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PDB Situation Report | December 27th, 2025: Why This Year of War Rewrote the Ukraine Playbook & Asia’s Strategic Crossroads
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Head to blinds.com now for up to 45% off with minimum purchase plus a free professional measure. Rules and restrictions may apply. Welcome to the PDP Situation report. I'm Mike Baker, your eyes and ears on the world stage. Well, believe it or not, this is our final situation report of 2025. My how of the year flew by. So today we're, we're doing something a little bit different. We're stepping back to take stock of two of the most consequential regions shaping the global security picture and looking ahead to what comes next. We'll start in Ukraine, of course, where another brutal year of war has reshaped assumptions on both sides of the battlefield. Joining us to break it all down is George Barros from the Institute for the Study of War. Then later in the show, we'll shift our focus out to the Far east, where strategic competition is continues to intensify. We'll be joined by Steve Yates from the Heritage Foundation. But first, this coming February will mark the fourth year of Russia's full scale invasion of Ukraine. Imagine that fourth year, a war that many analysts once believed would be over in days. Do you remember that there was once a time when we thought, oh, the Kremlin's going to roll right into Kyiv in days and it's going to all be over. But here we are in 2025 proved to be another grinding, consequential year in the conflict. Ukraine dramatically expanded its drone campaign deep into the heart of Russia, striking targets tied to Moscow's economic infrastructure and oil industry, bringing the war closer to home for the Kremlin than at any point so far. On the battlefield, however, the front lines told a familiar story. Russia made incremental, slow, costly territorial gains, but again, only at an extraordinarily high cost in manpower and equipment, underscoring the brutal almost stalemate that continues to define this war. Joining us now is George Barrows. He's the Russia team leader at the Institute for the Study of War and very good friend of the show. George, thank you very much.
- [02:30]
C
Hey, Mike, good to see you once again. Thanks for having me.
- [02:33]
A
Oh, thank you, too, man. I hope you're having a fantastic holiday season. It's hard to believe that, that the year is flown, by the way, that it has, right? It just maybe, maybe it's, you know, maybe I'm just Groundhog Day. I think every year I say the same thing, which is, wow, it's really Snuck up on, meaning the end of the year. But look, we're about to walk into 2026 and so what I was hoping to do is to get your thoughts on the, the year past and where you think this is going. I mean, what are we looking at for 2026? So let's, let's start with that. What are your thoughts on, on the developments of 2025 in relation to the Ukraine conflict? What were the big surprises from your perspective and where do you think this is going? I know that's a really, really big playing field.
- [03:27]
C
Yeah, it's good, it's a good broad place to start. So look, let's, let's start with the facts. The facts for 2025 is that the Russians seized not more than 1% of Ukraine's territory. They've actually seized less than 1% of Ukraine's territory. I suppose the crowning operational achievement of the Russians in the battlefield in the theater for all of this year was the seizure of Pokrovsk, where the near seizure of a pros. But there's still some tactical fighting happening on its outskirts. But this is not something that the Russians achieved in the last six months or nine months. They had been working on seizing for pros since April of 2024. So this was, you know, a 20 month campaign to advance literally 20 miles. This is Ukraine's 74th most populous town, a town of, formerly of 60,000 people. And that was sort of the crowning Russian achievement and it was the basis of, of that seizure that the Russians tried to convince the White House and the whole world that the front lines are collapsing, that Ukraine is on the edge of military catastrophe. And because the Russians are advancing at this very slow rate, we have to cajole them to this sort of the ceasefire and conflict termination agreement. But beyond all of those, well, it.
- [04:42]
A
Seems like, George, I mean, George, it seems like, it seems like Putin was fairly successful in that effort, at least initially, right? Because the White House then turned around and produced a 28 point plan that kind of took all of that into account and, you know, turned around and looked at Zelensky and Kiev and said, well, here you go, you know, you better take this deal because otherwise, you know, good luck.
- [05:03]
C
And then there was attached to it the deadline for hey, sign this Ukraine by Thanksgiving or you're screwed. We successfully evaded that and now it's sort of a sign this by, by Christmas or sign this by New Year's or you're screwed sort of thing. So hopefully we can avoid that. But the good News is, is that the Russians have been very clear that they're actually not really interested in negotiating, they're not interested in making any kinds of concessions. And Putin is actually, I think, insisting that he's going to seize all of this terrain. But look, for, as we look at the 2026, I'd like to say, I'd like to see you try, because the terrain that the Russians demand, it's the most heavily fortified and guarded terrain, is terrain the Russians have been trying to take for 10 years, since 2014. And look, we look at the rate of advance, we look at the terrain analysis, it seems like it's going to take the Russians, under optimal conditions, two to three more years to take this terrain in the east and Donbass. And I don't know that the Russian military actually has two to three years worth of, of, of steam left to go on. I mean, the one thing that no one's been paying attention to, that has been very consequential in 2025, is just how the compounding effects of the war have been affecting Russia. I don't want to go out there and say like, oh, Russia's on the edge of economic collapse. I think that's been really hyperbolic. But there are real mounting costs. The Russians this year had to start selling their gold reserves for the first time. The Russian inflation rate, as the treasury assesses it, is around 20%. The Russians just started importing Indian migrants from India to start offsetting the labor shortage. Putin gave a speech the other day saying, oh, Russia's labor unemployment rate is so great, it's 2% or 2 point something percent, that's actually a bad thing. You know, when you, when you have a labor pool that's that, that, that small and that stretch. So, you know, I don't, I'd like to see the Russians try to continue this. And I think they're desperate to try to achieve through a negotiation these concessions that, that they're unlikely to seize on the battlefield anytime soon. Okay.
- [07:05]
A
I mean, there's a lot of, a lot of questions wrapped up in all of that, but one that pops into mind is you talk about the labor rate, and we've looked at the economy here on the PDB from the perspective of it's a war machine at this point. That's what drives their economy. Obviously their only external revenue stream has been oil and gas for some time, and that's been shrinking to some degree. But if, say, for whatever reason, the war stops tomorrow, what happens to the Russian economy? I mean, because there goes the military industrial base that it's been built on for the past few years.
- [07:44]
C
Yeah, I think you have a massive problem because I don't think there's enough jobs in Russia to actually accommodate all the people that would be returning to civilian life. I mean, you'd have major upsets, major shocks. The Russians actually have a term for what happened in the aftermath of the Soviet Afghan war, you know, in the, in the late 80s when that conflict terminated. And we had all of these men, thousands of men, much smaller scale. What's happening in Ukraine right now, by the way.
- [08:11]
A
Right.
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C
Returned from the Soviet Union. And these were people that were, you know, traumatized. They had ptsd. They didn't call it that at the time, but they had ptsd. And they actually resorted to the lives of crime. I mean, they became the mafia bosses that, that sort of ruled unruly Russia in the 1990s. They call this the Afghan syndrome. It's the syndrome of, you know, these violent, unruly men who are not afraid of the use of force coming back to domestic civilian life, but there's no opportunities for them. And they became these sort of robber barons and mafiosos and the oligarchs and all that sort of thing. And so I think Putin is very, he understands there's a big sociological problem here connected with ending the war, which is why he doesn't want to stop the war, which is why he's actually building up the forces and strimming us all along and wasting all of our time. Because actually, in many regards, ending the war causes more regime stability problems than muddling along and protracting it.
- [09:05]
A
Right? Yeah. Because then what have you got now? You've lost your outside, you know, bogeyman. And I would argue Putin's always been very good at, in times of potential instability, from his perspective, he's always been very good at redirecting the population's attention to some external problem.
- [09:23]
C
Right.
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A
That, that, you know, they can then potentially rally around something else that I wanted to ask you about the recent discussions that have been taking place down in Miami. So you had the, the U.S. negotiating team, Steve Witkoff, Jared Kushner, others talking with the Ukrainians, Umarov and some other folks who they've been trying to hammer out a, a revised framework. Right. They took this 28 point peace plan, which, which pretty much leaned very heavily in favor of Putin, and have revised it down to reportedly 20 points. And, but they've been still working on it. And then at the same time in Miami, they've been speaking the US has been separately with Russian envoys. So Whitkoff, Steve Witkoff came out of that and said something that I'd like to get your take on, which is that he believes Russia is fully committed to finding peace in Ukraine. I'm paraphrasing a little bit, but he did say Russia is fully committed to peace. Essentially.
- [10:28]
B
Yeah.
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C
I'm going to have to prevent. I'm going to have to professionally disagree with Mr. Woodcock here. All the available evidence indicates that the Russians are not interested in negotiating anything other than the capitulation of Ukraine. Putin gave a phenomenal speech on December 19 where he enumerated that their demands are unchanged. They want this additional territory that they've claim to have annexed. They're not willing to support any of the key provisions of the 28 point peace plan. It's a very Russian preferable agreement. But there are certain provisions in there that the Russians don't like. For example, they reject the notion of Ukraine receiving security guarantees, which is kind of the whole point that you need the linchpin to actually terminate the conflict. Why would Ukraine stop fighting a defensive.
- [11:10]
A
War.
- [11:12]
C
To only allow the Russians to rearm? And then of course, the Europeans won't do anything serious about it. The 28 point peace plan talks about having American operation of Europe's largest nuclear power plant, the Zaporizhzhia nuclear power plant, which is currently occupied by Russia. The Russians have decisively rejected that. And so what we're really seeing here is a strategy where the White House has been comfortable using coercion to put pressure on the Ukrainians to bring them to the table. And the Ukrainians have accepted several concessions. The Russians, however, have not indicated their willingness to make any kind of concessions and even, or even accept a deal that's highly preferential to them. They really want to have their cake and eat it too. And I really think that until we change this calculus, using some coercion to bring the Russians to the table as we had the Ukrainians, I don't think that we're actually close to peace at all, honestly.
- [12:07]
A
So I guess just to pursue that, just for one more question, but, and I know this is speculative and we're trying to read somebody's mind, but they, they have these conversations, Witkoff and comes out and they talk about how optimistic they are. He says that they're fully committed to peace. The Russians, then the Kremlin, you know, almost immediately pushes back and kind of shoots down the idea that there's been progress and, and things are moving forward. Down as a result of these discussions. Miami. So what accounts for this? Because I would argue this is kind of similar to what we saw with Gaza.
- [12:43]
C
Right.
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A
There's all this talk about this is how we're going to have peace while completely ignoring the fact that you got to deal with Hamas. The only player there in terms of the framework of those phases was whether Hamas was willing to disarm and give up governance. And clearly they're not. But yet there was still this sense of optimism kind of constantly banging about. So what accounts for comments like Steve Wyckoff's and this continued optimism? Are they just playing a diplomatic game and they know better?
- [13:16]
C
So look, I think we need to look to the Russian negotiators that are actually the interlocutors with Mr. Wykov and Mr. Kushner. And one of the key Russian negotiators is Kirill Dmitriev. And I think Kirill Dmitriev has been a tremendous asset for the Russians in this whole negotiations thing because Kirill Dmitriev really knows how to work the American side. I think he's very effective communicator, very slick guy. He knows what buttons to push and he can perpetually convince the American side that, yeah, yeah, actually we're down to have a. We're down to have peace. If we can just get these, you know, these concessions, get these things figured.
- [13:53]
A
Out inside these points, we can just get all.
- [13:55]
C
Really, that's, that's not, that's not representative of the Russian position at all whatsoever, actually. And I think the whole point of this is, is to have this thing blow up. I think the point of this is to work out a document that the Russians don't intend to accept anyway, by the way, bring it to the Ukrainians with enough poison pills that the Ukrainians cannot accept it. Mostly not because of the capriciousness of the Ukrainians, but because it's contrary to their core interests. And it's also, it would be in violation of Ukraine's constitution and law. So, you know, any president in legal standing wouldn't be able to do anything with that in the first place. Avid dying the Ukrainians hands and then that become the basis for a big information operation saying, look, we tried, we got a deal, it died with the Ukrainians. The Ukrainians are obstacles to peace. They're the bad guys. So let's just plug, like, why are we even trying about this? They're completely, completely unreasonable. And that's, I think like the really sophisticated campaign design behind all this whole thing is they're trying to put this package together. And the whole point of is the blow up when Ukraine would really, it would blow up on a Russian that you were put it to them too.
- [15:00]
A
Yeah, yeah, absolutely. Well, and also, you know, the Russian side is being helped somewhat by the mixed messaging coming out of the White House where, you know, on a somewhat regular basis it appears as if the administration, the US Administration is, is saying the, the roadblock here is, is Kiev, not, not Putin. So it is, it is very interesting. But obviously, you know, the Kremlin's going to play that up. Look, George, if you could stay right there, I want to be mindful of time. We've got to take a quick break, but don't go anywhere. We've got be right back with more from George Barrows here on the PDB situation report. The last situation report of 2025. Stick around. Hey, Mike Baker here with an important message about reaching your financial goals from our friends over at Stash Financial. Look, the answer is you don't need to overhaul your life to start investing, right? Just automate it. With Stash, your new year money goals can quietly run in the background or while you focus on everything else going on in your busy life. Stash isn't just another investing app. It's a registered investment advisor that combines automated investing with expert personalized guidance so you don't have to worry about gambling or figuring it out on your own. Think about it. Just $3 per month gets you access to world class financial advice and personalized guidance so you can start investing in your future today. And doesn't that sound like a good idea? Look, don't let your money sit around. Put it to work with stash. Go to get.stash.com PDB to see how you can receive $25 towards your first stock purchase and a few important disclosures. That's get.stash.com PDB Once again, get.stash.com Pdb this is a paid non client endorsement, not representative of all clients and not a guarantee. These investment advisory services are offered by Stash Investments LLC and SEC registered investment advisor. Investing involves risk offer is subject to terms and conditions.
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To have a seat, but now I'm asking you to join me, Chris Hansen, for my new series, have A Seat with Chris Hansen. Guests each week are fascinating personalities who are grabbing headlines, making waves, or changing our lives for the better. Have A Seat with Chris Hansen, available wherever you get your podcasts. Welcome back to the PDB Situation Report. Joining me once again is George Barros, Russia team leader at the Institute for the Study of War. We've been talking all things Ukraine. We've been looking at what's been happening over the course of this past year of 2025. And we're looking forward because it's right around the corner. We're looking forward into 2026. George, thank you first of all for, for staying put and being willing to stick around going into 2026. Do you have confidence? I'm trying to think of how to phrase this in an objective way. Do you have confidence that the White House, the Trump administration, will continue to support Zelensky and Ukraine? Or do you think in the relatively near future they're going to lose interest or get frustrated to the point of.
- [19:22]
C
Saying, okay, that's it, yeah, this administration is material, man. I mean, we'll go from the Ukrainians are cut off with intelligence sharing to, you know, we think they can get back all Ukraine and there may be some more in Russia. So it oscillates wildly. So I'm not confident in anything in particular, but what I am confident of is that the Russians are not going to end this war anytime soon. I'm confident that they're stringing us along and I'm confident that, you know, in order to actually have a conflict termination, you have to have a negotiating position where they're close enough is going on here. Look, the administration at this point really isn't giving freebies to Ukraine anymore. We don't send them military aid anymore. It's all under the rubric of sales financed by the Europeans primarily. So at this point it's actually a money making inventure for the Americans. So it's not charity. The real thing is, even if the Europeans don't pay for it, would we turn off intelligence? Sharing intelligence that we're already collecting ourselves for European Command with the Ukrainians, which would be very bad. A lot of Ukrainian civilians will die from the nightly air raids if we're not giving them the intelligence about that. And because we collect it anyways, it would be really capricious to turn that off. So it's my hope that we wouldn't do that. It's my hope also that the Europeans will do the right thing. I don't think they will at this point, but do the right thing. Seize the Russian assets that are sitting in Belgium. And by the Europeans, I really mean the Belgian, the Belgians would do that. The Danes would do that. Or not the Danes, the Netherlands, they would do that. Yeah, because they really don't want to do that. And they would use that to rebuild the arsenal of democracy, to rekit Europe for all the things that we set in Ukraine and use Russian money for it. But we'll see.
- [21:17]
A
And I think it's important to understand, understand the reason why Belgium is so reluctant to do it. Right? They, they bring that somehow. And look, the, the Kremlin's already filed a lawsuit. Believe it or not, it as surreal as that sounds, the Kremlin has filed a lawsuit in an effort to try to prevent the EU from using those frozen Russian assets to help support and you know, potentially rebuild Ukraine from the actions of the invading country, which is filing lawsuit, so that their money isn't used for that? It's almost absurd. As absurd as, you know, Russia's still maintaining a permanent seat on the UN Security Council after all these years of their invasion. But that's another issue. Look, with, let's look at the weak points. I mean, if there were to be something that caused Putin to sit down at the negotiating table in a meaningful way, what would that be?
- [22:19]
C
We got to stop the Russian advances. Cold man like Putin, I'm confident about this. Putin's not getting accurate reports from his military apparatus. He's not getting good intelligence. He's not getting accurate reports. And we know this because General Gerasimov, that is the chief of the Russian General Staff, is giving inflated reports. I mean, the Russian general staff and the Russian MOD, they have these SITREPs, they publish, they're public and they talk about towns and villages and things that they see as a battlefield progress. And you know, here at the institute, where we're constantly verifying these things, looking into the data, you know, collecting satellite images, and some of them are true, sure, but a lot of them are false. And you know, it was really interesting that in late November, early December, we had this Russian Putin announcement. We seized Coupens and Kharkiv, this operationally significant town near the international border. And then the Ukrainians conduct a counter attack. They retake large portions of the town and Zelensky goes and takes a selfie by the sign by the city limits, sort of emphatically disproving what Putin had said. And I actually don't think that. I think Putin's lying about performance to make it seem like they're doing better. But I think Gordon's also being duped a little bit because there's this sort of command economy, economy trickle up effect where the generals know that Putin wants to be told he's doing well. So the generals lie and the, and the general officers lie and the men at the front lie. So there's sort of this garbage in, garbage out take. And I think as long as Putin thinks that his forces are moving and they are slowly, then, then, you know, then it's not going to stop. So we have to therefore figure out what's the military science problem and how to, how to stop Russian forces cold. We did pretty good. The Ukrainians did good. In 2025, less than 1% of the country sees. I'd like to make that be zero.
- [24:10]
A
I think it's, it's really interesting what you said about the quality of the intel that he's, he's receiving. We've talked about that on the PDB before, about his shrinking circle of trust, right, which is advisors, the people that he listens to, you know, that that's been, that's been shrinking really since the pandemic. He was, he was very paranoid during the pandemic, but certainly now there's a very few people that I think actually get into him and, and feel empowered to give him truth, which I guess is not atypical. For, you know, despots or dictators or strong men at some point. So what about, and you mentioned this earlier in the first segment, briefly, you talked about the economy. Some of it is, you know, hyperbole when we talk about the collapse of the Russian economy. But, but what is, you know, in short order, I know we could take a lot of time to talk about it, but in short order, from your perspective, the state of the Russian economy right now and its ability to just continue this.326 yeah.
- [25:18]
C
So the Russian economy is overheating. We have inflation, we have a labor shortage and we have regional budgets which are in deficit. And so this is significant because the Russians embrace a strategy of recruitment that is very resource intensive economically. The previous strategy for getting guys to the front line was paying them huge amounts of money, huge by Russian standards, 3, 4 times the annual salary to go fight as a sign up bonus. And it's very interesting. Putin, I think, is starting to change that because he's facing an economic problem. Either he's running out of liquidity or the pool of people who are willing to sign up and take a fat paycheck to go risk their lives is drying up, or both things are happening because In October of 25, the Russians passed a new law which actually lowers the legal threshold for mobilizing reservists. It used to be the case that in Russian law the Russians only mobilize reservists to go fight in expeditionary wars during an officially declared war or a state emergency or that sort of thing. But this new amendment to the law actually lowers it and says actually no, we can actually mobilize reservists without declaring a state of war. And yes, they can go fight expeditionary wars, including in Ukraine, including in the parts of Ukraine we have annexed and declared actually Russian territory anyway. And these reservists are actually starting to be mobilized now. And that's actually really mean because it's a violation of Putin's previous social contract, which is I don't use the monopoly of violence of the state to force you to overfly. I pay you to fight and if you die or wounded that you took the deal. But now the deal has changed. It's like Darth Vader to Lando in Star wars the Empire Strikes Back. I'll alter the deal, pray. I don't want to go any further. Now it's actually you signed up to be reservists, but now we can recruit you anyways and put you in its compulsory. And I don't think there's going to be a recognition of Russia or anything like that. But this is, I think, driven by the economic issues. And it's a problem too, because it means that Russia might be able to generate forces much more cheaply. But it's not because Gooden wanted to. This is bad for his political stability. He's doing it out of necessity.
- [27:39]
A
Okay, I gotta tell you something, George. That Star wars reference went right over my head. I saw the very first Star wars movie back in the 70s, whenever that was, and never saw another one. And it's been kind of a point of pride on my part. It's sort of like Star Trek. I watched the original Star Trek with William Shatner, refused to watch any other version of it. And so I hold the line. I am nothing if not consistent. Let's talk about, if we could, the. Over the last four or five months in particular of 2025, we've heard a lot and we've talked a lot about Ukraine's ability to target and strike at the Russian energy infrastructure. And whether it's, you know, through a long range drone hits, on, on facilities, whether it's naval drones, you know, targeting a tanker or port facilities. From your perspective, again, you spend a lot of time focused on this. How effective has that been? And can more of the same have some sort of cascading.
- [28:51]
C
Cat?
- [28:52]
A
I don't want to say catastrophic, that's the wrong word. But some sort of result on those energy revenues that Putin depends on so heavily.
- [29:01]
C
Yeah. The Ukrainian campaign is becoming increasingly sophisticated over time, in part due to American intelligence sharing, you know, knowing exactly what part of the facility and target, what are the real critical, what are the really critical zones. And so it's matured and become more effective. So you're looking at the Ukrainian long range strategic bombing campaign against oil infrastructure in early 25 versus late 25. Two different animals, and they've compounded. Look, this economic line of effort is important. It does have an effect. It is like sanctions insufficient to end the war because ending the war actually does require stopping the advances on the battlefield. And of course this helps, but it's not by itself. I think when people sort of think about the political factors or the economic factors, it's sort of like this fantasy that previous policymakers would entertain, which is we can control Russia's intentions and control their actions. With sanctions, we'll just sanction them and those are good. Sanctions have a place on a role in statecraft, but without force, especially when it's a large war. It's necessary, but insufficient. And that's like, that's the temptation, thinking there's always easy tools out, and there really are no easy tools out.
- [30:21]
A
Is stopping the advance sufficient or do they have to reverse that and actually regain territory?
- [30:30]
C
I would argue that regaining territory would be better and make a more compelling case to bring Putin to the table. If that's the goal. That's ambitious, not impossible, ambitious. And I think it's something worth striving for. We've certainly not given it our all to try to actually strive for it in good faith. There's a lot more that we can do. And the President Trump still has the cards on the table to do that sort of thing. But stopping it would be a good place to be. I mean, it's difficult. Look, the Russians are currently saying we're going to take all of this stuff in Ukraine, even though that we're advancing at 10 meters or less than 10 meters a day. And it took us 20 months to move 20 miles. We're going to keep doing this slog. You could change that to you're going to spend 20 months to move 20ft. I think that becomes a much more difficult proposition. And actually you have a much more compelling case for victory. Theory of victory. By the way, the big problem with this is that also Ukraine is entirely dependent on international backing. I mean, there isn't a stable equilibrium right now, because Putin's whole theory is, I just gotta wait out this fickle alliance of Western countries in Korea and Japan, and as soon as they lose the political will to keep doing this and see this as a sunk cost fallacy, and I trick them into thinking that my victory is inevitable, then I get to Steve Rule, I get to have everything. And I think it's important that we.
- [31:58]
A
Do you think he's right? Do you think he's right?
- [32:02]
C
I think he is right. I think he is right because the center of gravity for the war is the international coalition. I mean, Ukraine doesn't have a state budget. They don't have. They will have weapons. They'll fight. I mean, they're not going to collapse overnight. But Ukraine is so reliant on everything that the international coalition provides them. Then that's not, you know, that's not normal. I mean, that's completely normal for states that are fighting an existential war. United States in the American Revolution wouldn't have won the revolutionary war against Great Britain if it were not for France. Right. So South Korea wouldn't have existed, wouldn't exist today if we're out for the United States. Right. So this is Normal. And if Putin can convince us to pull away and fall back. Yeah, he will. He will mop it up.
- [32:46]
A
Well, George, on that note, people are going to really. Wait a second. Aren't you going to finish on an optimistic note? Give us something in a minute or less, George. Give us something optimistic about this whole situation as we head into the new year.
- [33:00]
C
Yeah. This administration, I think, is getting frustrated with being, you know, toyed with and, and dragged, dragged on and having their time wasted. We've seen Donald Trump I think, actually realize when he, when he's being, having his time wasted and being taken for a fool. So look, we have cards. It's possible, I would argue, to stop Russian advances. The Ukrainians counterattack in Kupiansk, I hope is a foreshadowed things to come. There are actually ways to be able to counterattack. The war is still dynamic. It's not totally stalemated. There are opportunities to roll back the Russian gains. It's just a question of how do you resource it properly, how do you set the conditions for it and how do you execute the intelligent generalship and campaign design to do those things? And it is possible. Anyone that says it's not possible is not being they're either uninformed or not being intellectually honest with you. The question is how do we get there to end this war and not simply let the Russians keep making a buffet of demands that we can actually satisfy.
- [33:55]
A
I'm going to use that term, a buffet of demands. Right. It doesn't even have a sneeze guard on that buffet. George, thank you very much, man, as.
- [34:05]
B
Always.
- [34:07]
A
We really appreciate your insight, your expertise on all of this. It's been great having you on THE situation report throughout 2025. And you can count on us pestering you to come back on early in 2026. George Barros, Russia team leader at the Institute for the Study of War, great guide and an incredibly complex issue which here you've heard it from me. It's not going away as we approach the New year. All right, coming up next, we take a look back at 2025 in a different part of the world, in the Far east, where China pushed harder on Taiwan, tested its neighbors and forced the US and its allies to sharpen their response. Stay with us. Hey, Mike Baker here. Now, as the New year approaches, did you know that the new year is approaching? Let me take a moment of your time to talk about protecting your hard earned assets. Let me ask a question. Did you know that gold is up around 40% this past year? It's True. It's not speculation, it's actually reality. And if a portion of your savings isn't diversified into gold, well, you could be missing the boat. Look, here's the facts. Inflation is, well, still too high. The US Dollar is still too weak. And the government debt, well, it seems almost insurmountable. And that's why central banks are flocking to gold. And they're the ones driving up prices to record highs. But it's not too late to buy gold from Birch Gold Group. Birch Gold will help you convert an existing IRA or 401k into a tax sheltered IRA in gold. And get this, you don't pay a dime out of pocket. Just text PDB to 989-898 and claim your free information kit. There's no obligation, it's just useful information. You've heard me say this before. The best indicator of the future is the past. And gold has historically been a safe haven for generations during times of uncertainty and instability. That's why I urge you to consider diversifying with Birch Gold Group. Text PDB to 989-898 right now to claim your free information kit on gold. Again, that's PDB to 989898. Protect your future today with Birch Gold. Welcome back to the BDB situation report. As we look back on 2025, the Far east remained one of the most consequential and volatile regions on the global stage. China spent the year pushing hard on multiple fronts. Military pressure on Taiwan intensified. Beijing continued to throw its weight around in the South China Sea. And ties, of course, deepened with Russia even as China wrestled with some real economic problems at home. At the same time, the US and its allies moved closer together, reinforcing deterrence and preparing for a more contested region in the years ahead. Joining us now to walk us through it all is Steve Yates. He's the Senior Research Fellow for China and National Security Policy at the Hering foundation and also a very good friend of the show. Steve, thank you very much for coming back on for the last show of the sit rep of 2025.
- [36:59]
B
That's an honor to join you. We'll see what we can do to look back, but look forward.
- [37:04]
A
Yes, that's exactly right. And you, you've preempted my first question. What I was going to say was, was give me your assessment of the 2025 developments related to China. I'm giving you a massive playing field here and then we need to look forward and see where it's all going for the new year.
- [37:25]
B
Well, Mike, it was a big year. And I think coming in, you'd have to start with the change of administration. It's hard to think of it at this point because there's been so many news cycles throughout 2025. But at the open of 2025, Joe Biden was still President of the United States. And it wasn't until an extremely cold Inauguration Day that Donald J. Trump came back into office. Pretty soon out of the box, we had tariffs going out in a number of different directions. The first that involved US China relations was a 20% tariff on all Chinese goods that was tied to fentanyl. As you know from conversations we've had, this is a problem near and dear to my heart, having lost my daughter to it in 2023, but hundreds of thousands of other American families. So right out of the box, President Trump laid down a marker in that regard. But then we had Liberation Day as it came a little bit later in the year. And that was when tariffs went out across almost all directions, friend and foe alike. But tariffs with China went up to a theoretically impossible level of like 140 or 150%. And then we started having some meetings to negotiate things down. So really the beginning of the arc of 2025 had some economic tools in there, sort of a rebalancing and renegotiating with allies. The initial big meetings to the. To the White House were Japan and India. And they were very, very well received visits. And so you had some context setting around China, but not yet direct dealing with China. And then the President seemed to go really deep on things. Russia and Ukraine and then things with Gaza and the Israel situation and the China and broader rebalancing sort of took a backseat to a kind of come full circle later in 2025, and he finally sits down face to face with Xi Jinping for the first time as he went to the APEC summit in Korea. And coming out of that cut the fentanyl tariffs in half. There was sort of a plan put in place where he would Visit China in 2026. So a little hint towards our look ahead, and the negotiations with friends seem to settle down to a somewhat new normal, a little more stable with Japan. Korea was talked about as an ideal ally, which is an interesting concept, having worked that account over the years. That is one that is a constant maintenance account from my experience. But if one wants to call it ideal, I guess we can do that for a time. And the India relationship sort of has had some sweet and sour in it, but I think some unforced, unpleasantness over the course of 2025. And so, yeah, that is not US China, but it sure does have a lot to do with US China. And I say the last punctuation point would be the notion of China's involvement in a lot of different areas. I think kind of culminates with where we end the year. We have this standoff with Venezuela that can't really be seen in isolation, given that some of the oil that is being caught by this embargo actually is oil intended to go to China. And there are some other influences in Venezuela beyond just the narco trafficking concern. If we look at the protracted and unending war with Russia's invasion of Ukraine, China is one of the biggest financiers of that. And we sort of have not seen or heard the end of that. So that's how I would do my best at trying to squeeze all of 2025 into a Christmas stocking and try to tease what it looks like going around the bend.
- [41:22]
A
Yeah, no, that's, that's, that's excellent. Yeah, I would, I would argue that, that President Trump, you know, pretty much put the kibosh on the idea that it was all about counter narcotics with Venezuela when he came out with that, with that social media posting saying he was not letting up on Maduro until we get all the oil and land back that they stole from the U.S. i think that kind of shifts the focus a little bit. Let's do this. You can use either a number scale, 1 to 10, 10 being amazing, or you can use a grade scale, letter grade, scale. Give me a grade for how you believe the Trump administration has dealt with China over the 2025 year.
- [42:06]
B
Well, I'd be generally forgiving because they've tried and done a lot, but there are some of the areas where I have a really hard time swallowing. I'd probably give them more of the B range when it comes to this. I'm sure that will incur some wrath in the air. The golden age where nothing less than an A plus is acceptable. But I just put it at that because I think the rebalancing on economics was necessary. And that is a super, super important thing. It's incomplete, but I think it was really important to put that into play and we'll see where all that goes. I think there was a late in the year arms sales package to Taiwan in the several billion dollar range, which kind of closes one of the loops that have been hanging out there of pressing our partners to do more and commit to spend more on their own. Which they did. And then the US having to get off of, I think long delays in delivering more, which it appears we may be doing. The fentanyl tariffs, I give them credit for making it a priority and putting pressure where it needed to go. I wasn't a super fan of cutting them in half. I'd rather see the progress and, and evidence in before pulling back. But going to 10% and then, you know, if they don't follow through, going back to 20 and seeing where that goes, that I can live with that. But then there's some things that have to do with export controls. I'm really not a fan of having relaxed some of the standards that Congress had passed and urged and I thought that core elements the administration were in favor of. And it seems like there's kind of an easing into more advanced chip sales to China. That just doesn't make a sense to me. If we aim to win the AI and space race, why are we selling increasingly more advanced things to our number one competitor in that race in my estimation? So that's where I give them a solid B.
- [44:04]
A
All right, well you know what? A, A, B frankly, I mean look, C's get degrees, right? I tell my boys Scooter and Sluggo and Mugsy all the time that C students around the world. So you know, B is pretty solid. I take your point. I think the White House would much prefer A plus. Yeah, but what you said about the advanced chip sales and their move regarding Nvidia recently, I agree with you. Look, I've spent years talking about and dealing with the Chinese regime's, the intel apparatus's efforts to hoover up all intellectual property and research and development and every now and then I think that the Trump administration gets it, they understand and they're, then they're serious about it. And then you get a move like this. So I'm not quite sure how to, how to make sense of, of that. What do you think should be on our radar? This is, this is going to be tough. I know, but if you had one, one item, one issue, one event, one concern to put on our radar screen going into 2026 in relation to China, what would it be?
- [45:19]
B
Well, I think it really comes down to the summitry risk. And I put, I say that knowing that most normal humans aren't going to have any feel for this, but when presidents get into deal making mode and they start visiting other countries and there's sort of almost just an inertia that we're going to tie every relationship into a bow so we all look good and we'll have great readouts of meetings and promises of progress. The darker forces of the world know how to play this game to a fare thee well. And they can sort of get a whole bag of horse manure and sell it as if it's the nicest, brightest bow Christmas gift you ever thought you got. Or they'll just sell a whole box of nothing and pretend as if it was some kind of a big success, but there's no follow through. And so with President Trump saying he plans to go to China in say, April or so, then there's almost like this need to advertise deliverables. What would those deliverables be? Almost everything from the business community and from the Chinese side is going to be. Well, shouldn't you walk back your support for Japan and Taiwan and all this effort that looks like you're containing China? And shouldn't you ease even more of these tech concerns since we've promised that we're just going to have win win outcomes together and would it be better if we did this G2 kind of world where we're solving the world's problems, there's just a huge risk of getting pulled into that rut. And that's what I worry about most. And that's the President summit going to China in April. But then we host the G20, which I actually don't think should exist because any G number more than single digits is a waste of time as far as I'm concerned. But we host that later in the year. And if we're going to have a big kumbaya gathering, that's the new golden age of summitry at the end of the year, same deal, same pressures, and that, that concerns me the most.
- [47:20]
A
Yeah, that's, that's really interesting. I, I would, I would argue that we've seen that in relation to the Gaza negotiations, in relation to the Ukraine negotiations, where sometimes it appears that the goal is just, just get something on paper. Right. Regardless of whether Hamas actually disarms.
- [47:37]
C
Right.
- [47:38]
A
Regardless of whether Putin actually, you know, cares about peace and has any interest in actual negotiation. Let's just get something on paper, even if we have to give away a lot of territory to do it. So I take your point. I think it's, I think that going into. Well, you know what, you know what I'm going to do first, because I got the whole four crew here waving signs at me saying that we got to take a break, even the guys in the house banned or kind of get my attention. So if you'll Stay right where you are. We will take a quick break and then we'll be back with more from Steve Yates here on the BDB Situation Report. Stick around. Hey, Mike Baker here. I want to take a moment to talk about security, specifically your online security. Now, here's the thing. When you're online, your personal data is always vulnerable. But with ExpressVPN, you're protected. ExpressVPN is like tinted windows for your Internet connection, right? You can see out, but they can't see in. ExpressVPN hides your IP, making tracking nearly impossible. And it works on all devices, phones, laptops, you name it. Plans start at just $3.49 a month. And if my math is somewhat correct, that's only, what, 12 cents a day. They've got all sorts of plans so you can tailor to your security needs. And US Users can even opt for their identity Defender. It removes your data from brokers, provides alerts on dark Web leaks, and ensures up to $1 million against theft. Look, I know I can trust ExpressVPN to shield sensitive comms from prying eyes. So do the smart thing. Protect yourself and keep your private life private. Secure your online data today by visiting expressvpn.com baker or that's expressvpn.com baker to find out how you can get up to four extra months. Once again, expressvpn.com baker welcome back to the PDB Situation Report. Joining us once again is great friend of the show, Steve Yates, senior research fellow for China and National Security Policy at the, at the Heritage Foundation. Steve, thank you very much for, for sticking around. Look, I, let's, let's talk, if we could, let's talk military aggression on the part of China. What do you think 2026 will bring in relation to the Chinese Taiwanese situation?
- [49:56]
B
Well, we had some big developments over the course of 2025, and I just, I think the key test for 26 is do these stay directionally the same or is there sort of a pendulum swing? And the way I'd put it is over the course of 2025, it wasn't because the United States came up with the next most brilliant memo or made the most attractive deal. Xi Jinping and his military folks and some quasi military folks picked fights they didn't need to pick, and they sort of pushed the envelope with a lot of East Asia and Southeast Asia. So there's more solidarity in that first island chain. And what that means to normal America is from Japan down through Taiwan to the Philippines and into Southeast Asia, there are More governments that regardless of what concerns or diplomacy that's been in play from China and the US in the past, they now sort of feel concerned that Chinese fishing boats, coast guard boats and aggressive military vessels are encroaching upon them, even though they had very solicitous relations with China through a lot of this period. And so now it's not a question of what kind of offer can be put in place. They're investing more, they're working more together even if the US isn't involved. And in some ways I see that as a very positive development that Japan and the Philippines do more on their own without America having to do things. What it does for the Taiwan contingency and what the Prime Minister of Japan's statement about this made very, very clear is that there's no such thing as a Taiwan contingency. That's just a Chinese people on two sides of the straight matter only, or a US China negotiation only. There's nothing that a President of the United States can negotiate away if it goes against the Japanese national interest or the Philippine national interest. And so if this trend continues, I see less risk of that kind of a contingency coming around the 2027 timeframe. We may have bought some time and we need that time because we need technology and, and the next revolution in military affairs to catch up so that maybe on less expense we can make this first island chain less swallowable by a more conventional military boom that China's experienced. So I see some trend lines that could move in a more positive direction even though you're going to have constant friction and constant testing by China. But the fundamentals could finally be getting somewhat better among that first island chain membership.
- [52:23]
A
Okay, yeah. It was remarkable how, how the Chinese Foreign Ministry, whomever in the regime there responded to Takaichi the, the head of Japan's comments, saying that, you know, that from their perspective the existence of Taiwan is sort of a survivability issue or you know, an existential threat to Japan. And the immediate harsh aggressive response from China was really interesting.
- [52:53]
B
Well, it's worked for them for decades. I think the most novel part of it this time is that that horse is not selling anymore. And essentially what the Prime Minister of Japan exposed was the proposition is if China engages in extreme military aggression, that would raise the prospect of crossing the threshold where Japan's national interests are invoked and collective self defense under their constitution would have to be considered. For some reason, China's leadership thought that was an unacceptably provocative notion. Forgetting that they are the prime mover in that provocation scenario. And most of the rest of the world seemed to get the joke this time because they've had these coast guard vessels ramming into other people's ships, the fire hoses blasting innocent people, and it's so far away from China and so far into the economic zones of these other countries that the lie just isn't selling as well anymore. That, to me, was the happiest development in what is a somewhat scary scenario because in the past they just talked like this and people just said, yep, yep, yep, yep, yep, and went on.
- [54:09]
A
Yeah, yeah, that's really. I also, to your point about, about them not getting it that they're the provocateur here. I don't think self awareness and a sense of irony are really strong, you know, character traits for Xi Jinping or for, or for that matter, Vladimir Putin, or, you know, you'll pick any regime strongman. So this, this is talked about all the time. And I know that in the Pentagon and Intel community and elsewhere, it's being gamed out all the time. The various scenarios, oh, you know, where, where is this going with Taiwan? So I'm going to ask you that question. Where is this going with Taiwan? Let's keep it confined to 2026.
- [54:56]
B
Well, 2026, the things we know that where it's going to is that Taiwan has a comprehensive civilian national resiliency program, somewhat modeled after lessons they saw in Ukraine. But it's also sort of gaming out responses to natural disasters which are conspicuously similar to how you would respond in a time of a military attack. Whether you have power outages, degradation of other kind of key services, having your civilians prepared for how to survive and respond in those times of crises actually improves deterrence, gives people confidence, and it changes somewhat the equation of China just threatening and maybe the political system cowing into submission, which has been kind of a risk that people who assess such things in the CIA and elsewhere around the world have always tried to try to figure out. The other thing is we are in the middle of something that I can't assess because I'm not smart enough. But the application of technology to defense systems is going gangbusters right now, and it makes it cheaper and faster to catch up. And if your aim is to thwart an invader, you have an advantage over this person who wants to take territory and hold it. That might actually change another part of this equation, even just in 2026. But the key factor I think overall is going to be, do we get our supply chains Less dependent at a critical degree on China. Taiwan has moved farther and faster than others in this regard, but Japan, the United States, we still have a ways to go in this regard. So those rare earths processing capabilities, getting a red free supply chain I think is a critical variable for 2026.
- [56:52]
A
Yeah, I, I think that's a really good point. I, I, One of the, one of the things that I do very much like about the Trump administration is their focus on, on minimizing the regulatory pain of new permitting when we're talking about mining. You know, I, I think at this point there's, there's been enough of a focus or a spotlight put on it that I think the general public is starting to, to really understand the importance of this. But it seemed like for years that the goal was to just slow down any potential new mining operation to the degree where it just wasn't feasible. Right. And now I think the administration is working extremely hard. I know some very good people in the interior and over at ag, and they're working very hard to try to responsibly, completely minimize that, that permitting time. Right. Because you know, we can't, we can't continue the way we are in terms of rare earth minerals, critical minerals. You can't say it's going to take you 10 years to put a shovel in the ground when you've got the potential for the Chinese regime to just lock it down anyway. That's, look at me, I'm going to come off my soapbox now.
- [58:09]
B
But it was all accurate. So, you know, people just take it.
- [58:14]
A
Yeah, there you go, Steve. I guess this is, this is, you know, again, one of those hugely speculative questions, but Xi Jinping, right. You'd have to go back to, you know, Deng Xiaoping or Mao or whatever to find somebody who was, has commanded as much control. Although you can, you can argue he's getting some pushback. You could argue there's signs that perhaps he doesn't have the iron grip that, that we talk about here in the West. But from your perspective, you know, what's the duration of his hold on power in China?
- [58:56]
B
Well, just in general, I would confess to having a depressing assessment about bad leaders, especially dictatorial type leaders, always lingering longer than we want or think they should be able to do. I sort by the intelligence community's broad based assessment, not just ours, but everyone else's too, about the North Korean regime being at death's door and they're still around. And this was in the 1990s when it was just going to go away. And we were going to have an agreed framework that was okay to make some concessions, because in a few short years, they're going to collapse and we won't have to deliver on these promises. I just sort of lost the ability to assume that these guys are going to die or get pushed aside. They're probably going to linger longer. And also say that Xi Jinping, in my assessment, has more control than any of the previous leaders had. I think he's more powerful than Ma was. I think he's much more powerful than Deng Xiaoping was. If you just look at his ability to kill off rivals or disappear them, it's unmatched. Mao had to struggle with that from time to time. He did have to shoot someone out of the sky when they tried to flee, and he had to go through a cultural revolution and some purges, but it wasn't a good look for them, and they went into grinding poverty. Xi Jinping has held on with tenuous economic situation as property bubbles and other things burst, but really no one capable of pushing him completely aside. Late Mao, there was a lot of doubt in that system. Deng Xiaoping had coalition management through his entire tenure, strong enough to clamp down when he had to, but he was making deals to buy time and let China's strength emerge. That was his fundamental strategy. Xi has presided over much less limited power. It's not perfectly unlimited, but I don't see anything that changes that in the next several years, unless his health just drops out or there's sort of a bolt from the blue that you can't see or necessarily count on. I think, unfortunately, we're fated to deal with this direction probably for the duration of the Trump administration and maybe even through the early part of the next.
- [61:15]
A
Do you remember Xi and Putin walking along? I think they were on a hot mic talking about longevity, and I know where you're going. So, yeah, you're right. We could be looking at both of these cats being around hundreds of years of years. Yeah. Yeah, man. Steve, look, I would love to continue this conversation, and we will in 2026, but for right now, we are out of time. I just want to say it's been a real delight having you on the show throughout the year, and I look forward to many more conversations coming into the new year. All right, that's all the time we have. Situation reports. And as we wrap up 2025. My, wasn't it quite the year? All of us here at the President's Daily Brief want to thank each and every one of you for being part of the PDB community. I really mean that. We started this podcast look very simply with the belief that folks that includes you just wanted the facts about major global events delivered in a straightforward and concise way. Right? To be told what's happening without being told how to think about it. That's up to you and millions of folks, I have to say every month. Well, they've agreed. We're honored to have you tune in every day and spend a few minutes in the morning and afternoon with us. Thank you for that vote of confidence. And remember, if you have any questions or comments, please reach out to me@pdbhefirsttv.com and of course and listen to the podcast or the show ad free. You can do that. Just become a premium member of the President's Daily brief by visiting PDB premium.com I'm Mike Baker and until next year. Well, that's just right around the corner. I'll see you next week. Stay informed, stay safe, stay cool.