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Speaker 1: Bloomberg Audio Studios, podcasts, radio news, and.

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Speaker 2: I think Barco did a great job at Munich. I'm

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Speaker 2: Sephanie Flanders, head of Government and Economics at Bloomberg. And

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Speaker 2: this is Trump Economics, the podcast that looks at the

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Speaker 2: economic world of Donald Trump, how he's already shaped the

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Speaker 2: global economy and what on earth is going to happen

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Speaker 2: next and this week? As we heard at the top

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Speaker 2: of the show, President Donald Trump thinks Secretary of State

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Speaker 2: Marco Rubio did a great job at the Munich Security Conference.

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Speaker 2: But how did European leaders and the world more broadly

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Speaker 2: interpret his message? And where did the Munich Summit leave

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Speaker 2: us in relation to Europe and its future relations with China. Well,

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Speaker 2: I know it happened a few days ago, but I

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Speaker 2: thought for once we could linger a little on that conference,

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Speaker 2: because it is a good opportunity to take of where

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Speaker 2: we are and also to show off the fact that

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Speaker 2: our editor in chief had the only sit down interview

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Speaker 2: with Marco Rubio, and we also had our head of geoeconomics,

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Speaker 2: Jenny Welsh, in attendance, launching lots of exciting research. So

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Speaker 2: I am joined by John Mickleswaite, editor in chief of

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Speaker 2: Bloomberg News and Jenny Welsh, chief geoeconomics analyst for Bloomberg Economics.

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Speaker 2: John as I mentioned, you had the only sit down

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Speaker 2: interview with him. What were your kind of personal impressions.

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Speaker 2: Had you met him before, what did you think of him?

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Speaker 3: I had met him a long time ago when he

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Speaker 3: was more in the kind of I suppose neo conservative

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Speaker 3: mold than the I love JD Vance mold. I thought

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Speaker 3: it was interesting. I think you said style and substance.

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Speaker 3: I think if you look at the substance of what

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Speaker 3: he said, he was quite careful not to digress too

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Speaker 3: much from the kind of Trump agenda, but in terms

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Speaker 3: of style, it was said way more nicely and also

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Speaker 3: with a lot of kind of common cultural heritage. You know,

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Speaker 3: he really believed these things about the rolling Stones and

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Speaker 3: beer and Christopher Columbus. That's very much part of the

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Speaker 3: kind of Rubio worldview is that we, you know, there's

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Speaker 3: this great common civilization and we're much stronger together in

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Speaker 3: that way. And that's that's I think the main thing

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Speaker 3: that came across, and I think the other bit is

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Speaker 3: a degree of self confidence. I mean, remember when he

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Speaker 3: went into the Trumpet administration, there was a lot of

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Speaker 3: talk about, you know, little Marco's gone to join. Actually,

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Speaker 3: as the years have gone by, it he has become

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Speaker 3: a much stronger, more significant figure, and you see his

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Speaker 3: fingerprints all over things to do with Venezuela most obviously

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Speaker 3: and the Americas, but just quite cleverly, you know, deciding

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Speaker 3: which bits he's going to have an input into and

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Speaker 3: which one. You know, some of the Middle East stuff

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Speaker 3: he's he's handed over to wit Coough and things. But

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Speaker 3: he's more popular with the State Department people than you

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Speaker 3: might have expected a few years ago. He's he's on

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Speaker 3: and up, and but people are relentlessly thinking about in

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Speaker 3: the presidential side, where you could and out of the

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Speaker 3: Trump cabinet. Him and jd. Vance are the two obvious

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Speaker 3: people who could head in a presidential direction.

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Speaker 2: Jenny. We've had Chris Kennedy on the show a few

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Speaker 2: times in the past, and recently he was talking about Venezuela.

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Speaker 2: He works for you now as a geoeconomics analyst, but before,

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Speaker 2: up until last summer, he was working for Rubio in

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Speaker 2: the State Department's policy planning unit. Very much to John's point.

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Speaker 2: He wrote an essay for Bloomberg highlighting that he was

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Speaker 2: one of the few figures in the administration who'd found

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Speaker 2: a line somehow between the America Firsts and the more

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Speaker 2: neo conservative wings of the president's coalition. Do you think

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Speaker 2: that's going to come under more strain? Did you see

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Speaker 2: any of the strains in evidence in Munich?

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Speaker 1: Yeah, I would agree with Chris's take there. And by

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Speaker 1: the way, he also has a really great profile of

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Speaker 1: Rubio available on the terminal for terminal clients as well,

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Speaker 1: and this is something he siloated too. Rubio has played

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Speaker 1: his cards exceptionally well over the last year or so.

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Speaker 1: He's been given far more responsibilities. He's not just Secretary

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Speaker 1: of State, he's also a national security advisor. He's leveraged

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Speaker 1: that to his advantage and is especially played a really

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Speaker 1: strong hand in US policy towards Venezuela, which Trump regards

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Speaker 1: as incredibly successful, especially after the Operation alis Maduro. That

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Speaker 1: being said, and this is often a law in Washington,

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Speaker 1: the more successful you are, the more powerful you are,

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Speaker 1: the more risky your position can be, and especially as

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Speaker 1: you start to gain prominence. Right, one of Rubio's I

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Speaker 1: think tactics over the last year has been to make

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Speaker 1: sure that he doesn't steal the spotlight that he has

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Speaker 1: been very careful to follow and implement policy and pay

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Speaker 1: respect to the President as kind of the strategists in chief.

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Speaker 1: And one of the risks that I think he faces

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Speaker 1: is the more his star has risen, the more attention

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Speaker 1: there will be to him personally, and that can be

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Speaker 1: a very tricky thing to navigate in Washington, but especially

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Speaker 1: in the Trump administration.

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Speaker 2: So, Jenny, did you find a sort of focused on

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Speaker 2: the tone of a speech and much less on a

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Speaker 2: pretty uncompromising and still quite conditional approach to the transatlantic

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Speaker 2: relationship that was actually in the small print of what

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Speaker 2: he said.

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Speaker 1: What was interesting to me is that there was widespread recognition.

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Speaker 1: You heard this from every European speaker who took the

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Speaker 1: main stage. You heard it in the sidimens, You heard

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Speaker 1: it in the lounges and in the hallways too, of

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Speaker 1: the idea that the world is changing, Europe needs to

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Speaker 1: step up, not just because of American pressure to do so,

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Speaker 1: but also because of the friction with the United States

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Speaker 1: and concerns about reliability there. What still seemed to be

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Speaker 1: very much a nascent conversation is how does that actually happen?

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Speaker 1: There didn't seem to be very many clear pass forward.

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Speaker 1: There was still a lot of discussion about internal divisions,

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Speaker 1: and then, obviously, especially for you members, there's addition bureaucratic

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Speaker 1: hurdles to overcome that get in the way of everything

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Speaker 1: from figuring out how do we develop a more independent,

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Speaker 1: self reliant defense industrial base to how do we address

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Speaker 1: critical mineral reliance on China issues when we have to

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Speaker 1: work more together as a union in the United States

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Speaker 1: is kind of a unitary actor that can move much faster,

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Speaker 1: So that to me was kind of this interesting contradiction

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Speaker 1: of a real strong shared awareness of the issue but

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Speaker 1: still not a clear sense of the way to address it.

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Speaker 2: That does tend to be the rule with yourop. They're

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Speaker 2: really really good at understanding the problem, but analyzing the

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Speaker 2: problem slightly less good at solving it.

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Speaker 4: Job.

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Speaker 2: We're going to play a bit of your interview, but

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Speaker 2: I guess we should ask you all the headlines you wanted.

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Speaker 3: I think, actually the honest truth is, I went in

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Speaker 3: there thinking he'd made quite an impressive speech, did I think,

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Speaker 3: pull on lots of issues that matter a lot to

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Speaker 3: Rebio and which have always mattered to him, And yet

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Speaker 3: he managed to do it in a way that wouldn't

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Speaker 3: annoy Donaldrump but also please thee Europeans. I tried to

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Speaker 3: push him more into you know what does this mean

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Speaker 3: in practice? You know, what do you actually expect the

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Speaker 3: Europeans to do?

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Speaker 2: Let's hear a bit of it.

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Speaker 3: Mary Ruper, Sexuary of State, thank you for talking to Bloomberg.

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Speaker 3: You've just made this rather remarkable speech where you talked

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Speaker 3: about the destiny of Europe and America always being intertwined.

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Speaker 3: You talked about an alliance which has stretched all the

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Speaker 3: way culturally from Michelangelo to the Rolling Stones, the first

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Speaker 3: I suspect for a sexual estate, but a culture that

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Speaker 3: has bled and died together. But the very common theme

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Speaker 3: of your speech was the need to share the burden,

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Speaker 3: the need for Europe and America to do to do

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Speaker 3: things together, which was slightly different from the Vice President

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Speaker 3: last year. Were you kind of offering a carrot where

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Speaker 3: perhaps he was offering a state.

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Speaker 4: I think it's the same message.

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Speaker 5: I think what the Vice President said last year very

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Speaker 5: clearly was that Europe and made a series of decisions

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Speaker 5: internally that were threatening to the alliance and ultimately to

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Speaker 5: them themselves. Not because we hate Europe or we don't

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Speaker 5: like Europeans, But because what is it that we fight for?

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Speaker 4: What is it that binds us together?

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Speaker 5: And ultimately it's the fact that we are both heirs

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Speaker 5: to the same civilization, and it's a great civilization and

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Speaker 5: it's one we should be proud of. It's one that's

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Speaker 5: contributed extraordinarily to the world, and it's one frankly upon

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Speaker 5: which America is built. From our language, to our system

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Speaker 5: of government, to our laws, to the food we eat,

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Speaker 5: to the name of our cities and towns, all of

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Speaker 5: it deeply linked to this Western civilization and culture that

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Speaker 5: we should be proud of, and it's worth defending. And

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Speaker 5: ultimately that's the point. It is because we understand that

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Speaker 5: ultimately our own fate will be intertwined with what happens

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Speaker 5: with Europe. We want Europe to survive, We want Europe

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Speaker 5: to prosper because we're interconnected in so many different ways,

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Speaker 5: and because our alliance is so critical. But it has

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Speaker 5: to be an alliance of allies that are capable and

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Speaker 5: willing to fight for who they are and what's important.

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Speaker 3: You see a parallel. You seem to see a parallel

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Speaker 3: between the Cold War, which I think I would argue

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Speaker 3: that the America beat the Soviet Union because it had

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Speaker 3: a common idea and it had allies on its side.

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Speaker 3: You're now in a struggle with China. People say you've

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Speaker 3: often been a hawk on that subject. You're want a

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Speaker 3: struggle with China. Do you think you absolutely need Europe

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Speaker 3: to be able to Yeah.

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Speaker 4: I would say two things.

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Speaker 5: The first the mentions of the Cold War to remind

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Speaker 5: people of everything we've achieved together in the.

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Speaker 4: Past and times when there was doubt.

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Speaker 5: But it's also a reminder that at the end of

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Speaker 5: that era, when we won the Cold War, there was

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Speaker 5: this euphoria that led us to make some terrible decisions

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Speaker 5: that have now left as vulnerable and de industrialized the West.

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Speaker 5: It allowed it left us increasingly dependent on others, including China,

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Speaker 5: for our critical supplies, and that needs to be reversed

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Speaker 5: in order to safeguard us. And so I do think, yes,

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Speaker 5: it would be ideal to have a Western supply chain

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Speaker 5: that is free from extortion from anyone. So I think

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Speaker 5: we do have a vested interest in that regard. Today

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Speaker 5: is different than yesterday, but it has parallels, not in

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Speaker 5: that China is the new Soviet Union, but that in

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Speaker 5: our future collectively will be stronger if we work on

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Speaker 5: these things together.

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Speaker 3: There is sort of allies Mark Colony has just been

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Speaker 3: to Beijing. Stahmars just beat to Beijing. Mertz is about

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Speaker 3: to go there. Do you worry that they're beginning to

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Speaker 3: drift off too much in that direction?

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Speaker 5: No, I think nation states need to interact with one another. Remember,

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Speaker 5: I serve under a president that's willing to meet with anybody.

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Speaker 5: I mean, to be frank, I'm pretty confident in saying

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Speaker 5: that if the Ayatola said tomorrow he wanted to meet

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Speaker 5: with President Trump, the President would meet him, not because

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Speaker 5: he agrees with the Ayatola, but because he thinks that's

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Speaker 5: the way you solve problems in the world, and he

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Speaker 5: doesn't view meeting someone as a concession. Likewise, the President

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Speaker 5: intends to travel to Beijing and has already met once

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Speaker 5: with President g and in this very forum yesterday I

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Speaker 5: met with my counterpart, the Foreign Minister of China. So

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Speaker 5: we expect nation states to interact with one another. In

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Speaker 5: the end, we expect nation states to act in their

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Speaker 5: national interest. I don't think that is excluded that you

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Speaker 5: know that in no way runs counter to our desire

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Speaker 5: to work together on things that we share in common

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Speaker 5: or threats with face in common. But I don't think

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Speaker 5: visiting Beijing or meeting with the Chinese is on the country.

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Speaker 5: I think it would be irresponsible for great powers not

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Speaker 5: to have relations ships and talk tough things and to

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Speaker 5: the extent possible and avoid unnecessary conflict. But there will

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Speaker 5: be areas we'll never agree on, and those are the

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Speaker 5: areas that I hope we can work together on.

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Speaker 3: So you think the rupture that many people have spoken

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Speaker 3: about is illusory that hasn't happened yet, Well, there's.

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Speaker 5: No I mean, even as I speak to you now,

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Speaker 5: there are US troops deployed here on this continent, on

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Speaker 5: behalf of NATO. There are still all kinds of cooperation

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Speaker 5: that go on at every level, from intelligence to commercial

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Speaker 5: and economic.

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Speaker 4: The links remain.

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Speaker 5: I think there is a readjustment that's happening because I

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Speaker 5: think we have to understand that we want to reinvigorate

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Speaker 5: this This alliance has to be about different things than

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Speaker 5: it's been in the past, because the challenges of the

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Speaker 5: twenty first century are different than the challenges of the

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Speaker 5: twentieth thanks.

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Speaker 3: But that's being most obviously tested at the moment as Ukraine,

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Speaker 3: you see all these numbers from the front where the

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Speaker 3: Ukrainians do seem to be doing better in terms of

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Speaker 3: what's happening in the Russians. Do you think Ukraine or

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Speaker 3: do you think Russia is still winning that war or

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Speaker 3: where do you place it militarily?

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Speaker 5: I think that's a difficult order to say anyone is winning.

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Speaker 5: The Russians are losing seven to eight thousand soldiers.

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Speaker 4: A week, a week, not not wounded dead.

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Speaker 5: Ukraine has suffered extraordinary damage, including you know, overnight and

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Speaker 5: again to its energy infrastructure, and it will take billions

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Speaker 5: of dollars in years and years to rebuild that country.

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Speaker 4: So I don't think anyone can claim to be winning it.

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Speaker 5: I think that both sides are suffering tremendous damage, and

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Speaker 5: we'd like to see the war come to an end.

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Speaker 5: It's a senseless war, and our view, the president believes

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Speaker 5: that very deeply. He believes the war would have never

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Speaker 5: happened that he'd been president at the time.

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Speaker 4: So we're doing two things.

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Speaker 5: So obviously we continued, Look, we don't provide arms to Russia,

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Speaker 5: we provide arms to Ukraine.

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Speaker 4: We don't sanction Ukraine. We sanctioned Russia.

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Speaker 5: But at the same time, we find ourselves in a

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Speaker 5: unique position of serving as probably the only nation on

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Speaker 5: Earth that can bring the two sides to discuss the

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Speaker 5: potential for ending this war on negotiated terms.

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Speaker 4: And it's an obligation we haven't.

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Speaker 5: We won't walk away from because we think it's a

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Speaker 5: very unique one to have. It may not come to fruition, unfortunately.

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Speaker 5: I hope it does, and I think there are days

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Speaker 5: when I feel more optimistic about it than others. But

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Speaker 5: we're going to keep trying because that is in the end,

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Speaker 5: this war will not be solved militarily. It will be

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Speaker 5: in the end, it will come to a negotiated settlement.

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Speaker 5: We'd like to see that happen as soon as possible.

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Speaker 3: Marco Rubio, thank you very much for talking to Bloomberg.

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Speaker 4: Thank you, and.

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Speaker 2: So John. We've obviously we talked quite a lot about

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Speaker 2: Marco Ruby, but I wanted to also use this a

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Speaker 2: chance to kind of take stock of how Europe was

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Speaker 2: responding to this new world that Trump has been helping

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Speaker 2: to shape. And one of the issues that was discussed

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Speaker 2: a lot is defense and even talk of the sharing

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Speaker 2: of the nuclear umbrella between Germany and France. That seemed

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Speaker 2: like a new stage. It wasn't just they're going to

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Speaker 2: spend more on defense, but they're going to actually be

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Speaker 2: seriously thinking about alternatives to the US or some kind

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Speaker 2: of diversification away from the US if they're thinking about

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Speaker 2: defending themselves from Russia.

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Speaker 3: There's one European leader who rather nicely told me, and

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Speaker 3: I'm going to get it slightly wrong, that you know,

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Speaker 3: the way in which Europe proceeded was you have lethar

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Speaker 3: G the event, have crisis chaos, and then you end

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Speaker 3: up with a suboptimal solution of sorts. And I think

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Speaker 3: they're somewhere in the kind of chaos towards the suboptimal

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Speaker 3: solution stage of it. At the moment, I think that Greenland,

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Speaker 3: no matter how often the Trump administration out all people

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Speaker 3: around the Trump administration tried to say, oh, it really

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Speaker 3: didn't matter that much, I think it really did matter.

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Speaker 3: I think it struck through right into some of the

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Speaker 3: main leaders in Europe that they realized that they they

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Speaker 3: can't rely on America. Many of them might hope that

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Speaker 3: a different administration would be more supportive, and many of

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Speaker 3: them might even have looked at Ruby and thought, well,

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Speaker 3: if he was running it, this would be we could

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Speaker 3: deal with this. But the idea that they can necessarily

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Speaker 3: one hundred percent rely on that, I think is now out.

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Speaker 3: You've even got Germany looking at you know, what the

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Speaker 3: nuclear options are for it, You've got Britain talking to

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Speaker 3: France about its nucleus. Suddenly a lot of things are

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Speaker 3: on the table that weren't there before in terms of

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Speaker 3: where they've got to on that sort of voyage. Yes,

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Speaker 3: you've got you know, Germany is going to build Europe's

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Speaker 3: biggest army. You've got more money going back into defense

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Speaker 3: in several different areas. But it's the sort of next

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Speaker 3: stage where you get the suboptimal solutions.

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Speaker 4: You know.

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Speaker 3: One really obvious point is Europe has countless defense manufacturers

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Speaker 3: and different priorities in each part of different armies and

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Speaker 3: different versions of tanks and different simplifying all that would

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Speaker 3: not only save a fortune, it would also end up

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Speaker 3: with a much kind of better fighting force at the end.

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Speaker 3: And they don't seem to be getting there.

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Speaker 2: And it was very striking to me some of that

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Speaker 2: conversation about the nuclear deterrent and potential options involving the

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Speaker 2: French and potentially the British or indeed a sort of

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Speaker 2: pan European Jenny, I was wondering, how seriously do you

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Speaker 2: take that?

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Speaker 1: I think it's important to take it seriously. The other

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Speaker 1: thing that comes to mind that I think is really

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Speaker 1: striking here is the timing of this. This is coming

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Speaker 1: after the expiration of the last major arms limitation treaty

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Speaker 1: between the US and Russia. A new start expired earlier

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Speaker 1: this month, and I think the world has yet to

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Speaker 1: fully appreciate or reckon with the idea that we're going

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Speaker 1: to see a new wave of nuclear proliferation. I think

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Speaker 1: the europe context is obviously unique and driven in part

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Speaker 1: by these frictions with Washington, but it is taking place

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Speaker 1: against the backdrop of this broader nuclear movement where I

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Speaker 1: think we're going to see not just the US and

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Speaker 1: Russia because the expiration of this treaty, China has already

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Speaker 1: been embarking on a major nuclear weapons expansion, but also

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Speaker 1: other countries. And the consequences of that for geopolitical stability

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Speaker 1: and the consequences of conflict are immense. And you can't

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Speaker 1: get more dangerous and more impactful than nuclear conflict, right,

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Speaker 1: And that's the world in which we are going to

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Speaker 1: increasingly live in.

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Speaker 3: Just just to follow what Jenny said, if you look

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Speaker 3: at if you remember in the Ukraine War, fairly early on,

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Speaker 3: there was this issue about whether Putin would use tactical

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Speaker 3: nuclear weapons, and the Chinese immediately jumped or supposedly jumped

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Speaker 3: on his back and said, absolutely, no way, that's sort

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Speaker 3: of a road we're going to pass over. I think

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Speaker 3: by the same token, you know, the idea that Germany

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Speaker 3: would ever think of sort of turning to people or

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Speaker 3: other than America to protect it, the idea that Germany

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Speaker 3: might in the end even consider doing it itself. You know,

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Speaker 3: this is a this is a very different world. And

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Speaker 3: it's that thing where Donald Trump has thrown a stone

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Speaker 3: in the pool and the ripples still heading out. And

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Speaker 3: again a lot of these things may not happen, but

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Speaker 3: the mere fact people are thinking about it is a really,

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Speaker 3: really big deal.

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Speaker 2: Jenny, you mentioned China. That's another thing that's changed out

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Speaker 2: the Munich Security Conference. You were telling us earlier you

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Speaker 2: used to be very much focused on transatlantic ties, but

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Speaker 2: you now see much more. There's more people there from Asia,

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Speaker 2: and you know, clearly there's now more focus in Europe

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Speaker 2: from a kind of strategic standpoint as well as an

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Speaker 2: economic standpoint on China. So, you know, do you feel

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Speaker 2: that you've got a clearer sense of how Europeans were

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Speaker 2: thinking about China, Because a few years ago it would

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Speaker 2: have been all about de risking and reducing their vulnerability

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Speaker 2: to China in terms of supply chains, as we discussed

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Speaker 2: on the program a couple of weeks ago. Now almost

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Speaker 2: it's the opposite. Now people are talking about building ties

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Speaker 2: with China.

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Speaker 1: Absolutely, and as you're noting there, it's very complex. Europe

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Speaker 1: is really facing difficult choices on both sides. On one hand,

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Speaker 1: the frictions with Washington do lead them to naturally consider

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Speaker 1: the other major power in the world. On the other hand,

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Speaker 1: they're extremely frustrated with China for what they see as

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Speaker 1: China's ongoing support for Russia during its war in Ukraine.

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Speaker 1: And this was a question that got pitched to the

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Speaker 1: Chinese Foreign Minister Wangi after his remarks, which by the way,

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Speaker 1: they purposely put right after Rubio so couldn't underscore more

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Speaker 1: clearly the idea that there's a contrast being painted here

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Speaker 1: between the United States and China. Is the two major

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Speaker 1: powers in the world, and his response I think left

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Speaker 1: many Europeans deeply unsatisfied, which is essentially China remains very

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Speaker 1: committed to the peace process, but no comments on questions

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Speaker 1: about supporting Russia's war machine and ongoing strong economic and

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Speaker 1: strategic ties. The other challenge that Europe faces with China

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Speaker 1: is Preussia from Chinese exports and Chinese silver capacity, and

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Speaker 1: that's something that continues to be a strain that we

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Speaker 1: heard from European leaders and itamans from other Europeans as well,

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Speaker 1: And again I think it's it's one of those examples

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Speaker 1: of recognition of the problem, a frustration with the problem,

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Speaker 1: but no clear sense of the way for in part

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Speaker 1: because they're navigating these difficult trade offs with Washington, and

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Speaker 1: that's something I think we're going to continue to see

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Speaker 1: to play out.

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Speaker 2: And John, there's been a lot of focus on the

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Speaker 2: quality of speeches in recent weeks. People were very impressed

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Speaker 2: by Mark Carney's speech in Devils. You were saying that

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Speaker 2: you thought Rubio's speech was very good, A sort of

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Speaker 2: blockbuster speech is not what you ever expect from a

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Speaker 2: Chinese foreign minister. But did you get the sense that

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Speaker 2: there were more substantive meetings happening behind closed doors.

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Speaker 3: There's definitely a kind of flirtation going on in that direction.

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Speaker 3: And that there's two bits. I mean, very clearly, one

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Speaker 3: of privately, one of Europe's leaders, when asked what happens

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Speaker 3: in Ukraine, they said very clearly that, you know, the

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Speaker 3: only three people who can stop the war in Ukraine

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Speaker 3: are Vladimir Putin, Donald Trump and Jiujinping, because Jujing Pin

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Speaker 3: could just simply turn off the support and then Russia

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Speaker 3: would have to give in. And so I think there

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Speaker 3: is a kind of realization, certainly at the top of

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Speaker 3: Europe that this is a relationship you go into carefully.

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Speaker 3: It's quite interesting that Rubio and I asked him about that,

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Speaker 3: said no, that's fine. It's completely logical that the Europeans

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Speaker 3: should also have a foreign policy towards China, which slight

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Speaker 3: tension between that and what Trump has said a few times,

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Speaker 3: but that was what he said. Now you can make

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Speaker 3: an argument about how long the particularly Trumpish version of

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Speaker 3: foreign policy in America continues. At some point, what gets

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Speaker 3: impression the likelihood is it is going to move away

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Speaker 3: from that. And I think when it stops being so

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Speaker 3: quite so keen to go and beat up the Europeans

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Speaker 3: and starts thinking we are in a competition with China

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Speaker 3: and we're going to need allies. I think that is

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Speaker 3: where there is quite a difficulty, because I think people

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Speaker 3: will forgive American leaders, will forgive Europe doing stuff if

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Speaker 3: it's purely just a kind of reflect to what Trump

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Speaker 3: has been up to. But if you come out of

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Speaker 3: it with Europe seemed to have deeper ties with China,

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Speaker 3: that's going to really complicated the Transatlantic relationship. So I

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Speaker 3: think the europe has to be a bit careful on that.

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Speaker 3: I think, Jenny, we're going.

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Speaker 2: To run out of time, but I do want to

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Speaker 2: just touch on because you were presenting this research at Munich,

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Speaker 2: and of course it's a subject close to your heart

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Speaker 2: because you were very focused on China and Taiwan policy

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Speaker 2: when you're at the National Security Council. It's not as

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Speaker 2: if the US policy towards China is completely straightforward at

439
00:22:32,119 --> 00:22:34,560
Speaker 2: this point, and in fact, we are seeing a lot

440
00:22:34,560 --> 00:22:36,800
Speaker 2: of mixed messages in terms of, you know, the doing

441
00:22:36,840 --> 00:22:40,600
Speaker 2: of economic deals, the sort of hard talk. But also

442
00:22:40,760 --> 00:22:44,120
Speaker 2: there's somehow the suggestion that there's kind of less support,

443
00:22:44,200 --> 00:22:47,719
Speaker 2: for example, for Taiwan and you had I mean just

444
00:22:47,720 --> 00:22:49,359
Speaker 2: for a sort of couple of headlines. I mean, you've

445
00:22:49,440 --> 00:22:52,760
Speaker 2: highlighted in that report, you and the team what the

446
00:22:52,840 --> 00:22:57,760
Speaker 2: economic consequences would be of the US. Just stepping back

447
00:22:57,760 --> 00:23:00,480
Speaker 2: from Asia.

448
00:23:00,440 --> 00:23:03,040
Speaker 1: We were very fortunate that the Munich security conferences here

449
00:23:03,119 --> 00:23:06,200
Speaker 1: chose a theme of under destruction. Played quite well for

450
00:23:06,400 --> 00:23:10,400
Speaker 1: our new report that looks at the potential economic consequences

451
00:23:10,400 --> 00:23:12,800
Speaker 1: were conflict to break out in these major hotspots around

452
00:23:12,840 --> 00:23:16,000
Speaker 1: the world, including the Taiwan Street, where we estimate a

453
00:23:16,119 --> 00:23:20,080
Speaker 1: conflict there could cost the global economy about ten trillion dollars.

454
00:23:20,080 --> 00:23:23,280
Speaker 1: That's almost ten percent of global GDP, more than the

455
00:23:23,320 --> 00:23:27,240
Speaker 1: covid pandemic, more than the global financial crisis, and candidly

456
00:23:27,240 --> 00:23:29,720
Speaker 1: that's probably a conservative estimate when you look at the

457
00:23:29,760 --> 00:23:32,840
Speaker 1: really critical role that Taiwan plays in producing advanced semit

458
00:23:32,880 --> 00:23:35,679
Speaker 1: conductors that are just going into more and more things

459
00:23:35,760 --> 00:23:39,160
Speaker 1: from our smartphones, to our smart home appliances, to our

460
00:23:39,200 --> 00:23:43,240
Speaker 1: cars and increasingly feeding the beast of ai right, which

461
00:23:43,280 --> 00:23:46,480
Speaker 1: is also very important and increasingly important at least in

462
00:23:46,480 --> 00:23:49,600
Speaker 1: the US stock market. I think the risk that we're

463
00:23:49,680 --> 00:23:52,280
Speaker 1: highlighting in that report and that we're seeing in just

464
00:23:52,320 --> 00:23:55,720
Speaker 1: the headlines today, right, is not necessarily that the US

465
00:23:55,760 --> 00:23:59,359
Speaker 1: will overtly give up Taiwan, although that's something President she

466
00:23:59,400 --> 00:24:01,240
Speaker 1: to be a certain going to be pressing for in

467
00:24:01,280 --> 00:24:04,240
Speaker 1: his meeting in April with President Trump. But even just

468
00:24:04,280 --> 00:24:08,560
Speaker 1: the risk of an inadvertent sort of strategic distraction from Asia,

469
00:24:09,040 --> 00:24:12,359
Speaker 1: that the US is being pulled into the Middle East.

470
00:24:12,359 --> 00:24:15,320
Speaker 1: It's very focused on the Western hemisphere, and when you're

471
00:24:15,359 --> 00:24:18,280
Speaker 1: dealing with China that is fully focused on the Indo

472
00:24:18,359 --> 00:24:22,760
Speaker 1: Pacific and that has tremendous resources to bear, strategic distraction

473
00:24:22,880 --> 00:24:26,320
Speaker 1: can become strategic defeat. So that was essentially the premise

474
00:24:26,359 --> 00:24:29,000
Speaker 1: of our report. Again played in very well to the

475
00:24:29,000 --> 00:24:32,040
Speaker 1: themes that Munich that identified as well.

476
00:24:32,240 --> 00:24:34,520
Speaker 2: So, John, I wanted to ask you what I might

477
00:24:34,560 --> 00:24:37,880
Speaker 2: be a kind of final takeaway from Munich. You mentioned

478
00:24:37,960 --> 00:24:43,520
Speaker 2: that there was this was a real rupture to coin

479
00:24:43,560 --> 00:24:47,719
Speaker 2: a phrase, to have Germany thinking about alternatives to the US.

480
00:24:48,040 --> 00:24:50,800
Speaker 2: That certainly was the feel sort of throughout most of

481
00:24:50,800 --> 00:24:55,040
Speaker 2: the last year that the feeling among Europeans was this

482
00:24:55,080 --> 00:24:58,040
Speaker 2: is a lasting thing. There was the loss of trust

483
00:24:58,280 --> 00:25:00,919
Speaker 2: in the US as an Now, you know, it may

484
00:25:00,960 --> 00:25:03,080
Speaker 2: have been unpredictable, but the fact that you now can't

485
00:25:03,160 --> 00:25:05,840
Speaker 2: rely on the US as an ally is something that

486
00:25:05,880 --> 00:25:09,080
Speaker 2: will outlast Donald Trump, just as the sort of suspicion

487
00:25:09,119 --> 00:25:11,920
Speaker 2: of China from the US is potentially going to outlast

488
00:25:11,960 --> 00:25:14,240
Speaker 2: Donald Trump. There were an awful lot of sort of

489
00:25:14,240 --> 00:25:20,400
Speaker 2: democratic democratic hopefuls in Munich and others and senators who

490
00:25:20,480 --> 00:25:23,040
Speaker 2: all seemed to be in who were at the summit

491
00:25:23,160 --> 00:25:25,600
Speaker 2: and seemed to be wanting to say the opposite. You

492
00:25:25,600 --> 00:25:28,399
Speaker 2: know that this too will pass. Do you think that

493
00:25:28,440 --> 00:25:31,280
Speaker 2: the Europeans were buying that or do you think that

494
00:25:31,880 --> 00:25:34,320
Speaker 2: it is going to be very difficult for any future

495
00:25:34,320 --> 00:25:36,320
Speaker 2: president to be trusted in the same way.

496
00:25:37,080 --> 00:25:39,359
Speaker 3: It's a very good question. I think that the Europeans

497
00:25:39,400 --> 00:25:44,200
Speaker 3: were all looking sort of hopefully towards towards the kind

498
00:25:44,200 --> 00:25:46,240
Speaker 3: of democrats and you know, this is the answer will

499
00:25:46,240 --> 00:25:48,200
Speaker 3: get us out of this mess. And I think also

500
00:25:48,320 --> 00:25:51,360
Speaker 3: towards people like Glenn Younkin, who was also there, sort

501
00:25:51,359 --> 00:25:55,080
Speaker 3: of Republican moderates. Although you probably wouldn't thank me for

502
00:25:55,320 --> 00:25:58,919
Speaker 3: saying that that all those sort of people, Yes, the

503
00:25:58,920 --> 00:26:02,199
Speaker 3: Europeans were looking at them. But I think there is

504
00:26:02,240 --> 00:26:06,840
Speaker 3: this sort of big debate amongst the Europeans which in

505
00:26:06,920 --> 00:26:08,680
Speaker 3: one good way is sort of coming to an end.

506
00:26:09,040 --> 00:26:12,159
Speaker 3: It's been this endlessly waiting for the world after Trump.

507
00:26:12,840 --> 00:26:15,560
Speaker 3: I think the good news is because it's good for

508
00:26:15,680 --> 00:26:17,880
Speaker 3: Europe full stop to be doing this stuff. Is that

509
00:26:17,960 --> 00:26:22,760
Speaker 3: Europe now has been bullied by Trump and by the

510
00:26:23,119 --> 00:26:27,719
Speaker 3: possibility that Trump some elements of Trumpery could survive Trump

511
00:26:28,240 --> 00:26:32,359
Speaker 3: into thinking we absolutely need to focus on defense, We

512
00:26:32,400 --> 00:26:35,000
Speaker 3: need to actually start building things. We need to work

513
00:26:35,040 --> 00:26:38,159
Speaker 3: out how to do some of the stuff with competition

514
00:26:38,240 --> 00:26:42,040
Speaker 3: that they haven't done before. In a weird way, one

515
00:26:42,119 --> 00:26:47,359
Speaker 3: of the main consequences of Trump andnomics straightforwardly could be

516
00:26:48,280 --> 00:26:54,000
Speaker 3: the economics of Europe, because you're now finding people inside Germany,

517
00:26:54,680 --> 00:26:57,360
Speaker 3: inside some of the other big countries saying, look, we

518
00:26:57,440 --> 00:26:59,119
Speaker 3: just need to get on with this stuff to do

519
00:26:59,200 --> 00:27:02,640
Speaker 3: with competition Europe our economy. The reason why we are

520
00:27:02,680 --> 00:27:06,080
Speaker 3: so powerless when we negotiate with the Americans is that

521
00:27:06,119 --> 00:27:08,840
Speaker 3: our economy is not growing anywhere near as quickly as theirs,

522
00:27:09,480 --> 00:27:11,000
Speaker 3: and we need to get on with it. And some

523
00:27:11,400 --> 00:27:14,040
Speaker 3: people now talking about coalitions of the willing and all

524
00:27:14,080 --> 00:27:16,919
Speaker 3: those sort of things. So not taking the full twenty

525
00:27:16,920 --> 00:27:20,159
Speaker 3: seven along with them definitely leaving Victor Orbam behind, but

526
00:27:20,200 --> 00:27:22,840
Speaker 3: also potentially leaving the French behind as well. You know

527
00:27:23,480 --> 00:27:27,159
Speaker 3: that that is a very different way of thinking about it,

528
00:27:27,200 --> 00:27:29,800
Speaker 3: and it is you know, as I said, it's funny

529
00:27:29,800 --> 00:27:32,119
Speaker 3: that Trump and Onmic, one of the main long term

530
00:27:32,160 --> 00:27:35,959
Speaker 3: consequences of trump Andomics could be what actually what happens

531
00:27:35,960 --> 00:27:38,200
Speaker 3: in Europe rather than anywhere else. And I think that

532
00:27:38,200 --> 00:27:40,879
Speaker 3: that is quite a sort of fundamental thing. Wait to

533
00:27:40,880 --> 00:27:41,640
Speaker 3: see what happens.

534
00:27:41,800 --> 00:27:44,439
Speaker 2: I think you've given us a very elegant ending to

535
00:27:44,520 --> 00:27:47,600
Speaker 2: the program, John, not least but giving a justification for

536
00:27:47,680 --> 00:27:50,760
Speaker 2: why a supposedly economic podcast would have spent half an

537
00:27:50,760 --> 00:27:54,639
Speaker 2: hour talking about politics. Finally, finally, because it does that

538
00:27:54,720 --> 00:27:59,240
Speaker 2: Trumpnomics indeed is bleeding into all these areas. But John, Miickalthwaite,

539
00:27:59,240 --> 00:28:02,160
Speaker 2: and Jennifer wh thank you so much, Thank you so much,

540
00:28:02,320 --> 00:28:11,360
Speaker 2: thank you, thanks for listening to Trump Noomics from Bloomberg.

541
00:28:11,400 --> 00:28:14,119
Speaker 2: It was hosted by me Stephanie Flanders. I was joined

542
00:28:14,119 --> 00:28:17,360
Speaker 2: by Bloomberg News as editor in chief John Nichol, Fwaite

543
00:28:17,560 --> 00:28:23,240
Speaker 2: and Bloomberg Economics Chief geoeconomics analyst Jennifer Welch. Trumpnomics was

544
00:28:23,280 --> 00:28:26,240
Speaker 2: produced by summersadi In, Moses and Dan with help from

545
00:28:26,280 --> 00:28:29,800
Speaker 2: Amy Keene and special thanks this week to Rachel Lewis

546
00:28:29,880 --> 00:28:32,840
Speaker 2: Chriski to help let us find the show. Please rate

547
00:28:32,920 --> 00:28:36,119
Speaker 2: and review it highly wherever you listen to podcasts