Episode summary
Trump Moves to Preserve Xi Truce While Reassuring Ally Japan
Bloomberg Surveillance
· · 7 min · Guests: Elizabeth Economy
Summary
Elizabeth Economy says the center of gravity is Taiwan, where she sees rising pressure from Beijing and growing risk that the issue could collide with President Trump’s negotiations with China and Japan. She argues that Xi Jinping has transformed China’s military over the past 13 years, but also faces uncertainty from repeated purges and roiling senior leadership, which makes readiness and decision-making less clear.
Economy says China’s signaling around Taiwan has intensified through military activity, rhetoric, and punishment of Japan after Prime Minister Sanae Takaichi suggested Tokyo could be drawn into a Taiwan conflict. She says Beijing views Trump as unpredictable and sees an opening to test whether he might be willing to discuss Taiwan as part of a broader deal, especially after the U.S.-Russia talks over Ukraine.
On the U.S. side, Economy says there is no clear indication Trump would trade on Taiwan, but she warns there is always concern about his commitment to the island. She notes that Secretary Rubio and Secretary Hegseth have been much more explicit in support of Taiwan and U.S. Indo-Pacific allies, leaving open the possibility of internal division on China policy. She frames Xi as playing a much longer game than any U.S. president, with plans extending to 2035 and 2049.
Key takeaways
- Elizabeth Economy says Taiwan is “under threat” and that Beijing’s military pressure and rhetoric have only increased in recent years.
- She argues Xi Jinping has transformed China’s military, but recurring purges create uncertainty about senior leadership readiness.
- Economy says China sees Trump as unpredictable and may be probing whether he would discuss Taiwan in a broader bargain.
- She says there is no clear sign Trump would put Taiwan on the table, though his commitment to Taiwan remains a concern.
- Economy says Xi is playing the long game, with targets aimed at 2035 and 2049 rather than a single election cycle.
Notable quotes
“there's no doubt that Taiwan is under threat. And over the past several years, the rhetoric out of Beijing and the sort of the military activity around Taiwan”
“I think there's no doubt, you know, Xi Jinping has said he wants the Chinese military to be prepared to take action by 2027”
“I think, look, that there's still a sense within China that President Trump can be very unpredictable”
“He's certainly playing the long game, as you say, each and every day”
“they continue to invest in all the resources and capabilities that they need to, you know, win the game over to 20, 35 to 2049”
How the episode opens
If you're reading the book, then you know that Xi Jinping has made radical changes to China's military over the past 13 years since he came into power. Now he's reorganized it. Certainly he's reshuffled the top Chinese military.
He's modeled it in many cases on the U.S. sort of joint structure. And he's certainly increased and advanced China's military hardware capabilities.
So he's transformed. He's been a transformative military leader. That being said, of course, we've also watched these purges of the senior military leadership, most recently at the Fourth Plenum.
And it's very unclear, you know, sort of the readiness of the Chinese military, certainly at the top to take any kind of military action moving forward. So just the constant roiling of the senior Chinese military leadership, I think, is a real challenge for the and for Xi Jinping and the party leadership. Liz Paul Sweeney brought this up brilliantly this morning.
The basic idea is we all have a perspective of Taiwan and maybe it's Chiang Kai shek and Mrs. Chiang Kai shek coming to Washington and then to this and Nixon and Kissinger and all that. Is this a full time point where Taiwan is actually under threat?
Look, there's no doubt that Taiwan is under threat. And over the past several years, the rhetoric out of Beijing and the sort of the military activity around Taiwan, the air flights, the sort of crossings in the Taiwan Strait over the median line have only increased. And I think what we saw, you know, just over the past few weeks was Prime Minister of Japan.
Takeuchi when she said that if China were to take military action against Taiwan, Japan could be forced itself to take some sort of military action, that China came out very fast and said Japan crossed a red line and that it started, you know, that banning, you know, boycotting Japanese seafood, Japanese films, etc..
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- trump xi truce
- taiwan tensions
- japan china relations
- fentanyl tariffs
- rare earth exports
Watch the episode
Watch “Trump Moves to Preserve Xi Truce While Reassuring Ally Japan” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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