1 00:00:00,200 --> 00:00:04,160 Speaker 1: Peter Lewis, Asia Business correspondent with US Now. Hy Peter, Hi, Heather, 2 00:00:04,720 --> 00:00:06,480 Speaker 1: So what do you take from this phone call? 3 00:00:08,280 --> 00:00:11,640 Speaker 2: Well, if you listen to Donald Trump, he says it 4 00:00:11,760 --> 00:00:13,880 Speaker 2: was very good. He says we're in very good shape 5 00:00:13,920 --> 00:00:18,720 Speaker 2: with China and the trade deal. He says China's invited 6 00:00:18,800 --> 00:00:21,720 Speaker 2: him to Beijing, which is accepted, and that was reported 7 00:00:21,760 --> 00:00:25,800 Speaker 2: and confirmed by China. What wasn't reported confirmed by China 8 00:00:25,920 --> 00:00:28,560 Speaker 2: was that Trump was also saying President She's going to 9 00:00:28,560 --> 00:00:31,680 Speaker 2: go to Washington. So it remains to be seen if 10 00:00:31,720 --> 00:00:34,839 Speaker 2: that happens. The thing is, though, when you look through this, 11 00:00:34,920 --> 00:00:39,000 Speaker 2: as you tend to do when you've examined more closely, 12 00:00:39,040 --> 00:00:42,600 Speaker 2: some of the stuff that Trump says, nothing has really changed. 13 00:00:43,240 --> 00:00:46,560 Speaker 2: There hasn't been a deal of any sort. All that's 14 00:00:46,600 --> 00:00:49,440 Speaker 2: happened is that the US President has said that high 15 00:00:49,520 --> 00:00:52,280 Speaker 2: level talks are going to begin, So there'll be the 16 00:00:52,400 --> 00:00:56,840 Speaker 2: US Treasury Secretary there, the Commers secret the trade representative. 17 00:00:57,120 --> 00:00:59,040 Speaker 2: And you have to bear in mind that the Chinese 18 00:00:59,080 --> 00:01:02,800 Speaker 2: team is led by Vice Premier Early Fame, and he 19 00:01:02,880 --> 00:01:06,600 Speaker 2: has a clear mandate from President She not catering to 20 00:01:06,959 --> 00:01:11,120 Speaker 2: American's demands at all without getting concessions in return, and 21 00:01:11,160 --> 00:01:13,800 Speaker 2: they're not going to give a single thing away unless 22 00:01:13,800 --> 00:01:17,720 Speaker 2: they get something offered by Trump first. And that's how 23 00:01:17,720 --> 00:01:19,760 Speaker 2: it went in Switzerland. You remember a few a few 24 00:01:19,760 --> 00:01:24,880 Speaker 2: weeks ago, China gave up absolutely nothing. Trump sort of 25 00:01:24,959 --> 00:01:28,800 Speaker 2: rolled back his tariffs. China match that, but didn't offer 26 00:01:29,040 --> 00:01:32,520 Speaker 2: anything else. And it's exactly the same here. You know, 27 00:01:32,560 --> 00:01:36,479 Speaker 2: there's no concessions at all, for example, on these contentious 28 00:01:36,560 --> 00:01:40,080 Speaker 2: issues of rare earth mineral exports, which is a big 29 00:01:40,120 --> 00:01:43,640 Speaker 2: sticking point and is doing a lot of damage to 30 00:01:44,080 --> 00:01:47,080 Speaker 2: American industry, the fact that they can't get hold of 31 00:01:47,120 --> 00:01:51,200 Speaker 2: these rare earths at the moments, which are essential for semiconductors, 32 00:01:51,320 --> 00:01:56,600 Speaker 2: all sorts of appliances for defense. No concessions there at all. 33 00:01:57,200 --> 00:02:01,120 Speaker 2: And if you look at the official New Agency Generile 34 00:02:01,240 --> 00:02:05,120 Speaker 2: News Agency's account of the meeting, that struck a far 35 00:02:05,200 --> 00:02:09,120 Speaker 2: less conciliatory tone in its account of a call than 36 00:02:09,160 --> 00:02:13,400 Speaker 2: Trump did. So you know that there seems all that's 37 00:02:13,400 --> 00:02:16,239 Speaker 2: happened is that we're at the beginning of a process 38 00:02:16,919 --> 00:02:19,519 Speaker 2: to try and see if the two sides can come 39 00:02:19,560 --> 00:02:22,040 Speaker 2: to some sort of agreement. But I think we're a 40 00:02:22,080 --> 00:02:24,840 Speaker 2: long way from saying that they have agreed to anything. 41 00:02:25,280 --> 00:02:27,560 Speaker 1: Yeah, China reckons that the phone call came about because 42 00:02:27,600 --> 00:02:30,440 Speaker 1: Trump asked for it. That seems again to indicate that 43 00:02:30,560 --> 00:02:31,720 Speaker 1: China's got the upper hand here. 44 00:02:31,800 --> 00:02:36,240 Speaker 2: Yeah, I think so. I think you know, the US 45 00:02:36,280 --> 00:02:42,519 Speaker 2: has really underestimated China here. They've underestimated their willingness to 46 00:02:42,960 --> 00:02:47,360 Speaker 2: hold out and not be bullied by these tariffs. They've 47 00:02:47,400 --> 00:02:52,320 Speaker 2: also completely underestimated China's strong card here, which is the 48 00:02:52,360 --> 00:02:56,000 Speaker 2: fact that it controls global production in these rare earths. 49 00:02:56,200 --> 00:03:00,239 Speaker 2: They're so critical and I don't think Trump anticipated that 50 00:03:00,680 --> 00:03:03,400 Speaker 2: China would hold them, and it's going to carry on 51 00:03:03,480 --> 00:03:07,520 Speaker 2: with holding them until the US is prepared to remove 52 00:03:07,919 --> 00:03:13,079 Speaker 2: its restrictions on things like exports in the video chips Ai, 53 00:03:13,240 --> 00:03:17,400 Speaker 2: software and hardware and all sorts of other things, you know, 54 00:03:17,440 --> 00:03:22,720 Speaker 2: having Chinese companies on these restricted lists, and the China's 55 00:03:22,760 --> 00:03:25,120 Speaker 2: not going to give up its control over rare earths 56 00:03:25,400 --> 00:03:29,400 Speaker 2: until the US does something first in those areas. And 57 00:03:29,440 --> 00:03:33,040 Speaker 2: that may be difficult because sort of putting China on 58 00:03:33,080 --> 00:03:37,680 Speaker 2: these entity lists spanning exports to China is about the 59 00:03:37,720 --> 00:03:40,640 Speaker 2: only thing that the Republicans and the Democrats can agree 60 00:03:40,680 --> 00:03:43,600 Speaker 2: on in Congress, So it may be very very difficult 61 00:03:43,680 --> 00:03:44,520 Speaker 2: to remove them. 62 00:03:44,800 --> 00:03:47,840 Speaker 1: Quiet this business with South Korea. Do you reckon now 63 00:03:47,840 --> 00:03:49,400 Speaker 1: that they've got a new president, they could put all 64 00:03:49,400 --> 00:03:51,160 Speaker 1: that turmoil behind them. Is it over? 65 00:03:52,280 --> 00:03:55,920 Speaker 2: No? Definitely not over. I mean the Career has an 66 00:03:55,920 --> 00:03:58,880 Speaker 2: advantage or the new president Lee has an advantage in 67 00:03:58,960 --> 00:04:02,960 Speaker 2: that his part, he controls Parliament and he's the president, 68 00:04:03,120 --> 00:04:06,920 Speaker 2: so that should in theory make it easier to get 69 00:04:06,960 --> 00:04:12,240 Speaker 2: policies through. However, he faces some really really big challenges, 70 00:04:12,320 --> 00:04:16,680 Speaker 2: not least the fact that Career is very very divided politically. 71 00:04:16,760 --> 00:04:19,800 Speaker 2: It's divided between young and old. It's divided between young 72 00:04:19,839 --> 00:04:22,279 Speaker 2: men and young women. So it's going to take a 73 00:04:22,320 --> 00:04:28,160 Speaker 2: lot of successful policies to really bridge that divide. And 74 00:04:28,200 --> 00:04:31,400 Speaker 2: it's got a huge problem on its economy. If there's 75 00:04:31,520 --> 00:04:36,159 Speaker 2: one economy in the world that depends on international trade, 76 00:04:36,360 --> 00:04:39,200 Speaker 2: it's self Korea. And if there's one economy in the 77 00:04:39,200 --> 00:04:42,800 Speaker 2: world that's been damaged more than anyone else by these tariffs, 78 00:04:43,279 --> 00:04:45,039 Speaker 2: it's solf Korea. You have to bear in mind that 79 00:04:45,120 --> 00:04:50,239 Speaker 2: eighty seven percent of Career's economy is international trade. If 80 00:04:50,279 --> 00:04:55,279 Speaker 2: the US imposes these twenty five percent tariffs that it's 81 00:04:55,320 --> 00:04:58,920 Speaker 2: threatening to do it will plunge the economy into recession. 82 00:04:59,040 --> 00:05:01,960 Speaker 2: Exports to the US a loan of about six to 83 00:05:02,040 --> 00:05:07,040 Speaker 2: eight percent of GDP, so the economy, which already contracted 84 00:05:07,320 --> 00:05:13,400 Speaker 2: in the first quarter, will slip into recession. So President 85 00:05:13,480 --> 00:05:16,480 Speaker 2: Lee has got a really big task on his hands 86 00:05:16,520 --> 00:05:20,360 Speaker 2: to try and deal with these tariffs. And you've also 87 00:05:20,440 --> 00:05:23,720 Speaker 2: got Donald Trump threatening to throw in the security issues 88 00:05:24,080 --> 00:05:27,480 Speaker 2: as well. He wants Career to pay more for its defense, 89 00:05:28,440 --> 00:05:32,080 Speaker 2: and this is going to be also very difficult for Career. 90 00:05:32,120 --> 00:05:35,400 Speaker 2: They're going to need an awful amount of stimulus to 91 00:05:35,520 --> 00:05:39,000 Speaker 2: try and offset the damage that's being done by to 92 00:05:39,080 --> 00:05:42,599 Speaker 2: the economy and also to pay for, you know, the 93 00:05:42,640 --> 00:05:47,200 Speaker 2: more for its own defense that the US claims it's 94 00:05:47,240 --> 00:05:48,240 Speaker 2: in effect paying for. 95 00:05:48,520 --> 00:05:50,200 Speaker 1: Peter, thank you for your tom We'll talk to you 96 00:05:50,200 --> 00:05:52,160 Speaker 1: again next week. You look after yourself. That's Peter Lewis, 97 00:05:52,160 --> 00:05:53,520 Speaker 1: our Asia Business correspondent. 98 00:05:54,120 --> 00:05:57,320 Speaker 2: For more from hither Douplassy Allen Drive, listen live to 99 00:05:57,400 --> 00:05:57,919 Speaker 2: news talks. 100 00:05:57,920 --> 00:06:01,120 Speaker 1: It'd be from four pm weekdays, or follow the podcast 101 00:06:01,200 --> 00:06:02,159 Speaker 1: on iHeartRadio.