This is where we remember that Rob Schneider is an antivaxxer.
That clip cuts an important part: Colbert said that making a Washington Redskins fund for Native Americans is akin to making a "Ching Chong Ding Dong fund for Asian-Americans".
At the time, it was tweeted out of context by the Colbert Report's official Twitter and caused Michelle Malkin (who wrote In Defense of Internment) to start a "Cancel Colbert" hashtag. If anything, it was Colbert owning up to the inherent racism of his character by saying it was as bad as the Redskins' name. He stopped using the character too.
Colbert's racist caricature was pretty on brand for pre-social media casual racism, but he recognizes that it was wrong. Shane Gillis said racist shit a few months ago and couldn't even muster a decent "I'm sorry".
A few corrections here:
It wasn't Michelle Malkin, it was a girl named Suey Park. And the "Ching Chong Ding Dong" character appeared more than once on Colbert, but it was explicitly used to hold a mirror up to harassment of Chinese Americans, a frequent occurrence on Bill O'Reilly's program and now Jesse Watters. (Remember: the character of Colbert is a conservative idiot pundit.)
He acknowledged that the bit was no longer worth using because if satire isn't clear enough, then it's just casual racism.