1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,560 --> 00:00:11,920 Speaker 2: The standoff between the US and China continues to escalate, 3 00:00:12,119 --> 00:00:16,120 Speaker 2: which is leading to economic uncertainty worldwide. Bloomberg News now 4 00:00:16,120 --> 00:00:18,960 Speaker 2: reporting China is expanding the ongoing trade war. 5 00:00:19,280 --> 00:00:21,240 Speaker 1: It does not seem like we're getting any kind of 6 00:00:21,760 --> 00:00:24,840 Speaker 1: state visit or to tant anytime soon, or even high 7 00:00:24,920 --> 00:00:25,560 Speaker 1: level talks. 8 00:00:25,920 --> 00:00:28,560 Speaker 2: In the last two weeks, the US has placed tariffs 9 00:00:28,600 --> 00:00:31,880 Speaker 2: of one hundred and forty five percent on Chinese exports, 10 00:00:32,320 --> 00:00:35,000 Speaker 2: and China has retaliated with tariffs of one hundred and 11 00:00:35,000 --> 00:00:39,400 Speaker 2: twenty five percent and export restrictions on critical rare earth minerals. 12 00:00:39,760 --> 00:00:42,000 Speaker 3: China wants to make a deal, they just don't know 13 00:00:42,040 --> 00:00:43,199 Speaker 3: how quite to go about it. 14 00:00:43,360 --> 00:00:43,559 Speaker 1: You know. 15 00:00:43,600 --> 00:00:44,559 Speaker 2: It's one of those things that. 16 00:00:44,560 --> 00:00:50,080 Speaker 3: Are not quite proud people, and President She's a proud man. 17 00:00:50,760 --> 00:00:52,960 Speaker 1: At the moment, it doesn't seem to be working out, 18 00:00:53,080 --> 00:00:55,279 Speaker 1: I think in the way in which President Trump may 19 00:00:55,320 --> 00:00:57,280 Speaker 1: have anticipated or hoped that it would. 20 00:00:57,520 --> 00:01:00,560 Speaker 2: Jennifer Welch helped lead China policy at the National Security 21 00:01:00,560 --> 00:01:05,600 Speaker 2: Council during the first Trump administration and also under President Biden. Today, 22 00:01:05,720 --> 00:01:08,800 Speaker 2: she's chief geoeconomics analyst for Bloomberg economics. 23 00:01:09,200 --> 00:01:13,480 Speaker 1: They think President Trump's mo is to build pressure. There's 24 00:01:13,520 --> 00:01:17,400 Speaker 1: a real contrast of approaches here. President Trump prides himself 25 00:01:17,440 --> 00:01:20,640 Speaker 1: on his unpredictability as well as his hardball tactics right 26 00:01:21,120 --> 00:01:25,080 Speaker 1: whereas Beijing, in particular Chinese President She Jumping, is a 27 00:01:25,160 --> 00:01:28,520 Speaker 1: very methodical player when it comes to negotiations. They like structure, 28 00:01:29,160 --> 00:01:31,080 Speaker 1: having a clear idea of what the agenda's going to 29 00:01:31,120 --> 00:01:34,119 Speaker 1: be so they can prepare for it. And I think 30 00:01:34,160 --> 00:01:37,560 Speaker 1: President Trump's unpredictability really puts them on the back heel 31 00:01:37,560 --> 00:01:38,360 Speaker 1: in a lot of ways. 32 00:01:38,760 --> 00:01:41,680 Speaker 2: For its part, China has signaled its open to talks. 33 00:01:42,120 --> 00:01:46,400 Speaker 2: On Wednesday, Beijing appointed a point person for negotiations, but 34 00:01:46,480 --> 00:01:49,840 Speaker 2: sources close to China's government have told Bloomberg that President 35 00:01:49,880 --> 00:01:52,640 Speaker 2: She wants to see the White House approach talks with 36 00:01:52,680 --> 00:01:55,960 Speaker 2: more respect, and it wants the Trump administration to adopt 37 00:01:56,000 --> 00:01:59,960 Speaker 2: a more consistent position on tariffs. It begs the question, 38 00:02:00,560 --> 00:02:03,920 Speaker 2: with the world's two largest economies in a standoff, which 39 00:02:04,000 --> 00:02:07,600 Speaker 2: leader President Trump or President She will blink first. 40 00:02:08,240 --> 00:02:13,320 Speaker 3: China is not going to engage in negotiations until it 41 00:02:13,440 --> 00:02:16,959 Speaker 3: feels the United States has shown some sincerity. 42 00:02:17,240 --> 00:02:20,720 Speaker 2: John lou Is Bloomberg's executive editor for Greater China. He's 43 00:02:20,760 --> 00:02:21,560 Speaker 2: based in Beijing. 44 00:02:21,960 --> 00:02:24,520 Speaker 3: I think the main concern for the Chinese side is 45 00:02:24,560 --> 00:02:27,400 Speaker 3: that they go into some sort of back and forth 46 00:02:27,480 --> 00:02:32,000 Speaker 3: with Washington and that whatever agreements they reach are either 47 00:02:32,600 --> 00:02:36,320 Speaker 3: scuttled or the US goes back on them. The US, 48 00:02:36,360 --> 00:02:40,079 Speaker 3: the Trump administration does something to embarrass not only the 49 00:02:40,160 --> 00:02:42,639 Speaker 3: Chinese government but also she and so that I think 50 00:02:42,760 --> 00:02:44,959 Speaker 3: is the number one concern for the Chinese side, and 51 00:02:45,000 --> 00:02:46,560 Speaker 3: they want to make sure that does not happen. 52 00:02:50,160 --> 00:02:52,040 Speaker 2: I'm David Gera, and this is the big take from 53 00:02:52,040 --> 00:02:54,959 Speaker 2: Bloomberg News today on the show. What it will take 54 00:02:55,000 --> 00:02:58,120 Speaker 2: for President's Trump and She to come to the negotiating table, 55 00:02:58,680 --> 00:03:01,480 Speaker 2: How the current state of China, this economy, impacts its 56 00:03:01,560 --> 00:03:05,240 Speaker 2: positioning in the trade war, and why hardball tactics are 57 00:03:05,400 --> 00:03:15,000 Speaker 2: unlikely to work this time around. When preston Trump anoun's 58 00:03:15,000 --> 00:03:18,200 Speaker 2: sweeping tariffs on about sixty trading partners earlier this month, 59 00:03:18,440 --> 00:03:21,880 Speaker 2: he made good on a big campaign promise on day one. 60 00:03:21,800 --> 00:03:27,680 Speaker 3: We will throw out Bidenomics and we will reinstate Maganomics. Maganomics. 61 00:03:29,120 --> 00:03:33,040 Speaker 3: We will go right after China. We will not rely 62 00:03:33,160 --> 00:03:34,760 Speaker 3: on them one bit. 63 00:03:35,000 --> 00:03:37,840 Speaker 2: And while China has long been a target of Trump's ire, 64 00:03:38,360 --> 00:03:42,160 Speaker 2: the size and scope of these tariffs caught Beijing by surprise, 65 00:03:42,760 --> 00:03:45,440 Speaker 2: but Bloomberg' John lou says it shouldn't have come as 66 00:03:45,440 --> 00:03:45,840 Speaker 2: a shock. 67 00:03:46,360 --> 00:03:49,440 Speaker 3: I was surprised that there was surprise because I think 68 00:03:49,480 --> 00:03:52,320 Speaker 3: what Donald Trump did was exactly what he said he 69 00:03:52,400 --> 00:03:54,920 Speaker 3: was going to do. Right he said on the campaign trail, 70 00:03:55,000 --> 00:03:58,200 Speaker 3: He's going to take tariffs on China to sixty some percent. 71 00:03:59,120 --> 00:04:01,720 Speaker 3: After he took I think there was a bit of 72 00:04:01,760 --> 00:04:05,680 Speaker 3: optimism here in China that that would not happen, but 73 00:04:05,760 --> 00:04:08,960 Speaker 3: that's exactly what he did. The Chinese, for their part, 74 00:04:09,080 --> 00:04:12,280 Speaker 3: made very clear that if tariffs came into effect that 75 00:04:12,360 --> 00:04:16,640 Speaker 3: they would hit back. And from what I can gleanm 76 00:04:17,160 --> 00:04:21,040 Speaker 3: the US was itself relatively surprised that the Chinese retaliated 77 00:04:21,160 --> 00:04:23,719 Speaker 3: as proactively and aggressively as they did. 78 00:04:24,880 --> 00:04:27,400 Speaker 2: Here in the US. This is all over the place, 79 00:04:27,520 --> 00:04:30,680 Speaker 2: in newspapers and on television. They're in China. How much 80 00:04:30,760 --> 00:04:33,680 Speaker 2: is this a subject of conversation? Is it everywhere as well? 81 00:04:33,920 --> 00:04:37,599 Speaker 3: It's everywhere. It is the thing everybody is talking about. 82 00:04:38,680 --> 00:04:45,200 Speaker 3: There's an overwhelming country wide consensus or sort of broad 83 00:04:45,320 --> 00:04:49,680 Speaker 3: support for China to fight this, and so these tariffs 84 00:04:49,720 --> 00:04:55,320 Speaker 3: have made you know, Shiji being very popular for retaliating. 85 00:04:56,040 --> 00:05:01,560 Speaker 3: It's seen, I think, a broad swelling of patriotic sentiment, 86 00:05:01,680 --> 00:05:05,760 Speaker 3: support for the government, and there is this feeling on 87 00:05:05,800 --> 00:05:12,240 Speaker 3: the ground here amongst ordinary people, business owners that China 88 00:05:12,360 --> 00:05:16,080 Speaker 3: is being wrong by these turriffs. I think the additional 89 00:05:16,120 --> 00:05:20,000 Speaker 3: thing here, though, is there is a sense of foreboding. 90 00:05:20,640 --> 00:05:22,360 Speaker 3: I think there is a sense of what does it 91 00:05:22,440 --> 00:05:25,880 Speaker 3: mean for China economically and could this get even worse? 92 00:05:26,520 --> 00:05:29,560 Speaker 2: John? On Wednesday, China's National Bureau of Statistics reported that 93 00:05:29,600 --> 00:05:33,080 Speaker 2: the country's gross domestic product grew five point four percent 94 00:05:33,200 --> 00:05:35,000 Speaker 2: in the first quarter from a year ago. That's more 95 00:05:35,000 --> 00:05:39,159 Speaker 2: than was expected. How does China's economic position play into 96 00:05:39,160 --> 00:05:40,840 Speaker 2: how it's approaching this trade war. 97 00:05:41,160 --> 00:05:45,640 Speaker 3: I think the longer China can keep the economy ticking along, 98 00:05:45,760 --> 00:05:48,720 Speaker 3: the longer China can hold out. And I think ultimately 99 00:05:48,920 --> 00:05:51,880 Speaker 3: this is sort of a game of chicken, if you will, 100 00:05:51,920 --> 00:05:54,800 Speaker 3: but also I think a game of endurance, and so 101 00:05:55,680 --> 00:05:59,120 Speaker 3: whether or not economically China can keep growth up, I 102 00:05:59,120 --> 00:06:03,479 Speaker 3: think that'll be a determining factor in how this trade 103 00:06:03,480 --> 00:06:07,479 Speaker 3: war unfolds. And you mentioned the GDP data was better 104 00:06:07,520 --> 00:06:09,400 Speaker 3: than expected for the first quarter. I don't know that 105 00:06:09,400 --> 00:06:12,600 Speaker 3: that is super telling of the actual economic conditions here 106 00:06:12,640 --> 00:06:15,400 Speaker 3: on the ground. There was actually a lot of exports 107 00:06:15,440 --> 00:06:18,200 Speaker 3: in the first quarter that will pull ahead that companies 108 00:06:18,200 --> 00:06:20,800 Speaker 3: in the US. Buyers in the US actually moved their 109 00:06:20,920 --> 00:06:24,400 Speaker 3: orders ahead and sort of built up their inventories in 110 00:06:24,440 --> 00:06:27,159 Speaker 3: anticipation that there would be higher tariffs on Chinese goods, 111 00:06:27,400 --> 00:06:29,640 Speaker 3: and so that might be actually hiding some of the 112 00:06:29,800 --> 00:06:34,560 Speaker 3: underlying weakness in the Chinese economy. We've had a terrible 113 00:06:34,600 --> 00:06:38,400 Speaker 3: property crisis that has yet to be resolved. We've had 114 00:06:38,520 --> 00:06:43,039 Speaker 3: weak consumer sentiment, weak consumer spending. The government has promised 115 00:06:43,040 --> 00:06:45,800 Speaker 3: and has already started to roll out lots of stimulus 116 00:06:45,800 --> 00:06:50,280 Speaker 3: measures to try and get households spending again, get companies 117 00:06:50,320 --> 00:06:53,920 Speaker 3: investing again. And I would expect that the government will 118 00:06:53,920 --> 00:06:56,600 Speaker 3: do more of that and at a greater magnitude as 119 00:06:56,600 --> 00:06:59,479 Speaker 3: we go forward, as the impact of these tariffs are 120 00:06:59,520 --> 00:07:00,400 Speaker 3: felt more broadly. 121 00:07:00,920 --> 00:07:03,760 Speaker 2: That's going to determine how negotiations between the US and 122 00:07:03,880 --> 00:07:08,640 Speaker 2: China play out. But another factor will be personality. Bloomberg's 123 00:07:08,680 --> 00:07:12,080 Speaker 2: Jennifer Welch, who worked in the first Trump administration, thinks 124 00:07:12,080 --> 00:07:14,920 Speaker 2: Trump's long standing emphasis on the art of the deal 125 00:07:15,280 --> 00:07:16,720 Speaker 2: will play a huge role. 126 00:07:17,240 --> 00:07:21,120 Speaker 1: From his perspective. He is the deal maker, right, He 127 00:07:21,200 --> 00:07:25,320 Speaker 1: plays hardball. He is very much empowered at home, and 128 00:07:25,360 --> 00:07:28,400 Speaker 1: I think he's trying to leverage that to bring a 129 00:07:28,440 --> 00:07:32,239 Speaker 1: lot of confidence into these negotiations as sort of coming 130 00:07:32,280 --> 00:07:35,800 Speaker 1: in with a mandate from the American people and really 131 00:07:35,840 --> 00:07:41,120 Speaker 1: trying to utilize the fullest extent of America's comprehensive national 132 00:07:41,200 --> 00:07:44,600 Speaker 1: power here and sort of going further than most presidents 133 00:07:44,640 --> 00:07:48,000 Speaker 1: have in the past to challenge the limits of that. 134 00:07:48,000 --> 00:07:50,680 Speaker 1: That's how I think he is approaching not just China, 135 00:07:50,840 --> 00:07:53,560 Speaker 1: but negotiations with all these partners. 136 00:07:53,800 --> 00:07:56,640 Speaker 2: What role does pride play in these conversations? You have 137 00:07:56,680 --> 00:07:59,320 Speaker 2: two leaders here who are extremely proud individuals. I think 138 00:07:59,360 --> 00:08:02,760 Speaker 2: it's fair to say, how does that affect or shape 139 00:08:03,520 --> 00:08:05,160 Speaker 2: talks of this magnitude. 140 00:08:05,320 --> 00:08:07,320 Speaker 1: I think that's one of the main hurdles to talks 141 00:08:07,640 --> 00:08:09,800 Speaker 1: really taking off in a serious way at this point 142 00:08:09,800 --> 00:08:12,320 Speaker 1: in time. Obviously, there's a lot of pain on both sides. 143 00:08:12,360 --> 00:08:14,680 Speaker 1: There's the potential for even deeper pain as these terrorsts 144 00:08:14,680 --> 00:08:17,480 Speaker 1: start to bite, and yet we're not really seeing a 145 00:08:17,480 --> 00:08:19,760 Speaker 1: lot of progress in terms of negotiations, and in fact, 146 00:08:19,760 --> 00:08:22,160 Speaker 1: each side still seems to be saying that the ball 147 00:08:22,240 --> 00:08:23,800 Speaker 1: is in the other side's court, and I think a 148 00:08:23,880 --> 00:08:26,160 Speaker 1: main reason for that is because neither of them wants 149 00:08:26,240 --> 00:08:29,200 Speaker 1: to look weak, right. President Trump, especially after pausing on 150 00:08:29,240 --> 00:08:32,680 Speaker 1: reciprocal terarifts and then even on the electronics exemptions, has 151 00:08:32,760 --> 00:08:35,240 Speaker 1: been kind of pushing back in other ways to demonstrate 152 00:08:35,280 --> 00:08:37,640 Speaker 1: he's still very strong on trade. And I think that's 153 00:08:37,720 --> 00:08:40,040 Speaker 1: especially important for him when it comes to China because 154 00:08:40,040 --> 00:08:42,599 Speaker 1: of the legacy of his campaign promises there and the 155 00:08:42,679 --> 00:08:44,920 Speaker 1: legacy of his first term of wanting to appear tough 156 00:08:45,000 --> 00:08:47,839 Speaker 1: on Beijing. I think likewise, for President She Jim Paying 157 00:08:48,160 --> 00:08:51,079 Speaker 1: he feels as the leader of the second largest economy 158 00:08:51,120 --> 00:08:53,640 Speaker 1: in the world, they need to demonstrate that they can't 159 00:08:53,640 --> 00:08:56,160 Speaker 1: be pushed around by the United States anymore. They took 160 00:08:56,200 --> 00:08:59,880 Speaker 1: those prior tariff hikes on the Chin and have to 161 00:09:00,040 --> 00:09:02,640 Speaker 1: demonstrating their willingness to stand up for China. 162 00:09:04,040 --> 00:09:07,520 Speaker 2: I think we're familiar with President Trump's personality, but President 163 00:09:07,600 --> 00:09:09,720 Speaker 2: she is much more of an enigma for American audiences 164 00:09:09,720 --> 00:09:11,240 Speaker 2: and John, I wonder if you could paint a picture 165 00:09:11,280 --> 00:09:14,679 Speaker 2: for us of him as a leader, how he's responded, 166 00:09:14,679 --> 00:09:16,320 Speaker 2: and what that tells us just about the way he 167 00:09:16,400 --> 00:09:17,880 Speaker 2: approaches leading his country. 168 00:09:18,360 --> 00:09:22,880 Speaker 3: I think he is a leader that projects stability, that 169 00:09:22,960 --> 00:09:30,080 Speaker 3: projects forthrightness and standing his place, not making sudden turns 170 00:09:30,080 --> 00:09:32,320 Speaker 3: in policy. But at the same time, I think when 171 00:09:32,440 --> 00:09:36,319 Speaker 3: push comes to shove, he will make dramatic changes. During 172 00:09:36,360 --> 00:09:40,280 Speaker 3: COVID China had this COVID zero policy. It put a 173 00:09:40,360 --> 00:09:43,840 Speaker 3: tremendous burden on the economy, on the average citizen. And 174 00:09:43,880 --> 00:09:46,680 Speaker 3: then at the end of twenty twenty two, we started 175 00:09:46,679 --> 00:09:50,400 Speaker 3: seeing protests, people going on the street wanting the government 176 00:09:50,440 --> 00:09:53,800 Speaker 3: to end the COVID zero policy. And because of that, 177 00:09:54,040 --> 00:09:57,040 Speaker 3: he did almost overnight, just did away with that policy. 178 00:09:57,080 --> 00:09:59,520 Speaker 3: And he is a man who is willing to make changes. 179 00:10:00,040 --> 00:10:03,320 Speaker 3: But before that, I think he's shown that he's going 180 00:10:03,400 --> 00:10:07,600 Speaker 3: to project strength and he's going to project stability, and 181 00:10:07,640 --> 00:10:09,719 Speaker 3: that he knows where he's going and it's the right 182 00:10:09,760 --> 00:10:10,520 Speaker 3: direction forward. 183 00:10:11,280 --> 00:10:13,960 Speaker 2: Jennifer Welch says what President Trump may have been betting 184 00:10:14,000 --> 00:10:17,680 Speaker 2: on is that China's economic situation, in particular the size 185 00:10:17,679 --> 00:10:20,199 Speaker 2: of its debt, along with the housing and youth unemployment 186 00:10:20,240 --> 00:10:22,840 Speaker 2: crises John mentioned, would make she bend. 187 00:10:23,120 --> 00:10:25,079 Speaker 1: This is me reading the tea leaves a little bit. 188 00:10:25,559 --> 00:10:28,520 Speaker 1: He may have not fully anticipated the extent to which 189 00:10:28,559 --> 00:10:30,880 Speaker 1: Beijing was going to push back on this, so I 190 00:10:30,920 --> 00:10:33,200 Speaker 1: think he engaged in kind of this tip for tat 191 00:10:33,240 --> 00:10:36,840 Speaker 1: with Beijing to try and back them down by escalating 192 00:10:36,840 --> 00:10:40,120 Speaker 1: to de escalate again. But the de escalation never happened, 193 00:10:40,120 --> 00:10:42,600 Speaker 1: and now we have these extremely high terrorf rates on 194 00:10:42,640 --> 00:10:43,719 Speaker 1: both sides. 195 00:10:45,160 --> 00:10:47,800 Speaker 2: After the break where the US China trade war goes 196 00:10:47,800 --> 00:10:51,040 Speaker 2: from here and the weapons Beijing has at its disposal 197 00:10:51,320 --> 00:11:03,679 Speaker 2: to counter additional tariffs. Tensions between the US and China 198 00:11:03,800 --> 00:11:06,520 Speaker 2: are fraught right now, and from the rhetoric coming out 199 00:11:06,520 --> 00:11:08,840 Speaker 2: of the White House, you'd think the two have never 200 00:11:08,880 --> 00:11:12,680 Speaker 2: been further apart on trade, but Bloomberg Economics, as Jennifer 201 00:11:12,720 --> 00:11:15,760 Speaker 2: Welch says, Presidents Trump and She half broke her to 202 00:11:15,840 --> 00:11:16,800 Speaker 2: deal before. 203 00:11:17,000 --> 00:11:19,240 Speaker 1: It was inked in January twenty twenty. It's called the 204 00:11:19,280 --> 00:11:21,720 Speaker 1: Phase one trade deal, and that was meant to be 205 00:11:21,880 --> 00:11:25,480 Speaker 1: the starting point for what we're called Phase two negotiations 206 00:11:25,480 --> 00:11:28,360 Speaker 1: that were supposed to deal with much more contentious issues 207 00:11:28,400 --> 00:11:31,880 Speaker 1: around structural or forums in China that never really took off, 208 00:11:31,880 --> 00:11:33,840 Speaker 1: in part because of the pandemic and in part because 209 00:11:33,880 --> 00:11:38,960 Speaker 1: of deepening US China tensions. The question now is are 210 00:11:39,000 --> 00:11:42,400 Speaker 1: the negotiations that may emerge out of this current round 211 00:11:42,440 --> 00:11:46,960 Speaker 1: of tensions geared towards a Phase one redux where it's 212 00:11:47,040 --> 00:11:49,000 Speaker 1: just going to be addressing the kind of current trade 213 00:11:49,200 --> 00:11:53,120 Speaker 1: imbalance and through purchase agreements, or is it going to 214 00:11:53,120 --> 00:11:56,480 Speaker 1: be trying to attack what those Phase two talks that 215 00:11:56,559 --> 00:12:00,960 Speaker 1: never started were geared towards these larger structural issues. And 216 00:12:01,040 --> 00:12:03,559 Speaker 1: I think different members of the administration probably have different 217 00:12:03,600 --> 00:12:06,600 Speaker 1: perspectives on that. And the key question is going to 218 00:12:06,640 --> 00:12:09,400 Speaker 1: be what's President Trump's view, right, And some of this 219 00:12:09,440 --> 00:12:11,240 Speaker 1: may depend a little bit on the timeline to be 220 00:12:11,320 --> 00:12:14,200 Speaker 1: frank right. I think one of the major incentives for 221 00:12:14,280 --> 00:12:17,320 Speaker 1: him on the Phase one deal was it was inked 222 00:12:17,360 --> 00:12:20,080 Speaker 1: in an election year and he probably wanted to put 223 00:12:20,160 --> 00:12:22,280 Speaker 1: the US China trade war to the side and get 224 00:12:22,280 --> 00:12:25,080 Speaker 1: that resolved before heading into a presidential election. 225 00:12:25,600 --> 00:12:28,440 Speaker 2: Jennifer says it's important to remember that while President Trump 226 00:12:28,480 --> 00:12:31,600 Speaker 2: isn't up for reelection and doesn't seem too worried about 227 00:12:31,600 --> 00:12:34,360 Speaker 2: the fallout from a trade war, many of his allies 228 00:12:34,360 --> 00:12:38,280 Speaker 2: in Congress are, and the midterms are right around the corner. 229 00:12:38,840 --> 00:12:42,840 Speaker 1: That could be an incentive for him where maybe the ambition, 230 00:12:43,240 --> 00:12:46,840 Speaker 1: so to speak, is lowered to something more like a 231 00:12:46,840 --> 00:12:49,920 Speaker 1: Phase one Redux deal. But I think that's a million 232 00:12:49,920 --> 00:12:52,959 Speaker 1: dollar question at this point, and it's also another reason 233 00:12:53,000 --> 00:12:55,920 Speaker 1: why talks probably have nim progressed all that far as. 234 00:12:55,800 --> 00:12:58,720 Speaker 2: The stalemate continues, both the US and China are eyeing 235 00:12:58,800 --> 00:13:02,280 Speaker 2: other trade partners. The Trump administration has been lining up 236 00:13:02,320 --> 00:13:05,840 Speaker 2: potential deals with some of China's biggest economic rivals. Some 237 00:13:05,880 --> 00:13:09,440 Speaker 2: of the President's economic advisors met with leaders from Japan yesterday, 238 00:13:10,000 --> 00:13:12,760 Speaker 2: and the administration has talks scheduled with South Korea and 239 00:13:12,840 --> 00:13:16,360 Speaker 2: India in the coming weeks. For his part, President She 240 00:13:16,480 --> 00:13:20,320 Speaker 2: has made trips to Vietnam, Cambodia, and Malaysia, and John 241 00:13:20,360 --> 00:13:23,679 Speaker 2: lu says she is looking to improve China's trade relationship 242 00:13:23,720 --> 00:13:24,280 Speaker 2: with the EU. 243 00:13:25,120 --> 00:13:28,880 Speaker 3: Not only has Trump put these tariffs on China, but 244 00:13:28,920 --> 00:13:33,000 Speaker 3: he's also put them on lots of American allies, Europe, 245 00:13:33,280 --> 00:13:37,320 Speaker 3: many Southeast Asian countries, and so that gives China an 246 00:13:37,360 --> 00:13:41,040 Speaker 3: opportunity to step in and to have itself be seen 247 00:13:41,320 --> 00:13:45,160 Speaker 3: as a stabilizing force in the global economy as opposed 248 00:13:45,200 --> 00:13:48,800 Speaker 3: to Washington d C, which Beijing will project as being 249 00:13:48,960 --> 00:13:53,680 Speaker 3: unpredictable and as being not so caring about the rest 250 00:13:53,720 --> 00:13:57,640 Speaker 3: of the world and concerned mostly about itself. Xijiping is 251 00:13:57,679 --> 00:14:01,319 Speaker 3: in Southeast Asia this week. He's visiting Vietnam, He's visiting Malaysia. 252 00:14:01,840 --> 00:14:05,559 Speaker 3: In Vietnam, he called on the Vietnamese to partner with 253 00:14:05,640 --> 00:14:09,720 Speaker 3: China to resist the unilateral bullying that's happening in the world, 254 00:14:09,760 --> 00:14:12,920 Speaker 3: which is of course availed reference to the United States. 255 00:14:13,200 --> 00:14:17,000 Speaker 3: There's been reports that we're going to get many European 256 00:14:17,080 --> 00:14:21,080 Speaker 3: leaders visiting Beijing later this year for a summit. That 257 00:14:21,200 --> 00:14:25,040 Speaker 3: would suggest another opportunity for China to enhance its relationship 258 00:14:25,080 --> 00:14:29,800 Speaker 3: with Europe. Whether or not other countries wholeheartedly embrace China, 259 00:14:29,800 --> 00:14:32,800 Speaker 3: I think, is a different question. In Asia, for example, 260 00:14:33,000 --> 00:14:36,960 Speaker 3: you have places like Japan, India, the Philippines, other Southeast 261 00:14:37,000 --> 00:14:40,200 Speaker 3: Asian countries that have territorial disputes with China, and so 262 00:14:40,280 --> 00:14:43,960 Speaker 3: they are not going to be embracing China that quickly. 263 00:14:43,960 --> 00:14:47,360 Speaker 3: There's going to be suspicion in those relationships. Same with Europe. 264 00:14:47,680 --> 00:14:55,440 Speaker 3: China has supported Russia and its war invasion of Ukraine diplomatically, rhetorically, economically, 265 00:14:55,520 --> 00:15:00,800 Speaker 3: and so that is put many European countries off, and 266 00:15:00,840 --> 00:15:04,280 Speaker 3: so there's going to be suspicion as China tries to 267 00:15:04,320 --> 00:15:05,680 Speaker 3: strengthen these relationships. 268 00:15:05,960 --> 00:15:09,400 Speaker 2: You characterize this as a game of chicken, and I'm 269 00:15:09,400 --> 00:15:12,000 Speaker 2: wondering sort of how long China has here, how long 270 00:15:12,000 --> 00:15:14,520 Speaker 2: the runway is for President She to hold out on 271 00:15:14,560 --> 00:15:18,400 Speaker 2: negotiating before the situation becomes difficult for China economically, any 272 00:15:18,400 --> 00:15:20,000 Speaker 2: sense of that At this point. 273 00:15:19,680 --> 00:15:21,960 Speaker 3: I would say the runway for She in terms of 274 00:15:21,960 --> 00:15:24,920 Speaker 3: that game of chicken is very long. Without a doubt, 275 00:15:25,080 --> 00:15:28,440 Speaker 3: there is broad public support for China to fight back, 276 00:15:28,840 --> 00:15:31,600 Speaker 3: and I think that means people are willing to take 277 00:15:31,880 --> 00:15:35,200 Speaker 3: a little bit more pain if it means that that's 278 00:15:35,680 --> 00:15:38,600 Speaker 3: what they need to do to contribute to the fight 279 00:15:38,640 --> 00:15:41,600 Speaker 3: against the United States. And the other thing I would 280 00:15:41,600 --> 00:15:46,040 Speaker 3: say is the Chinese government has a history of enduring 281 00:15:46,760 --> 00:15:51,960 Speaker 3: difficult periods where they've placed additional burdens on local companies' 282 00:15:52,000 --> 00:15:56,400 Speaker 3: local households. COVID is a great example of that. You know, 283 00:15:56,920 --> 00:16:00,360 Speaker 3: I don't know of many countries where the government could 284 00:16:00,400 --> 00:16:03,440 Speaker 3: have imposed lockdowns like they did here in China, and 285 00:16:03,480 --> 00:16:06,840 Speaker 3: so I do think those points suggest that they can 286 00:16:06,840 --> 00:16:08,240 Speaker 3: play this game for quite a while. 287 00:16:08,680 --> 00:16:12,800 Speaker 2: Meaning President Trump might not get that phone call anytime soon. 288 00:16:13,160 --> 00:16:15,520 Speaker 3: And the reason for that is there's a very different 289 00:16:15,840 --> 00:16:21,800 Speaker 3: cultural dynamic at work, where the Chinese believe very strongly 290 00:16:21,880 --> 00:16:25,880 Speaker 3: that at a working level that she will appoint somebody, 291 00:16:26,400 --> 00:16:29,640 Speaker 3: that Trump will appoint somebody, and those two individuals will 292 00:16:29,680 --> 00:16:31,600 Speaker 3: go back and forth and back and forth and back 293 00:16:31,600 --> 00:16:34,160 Speaker 3: and forth and work out all the details of a deal. 294 00:16:35,120 --> 00:16:38,200 Speaker 3: And only after that deal has been finalized and everybody's 295 00:16:38,240 --> 00:16:42,920 Speaker 3: happy with it, only then will Hijinping appear to shake 296 00:16:42,960 --> 00:16:46,520 Speaker 3: hands and sign something. President Trump really just wants to 297 00:16:46,560 --> 00:16:49,600 Speaker 3: get she on the phone and try and work something 298 00:16:49,640 --> 00:16:55,160 Speaker 3: out person to person, one on one, and it's just 299 00:16:55,280 --> 00:16:57,680 Speaker 3: not the way the Chinese system works. It's not the 300 00:16:57,720 --> 00:16:59,080 Speaker 3: way that Chijinping works. 301 00:16:59,560 --> 00:17:02,960 Speaker 2: So that big question who's going to blink first? I 302 00:17:03,000 --> 00:17:05,600 Speaker 2: put it to both Jennifer Welch in Washington and John 303 00:17:05,680 --> 00:17:06,600 Speaker 2: Lou in Beijing. 304 00:17:07,160 --> 00:17:12,639 Speaker 3: The first person to blink is going to immediately get 305 00:17:12,880 --> 00:17:16,200 Speaker 3: a quick response from the other side. So if President 306 00:17:16,280 --> 00:17:21,119 Speaker 3: Trump blinks first, you're going to get something affirmative from 307 00:17:21,160 --> 00:17:23,119 Speaker 3: the Chinese side because they want out of this just 308 00:17:23,160 --> 00:17:26,440 Speaker 3: as badly. If the Chinese blink, I think you probably 309 00:17:26,520 --> 00:17:28,840 Speaker 3: will hear this great sigh of relief from Washington, DC. 310 00:17:29,520 --> 00:17:32,400 Speaker 1: My bet would be that it is going to be 311 00:17:32,880 --> 00:17:37,240 Speaker 1: neither side overtly obviously blinking. I think conversations are going 312 00:17:37,240 --> 00:17:40,440 Speaker 1: to start in a quieter way at more working levels, 313 00:17:40,920 --> 00:17:44,639 Speaker 1: to set this stage eventually for a leader level conversation 314 00:17:44,920 --> 00:17:49,800 Speaker 1: because of sort of their mutual interest in guarding their 315 00:17:49,840 --> 00:17:54,640 Speaker 1: respective pride. So that's my prediction. We'll see when it's 316 00:17:54,720 --> 00:17:55,720 Speaker 1: upe actually occurring. 317 00:17:58,800 --> 00:18:01,320 Speaker 2: This is the Big Take from bloom News. I'm David Gura. 318 00:18:01,880 --> 00:18:04,879 Speaker 2: This episode was produced by David Fox, Rachel Lewis Chrisky, 319 00:18:05,000 --> 00:18:08,560 Speaker 2: and our deputy executive producer, Julia Weaver. It was edited 320 00:18:08,560 --> 00:18:11,680 Speaker 2: by Patty Hirsch, John Low, Jennifer Welch, and Chris Antsy. 321 00:18:12,240 --> 00:18:14,879 Speaker 2: It was fact checked by Andreana Tapia and mixed and 322 00:18:15,000 --> 00:18:18,840 Speaker 2: sound designed by Alex Sagura. Our senior producer is Naomi Shaven, 323 00:18:19,080 --> 00:18:22,639 Speaker 2: Our senior editor is Elizabeth Ponso. Our executive producer is 324 00:18:22,720 --> 00:18:26,280 Speaker 2: Nicole Beemster Boor. Sage Bauman is Bloomberg's head of Podcasts. 325 00:18:26,880 --> 00:18:28,960 Speaker 2: If you liked this episode, make sure to subscribe and 326 00:18:29,000 --> 00:18:31,520 Speaker 2: review The Big Take wherever you listen to podcasts. It 327 00:18:31,560 --> 00:18:34,480 Speaker 2: helps people find the show, thanks for listening. We'll be 328 00:18:34,560 --> 00:18:35,280 Speaker 2: back tomorrow.