Speaker 1: We begin today's meditation with a few sipping exercises to
Speaker 1: remind it the little treat can go a long way.
Speaker 1: So pick up your McCafe iced coffees, close your eyes,
Speaker 1: and deep sipping and deep satisfaction out take a street
Speaker 1: retreat at McDonald's right now, getting mccaffee iced coffee in
Speaker 1: any size and any flavor for just ninety nine cents
Speaker 1: until eleven a m price of participation. Maysberry. I hope
Speaker 1: you happy the horn running, Michael, because we're in a
Speaker 1: trade war with fun. It's a trade war, Sturry midnight.
Speaker 1: We're in a trade war. Oh boy, slightly forward to
Speaker 1: the west. Are you auditional news? Welcome to the show.
Speaker 1: Glad you're here. This is a real pleasure to welcome.
Speaker 1: Meredith Sumter. Whoops, my screen just went black. Artist who
Speaker 1: is the head of research, strategy and operations for the
Speaker 1: Eurasia Group. We frequently talked to Mystery and Bremer, who
Speaker 1: had up that fine out fit. Meredith, how are you? Oh,
Speaker 1: I'm well, thanks for having me on. Is he and
Speaker 1: technically your boss? Yes? He certainly isn't. He's a great
Speaker 1: boss to have sounds now, are you just saying that
Speaker 1: or wink. If you need Jack and Joe, you guys
Speaker 1: have had him on the show. You know how much
Speaker 1: funny is and what what dynamic content we get to
Speaker 1: work with which has an impact on everyday lives here
Speaker 1: in America. So it's just a real pleasure to be
Speaker 1: speaking with you and to be part of this part
Speaker 1: of this roder discussion. Well cool. One of the things
Speaker 1: that makes us crazy is just the breathless um coverage
Speaker 1: of the current trade negotiations with China. And it's all
Speaker 1: about Trump and the rest of it, But to us,
Speaker 1: it's really interesting what both countries are trying to achieve
Speaker 1: in their strategies. Um, can you just give us a
Speaker 1: brief description of why the US and the Trump administration
Speaker 1: is going to the wall over trade issues with China? Well,
Speaker 1: a great question. But first point is this is really
Speaker 1: not about trade and it's really not about tariffs. This
Speaker 1: is about which economic model sort of the U s
Speaker 1: led liberal market economy that we all know and love
Speaker 1: here or China's state directed economic model is going to
Speaker 1: be the leading economic force for the century. But those
Speaker 1: are pretty high stakes. Yeah, they are very high stakes,
Speaker 1: which is why you see that the kind of backing
Speaker 1: up to the wall pressure that President Trump is putting
Speaker 1: on here. Look, he was elected on a platform of
Speaker 1: revitalizing US industry, and when it comes down to that,
Speaker 1: what he's trying to force China to do is to
Speaker 1: play by the same rules that every other major developed
Speaker 1: economy or our market driven economy plays by. And it
Speaker 1: wasn't that big of a deal when you know, twenty
Speaker 1: years ago, when China was relatively of a lower level
Speaker 1: economic power and was not directly competing with US companies
Speaker 1: and US industry leaders. China now is in some of
Speaker 1: these strategic sectors of the future. Actually, China is making
Speaker 1: more investments than we are here at home and is
Speaker 1: aiming to be a leading driving force and some of
Speaker 1: these strategic growth drivers of the future. So US is
Speaker 1: watching this and saying, hey, if you're going to try
Speaker 1: to lead, that's fine, but you've got to fairly compete.
Speaker 1: You can't get where you are by doing things like
Speaker 1: you know, unfair market access rules, force technology transfer funding
Speaker 1: ways to take I P and then build off of
Speaker 1: that without actually having to do the research and development
Speaker 1: to make it yours. So that's what this is really about.
Speaker 1: The President is using the threat of tariff and actually
Speaker 1: using tariffs to try to force China and to force
Speaker 1: Chinese President Fijian King to change these structural rules by
Speaker 1: which China's economy currently functions. And that's the key point here.
Speaker 1: So that's an enormous task for a totalitarian, you know,
Speaker 1: semi communist regime. Uh, kind of cap lest communist hybrid Uh.
Speaker 1: Is it even possible to get halfway there on some
Speaker 1: of these giant issues like um, stop stealing our patents
Speaker 1: and quick demanding all of our I T and all
Speaker 1: of our R and d um or is it all
Speaker 1: or nothing? It's certainly worth an effort to try to
Speaker 1: put as much effort as possible on China to reform
Speaker 1: the way that it functions. And the way that that
Speaker 1: the White House has been trying to do this is
Speaker 1: say like, look, these kinds of market based reforms are
Speaker 1: not only good for us and for all the other
Speaker 1: economies they're trying to fairly compete, but they're also necessary
Speaker 1: for China to really develop and transform your own economy.
Speaker 1: So they've been phrasing these reform concessions in a way
Speaker 1: that would make sense for China's own domestic comparative need
Speaker 1: for reform, but that you've really touched on the key
Speaker 1: problem here, which is that in order to function like
Speaker 1: in market based economy, the political center has to let
Speaker 1: go of control of the economy. And there's no sign
Speaker 1: that Beijing under Stegent Ping especially is prepared to do that.
Speaker 1: So on one hand, you can force as much pressure
Speaker 1: as possible to see how far you can get to
Speaker 1: push China to make baseline structure reforms. They are going
Speaker 1: to be good for US companies, good for US industry,
Speaker 1: good for fair competition. But at some point you're gonna
Speaker 1: you're gonna hit that wall. And that's the key question
Speaker 1: is how do you shift your strategy when the tariff
Speaker 1: pressure is not getting you the full response that you
Speaker 1: need to protect US industry and to protect onward growth
Speaker 1: prospects with the US economy. H I've got a question
Speaker 1: about that, But first, um, I forgot my question. Maybe
Speaker 1: I'll go with mother questions. Meredith Sumter of the Eurasia
Speaker 1: Group is on the line, Oh, to what extent is
Speaker 1: this our last best chance to put this kind of
Speaker 1: pressure on China? Do we have to do it when
Speaker 1: we've got a president who just doesn't care and have
Speaker 1: a strong economy. Well, certainly, both the the unorthodox approach
Speaker 1: of President Trump and the US economy remaining resilient are
Speaker 1: you know, the two most important factors as to why
Speaker 1: the US is taking this position now. But there's there's
Speaker 1: more to this as well. Uh, looking at how are
Speaker 1: we going to A couple of things need to happen. One, Yes,
Speaker 1: you need to put pressure on China, and you've got
Speaker 1: to find the most viable way to do that. So
Speaker 1: we're gonna try this with tariffs. And the President has
Speaker 1: already hinted that if this level of economic pain with
Speaker 1: tariffs is not enough to push China, he's prepared to
Speaker 1: issue even additional tariffs on Chinese goods. What you need
Speaker 1: to watch here is which economy is going to be
Speaker 1: the most resilient and in taking on this kind of
Speaker 1: economic pressure, because the moment that one or the other
Speaker 1: economies begins to weaken, that also weakens the negotiating hand.
Speaker 1: And both sides know that. Well, yeah, I hate to
Speaker 1: interrupt you, but I just was ocurred to me that
Speaker 1: we So you've got two things going on there. On
Speaker 1: on one hand, you've got the incredibly strong economy of
Speaker 1: the United States. On the other, hand, You've got our
Speaker 1: clitical process where when there starts to be pain, there's
Speaker 1: gonna be a lot of pressure on a lot of
Speaker 1: politicians to say some really scary things to try to
Speaker 1: get trumped back down. Is their political pressure in China
Speaker 1: too of that sort? There is political pressure in China,
Speaker 1: but not of the sort that we have here in
Speaker 1: our own democratic country. So that the political pressure in
Speaker 1: China is to ensure that China does what it needs
Speaker 1: to do so that more Chinese are able to see
Speaker 1: their livelihoods continue to develop an increase as as as
Speaker 1: it has. She didn't actually believed that he's in the
Speaker 1: stronger position because he doesn't have the same kinds of
Speaker 1: political democratic pressures that Trump has here account president for life. Yeah,
Speaker 1: but I've heard that they're they're critically interested in saving
Speaker 1: face and not being seen as being strong armed by
Speaker 1: the US. Is that true? That is true, And that's
Speaker 1: why we see it as highly unlikely that despite the
Speaker 1: elevation of tariff overnight that Chinese Vice Premier Leal Hood,
Speaker 1: who's the chief negotiator here in Washington right now, we
Speaker 1: see it highly unlikely that China is going to agree
Speaker 1: to the concessions that Washington wants. We're almost out of time.
Speaker 1: I get two quick questions, who blinks first? And what day?
Speaker 1: Please tell us that who blinks first, Jack and Joe
Speaker 1: depends upon which economy is going to blink first, So
Speaker 1: watch that very closely. Point two is in order to
Speaker 1: really be successful in the long term, the US needs
Speaker 1: to do more than put pressure on China and work
Speaker 1: with like minded allies to do so. We need to
Speaker 1: really invest here at home, to double down on investments
Speaker 1: and scaling up our workforce across the country. Love doing
Speaker 1: the basic R and D in our industry so we
Speaker 1: can compete with China and outcompete China. Meredith Sumter, Meredith,
Speaker 1: I'm so sorry to jump in. We're up against a heartbreak.
Speaker 1: Meredith Sumter, head of Research, Strategy Operations your Asia Group.
Speaker 1: A pleasure. Thank you, really great. I'm really great. Thank you.
Speaker 1: That's the best conversation I've heard on that yet. Marshall's
Speaker 1: got his news coming up, but I know more about
Speaker 1: it than I did before the whole China trade thing.
Speaker 1: Who's going to blink win? That's the shan for all
Speaker 1: your foodies out there. I'm unwrapping a McDonald's steak, egg
Speaker 1: and cheese bagel. Look at this steak and the juice
Speaker 1: running down the side. Get a little bit on a
Speaker 1: wrapper here M. And then the fluffy egg and real
Speaker 1: cheese floted over the side looking just so good. M M.
Speaker 1: Grilled onions and a butt of bagel too. Thumbs up
Speaker 1: a McDonald steak, egg and chaves bagel for breakfast. Love it,
Speaker 1: M bomp up. I participate in McDonald's