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FAREED ZAKARIA GPS

Kim Goes to China; The Tit-for-Tat Between Moscow and the West; China Versus America, Whose Model is Winning?; Aired 10-11a ET

Aired April 1, 2018 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[10:00:12] FAREED ZAKARIA, CNN HOST: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

(BEGIN VIDEOTAPE)

ZAKARIA: On today's show, kicked out.

THERESA MAY, BRITISH PRIME MINISTER: This is the largest collective expulsion of Russian intelligence officers in history.

ZAKARIA: More than 20 nations have expelled Russian diplomats, including the United States which gave the boot to the largest number of Russian envoys since the Cold war.

But is this the right strategy with Moscow?

And Kim comes out of North Korea. What to make of the leader's trip this week to China. And his recent charm offensive. I have a great panel to discuss it all.

And --

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We've got the greatest economy maybe ever.

ZAKARIA: Is he right? And could it all be jeopardized by a trade war? I'll ask Steve Rattner and Rana Faroohar.

Also, the other technology revolution that the world needs to pay attention to. How getting hundreds of millions of people online in India is changing that nation and might change the world.

(END VIDEOTAPE)

ZAKARIA: But first, here's "My Take." In order to explain some of President Trump's bizarre foreign policy moves, we're often told that he is unconventional and that this could well be an asset. Well, it's certainly true he doesn't follow standard operating procedure on almost anything from getting daily briefings to staffing the State Department. But his most striking departure from previous presidents has been his rhetoric.

American presidents have tended to weigh their words carefully, believing that they must preserve the credibility of the world's leading power. And then there is Donald Trump for whom words are weightless. During the campaign, he excoriated Saudi Arabia as a country that wants women as slaves and to kill gays only to make his first presidential trip abroad to the kingdom and warmly embrace its rulers. He said NATO was obsolete and then simply affirmed the opposite.

There are situations where such flexibility might work. On North Korea Trump threatened to rain fire and fury on the country, only now to welcome a meeting with its leader. Trump supporters say this is just the kind of maneuvering that could well produce a deal that has eluded more conventional approaches to the problem.

We should all hope that it will. So far though it's worth noting that the circus-like atmosphere of Trump's alternating threats and embraces has obscured a key point. It is Trump who has made the concessions, not Kim Jong-un.

The American position has long been that until North Korea took some concrete steps toward denuclearization, there would be no talks. Until recently the Trump administration itself insisted that it would not reward the nuclear buildup with negotiations.

Now there's a good argument to be flexible on this procedural issue, but we should be aware that so far Kim Jong-un seems to be executing a smart strategy brilliantly. He embarked on a fast track buildup, creating a genuine nuclear arsenal with missiles that can deliver the weapons around the world. He risked tensions with the world and even his relations with China.

Now with the arsenal built, he's mending relations with China, reaching out to South Korea and offering to negotiate with Washington.

Trump's skill here might well be his willingness to abandon totally a passive position and fully endorse a new one. The United States after all will have to accept something less than its long declared goal, the complete denuclearization of North Korea, and maybe Trump will be able to find some way to sell this.

There is, however, a different kind of tough talk that is more worrying. The Trump administration pushes hard on some issues, trade with South Korea for example, then announces a deal claiming to have won significant concessions. In fact, most of these have been symbolic concessions made by allies to allow the administration to save face.

South Korea, for example, agreed to raise the number of cars each American auto manufacturer can sell in the country from 25,000 to 50,000. It's an easy concession to make. No American company sold even 11,000 cars there last year.

See, America remains a super power. Its allies search for ways to accommodate it. The Trump administration can keep making outlandish demands and it will obtain some concessions because no one wants an open breach with the United States. If Trump says the Europeans have to come up with some changes to the Iran deal, maybe they will find some way to do so because they don't want to see the deal collapse and they don't want to see the West fall into disarray.

This is not a sign of power but rather the abuse of power.

[10:05:02] When the Bush administration forced a series of countries to support the Iraq war, this did not signal American strength, it actually sapped that strength. The United States has built up its credibility and political capital over the last century. The Trump administration is raiding that trust fund for short-term political advantages and in ways that will permanently deplete it.

For more, go to CNN.com/fareed and read my "Washington Post" column this week. And let's get started.

On Monday, an old-fashioned dark green train with yellow stripes pulled into a station in Beijing. Who was in the train was for a time the week's biggest mystery. Then turned into the week's biggest surprise. It was, of course, Kim Jong-un, the North Korean leader was on an unannounced visit to Beijing. His first known trip outside the hermit kingdom since he took power in 2011.

What to make of the trip, the meetings with Chinese President Xi And Kim's broader charm offensive. Well, I have a great panel to discuss.

Anne-Marie Slaughter is the president and CEO of the think tank New America, the author of the "Chess Board and the Web." Richard Haass is the president of the Council on Foreign Relations and the author of "A World in Disarray." The two of them both former directors of policy planning at the State Department.

Also with us is Walter Russell Knead, a professor of Foreign Affairs and Humanities at Bart College and a columnist for "The Wall Street Journal."

Anne-Marie, what do you make of Kim Jong-un's strategy, the trip to Beijing? I mean, it all seems pretty well-thought through.

ANNE-MARIE SLAUGHTER, PRESIDENT AND CEO, NEW AMERICA: Well, he certainly managed to keep himself at the center of things, directing both Olympic diplomacy and now again on stage. I actually think, though, this visit may have had more to do with Xi Jinping than Kim Jong-un in the sense that immediately after President Trump announced that there was going to be a meeting, he received a call from Xi Jinping and the Chinese are saying you're not going to make any deals without us at the table. And it's reasonable to think they similarly wanted to make that very clear to the North Koreans.

ZAKARIA: Do you think, Richard, that the United States has a strategy here? Because, I mean, for the longest time it said we're not going to talk until you do something concrete. Now they say we'll talk. Is there a plan?

RICHARD HAASS, PRESIDENT, COUNCIL ON FOREIGN RELATIONS: Well, there doesn't seem to be. You know, the one thing you constantly hear is we're demanding denuclearization but nobody has defined it. And if you could define it, it might take 20 odd years to bring it about. It's also not clear that we're prepared to do in exchange for whatever definition of denuclearization we decide is adequate.

The biggest question, Fareed, is whether we're prepared to take half a loaf. Even if somewhere down the road the North Koreans might agree to give up their nuclear weapons and ballistic missiles which I think is unlikely, what about our interim agreement?

And the irony is, here's an administration that's going to war potentially against the interim agreement with Iran and sometime this May has to decide what it's going to do but the only realistic path for diplomatic success at this summit if in fact it were to happen with North Korea might be some type of an interim agreement where North Korea would agree to extend its freeze on testing in exchange for what? And that's the big question facing the administration.

ZAKARIA: So, Walter, you are regarded as a kind of a Trump whisperer because the book you wrote and the idea of a Jackson-ian foreign policy is often seen as inspiring Trump, whether, you know, I assume subconsciously. I assume he's not read the 650-page book.

WALTER RUSSELL MEAD, PROFESSOR OF FOREIGN AFFAIRS AND HUMANITIES, BART COLLEGE: I'm sure he's it memorized it.

(LAUGHTER)

ZAKARIA: But the really interesting question, you do seem to get at -- you understand the instincts. Is Trump the kind of guy who can do what Richard said? Which is after having said we're going to rain fire and fury on him, say, yes, this is a pretty good deal, it's not the best but we can live with it, and, you know -- and then sell it to a base that also is very unilateralist and Jackson-ian.

MEAD: I -- you know, it is actually interesting that Andrew Jackson who was probably a better read president maybe than President Trump but shared some of these instincts and political base did, in fact, as president have to pursue a more moderate than expected foreign policy. One of the big issues was the French were reneging on an agreement to repay some debts to the U.S. Jackson mobilized the fleet and started sending this -- you know, the relatively small American Navy across the Atlantic. The French agreed to pay, but it was kind of a compromised settlement. Jackson embraced it immediately.

So yes, one of the things about Jackson-ian leadership is an agreement that they would never buy from Obama, they might buy from Trump. Sort of a Nixon to China kind of thing. Now whether Trump will do this, that's a whole different question, but structurally, yes, it could happen.

[10:10:08] ZAKARIA: Richard, you made a point in a tweet, which I thought was very interesting and important, which is John Bolton, the new National Security adviser, has been threatening war against North Korea. And it's important to understand that what he's talking about is not a preemptive war but a preventive war, that is to say an unprovoked war against North Korea which has not in some ways struck or is planning to strike the United States.

Do you think even leaving that out there, without him publicly walking that back, is dangerous?

HAASS: I don't know if it's dangerous since rhetorically it's part of the backdrop to negotiations and it might conceivably push the Chinese to use slightly more influence with the North Koreans. But what John Bolton wrote is flat-out wrong. He confused specifically at the risk of losing your viewership preemptive and preventative strikes and he confused the difference between an imminent threat, which North Korea does impose, and a gathering threat.

And under international law, to simply go after gathering threats, well, we didn't do it against the Soviet Union or China. We did, we told the Soviets not to do it against China in the late '60s. A world of those kinds of strikes would be a world at constant war. So if this ever were actually to be affected, to happen, this would cause an enormous war and again we would find ourselves isolated. So I'm hoping it's nothing more than rhetoric. But indeed I think there are people including John Bolton who could well believe in this.

ZAKARIA: You mentioned something which I want to come back to, which is that this is a bilateral summit. So far the United States has always tried to do something about North Korea the way it has done something with Iran which is to get everybody at the table because everyone has a stake, the Russians, the Chinese, the South Koreans. Is this creative diplomacy to try a bilateral or is it a mistake? Should we have included everybody at the table?

SLAUGHTER: It's better when we're coordinated. I mean, we -- we need the Chinese. We need the Japanese. And in general, our approach has been we don't sell out our allies. Now that is not something that Trump is worried about. He's perfectly willing to sell out our allies, at least rhetorically but I don't think we had a thought-out strategy again there.

I think this appeals absolutely to Trump's desire to be center stage, to be having, you know, a big win. You know my hard-nosed North Korean diplomacy brought him to the table. He has a real advantage in playing up this until it actually happens and then who knows what he might give away. But I don't think it's strategically for us in Asia it's a good idea for us to be there with the North Koreans alone. It also gives Kim Jong-un unbelievable prestige which suits him perfectly but doesn't suit us.

ZAKARIA: Fascinating.

All right. When we come back, next on GPS, another major foreign policy challenge. This week the West responds to Russia. Sanctions and forced diplomatic departures. Is that the right way to fight Moscow? We'll discuss when we come back.

(COMMERCIAL BREAK)

[10:17:29] ZAKARIA: Persona non grata, that is Latin for unwelcomed person and it's the label that the State Department put on 60 Russian diplomats on Monday when the U.S. ordered them to leave the country. On Thursday Russia retaliated with a tit-for-tat. PNG, as foreign policy wonks call it, 60 Americans. Later in the week Moscow similarly retaliated against some of the more than 20 other countries that had kicked Russian diplomats out.

The question remains, do these diplomatic expulsions make any difference?

Back with me, Anne-Marie Slaughter, Richard Haass, and Walter Russell Mead.

Richard, you're old enough you went through this during the Cold War. There was a very good piece, I can't remember by whom, who said this is sort of very old-fashioned tit-for-tat, it makes no sense, it actually puts the U.S. at a disadvantage because the Russians expelled a few intelligence officers that the West has in Russia whereas America and the West are open societies, much easier to recruit and find information out. So why do it?

HAASS: Look, the fact that we pushed back in concert with our allies was in principle good, in practice this was the wrong move. It was totally predictable, once we kicked out their 60 odd diplomats they were going to do exactly the same thing. So now what do we do? They were the ones who provoked this by the attempted murder of two individuals in the U.K.

I would have much preferred an approach at the Russians (INAUDIBLE), say go after them economically, go after certain financial institutions, go after their ability to operate in the Western financial system. That would have been an asymmetrical response. They couldn't have retaliated in kind. Now the question is what do we do next at a time? I was just in Moscow. There's almost no U.S.- Russian relationship. There are no diplomats. There hasn't been a congressional delegation in five years.

We need more substance to this relationship. There's less now than there was at the worst moment in the Cold War. So I don't think diplomatic ousters, balanced or imbalanced, serve either side's interest.

ZAKARIA: Ann-Marie, a lot of people think that the reason we don't rule out economically is there is still that lingering question of whether the Kremlin has some economic information, ties to Donald Trump. Do you think that plays a part?

SLAUGHTER: I don't think that played a part in this immediate response, in part because it's driven by the British and what the British decided to do. And I understand Richard's point that this may seem to be cutting off your nose despite your diplomatic face, but it is the way the game is played. It is the natural first start. You know, when somebody is murdering people in your country, the first thing you do is to downgrade relations with them.

[10:20:05] And what is impressive to me is that so many Europeans followed suit because that was not a given, particularly at a time when Britain is leaving the EU. It was not clear that Germany and France and most other big European countries and small ones would say you've gone too far. So I see this as an important first step. I don't think it goes far enough, and I actually think what we do need to do is go after the assets of sort of ill-gotten gains by various Russian oligarchs. But I think it is an important first step.

ZAKARIA: Do you think, Walter, that this is the new normal for relations with Russia? I mean, as Richard said, at this point we're in a kind of -- there were many points during the Cold War where we had better relations with Russia and it does seem the Trump administration is sort of frozen. It can't make overtures because that raises suspicions. It doesn't want to be too hard lined. So again here there seems to be no American policy towards Russia, just a series of reflexes in, you know, in this case mirroring what the British did.

MEAD: I think it's important to understand it from the Russian point of view, our policy is actually quite anti-Russian in the sense that fracking is destroying one element of Putin's power by reducing the price of energy, that a big military buildup and modernization of the nuclear arsenal are all the kinds of things that weaken Russia's position in ways it can't do very much about.

ZAKARIA: Add to that sanctions and you're weakening your financial power.

MEAD: Right. Exactly. So -- you know, so the idea that we could put a smiley face on all of that and have a great relationship I think is wrong. I think Trump, like his predecessors, like Obama and like Bush, both thought, OK, I can magically make the relationship good. I have the qualities, unlike my foolish predecessor, to have a terrific Russia policy.

The reset didn't work. Bush soul gaze didn't work. Cannon actually said years ago that the problems with U.S.-Russian relations are structural. And what's interesting to me is at the end of the Cold War everybody said, oh, that Cannon, what a genius. But then everybody forgot that he said our problem is not really that they're communist so much is that they're Russian. So boy, they're not communist now, no more Russia-U.S. problems.

ZAKARIA: And then you're right, since Clinton actually, the solution has always been psychological.

MEAD: Yes.

ZAKARIA: I will have a better relationship with the guy at the top.

MEAD: Right.

ZAKARIA: And the structural --

MEAD: Which is exactly what Cannon was telling us would never work. It's fascinating. Actually, as a writer, it's incredibly depressing that the most influential essay in the history of American foreign policy essentially has no influence.

ZAKARIA: Final thought.

HAASS: This relationship has essentially been deinstitutionalized. And the fact that we still have nuclear weapons, both of us, enormous amounts being modernized, we see what the Russians are doing in Europe -- have done in Syria. So I don't think either side is served by the current state of affairs. But the kind of auto pilot foreign policy, kick out diplomats, that to me is a mindless response.

What we've got to do is a much more targeted response, be tougher with them, yet also find a way to talk to them. And we need to basically be able to manage both sides of this relationship at once.

ZAKARIA: All right. We got to go.

Next on GPS, Trump and trade. Is he starting a global economic war. Steve Rattner and Rana Faroohar join me when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[10:27:26] TRUMP: We've got the greatest economy maybe ever, maybe in history. We have the greatest economy we've ever had.

(END VIDEO CLIP)

ZAKARIA: A bold claim from President Trump on Thursday in Ohio. Can he back it up and what would happen to that greatest economy if a global trade war starts?

Joining me now, Rana Faroohar, global business columnist and associate editor for the "FT" and CNN's global economic analyst, and Steve Rattner who was President Obama's car czar and is now the chairman and CEO of Willet Advisers.

Steve, at the risk of agreeing with Donald Trump, not on that boast but --

STEVE RATTNER, CHAIRMAN AND CEO, WILLET ADVISERS LLC: Almost isn't true as you know.

ZAKARIA: On the trade issue, isn't it right that China has basically been a mercantilist cheater in a global trade system and taking advantage of the open trading system?

RATTNER: It is absolutely right and it is something that people say and it's been surprising to me in the last week or so since all this started how many people say, you know, I don't like the way Trump does it and this and that, but he's not wrong. I've spent a lot of time in China over the last 10 years. It is the most mercantilist, the most protectionist, the most flagrant abuser of rules but they're abusing nontariff barriers, not tariff barriers. And so I think our response wasn't exactly the right response but the problem is very real.

ZAKARIA: What do you -- you know, there's always this view that in trade wars everyone loses. So what do you do?

RATTNER: I think the way that we should handle it, it should have been started a long time ago, would have been as a global effort among -- look, Europe worries as much about China as we do. Other developed countries worry about China. Even underdeveloped countries worry about China. We should have gotten the world together and taken on the Chinese through diplomacy over a much longer period of time.

ZAKARIA: And that's why it seemed to me the steel tariffs were bizarre, Rana.

RANA FAROOHAR, CNN GLOBAL ECONOMIC ANALYST: Yes.

ZAKARIA: Because they seemed to initially affect -- I mean, our biggest steel imports come from South Korea, and Germany, and Canada and Mexico, not from China.

FAROOHAR: Absolutely. And that's what makes you so worried about this trade action. It feels like the president just got up and kind of thought of something in the morning, tweeted it out and didn't really look at the implications. I think that the lessons, interestingly, that we need to take from China are think long term. You know and China is true, China's trade practices are unfair.

What they do well is they plan for the long term. They have an industrial strategy and industrial policy. Actually that's something a lot of European nations have as well. And what the president should be doing is thinking regionally, thinking about how to get closer to Canada, Mexico, how to create the kind of synergies that are in that block and may be appropriate for this period in time.

ZAKARIA: You wrote a column which struck me as very, very smart. You just came back from China and you said you were struck by the degree to which the Chinese model is working and the American model is not. Explain what you meant.

STEVEN RATTNER, CHAIRMAN AND CEO, WILLETT ADVISORS LLC: This is the striking thing to me, that China has their vision 2025 program.

They're -- they want to be national champions in all kinds of industries, including robotics and A.I. and things like that. Obviously, anyone who goes there and you see the subways, you see the infrastructure, you see the skyscrapers.

And they are moving forward, and they are driving forward using a form of state-directed capitalism different than our system. And we're in gridlock. Nothing is happening in Washington. We can't have -- we don't have any initiatives.

Perhaps Rana's right, we should be doing it locally, but the contrast between China just driving forward incredibly effectively and us essentially standing still is very striking.

RANA FOROOHAR, GLOBAL BUSINESS COLUMNIST AND ASSOCIATE EDITOR, FINANCIAL TIMES: You know, I think that this actually picks up on another thread in the news right now which is the correction in the text docs and the way technology is going to roll out.

There may be a real new regionalism here. I mean, China has made it very clear that they want to be independent of the U.S. technology in the next 10 years. They have their own very large market that, really, I think could be a standalone, high growth market. We need a strategy.

ZAKARIA: And they've blocked American tech companies very successfully.

FOROOHAR: And they're blocking -- I mean, that is absolutely true. But we don't have a coherent strategy here at home about, you know, what is the digital economy?

What does it look like? What are the new regulations and policies that should be in place? How should we train up a 21st century workforce?

We've heard a lot of window dressing about all of these things, and we've seen policies that go in one direction and then lurch in another. But we need a really unified plan if we're going keep up and remain competitive in the highest growth area.

ZAKARIA: On take that thick bush, do you think -- I mean, to Trump's claim, is the economy -- we are witnessing the deflation of a tech bubble, you think?

FOROOHAR: I actually think it's a big issue, and I think we may have reached a peak for big tech stocks.

I think that Europe, for example, is rolling out very interesting new privacy rules in May. They're really looking at, how should we regulate A.I.?

I mean, artificial intelligence, which is going to account for a lot of growth not just in technology but in most industries going forward, is two things. It's data and it's quantum competing.

Now, data is the problem, right? When we look at election manipulation and the backlash over Facebook, we have to find a balance between privacy regulation and being able stay ahead in these industries. We need a real national conversation about that.

ZAKARIA: And it does strike me again, Steve, coming back to your point, we can't get -- we can't pass a budget. We can't make investments in infrastructure. We can't make investments in science.

Is it possible that the chaotic, open, freewheeling system that America has is just going to underperform?

RATTNER: This is the big question, Fareed. I think we're actually literally witnessing a test between the liberal democracies that have basically defined the post-World War II order and form of a state- directed capitalism in China. India, obviously, has its own system which is also somewhat different. And we're going to see which one wins.

But right now -- and there's a whole bunch of books that are coming out on this now. I mean, people are really worried about this, and I'm worried about it.

Right now, I think you have to, I would argue -- I'm not in favor of giving up my civil liberties, but, on a purely economic basis, I would have to argue that state-directed capitalism is doing a better job than our liberal democracy.

ZAKARIA: All right. We'll have to come back and talk about this more. Thank you both.

Next on GPS, just what is the next big technological revolution? It might be happening in one of the world's poorest nations.

(COMMERCIAL BREAK)

[10:37:49] ZAKARIA: Ask most people to identify the global hub of emerging technology and they'd probably think of Silicon Valley. But in one sense, the biggest leap in technology today is actually happening worlds away from those gleaming office parks. It is in the crowded cities and dusty villages of India.

I'll give you the numbers. In 2000, India had 10 million Internet users. Last year, it reached 460 million, making it the second largest online user base in the world after China.

Why is it happening? A smartphone revolution.

Unlike Americans who had a comparatively slow evolution from dial-up to smartphones, Indians are moving straight to these minicomputers, says the Ravi Agarwal, the former CNN New Delhi bureau chief and author of the forthcoming book, "India Connected, How the Smartphone is Transforming the World's Largest Democracy."

How did a country with such entrenched poverty where more than 200 million people lack access to even electricity get hundreds of millions online in less than a decade? And how will it get the rest?

The answer is all about prices. India's market is glutted with cheap phones and cheap data. Smartphone prices have been dropping for years. Now, Indians can buy a basic smartphone for as little as $20.

And in late 2016, something happened that made data cheaper, a phenomenon that will drive the next generation of online users.

Mukesh Ambani, India's richest man who runs India's largest company, launched Jio, a network offering 4G voice and data services throughout the country. His company, Reliance, invested an unprecedented $20 billion in the initiative. It announced it would build 45,000 mobile towers.

And then, for six months, it made unlimited 4G data absolutely free. It was a conscious effort to pull hordes of Indians online, and its effect was revolutionary.

By the end of 2017, 160 million people had subscribed. Data usage in the country soared, and India surpassed the United States in app downloads, making it second only to China.

[10:40:10] In September, Ambani noted that India had moved from a lowly 155th in mobile broadband penetration to being the world's largest mobile data-consuming nation. Number one in just one year.

All of these changes represent huge opportunities for Jio and other companies, but they also have the potential to transform the Internet itself.

Think of the hundreds of millions of Chinese Internet users and how they changed the nature of e-commerce, created behemoths like Alibaba and Tencent, and have revolutionized finance by creating cheap digital payments far faster than any in the United States.

Indians might well initiate the next series of transformations because of how this vast user base will use the Internet. Already, the widespread availability of smartphones and government policies have led to a 20-fold increase in online payments in just three years, according to a Mumbai market research firm.

Smartphones provide education apps for India's aspirational youth. They're also being used to help people compare prices of medicines in a country where most people pay burdensome health expenses out of pocket.

Now, healthcare and education are fields that could easily get disrupted in the U.S. because of innovations out of India. And all these innovations will have the effect of empowering some of the poorest people on the planet and lifting them out of poverty.

Next on GPS, how is America today like South Africa during the apartheid era? Amy Chua, the author of the book that brought us the concept of the tiger mom will explain.

(COMMERCIAL BREAK)

[10:46:01] ZAKARIA: My next guest, Amy Chua, is an author whose books tend to change the conversation.

She's most famous for her 2011 book "Battle Hymn of the Tiger Mother." That book changed the way many thought about their children and how to raise them. It created a lot of controversies.

Her new book just may change the way Americans think about themselves. What does it mean to be American and are people here American first? White, Black, Asian or Hispanic first? Working class or liberal elite first?

Amy Chua is a Yale Law School professor and author of "Political Tribes: Group Instinct and the Fate of Nations."

Welcome back to the show.

AMY CHUA, AUTHOR, "POLITICAL TRIBES: GROUP INSTINCT AND THE FATE OF NATIONS": Thank you so much for having me.

ZAKARIA: So this really returns you to your first book where you talked about this phenomenon that I think is very important to set out, which is in many developing democracies, you noticed there was this huge problem which was what you called a market-dominant minority. Explain what you meant.

CHUA: So this phenomenon is actually pervasive in the developing world, and it's completely unknown and uncomfortable for Americans.

In many developing countries, there is a small ethnic minority viewed as an outsider that controls a vastly disproportionate amount of the nation's wealth.

For example, the three percent Chinese minority in Indonesia who control about 70 to 80 percent of the private sector in the entire corporate economy.

ZAKARIA: And in Malaysia and Thailand, with similar Chinese minorities.

CHUA: Exactly. Or even Whites in South Africa. Very different type, right? I mean, that's a former colonizer because of apartheid.

But again, you know, a 10 to 14 percent minority that controls all of the land, everything. Indians in East Africa, Lebanese in West Africa, Jews in many parts of the world between the first and second world wars in Lithuania.

ZAKARIA: That was the one Western experience that we know of, the Jews. And what you point out is that in all these cases, you have a real problem with democracy which is that the majority resents them, and of course, the majority has the political power.

CHUA: Yes. So I have described market-dominant minorities as the Achilles heel of democracy.

ZAKARIA: So now what you have pointed out is that, something you didn't even notice, is you've realized that America actually does have a market-dominant minority that the majority or some large part of the country resent. Who is our market-dominant minority?

CHUA: This is a new development, and it really makes sense of everything that's going on in our country. People just -- I think they misdiagnose the problem. They hurl big terms, racism, White supremacy.

So two things have happened. First of all, with this massive demographic change in this country, Whites are on the verge of losing their majority status. So by 2044, Whites may no longer be a majority.

This means everybody's threatened now. You know, it's not just the minorities who feel threatened. Whites feel threatened. Sixty-seven percent of working class Whites feel that there is more discrimination against Whites than minorities.

At the same time, something else has happened which is that class or, really, education has split America's White majority. So what we might loosely call coastal elites or coastal Whites, their resentment against the Whites in Trump's base, basically, in this -- in the middle of the country, there is so much mutual antagonism and resentment.

I have studied ethnicity for 20 years. It's almost like an ethnic divide, Fareed, because all the markers are there.

They're insular. The two groups actually do not intermarry. They speak differently. We have a politically -- we know how to speak politically correctly. So in my analysis --

ZAKARIA: And in a way, what you describe is, really, as you say, it's two worlds, one of which is coastal or big city, educated --

CHUA: Yes, multi-cultural.

ZAKARIA: Multi-cultural. And these people are separating themselves from the rest of the country.

[10:50:01] The part that I find interesting, it seems to me, is this is seen as a meritocracy. Right, of the merit-based system of education?

So I think the people at the top, the people who are the coastal elites, think that this is not ethnicity. This is entirely justified elitism because --

CHUA: And it used to be. I even --

ZAKARIA: -- they did better on the SATs.

CHUA: It used to be that way, but what's happened in the last 50 years is there is much less social mobility. Education has gone wrong.

I mean, it used to be that engine where people could climb. Now, with the tutors, it's so expensive. You know, people from the -- a middle class or lower class, you know, family in Ohio can't easily make it.

And there's a racial and ethnic element too that's very coded. You know, when people say, let's make America great again, what's happening is a lot of people in the middle of the country, they see coastal elites as minority loving.

They love immigrants. They're always trying to help people in other developing countries. They don't care about real Americans.

And in a way, it's a perfect parallel to, you know, we need Serbia for the Serbs. You know, Bolivia for the indigenous, real Bolivians.

ZAKARIA: Right.

CHUA: Zimbabwe for the Black Zimbabweans. And we had our own version of that, and you really see that's the kind of zero-sum political tribalism that we're in right now.

ZAKARIA: So now here is the hard part. How do you -- what do you do about it? Because as I see it, it seems like these two groups are actually separating even more. CHUA: I think, you know, we were playing with fire. I think

progressives didn't realize that this identity mongering and victim worshipping wouldn't just take over college campuses but would actually help Donald Trump get elected.

And on the right, I think a lot of conservatives didn't quite realize that this conspiracy theory peddling and rage mongering wouldn't just, you know, be on conservative radio but, again, would help Donald Trump get elected.

So I think we all need to elevate ourselves and remember what makes us special so that, right now, we're in a situation that we can't have. We now view people who voted on the other side as our enemies. I mean, as immoral, inferior people and not as fellow Americans.

So I think that's -- but I think we're going to get there. I actually think in 2018 and 2020, that the messaging will be different on both sides. I think it's a bit of a wake-up call.

ZAKARIA: Amy Chua, always a pleasure to have you.

CHUA: Thank you so much for having me.

(COMMERCIAL BREAK)

[10:56:56] ZAKARIA: Voters in Hungary are headed to the polls next Sunday, and the Fidesz Party of far-right Prime Minister Viktor Orban is widely expected to secure victory.

This would be the third consecutive term and the fourth overall for Orban, a populist who is openly hostile toward immigrants and the European Union.

It brings me to my question. His party has made demonizing which American figure a central part of its strategy? Is it Hillary Clinton, Mark Zuckerberg, Barack Obama, or George Soros?

Stay tuned and we'll tell you the correct answer.

My book of the week is "The Ordinary Virtues: Moral Order in a Divided World" by Michael Ignatieff, a philosopher and former Canadian politician.

Ignatieff asks a simple question, is globalization bringing us together or tearing us apart?

He answers it by taking us around the world from Bosnia to Brazil, South Africa to Myanmar. The result is a fascinating and deeply engaging book.

And now for the last look. Donald Trump accepted Kim Jong-un's invitation to meet face to face, and the White House made it clear that its goal is denuclearization of North Korea. But before celebrating, we should ask, is denuclearization a realistic objective?

Well, it's occurred in the past but only four times. In three of these cases, Belarus, Ukraine, and Kazakhstan, the states

inherited their nuclear weapons from the USSR and gave them up following the Soviet collapse in 1991. They neither developed the weapons located in their territory nor had the wherewithal to maintain them.

According to the Nuclear Threat Initiative, only one nation has ever dismantled a nuclear arsenal it had developed itself. South Africa.

Like North Korea today, in the 1970s, South Africa was an isolated pariah state afraid for its security and decided to pursue nuclear weapons. It ultimately produced six uranium warheads.

However, by 1989, the end of the Angolan War and the general decline of world communism led South Africa's leader, F.W. de Klerk, to conclude that nuclear arms were no longer necessary.

And with apartheid ending, he wanted to send a signal that South Africa was becoming an upright, global citizen. He ordered the nuclear arsenal destroyed and signed the Nuclear Nonproliferation Treaty. In 1996, South Africa signed the African Nuclear-Weapon-Free- Zone Treaty.

As world leaders try to persuade Pyongyang to denuclearize, they would do well to study Pretoria's example. After all, it's the only one we have.

The answer to my GPS Challenge question this week, D, Prime Minister Viktor Orban has vilified Hungarian-American investor George Soros and his support for pro-democracy and civil society groups in Hungary.

A particular target for Orban has been Soros' Central European University, even though hosting this modern internationally ranked center for social sciences seems like a big win for Hungary as a whole. Though Budapest denies it, the campaign against Soros does smack of anti-Semitism.

[11:00:01] Thanks to all of you for being part of my program this week. I will see you next week.

BRIAN STELTER, CNN HOST: Hey, Happy Easter Sunday and a Happy Passover. I'm Brian Stelter and this is RELIABLE SOURCES.