1 00:00:10,760 --> 00:00:14,080 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:14,120 --> 00:00:16,360 Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway. 3 00:00:16,680 --> 00:00:20,200 Speaker 1: Tracy, here's something that I've thought about that's been interesting 4 00:00:20,239 --> 00:00:23,759 Speaker 1: for a few years. The Trump administration obviously sort of 5 00:00:23,800 --> 00:00:28,479 Speaker 1: took this hawkish line on China, introduced the tariffs on 6 00:00:28,600 --> 00:00:32,120 Speaker 1: a lot of Chinese exports to the US, and then 7 00:00:32,400 --> 00:00:36,080 Speaker 1: when the Biden administration took over, it kind of seems 8 00:00:36,120 --> 00:00:38,839 Speaker 1: like we basically got continuity on that front. There was 9 00:00:38,880 --> 00:00:41,880 Speaker 1: no roll back, yeah, anything, maybe some of the screws 10 00:00:41,880 --> 00:00:42,920 Speaker 1: have been tightened even further. 11 00:00:43,040 --> 00:00:45,120 Speaker 2: I think that's exactly right, and it's kind of funny, 12 00:00:45,159 --> 00:00:47,600 Speaker 2: as you mentioned that it's flown a little bit under 13 00:00:47,760 --> 00:00:51,440 Speaker 2: the radar. And I'm thinking back to Trump's statement trade 14 00:00:51,440 --> 00:00:54,600 Speaker 2: wars are good and easy to yeah, And I mean 15 00:00:54,800 --> 00:00:57,680 Speaker 2: he got a lot of flak for that, probably rightfully so. 16 00:00:58,000 --> 00:01:00,600 Speaker 2: But if you think about what's been happening over the 17 00:01:00,640 --> 00:01:03,200 Speaker 2: past few years, like it seems like the US is 18 00:01:03,320 --> 00:01:07,440 Speaker 2: kind of winning the trade war against China in some respects. 19 00:01:07,480 --> 00:01:11,040 Speaker 2: I mean, the US economy outperforming much of the rest 20 00:01:11,040 --> 00:01:13,120 Speaker 2: of the world. I think GDP growth was something like 21 00:01:13,160 --> 00:01:16,920 Speaker 2: three percent in twenty twenty three. China's GDP growth is 22 00:01:17,000 --> 00:01:19,520 Speaker 2: still higher, I believe it was at five percent, but 23 00:01:19,560 --> 00:01:21,840 Speaker 2: it's slowing a lot. And if you look at what's 24 00:01:21,840 --> 00:01:24,120 Speaker 2: going on with the economy right now, it seems like 25 00:01:24,200 --> 00:01:26,119 Speaker 2: it is really struggling in various ways. 26 00:01:26,480 --> 00:01:28,200 Speaker 1: It's interesting that they're winning. 27 00:01:28,560 --> 00:01:29,959 Speaker 3: I hadn't really winning. 28 00:01:30,040 --> 00:01:31,639 Speaker 2: Might be strong, but like. 29 00:01:31,840 --> 00:01:34,240 Speaker 1: Well, our country is clearly doing better. Yeah, at least too. 30 00:01:34,440 --> 00:01:38,200 Speaker 1: On the other hand, China clearly has a handful of 31 00:01:38,240 --> 00:01:43,400 Speaker 1: industrial powerhouses that are creating anxiety for legacy industrial powerhouses 32 00:01:43,720 --> 00:01:46,759 Speaker 1: in the US and Europe. And we can say that 33 00:01:46,880 --> 00:01:50,560 Speaker 1: clearly when it comes to ev first legacy automakers. We 34 00:01:50,640 --> 00:01:53,560 Speaker 1: can look at, you know, the rising number of conversations 35 00:01:53,600 --> 00:01:56,400 Speaker 1: like a Boeing is faltering, will Comac and the CM 36 00:01:56,440 --> 00:02:00,320 Speaker 1: one nine eventually takes significant market share and commercial eers. 37 00:02:00,600 --> 00:02:03,080 Speaker 1: We did an episode I think near the end of 38 00:02:03,400 --> 00:02:07,160 Speaker 1: last year that actually, despite all of the restrictions on 39 00:02:07,320 --> 00:02:12,160 Speaker 1: equipment imports into China for semiconductors, that the domestic semiconductor 40 00:02:12,560 --> 00:02:15,919 Speaker 1: industry is making gains. So like in the GDP sense 41 00:02:15,960 --> 00:02:19,000 Speaker 1: of the word, like, clearly China is struggling, but on 42 00:02:19,040 --> 00:02:23,480 Speaker 1: these sort of like key industrial strategic areas of the economy. 43 00:02:23,520 --> 00:02:26,200 Speaker 1: There is the word things still seem to be working out, No. 44 00:02:26,280 --> 00:02:29,040 Speaker 2: Absolutely, And I think there is this overall angst in 45 00:02:29,080 --> 00:02:33,360 Speaker 2: the US with this idea that China is somehow better 46 00:02:33,600 --> 00:02:37,040 Speaker 2: at doing this kind of targeted industrial policy. We used 47 00:02:37,080 --> 00:02:40,160 Speaker 2: to talk about the Chinese command economy. They have experience 48 00:02:40,480 --> 00:02:43,280 Speaker 2: with pouring lots and lots of money into areas that 49 00:02:43,320 --> 00:02:46,640 Speaker 2: they identify as strategically important. That doesn't mean they do 50 00:02:46,680 --> 00:02:50,120 Speaker 2: it perfectly every time. I mean we basically saw that 51 00:02:50,160 --> 00:02:53,239 Speaker 2: with some of the consumer tech companies, where there was 52 00:02:53,280 --> 00:02:57,120 Speaker 2: a reversal of the government stance towards them, lots of 53 00:02:57,240 --> 00:03:01,600 Speaker 2: talk of disorderly capital flowing into that space. But then 54 00:03:01,800 --> 00:03:03,840 Speaker 2: what we saw is, you know, they said that they 55 00:03:03,880 --> 00:03:06,120 Speaker 2: cracked down on the sector, and then they said, what 56 00:03:06,160 --> 00:03:08,760 Speaker 2: we really want you to invest in is things like 57 00:03:08,840 --> 00:03:12,680 Speaker 2: solar panels and electric vehicles and semiconductors, And so we 58 00:03:12,760 --> 00:03:15,560 Speaker 2: saw those areas start to boom. So I think there 59 00:03:15,639 --> 00:03:18,640 Speaker 2: is a real sense of concern in the US that 60 00:03:18,760 --> 00:03:22,359 Speaker 2: maybe China, if they're not better at it, they certainly 61 00:03:22,440 --> 00:03:24,639 Speaker 2: have done it for a longer time on a more 62 00:03:24,680 --> 00:03:26,000 Speaker 2: consistent basis. 63 00:03:25,880 --> 00:03:28,640 Speaker 1: Right, And so it feels like now the debate in 64 00:03:28,680 --> 00:03:31,600 Speaker 1: the US is like, Okay, everyone is sort of accepted 65 00:03:31,800 --> 00:03:34,280 Speaker 1: that the tariffs that Trump introduced, that the idea that 66 00:03:34,320 --> 00:03:37,960 Speaker 1: the US in various ways tries to constrain Chinese exports 67 00:03:38,040 --> 00:03:41,720 Speaker 1: or constrain Chinese industry. It feels like that's become conventional 68 00:03:41,720 --> 00:03:43,840 Speaker 1: wisdom now, or that everyone sort of agrees we do 69 00:03:43,920 --> 00:03:46,440 Speaker 1: that in Washington. And now the question is how much. 70 00:03:46,720 --> 00:03:49,240 Speaker 1: And of course recently we heard Trump say that were 71 00:03:49,240 --> 00:03:51,840 Speaker 1: he to be elected president, he would ratch up the 72 00:03:51,880 --> 00:03:54,600 Speaker 1: tariffs even more. I think he put the number like 73 00:03:54,760 --> 00:03:57,520 Speaker 1: sixty percent, which I have to imagine would like totally clobber. 74 00:03:57,760 --> 00:03:59,920 Speaker 2: He did say sixty percent, But then I saw right 75 00:04:00,120 --> 00:04:02,760 Speaker 2: before we came on, let's see, we're recording this on 76 00:04:02,800 --> 00:04:05,920 Speaker 2: February eighth. I think there was an interview from like 77 00:04:06,000 --> 00:04:09,160 Speaker 2: February six where he basically said that the tariffs could 78 00:04:09,160 --> 00:04:12,480 Speaker 2: be even bigger than sixty percent. So I don't know 79 00:04:12,520 --> 00:04:16,960 Speaker 2: where he's quite getting those round numbers from, but maybe 80 00:04:16,960 --> 00:04:18,400 Speaker 2: more than sixty percent right now. 81 00:04:18,600 --> 00:04:21,080 Speaker 1: So as much as Biden has been a continuation and 82 00:04:21,240 --> 00:04:25,680 Speaker 1: extension and an expansion of Trump policies, maybe Trump, if 83 00:04:25,760 --> 00:04:28,159 Speaker 1: you were to win the presidency in November would be 84 00:04:28,160 --> 00:04:32,320 Speaker 1: a continuation and expansion even further. Anyway, we should talk 85 00:04:32,480 --> 00:04:36,520 Speaker 1: about what a Trump victory, which is of course certainly possible, 86 00:04:36,720 --> 00:04:40,240 Speaker 1: what it would mean for the US China relationship, and 87 00:04:40,279 --> 00:04:42,040 Speaker 1: what it might look like, what the direction all this 88 00:04:42,080 --> 00:04:43,880 Speaker 1: is heading. Let's do it all right, Well, we have 89 00:04:44,040 --> 00:04:46,799 Speaker 1: two absolutely perfect guests today. We're going to be speaking 90 00:04:46,800 --> 00:04:50,520 Speaker 1: to Tom Orlick, previous odd Lots guest multiple times, chief 91 00:04:50,520 --> 00:04:54,560 Speaker 1: economists for Bloomberg Economics, and Mackenzie Hawkins. She's the US 92 00:04:54,600 --> 00:04:58,200 Speaker 1: Industrial policy reporter for Bloomberg in DC. Both of them 93 00:04:58,279 --> 00:05:02,159 Speaker 1: worked on a big new report examining this question, which 94 00:05:02,200 --> 00:05:05,240 Speaker 1: everyone should go and read. But thankfully they are taking 95 00:05:05,279 --> 00:05:07,600 Speaker 1: the time to speak with us. So Tom and McKenzie, 96 00:05:07,760 --> 00:05:09,000 Speaker 1: thank you so much for joining us. 97 00:05:09,440 --> 00:05:11,960 Speaker 3: Great to be here, Thanks Jo, Thanks Tracy, thanks. 98 00:05:11,680 --> 00:05:12,320 Speaker 4: For having us on. 99 00:05:12,520 --> 00:05:14,359 Speaker 1: Actually, Tom, let me just start with you with like 100 00:05:14,400 --> 00:05:19,440 Speaker 1: the most vague theoretical question there is, from a purely 101 00:05:19,720 --> 00:05:21,919 Speaker 1: economist standpoint, what do tariffs do? 102 00:05:22,680 --> 00:05:28,800 Speaker 3: So tariffs increase the cost of imports, and when the 103 00:05:28,839 --> 00:05:33,560 Speaker 3: cost goes up, the demand goes down. So in the 104 00:05:33,560 --> 00:05:38,800 Speaker 3: first Trump administration, we saw twenty five percent tariffs on 105 00:05:39,279 --> 00:05:44,279 Speaker 3: a swathe of Chinese exports to the United States, and 106 00:05:44,320 --> 00:05:47,120 Speaker 3: we've got a bunch of data on the impact that 107 00:05:47,160 --> 00:05:50,800 Speaker 3: those tariffs had, so we can kind of say what 108 00:05:50,839 --> 00:05:54,880 Speaker 3: the impact was. And we're seeing Chinese sales to the 109 00:05:55,040 --> 00:05:58,320 Speaker 3: US in the categories of goods that face the tariffs 110 00:05:58,960 --> 00:06:03,040 Speaker 3: down more than one hundred billion dollars relative to where 111 00:06:03,040 --> 00:06:05,479 Speaker 3: they would have been if no tariffs have been put 112 00:06:05,480 --> 00:06:07,960 Speaker 3: in place. Now Here we are at the start of 113 00:06:08,000 --> 00:06:10,919 Speaker 3: twenty twenty four, still a few months to the election, 114 00:06:12,080 --> 00:06:16,360 Speaker 3: but Donald Trump clearly in the lead for the Republican nomination, 115 00:06:17,080 --> 00:06:20,880 Speaker 3: running ahead of Joe Biden in the polls in some 116 00:06:20,960 --> 00:06:25,120 Speaker 3: key swing states, and talking about a sixty percent tariff 117 00:06:25,360 --> 00:06:29,840 Speaker 3: on all Chinese imports. Well, if twenty five percent tariffs 118 00:06:30,040 --> 00:06:33,480 Speaker 3: put a bit of a hole in revenue for Chinese factories, 119 00:06:34,200 --> 00:06:37,120 Speaker 3: sixty percent tariffs, I think would turn that hole into 120 00:06:37,160 --> 00:06:37,880 Speaker 3: more like a crater. 121 00:06:39,480 --> 00:06:42,719 Speaker 2: So Joe asked a very theoretical question, and I guess 122 00:06:42,720 --> 00:06:45,480 Speaker 2: I'm going to ask something a little bit more specific, 123 00:06:45,520 --> 00:06:48,960 Speaker 2: but talk to us about how targeted or I guess 124 00:06:49,000 --> 00:06:52,279 Speaker 2: customized the tariffs are that we've seen from the Trump 125 00:06:52,360 --> 00:06:56,000 Speaker 2: administration and then the Biden administration. Because of course Trump's 126 00:06:56,000 --> 00:07:00,719 Speaker 2: export curbs did involve semiconductors when he was but then 127 00:07:00,880 --> 00:07:04,240 Speaker 2: Biden came in, and I believe he targeted, you know, 128 00:07:04,320 --> 00:07:08,400 Speaker 2: advanced semiconductor technology and China's access to it, and in 129 00:07:08,400 --> 00:07:12,160 Speaker 2: some ways he was even more strategic in the things 130 00:07:12,200 --> 00:07:13,320 Speaker 2: that he was limiting. 131 00:07:13,800 --> 00:07:17,400 Speaker 4: So in the Trump administration you saw this sweeping terror 132 00:07:17,480 --> 00:07:20,240 Speaker 4: review that affected a wide range of Chinese industries, and 133 00:07:20,280 --> 00:07:24,040 Speaker 4: the Biden administration has held those tariffs in place. There's 134 00:07:24,080 --> 00:07:27,000 Speaker 4: been sort of a quote unquote imminent tariff review for 135 00:07:27,120 --> 00:07:29,680 Speaker 4: months now, and a big question in Washington is whether 136 00:07:29,720 --> 00:07:33,400 Speaker 4: the administration will stay the course with the sectors that 137 00:07:33,440 --> 00:07:37,000 Speaker 4: Trump targeted or have a more refined approach that might 138 00:07:37,040 --> 00:07:40,240 Speaker 4: focus on key strategic sectors for the US like evs 139 00:07:40,280 --> 00:07:42,880 Speaker 4: and other clean energy products, which of course the Biden 140 00:07:42,880 --> 00:07:46,280 Speaker 4: administration is trying to subsidize at home. But then you 141 00:07:46,320 --> 00:07:49,360 Speaker 4: saw Biden look at a whole suite of other tools 142 00:07:49,360 --> 00:07:53,520 Speaker 4: of economic statecraft that have actually become his favorite mechanisms 143 00:07:53,560 --> 00:07:56,440 Speaker 4: to get at the Beijing question. One of those, as 144 00:07:56,440 --> 00:08:00,120 Speaker 4: you said, Tracy, is export controls on advanced semiconductors. These 145 00:08:00,120 --> 00:08:03,560 Speaker 4: are the critical electronic components that power everything from your 146 00:08:03,560 --> 00:08:06,720 Speaker 4: phone to your car to nuclear missiles, and there's a 147 00:08:06,720 --> 00:08:10,360 Speaker 4: big fear in Washington that if China catches up with 148 00:08:10,640 --> 00:08:15,040 Speaker 4: US technology that they could use AI to power weapons systems, 149 00:08:15,040 --> 00:08:17,680 Speaker 4: that it could pose a significant military threat to the US. 150 00:08:18,200 --> 00:08:21,800 Speaker 4: And so you saw in October twenty twenty two sweeping 151 00:08:21,840 --> 00:08:24,880 Speaker 4: controls on the ability of US companies to export the 152 00:08:24,880 --> 00:08:29,440 Speaker 4: most advanced semiconductor technology and ship making equipment to any 153 00:08:29,520 --> 00:08:30,320 Speaker 4: Chinese company. 154 00:08:30,880 --> 00:08:33,800 Speaker 1: McKenzie just as a follow up on that specifically and 155 00:08:34,040 --> 00:08:36,839 Speaker 1: talking about politically, like as we said in the introduction, 156 00:08:37,000 --> 00:08:39,880 Speaker 1: and as Tracy just mentioned, you know, Biden continued with 157 00:08:39,920 --> 00:08:42,680 Speaker 1: a lot of these terrify views. They're ongoing, they've become 158 00:08:42,760 --> 00:08:46,760 Speaker 1: even more targeted. How did this become the consensus that 159 00:08:46,840 --> 00:08:49,560 Speaker 1: the idea of just dropping tariffs and sort of returning 160 00:08:49,559 --> 00:08:52,720 Speaker 1: to the pre Trump status quo with regards to trade 161 00:08:53,040 --> 00:08:56,040 Speaker 1: now doesn't even seem on the table anymore, and it 162 00:08:56,080 --> 00:08:59,360 Speaker 1: doesn't seem like anyone advocates for that. How did this 163 00:08:59,520 --> 00:09:03,360 Speaker 1: just become like the bipartisan consensus that setting aside the 164 00:09:03,400 --> 00:09:06,800 Speaker 1: degree of restrictions that some restrictions must be applied. 165 00:09:07,160 --> 00:09:08,840 Speaker 4: It's a great question, you know, when you talk to 166 00:09:08,960 --> 00:09:10,880 Speaker 4: folks on both sides of the aisle on the hill, 167 00:09:10,920 --> 00:09:13,800 Speaker 4: they say, the one thing that everyone agrees on is China, 168 00:09:14,120 --> 00:09:16,920 Speaker 4: and the question is not what but how much. And 169 00:09:17,040 --> 00:09:19,720 Speaker 4: you know, you really saw the Trump administration, you know, 170 00:09:19,840 --> 00:09:23,720 Speaker 4: early on introduce this tariffs question and then later on 171 00:09:23,840 --> 00:09:27,320 Speaker 4: towards the latter years, start to target specific Chinese firms. 172 00:09:27,320 --> 00:09:30,600 Speaker 4: Like a great example is Huawei, the Chinese telecommunications giant, 173 00:09:30,840 --> 00:09:34,840 Speaker 4: which you saw Trump sanction in twenty nineteen over concerns 174 00:09:34,880 --> 00:09:39,040 Speaker 4: about the security of their telecommunication systems that are all 175 00:09:39,080 --> 00:09:42,360 Speaker 4: over the US. And then once that sort of entered 176 00:09:42,480 --> 00:09:47,040 Speaker 4: the Washington think tank sphere and people really started seeing 177 00:09:47,120 --> 00:09:50,480 Speaker 4: Huawei as a security threat, it became okay, what else 178 00:09:50,559 --> 00:09:53,360 Speaker 4: is Huawei doing that's a security threat? And you know, 179 00:09:53,440 --> 00:09:56,920 Speaker 4: the initial sanctions sort of crippled their telecommunications business and 180 00:09:57,000 --> 00:10:00,319 Speaker 4: their smartphone business for quite some time. But we saw 181 00:10:00,360 --> 00:10:03,400 Speaker 4: Huawei debut a smartphone in August that's powered by its 182 00:10:03,400 --> 00:10:06,040 Speaker 4: ship that's far more advanced than where the US was 183 00:10:06,080 --> 00:10:10,240 Speaker 4: hoping to hamstring China's rise. And so as we've seen 184 00:10:10,400 --> 00:10:13,960 Speaker 4: China sort of make incremental technological progress in these areas 185 00:10:14,000 --> 00:10:18,240 Speaker 4: that Washington has decided it's quite concerned about. There doesn't 186 00:10:18,240 --> 00:10:21,120 Speaker 4: really seem to be a big debate over whether should 187 00:10:21,160 --> 00:10:23,360 Speaker 4: we really be doing expert controls in the first place. 188 00:10:23,440 --> 00:10:26,400 Speaker 4: It's we've been on this path, We've seen China continue 189 00:10:26,400 --> 00:10:28,960 Speaker 4: to make progress. What are additional measures that we can 190 00:10:29,000 --> 00:10:32,839 Speaker 4: take with our allies to prevent any further progress from 191 00:10:32,920 --> 00:10:36,080 Speaker 4: these firms that now, for five years have been thought 192 00:10:36,080 --> 00:10:38,040 Speaker 4: of as a significant security threaten DC. 193 00:10:38,559 --> 00:10:41,320 Speaker 3: I just build on that briefly and point to three 194 00:10:41,480 --> 00:10:44,360 Speaker 3: big factors which I think have changed the dynamic here 195 00:10:44,400 --> 00:10:48,880 Speaker 3: in Washington, DC and made anti China into a sort 196 00:10:48,880 --> 00:10:52,120 Speaker 3: of broad and firm consensus. I think the first thing 197 00:10:52,320 --> 00:10:56,280 Speaker 3: driving it has been China's sudden rise. Right when everyone 198 00:10:56,440 --> 00:11:00,640 Speaker 3: was agreeing that China could join the WTO back in 199 00:11:00,720 --> 00:11:04,960 Speaker 3: nineteen ninety nine two thousand, China's GDP was a fraction 200 00:11:05,240 --> 00:11:11,520 Speaker 3: of USGDP. China's military capabilities were nowhere near US military capabilities, 201 00:11:12,040 --> 00:11:14,880 Speaker 3: and so China really wasn't regarded as a threat, and 202 00:11:14,920 --> 00:11:17,559 Speaker 3: it was still possible to regard China as a kind 203 00:11:17,600 --> 00:11:20,880 Speaker 3: of almost like a disciple that's now clearly changed. I 204 00:11:20,880 --> 00:11:23,360 Speaker 3: think the second thing, which is important is the kind 205 00:11:23,360 --> 00:11:26,920 Speaker 3: of the peculiarities of the US election system, which gives 206 00:11:26,960 --> 00:11:30,160 Speaker 3: a disproportionate amount of power to the votes and the 207 00:11:30,240 --> 00:11:35,679 Speaker 3: voices of a constituency in a few swing states, places 208 00:11:35,800 --> 00:11:39,600 Speaker 3: like Pennsylvania, which are in the US rust Belt and 209 00:11:39,640 --> 00:11:44,360 Speaker 3: which have suffered disproportionately from China's rise as a manufacturing power, 210 00:11:44,679 --> 00:11:47,280 Speaker 3: and so where tough on China is a very popular 211 00:11:47,840 --> 00:11:50,200 Speaker 3: vote winner. And then I think the third factor which 212 00:11:50,240 --> 00:11:52,360 Speaker 3: we have to acknowledge is the kind of the strange 213 00:11:52,400 --> 00:11:55,720 Speaker 3: genius of Donald Trump, right, who kind of revealed in 214 00:11:55,720 --> 00:11:59,600 Speaker 3: his campaign in twenty sixteen that being really tough on 215 00:11:59,679 --> 00:12:03,080 Speaker 3: China was a powerful motivating factor for the voters in 216 00:12:03,120 --> 00:12:03,959 Speaker 3: those swing space. 217 00:12:19,600 --> 00:12:24,479 Speaker 2: Whatever happened to the sort of old simplistic argument for protectionism, 218 00:12:24,520 --> 00:12:28,160 Speaker 2: which was what we want to know, reshore manufacturing, create 219 00:12:28,200 --> 00:12:32,360 Speaker 2: more jobs in the US. It feels like it's sort 220 00:12:32,400 --> 00:12:38,640 Speaker 2: of evolved into this very specific anti China action. And 221 00:12:38,679 --> 00:12:41,280 Speaker 2: we haven't seen correct me if I'm wrong, but we 222 00:12:41,400 --> 00:12:46,160 Speaker 2: certainly haven't seen as stringent actions on other countries and 223 00:12:46,200 --> 00:12:50,160 Speaker 2: other manufacturing threats. I mean, we know Mexico is exporting 224 00:12:50,480 --> 00:12:53,480 Speaker 2: tons to the US now, sort of filling some of 225 00:12:53,520 --> 00:12:56,920 Speaker 2: the gap that China has left. But what happened to 226 00:12:57,000 --> 00:13:00,920 Speaker 2: that argument that feels like it's lost a little bit popularity. 227 00:13:01,080 --> 00:13:04,679 Speaker 2: In DC, everything feels very strategic, very security focused. 228 00:13:05,080 --> 00:13:07,880 Speaker 3: So I think when it comes to China, these two 229 00:13:07,960 --> 00:13:13,320 Speaker 3: things come together from a US policy perspective rather nicely. Right, 230 00:13:13,920 --> 00:13:18,800 Speaker 3: here's China, a single party state, a state dominated economy, 231 00:13:19,400 --> 00:13:24,240 Speaker 3: rising quickly one point three billion people. It's easy to 232 00:13:24,360 --> 00:13:28,160 Speaker 3: see why this is regarded as a national security threat, 233 00:13:28,600 --> 00:13:31,360 Speaker 3: and so why it's easy to win the argument in 234 00:13:31,480 --> 00:13:36,560 Speaker 3: DC for things like banning sales of leading edge semiconductors 235 00:13:36,840 --> 00:13:41,760 Speaker 3: because potentially they could fuel China's military capabilities. At the 236 00:13:41,760 --> 00:13:47,280 Speaker 3: same time, China's enormous success in grabbing global market share 237 00:13:47,440 --> 00:13:51,200 Speaker 3: in the manufacturing sector and the consequences of that for 238 00:13:51,559 --> 00:13:55,880 Speaker 3: US manufacturing where factory towns have been hollowed out and 239 00:13:56,320 --> 00:13:59,360 Speaker 3: people have lost their jobs, makes the case that this 240 00:13:59,440 --> 00:14:03,160 Speaker 3: is really not just from a national security perspective, but 241 00:14:03,200 --> 00:14:06,720 Speaker 3: also from a kind of social well being allowing everyone 242 00:14:06,760 --> 00:14:09,960 Speaker 3: to benefit from the growth of the US economy perspective. 243 00:14:10,400 --> 00:14:13,160 Speaker 3: So it's a complicated picture. Now when it comes to China, 244 00:14:13,480 --> 00:14:17,160 Speaker 3: those national security arguments and those concerns about the hollowing 245 00:14:17,160 --> 00:14:21,680 Speaker 3: out of the manufacturing sector come together very nicely. The 246 00:14:22,520 --> 00:14:25,880 Speaker 3: messiness of it, which I think you're sort of alluding to, Tracy, 247 00:14:26,600 --> 00:14:31,520 Speaker 3: is that near assuring and friendsuring. That addresses the national 248 00:14:31,600 --> 00:14:34,640 Speaker 3: security piece of it, but it certainly doesn't help people 249 00:14:34,680 --> 00:14:37,480 Speaker 3: who lost their manufacturing jobs here in the United States. 250 00:14:37,960 --> 00:14:40,280 Speaker 3: They're not going to be super delighted to see those 251 00:14:40,400 --> 00:14:44,080 Speaker 3: jobs coming back to Mexico or Vietnam or other places 252 00:14:44,120 --> 00:14:45,360 Speaker 3: which don't really help them out. 253 00:14:45,640 --> 00:14:48,720 Speaker 4: And the manufacturing argument still has a lot of salience 254 00:14:48,760 --> 00:14:50,800 Speaker 4: in DC and on the campaign trail. You know, you 255 00:14:50,800 --> 00:14:54,160 Speaker 4: can think of one tranch of Biden's China policy as 256 00:14:54,320 --> 00:14:58,880 Speaker 4: sanctioned controls on outbound investment, export controls on semiconductor chips, 257 00:14:58,880 --> 00:15:01,760 Speaker 4: and the continuation of tru tariffs. But you can think 258 00:15:01,760 --> 00:15:03,960 Speaker 4: of the other side of the coin as the massive 259 00:15:03,960 --> 00:15:06,640 Speaker 4: industrial policy effort that the US has embarked on over 260 00:15:06,680 --> 00:15:09,320 Speaker 4: the past couple of years. The Chips and Science Act, 261 00:15:09,560 --> 00:15:12,520 Speaker 4: the Inflation Reduction Act, which is Democrats' signature climate law, 262 00:15:12,800 --> 00:15:15,640 Speaker 4: and the bipart is an infrastructure law have poured well 263 00:15:15,680 --> 00:15:20,280 Speaker 4: over a trillion dollars of federal funding into revitalizing these 264 00:15:20,320 --> 00:15:24,440 Speaker 4: domestic manufacturing bases in areas that lost a lot of 265 00:15:24,560 --> 00:15:26,440 Speaker 4: jobs to the so called China shock. 266 00:15:26,880 --> 00:15:29,520 Speaker 2: It is true also that I think Trump has talked 267 00:15:29,520 --> 00:15:33,360 Speaker 2: about doing a blanket ten percent tariff on all imports 268 00:15:33,400 --> 00:15:37,080 Speaker 2: to the US, so basically ring fencing the entire economy. 269 00:15:37,120 --> 00:15:39,600 Speaker 1: Well, this is details with what I was about to 270 00:15:39,600 --> 00:15:43,440 Speaker 1: ask next time, and it's sort of another theoretical economics question, 271 00:15:43,560 --> 00:15:44,960 Speaker 1: kind of like when I asked what tariffs do? But 272 00:15:45,200 --> 00:15:47,680 Speaker 1: why didn't we have inflation? Why don't they Why weren't 273 00:15:47,680 --> 00:15:52,320 Speaker 1: the inflationary in the Trump period? And how do economists 274 00:15:52,360 --> 00:15:56,960 Speaker 1: think about the inflation risks associated with aggressive tariffs, either 275 00:15:57,000 --> 00:15:59,120 Speaker 1: on one country or blanket tariffs on everyone. 276 00:16:00,120 --> 00:16:02,560 Speaker 3: So it's a really good question if we think about 277 00:16:02,600 --> 00:16:06,920 Speaker 3: the kind of the big picture. Over the last thirty years, 278 00:16:07,280 --> 00:16:12,400 Speaker 3: globalization and the ability of consumers in the United States 279 00:16:12,480 --> 00:16:16,720 Speaker 3: to tap cheap goods made in China has been one 280 00:16:16,760 --> 00:16:20,560 Speaker 3: of the factors that was pretty helpful in keeping inflation 281 00:16:21,160 --> 00:16:24,280 Speaker 3: around the FEDS two percent target, at least until the 282 00:16:24,280 --> 00:16:29,320 Speaker 3: post pandemic inflation surge. Now, why didn't the Trump tariffs 283 00:16:29,360 --> 00:16:33,440 Speaker 3: have a more significant impact on that dynamic? I think 284 00:16:33,480 --> 00:16:36,240 Speaker 3: the reason is there's a few factors at work. The 285 00:16:36,280 --> 00:16:40,240 Speaker 3: first factor is goods inflation is important in the US, 286 00:16:40,440 --> 00:16:44,560 Speaker 3: but it's not as important as services inflation, and services 287 00:16:44,600 --> 00:16:48,040 Speaker 3: inflation doesn't really get impacted by tariffs that you put 288 00:16:48,120 --> 00:16:52,040 Speaker 3: on goods. The second factor is, yes, China is a 289 00:16:52,120 --> 00:16:56,720 Speaker 3: really important supplier of goods to the United States, but 290 00:16:56,800 --> 00:16:59,520 Speaker 3: it's not the only supplier. And then the third factor 291 00:16:59,560 --> 00:17:03,720 Speaker 3: at work is tariffs aren't the only thing going on. Yes, 292 00:17:03,760 --> 00:17:06,879 Speaker 3: the Trump administration put twenty five percent tariffs on but 293 00:17:07,640 --> 00:17:10,359 Speaker 3: over the same period we saw a significant depreciation of 294 00:17:10,440 --> 00:17:14,159 Speaker 3: China's yuan. China's factories were able to absorb some of 295 00:17:14,200 --> 00:17:17,840 Speaker 3: the shock by taking lower profit margins, and that provided 296 00:17:17,920 --> 00:17:18,919 Speaker 3: a little bit of an officer. 297 00:17:19,640 --> 00:17:22,480 Speaker 2: So, just on this note, have you done any number 298 00:17:22,520 --> 00:17:27,000 Speaker 2: crunching on what Trump's proposal would mean for inflation? Now 299 00:17:27,040 --> 00:17:28,320 Speaker 2: do you have specific numbers? 300 00:17:28,840 --> 00:17:32,439 Speaker 3: So we have actually been crunching the numbers, Tracy, And 301 00:17:32,480 --> 00:17:35,399 Speaker 3: here I want to give a shout out to Eleanora 302 00:17:35,520 --> 00:17:39,320 Speaker 3: Mavrodi in our modeling team in Paris. She's taken a 303 00:17:39,359 --> 00:17:42,840 Speaker 3: big model of the global economy and she's plugged in 304 00:17:42,960 --> 00:17:48,080 Speaker 3: that Trump proposal for a sixty percent increase in tariffs 305 00:17:48,080 --> 00:17:51,159 Speaker 3: on US imports from China, and what the model is 306 00:17:51,200 --> 00:17:55,040 Speaker 3: telling us is that that has a pretty catastrophic impact 307 00:17:55,119 --> 00:17:58,159 Speaker 3: on trade. In fact, if the US goes ahead with 308 00:17:58,200 --> 00:18:02,720 Speaker 3: sixty percent tariffs and China reciprocates with sixty percent tariffs, 309 00:18:02,760 --> 00:18:05,679 Speaker 3: matching the pattern of kind of tip for tat retaliation 310 00:18:05,840 --> 00:18:09,119 Speaker 3: we saw during the first Trump term, that pretty much 311 00:18:09,280 --> 00:18:14,000 Speaker 3: turns off trade between the world's two biggest economies. The 312 00:18:14,040 --> 00:18:19,160 Speaker 3: impact on inflation, well, it's there. If import costs go up, 313 00:18:19,480 --> 00:18:22,520 Speaker 3: then that's a positive impact on inflation, but it's not 314 00:18:22,680 --> 00:18:25,879 Speaker 3: particularly marked. That's partly for the reasons I was just 315 00:18:25,960 --> 00:18:30,240 Speaker 3: sharing services inflation is more important than goods inflation. It's 316 00:18:30,240 --> 00:18:34,120 Speaker 3: also because there's an offsetting drag. Import prices go up 317 00:18:34,160 --> 00:18:38,480 Speaker 3: and that directly affects the CPI. But tariffs also have 318 00:18:38,520 --> 00:18:41,720 Speaker 3: a depressing effect on growth, and that means the economy 319 00:18:41,800 --> 00:18:43,840 Speaker 3: is weaker, and that's an offset on inflation. 320 00:18:44,320 --> 00:18:46,879 Speaker 1: If the US and China, there's two huge trading partners, 321 00:18:46,920 --> 00:18:49,560 Speaker 1: suddenly stop trading, what other knock on effects do we 322 00:18:49,600 --> 00:18:50,160 Speaker 1: see from there? 323 00:18:50,640 --> 00:18:52,840 Speaker 3: So I can speak to the economics of that, and 324 00:18:53,000 --> 00:18:55,399 Speaker 3: maybe McKenzie has some thoughts on the sort of broader 325 00:18:55,440 --> 00:18:59,439 Speaker 3: policy implications. So on the economics, I think it's interesting 326 00:18:59,480 --> 00:19:02,119 Speaker 3: to think about this not just at the aggregate level, 327 00:19:02,400 --> 00:19:05,600 Speaker 3: but also at the sector level, and not just about 328 00:19:05,600 --> 00:19:07,840 Speaker 3: the impact on the US and China, but also about 329 00:19:07,880 --> 00:19:11,600 Speaker 3: the impact on other economies around the world. So at 330 00:19:11,600 --> 00:19:15,080 Speaker 3: the sector level in the United States, it's kind of 331 00:19:15,359 --> 00:19:20,200 Speaker 3: a policy to support the industries of the past, right, mining, 332 00:19:20,640 --> 00:19:24,360 Speaker 3: production of steel. These are industries which were crucially important 333 00:19:24,359 --> 00:19:27,080 Speaker 3: to the United States in an earlier stage of its development. 334 00:19:27,760 --> 00:19:30,680 Speaker 3: Not so important now. Those would be the industries which 335 00:19:30,680 --> 00:19:34,360 Speaker 3: would be the main beneficiary of a sixty percent tariff. 336 00:19:35,040 --> 00:19:38,399 Speaker 3: Who loses out, Well, it's kind of the industries of 337 00:19:38,440 --> 00:19:42,439 Speaker 3: the future, right, it's the people making the semiconductors, is 338 00:19:42,440 --> 00:19:45,399 Speaker 3: the people making the advanced electronics, the people with the 339 00:19:45,440 --> 00:19:50,920 Speaker 3: exposure to that East Asian electronics supply chain. And thinking 340 00:19:50,960 --> 00:19:54,320 Speaker 3: about the global impact, Well, if we break the trade 341 00:19:54,359 --> 00:19:57,919 Speaker 3: relationship between China and the United States, that's bad for 342 00:19:57,960 --> 00:20:01,000 Speaker 3: those two countries, But there are some other countries that 343 00:20:01,080 --> 00:20:05,520 Speaker 3: could well gain. Thinking about those connect to economies, places 344 00:20:05,560 --> 00:20:10,520 Speaker 3: like Vietnam, places like Mexico that have a strong manufacturing base, 345 00:20:10,840 --> 00:20:13,920 Speaker 3: that have low costs, and that have pretty good trade 346 00:20:13,960 --> 00:20:15,720 Speaker 3: relationships with those two economies. 347 00:20:16,440 --> 00:20:20,040 Speaker 4: And when you think about the bilateral relationship between Washington 348 00:20:20,080 --> 00:20:23,800 Speaker 4: and Beijing. At the same time as Biden has become 349 00:20:24,040 --> 00:20:28,080 Speaker 4: increasingly hawkish on China, employing sort of novel tools of 350 00:20:28,080 --> 00:20:31,520 Speaker 4: economic statecraft to get at advanced industries in the country. 351 00:20:31,880 --> 00:20:36,040 Speaker 4: There's also been this significant back channel effort to improve 352 00:20:36,200 --> 00:20:41,439 Speaker 4: direct diplomatic ties military to military communications, culminating in a 353 00:20:41,520 --> 00:20:43,960 Speaker 4: meeting between the two leaders on the sidelines of the 354 00:20:43,960 --> 00:20:47,640 Speaker 4: APEC summit in San Francisco. And so you can imagine, 355 00:20:47,760 --> 00:20:52,360 Speaker 4: you know, after establishing formal communication networks between the Treasury 356 00:20:52,400 --> 00:20:55,680 Speaker 4: Department and their counterparts in China, formal communications networks between 357 00:20:55,720 --> 00:20:59,000 Speaker 4: the Commerce Department here and MOFCOM and China, this sort 358 00:20:59,000 --> 00:21:02,320 Speaker 4: of deterioration of a lot of the sort of day 359 00:21:02,359 --> 00:21:05,800 Speaker 4: to day's slow working diplomatic effort that's been happening under 360 00:21:05,840 --> 00:21:09,160 Speaker 4: President Biden, if the US were to sort of blow 361 00:21:09,240 --> 00:21:11,639 Speaker 4: up the trade relationship between the two countries under a 362 00:21:11,640 --> 00:21:12,879 Speaker 4: potential Trump administration. 363 00:21:28,280 --> 00:21:32,280 Speaker 2: Mackenzie, you mentioned earlier the Infrastructure Investment Act, and the 364 00:21:32,440 --> 00:21:35,720 Speaker 2: other big set piece from the Biden administration has been 365 00:21:35,880 --> 00:21:39,399 Speaker 2: the Clean Energy Transition and the money that is pouring 366 00:21:39,480 --> 00:21:42,359 Speaker 2: in there. And this is a question that I've asked 367 00:21:42,400 --> 00:21:45,679 Speaker 2: a couple people on this podcast at this point, But 368 00:21:46,240 --> 00:21:50,560 Speaker 2: it seems like the US has a desire to shift 369 00:21:50,560 --> 00:21:53,840 Speaker 2: away from fossil fuels, maybe build up home capacity of 370 00:21:53,920 --> 00:21:57,760 Speaker 2: clean energy technology like solar panels. But at the same time, 371 00:21:57,800 --> 00:22:00,680 Speaker 2: it is also very true that China is good at 372 00:22:00,720 --> 00:22:04,719 Speaker 2: producing lots of cheap solar panels and things like that. 373 00:22:04,840 --> 00:22:07,560 Speaker 2: So I guess, I'm curious what you're hearing from the 374 00:22:07,600 --> 00:22:12,760 Speaker 2: administration in terms of I guess the need to build 375 00:22:12,840 --> 00:22:16,439 Speaker 2: up or increase some of that capability at home and 376 00:22:16,520 --> 00:22:21,200 Speaker 2: make it more efficient versus the lower cost and sheer 377 00:22:21,320 --> 00:22:24,840 Speaker 2: volume of production that you would get from Chinese made 378 00:22:24,960 --> 00:22:27,880 Speaker 2: renewable technology or even semiconductors. 379 00:22:28,600 --> 00:22:31,680 Speaker 4: It's a great question. The solar panel question is kind 380 00:22:31,680 --> 00:22:36,000 Speaker 4: of the most often cited explanation of the danger that 381 00:22:36,200 --> 00:22:39,600 Speaker 4: China poses to these sort of more nascent industries in 382 00:22:39,640 --> 00:22:44,000 Speaker 4: the US on hydrogen, on wind, and also on electric 383 00:22:44,080 --> 00:22:47,320 Speaker 4: vehicles and semiconductor ships, where the US was long the 384 00:22:47,320 --> 00:22:50,000 Speaker 4: technological leader and then seated a lot of that production 385 00:22:50,119 --> 00:22:53,280 Speaker 4: capability to East Asia. And so when we think about 386 00:22:53,280 --> 00:22:55,800 Speaker 4: the sort of critical industries that the US is investing 387 00:22:55,840 --> 00:22:58,040 Speaker 4: in right now, you identify them right off the bed. 388 00:22:58,080 --> 00:23:02,080 Speaker 4: It's semiconductor ships, it's electric vehicle, it's solar, wind, hydro, 389 00:23:02,600 --> 00:23:04,600 Speaker 4: a bunch of types of clean energy through the Ships 390 00:23:04,600 --> 00:23:07,240 Speaker 4: and Science Act and the Inflation Reduction Act. And the 391 00:23:07,320 --> 00:23:10,240 Speaker 4: worry is that the US could pour significant amounts of 392 00:23:10,280 --> 00:23:13,400 Speaker 4: government capital trying to crowd in private capital to build 393 00:23:13,480 --> 00:23:17,080 Speaker 4: up these industries, but if Chinese firms are not operating 394 00:23:17,119 --> 00:23:20,480 Speaker 4: in the same market environment, there could be a significant 395 00:23:20,600 --> 00:23:24,960 Speaker 4: dumping risk. The fear on chips, for example, is that 396 00:23:25,359 --> 00:23:28,120 Speaker 4: China has been building up capacity in the sort of mature, 397 00:23:28,240 --> 00:23:32,480 Speaker 4: older generation semiconductors that still power the entire global economy, 398 00:23:32,520 --> 00:23:34,320 Speaker 4: even if they're not the cutting edge. Those are not 399 00:23:34,400 --> 00:23:36,600 Speaker 4: the ones that the US is trying to deal with 400 00:23:36,600 --> 00:23:40,720 Speaker 4: with export controls, and that's why the Biden administration is 401 00:23:40,720 --> 00:23:43,520 Speaker 4: talking about tariffs. They say, we see this following this 402 00:23:43,640 --> 00:23:47,800 Speaker 4: same trajectory that we saw with solar panels and on 403 00:23:47,880 --> 00:23:51,679 Speaker 4: electric vehicles as well. The US is pouring billions of 404 00:23:51,760 --> 00:23:55,879 Speaker 4: dollars and trying to get American auto giants to build 405 00:23:55,960 --> 00:23:59,480 Speaker 4: cleaner cars in the US, but Chinese models are on 406 00:23:59,560 --> 00:24:02,160 Speaker 4: offer for less than half the cost, and the only 407 00:24:02,240 --> 00:24:04,560 Speaker 4: reason they haven't entered US markets yet, or the primary 408 00:24:04,600 --> 00:24:07,080 Speaker 4: reason is that there's a twenty seven point five percent 409 00:24:07,119 --> 00:24:10,040 Speaker 4: tariff imposed under Donald Trump, and you're hearing a lot 410 00:24:10,080 --> 00:24:13,080 Speaker 4: of concern in Washington, maybe we might need to increase 411 00:24:13,119 --> 00:24:15,879 Speaker 4: that number to protect these industries that we're investing in 412 00:24:15,920 --> 00:24:16,600 Speaker 4: so much at home. 413 00:24:16,720 --> 00:24:18,639 Speaker 1: I'm glad you went there. There's literally going to be 414 00:24:18,720 --> 00:24:21,280 Speaker 1: what I ask because when you talk about the Chinese 415 00:24:21,359 --> 00:24:25,400 Speaker 1: evy boom, most of the people talk about the European 416 00:24:25,520 --> 00:24:30,199 Speaker 1: market specifically and how it's a threat to BMW and 417 00:24:30,240 --> 00:24:33,360 Speaker 1: the various legacy automakers. But in theory, right, like if 418 00:24:33,400 --> 00:24:38,120 Speaker 1: the quality continues to improve, if they continue to go down, 419 00:24:38,200 --> 00:24:40,879 Speaker 1: like the sort of learning cost curve of costs, like 420 00:24:41,320 --> 00:24:43,520 Speaker 1: is it only a matter of time at current rates 421 00:24:43,560 --> 00:24:48,080 Speaker 1: before we start seeing bid cars in the US competing 422 00:24:48,119 --> 00:24:51,840 Speaker 1: against you know, obviously Tesla, but also the EV efforts 423 00:24:51,840 --> 00:24:54,240 Speaker 1: of the Detroit three and others that so far haven't 424 00:24:54,240 --> 00:24:55,800 Speaker 1: gone all that great as far as I can tell. 425 00:24:56,280 --> 00:24:59,320 Speaker 4: So that is one of the central questions I think 426 00:24:59,359 --> 00:25:02,359 Speaker 4: the policy make in the administration are thinking about right now. 427 00:25:02,400 --> 00:25:05,600 Speaker 4: You know, the EV question in the US is manifold one. 428 00:25:05,680 --> 00:25:09,520 Speaker 4: There is concern that Chinese EV supply chain companies will 429 00:25:09,520 --> 00:25:12,320 Speaker 4: try to take advantage of the tax credits offered for 430 00:25:12,600 --> 00:25:15,280 Speaker 4: US production. There's been a lot of focus, for example, 431 00:25:15,760 --> 00:25:19,320 Speaker 4: on this Ford facility in Michigan, which has a licensing 432 00:25:19,359 --> 00:25:23,719 Speaker 4: agreement with Cattle, which is the pre eminent global battery maker, 433 00:25:24,200 --> 00:25:26,840 Speaker 4: and a lot of China hawks on the hill, you know, 434 00:25:26,960 --> 00:25:28,600 Speaker 4: in some cases on both sides of the aisle are 435 00:25:28,600 --> 00:25:30,760 Speaker 4: saying we should really keep a close eye on that. 436 00:25:30,920 --> 00:25:33,080 Speaker 4: Is this sort of an attempt by China to work 437 00:25:33,119 --> 00:25:36,639 Speaker 4: around restrictions that say you can't take advantage of the 438 00:25:36,680 --> 00:25:39,520 Speaker 4: tax credits if you have a certain threshold of Chinese 439 00:25:39,560 --> 00:25:43,159 Speaker 4: investment in your supply chain, to sort of tap into 440 00:25:43,240 --> 00:25:46,679 Speaker 4: this inflation Reduction Act fueled EV boom in the United States. 441 00:25:47,359 --> 00:25:50,879 Speaker 4: Then there's the question of will Bid and other Chinese 442 00:25:50,920 --> 00:25:53,240 Speaker 4: companies try to invest in Mexico. You know, you saw 443 00:25:53,760 --> 00:25:56,840 Speaker 4: Treasury Secretary Janet Yellen in December on a trip to 444 00:25:56,880 --> 00:25:59,840 Speaker 4: Mexico City saying we want to help Mexico ford a 445 00:25:59,840 --> 00:26:04,800 Speaker 4: five against you know, foreign investment threats, including specifically China, 446 00:26:05,400 --> 00:26:09,680 Speaker 4: and Commerce Secretary Gina Raimondo last week sort of opened 447 00:26:09,680 --> 00:26:12,680 Speaker 4: the door to a little bit of a novel take 448 00:26:12,840 --> 00:26:16,280 Speaker 4: on Chinese EV's coming from the administration citing data security 449 00:26:16,359 --> 00:26:20,240 Speaker 4: risks so not even just talking about the market dynamics 450 00:26:20,280 --> 00:26:22,879 Speaker 4: and the trade threat, which was the logic behind the 451 00:26:22,880 --> 00:26:25,920 Speaker 4: Trump tariffs to begin with, and this sort of long 452 00:26:26,000 --> 00:26:29,480 Speaker 4: going conversation among Biden officials about whether to adjust or 453 00:26:29,520 --> 00:26:33,720 Speaker 4: potentially increase those tariffs, but also the question of you know, 454 00:26:33,760 --> 00:26:37,280 Speaker 4: these cars are equipped with thousands of sensors, and she 455 00:26:37,359 --> 00:26:39,600 Speaker 4: asked the question, do we really want all of that 456 00:26:39,800 --> 00:26:43,159 Speaker 4: data going to Beijing? And so that was almost seating 457 00:26:43,240 --> 00:26:46,240 Speaker 4: the floor a little bit to maybe this quote unquote 458 00:26:46,280 --> 00:26:49,480 Speaker 4: small yard high fence approach that the Biden administration has 459 00:26:49,520 --> 00:26:53,520 Speaker 4: touted for years is becoming or could become a slightly 460 00:26:53,640 --> 00:26:56,600 Speaker 4: larger yard and higher fence. Looking at other forms of 461 00:26:56,640 --> 00:26:59,920 Speaker 4: critical technologies that compared to sort of the market reds 462 00:27:00,200 --> 00:27:02,840 Speaker 4: that Tom was talking about earlier that fueled sort of 463 00:27:02,840 --> 00:27:06,200 Speaker 4: the traditional US China trade battle. Now we're thinking about 464 00:27:06,280 --> 00:27:10,280 Speaker 4: information technology that lends a national security argument to some 465 00:27:10,320 --> 00:27:11,680 Speaker 4: of these same products. 466 00:27:12,480 --> 00:27:16,119 Speaker 2: So just thinking about things that have changed since the 467 00:27:16,160 --> 00:27:19,119 Speaker 2: Trump years twenty sixteen to twenty twenty. One of the 468 00:27:19,160 --> 00:27:22,520 Speaker 2: big things has to be Russia's invasion of Ukraine, and 469 00:27:22,600 --> 00:27:26,480 Speaker 2: I guess the sort of economic alliance that we've seen 470 00:27:27,000 --> 00:27:30,719 Speaker 2: between China and Russia emerged since then, and I'm wondering 471 00:27:30,840 --> 00:27:33,520 Speaker 2: We've obviously been focused a lot on the US China 472 00:27:33,680 --> 00:27:38,400 Speaker 2: relationships specifically, but could we potentially see the emergence of, 473 00:27:38,720 --> 00:27:41,600 Speaker 2: for lack of a better term, East West trade blocks. 474 00:27:42,000 --> 00:27:44,639 Speaker 3: I think that's a really interesting question, Tracy, and it 475 00:27:44,920 --> 00:27:49,200 Speaker 3: reminds me of the kind of the miscalculation that many 476 00:27:49,440 --> 00:27:52,960 Speaker 3: here in the United States made about the impact of 477 00:27:53,680 --> 00:27:57,880 Speaker 3: US sanctions and European sanctions on Russia in the days 478 00:27:58,080 --> 00:28:02,840 Speaker 3: after Plutin's tanks rolled across the border into Ukraine. You 479 00:28:02,840 --> 00:28:06,240 Speaker 3: remember back two years ago, there was sweeping sanctions, right, 480 00:28:06,520 --> 00:28:12,639 Speaker 3: Russia essentially locked out of the dollar financial market, Russian firms, 481 00:28:12,760 --> 00:28:16,880 Speaker 3: with some exceptions in energy, essentially locked out of trade 482 00:28:17,080 --> 00:28:20,640 Speaker 3: with the US and Europe. And at that moment there 483 00:28:20,680 --> 00:28:23,159 Speaker 3: was a rush to sort of call the collapse of 484 00:28:23,160 --> 00:28:26,840 Speaker 3: the Russian economy. Right, the US is sanctioning them, Europe 485 00:28:26,880 --> 00:28:30,920 Speaker 3: is sanctioning them, they can't participate in the global financial system. 486 00:28:31,240 --> 00:28:34,679 Speaker 3: This must be the first moment of a crisis. And 487 00:28:34,760 --> 00:28:37,639 Speaker 3: in fact, two years on, we can see that the 488 00:28:37,720 --> 00:28:40,600 Speaker 3: sanctions and these controls have certainly had a negative impact 489 00:28:40,640 --> 00:28:44,200 Speaker 3: on Russia. But it's certainly not tipped them into crisis. 490 00:28:44,880 --> 00:28:47,600 Speaker 3: Why is that, Well, I think the unfortunate reality for 491 00:28:47,680 --> 00:28:52,240 Speaker 3: policymakers here in DC and in Brussels is that they 492 00:28:52,320 --> 00:28:55,200 Speaker 3: no longer have the same impact that they once did. 493 00:28:55,440 --> 00:28:58,800 Speaker 3: And the reason for that is because of China and 494 00:28:58,840 --> 00:29:02,400 Speaker 3: to a lesser extent, India, which has also maintained more 495 00:29:02,480 --> 00:29:06,239 Speaker 3: or less normal trading relations with Russia. And so what 496 00:29:06,280 --> 00:29:12,280 Speaker 3: that suggests is that as China rises, and as India rises, 497 00:29:12,320 --> 00:29:15,760 Speaker 3: and other major emerging markets which don't necessarily fall into 498 00:29:15,880 --> 00:29:19,120 Speaker 3: line with DC start playing a bigger role in the 499 00:29:19,120 --> 00:29:23,720 Speaker 3: global economy, the capacity of the United States and its 500 00:29:23,760 --> 00:29:28,680 Speaker 3: allies to shape outcomes for particular countries by imposing sanctions 501 00:29:28,800 --> 00:29:33,600 Speaker 3: or tariffs becomes that much less. And to your question, Tracy, yes, 502 00:29:33,920 --> 00:29:37,360 Speaker 3: that possibility of an East West trade block is very 503 00:29:37,440 --> 00:29:41,760 Speaker 3: much there. Bad for global growth, but a buffer for 504 00:29:41,840 --> 00:29:45,040 Speaker 3: countries that find themselves at the wrong end of US 505 00:29:45,120 --> 00:29:46,160 Speaker 3: economic statecraft. 506 00:29:46,480 --> 00:29:50,040 Speaker 4: And China's alignment with Russia has actually lent a lot 507 00:29:50,080 --> 00:29:53,800 Speaker 4: more credence to US arguments about the national security risks 508 00:29:54,200 --> 00:29:57,360 Speaker 4: that a lot of European allies have been lukewarm on 509 00:29:57,520 --> 00:30:00,800 Speaker 4: for some time. So you know, they've seen as a 510 00:30:00,880 --> 00:30:05,800 Speaker 4: market opportunity, not necessarily the geopolitical threat that Washington sees, 511 00:30:06,240 --> 00:30:09,080 Speaker 4: but they've started to pay more attention to US warnings, 512 00:30:09,120 --> 00:30:13,200 Speaker 4: particularly about the risk of invasion of Taiwan, since they've 513 00:30:13,200 --> 00:30:16,360 Speaker 4: felt this pressure from Russia and then the alignment between 514 00:30:16,400 --> 00:30:19,000 Speaker 4: those two powers. And you know, one of the best 515 00:30:19,080 --> 00:30:21,680 Speaker 4: examples of this is in order for the US to 516 00:30:21,880 --> 00:30:25,840 Speaker 4: restrict China's access to advanced semiconductors, they had to get 517 00:30:25,960 --> 00:30:29,040 Speaker 4: key allies with key companies in the supply chain on board. 518 00:30:29,440 --> 00:30:32,520 Speaker 4: One of the best examples is ASML, the leading maker 519 00:30:32,640 --> 00:30:35,440 Speaker 4: of chip making equipment, which is based in the Netherlands. 520 00:30:35,920 --> 00:30:38,520 Speaker 4: And if the US is going to prevent China from 521 00:30:38,520 --> 00:30:41,640 Speaker 4: developing advanced chips, they have to convince the Dutch government 522 00:30:41,920 --> 00:30:45,800 Speaker 4: to block ASML from sending the most high tech machines 523 00:30:45,840 --> 00:30:49,120 Speaker 4: over to China. And so this sort of increasing threat 524 00:30:49,120 --> 00:30:52,560 Speaker 4: from Russia, where a company like ASML might say, we 525 00:30:52,640 --> 00:30:56,800 Speaker 4: want to trade China's a fantastic customer. China just became 526 00:30:56,880 --> 00:30:59,640 Speaker 4: sort of proportionally the largest share of ASML sales just 527 00:31:00,000 --> 00:31:02,720 Speaker 4: a month or two ago. The alignment between China and 528 00:31:02,800 --> 00:31:05,840 Speaker 4: Russia has sort of helped bring European powers around to 529 00:31:05,880 --> 00:31:08,560 Speaker 4: the idea that no, China does pose a significant risk 530 00:31:08,840 --> 00:31:12,160 Speaker 4: if they invade Taiwan, which houses the world pre eminent 531 00:31:12,280 --> 00:31:14,960 Speaker 4: chip maker where we get all of the most advanced 532 00:31:15,040 --> 00:31:17,840 Speaker 4: chips that power all of our most advanced technology. That 533 00:31:18,000 --> 00:31:20,360 Speaker 4: is a threat that we need your alignment on, Tom. 534 00:31:20,680 --> 00:31:22,959 Speaker 1: I know when trade deals are crafted, when people think 535 00:31:23,000 --> 00:31:26,480 Speaker 1: about tariffs, the actual country of origin for a given 536 00:31:26,560 --> 00:31:29,640 Speaker 1: good is always people try to figure that out essentially, 537 00:31:29,720 --> 00:31:32,040 Speaker 1: so that you know, if we want to restrict Chinese 538 00:31:32,080 --> 00:31:34,880 Speaker 1: exports to the US, that they can't just like land 539 00:31:34,920 --> 00:31:38,040 Speaker 1: in Mexico first and then across the border and say 540 00:31:38,040 --> 00:31:40,880 Speaker 1: it's to Mexican good. But we do know that imports 541 00:31:40,880 --> 00:31:43,440 Speaker 1: into the US from Mexico have been surging, and as 542 00:31:43,480 --> 00:31:46,120 Speaker 1: you mentioned, Mexico could be a beneficiary if they were 543 00:31:46,200 --> 00:31:49,320 Speaker 1: cut off. Like, how leaky is that? And to what 544 00:31:49,440 --> 00:31:54,120 Speaker 1: degree can other countries other destinations be de facto yes, 545 00:31:54,160 --> 00:31:56,880 Speaker 1: we're importing from Mexico, but really this is a continuation 546 00:31:56,960 --> 00:31:58,040 Speaker 1: of importing from China. 547 00:31:58,360 --> 00:32:00,640 Speaker 3: Yeah, that's a really good question, Joe. It reminds me 548 00:32:00,680 --> 00:32:03,520 Speaker 3: of a funny moment in a Chinese novel I read 549 00:32:03,560 --> 00:32:06,920 Speaker 3: a few years ago, Shandi or Brothers, and there's a 550 00:32:06,920 --> 00:32:09,000 Speaker 3: moment in the novel where there's a kind of rise 551 00:32:09,040 --> 00:32:12,800 Speaker 3: in anti Japanese sentiment in China, and there's a violent 552 00:32:12,920 --> 00:32:16,120 Speaker 3: mob that goes out and tries to smash Japanese products, 553 00:32:16,600 --> 00:32:18,560 Speaker 3: and they're on the cusp of smashing what they think 554 00:32:18,640 --> 00:32:21,840 Speaker 3: is a Japanese car, and one of the characters says, wait, 555 00:32:22,760 --> 00:32:26,480 Speaker 3: this car was made of the joint venture enterprise in China, 556 00:32:27,200 --> 00:32:29,800 Speaker 3: and then another protagonist says, Okay, let's just smash half 557 00:32:29,840 --> 00:32:33,360 Speaker 3: of it. And I think that's kind of like that's 558 00:32:33,360 --> 00:32:35,920 Speaker 3: the reality of global trade, right, I mean, the sort 559 00:32:35,960 --> 00:32:40,280 Speaker 3: of the classic example is the iPhone technology and branding 560 00:32:40,320 --> 00:32:45,080 Speaker 3: here in the United States. Semiconductors from Taiwan snaps together 561 00:32:45,480 --> 00:32:48,200 Speaker 3: in mainland China. If there's going to be a trade war, 562 00:32:48,600 --> 00:32:50,440 Speaker 3: which bit of it are you going to impact? 563 00:32:50,520 --> 00:32:50,680 Speaker 4: Right? 564 00:32:50,800 --> 00:32:54,120 Speaker 3: Well, the reality is that you can't impact one bit 565 00:32:54,160 --> 00:32:57,720 Speaker 3: of it without impacting another. We're seeing some of that 566 00:32:57,800 --> 00:33:01,360 Speaker 3: complexity playing out in different ways in the years since 567 00:33:01,400 --> 00:33:05,240 Speaker 3: the Trump tariffs came into place. We're seeing Chinese companies 568 00:33:05,280 --> 00:33:09,320 Speaker 3: setting up shop in Vietnam, Chinese companies attempting to set 569 00:33:09,400 --> 00:33:13,000 Speaker 3: up shop in Mexico so they'd be exporting from those 570 00:33:13,040 --> 00:33:16,920 Speaker 3: countries to the United States dodging the Trump tariffs, But 571 00:33:16,960 --> 00:33:20,040 Speaker 3: where does the revenue go, in many cases still going 572 00:33:20,080 --> 00:33:24,239 Speaker 3: to those Chinese firms. It's a complex system, and that 573 00:33:24,320 --> 00:33:27,000 Speaker 3: makes it that much harder to wield these tools of 574 00:33:27,040 --> 00:33:31,120 Speaker 3: economic state craft without creating some unintended collateral damage. 575 00:33:31,160 --> 00:33:33,120 Speaker 4: And there's always the question of how deep in the 576 00:33:33,120 --> 00:33:35,120 Speaker 4: supply chain are you going to go when you think 577 00:33:35,120 --> 00:33:37,640 Speaker 4: about chips or you think about evs, down to the 578 00:33:37,760 --> 00:33:41,000 Speaker 4: raw components, the minerals. I mean, China has been snapping 579 00:33:41,040 --> 00:33:43,640 Speaker 4: up mines across the world. And if you say we 580 00:33:43,720 --> 00:33:47,200 Speaker 4: don't want any Chinese investment anywhere in the supply chain 581 00:33:47,240 --> 00:33:49,080 Speaker 4: for any of the goods that we're going to subsidize 582 00:33:49,160 --> 00:33:51,440 Speaker 4: or even allow to be impoured into the US, you 583 00:33:51,480 --> 00:33:53,120 Speaker 4: could end up with zero goods at all. 584 00:33:53,960 --> 00:33:57,840 Speaker 2: So, on the one hand, we have Trump running on 585 00:33:57,960 --> 00:34:01,960 Speaker 2: this idea of sixty percent tariffs on China, maybe more, 586 00:34:02,120 --> 00:34:06,400 Speaker 2: plus perhaps a ten percent ring fence on all imports 587 00:34:06,400 --> 00:34:10,719 Speaker 2: into America. On the other hand, you have the Biden administration, 588 00:34:10,960 --> 00:34:14,319 Speaker 2: which is already in office and has already continued some 589 00:34:14,520 --> 00:34:20,160 Speaker 2: quite stringent restrictions on China. When you talk to policymakers 590 00:34:20,280 --> 00:34:22,960 Speaker 2: in China, or when you look at surveys of the 591 00:34:23,080 --> 00:34:27,640 Speaker 2: domestic Chinese population, what do they say about their preferred candidate? 592 00:34:27,719 --> 00:34:29,480 Speaker 2: Do they express a preference? 593 00:34:29,920 --> 00:34:33,560 Speaker 4: So we cite a survey in our story, an online 594 00:34:33,560 --> 00:34:36,120 Speaker 4: survey figured out trying to figure out how the Chinese 595 00:34:36,160 --> 00:34:40,040 Speaker 4: public feels about the upcoming US vote, and about sixty 596 00:34:40,080 --> 00:34:44,359 Speaker 4: percent of the respondent's preferred Trump. But it wasn't that, 597 00:34:44,680 --> 00:34:47,439 Speaker 4: you know, his China plans stack up better for them 598 00:34:47,560 --> 00:34:50,799 Speaker 4: against Biden's, but they thought that he would ease the 599 00:34:50,840 --> 00:34:56,360 Speaker 4: pressure on China by bringing chaos to America. 600 00:34:57,520 --> 00:35:00,799 Speaker 1: Well, we'll see what happened, mackenzie, and thank you so 601 00:35:00,960 --> 00:35:03,960 Speaker 1: much for coming on. Fascinating work. Everyone should go read 602 00:35:04,040 --> 00:35:06,920 Speaker 1: your Big Take article out on the Bloomberg now and 603 00:35:07,320 --> 00:35:09,240 Speaker 1: we'll have to have you both back on Odd Lots 604 00:35:09,520 --> 00:35:12,360 Speaker 1: maybe after the November election. We'll see what happening. 605 00:35:12,440 --> 00:35:13,480 Speaker 4: Thanks so much for having us. 606 00:35:13,640 --> 00:35:27,480 Speaker 5: Thanks Jay, Thanks Tracy, Tracy. 607 00:35:27,520 --> 00:35:29,120 Speaker 1: I thought that was great. There was a lot interesting 608 00:35:29,280 --> 00:35:31,120 Speaker 1: in there. One thing that I'll pick out that was 609 00:35:31,160 --> 00:35:35,480 Speaker 1: sort of something McKenzie said about. Even as these economic 610 00:35:35,560 --> 00:35:39,279 Speaker 1: constraints have grown, there has been some other progress like 611 00:35:39,320 --> 00:35:43,640 Speaker 1: military to military communication, treasury to treasury communication, it reminds 612 00:35:43,680 --> 00:35:45,600 Speaker 1: me of something. You know, we talked to Adam Posen 613 00:35:45,840 --> 00:35:49,480 Speaker 1: generation and that was one of his concerns about trade wars, 614 00:35:49,520 --> 00:35:52,840 Speaker 1: which is that trade freedom doesn't necessarily lead to peace, 615 00:35:53,080 --> 00:35:56,960 Speaker 1: but trade constraints can create geopolitical problems. 616 00:35:56,640 --> 00:35:58,000 Speaker 2: Right, which makes a lot of sense. 617 00:35:58,239 --> 00:35:58,439 Speaker 4: Well. 618 00:35:58,680 --> 00:36:01,120 Speaker 2: On that note, the other thing that both of them 619 00:36:01,160 --> 00:36:04,240 Speaker 2: really emphasized was this idea of China sort of in 620 00:36:04,360 --> 00:36:08,040 Speaker 2: a sweet spot for this kind of trade restriction, where 621 00:36:08,400 --> 00:36:11,200 Speaker 2: you do have concerns over the loss of jobs and 622 00:36:11,280 --> 00:36:13,600 Speaker 2: manufacturing that have been going on for decades, but then 623 00:36:13,640 --> 00:36:16,560 Speaker 2: on the other hand, you do have the strategic concerns 624 00:36:16,600 --> 00:36:19,759 Speaker 2: strategically important industries. Is the US going to be able 625 00:36:19,760 --> 00:36:23,560 Speaker 2: to compete on semiconductors or clean energy tech? And also 626 00:36:24,239 --> 00:36:27,439 Speaker 2: that military aspect of it. So it sort of makes 627 00:36:27,480 --> 00:36:30,520 Speaker 2: sense why the US would focus on China and why 628 00:36:30,600 --> 00:36:33,000 Speaker 2: it's politically appealing totally. 629 00:36:33,200 --> 00:36:35,600 Speaker 1: Can I express an unpopular opinion? I don't know if 630 00:36:35,600 --> 00:36:37,799 Speaker 1: it's unpopular. I just don't hear many people say it. 631 00:36:38,400 --> 00:36:40,919 Speaker 1: I really believe that if there's you know, if there's 632 00:36:40,960 --> 00:36:43,239 Speaker 1: one country in the world that could do true like 633 00:36:43,320 --> 00:36:46,360 Speaker 1: odd tarchy, like it's obviously the US, right, like it 634 00:36:46,400 --> 00:36:49,680 Speaker 1: would probably be very economically harmful to literally no longer 635 00:36:49,719 --> 00:36:50,560 Speaker 1: trade with the world. 636 00:36:50,640 --> 00:36:53,600 Speaker 2: Just to be clear, you are not recommended, but as 637 00:36:53,640 --> 00:36:54,879 Speaker 2: a thought expert. 638 00:36:54,880 --> 00:36:57,920 Speaker 1: Thought experiment, if there's one place that is all the food, 639 00:36:58,600 --> 00:37:01,720 Speaker 1: all of the minerals, all the oil, all the natural gas, 640 00:37:01,760 --> 00:37:04,160 Speaker 1: all the talent and companies, all of the high tech. Like, 641 00:37:04,200 --> 00:37:06,279 Speaker 1: if there's one place that I think could plausibly pull 642 00:37:06,280 --> 00:37:10,200 Speaker 1: it off, it's clearly the US. So like, again, this 643 00:37:10,239 --> 00:37:12,640 Speaker 1: is not me making a policy recommendation. I just think, 644 00:37:12,680 --> 00:37:15,000 Speaker 1: like I think we could. It would be very disruptive, 645 00:37:15,080 --> 00:37:17,360 Speaker 1: and I'm not in favorite, but I think we could survive. 646 00:37:17,600 --> 00:37:20,080 Speaker 2: Someone is going to take that quote completely out of 647 00:37:20,120 --> 00:37:21,880 Speaker 2: context and tweet it. 648 00:37:22,120 --> 00:37:22,279 Speaker 4: Well. 649 00:37:22,320 --> 00:37:24,120 Speaker 2: The one other thing I was thinking, and it's a 650 00:37:24,160 --> 00:37:26,719 Speaker 2: shame we didn't get into this, but maybe we should 651 00:37:26,760 --> 00:37:29,719 Speaker 2: do an episode more related to this down the road. 652 00:37:29,920 --> 00:37:33,879 Speaker 2: But I never quite figured out Trump's policy on currency, 653 00:37:34,160 --> 00:37:37,759 Speaker 2: because he seemed to switch or vary between wanting a 654 00:37:37,760 --> 00:37:40,480 Speaker 2: strong dollar because it sounds good to have a strong dollar, 655 00:37:40,680 --> 00:37:43,520 Speaker 2: but then also wanting a week dollar to because it's 656 00:37:43,520 --> 00:37:44,160 Speaker 2: good FORCT for it. 657 00:37:44,320 --> 00:37:47,120 Speaker 1: You know, that's very funny because right like strong dollar, 658 00:37:47,160 --> 00:37:49,920 Speaker 1: it sounds very trumpy. Right, but he also hit some 659 00:37:50,040 --> 00:37:52,320 Speaker 1: like intuitions that it wasn't quite right, and even I 660 00:37:52,400 --> 00:37:56,239 Speaker 1: remember once on the campaign trail he said something to 661 00:37:56,280 --> 00:37:58,520 Speaker 1: the effect of like, yeah, i'd like want a week dollar. 662 00:37:58,640 --> 00:38:00,839 Speaker 1: It's good for borrowing, it's good for exports. It's one 663 00:38:00,880 --> 00:38:04,120 Speaker 1: of those things where like it's counterintuitive but also makes sense. Yeah, 664 00:38:04,160 --> 00:38:06,520 Speaker 1: it's not reetorted. No one rhetorically wants to come on 665 00:38:06,640 --> 00:38:08,960 Speaker 1: for a week dollar, but it's. 666 00:38:08,800 --> 00:38:11,360 Speaker 2: He never quite made up his mind. Well, maybe if 667 00:38:11,400 --> 00:38:14,080 Speaker 2: someone will ask him about that on the campaign trail. 668 00:38:13,920 --> 00:38:16,600 Speaker 1: Maybe he'll come on odd Lots talk about his currency policy. 669 00:38:16,640 --> 00:38:18,960 Speaker 2: All right. In the meantime, shall we leave it there? 670 00:38:19,040 --> 00:38:19,759 Speaker 1: Let's leave it there. 671 00:38:19,920 --> 00:38:23,040 Speaker 2: This has been another episode of the Audthlots podcast. I'm 672 00:38:23,080 --> 00:38:26,320 Speaker 2: Tracy Alloway. You can follow me at Tracy Alloway. 673 00:38:26,040 --> 00:38:29,000 Speaker 1: And I'm Jill Wisenthal. You can follow me at the Stalwart. 674 00:38:29,200 --> 00:38:33,520 Speaker 1: Follow our guest McKenzie Hawkins, she's at Matt Hawk. Followed 675 00:38:33,640 --> 00:38:38,080 Speaker 1: tom Orlick at tom Orlick. Follow our producers Carman Rodriguez 676 00:38:38,120 --> 00:38:40,960 Speaker 1: at Carman Erman, dash El, Bennett at Dashbot and cal 677 00:38:41,040 --> 00:38:43,800 Speaker 1: Brooks at cal Brooks. Thank you to our producer Moses 678 00:38:43,840 --> 00:38:46,799 Speaker 1: Onam for more Oddlots content. Go to Bloomberg dot com 679 00:38:46,840 --> 00:38:49,880 Speaker 1: slash Oddlots, where we have a blog, transcripts and a newsletter. 680 00:38:50,280 --> 00:38:53,480 Speaker 1: And check out the discord discord dot gg slash odd 681 00:38:53,560 --> 00:38:56,239 Speaker 1: lots where you can chat with fellow listeners. Twenty four seven. 682 00:38:56,360 --> 00:38:58,839 Speaker 2: And if you enjoy Oddlots, if you like it when 683 00:38:58,840 --> 00:39:02,759 Speaker 2: we examine the Trump and Biden tariffs, then please leave 684 00:39:02,840 --> 00:39:06,360 Speaker 2: us a positive review on your favorite podcast platform. And 685 00:39:06,440 --> 00:39:09,279 Speaker 2: don't forget. If you are a Bloomberg subscriber, you can 686 00:39:09,320 --> 00:39:12,759 Speaker 2: listen to all of our episodes absolutely ad free. Just 687 00:39:12,800 --> 00:39:16,840 Speaker 2: connect your Bloomberg subscription to Apple Podcasts. Thanks for listening.