Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: She certainly lays out a very different vision for the
Speaker 2: United States than former President Trump does.
Speaker 3: Welcome back to voter Nomics, where politics and markets collide.
Speaker 3: This year, voters around the world have the ability to
Speaker 3: affect markets, countries, and economies like never before, so we
Speaker 3: created this series to help you make sense of it all.
Speaker 3: I'm Stephanie Flanders and I'm a Woodridge and our co
Speaker 3: host Alegra Stratton is not quite back in the saddles.
Speaker 3: She'll be back next week. Adrian, we are. It feels
Speaker 3: like the beginning of term. We're back together again, and
Speaker 3: just a few things have happened in the last month
Speaker 3: or so.
Speaker 4: Absolutely, it is indeed the beginning of term. An extraordinary
Speaker 4: number of things have happened. I think, in particular, the
Speaker 4: American election has been turned on its head. When we left,
Speaker 4: it looked as though Donald Trump was almost as certain
Speaker 4: did to get into the White House. Now it looks
Speaker 4: as though he's the outside candidate. So extraordinary change, yes,
Speaker 4: and well we'll see.
Speaker 3: I mean, he would probably not accept that he's an
Speaker 3: outside candidate, and even our own swing state poles suggest
Speaker 3: it's still very much in the balance, But you're right,
Speaker 3: everything has changed. I mean, what we're going to focus
Speaker 3: on today is the foreign policy side of the election,
Speaker 3: and we're going to be talking to a former senior
Speaker 3: official in both the Obama and Clinton administrations. So you
Speaker 3: just heard there, Mike Frohman, now head of the Council
Speaker 3: of Foreign Relations. I was struck Adrian in Chicago watching Kamala
Speaker 3: Harris's acceptance speech. There was probably more on foreign policy
Speaker 3: in her speech than any other one at the convention,
Speaker 3: but that wasn't a high bar. No one was talking
Speaker 3: about it very much. What is amazing is and a
Speaker 3: function of how quickly this campaign has changed, is a
Speaker 3: few lines on foreign policy in that convey and speech
Speaker 3: is probably going to be all that we get from
Speaker 3: her on foreign policy before next week's debate with Donald
Speaker 3: Trump on September tenth.
Speaker 4: In one sense, it's an incredibly frustrating thing because the
Speaker 4: world is on fire and we're not hearing about these
Speaker 4: massively important issues. But on the other hand, America is
Speaker 4: a big country. It's an inwood looking country, and elections
Speaker 4: do not tend to turn on foreign policy. Foreign policy
Speaker 4: is an issue for wants, it's an issue for eccentrics,
Speaker 4: but it's not the issue that people vote on. People
Speaker 4: vote on pocket book issues. So she is doing the
Speaker 4: sensible thing in many ways. So we know a great
Speaker 4: deal about her cooking abilities, and we know almost nothing
Speaker 4: about what she thinks about NATO except that she's broadly
Speaker 4: in favor of it.
Speaker 3: I should say, although we've all supposedly been on holiday,
Speaker 3: I can't help noticing that you have still written quite
Speaker 3: a few columns since we last spoke, particularly relating to
Speaker 3: Kastarmer's first few weeks as Prime Minister in this new
Speaker 3: Labor government. And one thing that has been a theme
Speaker 3: has been housing. And all these elections that we've covered
Speaker 3: on this podcast for you know, through this year and
Speaker 3: now looking to the US election, the cost of housing
Speaker 3: housing supply has just emerged as this major issue in
Speaker 3: almost every election we look at, and sort of related
Speaker 3: to that, as politicians grasp for ways to increase housing supply.
Speaker 3: There's been this kind of war declared on Nimbi's and
Speaker 3: both you know, Carla Harris and many Democrats in the
Speaker 3: Convention we're talking about raising housing supply. Also here in
Speaker 3: the UK, a war on Nimbi's being waged by labor
Speaker 3: and you have some reservations about it. You had a
Speaker 3: brilliant sort of tipbit in your which I hadn't noticed
Speaker 3: in your discussion around the nimbi's in your in your
Speaker 3: column way, so that although he said polent suggests that
Speaker 3: people are far less opposed to new housing developments if
Speaker 3: they're esthetically pleasing. Yet Angela Rayner last scene I should
Speaker 3: mention quite recently raving in Abitha, the Deputy Prime Minister
Speaker 3: and Secretary of State for Housing, has imperiously removed the
Speaker 3: requirement that new buildings should be beautiful on the grounds
Speaker 3: that beautiful means nothing. Really. That does seem quite controversial.
Speaker 4: If you have a party that had, you know, was
Speaker 4: inspired by John Ruskin and William Morrison, people who thought
Speaker 4: that beauty should be democratized, that there was no reason
Speaker 4: why ordinary people shouldn't have access to beauty. It seems
Speaker 4: a pretty terrible thing to say, but she certainly redeemed
Speaker 4: herself by her raving this weekend.
Speaker 3: We've gone from being fed up for experts with you know,
Speaker 3: not caring about beauty. I don't know, I don't know
Speaker 3: which is best. But we are thinking about foreign policy
Speaker 3: and we also we're supposed to on this podcast be
Speaker 3: recording any number of elections happening this year, and there
Speaker 3: has been breaking news from Germany this weekend. Two state
Speaker 3: elections that we the world probably wouldn't usually pay attention to,
Speaker 3: in Thringia and Saxony, but they have both shaken up
Speaker 3: Germany's establishment parties and the results have potentially also held
Speaker 3: some pretty significant warnings for Olave Schultz's federal elections next year.
Speaker 3: So let's get to our quick on the ground conversation
Speaker 3: with our senior editor in Berlin, Alan Crawford. Alan, thanks
Speaker 3: very much for joining us.
Speaker 1: Hello, thank you Stephanie.
Speaker 3: For those who haven't paid attention to the details, but
Speaker 3: perhaps don't want to hear all the details, could you
Speaker 3: just remind us why these two state elections were more significant,
Speaker 3: perhaps than usual, certainly for the rest of the world.
Speaker 1: What grabbed the headlines was the fact that the far
Speaker 1: rate has won a stateu action for the first time
Speaker 1: since the Nazis in the Second World War, and that
Speaker 1: foil shocking is not all that surprising because the polls
Speaker 1: have been indicating this was the case, this would be
Speaker 1: the case for a long time. Also, this the far
Speaker 1: right party the alternative for Germany that a SDA to
Speaker 1: use the German acronym is it's anti immigration, it's largely
Speaker 1: pro putine, and it really seems to have tapped into
Speaker 1: a vein, particularly in the east of Germany. So it
Speaker 1: placed first in the state of Turin, which is actually
Speaker 1: a beautiful state, picture postcardtowns, and in Saxony, which is
Speaker 1: the center of the semiconductor industry, so you know there's
Speaker 1: a significance there in economic terms.
Speaker 3: Potentially, you've just described two very different states in terms
Speaker 3: of where we can't put this all down to economic discontent.
Speaker 3: We often talk about foreign policy not determining elections, but
Speaker 3: foreign policy and specifically support for Ukraine has figured very
Speaker 3: prominently in both very much.
Speaker 1: So there's an open goal, if you like, in attacking
Speaker 1: the coalition the federal government in Berlin. It's a three
Speaker 1: way coalition that deeply unpopular. It's led by the Social Democrats.
Speaker 1: Olaf Schultz is the chancellor, with the Greens party and
Speaker 1: also with the Free Democrats kind of liberal pro business party,
Speaker 1: and they all perform disaster disastrously in these state elections.
Speaker 1: But yes, they're flailing. As governments across Europe are over
Speaker 1: the issue of immigration and Germany, despite its slow start,
Speaker 1: it was also it's now also the largest contributor apart
Speaker 1: from the US, of military aid to Ukraine, and both
Speaker 1: those policies, in terms of open immigration policy and helping
Speaker 1: Ukraine are deeply unpopular in sections of society.
Speaker 4: How does the pro puting side of this fit in?
Speaker 4: How can we explain that?
Speaker 1: Well, it's actually not all that difficult to explain. Both
Speaker 1: those states are in the eastern part of Germany. Poles
Speaker 1: consistently show that Germans as a whole are in favor
Speaker 1: of helping Ukraine a slim majority, but a large number
Speaker 1: of this majority are in the east. Of this minority rather,
Speaker 1: who are against helping u train are in the East,
Speaker 1: And yeah, there's something of a dichotomy there for obvious
Speaker 1: reasons that you know, it was the Soviet dominated part
Speaker 1: of the country, but they're nevertheless, is also an allied
Speaker 1: distrust of NATO, distrust of the US, and frankly, many
Speaker 1: people I've spoken to people who feel very uncomfortable with
Speaker 1: the idea of supplying weapons into a war, which overturned
Speaker 1: a longstanding German policy, and they feel that that's fueling
Speaker 1: the conflict rather than resolving it.
Speaker 4: But I would have thought if you'd lived under the
Speaker 4: hail of Soviet dictatorship, you'd be pretty wary of booting.
Speaker 1: Yes, but that's very much a Western perception of how
Speaker 1: people in the East think, and and that gets to
Speaker 1: the nub of this protest that they don't feel represented
Speaker 1: by the establishment parties. That Another one of the headlines
Speaker 1: from yesterday's results was the fact that a party called
Speaker 1: the bs W it's named after a woman, Zarawagenconnecht, who
Speaker 1: is a former communist. That party placed third. It came
Speaker 1: from nowhere, it was only formed earlier this year, and
Speaker 1: it comes with a broadly left up sitting well, you know,
Speaker 1: pretty left wing economic stance, but it's also anti immigration
Speaker 1: and anti help for Ukraine. It did incredibly well and
Speaker 1: could well be in the state governments. So that's an
Speaker 1: indication of really the kind of the way that politics
Speaker 1: is being turned on its head, particularly in the East.
Speaker 3: I mean, just on that point we tend to focus
Speaker 3: and of course the sort of the world is very
Speaker 3: sort of transfixed with the alternative at Deutschland and you know,
Speaker 3: obviously with the echoes of the of the Nazi past,
Speaker 3: but we shouldn't forget that. One of the striking things
Speaker 3: about these two elections was the strength of the new
Speaker 3: b W alliance of the far left, and they're going
Speaker 3: to play a kind of key role in, if you like,
Speaker 3: keeping the AfD out of power in these coalitions in
Speaker 3: the states. So tell us a bit about them.
Speaker 1: They almost certainly will do, because of course, coalition building
Speaker 1: is extremely difficult when you have a party that scores
Speaker 1: something like thirty percent and above of the vote but
Speaker 1: is excluded by the very nature of the fact that
Speaker 1: the other parties refused to form a coalition. Yeah, the
Speaker 1: BSW Zara wagenconnect is. I mean, she's essentially a populist
Speaker 1: politician who she is constantly on television chat shows. Nothing
Speaker 1: wrong with that, of course, but she was found to
Speaker 1: have took part in very few votes in the Bundestag
Speaker 1: over the last session. She has really been very politically astute.
Speaker 1: It's very easy to categorize voters, you know, when they
Speaker 1: vote like this. But she saw that there was an
Speaker 1: opening for a party that was conservative in social positions
Speaker 1: but not necessarily economically. And I think that she's opened
Speaker 1: up the way both into government in these states but
Speaker 1: also potentially federally at the next election, which is too
Speaker 1: a year from now, September twenty twenty five.
Speaker 3: So often the more extremist parties have tended to be
Speaker 3: on the right and not also on the left in
Speaker 3: response to recent economic and immigration trends. It's very interesting
Speaker 3: that we are actually seeing that in Germany. But the
Speaker 3: immediate just quickly, Alan is sort of the immediate follow
Speaker 3: up to this for Ola Schulz, does it change the
Speaker 3: way that he's trying to shore up his coalition going forward.
Speaker 1: Not really no, because he I mean, apart from the
Speaker 1: fact he's bullheaded and stubborn. Then there's a third state
Speaker 1: election in the east in Brandenburg, which surrounds Berlin later
Speaker 1: on this month. The SPD, his party, is not looking
Speaker 1: so bad in that election. The AfD will do well,
Speaker 1: the BSW will do well, but SBD is not down
Speaker 1: and out there. And also, as I said, the a
Speaker 1: FD is not going to enter government in any of
Speaker 1: these states. So it's a lot of noise. But I
Speaker 1: think it's important to also look that the center right,
Speaker 1: the former party of mercle, the Christian Democrats, it kind
Speaker 1: of held pretty steady. They will probably form the government,
Speaker 1: the majority party in the States and Poles continually show
Speaker 1: that they're on course to win the next federal election.
Speaker 1: So this is not France.
Speaker 3: I'm Crawford, thank you, thank you so much. He's reminded
Speaker 3: us that one of the things that has not changed
Speaker 3: since we last spoke is that there's still now French
Speaker 3: government formally speaking, or at least now new government after
Speaker 3: the legislative election. But maybe in the next few weeks
Speaker 3: we'll be able to talk about a new French government.
Speaker 3: Let's get to that conversation that Adrian and I had
Speaker 3: just a few moments ago with an extremely distinguished practitioner
Speaker 3: and thinker on foreign policy, Mike Frohman, now president of
Speaker 3: the American think tank the Council on Foreign Relations, but
Speaker 3: previously a senior official for both President Clinton and President Obama.
Speaker 3: He ended up as US Trade Representative for President Obama
Speaker 3: in his second administration. And I started by asking him
Speaker 3: whether we should care that Kamala Harris seems to have
Speaker 3: been talking about foreign policy as little as possible.
Speaker 2: I don't think that's terribly surprising. I mean, first of all,
Speaker 2: elections rarely turn on foreign policy concerns. This election, foreign
Speaker 2: policy may play more of a role than traditionally. But
Speaker 2: I think to the degree that she needs to distinguish
Speaker 2: herself from both Trump and from Biden, she's seeking to
Speaker 2: do so, really in the area of economics and really
Speaker 2: in the area of domestic economic policy. Her plan to
Speaker 2: reduce inflation, price controls, et cetera, with certainly a stab
Speaker 2: at saying that she recognizes how important inflation is to
Speaker 2: the American public and she wants to take action against it.
Speaker 3: And in general, there is where she's not talking about
Speaker 3: we should just sort of assume that she's going to
Speaker 3: be the same as Biden. Is that the general message?
Speaker 2: I mean, we don't know yet. I mean, I think
Speaker 2: she has at least indicated she is willing to go
Speaker 2: further in certain areas, for example this price control and
Speaker 2: gouging price gouging area in foreign policy. Again, we haven't
Speaker 2: seen a lot of science that she's going to be
Speaker 2: a different place, some different emphasis, including perhaps on the
Speaker 2: Palestinian issue. But she has been part of the Biden administration.
Speaker 2: She is sent in innumerable situation room meetings with the
Speaker 2: President and the senior team working through these issues. Over
Speaker 2: the last four years, she's traveled on behalf of the
Speaker 2: administration several times to every continents, virtually every continent. She's
Speaker 2: met one hundred and fifty four meters. So she has
Speaker 2: been part of the Biden administration's foreign policy team for
Speaker 2: the last three and a half years, and you would
Speaker 2: expect there'd be a fair degree of continuity at least
Speaker 2: some perspective.
Speaker 4: But if I'm a sort of undecided voter, if such
Speaker 4: a thing exists in the United States at the moment,
Speaker 4: it's very difficult for me to think of data points
Speaker 4: on which to make up my mind between her and Trump.
Speaker 4: In she's a bit of a blank slate. I mean,
Speaker 4: she's not quite Biden. I'm not voting. If I was
Speaker 4: voting for Biden, I'd be voting for somebody with an
Speaker 4: enormous amount of experience and with great clarity about what
Speaker 4: his foreign policy is. With her, I'm voting for somebody
Speaker 4: who's been in charge of the border, well that was
Speaker 4: a bit of a disaster. Who's come down on this
Speaker 4: side or that side of issues such as the Palestinian issue.
Speaker 4: Who's deliberately dealing in a world of vagueness and vibes
Speaker 4: at a time when the world is enormously dangerous.
Speaker 2: I'm a bit worried it sounds like you as the
Speaker 2: undecided but highly policy oriented voter who may be a
Speaker 2: rare breed. There's certainly thousands of data points to distinguish
Speaker 2: her from former President Trump. I mean, she is and
Speaker 2: she has a long record, whether it's a senator, as
Speaker 2: Attorney General of California, as vice president, as part of
Speaker 2: the Biden administration. I think the harder one is to
Speaker 2: distinguish her from President Bia. But she certainly lays out
Speaker 2: a very different vision for the United States than former
Speaker 2: President Trump does.
Speaker 3: If you look around the world today, it is on fire.
Speaker 3: You have two live conflicts on which it feels like
Speaker 3: these two candidates would have very different approaches. If you're
Speaker 3: sitting in the rest of the world, what should you
Speaker 3: expect from a Trump administration or a Harris administration when
Speaker 3: it comes specifically to Ukraine and the Middle East.
Speaker 2: Well, I think the greatest difference is likely to be
Speaker 2: on Russia and Ukraine, where former President Trump has said
Speaker 2: he would end the war in twenty four hours. He
Speaker 2: hasn't said how he would do that, but most people
Speaker 2: interpret that as him signaling to the Ukrainians that support
Speaker 2: is is coming to an end and that they should
Speaker 2: come to the negotiating table and negotiate the best deal
Speaker 2: they can with President Putin, Whereas the Biden Harris administration,
Speaker 2: I imagine Vice President Harris, if she would be elected,
Speaker 2: would continue the policy of trying to provide very strong
Speaker 2: support for the Ukrainians, working very closely with NATO and
Speaker 2: other allies to support Ukraine's effort, and ultimately getting to
Speaker 2: a position where Ukraine can negotiate with the Russians, but
Speaker 2: hopefully from a position of strength, where they have something
Speaker 2: to trade, where they have a better situation on the ground.
Speaker 2: And so I think there there's likely to be quite
Speaker 2: a significant difference. And if you're sitting across the pond,
Speaker 2: you're a member of NATO, I think you worry quite
Speaker 2: a bit about what the differences between former President Trump
Speaker 2: and the Vice President Harris, because the commitment to the Alliance,
Speaker 2: the willingness to work with allies and partners, is I
Speaker 2: think one of their fundamental differences overall. When it comes
Speaker 2: to the Middle East. I think it may be more
Speaker 2: a matter of emphasis than substance. Both candidates are strongly
Speaker 2: in support of Israel's security and wants to support Israel
Speaker 2: in achieving that security both wanted this conflict in Gaza
Speaker 2: to be over as quickly as possible. Former President Trump
Speaker 2: hasn't laid out how we go about doing that differently
Speaker 2: than President Biden, but certainly this administration has been pushing
Speaker 2: hard to try and reach a ceasefire, has laid out
Speaker 2: a plan to do so. I think the matter of
Speaker 2: emphasis is that if there are some small indications that
Speaker 2: she has been more willing to say out loud what
Speaker 2: we know the Biden administration has said privately to the Israelis,
Speaker 2: which is that they've got to do more and better
Speaker 2: to avoid civilian casualties in Gaza, They've got to do
Speaker 2: more and better to provide humanitarian aid to the terrible
Speaker 2: situation facing the Palestinians, and that there needs to be
Speaker 2: a pathway towards the Palestinian self determination and state of
Speaker 2: it at some point. That has been the part of
Speaker 2: the Biden plan. She has said it a bit more
Speaker 2: outwardly than the than the Biden administration has, But there again,
Speaker 2: I think it's more a matter of emphasis than anything else.
Speaker 4: Again, this issue of her the vagueness and the vibes.
Speaker 4: Has she said anything specific or detailed about her policy
Speaker 4: towards China, which seems to be quite an important issue.
Speaker 2: If you're asking, as you said, anything in the last
Speaker 2: six weeks since she was elevated as the Democratic candidate,
Speaker 2: I don't think she has said anything more than what
Speaker 2: she has said for the last three and a half years,
Speaker 2: which has been very much part of the Biden administration,
Speaker 2: focused on investing domestically to build out industrial capacity and
Speaker 2: competitiveness and absolutely critical technologies, standing firm against China in
Speaker 2: terms of unfair trade practices, including using tariffs and other
Speaker 2: tools to keep out Chinese imports in critical sectors, and
Speaker 2: more broadly beyond economics, standing firm, whether it's on the
Speaker 2: self China see or on enhancing the terrens around Taiwan.
Speaker 2: She's been very much part of the Biden administration approach
Speaker 2: to that. She's gone to Asia four times, I'm correct,
Speaker 2: that she's met with leaders across the region. She's represented
Speaker 2: President Biden in various regional forums out there. So she
Speaker 2: has been engaged on the China issue directly as well
Speaker 2: as part of the broader policy process.
Speaker 4: So we're saying that she's a continuity candidate, but she's
Speaker 4: a continuity candidate in the world in which has been
Speaker 4: a big rupture in policy towards China in the post
Speaker 4: Trump years. So this is very different from the old
Speaker 4: free trading world.
Speaker 2: Well, I think that the day of big multilateral free
Speaker 2: trade agreements are is probably somewhat in the past, or
Speaker 2: it's not in the near future, that's for sure.
Speaker 3: Says a former negotiator trade agreements.
Speaker 2: Such agreements, And I think part of that is a
Speaker 2: recognition that the rules based system proved to be not
Speaker 2: sufficient to deal with the integration of an economy as
Speaker 2: big and as important as China's is as integrated into
Speaker 2: the global economy as China says, but that basically follows
Speaker 2: a different set of rules, and we haven't figured out
Speaker 2: yet how to address the rules basis and to take
Speaker 2: that into account.
Speaker 3: Just to get a little bit will relate that to
Speaker 3: the sort of slightly more inside baseball crucial questions like
Speaker 3: who might get top jobs under either administration. But I
Speaker 3: think it goes to the Biden administration has been closely
Speaker 3: associated with Jake Sullivan and others such as I don't know,
Speaker 3: delete seeing an intellectual framework to the instincts that Donald
Speaker 3: Trump had when he came into to office. Quite a
Speaker 3: sort of new view of industrial policy, but also, as
Speaker 3: you just laid out, a new view of the global economy,
Speaker 3: which in some ways is a bit more kind of
Speaker 3: zero sum. But do you see that continuing under both
Speaker 3: for Paris administration and the Trump administration.
Speaker 2: I think this administra, the Bide administration, has laid out
Speaker 2: the beginnings of a framework for both a go broader
Speaker 2: than industrial policy, really about the role of the government
Speaker 2: in the economy, including industrial policy, but also with regard
Speaker 2: to export controls, foreign investment restrictions inward and outward, and
Speaker 2: then trade and protectionism. I think any administration coming in
Speaker 2: is going to have to deal with a lot of
Speaker 2: the unanswered questions. For example, I think the Chips Act,
Speaker 2: I think is pretty popular. It's not broadly supported by
Speaker 2: partisan but it got some support. And the question is
Speaker 2: the Chips Act is popular, and that's.
Speaker 3: About having increasing the US production of high, high quality
Speaker 3: semiconduct chips.
Speaker 2: Yet and to date, I think it's working quite well.
Speaker 2: It's crowding in a lot of private investments, so in
Speaker 2: addition to the tens of billions of dollars of public funding,
Speaker 2: it is crowding in scores of billions of dollars of
Speaker 2: private funding, So that's I think seen as a positive.
Speaker 2: The Inflation Reduction Act, which also was engaged in industrial
Speaker 2: policy with regard to electric vehicles and other clean energy technologies,
Speaker 2: that has less bipartisan support. So a question will be
Speaker 2: for any administration going forward, is industrial policy a central
Speaker 2: part of our toolbox going forward? How much are we
Speaker 2: willing to spend on it at what cost? Of course,
Speaker 2: to state the obvious, every dollar spent on industrial policy
Speaker 2: is a dollar not spent on defense, on social programs,
Speaker 2: or it's another dollar going to the deficit and the debt,
Speaker 2: which may consider it to be an unsustainable trajectory. So
Speaker 2: they're going to have to make these kinds of trade offs.
Speaker 2: Same thing with the other tools. Protectionism is the most
Speaker 2: obvious one. We hate our dependence on China. We also
Speaker 2: hate inflation and rising cost of living, and the actions
Speaker 2: we take to reduce our dependence on China, whether it's
Speaker 2: retoring or putting tariffs on, it's going to exacerbate inflation
Speaker 2: and the high cost of living. That may be a
Speaker 2: perfectly legitimate trade off to make on strategic goods, it
Speaker 2: may be a less persuasive trade off to make on
Speaker 2: clothing and footwear and toys and things that low income
Speaker 2: Americans spend a disproportionate amount of their disposable income on.
Speaker 2: And so again, I think any future administration is going
Speaker 2: to have to wrestle with these questions. And the challenge
Speaker 2: I think has been that the Biden administration has been
Speaker 2: quite disciplined in the small yard high fans, the restrictions
Speaker 2: on exports being really quite limited to the most highly
Speaker 2: powered semi conductor chips and a few other critical technologies.
Speaker 2: Same thing on foreign investment. But now that the processes
Speaker 2: are in place or the precedent has been set, there's
Speaker 2: always the risk that the yard gets bigger and bigger,
Speaker 2: that the screen gets finer and finer, and it becomes
Speaker 2: more and more difficult across other areas of the economy
Speaker 2: that may not be as strategic.
Speaker 4: And President Harris is she well connected with the European leaders.
Speaker 1: She is.
Speaker 2: I mean, first of all, she's been the lead American
Speaker 2: going just as a one example, to the Munich Security Conference.
Speaker 2: Over the last few years, she's led the US delegation there.
Speaker 2: She's invested in an enormous amount of time and talking
Speaker 2: with European leaders and engaging on European issues. Her primary
Speaker 2: national security advisor, Phil Gordon, is a European expert. He's
Speaker 2: the least expert. He's an expert on American foreign policy generally.
Speaker 4: But there is lack which is good.
Speaker 2: There you go all the better, and so.
Speaker 1: There is a.
Speaker 2: Certainly understanding of the European perspective. And I would just
Speaker 2: say more generally, and here I do think if Russia
Speaker 2: Ukraine is one point of contrast between Trump and Harris,
Speaker 2: I think another very important point of contrast is just
Speaker 2: the willingness to work with allies and partners. I think
Speaker 2: there's a much greater commitment you've seen by the Biden
Speaker 2: administration than the Trump administration, and I would assume that
Speaker 2: that would continue under the Harris administration.
Speaker 3: The other thing I'm struck by internationally. We've spoken it
Speaker 3: a bit, spoken about it a bit on the podcast before,
Speaker 3: is there is still even with Kamala Harris having become candidate,
Speaker 3: there's quite a divide between this very very broad sense,
Speaker 3: the kind of business community or some of the sort
Speaker 3: of biggest players in the business community and broadly speaking,
Speaker 3: sort of diplomats around the world when it comes to
Speaker 3: Donald Trump. You know, the business community, again broadly generalizing,
Speaker 3: is surprisingly sort of sanguine, often particularly big American businesses
Speaker 3: and big investors and others, about Donald Trump and even
Speaker 3: maybe quietly wanting to see him come to office in
Speaker 3: terms of what it could do we could do for
Speaker 3: the stock market and for the US economy, And equally
Speaker 3: a lot of people circling the wagons, particularly in the
Speaker 3: G seven but maybe also in other capitals, really worried
Speaker 3: about what it would mean to have Donald Trump back
Speaker 3: in office for sort of global security. Do you think
Speaker 3: both sides are exaggerating.
Speaker 2: Well, I think the business community does have concerns about
Speaker 2: the impact on whether it's on security or just the
Speaker 2: relations around the world, instability in relations around the world.
Speaker 2: But they've sort of made their peace with Donald Trump
Speaker 2: when we saw this back in twenty sixteen or twenty
Speaker 2: seventeen as well, where as long as he delivered on
Speaker 2: tax cuts and regulatory relief, they were willing to swallow
Speaker 2: policies that they didn't like, protectionist trade policies, restricted immigration policies,
Speaker 2: and more chaos around the world. Then I think that
Speaker 2: that view still holds largely true, and to be frank
Speaker 2: has been a fair amount of business uh uh, disappointment
Speaker 2: or concern about the Biden administration, which they view as
Speaker 2: whether it's on anti trust, on other issues, as making
Speaker 2: life quite difficult for them.
Speaker 1: And so.
Speaker 2: I think going into this election there is a view
Speaker 2: by the business community, and whether it's complacent or not,
Speaker 2: one can judge that we got through it the first time.
Speaker 2: He delivered on tax cuts, on regulatory relief, and that
Speaker 2: goes directly to our bottom line or the way we
Speaker 2: do business and the rest we can manage around it.
Speaker 2: Now that may be underplane, you know, the impact of
Speaker 2: protectionism right now.
Speaker 3: I don't know if you, Mike, if you were in Chicago,
Speaker 3: I don't think I saw you there, But that you know,
Speaker 3: we've seen since the convention off swing state, Pole and
Speaker 3: a few others, not a big bounce for Kamala Harris,
Speaker 3: but certainly she's still doing markedly better than Biden was
Speaker 3: in many of those places. But when you talk to
Speaker 3: a lot of the strategists, they point you to the
Speaker 3: fact that the economy is still by overwhelmingly the number
Speaker 3: one issue, particularly in the swing state, and that a
Speaker 3: majority of voters still think that they favored Trump's policies
Speaker 3: on the economy rather than Kamala Harris, and those same
Speaker 3: strategies will tell you the only way really that she's
Speaker 3: going to win is by fixing that, and that means
Speaker 3: persuading voters that actually Trump's tariffs, for example, his promise
Speaker 3: of across the board tariffs on all imports are attacks
Speaker 3: and they would raise inflation, make the economic situation worse
Speaker 3: for people. And you've spent your life trying to persuade
Speaker 3: people about free trade and explain just those kind of arguments.
Speaker 3: Do you think it's a lost cause. Do you think
Speaker 3: they will ever persuade people that the tariffs against China
Speaker 3: are attacks and we'll make things worse.
Speaker 2: I don't think it's a lost cause, but I think
Speaker 2: it's a case that you have to really make, and
Speaker 2: you know there's now analysis out there. I mean, when
Speaker 2: you impose tariffs, you actually run the risk of three
Speaker 2: categories of costs, and there's a direct cost, which is
Speaker 2: what people tend to focus on. How much more that
Speaker 2: Chinese good or the good coming from any other country
Speaker 2: that has a terrify I don't remember. Former President Trump
Speaker 2: is announced he's going to apply ten to twenty percent
Speaker 2: tariffs against goods coming in from all other countries outside
Speaker 2: of China, that the direct cost at a consumer or
Speaker 2: an importer is using that input, it's part of their manufacturing,
Speaker 2: has to pay for it. Then there's the cost of retaliation,
Speaker 2: which we really calculate, but when the other countries retaliate,
Speaker 2: that's a further cost, particularly on our exporting industries, agriculture
Speaker 2: and manufacturing and hurting jobs in those areas. And then
Speaker 2: is a third category, which is more amorphous, which is
Speaker 2: the cost of imitation, where other countries say, well, look
Speaker 2: if the US skin engage in this kind of policy,
Speaker 2: then so it can wait. We can be selective in
Speaker 2: our use of our commitment to free trade, we can
Speaker 2: be selective in our use of tariffs. And that sort
Speaker 2: of an open ended that's sort of an open ended envelope.
Speaker 2: And so you know, I think the Peterson Institute, among others,
Speaker 2: has been an analysis of the direct cause just that
Speaker 2: first category, and it's a thirty nine hundred dollars bill
Speaker 2: to the average American family of taking the Trump proposals seriously,
Speaker 2: that's leaving aside the other two categories of car So.
Speaker 4: I thought you can persuade Stephanie of that case. But
Speaker 4: can Vice President Harris make that case. She seems to
Speaker 4: be averse to talking about policy. She doesn't seem to
Speaker 4: be very eloquent when she does talk about policy issues.
Speaker 4: She said, can she make that case? Have we seen
Speaker 4: any sign of her beginning to make that case, because
Speaker 4: it's actually quite a difficult case to make.
Speaker 2: Yeah, we've seen some signs. I think there's been some
Speaker 2: comments about the broad based tariffs that Trump wants to
Speaker 2: pose on on the whole on the whole world. I think, frankly,
Speaker 2: she's decided that the better economic argument is to win
Speaker 2: against inflation, which people can more relate to, and they
Speaker 2: don't tie tariffs to inflation in quite the same way
Speaker 2: as you know, what's happening with the price of eggs
Speaker 2: or or or something, or the price of something else
Speaker 2: at the grocery store and so or pharmaceutical products or
Speaker 2: other areas where you can say people are price gouging.
Speaker 2: And so that's been her primary line of attack so far.
Speaker 4: She's going for the bad economic argument role than the
Speaker 4: good one.
Speaker 3: Well, yeah, sometimes that.
Speaker 2: After the right issue. I think the question is I
Speaker 2: don't have a license to practice politics? Is one of
Speaker 2: my former flogues used to say, so I'll leave that
Speaker 2: to others, but just remember we have seventy five days.
Speaker 2: I believe again, campaigns don't turn completely on Paula See
Speaker 2: as much as we policy wongs would like to think
Speaker 2: that they do. I think is given how recent she
Speaker 2: became the nominee and the front runner is the fact
Speaker 2: they're beginning to lay out these ideas is good. But
Speaker 2: they also just wanted to get to know her as
Speaker 2: a person and hold that character up against the character
Speaker 2: of the of the alternative candidate and see who they're
Speaker 2: more most comfortable with. The president here, as you know,
Speaker 2: there's multiple roles not just serve policy leader in charge,
Speaker 2: but is head of state and represents the country. And
Speaker 2: I think that's a lot of what Americans think through.
Speaker 2: Do they feel comfortable with former President Trump's leader? Do
Speaker 2: they feel comfortable with Vice President Harris?
Speaker 1: Is different?
Speaker 3: And thank you very much, Mike. That was great.
Speaker 1: Thank you.
Speaker 3: Thanks for listening to this week's photon Nomics from Bloomberg.
Speaker 3: This episode was hosted by me, Stephanie Flanders, and Adrian Wildridge.
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