In this episode, Anita talks with Sarah Bauerle Danzman of Indiana University, Bloomington. We discuss the Biden administration’s latest actions on preventing the transfer of intellectual property to China and creating high-paying union jobs at home.
We also dive into the latest on the Russia-Ukraine war and the missile that crossed into Poland, killing two people. Finally, we discuss the rise of the far right in Israel and what we can expect from Benjamin Netanyahu’s return to power.
Topics Discussed in this Episode
Articles and Resources Mentioned in Episode
Russia-Ukraine Update
Israeli Election and the return of Netanyahu
Interview with Dr. Sarah Bauerle-Danzman
Follow Us
In this episode, Anita talks with Sarah Bauerle Danzman of Indiana University, Bloomington. We discuss the Biden administration’s latest actions on preventing the transfer of intellectual property to China and creating high-paying union jobs at home.
We also dive into the latest on the Russia-Ukraine war and the missile that crossed into Poland, killing two people. Finally, we discuss the rise of the far right in Israel and what we can expect from Benjamin Netanyahu’s return to power.
Topics Discussed in this Episode
Articles and Resources Mentioned in Episode
Russia-Ukraine Update
Israeli Election and the return of Netanyahu
Interview with Dr. Sarah Bauerle-Danzman
Follow Us
Welcome to Kellogg's Global Politics, a podcast on current events in the US foreign policy and international affairs. My name is Dr. Anita Kellogg, an international relations scholar specializing in the relationship between economics and national security. I'm here with my co-host Ryan Kellogg, an expert in energy investment and policy. Thanks, and glad to be back. So this is episode 23, and we're recording this on November 20, 2022. In this episode, I talk with Sarah Bauerle-Danzman of Indiana University Bloomington. We discuss the Biden's administration's latest actions on preventing the transfer of intellectual property to China and creating high-paying union jobs at home. First, however, we dive into the latest on the Russia-Ukraine War and the missile that crossed into Poland killing two people. We also discuss the rise of the far right in Israel and what we can expect from Benjamin Netanyahu's return to power. So we're actually recording two weeks in a row because we decided that instead of just skipping the holiday episode, which is what we're usually doing, holidays that we would record early so we could still have another episode come out at our usual time. Yeah, that's pretty disciplined of us. I know. Me too. But yeah, so we have Thanksgiving, so American Thanksgiving coming up, and we are making the drive to North Carolina. And I'm already dreading it because any time you drive around Thanksgiving is scary, but any time you're leaving the DC area, well, I mean, any time of the year, let alone around the holidays, it could be quite the undertaking to say the least. I can't remember what we did last year. Honestly, these drives kind of blend in, but just getting stuck. I think it was one of the bad ones because we left after Becca got off of school. Oh, that was dumb. Okay. So it was the 22nd, but it was after Becca got released from school. So it was in the evening. Yeah. So it's probably what? Tuesday evening, we left. So of course we get stuck in the normal nightmare traffic jam around the DC area. And then it's heading south on 95. I feel like that took three or four hours to go 50 miles. Collagen. Yeah. So have a new strategy this year. Even though according to the local news, Wednesday is the absolute worst day to drive in the area. We're going to leave Wednesday, but we're going to try to leave here at 4 a.m., which I know you and Rebecca are thrilled about. But the theory is that the morning traffic begins at 5 a.m., so we should be able to beat it and make it out of that 50-mile radius. Yeah. I'm actually supportive of this idea, even though I'm not. Okay. Wow. Yeah. I think too, because like, so when I was younger, we drove on all our long-distance trips, right? Like they were further than your parents, but they'd be like 24 hours or whatever. And for some reason we would always leave like a two or three in the morning. Yeah. I think the intention was to leave around six, but like my mom just couldn't fall asleep. And so we would just end up, they'd end up like just bundling us up, putting a coat over like our pajamas or something with our pillows and just leaving in the middle of the night. Yeah. And this is just about distance. I mean, you'd have to worry about traffic. No, it wasn't traffic at all. I think this is just my mom not sleeping before a trip. I'm like, okay, we might as well get started now. Yeah. So it always reminds me. Two or three, I know we'll be safe there. Although I have read stories. Yeah. People get stuck in traffic jams at 2am just because that's when they do construction. You have all that construction on 95 in the middle of the night. Construction everywhere here. Let me tell you. And then if enough people think like us, which is probably quite a few, they're still that dangerous just getting stuck in a big old traffic jam. At 2 in the morning. Except it's at 2 in the morning. So we have thoughts out to everyone who's traveling holidays, especially if you also are flying because that's always the most stressful thing to do. Yeah, definitely. Good luck to everybody. Yeah. And hope everyone has, well, this comes out after Thanksgiving. So. Oh yeah. Well, hope everybody had a happy Thanksgiving. Yeah, exactly. That's a good way to think about it. So onto our first story, which is the Russia-Ukraine war update and the missile that had landed in Poland killing two people. Yeah. So this happened on Tuesday and it was really the context behind it was a massive assault by Russia with nearly 100 cruise missiles getting targeting the Ukrainian electrical infrastructure. Now, during this, the AP sent out a pretty breathless report that got a lot of people around the world panic because one of these missiles landed in Poland. So about 10 miles or so from the Ukrainian border, it ended up striking, I think, a farm silo and exploded resulting in the death of two people. And obviously this set off a lot of speculation. Was Russia doing this deliberately? This represented an attack on NATO territory. So there was a lot of on the extremely panic side, hashtag World War three trending on Twitter and then a little bit more sober side, a lot of discussion around Article Five and the NATO treaty and the thought of could this potentially trigger mutual defense and the entry of NATO allies within the war. So there was a lot of speculation. There were a lot of hot takes that Tuesday. But in terms of the decision makers, I think everybody was very level headed. The Russians were fairly uncommunicative, but saying that this was not their fault and they were not involved in it, which ended up being fairly true in a certain sense. NATO members did meet. You had Biden, a number of the NATO leaders still at the G20, Poland and their National Security Council met the day of and essentially it was a investigation of the site and ended up revealing that the missile was in fact one of Ukraine's air defense missiles that was launched to protect Ukrainian infrastructure. There's no details on exactly what went wrong, but that was the source of the missiles. So they were trying to intercept these Russian cruise missiles, got off track or exploded and ended up going into Polish territory. Something that the Ukraine refuses to accept. Yeah. So that is the one area of disagreement is Ukraine is insisting that this is not one of their missiles, even the Polish authorities and NATO and the US have all agreed that, yeah, it's clearly not Ukraine's fault. This is an act of self-defense. So that's why I don't understand. No one is saying it's their fault, yet they just refuse to say it was Ukrainian missile. Yeah, I don't get it. Yeah. It's kind of frustrating sometimes. There shouldn't be any sort of break and it just builds confidence that this is a war, horrible things happen, things go wrong. So from one, I think the AP was extremely irresponsible by saying it was a Russian missile when that was clearly undeterminative. And I think they have a responsibility to be a lot more cautious in their reporting. Two, I think all the hot takes that people were like, oh, well, let's invoke Article 5 and all this sort of nature. To me, from the beginning, it was clearly not an intentional attack on Poland, and this would not invoke Article 5. And it's something that is just not unexpected when you have been that close to the border of the Ukraine-Russian war. So that also really annoyed me in listening to the coverage. Yeah. And I think it's just kind of the nature of the beast, the 24-7 media cycle that they have to fill in this airtime. This report came out from the AP. It's quoting a senior US intelligence official, which I haven't seen explanation around that, and just where things got kind of messed up in the reporting of it. So yeah, then you get every talking head, an expert on TV, on Twitter, everybody with their hot takes. On Twitter, that's not surprising. And that people are like, well, we're three, because people have been saying those things on Twitter the whole war. But I think it was the discussion in the media. And you're right, it's not that unexpected. But I just was like, there's one answer to this. It's not intentional, and thus there's no Article 5. Yeah, you're always going to have that fog of war and some uncertainty, for sure. But I think in a stepping back, the larger issue was that this represented the single largest attack, I think, since the beginning of the war, and there was really questions on, and some surprise from Western analysts that Russia still has the supply and capability to have such a large strike, because this was 100 cruise missiles. There has been speculation, and obviously there's stuff that's classified, and there's limited intelligence on it. Ukraine's defense minister has been quoted previously that Russia has used up 70% of their pre-war supply of cruise missiles, and estimates there's roughly 600 left, in which case there was a pretty large percentage used on this attack. That's not correct. Or maybe it's not correct. Yeah, so I think that's the speculation that's going on, that maybe they have a much greater supply, which raises the issue of they've been specifically targeting electrical infrastructure in the lead up to the winter. This really, as we've talked about before, replicates Russian strategy that they've deployed both in Chechnya and in Syria. It represents soft targets that they can hit to demoralize civilian populations so that they force their leaders to give up on the war effort. I mean, isn't that just a basic war tactic? Not to this level. I mean, it's not just electrical infrastructure, which is maybe one thing you could argue. But no, normally it's targeting places of military importance. This doesn't necessarily affect the Ukrainian ability to wage the war. I'm not so sure. When we look at war historical, there's war like we would like to fight it where it just focuses on military installations. But wars we've had in the past often is about demoralizing. We don't fight wars like we did in World War II anymore. Allies have been criticized heavily for the civilian infrastructure that they targeted in Germany. We don't. But is it a surprise that people who are not... Oh, it actually does. No, it's not a surprise. But it is looked down upon. I mean, it is not considered... I'm not saying not to look down on it, but this is a common war tactic. This is what Germany... It's what people do in war is try to demoralize the population. Yeah, yeah. I don't think this comes as a surprise. I think it is the challenge then of coping with this. Obviously, from a morale perspective, your campaigns rarely work in that perspective. And Ukraine and morale is still extremely high. But that being said, it's going to be a long winter. We're just at the beginning of it. They're dealing with it. Vox had an excellent article really going into the details of what infrastructure had been targeted specifically and how the Ukrainians are dealing with it. Because it's targeting not the power plants specifically, which I thought was interesting, but rather some of the substations, some more of the distribution systems, because those are far more decentralized. So you're unlikely to have like air defense support as opposed to a power plant where you could have those batteries in place. There's a lot more of them. And you cut those nodes off. Obviously, you knock out a big section of the grid. So they've been targeting those. For instance, like in Kiev, they're on rolling blackouts. So the way they deal with it, they'll have certain areas of the city where you have four hours of electricity. People have to get this stuff done, then four hours off. So they're coping with it. But the question then goes back to, wow, if Russia still has quite a bit of inventory of these, they've been successful in getting these repairs. The Vox article talks about like, to replace a single transformer, you have a lead time of 12 months. So you knock out enough of those. Do they just not have the transformers? I mean, why? Because I'm coming from someone who, you know, my dad, this is the kind of level of electrical repairs. He works for an electric company. And so I know something a little bit about substations going out and needing to replace transformers. And usually that's done within hours, not months. Yeah. If you have like the spare equipment on hand. Yeah, you're only going to have so much on hand because the number of these are private companies and private companies, you know, if they're kind of under the pressure of the market, they're going to have like so much available. But the other thing is a lot of this is old Soviet era equipment. Because I was like, then why can't we just give them some? Right. Yeah. So it's the compatibility issue. So what they're doing is going around some Eastern European countries where they have kind of these spare parts and things and then trying to scrounge those up. But they'll reach a certain point where even that isn't necessarily available. So it really is a question of, you know, how much Russian, you know, how quickly can we get in air defense systems to help support, you know, and protect some of these areas? Because I think overall the air defense worked well. So Ukraine was reporting they shot down about 75% of those 100 cruise missiles. The new US systems that have come in have 100% success rate. So it's, you know, it works, but it's just the coverage that you need to have. And then it's a question of how many of these cruise missiles and what we talked about last time, the Iranian drones, which apparently Iran's also Washington posters reporting has secured a deal to manufacturer these drones in Russia. So they have a whole kind of supply chain system like an agreement set up with Russia at this point. So yeah, it's just it's a lot to deal with. They're basically dealing with it right now by rolling blackouts. The heating issues is that, you know, a lot of people are living in bombed out houses. So obviously it doesn't matter what you're doing to heat those areas. In the case of Kherson was so so much of that infrastructure is destroyed actually evacuating a good portion of the civilian population leading up to the winter. And they're encouraging Ukrainians that have left the country to stay out just to keep a lower demand on the energy system. That is, they came back. Yeah. So it makes sense. So they're finding ways to cope with it. But it's, yeah, it's going to be a struggle for sure. All right. So the next part of this is the Nord Stream sabotage. And this is definitely your area. So I thought you would take us into that. Yeah. This will be really quick. If you're called Nord Stream one and two had explosions at four separate locations back on September 26. I think this was a big like energy who done it sort of mystery where you had a number of potential parties that at least in conspiracies that maybe had objectives rush. Obviously the number one suspect in this, but the U.S., the UK were kind of thrown in as having potential motivations as well. So the four spots in this subsea pipeline, which again runs between Russia and Germany, but passes through international waters and then individual countries waters. These spot where these four explosions occurred were areas that Denmark and Sweden claim. So they're conducting kind of joint investigations. And Sweden came out this last week and announced that the traces of explosives were indeed found on the pipeline. And it definitely seems like it's the result of sabotage. But that's the level of the analysis at this point is that it's rolled out an accident, which I think was a very low chance just based on comments from gas pipeline experts. So this part isn't a surprise. It'll then be looking at the details and the origins of this explosive will narrow down where that came from. In terms of the energy landscape, this has already been baked in and Nord Stream is effectively dead at this stage anyway because of relations with Russia. But yeah, it'll be interesting to see what they conclude in the coming months. Yeah, yeah, definitely. Well, something that has received less media coverage, but is extremely important to international politics is the recent elections in Israel and how the far right who up to a year ago hardly win any seats in the Knesset are now likely to be part of a ruling coalition. So do you want to start us off at all on this story too? Yeah. The last election it represents the fifth national election that Israel's had in the last four years and they held the election on November 1st. And really, it just represents the fact that it's a parliamentary system. You have to have a governing majority. So it requires a coalition often between multiple parties in order to get the majority within the Knesset, which is 61 seats. And the last four of these elections have been focused around Benjamin Netanyahu, who was actually the longest serving prime minister in Israel at 12 years, and just the deep polarization around him, which we've seen in a number of democracies in the United States and Brazil, kind of the focus on a single individual and almost cult of personality and then the controversy that kind of focuses around that person. So the last governing coalition was formed after allies of Netanyahu basically had gotten fed up with them and formed their own coalition. So this consisted of individual Yer Lapid, who's the leader of Yeshtiid, and then Naftali Bennett, who was actually a former ally of Netanyahu. They tried to form, they government was a loose coalition. And unfortunately, with these sort of coalitions that featured different parts of the political spectrum, it can be hard to hold together. So as soon as you have one part falls apart, doesn't come in with a vote, you'll see the whole coalition fall apart. So that's really what led to the- And that coalition was really unusual being that it was from certainly the left of left party and the right party, who was themselves pretty far right. Being what is coming to power, but certainly not centrist. And they had had a deal of shared leadership. So one of them would be the head in power for a year or two, and then the other one would get to be in power for a year or two. I mean, it was kind of a weird setup. Yeah. So probably not too surprising that it didn't. It wasn't stable and didn't last very long. So we had the election on November 1st, essentially Netanyahu's Likud party won the highest number of seats within the Knesset at 32 and are currently trying to form a governing coalition. And everybody speculates, because again, this is what he promised in the campaign, is he's going to form this coalition with the far right coalition called the religious Zionism, which is made up of a series of parties that as we'll talk about before, very far right, very Jewish supremacist, religious fundamentalist, very surprised that they were brought in before they were very much isolated within the Israeli government, within the Neset. And now it looks like they're going to be part of this governing. This is also because the center party will no longer work with Netanyahu based on their last coalitions together. Yeah. So exactly. There are a number of people both abroad, for instance, the economists had kind of a big piece calling that in the name of patriotism, out of the name of isolating and keeping the religious Zionism coalition out of the governing party, that they should swallow their pride even though they hate Netanyahu, that Yesh Hathid and or the National Unity Party, which have 24 seats and 12 seats respectively, just go in, even though we know that that will also result in unstable government, but we'll keep the more radical elements away from making potentially very damaging policy within Israel. That seems unlikely. Also not clear that that would solve the problems. Yeah, it seems like we just want to legitimize somebody's actions that way if they're not going to take, they're not going to be in centrist in their actual policies. I mean, I just understand both sides there. Yeah. And it still wasn't clear that Netanyahu wouldn't bring in these far-right parties too, since he did promise that. Yeah, and he has dual motivations that will kind of get into things pulling him in either direction. In general, I think the one area where people are hopeful is that Netanyahu has been controversial. He definitely campaigns as a populist, but in terms of how he's governed, it has been more on the pragmatic side. But he's under investigation. He is, yeah. He's currently under event, and that's what creates the incentive to actually form this coalition with the far-right, because they are very much aligned with reducing the power of the Israeli court system, because they have certain goals that they want vis-a-vis the West Bank in terms of the settlements. And then obviously Netanyahu has a lot of motivation to see every charge against him thrown out. So that's kind of his motivation for making this alignment with the far-right, because they both have a lot to gain from going to more illiberal means, concentrating power in the parliament and trying to subvert the judicial system. Exactly. So a little background on religious Zionism. So it's led by two individuals. It's Itamar Ben-Gvir and Bezalel Smotrich. Again, the pronunciations, forgive me, they're horrible. A little bit on them. So Ben-Gvir, he's actually the leader of Jewish power. Jewish power is kind of interesting because it was previously known as a Koch, and it was actually deemed in 1994 to be a terrorist organization by the Israeli government and by the United States. The Daily, so the New York Times podcast actually had a really good backgrounder on him, so I definitely encourage everybody to listen to that if they want to learn more. But yeah, this group was out there. They were committing essentially terrorist actions. They frequently were in the streets, chaining death to Arabs. Apparently they've changed that just to death to terrorists, but you kind of know their general sentiment. Well, I thought one of the interesting things was on election day, he made the announcement, it's time for the Jewish population to become landlords. So it's not just death to terrorists, he just has rewarded it in other ways. And so this idea that they're landlords and they can kick the Arabs out if they want to is something that is very becoming mainstream as part of their party platform. Yeah, so he's very much focused on the West Bank settlements, so the illegal settlements set up mostly by kind of ultra orthodox Jews who believe that all of Israel belongs to the Jewish people. So he's seeking to, and both these individuals, kind of both, Ben-Gvir and Smotrich are seeking very high level positions, given that they're bringing 14 seats to the coalition. So Ben-Gvir wants to be named the Minister of Public Safety, which essentially would put him in charge of the police and has, again, openly called for attacks against Palestinians and actually advocated for a loyalty test for Israeli citizens of Arab descent, which represents about 20% of the population or face expulsion from the country. So just really radical, radical things. Because when I read that first, I was like, oh, is this around Palestinians living in these disputed lands? But no, these is Israeli citizens. No, so I have two comments about that. On one, I also just want to mention, the concerning thing about him wanting to be head of the police is on his wall, he has a portrait of an extremist who gunned down 20 Palestinians who are worshiping at a Muslim mosque. And when the reporter asked him, what does this portrait say to his family, to his son? And he was like, I tell my son that he was a hero. And so for this man to be head of the police is obviously deeply concerning. That's an understatement. Oh, yeah. Yeah. I mean, the equivalent would be having a picture of somebody like Dylan Roof, who famously shot up the Black Church in South Carolina. It was just a mass murderer or the New Zealand shooter who went into a mosque in New Zealand and shot them and holding them up as heroes. And then in charge of your police, your national police. So that's, it's really disturbing. The other thing though I want to talk about is briefly is that, you know, we hear a lot about the West Bank and the Palestinian conflict. But one thing I was struck by when I was in the Netherlands, I did a master's at the University of Amsterdam, and so in this program was in English. And so you had had a lot of international students. And in one of my classes, this is where I learned a lot about just the tension between the Jewish citizens and the Muslim citizens was you had these two girls who actually were really good friends, but talked about how a lot in that class about how in the country is very politicized and how normally they would be on opposite sides. And that here these people were legitimate citizens of Israel, but certainly treated a second class citizens and enormous amount of tension between the two sides. And that had been something I didn't even realize and kind of seen that play out and have them talk about it, their experiences were really moving that I remember it, you know, so many years later. Yeah, for sure. So it's, I mean, just between these two, it's really seen as throwing a powder keg on the whole situation. I mean, obviously it's always been a restive kind of situation, but I think it's this conflict between Israeli citizens. So you know, it's one thing with kind of Israel and Palestine, but now they're creating these divisions within themselves, within, you know, people that have the full rights of Israeli citizens. And there's always been that accusation of, you know, Arabs are treated as second class citizens and that seems very true, but it seems like it's just getting worse kind of with this. So we talked about Ben-Gvir and then kind of wrapping up on Smotrich. So he's seeking to be defense minister and apparently this is what's causing issues in terms of the coalition formation because he was actually offered a different position within the cabinet and he refused that. So he's very focused on the defense minister. But here there's been very strong opposition both from Israeli security agencies and from the U.S. as well, because I think his big policy would be around, one, the West Bank, so allowing kind of expansion of settlements there, maybe even annexation of additional territory. And then two potential changes in the policy in East Jerusalem, particularly around the Temple Mount and kind of where prayers are allowed, I think Orthodox Jews want to pray next to very sacred mosque site for the Muslim population. That's always been kind of the condition for the peace within Jerusalem. So rolling that back could create conditions that kind of spiral out of control. And I think that leads a good end in terms of the consequences, the potential consequences of the election if Netanyahu ends up forming this coalition with the right. How does that impact U.S. policy and the general dynamics within the region? I think there's also a concern with Netanyahu in generally is not provoking a war with Iran, which to some extent I feel like is the most likely war next war that we could be involved in, not that I claim any good predictor of conflict, but that I don't see any other way, not Netanyahu is always more aggressive on this. But if you have a defense minister who's not focused on Iran, but certainly does not seem like a person that would show any restraint or seeks to work cooperatively with the United States. Yeah. So it's then I think there's a real fear of, we talked about before that the Palestinian issue has become less important in the Arab capitals. And that's what's really allowed things like the Abraham Accords, which really, you know, chair Kushner like claim credit for, but it's really Netanyahu's project. That's his baby. This is what he negotiated. So that's where he's, you know, he has the one incentive on, hey, I want to stay out of jail. So I get these far right guys in the coalition. We can get rid of that issue. But at the same time, if part of that agreement is to allow for expansion of the West Bank or make changes in East Jerusalem, that could create a condition where Arab capitals can't ignore even their own populations. I mean, those are mostly autocrats. They don't necessarily have to listen to popular support, but that could create a lot of rage. You know, you see a lot of Palestinians suffering, you know, because of these, these changes in decision and Abraham Accords, we talked about potentially expanding to Saudi Arabia. That's out the door. The whole thing could fall apart. And that's not in the United States interest either, you know, in terms of containing Iran. So I think that's where it kind of plays in and we're not Netanyahu's getting pulled in multiple directions. But obviously I would think staying out of jail is probably the biggest because unlike us, Israel has a history of locking up and convicting previous presidents and prime ministers. And they kind of pride themselves and the strength of the democracy that nobody's above the law. But again, it's definitely one of those common dynamic that we see in Brazil, we see in the United States, we see in the UK where democracy is kind of under these extreme pressures and kind of how they deal with them. So I think this is again, another real interesting case. Yeah. And definitely something to keep an eye on and try to learn more about because, you know, Israel does occupy this crucial role in US interests, but they don't always do what we want them to, which is like kind of fair. The countries don't just do what we want them to. But we provide so much of Israel with critical defense and technology and military weapons and then just straight off aid that it gets kind of complicated when they basically do things to really upset the region. And I feel like so much of US policy is like just about containing Iran. And so anything that kind of upsets like the Abraham Accords or creates a lot of instability is something that the US really fears. Yeah. So I'm sure we're sending Netanyahu pretty clear signals on what our preferences are. But yeah, getting the more moderate potential members of the coalition to kind of swallow their grudges and support somebody that honestly they think should be in jail. Wow. That's asking a lot. So I guess we'll just see how it goes. Yeah. So the head of original deadline was supposed to be this week to form the governing coalition. So the new deadline is this Wednesday, November 23rd. Okay. So by our next podcast, I think we'll have an idea of how things are shaping up. Yeah. Maybe update on that. Okay. So on to our final topic, which is my interview with Sarah Bauerle-Danzman. And first we'll have you listen to the interview and then we will wrap up with some thoughts. Welcome to Kellogg's Global Politics, a podcast on current events in US foreign policy and international affairs. My name is Dr. Anita Kellogg and I'm here with Dr. Bauerle-Danzman, who is an associate professor of international studies at Indiana University Bloomington, a faculty director of the Tobias Center for Innovation and International Development and a non-resident senior fellow at the Atlantic Council. So Sarah, welcome to the show. Thank you so much for having me. I'm so excited to have the opportunity to talk to you and to spend you. So, but I thought we'd get straight to it and begin with the CHIPS Act. So there's obviously been a lot of development in the recent months on semiconductors, specifically with respect to China. This bill has several provisions, but in one of it part, it gives over $50 billion in subsidies to companies who will build their production plants for semiconductors in the United States. But it also contains a stipulation that those companies cannot build similar ships in China, if I have that right. So do you think that this creates the right incentive structure to get businesses to build their production plants in the US? Well, I think that, of course, the first thing that we have to do when we think through this is what is the goal, what is the policy goal of the legislation? And I think that one thing to keep in mind about all of this legislation that is built as China legislation is actually doing a lot of different things all at once, partially in order to build coalitions that are necessary to pass these kinds of deals with broad bipartisan support. And with respect to chips, there's a group that is interested in this issue and interested in passing chips largely as from a China hawk perspective. But there's also a sizable group of political leaders who are interested in doing something on reshoring semiconductor technology, not only for national security purposes, but also for broader industrial policy. Union side of the Democratic Party is very interested in this kind of legislation as well for providing new opportunities for workers and for union-based jobs. And so I think we need to be kind of be thoughtful about how there's not just one policy objective, this legislation. The other thing is that within the foreign policy, if we set aside the kind of industrial policy or like the kind of labor policy side of this and only focus on the foreign policy concerns that this bill is seeking to address, one of the concerns is indigenous technology development in China. And so of course, the government is not going to want to be in a position where they're subsidizing investments in the US, but then the firms that are taking advantage of those subsidies are then shifting profits towards building capacity in China. And that's where a lot of the clawbacks come from. But another component of it as well is to broaden our supply chains beyond Taiwan. And I think that that has been under covered in the analysis. And I think that there are some reasons why no one wants to say the quiet part out loud, which is there is a concern about the extent to which advanced semiconductor technology and in particular fabrication of these chips is concentrated in Taiwan. And with the current state of affairs across the strait, there's concerns about not wanting to be overly reliant on Taiwan. And so of course, you don't want to say that out loud because you also want the deterrent effect of the fact that China is also dependent on that technology and any kind of attack would also, you couldn't really attack Taiwan and invade without also destroying semiconductor capabilities in Taiwan at the same time. And so we kind of given that the issue with the clawbacks really comes down to will come companies decide that the subsidies are worth it such that they will choose the US subsidies over expansion into the China market on these advanced technologies. An important thing to remember is that the clawbacks don't say that you can't do any business in China, but that you can only do trailing edge manufacturing and fabrication of semiconductors in China and still get these subsidies. And so the expectation is that you're not going to be developing advanced chip technology in China. And I think what we're seeing so far is that this seems to be working. This seems to be a bet that semiconductor firms want to make. I think that that's probably for a combination of reasons. The recent export controls, which I know you want to talk about a little bit later, certainly play into that, right? Because in some regards that forces the issue for these firms anyway. But also I think that there are growing concerns about the business environment in China to begin with. And also a lot of the major players in this space, they are not necessarily doing the most advanced work in China to begin with. So China continues to have problems in terms of at least non-Chinese companies doing this kind of semiconductor fabrication in China. They are definitely facing a lot of headwinds and also a lot of uncertainty about what the policy environment is going to look like going forward. And so one of the things that the US government as well as governments in all of the techno democracies need to really think about is how to make sure that as they're moving with these new policy interventions that they're not creating so much uncertainty for firms that the firms decide that they need to sit out and wait for the dust to settle before they start making actual investments. Yeah. I think the uncertainty is definitely an important part because companies definitely, that's one thing that they hate is uncertainty. Do you find that all this applies as much to multinationals like Samsung? I mean, I know in some ways South Korea has much closer integration with China than we do. And is there a kind of a competitive market for subsidies? Like other countries also willing to give subsidies to have these companies build these fabs in their own country? Yes. So it is the case that semiconductors are highly, highly subsidized everywhere that they are fabricated. And in fact, when we think about the decline in semiconductor fabrication in the US over time, a lot of that was happening within the context of countries like South Korea, Japan, Taiwan, all subsidizing semiconductor fabrication to a high degree. And so we definitely see that these companies can get subsidies from many different countries. And we also know that the EU has its own version of a CHIPS Act as well. So the EU is also getting into this subsidy game from a US government perspective. They probably don't really mind that this is stimulating an interest in subsidizing these chips as long as it's generating an interest among partners and allies to be doing some of this subsidizing in certain respects. I think from a US government perspective that there's been an underinvestment in what is needed in order to diversify the supply chain. The US doesn't want to shoulder that burden of subsidizing alone, make sure that there's more diversity of supply and that can be more resilient to shocks to the supply chain, whether that be from natural causes or from geopolitical causes. Yeah, no, and I think that's completely important. First, I want to talk about outbound investment. So CIFI is what you referred to before, deals with basically if a foreign company wants to put money into a US company or buy a US company and there are any national security implications, then there is a board that reviews that and can block those investments. Now the discussion is whether we should monitor US companies investing in China and the possibility of the information transfer in that way. You're actually one of the leaders in thinking about how we would design such a regime. What do you think about the feasibility of doing this? Well, first, I just want to say that it's pretty remarkable that the conversation around outbound investment screening has moved so far, so fast. I think it's really important to reflect on that because when things are changing with such great speed, I do think that we need to be careful to not overreach and to make sure that we have processes that are really designed to encourage as many stakeholders to contribute to the discussion rather than create a process in which those that maybe have an alternative view are quashed. Outbound is a really tricky piece. The first question is what is the goal of an outbound screen? People may have different goals associated with it. For instance, the draft bill that's sometimes referred to as the Casey Cornyn bill that is also the NCCDA, which stands for the National Critical Capabilities Defense Act. This was at one point, seems like it might get attached to the omnibus bill that was the Chips and Science Act, but that was stripped out. The whole trade title was actually stripped out. That's a version of outbound investment screening that is oriented around critical capabilities and critical supply chains. That's a pretty broad concept that goes beyond national security review. The issue there is that too broad of a concept. Can you really use outbound investment screening to deal with offshoring of supply chains that maybe you want more access to, given the fact that the main reason for most of that offshoring is for commercial purposes? Just telling a company that they can't go abroad doesn't fix the underlying reason of why they want to offshore to begin with. The flip side is that those who have base of support among labor unions, they like that kind of framework because for them, it solves the problem of offshoring. That is a real concern of labor unions. That's one of the reasons why it has stuck around. One of the reasons why Casey and Cornyn are on this bill together. That's an instantiation of the strange bedfellows that I talked about before, the labor group with the China hawk group. In other ways that we could imagine, outbound screening could be much more focused on trying to prevent countries of concern, which right now would be mostly China, from gaining indigenous technology capabilities over a subset of especially important critical technology that has national security implications. In the work that I've been doing with Emily Kilkreese at CNIS and others, that's where we've really focused our attention because we think that that's probably the area around outbound that has the clearest national security framework where the issue goes beyond just kind of commercial decisions to also thinking about broader national security concerns. There, even in that context, it's very hard to do because first you have to determine what are the advanced or critical technologies that you care the most about. You're not going to be able to boil the ocean. In that context, what are the technologies that you're really going to focus on because you can't choose them all? How do you bring and allied and partners businesses along with you? Because most of the way that these processes work well is through voluntary compliance. Even just things like, in the context of a CFIUS review, the way that you determine that there's a national security vulnerability in the target company is that you get that target company, which is a US business in the CFIUS case, a lot of information from that company that's privileged and confidential that they share with the US government so the US government can determine is there a vulnerability here that's relevant to national security. It's unclear to me in the context of outbound screening how you would get high quality data like that because in order to make a determination, you would also need a high quality information about the Chinese target. Even if the Chinese company would be willing to provide that level of detailed confidential information to the US government for them to complete their review, I don't imagine a scenario in which the PRC is going to allow that company to provide that information. The issue really becomes how do you do a robust fact-based review in the context of having to deal with a country where you have limited access to real information? Those are some challenges that have to really be thought through. Yeah. I know we're running low on time, but I have a couple of questions about that. One of them is, do you feel like a nearest target that focuses on China is better than the CFIUS, which looks at all countries and a national security? Do you also think though that there's a danger in what you talked about before, more critical supply chains if they did that instead of national security or even with national security because that definition keeps broadening if there's a danger in having too broad of restrictions and of course, hurting US competitiveness that way? Of course, there's a danger and the issue becomes how do you balance the national security concerns that are associated with technology and know how leaking? The other issue is, what is it that you're trying to stop? We have export controls to stop the transfer of technology. We have bigger arsenal of export controls around semiconductors now than we did back in September. If we're going to do outbound screening, it has to be that it's more about the technology. In my mind, the area that is the hardest nut to crack is the venture capital because the issue here is there are over 40,000 semiconductor startups in China. They are all looking for money. Of course, China has a lot of money that it can raise internally or from places other than the US. The US and US venture capital provides not just money, not just the technology which in many cases can't go to China to begin with, but provides a sense of legitimacy of the company, provides networks that are like, if you think about what a venture capital firm does to a startup when they invest, of course, the actual investment is a part of what they provide to the firm. They're also providing guidance about how to scale up. They are bringing their friends into the deal. They are providing access to a much more vast network than that company had access to before. It's a stamp of approval that's really valuable. Additionally, in a crowded environment like China with 40,000 semiconductor startups, providing money from a Sequoia or from an Andreessen, it's going to give you such a plug up on your competitors because it's a signal in the market that the people who know what they're doing have done their homework and they're picking this company. We also know that when USVCs invest in semiconductor startups in China, the Chinese government oftentimes then goes in and invests in those companies as well. That's the biggest thing that is a potential concern because it's really hard to figure out what you do about that. The question is, how do you do that in a way where you're not unnecessarily stifling the innovation ecosystem in the US itself? If in certain areas where China actually has technology prowess compared to the US, such as in AI technology, if you are not allowing US companies to participate in those investments, how are they going to learn what's out there? Actually, the technology transfer can go both ways. That is really something that the balance has to get right. The problem from the US government side is that they have to be right all the time on the national security issues. Their risk profile is just very conservative around these issues. I think they're probably going to do some stuff that stifles innovation in some ways. I think that's one of the reasons why they're trying to compensate on the other side with subsidies for research and development because they're trying to compensate the companies for the harder regulatory environment. I agree. I think all those are really interesting points. One of the reasons why you might be more free market is in not having to be... There's not one entity that has to be right all the time. That can be the danger of industrial policy. When we alluded to before, but when we talk about the... There is now very recently a ban on exporting semiconductor high-level semiconductor chips to China. Not just chips themselves, but anything that uses American technology, American machinery, which we do have a very dominant position in, but even people working in those plants. My understanding is that most even international companies use one part or more parts of these. You had a unilateral policy made by the United States that heavily affects business operations in companies from other that are based in other countries. This has particularly hit... I know there's a company in the Netherlands, and I know Japan is also protesting this. To really be effective on the national security component with China, it seems like we really need more close cooperation with our allies. Even though that might involve compromising on the degree, the highest level of provisions we want to implement. Do you think that there is a danger in turning off our allies because we are making these unilateral policies? Do you think it's going to be harder to enforce it with so many countries protesting? Think about South Korea also. How do you feel about the way that we've gone about these things? Sure. Just a couple of things on the export controls that came out on October 7th. First of all, I wouldn't characterize these as a ban. I would characterize these as additional export controls because the way that export controls work is some things require a license and some things are denied. There is a presumption of denial license, or presumption of denial, but there is a process through getting a license exception. These export controls designed to limit both the development and production in China of advanced node semiconductors, also semiconductor production equipment, advanced computing items, and supercomputers. These are all, like this is not all chips. It's the most advanced and the technology, the supporting technology that you need in order to make those advanced chips. In addition to that, there are new controls on US persons, which you alluded to, as well as exports of what are called unlisted items for specific uses. The idea is that if you are exporting some sort of item that is going to be used to help in the production of a controlled item in China, even if that item that you would be exporting isn't controlled, if it would be used in the development of a controlled item, that's not allowed, as well as there's a foreign direct product role also included in this, which is how you were talking about how any US technology, if a foreign made good has any US technology in it after a certain threshold, it also is not allowed to be re-exported to China. That's the overview at a high level of what these controls are due. The other thing that I would say is that they're very complicated. One of the reasons why they're very complicated is because the US government is really trying to thread this needle where they're not trying to ban all semiconductor tech production in China. They want China to be able to continue to produce trailing edge technology. It's just that they don't want to be contributing to Chinese, indigenous, technological development of leading edge. I'm not saying that to say, and therefore, everything is wonderful. I think that especially in the context of, I think at some point we'll talk a little bit about US-China relations. I think that dialogue here is really important. Part of dialogue and part of trying to reduce tensions is a part of trying to reduce tensions is about separating out what's the intention behind what the policy is so that there's not a misunderstanding of what each is doing to each other. In that context, I think your question was about, do we have to worry about how this was handled and whether this creates problems with our partners and allies? We know that everything that we're talking about from providing resiliency and supply chains to controlling sensitive technology to concerns around investment flows that have national security implications, all of that requires extensive multilateral engagement and coordination. The atruism of export controls is that, unless a country has a complete and long-standing dominance over one technology, if they have a complete monopoly, that's the only time when a unilateral control is going to work. These controls are not going to achieve their stated policy objectives if they remain unilateral controls. There will be even the US technology will become less central over time in the supply chain of semiconductors because companies from other places will find new solutions in order to avoid US technology. We already see some evidence that there may be some of that happening. That being said, it's hard for me as someone who is outside of government, also having the experience of being in government before. It's hard for me to know just how much the US has been engaging with its allies and partners around this and how much it hasn't. These are very sensitive topics. Sometimes I think that the US government has to go first because the other governments want to do what the US government is asking them to do, but they face a lot of pressures domestically that make that hard. They want the US to be the first mover and they want the US to put pressure on them to bring them along. Sometimes the US does things that other governments really don't want them to do. I don't know. What I do know is that extensive dialogue and engagement for a like the US and EU trade and technology council is going to be incredibly important here. I also know that we have to find ways to broaden those dialogues, not just with the EU, but also with the UK and with Japan and South Korea and Taiwan and also Israel. Today, I saw that the US and Israel had an additional engagement over these kinds of issues earlier this week. All of this needs to be happening because from a US policy perspective, despite how much we talk about this concept of weaponized interdependence, the US does not have such a hierarchical position in the network around the semiconductor supply chain that it could hold this position of dominance for several years. China is behind the US on this technology by at least 20 years, but other countries are not. The network is dynamic. If the US gets too ahead of everyone else on how much it's willing to ban things, other countries will not go along and there will be dynamism and change in the network structure. Yeah, I think one of the things that surprised me is how little warning or no warning other countries had about this. That's one of the big problems also because of its complicated what qualifies for this direct product rule. That's brought a lot of production to a standstill, obviously, hurting these multinational companies. It does seem to me at least problematic about how we went about this particular. I'll say three things on this point. One is that I think that this idea that it was a total surprise is a little bit overblown because every export compliance lawyer that I've talked to said that everyone knew that something was going to happen over the summer because all these companies started getting what are called is informed letters from the Commerce Department from BIS, which is the part of commerce that oversees the commerce control list, which is the dual use technology export control list. Everyone knew that there were going to be new rules around this. What they were not anticipating what the US person's role would be like. What ended up happening is that all of the major companies that were affected by this got a one-year license. They all have a reprieve until next year at this time. I think that what was clear is that the US government did not consult enough with businesses to know how constraining that rule would be for them. If the companies knew that this was going to happen, including companies like Samsung, there's no way that their own home governments didn't know. I think that there was discussion. I think that there are lots of reasons why there are incentives for people to say, oh, we didn't know that this was coming, but I don't think that that's an accurate reflection of what was going on behind the scenes. The other thing that I want to say is that in terms of what I'm looking for to see how much is the US government actually going to listen to both business and other countries, there are a few things that I'm going to be looking at. One is that they have this concept of the unverified list, and they're going to release an update on the unverified list on the 6th of next month. I'm going to be looking at that to see how long that list is. The issue there is there's now a faster process through which the US government can basically say, we don't trust these companies. Therefore, any company on this unverified list, we're going to deny licenses where these companies are the end users. If that gets to be a really big list, that would be something of potential concern, especially if it's not clear why those companies ended up on the list. The other major issue is the US government issued these export controls as an interim final rule rather than as a draft rule. They did this because they said that they wanted to avoid stockpiling, because normally when you have a new export control, the way it works is the BIS issues a draft rule, and then there's the comment period, and then there's a final rule, and there's a period of time in which before the rule goes into effect. For this, they didn't want the Chinese companies to just stockpile all of the items that were going to be controlled, so they issued it right away. As they issued as an interim final rule, they are having a comment period. Those comments have to come in by the 12th of next month. There are seven comments currently listed, although the BIS has not made those public yet. What will be interesting to see is who comments, what do they comment on, and to what extent does the US government take into consideration those comments and update the rules. That'll be, I think, where we will really see the extent to which there may be some additional flexibility on the part of the US government to really attempt to bring more actors into this coalition. We can think of that coalition as being allies and partners, but we can also think of that coalition as being companies that actually want to make this rule work. We will see. Yeah, no, that's really interesting. Again, we alluded to it, but right before you go, I know this might be too short, but all these have been really targeting China. Do you think that that's a good use, that this is appropriate? Do you worry that there's ever a danger of going too far in these targeted provisions at China? It seems, just for an example, more and more things are becoming national security. I work at a military higher education institute, they do master's degrees and things like that. Basically reading military documents, what is national security can now even just focus on economic competitiveness. Are those squishy definitions? Again, are we going too far with it? Is there a possibility of that? Yeah, of course, there's always a possibility of going too far. I think that we have to think about how to manage this relationship. Unfortunately, I don't want to be alarmist about things, but I think that we also have to look to examples from the Cold War era of what worked and what didn't in terms of dialogue and engagement with a country that we have a really challenging relationship with. The thing that's much more complicated about the US and China relationship is that we have so many economic ties that the US and the Soviet Union did not have. That can be an opportunity because it will be much harder to completely decouple. That means that there will be more existing ties to draw from. I think that fundamentally a lot of these issues that the US and other countries are dealing with when it comes to investment and the security of semiconductor supply chains and so forth stem from the fact that in China, it's really hard to understand. They just have a different framework in terms of the relationship between the state, which is really the party, and firms. There isn't the clean distinction between private firms and public actors the way that there is in other places. We don't have international institutions that facilitate economic exchange that can really deal with that reality. Companies are left to try to figure this out outside of the international institutional frameworks that were developed at the end of World War II. I think that it's important to keep that in mind and keep in mind that there are real concerns that the US and its partners and allies in Europe and elsewhere are responding to. I think that in the end, what we need to do is we cannot disengage. There has to be always dialogue. That dialogue will take different forms. I was very heartened to see Biden and Xi's bilateral at Bali. I was also really heartened to see the communication that came out of the G20 meetings that was critical of Russia. I think that those are indications that there is an understanding that we don't want to continue on this trajectory of more and more escalation. I'll also say that I think that track two dialogues are really important here, person to person and academic engagement. This is why I was alluding to the idea of separating out the intention and effect of policies because I think that sometimes there's such a knee-jerk reaction to overclaim what the US is trying to do. I think it's important for the US to face substantial criticism about its policies. I do think making it clear, first of all, the limits of US power over these issues is important because it helps the US have some gravity to its policy proposals. In addition, it's important to also tamp down these arguments that the US is maximally trying to exert pressure to completely change the Chinese economy and Chinese society because I don't think that that is accurate either. I don't think that that's helpful to the relationship between these countries and the people that live in these countries. Thank you so much. I just always learn a lot from you. I follow you on Twitter. So, for as long as Twitter is around, I really encourage everybody to follow you. You're handled. Do you want to just tell people what you're doing? I think it's at Sarah Bauerle, B-A-U-E-R-L-E. Sarah has an H. I think that's right. Yes, that's right. Yeah. I've learned a lot from Twitter because of who I follow. I'll be sad in many ways if Twitter goes away. Plus, I agree. Thank you. I'm really looking forward to taking this time. I really, really appreciate it. Yeah. Thank you for asking me. It was fun. Okay. So, did you have any overall thoughts about the interview? I thought overall, yeah, it was great. A lot of interesting details and points raised. I think the thing that stood out to me the most was the discussion around Sisyphus, so the committee on foreign investment in the United States, and then that discussion around will this apply to outbound investment? So investments directly within Chinese firms. And then Sarah mentioned providing the example around venture capital, which really stood out to me. The 40,000 startups that are in the semiconductor space and what exactly would be the regulations around that. And to me, it kind of stood out because, and you guys talked about the goals of the policy. And I get where if one of the goals is just not directly transferring existing technology to China or high-end technology to China, like these semiconductors, that's one thing. But then is an additional goal, which I kind of thing is or has been expressed before by policy makers is holding back technological progress within China, within these critical technology sectors. In which case, should we let venture capital invest in these firms? Because I mean, Sarah made a really good point that these big US venture capital firms like Sequoia are so critical, they are providing the money, the networks, the legitimacy, and basically how to scale something that's maybe exist at a pilot level to something that can be an actual commercial enterprise. And furthermore, that they signal to the market that it's legit and the Communist Party uses this to help screen the process. Why should we be helping out with this? That's what kind of stood out to me. I see that point, but I think it's kind of a slippery slope with venture capital. Like I totally get the argument about not wanting to contribute to development through having access to our intellectual property. I'm a little less comfortable with the idea that we're just trying to suppress their development of an industry within their own confines. If it's considered critical if it has direct military application, I don't think we should be, I mean, intellectual property, what's represented with these individuals within venture capital, that's a huge form of intellectual or human capital property that we're lending out the China to do the process of, well, I mean, kind of, they're using this because they don't have the expertise in the party to choose winners, but we're letting the absolute world experts and picking out startup companies and what's going to become the new technology. It's not like they just follow venture capital and deciding who to invest in. I know, but it's just that really stood out like, why should we let this is a huge advantage of the United States is we have this ecosystem of venture capital and private equity that they would definitely argue. They're like, we're the ones that create the free market. We're the ones that are at the forefront of new technology. This is how all of our big global companies got their start. They usually got government money initially for the initial research and development and formation of the company and maybe early pilots, but then it was the venture capital system, which is unique to the United States that then provided all the things that she mentioned, the money and the networks in order to actually grow the business. Right. So hear me out. Here's a comparing view. But on the other hand, having them one with Western money, then they are sort of their networks are not just tied to the Chinese government, but also a networked into the broader economy. Two, then we know we have a better knowledge of what that they are developing on their own. Because if we just cut off everything, then we don't even know where they are in their technological development. Yeah. Now, I get that. What I like the idea is the fact that she has in kind of the direction that he's taken economy, the fact that he's stepped back from the liberalization that was introduced by Hu Jintao in terms of giving the private sector more power, in terms of giving universities more freedom, in terms of setting their research agenda. He's backing away from that. Can we attract some of these 40,000 startups to actually make the move here? Yeah. I mean, that's... And just be just, yeah, we'll take the best ideas, screen them, and then move them to the United States and becomes our asset. That I would like a lot better than this flows in any way to China. I mean, I think you just exclude that possibility from happening when you say you can't have any. Yeah, I get that. I think that I feel like really needs to be made clear is, yes, I expressed my concerns in the last episode and in other places, that it is concerning that she is stepping back from encouraging more liberalization of private enterprises. But just because he's stepping back does not mean he's created a Chinese economy where the state is in control in any way. And I was reading something the other day for a class, and then also, someone had said this to you, or maybe it was in the reading, that the Chinese state completely controls the economy when they don't. It's not even close to that. That's the way it was stated, yeah. If they did, they would not have seen the economic growth that they have. And along with this hearing someone are reading, someone saying private enterprises are really just state-owned companies in disguise, that there is no genuinely private enterprises, which is also really, really not true. Yeah, it's not true. That being said, I think once a company becomes successful enough, there's a much higher likelihood that, I mean, because the way they control them is they'll have a party representative who sit on the board or within. Not at all these private enterprises. I mean, you're talking about more like the state-owned companies, which you have the party to report to. It's not even beyond the state-owned. You do not have someone on the board from this government of private enterprises. You don't have a monitor with somebody that's there to... No. No....within any private enterprise. So like Alibaba, which I think that's not a state-owned enterprise. I'm sure that has party representatives in it now. Well, it certainly didn't before. Because it's like a gigantic company. I think once it reaches a certain size, I think you basically have party... I think I'd like to see some research on that. That's fair. I'm speculating here. Pure speculation. No, that's not my understanding of the situation at all. Now, so it goes back to sort of what I was talking about with Sean. Now, we both kind of agreed. A lot of this is based on what ifs. So you have these private enterprises operating truly as you do in the market. So they're bored. They're CEO. They're making decisions based on profit. Their supply chains are integrated into the world market. There's not some nationalist supply chain. They are just acting like every other private enterprise. And as we were kind of talking in that conversation too, there's a lot of different actors that have their own agendas, particularly the local actors in China. Like you said, even locally-owned, state-owned enterprises don't act with the same objectives that the nationally-owned state. So you have all these kind of intertwined actors, which really could show that a lot of people, even in the foreign policy level, so much foreign policy is made by local mayors and governors that basically can't contradict what's on from the top, but certainly is independent and sometimes contradicts some of the goals that the top has. And sort of, as I mentioned before in South Korea, when they were trying to get South Korea to not build, allow the Thad missiles system to replace there, how the local government shielded some of the South Korean companies because they were such a big investor of FDI in those areas and they needed those jobs. And they definitely didn't want to risk losing that because their own incentives for economic growth in their provinces and locales. So I think it's more about the what-ifs and it's more like, well, what if the government intervened in specific companies? What if, you know, it's all about these what-ifs. And the danger, I think, is really treating all private enterprise activity as suspicious. Yeah, and I think that's fine. But the problem is that China hasn't given any confidence that there's any separation between the government and private enterprise. That in any case, if it becomes in the interest, the strategic interest of the Chinese government to take technology developed within these firms, that there's no barrier to do that. And I think that's the difference is, I mean, you can use like Apple in the case of the US government. Apple has like this encryption technology in certain cases, like with terrorists or whatnot. Apple is very insistent on not giving the US government these backdoor accesses to it because it would subvert their private sector interest. I mean, they market themselves on being secure and having this secured encryption technology. But if the government had their way, they would be able to use that. Sure. But the judicial system backs them up. And that's what is lacking in China. Right. Right. So what I'm saying is, I'm not saying there's no problems that we shouldn't be concerned about high-level technology transfer. I actually think that is a legitimate concern. But I think it is wrong to treat the economy as if it's a... Yeah, and a blanket assumption. Yeah. But you can see where the fear comes from. Right. But I'm saying most of private enterprise investments and stuff are not like... Going to rise to that level. Yeah. I agree with that. I agree with that. And so we have to be careful in not labeling. And I think so it's important to correct statements like the Chinese state controls the entire economy. Yeah. These are being taken as facts. Well, yeah, that's a little disturbing. No, it is. It's being presented as fact that all private enterprise is essentially a state-owned company. Yeah. That's a restate. Yeah. The more nuanced is that if it's in the interest of the Chinese government, there can be no separation between them. But the fact daily control or that they care or they have the capability, no. It's not a centrally run economy like the Soviet Union. The other thing that I thought was really good though that she said that I don't know why... I mean, we talked about it a little bit, but that it's easy to see these through the prisms of China Hawks, which I mean, it's policy to prevent technology transfer. I mean, it is sort of primarily China Hawks sort of policies, but that you also have the buy-in of all these other actors because you're bringing home, the perception you're bringing home. Yeah. And that kind of explains where we've talked about before is like, well, from a competitive advantage, does that make sense to locate these things in the United States? It should be like in another ally or maybe the cost to out, but you won't get in the labor union side of the coalition to support a bill like this unless you're directly bringing it back to the United States. So I thought, yeah, that was... And why buy-in hasn't gotten rid of the terrorists and sort of the backlash by that end. On the other hand, and I question how much though, like these labor union jobs, it's actually going to create... Well, yeah, and that you will get bipartisan support. I'm sure the Texas senators are happy to... Yeah....Ted Cruz is happy to have a... Right....Semite conductor plant built in Texas. Right. But I mean, I think this labor coalition going along with these policies may not actually be getting... The benefit from it, yeah. Yeah. I mean, so I don't know if... Well, no, for sure. I mean, I... I think it's good, like, oh, we're creating these jobs, even though there may not be the actual jobs you're creating. Well, I mean, I read a study looking back on the steel tariffs that were put in place in 2018 by the Trump administration, which famously targeted not just China, but a lot of our allies, including South Korea and Canada. And there was a look back from the tax foundation, and what did we get in return for that? And obviously downstream because we're such a huge consumer of steel, all these businesses all significant increase in their costs, including energy industry. But in terms of job creation, because the goal was to take steel plant utilization was like at 80%. It was to increase it to like 90%. Well, four years on, utilization rates are still at the same level, and they estimate like 4,000 jobs were maybe saved or created. But the cost per job was just astronomical. So it's just like, what are we doing? It's clearly economically, there's a really poor decision. And even from a union standpoint, jobs kind of kills me somewhat about these policies that are so bad economic policies is that they're not even doing what they're supposed to be doing. Like I would feel differently about it. Okay. So you make decisions that's not great economically, but you are employing a lot of labor. What that makes sense to me, right? If you really were creating a lot of jobs with this, 4,000 jobs does not count as a lot of jobs for something that is damaging economically. And I suspect that's most of the tariffs on China as well. All right. So let's wrap it up there. I think that was an episode. And this brings us to the end of this episode of Kellogg's Global Politics. You can visit our website at www.kelloggsglobalpolitics.com and follow us on Twitter @globalkellogg or me, @arkellogg. You can also reach us by email. So anita@kelloggglobalpolitics.com and myself, ryan@kelloggglobalpolitics.com. And as always, please see the show notes for all the articles we discussed in this episode and leave a rating and review on your favorite podcast provider. Bye, everyone. Thanks.