119. Has Trump’s Madman Diplomacy Worked?

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1:26Welcome to The Rest is Politics US. I'm Katty Kay. And I'm Yadri Scaramucci. Good morning, Anthony. Good Monday morning. Very exciting news from Israel. I found the scenes of the hostages being released very moving. That's where we're going to start. I think ending the war in Gaza may be a little strong for today, but he's got the hostages home. Phase one is complete in this hostage and prisoner swap. Now some of the hard work continues. news. We've seen Donald Trump give an hour-long speech in the Israeli Knesset to lots of applause. He was basking in a victory round in Israel. So we're going to talk about that, how he really got it done, what it says about his peacemaking abilities, the deals he wants to do.

2:07He says he wants to quickly move on to Ukraine next. So he's racking up those deals that he needs to do ahead of the 2026 Nobel Peace Prize. We'll talk about that. Then in the second half, we'll come back and talk about how Donald Trump is using tariffs to manipulate the market. We saw extraordinary events on Friday after Donald Trump truthed that he was not going to meet Xi Jinping and he was going to put 100 % tariffs on China. Marcus didn't love that, not surprisingly. So over the weekend, what do you know? He truthed something else. And we'll talk about these market manipulations. But first of all, Mr.

2:43Scaramucci, it is Monday. I don't know if you went to church yesterday. I know you are a churchgoer. I am not a churchgoer, but you are a churchgoer, which is very nice. My daughter is a churchgoer. So I'm assuming that you have a good chance of going to heaven. I'm going to leave that up to God, obviously. I've been to enough confession, so who knows? You may have done your confession time. I usually go to mass at 5 p.m. on a Saturday because it's a more convenient time. But anyway, Donald Trump, we have some tape, right? So let's roll the tape. Go ahead. You had talked a couple weeks ago, you were doing an interview, and you talked about how you hoped to end the war in Ukraine because it might help you get into heaven.

3:24How does this help? Does this help? I mean, you know, I'm being a little cute. I don't think there's anything going to get me in heaven, okay? I think I'm not maybe heaven bound. I may be in heaven right now as we fly an Air Force One. I'm not sure I'm going to be able to make heaven. All right. First of all, the guy deserves a tremendous amount of credit. Some of our viewers obviously despise Trump. You know, my feelings have been pretty open about it, but he deserves credit for putting the pressure. And I'm going to allow you to analyze that for us, how he put that pressure, because you know that it's roughly the same peace deal as Blinken and President Biden put together, couldn't get it done, couldn't pressurize Bibi Netanyahu.

4:11but mr projection donald trump is worried about something caddy there could be an epstein bomb in his midst right eric swalwell is tweeting last week i've talked to members of the republican caucus here in the house and they're ready to split from trump they have seen the epstein files do not like the epstein files and he's signaling you know he signaled to the generals i'm out of shape and something's wrong with my leg. I can barely get down the steps at Air Force One. Now he's telling Ducey from Fox News he's not going to heaven. And who would know better than Donald Trump whether or not he's going to heaven, Katty?

4:53You just said it was up to God whether he's going to heaven or anybody's going to heaven. What's your reaction to him saying it? I leave it up to God whether or not I'm heading there, but go ahead. I think you're right. With Donald Trump, a wise Trump ally once said to me, you know it's either projection or confession. and in this case there could be some projection. I heard it and I also thought one other thing which is that is there an element of Trump blaming the libs again you know that however much I bring peace to the world I can't get the Nobel Peace Prize the liberals are never going to say that I should go to heaven.

5:27He has this kind of you know I can save the world but I'm still a victim thing a little bit going on so I wondered if there was a touch of that but it could just be this could just be confession so i'm going to move over to the peace process and and so forth but i i wanted to bring this up at the beginning of the show because there's deflation there he looks deflated yes he gave a rousing speech i'm sure he was energized by that but he's heading into israel deflated he deserves credit for this caddy i'm an objective enough person to tell people he deserves credit we can take people through the ways he deserves credit i've said on this program before there's good trump and there's bad trump and this is the good parts of trump he was able to put enough pressure on netanyahu and he was able to use his relationships with the other leaders in the region to really push this peace process and again it's a ceasefire Just reminding everybody, it is a ceasefire.

6:28Hamas may or may not go easily here. I don't think there's any, when I've read through the 20 points, I don't think there's any real outcome where Hamas has lots of political power in the region anymore. But we'll see. But what's your reaction to it? How did he get this done, Caddy? And do you think he deserves credit as well? Yeah, I think he absolutely deserves credit. And you see that in the response to him in Israel today, not just in the Knesset, but out on the streets of Tel Aviv today. It was an interesting moment during the speeches preceding Donald Trump, Bibi Netanyahu gave a very long speech as well, which, by the way, Trump kind of criticized him for saying, I didn't know you were going to speak for so long.

7:07Hold on a second. This is all meant to be about me. and in hostage square they started playing bb's speech on a loudspeaker and there were boos uh donald trump is not getting booed he is getting welcomed as air force one flew over tel aviv there were cheers from people on the ground so trump is popular bb is not popular how did he get it done and joe biden didn't get it done i think there were a few things first of all it was interesting listening to jd vance who was on all of the sunday shows yesterday who talked about the unconventional nature of Donald Trump's diplomacy. He said, you know, diplomats have always done it a certain way.

7:42It's this, again, it's this slightly populist message of the experts are wrong, is effectively what J.D. Vance was saying. And the experts have got this wrong and the Biden team did it the conventional way, even though this is kind of the same plan. And Donald Trump comes in and he uses unconventional means. And the unconventional means he used in this instance was getting his son-in-law, Jared Kushner, who has close business relationships with many of the Arab leaders in business deals that some people may raise an eyebrow at because he is the president's son-in-law and he's making a lot of money in the Middle East.

8:19But Trump realized he could use his son, Jared Kushner, who is trusted by Gulf leaders to also come to the table and put pressure on Hamas. So he managed to work this from both sides. The key moment, as we said on the podcast last week, was the bombing of Doha, which was a mistake by the Israeli government. And that also gave Donald Trump a window when Netanyahu was vulnerable and weaker because this had been a mistake. And he was also furious because he had not really been given a heads up. And he didn't scold Bibi Netanyahu in public, as Joe Biden had done. So he managed to keep that relationship going.

8:58And it was. I think Vance was right. This was an unconventional approach to diplomacy that many people thought wouldn't work. But Donald Trump managed to bring this together. And it was by finding the right ways to put pressure on both parties. I think it's also worth pointing out that you have an interview with the Qatari prime Minister saying, listen, we deliberately separated off the hostage deal, which the hostage prisoner swap from the long-term stuff, because if we tried to get this all done altogether, the hostage prisoner deal wouldn't have happened. So there's also a realization from people in the region and in the White House is my understanding that this is not the easy part.

9:41Hostage negotiations are difficult, but this was the easier part. And now the question everybody has is, does Donald Trump's focus stay on this because this is going to take months or years. I mean, we're seeing the pictures of Gaza, right? There's already fighting today. Day one of this so-called peace process, 27 people have been killed by Hamas in Hamas fighting against clans in Gaza City. There are reports that Hamas is executing Palestinians in order to reassert their authority. They've called up 7 ,000 guards and citizens to be part of a security force. You're right. Hamas is not necessarily going anywhere fast.

10:21And that means the continued attention of Donald Trump. And do you think he's going to do that? I mean, what's, you know, what do you think he is now having got this moment, his applause in the Knesset, the cheers in the streets of Tel Aviv? Does he stick with this? What do you reckon? You know, it's unclear. It's the Middle East. So it's very hard to predict things. It's going well right now. We should savor that moment. These lives that were returned after two years, two years, it's just extraordinary pain. 750 plus days. So I want to ask you this question though. Jared Kushner is a$55 billion deal.

11:05He's teamed up with the Saudis and he's going to buy and take private the video game maker, electronic arts, electronic arts media. Fine, no problem there. He's spent four years in the administration building terrific relationships with the Middle East. I was at a dinner three years ago, I guess it was 2022, at the palace with MBS was there. Jared sat right next to him. I was at another table, but it was a beautiful dinner. I applaud Jared Kushner's ability to build these relationships. And I also believe Jared Kushner is a very smart guy. I've listened to more than one podcast that he's been on describing the Middle East.

11:52He's well read on it. And he's done a very good job, in my opinion, as an envoy. But my question to you is the world of separating business and politics in the United States now over. because i know that there are righteous sniffing ethicists that would look at this and they would say okay this is bad news you can't have the politicians and the business leaders this close together because that will create tremendous amounts of corruption and the common person in the united states will lose faith in the process which is why we've always tried to separate the business from the politics. But is that over, Katie?

12:35Because when you poll this stuff, by the way, because I looked over the weekend at the polling on this stuff, the Americans seem indifferent to Donald Trump making a couple of billion dollars. You're shaking your head, so you're agreeing with me. And the Americans seem indifferent. Hey, if Jared Kushner can help bring home the hostages and he's getting a$55 billion deal with the Saudis, MBZ told Jared and three years ago Mohammed bin Zayed yes MBZ the United Arab Emirates president of the UAE personal friend of mine know him forever he said to Jared and I quote you're going to be the guy that helps to deliver the peace you have the subtlety you have the understanding and more important than all of that you have the trust of all these people so I want to give Jared the credit for all this but the question I have is are we going in a direction now where the politics and the business of people are going to look at the politics say hey this is a way for me to make several billion dollars for myself and katie what are your thoughts on that and where do you think we're going from here i think that's you know super interesting points antony i mean it's a very interesting way of framing this moment ironically i interviewed jared early on in the first trump administration he said to me you know, the only person that can bring peace to the Middle East is my father-in-law because he has negotiating skills like nobody else does.

14:01We're going to do the thing that no one else has managed to do because he is a unique person. So it's kind of ironic if actually it turns out to be Jared and his relationships that actually have brought this home. And I think we need to caveat this whole conversation with peace in the Middle East. We're on day one. This is a long process. Let's see what happens next. But on the business stuff, do you remember when the Qataris gave the plane to Donald Trump? You and I were both quite critical of that. And a lot of people were critical of that because it was such overt transactionalism. And how do you know America's national security interests are best served by the Qataris giving large gifts to the president.

14:45And this is not exactly the same, but it's in the same family of business politics negotiations and deals, right? Jared Kushner makes an awful lot of money because he is Donald Trump's son-in-law from the Middle East. Maybe he's a very good businessman and he would have made some of that money anyway. But he leaves the White House after the first term. And even before he's left the White House, he's already announced a very big investment from the Saudis for his investment fund. And now he's used that to help bring these hostages home. And I think nobody, certainly nobody in Israel, nobody in the Middle East in this instance is going to look too finely, closely at the fine print there.

15:30But what happens if those countries suddenly don't have America's best interests at heart or want the White House to do something that is not in America's best interests or regional security's best interests. It is a complicated and sensitive way to conduct negotiations. Now, the White House would say, hold on a second, Hunter Biden on the board of Burisma, exactly the same thing, making money out of his president. And I think that's a fair, a totally fair criticism. Hunter Biden should never have been, I think, on the board of Burisma. But if Hunter Biden shouldn't have been on the board of Burisma, should Jared Kushner be making lots of money out of his connections to the White House, even though in this instance he was managing to leverage them.

16:15I say this as a mother, that if I was the mother of one of those hostages, I would have sold my soul to the devil to bring my child home without a question. So it is complicated, but in this instance it worked. It doesn't mean that it's in America's best interest always or that this should ideally be the long-term way that america conducts diplomacy is that too pious of me i think it's wrong caddy i couldn't do it okay there's a reason why i'll never be as rich as these guys because i look at these certain situations okay so i'm not going there i'm not doing that but there's certain other people that are like hey this doesn't bother me at all.

17:00And there's a real politic to it, meaning that this is the way the world works now and drop your piety and just work with the world the way the world works. What do you think the downside is? Paint the scenario for me that is that this doesn't work out. The image of America. And, you know, I've, you know, as you know, I've been writing a book, I've been spending some time on what the image was for America. And they say this also about the United Kingdom, that it's an experiment of shopkeepers rising. It's the experiment of the ordinary individual rising to power in a government to do extraordinary things.

17:41And there's an expectation in these countries of some level of fairness. And so when you are conjoining the business aspects with the politics, you're going to lose a lot of people. A lot of people are going to look up from their places in life. The place I started, as an example, you're going to look up and say, oh, okay, wow, it's really not fair at the top. There's a feeding frenzy at the top, and they're going to leave me behind. They're not going to give me the chance, based on my merit, to make it there. Now, somebody could then come in, the chorus could then come in, Anthony, you're incredibly naive.

18:22This is how it works. This is how it's worked for centuries. Caddy just gave you the example of Hunter Biden and Burisma. This is how it works. Maybe so, but it is better when it works in the underground, Caddy. it's better because the aura of america and what america really represents to the world and to its own people we're going to lose something that i personally don't want to lose in america and that is that little kid's belief that he or she uh can make it he or she can rise in america and so when we have this funnel at the top uh and this is something our founders are very worried about it hey man you got to watch the corruption because when you get the corruption then you get the cynicism and when you get the cynicism then you slow down the economic growth you slow down the aspiration i look at it also from the from the other point of view not just i think you're right what is the message it sends around the country but also from america's allies and adversaries point of view that you know it's the kind of oval office on ebay right if you can pay enough you can buy your way in and maybe that's you know what governments have always done but when it's done personally like this around family members i think everyone in this white house would say hunter biden was corrupt and i think we're seeing the same thing happening whatever what about is by the way how many palestinian prisoners were freed in exchange for the 20 living hostages It was close to 2000.

20:00I think it's 1950. And that some of those are in the West Bank, and they've gone back to Ramallah, and some will go back to Gaza. I want to react to that. Okay. So in a free people, in free nations that have democratically elected officials, the life is more sacred and the life is more valued. And so think about what Americans have done to get their hostages back or Americans have done to get their servicemen back, democratically elected leaders. you just gave a wonderful rendition of what you would do as a mother but then contrast that into totalitarian nations in terms of how they deal with hostage situations or how they deal with prisoner exchanges and so you just told me we went a hundred to one 100 people to one person of the free nation of israel the democratically elected leaders and there's another thing that's being said there is that these hostages are getting taken for a reason these hostages have huge value particularly when they're taken from free nations and and so there's a lot there caddy and so so to me let's not forget that the israelis uh let go people that were serving life sentences some of them were involved in terrorist activity some of them were involved in murder of their citizens, but they value the life of those 20 people in a way that I would want my leaders to value me or you or our children.

21:39And so I applaud the Israeli leadership for that. Yes, but that is where the criticism from the Israeli public of Bibi Netanyahu is the strongest, right? Because what they are saying is, hold on a second. And yes, you do value, we've got the hostages back, but you could have done this earlier, Mr. Prime Minister. You could have brought our loved ones home and there would be more of them who were still alive. So the Israelis are still waiting for the remains. Some of those hostages could have come home alive if this deal had been done earlier. And the criticism in Israel is that Bibi Netanyahu kept this war going, didn't bring the hostages home, didn't do this deal with Hamas because he wants to stay in power, because the right wing of his government wouldn't accept doing a deal with Hamas, and because he's afraid of indictment.

22:30And one of the most fascinating bits of Donald Trump's speech in the Knesset was where he turned to the president and said, okay, I think it's time you pardoned him. Getting directly involved, again, could be projection confession, right? Getting directly involved in Israeli politics. Will Bibi Netanyahu get pardoned? It was interesting watching the president. A lot of people from Bibi's side were clapping. Herzog was not clapping at that point. He was standing there slightly stone faced. So I think it would be I imagine that they'll try and see the I don't know. I don't know whether Bibi will get pardoned, but I just thought it was fascinating to hear Donald Trump.

23:10And as Trump said in that wonderful kind of transparent way of Trump's, he then kind of laughed and said, OK, that's enough with the controversial stuff. Let's get back to celebrating what a good day this is. He knew exactly what he was doing when he said that. The other thing I thought was interesting in the speech, just to kind of wrap up on the speech before we go to a break and talk about Trump and tariffs. The other interesting bit, I thought the other headline from the speech was where he extended an open hand of friendship to Iran and said, actually, that there are a lot of good people in Iran and we are ready when you are ready.

23:41He said, I'm here to make deals. All I want to do is make deals. That's what my life is. And there is a deal to be made in Iran. They might pretend there isn't one, but I know that they would like to have a deal. That didn't get any applause in the Knesset at all, actually, by the way. There was a lot of applause today for Donald Trump, which he was lapping up, but that didn't get applause. But he said it anyway. He stood up in the Israeli parliament and said, listen, we're prepared to make a deal with Iran. You know, he's on a roll. He called Zelensky twice this weekend. Zelensky nominated him for a Nobel Peace Prize.

24:10Netanyahu will nominate him for a Nobel Peace Prize for next year. He feels he is on a peacemaking roll at the moment. You texted me that and you said the isolationist president is making calls. He's calling around. He's become an interventionist president in a different way. There's something about Trump's personality that has enabled people. There's a space that gets created where people are like a normal president. I'm not doing it. An abnormal president. I'm doing it. Why did Ned and Yahoo give the bird to Joe Biden, but he relented for Donald Trump? Why is he able to flex on the Iranians?

24:48He's dropping bunker buster bombs on them. The Iranians are praising his peace initiative in Gaza. He says he might send tomahawks to Ukraine to start bombing into Russia. Okay, but they did clear several ICBMs went into Russian territory and blew up electrical facilities. Yes, with American intelligence help. Exactly. And the Russians are super pissed off about that. So he did clear that. Okay, so go ahead. What is it about Trump? Because I think there's an important historical point to be made here. I mean, Trump would say, and has said in public, it's the madman theory of diplomacy, that you want your rivals to be so on edge about what you're going to do, that they're happy to make a deal with you in case you go to the max.

25:33That's what his whole operating method is. It's the kind of Nixon approach. And I think to some extent, the fact that you have 20 world leaders in Sharm el-Sheikh, they're there for the Middle East, but they're also there because they know Donald Trump wants to see their face around the table, because they want to get face time with him and they want to make him happy. Because if he's not happy, what's he going to do? He's going to leverage his tariff regime that we're going to talk about in the second half and hit them with the most punitive tariffs. He might not bomb them as he bombed Israel, but he might tariff the heck out of them, which is an economic equivalent of bombing them.

26:09So I think that's what it is. But I think there's something else that I suggested earlier, which is that the whole essence of populism is that experts are wrong. And there was an interesting article by Bob Lighthizer, the former trade negotiator for Donald Trump from his first term in the FT this weekend, in which he said exactly that. The economists have got it wrong for years. And that is the premise of populism is that we're against the establishment and the establishment includes the experts. And we are the people that are going to break things and do things differently. And one of the really interesting lines that Netanyahu used today was, we were right.

26:50There were all these naysayers about bombing Gaza City, but we were right. I mean, one of the sad things today was that nobody really mentioned the Palestinians. I mean, Trump mentioned them in a sentence or two. And I think it is worth remembering that hopefully we'll get journalists into Gaza now. And there has been so much devastation in that city and so much suffering against Palestinians. And I fear that it's not over for them in Gaza. But I think that if I was to kind of put it in a theory, that's where I would put it. I mean, I think it's well said. Reagan was able to do that. Nixon was able to do that.

27:24Carter, not able to do that. Biden, not able to do that. You know, Clinton actually couldn't do that, but he sent so many cruise missiles into the Bosnia-Herzegovina conflict that they finally relented. But there's something about nihilism and there's something about being a nihilist where others look at it rationally and say, shit, this guy's crazy. He may pull something on me that I'm not ready to tolerate and they start negotiating. I think I said last week that if Trump pulls this off, he deserves a peace prize. I want to make it clear that what I mean by pulling this off is more than just what we saw today.

28:00It's the hostage exchange, which was the hostage exchange. I think the peace prize would come to any American president who manages to see through a real and lasting peace with a solution for the Palestinians. all of the hard work is still to be done the issue of hamas's weapons the issue of who governs the place the issue of who keeps the place secure the issue of what to do about the tunnels uh what do you do with uh the israeli how far do the israelis withdraw and for how long um what do you do with the enormous amount of anger uh and hatred that people in gaza now feel towards israel none of that has been resolved.

28:41And I have real questions about whether Donald Trump has the patience to follow this through and the commitment to keep going. There is not much track record of Donald Trump having the patience to see things through that get hard. And today was the great day for him. He loved the optimism in the Knesset, but that peace prize is contingent on real peace. And that's not what we yet have. Listen, I said last week, they'll never give it to him. But let me stipulate this. If he figures out a way to resolve the Ukrainian conflict, he figures out a way to get to what you're talking about, something more lasting in the Middle East with Hamas and Israel.

29:24and now that he's been praised by the Nobel Peace Prize recipient, works on Venezuela, and we're sitting here in October of 2026, he's going to get the Nobel Peace Prize. He will. Okay, so obviously the facts are fluid and smart people change their minds when they get presented different facts. There's good Trump and there's bad Trump. After the break, we're going to talk about bad Trump, but this is good Trump. He deserves the credit for this and people that are not willing to give them the credit for this are blindsided. They're either overly partisan or they just hate the MF so much that they can't give them the credit.