WEBVTT - Zelenskiy Makes Historic Visit to Washington 0:00:01.840 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:06.840 Tim Stanevik. We're here every day bringing you the latest 0:00:06.840 --> 0:00:11.000 news from the world's of business and finance, technology, politics, economics, 0:00:11.039 --> 0:00:14.040 all harnessing the power of Business Week reporters and editors, 0:00:14.160 --> 0:00:17.000 not to mention our journalists and analyst in more than 0:00:17.040 --> 0:00:21.160 one twenty countries. You can download Bloomberg Business Week on iTunes, SoundCloud, 0:00:21.239 --> 0:00:23.320 or Bloomberg dot com. You can also listen to our 0:00:23.360 --> 0:00:26.160 radio show at two pm Eastern Time on Bloomberg Radio 0:00:26.280 --> 0:00:30.600 or stream us live on YouTube and Bloomberg dot Com. Alright, 0:00:30.680 --> 0:00:33.440 let's get back to the news of the day. We're 0:00:33.479 --> 0:00:37.839 going to talk about again Presidents Vladimir's Lensky's visit to 0:00:38.080 --> 0:00:39.640 the White House. We're going to do that now with 0:00:39.760 --> 0:00:43.440 Angela Stent. She is senior fellow at the Brookings Institute. 0:00:43.800 --> 0:00:46.279 Joining us now and Angela, it's great to have you 0:00:46.800 --> 0:00:49.360 with us. As we've walked through a few different times, 0:00:49.360 --> 0:00:53.600 this is President Zelinski's first trip outside of Ukraine in 0:00:53.800 --> 0:00:57.520 three hundred days since the invasion. Walk us through, I 0:00:57.560 --> 0:01:01.520 guess sort of the signal they put it into context 0:01:01.600 --> 0:01:04.800 how important this trip is. Well, this is indeed a 0:01:04.920 --> 0:01:08.240 historic trip. He hasn't left the country. He didn't go 0:01:08.600 --> 0:01:10.720 to the G twenty. He's gone to know how he's 0:01:10.760 --> 0:01:14.080 done everything by zoom. But I think he realizes it 0:01:14.160 --> 0:01:16.840 is very important to come to the United States. This 0:01:17.000 --> 0:01:20.240 is a crucial period in this ongoing war. The Russians 0:01:20.280 --> 0:01:24.000 aren't doing well on the battlefield that Ukrainians are doing 0:01:24.080 --> 0:01:27.280 much better, but they're also being pummeled every day by 0:01:27.400 --> 0:01:31.040 Russian attacks and losing your electricity and border and heat 0:01:31.080 --> 0:01:33.840 and things like that. So he's coming to the United 0:01:33.880 --> 0:01:36.840 States to thank the United States for everything that's done. 0:01:37.520 --> 0:01:41.000 Without our weapons and our financial support, Ukraine probably wouldn't 0:01:41.000 --> 0:01:44.160 be where it is now. UM too, I think make 0:01:44.200 --> 0:01:47.840 sure when he talks to the Congress certainly that um 0:01:48.360 --> 0:01:51.440 they understand that Ukraine still needs their help because there 0:01:51.520 --> 0:01:54.120 is doubt about what's going to happen when the Republicans 0:01:54.160 --> 0:01:57.280 take over the House. And I'm sure he also wants 0:01:57.320 --> 0:01:59.560 to talk to the President. President Biden wants to talk 0:01:59.600 --> 0:02:02.760 to him about how does this go from here? What 0:02:02.760 --> 0:02:05.720 what does he envisage, UM is going to happen in 0:02:05.760 --> 0:02:08.800 this war? UM, so a lot to talk about and 0:02:09.200 --> 0:02:14.000 symbolically very important, you know, and I'm thinking about Vladimir 0:02:14.040 --> 0:02:17.959 Putin in Moscow where wherever he is right now watching 0:02:18.000 --> 0:02:22.440 this meeting on TV. Obviously I would have to assume 0:02:23.000 --> 0:02:26.920 this doesn't play well in Moscow. Does this risk sort 0:02:26.960 --> 0:02:31.240 of a more aggressive retaliation type of thing from from 0:02:31.320 --> 0:02:35.640 Vladimir Putin to to watch this meeting take place? Well, certainly. 0:02:35.680 --> 0:02:38.839 His press secretary this morning said, you know, the more 0:02:38.880 --> 0:02:41.720 assistance of the US gives, you know, the more the 0:02:41.840 --> 0:02:44.920 risk of escalation there is. You know, we've been so 0:02:45.160 --> 0:02:48.040 worried about escalation, and what we've seen the Russians do 0:02:48.160 --> 0:02:52.720 clearly is with this indiscriminate bombing of civilian targets, but 0:02:53.160 --> 0:02:57.679 short of using a tactical nuclear weapon, which I think 0:02:57.680 --> 0:03:00.800 the likelihood of that is not very great. Um, the 0:03:00.880 --> 0:03:03.760 Russians want us to believe that they're going to escalate. 0:03:03.800 --> 0:03:07.240 They want to intimidate the Ukrainians and the West into 0:03:07.320 --> 0:03:10.720 not doing more. But I'm not sure that this really 0:03:10.760 --> 0:03:13.320 does risk very much more because as I said, the 0:03:13.360 --> 0:03:16.600 Russians are not doing well on the battlefield. That yes, 0:03:16.680 --> 0:03:20.080 they can continue to bomb these civilian targets, but they've 0:03:20.120 --> 0:03:23.240 been doing that for the past few weeks. Anyway, Well, Ahula, 0:03:23.360 --> 0:03:25.639 talk to us about that a little bit more. Sort 0:03:25.680 --> 0:03:32.080 of the Russian perspective, specifically, the Putin expects expectation when 0:03:32.280 --> 0:03:36.560 he started this invasion three hundred days ago. Did he 0:03:36.600 --> 0:03:39.160 have any idea or I don't know. Did he Do 0:03:39.560 --> 0:03:41.600 you think that he thought we would be talking about 0:03:41.600 --> 0:03:45.320 this three hundred days later? Certainly not. He thought that 0:03:45.800 --> 0:03:47.880 right that they be able to take key of in 0:03:48.000 --> 0:03:51.440 three days and conquer the whole country. So I'm sure 0:03:51.440 --> 0:03:54.000 he had, in his wildest dreams, didn't think that the 0:03:54.000 --> 0:03:57.320 war would be going on. Because they totally underestimated the 0:03:57.440 --> 0:04:00.360 Ukrainians ability and will to fight back, and they have 0:04:00.640 --> 0:04:05.320 underestimated Western solidarity. They didn't think the US, we're back 0:04:05.920 --> 0:04:08.440 and it's European. Our eyes were back Ukraine the way 0:04:08.480 --> 0:04:11.640 it has so I think from their perspective, um this 0:04:11.640 --> 0:04:15.920 this was unexpected. The Russians now portrayed this war as 0:04:15.960 --> 0:04:19.080 a proxy war between Russia and the West. They see 0:04:19.120 --> 0:04:22.560 this as a war between them and primarily the United States. 0:04:22.720 --> 0:04:25.080 That's not how we see it. It's a war between 0:04:25.160 --> 0:04:28.159 Russia and Ukraine, and we're helping support the Ukrainians. But 0:04:28.279 --> 0:04:31.200 this is really feeding in through the narrative that Foodin 0:04:31.320 --> 0:04:33.960 is telling the Russian public that this is really the 0:04:34.080 --> 0:04:38.479 USS is guilty here, you know, Angela, I know, uh, 0:04:38.800 --> 0:04:43.159 President Zelinski is in DC's mainly to get more weapons 0:04:43.320 --> 0:04:45.920 in the fight against Russia. But boy, as I think 0:04:45.960 --> 0:04:50.919 of that cold winter approaching and really already here in Ukraine, 0:04:51.480 --> 0:04:54.000 we talk to us a little bit about what that 0:04:54.200 --> 0:04:56.720 winter is going to look like for Ukraine this year 0:04:56.760 --> 0:04:59.320 and is there anything uh, the US can do to 0:04:59.320 --> 0:05:02.120 to help them on out front. Well, I mean, it's 0:05:02.160 --> 0:05:04.919 going to be a very cold, dark winter, whatever the 0:05:04.920 --> 0:05:07.280 temperatures are. I mean, they're people who have already been 0:05:07.320 --> 0:05:12.120 existing without heat, without electricity, and without running water in 0:05:12.279 --> 0:05:16.000 cities and in rural areas too. But all the more 0:05:16.040 --> 0:05:19.880 that the Russians bomb them, the more that that strengthens 0:05:19.920 --> 0:05:22.560 the will of the Ukrainian people to resist Russia. But 0:05:22.640 --> 0:05:26.680 it's obviously very, very difficult to live under those circumstances. 0:05:26.720 --> 0:05:29.159 So what the US can do is I think we've 0:05:29.200 --> 0:05:33.480 given them some assistance in trying to repair their electricity 0:05:33.520 --> 0:05:37.560 grid and things like that, but by providing them with weapons, 0:05:37.560 --> 0:05:39.640 and we now have announced that we will give them 0:05:39.640 --> 0:05:43.720 the Patriot missile. This is a defensive system to shoot 0:05:43.760 --> 0:05:46.960 back the Russian missiles. The more that we can provide 0:05:47.000 --> 0:05:50.920 them with the weapon we to deflect Russian attacks, then 0:05:51.720 --> 0:05:55.760 the less they will in fact lose their electricity uh, 0:05:55.800 --> 0:05:59.799 and the less their infrastructure will be damaged by the Russians. 0:06:00.160 --> 0:06:02.719 So it takes a few weeks to train people to 0:06:02.880 --> 0:06:06.000 use these systems, but hopefully in a few weeks time 0:06:06.440 --> 0:06:09.600 that will help. Well, that's you hit on what I've 0:06:09.600 --> 0:06:13.039 been wondering. So we're we're providing support in the form 0:06:13.080 --> 0:06:17.599 of weapons, but as you mentioned, that requires training as well. 0:06:17.640 --> 0:06:21.880 I mean, is the US providing that training? Yes, it is, 0:06:22.400 --> 0:06:25.800 will be training the Ukrainians I think probably at our 0:06:26.080 --> 0:06:30.839 airport base in Germany, um and uh, and that's where 0:06:30.880 --> 0:06:33.880 they'll receive the training. Edgella. How do you see this 0:06:33.920 --> 0:06:36.600 all ending? I mean, is there any world in which 0:06:36.960 --> 0:06:41.279 Vladimir Putin just concedes defeat and walks out of Ukraine? 0:06:41.320 --> 0:06:45.640 I assume not. But how does this resolve itself? Well, 0:06:45.680 --> 0:06:47.680 it's really unclear. This is a war that could go 0:06:47.760 --> 0:06:50.120 on for a long time. The Russians are digging their 0:06:50.160 --> 0:06:53.880 heels and Putin's view is the longer uh, this war 0:06:54.000 --> 0:06:56.640 goes on, the more likely it is that either the 0:06:56.760 --> 0:06:59.599 Ukrainian people will say, we've had enough of this weekend, 0:06:59.640 --> 0:07:02.279 live like this anymore, let's sit down at the table 0:07:02.320 --> 0:07:05.440 and make concessions UM. And the same with the Europeans 0:07:05.640 --> 0:07:09.239 who are also suffering from high gasoline prices and and 0:07:09.240 --> 0:07:12.840 and problems also with the supply of electricity and things 0:07:12.880 --> 0:07:15.320 like that, UM as a result of the sanctions by 0:07:15.360 --> 0:07:17.720 the way that we've imposted on Russia. And so they're 0:07:17.760 --> 0:07:21.040 hoping that he's hoping that the Europeans will say, maybe 0:07:21.040 --> 0:07:23.400 we have to rethink what we're doing, and the same 0:07:23.440 --> 0:07:26.880 in the United States. That's why President Zelinski is going 0:07:26.880 --> 0:07:28.800 to the Congress. You know, you have a lot of 0:07:28.840 --> 0:07:31.960 skeptics among the Republican Party who are questioning why the 0:07:32.080 --> 0:07:36.040 U should continue supporting Ukraine like that, So that that 0:07:36.200 --> 0:07:38.240 part of Prutin's game plan is to wait for the 0:07:38.280 --> 0:07:42.520 Western resolved to collapse UM and then force the Ukrainians 0:07:42.520 --> 0:07:45.480 to make these concessions. It doesn't look likely at the 0:07:45.480 --> 0:07:48.280 moment that the Ukrainians are going to do this. Blutin 0:07:48.560 --> 0:07:52.960 will never accept defeat, but in theory he could certainly 0:07:53.240 --> 0:07:57.520 um UH present this as some kind of a game 0:07:57.560 --> 0:08:01.080 for Russia if Russia's taking taken the little bit more territory, 0:08:01.640 --> 0:08:04.360 but he doesn't prepared to do that at the moment. 0:08:05.040 --> 0:08:08.560 And Angela, you hit on an important point this this 0:08:08.760 --> 0:08:13.120 Republican opposition when you're you're looking at, uh, what's happening 0:08:13.320 --> 0:08:17.280 on on US shores. And of course President Zelinski is 0:08:17.320 --> 0:08:20.800 set to address Congress later today, and we've been having 0:08:20.800 --> 0:08:23.040 this conversation. You think about Matt Gates, you think about 0:08:23.400 --> 0:08:26.880 Marjorie Taylor Green, their their opposition to the fact that 0:08:26.920 --> 0:08:30.920 the US is providing any aid at all to Ukraine. 0:08:31.040 --> 0:08:34.800 Is there anything in your view that that the President 0:08:34.880 --> 0:08:37.760 of Ukraine could say tonight in front of Congress that 0:08:37.840 --> 0:08:42.200 would shift sentiment. Well, I'm sure that he's not going 0:08:42.280 --> 0:08:44.000 to be able to change the mind of people like 0:08:44.040 --> 0:08:48.400 Marjorie Kayla Green. UM. But I think apparently he is 0:08:48.440 --> 0:08:52.560 going to meet them after the speech separately with Republican 0:08:52.600 --> 0:08:55.720 and Democratic leadership. UM. And I think what he's trying 0:08:55.720 --> 0:08:58.600 to do probably is to shore up people like uh, 0:08:58.760 --> 0:09:01.719 Mitch mcconnells and image will common people like that, who 0:09:01.760 --> 0:09:05.760 in fact is still very much in favor of supporting Ukraine. 0:09:05.800 --> 0:09:08.760 We shouldn't forget that until now, Ukraine has been one 0:09:08.800 --> 0:09:11.679 of the few issues on which there's been bipars In 0:09:11.800 --> 0:09:16.520 agreement UM in Congress to support it. So I think 0:09:16.559 --> 0:09:19.760 those people will be his targets. Um. I I read 0:09:19.800 --> 0:09:21.640 somewhere that he might be meeting with some of the 0:09:21.760 --> 0:09:24.680 Round Paul. Now, Round Paul is an extreme skeptic on this, 0:09:25.040 --> 0:09:29.160 so I have no idea whether that would change his mind. Actela, 0:09:29.559 --> 0:09:31.920 Just so our listeners have a sense of of why 0:09:31.960 --> 0:09:34.040 you know so much about this top topic, talk to 0:09:34.120 --> 0:09:37.679 us about your book about Vladimir Putin for a little bit, right, So, 0:09:38.000 --> 0:09:41.560 I've published a book called Putin's World, um. And in 0:09:41.600 --> 0:09:44.560 that book I look at Russia's relations both and the 0:09:44.600 --> 0:09:48.440 subtitles Russia against the West and with the Rest um. 0:09:48.559 --> 0:09:52.400 And in that book, I certainly look at why Russia's 0:09:52.400 --> 0:09:56.000 relations with the West have deteriorated so much, um in 0:09:56.040 --> 0:09:58.400 the last few years under Putin. But why the rest 0:09:58.440 --> 0:10:01.640 of the world, much of the US of the World, China, India, 0:10:01.920 --> 0:10:04.840 the other Bricks countries, much as the Middle East, Africa 0:10:04.920 --> 0:10:08.400 and Latin America. All of those countries right have not 0:10:08.640 --> 0:10:12.240 condemned Russia for its invasion of Ukraine, have not imposed 0:10:12.280 --> 0:10:16.280 sanctions on it because Putin is very carefully cultivated relations 0:10:16.320 --> 0:10:20.200 with these non Western countries, um and that's really paying 0:10:20.200 --> 0:10:22.720 off for him. And that's why, you know, when we 0:10:22.760 --> 0:10:25.080 look at this, President Biden said at the beginning of 0:10:25.080 --> 0:10:29.040 the wars will be a Pooria. It's a Polia in 0:10:29.120 --> 0:10:31.200 the West, but it's not a prior in the rest 0:10:31.240 --> 0:10:34.520 of the world. Angela really appreciate your time. That is 0:10:34.600 --> 0:10:38.480 Angela stant She is senior fellow at the Brookings Institution, 0:10:38.800 --> 0:10:41.199 and as she said, she's the author of Putin's World, 0:10:41.640 --> 0:10:45.520 Russia's Russia against the West end with the rest. Really 0:10:45.520 --> 0:10:50.480 appreciate your time. As we watch President Vladimir Zelinsky's trip 0:10:50.679 --> 0:10:55.760 to the US, this is Bloomberg Business Week. These sees 0:10:55.840 --> 0:11:00.280 Bloomberg Business Week with Carol Masser and Tim stinebec on 0:11:00.440 --> 0:11:04.400 Bloomberg Radio. We were just talking about President Biden's meeting 0:11:04.440 --> 0:11:08.560 with President Zelinski. Later today, Attorney General Merrick Garland will 0:11:08.679 --> 0:11:12.120 join a meeting with the two. According to Bloomberg reporting, 0:11:12.280 --> 0:11:14.760 that's because the d J has played a key role 0:11:14.800 --> 0:11:18.960 in enforcing some of the sanctions against Russia, which leads 0:11:19.080 --> 0:11:21.720 nicely to one of the stories on the terminal today 0:11:21.880 --> 0:11:24.800 it's in the business Week magazine, the headline of which 0:11:24.920 --> 0:11:28.720 is Russia and Iran are building a trade route that 0:11:28.800 --> 0:11:32.600 defies those sanctions. Let's talk about it with Bloomberg business 0:11:32.600 --> 0:11:36.120 Week editor Joel Weber and business Week Global Economics editor 0:11:36.280 --> 0:11:40.200 Christina Lynde Blad. They joined us both now, and Joel, 0:11:40.360 --> 0:11:43.600 it's a big important story again as we watch what's 0:11:43.600 --> 0:11:47.079 happening in Washington, d C. With the Ukrainian president here 0:11:47.200 --> 0:11:50.959 on us. Doyle, Yeah, it seems like a pretty well 0:11:51.000 --> 0:11:53.559 time story and very much adjacent to sort of the 0:11:53.880 --> 0:11:58.800 bigger geopolitical tensions and and what this story um digs 0:11:58.840 --> 0:12:02.600 into was honestly like just it's a you gotta read 0:12:02.640 --> 0:12:05.240 this thing either on your phone or or in the 0:12:05.280 --> 0:12:09.200 magazine or online so that you can see what this 0:12:09.200 --> 0:12:12.720 this this trade corridor is starting to look like. And 0:12:13.120 --> 0:12:15.960 really what Russia and Iran are trying to do here 0:12:16.200 --> 0:12:21.640 is find a synergistic um relationship that can actually be 0:12:21.640 --> 0:12:25.520 behind the lines, UH so that things like ports that 0:12:25.679 --> 0:12:29.760 and that rely on other other UH partners can't be 0:12:30.160 --> 0:12:33.800 affected by sanctions. And so they've really come up with, UH, 0:12:33.920 --> 0:12:38.000 there's an existing infrastructure, but then they have very ambitious 0:12:38.080 --> 0:12:41.440 plans to expand. What that looks like, Christina, how ambitious 0:12:41.440 --> 0:12:44.199 and what do they need to accomplish? Well, they are 0:12:44.240 --> 0:12:48.120 planning to invest about twenty five billion dollars and that 0:12:48.320 --> 0:12:52.800 is in widening and upgrading some part, like you said, 0:12:52.840 --> 0:12:57.240 some parts of existing infrastructure, like the Sea of Azov, 0:12:57.400 --> 0:13:00.280 which is the distinction of being the shallowest in the 0:13:00.320 --> 0:13:03.520 world that needs to be dredged in parts. Uh, there's 0:13:03.559 --> 0:13:07.319 a canal linking the Don and the Volga rivers um 0:13:07.520 --> 0:13:10.720 also very narrow in parts and has sort of traffic 0:13:10.800 --> 0:13:16.000 jams there. We're seeing Iranian ships um beginning to move 0:13:16.120 --> 0:13:18.959 through these waterways. So what they're creating basically is this 0:13:19.160 --> 0:13:24.040 internal I'm inland corridor rather which UM where it's more 0:13:24.120 --> 0:13:27.800 difficult to scrutinize what kind of cargo is going through 0:13:29.000 --> 0:13:33.760 and where where does the trade currently begin and where's 0:13:33.840 --> 0:13:38.520 the ideal endpoint currently And then also in their in 0:13:38.520 --> 0:13:41.240 their plans right so right now this the CEO as 0:13:41.280 --> 0:13:43.560 of which is right north of the Black Sea. Most 0:13:43.559 --> 0:13:46.720 people don't even I think you know, probably didn't do 0:13:46.760 --> 0:13:49.880 it in geography and high school. UM. And then the 0:13:50.000 --> 0:13:53.360 terminus would be on the Indian Ocean because India is 0:13:53.400 --> 0:13:57.160 a key part of also what while not making huge 0:13:57.160 --> 0:13:59.720 investments compared to other partners, it is that it is 0:14:00.040 --> 0:14:04.520 part of this um of this corridor because already we're 0:14:04.559 --> 0:14:07.920 seeing UM. For example, Russia was a shipment of Russian 0:14:07.960 --> 0:14:11.600 grain that transited through Iran on its way to India 0:14:11.640 --> 0:14:17.520 this year, and how busy is it currently. UM. We 0:14:17.679 --> 0:14:22.320 analyzed I'm sorry about the noise. We analyzed UM some 0:14:22.440 --> 0:14:26.800 data on ship movements and we saw we were able 0:14:26.840 --> 0:14:32.040 to track a couple of dozen ships from Iran and 0:14:32.040 --> 0:14:35.160 and Russia that are already using the waterway. Some of 0:14:35.160 --> 0:14:39.720 those vessels are sanctioned, but there is in complete data. 0:14:39.760 --> 0:14:43.680 So but that's what we were able to establish. You know, Christina, 0:14:43.760 --> 0:14:47.320 when I think of both Iran and Russia and their 0:14:47.400 --> 0:14:49.240 trade with the rest of the world, all I can 0:14:49.240 --> 0:14:52.080 think about is is oil and energy. So I'm curious, 0:14:52.160 --> 0:14:55.400 what will these two nations be trading back and forth. 0:14:55.440 --> 0:14:58.280 I assume it's not a big oil relationship. What are 0:14:58.320 --> 0:15:01.280 some of the items that will be going pores? Well, 0:15:01.280 --> 0:15:04.000 you're right, great on oil products was the foundation of 0:15:04.040 --> 0:15:07.480 the existing trade. But they've signed a bunch of deals 0:15:07.480 --> 0:15:11.080 this year and they're trying to expand you know two 0:15:11.160 --> 0:15:16.360 into like polymers, medical supply, auto parts. So we saw 0:15:16.440 --> 0:15:19.920 for example already that trade in the first eight months 0:15:19.920 --> 0:15:23.520 of the year doubled between Russia and Iran, and there 0:15:23.560 --> 0:15:28.160 are forecasts from Russian sources saying it could go to 0:15:28.200 --> 0:15:30.640 as high as forty billion dollars a year if the 0:15:30.720 --> 0:15:35.280 two countries wrap up a free trade agreement. And so Christina, 0:15:35.320 --> 0:15:38.120 if the aim here is or one of the aims 0:15:38.200 --> 0:15:42.120 is to build sort of a sanctioned proof trade route, 0:15:42.200 --> 0:15:44.680 what has the response been from around the world. What 0:15:44.840 --> 0:15:48.400 is the US, for example, how to say about this. Well, 0:15:48.440 --> 0:15:53.480 the US UM envoys, um U s officials rather are 0:15:53.520 --> 0:15:56.960 already very concerned that some of the trade going through 0:15:57.040 --> 0:16:01.480 right now is arms from Iran traveling to Russia, and 0:16:01.680 --> 0:16:05.840 they're basically putting the world on notice that you know 0:16:06.520 --> 0:16:10.000 that um they want to crack down on that kind 0:16:10.080 --> 0:16:14.040 of commerce, and also that other countries that that sort 0:16:14.080 --> 0:16:18.520 of aid in this effort, in this larger effort, you know, 0:16:18.640 --> 0:16:22.400 will also be sanctioned. So that could be a concern 0:16:22.560 --> 0:16:25.240 for countries like India if they want to participate in 0:16:25.280 --> 0:16:29.240 this corridor. Okay, So that that speaks to you know, 0:16:29.360 --> 0:16:33.840 how the US and and uh its allies could actually 0:16:34.000 --> 0:16:36.960 try and pinch this. What what options do they have 0:16:37.040 --> 0:16:41.320 to exert influence and try and uh you know, dial 0:16:41.400 --> 0:16:46.880 down what's possible here to exert influence with the other 0:16:47.000 --> 0:16:49.880 with others, like with allies, to make sure that the 0:16:49.960 --> 0:16:53.520 corridor is you know, trafficked, not as much as the 0:16:53.640 --> 0:16:56.680 Uranians and Russians would like. Well, I mean, like I said, 0:16:56.680 --> 0:16:59.160 if they I mean, if they could they could say, 0:16:59.160 --> 0:17:02.640 if they would say action for example Indian buyers of 0:17:02.800 --> 0:17:05.800 Russian wheat that was going through the corridor, that's I mean, 0:17:05.880 --> 0:17:09.359 they haven't spoken exactly with that kind of detail, but 0:17:09.400 --> 0:17:13.440 they basically said, you know, you know, if we find 0:17:13.480 --> 0:17:17.640 that countries are trading with these nations, we will they 0:17:17.640 --> 0:17:21.240 will be targets of sanctions to I mean. The difficulty 0:17:21.359 --> 0:17:25.679 is that it's much harder to track, um, you know, 0:17:25.800 --> 0:17:29.520 cargoes going through this inland corridor than it would be 0:17:29.640 --> 0:17:33.880 in the open sea. Um. For one thing, the vessels 0:17:34.119 --> 0:17:38.720 are generally smaller because you know, these waters aren't as deep, 0:17:38.840 --> 0:17:41.280 so there's going to be more, you know, more traffic 0:17:41.320 --> 0:17:44.959 to get the same amount of goods across. I mean, 0:17:45.480 --> 0:17:48.560 I'm gonna ask that about Christina about the ships involved 0:17:48.600 --> 0:17:52.159 in this um you know, presumably these are just Iranian 0:17:52.440 --> 0:17:54.920 and Russian ships there are they sort of cutting out 0:17:54.920 --> 0:17:58.120 the global shipping industry more or less. That's I mean, 0:17:58.160 --> 0:18:00.760 from what we've been able to gather. Yet that's mostly 0:18:01.840 --> 0:18:04.720 what they are because you know, ships need. For example, 0:18:05.280 --> 0:18:08.480 Russia has been working uh and you know, to give 0:18:08.560 --> 0:18:12.080 Iranian ships, you know, right of passage through its rivers 0:18:12.080 --> 0:18:15.760 and canals. So so you know, Russia control some of 0:18:15.800 --> 0:18:19.520 these waterways, so not any country can go through and 0:18:19.560 --> 0:18:23.040 talk about India role here. Sorry to cut you off, Shoal, 0:18:23.160 --> 0:18:25.560 but when we think about this route that's being built 0:18:25.560 --> 0:18:28.960 between Russia and Iran, how does India factor in? Well, 0:18:29.000 --> 0:18:33.400 India has made an investment in an Iranian port um, 0:18:33.600 --> 0:18:36.800 but it pre dates it's been you know, the work 0:18:36.880 --> 0:18:40.320 there has been lagging for many years, so um, it 0:18:40.400 --> 0:18:43.679 wasn't done. I don't think with any kind of larger 0:18:43.760 --> 0:18:46.359 vision of what was going to happen in terms of 0:18:46.359 --> 0:18:48.960 how these two countries were going to try to you know, 0:18:49.080 --> 0:18:51.640 turn so much towards you know, rushing around towards each 0:18:51.680 --> 0:18:55.439 other and try to accelerate plans for building this route. 0:18:55.680 --> 0:18:58.600 But generally there has been an effort underway for at 0:18:58.640 --> 0:19:02.040 least a decade to sort of together countries in Eurasia 0:19:02.160 --> 0:19:05.280 closer together, and so India was going to be part 0:19:05.359 --> 0:19:10.400 of that in some form. I wonder actually the evolution 0:19:10.440 --> 0:19:15.280 of the brick relationships to write like if you if 0:19:15.320 --> 0:19:18.680 you can reach uh Asia a little bit here, maybe 0:19:18.720 --> 0:19:22.040 even South Africa through this these terminus, you start to 0:19:22.040 --> 0:19:24.600 actually see that this could be I mean this this 0:19:24.680 --> 0:19:27.120 is kind of the US nightmare. I think actually, like 0:19:27.160 --> 0:19:30.320 if they can actually stitch together a trade corridor that's 0:19:30.320 --> 0:19:32.960 sort of behind the namy lines, like you really you 0:19:33.000 --> 0:19:34.960 might not be able to touch it that effectively, right, 0:19:35.119 --> 0:19:37.679 That's right, that's right. I mean it also shows I mean, 0:19:37.720 --> 0:19:40.159 I think one of the things we've been tracking all years, 0:19:40.320 --> 0:19:43.960 it's just to to look at how supply lines, you know, 0:19:44.000 --> 0:19:47.600 I mean, rather supply chains are changing as a result 0:19:47.640 --> 0:19:50.960 of geopolitics. You know. So we've seen a bit through 0:19:51.119 --> 0:19:55.160 you know, near shoring and so called French shoring. But this, 0:19:55.160 --> 0:19:57.679 this to me actually was a story that I hadn't 0:19:57.720 --> 0:20:02.320 heard that much about, so I was very did all right, 0:20:02.400 --> 0:20:06.520 it's a great story from Bloomberg Business Week, that is 0:20:06.640 --> 0:20:10.639 Russia and Iran are building a trade route that defies sanctions. 0:20:10.680 --> 0:20:14.480 Those nations investing upwards of twenty billion dollars to ease 0:20:14.520 --> 0:20:18.679 the passage of goods along those waterways and those railways. 0:20:18.800 --> 0:20:24.200 A very timely conversation again as our Ukrainian President Vlodomir 0:20:24.359 --> 0:20:28.480 Zelinsky visits US soil for the first time, first trip 0:20:28.520 --> 0:20:32.160 outside the country since that war started over three hundred 0:20:32.440 --> 0:20:35.320 days ago. Thank you to Bloomberg business Week editor Joel 0:20:35.359 --> 0:20:39.720 Weber and Business Week Global Economics Editor Christina Lynn Blad. 0:20:40.119 --> 0:20:43.399 You're listening to Bloomberg Business Week with Carol Messier and 0:20:43.480 --> 0:20:47.520 Tim Stenebeck on Bloomberg Radio. Well. One of the defining 0:20:47.600 --> 0:20:52.280 features of the economy in two, other than super hot inflation, 0:20:52.600 --> 0:20:55.560 it's been a super strong labor market. The unemployment rate 0:20:55.600 --> 0:20:59.960 came in at three point seven percent in November. Let's 0:21:00.000 --> 0:21:02.760 talk about what the next year holds with Julia Poll 0:21:02.800 --> 0:21:06.359 Actually is cheap economist over at ZIP recruiter. She joins 0:21:06.440 --> 0:21:09.760 us now on zoom from Los Angeles. Julia, It's great 0:21:09.760 --> 0:21:12.720 to get some time with you as we wrap up two. 0:21:12.840 --> 0:21:15.840 Let's talk about the labor market. In three. Do we 0:21:15.920 --> 0:21:19.440 get above four percent inflation or are we gonna stay 0:21:19.480 --> 0:21:24.440 resilient here. Unemployment, I mean unemployment. It's been a long year. 0:21:25.280 --> 0:21:31.480 The FED is predicting four points six unemployment in four 0:21:31.920 --> 0:21:34.119 but it's somewhat hard to see how that will happen 0:21:34.200 --> 0:21:37.520 given the strength of the US consumer right now. We're 0:21:37.560 --> 0:21:41.679 still seeing consumers with with plenty of runway left, with 0:21:41.840 --> 0:21:44.840 very low debt service payments as a share of disposal income, 0:21:45.359 --> 0:21:49.199 and with very low delinquencies. And here's the most important 0:21:49.240 --> 0:21:51.160 thing that's going to happen in the next year. Workers 0:21:51.160 --> 0:21:53.440 are going to see a real wage increase, and that's 0:21:53.480 --> 0:21:56.399 because inflation is coming down more quickly than wage growth, 0:21:56.720 --> 0:22:00.560 and so actually their purchasing power could expand, and I 0:22:00.600 --> 0:22:05.879 think that will fuel strong, UH sustained, robust employment growth 0:22:06.080 --> 0:22:10.600 despite some of the predictions. Well, Julia, clearly I have 0:22:10.840 --> 0:22:13.919 inflation on my mind. So let's talk about that a 0:22:14.000 --> 0:22:17.320 little bit. Sort of the link between inflation and what 0:22:17.359 --> 0:22:21.600 we're seeing in the labor market wrapped those two together, 0:22:21.680 --> 0:22:24.600 are there is what does that relationship look like in 0:22:24.640 --> 0:22:29.200 this moment? Does one depend on the other. So the 0:22:29.240 --> 0:22:33.160 imbalances in the labor market are a key contributing factor 0:22:33.240 --> 0:22:35.840 to inflation, and they are a reason that we have 0:22:36.040 --> 0:22:41.720 seen UH inflation spread across the goods in the CPI basket, 0:22:42.080 --> 0:22:46.800 UH move out of energy and and food and areas 0:22:46.840 --> 0:22:50.000 like that where supply chain issues were to blame initially 0:22:50.440 --> 0:22:53.919 UH and into core services now. But what we know 0:22:54.040 --> 0:22:57.480 is that that the FEDS actions are taking effect. We 0:22:57.520 --> 0:23:02.360 can see inflation coming down now UH and UM real 0:23:02.359 --> 0:23:05.399 time sort of market rents, for example, real time private 0:23:05.400 --> 0:23:10.040 sector data suggests that there's more cooling ahead. We also 0:23:10.080 --> 0:23:12.359 know that when inflation comes down, it doesn't mean that 0:23:12.400 --> 0:23:14.800 wage growth comes down right away either. They have actually 0:23:14.800 --> 0:23:17.959 been pretty long periods in history of real wage growth 0:23:18.600 --> 0:23:22.879 because wages are much stickier than than than prices of 0:23:22.960 --> 0:23:26.080 goods and services. And so what we could see this 0:23:26.160 --> 0:23:31.680 year is that after seeing their purchasing power erode in two, 0:23:31.880 --> 0:23:35.600 workers could now actually finally get a real wage increase 0:23:35.920 --> 0:23:39.520 as they have been doing over the past five months. Actually, 0:23:39.600 --> 0:23:42.800 I'm wondering how you think we got to this situation 0:23:42.920 --> 0:23:45.800 we're in now, with the imbalances you're you're talking about. 0:23:45.840 --> 0:23:49.160 You know, the Jolts Job Survey job opening survey still 0:23:49.160 --> 0:23:52.720 shows something like ten million job openings in the US, 0:23:52.800 --> 0:23:56.120 you know, way off the charts compared to pre COVID. 0:23:56.400 --> 0:24:00.760