1 00:00:00,240 --> 00:00:03,440 Speaker 1: Peter Lewis our Asia business correspondent, is with me right now, Hi. 2 00:00:03,320 --> 00:00:05,720 Speaker 2: Peter, Good evening header now, Peter. 3 00:00:05,840 --> 00:00:09,400 Speaker 1: On this US China trade war, This thing is settled 4 00:00:09,400 --> 00:00:12,240 Speaker 1: down for ninety days. But is that all or is 5 00:00:12,280 --> 00:00:14,480 Speaker 1: this the start of the end? 6 00:00:15,000 --> 00:00:17,640 Speaker 2: I think there's still a long way to go. And 7 00:00:17,680 --> 00:00:20,960 Speaker 2: the way it's sort of been painted in social media 8 00:00:21,079 --> 00:00:23,599 Speaker 2: and state media up in China is that this was 9 00:00:23,640 --> 00:00:27,159 Speaker 2: a complete climbed down by Donald Trump. He agreed to 10 00:00:27,680 --> 00:00:31,600 Speaker 2: reduce tarots by one hundred and fifteen percent. China matched that, 11 00:00:32,080 --> 00:00:35,839 Speaker 2: but didn't have to do anything else whatsoever. And they 12 00:00:35,840 --> 00:00:37,960 Speaker 2: probably do have a point because you have to say, well, 13 00:00:38,720 --> 00:00:40,479 Speaker 2: what was the point of all of this To put 14 00:00:40,520 --> 00:00:45,000 Speaker 2: all these tariffs on, effectively end trade between the US 15 00:00:45,040 --> 00:00:47,920 Speaker 2: and China, then take the tariffs off, but get no 16 00:00:48,040 --> 00:00:52,360 Speaker 2: concessions whatsoever from China. And I think this is only 17 00:00:52,479 --> 00:00:55,280 Speaker 2: just the beginning of what could happen over the next 18 00:00:55,880 --> 00:01:00,560 Speaker 2: ninety days. Already the US is talking about China list 19 00:01:00,800 --> 00:01:05,560 Speaker 2: some semiconductor companies in China and technology companies, which is 20 00:01:05,600 --> 00:01:09,200 Speaker 2: going to irritate them immensely and makes it more difficult 21 00:01:09,600 --> 00:01:12,800 Speaker 2: to have this discussion over the next ninety days. And 22 00:01:12,840 --> 00:01:15,080 Speaker 2: what we have to remember is that there are still 23 00:01:15,200 --> 00:01:18,959 Speaker 2: tariffs of thirty percent on China, So while they're not 24 00:01:20,120 --> 00:01:24,400 Speaker 2: these devastating tariffs are one hundred and forty thirty percent, 25 00:01:24,520 --> 00:01:28,520 Speaker 2: tariffs are still pretty high. So that is still going 26 00:01:28,560 --> 00:01:31,720 Speaker 2: to damage trade between the two countries. And I think 27 00:01:31,760 --> 00:01:35,360 Speaker 2: what's going to happen is that President jjinp is going 28 00:01:35,400 --> 00:01:38,040 Speaker 2: to do what has been doing over the last few years, 29 00:01:38,080 --> 00:01:41,880 Speaker 2: which is to create a global trading system that doesn't 30 00:01:41,920 --> 00:01:45,720 Speaker 2: include the US. He will deal it, diversify exports away 31 00:01:46,160 --> 00:01:49,240 Speaker 2: from the US and rely far more on countries in 32 00:01:49,240 --> 00:01:53,480 Speaker 2: the Middle East, in Southeast Asia, emerging markets. And he's 33 00:01:53,520 --> 00:01:57,680 Speaker 2: already having some success in that. Columbia only last week 34 00:01:58,200 --> 00:02:01,160 Speaker 2: agreed to join the Belton Roads in this shive, So 35 00:02:01,320 --> 00:02:05,760 Speaker 2: already he's approaching a lot of these developing nations and 36 00:02:05,800 --> 00:02:07,960 Speaker 2: looking to sell the goods that he would have sold 37 00:02:08,000 --> 00:02:11,839 Speaker 2: to the US to those nations instead. And I think 38 00:02:11,880 --> 00:02:14,720 Speaker 2: that process is only going to accelerate over the coming 39 00:02:14,800 --> 00:02:15,560 Speaker 2: ninety days. 40 00:02:15,840 --> 00:02:18,080 Speaker 1: Both sides claim that they've got the upper hand, but 41 00:02:18,120 --> 00:02:19,880 Speaker 1: who do you think has got the upper hand here? 42 00:02:20,639 --> 00:02:23,880 Speaker 2: Well, I mean they're both right to a certain extent, 43 00:02:24,160 --> 00:02:29,280 Speaker 2: because this is damaging to China, for sure, and it 44 00:02:29,360 --> 00:02:33,080 Speaker 2: has slowed its economy, and it has caused problems for 45 00:02:33,160 --> 00:02:38,120 Speaker 2: its manufacturers, many of whom just can't survive with tariffs 46 00:02:38,280 --> 00:02:41,880 Speaker 2: at that level. It puts pressure on the unemployment rate 47 00:02:42,000 --> 00:02:46,960 Speaker 2: in China, which is a very sensitive issue domestically. So 48 00:02:47,000 --> 00:02:50,960 Speaker 2: for sure, it called it has caused problems for China, 49 00:02:51,040 --> 00:02:54,679 Speaker 2: but I think they're in a better position to withstand 50 00:02:54,760 --> 00:02:59,200 Speaker 2: those problems. It's got a huge domestic market. It's got 51 00:02:59,200 --> 00:03:03,079 Speaker 2: many ways in which it can diversify its economy, boost 52 00:03:03,120 --> 00:03:07,000 Speaker 2: domestic consumption to try and offset the damage that's been done. 53 00:03:07,480 --> 00:03:10,880 Speaker 2: Now the US, it's also damaged its own economy. I mean, 54 00:03:10,919 --> 00:03:15,720 Speaker 2: shipments to China have collapsed virtually down to zero to 55 00:03:15,880 --> 00:03:19,280 Speaker 2: the US have collapsed virtually down to zero. And the 56 00:03:19,320 --> 00:03:22,480 Speaker 2: issue for the US is that it likes to blame 57 00:03:22,600 --> 00:03:26,600 Speaker 2: China and other countries for its trade deficits. But the 58 00:03:26,639 --> 00:03:31,400 Speaker 2: reason why it has huge trade deficits is because its 59 00:03:31,480 --> 00:03:34,720 Speaker 2: own citizens don't save enough and they want to buy 60 00:03:34,760 --> 00:03:38,240 Speaker 2: all these goods that China and other countries sell to them. 61 00:03:38,280 --> 00:03:41,520 Speaker 2: They like them, they want to pay for them, and 62 00:03:41,920 --> 00:03:45,280 Speaker 2: that's what causes the trade deficits. But it's going to 63 00:03:45,280 --> 00:03:47,920 Speaker 2: be difficult for the US as well because inflation will 64 00:03:47,960 --> 00:03:52,160 Speaker 2: pick up over the coming months. Retail sales are already slowing, 65 00:03:52,280 --> 00:03:55,720 Speaker 2: and we're already seeing that in the latest data, So 66 00:03:55,760 --> 00:03:58,280 Speaker 2: it's doing damage to its own economy as well, but 67 00:03:58,400 --> 00:04:03,320 Speaker 2: not getting the benefits that touted where all these manufacturers 68 00:04:03,680 --> 00:04:06,800 Speaker 2: are going to relocate to the US. We haven't seen 69 00:04:06,920 --> 00:04:10,360 Speaker 2: very much of that so far. Trump has also said 70 00:04:10,400 --> 00:04:13,200 Speaker 2: We're going to get huge revenues in from other countries 71 00:04:13,240 --> 00:04:16,000 Speaker 2: to play to pay for his tax cuts. Well, we're 72 00:04:16,000 --> 00:04:19,280 Speaker 2: not seeing signs of that either. So you know, he's 73 00:04:19,320 --> 00:04:22,320 Speaker 2: put these tariffs on, taken them off again, but not 74 00:04:22,320 --> 00:04:25,000 Speaker 2: got anywhere near close to getting all the benefits of 75 00:04:25,040 --> 00:04:27,640 Speaker 2: those tarifts be touted in the first place. 76 00:04:28,760 --> 00:04:32,680 Speaker 1: The Trump the possible trade deal between Trump and Japan 77 00:04:32,800 --> 00:04:34,960 Speaker 1: is an interesting thing. Read the tariffs and the cars right, 78 00:04:34,960 --> 00:04:36,719 Speaker 1: And I was reading about this and somebody made the 79 00:04:36,720 --> 00:04:39,640 Speaker 1: point that Trump thinks that Japan is a soft target. 80 00:04:40,000 --> 00:04:40,559 Speaker 1: Is he wrong? 81 00:04:41,640 --> 00:04:46,800 Speaker 2: Yeah, he is wrong, And if anything, Japan is rather 82 00:04:47,640 --> 00:04:50,960 Speaker 2: stealing for a longer far here. They don't think they're 83 00:04:50,960 --> 00:04:54,440 Speaker 2: going to get a deal in ninety days, and they're 84 00:04:54,440 --> 00:04:58,839 Speaker 2: absolutely adamants that tariffs on cars have to come off 85 00:04:59,040 --> 00:05:02,400 Speaker 2: as part of that deal. It's two big exports to 86 00:05:02,480 --> 00:05:06,720 Speaker 2: the US, auto's and agricultural products. They are both two 87 00:05:07,120 --> 00:05:11,840 Speaker 2: very very sensitive issues for Japan. Prime Minister Ashiba has 88 00:05:11,880 --> 00:05:15,760 Speaker 2: got an election coming up very soon, and his popularity 89 00:05:15,800 --> 00:05:20,200 Speaker 2: has already plunged to below thirty percent, So he's got 90 00:05:20,240 --> 00:05:23,960 Speaker 2: a lot of domestic issues and he can't afford to 91 00:05:24,279 --> 00:05:27,960 Speaker 2: back down and give in on the two largest sectors 92 00:05:28,720 --> 00:05:31,280 Speaker 2: of exports to the US. So I think it's going 93 00:05:31,320 --> 00:05:34,120 Speaker 2: to be very very difficult for Trump to get this 94 00:05:34,240 --> 00:05:38,400 Speaker 2: deal with Japan. I think it's also a very similar 95 00:05:38,400 --> 00:05:42,039 Speaker 2: situation for India. India also seems to be drawing a 96 00:05:42,120 --> 00:05:46,760 Speaker 2: line now as well. So these imminent trade deals that 97 00:05:46,800 --> 00:05:51,040 Speaker 2: Trump has touted with countries like Japan, South Korea, India, 98 00:05:51,440 --> 00:05:53,679 Speaker 2: I think are going to be struggle to get done 99 00:05:53,800 --> 00:05:55,000 Speaker 2: within the ninety days. 100 00:05:55,720 --> 00:05:57,600 Speaker 1: Interesting. Hey, Peter, it's always lovely to talk to you. 101 00:05:57,640 --> 00:05:58,600 Speaker 1: Thank you so much. We'll talk to you in a 102 00:05:58,640 --> 00:06:00,960 Speaker 1: weekend and enjoy your weekend. That's Peter us our Age, 103 00:06:00,960 --> 00:06:01,880 Speaker 1: your business correspondent. 104 00:06:02,480 --> 00:06:05,640 Speaker 2: For more from Hither Duplessy Allen Drive, listen live to 105 00:06:05,720 --> 00:06:08,760 Speaker 2: news Talks a b from four pm weekdays, or follow 106 00:06:08,800 --> 00:06:10,520 Speaker 2: the podcast on iHeartRadio