1
00:00:02,720 --> 00:00:16,759
Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

2
00:00:18,600 --> 00:00:22,920
Speaker 2: Hello and welcome to another episode of the Odd Lots Podcast.

3
00:00:23,040 --> 00:00:26,279
Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, it is

4
00:00:26,320 --> 00:00:29,880
Speaker 2: April twenty second. It is twelve oh nine and fifty

5
00:00:29,920 --> 00:00:32,840
Speaker 2: two seconds as of the time that I am talking

6
00:00:32,880 --> 00:00:33,319
Speaker 2: right now.

7
00:00:33,479 --> 00:00:35,479
Speaker 3: Soon we'll have to do fractions of a second.

8
00:00:35,560 --> 00:00:36,000
Speaker 4: Yeah, I know.

9
00:00:36,600 --> 00:00:39,360
Speaker 2: The market is actually up today. We're recording this on today.

10
00:00:39,360 --> 00:00:43,120
Speaker 2: We just got a headline apparently Treasury Secretary Scott Bessant,

11
00:00:43,400 --> 00:00:48,040
Speaker 2: at a JP Morgan event in Washington said besn't cees

12
00:00:48,120 --> 00:00:53,000
Speaker 2: de escalation with China situation unsustainable. That sent market surging.

13
00:00:53,800 --> 00:00:55,760
Speaker 2: You know, everyone's looking for a little shred of hope,

14
00:00:55,800 --> 00:00:58,360
Speaker 2: right We're a little shred of optimism that like things

15
00:00:58,360 --> 00:01:01,320
Speaker 2: can settle down, we get clarity that the two.

16
00:01:01,280 --> 00:01:04,080
Speaker 3: Biggest economies in the world aren't going to go completely

17
00:01:04,120 --> 00:01:04,920
Speaker 3: head to head.

18
00:01:04,959 --> 00:01:07,760
Speaker 2: Right like, because if I mean, this is really the story,

19
00:01:07,920 --> 00:01:10,520
Speaker 2: right even with the walk back on April ninth, the

20
00:01:10,520 --> 00:01:13,320
Speaker 2: week after Liberation Day, even if and we're not getting

21
00:01:13,319 --> 00:01:15,440
Speaker 2: any deals yet, at least so far, we haven't gotten

22
00:01:15,440 --> 00:01:17,760
Speaker 2: a deal with Indial, we haven't gotten the deal with Japan,

23
00:01:17,840 --> 00:01:20,399
Speaker 2: let alone the EU. But you know, even if we

24
00:01:20,480 --> 00:01:22,800
Speaker 2: got all those deals sometime in the next three months,

25
00:01:22,800 --> 00:01:25,399
Speaker 2: and typically trade deals take like years to work out,

26
00:01:25,840 --> 00:01:28,560
Speaker 2: there's still the fact of an economic rupture between the

27
00:01:28,560 --> 00:01:30,280
Speaker 2: world's two biggest economies, right.

28
00:01:30,480 --> 00:01:33,760
Speaker 3: I think that's certainly a possibility. The one other thing

29
00:01:33,800 --> 00:01:36,840
Speaker 3: I would say is, so you're right. Stocks are up

30
00:01:36,840 --> 00:01:40,000
Speaker 3: this morning because Bessend has been saying, you know, some

31
00:01:40,120 --> 00:01:44,360
Speaker 3: mildly potentially positive things on this issue. But there is

32
00:01:44,360 --> 00:01:47,400
Speaker 3: still this huge question of who would make the first

33
00:01:47,520 --> 00:01:51,360
Speaker 3: move in this particular standoff. And I think it is

34
00:01:51,400 --> 00:01:55,680
Speaker 3: a standoff. And I think, you know, both respective policy

35
00:01:55,760 --> 00:01:59,400
Speaker 3: making groups here, the Trump administration and the CCP under

36
00:01:59,400 --> 00:02:02,160
Speaker 3: Sheashon Paging, I think they both care about who is

37
00:02:02,240 --> 00:02:06,640
Speaker 3: seen to be making the biggest concession here. So I

38
00:02:06,640 --> 00:02:09,760
Speaker 3: think everyone can reasonably say that we would want some

39
00:02:09,919 --> 00:02:14,000
Speaker 3: sort of I was about to say peace steal between

40
00:02:14,080 --> 00:02:16,959
Speaker 3: China and the US. Peace steal isn't right, some sort

41
00:02:16,960 --> 00:02:20,560
Speaker 3: of reconciliation, but the path to getting there seems like

42
00:02:21,200 --> 00:02:22,760
Speaker 3: very confused and uncertain to me.

43
00:02:22,960 --> 00:02:24,840
Speaker 2: Yeah, there's a lot. I mean, look, people call it

44
00:02:24,840 --> 00:02:26,560
Speaker 2: a trade war, so I don't see why we can't

45
00:02:26,680 --> 00:02:29,720
Speaker 2: have a piece, trade pieceeal, a detent of some sort.

46
00:02:29,960 --> 00:02:32,400
Speaker 2: And look, we both know the stakes, right because the

47
00:02:32,520 --> 00:02:35,840
Speaker 2: US relies substantially on China booth for finished goods of

48
00:02:35,880 --> 00:02:39,200
Speaker 2: all kinds of things that US consumers enjoy, but also

49
00:02:39,280 --> 00:02:43,280
Speaker 2: intermediate goods that are used for actual manufacturing. And we

50
00:02:43,360 --> 00:02:45,960
Speaker 2: also know that at least in the short term, there

51
00:02:46,000 --> 00:02:49,120
Speaker 2: is not some quick substitute for the sheer amount of

52
00:02:49,160 --> 00:02:52,600
Speaker 2: demand that comes from the US consumer. And so we've

53
00:02:52,639 --> 00:02:55,400
Speaker 2: seen all the tiktoks of factories in China, you know,

54
00:02:55,480 --> 00:02:57,040
Speaker 2: trying to figure out ways to go direct to do

55
00:02:57,120 --> 00:03:01,080
Speaker 2: this consumer at least in the short term, economies have

56
00:03:01,160 --> 00:03:04,040
Speaker 2: a lot to lose, it would seem. And so there's

57
00:03:04,040 --> 00:03:06,560
Speaker 2: all this question of like, you know, who blanks first. Anyway,

58
00:03:07,520 --> 00:03:09,200
Speaker 2: there's a POTENTI there, you know, and you just see

59
00:03:09,200 --> 00:03:10,720
Speaker 2: it in the market pricing. There is a lot of

60
00:03:10,760 --> 00:03:16,320
Speaker 2: pain being priced in immediately today, maybe accepted from the

61
00:03:16,360 --> 00:03:17,760
Speaker 2: persistence of this trade war.

62
00:03:18,040 --> 00:03:18,239
Speaker 4: Right.

63
00:03:18,720 --> 00:03:22,239
Speaker 2: Well, I'm very excited. One of my favorite guests, I've

64
00:03:22,240 --> 00:03:24,760
Speaker 2: talked to him, We've talked to him on the podcast before,

65
00:03:25,560 --> 00:03:28,520
Speaker 2: I've talked to him on the TV. Always energetic and

66
00:03:28,600 --> 00:03:31,880
Speaker 2: always has just sort of interesting thoughts, A fun guy

67
00:03:32,040 --> 00:03:34,120
Speaker 2: to talk to, also very serious. We're going to be

68
00:03:34,120 --> 00:03:37,360
Speaker 2: speaking with David Wu. He is the CEO of David

69
00:03:37,400 --> 00:03:40,000
Speaker 2: Wu Unbound, and prior to that, he was the head

70
00:03:40,040 --> 00:03:44,480
Speaker 2: of Global Rates, Currency, Emerging Markets, fixed Income, and Economics

71
00:03:44,560 --> 00:03:47,720
Speaker 2: research at Bank of America. I always want to get

72
00:03:47,800 --> 00:03:50,720
Speaker 2: David's takes on things, So David, thank you so much

73
00:03:50,720 --> 00:03:52,440
Speaker 2: for coming back on odd blots.

74
00:03:52,600 --> 00:03:54,120
Speaker 4: Thanks for having me the pleasure.

75
00:03:54,600 --> 00:03:56,960
Speaker 2: Is this a type of war that we're seeing right

76
00:03:57,000 --> 00:03:59,440
Speaker 2: now that you know, whether trade war? You know, I

77
00:03:59,440 --> 00:04:02,120
Speaker 2: guess it seems like the obvious thing, but like how aggressive,

78
00:04:02,880 --> 00:04:07,840
Speaker 2: how provocative, how combative are Trump's actions against China.

79
00:04:07,960 --> 00:04:10,480
Speaker 5: I think it's very combative. I think this is much

80
00:04:10,520 --> 00:04:13,160
Speaker 5: more than just a trey war. I think this is

81
00:04:13,440 --> 00:04:15,680
Speaker 5: war actually, And then I think, you know, from that

82
00:04:15,760 --> 00:04:18,240
Speaker 5: point of view, is not that surprising the way it

83
00:04:18,320 --> 00:04:21,120
Speaker 5: is gone, because in a way, the whole thing has

84
00:04:21,160 --> 00:04:22,960
Speaker 5: been heating up under Biden.

85
00:04:23,160 --> 00:04:24,520
Speaker 4: I mean, I will tell you, yeah, and.

86
00:04:24,520 --> 00:04:26,560
Speaker 5: I think in a way, you know, it's actually very

87
00:04:26,560 --> 00:04:29,920
Speaker 5: interesting in a way, Trump is picking up where Biden

88
00:04:30,040 --> 00:04:30,560
Speaker 5: left off.

89
00:04:30,600 --> 00:04:32,120
Speaker 2: Who picked up where Trump left off?

90
00:04:32,200 --> 00:04:32,400
Speaker 1: Right?

91
00:04:32,480 --> 00:04:34,520
Speaker 5: Okay, let me let me just take it back from

92
00:04:34,520 --> 00:04:37,479
Speaker 5: you and what I mean, explain better what I meant

93
00:04:37,520 --> 00:04:42,920
Speaker 5: by that sentence. Right, did you remember when Biden became president? Okay,

94
00:04:43,440 --> 00:04:48,120
Speaker 5: Harvard University Belfare Center publish a big report in which

95
00:04:48,160 --> 00:04:52,520
Speaker 5: they did a massive ranking of the technology leaderships across

96
00:04:52,560 --> 00:04:56,120
Speaker 5: the major tech races. Okay, it was a report sponsor

97
00:04:56,160 --> 00:04:58,000
Speaker 5: by Eric Schmid, the former CEO.

98
00:04:57,800 --> 00:05:00,000
Speaker 4: Of Google, who was a big patriot.

99
00:05:00,560 --> 00:05:03,280
Speaker 5: And in this report they come to the conclusion the

100
00:05:03,400 --> 00:05:06,719
Speaker 5: US and China were in basically debt heat in first

101
00:05:06,800 --> 00:05:09,440
Speaker 5: or second place in all the leading technologies in the world.

102
00:05:10,200 --> 00:05:13,600
Speaker 5: And soon after that, Eric Schmid went on a pr

103
00:05:14,000 --> 00:05:18,960
Speaker 5: or political campaign across you know, the Beltway, essentially lobbrying

104
00:05:19,040 --> 00:05:21,839
Speaker 5: every Congressman, every senators who listened to him that this

105
00:05:21,960 --> 00:05:26,040
Speaker 5: is time to basically stop the access of China from

106
00:05:26,240 --> 00:05:29,919
Speaker 5: in advanced technology so that the US has a chance

107
00:05:29,960 --> 00:05:31,799
Speaker 5: to essentially regain the leadership.

108
00:05:32,240 --> 00:05:32,640
Speaker 4: Okay.

109
00:05:32,839 --> 00:05:36,320
Speaker 5: So therefore, under Biden, the most important thing, you know,

110
00:05:36,360 --> 00:05:38,240
Speaker 5: in terms of Visa VI China, it was not so

111
00:05:38,320 --> 00:05:41,520
Speaker 5: much the trade war, but rather they put in punishing

112
00:05:41,600 --> 00:05:44,200
Speaker 5: sanctions in terms of the ability of China to be

113
00:05:44,279 --> 00:05:48,200
Speaker 5: able to access you know, semiconductor advance conductors and in

114
00:05:48,240 --> 00:05:52,440
Speaker 5: manufacturing equipments for advanced conductors. All that was meant to

115
00:05:52,480 --> 00:05:55,560
Speaker 5: basically give the US two to three year basically like

116
00:05:55,680 --> 00:06:00,760
Speaker 5: head start okay in AI, semiciconductors, in automation, robotics, and

117
00:06:00,839 --> 00:06:01,520
Speaker 5: so on and so forth.

118
00:06:02,240 --> 00:06:03,800
Speaker 4: Guess what lessen?

119
00:06:03,839 --> 00:06:07,080
Speaker 5: A month after Trump became president, we had the Deep

120
00:06:07,120 --> 00:06:10,360
Speaker 5: Seek news, the Deep Seat news. Basically it was a

121
00:06:10,440 --> 00:06:13,159
Speaker 5: massive piece of news. I mean, it was a game changer.

122
00:06:13,320 --> 00:06:14,960
Speaker 5: Let me tell you this, I mean Deep Seek News

123
00:06:14,960 --> 00:06:19,960
Speaker 5: for me, is no proof of China's technological prowess, but

124
00:06:20,120 --> 00:06:24,000
Speaker 5: it is proof that AI can be easily copied. All

125
00:06:24,040 --> 00:06:29,760
Speaker 5: of a sudden, overnight, all the sanctions that happened under Biden,

126
00:06:31,200 --> 00:06:35,440
Speaker 5: it was for nothing. Okay, to an extent that if

127
00:06:35,440 --> 00:06:39,400
Speaker 5: these sanctions were designed to protect the monopoly of the

128
00:06:39,480 --> 00:06:43,560
Speaker 5: big US tech companies, okay, all of a sudden, that

129
00:06:43,720 --> 00:06:47,719
Speaker 5: meant nothing, because anything that could be copied is worth

130
00:06:47,960 --> 00:06:51,080
Speaker 5: nothing commercially. And this is the reason why, by the way,

131
00:06:51,200 --> 00:06:54,000
Speaker 5: I know, the data DeepC news came out I shortened

132
00:06:54,000 --> 00:06:56,960
Speaker 5: basically nastac and it's you know, it was a great trade,

133
00:06:57,000 --> 00:06:58,320
Speaker 5: by the way, but I.

134
00:06:58,200 --> 00:06:59,680
Speaker 4: Think that's what it gets down.

135
00:07:00,080 --> 00:07:02,400
Speaker 5: All the China hawks, I mean, Trump has brought a

136
00:07:02,400 --> 00:07:04,760
Speaker 5: lot of China Hawks into his administration. To tell you that,

137
00:07:05,200 --> 00:07:07,320
Speaker 5: for the China Hawks, if they thought that they had

138
00:07:07,320 --> 00:07:10,320
Speaker 5: been more time with China, I think after DeepC news

139
00:07:10,360 --> 00:07:14,600
Speaker 5: came out, literally there was this new sense of urgency.

140
00:07:14,800 --> 00:07:18,440
Speaker 5: We need to basically stop China now. The only way

141
00:07:18,480 --> 00:07:21,760
Speaker 5: they can do that is to bankrupt China economically, because honestly,

142
00:07:21,800 --> 00:07:24,440
Speaker 5: at this point, I mean, let's be honest, when you're

143
00:07:24,440 --> 00:07:28,160
Speaker 5: talking about the one hundred and forty five percent tariff, Yeah,

144
00:07:28,240 --> 00:07:32,440
Speaker 5: you're not engaging the trade war. You're engaging in basically

145
00:07:32,600 --> 00:07:34,680
Speaker 5: economic murder. I mean, that's it. I mean, I don't

146
00:07:34,760 --> 00:07:37,320
Speaker 5: see how China is going to be able to explore

147
00:07:37,520 --> 00:07:40,960
Speaker 5: anything the US with one hundred and forty five percent.

148
00:07:41,600 --> 00:07:44,640
Speaker 5: So I think point of view this to me was,

149
00:07:45,000 --> 00:07:47,600
Speaker 5: I think the so called trade war that we call

150
00:07:47,680 --> 00:07:52,360
Speaker 5: as such really was always intended as an economic blow

151
00:07:52,440 --> 00:07:55,040
Speaker 5: that will be so great to China that China will

152
00:07:55,080 --> 00:07:58,720
Speaker 5: no longer be in a position to threaten New Wes hegemony.

153
00:07:58,960 --> 00:08:01,080
Speaker 5: So again, this is why I said, this is more

154
00:08:01,160 --> 00:08:03,880
Speaker 5: than a trade war. This is much more than a

155
00:08:03,960 --> 00:08:08,239
Speaker 5: trade war. This is meant to protect US hegemony.

156
00:08:07,760 --> 00:08:11,520
Speaker 3: Right, sort of existential in that sense. Let me press

157
00:08:11,520 --> 00:08:13,200
Speaker 3: you on one thing you said. So, you know, you

158
00:08:13,240 --> 00:08:16,040
Speaker 3: mentioned the importance of deep seek and you kind of

159
00:08:16,400 --> 00:08:19,760
Speaker 3: suggested that some of the severity of the action taken

160
00:08:19,920 --> 00:08:23,040
Speaker 3: on China was because of the deep seek threat. But

161
00:08:23,200 --> 00:08:27,360
Speaker 3: I mean, we know that Trump from his campaign was

162
00:08:27,440 --> 00:08:31,000
Speaker 3: going to take a really hardline stance against China. So

163
00:08:31,080 --> 00:08:33,800
Speaker 3: how can you connect deep seek with some of the

164
00:08:33,840 --> 00:08:36,719
Speaker 3: policies that we've seen coming out of the administration. Can

165
00:08:36,760 --> 00:08:38,120
Speaker 3: you make that direct link?

166
00:08:38,520 --> 00:08:40,839
Speaker 4: Crazy? I think that's an excellent question. But let's think

167
00:08:40,880 --> 00:08:41,800
Speaker 4: about this from moan.

168
00:08:42,040 --> 00:08:44,640
Speaker 5: Okay, I've always said, you know, listen, I'm probably the

169
00:08:44,640 --> 00:08:46,720
Speaker 5: only person you know like it's been on your show.

170
00:08:46,720 --> 00:08:50,040
Speaker 5: We've read the back to back, one hundred page you know,

171
00:08:50,120 --> 00:08:52,560
Speaker 5: essentially faced one agreement that was time between Trump and

172
00:08:52,600 --> 00:08:55,400
Speaker 5: the Chinese back in two thousand point I.

173
00:08:55,320 --> 00:08:58,520
Speaker 2: Bet Dan Wong is yeah, the other one, keep going,

174
00:08:58,600 --> 00:08:59,240
Speaker 2: keep going.

175
00:08:59,440 --> 00:09:02,079
Speaker 5: Yeah, tell you this it was probably I mean, I

176
00:09:02,320 --> 00:09:05,360
Speaker 5: have a PhD in international trade from Columbia University, and

177
00:09:05,480 --> 00:09:07,800
Speaker 5: let me tell you this. That trade agreement, in my

178
00:09:07,960 --> 00:09:10,440
Speaker 5: humble opinion, was one of the best trade agreements signed

179
00:09:10,440 --> 00:09:13,520
Speaker 5: between two countries in the last fifty years. And the

180
00:09:13,559 --> 00:09:17,679
Speaker 5: reason was because it was a win win basically deal.

181
00:09:18,440 --> 00:09:20,320
Speaker 5: And if people tend to think, oh, whoa whatever, I mean,

182
00:09:20,720 --> 00:09:22,800
Speaker 5: people didn't read the whole thing. I mean, it's pretty

183
00:09:22,800 --> 00:09:25,840
Speaker 5: amazing what that whole thing actually meant. Now, in my

184
00:09:25,920 --> 00:09:29,680
Speaker 5: humble opinion, the difference between Trump and Biden is whereas

185
00:09:29,800 --> 00:09:33,520
Speaker 5: Biden saw the US China rivalry as largely a zero

186
00:09:33,640 --> 00:09:36,360
Speaker 5: sound game. That is, if China wins, will lose. If

187
00:09:36,400 --> 00:09:39,240
Speaker 5: we win, then China will lose. I think Trump in

188
00:09:39,320 --> 00:09:45,079
Speaker 5: his whole entire career sees things through the lenses of deals.

189
00:09:45,360 --> 00:09:49,160
Speaker 5: And Trump always understands that basically to do a deal,

190
00:09:49,400 --> 00:09:51,800
Speaker 5: there has to be enough for everybody around the table.

191
00:09:52,200 --> 00:09:54,520
Speaker 5: So from that point of view, in my humble opinion,

192
00:09:54,800 --> 00:09:57,840
Speaker 5: if you look back on the first day of Trump's inauguration,

193
00:09:58,400 --> 00:10:00,719
Speaker 5: what do you do this? I still remember, I don't

194
00:10:00,720 --> 00:10:03,240
Speaker 5: remember you guys covered the story. I still remember he

195
00:10:03,280 --> 00:10:06,560
Speaker 5: didn't press conference in the Oval office late at night,

196
00:10:06,720 --> 00:10:09,320
Speaker 5: you know, on the auguration day. And it was just

197
00:10:09,440 --> 00:10:12,960
Speaker 5: when he announced the twenty percent tariff on Canada and

198
00:10:13,080 --> 00:10:18,080
Speaker 5: Mexico over the fentannel, okay, And he was asked during

199
00:10:18,120 --> 00:10:20,719
Speaker 5: that press conference, why not China? You promised to eat

200
00:10:20,760 --> 00:10:23,400
Speaker 5: China hard. So why did you decide to hit Canada

201
00:10:23,480 --> 00:10:26,880
Speaker 5: and Mexico by not China, he asked. His response was, Oh,

202
00:10:27,200 --> 00:10:29,199
Speaker 5: because we hit China pretty hard my first time.

203
00:10:29,200 --> 00:10:30,760
Speaker 4: We're going to give them pass this time.

204
00:10:31,559 --> 00:10:34,320
Speaker 5: It was now until the next day he announced the

205
00:10:34,360 --> 00:10:38,160
Speaker 5: twenty percent for China. And then three weeks later, of

206
00:10:38,160 --> 00:10:40,480
Speaker 5: course we all you know know now like you know,

207
00:10:40,840 --> 00:10:44,000
Speaker 5: basically the tariff was extended for Mexico and Canada and

208
00:10:44,080 --> 00:10:47,840
Speaker 5: China was hit by twenty percent, okay, and then the

209
00:10:47,880 --> 00:10:50,800
Speaker 5: list goes on and off. In my humble opinion, you

210
00:10:50,840 --> 00:10:53,480
Speaker 5: know again, we were sitting here and thinking that Trump

211
00:10:53,559 --> 00:10:54,560
Speaker 5: is in the driver's seat.

212
00:10:55,080 --> 00:10:55,440
Speaker 4: I don't.

213
00:10:55,679 --> 00:10:57,800
Speaker 5: I think at this point Trump is no longer a

214
00:10:57,880 --> 00:11:00,199
Speaker 5: driver's seat to the extend, einting the Chin in a

215
00:11:00,320 --> 00:11:02,600
Speaker 5: hawks or actually in a private seat.

216
00:11:03,200 --> 00:11:03,679
Speaker 4: I think the.

217
00:11:03,720 --> 00:11:07,720
Speaker 5: China Hawks are maneuvering him in a position that he's

218
00:11:07,760 --> 00:11:11,800
Speaker 5: increasingly struggling to back away from. So it gets more extreme,

219
00:11:12,360 --> 00:11:14,439
Speaker 5: and that is a different story. This is why, to me,

220
00:11:14,600 --> 00:11:17,960
Speaker 5: this is not just about Pete Navarro versus basically Scott Besson.

221
00:11:18,600 --> 00:11:22,480
Speaker 5: This is about the China Hawks represented by Vance by

222
00:11:22,520 --> 00:11:26,200
Speaker 5: basically rule bio by Waltz and all of them actually,

223
00:11:26,640 --> 00:11:28,760
Speaker 5: So from that point of view, again, this is this

224
00:11:28,840 --> 00:11:31,520
Speaker 5: is what we're talking about. I think Trump really wanted.

225
00:11:31,720 --> 00:11:34,400
Speaker 5: I think Trump was so eager to do a TikTok

226
00:11:34,440 --> 00:11:36,760
Speaker 5: deal on the first day that he spoke with basically

227
00:11:36,800 --> 00:11:39,920
Speaker 5: Jijing being things We're going to go very differently. But

228
00:11:40,000 --> 00:11:43,120
Speaker 5: I think with a series of mistakes that have now

229
00:11:43,280 --> 00:11:45,800
Speaker 5: allowed the China Hawks to take over, and I think

230
00:11:45,840 --> 00:11:48,520
Speaker 5: Trump now in a way is a little bit powerless,

231
00:11:48,600 --> 00:11:50,400
Speaker 5: and I think, you know, it's we can talk about

232
00:11:50,440 --> 00:11:53,240
Speaker 5: the process and the sequencing, but I think this is

233
00:11:53,280 --> 00:11:56,040
Speaker 5: where I'm at right now, which is is not entirely

234
00:11:56,120 --> 00:11:57,120
Speaker 5: up to Trump anymore.

235
00:12:12,640 --> 00:12:15,240
Speaker 2: So, first of all, I just want to say I

236
00:12:15,320 --> 00:12:19,599
Speaker 2: appreciate the out of consensus perspective, because I would describe

237
00:12:19,640 --> 00:12:25,120
Speaker 2: the consensus perspective is the only active force that happens

238
00:12:25,200 --> 00:12:28,439
Speaker 2: or what's happening in Trump's brain. And so, first of all,

239
00:12:28,440 --> 00:12:31,520
Speaker 2: you're disagreeing with that, and I respect that. Second of all,

240
00:12:32,000 --> 00:12:35,440
Speaker 2: you know, from my perspective, Trump strikes. I know he

241
00:12:35,640 --> 00:12:39,200
Speaker 2: likes to do deals, and he loves talking about doing deals,

242
00:12:39,280 --> 00:12:43,240
Speaker 2: et cetera. When he pulled that chart out on Liberation

243
00:12:43,400 --> 00:12:46,679
Speaker 2: Day April second and basically slammed every country in the world.

244
00:12:47,080 --> 00:12:49,800
Speaker 2: This did not come across to me as someone who

245
00:12:49,920 --> 00:12:54,080
Speaker 2: likes positive some deals. This strikes me as someone who

246
00:12:54,120 --> 00:12:57,040
Speaker 2: finds any trade gap is per se bad, that if

247
00:12:57,080 --> 00:12:59,520
Speaker 2: you're running a trade surplus with the United States, you

248
00:12:59,559 --> 00:13:03,120
Speaker 2: must be you must be relative, and so like, give

249
00:13:03,120 --> 00:13:05,480
Speaker 2: me the counter argument here. Also, you know this idea.

250
00:13:05,559 --> 00:13:07,960
Speaker 2: You know people have been using the good Czar bad

251
00:13:08,040 --> 00:13:11,720
Speaker 2: Blowyers characterization. Oh, it's the it's the Navarros of the world.

252
00:13:11,800 --> 00:13:14,680
Speaker 2: It's the vances Trump is being blah blah blah. And

253
00:13:14,920 --> 00:13:17,559
Speaker 2: I tend to not find those things. But just convince

254
00:13:17,600 --> 00:13:20,520
Speaker 2: me that Trump is not a zerosome thinker when it

255
00:13:20,520 --> 00:13:21,480
Speaker 2: comes to convince you.

256
00:13:21,520 --> 00:13:22,959
Speaker 5: And by the way, I want to say this, there's

257
00:13:22,960 --> 00:13:25,760
Speaker 5: a big difference between China versus everybody else.

258
00:13:25,880 --> 00:13:27,600
Speaker 4: Okay, I think Trump.

259
00:13:27,360 --> 00:13:30,680
Speaker 5: Understands that everybody else he thought that the US is

260
00:13:30,679 --> 00:13:32,880
Speaker 5: so big he can just pushing them around. I think

261
00:13:33,000 --> 00:13:35,720
Speaker 5: China is a very different story. Just think about this

262
00:13:35,760 --> 00:13:39,719
Speaker 5: for a moment. The day that he unleash whatever on

263
00:13:39,960 --> 00:13:44,280
Speaker 5: I mean, whatever the time schedule on a liberation there.

264
00:13:44,960 --> 00:13:48,360
Speaker 4: Yeah, China was only hit with a twenty five percent. Yeah,

265
00:13:48,360 --> 00:13:48,800
Speaker 4: that's true.

266
00:13:48,880 --> 00:13:51,200
Speaker 5: Which is actually right in the middle of the range.

267
00:13:51,240 --> 00:13:54,360
Speaker 5: By the way, it's not like he China thirty percent.

268
00:13:54,480 --> 00:13:56,640
Speaker 5: I mean, listen, I mean, I mean Thailand was twenty

269
00:13:56,720 --> 00:14:00,240
Speaker 5: nine person in Switzerland thirty five percent. You can say,

270
00:14:00,320 --> 00:14:02,560
Speaker 5: look across, you know, I mean, China was actually doing

271
00:14:02,559 --> 00:14:05,439
Speaker 5: the low. And by the way, if you think about

272
00:14:05,440 --> 00:14:07,720
Speaker 5: that for a moment, I think that was a sign

273
00:14:08,280 --> 00:14:10,599
Speaker 5: that Trump did not you know, I mean, because I

274
00:14:10,640 --> 00:14:13,319
Speaker 5: mean again, you know, I think Trump understands depending on

275
00:14:13,400 --> 00:14:15,719
Speaker 5: who you're dealing with here, if you're dealing with a

276
00:14:15,760 --> 00:14:18,600
Speaker 5: little guy, you're gonna basically like literally knock the other

277
00:14:18,679 --> 00:14:21,200
Speaker 5: guy dead. And I think Trump feels like, you know,

278
00:14:21,240 --> 00:14:22,800
Speaker 5: this is the reason why I mean, I'm you know,

279
00:14:22,880 --> 00:14:27,160
Speaker 5: I think Mexico is a great example because Mexico, unlike

280
00:14:27,320 --> 00:14:32,400
Speaker 5: any other country, has literally been bending forward backward to

281
00:14:32,480 --> 00:14:34,960
Speaker 5: meet Trump, like forget about half the weigh like ninety

282
00:14:35,080 --> 00:14:37,560
Speaker 5: nine percent of the way. I thought Trump should have

283
00:14:37,720 --> 00:14:41,000
Speaker 5: rented a deal to basically shining bomb literally like three

284
00:14:41,040 --> 00:14:45,240
Speaker 5: weeks into his presidency, and he didn't. And the reason

285
00:14:45,360 --> 00:14:49,680
Speaker 5: is because apparently he saw Mexico as being a push around. Okay,

286
00:14:50,160 --> 00:14:52,600
Speaker 5: was China, I think is a different story. So I think,

287
00:14:52,640 --> 00:14:56,000
Speaker 5: you know, we cannot basically apply the same logic to

288
00:14:56,000 --> 00:14:58,240
Speaker 5: what Trump is saying. But you know what's interesting though,

289
00:14:58,480 --> 00:15:01,000
Speaker 5: what is interesting is the fire that as of today,

290
00:15:01,120 --> 00:15:04,200
Speaker 5: right now, as we speak, if I look at you know,

291
00:15:04,440 --> 00:15:07,680
Speaker 5: like you know, yesterday, I was, I mean, I didn't

292
00:15:07,720 --> 00:15:09,760
Speaker 5: you know, as you know, I've got a YouTube channel now,

293
00:15:09,920 --> 00:15:12,640
Speaker 5: you know, and and I was trying to basic the

294
00:15:12,800 --> 00:15:15,520
Speaker 5: I'm trying to upgrade my lighting. So I wanted to

295
00:15:15,520 --> 00:15:18,000
Speaker 5: buy this very expensive light. This is a very high

296
00:15:18,080 --> 00:15:20,120
Speaker 5: end lights to have manufacturing in China.

297
00:15:20,160 --> 00:15:22,760
Speaker 3: Well, you need one of those one of those circle lights,

298
00:15:22,880 --> 00:15:26,080
Speaker 3: like like a ring light, like a proper, proper influence

299
00:15:26,200 --> 00:15:27,080
Speaker 3: much more than a ring line.

300
00:15:27,080 --> 00:15:27,360
Speaker 4: I'm talking.

301
00:15:27,480 --> 00:15:30,520
Speaker 5: This is a professional basicly spotlight, right, So this is

302
00:15:30,560 --> 00:15:33,040
Speaker 5: a very high in case you don't know, like literally

303
00:15:33,120 --> 00:15:36,720
Speaker 5: ninety percent of the high end spotlights now are manufacturing China. Okay,

304
00:15:36,720 --> 00:15:38,440
Speaker 5: I mean that that's just that's just a factor, right,

305
00:15:38,440 --> 00:15:40,160
Speaker 5: So they don't just make a low end stuff.

306
00:15:40,240 --> 00:15:41,440
Speaker 4: This is really high end stuff.

307
00:15:41,680 --> 00:15:43,400
Speaker 5: And you know, as you know, I live in Israel now,

308
00:15:43,760 --> 00:15:45,720
Speaker 5: and I mean there's no inventory of this light in

309
00:15:45,800 --> 00:15:48,200
Speaker 5: all of Israel. I literally like got in touch with

310
00:15:48,240 --> 00:15:51,880
Speaker 5: every store the importer. Nothing, So I decided to call

311
00:15:51,960 --> 00:15:55,200
Speaker 5: up be An H in New York. Of course they

312
00:15:55,320 --> 00:15:58,600
Speaker 5: have it in stock, even though it's from China. And

313
00:15:58,680 --> 00:16:02,000
Speaker 5: guess what it costs. Literally have the price of what

314
00:16:02,080 --> 00:16:04,760
Speaker 5: I wouldn't paid if I bought the like in Israel. Unfortunately,

315
00:16:04,760 --> 00:16:07,880
Speaker 5: they don't have it in Israel anyway. So I was

316
00:16:07,920 --> 00:16:09,680
Speaker 5: asking to be and H guy. So wal, no, listen,

317
00:16:09,760 --> 00:16:12,120
Speaker 5: what about the tariff? He said, well, you know, listen,

318
00:16:12,320 --> 00:16:16,080
Speaker 5: we're not raising prices until we've actually depleted art stock.

319
00:16:17,160 --> 00:16:19,200
Speaker 5: But the point I'm trying to basically tell you is

320
00:16:19,240 --> 00:16:23,480
Speaker 5: like Americans have not even begun to feel the even

321
00:16:23,560 --> 00:16:26,440
Speaker 5: iota of the tariff. I mean, the stock market obviously

322
00:16:26,480 --> 00:16:28,040
Speaker 5: has gone down a bit, that kind of thing, but

323
00:16:28,160 --> 00:16:28,960
Speaker 5: it's like nothing.

324
00:16:29,200 --> 00:16:29,920
Speaker 4: I mean, I think.

325
00:16:29,800 --> 00:16:33,600
Speaker 5: People don't realize what this really means, because right now

326
00:16:33,640 --> 00:16:37,000
Speaker 5: what's happening is that the inventory in the system. And

327
00:16:37,040 --> 00:16:39,360
Speaker 5: then there's no doubt inventory got built up in Q

328
00:16:39,440 --> 00:16:42,160
Speaker 5: one because a lot of companies anticipated the tariff increase,

329
00:16:42,520 --> 00:16:45,360
Speaker 5: that is providing a bit of a buffer. Wait until

330
00:16:45,640 --> 00:16:49,640
Speaker 5: we get into June when prices either will go up

331
00:16:50,120 --> 00:16:52,200
Speaker 5: that there will be no stock to the extent that

332
00:16:52,400 --> 00:16:54,520
Speaker 5: just you know, whatever you want to basically buy simply

333
00:16:54,520 --> 00:16:57,520
Speaker 5: not available. I don't even know how Hollywood can basically

334
00:16:57,680 --> 00:17:00,680
Speaker 5: to do with They're lighting without Chinese lights right now

335
00:17:00,680 --> 00:17:03,280
Speaker 5: at this point, because there's very low degree of substitutability.

336
00:17:03,600 --> 00:17:05,760
Speaker 5: But the point here is that I think, you know,

337
00:17:05,960 --> 00:17:08,920
Speaker 5: in a way, I think you know, the pain is

338
00:17:09,080 --> 00:17:11,480
Speaker 5: like absolutely, and I think this is where Trump is

339
00:17:11,640 --> 00:17:15,640
Speaker 5: very missing formed by the way, I truly believe Trump

340
00:17:15,720 --> 00:17:18,760
Speaker 5: is surrounded by some really terrible advisors who at least

341
00:17:18,760 --> 00:17:22,040
Speaker 5: didn't tell him the full story, because when it comes

342
00:17:22,080 --> 00:17:23,680
Speaker 5: to the trade war, and I can just tell you,

343
00:17:23,760 --> 00:17:26,160
Speaker 5: I mean, I think that every step of the way,

344
00:17:26,280 --> 00:17:30,280
Speaker 5: I think, you know, they misfired. For one thing, I

345
00:17:30,320 --> 00:17:33,159
Speaker 5: think the presumption that tariff was not going to be

346
00:17:33,200 --> 00:17:36,720
Speaker 5: inflationary was I don't know what they got that from,

347
00:17:36,760 --> 00:17:38,280
Speaker 5: and I'll tell you where they got that from, by

348
00:17:38,320 --> 00:17:42,400
Speaker 5: the way, And that was perhaps the biggest, biggest, basically

349
00:17:42,840 --> 00:17:46,080
Speaker 5: you know, essential, the assumption that we're making when they

350
00:17:46,119 --> 00:17:49,160
Speaker 5: basically unleashed this trade war because Trump figured that well,

351
00:17:49,359 --> 00:17:52,800
Speaker 5: first time trade war didn't have any impact on prices,

352
00:17:52,840 --> 00:17:55,800
Speaker 5: so he expected this time the same to happen as well,

353
00:17:56,080 --> 00:17:59,960
Speaker 5: and that unfortunately, I don't care where Pritnavar got his PhD.

354
00:18:00,200 --> 00:18:03,000
Speaker 5: Is worth nothing. His degree is not worth a piece

355
00:18:03,000 --> 00:18:05,159
Speaker 5: of papers written on. But let me tell you what.

356
00:18:06,040 --> 00:18:11,000
Speaker 5: The reason why the inflationary effect associated with Trump's trade

357
00:18:11,000 --> 00:18:15,920
Speaker 5: War one was so limited was because Chinese companies were

358
00:18:15,960 --> 00:18:19,480
Speaker 5: able to set up shop very quickly somewhere else in

359
00:18:19,520 --> 00:18:22,359
Speaker 5: the Philippines, Indonesia.

360
00:18:21,400 --> 00:18:22,400
Speaker 4: And whatever they want.

361
00:18:22,640 --> 00:18:26,320
Speaker 5: They were able to circumvent the US tariff by continuing

362
00:18:26,359 --> 00:18:28,840
Speaker 5: to export to the US at whatever price they were

363
00:18:28,880 --> 00:18:32,600
Speaker 5: selling previously the US. So in a way, if there

364
00:18:32,720 --> 00:18:36,080
Speaker 5: was very little price impact was because Chinese companies were

365
00:18:36,160 --> 00:18:40,000
Speaker 5: able to circumvent the tiff. This time, the entire tariff

366
00:18:40,320 --> 00:18:44,439
Speaker 5: is designed to leave Chinese companies with no place to hide.

367
00:18:44,480 --> 00:18:47,720
Speaker 5: As you know, like the only reason why like Trump

368
00:18:47,760 --> 00:18:51,840
Speaker 5: hasn't take out the whatever even the fists in basically,

369
00:18:51,960 --> 00:18:55,400
Speaker 5: I mean, you know, hasn't basically did not apply additional

370
00:18:55,560 --> 00:18:58,840
Speaker 5: reciprocal tariff on Mexico is because Mexico had already agreed

371
00:18:59,359 --> 00:19:03,120
Speaker 5: to adopt the same US tariff on Chinese imports. So

372
00:19:03,240 --> 00:19:06,560
Speaker 5: this time, no, this is the why Southeast Asia got

373
00:19:06,640 --> 00:19:09,200
Speaker 5: hit really hard this time, you know, in the reciprocal

374
00:19:09,280 --> 00:19:13,080
Speaker 5: terraff It's because precisely, Navarro and others. They understand they

375
00:19:13,119 --> 00:19:15,840
Speaker 5: need to. They want to close the back doors to China,

376
00:19:15,920 --> 00:19:18,920
Speaker 5: so this time there is no cushion in the system.

377
00:19:19,160 --> 00:19:20,000
Speaker 4: You're gonna see.

378
00:19:19,800 --> 00:19:23,399
Speaker 5: One pass through in terms of prices. In fact, the

379
00:19:23,480 --> 00:19:26,840
Speaker 5: Chinese government apparently has decided that the more passed thorugh

380
00:19:27,160 --> 00:19:30,280
Speaker 5: the better. The reason being that, you know, we all know.

381
00:19:30,359 --> 00:19:32,400
Speaker 5: Only a couple of weeks ago, I think the Chinese

382
00:19:32,560 --> 00:19:36,520
Speaker 5: uh in Beijing, Chinese officials met with Costco, with Walmart

383
00:19:36,720 --> 00:19:40,639
Speaker 5: and warned them against applying pressure on Chinese suppliers to

384
00:19:40,720 --> 00:19:43,600
Speaker 5: basically to take the hit on terror. The reason is

385
00:19:43,640 --> 00:19:46,840
Speaker 5: because I think from the Chinese perspective, they think that

386
00:19:47,200 --> 00:19:50,920
Speaker 5: once the price effect associated with the tariff is unleashed

387
00:19:50,960 --> 00:19:54,359
Speaker 5: onto the US economy, onto the US consumers, it's going

388
00:19:54,440 --> 00:19:57,040
Speaker 5: to get so bad that Trump will have no choice

389
00:19:57,280 --> 00:20:00,239
Speaker 5: but to basically stand down then. And I think this

390
00:20:00,280 --> 00:20:03,280
Speaker 5: is the reason why, in a way I said that

391
00:20:03,320 --> 00:20:05,600
Speaker 5: we're right now in round two of this trade war.

392
00:20:05,680 --> 00:20:07,720
Speaker 5: I think the round one basically ended the last week.

393
00:20:07,920 --> 00:20:11,000
Speaker 5: We're now round two Round two. You know, you could

394
00:20:11,119 --> 00:20:14,600
Speaker 5: argue that China enjoyed the advantage in so far that

395
00:20:14,800 --> 00:20:17,199
Speaker 5: time is on their side, and I think, you know,

396
00:20:17,280 --> 00:20:18,440
Speaker 5: I think things are going to give wrong.

397
00:20:19,000 --> 00:20:22,600
Speaker 3: I have many questions, but just to start with, okay,

398
00:20:22,920 --> 00:20:26,800
Speaker 3: why should I care whether it's Trump or his policy

399
00:20:26,840 --> 00:20:30,560
Speaker 3: advisors being you know, uber hawkish on China. Why does

400
00:20:30,600 --> 00:20:33,280
Speaker 3: that matter when the policy result seems to be, you know,

401
00:20:33,359 --> 00:20:36,560
Speaker 3: pretty much the same. And then secondly, you talked about

402
00:20:36,600 --> 00:20:40,600
Speaker 3: the pain potentially coming this summer. We've seen a lot

403
00:20:40,600 --> 00:20:43,280
Speaker 3: of people in markets start to talk about the idea

404
00:20:43,320 --> 00:20:45,920
Speaker 3: that maybe there isn't a Trump put right, like, maybe

405
00:20:46,000 --> 00:20:49,560
Speaker 3: he doesn't care about stock prices this time around. So

406
00:20:49,640 --> 00:20:53,000
Speaker 3: what exactly is going to be the catalyst for some

407
00:20:53,040 --> 00:20:54,480
Speaker 3: sort of detent.

408
00:20:55,119 --> 00:20:57,159
Speaker 5: Yeah, Cracie, I think it's a very good point. But

409
00:20:57,720 --> 00:21:01,760
Speaker 5: you see, again, this is whether Trump or somebody else

410
00:21:02,240 --> 00:21:04,120
Speaker 5: around him, I think it makes a very big difference

411
00:21:04,119 --> 00:21:06,760
Speaker 5: in so far in this respect, let me basically take

412
00:21:06,800 --> 00:21:08,679
Speaker 5: it back for a second and you would allow me,

413
00:21:08,720 --> 00:21:11,360
Speaker 5: because I think, please, this is connected to a lot

414
00:21:11,359 --> 00:21:12,400
Speaker 5: of other things start.

415
00:21:12,160 --> 00:21:13,080
Speaker 4: On the table right now.

416
00:21:13,600 --> 00:21:16,720
Speaker 5: For example, I thought it was a huge mistake that

417
00:21:16,800 --> 00:21:21,000
Speaker 5: Trump started his presidency by making stopping the war in

418
00:21:21,119 --> 00:21:25,600
Speaker 5: Ukraine a top priority. Okay, he thought that he was

419
00:21:25,640 --> 00:21:27,000
Speaker 5: going to be able to stop in twenty four hours.

420
00:21:27,040 --> 00:21:29,040
Speaker 5: Forget about twenty fourth let to say he was indeed

421
00:21:29,080 --> 00:21:32,320
Speaker 5: being sarcastic. But you know, I can tell you this.

422
00:21:32,400 --> 00:21:35,600
Speaker 5: At the beginning of his presidency, polymarket was giving a

423
00:21:35,760 --> 00:21:38,199
Speaker 5: seventy percent chance that he was going to stop the

424
00:21:38,240 --> 00:21:41,720
Speaker 5: war basically by one hundred days into his presidency, and

425
00:21:41,720 --> 00:21:43,960
Speaker 5: now it's right now currently less than three percent.

426
00:21:44,040 --> 00:21:44,320
Speaker 4: Chants.

427
00:21:44,560 --> 00:21:47,679
Speaker 5: Now, this is why Trump went on this you know,

428
00:21:48,119 --> 00:21:52,960
Speaker 5: trauma offensive with Putin, that he appeased Putin and literally

429
00:21:53,160 --> 00:21:55,400
Speaker 5: was you know, I'm not going to use any more

430
00:21:55,480 --> 00:21:58,560
Speaker 5: exaggerated adjective at this point, but let's put it this way.

431
00:21:58,920 --> 00:22:01,800
Speaker 5: Trump didn't understand that there was no way in hell

432
00:22:02,560 --> 00:22:06,680
Speaker 5: that Putin was going to agree to a ceasefire without

433
00:22:06,720 --> 00:22:10,200
Speaker 5: having taken control of the rest of Donskue, where they've

434
00:22:10,200 --> 00:22:13,960
Speaker 5: been stuck in basically very very thrown out battles for

435
00:22:14,040 --> 00:22:14,919
Speaker 5: the last six months.

436
00:22:15,040 --> 00:22:16,080
Speaker 4: But it doesn't really matter.

437
00:22:16,320 --> 00:22:19,480
Speaker 5: The point here is that I think three months in

438
00:22:19,600 --> 00:22:23,280
Speaker 5: his presidency, Trump has got nothing to show for visa

439
00:22:23,359 --> 00:22:28,879
Speaker 5: the Ukraine, even though he has rupture transatlantic relations. He

440
00:22:29,000 --> 00:22:32,720
Speaker 5: has sold Ukraine down the river, and he's got nothing

441
00:22:32,760 --> 00:22:36,359
Speaker 5: to show for and Putin is not buying it. Guess

442
00:22:36,440 --> 00:22:39,480
Speaker 5: what At this point, in my humble opinion, Trump has

443
00:22:39,560 --> 00:22:43,399
Speaker 5: one of two choices. He could either pivot by getting

444
00:22:43,640 --> 00:22:46,840
Speaker 5: much tougher with Putin. Okay, so you see an increase

445
00:22:46,880 --> 00:22:51,360
Speaker 5: in geopolitical risk in bullish gold, or that he has

446
00:22:51,400 --> 00:22:54,720
Speaker 5: to go even tougher in China because at this point,

447
00:22:54,920 --> 00:22:56,200
Speaker 5: you know what, you cannot be.

448
00:22:56,240 --> 00:22:59,520
Speaker 4: Seen as being weak on both Russia and China. Forget

449
00:22:59,560 --> 00:23:00,000
Speaker 4: about you.

450
00:23:00,520 --> 00:23:04,080
Speaker 5: I mean, it's pretty amazing what basically Steve Wikoff is

451
00:23:04,119 --> 00:23:08,360
Speaker 5: now proposing. By the way, capping Iranian Richmond at three

452
00:23:08,400 --> 00:23:11,600
Speaker 5: point sixty seven percent was the key component of the

453
00:23:11,640 --> 00:23:15,040
Speaker 5: Obama you clear agreement with the Iran that Trump walked

454
00:23:15,040 --> 00:23:19,320
Speaker 5: away from. So Trump is like going super dubbish rat

455
00:23:19,400 --> 00:23:24,280
Speaker 5: shot a basically in Iran. Guess what If he wants

456
00:23:24,320 --> 00:23:27,679
Speaker 5: to continue that dubbish approach, then he will have to

457
00:23:27,800 --> 00:23:31,000
Speaker 5: throw some red meat to the China Hawks within this administration,

458
00:23:31,240 --> 00:23:34,960
Speaker 5: which means getting tougher on China. In my view, there

459
00:23:35,000 --> 00:23:37,160
Speaker 5: is very little I mean, I you know, I feel

460
00:23:37,200 --> 00:23:40,159
Speaker 5: sorry for Scott Beston. Guess Scott's a very nice Scott. No, Scott,

461
00:23:40,280 --> 00:23:42,719
Speaker 5: Scott is not a China Hawk. I wouldn't say Scott

462
00:23:42,760 --> 00:23:45,600
Speaker 5: is a China hawk. He's certainly you know, he he

463
00:23:45,640 --> 00:23:48,000
Speaker 5: doesn't hate China in that sense, but there are a

464
00:23:48,000 --> 00:23:50,600
Speaker 5: lot of people within the administrations who think that this

465
00:23:50,720 --> 00:23:53,960
Speaker 5: is the time to destroy the Chinese economy once for all, right,

466
00:23:54,200 --> 00:23:56,639
Speaker 5: Because the point here is it's not just about the

467
00:23:56,680 --> 00:23:59,600
Speaker 5: fact that while Chinese export to the US, it's probably

468
00:23:59,600 --> 00:24:01,920
Speaker 5: around five percent of Chinese GDP if you look at

469
00:24:01,960 --> 00:24:04,560
Speaker 5: both the wrect and indirect you know, forty percent of

470
00:24:04,640 --> 00:24:07,880
Speaker 5: Chinese industrial production. But more important is the fact that

471
00:24:08,000 --> 00:24:10,959
Speaker 5: the Chinese economies already on his knees, you know, forty

472
00:24:11,080 --> 00:24:16,639
Speaker 5: percent of GDP's investment. If we can someholp decimate China's export,

473
00:24:16,880 --> 00:24:20,800
Speaker 5: then we can basically bankrupt their business model, and then

474
00:24:21,000 --> 00:24:22,800
Speaker 5: you know, the whole economy goes into the recession and

475
00:24:22,840 --> 00:24:24,040
Speaker 5: who knows what happens.

476
00:24:23,720 --> 00:24:25,239
Speaker 4: And then they will be able to play catch up

477
00:24:25,240 --> 00:24:25,720
Speaker 4: with us.

478
00:24:26,080 --> 00:24:28,200
Speaker 5: So what I'm telling you is that, in fact, actually

479
00:24:28,240 --> 00:24:31,280
Speaker 5: it is interesting because you only win Trump can actually

480
00:24:31,359 --> 00:24:34,880
Speaker 5: keep going with this trade war by getting the support

481
00:24:34,920 --> 00:24:37,119
Speaker 5: from the general public, from Congress and say you know

482
00:24:37,160 --> 00:24:41,640
Speaker 5: what this is about China. Nobody right now will say,

483
00:24:41,640 --> 00:24:44,640
Speaker 5: oh wow, let's you know, let's be nicer to the Chinese,

484
00:24:44,760 --> 00:24:47,359
Speaker 5: because right now, anybody who stands up to the Chinese,

485
00:24:47,400 --> 00:24:50,560
Speaker 5: they're seen as traders right away. And that to me

486
00:24:50,680 --> 00:24:52,760
Speaker 5: is the most interesting part of the story, which is

487
00:24:52,800 --> 00:24:56,840
Speaker 5: that I think the China Hawks in many ways have prevailed,

488
00:24:57,440 --> 00:25:01,040
Speaker 5: and Trump right now is having two essentially see the

489
00:25:01,119 --> 00:25:02,960
Speaker 5: grounded that because in a way, he's got nothing to

490
00:25:03,000 --> 00:25:05,440
Speaker 5: show for right now, and then he wants to keep

491
00:25:05,440 --> 00:25:07,280
Speaker 5: the trade work going. The only way you can do

492
00:25:07,320 --> 00:25:09,160
Speaker 5: that is by saying this is about China.

493
00:25:09,280 --> 00:25:12,200
Speaker 3: Right So, just on the second part of the question,

494
00:25:12,280 --> 00:25:15,679
Speaker 3: then what is the catalyst for a detente and is it,

495
00:25:15,760 --> 00:25:17,880
Speaker 3: you know, some sort of policy win for the Trump

496
00:25:17,920 --> 00:25:21,520
Speaker 3: administration that maybe allows him to back down a little

497
00:25:21,520 --> 00:25:24,359
Speaker 3: bit on behalf of the China Hawks. I guess I

498
00:25:24,400 --> 00:25:24,960
Speaker 3: think you know that.

499
00:25:25,080 --> 00:25:28,480
Speaker 5: I mean political actually write a very interesting story answerably

500
00:25:28,560 --> 00:25:31,359
Speaker 5: on Friday Saturday, Okay, which I think makes sense. I mean,

501
00:25:31,400 --> 00:25:34,200
Speaker 5: I don't believe everything they say, but in this particular case,

502
00:25:34,240 --> 00:25:36,280
Speaker 5: I think it sort of makes some sense, which is

503
00:25:36,320 --> 00:25:40,240
Speaker 5: that forget about like Trump and she are not talking

504
00:25:40,800 --> 00:25:43,480
Speaker 5: like even if back channel is not working. The one

505
00:25:43,560 --> 00:25:46,960
Speaker 5: reason is interesting because Trump wants to basically manage the

506
00:25:47,119 --> 00:25:49,800
Speaker 5: entire process on his own. He wants to talk to

507
00:25:49,880 --> 00:25:52,640
Speaker 5: she think, think directly. This is why he doesn't want

508
00:25:52,720 --> 00:25:55,320
Speaker 5: to send people to China, talk to the Chinese. He

509
00:25:55,400 --> 00:25:57,000
Speaker 5: wants to get on the phone with she didn't think

510
00:25:57,040 --> 00:25:58,720
Speaker 5: and she think right now? Is not returning the call?

511
00:25:58,800 --> 00:26:01,080
Speaker 5: Well right, it doesn't want to talk, okay, And I

512
00:26:01,119 --> 00:26:04,600
Speaker 5: can perfectly understand why, by the way, but interesting things

513
00:26:04,760 --> 00:26:08,800
Speaker 5: I think Trump listen. Trump is very suspicious of everybody

514
00:26:08,880 --> 00:26:10,919
Speaker 5: around him, including Rubio by the way, but just think

515
00:26:10,960 --> 00:26:13,879
Speaker 5: about this, you ask yourself Steve Wikoff, why is Steve

516
00:26:13,920 --> 00:26:18,160
Speaker 5: Wikoff like the hardest working man in the Trump administration.

517
00:26:18,280 --> 00:26:21,359
Speaker 5: This is the man who has already met with Putin

518
00:26:21,400 --> 00:26:24,520
Speaker 5: three times. He's the guy who basically met with the

519
00:26:24,520 --> 00:26:28,680
Speaker 5: Iranians twice. He is the guy who basically negotiated the

520
00:26:28,680 --> 00:26:32,080
Speaker 5: the cease fire Gaza. This guy seems to be the

521
00:26:32,200 --> 00:26:36,280
Speaker 5: unofficial Secretary of State. In my humble opinion, the reason

522
00:26:36,280 --> 00:26:40,760
Speaker 5: why Steve Wikoff is everywhere is not because it's not

523
00:26:40,840 --> 00:26:44,800
Speaker 5: a reflection of his diplomatic savvy, but because Trump trusts him.

524
00:26:45,160 --> 00:26:49,000
Speaker 5: Because guess what, I think he's no more than Trump's messenger.

525
00:26:50,119 --> 00:26:52,120
Speaker 5: And so from that point of view, because Trump doesn't

526
00:26:52,119 --> 00:26:55,240
Speaker 5: trust anybody Trump. The fact that Steve Wikoff is so

527
00:26:55,320 --> 00:26:57,720
Speaker 5: prominent means that Trump is running US foreign policy or

528
00:26:57,760 --> 00:27:00,480
Speaker 5: by himself. And I think this is going to be

529
00:27:00,520 --> 00:27:15,080
Speaker 5: specially so in terms of discussion negotiation with the Chinese.

530
00:27:19,440 --> 00:27:22,920
Speaker 2: Yeah, Steve wouldcof He's a real estate guy from New York.

531
00:27:23,040 --> 00:27:25,159
Speaker 2: So he does seem to like he doesn't have a

532
00:27:25,160 --> 00:27:27,959
Speaker 2: real diplomatic background. He's a real estate guy in New

533
00:27:28,040 --> 00:27:31,639
Speaker 2: York who's now the uh Special Envoy to the Middle East.

534
00:27:31,920 --> 00:27:35,200
Speaker 2: And so I'm not surprised that maybe Uh Trump sees

535
00:27:35,240 --> 00:27:36,000
Speaker 2: him as the best.

536
00:27:36,040 --> 00:27:39,359
Speaker 5: Now the special period. He's the presidential He's not just

537
00:27:39,440 --> 00:27:42,120
Speaker 5: a special envoy for the Middle East. His title now

538
00:27:42,160 --> 00:27:43,040
Speaker 5: is a special Envoy.

539
00:27:43,240 --> 00:27:47,359
Speaker 2: But it does seem like Trump himself, as you say,

540
00:27:47,440 --> 00:27:50,280
Speaker 2: like he wants to shake she's hand. He I mean

541
00:27:50,320 --> 00:27:52,920
Speaker 2: he did. He went to Singapore right in the first

542
00:27:52,920 --> 00:27:56,560
Speaker 2: administration Kim Jong un, right, and like this was like

543
00:27:56,840 --> 00:27:59,720
Speaker 2: what he lives for, right, This is what really getshim excited.

544
00:27:59,840 --> 00:28:04,560
Speaker 2: The opportunity to be on stage and shake hands with

545
00:28:04,640 --> 00:28:07,000
Speaker 2: these guys and be part of it and come up

546
00:28:07,040 --> 00:28:10,399
Speaker 2: with negotiation that strikes me is actually a sort of

547
00:28:10,720 --> 00:28:14,879
Speaker 2: very useful read into how Trump thinks about international relations.

548
00:28:15,320 --> 00:28:18,280
Speaker 5: I mean, TikTok is a great example, right, I mean,

549
00:28:18,320 --> 00:28:22,680
Speaker 5: the fact is that one day before inauguration, everybody thought

550
00:28:22,800 --> 00:28:24,400
Speaker 5: TikTok was finished.

551
00:28:24,520 --> 00:28:26,800
Speaker 4: Yeah right, I mean with you know, Congress already.

552
00:28:26,520 --> 00:28:30,000
Speaker 5: Voted, the Supreme courts had already gone along, and then

553
00:28:30,320 --> 00:28:33,280
Speaker 5: it was it. And then guess what, Trump managed to

554
00:28:33,320 --> 00:28:35,400
Speaker 5: revive it because over a phone call was seeking pink.

555
00:28:35,680 --> 00:28:38,760
Speaker 4: That was it. So from that point of view, again, I.

556
00:28:38,920 --> 00:28:41,440
Speaker 5: Think Trump's made a lot of mistakes, I think, but

557
00:28:41,560 --> 00:28:44,440
Speaker 5: it doesn't take away from the fact that he is

558
00:28:44,480 --> 00:28:47,160
Speaker 5: a dealmaker. He wants to do deals, okay, and I

559
00:28:47,200 --> 00:28:49,480
Speaker 5: think from that point of you he still thinks that he.

560
00:28:49,480 --> 00:28:51,560
Speaker 4: Can pull off a deal with the Chinese.

561
00:28:52,000 --> 00:28:55,120
Speaker 5: The biggest challenge I think he has right now is

562
00:28:55,160 --> 00:28:59,280
Speaker 5: to how to basically repair the total loss of trust

563
00:28:59,480 --> 00:29:02,600
Speaker 5: okay on the Chinese side visa VI Trump, right, because

564
00:29:02,640 --> 00:29:04,160
Speaker 5: I've no doubt, like you know, I mean, I think

565
00:29:04,200 --> 00:29:06,360
Speaker 5: she Ping was like, well, you know, he got the

566
00:29:06,400 --> 00:29:09,440
Speaker 5: invitation to go to the inauguration, he didn't go, but

567
00:29:09,520 --> 00:29:12,080
Speaker 5: he thought that was a real nice gesture. And then

568
00:29:12,120 --> 00:29:14,920
Speaker 5: he spoke with Trump over the phone, and then you know,

569
00:29:15,200 --> 00:29:17,800
Speaker 5: and then even after basically, you know, China was hit

570
00:29:17,840 --> 00:29:20,640
Speaker 5: by the percent tariff on fentannel.

571
00:29:20,680 --> 00:29:21,800
Speaker 4: He was probably thinking that.

572
00:29:21,760 --> 00:29:23,840
Speaker 5: This is going to be okay, But it's like it's

573
00:29:23,840 --> 00:29:26,480
Speaker 5: giving getting wars every single day, you know. What's very interesting.

574
00:29:26,800 --> 00:29:30,600
Speaker 5: So I'm conducting a daily survey believe or not? Okay,

575
00:29:30,680 --> 00:29:32,280
Speaker 5: I mean for the last three year. I mean, I

576
00:29:32,320 --> 00:29:35,320
Speaker 5: have a joint venture, you know, with reewe, which is

577
00:29:35,360 --> 00:29:39,120
Speaker 5: a Toronto based online survey technology company. They're actually a

578
00:29:39,200 --> 00:29:41,160
Speaker 5: list of company in Canada and the one of the

579
00:29:41,240 --> 00:29:43,560
Speaker 5: leading you know, online survey technology companies in the world.

580
00:29:43,640 --> 00:29:47,080
Speaker 5: So it's part of my you know, research process. So

581
00:29:47,440 --> 00:29:51,440
Speaker 5: we have joined forces to conduct proprietary surveys okay for

582
00:29:51,560 --> 00:29:53,840
Speaker 5: my clients. And one of the surveys is what I

583
00:29:53,840 --> 00:29:57,160
Speaker 5: call Cold World two survey. So I'm conducting surveys of

584
00:29:57,400 --> 00:30:02,120
Speaker 5: Chinese people and Americans every single day to gauge how

585
00:30:02,160 --> 00:30:04,880
Speaker 5: they feel about each other, you know, in terms of

586
00:30:05,040 --> 00:30:08,560
Speaker 5: US China relations. It is fascinating, okay. I can tell

587
00:30:08,560 --> 00:30:12,240
Speaker 5: you even until a week ago, the Chinese people, when

588
00:30:12,240 --> 00:30:15,240
Speaker 5: you asked them, like is the US an enemy or

589
00:30:15,280 --> 00:30:19,800
Speaker 5: an ally most Chinese people said all as opposed to enemy.

590
00:30:19,880 --> 00:30:20,520
Speaker 4: Believe or not?

591
00:30:20,600 --> 00:30:24,800
Speaker 5: More people said al eth livi okay. And that tells

592
00:30:24,920 --> 00:30:27,200
Speaker 5: me that even though things were like, you know, getting

593
00:30:27,200 --> 00:30:30,960
Speaker 5: worse and worse and worse, the Chinese media was very careful,

594
00:30:31,120 --> 00:30:34,680
Speaker 5: not too basically stoke, you know, nationalistic fervor in China.

595
00:30:34,720 --> 00:30:37,120
Speaker 5: They were still trying to basically, you know, find a

596
00:30:37,160 --> 00:30:40,320
Speaker 5: way out of this. But the last week, I mean,

597
00:30:40,480 --> 00:30:44,520
Speaker 5: there was this huge spike in terms of percentage of

598
00:30:44,560 --> 00:30:48,040
Speaker 5: my respondents in China who said the US it's an

599
00:30:48,160 --> 00:30:52,080
Speaker 5: enemy and adversary. Now basically forty six percent of Chinese

600
00:30:52,120 --> 00:30:55,080
Speaker 5: said America is an adversary or an enemy versus only

601
00:30:55,120 --> 00:30:59,520
Speaker 5: forty percent of Americans who considered China as such. And

602
00:30:59,600 --> 00:31:02,080
Speaker 5: so that is very very interesting. So from that point

603
00:31:02,080 --> 00:31:04,080
Speaker 5: of view, I think this is the biggest problem, which

604
00:31:04,120 --> 00:31:07,120
Speaker 5: is that EID in China sort of feels like, you know,

605
00:31:07,680 --> 00:31:10,520
Speaker 5: they game Trump three months and then things got worse

606
00:31:10,560 --> 00:31:13,080
Speaker 5: and worse and worse. Maybe they have no idea if

607
00:31:13,080 --> 00:31:15,600
Speaker 5: it's Trump or Trump's advisor, the China Hawks and so

608
00:31:15,600 --> 00:31:18,120
Speaker 5: and so forth, or I knows that they can no

609
00:31:18,240 --> 00:31:23,920
Speaker 5: longer engage, okay, basically, so therefore they're preparing the population

610
00:31:24,040 --> 00:31:27,920
Speaker 5: in China for a long standoff This is why people

611
00:31:27,960 --> 00:31:30,400
Speaker 5: are wrong to call this thing, oh game of chicken,

612
00:31:30,600 --> 00:31:33,400
Speaker 5: because in a game. I'm a professor of economics here

613
00:31:33,400 --> 00:31:36,320
Speaker 5: in Israel, and I teach game theory in game theory. Yeah,

614
00:31:36,360 --> 00:31:38,640
Speaker 5: I mean everybody who's taking the course in game theory,

615
00:31:38,680 --> 00:31:41,000
Speaker 5: they think about game of chicken gaming chicken. By the way,

616
00:31:41,080 --> 00:31:44,040
Speaker 5: it's completely irrelevant at this point because in a game

617
00:31:44,080 --> 00:31:47,880
Speaker 5: of chicken, as you know, one side will capitulate before

618
00:31:47,880 --> 00:31:52,520
Speaker 5: the collision, so that nothing happens. Okay, nothing happens, So

619
00:31:52,560 --> 00:31:55,880
Speaker 5: somebody stops before something bad happens. I would argue, we've

620
00:31:55,920 --> 00:31:58,960
Speaker 5: already gone beyond a game of chicken. We're now in

621
00:31:59,000 --> 00:32:02,160
Speaker 5: a war of attrition. A war of Attrician is another

622
00:32:02,160 --> 00:32:05,040
Speaker 5: game in game theory, except war of Attrician. Basically, the

623
00:32:05,080 --> 00:32:08,840
Speaker 5: game continues even though it continues to inflict pain on

624
00:32:08,960 --> 00:32:12,920
Speaker 5: both sides, but both sides sort of hang on until

625
00:32:13,080 --> 00:32:16,640
Speaker 5: one side finally capitulated because the pain becomes unbearable, a.

626
00:32:16,640 --> 00:32:18,400
Speaker 4: Little bit like World War One if you like it.

627
00:32:18,840 --> 00:32:21,320
Speaker 4: And I think the Chinese are now preparing for this

628
00:32:21,400 --> 00:32:24,160
Speaker 4: war attrition. And this is why I think Trump is

629
00:32:24,160 --> 00:32:26,840
Speaker 4: still thinking he's gonna get the Chinese, gonna get basically

630
00:32:26,840 --> 00:32:28,719
Speaker 4: shooting being on the phone he's gonna do this, and

631
00:32:28,760 --> 00:32:32,120
Speaker 4: that I am doubtful. I mean even Scott Besson, as

632
00:32:32,160 --> 00:32:35,200
Speaker 4: I said before, because Scott is not really he's not

633
00:32:35,240 --> 00:32:38,920
Speaker 4: a political type. He doesn't understand the hatred there is

634
00:32:38,960 --> 00:32:41,960
Speaker 4: for China in Washington, and I think from that point

635
00:32:42,000 --> 00:32:43,680
Speaker 4: of view, Trump is going to be It's going to

636
00:32:43,720 --> 00:32:46,400
Speaker 4: be difficult for Trump, but anybody can do but it's

637
00:32:46,400 --> 00:32:48,600
Speaker 4: still Trump. But I'm just saying it's gonna be very difficult.

638
00:32:48,640 --> 00:32:51,640
Speaker 2: Tracy. In our episode with Martin Wolf, I brought up

639
00:32:51,640 --> 00:32:53,320
Speaker 2: the fact that, you know, for the first time, I

640
00:32:53,360 --> 00:32:56,560
Speaker 2: actually think it's really important to read those surveys of

641
00:32:56,680 --> 00:33:00,640
Speaker 2: international perspectives on China or on the US, and David

642
00:33:00,680 --> 00:33:03,200
Speaker 2: giving a great example of like why for any leader

643
00:33:03,240 --> 00:33:07,280
Speaker 2: globally now just China, the domestic attitudes probably really matter

644
00:33:07,320 --> 00:33:09,959
Speaker 2: if any leader wants to maintain domestic legitimacy.

645
00:33:11,360 --> 00:33:14,160
Speaker 3: Sure, although one thing I would say in China is

646
00:33:14,240 --> 00:33:18,560
Speaker 3: there is a rather authoritarian government. Sure that probably makes

647
00:33:18,640 --> 00:33:21,000
Speaker 3: a difference in that dynamic. But David, I want to

648
00:33:21,040 --> 00:33:24,280
Speaker 3: ask you a question. So you're a smart guy, reasonably

649
00:33:24,320 --> 00:33:26,800
Speaker 3: smart guy. That's one of the biggest compliments I've ever

650
00:33:26,880 --> 00:33:28,120
Speaker 3: given on all blots.

651
00:33:27,920 --> 00:33:31,000
Speaker 2: By the way, is so thrial.

652
00:33:31,400 --> 00:33:34,640
Speaker 3: But do you worry at all that when it comes

653
00:33:34,680 --> 00:33:37,960
Speaker 3: to I should say, you're obviously a very keen watcher

654
00:33:38,240 --> 00:33:40,960
Speaker 3: of the White House and everything that's going on there

655
00:33:41,000 --> 00:33:45,400
Speaker 3: and trying to disaggregate you know, what's driving certain policy makers.

656
00:33:45,960 --> 00:33:49,800
Speaker 3: But do you worry that there's a degree of overthinking

657
00:33:49,920 --> 00:33:53,720
Speaker 3: at play here or you know, sane washing perhaps of

658
00:33:53,920 --> 00:33:56,960
Speaker 3: Trump and the administration that you're trying to like put

659
00:33:56,960 --> 00:34:00,000
Speaker 3: a framework on what's happening. That maybe isn't the case,

660
00:34:00,320 --> 00:34:03,360
Speaker 3: Like maybe it is just quite chaotic and people are

661
00:34:03,440 --> 00:34:05,880
Speaker 3: unsure of what they're doing, unsure of what the ultimate

662
00:34:05,920 --> 00:34:06,440
Speaker 3: goals are.

663
00:34:07,040 --> 00:34:10,960
Speaker 5: I do agree with that. I do think that, like

664
00:34:11,120 --> 00:34:14,719
Speaker 5: in a way I was hoping for more. I mean

665
00:34:14,760 --> 00:34:17,200
Speaker 5: to the extent that you know, like for example, Dulge

666
00:34:17,280 --> 00:34:19,680
Speaker 5: is a good example. Right, So Elon Mosk was like,

667
00:34:19,719 --> 00:34:22,920
Speaker 5: you know what he had three months after? Yeah, the elections,

668
00:34:22,960 --> 00:34:26,520
Speaker 5: prepare for those, right, I mean he supposedly had like

669
00:34:26,640 --> 00:34:29,920
Speaker 5: hundreds of legal advice. There's also some people they figured

670
00:34:29,920 --> 00:34:33,400
Speaker 5: out everything and guess what, it's gone from two trillion

671
00:34:33,440 --> 00:34:36,839
Speaker 5: dollars to one trillion dollars and then whatever. Ten days ago,

672
00:34:36,880 --> 00:34:39,840
Speaker 5: he declared Jub's cabinet He's going to find one hundred

673
00:34:39,880 --> 00:34:42,680
Speaker 5: and fifty million dollars of cuts for the twenty twenty

674
00:34:42,719 --> 00:34:48,600
Speaker 5: six budget. I mean, I track the daily US Treasury statement, okay,

675
00:34:49,040 --> 00:34:53,560
Speaker 5: which tracks every single like whatever, in aggregate, but in

676
00:34:53,719 --> 00:34:56,560
Speaker 5: very detailed form every dollar that goes out of the

677
00:34:56,600 --> 00:34:59,239
Speaker 5: Treasury count that the US federal government keeps with the

678
00:34:59,239 --> 00:35:01,480
Speaker 5: Federal Reserve where all this money goes in and out.

679
00:35:01,760 --> 00:35:04,040
Speaker 5: And let me tell you this, I cannot see any

680
00:35:04,120 --> 00:35:08,239
Speaker 5: evidence of any spending come so far. Okay, So what

681
00:35:08,280 --> 00:35:11,120
Speaker 5: I'm telling you is this, I mean, and that's Ela Mosque,

682
00:35:11,640 --> 00:35:14,000
Speaker 5: you know, which scares me because I've always thought about

683
00:35:14,000 --> 00:35:15,680
Speaker 5: Elamsk is supposed to be a very smart guy.

684
00:35:15,840 --> 00:35:16,520
Speaker 4: You know this guy.

685
00:35:16,840 --> 00:35:18,520
Speaker 5: I mean, you don't become the richest man in the

686
00:35:18,560 --> 00:35:21,560
Speaker 5: world just by talking big. Well maybe he does. Maybe

687
00:35:21,640 --> 00:35:24,279
Speaker 5: American capitalism is all about talking big, whatever it is.

688
00:35:24,560 --> 00:35:29,080
Speaker 5: But this is a good example of basically literally like

689
00:35:29,200 --> 00:35:31,399
Speaker 5: you know, talking out of I don't know, I didn't

690
00:35:31,400 --> 00:35:33,360
Speaker 5: want to use any you know things I'm going to

691
00:35:33,400 --> 00:35:36,560
Speaker 5: basically regret. But that's why this trade war thing is

692
00:35:36,640 --> 00:35:39,920
Speaker 5: very important, As I said before, because Trump thought Trump

693
00:35:40,000 --> 00:35:44,399
Speaker 5: is in his political advisors decided that because trade war

694
00:35:44,800 --> 00:35:48,200
Speaker 5: in his first term was not inflationary, therefore it's not

695
00:35:48,200 --> 00:35:52,000
Speaker 5: going to be inflationary this time. Therefore, there's no reason

696
00:35:52,120 --> 00:35:56,160
Speaker 5: for the FAT not to cut interest rates. Okay, and

697
00:35:56,239 --> 00:35:59,040
Speaker 5: that as completely like so you see what I'm saying.

698
00:35:59,120 --> 00:36:02,239
Speaker 5: How that is important because now it's like, well, you know,

699
00:36:02,360 --> 00:36:05,360
Speaker 5: like what Trump now you want you want to fire

700
00:36:05,480 --> 00:36:08,359
Speaker 5: basically power. Why did you think about that three weeks

701
00:36:08,400 --> 00:36:10,640
Speaker 5: ago or a month ago, or even two months ago

702
00:36:10,640 --> 00:36:11,520
Speaker 5: when you're planning this.

703
00:36:11,520 --> 00:36:12,600
Speaker 4: Whole tariff business.

704
00:36:13,239 --> 00:36:16,120
Speaker 5: Okay, because I thought, you know, if you could get

705
00:36:16,120 --> 00:36:19,920
Speaker 5: Elon Moss to cut spending and that would be deflationary,

706
00:36:20,120 --> 00:36:24,320
Speaker 5: which could potentially offset any inflationary effect associated with the tariff,

707
00:36:24,440 --> 00:36:26,440
Speaker 5: and then you could get the FED on your side

708
00:36:26,440 --> 00:36:29,040
Speaker 5: if this fiscal tightening. But right now we haven't got

709
00:36:29,080 --> 00:36:31,520
Speaker 5: any fiscal tightening because Elon Muss hasn't been able to

710
00:36:31,520 --> 00:36:35,200
Speaker 5: deliver other than talking big about spending cuts, and the

711
00:36:35,280 --> 00:36:37,479
Speaker 5: tariff is going to be definitely inflationary this time.

712
00:36:37,719 --> 00:36:38,440
Speaker 4: There is no way.

713
00:36:38,480 --> 00:36:41,400
Speaker 5: It doesn't matter whether it's how anybody else it was.

714
00:36:41,400 --> 00:36:44,640
Speaker 5: The German of Federal Reserve, no chairman of Federal Reserve

715
00:36:45,160 --> 00:36:47,960
Speaker 5: will be cutting interest rates right now under the circumstances.

716
00:36:48,320 --> 00:36:50,080
Speaker 5: So from that point of you, for Trump to be

717
00:36:50,120 --> 00:36:52,879
Speaker 5: basically throwing in tangent right now, Pennant Tables said, well,

718
00:36:53,040 --> 00:36:56,160
Speaker 5: how's not doing his job? That to me again just

719
00:36:56,200 --> 00:37:01,080
Speaker 5: shows that this administration is off to a terrible start.

720
00:37:01,520 --> 00:37:04,600
Speaker 5: To extend that, the assumptions that they're making for where

721
00:37:04,640 --> 00:37:09,760
Speaker 5: they get to now were completely wrong. And unfortunately, I'm

722
00:37:09,800 --> 00:37:12,359
Speaker 5: sorry to say this. I think Scott is a great guy.

723
00:37:12,840 --> 00:37:15,400
Speaker 5: But Scott did not have the same kind of relationship

724
00:37:15,440 --> 00:37:17,600
Speaker 5: that Steve Mnuchen had with Trump in his first term.

725
00:37:17,960 --> 00:37:21,160
Speaker 5: If you remember, Steve Mnuchen was Trump's answer the uh,

726
00:37:21,600 --> 00:37:25,960
Speaker 5: you know, campaign campaign share person. Okay, So from that

727
00:37:26,080 --> 00:37:28,040
Speaker 5: point of view, there was much more trust and I

728
00:37:28,080 --> 00:37:31,600
Speaker 5: think therefore Munuchuen was a much more careful person. And

729
00:37:31,600 --> 00:37:34,960
Speaker 5: then where I think Scott business more of an academic philosopher,

730
00:37:35,080 --> 00:37:37,880
Speaker 5: a hedge fun guy who thinks big in terms of

731
00:37:38,000 --> 00:37:40,360
Speaker 5: like the theory, but I think in terms of the

732
00:37:40,440 --> 00:37:42,440
Speaker 5: day to day stuff, I don't know how much influence

733
00:37:42,480 --> 00:37:44,759
Speaker 5: he has over Trump. As a result, I kind of

734
00:37:44,760 --> 00:37:47,360
Speaker 5: feel like I think there are a lot of mistakes

735
00:37:47,360 --> 00:37:49,120
Speaker 5: that have been made, And what worries me more than

736
00:37:49,160 --> 00:37:52,480
Speaker 5: anything else is that maybe these mistakes cannot be undone.

737
00:37:52,680 --> 00:37:55,239
Speaker 2: Okay, what happens when the crunch drives? As you said,

738
00:37:55,239 --> 00:37:59,040
Speaker 2: Americans outside of investors haven't actually felt any of this

739
00:37:59,080 --> 00:38:02,200
Speaker 2: impact at all, Say, like, how does Hollywood even continue

740
00:38:02,200 --> 00:38:07,840
Speaker 2: with something as simple as losing access to affordable advanced lightings?

741
00:38:07,840 --> 00:38:10,480
Speaker 2: And that's just a fairly small sliver of the US economy.

742
00:38:10,880 --> 00:38:13,759
Speaker 2: What does this summer look like to you in the

743
00:38:13,840 --> 00:38:17,960
Speaker 2: United States? Given this war of attrition dynamic that's going on.

744
00:38:18,560 --> 00:38:20,960
Speaker 5: I think it's gonna look a shit show. I really

745
00:38:21,239 --> 00:38:23,200
Speaker 5: believe it's going to be a shit show. I think

746
00:38:23,200 --> 00:38:25,200
Speaker 5: we're going to be going to a recession. I think

747
00:38:25,239 --> 00:38:28,879
Speaker 5: Trump's approval rating is gonna collapse, Okay, And I think

748
00:38:28,960 --> 00:38:31,200
Speaker 5: you know the point here is this? I mean again,

749
00:38:31,320 --> 00:38:35,320
Speaker 5: you know, like obviously you know, there's only one question

750
00:38:35,400 --> 00:38:38,520
Speaker 5: of any interest to anybody right now, which is okay, fine,

751
00:38:38,680 --> 00:38:41,560
Speaker 5: So when will Frump and Shiginging get on the phone?

752
00:38:41,960 --> 00:38:44,480
Speaker 5: That's the only question, right I mean, I think we

753
00:38:44,480 --> 00:38:47,040
Speaker 5: we can only we can say right now that things

754
00:38:47,160 --> 00:38:50,440
Speaker 5: will probably bartom once the two men I've gotten on

755
00:38:50,440 --> 00:38:52,560
Speaker 5: the phone. Where for that matter, from announced that he's

756
00:38:52,560 --> 00:38:54,960
Speaker 5: going to be on his way to Beijing. To me,

757
00:38:55,520 --> 00:38:57,560
Speaker 5: things are not bad enough for him to get to

758
00:38:57,560 --> 00:39:00,319
Speaker 5: that point. So from that point of view, this is

759
00:39:00,400 --> 00:39:02,360
Speaker 5: why I think, you know, at least in the New

760
00:39:02,440 --> 00:39:05,080
Speaker 5: York term, I think stocks are still going lower. I think,

761
00:39:05,160 --> 00:39:07,920
Speaker 5: you know, from that point of view because precisely the

762
00:39:08,080 --> 00:39:12,440
Speaker 5: Chinese believe that time is on their side and Trump.

763
00:39:12,600 --> 00:39:14,800
Speaker 5: The problem is is when you have a one hundred

764
00:39:14,800 --> 00:39:17,080
Speaker 5: and forty five percent tariff on China, how do.

765
00:39:17,040 --> 00:39:18,160
Speaker 4: You even back down from that?

766
00:39:18,320 --> 00:39:20,120
Speaker 5: Let's just say you say, okay, fine, let's go from

767
00:39:20,239 --> 00:39:23,279
Speaker 5: one forty five to one percent, or even to one

768
00:39:23,360 --> 00:39:25,719
Speaker 5: hundred percent. You know what, it makes no difference. And

769
00:39:25,840 --> 00:39:30,200
Speaker 5: one five percent and to one hundred percent, that doesn't

770
00:39:30,200 --> 00:39:31,880
Speaker 5: mean that China is going to be able to explot

771
00:39:31,880 --> 00:39:34,640
Speaker 5: anymore to the US. So from that point of view,

772
00:39:34,800 --> 00:39:37,560
Speaker 5: let's think about that'smare Joe for a second in a negotiation.

773
00:39:37,719 --> 00:39:39,640
Speaker 5: I thought from the very beginning, that's why I thought

774
00:39:39,640 --> 00:39:42,239
Speaker 5: TikTok was a very good beginning. I thought, the only

775
00:39:42,320 --> 00:39:45,000
Speaker 5: way Trump can do deals with China is by doing

776
00:39:45,000 --> 00:39:47,759
Speaker 5: a bunch of small deals they venture add up to

777
00:39:47,800 --> 00:39:51,120
Speaker 5: a big one. But right now, with Tarifa one hundred

778
00:39:51,120 --> 00:39:53,759
Speaker 5: and forty five percent. The only kind of deal you

779
00:39:53,800 --> 00:39:58,160
Speaker 5: can do will be a very big deal. I think

780
00:39:58,160 --> 00:40:00,319
Speaker 5: we can we can all agree right now to do

781
00:40:00,360 --> 00:40:02,840
Speaker 5: a big deal. It's going to be very difficult. For

782
00:40:02,920 --> 00:40:04,640
Speaker 5: one thing, it takes a long time, a lot of time,

783
00:40:05,200 --> 00:40:07,680
Speaker 5: and moreover, it takes a lot of political capital that

784
00:40:07,719 --> 00:40:11,000
Speaker 5: Trump doesn't have. But again you have to remember, you know,

785
00:40:11,160 --> 00:40:15,160
Speaker 5: with elamsk trying to cut spending, the only thing that

786
00:40:15,200 --> 00:40:17,520
Speaker 5: the House and the Senate can agree on is to

787
00:40:17,520 --> 00:40:18,800
Speaker 5: increase defense spending.

788
00:40:19,440 --> 00:40:20,920
Speaker 4: Like this, the only.

789
00:40:20,719 --> 00:40:23,160
Speaker 5: Difference is, well, the House most to increase defense spending

790
00:40:23,200 --> 00:40:25,399
Speaker 5: only by one hundred billion dollars next year. The Senate

791
00:40:25,480 --> 00:40:27,359
Speaker 5: wants to increase about one hundred and fifty billion dollars

792
00:40:27,400 --> 00:40:29,319
Speaker 5: next year. Everything else is going to be going down.

793
00:40:29,680 --> 00:40:30,000
Speaker 4: That's it.

794
00:40:30,840 --> 00:40:34,759
Speaker 5: So when the politicians believe that, you know, China is

795
00:40:35,040 --> 00:40:39,080
Speaker 5: extensive as an existential threat, that these people are evil,

796
00:40:39,960 --> 00:40:42,680
Speaker 5: we need to basically stop them before they stop us,

797
00:40:43,239 --> 00:40:45,680
Speaker 5: then you know what, it would be very very difficult

798
00:40:45,719 --> 00:40:49,040
Speaker 5: for Trump to make that big deal that I think

799
00:40:49,120 --> 00:40:51,160
Speaker 5: is necessary right now to stop this whole thing. And

800
00:40:51,200 --> 00:40:53,640
Speaker 5: this is why I cannot see me just if I

801
00:40:53,680 --> 00:40:56,000
Speaker 5: put my hat as a game theorist on right now.

802
00:40:56,360 --> 00:40:59,680
Speaker 5: I'm struggling to see a way out right now. But

803
00:41:00,120 --> 00:41:02,640
Speaker 5: maybe you know, I'm sure you'll find better, you know,

804
00:41:02,760 --> 00:41:03,480
Speaker 5: more more smart.

805
00:41:03,520 --> 00:41:06,200
Speaker 4: I guess now you do. No, let me know, like

806
00:41:06,239 --> 00:41:07,839
Speaker 4: you know what is the way out here?

807
00:41:08,400 --> 00:41:12,200
Speaker 2: David WU, that was a blast. Really appreciate your perspective.

808
00:41:12,239 --> 00:41:14,920
Speaker 2: And uh, maybe in a six months or a year,

809
00:41:15,040 --> 00:41:17,360
Speaker 2: or when Trump and shouldn't Pin get on the phone,

810
00:41:17,440 --> 00:41:19,720
Speaker 2: we'll have you back. Thank you so much for coming

811
00:41:19,760 --> 00:41:20,520
Speaker 2: back on odd lots.

812
00:41:20,680 --> 00:41:21,600
Speaker 4: Thanks for having me.

813
00:41:35,000 --> 00:41:36,640
Speaker 2: I always feel like I have to catch my breath

814
00:41:36,640 --> 00:41:39,120
Speaker 2: a little bit after talking with David. I knew that

815
00:41:39,280 --> 00:41:41,160
Speaker 2: it's always like, it's always that energy.

816
00:41:41,480 --> 00:41:44,000
Speaker 3: You did say that in the intro, didn't you energetic?

817
00:41:44,239 --> 00:41:45,959
Speaker 2: He's an energetic fellow, that's for sure.

818
00:41:46,080 --> 00:41:48,120
Speaker 3: Yes, for sure. And one thing I will say, I

819
00:41:48,440 --> 00:41:52,000
Speaker 3: really do appreciate some of his insights into the Trump

820
00:41:52,000 --> 00:41:55,080
Speaker 3: administration because in Trump won, you know, a lot of

821
00:41:55,080 --> 00:41:58,439
Speaker 3: people got that call wrong and a lot of people

822
00:41:58,520 --> 00:42:02,600
Speaker 3: thought that we would see in from trade war number one,

823
00:42:02,680 --> 00:42:05,640
Speaker 3: and we didn't really get that. And so it is

824
00:42:05,760 --> 00:42:08,240
Speaker 3: very interesting to me to hear someone who was pretty

825
00:42:08,239 --> 00:42:13,160
Speaker 3: supportive of that administration the first Trump administration, sound quite

826
00:42:13,360 --> 00:42:17,280
Speaker 3: negative on the second administration. And I guess our headline

827
00:42:17,320 --> 00:42:19,319
Speaker 3: for this is going to be, you know, David wu

828
00:42:19,440 --> 00:42:23,440
Speaker 3: on the coming sh show in America.

829
00:42:23,560 --> 00:42:28,360
Speaker 2: Look, whether it's the Bizar, whether it's the Bowyer's, the

830
00:42:28,480 --> 00:42:31,920
Speaker 2: conclusion is this is a very bad situation. Yeah, right,

831
00:42:32,239 --> 00:42:37,200
Speaker 2: And as he said, they've literally gotten zero accomplishments so far.

832
00:42:37,719 --> 00:42:40,879
Speaker 2: The war in Ukraine is still going. There's not even

833
00:42:40,920 --> 00:42:44,279
Speaker 2: a TikTok deal. And then I really do think, you

834
00:42:44,320 --> 00:42:47,480
Speaker 2: know again, like you know, it's useful this idea. It's

835
00:42:47,480 --> 00:42:50,040
Speaker 2: not a game of chicken and the game the damage

836
00:42:50,160 --> 00:42:53,880
Speaker 2: is being done today as we speak, with hardening of

837
00:42:53,920 --> 00:42:58,799
Speaker 2: opinions on both sides and the domestic polity and you know,

838
00:42:59,160 --> 00:43:03,080
Speaker 2: every leader, even an authoritarian one, has to maintain domestic

839
00:43:03,160 --> 00:43:06,719
Speaker 2: legitimacy to varying degrees or another. So this idea that

840
00:43:06,800 --> 00:43:08,879
Speaker 2: like we're you know, this is not a situation where

841
00:43:08,920 --> 00:43:11,000
Speaker 2: someone could blink. There's already been the sort of like

842
00:43:11,120 --> 00:43:14,520
Speaker 2: damage and it drags on further every single day. And

843
00:43:14,680 --> 00:43:16,400
Speaker 2: I think part of what we're seeing in the market

844
00:43:16,680 --> 00:43:20,479
Speaker 2: is no one can see what that obvious offering, even

845
00:43:20,520 --> 00:43:21,320
Speaker 2: those dynamics.

846
00:43:21,480 --> 00:43:23,680
Speaker 3: Yeah, It's funny you said that. I was literally about

847
00:43:23,719 --> 00:43:26,160
Speaker 3: to say the same exact sentence that the off ramp

848
00:43:26,200 --> 00:43:27,080
Speaker 3: is hard to see.

849
00:43:27,520 --> 00:43:27,719
Speaker 5: You know.

850
00:43:27,760 --> 00:43:30,719
Speaker 3: One thing I realized we mentioned wit Coough going from

851
00:43:30,800 --> 00:43:34,279
Speaker 3: like being a real estate guy to special envoy. One

852
00:43:34,280 --> 00:43:37,400
Speaker 3: thing I appreciate about the Trump administration is the ability

853
00:43:37,680 --> 00:43:42,040
Speaker 3: for personal progress in terms of careers like you have

854
00:43:42,200 --> 00:43:45,520
Speaker 3: kind of become. You know, They're very into personal development

855
00:43:45,680 --> 00:43:49,600
Speaker 3: and experimenting with new roles, which is interesting to see.

856
00:43:49,840 --> 00:43:50,440
Speaker 2: That's nice.

857
00:43:50,560 --> 00:43:53,040
Speaker 3: Yeah, I wanted to end on a nice new Yes. Okay,

858
00:43:53,200 --> 00:43:53,960
Speaker 3: shall we leave it there.

859
00:43:54,040 --> 00:43:54,759
Speaker 2: Let's leave it there.

860
00:43:54,840 --> 00:43:57,160
Speaker 3: This has been another episode of the All Thoughts podcast.

861
00:43:57,280 --> 00:44:00,520
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy allow and.

862
00:44:00,480 --> 00:44:03,400
Speaker 2: I'm Joe Wisenthal. You can follow me at the Stalwart.

863
00:44:03,680 --> 00:44:06,920
Speaker 2: Check out David Wu his stuff at David Wu Unbound.

864
00:44:07,320 --> 00:44:11,520
Speaker 2: He's certainly unbound. Follow our producers Carman Rodriguez at Carman Arman,

865
00:44:11,600 --> 00:44:15,040
Speaker 2: dash Ol Bennett at Dashbot and Kilbrooks at Kalebrooks. From

866
00:44:15,080 --> 00:44:17,800
Speaker 2: our odd Laws content, go to bloomberg dot com slash

867
00:44:17,840 --> 00:44:19,840
Speaker 2: odd Lots, where have all of our episodes and a

868
00:44:19,920 --> 00:44:22,879
Speaker 2: daily newsletter that you should subscribe to and you can

869
00:44:22,960 --> 00:44:24,799
Speaker 2: chat about all of these topics. We even have a

870
00:44:24,840 --> 00:44:28,640
Speaker 2: China room in our discord discord dot gg slash.

871
00:44:28,280 --> 00:44:30,920
Speaker 3: Odd Lots And if you enjoy odd Lots, if you

872
00:44:31,080 --> 00:44:33,640
Speaker 3: like it when we talk about the off ramp from

873
00:44:33,640 --> 00:44:36,400
Speaker 3: the trade war or lack thereof, then please leave us

874
00:44:36,440 --> 00:44:39,960
Speaker 3: a positive review on your favorite podcast platform. And remember,

875
00:44:40,040 --> 00:44:42,719
Speaker 3: if you are a Bloomberg subscriber, you can listen to

876
00:44:42,880 --> 00:44:45,920
Speaker 3: all of our episodes absolutely ad free. All you need

877
00:44:45,960 --> 00:44:48,680
Speaker 3: to do is find the Bloomberg channel on Apple Podcasts

878
00:44:48,680 --> 00:44:51,360
Speaker 3: and follow the instructions there. Thanks for listening

879
00:45:01,080 --> 00:45:01,120
Speaker 5: It