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FAREED ZAKARIA GPS

Homegrown Terror in America; The Origins of White Nationalist Violence; Interview with Larry Summers on U.S.-China Trade War; Tragic War In Yemen Takes A New Turn; How To Have Perfect Timing. Aired 10- 11a ET

Aired August 11, 2019 - 10:00   ET

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


[10:00:28] FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

We'll start today's show with the aftermath of El Paso, Charleston, Pittsburgh. Should America treat white nationalist terrorist attacks the same way it has treated foreign ones? What can be done to tackle this new and present danger?

I will talk to Michael Chernoff, the former secretary of Homeland Security.

Then these white power attacks are part of a movement. When did it begin? What are its goals? A University of Chicago historian takes me down the long road to the El Paso massacre.

Also, Trump versus Xi. America versus China. The trade war heated up this week in a big way.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They were taking hundreds of billions of dollars a year out of the United States. And somebody had to make a stand.

(END VIDEO CLIP)

ZAKARIA: Is it good for America or for anyone? Larry Summers, the former Treasury secretary, weighs in.

But first here's my take. President Trump has set off what could end up becoming a full-blown trade war. As we go down this path, it's worth keeping something firmly in view. Tariffs don't work. I'm not spouting free market theory. I'm simply making a practical observation.

There have been many efforts in recent decades to help industries in decline in America. I can think of no case where tariffs have worked to reverse that decline except temporarily. Take the most recent example before Trump, tariffs on tires put in place by President Obama. In 2009, after complaints from American companies about cheap Chinese imports, the Obama administration slapped a 35 percent tariff on Chinese tires. As many as 1,200 jobs were saved in the tire industry, according to

the Peterson Institute. But the institute also estimates that American consumers paid about $1.1 billion more in higher prices, which caused 3,700 jobs to be lost in the retail sector. The cost per tire job saved was almost $1 million per job. In additional China retaliated with tariffs on American chicken producers which Peterson says led to $1 billion in lost sales.

As for the long-term effect, well, in 2008, before the tariffs, there was 60,000 Americans working in the tire industry. By 2017 there were 55,000. All considered, Trump's steel and aluminum tariffs. The Pro- Tariff Alliance for American manufactures claims that 12,700 jobs have been saved or added. But the Peterson Institute calculates that higher steel prices cost American companies about $11.5 billion a year or $1 million per steel job saved. U.S. aluminum production has risen slightly, but it is still well below 2015 levels.

The nonpartisan National Bureau for Economic Research released a paper in March observing that Trump had ushered in the largest return to protectionism since the Smoot-Hawley tariffs of the 1930s and the brief Nixon shock of 1971. The scholars calculated that Trump's tariffs last year cost American consumers and firms a staggering $68.8 billion a year.

America now has the highest tariffs among the G-7, the group of the world's leading industrialized countries. Over time other nations will surely become more protectionist as well. And history suggests once imposed, tariffs are hard to repeal since domestic lobbies that benefit will advocate fiercely for their retention.

One example, in 1964, retaliating for European tariffs on American chickens, the U.S. placed a 25 percent tariff on light trucks. The chicken tax was long ago repealed, but the truck tariffs of 1964 remains in place.

It's true that China has been something of a trade cheat, though more often than not it has been clever in using and manipulating the rules to its benefit, not breaking them.

[10:05:08] But to put things in perspective, according to a 2015 Credit Suisse tally, the country that imposed the most non-tariff protectionist measures since 1990 was the United States of America, with three times the number as China. Many of Trump's demands on China, by the way, have nothing to do with opening up markets.

(BEGIN VIDEO CLIP)

TRUMP: We're going to give them lists of things that we'd like them to buy.

(END VIDEO CLIP)

ZAKARIA: They are shopping lists presented to Beijing for goods mostly produced in states that the president wants to win in 2020. Think soy beans grown in the Midwest. It is less a trade strategy than a re-election strategy. In fact, it actually moves China in the direction of greater statism since the only way Beijing can fulfill Trump's wish list is to have the government or state-owned enterprise buy the goods.

Donald Trump's trade strategy might have started out well-intentioned, but it has turned into a highly politicized, out of control wrecking ball that could end up destroying a system that has brought peace and prosperity to the world for 75 years.

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

America's gun violence epidemic exploded last week. Two massacres perpetrated just within hours of each other in El Paso and Dayton. The El Paso suspect, whom I will not name or show on this program, wrote a racist manifesto according to the police, and the Department of Justice is now treating that shooting as a case of domestic terror.

An important question emerged over the course of the week. Should domestic terror be dealt with like foreign terror?

Joining me now is Michael Chertoff. Chertoff was America's second ever secretary of Homeland Security serving President George W. Bush. He's the co-founder and executive chairman of the Chertoff Group -- in the private sector on security and risk management.

Pleasure to have you on, sir.

MICHAEL CHERTOFF, FORMER HOMELAND SECURITY SECRETARY: A sad circumstance and my heart obviously goes out to those who lost loved ones or who are recovering now in hospitals.

ZAKARIA: Do you think that there is a comparison to be made between the way in which the Department of Homeland Security and American law enforcement in general handles a phenomenon like Islamic terrorism and what we are now seeing in terms of this domestic terrorism?

CHERTOFF: Well, I think you have to separate two types of terrorist challenges. There is the 9/11 style attack, which is massive, global in terms of its planning and its execution and obviously since 2001 has been a top priority for all of the security agencies.

A newer phenomenon is what I call network-inspired terrorism. That's -- attempts to incite people individually to go out and carry out, whether it be gun violence, driving a car down a highway or knifing people. And these are small-scale attacks, although they have multiplied over time. And so they require two different approaches. The largescale kind of plot will use all of our intelligence capabilities, our overseas activities. Sometimes we actually use our war fighting capabilities to take out somebody.

Domestically, whether you are dealing with the jihadi inspired terrorists or a white supremacist inspired terrorists, there are many more legal constraints that affect the way law enforcement goes about trying to prevent.

ZAKARIA: Do you see these people, though, as sort of lone wolves? How should we see, you know, somebody like the El Paso shooter?

CHERTOFF: Well, I don't like the term lone wolf because it suggests people are just operating without any inspiration or any prodding or incitement. And I think in a vast majority of these cases, whether it's jihadis or whether it's white nationalists, there is a network out there that is trying to promote this, that's interacting, that's creating a platform. And that's leading people to take the step of carrying out an attack. So they're not truly lone wolves, but they're not part of a hierarchical organization, they're not trained, they're not dealing with elaborate plans. And that makes it more difficult to detect in advance.

ZAKARIA: What strikes me as kind of a wrong path or an ineffective path to pursue here is something that you hear people like Senate McConnell talk about, which is, OK, we'll give the authorities the ability to, when they hear that someone seems like he or she has bad intentions or is troubled, we won't let that person buy a gun.

[10:10:15] It feels like you're never going to be able to predict on the basis of somebody's mental state or capacity whether or not they're going to -- they're going to do these things, or there will be thousands and thousands of such people. Is there some way to -- you know, to kind of take preventive action?

CHERTOFF: Well, there is no magic bullet here, if I could use that expression, because it is very widely distributed. You're not dealing with people who are very cohesive and where there is a lot of activity that can be picked up. So you're looking for very small traces. A lot of times, to be honest, and I think we saw this with the mother of the El Paso shooter, sometimes there is a family member or a friend who begins to see something a little worrisome, and we need to give them an opportunity to raise their hand and, as they say, see something, say something.

And part of that is not just to respond with law enforcement, but to use deprogramming and social psychology as a way of off-ramping people when they're beginning to step down the road of being violent, but they haven't quite crossed the line yet. So that's one set of solutions.

Another set of solutions is obviously better background checks, being a little bit more thorough in terms of avoiding the loopholes that we currently have in the law. And yet another is restricting certain kinds of tools. For example, magazines that have 100 rounds of ammunition might be banned., or, for example, body armor. It's not clear to me why ordinary civilians ought to be buying body armor. You don't use it when you're hunting. So maybe we ought to look at that as well.

ZAKARIA: It does seem like the big anomaly here in terms of America having so many of these mass shootings, I mean, hundreds compared to other countries that have one or two, if that, many countries have had zero for year after year, is the fact that the United States with 5 percent of the world's population has 50 percent of the world's firearms. And, you know, I presume we have the same number of mentally disturbed people as in Europe. We have the same number of -- you know, we play the same violent video games as places like Japan. The big difference does seem the easy availability of particularly lethal kind of weaponry.

CHERTOFF: Well, I think when you're dealing with high capacity weapons, automatic weapons or even assault weapons, obviously that does create the possibility that in the wrong hands you can do a lot more damage. So I don't know to what extent this is a question of availability of high capacity weapons whether some of it is just a cultural difference, but, as I say, there is not likely to be a single solution. And we ought to take in all of the above approach to try to identify people who are presenting a risk and also reduce the number of tools that allow them to really have high impact attacks.

ZAKARIA: Michael Chertoff, always a pleasure, sir.

CHERTOFF: Good to be on, Fareed.

ZAKARIA: Next on GPS, we will dig deeper into the origins of white nationalist violence in America. It is often misunderstood and under consider as part of American history.

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[10:17:13] ZAKARIA: White supremacist violence in America is a deadly national security threat. But despite all of the headlines, it's still misunderstood. El Paso and other attacks are often seen as isolated acts of hatred by loners, but really they're part of a coherent movement with a long history, which includes the Oklahoma City bombing in 1995 that killed 168 people.

Professor Kathleen Belew from the University of Chicago has studied this misunderstood movement extensively. Her fascinating book is called "Bring the War Home."

Professor, welcome.

KATHLEEN BELEW, PROFESSOR OF U.S. HISTORY, UNIVERSITY OF CHICAGO: Thank you very much for having me.

ZAKARIA: So in your work, what strikes me as the sort of most important point that we should understand is that these are not isolated attacks by loners who are motivated by a particular animus against a particular group. But there is something broader tying it all together.

BELEW: Absolutely. The movement that I study is called the white power movement. It's a group of Neo-Nazis, skinhead, Klansmen and other perpetrators that came together in the '70s and early 1980s, and beginning in the early '80s began to use a strategy called leaderless resistance. Now that strategy is essentially what we think of today as cell-style terror or the idea that people are working in small groups without communication with other small groups and without direct orders from movement leadership.

And while that strategy was implemented to sort of stymy prosecution, the larger legacy has been to stymy public understanding of this as a social movement, such that we don't connect these acts of violence into one common story.

ZAKARIA: And what is animating them? What is it that they are reacting to? What is it that they fear?

BELEW: So white power activists understand a whole nexus of issues, such as immigration, abortion, racial integration and other issues as being fundamentally about threats to white reproduction. And what I mean by that is in order to sort of continue a majority white nation, these activists believe they have to continue to produce white children. And in order to do that, they seek to sort of support a series of social issues that, to them, are tantamount to racial annihilation if they succeed. In other words, they oppose abortion not only because of sort of a religious doctrine, but because they think it will reduce the number of white infants. They oppose immigration because they think that swelling tides of immigrants will outnumber and overrun white people. All of this comes down to the idea of this very imminent, apocalyptic state of emergency experienced by these activists and this real sense urgency about the kind of call to action they're attempting to issue.

[10:20:11] ZAKARIA: And when you look at the El Paso manifesto, you see -- there is a familiarity and a similarity to other such white supremacist documents?

BELEW: Certainly. And let me just start by explaining why I think it is appropriate to use the word manifesto. This has been getting a lot of attention this week. But I think manifesto to me is a genre of historical writing. It doesn't mean to sort of exalt it among like the great literary works of our time, but simply to recognize it as an expression of ideological and political meaning. It's an instrument that's designed to give a particular kind of a rational for action and it's designed to call others to action in much the same way.

And if you remember nothing else about white power activism, I think the one critical thing to understand in the wake of the shootings at El Paso is that acts of mass violence are not supposed to be the end point of white power terrorism. The idea is that act, like the shooting in El Paso or the bombing in Oklahoma City, or -- I mean, we could go on with examples, these acts are designed to awaken other activists to join in this movement and to bring people into this political belief.

ZAKARIA: And the end goal being the overthrow of the government of the United States, correct?

BELEW: That's right. And, I mean, when we talk about that, it doesn't mean that every person in this movement has that goal. But certainly the imaginary adopted by many in the movement has to do with a white homeland and eventual ethnic cleansing and then the construction of a white nation on the soil that currently is held by the United States.

It's important to remember that the nation at the heart of white nationalism is not the United States. It's the Aryan Nation. The idea is about a shared white polity that is fundamentally opposed to the interests of the United States. But this question of how could they possibly do it I think is really important and it's one that the history can shed light on. We find them in the dystopian novel, "The Turner Diaries," which is also sort of a manual for the movement, the answer to that question. And it lays out this program by which these acts of sort of guerilla violence and mass attack can -- these activists believe will awaken other people to the imminent danger to the white race posed by many of the social issues we've just talked about.

And to them, this threat is so self-evident that all they need to do is awaken people and white people will rise up in race war and bring about this very radical change to the world. I think having that serious understanding of how these people believe it could work and the frame that they're acting in is an absolutely necessary first step to a better public response to white power violence.

ZAKARIA: Professor Belew, pleasure to have you on. Thank you.

BELEW: Thank you.

ZAKARIA: Next on GPS, if anyone had any doubt that the U.S. and China are in an economic war, those doubts were dashed this week. The two nations entered into an ever nasty a game of tit-for-tat. What is next? And is anyone winning here? I will talk to former Treasury secretary Larry Summers when we come back.

(COMMERCIAL BREAK)

[10:27:17] ZAKARIA: The world's two largest economies are now in a trade war. And in recent days the tit-for-tat escalated even further. Trump threatened a large new round of tariffs. Beijing said it would stop buying American farm products. After Beijing let the value of the renminbi fall on Monday, the U.S. Treasury secretary labeled China a currently manipulator.

So who is going to win this war? Is anyone?

Joining me now is Larry Summers who served as the nation's 71st secretary of the Treasury. He is the president emeritus and now a university professor at Harvard.

Larry, welcome. How worried are you that this could spiral downward into something worse?

LARRY SUMMERS, FORMER TREASURY SECRETARY: I think we're probably at the riskiest moment for the American and world economy that we've been at since the financial crisis. That doesn't mean we're going to have another crisis of that magnitude. That would be a very, very great surprise. But it does mean, if you look at the way markets have behaved, the bond markets, if you look at measures of business sentiment, that we're probably at the riskiest moment in terms of recurrence of recession that we've been in since the financial crisis, and some of that has to do with how long the recovery has gone on and the inevitable build-up of imbalances, but a great deal of it has to do with the uncertainty and risks created by what I think is a rather foolish sadomasochistic and foolish trade conflict. ZAKARIA: A lot of people say, well, look, maybe we are suffering, but

the Chinese are suffering more. Is that -- is that true in terms of the balance of power?

SUMMERS: So first I don't think the question of whether our sadism is bigger than our masochism with this trade conflict is actually the right question. The right question is, are we advancing American interests? And I don't think there is any question that American workers are going to be poorer, American companies are going to be less profitable and the American economy is going to be worse off because of the course we're on.

We are losing very substantial amounts in terms of uncertainty, reduced investment, reduced job creation for the sake of benefits that are very unlikely to be a substantial magnitude.

[10:30:00]

Fareed, you've pointed out, I've pointed out, all the evidence is that when you engage in these tariff strategies, you spend more than a million dollars a year per job saved. And probably, ultimately, when you trace it all through, you destroy more jobs than you create.

Will it hurt China? Yes, it will hurt China. Perhaps it will even hurt China a bit more than it hurts us, although China doesn't have an election coming up 15 months from now. And so I wonder whether they might not have greater capacity to absorb pain.

But I don't think this is an attractive strategy at all. And I think it also risks our national security in a quite profound way because it fuels and encourages Chinese anti-Americanism and it makes us seen as a less reliable partner around the world, which is problematic for our various security alliances.

ZAKARIA: The background condition for this, Larry, is that a lot of people feel that China essentially took away a large number of the industrial jobs, the manufacturing jobs in the United States through unfair trade practices. And so we have to stand up to them in some way.

There is a lot of sympathy on both sides of the aisle. Democrats, as you know, say that is that fundamentally true? Did China steal America's industrial base?

SUMMERS: No. I think when it's stated that boldly is much more wrong than right. The key point, Fareed, is that people see the costs and they don't see the benefits. Yes, there are imports from China and, yes, they sometimes displace U.S. jobs. But many of those imports don't reflect any kind of illegal trade practice. They simply reflect the fact that China was able to grow and make its economy more productive and more competitive.

But the more fundamental point is, yes, there is job destruction, but there is also job creation, job creation because we export to China, job creation because American producers are more competitive when they have lower cost inputs, job creation because American workers have more spending power because they pay less, for example, for toys and other goods when we're able to import them from China, job creation because of the capital that has flowed into the United States and has helped hold interest rates down from China.

And the studies that don't just look at one part of the picture, the import job loss, but also look at the job creation benefits find that it's been pretty substantial and probably comparable to the job loss.

ZAKARIA: Larry Summers, always a pleasure. Thank you.

Next on GPS, the most important foreign fighting force in Yemen is pulling out. I am not talking about Saudi Arabia. Who is it and why is it so important when we come back.

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[10:35:00]

ZAKARIA: Now for our What in the World segment. I think the world has become desensitized to the war in Yemen, a conflict that has killed more than 90,000 people, left millions at the brink of famine and that the U.N. has called world's worst humanitarian crisis.

How desensitized? Well, the biggest development since the war began squeaked by last month with relatively little notice. I'm talking about the news that the United Arab Emirates is withdrawing most of its forces from the country, turning its back on the Saudi-led coalition more than four years into the war.

Saudi Arabia is the public face of the war, but its efforts have mostly been through the air, launching strikes that's still dominant, Houthi rebels whom they say are proxies from Iran. It is the UAE, Saudi's closest regional ally that fought on the ground and to devastating effect. Over the years, 5,000 Emirati soldiers trained 90,000 Yemeni troops, according to The New York Times.

As The Times notes, the Emiratis have been responsible for nearly every major ground advancement the Saudi coalition has made in Yemen, resting battlegrounds from the Houthis and Al Qaeda. That's because the UAE, a tiny country with about a million citizens, has the most effective army in the Arab world. Among gulf countries it has unparalleled counterterrorism

capabilities. Its troops have fought alongside Americans and Afghanistan, Kosovo and Libya, gaining valuable combat experience.

So why did the UAE decide to largely abandon the war? Earlier this year the U.S. Congress upset over the war in Yemen passed a bipartisan resolution that sought to end U.S. involvement in that war. Later, it passed resolutions banning arms sales to Saudi Arabia and the UAE.

These were significant moments. The U.S. Has long supported the war. But anger over the murder of Saudi journalist Jamal Khashoggi has led to increased scrutiny in Congress over a Gulf-Arab offensive that the U.N. has said may involve war crimes.

Trump vetoed those attempts by Congress to intervene. But as the Council on Foreign Relations, Steven Cook, points out, the UAE wants to maintain its alliance with the U.S. in the long term, and Trump will not be the president forever. The Emiratis made a decision. Get out of an unwinnable war before key elites in Washington sour on them.

What will be the effect of this drawdown? Well, Saudi Arabia could take this opportunity to negotiate a peace deal with the Houthis and get out of a war they are woefully unequipped to win.

Unfortunately, that probably won't happen. A major source of pressure against Houthis was the prospects Emirati-led forces squeezing the supply lines at the Port of Hudaydah, where much of the last year's fighting took place before the U.N. negotiated a shaky cease fire.

[10:40:00]

The port supplies most of the country's food and aid is a source of valuable tax revenue for the Houthi rebels.

But as Michael Knights of the Washington Institute points out, with the Emiratis leaving, the threat to the Houthi's port access is vastly diminished and so is the pressure on the rebels to sit down with Saudi Arabia. So the most likely outcome of the Emiratis leaving is somewhat grim. The war could become a forever war with each side grinding on, unable to win and unable to admit defeat.

The collateral damage, of course, will remain the same, the suffering of millions of Yemeni people.

Up next, is now the perfect time to sell stocks or buy them? When is the perfect time to buy a house, get married, go to a doctor? My next guest has the answers.

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ZAKARIA: Many big questions in life center around timing. When should I go to the doctor? When should I ask my partner to marry me? Some people will tell you just go with our gut. But my next guest has made a deep dive into the subject and has some scientific answers.

Last week when I was Aspen, sat down with Daniel Pink, who has written six best sellers. His most recent is When: The Scientific Secrets of Perfect Timing.

[10:45:00]

Welcome, Dan.

DANIEL PINK, AUTHOR, WHEN: Thank you. Thanks for having me.

ZAKARIA: So the biggest question I think people would have is when am I most productive as a human being.

PINK: Yes. There is a lot of good research on that in a number of different fields. And what it tells us is that in a given day, our cognitive abilities, our brain power does not remain constant over the course of the day. Our brain power changes over the course of the day. It changes in material ways and it changes in predictable ways.

ZAKARIA: One of the things that when looking at this kind of -- this cycle, it's led you to make a personal decision about when to go to a doctor, when to get a medical procedure. Explain this.

PINK: So this is incredible. So, basically, in my family, no one is permitted to go to an important doctor appointment or discretionary hospital visit in the afternoon. Here, Fareed, the evidence is overwhelming, anesthesia errors, four times more likely at 3:00 P.M. than at 9:00 A.M., hand washing at hospitals, which is the first line of defense against hospital-acquired infections, massive drop in the afternoons.

Doctors are much more likely to prescribe unnecessary antibiotics in the afternoon, more likely to prescribe opioids in the afternoon. Colonoscopies, doctors find half as many polyps in afternoon exams as they do in morning exams.

And this is just an example of how our premise is that it doesn't really matter what time of day we do things or we interact with others. And what the research tells us across literally 2,000 fields is it matters, it matters a lot because our brain power is not static over the course of the day.

And when you know that, you can make different decisions about what you do and you can make different decisions about your interactions with others.

ZAKARIA: All right. Social life.

PINK: Yes.

ZAKARIA: Love, friendships, what does timing tell us about all this?

PINK: There, the evidence is a little bit less locked down. But we can look at marriage. We can look at some interesting evidence from research done at the University of Utah, for instance, showing that marriages are more likely to last when people get married, first of all, after they have education, no matter what the education level is.

There are a lot of education effects on marriage, big-time especially now. People who are more educated are actually far less likely to get divorced. But there's even an effect for having -- getting married after completing your education no matter what level of education you have.

There is also some slight age differences. So you are more likely to stay married if you get married between 25 and 32.

Now, it doesn't mean if you get married at age 33, you're going to get divorced, or if you get married at 27. But there are some effects on that.

ZAKARIA: The most intriguing stuff I have seen about the social element, and you talk about this, is when you are happy in your life in terms of the life cycle. PINK: Oh, sure, yes.

ZAKARIA: Describe that.

PINK: This is a really, really powerful research. What's interesting about this is that this research is very international. We've seen this effect in something like 60 or 70 different countries. One of the things that we see is what's called a U-shaped curve of well- being, where if you plot well-being by age. You see people are fairly happy in their 20s and 30s, a little less happy in their 40s. 50s, mid-50s, that's the bottom, you and I. Then when people age, they get actually happier.

So counterintuitively, people say someone who is 50 is typically less happy than someone who is 70. And what's interesting about that research, and it's hard to figure out why, is that researchers have found this pattern in multiple countries. So if I were to show you the chart for , say, the U.S. and France and the UAE, you might not be able to tell the difference.

ZAKARIA: The part about that's intriguing to me is that people get really quite happy and satisfied in their 70s.

PINK: Right.

ZAKARIA: And explain why. There's a kind of intuitive answer there.

PINK: Yes. It's interesting. It's hard to lock down exactly the reasons why. We can look at some research like the research of Laura Carstensen at Stanford, who has shown if you look at the size of people's friendship networks over their age, starts small, expands, and then after about age 60, friendship networks, the size of them, just declines significantly, which seems superficially like a sad story. Oh, I'm old and I don't have any friends.

But what happens is, according Laura Carstensen's research, is that people actually make affirmative decisions to eliminate some of their friends, and they focus only on the core group of people. And when they focus, they have fewer friends, but closer friends. And that's one of the things that helps boost well-being later in life.

ZAKARIA: Daniel Pink, always a pleasure.

PINK: Thanks for having me.

ZAKARIA: And we will be back.

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[10:50:00]

ZAKARIA: You heard earlier in our show how President Trump doubled down with his tough talk on China, labeling that nation a currency manipulator earlier this week. But it is just the latest. Last week the White House followed unsuccessful trade talks by announcing new tariffs. The week before, the administration issued a memo attacking China's developing country status at the World Trade Organization.

It brings me to my question, which is which of the following nations also claim developing country status in the World Trade Organization, South Korea, Mexico, Singapore or Qatar?

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

My book of the week is The Professor and the Madman, a Tale of Murder, Insanity and the Making of the Oxford English Dictionary by Simon Winchester. As always, Winchester is a great story-teller.

I just got around to reading this book. It's been around for a while. But it is an unbelievable tale, one that reminds us of the extraordinary range, depth and beauty of the English language. It will be a perfect book for the beach.

The answer to my GPS challenge this week is all of the above. That is right, all four of these countries are considered developing countries in the World Trade Organization. If that doesn't surprise you, it should. South Korea and Mexico, like China, are members of the G-20, a gathering of the world's major economic powers. And in terms of GDP per capita, Singapore and Qatar both outrank even the United States, according to the World Bank.

[10:55:00]

But in the WTO, developing country is a self-proclaimed title, and that status brings economic benefits like more time to enact new trade rules and allowances for export subsidies.

Now, not all countries use these privileges. Singapore, for example, does not. But President Trump claims China has exploited these benefits for too long. Today, it is the single largest exporter of goods, and it has been every year since 2009. What's more, made in China no longer just applies to toys and textiles. Chin also exports more high-tech products than any other nation.

Trump says a compelling argument but the administration will more likely succeed if it is seen as reforming the WTO rather than trying to destroy it. You see, one of that organization's main jobs is to regulate and administer international trade rules already in place.

But now, the administration is threatening unilaterally to set new and independent trade guidelines if the WTO does not change its policy on developing countries in 90 days.

This isn't the first time Trump has jeopardized the world's main trade referee. The body's other core duty is to arbitrate any trade disputes, but that court may be defunct by year's end. You see, the United States has blocked the appointment of any new members. It could soon be too small to do this job legally.

China may be the battlefront for today's trade war but the rules-based international order is really what is at stake here.

Thanks to all of you for being part of my program this week. I will see you next week.

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