1 00:00:02,720 --> 00:00:09,840 Speaker 1: Bloomberg Audio Studios, podcasts, radio news, but our top story 2 00:00:09,880 --> 00:00:13,880 Speaker 1: this morning, President Trump sets a ten percent minimum global tariff. 3 00:00:14,360 --> 00:00:17,840 Speaker 2: There's been a flurry of deal making and deal breaking 4 00:00:18,160 --> 00:00:21,239 Speaker 2: in the run up to President Trump's August first tariff 5 00:00:21,239 --> 00:00:24,440 Speaker 2: deadlineident Trump has announced the framework for a trade deal 6 00:00:24,520 --> 00:00:27,200 Speaker 2: with the United Kingdom. China, of course, emerging from that 7 00:00:27,240 --> 00:00:30,240 Speaker 2: meeting saying an understanding was reached to extend the tariff truce, 8 00:00:30,320 --> 00:00:32,360 Speaker 2: while the US side is still saying nothing is final 9 00:00:32,440 --> 00:00:35,080 Speaker 2: until President Trump signs off. One made a trade deal 10 00:00:35,159 --> 00:00:38,600 Speaker 2: with the European U, Philippines, Indonesia, and the United States 11 00:00:38,800 --> 00:00:43,159 Speaker 2: fifth the largest trading partner, Japan. Late last night, just 12 00:00:43,320 --> 00:00:47,000 Speaker 2: hours before the deadline, Trump signed an executive order announcing 13 00:00:47,080 --> 00:00:51,240 Speaker 2: new US tariffs on dozens of trading partners. Trump said 14 00:00:51,240 --> 00:00:54,120 Speaker 2: the new tariffs will go into effect next week on 15 00:00:54,160 --> 00:00:58,720 Speaker 2: August seventh. Bloomberg Economics reports that if all the announced 16 00:00:58,800 --> 00:01:02,360 Speaker 2: levies are implemented as promised, the average US teriff rate 17 00:01:02,480 --> 00:01:04,640 Speaker 2: will go up to more than fifteen percent. 18 00:01:05,280 --> 00:01:08,000 Speaker 1: The most surprising thing to me is how President Trump 19 00:01:08,440 --> 00:01:13,880 Speaker 1: has turned people's perspective on trade around completely in just 20 00:01:13,920 --> 00:01:14,839 Speaker 1: a matter of months. 21 00:01:15,160 --> 00:01:19,240 Speaker 2: Brendon Murray has overseen trade coverage for Bloomberg since twenty nineteen. 22 00:01:19,520 --> 00:01:24,920 Speaker 1: Trade deals in the traditional sense are about increasing trade. 23 00:01:25,319 --> 00:01:30,039 Speaker 1: What President Trump is doing is literally designed to lower trade, 24 00:01:30,120 --> 00:01:34,839 Speaker 1: to bring production home, and to sever some of those 25 00:01:34,920 --> 00:01:38,000 Speaker 1: economic ties with countries that we've been doing business with 26 00:01:38,160 --> 00:01:39,040 Speaker 1: for a long time. 27 00:01:39,560 --> 00:01:43,120 Speaker 2: As a world braces for Trump's reciprocal tariffs to actually 28 00:01:43,400 --> 00:01:47,200 Speaker 2: for real this time hit global trade, Brendon says the 29 00:01:47,240 --> 00:01:50,840 Speaker 2: whiplash of the trade war isn't over because many of 30 00:01:50,840 --> 00:01:54,760 Speaker 2: the details of these trade deals are still a moving target. 31 00:01:55,000 --> 00:01:58,600 Speaker 1: What we're seeing is the Trump administration hammering out the 32 00:01:58,640 --> 00:02:03,600 Speaker 1: broad frameworks, trying to get some headline numbers that jump 33 00:02:03,640 --> 00:02:08,200 Speaker 1: off the page, and to get some commitments from countries 34 00:02:08,240 --> 00:02:11,480 Speaker 1: that have been unwilling to open up their markets or 35 00:02:11,800 --> 00:02:14,720 Speaker 1: invest more in the US than they have in the past. 36 00:02:17,080 --> 00:02:23,520 Speaker 2: So is the strategy working. I'm Sarah Holder, and this 37 00:02:23,600 --> 00:02:26,280 Speaker 2: is the big take from Bloomberg News Today. On the 38 00:02:26,280 --> 00:02:30,480 Speaker 2: show Making Sense of Trump's latest trade deadline, I sit 39 00:02:30,520 --> 00:02:34,200 Speaker 2: down with Bloomberg's Global Trade editor Brendan Murray to discuss 40 00:02:34,240 --> 00:02:37,480 Speaker 2: where things stand in the president's ongoing trade war, how 41 00:02:37,560 --> 00:02:41,320 Speaker 2: much work remains, and how Trump has reshaped America's approach 42 00:02:41,400 --> 00:02:50,280 Speaker 2: to trade deals. It can be challenging to keep up 43 00:02:50,320 --> 00:02:53,040 Speaker 2: with the shifting terms of Trump's trade war and all 44 00:02:53,080 --> 00:02:56,799 Speaker 2: the deals his administration is trying to broker. Brennan, how 45 00:02:56,840 --> 00:02:59,920 Speaker 2: have you been making sense of this? Do you have 46 00:03:00,160 --> 00:03:02,640 Speaker 2: a big whiteboard up in the office or something. 47 00:03:02,760 --> 00:03:04,600 Speaker 1: Yeah, I guess you could say it's a whiteboard, but 48 00:03:04,600 --> 00:03:08,919 Speaker 1: it's more like an Excel spreadsheet, a timeline, some post 49 00:03:08,919 --> 00:03:11,000 Speaker 1: it notes, and you know a bunch of sort of 50 00:03:11,080 --> 00:03:14,160 Speaker 1: random things that you know you have to move around. 51 00:03:14,200 --> 00:03:18,000 Speaker 1: This is a very fast moving story. President Trump will 52 00:03:18,160 --> 00:03:21,919 Speaker 1: say he's doing well in trade negotiations with big economies, 53 00:03:22,080 --> 00:03:24,000 Speaker 1: and then the next day he might say, you know, 54 00:03:24,200 --> 00:03:26,600 Speaker 1: deals off. You know, you're facing a tariff of twenty 55 00:03:26,639 --> 00:03:27,400 Speaker 1: percent or whatever. 56 00:03:27,720 --> 00:03:31,359 Speaker 2: You've been overseeing Bloomberg's trade coverage since twenty nineteen. I'm 57 00:03:31,400 --> 00:03:35,080 Speaker 2: wondering how this negotiation process has been different than once 58 00:03:35,480 --> 00:03:36,400 Speaker 2: you've seen before. 59 00:03:36,680 --> 00:03:39,160 Speaker 1: I think it's been very different. The first way it's 60 00:03:39,200 --> 00:03:45,800 Speaker 1: been different is that trade negotiations are notoriously long, grueling. 61 00:03:46,320 --> 00:03:50,000 Speaker 1: They go back and forth, They go between governments, and 62 00:03:50,040 --> 00:03:53,200 Speaker 1: then governments go back to their industries and they go 63 00:03:53,320 --> 00:03:57,240 Speaker 1: line by line and that takes time, and the biggest 64 00:03:57,280 --> 00:04:02,200 Speaker 1: difference with President Trump's trade deals are they're in warp speed. 65 00:04:02,320 --> 00:04:05,880 Speaker 1: They are they're moving in weeks and a couple of 66 00:04:05,920 --> 00:04:08,600 Speaker 1: months rather than a couple of years. So that's just 67 00:04:08,640 --> 00:04:11,400 Speaker 1: the way President Trump operates and did so in the 68 00:04:11,400 --> 00:04:15,040 Speaker 1: private sector, and he's taken that style to governing in 69 00:04:15,080 --> 00:04:18,159 Speaker 1: the White House and using tariffs as kind of the 70 00:04:18,600 --> 00:04:21,680 Speaker 1: big point of leverage that he can use over countries 71 00:04:21,720 --> 00:04:22,680 Speaker 1: in these discussions. 72 00:04:22,960 --> 00:04:27,159 Speaker 2: How do geopolitics come into play when we're talking about 73 00:04:27,200 --> 00:04:29,880 Speaker 2: the trade deals of the Trump presidency versus how trade 74 00:04:29,880 --> 00:04:31,880 Speaker 2: deals have historically been negotiated. 75 00:04:32,160 --> 00:04:34,800 Speaker 1: Yeah, I think what we're seeing emerging is President Trump 76 00:04:35,480 --> 00:04:39,359 Speaker 1: see tariffs as a way to not only reorder the 77 00:04:39,400 --> 00:04:43,000 Speaker 1: global trading system that he's complained about since the nineteen eighties, 78 00:04:43,440 --> 00:04:47,200 Speaker 1: but to get countries in line with what he thinks 79 00:04:47,640 --> 00:04:50,200 Speaker 1: that the US priorities are. We've seen it on a 80 00:04:50,279 --> 00:04:53,560 Speaker 1: number of cases recently. We've seen it with Brazil when 81 00:04:53,600 --> 00:04:56,719 Speaker 1: he's threatened Brazil with a fifty percent tariff because of 82 00:04:56,800 --> 00:04:59,400 Speaker 1: some things going on in their domestic politics. We've seen 83 00:04:59,440 --> 00:05:03,120 Speaker 1: it recently with India where he says we're going to 84 00:05:03,200 --> 00:05:06,360 Speaker 1: put a twenty five percent tariff on you across the board, 85 00:05:06,440 --> 00:05:09,520 Speaker 1: and we're going to penalize you for buying Russian oil. 86 00:05:09,760 --> 00:05:13,559 Speaker 1: He's also intervened in the Cambodia Thailand conflict and said, 87 00:05:13,880 --> 00:05:15,560 Speaker 1: you know, trade is going to be painful for you 88 00:05:15,600 --> 00:05:18,320 Speaker 1: if you don't call a ceasefire. And so he's really 89 00:05:18,400 --> 00:05:22,720 Speaker 1: using tariffs as a tool of foreign policy, not just 90 00:05:22,760 --> 00:05:24,200 Speaker 1: of economic policy anymore. 91 00:05:24,480 --> 00:05:27,760 Speaker 2: Do you think that strategy will be able to be 92 00:05:27,880 --> 00:05:30,680 Speaker 2: used in the same way even after these deals are 93 00:05:31,320 --> 00:05:33,760 Speaker 2: set in stone or is the answer that they'll never 94 00:05:33,800 --> 00:05:34,679 Speaker 2: be set in stone. 95 00:05:34,880 --> 00:05:36,600 Speaker 1: Yeah, I don't think they're really ever going to be 96 00:05:36,640 --> 00:05:39,880 Speaker 1: set in stone. President Trump is feeling pretty emboldened by 97 00:05:39,920 --> 00:05:42,599 Speaker 1: these trade deals that are coming together. They kind of 98 00:05:42,640 --> 00:05:46,240 Speaker 1: feed on themselves. Once you get Japan, then you've got 99 00:05:46,360 --> 00:05:48,800 Speaker 1: leverage over South Korea, And once you get leverage over 100 00:05:48,839 --> 00:05:51,760 Speaker 1: South Korea, then you get leverage over other countries in 101 00:05:51,920 --> 00:05:55,880 Speaker 1: Southeast Asia. The same goes for the European Union. You know, 102 00:05:55,920 --> 00:05:59,320 Speaker 1: once you can get Germany on side, then you know 103 00:05:59,360 --> 00:06:01,080 Speaker 1: France has to go along with it. So I think 104 00:06:01,120 --> 00:06:05,360 Speaker 1: there's a sense that this isn't going to end after 105 00:06:05,560 --> 00:06:08,640 Speaker 1: August first, that this is going to be an ongoing 106 00:06:08,680 --> 00:06:13,160 Speaker 1: way that President Trump conducts his diplomacy as tariffs that 107 00:06:13,240 --> 00:06:16,800 Speaker 1: he can use to accomplish what he's trying to accomplish 108 00:06:17,080 --> 00:06:18,760 Speaker 1: in the world of geopolitics as well. 109 00:06:20,640 --> 00:06:24,320 Speaker 2: After the break, how Trump's trade goals stack up against 110 00:06:24,440 --> 00:06:35,360 Speaker 2: reality on the global stage. Trump's so called Liberation Day 111 00:06:35,560 --> 00:06:39,640 Speaker 2: unleashed tariffs and chaos into the global economy in April. 112 00:06:40,560 --> 00:06:43,599 Speaker 2: Since then, his administration has announced a handful of new 113 00:06:43,600 --> 00:06:46,520 Speaker 2: trade deals with details that are changing by the day. 114 00:06:47,120 --> 00:06:50,160 Speaker 2: So Brendan, when you think about the president's stated goals, 115 00:06:50,279 --> 00:06:53,480 Speaker 2: and when you think about the effect that this trade 116 00:06:53,520 --> 00:06:56,600 Speaker 2: negotiation strategy has already had on our relationships with other 117 00:06:56,640 --> 00:07:01,599 Speaker 2: countries and on the economy, both domestically and abroad, is 118 00:07:01,640 --> 00:07:03,520 Speaker 2: the strategy working. 119 00:07:03,360 --> 00:07:05,120 Speaker 1: Well so far? I'll tell you up a few of 120 00:07:05,279 --> 00:07:08,000 Speaker 1: what we have so far. We have deals with big 121 00:07:08,040 --> 00:07:13,280 Speaker 1: economies like the European Union, Japan, the UK, South Korea, 122 00:07:13,320 --> 00:07:17,000 Speaker 1: and a handful of countries in Asia. And the total 123 00:07:17,080 --> 00:07:20,240 Speaker 1: of those announced deals so far that's about twenty five 124 00:07:20,280 --> 00:07:23,400 Speaker 1: percent of the global economy. So that's not a small number. 125 00:07:23,600 --> 00:07:27,080 Speaker 1: Most people would say those are accomplishments, but getting those 126 00:07:27,360 --> 00:07:33,560 Speaker 1: from fact sheets and social media posts into actual enforceable 127 00:07:34,120 --> 00:07:38,360 Speaker 1: binding agreements is a whole nother step that we're still 128 00:07:38,400 --> 00:07:40,880 Speaker 1: going to have to see play out. Because you see 129 00:07:40,880 --> 00:07:44,400 Speaker 1: these big numbers thrown out from Japan or Korea or 130 00:07:44,440 --> 00:07:46,960 Speaker 1: the European Union, these purchase agreements where they say we'll 131 00:07:47,000 --> 00:07:51,800 Speaker 1: buy this hundreds of billions of dollars worth of American products, 132 00:07:51,840 --> 00:07:55,600 Speaker 1: American energy products for instance. Those are going to take 133 00:07:56,240 --> 00:07:58,960 Speaker 1: a lot of calculating to even see if there's the 134 00:07:59,000 --> 00:08:02,960 Speaker 1: capacity to do that. But this strategy isn't working for everyone. 135 00:08:03,040 --> 00:08:06,400 Speaker 1: The most obvious example of that is India. India was 136 00:08:06,440 --> 00:08:08,800 Speaker 1: in the lead pack a couple of months ago when 137 00:08:08,800 --> 00:08:12,720 Speaker 1: these negotiations started off. President trub said nobody's ever done 138 00:08:12,720 --> 00:08:14,520 Speaker 1: a deal with India. I'm going to do a deal 139 00:08:14,560 --> 00:08:18,360 Speaker 1: with India. And he came out recently and said, you know, 140 00:08:18,560 --> 00:08:21,560 Speaker 1: no deal twenty five percent tariff. Now, he did leave 141 00:08:21,600 --> 00:08:25,480 Speaker 1: that open to further negotiations. But it's a strategy that's 142 00:08:25,520 --> 00:08:30,000 Speaker 1: had mixed success and there's a lot still to verify 143 00:08:30,440 --> 00:08:33,880 Speaker 1: and to see how it's executed to say that it's 144 00:08:33,920 --> 00:08:35,920 Speaker 1: working and then it's actually successful. 145 00:08:36,120 --> 00:08:38,440 Speaker 2: Well, we've also seen a lot of headlines on countries 146 00:08:38,520 --> 00:08:41,960 Speaker 2: agreeing to something seemingly not related to the trade deal, 147 00:08:42,000 --> 00:08:44,640 Speaker 2: like a promise to buy more gas, for example, or 148 00:08:44,760 --> 00:08:48,200 Speaker 2: these investment deals and purchasing agreements that you mentioned with 149 00:08:48,360 --> 00:08:52,679 Speaker 2: details to be hammered out later. How atypical is that 150 00:08:53,400 --> 00:08:56,200 Speaker 2: to see these kinds of ancillary agreements being made on 151 00:08:56,280 --> 00:08:58,040 Speaker 2: top of trade negotiations. 152 00:08:58,280 --> 00:09:02,040 Speaker 1: Well, it's pretty atypical. Well if you compare it to 153 00:09:02,160 --> 00:09:05,559 Speaker 1: the way trade has operated for the past several decades. 154 00:09:05,960 --> 00:09:09,439 Speaker 1: Trade in the globalized system that emerged from the Second 155 00:09:09,520 --> 00:09:13,880 Speaker 1: World War was based on a consistent lowering of tariffs 156 00:09:14,240 --> 00:09:16,800 Speaker 1: and a sense of the more we trade with each other, 157 00:09:16,840 --> 00:09:19,679 Speaker 1: the better off we are. What we're seeing from the 158 00:09:19,720 --> 00:09:25,800 Speaker 1: Trump administration increasingly in these agreements to purchase certain goods 159 00:09:25,840 --> 00:09:30,320 Speaker 1: from the US is something called managed trade. It's basically 160 00:09:30,360 --> 00:09:34,319 Speaker 1: the government saying here's how much you should buy, rather 161 00:09:34,400 --> 00:09:39,080 Speaker 1: than the companies that need these materials deciding for themselves. 162 00:09:39,280 --> 00:09:42,520 Speaker 1: Some would say it's coercive. It's what China has done 163 00:09:42,840 --> 00:09:46,480 Speaker 1: is kind of push its weight around and with smaller countries, 164 00:09:46,640 --> 00:09:49,920 Speaker 1: and it's leading down a road, the critics would say, 165 00:09:50,400 --> 00:09:54,000 Speaker 1: to where it's less efficient for the economy. It's not 166 00:09:54,120 --> 00:09:57,400 Speaker 1: the most effective way to run the global trading system. 167 00:09:57,640 --> 00:09:59,400 Speaker 2: Is it fair to say that managed trade kind of 168 00:09:59,440 --> 00:10:02,079 Speaker 2: flies in the face of free trade? Is managed trade 169 00:10:02,120 --> 00:10:03,080 Speaker 2: free trades opposite? 170 00:10:03,320 --> 00:10:05,240 Speaker 1: Yeah, I mean, I think there's all sorts of different 171 00:10:05,320 --> 00:10:08,600 Speaker 1: kinds of mechanisms for managed trade. But this is a 172 00:10:08,679 --> 00:10:13,200 Speaker 1: government dictating to a certain extent what one country should 173 00:10:13,240 --> 00:10:17,920 Speaker 1: purchase from it, rather than the private sector deciding what 174 00:10:18,200 --> 00:10:20,839 Speaker 1: it should purchase from abroad. So it is a big 175 00:10:20,920 --> 00:10:24,680 Speaker 1: sea change from the way things have run in the past. Now, 176 00:10:24,679 --> 00:10:29,680 Speaker 1: it's not uncommon for countries to agree to say we 177 00:10:29,760 --> 00:10:34,719 Speaker 1: will purchase your supplies over another country's supplies because that 178 00:10:34,840 --> 00:10:38,560 Speaker 1: country is an adversaries. Defense weapons is a good example 179 00:10:38,559 --> 00:10:42,080 Speaker 1: of that. But to have it applied broadly to a 180 00:10:42,120 --> 00:10:44,720 Speaker 1: trading relationship is something that we haven't seen for a 181 00:10:44,720 --> 00:10:45,920 Speaker 1: long time. Brennan. 182 00:10:46,000 --> 00:10:48,280 Speaker 2: You've talked us through the fact that trade deals often 183 00:10:48,679 --> 00:10:51,120 Speaker 2: take years to hammer out, and these new deals have 184 00:10:51,160 --> 00:10:54,280 Speaker 2: been figured out in a matter of months. Has this 185 00:10:54,360 --> 00:10:59,640 Speaker 2: process fundamentally changed the way trade negotiations might unfold? Is 186 00:10:59,679 --> 00:11:02,280 Speaker 2: this going to be a hallmark of the Trump administration 187 00:11:02,960 --> 00:11:05,040 Speaker 2: or could it ripple beyond it? 188 00:11:05,960 --> 00:11:08,880 Speaker 1: Well, so far, none of the other countries that Trump 189 00:11:08,960 --> 00:11:12,360 Speaker 1: is engaged with have gone toe to toe with him 190 00:11:12,920 --> 00:11:16,679 Speaker 1: and adopted this approach. This is the approach Donald Trump 191 00:11:16,720 --> 00:11:20,080 Speaker 1: brought to the White House from his experience as a 192 00:11:20,120 --> 00:11:23,079 Speaker 1: real estate developer. I'm not sure we're going to see 193 00:11:23,760 --> 00:11:27,679 Speaker 1: other countries that are still committed to a globalized free 194 00:11:27,720 --> 00:11:32,840 Speaker 1: trading system suddenly turn protectionists and start adopting the same approach. 195 00:11:33,240 --> 00:11:36,120 Speaker 1: There's a lot of analysts who would say, you know, 196 00:11:36,679 --> 00:11:39,480 Speaker 1: the US is a big economy, but there's another seventy 197 00:11:39,520 --> 00:11:42,120 Speaker 1: five percent of global GDP out there for US to 198 00:11:42,200 --> 00:11:44,880 Speaker 1: do business with, and a lot of countries will just 199 00:11:45,040 --> 00:11:47,160 Speaker 1: do less trade with the United States and we'll try 200 00:11:47,160 --> 00:11:50,360 Speaker 1: to find some others where we can continue along the 201 00:11:50,400 --> 00:11:54,600 Speaker 1: principles of a rules based trading system geared toward lower 202 00:11:54,679 --> 00:11:57,040 Speaker 1: tariffs without the US in the picture. 203 00:11:57,240 --> 00:11:59,400 Speaker 2: Does that scare the analysts you speak to. 204 00:11:59,880 --> 00:12:02,560 Speaker 1: A lot of people see this as the free trade 205 00:12:02,600 --> 00:12:06,640 Speaker 1: pendulum swinging back in the other direction under President Trump. 206 00:12:06,960 --> 00:12:09,440 Speaker 1: But how far that swings, you know, whether that takes 207 00:12:09,480 --> 00:12:11,840 Speaker 1: the whole world with it is still an open question. 208 00:12:12,320 --> 00:12:15,840 Speaker 1: We're watching this experiment in real time, and it's nobody 209 00:12:15,840 --> 00:12:17,240 Speaker 1: really knows where it's going to end up. 210 00:12:21,559 --> 00:12:24,560 Speaker 2: This is the big take from Bloomberg News. I'm Sarah Holder. 211 00:12:24,960 --> 00:12:28,200 Speaker 2: The show is hosted by Me, David gera wanj and 212 00:12:28,240 --> 00:12:32,240 Speaker 2: Seleia Mosen. The show is made by Aaron Edwards, David Fox, 213 00:12:32,360 --> 00:12:36,719 Speaker 2: Eleanor Harrison Dengate, Patti hirsh Rachel Lewis, Krisky, Naomi In, 214 00:12:37,400 --> 00:12:42,480 Speaker 2: Julia Press, Tracy Samuelson, Naomi Shaven, Alex Subia, Julia Weaver, 215 00:12:42,960 --> 00:12:46,560 Speaker 2: Yang Yong and Taka Yasuzawa. To get more from the 216 00:12:46,559 --> 00:12:50,320 Speaker 2: Big Take and unlimited access to all of Bloomberg dot com, 217 00:12:50,440 --> 00:12:55,080 Speaker 2: subscribe today at Bloomberg dot com Slash Podcast offer. Thanks 218 00:12:55,120 --> 00:12:58,720 Speaker 2: for listening. We'll be back on Monday.