STREET.
WE WANT TO LOOK AT THE
CONNECTION TO U.S./CHINA TRADE.
WE'RE WAITING FOR THE ONGOING
TRADE TALKS TO CONTINUE WITH
UNCERTAINTY OVER WHAT HAPPENS
NEXT THE TARIFF NEGOTIATIONS.
THIS COMES AS HUAWEI IS SYNING
THE U.S. GOVERNMENT OVER --
SUING THE U.S. GOVERNMENT OVER
THE LAW PASSED LAST YEAR WHICH
BARS THE COMPANY'S EQUIPMENT
FROM CERTAIN NETWORKS.
I SPOKE WITH JOHN BOLTON.
HERE'S WHAT HE SAID ABOUT THE
LAWSUIT.
WHAT'S YOUR REACTION TO THE
LAWSUIT AGAINST THE U.S.
GOVERNMENT?
>> THERE ARE A COUPLE OF ASPECTS
TO THIS.
YOU
NUU
NUMBER ONE, THE UNITED STATES AS
WELL AS OTHER COUNTRIES, ALLIES
AND FRIENDS OF OURS, SOMETIMES
BACK DECIDED NOT TO PROCURE
HUAWEI EQUIPMENT FOR OUR
NATIONAL SECURITY RELATED
TELECOMMUNICATIONS SYSTEMS AND I
THINK FOR VERY, VERY GOOD
REASON.
THE JUSTICE DEPARTMENT ALSO
INDICTED THE CHIEF FINANCIAL
OFFICER OF HUAWEI.
THAT WAS NOT A POLITICAL ACT
EITHER.
SHE WAS ACCUSED OF FINANCIAL
FRAUD.
THE EXTRA DIGS
THE EXTRADIIGS
THE EXTRADITIS
THE EXTRADITION PROCEEDINGS HAVE
BEGUN IN CANADA.
IF AN AMERICAN COMPANY WITH AN
AMERICAN CFO HAD DONE WHAT THE
JUSTICE DEPARTMENT ACCUSED
HUAWEI OF, WE WOULD THROW THE
BOOK AT THEM, AS SIMPLE AS THAT.
MARIA: JOINING US NOW IS AUTHOR
GORDON CHANG.
GOOD TO SEE YOU.
THANK YOU FOR JOINING US.
>> THANK YOU.
MARIA: WHERE ARE WE ON THIS?
SAY WANT TO GET YOUR TAKE ON
WHETHER OR NOT THIS BOEING
GROUNDED SITUATION THAT CHINA'S
GROUNDING THE 737-8 JET -- MAX
JETS IS ANYTHING TO DO WITH THIS
TRADE STORY.
>> ON BOEING, FIRST OF ALL, I
THINK IT IS A SAFETY ISSUE.
YOU'VE GOT TO REMEMBER THAT
CHINA HAS A BRAND-NEW COMPETITOR
FOR THE 737 MAX SERIES AND
THAT'S THEIR KOMAX919 WHICH IS
ABOUT TO BE SOLD.
SO I THINK CLEARLY THAT'S IN THE
BACK OF THE CHINESE MINDS WHICH
IS THE REASON WHY THEY WERE
AMONG THE FIRST TO ACTUALLY
GROUND THE PLANE.
SO THERE ARE POLITICAL
CONSIDERATIONS AS WELL AS SAFETY
ONES.
MARIA: WHERE ARE WE ON A DEAL?
>> WHO KNOWS.
IT CHANGES DAY BY DAY.
I ACTUALLY THINK THAT EVERYONE
WANTS A DEAL BUT A DEAL'S NOT
GOING TO STAY TOGETHER BECAUSE
THE COMMUNIST PARTY GENETICALLY
CANNOT HONOR TRADE OBLIGATIONS.
WE'RE GOING TO SEE A SERIES OF
DIFFICULT, I THINK DISCUSSIONS
WITH THE CHINESE BECAUSE THEY'RE
NOT GOING TO ENFORCE IT AND
WE'RE GOING TO WANT TO GO BACK
AND SNAP BACK TARIFFS AND ALL
SORTS OF THINGS.
WHAT WE SHOULD DO IS KEEP THE
TARIFFS ON UNTIL THEY ACTUALLY
STOP STEALING OUR STUFF AND THEY
STOP THESE TRADE VIOLATIONS
WHICH HAVE GOTTEN WORSE UNDER
XI-JINPING.
>> DO YOU THINK THE TRUMP
ADMINISTRATION IF IT DOES A DEAL
AND THE PRESIDENT IN PARTICULAR
ARE KIND OF LOSING THIS
NEGOTIATION IF THEY GO AND DO A
DEAL WITHOUT STRONG ENFORCEMENT
MECHANISM,
MECHANISM HAVE THEY GIVEN IN?
>> OF COURSE.
I DON'T KNOW IF THEY'RE GOING TO
DO IT.
ON THE OTHER SIDE OF THIS WE'VE
GOT A LOT OF DEMOCRATS RUNNING
FOR PRESIDENT AND THERE ARE
THREE STATES, WISCONSIN,
MICHIGAN, PENNSYLVANIA, YOU'VE
GOT A LOT OF BLUE COLLAR WORKERS
THERE.
THEY'RE GOING TO SAY I'VE BEEN
BETRAYED, IF THE PRESIDENT DOES
THAT.
I'M NOT GOING TO RUSH TO
JUDGMENT AND SAY THE PRESIDENT'S
GOING CAVE.
I THINK THERE IS A RUN OF STUFF
ON THE OTHER SIDE THAT WILL
FORCE HIM TO DO THE RIGHT THING.
>> IF A DEAL DOESN'T GET DONE,
THEN EVERYBODY'S SAYING WHAT'S
GOING TO HAPPEN TO THE MARKET.
IT'S LIKE A LOSE, LOSE SCENARIO
HERE.
>> HE CARES VERY MUCH ABOUT THE
STOCK MARKET.
MARIA: HE CAN'T CAVE ON THESE
ISSUES.
THERE'S BEEN A TIPPING POINT IN
THIS SUBJECT.
PEOPLE UNDERSTAND WHAT CHINA HAS
BEEN DOING.
PEOPLE UNDERSTAND HOW THEY'RE
SUCKING UP OUR INTELLIGENCE AT
EVERY POINT, WHETHER IT'S
THROUGH ACADEMIA OR ACQUISITIONS
OR JUST TRANSFERRING TECHNOLOGY.
HE CAN'T CAVE, JUST FROM WHAT
YOU SAID, JUST FROM THE
CONSTITUENTS IN ALL THOSE
STATES.
>> GOING BACK TO HUAWEI, THIS IS
A FIGHT FOR THE FIRST HALF OF
THE 21st CENTURY WHEN YOU
COMBINE 5G AND A.I. AND HUAWEI
IS 5G.
CLEARLY, THEY HAVE BEEN ENGAGING
IN ACTIVITIES LIKE DOWNLOADING
DATA FROM THE HEADQUARTERS OF
THE AFRICAN UNION FROM 2012 TO
2017 AND THE CHINESE DID THAT
WITH HUAWEI EQUIPMENT THAT THEY
DONATED TO THE A.U. WHEN THEY
GAVE THEM THE BUILDING.
CLEARLY, THIS IS NOT SOME SORT
OF THEORETICAL ISSUE.
THIS IS SOMETHING THAT THE
CHINESE HAVE ALREADY BEEN DOING.
WE'VE GOT AN FTC CASE AGAINST
QUALCOMM.
THE STAR WINS ON
THE STAR WITS ON
THE STAR WITNEON
THE STAR WITNESS ON THE FIRST
DAY OF THE TRIAL WAS HUAWEI.
>> WE'VE GOT WEAK CAR SALES DATA
OUT OF CHINA OVERNIGHT.
WHAT'S YOUR ASSESSMENT OF HOW
THE ECONOMY IS DOING AND HOW
MUCH PRESSURE IS ON THE CHINESE
TO GET A DEAL DONE.
>> I THINK THERE IS CERTAINLY A
LOT.
THE CHINESE ECONOMY PROBABLY
STARTED TO CONTRACT IN DECEMBER
WHEN YOU START LOOKING AT NOT
ONLY CAR SALES WHICH ARE DOWN
13% IN DECEMBER --
MARIA: CONTRACT OR GROW SLOWER?
>> NO, NO, THIS IS CONTRACTION.
JANUARY AND FEBRUARY THEY WERE
DOWN, WHICH MAKES MONTHS SEVEN
AND EIGHT WHAT'S
AND EIGHT.WHAT'S
MARIA: WHAT'S THE 6% NUMBER,
CHINA SAYS THEIR ECONOMY IS
GROWING 6%.
>> YOU HAD A WELL-KNOWN CHINESE
PROFESSOR IN BEIJING CREATED A
SENSATION ACROSS CHINA WHEN HE
SAID LOOK, OUR ECONOMY'S GROWING
NO MORE THAN 1.67 AND IT MAY BE
CONTRACTING.
YOU LOOK AT CAR SALES, THEY
CLEARLY SHOW THAT RETAIL SALES
WERE NOT UP IN THE MONTH.
YOU SAW EXPORTS AND IMPORTS
CRUMBLE IN DECEMBER.
THEY WERE DOWN IN THE COMBINED
JANUARY AND FEBRUARY PERIOD.
MARIA: THAT'S PASS
MARIA: THAT'S FASS
MARIA: THAT'S FASCINATING.
>> YOU LOOK AT THE PMIs FOR
CRITICAL MANUFACTURING SECTOR,
THEY'VE BEEN NEGATIVE
CONSISTENTLY.
>> HOW MUCH PRESSURE IS ON
XI-JINPING TO GET A DEAL DONE?
>> I THINK THERE'S A LOT.
THERE'S A LOT OF SNIPING FROM
THE SIDELINES.
HE OWNS THE TRADE WAR.
HE OWNS THE SLUMPING ECONOMY.
AND WHEN YOU'RE CHAIRMAN OF
EVERYTHING AS THE PEOPLE SAY,
HE'S ACCOUNTABLE FOR EVERYTHING.
SO HE COULD ACTUALLY BE I THINK
IN A VULNERABLE POSITION RIGHT
NOW BECAUSE OF THESE TWO ISSUES.
>> HE'S PROMISED HIS PEOPLE
PROSPERITY.
WHAT HAPPENS IF THEY DON'T GET
IT?
WHAT'S THE OUTLOOK FOR SOCIAL
UNREST?
MARIA: UNREST IN THE STREETS
WHICH IS WHAT HE DOESN'T WANT.
>> THIS IS A BIG YEAR FOR
SENSITIVE ANNIVERSARIES, 100
YEARS OF THE MAY 4th MOVEMENT,
706 YEARS SINCE THE FOUNDING OF
THE PEOPLE'S REPUBLIC.
MARIA: ARE THEY GOING TO PUT AN
ENFORCEMENT ISSUE IN THERE?
HOW WILL THEY ENFORCE THAT CHINA
KEEPS PROMISES.
>> THERE WILL BE AN
UNSUBSTANTIAL ENFORCEMENT
PROVISION LIKE SNAPBACK TARIFFS.
THAT'S NOT THE WAY WE NEED TO
GO.
THE CHINESE VIOLATE EVERY
AGREEMENT.
MARIA: KEEP THE TARIFFS IN
PLACE AND --
>> WE'RE PUTTING TARIFFS ON
ALREADY.
WHY DO YOU NEED SNAPBACK?
>> WE SHOULD BAN THE IMPORT OF
PRODUCTS THAT BENEFITED FROM THE
THEFT OF U.S. INTELLECTUAL
PROPERTY, 3 TO $400 BILLION A
YEAR, SOME SAY MORE.