U.S. Pauses Weapon Sales to Taiwan | China in Focus

Welcome to China In Focus. I'm Tiffany Meyer. Our top story... The U.S. Navy chief says a $14 billion arms sale to Taiwan is on hold due to the Iran war. Could there be other factors at play? I think there is a political aspect to this. Suspected NVIDIA chip smuggling in the spotlight. Taiwan is cracking down on illicit advanced chip exports to China. A leaked database is exposing a Chinese surveillance system that appears to track foreigners in real time with one journalist finding a detail filed made on her. And a secret data pack is in the works between Japan and the Philippines. How it could create a powerful defense triangle with the United States. The acting secretary of the U.S. Navy said that a $14 billion arms sale to Taiwan is on pause because of the war in Iran, though Taiwan says it hasn't been notified yet. NTD's Juliet Song has more on that. A remark on U.S. arms sales to Taiwan is making waves. We've encouraged Taiwan to buy arms from us and all of a sudden there's a pause. What are you hearing from the Taiwanese about the pause? Chairman, I have not heard, I have not spoken to the Taiwanese. However, we are, we have done some military, foreign military sales to them. And it's just right now we're doing a pause in order to make sure we have the munitions we need for epic fury, which we have plenty, but we're just making, making sure we have everything. But then the foreign military sales will continue when the administration deems necessary. On Friday, Taiwan said there have been no updates on whether the U.S. would modify the arms sale. A spokesperson said the most pressing issue now is ensuring Taiwan's special defense budget review moves forward smoothly. Retired Marine Colonel Grant Newsham, a senior fellow at the Center for Security Policy, said he's not entirely convinced the pause on the $14 billion arms sale is due to the Iran war. We are firing off huge amounts of weaponry and we have allowed our industrial base and our ordnance manufacturing capabilities to decline so badly over the last 30 years that we don't have enough of everything. But we do have things in our arsenal. So it isn't as if we've got nothing else. And if we don't approve this arms sale to Taiwan, we just won't have enough. I'm not sure of that. So I'm not entirely convinced. Newsham added that there may also be a political aspect to the move. They don't want to get the Chinese mad at them, as amazing as that is, because this administration hasn't been all that obvious in its accommodations of the People's Republic of China. In fact, in many respects, if most respects, it has not. And during the first Trump administration, it was very good on Taiwan and very willing to tell the Chinese, no, no, or even just ignore the Chinese. President Trump said last week that U.S. arms sales to Taiwan are a very good negotiating chip in talks with China. Newsham says there are a range of things the president may want from China in return. Well, he wants the Chinese to, one, stop supporting our enemies, stop doing things that hurt us, to stop using rare earth mineral exports, pharmaceutical exports and other chokeholds that they have over supply chains against us. He wants the Chinese to almost completely transform. Newsham adds that using the term negotiating chip doesn't necessarily mean Trump sees Taiwan as dispensable. And he does like to keep all positions open, it seems, as he's negotiating. And it doesn't mean he's going to make a concession or actually use it as any sort of concession. But he does like to have, I think, at least a sort of a mental sort of opening in terms of what he might be able to use in a negotiation, and partly to see how the other side responds, to see what they demand, demand that he do and how they view a particular item as a point of leverage or something that they want something for or something they're willing to concede. So he keeps his options open. And this may just be a reflection of that, rather than any real belief on President Trump's part that Taiwan is a dispensable bargaining chip. Even though the U.S. Navy chief said foreign military sales will continue when the administration deems necessary, some in Taiwan see the temporary suspension as a sign that the U.S. isn't reliable. They also worry the U.S. may be giving up on Taiwan. Well, of course, that isn't true. But that's the perception in some quarters in Taiwan. And there's people who may actually genuinely believe it. But there's also many of them, particularly the pro-Chinese, pro-Chinese communist parts of Taiwan's political class, particularly the KMT, of course, and the TPP to an extent, that they would use this as a way to attack the United States, to create doubts within the broader public in Taiwan about the American support, about their reliability. So it's being used as a political tool. A former Taiwan bureau chief of a Japanese newspaper said Beijing benefits from Taiwanese casting doubt on its allies, as it could weaken morale on the island. He says Taiwan shouldn't be so focused on whether the U.S. would step in to help, and that a more important question is whether Taiwan is prepared to defend itself. Julie Yeh Tsong, NTD News. President Trump says he would call Taiwanese president for a talk. An expert on China believes Trump may be using the potential call as a strategic card to pressure Beijing. When Trump says he will call Lai Ching-te, this is a card which he can play or he can choose not to play. Right now, he is simply showing the card, saying that he has this card and he can play it, and that pushes Beijing to urgently come out and try to engage further with Trump in negotiations. If the call takes place, Trump would become the first sitting U.S. president to speak with a Taiwanese president in decades. NVIDIA's high-end AI chips were smuggled from Taiwan to China. The island is investigating its first major case of this kind. It comes as Washington continues tightening restrictions on advanced chip sales. Taiwanese prosecutors are looking to detain three people accused of forging documents to ship NVIDIA-linked AI servers to China, Hong Kong and Macau. Only their surnames have been provided publicly, so their identities could not be verified. Officials Wednesday say the servers were falsely labeled to sidestep U.S. export controls on advanced chips. The case involves about 50 servers made by U.S.-based Supermicro. It marks Taiwan's first major crackdown of its kind, under pressure from Washington to enforce chip export controls more aggressively. Meanwhile, NVIDIA CEO Jensen Huang told CNBC the company has, quote, largely conceded China's AI chip market to Huawei. He says Chinese firms are now filling the gap left by U.S. restrictions, which have limited NVIDIA's access to the market. China is tightening controls on chemicals tied to fentanyl production in what appears to be another sign of cooperation with the U.S. The move comes just days after a summit between President Trump and Chinese regime leader Xi Jinping. China announced Friday that three chemicals will now need special approval before they can be shipped to the U.S., Mexico or Canada. Officials say the chemicals are key ingredients used to make fentanyl, the synthetic opioid linked to tens of thousands of overdose deaths in America. Chinese state-run media says several agencies in Beijing will oversee the new restrictions as part of the country's expanded anti-narcotics campaign. The announcement comes after recent reports of joint drug crackdowns in the U.S. and China, including operations in Florida, Nevada and two Chinese provinces. The crackdown also comes after years of pressure from Washington, which accused Beijing of failing to stop the flow of fentanyl precursor chemicals. Last year, President Trump imposed tariffs on China tied to the fentanyl dispute. Recent cooperation following the Trump-Xi meeting signals a possible shift in tone between the U.S. and the Chinese regime on curbing fentanyl. A leaked database is offering a rare look inside China's surveillance system. It's tracking foreigners the moment they enter the country. The system, known as the Dynamic Control Platform for Overseas Personnel, maps foreign visitors' movements, contacts and even daily activity. One of those profiles belongs to Sophie Yen, a reporter for The Telegraph. She uncovered details from a record created about her inside the database. The details are really minute. For some of these individual records, you see things like 78 times spotted at this one specific intersection. Some of these are cameras, presumably, at the entrances of a supermarket, at different subway stations. I mean, it's very, very specific. It's really fascinating and a little bit creepy. A cybersecurity analysis by Annette Ascari found the platform collects data from surveillance cameras, facial recognition, visa records and mobile apps. It uses that information to build real-time profiles of foreigners inside China. The system flags journalists and other so-called sensitive individuals for heightened monitoring. It's also mapping social connections between people. Researchers say the platform appears to date back to at least 2021, though most activity logs are from 2023. China is using millions of surveillance cameras to monitor Chinese citizens, even in small villages. Another influential summit is locking into place in the Indo-Pacific next week. Philippine President Ferdinand Marcos Jr. is heading to Tokyo on Tuesday for a four-day state visit. He is scheduled to meet with Japan's emperor and prime minister. The agenda is expected to focus on securing critical energy supply chains, defense exports and boosting military ties. New reporting reveals a major defense agreement is in the works. Nikkei Asia reports Tokyo and Manila will formally begin negotiations to exchange classified security intelligence. The U.S. already has a similar agreement with the Philippines. If finalized, the new pact would establish a powerful trilateral intelligence framework among the three countries. It comes as the Philippines continues to face off with Beijing over maritime claims in the South China Sea, just miles from Taiwan. Japan has already exported surveillance radar systems to the Philippines. The two countries are also discussing a deal for Japanese naval vessel exports. China is targeting Japan. Japan is facing disruptions in critical materials from China. Beijing has now restricted shipments of key rare earths for several months. The move comes amid rising tensions over Taiwan, raising concerns China is once again using key resources as geopolitical leverage. Key metals can be used in advanced manufacturing, including semiconductors, electric vehicles and defense systems. Japan is the largest rare earth magnet maker outside China, but remains heavily dependent on Chinese imports. Trade data shows exports to Japan have mostly stopped since December, with only limited shipments still going through. The timing follows a diplomatic dispute over Taiwan, after Japan's prime minister suggested Japan could intervene militarily if China attacks Taiwan. Japan moved to build stockpiles and diversify its supply after a similar shock in 2010, including investments in Australia. Much of the global supply chain remains exposed to China's dominance in critical rare earth minerals. Japan's trade minister is currently in China, where he's set to hold talks Saturday with Beijing officials at the APEC forums. He's the most senior Japanese official to visit Beijing since the dispute began in November. Chinese military companies getting help from Wall Street, the House Select Committee on China says JPMorgan Chase, Bank of America and Morgan Stanley are complicit. The committee publishing a report of its investigation on Thursday, it says JPMorgan and Bank of America underwrote the Hong Kong IPO of the world's largest battery maker, Contemporary Amperex Technology. That's despite the Pentagon designating Contemporary Amperex as a Chinese military company with ties to forced labor. The committee says this helped the Chinese company raise billions of dollars. In a separate case, the panel also finds that Morgan Stanley sponsored the IPO of Zijin Gold International. The report says Zijin Gold parent company and subsidiaries are on a sanctions list aimed at preventing forced labor in Xinjiang. The panel says Wall Street proceeded with the deals despite identifying national security risks. Committee chairman John Molinar says quote American banks must not help Chinese military companies raise money because in doing so they provide not only access to funding but also legitimacy and credibility to companies that are helping our adversary build up its military. Coming up, how should the US view the back-to-back visits in Beijing and how recent moves in Venezuela, Iran and Cuba weakened China? Former National Security Council chief of staff Alex Gray joins us to discuss. Contrary to kind of the mainstream media conventional wisdom, I think China's been on a very significant six-month losing streak. More on that after the break here on China In Focus. China's CG rolling on the red carpet for both the US and Russia. What do the back-to-back visits signal on the geopolitical stage and how have moves in Venezuela, Iran and now Cuba weakened communist China? Joining us now to unpack all this and more is Alex Gray. He's a senior fellow at the Atlantic Council and former National Security Council chief of staff. Alex Gray, thank you so much for joining us. Great to have you back on the show. Yeah, thanks for having me again. First, what did you make of the back-to-back summits in Beijing? First President Trump and then Russia's Putin. Is that a signal of any strategic shifts or kind of status quo? Well, I think it's definitely a decision by the Russians that they felt incredibly threatened in their position by what President Trump was doing in Beijing. Look, the Russians are in a horrible spot right now on the battlefield in Ukraine. They're watching their former puppets in places like Mali, the overrun. They're having a very tough time geopolitically over the last two months. Vladimir Putin had his entire parade, his victory parade basically cancelled because of the Ukrainian missile strikes. So Donald Trump going to Beijing, showing strength on the international stage. Putin has to go and try and shore up his own position shortly thereafter. I read it as a tremendous sign of weakness from Moscow. There's been a lot of focus on NATO and NATO's role. There's actually NATO's route speaking recently about cooperation with the Indo-Pacific for Japan, South Korea, Australia, and New Zealand. Is there a sense of whether or not NATO would expand into the Indo-Pacific area to counter China's threat? Yeah, I think NATO needs to focus on their core mission, which is to be the security guarantor in Europe. When I was in government, NATO had big aspirations to do things in the Indo-Pacific. NATO, particularly the Western Europeans, can barely handle their obligations toward Russia, towards transnational threats, towards illegal migration coming in from the Middle East and North Africa. They need to focus on their near abroad and making sure that they can become the primary line of defense for the continent rather than relying on the United States. In my view, Tiffany, what we need to focus on is an American shift to the Indo-Pacific because we're the only ones who can truly counter China's malign activity and the Europeans and NATO need to build up their capacity to manage the short-term threat of Russia. It does seem, at least here at home, there's been more awareness of that. There's been a lot of countering, whether that's Chinese student spies in different places, especially the University of Michigan has had a lot, NASA, different departments as well. It does seem it's an ongoing problem, but there does seem to be, at least now, more awareness on that. Speaking of Chinese influence, though, there's been focus on the Chinese spy bases, as some are calling it, in Cuba. Of course, right now there's a lot of focus on Cuba. Some, if you zoom out a bit, are looking at first Venezuela, Iran is ongoing, Cuba perhaps on the horizon, but the bigger picture being that's to destabilize or threaten communist China, ultimately. How are you reading that? I think China, contrary to the mainstream media conventional wisdom, I think China's been on a very significant six-month losing streak. Let's think about it. Venezuela, the Maduro regime had been one of their puppets for decades. That's gone. They were getting discounted oil, cheap oil from Venezuela. That's gone. Now the United States is working collaboratively with the new Venezuelan leadership, and Venezuela is becoming more oriented toward the US and certainly closed to communist China. You look at Cuba, the United States is having unprecedented high-level dialogue in Cuba with the ultimate goal, and I feel very confident this is going to happen, the ultimate goal will be to have the Trump corollary to the Monroe Doctrine, which was enshrined in the National Security Strategy last year, which says that non-hemispheric towers like China and Russia must be excluded from the Western Hemisphere. I have no doubt that whether it's the surveillance station you're talking about, whether it's other forms of Chinese influence, that is going to end as part of this process that we're undertaking with the Cuban regime. Finally, you look at Iran. That is not, contrary again to the conventional media narrative, that is a massive Chinese defeat for two reasons. One, it has revealed to the world that China's a terrible ally. China has done nothing to stand up and support Iran, despite its peacetime claims that it'll be there for Iran. China is suffering from the lack of energy, and the whole world is watching China's vulnerability to seaborne trade, and what happens if China does not have access to external energy and fertilizer? China's fundamental economic weaknesses are being exposed on a huge global scale. The last thing, Tiffany, is that when you look at China as a bad partner, a bad ally, just a couple of years ago in the Biden administration, US traditional Gulf Arab allies like the UAE and Saudi Arabia were beginning to build ties with China because they weren't sure if the US was going to continue to be a reliable security guarantor. That is gone. The UAE said publicly that we are their number one security partner in the world. China's influence in the Middle East is on the decline, and its vulnerabilities have been revealed for all the world to see. So I think we are in a very, very unique moment where China's global clout is actually in the descent. Definitely huge strategic moves here. Speaking of the US national security strategy, once the Western Hemisphere is cleaned up, what do you see as perhaps the next focus? There's some reporting right now, at least from South Korean media, that China's Xi Jinping could visit North Korea as early as next week. Could North Korea be one of the next focuses? Well, look, I think just to unpack for your viewers what the NSS, what national security strategy said, number one was defend the American homeland. Number two was to prevent malign foreign actors from using the Western Hemisphere as a base to destabilize our homeland, to threaten our homeland. And the third was to project power into the Indo-Pacific to keep the Chinese from consolidating power in Eurasia in such a way that they could threaten the United States, they could threaten our hemisphere, and become the predominant power in the Indo-Pacific. So we have to balance against that. The President has shown for his first term and his second term, he has no qualms talking to leaders of all sorts, whether we like them or agree with them or not. I think there's certainly room for a renewed dialogue with North Korea, which is something the President has been interested in for a long time. But the bottom line is, you know, our number one interest, and this is on the Korean Peninsula, this is Southeast Asia, the Pacific Islands, our number one goal in the Indo-Pacific is to find ways to balance against an aggressive Chinese Communist Party that wants to dominate the region and the globe. Everything springs from that. And whether it's our policy toward North Korea, our policy toward Vietnam, our policy toward India, it all surfaces, it all circles around the fundamental challenge of keeping Beijing from becoming the dominant regional power. Well, Alex Grassois, thank you so much for joining us. Thanks for having me, Tiffany. That's all for today's China In Focus. Tiffany Meyer, if you have any feedback on the show, or have something you'd like to see us cover, send us an email at ChinaInFocus at ntd.com. We'd love to hear from you. For on-the-clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you soon.