1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:14,240 --> 00:00:18,520 Speaker 2: Iran is on Edge. Deadly protests erupted last month when 3 00:00:18,560 --> 00:00:23,520 Speaker 2: Iran's currency collapsed and prices soared, fueling public anger. The 4 00:00:23,560 --> 00:00:28,120 Speaker 2: governments responded with mass arrests, internet blackouts, and lethal force 5 00:00:28,280 --> 00:00:29,880 Speaker 2: to clamp down on public dissenters. 6 00:00:29,960 --> 00:00:33,400 Speaker 3: The death toll has now spiked to nearly two thousand 7 00:00:33,479 --> 00:00:36,320 Speaker 3: people killed in the crackdown. The scale is really hard 8 00:00:36,360 --> 00:00:39,080 Speaker 3: to judge from the outside, particularly in light of these 9 00:00:39,120 --> 00:00:40,280 Speaker 3: Internet blackouts. 10 00:00:40,840 --> 00:00:44,199 Speaker 2: As the protests continued to simmer and the death toll mounts, 11 00:00:44,680 --> 00:00:48,120 Speaker 2: US President Donald Trump has said more violence could trigger 12 00:00:48,159 --> 00:00:51,360 Speaker 2: the US to take military action. The military is looking 13 00:00:51,440 --> 00:00:55,920 Speaker 2: at it, and we're looking at some very strong options. 14 00:00:55,960 --> 00:00:57,200 Speaker 1: We'll make a determination. 15 00:00:57,520 --> 00:01:00,000 Speaker 2: President Trump says he has canceled talks with the Radiant 16 00:01:00,080 --> 00:01:04,520 Speaker 2: officials amid a protest crackdown, telling Iranian citizens quote, help 17 00:01:04,640 --> 00:01:10,319 Speaker 2: is on its way. One determination he's already made, threatening 18 00:01:10,319 --> 00:01:13,399 Speaker 2: to slap a twenty five percent tariff on any country 19 00:01:13,680 --> 00:01:17,559 Speaker 2: that's doing business with Iran. He made the surprise tariff 20 00:01:17,560 --> 00:01:21,520 Speaker 2: announcement on True Social on Monday. Though Trump didn't specify 21 00:01:21,800 --> 00:01:24,440 Speaker 2: who would be targeted, it was clear straight away that 22 00:01:24,560 --> 00:01:28,240 Speaker 2: two of Asia's largest economies would be firmly in the crosshairs. 23 00:01:28,680 --> 00:01:32,760 Speaker 3: China is by far and away the biggest purchaser of 24 00:01:33,000 --> 00:01:36,880 Speaker 3: Iranian oil. It buys about ninety percent of Iran's oil, 25 00:01:37,120 --> 00:01:42,119 Speaker 3: and India maybe buys about a tenth of what China 26 00:01:42,160 --> 00:01:43,640 Speaker 3: does in terms of total goods. 27 00:01:43,840 --> 00:01:47,440 Speaker 2: That's Daniel ten Kate, Bloomberg's executive editor of Government and 28 00:01:47,520 --> 00:01:49,160 Speaker 2: Economics in Asia. 29 00:01:49,320 --> 00:01:51,920 Speaker 3: Trump could go in and say it's twenty five percent. 30 00:01:52,520 --> 00:01:55,400 Speaker 3: There's all sorts of questions about what it means. But 31 00:01:55,800 --> 00:01:58,920 Speaker 3: if it is twenty five percent on top of current rates, 32 00:01:59,440 --> 00:02:03,120 Speaker 3: then you looking at blowing up the truth with China 33 00:02:03,240 --> 00:02:08,640 Speaker 3: and also really setting back even further US relations with India, 34 00:02:08,840 --> 00:02:17,320 Speaker 3: just as Trump says, their important strategically. 35 00:02:17,440 --> 00:02:20,960 Speaker 2: This is the Big Take Asia from Bloomberg News. I'm Wanha. 36 00:02:21,400 --> 00:02:23,720 Speaker 2: Every week we take you inside some of the world's 37 00:02:23,720 --> 00:02:27,840 Speaker 2: biggest and most powerful economies and the markets, tycoons and 38 00:02:27,960 --> 00:02:32,400 Speaker 2: businesses that drive this ever shifting region. Today on the show, 39 00:02:32,639 --> 00:02:36,840 Speaker 2: Trump's response to violence in Iran is another round of tariffs. 40 00:02:37,360 --> 00:02:40,320 Speaker 2: What that means for two of Iran's top trading partners 41 00:02:40,360 --> 00:02:42,640 Speaker 2: in Asia and how it could tip the balance of 42 00:02:42,720 --> 00:02:51,639 Speaker 2: power around the world dan. This latest news began, as 43 00:02:51,680 --> 00:02:54,520 Speaker 2: it often does, with President Trump posting on true social 44 00:02:55,000 --> 00:02:59,120 Speaker 2: on Monday. The President issued an ultimatum countries doing business 45 00:02:59,120 --> 00:03:01,799 Speaker 2: with Iran risks paying twenty five percent tariffs on all 46 00:03:01,840 --> 00:03:05,720 Speaker 2: goods sent to the US. Radley speaking, what does that entail? 47 00:03:06,000 --> 00:03:08,799 Speaker 2: Who would that affect? You know which countries it would be? Hit? 48 00:03:08,840 --> 00:03:09,480 Speaker 2: The hert ist there. 49 00:03:09,919 --> 00:03:13,200 Speaker 3: This is sort of a classic trup tariff threat if 50 00:03:13,240 --> 00:03:18,040 Speaker 3: that's something we can use now, But it's like, take 51 00:03:18,160 --> 00:03:22,080 Speaker 3: something very vague, kind of a bold round number, like 52 00:03:22,160 --> 00:03:25,560 Speaker 3: twenty five percent. You know, he's used one hundred percent before. 53 00:03:26,200 --> 00:03:29,600 Speaker 3: He's threatened the bricks countries. He's threatened them for very 54 00:03:29,639 --> 00:03:32,160 Speaker 3: vague things, and nobody really knows what that means. 55 00:03:32,200 --> 00:03:34,720 Speaker 1: Doing business could mean a lot of different things. 56 00:03:34,720 --> 00:03:36,960 Speaker 3: So it's almost any country that has any sort of 57 00:03:37,520 --> 00:03:41,800 Speaker 3: economic relationship would be at risk. When you look at 58 00:03:42,000 --> 00:03:50,440 Speaker 3: trading partners, China, the UAE, Turkey, Iraq, the EU, India, Pakistan, Russia, Afghanistan, Oman, 59 00:03:50,520 --> 00:03:54,680 Speaker 3: those are the top ten trading partners according to official data. 60 00:03:54,760 --> 00:03:57,320 Speaker 3: So the big question with all these threats is how 61 00:03:57,320 --> 00:04:00,560 Speaker 3: they're actually implemented, and we have not seen that yet. 62 00:04:00,560 --> 00:04:03,600 Speaker 3: We're still waiting for the actual paper to come where 63 00:04:03,640 --> 00:04:06,360 Speaker 3: they put this in writing and they tell importers and 64 00:04:06,360 --> 00:04:09,120 Speaker 3: exporters exactly what the tariff rate is going to be 65 00:04:09,200 --> 00:04:10,480 Speaker 3: on whichever country. 66 00:04:10,800 --> 00:04:13,560 Speaker 2: None of this is happening in a vacuum. It seems 67 00:04:13,600 --> 00:04:16,200 Speaker 2: that Trump is trying to do this to isolate Iran 68 00:04:16,400 --> 00:04:20,560 Speaker 2: and force regime change. Possibly, if that's the case, is 69 00:04:20,720 --> 00:04:24,000 Speaker 2: using tariffs as an economic weapon to do it the 70 00:04:24,040 --> 00:04:24,960 Speaker 2: most effective way? 71 00:04:25,560 --> 00:04:27,680 Speaker 3: Well, that remains to be seen. I mean, I think 72 00:04:27,839 --> 00:04:31,919 Speaker 3: tariffs are Trump's financial weapon of choice, I guess, is 73 00:04:32,279 --> 00:04:35,360 Speaker 3: one way to put it. He's fresh off a big 74 00:04:35,600 --> 00:04:40,080 Speaker 3: victory in Venezuela. There's a lot of calls, particularly in 75 00:04:40,480 --> 00:04:43,800 Speaker 3: the US right now, saying that Trump is on this 76 00:04:44,200 --> 00:04:47,640 Speaker 3: march for freedom around the world. He's changing the geopolitical map. 77 00:04:48,120 --> 00:04:51,440 Speaker 3: He's gotten rid of one dictator in Venezuela. 78 00:04:51,960 --> 00:04:53,159 Speaker 1: Cuba might be next. 79 00:04:53,320 --> 00:04:57,480 Speaker 3: You have protests in Iran, why not try and nudge 80 00:04:57,720 --> 00:05:01,000 Speaker 3: the regime out if you can, and add to Trump's 81 00:05:01,120 --> 00:05:06,360 Speaker 3: sort of history making legacy, defining march for freedom here 82 00:05:06,400 --> 00:05:09,200 Speaker 3: that they see going on globally. It's a lot more 83 00:05:09,200 --> 00:05:13,200 Speaker 3: complicated than that. Obviously, you can threaten tariffs all you want, 84 00:05:13,839 --> 00:05:17,960 Speaker 3: but right now, heading into the midterms, the big issue 85 00:05:17,960 --> 00:05:21,640 Speaker 3: in the United States is still affordability, and that's where 86 00:05:21,640 --> 00:05:24,840 Speaker 3: Trump is the most vulnerable politically. So if you start 87 00:05:24,920 --> 00:05:28,800 Speaker 3: raising tariffs again twenty five percent across the board on 88 00:05:28,880 --> 00:05:32,960 Speaker 3: countries that do business with Iran China in particular, you're 89 00:05:32,960 --> 00:05:36,800 Speaker 3: looking at probably higher costs that will be born out 90 00:05:36,920 --> 00:05:40,200 Speaker 3: by US consumers and potential voters in the midterms. 91 00:05:42,760 --> 00:05:44,600 Speaker 2: And of course, on top of that, we're seeing that 92 00:05:44,640 --> 00:05:48,000 Speaker 2: Trump's broad tariffs on China and the world, and whether 93 00:05:48,040 --> 00:05:50,719 Speaker 2: he had the authority as president to impose them, are 94 00:05:50,800 --> 00:05:53,240 Speaker 2: now the subject of a lawsuit that the Supreme Court 95 00:05:53,400 --> 00:05:57,159 Speaker 2: could rule on in a matter of days. What rationale 96 00:05:57,200 --> 00:06:02,039 Speaker 2: could Trump use that would make these tariffs legal and 97 00:06:02,120 --> 00:06:03,120 Speaker 2: more likely to stick. 98 00:06:04,640 --> 00:06:06,240 Speaker 1: That's always a good question. 99 00:06:06,320 --> 00:06:11,000 Speaker 3: I mean, the Supreme Court is really ruling on whether 100 00:06:11,279 --> 00:06:15,520 Speaker 3: the tariffs are some sort of emergency and so if 101 00:06:15,560 --> 00:06:20,839 Speaker 3: they are ruled illegal, then that really limits the scope 102 00:06:20,880 --> 00:06:26,279 Speaker 3: that Trump can use to impose tariffs for emergency reasons. Traditionally, 103 00:06:26,320 --> 00:06:29,920 Speaker 3: you would have an investigation like a three oh one 104 00:06:29,960 --> 00:06:35,440 Speaker 3: investigation or some trade investigation that then author allows for 105 00:06:35,920 --> 00:06:38,480 Speaker 3: tariffs to be imposed. So we're seeing Trump take action 106 00:06:38,640 --> 00:06:43,719 Speaker 3: on that front with different investigations and to steal and 107 00:06:43,760 --> 00:06:47,000 Speaker 3: all sorts of overcapacity issues and things like that. And 108 00:06:47,040 --> 00:06:49,919 Speaker 3: these could be quite broad in how they're actually defined 109 00:06:49,960 --> 00:06:51,320 Speaker 3: at the end of the day, but they're on much 110 00:06:51,320 --> 00:06:55,000 Speaker 3: firmer legal footing than just issuing a bunch of tire 111 00:06:55,080 --> 00:06:59,000 Speaker 3: threats through executive order. So that does beg the question 112 00:06:59,040 --> 00:07:02,400 Speaker 3: of whether the falls into that category of whether he 113 00:07:02,440 --> 00:07:03,000 Speaker 3: can do that. 114 00:07:03,480 --> 00:07:05,280 Speaker 1: I think Trump is going to push the limits no 115 00:07:05,320 --> 00:07:05,680 Speaker 1: matter what. 116 00:07:05,839 --> 00:07:07,600 Speaker 3: He's not going to try and be bound by that, 117 00:07:07,720 --> 00:07:09,960 Speaker 3: and he's going to try and do this and then 118 00:07:10,040 --> 00:07:11,800 Speaker 3: just let it play out in the courts, which takes 119 00:07:11,840 --> 00:07:16,120 Speaker 3: a long time anyway. So whether the Supreme Court decision 120 00:07:16,200 --> 00:07:19,520 Speaker 3: will have any impact on what happens with these latest 121 00:07:19,560 --> 00:07:22,560 Speaker 3: terror threats on the part of Iran, I don't think 122 00:07:22,560 --> 00:07:24,200 Speaker 3: that will stop Trump from going ahead with it. 123 00:07:24,680 --> 00:07:28,400 Speaker 2: We here, of course, focus on Asia Pacific, but broadly speaking, 124 00:07:28,640 --> 00:07:32,000 Speaker 2: why is what's happening in Iran so significant for the 125 00:07:32,000 --> 00:07:34,120 Speaker 2: region that you and I cover every day. 126 00:07:34,520 --> 00:07:39,360 Speaker 3: It's impossible to look at this situation without looking at China, 127 00:07:39,400 --> 00:07:43,240 Speaker 3: And of course a lot of Asian countries are oil importers, 128 00:07:43,280 --> 00:07:46,240 Speaker 3: so anything that happens in the Middle East regarding the 129 00:07:46,240 --> 00:07:49,560 Speaker 3: price of oil is going to affect countries throughout Asia, 130 00:07:50,000 --> 00:07:54,200 Speaker 3: and China buys about ninety percent of Iran's oil, so 131 00:07:54,320 --> 00:07:57,480 Speaker 3: that's the key country to look at right now. India 132 00:07:57,960 --> 00:08:01,640 Speaker 3: maybe buys about a tenth of what China does in 133 00:08:01,720 --> 00:08:05,160 Speaker 3: terms of total goods. There are other goods at trade hands, 134 00:08:05,200 --> 00:08:10,480 Speaker 3: including electronics and things like that, but ultimately the relationship 135 00:08:10,880 --> 00:08:12,800 Speaker 3: hinges on oil. 136 00:08:12,400 --> 00:08:17,640 Speaker 2: And how important are those oil purchases to funding Iran 137 00:08:17,920 --> 00:08:18,400 Speaker 2: right now? 138 00:08:18,960 --> 00:08:22,400 Speaker 3: The oil purchases is certainly a big source of money 139 00:08:22,440 --> 00:08:25,520 Speaker 3: for the Iranian regime. So the US has done a 140 00:08:25,560 --> 00:08:28,400 Speaker 3: good job, I guess if you could call it that 141 00:08:28,760 --> 00:08:33,760 Speaker 3: in terms of preventing other countries from buying Iranian oil. 142 00:08:34,280 --> 00:08:35,800 Speaker 1: India's one of them. 143 00:08:35,760 --> 00:08:39,800 Speaker 3: Which stopped a lot of major purchases of that. So 144 00:08:40,720 --> 00:08:44,000 Speaker 3: the impact of US efforts and sanctions over the years 145 00:08:44,040 --> 00:08:48,079 Speaker 3: has been pretty effective in limiting who or which countries 146 00:08:48,360 --> 00:08:51,680 Speaker 3: Iran can sell to. And so that's why it's limited 147 00:08:51,720 --> 00:08:54,600 Speaker 3: to China, and a lot of that goes through a 148 00:08:54,800 --> 00:08:57,360 Speaker 3: so called dark fleet where it's not even on the 149 00:08:57,400 --> 00:09:00,960 Speaker 3: official books. So China is able to get around that 150 00:09:01,120 --> 00:09:05,599 Speaker 3: by having a lot of so called teapot refineries, refineries 151 00:09:05,640 --> 00:09:08,960 Speaker 3: with no real connections to the outside world, buying this 152 00:09:09,040 --> 00:09:12,280 Speaker 3: oil at a discount and processing it. And that's about 153 00:09:12,520 --> 00:09:16,160 Speaker 3: ten to fifteen percent of the oil that China imports altogether. 154 00:09:16,280 --> 00:09:19,439 Speaker 2: Right now, what have we heard from China and India 155 00:09:19,760 --> 00:09:20,080 Speaker 2: on this. 156 00:09:20,559 --> 00:09:23,880 Speaker 3: We have not heard too much. Of course, China always 157 00:09:23,920 --> 00:09:27,920 Speaker 3: expresses calls for stability. They don't like to interfere in 158 00:09:27,920 --> 00:09:32,240 Speaker 3: internal affairs of given countries, but they also don't want 159 00:09:32,720 --> 00:09:37,040 Speaker 3: third parties stepping in, particularly the United States. Obviously everyone 160 00:09:37,120 --> 00:09:40,480 Speaker 3: is watching very closely. You have a regime that's been 161 00:09:40,520 --> 00:09:44,559 Speaker 3: in place for four or five decades that if it collapses, 162 00:09:44,679 --> 00:09:47,560 Speaker 3: then there's all sorts of questions about what that means 163 00:09:47,600 --> 00:09:50,800 Speaker 3: for stability in the Middle East, for the price of oil, 164 00:09:50,920 --> 00:09:55,040 Speaker 3: and then does that have any ramifications for the region 165 00:09:55,240 --> 00:09:57,880 Speaker 3: at large? Are there kind of ripple effects that maybe 166 00:09:57,960 --> 00:10:01,080 Speaker 3: you're not even thinking about right now now that I'm 167 00:10:01,120 --> 00:10:04,840 Speaker 3: sure leaders across the region, particularly China and India are 168 00:10:04,960 --> 00:10:07,960 Speaker 3: kind of doing a risk assessment now and seeing where 169 00:10:08,000 --> 00:10:09,079 Speaker 3: they might be vulnerable. 170 00:10:15,360 --> 00:10:19,400 Speaker 2: Trump's hardball over Iranian oil could squeeze China, but it 171 00:10:19,440 --> 00:10:23,480 Speaker 2: could also boost Beijing's soft power that's coming up after 172 00:10:23,520 --> 00:10:40,000 Speaker 2: the break. China is Iran's most important trading partner, with 173 00:10:40,120 --> 00:10:43,240 Speaker 2: more than thirty two billion dollars in goods exchanged in 174 00:10:43,240 --> 00:10:47,680 Speaker 2: twenty twenty four. That support of Tehran helps counter US 175 00:10:47,760 --> 00:10:51,640 Speaker 2: influence in the Middle East. Meanwhile, India ranks as Iran's 176 00:10:51,640 --> 00:10:55,440 Speaker 2: sixth biggest trading partner, behind several Middle Eastern countries and 177 00:10:55,480 --> 00:10:59,439 Speaker 2: the European Union. For Tehran, oil sales to these two 178 00:10:59,480 --> 00:11:03,440 Speaker 2: Asian giants are vital to keeping the regime afloat, but 179 00:11:03,520 --> 00:11:06,679 Speaker 2: for Beijing and New Delhi that discounted crude is far 180 00:11:06,800 --> 00:11:10,960 Speaker 2: less crucial to their economies. Still, as Bloomberg's Daniel ten 181 00:11:11,080 --> 00:11:14,880 Speaker 2: Kate points out, maintaining a steady flow of arranging oil 182 00:11:15,080 --> 00:11:17,240 Speaker 2: remains important for both countries. 183 00:11:18,040 --> 00:11:22,360 Speaker 3: I mean, China is basically going through deflation, so I mean, 184 00:11:22,920 --> 00:11:25,280 Speaker 3: I guess you could have an argument that they can 185 00:11:25,480 --> 00:11:28,960 Speaker 3: absorb higher prices a lot easier than a place like 186 00:11:29,080 --> 00:11:32,920 Speaker 3: India could. India also CPI is quite low at the moment, 187 00:11:33,040 --> 00:11:36,360 Speaker 3: so from their perspective, you know, it's probably not the 188 00:11:36,440 --> 00:11:39,440 Speaker 3: end of the world either to start paying a higher prices. 189 00:11:40,120 --> 00:11:43,600 Speaker 3: They're always very politically sensitive to price moves and oil 190 00:11:43,720 --> 00:11:47,559 Speaker 3: is one where everyone could feel it throughout the whole economy. 191 00:11:47,720 --> 00:11:50,360 Speaker 3: So even if the price goes up and you're used 192 00:11:50,400 --> 00:11:53,120 Speaker 3: to paying a small amount, people notice the price increases 193 00:11:53,200 --> 00:11:56,600 Speaker 3: right away, So they tend to have a higher outsized 194 00:11:56,679 --> 00:12:02,000 Speaker 3: political impact. And so either way, if you're She or Mody, 195 00:12:02,080 --> 00:12:05,600 Speaker 3: you don't like to see oil prices jumping or being 196 00:12:05,840 --> 00:12:08,800 Speaker 3: volatile in any way, then even if you can absorb 197 00:12:08,840 --> 00:12:09,520 Speaker 3: it to some. 198 00:12:09,520 --> 00:12:12,800 Speaker 2: Extent, is there any chance that China and India would 199 00:12:12,880 --> 00:12:18,560 Speaker 2: actually preemptively stop purchasing oil from Iran to head off 200 00:12:18,720 --> 00:12:20,079 Speaker 2: these tariffs, Well. 201 00:12:19,880 --> 00:12:23,599 Speaker 3: India's already cut off a lot of Iranian oil purchases, 202 00:12:23,679 --> 00:12:28,760 Speaker 3: and they've already started reducing Russian purchases as well. So 203 00:12:29,120 --> 00:12:33,439 Speaker 3: for India, yes, I mean they're suffering under these tariffs 204 00:12:33,600 --> 00:12:37,040 Speaker 3: more acutely than China is at the moment. In China's case, 205 00:12:37,160 --> 00:12:40,800 Speaker 3: it is unlikely. I think China doesn't like to bend 206 00:12:40,840 --> 00:12:43,839 Speaker 3: to the US and has shown over the past year 207 00:12:43,920 --> 00:12:47,640 Speaker 3: that it can withstand the sort of pressure from Trump 208 00:12:48,120 --> 00:12:51,959 Speaker 3: because it has this trump card, so to speak of 209 00:12:52,120 --> 00:12:54,480 Speaker 3: rare eer so and it can cut off the US 210 00:12:54,559 --> 00:12:58,640 Speaker 3: and it has played that very effectively last year. Something 211 00:12:58,679 --> 00:13:01,000 Speaker 3: that brought Trump to the table, led to the truce 212 00:13:01,720 --> 00:13:04,360 Speaker 3: that we saw, and the US still has no real 213 00:13:05,080 --> 00:13:09,319 Speaker 3: replacement for these rarest and critical minerals, and they've shown 214 00:13:09,480 --> 00:13:11,480 Speaker 3: that they could play hardball with the US and the 215 00:13:11,480 --> 00:13:12,120 Speaker 3: rest of the world. 216 00:13:12,160 --> 00:13:14,720 Speaker 1: Frankly, so, yeah, I don't see. 217 00:13:14,640 --> 00:13:18,080 Speaker 3: China backing down on this, and I think they would 218 00:13:18,160 --> 00:13:21,600 Speaker 3: rather take up the fight than be seen to back down. 219 00:13:23,000 --> 00:13:25,400 Speaker 2: Now. Last week on the show, we discussed how President 220 00:13:25,480 --> 00:13:29,440 Speaker 2: Trump is using an expanded version of the Monroe Doctrine 221 00:13:29,720 --> 00:13:33,800 Speaker 2: to undercut China's influence in Latin America. It's interesting that 222 00:13:33,840 --> 00:13:36,520 Speaker 2: you talk about the world turning to China as a 223 00:13:36,520 --> 00:13:40,840 Speaker 2: more reliable partner. How might this latest threat kind of 224 00:13:40,880 --> 00:13:43,040 Speaker 2: further what Trump is trying to do in terms of 225 00:13:43,120 --> 00:13:45,120 Speaker 2: undercutting China's influence in the world. 226 00:13:45,679 --> 00:13:48,840 Speaker 3: Over the past five years, during the Biden administration particular, 227 00:13:48,960 --> 00:13:52,559 Speaker 3: they really tried to hammer home the fact that China 228 00:13:52,600 --> 00:13:56,160 Speaker 3: was using economic coercion to get what it wants and 229 00:13:56,200 --> 00:14:00,600 Speaker 3: squeeze allies and other countries around the world. Now you 230 00:14:00,679 --> 00:14:04,520 Speaker 3: have a completely different scenario where Trump is just blatantly 231 00:14:05,400 --> 00:14:07,600 Speaker 3: saying We're going to use economic coersion. 232 00:14:07,280 --> 00:14:08,080 Speaker 1: To get what we want. 233 00:14:08,880 --> 00:14:13,600 Speaker 3: So from a Chinese perspective, You're in this sort. 234 00:14:13,360 --> 00:14:15,160 Speaker 1: Of mightis right world. 235 00:14:15,360 --> 00:14:18,120 Speaker 3: And I think that was a lot of the fears 236 00:14:18,160 --> 00:14:22,120 Speaker 3: that many countries had about China, that there were no 237 00:14:22,280 --> 00:14:27,400 Speaker 3: global rules to constrain countries like China. Frankly, and now, 238 00:14:27,800 --> 00:14:30,520 Speaker 3: if the situation were reversed and China was doing what 239 00:14:30,680 --> 00:14:34,120 Speaker 3: Trump was doing now, the outrage even two years ago 240 00:14:34,200 --> 00:14:35,800 Speaker 3: would have been off the charts. 241 00:14:35,960 --> 00:14:37,480 Speaker 2: And I guess, in some ways, does all of this 242 00:14:38,040 --> 00:14:41,600 Speaker 2: position China to basically make that argument that it is 243 00:14:41,640 --> 00:14:46,400 Speaker 2: a more reliable friend, a more reliable partner than the US's. 244 00:14:46,600 --> 00:14:49,320 Speaker 3: Yeah, I mean it comes down to reliability. And if 245 00:14:49,880 --> 00:14:51,680 Speaker 3: you're dealing with Trump, you don't know if he's going 246 00:14:51,760 --> 00:14:55,200 Speaker 3: to turn on you and demand something from you that's 247 00:14:55,240 --> 00:14:59,080 Speaker 3: a core national interest. So China at the moment has 248 00:15:00,120 --> 00:15:05,040 Speaker 3: or trade itself as an alternative of stability. It's talked 249 00:15:05,040 --> 00:15:08,640 Speaker 3: about global rules a lot. It's allowed China to claim 250 00:15:08,920 --> 00:15:11,880 Speaker 3: the moral high ground, whether you think it deserves it 251 00:15:12,000 --> 00:15:15,560 Speaker 3: or not. China has been there to say, look, we 252 00:15:15,680 --> 00:15:19,280 Speaker 3: follow the UN Charter, we follow global rules. So China's 253 00:15:19,320 --> 00:15:22,600 Speaker 3: response isn't to go and say, okay, Trump said a 254 00:15:22,760 --> 00:15:24,760 Speaker 3: precedent where we can do anything we want, so we're 255 00:15:24,760 --> 00:15:27,200 Speaker 3: going to go and take Taiwan. That's not the case, 256 00:15:27,400 --> 00:15:30,600 Speaker 3: but the precedent is setting is that we're in a 257 00:15:30,680 --> 00:15:34,320 Speaker 3: law of the jungle, might is right world, and in 258 00:15:34,360 --> 00:15:37,160 Speaker 3: that type of world, China is very strong. But China 259 00:15:37,280 --> 00:15:40,680 Speaker 3: for the moment is it's enhancing its credibility as a 260 00:15:40,880 --> 00:15:42,800 Speaker 3: responsible partner in a lot of ways. 261 00:15:44,640 --> 00:15:47,600 Speaker 2: We're just weeks into twenty twenty six and the US 262 00:15:47,600 --> 00:15:51,480 Speaker 2: has now attacked Venezuela, captured President Nicholas Maduro, and is 263 00:15:51,520 --> 00:15:55,080 Speaker 2: now threatening to also intervene in Iran. Obviously, She and 264 00:15:55,120 --> 00:15:58,240 Speaker 2: Mody are closely watching all of this. How might this 265 00:15:58,320 --> 00:15:59,480 Speaker 2: be sitting with them? 266 00:16:00,360 --> 00:16:07,520 Speaker 3: Like, nobody likes instability, especially if you're running a country 267 00:16:07,560 --> 00:16:10,520 Speaker 3: with more than a billion people, with both Modi and 268 00:16:10,640 --> 00:16:13,400 Speaker 3: She are. I mean, there's a lot of moving parts 269 00:16:13,440 --> 00:16:17,520 Speaker 3: in both economies and to have big time external shocks 270 00:16:18,240 --> 00:16:21,840 Speaker 3: that could impact the price of oil is certainly a worry. 271 00:16:21,880 --> 00:16:24,160 Speaker 3: And I think that's their main worry at the moment, 272 00:16:24,880 --> 00:16:28,600 Speaker 3: is what are going to be the effects on the 273 00:16:28,640 --> 00:16:33,359 Speaker 3: economy that could trickle into domestic politics and effects stability 274 00:16:33,440 --> 00:16:36,120 Speaker 3: one way or the other. I don't think they're necessarily 275 00:16:36,200 --> 00:16:40,480 Speaker 3: worried that you'll see a contagion effect from the protests 276 00:16:40,880 --> 00:16:46,840 Speaker 3: in Tehran to New Delhi or to Beijing. But certainly 277 00:16:46,880 --> 00:16:51,040 Speaker 3: you're worried about the secondary economic effects, and you're worried 278 00:16:51,040 --> 00:16:52,920 Speaker 3: about what the US will do. 279 00:16:53,600 --> 00:16:56,960 Speaker 1: For She and for Modi. Stability is the preference. 280 00:16:57,080 --> 00:16:59,160 Speaker 3: You want to make sure first of all that your 281 00:16:59,240 --> 00:17:04,359 Speaker 3: domestics such is secure, that there's no protest or domestic 282 00:17:04,480 --> 00:17:07,480 Speaker 3: unrest or fallout from any of these events that could 283 00:17:07,520 --> 00:17:11,760 Speaker 3: affect your domestic political standing. And then you know, secondly 284 00:17:11,840 --> 00:17:15,760 Speaker 3: to make sure that geopolitically you're not heard in any way. 285 00:17:16,000 --> 00:17:19,119 Speaker 1: And so I think that's kind of what they're watching for. 286 00:17:19,240 --> 00:17:22,159 Speaker 3: But are we going to see a change in strategy 287 00:17:22,160 --> 00:17:25,560 Speaker 3: more broadly, No, I mean I think you do see 288 00:17:26,240 --> 00:17:30,879 Speaker 3: China hosting a lot of leaders lately from Europe and 289 00:17:30,920 --> 00:17:34,000 Speaker 3: particularly of Canada's leader going over soon. 290 00:17:34,080 --> 00:17:36,080 Speaker 1: So they're improving. 291 00:17:35,680 --> 00:17:39,040 Speaker 3: Ties with a lot of Middle powers, and a lot 292 00:17:39,080 --> 00:17:40,480 Speaker 3: of middle powers are looking to. 293 00:17:40,480 --> 00:17:42,040 Speaker 1: China now is a hedge against the US. 294 00:17:42,080 --> 00:17:44,200 Speaker 3: So in a way, a lot of this is actually 295 00:17:45,000 --> 00:17:48,560 Speaker 3: not bad for China on a grand scheme of things. 296 00:17:48,640 --> 00:17:51,760 Speaker 3: It's sort of countries are looking to China as a 297 00:17:51,840 --> 00:17:55,679 Speaker 3: counterbalance to the US and Trump, and China has shown 298 00:17:55,760 --> 00:17:59,040 Speaker 3: that it can stand up to Trump. So if Trump 299 00:17:59,080 --> 00:18:01,800 Speaker 3: does go after them again, China's going to have a 300 00:18:01,840 --> 00:18:05,199 Speaker 3: lot of countries that are more sympathetic to China in 301 00:18:05,240 --> 00:18:08,399 Speaker 3: any case, in viewing Trump more as the rogue actor, 302 00:18:08,440 --> 00:18:11,239 Speaker 3: which is kind of a change of role in what 303 00:18:11,280 --> 00:18:20,520 Speaker 3: we've seen over the past decade or so. 304 00:18:20,600 --> 00:18:23,280 Speaker 2: This is The Big Take Asia from Bloomberg News. I'm 305 00:18:23,280 --> 00:18:26,679 Speaker 2: wanh to get more from The Big Take and unlimited 306 00:18:26,720 --> 00:18:29,639 Speaker 2: access to all of Bloomberg dot Com, subscribe today at 307 00:18:29,680 --> 00:18:33,400 Speaker 2: Bloomberg dot com slash podcast offer. If you liked the episode, 308 00:18:33,520 --> 00:18:36,000 Speaker 2: make sure to subscribe and review The Big Take Asia 309 00:18:36,080 --> 00:18:38,880 Speaker 2: wherever you listen to podcasts. It really helps people find 310 00:18:38,920 --> 00:18:42,040 Speaker 2: the show. Thanks for listening, See you next time.