WEBVTT - Surveillance: EU Auto Tariffs Offer Not Good Enough, Trump Says 0:00:00.080 --> 0:00:13.040 Ye, Welcome to the Bloomberg Surveillance podcast. I'm Tom Keane 0:00:13.480 --> 0:00:17.560 jay Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.720 Bloomberg dot Com, and of course on the Bloomberg We're 0:00:33.720 --> 0:00:38.360 watching em Currencies somewhat stable here, but as Hanky would 0:00:38.440 --> 0:00:43.320 lecture at Johns Hopkins, they are log quadratic. Uh to 0:00:43.479 --> 0:00:46.280 say the least, let me bring him in him without 0:00:46.320 --> 0:00:50.680 further ado. After public service with President Reagan and with 0:00:50.800 --> 0:00:54.960 some serious counsel to the Baltic States, Stephen Hanky has 0:00:55.000 --> 0:00:57.520 done at all teaching at the Colorado School of Minds 0:00:57.880 --> 0:01:01.320 at Berkeley and holding corn and I really mean this, 0:01:01.480 --> 0:01:08.560 folks in applied economics at Johns Hopkins. Professor Hanky owns 0:01:08.840 --> 0:01:13.800 when currencies unravel, and we welcome him now to Bloomberg Surveillance. Steves, 0:01:13.800 --> 0:01:16.479 thank you so much for taking time with us today. 0:01:16.560 --> 0:01:21.280 First of all, his contagion clicked in, well, it's certainly 0:01:21.440 --> 0:01:26.160 clicked in last night. The half big currencies are becoming 0:01:26.200 --> 0:01:29.560 more big by the day. We had the paso down 0:01:29.800 --> 0:01:35.199 twelve percent against the greenback. Turkey's LARDN three Indian Route 0:01:35.200 --> 0:01:41.360 PI record low against the us D, h Indonesian Rupe 0:01:41.560 --> 0:01:44.720 a three year low, and the list goes on and on, 0:01:45.560 --> 0:01:49.480 and I think Tom and Pim the key question or 0:01:50.280 --> 0:01:53.400 is what's what's going on? And I think people are 0:01:53.440 --> 0:01:57.680 just missing the boat here. The FED is tight, tight, tight. 0:01:58.640 --> 0:02:01.440 And if we look at Milton Friedman and look at 0:02:01.440 --> 0:02:05.960 our cues are quantities, we have broad money is growing 0:02:06.120 --> 0:02:09.959 at a very modest pace four point seven percent year 0:02:10.040 --> 0:02:14.800 over year measured on him for Center for Financial Stability 0:02:14.840 --> 0:02:17.919 in New York UH. Then if we look at Bob 0:02:18.000 --> 0:02:22.280 Mundell's TS prices, the most important price in the world 0:02:22.320 --> 0:02:26.280 as a dollar euro rate, and it's at one sixteen now. 0:02:26.680 --> 0:02:31.680 That's that's under my comfort zone of one forty. It's tight. 0:02:32.000 --> 0:02:37.160 It's tight. The dollar is very strong. Gold is hovering 0:02:37.600 --> 0:02:40.440 around the low end of my comfort zone, which is 0:02:40.440 --> 0:02:45.720 about twelve an ounce. It's about twelve twelve now, So 0:02:45.960 --> 0:02:49.880 we we have a very tight FED. That is strong 0:02:49.960 --> 0:02:55.880 dollar putting massive pressure on the emerging market countries UH 0:02:55.919 --> 0:02:59.839 and their half big currencies. So that's that's the over 0:03:00.040 --> 0:03:02.880 all seen and it's not going to get any better. 0:03:03.000 --> 0:03:07.480 And and it looks like the more the emerging market 0:03:07.560 --> 0:03:12.440 currencies collapse, there there is an increased probability that will 0:03:12.440 --> 0:03:16.560 will have some blowback in the big major markets. Professor Hanky, 0:03:16.800 --> 0:03:19.840 is there something intrinsic about the value of the US 0:03:19.960 --> 0:03:23.040 dollar that investors have missed over the last six to 0:03:23.120 --> 0:03:28.880 twelve months. I don't think there's anything intrinsic. I think 0:03:28.880 --> 0:03:32.600 you just have to follow Bob Mundel and look at prices. 0:03:32.680 --> 0:03:36.080 And there are two big prices uh to look at, 0:03:36.120 --> 0:03:38.640 and that's a dollar er rate in gold and then 0:03:38.920 --> 0:03:41.440 and then beyond that you've got a lot of commodities. 0:03:41.480 --> 0:03:44.080 I mean, all the base medals are done. Part of 0:03:44.080 --> 0:03:47.920 the tightness, by the way, China is extremely tight now. 0:03:48.000 --> 0:03:52.200 The big engine for growth in the world economy that 0:03:52.320 --> 0:03:55.560 the last ten to twenty years has been China. And 0:03:56.120 --> 0:03:58.400 if you look at the trend rate of growth and 0:03:58.440 --> 0:04:01.920 the money supply since too COS and three in China, 0:04:02.120 --> 0:04:05.960 the trend rate six for m TOO that's their broad 0:04:06.040 --> 0:04:10.280 money major it's only growing at nine percent now. The 0:04:10.360 --> 0:04:13.160 trend rate of growth for credit to their private sector 0:04:13.200 --> 0:04:16.320 in China has been sixteen percent also and it's only 0:04:16.400 --> 0:04:20.440 growing at nine now. And I think President g is 0:04:20.760 --> 0:04:25.320 hit the panic button. They they've they've trying to unwind 0:04:25.360 --> 0:04:29.520 the squeeze that they've put on and rescue things, but 0:04:29.920 --> 0:04:32.760 it might be too little, too late. China is very 0:04:32.800 --> 0:04:36.160 tight right now. So you've got the two the two 0:04:36.160 --> 0:04:40.320 big elephants in the room said, the central bank in 0:04:40.440 --> 0:04:44.920 China are very tight, and that's putting pressure on all 0:04:44.960 --> 0:04:50.040 these half baked currencies and and half half bag countries. 0:04:50.120 --> 0:04:54.280 Quite frankly, just come and glued. These carry trades unwind 0:04:54.480 --> 0:04:57.479 very fast under these conditions. All right, So let's say 0:04:57.480 --> 0:05:01.679 that Professor Stephen Hanky gets a call from the Central 0:05:01.680 --> 0:05:07.200 Bank of Turkey. What does he say? Okay, here's here's 0:05:07.240 --> 0:05:10.760 what's going on in Turkey. Uh. The inflation rate now 0:05:10.920 --> 0:05:14.800 is I measure it very accurately, is a hundred and 0:05:14.839 --> 0:05:18.440 one percent on an annual basis. The official rates fifteen 0:05:18.480 --> 0:05:22.520 point eight five percent. So you have massive negative real 0:05:22.680 --> 0:05:26.200 yields and the carry trade in Winding and Turkey. The 0:05:26.279 --> 0:05:30.160 crisis will continue for a long time, as it's done 0:05:30.240 --> 0:05:34.200 by the way in ninety four and two thousand and today. 0:05:34.400 --> 0:05:39.240 The only way to stop this nightmare in Turkey is 0:05:39.320 --> 0:05:41.599 to make the lira as good as gold, make it 0:05:41.720 --> 0:05:43.760 a clone of gold. And you do that with a 0:05:43.880 --> 0:05:50.120 currency board system. You fix the liras exchange uh and 0:05:50.240 --> 0:05:53.360 make it freely convertable at a fixed rate with gold, 0:05:53.520 --> 0:05:56.680 and you backed the lira a dent with gold reserves. 0:05:56.720 --> 0:05:59.599 So the la literally is good as good as gold. 0:05:59.640 --> 0:06:03.920 I think a thing I would stop the ham racking there, 0:06:04.279 --> 0:06:07.360 Steve Stephen Hankey, with this focus of the Johns Hopkins University, 0:06:07.400 --> 0:06:10.680 were thrilled to bring him to you today. Steve, there's 0:06:10.720 --> 0:06:14.720 the mathematics of being log linear, a straight line on 0:06:14.800 --> 0:06:18.200 a percent change. Why access and then things get ugly 0:06:18.320 --> 0:06:21.080 and they curve, and then we go to the acclaimed 0:06:21.080 --> 0:06:24.760 world of Professor Hanky, which is hyperbolas, which focuses at 0:06:24.839 --> 0:06:29.160 moonshot think wheelbarrows of cash in Germany in World War Two. 0:06:29.320 --> 0:06:32.400 Are any of these e M currencies on the edge 0:06:32.680 --> 0:06:37.720 of hanky hyperbola? No, I don't think so, Tom, because 0:06:37.760 --> 0:06:41.280 to get to those points, they're they're very rare. They're 0:06:41.320 --> 0:06:44.360 they've actually only been fifty eight in the world history 0:06:44.520 --> 0:06:48.760 that have gone to that hyperbola point and hit hyper 0:06:48.800 --> 0:06:54.000 inflation where yes, inflation rates per month. And we have 0:06:54.120 --> 0:06:59.280 one now, of course Venezezuela I'm major with high frequency 0:06:59.400 --> 0:07:02.960 data that I'm plaction rate every day and it's running 0:07:03.000 --> 0:07:07.039 sixty two thousand percent year every year, and the monthly 0:07:07.120 --> 0:07:10.520 rate is a hundred seventy two. So this has been 0:07:10.560 --> 0:07:13.840 going on since November of two thousand and sixteen. So 0:07:14.880 --> 0:07:19.360 it hit, it hit your your point, Tom, and and 0:07:19.440 --> 0:07:23.520 it's the only one that steve. What's the prescription here 0:07:23.520 --> 0:07:25.680 for the I m F. I mean, you're one of 0:07:25.680 --> 0:07:28.600 the giants in this racket, with the late Michael Moosa, 0:07:28.680 --> 0:07:32.720 the late Rudy dorn Bush, Ken rogoff in the others 0:07:33.280 --> 0:07:35.960 in the angst it's out there at Global Wall Street. 0:07:36.080 --> 0:07:39.560 Is the institutions, particularly I m F can't come to 0:07:39.600 --> 0:07:43.200 the rescue this time because of the new size of 0:07:43.400 --> 0:07:47.239 em markets. Is that a valid worry or can leguard 0:07:47.320 --> 0:07:51.320 get it done? I don't think size is the problem. 0:07:51.440 --> 0:07:54.520 I think the I m F is just has wrong 0:07:54.600 --> 0:07:58.640 headed thinking. I mean you look, for example, even at Venezezuela, 0:07:58.680 --> 0:08:01.400 we just talked about the inflation. Right, you can measure 0:08:01.880 --> 0:08:05.440 hyper inflations, and you can measure them very accurately. You 0:08:05.520 --> 0:08:10.000 can't forecast the course or duration Tom of a of 0:08:10.040 --> 0:08:12.920 a hyper inflation and the i m F just keeps 0:08:12.960 --> 0:08:18.000 putting these inflation forecast out for Venezezuela. They they're a joke, 0:08:18.440 --> 0:08:23.360 complete complete revelation of the incompetence of the I m F. 0:08:23.600 --> 0:08:26.520 They say inflation is going to be a million percent 0:08:27.120 --> 0:08:29.120 by the end of the year in Venezuela. And of 0:08:29.160 --> 0:08:33.839 course the press, like good stenographers, just repeat this nonsense. 0:08:33.880 --> 0:08:37.560 I mean, you cannot forecast hyper inflation period, that's the 0:08:37.640 --> 0:08:40.920 end of the story. You can measure it very very accurately, 0:08:41.320 --> 0:08:46.239 can't forecast it. So the solution on these exchange rate regimes, 0:08:46.559 --> 0:08:50.760 they're done in Argentina. Now Macree called the I m 0:08:50.880 --> 0:08:55.000 F fireman in and and it's been a complete disaster. 0:08:56.400 --> 0:08:59.280 Everything has collapsed since the I m F has come down. 0:08:59.520 --> 0:09:02.959 And mac Cree doesn't realize. I don't know why he 0:09:03.080 --> 0:09:06.440 called the i m F because in two thousand and one, 0:09:06.600 --> 0:09:11.280 remember we had the I m F suspending the program 0:09:11.280 --> 0:09:16.240 to UH Argentina and this was Kohler was the manager 0:09:16.360 --> 0:09:20.080 director then and and and I am at basically double 0:09:20.160 --> 0:09:26.680 crossed Argentina and the complete meltdown during the crisis and 0:09:26.760 --> 0:09:30.040 the huge bank runds in November of two thousand one. 0:09:31.120 --> 0:09:33.520 I m F. We're gonna run out of time. I 0:09:33.520 --> 0:09:35.600 gotta cut Steve hank you off, which is you gotta 0:09:35.640 --> 0:09:37.920 talk about the Brazilian I do. But we're gonna We're 0:09:37.920 --> 0:09:40.079 gonna come. We're gonna get Steve Hankey on as much 0:09:40.120 --> 0:09:43.319 as we can through this interesting e M time again. 0:09:43.400 --> 0:10:01.440 He is at Johns Hopkins University. President Donald Trump, of course, 0:10:01.480 --> 0:10:05.400 sitting down for an exclusive Oval Office interview with Bloomberg, 0:10:05.760 --> 0:10:09.240 and the President covered a variety of topics, including the 0:10:09.320 --> 0:10:12.720 Russia probe, as well as trade policy and when it 0:10:12.800 --> 0:10:16.160 comes to the trade talks with the European Union, the 0:10:16.200 --> 0:10:20.560 President said that the European unions offered to scrap tariffs 0:10:20.600 --> 0:10:27.360 on US made automobiles is not enough. It's not good enough, no, 0:10:28.320 --> 0:10:30.320 because they do a lot more auto business than we 0:10:30.320 --> 0:10:32.800 will ever do. In other words, well, first of all, 0:10:33.160 --> 0:10:35.680 it's not just tariffs. They also barriers up to our cars. 0:10:35.679 --> 0:10:38.600 They have they'll take the barriers down and they'll charge 0:10:38.640 --> 0:10:40.480 us no text. But it's not good enough because they 0:10:40.480 --> 0:10:45.520 will always sell more cars. Their cars, their habits, their 0:10:45.600 --> 0:10:48.360 consumer habits are to buying their cars, not to buying 0:10:48.360 --> 0:10:52.600 our cars. In response, the European Commission President Jean Claude 0:10:52.679 --> 0:10:57.480 Junker said that the European Union will retaliate if President 0:10:57.559 --> 0:11:02.319 Trump raises tariffs on europe Pan autos, and that is 0:11:02.360 --> 0:11:04.080 a good time to bring in a gentleman who had 0:11:04.080 --> 0:11:08.000 a conversation with the president yesterday. Under the earl portrait 0:11:08.120 --> 0:11:11.920 of Andrew Jackson, painted in eighteen thirty five at the 0:11:11.960 --> 0:11:17.000 Resolute Desk are John Michael Fait in conversation with the President. John, 0:11:17.040 --> 0:11:18.920 what was the energy like in the room away from 0:11:18.960 --> 0:11:22.480 the formal portraits, in the important comments and the president? 0:11:22.800 --> 0:11:26.679 What was the backstory as you entered the Oval Office. Well, 0:11:26.720 --> 0:11:29.280 there's a lot of energy, almost of the March energy 0:11:29.360 --> 0:11:32.679 is there is with you and Pim, but it's it's 0:11:32.840 --> 0:11:35.199 Trump is I think the main thing which comes through 0:11:35.240 --> 0:11:37.240 the President of the moment is that he is someone 0:11:37.280 --> 0:11:40.280 who's in a sense of doubling down on Donald Trump. 0:11:40.320 --> 0:11:43.200 You know, he is not Other people may look at 0:11:43.200 --> 0:11:45.559 what's happening in the Oval Office and think he's got 0:11:45.600 --> 0:11:48.480 problems with the mid terms, he's got problems with Mueller. 0:11:49.120 --> 0:11:52.640 He's got people resigning from his internal kind of a 0:11:52.720 --> 0:11:55.760 set of advisors. From his point of view, it's almost 0:11:55.800 --> 0:11:58.960 the opposite. He gives himself a grade A plus. He 0:11:59.040 --> 0:12:01.960 claims he has the best happened. As ever, he's forging 0:12:01.960 --> 0:12:05.080 ahead on everything. You know, he's just persuaded Mexico to 0:12:05.160 --> 0:12:09.800 do well, and Canada's next. And as you said in 0:12:09.840 --> 0:12:11.560 the clip, you know he's now moving on to the 0:12:11.720 --> 0:12:14.120 w g O and Europe. And actually, I think you 0:12:14.160 --> 0:12:17.120 know there is a like all these people, many politicians 0:12:17.120 --> 0:12:19.600 trying to spin you things, think Trump genuinely believed that 0:12:19.640 --> 0:12:24.199 he's achieving these things. And the better or worst, that 0:12:24.320 --> 0:12:25.800 is the world we live in. If we were to 0:12:25.800 --> 0:12:29.000 write a Bloomberg quick take or something you helped invent 0:12:29.040 --> 0:12:32.880 the fourteen page wonder in the Economist magazine, what what 0:12:33.120 --> 0:12:35.640 we say would be the response of Europe, the response 0:12:35.679 --> 0:12:39.760 of China, of Canada, of Mexico to all of his trade, 0:12:40.480 --> 0:12:43.640 not hysteria, but just trade discourse. Do they just does 0:12:43.800 --> 0:12:46.840 turn to the president and say no, Well, it's interesting 0:12:47.200 --> 0:12:50.600 you talk to business people and there is one bit 0:12:50.840 --> 0:12:53.600 of business people where most business people want him to 0:12:53.679 --> 0:12:56.960 succeed a bit um. So for instance with China, you 0:12:57.000 --> 0:12:59.360 talk to most European business people and they will say 0:12:59.520 --> 0:13:03.000 it is it would be wonderful if Donald Trump could 0:13:03.040 --> 0:13:06.880 get China to open up. Um, and you might also 0:13:06.920 --> 0:13:09.440 talk to American and European people who say it would 0:13:09.440 --> 0:13:11.280 be very good if there were a fewer trade barriers 0:13:11.320 --> 0:13:14.480 between American Europe. But and this is a very big 0:13:14.520 --> 0:13:17.080 butt at the very least, he's playing with fire with 0:13:17.160 --> 0:13:19.600 these things, because most people would still say the w 0:13:19.760 --> 0:13:23.880 t O is incredibly useful and having a multilateral forum 0:13:24.120 --> 0:13:26.360 increases the amount of free trade all the way around 0:13:26.360 --> 0:13:29.280 the world, generally to the benefit of America as well. 0:13:30.000 --> 0:13:33.199 Um And obviously nobody wants the trans Atlantic trade war, 0:13:33.440 --> 0:13:36.920 and the Chinese for the moment showing every sign of 0:13:36.960 --> 0:13:40.920 wanting to match Donald Trump tariff for tariff, So it 0:13:41.000 --> 0:13:44.920 is a slightly more nuanced picture than that either he 0:13:44.920 --> 0:13:47.760 would present all for that matter, his foes and a 0:13:47.800 --> 0:13:49.959 lot of business people, I think quietly under their breath, 0:13:50.000 --> 0:13:53.400 were condemning the trade war whilst desperately hoping that he succeeds, 0:13:53.480 --> 0:13:56.719 especially with the Chinese. John michaels Wade, I want to say, 0:13:56.800 --> 0:13:59.000 leave it to an Englishman to teach us about our 0:13:59.040 --> 0:14:02.200 own role in history in the United States. Sometimes it 0:14:02.240 --> 0:14:06.599 takes someone from the outside to have a clear perspective. 0:14:07.280 --> 0:14:12.280 You've interviewed many world leaders, do you view Donald Trump 0:14:12.360 --> 0:14:15.920 is different? But yes, he is entirely different. Um. I 0:14:15.920 --> 0:14:19.560 think there are many world leaders who will try tom 0:14:19.920 --> 0:14:22.040 who will try to sort of spin things or try 0:14:22.040 --> 0:14:24.120 to say they're doing better. You know, Donald Trump gives 0:14:24.160 --> 0:14:26.760 more impression of being a He's a sort of train 0:14:26.880 --> 0:14:30.040 heading in every direction at once, and even when he's 0:14:30.080 --> 0:14:33.520 trying to restrain himself, he finds it very difficult, and 0:14:34.160 --> 0:14:37.040 some cases he kind obloviates and goes past things. In 0:14:37.640 --> 0:14:40.160 other cases he just says what he thinks. And I 0:14:40.160 --> 0:14:43.320 think that is the better or worth again to keep 0:14:43.360 --> 0:14:46.320 part of his appeal to people, because I think to 0:14:46.400 --> 0:14:49.320 his base he's someone who tries to say how he 0:14:49.360 --> 0:14:51.960 sees it, and that is that is worth something to him. 0:14:52.000 --> 0:14:53.880 And I think to any extent that he tried to 0:14:53.920 --> 0:14:57.120 bottle it up. Um, he's changed on that. If you 0:14:57.160 --> 0:14:59.320 want an example of one area though, where he has 0:14:59.400 --> 0:15:02.920 become slightly more disciplined, but you can see it in 0:15:02.960 --> 0:15:06.480 his eyes that he's straining at it. It's the fed 0:15:06.680 --> 0:15:08.960 I think he has sort of accepted, after a degree 0:15:09.000 --> 0:15:12.760 of annoyance about the fact that he can't control the 0:15:12.760 --> 0:15:16.080 Federal Reserve. He's now accepted that that's probably a good thing. 0:15:16.160 --> 0:15:18.360 That is good that presidents can't do that, and he 0:15:18.480 --> 0:15:21.680 was polite about j Powell, but you can sense even 0:15:21.680 --> 0:15:24.840 then he wants to be able to run it. John 0:15:24.840 --> 0:15:26.840 Michael Twaitt with us, John, I want to switch gears here, 0:15:26.840 --> 0:15:30.360 and of course we're looking for an exclusive and lengthy 0:15:30.560 --> 0:15:33.560 long read from John Michael Twayton Company Monday. So I 0:15:33.600 --> 0:15:37.080 was thinking of Alexis to Tokeville when I was thinking 0:15:37.160 --> 0:15:39.560 of having an Englishman talk about America. That would be 0:15:39.640 --> 0:15:41.800 very good and I often have to I often have 0:15:41.840 --> 0:15:44.680 to endure Tom Keene talking about prisons. I think, no, no, 0:15:44.840 --> 0:15:46.840 we're going to Britain right now, and I know we've 0:15:46.840 --> 0:15:49.440 got a long read feature coming out five thousand words 0:15:49.480 --> 0:15:54.880 on Monday. Theresa made dancing her way across Africa. But 0:15:55.000 --> 0:15:58.520 except for that, John, we need a Britain update. Would 0:15:58.560 --> 0:16:02.840 you explain to me what the incentive is for anybody 0:16:03.000 --> 0:16:08.040 in Europe to put up with your Brexit debate? What's 0:16:08.240 --> 0:16:12.320 what's there incentive even to become engaged in this domestic 0:16:12.400 --> 0:16:16.960 foolishness of your United Kingdom. Well, you've actually you're actually 0:16:17.000 --> 0:16:19.760 asking the key question, because what is happening at the 0:16:19.800 --> 0:16:23.360 moment as the Europeans have just let it be, There's 0:16:23.440 --> 0:16:26.800 there's a slight sign over the past kind of ten 0:16:26.880 --> 0:16:30.840 days that the Europeans have moved a bit. Macrons begun 0:16:30.920 --> 0:16:33.160 to say, look, it's a bit silly if Britain just 0:16:33.200 --> 0:16:36.840 crashes out of this thing. Um. It's already pretty clear 0:16:36.920 --> 0:16:40.720 that most of the burden of Brexit will be carried 0:16:40.760 --> 0:16:44.440 by Britain, but it isn't. It's also not entirely in 0:16:44.760 --> 0:16:48.040 Europe's interest. In France's Britain's neighbor. A lot of its 0:16:48.040 --> 0:16:51.760 trade comes through France. It's not in France's interest to 0:16:51.840 --> 0:16:54.960 have a complete sort of disaster on his on his doorstep. 0:16:55.680 --> 0:16:59.760 So from business people, from politicians a bit there's at 0:16:59.840 --> 0:17:03.800 least slightly more willingness to come in. But you are 0:17:03.840 --> 0:17:07.359 basically right that what has happened is that from the 0:17:07.400 --> 0:17:10.320 British point of view, every day is dominated by Brexit 0:17:10.320 --> 0:17:12.720 headlines and what it means, and this it means. He 0:17:12.800 --> 0:17:15.600 will visit the people who run France or Germany or 0:17:15.640 --> 0:17:18.680 Italy and it's something they think about once every two 0:17:18.680 --> 0:17:22.520 months because they've been very happy leaving this with Michelle Barnier, 0:17:22.640 --> 0:17:27.960 who is the European Commissions negotiator. Michael's way, it's like 0:17:28.000 --> 0:17:30.720 a digital Maven. I'm watching Theresa May to her second 0:17:30.800 --> 0:17:34.600 dance off the Independent video. Why don't we have that video? 0:17:34.760 --> 0:17:38.200 I mean, thanks to the Independent for giving me background 0:17:38.200 --> 0:17:41.520 briefing for it is an amazing video. I don't think 0:17:41.520 --> 0:17:44.320 even I tried to work out that maybe some people 0:17:44.359 --> 0:17:52.040 may feel sympathy for Theresa John does the Have we 0:17:52.200 --> 0:17:56.800 lost the perspective that the balance of power in Europe 0:17:56.880 --> 0:18:01.520 has changed and will change because of the exit from 0:18:01.560 --> 0:18:05.320 the European Union. Yes, I think what is happening is 0:18:05.359 --> 0:18:08.760 that there are two. If we've had a somewhat Anglo 0:18:08.920 --> 0:18:12.639 anglocentric conversation said, I think there's any harm in saying 0:18:12.640 --> 0:18:15.160 this is I think from an Anglo centric point of view. 0:18:15.960 --> 0:18:18.600 People used to talk a bit vaguely about an Anglo 0:18:18.640 --> 0:18:23.760 sphere where obviously America is the predominant partner and Britain 0:18:24.000 --> 0:18:27.960 plays the secondary role. But together they're probably greater than 0:18:28.000 --> 0:18:31.000 the some of their parts. That has always helped America 0:18:31.080 --> 0:18:33.800 having somebody else who's willing to stick up for roughly 0:18:33.800 --> 0:18:37.480 the same things. But firstly, the agenda which they're both 0:18:37.520 --> 0:18:41.560 pushing things like generally free trade, opening up things. Well, 0:18:41.640 --> 0:18:46.840 that is no longer the priority of Donald Trump. Certainly. Secondly, 0:18:46.880 --> 0:18:49.640 you've got America withdrawing from some areas of the world, 0:18:49.680 --> 0:18:52.320 not wanting to do things. And thirdly, who've got Britain 0:18:53.000 --> 0:18:56.240 coming out of its main forum to influence people, which 0:18:56.320 --> 0:18:58.679 was the European Union. And so I think from the 0:18:58.720 --> 0:19:03.159 point of view of that Anglo message, which is to 0:19:03.200 --> 0:19:04.840 want to build out too big, I think there has 0:19:04.880 --> 0:19:08.040 been a retreat. And it matters enormously that if you 0:19:08.080 --> 0:19:11.880 talk to American politicians, the most valuable thing about Britain 0:19:12.000 --> 0:19:15.000 was that it was the kind of friendly to American 0:19:15.200 --> 0:19:18.800 voice inside the U. I have to leave their gn Michaels, 0:19:18.960 --> 0:19:23.080 thank you so much. Congratulations on the many themes of 0:19:23.119 --> 0:19:39.320 your conversation with the President of the United States. Right 0:19:39.320 --> 0:19:42.080 now we speak with CBS is Margaret Brennan, who has 0:19:42.119 --> 0:19:46.120 a spirited face and Nation Sunday morning. Of course you'll 0:19:46.119 --> 0:19:49.160 hear it on Bloomberg Radio Sunday two PM. I mean 0:19:49.200 --> 0:19:53.679 that speaks to the noise of this August Margaret in 0:19:53.800 --> 0:19:58.440 Washington to see Christia Friedland so abruptly exit to try 0:19:58.480 --> 0:20:01.680 to get this discussion at done. It's not a boring August, 0:20:01.800 --> 0:20:04.919 is it. No. I don't think there is such a 0:20:04.920 --> 0:20:07.800 thing as a boring August with the Trump administration um 0:20:07.800 --> 0:20:10.880 and certainly this push to get a deal by today, 0:20:11.000 --> 0:20:14.360 by Friday, so that they can move forward with presenting 0:20:14.359 --> 0:20:18.040 to Congress some kind of proposal to overhaul NAFTA is 0:20:18.080 --> 0:20:21.240 something that many, like the president son in law Jard Kushner, 0:20:21.280 --> 0:20:23.879 are really pushing for. The hope is that it would 0:20:23.880 --> 0:20:27.520 lift from the political pressure both from Mexico ahead of 0:20:27.520 --> 0:20:30.040 their inauguration of their new president and ahead of those 0:20:30.440 --> 0:20:34.040 upcoming elections in Canada in twenty nineteen. It's not clear 0:20:34.080 --> 0:20:36.440 if they can win that gamble. There's so many themes 0:20:36.480 --> 0:20:38.920 to talk about, Margaret, including what we're going to see 0:20:38.920 --> 0:20:41.640 in an hour in fifty five minutes on Capitol Hill 0:20:42.280 --> 0:20:45.640 with the Senator from Arizona. But to stay on trade. 0:20:46.320 --> 0:20:50.640 You have an experience of these negotiations, and I would 0:20:50.680 --> 0:20:59.600 suggest it's an experience of complexity. Does this administration do complexity? Uh? 0:20:59.640 --> 0:21:03.879 They do in the sense that there is a number 0:21:03.920 --> 0:21:07.720 of people within the administration with varying different views as 0:21:07.720 --> 0:21:09.960 to how all of this should end up. But it 0:21:10.080 --> 0:21:14.960 seems like fundamentally on this issue of NAFTA UM, it 0:21:15.080 --> 0:21:17.359 comes back to some of the very basics that have 0:21:17.480 --> 0:21:21.720 always stuck the relationship, including, you know, coming to some 0:21:21.800 --> 0:21:25.000 kind of compromise with Canada over how their dairy farmers 0:21:25.080 --> 0:21:29.040 policies are are protected UM up there, and as well 0:21:29.040 --> 0:21:32.680 as this dispute mechanism that continues to be a sticking 0:21:32.720 --> 0:21:36.200 point within the administration. It does appear that the President 0:21:36.280 --> 0:21:38.600 has made a push, with the urging of his son 0:21:38.640 --> 0:21:41.359 in law, Jared Kushner, to get the U. S. Trade 0:21:41.359 --> 0:21:45.280 Representative to make some move to make compromise possible on NAFTA. UH. 0:21:45.400 --> 0:21:48.480 The question, of course, is will the Canadians get on 0:21:48.560 --> 0:21:50.680 board with what Mexico and the US have agreed to 0:21:50.760 --> 0:21:56.000 at this point, Margaret, President Donald Trump has definitely boasted 0:21:56.040 --> 0:21:58.120 of the performance of not only the U. S. Stock 0:21:58.160 --> 0:22:01.560 market but the US economy. Do you get the sense 0:22:01.600 --> 0:22:05.280 from talking to your sources in Washington that the political 0:22:05.400 --> 0:22:11.119 establishment also feels that level of enthusiasm for American economic 0:22:11.200 --> 0:22:16.200 power visa VI these trade negotiations. They have enthusiasm about 0:22:16.200 --> 0:22:19.200 the economic power, but they've got great anxiety that all 0:22:19.200 --> 0:22:23.919 of that could start being damaged or dissipate, particularly towards 0:22:23.920 --> 0:22:26.800 the end of September as some of those retaliatory tariffs 0:22:26.840 --> 0:22:31.200 start to bite in the heartland. Um, And there's really 0:22:31.240 --> 0:22:33.800 no you know, even though you see these glimmers of 0:22:33.840 --> 0:22:38.240 hope with say Europe or Canada and Mexico on potential 0:22:38.280 --> 0:22:42.400 trade negotiations or even deals, the Chinese are such a 0:22:42.480 --> 0:22:46.879 different group of negotiators and really I'm not hearing any 0:22:47.320 --> 0:22:50.520 momentum on that front. And that is the trade dispute 0:22:50.520 --> 0:22:54.040 that really could bite, And so there is anxiety around that. 0:22:54.080 --> 0:22:57.320 There's this urge among Republicans to say, get something done 0:22:57.320 --> 0:23:00.840 on trade where we can stand behind you, uh, you know, 0:23:01.359 --> 0:23:05.320 uh and stand with you against China. But so far, um, 0:23:05.359 --> 0:23:07.359 there's very little hope. And you heard that from the 0:23:07.400 --> 0:23:11.200 President just this week, blaming China for what he says 0:23:11.280 --> 0:23:14.480 is diplomacy faltering with North Korea. Margaret tell us about 0:23:14.480 --> 0:23:19.199 Face the Nation Sunday mornings. We'll be tracking and continuing 0:23:19.240 --> 0:23:22.680 to report on these services here in Washington for Senator 0:23:22.800 --> 0:23:26.119 John McCain, and we will be speaking to former Secretary 0:23:26.119 --> 0:23:29.280 of State and former Senator John Kerry this Sunday, who's 0:23:29.280 --> 0:23:31.440 got a brand new book out. He spent a lot 0:23:31.480 --> 0:23:33.240 of time with John McCain, even though the two of 0:23:33.280 --> 0:23:36.240 them were opposite sides of the aisle and had very 0:23:36.280 --> 0:23:39.520 different perspectives. You know, John Carey rocketed to fame as 0:23:39.560 --> 0:23:43.920 a war protester, John McCain a prisoner of that war, 0:23:44.320 --> 0:23:48.159 and the two found common cause in the nineties to say, 0:23:48.240 --> 0:23:51.680 let's make peace, let's help find uh those missing in 0:23:51.800 --> 0:23:55.520 action and use that toe hole to establish diplomatic relations 0:23:55.560 --> 0:23:58.879 between the US and Vietnam. It's really an extraordinary story, 0:23:59.400 --> 0:24:02.200 and and Terry tells us about that. Michael Brennan, thank 0:24:02.200 --> 0:24:04.280 you so much. Of course, you can see Face a 0:24:04.400 --> 0:24:08.080 Nation on CBS. Do that Sunday morning. You can listen 0:24:08.119 --> 0:24:10.639 to Face the Nation Bloomberg Radio Sunday two PM in 0:24:10.640 --> 0:24:13.600 New York, Washington, d C. And now Bloomberg one or 0:24:13.600 --> 0:24:17.960 six one Boston, Newburyport. Face the Nation this Sunday at 0:24:18.000 --> 0:24:35.280 two I'm Bloomberg Radio. We digress And if you go 0:24:35.359 --> 0:24:39.360 to the Point Sky website Brian Kelly's invention, you will 0:24:39.400 --> 0:24:43.760 find it a wonderfully eclectic set of articles. Mike or 0:24:43.800 --> 0:24:47.680 Not is out moments ago with an article on how 0:24:47.720 --> 0:24:51.280 they figure out what the flight path will be for 0:24:51.400 --> 0:24:54.399 you when you go over oceans, just as that is 0:24:54.480 --> 0:24:57.440 one idea of the richness of this. Joining us here 0:24:57.480 --> 0:24:59.840 on a Labor Day weekend as we all traveled. Julian 0:25:00.080 --> 0:25:05.000 Hell who was with the points uh Guy website, Julian, 0:25:05.200 --> 0:25:08.879 just congratulations on what your website does in terms of 0:25:08.920 --> 0:25:13.280 eclectic travel. But I've got one arch question, when does 0:25:13.320 --> 0:25:16.760 this all end? There's been articles that JP Morgan is 0:25:16.880 --> 0:25:20.800 overwhelmed by the success of their sapphire program. I'm sure 0:25:20.840 --> 0:25:24.200