WEBVTT - One Week Left For Trade Talks

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Doug Chrisner. Wall

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<v Speaker 2>Street closed at record highs on Thursday. We had the

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<v Speaker 2>s and p eking out a small gain and in

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<v Speaker 2>the process notching its tenth record in the last nineteen

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<v Speaker 2>trading days. The Nasdaq Composite also closed at an all

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<v Speaker 2>time high. Global markets appear to be finding encouragement from

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<v Speaker 2>President Trump signing a number of trade deals, and in

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<v Speaker 2>a moment, we'll get the market perspective of Janet Henry.

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<v Speaker 2>She is the Global Chief economist at HSBC. You know,

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<v Speaker 2>we're a week away from the Trump administration's August first

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<v Speaker 2>deadline for those trade agreements. Now, officials from the US

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<v Speaker 2>and South Korea are set to meet this week. Now,

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<v Speaker 2>Trump has hailed the deal with Japan as a potential

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<v Speaker 2>model for other countries. That deal, by the way, sets

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<v Speaker 2>tariffs at fifteen percent across the board, including on autos. Now,

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<v Speaker 2>Tokyo also agreed to a whopping five hundred and fifty

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<v Speaker 2>billion dollars in investments in American industries. Bloomberg Opinion colonist

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<v Speaker 2>Garod Redi says this deal maybe Prime Minister Shiguri Ishiba's

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<v Speaker 2>final act. And I'm pleased to say that Garod joins

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<v Speaker 2>us now from the Japanese capital. Thank you so much

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<v Speaker 2>for making time to chat with me on this. Make

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<v Speaker 2>the case that this, in fact, this trade agreement is

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<v Speaker 2>Ishiba's final act, that this is basically the last thing

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<v Speaker 2>that he will be known for.

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<v Speaker 3>Well, in terms of Ishiba, We've just had an extraordinary

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<v Speaker 3>couple of days here in Tokyo where pretty much as

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<v Speaker 3>soon as this deal was agreed, almost all of the

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<v Speaker 3>mainstream Japanese media outlets were reporting that Ishiba was soon

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<v Speaker 3>to announce his resignation. Of course, this follows the elections

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<v Speaker 3>on Sunday where Mishiva's Liberal Democratic Party lost their majority

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<v Speaker 3>in the Upper House. They already lost majority in the

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<v Speaker 3>lowerhouse and election last year, and this is the third

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<v Speaker 3>successive election with Ishiba as head where voters have essentially

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<v Speaker 3>rejected him. Normally you would see a prime minister step

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<v Speaker 3>down after such results. And the suspicion was, and the

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<v Speaker 3>case that I was making, was that the threat of

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<v Speaker 3>the tariffs from Trump had essentially given his premiership artificial life.

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<v Speaker 3>Already he had christened this tariff threat as a national

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<v Speaker 3>crisis in a sense that gave him breathing room where

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<v Speaker 3>he could say, look, things are too tense right now.

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<v Speaker 3>This is too important to worry and bicker about internal

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<v Speaker 3>politics now. By agreeing to this deal with Trump, he

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<v Speaker 3>has essentially given away his last piece of leverage. And

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<v Speaker 3>he has a lot of rivals and a lot of

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<v Speaker 3>people were not happy with his performance as leader, and

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<v Speaker 3>they're going to be coming for him.

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<v Speaker 2>So if it is some sort of capitulation, I'm wondering

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<v Speaker 2>about what the feeling within the diet, the Japanese parliament

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<v Speaker 2>may be about what Ishiba agreed to in this trade deal.

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<v Speaker 3>I do think there is a sense of relief, certainly

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<v Speaker 3>within the markets. You've seen, you know, the market reaction

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<v Speaker 3>to this deal has been you know, one of sort

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<v Speaker 3>of the uncertainty has lifted around, certainly Japanese stocks, and

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<v Speaker 3>we saw the topics yesterday reach a new record high

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<v Speaker 3>within the country. I think there is a bit of

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<v Speaker 3>a sense that this is about as good of a

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<v Speaker 3>deal as they were likely to get. I think the

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<v Speaker 3>question is the question I have is why did we

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<v Speaker 3>spend three months with Ishiba Isshba had this this red

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<v Speaker 3>line essentially that he said he was never going to

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<v Speaker 3>accept tariff's on auto's and he has a you know, basically,

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<v Speaker 3>as soon as the election was over on Sunday, he

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<v Speaker 3>crossed that red line. And now he's saying fifteen percent

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<v Speaker 3>tariff on everything, including autos is fine. However, that still

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<v Speaker 3>is better than what they had already, which was twenty

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<v Speaker 3>five percent on autos, with an additional twenty five percent

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<v Speaker 3>to come on all of the exports that are not

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<v Speaker 3>autos at the start of next week if they hadn't

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<v Speaker 3>agreed this deal.

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<v Speaker 2>So give me a sense of what you think is

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<v Speaker 2>at work, because it's not just the fifteen percent levey

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<v Speaker 2>across the board on exports from Japan into the United States.

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<v Speaker 2>There's a five hundred and fifty billion dollar investment that

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<v Speaker 2>is being pledged to the US. Makes sense of that

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<v Speaker 2>for me?

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<v Speaker 3>I wish I could, but I can't, and I'm not

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<v Speaker 3>sure anyone can make sense of the five hundred and

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<v Speaker 3>fifty billion dollar investment. The short answer is, we really

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<v Speaker 3>don't know what form that's going to take. It would

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<v Speaker 3>seem quite unusual to be investing that much in projects that,

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<v Speaker 3>you know, according to President Trumpet, the US is going

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<v Speaker 3>to retain ninety percent of any of the profits from

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<v Speaker 3>these projects. I guess what it's looking like is that

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<v Speaker 3>it's going to look something like, you know, I guess

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<v Speaker 3>sort of like financing agreements for projects within the US

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<v Speaker 3>that would be strategically important to Japan, So semiconductors, possibly,

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<v Speaker 3>you know, the energy projects, got the LNG project that's

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<v Speaker 3>going in Alaska. Possibly, you know, rare earths that that

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<v Speaker 3>kind of thing. To a certain extent, that makes sense.

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<v Speaker 3>What form this takes? Is it? You know, is it

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<v Speaker 3>low is it debt? Is it loans? Is it equity investment?

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<v Speaker 3>We don't really know who's giving that money. Does it

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<v Speaker 3>need to be paid back? All of this we don't know, essentially,

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<v Speaker 3>And the figure of the five hundred and fifty billion

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<v Speaker 3>dollars itself seems quite unusual, and I don't think anyone

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<v Speaker 3>knows really where it's coming from. Presumably it includes a

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<v Speaker 3>lot of spending that maybe is already happening or was

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<v Speaker 3>already planned. We just don't know.

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<v Speaker 2>I think I'm reminded of Trump agreeing to allow the

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<v Speaker 2>Nippon Steel acquisition of US Steel to go forward, and

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<v Speaker 2>there was some investment that was a part of that deal.

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<v Speaker 2>Maybe that could have been a bit of a leading

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<v Speaker 2>indicator that something in this order would be a part

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<v Speaker 2>of any trade agreement.

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<v Speaker 3>That's right, I mean the Nipon Steel agreement was I

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<v Speaker 3>think a positive step forward for both countries. I have

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<v Speaker 3>other issues with the deal as a deal for Nippon Steel,

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<v Speaker 3>but it was good I think that and certainly good

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<v Speaker 3>for US Japan relations. The President Trump essentially backtracked on

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<v Speaker 3>his opposition to that in return for more promises of investment.

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<v Speaker 3>That was I think fourteen billion dollars of additional investment

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<v Speaker 3>that they promised to kind of get that over the line.

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<v Speaker 3>Soft Bank is also promising to invest, you know, one

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<v Speaker 3>hundred billion in the US, and presumably that includes you know,

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<v Speaker 3>their various Vision Fund investments and semiconductor investments than AI

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<v Speaker 3>investments that they're making.

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<v Speaker 4>Now.

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<v Speaker 3>Are all these figures in the five hundred and fifty

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<v Speaker 3>billion possibly we saw there was there was a leaked

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<v Speaker 3>a leaked photo from the last round of negotiations where

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<v Speaker 3>Japan seemed to be presenting a figure of four hundred billion,

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<v Speaker 3>and by the time that meeting was over it had

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<v Speaker 3>increased to five hundred and fifty billion in the space

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<v Speaker 3>of I think that meeting went on for seventy five minutes,

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<v Speaker 3>so I think the exact figure probably has a lot

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<v Speaker 3>a lot in it. And you know, the fact that

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<v Speaker 3>we haven't really seen any clarification from either side of

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<v Speaker 3>what this figure actually is, I think shows that that

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<v Speaker 3>maybe neither side really knows well.

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<v Speaker 2>So let's remember that the US and Japan have been

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<v Speaker 2>allies for decades. I'd like to get your view as

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<v Speaker 2>to whether or not this trade deal does anything to

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<v Speaker 2>alter that relationship in the slightest I.

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<v Speaker 3>Think Japan at the start of this obviously, you know,

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<v Speaker 3>Japan was quite taken aback that, you know, not just

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<v Speaker 3>an ally, but probably their most important ally in Asia,

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<v Speaker 3>and certainly their most important ally to at least the

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<v Speaker 3>China Hawks within the Trump administration. If they wish to

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<v Speaker 3>contain China, they need Japan on board. So the fact

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<v Speaker 3>that you know, Japan was not given any sort of

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<v Speaker 3>exemption or preferential treatment when the taris were first announced

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<v Speaker 3>in April did come as a shock. However, I think

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<v Speaker 3>Japan has been pretty pragmatic, and they said very early

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<v Speaker 3>on that they wanted to separate out, you know, the

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<v Speaker 3>economic negotiations, the tariff negotiations and any defense negotiations, they

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<v Speaker 3>put them on to depletely different tracks, and I think

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<v Speaker 3>that probably was a smart move, and I think both

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<v Speaker 3>sides recognized that there are, you know, fundamental ties within

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<v Speaker 3>the security alliance that short term there's just no way

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<v Speaker 3>of getting around them. You know, Japan needs Japan needs

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<v Speaker 3>the US from a security perspective, and the US needs Japan,

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<v Speaker 3>and I think they were able to separate out that

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<v Speaker 3>part of the relationship from the trade negotiations.

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<v Speaker 2>Goroth, thank you so much for your perspective. Goode Reedy

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<v Speaker 2>Bloomberg opinion columnists joining us here on the Daybreak Asia podcast.

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<v Speaker 2>Welcome back to the Daybreak Asia Podcast. I'm Doug Chrisner.

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<v Speaker 2>Earlier today in South Korea, Yon Happ reported the country's

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<v Speaker 2>top trade negotiators have held a joint meeting with Commerce

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<v Speaker 2>Secretary Howard Lutnik and Washington. The two sides reportedly reaffirmed

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<v Speaker 2>their commitment to reach a teriff agreement before that August

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<v Speaker 2>first deadline. Let's take a closer look now at the

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<v Speaker 2>ongoing economic impact of these negotiations. We heard earlier from

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<v Speaker 2>Janet Henry. She is the Global Chief Economist at HSBC.

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<v Speaker 2>Janet spoke with Bloomberg TV host Cherry On and Heidi

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<v Speaker 2>Stroud Watts on the Asia trade.

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<v Speaker 5>Jannet, really great to have you with us at time

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<v Speaker 5>of enormous uncertainty, but also i'd imagine quite a bit

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<v Speaker 5>of fun for economists trying to model around all of

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<v Speaker 5>the different scenarios. Are you feeling as sanguine as financial

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<v Speaker 5>markets seem to be that things are only going to

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<v Speaker 5>progress when it comes to trade and at the very

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<v Speaker 5>least we're not going to go back to sort of

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<v Speaker 5>so called liberation day rates.

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<v Speaker 4>Good morning, and it's a pleasure to be here. As

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<v Speaker 4>you say, it's fun time for economists. It's certainly keeping

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<v Speaker 4>us busy, giving us plenty to talk about. But the

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<v Speaker 4>key point is one of uncertainty. And it's interesting you

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<v Speaker 4>mentioned financial markets. Equity markets. The US equity market, at

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<v Speaker 4>least for dollar investors, and global equity markets are taking

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<v Speaker 4>a pretty sang Win view because the fact is the

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<v Speaker 4>global economy has been relatively resilient relative to expectations just

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<v Speaker 4>a couple of months ago, and they do seem to

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<v Speaker 4>be taking the view that the worst case scenarios regarding

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<v Speaker 4>tariffs and trade now have a much lower probability also

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<v Speaker 4>they've priced in some expectation of quite a lot of

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<v Speaker 4>rate cuts. You know, the market's still expecting about five

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<v Speaker 4>feder rate cuts by the end of twenty twenty six.

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<v Speaker 4>So if one of those factors change, if we do

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<v Speaker 4>get worst case scenarios on tariffs, we do get some

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<v Speaker 4>higher tariffs, or if the US economy slows down more

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<v Speaker 4>materially but perhaps with higher inflation, so you don't get

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<v Speaker 4>the rate cuts, then obviously even equity markets would have

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<v Speaker 4>to question the outlook and actually maybe the dollar. Maybe

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<v Speaker 4>bond markets aren't quite a sanguine as equity markets seem to.

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<v Speaker 5>Got at the longer end of bond markets at the moment.

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<v Speaker 5>But when it comes to not quite seeing the economic impact,

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<v Speaker 5>get is that just to pass through situation? Do you

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<v Speaker 5>think the risk is that in the coming months and

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<v Speaker 5>data will start to show, both in terms of confidence

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<v Speaker 5>and inflation, that there is an impact.

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<v Speaker 4>What to some extent we saw it in the June

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<v Speaker 4>inflation data. The headline number, if anything, was lower than expected,

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<v Speaker 4>because actually, what you're finally seeing in the US is

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<v Speaker 4>the housing component of inflation is starting to moderate. But

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<v Speaker 4>when you look in the weeds of the consumer goods

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<v Speaker 4>data finished goods, particularly those from China. You saw it

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<v Speaker 4>in household appliances, you saw it in audio equipment. And

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<v Speaker 4>these are prices that have been persistently falling for the

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<v Speaker 4>last few years. Suddenly they rose on the month by

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<v Speaker 4>about ten percent. So you are seeing some signs of

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<v Speaker 4>certain items where there is a pass through, particularly or

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<v Speaker 4>finished goods. But some of the uncertainty regarding towerists relates

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<v Speaker 4>to intermediate goods components. The tariffs on aluminium and steel,

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<v Speaker 4>potentially on copper, maybe on certain areas of pharmaceuticals that

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<v Speaker 4>could be quite hefty, and they tend to pass through

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<v Speaker 4>over time. So you've seen it in the data already,

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<v Speaker 4>the front loading anticipation of tariffs, you buy a lot

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<v Speaker 4>more consumers have been front loading. And now the question

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<v Speaker 4>obviously is whether the labor market slows down or indeed

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<v Speaker 4>you see more of the inflation numbers actually squeezing, squeezing

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<v Speaker 4>spending power but also pushing up inflation expectations, putting the

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<v Speaker 4>fad in that very difficult position. But I think we

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<v Speaker 4>will see it. Calling the exact timing both in the

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<v Speaker 4>US and what it means globally is the really difficult call.

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<v Speaker 4>We think you'll see it before the end of the year.

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<v Speaker 4>You probably will see it in the coming months.

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<v Speaker 1>Do you have any indications of where the Bank of

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<v Speaker 1>Japan might go given what the Federal Reserve is doing,

0:13:36.960 --> 0:13:39.080
<v Speaker 1>and now that we have a trade deal with fifteen

0:13:39.080 --> 0:13:43.839
<v Speaker 1>percent tariffs on Japanese goods too, it's interesting.

0:13:43.559 --> 0:13:45.240
<v Speaker 4>To say, now we have a trade deal with fifteen

0:13:45.280 --> 0:13:48.160
<v Speaker 4>percent tariffs some on goods, tariffs are a lot higher.

0:13:47.960 --> 0:13:48.520
<v Speaker 6>Than they were.

0:13:48.840 --> 0:13:51.080
<v Speaker 4>They're just not as bad as have been feared back

0:13:51.120 --> 0:13:53.920
<v Speaker 4>on April the second. So we find, you know, everyone

0:13:54.040 --> 0:13:58.240
<v Speaker 4>celebrating the fact that we've only got fifteen percent tariffs

0:13:58.760 --> 0:14:01.880
<v Speaker 4>on Japan. But I think you know, what you've seen

0:14:01.920 --> 0:14:06.040
<v Speaker 4>in Japan is higher inflation, a lot of it driven

0:14:06.120 --> 0:14:10.160
<v Speaker 4>by the doubling of rice prices, and people hate those

0:14:10.240 --> 0:14:13.800
<v Speaker 4>kind of inflation releases, those everyday items that they tend

0:14:13.840 --> 0:14:17.120
<v Speaker 4>to buy. It feeds through to their inflation expectations, So

0:14:17.160 --> 0:14:19.000
<v Speaker 4>it's kind of the wrong kind of inflation.

0:14:19.360 --> 0:14:19.800
<v Speaker 6>Obviously.

0:14:19.840 --> 0:14:21.880
<v Speaker 4>What we've been hoping for, and there are some signs

0:14:21.880 --> 0:14:25.320
<v Speaker 4>of it coming through, are a more self sustained improvement

0:14:25.720 --> 0:14:29.160
<v Speaker 4>in inflation, particularly on wages, and there are signs of

0:14:29.200 --> 0:14:32.640
<v Speaker 4>that coming through. So the Bank of Japan can normalize policy.

0:14:32.840 --> 0:14:36.040
<v Speaker 4>So yes, we do expect the Bank of Japan obviously

0:14:36.280 --> 0:14:39.040
<v Speaker 4>not imminently, but before the end of the year, most

0:14:39.120 --> 0:14:40.960
<v Speaker 4>likely in October, we'll be able to.

0:14:41.000 --> 0:14:42.880
<v Speaker 6>Raise rates once more this year.

0:14:43.560 --> 0:14:46.280
<v Speaker 4>So you know, it's still getting there gradually, but it

0:14:46.320 --> 0:14:50.320
<v Speaker 4>will be helpful obviously if rice price inflation continues to

0:14:50.360 --> 0:14:54.000
<v Speaker 4>moderate and you get more of the sustainable inflation rather

0:14:54.080 --> 0:14:54.960
<v Speaker 4>than a cost shock.

0:14:55.680 --> 0:14:58.520
<v Speaker 1>Jen And when you talk about, of course the tier

0:14:58.520 --> 0:15:01.240
<v Speaker 1>of rate here in Japan being fifty percent, which yes,

0:15:01.240 --> 0:15:03.880
<v Speaker 1>to your point is higher than it was. But do

0:15:03.960 --> 0:15:07.280
<v Speaker 1>you also consider perhaps a relative impact, say as opposed

0:15:07.320 --> 0:15:09.880
<v Speaker 1>to South Korea. The Koreans are trying to lower their

0:15:09.920 --> 0:15:13.160
<v Speaker 1>tariffs to the rate of Japan because they compete in

0:15:13.240 --> 0:15:17.120
<v Speaker 1>similar goods, right, so if they have a competitive disadvantage

0:15:17.160 --> 0:15:20.640
<v Speaker 1>in automaker auto sales to the US, for example, that

0:15:20.680 --> 0:15:24.600
<v Speaker 1>would be comparatively not as great. Is that something that

0:15:24.640 --> 0:15:28.120
<v Speaker 1>as an economist you keep an eye on these relative

0:15:28.200 --> 0:15:32.280
<v Speaker 1>tariffs as opposed to just the net impact of what

0:15:32.720 --> 0:15:34.520
<v Speaker 1>the levees do to one economy.

0:15:35.560 --> 0:15:39.480
<v Speaker 4>Yes, absolutely, that's a really important point. I mean, the

0:15:39.520 --> 0:15:41.960
<v Speaker 4>fact is different countries compete with each other, but there

0:15:41.960 --> 0:15:45.040
<v Speaker 4>are other factors of them in tariffs that relate to

0:15:45.080 --> 0:15:47.360
<v Speaker 4>that currency moves. The level of the exchange rate can

0:15:47.400 --> 0:15:51.360
<v Speaker 4>matter as well. Also the position of different countries relative

0:15:51.360 --> 0:15:55.640
<v Speaker 4>performance even before the tariffs take effect, and Korea's exports

0:15:55.640 --> 0:15:57.840
<v Speaker 4>certainly haven't been quite a strong on a number of

0:15:57.880 --> 0:16:02.800
<v Speaker 4>items than for instance, Taiwan areas of Japan's exports, So

0:16:03.000 --> 0:16:05.080
<v Speaker 4>all of these factors come into play.

0:16:05.200 --> 0:16:06.800
<v Speaker 6>But you're absolutely right.

0:16:06.680 --> 0:16:10.360
<v Speaker 4>Fifteen percent is the new aspiration, rather than getting back

0:16:10.400 --> 0:16:12.960
<v Speaker 4>to just a couple of percentage points.

0:16:13.560 --> 0:16:14.560
<v Speaker 6>But when you look at the.

0:16:14.600 --> 0:16:17.760
<v Speaker 4>Data, it's still going to be very, very hard to read,

0:16:18.120 --> 0:16:21.040
<v Speaker 4>and it's still going to be very difficult for companies

0:16:21.040 --> 0:16:24.160
<v Speaker 4>to plan in advance if they don't know what tariffs

0:16:24.160 --> 0:16:26.160
<v Speaker 4>are going to be tomorrow next week.

0:16:26.360 --> 0:16:27.960
<v Speaker 6>And don't forget on the tariffs.

0:16:28.200 --> 0:16:32.480
<v Speaker 4>We've still got this court challenge that's underway in the

0:16:32.520 --> 0:16:36.520
<v Speaker 4>world regarding the use of emergency powers to impose these

0:16:36.680 --> 0:16:40.160
<v Speaker 4>reciprocal tariffs altogether, and that could go all the way

0:16:40.200 --> 0:16:42.920
<v Speaker 4>to the Supreme Court. And it seems like we're constantly

0:16:42.960 --> 0:16:46.360
<v Speaker 4>waiting for the next deadline. Now it's August first, there

0:16:46.360 --> 0:16:48.840
<v Speaker 4>are other deadlines that are later in August. There are

0:16:48.840 --> 0:16:51.600
<v Speaker 4>others that might extend in the course of the year.

0:16:51.720 --> 0:16:54.680
<v Speaker 4>So all of that does play into the uncertainty angle

0:16:55.240 --> 0:16:58.480
<v Speaker 4>and the difficulty for companies trying to navigate the course

0:16:58.920 --> 0:17:01.280
<v Speaker 4>shipping things that they don't know what the tariff will

0:17:01.320 --> 0:17:04.199
<v Speaker 4>be when by the time it actually arrives in the

0:17:04.320 --> 0:17:08.720
<v Speaker 4>United States. But you're right, relative performance between economies in

0:17:08.800 --> 0:17:11.520
<v Speaker 4>similar goods can make quite a big different, and we've.

0:17:11.400 --> 0:17:14.240
<v Speaker 5>Seen from the first Trump administration that taras tend to

0:17:14.520 --> 0:17:17.760
<v Speaker 5>compound and endure. Right, Have we sort of taken a

0:17:17.800 --> 0:17:20.000
<v Speaker 5>look at what the longer term impact is going to be,

0:17:20.880 --> 0:17:23.240
<v Speaker 5>even perhaps with the changing government.

0:17:23.920 --> 0:17:27.200
<v Speaker 4>Well, it's a good question regarding the longer term impact

0:17:27.400 --> 0:17:30.080
<v Speaker 4>because you know what you saw for you know, a

0:17:30.119 --> 0:17:34.480
<v Speaker 4>couple of decades or more. Certainly up until twenty eighteen,

0:17:34.760 --> 0:17:37.760
<v Speaker 4>with the first Trump administration, there was quite a big

0:17:37.800 --> 0:17:42.919
<v Speaker 4>relative price change because you were reducing frictions in world trade.

0:17:43.119 --> 0:17:47.440
<v Speaker 4>The US saw persistent declines in goods prices of one, two,

0:17:47.600 --> 0:17:50.639
<v Speaker 4>sometimes three percent per year, and that was a boost

0:17:50.640 --> 0:17:51.320
<v Speaker 4>to real incomes.

0:17:51.320 --> 0:17:54.399
<v Speaker 6>They were spending so much less on goods prices.

0:17:54.760 --> 0:17:57.800
<v Speaker 4>They had strong growth and in many ways that supported

0:17:57.800 --> 0:18:02.000
<v Speaker 4>their spending on domestically produced most services in what is

0:18:02.320 --> 0:18:04.000
<v Speaker 4>largely a service sector.

0:18:03.760 --> 0:18:05.200
<v Speaker 6>Economy the United States.

0:18:05.480 --> 0:18:08.080
<v Speaker 4>The industrial sector is less than ten percent of GDP

0:18:08.800 --> 0:18:12.480
<v Speaker 4>in the US, So the longer term implications would be

0:18:12.680 --> 0:18:15.679
<v Speaker 4>that people perhaps will buy less on goods. Goods are

0:18:15.680 --> 0:18:18.120
<v Speaker 4>more expensive because the US.

0:18:18.040 --> 0:18:19.480
<v Speaker 6>Can't produce all of these goods.

0:18:19.280 --> 0:18:23.800
<v Speaker 4>Themselves immediately, and so actually it can dampen the ability

0:18:23.840 --> 0:18:27.679
<v Speaker 4>to spend on other areas of the economy service sector

0:18:27.680 --> 0:18:31.760
<v Speaker 4>spending in particular, and also the more macro sense, it

0:18:31.840 --> 0:18:36.080
<v Speaker 4>means lower growth, higher inflation, and interest rates being higher

0:18:36.080 --> 0:18:37.280
<v Speaker 4>than they would have otherwise been.

0:18:37.720 --> 0:18:40.120
<v Speaker 5>Janet Henry, here's a Globe wal Chief economist at HSBC.

0:18:40.280 --> 0:18:40.880
<v Speaker 6>Here with us.

0:18:43.119 --> 0:18:46.480
<v Speaker 2>Thanks for listening to today's episode of the Bloomberg Daybreak

0:18:46.640 --> 0:18:50.000
<v Speaker 2>Asia Edition podcast. Each weekday, we look at the story

0:18:50.080 --> 0:18:54.439
<v Speaker 2>shaping markets, finance, and geopolitics in the Asia Pacific. You

0:18:54.480 --> 0:18:58.560
<v Speaker 2>can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,

0:18:58.680 --> 0:19:01.720
<v Speaker 2>or anywhere else you listen. Join us again tomorrow for

0:19:01.840 --> 0:19:05.320
<v Speaker 2>insight on the market moves from Hong Kong to Singapore

0:19:05.720 --> 0:19:09.480
<v Speaker 2>and Australia. I'm Doug Prisoner and this is Bloomberg