a little bit better educated, be a little bit less arrogant, and say we need to view Chinese as intellectual equals who are good people. Maybe we disagree on some values, maybe we disagree on some political preferences inherent in our political systems, but at the end of the day, we’re people and the whole world works better by working together.
And I actually think Trump is better than Biden on this and is less likely to go to war than Biden because he’s not as much of an ideologue. He’s looking for a deal with the Chinese, and he wants to be able to sell to MAGA that he beat the Chinese. So a deal will happen. I don’t know if it will happen this year, might happen in year two or year three. But at some point, Trump is going to want to have a deal with Xi Jinping, which is why he keeps saying, “Xi Jinping, call me.” And again, the first move has got to be by Trump. It’s not going to be by Xi.
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