WEBVTT - Daybreak Weekend: Nvidia Earnings, G20 Summit, U.S-China Relations 0:00:00.240 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.440 --> 0:00:12.840 This is Bloomberg day Break Weekend, our global look at 0:00:12.840 --> 0:00:14.920 the top stories in the coming week from our day 0:00:14.920 --> 0:00:17.320 Break anchors all around the world. And straight ahead on 0:00:17.360 --> 0:00:20.320 the program, we'll look ahead to some key inflation data 0:00:20.360 --> 0:00:23.840 in the US how that may impact FED policy moving forward. 0:00:24.040 --> 0:00:25.919 I'm Tom Busby in New York. 0:00:26.400 --> 0:00:29.120 I'm Caroline Headker in London, where we're looking ahead to 0:00:29.160 --> 0:00:31.920 a G twenty meeting without the United States. 0:00:32.159 --> 0:00:37.000 I'm Doug Chrisner looking at the evolving relationship between Presidents Trump. 0:00:36.760 --> 0:00:41.280 And she That's all straight ahead on Bloomberg Daybreak Weekend 0:00:41.720 --> 0:00:44.760 on Bloomberg eleven to three, Yeero, New York, Bloomberg ninety 0:00:44.840 --> 0:00:48.519 nine to one, Washington, DC, Bloomberg ninety two to nine, Boston, 0:00:49.040 --> 0:00:53.479 DAB Digital Radio, London, Sirius XM one twenty one, and 0:00:53.600 --> 0:00:56.440 around the world on Bloomberg Radio, dot Com and the 0:00:56.480 --> 0:00:57.760 Bloomberg Business App. 0:01:02.640 --> 0:01:04.480 Good day to you. I'm Tom Busby, and we begin 0:01:04.520 --> 0:01:07.360 today's program. But we'll look at some key economic data 0:01:07.400 --> 0:01:11.479 here in the US. PCEE read on inflation as well 0:01:11.520 --> 0:01:14.760 as personal spending and personal income data all for the 0:01:14.760 --> 0:01:18.040 month of January that is out on Friday for more 0:01:18.120 --> 0:01:20.360 on what it all means and how this may impact 0:01:20.400 --> 0:01:23.720 Fed policy. We're joined by Stuart Paul, us economists with 0:01:23.760 --> 0:01:28.440 Bloomberg Economics. Stuart, a lot of uncertainty out there, possible 0:01:28.480 --> 0:01:31.600 impact of threatened US tariffs. We've got federal job losses, 0:01:31.640 --> 0:01:35.920 We've got even Walmart this past week seeing sales growth slow. 0:01:36.760 --> 0:01:40.679 One constant is stubbornly high inflation. What's behind it? What 0:01:40.720 --> 0:01:43.120 do you expect to see in the January PCE report 0:01:43.160 --> 0:01:45.080 the Fed's preferred measure of inflation. 0:01:45.680 --> 0:01:48.800 As you mentioned, the core PCE price Index is the 0:01:48.880 --> 0:01:53.600 Fed's preferred measure, and we estimate that monthly core PCEE 0:01:53.640 --> 0:01:56.560 inflation is going to register zero point three percent. That's 0:01:56.720 --> 0:02:01.240 faster than the zero point one percent measured and reported 0:02:01.480 --> 0:02:05.280 in December. So, as you mentioned, stubbornly high inflation, we 0:02:05.360 --> 0:02:09.200 can estimate PCE with a pretty good deal of precision 0:02:09.360 --> 0:02:12.919 because most of its components come from the CPI and 0:02:13.000 --> 0:02:16.639 from the Producer Price Index. So seeing those items earlier 0:02:16.680 --> 0:02:20.440 this month allows us to estimate the PCE index with 0:02:20.480 --> 0:02:23.760 a bit more precision, and from the CPI we're able 0:02:23.800 --> 0:02:28.000 to identify that it's really the price of some discretionary 0:02:28.040 --> 0:02:32.400 services categories, things like accommodations, recreation services that are going 0:02:32.440 --> 0:02:36.640 to be buoying the core PCE measure. From the PPI report, 0:02:36.680 --> 0:02:39.720 we get things like hospital services, and again that's going 0:02:39.760 --> 0:02:43.440 to be boosting the core PCE measure as well. So 0:02:43.840 --> 0:02:46.920 the thing that we now need to consider is whether 0:02:47.040 --> 0:02:51.920 this January increase is really something that's indicative of persistent 0:02:51.960 --> 0:02:56.000 price pressures. We see persistent price pressures, for example, in shelter, 0:02:56.280 --> 0:03:00.000 in auto insurance, some of the some of the category 0:03:00.200 --> 0:03:02.760 is that take a long time to sort of catch 0:03:02.840 --> 0:03:05.919 up to pass price hikes. For example, if it costs 0:03:05.919 --> 0:03:08.280 more to replace your car, it's going to cost more 0:03:08.280 --> 0:03:10.760 to ensure that car as well. So we're still seeing 0:03:10.760 --> 0:03:13.480 some persistent price pressures there. But I do think that 0:03:13.520 --> 0:03:17.200 the January report is going to show some residual seasonality, 0:03:17.280 --> 0:03:21.760 that's to say, annual price increases that aren't fully accounted 0:03:21.800 --> 0:03:24.400 for by the Bureau of Labor Statistics and the Bureau 0:03:24.440 --> 0:03:26.960 of Economic Analysis. I think that we are going to 0:03:26.960 --> 0:03:29.920 see some of that residual seasonality in the January report. 0:03:30.560 --> 0:03:34.520 What about food and energy, you can't ignore those. Everybody 0:03:34.560 --> 0:03:38.080 has to, you know, eat everybody has to heat their home, 0:03:38.240 --> 0:03:41.400 put gas in the car, a real driver for CPI 0:03:41.400 --> 0:03:44.320 and PPI in January, and there's not a whole lot 0:03:44.360 --> 0:03:46.880 of seasonality about it. I mean, except for heating your home, 0:03:47.360 --> 0:03:49.880 that's right. But in the summer you're cooling your homes. 0:03:49.720 --> 0:03:52.000 That's right. So for some energy goods and for some 0:03:52.160 --> 0:03:56.000 energy services, you do have some seasonality. So for example, 0:03:56.040 --> 0:04:00.520 there's summer driving season that boost gasoline prices. Sometimes that's 0:04:00.560 --> 0:04:03.320 more accounted for than at other times in the seasonal 0:04:03.320 --> 0:04:06.320 adjustment factors. What we did see with energy prices, So 0:04:06.360 --> 0:04:08.040 you bring up a really good point about this, is 0:04:08.040 --> 0:04:12.040 that in January it was so incredibly cold that demand 0:04:12.120 --> 0:04:17.040 for power and other utilities was exceptional, and that is 0:04:17.680 --> 0:04:21.320 that is continuing to contribute to headline inflation measures. That's 0:04:21.360 --> 0:04:24.719 why we saw, for example, the major upside surprise in 0:04:24.800 --> 0:04:27.560 headline CPI during the month. It was in large part 0:04:27.600 --> 0:04:31.320 because of energy goods and services. And so that is 0:04:31.320 --> 0:04:34.320 something that consumers are feeling. It is hitting their pocketbooks 0:04:34.520 --> 0:04:36.599 and it is causing them to rain and spending in 0:04:36.640 --> 0:04:37.640 some other categories. 0:04:37.760 --> 0:04:40.120 Well, let's talk about some other data coming out I 0:04:40.120 --> 0:04:43.240 think will tell us a lot personal spending and personal 0:04:43.279 --> 0:04:46.640 incomes for January, the latest monthly jobs report showed that 0:04:47.000 --> 0:04:51.200 wages still increasing. That's not good for inflation. Holiday retail 0:04:51.240 --> 0:04:54.320 spending was strong slowed a little bit just in January. 0:04:54.440 --> 0:04:58.480 But what do you expect to see in those reports? 0:04:58.560 --> 0:05:01.160 It's interesting. I think that the January report is going 0:05:01.200 --> 0:05:07.120 to show a pretty clunky transmission between incomes and spending. 0:05:07.600 --> 0:05:09.680 I think that based on what we saw in the 0:05:09.720 --> 0:05:13.400 jobs report, wages were accelerating during the month, hiring slowed, 0:05:13.640 --> 0:05:16.760 so that tempered personal income growth a little bit, and 0:05:16.839 --> 0:05:20.200 labor intensity, the average number of hours worked per week 0:05:20.279 --> 0:05:23.400 actually declined, so that tempered personal income just a little bit. 0:05:23.800 --> 0:05:26.440 But in January we also get cost of living adjustments 0:05:26.440 --> 0:05:28.520 two and a half percent cost of living adjustments for 0:05:28.600 --> 0:05:31.719 Social Security recipients. We're going to see a higher Medicare 0:05:31.720 --> 0:05:35.320 and Medicaid receipts in a personal income report, and we're 0:05:35.440 --> 0:05:39.920 estimating nearly one percent interest income growth for those who 0:05:39.960 --> 0:05:43.640 are holding financial instruments. So if you factor all of 0:05:43.640 --> 0:05:47.520 those together, we're estimating nearly zero point four percent month 0:05:47.560 --> 0:05:50.479 on month personal income growth. We're a bit higher than consensus, 0:05:50.600 --> 0:05:53.960 and that's a pretty strong personal income growth reading for 0:05:54.040 --> 0:05:56.960 the month of January. On the spending side, though, things 0:05:57.000 --> 0:05:59.839 looked pretty terrible. So nominal spending. 0:06:00.080 --> 0:06:00.960 Don't sugarcoat it. 0:06:01.240 --> 0:06:03.120 No, I'm not going to sugarcoat it. You know that. 0:06:03.120 --> 0:06:05.039 I'll always you know, shoot straight with you here. So 0:06:05.640 --> 0:06:09.240 we estimate that personal income growth declined zero point one 0:06:09.279 --> 0:06:12.320 percent during the month. That's a major retreat from the 0:06:12.480 --> 0:06:16.240 zero point seven percent growth that we saw in December. 0:06:16.520 --> 0:06:19.200 And a big part of that is autos, right, vehicles. 0:06:19.560 --> 0:06:23.839 People purchased vehicles at a way slower pace during the 0:06:23.880 --> 0:06:27.000 month of January, an annualized pace of about fifteen point 0:06:27.080 --> 0:06:30.599 six million units, down from I think nearly sixteen point 0:06:30.640 --> 0:06:34.120 eight million units in December. As I mentioned, weather was 0:06:34.160 --> 0:06:37.400 so terrible you don't want to be out walking on 0:06:37.440 --> 0:06:40.440 an auto dealer's lot in the month of January, especially 0:06:40.440 --> 0:06:43.159 when there was a polar vortex. But beyond that, it 0:06:43.200 --> 0:06:46.400 does look like consumers rained in spending on some of 0:06:46.400 --> 0:06:50.839 the key discretionary goods and services categories, things like furniture, clothing, 0:06:51.560 --> 0:06:54.080 all of those items during the month, even online spending. 0:06:54.120 --> 0:06:56.880 It looks like they really reined it in in January. 0:06:57.279 --> 0:07:00.480 Now here's the thing. Consumers aren't exactly both. During their 0:07:00.640 --> 0:07:05.679 balance sheets, we saw that income growth is pretty high 0:07:05.680 --> 0:07:08.479 and steady. People are raining in their spending, but we 0:07:08.600 --> 0:07:10.840 still think that they're going to have a personal saving 0:07:10.920 --> 0:07:13.640 rate of just about four point three percent during the month. 0:07:13.640 --> 0:07:17.000 That's still exceptionally low. Personal savings is about six and 0:07:17.040 --> 0:07:20.720 a half percent pre COVID, So even as consumers reined 0:07:20.720 --> 0:07:23.880 it in in January, it's still just a lot of 0:07:23.880 --> 0:07:25.680 spending going on on a monthly basis. 0:07:25.840 --> 0:07:30.320 January's Personal Consumption Expenditures Price Index out this Friday, our 0:07:30.360 --> 0:07:34.680 thanks to Stuart paul, Us, economist with Bloomberg Economics. We 0:07:34.720 --> 0:07:37.480 move next to fourth quarter earnings from the artificial intelligence 0:07:37.560 --> 0:07:40.880 chip Giant and Video that is out this Wednesday after 0:07:40.920 --> 0:07:43.200 the close. Now for more on what to expect, we're 0:07:43.280 --> 0:07:48.200 joined by Mandeep Singh, Bloomberg Intelligence Senior tech industry analyst, 0:07:48.840 --> 0:07:53.120 man deep an almost insatiable demand for AI cloud computing, 0:07:53.320 --> 0:07:56.720 data center infrastructure. Are there any headwinds for in Video 0:07:56.840 --> 0:07:58.160 or is it go go go? 0:07:58.880 --> 0:08:01.720 I mean, I would say they're still in their hyper 0:08:01.720 --> 0:08:05.320 growth phase, so that you know, triple digit growth will 0:08:05.360 --> 0:08:09.240 decelerate to maybe you know, fifty percent plus growth this 0:08:09.360 --> 0:08:12.600 quarter is still very impressive and it's still all about 0:08:12.680 --> 0:08:16.119 data centers when it comes to this company. So look, 0:08:16.640 --> 0:08:19.800 there were a few things that happened during the quarter, 0:08:20.360 --> 0:08:25.040 notably the Blackwell shipments. I mean, Jensen said last quarter 0:08:25.120 --> 0:08:29.720 that Blackwell will be a multi billion contributor to this 0:08:29.920 --> 0:08:34.319 quarter's revenue. And then obviously the deep Seek development was 0:08:34.400 --> 0:08:39.400 quite interesting because Nvidia clearly believes that the scaling laws 0:08:39.400 --> 0:08:42.000 are intact when it comes to the scaling of these 0:08:42.040 --> 0:08:45.880 foundational models, and that is the biggest driver of why 0:08:46.160 --> 0:08:50.000 companies are building, you know, massive clusters when it comes 0:08:50.000 --> 0:08:55.480 to two hundred kgpus to one billion GPUs in a cluster. 0:08:55.640 --> 0:08:58.400 So that is supposed to be one of the biggest 0:08:58.480 --> 0:09:01.840 drivers of Nvidia's chip demand, and it would be interesting 0:09:01.880 --> 0:09:06.880 to see if those kind of drivers have changed because 0:09:06.920 --> 0:09:07.760 of Deep Seek. 0:09:08.400 --> 0:09:12.160 Now, Deep Seek, when that bombshell hit Wall Street, they 0:09:12.280 --> 0:09:15.040 say it was using in Vidia chips which they got 0:09:15.160 --> 0:09:19.120 kind of backdoor from Singapore. But let's talk about the 0:09:19.200 --> 0:09:22.920 losses to Nvidia when that happened. Almost six hundred billion 0:09:23.000 --> 0:09:24.120 dollars in market share. 0:09:24.720 --> 0:09:27.120 Yeah, I mean, look, they've recovered a lot of that 0:09:27.200 --> 0:09:30.760 market cap, so it's not as if the losses were permanent. 0:09:30.800 --> 0:09:32.960 I mean, the stock is pretty much back to where 0:09:33.440 --> 0:09:36.920 it was rating prior to Deep Seek. And I think 0:09:37.000 --> 0:09:39.800 in the end it comes down to training versus inferencing. 0:09:39.880 --> 0:09:43.360 These are the two things that everyone is sort of 0:09:43.679 --> 0:09:47.200 focused on when it comes to Invidia's opportunity because a 0:09:47.200 --> 0:09:50.880 lot of these hyperscalers are developing their own chips, and 0:09:51.000 --> 0:09:55.360 hyperscalers make up forty five percent of Nvidia's data center revenue. 0:09:55.640 --> 0:09:58.959 And that's Meta and Amazon, Microsoft. 0:10:00.160 --> 0:10:00.719 Alphabet. 0:10:00.840 --> 0:10:01.080 Yes. 0:10:01.600 --> 0:10:05.480 So, and when you think about Nvidia's data center revenue, 0:10:05.480 --> 0:10:07.960 that's a one hundred and twenty five billion dollar rund 0:10:08.040 --> 0:10:13.000 rate every hyperscaler this quarter guided to CAPEX going up 0:10:13.240 --> 0:10:16.320 and CAPEX going up almost forty to fifty percent for 0:10:16.400 --> 0:10:20.520 twenty twenty five. So if you extrapolate that guide to 0:10:20.600 --> 0:10:24.800 Invidia's numbers, you know, forty five percent revenue exposure, that means, 0:10:24.840 --> 0:10:27.319 you know, Nvidia could very well be doing two hundred 0:10:27.360 --> 0:10:30.240 billion dollars in data center revenue for twenty twenty five 0:10:30.679 --> 0:10:33.360 at you know, and then you layer in the project's 0:10:33.440 --> 0:10:38.400 target announcement, the EU announcement to you know, invest in chips. 0:10:38.640 --> 0:10:42.480 That's incremental revenue from sovereigns, which is a load double 0:10:42.520 --> 0:10:47.160 digit revenue contributor to Nvidia right now. So when you 0:10:47.200 --> 0:10:50.320 put all these things together, the drivers are there for 0:10:50.440 --> 0:10:52.920 Nvidia to do maybe two hundred billion dollars in data 0:10:52.960 --> 0:10:54.120 center revenue this year. 0:10:54.320 --> 0:10:56.920 And some of those hyperscalers are doing their own in 0:10:57.400 --> 0:11:00.240 house GPUs and are they is in Vidio five finding 0:11:00.280 --> 0:11:04.440 new clients new revenue sources besides them. 0:11:04.679 --> 0:11:08.920 Yeah, So that's an interesting point because hyperscalers do have 0:11:09.000 --> 0:11:12.520 their ambitions to use their own chips. I think Google 0:11:12.640 --> 0:11:15.520 is the furthest along in terms of using their own 0:11:15.640 --> 0:11:20.720 TPUs for training and inferencing. Other hyperscalers plan to do that. 0:11:21.120 --> 0:11:23.840 But whether it's going to impact in Video's revenue this 0:11:24.000 --> 0:11:26.959 year or is it more for you know, three four 0:11:27.040 --> 0:11:29.920 years out. I'm more in the camp that this is 0:11:29.960 --> 0:11:32.920 not going to have a big impact this year. But 0:11:33.040 --> 0:11:35.120 clearly that's a big threat. When you have, you know, 0:11:35.440 --> 0:11:37.920 a forty five to fifty percent exposure to four or 0:11:37.920 --> 0:11:41.560 five customers, there is always that concentration risk. 0:11:42.120 --> 0:11:45.560 Well, and that leads to what's next for in video 0:11:45.640 --> 0:11:48.160 this year? Because I know that Blackwell line they've got 0:11:48.200 --> 0:11:50.880 some new products coming out. What are you expecting to see. 0:11:51.000 --> 0:11:54.200 I mean, to me, the key KPI is gross margin 0:11:54.280 --> 0:11:57.760 because last quarter, even though they talked about Blackwell, they 0:11:57.760 --> 0:12:02.080 said gross margins would sort of get compressed a little 0:12:02.120 --> 0:12:04.360 bit in the near term because of the Blackwell ramp 0:12:04.360 --> 0:12:06.800 and they will go back to mid seventy percent once 0:12:07.080 --> 0:12:11.120 Blackwell is fully ramped up. That to me determines the 0:12:11.160 --> 0:12:15.000 supply demand imbalance. The demand commentary is there because there 0:12:15.040 --> 0:12:18.000 is still more demand, but supply seems to be catching 0:12:18.040 --> 0:12:21.720 up when it comes to you know, TSMC adding capacity 0:12:21.800 --> 0:12:26.199 for manufacturing more GPUs. So gross margins is how you 0:12:26.360 --> 0:12:28.720 determined what kind of imbalance we still have. 0:12:29.320 --> 0:12:32.719 Well Nvidia QBOUR earnings out after Wall Street's closing bell 0:12:32.840 --> 0:12:36.679 this coming Wednesday, Our thanks to Mandeep Sing, Bloomberg Intelligence 0:12:36.720 --> 0:12:40.400 senior tech industry analyst. Coming up on Bloomberg day Break weekend, 0:12:40.480 --> 0:12:43.200 we look ahead to a G twenty meeting without the 0:12:43.320 --> 0:12:57.880 United States. I'm Tom Busby, and this is Bloomberg. This 0:12:57.960 --> 0:13:00.520 is Bloomberg Day Break Weekend, our global load at the 0:13:00.520 --> 0:13:03.440 top stories for investors in the coming week. I'm Tom 0:13:03.480 --> 0:13:06.160 Busby in New York. Up later in our program, we'll 0:13:06.200 --> 0:13:09.520 look at the evolving relationship between Washington and Beijing. But 0:13:09.640 --> 0:13:13.680 first global finance ministers will descend on South Africa for 0:13:13.720 --> 0:13:16.960 a G twenty summit this week, following a G twenty 0:13:17.000 --> 0:13:20.199 Foreign ministers meeting just a few days ago. This time, though, 0:13:20.240 --> 0:13:24.040 it's without US Treasury Secretary Scott Besson attending. Can the 0:13:24.080 --> 0:13:27.560 talks be productive without such an important global player choosing 0:13:27.600 --> 0:13:30.200 to be absent? For more, Let's go to London and 0:13:30.240 --> 0:13:33.439 bring in Bloomberg day Break europe Banker Caroline hepgar. 0:13:33.559 --> 0:13:36.839 Tom This year's G twenty gatherings are significant for a 0:13:36.920 --> 0:13:39.800 number of reasons. For one, they're the first meetings to 0:13:39.840 --> 0:13:42.800 take place under the helm of South Africa. They're also 0:13:42.840 --> 0:13:45.960 the first multilateral forums of their kind to be held 0:13:46.000 --> 0:13:49.000 during the new Trump administration, a government that has so 0:13:49.160 --> 0:13:53.480 far made clear its intention to do things differently. In 0:13:53.559 --> 0:13:56.240 terms of the Finance Minister's meeting due to take place 0:13:56.280 --> 0:13:59.120 in the coming days, there couldn't be more on the agenda. 0:14:00.080 --> 0:14:05.040 Trump's paradigm shifting taris will surely likely feature, as will 0:14:05.080 --> 0:14:08.600 growing pressures to ramp up defense spending in the EU 0:14:08.720 --> 0:14:12.680 but perhaps elsewhere. But one leader who won't be participating 0:14:12.760 --> 0:14:17.520 in discussions is US Treasury Secretary Scott Bessent. His decision 0:14:17.600 --> 0:14:21.080 to skip the event comes as Secretary of State Marco 0:14:21.200 --> 0:14:26.480 Rubio also foregoes attending the G twenty Foreign Ministers meeting. Now. 0:14:26.560 --> 0:14:29.480 Rubio said that he was not taking part in those 0:14:29.520 --> 0:14:33.680 discussions because he did not want to quote, waste taxpayer 0:14:33.840 --> 0:14:39.520 money or coddle anti Americanism. Rubio's comments echo President Donald 0:14:39.600 --> 0:14:44.560 Trump's criticism of South Africa's land policy and a threat 0:14:44.680 --> 0:14:49.360 to cut off future funding to the country. In response, 0:14:49.400 --> 0:14:53.480 South Africa's Foreign Ministry reiterated that no land has been 0:14:53.560 --> 0:14:58.960 confiscated and that the expropriation legislation announced by South African 0:14:58.960 --> 0:15:03.240 Presidency Rampa Hoser last month is similar to eminent domain 0:15:03.400 --> 0:15:07.200 laws elsewhere in the world. It also stressed the South 0:15:07.200 --> 0:15:12.040 African government's commitment to addressing global inequality. Now it's unusual 0:15:12.080 --> 0:15:15.320 for a Secretary of State to skip a G twenty summit, 0:15:15.640 --> 0:15:19.520 and Rubio's absence carries perhaps some risks that the US 0:15:19.840 --> 0:15:22.360 is left out of deliberations by some of the world's 0:15:22.520 --> 0:15:26.000 wealthiest countries, and the same is true for Scott Bessent. 0:15:26.800 --> 0:15:30.160 So can a G twenty meeting be effective without the 0:15:30.280 --> 0:15:33.880 United States and what are the implications of this edition 0:15:34.200 --> 0:15:37.600 of the Global leaders gathering for South Africa and for 0:15:37.640 --> 0:15:40.120 the rest of the world. It's something that I've been 0:15:40.120 --> 0:15:44.600 discussing with Bloomberg's Chief Africa correspondent, Jennifer Sabasaja. 0:15:45.200 --> 0:15:48.240 It's important in the sense that this is the first 0:15:48.320 --> 0:15:53.240 convening of the G twenty members as part of South 0:15:53.240 --> 0:15:57.640 Africa's presidency hosting right, and especially if you consider that 0:15:57.680 --> 0:16:01.400 we've seen a changing administration in the US, we're seeing 0:16:02.040 --> 0:16:05.640 changing ties geopolitically with the number of the nations that 0:16:05.680 --> 0:16:10.800 actually make up the G twenty, it is important and 0:16:10.880 --> 0:16:13.960 no doubt it will also carry over into the Finance 0:16:14.000 --> 0:16:16.680 Minister's meeting next week. Now, as you were just mentioning, 0:16:17.320 --> 0:16:20.640 Marco Rubio has said Secretary of Saint Marco Rubio, of 0:16:20.640 --> 0:16:22.960 course from the US, has said he is not attending 0:16:23.600 --> 0:16:27.880 over what he says, our focuses on climate change and 0:16:27.920 --> 0:16:32.680 also DEI we also got word that Finance Treasury Secretary 0:16:32.680 --> 0:16:34.800 excuse me, in the US, Scott Bessett, will also not 0:16:34.960 --> 0:16:39.040 be attending next week, and so you have to wonder, 0:16:39.080 --> 0:16:41.920 really what does the US, how does the US see 0:16:41.920 --> 0:16:45.280 their role within the G twenty moving forward. There are 0:16:45.320 --> 0:16:48.080 still representatives from the US that are going to be here. 0:16:48.640 --> 0:16:51.800 But still South African leaders and officials are planning to 0:16:51.840 --> 0:16:55.920 continue on with this theme of solidarity, equality and sustainability 0:16:55.960 --> 0:16:58.600 and continue to or at least try to strengthen some 0:16:58.680 --> 0:17:02.280 of the relationships of the member nations that are attending. 0:17:02.680 --> 0:17:05.719 And there is a big question about whether discussions can 0:17:05.760 --> 0:17:09.320 be productive without the United States, whether the G twenty 0:17:09.359 --> 0:17:12.119 is still relevant. I mean, these are slightly perennial questions, 0:17:12.119 --> 0:17:15.359 aren't they about G twenty versus G seven or other 0:17:15.520 --> 0:17:20.520 sorts of gatherings, But it's particularly acute now with the US. 0:17:20.880 --> 0:17:24.920 You know, you do bring up a really interesting point, 0:17:25.000 --> 0:17:27.800 especially when you look at the first few weeks of 0:17:27.960 --> 0:17:32.920 the US administration and President Trump choosing to pull from 0:17:32.960 --> 0:17:37.199 a number of multilateral institutions. What we've heard from at 0:17:37.280 --> 0:17:40.760 least South African President Zerial Ramaposa is that he is 0:17:40.840 --> 0:17:43.280 at least trying to get a lot of these more 0:17:43.320 --> 0:17:46.800 developed countries to the table to try and reform some 0:17:46.920 --> 0:17:50.320 of these institutions. And so if we see at least 0:17:50.680 --> 0:17:54.000 a pulling back of the US on the multilateral front, 0:17:54.840 --> 0:17:58.080 what does that mean for a lot of these reforms 0:17:58.080 --> 0:17:59.440 that we are going to see. 0:18:00.040 --> 0:18:02.840 Still, President Ramaposa does believe that he can get a 0:18:02.880 --> 0:18:03.280 lot done. 0:18:03.320 --> 0:18:08.200 There's a number of other issues on his agenda, including 0:18:08.240 --> 0:18:12.320 many things that he has talked about before, including talking 0:18:12.359 --> 0:18:15.600 about debt relief or a number of the nations, a 0:18:15.680 --> 0:18:18.560 number of the Global South as he calls it, and 0:18:18.640 --> 0:18:21.439 also a lot of that being climate finance. Right, we 0:18:21.520 --> 0:18:25.560 talk a lot about how a number of emerging economies 0:18:25.760 --> 0:18:28.280 are the hardest hit when it comes to climate change, 0:18:28.280 --> 0:18:30.600 but of course it's a lot of the developed economies 0:18:30.600 --> 0:18:34.040 that were the actual contributors to that going forward, and 0:18:34.080 --> 0:18:36.680 so there can be some movement on some of these 0:18:37.080 --> 0:18:42.480 to top line priorities, but getting the US to buy 0:18:42.560 --> 0:18:45.360 into some of them is going to be the challenge 0:18:45.920 --> 0:18:49.840 for President Ramoposa, South Africa and the G twenty moving forward. 0:18:50.760 --> 0:18:54.840 Yeah, and how important is it for South Africa that 0:18:54.880 --> 0:18:57.560 these meetings actually go well? I mean they are surely 0:18:57.600 --> 0:18:59.520 banking on this, as you say, to sort of boost 0:19:00.119 --> 0:19:05.320 soft power, but also you know, real things including aid 0:19:05.480 --> 0:19:11.120 for example. Maybe how important is it that these talks 0:19:11.200 --> 0:19:14.000 go well? And we know that South Africa has got 0:19:14.200 --> 0:19:18.199 very high unemployment, there was a dissipation of the support 0:19:18.240 --> 0:19:21.520 for Rama Posa's party at the last election. He's in 0:19:21.560 --> 0:19:24.440 a kind of coalition government. How important is this forum 0:19:24.480 --> 0:19:27.720 then for a proposer and for the future of South Africa. 0:19:28.920 --> 0:19:33.720 Well, the timing of this is pretty unique, especially you 0:19:33.920 --> 0:19:37.440 just talked about how the ruling party or the previously 0:19:37.560 --> 0:19:41.640 ruling party, the ANC, is now in a coalition government 0:19:41.720 --> 0:19:45.560 and so really for the first time we're seeing South 0:19:45.600 --> 0:19:50.240 Africa take the helm as this multi party government on 0:19:50.600 --> 0:19:53.840 the world stage. One person described it to me as 0:19:53.880 --> 0:19:57.879 potentially this is showcasing that democracy is working, at least 0:19:58.280 --> 0:20:01.960 in South Africa. But you know, President Ramaposa is really 0:20:02.000 --> 0:20:06.080 taking this on to progress on a lot of the 0:20:06.119 --> 0:20:09.600 issues that he believes not just South Africa, but a 0:20:09.640 --> 0:20:11.520 lot of African nations the global self. 0:20:11.560 --> 0:20:12.800 As I was mentioning. 0:20:12.480 --> 0:20:16.440 Before, they can put forward a lot of the challenges 0:20:16.480 --> 0:20:19.760 that they've not necessarily been able to because they haven't 0:20:19.760 --> 0:20:22.080 been at the table before. Now they can do that, 0:20:22.160 --> 0:20:25.080 and as the first African nation to hold this G 0:20:25.240 --> 0:20:28.760 twenty presidency, potentially that's an opportunity. 0:20:29.200 --> 0:20:30.080 And it's not just that. 0:20:30.200 --> 0:20:31.760 I mean you take a look at a lot of 0:20:31.840 --> 0:20:35.880 the partnerships here. The EU is a major investor in 0:20:36.240 --> 0:20:41.600 South Africa. China is one of the biggest trade partners 0:20:41.600 --> 0:20:44.639 here with South Africa as well, and so there is 0:20:44.720 --> 0:20:48.199 incentive for a lot of the other member countries to 0:20:48.359 --> 0:20:52.159 also get on board with this. And so yeah, you know, 0:20:52.240 --> 0:20:56.320 I think a good outcome is beneficial for most of 0:20:56.359 --> 0:20:57.840 the members. But you just take a look at the 0:20:57.880 --> 0:21:00.560 geopolitical divisions that we're seeing in the world right now, 0:21:00.920 --> 0:21:02.480 and it's surely going to be a bumpy road. 0:21:03.480 --> 0:21:05.800 Yeah, And with the absence of Marca Rubio and Scott 0:21:05.800 --> 0:21:07.960 Best said, do you think I think that that signals 0:21:07.960 --> 0:21:11.280 that the Trump administration is actually serious about this row? 0:21:12.480 --> 0:21:16.240 You know that their accusations against the South African government 0:21:16.560 --> 0:21:20.080 in terms of the legislation in South Africa, do you 0:21:20.119 --> 0:21:22.159 think that they are going to make good then on 0:21:22.240 --> 0:21:24.240 the threats, for example, to hold AID. 0:21:26.080 --> 0:21:30.640 That's that's the concern here, really, Caroline, because. 0:21:30.600 --> 0:21:35.080 We have seen the back and forth really ramping up. Right. 0:21:35.320 --> 0:21:38.720 It started, as you were mentioning just a few weeks ago, 0:21:38.760 --> 0:21:43.760 when when Trump was criticizing that land Exproporation build that 0:21:43.920 --> 0:21:47.120 you were referencing there, that's a remopos that President Ramoposa 0:21:47.200 --> 0:21:47.840 signed earlier. 0:21:47.880 --> 0:21:48.320 This year. 0:21:49.280 --> 0:21:51.439 But then, of course we've seen in the US the 0:21:51.520 --> 0:21:56.359 retreat from from DEI h and many people would describe 0:21:56.920 --> 0:22:00.480 South Africa at least in its state right now, as 0:22:00.560 --> 0:22:04.160 you know, an example of DEI and so you have 0:22:04.240 --> 0:22:07.240 to wonder what else potentially could the. 0:22:07.320 --> 0:22:10.680 US administration target. It's not just that. 0:22:10.760 --> 0:22:14.359 There's also climate financing, which has been very important for 0:22:15.119 --> 0:22:16.560 South Africa to get on board. 0:22:16.600 --> 0:22:19.160 We know that we've seen the US administration rolling that. 0:22:19.240 --> 0:22:23.359 Back, and also South Africa taking Israel to the ICJ 0:22:24.160 --> 0:22:29.239 over what they see as war crimes, right which we 0:22:29.320 --> 0:22:32.800 know President Trump has a cordial relationship let's call it, 0:22:32.840 --> 0:22:36.280 with Benjamin Netan Yahoo, and so the concern is what 0:22:37.000 --> 0:22:39.800 does this relationship look like. But over the past few 0:22:39.800 --> 0:22:42.600 weeks I've been speaking to a number of South African 0:22:42.600 --> 0:22:46.000 officials about this, and some of them say, on the 0:22:46.040 --> 0:22:48.680 one hand, of course it's a setback if you take 0:22:48.680 --> 0:22:51.399 a look at something like USAID, which has provided a 0:22:51.480 --> 0:22:56.000 number of benefits health benefits for South Africa that could 0:22:56.000 --> 0:23:00.520 be detrimental to this country and to the Africa continent 0:23:00.600 --> 0:23:05.280 more broadly, but it also potentially creates an opportunity for 0:23:05.359 --> 0:23:08.280 other partners. We take a look at bricks, which is 0:23:08.359 --> 0:23:13.800 this block of Brazil, Russia, India, China and South Africa. 0:23:14.920 --> 0:23:18.240 Potentially we see them stepping in. We've seen that over 0:23:18.280 --> 0:23:22.040 the past few years, them trying to make inroads. And 0:23:22.119 --> 0:23:25.520 if we continue to see this retreat, that opens the 0:23:25.560 --> 0:23:28.600 door to some of these other countries to them potentially. 0:23:28.119 --> 0:23:28.640 Fill the gap. 0:23:28.880 --> 0:23:31.760 For what it's worth, before I wrap up, we have 0:23:31.920 --> 0:23:35.400 seen a country like China continue to reiterate its support 0:23:35.520 --> 0:23:40.000