WEBVTT - David Woo: What Trump Started is Worse Than a Trade War

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Hello and welcome to another episode of the Odd Lots Podcast.

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<v Speaker 2>I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, it is

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<v Speaker 2>April twenty second. It is twelve oh nine and fifty

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<v Speaker 2>two seconds as of the time that I am talking

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<v Speaker 2>right now.

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<v Speaker 3>Soon we'll have to do fractions of a second.

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<v Speaker 4>Yeah, I know.

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<v Speaker 2>The market is actually up today. We're recording this on today.

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<v Speaker 2>We just got a headline apparently Treasury Secretary Scott Bessant,

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<v Speaker 2>at a JP Morgan event in Washington said besn't cees

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<v Speaker 2>de escalation with China situation unsustainable. That sent market surging.

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<v Speaker 2>You know, everyone's looking for a little shred of hope,

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<v Speaker 2>right We're a little shred of optimism that like things

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<v Speaker 2>can settle down, we get clarity that the two.

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<v Speaker 3>Biggest economies in the world aren't going to go completely

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<v Speaker 3>head to head.

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<v Speaker 2>Right like, because if I mean, this is really the story,

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<v Speaker 2>right even with the walk back on April ninth, the

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<v Speaker 2>week after Liberation Day, even if and we're not getting

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<v Speaker 2>any deals yet, at least so far, we haven't gotten

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<v Speaker 2>a deal with Indial, we haven't gotten the deal with Japan,

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<v Speaker 2>let alone the EU. But you know, even if we

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<v Speaker 2>got all those deals sometime in the next three months,

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<v Speaker 2>and typically trade deals take like years to work out,

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<v Speaker 2>there's still the fact of an economic rupture between the

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<v Speaker 2>world's two biggest economies, right.

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<v Speaker 3>I think that's certainly a possibility. The one other thing

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<v Speaker 3>I would say is, so you're right. Stocks are up

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<v Speaker 3>this morning because Bessend has been saying, you know, some

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<v Speaker 3>mildly potentially positive things on this issue. But there is

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<v Speaker 3>still this huge question of who would make the first

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<v Speaker 3>move in this particular standoff. And I think it is

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<v Speaker 3>a standoff. And I think, you know, both respective policy

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<v Speaker 3>making groups here, the Trump administration and the CCP under

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<v Speaker 3>Sheashon Paging, I think they both care about who is

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<v Speaker 3>seen to be making the biggest concession here. So I

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<v Speaker 3>think everyone can reasonably say that we would want some

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<v Speaker 3>sort of I was about to say peace steal between

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<v Speaker 3>China and the US. Peace steal isn't right, some sort

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<v Speaker 3>of reconciliation, but the path to getting there seems like

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<v Speaker 3>very confused and uncertain to me.

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<v Speaker 2>Yeah, there's a lot. I mean, look, people call it

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<v Speaker 2>a trade war, so I don't see why we can't

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<v Speaker 2>have a piece, trade pieceeal, a detent of some sort.

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<v Speaker 2>And look, we both know the stakes, right because the

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<v Speaker 2>US relies substantially on China booth for finished goods of

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<v Speaker 2>all kinds of things that US consumers enjoy, but also

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<v Speaker 2>intermediate goods that are used for actual manufacturing. And we

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<v Speaker 2>also know that at least in the short term, there

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<v Speaker 2>is not some quick substitute for the sheer amount of

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<v Speaker 2>demand that comes from the US consumer. And so we've

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<v Speaker 2>seen all the tiktoks of factories in China, you know,

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<v Speaker 2>trying to figure out ways to go direct to do

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<v Speaker 2>this consumer at least in the short term, economies have

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<v Speaker 2>a lot to lose, it would seem. And so there's

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<v Speaker 2>all this question of like, you know, who blanks first. Anyway,

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<v Speaker 2>there's a POTENTI there, you know, and you just see

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<v Speaker 2>it in the market pricing. There is a lot of

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<v Speaker 2>pain being priced in immediately today, maybe accepted from the

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<v Speaker 2>persistence of this trade war.

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<v Speaker 4>Right.

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<v Speaker 2>Well, I'm very excited. One of my favorite guests, I've

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<v Speaker 2>talked to him, We've talked to him on the podcast before,

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<v Speaker 2>I've talked to him on the TV. Always energetic and

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<v Speaker 2>always has just sort of interesting thoughts, A fun guy

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<v Speaker 2>to talk to, also very serious. We're going to be

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<v Speaker 2>speaking with David Wu. He is the CEO of David

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<v Speaker 2>Wu Unbound, and prior to that, he was the head

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<v Speaker 2>of Global Rates, Currency, Emerging Markets, fixed Income, and Economics

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<v Speaker 2>research at Bank of America. I always want to get

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<v Speaker 2>David's takes on things, So David, thank you so much

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<v Speaker 2>for coming back on odd blots.

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<v Speaker 4>Thanks for having me the pleasure.

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<v Speaker 2>Is this a type of war that we're seeing right

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<v Speaker 2>now that you know, whether trade war? You know, I

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<v Speaker 2>guess it seems like the obvious thing, but like how aggressive,

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<v Speaker 2>how provocative, how combative are Trump's actions against China.

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<v Speaker 5>I think it's very combative. I think this is much

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<v Speaker 5>more than just a trey war. I think this is

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<v Speaker 5>war actually, And then I think, you know, from that

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<v Speaker 5>point of view, is not that surprising the way it

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<v Speaker 5>is gone, because in a way, the whole thing has

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<v Speaker 5>been heating up under Biden.

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<v Speaker 4>I mean, I will tell you, yeah, and.

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<v Speaker 5>I think in a way, you know, it's actually very

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<v Speaker 5>interesting in a way, Trump is picking up where Biden

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<v Speaker 5>left off.

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<v Speaker 2>Who picked up where Trump left off?

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<v Speaker 1>Right?

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<v Speaker 5>Okay, let me let me just take it back from

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<v Speaker 5>you and what I mean, explain better what I meant

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<v Speaker 5>by that sentence. Right, did you remember when Biden became president? Okay,

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<v Speaker 5>Harvard University Belfare Center publish a big report in which

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<v Speaker 5>they did a massive ranking of the technology leaderships across

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<v Speaker 5>the major tech races. Okay, it was a report sponsor

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<v Speaker 5>by Eric Schmid, the former CEO.

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<v Speaker 4>Of Google, who was a big patriot.

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<v Speaker 5>And in this report they come to the conclusion the

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<v Speaker 5>US and China were in basically debt heat in first

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<v Speaker 5>or second place in all the leading technologies in the world.

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<v Speaker 5>And soon after that, Eric Schmid went on a pr

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<v Speaker 5>or political campaign across you know, the Beltway, essentially lobbrying

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<v Speaker 5>every Congressman, every senators who listened to him that this

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<v Speaker 5>is time to basically stop the access of China from

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<v Speaker 5>in advanced technology so that the US has a chance

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<v Speaker 5>to essentially regain the leadership.

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<v Speaker 4>Okay.

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<v Speaker 5>So therefore, under Biden, the most important thing, you know,

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<v Speaker 5>in terms of Visa VI China, it was not so

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<v Speaker 5>much the trade war, but rather they put in punishing

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<v Speaker 5>sanctions in terms of the ability of China to be

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<v Speaker 5>able to access you know, semiconductor advance conductors and in

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<v Speaker 5>manufacturing equipments for advanced conductors. All that was meant to

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<v Speaker 5>basically give the US two to three year basically like

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<v Speaker 5>head start okay in AI, semiciconductors, in automation, robotics, and

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<v Speaker 5>so on and so forth.

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<v Speaker 4>Guess what lessen?

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<v Speaker 5>A month after Trump became president, we had the Deep

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<v Speaker 5>Seek news, the Deep Seat news. Basically it was a

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<v Speaker 5>massive piece of news. I mean, it was a game changer.

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<v Speaker 5>Let me tell you this, I mean Deep Seek News

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<v Speaker 5>for me, is no proof of China's technological prowess, but

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<v Speaker 5>it is proof that AI can be easily copied. All

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<v Speaker 5>of a sudden, overnight, all the sanctions that happened under Biden,

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<v Speaker 5>it was for nothing. Okay, to an extent that if

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<v Speaker 5>these sanctions were designed to protect the monopoly of the

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<v Speaker 5>big US tech companies, okay, all of a sudden, that

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<v Speaker 5>meant nothing, because anything that could be copied is worth

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<v Speaker 5>nothing commercially. And this is the reason why, by the way,

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<v Speaker 5>I know, the data DeepC news came out I shortened

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<v Speaker 5>basically nastac and it's you know, it was a great trade,

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<v Speaker 5>by the way, but I.

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<v Speaker 4>Think that's what it gets down.

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<v Speaker 5>All the China hawks, I mean, Trump has brought a

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<v Speaker 5>lot of China Hawks into his administration. To tell you that,

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<v Speaker 5>for the China Hawks, if they thought that they had

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<v Speaker 5>been more time with China, I think after DeepC news

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<v Speaker 5>came out, literally there was this new sense of urgency.

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<v Speaker 5>We need to basically stop China now. The only way

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<v Speaker 5>they can do that is to bankrupt China economically, because honestly,

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<v Speaker 5>at this point, I mean, let's be honest, when you're

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<v Speaker 5>talking about the one hundred and forty five percent tariff, Yeah,

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<v Speaker 5>you're not engaging the trade war. You're engaging in basically

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<v Speaker 5>economic murder. I mean, that's it. I mean, I don't

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<v Speaker 5>see how China is going to be able to explore

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<v Speaker 5>anything the US with one hundred and forty five percent.

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<v Speaker 5>So I think point of view this to me was,

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<v Speaker 5>I think the so called trade war that we call

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<v Speaker 5>as such really was always intended as an economic blow

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<v Speaker 5>that will be so great to China that China will

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<v Speaker 5>no longer be in a position to threaten New Wes hegemony.

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<v Speaker 5>So again, this is why I said, this is more

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<v Speaker 5>than a trade war. This is much more than a

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<v Speaker 5>trade war. This is meant to protect US hegemony.

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<v Speaker 3>Right, sort of existential in that sense. Let me press

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<v Speaker 3>you on one thing you said. So, you know, you

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<v Speaker 3>mentioned the importance of deep seek and you kind of

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<v Speaker 3>suggested that some of the severity of the action taken

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<v Speaker 3>on China was because of the deep seek threat. But

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<v Speaker 3>I mean, we know that Trump from his campaign was

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<v Speaker 3>going to take a really hardline stance against China. So

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<v Speaker 3>how can you connect deep seek with some of the

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<v Speaker 3>policies that we've seen coming out of the administration. Can

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<v Speaker 3>you make that direct link?

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<v Speaker 4>Crazy? I think that's an excellent question. But let's think

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<v Speaker 4>about this from moan.

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<v Speaker 5>Okay, I've always said, you know, listen, I'm probably the

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<v Speaker 5>only person you know like it's been on your show.

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<v Speaker 5>We've read the back to back, one hundred page you know,

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<v Speaker 5>essentially faced one agreement that was time between Trump and

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<v Speaker 5>the Chinese back in two thousand point I.

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<v Speaker 2>Bet Dan Wong is yeah, the other one, keep going,

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<v Speaker 2>keep going.

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<v Speaker 5>Yeah, tell you this it was probably I mean, I

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<v Speaker 5>have a PhD in international trade from Columbia University, and

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<v Speaker 5>let me tell you this. That trade agreement, in my

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<v Speaker 5>humble opinion, was one of the best trade agreements signed

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<v Speaker 5>between two countries in the last fifty years. And the

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<v Speaker 5>reason was because it was a win win basically deal.

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<v Speaker 5>And if people tend to think, oh, whoa whatever, I mean,

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<v Speaker 5>people didn't read the whole thing. I mean, it's pretty

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<v Speaker 5>amazing what that whole thing actually meant. Now, in my

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<v Speaker 5>humble opinion, the difference between Trump and Biden is whereas

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<v Speaker 5>Biden saw the US China rivalry as largely a zero

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<v Speaker 5>sound game. That is, if China wins, will lose. If

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<v Speaker 5>we win, then China will lose. I think Trump in

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<v Speaker 5>his whole entire career sees things through the lenses of deals.

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<v Speaker 5>And Trump always understands that basically to do a deal,

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<v Speaker 5>there has to be enough for everybody around the table.

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<v Speaker 5>So from that point of view, in my humble opinion,

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<v Speaker 5>if you look back on the first day of Trump's inauguration,

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<v Speaker 5>what do you do this? I still remember, I don't

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<v Speaker 5>remember you guys covered the story. I still remember he

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<v Speaker 5>didn't press conference in the Oval office late at night,

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<v Speaker 5>you know, on the auguration day. And it was just

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<v Speaker 5>when he announced the twenty percent tariff on Canada and

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<v Speaker 5>Mexico over the fentannel, okay, And he was asked during

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<v Speaker 5>that press conference, why not China? You promised to eat

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<v Speaker 5>China hard. So why did you decide to hit Canada

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<v Speaker 5>and Mexico by not China, he asked. His response was, Oh,

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<v Speaker 5>because we hit China pretty hard my first time.

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<v Speaker 4>We're going to give them pass this time.

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<v Speaker 5>It was now until the next day he announced the

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<v Speaker 5>twenty percent for China. And then three weeks later, of

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<v Speaker 5>course we all you know know now like you know,

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<v Speaker 5>basically the tariff was extended for Mexico and Canada and

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<v Speaker 5>China was hit by twenty percent, okay, and then the

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<v Speaker 5>list goes on and off. In my humble opinion, you

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<v Speaker 5>know again, we were sitting here and thinking that Trump

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<v Speaker 5>is in the driver's seat.

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<v Speaker 4>I don't.

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<v Speaker 5>I think at this point Trump is no longer a

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<v Speaker 5>driver's seat to the extend, einting the Chin in a

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<v Speaker 5>hawks or actually in a private seat.

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<v Speaker 4>I think the.

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<v Speaker 5>China Hawks are maneuvering him in a position that he's

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<v Speaker 5>increasingly struggling to back away from. So it gets more extreme,

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<v Speaker 5>and that is a different story. This is why, to me,

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<v Speaker 5>this is not just about Pete Navarro versus basically Scott Besson.

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<v Speaker 5>This is about the China Hawks represented by Vance by

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<v Speaker 5>basically rule bio by Waltz and all of them actually,

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<v Speaker 5>So from that point of view, again, this is this

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<v Speaker 5>is what we're talking about. I think Trump really wanted.

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<v Speaker 5>I think Trump was so eager to do a TikTok

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<v Speaker 5>deal on the first day that he spoke with basically

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<v Speaker 5>Jijing being things We're going to go very differently. But

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<v Speaker 5>I think with a series of mistakes that have now

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<v Speaker 5>allowed the China Hawks to take over, and I think

0:11:45.840 --> 0:11:48.520
<v Speaker 5>Trump now in a way is a little bit powerless,

0:11:48.600 --> 0:11:50.400
<v Speaker 5>and I think, you know, it's we can talk about

0:11:50.440 --> 0:11:53.240
<v Speaker 5>the process and the sequencing, but I think this is

0:11:53.280 --> 0:11:56.040
<v Speaker 5>where I'm at right now, which is is not entirely

0:11:56.120 --> 0:11:57.120
<v Speaker 5>up to Trump anymore.

0:12:12.640 --> 0:12:15.240
<v Speaker 2>So, first of all, I just want to say I

0:12:15.320 --> 0:12:19.599
<v Speaker 2>appreciate the out of consensus perspective, because I would describe

0:12:19.640 --> 0:12:25.120
<v Speaker 2>the consensus perspective is the only active force that happens

0:12:25.200 --> 0:12:28.439
<v Speaker 2>or what's happening in Trump's brain. And so, first of all,

0:12:28.440 --> 0:12:31.520
<v Speaker 2>you're disagreeing with that, and I respect that. Second of all,

0:12:32.000 --> 0:12:35.440
<v Speaker 2>you know, from my perspective, Trump strikes. I know he

0:12:35.640 --> 0:12:39.200
<v Speaker 2>likes to do deals, and he loves talking about doing deals,

0:12:39.280 --> 0:12:43.240
<v Speaker 2>et cetera. When he pulled that chart out on Liberation

0:12:43.400 --> 0:12:46.679
<v Speaker 2>Day April second and basically slammed every country in the world.

0:12:47.080 --> 0:12:49.800
<v Speaker 2>This did not come across to me as someone who

0:12:49.920 --> 0:12:54.080
<v Speaker 2>likes positive some deals. This strikes me as someone who

0:12:54.120 --> 0:12:57.040
<v Speaker 2>finds any trade gap is per se bad, that if

0:12:57.080 --> 0:12:59.520
<v Speaker 2>you're running a trade surplus with the United States, you

0:12:59.559 --> 0:13:03.120
<v Speaker 2>must be you must be relative, and so like, give

0:13:03.120 --> 0:13:05.480
<v Speaker 2>me the counter argument here. Also, you know this idea.

0:13:05.559 --> 0:13:07.960
<v Speaker 2>You know people have been using the good Czar bad

0:13:08.040 --> 0:13:11.720
<v Speaker 2>Blowyers characterization. Oh, it's the it's the Navarros of the world.

0:13:11.800 --> 0:13:14.680
<v Speaker 2>It's the vances Trump is being blah blah blah. And

0:13:14.920 --> 0:13:17.559
<v Speaker 2>I tend to not find those things. But just convince

0:13:17.600 --> 0:13:20.520
<v Speaker 2>me that Trump is not a zerosome thinker when it

0:13:20.520 --> 0:13:21.480
<v Speaker 2>comes to convince you.

0:13:21.520 --> 0:13:22.959
<v Speaker 5>And by the way, I want to say this, there's

0:13:22.960 --> 0:13:25.760
<v Speaker 5>a big difference between China versus everybody else.

0:13:25.880 --> 0:13:27.600
<v Speaker 4>Okay, I think Trump.

0:13:27.360 --> 0:13:30.680
<v Speaker 5>Understands that everybody else he thought that the US is

0:13:30.679 --> 0:13:32.880
<v Speaker 5>so big he can just pushing them around. I think

0:13:33.000 --> 0:13:35.720
<v Speaker 5>China is a very different story. Just think about this

0:13:35.760 --> 0:13:39.719
<v Speaker 5>for a moment. The day that he unleash whatever on

0:13:39.960 --> 0:13:44.280
<v Speaker 5>I mean, whatever the time schedule on a liberation there.

0:13:44.960 --> 0:13:48.360
<v Speaker 4>Yeah, China was only hit with a twenty five percent. Yeah,

0:13:48.360 --> 0:13:48.800
<v Speaker 4>that's true.

0:13:48.880 --> 0:13:51.200
<v Speaker 5>Which is actually right in the middle of the range.

0:13:51.240 --> 0:13:54.360
<v Speaker 5>By the way, it's not like he China thirty percent.

0:13:54.480 --> 0:13:56.640
<v Speaker 5>I mean, listen, I mean, I mean Thailand was twenty

0:13:56.720 --> 0:14:00.240
<v Speaker 5>nine person in Switzerland thirty five percent. You can say,

0:14:00.320 --> 0:14:02.560
<v Speaker 5>look across, you know, I mean, China was actually doing

0:14:02.559 --> 0:14:05.439
<v Speaker 5>the low. And by the way, if you think about

0:14:05.440 --> 0:14:07.720
<v Speaker 5>that for a moment, I think that was a sign

0:14:08.280 --> 0:14:10.599
<v Speaker 5>that Trump did not you know, I mean, because I

0:14:10.640 --> 0:14:13.319
<v Speaker 5>mean again, you know, I think Trump understands depending on

0:14:13.400 --> 0:14:15.719
<v Speaker 5>who you're dealing with here, if you're dealing with a

0:14:15.760 --> 0:14:18.600
<v Speaker 5>little guy, you're gonna basically like literally knock the other

0:14:18.679 --> 0:14:21.200
<v Speaker 5>guy dead. And I think Trump feels like, you know,

0:14:21.240 --> 0:14:22.800
<v Speaker 5>this is the reason why I mean, I'm you know,

0:14:22.880 --> 0:14:27.160
<v Speaker 5>I think Mexico is a great example because Mexico, unlike

0:14:27.320 --> 0:14:32.400
<v Speaker 5>any other country, has literally been bending forward backward to

0:14:32.480 --> 0:14:34.960
<v Speaker 5>meet Trump, like forget about half the weigh like ninety

0:14:35.080 --> 0:14:37.560
<v Speaker 5>nine percent of the way. I thought Trump should have

0:14:37.720 --> 0:14:41.000
<v Speaker 5>rented a deal to basically shining bomb literally like three

0:14:41.040 --> 0:14:45.240
<v Speaker 5>weeks into his presidency, and he didn't. And the reason

0:14:45.360 --> 0:14:49.680
<v Speaker 5>is because apparently he saw Mexico as being a push around. Okay,

0:14:50.160 --> 0:14:52.600
<v Speaker 5>was China, I think is a different story. So I think,

0:14:52.640 --> 0:14:56.000
<v Speaker 5>you know, we cannot basically apply the same logic to

0:14:56.000 --> 0:14:58.240
<v Speaker 5>what Trump is saying. But you know what's interesting though,

0:14:58.480 --> 0:15:01.000
<v Speaker 5>what is interesting is the fire that as of today,

0:15:01.120 --> 0:15:04.200
<v Speaker 5>right now, as we speak, if I look at you know,

0:15:04.440 --> 0:15:07.680
<v Speaker 5>like you know, yesterday, I was, I mean, I didn't

0:15:07.720 --> 0:15:09.760
<v Speaker 5>you know, as you know, I've got a YouTube channel now,

0:15:09.920 --> 0:15:12.640
<v Speaker 5>you know, and and I was trying to basic the

0:15:12.800 --> 0:15:15.520
<v Speaker 5>I'm trying to upgrade my lighting. So I wanted to

0:15:15.520 --> 0:15:18.000
<v Speaker 5>buy this very expensive light. This is a very high

0:15:18.080 --> 0:15:20.120
<v Speaker 5>end lights to have manufacturing in China.

0:15:20.160 --> 0:15:22.760
<v Speaker 3>Well, you need one of those one of those circle lights,

0:15:22.880 --> 0:15:26.080
<v Speaker 3>like like a ring light, like a proper, proper influence

0:15:26.200 --> 0:15:27.080
<v Speaker 3>much more than a ring line.

0:15:27.080 --> 0:15:27.360
<v Speaker 4>I'm talking.

0:15:27.480 --> 0:15:30.520
<v Speaker 5>This is a professional basicly spotlight, right, So this is

0:15:30.560 --> 0:15:33.040
<v Speaker 5>a very high in case you don't know, like literally

0:15:33.120 --> 0:15:36.720
<v Speaker 5>ninety percent of the high end spotlights now are manufacturing China. Okay,

0:15:36.720 --> 0:15:38.440
<v Speaker 5>I mean that that's just that's just a factor, right,

0:15:38.440 --> 0:15:40.160
<v Speaker 5>So they don't just make a low end stuff.

0:15:40.240 --> 0:15:41.440
<v Speaker 4>This is really high end stuff.

0:15:41.680 --> 0:15:43.400
<v Speaker 5>And you know, as you know, I live in Israel now,

0:15:43.760 --> 0:15:45.720
<v Speaker 5>and I mean there's no inventory of this light in

0:15:45.800 --> 0:15:48.200
<v Speaker 5>all of Israel. I literally like got in touch with

0:15:48.240 --> 0:15:51.880
<v Speaker 5>every store the importer. Nothing, So I decided to call

0:15:51.960 --> 0:15:55.200
<v Speaker 5>up be An H in New York. Of course they

0:15:55.320 --> 0:15:58.600
<v Speaker 5>have it in stock, even though it's from China. And

0:15:58.680 --> 0:16:02.000
<v Speaker 5>guess what it costs. Literally have the price of what

0:16:02.080 --> 0:16:04.760
<v Speaker 5>I wouldn't paid if I bought the like in Israel. Unfortunately,

0:16:04.760 --> 0:16:07.880
<v Speaker 5>they don't have it in Israel anyway. So I was

0:16:07.920 --> 0:16:09.680
<v Speaker 5>asking to be and H guy. So wal, no, listen,

0:16:09.760 --> 0:16:12.120
<v Speaker 5>what about the tariff? He said, well, you know, listen,

0:16:12.320 --> 0:16:16.080
<v Speaker 5>we're not raising prices until we've actually depleted art stock.

0:16:17.160 --> 0:16:19.200
<v Speaker 5>But the point I'm trying to basically tell you is

0:16:19.240 --> 0:16:23.480
<v Speaker 5>like Americans have not even begun to feel the even

0:16:23.560 --> 0:16:26.440
<v Speaker 5>iota of the tariff. I mean, the stock market obviously

0:16:26.480 --> 0:16:28.040
<v Speaker 5>has gone down a bit, that kind of thing, but

0:16:28.160 --> 0:16:28.960
<v Speaker 5>it's like nothing.

0:16:29.200 --> 0:16:29.920
<v Speaker 4>I mean, I think.

0:16:29.800 --> 0:16:33.600
<v Speaker 5>People don't realize what this really means, because right now

0:16:33.640 --> 0:16:37.000
<v Speaker 5>what's happening is that the inventory in the system. And

0:16:37.040 --> 0:16:39.360
<v Speaker 5>then there's no doubt inventory got built up in Q

0:16:39.440 --> 0:16:42.160
<v Speaker 5>one because a lot of companies anticipated the tariff increase,

0:16:42.520 --> 0:16:45.360
<v Speaker 5>that is providing a bit of a buffer. Wait until

0:16:45.640 --> 0:16:49.640
<v Speaker 5>we get into June when prices either will go up

0:16:50.120 --> 0:16:52.200
<v Speaker 5>that there will be no stock to the extent that

0:16:52.400 --> 0:16:54.520
<v Speaker 5>just you know, whatever you want to basically buy simply

0:16:54.520 --> 0:16:57.520
<v Speaker 5>not available. I don't even know how Hollywood can basically

0:16:57.680 --> 0:17:00.680
<v Speaker 5>to do with They're lighting without Chinese lights right now

0:17:00.680 --> 0:17:03.280
<v Speaker 5>at this point, because there's very low degree of substitutability.

0:17:03.600 --> 0:17:05.760
<v Speaker 5>But the point here is that I think, you know,

0:17:05.960 --> 0:17:08.920
<v Speaker 5>in a way, I think you know, the pain is

0:17:09.080 --> 0:17:11.480
<v Speaker 5>like absolutely, and I think this is where Trump is

0:17:11.640 --> 0:17:15.640
<v Speaker 5>very missing formed by the way, I truly believe Trump

0:17:15.720 --> 0:17:18.760
<v Speaker 5>is surrounded by some really terrible advisors who at least

0:17:18.760 --> 0:17:22.040
<v Speaker 5>didn't tell him the full story, because when it comes

0:17:22.080 --> 0:17:23.680
<v Speaker 5>to the trade war, and I can just tell you,

0:17:23.760 --> 0:17:26.160
<v Speaker 5>I mean, I think that every step of the way,

0:17:26.280 --> 0:17:30.280
<v Speaker 5>I think, you know, they misfired. For one thing, I

0:17:30.320 --> 0:17:33.159
<v Speaker 5>think the presumption that tariff was not going to be

0:17:33.200 --> 0:17:36.720
<v Speaker 5>inflationary was I don't know what they got that from,

0:17:36.760 --> 0:17:38.280
<v Speaker 5>and I'll tell you where they got that from, by

0:17:38.320 --> 0:17:42.400
<v Speaker 5>the way, And that was perhaps the biggest, biggest, basically

0:17:42.840 --> 0:17:46.080
<v Speaker 5>you know, essential, the assumption that we're making when they

0:17:46.119 --> 0:17:49.160
<v Speaker 5>basically unleashed this trade war because Trump figured that well,

0:17:49.359 --> 0:17:52.800
<v Speaker 5>first time trade war didn't have any impact on prices,

0:17:52.840 --> 0:17:55.800
<v Speaker 5>so he expected this time the same to happen as well,

0:17:56.080 --> 0:17:59.960
<v Speaker 5>and that unfortunately, I don't care where Pritnavar got his PhD.

0:18:00.200 --> 0:18:03.000
<v Speaker 5>Is worth nothing. His degree is not worth a piece

0:18:03.000 --> 0:18:05.159
<v Speaker 5>of papers written on. But let me tell you what.

0:18:06.040 --> 0:18:11.000
<v Speaker 5>The reason why the inflationary effect associated with Trump's trade

0:18:11.000 --> 0:18:15.920
<v Speaker 5>War one was so limited was because Chinese companies were

0:18:15.960 --> 0:18:19.480
<v Speaker 5>able to set up shop very quickly somewhere else in

0:18:19.520 --> 0:18:22.359
<v Speaker 5>the Philippines, Indonesia.

0:18:21.400 --> 0:18:22.400
<v Speaker 4>And whatever they want.

0:18:22.640 --> 0:18:26.320
<v Speaker 5>They were able to circumvent the US tariff by continuing

0:18:26.359 --> 0:18:28.840
<v Speaker 5>to export to the US at whatever price they were

0:18:28.880 --> 0:18:32.600
<v Speaker 5>selling previously the US. So in a way, if there

0:18:32.720 --> 0:18:36.080
<v Speaker 5>was very little price impact was because Chinese companies were

0:18:36.160 --> 0:18:40.000
<v Speaker 5>able to circumvent the tiff. This time, the entire tariff

0:18:40.320 --> 0:18:44.439
<v Speaker 5>is designed to leave Chinese companies with no place to hide.

0:18:44.480 --> 0:18:47.720
<v Speaker 5>As you know, like the only reason why like Trump

0:18:47.760 --> 0:18:51.840
<v Speaker 5>hasn't take out the whatever even the fists in basically,

0:18:51.960 --> 0:18:55.400
<v Speaker 5>I mean, you know, hasn't basically did not apply additional

0:18:55.560 --> 0:18:58.840
<v Speaker 5>reciprocal tariff on Mexico is because Mexico had already agreed

0:18:59.359 --> 0:19:03.120
<v Speaker 5>to adopt the same US tariff on Chinese imports. So

0:19:03.240 --> 0:19:06.560
<v Speaker 5>this time, no, this is the why Southeast Asia got

0:19:06.640 --> 0:19:09.200
<v Speaker 5>hit really hard this time, you know, in the reciprocal

0:19:09.280 --> 0:19:13.080
<v Speaker 5>terraff It's because precisely, Navarro and others. They understand they

0:19:13.119 --> 0:19:15.840
<v Speaker 5>need to. They want to close the back doors to China,

0:19:15.920 --> 0:19:18.920
<v Speaker 5>so this time there is no cushion in the system.

0:19:19.160 --> 0:19:20.000
<v Speaker 4>You're gonna see.

0:19:19.800 --> 0:19:23.399
<v Speaker 5>One pass through in terms of prices. In fact, the

0:19:23.480 --> 0:19:26.840
<v Speaker 5>Chinese government apparently has decided that the more passed thorugh

0:19:27.160 --> 0:19:30.280
<v Speaker 5>the better. The reason being that, you know, we all know.

0:19:30.359 --> 0:19:32.400
<v Speaker 5>Only a couple of weeks ago, I think the Chinese

0:19:32.560 --> 0:19:36.520
<v Speaker 5>uh in Beijing, Chinese officials met with Costco, with Walmart

0:19:36.720 --> 0:19:40.639
<v Speaker 5>and warned them against applying pressure on Chinese suppliers to

0:19:40.720 --> 0:19:43.600
<v Speaker 5>basically to take the hit on terror. The reason is

0:19:43.640 --> 0:19:46.840
<v Speaker 5>because I think from the Chinese perspective, they think that

0:19:47.200 --> 0:19:50.920
<v Speaker 5>once the price effect associated with the tariff is unleashed

0:19:50.960 --> 0:19:54.359
<v Speaker 5>onto the US economy, onto the US consumers, it's going

0:19:54.440 --> 0:19:57.040
<v Speaker 5>to get so bad that Trump will have no choice

0:19:57.280 --> 0:20:00.239
<v Speaker 5>but to basically stand down then. And I think this

0:20:00.280 --> 0:20:03.280
<v Speaker 5>is the reason why, in a way I said that

0:20:03.320 --> 0:20:05.600
<v Speaker 5>we're right now in round two of this trade war.

0:20:05.680 --> 0:20:07.720
<v Speaker 5>I think the round one basically ended the last week.

0:20:07.920 --> 0:20:11.000
<v Speaker 5>We're now round two Round two. You know, you could

0:20:11.119 --> 0:20:14.600
<v Speaker 5>argue that China enjoyed the advantage in so far that

0:20:14.800 --> 0:20:17.199
<v Speaker 5>time is on their side, and I think, you know,

0:20:17.280 --> 0:20:18.440
<v Speaker 5>I think things are going to give wrong.

0:20:19.000 --> 0:20:22.600
<v Speaker 3>I have many questions, but just to start with, okay,

0:20:22.920 --> 0:20:26.800
<v Speaker 3>why should I care whether it's Trump or his policy

0:20:26.840 --> 0:20:30.560
<v Speaker 3>advisors being you know, uber hawkish on China. Why does

0:20:30.600 --> 0:20:33.280
<v Speaker 3>that matter when the policy result seems to be, you know,

0:20:33.359 --> 0:20:36.560
<v Speaker 3>pretty much the same. And then secondly, you talked about

0:20:36.600 --> 0:20:40.600
<v Speaker 3>the pain potentially coming this summer. We've seen a lot

0:20:40.600 --> 0:20:43.280
<v Speaker 3>of people in markets start to talk about the idea

0:20:43.320 --> 0:20:45.920
<v Speaker 3>that maybe there isn't a Trump put right, like, maybe

0:20:46.000 --> 0:20:49.560
<v Speaker 3>he doesn't care about stock prices this time around. So

0:20:49.640 --> 0:20:53.000
<v Speaker 3>what exactly is going to be the catalyst for some

0:20:53.040 --> 0:20:54.480
<v Speaker 3>sort of detent.

0:20:55.119 --> 0:20:57.159
<v Speaker 5>Yeah, Cracie, I think it's a very good point. But

0:20:57.720 --> 0:21:01.760
<v Speaker 5>you see, again, this is whether Trump or somebody else

0:21:02.240 --> 0:21:04.120
<v Speaker 5>around him, I think it makes a very big difference

0:21:04.119 --> 0:21:06.760
<v Speaker 5>in so far in this respect, let me basically take

0:21:06.800 --> 0:21:08.679
<v Speaker 5>it back for a second and you would allow me,

0:21:08.720 --> 0:21:11.360
<v Speaker 5>because I think, please, this is connected to a lot

0:21:11.359 --> 0:21:12.400
<v Speaker 5>of other things start.

0:21:12.160 --> 0:21:13.080
<v Speaker 4>On the table right now.

0:21:13.600 --> 0:21:16.720
<v Speaker 5>For example, I thought it was a huge mistake that

0:21:16.800 --> 0:21:21.000
<v Speaker 5>Trump started his presidency by making stopping the war in

0:21:21.119 --> 0:21:25.600
<v Speaker 5>Ukraine a top priority. Okay, he thought that he was

0:21:25.640 --> 0:21:27.000
<v Speaker 5>going to be able to stop in twenty four hours.

0:21:27.040 --> 0:21:29.040
<v Speaker 5>Forget about twenty fourth let to say he was indeed

0:21:29.080 --> 0:21:32.320
<v Speaker 5>being sarcastic. But you know, I can tell you this.

0:21:32.400 --> 0:21:35.600
<v Speaker 5>At the beginning of his presidency, polymarket was giving a

0:21:35.760 --> 0:21:38.199
<v Speaker 5>seventy percent chance that he was going to stop the

0:21:38.240 --> 0:21:41.720
<v Speaker 5>war basically by one hundred days into his presidency, and

0:21:41.720 --> 0:21:43.960
<v Speaker 5>now it's right now currently less than three percent.

0:21:44.040 --> 0:21:44.320
<v Speaker 4>Chants.

0:21:44.560 --> 0:21:47.679
<v Speaker 5>Now, this is why Trump went on this you know,

0:21:48.119 --> 0:21:52.960
<v Speaker 5>trauma offensive with Putin, that he appeased Putin and literally

0:21:53.160 --> 0:21:55.400
<v Speaker 5>was you know, I'm not going to use any more

0:21:55.480 --> 0:21:58.560
<v Speaker 5>exaggerated adjective at this point, but let's put it this way.

0:21:58.920 --> 0:22:01.800
<v Speaker 5>Trump didn't understand that there was no way in hell

0:22:02.560 --> 0:22:06.680
<v Speaker 5>that Putin was going to agree to a ceasefire without

0:22:06.720 --> 0:22:10.200
<v Speaker 5>having taken control of the rest of Donskue, where they've

0:22:10.200 --> 0:22:13.960
<v Speaker 5>been stuck in basically very very thrown out battles for

0:22:14.040 --> 0:22:14.919
<v Speaker 5>the last six months.

0:22:15.040 --> 0:22:16.080
<v Speaker 4>But it doesn't really matter.

0:22:16.320 --> 0:22:19.480
<v Speaker 5>The point here is that I think three months in

0:22:19.600 --> 0:22:23.280
<v Speaker 5>his presidency, Trump has got nothing to show for visa

0:22:23.359 --> 0:22:28.879
<v Speaker 5>the Ukraine, even though he has rupture transatlantic relations. He

0:22:29.000 --> 0:22:32.720
<v Speaker 5>has sold Ukraine down the river, and he's got nothing

0:22:32.760 --> 0:22:36.359
<v Speaker 5>to show for and Putin is not buying it. Guess

0:22:36.440 --> 0:22:39.480
<v Speaker 5>what At this point, in my humble opinion, Trump has

0:22:39.560 --> 0:22:43.399
<v Speaker 5>one of two choices. He could either pivot by getting

0:22:43.640 --> 0:22:46.840
<v Speaker 5>much tougher with Putin. Okay, so you see an increase

0:22:46.880 --> 0:22:51.360
<v Speaker 5>in geopolitical risk in bullish gold, or that he has

0:22:51.400 --> 0:22:54.720
<v Speaker 5>to go even tougher in China because at this point,

0:22:54.920 --> 0:22:56.200
<v Speaker 5>you know what, you cannot be.

0:22:56.240 --> 0:22:59.520
<v Speaker 4>Seen as being weak on both Russia and China. Forget

0:22:59.560 --> 0:23:00.000
<v Speaker 4>about you.

0:23:00.520 --> 0:23:04.080
<v Speaker 5>I mean, it's pretty amazing what basically Steve Wikoff is

0:23:04.119 --> 0:23:08.360
<v Speaker 5>now proposing. By the way, capping Iranian Richmond at three

0:23:08.400 --> 0:23:11.600
<v Speaker 5>point sixty seven percent was the key component of the

0:23:11.640 --> 0:23:15.040
<v Speaker 5>Obama you clear agreement with the Iran that Trump walked

0:23:15.040 --> 0:23:19.320
<v Speaker 5>away from. So Trump is like going super dubbish rat

0:23:19.400 --> 0:23:24.280
<v Speaker 5>shot a basically in Iran. Guess what If he wants

0:23:24.320 --> 0:23:27.679
<v Speaker 5>to continue that dubbish approach, then he will have to

0:23:27.800 --> 0:23:31.000
<v Speaker 5>throw some red meat to the China Hawks within this administration,

0:23:31.240 --> 0:23:34.960
<v Speaker 5>which means getting tougher on China. In my view, there

0:23:35.000 --> 0:23:37.160
<v Speaker 5>is very little I mean, I you know, I feel

0:23:37.200 --> 0:23:40.159
<v Speaker 5>sorry for Scott Beston. Guess Scott's a very nice Scott. No, Scott,

0:23:40.280 --> 0:23:42.719
<v Speaker 5>Scott is not a China Hawk. I wouldn't say Scott

0:23:42.760 --> 0:23:45.600
<v Speaker 5>is a China hawk. He's certainly you know, he he

0:23:45.640 --> 0:23:48.000
<v Speaker 5>doesn't hate China in that sense, but there are a

0:23:48.000 --> 0:23:50.600
<v Speaker 5>lot of people within the administrations who think that this

0:23:50.720 --> 0:23:53.960
<v Speaker 5>is the time to destroy the Chinese economy once for all, right,

0:23:54.200 --> 0:23:56.639
<v Speaker 5>Because the point here is it's not just about the

0:23:56.680 --> 0:23:59.600
<v Speaker 5>fact that while Chinese export to the US, it's probably

0:23:59.600 --> 0:24:01.920
<v Speaker 5>around five percent of Chinese GDP if you look at

0:24:01.960 --> 0:24:04.560
<v Speaker 5>both the wrect and indirect you know, forty percent of

0:24:04.640 --> 0:24:07.880
<v Speaker 5>Chinese industrial production. But more important is the fact that

0:24:08.000 --> 0:24:10.959
<v Speaker 5>the Chinese economies already on his knees, you know, forty

0:24:11.080 --> 0:24:16.639
<v Speaker 5>percent of GDP's investment. If we can someholp decimate China's export,

0:24:16.880 --> 0:24:20.800
<v Speaker 5>then we can basically bankrupt their business model, and then

0:24:21.000 --> 0:24:22.800
<v Speaker 5>you know, the whole economy goes into the recession and

0:24:22.840 --> 0:24:24.040
<v Speaker 5>who knows what happens.

0:24:23.720 --> 0:24:25.239
<v Speaker 4>And then they will be able to play catch up

0:24:25.240 --> 0:24:25.720
<v Speaker 4>with us.

0:24:26.080 --> 0:24:28.200
<v Speaker 5>So what I'm telling you is that, in fact, actually

0:24:28.240 --> 0:24:31.280
<v Speaker 5>it is interesting because you only win Trump can actually

0:24:31.359 --> 0:24:34.880
<v Speaker 5>keep going with this trade war by getting the support

0:24:34.920 --> 0:24:37.119
<v Speaker 5>from the general public, from Congress and say you know

0:24:37.160 --> 0:24:41.640
<v Speaker 5>what this is about China. Nobody right now will say,

0:24:41.640 --> 0:24:44.640
<v Speaker 5>oh wow, let's you know, let's be nicer to the Chinese,

0:24:44.760 --> 0:24:47.359
<v Speaker 5>because right now, anybody who stands up to the Chinese,

0:24:47.400 --> 0:24:50.560
<v Speaker 5>they're seen as traders right away. And that to me

0:24:50.680 --> 0:24:52.760
<v Speaker 5>is the most interesting part of the story, which is

0:24:52.800 --> 0:24:56.840
<v Speaker 5>that I think the China Hawks in many ways have prevailed,

0:24:57.440 --> 0:25:01.040
<v Speaker 5>and Trump right now is having two essentially see the

0:25:01.119 --> 0:25:02.960
<v Speaker 5>grounded that because in a way, he's got nothing to

0:25:03.000 --> 0:25:05.440
<v Speaker 5>show for right now, and then he wants to keep

0:25:05.440 --> 0:25:07.280
<v Speaker 5>the trade work going. The only way you can do

0:25:07.320 --> 0:25:09.160
<v Speaker 5>that is by saying this is about China.

0:25:09.280 --> 0:25:12.200
<v Speaker 3>Right So, just on the second part of the question,

0:25:12.280 --> 0:25:15.679
<v Speaker 3>then what is the catalyst for a detente and is it,

0:25:15.760 --> 0:25:17.880
<v Speaker 3>you know, some sort of policy win for the Trump

0:25:17.920 --> 0:25:21.520
<v Speaker 3>administration that maybe allows him to back down a little

0:25:21.520 --> 0:25:24.359
<v Speaker 3>bit on behalf of the China Hawks. I guess I

0:25:24.400 --> 0:25:24.960
<v Speaker 3>think you know that.

0:25:25.080 --> 0:25:28.480
<v Speaker 5>I mean political actually write a very interesting story answerably

0:25:28.560 --> 0:25:31.359
<v Speaker 5>on Friday Saturday, Okay, which I think makes sense. I mean,

0:25:31.400 --> 0:25:34.200
<v Speaker 5>I don't believe everything they say, but in this particular case,

0:25:34.240 --> 0:25:36.280
<v Speaker 5>I think it sort of makes some sense, which is

0:25:36.320 --> 0:25:40.240
<v Speaker 5>that forget about like Trump and she are not talking

0:25:40.800 --> 0:25:43.480
<v Speaker 5>like even if back channel is not working. The one

0:25:43.560 --> 0:25:46.960
<v Speaker 5>reason is interesting because Trump wants to basically manage the

0:25:47.119 --> 0:25:49.800
<v Speaker 5>entire process on his own. He wants to talk to

0:25:49.880 --> 0:25:52.640
<v Speaker 5>she think, think directly. This is why he doesn't want

0:25:52.720 --> 0:25:55.320
<v Speaker 5>to send people to China, talk to the Chinese. He

0:25:55.400 --> 0:25:57.000
<v Speaker 5>wants to get on the phone with she didn't think

0:25:57.040 --> 0:25:58.720
<v Speaker 5>and she think right now? Is not returning the call?

0:25:58.800 --> 0:26:01.080
<v Speaker 5>Well right, it doesn't want to talk, okay, And I

0:26:01.119 --> 0:26:04.600
<v Speaker 5>can perfectly understand why, by the way, but interesting things

0:26:04.760 --> 0:26:08.800
<v Speaker 5>I think Trump listen. Trump is very suspicious of everybody

0:26:08.880 --> 0:26:10.919
<v Speaker 5>around him, including Rubio by the way, but just think

0:26:10.960 --> 0:26:13.879
<v Speaker 5>about this, you ask yourself Steve Wikoff, why is Steve

0:26:13.920 --> 0:26:18.160
<v Speaker 5>Wikoff like the hardest working man in the Trump administration.

0:26:18.280 --> 0:26:21.359
<v Speaker 5>This is the man who has already met with Putin

0:26:21.400 --> 0:26:24.520
<v Speaker 5>three times. He's the guy who basically met with the

0:26:24.520 --> 0:26:28.680
<v Speaker 5>Iranians twice. He is the guy who basically negotiated the

0:26:28.680 --> 0:26:32.080
<v Speaker 5>the cease fire Gaza. This guy seems to be the

0:26:32.200 --> 0:26:36.280
<v Speaker 5>unofficial Secretary of State. In my humble opinion, the reason

0:26:36.280 --> 0:26:40.760
<v Speaker 5>why Steve Wikoff is everywhere is not because it's not

0:26:40.840 --> 0:26:44.800
<v Speaker 5>a reflection of his diplomatic savvy, but because Trump trusts him.

0:26:45.160 --> 0:26:49.000
<v Speaker 5>Because guess what, I think he's no more than Trump's messenger.

0:26:50.119 --> 0:26:52.120
<v Speaker 5>And so from that point of view, because Trump doesn't

0:26:52.119 --> 0:26:55.240
<v Speaker 5>trust anybody Trump. The fact that Steve Wikoff is so

0:26:55.320 --> 0:26:57.720
<v Speaker 5>prominent means that Trump is running US foreign policy or

0:26:57.760 --> 0:27:00.480
<v Speaker 5>by himself. And I think this is going to be

0:27:00.520 --> 0:27:15.080
<v Speaker 5>specially so in terms of discussion negotiation with the Chinese.

0:27:19.440 --> 0:27:22.920
<v Speaker 2>Yeah, Steve wouldcof He's a real estate guy from New York.

0:27:23.040 --> 0:27:25.159
<v Speaker 2>So he does seem to like he doesn't have a

0:27:25.160 --> 0:27:27.959
<v Speaker 2>real diplomatic background. He's a real estate guy in New

0:27:28.040 --> 0:27:31.639
<v Speaker 2>York who's now the uh Special Envoy to the Middle East.

0:27:31.920 --> 0:27:35.200
<v Speaker 2>And so I'm not surprised that maybe Uh Trump sees

0:27:35.240 --> 0:27:36.000
<v Speaker 2>him as the best.

0:27:36.040 --> 0:27:39.359
<v Speaker 5>Now the special period. He's the presidential He's not just

0:27:39.440 --> 0:27:42.120
<v Speaker 5>a special envoy for the Middle East. His title now

0:27:42.160 --> 0:27:43.040
<v Speaker 5>is a special Envoy.

0:27:43.240 --> 0:27:47.359
<v Speaker 2>But it does seem like Trump himself, as you say,

0:27:47.440 --> 0:27:50.280
<v Speaker 2>like he wants to shake she's hand. He I mean

0:27:50.320 --> 0:27:52.920
<v Speaker 2>he did. He went to Singapore right in the first

0:27:52.920 --> 0:27:56.560
<v Speaker 2>administration Kim Jong un, right, and like this was like

0:27:56.840 --> 0:27:59.720
<v Speaker 2>what he lives for, right, This is what really getshim excited.

0:27:59.840 --> 0:28:04.560
<v Speaker 2>The opportunity to be on stage and shake hands with

0:28:04.640 --> 0:28:07.000
<v Speaker 2>these guys and be part of it and come up

0:28:07.040 --> 0:28:10.399
<v Speaker 2>with negotiation that strikes me is actually a sort of

0:28:10.720 --> 0:28:14.879
<v Speaker 2>very useful read into how Trump thinks about international relations.

0:28:15.320 --> 0:28:18.280
<v Speaker 5>I mean, TikTok is a great example, right, I mean,

0:28:18.320 --> 0:28:22.680
<v Speaker 5>the fact is that one day before inauguration, everybody thought

0:28:22.800 --> 0:28:24.400
<v Speaker 5>TikTok was finished.

0:28:24.520 --> 0:28:26.800
<v Speaker 4>Yeah right, I mean with you know, Congress already.

0:28:26.520 --> 0:28:30.000
<v Speaker 5>Voted, the Supreme courts had already gone along, and then

0:28:30.320 --> 0:28:33.280
<v Speaker 5>it was it. And then guess what, Trump managed to

0:28:33.320 --> 0:28:35.400
<v Speaker 5>revive it because over a phone call was seeking pink.

0:28:35.680 --> 0:28:38.760
<v Speaker 4>That was it. So from that point of view, again, I.

0:28:38.920 --> 0:28:41.440
<v Speaker 5>Think Trump's made a lot of mistakes, I think, but

0:28:41.560 --> 0:28:44.440
<v Speaker 5>it doesn't take away from the fact that he is

0:28:44.480 --> 0:28:47.160
<v Speaker 5>a dealmaker. He wants to do deals, okay, and I

0:28:47.200 --> 0:28:49.480
<v Speaker 5>think from that point of you he still thinks that he.

0:28:49.480 --> 0:28:51.560
<v Speaker 4>Can pull off a deal with the Chinese.

0:28:52.000 --> 0:28:55.120
<v Speaker 5>The biggest challenge I think he has right now is

0:28:55.160 --> 0:28:59.280
<v Speaker 5>to how to basically repair the total loss of trust

0:28:59.480 --> 0:29:02.600
<v Speaker 5>okay on the Chinese side visa VI Trump, right, because

0:29:02.640 --> 0:29:04.160
<v Speaker 5>I've no doubt, like you know, I mean, I think

0:29:04.200 --> 0:29:06.360
<v Speaker 5>she Ping was like, well, you know, he got the

0:29:06.400 --> 0:29:09.440
<v Speaker 5>invitation to go to the inauguration, he didn't go, but

0:29:09.520 --> 0:29:12.080
<v Speaker 5>he thought that was a real nice gesture. And then

0:29:12.120 --> 0:29:14.920
<v Speaker 5>he spoke with Trump over the phone, and then you know,

0:29:15.200 --> 0:29:17.800
<v Speaker 5>and then even after basically, you know, China was hit

0:29:17.840 --> 0:29:20.640
<v Speaker 5>by the percent tariff on fentannel.

0:29:20.680 --> 0:29:21.800
<v Speaker 4>He was probably thinking that.

0:29:21.760 --> 0:29:23.840
<v Speaker 5>This is going to be okay, But it's like it's

0:29:23.840 --> 0:29:26.480
<v Speaker 5>giving getting wars every single day, you know. What's very interesting.

0:29:26.800 --> 0:29:30.600
<v Speaker 5>So I'm conducting a daily survey believe or not? Okay,

0:29:30.680 --> 0:29:32.280
<v Speaker 5>I mean for the last three year. I mean, I

0:29:32.320 --> 0:29:35.320
<v Speaker 5>have a joint venture, you know, with reewe, which is

0:29:35.360 --> 0:29:39.120
<v Speaker 5>a Toronto based online survey technology company. They're actually a

0:29:39.200 --> 0:29:41.160
<v Speaker 5>list of company in Canada and the one of the

0:29:41.240 --> 0:29:43.560
<v Speaker 5>leading you know, online survey technology companies in the world.

0:29:43.640 --> 0:29:47.080
<v Speaker 5>So it's part of my you know, research process. So

0:29:47.440 --> 0:29:51.440
<v Speaker 5>we have joined forces to conduct proprietary surveys okay for

0:29:51.560 --> 0:29:53.840
<v Speaker 5>my clients. And one of the surveys is what I

0:29:53.840 --> 0:29:57.160
<v Speaker 5>call Cold World two survey. So I'm conducting surveys of

0:29:57.400 --> 0:30:02.120
<v Speaker 5>Chinese people and Americans every single day to gauge how

0:30:02.160 --> 0:30:04.880
<v Speaker 5>they feel about each other, you know, in terms of

0:30:05.040 --> 0:30:08.560
<v Speaker 5>US China relations. It is fascinating, okay. I can tell

0:30:08.560 --> 0:30:12.240
<v Speaker 5>you even until a week ago, the Chinese people, when

0:30:12.240 --> 0:30:15.240
<v Speaker 5>you asked them, like is the US an enemy or

0:30:15.280 --> 0:30:19.800
<v Speaker 5>an ally most Chinese people said all as opposed to enemy.

0:30:19.880 --> 0:30:20.520
<v Speaker 4>Believe or not?

0:30:20.600 --> 0:30:24.800
<v Speaker 5>More people said al eth livi okay. And that tells

0:30:24.920 --> 0:30:27.200
<v Speaker 5>me that even though things were like, you know, getting

0:30:27.200 --> 0:30:30.960
<v Speaker 5>worse and worse and worse, the Chinese media was very careful,

0:30:31.120 --> 0:30:34.680
<v Speaker 5>not too basically stoke, you know, nationalistic fervor in China.

0:30:34.720 --> 0:30:37.120
<v Speaker 5>They were still trying to basically, you know, find a

0:30:37.160 --> 0:30:40.320
<v Speaker 5>way out of this. But the last week, I mean,

0:30:40.480 --> 0:30:44.520
<v Speaker 5>there was this huge spike in terms of percentage of

0:30:44.560 --> 0:30:48.040
<v Speaker 5>my respondents in China who said the US it's an

0:30:48.160 --> 0:30:52.080
<v Speaker 5>enemy and adversary. Now basically forty six percent of Chinese

0:30:52.120 --> 0:30:55.080
<v Speaker 5>said America is an adversary or an enemy versus only

0:30:55.120 --> 0:30:59.520
<v Speaker 5>forty percent of Americans who considered China as such. And

0:30:59.600 --> 0:31:02.080
<v Speaker 5>so that is very very interesting. So from that point

0:31:02.080 --> 0:31:04.080
<v Speaker 5>of view, I think this is the biggest problem, which

0:31:04.120 --> 0:31:07.120
<v Speaker 5>is that EID in China sort of feels like, you know,

0:31:07.680 --> 0:31:10.520
<v Speaker 5>they game Trump three months and then things got worse

0:31:10.560 --> 0:31:13.080
<v Speaker 5>and worse and worse. Maybe they have no idea if

0:31:13.080 --> 0:31:15.600
<v Speaker 5>it's Trump or Trump's advisor, the China Hawks and so

0:31:15.600 --> 0:31:18.120
<v Speaker 5>and so forth, or I knows that they can no

0:31:18.240 --> 0:31:23.920
<v Speaker 5>longer engage, okay, basically, so therefore they're preparing the population

0:31:24.040 --> 0:31:27.920
<v Speaker 5>in China for a long standoff This is why people

0:31:27.960 --> 0:31:30.400
<v Speaker 5>are wrong to call this thing, oh game of chicken,

0:31:30.600 --> 0:31:33.400
<v Speaker 5>because in a game. I'm a professor of economics here

0:31:33.400 --> 0:31:36.320
<v Speaker 5>in Israel, and I teach game theory in game theory. Yeah,

0:31:36.360 --> 0:31:38.640
<v Speaker 5>I mean everybody who's taking the course in game theory,

0:31:38.680 --> 0:31:41.000
<v Speaker 5>they think about game of chicken gaming chicken. By the way,

0:31:41.080 --> 0:31:44.040
<v Speaker 5>it's completely irrelevant at this point because in a game

0:31:44.080 --> 0:31:47.880
<v Speaker 5>of chicken, as you know, one side will capitulate before

0:31:47.880 --> 0:31:52.520
<v Speaker 5>the collision, so that nothing happens. Okay, nothing happens, So

0:31:52.560 --> 0:31:55.880
<v Speaker 5>somebody stops before something bad happens. I would argue, we've

0:31:55.920 --> 0:31:58.960
<v Speaker 5>already gone beyond a game of chicken. We're now in

0:31:59.000 --> 0:32:02.160
<v Speaker 5>a war of attrition. A war of Attrician is another

0:32:02.160 --> 0:32:05.040
<v Speaker 5>game in game theory, except war of Attrician. Basically, the

0:32:05.080 --> 0:32:08.840
<v Speaker 5>game continues even though it continues to inflict pain on

0:32:08.960 --> 0:32:12.920
<v Speaker 5>both sides, but both sides sort of hang on until

0:32:13.080 --> 0:32:16.640
<v Speaker 5>one side finally capitulated because the pain becomes unbearable, a.

0:32:16.640 --> 0:32:18.400
<v Speaker 4>Little bit like World War One if you like it.

0:32:18.840 --> 0:32:21.320
<v Speaker 4>And I think the Chinese are now preparing for this

0:32:21.400 --> 0:32:24.160
<v Speaker 4>war attrition. And this is why I think Trump is

0:32:24.160 --> 0:32:26.840
<v Speaker 4>still thinking he's gonna get the Chinese, gonna get basically

0:32:26.840 --> 0:32:28.719
<v Speaker 4>shooting being on the phone he's gonna do this, and

0:32:28.760 --> 0:32:32.120
<v Speaker 4>that I am doubtful. I mean even Scott Besson, as

0:32:32.160 --> 0:32:35.200
<v Speaker 4>I said before, because Scott is not really he's not

0:32:35.240 --> 0:32:38.920
<v Speaker 4>a political type. He doesn't understand the hatred there is

0:32:38.960 --> 0:32:41.960
<v Speaker 4>for China in Washington, and I think from that point

0:32:42.000 --> 0:32:43.680
<v Speaker 4>of view, Trump is going to be It's going to

0:32:43.720 --> 0:32:46.400
<v Speaker 4>be difficult for Trump, but anybody can do but it's

0:32:46.400 --> 0:32:48.600
<v Speaker 4>still Trump. But I'm just saying it's gonna be very difficult.

0:32:48.640 --> 0:32:51.640
<v Speaker 2>Tracy. In our episode with Martin Wolf, I brought up

0:32:51.640 --> 0:32:53.320
<v Speaker 2>the fact that, you know, for the first time, I

0:32:53.360 --> 0:32:56.560
<v Speaker 2>actually think it's really important to read those surveys of

0:32:56.680 --> 0:33:00.640
<v Speaker 2>international perspectives on China or on the US, and David

0:33:00.680 --> 0:33:03.200
<v Speaker 2>giving a great example of like why for any leader

0:33:03.240 --> 0:33:07.280
<v Speaker 2>globally now just China, the domestic attitudes probably really matter

0:33:07.320 --> 0:33:09.959
<v Speaker 2>if any leader wants to maintain domestic legitimacy.

0:33:11.360 --> 0:33:14.160
<v Speaker 3>Sure, although one thing I would say in China is

0:33:14.240 --> 0:33:18.560
<v Speaker 3>there is a rather authoritarian government. Sure that probably makes

0:33:18.640 --> 0:33:21.000
<v Speaker 3>a difference in that dynamic. But David, I want to

0:33:21.040 --> 0:33:24.280
<v Speaker 3>ask you a question. So you're a smart guy, reasonably

0:33:24.320 --> 0:33:26.800
<v Speaker 3>smart guy. That's one of the biggest compliments I've ever

0:33:26.880 --> 0:33:28.120
<v Speaker 3>given on all blots.

0:33:27.920 --> 0:33:31.000
<v Speaker 2>By the way, is so thrial.

0:33:31.400 --> 0:33:34.640
<v Speaker 3>But do you worry at all that when it comes

0:33:34.680 --> 0:33:37.960
<v Speaker 3>to I should say, you're obviously a very keen watcher

0:33:38.240 --> 0:33:40.960
<v Speaker 3>of the White House and everything that's going on there

0:33:41.000 --> 0:33:45.400
<v Speaker 3>and trying to disaggregate you know, what's driving certain policy makers.

0:33:45.960 --> 0:33:49.800
<v Speaker 3>But do you worry that there's a degree of overthinking

0:33:49.920 --> 0:33:53.720
<v Speaker 3>at play here or you know, sane washing perhaps of

0:33:53.920 --> 0:33:56.960
<v Speaker 3>Trump and the administration that you're trying to like put

0:33:56.960 --> 0:34:00.000
<v Speaker 3>a framework on what's happening. That maybe isn't the case,

0:34:00.320 --> 0:34:03.360
<v Speaker 3>Like maybe it is just quite chaotic and people are

0:34:03.440 --> 0:34:05.880
<v Speaker 3>unsure of what they're doing, unsure of what the ultimate

0:34:05.920 --> 0:34:06.440
<v Speaker 3>goals are.

0:34:07.040 --> 0:34:10.960
<v Speaker 5>I do agree with that. I do think that, like

0:34:11.120 --> 0:34:14.719
<v Speaker 5>in a way I was hoping for more. I mean

0:34:14.760 --> 0:34:17.200
<v Speaker 5>to the extent that you know, like for example, Dulge

0:34:17.280 --> 0:34:19.680
<v Speaker 5>is a good example. Right, So Elon Mosk was like,

0:34:19.719 --> 0:34:22.920
<v Speaker 5>you know what he had three months after? Yeah, the elections,

0:34:22.960 --> 0:34:26.520
<v Speaker 5>prepare for those, right, I mean he supposedly had like

0:34:26.640 --> 0:34:29.920
<v Speaker 5>hundreds of legal advice. There's also some people they figured

0:34:29.920 --> 0:34:33.400
<v Speaker 5>out everything and guess what, it's gone from two trillion

0:34:33.440 --> 0:34:36.839
<v Speaker 5>dollars to one trillion dollars and then whatever. Ten days ago,

0:34:36.880 --> 0:34:39.840
<v Speaker 5>he declared Jub's cabinet He's going to find one hundred

0:34:39.880 --> 0:34:42.680
<v Speaker 5>and fifty million dollars of cuts for the twenty twenty

0:34:42.719 --> 0:34:48.600
<v Speaker 5>six budget. I mean, I track the daily US Treasury statement, okay,

0:34:49.040 --> 0:34:53.560
<v Speaker 5>which tracks every single like whatever, in aggregate, but in

0:34:53.719 --> 0:34:56.560
<v Speaker 5>very detailed form every dollar that goes out of the

0:34:56.600 --> 0:34:59.239
<v Speaker 5>Treasury count that the US federal government keeps with the

0:34:59.239 --> 0:35:01.480
<v Speaker 5>Federal Reserve where all this money goes in and out.

0:35:01.760 --> 0:35:04.040
<v Speaker 5>And let me tell you this, I cannot see any

0:35:04.120 --> 0:35:08.239
<v Speaker 5>evidence of any spending come so far. Okay, So what

0:35:08.280 --> 0:35:11.120
<v Speaker 5>I'm telling you is this, I mean, and that's Ela Mosque,

0:35:11.640 --> 0:35:14.000
<v Speaker 5>you know, which scares me because I've always thought about

0:35:14.000 --> 0:35:15.680
<v Speaker 5>Elamsk is supposed to be a very smart guy.

0:35:15.840 --> 0:35:16.520
<v Speaker 4>You know this guy.

0:35:16.840 --> 0:35:18.520
<v Speaker 5>I mean, you don't become the richest man in the

0:35:18.560 --> 0:35:21.560
<v Speaker 5>world just by talking big. Well maybe he does. Maybe

0:35:21.640 --> 0:35:24.279
<v Speaker 5>American capitalism is all about talking big, whatever it is.

0:35:24.560 --> 0:35:29.080
<v Speaker 5>But this is a good example of basically literally like

0:35:29.200 --> 0:35:31.399
<v Speaker 5>you know, talking out of I don't know, I didn't

0:35:31.400 --> 0:35:33.360
<v Speaker 5>want to use any you know things I'm going to

0:35:33.400 --> 0:35:36.560
<v Speaker 5>basically regret. But that's why this trade war thing is

0:35:36.640 --> 0:35:39.920
<v Speaker 5>very important, As I said before, because Trump thought Trump

0:35:40.000 --> 0:35:44.399
<v Speaker 5>is in his political advisors decided that because trade war

0:35:44.800 --> 0:35:48.200
<v Speaker 5>in his first term was not inflationary, therefore it's not

0:35:48.200 --> 0:35:52.000
<v Speaker 5>going to be inflationary this time. Therefore, there's no reason

0:35:52.120 --> 0:35:56.160
<v Speaker 5>for the FAT not to cut interest rates. Okay, and

0:35:56.239 --> 0:35:59.040
<v Speaker 5>that as completely like so you see what I'm saying.

0:35:59.120 --> 0:36:02.239
<v Speaker 5>How that is important because now it's like, well, you know,

0:36:02.360 --> 0:36:05.360
<v Speaker 5>like what Trump now you want you want to fire

0:36:05.480 --> 0:36:08.359
<v Speaker 5>basically power. Why did you think about that three weeks

0:36:08.400 --> 0:36:10.640
<v Speaker 5>ago or a month ago, or even two months ago

0:36:10.640 --> 0:36:11.520
<v Speaker 5>when you're planning this.

0:36:11.520 --> 0:36:12.600
<v Speaker 4>Whole tariff business.

0:36:13.239 --> 0:36:16.120
<v Speaker 5>Okay, because I thought, you know, if you could get

0:36:16.120 --> 0:36:19.920
<v Speaker 5>Elon Moss to cut spending and that would be deflationary,

0:36:20.120 --> 0:36:24.320
<v Speaker 5>which could potentially offset any inflationary effect associated with the tariff,

0:36:24.440 --> 0:36:26.440
<v Speaker 5>and then you could get the FED on your side

0:36:26.440 --> 0:36:29.040
<v Speaker 5>if this fiscal tightening. But right now we haven't got

0:36:29.080 --> 0:36:31.520
<v Speaker 5>any fiscal tightening because Elon Muss hasn't been able to

0:36:31.520 --> 0:36:35.200
<v Speaker 5>deliver other than talking big about spending cuts, and the

0:36:35.280 --> 0:36:37.479
<v Speaker 5>tariff is going to be definitely inflationary this time.

0:36:37.719 --> 0:36:38.440
<v Speaker 4>There is no way.

0:36:38.480 --> 0:36:41.400
<v Speaker 5>It doesn't matter whether it's how anybody else it was.

0:36:41.400 --> 0:36:44.640
<v Speaker 5>The German of Federal Reserve, no chairman of Federal Reserve

0:36:45.160 --> 0:36:47.960
<v Speaker 5>will be cutting interest rates right now under the circumstances.

0:36:48.320 --> 0:36:50.080
<v Speaker 5>So from that point of you, for Trump to be

0:36:50.120 --> 0:36:52.879
<v Speaker 5>basically throwing in tangent right now, Pennant Tables said, well,

0:36:53.040 --> 0:36:56.160
<v Speaker 5>how's not doing his job? That to me again just

0:36:56.200 --> 0:37:01.080
<v Speaker 5>shows that this administration is off to a terrible start.

0:37:01.520 --> 0:37:04.600
<v Speaker 5>To extend that, the assumptions that they're making for where

0:37:04.640 --> 0:37:09.760
<v Speaker 5>they get to now were completely wrong. And unfortunately, I'm

0:37:09.800 --> 0:37:12.359
<v Speaker 5>sorry to say this. I think Scott is a great guy.

0:37:12.840 --> 0:37:15.400
<v Speaker 5>But Scott did not have the same kind of relationship

0:37:15.440 --> 0:37:17.600
<v Speaker 5>that Steve Mnuchen had with Trump in his first term.

0:37:17.960 --> 0:37:21.160
<v Speaker 5>If you remember, Steve Mnuchen was Trump's answer the uh,

0:37:21.600 --> 0:37:25.960
<v Speaker 5>you know, campaign campaign share person. Okay, So from that

0:37:26.080 --> 0:37:28.040
<v Speaker 5>point of view, there was much more trust and I

0:37:28.080 --> 0:37:31.600
<v Speaker 5>think therefore Munuchuen was a much more careful person. And

0:37:31.600 --> 0:37:34.960
<v Speaker 5>then where I think Scott business more of an academic philosopher,

0:37:35.080 --> 0:37:37.880
<v Speaker 5>a hedge fun guy who thinks big in terms of

0:37:38.000 --> 0:37:40.360
<v Speaker 5>like the theory, but I think in terms of the

0:37:40.440 --> 0:37:42.440
<v Speaker 5>day to day stuff, I don't know how much influence

0:37:42.480 --> 0:37:44.759
<v Speaker 5>he has over Trump. As a result, I kind of

0:37:44.760 --> 0:37:47.360
<v Speaker 5>feel like I think there are a lot of mistakes

0:37:47.360 --> 0:37:49.120
<v Speaker 5>that have been made, And what worries me more than

0:37:49.160 --> 0:37:52.480
<v Speaker 5>anything else is that maybe these mistakes cannot be undone.

0:37:52.680 --> 0:37:55.239
<v Speaker 2>Okay, what happens when the crunch drives? As you said,

0:37:55.239 --> 0:37:59.040
<v Speaker 2>Americans outside of investors haven't actually felt any of this

0:37:59.080 --> 0:38:02.200
<v Speaker 2>impact at all, Say, like, how does Hollywood even continue

0:38:02.200 --> 0:38:07.840
<v Speaker 2>with something as simple as losing access to affordable advanced lightings?

0:38:07.840 --> 0:38:10.480
<v Speaker 2>And that's just a fairly small sliver of the US economy.

0:38:10.880 --> 0:38:13.759
<v Speaker 2>What does this summer look like to you in the

0:38:13.840 --> 0:38:17.960
<v Speaker 2>United States? Given this war of attrition dynamic that's going on.

0:38:18.560 --> 0:38:20.960
<v Speaker 5>I think it's gonna look a shit show. I really

0:38:21.239 --> 0:38:23.200
<v Speaker 5>believe it's going to be a shit show. I think

0:38:23.200 --> 0:38:25.200
<v Speaker 5>we're going to be going to a recession. I think

0:38:25.239 --> 0:38:28.879
<v Speaker 5>Trump's approval rating is gonna collapse, Okay, And I think

0:38:28.960 --> 0:38:31.200
<v Speaker 5>you know the point here is this? I mean again,

0:38:31.320 --> 0:38:35.320
<v Speaker 5>you know, like obviously you know, there's only one question

0:38:35.400 --> 0:38:38.520
<v Speaker 5>of any interest to anybody right now, which is okay, fine,

0:38:38.680 --> 0:38:41.560
<v Speaker 5>So when will Frump and Shiginging get on the phone?

0:38:41.960 --> 0:38:44.480
<v Speaker 5>That's the only question, right I mean, I think we

0:38:44.480 --> 0:38:47.040
<v Speaker 5>we can only we can say right now that things

0:38:47.160 --> 0:38:50.440
<v Speaker 5>will probably bartom once the two men I've gotten on

0:38:50.440 --> 0:38:52.560
<v Speaker 5>the phone. Where for that matter, from announced that he's

0:38:52.560 --> 0:38:54.960
<v Speaker 5>going to be on his way to Beijing. To me,

0:38:55.520 --> 0:38:57.560
<v Speaker 5>things are not bad enough for him to get to

0:38:57.560 --> 0:39:00.319
<v Speaker 5>that point. So from that point of view, this is

0:39:00.400 --> 0:39:02.360
<v Speaker 5>why I think, you know, at least in the New

0:39:02.440 --> 0:39:05.080
<v Speaker 5>York term, I think stocks are still going lower. I think,

0:39:05.160 --> 0:39:07.920
<v Speaker 5>you know, from that point of view because precisely the

0:39:08.080 --> 0:39:12.440
<v Speaker 5>Chinese believe that time is on their side and Trump.

0:39:12.600 --> 0:39:14.800
<v Speaker 5>The problem is is when you have a one hundred

0:39:14.800 --> 0:39:17.080
<v Speaker 5>and forty five percent tariff on China, how do.

0:39:17.040 --> 0:39:18.160
<v Speaker 4>You even back down from that?

0:39:18.320 --> 0:39:20.120
<v Speaker 5>Let's just say you say, okay, fine, let's go from

0:39:20.239 --> 0:39:23.279
<v Speaker 5>one forty five to one percent, or even to one

0:39:23.360 --> 0:39:25.719
<v Speaker 5>hundred percent. You know what, it makes no difference. And

0:39:25.840 --> 0:39:30.200
<v Speaker 5>one five percent and to one hundred percent, that doesn't

0:39:30.200 --> 0:39:31.880
<v Speaker 5>mean that China is going to be able to explot

0:39:31.880 --> 0:39:34.640
<v Speaker 5>anymore to the US. So from that point of view,

0:39:34.800 --> 0:39:37.560
<v Speaker 5>let's think about that'smare Joe for a second in a negotiation.

0:39:37.719 --> 0:39:39.640
<v Speaker 5>I thought from the very beginning, that's why I thought

0:39:39.640 --> 0:39:42.239
<v Speaker 5>TikTok was a very good beginning. I thought, the only

0:39:42.320 --> 0:39:45.000
<v Speaker 5>way Trump can do deals with China is by doing

0:39:45.000 --> 0:39:47.759
<v Speaker 5>a bunch of small deals they venture add up to

0:39:47.800 --> 0:39:51.120
<v Speaker 5>a big one. But right now, with Tarifa one hundred

0:39:51.120 --> 0:39:53.759
<v Speaker 5>and forty five percent. The only kind of deal you

0:39:53.800 --> 0:39:58.160
<v Speaker 5>can do will be a very big deal. I think

0:39:58.160 --> 0:40:00.319
<v Speaker 5>we can we can all agree right now to do

0:40:00.360 --> 0:40:02.840
<v Speaker 5>a big deal. It's going to be very difficult. For

0:40:02.920 --> 0:40:04.640
<v Speaker 5>one thing, it takes a long time, a lot of time,

0:40:05.200 --> 0:40:07.680
<v Speaker 5>and moreover, it takes a lot of political capital that

0:40:07.719 --> 0:40:11.000
<v Speaker 5>Trump doesn't have. But again you have to remember, you know,

0:40:11.160 --> 0:40:15.160
<v Speaker 5>with elamsk trying to cut spending, the only thing that

0:40:15.200 --> 0:40:17.520
<v Speaker 5>the House and the Senate can agree on is to

0:40:17.520 --> 0:40:18.800
<v Speaker 5>increase defense spending.

0:40:19.440 --> 0:40:20.920
<v Speaker 4>Like this, the only.

0:40:20.719 --> 0:40:23.160
<v Speaker 5>Difference is, well, the House most to increase defense spending

0:40:23.200 --> 0:40:25.399
<v Speaker 5>only by one hundred billion dollars next year. The Senate

0:40:25.480 --> 0:40:27.359
<v Speaker 5>wants to increase about one hundred and fifty billion dollars

0:40:27.400 --> 0:40:29.319
<v Speaker 5>next year. Everything else is going to be going down.

0:40:29.680 --> 0:40:30.000
<v Speaker 4>That's it.

0:40:30.840 --> 0:40:34.759
<v Speaker 5>So when the politicians believe that, you know, China is

0:40:35.040 --> 0:40:39.080
<v Speaker 5>extensive as an existential threat, that these people are evil,

0:40:39.960 --> 0:40:42.680
<v Speaker 5>we need to basically stop them before they stop us,

0:40:43.239 --> 0:40:45.680
<v Speaker 5>then you know what, it would be very very difficult

0:40:45.719 --> 0:40:49.040
<v Speaker 5>for Trump to make that big deal that I think

0:40:49.120 --> 0:40:51.160
<v Speaker 5>is necessary right now to stop this whole thing. And

0:40:51.200 --> 0:40:53.640
<v Speaker 5>this is why I cannot see me just if I

0:40:53.680 --> 0:40:56.000
<v Speaker 5>put my hat as a game theorist on right now.

0:40:56.360 --> 0:40:59.680
<v Speaker 5>I'm struggling to see a way out right now. But

0:41:00.120 --> 0:41:02.640
<v Speaker 5>maybe you know, I'm sure you'll find better, you know,

0:41:02.760 --> 0:41:03.480
<v Speaker 5>more more smart.

0:41:03.520 --> 0:41:06.200
<v Speaker 4>I guess now you do. No, let me know, like

0:41:06.239 --> 0:41:07.839
<v Speaker 4>you know what is the way out here?

0:41:08.400 --> 0:41:12.200
<v Speaker 2>David WU, that was a blast. Really appreciate your perspective.

0:41:12.239 --> 0:41:14.920
<v Speaker 2>And uh, maybe in a six months or a year,

0:41:15.040 --> 0:41:17.360
<v Speaker 2>or when Trump and shouldn't Pin get on the phone,

0:41:17.440 --> 0:41:19.720
<v Speaker 2>we'll have you back. Thank you so much for coming

0:41:19.760 --> 0:41:20.520
<v Speaker 2>back on odd lots.

0:41:20.680 --> 0:41:21.600
<v Speaker 4>Thanks for having me.

0:41:35.000 --> 0:41:36.640
<v Speaker 2>I always feel like I have to catch my breath

0:41:36.640 --> 0:41:39.120
<v Speaker 2>a little bit after talking with David. I knew that

0:41:39.280 --> 0:41:41.160
<v Speaker 2>it's always like, it's always that energy.

0:41:41.480 --> 0:41:44.000
<v Speaker 3>You did say that in the intro, didn't you energetic?

0:41:44.239 --> 0:41:45.959
<v Speaker 2>He's an energetic fellow, that's for sure.

0:41:46.080 --> 0:41:48.120
<v Speaker 3>Yes, for sure. And one thing I will say, I

0:41:48.440 --> 0:41:52.000
<v Speaker 3>really do appreciate some of his insights into the Trump

0:41:52.000 --> 0:41:55.080
<v Speaker 3>administration because in Trump won, you know, a lot of

0:41:55.080 --> 0:41:58.439
<v Speaker 3>people got that call wrong and a lot of people

0:41:58.520 --> 0:42:02.600
<v Speaker 3>thought that we would see in from trade war number one,

0:42:02.680 --> 0:42:05.640
<v Speaker 3>and we didn't really get that. And so it is

0:42:05.760 --> 0:42:08.240
<v Speaker 3>very interesting to me to hear someone who was pretty

0:42:08.239 --> 0:42:13.160
<v Speaker 3>supportive of that administration the first Trump administration, sound quite

0:42:13.360 --> 0:42:17.280
<v Speaker 3>negative on the second administration. And I guess our headline

0:42:17.320 --> 0:42:19.319
<v Speaker 3>for this is going to be, you know, David wu

0:42:19.440 --> 0:42:23.440
<v Speaker 3>on the coming sh show in America.

0:42:23.560 --> 0:42:28.360
<v Speaker 2>Look, whether it's the Bizar, whether it's the Bowyer's, the

0:42:28.480 --> 0:42:31.920
<v Speaker 2>conclusion is this is a very bad situation. Yeah, right,

0:42:32.239 --> 0:42:37.200
<v Speaker 2>And as he said, they've literally gotten zero accomplishments so far.

0:42:37.719 --> 0:42:40.879
<v Speaker 2>The war in Ukraine is still going. There's not even

0:42:40.920 --> 0:42:44.279
<v Speaker 2>a TikTok deal. And then I really do think, you

0:42:44.320 --> 0:42:47.480
<v Speaker 2>know again, like you know, it's useful this idea. It's

0:42:47.480 --> 0:42:50.040
<v Speaker 2>not a game of chicken and the game the damage

0:42:50.160 --> 0:42:53.880
<v Speaker 2>is being done today as we speak, with hardening of

0:42:53.920 --> 0:42:58.799
<v Speaker 2>opinions on both sides and the domestic polity and you know,

0:42:59.160 --> 0:43:03.080
<v Speaker 2>every leader, even an authoritarian one, has to maintain domestic

0:43:03.160 --> 0:43:06.719
<v Speaker 2>legitimacy to varying degrees or another. So this idea that

0:43:06.800 --> 0:43:08.879
<v Speaker 2>like we're you know, this is not a situation where

0:43:08.920 --> 0:43:11.000
<v Speaker 2>someone could blink. There's already been the sort of like

0:43:11.120 --> 0:43:14.520
<v Speaker 2>damage and it drags on further every single day. And

0:43:14.680 --> 0:43:16.400
<v Speaker 2>I think part of what we're seeing in the market

0:43:16.680 --> 0:43:20.479
<v Speaker 2>is no one can see what that obvious offering, even

0:43:20.520 --> 0:43:21.320
<v Speaker 2>those dynamics.

0:43:21.480 --> 0:43:23.680
<v Speaker 3>Yeah, It's funny you said that. I was literally about

0:43:23.719 --> 0:43:26.160
<v Speaker 3>to say the same exact sentence that the off ramp

0:43:26.200 --> 0:43:27.080
<v Speaker 3>is hard to see.

0:43:27.520 --> 0:43:27.719
<v Speaker 5>You know.

0:43:27.760 --> 0:43:30.719
<v Speaker 3>One thing I realized we mentioned wit Coough going from

0:43:30.800 --> 0:43:34.279
<v Speaker 3>like being a real estate guy to special envoy. One

0:43:34.280 --> 0:43:37.400
<v Speaker 3>thing I appreciate about the Trump administration is the ability

0:43:37.680 --> 0:43:42.040
<v Speaker 3>for personal progress in terms of careers like you have

0:43:42.200 --> 0:43:45.520
<v Speaker 3>kind of become. You know, They're very into personal development

0:43:45.680 --> 0:43:49.600
<v Speaker 3>and experimenting with new roles, which is interesting to see.

0:43:49.840 --> 0:43:50.440
<v Speaker 2>That's nice.

0:43:50.560 --> 0:43:53.040
<v Speaker 3>Yeah, I wanted to end on a nice new Yes. Okay,

0:43:53.200 --> 0:43:53.960
<v Speaker 3>shall we leave it there.

0:43:54.040 --> 0:43:54.759
<v Speaker 2>Let's leave it there.

0:43:54.840 --> 0:43:57.160
<v Speaker 3>This has been another episode of the All Thoughts podcast.

0:43:57.280 --> 0:44:00.520
<v Speaker 3>I'm Tracy Alloway. You can follow me at Tracy allow and.

0:44:00.480 --> 0:44:03.400
<v Speaker 2>I'm Joe Wisenthal. You can follow me at the Stalwart.

0:44:03.680 --> 0:44:06.920
<v Speaker 2>Check out David Wu his stuff at David Wu Unbound.

0:44:07.320 --> 0:44:11.520
<v Speaker 2>He's certainly unbound. Follow our producers Carman Rodriguez at Carman Arman,

0:44:11.600 --> 0:44:15.040
<v Speaker 2>dash Ol Bennett at Dashbot and Kilbrooks at Kalebrooks. From

0:44:15.080 --> 0:44:17.800
<v Speaker 2>our odd Laws content, go to bloomberg dot com slash

0:44:17.840 --> 0:44:19.840
<v Speaker 2>odd Lots, where have all of our episodes and a

0:44:19.920 --> 0:44:22.879
<v Speaker 2>daily newsletter that you should subscribe to and you can

0:44:22.960 --> 0:44:24.799
<v Speaker 2>chat about all of these topics. We even have a

0:44:24.840 --> 0:44:28.640
<v Speaker 2>China room in our discord discord dot gg slash.

0:44:28.280 --> 0:44:30.920
<v Speaker 3>Odd Lots And if you enjoy odd Lots, if you

0:44:31.080 --> 0:44:33.640
<v Speaker 3>like it when we talk about the off ramp from

0:44:33.640 --> 0:44:36.400
<v Speaker 3>the trade war or lack thereof, then please leave us

0:44:36.440 --> 0:44:39.960
<v Speaker 3>a positive review on your favorite podcast platform. And remember,

0:44:40.040 --> 0:44:42.719
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0:44:42.880 --> 0:44:45.920
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0:44:45.960 --> 0:44:48.680
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0:45:01.080 --> 0:45:01.120
<v Speaker 5>It