Gerstner says we're entering a global AI cold war on the economic front, which he doesn't celebrate.
“So I don't celebrate that we're entering what appears to be a global AI cold war Yeah. On the economic front.”
Gerstner quotes Buffett saying free and fair trade has been the most powerful engine for prosperity for fifty years.
“Just this weekend, he said, free and fair trade, right, has been the most powerful engine for prosperity on a global basis and this country for the last fifty years.”
Gerstner recalculates tariffs at $300 billion under new framework versus $77 billion last year.
“And if you put China at 30% on strategic, at 15% on nonstrategic, and the rest of the world roughly at 10%, you come up with about 300,000,000,000 in tariffs.”
Gerstner proposes trading AI chip access to China for rare earth materials access.
“On point three, it gets us right? If we do this trade, and I don't know that China would do this trade, but if we did this trade, then it would get us access to those rare earths right now, which is absolutely critical, and it buys us time to stand up our own rare earth supply.”
Gerstner predicts a major US-China deal will be completed before end of 2025.
“I think that there's gonna be a big Chinese deal done before the year's out.”
Gerstner forecasts major China deal after Trump visit planned for September through November timeframe.
“They've invited the president to China. The president has suggested he's going to go to China the first week of September, sometime between September and November.”
Gerstner predicts Trump will pursue the biggest-ever China deal, calling himself a deal junkie at AI summit.
“He said at the AI summit last week, I'm a deal junkie. I like to do deals. You can't be the biggest deal maker in the world without doing a big deal with China.”
Gerstner observes import prices rising slower than domestic goods, opposite of expected tariff impact.
“Import prices have been going up at a slower rate than domestically produced goods. Okay, so this is the exact opposite of what you would have expected from tariffs.”
Gerstner predicts president wants biggest-ever China deal and is not ideologically rigid on China.
“I think this president wants to do the biggest deal ever done with China. I don't think he's dogmatic at all. I don't think he's some big China hawk.”
Gerstner notes US is only 14% of China's exports and 3% of China's GDP.
“The US only represents about 14% of China's exports. The US only represents about 3% of China's GDP.”