YOU SAW OUR CAMERAS ARE RIGHT
THERE ON CAPITOL HILL.
>>> LET ME GET TO TRADE.
SILICON VALLEY GIANT SCOTT M
McNEELY WHO RAN SUN MICROSYSTEMS
FOR MANY YEARS AND IS NOW
WORKING ON THINGS LIKE BITCOIN
IN THE VALLEY, JOINED US
YESTERDAY.
WE ASKED HIM TO COME ON BECAUSE
WE WANTED TO KNOW IF HE BELIEVES
THE CHINESE WILL REALLY CHANGE
THEIR WAYS FOLLOWING THE G20
MEETING THIS PAST WEEKEND WITH
PRESIDENT TRUMP.
LISTEN TO WHAT HE SAID.
>> THIS MIGHT SLOW THEM DOWN FOR
A LITTLE BIT BUT I REALLY THINK
THEY WANT TO SEE IF THEY CAN
OUTLAST, I MEAN, WHAT I WOULD
GUESS THEY'RE PROBABLY DOING IS
THEY'RE GOING TO TRY AND OUTLAST
THE TRUMP ADMINISTRATION, AND
THEN GO BACK TO THEIR OLD WAYS.
OVER THE LAST 20 YEARS OR SO,
WE'VE BEEN, I DON'T KNOW ONE CEO
WHO ISN'T FRUSTRATED BY BOTH
ARMS TIED BEHIND THEIR BACK AS
THEY HEAD INTO THE CHINESE
MARKET.
LIZ: HE'S NOT A BELIEVER AT THE
MOMENT.
THE TRADE TRUCE REACHED AT THE
G20 SUMMIT LAST SATURDAY, A LOT
HAS CHANGED IN THE LAST 24
HOURS.
BEFORE THEN, BEFORE TODAY, THE
CHINESE WERE TOTALLY QUIET.
THEY DIDN'T SAY ANYTHING, DIDN'T
CONFIRM WHAT THE TRUMP
ADMINISTRATION SAID HAD BEEN
STRUCK.
WELL, NOW THEY ARE A BIT MORE
ARTICULATE TODAY ON WHAT'S BEEN
PROMISED AND WE WANT TO KNOW IF
WE BELIEVE IT.
LET'S BRING IN THE MAN WHO KNOWS
HOW THE CHINESE THINK.
JOINING US NOW FROM THE FLETCHER
SCHOOL OF LAW AND DIPLOMACY AT
TUFTS UNIVERSITY, PROFESSOR JOEL
TRACTMAN.
PROFESSOR, GET TO IT.
YOU BELIEVE THESE GUYS?
>> WELL, I THINK THAT SCOTT M
McNEELY IS RIGHT.
THE CHINESE STRATEGY IS ONE OF
STRATEGIC PATIENCE, BOTH WITH
THE UNITED STATES IN GENERAL
OVER THE PAST 20 YEARS, AND WITH
THE TRUMP ADMINISTRATION IN
PARTICULAR.
CHINA HAS ITS GROWTH STRATEGY.
IT'S NOT A MARKET ECONOMY, IT'S
AN ECONOMY THAT IS DIRECTED BY
THE GOVERNMENT.
PART OF THAT INDUSTRIAL POLICY
IS TO APPROPRIATE AS MUCH
FOREIGN TECHNOLOGY, INCLUDING
UNITED STATES TECHNOLOGY, AS
POSSIBLE.
AND THAT'S ALL PART OF THE PLAN.
SO THAT'S RIGHT THAT CHINA PLANS
TO WAIT OUT THE TRUMP
ADMINISTRATION AND ANY FOLLOWING
ADMINISTRATION, BUT THE TOOLS
THAT THE PRESIDENT IS USING TO
ADDRESS THE PROBLEM OF CHINA'S
POLICY ARE NOT LIKELY TO SOLVE
THE PROBLEM.
LIZ: WHY NOT?
YOU KNOW, HE SAID DON'T GET IT
DONE IN 90 DAYS, FINE, I'LL GO
BACK TO RAISING THOSE TARIFFS
FROM 10% TO 25% AND WE DO KNOW
THAT CHINESE BUSINESSES ON THE
GROUND THERE ARE HURTING.
WHY WOULD YOU THINK THAT'S NOT
GOING TO WORK?
>> WELL, CHINA, I THINK, WILL BE
ABLE TO OUTLAST US.
THE NEXT TRANCHE OF TARIFFS WILL
DO A GREAT DEAL OF HARM TO
UNITED STATES PRODUCTIVITY.
THEY HAVE ALREADY DONE A GREAT
DEAL OF HARM TO THE UNITED
STATES.
SO CHINA IS NOT SO WORRIED ABOUT
TAF
TARIFFS.
TARIFFS ARE NOT A GOOD TOOL.
WE HAVE MULTILATERAL
INSTITUTIONS INCLUDING THE WORLD
TRADE ORGANIZATION WHICH THE
TRUMP ADMINISTRATION HAS NOT
BEEN USING AND WE HAVE ALLIES
WHO CAN COOPERATE WITH US TO TRY
TO ADDRESS REAL CONCERNS ABOUT
CHINA.
PRESIDENT TRUMP, YOU KNOW, THERE
ARE SEVERAL PROBLEMS WITH CHINA.
ONE PROBLEM IS NOT SO MUCH OF A
PROBLEM AND THAT'S THE ONE THAT
PRESIDENT TRUMP FOCUSES ON.
THAT'S THE ONE WITH THE
BILATERAL DEFICIT.
THE TARIFFS ARE MEANT TO ADDRESS
THAT, THE INSISTENCE ON BUYING
MORE SOYBEANS AND OTHER THINGS,
THOSE ARE IMPORTANT AND WE WANT
CHINA TO BUY OUR THINGS, BUT
THOSE INSISTENCES ARE DESIGNED
TO ADDRESS THE BILATERAL
DEFICIT.
WE HAVE DEEPER STRUCTURAL
PROBLEMS.
WE EVEN HAVE A SECURITY PROBLEM
WITH RESPECT TO CHINA'S
CONTINUING GROWTH.
LIZ: WELL, OKAY.
SO YOU DON'T BELIEVE THE TWITTER
DIPLOMACY OR PRESIDENT TRUMP'S
DIPLOMACY WORK.
I THINK WE NEED TO GIVE IT A
LITTLE TIME, BECAUSE WHAT HAS
NOT BEEN WORKING HAS BEEN
EVERYTHING BEFORE THEN, AND THE
CHINESE HAVE -- SCOTT McNEELY
SPECIFICALLY SAID IT'S GOTTEN SO
MUCH WORSE.
IN FACT, HE SAID HIS COMPANY,
SUN MICRO, HELPED BUILD OUT THE
INTERNET IN CHINA AND NOW WE
KNOW THAT INTERNET IS COMPLETELY
LOCKED DOWN.
THEY SHUT OUT ALL U.S.
BUSINESSES, THEY FORCE YOU TO DO
JOINT VENTURES AND ON TOP OF IT,
THEY ARE NOT A FREE SOCIETY.
THEY ARE AN AUTHORITARIAN RULE.
I DO BELIEVE, THOUGH, THAT XI
AND TRUMP HAVE GOOD CHEMISTRY,
AS PRESIDENT TRUMP AND LARRY
KUDLOW, THEY ALL SAID THAT, AND
IT SEEMS LIKE THEY HAVE A
RELATIONSHIP OR AN
UNDERSTANDING.
HOW FAR WILL THAT GET THE UNITED
STATES AND THEM TRYING TO PUSH
THEM TO STOP STEALING I.P.?
>> I AM NOT A BELIEVER IN
CHEMISTRY IN THESE TYPES OF
NEGOTIATIONS, AND YOU KNOW,
HAVING HEADS OF STATE MEET AND
TRY TO SOLVE ISSUES IS NOT THE
RIGHT WAY TO DO IT.
YOU NEED A LOT OF SHERPA WORK TO
SET THE GROUNDWORK FOR THESE
NEGOTIATIONS.
THAT DIDN'T HAPPEN IN ADVANCE OF
THE MEETING THIS PAST WEEKEND.
SO YOU NEED TECHNICAL
SPECIALISTS, EXPERTS WHO REALLY
KNOW WHAT THE PROBLEMS ARE TO
ADDRESS THOSE PROBLEMS.
CHEMISTRY IS GREAT, IT'S
IMPORTANT, BUT THAT'S TO SOLVE
THE LAST FEW PROBLEMS AFTER THE
TECHNICAL EXPERTS HAVE THROWN UP
THEIR HANDS AND CAN'T DO
ANYMORE.
LIZ: WELL, JOEL, I THINK YOU ARE
WITH SCOTT McNEELY AND YOU ARE
ON DIFFERENT COASTS.
YOU DIDN'T GET TOGETHER ON THIS
ONE.
PRESIDENT'S TWEETING HE BELIEVES