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

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Speaker 2: President Donald Trump is doubling down on global tariffs, even

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Speaker 2: after his signature tariff strategy was ruled illegal by the

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Speaker 2: Supreme Court. I will sign in order to impose a

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Speaker 2: ten percent global tariff under Section one twenty two. Immediately

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Speaker 2: after the Court decided that the President couldn't use broad

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Speaker 2: emergency powers to impose tariffs, Trump announced a new ten

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Speaker 2: percent global levy using a different justification, and just a

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Speaker 2: day later, Trump said he would ratchet up the tariff

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Speaker 2: rate to fifteen percent for one hundred and fifty dates,

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Speaker 2: the legal maximum that can be in place without congressional approval.

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Speaker 3: Now he's focused on a new statute never been tested before,

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Speaker 3: that would allow him to raise tariffs to fifteen percent,

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Speaker 3: but only in certain situations.

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Speaker 2: The Trump administration has also the US Trade Representative to

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Speaker 2: launch new accelerated Section three oh one investigations, which would

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Speaker 2: allow the US to impose retaliatory tariffs on countries whose

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Speaker 2: actions it deems unreasonable or discriminatory against US trade. For

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Speaker 2: US trading partners around the world, it's causing tariff whiplash

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Speaker 2: all over again. On Monday, the European Union postponed a

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Speaker 2: vote on the trade deal and negotiated with the US

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Speaker 2: late last year, saying it needs clarity on the Trump

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Speaker 2: administration's trade policies first. India's trade delegation has also postponed

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Speaker 2: a trip to the US to finalize a trade deal,

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Speaker 2: which had been set for later this week.

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Speaker 4: I don't think we're going to see completely fully renegotiated deals,

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Speaker 4: but the countries that are in this process are going

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Speaker 4: to want to know the details of what they're going

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Speaker 4: to roll out before they sign on the dotted line

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Speaker 4: of anything with the Trump administration.

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Speaker 2: Brendan Murray oversees Bloomberg's trade coverage from London.

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Speaker 4: If you're sitting in Brussels or Beijing right now, you're saying,

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Speaker 4: perhaps maybe we have more leverage than we did last week.

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Speaker 1: If you're Beijing, you're sort of now on a level

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Speaker 1: playing field with US allies.

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Speaker 2: And Jenny marsh oversees Bloomberg's coverage of Greater China's economy

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Speaker 2: and politics.

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Speaker 1: You've gone from the biggest target when Trump first came

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Speaker 1: into now sort of you know, you have a fairly

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Speaker 1: level playing ground.

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Speaker 2: She says, Like the EU, China sees the Supreme Court's

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Speaker 2: decision as a loss of leverage for the US and

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Speaker 2: a major win for China's trade ambitions, head of a

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Speaker 2: high stakes meeting between President Trump and President shi Jinping

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Speaker 2: late next month.

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Speaker 5: So what was achieved by the trade war?

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Speaker 1: Yea, what was achieved? I think China realized is not

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Speaker 1: half as dependent on America as everyone thought.

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Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah

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Speaker 2: Holder today and on the show, my colleague Wan Ha

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Speaker 2: who hosts The Big Take Asia podcast sits down with

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Speaker 2: Brendan Murray in London and Jenny Marsh in Hong Kong

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Speaker 2: to discuss what the end of the US's reciprocal tariffs

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Speaker 2: and the potential for a new global tariff rate needs

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Speaker 2: for America's trading partners across Asia and around the world.

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Speaker 5: Thank you so much, both of you for making time

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Speaker 5: to join us. Between the three of us, we've got

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Speaker 5: big parts of the world covered. Rendon, you're based in London, Jenny,

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Speaker 5: you're here with me in Hong Kong. Before we get

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Speaker 5: into what this ruling means for countries and manufacturers, I

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Speaker 5: have to ask what's been the reaction to the Supreme

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Speaker 5: Court ruling on the ground where you are.

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Speaker 4: I think a lot of people have more questions right

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Speaker 4: now than they do answers. President Trump came out pretty

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Speaker 4: assertively after the Supreme Court ruled against him and said,

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Speaker 4: in effect, nothing's changed. I still have tariff authorities, and

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Speaker 4: I may even use them to a greater degree than

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Speaker 4: I did before. The story is the same. The US

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Speaker 4: is going to use tariffs to try to reshore manufacturing,

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Speaker 4: create factory jobs, and essentially, as President Trump would say,

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Speaker 4: rebalance the global trading system back in the US's favor.

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Speaker 5: That's interesting. So he's trying to say nothing's changed here.

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Speaker 4: Yeah, nothing's changed, but you know, in a sense, a

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Speaker 4: lot of things have changed. The President Trump, by most accounts,

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Speaker 4: has lost a lot of leverage here.

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Speaker 5: Jenny, what about here in Hong Kong and broadly in China.

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Speaker 5: What's been the reaction.

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Speaker 1: It's been pretty mute in measured, I would say. But

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Speaker 1: also when you sort of look at this, China sort

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Speaker 1: of came out from the ruling as one of the winners.

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Speaker 1: So you know, in a way, it's half of them

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Speaker 1: to sort of come out sort of threatening anything because

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Speaker 1: they've probably benefited from the Supreme Court ruling. I think

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Speaker 1: you know, particularly ahead of the she Trump summit as well,

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Speaker 1: they have to be thinking this sort of weekends Trump's hand,

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Speaker 1: just a couple of weeks before he flies into Beijing.

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Speaker 1: I think that being said, China realizes this still is

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Speaker 1: a Section and three zero one investigation pending against them,

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Speaker 1: so in that sense they're actually weaker than other countries,

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Speaker 1: and that this sort of investigation has already sort of

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Speaker 1: been in trained for months that could be expedited now

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Speaker 1: so they could quickly see more tariffs, and those tariffs

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Speaker 1: under that investigation have no upper limit and they're pretty sticky.

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Speaker 1: The ones imposed under Section three zero one from Trump's

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Speaker 1: first term is still in place, so I think that

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Speaker 1: probably also is why they're sort of waiting and seeing

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Speaker 1: before coming out with a sort of a strong reaction.

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Speaker 1: And then I think for exporters in this region, particularly

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Speaker 1: sort of ones that had the China plus one strategies

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Speaker 1: for them, I think there's a big question mark now

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Speaker 1: over was it a good idea to invest in new

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Speaker 1: factories in Cambodia and Vietnam? Is it as useful as

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Speaker 1: I thought it was going to be?

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Speaker 5: Jenny, who are the winners in this? And what does

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Speaker 5: this victory mean for them.

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Speaker 1: The biggest one is so far is China, India, and Brazil.

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Speaker 1: They were facing the highest tariffs and they're the ones

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Speaker 1: that have seen the biggest sort of percentage point decreases.

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Speaker 1: But I think everyone's aware that this is just the

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Speaker 1: holding pattern, right. This is what Trump has done is

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Speaker 1: sort of to bridge the gap until he can sort

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Speaker 1: of then use his other tools to get tariffs really

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Speaker 1: where he wants them, And it's going to be much

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Speaker 1: more complicated and harder for business to navigate because rather

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Speaker 1: than the sort of broad tariffs, it's going to be

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Speaker 1: this sort of like jumble of different sort of sectorial tariffs.

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Speaker 1: So Japan, South Korea, and Taiwan the big thing they

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Speaker 1: are looking at still now is a section two three

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Speaker 1: two investigation into chips, And for Taiwan, actually that was

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Speaker 1: always the case because the trade deal they struck had

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Speaker 1: a carve out for chips, which is sort of the

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Speaker 1: biggest thing in the export to the US. So in

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Speaker 1: some respects it was always going to be around these

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Speaker 1: specific investigations into sort of really contentious sectors, and I

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Speaker 1: think that hasn't really changed. So even though it's sort

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Speaker 1: of a headline win in some of these ways. For

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Speaker 1: some of these countries there are sort of more potent

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Speaker 1: measures down the pipeline and Brendan.

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Speaker 5: If we talk about winners someone's losing, which countries would

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Speaker 5: you place on that list and why?

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Speaker 4: The United Kingdom for months has said we negotiated the

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Speaker 4: best deal of a ten percent rate with President Trump

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Speaker 4: last year. Now this across the board fifteen percent. Does

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Speaker 4: that mean they're one of the losers in this? Are

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Speaker 4: they going to get a special carve out in however

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Speaker 4: the implementation from the White House goes ahead. We haven't

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Speaker 4: talked yet about Canada and Mexico. They've been carved out

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Speaker 4: of the fifteen percent because they're USMCA partners with the US,

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Speaker 4: so in that case they're not really delta setback. But

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Speaker 4: they are in the process of renegotiating that North American

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Speaker 4: Free Trade Agreement, and Trump, with all of his displeasure

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Speaker 4: with the Supreme Court, may find Canada and Mexico as

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Speaker 4: outlets to vent his frustration at because he has really

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Speaker 4: gone after Canada recently Mexico to a lesser degree. But

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Speaker 4: if those negotiations were expected to go smoothly before, now

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Speaker 4: the President without his favorite tariff tool has got to

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Speaker 4: take another approach, and those two economies could be in

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Speaker 4: for a rough ride over the coming months.

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Speaker 5: And it seems like countries like Japan and South Korea

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Speaker 5: that had negotiated a fifteen percent terror freight, it looks

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Speaker 5: like they've now just also lost their competitive advantage as well,

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Speaker 5: right if everyone else gets fifteen percent?

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Speaker 1: Yeah, absolutely. And I think if you're these trade negotiators

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Speaker 1: and you've spent like the last year painsaking me, having

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Speaker 1: these meetings and sort of working out these deals, convincing

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Speaker 1: your companies to get behind you, it must be so

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Speaker 1: frustrating to wake up and to sort of realize that

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Speaker 1: hard work has sort of been for nothing. At the

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Speaker 1: same time, it makes it harder for Japan South Korea

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Speaker 1: to sort of say that their trade deals are invalid

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Speaker 1: because the tariffs are actually where they negotiated them to

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Speaker 1: be at. So in a way, it's kind of stays

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Speaker 1: quo for them.

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Speaker 2: After the break, how the last year of tariff drama

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Speaker 2: has shifted the global trade balance and what consequences the

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Speaker 2: latest twist could have for the Shi Trump meeting next month,

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Speaker 2: We're back with more from Big Take Asia host juanha

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Speaker 2: in conversation with Brendan Murray, who runs Bloomberg's trade coverage,

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Speaker 2: and Jenny Marsh, who covers the economy of Northern Asia

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Speaker 2: from Hong Kong.

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Speaker 5: Certainly, the US as it stands is still at this

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Speaker 5: point the biggest destination for global manufacturers. To what degree

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Speaker 5: do you think the trade war changed that.

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Speaker 4: We just got the US's year end trade balance figures,

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Speaker 4: and if you look at the top ten US trading partners,

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Speaker 4: they really didn't shift around all that much. China's share

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Speaker 4: of trade fell quite a bit. It's been falling for

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Speaker 4: a couple of years now as the tariffs you know,

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Speaker 4: take effect, But it's still Canada and Mexico at the top.

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Speaker 4: You know, a couple of European countries, South Korea, Japan

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Speaker 4: are in the top ten. Nothing has really changed to

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Speaker 4: a significant degree in a sort of like structural way.

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Speaker 4: This is much more of a slow burn change in

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Speaker 4: the global trading system than a sudden shock to the system.

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Speaker 4: But we're heading into a new chapter now, and I

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Speaker 4: guess in.

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Speaker 5: Some ways I mean that the trade war has also

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Speaker 5: caused this fundamental shift as well, right, I mean in

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Speaker 5: terms of certainly companies feeling that they can't rely just

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Speaker 5: on the US as the main dominant market. They've got

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Speaker 5: to find other customers in other parts of the world. Jenny,

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Speaker 5: how has a country like China taken advantage of this

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Speaker 5: asymmetry in global trade.

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Speaker 1: I think China is one of the best and most

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Speaker 1: stock examples of just trade rerouting. You know, by the

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Speaker 1: end of last year, China's exports to the US the

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Speaker 1: kind of just attempt center its total exports, and that's

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Speaker 1: half the first trade war, you know, and you saw

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Speaker 1: the surge and exports instead to Europe, Latin America, Africa.

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Speaker 1: Export has just found other markets. And then you know,

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Speaker 1: China finish the year with that one point two trillion

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Speaker 1: dollar trade surplus, which no one was expecting it would

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Speaker 1: be able to record in a year where it's facing

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Speaker 1: the highest US tariffs, you know, in nearly a century.

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Speaker 1: So they prove that you can diversify and find other markets.

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Speaker 1: And it's also then you know, it's taken an advantage

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Speaker 1: of not only the trade war, but I think just

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Speaker 1: the general volatility of Trump right just sort of warm

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Speaker 1: its relationships and warm its trade ties with other countries.

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Speaker 1: You know, you saw Mark Carney come at the beginning

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Speaker 1: of this year and talk about a new world order

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Speaker 1: in China striking a bunch of trade deals with Beijing,

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Speaker 1: and then Beijing kind of you know, handing out an

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Speaker 1: olive branch by rolling back tariffs that it had imposed

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Speaker 1: on Canada, and then Canada is saying, okay, right, you know,

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Speaker 1: we're going to let in a certain quotua of Chinese

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Speaker 1: electric vehicles into Canada, which something they had resisted to

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Speaker 1: align with the US. That seemed like a landmark moment.

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Speaker 1: And then you had kist Arma coming just very shortly

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Speaker 1: afterwards and trying to achieve something similar. So I think

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Speaker 1: China sees that other countries now need to diversify, and

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Speaker 1: it's repositioning itself as sort of a land of opportunity

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Speaker 1: at a time when people really are desperate from new

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Speaker 1: growth drivers and are now worlling to sort of overlook

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Speaker 1: some of the different issues or the difficult issues that

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Speaker 1: has sort of stopped them being so favorable to trade

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Speaker 1: with Beijing, such as the war in Ukraine, human rights issues.

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Speaker 1: People are now kind of they're being more pragmatic because

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Speaker 1: it's a more kind of dangerous world in terms of trade,

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Speaker 1: going into the trade war economists for saying tariffs at

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Speaker 1: sixty percent are going to like decimate the Chinese economy.

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Speaker 1: No way, They're going to sort of come out of

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Speaker 1: this unscathed. Quite stark economic predictions. None of that came

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Speaker 1: to pass. You know, exports surged and they hit their

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Speaker 1: growth target of about five percent, so it didn't really

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Speaker 1: have a negative impact on China at all.

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Speaker 5: In some ways. I mean, that's a feather in China's

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Speaker 5: cap r.

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Speaker 1: Absolutely.

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Speaker 5: Yeah.

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Speaker 1: I think the trade will went better for shug Pain

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Speaker 1: than he probably ever realized it would do, and it

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Speaker 1: probably has rewired trade. Like if those tyrists went away,

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Speaker 1: now what company start selling back into American markets? Maybe

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Speaker 1: they would and they'd have even more trade. You know,

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Speaker 1: it's hard to predict.

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Speaker 5: And Brendan, what's your take on how global trade is doing?

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Speaker 5: You know, now that we're nearly a year since Celebration Day.

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Speaker 4: Yeah, I mean, if you look at it on a

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Speaker 4: sort of annual basis, global trade has held up pretty well.

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Speaker 4: But if you go back and look at how it

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Speaker 4: transpired over twenty twenty five, it was the front loading.

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Speaker 4: It was. It was strong in the first half of

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Speaker 4: the year, and then it kind of softened toward the

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Speaker 4: end of the year. I think we could be in

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Speaker 4: for something similar that a lot of companies will be

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Speaker 4: looking at this fifteen percent rate and say this might

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Speaker 4: be as good as it gets for the next one

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Speaker 4: hundred and fifty days. So let's place our orders now

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Speaker 4: so we could see after Chinese New Year, you know,

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Speaker 4: a rush to get items in from markets in Asia

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Speaker 4: into the US. But that's just going to complicate the

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Speaker 4: ability of governments and central banks and economists and markets

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Speaker 4: to figure out what is the clear read on the

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Speaker 4: global economy. Is it being sort of propped up right

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Speaker 4: now by you know, some some panic purchasing and ordering

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Speaker 4: and inventory stocking, or is there some genuine demand there.

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Speaker 5: Jenny. Trade obviously goes hand in hand with geopolitical ties.

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Speaker 5: How might the trade shifts affect political ties between the

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Speaker 5: US and its biggest trading partners.

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Speaker 1: I think it's already having an impact, right because it's

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Speaker 1: this volatility. So US allies are realizing that the US

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Speaker 1: is not as a reliable partner, not just in terms

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Speaker 1: of sort of military spending, but in terms of trade

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Speaker 1: as well. You know, you embrace Trump's trade war, you say, okay,

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Speaker 1: we'll make the deals we'll do the investment, we'll put

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Speaker 1: in the and then turns out they aren't legal after all,

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Speaker 1: and then you have to sort of renegotiate and go

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Speaker 1: back all over again. So I think it just dnse

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Speaker 1: US credibility. No one's going to turn their back on

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Speaker 1: the US. It's too powerful, and it still is a

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Speaker 1: huge military guarantee, particularly countryside Japan in this region. But

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Speaker 1: at the same time, there is a clear need to

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Speaker 1: make sure you have a range of partners in all

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Speaker 1: of your eggs and not just in one basket.

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Speaker 5: Now President Trump is expected to meet President she at

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Speaker 5: a summit Embinging at the end of March. How does

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Speaker 5: the Supreme Court ruling change the balance of power at

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Speaker 5: the negotiating table when they meet.

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Speaker 1: This could be the sort of the first test, if

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Speaker 1: you like, real test of how the Supreme Court sort

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Speaker 1: of changes some of these deals. It will be interesting

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Speaker 1: to see sort of how strongly the Chinese play their hand.

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Speaker 1: On the other hand, I don't think they want to

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Speaker 1: rock the boat too much. You know, the US channel

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Speaker 1: relationship has kind of calibrated nicely, and even this year

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Speaker 1: you've seen Trump, you know, take on so many parts

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Speaker 1: with his claims around Greenland, you know, so much term

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Speaker 1: at European partners admid all of that. It has stayed

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Speaker 1: quite calm with the Chinese, and I think both sides

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Speaker 1: are very committed to sort of keeping that stability going.

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Speaker 1: So maybe they just decide the status quoba is a

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Speaker 1: good thing. You know, it's a beat to have a

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Speaker 1: bed in the hand and two in the tree, and

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Speaker 1: they keep sort of targeting that. But certainly she has

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Speaker 1: more options now than he did a few weeks ago.

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Speaker 5: What would be the dream scenario for a president Shoe.

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Speaker 1: Hu Jinping has two things he really cares about getting

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Speaker 1: from the US. It has access to the highest end

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Speaker 1: in video chips, and it is some kind of concession

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Speaker 1: on Taiwan. And I think if you're sat in beaging

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Speaker 1: thinking what's the biggest thing I can get here? If

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Speaker 1: it's my best moment, then you're going to push. And

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Speaker 1: Trump has already signaled that he actually is. He's much

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Speaker 1: more open to giving them those top chips than any

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Speaker 1: other US leader or politician is. And then on Taiwan,

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Speaker 1: they want to stronger language around opposing Taiwan independence, which

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Speaker 1: would be a big blow for Taiwan if that language

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Speaker 1: changes and They want Trump to stop selling Taiwan so

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Speaker 1: many weapons.

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Speaker 5: So he could actually get what he wants.

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Speaker 1: It should Yeah good.

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Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.

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Speaker 2: The show is hosted by me, David Gera, and Juan ha.

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Speaker 2: to all of our coverage at a special rate for

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