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Speaker 1: You're listening to a podcast from News Talk zed B.

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Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.

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Speaker 2: The will felt awfully edgy this week, didn't it for

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Speaker 2: most of the week as the market's gyrated in response

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Speaker 2: to the Trump terror plan, if plan is the right word,

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Speaker 2: and the capitulation came yesterday based on fears around the

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Speaker 2: US bond market. We got ninety days to achieve lord

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Speaker 2: knows what. Now. Worst hit was Asia? Really, their markets

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Speaker 2: move more than anyone else's. China is in a war

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Speaker 2: that's sitting at one hundred and forty five percent and

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Speaker 2: counting this morning. So we're to Asia Business correspondent Peter

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Speaker 2: Lewis with US pet up morning to you. Good morning Mike,

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Speaker 2: early hours of Bangkok, and I do appreciate you getting

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Speaker 2: up very early in the morning for us, so just

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Speaker 2: give us the vibe broadly speaking in Asia. But how's

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Speaker 2: it been handled, how's it been seen? What's the word?

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Speaker 3: Well, the markets have obviously reacted very strongly to this.

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Speaker 3: The big problem is that there is a lot of uncertainty,

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Speaker 3: and uncertainty leads to volatility in the markets, and we've

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Speaker 3: seen exactly that, big declines in the stock markets, followed

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Speaker 3: by huge rallies, also a big decline in the US

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Speaker 3: bomb markets, which is added to the uncertainty. And that

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Speaker 3: uncertainty isn't going to end because over the next ninety

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Speaker 3: days we're now going to see a whole host of

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Speaker 3: leaders trooping over to Washington to try and negotiate their

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Speaker 3: own deal on tariff, and there's no guarantee at all

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Speaker 3: that that will work. It could well be that there's

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Speaker 3: no deal at all for several countries because trade negotiations

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Speaker 3: normally take years, not ninety days. They're very very complex

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Speaker 3: sets of negotiations. They involve a lot of considerations, not

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Speaker 3: just trade, but a whole host of political issues as well.

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Speaker 3: So this is going to be a very difficult ninety days.

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Speaker 3: There's going to be a lot more and Z and

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Speaker 3: there's going to be a lot more volatility. And in particular,

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Speaker 3: we have to bear in mind that the tariffs haven't

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Speaker 3: gone away. There's still one hundred and forty five percent

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Speaker 3: tariffs on China, there's still the ten percent based tariffs

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Speaker 3: on every other country in the world. Canada and Mexico's

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Speaker 3: tariffs are still there. There's the tariffs on steel and aluminium,

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Speaker 3: tariffs on cars. There are a lot of tariffs left.

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Speaker 3: And what it means is that the average tariff rate

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Speaker 3: now on US imports stands at about sixteen percent. That's

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Speaker 3: the highest in over one hundred years. It was three

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Speaker 3: percent before Trump's second term started. So we've still got

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Speaker 3: a lot to deal with and that's going to lead

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Speaker 3: to a lot of volacility in the markets.

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Speaker 2: The one forty five for China is that a completely

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Speaker 2: separate thing that will unfold in its own way versus

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Speaker 2: the rist of Asia. Do you think all because China

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Speaker 2: is China, we're all in this together.

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Speaker 3: I think in some ways we're all in this together

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Speaker 3: because what happens to the Chinese economy affects the rest

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Speaker 3: of Asia. About fifteen percent of China's economy depends upon exports.

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Speaker 3: Around fifteen percent of that goes to the US. So

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Speaker 3: this could easily shave off a couple of percent off

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Speaker 3: of China's GDP because when tariffs are a one hundred

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Speaker 3: and forty five percent, effectively trade between those two countries

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Speaker 3: has come to a complete halt. And it really doesn't

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Speaker 3: matter anymore whether tariff's are fifty one hundred, one hundred

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Speaker 3: and fifty two hundred percent. At that sort of level,

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Speaker 3: businesses cannot export anymore. They simply can't be profitable at

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Speaker 3: that level of tariffs. So to all intents and purposes,

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Speaker 3: there's been a hard decoupling in trade between the u

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Speaker 3: U and China, and that affects the rest of Asia

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Speaker 3: and the Asia Pacific region, including countries like New Zealand

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Speaker 3: and Australia. A slow down in the Chinese economy of

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Speaker 3: that magnitude is a serious issue for New Zealand and

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Speaker 3: many other countries in the region.

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Speaker 2: I ain't that the truth, Peter, appreciate your time very much.

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Speaker 2: We'll catch up, saying Peter Lewis Asia Business correspondent with

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Speaker 2: us in ben Kok where it's about two thirty in

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Speaker 2: the morning.

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