Download Subtitles for Trump's Trade War Documentary

[Music] tonight the trade tensions are flaring up between the US and China with President Trump upping the pressure for a trade deal with China plans to increase tariffs on billions of dollars worth of Chinese goods frontline and NPR correspondent Laura Sullivan investigative perspective the forces behind the conflict we're not in a trade war we're in at economic war both here and abroad this is a great power struggle do you think that Americans should be worried oh yes Facebook and what's at stake tariffs announced by the Trump administration China is now on j-bad China has a 10-year 20-year 50-year plan they've outsmarted us they've done some things that we don't agree with we got to fix our system to compete with China we do have a chance to see a new Cold War I think it's a comprehensive confrontation that's dangerous tonight on Frontline Trump's trade war [Music] Air Force one landing at Beach Palm Beach International Airport in April 2017 president Trump headed to Mar Lago for the most important diplomatic meeting of his early presidency the kita more la goes once Trump got there as often he does he finally focus on the schedule a very large delegation of almost every relevant cabinet member yeah said hey why are we having these pygmies I want spend as much one-on-one time as possible first one president arrives Benedict within hours President Xi of China was on the ground bringing together the leaders of the world's two largest economies one of the things that President Trump believes he believes in this tolling is that personal relationships of great powers can make a difference the president's face to face for the first time [Music] there was a lot of time in the schedule with them literally 101 being together and creating the relationship that the the the two big economies needed to have with each other the leaders seemed to connect and so did the families that summit was important because the two leaders established a strong personal relationship I think the image is that the two leaders sit together and two family actually see together pregnancy and his wife had a very good in action with President Trump we've had a long discussion already and so far I have gotten nothing friendship I can see that we say okay you see President ROM is the president that we can work with and he is someone that we can talk to he's a reasonable leader and maybe he can do something the ordinary conventional u.s. leader won't do so the expectation was very high and the hope was maybe they can control the situation and they can work together to solve the problem warily but long-standing problems between the countries were reaching her crisis and despite the promising start and all the optimism within a year trump would turn on shape imposing billions of dollars in tariffs and leading the United States into a perilous confrontation the fights were nasty that came out of more Lago the most intense fights and debates in the White House were about this issue of tariffs but tariffs as a proxy to the great economic war China that we're engaged in there's no middle ground one side is gonna win and one side is going to lose and so we knew the stakes hi [Music] [Music] on the front line of the rapidly escalating trade more American companies are bracing for battle last fall I headed to southwestern Ohio President Trump had fired the first shots in his trade war with tariffs on a wide array of imported Chinese goods from electronics to furniture to steel president Trump turns up the heat on China I wanted to see firsthand how these tariffs were playing out on the ground things come to a boiling point between the two largest economies in the world tariffs are now getting too close to home Trump claimed the tariffs would help American workers boost US businesses and bring life back to places like this which for decades have been hurt by automation and more recently imports from China the tariffs on imported steel were particularly welcome news to struggling communities like Middletown where I met up with some steel workers at a local coffee shop here there used to be a mall down there you had three city parks with three city pools now there's not what did you think when you first heard that Trump was putting tariffs on steel you know it's about time I have watched the farmers get their subsidies I've watched the banks bailing out motive industry bailout and I've just watched us with it on the vine for the last 30 years do you think it's gonna help the town do you think it's gonna help your hometowns absolutely what are you expecting to see everybody always talks about jobs in America and we hear that all the time we want to see that that reality half you know you can't just depend on foreign countries for first deal we've got to make it in the United States just want China to play by the rules right that's it we don't want to be so you're saying it's not that you want your industry propped up want your industry a level playing field you want a level playing field but using tariffs to level the playing field has a flip side they've brought unwelcome consequences for many other US businesses I saw that not far from Middletown the state of Ohio could be the hardest hit by this looming trade war with Americans biggest trade at industrial Toobin steel Damon gainers in the business of buying and reselling steel we buy from a bunch of steel mills our main bread and butter is distributing steel tubing Trump's tariffs on imported steel essentially a 25% tax ended up raising the price of American steel too and that sank gainers costs skyrocketing how did you handle that did you guys eat that or did the customers eat it that's the hard part we just have to pass it along the customer our customer has to pass along to their customer and so on down the chain do you think that there'll be a point though where the the end consumer will just say I can't afford this this is too expensive yeah I I think there's always that risk and that's the thing with tariffs is are you kind of artificially messing with the price of you know what the market dictates and what people will be willing to pay people will be willing to pay yeah absolutely and I think that's the question with tariffs is it gonna do good or is it gonna do bad manufacturers like Shepard Chemical were also hit hard by the tariffs especially when China retaliated with tariffs of its own so all these tanks around here produce various metal carboxyl CEO Tom Shepard sells products to China and he also imports raw materials from China our sales to China have gone down and our raw materials from China have increased in cost big of a problem is that for you several million dollars of profit lost you know you yeah you're getting it from all sides then yeah that's right if what we're trying to do is protect American economy this is a bad way to do it but despite the uneven consequences President Trump was all in on the tariff strategy it's a strategy he's been talking about for years as far back as the late 1980s when he first tested the possibility of becoming president I guess the fame developer Donald Trump of New York back then Trump's target was Japan and its trade practices the fact is that you don't have free trade we think of it as free trade but you right now don't have free trade and I think a lot of people are tired of watching other countries ripping off the United States this is a great country he believed from the beginning that there's really nothing worse than being laughed at they laugh at us behind our backs they laugh at us because of our own stupidity and he came to see the Japanese as laughing at the United States a taking advantage of the United States by stealing the jobs by dumping product here we let Japan come in and dump everything right into our markets and everything it's not free trade if you ever go to Japan right now and try to sell something forget about it out but just forget about it it's almost impossible after Japan's economy crater Trump shifted his ire to a rising economic power China they are ripping us like we've never been ripped before if you look at Japan if you look at China where we lose a hundred billion dollars a year with China she's been saying the same thing for 30 years Donald Trump has a very binary view of life and certainly of the world and and so to confront China which he perceives as America's most important and dangerous rival and to be able to use blunt instruments against them and to come out and at least be able to say that you're a winner and they're a loser there's it's hard to imagine anything more appealing to the core of his personality please welcome the next president of the United States [Applause] [Music] by 2016 Trump's message had finally found an audience and his focus on trade in China had found its moment first time ever met Trump I was you know coming out of Goldman Sachs and and and being somebody that been in finance for a number of years I was set to be unimpressed I was actually very impressed now he didn't know a lot of details he knew almost no policy but what I found most extraordinary was when we got to the section on China which I kind of threw out there of a two-hour meeting almost 30 minutes or more was all about China we have a 500 billion dollar deficit trade deficit with China and you got to remember a lot of this he was just reciting everything he'd heard from Lou Dobbs we're talking about a trade deficit of 315 billion dollars last year with the Chinese he's been a guy that's watched Lou Dobbs for 30 or 40 years and the only thing he had formed as a worldview was China because we can't continue to allow China to rape our country and that's what they're doing it's the greatest theft in the history of the world he talked in this kind of vernacular that kind of hit people in the gut and particularly we talked about trade and jobs and job shipping overseas was his message to these people on trade china's to blame yeah the messages are very simple is that the elite shipped of jobs overseas and I'm gonna bring him back Thank You Indiana that message helped propel Trump to the presidency and once there he assembled his team of advisers on trade to oversee economic policy he brought in the former president of Goldman Sachs Gary Cohn the job I had in the White House was to convene everyone who basically had an opinion on an economic topic and try and come up with a recommendation or two or present to the president completely diametrically opposed opinions and allow the President to make a decision in the Roosevelt Room we would have a trade meeting every Tuesday and then we would take some version of that into the Oval and a smaller group if you take all the other nastiness and the things like the Paris Accord and TPP all this other stuff roll it up and put it to the factor of 10 they don't compare to these nasty trade mix from the start the weekly trade meeting surfaced deep divisions among Trump's advisors over how to deal with rising economic tensions with China the two camps came to be known as the globalist and the Nationalists on the one side the globalist included former Wall Street executives like Gary Cohen and Steve minutia on the other side the Nationalists included Bannon along with Robert light Heiser and Peter Navarro a hawkish economist whose film death by China caught Trump's attention facing America it's increasingly destructive trade relationship with a rapidly rising China the two camps disagreed sharply over whether aggressive measures like tariffs would help or hurt the American economy we had a mindset that to be a great power you know it wasn't just your military he had to be a great economic power and a great power had to be built upon it had to be built upon a great manufacturing base to make America great again you've got to bring manufacturing back to the country some of the people that are very Pro tariffs right now make an argument that the United States has lost its manufacturing base and that this is actually real people's lives at stake well the data would show manufacturing jobs have gone down in the United States so I understand where they're saying they're the flip side is factory output or what we produce the Unites States has actually gone up there's this thing called technology that's happened in the United States factories have changed but we have also created millions upon millions of jobs in new industries that didn't exist 20 years ago the split between globalists and nationalists was about more than just industrial policy it reflected a fundamental difference over how best to confront China and what each saw as the endgame nationalists said this is a great hegemonic you know great power struggle it's definitely two systems that couldn't be more radically different right and and one of these two are gonna win we need not just a trade deal we need fundamental structural changes in their economy some of your former colleagues have said exactly where you are and said this is a winner-takes-all so yeah I understand that and that's the Nationalists versus the globalist the global is okay as a globalist as a market practitioner I think that we can have a globalized world that works well the question is can we both be complementary to each other I think the answer is yes these arguments would get quite personal that we would get through the facts quickly because the two sides is never gonna agree what the facts are they know we get they don't get personal from time to time there were people that try to use unfit noted undocumented facts it's my job to get rid of the undocumented unfit known in facts and make sure that those don't enter the Oval Office and a couple of times we had blow ups I mean there was a blow-up in the Oval Office that Kelly had done we kind of were first a couple of days general killers there we have to exit and go back into the Roosevelt Room and it's kind of a it's kind of in your face with a couple of people where was Trump while these two parties are on different sides he has a default position his default position is you know build the wall his default position is engaged gauge time in the economic war you know get terrorists but he zone let you fight it out president Donald Trump arrived in China for his first official visit there with the battle between the two camps playing out Oh Trump headed to Beijing in November 2017 it was a royal welcoming [Music] filled with pomp and ceremony and the two leaders seemed ready to work together their negotiators agreed on a plan for China to buy billions of dollars in US products like beef and natural gas but behind the celebrations Trump's nationalists had devised a different plan we had a couple of tricks up our sleeves vara and I start to dust off the the the secret weapon we had to call a national security emergency kind of what we're doing on the border right now did you use the national security emergency powers that are invested in the Defense Department to really start to go after steel aluminum maybe autos but eventually technology it's time to get it on by March 2018 the president was ready to take action thank you very much everyone we have with us the biggest steel companies in the United States they used to be a lot bigger but they're gonna be a lot bigger again executives from the steel and aluminum industries were hastily gathered in Washington they were all called to the White House had the meeting and at that time the president announced what he was going to do next week will be imposing tariffs on steel imports and tariffs on aluminum what was the reaction the reaction was a surprise it'll be 10% for aluminum this moment was a seminal moment in trade policy because it's the most aggressive use of this kind of trade law approach ever this is done under the theory of national security we need it we need it even for defense if you think I mean we need it for defense we need great steel that steel was important to our national security broadly military critical infrastructure and the economy as a whole and that had never been done before the sweeping steel tariffs also surprised America's closest allies it turns out those tariffs hurt u.s. allies more than China that's because allies like Canada sell much more steel to the US than China does at the State Department the top China specialist quickly started getting complaints what were some of the United States allies saying well certainly the allies were very much taken aback that they were the target of the steel tariffs they don't understand the focus on tariffs they don't understand the focus on deficits they don't understand the rejection of the international trading you know norms and institutions they don't understand the u.s. is rejection of global free trade since this is the system that we basically set up Trump had up ended decades of US trade policy determined to start a fight he felt was his in several meetings even in high-level meetings with the president some foreign leaders you know offered they said we want to help with China we want to do this together with you but he seemed to think that this was his fight alone and that he wanted to do it mano a mano at that point were you disappointed were you frustrated if you adamantly believe that something doesn't make sense you're personally disappointed but ultimately it's not your decision to make within a month Cohen would leave the White House the Nationalists had one president Trump turning tough trade talk into action new tariffs announced by the Trump administration on 50 billion dollars worth of Chinese exports China is now punching back with an equal amount of tariffs on American exports President Roh has just slapped tariffs on another 200 billion dollars of Chinese exporting the biggest trade war in economic history this was the terrifying that had first brought me to Ohio its what was dominating the headlines and the politics but the view was much different 7,000 miles away in China I arrived in Shanghai last fall in the middle of what was being billed as the world's largest import Expo a week-long trade extravaganza that drew more than a million people it had been eight months since Trump's first tariffs and I wanted to hear what businesses at the expo had to say about the trade war thousands of companies from all around the world were here focused on selling their products in the growing Chinese market US companies have been doing business here for decades and seemed unfazed by the trade war China is going to be number one market behind perspective for GE or everybody with one point four billion customers China's a market us companies can't resist we've been in the China market for 34 years we have over 40 wholly owned or a joint venture subsidiaries in the markets so very very important to define it seem like business as usual so what do you think the trade war will do that's another thing you really just have to not worry about because today I met myriads of Chinese business people and then and women that look you in the eye and they want to do business with you and you're gonna find a way it was hard to gauge if Trump's tariffs were having any impact here as I traveled around the country some Chinese businesses told me they've been hurt a bit and others not much at all when he came to the trade war even the government was downplaying it one of China's top trade officials agreed to talk to me why do you think the US and China are in a trade dispute right now I think we may have different perceptions we think that the Pacific Ocean as in President Xi's words big enough to accommodate the two economies we do not want to have a war even a trade war with any country in the world and we do not have the secret strategy to replace the United States as the global superpower but US companies have long complained about an economic strategy that China does use they say it gives Chinese businesses an unfair advantage the government plays a heavy hand in the market here through massive subsidies and support special economic zones for example have been created to spur industries that government believes are critical to China's success I found one six hours south of Shanghai in the industrial port city of washout this economic strategy is called the China model the China model is a blend between national control and ownership of resources and economic activities dominated by private entrepreneurs ninety percent of the new jobs are in the private sector but all the land is still owned by the state control energy resources is controlled by the state control of the financial system basically by the state so you come up with the socialism with Chinese characteristics or socialist market economy which is what China calls itself here in Guangzhou the government has prioritized high-tech development providing support to companies like WM Motor to build electric cars in 16 months WM built a massive manufacturing facility that will be able to produce 200,000 electric cars a year we focus on the intelligence maka and this is them these are the cars yes um this is actually the very earliest age cars Freeman Shen is the CEO of WM Motor [Music] the China market for Auto Sales is now the biggest in the world it's also where American car companies make some of their biggest profits but they're facing increasing competition from Chinese companies like WM how does this represent sort of a changing China Oh interesting you know when a country upgrading the whole industrial base yeah the best example would be a vehicle of car industry car engine car industry is the representative of the whole industry you're saying like the cars are the the bellwether exactly how exactly exactly why it's Assembly of all can ecology it's including software mechanical lighting you got cybersecurity thing there so you're saying that countries that can build a car you've got all kind of you just reverse job before you can be a strong car in that country and if you can build a car it means you're moving of the technology change back to is that you're coming about to change this value cheese going up well the commies party has long seen in the automotive industry as a pillar industry it so they've devoted huge amounts of resources and policies towards building up that industry it's all about bringing China up into the top tier of global economies in terms of its manufacturing capabilities and technological capabilities you're not going to get rich you're not going to come a superpower if you're just making the low-end stuff the state-sponsored China model is credited with transforming the country's economy China's middle class is now bigger than the entire United States and its economy is growing twice as fast this success has become a major source of tension in the trade war the question is is American complain about the way China handles economy all is about China's legitimacy to become a prosperous and powerful country our population is four times bigger than the US we have 1.3 billion people right you have 300 million people so China's economy should be four times higher than the US economy now we are only about 4 people in the United States do yeah of course I know this is and this is difficult to unto to to to to to accept right today we are only 60% of the size of the US I think we do have the right to be at least as powerful at the US and even one day much powerful than the u.s. do you think that Americans should be worried oh no the Chinese government thinking we are become stronger and stronger yeah and the u.s. still number one Big Brother right I hope topic rather not trying to punch me on my face and Big Brother were thinking you know this little brother someday probably will do send it to me I think that it is I think that really depends on the intelligence of most countries leader to make sure worry is fine but please don't fight but back in the US Trump was eager to escalate the tariff fight in the fall of 2018 he upped the ante by threatening even more tariffs as you know we have two hundred and fifty billion dollars at 25 percent interest with China right now and we could go 267 billion dollars more and Jenna wants to talk very badly and I said frankly it's too early to talk can't talk now because they're not ready because they've been ripping us for so many years Trump's position was that it was time to hit back and that prior administration's have been too soft on China of visits they have a surplus of 375 billion dollars with a beef with the United States and it's been that way for years and years and years I don't blame China I blame our leadership they should have never let that happen and I told that to President Xi but while Trump was blaming his predecessors we were hearing about other reasons why the problems with China had gone on so long dozens of interviews we did in China and the u.s. pointed to an unlikely obstacle American businesses themselves they were worried about the operations they had in China whether they would lose the profitability one of the biggest problems the US has had with China over the years is what's come to be known as force tech transfer where companies wanting to do business in China say they're pressured to give up their technology China started adopting what we're called indigenous innovation policies to make sure that their own companies state-owned or otherwise we're going to be the ones who really were the leaders in the new economy so you're saying they didn't compete fair they engaged in predatory and protectionist policies they demanded that many foreign companies seeking to come into their market had to do it through joint ventures with their firms and in many cases requiring that their technology be transferred to empower Chinese entities to become you know great world companies China wasn't supposed to be doing this under rules set by the World Trade Organization which it had joined in 2001 and though China says it has no official policies forcing companies to hand over technology US trade officials started getting complaints about the practice just years after China joined the WTO but the complaints came with a catch companies would come in and complain they'd have great information but oh by the way you can't use any of this but solve our problem and so that was always a challenge why would that make it harder it made it harder because you couldn't really prove your case so you saw the US business community not only say don't use my name but they would say to your office and the administration we don't even want you raising this issue too loudly right because if you raise this too loudly they're gonna think it's us and we will be hurt and they had too much money at stake they had a lot of money at stake how did that sort of having your hands tied behind your back and away how did that affect in the long run the the u.s. position involved in yeah probably in both in China but right because as more and more problems came up individual companies were very spooked and didn't want to you know visibly be associated with any strong action by the US government by 2008 US companies were facing more and more competition from Chinese companies and China was becoming an economic force the Chinese tonight reaching their hands out the China model was working and ready for primetime that Opening Ceremony do you remember I was there what did you see oh my god i sat up in the high seat and I was around all these Chinese people come in from all over the country they were beaming with pride what do you think the world saw the world saw a pretty incredible place I think it blew the world away on Holi come and all of a sudden they just do this incredible opening ceremony they know how to put on a show it was like the biggest coming-out party in history it was gogo years of AJ everything was possible you know and there were still a lot of respect for the u.s. the US you can access them the US financial system and yeah there were still a lot of respect for the big banks and the idea that the US they understood how to run a financial market and then the crash happens down Wall Street the worst since 9/11 the worst financial crisis in modern times three of the five biggest investment banks are gone you'd see it in some of the political policy circles in the sort of the academic writings the Chinese think tanks but I just thought of my friends was this idea of like we thought you guys know you're doing a crisis which is unraveling homeownership the middle class and the American Dream itself I definitely look at the financial crisis 2007-2008 as a as a really key turning point in how the leading Chinese thinkers saw the US where the u.s. maybe was up here in terms of something to emulate in certain ways went down here or lower because basically the emperor has no clothes the energy changed profoundly CEOs who used to be able to go see the the the premier and president they would come and they would have to be the low-level official who would berate them it was very stark but you got to remember for for all these years we had you know we had low voltage congressman or business people coming in and and and shaking their finger in Chinese saying you should have all the children you want you should do this you should do that and he's very capable Chinese people would just bite their tongue and say you know come thank you for your wisdom because they they needed they needed America they needed they needed us so they had to tolerate us then all of a sudden global financial crisis and it was payback time it was like you listen to us for a while publicly China would promise to open its markets more to US business but internally it would double down on the China model China and under Xi Jinping in embraced an ambitious national plans called made in China 2025 that put even more focused on dominating key global industries there is this belief that China is destined to return to its former glories and you can't restore your your your fabled glory if you're not the leading country in all sorts of areas be it military be it technology be it in manufacturing but early on US businesses discovered China was also using other means to get ahead in early January of 2010 I get a call from Google who had just announced that they've been hacked sabotage back to China in the course of their investigation they actually realized that there were many more companies that had been targeted not only was Google itself targeted by the cyber spies but so were at least 20 other major corporations you thought at that time this is something bigger for the first time ever we were facing a nation-state an intelligence service that was breaking into companies not government's not militaries but private sector organization more than 72 organizations were hacked by spies dating back to 2006 the Google hack led to revelations about dozens of other Chinese cyberattacks dubbed Operation shady rat coming from one particular and I'll pair of itch was called to the White House Situation Room to brief Obama's top national security officials i briefed them what we were seeing with both aurora night dragon shader at what did they say my impression was none of this was a surprise and when I pressed them on why they were not taking stronger action against China their response was it's complicated it's complicated did they explain that well they were telling me straight out those same customers that are getting victimized by China they're the same companies that come in to tell us don't do anything to harm the relationship with China we want to continue doing business there we want to continue making money there we need that market you know the the US government listens the companies so if their companies are saying chill I'll chill how can businesses walk into United States agencies and complain about being treated unfairly if they're the ones that are preventing any action from being taken how do they get to have it both ways sometimes two things can be true at the same time I mean their incentives are to make money if your business is in China Xi Jinping is more important to you than Donald Trump or Barack Obama and it's it's not these are bad people who don't care about America but their incentives are to shareholders not to the government of the United States neither Google nor any of the other companies we contacted about cyberattacks would agree to talk to us and Chinese officials deny they've been involved in such practices but by 2015 American businesses and government officials were increasingly alarmed in negotiations with President Obama she pledged that China would not engage in economic cyber hacking I believe that we have made significant progress in enhancing understanding between our two nations Obama also brokered a major trade agreement with allies the trans-pacific partnership or TPP it was supposed to put pressure on China to fix the growing economic problems between the two countries but all of that would come unraveled with a new president in the White House Trump quickly withdrew from the TPP agreement and by the fall of 2018 with his own trade negotiation stymied the conflict was widening the administration took a tough turn confronting China aggressively new report tonight detailing just how big the threat China poses it accused China of breaking the cyber agreement Chinese Intel officers charged with hacking US businesses and engaging in widespread technology adds to the growing tension between the US and China in the middle of this fierce trade war now through the made in China 2025 plan the Communist Party has set his sights on controlling 90% of the world's most advanced industries including robotics biotechnology and artificial intelligence really an extraordinary speech attacking China on the domestic politics front the trade front and the military front Chinese security agencies have masterminded the wholesale theft of American technology I don't want to wait twenty more years to catch up they're just reaching into the cookie jar and taking whatever they want and using that stolen technology the Chinese Communist Party is turning plowshares into swords that speech was the knot of hawkish speech that speech was a declaration of economic war and potentially a real wall china it was read by everybody all the way up to the top did the Vice President issue any kind of evidence as what as a harbinger of you know something really really different and something that was really alarming for them why was it alarming for them it was a very onion stun diplomatic speech it was kind of a bill of indictment all China the United States need to make an effort to make sure that the bilateral relations do not get out of control our message to China's rulers is this this president will not back down that was the point of no return and it's not being acknowledged enough it was the most important speech of the whole Trump administration early on the focus of the trade war had been on tariffs and reviving 20th century industries but it had now become about far more about who will dominate the cutting-edge industries of the 21st century so I headed to Silicon Valley where the battle was being waged the fear inside this White House is that China is using its vast financial resources to leap ahead technologically of the United States the Trump administration was trying to restrict China's access to valuable technology developed by American companies first up though this morning the Trump White House announcing a pivot using an existing law related to national emergencies to restrict Chinese investment in sensitive technologies on Sand Hill Road I met one of the most experienced high tech bankers in the valley who was troubled by what he was seeing he told me about a flood of calls he started receiving from Chinese investors about five years ago he remembered one Chinese investor in particular he'd been sent to invest in technology could I help and I said well what kind of technology and he he had difficulty answering the question and if I pushed him hard clearly in the end it would be artificial intelligence semiconductors maybe things having to do with automotive the Chinese government's top priorities in Chinese government's top priorities right and and I said well how much do you have to invest and he claimed that he had access to a billion yeah and then I met a private equity firm that had 15 billion dollars from some entity in the Chinese government how much 15 billion B yeah and they told me that only their only mandate was to invest in semiconductors what did you think of that I thought this is I don't know if this is good I mean you've been at the heart of Silicon Valley financing yeah 35 years yeah what do you think is happening here I think China is doing its absolute best to make itself self-sufficient from a technological point of view they realize that in order to accomplish that they either have got to start pedaling faster on their own or they've got to buy a lot of technology at Stanford University I found investors and entrepreneurs grappling with China's high tech ambitions the Silicon Valley is very much at the heart of the trade water why do you say that the US needs to keep technological advantage in Silicon Valley is generating a lot of the innovations that are powering the u.s. in terms of all sorts of different technologies on this chart in terms of somebody from the business community said you know we're not in a trade war we're in at economic war and I think that's what we probably are really worried about a lot of Chinese technology companies invest heavily in five Z's now there are areas where they're actually you know quite competitive in some areas where they even seem to be maybe having an edge you know what Chinese companies already working on six disease despite their worries about China people here also depend on Chinese investments and we're concerned that the Trump administration will go too far do you think the administration had good reason to clamp down on investments from China in Silicon Valley I think so but there's a difference between yes there's a problem and the response being measured appropriate and grounded I think they may end up operating to our detriment and broadly economically but also and without the ability to collaborate it's gonna be very difficult for the u.s. to keep up business used to be the ballast in the relationship because American companies made money American consumers got cheap goods kept inflation down China got know-how Capet cetera the business relationship is now the major conflict because we're both going for all the technologies of the future were both racing for globe leader leadership influence so now business is is is is an irritant and it's the conflict as I drove around the valley I could see the challenge of this high-tech conflict Chinese businesses are visibly present tightly connected to the economy and few people I met here thought the Trump administration's hardline on China would be good for anyone in the long run the endgame here is the decoupling of the American and Chinese economy by the way is already underway and it's going to continue I think there are people who think that sealing ourselves off is is ultimately the best solution to break China and the United States economies apart yeah that seems so sad because we could do so much for each other if your goal was to stop China from advancing you're not gonna accomplish that anyway because though though just innovate around you why would you want to stop anybody from making progress III don't see that what I think our goal should be some people would say because they could become more powerful in the world marketplace than than the United States the better golf is for us to spend time on becoming more powerful ourselves I think that was a sentiment I'd been hearing throughout my reporting on the trade war and back in Ohio where I'd first seen the impact of the tariffs future is on the line for war workers in general people were making the same point in the face of seemingly unstoppable economic forces large American factories stopped production today earlier this year the GM plant in Lordstown stopped producing cars the latest hit to autoworkers this plant plant closed when it first opened it was the largest plant under one roof in the world [Music] with China aggressively pursuing next generation technology the talk in Lordstown that day was how this plant could be transformed to keep the u.s. competitive my personal hope is that General Motors which is investing billions of dollars in all-electric emission-free green cars will decide to build them right here we got to fix our system to compete with China we got to internalize some of this blame and not spending all our time blaming on China they've outsmarted us they've done some things that we don't agree with they've done some things against the agreements they've made but they're focused in moving ahead China has a plan they got a 10-year 20-year 50-year plan I mean you really need to get serious about this in terms of electric vehicles in terms of new technology in terms of manufacturing and make sure that our government is supportive we didn't do what China's doing we didn't look at where the industries of future where do what kind of training do we need what kind of people do we need what kind of incentives do business need to do this this is where actually the Chinese system that we've always looked down on actually has an advantage now over the past several weeks in Washington President Trump has been upping the pressure to get an agreement on at least some of the long-standing issues intellectual property protection that they're talking about circuit tariffs despite challenges he says a deal is possible this is the granddaddy of them all and we'll see that happens it's good but whether a deal is made Trump's trade war has heightened the economic conflict and the specter of a prolonged rivalry looms large what this Trump want from China what did the camp in the white house that you were in what do you want I believe you need you need actually a change of the top leaders in the in the Chinese Communist Party how I think I think the I think the goal into China is quite simply is to bring them is to break the back of this totalitarian mercantilist economic society you're talking about regime change well first off nobody in the White House was talking about that okay and the president would never even consider that they're talking about a trade deal and some fundamental economic change I'm saying one of these two are going to this either this this mercantilist totalitarian system that has a network effect or the kind of you know liberal democratic west one of those two systems is going to be the system at the end of the day tree wars can get out of control pretty fast arrests of a top executive at Chinese still is really the United States ramping things up against Paul Wayans in the South China Sea Escalade I want to become a foot our next major war could be fought against China this is my optimistic scenario that we will have a managed tension but we do have the pessimistic scenario we do have a chance to see a so-called I don't like the term but the new cold war I don't think like the one the US have with the USSR but we will have another type of cold war that nobody have ever experienced but I think it's a comprehensive confrontation that's dangerous that's really dangerous and if that happens if that happens it will last for quite a long time then that's a tragedy for everyone I think [Music] you go to PBS or gosh frontline for more reporting on Trump's trade war some of the people that are very Pro tariffs right now make an argument that the United States has lost its manufacturing base we have also created millions upon millions of jobs in new industries that didn't exist 20 years ago then visit the frontline archive wait have been stream more than 200 frontline documentaries connect to the frontline community on Facebook and Twitter then sign up for our newsletter one day in Gaza [Music] for more on this and other frontline programs visit our website at pbs.org slash frontline [Music] - waterfront minds Trump's trade war on DVD visit shop PBS or call 1-800 play PBS this program is also available on Amazon Prime video [Music]