← The President's Daily Brief
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
00:58:46
Loading summary
Transcript98 lines
- [00:01]
Jevon
Hi, this is Jevon, your blinds.com design consultant.
- [00:04]
Customer
Oh, wow, a real person.
- [00:06]
Jevon
Yep. I'm here to help with everything from selecting the perfect window treatments to.
- [00:10]
Shopblinds.com Representative
Well, I've got a complicated project.
- [00:12]
Jevon
No problem. I can even help schedule a professional measuring install. We can also send you samples fast and free.
- [00:18]
Listener
Hmm.
- [00:18]
Shopblinds.com Representative
I just might have to do more.
- [00:20]
Jevon
Whatever you need.
- [00:21]
Shopblinds.com Representative
So the first room we're looking at is for shopblinds.com now and save up to 40% site wide. Blinds.com, rules and restrictions may apply.
- [00:42]
Mike Baker
Welcome to the PDB SITUATION report. I'm Mike Baker, your eyes and ears on the world stage. All right. Let's get briefed. It's been a crazy week, if you haven't noticed. I, I suspect you've noticed. We'll kick things off with President Trump doing a U turn on global tariffs, but not when it comes to China. In fact, he's ramping up, slapping a 104% tariff on Chinese goods. And Beijing, well, they're already retaliating. Gordon Chang joins us to talk about what this economic showdown means for China and for us. Later in the show, we'll bring you the latest from the battlefield. Both Russia and Ukraine have reportedly launched new offensives, raising the stakes on multiple fronts. George Burroughs from the Institute for the Study of War. He joins us with the latest on where things stand and where they could be headed. But first, today's SITUATION report. Spotlight. The past week has been a wild ride. That's, that's putting it mildly. Markets bounced around as President Trump hit pause on his global tariff push, except when it comes to China. After Beijing fired back with 84% tariffs on US goods, Trump responded with a brutal 104% tariff on Chinese imports. That one's still in place. Now, this could spell serious trouble for China. Their economy depends heavily on exports. And if those slow down, well, the pain could run deep. But just how much damage are we talking? Joining us now is someone who's been warning about this for years. And that, of course, would be good friend of the show, Gordon Chang. He's the author of Plan Red China's Project to Destroy America. And you can check him out on Epps at Gordon G. Chang. Gordon, thanks very much again for joining us here on THE SITUATION report. Always excellent to talk to you. We've been on a roller coaster ride here when it comes to the tariffs, particularly with China. Give me your sort of your 30,000 foot view on what's been taking place over the past week or so and where you think it might be going.
- [02:43]
Gordon Chang
A lot of presidents have let the China trade matters slide and Trump had the courage to take this on. You know, we hold all the high cards. We're the bigger economy. China is the trade surplus country. They ran a $295.4 billion merchandise trade surplus with us last year. So they've got everything to lose and we dump. But Xi Jinping believes that he can intimidate President Trump into surrendering preemptively because they're trying to get Wall Street, C Suites, Main street to put pressure on Trump to cave in. I don't think Trump will do that because we know on Wednesday Trump imposed tariffs of 145% on China. And that's a real demonstration of political will. I think the Chinese are going to take a long time to come to the table. This is going to be a lot of friction, a lot of tension. But we need to get this done and we need to get this done on our terms.
- [03:43]
Mike Baker
What do you think they make or how do they interpret the pause? The 90 day pause has just been put into place. Look at that as a sign of weakness on the White House's part or are they interpreting it in some other fashion, do you think?
- [03:58]
Gordon Chang
I think that they understood that Trump reacted to the bond market by the Japanese dumping bonds. So that's one way. But I think they're ultimately, they realize there's a real danger in this and that is the US Is going to come to terms with a lot of countries, you know, Japan, South Korea, the eu. That's going to leave China out in the cold because as senior Trump officials have been saying this week, those countries that come to terms with us early are going to get the best deals. And China is sitting on the outside because they can't pick up the phone, which means they're going to be pretty much in trouble. Remember these guys in Beijing, they're not going to be selling a lot of stuff to the US because of the 145% tariff. That means they got to dump their products on other markets, other markets. They're just not going to accept this flood of Chinese products because they cannot see their own manufacturing sectors being decimated. So China is in a really difficult position because it is now more export dependent than it has ever been.
- [05:04]
Mike Baker
I've heard some people talk about the fact that, you know, China's fundamental structure will probably prevent them, in terms of the Chinese Communist Party, I'm talking about will probably prevent the, the CCP from proposing or agreeing to any deal that the Trump White House might deem acceptable. What do you make of that? I mean, how much room does the CCP have here to actually negotiate a deal that. That the White House might look at and say, yeah, we can accept that.
- [05:37]
Gordon Chang
Yeah, I think there's very little room to maneuver. And the reason is that China's predatory trade policies and its criminal acts, they're inherent in the nature of the Communist Party's system. These are the things that have got us upset about China in the first place. These are the things that Beijing cannot negotiate away. The other thing here is that Xi Jinping has configured the Chinese political system, said only the most hostile answers are considered acceptable. So the economically rational thing for Xi Jinping to do is to pick up the phone, call Trump, and sort of make a lot of concessions to get a deal. I mean, these are. He can make concessions. Xi Jinping can make concessions and say, I'm never going to honor them, but that would be the rational thing to do to get Trump to say yes to something, but he can't pick up the phone. And that's because he's backed him, boxed himself in.
- [06:35]
Mike Baker
What do you mean by. I mean, if you could clarify that a little bit, when you say that only the most hostile responses are acceptable, can you elaborate on that?
- [06:41]
Gordon Chang
Xi Jinping has declared the US to be China's enemy. They did that in May 2019 with a landmark editorial in People's Daily which declared a, quote, unquote, people's war on us. That is a phrase which has great resonance in Communist Party history. It's total war. So if you believe that you're in total war with an enemy, that you're in an existential struggle, how can you make concessions to that enemy? Your position is you've got to defeat them, you've got to destroy them. You can't sort of make nice to them, you can't make big agreements with them. So I think that Xi Jinping has now sort of put himself in a position where he is only going to accept something, where it's clear that the United States has submitted, has gotten on its knees and begged China for an agreement. I don't see Trump doing that. And so this is going to be very, very difficult for the Chinese regime. And, you know, we have to understand the regime may not survive this.
- [07:49]
Mike Baker
Really, that. Okay, that's. There. There's a sound bite that I think might get clipped out. Talk to me about. About that. I mean, from a. From a timeline. I know this is a tough thing to. Because there's so many you know, elements here to take into account. But from, from a timing perspective, at the current rate, at the tariff rate that, that has been set now for China, I mean, what are we talking about? If you're, if you're, if you're thinking about a breaking point, how long can they sustain that sort of back and forth in a trade war?
- [08:21]
Gordon Chang
I've been wrong on timing before, so I'm probably the worst person to ask that question. But I don't think that they can sustain it for too much longer. And there's a couple reasons. Xi Jinping, because he's turned his back on consumption as being the fundamental basis of the Chinese economy. There's only one way out to rescue an increasingly grim situation, and that is to export more. China's not growing at the 5.0% pace reported for last year. It's may not even be growing at all. But we know the trend is down because we can see price signals that suggest actually who screen deflation. But even if China were growing at 5 0, it probably wouldn't be growing fast enough for those guys to pay back debt. China not only has a problem with Trump at this moment, China not only has a problem with an economy that looks like it's contracting, China has now its 2008. In 2008, they did not want to suffer a recession, so they overstimulated their economy, they piled on the debt, and now that debt is just too heavy. So you've got all of these crises hitting at the same time. And so Xi Jinping, who, a couple months ago, you know, he looked like he was going to rule the world, right? Now he's going to be lucky just to wake up alive in the morning.
- [09:43]
Mike Baker
Okay, well that, that implies that they may do something drastic or he may do something drastic. Right? I mean, what. Give me the, the sort of, the, from your perspective, the realistic scenarios, I mean, obviously we, we've got one which is, okay, they sit down at the table and they negotiate and you know, this thing blows over. But it doesn't sound like you believe that that's got really any, any running room. So how do you anticipate this thing solving itself?
- [10:10]
Gordon Chang
Just to tie up that one point, I think that they're going to wait too long to sit down with Trump. I think that they are going to try and flood other markets. I don't think that's going to work. I think that Xi Jinping probably is seeing a closing window of opportunity. And this is the way I believe that he's calculating things right now. He knows that a war would be really, really unpopular with the Chinese people, especially a war on Taiwan. But I think that Seed believes that a war would help him in one very critical way, that is, it would prevent other Communist Party figures from challenging him. So I think it's in his interest or, you know, maintain these provocative activities. And remember, in the last couple weeks, we have seen Chinese provocative activities in South Korea against Japan, against Taiwan, against the Philippines and against Australia. So something's going on here which isn't very good, and one of these provocations could escalate into a war. I don't think Xi Jinping can control that escalation. He can't come to terms with whatever he's picked on. So this is one of the more dangerous moments in history.
- [11:23]
Mike Baker
Well, Gordon, on that cheery note, if you'd stay right there, we've got to take a quick break, and then we'll be back with Gordon Chang here on THE SITUATION report. Stay with us.
- [11:34]
Shopblinds.com Representative
American Giant makes great clothing, sweatshirts, jeans and more right here in the U.S. visit american-giant.com and get 20% off your first order with code STAPLE20. That's 20% off your first order. At american-giant.com, code STAPLE20.
- [11:50]
Jevon
Step into the world of power, loyalty and luck. I'm gonna make him an offer he.
- [11:55]
Gordon Chang
Can'T refuse with family. Cannolis and spins mean everything.
- [12:00]
Jevon
Now you want to get mixed up in the family business.
- [12:02]
Gordon Chang
Introducing the godfather@champacasino.com test your luck in the shadowy world of the Godfather slot.
- [12:09]
Jevon
Someday I will call upon you to.
- [12:11]
Mike Baker
Do a service for me.
- [12:12]
Jevon
Play the godfather now@champacasino.com welcome to to the family. No purchase necessary. VGW Group void. We're prohibited by law 21 + terms and conditions apply.
- [12:21]
Mike Baker
Welcome back to the PDB Situation Report. Joining us once again is Gordon Chang. He's the author of Plan Red China's Project to Destroy America. And of course, you can find him on X at Gordon G. Chang. Gordon, I'd like to pick back up where we were during the last segment and the the notion that perhaps where this is heading is a conflict of some sort. Perhaps the the what? We've been waiting to Taiwan. Do you see that as more of Xi Jinping thinking, okay, I need a distraction. I mean, this is not, you know, a perfect analogy, but when you, when you look at Putin over the years, oftentimes what Putin's done, when he feels either threatened or perhaps looking to shore up support at home, he finds a a Bogeyman out there. Right. And, and, and you know, obviously the latest attempt is, is Ukraine, but do you see any similarity there? Are you saying that Xi Jinping may look and go, okay, what I need is a distraction, so let's have a conflict?
- [13:23]
Gordon Chang
Yeah. Because I think that he needs to make sure that other senior Communist Party figures doesn't, don't challenge him. This is what Mao Zedong, his hero, did. He did it during the Cultural Revolution. Mao couldn't start a war abroad, but he could start a war on elements in Chinese society. That's exactly what he did. Shore up his position in the Communist Party leadership. Xi Jinping, however, has the military to start a war. And that's what I'm really worried about. You know, I, I don't think that he would start a hostilities with an invasion of the main island in Taiwan. I don't think the Chinese military is ready for that. I don't think that Xi Jinping is ready for it. And there's a lot there. But the point is Taiwan could easily get involved in a war that starts elsewhere, because once a war starts somewhere, it's going to spread throughout all of East Asia and we're going to see conflict. It's just going to envelop all of these societies.
- [14:26]
Mike Baker
Okay, yeah, you mentioned Mao. Have you seen the, it was a, basically a, a blurb that the Foreign Ministry just put out that featured Chairman Mao talking about how, you know, the Chinese essentially will fight to the end and China, you know, will not back down. Have you, have you seen that? And what do you make of it?
- [14:48]
Gordon Chang
Yeah, that was Thursday from the Foreign Ministry, which was really quite extraordinary when you think about it, because it was over the top. It was a throwback to the Korean War. It was basically a threat that will go out and kill people if you don't come to terms, in our terms. So I, I, I worry about that as a signal. It shows the mentality of the Chinese regime and I think it shows desperation and a desperate Communist Party is a very dangerous entity. So, yeah, I mean, that, that we can't stop doing what we're doing because we absolutely have to do it, but we got to recognize and we got to be prepared for some pretty bad out.
- [15:36]
Mike Baker
And what, how would you describe. She's, you talked about this to some degree already, but how would you describe she's hold on on power? How tight is that grip?
- [15:47]
Gordon Chang
I don't think it's tight at all. And let me give you an example, you know, in the Communist Party's military, because The People's Liberation army reports to the Communist Party. It's not a state army. There's been purges upon purges, especially since around July of 2023. Most recently, the number three or the number two officer, depending on who you talk to, a guy named General Hui Dong, has been disappeared. He hasn't been seen in public since March 11th. And there have been reports that US intelligence believes that he has, in fact been taken out. This means, you know, a lot of people say, well, oh, you know, Xi Jinping just sacked another senior officer. I don't think that's the case. I think it's more likely that Xi Jinping's enemies at the top of the Chinese military took out a Xi Jinping loyalist, General Huo. And the reason is that we have been seeing, since July 9th of last year, these articles in PLA Daily, which is the main propaganda organ of the Chinese military. We've been seeing these articles praising collective leadership, quote, unquote. That is a direct challenge to Xi Jinping. And so these articles could not have been maintained without the support of the senior leadership of the pla, which means the senior leadership of the PLA is in, you might say, open revolt or not open revolt, but it's in revolt against the Chinese leader. Now, if you've got the guys with the guns not happy with you, that means your control over the military is weakened. And also, I believe that there's senior civilian party officials who are gunning for Xi Jinping figuratively, not literally.
- [17:35]
Mike Baker
What's the primary point of dissatisfaction, from the military's perspective with Xi?
- [17:40]
Gordon Chang
Well, Xi Jinping is taking the country off the cliff. The military can see it. I don't think that they're happy about that. The primary point of contention, though, would be that Xi Jinping has been purging people. They've been taking away their livelihoods. The other generals and admirals, they don't like that. And so they just. They. They don't want this at all. I think you have a military right now which is very divided. So it is not the type of military that is actually prepared to go to war, even though they've got some pretty neat weapons, some of them, which are better than ours. But the point here is that the military is a political military, and now it's very politicized.
- [18:27]
Mike Baker
Is there is. Is there a. A clear or obvious candidate, whether within the military or within the party, that stands to gain from Xi Jinping being pushed aside?
- [18:41]
Gordon Chang
Yeah, everybody, basically.
- [18:43]
Mike Baker
So. So you've narrowed it down, Gordon?
- [18:46]
Gordon Chang
Yeah, I thought you were going to ask, is there a specific person? Which is the reason why I was shaking my head. Yeah. No, I don't know if there's a specific person, but there are a lot of people who are unhappy. And the reason is when Xi Jinping became General party secretary in 2012, the understanding and the norms and the guidelines in the party was that he was only going to get two five year terms as general secretary of the party. And that means after the 10 years, there would be a whole new generation of leadership. People would get promoted. What Xi Jinping did by taking a third term was he was denying a whole generation of leadership the chances for promotion. And that means these people are not happy. They may not have the power to challenge Xi Jinping openly, but I think that they're waiting for sea to fall so that they can rise. And that means he's got a lot of enemies within the political system. Basically everybody.
- [19:48]
Jevon
Maybe.
- [19:48]
Mike Baker
I'm asking the question that really doesn't have an answer. But how does that work then? I mean, if, if they're waiting for she to fall, I mean, how does that. Is it. It's palace intrigue. Right, But I mean, how does that happen? Is, is the only entity capable of taking them out, the military, or is it, can the party act? And, and are they, you know, from your perspective, are they able or willing to.
- [20:07]
Gordon Chang
Yeah, there are no rules in the, in the party anymore, so anything can happen. So you know, in arts, you know, we always say, well, you know, in America, you know, the president has a short term because he's got midterms and then he's got four years, he's got to be re elected. And we say, you know, we Americans are short term thinking, but Xi Jinping, because he's jumped the rolls. I mean, he has an election every day and so he's got a really short term thinking. He needs to get by hour by hour. Because in that system anything can happen. You know, if you go back to Mao Zedong, that was sort of supposed to be a collective leadership. Mao got rid of the rules. Mao was supreme, but it also meant there were no rules. Now his successor, Deng Xiaoping, instituted and started to institute norms and guidelines and understandings about the way the party would transfer power from leader to leader. Xi Jinping jumped that, which means anything can happen, Mike. So the mechanics of it are anything, anything is on the table. And especially remember Xi Jinping. I know this is going on a little long, but I need to give you some context.
- [21:22]
Mike Baker
Yeah, please.
- [21:23]
Gordon Chang
When Xi Jinping took over in 2012. No, no senior Chinese leader got too much credit or too much blame because every decision was made by consensus across the top of the political system. But by taking power from everybody else, Xi Jinping ended up with total or near total accountability. Which means when things are going bad, Xi Jinping is being blamed for everything because he's got nobody else to blame. So you can see how that system can work where enough people get together and say, Xi Jinping, you're out. And by the way, we've got a lot of unhappy military officers who are ready to come in to Jongnan High, which is sort of like their White House. So things can be a little dicey there right now.
- [22:09]
Mike Baker
Well, okay, I, you know, we've got a, we've got a lot left to unpack, but I want to be mindful of the time. So all I can do is ask if you'd be willing to come back and pick this conversation up again. We'll see at that point whether there's been any movement related to the tariffs and trade negotiations. But Gordon, as always, it's excellent to speak with you and I really appreciate you taking the time with the situation report.
- [22:35]
Gordon Chang
Well, I really appreciate it, Mike, because this is an important conversation that you wanted. So thank you. I, I'm very happy to be here and love to do this again.
- [22:45]
Mike Baker
Excellent, excellent. Well, we will be pestering you to come back on. You can count on that. Gordon Chang, as always, excellent. Thank you so much, man. All right, There is a, that's a lot to digest right there. All right, coming up next, both Russia and Ukraine are on the move, each launching new offensives across the front lines. So you have to ask yourself what's behind the sudden shift in momentum? It seemed like just yesterday we were talking about, oh, they're going to sit down at the negotiating table. Well, George Barros from the Institute for the Study of War, he'll join us next with the latest at the Home Depot.
- [23:19]
Home Depot Advertiser
Spring Black Friday is here and we've got 14 days of deals to transform your space. So what you working on? How about a quick and stylish patio furniture update? And what's outdoor dining without a shiny new grill? Find a wide selection of grills under $300 like the next Grill 4 burner for only $229 at the home Depot. Then add a little ambiance with String Lights shop. Fourteen days of deals during spring Black Friday now through April 16th at the Home Depot.
- [23:49]
Listener
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days. Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card Based on the February 2024 Nielsen report, this episode is.
- [24:20]
Lifelock Advertiser
Brought to you by Lifelock. It's tax season and we're all a bit tired of numbers, but here's one you need to hear. $16.5 billion. That's how much the IRS flagged for possible identity fraud last year. Now here's a good number, 100 million. That's how many data points Lifelock monitors every second. If your identity is stolen, they'll fix it, guaranteed. Save up to 40% your first year. @lifelock.com podcast terms apply.
- [24:50]
Mike Baker
Welcome back to the Situation Report. Ukrainian officials say Russia's spring offensive is officially underway. Moscow has launched a fresh push in the northeast, with Ukraine's top military commander reporting a sharp uptick in fighting, nearly doubling across all major parts of the front line in just the past week. At the same time, Ukrainian forces are taking the fight across the border. Kyiv confirmed an incursion into Russia's Belgorod region. President Zelensky said the move is meant to ease pressure on other parts of the front, especially around the embattled Donetsk region, and to protect key northern areas like Sumy and Kharkiv. Do you remember when it just seemed like yesterday we were supposedly going to be talking about peace settlements? So what does all this mean for the trajectory of the war and who has the upper hand right now? Well, joining us to break that down is George Barros. He leads the Russia team at the Institute for the Study of War and tracks these movements daily. George, thank you again for coming back onto THE SITUATION report. Great to see you.
- [25:52]
Jevon
Hey, Mike, good to see you once again. Thanks for having me.
- [25:55]
Mike Baker
Absolutely, man. Listen, let's where do we start? It seems like, you know, it seems like yesterday when, you know, we were talking about they're going to sit down at the, at the negotiating table, peace is going to be breaking out and now we're talking about a spring offensive. What's going on?
- [26:14]
Jevon
So I think the key thing to focus on is Vladimir Putin very much decisively rejected US President Donald Trump's very straightforward proposal for a 30 day unconditional ceasefire. Putin rejected that. He instead said, well, we'll talk about a ceasefire and energy infrastructure. We'll talk about a ceasefire on the Black Sea. But the key issue there, that he rejected the main area where the actual fighting is happening, the land domain, which is where 95% of the killing is at. So that's important not to lose sight of. The Russians continue to want to conduct conventional operations. They want to keep war fighting. They see a military solution to this conflict. They think that they can wait out the west and they can wait out the Europeans. And time will tell whether or not we, we, the collective international community, they are able to continue keeping the Ukrainians in the fight. This government, US government, they currently accept this military situ, military solution to this war. I, frankly, as a, as a student and a historian of war, I have to disagree. If you look back in history, pretty much all wars actually have a military solution. It's just a question of on whose terms and when.
- [27:26]
Mike Baker
Yeah, there was a comment made by, I think it was a Foreign Ministry spokesperson from Russia the other day, and I, I'm just paraphrasing, but essentially it seemed like an incredibly revealing or insightful look at the Russian mindset right now, or at least Putin and, and his military's mindset. And that was he basically was saying, well, look, you know, why, why would we stop now? Right? We, you know, the US is backing away from Ukraine and we're making, you know, progress on the ground, so why stop? And that, to me seemed like about the, the best assessment of Putin's mindset that I've seen to date.
- [28:10]
Jevon
Yeah, precisely. I mean, it was not too long ago that Putin articulated the theory of victory and his theory of victory continues to be the same. It's that it doesn't matter that the Russian military, pound for pound, is not, you know, as good as the US military. It's not the most professional military. They're advancing at a very slow rate. They're taking a horrific loss. But Putin assesses that fundamentally he can stomach a war of attrition. And as long as the west is not willing to continue keeping the Ukrainians in the fight, Putin's going to win. And so Putin wants to protract the peace process, he wants to protract the negotiations. He doesn't want to agree to a very straightforward 30 day ceasefire because Putin thinks that he actually can tactically win this thing by, by stringing everyone along.
- [28:58]
Mike Baker
There's a lot of pundits out there, right, a lot of experts who've been talking about, well, you know, the, the Russian economy can't sustain this and, you know, they're on the ropes and, you know, Putin, you know, has a lot of reasons why he needs to sit down and get this sorted out, because he just can't sustain the fight. Where do you stand on that?
- [29:17]
Jevon
Somewhere in the middle. I actually agree that there's tremendous vulnerabilities the Russians have taken, particularly on the economics. I'm actually sympathetic to that argument, but I would argue that, look, Putin is banking on the tempo of fighting going down. The real thing that's bankrupting the Russians and really banging up their economy, their inflation rate, their unemployment rate, or rather not the unemployment, the labor shortage. There's not enough Russians to go around. Between the military and their domestic economy and their monetary policy. It's the war. I mean, there's a massive disruption to the Russian economy because of the war. The Ukrainians kill and wound on average 30 to 45,000 Russians per month. Those are 30 to 45,000 people whose families are entitled to benefits. They are wounded veterans who are entitled to lifetime benefits. They are people that can no longer work in the domestic economy, contributing to that labor shortage. And Putin is banking on that number coming down a little bit. He wants the tempo to slow down. He's waiting for the American aid to run out so that maybe Instead of taking 45,000 casualties per month, it goes down to something like 10,000 casualties a month, which then the Russians actually can deal with. But at the current rate of which the Russians are being lost and the high price going for a head for each of them, it's not sustainable. Mike, to put it into perspective, it's insane how much the average Russian service member gets paid to go fight in Ukraine. The one time sign up bonus for fighting in Ukraine offered by Samara Oblast is US$40,000, one time sign up bonus. That's not including your salary, not including other benefits. That's why they're able to attract, you know, tens of thousands of Russians per month. But it's bankrupting the Russian economy. I mean, their liquidity in their sovereign wealth fund. It's down from what it used to be, around US$100 billion before the war started in 2022. It's now down to somewhere in the ballpark of 45, $46 billion. And it's scheduled to be the end of this year.
- [31:28]
Mike Baker
Putting it into context, when you talk about a 40,000 US dollar signing bonus, what is the average salary, do you know, for a Russian worker?
- [31:41]
Jevon
Yeah, this is on Wikipedia. It's a Google way. If the memory serves me. I believe the average or median annual salary in Russia is somewhere on the order of 13, $16,000 a year. Now, granted, Russia has an extreme level of wealth inequality because there's the very, very rich guy, the little Moscow, and then there's the people living out in the sticks in Siberia who make next to nothing. So it's very skewed.
- [32:06]
Mike Baker
No wonder they can find, you know, people to, to sign up if they're offering $40,000 a pop. And, and remind me if you could, the manpower advantage, there's a population wise, I mean, the manpower advantage that Russia has over Ukraine.
- [32:20]
Jevon
Yeah, I mean, Russia has a population or had a population of 150 million people for the war. Ukraine was around 40 to 45 million people. So, you know, they're working with a three to one, little over three to one manpower advantage.
- [32:34]
Gordon Chang
Net.
- [32:34]
Jevon
Net. But the Russians have, despite this, they've not been able to decisively dominate the Ukrainians. I mean, the Russians only occupy 18 and a half percent of Ukraine, and at the current tempo of operations, it's going to take them well over 80 years to occupy all of Ukraine.
- [32:51]
Mike Baker
And so, so what is, I mean, because it can't be that. That's, that's not the end game. Right. So what is, you know, from your perspective, what is Putin's mindset? What does winning look like at the end of the day?
- [33:03]
Jevon
Well, I think there's several things that would, that Putin would consider to be a victory if he can, for example, achieve a de facto veto over the NATO alliance and have the NATO alliance redo its charter and have the NATO alliance and the NATO side preemptively say, as part of an agreement, it's okay, part of the agreement, you can't get into NATO. I think that'd be a massive win because, as you know, NATO's charter includes an open invitation to any member state that meets the membership criteria. But if we change that and then allow the Russians to have a veto over NATO, that's a huge one. I think Putin also wants to, at a minimum, continue seizing and war fighting for the territory of the four provinces that he declared annexed back in fall 2022, Luhansk, Donetsk, Zaporizhzhia and Kherson Oblast, none of which the Russians occupy in their entirety and which would likely take a current pace, at least two to three years of Finnish war fighting, assuming that there's not a massive collapse on either side. But it's a tall order. And I think there's no, realistically, I don't really think there's an end in sight.
- [34:09]
Mike Baker
You don't think there's an end in sight to the current conflict, to the.
- [34:12]
Jevon
War in the short term? No, because look, if the last piece of American aid is going to be that presidential draw authority that President Biden authorized or he departed office, Putin just going to outweigh it. That aid is scheduled to last through maybe a few more months, certainly not get the Ukraine into the summer. We'll have to see what the Europeans end up doing. What extent can they offset American support? I'm highly skeptical of that. We talk about the reasons why. Yeah, yeah. But at which point the Russians will actually be able to, I think, stomach the tempo better operate a little bit more effectively. And if they can get some other concessions from the US like which in my opinion would be a massive mistake, sanctions relief, cutting off intelligence sharing for the Ukrainians and all this under the rubric of normalization with the Russians and that sort of thing, then, then the Russian rate of advance will expand drastically.
- [35:07]
Mike Baker
But George, I do want to go back and, and talk about this issue of EU and US support for Ukraine going forward. But first we need to take a quick break. So if you'll stay right where you are. We'll be right back with George Barros and the Situation report. Stick with us.
- [35:24]
Customer
This episode is brought to you by Selectquote. Life insurance can have a huge impact on our family's future. With Selectquote getting covered with the right policy for you is simple and affordable. SelectQuote's licensed insurance agents will tailor your experience to find a life insurance policy for your needs in as little as 15 minutes. And selectquote partners with carriers that provide policies for many conditions. Selectquote they shop, you save. Go to selectquote.com Spotify pod today to get started.
- [35:55]
Mike Baker
Welcome back to the Situation Report. Joining us once again is George Barros, the Russian team leader at the Institute for the Study of War. George, thanks for sticking around. We, we finished up the last segment, just briefly touching on the issue of potential support for Ukraine continuing from whether the EU or the US where does all of that stand? Let's, let's start with the U.S. what do you perceive the White House is going to do? Is it just going to, is going to stop support? Is it going to be minimal support? Where are we going?
- [36:27]
Jevon
Very difficult to forecast this administration, Mike.
- [36:29]
Mike Baker
Yeah, good point.
- [36:30]
Jevon
Look, if we look at President Trump's stated objectives, which include not getting Ukraine into Minsk, three, you know, a band aid fix that they're simply just going to not solve the underlying causes of the conflict, but just give the Russians reprieve to go back and give you the place and time of their choosing, then this is going to, this is going to be really bad. Trump said he doesn't want mins 3. Trump says that he wants a robust, stable peace. He wants to ensure that this is like permanently over and settled and those are all good and positive things. Now if you look at the current Russian demands, they're not compatible with President Trump's stated objectives, which means that actually it's the Russians who have to be coerced into concessions. I think President Trump has exhausted or come close to exhausting the options of hey, we make some concessions, Ukraine's making concessions, the Russians make some concessions in their own turn. That's all working out. So now I think imposing a decision point on President Trump which is are we going to, we try to care how are we going to use sticks? And part of the ways that you can go with the sticks are of course the economic tools against Russia. Try to target the price of oil, bring it down, copper with opec. General Americans like cheaper gas prices as well. You could hit the Russians with some tariffs or other things, but our trade volume is pretty low. So it's not really going to be a decisive tool there. The biggest tool you could do is keep Ukraine's in the fight, keep giving them more aid, give them support, you give them the intelligence so that they're targeting, you'd be that more effective even if we don't give them anything else. And then you continue to tell Vlad, well, Vlad, we're going to give the Ukrainians enough to keep them in the fight for other six months. And that means, you know, for another six months you're going to be losing 45,000 guys per month. That's, you know, over a hundred thousand wounded and killed Russians by the time we come and talk again. So you tell me how you're doing in six months given that you have a labor shortage of a billion people now, it's going to be even worse. So I think that's sort of the approach now and I don't know. At the same time the Russians are being intransigent about their own objectives. They have made the ceasefire for the Black Sea, the maritime domain ceasefire, contingent on preliminary American sanctions relief, which should be a non starter. I mean there's really no reason to do it. They want us to have sanctions relief for some Russian import and export banks and people that work with agriculture, foodstuffs. It's just free butter for no reason really. We really shouldn't be in the business of helping the Russians out in that regard. So we'll see. But I'm hopeful that President Trump will realize that his stated objectives, which in principle are good, that actually leads to a very natural conclusion which is we got to keep the Ukrainians in the fight because the Russians got to back down from their non starter demands.
- [39:14]
Mike Baker
Yeah, I, I mean I, I agree with, it's, it's, it's almost impossible to, to predict where the White House is going to go, not just on this issue, but on a lot of, a lot of issues. I do find it hard to imagine the scenario where President Trump says, okay, I'm gonna up gun the Ukrainians, keep them in the fight after, you know, all this talk and, and emphasis on, on getting the, to a, a peace settlement. So I find that difficult. I take your point about the difficulty of, of further economic leverage. You know, there is a ridiculously low level of trade at this point. So the tariffs, that's why they're off the list anyway. They weren't even included on the list of tariffs. But if you could dry up the oil revenues, then you're talking a good game. But that then implies that you can somehow figure out how to get China, you know, to act and to not be as supportive as they have been of Russia. Do you see that as a possibility?
- [40:16]
Jevon
I see it as a possibility to be explored. I mean, you could work with OPEC, and that's what Ronald Reagan did back in the 80s is we worked with OPEC, drive down the price of oil. That in combination with the Russians losing a lot in their war in Afghanistan, those helped put in the final nails in the coffin of the Soviet Union. So I'm not going to say it's not possible, but what I will say is that the maximum pressure campaign that is necessary to get the Russians, Russell, to back down is not achievable with economic rules alone. The main driver of the Russian pressure points are their losses in Ukraine. And so we're going to talk about how do we get the Russians to a better spot. The strategy has to, I think it should include economic instruments like trying to bring down the price of oil. But that should be in addition to the sustained military support. I remain hopeful that we can do it, especially if we can get the minerals deal signed, because then that could become a mechanism through which the Ukrainians are not the recipients of military aid for free. But the minerals deal can then become a means of financing that.
- [41:17]
Mike Baker
Mineral steel is an interesting one because, I mean, I've read an awful lot of material that Talks about relevant, where the critical resources are located. And a lot of them are sitting in territory, the 20% or so of territory held by the Russians at this point.
- [41:36]
Jevon
Right. That's very interesting when you bring that up, when you especially mentioned that President Trump just a couple weeks ago was talking about he would like to have American personnel operating Ukraine's Zaporizhzhia nuclear power plant, which is in Russian occupied territory as well, which implies negotiations or war fighting that has to come under American jurisdiction. I'm not sure what the Trump administration is thinking about how that's possible. But if we're in a world where The Ukrainians and U.S. americans get some of those minerals and get Americans supporting defending Europe's largest nuclear power plant, that and the Russians front line goes closer to Russia and further away from mainland Ukraine. That's a win in my book. So we'll see.
- [42:18]
Mike Baker
Sure, that's, I think that's a very optimistic scenario. I'm not saying it couldn't happen, but now what about, what about the eu? We've kind of haven't touched on them yet. But if as an example, here's a scenario, the White House, you know, is reluctant to, to, to, you know, keep militarily, keep Ukraine in the fight, but they are willing to do whatever is possible in terms of the, you know, the, the economic leverage. And maybe you turn to China and say, look, let's, let's sit down at the table. I'll bet we could come up with a, a fair trade deal that would also include you not, you know, supporting the Russian oil industry. Maybe you tie those two things together. But can the EU actually pick up the slack? Would, would the EU be in a position, in other words, to keep them in the fight independently, just using the.
- [43:07]
Jevon
European defense industrial base at this time? No. And the reason why is because, look, the Europeans have money. That money is not the issue. But a lot of it has to actually do with the manufacturing capacity.
- [43:18]
Gordon Chang
Right.
- [43:18]
Jevon
Europeans are doing a lot in recent years to augment their defense industrial base. But as is with all things the European, too little, too late. And when you need a factory today, you need to start breaking ground of the factory three or four years ago. And so the timelines aren't exactly lining up. Europeans are expediting it. I believe the European Commission, they're currently talking about a decades long European regardment initiative where they're going to spend somewhere around 800 billion euros to invest in the European defense industrial base. That's excellent. Again, needed to happen 10 years ago, but here we are. Now, that said, Europeans can do a lot. They produce a lot of artillery, ammunition. They produce a lot of sort of working good stuff. Rheinmetall can make armored fighting vehicles and tanks. So in principle, that stuff can get to Ukraine. But there's some niche systems and capabilities that truly only the US has that the Europeans cannot replicate. Two systems come to mind. The interceptors for the Patriot air defense system. I mean, Europeans themselves depend on the Patriots. It's kind of bizarre how the Americans have a monopoly over European air defense, and the Ukrainians are running low on those. The Europeans barely have any spare that they could give the Ukrainians that they haven't already. The American production rate of Patriot interceptors is actually quite low, too. And so no more American aid, no more Patriot interceptors. That's going to be a big problem for Ukraine. Number two is the Himars, or their operational strike capacity. The Ukrainians rely on the Himars. It has become a workhorse capability. It is the only system they have for reliable, effective operational range strikes, those being strikes beyond 30 kilometers, but sort of short of 70, 75 kilometers. The Europeans do not have a commensurate, mature system like the Himars to be able to fulfill that very important need. So even if the Europeans want to throw a lot of money and try to build stuff, they need that stuff. And the solution might be that the Europeans just go to the Americans and go to North Grumman and go to Lockheed, and they're like, hey, we'll pay you a General Dynamics. Like, hey, we'll pay you to give us the interceptors and the Himars ammo, and then they'll give it to the Ukrainians that way, which in principle could work and would benefit the US Industry, too.
- [45:34]
Mike Baker
So we've got, you know, again, being mindful of your time, we've got the spring offensive, as it's being referred to underway by the. By the Russian military. Have you heard anything just in the past handful of days about, you know, what they're up to, how they're. How they're doing, are they're making progress? Where does that stand?
- [45:54]
Jevon
Right, so it seems like the Russians are in the beginning phases of their spring offensive. It seems that they are currently trying to take the Russian forces and northern Ukraine, the ones that were clearing out Kursk, where the Ukrainians were in Kursk, and Russia, and they're trying to steamroll it across the international border into Sumy and possibly into neighboring northern Kharkiv oblast and Ukraine. Now, candidly, Mike, I got to tell you, I'm not. My forecast is not particularly grim on this operation. The Russian forces that they have up there has not been significantly augmented from what they were operating with in Kursk. It's about ballpark, 70 to 60 to 70,000 guys, so maybe six, seven divisions or so. A lot of the same units that have been there for a long time, we've not indicated any redeployments of bringing in fresh troops that those forces that were tired fighting and expelling the Ukrainians will Kursk, they're not going to have a lot of gusto and energy to keep going into Sumy. So it seems like the Russians might try to do some pushes in the north and call that the spring event. But I don't, I don't see it going very far to be honest. And they're certainly not going to take Sumy city and that'd be kind of hard for the course. The Russians winter effective has concluded and the Russians failed with their winter offensive in Donbass to take their objective for the all 2024 events which was taking PKROs. So yeah, I'm sure they're going to make some tactical gains, they're going to make some territorial gains, they'll get some villages and fields, they might even get a couple small towns and stuff but they're, they're not going to be making any operational breakthroughs, that's for sure.
- [47:35]
Mike Baker
Okay, George, last question. There have been a reports over the past 48 hours or so that the Ukrainian military captured a couple of Chinese nationals. Have you heard anything about that and what do you make of it?
- [47:49]
Jevon
Yeah, it's not that surprising really. The Russian fourth generation apparatus is very skilled at going to all corners of the Russian Federation and other countries as well and trying to seduce migrant workers, students, foreigners both in Russia and outside of Russia to come and volunteer and fight in the Russian military. Because the Russian military is just trying to suck up as many bodies as it can to meet that replacement quota for those casualties that they're taking. Lots of foreign nationals have made it into the Russian military. Sri Lankans, Indians, Venezuelans, Cubans, Africans, these two Chinese guys that were captured by the Ukrainians and a report of there being at least a couple hundred in the ranks of the Russian military that thought surprising. I don't know. I don't have any dispositive evidence, but it's my impression that those captured Chinese were not plaque soldiers. I would be astonished if they were deliberately sent by Beijing to go there. It seems more likely that these were Chinese nationals. Located in Russia or in a Russian adjacent country who went to a Caribbean office and voluntarily signed up to go get a paycheck for $40,000 or something. Here they are captured along with many other impoverished foreign nationals who have made the same bad decision.
- [49:12]
Mike Baker
Okay, so you're not, you're not, you're not making much of what President Zelensky said his initial comments were. Well, you know, these are probably just a couple, but there's many more. You don't necessarily buy that?
- [49:23]
Jevon
I believe I buy that there are many more Chinese, but, but I don't think that they're pla. I note for you, this is interesting. Your listeners can look into this. Last year, in 2023 or 2024, there was a massive scandal with India because there were several hundred, if not thousands of Indian nationals that a Russian human trafficking scheme had recruited and tricked into going to serve in the Russian military. It became a massive international scandal. President Modi actually made a whole stink about it. The Indian Foreign Ministry formally went to the Russian Foreign Ministry and said, hey, hey, quit it. Stop trying to recruit Indian nationals to go fighting military. It was a whole public spat. It doesn't mean that the Indian government was sending Indians to go fight in Russia.
- [50:02]
Mike Baker
Right, right. Okay, now, point taken. Well, I, I tell you a lot more to discuss here, George, but we are out of time. So I can only hope that we give you a call. You'll come right on back. It's, it's been a few months. Obviously, lots happened. Let's, let's, let's get back together on the show in, in, you know, sooner than, than later. And I, I guess I'll finish this up with a, a question for a prediction. I know people love making predictions. Will there be any serious negotiations for peace going on in the next month or two?
- [50:37]
Jevon
I highly doubt it. I would be astonished. So, quick answer. I don't think so, but we'll see.
- [50:42]
Mike Baker
Okay.
- [50:43]
Gordon Chang
All right.
- [50:43]
Mike Baker
Excellent. George Barris of the Institute for the Study of War. Listen, thank you for joining us here on the Situation report. Really appreciate it, man. Well, that is all the time that we have for this week's PDB Situation Report. Look, if you have any questions or comments, and I hope you do, just reach out to me at pdp@the first tv.com because you know what we do? We, we collect the best ones, and lots of them are good. We take them and we pile them into one, one big episode that we call Ask Me Anything. We've got another one in the works. We'll get that out to you here very shortly. Finally, to listen to the podcast of this show, ad free. Well, you know you can do that. Just become a Premium member. The President's Daily brief by visiting PDB premium.com It could not be any easier. I'm Mike Baker and until next time. Well, you know the drill. Stay informed, stay safe, stay cool.
- [51:49]
Shopblinds.com Representative
We interrupt this program to bring you an important Wayfair message. Wayfair's got style tips for every home. This is Stiles McKenzie helping you make those rooms. Today's style tip when it comes to making a statement, treat bold patterns like neutrals. Go wild like an untamed animal. Print area rug under a rustic farmhouse table. From Wayfair. Com Fierce. This has been your Wayfair style tip to keep those interiors superior.
- [52:16]
Jevon
Wayfair Every Style, Every home.