1 00:00:02,560 --> 00:00:08,920 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Right, let's bring in 2 00:00:09,000 --> 00:00:13,960 Speaker 1: then our conversation and turn our attention to Anthony Gardner, 3 00:00:13,960 --> 00:00:16,479 Speaker 1: who joins US now, who served as US Ambassador to 4 00:00:16,560 --> 00:00:21,000 Speaker 1: the EU between twenty fourteen and twenty seventeen under President Obama. Ambassador, 5 00:00:21,000 --> 00:00:22,720 Speaker 1: good morning, and thank you so much for joining us. 6 00:00:22,760 --> 00:00:25,320 Speaker 1: You are currently a senior advisor at Brunswick Group. I 7 00:00:25,360 --> 00:00:28,760 Speaker 1: know that you've hopped straight from Bloomberg Television to Bloomberg Radio, 8 00:00:28,800 --> 00:00:31,000 Speaker 1: so I really appreciate it. I could not listen in 9 00:00:31,160 --> 00:00:33,120 Speaker 1: to TV, so perhaps I'll be asking you some of 10 00:00:33,159 --> 00:00:35,720 Speaker 1: the same sorts of questions, but I know that our 11 00:00:35,760 --> 00:00:40,239 Speaker 1: audio audience would really like to understand from you in 12 00:00:40,320 --> 00:00:43,720 Speaker 1: your role as you had it. How you see the 13 00:00:43,760 --> 00:00:46,400 Speaker 1: situation now with Donald Trump in the White House saying 14 00:00:46,440 --> 00:00:49,560 Speaker 1: that US harris will definitely be imposed on the EU? 15 00:00:49,880 --> 00:00:55,280 Speaker 1: Is that your expectation. We've seen a flip flop on Canada, Mexico, Columbia, 16 00:00:55,320 --> 00:00:59,360 Speaker 1: but taris imposed on China. Where does the EU stand 17 00:00:59,400 --> 00:00:59,680 Speaker 1: in this? 18 00:01:01,880 --> 00:01:05,240 Speaker 2: Well, it's great to be on the program. I suspect that, yes, 19 00:01:05,480 --> 00:01:09,560 Speaker 2: he will impose tariffs on the European Union because he 20 00:01:09,640 --> 00:01:14,920 Speaker 2: bears a special animus against the European Union. He's described 21 00:01:14,959 --> 00:01:20,319 Speaker 2: them as worse than China, but smaller. He's particularly unhappy 22 00:01:20,360 --> 00:01:23,200 Speaker 2: with the German trade surplus, and in a lot of 23 00:01:23,240 --> 00:01:25,440 Speaker 2: the countries that great trade surplus, and so we all 24 00:01:25,440 --> 00:01:28,880 Speaker 2: know he believes trade surpluses are evidence of cheating. So 25 00:01:29,000 --> 00:01:33,720 Speaker 2: I think he is going to impose tariffs on the EU, 26 00:01:33,880 --> 00:01:37,320 Speaker 2: and I think it's a very sad mistake because when 27 00:01:37,360 --> 00:01:39,559 Speaker 2: I was in office, and by the way, during many 28 00:01:39,640 --> 00:01:43,240 Speaker 2: Republic administrations, the focus was on reducing trade bearers and 29 00:01:43,319 --> 00:01:47,440 Speaker 2: not creating more of them. This time, the European Union 30 00:01:47,560 --> 00:01:50,600 Speaker 2: is more prepared than it was last time. It's got 31 00:01:50,680 --> 00:01:55,320 Speaker 2: lists of retaliation that it can put into place pretty quickly, 32 00:01:55,400 --> 00:01:57,560 Speaker 2: a trade tool kit as they call it, as much 33 00:01:57,600 --> 00:02:00,640 Speaker 2: stronger than it was in the first term. He will 34 00:02:00,640 --> 00:02:02,880 Speaker 2: want to negotiate. It will negotiate that it did in 35 00:02:02,920 --> 00:02:05,720 Speaker 2: the first term. But we'll try to promise and assuage 36 00:02:05,800 --> 00:02:10,560 Speaker 2: Trump by buying more American goods, including like last time, 37 00:02:10,600 --> 00:02:14,280 Speaker 2: soybeans and LNG, probably throwing a bit of defense and weaponry, 38 00:02:14,320 --> 00:02:18,560 Speaker 2: but that probably will not be enough. It will try 39 00:02:18,600 --> 00:02:20,880 Speaker 2: to say, did Donald Trump, look, we're doing more on trade, 40 00:02:20,960 --> 00:02:23,280 Speaker 2: which sorry, on defense, which is what you wanted us 41 00:02:23,320 --> 00:02:26,000 Speaker 2: to do. Look at the statistics. We can work more 42 00:02:26,040 --> 00:02:30,239 Speaker 2: together on a positive extend on China, on export controls, 43 00:02:30,320 --> 00:02:35,320 Speaker 2: on supply chain resilience, and writing the world trading rules 44 00:02:35,320 --> 00:02:38,080 Speaker 2: and standardization organizations. None of that, I think is going 45 00:02:38,160 --> 00:02:41,600 Speaker 2: to be enough for Donald Trump. So I suspect we 46 00:02:41,639 --> 00:02:44,040 Speaker 2: will see tariffs which are going to have a very 47 00:02:44,080 --> 00:02:50,160 Speaker 2: negative effect on many, not only exporters, but on manufacturers. 48 00:02:50,480 --> 00:02:55,639 Speaker 3: President Trump has characteristically been highly vociferous in his criticisms 49 00:02:56,560 --> 00:02:59,960 Speaker 3: of that try deficit with the EU from your US 50 00:03:00,080 --> 00:03:02,799 Speaker 3: right if as someone who was very closely involved in 51 00:03:02,880 --> 00:03:06,120 Speaker 3: transatlantic trade negotiations during your term, are any of his 52 00:03:06,240 --> 00:03:09,800 Speaker 3: complaints about the trade relationship between the two two blocks warranted? 53 00:03:12,200 --> 00:03:14,639 Speaker 2: Well, in some instances, the EU has tariffs hired in 54 00:03:14,639 --> 00:03:16,760 Speaker 2: the United States. But look what he doesn't say. It 55 00:03:16,840 --> 00:03:18,880 Speaker 2: was pretty obvious in the United States is tariffs and 56 00:03:18,919 --> 00:03:22,280 Speaker 2: someone seas is higher than the ones the EU places. Yes, 57 00:03:22,360 --> 00:03:26,600 Speaker 2: it is true that the EU's agricultural market is relatively closed. 58 00:03:27,440 --> 00:03:29,840 Speaker 2: But you know what he doesn't mention, which is also obvious. 59 00:03:29,880 --> 00:03:32,079 Speaker 2: There are many parts of our economy the United States, 60 00:03:32,120 --> 00:03:34,679 Speaker 2: which are pretty close too. I'm picking public procurements and 61 00:03:34,760 --> 00:03:38,680 Speaker 2: by American and buy America, maritime trade, coastal trade, which 62 00:03:38,760 --> 00:03:41,600 Speaker 2: is the Jones Act. There are many other areas which 63 00:03:41,680 --> 00:03:44,360 Speaker 2: this administration ever mentioned. It is false to say the 64 00:03:44,480 --> 00:03:47,600 Speaker 2: EU is a completely closed market. It's still relatively open 65 00:03:48,080 --> 00:03:50,560 Speaker 2: on public procurement. I would argue it's more open than 66 00:03:50,560 --> 00:03:52,400 Speaker 2: the United States. So, you know, we can go back 67 00:03:52,440 --> 00:03:55,320 Speaker 2: and forth on a ping pong you know, discussion of 68 00:03:55,320 --> 00:03:59,080 Speaker 2: who's more open and who's not. But what's fundamentally false 69 00:03:59,200 --> 00:04:01,520 Speaker 2: is to say they want to country runs a trade 70 00:04:01,600 --> 00:04:05,000 Speaker 2: surplus with another country, that means it is cheating. It's 71 00:04:05,120 --> 00:04:07,440 Speaker 2: just not the case. There are many other reasons why 72 00:04:07,480 --> 00:04:11,360 Speaker 2: the United States runs a massive trade deficit with almost 73 00:04:11,480 --> 00:04:14,400 Speaker 2: the entire world, and it has nothing to do with 74 00:04:14,520 --> 00:04:18,040 Speaker 2: who is cheating and who isn't. So my view is 75 00:04:18,160 --> 00:04:23,040 Speaker 2: we should be putting more efforts into addressing specific you know, 76 00:04:23,279 --> 00:04:29,160 Speaker 2: arguments about you know, certain tariffs, making trade liberalized, and 77 00:04:29,240 --> 00:04:31,480 Speaker 2: not just on tariffs. By the way, there are a 78 00:04:31,480 --> 00:04:33,920 Speaker 2: lot of things that we can be working on to 79 00:04:34,120 --> 00:04:37,880 Speaker 2: facilitate trade transatlantically with our best partner. And by the way, 80 00:04:38,040 --> 00:04:40,400 Speaker 2: one of the things that trade does that Trump doesn't like, 81 00:04:40,480 --> 00:04:44,920 Speaker 2: and here I would agree is in some instances countries 82 00:04:45,080 --> 00:04:49,720 Speaker 2: are not respecting high degree of protection, whether it's on 83 00:04:49,880 --> 00:04:53,800 Speaker 2: labor or well under the deministration, was the environment and 84 00:04:53,920 --> 00:04:57,039 Speaker 2: IP those are the kind of restrictions that we should 85 00:04:57,080 --> 00:04:59,080 Speaker 2: be tearing down to ensure that the level you know 86 00:04:59,160 --> 00:05:00,360 Speaker 2: that there's a level play field. 87 00:05:01,240 --> 00:05:06,440 Speaker 1: HM. But reasoned arguments have not particularly worked. What has 88 00:05:06,520 --> 00:05:09,600 Speaker 1: worked is caving to a very transactional relationship. If you 89 00:05:09,640 --> 00:05:12,080 Speaker 1: look at the you know, the phone call between Shinebaum 90 00:05:12,160 --> 00:05:15,840 Speaker 1: and Trump or between Canada and the US. That is 91 00:05:15,920 --> 00:05:18,800 Speaker 1: what has actually worked. What would be the most effective 92 00:05:18,960 --> 00:05:22,080 Speaker 1: pain point for Europe to target Trump with if it 93 00:05:22,200 --> 00:05:24,080 Speaker 1: wants their message to be heard. 94 00:05:26,440 --> 00:05:30,320 Speaker 2: Well, services trade. You know, the US runs a surplus 95 00:05:30,600 --> 00:05:33,920 Speaker 2: with Europe on services. It runs a deficit on goods trade, 96 00:05:34,040 --> 00:05:37,480 Speaker 2: but services is the opposite. So no doubt the EU 97 00:05:37,760 --> 00:05:41,200 Speaker 2: is looking at services trade. If it really really wanted 98 00:05:41,240 --> 00:05:45,000 Speaker 2: to get tough, they could do something on procurement because 99 00:05:45,040 --> 00:05:48,400 Speaker 2: this is a massive market in Europe and is relatively 100 00:05:48,480 --> 00:05:51,200 Speaker 2: more open. And I think the the United States could say, look, 101 00:05:51,240 --> 00:05:54,080 Speaker 2: if Americans, the US companies want to participate in the 102 00:05:54,160 --> 00:05:57,880 Speaker 2: massive procurement market EU, you have to drop tariff that 103 00:05:58,400 --> 00:06:01,400 Speaker 2: gets pretty that gets pretty tough and aggressive. I think 104 00:06:01,440 --> 00:06:03,120 Speaker 2: they want to avoid that, but it's there. 105 00:06:05,000 --> 00:06:07,640 Speaker 3: And let's assume for a moment then that the tariffs 106 00:06:07,720 --> 00:06:11,480 Speaker 3: do get imposed in some form or other on a 107 00:06:11,600 --> 00:06:14,000 Speaker 3: you goods A lot of them are you know, the 108 00:06:14,120 --> 00:06:17,200 Speaker 3: goods the EU exports the US are extremely popular. I'm 109 00:06:17,240 --> 00:06:21,279 Speaker 3: thinking here particularly say cars, What impact do you expect 110 00:06:21,320 --> 00:06:24,599 Speaker 3: that they would actually have? Will consumers US consumers stop 111 00:06:24,720 --> 00:06:25,960 Speaker 3: buying your pin cars? 112 00:06:28,520 --> 00:06:31,440 Speaker 2: Well, you know, the picture there is extremely complex, as 113 00:06:31,520 --> 00:06:33,400 Speaker 2: you know and your listeners know, because a lot of 114 00:06:33,440 --> 00:06:37,280 Speaker 2: europe manufacturers actually manufactured cars in the United States. So 115 00:06:37,320 --> 00:06:40,839 Speaker 2: it depends on the manufacturing question. Some are more exposed 116 00:06:40,920 --> 00:06:45,039 Speaker 2: partly there, importing both cars and car parts from Mexico 117 00:06:45,120 --> 00:06:48,760 Speaker 2: and Canada and so forth, so they may get impacted more. 118 00:06:49,520 --> 00:06:52,599 Speaker 2: Some European manufacturers do in DBA export cars from Europe 119 00:06:52,640 --> 00:06:55,080 Speaker 2: the United States, but more and more many of them 120 00:06:55,120 --> 00:06:58,400 Speaker 2: have been making significant number of cars in the United States. 121 00:06:58,480 --> 00:07:01,560 Speaker 2: So yes, there will be a shift to probably more 122 00:07:01,640 --> 00:07:04,720 Speaker 2: production in the United States if you manufacturers have made 123 00:07:04,760 --> 00:07:08,800 Speaker 2: those announcements recently. But that doesn't mean that you know, 124 00:07:08,960 --> 00:07:11,640 Speaker 2: tariffs could be These are great things. More jobs in 125 00:07:11,680 --> 00:07:13,680 Speaker 2: that state because over the longer term, it makes us 126 00:07:13,800 --> 00:07:17,600 Speaker 2: less competitive and it will make prices rise. You know, 127 00:07:17,760 --> 00:07:22,760 Speaker 2: taxes that sorry tariffs are a regressive tax, a tax 128 00:07:22,920 --> 00:07:26,200 Speaker 2: that's the least well off pay more in general. So 129 00:07:26,840 --> 00:07:29,240 Speaker 2: it'll be interesting to see when people actually feel this 130 00:07:29,360 --> 00:07:31,520 Speaker 2: in their pocket book. It may not be immediate, but 131 00:07:31,680 --> 00:07:32,400 Speaker 2: it will happen. 132 00:07:34,560 --> 00:07:36,600 Speaker 1: In terms of the UK, do you think that Britain 133 00:07:36,760 --> 00:07:39,880 Speaker 1: is really going to be excluded or is it a 134 00:07:39,960 --> 00:07:42,480 Speaker 1: matter of time? Is it something that comes in perhaps 135 00:07:42,600 --> 00:07:45,520 Speaker 1: further down the line when the US looks at this. 136 00:07:45,640 --> 00:07:49,000 Speaker 1: I mean that the government at the moment is trying 137 00:07:49,080 --> 00:07:51,440 Speaker 1: to focus on the advantages of being both close to 138 00:07:51,520 --> 00:07:54,440 Speaker 1: the EU and the US. Is obviously an argument that 139 00:07:54,640 --> 00:07:59,280 Speaker 1: the UK could end up isolated by these massive kind 140 00:07:59,320 --> 00:08:00,880 Speaker 1: of partners trading blocks. 141 00:08:00,960 --> 00:08:05,000 Speaker 2: What's your view on the UK now, Well, yeah, I 142 00:08:05,080 --> 00:08:06,800 Speaker 2: don't agree with that argument. You know, there was a 143 00:08:06,840 --> 00:08:09,240 Speaker 2: lot of comfort that the UK had for being inside 144 00:08:09,280 --> 00:08:11,520 Speaker 2: a big tent. And it's not only because the EU 145 00:08:11,640 --> 00:08:14,880 Speaker 2: is an effective trade negotiator. It can get much more 146 00:08:15,720 --> 00:08:18,360 Speaker 2: leverage in the trade negotiations. Look, we saw it recently 147 00:08:18,440 --> 00:08:21,880 Speaker 2: with Amercrosore. We started recently with the EU's updated agreement 148 00:08:21,880 --> 00:08:24,880 Speaker 2: with Mexico, the ease negotiating a lot of other agreements 149 00:08:24,880 --> 00:08:27,080 Speaker 2: across the world. Yes, the UK is doing it as well, 150 00:08:27,160 --> 00:08:30,600 Speaker 2: but the EU drives a much much better bargain. Being 151 00:08:30,680 --> 00:08:33,400 Speaker 2: inside that tent, it gave the UK a certain amount, 152 00:08:34,200 --> 00:08:36,679 Speaker 2: a certain number of significant benefits. So the UK is 153 00:08:36,720 --> 00:08:39,440 Speaker 2: now out. So yes, it's trying to do the splits, 154 00:08:39,559 --> 00:08:42,800 Speaker 2: striving a little bit of each. I suspect the US 155 00:08:42,880 --> 00:08:45,280 Speaker 2: whether Trump will say to the UK, make a choice 156 00:08:45,840 --> 00:08:47,959 Speaker 2: either with US or against US. And by the way, 157 00:08:48,559 --> 00:08:52,960 Speaker 2: that means not aligning with any of the E regulations, 158 00:08:53,000 --> 00:08:56,400 Speaker 2: but aligning with US regulations on a number of issues, 159 00:08:56,440 --> 00:08:59,920 Speaker 2: including on food, on agrifood. That's going to be a 160 00:09:00,160 --> 00:09:04,280 Speaker 2: really difficult moment for the UK because then it will 161 00:09:04,600 --> 00:09:08,079 Speaker 2: bear a significant price in terms of goods experts to 162 00:09:08,160 --> 00:09:11,319 Speaker 2: its biggest market, which is the EU market. So the 163 00:09:11,440 --> 00:09:13,920 Speaker 2: answer to your question is, this is a really tough 164 00:09:14,360 --> 00:09:17,640 Speaker 2: line to walk, and it's not without a price. 165 00:09:19,559 --> 00:09:22,600 Speaker 3: And on that then on on the UK again, let's 166 00:09:22,640 --> 00:09:26,000 Speaker 3: let's let's assume that that the premise doesn't manage to 167 00:09:26,040 --> 00:09:28,280 Speaker 3: walk that that very tough line, and that some form 168 00:09:28,360 --> 00:09:32,800 Speaker 3: of tariffs are slapped on UK goods. What are the 169 00:09:33,000 --> 00:09:35,439 Speaker 3: potential sort of pinch points for the UK line to 170 00:09:35,480 --> 00:09:38,600 Speaker 3: be Where where might the Trump administration target and similarly, 171 00:09:38,720 --> 00:09:41,560 Speaker 3: what sort of retaliatory measures might we anticipate. 172 00:09:44,000 --> 00:09:46,200 Speaker 2: Gosh, I don't want to speculate on that. I mean, 173 00:09:46,240 --> 00:09:50,160 Speaker 2: we saw already last time, you know, tariffs. I think 174 00:09:50,160 --> 00:09:52,079 Speaker 2: it was on some drinks trade and so on. But 175 00:09:52,120 --> 00:09:54,240 Speaker 2: I don't want to speculut which things are going to 176 00:09:54,240 --> 00:09:57,120 Speaker 2: be selected by the Trump nor what kind of retaliation 177 00:09:57,280 --> 00:10:01,800 Speaker 2: there will be, So I will I will respectfully pass 178 00:10:01,960 --> 00:10:05,640 Speaker 2: on that question. I hope we can avoid it because 179 00:10:06,000 --> 00:10:08,440 Speaker 2: it is, as I mentioned, I think it's a destructive 180 00:10:08,559 --> 00:10:10,559 Speaker 2: to a causeitive trading relationship. 181 00:10:11,240 --> 00:10:13,599 Speaker 1: Ambassador, just briefly, and lastly, do you think that the 182 00:10:13,679 --> 00:10:16,520 Speaker 1: role of US ambassadors is changing? Obviously, you know it 183 00:10:16,679 --> 00:10:19,400 Speaker 1: was a job that you held and clearly enjoyed for 184 00:10:19,720 --> 00:10:21,280 Speaker 1: a long time. Do you think that the role of 185 00:10:21,400 --> 00:10:24,880 Speaker 1: US ambassadors will change onto the second Trump administration? 186 00:10:27,640 --> 00:10:31,400 Speaker 2: Oh, that's a very sad question. Look, the role of 187 00:10:31,440 --> 00:10:35,280 Speaker 2: ambassadors has been evolving, not just under Trump, by the way, 188 00:10:35,360 --> 00:10:37,960 Speaker 2: It's been kind of a bipartisan issue for a long time. 189 00:10:38,200 --> 00:10:43,439 Speaker 2: We are sending, unfortunately too often abroad envoys who know 190 00:10:43,800 --> 00:10:47,760 Speaker 2: very very little and are there just because they gave money, 191 00:10:47,880 --> 00:10:51,679 Speaker 2: contributed to campaigns or to the inauguration so forth. This 192 00:10:51,840 --> 00:10:54,839 Speaker 2: is a very very negative trend. You know, in some 193 00:10:55,040 --> 00:10:58,120 Speaker 2: cases it doesn't matter because the relationship with a particular 194 00:10:58,200 --> 00:11:00,439 Speaker 2: country is so strong that you can you with it 195 00:11:01,040 --> 00:11:03,839 Speaker 2: with professionals from the home base s iety Washington. But 196 00:11:03,920 --> 00:11:06,880 Speaker 2: in some cases where things get heated, and obviously we're 197 00:11:06,920 --> 00:11:09,920 Speaker 2: about to hit that kind of a situation very soon 198 00:11:10,080 --> 00:11:13,080 Speaker 2: with Europe and potentially with the UK, you do need 199 00:11:13,360 --> 00:11:16,839 Speaker 2: envoys who actually know what they're talking about, and who 200 00:11:17,000 --> 00:11:18,959 Speaker 2: can have be the eyes and ears and be the 201 00:11:19,080 --> 00:11:23,080 Speaker 2: intelligent set of eyes and ears beyond what Washington can 202 00:11:23,160 --> 00:11:24,720 Speaker 2: already gather