Trump vs China Are U.S. Allies Turning to Beijing Bill Bishop Explains

Summary

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Podcast Summary: "Trump vs China – Are U.S. Allies Turning to Beijing? Bill Bishop Explains"

The Tara Palmeri Show
Host: Tara Palmeri
Guest: Bill Bishop (China expert, author of Sinocism)
Date: February 4, 2026

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Main Theme & Purpose

This episode explores a shifting world order as U.S. allies, notably the United Kingdom and Canada, increasingly engage in diplomacy with China. With the backdrop of a turbulent U.S.-allied landscape and a coming Trump state visit to Beijing, Tara Palmeri and China analyst Bill Bishop dissect the meaning of British Prime Minister Keir Starmer's recent high-profile trip to China. They examine what, if anything, Starmer achieved, Beijing’s long-term strategy, the risk of global alliances rebalancing, the leverage of critical minerals, and how the Trump administration is handling the evolving power dynamic.

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Key Discussion Points & Insights

1. UK Prime Minister Starmer’s China Visit: Substance and Optics

(02:32 – 09:55)

• Not as Sudden as It Seems: Bill Bishop explains that visits by Western leaders to China are not abrupt moves but part of an ongoing trend. European leaders, including France’s Macron and Canada’s Carney, have all made similar trips.
  • “From the Chinese perspective, this isn’t necessarily anything particularly sudden.” (02:33 – Bill Bishop)
• British Position: Starmer appeared “like a supplicant” in China, with the main tangible result being a reduction of whiskey tariffs from 10% to 5% and announced investment figures that seem unsubstantiated.
  • “Among the big wins for the Brits were the tariffs on whiskey... but again, it’s not really clear.” (03:58 – Bill Bishop)
• Domestic Criticism: The British press (Fleet Street, Daily Mail) was severe, framing Starmer as returning empty-handed and being soft on China.

2. Shifting Threat Perception and UK Policy Realignment

(04:57 – 07:21)

• Changing Attitude on China: The UK government has downplayed the threat assessment of China and made practical concessions (e.g., not prosecuting a spy case, greenlighting the Chinese embassy in London).
• Pressure from Traditional Allies: UK’s commitment to a “united front” with the US is under strain, as commercial interests with China become harder to ignore.

3. Is the UK (& West) Defecting to China?

(07:21 – 09:55)

• Not a Binary Shift: The symbolic ‘bending the knee’ is more about exploiting “fissures” in the U.S.-allied relationships than an outright shift to Beijing.
  • “Whether or not this isn’t some sort of binary, all of a sudden they flipped. But it’s progress towards... exploiting growing fissures in the US relationship with these two staunch allies.” (09:48 – Bill Bishop)

4. Trump Administration Response and the Limits of US Leverage

(09:55 – 14:46)

• Trump’s Rhetoric: Trump called the UK’s engagement with China “very dangerous,” but Bishop points out that U.S. policy substance is quite measured.
  • “Donald Trump called the meeting very dangerous. Dangerous to whom?” (09:55 – Tara Palmeri)
• Substance over Optics: Most U.S. governmental reactions are muted; the optics are bad, but the actual moves by the UK are not a security threat.
• Competence at Managing Trump: Starmer has largely mollified President Trump; real danger would come if there are major technology or military concessions, which isn’t the case so far.

5. The Epstein & Mandelson Issue: A Tangled Network of Power

(14:46 – 15:18)

• Potential Scandal Fallout: Bishop speculates that Starmer’s bigger China problem may stem from connections to the Epstein scandal (specifically former UK ambassador Peter Mandelson’s ties), more than his China trip.
  • “Starmer may end up with a bigger China problem because of... Mandelson revelations from the Epstein files than his China trip.” (14:57 – Bill Bishop)

6. Critical Minerals and the New Strategic Competition

(15:24 – 18:41)

• Why Rare Earths Matter: The U.S. and allies acknowledge vulnerability due to China’s stranglehold on critical minerals essential for tech and defense.
  • “There’s a real recognition in the U.S. government... that the Chinese control over critical minerals, rare earth supply chains, is a huge point of leverage.” (17:41 – Bill Bishop)
• Allied Pushback Has Begun: The D.C. “critical minerals summit” is evidence of a coordinated Western push, but Bishop warns breaking China’s dominance will take years.

7. Tariffs, Trade Tools, and Mutual Economic Pain

(20:18 – 24:18)

• Tariffs Not a Silver Bullet: China has adapted to high tariffs via subsidies, low margins, and rerouting trade. U.S. leverage in tech and jet engines cuts both ways due to globalized supply chains.
  • “They would prefer to have lower tariffs... but it is not, ‘Oh my God, the tariffs are 45%... and therefore all these Chinese businesses are going to... collapse.’” (22:26 – Bill Bishop)
• Misreading Each Other's Leverage: Bishop notes the Trump team overestimated China’s economic fragility and underestimated Beijing’s supply-chain power.

8. Is China Actively Poaching U.S. Allies, or Just Filling a Void?

(24:18 – 26:43)

• Active Engagement: China promotes itself as a force for stability, not expecting to flip allies but to widen gaps as U.S. relationships fray.
  • “They just want to be able to exploit the growing space between the US and its traditional allies... move into the cracks and the fissures that are created over time.” (25:43 – Bill Bishop)

9. China’s Long-Term Strategy and the “Wait-and-See” Approach

(26:43 – 27:45)

• Letting the West Weaken Itself: China’s approach is often to let Western alliances unravel (“watch the US do it to themselves... and then see where they can exploit those weaknesses”).

10. Is This a Fundamentally New Global Power Moment?

(27:45 – 29:35)

• A Unique Shift: The combination of a powerful, assertive China and the unpredictability of Trump’s second term is historically unprecedented.
  • “This second Trump administration is [an] extreme anomaly in U.S. political history... Xi Jinping... started saying that the world is changing in ways unseen in 100 years. He’s right.” (27:56 – Bill Bishop)

11. Middle Powers, South Korea, and Hedging Strategies

(29:35 – 31:26)

• Caught in the Middle: Allies like South Korea are pursuing their own hedging strategies, uncertain about whether to rely fully on the U.S. or diversify towards China for economic and strategic reasons.

12. Looking Ahead: What Does 2028 Hold for U.S.-China Relations?

(31:39 – 37:17)

• Potential for Stabilization: If the Trump-Xi relationship remains stable and absent a Taiwan crisis, Bishop sees room for “longer-term stabilization.” China’s overarching goal is to solidify its global economic ties, build up its own resilience, and steadily erode U.S. influence rather than seek outright friendship.
  • “If this April visit goes off well... the Chinese could actually be pretty confident that there might actually be a longer-term stabilization...” (32:54 – Bill Bishop)
• Overconfidence Risk: Bishop warns that while China feels it has figured out Trump, such confidence can breed strategic miscalculation.

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Notable Quotes & Memorable Moments

• On Western leaders’ China visits:
  “From the Chinese perspective, this isn’t necessarily anything particularly sudden.” — Bill Bishop (02:33)
• On UK’s real gains from China trip:
  “The Prime Minister really looked like a supplicant... The big wins for the Brits were the tariffs on whiskey... but we’re not actually sure.” — Bill Bishop (03:58)
• Optics of Starmer’s trip:
  “Starmer has shown a pretty good ability to kind of mollify President Trump, I think.” — Bill Bishop (11:47)
• On China’s aim:
  “They just want to be able to exploit the growing space between the US and its traditional allies. Like water, they move into the cracks and the fissures.” — Bill Bishop (25:43)
• Xi Jinping’s prescience:
  “Xi Jinping... saying that the world is changing in ways unseen in 100 years. And he’s right.” — Bill Bishop (27:56)
• On rare earths leverage:
  “There’s a real recognition... that the Chinese control over critical minerals...is a huge point of leverage.” — Bill Bishop (17:41)
• Prediction for 2028:
  “The Chinese could actually be pretty confident that there might actually be a sort of a longer-term stabilization... their goal is to keep it stable while they focus on building up their economy, reducing reliance on the US, picking off American allies, building their trade networks...” — Bill Bishop (32:54)

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Important Segment Timestamps

• Opening, Starmer’s visit context: 02:32 – 03:58
• UK-China relations, “supplicant” optics: 03:58 – 06:56
• Middle power dilemma, Five Eyes: 07:21 – 09:55
• Trump’s critique, real U.S. concerns: 09:55 – 11:39
• China’s critical minerals leverage: 15:24 – 18:41
• China as stabilizing force vs. U.S. instability: 24:28 – 26:43
• Historical uniqueness of this era: 27:56 – 29:35
• Long-term trajectory, 2028 outlook: 32:54 – 37:17

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Tone & Final Reflections

The conversation is incisive but conversational, blending policy realism with a healthy dose of skepticism and humor—especially regarding political scandal and the persistent shadow of the Epstein network. Bishop’s tone is pragmatic, less alarmist than analytical. Palmeri keeps the discussion brisk and accessible, frequently seeking clarity for listeners unfamiliar with the nuances of international relations.

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Quick Takeaways

• China is not “stealing” Western allies, but is exploiting new openings caused by U.S. unpredictability.
• The Starmer trip was more symbolic than substantive; Beijing prizes the optics.
• Critical minerals/rare earths are a major battleground for future leverage.
• The Trump administration’s threats are mostly bluster; bureaucratic cooperation continues behind the scenes.
• The next few years may see a more stable but less U.S.-centric global order, especially if major crises (Taiwan) are avoided and China’s approach remains cautious but opportunistic.

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For more in-depth analysis, follow Tara Palmeri’s newsletter, The Red Letter, or Bill Bishop’s Sinocism newsletter for China watchers.

Transcript

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[Tara Palmeri]

Welcome back to the Tara Palmeri Show. Today we're focusing on the world's alliances and how they're beginning to shift as a quiet but consequential meeting is raising alarms in Washington. British Prime Minister Keir Starmer just traveled to China last week, drawing sharp criticism from Donald Trump, who called the visit, quote, very dangerous. But is this about diplomacy or are there early signs of something bigger, a global rebalancing, you could say. To break it all down, I'm joined by Bill Bishop, one of the most respected observers of China. We unpack what Starmer actually gained, what Beijing is offering to US Allies, and whether Washington is losing its grip. From minerals and trade leverage to tariffs, alliances and China's long game, this is a conversation about power perception and what comes next. Take a listen.

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[Tara Palmeri]

What's in here? You're live, we're rocking and rolling. Everybody is super eager for this one. So I'm really grateful to have you on the show, Bill. So we've got.

[Bill Bishop]

Thanks for having me.

[Tara Palmeri]

We've got Bill Bishop, who is one of the preeminent experts on China. And, you know, I think last week everyone sort of woke up to the new world order. We've been seeing it happen creep and creep. We've seen the creep, right? But when you have Keir Starmer, prime minister in the uk, the Labour prime minister, visit China, he's obviously sending a message to Washington. What was your, what, what were you thinking when you saw that news, when you saw his meeting, when he met with Xi?

[Bill Bishop]

So it's interesting, I think, that from the Chinese perspective, this isn't necessarily anything particularly sudden. They've had a stream of investigation, a stream, a stream of European leaders arriving in Beijing or on their way. I think French President Macron was there, I think, in December. You've had the Finnish Prime Minister was there a few days before. Starmer, the German Chancellor, is heading there in a couple weeks, I think. And then of course, you had the Canadian Prime Minister there who made some comments that I think were more stark than either Macron or the UK Prime Minister made in terms of a sort of the changing world order as they see it. And so I think this is just a. On the one hand, it makes sense for these countries to have to try and have stable relations with the prc, but at the same time that it's coming amidst the backdrop of what is a, I think a much more turbulent relationship with their traditional ally, the US and so I think last week, you know, the optics of the visit, specifically the UK Prime Minister's visit, were frankly not particularly favorable, I think for the Brit. For the British side, the Prime Minister really looked like a supplicant. He didn't actually get much. The Prime Minister's on substack. Keir Starmer is on substack and he posted, you can probably put it in the link. He posted a piece over the weekend just titled China, where he was sort of a political defense of his trip to China and why it was important to have a more sophisticated relationship with China and that they've wasted eight years of doing nothing, which again is, I mean, politicians all exaggerate, right? That's what you cover that on a regular basis, the hyperbole. But I think that ultimately the Brits got. Among the big wins for the Brits were the tariffs on Whiskey went from 10% to 5% which again, I don't think can have much of an impact. But that certainly can be touted as a win. He claimed 2 something billion dollars worth of investments and 2 something billion dollars worth of exports. But again, it's not really clear. We know from other national leaders who make big claims about investment and trade. Yeah, you know, we're not actually sure.

[Tara Palmeri]

Investment, that never happens.

[Bill Bishop]

But really what you have is, I think over the last few months, certainly from the way the British, you know, parts of the British political establishment have been attacking the current Prime Minister. You have what they claim is really a bit of a kowtowing towards China. You had the last year the UK government rolled out this sort of foreign, foreign registration tier where foreign actors had to register and they were the highest tier originally people thought it would be China would be included in that. And then it ended up only being Iran and Russia because of very special interests that were concerned specifically minor standing in the financial sector that were concerned that putting China in the highest tier would cause problems for business. You had a spy case that was effectively dissolved on the eve of trial last fall, because again, you never underestimate to sort of the potential for a real cock up. I did a live on this with one of the actual expert witnesses for the prosecution a few months ago, but really it was more, I think that the British government had sort of changed, downgraded his assessment of the threat from China. And so it was no longer. The prosecution was no longer able to argue that these two men had committed crimes that they were alleged to have committed. And so that case was dropped. And so that. And then of course, there was this massive new embassy that the Chinese purchased this property, the Royal Mint, several years ago and it's been stuck in kind of planning purgatory. And the Chinese side had made it very clear that there would be no storm of visit until planning was unlocked and this embassy was allowed to go forward. Of course, the decision was made two weeks ago and then the trip was confirmed. UK Prime Minister Starmer and a delegation, I think of 60 business executives then showed up in Beijing about a week later.

[Tara Palmeri]

Yeah, I mean, the British press is pretty brutal. We all know that.

[Bill Bishop]

They are very, very skilled at being brutal.

[Tara Palmeri]

Yes, exactly. That's where you cut your teeth, right? Fleet street and the Daily Mail, they really, you know, slapped him across the face for going there. They felt like he came home empty handed. Like you said, you know, the Tories, it is obviously a Tory paper. Tories have always been pretty hawkish on China. When is the last time a Prime Minister from the UK has visited China? Or Xi?

[Bill Bishop]

I think this was. It was eight years. Eight or seven or eight years. Of course, part of that was Covid, but then part of it was just the general. That there was, you know, the general downturn of the relationship. You know, there are issues over Hong Kong. There are issues over. There's a UK citizen, Jimmy Lai, who's, who's been convicted of various national security related crimes in Hong Kong and they're awaiting sentencing. He's in his mid to late 70s, health isn't great. He's most likely going to die in prison. And again, this is another area where there were some voices in the UK that were hoping that the UK Prime Minister would be a little tougher on that, but clearly he says he raised it privately, but nothing has come of that. And so I think ultimately that the UK signed on to the Biden administration approach to China, trying to build more of a united front to take sort of a more of a concerted, tougher line towards China. This then goes back, I think, to your opening question, which is that for these countries, the phrase people use is middle powers like the uk, like Canada. The question becomes, why are we sacrificing these commercial interests with the second largest economy in the world? When we're being treated as they see it, they're being treated increasingly dirt by their traditional ally, the US and so I think you can make a pretty cogent argument for why there should be more engagement. While it is important that the UK and the PRC are talking or Canada and the PRC are talking, I think the mistake is if you see the leaders of those countries decide that somehow the PRC is more stable or more reliable than the US Is UK Prime Minister Starmer, I think he's been pretty clear that's not where they are. The Canadian Prime Minister, a little bit not less clear. And you think about it from Beijing's perspective, you have two of the staunchest, historically not just U.S. allies, two NATO members and also two members of the Five Eyes intelligence sharing alliance, the U.K. it's Australia, UK, New Zealand, Canada, and the U.S. so just in the last three weeks, you've had the U.K. and the Canadian leaders in China effectively in some ways bending the knee to Beijing. And so whether or not this isn't some sort of binary, all of a sudden they flipped. But it's progress towards opening up or exploiting growing fissures in the US relationship with these two staunch allies. And that, you know, that's a, that's a positive for Beijing, however you cut it.

[Tara Palmeri]

Yeah. Donald Trump called the meeting very dangerous. Dangerous to whom?

[Bill Bishop]

Like, I mean, that's, that's the question. So what? So now we're going to, we're going to threaten them again? You know, we supposedly have a trade deal. And where does this go and where is it? Okay, on the one hand, the US Is cutting a trade deal. President Trump is clearly focused on cutting a big deal with China. His administration has put a hold on all sorts of actions against China because they don't want to mess up the current trade deal and they don't want to mess up the April big state visit to China that President Trump is planning. So one of the questions would be, well, these are sovereign countries. Why don't they have the right to also cut deals? I think that ultimately you get past the headlines and the two countries, at least the U.K. i think there still are constructive conversations underway so that it won't be this Kind of you can run the risk of, excuse me, my dog has come back and wants a treat. I apologize. Tashi, come on, buddy. But ultimately, I think that my guess will be that the UK Will manage the US Relationship a bit better than I think the Prime Minister Carney has been doing. And so what Trump threatens, I mean, again, when you look at, like, you know, there are other things that we need from the, from the U.K. you know, we're working with them on Ukraine. And so I think it is just a, you know, the President. President Trump can make all these threats, but it's what, what getting beyond the sort of the. The pretty nasty partisan UK Press and, And the political attacks in the uk What Prime Minister Strummer agreed to in terms of substance wasn't really that interesting.

[Tara Palmeri]

Okay, so, you know, and Starmer also said he won't choose between the US And China. Is that really sustainable, or do you think Trump will force him to make a choice?

[Bill Bishop]

I mean, I think that ultimately, I think that. I don't think the US President Trump administration is. Is crazy enough to try and make them somehow choose. Because, I mean, ultimately, again, what the UK Has. Sorry, what the UK has stopped, what the UK Agreed to in this trip, it doesn't really. The US The Canadian agreement is a little worse because. Or potentially riskier because the Canadians are now allowing in a certain number of these connected new energy vehicles, these EVs, which the US doesn't allow in the country. The UK is already a very large market for Chinese EVs, and so this has been going on for years in the uk so again, it's not clear on what grounds the President Trump would have to sort of threaten the UK Over Starmer's visit. Because as bad as the optics are, it isn't like Starmer is suddenly turning over the country to the Chinese. I mean, even things like the uk this new embassy that the UK has approved for the prc, you've seen, I think, that the House Select Committee on China issued a letter talking about some of the risks. And the biggest risks around this embassy that have been highlighted publicly are around these fiber optic cables that run adjacent to the site. And the concern is the Chinese can somehow tap into them and they are carrying sensitive data. The US Government, my understanding, has not. Actually, the US Intelligence Committee has not issued any public statement. The UK Intelligence services had said the risk, they can mitigate the risks from these cables. And so again, from parts of the US Government, again, it's not at all clear that they're that upset with what's going on. So ultimately I think so far Starmer has shown a pretty good ability to kind of mollify President Trump, I think. And then you've got today or tomorrow, I think we've got a rare earths summit, a critical mineral summit in D.C. i believe UK is part of that. The US administration is trying to put together a pretty significant consortium to deal with or to try and mitigate the risks from the PRC stranglehold on critical mineral supply chains. And so moving past these truth social depending on what time of day threats he makes ultimately again I mean never say never with President Trump, but it would certainly be unfortunate and I think somewhat unjustified to sort of go get really harsh on the UK because this trip again optics aren't great. Substance really doesn't seem that particularly interesting or problematic at this point. It just frankly from a. I'll be honest with you, and this is something you've covered a lot is Starmer's bigger problem is Epstein and Mandelson. And ultimately there's this, of course it.

[Tara Palmeri]

All goes back to Epstein.

[Bill Bishop]

No, it all goes back to Epstein but ultimately it goes back to, it goes Mandelson. He was the US he was UK's ambassador to the DC at the beginning of the Trump administration.

[Tara Palmeri]

Right.

[Bill Bishop]

And he had as some of his clients, he had Chinese interests as his climates including Huawei. Starmer may end up with a bigger China problem because of stuff that comes out of these Mandelson revelations from the Epstein files than his Chinatrip. As you said, it all goes back to this just, just disgusting network.

[Tara Palmeri]

Yeah, yeah.

[Bill Bishop]

Network, yeah.

[Tara Palmeri]

Because it couldn't, he couldn't have lived without his network or sustained what he was doing without this network of powerful people.

[Bill Bishop]

Right.

[Tara Palmeri]

Just to go back to what you mentioned about the rare earth minerals, you're talking about the new mineral reserve that worth nearly $12 billion that Bloomberg wrote about. Yeah, yeah. You think, do you think it could actually counter China's dominance on the process?

[Bill Bishop]

I think there's a real impetus now among many like minded countries to finally try and break China's stranglehold on these critical minerals. Even though China's been telling the world they've been going to do this for basically the last 15 years or so and everyone, there were lots of academic and policy sort of studies, lots of admiration of the problem. No one really did anything until basically Xi Jinping called Trump and best its bluff last year and proved that he has a lot of power over the US and so basically was again achieved victory in the first round of this latest US China trade war. And so I think that the Trump administration was pretty sobered by how much you remember early on last year in the beginnings of the, I think around Tariff Liberation Day last April, Treasury Secretary Bessant, in honestly, perhaps one of the dumbest statements of the year, said that China was playing with a hand of a pair of twos. And then very quickly, I think he realized actually China was playing with a lot of leverage and was able to call the Trump administration bluff around, rehears and force effectively a truce. And not only a truce for the deal that was announced last November in South Korea, but also for the Trump administration to basically put a stop on any new measures that might upset the Chinese around technology, around certain types of sanctions, around trade investigations, from semiconductors to pharmaceuticals. And so there is a real recognition in the U.S. government and allied capitals that this is a massive risk, that the Chinese control over the critical minerals, rare earth supply chains is a huge point of leverage for them and a massive risk. And so I think at this point now, you do have enough minds focused that there will be a much more significant effort to try and break that stranglehold. But it's not something that's going to happen in a year or two years. You had Secretary Bessant a few months ago, went on cnbc. He was at one of these rare earth facilities and startups in South Carolina. He held up a magnet and said, we're making magnets here now. And they are, but they're making not very many. Right. And so it's still a ways off, but this is an important initiative. And so I think we should all it's actually positive. And this goes back to, on the one hand, you have say, President Trump, he'll threaten on true social, but at the same time, the actual bureaucracies in many areas are still working together. And so that's where I think it's important to not to sort of look at the relationship we were talking about. The UK Is it's not binary. There's a lot of different facets. And in many areas, the US and the UK are still working together around what they consider to be challenge, or they've diagnosed as challenges with China.

[Tara Palmeri]

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[Bill Bishop]

So the, so the U.S. has, you know, they're. In addition to tariffs, there are a fair number of areas where the US still has a lot of leverage around key inputs that the Chinese need. I mean, clearly semiconductors are one. And while the Trump administration has not relaxed the controls on semiconductor equipment, manufacturing equipment that the Biden administration put in place or the actually the first Trump did and then the Biden administration expanded upon them. They did allow, of course, not the most cutting edge, but very good, better than the Chinese can make Nvidia chips to now be sold into China. Again, they had some leverage before South Korea, the South Korea deal last fall when things suddenly got pretty dicey and it looked like the deal they thought they had was falling apart. The US Threatened restrictions on exports around commercial aircraft, jet engines, certain types of chemicals. There are areas where the US has leverage, but the problem, part of the problem is using that leverage would cause a lot of pain for US Companies. But then at the same time, the Chinese have really quite skillfully built over the last 15 to 20 years significant leverage over key supply chains in the US with their rare earths related, really their dominance of the rare earth processing industry and the rare earth Magnus industry. And that I think ultimately the Chinese have the ability to cause significant chaos in important parts of the U.S. industrial manufacturing industries in this country. And that is where I think the Trump administration saw that. And that's where they blinked last fall. And the Chinese were not, the tariffs hurt them. They would prefer to have lower tariffs. They've gotten to a point where, with the US China deal, they've gotten to a point where the tariffs are, they like them to be lower, but they're manageable. They can adjust. They can adjust and they can because.

[Tara Palmeri]

They don't really care about, it's a communist country. People aren't.

[Bill Bishop]

Well, I mean, a lot of the exports come from companies that, you know, that do care about profit. But they, they have, you know, they have the ability to operate on very low margins. They, the government is giving certain subsidies like export credits, export support. They also are, have the ability to trans ship through other countries that have lower, lower tariffs in the U.S. and so there's, you know, it's, it's, it's, it's not ideal. They would like to be lower, but it is not sort of, you know, oh, my God, the tariffs are 45% or where they are now. And therefore all these Chinese businesses are going to, it's going to collapse. Because again, there was a, I think starting at the beginning of this Trump administration last year, there, I think was a pretty significant error in the diagnosis of the fragility of the Chinese economy, where I think the US Side really overestimated how much leverage they had and underestimated the leverage the Chinese had, specifically rare earths. And that's where we ended up by the end of last year into today, really a pretty significant truth that ultimately I think is if you're on the Chinese leadership side, I think you have to say that, or you have to believe that they did about as good a job as they could have hoped for in managing the Trump administration in the first year. And then at the same time, because of the way the Trump administration has been stressing traditional alliances and traditional partners, it's creating a lot of space for the Chinese to improve their position with countries like the UK Countries like Canada that more traditionally would have been at least even recently in the Biden administration were more, much more, taking a united front against China with the U.S. okay.

[Tara Palmeri]

So just like, do you think that China is actively poaching our allies or are they just filling a vacuum right now in terms of leadership?

[Bill Bishop]

I think that the Chinese are actively trying to, you know, there you saw it from the speech that the vice premier, Holy Fong gave at Davos last month. I mean, you hear it and regularly see it in the sort of, the way they're talking, Xi Jinping's talking in meetings with leaders. The sort of what they're putting out in official media propaganda channels is really, you know, they're, they're portraying China as the force for stability and predictability in the world right against this, you know, you know, they describe the US as the biggest source of instability now in the world. And you know, when they look at, I don't think they believe that they're suddenly going to flip, you know, flip a traditional US ally to oh, we're going to, you know, we're going to give up on the US and we're going to come out of ally China. But again, that that isn't their goal, that they just want to be able to exploit the growing space between the US and its traditional allies. And with, for example, this UK trip, there's the business deals, there's deals around people to people exchanges. You've already seen the UK government, in preparation for this trip, they made some concessions around approving this embassy. This spy case was withdrawn. Again, the UK government will say it had nothing to do with this trip. But certainly from China's perspective, I think you can see the UK has moved, moving more towards a less of a aggressive, confrontational approach to China and more of a we can do business with them kind of approach, which is again as best as they can hope for in the short term. And then over time, if the US keeps stressing these relationships with threats of whatever they may threaten to do over the UK's starmers, visit the UK to China or over Greenland, although maybe Greenland is now resolved, I don't know. But those just present opportunities for the Chinese. You know, you think about like water, they could just sort of, sort of move into the cracks and the fissures that are created over time, they can sort of expand things and sort of change for them. You know, again, just make it so that these countries are more amenable and more pliant towards China's, China's offers and desires.

[Tara Palmeri]

Do you think the long term strategy is to weaken, weaken Western alliances during this administration?

[Bill Bishop]

I think honestly in some ways the long term strategy is just to watch the US do it to themselves and then see where they can exploit those weaknesses. I think that is something they want. That has certainly been a goal. I mean, if you think about it, in the last year or so the Biden administration, the Chinese side, was getting extremely exercised over this talk about Asia expanding to NATO, because there was talk about having NATO open an office in Japan. A lot of talk about Taiwan. And now of course, with Greenland, with Ukraine. NATO itself is under stress. There's no more discussion of NATO expanding into Asia. That is a win for Beijing. But they didn't really have to do anything.

[Tara Palmeri]

It's kind of like the Democrats. They can just sit on their hands during this.

[Bill Bishop]

I will see if the Democrats are as smart as the Chinese are at sort of exploiting this chaos.

[Tara Palmeri]

Yeah. So have we ever seen versions of this playbook during prior US Administrations, I'm guessing, or is this a different moment fundamentally than ever?

[Bill Bishop]

I think this is a different moment fundamentally. I mean, there certainly was, you know, China, you know, there's a lot of different things sort of, of coalescing at the same time. Right. China has never been this powerful or this important or this influential in the world. You also, I think this second Trump administration is extreme anomaly in sort of U.S. political history and in sort of U.S. foreign policy. And so it's hard to find any period that is really directly analogous to what's going on. I mean, it really is. You know, Xi Jinping for years has like to use to sort of say that the world is changing in ways unseen in 100 years. And you know, I mean, he started saying that maybe not quite a decade ago. And you know, he's right. Right. I mean, look at what's going on. All these changes are accelerating and you know, this, this whatever the previous world order was, you know, and a lot of it. And I think, you know, Canadian Prime Minister Carney in his speech, he sort of talked about how this, this rules based international order was sort of there. But not everyone necessarily always everyone actually lived up to it. But you could at least have a fig leaf that it was there. I mean, the fig leaf is just gone. And then so now everyone I think is trying to figure out, well, what's next. And so you have these middle powers like the countries in the eu, like the uk, like Japan, who I think would much prefer a world where they can rely on the US but also now are in a position where they need to start thinking a lot more about how they hedge. And that's a, that's an own goal.

[Tara Palmeri]

From the US What I know you're talking about the middle powers, but what about South Korea, who is another, which was another one of our allies, that we have a frayed relationship now? Looks like they're growing closer to Xi. There have been crackdowns on us.

[Bill Bishop]

I mean, you know, they're they're there. We have a treaty alliance with them. We have a lot of US Troops in South Korea. They have a, you know, an existential threat across their border, North Korea. The current prime minister is more, I think, sort of more known as being more leftist, more sort of sympathetic to China. When he came in, he's again trying to hedge, but he's also trying to work with the US and so it's more like these middle powers, I mean, they are stuck between two large and difficult countries. And the challenge, I think, is when people get sort of, and this is part of, because of the rhetoric and some of the stuff the Trump administration is doing, it makes it easy for certainly people who have a, especially outside of the U.S. who have a general, I think, anti U.S. ban or disposition against the U.S. to sort of compare the U.S. and China as like, in terms of political systems and the way they're treating dissent and the way they're treating just a lot of things internally. And I'm not going to defend by any sense what the Trump administration is doing. We're still not like China. Right. That may happen. I certainly hope it doesn't. But we're not there yet. And so I think the hope, but the problem is the hope that somehow the US Is going to revert to what it was. I mean, we're what, a year and a week or a year and 10 days into Trump, too. I mean, it's going to get a lot worse. I mean, there's not a lot of, I mean, I shouldn't say that, but it's certainly, if you had to bet, I think you would have to. The odds are high that it's going to get a lot worse here.

[Tara Palmeri]

Yeah. And it's actually one of the few powers President Trump will have with a Democratic Congress to deal with is, you know, or in policy. We'll see.

[Bill Bishop]

I mean, it hasn't happened yet, but yes, we'll see.

[Tara Palmeri]

Okay, you're right. We'll see what happens. You sort of led me into my last and final question. So it's 2028, Trump's leaving office. What does the US China relationship look like?

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[Bill Bishop]

You know, that's a great question. And I think on the, you know, if you think about the first Trump administration, the first year or so was really, there was a lot of tension. The first trade war, and then actually President Trump himself really seems to want to have a relatively positive relationship with China and with Xi Jinping. And so things, once they got the first trade deal done, things actually kind of stabilized. And then Covid happened, and then Trump blamed China for Covid. And then things got, excuse me, things really kind of went off the rails from the Chinese perspective. I think, again, they believe they're in a quite a good spot with the US Both in terms of the bilateral relationship, but also with the way that the US has been treating traditional partners and allies and how that's creating space for China if this April visit goes off. Well, if Trump does go to China and his first visit in term one was a state visit plus. So I don't know how they're gonna top that. They opened up. The one thing that's funny, right, is they gave him a private tour of the Forbidden City. They shut it down. He got to go into parts of the Forbidden City that no foreign leaders get to go to. Starmer gets to go to the Forbidden City. They don't even shut it down. His video he makes, he's like, all the tourists are just sort of walking around, right? So it was, no, I mean, it was like. Right, right. But to answer your question, though, my point is I think that on the current trajectory, the Chinese could actually be pretty confident that there might actually be a sort of a longer term stabilization where they, you know, the US China trade relationship has sort of, it didn't get as bad as they thought. The big issue, of course, is what happens around, around Taiwan. And the, that one is, you know, as long as the, and I think as long as the Chinese side believes that there are political forces in Taiwan where that there may be continue to be an opportunity for some sort of a peaceful deal in the way that the mainland wants it in terms of what they call reunification, then the Trump administration, it isn't clear how, it isn't clear how much support they're ultimately give Taiwan. If there is the ability to have progress towards some sort of political deal. I mean, they're certainly, you know, the US has been selling, they had a big arms package, arms sale to Taiwan in December. The National Defense Strategy doesn't talk about Taiwan, but it talks about the geography, the first island of the chain, in a way that makes it sound like they would defend Taiwan. But ultimately, if the Chinese side, if there isn't some, some event or some reason that the Taiwan issue becomes much more intense or gets closer to some sort of a, whether it's a blockade or quarantine or God forbid, some sort of a conflict, I think that ultimately the US China relationship can be, the Chinese, I think they can actually manage it relatively well. And for them, they're not expecting the relationship to get good like it used to be. They just want to keep it stable while they focus on building up their economy, reducing reliance on the US Picking off American allies, building their trade networks and increasing other countries reliance on China while insulating their economy and their financial system from the US and that isn't going to stop based on happy talk or a nice visit from President Trump. And so they're very clear at eyed that this relationship is sort of in a long term structural competition. But I do think after the first year or so, they've gotten more confident that they know how to manage Trump and his administration. I worry, I think there's a chance they're overconfident. But again, we'll see. I mean, I'm so wary now of predicting anything that President Trump does is just like, I mean, you look at what happened in Trump 1, you look up in the last year. But from the Chinese perspective, I have to say that they really do think they have President Trump's number. And at least so far, it's hard to argue with that.

[Tara Palmeri]

Yeah. Well, we're gonna end on that note. Came right to the half hour. Thank you so much, Bill. This was a little.

[Bill Bishop]

Thank you. I'm really happy to be on your big, big, big fan, happy subscriber. It's an honor to be on the show. Thank you.

[Tara Palmeri]

I feel like I always learned so much from you and it felt like a really important topic. And I know, as you said, you know, the UK was not the first to visit but one of our closest allies, and I think was startling for a lot of Americans to see that.

[Bill Bishop]

But then, but then, if the Starmer government falls because of Mandelson and Epstein, then maybe, you know, the conservatives are pretty hawkish on China, so you never know, it could flip quickly.

[Tara Palmeri]

That's right. Only Epstein can change this. Yes, that's the answer. And if you want more Epstein news, go to the Red Letter. My latest on the guy leading the Epstein investigation, Jay Clayton, and how he is very closely tied with Leon Black, one of Epstein's closest allies who had to. Leon Black had to leave his job because of, because of his relationship. And then he picks Jake Clayton to succeed him, the guy who's now in charge of the Epstein. It's all gross power bleeding itself.

[Bill Bishop]

I don't know how. Thank you for your coverage of it. It's all gross.

[Tara Palmeri]

Thank you for your great coverage. Shoe. Well, thanks everyone for tuning in and sign and become subscribers to both of our channels if you're not already. We appreciate your support. Thank you. That was another episode of the Tara Palmari Show. Thanks for tuning in. I know it was a little different, but I hope you all learned something. I did too. You can support this show by following subscribing, sharing it with all your friends. You can head to the Red Letter by going to tarapalmieri.com you can sign up for my exclusive reporting straight to your inbox. It's how you keep me working, doing my independent journalism. I want to thank my producer Eric Abenate, Abby Baker for doing the research and and social media preparing me for this interview. Adam Stewart on the graphics and Dan Rosen, my manager. See you again soon.

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