1 00:00:04,960 --> 00:00:05,400 Speaker 1: Hilda. 2 00:00:05,480 --> 00:00:08,639 Speaker 2: I'm Chelsea Daniels and this is the Front Page, a 3 00:00:08,760 --> 00:00:16,000 Speaker 2: daily podcast presented by The New Zealand Herald. Over the 4 00:00:16,079 --> 00:00:18,320 Speaker 2: last few months or we've been able to talk about 5 00:00:18,360 --> 00:00:20,960 Speaker 2: when it comes to the economy, has been tariffs and 6 00:00:21,079 --> 00:00:23,800 Speaker 2: trade wars behind a lot of what Donald Trump's talk 7 00:00:23,840 --> 00:00:27,240 Speaker 2: has been about is his desire to see more manufacturing 8 00:00:27,520 --> 00:00:31,200 Speaker 2: done in the United States, and that includes everything from 9 00:00:31,280 --> 00:00:35,680 Speaker 2: steel and cars down to smartphones. But how realistic is 10 00:00:35,720 --> 00:00:39,199 Speaker 2: it to demand everything moves production to the US and 11 00:00:39,280 --> 00:00:42,080 Speaker 2: has Trump perhaps touched on a floor in how our 12 00:00:42,080 --> 00:00:45,280 Speaker 2: most popular products are made? Actually on the Front Page, 13 00:00:45,280 --> 00:00:49,320 Speaker 2: we're joined by business desks Deleiper Vonseca to discuss how 14 00:00:49,400 --> 00:00:59,280 Speaker 2: manufacturing actually works. So Deleiper took us through Trump's desire 15 00:00:59,360 --> 00:01:01,760 Speaker 2: to get everything made in the US. What are some 16 00:01:01,800 --> 00:01:04,840 Speaker 2: of the products or materials that he wants made at 17 00:01:04,840 --> 00:01:05,440 Speaker 2: home there? 18 00:01:05,840 --> 00:01:10,120 Speaker 1: Well, he's talked a lot about everything basically, and you've 19 00:01:10,120 --> 00:01:13,360 Speaker 1: actually raised by implication a really good point in there, 20 00:01:13,400 --> 00:01:16,240 Speaker 1: which is to some degree people are kind of wondering 21 00:01:16,280 --> 00:01:18,720 Speaker 1: what Trump is actually trying to do with the tariffs, 22 00:01:18,760 --> 00:01:22,039 Speaker 1: Like is this about relocating a whole bunch of manufacturing 23 00:01:22,720 --> 00:01:24,639 Speaker 1: or is it about raising a whole bunch of money. 24 00:01:24,840 --> 00:01:26,959 Speaker 1: Depending what day it is, it seems to be either 25 00:01:27,080 --> 00:01:31,240 Speaker 1: or answer. But broadly speaking, he had the start, had 26 00:01:31,280 --> 00:01:34,680 Speaker 1: said he was really concerned about all this manufacturing that 27 00:01:34,760 --> 00:01:37,440 Speaker 1: was going to China, and then you know, afterwards we've 28 00:01:37,440 --> 00:01:40,800 Speaker 1: sort of discovered that he's concerned about countries that are 29 00:01:40,880 --> 00:01:44,760 Speaker 1: basically allowing China to continue exporting through them. So you know, 30 00:01:44,920 --> 00:01:48,040 Speaker 1: that's countries like Vietnam and things where exception as China 31 00:01:48,120 --> 00:01:50,000 Speaker 1: is sort of sending goods that are then just getting 32 00:01:50,080 --> 00:01:53,160 Speaker 1: transshipped or it's kind of like a kind of like 33 00:01:53,200 --> 00:01:57,360 Speaker 1: a middleman sort of thing. And then more recently you 34 00:01:57,400 --> 00:02:02,160 Speaker 1: would have seen the memes floating around of Trump Ai 35 00:02:02,240 --> 00:02:07,360 Speaker 1: generated Trump putting together shoes in a switch shop, and 36 00:02:07,920 --> 00:02:10,880 Speaker 1: lots of jokes being made about how Trump is basically 37 00:02:10,919 --> 00:02:14,880 Speaker 1: just trying to get everyone a job in America making shoes. 38 00:02:15,120 --> 00:02:17,920 Speaker 1: He's basically at the start he was talking about high 39 00:02:17,960 --> 00:02:20,480 Speaker 1: value manufacturing that was what somebody wants, so and now 40 00:02:20,520 --> 00:02:24,560 Speaker 1: he's talking more about relocating all manufacturing to the United States. 41 00:02:24,680 --> 00:02:27,920 Speaker 2: Yeah, I mean, why is this such a priority for him? 42 00:02:28,160 --> 00:02:31,240 Speaker 2: What does he hope to gain politically from this pledge? 43 00:02:31,280 --> 00:02:36,400 Speaker 2: I guess the US made mantra is a big one 44 00:02:36,480 --> 00:02:36,880 Speaker 2: for him. 45 00:02:37,680 --> 00:02:40,799 Speaker 1: Yeah, I mean he sees this as like a job, 46 00:02:41,400 --> 00:02:43,520 Speaker 1: you know, when a job opportunity thinks that if he 47 00:02:43,560 --> 00:02:46,160 Speaker 1: goes and moves this manufacturing back, that that's going to 48 00:02:46,440 --> 00:02:49,520 Speaker 1: regenerate some employment. He thinks that there's some kind of 49 00:02:50,160 --> 00:02:54,520 Speaker 1: hostility towards China and that this will represent America being 50 00:02:54,639 --> 00:02:57,720 Speaker 1: kind of more dominant by bringing all this manufacturing back 51 00:02:57,800 --> 00:03:01,600 Speaker 1: into the United States. But actually, the world economy is 52 00:03:01,639 --> 00:03:04,840 Speaker 1: a really different place to what it was, you know, 53 00:03:05,160 --> 00:03:08,120 Speaker 1: post World War Two, or you know, even in kind 54 00:03:08,160 --> 00:03:13,320 Speaker 1: of recent decades. You don't just have one country manufacturing 55 00:03:13,400 --> 00:03:15,920 Speaker 1: one thing. It's actually one product will be a component 56 00:03:15,960 --> 00:03:18,000 Speaker 1: from a whole range of places. 57 00:03:18,240 --> 00:03:21,519 Speaker 2: What is the state of global manufacturing? It does seem 58 00:03:21,600 --> 00:03:25,240 Speaker 2: like basically everything these days is made in China or India. 59 00:03:25,360 --> 00:03:28,600 Speaker 2: Is that fair to say or is that a massive stereotype? 60 00:03:28,720 --> 00:03:31,800 Speaker 1: Well let's think. Let's think of a product, you know, 61 00:03:32,000 --> 00:03:35,560 Speaker 1: the iPhone fourteen, you know, right, so it's a symboled 62 00:03:35,600 --> 00:03:38,680 Speaker 1: in China, so you would say, right, it's manufactured in China. 63 00:03:39,080 --> 00:03:42,680 Speaker 1: It's a that's a Chinese product. Effectively, all these iPhones 64 00:03:42,720 --> 00:03:46,520 Speaker 1: are being manufactured in China, but China actually only produces 65 00:03:46,720 --> 00:03:49,640 Speaker 1: of the iPhone fourteen four percent of the value of 66 00:03:49,640 --> 00:03:52,880 Speaker 1: an iPhone. Right, the actual value of an iPhone, the 67 00:03:53,600 --> 00:03:57,960 Speaker 1: manufactured physical product is not so valuable then tough career 68 00:03:58,120 --> 00:04:00,320 Speaker 1: manufactured you know, twenty five percent of the kind of 69 00:04:00,360 --> 00:04:03,840 Speaker 1: components in there, Japan eleven percent, Taiwan seven percent, and 70 00:04:03,880 --> 00:04:05,920 Speaker 1: the US. In terms of the value of an iPhone, 71 00:04:05,960 --> 00:04:09,320 Speaker 1: it's actually contributing about thirty two percent of the value 72 00:04:09,360 --> 00:04:11,280 Speaker 1: of that iPhone. And if you look at who's making 73 00:04:11,320 --> 00:04:15,320 Speaker 1: the money off selling an iPhone, that's Apple, right, it's 74 00:04:15,360 --> 00:04:19,080 Speaker 1: actually not the manufacturer, you know, the manufacturer. If you're 75 00:04:19,120 --> 00:04:22,760 Speaker 1: talking about fox Con, it's a Taiwanese company in China, 76 00:04:23,000 --> 00:04:26,480 Speaker 1: that factory, and the factory's work is they're earning a wage, 77 00:04:26,800 --> 00:04:29,080 Speaker 1: but they're not making the massive profits that you get 78 00:04:29,120 --> 00:04:31,800 Speaker 1: from an iPhone. The massive profits come from the company 79 00:04:31,839 --> 00:04:34,680 Speaker 1: that's designing it, coming up with the idea and also 80 00:04:34,760 --> 00:04:37,600 Speaker 1: adding a lot of the highest value kind of components 81 00:04:37,640 --> 00:04:41,480 Speaker 1: and software to it. And that is basically still you know, 82 00:04:41,839 --> 00:04:44,760 Speaker 1: an American product in some ways when we talk about 83 00:04:44,839 --> 00:04:49,120 Speaker 1: you know this everything is being manufactured in a particular 84 00:04:49,160 --> 00:04:52,160 Speaker 1: country where it's China or India. That's true that there's 85 00:04:52,160 --> 00:04:56,680 Speaker 1: a lot of industrial sort of manufacturing going on, especially 86 00:04:56,760 --> 00:05:01,480 Speaker 1: not just China, but you know Vietnam and thailandishly some 87 00:05:01,560 --> 00:05:04,839 Speaker 1: of some of those other Southeast Asian countries as well. 88 00:05:04,920 --> 00:05:09,200 Speaker 1: But they are not necessarily contributing all of the value 89 00:05:09,200 --> 00:05:12,919 Speaker 1: of a product, and they don't necessarily control all the 90 00:05:12,920 --> 00:05:14,000 Speaker 1: profits from their product aid. 91 00:05:16,800 --> 00:05:19,520 Speaker 3: And that's not to say that making in China is bad. 92 00:05:19,640 --> 00:05:23,320 Speaker 3: I think made in China is really has changed a 93 00:05:23,360 --> 00:05:26,240 Speaker 3: lot over the years, and some of those factories have 94 00:05:26,440 --> 00:05:29,919 Speaker 3: cutting each technology that you can't find anywhere. It's the 95 00:05:29,960 --> 00:05:32,839 Speaker 3: reason why so many of our designers manufacture in China. 96 00:05:33,000 --> 00:05:36,440 Speaker 3: I think it is quite gyring to see a brand 97 00:05:36,560 --> 00:05:40,359 Speaker 3: that's so world renowned made in these factories. And it 98 00:05:40,440 --> 00:05:43,560 Speaker 3: might be certain categories. For example, you've got the footwear 99 00:05:43,600 --> 00:05:45,680 Speaker 3: in China, but then you've got the ready to wear 100 00:05:45,680 --> 00:05:47,960 Speaker 3: in Paris. So it's kind of like, I think it's 101 00:05:48,000 --> 00:05:50,760 Speaker 3: a good thing. The more the consumers educated, the better 102 00:05:50,800 --> 00:05:54,919 Speaker 3: we are, and it trickles down to how we consume locally. 103 00:05:59,279 --> 00:06:03,520 Speaker 2: Right, really set themselves up to be hubs for production, right, 104 00:06:03,560 --> 00:06:05,960 Speaker 2: So it's not like there's one factory making phones and 105 00:06:06,040 --> 00:06:09,320 Speaker 2: other factory making clothes. There are just hundreds of businesses 106 00:06:09,360 --> 00:06:10,919 Speaker 2: that work cohesively together. 107 00:06:11,400 --> 00:06:14,000 Speaker 1: Yeah, it's like a supply chain of components. And actually, 108 00:06:14,080 --> 00:06:16,920 Speaker 1: in some ways, this is where perhaps if Trump was 109 00:06:16,960 --> 00:06:19,200 Speaker 1: really thinking about it, this is perhaps where the danger 110 00:06:19,400 --> 00:06:22,800 Speaker 1: for America lies in the sense that China over the years, 111 00:06:22,880 --> 00:06:26,000 Speaker 1: you know, it's no longer really the cheapest producer. You know, 112 00:06:26,000 --> 00:06:29,280 Speaker 1: it doesn't have the cheapest laborers, doesn't have the cheapest workers. 113 00:06:29,400 --> 00:06:32,440 Speaker 1: But what it has now because it's been manufacturing the 114 00:06:32,480 --> 00:06:36,120 Speaker 1: iPhone for so long and other other products, it has 115 00:06:36,120 --> 00:06:39,400 Speaker 1: this whole ecosystem of companies. You know, no other sort 116 00:06:39,440 --> 00:06:42,560 Speaker 1: of country really has those small little manufacturers who can 117 00:06:42,600 --> 00:06:45,719 Speaker 1: then feed into the larger manufacturers and can really put 118 00:06:45,760 --> 00:06:48,919 Speaker 1: together a product like that. You know, somebody, there was 119 00:06:48,920 --> 00:06:51,960 Speaker 1: somebody from China recently who, to illustrate the point, pulled 120 00:06:51,960 --> 00:06:54,560 Speaker 1: out their lighter to me and he said, look, you 121 00:06:54,560 --> 00:06:56,480 Speaker 1: know this in one in one place in China, there's 122 00:06:56,520 --> 00:06:59,560 Speaker 1: light where there's lighters manufacturer within two hours or the 123 00:06:59,600 --> 00:07:03,039 Speaker 1: kind of opponent manufacturers of that. Now does that exist 124 00:07:03,080 --> 00:07:06,440 Speaker 1: in some place like New Zealand or the United States? 125 00:07:06,440 --> 00:07:09,480 Speaker 1: Not really? And so if if there was any kind 126 00:07:09,520 --> 00:07:12,840 Speaker 1: of break, diplomatic break, some kind of big issue Taiwan 127 00:07:13,080 --> 00:07:16,400 Speaker 1: or something else, then that would perhaps leave like the 128 00:07:16,480 --> 00:07:20,440 Speaker 1: United States vulnerable in terms of its industrial capacity if 129 00:07:20,480 --> 00:07:23,000 Speaker 1: it needed to manufacture some products. 130 00:07:23,240 --> 00:07:26,400 Speaker 2: You've visited one of these manufacturing areas in India before. 131 00:07:26,400 --> 00:07:29,440 Speaker 1: Hey, yeah, so, Asian New Zealand Foundation Center a group 132 00:07:29,480 --> 00:07:34,040 Speaker 1: of US over to India for a range of related 133 00:07:34,080 --> 00:07:37,280 Speaker 1: to the Raisina dialogues which lux and went and gave 134 00:07:37,280 --> 00:07:39,000 Speaker 1: a speech earlier in this year, and as part of 135 00:07:39,040 --> 00:07:41,720 Speaker 1: that we also went to this I guess you'd call 136 00:07:41,760 --> 00:07:45,400 Speaker 1: it kind of an economic zone, industrial park type arrangement 137 00:07:45,440 --> 00:07:47,920 Speaker 1: called Shri City, which is a huge bit of land 138 00:07:47,920 --> 00:07:50,480 Speaker 1: in the state just north of a next door to 139 00:07:50,520 --> 00:07:53,640 Speaker 1: Tummil Nadu and that area is Tami Nadu, is I 140 00:07:53,640 --> 00:07:58,080 Speaker 1: think India's most industrialized state, the place where Sri City 141 00:07:58,200 --> 00:08:02,920 Speaker 1: is located. That's also where you get the rockets where 142 00:08:02,920 --> 00:08:05,160 Speaker 1: India launches its sort of space missions, so you can 143 00:08:05,200 --> 00:08:08,520 Speaker 1: actually it's written short distance of there. And within this 144 00:08:08,640 --> 00:08:10,960 Speaker 1: kind of harbor there's a sort of free trade zone 145 00:08:10,960 --> 00:08:12,800 Speaker 1: type thing where there's kind of you know, easier sort 146 00:08:12,800 --> 00:08:14,920 Speaker 1: of tariff access for goods that are kind of being 147 00:08:14,960 --> 00:08:19,120 Speaker 1: shipped through, but there's also domestic manufacturing products for different 148 00:08:19,400 --> 00:08:24,800 Speaker 1: types of products, domestic manufacturing facilities, and effectively you we 149 00:08:24,840 --> 00:08:26,560 Speaker 1: saw you know, we went in and we saw kind 150 00:08:26,560 --> 00:08:29,760 Speaker 1: of an in conditioning manufacturer. We we went around the plant. 151 00:08:29,800 --> 00:08:32,120 Speaker 1: There is a fox complant there, but we didn't we 152 00:08:32,160 --> 00:08:36,320 Speaker 1: didn't visit it. And these basically they're kind of in 153 00:08:36,320 --> 00:08:39,920 Speaker 1: some ways putting together a kind of ecosystem there. They've 154 00:08:39,920 --> 00:08:43,719 Speaker 1: got like different manufacturers of things. You know, their conditioner 155 00:08:44,320 --> 00:08:46,640 Speaker 1: manufacturer was talking about how they're drawing on different people 156 00:08:46,679 --> 00:08:49,800 Speaker 1: were located within these areas. But that's a huge investment, 157 00:08:49,880 --> 00:08:53,760 Speaker 1: you know, the and they're just getting started. And in fact, 158 00:08:54,240 --> 00:08:56,800 Speaker 1: you know, when we've when Trump had talked about we 159 00:08:56,840 --> 00:08:58,640 Speaker 1: want to get you have all these products made in 160 00:08:58,840 --> 00:09:00,640 Speaker 1: the United States, or we want to get out of China, 161 00:09:00,840 --> 00:09:03,760 Speaker 1: Apple instantly was like, right, we're gonna send all the 162 00:09:03,760 --> 00:09:06,520 Speaker 1: production to India. But India only recently got up to 163 00:09:06,559 --> 00:09:10,599 Speaker 1: manufacturally about ninety seven percent of the iPhones that itself consumes, 164 00:09:10,880 --> 00:09:12,760 Speaker 1: so if it were to go and do it for 165 00:09:12,920 --> 00:09:15,240 Speaker 1: America would have to wrap up this production even more. 166 00:09:23,960 --> 00:09:27,880 Speaker 2: Well, one company Trump directly called out, and you've already 167 00:09:27,880 --> 00:09:31,000 Speaker 2: said it Apple, he wants them to make their phones 168 00:09:31,040 --> 00:09:34,199 Speaker 2: in the US. I saw one bit of analysis saying 169 00:09:34,200 --> 00:09:37,000 Speaker 2: that it had cost up to three thousand, five hundred 170 00:09:37,120 --> 00:09:40,600 Speaker 2: dollars US if the phones were made there. That's about 171 00:09:40,720 --> 00:09:44,000 Speaker 2: set what's seven a k New Zealand for your phone? 172 00:09:44,040 --> 00:09:47,160 Speaker 2: That's more than I've ever spent. Actually, I'm thinking I've 173 00:09:47,200 --> 00:09:49,600 Speaker 2: ever spent on a car. I think it did get 174 00:09:49,679 --> 00:09:53,400 Speaker 2: us thinking are we relying on cheap labor in Asia 175 00:09:53,440 --> 00:09:55,760 Speaker 2: to make all of our popular products so it doesn't 176 00:09:55,800 --> 00:09:58,280 Speaker 2: get up to three thousand, five hundred dollars. 177 00:09:58,440 --> 00:10:00,920 Speaker 1: I actually don't think that the labory qu is actually 178 00:10:00,920 --> 00:10:03,800 Speaker 1: the most important part of it. I mean China actually 179 00:10:03,880 --> 00:10:06,960 Speaker 1: it installed two hundred and seventy six three hundred robots 180 00:10:07,120 --> 00:10:11,640 Speaker 1: like last year. Yeah, like I said, it's manufacturing now 181 00:10:11,760 --> 00:10:15,800 Speaker 1: is moving into highly automated territory. I think that when 182 00:10:15,880 --> 00:10:18,120 Speaker 1: we think about something like the iPhone, we've got to 183 00:10:18,120 --> 00:10:20,160 Speaker 1: think about, well, we've got our product, and that's the 184 00:10:20,200 --> 00:10:22,599 Speaker 1: product that we're buying, But where's the actual value for 185 00:10:22,679 --> 00:10:24,800 Speaker 1: it for US as a country or as a nation. 186 00:10:24,880 --> 00:10:28,400 Speaker 1: Are we actually ever going to manufacture iPhones in New Zealand? No, 187 00:10:28,520 --> 00:10:31,320 Speaker 1: because then it would really cost like three five hundred 188 00:10:31,440 --> 00:10:34,840 Speaker 1: dollars or four thousand dollars. But if it is, if 189 00:10:34,880 --> 00:10:37,520 Speaker 1: we're able to bring it down by relying on someplace 190 00:10:37,559 --> 00:10:41,600 Speaker 1: where it's maybe more efficient to manufacture these, And that's 191 00:10:41,640 --> 00:10:43,880 Speaker 1: not efficiency isn't only just going to be because of 192 00:10:43,920 --> 00:10:45,959 Speaker 1: the labor. Actually it's going to because of all the 193 00:10:46,000 --> 00:10:47,520 Speaker 1: other producers that are kind. 194 00:10:47,360 --> 00:10:49,360 Speaker 2: Of close by, and they've been doing it for decade. 195 00:10:49,400 --> 00:10:51,160 Speaker 1: Yeah, they've been doing it for a long time. So 196 00:10:51,240 --> 00:10:53,320 Speaker 1: to go rebuild that somewhere else is just going to 197 00:10:53,320 --> 00:10:55,280 Speaker 1: take a lot of money. And you can kind of 198 00:10:55,320 --> 00:10:57,760 Speaker 1: do it. But then suddenly the iPhone is unaffordable for 199 00:10:57,800 --> 00:10:59,959 Speaker 1: a whole bunch of people. So what happens Then people 200 00:11:00,080 --> 00:11:03,200 Speaker 1: might use a Samsung or people might use another ecosystem. Well, 201 00:11:03,200 --> 00:11:05,520 Speaker 1: if you do that, are there certain opportunities that aren't 202 00:11:05,920 --> 00:11:09,400 Speaker 1: open to you? Then if you don't have access to iPhones, 203 00:11:09,440 --> 00:11:12,200 Speaker 1: if it's unaffordable, then does that produce make a whole 204 00:11:12,200 --> 00:11:16,200 Speaker 1: bunch of the Internet now very inaccessible for people? So actually, 205 00:11:16,240 --> 00:11:17,880 Speaker 1: you know, do we get more value out of being 206 00:11:17,880 --> 00:11:19,959 Speaker 1: able to manufacture an iPhone in the country? Do we 207 00:11:20,000 --> 00:11:21,800 Speaker 1: get more value from being able to access some of 208 00:11:21,840 --> 00:11:24,280 Speaker 1: the services that we access on an iPhone or having 209 00:11:24,280 --> 00:11:27,479 Speaker 1: our population being able to access those services. 210 00:11:29,679 --> 00:11:33,360 Speaker 4: We have Apple as you know, it's coming in. And 211 00:11:33,440 --> 00:11:35,760 Speaker 4: I had a little problem with Tim Cooky yesterday. I 212 00:11:35,800 --> 00:11:37,560 Speaker 4: said to him, tell me and my friend I treated 213 00:11:37,559 --> 00:11:39,960 Speaker 4: you very good. You're coming here with five hundred billion dollars. 214 00:11:40,040 --> 00:11:41,760 Speaker 4: But now I hear you're building all over India. I 215 00:11:41,760 --> 00:11:43,720 Speaker 4: don't want your building in India. You can build an 216 00:11:43,760 --> 00:11:47,320 Speaker 4: India if you want to take care of India. Because 217 00:11:47,360 --> 00:11:51,120 Speaker 4: India is the highest, one of the highest tariff nations 218 00:11:51,120 --> 00:11:53,319 Speaker 4: in the world. It's very hard to sell into India, 219 00:11:55,040 --> 00:11:57,880 Speaker 4: and they've offered us a deal. We're basically they're willing 220 00:11:57,920 --> 00:12:03,360 Speaker 4: to literally charge just no tariff, so we go from 221 00:12:03,440 --> 00:12:07,120 Speaker 4: the highest tariff. You couldn't do business in India. We're 222 00:12:07,160 --> 00:12:09,600 Speaker 4: not even a top thirty in India because the tariff 223 00:12:09,640 --> 00:12:14,679 Speaker 4: is so high. 224 00:12:14,880 --> 00:12:18,080 Speaker 2: We've talked here on this podcast before about how TikTokers 225 00:12:18,160 --> 00:12:21,199 Speaker 2: in China were posting videos when the trade war stuff 226 00:12:21,240 --> 00:12:24,559 Speaker 2: started about how cheap some of our most expensive products 227 00:12:24,600 --> 00:12:28,600 Speaker 2: are purely because the factories are all there and they 228 00:12:28,720 --> 00:12:32,080 Speaker 2: can buy things right off the production line. So do 229 00:12:32,200 --> 00:12:35,560 Speaker 2: they quite enjoy having these products made there, do you 230 00:12:35,640 --> 00:12:39,200 Speaker 2: think or is it just a front presented on social media? 231 00:12:39,840 --> 00:12:42,240 Speaker 1: Well, one thing, I should probably say, some of those 232 00:12:42,280 --> 00:12:46,440 Speaker 1: tiktoks can't be one hundred percent surely, Yeah, yeah, yeah, 233 00:12:46,480 --> 00:12:49,160 Speaker 1: I think so. I'm not sure. I'm not sure if 234 00:12:49,160 --> 00:12:51,000 Speaker 1: some of them were real on but some definitely some 235 00:12:51,040 --> 00:12:53,560 Speaker 1: of them were false. So there is that. But to 236 00:12:53,640 --> 00:12:55,920 Speaker 1: your larger point, you know, is this a strategy from 237 00:12:55,920 --> 00:12:58,160 Speaker 1: the Chinese? I think so, Like isn't I think that 238 00:12:58,240 --> 00:13:02,160 Speaker 1: they actually set out to a big manufacturing industrial hub 239 00:13:02,320 --> 00:13:06,280 Speaker 1: and they set out to make components that are important 240 00:13:06,520 --> 00:13:09,520 Speaker 1: for you know, WestEd businesses as well. Theyso wanted to 241 00:13:09,520 --> 00:13:11,760 Speaker 1: be an important part of the global economy, so they 242 00:13:11,760 --> 00:13:14,760 Speaker 1: couldn't just be shut off. So yeah, I mean, I 243 00:13:14,760 --> 00:13:19,280 Speaker 1: guess Jhortly that is a strategy encouraging their industry as 244 00:13:19,280 --> 00:13:23,360 Speaker 1: a strategy, it's not necessarily a cost free sort of 245 00:13:23,360 --> 00:13:26,120 Speaker 1: a strategy. You know, Like we hear a lot about 246 00:13:26,160 --> 00:13:29,360 Speaker 1: the really successful industrial factories, but they are actually a 247 00:13:29,360 --> 00:13:32,559 Speaker 1: whole bunch of factories in China that are struggling. You know, 248 00:13:32,640 --> 00:13:35,800 Speaker 1: there's over capacity, their unemployment rates are kind of going 249 00:13:35,840 --> 00:13:38,679 Speaker 1: high for younger people. There's a whole bunch of overquasity. 250 00:13:38,760 --> 00:13:40,920 Speaker 1: So you know, there's kind of factories there that are 251 00:13:40,960 --> 00:13:44,439 Speaker 1: only capable of manufacturing products that people may not necessarily want. 252 00:13:44,640 --> 00:13:47,800 Speaker 1: And you know they're facing trade restrictions in some countries 253 00:13:47,840 --> 00:13:53,920 Speaker 1: as well, So it's not all of massive benefit to China. 254 00:13:53,960 --> 00:13:56,040 Speaker 1: But I think you're right in terms of you know, 255 00:13:56,120 --> 00:13:57,640 Speaker 1: you were as seeing a bit of strategy there. 256 00:13:57,640 --> 00:13:59,840 Speaker 2: Of course, is there even the demand in the US 257 00:14:00,040 --> 00:14:02,760 Speaker 2: for people to want to work in factories. It sometimes 258 00:14:02,800 --> 00:14:05,640 Speaker 2: feels like Trump thinks we're still live in the nineteen 259 00:14:05,720 --> 00:14:07,960 Speaker 2: twenties and everyone is happy to pop off down to 260 00:14:08,000 --> 00:14:10,480 Speaker 2: their manual labor job, when I think most young people 261 00:14:10,480 --> 00:14:12,760 Speaker 2: today just want to be TikTokers buying cheap leggings. 262 00:14:13,040 --> 00:14:15,680 Speaker 1: Yeah, well, yeah, I mean I think I think that's 263 00:14:15,760 --> 00:14:19,320 Speaker 1: probably pretty fair to some degree. Maybe not TikTokers, but 264 00:14:19,480 --> 00:14:21,480 Speaker 1: maybe they'd like to be the people who are running 265 00:14:21,520 --> 00:14:24,240 Speaker 1: TikTok or something like that, or maybe the people designing 266 00:14:24,240 --> 00:14:26,120 Speaker 1: the TikTok a. This is the whole thing. Right up 267 00:14:26,200 --> 00:14:29,200 Speaker 1: until this point, we've had like this real focus in 268 00:14:29,280 --> 00:14:32,120 Speaker 1: our economy in the US on hell, let's move up 269 00:14:32,160 --> 00:14:35,120 Speaker 1: the value chain. So countries like China, countries like Vietnam, 270 00:14:35,200 --> 00:14:37,600 Speaker 1: they are doing the lower kind of value sort of stuff. 271 00:14:37,600 --> 00:14:40,400 Speaker 1: They're better position for that because they've got lots of 272 00:14:40,640 --> 00:14:43,840 Speaker 1: manual labor, they have, you know, comparatively kind of lower 273 00:14:43,960 --> 00:14:46,720 Speaker 1: levels of education, whereas we can kind of but we 274 00:14:46,760 --> 00:14:48,240 Speaker 1: can move up the value chain. We can be the 275 00:14:48,240 --> 00:14:50,080 Speaker 1: ones who are designing the products, h are coming up 276 00:14:50,120 --> 00:14:52,720 Speaker 1: with the business ideas, and we can you know, we 277 00:14:52,760 --> 00:14:56,440 Speaker 1: can trade you know, you know, our knowledge for their 278 00:14:56,480 --> 00:15:00,600 Speaker 1: sort of their goods or their helping us manufacture. Of course, 279 00:15:01,120 --> 00:15:04,360 Speaker 1: with the breakdown of I guess the international rules based 280 00:15:04,480 --> 00:15:08,080 Speaker 1: order changes in like tarth rates, that becomes tariff rates, 281 00:15:08,200 --> 00:15:10,960 Speaker 1: tariff rules, people not sticking to their words, and naturally 282 00:15:11,080 --> 00:15:14,000 Speaker 1: that then becomes a lot more difficult because part of 283 00:15:14,000 --> 00:15:15,640 Speaker 1: being able to have a supply chain is to be 284 00:15:15,640 --> 00:15:17,720 Speaker 1: able to rely on like that this company is going 285 00:15:17,800 --> 00:15:19,120 Speaker 1: to be able to give you the product in a 286 00:15:19,120 --> 00:15:19,920 Speaker 1: certain period of time. 287 00:15:20,080 --> 00:15:22,360 Speaker 2: So given that it might take a decade or more 288 00:15:22,400 --> 00:15:25,080 Speaker 2: to move some production to the US, and it's all 289 00:15:25,080 --> 00:15:27,760 Speaker 2: going to make things more expensive, do you think it's 290 00:15:27,840 --> 00:15:28,720 Speaker 2: ever going to happen? 291 00:15:29,280 --> 00:15:31,920 Speaker 1: Really, I actually don't think they'll ever move all of it. 292 00:15:32,320 --> 00:15:34,360 Speaker 1: I think that if they move all of it, it's 293 00:15:34,400 --> 00:15:37,520 Speaker 1: going to be very costly, as Trump is sort of discovered. 294 00:15:37,720 --> 00:15:42,040 Speaker 1: You know, don't call them Taco Trump for nothing. Trump 295 00:15:42,040 --> 00:15:44,760 Speaker 1: always chickens out, as they say, and that's you know, 296 00:15:44,800 --> 00:15:47,080 Speaker 1: for some good economic reasons. But I think that there 297 00:15:47,120 --> 00:15:51,720 Speaker 1: is some benefit in countries thinking more deeply about issues 298 00:15:51,760 --> 00:15:54,880 Speaker 1: like resilience and vulnerabilities in their supply chain. I mean, 299 00:15:54,920 --> 00:15:57,280 Speaker 1: I remembering the pandemic talking to a kind of a 300 00:15:57,320 --> 00:15:59,720 Speaker 1: bid manufacturing company and they were talking to me and 301 00:16:00,040 --> 00:16:03,160 Speaker 1: Zealand one actually, and they were talking about how basically 302 00:16:03,880 --> 00:16:07,160 Speaker 1: during the pandemic they actually you know, they manufacture obviously 303 00:16:07,240 --> 00:16:10,960 Speaker 1: the beds here in New Zealand, but is one component 304 00:16:11,040 --> 00:16:13,760 Speaker 1: that's very important for a bid that you actually basically 305 00:16:13,760 --> 00:16:16,160 Speaker 1: could only get from China because China had become the 306 00:16:16,200 --> 00:16:19,120 Speaker 1: sort of mass manufacturer of bed springs. And I think 307 00:16:19,160 --> 00:16:22,560 Speaker 1: they found an alternative in Turkey, but obviously they had 308 00:16:22,600 --> 00:16:24,640 Speaker 1: to scramp around for that that wasn't necessarily something they'd 309 00:16:24,680 --> 00:16:27,240 Speaker 1: thought of before. So I think that you know, people 310 00:16:27,280 --> 00:16:29,960 Speaker 1: like Trump and others in New Zealand who were about 311 00:16:30,120 --> 00:16:32,240 Speaker 1: manufacturing capacity, I think they do have a point in 312 00:16:32,240 --> 00:16:34,600 Speaker 1: the sense that you know, we do have to think 313 00:16:34,600 --> 00:16:38,360 Speaker 1: about resilience. But that doesn't mean that it's wise for 314 00:16:38,440 --> 00:16:42,000 Speaker 1: us to spend a whole bunch of money relocating everything 315 00:16:42,080 --> 00:16:44,040 Speaker 1: to one country, the United States. 316 00:16:44,400 --> 00:16:46,760 Speaker 2: Like how big of an issue is it for someone 317 00:16:46,880 --> 00:16:50,480 Speaker 2: to have to build a bedspring factory in New Zealand. 318 00:16:50,720 --> 00:16:53,680 Speaker 1: Yeah, yeah, exactly, And we wouldn't have a big enough market, 319 00:16:53,760 --> 00:16:56,520 Speaker 1: so any bed springs that we made, we'd basically have 320 00:16:56,640 --> 00:16:59,080 Speaker 1: to ship them off somewhere else find someone to buy them. 321 00:16:59,320 --> 00:17:02,880 Speaker 1: Presumably the next country that's also concerned about this sovereignty 322 00:17:02,880 --> 00:17:05,040 Speaker 1: of their bedsprings is also going to want to have 323 00:17:05,080 --> 00:17:09,320 Speaker 1: a bedspring manufacturing country company. So you know, we have 324 00:17:09,400 --> 00:17:12,679 Speaker 1: to We can't really manufacture everything that we want in 325 00:17:12,760 --> 00:17:14,720 Speaker 1: this country, but that's not only stary bad thing, Like 326 00:17:14,720 --> 00:17:16,399 Speaker 1: we can specialize in things that we're good at. 327 00:17:16,480 --> 00:17:17,639 Speaker 2: Thanks for joining us to Lepa. 328 00:17:17,840 --> 00:17:18,600 Speaker 1: Oh my pleasure. 329 00:17:22,240 --> 00:17:25,359 Speaker 2: That's it for this episode of the Front Page. You 330 00:17:25,359 --> 00:17:29,200 Speaker 2: can read more about today's stories and extensive news coverage 331 00:17:29,240 --> 00:17:33,240 Speaker 2: at enzherld dot co dot nz. The Front Page is 332 00:17:33,280 --> 00:17:37,040 Speaker 2: produced by Ethan Sills and Richard Martin, who is also 333 00:17:37,200 --> 00:17:41,840 Speaker 2: our sound engineer. I'm Chelsea Daniels. Subscribe to the Front 334 00:17:41,840 --> 00:17:45,479 Speaker 2: Page on iHeartRadio or wherever you get your podcasts and 335 00:17:45,560 --> 00:17:49,160 Speaker 2: tune in tomorrow for another look behind the headlines.