(Preview) CEWC and Bleak Economic Data; Naval Exercises Around Taiwan; New Reporting on Chip Controls; Trump’s Standing Invitation to Xi

Summary

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Sharp China with Bill Bishop: (Preview) CEWC and Bleak Economic Data; Naval Exercises Around Taiwan; New Reporting on Chip Controls; Trump’s Standing Invitation to Xi

Date: December 18, 2024
Hosts: Andrew Sharp, Bill Bishop
Episode Focus: Analysis of Trump’s recent invitation to Xi Jinping for his (potential) inauguration, implications for US-China relations, and updates on the TikTok legal battle in the US.

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Episode Overview

In this preview episode, Andrew Sharp and Bill Bishop dive into two headline developments: Donald Trump’s ambiguous outreach to Chinese President Xi Jinping—inviting him to attend his inauguration—and the latest developments in the legal contest over TikTok’s US future. The hosts unravel the posturing, strategic signaling, and unpredictability of Trump’s approach to China, and break down the seismic implications of the potential TikTok ban.

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Key Topics & Discussion Points

1. Trump’s Public Invitation to Xi Jinping (00:05–07:28)

• Trump’s Take on Xi:
  Trump gives a meandering answer about whether Xi Jinping would attend his inauguration, asserting a positive relationship mostly through “letters” and underscoring Xi’s personal qualities:

  • Notable Quote (Trump, 00:39):
    “He was a friend of mine. I mean, he was here for a long time right in that spot, except sitting in a very comfortable chair... He's an amazing guy.”
  • Trump claims open lines of communication with Xi, but most contact seems written rather than direct.

• Host Analysis:

  • Bill Bishop (02:24, 02:55):
    Dissects Trump’s language, highlighting how the “grand bargain” (G2) framing echoes common PRC (Chinese) talking points about collaborative global leadership.
    • “The language that China and the United States can together solve all the problems in the world... fits with how the Chinese talk about the relationship.”
  • Both hosts doubt Xi would actually appear at the inauguration. Bill emphasizes that even the Chinese side is likely confused by Trump’s approach—wondering if Trump is serious about a new sort of US-China arrangement, or just improvising.
  • Andrew Sharp (02:51):
    “It's sort of an echo of PRC messaging.”

• Strategic Value of the Invitation:

  • Bill (06:41):
    Suggests Trump’s invitation has tactical foresight—it makes Trump seem magnanimous regardless of Xi's response, while putting China on the diplomatic defensive.
    • “If there's no downside for Trump, I think it's actually pretty smart because he looks magnanimous. He invited Xi.”
    • If Xi declines, Trump can claim the moral high ground: “Well, I invited him... I made an offer.”
  • The invitation centers the narrative on Trump, not Xi.
  • Andrew (07:21):
    “That's what I enjoy about it. It does put [China] on the back foot.”

• Team Dynamics & Policy Uncertainty:

  • Trump’s staff is rife with internal competition and unpredictability. Bill highlights that Trump historically prefers to allow in-fighting among advisors and then makes decisions himself (05:08).
  • Andrew (05:43):
    “He also likes having world leaders off balance and unsure of what direction [he’ll take].”

• Tariffs as the Most Predictable Policy Shift:

  • Bill hedges that while most Trump policy is unpredictable, significant tariffs on China are a very real likelihood (05:49–06:09).

2. The State of TikTok in the US – Legal Battle and Uncertainty (07:28–13:22)

• TikTok’s Legal Moves:

  • TikTok has appealed to the Supreme Court for an emergency injunction to prevent enforcement of the US law forcing its sale or shutdown (07:28).
  • They request a decision by January 6 to prepare for possible US shutdowns.
  • To win a temporary injunction, TikTok must show it is likely to succeed on the law’s merits, will suffer irreparable harm otherwise, and that the government would suffer minimal burden.

• Chance of Success?:

  • Andrew doubts TikTok’s likelihood of success, especially since the DC Circuit’s ruling was comprehensive (07:55).
  • Bill notes their last hope (if the appeal fails) is a 90-day extension from the Biden administration, which seems unlikely due to the political climate (09:10–09:43).

• Economic & Personal Impact:

  • Andrew (10:35):
    Underlines how a TikTok shutdown would be “a seismic disruption to the online economy.”
    • Many users, especially creators, are only starting to hedge by diversifying to other platforms. Advertisers are cautious about 2025 budgets given the legal limbo (11:13–11:41).
  • Bill stresses the corrosiveness of ongoing uncertainty for the platform’s business.

• What Happens if Trump Returns?:

  • It would not be a simple executive decision for Trump to reverse a ban—there’s an interagency process to re-certify TikTok, so a quick reversal is “not possible” (11:41–12:08).

• The Supreme Court’s Likely Reluctance:

  • Andrew (12:08–13:19):
    Suggests the Supreme Court is unlikely to tackle the broad First Amendment and Section 230 implications raised by the TikTok case. Even rhetorically compelling arguments (e.g., both presidential campaigns used TikTok) may not overcome congressional national security concerns.
    • “It involves complex constitutional questions about whether TikTok's algorithm constitutes speech... and I don't know if the court is ready to address that.”

• Final Thoughts:

  • Both hosts agree that the fate of TikTok and coherence of US-China policy hinge on many unknowns, pending court decisions, and the unpredictability of a future Trump administration.

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Notable Quotes & Memorable Moments

• Trump, on Xi and U.S.-China Cooperation (00:39):

  “China and the United States can together solve all of the problems of the world, if you think about it. So it's very important.”

• Bill Bishop, on Strategic Signaling (06:41):

  “If there's no downside for Trump, I think it's actually pretty smart because he looks magnanimous. He invited Xi.”

• Andrew Sharp, on the Uncertainty of Trump’s Posture (05:08):

  “I kind of enjoy that China probably also has no idea what to make of any of it.”

• Bill Bishop, on Why Predicting Policy Is Futile (05:08):

  “He likes the infighting. He wants them to argue in front of each other, and then he makes the decision... That makes it really hard to sort of come up with, oh, this is all that, you know, Trump's gonna do X, Y and Z around China because it isn't. I don't think it's a done deal yet.”

• Andrew Sharp, characterizing the TikTok Ban’s Impact (10:35):

  “It will be a seismic disruption to the online economy.”

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Timestamps for Important Segments

• 00:05–02:24 – Trump’s ambiguous stance on inviting Xi and personal relationship recap
• 02:24–03:12 – Analysis of Trump's PRC-style messaging and speculation on a “grand bargain”
• 03:46–06:09 – Reality check: staff unpredictability, Silicon Valley’s national security priorities, expectations for tariffs
• 06:41–07:28 – Tactical savvy behind Trump’s invitation, implications for both leaders
• 07:28–09:55 – TikTok’s legal strategy, odds in Supreme Court, and potential political maneuvering
• 10:14–12:08 – Broader business ramifications, creators and advertisers bracing for disruption, challenges in reversing a ban
• 12:08–13:22 – Supreme Court’s reluctance to address algorithm-as-speech, constitutional, and policy complexities

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Tone & Takeaways

The conversation is candid, wry, and often amused at the unpredictability and ambiguity in both Trump’s diplomacy and the TikTok saga. The hosts strike a balance between incisive policy analysis (especially from Bill) and observational humor (mostly Andrew), concluding that both Chinese leaders and American businesses are, like the rest of us, waiting for clearer signals from Washington.

For listeners and policy-watchers, the episode underscores:

• The intentional ambiguity and unpredictability characteristic of Trump’s China strategy
• How both sides use grand gestures (like public invitations) for strategic effect
• The immense legal and economic uncertainties hanging over TikTok in the US, with broader implications for tech policy and US-China relations

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End of Summary

Transcript

[Bill Bishop]

Foreign.

[Andrew Sharp]

Welcome to Sharp, China. I'm Andrew Sharp, and you are listening to a free preview of today's episode. Well, speaking of Trump and speaking of his relationship with Xi, I can now shift to the Trump section of the podcast. This is becoming a weekly tradition. We can close with whatever the hell is happening with President Trump. I got to play a clip of Trump discussing his invitation to Xi Jinping to attend his inauguration on January 20th. Here we go. Are you disappointed that China Xi won't be at the inauguration?

[Donald Trump]

I don't know that he won't be at the inauguration. I mean, I haven't really spoken to him about it. I don't know that. Actually. I would say that if he'd like to come, I'd love to have him, but there's been nothing much discussed. I have had discussions with him, letters, et cetera, et cetera, at a very high level. You know, we had a very good relationship until Covid. Covid didn't end the relationship, but it was a bridge too far for me. But if he'd like to come, I'd certainly. Just so you understand, he hasn't said one way or the other because a lot of people say he won't come. He will come. People think he will come, he won't come. It's something we barely discussed, just about didn't discuss. But I have had, especially through letters, some very good conversations. Have you had conversations with Dennis Salisbury? You know, because China and the United States can together solve all of the problems of the world, if you think about it. So it's very important. And, you know, he was a friend of mine. I mean, he was here for a long time right in that spot, except sitting in a very comfortable chair. He wasn't standing like you are. But we, we spent hours and hours talking. And, you know, he's an amazing guy. Have you spoken to me?

[Bill Bishop]

The press.

[Donald Trump]

The press hates when I say that, but he's an amazing person.

[Andrew Sharp]

All right, so there we go. What do you make of Trump's posture with Xi there? He's an amazing guy. They've had letters and letters, and he may or may not attend the inaugur. I would be frankly amazed if he did show up in D.C. on January 20th.

[Bill Bishop]

I mean, I, I'd already heard that they're not. And they're going to send some, but they will send someone senior. But Trump said they haven't read either way. So it is interesting. Was an interesting phrase around the communications. It sounds like it's more letters than actual conversation between Trump and Xi himself. And maybe there have been conversations by some of the folks around him. The language that China and the United States can together solve all the problems in the world is very much fits with how the Chinese talk about the relationship.

[Andrew Sharp]

I was going to say it's sort of an echo of PRC messaging.

[Bill Bishop]

So, so if you're in China, you know, again, and I asked yesterday in the newsletter, is like, you know, this PRC side, if they hear these comments, are they going to think Trump is open to some sort of a, this mooted idea years ago of a G2 like grand bargain between the US and China or is he just speaking off the cuff?

[Andrew Sharp]

You know, I mean, he's definitely speaking off the cuff, talking about what a.

[Bill Bishop]

Kind of chair she had at Mar A La actually open to some kind of a grand bargain. And again, we don't know and I think, I'm not sure his, all his staffers know. I mean, there's so many cross currents in this administration. If you look at some of the folks from Silicon Valley who are going in and who are working on national security related issues, you know, their focus, especially the folks who have investments in, you know, the Silicon Valley companies trying to do the like defense industrial base and military industrial companies, it's all, you know, it's all about China.

[Andrew Sharp]

Right.

[Bill Bishop]

It's, it's all about re industrialization of the US Ending reliance on China for critical components and critical minerals. And you know, that very much runs in the face of the idea of some sort of a broader grand bargain. And so it's just too, it's just too early to tell what's going to happen. And again, it's the same thing with TikTok because of course yesterday he also met with the TikTok CEO who showed up. He made the, you know, shows that you made his pilgrimage to Mar A Lago.

[Andrew Sharp]

Yeah, I mean he also gave a meandering 90 second answer at that same press conference talking about Tick Tock. He was asked about what he plans to do in response to the tick Tock legislation and he talked about how much he loved Tick tock and how the Republican Party saw the greatest gains among youth voters because of TikTok. So I don't know, it was a real mixed bag. I mean they also, yeah, they asked him about preemptive strikes on Iran and Trump had a great response.

[Bill Bishop]

I thought that was a good answer.

[Andrew Sharp]

Why would I tell you? I thought that was a refreshing departure from the Biden administration's approach to conducting foreign policy via press conference. So like I said, Mixed bag across the board. I have no idea what to make of his posture with Xi. I mean, I kind of enjoy that China probably also has no idea what to make of any of it.

[Bill Bishop]

And so again, we're really going to have to wait until he's president and see all his, all the positions he fills. And again, you know, this. He likes having people fight under him. And I spoke to someone last week who does China stuff and briefed him and the team many times during Trump 1 and just said it's. He likes the infighting. He wants them to argue in front of each other, and then he makes the decision. And so, but that makes it really hard to sort of come up with, oh, this is all that, you know, Trump's gonna do X, Y and Z around China because it isn't. I don't think it's a done deal yet.

[Andrew Sharp]

Right, well. And he also likes having world leaders off balance and unsure of what direction.

[Bill Bishop]

Would be, including the governor of the great state of Canada. We've learned whose government. The great state government of Canada may now be collapsing. No, you know, I think, I think, I do think on the terror, on the tariff piece, that's one area where there should be a fairly. They're higher level of confidence that there'll be some pretty significant tariffs quickly.

[Andrew Sharp]

Yeah, yeah.

[Bill Bishop]

Well, but, but higher level of confidence does not mean 100% certainty.

[Andrew Sharp]

Yeah. And even with the inauguration play here, you could spin it a number of different directions. On one hand, China again just executed an unbelievably aggressive hack on U.S. telecommunications firms. So then turning around and hosting Xi at inauguration is not ideal, but it also could be sort of a transparent bear hug play from Trump.

[Bill Bishop]

I mean, I think if there's no downside for Trump, I think it's actually pretty smart because he looks magnanimous. He invited Xi.

[Andrew Sharp]

Yeah.

[Bill Bishop]

If she comes, you know, and which I don't think he will again, I've heard he's not. But even whether or not what I heard is true, it makes him look a bit, you know, it's not about Xi, it's about Trump. And he won't get much time with Trump because it's, you know, he's got to take the inauguration. And it just, it's, it's a, it's a strange visit for the leader of China and.

[Andrew Sharp]

Exactly.

[Bill Bishop]

Then he says no. And then Trump's like, well, I invited him, you know, I made an offer. So now it puts Chinese side a little bit on the back foot. Like, well, how are they going to Reciprocate because Trump was being really magnanimous.

[Andrew Sharp]

That's what I enjoy about it.

[Bill Bishop]

It does put your smart. I mean, it's a smart play.

[Andrew Sharp]

Yeah. Well, we will see. I don't expect to see Xi in D.C. in a couple of weeks here, but who knows. So you did mention TikTok shochu at Mar a Lago on Monday. Also on Monday, TikTok appealed the D.C. circuit's denial of its motion for a temporary injunction and is now moving the Supreme Court to temporarily enjoin enforcement of the TikTok law until it hears an appeal of the D.C. circuit that upheld that same law. TikTok is requesting a judgment on the injunction by January 6, telling the court that if the court won't enjoin the law, TikTok needs time to, quote, coordinate with their service providers to perform the complex task of shutting down the TikTok platform only in the United States. And just so people know, in order to secure a temporary injunction, TikTok has to demonstrate a likelihood that their appeal of the law will succeed on the merits, that they and they also have to establish that they will suffer irreparable harm if the injunction isn't granted. And they have to show that the burden on the government is limited if the law is enjoined. And I don't love TikTok's chances of success on those fronts, they will suffer irreparable harm. But I don't think that they can establish in their motion that their appeal is likely to succeed on the merits because the D.C. circuit was pretty comprehensive in its rejection of TikTok's arguments. Do you have any thoughts on where things stand right now?

[Bill Bishop]

If the Supreme Court doesn't rule either give them the injunction, doesn't rule in TikTok's favor, then their last hope is that they can convince the Biden administration to grant the one time 90 day extension and punt it into the Trump administration and then they'll have more ability to work around, work within, you know, speaking of surface area work, work around that to try and get a more favorable outcome. I'm not sure why the Biden administration would do that.

[Andrew Sharp]

Right.

[Bill Bishop]

Other than to say that TikTok has a, you know, there's tens of billions of dollars at stake, TikTok and it's some of those investors effectively have bottomless lobbying budgets and they're pretty much in a name your price kind of situation.

[Andrew Sharp]

Yeah, well, I mean, they've had a lot of time to negotiate a potential divestiture and it's not clear we honestly, we just don't know whether any of those talks have played out quietly behind the scenes. There certainly haven't been any rumors to that effect over the last nine months.

[Bill Bishop]

And they're running and they really are running out of time. And what's interesting too, and I had forgotten, is that they actually, if the law goes into effect, they actually have to allow users to export all their data again. It's probably part of that sort of complex process they talk about for the reasons why they need to know by January 6th.

[Andrew Sharp]

Yeah, no, and I mean, it will be a seismic disruption to the online economy. Like the. You and I don't use TikTok. Like I said, I signed up and haven't opened the app in years. Not because of any security concerns, because I'm a millennial and it's always been kind of this foreign world to me. I've never really adopted TikTok, but a lot of people do. And there's like this elaborate infrastructure that could be unwound in a matter of weeks here. And so, and there's still a lot.

[Bill Bishop]

Of, I think a lot of people don't realize what might happen.

[Andrew Sharp]

Right.

[Bill Bishop]

And aren't at all, I would have thought, at this point, more people, I think some of the more higher earning creators are starting to hedge out onto other platforms like Instagram or YouTube. One of the other questions, of course, is going to be, so what do advertisers do? Do they commit to budgets on TikTok now into January, or do they wait until they hear from the Supreme Court?

[Andrew Sharp]

I can't imagine they are in a hurry to commit to 20, 25 TikTok budgets.

[Bill Bishop]

Right. And so again, it just, it becomes corrosive on the business. And so if this ban goes into effect on January 19, you know, the process for the Trump to undo it, it's not, I think that, I think the law says there has to be like an interagency process for the President to decide basically to certify that it can continue. And so it's not like he could just come in at 12:01pm on January 20th and sign something saying TikTok's fine.

[Andrew Sharp]

No, exactly. Yeah. And I would be, I'm not going to be stunned, but I would be surprised if the Supreme Court takes this case up at all. It involves complex constitutional questions about whether TikTok's algorithm constitutes speech, and therefore a ban implicates First Amendment questions. And I don't know if the court is ready to address the algorithm question at all because it would have implications for Section 230 policy, which impacts the tech ecosystem more broadly. And, and I also don't think they would want to address it in this case, where the net result would still probably be deference to congressional judgment on the national security threat question, and they would probably still uphold the law as it's written. TikTok's argument on the injunction is interesting because the idea that the interests of the government wouldn't be burdened because TikTok is not an imminent threat. One of the arguments they raised is, look, both presidential campaigns were on TikTok throughout the last year, and that's a fair argument to make.

[Bill Bishop]

That's, that's not an unreasonable argument.

[Andrew Sharp]

Yeah. I mean, and it is contradicted by the record in Congress where, you know, both the House and Senate considered this legislation and declared that TikTok is an imminent threat to national security. So that would be their problem in court, but rhetorically, a compelling argument to make. All right, and that is the end of the free preview. If you'd like to hear the rest of today's conversation and get access to full episodes of Sharp China each week, you can go to your Show Notes and subscribe to either Bill's newsletter, Cynicism, or the Stratechary Bundle, which includes several other podcasts from me and daily writing from my friend Ben Thompson. I'm an incredibly biased news consumer, so I think both are indispensable resources, but either way, Bill and I are going to be here every week talking all things China, and we would love to have you on board. So check out your Show Notes, subscribe, and we will talk to you soon.