1 00:00:00,120 --> 00:00:02,320 Speaker 1: If there is one talking point out of the Trump 2 00:00:02,360 --> 00:00:04,520 Speaker 1: first one hundred days, it is the tariffs. You can 3 00:00:04,600 --> 00:00:07,640 Speaker 1: argue broadly in other areas he's done. I guess I've 4 00:00:07,800 --> 00:00:09,760 Speaker 1: said earlier on the program what he said he would do, 5 00:00:09,880 --> 00:00:12,120 Speaker 1: or at least he hasn't intend to do so. But 6 00:00:12,160 --> 00:00:15,240 Speaker 1: in tariffs, though, it was more than anyone ever really dreamed, 7 00:00:15,280 --> 00:00:17,080 Speaker 1: wasn't a ten percent for everyone? A full on war 8 00:00:17,120 --> 00:00:19,439 Speaker 1: with China and asseeming make it up as you go 9 00:00:19,520 --> 00:00:22,600 Speaker 1: along set of deals that have yet to eventuate. Meantime, 10 00:00:22,960 --> 00:00:24,919 Speaker 1: the world is slowing, ships are anchored, the jobs are 11 00:00:24,920 --> 00:00:26,440 Speaker 1: being lost to the markets have tanked, and we're all 12 00:00:26,480 --> 00:00:28,760 Speaker 1: waiting for I don't know, someone to blink. I guess 13 00:00:29,040 --> 00:00:32,000 Speaker 1: cee an End's business guru, Richard Quest is back with us. 14 00:00:32,000 --> 00:00:34,279 Speaker 1: A very good morning, Good morning, Ja, make how are you? 15 00:00:34,400 --> 00:00:36,400 Speaker 1: I'm very well. Indeed, you've been around a while. Have 16 00:00:36,479 --> 00:00:39,839 Speaker 1: you seen anything like these one hundred days, as specifically 17 00:00:39,920 --> 00:00:41,000 Speaker 1: regards tariffs? 18 00:00:42,680 --> 00:00:45,879 Speaker 2: You know something, Mike, I could ask you the same question. 19 00:00:46,640 --> 00:00:49,760 Speaker 2: We've both been around long enough to know that what 20 00:00:49,800 --> 00:00:54,760 Speaker 2: we are seeing at the moment is unextraordinary, not only 21 00:00:55,200 --> 00:01:00,520 Speaker 2: for the sheer brazenness of what's been done. But the 22 00:01:00,560 --> 00:01:04,920 Speaker 2: way in which it goes against everything of the orthodoxy 23 00:01:04,959 --> 00:01:07,559 Speaker 2: of economics that you and I have always been taught 24 00:01:08,200 --> 00:01:12,080 Speaker 2: to believe in. That tariffs are when targeted and with 25 00:01:12,120 --> 00:01:15,320 Speaker 2: a specific purpose, it can be of a benefit if 26 00:01:15,360 --> 00:01:20,480 Speaker 2: you like. But this wide spread general tariffing across the 27 00:01:20,520 --> 00:01:27,400 Speaker 2: globe in some effort to reshape the global trading structures. No, 28 00:01:27,600 --> 00:01:30,720 Speaker 2: we've never seen anything like this before. But it's something 29 00:01:30,720 --> 00:01:33,520 Speaker 2: Donald Trump has always wanted since he was a young man. 30 00:01:33,600 --> 00:01:36,800 Speaker 2: He's always believed that the terms of trade for America 31 00:01:36,880 --> 00:01:40,200 Speaker 2: are unfair and that he single handedly wanted to use 32 00:01:40,200 --> 00:01:41,600 Speaker 2: tariffs to change them. 33 00:01:41,840 --> 00:01:45,040 Speaker 1: Can we say that to a point? He has a point. 34 00:01:45,360 --> 00:01:48,160 Speaker 1: So you matched tariffs, You tariff me at twenty percent. 35 00:01:48,200 --> 00:01:51,200 Speaker 1: I'll see you twenty percent. But this whole on shoring 36 00:01:51,320 --> 00:01:53,800 Speaker 1: ten percent for everybody, one hundred and forty five percent 37 00:01:53,840 --> 00:01:55,760 Speaker 1: for China makes no sense. 38 00:01:57,600 --> 00:02:02,240 Speaker 2: I think clearly several factors are at play. The first, 39 00:02:02,840 --> 00:02:07,000 Speaker 2: the traditional view of tit for tat the smooth horly 40 00:02:07,160 --> 00:02:11,200 Speaker 2: nineteen twenties tariffs will is a race to the economic 41 00:02:11,760 --> 00:02:14,920 Speaker 2: bottom that is certainly turning out to be true. You 42 00:02:15,080 --> 00:02:19,120 Speaker 2: tariff me, I'll tariff you. Bish bash bosh, and we 43 00:02:19,200 --> 00:02:22,920 Speaker 2: know where it will end up. He's always wanted to 44 00:02:22,960 --> 00:02:26,320 Speaker 2: have a to use tariffs. I don't think he ever 45 00:02:26,680 --> 00:02:30,079 Speaker 2: ever really wanted to or intended to go up to 46 00:02:30,120 --> 00:02:32,880 Speaker 2: one hundred and forty five percent, and even his recent 47 00:02:33,520 --> 00:02:37,200 Speaker 2: statement suggesting that's unsustainable, that it's clearly not the long 48 00:02:37,280 --> 00:02:41,880 Speaker 2: term goal. What I think is absolutely in his aim 49 00:02:42,440 --> 00:02:47,079 Speaker 2: is this ten percent general new tariff across the world. 50 00:02:47,360 --> 00:02:50,240 Speaker 2: And whilst ten percent sounds on the low side, you 51 00:02:50,320 --> 00:02:53,960 Speaker 2: have to remember A that is counter to everything we've 52 00:02:54,000 --> 00:02:58,600 Speaker 2: previously heard towards free trade, and b ten percent is 53 00:02:58,840 --> 00:03:02,799 Speaker 2: three times more than the two and a half percent 54 00:03:03,080 --> 00:03:06,840 Speaker 2: average tariff the US had. So this is part of 55 00:03:06,919 --> 00:03:11,639 Speaker 2: a deeply held philosophy that the US President has always 56 00:03:11,800 --> 00:03:14,359 Speaker 2: held on to, and now it's getting a chance to 57 00:03:14,400 --> 00:03:17,239 Speaker 2: put his economic experiment into practice. 58 00:03:17,480 --> 00:03:20,560 Speaker 1: You speak to us from a spring like London this morning, 59 00:03:20,639 --> 00:03:23,720 Speaker 1: where Rachel Reeves and Kyostamer will tell you a deal 60 00:03:23,880 --> 00:03:26,120 Speaker 1: is to be done. Is that true or not? 61 00:03:27,800 --> 00:03:31,040 Speaker 2: Well, yes, yes, there is a deal to be done. 62 00:03:31,080 --> 00:03:33,600 Speaker 2: It could depends on the price upon which it is done, 63 00:03:34,040 --> 00:03:38,880 Speaker 2: and it depends on whether or not the British government 64 00:03:39,280 --> 00:03:43,040 Speaker 2: wishes to shaft the European Union on the way. Two 65 00:03:43,200 --> 00:03:46,120 Speaker 2: things to bear in mind. Donald Trump has always believed 66 00:03:46,120 --> 00:03:50,160 Speaker 2: and continues to say, that the EU is some con 67 00:03:50,800 --> 00:03:56,680 Speaker 2: some scheme, some scam designed originally in the nineteen fifties 68 00:03:57,080 --> 00:04:02,000 Speaker 2: to harm the United States. If that's your view, then 69 00:04:02,080 --> 00:04:04,680 Speaker 2: yes he will want to do a deal with the 70 00:04:04,760 --> 00:04:11,560 Speaker 2: United Kingdom. But Sekre Starmer is also trying to use 71 00:04:11,720 --> 00:04:16,839 Speaker 2: this current tariff battle to use the NATO issues to 72 00:04:17,000 --> 00:04:22,080 Speaker 2: remind EU partners of how valuable the United Kingdom is 73 00:04:22,200 --> 00:04:26,520 Speaker 2: in the wider sense. And there's a sort of general 74 00:04:27,120 --> 00:04:33,200 Speaker 2: acceptance that, yep, the deal for Europe and the deal 75 00:04:33,240 --> 00:04:37,120 Speaker 2: for the UK. Now is the time to potentially do 76 00:04:37,600 --> 00:04:40,240 Speaker 2: the deal that should always have been done back in 77 00:04:40,279 --> 00:04:43,480 Speaker 2: twenty seventeen, twenty eighteen when Brexit came along. 78 00:04:43,520 --> 00:04:45,240 Speaker 1: Now, listen Richard more broadly, I mean, do you what 79 00:04:45,440 --> 00:04:47,480 Speaker 1: are you reackon about a realignment of global trade? I mean, 80 00:04:47,480 --> 00:04:50,640 Speaker 1: for places like New Zealand Australia, focus more on the EU, 81 00:04:50,800 --> 00:04:54,479 Speaker 1: more on the UK, more on China as they do 82 00:04:54,880 --> 00:04:57,000 Speaker 1: as opposed to the US, or do you reckon This 83 00:04:57,040 --> 00:04:59,360 Speaker 1: thing gets sorted out in some way and we all 84 00:04:59,400 --> 00:04:59,719 Speaker 1: move on. 85 00:05:00,640 --> 00:05:03,799 Speaker 2: I don't know the law is the really short answer, 86 00:05:04,360 --> 00:05:09,239 Speaker 2: because I think in the immediate term it gets sort 87 00:05:09,279 --> 00:05:15,000 Speaker 2: of sorted out and we live to adapt to these 88 00:05:15,640 --> 00:05:19,599 Speaker 2: new tariff regimes in the longer run, and that I 89 00:05:19,600 --> 00:05:23,880 Speaker 2: think is what you're really asking in the longer run, Mike, Yeah, 90 00:05:23,880 --> 00:05:28,640 Speaker 2: I think there are some fundamental shifts. Why Because the 91 00:05:28,760 --> 00:05:31,080 Speaker 2: United States, and the view of many, and it's a 92 00:05:31,160 --> 00:05:34,719 Speaker 2: valid view in some cases, is no longer a reliable ally. 93 00:05:35,680 --> 00:05:39,480 Speaker 2: If the United States can do economic harm to key 94 00:05:39,600 --> 00:05:45,880 Speaker 2: strategic and important allies like Australia, the UK, New Zealand, 95 00:05:46,200 --> 00:05:51,200 Speaker 2: the Orcus, the Orcus, the Five Eyes, if the US 96 00:05:51,560 --> 00:05:57,480 Speaker 2: can turn its back on its both historic and current 97 00:05:57,680 --> 00:06:01,120 Speaker 2: friends and allies, then people will say, yeah, you know, 98 00:06:01,200 --> 00:06:04,000 Speaker 2: we do need to have a Plan B, Plan C, 99 00:06:04,320 --> 00:06:08,520 Speaker 2: Plan D, and that means not being as reliant as 100 00:06:08,520 --> 00:06:11,320 Speaker 2: we have been on the United States. And who can 101 00:06:11,320 --> 00:06:14,560 Speaker 2: blame anyone If you are sitting in the behive, if 102 00:06:14,600 --> 00:06:17,520 Speaker 2: you are sitting in Canberra, if you are sitting in 103 00:06:17,640 --> 00:06:21,880 Speaker 2: Number ten or in Brussels, you are going to say, 104 00:06:22,440 --> 00:06:25,359 Speaker 2: we were promised that Donald Trump couldn't come back. We 105 00:06:25,400 --> 00:06:29,560 Speaker 2: were promised that it would never happen again. America was back. Well, 106 00:06:30,520 --> 00:06:34,440 Speaker 2: how did that go. I think absolutely things are going 107 00:06:34,480 --> 00:06:35,919 Speaker 2: to change on a longer term basis. 108 00:06:35,960 --> 00:06:37,960 Speaker 1: But let me counter that with us. What if you 109 00:06:38,080 --> 00:06:39,919 Speaker 1: just hold your nose for three and a half years, 110 00:06:39,960 --> 00:06:43,240 Speaker 1: he's gone in America resumes to some form of normality. 111 00:06:43,279 --> 00:06:44,200 Speaker 1: Is that possible or not. 112 00:06:45,960 --> 00:06:51,039 Speaker 2: It's possible, It's probable at one level. But Mike, look 113 00:06:51,080 --> 00:06:56,000 Speaker 2: at the current situation as you and I are speaking 114 00:06:56,400 --> 00:07:00,840 Speaker 2: right now. These are the economic headwinds that the global 115 00:07:00,880 --> 00:07:07,080 Speaker 2: economy is barreling through. The twenty percent steel and aluminium, 116 00:07:07,080 --> 00:07:11,840 Speaker 2: the twenty five percent auto automobiles, foreign autobiles and auto paths, 117 00:07:12,080 --> 00:07:16,600 Speaker 2: the ten percent general tariff now around the world, the 118 00:07:16,680 --> 00:07:20,480 Speaker 2: perspective of twenty percent or more on semiconductors, one hundred 119 00:07:20,520 --> 00:07:25,440 Speaker 2: and forty five percent on China. These are not with 120 00:07:25,480 --> 00:07:29,920 Speaker 2: exception of semis. These are happening now. This is the 121 00:07:30,000 --> 00:07:34,160 Speaker 2: economy right as we are speaking. So you say, you 122 00:07:34,200 --> 00:07:38,400 Speaker 2: know what, does everything go back to normal right now? 123 00:07:38,560 --> 00:07:43,280 Speaker 2: The economy is battling these headwinds. We are heading towards 124 00:07:43,360 --> 00:07:49,800 Speaker 2: recessions in many countries at stake Canada and Mexico, traditional 125 00:07:49,840 --> 00:07:53,240 Speaker 2: alliances have been ripped up, torn up and thrown in 126 00:07:53,280 --> 00:07:57,440 Speaker 2: the toilet. With Canada with NATO on the you know, 127 00:07:57,800 --> 00:08:01,160 Speaker 2: in the way it's been treated with den Over Greenland. 128 00:08:01,840 --> 00:08:05,600 Speaker 2: People won't forget. And the reason they won't forget is 129 00:08:05,640 --> 00:08:08,160 Speaker 2: because they are damn certain they don't want to be 130 00:08:08,200 --> 00:08:09,960 Speaker 2: on the wrong side of history in the future. 131 00:08:10,200 --> 00:08:12,760 Speaker 1: If you're a central bank governor, how do you manage this? 132 00:08:13,840 --> 00:08:16,920 Speaker 2: Very difficult because the inflationary battle that you thought you 133 00:08:16,960 --> 00:08:21,760 Speaker 2: were winning has now become much more difficult. Yes, tariffs 134 00:08:21,760 --> 00:08:25,080 Speaker 2: could be a one hit wonder, prices go up, but 135 00:08:25,240 --> 00:08:29,000 Speaker 2: if they create an inflationary spiral because prices go up, 136 00:08:29,040 --> 00:08:32,760 Speaker 2: there for workers demand more, therefore cost of production, etc. Etc. 137 00:08:33,559 --> 00:08:36,080 Speaker 2: And you start to see a slow down in the economies. 138 00:08:36,440 --> 00:08:41,559 Speaker 2: Can central bankers afford the cut rates to keep economies 139 00:08:41,679 --> 00:08:46,679 Speaker 2: growing whilst they are battling against inflation. The FED chair 140 00:08:47,080 --> 00:08:51,079 Speaker 2: Jerome Powell that made it very He basically said, this 141 00:08:51,679 --> 00:08:55,600 Speaker 2: is a very challenging time. Any central bank governor is 142 00:08:55,679 --> 00:08:59,800 Speaker 2: going to have to do the dance with the inflationary 143 00:09:00,120 --> 00:09:05,200 Speaker 2: devil or risk recession. Unless Here's where I think we 144 00:09:05,360 --> 00:09:10,960 Speaker 2: are right now, with the tariff headwinds pushing against the economy. 145 00:09:11,360 --> 00:09:15,160 Speaker 2: We are looking at recessions in major economies, not deep, 146 00:09:15,679 --> 00:09:19,040 Speaker 2: not long but certainly, and by the way, let's not 147 00:09:19,200 --> 00:09:21,880 Speaker 2: hang our nic or elastic on whether or not it's 148 00:09:21,920 --> 00:09:25,960 Speaker 2: a technical recession of two quarters of negative GDP. We 149 00:09:26,080 --> 00:09:29,720 Speaker 2: are looking at slowdowns in economic growth that's going to 150 00:09:29,720 --> 00:09:32,680 Speaker 2: feel pretty awful for people as the year moves on. 151 00:09:32,880 --> 00:09:34,240 Speaker 1: Well, it's good to have you on the program. I 152 00:09:34,280 --> 00:09:37,440 Speaker 1: appreciate it very much. Richard Quest means business out of 153 00:09:37,480 --> 00:09:40,080 Speaker 1: seeing in. He's in London for us this morning. For 154 00:09:40,200 --> 00:09:43,559 Speaker 1: more from the Mic Asking Breakfast, listen live to news talks. 155 00:09:43,600 --> 00:09:46,800 Speaker 1: It'd be from six am weekdays, or follow the podcast 156 00:09:46,800 --> 00:09:47,640 Speaker 1: on iHeartRadio.