1
00:00:02,720 --> 00:00:07,240
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:08,400 --> 00:00:12,040
Speaker 2: Soon after US President Donald Trump's opening salvo of his

3
00:00:12,160 --> 00:00:15,480
Speaker 2: second trade war, hitting more than five hundred billion dollars

4
00:00:15,480 --> 00:00:18,960
Speaker 2: worth of Chinese goods with a ten percent tariff, China

5
00:00:19,040 --> 00:00:23,400
Speaker 2: retaliated with tariffs of its own, So yeah, r escut

6
00:00:24,760 --> 00:00:27,760
Speaker 2: It imposed ten to fifteen percent levees on fourteen billion

7
00:00:27,800 --> 00:00:31,640
Speaker 2: dollars worth of American goods, including coal, crude oil, and

8
00:00:31,720 --> 00:00:34,800
Speaker 2: cars with larger engines from the likes of GM and Ford.

9
00:00:35,560 --> 00:00:38,320
Speaker 2: Those tariffs went into effect Monday, February tenth.

10
00:00:39,000 --> 00:00:42,680
Speaker 3: China's retaliatory tariffs on fourteen billion dollars of US goods

11
00:00:42,960 --> 00:00:46,480
Speaker 3: also due to kick in today.

12
00:00:45,800 --> 00:00:49,000
Speaker 2: And within hours, Trump slapped a twenty five percent tariff

13
00:00:49,080 --> 00:00:54,080
Speaker 2: on all steel and aluminium imports, industries dominated by China.

14
00:00:54,160 --> 00:00:56,880
Speaker 1: So if it's made in the United States, there is

15
00:00:57,000 --> 00:00:59,360
Speaker 1: no tariff. What you have to do is make it

16
00:00:59,400 --> 00:01:00,360
Speaker 1: in the United States.

17
00:01:00,400 --> 00:01:01,920
Speaker 4: We don't need it from another country.

18
00:01:03,600 --> 00:01:07,319
Speaker 2: Jenny Marsh, who oversees Bloomberg's coverage of Greater China economy

19
00:01:07,400 --> 00:01:11,000
Speaker 2: and politics, says President Si Jinping doesn't appear to be

20
00:01:11,120 --> 00:01:14,160
Speaker 2: flustered by the flurry of tariffs coming from Trump.

21
00:01:14,400 --> 00:01:17,880
Speaker 5: You know you saw Tudor and Mexico's leader both rushing

22
00:01:17,920 --> 00:01:21,640
Speaker 5: together on the phone striking these deals. Chi Jinping setting

23
00:01:21,680 --> 00:01:25,160
Speaker 5: a very sort of cool, calm, collective signal that he

24
00:01:25,280 --> 00:01:27,960
Speaker 5: isn't going to be doing the same thing, like he's

25
00:01:27,959 --> 00:01:30,680
Speaker 5: a much bigger fish, and China's going to respond to

26
00:01:30,760 --> 00:01:31,360
Speaker 5: its own way.

27
00:01:32,160 --> 00:01:36,360
Speaker 2: And Bloomberg opinion columnist Sruly Wren says, China's response this

28
00:01:36,400 --> 00:01:39,720
Speaker 2: time is very different from the first trade war in

29
00:01:39,760 --> 00:01:40,520
Speaker 2: twenty eighteen.

30
00:01:40,959 --> 00:01:44,280
Speaker 3: China is in a much weaker position than twenty eighteen

31
00:01:44,600 --> 00:01:48,120
Speaker 3: when President Trump started his first trade war. What happened

32
00:01:48,320 --> 00:01:52,320
Speaker 3: is that the Chinese economy has become more reliant their

33
00:01:52,400 --> 00:01:55,920
Speaker 3: exports than ever before, and China really doesn't want to

34
00:01:56,000 --> 00:02:00,160
Speaker 3: kill the only bride spot in its economy.

35
00:02:01,680 --> 00:02:05,680
Speaker 2: Welcome to The Big Take Asia from Bloomberg News. I'm wanh.

36
00:02:06,000 --> 00:02:09,560
Speaker 2: Today in the show, we unpacked China's response to Trump's

37
00:02:09,639 --> 00:02:14,000
Speaker 2: barrage of tariffs. Can China avoid a full blown trade

38
00:02:14,080 --> 00:02:17,240
Speaker 2: war with the US, and what's at stake for both

39
00:02:17,280 --> 00:02:18,600
Speaker 2: countries going forward.

40
00:02:19,360 --> 00:02:29,760
Speaker 4: We have one very big power over China, and that's tariffs.

41
00:02:31,160 --> 00:02:34,919
Speaker 2: In the past few weeks, President Trump has proposed and

42
00:02:34,960 --> 00:02:40,000
Speaker 2: delayed twenty five percent tariffs on Canada and Mexico. In comparison,

43
00:02:40,080 --> 00:02:43,240
Speaker 2: the tariffs on China are much lower at just ten percent.

44
00:02:43,800 --> 00:02:46,160
Speaker 2: But Trump says he's just getting started.

45
00:02:46,440 --> 00:02:50,320
Speaker 1: That was just an opening salvo. If we can't make

46
00:02:50,360 --> 00:02:52,440
Speaker 1: a deal with China, then the tariffs who will be very,

47
00:02:52,520 --> 00:02:54,040
Speaker 1: very substantial.

48
00:02:53,960 --> 00:02:56,720
Speaker 2: Jenny, and truly thanks for joining us. Let's get into it.

49
00:02:56,960 --> 00:02:59,680
Speaker 2: In the first trade war, the US and China imposed

50
00:03:00,400 --> 00:03:03,720
Speaker 2: of tit for tat tariffs on each other. Eventually things

51
00:03:03,760 --> 00:03:05,880
Speaker 2: calm down a bit when the two signed a trade

52
00:03:05,919 --> 00:03:09,280
Speaker 2: deal in twenty twenty. We're China basically committed to buying

53
00:03:09,360 --> 00:03:12,840
Speaker 2: more goods from the US. Now, what does Trump really

54
00:03:12,880 --> 00:03:16,120
Speaker 2: want from China this time around? How is it different

55
00:03:16,160 --> 00:03:17,239
Speaker 2: from the first trade war?

56
00:03:18,000 --> 00:03:20,200
Speaker 5: Well, he says he wants to rebalance trade, and I

57
00:03:20,240 --> 00:03:23,600
Speaker 5: think last time that meant getting China to buy more

58
00:03:23,639 --> 00:03:27,000
Speaker 5: from the US. But this time it seems broader. It

59
00:03:27,040 --> 00:03:30,720
Speaker 5: seems like what he actually wants is to get manufacturing

60
00:03:30,760 --> 00:03:34,200
Speaker 5: back on American shores. He really wants to return America

61
00:03:34,240 --> 00:03:37,320
Speaker 5: to this sort of like manufacturing powerhouse it used to be.

62
00:03:37,920 --> 00:03:40,440
Speaker 5: I think the interesting thing is that trade war won,

63
00:03:40,480 --> 00:03:43,160
Speaker 5: and it was all about China, Whereas this time around,

64
00:03:43,240 --> 00:03:46,720
Speaker 5: that's his goal rebalance trade, but with everybody to sort

65
00:03:46,720 --> 00:03:48,800
Speaker 5: of take aim at all these different sort of partners

66
00:03:48,840 --> 00:03:52,200
Speaker 5: and economies of America trades with to bring manufacturing back

67
00:03:52,240 --> 00:03:54,640
Speaker 5: to the US. So it's sort of a much more

68
00:03:54,680 --> 00:03:58,040
Speaker 5: ambitious and wide ranging doctrine that he's trying to roll

69
00:03:58,080 --> 00:03:59,040
Speaker 5: out this time around.

70
00:03:59,280 --> 00:04:01,840
Speaker 2: Now, after you were tarras of ten percent on Chinese

71
00:04:01,840 --> 00:04:05,200
Speaker 2: goods took effect last week, Beijing responded with its own

72
00:04:05,320 --> 00:04:09,280
Speaker 2: round of tariffs. Truly, can you walk us through China's reaction?

73
00:04:09,680 --> 00:04:12,360
Speaker 3: It seems like China's response is quite muted this time.

74
00:04:12,600 --> 00:04:16,599
Speaker 3: Instead of reciprocated ten percent broad based the teriff back

75
00:04:16,680 --> 00:04:19,680
Speaker 3: on the US, China basically targeted a few things like

76
00:04:19,760 --> 00:04:23,640
Speaker 3: oil and natural gas, and it also launched the Toothlip's

77
00:04:23,760 --> 00:04:27,160
Speaker 3: anti trust probe into Google, which basically left China more

78
00:04:27,200 --> 00:04:30,679
Speaker 3: than a decade ago. It really compared to twenty eighteen,

79
00:04:30,760 --> 00:04:32,200
Speaker 3: the response was very muted.

80
00:04:32,480 --> 00:04:35,880
Speaker 2: And what's the rationale behind such a muted response, you think?

81
00:04:36,080 --> 00:04:38,640
Speaker 3: I think the problem with China is that this time

82
00:04:38,680 --> 00:04:42,280
Speaker 3: around twenty twenty five, China is in a much weaker

83
00:04:42,360 --> 00:04:46,559
Speaker 3: position than twenty eighteen, when President Trump started his first

84
00:04:46,600 --> 00:04:50,600
Speaker 3: trade war. China had a notorious COVID zero lockdown, right,

85
00:04:50,800 --> 00:04:54,040
Speaker 3: and after China exited the COVID zero lockdown in late

86
00:04:54,040 --> 00:04:57,200
Speaker 3: twenty twenty two, what the middle class discovered was that

87
00:04:57,320 --> 00:05:00,720
Speaker 3: the economy had long COVID as well. You know, like

88
00:05:01,040 --> 00:05:04,159
Speaker 3: we are four years into the property downturn, and you

89
00:05:04,320 --> 00:05:09,080
Speaker 3: still see those unfinished apartment buildings pappered across China. These

90
00:05:09,120 --> 00:05:12,719
Speaker 3: developers they have already gone defunct, right, and the government

91
00:05:12,800 --> 00:05:15,760
Speaker 3: is not stepping in to finish those buildings and deliver

92
00:05:15,880 --> 00:05:20,080
Speaker 3: presole units to households. Basically, the Chinese people just say, okay,

93
00:05:20,320 --> 00:05:23,920
Speaker 3: the government doesn't care about consumer rights and saving deposits

94
00:05:23,960 --> 00:05:28,200
Speaker 3: basically doubled from twenty eighteen to twenty twenty five, and

95
00:05:28,440 --> 00:05:32,559
Speaker 3: youth unemployment is in double digits. People have money, they're

96
00:05:32,640 --> 00:05:36,359
Speaker 3: just not spending it. As a result, in twenty eighteen,

97
00:05:36,640 --> 00:05:40,799
Speaker 3: consumption accounted for two thirds of China's economic growth. Now

98
00:05:40,880 --> 00:05:42,360
Speaker 3: it's not even one third.

99
00:05:42,600 --> 00:05:46,040
Speaker 2: So basically, in twenty eighteen, China was in a much

100
00:05:46,080 --> 00:05:49,400
Speaker 2: stronger position economically to respond, where they could say the

101
00:05:49,440 --> 00:05:52,240
Speaker 2: Trump's tearuffs, fine, we can take a hit on exports

102
00:05:52,360 --> 00:05:55,880
Speaker 2: because we can rely on the strong Chinese consumers. But

103
00:05:56,040 --> 00:05:59,800
Speaker 2: now in twenty twenty five, Chinese economy is slowing. You've

104
00:05:59,800 --> 00:06:03,719
Speaker 2: got Chinese consumers not spending. China's domestic demand has drunk

105
00:06:03,800 --> 00:06:06,719
Speaker 2: so much that China has to rely on exports to

106
00:06:06,800 --> 00:06:08,240
Speaker 2: absorb all that production.

107
00:06:08,680 --> 00:06:12,440
Speaker 3: Right, Yes, so China thought it was prepared, right, it

108
00:06:12,600 --> 00:06:15,599
Speaker 3: was trying to beef up its own self reliance in

109
00:06:15,640 --> 00:06:19,400
Speaker 3: the supply chain. But in fact, by ignoring the middle

110
00:06:19,400 --> 00:06:23,920
Speaker 3: class and by failing to foster a strong consumer culture,

111
00:06:24,240 --> 00:06:27,520
Speaker 3: China is actually more vulnerable than before because in the

112
00:06:27,560 --> 00:06:30,320
Speaker 3: global trade war, the economy that has the most powerful

113
00:06:30,360 --> 00:06:33,680
Speaker 3: consumer base basically wings and Donald Trump knows that. Right,

114
00:06:33,800 --> 00:06:36,960
Speaker 3: he can threaten terroriffs and say really nasty things on

115
00:06:37,000 --> 00:06:40,279
Speaker 3: the global stage because he can basically shut off the

116
00:06:40,400 --> 00:06:45,080
Speaker 3: access to the world's most resilient consumers, Americans, and China

117
00:06:45,120 --> 00:06:45,920
Speaker 3: no longer has that.

118
00:06:46,480 --> 00:06:49,000
Speaker 2: Jenny on the US side, what do you see as

119
00:06:49,040 --> 00:06:52,760
Speaker 2: the biggest difference between Trump's latest trade war and the

120
00:06:52,800 --> 00:06:53,640
Speaker 2: one in twenty eighteen.

121
00:06:53,839 --> 00:06:57,440
Speaker 5: I think for Trump, this is faster and more furious

122
00:06:57,520 --> 00:07:00,000
Speaker 5: than it was the first time around. First time around,

123
00:07:00,000 --> 00:07:03,279
Speaker 5: and we had investigations, it was quite slow walking. First

124
00:07:03,360 --> 00:07:06,560
Speaker 5: day in office. Is Bam, it's coming quick and it's broader.

125
00:07:07,240 --> 00:07:09,920
Speaker 5: I think for China, I think they've been here before,

126
00:07:10,480 --> 00:07:13,120
Speaker 5: and last time, during the last trade war, they unleashed

127
00:07:13,160 --> 00:07:16,880
Speaker 5: this sort of wolf warrior tactic that was going toe

128
00:07:16,880 --> 00:07:20,600
Speaker 5: to toe with Trump on the rhetoric, swinging back to

129
00:07:20,680 --> 00:07:23,160
Speaker 5: every tweet he said, and I think they realized I

130
00:07:23,200 --> 00:07:27,239
Speaker 5: did them no favors because that wolf warrior approach didn't

131
00:07:27,240 --> 00:07:30,760
Speaker 5: go down well with other countries, and it just meant

132
00:07:30,760 --> 00:07:33,400
Speaker 5: that Trump hit back all that bit harder. And I

133
00:07:33,440 --> 00:07:36,240
Speaker 5: think this time they have learned from it and they're

134
00:07:36,280 --> 00:07:38,200
Speaker 5: going to be very careful. So I think it was

135
00:07:38,320 --> 00:07:41,200
Speaker 5: just they've had four years to think about this and

136
00:07:41,240 --> 00:07:43,920
Speaker 5: how they do things differently this time around, and so

137
00:07:44,040 --> 00:07:46,160
Speaker 5: I think they are coming back with a much more

138
00:07:46,200 --> 00:07:49,680
Speaker 5: considered response. Last time they were just responding to the

139
00:07:49,800 --> 00:07:52,080
Speaker 5: chaos of Trump when everyone was getting to know what

140
00:07:52,120 --> 00:07:54,160
Speaker 5: Trump was like, and now they have a much better

141
00:07:54,160 --> 00:07:56,760
Speaker 5: read on him and sort of how to protect themselves.

142
00:07:57,040 --> 00:07:59,600
Speaker 2: So how can China protect itself? I mean, there's been

143
00:07:59,680 --> 00:08:03,040
Speaker 2: tark about it behaving like the more sensible adult in

144
00:08:03,120 --> 00:08:05,840
Speaker 2: the room. Will that help it to avoid a full

145
00:08:05,880 --> 00:08:06,840
Speaker 2: blown trade war?

146
00:08:07,120 --> 00:08:10,720
Speaker 3: I wouldn't necessarily call China being the adult in the room.

147
00:08:11,480 --> 00:08:13,920
Speaker 3: I guess this time around, they are just trying to

148
00:08:13,960 --> 00:08:17,120
Speaker 3: play a little bit smarter. Instead of going in a

149
00:08:17,160 --> 00:08:20,480
Speaker 3: hard boxing match with Trump, they are playing basically the

150
00:08:20,560 --> 00:08:24,200
Speaker 3: Chinese taichi. They're just trying to play soft and the

151
00:08:24,280 --> 00:08:27,880
Speaker 3: elusive and the hope that the Trump will self destruct

152
00:08:27,920 --> 00:08:29,080
Speaker 3: in the meantime.

153
00:08:29,600 --> 00:08:33,239
Speaker 2: If China's approach is like slow Tai Chi on tariffs,

154
00:08:33,440 --> 00:08:38,040
Speaker 2: Trump is taking the opposite tack. On Monday, Trump doubled

155
00:08:38,040 --> 00:08:40,960
Speaker 2: down and slapped a twenty five percent tariff on all

156
00:08:41,040 --> 00:08:44,920
Speaker 2: steel and aluminum coming into the US. China doesn't export

157
00:08:45,000 --> 00:08:47,720
Speaker 2: a lot of these metals directly to the US, but

158
00:08:47,800 --> 00:08:51,360
Speaker 2: it does dominate the global steel and aluminum industries and

159
00:08:51,440 --> 00:08:55,040
Speaker 2: sells its products to countries like Canada and Mexico. They

160
00:08:55,040 --> 00:08:57,640
Speaker 2: then process the metal and sell it on to the US.

161
00:08:58,160 --> 00:09:01,439
Speaker 2: So while the tariff is not directed China, China and

162
00:09:01,440 --> 00:09:08,720
Speaker 2: as trading partners, do end up taking the hit. After

163
00:09:08,760 --> 00:09:11,880
Speaker 2: the break, we'll look at how She's handling Trump's tariffs

164
00:09:12,120 --> 00:09:15,080
Speaker 2: and what China's trade war game plan could look like.

165
00:09:24,840 --> 00:09:27,800
Speaker 2: Even though China's economy today is in a much more

166
00:09:27,840 --> 00:09:31,160
Speaker 2: fragile state than it was in twenty eighteen. That doesn't

167
00:09:31,200 --> 00:09:33,240
Speaker 2: mean that it's out of options when it comes to

168
00:09:33,240 --> 00:09:37,040
Speaker 2: fighting a trade war, Bloomberg. Shuly Wren says, in the

169
00:09:37,160 --> 00:09:41,240
Speaker 2: years since Donald Trump first launched his tariffs, Beijing has

170
00:09:41,280 --> 00:09:44,920
Speaker 2: been working to prepare the Chinese economy for a second strike.

171
00:09:45,360 --> 00:09:48,080
Speaker 3: In twenty eighteen, the trade war that President Trump launched

172
00:09:48,120 --> 00:09:51,719
Speaker 3: basically was unexpected, right, and a lot of Chinese exporters

173
00:09:51,800 --> 00:09:54,640
Speaker 3: they were hurt, for sure. But these days they are

174
00:09:54,679 --> 00:09:59,240
Speaker 3: trying very hard to diversify the opening factories around the world.

175
00:09:59,360 --> 00:10:02,839
Speaker 3: Basically have moved all everywhere, to Mexico to Vienna.

176
00:10:03,040 --> 00:10:07,160
Speaker 2: Besides moving supply chains outside of China, Truly, says, China

177
00:10:07,200 --> 00:10:11,440
Speaker 2: has also reduced reliance on exports to the US. Back

178
00:10:11,480 --> 00:10:14,160
Speaker 2: in twenty eighteen, the US accounted for close to twenty

179
00:10:14,240 --> 00:10:19,400
Speaker 2: percent of China's exports. Now it's only some fifteen percent. Suly.

180
00:10:19,840 --> 00:10:22,680
Speaker 2: What more tools or other tools does China have and

181
00:10:22,720 --> 00:10:26,120
Speaker 2: its kit to deploy against Trump's trade war compared to

182
00:10:26,120 --> 00:10:27,040
Speaker 2: twenty eighteen.

183
00:10:27,040 --> 00:10:31,680
Speaker 3: Well, China has TikTok this time. Basically it could be

184
00:10:31,960 --> 00:10:35,360
Speaker 3: a good will towards Trump, because Trump has talked about

185
00:10:35,400 --> 00:10:39,240
Speaker 3: wanting to have TikTok for cheap, and perhaps the social

186
00:10:39,320 --> 00:10:41,880
Speaker 3: media can go IPO in New York and the US

187
00:10:41,960 --> 00:10:44,800
Speaker 3: government can make quite a bigger profit out of it.

188
00:10:45,000 --> 00:10:48,400
Speaker 3: So that's one tool that China could use and say, hey,

189
00:10:48,520 --> 00:10:51,160
Speaker 3: let me give you a nice gift. How about making

190
00:10:51,240 --> 00:10:54,800
Speaker 3: one hundred percent return on a bigger social media platform.

191
00:10:55,120 --> 00:10:57,920
Speaker 3: There are other tools that the Shi Chimpin could use,

192
00:10:58,120 --> 00:11:02,240
Speaker 3: but none of them will be very palatable to him.

193
00:11:02,400 --> 00:11:05,840
Speaker 3: For instance, the first time around, China did use the

194
00:11:05,960 --> 00:11:09,839
Speaker 3: un it cheapened its currency to counter Trump's twenty five

195
00:11:09,880 --> 00:11:13,040
Speaker 3: percent terraff. This time around, China could still do that,

196
00:11:13,280 --> 00:11:17,000
Speaker 3: but the pressure of capital outflow is just that much stronger.

197
00:11:17,040 --> 00:11:20,360
Speaker 3: The economy is not doing very well. Investment returns in

198
00:11:20,480 --> 00:11:23,920
Speaker 3: China are very dismal, and people naturally want to put

199
00:11:23,960 --> 00:11:27,080
Speaker 3: money out of China. And if you weaken your currency

200
00:11:27,120 --> 00:11:30,240
Speaker 3: by another, say ten to fifteen percent, the pressure of

201
00:11:30,240 --> 00:11:33,679
Speaker 3: outflow it will just be that much greater. Another tool

202
00:11:33,840 --> 00:11:37,520
Speaker 3: is perhaps using stimulus, the big one that China did

203
00:11:37,600 --> 00:11:41,160
Speaker 3: after the global financial crisis. Again, it's not a good

204
00:11:41,160 --> 00:11:44,640
Speaker 3: option because China's decked to GDB racial is already at

205
00:11:44,679 --> 00:11:48,719
Speaker 3: three hundred percent. It's one of the world's most indebted nations.

206
00:11:49,080 --> 00:11:51,720
Speaker 3: So if we're talking about stimulus, we will have to

207
00:11:51,800 --> 00:11:55,560
Speaker 3: talk about perhaps five percent of GDP every year for

208
00:11:55,760 --> 00:11:58,640
Speaker 3: years to come, and that's going to add even more

209
00:11:58,720 --> 00:11:59,760
Speaker 3: debt to the economy.

210
00:12:00,000 --> 00:12:02,880
Speaker 2: Now, China has a reputation for playing the long game,

211
00:12:03,200 --> 00:12:05,120
Speaker 2: while the US, on the other hand, seems to have

212
00:12:05,200 --> 00:12:08,520
Speaker 2: a much shorter attention span. How do we think that

213
00:12:08,600 --> 00:12:11,160
Speaker 2: tilts the balance in these trade negotiations?

214
00:12:11,360 --> 00:12:13,960
Speaker 3: I mean present shating Ping of course thinks he has

215
00:12:14,040 --> 00:12:16,960
Speaker 3: a lot more time to burn them present charmp Right,

216
00:12:17,080 --> 00:12:19,840
Speaker 3: he's only seventy one year old, and he doesn't face

217
00:12:19,920 --> 00:12:23,240
Speaker 3: term limits, not anymore, right, so he thinks he might

218
00:12:23,280 --> 00:12:25,880
Speaker 3: have a long game. But I am worried that the

219
00:12:25,920 --> 00:12:28,280
Speaker 3: government in Beijing could be a little bit too complacent.

220
00:12:28,640 --> 00:12:33,040
Speaker 3: What if China's economy just collapsed over the next four years.

221
00:12:33,120 --> 00:12:35,080
Speaker 3: There is systemic risks in China.

222
00:12:35,240 --> 00:12:36,520
Speaker 2: Here's Jenny Marshagan.

223
00:12:36,920 --> 00:12:39,439
Speaker 5: I think that's right. I mean, I think beijing strategies

224
00:12:39,480 --> 00:12:42,120
Speaker 5: just damage limitation. Let's just try and get through the

225
00:12:42,200 --> 00:12:44,600
Speaker 5: next four years with as little damage as possible. They

226
00:12:44,640 --> 00:12:47,959
Speaker 5: know they're going to be tariffs, And I also wonder

227
00:12:48,000 --> 00:12:50,240
Speaker 5: if thinking at where the opportunities might be for them,

228
00:12:50,679 --> 00:12:54,160
Speaker 5: because this time around, they're not the only target for Trump.

229
00:12:54,200 --> 00:12:56,959
Speaker 5: He's going to target the European Union. He said, he's

230
00:12:57,040 --> 00:13:00,800
Speaker 5: making these extraordinary expansionist claims. He wants to sort of

231
00:13:00,840 --> 00:13:04,079
Speaker 5: buy Greenland and take over the guards of strip. That's

232
00:13:04,120 --> 00:13:06,079
Speaker 5: going to go down, you'd think very badly in the

233
00:13:06,120 --> 00:13:09,600
Speaker 5: global South. So for China, is there an opportunity there?

234
00:13:10,040 --> 00:13:12,439
Speaker 5: One of the biggest things of Biden achieved was sort

235
00:13:12,480 --> 00:13:14,920
Speaker 5: of getting the allies to come all in line with

236
00:13:15,040 --> 00:13:17,600
Speaker 5: US policy. And if that's all going to fraction, now,

237
00:13:18,120 --> 00:13:22,400
Speaker 5: can Beijing Brussels closer make amends with South Korea and Japan?

238
00:13:23,040 --> 00:13:25,040
Speaker 5: So I imagine they'll sort of be looking for like

239
00:13:25,200 --> 00:13:27,320
Speaker 5: where they can actually win during this trade war?

240
00:13:27,800 --> 00:13:31,000
Speaker 2: And how would Trump counter attack in this trade war?

241
00:13:31,160 --> 00:13:34,480
Speaker 2: If he senses that China's gaining the upper hand, are

242
00:13:34,480 --> 00:13:37,160
Speaker 2: we going to see him wheel tariffs with more force

243
00:13:37,280 --> 00:13:38,040
Speaker 2: this time around?

244
00:13:38,320 --> 00:13:42,440
Speaker 5: All indications are yes, But then the caveat is Trump

245
00:13:42,480 --> 00:13:45,560
Speaker 5: is so unpredictable the amount of uturns. He's already done.

246
00:13:46,040 --> 00:13:50,439
Speaker 5: He's given Mexico and Canada this reprieve, and he's had

247
00:13:50,480 --> 00:13:52,920
Speaker 5: four years to think about tariffs and what he didn't

248
00:13:52,960 --> 00:13:56,400
Speaker 5: achieve last term, and he's got this sort of strong

249
00:13:56,760 --> 00:14:00,800
Speaker 5: cabinet around him. He's got he's loyalists, people who was

250
00:14:00,840 --> 00:14:03,560
Speaker 5: singing from the same hymn sheet, and he has much

251
00:14:03,600 --> 00:14:05,319
Speaker 5: stronger mandate as well to do all of this.

252
00:14:05,920 --> 00:14:07,680
Speaker 2: Now, surely do you think there could be other ways

253
00:14:07,720 --> 00:14:10,080
Speaker 2: that Trump could try to target China where it hurts.

254
00:14:10,200 --> 00:14:12,840
Speaker 3: Terriff is a very obvious choice for him, but there

255
00:14:12,840 --> 00:14:15,880
Speaker 3: are other things that he can paint China on Presenting

256
00:14:15,960 --> 00:14:19,680
Speaker 3: Pin cares very much about upgrading China's industrial sector right,

257
00:14:19,960 --> 00:14:23,560
Speaker 3: and he can impose more export controls on China, and

258
00:14:23,640 --> 00:14:27,440
Speaker 3: that hurts the sentiments back in China. Basically presenting Pain

259
00:14:27,680 --> 00:14:31,000
Speaker 3: likes to portray himself as a big character on the

260
00:14:31,040 --> 00:14:34,280
Speaker 3: world stage, and in China people don't call him directly

261
00:14:34,320 --> 00:14:37,600
Speaker 3: by name. They call him Dada basically means mister big.

262
00:14:37,880 --> 00:14:40,160
Speaker 3: And he has talked a big game. He has talked

263
00:14:40,160 --> 00:14:44,120
Speaker 3: about China dream right, and China establishing a multipolar world

264
00:14:44,280 --> 00:14:48,000
Speaker 3: and not being dominated by this one big bully in

265
00:14:48,000 --> 00:14:51,280
Speaker 3: the United States. Basically, but I'm not sure that his

266
00:14:51,480 --> 00:14:56,360
Speaker 3: deeds have been matched by his words. Let's take a

267
00:14:56,360 --> 00:14:59,000
Speaker 3: look at the economy. It's not going anywhere, right, He

268
00:14:59,120 --> 00:15:03,200
Speaker 3: tried to buffer China against the external shocks after the

269
00:15:03,280 --> 00:15:06,280
Speaker 3: twenty eighteen trade war, and the Chinese economy is more

270
00:15:06,360 --> 00:15:07,320
Speaker 3: vulnerable than ever.

271
00:15:07,600 --> 00:15:07,800
Speaker 1: Now.

272
00:15:07,880 --> 00:15:09,840
Speaker 2: What can we expect in the weeks and months to

273
00:15:09,880 --> 00:15:11,080
Speaker 2: follow on tariffs?

274
00:15:11,680 --> 00:15:15,400
Speaker 3: A lot of back and forth negotiations, and I suspect

275
00:15:15,400 --> 00:15:16,960
Speaker 3: President Trump is going to paint him.

276
00:15:17,120 --> 00:15:20,640
Speaker 5: You know, there's this April one deadline, the trumpetermenication to

277
00:15:20,680 --> 00:15:23,600
Speaker 5: report back to Trump on the first trade war, and

278
00:15:23,640 --> 00:15:26,120
Speaker 5: once that happens, then I think sort of full more

279
00:15:26,160 --> 00:15:29,840
Speaker 5: negotiations will start with China, So we'll have a restart

280
00:15:29,880 --> 00:15:32,240
Speaker 5: of those sort of trade war talks we had last time,

281
00:15:32,320 --> 00:15:34,520
Speaker 5: and it'll be interesting to see who she didn't think

282
00:15:34,520 --> 00:15:35,560
Speaker 5: puts forward this time.

283
00:15:36,040 --> 00:15:38,280
Speaker 2: Do you see anyway for the US and China to

284
00:15:38,320 --> 00:15:40,440
Speaker 2: avoid the full blown trade war.

285
00:15:41,200 --> 00:15:44,800
Speaker 3: I don't at this point. I think the deflationary pressure

286
00:15:44,880 --> 00:15:48,400
Speaker 3: in China is so strong that Chinese companies will be

287
00:15:48,600 --> 00:15:52,680
Speaker 3: very keen to export their products and services to the

288
00:15:52,720 --> 00:15:55,360
Speaker 3: rest of the world, especially to the US, because profit

289
00:15:55,400 --> 00:15:58,920
Speaker 3: margins are just that high, and that if President Trump

290
00:15:59,040 --> 00:16:02,920
Speaker 3: really clears up while protecting US labor, he is going

291
00:16:02,960 --> 00:16:06,920
Speaker 3: to use terraffs and the trade war to stop basically

292
00:16:07,000 --> 00:16:08,000
Speaker 3: China eating the world.

293
00:16:08,360 --> 00:16:11,080
Speaker 2: What are the risks you see beyond trade? If the

294
00:16:11,160 --> 00:16:14,320
Speaker 2: US is the instigator of trade wars with multiple countries,

295
00:16:14,760 --> 00:16:17,240
Speaker 2: does this in any way leave room for China to

296
00:16:17,320 --> 00:16:18,920
Speaker 2: step up on the world stage.

297
00:16:19,880 --> 00:16:23,960
Speaker 5: Trump is basically saying things which is so shocking to

298
00:16:24,000 --> 00:16:26,480
Speaker 5: sort of the rules based world order that America has

299
00:16:26,480 --> 00:16:30,800
Speaker 5: been the custodian of for decades, talking about taking over

300
00:16:30,840 --> 00:16:35,040
Speaker 5: the guards a strip or buying Greenland, or even annexing Canada.

301
00:16:35,160 --> 00:16:37,920
Speaker 5: This sort of does create some room, you think, for

302
00:16:38,000 --> 00:16:40,880
Speaker 5: Beijing to sort of amp up its rhetoric around Taiwan.

303
00:16:41,120 --> 00:16:44,520
Speaker 5: The US has been the leading figure opposing Chooting Ping's

304
00:16:44,600 --> 00:16:48,720
Speaker 5: territorial kind of rhetoric around Taiwan, his ambitions to take Taiwan.

305
00:16:49,160 --> 00:16:52,080
Speaker 5: And if you then have a US leader who himself

306
00:16:52,080 --> 00:16:55,400
Speaker 5: has all these sort of empire building aspirations, that makes

307
00:16:55,440 --> 00:16:57,120
Speaker 5: it much harder for the US to sort of have

308
00:16:57,200 --> 00:17:00,000
Speaker 5: the moral high ground to be trying to restrain China.

309
00:17:00,000 --> 00:17:02,760
Speaker 5: I'm restrained. She That doesn't mean she didn't. Ping's gonna

310
00:17:02,760 --> 00:17:05,919
Speaker 5: invade Taiwan anytime soon, but it just means he's got

311
00:17:05,960 --> 00:17:09,040
Speaker 5: a little bit more space now around that issue. And

312
00:17:09,080 --> 00:17:10,960
Speaker 5: I think that could be a dangerous.

313
00:17:10,520 --> 00:17:14,479
Speaker 2: Thing, Jenny, and truly thanks so much for sharing your

314
00:17:14,480 --> 00:17:20,880
Speaker 2: insights with us. This is The Big Take Asia from

315
00:17:20,880 --> 00:17:21,680
Speaker 2: Bloomberg News.

316
00:17:21,880 --> 00:17:22,399
Speaker 3: I'm wan ha.

317
00:17:23,320 --> 00:17:26,439
Speaker 2: This episode was produced by Young Young, Naomi Um and

318
00:17:26,520 --> 00:17:30,040
Speaker 2: Jessica Beck. It was edited by Patty Hirsh and Daniel

319
00:17:30,080 --> 00:17:34,080
Speaker 2: tien Kaid. It was fact checked by Adriana Tapia and Naomi.

320
00:17:34,560 --> 00:17:37,680
Speaker 2: It was mixed by Alex Suguiera and sound designed by Jessica.

321
00:17:38,440 --> 00:17:41,760
Speaker 2: Our senior producer is Naomi Shaven. Our senior editor is

322
00:17:41,800 --> 00:17:46,080
Speaker 2: Elizabeth Ponso. Our executive producer is Nicole Beemster Brower. Sage

323
00:17:46,080 --> 00:17:50,200
Speaker 2: Bauman is Bloomberg's head of Podcasts. If you like this episode,

324
00:17:50,240 --> 00:17:53,000
Speaker 2: make sure to subscribe and review The Big Take Asia

325
00:17:53,119 --> 00:17:56,320
Speaker 2: wherever you listen to podcasts. It really helps people find

326
00:17:56,359 --> 00:17:59,040
Speaker 2: the show. Thanks for listening, See you next time.