Secretary of State Rex Tillerson and Treasury Secretary Steven Mnuchin outline the past 48 hours of diplomatic discussions within the framework of the G20.
**Remember** as you read this transcript, e.v.e.r.y.t.h.i.n.g eventually boils down to economics and the seismic geopolitical shifts currently underway. (See Bottom for Important Detail)
[Transcript] 7:18 P.M. CET – SECRETARY MNUCHIN: Hi, everybody. I just want to highlight very briefly, and then Secretary Tillerson will go on, and then afterwards we’ll both answer a few questions.
But President Trump has had a very, very significant few days. I think, as you know, we went to Poland on Wednesday. In Poland, he met with 12 different leaders. We had bilats with Croatia and with Poland, as well as 10 other leaders at the Three Seas Conference where we talked about energy — the importance of the energy markets, the importance of supplying independent energy, infrastructure and opportunities there. I think, as you know, the speech which was just incredibly well-received, is part of our “America First But America Not Alone.”
Then coming here, the President has had very significant meetings at the G20 already. Yesterday, we had the opportunity to meet with Chancellor Merkel and her team. It was a very, very productive and friendly meeting. There were lots of areas for us to collaborate on that were very clear. We talked about economic issues, we talked about trade.
We had a very productive dinner last night — Secretary Tillerson, myself, General McMaster — with President Moon Jae-in and Prime Minister Abe and their teams, discussing the importance of what’s going on in North Korea and the issues there. And then today we’ve had, already, several other bilats, and tomorrow we have another six.
The President also participated in a very important session today on trade and an important session on the environment and the economy. So I would just generally say we’ve had very productive economic meetings. There’s been very substantive issues discussed. The North Korea issue has been discussed very significantly, about the escalation in North Korea.
And with that, I will turn it over to Secretary Tillerson to talk about his meetings, and afterwards we’ll take some questions.
SECRETARY TILLERSON: Thank you, Steve, and thanks for staying with us late these evening.
President Trump and President Putin met this afternoon for 2 hours and 15 minutes here on the sidelines of the G20. The two leaders exchanged views on the current nature of the U.S.-Russia relationship and the future of the U.S.-Russia relationship.
They discussed important progress that was made in Syria, and I think all of you have seen some of the news that just broke regarding a de-escalation agreement and memorandum, which was agreed between the United States, Russia and Jordan, for an important area in southwest Syria that affects Jordan’s security, but also is a very complicated part of the Syrian battlefield.
This de-escalation area was agreed, it’s well-defined, agreements on who will secure this area. A ceasefire has been entered into. And I think this is our first indication of the U.S. and Russia being able to work together in Syria. And as a result of that, we had a very lengthy discussion regarding other areas in Syria that we can continue to work together on to de-escalate the areas and violence once we defeat ISIS, and to work together toward a political process that will secure the future of the Syrian people.
As a result, at the request of President Putin, the United States has appointed — and you’ve seen, I think, the announcement of Special Representative for Ukraine, Ambassador Kurt Volker. Ambassador Volker will draw on his decades of experience in the U.S. Diplomatic Corps, both as a representative to NATO and also his time as a permanent political appointment.
The two leaders also acknowledged the challenges of cyber threats and interference in the democratic processes of the United States and other countries, and agreed to explore creating a framework around which the two countries can work together to better understand how to deal with these cyber threats, both in terms of how these tools are used to in interfere with the internal affairs of countries, but also how these tools are used to threaten infrastructure, how these tools are used from a terrorism standpoint as well.
The President opened the meeting with President Putin by raising the concerns of the American people regarding Russian interference in the 2016 election. They had a very robust and lengthy exchange on the subject. The President pressed President Putin on more than one occasion regarding Russian involvement. President Putin denied such involvement, as I think he has in the past.
The two leaders agreed, though, that this is a substantial hindrance in the ability of us to move the Russian-U.S. relationship forward, and agreed to exchange further work regarding commitments of non-interference in the affairs of the United States and our democratic process as well as those of other countries. So more work to be done on that regard.
I’d be happy to take your questions. You’re going to referee, Sean?
♦ Q Mr. Secretary, Nick Waters (ph) from Bloomberg News. Can you tell us whether President Trump said whether there would be any consequences for Russia to the interference in the U.S. election? Did he spell out any specific consequences that Russia would face? And then also, on the Syria ceasefire, when does it begin? And what makes you think the ceasefire will succeed this time when past U.S.-Russian agreements on a ceasefire have failed?
SECRETARY TILLERSON: With regard to the interference in the election, I think the President took note of actions that have been discussed by the Congress. Most recently, additional sanctions that have been voted out of the Senate to make it clear as to the seriousness of the issue. But I think what the two Presidents, I think rightly, focused on is how do we move forward; how do we move forward from here. Because it’s not clear to me that we will ever come to some agreed-upon resolution of that question between the two nations.
So the question is, what do we do now? And I think the relationship — and the President made this clear, as well — is too important, and it’s too important to not find a way to move forward — not dismissing the issue in any way, and I don’t want to leave you with that impression. And that is why we’ve agreed to continue engagement and discussion around how do we secure a commitment that the Russian government has no intention of and will not interfere in our affairs in the future, nor the affairs of others, and how do we create a framework in which we have some capability to judge what is happening in the cyber world and who to hold accountable. And this is obviously an issue that’s broader than just U.S.-Russia, but certainly we see the manifestation of that threat in the events of last year.
And so I think, again, the Presidents rightly focused on how do we move forward from what may be simply an intractable disagreement at this point.
As to the Syria ceasefire, I would say what may be different this time, I think, is the level of commitment on the part of the Russian government. They see the situation in Syria transitioning from the defeat of ISIS, which we are progressing rapidly, as you know. And this is what really has led to this discussion with them as to what do we do to stabilize Syria once the war against ISIS is won.
And Russia has the same, I think, interest that we do in having Syria become a stable place, a unified place, but ultimately a place where we can facilitate a political discussion about their future, including the future leadership of Syria.
So I think part of why we’re — and again, we’ll see what happens as to the ability to hold the ceasefire. But I think part of what’s different is where we are relative to the whole war against ISIS, where we are in terms of the opposition’s, I think, position as to their strength within the country, and the regime itself.
In many respects, people are getting tired. They’re getting weary of the conflict. And I think we have an opportunity, we hope, to create the conditions in this area, and the south is I think our first show of success. We’re hoping we can replicate that elsewhere.
MR. SPICER: Abby.
♦ Q Mr. Secretary, you spoke, when you were speaking of the ceasefire, about they’re being detailed information about who would enforce it. Can you give any more information on what conclusions were reached? And you spoke of the future leadership of Syria. Do you still believe that Assad has no role in their government?
SECRETARY TILLERSON: I would like to defer on the specific roles in particular of security forces on the ground, because there is — there are a couple of more meetings to occur. This agreement, I think as you’re aware, was entered into between Jordan, the United States, and Russia. And we are — we have a very clear picture of who will provide the security forces, but we have a few more details to work out. And if I could, I’d like to defer on that until that is completed.
I expect that will be completed within the next — less than a week. The talks are very active and ongoing.
And your second question again?
♦ Q Does the administration still believe that Assad has no role in the future government of Syria?
SECRETARY TILLERSON: Yes, our position continues to be that we see no long-term role for the Assad family or the Assad regime. And we have made this clear to everyone — we’ve certainly made it clear in our discussions with Russia — that we do not think Syria can achieve international recognition in the future. Even if they work through a successful political process, the international community simply is not going to accept a Syria led by the Assad regime.
And so if Syria is to be accepted and have a secure — both a secure and economic future, it really requires that they find new leadership. We think it will be difficult for them to attract both the humanitarian aid, as well as the reconstruction assistance that’s going to be required, because there just will be such a low level of confidence in the Assad government. So that continues to be the view.
And as we’ve said, how Assad leaves is yet to be determined, but our view is that somewhere in that political process there will be a transition away from the Assad family.
♦ Q Thank you. Demetri Sevastopulo, Financial Times. On North Korea, did President Putin agree to do anything to help the U.S. to put more pressure on North Korea? And secondly, you seem to have reached somewhat of an impasse with China in terms of getting them to put more pressure on North Korea. How are you going to get them to go beyond what they’ve done already? And what is President Trump going to say to President Xi on that issue tomorrow?
SECRETARY TILLERSON: We did have a pretty good exchange on North Korea. I would say the Russians see it a little differently than we do, so we’re going to continue those discussions and ask them to do more.
Russia does have economic activity with North Korea, but I would also hasten to add Russia’s official policy is the same as ours — a denuclearized Korean Peninsula.
And so I think here, again, there is a difference in terms of view around tactics and pace, and so we will continue to work with them to see if we cannot persuade them as to the urgency that we see.
I think with respect to China, what our experience with China has been — and I’ve said this to others — it’s been a bit uneven. China has taken significant action, and then I think for a lot of different reasons, they paused and didn’t take additional action. They then have taken some steps, and then they paused. And I think in our own view there are a lot of, perhaps, explanations for why those pauses occur.
But we’ve remained very closely engaged with China, both through our dialogues that have occurred face-to-face, but also on the telephone. We speak very frequently with them about the situation in North Korea.
So there’s a clear understanding between the two of us of our intent. And I think the sanctions action that was taken here just in last week to 10 days certainly got their attention in terms of their understanding our resolve to bring more pressure to bear on North Korea by directly going after entities doing business with North Korea, regardless of where they may be located. We’ve continued to make that clear to China that we would prefer they take the action themselves. And we’re still calling upon them to do that.
So I would say our engagement is unchanged with China, and our expectations are unchanged.
♦ Q And you haven’t given up hope?
SECRETARY TILLERSON: No, we have not given up hope. When you’re in an approach like we’re using — and I call it the peaceful pressure campaign. A lot of people like to characterize it otherwise, but this is a campaign to lead us to a peaceful resolution. Because if this fails, we don’t have very many good options left. And so it is a peaceful pressure campaign, and it’s one that requires calculated increases in pressure, allow the regime to respond to that pressure. And it takes a little time to let these things happen. You enact the pressure; it takes a little while for that to work its way through.
So it is going to require some level of patience as we move this along, but when we talk about our strategic patience ending, what we mean is we’re not going to just sit idly by, and we’re going to follow this all the way to its conclusion.
♦ Q Thank you. Mr. Secretary, I have issue — you just mentioned on the DPRK. We note China and Russia recently said — they asked North Korea to stop the — to freeze, actually, the nuclear activities, and also they asked the U.S. to stop the deployment of THAAD system. So did President Putin bring up his concern about the deployment of THAAD system? And also, what’s the expectation of President Trump on tomorrow’s meeting with President Xi Jinping, other than the DPRK issue? Thank you.
SECRETARY TILLERSON: The subject of THAAD did not come up in the meeting with President Putin.
In terms of the progress of North Korea and this last missile launch, again, those are some of the differences of views we have between ourselves in terms of tactics — how to deal with this. President Putin, I think, has expressed a view not unlike that of China, that they would support a freeze for freeze.
If we study the history of the last 25 years of engagement with various regimes in North Korea, this has been done before. And every time it was done, North Korea went ahead and proceeded with its program.
The problem with freezing now — if we freeze where they are today, we freeze their activities with a very high level of capability. And we do not think it also sets the right tone for where these talks should begin. And so we’re asking North Korea to be prepared to come to the table with an understanding that these talks are going to be about how do we help you chart a course to cease and roll back your nuclear program?
That’s what we want to talk about. We’re not interested in talking about how do we have you stop where you are today. Because stopping where they are today is not acceptable to us.
MR. SPICER: Margaret.
♦ Q Margaret Talev with Bloomberg. Mr. Secretary, could you give us a roadmap? Did you agree on a next set of talks between the President and Mr. Putin? And I guess I have kind of like a fluffy, color question on general impressions. We thought this was a 30-minute meeting. It ended up being 2 hours and 16 minutes. That’s a lot of time to watch those two leaders interact and also to just — whatever. Any insights on all those? Also, real quickly, any update on the dachas? Are they getting them back? And on Ukraine sanctions, any resolution or progress on those? Thanks.
SECRETARY TILLERSON: Okay, so the first question?
♦ Q Next talks.
SECRETARY TILLERSON: Next talks. There’s no agreed next meeting between the Presidents. There are agreed subsequent follow-up meetings between various working-level groups at the State Department. We agreed to set up a working-level group to begin to explore this framework agreement around the cyber issue and this issue of non-interference. So those will be ongoing with various staff levels.
♦ Q Who’s leading that? Is that Rob Joyce on the U.S. side?
SECRETARY TILLERSON: Well, it will be out of the State Department and —
♦ Q State.
SECRETARY TILLERSON: And the national security advisor’s office.
As to the nature of the 2 hours and 15 minutes, first let me characterize — the meeting was very constructive. The two leaders, I would say, connected very quickly. There was a very clear positive chemistry between the two. I think, again — and I think the positive thing I observed — and I’ve had many, many meetings with President Putin before — is there was not a lot of re-litigating of the past. I think both of the leaders feel like there’s a lot of things in the past that both of us are unhappy about. We’re unhappy, they’re unhappy.
I think the perspective of both of them was, this is a really important relationship. Two largest nuclear powers in the world. It’s a really important relationship. How do we start making this work? How do we live with one another? How do we work with one another? We simply have to find a way to go forward. And I think that was — that was expressed over and over, multiple times, I think by both Presidents, this strong desire.
It is a very complicated relationship today because there are so many issues on the table. And one of the reasons it took a long time, I think, is because once they met and got acquainted with one another fairly quickly, there was so much to talk about — all these issues.
Just about everything got touched on to one degree or another. And I think there was just such a level of engagement and exchange, and neither one of them wanted to stop. Several times I had to remind the President, and people were sticking their heads in the door. And I think they even — they sent in the First Lady at one point to see if she could get us out of there, and that didn’t work either. (Laughter.)
♦ Q Is that true?
SECRETARY TILLERSON: But — yes, it’s true. But it was —
♦ Q What was the timetable?
SECRETARY TILLERSON: Well, we went another hour after she came in to see us. (Laughter.) So clearly she failed.
But I think — what I’ve described to you, the 2 hours and 15 minutes, it was an extraordinarily important meeting. I mean, there’s just — there’s so much for us to talk about. And it was a good start.
Now, I will tell you we spent a very, very lengthy period on Syria, with a great amount of detailed exchange on the agreement we had concluded today — it was announced — but also where we go, and trying to get much greater clarity around how we see this playing out and how Russia sees it playing out, and where do we share a common view and where do we have a difference, and do we have the same objectives in mind.
And I would tell you that, by and large, our objectives are exactly the same. How we get there, we each have a view. But there’s a lot more commonality to that than there are differences. So we want to build on the commonality, and we spent a lot of time talking about next steps. And then where there’s differences, we have more work to get together and understand. Maybe they’ve got the right approach and we’ve got the wrong approach.
So there was a substantial amount of time spent on Syria, just because we’ve had so much activity going on with it.
MR. SPICER: Peter.
♦ Q Thank you very much. Mr. Secretary, can you say if the President was unequivocal in his view that Russia did interfere in the election? Did he offer to produce any evidence or to convince Mr. Putin?
SECRETARY TILLERSON: The Russians have asked for proof and evidence. I’ll leave that to the intelligence community to address the answer to that question. And again, I think the President, at this point, he pressed him and then felt like at this point let’s talk about how do we go forward. And I think that was the right place to spend our time, rather than spending a lot of time having a disagreement that everybody knows we have a disagreement.
MR. SPICER: Thank you, guys, very much. Have a great evening.
*Note* While this is happening Russia and China have blocked a U.S. led initiative to ramp up U.N. Security Council sanctions against North Korea. SEE HERE This factually plays right into the hands of U.S. President Trump (and his beyond brilliant strategy).
The U.S. tried to go through the U.N., it didn’t work – but we tried, and the world is on notice having seen us try. Now United States President Trump is free to directly confront trade and economic sanctions against China ‘unilaterally’.
There is no end to the level of economic pain Team U.S.A. (America First) is willing to inflict upon China, including bait. Serious bait upon China pressuring them to strike back by nationalizing U.S. private corporate assets.
Can you think of a faster way to drive economic patriotism than for U.S. companies to see China lash out and seize U.S. assets? Think about how fast U.S. manufacturing would return if corporations had their manufacturing overseas assets frozen or nationalized by the Chinese government.
Everything centers around trade, the underlying economics, and the leverage.
China knows that renegotiated trade deals with the U.S. (via Trump) are looming on the horizon. China has a very weak hand in any discussion for all of the previously aforementioned reasons. Hence:
♦ What does China need? Trade leverage.
♦ What does China have to leverage? North Korea behavior.
See how that works?
But from President Trump’s current perspective he has China in a position where either action or inaction creates an economic win for the U.S.
If China takes action against North Korea, real and substantive action, they might retain some of the structural benefits currently allowed with their trade position in the U.S. market. U.S. wins with binding Korean military issue now resolved.
If China doesn’t take action against North Korea, real and substantive action, President Trump begins a series of seriously punishing economic pressures against China that have almost no end. The U.S. wins with tighter trade policy driving greater benefit to U.S. national manufacturing and our economic base.
Action, or inaction, U.S. wins.
Inasmuch as President Trump looks at the economics of any specific nation’s behavior, so too does China understand a current need to create leverage to keep it’s economic position. North Korea quickly became the proxy tool for China to negotiate trade benefits.
[…] China has taken significant action, and then I think for a lot of different reasons, they paused and didn’t take additional action. They then have taken some steps, and then they paused. And I think in our own view there are a lot of, perhaps, explanations for why those pauses occur.
As you can see from Rex Tillerson’s quoted statement, President Trump knows China’s angle with North Korea.
Every action since Trump took office has been sequentially and painstakingly designed to end up confronting this dynamic. When you understand the reason for China to be backhandedly positioning the DPRK, you begin to realize there is no fundamental reason to be overly concerned about the military angle. It’s all about positioning for upcoming economic agreements.
Donald Trump limits those who know the strategy to a select group he chooses; and even within that group each participant often doesn’t know the intent of their role in the larger dynamic. However, he ensures each member has clarity of purpose in the specific action required. Action that he designs after a great deal of consideration.
There are not three aircraft carrier battle groups positioned off the coastal waters of Asia and North Korea because President Trump is positioning for military engagement, or positioning as a deterrent for DPRK military engagement. Thinking that’s the purpose is the popular review, but it, in the full scope of review, is incorrect.
Again, President Trump doesn’t bluff; he tells you openly what is the focus. President Trump has not mentioned one-single-word about using the military to engage the North Korean missile threat.
All of President Trump’s words are directed at the economics of the situation. All of them. Yet almost every review of analytical opinion of the situation is centered around the military. Why is that? Tradition? Traditional frames of reference?…
If the long-term strategy is economic, and with Trump almost everything is economic, the military inventories are more purposeful as enforcement mechanisms for a trade and mercantile blockade, not for military combat.
President Trump has positioned his advanced economic strategy to deal with the extremes.
President Trump knows the key to North Korea is China. Intellectual minds established in decades long perspectives of geopolitical events have not yet caught up to the reality of modern trade economics driving the behaviors of militaristic nations.
Those same minds are so entrenched in the larger, more popular, dynamic of advanced global logic, they can no longer contemplate national action shaped by anything other than applied force.
President Trump doesn’t apply force, he simply creates outcomes were the best alternative for the adversary is to change their approach according to their own best interests. Trump positions the interests themselves, he does not need the direct application of force.
President Trump doesn’t seek to apply force to the mouse running through the economic maze; he simply changes the location of the cheese, and the mouse’s travel responds accordingly.
China will take direct action to change the behavior of North Korea because it will be in China’s best interest to do so. Trump doesn’t bluff. Once he makes up his mind on a long-term strategy he simply works through each sequential move to obtain the objective.
There’s no limit to the economic squeeze President Trump is willing to apply toward China. The U.S. Treasury, the U.S. Dept of Commerce, the U.S. Dept of State, the U.S. Dept of Agriculture, these are all tools in the sequential approach that are far more powerful than bombs, planes and rockets.