1 00:00:00,520 --> 00:00:03,800 Speaker 1: Hither dup se La Peter Lewis Asia Business correspondence with 2 00:00:03,880 --> 00:00:06,920 Speaker 1: US Now Hi, Peter, Good evening, Heather. Are we taking 3 00:00:06,920 --> 00:00:11,879 Speaker 1: this threat of tariffs from Donald Trump seriously? Yes, China 4 00:00:11,960 --> 00:00:17,240 Speaker 1: certainly is. He's threatening to add another ten percent on 5 00:00:17,400 --> 00:00:20,840 Speaker 1: top of any existing tariffs on Chinese goods. This was 6 00:00:20,880 --> 00:00:24,200 Speaker 1: part of his announcements the other day where he also 7 00:00:24,239 --> 00:00:27,120 Speaker 1: slapped his talking about slapping tariffs on Canada and Mexico. 8 00:00:27,560 --> 00:00:31,280 Speaker 1: It could be a negotiating tactic, for sure, but also 9 00:00:31,800 --> 00:00:34,000 Speaker 1: it could be exactly what he intends to do on 10 00:00:34,120 --> 00:00:36,479 Speaker 1: day one. He has the authority to do it. He 11 00:00:36,520 --> 00:00:39,479 Speaker 1: can just sign an executive order and it could be 12 00:00:39,720 --> 00:00:41,960 Speaker 1: a warning about what might happen on the first day. 13 00:00:42,479 --> 00:00:45,920 Speaker 1: What is interesting about this, and also unusual compared to 14 00:00:45,960 --> 00:00:48,440 Speaker 1: his first term, is that when he put tariffs on 15 00:00:49,240 --> 00:00:51,960 Speaker 1: Chinese goods the first time around, it was all about 16 00:00:52,280 --> 00:00:56,440 Speaker 1: two things. It's about reducing China's trade surplus with the 17 00:00:56,600 --> 00:01:00,680 Speaker 1: US and it was about protecting American jobs. Well, this time, 18 00:01:00,720 --> 00:01:03,400 Speaker 1: in his post on Truth Social he mentioned nothing at 19 00:01:03,400 --> 00:01:07,200 Speaker 1: all about the trade deficit with China or jobs. This 20 00:01:07,319 --> 00:01:11,440 Speaker 1: is about two different things. Now, it's about curtailing the 21 00:01:11,480 --> 00:01:16,000 Speaker 1: supply of drugs, and it's also about reducing illegal immigration, 22 00:01:16,080 --> 00:01:20,120 Speaker 1: where it's hard to know what China can do about them. 23 00:01:20,480 --> 00:01:25,280 Speaker 1: Certainly certainly can't do anything about illegal immigration into the US. 24 00:01:25,760 --> 00:01:29,039 Speaker 1: And on the drugs problem, the fentanyl problem, this has 25 00:01:29,040 --> 00:01:32,319 Speaker 1: really been one of the successes that the Biden administration 26 00:01:32,440 --> 00:01:35,920 Speaker 1: has had with China. They have cooperated on this for 27 00:01:36,000 --> 00:01:39,479 Speaker 1: quite a while now and have had success in reducing 28 00:01:40,000 --> 00:01:42,600 Speaker 1: the supply of that. So it's very hard to know 29 00:01:42,680 --> 00:01:46,240 Speaker 1: what China can do, but it will carry on when 30 00:01:46,240 --> 00:01:48,160 Speaker 1: it has been doing so far, which is that it's 31 00:01:48,200 --> 00:01:51,480 Speaker 1: preparing for the arrival of Trump. It's presuming that there 32 00:01:51,520 --> 00:01:53,720 Speaker 1: are going to be tariffs, that they will have an 33 00:01:53,760 --> 00:01:57,520 Speaker 1: economic impact. I mean, economists reckon that's ten percent. Tariffs 34 00:01:57,920 --> 00:02:00,800 Speaker 1: will reduce exports from China to the un US by 35 00:02:00,800 --> 00:02:03,160 Speaker 1: about fifteen percent, and that will knock about half a 36 00:02:03,200 --> 00:02:07,880 Speaker 1: percent off of GDP. China's preparing for that. It's looking 37 00:02:07,880 --> 00:02:12,120 Speaker 1: for new markets, new export markets. President Jiging Ping was 38 00:02:12,160 --> 00:02:16,120 Speaker 1: in Latin America just recently building up trade relationships with 39 00:02:16,200 --> 00:02:18,840 Speaker 1: countries around there. So I think, you know, we're already 40 00:02:18,840 --> 00:02:21,079 Speaker 1: seeing what their response is going to be to this. 41 00:02:21,639 --> 00:02:24,079 Speaker 1: How big is the drug trade from China going over 42 00:02:24,120 --> 00:02:27,639 Speaker 1: the American border. Well, this is the thing. I mean, 43 00:02:27,800 --> 00:02:30,320 Speaker 1: no one's quite sure. I mean that Donald Trump reckons 44 00:02:30,440 --> 00:02:33,400 Speaker 1: that a lot of it comes from China, and that 45 00:02:33,680 --> 00:02:35,360 Speaker 1: he has said in the past that China does it 46 00:02:35,440 --> 00:02:40,040 Speaker 1: deliberately to try and destabilize the United States. Now I 47 00:02:40,120 --> 00:02:43,760 Speaker 1: doubt that that is true. But fentanyl comes not just 48 00:02:43,800 --> 00:02:47,440 Speaker 1: from China, I mean Mexico. You know, probably the biggest supply. 49 00:02:47,480 --> 00:02:50,560 Speaker 1: It comes from just over the Suthern border in Mexico 50 00:02:51,440 --> 00:02:54,760 Speaker 1: rather than China. But nevertheless, I mean, gigen Ping has 51 00:02:54,800 --> 00:02:58,600 Speaker 1: been cooperative on this, and he has bordered officials to 52 00:02:58,680 --> 00:03:01,520 Speaker 1: work with a bien administry to try and make sure 53 00:03:01,560 --> 00:03:04,680 Speaker 1: that they stop any flow of this from from China. 54 00:03:05,240 --> 00:03:08,480 Speaker 1: Going on to going on to the US, Peter listen, 55 00:03:08,520 --> 00:03:11,120 Speaker 1: I see China's industrial profits have dropped by ten percent. 56 00:03:11,240 --> 00:03:15,040 Speaker 1: How stressed out are people about this? Well, it's I mean, 57 00:03:15,080 --> 00:03:18,840 Speaker 1: on the one hand, it's not bad news because the 58 00:03:18,880 --> 00:03:21,960 Speaker 1: previous month it was down about twenty seven percent, So 59 00:03:22,000 --> 00:03:24,640 Speaker 1: it is a slowdown from the previous month. When it 60 00:03:24,720 --> 00:03:29,560 Speaker 1: shows is that China's economy is still struggling. And you 61 00:03:29,600 --> 00:03:32,919 Speaker 1: know these what this measures is basically the profits of 62 00:03:33,000 --> 00:03:37,720 Speaker 1: the big manufacturing mining firms in China. They are struggling 63 00:03:37,720 --> 00:03:42,040 Speaker 1: to make money despite the increase in exports, partly because 64 00:03:42,360 --> 00:03:46,880 Speaker 1: of deflation. Prices are going down, so that's hurting their earnings. 65 00:03:47,000 --> 00:03:50,240 Speaker 1: And also the slump in the property markets is still 66 00:03:50,240 --> 00:03:54,400 Speaker 1: ongoing and a lot of the profits from industrial companies 67 00:03:54,480 --> 00:03:59,800 Speaker 1: come from supplying products to China's property sector, and that's 68 00:04:00,200 --> 00:04:02,080 Speaker 1: been in a slum for about four years now and 69 00:04:02,120 --> 00:04:06,360 Speaker 1: shows no sign of recovery. So this really shows that 70 00:04:06,720 --> 00:04:10,960 Speaker 1: despite all the stimulus that we've seen in the last 71 00:04:10,960 --> 00:04:13,560 Speaker 1: two or three months from the Chinese authorities, it is 72 00:04:13,600 --> 00:04:16,440 Speaker 1: really struggling to get through and make a big difference 73 00:04:16,440 --> 00:04:19,920 Speaker 1: to China's China's economy. Peter, thank you for running us through. 74 00:04:19,920 --> 00:04:21,440 Speaker 1: We're going to talk to you next week. Look after Yourself. 75 00:04:21,440 --> 00:04:24,039 Speaker 1: That's Peter Lewis, our Asia business correspondent based out of 76 00:04:24,040 --> 00:04:27,560 Speaker 1: Hong Kong. For more from Hither Duplessy Alan Drive, listen 77 00:04:27,720 --> 00:04:30,680 Speaker 1: live to news talks. It'd be from four pm weekdays, 78 00:04:30,839 --> 00:04:33,040 Speaker 1: or follow the podcast on iHeartRadio.