1 00:00:02,560 --> 00:00:07,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,039 --> 00:00:13,960 Speaker 2: The administration is very nimble and flexible, and Trump himself 3 00:00:14,080 --> 00:00:17,599 Speaker 2: he has a sense of how hard to push the economy, 4 00:00:17,800 --> 00:00:20,759 Speaker 2: and he tends to pull back from the brain if 5 00:00:21,120 --> 00:00:24,720 Speaker 2: things get really bad. At this moment, the hard data 6 00:00:25,160 --> 00:00:27,760 Speaker 2: are not causing them to want to pull back. 7 00:00:37,000 --> 00:00:40,360 Speaker 3: I'm Stephanie Flanders, head of Government and Economics at Bloomberg, 8 00:00:40,600 --> 00:00:42,879 Speaker 3: and welcome to Trump Economics, the podcast that looks at 9 00:00:42,880 --> 00:00:45,880 Speaker 3: the economic world of Donald Trump, how he's already shaped 10 00:00:45,920 --> 00:00:48,680 Speaker 3: the global economy and what on earth is going to 11 00:00:48,720 --> 00:00:53,200 Speaker 3: happen next. And this week, after a lot of discussions 12 00:00:53,240 --> 00:00:56,400 Speaker 3: and conversations with people, I wanted to sort of step 13 00:00:56,440 --> 00:01:00,480 Speaker 3: back and come back to our correspondence and economy to 14 00:01:00,600 --> 00:01:07,280 Speaker 3: ask where are we in Donald Trump's trade war. We're 15 00:01:07,280 --> 00:01:10,400 Speaker 3: taping this on Tuesday, June third, and just this morning, 16 00:01:10,760 --> 00:01:14,679 Speaker 3: the OECD, the Organization for Economic Cooperation and Development, released 17 00:01:14,680 --> 00:01:18,440 Speaker 3: a fresh warning that the US president's trade policies have 18 00:01:18,560 --> 00:01:22,319 Speaker 3: formerly tipped the world economy into a downturn. I thought 19 00:01:22,319 --> 00:01:24,560 Speaker 3: that gave us an excuse if we needed one, to 20 00:01:24,640 --> 00:01:28,200 Speaker 3: consider where things stand in Donald Trump's war on the 21 00:01:28,280 --> 00:01:31,880 Speaker 3: old fashioned global trading system. What impact it's had on 22 00:01:31,920 --> 00:01:35,160 Speaker 3: the real economy so far, particularly in the US, and 23 00:01:35,200 --> 00:01:39,319 Speaker 3: how that court challenged last week to Trump's whole tariff 24 00:01:39,400 --> 00:01:46,200 Speaker 3: strategy has added another layer of uncertainty. With me is 25 00:01:46,240 --> 00:01:49,360 Speaker 3: Anna Wong, chief US economist for Bloomberg Economics, who many 26 00:01:49,360 --> 00:01:52,360 Speaker 3: of you have heard many times before. Before she worked 27 00:01:52,360 --> 00:01:54,640 Speaker 3: for US, she worked at the Federal Reserve Board, the 28 00:01:54,760 --> 00:01:57,440 Speaker 3: US Treasury, and the White House Council of Economic Advisors 29 00:01:57,520 --> 00:02:01,720 Speaker 3: during Donald Trump's first term. Josh Wingrove also a regular 30 00:02:02,000 --> 00:02:09,400 Speaker 3: senior reporter for Bloomberg who covers the White House. Josh Anna, 31 00:02:09,600 --> 00:02:11,359 Speaker 3: always great to have you. I think the last time 32 00:02:11,400 --> 00:02:12,600 Speaker 3: we had both of you on it was a very 33 00:02:12,600 --> 00:02:15,560 Speaker 3: good conversation. Looking forward to it, Josh, we will talk 34 00:02:15,680 --> 00:02:20,360 Speaker 3: about that sort of bombshell International Trade Court ruling last 35 00:02:20,360 --> 00:02:23,640 Speaker 3: week in a little bit. But taking that to one side, 36 00:02:24,200 --> 00:02:27,760 Speaker 3: just remind us where we are in the various ceasefire 37 00:02:27,880 --> 00:02:31,679 Speaker 3: pauses negotiations in this trade war. 38 00:02:32,440 --> 00:02:34,680 Speaker 1: Well, as we sit here, we have about a month 39 00:02:35,080 --> 00:02:38,920 Speaker 1: until the expiration of several deadlines that that court case 40 00:02:39,000 --> 00:02:41,920 Speaker 1: is going to intersect with. But we also have tariffs 41 00:02:41,919 --> 00:02:46,440 Speaker 1: in place right We've got tariff's on steel, aluminum, autos, 42 00:02:46,520 --> 00:02:50,919 Speaker 1: auto parts, coming on several other products that are enacted 43 00:02:51,000 --> 00:02:53,440 Speaker 1: under different authorities that are not touched by that ruling. 44 00:02:53,440 --> 00:02:56,919 Speaker 1: In our scene is much more legally durable. Those are 45 00:02:57,520 --> 00:02:59,720 Speaker 1: not going anywhere. No one really thinks they're going anywhere. 46 00:03:00,000 --> 00:03:00,680 Speaker 3: That they're going up. 47 00:03:00,720 --> 00:03:03,920 Speaker 1: In some cases, Trump is announced exactly steal and aluminum. 48 00:03:03,919 --> 00:03:05,720 Speaker 1: The aluminum one in particular, seemed like kind of on 49 00:03:05,760 --> 00:03:08,680 Speaker 1: a whim, will double this week to fifty percent from 50 00:03:08,680 --> 00:03:12,120 Speaker 1: twenty five percent. Let's assume for a moment that those 51 00:03:12,320 --> 00:03:16,239 Speaker 1: court cases are not successful and those tariffs remain in place. 52 00:03:16,480 --> 00:03:20,080 Speaker 1: Those are that's a battle over AIPA authorities. That's what 53 00:03:20,120 --> 00:03:23,239 Speaker 1: Trump is used to pain with the broadest brush possible 54 00:03:23,240 --> 00:03:25,560 Speaker 1: and hit every country with tariffs of at least ten percent. 55 00:03:26,360 --> 00:03:29,519 Speaker 1: The deadline of July ninth means those go up from 56 00:03:29,600 --> 00:03:32,079 Speaker 1: ten if you don't have a deal. So for those 57 00:03:32,160 --> 00:03:35,480 Speaker 1: about five dozen countries including the EU as a block, 58 00:03:35,560 --> 00:03:38,240 Speaker 1: including China including others, they would snap back up if 59 00:03:38,240 --> 00:03:39,080 Speaker 1: there's no deal. 60 00:03:39,040 --> 00:03:40,880 Speaker 3: To those rates that were on the big sort of 61 00:03:41,080 --> 00:03:43,040 Speaker 3: menu board that he had in them. 62 00:03:43,040 --> 00:03:45,600 Speaker 1: Or somewhere in between. It's it's murky, and it's I 63 00:03:45,640 --> 00:03:49,160 Speaker 1: think deliberately murky. But up not ten is the point. 64 00:03:49,280 --> 00:03:52,520 Speaker 1: So they're threatening, saying, hey, make a deal now, or 65 00:03:52,520 --> 00:03:55,400 Speaker 1: you're going to have a number higher than ten come July. 66 00:03:55,520 --> 00:03:58,360 Speaker 1: Of course, the other countries, you know, basically all of 67 00:03:58,400 --> 00:04:01,080 Speaker 1: them are sending signs of you know, fusion, hesitation. Some 68 00:04:01,160 --> 00:04:03,360 Speaker 1: are looking at the court ruling and wondering why they 69 00:04:03,360 --> 00:04:05,480 Speaker 1: would play their best cards right now when it's just 70 00:04:05,480 --> 00:04:07,200 Speaker 1: so uncertain what authority Trump has. 71 00:04:07,520 --> 00:04:10,400 Speaker 3: We had all those claims about how many countries the 72 00:04:10,520 --> 00:04:13,600 Speaker 3: US would do deals with in that ninety day period 73 00:04:14,640 --> 00:04:16,320 Speaker 3: sort of went up every time they talked about it, 74 00:04:16,320 --> 00:04:18,560 Speaker 3: but I think it was like seventy or something, seventy 75 00:04:18,640 --> 00:04:21,000 Speaker 3: two or something. Anyway, just remind us how many of 76 00:04:21,040 --> 00:04:22,719 Speaker 3: those have actually been done. 77 00:04:23,160 --> 00:04:25,760 Speaker 1: One, we've got one deal with the UK group. 78 00:04:25,640 --> 00:04:27,440 Speaker 3: Well, and actually, if you're sitting in the UK now, 79 00:04:27,480 --> 00:04:30,000 Speaker 3: you would say even that has not actually been sorted out. 80 00:04:30,080 --> 00:04:33,159 Speaker 3: So Josh has reminded us that this is an unholy mess. 81 00:04:33,480 --> 00:04:36,520 Speaker 3: And we could definitely spend another twenty minutes talking about 82 00:04:36,560 --> 00:04:39,960 Speaker 3: the variation. But Anna, obviously a lot of the focus, 83 00:04:40,200 --> 00:04:43,599 Speaker 3: or a lot of the interest is on how all 84 00:04:43,680 --> 00:04:46,680 Speaker 3: this activity and the tariffs that are already in place 85 00:04:47,440 --> 00:04:50,920 Speaker 3: is affecting the real economy. Talk us through the economic 86 00:04:50,920 --> 00:04:52,599 Speaker 3: impact that we're actually seeing so far. 87 00:04:53,360 --> 00:04:58,760 Speaker 2: Yeah, so the trade war version two genuinely started in February, 88 00:04:58,920 --> 00:05:02,960 Speaker 2: so now we have basically three months worth of price 89 00:05:03,080 --> 00:05:07,080 Speaker 2: data and activity data to engage its impact. So in 90 00:05:07,120 --> 00:05:10,760 Speaker 2: these three months, generally what happened is we see deflation 91 00:05:11,200 --> 00:05:16,400 Speaker 2: or even disinflation. For example, in the April inflation number, 92 00:05:17,040 --> 00:05:22,160 Speaker 2: Powells prefer inflation gauge is supercore. Actually saw deflation, So 93 00:05:22,240 --> 00:05:25,440 Speaker 2: what's going on there? It turns out that the services 94 00:05:26,000 --> 00:05:34,120 Speaker 2: categories are particularly discretionary services categories like travel, airfares, hotels, 95 00:05:34,520 --> 00:05:40,120 Speaker 2: car rentals are all going down. So basically the decrease 96 00:05:40,440 --> 00:05:46,400 Speaker 2: income optimism and general pessimism of economy is directly and 97 00:05:46,480 --> 00:05:50,960 Speaker 2: immediately translating to lower demand for these goods and as 98 00:05:50,960 --> 00:05:55,400 Speaker 2: a result overwhelms whatever tariffs passed through in the goods 99 00:05:55,400 --> 00:05:59,160 Speaker 2: sector in terms of inflation impact. So on net inflation 100 00:05:59,279 --> 00:06:00,880 Speaker 2: impact has in disinflation. 101 00:06:01,200 --> 00:06:03,560 Speaker 3: So disinflation is when you just have a fall in 102 00:06:03,600 --> 00:06:07,400 Speaker 3: the inflation rate, and deflation is when prices are falling. 103 00:06:07,480 --> 00:06:09,039 Speaker 3: I mean, the headline from what you're saying is we 104 00:06:09,080 --> 00:06:13,400 Speaker 3: all expected inflation, but actually so far, because this kind 105 00:06:13,440 --> 00:06:18,920 Speaker 3: of supply side shock also affects confidence and activity, that 106 00:06:19,000 --> 00:06:21,599 Speaker 3: effect is actually more visible than the inflation effects. 107 00:06:21,640 --> 00:06:24,400 Speaker 2: Sor right correct so far, yes, But. 108 00:06:24,560 --> 00:06:27,920 Speaker 3: In terms of expectations, I think we are seeing people 109 00:06:28,080 --> 00:06:31,000 Speaker 3: expecting inflation to pick up as a result of tariffs. 110 00:06:31,040 --> 00:06:34,400 Speaker 3: And of course Donald Trump would claim that economics in 111 00:06:34,440 --> 00:06:36,960 Speaker 3: the real world works differently from people expect and he's 112 00:06:37,040 --> 00:06:39,560 Speaker 3: kind of proven that by doing things that were supposed 113 00:06:39,560 --> 00:06:41,400 Speaker 3: to be very costly and have actually done all right. 114 00:06:41,480 --> 00:06:44,080 Speaker 3: And I'd have to say, listening to you so far, 115 00:06:44,560 --> 00:06:46,719 Speaker 3: you know, everyone said there was going to be inflation. No, 116 00:06:46,880 --> 00:06:50,240 Speaker 3: inflation's gone down. Everyone said that the economy be really hurt. Well, 117 00:06:50,279 --> 00:06:52,280 Speaker 3: if you look through the kind of ups and downs 118 00:06:52,279 --> 00:06:55,040 Speaker 3: of the first two quarters, which are very distorted by 119 00:06:55,080 --> 00:06:58,479 Speaker 3: this import activity, the economy doesn't seem to have been 120 00:06:58,680 --> 00:07:01,839 Speaker 3: very adversely affect And in fact, everyone predicted the dollar 121 00:07:01,880 --> 00:07:03,839 Speaker 3: would go up as a result of tariffs, and in 122 00:07:03,880 --> 00:07:05,640 Speaker 3: fact it's gone down significantly. 123 00:07:05,920 --> 00:07:08,240 Speaker 2: So that was very surprising that. 124 00:07:11,360 --> 00:07:14,760 Speaker 3: So he's right, the colnivists just don't know anything, and 125 00:07:14,960 --> 00:07:16,640 Speaker 3: he can reinvent the rules. 126 00:07:17,480 --> 00:07:20,400 Speaker 2: And Stephany is too early. It's also too early in 127 00:07:20,440 --> 00:07:23,040 Speaker 2: the game going back to the import front running, so 128 00:07:23,080 --> 00:07:27,400 Speaker 2: we have until July where nothing happened. Everything can carry 129 00:07:27,400 --> 00:07:31,600 Speaker 2: on as usual. However, after this front running is over, 130 00:07:32,120 --> 00:07:36,360 Speaker 2: the question is will the firms restock at higher prices? 131 00:07:36,680 --> 00:07:40,040 Speaker 2: And if they do, then ultimately the firms will have 132 00:07:40,080 --> 00:07:42,160 Speaker 2: to decide should they pass it through or should they 133 00:07:42,240 --> 00:07:45,840 Speaker 2: just eat those in terms of profit compression. So the 134 00:07:45,880 --> 00:07:49,200 Speaker 2: firms did not need to have that stark choice right now. 135 00:07:49,440 --> 00:07:51,800 Speaker 2: We are not in that period. And this is why 136 00:07:52,880 --> 00:07:56,280 Speaker 2: you have FED Governor Chris Waller talking about how it's 137 00:07:56,520 --> 00:07:59,680 Speaker 2: kind of hard to see what is truly what truly 138 00:08:00,800 --> 00:08:03,480 Speaker 2: how is it impacting inflation until after July. 139 00:08:04,000 --> 00:08:06,000 Speaker 1: I just wanted to signal this banana was But also 140 00:08:06,040 --> 00:08:08,600 Speaker 1: note that like Trump is bragging about this, right they're 141 00:08:08,840 --> 00:08:09,560 Speaker 1: they're bragging. 142 00:08:09,800 --> 00:08:12,080 Speaker 3: Probably it's not Biden's economy anymore. 143 00:08:12,160 --> 00:08:16,480 Speaker 1: Right Exactly, they are bragging about low gasoline prices, which 144 00:08:16,480 --> 00:08:18,559 Speaker 1: by the way, are at a rate where US drilling 145 00:08:18,640 --> 00:08:23,360 Speaker 1: is heavily disincentivized. There are signs of uncertainty, if not 146 00:08:23,440 --> 00:08:27,960 Speaker 1: even pullback that Trump is looking at a political positive. 147 00:08:28,040 --> 00:08:30,640 Speaker 1: So they are celebrating these things even if you look 148 00:08:30,640 --> 00:08:33,120 Speaker 1: at the trade data and think, well this is kind 149 00:08:33,120 --> 00:08:35,400 Speaker 1: of like a crash diet, right if I stop eating 150 00:08:36,000 --> 00:08:39,360 Speaker 1: for a month and might bemidrops. Like, is that is that, like, 151 00:08:39,840 --> 00:08:41,880 Speaker 1: you know, harbinger of a long term thing or is 152 00:08:41,920 --> 00:08:44,920 Speaker 1: that just me making bold choices? So we'll see how 153 00:08:44,920 --> 00:08:47,880 Speaker 1: this shakes out. But like Trump is and his allies 154 00:08:47,920 --> 00:08:50,840 Speaker 1: are proud of this. They are boasting about this. He 155 00:08:51,000 --> 00:08:55,400 Speaker 1: loves the tariff revenue. He believes it is driving domestic 156 00:08:55,760 --> 00:08:59,320 Speaker 1: investment in factories. And I think that people maybe still 157 00:08:59,320 --> 00:09:03,720 Speaker 1: haven't really wrap their head around how an evangelist he 158 00:09:03,880 --> 00:09:06,679 Speaker 1: is on this tariff issue. When the question of like 159 00:09:06,760 --> 00:09:09,160 Speaker 1: legal flights and are these teriffs going to stay or not? 160 00:09:09,679 --> 00:09:12,640 Speaker 1: So everyone you talk to around Donald Trump, he loves tariffs. 161 00:09:12,880 --> 00:09:15,400 Speaker 1: There's going to be tariffs. If it's not this authority, 162 00:09:15,400 --> 00:09:18,920 Speaker 1: it'll be another. It's going to be bumpy, but they're 163 00:09:19,000 --> 00:09:19,560 Speaker 1: going to be there. 164 00:09:19,840 --> 00:09:21,520 Speaker 3: Yeah. On the trade thing, it reminds me there was 165 00:09:21,559 --> 00:09:23,880 Speaker 3: that old learn about I. I've been training my donkey 166 00:09:23,960 --> 00:09:26,000 Speaker 3: to not need any food, just as I'd trained him 167 00:09:26,000 --> 00:09:28,600 Speaker 3: to not need any food Adoly died. So we might 168 00:09:28,640 --> 00:09:32,480 Speaker 3: see that on the trade front. But Anna Josh is mentioning, 169 00:09:32,760 --> 00:09:35,679 Speaker 3: I guess there's a sort of macro micro thing because 170 00:09:35,840 --> 00:09:39,280 Speaker 3: macro we're still not seeing some of the impacts that 171 00:09:39,320 --> 00:09:41,840 Speaker 3: we might have expected to see. And you've said too 172 00:09:41,880 --> 00:09:45,760 Speaker 3: early to say, but you know, micro, we also have 173 00:09:45,840 --> 00:09:47,520 Speaker 3: a lot of stories and we have a lot of 174 00:09:47,679 --> 00:09:51,360 Speaker 3: reports from companies who are doing their sort of earnings 175 00:09:51,360 --> 00:09:55,200 Speaker 3: forecasts and things saying this is really affecting our ability 176 00:09:55,280 --> 00:09:57,720 Speaker 3: to get components, or at least we're having to really 177 00:09:57,880 --> 00:10:01,679 Speaker 3: think about rethink how we make stuff. I mean, how 178 00:10:01,760 --> 00:10:03,800 Speaker 3: much are we seeing that in terms of changing the 179 00:10:03,840 --> 00:10:05,400 Speaker 3: way companies are operating. 180 00:10:05,960 --> 00:10:09,559 Speaker 2: Yeah, I think that's the surprising part to me personally. 181 00:10:09,640 --> 00:10:16,200 Speaker 2: So ISM Manufacturing just release their semi annual survey that 182 00:10:16,400 --> 00:10:19,840 Speaker 2: asks manufacturing firms what are their plans in the next 183 00:10:19,880 --> 00:10:24,920 Speaker 2: six months, And interestingly, there are a pretty substantial list 184 00:10:25,120 --> 00:10:29,800 Speaker 2: of US industries that's reporting they're going to increase the 185 00:10:29,840 --> 00:10:34,000 Speaker 2: operation capacity in the US. And some of those industries 186 00:10:34,000 --> 00:10:37,960 Speaker 2: would surprise you because it's for example, it's things like Apparels. 187 00:10:38,160 --> 00:10:41,000 Speaker 2: I mean, why would one think that US would be 188 00:10:41,080 --> 00:10:44,840 Speaker 2: bringing back Apparels. And we also know that Apparels was 189 00:10:44,880 --> 00:10:47,280 Speaker 2: one of the most hardest hit by these terraffs on 190 00:10:47,920 --> 00:10:49,400 Speaker 2: China and Vietnam. 191 00:10:49,440 --> 00:10:51,960 Speaker 3: So that would be the answer, but you wouldn't necessarily 192 00:10:51,960 --> 00:10:54,120 Speaker 3: expect the US to do it. But it has been 193 00:10:54,200 --> 00:10:56,640 Speaker 3: the sector that's been hit particularly. 194 00:10:56,160 --> 00:11:01,520 Speaker 2: Hard, exactly exactly, and the metals industries where seeing some 195 00:11:01,720 --> 00:11:06,360 Speaker 2: increase in employment in the metals industry, which is consistent 196 00:11:06,520 --> 00:11:09,960 Speaker 2: with what we saw in twenty nineteen and twenty eighteen too. 197 00:11:10,280 --> 00:11:11,840 Speaker 3: I mean, just one of my questions for you was, 198 00:11:11,920 --> 00:11:14,680 Speaker 3: are the administration worried about the economic impacts we're seeing 199 00:11:14,840 --> 00:11:17,480 Speaker 3: as you've just said, they're actually quite excited so far 200 00:11:17,559 --> 00:11:19,600 Speaker 3: about some of the positive impacts. 201 00:11:20,040 --> 00:11:21,760 Speaker 1: I think that for them it is always sort of 202 00:11:21,760 --> 00:11:24,800 Speaker 1: two steps forward, one step back. They're excited until they 203 00:11:24,800 --> 00:11:28,240 Speaker 1: have to have, for instance, a somewhat hasty cease fire 204 00:11:28,280 --> 00:11:32,480 Speaker 1: with China in Geneva, right like, everything's going great until 205 00:11:32,559 --> 00:11:36,680 Speaker 1: we have these hastily arranged and deals to claw everything 206 00:11:36,720 --> 00:11:38,920 Speaker 1: back and take the pressure off the market. So I 207 00:11:39,000 --> 00:11:43,720 Speaker 1: think that's sort of where they're at. They continue to 208 00:11:43,760 --> 00:11:47,240 Speaker 1: project sort of a Trumpian confidence, if you will, but 209 00:11:48,160 --> 00:11:51,760 Speaker 1: constantly the pressures to come back from it are just 210 00:11:52,120 --> 00:11:53,640 Speaker 1: going to be there. So I think the question is 211 00:11:53,640 --> 00:11:55,680 Speaker 1: like with the EU with Japan, with South Korea, with 212 00:11:55,720 --> 00:11:58,160 Speaker 1: major trading partners on which there really has not been 213 00:11:58,920 --> 00:12:02,520 Speaker 1: a lot of progress locations of progress. What happens if 214 00:12:02,520 --> 00:12:05,240 Speaker 1: there's no deal, like how high does Trump go to snap? 215 00:12:05,640 --> 00:12:07,960 Speaker 3: At the same time, we had a lot of noise 216 00:12:08,000 --> 00:12:11,200 Speaker 3: about China's going back on its side of the bargain 217 00:12:11,360 --> 00:12:15,160 Speaker 3: with this deal, and we had the sort of very 218 00:12:15,320 --> 00:12:19,000 Speaker 3: rapid fire thing around doubling the steel and anominum tariffs. 219 00:12:19,240 --> 00:12:22,200 Speaker 3: So how did you read any of that? Insofar as 220 00:12:22,240 --> 00:12:24,760 Speaker 3: there is an underlying strategy. 221 00:12:25,040 --> 00:12:27,800 Speaker 1: On the China thing, I think it is teeing up well. 222 00:12:28,040 --> 00:12:30,240 Speaker 1: As we sit here, we expect to be or at 223 00:12:30,320 --> 00:12:32,880 Speaker 1: least the Americans expect to be a call between President 224 00:12:32,920 --> 00:12:35,560 Speaker 1: and She and President Trump at some point this week. 225 00:12:35,720 --> 00:12:37,600 Speaker 1: All they've said is this week, a couple of officials 226 00:12:37,640 --> 00:12:39,640 Speaker 1: have said it publicly. We just don't know when that 227 00:12:39,800 --> 00:12:42,760 Speaker 1: will be. Those complaints appear to be heavily linked to 228 00:12:43,160 --> 00:12:47,319 Speaker 1: export controls around critical minerals that the Americans said publicly 229 00:12:47,360 --> 00:12:50,720 Speaker 1: would be like, you know, flowing freely, and China just 230 00:12:51,240 --> 00:12:54,080 Speaker 1: had a different view on that. So, whether it is 231 00:12:54,200 --> 00:12:57,800 Speaker 1: China renegging or an outcome that is different than the 232 00:12:57,800 --> 00:13:01,000 Speaker 1: publicly stated desired outcome of the Americans, is that open question. 233 00:13:01,040 --> 00:13:04,720 Speaker 1: I think on the steel aluminum, I mean, I don't 234 00:13:04,960 --> 00:13:07,800 Speaker 1: It's difficult not to see it as like a reaction 235 00:13:08,000 --> 00:13:09,840 Speaker 1: to the court ruling. He almost felt like he wanted 236 00:13:09,840 --> 00:13:12,160 Speaker 1: to flex his muscle and you know, enact Terris where 237 00:13:12,559 --> 00:13:14,480 Speaker 1: he could. And we should note, of course that they 238 00:13:14,480 --> 00:13:17,400 Speaker 1: renounced at US steel in the context of him celebrating 239 00:13:18,080 --> 00:13:21,680 Speaker 1: the sale of US steel to Japanese, the Japanese company 240 00:13:21,800 --> 00:13:24,440 Speaker 1: Nipon Steel, which he's not framing as a sale, but 241 00:13:24,559 --> 00:13:26,280 Speaker 1: essentially he's flipped his view on it. He used to 242 00:13:26,280 --> 00:13:28,800 Speaker 1: oppose it, he campaigned against it. Now he's blessing it 243 00:13:28,920 --> 00:13:32,120 Speaker 1: with certain you know, strings attached. So he's he's sort 244 00:13:32,120 --> 00:13:36,120 Speaker 1: of like washing down the reversal with oh, by the way, 245 00:13:36,120 --> 00:13:38,679 Speaker 1: I'm giving you more tariffs, which for Nipon Steel is 246 00:13:38,720 --> 00:13:41,120 Speaker 1: probably not bad because now they've got a great foothold 247 00:13:41,160 --> 00:13:43,480 Speaker 1: in the American industry and they will be terror free 248 00:13:43,600 --> 00:13:44,760 Speaker 1: for stuff made at US steel. 249 00:13:45,200 --> 00:13:47,720 Speaker 3: Anna. You know, Josh has mentioned that at least it 250 00:13:47,800 --> 00:13:50,800 Speaker 3: may have an impact on other countries that you've now 251 00:13:50,840 --> 00:13:54,240 Speaker 3: got this legal uncertainty around a lot of the tariffs 252 00:13:54,280 --> 00:13:57,760 Speaker 3: that we're using. The AIPA legislation. The idea of an 253 00:13:57,800 --> 00:14:02,240 Speaker 3: emergency that gives the president exceptional power. They push back 254 00:14:02,280 --> 00:14:05,200 Speaker 3: on that, but how significant do you think that ruling is? 255 00:14:05,240 --> 00:14:07,120 Speaker 3: Do you think it really sort of casts a question 256 00:14:07,200 --> 00:14:08,440 Speaker 3: mark over all of these things. 257 00:14:09,200 --> 00:14:11,599 Speaker 2: No, So, first of all, they're going through all the 258 00:14:11,640 --> 00:14:14,400 Speaker 2: appeal options, and I think that the odds for a 259 00:14:14,400 --> 00:14:18,520 Speaker 2: successful appeal is pretty high given that there is a 260 00:14:18,559 --> 00:14:22,720 Speaker 2: president with Nixon's case. So in the nineteen seventies, Nixon 261 00:14:22,840 --> 00:14:27,560 Speaker 2: also invoked the predecessor of IEPA's power, also presidential powers 262 00:14:27,600 --> 00:14:31,160 Speaker 2: to impose a ten percent tariff, and he was also 263 00:14:31,320 --> 00:14:35,240 Speaker 2: challenged by the Trade Court, but then he won the 264 00:14:35,240 --> 00:14:39,320 Speaker 2: appeal because citing that the Trading with Enemy Act grants 265 00:14:39,400 --> 00:14:43,400 Speaker 2: the president emergency powers. Odds are decent for him to 266 00:14:43,440 --> 00:14:46,320 Speaker 2: win an appeal. In second even if he doesn't win, 267 00:14:46,800 --> 00:14:50,000 Speaker 2: all he needs is to buy some time until he 268 00:14:50,040 --> 00:14:53,840 Speaker 2: can switch over to these other options such as section 269 00:14:54,040 --> 00:14:56,240 Speaker 2: three three eight, one, two to two, which allow him 270 00:14:56,240 --> 00:15:02,000 Speaker 2: to immediately impose fifteen to fifty percent on anything immediately, 271 00:15:02,520 --> 00:15:05,720 Speaker 2: and then he could use Section two thirty two and 272 00:15:05,800 --> 00:15:07,880 Speaker 2: three or one, which takes longer, and all those are 273 00:15:07,920 --> 00:15:12,040 Speaker 2: already in motion. So basically, I just think that ultimately 274 00:15:12,280 --> 00:15:16,680 Speaker 2: the equal abround tariff, the endgame terroriff is still about 275 00:15:16,760 --> 00:15:19,400 Speaker 2: fifteen percent in our baseline. 276 00:15:19,200 --> 00:15:21,680 Speaker 3: Josh, is there actually an expectation that this could put 277 00:15:21,720 --> 00:15:23,520 Speaker 3: an end to at least a chunk of the terriffs. 278 00:15:23,960 --> 00:15:26,320 Speaker 1: I think they're not popping champagne yet. I think the 279 00:15:26,320 --> 00:15:28,920 Speaker 1: most powerful sort of counterforce to Trump's tariffs have been 280 00:15:28,960 --> 00:15:30,640 Speaker 1: the people that have done it sort of out of 281 00:15:30,680 --> 00:15:34,160 Speaker 1: the public eye and have fought it in court rather 282 00:15:34,240 --> 00:15:38,400 Speaker 1: than on the airwaves. So I think the silence is conspicuous. 283 00:15:38,440 --> 00:15:42,360 Speaker 1: And I agree with Anna about the other powers here. 284 00:15:42,400 --> 00:15:45,200 Speaker 1: But if I can offer the sort of contrarian take here, 285 00:15:45,280 --> 00:15:48,200 Speaker 1: I mean Section one twenty two is capped at fifteen 286 00:15:48,240 --> 00:15:51,480 Speaker 1: percent for one hundred and fifty days, so lower, much 287 00:15:51,520 --> 00:15:53,400 Speaker 1: lower than he wants to go with some of these countries. 288 00:15:53,840 --> 00:15:56,400 Speaker 1: Section three thirty eight, that's the fifty percent power that 289 00:15:56,440 --> 00:16:00,640 Speaker 1: Anna referenced. It's never been enacted, it's been threatened, been used, 290 00:16:00,680 --> 00:16:05,160 Speaker 1: So like the legal footing of that is by definition untested. 291 00:16:05,640 --> 00:16:08,840 Speaker 1: Section two thirty two. They're already doing several investigations. There 292 00:16:08,880 --> 00:16:10,680 Speaker 1: are only so many people you can fit in the 293 00:16:10,680 --> 00:16:14,080 Speaker 1: tiny USTR buildings across from the eo B Friction three 294 00:16:14,080 --> 00:16:16,800 Speaker 1: oh one, those take a long time as well. There 295 00:16:16,800 --> 00:16:19,240 Speaker 1: are trade offs to this. There's a reason they used 296 00:16:19,240 --> 00:16:21,720 Speaker 1: AIPA in the first place, or tried to use it 297 00:16:21,800 --> 00:16:23,640 Speaker 1: in the first place. If they do pivot to these 298 00:16:23,680 --> 00:16:27,720 Speaker 1: other authorities, they all come with sort of caveats that 299 00:16:27,800 --> 00:16:32,880 Speaker 1: will either limit the height or term, or be unlegally 300 00:16:33,120 --> 00:16:36,440 Speaker 1: questionable or untested in their own authority, or just simply, 301 00:16:36,840 --> 00:16:39,440 Speaker 1: you know, pile more straws onto the camel's back at 302 00:16:39,520 --> 00:16:42,560 Speaker 1: USTR and force all these investigations which, if not done properly, 303 00:16:42,600 --> 00:16:45,560 Speaker 1: will be legally vulnerable. The whole point of view of 304 00:16:45,600 --> 00:16:47,000 Speaker 1: two three two is that you've got to dot your 305 00:16:47,000 --> 00:16:48,280 Speaker 1: eyes and cross your t's and then you get a 306 00:16:48,280 --> 00:16:51,480 Speaker 1: pretty iron cloud terraff authority. If they start fast tracking it, 307 00:16:51,480 --> 00:16:54,320 Speaker 1: they risk not doing that. So there's there's there's clouds 308 00:16:54,360 --> 00:16:54,920 Speaker 1: on the horizon. 309 00:16:55,680 --> 00:16:58,360 Speaker 3: One thing that I thought was just worth mentioning, although 310 00:16:58,360 --> 00:17:03,360 Speaker 3: that really deserves its own episode, is various clauses in 311 00:17:03,440 --> 00:17:06,600 Speaker 3: the tax bill which seem to kind of extend the 312 00:17:06,760 --> 00:17:10,960 Speaker 3: trade war or at least open a new front for 313 00:17:11,560 --> 00:17:18,480 Speaker 3: Trumpian attax on the global trading and financial system, which 314 00:17:18,520 --> 00:17:22,760 Speaker 3: is these clauses which would impose sort of punitive or 315 00:17:22,840 --> 00:17:27,840 Speaker 3: much higher taxes on individuals and companies investing in or 316 00:17:27,880 --> 00:17:31,239 Speaker 3: holding US assets, but who come from countries that are 317 00:17:31,280 --> 00:17:35,879 Speaker 3: considered to have discriminatory or unfair tax regimes, regimes that 318 00:17:35,920 --> 00:17:38,560 Speaker 3: are unfair to the US. You know, it's just another 319 00:17:38,640 --> 00:17:42,439 Speaker 3: stick to beat other countries with, using the leverage of 320 00:17:42,640 --> 00:17:47,240 Speaker 3: other countries' desire to invest in the US in various ways. Anna, 321 00:17:47,400 --> 00:17:49,800 Speaker 3: There's been a lot of chatter about this, a lot 322 00:17:49,840 --> 00:17:54,200 Speaker 3: of discussion and analysis on Wall Street. Does this constitute 323 00:17:54,240 --> 00:17:58,040 Speaker 3: a sort of new front in Donald Trump's trade war? 324 00:17:58,119 --> 00:17:59,000 Speaker 3: Do you take it seriously? 325 00:18:00,000 --> 00:18:03,640 Speaker 2: Read to me that it's very much targeting EU. And 326 00:18:03,680 --> 00:18:06,200 Speaker 2: we have known for a while that the Trump administration 327 00:18:07,200 --> 00:18:12,240 Speaker 2: sees EU's non tear of trade barriers as almost as 328 00:18:12,560 --> 00:18:17,119 Speaker 2: severe as China's barriers. So I think this is in 329 00:18:17,240 --> 00:18:20,200 Speaker 2: part a way to get at the Digital services tax 330 00:18:20,640 --> 00:18:23,800 Speaker 2: and the tax on intangibles, because even in the first 331 00:18:23,840 --> 00:18:28,520 Speaker 2: Trump administration was very much against this, and yet OECD 332 00:18:28,720 --> 00:18:33,240 Speaker 2: also has been supporting these DST and taxes on intangible 333 00:18:33,600 --> 00:18:37,440 Speaker 2: and these taxes have been collected for almost like at 334 00:18:37,520 --> 00:18:40,119 Speaker 2: least six years now. So I think it will be 335 00:18:40,240 --> 00:18:46,720 Speaker 2: very hard to negotiate with EU on reducing these DST taxes, 336 00:18:46,760 --> 00:18:50,800 Speaker 2: which disproportionately affect US tech firms. I mean, there's a 337 00:18:50,840 --> 00:18:54,280 Speaker 2: reason why many of these tech firms are supporting the 338 00:18:54,320 --> 00:18:57,320 Speaker 2: Trump administration this time around. So I just think that 339 00:18:57,400 --> 00:19:02,200 Speaker 2: this is a very specific country targeting bill as opposed 340 00:19:02,200 --> 00:19:06,560 Speaker 2: to a very broad range taxing on international inflows. 341 00:19:06,880 --> 00:19:08,960 Speaker 3: I guess it's a chilling effect. I mean, we've talked 342 00:19:08,960 --> 00:19:13,760 Speaker 3: in the past about how investors were so overexposed to 343 00:19:13,800 --> 00:19:16,720 Speaker 3: some extent or sort of disproportionately invested in the US 344 00:19:16,840 --> 00:19:18,920 Speaker 3: after years and years of the US doing better than 345 00:19:18,920 --> 00:19:22,080 Speaker 3: other people other countries, that it doesn't take much for 346 00:19:22,160 --> 00:19:24,879 Speaker 3: them to think, oh, I should tilt in the other direction. 347 00:19:25,040 --> 00:19:28,919 Speaker 3: It should take some money out or reallocate. If that 348 00:19:28,960 --> 00:19:31,679 Speaker 3: brings down the dollar, then made the administrations happy about that. 349 00:19:31,760 --> 00:19:34,439 Speaker 3: But at some level, it's also going to constitute a 350 00:19:34,480 --> 00:19:37,800 Speaker 3: decline in investment flows into the US, which he's supposed 351 00:19:37,800 --> 00:19:40,440 Speaker 3: to you know, he wants to see more investments. Josh, 352 00:19:40,520 --> 00:19:42,280 Speaker 3: do you think this clause is going to go through 353 00:19:42,320 --> 00:19:46,080 Speaker 3: and do you think that it could be potentially quite damaging. 354 00:19:46,640 --> 00:19:49,680 Speaker 1: All indications are that it will go through, but you know, 355 00:19:49,840 --> 00:19:53,240 Speaker 1: we're still waiting to see what the final PI looks 356 00:19:53,320 --> 00:19:55,600 Speaker 1: like once they rebake it in the Senate and send 357 00:19:55,680 --> 00:19:57,520 Speaker 1: it back to the House. They're still working with pretty 358 00:19:58,160 --> 00:20:01,520 Speaker 1: skinny margins here, but there's not been a lot about 359 00:20:01,600 --> 00:20:05,240 Speaker 1: cry about it. The Republican outcry has been focused on 360 00:20:05,960 --> 00:20:10,120 Speaker 1: other things. And so yeah, I think that ultimately Congress 361 00:20:10,160 --> 00:20:13,520 Speaker 1: is going to start trying to hand Trump more tools, 362 00:20:13,760 --> 00:20:16,320 Speaker 1: which is a change in tune from you in a 363 00:20:16,359 --> 00:20:21,560 Speaker 1: couple of months ago when Republican senators were objecting implicitly 364 00:20:21,680 --> 00:20:26,880 Speaker 1: or explicitly to Trump's sort of capturing of teriff authorities 365 00:20:26,920 --> 00:20:30,280 Speaker 1: that had historically rested more with Congress. So we'll see, 366 00:20:30,359 --> 00:20:32,240 Speaker 1: remember the clock sticking in Congress, right, They want to 367 00:20:32,280 --> 00:20:35,200 Speaker 1: sign this thing on July fourth, Independence Day, of course, 368 00:20:35,240 --> 00:20:38,480 Speaker 1: so we can go from Liberation Day to Independence Day, 369 00:20:38,520 --> 00:20:41,880 Speaker 1: which is fined for the tariff deadline. So I think 370 00:20:41,960 --> 00:20:45,160 Speaker 1: you're going to see rhetorically a lot of continued sort 371 00:20:45,200 --> 00:20:49,359 Speaker 1: of chest beating from the President and from the Republican administration. 372 00:20:50,359 --> 00:20:53,400 Speaker 3: And I guess that's a positive for the President if 373 00:20:53,400 --> 00:20:56,480 Speaker 3: he actually gets some tools that are not sort of 374 00:20:56,560 --> 00:20:59,280 Speaker 3: questioned in the court and are legislated. And people have 375 00:20:59,359 --> 00:21:00,960 Speaker 3: said all along, if you really want to do these things, 376 00:21:00,960 --> 00:21:03,560 Speaker 3: you need to get Congress to legislate and give you 377 00:21:03,600 --> 00:21:06,960 Speaker 3: the power explicitly. But is it also a reflection that 378 00:21:07,480 --> 00:21:10,960 Speaker 3: the administration's not managing to do what it wanted to 379 00:21:10,960 --> 00:21:12,880 Speaker 3: do with the tools it had. Do you think they 380 00:21:12,880 --> 00:21:13,800 Speaker 3: feel like they're winning? 381 00:21:14,640 --> 00:21:20,560 Speaker 2: So? I think that the administration is very nimble and flexible, 382 00:21:20,680 --> 00:21:24,080 Speaker 2: and Trump himself be as a sense of how hard 383 00:21:24,119 --> 00:21:27,040 Speaker 2: to push the economy, and he tends to pull back 384 00:21:27,040 --> 00:21:30,280 Speaker 2: from the brink if things get really bad, as we 385 00:21:30,320 --> 00:21:34,240 Speaker 2: could see in April, because the administration, the nec Kevin 386 00:21:34,320 --> 00:21:37,760 Speaker 2: has it and stuff, doesn't do talk to CEOs of 387 00:21:38,119 --> 00:21:39,880 Speaker 2: companies in the real economy. 388 00:21:39,920 --> 00:21:41,040 Speaker 3: So I think that. 389 00:21:41,160 --> 00:21:45,040 Speaker 2: They know that there's danger in there in their moments 390 00:21:45,040 --> 00:21:50,200 Speaker 2: of diceiness. But right now, at this moment, and I 391 00:21:50,280 --> 00:21:53,360 Speaker 2: do think it's reasonable to talk in moments because these 392 00:21:53,400 --> 00:21:56,879 Speaker 2: things change day by day. At this moment, the hard 393 00:21:57,080 --> 00:22:01,520 Speaker 2: data are not causing them to want pulled back. And 394 00:22:01,600 --> 00:22:05,160 Speaker 2: this view may change this Friday with the non farm payrolls. 395 00:22:05,200 --> 00:22:09,760 Speaker 2: If non farm payrolls, for example, shows really steep drop, 396 00:22:10,119 --> 00:22:14,920 Speaker 2: then you would see Trump pouting a call of presidency immediately. 397 00:22:15,560 --> 00:22:19,880 Speaker 2: And personally, I think there has been the whole taco trade. 398 00:22:20,440 --> 00:22:24,120 Speaker 2: Trump always chickens out. I think Wall Street is too 399 00:22:24,320 --> 00:22:30,200 Speaker 2: complacent on peak tariff. Having passed, my own interpretation of 400 00:22:30,320 --> 00:22:32,959 Speaker 2: why there was a Geneva agreement between you Os and 401 00:22:33,040 --> 00:22:38,480 Speaker 2: China is that the CEOs, Walmart and Target were very convinsing. 402 00:22:38,600 --> 00:22:42,760 Speaker 2: The fear of empty shelves caused Trump to want to 403 00:22:42,800 --> 00:22:46,480 Speaker 2: continue this trade for now until August, which is the 404 00:22:46,600 --> 00:22:49,439 Speaker 2: end of this ninety day pause, to fill the shelf 405 00:22:49,520 --> 00:22:52,040 Speaker 2: of the US to make sure that we get past 406 00:22:52,119 --> 00:22:55,280 Speaker 2: the holiday season. And I think China would easily agree 407 00:22:55,280 --> 00:22:58,040 Speaker 2: to because when you think about a game theoretic way 408 00:22:58,080 --> 00:23:00,960 Speaker 2: of having a war, when both sides can agree the 409 00:23:01,000 --> 00:23:03,600 Speaker 2: stakes are too high, it's very easy to find a 410 00:23:03,600 --> 00:23:07,520 Speaker 2: low hanging fruit. Okay, we agree, but after this peak 411 00:23:07,640 --> 00:23:10,960 Speaker 2: shipping season is over, stakes are down again. They could 412 00:23:10,960 --> 00:23:15,000 Speaker 2: have another tariff for until all the way until next 413 00:23:15,040 --> 00:23:19,280 Speaker 2: March and then settle down once they're about to get 414 00:23:19,280 --> 00:23:20,560 Speaker 2: into peak shipping season. 415 00:23:20,720 --> 00:23:22,840 Speaker 3: And when you say peak, you mean that's Christmas season. 416 00:23:22,840 --> 00:23:24,600 Speaker 3: So you need to get all the toys on the shelves. 417 00:23:25,160 --> 00:23:30,360 Speaker 2: Yes, because empty shells are politically very unpopular, and so 418 00:23:30,440 --> 00:23:34,240 Speaker 2: I do not interpret the de escalation so far as 419 00:23:34,280 --> 00:23:38,760 Speaker 2: a taco trade. I actually would interpret as one of 420 00:23:38,800 --> 00:23:43,160 Speaker 2: the ebbs and tides of Trump's negotiation style. And what 421 00:23:43,200 --> 00:23:46,600 Speaker 2: we saw in Geneva is very uncharacteristic of him. It 422 00:23:46,720 --> 00:23:50,399 Speaker 2: is very uncharacteristic of him to immediately cave so soon. 423 00:23:51,000 --> 00:23:53,119 Speaker 2: I think what we saw is that he was pushed 424 00:23:53,119 --> 00:23:55,840 Speaker 2: to the brink, he pulled back, and then once things 425 00:23:55,840 --> 00:23:58,359 Speaker 2: settle in a couple of months, I think there's a 426 00:23:58,480 --> 00:24:03,760 Speaker 2: good chance that we'll see these China tariffs rise that again, 427 00:24:04,000 --> 00:24:04,720 Speaker 2: increase again. 428 00:24:05,480 --> 00:24:08,320 Speaker 3: Josh, it's interesting because you've got Anna's I think will 429 00:24:08,359 --> 00:24:10,879 Speaker 3: we talked about how the economic impact so far was 430 00:24:10,920 --> 00:24:14,080 Speaker 3: not necessarily as negative as people are thought, and that 431 00:24:14,160 --> 00:24:17,760 Speaker 3: has produced a sort of feeling in the administration potentially 432 00:24:17,880 --> 00:24:21,760 Speaker 3: that at least on the domestic front, things are not 433 00:24:22,080 --> 00:24:26,960 Speaker 3: going too badly, but internationally, you'd have to say the 434 00:24:27,000 --> 00:24:29,280 Speaker 3: rest of the world seems to be doing pretty well 435 00:24:29,560 --> 00:24:31,119 Speaker 3: so far. I mean, and we talked at the beginning, 436 00:24:31,160 --> 00:24:35,960 Speaker 3: there's no very few deals done, and that sort of 437 00:24:35,960 --> 00:24:38,480 Speaker 3: back and forth with the Chinese over whether or not 438 00:24:38,520 --> 00:24:41,320 Speaker 3: there would even be a call between President she and 439 00:24:41,400 --> 00:24:43,679 Speaker 3: Donald Trump seems to me kind of symbolic of the 440 00:24:43,680 --> 00:24:47,439 Speaker 3: fact that China seems to have the upper hand in 441 00:24:47,520 --> 00:24:50,800 Speaker 3: that particular conversation, and my colleagues in Beijing and Hong 442 00:24:50,880 --> 00:24:53,520 Speaker 3: Kong are absolutely convinced that she will not want to 443 00:24:53,560 --> 00:24:55,679 Speaker 3: do a call or be very reluctant to do a 444 00:24:55,720 --> 00:24:58,280 Speaker 3: call this week, because that's not the way the Chinese work. 445 00:24:58,280 --> 00:25:01,080 Speaker 3: They want to have everything nailed down before or they 446 00:25:01,119 --> 00:25:05,320 Speaker 3: do a call, So the optics of that can't be 447 00:25:05,359 --> 00:25:07,200 Speaker 3: comfortable for the administration. 448 00:25:07,840 --> 00:25:11,480 Speaker 1: Yeah, the Chinese have calculated that they have the luxury 449 00:25:11,480 --> 00:25:15,439 Speaker 1: of patients here and the Americans are betting that the 450 00:25:15,480 --> 00:25:17,960 Speaker 1: American market is enough of a carrot on the stick 451 00:25:18,000 --> 00:25:22,159 Speaker 1: that eventually those strategies will converge. But I agree with that, 452 00:25:22,240 --> 00:25:25,000 Speaker 1: and right now we're not primed for a long time 453 00:25:25,560 --> 00:25:28,280 Speaker 1: truce anytime soon. I think we'll see sort of fits 454 00:25:28,800 --> 00:25:31,280 Speaker 1: and starts on this. And remember we all had a 455 00:25:31,280 --> 00:25:33,240 Speaker 1: panic about a month ago when Trump exampted a bunch 456 00:25:33,280 --> 00:25:36,879 Speaker 1: of consumer electronics from those Chinese tariffs. That's only because 457 00:25:36,880 --> 00:25:38,879 Speaker 1: he wants to hit them with another tariff, and so 458 00:25:39,000 --> 00:25:41,639 Speaker 1: in the meantime he could announce his two three to 459 00:25:41,640 --> 00:25:46,760 Speaker 1: two tariff on iPhones, on computer monitors, on everything. With 460 00:25:46,800 --> 00:25:50,040 Speaker 1: the semiconductor chip in it that hits China in a 461 00:25:50,080 --> 00:25:53,439 Speaker 1: different way. So you know, there are multiple fronts on 462 00:25:53,480 --> 00:25:57,160 Speaker 1: this trade war, where each settles on an e given month, 463 00:25:57,200 --> 00:26:00,960 Speaker 1: I think remains unclear. I totally agree that the view 464 00:26:01,000 --> 00:26:04,440 Speaker 1: of the retailers and the political impact that empty shelves 465 00:26:04,960 --> 00:26:06,679 Speaker 1: would have on it. And Trump got a lot of 466 00:26:06,680 --> 00:26:08,920 Speaker 1: blowback for saying like, maybe kids will have two dollars 467 00:26:09,000 --> 00:26:10,879 Speaker 1: instead of fifteen dollars, and you know, you can have 468 00:26:10,880 --> 00:26:14,080 Speaker 1: one pencil instead of fifty pencils. It's kind of that 469 00:26:14,240 --> 00:26:16,000 Speaker 1: he did instick Landing on that one, and he's got 470 00:26:16,000 --> 00:26:17,880 Speaker 1: blowback on it, so I think he will be sensitive 471 00:26:17,880 --> 00:26:20,560 Speaker 1: to that. But I also think that when it comes 472 00:26:20,600 --> 00:26:24,360 Speaker 1: to appetite among lawmakers, who have of course been very 473 00:26:24,359 --> 00:26:27,680 Speaker 1: deferential to Trump, to say the least, lawmakers in Washington 474 00:26:27,760 --> 00:26:31,400 Speaker 1: are keen to reset the relationship with China on both 475 00:26:31,440 --> 00:26:34,240 Speaker 1: sides of the aisle, Trump has a lot more leash 476 00:26:34,400 --> 00:26:36,280 Speaker 1: when it comes to a fight with China that he 477 00:26:36,320 --> 00:26:38,400 Speaker 1: does with the rest of the world. So I think 478 00:26:38,440 --> 00:26:40,760 Speaker 1: we continue to see China on a separate track from 479 00:26:40,760 --> 00:26:41,840 Speaker 1: the rest of his trade front. 480 00:26:42,640 --> 00:26:44,720 Speaker 3: So I can't help thinking that we will have to 481 00:26:44,800 --> 00:26:48,760 Speaker 3: take stock of the trade more many more times before 482 00:26:48,800 --> 00:26:51,520 Speaker 3: we're done. But I feel like we have some interesting 483 00:26:51,560 --> 00:26:55,000 Speaker 3: takeaways on just where the economy is, even if we 484 00:26:55,080 --> 00:26:57,640 Speaker 3: do think there's a lot more coming down the track. 485 00:26:57,720 --> 00:27:00,879 Speaker 3: Josh Waen Grove, Ana Wong, thank you so much, thank you, 486 00:27:01,280 --> 00:27:17,800 Speaker 3: thank you, thank you for listening to Trumpanomics from Bloomberg. 487 00:27:17,880 --> 00:27:20,240 Speaker 3: It was hosted by me Stephanie Flanders, and I was 488 00:27:20,320 --> 00:27:23,560 Speaker 3: joined this week by our chief US economist, Anna Wong 489 00:27:23,720 --> 00:27:28,240 Speaker 3: and senior White House reporter Josh Wingrove. Trumpomics is produced 490 00:27:28,240 --> 00:27:31,120 Speaker 3: by Summer Sadi and Moses and Dam with help from 491 00:27:31,200 --> 00:27:34,720 Speaker 3: Chris mart Lou and Amy Keene. Special thanks to Rachel 492 00:27:34,800 --> 00:27:39,720 Speaker 3: Lewis Chrisky. Sound design is by Blake Maples and Brendan Francis. 493 00:27:39,760 --> 00:27:43,680 Speaker 3: Newnham is our executive producer. To help others find Trumpomics, 494 00:27:43,680 --> 00:27:46,200 Speaker 3: please rate it and review it wherever you listen.