Trump’s Tariffs on China: Will They Work? Nazak Nikakhtar Explains

[RUSH TRANSCRIPT BELOW] In this latest installment of our special series on the U.S. presidential transition period, I’m sitting down with Nazak Nikakhtar, former assistant secretary of commerce for industry and analysis under the first Trump administration. She’s an expert on trade and national security and a partner at Wiley Rein LLP.              

In this episode, we dive into the debate surrounding the use of tariffs. How have China’s unfair trade practices destroyed American manufacturing? Will tariffs work? Or will they make things worse for the average American? And what other tools will Trump have at his disposal that can restore and protect U.S. industry?

Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.

RUSH TRANSCRIPT

Jan Jekielek:
Nazak Nikakhtar, such a pleasure to have you on American Thought Leaders.

Nazak Nikakhtar:
Thank you for having me. Glad to be here.

Mr. Jekielek:
President Trump has indicated on repeated occasions since his re-election that he’s going to use tariffs as a tool. In some cases, it almost looks like a tool of diplomacy. In other cases, as a tool, even perhaps of economic warfare, but also for bolstering U.S. manufacturing. Can these tariffs be used in all these different ways? What is he doing here?

Ms. Nikakhtar:
That’s an excellent question. It’s something that’s been very often debated. When we look at tariff authority, we have Congress has tariff authority and it by statute mandates what the tariff levels need to be. We have most favored nation tariffs across the board. But then we have legal authorities that allow us to increase tariff levels if certain things happen—if there is dumping, if there are counter-available subsidies, other elements of unfair trade, import surges, if we need to retaliate against the trading partner for discriminatory behavior against the United States. So we have mechanisms to increase tariff levels. So when President Trump is talking about imposing tariffs, whether it’s on a country or a set of countries or globally. It’s through those legal mechanisms that we have to correct for trade distortions.

Mr. Jekielek:
Let’s talk about a few different examples like this 10% increase in tariffs for China. What’s happening there?

Ms. Nikakhtar:
China has given us so many different causes of action to impose tariffs, right? Currently, against China, we’ve got dumping and countervailing duty tariffs to address their subsidies. We’ve got tariffs to address import surges. We have tariffs on their steel and aluminum overcapacity. We have tariffs for their IP theft, right? But it doesn’t stop there. China has more industrial subsidies. They have many other unfair trade actions that they have been basically doubling down on to cripple the U.S. economy and cripple economies throughout the rest of the world. And we have legal tools to address them.

When President Trump is talking about tariffs on China, he’s really talking most fundamentally about retaliatory tariffs to push back against China on these range of problematic things it’s been doing, including the exports of deadly, illicit fentanyl that’s harming the United States, including overcapacity in batteries, semiconductors, et cetera, that are also harming U.S. interests and, frankly, interests around the world.

Mr. Jekielek:
When you say overcapacity, please explain that.

Ms. Nikakhtar:
In the first Trump administration, we were faced with facts of Chinese overcapacity in steel and aluminum. And one way I’ve heard it described, which has stuck with me for eight years now, is the fact that China was producing so much excess steel in the global markets, right? Supply way beyond demand. And that supply, it was enough to build a steel bridge to the moon nine times and back, right? That will illustrate to you the true extent of overcapacity.

What does overcapacity do? It collapses global market prices. At the end of the day, we’re talking about, even if it’s specialized, we’re talking about commodity goods. We’re facing a collapse in global prices, which is spilling over into the United States. The other interesting thing that people really fully didn’t realize was that when China was engaging in all this production of steel and aluminum, it’s flooding not just the U.S. markets, but our trading partners markets with steel. Now, you’ve got European steel producers, you’ve got Japanese, you’ve got Korean steel producers who are displaced from their home market and now are displaced from the global market. Where are they going to sell their steel to to get a price premium into the United States?

So all of a sudden, the U.S. is being hit with massive surges of steel, not because it’s the fault of our allies. I remember when this was happening, Congress kept saying, do you think our allies are harming national security interests? This isn’t an intent issue. Our allies have been adversely impacted by China, too, because they can’t sell anywhere else. So they’ve diverted sales to the United States. Our markets can’t absorb all this excess capacity.

And the other interesting thing is once we started putting safeguard tariffs to protect our industries from collapse, other countries then got hit with the surge from imports from China and the rest of the world. And they started leveraging their own safeguards too. The U.S. started a cascading effect to get other countries to start thinking about engaging in self-help as well.

Mr. Jekielek:
Was this a play by China to basically corner the steel market?

Ms. Nikakhtar:
Absolutely. China does this over and over again. What we see happen in steel and aluminum, China is now doing in semiconductors. China’s been doing in optical fiber cables, and China is doing in batteries right now and EVs. It’s actually building massive foundries to make legacy chips with low-cost production, underpricing everybody else is taking market share away from the Taiwanese producers, the Korean semiconductor producers, and the U.S. semiconductor producers. With lithium ion batteries, it’s producing the lion’s share of the global demand. It’s underpricing everyone. And other producers have exited the market.

EVs are an interesting dynamic, and we’re hearing a lot about this. Chinese EVs are $8,000 to $8,500. How do you ever compete? If you’re a market economy and you’re going to adhere to market principles when you’re building out costs, how do you compete against $8,000 vehicles? But China’s flooding the global markets with cheap EVs. Japan can’t sell in third country markets anymore. It’s lost all the other markets. South Korea has lost its internal market and third country markets. The Europeans can’t sell at home anymore and can’t sell to their trading partners. Those cars are now coming into the United States. It’s surging volumes too.

It is the same story as before. We can’t take this excess capacity. We’re going to have to do something to shield ourselves against what has been caused by China’s excess capacity. But the domino cascading effects have hit our allies, too. One of our closest trading blocs, the European Union, has spent decades discriminating against U.S. autos. But with open arms it has welcomed Chinese EVs that have now destroyed its market. We’ve got to reset our trading relationships with all of our allies in terms of reciprocity, fair trade, and then work with them to counter China.

Mr. Jekielek:
With Chinese EVs, there’s this whole other dimension, because a Chinese electric car is basically one giant sensor. We talk about intelligence collection capability, right?

Ms. Nikakhtar:
The House Select Committee on the CCP came out with this fantastic investigative work that mentioned that there were two Chinese companies,
Fibrecom and Quectel, that are in all of our telecommunication infrastructure. Their modem is in all of our telecommunications infrastructure. It’s not only in all of our telecom infrastructure, it is in the global telecommunications infrastructure. So it doesn’t even matter anymore. It does in a way, but it also doesn’t matter if you have TikTok on your phone anymore.

Because even if you don’t have TikTok, the modems from Fibrecom and Quectel and the towers that we’re all connecting to are listening to our conversations. Our smart homes are now connected to those, right? Our smart autos, even if we don’t get Chinese autos with the Chinese software, which are enormously problematic in themselves, and I’m not saying that that’s not a problem, but even if we get, quote, safe software, they’re still connecting to the Chinese modems in our telecommunication infrastructure. They’re everywhere right now.

And the fact that we’re quibbling so much about, you know, a few layers down, rather than focusing on going after the core, to me is extremely problematic. We need to wake up and understand where the source of the threats are and cut it there. Otherwise, we’re just wasting our time and resources, and we’re not getting to the core of the problem.

Mr. Jekielek:
For those that might be unaware, why is it a problem that these modems are in essentially global telecom infrastructure? This is just very, very smart trade practice by the Chinese regime.

Ms. Nikakhtar:
I hear this a lot. We say that China is a surveillance state. Isn’t the U.S. a surveillance state? No. The difference between the United States is that we have laws. We have checks and balances there to control the private data of individuals. We have issues. There’s going to be no area in the world where the U.S. and every other democracy isn’t going to have issues to grapple with and improve on things and have the voice of the people direct which way this country is going to go and which way the country’s laws and policy is going to go.

Compare that to the opposite end of the spectrum, which is command style countries, economies like China, where it is the Chinese Communist Party’s voice. It is the only voice that counts. The people don’t have a vote of how they need their data controlled or not controlled or what privacy means. Everything goes to the Chinese Communist Party, and they’re actively using all of the data collected to weaponize. Genetic data, you can think it’s well established now in a way that it wasn’t maybe eight years ago. I think that people, the public’s thinking has evolved in terms of collecting genetic data to make pathogens that target certain people or target people at a certain speed.

If the Chinese are collecting, for example, information on stores, I’ve heard this too. Well, why is that a problem? Because through shopping patterns, you can detect which portions of the population have children, right? What the demographics of populations are. And the Chinese government can target that. The Chinese government papers have analyses of which U.S. cities to target, attack, and bomb to wipe out which portions of the U.S. population. They’re building a military to potentially take on anybody who dare, any country who dare gets in its way. And it is weaponizing our data and it is conducting mass surveillance to study our patterns of behavior.

Take video games, for instance. The Chinese software in video games is mapping out how players react, whether they pivot right, pivot left to certain cues. Through that introduction of software and code, they’re training our video game players, pilots, simulation software, et cetera, to move in certain ways. They’re leveraging every single aspect of technology to weaken us and to give themselves an upper hand. And if anybody thinks for a minute that they’re not, there’s tons of literature out there to demonstrate exactly what I said, that they are weaponizing.

And I think folks who want to get better educated really need to start reading information that has been declassified or made public about exactly how their weaponizing system and then the continuous hacks into the U.S.
government system like the most recent Treasury hacks. There are hacks on private industries. If anybody is thinking that they’re not extracting information to weaken us, then why would we have so many hacks?

Mr. Jekielek:
I’m a person who always wants to assume good faith. And frankly, most decent people are. That is the correct way to operate. But in this case, I feel like we’re really handicapping ourselves in the West and the free world. I’d love to get you to comment on that.

Ms. Nikakhtar:
I find it fascinating, not having been born in the United States, but being born in a country that underwent a revolution and became an authoritarian state. I’ve had the benefit of seeing the freedoms and the joys of what democracy has to offer and then this other thing that’s quite terrifying. are fundamentally good and good-natured and exactly like you said want to give people the benefit of the doubt. We make the mistake of imputing those values onto adversaries right and we need to stop doing that. We need to take our adversaries for what they are. It is okay if we treat our allies like-minded partners who are not sending out to harm the United States and giving them a benefit of doubt.

But then you’ve got this anomaly like China, even if the corporations are trying to do their best, the Chinese government has removed any ability for us to even give them the benefit of the doubt by imposing laws that direct every single individual through the social credit system and the national security laws and every corporation through the corporate credit score and the national security laws to advance the CCP’s objectives and the CCP’s interests. And we know through the CCP’s writings that the CCP’s objectives and interests are to rule the world according to the Chinese Communist Party’s values and to destroy anybody that gets in its way.

Now, there is an entire country where the government is telling every single citizen and every single company that you need to work to achieve and further my interests, or I will retaliate you, I will shut you down,
I will throw you in prison. By law, the Chinese government has now told us we can’t give any entity in China the benefit of the doubt. Even if there’s good people, they can be coerced by the Chinese government to do bad things. Even if there’s a good company today, the CCP can knock on their door tomorrow and say, I need you to act badly to harm the United States and harm Taiwan.

The Chinese are telling us exactly what their plans are. The Chinese are telling us exactly what their laws are. I think we should believe them when they’re telling us this, rather than imputing some fiction and masking reality with fiction, right? They’ve told us what their laws are, how they function. That means that we can’t give them the benefit of the doubt, because the Chinese government has taken that away from us.

Mr. Jekielek:
There are multiple national security laws in China that explain that any company in China has to act in the national security interest of the Chinese Communist Party and provide whatever information is demanded.

Ms. Nikakhtar:
Let’s say you have a really well-meaning Chinese scientist who comes to the United States, right, and gets a job at my alma mater, UCLA, and is trying to do good and maybe doing AI research. The Chinese Communist Party now will identify this person as being very valuable in the work that they’re doing to the CCP. And this individual, no matter how American-loving they are, will ultimately have no recourse except to bend to the CCP’s desire because otherwise they’re going to have harm inflicted on their family. This is how these regimes operate.

This is how the Iranian regime operates. To me, what’s so fascinating is that the American public and generally the population around the world has no difficulty understanding that this is how the Iranian regime works. This is how the North Korean regime works. But for some reason, it is impossible to fathom that this is how China works. There’s no other, there’s no way to assign any trust to any Chinese entities. The Chinese government has prohibited that by use of their laws.

Mr. Jekielek:
Another thing that’s important is that people are incentivized to act in bad faith.

Ms. Nikakhtar:
It’s really about how much you support the CCP and advance their interests. If you’re going to get permits for your business, if you’re going to get the permission to move to a city in a nicer city, if you’re going to get permission to get certain housing, if you’re going to get permission to send your kids to school. And if you’re sitting there minding your own business, you aren’t getting permission to go to those places. You have to be actively supporting the CCP’s agenda.

What is the CCP’s agenda? Let’s go back to that. It is to build its own power to dominate the rest of the world. That’s how they coerce control. And that’s why we should be very worried. They’ve weaponized an entire country against the United States and the rest of the world. And we should understand that for what it is.

Mr. Jekielek:
You’re originally from Iran. Tell me a little bit about your background. I’ve introduced you as one of the greatest tariff warriors. How did you get to understanding how these systems work so well?

Ms. Nikakhtar:
I was born in Iran before the revolution, I went to an American school, then the revolution happened. I started seeing my classroom segregated into girls vs. boys. The playground was segregated into girls vs. boys. It was taking my mother longer to get home from the university. She had to take side streets because the random Revolutionary Guard were stopping women on the highways to rape them.

Near my house, in Iran, we had a permanent amusement park, a fun fair. That was completely destroyed. The streets were littered. There were animals with pools of blood being slaughtered in cosmopolitan streets. There were burglaries in our house. As a six, seven-year-old kid, it felt like it was virtually every night. I think it was about like once a week.

My father was shooting the burglars from the balcony. Then you hear bombs going off at night at the same time. This is when you’re six and seven-years-old. You understand that something has changed. You see that your parents no longer have the freedoms that they did. You see that your school is no longer what it was and it has gone backwards. Those things stay with you.

From my vantage point, I cherish what democracy offers. I also understand how fragile it is. Most people tend to take democracy for granted. They say, if it exists today, of course it’s going to exist. No.

Mr. Jekielek:
Somehow you became a trade lawyer in the process.

Ms. Nikakhtar:
I remember when I was in college during the period of late 80s, early 90s, globalism was sweeping over the world. I was a French major and I was doing pre-med. I had no business in being in trade, never really thought about trade. But I remember people saying China’s the next best thing and it’s going to be the manufacturer of the world.

At that time, I remember thinking to myself repeatedly, I don’t understand how the United States can just be a country of lawyers and accountants. Don’t we need to manufacture something? Maybe organically, I gravitated towards these kinds of policies. Then I went to law school and I completed my graduate degree in economics.

I came to DC and I started working at the Commerce Department. And first I was at the Bureau of Industry and Security. And then I moved to the International Trade Administration. This is just after China joined the WTO. And we started seeing industries collapse one after the other. My boss at the time, wonderful man. He was a Chinese-born Taiwanese. And he really instilled in me, look at what is happening.

As soon as the floodgates opened for China, they just started dumping and decimating our industries. At that time, we looked away because we thought, oh, well, they’re just commodity industries. We don’t care about commodities. Well, where’s the revenue for R&D coming from? Every company leverages the sales of commodities to take the profits to fund R&D to always stay ahead. And if you cede that market to the Chinese, you don’t have R&D revenue to stay alive.

And so that’s how we started seeing the erosion of the steady erosion of the domestic industries. We just gave up goods that we thought we didn’t care about. And lo and behold, we realize now that we care about them. Having been in bilateral discussions with the Chinese where we said, you need to have your trade laws be transparent. It’s in a black box. We don’t understand what you’re doing. We’re transparent in every way we’re doing it, which means we give you, Chinese, a chance to defend yourselves. We have no ability for the U.S. companies to defend themselves in Chinese trade proceedings because we have no idea what you’re doing.

The Chinese didn’t care. They shrugged and they moved on. I used to audit Chinese companies for the U.S. government in these trade cases. Every single audit I ever conducted, the Chinese were withholding records from the U.S. government. And this isn’t a poor Chinese company trying to survive. This was a zero sum outcome, right? If they’re able to get away, the Chinese companies were able to get away with hiding numbers. That meant that they were maintaining access to the U.S. market that they shouldn’t have, which means that it was a hit against the domestic industry, right?

And so it was through this period of time that I really had a front seat to everything that China was doing to displace us. But then being on the inside in these companies and seeing how they’re lying and cheating to maintain market share to cripple our industries, that I really became an advocate of, we’ve got to correct these distortions and we’ve got to retaliate where we can, because if we don’t, we are allowing our industries, our economy to collapse. We cannot do that. If we value democracy, if we value the way of life, we have to fight to defend it.

Mr. Jekielek:
What is dumping?

Ms. Nikakhtar:
Dumping is a very interesting concept. And essentially, I’m going to be really broad here. It’s when a foreign country sells in the United States at a price lower than it would sell in its home markets. When you look at the universe of dumping cases we currently have against China and other countries, we see the same type of products. We have steel, we have aluminum, we have agriculture, we have chemical products kind of generally over and over again.

We don’t see much in the semiconductor space or the battery space. That isn’t because dumping isn’t happening, right? But we don’t see many of those cases because companies are worried about retaliation. So we’ve got dumping laws. They’re not great. They don’t really address all the problems. And then we have many instances where industry should be defending themselves against dumping, and they can’t because the Chinese are going to retaliate. Because through the dumping mechanisms that we have in the United States, the accuser has to face the accused and there’s no way to protect the accuser.

What would retaliation look like? Let’s say semiconductor company XYZ brings a dumping case against the Chinese, but also has exposure in the Chinese market. Maybe they export to the Chinese market. Maybe they have an R&D facility, a manufacturing facility. The Chinese government will shut it down immediately.

Mr. Jekielek:
Pretty simple. So you’re not bringing that dumping case because both outcomes are terrible, basically.

Ms. Nikakhtar:
Yes. If you bring a dumping case to engage in self-help, you’re completely shut out of the market. So we’ve got the dumping laws kind of going back to your core point, this notion that there just has to be a disparity between your home market selling price and the U.S. price for it to technically be dumping under WTO rules, basically says if any country can manufacture cheaper than the United States or any other country, then the United States just essentially doesn’t deserve to have that manufacturing industry. So there’s fundamental problems, I think, with the dumping laws.

Because if you’re in a higher cost economy, you’re not entitled to manufacturing. And then there’s another problem with the dumping laws is that beyond all this, industries are terrified, by and large, the vast majority are terrified of bringing cases because they have some exposure to China and the Chinese are going to retaliate. If we don’t do an complete overhaul and re-envisioning of what our dumping laws and processes need to look like, I’m very worried that we’re going to continue to have our industries collapse because the U.S. government isn’t giving the industries, the companies, the right tools to engage in self-help and ask the government for protection.

I don’t mean this willy-nilly protectionism. I think that term is misused and overused in the misused kind of way, but protecting vital assets we have because unfair trade distortions have weakened them and our laws are not adequate enough to fight back against those trade distortions that have weakened them. And our laws are not adequate enough to fight back against those trade distortions.

Mr. Jekielek:
Through your work, you’ve also become an expert in supply chains. There are some medical precursors today that are only manufactured in communist China. This creates a huge national security vulnerability, never mind dumping. It’s cost prohibitive to manufacture some of these things here. During the pandemic, they threatened to withhold some of these medical precursors. There are rare earth minerals that are actively being withheld. What is the biggest supply chain vulnerability that also has this national security dimension?

Ms. Nikakhtar:
This actually relates to the earlier question, which is how did China get these supply chains? By dumping, by underpricing. There was really good studies about how the Chinese cartel depressed global antibiotic prices to get everybody out of the market and then started, you know, raising the prices again. This is what they do. They underpriced to get everybody else out of the market so the Chinese can control that supply chain, and through that exercise of that control of the supply chain coerce the United States and the rest of the world.

Those two things are really related. The government fails to make a distinction between two types of supply chain vulnerabilities. Supply chain vulnerabilities that we know how to resolve. We have the IP, we have industries that can do it.

But the problem there is, and the government tends to dismiss that. Yeah, we could do it. We just chose not to do it. Uh-uh. Our supply chain vulnerability there, and it could be with active pharmaceutical ingredients. It can be with these industrial diamonds that we use in literally every single cutting tool. And the entire supply chain is in China because in the 2000s, China flooded the global markets and everybody flocked to China. With those industrial diamonds that go into every cutting tool and you can’t make any manufactured goods without them, yes, we have the IP to make it here, but it will take us three years.

So when that global supply chain is in China, and China cuts off our access tomorrow, we don’t have three years to sit and erect these new industries and build plants to produce this capacity. The government fails to recognize this and they tend to dismiss it. They say, we have the IP, we can do it when we need to. No, we can’t. We can’t do it when we need to. We need to plan ahead because we need X amount of lead time, so they’re missing the lead time gap.

Now, we have this other subset of supply chain vulnerabilities where we actually don’t have the IP. And we don’t have to just build up the facilities, but we have to develop the IP. That’s where critical minerals come in. And China has gotten control of the entire global minerals processing stages, right? Yes, the mineral, the mines are all around the world. China’s buying up a lot of them. So we’ve got to address that issue.

But on the processing, China controls the entire global processing of all 50 plus critical minerals. And nobody outside China has the IP to do that. And so the US is trying to, there’s a lot of good companies who’ve made a lot of progress in developing the IP to do this. You need different IP for every critical mineral, but they’re not getting investment dollars into developing and on-shoring that supply chain because the investors are saying, I’m not going to invest in this if China’s underpricing me. I’m not going to be able to make a profit. The government isn’t doing anything to protect the emergence of those industries by blocking the low-priced Chinese goods.

Everywhere we look, our policies are just mistake after mistake. We’ve really got to correct this. Government funding, the government is pouring a lot of money in industries that need to emerge. But I ask you, you build a plant and the Chinese underprice you. What are you going to do with your idle capacity in this plant? Our semiconductors companies are already losing market share to China. They already have idle capacity. We’re going to build new plants to do what exactly when the government isn’t imposing import restrictions on the Chinese stuff that’s undercut? It is the same with batteries and critical minerals.

We’ve got to get smart about our policy. We can’t just continue to throw money at the problem. If you want to throw money at the problem, fine, but you’ve got to keep the low-priced stuff from undercutting our businesses.
And that’s what the government has been failing to do thus far. And that’s going back to your first question. That’s what President Trump is talking about in terms of tariffs.

Mr. Jekielek:
This is an opportunity for the creative use of tariffs. Let’s talk about these rare earth minerals that China is actively preventing from the U.S. having access to right now. There are three of them, I believe.

Ms. Nikakhtar:
Yes, gallium, germanium, and antimony. The trade war with China started decades ago. But let’s say most people consider it as the last eight years, right? So over the last eight years, this trade war with China, nobody’s really taken China seriously in terms of they’re going to retaliate at us. We got to get our supply chain act together, guys, because China’s going to retaliate at us. Nobody has taken China seriously because China has generally threatened to retaliate, but it’s never really retaliated. We underestimated they’re never going to impose export controls on the things that we need. Of course, China did.

China sent a warning shot with Gallium and germanium. I predicted that China was going to impose export controls on gallium and germanium in October 2021. All I needed to do was look at export statistics and look at who is producing what in order to say China knows semiconductors are important to the United States. It controls gallium and germanium. Gallium and germanium are minerals used in substrates of very advanced semiconductors.

Of course, China is going to attempt to hurt us by withholding those exports, and they eventually did. They also did it with antimony. We are having a hard time in the United States producing ammunition. And antimony goes into lead batteries, right? And China has straight banned the exports. Our export control rules are pretty porous. There’s still avenues to get things to China. China’s export controls against the United States are black and white. They are not exporting things to the United States.

And the Chinese government has made clear to other countries, if you dare export to the United States, I’m retaliating against you too. So it’s made very clear that it’s banning this. So without antimony, we’re not making ammunition. Without antimony, we’re not making lead batteries, right? And now they’ve threatened the export controls on graphite, which we need for batteries and a number of other items. The other thing I alluded to earlier was these industrial diamonds, right? China flooded the global markets with cheap industrial diamonds.
Manufacturers flocked to China. The supply chain has since been consolidated into state-owned enterprises [SOEs] in China. Every single advanced manufacturing, which is 90-plus percent of manufacturing that happens in the U.S. and globally today, uses these industrial diamonds that you need for cutting tools. China has a supply chain there. China’s been tinkering around with export volumes, flooding the global markets and restricting it, restricting exports over the last couple of years just to see how the world is reacting.

China just imposed export controls on the presses to make these industrial diamonds. China is preparing to ban exports of industrial diamonds to the United States. Once it happens, we cannot manufacture anything in the United States. And I want to underscore that one more time. With export bans, they’ve already banned the presses. Now we can’t buy the presses to make the industrial diamonds. Now if China bans the exports of the industrial diamonds and the cubic boron nitride to the United States, all U.S. manufacturing stops. We have no stockpiles, and the volume we have in the United States is going to run out in about a month.

Imagine a U.S. economy with zero manufacturing. And yet, the U.S. has not done anything about it. We haven’t stockpiled. We haven’t invested in manufacturing. We’re still walking around with our heads in the sand. It’s just time to wake up. China has made clear that it is moving in this direction. We’ve got to take them at their word. We’re already hurting through the export controls they’ve already imposed. They’re going to ratchet this up.

Mr. Jekielek:
There is a precedent with these three rare earth minerals. But zero manufacturing, that’s a very extreme statement.

Ms. Nikakhtar:
60 percent of semiconductor manufacturing steps use these industrial diamonds and the cutting tools the wafer and the polishing tools battery manufacturing aerospace and defense manufacturing anything that uses cutting you need these tools and so so the Department of Defense is well aware of this. Because this is so upstream, manufacturers generally just buy the tools. They don’t really think about where their supply chains are. But the tool manufacturers who rely on these supply chains are very aware of this. I wrote an op-ed in January of last year flagging that, guys, this was going to happen. Again, my prediction was right. I got a number of emails, I think at least a couple hundred emails from folks in the U.S. government saying, thank you for tracking. We weren’t aware of this, right? And I commend those people, but we still haven’t done anything to fix it.

Consider this. The Chinese government has been subsidizing the exports of the illicit variant of fentanyl, the deadly variant, not the medicinal kind, but the deadly strain of fentanyl into the United States. Again, the House Select Committee on the CCP has done great reports on it. The government is subsidizing companies to export deadly poison to the United States. And that’s not even the precursors now that we’ve talked about. Yeah. So it’s super fascinating how this has evolved.

The Chinese have been exporting fentanyl to the United States for a number of years now. We’re losing 200 to 300-plus individuals every day. Over the last few years, there have been 400,000-plus individuals. We’ve lost 3,000 on 9/11. We’ve lost more than 9/11, yet somehow we still don’t think of China as an adversary, right? We told the Chinese government, so you’ve got to stop the exports of finished fentanyl to the United States. And the Chinese government effectively did that.

But what did it allow to happen? Then it started allowing the exports of the precursors to happen to go into the United States, right? And between 2019 and 2024, China, begging China, please stop the exports of illicit fentanyl precursors to the United States through Mexico or whatever means. Finally, the Chinese said in July 2024, I will stop the exports of three, not the hundreds of analog, just the exports of three. The U.S. government says, wow, victory, great pat on the back. We got the finished fentanyl banned.
Remember, China can ban it because it banned the exports of finished fentanyl into the United States. China agreed to ban three precursors, right? But then we have the Mexican cartels now start infighting for power or whatever their issues are. Because of the infighting, it slowed the Chinese channels of distribution to the United States, the distribution of illicit fentanyl. So the Chinese have now gone back on their promise and have started exporting finished fentanyl to the United States again. I give you intent right there.

Further to the point of intent, the Chinese government has been very adept at preventing the exports of gallium and germanium and antimony to the United States. They haven’t just banned the export. They’ve told every country around the world, if you dare export to the United States, I’m coming after you too. So they have demonstrated, and through the export ban on finished fentanyl, that they can absolutely control export.

They are a surveillance state. They shut down any website that sells fentanyl inside the country. They can’t do it outside. But anyway, this is not hyperbole. This is not hysteria. I am laying out facts so your audience can make those decisions for themselves. But these are the facts and you’ve got to take the facts for what they are.

Mr. Jekielek:
You’re telling me that Communist China today is exporting the illicit variant of fentanyl into the United States fully formed. How do we know this?

Ms. Nikakhtar:
The US government has mentioned this to families of victims that have been lost because of fentanyl, they periodically give them briefings and they’ve been relaying that to the affected families. I myself and my colleagues, we filed a petition with the U.S. government on retaliating against China because of its exports of fentanyl, essentially all types of fentanyl to the United States. And we are going to continue to pursue that so the U.S. government can take retaliatory action against China until it stops.

Mr. Jekielek:
Is there any sense of the volume of this?

Ms. Nikakhtar:
It’s really hard to tell. I have spoken to numerous U.S. government drug enforcement exports. It’s really hard to tell. They think that they’re maybe at best catching 5% of the exports, but it’s really incredibly hard to tell exactly how much it’s coming to the United States. We do know that we have 200, 300 plus people dying every single day. Now, people tend to dismiss this because they’re drug addicts.

There’s a subset of the group that has died because they’ve never been drug addicts. They just took medicine that unbeknownst to them was laced with fentanyl. And then there’s a different class of groups. And maybe they use drugs to self-medicate. And I don’t care what category these people are in, whether they’re self-medicating or whether they’re accidental users. The Chinese have no right to start killing American citizens.

Mr. Jekielek:
That is a very important point. Peter Schweizer, in his book, has demonstrated that the pill presses come from communist China. The money laundering operations are managed by communist China. The ports are often managed by communist China. What is our reaction?

Ms. Nikakhtar:
I had mentioned a little bit earlier that the U.S., we have this very credible law that allows us to retaliate against foreign countries for harmful trade
practices. China is exporting illicit fentanyl to the United States and killing Americans. That is a harmful trade practice. So what can our retaliation look like? Under U.S. laws, we can retaliate against China in any way by depriving it from the trade benefits that it is entitled to under the World Trade Organization rules.

So we can impose tariffs on it. We can discriminate against their goods, et cetera. I think one smart way that the U.S. government should approach this is apply broad tariffs on Chinese goods and take that revenue that we’ve collected from tariffs and direct it to the states to help them offset the enormous costs that they’ve been incurring to educate the public on fentanyl and treat fentanyl victims. Then the federal government will take some of that money for its own efforts, too.

But the notion that we shouldn’t hit back against China for killing 300-plus Americans every day is just mind boggling. We should be outraged. We should be doing everything we can to retaliate, and we have the laws to retaliate. Our inaction is our fault.

Mr. Jekielek:
President Trump has talked about universal tariffs. You’re talking about a universal tariff here, at least with respect to China.

Ms. Nikakhtar:
With respect to China, the thing that drives the Chinese government is money. Money equals power. Money allows you to build your military. It allows you to do all this bad stuff. So that’s how they respond. We have to ratchet up the tariffs so that China feels the pain in order to stop the exports of illicit fentanyl. And if it stops the exports of illicit fentanyl and it moves to something else, we now have a blueprint of how to respond to China.

But we have to show courage to keep doing this until China stops its bad actions, right? That’s what the laws are. You ratchet up the pain until the foreign actor stops. I also hear this notion of, well, why are we going to have price increases because of tariffs. What’s very, really interesting about China is that, remember, it goes back to the Chinese companies having to work on behalf of the government.

What I found in 25 years experience doing trade with China, is that Chinese companies tend to absorb tariffs. Very sector by sector, but up to high double digit levels or triple digit levels, they will actually absorb the tariffs. The reason that they will absorb the tariffs is they don’t want to displace themselves from the U.S. market. If their prices get too high, the U.S. manufacturers are going to get in the game. Other foreign manufacturers are going to get in the game and displace them.

So they will take the pain for as long as they can until they can’t anymore, and then they’ll exit the U.S. market and flood the other global markets to collapse prices. So the Chinese, again, tend to not pass through the tariffs to increase consumer prices, which means our retaliatory tariffs can be effective. We impose tariffs and ratchet it up to make the Chinese companies feel the pain.

Mr. Jekielek:
Whoever is implementing this could do it incrementally and just see. You don’t have to do it all at once. You can see the reaction. You can test your theory, test your hypothesis.

Ms. Nikakhtar:
Yes, and under the laws, we can ratchet up tariffs because of fentanyl up to the level of harm that the Chinese have imposed on the United States. And so there are estimates, very conservative estimates, that the economic harm to the United States because of China’s exports of illicit fentanyl to the United States has been $1 trillion annually. Think about it, right? We don’t have to impose tariffs up to a trillion dollars, but we could slowly start ratcheting up and we have a high ceiling to get to until there’s enough pain.

Mr. Jekielek:
Based on your experience, your expectation is that at least for some considerable amount of increase, that wouldn’t actually impact the U.S.
citizen or consumer.

Ms. Nikakhtar:
No, it hasn’t. Even when you look at the Section 301 tariffs that have been imposed, the Chinese have not ceded the market. The Section 301 tariffs were imposed in 2018 on China because of China’s IP theft. When you still look at the import statistics, those Chinese goods are still coming in.

And in many instances, they’ve dropped the prices to help the importers offset the tariffs that they’re paying on the imports by now getting the goods cheaper.The Chinese are working to preserve their access to the U.S. market. We’ve seen through those tariffs that we’ve already imposed. The Chinese haven’t ceded the market.

The bipartisan quasi-government body, the International Trade Commission, has already done a study that the tariffs we’ve already imposed on China of 25% because of IP theft hasn’t had any impact on the U.S. economy. There’s been other studies that have concluded the same.
The point is, we have all of this empirical data that shows that China’s been absorbing the tariffs, so let’s throw more tariffs on them to make them really feel the pain. You do not get away with killing Americans and not have to endure the pain of us responding to what you’re doing

Mr. Jekielek:
Let’s go back to the rare earth minerals. You’re basically saying that China’s cornered the market on processing. What doesn’t include rare earths today? They are in all types of manufacturing.

Ms. Nikakhtar:
Yes. Manufacturing equipment uses rare earth minerals. It’s the alloying agent for the steel and the metals used in electronics, semiconductors, batteries, everything. I would probably say 95% of manufactured goods have some rare earths in them or have rare earths involved in the manufacturing process.

Going back to your global tariffs question, if President Trump imposed tariffs on anything containing Chinese critical minerals to one, allow our industries to grow, give our investors confidence to invest in this industry, because the U.S. government will protect the value of the investments through tariffs. Through global tariffs, you’re able to achieve an ex-China market.

Now, other entrants on the market are going to say, wait a second, if manufacturers who are using processed rare earths cannot sell to the United States because the U.S. isn’t accepting goods or is tariffing goods that use Chinese rare earths, I’m going to make processed rare earths because now I can get into the market. The manufacturers are going to be looking for an ex-China supply chain, and I’m going to provide that ex-China supply chain.

We know that most of those investments have been taking place in the United States. So it’s going to favor the United States, but it doesn’t have to be so. Other countries can get in the game. I think it’s a really neat way to impose tariffs to solve our national security concerns, and really remove our supply chains from dependence on China. There’s a number, as you’ve noted, supply chain dependencies on China.

Right now, the U.S. government strategy has only been to throw money at the problem. But we see that these industries aren’t getting up and running because the investors aren’t coming in to support what the government’s doing because of fear of China undercutting. But if we stop the Chinese prices undercutting our industries, our industries can grow. The only way to do that is with tariffs.

Mr. Jekielek:
This is something relatively simple to do and simple to test. It doesn’t strike me as requiring a lot of complex mechanisms.

Ms. Nikakhtar:
Right. To me, the laws are there to do it. The laws provide us justification to do it. The Chinese are going to absorb the tariffs anyway, so we’re not going to have increased consumer goods. And we rebuilt the domestic industry. I think the government hasn’t connected these dots yet.

Mr. Jekielek:
This is an unusually nice way to react against highly weaponized trade practices.

Ms. Nikakhtar:
I’m so glad you used the word nice, because when I was in the government, I led bilateral delegations to talk to other countries about buying U.S. products, etc. What I noticed was the U.S. is the only country in the world that doesn’t advocate for its industries. Every single government of every country I’ve ever encountered, right, fights tooth and nail to protect their industries, whether it’s digital service taxes, whether it’s protectionist standards that prevent fair competition in their market,
whatever it is, they fight tooth and nail for their industries.

And we’re nice. We think that protecting our industries is a bad thing. On what planet, no other 200, almost 200 countries in the world, thinks that protecting their industry is a bad thing. How we have concluded that protecting industries is a bad thing, why the word protectionist is a bad thing, again, defies logic. We can still be nice and protect vital industries that we need, protect vital jobs that we need to keep the economy running.

Mr. Jekielek:
It also works for the benefit of other countries when we do that.

Ms. Nikakhtar:
That’s a great point because all our allies need us to have critical mineral supply chains because of the industrial diamond supply chains because they too are dependent on China and without the critical minerals and without the industrial diamonds guess what we europe japan what? We, Europe, Japan, South Korea, we all have one strike military capabilities. We aren’t making more weapons without those supply chains. So our allies stand to benefit enormously from us protecting and growing these vital supply chains that they in turn can rely on.

Mr. Jekielek:
What about one strike military capabilities?

Ms. Nikakhtar:
We won’t be able to make more weapons. It’s that simple. There is only one strike. We have the weapons arsenal we have. Without the supply chains from China, we cannot make more weapons. Look at Russia’s invasion of Ukraine and what’s happening in the Middle East with Israel. I don’t want to get into whether it’s right or not to supply weapons. Great people have different perspectives on this.

But the notion that we’re on our military stockpile drawdown and we have zero ability to make more weapons without supply chains from China should be alarming to every person in the Department of Defense, every prime and every single American citizen. And I never hear that talked about. So, yes, and our vulnerabilities are our allies’ vulnerabilities, because when the supply chain is only in China, we’re all equally as vulnerable.

Mr. Jekielek:
There have been deep levels of subversion and infiltration into Canada by the Chinese regime, even beyond what is here in the US. What you said applies 150 percent.

Ms. Nikakhtar:
You are talking about the Chinese growth and influence in Canada. I was looking at an investment in the United States in a steel plant, and looking as to the dynamics that was happening here, I traced it to a United Front organization that was heavily involved in paramilitary activities in PLA uniform in Canada. That brings together two things. The fact that it’s happening in Canada with the PLA United Fund infiltration is almost certainly happening in the United States.

Where is CFIUS [The Committee on Foreign Investment in the United States] that looks at investments for national security? Where are they? We have the United Front setting up organizations and running organizations in the United States within our own borders that are going to hollow out our industries and create all sorts of other problems. The U.S. laws are completely inadequate to address these problems.

Mr. Jekielek:
There is an element of greed. They offer these huge financial benefits to people who are in a position to enact very pro-CCP policies and enrich themselves in the process. That has been part of the problem.

Ms. Nikakhtar:
This is part of the gaslighting. The message has been that this has been enriching America. But here’s an alternative theory for you. About seven years ago, I was defending Trump’s tariffs on steel and aluminum, and a gentleman in the front row in the audience asked, do you know how much the Trump tariffs are costing the average American family? I said, do you know how much China’s unfair trade practices are harming American households such that mothers and fathers now have to work three, four, five jobs to have enough money to put food on the table?

The reason I was saying that, it’s actually the opposite of American greed. The Chinese have made us poor because of their low cost economic structure. Because we are now competing against China’s low cost economic structure, we’ve lowered prices as much as we humanly can to be able to compete and wages have gone down. If I would really invite anybody to do this empirical study, where if you look at any sector where we’re competing head to head in China, we’ve actually had wage suppression and probably wage depression, meaning wages are not growing as high as they should and or have declined because of competition with China. It’s actually just the opposite.

I think that America would be much more prosperous and we would be making much more money if it weren’t for what we have ultimately built China to be. I would also posit this. A lot of people say that China has given us an improved lifestyle. I would encourage anybody who’s old enough to recall, 25 years ago, before China’s entry into the WTO, the U.S. was stronger economically and militarily on the global stage than it is today, because of what we’ve built China into becoming.

As a student, I was on student loans. I had no money. I was still able to go to a low-cost store and furnish my apartment. I was still able to get a laptop. I was still able to function. We were all able to function, right? So this notion that we need China for our gains, we were already prosperous 25 years ago. Again, I would argue much more economically prosperous and militarily strong than we are today because of China’s growth. China has actually made us poorer and weaker than the rivers.

Mr. Jekielek:
When I’m talking about greed, too, it could just be a small subset that benefits financially.

Ms. Nikakhtar:
That’s right. It is a select few companies who have decided to offshore to China, reaping the profits from selling in the U.S. based on prevailing U.S. prices, but benefiting from China’s low-cost structure. It’s those select corporations that have been profiting. But the other problem I have with that, too, is I don’t think corporations are understanding what they’re doing. China’s a non-market economy. The government we talked about, those bends and distorts the economy to gain the upper advantage, right?

We’re market economies. The more companies rely on China’s low-cost production to flood the global market with cheap goods that are based on non-market economy prices, the more we’re pushing out non-market economy principles to the rest of the world. And we’re accelerating the demise of the market-based system. And we’re accelerating the demise of capitalism. Companies don’t understand that that is what they’re inadvertently doing by increasing China’s size of the global manufacturing economic pie.

Mr. Jekielek:
Before you entered this whole world, you were wondering to yourself, does it really make sense to have an economy based on services and have the manufacturing be somewhere else? We’ve learned the hard way that is a bad idea. But maybe it’s not obvious to someone out there. Why is that the case?

Adam Smith, the father of free trade, essentially said that every country needs to build defense articles at home, that it needs to defend the homeland. We’ve always known that items that are critical for national defense, you need to manufacture at home. For some reason, we completely lost sight of that. In order to be able to have ingenuity in order to have innovation you need close proximity and next-gen goods and mature established goods.

There’s this debate of how close innovation and manufacturing need to be. In new developments you have to have close proximity to manufacturing and innovation. How do you design a house if you’ve never built a house before? So we need manufacturing if we’re going to have innovation. And we need to have both if we’re going to have a defense sector that is going to support and defend the United States. More and more now, the innovations are coming from the commercial sector that goes into defense. So they’re all interconnected.

But unless you have a healthy, vibrant defense sector, you’re not going to be able to defend the country. And a lot of those innovations, again, come from the commercial sector. The other thing is, since we were talking about Adam Smith, I think the other thing I wanted to really underscore is this Adam Smith’s, you know, people talk about free trade in terms of, well, we need to embrace China because of free trade.

But that wasn’t the premise of Adam Smith’s model. When Adam Smith had the comparative advantage model, what was the premise of that model? That premise was all market economies. When all market economies are working together and trading with each other, then the market, it’s the market who determines, that allocates the distribution of who manufactures what. If you bring a non-market actor into that model, it pulls the center of gravity towards itself, because again, it bends and pulls the levers of the economy to favor itself. And so it disrupts the comparative advantage model. Even Adam Smith understood the premise of everything he talked about was market forces. It’s for that reason, too, that you can’t bring a non-market force into the mix. It disrupts the model. There was a lot of truth in what Adam Smith was doing.

We just took from it the variations that we did. Even the variations weren’t true to what Adam Smith was talking about. We used that to get greedy, to your other point. Beyond that, we’ve weakened the U.S. and global military. We’ve weakened the workforce. I would argue that we’re much poorer than we should be because China has pulled that away from us—the money, the capital, and the innovation.

Mr. Jekielek:
The Chinese regime has been very strategic about investing in America, like buying land right beside U.S. military bases. But there’s a lot more than that, so what does that look like?

Ms. Nikakhtar:
For the Chinese, the access to the U.S. market in terms of investing is really important because, one, very superficially, you invest in the United States, you can dump from within our own borders right and or
you can sell cheaply because of subsidies and we can’t protect our industries from china from when they’re within our own borders right so that’s one of the obvious reasons why they’re doing it but then when you invest in the united states and you’re actually manufacturing here you have you can impose incredible upstream and downstream supply chain impacts by your purchasing and your selling pattern.

You can influence the whole ecosystem around you and disrupt that. You can connect to the energy grid, right? By connecting to the energy grid and your energy infrastructure, now you can better infuse malicious code into the energy grid. You’re now connecting to the telecommunications infrastructure and causing harm that way. And if anybody thinks that a Chinese company in the U.S. isn’t going to do that, remember the Chinese government is going to ask them to do that if it hasn’t done so already.

I find it stunning that our committee, the Committee on Foreign Investment in the U.S., our laws still fall short of addressing all of those threats. The Chinese can very easily invest in land that’s not in close proximity to a military base to inflict all of this harm. And so long as it’s a greenfield investment, legally, there’s no, the U.S. government can’t review it. And there’s been a lot of calls in terms of prohibiting Chinese investments of farmland in the United States.

The Fufeng corporation which is part of the CCP, and which is extensively involved in forced labor, bought 370 acres of land near the Grand Forks Air Force Base when it wasn’t designated as a military installation that the U.S. government was concerned about for CFIUS purposes. So it was able to buy this land without CFIUS review. North Dakota had a law at that time that prohibited the Chinese from buying farmland in the state.

It’s not like we needed new laws to prevent China’s acquisition of farmland. North Dakota had that law, but it rezoned the area so that the Chinese could buy that land. So Congress’s calls for banning Chinese acquisition of U.S. farmland fall short, because they don’t realize that land can be rezoned. It really should be all greenfield investments.

Mr. Jekielek:
What do you mean by greenfield investments?

Ms. Nikakhtar:
It’s just buying land and building on the land rather than buying an existing business. The sophistication extends to acquisition of an existing U.S. business by a foreign actor or buying land if it’s in close proximity to military installations or certain designated military installations or certain, you know, U.S. ports, right, infrastructure. We have this whole big landscape of things that there’s just buying land, even if it’s not near a military base that the U.S. government legally cannot review.

Now, Congress made the best effort they could in 2018 to modernize the rules to even extend CFIUS jurisdiction to land acquisitions near military bases near ports. But they still couldn’t get agreement to extend CFIUS jurisdiction to all this other greenfield investment. But wait, the president has the International Emergency Economic Powers Act. It is a president’s ability, it’s a law that enables the president in peacetime to act to protect national security interests in the United States.

Why no president has invoked IEPA to protect our greenfield investments from foreign adversary purchases and investments is beyond me. There’s no doubt in my mind that we need to extend CFIUS jurisdiction to greenfield investments by foreign actors. The Chinese are completely taking advantage of it right now to build solar plants, to build battery plants, to build steel plants in the United States. The U.S. government cannot do anything illegally about it. And it takes one swipe of a pen through one executive order to solve that. And nobody’s done that yet.

Mr. Jekielek:
China owns a significant portion of pork production in the U.S., but they’re employing lots of Americans.

Ms. Nikakhtar:
There is absolutely no reason where you can’t have pork production right by any other entity that is not Chinese in the United States. If there is demand for it in the United States, that means that there’s going to be revenue to be made and somebody would be involved in that sector. Right. It’s not that if the Chinese aren’t there, we’re not going to have jobs. Somebody else can come in and we’ll have the same jobs or we’ll have other types of jobs.

But think about the Chinese-owned pork production in the United States, and their ability to introduce pathogens into our food supply chain and pathogens that may even have a latent effect. They won’t kill all of us until we ingest it for a couple of weeks. And there won’t be the medicine to cure this. The whole role of national security isn’t to respond to the emergency at hand, but to project what those risks may be to guard against it. In a way, you are looking into a crystal ball and saying, what are all the harms that can happen.

If it’s the French acquiring pork manufacturing here , the French generally are friends. We may have trade spats, but they’re not trying to kill us. With China we’ve got COVID and fentanyl, and we don’t think that they’re going to weaponize Smithfield? If they haven’t done even more egregious things than killing 300-plus Americans through fentanyl every day, it’s just a matter of waiting.

We have to engage in more self-help. I am enormously concerned because there’s so many things that we’re vulnerable about. And the U.S. government hasn’t taken adequate measures, protected and hasn’t been frank with the American people, has not leveled with them as to what the threats are.

Mr. Jekielek:
You’ve offered a few really good ideas. Can you give me a picture of what needs to happen and summarize it?

Ms. Nikakhtar:
First and foremost, we have to rebuild our supply chains, right? We need to start implementing tariffs and ratcheting them up, commensurate with the growth of the domestic industry. Where we don’t have a domestic industry, it would be kind of nonsensical to have 100% tariffs, right? Because we’re just shooting ourselves in the foot. But start low so the domestic investors know to invest and slowly start ratcheting up those tariffs, commensurate with domestic industry growth.

So we keep the low-priced Chinese goods from further eroding our manufacturing base as we build them. That’s one. Two, tech transfer to China. If the Chinese government is having those entities who are acquiring technology from the United States to then turn around and give that technology to the CCP, we shouldn’t be licensing any sensitive technology to China because we know it’s going to end up in the CCP and the People’s Liberation Army’s hands. Those two things we need to do.

Will China retaliate? Absolutely. And what I say is bring it on. Because China, if you want to retaliate, we still have the power of the U.S. dollar and we still have the power of sanctions. So if you threaten to retaliate, yes, we are going to sanction you until you lift those retaliations so we can rebuild at home. And I don’t know how long we’re going to have the power of U.S. sanctions to kind of protect our interests, but we should use it for as long as we have before we lose it to help us rebuild. If we do not rebuild, game over. Game is about to be over because we have not rebuilt.

I don’t know how much time we have left, but China has shown us through its expert controls that it’s ready to pounce, right? Time is limited. We’ve got to get our act together. And this is, you know, just a few steps. We can do a lot, but it requires somebody to have the courage and have the foresight to put these pieces together to really be able to protect America, American military, American economy, American interests. Because if we’re not strong, we can’t protect the rest of the world.

Mr. Jekielek:
What is the risk in doing this? Because I know you calculate this in your thinking.

Ms. Nikakhtar:
I don’t see a risk. I think the only risk is the pushback by the American people. And you can easily resolve that by a leader getting on TV and leveling with the American people, right? A trusted leader who says,
this is what’s happening. I’m not going to try to influence you. I’m just giving you data, just information. Decide on your own. But the U.S. government’s estimation is this is what’s happening and we need to act. Look at what Director Wray did with TikTok.

A couple of years ago, most politicians weren’t really keen on banning TikTok. Director Wray went in over and over and over again in a really admirable, unrelenting way and advised Congress of what the risks from TikTok are. Finally, the majority of Congress voted against their constituents’ interests, against lobbying interests, to ban TikTok, right? Education is power, right? Education is what helps drive the American public to be informed to do what’s right for America, to vote those politicians in.

The greatest disservice right now from the political elites in Washington is we’ve kept the American public in the dark. We need to shed light on the problem. We need to level with them. And we’ll say, you know, we’re going to go through some rough times, but we’re going to have to go through rough times to come out ahead because right now we’re going to enjoy the little bit of greed, that greediness that we have left, but it’s all going to go away. So we’re going to have to band together and do some difficult things in the short term to make America strong once again.

Mr. Jekielek:
I believe transparency is needed and you’re advocating for that here. We don’t want to show the Chinese regime all of our cards. They try to hide all of their cards. Shouldn’t we do that as well? But transparency is very important at this time in our history. There’s a lot of doubt that the government has the best interests of Americans in mind. Some transparency would probably go a long way in resolving that. What do you think?

Ms. Nikakhtar:
Transparency isn’t necessarily classified information and strategy. Our laws are public. The Chinese know the arsenal of tools we have available. They may not know when we’re going to invoke them, but they know generally. They go to American law schools. They know the tools we have. The transparency with the American public is to really lay out the threats.

This is a genocidal regime. There’s live organ harvesting. There’s torture. They’re actively killing Americans through the exports of fentanyl, right? They were suppressing the evidence of COVID. They’re helping Russia kill Ukrainians. They’re helping the Iranian regime do all of the bad stuff it’s doing. This is, and they’re terrorizing and antagonizing our allies like Taiwan and the Philippines.

The U.S. government can easily go through the Chinese communist papers that are talking about harming the United States. The U.S. government can point to the Chinese propaganda within China about harming the United States and lay this out for the American public and also lay out for the American public what our supply chain vulnerabilities are, because the Chinese know our vulnerabilities better than we do because they’re using our vulnerabilities through their export controls.

Even academic scholars don’t understand our supply chain vulnerability. They say, I either hear, well, we have the strongest military in the world. Of course, we’re going to fix that. Well, our military can’t build things without China, so we’ve got a problem there. Or this notion that, well, I’m sure the U.S. government has thought of it.

No, I was in the U.S. government and I was in charge of supply chains. And I will tell you, the U.S. government doesn’t know this. And the reason that we need both steps now is because we ignored the problem for at least two decades. If we were getting our act together in 2000, we wouldn’t have to, you know, race against time to solve it. But we are out of time, we have to really race to solve it, which is why we need drastic measures than we previously would have.

Mr. Jekielek:
Nazak Nikakhtar, it’s such a pleasure to have you on the show.

Ms. Nikakhtar:
Thank you for having me. I enjoyed our discussion very much.