President Trump’s recent state visit to China shows some promise, but where does it fall short? In this Tough Things First podcast, Ray Zinn explores the politics and the economics. (Watch Now…)
Ray Zinn: Hello, Rob.
Rob Artigo: Ray, this is a special edition of the Tough Things First Podcast where we are also on video, so our listeners can choose to watch it if they will by clicking the link, at toughthingsfirst.com. Just navigate to this podcast and you’re all set. Today we’re talking about President Trump’s recent state visit to China and what it means to American businesses. Let’s just jump right into that Ray. From May 13th to the 15th, President Trump met with Xi Jinping in Beijing. Try saying that three times fast. Xi Jinping in Beijing. There were high profile meetings, visits to the temple of heaven and Trump came away talking about fantastic deals, including a big Boeing order and progress on agricultural exports. So what’s your take on this visit from what you’ve seen so far?
Ray Zinn: I think there’s a lot of promises, but not sure about how much is reality. I’ve not seen any final orders or any commitments at this point. In politics, it’s mostly bluster as opposed to reality, and so we have hopes that there is some reality in the bluster, but there’s no guarantee. Like for example, the Boeing order of 200 airplanes, that’s a lot of money, that’s a big deal. Also, about some AI cooperation and other, the purchasing of soybeans. But in any kind of negotiation, whether it be with China or any other country, there’s a give and take. I heard a lot about the take from President Trump of what we’re going to take away from the visit, but I don’t know what we’re giving. And unless we give something, I’m not sure there’s much taking involved.
I know that most of the time was spent on the Taiwan issue and whether or not the United States was going to now honor that order in September for those arms deals with Taiwan. I have a suspicion, although I don’t know that for a fact, I have a suspicion that was one of the things that Xi Jinping asked, was for us not to fulfill that order. So that’s a take from us to China, is the commitment not to honor that order from Taiwan. And as I said in the beginning, in any deal, there’s always a give and take and you’re not going to get something unless you’re willing to give something in return. So as I said, there’s that give and take. And I heard a lot about what President Trump got out of the deal, but I don’t see any hard copies of purchase orders. And then I think that by the same token, President Xi Jinping probably asked Trump not to honor that order for arms out of Taiwan.
And so I think it’s a wait and see, I think maybe in September, maybe, that if there’s no arms approval and no sales to Taiwan, then maybe Xi Jinping will then place those orders for those Boeing aircraft and those soybeans and some of those AI opportunities. So again, I think it’s the take, take, take, and not the give, give, give, is what’s going on here. And China is a big adversary of the United States, at least economically, if not militarily. It’s a wait and see in my mind.
Rob Artigo: You mentioned the idea of talks about a trade deal and then you talked about the takes but not the gives, and maybe the gives are just not spoken about yet. Maybe they’re part of the deal-
Ray Zinn: Exactly.
Rob Artigo: But not spoken about.
Ray Zinn: Yeah.
Rob Artigo: It wasn’t what we’d call a sweeping new trade deal anyway, there’s still tariffs involved apparently, there are technology restrictions, and of course, you mentioned Taiwan, so there are geopolitical tensions. How should American companies approach China right now? I mean, I realize that we have to deal with governments on both sides when we’re dealing with trade between the two countries and the individual companies need to navigate all that. How should American companies approach China right now?
Ray Zinn: It’s the big E, Economics, it depends upon what kind of an economic relationship you can have and how long term that economic relationship is. So if your economic relationship is six months to a year, I think it’s okay, but if it’s like three to five years, I wouldn’t touch it with a 10-foot pole.
Rob Artigo: Wow. Yeah.
Ray Zinn: So as you say, the give and take, my takeaway is there was a lot of arm wrestling and bluster and pomp and ceremony and all that goes into politics. So it was a political meeting, it was not an economic one in my opinion. Developing a good relationship with your adversary is good. They say, hold your friends close, but your enemy’s even closer. And so I think that having a closer, closer, closer relationship with China is good, as long as we all understand what the issues are that we’re keeping close to our best as you would. So again, my opinion is nothing’s going to happen with China giving anything until it’s clear to China that the United States is not going to support the arms deal with Taiwan.
Rob Artigo: Okay. Final question here deals with business owners and executives who are having to deal with China or will at some point deal with China. What do they do in the coming months to protect what is there? So intellectual property, certainly cybersecurity patents and supply chains are all non-negotiables, right?
Ray Zinn: I assume that there’s no protection. It’s just like if you were to fly to Iran right now as a US citizen, assume there’s no protection. And so if I were dealing with China, like I did back when I was running Micrel, I had to assume that that was not going to get any reciprocity and protection.
Rob Artigo: Wow. Great insights, Ray, as always, and so thanks for breaking that down for us.
So that’s Ray Zinn, I’m Rob Artigo, thanks for listening to the Tough Things First Podcast or watching under the circumstance, whether you did or didn’t, if you want to, you can. Join the conversation at toughthingsfirst.com, your questions and comments are always welcome. Follow Ray on X, Facebook and LinkedIn. And of course, pick up Ray’s books, Tough Things First, The Essential Leader: 10 Skills, Attributes, and Fundamentals that make up the essential leader. And of course you know about the Zen of Zinn series one, two, and three, which now includes the new book, Zen of Zinn Daily. If you haven’t read it today yet, pick it up and read it. Thanks again, Ray.
Ray Zinn: Thank you, Rob.
