POLITICO Tech Podcast Summary: ‘Gloves off’: A Former Trump Trade Official on His China Fight

Release Date: April 10, 2025

Host: Stephen Overle
Guest: Nazakna Kochtar, Former Trade Official and National Security Practice Leader at Wiley

1. Introduction

In this episode of POLITICO Tech, host Stephen Overle engages with Nazakna Kochtar, a seasoned expert in trade policy and national security. The discussion centers around the escalating trade tensions between the United States and China, focusing on the recent surge in tariffs and the broader implications for the global economy and technology sectors.

2. Escalation of US-China Tariffs

Stephen Overle opens the conversation by highlighting the significant increase in tariffs imposed by President Donald Trump specifically on China. Unlike with other US trade partners, tariffs on China were not rolled back, with Trump elevating them to 125% in response to Beijing’s 84% tariffs (02:00). Kochtar explains this aggressive stance as part of an ongoing strategy to decouple the US economy from China.

Notable Quote:

"Every single business in the United States will feel the impact of this all almost instant. Decoupling from China." – Nazakna Kochtar (01:12)

3. Decoupling US and China Economies

Kochtar elaborates on the concept of decoupling, emphasizing the deep economic integration between the US and China. She underscores that such rapid tariff escalations are forcing an abrupt separation, which was previously considered nearly impossible due to the intertwined nature of the two largest global economies.

Notable Quote:

"We're essentially overnight decoupling. And what does that do? What does that mean for our industrial base that actually doesn't have the supply chains that we depend on China for and will take several years to build?" – Nazakna Kochtar (02:05)

4. Impact on the Tech Industry

The discussion shifts to the technology sector, where companies like Apple and Nvidia face significant vulnerabilities due to their reliance on Chinese manufacturing and markets. Kochtar warns that Chinese retaliation could target tech firms to exert pressure on the US government.

Notable Quote:

"Any company that does business in the United States is going to be leveraged by the Chinese government... they're going to have no choice but to advocate to the US Government." – Nazakna Kochtar (08:11)

5. Comparing Trade Strategies: Trump's First Term vs. Current Approach

Kochtar contrasts Trump’s current trade policies with those during his first term. Initially, there was a strategic approach with careful communication to avoid market chaos. However, the current administration is taking a more aggressive and swift approach, intending to use stronger legal tools and maintain an element of surprise, leading to increased market volatility.

Notable Quote:

"The Trump administration feels sort of emboldened by the successes of the first administration and wants to go bigger and harder." – Nazakna Kochtar (05:53)

6. China's Retaliatory Tactics

China’s strategy to counter US tariffs involves targeting critical sectors essential to the US manufacturing base, such as industrial diamonds used in semiconductor manufacturing and aerospace. Kochtar highlights China's deliberate focus on areas that would inflict maximum economic pain on the US.

Notable Quote:

"China knows exactly where to hit to have maximum impact... it's getting pretty ugly." – Nazakna Kochtar (05:37)

7. Negotiation Prospects Between US and China

Despite the heightened tensions, Kochtar believes that the Trump administration remains open to negotiating a deal with China. However, she doubts China's willingness to comply, citing President Xi Jinping’s consolidated power and resistance to making concessions that would undermine his authority.

Notable Quote:

"Xi Jinping is not going to give it to him... he's going to power through this." – Nazakna Kochtar (13:33)

8. Republican Strategies and Internal Divisions

The conversation addresses the fragmented Republican approach to the China trade war. While the administration pursues multiple objectives—such as onshoring manufacturing and raising tariffs—there is no unified strategy. Kochtar notes that conflicting goals and congressional disagreements may hinder the effectiveness of these measures.

Notable Quote:

"I don't think we'll get all of the supply chain movements that the President and his team are expecting... everyone in Congress is not fully aligned." – Nazakna Kochtar (16:49)

9. Voter Perception and Political Pressures

Kochtar discusses the American public's tolerance for economic disruptions resulting from the trade war. While there is widespread acknowledgment of the need to reduce dependence on China, prolonged economic pain may test voter patience, potentially influencing political support for the administration's policies.

Notable Quote:

"Americans feel that way. I think until the pain gets too much, and then we'll see how people react." – Nazakna Kochtar (19:28)

10. Conclusion and Final Insights

Concluding the episode, Kochtar emphasizes the inevitability of decoupling despite the associated hardships. The transition away from China is seen as essential for rebuilding the US industrial base and safeguarding national security. However, the path forward remains fraught with economic challenges and geopolitical tensions.

Notable Quote:

"We're gonna have some pain because we really do have to transition away from harmful places." – Nazakna Kochtar (18:31)

Key Takeaways:

• The US has significantly increased tariffs on China, leading to a rapid and forced economic decoupling.
• China's retaliatory measures are strategically targeting critical sectors to inflict maximum economic damage.
• The technology industry is particularly vulnerable due to its deep ties with Chinese manufacturing and markets.
• The Trump administration's current trade strategy is more aggressive compared to its first term, resulting in heightened market volatility.
• Negotiations between the US and China remain uncertain, with skepticism about China's willingness to compromise.
• Internal divisions within the Republican Party may impede a cohesive approach to the trade war.
• Public tolerance for economic disruptions may wane if the pain persists, impacting political support for stringent trade measures.

This summary encapsulates the core discussions and insights from the episode, providing a comprehensive overview for those who have not listened to the podcast.