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Speaker 1: Welcome to the Bloomberg Surveillance Podcast and I'm Tom Keene

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Speaker 1: Jay Ley. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg here

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Speaker 1: in New York. On plaice to say that Carl Weinberg

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Speaker 1: joins US now high Frequency Economics chief economist. Good money

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Speaker 1: to cal Good morning John, So help us get a

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Speaker 1: read on the global economy when there is such a

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Speaker 1: big debate right now as to what is happening Your

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Speaker 1: thoughts count Well, there's not really a debate the US.

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Speaker 1: The FED is watching, but the US economy is doing

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Speaker 1: quite well, thank you. The employment number on Friday was,

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Speaker 1: as you called it, a freaky number and probably doesn't

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Speaker 1: tell us what's really going on in the labor market.

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Speaker 1: It's not corroborated by other information, so interest rates are appropriate,

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Speaker 1: as the FED chairman said on television US Night, and

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Speaker 1: in the US is doing okay. Um. In Europe it's

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Speaker 1: not so okay. And Mario Dragi told us last week

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Speaker 1: that the e c b I used the outlook for

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Speaker 1: Europe as being a lot worse than they thought even

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Speaker 1: a few months ago, and I think that's accurate. The

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Speaker 1: industrial production number from Germany this morning certainly confirmed that story.

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Speaker 1: In Japan not so good, but then again, it's never

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Speaker 1: so good in Japan, as you'd expect in an economy

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Speaker 1: where the population is going down. In England, well, you

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Speaker 1: have the status accent for the comment on the UK economy,

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Speaker 1: but until you can tell me how Brexit's going to

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Speaker 1: work out, I can only expect the worst the accent,

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Speaker 1: because I've got no idea raither. Where there is a

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Speaker 1: big debate is China, and you've been much more optimistic

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Speaker 1: than most who have spoken to us. Why Well, you know,

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Speaker 1: first of all, China has been growing at about six

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Speaker 1: and a half percent for four years now, and it's

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Speaker 1: it's slowing down very very very gradually, but it's been

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Speaker 1: within a range that has been pretty steady. And we

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Speaker 1: look at the stimulus that's come into China just in

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Speaker 1: the last few months, the fiscal stimulus, the cut and

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Speaker 1: the value added tax rates, the monetary stimulus that cut

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Speaker 1: in the bank reserves ratio, and we see that's starting

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Speaker 1: to appear now in the monetary data. I think the

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Speaker 1: policy mixes being set appropriate for an economy that wants

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Speaker 1: to grow faster and cyclically. China has been in a

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Speaker 1: slowdown now for seven years. It's time for a cyclical recovery.

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Speaker 1: The excesses that caused the economy to slow have been purged,

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Speaker 1: I should think by now, and I'm looking forward to

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Speaker 1: being actually a better year than eighteen for China. How

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Speaker 1: different is the growth scam we're going through at the

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Speaker 1: moment with China compared to early Well, you know, who

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Speaker 1: do you have a growth scare? Because I don't have

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Speaker 1: a growth of people people look at include there is

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Speaker 1: a bit of a growth scam in China at the moment.

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Speaker 1: But again we're looking at steady right now. In terms

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Speaker 1: of GDP, We're looking at industrial production numbers probably looking

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Speaker 1: a little bit stronger right now, the retail sales looking

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Speaker 1: a little bit stronger, and most importantly, aggregate lending to

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Speaker 1: the economy has started to chirp up in the last

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Speaker 1: few months, and to me that's a really positive sign.

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Speaker 1: The reforms have pretty much done their thing by now.

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Speaker 1: So six point six percent the operative number. Where are

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Speaker 1: you heading on China? Well, you know, there's a demographic

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Speaker 1: dividend out there that by itself should probably bring GDP

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Speaker 1: growth to about five cent or thereabout. So they just

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Speaker 1: start at five. Yeah, just just for bringing people from

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Speaker 1: the farm into the city, moving twenty five million people

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Speaker 1: a year into an urban population of about six hundred

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Speaker 1: million persons. So that's their starting point and then the

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Speaker 1: rest is up to productivity. And what we're seeing right

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Speaker 1: now is a huge publicly subsidized, to be fair effort

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Speaker 1: to make China and the world's leading industrial power made

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Speaker 1: in China is an enormous program. It's so much more

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Speaker 1: important than short term trade issues, and this is the

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Speaker 1: key to productivity growth. This is the key to moving

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Speaker 1: the next step up the ladder in terms of development,

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Speaker 1: in terms of being a higher level of manufacturing than

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Speaker 1: just assembly. So everything hinges on. That says more important

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Speaker 1: the short term tride issues, but they are a part

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Speaker 1: of the short term tride issues for the United States

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Speaker 1: of America. How is this a feate just still in

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Speaker 1: the tried negotiations count Well, I think that first of all,

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Speaker 1: that the US China trade spat and an impact on

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Speaker 1: China I think is overstated by a lot of people,

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Speaker 1: and also on the United States as well. I mean,

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Speaker 1: the United States is only about fifteen percent of the

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Speaker 1: world economy right now, and China has lots of people

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Speaker 1: that can sell stuff too. If the US wants to

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Speaker 1: tariff their goods, well there's the whole rest of the

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Speaker 1: world to sell things too. So I don't think that

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Speaker 1: that the trade spat is directly behind China's slow economic growth.

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Speaker 1: I think it's it's more secular and cyclical rather than

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Speaker 1: induced by the current trad spat. I mentioned with Nick

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Speaker 1: Larady earlier today the Brooking Study, which is a fabulous

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Speaker 1: paper put out by Brookings suggesting the actual growth, particularly

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Speaker 1: the industrial growth, may be mismessered measured, it may be lower.

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Speaker 1: But the major issue of that debate is whether we

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Speaker 1: have a hard landing. You and I were younger when

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Speaker 1: we first started talking about a hard landing in China.

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Speaker 1: How do you define a hard landing and are we

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Speaker 1: anywhere near that? Well, I think rather than as being

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Speaker 1: on a hard landing or an approached landing, I think

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Speaker 1: of China's economy as being at turbulent flight at altitude,

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Speaker 1: and I think that that's typical of emerging economies. And

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Speaker 1: we want to remember that China is very much an

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Speaker 1: emerging economy. It's not an advanced economy. So I think

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Speaker 1: that this kind of bumping, this short term ups and downs,

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Speaker 1: that's what we should expect. And I think maybe part

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Speaker 1: of the issue in the markets is that we're being

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Speaker 1: looked at. China's being looked at and studied by people

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Speaker 1: whore and used to looking at emerging markets. It's a

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Speaker 1: much bumpy ride with this. Carl Weinberg, bank analyst with

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Speaker 1: high frequency economics, I would love to know, with your

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Speaker 1: encyclopedic knowledge of Europe and the ballots of Greece and

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Speaker 1: all that, how does an economist like you think the

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Speaker 1: banking system of the EU will clear? How did they

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Speaker 1: get to where they need to be well that they

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Speaker 1: need more capital and or they need relief from capital

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Speaker 1: adequacy requirements. And we look at the bank lending figures

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Speaker 1: for Europe and Mario Draggy finally admitted in his press

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Speaker 1: conference last week that bank lending had slowed in the

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Speaker 1: latest figures. It's actually been flat at about two and

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Speaker 1: a half percent in aggregate, and that's not enough to

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Speaker 1: accommodate the kind of GDP growth that Europe wants to see,

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Speaker 1: which is about four and a half percent in nominal terms.

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Speaker 1: So banks have to start lending more. And it's not

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Speaker 1: for a shortage of reserves. It's got to all be

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Speaker 1: about an inadequacy of capital to support new lending. So

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Speaker 1: we need relief on the policy side, and we need

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Speaker 1: new capital. But but if Deutsche Bank, you know, I

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Speaker 1: don't need you to do the cell side act here.

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Speaker 1: But if Deutsche Bank merges or whatever, by definition, it's

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Speaker 1: got to be a cash call on somebody. Well that's

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Speaker 1: the answers. A cash call is going to be in

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Speaker 1: the government. Well, that's certainly true. Deutsche is a troubled institution,

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Speaker 1: but I think that Deutsche's troubles are more company specific

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Speaker 1: than they are industry specific. They're made worse by what's

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Speaker 1: happening in the global environment. And certainly a bank that

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Speaker 1: can raise money from the market at negative interest rates

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Speaker 1: doesn't have to write a lot of loans in order

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Speaker 1: to be able to make a profit. It can it

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Speaker 1: can write very few loans if the macroeconomic problem I

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Speaker 1: think is separate from the problem of the specific institution

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Speaker 1: of Deutsche Bank. Carol Weinberg, thank you so much. Bank analyst,

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Speaker 1: Chief Frequency Economics, Thank you so much. This is without question,

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Speaker 1: the interview of the day on China. Nicholas Lardie is

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Speaker 1: with the Peterson Institute. He's one of the has been

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Speaker 1: one of the great jewels of analysis of China within

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Speaker 1: our international relations that we're thrilled that he visits us

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Speaker 1: in New York today. You have a new book out, uh,

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Speaker 1: and they're always highly readable. They're they're they're concise, they're

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Speaker 1: really on top of the topic. The state strikes back

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Speaker 1: the end of economic reform in China. We've heard this

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Speaker 1: from others. How is she's striking back against the Chinese people. Well,

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Speaker 1: he's clamping down on non governmental organizations, he's increasing the

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Speaker 1: role of the party. He's there's more and more social control.

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Speaker 1: So it's a full court press to expand the role

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Speaker 1: of the party. Is capitalism done in China or could

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Speaker 1: there be a new amended capitalism. I think that's an

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Speaker 1: open question. Uh. At the end of economic reform in

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Speaker 1: China in the book title has a question mark at

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Speaker 1: the end, So I do leave it open. I think

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Speaker 1: you could go back to more market oriented reform, maybe

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Speaker 1: not under shij Ping, but possibly under somebody in the future.

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Speaker 1: We've had more and more guests come on this program

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Speaker 1: on radio, end on TV for that matter, and say

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Speaker 1: that President she is increasingly under pressure, is he, and

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Speaker 1: if he is, what's changed? Well? I think he is

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Speaker 1: under some pressure, although it's very very difficult to measure

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Speaker 1: from the outside. I think he's under pressure because of

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Speaker 1: his effort to change the constitution to allow him to

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Speaker 1: stay in office indefinitely. He's under some pressure from academics

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Speaker 1: who don't like the increase control on their you know

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Speaker 1: what books they can use in their classes. Uh, He's

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Speaker 1: under pressure pushed back from some of the minorities that

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Speaker 1: are being suppressed in China, particularly the Muslims. So there

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Speaker 1: are some sources of opposition, very difficult to judge, however,

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Speaker 1: how serious they are in the aggregate, difficult to judge

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Speaker 1: how serious they aren't. Difficult, of course, even more so

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Speaker 1: to judge whether it changes strategy of the president. What

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Speaker 1: if you read on that. I don't think he's going

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Speaker 1: to change strategy until the growth slows down further. I

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Speaker 1: think the state oriented development that they've been pursuing has

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Speaker 1: led to slower and slower growth, and at some point

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Speaker 1: he's going to recognize that the ability of the party

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Speaker 1: to stay in power is going to be undermined because

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Speaker 1: it has state and power primarily by improving living standards,

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Speaker 1: rising wages, improvements in the social safety net, and as

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Speaker 1: growth slows down UH, the ability to deliver on those

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Speaker 1: fronts is undermined. The degree to which growth has slowed

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Speaker 1: down is something of debate. Still on this program almost

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Speaker 1: every single morning, seemingly, Nick, you'll read on the rebalancing

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Speaker 1: act of the Chinese economy into what degree we have

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Speaker 1: slowed down at the moment? What is it? Well, there

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Speaker 1: has been a lot of rebalancing. Consumption is now the

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Speaker 1: major source of growth in the economy. It's no longer

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Speaker 1: exports uh an investment. UH. In the year just ended,

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Speaker 1: about three quarters of all the growth was driven by

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Speaker 1: increases in consumption, So that structure of demand has changed,

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Speaker 1: and of course the growth has slowed down. I think

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Speaker 1: the slowdown is primarily because resources have been allocated UH inefficiently.

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Speaker 1: About of all state companies are losing money, and then

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Speaker 1: none of them, almost none of them go out of business.

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Speaker 1: They just borrow more money from the banks and carry on.

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Speaker 1: So what's the best practice for the United States of

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Speaker 1: America right now? Within the this is what I found

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Speaker 1: it amazing today how Carl winber and you are sort

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Speaker 1: of you look at the whole trade debate is tangential

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Speaker 1: to what's really going on in China. What's the best

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Speaker 1: practice for this administration? Well, I think the best practice

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Speaker 1: is to have more concrete objectives. For example, instead of

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Speaker 1: this theological argument about technology transfer, the Audit require the

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Speaker 1: Chinese to get rid of joint venture requirements in those

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Speaker 1: domains where they are still in effect. If you can

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Speaker 1: operate as a wholly owned uh foreign firm in China,

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Speaker 1: then you don't have to transfer your technology to a

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Speaker 1: foreign partner. So we had to we ought to be

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Speaker 1: asking for things that are very concrete and that also

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Speaker 1: so just say stop to well about all the investment

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Speaker 1: going into China now is in the form of holy

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Speaker 1: foreign owned That's a huge change over the last twenty

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Speaker 1: five years. But there's still a big chunk left where

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Speaker 1: you have to have a j V and that's where

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Speaker 1: the technology transfer, that's where a great deal of it occurs.

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Speaker 1: If you don't have to have a j V, then

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Speaker 1: you can tell if a company can take whatever steps

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Speaker 1: it wants to preserve its technology, the same thing they

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Speaker 1: might do an India or Brazil or any other emergency

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Speaker 1: very quickly. How do you respond to the uproar over wallway?

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Speaker 1: Very complicated. I happen to think it's a very good company.

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Speaker 1: It's a private company. Obviously the state supports it in

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Speaker 1: this current crisis, but they have a tremendous record of

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Speaker 1: research and development, developing new products and controlling costs. I

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Speaker 1: still think they're likely to be the dominant supplier of

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Speaker 1: the infrastructure for five G globally. We are out of time.

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Speaker 1: Nick Larney, thank you so much, greatly appreciate it, and

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Speaker 1: of course look for his new book as well. The

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Speaker 1: State strikes back the end of economic reform in China.

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Speaker 1: Question mark that from Nick Larney of the Peterson Institute.

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Speaker 1: Let us turn to Boeing and try to have a

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Speaker 1: direct conversation about where we stand after these two plane crashes.

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Speaker 1: Chris Bryant with us, He and our David Fickling are

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Speaker 1: more than informed on what happened with Lion a number

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Speaker 1: of months ago, and now with the Ethiopian Airlines. I

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Speaker 1: do want to point out our guy Johnson mentioning forcefully

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Speaker 1: this morning. Ethiopian Airlines is a first class effort from

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Speaker 1: what Guy has learned over the years. Chris Bryant in Berlin, Chris,

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Speaker 1: what do we know right now? Well, the latest this

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Speaker 1: morning is that um the black box has been recovered

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Speaker 1: from the crash site. So I'm hopeful and I think

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Speaker 1: it's very important that we get information as soon as

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Speaker 1: possible about what exactly caused this this plane to crash.

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Speaker 1: That were there were obvious similarities between what happened in

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Speaker 1: Ethiopia over the weekend and what happened to a Lion

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Speaker 1: add jet in Indonesia at last year. Both the same

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Speaker 1: type of Boeing aircraft crashed soon after takeoff after the

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Speaker 1: pilot called in to say had to return to base.

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Speaker 1: But of course there's so many unanswered questions here and

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Speaker 1: and this makes me a little bit uncomfortable because you know,

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Speaker 1: there's obviously the market is indicating that this is a

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Speaker 1: very serious problem for Boeing. The shares down about ape

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Speaker 1: this morning. But we still don't know if if, in fact,

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Speaker 1: a Boeing design floor contributed to this um UH latest accident,

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Speaker 1: or something else entirely. So, Chris, is far too early

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Speaker 1: to draw any conclusions with any conviction whatsoever as to

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Speaker 1: what caused the crash of the Ethiopian Airlines story over

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Speaker 1: the weekend. But let's talk about the tragic incident of

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Speaker 1: Line Air What do we learn from that incident and

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Speaker 1: what did Boeing do subsequently? Well, Um, there was a

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Speaker 1: lot of very good reporting from the New York Times,

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Speaker 1: from Bloomberg and the Wall Street Journal in the wake

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Speaker 1: of that crash that highlighted the new software that's on

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Speaker 1: this aircraft, and it it's related to the new engines

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Speaker 1: that the Boeing seven three seven Max have. These engines

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Speaker 1: are very fuel efficient, they helped the plane to fly

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Speaker 1: longer distances, and that's made the aircraft are very strong

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Speaker 1: selling prospect for the company. But they also potentially introduced

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Speaker 1: some extra instability. Uh and as a result, this aircraft

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Speaker 1: apparently has software on board that essentially can adjust the

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Speaker 1: nose of the aircraft if the sensors indicate that that's necessary.

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Speaker 1: In the case of the Lion air Jet, it may

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Speaker 1: be that the nose of the aircraft was forced down

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Speaker 1: by essentially an erroneous um data arriving into the system,

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Speaker 1: and that kept happening and the pilot eventually lost control. Now, um,

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Speaker 1: it's very easy therefore to sort of come up with

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Speaker 1: the theory, oh, that Boeing software is to blame. But

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Speaker 1: Boeing said in the wake of that crash that pilots

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Speaker 1: should know if they're getting some kind of automated nose

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Speaker 1: down uh call from from the aircraft how to decide,

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Speaker 1: they should know how to disable that. And therefore, you know,

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Speaker 1: one shouldn't again jump to conclusions that this software was

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Speaker 1: somehow to blame. There were lots of conflicting comments from pilots.

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Speaker 1: Did we know about it, did we not know about it?

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Speaker 1: Should we know more about it? I think in the

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Speaker 1: wake of that accident, there was a feeling well, yes,

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Speaker 1: of course, the more information pilots have the better, and

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Speaker 1: there was a feeling too that Boeing would in in

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Speaker 1: due course perhaps um, you know, have some sort of

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Speaker 1: software update to that system or manderstanding is that hasn't

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Speaker 1: happened yet, and as I said, it remains to be

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Speaker 1: seen whether that had anything to do at all with

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Speaker 1: the crash over the weekend. Well, the knee jerk reaction

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Speaker 1: is just to ask a very basic question, Chris, whether

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Speaker 1: it's system failure or human error. And Chris, from the

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Speaker 1: story you're telling, it's very difficult to answer those questions

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Speaker 1: still for Lion Air because there's something unique about the

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Speaker 1: software to the seven thirty seven max which leads to

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Speaker 1: human error. That's a story that some people are pushing. Chris,

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Speaker 1: would that be the right approach to all of this? Well,

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Speaker 1: you know, the investigation in Indonesia is ongoing. There were

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Speaker 1: some preliminary filings there that highlighted, um, you know, some

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Speaker 1: of the safety aspects of that airline, combined with the uh,

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Speaker 1: you know, the new software on the aircraft in the

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Speaker 1: case of the line, are incident that the aircraft had

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Speaker 1: had you know, maintenance problems in previous days, but had

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Speaker 1: carried on flying. That wasn't the case, surprise to understanding

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Speaker 1: in Ethiopia, So differences there. So, um, you know, what

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Speaker 1: we really need here is facts and facts as quickly

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Speaker 1: as possible. That can obviously be a very very difficult

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Speaker 1: in the wake of a crash, but hopefully now with

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Speaker 1: Boeing investigators on the way there, with the f a

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Speaker 1: A monitoring this closely. Uh, you know, there's utmost pressure

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Speaker 1: from every conceivable stakeholder here four answers as soon as possible,

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Speaker 1: because of course you have passengers who are asking themselves

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Speaker 1: this morning, or is it safe for me to fly

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Speaker 1: on this aircraft? And you know, it's a very difficult

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Speaker 1: question to answer because the fact is that this sort

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Speaker 1: of thing does not happen in global aviation. I mean,

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Speaker 1: you don't have the crash of brand new aircraft type

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Speaker 1: in the space of five months. I certainly can't remember um,

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Speaker 1: something like that happening. And so of course people are

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Speaker 1: answering questions, and let's ask another question. Let's ask to

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Speaker 1: the importance of the seven thirty seven Max to Boeing

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Speaker 1: and the very real prospect of a blanket global grounding

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Speaker 1: of the seventh thirty seven. Well, the seven thirty seven

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Speaker 1: Max is absolutely vital to to Boeing's fortunes. I mean,

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Speaker 1: as I said, it's um, the new version of you know,

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Speaker 1: the workhorse of of Boeing's fleet has about five thousand

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Speaker 1: orders which fill Boeing's production through three huge source of

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Speaker 1: profit and cash flow. And it's a big reason why

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Speaker 1: Boeing shares were um, you know, until this morning, near

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Speaker 1: record high. Uh. You know, Boeing uh probably indicated down

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Speaker 1: about eight percent nine percent this morning, which would wipe

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Speaker 1: about twenty billion off its market capitalization. But that gives

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Speaker 1: you an indication of quite how high Boeing's market cap

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Speaker 1: has has written in recent years on the hopes that

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Speaker 1: this plane was going to deliver Chris, what if I'm

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Speaker 1: fastenating here before we let you go? Is is? You know?

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Speaker 1: John Astro has written on this in the air current,

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Speaker 1: as you mentioned, the Times Journal, Bloomberg. Everyone's on top

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Speaker 1: of this because all of our listeners fly. The bottom

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Speaker 1: line is this is supposed to be a hyper efficient

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Speaker 1: airline package with the engines moved forward from the wing

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Speaker 1: X number of inches feet whatever it is. And am

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Speaker 1: I right to say there's a lot of new technology

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Speaker 1: off that decision that the seven thirty seven Max is

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Speaker 1: not just an amended seven thirty seven, but it's really

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Speaker 1: a whole new airplane, isn't it? Well? Yes and no.

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Speaker 1: I mean there's obviously a lot of commonalities between the

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Speaker 1: plane and the original seven thirty seven. I think what's

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Speaker 1: what's new? Of course of the engines and then potentially

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Speaker 1: some of the software that relates to those Very clearly,

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Speaker 1: you know, this was an aircraft all about improving fuel efficiency,

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Speaker 1: improving you know, the performance for the for the customer

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Speaker 1: to meet you know, the competitive threat of of Airbus

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Speaker 1: is a three twenty NA. Both these aircraft have thousands

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Speaker 1: of orders and you know, so yes, it's a a

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Speaker 1: new type of aircraft in that in that sense, but

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Speaker 1: not like, for example, the Boeing seven eight seven, which

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Speaker 1: was a clean sheet production, which you know Boeing spent

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Speaker 1: billions and billions upon the very The purpose of this

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Speaker 1: this development was to keep cost down, uh to not

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Speaker 1: um you know, spend billions on a on a high

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Speaker 1: risk new project, but keep as much as possible from

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Speaker 1: the previous project. Chris Bryan, thank you. We look forward

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Speaker 1: to uh your next writing on this. John Farrell, there's

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Speaker 1: the betting in England on football? What's the betting right now?

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Speaker 1: That man? You are Arsenal catch Tottenham? That sophisticating questions

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Speaker 1: that's quite interesting for the top four and the Spurs

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Speaker 1: are well there's the odds they're embedding on English football,

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Speaker 1: believe it or not. There are odds on a China

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Speaker 1: tariff deal. Henrietta Trees joins us doing economic research for VEDA.

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Speaker 1: We're thrilled that she could join us this morning from

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Speaker 1: New Orleans. Just explain your China tariffs odds tracker right

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Speaker 1: now if you're having a good cup of coffee with

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Speaker 1: the President at marl Lago, Henrietta, what would your odds

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Speaker 1: tractor tell the president right now? Tracker would tell the

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Speaker 1: President that the street very much wants to see the

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Speaker 1: tariffs come off. As you know, we've got two d

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Speaker 1: and fifty billions some odd tariffs on Chinese imports and um.

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Speaker 1: The administration hasn't taken any tariffs off of any nations

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Speaker 1: at all since Trump took office in two thousand seventeen,

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Speaker 1: So the stock market is wildly sestimistic. I'd stay with

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Speaker 1: like of investors we speak with, expecting for the TIFFs

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Speaker 1: to come off whenever President Trump the president she had

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Speaker 1: their signing ceremony. But folks in d C trade circles

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Speaker 1: and those familiar with the talks indicate that at a minimum,

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Speaker 1: rather at best, we'd probably see a little portion, a

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Speaker 1: small piece of the tariffs come off, not nearly the

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Speaker 1: overarching basket that the streets looking for. What I love

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Speaker 1: about your research, Veda, is you use the word enforcement.

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Speaker 1: John Ferrell, my colleague has mentioned this time after time

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Speaker 1: after time. Is there any indication of enforcement with any

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Speaker 1: kind of face saving agreement? There's a couple of things

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Speaker 1: that USTR Lifeheiser the main negotiator here who walks us

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Speaker 1: through a couple of ideas. Um, anything is going to

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Speaker 1: be over a specific time horizon. That's mandatory, and I

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Speaker 1: think I think the street overlooks that quite a bit.

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Speaker 1: Um enforcement the way in shaping up right now is

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Speaker 1: going to have sort of a three tiered structure where

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Speaker 1: once a month, the low level trade negotiators get together

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Speaker 1: hash out any issues that the business community might have

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Speaker 1: and try to come up with a solution, and then uh,

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Speaker 1: two months after that, they'll have the second highest trade

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Speaker 1: ministers get together and see whether there's been any progress.

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Speaker 1: And then every six months on a go forward basis

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Speaker 1: likely for you know, at least the duration the President

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Speaker 1: Trump's term, USTR Lifeiser and his counterpart in China Luca

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Speaker 1: are going to get together and see whether or not

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Speaker 1: there's been any progress made on any I PECEFT issues

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Speaker 1: or enforcement mechanisms, forced technology transfer mechanisms, and if there

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Speaker 1: has not been suitable progress made, they will flap more

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Speaker 1: tariffs on China, and so will they speak a two

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Speaker 1: way enforcement mechanism or a one way. Right now, the

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Speaker 1: US is looking exclusively for a one way mechanism in

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Speaker 1: China is essentially throwing President Trump's words right back in

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Speaker 1: his face and saying, hey, we want fair reciprocal trade.

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Speaker 1: That means that if you guys do something us, we

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Speaker 1: want to be able to do something back to you.

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Speaker 1: Are they going to get that? I sincerely doubt it

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Speaker 1: Isn't that going to hold up the whole thing. I

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Speaker 1: would argue that it has held up the whole thing.

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Speaker 1: We've been here for a year now, we're supposed to

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Speaker 1: get a deal back in December, that we're just get

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Speaker 1: a deal in January, and now here we are all

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Speaker 1: in March. You're like a breath of fresh air on

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Speaker 1: a Monday morning. Henry, can you provide an English what

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Speaker 1: John Farrell and I should look for in the next

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Speaker 1: ten days on our vaunted trade negotiations. You know what

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Speaker 1: I want to see really is some trial balloons. I

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Speaker 1: want to see the administration in China throw out some idea. UM.

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Speaker 1: What I see historically is that when you've got a

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Speaker 1: deal that's really percolating, you start to throw ideas out

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Speaker 1: so you can sort of um so six years, three years,

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Speaker 1: two years for um any kind of joint venture ownership

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Speaker 1: enquirement levels, things like that, just just rough numbers. How

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Speaker 1: many tons of soybeans are you going to buy? Give

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Speaker 1: me a rough estimate, you know, and you're not to

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Speaker 1: be clear, you're not seeing that right now, correct, which

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Speaker 1: is why we said last week. You know, it doesn't

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Speaker 1: look like they're going to make this moral ago meeting

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Speaker 1: in late March. Well, we look forward John and I

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Speaker 1: to our next road trip to New Orleans to meeting

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Speaker 1: with you in the French Quarter and do it. Hey,

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Speaker 1: come on down we should You know that that was great.

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Speaker 1: I mean, Henrietta Treys the charmer for folks is are

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Speaker 1: just absolute straight talk on Beltway like the blather. Thanks

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Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

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Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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Speaker 1: you prefer. I'm on Twitter at Tom Keene before the podcast.

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio