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Speaker 1: Let's go to Asia. Peter Lewis joins us.

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Speaker 2: Hello Peter, Hello Andrew.

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Speaker 1: Let's go to Donald Trump and China. So how is

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Speaker 1: China reacting to the Prison's threat that he might put

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Speaker 1: a tim percent tariff on China as early as the

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Speaker 1: start of next month, which is early days away.

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Speaker 2: Very calmly so far, and in fact, they've said very

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Speaker 2: little about it, other than their Vice Premier, who was

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Speaker 2: speaking at Dabos earlier in the week, was saying that

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Speaker 2: there will be no trade, no winners in a trade war,

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Speaker 2: and that was repeated by China's Ministry of Finance. They

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Speaker 2: did say they would look after their own interests, but

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Speaker 2: apart from that, they really said nothing at all. And

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Speaker 2: I think there's several reasons for that. The first thing

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Speaker 2: is actually Donald Trump hasn't put any tariffs on anyone

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Speaker 2: just yet. It's threatened to, and clearly we'll have to

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Speaker 2: see what happens on February the first, and everything could

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Speaker 2: change then. But so far these are just threats, and

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Speaker 2: a lot of people think that maybe this is a

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Speaker 2: tactic to get countries that come to the negotiating table.

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Speaker 2: But also there is a feeling that so far China

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Speaker 2: is coming out of this quite well. Donald Trump seems

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Speaker 2: to be saving the worst of his threats in his

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Speaker 2: if elsewhere. If you remember back in the election campaign trail,

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Speaker 2: he was talking about sixty percent tariffs on China from

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Speaker 2: day one, the first day he was in office. Well,

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Speaker 2: so far all is talked about is ten percent, and

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Speaker 2: they're still not there yet. And this is less also

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Speaker 2: than the twenty five percent is threatening Canada and Mexico wins.

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Speaker 2: So there is a feeling that he's backtracking a little

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Speaker 2: on China. He doesn't really want a trade war and

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Speaker 2: he would rather find a way in which he could

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Speaker 2: do a deal, and the only way. The numbers we

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Speaker 2: are talking about here are not huge. China's trade surplus

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Speaker 2: with the US last year it was about three hundred

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Speaker 2: and sixty billion dollars. Now, even if Donald Trump imposed

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Speaker 2: ten percent tarots on that, and even if you assume

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Speaker 2: China responded in kind, Chinese GDP over the four years

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Speaker 2: will be about one hundred and twenty eight billion dollars less.

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Speaker 2: So that's thirty two billion dollars a year. When you

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Speaker 2: take into account that China's economy is about eighteen trillion dollars,

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Speaker 2: you're only talking about a loss of zero point two

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Speaker 2: percent of GDP, So these numbers aren't enough really to

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Speaker 2: get China excited, and they're not likely to make a

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Speaker 2: huge difference even if they were to come to pass.

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Speaker 1: And of course the tariffs will be paid by Americans

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Speaker 1: for who will have to pay a higher price for

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Speaker 1: their products as opposed to China actually having to pay it.

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Speaker 1: But I did actually talk to a Republican strategist during

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Speaker 1: the week who said, the thing about Donald Trump you've

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Speaker 1: got to remember is that he's a businessman, and when

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Speaker 1: it comes to negotiations, he starts high, but he often

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Speaker 1: ends out low or even sometimes nowhere at all. So

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Speaker 1: you're quite right, it's the opening salvo, and well done

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Speaker 1: to China for keeping calm so far. But meanwhile, in

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Speaker 1: the battle between China and America, we've got the whole

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Speaker 1: issue of TikTok. So where are we at with that?

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Speaker 2: Well, this is interesting because TikTok and now appears to

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Speaker 2: be key to doing some sort of trade deal. As

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Speaker 2: we know, they've be given us a seventy five day

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Speaker 2: reprieve from having the law which would have forced them

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Speaker 2: basically forced bike dance. The Chinese owner of TikTok to

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Speaker 2: divest it and either sell it to an American owner

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Speaker 2: or be banned. Now sort of, Trump is of the

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Speaker 2: view that somehow America has ownership of this or should

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Speaker 2: have ownership of it. He talks about a permit that

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Speaker 2: in effect, bike Dance needs a permit to operate in

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Speaker 2: the US. Without that permit, TikTok is worthless, and therefore

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Speaker 2: the US should have fifty percent of byte Dance. Now

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Speaker 2: it's an odd way of thinking, because, of course you

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Speaker 2: could argue that's true of every single company that operates

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Speaker 2: in the US. They need ultimately government permission to do so.

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Speaker 2: But nevertheless, it seems to feel that there is an

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Speaker 2: ownership issue here and that for Chinese media companies to

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Speaker 2: be able to operate in the US they need to

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Speaker 2: be able to have some sort of deal with the

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Speaker 2: US government. Now, of course, you could say, well, China

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Speaker 2: would never allow this in reverse, they would never allow,

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Speaker 2: for example, Google under complete American ownership to operate in China,

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Speaker 2: and it doesn't indeed. But nevertheless, maybe there is a

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Speaker 2: deal that could be done here that encompasses a number

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Speaker 2: of things together. It could resolve the TikTok issue and

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Speaker 2: China seems that even there has softened its approach. It's

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Speaker 2: always in the past said it would never allow TikTok

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Speaker 2: to be sold. It's now saying that this is a

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Speaker 2: matter for the company should be left basically as a

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Speaker 2: business decision. So the deal could perhaps involve TikTok, it

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Speaker 2: could include tariffs, it could include export controls, and maybe

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Speaker 2: even in some sort of dream scenario for Beijing, even

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Speaker 2: US policy towards Taiwan and the South China Sea could

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Speaker 2: be thrown into this all encompassing deal that Donald Trump

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Speaker 2: does with China.

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Speaker 1: And here's the thing, who might buy it?

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Speaker 2: Well? And that's interesting. He has mentioned before Elon Musk.

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Speaker 2: Elon Musk is a little bit peeved at the moment

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Speaker 2: because he's already started to complain about the fact that

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Speaker 2: x Twitter isn't allowed to operate in China and therefore

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Speaker 2: there isn't a level playing field now. In the past,

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Speaker 2: he's always been very very careful about criticizing China, so

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Speaker 2: this is quite unusual for him. And nevertheless, he is

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Speaker 2: a supporter of Donald Trump. Oracle has been mentioned. Larry

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Speaker 2: Ellison is also a porter of Donald Trump. But there

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Speaker 2: potentially could be several companies certainly big enough to be

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Speaker 2: able to strike a deal and would have the money

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Speaker 2: to do this. And TikTok is a very valuable asset.

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Speaker 2: It's valued at maybe something like thirty billion dollars. It's

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Speaker 2: got one hundred and thirty million US users. So certainly

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Speaker 2: there should be companies that, if they were allowed to,

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Speaker 2: if China agreed, could do a deal there.

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Speaker 1: It's also got an awful lot of American content creators

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Speaker 1: who make an awful lot of money from it and

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Speaker 1: awfully peeved about the fact that they might have their

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Speaker 1: income cut. So we wait to look at that. And finally,

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Speaker 1: Donald Trump and Jesiping as She had a chat on

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Speaker 1: the phone this week. And do we know what they

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Speaker 1: talked about.

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Speaker 2: Well, they say in their readouts that they spoke about

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Speaker 2: a lot of issues. They did talk about TikTok, They

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Speaker 2: talked about trade, They talked about fentanel, which is the

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Speaker 2: reason why Donald Trump is imposing these ten percent tarifts

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Speaker 2: on China in the first place. And again there there's

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Speaker 2: reason to be optimistic because the readout from both sides

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Speaker 2: was quite positive. On this call, President g said that

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Speaker 2: you know they can work together. He wants to do

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Speaker 2: everything possible to wait and make the world peaceful and

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Speaker 2: safe that he can work with President G on that.

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Speaker 2: President G said after the call that they both hoped

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Speaker 2: for greater progress on US China relations, and Chinese State

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Speaker 2: TV also painted a positive picture of the call. The

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Speaker 2: one red line really and the one warning that was

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Speaker 2: made was that the US has really got to take

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Speaker 2: the Taiwan question with prudence. That's what Jinwil News agency

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Speaker 2: said there. So clearly China is laying out where its

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Speaker 2: red lines are. But all the vibes from that call

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Speaker 2: tend to suggest a gain that there's a bit of

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Speaker 2: a thawing of relations. It's not as bad nowhere near

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Speaker 2: as bad as maybe people feared during the election campaign.

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Speaker 2: And perhaps they're moving slowly through all sorts of back discussions,

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Speaker 2: which for sure will be going on now towards some

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Speaker 2: sort of deal.

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Speaker 1: That is a very good point. People get very energized

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Speaker 1: and exercise about Donald Trump, and many of their worst

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Speaker 1: fears never come to pass. So Peter Lewis from the Asia,

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Speaker 1: I thank you so much for your time today.

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Speaker 2: For more from Hither Duplessy Allen Drive listen live to

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Speaker 2: news talks.

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