WEBVTT - Cardinal Robert Prevost Becomes First US Pope; US-UK Trade Framework 0:00:02.520 --> 0:00:10.560 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business 0:00:10.560 --> 0:00:14.440 Week Daily reporting from the magazine that helps global leaders 0:00:14.480 --> 0:00:18.400 stay ahead with insight on the people, companies, and trends 0:00:18.440 --> 0:00:23.400 shaping today's complex economy. Plus global business finance and tech 0:00:23.480 --> 0:00:27.360 news as it happens. The Bloomberg Business Week Daily Podcast 0:00:27.720 --> 0:00:31.720 with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:33.000 --> 0:00:35.720 Well, we start today with the news out of Vatican City. 0:00:35.760 --> 0:00:38.640 Cardinal Robert Francis Privos was elected to the head of 0:00:38.680 --> 0:00:41.040 the Catholic Church. It was the second day of voting 0:00:41.159 --> 0:00:43.519 in the Vatican. It was the first It is the 0:00:43.520 --> 0:00:46.720 first US national ever to take the role. He's sixty 0:00:46.760 --> 0:00:48.720 nine years old. He was born in Chicago. He spent 0:00:48.800 --> 0:00:51.160 much of his life outside the US, mostly in Peru 0:00:51.600 --> 0:00:53.920 and Rome. Leo the fourteenth is the name that he 0:00:54.000 --> 0:00:56.880 has taken. He spoke for about ten minutes last hour 0:00:57.040 --> 0:01:00.800 in Italian, Spanish and Latin as well. For more, we 0:01:00.840 --> 0:01:04.240 bring in Natalia Imparatory Lee Professor and Chair of Religious 0:01:04.240 --> 0:01:07.679 Studies at Manhattan College. Professor, good to have you with 0:01:07.760 --> 0:01:11.040 us this afternoon. We are sort of slowly learning details 0:01:11.400 --> 0:01:13.920 of the new pope. The big question I have is 0:01:14.319 --> 0:01:16.920 what direction do you think he will take the church in? 0:01:18.440 --> 0:01:21.399 Thanks for having me. Yeah, I think this is a 0:01:21.440 --> 0:01:24.160 really interesting choice. We can tell a lot from him 0:01:24.640 --> 0:01:27.800 by the choice of name. In choosing Leo the fourteenth, 0:01:27.880 --> 0:01:30.120 I think he's indicating that he wants to continue the 0:01:30.160 --> 0:01:33.720 work of one of the most consequential popes on the 0:01:33.760 --> 0:01:37.959 topic of social justice. So Leo the thirteenth wrote a 0:01:38.040 --> 0:01:41.360 huge encyclical called Reream Navarum, and it basically set the 0:01:41.400 --> 0:01:44.479 agenda for the social work of the church. And so 0:01:44.880 --> 0:01:48.600 I think this American pope is signaling to us that 0:01:48.720 --> 0:01:52.559 he will be on this sort of maybe a little 0:01:52.560 --> 0:01:55.080 bit kind of on the progressive vein that you saw 0:01:55.200 --> 0:01:55.920 Francis in. 0:01:57.680 --> 0:02:00.480 Yeah, it does look like that is an insane clicole 0:02:00.560 --> 0:02:03.680 that was aimed at the working class. And of course 0:02:03.720 --> 0:02:08.480 Pope Francis was first and foremost concerned with helping the poor. 0:02:08.919 --> 0:02:13.280 What about immigration? This is obviously the divisive issue on 0:02:13.320 --> 0:02:16.520 which the Catholic Church under Francis and the United States 0:02:16.520 --> 0:02:19.240 government under President Trump have had the most disagreement. 0:02:20.560 --> 0:02:23.079 Yeah, I think it's going to be really interesting because 0:02:23.080 --> 0:02:27.760 this is not a typical kind of US based Bishop 0:02:27.840 --> 0:02:30.520 that we're getting as the pope right now. This is 0:02:30.520 --> 0:02:32.799 a man who's lived all over Latin America. He's done 0:02:32.800 --> 0:02:34.920 a lot of diplomacy, he's done a lot of church 0:02:34.960 --> 0:02:37.400 building and bridge building in other places. You heard a 0:02:37.400 --> 0:02:40.840 lot of that actually in his opening speech about building 0:02:40.880 --> 0:02:45.760 bridges and walking together. And I think that he, with 0:02:45.880 --> 0:02:50.360 his experience, especially in poor areas in Peru, he understands 0:02:50.480 --> 0:02:53.840 what's going on with migrants and the sort of needs 0:02:53.880 --> 0:02:57.240 of people who aren't in desperate situations. And so I 0:02:57.280 --> 0:03:00.320 don't anticipate that he and the current president of this 0:03:00.400 --> 0:03:03.120 country will be on the same page necessarily when it 0:03:03.160 --> 0:03:04.000 comes to migration. 0:03:05.480 --> 0:03:08.560 What is the significance of a pope born in the 0:03:08.680 --> 0:03:12.480 United States, the first American born pope, the first US 0:03:12.600 --> 0:03:16.280 born pope, especially following the first South American pope. 0:03:17.720 --> 0:03:21.320 It is wild. None of us thought that this was 0:03:21.360 --> 0:03:23.840 going to happen. No one that I know in the 0:03:23.840 --> 0:03:27.440 Catholic universe thought that we would get an American, and 0:03:27.520 --> 0:03:31.880 so it's pretty crazy to have two Americans, you know, 0:03:32.000 --> 0:03:35.680 broadly understood, back to back. I think it signals a 0:03:35.760 --> 0:03:39.960 kind of move away from a European centered church to 0:03:40.080 --> 0:03:42.760 a more global reality and so you have this guy who, yes, 0:03:42.880 --> 0:03:45.640 is from a global superpower, the United States and Chicago 0:03:45.720 --> 0:03:51.240 a superpower city, but nevertheless is someone who was very 0:03:51.320 --> 0:03:54.800 immersed in Latin American culture and then in the culture 0:03:54.800 --> 0:03:57.320 of the Vatican. So you can see this sort of 0:03:57.480 --> 0:04:00.880 global preference that the cardinals are starting to show that 0:04:00.920 --> 0:04:03.400 they want to show that they have an openness to 0:04:03.560 --> 0:04:06.640 not just a European Church, but really a more global reality. 0:04:07.200 --> 0:04:11.040 What's the likelihood that he can heal the rift between 0:04:11.400 --> 0:04:17.080 the Vatican and American Catholics because it definitely had developed 0:04:17.120 --> 0:04:20.440 and you mentioned this isn't the typical American cardinal, those 0:04:20.440 --> 0:04:24.919 who had spoken out openly against Pope Francis. Can he 0:04:24.960 --> 0:04:28.159 bring the kind of al Smith Catholics back to the church? 0:04:29.640 --> 0:04:31.919 I mean, it's my sincere hope that that is the case. 0:04:32.000 --> 0:04:34.240 The question is can the al Smith Catholics get on 0:04:34.320 --> 0:04:39.279 board with the papacy. I mean, the whole point of 0:04:39.839 --> 0:04:43.680 a lot of this sort of disagreement is who is 0:04:43.760 --> 0:04:47.359 really in charge, who should really set the agenda for 0:04:47.480 --> 0:04:49.880 the Roman Catholic Church. And it's important for us, I mean, 0:04:49.920 --> 0:04:52.720 as Americans, I know, we feel a lot of like 0:04:52.800 --> 0:04:55.880 patriotism and everything right now, especially because he's an American pope, 0:04:56.120 --> 0:04:58.120 but he's going to be the pope of the whole 0:04:58.400 --> 0:05:01.160 global church, and so well, sometimes we can be a 0:05:01.160 --> 0:05:03.920 little bit shortsighted and think, oh, well, he's not responding 0:05:03.960 --> 0:05:05.800 to the things that we care about the most. But 0:05:05.920 --> 0:05:09.400 he is trying to steer this ship that's kind of enormous. 0:05:10.320 --> 0:05:14.120 Four billion people. We should remind everyone one point four 0:05:14.160 --> 0:05:18.400 billion people, right, the longest standing institution in the Western world. 0:05:18.720 --> 0:05:22.640 And do Catholics believe that the pope, the leader of 0:05:22.680 --> 0:05:26.159 the church is chosen by divine intervention, that essentially God 0:05:26.480 --> 0:05:28.520 has picked this pope. 0:05:29.120 --> 0:05:32.120 I mean yes, but let me give you a caveat right. 0:05:32.279 --> 0:05:36.000 God works through human beings. It's not that God whispered 0:05:36.200 --> 0:05:39.719 the name Prevost in the ear of every cardinal elector, 0:05:39.760 --> 0:05:41.920 and that's how it happened. Right, It's not Harry Potter. 0:05:42.520 --> 0:05:46.800 It's very much real life. And so we believe that 0:05:47.240 --> 0:05:51.239 the God doesn't let the church fall completely into error. 0:05:51.279 --> 0:05:55.280 That we believe or we trust that God is somehow 0:05:55.320 --> 0:05:58.919 in control of this church. And that is very much 0:05:59.080 --> 0:06:02.760 what sort of is we see happening in a conclave. 0:06:03.120 --> 0:06:05.640 Nobody knows what goes on inside you sort of really 0:06:05.720 --> 0:06:07.680 have to trust, and even the men who are in 0:06:07.760 --> 0:06:11.040 there are in a sense putting their trust in you know, 0:06:11.120 --> 0:06:12.920 we don't really know how this is going to turn out. 0:06:13.160 --> 0:06:15.080 We're going to sort of lay it at the feet 0:06:15.120 --> 0:06:18.320 of God. And that's that's how Catholics think God works 0:06:18.320 --> 0:06:18.760 in the world. 0:06:19.040 --> 0:06:21.240 I was pretty shocked to emerge from a meeting just 0:06:21.279 --> 0:06:23.839 after noon here in New York and see white smoke 0:06:23.920 --> 0:06:27.839 up on the Bloomberg television screen, given that the conclave 0:06:27.960 --> 0:06:32.240 just started yesterday in Vatican City, and you know, yeah, 0:06:32.279 --> 0:06:35.320 but looking into this a little more, that's not necessarily 0:06:35.320 --> 0:06:38.080 that unusual, at least in modern times. They're not necessarily 0:06:38.120 --> 0:06:41.120 going to be holed up for weeks historical context, for 0:06:41.640 --> 0:06:44.480 just the duration of this conclave. Is it surprising to 0:06:44.520 --> 0:06:45.480 you or is it pretty quick? 0:06:46.400 --> 0:06:48.760 I mean it felt quick, I feel like, because like you, 0:06:49.080 --> 0:06:51.280 I feel like they just started yesterday and what's the deal. 0:06:51.320 --> 0:06:53.960 But it's usually four to five ballots, right, That's pretty 0:06:54.000 --> 0:06:55.880 much what it's taken the last three times, four or 0:06:55.920 --> 0:06:58.800 five ballots they do. They're very efficient with their voting. 0:06:59.839 --> 0:07:02.599 I wish I definitely didn't think it was going to 0:07:02.640 --> 0:07:05.240 be prevost this quickly. So I was in a meeting 0:07:05.279 --> 0:07:07.800 with a student and I had to sort of break 0:07:07.839 --> 0:07:11.800 out and cancel it and move away from it. But yeah, 0:07:11.800 --> 0:07:14.280 the white smoke came quickly, and it was a surprise 0:07:14.360 --> 0:07:16.640 that it was prevous. Now I will say this, he 0:07:16.960 --> 0:07:20.400 is the guy who was advising Pope Francis on who 0:07:20.440 --> 0:07:23.720 to appoint as bishops, and it's really significant that he 0:07:24.040 --> 0:07:27.520 is now the new Pope. It tells us that Francis's 0:07:27.640 --> 0:07:29.920 vision for who should be in leadership in the church, 0:07:29.920 --> 0:07:32.720 which is like people who were pastors, that's what Francis 0:07:32.760 --> 0:07:36.400 really wanted. That this Leo the fourteenth is going to 0:07:36.400 --> 0:07:37.720 continue that sort of vision. 0:07:38.720 --> 0:07:44.760 He actually started off quoting Pope Francis's Easter Sunday. 0:07:46.640 --> 0:07:47.160 Words. 0:07:47.920 --> 0:07:51.560 Do you expect him to carry on Francis's work not 0:07:51.600 --> 0:07:55.040 only in terms of, you know, helping poverty, working class, 0:07:55.040 --> 0:07:58.080 but also in terms of women in the church in leadership, 0:07:58.160 --> 0:08:03.120 in terms of LGBTQ, bringing a sense of inclusiveness to 0:08:03.520 --> 0:08:07.200 this Catholic church that traditionally, at least in leadership, only 0:08:07.200 --> 0:08:08.240 relies on men. 0:08:09.800 --> 0:08:12.280 I mean, I hope. So, I don't know. I don't 0:08:12.280 --> 0:08:14.800 know where he stands on the issue of women. I 0:08:14.840 --> 0:08:18.120 can only rely on what he said from the balcony, 0:08:18.520 --> 0:08:20.800 and a lot of that was echoing so much of 0:08:20.840 --> 0:08:22.840 what Francis was saying. So you heard him hit all 0:08:22.840 --> 0:08:26.160 the greatest hits. Right. He talked about peace one hundred times. 0:08:26.200 --> 0:08:29.440 He talked about building bridges one hundred times. He talked 0:08:29.480 --> 0:08:32.640 about walking together to the Promised Land. He kept saying 0:08:32.800 --> 0:08:36.040 tutti tuti, which was like it means everyone, which was 0:08:36.080 --> 0:08:39.520 a refrain of Francis's He talked about a church that 0:08:39.600 --> 0:08:42.480 was open to all, that needed to dialogue, that needed 0:08:42.520 --> 0:08:46.680 to do encounter, and that I think signals that he 0:08:46.840 --> 0:08:49.280 wants to continue the legacy of Francis. Now as for 0:08:49.360 --> 0:08:52.920 the specifics, right, will he continue to appoint women to 0:08:53.000 --> 0:08:56.080 decision making positions in the Vatican? I hope. So that's 0:08:56.120 --> 0:08:58.040 not some toothpaste. I think that I'll go back into 0:08:58.120 --> 0:09:00.600 the tube very easily, but you won't know. 0:09:01.200 --> 0:09:01.320 Right. 0:09:01.440 --> 0:09:04.520 This is again where Catholics are like, come, Holy Spirit, 0:09:04.679 --> 0:09:05.200 let's do this. 0:09:05.600 --> 0:09:08.680 Professor, really appreciate you joining us on Bloomberg Business Week 0:09:08.720 --> 0:09:12.840 Daily this afternoon. Professor Natalia Imparatory, Professor and Chair of 0:09:12.840 --> 0:09:15.079 Religious Studies at Manhattan College. 0:09:15.280 --> 0:09:19.280 You're listening to the Bloomberg Business Weekdaily podcast. Catch US 0:09:19.360 --> 0:09:22.800 live weekday afternoons from two to five pm Eastern. Listen 0:09:22.840 --> 0:09:26.400 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:09:26.559 --> 0:09:29.920 or watch US live on YouTube. 0:09:30.440 --> 0:09:33.920 Well a hard pivot from Vatican City and from What's 0:09:33.920 --> 0:09:36.040 going on with the Pope too. The other big story 0:09:36.120 --> 0:09:38.720 of today, and that of course, has to do with trade. 0:09:38.760 --> 0:09:42.080 President Trump announced a trade framework with the UK, hailing 0:09:42.080 --> 0:09:44.720 it is a quote breakthrough that will bring down barriers 0:09:44.760 --> 0:09:48.280 and expand market access for American imports. The President said 0:09:48.280 --> 0:09:50.520 final details of the pact would still be negotiated in 0:09:50.559 --> 0:09:53.720 the coming weeks, but under the agreement, the UK would 0:09:53.760 --> 0:09:57.280 fast track American goods through their customs process and reduce 0:09:57.360 --> 0:10:01.280 barriers on ag, chemical, energy, and industrial exports. Here's what 0:10:01.280 --> 0:10:02.400 he said a little earlier today. 0:10:03.120 --> 0:10:06.760 Both countries have agreed that the economic security is national secured, 0:10:06.840 --> 0:10:09.840 and we'll be working together as allies to ensure that 0:10:09.880 --> 0:10:14.280 we have a strong industrial base, appropriate export controls and protections. 0:10:14.320 --> 0:10:17.920 Were key technologies and industries like steel. Steel is a 0:10:17.920 --> 0:10:21.040 big factor. Both countries will become stronger with steel. 0:10:21.720 --> 0:10:23.840 That was President Trump earlier in the day from the 0:10:23.880 --> 0:10:26.000 Oval Office for more we bring in Bloomberg News, UK 0:10:26.120 --> 0:10:29.200 Government porter Joe Mays and Bloomberg Economics and US economist 0:10:29.160 --> 0:10:33.520 start Paul Joe's in London stored us here in the studio. Joe, 0:10:33.559 --> 0:10:35.280 I do want to start with you and just can 0:10:35.360 --> 0:10:38.200 textualize the framework or at least the details with what 0:10:38.240 --> 0:10:42.199 we know in the framework between what was there before 0:10:42.280 --> 0:10:45.600 Liberation Day so called Liberation Day, and what is the 0:10:45.640 --> 0:10:48.360 status now after this framework was announced. What are the 0:10:48.360 --> 0:10:49.280 big differences there? 0:10:50.840 --> 0:10:54.280 Yes, the context is that the US brought in these 0:10:54.360 --> 0:10:58.440 quite putative tariffs, particularly on the car sector, steel's aluminium, 0:10:58.840 --> 0:11:01.679 in excess of twenty five per sent for those industries 0:11:01.720 --> 0:11:03.640 and that was very damaging to the UK economy. And 0:11:04.080 --> 0:11:06.960 after the deal today there is relief for those industries. 0:11:07.040 --> 0:11:10.240 So on cars the tariff going down from twenty seven 0:11:10.280 --> 0:11:12.480 point five percent to ten percent for a quotch of 0:11:12.520 --> 0:11:14.959 one hundred thousand vehicles, which the privacy case DALM was 0:11:15.000 --> 0:11:17.839 hailing as a victory for companies like Jaguar Landrover. The 0:11:17.880 --> 0:11:20.640 steel tariff has gone from twenty five percent to zero. 0:11:20.960 --> 0:11:24.000 Similar for aluminium. So those are the real big tariff 0:11:24.240 --> 0:11:27.160 wins that the UK wants to talk about But nevertheless 0:11:27.160 --> 0:11:30.319 there are still these ten percent baseline tariffs on the 0:11:30.440 --> 0:11:32.640 arrest of goods that the UK tries with the US. 0:11:32.760 --> 0:11:35.559 So it's still a weaker position for the UK than 0:11:35.640 --> 0:11:38.280 before Donald Trump became present, but it's better than things 0:11:38.280 --> 0:11:40.520 were yesterday. That's how kiss Dalwin was framing it. So 0:11:40.679 --> 0:11:43.880 it's a limited polisical win for the UK whilst still 0:11:44.000 --> 0:11:46.360 suffering effectively from the remaining tariffs. 0:11:46.480 --> 0:11:49.559 What about US access to the UK market? And one 0:11:49.559 --> 0:11:52.160 of the things Donald Trump has talked about for a 0:11:52.240 --> 0:11:56.920 long time is that, you know, Europeans and I suppose 0:11:56.960 --> 0:12:01.359 he includes the Brits in that don't buy American products, 0:12:01.360 --> 0:12:04.320 and of course he's talking about cars. Is the UK 0:12:04.480 --> 0:12:08.080 market going to be far more open to US goods 0:12:08.120 --> 0:12:11.560 than it was before this agreements? 0:12:11.640 --> 0:12:15.560 There was included in this agreement provisions to liberalize access 0:12:15.640 --> 0:12:18.280 to UK market for food products for example, for example, 0:12:18.320 --> 0:12:21.040 beef exports can now come into the UK from the 0:12:21.160 --> 0:12:22.400 US and why they couldn't before. 0:12:22.520 --> 0:12:23.400 So that was hell as. 0:12:23.280 --> 0:12:27.240 A victory by President Trump. A tariff on ethanol exports 0:12:27.240 --> 0:12:29.440 in the UK they're also now being removed, So yes, 0:12:29.480 --> 0:12:33.560 there was a liberalization here. It wasn't an enormous liberalization that, 0:12:33.679 --> 0:12:36.720 for example, on food standards, the UK is still saying 0:12:36.720 --> 0:12:39.840 that it won't, for example, accept hormone treated beef into Britain. 0:12:40.000 --> 0:12:42.120 So that's a a kind of limitation on that liberalization, 0:12:42.200 --> 0:12:43.520 but still extreme limitation. 0:12:44.600 --> 0:12:46.400 Thanks Start, Yeah, I want to bring Start Paul in 0:12:46.400 --> 0:12:48.480 a Bloomberg Economics he joined us here in the Bloomberg 0:12:48.480 --> 0:12:51.439 Business Week studio. Equity markets certainly cheering this, and we 0:12:51.480 --> 0:12:53.160 should note that the fact that the President did make 0:12:53.160 --> 0:12:56.199 comments about buying US equities earlier in the day as 0:12:56.240 --> 0:12:58.600 well when he was in the Oval office earlier. Stuart, 0:12:58.640 --> 0:13:03.000 what is the view from your per Bloomberg Economics of 0:13:04.559 --> 0:13:06.199 what this means for the US and sort of how 0:13:06.200 --> 0:13:09.560 it could illuminate maybe a framework moving forward for deals. 0:13:09.880 --> 0:13:12.760 Just we know that we're on a de escalatory path. 0:13:12.880 --> 0:13:15.360 This concretizes some of it. It gives some sort of 0:13:15.520 --> 0:13:18.800 shape to what we could expect from deals going forward. 0:13:19.160 --> 0:13:21.080 It might be a piecemeal approach, and this can be 0:13:21.120 --> 0:13:23.880 something that takes a long time to develop. As we 0:13:23.920 --> 0:13:27.400 heard from Secretary Bessant, there are seventeen key trading partners 0:13:27.400 --> 0:13:29.800 that the US is approaching deals with. If they all 0:13:29.840 --> 0:13:32.400 take this shape, They're all going to have a relatively 0:13:32.640 --> 0:13:36.240 dull sort of impact on US economic activity. What will 0:13:36.280 --> 0:13:41.160 really shift most is sentiment around US engagement in the world. So, 0:13:41.400 --> 0:13:43.920 just recognizing that we're on this sort of de escalatory 0:13:44.040 --> 0:13:46.160 trend and that there's not going to be just a 0:13:46.200 --> 0:13:48.480 full retreat from the global stage. 0:13:48.440 --> 0:13:51.640 What would be the best for US economic activity? I mean, 0:13:53.679 --> 0:13:55.800 it doesn't seem like the President's going to lower at 0:13:55.880 --> 0:13:59.680 least the baseline tariffs billow ten percent for any country, 0:14:00.040 --> 0:14:00.920 won't do it for the UK. 0:14:01.559 --> 0:14:05.439 Yeah, So even if he doesn't lower the baseline tariff, 0:14:05.480 --> 0:14:08.400 creating enough car vouds does open up, so it does 0:14:08.480 --> 0:14:11.400 sort of generate additional economic activity, and it brings the 0:14:11.440 --> 0:14:14.920 average effective tarif rate significantly below what that ten percent 0:14:15.000 --> 0:14:17.839 baseline is. So if we think about what the average 0:14:17.840 --> 0:14:20.080 effective tarif rate was on the UK, it was just 0:14:20.120 --> 0:14:23.440 a touch above ten percent. Now with these carveouts, the 0:14:23.480 --> 0:14:26.440 average effective tarifrate in the UK drops down to about 0:14:26.480 --> 0:14:29.520 seven percent. So what does that means, Let's say for 0:14:29.520 --> 0:14:32.640 the UK in terms of economic activity and growth, where 0:14:32.720 --> 0:14:36.240 there was about about thirty basis points of drag on 0:14:36.360 --> 0:14:39.040 real GDP growth for the UK, now it'll just be 0:14:39.080 --> 0:14:42.680 about twenty basis points of drag, so that'll keep GDP 0:14:42.840 --> 0:14:46.080 growth just a touch under one percent for the full year. 0:14:46.360 --> 0:14:48.600 That's that's according to our UK forecast. 0:14:48.680 --> 0:14:51.440 Hey, Joe, on that point, based on your reporting and 0:14:51.480 --> 0:14:54.400 what you've learned about this deal, does it seem like 0:14:54.440 --> 0:14:56.360 it's a better deal for the US, it's a better 0:14:56.400 --> 0:15:00.800 deal for the UK? Or are they kind of when's 0:15:00.880 --> 0:15:01.480 the table here? 0:15:01.600 --> 0:15:01.760 Is it? 0:15:02.120 --> 0:15:02.280 When? 0:15:02.360 --> 0:15:02.600 When? 0:15:04.120 --> 0:15:04.320 Yeah? 0:15:04.320 --> 0:15:06.480 I mean it feels like a better deal for the 0:15:06.600 --> 0:15:09.240 US if your reference point is the day Donal Trump 0:15:09.280 --> 0:15:12.680 becomes president, because compared to that day, the US has 0:15:12.720 --> 0:15:16.240 gained a fair amounts here agriculture access for many products, 0:15:16.400 --> 0:15:19.080 the ethne thing I mentioned, and still has these ten 0:15:19.080 --> 0:15:20.760 per cent tariffs on the UK, and the UK is 0:15:20.920 --> 0:15:24.840 in damaged limitation mode with this deal, so better than yesterday, 0:15:24.880 --> 0:15:26.640 but clearly not as good as it was when Don 0:15:26.680 --> 0:15:29.480 Trump first became president. So yeah, I think it's the 0:15:29.560 --> 0:15:32.280 US is I think coming out of this slightly stronger 0:15:32.400 --> 0:15:34.960 or the UK also is trying to claim that the 0:15:35.000 --> 0:15:35.840 wins are on their side. 0:15:36.120 --> 0:15:38.160 As we mentioned, Joe, this is a framework right now. 0:15:38.200 --> 0:15:41.200 Some of the details continue the need to be hashed 0:15:41.240 --> 0:15:43.920 out in the coming weeks. What questions do you have, 0:15:44.040 --> 0:15:46.160 like what's the fine print here that we don't really 0:15:46.160 --> 0:15:46.640 know yet. 0:15:48.120 --> 0:15:50.600 So the UK said that this for them is really 0:15:50.600 --> 0:15:53.760 a starting point. If anything, there's still much more to 0:15:53.840 --> 0:15:56.640 happen when it comes to negotiations. That are things like 0:15:56.800 --> 0:15:59.640 the digital services tax, which the US wants to see 0:15:59.680 --> 0:16:02.480 regime used. It's dislikes by the likes of Facebook, Google, 0:16:02.720 --> 0:16:05.840 the evil musk Rey dislikes that tax. That could form 0:16:05.920 --> 0:16:08.600 part of a digital agreement that's still to be negotiated. 0:16:08.720 --> 0:16:11.560 The UK has said there's also other tariff lines which 0:16:11.600 --> 0:16:14.200 the UK would like to see removed, but that subject 0:16:14.200 --> 0:16:17.480 further negotiation. The pharmaceutical sector, for example, very important to 0:16:17.480 --> 0:16:20.040 the UK. There wasn't explicit reference to that in the 0:16:20.080 --> 0:16:23.400 agreement today, so what happens there on tariff So there's 0:16:23.400 --> 0:16:25.480 still much more to come bent President Trump was trying 0:16:25.480 --> 0:16:27.840 to say this is full comprehensive, We've maxed it out, 0:16:27.880 --> 0:16:29.840 and the UK was saying, well, actually there's a lot 0:16:29.840 --> 0:16:31.400 we still wanted to talk about here, but you know, 0:16:31.800 --> 0:16:33.000 we'll play nicely for today. 0:16:33.640 --> 0:16:38.680 Joe, I wonder about the the importance of automotive to 0:16:38.880 --> 0:16:41.880 the UK economy. It's been become clear. I think to 0:16:41.920 --> 0:16:44.720 a lot of people over the past few weeks, certainly 0:16:44.760 --> 0:16:47.800 since April second, that global trade is car trade? 0:16:47.840 --> 0:16:48.160 Really? 0:16:49.440 --> 0:16:53.600 How big is it in the UK, especially when you're 0:16:53.600 --> 0:16:55.760 just looking at exports to the US, right, because I 0:16:55.800 --> 0:16:59.400 only can think of very high end you know, Gordon 0:16:59.480 --> 0:17:05.960 Murray Automobiles, McMurtry, McLaren, Range, Rover, Rolls, Royce Bentley. It's 0:17:05.960 --> 0:17:09.600 not the mass production vehicles as Tim was mentioning, like 0:17:09.640 --> 0:17:11.800 Toyota and Nissan. Even though you make them there, you 0:17:11.840 --> 0:17:13.679 don't make them there for our market. 0:17:14.520 --> 0:17:17.440 Yeah, that's right. It's premium cars that the UK tends 0:17:17.480 --> 0:17:20.400 to sell into the US, and exports of UK cars 0:17:20.440 --> 0:17:22.480 the US were about one hundred thousand of the last counts, 0:17:22.480 --> 0:17:25.119 which is basically covered by this quota that's been announced today, 0:17:25.280 --> 0:17:27.199 one hundred thousand quota at ten percent. So you can 0:17:27.240 --> 0:17:29.520 see why the UK is happy with that arrangement. I 0:17:29.520 --> 0:17:32.679 think the UK carnistry has been broadly speaking, in decline 0:17:32.760 --> 0:17:35.399 in recent decades, but nevertheless it has carved out this 0:17:35.560 --> 0:17:38.480 niche in high end luxury vehicles and the US worst 0:17:38.560 --> 0:17:40.960 important market. So there's a kind of symbolic win here 0:17:40.960 --> 0:17:43.480 for the UK. It won't have massive impacts on the 0:17:43.560 --> 0:17:45.960 UK comedy Ritt large. It's still a very small part 0:17:45.960 --> 0:17:47.760 of the UK comedy. But nevertheless it's a kind of 0:17:47.840 --> 0:17:51.359 nice symbolic political win for Kirstamer to say, look, I 0:17:51.440 --> 0:17:53.160 have masage to reduce these tarers and he was saying 0:17:53.160 --> 0:17:57.240 today this preserves jobs across the UK, so that's something 0:17:57.280 --> 0:17:58.000 to be celebrated. 0:17:58.240 --> 0:18:01.719 We're having this conversation, Stuart, in context of a United 0:18:01.760 --> 0:18:04.919 States that has essentially said now is the time to 0:18:04.960 --> 0:18:08.760 come and negotiate. We know that the Treasury Secretary is 0:18:08.760 --> 0:18:11.760 headed to Switzerland this weekend to meet with representatives from 0:18:11.760 --> 0:18:14.960 the Chinese government. We're not talking about China here, though. 0:18:15.000 --> 0:18:18.040 Does any of this matter without a deal with China? 0:18:18.320 --> 0:18:21.520 China, of course matters. Most accounts for about what fourteen 0:18:21.480 --> 0:18:25.359 to fifteen percent of our total imports were running a 0:18:25.400 --> 0:18:28.919 trade surplus with the UK. It really doesn't matter a 0:18:28.960 --> 0:18:31.320 ton to the US if the average effective tariff rate 0:18:31.400 --> 0:18:35.120 on UK goods is somewhat higher. Once you start creating 0:18:35.160 --> 0:18:37.760 carve outs for things like pharmaceuticals and everything else under 0:18:37.760 --> 0:18:40.160 the sun, we're gonna drop from probably a current effective 0:18:40.160 --> 0:18:43.320 tarifrate of seven percent on UK imports to something closer 0:18:43.400 --> 0:18:47.160 to three percent. Not really material. What I do think 0:18:47.240 --> 0:18:51.280 is the most material is this idea that when Trump 0:18:51.320 --> 0:18:56.720 took office, the outward expression was one of an interest 0:18:56.760 --> 0:19:00.440 in withdrawing from the global stage. Now directionally we're moving 0:19:00.440 --> 0:19:03.760 in the opposite direction. We have had public statements from 0:19:03.760 --> 0:19:07.560 folks like Besant and everybody else saying that one hundred 0:19:07.560 --> 0:19:09.960 and forty five percent effective rate on China is not 0:19:10.119 --> 0:19:13.399 something that sustainable or that can stay, that can remain 0:19:14.000 --> 0:19:18.880 in perpetuity. And so again the direction is towards de escalation, 0:19:19.040 --> 0:19:21.159 and I think that that's what matters most. This is 0:19:21.200 --> 0:19:24.320 not going to be just the complete crackup of the 0:19:24.359 --> 0:19:28.359 global commercial order that was threatened. There will be a 0:19:28.400 --> 0:19:30.040 turning of the tide, in a bit of a shifting. 0:19:31.040 --> 0:19:32.560 But we knew that that was going to be the case, 0:19:32.560 --> 0:19:35.960 with friend shoring and on shoring as opposed to you know, 0:19:36.119 --> 0:19:39.480 retaliatory or reciprocal tariffs being the terminology of the day. 0:19:39.600 --> 0:19:41.439 We knew this was going to be the direction under Trump. 0:19:41.480 --> 0:19:42.560 By the way, I forgot to. 0:19:44.400 --> 0:19:48.240 I forgot to tell everyone Happy v Day because it 0:19:48.320 --> 0:19:51.200 is May eighth, right, It's victory in Europe Day. Joe, 0:19:51.280 --> 0:19:54.560 Happy ve Day. Well, what do we know about the 0:19:54.960 --> 0:19:58.960 European Union? I mean, the US UK agreement has been 0:19:59.000 --> 0:20:02.919 the main headline, but we've got another flurry of trade 0:20:02.920 --> 0:20:09.080 headlines with golf, sovereign wealth funds, with a critical minerals 0:20:09.080 --> 0:20:13.480 deal in Ukraine, and the EU talking about tariffs on 0:20:13.600 --> 0:20:16.600 ninety five billion dollars of US exports. What do we 0:20:16.640 --> 0:20:17.680 know about the EU deal? 0:20:19.520 --> 0:20:21.560 And what we know is that clearly it's a big 0:20:21.600 --> 0:20:24.520 priority for both sides to get some kind of agreement done. 0:20:24.520 --> 0:20:26.359 And we're all kind of reading the tea leaves today 0:20:26.480 --> 0:20:29.000 on the UK agreement to say, Okay, clearly the US 0:20:29.040 --> 0:20:30.879 is willing to do this entree, so might they be 0:20:30.880 --> 0:20:33.120 willing for the same on the EU. But clearly it's 0:20:33.160 --> 0:20:35.120 different when it comes to the scope of those kinds 0:20:35.160 --> 0:20:38.600 of deals. Obviously much larger economies, much more trade at stake. 0:20:38.840 --> 0:20:41.440 It's really a watching brief at this point, trying to see, 0:20:41.560 --> 0:20:43.840 you know, will there be movement in these coming weeks. Clearly, 0:20:43.960 --> 0:20:46.000 as we've just been discussing, the direction of travel from 0:20:46.040 --> 0:20:49.159