Transcript
MCMAHON:
In the coming week, Syria pursues a transition after the fall of Bashar al-Assad’s regime, Romania and Georgia confront different kinds of political turmoil, and the United Kingdom will join the Comprehensive and Progressive Trans-Pacific Partnership trade agreement.
ROBBINS:
God, you said that so clearly.
MCMAHON:
And I said that on December 12th, 2024, where it’s time for The World Next Week. I’m Bob McMahon.
ROBBINS:
And I’m Carla Anne Robbins.
MCMAHON:
Carla, we have to begin in Syria. The last time we spoke, there was mere advancing of rebels towards the south of the country in the area of Homs. Within a few days, obviously, Bashar al-Assad was on a plane to Moscow and then rebels were in Damascus, if not in control of most of the country. But what happens now? Does the U.S. or anyone else in the region have a post-Assad Syria strategy?
ROBBINS:
This is moving so quickly that everyone’s really scrambling. The Secretary of State Antony Blinken and National Security Advisor Jake Sullivan are both in the region, and they’re saying all the right things about wanting an inclusive Syrian-led transition, but their real goal for the Biden administration, which really doesn’t have much time left to influence events, is trying to stop Syria from turning into another Libya. And so far, President Trump has declared that this is not our fight and we should have nothing to do with it. I’m not really sure they’re going to have much chance by the time they come into office.
The U.S. has long had troops on the ground to fight ISIS in Syria, and since this weekend, they’ve been monitoring chemical weapons sites and hitting ISIS targets. And as far as I can tell, it doesn’t appear to be a significant escalation of what it’s been doing before Assad fell. But there are reports that these Kurdish-run camps where ISIS prisoners are being held may be coming under attack. So I think the Pentagon may have to make some decisions pretty quickly about how much deeper they want to get involved, but I think the bottom line here is that they really would like to limit the chaos as much as they possibly can. I don’t think they’ve got big geostrategic goals here for Syria, limited by time and limited by the fact that it really isn’t our fight. The Israelis and Turks seem to have greater ambitions.
Israel, really extraordinary what they’re doing. They’ve conducted hundreds of airstrikes sinking Syria’s navy. Did this navy really pose a threat to them? Attacking chemical weapons sites, munitions factories, all sorts of other military assets. And today, Thursday, Prime Minister Benjamin Netanyahu announced that Israeli troops are going to stay inside Syrian territory it seized, over the weekend, the so-called buffer zone until what he described, “as a new force is established that meets its security demands.” Now what they’re saying is that they want to keep this weaponry away from extremists. They’re particularly rejecting all criticisms, all warnings, but really, seems to me they want to do is they want to ensure that whatever government emerges will be, if not fully pacified, pretty close to it so they’re unable to threaten Israel militarily, unable to provide any support for Hezbollah, what’s left of it, and will just provide any support for Iran. And given their history with Syria, you can understand it, but it’s a dangerous game they’re playing right there, but they’re pretty proof to any criticism given everything that’s happened in Lebanon and Gaza.
The Turks, another major player, seem determined to use this moment for their own self-interest as well. They want to try to weaken or wipe out Syrian Kurdish forces. I think what Erdoğan is worried about is this possibility of another Kurdistan-like model inside of Syria, and how they do that without getting drawn into a more direct fight with the U.S., which is the NATO ally, is less than clear to me. The Pentagon has long supported Kurdish groups in Syria as proxies in this fight against the Islamic state, and there was all sorts of reports that there were Kurdish-Syrian forces backed by the U.S. fighting Erdoğan rebels over the weekend. There seems to potentially be a ceasefire around there, but Blinken is on his way to Ankara to talk to Erdoğan. We’ll see if this can hold, but the potential there of a NATO ally against NATO ally fight is a pretty frightening thing. We’ve seen it before on the ground there.
And finally, just to go through all the other players here, the Russians, of course, big players on the ground there. We’ve seen very little action and they have this warm water port that they very much want. They seem to have pulled some troops out. They are big losers in this imperial overstretch. At the same time, all sorts of reports they would love to negotiate to try to keep it. I would have to suspect if there is a government that emerges there, they’re going to make a pretty big demand, and I would suspect a big demand would be, “You want to keep that port? Give us Assad.”
And Iran, biggest loser of all in this, big geopolitical loser on this, and it seems oddly passive so far. They’ve denounced Assad’s fall as an American and Israeli plot, but they’ve also blamed Assad for his own weakness. And they’ve got some pretty hard thinking of their own about how they move forward. Do they rush toward a nuclear weapon, God forbid? Do they try to negotiate with the Americans and the Europeans after this? This is really a big loss both for Russia and Iran, but more than anything else, for Iran.
MCMAHON:
Yeah. There’s so many elements there and as you were talking, I was doing the mental scorecard, which has been also part of our website coverage. Winners, as you say, Turkey, certainly, Israel, at the time being. Losers, certainly Iran, Russia, and then other players who have a vested interest, Syrian Kurds, the Sunni Jihadist forces. And Syria is this incredible mix of different ethnic groups and religious sects within religious sects that it’s going to be a while to unwind where their loyalties lie as well. But so many interesting things. From what you said, I think, in particular, the point of giving up Assad is interesting as we see the ongoing wrenching experience going on, of opening up this matrix of prisons, the Sednaya prisons, which is just awful, really showing the depths of horror and depravity of this regime and what they were doing to their domestic opponents across the spectrum. Political opponents, people who had military objections, students, what have you. It is just awful.
You do not want to see that go past without impunity, but that has to involve people close to Assad. How much of the current members of the government who have been trying to be part of standing up of a new Syria are implicated in any of that? It’s not clear. This is part of the messiness of a transition, and it’s really going to be interesting to see if this rebel coalition that swept into Damascus, how they’re going to handle things. They are seemingly saying the right things about everything from finding and controlling chemical weapons stocks, to trying to be an inclusive government and so on. But it’s so early and as is often with this podcast, we sit down, we say a few things and then we’re overtaken, Carla.
ROBBINS:
Mm-hmm. Sometimes, we get it right in our predictions.
MCMAHON:
Sometimes, we do.
ROBBINS:
It is called The World Next Week.
MCMAHON:
Okay.
ROBBINS:
Maybe the world in the next few minutes. We know so little about this main rebel group that overthrew Assad HTS. Are they al-Qaeda? Are they the Taliban? Can they win control the country itself? It’s one thing to sweep into Damascus, it’s another thing to hold onto it. The leader is still classified as a terrorist by the U.S., by the UK, by the UN. As you said, he’s distanced himself from al-Qaeda, but all the reports from Idlib, where they were in control, it wasn’t a nice place. They have said all the right things, that they’re going to treat minorities right. I haven’t seen a lot of reporting about how they’re going to treat women, big question. The U.S. is wrestling with this. Should we be talking to them? Can we moderate them? Do we enable them? We’re out the door anyway.
We do know that there are Turkish and Qatari delegations already in Damascus for talks with them. They seem to want to play the game. The Turks, in particular, very much want to be kingmakers in this. It’s going to take a long time for us to try to figure out what’s going to emerge from this. But in the near term, trying to get control of those chemical weapons sites seems like a very important, important goal. And certainly, finding any Americans that are on the ground, if they want to participate with the U.S. on that, seems like an absolutely, Austin Tice and others, absolutely an essential role.
And it’s really tough for the Biden administration. They don’t have much time here. So avoiding a fight with the Turks seems like a pretty good idea and not abandoning the Kurds. That seems like we’ve relied very much on them and they’re going to have to make some potentially pretty big decisions if those prisons are under attack. They certainly don’t want to release thousands of ISIS or ISIS supporters on the ground.
MCMAHON:
Yeah, and your mention of the Kurds was significant in that some analysts have said Turkey took note of the way the U.S. supported, nurtured, sheltered the Kurds in northern Iraq and they still have this pretty autonomous status to this day in that part of Iraq. And Turkey would not like to see that happen in Syria in regards to the Syrian Kurds as particularly dangerous and threatening to them in terms of ties to separatist Kurds in their own country. So that is one of the many plot lines that will be worth following.
ROBBINS:
Bob, let’s move to Europe and charges of Russian meddling in two embattled democracies. I’m not sure we can use the word democracy anymore with Georgia, but we’re going to talk about Romania and Georgia. In Romania, the constitutional court ordered annulled the first round of its presidential election and called off the final vote. They’re going to say they’re going to have another election, but they’re not saying when. It seemed inevitable that this far-right candidate was going to win. And their justification for calling this off was they said that the campaign had been tainted by manipulation of digital media. Huh? The government itself, which isn’t the court, has accused TikTok of violating Romanian regulations, and said that Russian-managed bots were involved in it, but they haven’t offered an enormous amount of proof of this.
Meanwhile, in Georgia, protesters have been in the streets for two weeks after the ruling Dream Party, and we’ve talked about this a lot, that’s it’s backed by this billionaire who made his fortune in Russia. They suspended talks on their bid to join the EU, and this goal of joining the EU is actually written into the Georgian constitution. So I suppose I’ve got two questions for you. How serious is the threat to democracy in Romania? I get nervous when people suspend elections, even if the people who are going to win are not people I like. And is Russia really the main villain here? I haven’t seen a lot of evidence of that, although I don’t doubt it because we’ve seen an enormous amount of Russian meddling in lots of elections, and this particular sort of bot meddling.
MCMAHON:
Yes. I think first it’s worth saying that the two cases you mentioned, we deliberately put them together in this podcast because there are striking similarities, but also clear differences. Romania is a member of NATO. Romania is a member of the European Union, which Georgia can only aspire to, at least many in Georgia can only aspire to at this point, but they’re both going through crisis moments. Some analysts have said that this is the biggest political crisis in Romania since the Ceaușescus were tossed out and executed.
And it’s because of what you pointed to, it’s one thing to be alarmed at tampering in its election, and certainly, Russia has been the bogeyman in so many elections and in terms of real evidence that Russia has been generating through bot farms and other tampering it’s been involved in election tampering including in Moldova, neighboring Moldova, but still in all, the evidence is a bit sketchy at this point, and there is circumstantial evidence that a major heavily funded TikTok campaign elevated this candidate, Călin Georgescu from obscurity. He wasn’t in the top five in polling going into the presidential vote to the lead percentage, twenty-three percent. And was suitably alarming that members of Romanian intelligence declassified materials to show the fact that there was virtually no spending going on for any sort of promotional campaign for Georgescu, and yet he skyrocketed up into prominence in the polls. That was enough for the constitutional court to say, “Foul play, we’re stopping this,” but that’s an alarming step.
There’s a new piece in the Journal of Democracy, which you can rely on for covering and really tracking democratic developments and being in favor of democratic developments, which said, “Look, this is playing with fire. This is really dangerous to do something like this.” And it’s worth pointing out the other major person polling in these results. Elena Lasconi, who’s the leader of the Save Romania Union, she came in second with nineteen percent of the vote. She was really upset at the annulment of the vote as well. Again, there’s no clear sign of when it’s going to be held again. Presidential power in Romania is different than Georgia. Georgia, it’s a bit more ceremonial, but Romania, it’s commander in chief of the forces there. That person carries a bit more weight as head of state. And it’s worth saying also, that they had a parliamentary vote that did go forward. There are pro-Western parties that have announced their banding into a coalition that will govern the country.
So all is not forlorn in Romania certainly. It’s in a much better place than Georgia, but they have to sort out soon what’s going to happen with this and can’t have this kind of drifting situation involving its president. If current President Johannes is going to stay in that role for the time being, but you’re going to start having creeping concerns, not just from the far right which had supported Georgescu, but others about how much of this is a bit of a capture of the office of presidency. There’s going to have to be some action soon in Romania.
ROBBINS:
Before we go on to Georgia, I’m really intrigued. Is somebody going to go in and look at the mechanics of this, the notion that a TikTok campaign could be that powerful? So do we even know the demographics of the people who ended up voting because they were persuaded by TikTok? I actually did a class last night in which I had my students who were in their twenties and thirties who were actually making quite a persuasive argument. They think that TikTok should be banned for anyone under sixteen, which I think is quite an interesting sort of backlash from young people against TikTok. But have we even looked at how it affected the vote in Romania?
MCMAHON:
That is where a lot of focus is centering on. There was an interesting report in Radio Free Europe about an influencer who’s got a large following on TikTok, who some reports had indicated had thrown a good deal of resources behind the Georgescu campaign. He denies it. He did a written interview with RFE/RL, but there’s certainly some indications that he supported the Georgescu campaign in ways in which there was a force multiplying effect, and that through this TikTok campaign, Romanians, especially diaspora Romanians, interestingly, who can vote, were getting more and more aware of the Georgescu campaign. And again, this is why the Russian angle has become intriguing as well. It was a campaign in which you heard some familiar things. Georgescu’s talking about a Romania for the Romanians. “We are not going to be dying in the fields of Ukraine,” raising concerns about Romania getting thrust into a war with Russia over Ukraine, for example.
ROBBINS:
So the same things we were hearing in Georgia, also. Yeah.
MCMAHON:
The same things we were hearing in Georgia.
ROBBINS:
And in Moldova.
MCMAHON:
Yes. Now according to some of the declassified documents, TikTok itself had notified Romanian authorities that there was a number of accounts affiliated with the Russian state news agency, Sputnik, that had targeted users in Romania and Moldova. So that’s one of the links. But again, there’s not been a lot of concrete Russian links as of yet. Circumstantial and assumptions given again, the high activity of Russia involving any elections taking place in this sphere. We used to say just in the near abroad, but Russia has been active everywhere in Western Europe as well, but especially in near abroad, it wants to play a role. Georgescu, again, has said, he’s been asked about it. He’s said he’s not a fan of Putin’s. He’s not about being enthralled to Russia. He’s about making things better for Romanians. But just again, the nature of his campaign coming out of nowhere, sixty-two-year-old agricultural trained professional, suddenly is the lead in the presidency gives pause. And this is a part of the world where you’ve had Slovakia recent election results going in favor of a non-supportive of Ukraine. If not pro-Russian, certainly Hungary. And there’s a lot of concern that there’s this mounting movement and this swell of Russian support there.
Now, on the side of Georgia, we’re in a different space. What you referred to was this decision which was expected, but it still was jarring for many Georgians that they were putting off for four years EU accession talks. Very much harbingers of what happened in Ukraine ten years ago, which caused huge demonstrations and we see what we see in Ukraine now. There’s a lot of concern that Georgia, a much smaller country, a country that’s like Ukraine, also had longstanding affiliations with Russia and had been under the sway of Russia, four million people, but also a country that has had a history of feistiness and people taking up arms to fight for their cause.
When I was covering things related to Georgia for Radio Free Europe back in the nineties, there was three civil wars going on at one point. And two of those actually have remained unsolved. They’re separatist states where Russian forces occupy, Abkhazia and South Ossetia. So this is a country that there’s a lot of concern. There’s another situation involving a president there. At the end of this month, its president, mainly ceremonial, but still important symbolically, Salome Zourabichvili, her six-year term expires, and she has said she’s not going to be leaving office until she is satisfied that the proper investigations have been done into the, first of all, the of recent parliamentary elections, which saw the Georgian Dream Party emerge victorious. But also what she says is its seizure of the reins on policy towards the European Union, which is, as you say, is seen as a vested right for the country.
The footage coming on in Georgia, if it had not been for what was going on in Syria in particular, I think that story would be getting a lot more of attention. There’s incredible footage of bravery of protesters going up to armed forces in the streets, but then also the crackdown where especially opposition figures and journalists are getting beaten with truncheons and so forth. And so it’s resonating. Zourabichvili herself who has longstanding affiliations to France. She was born in Paris. She actually met recently with President Macron and Donald Trump who was in Paris for the ceremonies around the Notre Dame reopening. She’s been trying to raise concern about this prying away of Georgia from Europe, which she says, again, is the express rights and express wish of the Georgian people.
Interestingly, Emmanuel Macron had a phone conversation with Ivanishvili, the billionaire you mentioned, which is a fairly rare thing. He’s the power behind the scene, fully acknowledged, and yet, he’s not serving in any official role. The reports that came out from the Georgian Dream Party and from the French side were very accommodating about wanting to find mutual solutions to the problem and so forth.
France, we should note, has played a pretty heavy role, especially in the post-Soviet Georgian history about trying to help it along. It was involved in trying to bring about peace after the Russian invasion in 2008, and it is trying to play an active role in mediating this problem. Macron urged Ivanishvili to lessen the crackdown on protesters after seeing the disturbing images from the country. And so there’s a slight signal of some pragmatism on the side of some of the Georgian Dream officials if you hear them in interviews, and even Ivanishvili himself, who has said he’s always favored EU accession as well. By the way, he has a French passport. He has ties to the West, but he’s clearly also locked in with certain Russian elites, and again, as you said, made his fortune in Russia.
And so there’s a little bit of balancing on a knife edge between the Russia and the West and Georgia. It certainly seems like the magnet of Russian influence is holding sway right now with the Georgian Dream, who hold a lot of the power levers. And Zourabichvili’s position, will she be forcibly removed from office, let’s say at the end of the month, raises a lot of concern as well. So she’s emerging as this central figure in the state of Georgia and the way in which the country is going proceed as a democracy, or whether it’s going to go down into the abyss.
ROBBINS:
Although once again, and I’m not saying that she’s not noble and concerned about the future for Europe and all of that, but does she have a right to stay at office? I’m not sure you have an answer that, but it has that sort of, are we saving democracy or not with these activities?
MCMAHON:
Right. No. It’s a valid question. It’s a very valid question, and it’s why, again, in both cases, Georgia and Romania, this is tough territory to be in and it’s going to need to have cooler heads prevailing and not just the rule of the thug.
Carla, let’s take a holiday from the brutality of the streets and go to the world of trade. Shall we?
ROBBINS:
Oh my God.
MCMAHON:
In just a few days, the UK is, believe it or not, going to accede to the Comprehensive and Progressive Trans-Pacific Partnership, or as the wonks like to call it CPTPP. This is a successor to the TPP, you may recall, but this move comes at a time in which free trade agreements are not exactly popular, certainly not in the United States. So what does the UK see that it has to gain from joining this long acronym, and how will the new relationship affect trade policy, you think?
ROBBINS:
So what is the CPTPP, first of all? So this is the consolation prize. I think that’s what the CP stands for. It’s the consolation prize-
MCMAHON:
I like that.
ROBBINS:
… after the Trump administration pulled out of the TPP. And it’s an agreement among eleven, and this will soon be with the Brits, twelve member states, some of them the fastest growing economies in the world. Once Britain joins, we will have Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam. And once the Brits join, there’ll be a combined gross domestic product of over $15 trillion, or fifteen percent of global GDP. So it is not, as my daughter would say, I just have to get this in. It’s not chocolate liver. She actually said that when she was three.
MCMAHON:
That’s a great line.
ROBBINS:
She’s now thirty-one. So why does it matter that the UK is joining? Well, economically for Britain it is actually not all that significant. Britain already has trade deals with nine of the eleven members, and it is estimated that UK accession is only going to contribute to the British GDP by 0.08 percent over the next fifteen years. So that is not a particularly big deal economically, but there’s a considerable psychic and symbolic importance to this. The Brits began this, and this was a project of the previous Tory governments. It was Liz Truss. Remember Liz Truss?
MCMAHON:
Mm-hmm.
ROBBINS:
And Rishi Sunak embraced this. This was one of these post-Brexit Britain is not isolated. Other people want to be our best friends. This is the global-
MCMAHON:
They were going around the Commonwealth too, trying to get the Commonwealth to pull together in special deals there, right?
ROBBINS:
Right.
MCMAHON:
Yeah.
ROBBINS:
So this is the global Britain vision. And so while it’s not economically anywhere close to rejoining the European single market, which, keep in mind is a lot closer geographically and historically and all that, there’s a lot of big economies there, and it certainly makes a big political point. Other people love us. Other people want to trade with us.
And for the CPTPP, the UK accession may be an even bigger deal because Britain is the first European country to sign on, and it’s the first country to join that is not a founding member. So what it says, and particularly right now when the U.S. is not going to join. You got a president coming in who has declared that tariffs are the most beautiful word in the dictionary. It’s a declaration that the treaty and the notion of free trade is a living, breathing, and growing entity. So it has a particular boost for the CPTPP and for people who believe in free trade agreements. I think it’s significant than when you have the Brits itself join.
And one other thing here is that the process for the UK’s admission was actually pretty significant. So this is truly nerding out so I’ll be brief, but I think it’s worthwhile to consider it because even though they had agreements with nine of the eleven members, they really made them jump through all the hoops. The Japanese oversaw this and it took more than two years. And so they had to meet all of the standards for a free trade agreement. They had to get chopped off on every single one of the members to join it. And there were all sorts of discussions about Windsor Agreements and Mead and all the other things that happens and phytosanitary rules and all the other things that they do when they do trade agreements. And the reason they did-
MCMAHON:
I’m not going to ask you to explain phytosanitary rules, maybe even-
ROBBINS:
I’m not even sure. Is that the right word? I think-
MCMAHON:
That is the right word, yes.
ROBBINS:
Oh, thank God. Thank our researcher, Helena, for that one. The reason why they’re so vigilant about this is that the Brits are not going to be the only ones who are applying here. There are five other countries that are in the queue, and the next ones in line are Taiwan and China. They know that this is very precedent-setting. If you bend the rules for the Brits, the other people coming after are going to want you to bend the rules. So Taiwan, obviously, is almost a slam dunk. Okay, this is an advanced market economy. They’ve got all those wonderful chip factories. Who wouldn’t want them in the club? Well, as it turns out, nobody really. They’re going to be really nervous about putting them in without bringing the Chinese in. And if you’re going to put the Chinese in, you’re going to have to break a lot of rules. And everybody’s really chastened with the experience of the WTO in which they broke all the rules for this enormous non-market economy, and it didn’t work out particularly well with the WTO.
So adhering to the rules, setting up this precedent, negotiating it the right way with the Brits was a really big deal for them. And who knows what’s going to happen with Taiwan and China next. And then after that, you’ve got other countries are going to take quite a long time, Ecuador, Costa Rica and Uruguay, but what they’ve done is they set up a precedent. It’s living, breathing, growing, and let’s see what happens with the next applicants.
MCMAHON:
So trade is not dead. It sounds like a lot of interest, a lot of things going on. While the U.S. sits behind its potential tariff wall going forward, the rest of the world is still trying to trade.
ROBBINS:
Yeah. We’ll see what happens. But if the U.S. goes around picking major trade fights with not just adversaries but with allies, the question then becomes do people buckle under to the United States or do they move forward without us? I think that, boy, would CPTPP love the United States to join. And the Chinese have this wonderful puckish way to them. They were first in line. They were right there with the Taiwanese saying, “We want to join. We want to join. If the United States doesn’t want to play, we certainly want to play.” And there is a warning to this as well. I don’t think the Chinese are getting in anytime soon because certainly, with the UK there, they can run interference with us. They could, as the Brits would say, scupper that. But if you don’t play, you can’t set the rules. And there’s a very important message in that.
On the other hand, United States has an enormous amount of power and the ability to bully the world. So we’ll have to see who wins on this. Is it tariffs or is it free trade? That’s going to be one of the big questions moving forward.
Bob, it’s time to move forward with this. Our audience has chosen well. It’s time to discuss our audience figure of the week, and this is the figure listeners vote on every Tuesday and Wednesday at cfr_org’s Instagram story. And this week our audience selected, completely on our wavelength, “China Opens Anti-Monopoly Case Against Nvidia”. So the U.S. trade war with China thickens. What’s the latest on this? And the thing I really don’t understand about this, we were denying the Chinese access to really sophisticated chips. And if they’re having a monopoly case against Nvidia, doesn’t that mean that they’re going to have a harder time getting chips? I don’t really understand this one.
MCMAHON:
I think in between the lines, I agree it’s complicated and I don’t fully get it, but what I’m seeing in some of the reporting is that yes, they’re cut off, but the Chinese play the long game and they are developing capabilities to develop their own sophisticated chips, and are happy enough to do that if they have to take steps like this to retaliate against the U.S., because what this figure of the week is about is part of the tit-for-tat escalation going on between China and the United States. You had, earlier this month, the United States launching its third crackdown in three years on China’s semiconductor industry, curbing exports to 140 companies. So this is curbing high bandwidth memory chips that are used for AI training. And AI is the big thing here. Nvidia has had a shrinking amount of market in China, although still significant, 16-17 percent or so, but it’s had a very large percent of the AI related chip market.
By the way, that market’s not going away. It’s not ending. But China announcing this monopoly proceeding is a warning shot to say it can do things like this if the U.S. continues to try to ratchet up its controls on China. It had earlier announced export bans on important elements like gallium, germanium, antimony and other high-tech materials which the U.S. relies on heavily from China. And so again, this is part of the supply chain warfare going on that we might see play out.
Specifically, the case that seems to have aroused China is one that they had preliminarily approved about four years ago, which was the acquisition of a company called Mellanox Technologies. It makes computer networking equipment. And China’s now come back and said, “Actually, there are things involved in this acquisition and this market share that smack of monopoly.” And so countries can do this a lot basically. Any company the size of Nvidia is going to potentially face this. But this one seemed to be clearly a Chinese move to retaliate and just try to say, “Look, how much longer do you want to play this? We have things we can do, and this is another step.” It was noted the previous time China had probed a major tech company was 2013 against Qualcomm, and Qualcomm ended up paying a nearly one billion fine to resolve that dispute. So not sure how much farther this is going to go, but we’re seeing a trajectory here.
ROBBINS:
And it did have some impact on Nvidia’s stock, didn’t it?
MCMAHON:
It did. It took a hit of about 2-3 percent, I believe. It’s still up on the year pretty highly, but it had a major impact on its stock. This is a big trade relationship, as are many which people need to remember, which is there are still a lot of very, very big U.S.-China trade ties, and this is one of them.
ROBBINS:
And we’ll have to see. We haven’t heard an enormous amount as much as we’ve heard from the incoming Trump administration about tariffs. We haven’t heard an enormous amount about where they stand on high tech.
MCMAHON:
Yes.
ROBBINS:
Very complex. And President Trump was, of course, first surfaced the TikTok ban and then changed his position on that as well. So that’s a-
MCMAHON:
And I look at people, from Elon Musk to others, that are acquiring nominations and positions of influence in the administration’s shows potentially a real boom for tech. By the way, it’s also interesting to note reports today that Trump had invited Xi Jinping to his inauguration. So stay tuned to see how that one plays out.
ROBBINS:
Ooh. Xi at the inaugural ball.
MCMAHON:
Yes.
ROBBINS:
Can he waltz? I’m looking forward to that one.
MCMAHON:
Well, on that festive note, Carla, that’s our look at The World Next Week. Here’s some other stories to keep an eye on. Palestinian President Mahmoud Abbas will meet in Italy with Prime Minister Meloni, the Economic Community of West African States Summit takes place in Nigeria, and German Chancellor Olaf Scholz will face a confidence vote in the Bundestag.
ROBBINS:
Please subscribe to The World Next Week on Apple Podcasts, Spotify, YouTube, or your favorite podcast platform, and leave us a review while you’re at it. We appreciate the feedback. If you’d like to reach out, please email us at [email protected]. The publications mentioned in this episode as well as a transcript of our conversation are listed on the podcast page for The World Next Week on cfr.org. And please know that opinions expressed on The World Next Week are solely those of the host, not of CFR, which takes no institutional positions on matters of policy. Today’s program was produced by Justin Schuster with Director of Podcasting, Gabrielle Sierra. And special thanks, really special thanks to Helena Kopans-Johnson for her extraordinary research assistance. Helena, you got me through trade this week. Our theme music is provided by, he’s everywhere, Marcus Zakaria. And this is Carla Robbins saying so long.
