Is the Nvidia scandal fracturing Trump's administration?

The implications of the NVIDIA scandal are reaching far beyond the tech world. U.S. Commerce Secretary Howard Lutnick is now under increased scrutiny for his department's lax oversight on the export of those AI chips to China. And some of that blame is coming from one of Donald Trump's other cabinet secretaries. Once again, I ask you, how did it slip through Congress's fingers and why? Again, Larry, as I said, many other departments were pushing for this, and commerce had the pin. U.S. Treasury Secretary Scott Bessent there in an interview just this morning, repeating a public rebuke that he made on Friday. So far, the White House is standing by Lutnik. Catherine Tai is a former U.S. trade representative who served under President Joe Biden. I spoke to her this morning about the political fallout and those calls for accountability. Ambassador Catherine Tai, thank you so much for joining us this morning. I'm delighted to be here with you. I want to start just by getting sort of your assessment of things for people that maybe aren't following the story as closely as you are. How serious is this NVIDIA scandal from a national security perspective? I think it remains unclear. Being on the outside without access to a lot of the intelligence, it's hard for the average person to say. It's even hard for someone who was in government who's out to say. But I think what I hope doesn't get lost in all of this is the incredible vulnerability of this kind of concentration in our industry. In our economy and in our politics, how vulnerable you become when you are so reliant on one company that makes one particular product that is apparently there to prop up the major growth industry in your economy. We here in the United States find ourselves in an incredibly precarious place. And it's happened in a week. Where that precarity just keeps being visited upon us again and again with the Microsoft outage for Outlook and Teams that came a little bit later in the week. And then with the FAA ground stop, where we still don't know what happened, but clearly there's some vulnerability having to do with the tech and the comm system that really just shut down our lives and our economy for a day that we're still recovering from. On that last point. With respect to resilience, I did want to comment on the fact that it's not escaped my attention, and I hope not the attention of many of my fellow Americans, that Canadian airports received a lot of those planes that had to come down out of the air. And once again, even during an incredibly tense geopolitical time between these two neighbors, the United States and Canada, the Canadians stepped up again. To help us even out the challenges that we are facing. Yeah, that's what Canadians do. As you know, Catherine Tai, in an interview on Friday, the Treasury Secretary Scott Besant expressed frustrations is a gentle way of saying it with the Commerce Department and Secretary Letnick because they had put they had delayed putting restrictions on that NVIDIA chip export. And then this whole. You know, the alleged Chinese spy who may have been involved with the former CEO. How concerning is that part of the story? And what does it tell you about what is maybe happening inside Trump's cabinet? I think that the way you framed that question is exactly the right one. It seems like none of these facts are new. And they're not they might be new to the American people. They are not new to those inside of the administration. And I don't think that it is a coincidence that all of this is coming out a week after the U.S. midterms where the administration and its party were delivered a resounding defeat by the American people. So clearly there's something going on. The other thing that is clear is that the... The potential malfeasance. And the lack of integrity, potential lack of integrity in terms of decision making around economic matters and then potentially also national security matters, that is also not new here. But the fact that it is starting to break apart inside of the administration and you have parts of the administration come out and calling out other parts, I think that is new. And I guess for those of us on the outside, we will have to wait to see what it will mean. Donald Trump, as you know, will be in Shenzhen for the APEC summit in a couple of days, and he's going to meet with President Xi. I wonder whether you think that will come up during the visit, whether it should come up, and what it means for the AI race that the U.S. and China seem engaged in. Again, I don't see how it doesn't come up, but this entire piece of the second Trump administration's policy from the very, very beginning in terms of the decision to start selling certain chips and video chips, in fact, to China, to Chinese resistance, to buying them, to potentially there being a backdoor to China receiving these chips. All of it has been really confounding to someone looking for. Principle, logic and consistency, which I know is in a strong suit of the American administration right now. But with respect to the impacts on the race between the United States and China, I hope this inflection point creates a moment for more of us here in the United States, whether you are or were a policymaker to whether you are someone who just needs to make their way through economic life every day to start interrogating. The narrative that is being sold to us that United States and China are in some kind of existential race around AI supremacy. Thank Few facts that I have gathered from people who are conversant with what is happening in U.S., the U.S. industry and in China indicates to me that what the United States and China are pursuing with respect to A.I. are very different and that at the very least, you. even if China is not doing this in a way that. The United States would or ought to, there is at least regulation of AI that is happening in the PRC that is not happening here in the United States. I hope that this can be a moment where the rest of us can break through some of what is actually happening to examine how the United States economy is maybe being hijacked by a certain set of interests and what can we do about it. So interesting. I hope I can end on a question related to your previous job about trade, because yesterday the prime minister was asked about where things are at. I gather there's been this conversation with him and the president and the chief of staff. But he also said that he's not going to settle for a deal with the U.S. if it is not consistent with a viable Canadian auto sector. Obviously, things have changed because of the midterms. What does that comment from our prime minister tell you about the likelihood of a deal? You know, I think the auto sector is a natural focus point for whether or not this is going to be a good deal. But I wanted to raise two other parts of the USMCA conversation to make sure that they don't get lost in all of the high drama and the noise. The first one has to do with forced labor and collaboration between the North American partners, the United States, Mexico, and Canada around... Ensuring that the products of forced labor don't enter into the North American economy. That is something where Canada and Mexico are unique in the global economy. They have, along with the United States, a commitment to each other to ban the importation of forced labor products from North America. That's the first thing. And I think that that's something we shouldn't lose sight of. The second piece is that in the current version of the U.S.-Mexico-Canada agreement, what you call CUSMA, that digital chapter needs very careful scrutiny. I know the kinds of things that are happening in Canada, Tumbler Ridge, the same kinds of harms that we have been experiencing in the United States, but it's coming as a result of. Careless, irresponsible technology advancement with no regulation. The attempts by Canadians to hold the company in question accountable will be impacted by commitments that are in that digital chapter, in particular, a provision that requires Canada to have the same kind of tech platform impunity provision that we are suffering from in the United States. And I hope that. Prime Minister Carney and the Canadian people have their eyes trained on those parts of the deal too. Ambassador Tai, always nice to speak with you. I appreciate your time again today. Thank you so much, Rosie.