President Trump Goes to China 5/13/26

Summary

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Squawk Pod — President Trump Goes to China

Date: May 13, 2026
Hosts: Joe Kernen, Andrew Ross Sorkin
Guests: Eamon Javers (CNBC correspondent in Beijing), Bob Hormatz (former Under Secretary of State, ex-Goldman Sachs), Joanna Stern (tech writer)

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Episode Overview

This episode centers on President Trump's high-stakes trip to China—his first in nearly a decade—where he will meet face-to-face with President Xi Jinping. The lineup includes prominent American CEOs alongside the President, highlighting US-China business dynamics. Discussion covers expectations for the summit, the economic and geopolitical context, and a deep dive into how both nations are approaching the meeting. In the latter part, tech journalist Joanna Stern reflects on her year living with AI, examining how generative artificial intelligence is integrating into daily life.

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Key Discussion Points and Insights

1. President Trump’s China Visit: Expectations, Context, and Significance

[02:56 – 06:32]

• Who’s on the Plane:

  • Several top-tier U.S. business leaders—Elon Musk, Jensen Huang (Nvidia), Tim Cook (Apple)—joined Trump.
  • CEOs are seeking "business opportunities while in town" but expectations are "pretty low" for a major trade breakthrough.

  “A lot of folks say they don’t expect a major trade deal breakthrough here. … All these CEOs have had a particular issue or another with the Chinese government over the years.”
  — Eamon Javers [04:21]

• Summit Context:

  • Seen as one of possibly four Trump-Xi meetings this year.
  • Tremendous change since the last summit—trade truce in place, but no formal resolution.
  • Xi expected to visit Washington; many meetings will “minimize expectation” and focus on maintaining stability.
  • “Much less pomp and circumstance” versus Trump’s 2017 China visit, which was a lavish affair.

• Geopolitical Overlays:

  • New issues added to the agenda (e.g., Iran) as global tensions shift.
  • China’s economic challenges, U.S. tariffs and trade pressures background these meetings.

  “It’s a story of how much this summit has changed just since it was put on the books.”
  — Eamon Javers [04:34]

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2. US-China Economic Reality & Policy Analysis

[06:32 – 08:02]

• Trade Relationship: Necessity and Unease:

  “I don’t know if we’re frenemies… but we sort of have to put up with each other because of global trade for some reason.”
  — Joe Kernen [06:32]

  • China’s transformation to a consumption-driven economy is stalled.
  • The average personal GDP in China ($14,000) lags far behind the U.S. ($90,000).

• Stability is the Buzzword:

  • Optimal outcome sought by both nations: predictability.
  • Chinese economy is “not great right now”; the population feels the slowdown.
  • Both sides “want some predictability, some stability both in the trade relationship and in the Iran situation.”
    — Eamon Javers [08:21]

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3. On the Ground in Beijing: Business, Surveillance, and Security

[09:12 – 10:21]

• Firsthand reporting reveals Beijing is busy with domestic tourists, though restaurants and some businesses lag.
• Eamon Javers shares:

  “You haven’t lived until you’ve had Peking duck in Peking… We got out to the Great Wall, Tiananmen Square, Forbidden City. … The place is packed with tourists.”
  — Eamon Javers [09:24]

• Cybersecurity comes up:

  “Do you, like, have a burner phone?”
  — Joe Kernen [10:01]
  “We’ve taken a lot of security precautions. … That’s all I’ll say about that.”
  — Eamon Javers [10:13]

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4. Tariff Refund Updates & US Manufacturing

[11:07 – 12:13]

• After a Supreme Court ruling, companies begin receiving tariff refunds:
  • Oshkosh and toy company Basic Fund among first recipients.
  • Trump called the refund situation “crazy” in a radio interview.
  • Legal situation remains complex, with some appeals still pending.

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5. Bob Hormatz Interview — US-China Relations: Lessons, Leverage, and Long Game

[15:13 – 25:12]

• Historic Perspective:

  • Hormatz’s background working on the first Nixon-Mao summit.
  • Recognition that the US faces an “advanced competitor” in China “from a military, political, economic and technological perspective.”

  “For the first time in nearly 100 years, the United States is negotiating with a peer great power…”
  — Bob Hormatz [16:50]

• Xi’s Strategy:

  • Emphasizes unity, avoiding Soviet mistakes (over-reliance on commodities, party weakness, lack of market diversity).
  • Xi wants to diversify markets and supply chains, and ensure party strength.

  “He wants to avoid being bullied by foreigners. He wants to make sure that when he does something, he has a united party behind him.”
  — Bob Hormatz [18:09]

• What Trump Faces:

  • Xi “will come back with a lot of confidence that China is an equal or close to an equal… and has leverage over the US.”
  • The “social contract” in China means the party must deliver better living standards; unemployment and real estate crisis are significant issues.
  • Xi “does not want a big dust-up with the US,” instead is “playing a long game.”

• Taiwan and U.S. Security Concerns:

  • Xi expected to push Trump on Taiwan, seeking “positive statements” toward peaceful integration, without clear unification language.

  “He’ll try to get language out of Trump that sort of implies that the US wants to have a peaceful solution to Taiwan that includes it becoming part of China...”
  — Bob Hormatz [21:12]

  • While China focuses resources in the South and East China Seas, U.S. preoccupation with Iran could shift influence in the region.

• Business and Technology Leverage:

  • China wants investment but is wary of dependency on US tech.
  • US, in turn, is dependent on Chinese rare earths, creating “mutual leverage.”

  “They certainly are doing extremely well from a technological point of view. … What they don’t want to do is become dependent on American technology.”
  — Bob Hormatz [23:16]

• Summary Prognosis:

  • Expect a “relatively tranquil summit”—no big breakthroughs, but “controversial conversations.”
  • On media coverage:

  “Half the articles are going to be that we were taken to the cleaners and the other half are going to be that it was a great deal. ... I think it’ll be somewhere in the middle.”
  — Bob Hormatz [24:37]

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6. The Year of Living Artificial Intelligence — Joanna Stern’s Experiment

[27:05 – 36:09]

• Premise:

  • Joanna Stern spent a year letting various AI products run her life, exploring both the possibilities and pitfalls.

• AI Progress:

  “Did it get considerably better? Absolutely. … I was able to offload a lot of the administrative and grunt work that I was doing to AI.”
  — Joanna Stern [27:52, 28:28]

• Examples of Automation:

  • Multi-step tasks (e.g., book promo website backend, email/receipt processing) were almost entirely AI-driven by the end of the year.
  • Personal agency and "AI dependence" is real; Sorkin describes going on a “Claude bender” (referring to the chatbot), revealing how easy it is to become hooked on AI support.

  “I was so deep in it that by the time I got out of it… I was like, oh my God, I want to go talk to Claude about that… It became like a bizarre addiction.”
  — Andrew Ross Sorkin [31:03]

• Risks for Kids:

  • Joanna shared that involving her kids in constant AI use caused them to “question AI so much more than the average kid,” having observed its mistakes and limitations.

  “They saw the AI get things wrong, and they saw us have to address the results of that.”
  — Joanna Stern [32:39]

• Hallucination Problem:

  • LLMs (large language models) overconfidently produce answers, even false ones, and often resist admitting uncertainty.

  “Is it a benefit for the designers of these LLMs to design them so they may know nothing but they’re never in doubt?”
  — Joe Kernen [34:13]

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7. Notable Quotes & Memorable Moments

• On US-China Relations:

  "For the first time in nearly 100 years, the United States is negotiating with a peer great power..."
  — Bob Hormatz [16:50]

  "The buzzword you hear… is stability. The idea that both of these countries… have an interest in stability."
  — Eamon Javers [08:02]

  "He wants to avoid being bullied by foreigners."
  — Bob Hormatz [18:09]

• On AI & Human Agency:

  "I have no fear of failure."
  — Joanna Stern [26:32]

  “You can have AI automatically right now, respond to your emails. You got to give a lot of trust over to it.”
  — Joanna Stern [30:05]

  "I was so deep… it became like a bizarre addiction for a moment…"
  — Andrew Ross Sorkin [31:03]

  “They saw the AI get things wrong… That was a learning for him, sad learning for all of us.”
  — Joanna Stern [32:39]

• On Cultural and Generational Change:

  "People don't know things that happened before the year 2000. Sad for me."
  — Joe Kernan [12:54]

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Important Timestamps for Key Segments

• Trump’s China Trip: Political and Economic Stakes
  [02:56 – 06:32]
• Foreign Policy: Focus on “Stability”
  [08:02 – 09:12]
• Bob Hormatz Historical Context and Analysis
  [15:13 – 25:12]
• AI Year-in-the-Life Experiment: Joanna Stern
  [27:05 – 36:09]

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Tone, Style, and Engagement

The hosts balance sharp economic and geopolitical insight with moments of humor (banter about Chinese food, tech mishaps, and generational differences). The conversation is relatable yet sophisticated, relying on the perspectives of veteran analysts and journalists. Discussion moves seamlessly from global power politics to everyday AI and personal anecdotes, reflecting the broad topical range typical of Squawk Box.

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Conclusion

This episode offers listeners a timely, in-depth look at the new era in US-China relations—where mutual leverage, domestic challenges, and economic vectors intersect—and also considers the personal and societal impacts as artificial intelligence becomes ever more a part of daily life. Both segments make clear: new forms of power, technology, and human behavior are rapidly reshaping our world.

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Transcript

[Katie Kramer]

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[Eamon Javers]

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[Andrew Ross Sorkin]

Fidelity Brokerage Services, LLC Member NYSE SIPC

[Eamon Javers]

Bring in show music please.

[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, an American in Beijing, President Trump's first trip to China in nearly a decade for a face to face meeting with China's President Xi. The plane has a few American business leaders riding along. Our Eamon Javers reports a lot of

[Eamon Javers]

CEOs are just hoping that this meeting can extend that trade truce as the first of possibly four meetings between Trump and Xi Jinping this year.

[Katie Kramer]

What does Xi Jinping want from this meeting? We hear from Robert Hormatz, former Goldman Sachs vice chair and a former under secretary of state.

[Bob Hormatz]

When President Trump goes there and asks for something, Xi will come back with a lot of confidence that China is an equal or close to an equal on technology and other things.

[Katie Kramer]

And the historic significance is intense.

[Bob Hormatz]

They play the long game. Mao in the 50s when China was a developing country, made the point that we want to be able to catch up with the US to avoid the US pushing us around about 50 to

[Katie Kramer]

75 years plus, would you make AI your assistant, your friend, your doctor? The Year of Living Artificial Intelligence E with Joanna Stern over the last year,

[Joanna Stern]

did it get considerably better? Absolutely.

[Katie Kramer]

It is Wednesday, May 13, 2026. Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand Andrew by three, two, one up

[Bob Hormatz]

and Andrew two is Mike.

[Andrew Ross Sorkin]

Good morning. Welcome to Squack Box right here on CNBC. We're live the NASDAQ market set in Times Square. I'm Andrew Ross Sorkin along with Joe Kernan. Becky's off today.

[Joe Kernan]

The Dow managed to close higher yesterday and but it's down this morning. The NASDAQ was a big loser yesterday. It's up this morning. So I don't know what what all that means. The S and P was down a little bit yesterday, so not a new high. But there's been a lot of new highs recently. And President Trump, he went, you know, he went west. I, I, why did I think, oh, they're flying over here, they're flying over. You go west. Go west to go to China, obviously.

[Andrew Ross Sorkin]

Go west, young man.

[Joe Kernan]

Oh, is it that much? I wonder what the difference is. I bet it's not because it's, you basically want around half the world, right? So it's, it's like 12 hour time difference or whatever. So it must, it's probably, we said he went stopped in Alaska, right. So that made me think, oh, that, of course, of course you went that way. Remember when we on one of the recent attacks on Iran, I think we tried to be clandestine about it by not going east. We went all the way around that one time, remember the jets, so that they weren't expecting it. So, but to go to China, that's the way you'd go. Okay, I got it. I'm on, I'm on the right page now. President Trump making his way to China for a high stake visit with the country's leader and adding another corporate leader to his entourage. I think it sounds classier to say it like that. Eamon Jefferson is on the ground in Beijing. He joins us with more. Now, why were you in Alaska for the President to pick you up, Eamon? I don't. Why did that happen? It wasn't you?

[Eamon Javers]

Yeah, it was not me, Joe. It was Jensen Huang of Nvidia who was picked up in Alaska. He showed up on the tarmac and hopped on Air Force One and caught a ride over here. You are right, Joe. It is a 12 hour time difference. I can tell you from personal severe experience that the jet lag is real here. But look, we are expecting the President in about an hour and 45 minutes to be wheels down here in Beijing. And this is going to be a tale of corporate intrigue because we've got a lot of CEOs on this trip. We take a look. Elon Musk is on the plane. We're also expecting CEOs of Goldman Sachs and Apple and a whole host of other companies to be in country with the, with the President. All of those CEOs have had a particular issue or another with the Chinese government over the years. All of them will be expecting to do some business while they're in town. The expectations here though among corporate folks that I've talked to in the run up to this are pretty low. Right? I mean, a lot of folks say they don't expect a major trade deal breakthrough here. And this is a story of how much this summit has changed just since it was put on the books. Remember, President Trump and Xi Jinping last met in October in Busan, Korea, and that was where they had that trade truce. A lot of CEOs are just hoping that this meeting can extend that trade truce as the first of possibly four meetings between Trump and Xi Jinping this year. We're expecting a reciprocal visit by Xi Jinping to Washington later on the year. The President said maybe November, we've heard maybe September for that one as well. We've got the G7 and the G20. So this is looked at as sort of one stop among many this year for these CEOs to be with the presidents in either the United States or China or a third country. So a lot of expectation here, here being minimized in terms of what the outcome might be on the trade front. And then, of course, we've got the Iran front.

[Bob Hormatz]

Right.

[Eamon Javers]

That wasn't even on the agenda when this meeting was set up last fall. Now there is some expectation that the two leaders might be able to talk, maybe work something out on Iran as well. Again, a lot of expectation minimization on that front as well. JOE so we'll see what happens here. We're expecting much less pomp and circumstance than we had last time the President was here in 2017. That was a state visit, plus a lot of hoopla, pomp and circumstance for that one. We're expecting a slightly stripped down version of that this time around. So we'll keep an eye on all of that for you here in Beijing.

[Joe Kernan]

Joe yeah, I like the way you say we'll, we'll see what happens. The President says that a lot. The I was just using though, and after reading all the the, you know, analysis and some of it's good, some of it's not so great. But for me, the I don't know if we're frenemies. China maybe friend is is too much of a, you know, it's not really frenemy, but, but we sort of have to put up with each other because of global trade for some reason. I think that for China and for the United States, they're both in a position to make things sort of more positive and more conciliatory. China has stalled. There's just no doubt that trying to transform itself to a consumption economy that has stalled and they make gains. EAMON but the personal GDP, $14,000 in China versus in the United States, I think it's $90,000. They're nowhere near the level of providing for their people the way the United States does at this point. Then I liken that, though, to Iran. They might not have, they don't have elections. She doesn't have midterms coming up. They don't have to care as much about the state of the, of the overall population, but, but they do want to move forward. So I don't know, some of these intractable issues, it's in the interest of both parties maybe to try to come to some type of understanding.

[Eamon Javers]

Yeah, the buzzword you hear here and sort of in foreign policy circles in Washington around this meeting is stability. The idea that both of these countries, you're right, Joe, both of them right now have an interest in stability. The Chinese economy, as you point out, is not great right now. When you talk to people on the street here in Beijing, you get a sense that this is an economy that has slowed. It's not as bad as it, you know, certainly during the COVID years, which were pretty tough here. But, you know, you do get a sense that restaurants are, you know, hurting a little bit for business and that sort of thing. So they do want some predictability, some stability, both in the trade relationship and in the Iran situation. China gets a lot of oil from the Strait of Hormuz. They really depend on that being open, and they're going to want to see some resolution to that situation as well. And of course, the Iranians are something of a proxy for the Chinese, so the Chinese have a lot of leverage there as well. So the question is, can the presidents, you know, face to face, come up with some sort of solution to that situation? A lot of skepticism that there will be some sort of ultimate solution here, but maybe just a work through or workaround that could work for the time being. Again, that buzzword being stability.

[Joe Kernan]

The restaurants, can you give me firsthand knowledge of is it happening? Are there great Chinese food I understand is possible.

[Eamon Javers]

They do. They do have a lot of Chinese food here. Look, Joe, you haven't lived until you've had Peking duck in Peking. It's really good.

[Joe Kernan]

It's, it is really good.

[Eamon Javers]

We've had a chance. We've been on the ground here for a couple of days.

[Joe Kernan]

Not Beijing duck.

[Eamon Javers]

It's. It's called Peking Duck on the menu.

[Joe Kernan]

Yeah.

[Eamon Javers]

And it's fantastic. Little plum sauce. It really terrific. We had a chance. We got out to the Great Wall. We got out to Tiananmen Square earlier today, saw the Forbidden City. So this place is packed with tourists. So it's not like the economy is suffering so much that tourists from the interior of China can't come because I waited in line behind a lot of them.

[Joe Kernan]

You don't need to answer, but do you. Do you, like, have a burner phone? I mean, how much do you think about, you know, you're using your normal equipment. I bet you have to think about that, don't you?

[Eamon Javers]

Yeah, we. Yeah, we do. And there's a whole procedure. We've taken a lot of. A lot of security precautions.

[Joe Kernan]

Yeah, just leave it in. Yeah, yeah.

[Eamon Javers]

And that's all I'll say about that.

[Joe Kernan]

Yeah. Okay, good.

[Eamon Javers]

But I've got a code name. You can message me on the code name. I'm not sure any of it will work. Right. I mean, I'm not going to go toe to toe with the Chinese services.

[Joe Kernan]

Is it a cool code name? You should have a cool one.

[Eamon Javers]

It's really, really cool, but I'm not going to tell you what it is.

[Joe Kernan]

Okay. You'd have to kill me. All right. Thank you, Eamon. We'll see you again. Companies looking for tariff refunds after the Supreme Court ruled that President Trump's levies, in their current form, the tariffs were unconstitutional, have started to receive payments. The CFO of heavy truck maker Oshkosh. Oshkosh. Did you ever have Oshkosh B'. Gosh, that's what I meant. I was gonna ask.

[Andrew Ross Sorkin]

Absolutely.

[Joe Kernan]

Some overalls, did you wear those, like, up in Cornell or something like it?

[Andrew Ross Sorkin]

No. As a child.

[Joe Kernan]

As a child, yes. I had a guy, went to school.

[Bob Hormatz]

That's all he wore.

[Joe Kernan]

Oshkosh Bhagat in college. Yeah. It was like, you know, had that. This is. This was the 70s. Anyway, Oshkosh confirming to CNBC his company started getting paid back yesterday. I hate even admitting that. When were you. When did you graduate?

[Andrew Ross Sorkin]

1999.

[Joe Kernan]

Toy Company Basic Fund also said it began getting refunds. Its CEO told CNBC that the company will use the money to help support 2026 cash flow and to increase employee salaries and give larger merit increases. In a radio interview, President Trump called the tariff refund situation, in his words, crazy. Separately, an appeals court has temporarily paused the lower court ruling against the Trump administration concerning 10% tariffs that the White House instituted after its earlier tariffs were ruled unconstitutional.

[Andrew Ross Sorkin]

Yabba dabba doo.

[Joe Kernan]

Okay. That Oshko.

[Andrew Ross Sorkin]

No, no, that's the Flintstones. I know that's the Flintstones from the Stone Age.

[Joe Kernan]

Oh. Because I was born in the.

[Andrew Ross Sorkin]

Okay, you see where.

[Eamon Javers]

Yeah.

[Joe Kernan]

All right. All right.

[Andrew Ross Sorkin]

We're just gonna start playing that.

[Joe Kernan]

That 99.

[Andrew Ross Sorkin]

We're gonna start playing the Flintstone theme song when squawk box comes 99 yabba dabba doo.

[Joe Kernan]

But none of the people that you know even know what what the Flintstones are I don't think do they I mean so many culture I see things on Twitter where they say do you know this person? It's like the most famous person in the world. You know what I mean? It's like but people don't know things that happened before a certain the year 2000.

[Bob Hormatz]

Yeah.

[Joe Kernan]

Sad for me. Sad for me. We landed on the moon and a Senate approving Kevin Warsh to join the Federal Reserve's board of governors. The vote was 51 to 45. Democrat John Fetterman crossed party lines to approve Warsh, the only one. A vote to make Warsh chair of the Federal Reserve is expected today. Jay Powell's term as chair expires on Friday, though he's indicated he'll stay on the Federal Reserve Board. Coming up, we're going to talk about President Trump's China trip with former Undersecretary of State Bob Bormatz. Goes way back. I read I couldn't be to the Nixon administration, but he goes way back. Another very wise man.

[Bob Hormatz]

Rock Box we write that there's sort of a social contract they the people will follow the Communist Party and xi, but the Communist Party and XI have to deliver better standards of living and they have a lot of unemployment and they have a lot of problems in the real estate sector.

[Joe Kernan]

Hey, Fidelity. How can I remember to invest every month?

[Katie Kramer]

With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs.

[Joe Kernan]

Huh, that sounds easier than I thought.

[Katie Kramer]

You got this?

[Joe Kernan]

Yeah, I do. Now, where did I put my keys?

[Katie Kramer]

You will find them where you left them.

[Eamon Javers]

Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC Member NYSE SIPC

[Joe Kernan]

what made you confident that you could

[Joanna Stern]

do something that hadn't been done before? I have no fear of failure.

[Katie Kramer]

Trailblazing women, changing the game One of my favorite pieces of advice, think about

[Joe Kernan]

what your boss's boss needs.

[Katie Kramer]

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.

[Joanna Stern]

Welcome back.

[Katie Kramer]

You're listening to Squawk Pod from CNBC Today with Joe Kernan and Andrew Ross Sorkin.

[Eamon Javers]

Stand by, Joe, in five seconds. Four, three, two, one.

[Bob Hormatz]

His mic here.

[Joe Kernan]

My Bob Formats let's get to talk about person Trump's two day summit in China with President Xi Jinping. Elon Musk, Jensen Huang, Tim Cook and more than a dozen other top executives are going to join the President. Joining us now, joining us now, Bob Hormatz, former Vice chairman of Goldman Sachs International, served in both Republican and Democratic administrations in a variety of roles including Under Secretary of State and going to break. I said I think you were in the Nixon administration. And I said no, that can't be right because you're still a young man. But now you tell me you were 24 years old, you were part of, I guess the Nixon contingent that met

[Bob Hormatz]

with Mao Zedong on the Nixon visit,

[Joe Kernan]

but you were working with Kissinger, right?

[Bob Hormatz]

I worked with Kissinger and did a lot of the planning on the economic stuff for the Nixon visit. Since I was Kissinger's economic advisor.

[Joe Kernan]

I always say while I was alive for these things, I did not realize that Nixon actually, that Mao was still around.

[Bob Hormatz]

Mao was still around, he was in his 80s, but still quite knowledgeable and thoughtful. And Nixon and Mao had actually some very good conversations. Kissinger, Joe and Lai did a lot of the planning for the meeting, but Nixon himself wanted to go. He'd been a strong anti communist, but he also realized that China was a rising power and the United States had to have a relationship with them.

[Joe Kernan]

That was a major thing that Nixon did. That is causing, I think his entire narrative historical legacy to be revisited or at least it should be because that was so monumental and monumental.

[Bob Hormatz]

And it was Nixon and Kissinger who decided it was not a popular thing necessarily in the US but they realized that this was a rising power. And now years later, now we know China, now we know and for the first time in nearly 100 years, the United States is negotiating with a peer great power, kind of peer great in many areas, not every area, but certainly from a military, political, economic and technological perspective. They're the most broadly based competitor and most advanced competitor we've had to deal with in many years. Which, and they have that sense of

[Joe Kernan]

confidence, how many people died in the,

[Bob Hormatz]

in the Great leap forward? Yeah, 20 to 30 million people stored no food.

[Joe Kernan]

So that, that was my point and what I was getting to is now I don't know, I'm not an admirer, I'm sorry. People that have a picture of Mao on their desk, I think have a screw loose. And I was going to ask you whether President Xi is different fundamentally in his view of what he wants to bring to the 1.4 billion people that live there. I don't know what Mao was thinking. I think Mao wanted to make China preeminent, definitely. And I think Xi wants to do the same thing. Is it sometimes at the expense of.

[Bob Hormatz]

Well, that's a very good question. Mao had two major preoccupations. One, he kept referring to the fact that we were bullied in the last century by the foreigners because we were weak and divided and they'd had a civil war, as you know. And second, both he and Xi, but particularly Xi, did a lot of work on why the Soviet Union fell apart. And she concluded that it was because the party had gotten weak. They become too dependent on a few commodities, particularly steel and energy, but not a broadly based economy. They only had a very few trading partners and they were vulnerable to the US Xi wants to create a situation where none of those happen. He wants to diversify his markets and his supply chain. He wants to avoid being bullied by foreigners. He wants to make sure that when he does something, he has a united party behind him.

[Joe Kernan]

What's all that mean for what President Trump tries to do?

[Bob Hormatz]

It means that when President Trump goes there and asks for something, Xi will come back with a lot of confidence that China is an equal or close to an equal on technology and other things and will stand up to him and has leverage over the US it used to be that foreigners had leverage on China. Now for the first time, China has leverage over foreigners.

[Joe Kernan]

But just how much is, I think, a question. So personal gdp In China, $14,000, how much lower? Personal GDP in the United States is $90,000.

[Bob Hormatz]

Much lower than that.

[Joe Kernan]

My point was that whether Xi cares about people has a direct bearing on how tough a stance he takes against the United States.

[Bob Hormatz]

Well, he has. He cares about two things. One, not being bullied. He cares about China asserting itself at

[Joe Kernan]

the expense of his people.

[Bob Hormatz]

Then, then that was the second point. And that is the one thing about China is there's sort of a social contract. They, the people will follow the Communist Party and Xi, but the Communist Party and Xi have to deliver better standards of living. And they have a lot of unemployment and they have a lot of problems in the real estate sector. And she does care about those, which in part is why I think this is going to be relatively tranquil summit. She does not want a big dust up with the US he has to concentrate on a lot of domestic things.

[Joe Kernan]

Then he's playing a long game still, isn't he?

[Bob Hormatz]

They play the long game all the time. Even mao in the 50s, when China was a developing country made the point that we want to be able to catch up with the US to avoid the US pushing us around. And that'll take about 50 to 75.

[Joe Kernan]

Do you think. Do you think. I don't know why we didn't book a longer segment because we, you know, you're so knowledgeable and all these things. But do you think that there will be some attempt by Xi to get Trump to change President Trump to change our stance on, on Taiwan?

[Bob Hormatz]

Absolutely.

[Joe Kernan]

He's going to try and get.

[Bob Hormatz]

He will. He will do two things. One, he'll try to get language out of Trump that sort of implies that the US Wants to have a peaceful

[Joe Kernan]

solution to Taiwan that includes it becoming part of China.

[Bob Hormatz]

He won't. He won't say that precisely, but he'll make sort of innuendos that say we understand why China wants to get closer to Taiwan and encourage the two of them to work out their differences in a positive way. He won't, I don't think, insist that they unify, but I think he will give positive statements that Xi will find helpful. But the other thing is, Xi looks at the US and says, look, the US Is overextended in certain parts of the world. We're preoccupied with Iran, which is sort of a semi ally of China. But now it gives Xi an opportunity to expand China's military presence throughout the South China Sea and the East China Sea. All these little islands or semi islands or rocks that have been made into air force bases, quite extensive, big ones, and that China now has an opportunity, it's not so much to invade Taiwan, but it's to extend its military presence in the region, making it more difficult, in case they ultimately do, for the United States to intervene.

[Joe Kernan]

Well, the president's predilection to wanting to make deals and trade deals, will that cause him to maybe become too close to China and accept it? Let's say they say we're going to invest a trillion dollars in the United States. Do we, security concerns be damned, do we let something like that happen with the allure of a huge investment in the United States?

[Bob Hormatz]

That's one of the things that Xi is going to test at this meeting.

[Joe Kernan]

Should he say yes, or should we?

[Bob Hormatz]

I think he. I think he has to. We're selling the China, the Taiwanese, a lot of military equipment.

[Joe Kernan]

Right.

[Bob Hormatz]

So it's not that we're abandoning them, but I do think that the allure of these big deals made by the mainland big CEOs, and either in terms of investment on the mainland of China or in terms of getting working with Chinese companies to get them to invest here. Well, Trump will come back and say, well, this trip created a lot of jobs here or companies that have difficulties in dealing with Chinese regulations. They'll try to work them out. But I think if you talk about awe, you're seeing the top CEOs of the top American companies going there and the Chinese want to get their economy going. They certainly are doing extremely well from a technological point of view. But they also want to establish more partnerships. What they don't want to do is become dependent on American technology because their concern is that if they get too dependent on American technology, then the United States can use that as leverage for

[Joe Kernan]

the rare earth stuff that we're dependent

[Bob Hormatz]

on and we're dependent on their rare earths. But they don't want to be dependent on our chips because they see the United States as first of all unpredictable. But they see it as a country that would use leverage. Perhaps in certain situations they don't want to be in a position where they're

[Joe Kernan]

we're going to see so much written about, you know, half the articles are going to be that we were taken to the cleaners and the other half are going to be that it was a great deal and we need you to come back.

[Bob Hormatz]

I think it'll be somewhere in the middle. I think it'll be, I think they want tranquility. I don't think they want dust up. But they will have controversial conversations over what China is doing to support Iran. The president's certainly going to raise that. Okay. And Xi will certainly raise Taiwan and opportunities that he sees for China to play a greater role in the whole Asia Pacific region with the Americans preoccupied somewhere else.

[Joe Kernan]

See what I'm saying, smart guy? Is there a 1973 in the game? In the game and see how that helps. I mean, what if we had a, you know, a 23 year old trying to talk about China? Can't you see how there's an advantage to age wisdom?

[Andrew Ross Sorkin]

We gotta go.

[Eamon Javers]

Cheese will be next.

[Katie Kramer]

Coming up on Squawk Pod. Would you let AI run your life, your home, even your medical care? Over the last year, writer Joanna Stern did just that. She explains how it went right after this.

[Joanna Stern]

I've got humanoid robots and home robots in here. I've got self driving cars and yes, a big focus on generative AI in the large language models.

[Eamon Javers]

Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate Traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn [e-mail] trading what made you confident

[Katie Kramer]

that you could do something that hadn't been done before?

[Joanna Stern]

I have no fear of failure.

[Katie Kramer]

Trailblazing women, changing the game.

[Joe Kernan]

One of my favorite pieces of advice, think about what your boss's boss needs.

[Katie Kramer]

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short, and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts, this is Squawk Pot. Here's Joe.

[Joe Kernan]

Our next guest let AI control her life for a year. Join us now. Joanna Stern. And off camera, I was saying, I, I didn't think AI was. And you're not a robot. You're, you're willing to, you said, give

[Joanna Stern]

me a test if you inflict pain.

[Joe Kernan]

But you said if, if we try to inflict pain, that you won't flinch, so.

[Joanna Stern]

Well, that's just today after, after being on the book tour for, for 24 hours. But let's try. Let's try. Throw something at me.

[Joe Kernan]

You're feeling no pain.

[Joanna Stern]

This viral moment. Throw something at me.

[Joe Kernan]

You wanted to be the first to do this. And I was saying I didn't think for me at least, AI was not ready for prime time. I don't know if it's ready for prime time now because half the things it tells me are not true or wrong. And then it checks and it says, oh, yeah, you're right. So I'm better than they are at this point. Than it is. But you started a year ago with this.

[Joanna Stern]

I started at the beginning of 2025. And you're absolutely right. At that point, AI was absolutely not in all places of our life ready for primetime, and right now, it's not ready for primetime in all spots of our lives. Over the last year, did it get considerably better? Absolutely. And is that because these companies are throwing lots of money and lots of compute added? Of course. But also they are coming up with new forms of products and that was what I wanted to explore here.

[Joe Kernan]

So how did, how did you do that? How did you let it, what parts of your life did it run and how were you able to do that? And did it work? Is Your life better?

[Joanna Stern]

I wouldn't say better. And I'm very clear in the book that I was going to try as many AI products as possible for the year and that I brought in the definition of what you guys talk a lot about on this show right now, which is generative AI and this move with the large language models. But I wanted to go beyond that. And I've got humanoid robots and home robots in here, I've got self driving cars and yes, a big focus on generative AI and the large language models like Gemini, Claude, ChatGPT. So when it came to having the large language models and the chatbots running my life, I had to make some rules because I realized pretty quickly if I do this, I'm going to lose my job and I'm going to lose my spouse and I'm probably not going to exist as a good human in society. But I was able to really, in a couple areas of my life, I would say work, obviously being a big one, really start to test those tools and really start to see where I could offload a lot of the administrative and the grunt work that I was doing to AI. And that is the part I think that is considerably better. A year with agents. A year. A year ago today there was, I would say 50% of the things I can do now I couldn't do.

[Joe Kernan]

I mean it's obvious for, for a journalist, AI can be unbelievably helpful. For a student you imagine.

[Joanna Stern]

Not in a good way.

[Joe Kernan]

Yeah, maybe not a good way. No.

[Andrew Ross Sorkin]

If you were to, if you were to tell the audience there's like news you can use the things that you think you could automate today that are actually worth it, worthwhile in your life that maybe we're not thinking about. You would give what kind of examples?

[Joanna Stern]

They're nuanced examples. So do I think you can automate only, you know, responding to your inbox? Not very well.

[Joe Kernan]

Sure.

[Joanna Stern]

You can have AI automatically right now, respond to your emails. They just, you got to give a lot of trust over to it.

[Joe Kernan]

Right.

[Joanna Stern]

So for me there have been places in my life where I have automated certain processes that. Look, is the risk really high if something were to go wrong? Not really though of course there we're moving into big spaces in that and in enterprise and beyond. But for me there have been a few tasks really multi step processes have gotten extremely better over the last year, especially with flawed code. So for instance, I built a website to promote this book. I have a pin promotion going. If you pre order the book, I'll send you a pin. That entire process is being done by AI in the back end. You upload your form, your receipt. AI is processing that receipt, confirming your address, confirming that it looked at that, upload that receipt. It then goes into a spreadsheet. As soon as it hits the spreadsheet, it sends an email to my publisher. All of that is automated for me.

[Andrew Ross Sorkin]

What about your own personal agency? So I was telling Joe a couple weeks ago, I went on like what I described as a Claude Bender. I mean, I was deep, deep with Claude. Like I was making, I was trying to make this app and this other a. I was doing. I. But I was so deep in it that by the time I got out of it and actually had to go back and do my day job and actually like write things, I was like, oh my God, I want to go talk to Claude about that. I need to. And like, I, like, I lost my way and I had to sort of power through to keep going without it affecting so much. I just, it became like a bizarre addiction for a moment. And so the reason I mentioned this is I wonder whether you think that's going to happen to people where they're going to ask clawed, you know, before they go to the bathroom or not. Whether what, what? You know, whether they need help in some way. That's. You see what I'm saying?

[Joanna Stern]

Yes, yes. The dependency, the dependency that you form when you're working with this being or this thing and you're going back and forth and back and forth and then you don't have it anymore and you're like, wait, who am, who am I working with?

[Andrew Ross Sorkin]

But then the other piece of it is, you know, hopefully here we're, we're a little older, we have some experience. And so sometimes you'll see an answer that one of these models will give you. That sounds about right. But if you think about it like a little bit longer, you're like, yeah, I don't think they really understand. And then you may be pushed back. But then I think to myself about a younger person, like my kids who may not have that experience to be able to go, oh, that doesn't make any sense. It sounds cool, but. And that might. So how do you see that?

[Joanna Stern]

Well, first of all, that's one of the biggest things I talk about in this book. And actually my kids, I did not expect this journey to involve my kids as much as it did. I had a four, I have a four year old and an eight year old. They were three and seven at the time. I was Bringing home all this tech. And I said to Jody, your point? I said, I'm going to try for a year. Any problem we have, any question we have, we're going to be asking ChatGPT Claude first. They saw that, they experienced that. So do they have some lasting effects from this year? Do they sometimes pretend they're robots? Absolutely. But they're also questioning AI so much more than the average kid because they saw us get things wrong. Right. They saw the AI get things wrong and they saw us then have to res the results of that where AI gave a response. I've told this story a few times, told my son his praying Mantis was pregnant. AI, you know, we pointed the ChatGPT live mode at it said, oh, absolutely, this praying mantis is pregnant. My son was so happy, he was thrilled. Two days later, the praying mantis dies. Right? And that was a learning for him, sad learning for all of us that this was wrong. And so absolutely, I think that's the number one thing we've got to be teaching our kids. And we also have to be restricting their use of this.

[Andrew Ross Sorkin]

You would. What's your age cut off? Are you in the John Haidt, Rahm Emanuel, 16 years old camp?

[Joanna Stern]

I don't think that's realistic. I don't think that's realistic. We're going to have kids out there trying this stuff for research and information. I think we have to look at it in sort of a Google way for some of it. But for these chat bots and these companions to have deeper relationships and being able to go out there and have freewheeling conversations with them. Absolutely.

[Joe Kernan]

Is it, is it a benefit for the designers of these LLMs to design them? So they may know nothing, but they're never in doubt? I don't know why in the algorithm it doesn't. It never comes back. You know what? I'm not really sure on this or I'm not up to date on this because it tells me stuff and I go, yeah, wait a second, and go, oh, yeah, on further inspect. Why in the first place doesn't it just admit that it doesn't.

[Joanna Stern]

The hallucinations are. Were originally and they've gotten a lot better. But the hallucinations were an outgrowth of the way these were made. And so in many ways, the way we first got this was they were word calculators, right? This was predicting the next word. We've seen a lot of improvement in that. We've seen these deep research tools, we've seen these agentic tools, these are doing deeper Processing now. They still can't quite admit something isn't.

[Joe Kernan]

Joanna, if. If you have a really healthy praying mantis, what are we talking about? Lifespan? Because I was going to suggest, like, a dog. A dog, something. What's the lifespan of a praying man? What's the best you can hope for with your praying mantis?

[Joanna Stern]

I will have to ask Chat. GPT.

[Joe Kernan]

Is it a year?

[Joanna Stern]

You know, I would think it's probably a year.

[Joe Kernan]

Really? Okay. I think of it as a bug.

[Joanna Stern]

It is a bug.

[Joe Kernan]

And I didn't think the lifespan, Like, I wouldn't adopt the fly because I think that's 24 hours.

[Joanna Stern]

You know, I have.

[Joe Kernan]

It's a weird pet. Have you ever heard. Have you had a praying mantis in the backyard?

[Andrew Ross Sorkin]

I'm aware of that.

[Joe Kernan]

Caught it in the back.

[Bob Hormatz]

Okay.

[Joanna Stern]

Caught it in the back.

[Joe Kernan]

Okay. So you didn't buy it?

[Joanna Stern]

No, we did not buy it. But then we had a praying mantis store. We had a terrarium. We support this.

[Joe Kernan]

Okay, I get that.

[Joanna Stern]

Are we on national tv? And I'm admitting this. This is great.

[Joe Kernan]

We're still there. We still are.

[Andrew Ross Sorkin]

We're still on tv.

[Joe Kernan]

Still on tv.

[Andrew Ross Sorkin]

This is not a commercial break.

[Joe Kernan]

That's a first. In a. Pregnant. Pregnant. I think you need two from.

[Joanna Stern]

I assume that that's how it happens. Would have happened normally.

[Andrew Ross Sorkin]

It never happened unless the AI was.

[Joanna Stern]

Joe, I'm, you know, I'm coming and bringing you some praying mantises next time.

[Joe Kernan]

Okay. You know, I bought crickets to feed, but it was to feed a. I think a turtle or something. Right.

[Joanna Stern]

Look, I know we're still on air, but we've got a new snake in our house, too. So I love.

[Joe Kernan]

Yeah, we have one in our backyard. Beautiful, shiny garter snake.

[Andrew Ross Sorkin]

You were feeding your. Your turtle crickets?

[Joe Kernan]

Yeah, I believe so.

[Joanna Stern]

I think that's sounds right.

[Joe Kernan]

I believe.

[Andrew Ross Sorkin]

You know what?

[Joe Kernan]

Some people.

[Andrew Ross Sorkin]

Well, I don't want to say.

[Joanna Stern]

Look, showing the book. This is great.

[Andrew Ross Sorkin]

This is it.

[Joe Kernan]

We got to show it again. I'm not.

[Joanna Stern]

If you love AI or you hate AI, buy this book. And also if you love praying mantises,

[Joe Kernan]

I asked what's the name of the book? She said, I am not a robot. So I'm not convinced. It's in bookstores now.

[Katie Kramer]

And that is Squawk Pod for today. Thank you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern to get the smartest takes and analysis from our TV show right into your ears. Please follow Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow.

[Bob Hormatz]

We are clear.

[Eamon Javers]

Thanks guys.

[Joe Kernan]

Foreign.

[Eamon Javers]

Introducing Fidelity Trader Plus. With customizable tools and charts you can access across all your devices, try our most powerful trading platform [e-mail] TraderPlus investing involves risk, including risk of loss.

[Andrew Ross Sorkin]

Fidelity Brokerage Services, LLC Member nyse, SIPC.