Speaker 1: Bloomberg Audio Studios, podcasts, radio news. What I would point
Speaker 1: out to people who take the view that globalization has
Speaker 1: gone too far is that you'll miss it when it's gone.
Speaker 1: We can't roll up those supply chains and cut ourselves
Speaker 1: off from other countries about dramatically changing the way we live.
Speaker 2: I'm Stephanie Flanders, head of Government and Economics at Bloomberg
Speaker 2: and This is Trump Pnomics, the podcast that looks at
Speaker 2: the economic world of Donald Trump, how he's already shaped
Speaker 2: the global economy. What on earth is going to happen
Speaker 2: next this week? Why you'd miss globalization if it went
Speaker 2: Probably a lot more than you think. There's been a
Speaker 2: lot of books written in the last few years about globalization,
Speaker 2: deglobalization and the populist threats to integration. But one that's
Speaker 2: a bit different is Ben Choose Exile Economics. What happens
Speaker 2: if globalization fails. Ben is the policy and analyst correspondent
Speaker 2: at BBC Verify and was previously economics editor of BBC Newsnight,
Speaker 2: a job I used to have million years ago. What's
Speaker 2: distinctive in Ben's approach is he's taking the arguments against integration.
Speaker 2: You might say both seriously and literally he's asking not
Speaker 2: just whether it's desirable for nations to shun globalization to
Speaker 2: be self sufficient, whether it's even possible. I sat down
Speaker 2: with him in late June at an event organized by
Speaker 2: The Conduit in London to discuss his reporting, his style
Speaker 2: of storytelling, and how his own family history played a
Speaker 2: part in the development of the book. I thought it
Speaker 2: was worth sharing with you an edited version of that conversation.
Speaker 2: I started by asking Ben why he decided to write
Speaker 2: the book.
Speaker 1: On that question, I feel incredibly honored to have had
Speaker 1: a sort of front row seat to see the impact
Speaker 1: of globalization firsthand. And of course what does that mean.
Speaker 1: We've all seen globalization in our lives. But because my
Speaker 1: family came from China, my father's family came from China
Speaker 1: in the in nineteen sixty he came over to the UK.
Speaker 1: I was born here, but he's still got family back
Speaker 1: in China, and I first visited. I write about this
Speaker 1: in the book, but I first visited China in nineteen
Speaker 1: eighty five. When I went there, I was a quite
Speaker 1: young child, and I still remember it incredibly vividly, the
Speaker 1: lives they were living those forty odd years ago, and
Speaker 1: it was incredibly uh frugal. Really, you know, in family
Speaker 1: of six lived in about three rooms. They would pull
Speaker 1: out mattresses from under the beds and all sleep on
Speaker 1: the floor, just simply because that's the only way they
Speaker 1: could live. They didn't have things like washing machines, microwaves.
Speaker 1: We were living in Hong Kong at the time, so
Speaker 1: they asked us to sort of go to this special
Speaker 1: friendship store, which is the only place where you could
Speaker 1: get western white goods, and you had to be a
Speaker 1: foreigner to buy them, might from not from China. And
Speaker 1: then we bought it and then get gifted it to them.
Speaker 1: And it's crazy now because you think, how out have
Speaker 1: you ever been to ch I'm sure a lot of
Speaker 1: you being just like how CONSUMERISTI all is. You can
Speaker 1: get anything there that you can get here, iPhone's laptops,
Speaker 1: certainly washing machines. So to see first hand how their
Speaker 1: lives have changed in my lifetime, and I think it
Speaker 1: is very largely due to globalization. So I suppose the
Speaker 1: question is why did I want to write this book?
Speaker 1: Because I think that I could bring something a sort
Speaker 1: of bit of personal experience, if you like, to seeing
Speaker 1: how the good that globalization has done to my own family,
Speaker 1: and to see it very vividly in a personal way
Speaker 1: really brings it home. And when we hear people like
Speaker 1: Robert Leitheiser, who is Donald Trump's first trade advisor in
Speaker 1: his first term, he wrote this book that says it
Speaker 1: with the title No Trade is Free, and he very
Speaker 1: explicitly states that it was a mistake to trade with
Speaker 1: China or allow China specifically into the World Trade Organization
Speaker 1: in two thousand and one. It was a mistake. And
Speaker 1: I just kind of like incredibly jarring, because what comes
Speaker 1: into my mind when I hear that is my own
Speaker 1: family backing Gangdhou in southern China. Well, really wasn't a
Speaker 1: mistake for them. And now we can talk about the
Speaker 1: ways which China does create very serious problems for the
Speaker 1: world trading system in many many ways. But I think
Speaker 1: on a very personal and human level, I think I
Speaker 1: really wanted to tell that the other side of the
Speaker 1: story actually and bring that personal experience to bear.
Speaker 2: I think, and of course I find that criticism about
Speaker 2: the Entry's wto jarring for a whole other reason because
Speaker 2: when I was at the US Treasury, we were just
Speaker 2: negotiating the China entry to the WTO, and since then
Speaker 2: almost everyone thinks that that was a mistake, including many
Speaker 2: of the people who were involved in negotiating it, because
Speaker 2: various assumptions were made about what was going to happen
Speaker 2: to China after that, that they would basically become more
Speaker 2: like us and sort of market driven, that being part
Speaker 2: of the global economy would push them on this same
Speaker 2: path that we've all been on, and that clearly has
Speaker 2: not happened, And you engage very directly with that in
Speaker 2: the book. We should part that briefly, but I guess
Speaker 2: we should also slightly lay out your stall in terms of,
Speaker 2: you know, what's the architecture of the book? How did
Speaker 2: you decide that there are real things that people are
Speaker 2: responding to when they're nervous of globalization?
Speaker 1: Yeah? Absolutely so. The gestination of this book was really
Speaker 1: in the pandemic, when the question that was arising in
Speaker 1: lots of people's minds was, hang on, has globalization gone
Speaker 1: a bit too far? Are we a bit too interconnected?
Speaker 1: Has it made us vulnerable where we thought it was
Speaker 1: making us more prosperous. We all remember in the pandemic
Speaker 1: the shortages of things like masks, medicines, and hard on
Speaker 1: the heels of that, of course, we had Russia's invasion
Speaker 1: of Ukraine in twenty twenty two, where there was a
Speaker 1: big shock to global oil prices and food prices, and
Speaker 1: there was a real sense that we were a bit
Speaker 1: too exposed and maybe we should start to do produce
Speaker 1: more at home, that those supply chains shouldn't be as
Speaker 1: extensive as they are, and that maybe, as I said,
Speaker 1: globalization had gone a bit too far. I really started
Speaker 1: the idea of writing this and it came out of it.
Speaker 1: Actually a BBC radio series I did called The New
Speaker 1: Age of Autarchy with a question actually rather than an answer,
Speaker 1: and that question was is it possible to actually do
Speaker 1: those things to be more self sufficient in terms of
Speaker 1: things like food and energy and medicine, you name it.
Speaker 1: It was a good faith exploration of whether it was
Speaker 1: possible or not. And as I started to write it,
Speaker 1: explore these supply chains in more detail and go into
Speaker 1: some of the complexities of the way the global value
Speaker 1: and supply chains have constructed, it became more and more
Speaker 1: clear to me that actually the answer probably is no.
Speaker 1: At least we can't roll up those supplies chain and
Speaker 1: cut ourselves off from other countries about dramatically changing the
Speaker 1: way we live. And I think on some level we
Speaker 1: all know that, don't we, Because you know globalization if
Speaker 1: you think, well, just look around you. We wake up
Speaker 1: in the morning and you brush your teeth and toothpastes
Speaker 1: from Poland, and you go and have your breakfast and
Speaker 1: the grapes from Egypt, and then you put on your
Speaker 1: clothes and it was perhaps it sticks together in Bangladesh,
Speaker 1: and then you drive your German made car to the office.
Speaker 1: That's the typical way someone describes how globalization shapes our lives,
Speaker 1: and it's all true. But what I discovered in this
Speaker 1: researching this book and lots of other people that made
Speaker 1: this point as well, And it's not just about those
Speaker 1: consumer goods which are the fruits of globalization. It's the
Speaker 1: components which make those consumer goods which are unfathomably globalized
Speaker 1: as well. Just talking about semiconductors, you know, we hear
Speaker 1: about those and we took Trump and others and Biden
Speaker 1: all wanted to make them in America rather than import them.
Speaker 1: But if you look at the supply for something like semiconductors,
Speaker 1: they're so unfathomably complex, coming from hundreds of different countries,
Speaker 1: these raw materials and the machines that make them that
Speaker 1: it really is impossible to see any single country having
Speaker 1: a fully nationalized supply chain in something like semiconductors, computer chips,
Speaker 1: and it goes for many other things as well, and
Speaker 1: I talk about lots of examples of these in the book.
Speaker 1: So Yes. I started out I guess with a question,
Speaker 1: and I came increasingly to an answer, which is that,
Speaker 1: you know, don't take globalization for granted, or don't assume
Speaker 1: that it's going to be simple or easy, which is
Speaker 1: obviously what a lot of the exile economic exponents populist
Speaker 1: politicians say it's going to be quite easy to do
Speaker 1: these things. It really won't be. It'd be very expensive.
Speaker 1: And you know, I'm a BBC journalist. It's not my
Speaker 1: job to say what people should want or what politicians
Speaker 1: should do. What I'm trying to do in this book
Speaker 1: is say, be aware of the costs, be aware of
Speaker 1: the implication it's impossible. Well, you know, if people genuinely
Speaker 1: think that it's worth it, then that's fine, but I
Speaker 1: would like them to do it with the full facts.
Speaker 1: In mine.
Speaker 2: You mentioned semi conductors. I think with electronics generally people
Speaker 2: will sort of understand that it's a pretty complicated supply chain,
Speaker 2: and in fact, that is what we're discovering. You know,
Speaker 2: with the tariffs. Donald Trump sort of outraged the thought
Speaker 2: that even with various high tariff rates, Apple's still not
Speaker 2: going to want to make iPhones in the US and
Speaker 2: to your point, cannot make iPhones in the US because
Speaker 2: there's so many things coming from different parts of the world.
Speaker 2: But food, how hard could it be to be self
Speaker 2: sufficient in food?
Speaker 1: Well, that was one of the most fascinating journeys I've
Speaker 1: been on actually in the book, because that was the
Speaker 1: one where I started out was I think, I'm sure
Speaker 1: many of you will will will have this sense that
Speaker 1: do we really need to import so much food from abroad?
Speaker 1: You know, the UK provides about or supplies about sixty
Speaker 1: percent of the food that we consume in so, you know,
Speaker 1: pretty reliant on the rest of the world for food.
Speaker 1: And why not, as the farmers say, you know, produce
Speaker 1: more at home, consume more at home. It'd be good
Speaker 1: for good for farmers, good for the economy, and good
Speaker 1: for food security. And I think that is quite an
Speaker 1: intuitive argument. It's a very common argument that you hear.
Speaker 1: What I've discovered in the book is that it's really
Speaker 1: for a large part of the world, it's just not
Speaker 1: feasible to rely only on the food that can be
Speaker 1: grown in that individual country. So there's a striking cistic
Speaker 1: from a study done in twenty twenty which I imagine,
Speaker 1: if everyone on the planet had a one hundred kilometer
Speaker 1: circle drawn around them, what proportion of the world's population
Speaker 1: could feed themselves from staple foods grown within that one
Speaker 1: hundred kilometer radius. And the answer is it's only twenty
Speaker 1: five percent, So only a quarter of the global population
Speaker 1: could feed themselves within that area. So how big would
Speaker 1: that circle need to be around every single person on
Speaker 1: the planet so that they could feed themselves on staple
Speaker 1: foods like wheat and corn and potatoes and what have you.
Speaker 1: It would have to be two thousand kilometers. And what
Speaker 1: that tells you is, given the size of countries, given
Speaker 1: the size of the planet, is that if we're going
Speaker 1: to feed ourselves as a world, as a planet, we're
Speaker 1: going to be incredibly reliant on trade in food. This
Speaker 1: idea and food self sufficiency is a non starter for
Speaker 1: probably most people on the planet. And that's really sobering thought,
Speaker 1: isn't it, Because we often hear this line, as I said,
Speaker 1: we just do it at home. Just do it at home. Well,
Speaker 1: it's not going to happen. At least we're not going
Speaker 1: to have the kind of diets that we used to,
Speaker 1: increasing reliance on meat in large parts of the world,
Speaker 1: the variety of food. But simply we can't feed ourselves
Speaker 1: as a planet with just national production.
Speaker 2: Although that fact does cast some light on why Donald
Speaker 2: Trump w with want Canada, because I think the Americans
Speaker 2: will probably do quite well if they could just take
Speaker 2: all of the Canadian planes.
Speaker 1: Well, that was another interesting thing about it, because America,
Speaker 1: on the face of it, is very abundant in food.
Speaker 1: It produces more than it consumes. It's a big agricultural
Speaker 1: exporter to the rest of the world in net terms.
Speaker 1: But even America relies on fertilizer imports quite a lot
Speaker 1: of them from Canada. So even if you say America
Speaker 1: doesn't need the rest of the world when it comes
Speaker 1: to food, well, it actually needs chemicals from the rest
Speaker 1: of the world to make its agriculture so productive.
Speaker 2: In your chapter about food, you also you have a
Speaker 2: distinction which I think is used for in another areas
Speaker 2: as well, because you think of self sufficiency, as we
Speaker 2: often painted politically, as being the same as security. If
Speaker 2: you're making it your own, then you're not at the
Speaker 2: behest of foreign powers and dictators. But you make the point,
Speaker 2: especially with food, that food security is very different from
Speaker 2: that and is often just related to poverty.
Speaker 1: Yeah. I had a look at countries ranked by by
Speaker 1: food self sufficiency, so how much of their own consumption
Speaker 1: they're producing at home, and also about their levels of
Speaker 1: food security. Is the proportion of the populations who are
Speaker 1: struggling to feed themselves. So just to take two examples
Speaker 1: which I've plucked out in the book, which I think
Speaker 1: are really illustrative, So the Zambia in Africa, which is
Speaker 1: only seven percent reliant on imports according to the measures
Speaker 1: of the which I was looking at, so it basically
Speaker 1: produces more or less all that it consumes when it
Speaker 1: comes to agriculture, but it has food insecurity levels which
Speaker 1: are extremely high, so more than fifty percent. And if
Speaker 1: you look at a country like Mauritius in the Indian Ocean,
Speaker 1: which has a food self sufficiency ratio which is incredibly low,
Speaker 1: so almost the inverse of Zambia, but its food security
Speaker 1: was incredibly high. And what's the difference between those two countries.
Speaker 1: Mauritius is a much richer country than Zambia is. So
Speaker 1: precisely as you said, I think the lesson is what
Speaker 1: leads to food insecurity is not reliance on imports. It's
Speaker 1: poverty and you need to solve that if you want
Speaker 1: people to be well fed, rather than obsessing about local production.
Speaker 2: And actually, and you made the very obvious point which
Speaker 2: I hadn't thought about, that you could be completely self sufficient,
Speaker 2: but if you have a crop failure, if you've also
Speaker 2: closed yourself off from the world, then you are instantly
Speaker 2: less secure just through that factor.
Speaker 1: Lae. Yeah, I mean we all know this in a
Speaker 1: way because we all saw the example of Ukraine. Ukraine
Speaker 1: it has this reputation of the bread basket of Europe
Speaker 1: going back for decades, and it is it is. On paper,
Speaker 1: it's incredibly food secure, it produces more than it consumes.
Speaker 1: It's a big exporter to the rest of the world.
Speaker 1: But when it got invaded by Russia in twenty twenty two,
Speaker 1: it had to rely on the World Food Program to
Speaker 1: feed three million of its population. That just shows you
Speaker 1: how just have a large amount of agricultural production doesn't
Speaker 1: necessarily make you secure.
Speaker 2: So it's fair to say we've not overplanned this conversation.
Speaker 2: But you have taken me perfectly to the subject of
Speaker 2: Ukraine and Russia. Because energy is the other example where
Speaker 2: I think it's the most intuitive to people that we
Speaker 2: just can't depend on other nations for our energy, or
Speaker 2: at least it would be much better if we weren't.
Speaker 2: And the celebrated example which you go through, but I
Speaker 2: think a lot of people were have in their heads
Speaker 2: is you know, the way Europe, especially Germany. But Europe
Speaker 2: allowed itself to become very dependent on Russian gas, despite
Speaker 2: that the risk of overreliance on Russia being identified by
Speaker 2: Americans and the American intelligence community and others. So what
Speaker 2: about energy. Surely it is better for us to be
Speaker 2: independent in our energy supply, especially now we can get
Speaker 2: all of this nice you know wind.
Speaker 1: And so yeah, yeah, well, I mean it takes me
Speaker 1: back again to twenty twenty two when this was what
Speaker 1: the politicians were saying. This, as you said, Stefinitie, it
Speaker 1: shows the folly of relying on energy imports. A country
Speaker 1: like Russia can hold you hostage and cut off the
Speaker 1: supply and then you having to have power cuts or rationing.
Speaker 1: I found it very compelling that argument in twenty twenty two.
Speaker 2: But when you start as you were paying your gas.
Speaker 1: Bill, yeah, absolutely, I'm sure we all felt this, didn't
Speaker 1: we And it does tell so perfectly, doesn't it with
Speaker 1: the argument that we should decarbonize and rely on renewables.
Speaker 1: And it's all true to some extent. But if you again,
Speaker 1: if you go into the weeds, go into the supply
Speaker 1: chains of all these renewable technologies, you just see how
Speaker 1: distributed they are right around the world. Just for example,
Speaker 1: the battery that goes into an electric vehicle, the amount
Speaker 1: of critical minerals that it relies on is vastly greater
Speaker 1: than a petrol car. And those critical minerals are spread
Speaker 1: right across many, many different countries. There's no single country
Speaker 1: can realistically source all those critical minerals at home and
Speaker 1: have a national supply chain. Goes for China, goes to America,
Speaker 1: certainly goes for the UK. And so you just go
Speaker 1: through all these renewable technologies and you realize that actually
Speaker 1: we are going to be reliant on imports if we're
Speaker 1: going to have a renewable energy generating sector. So that's
Speaker 1: not to say that it shouldn't be done. It's to
Speaker 1: say that, actually, be wary of the rhetoric of self
Speaker 1: sufficiency or tarchy when it comes to energy, just as
Speaker 1: you should be wary of it when it comes to food,
Speaker 1: or semiconductors or medicines.
Speaker 2: If you read the book, we can sort of take
Speaker 2: it as read that he goes through quite a few things, medicine, steel, semiconductors.
Speaker 2: It's really hard, all of them to be self sufficient.
Speaker 2: If Donald Trump was sitting here, he would say, yeah,
Speaker 2: to right, it's really hard because we've had thirty years
Speaker 2: on the wrong path. You know, we took the cheaper option,
Speaker 2: the easier option. We took advantage of like falling to
Speaker 2: transportation costs, companies becoming more global, the fact there was
Speaker 2: a sort of broadly peaceful global environment. Countries are all
Speaker 2: seemed to be moving in the right direction. So businesses
Speaker 2: created these enormously complicated supply chains that they never should
Speaker 2: have done. And yes, it's going to be really painful
Speaker 2: to aren't pick it all. But if we don't, we're
Speaker 2: going to wake up tomorrow and everything we want is
Speaker 2: you know, being made by China.
Speaker 1: Yeah, well, Donald Trump has changed his tune on this,
Speaker 1: hasn't he, Because I'm sure you remember definitely in the
Speaker 1: campaign trail he wasn't talking about the long, difficult journey
Speaker 1: to a more resilient American economy. Now you're right, he
Speaker 1: has started to talk about how this will be hard
Speaker 1: and there are other you know, there will be sacrifices
Speaker 1: a long way. But I think how would I try
Speaker 1: and persuade Donald Trump?
Speaker 2: Just tim right? The Biden administration in some ways institutionalized
Speaker 2: his kind of gut instinct slash tweets, and he did.
Speaker 2: They did sort of focus more on resilient, focus more
Speaker 2: on industrial bis. But it was based on that same
Speaker 2: negation of the original idea of global or what a
Speaker 2: driven the previous version of globalization, which is we have
Speaker 2: to think about the long term costs our strategic position
Speaker 2: with regard, particularly with regard to China, not just the
Speaker 2: short term cost benefits.
Speaker 1: Yeah. I think Richard Baldwin, I think you've interviewed recently,
Speaker 1: had a great phrase that Trump was not how did
Speaker 1: he put it, He said he wasn't a new turn.
Speaker 1: He was a culmination of something that had been going
Speaker 1: on for a very long time in politics, this gradual
Speaker 1: sense of, you know, globalization is not working the way
Speaker 1: we thought it, we hoped it would, and we need
Speaker 1: to think more about pulling inwards and turning inwards and
Speaker 1: doing things differently. Because you're absolutely right, Joe Biden had
Speaker 1: a lot of those same instincts as well. His administration
Speaker 1: had a lot of the same instincts, and they were
Speaker 1: quite protectionists when it comes to things like Chinese electric vehicles,
Speaker 1: Chinese batteries, and you know, really took on what Trump
Speaker 1: had done in his first term and took it to
Speaker 1: a whole new level. And when it comes to when
Speaker 1: it came to making it harder for China to source
Speaker 1: the most advanced microchips, they were much more proactive than
Speaker 1: the Donald Trump had been. So I think that's really
Speaker 1: important to recognize that this isn't something that just don't
Speaker 1: just started when Trump came to the White House. What
Speaker 1: I would point out to people who were not Trumpian
Speaker 1: but sort of take the view that globalization has gone
Speaker 1: too far is that you'll miss it when it's gone.
Speaker 1: I think it's probably the right way to frame it
Speaker 1: because we have taken it for granted that some of
Speaker 1: the huge benefits, not just in terms of like my
Speaker 1: family in China, but all our lives have been enhanced
Speaker 1: and we've been made much more productive and wealthier as
Speaker 1: a result of globalization over these past fifty years. In
Speaker 1: a sense, trade is being used as a scapegoat for
Speaker 1: the failures of domestic politics to redistribute those gains and
Speaker 1: to compensate the low from it. So I would say,
Speaker 1: I suppose if Trump was here saying, you know, there
Speaker 1: are undoubtedly problems in America, economic problems, communities which are suffering,
Speaker 1: but don't make the story all about trade. Make it
Speaker 1: about how you can use the immense resources of America
Speaker 1: to improve their lives. It's quite interesting. I was listening
Speaker 1: to JD. Vans, who's slightly more sophisticated figger than Trump
Speaker 1: when it comes to making these arguments. And he gave
Speaker 1: a speech in March to the American Dynamism Conference, and
Speaker 1: he said the problem of the American and global economies
Speaker 1: that has been too addicted to cheap labor, both at
Speaker 1: home and talking about immigration and abroad, meaning outsourcing American
Speaker 1: multinationals sending their supply chain to broad cheap labor. And
Speaker 1: he said that as undermined American innovation, which is pretty
Speaker 1: crazy because America is the most innovative and dynamic economy
Speaker 1: by far in the world. If it's had a net
Speaker 1: negative impact on American innovation, it's pretty hard to see
Speaker 1: it in the statistics.
Speaker 2: But well, you mentioned Jadevance. I mean, I think it's
Speaker 2: interesting because it comes through more strongly in what he
Speaker 2: says and that speech. Part of the kind of rebellion
Speaker 2: against globalization that jade Vance represents is kind of rebellion
Speaker 2: against modernity, against the modern global economy and what's happened
Speaker 2: to communities and day to day life from only get
Speaker 2: going for the most productive, the cheapest way of making things.
Speaker 2: You know, America's moved to a massively service based economy.
Speaker 2: And I think his argument would be, and lots of
Speaker 2: people say this that those service sector jobs, even if
Speaker 2: you can afford to buy lots of stuff with them,
Speaker 2: because you've got all these cheap things that were being
Speaker 2: made in China, we quote un quotes were happier when
Speaker 2: we were making that stuff ourselves. And maybe we had
Speaker 2: a bit less, but we had community and we didn't
Speaker 2: have you know, endless insecure jobs and other things So
Speaker 2: how is it if you're a politician, how do you
Speaker 2: tease out that argument against trade from the sort of
Speaker 2: broader sense that we've sort of culturally gone the wrong
Speaker 2: direction because of this advanced industrialization.
Speaker 1: Well, it's incredibly difficult. I mean, Dave the Evans, You're right,
Speaker 1: he does talk in that sort of nostalgia we must
Speaker 1: bring back manufacturing, and others in the administration in America
Speaker 1: talk about Americans screwing the little screws into iPhones and
Speaker 1: returning to a manufacturing economy. At other times he's more
Speaker 1: with the tech bros. In fact, he was in this
Speaker 1: conference he was talking about innovation. But I think it
Speaker 1: comes down to a fundamental problem with the argument that
Speaker 1: you reindustrialize America through tariffs and reindustrialize it full stop
Speaker 1: to create great jobs. Is that as many people have
Speaker 1: pointed out, But it's absolutely true. What you're going to
Speaker 1: get if you bring American if you bring more manufacturing
Speaker 1: back to America, is not a huge amount of really
Speaker 1: high paying jobs. And the turning back of the clock
Speaker 1: to the nineteen fifties where everyone took their lunch pale
Speaker 1: to the factory. You're going to have robots now that
Speaker 1: will create higher incomes for some people, but it's not
Speaker 1: going to fundamentally shift the structure of the American economy
Speaker 1: the labor force back to the way it was all
Speaker 1: those decades ago. So I think I think the honest
Speaker 1: answer is that, yes, there's a big seam of nostalgia
Speaker 1: that people like Jdvans and many others in America are mining,
Speaker 1: but it's not one that is going to be actually deliverable.
Speaker 2: I guess one other sort of obvious response to some
Speaker 2: of what you've said is if it's also inevitable, if
Speaker 2: there are all these forces technology and other things that
Speaker 2: are putting on us a path to integration and making
Speaker 2: it extremely hard to unpick these supply chains, then maybe
Speaker 2: we don't have to worry about protectionism after all. Maybe
Speaker 2: you know, if it's going to all prove in a
Speaker 2: few years time, if it's going to prove to be
Speaker 2: completely counterproductive and or prohibitively costly, shouldn't we just like
Speaker 2: sit back and wait for it all to play.
Speaker 1: Wait, wait for it, yeah, wait for people to come
Speaker 1: to their senses. I think that is compelling in some ways,
Speaker 1: and I think there's a bit of a debate actually
Speaker 1: when you look at analysts because some say, look what deglobalization.
Speaker 1: You know, in some measures in terms of data flows
Speaker 1: across borders. If you look at the actual complexity of
Speaker 1: supply chains, we have never been more more globalized than
Speaker 1: we are today. Notwithstanding these these many years of politicians
Speaker 1: making these policies to withdraw us inwards and attempt to
Speaker 1: resure and friendshure, et cetera. If that's the result, then
Speaker 1: you know, why why are we even talking about this
Speaker 1: term deglobalization. I think my answer would be, on the
Speaker 1: one hand, that's true, but if you look at the
Speaker 1: number of actual acts that politicians have taken to put
Speaker 1: barriers up, it is definitely glowing going up. You are
Speaker 1: seeing a trend of politicians to fight against this global integration.
Speaker 1: And my answer would be that you're effectively It may continue,
Speaker 1: the wheels may keep turning, but you're throwing sand in
Speaker 1: the gears of it. This is one of the greatest
Speaker 1: engines of prosperity that we've seen ever, is globalization. And
Speaker 1: if you make it harder, then your living standards will
Speaker 1: not rise as rapidly as they otherwise would have countries,
Speaker 1: and that's in developing, that's in rich countries and developing
Speaker 1: countries are going to find it harder to get onto
Speaker 1: that economic ladder of having better lives and integrating into
Speaker 1: it into global supply chains in the way that China
Speaker 1: did in the past, in a way that countries in
Speaker 1: Africa are trying to now so effectively pulling up the ladder.
Speaker 1: So I think, yes, I think there is a strong
Speaker 1: case for saying that we are not going to deglobalize.
Speaker 1: It will just be too hard. But I think we
Speaker 1: can still make life very difficult for ourselves and much
Speaker 1: more difficult than it needs to be.
Speaker 2: And the response to the strategic worry that we will
Speaker 2: wake up in twenty years time and find that a
Speaker 2: very different government, very strong government, with very different value
Speaker 2: system certainly doesn't believe in journalists of Newsnight has control
Speaker 2: over key parts of our economy because we've decided to
Speaker 2: buy all our solar panels from them, and all of
Speaker 2: our electric batteries and all our electric cars. How do
Speaker 2: we get around that?
Speaker 1: Well, that is that is an extremely tough one. China.
Speaker 1: I mean, I've talked, I started talking about how the
Speaker 1: miracle of globalization in China. I've seen the benefits of it,
Speaker 1: but I've also seen the downsides. I've seen the dark
Speaker 1: side of what the new China, what the Chinese regime
Speaker 1: is in terms of the crushing of personal freedoms of
Speaker 1: people in China, in terms of its economic mismanagement. I mean,
Speaker 1: everyone's talks about China as this great economic success, and
Speaker 1: in many dimensions it is, but it's also really messed
Speaker 1: up the property market. It's it's got deep set economic
Speaker 1: problems as well, and I've seen that in the same
Speaker 1: way I've seen the benefits. I've seen that up close
Speaker 1: in terms of my own family in China, and it's
Speaker 1: a very I can understand why Western politicians say we
Speaker 1: should be pus much distance between ourselves and this regime
Speaker 1: as possible. I completely understand that. At the same time,
Speaker 1: we take an issue like decarbonization, China has such a
Speaker 1: head start when it comes to the technology of solar
Speaker 1: panels and electric batteries and also wind turbines that it's
Speaker 1: simply not feasible for the world to decarbonize by twenty fifty,
Speaker 1: as nations have signed up to do without relying very,
Speaker 1: very heavily on Chinese renewable energy. Kit that's just the reality,
Speaker 1: and governments are going to have to choose there. And
Speaker 1: also I think that China is so integrated into global
Speaker 1: supply chains that this fantasy, you know, I think it
Speaker 1: is a fantasy saying that it's simply a case of
Speaker 1: you just turn the switch and it's and it's removed.
Speaker 1: And I think Donald Trump has actually found this out
Speaker 1: since Liberation Day. He started out very bullishly about the
Speaker 1: ability of him, you know, decoupling from China, as he
Speaker 1: put it, and within a couple of months they're making
Speaker 1: the deal. And I think a lot of American retailers
Speaker 1: went to see him, called him and said, the reality is,
Speaker 1: if you don't change course on this, you're going to
Speaker 1: have empty shelves, You're going to have prices spiking. And
Speaker 1: I think that message got through.
Speaker 2: Actually, I was in Hong Kong last week and I
Speaker 2: was struck by there's quite a few people. I sort
Speaker 2: of asked their investor types, market types. But what's surprised
Speaker 2: you most in the last six months or even the
Speaker 2: last twelve months. None of them said anything to do
Speaker 2: with Donald Trump. It was all how fast China has
Speaker 2: progressed in ex technology or why technology. There's so many
Speaker 2: articles you read now or reports on any subject, whether
Speaker 2: it's trade, technology, innovation, and you could just have a
Speaker 2: sub headline China's going to win. I mean, is that
Speaker 2: what you're basically saying that we should just accept that
Speaker 2: China's going to end up dominant in all these areas
Speaker 2: and we will just lose out by trying to be more,
Speaker 2: more diversified and less reliant on it.
Speaker 1: Well, I think going back to the what JD. Evans
Speaker 1: was saying and linking that to the ev picture of
Speaker 1: China's got such that amazing lead in electric vehicles. You
Speaker 1: know BYD you'll be seeing a lot more of those,
Speaker 1: I think on our streets, their electric vehicles in the
Speaker 1: coming months and years. But what JD. Evans was saying
Speaker 1: was that innovation needs a barrier, he needs trade walls
Speaker 1: with the rest of the world, and then American companies
Speaker 1: will innovate more. I think the evidence suggests the exact
Speaker 1: opposite will happen. If American wars itself off, it will
Speaker 1: not be subject to competition from companies like BYD, from
Speaker 1: a Chinese battery makers, etc. And they will stagnate behind
Speaker 1: those walls. What you are more likely to get and
Speaker 1: you have a bit of confidence and faith in Western
Speaker 1: companies actually faced with that competition. I think they can
Speaker 1: do well. I think they can innovate and they can
Speaker 1: properly compete. Don't forget China only moved into this space,
Speaker 1: what was it, you know ten to fifteen years ago,
Speaker 1: been an incredibly rapid development. So if you think about
Speaker 1: it in those terms, I don't see why Western carmakers
Speaker 1: or Western technology companies can't compete with China and through competition,
Speaker 1: I think what's more likely to happen is if you
Speaker 1: put up trade barriers and you don't compete, you will
Speaker 1: stagnate and you will fall further behind.
Speaker 2: Okay, well that was fantastic.
Speaker 1: Thank you very much, Thank you, Thank you all.
Speaker 2: Thanks for listening to Trump and Noomics from Bloomberg. It
Speaker 2: was hosted by me Stephanie Flanders and I was joined
Speaker 2: by Ben Chu at the Conduit in London. Trump and
Speaker 2: Nomics is produced by Summer, Sadi and Moses and with
Speaker 2: help from Amy Keen and special thanks this week to
Speaker 2: Asher de Lenarole and Lily black Cell at the Conduit.
Speaker 2: Sound design is by Blake Maples and Sage Bowman is
Speaker 2: the head of Bloomberg Podcast. Please to help others find
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