A NEW REALIZATION’: Chang says China is threatening Europe over this

China's biggest exporters are rushing to make deals and get orders out before President Trump's next tariff deadline. Beijing reporting its exports jumped 5.8 percent in June. Exporters trying to take advantage of the trade truce with the U.S. but countries are scrambling to make trade concessions with the president by August 1st. Global story. China facing an August 12th deadline. Trade tensions also building between Beijing and the EU. They exchange accusations and import curbs over each other's trade practices. Joining me now is Gavestone Institute senior fellow Gordon Chang. And Gordon, help me kind of parse the rhetoric out of the Europeans this morning. Because Italy's foreign minister, who by the way is going to be in D.C. today, he gave an interview this morning and he and others have talked about maybe the EU working with the Asia-Pacific countries, aka China. Let's read between the lines here. Working with India, you know, because they're in this trade fight with Donald Trump. But if same time, there's tension reportedly, as I just mentioned in the intro to you, between the Europeans and China. How is this all playing out? It seems like a mad scramble. Good morning, Cheryl. And it is a mass scramble. But the one thing we're not seeing is we're not seeing the Europeans imposing counter tariffs and retaliatory measures on the United States. And that is critical because Europe especially needs the American market. They just can't replace it, especially in timeframes that would be meaningful. So, you know, that is, I think, going to be the most important thing. The other thing is that, yes, Europe can threaten to have relations with China, but China has been proving resistant on trade, as you point out. Also, there is a new realization in Brussels about how China is threatening Europe because it's backing Russia. We heard those very important comments from Wang Yi, the Chinese foreign minister, to the EU foreign policy chief about how China cannot let Russia lose. Well, that's really affecting the EU's position on trade as well. So, yes, there's a lot of noise. But at the end of the day, the most important thing is that everybody needs the U.S. consumer market. Yeah. And that's something that Donald Trump has said repeatedly, President Trump. And I want to correct myself, it was EU competition chief Theresa Ribera that said that they're looking to deepen trade agreements with India and other countries in the Asia-Pacific region. That was a Bloomberg interview this morning. And that kind of leads into this because the U.S. reportedly is putting pressure on their allies, Japan and Australia, to clarify what role they're going to play in any potential conflict between China and Taiwan. Senior Pentagon official Elbridge Colby responding directly to the Financial Times report, writing on Exquote, we at DoD are focused on implementing the president's America first common sense agenda of restoring deterrence and achieving peace through strength. That includes by urging allies to step up their defense spending and other efforts related to our collective defense. Gordon, your reaction. Well, that's a really important statement from Elbridge Colby. And the reason is that China is threatening everybody and it could happen at any moment. Now, of course, Australia and Japan, which really have been the two targets of the Pentagon when it comes to clarifying their position on Taiwan. Well, Japan and Australia have been dragging their feet. And at this moment, we have the Australian Prime Minister, Albanese, in Beijing saying all these nice things about China. Well, if he's going to do that, then I think that it's important for us to understand where he is. We have mutual defense obligations to defend not only Australia, but also Japan. And so we need to know where they will be should the Chinese, as they threaten, invade Taiwan. Yeah, well, and there's a new op-ed in The Guardian this morning that claims, quote, the world must be more wary than ever of China's growing economic power, shifting from military power to economic power. They say it matters because the aim of Beijing's autocratic regime undermine the economic and political resources of the rest of the world without tough action, its voracious appetite for resources, information and intellectual capital will eat all of us. What do you make of that, Gordon? Well, first of all, I think that's overestimating China. And yes, in a few hours, they will report Q2 GDP growth of above 5 percent. But there is this very interesting pattern of China actually over-reporting June results in order to justify a good GDP report. But the important thing, though, is that China does pose an existential threat to free societies. And yes, President Trump gets an A for opposing China behind the scenes, but we need an all-of-society defense against China. And we're not going to get it until the president of the United States talks to all of society in candid terms about China's threat. So yes, I think Western leaders need to start to get off their very nice rhetoric about China and actually be candid. And that includes the Australian prime minister, who I said is already in Beijing and saying very nice things about Xi Jinping, although the Chinese are threatening Australia at this moment. Well, that's probably, I would think, the wrong tactic to take. You know, it's peace through strength, again, as we've heard from President Trump. Liz Peake, jump in here. Good morning, Gordon. I think the question is what you referred to earlier, is China's economy, are they still so essential to Europe that Europe is going to go along with all the trade requirements and trade demands of China? In other words, today in the FT, they're talking about the EU going after subsidies. This is obviously an ongoing issue, China subsidizing lots of its own industries, particularly the automobile industry. Is the EU finally going to get tough about this? Well, the question is, is Germany going to get tough about this? And with the new chancellor, I think the answer is probably yes. And the reason is Volkswagen is having a hard time in China. Volkswagen was traditionally the car leader in China, number one, year in, year out. And now Volkswagen's ratings are slipping in China, as are Tesla's and every other foreign carmaker. So I think that that's starting to affect the way Berlin looks at this. And the way Berlin looks at this is the way the EU looks at it. So yes, I think it'll be a much tougher EU position because Germany is suffering. Gordon Chang, it's always a pleasure to speak with you. Appreciate it. Thank you so much, Cheryl.