WEBVTT - Bloomberg Businessweek Weekend - January 24th, 2025 0:00:02.720 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.760 --> 0:00:12.800 This is Bloomberg Business Week Insight from the reporters and 0:00:12.960 --> 0:00:16.960 editors that bring you America's most trusted business magazine, plus 0:00:17.160 --> 0:00:20.959 global business, finance and tech news. The Bloomberg Business Week 0:00:20.960 --> 0:00:25.880 Podcast with Carol Masser and Tim Stenoveek on Bloomberg Radio. 0:00:27.440 --> 0:00:30.360 Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. 0:00:30.720 --> 0:00:33.680 We began a new chapter in American politics as this 0:00:33.720 --> 0:00:36.600 past Monday, Donald Trump was sworn in for a second time, 0:00:36.920 --> 0:00:39.360 and this time around as the forty seventh president of 0:00:39.360 --> 0:00:42.800 the United States. The President got right to work implementing 0:00:42.840 --> 0:00:46.680 many of his campaign pledges on immigration, energy, the military, 0:00:47.159 --> 0:00:51.159 the federal workforce, and more, many reversing the policies of 0:00:51.200 --> 0:00:52.839 his predecessor, Joe Biden. 0:00:53.240 --> 0:00:55.880 Some of these signed executive orders are aimed at ending 0:00:55.920 --> 0:01:00.440 automatic US citizenship for the children of undocumented migrants, withdrawing 0:01:00.440 --> 0:01:03.400 the US from the Paris Agreement on Climate change, and 0:01:03.440 --> 0:01:07.480 eliminating diversity, equity and inclusion efforts in the federal government. 0:01:07.760 --> 0:01:11.560 President Trump also signaled plans to impose previously threatened tariffs 0:01:11.880 --> 0:01:14.080 of as much as twenty five percent on Mexico and 0:01:14.200 --> 0:01:18.000 Canada and even widened his tariff threats to include China 0:01:18.040 --> 0:01:20.920 and the European Union. So for the next two hours 0:01:20.959 --> 0:01:24.160 we address some of President Trump's agenda and possible impacts, 0:01:24.520 --> 0:01:27.160 everything from the outlook for a third World war and 0:01:27.200 --> 0:01:30.320 the future of US supremacy to the Trump Trade. 0:01:30.520 --> 0:01:33.320 Also, as la continued to battle fires and the US 0:01:33.400 --> 0:01:36.240 South faced the worst snowstorm at one hundred and thirty years, 0:01:36.680 --> 0:01:40.880 extreme weather was top of mind. One former EPA administrator 0:01:40.920 --> 0:01:43.440 weighs in on what a second Trump term may mean 0:01:43.560 --> 0:01:46.360 for US climate policy, and with a new leader in 0:01:46.360 --> 0:01:48.920 the White House, we take a look at leadership, those 0:01:48.960 --> 0:01:51.920 who inspire and those who infuriate. 0:01:51.440 --> 0:01:52.920 And there are leaders that kind of do both, but 0:01:52.960 --> 0:01:54.800 we'll get into that a little bit later. On all 0:01:54.840 --> 0:01:57.360 of that to come, We begin, though, with the US 0:01:57.440 --> 0:02:02.480 economic and geopolitical policy Donald Trump. Details are just starting 0:02:02.480 --> 0:02:05.400 to trickle in on what sort of tariff's, immigration policies 0:02:05.440 --> 0:02:08.720 and tax cuts the new administration will implement, and with 0:02:08.760 --> 0:02:12.280 a Republican controlled Congress, albeit with a slim margin, it 0:02:12.360 --> 0:02:15.760 is likely many a President Trump's policies will be enacted. 0:02:16.240 --> 0:02:19.240 Looking at the geopolitical landscape, as Ed Price, a former 0:02:19.320 --> 0:02:22.840 British trade official, now non resident senior Fellow at NYU, 0:02:23.480 --> 0:02:26.320 ED has advised members of the European and British parliaments 0:02:26.600 --> 0:02:30.520 and writes regularly about politics, economic policy, and more. He 0:02:30.639 --> 0:02:34.200 joined US along with Bloomberg's David Gura on Inauguration Day. 0:02:34.480 --> 0:02:37.600 Donald Trump is right when he says he could probably 0:02:37.639 --> 0:02:41.000 avoid World War three, but the transaction in exchange for 0:02:41.040 --> 0:02:44.079 World War three is probably something to do with the republic, 0:02:44.200 --> 0:02:47.919 something to do with existing US soft power, So it's 0:02:47.960 --> 0:02:50.359 not a freebie. What I mean by that is that 0:02:50.400 --> 0:02:53.240 he has introduced this idea of an imperium, you know, 0:02:53.320 --> 0:02:55.959 absolutely bold, absolutely simple. There it is on the table. 0:02:56.440 --> 0:03:00.400 If we take Greenland and Panama, Panama SLA different. 0:03:00.400 --> 0:03:02.120 But if we take that, we treat those seriously. 0:03:02.560 --> 0:03:05.239 His team used to say take him seriously, but not literally. 0:03:05.240 --> 0:03:08.240 I think we should take him literally and seriously. Now, honestly, 0:03:09.160 --> 0:03:11.560 I do think that's that's something that he could do, 0:03:11.800 --> 0:03:15.359 might do, would do. Truman thought about it during the 0:03:15.360 --> 0:03:18.880 Second World War. Johnson, President Johnson back in the nineteenth century, 0:03:18.919 --> 0:03:21.360 thought about it. It's a meme. But if he did that, 0:03:21.400 --> 0:03:23.600 of course, I'm not sure that we wouldn't lose more 0:03:23.639 --> 0:03:26.799 in our soft power with this, you know, China and 0:03:26.880 --> 0:03:28.640 Russia and them turning around and saying, well, look it's 0:03:28.680 --> 0:03:30.640 fine to do that sort of thing. Then then we 0:03:30.639 --> 0:03:32.400 would gain I don't know what it is in Greenland 0:03:32.400 --> 0:03:33.560 that we would gain versus that. 0:03:34.680 --> 0:03:36.680 Was listening to Pods Save the World and Ben Rhodes, 0:03:36.760 --> 0:03:39.320 who hosts that, was talking a bit about presents through 0:03:39.400 --> 0:03:41.800 history and how acquisition of territory is something that kind 0:03:41.800 --> 0:03:44.040 of puts somebody into the history books automatically, and I 0:03:44.080 --> 0:03:46.200 was kind of listening to this speech watching it unfold 0:03:46.240 --> 0:03:49.080 with kind of an eye to that. Do you see 0:03:49.120 --> 0:03:51.400 similarly a president here who is more cognizant of his 0:03:51.440 --> 0:03:52.839 place in history than he might have been the first 0:03:52.840 --> 0:03:53.320 time around? 0:03:53.680 --> 0:03:57.720 Yes, absolutely, absolutely. I think that's a good observation. Donald 0:03:57.720 --> 0:04:00.480 Trump would like nothing more than to be added to 0:04:00.480 --> 0:04:05.080 Mount Rushmore. I've been there their space, and he would 0:04:05.120 --> 0:04:07.840 like nothing more than to be considered a strong leader. 0:04:08.040 --> 0:04:10.840 I almost said strong man. Okay, So I think he 0:04:10.920 --> 0:04:12.840 is thinking about that now. If we want to be 0:04:13.000 --> 0:04:17.880 entirely balanced, there is some sense to expanding territory right 0:04:17.960 --> 0:04:21.000 inverted commas that has been done in US history Louisiana, 0:04:21.040 --> 0:04:24.680 purchase Mexico, California and so on. It's just as I 0:04:24.720 --> 0:04:27.479 said before, what would be the cost now now that 0:04:27.520 --> 0:04:29.400 we are in twenty twenty five and we have a 0:04:29.400 --> 0:04:32.920 predominantly rules based order, at least for now, what is 0:04:32.960 --> 0:04:36.200 it that we gain from Greenland and Panama that we 0:04:36.400 --> 0:04:40.120 lose with Taiwan, Ukraine and wherever else? And I guess, 0:04:40.160 --> 0:04:41.200 like you know, I came in and said on the 0:04:41.200 --> 0:04:42.840 global elite, I don't think that's a good trade. 0:04:43.520 --> 0:04:46.160 We'll help us unpack that a little bit. Specifically with 0:04:46.200 --> 0:04:49.240 regard to Greenland. What would we get as Greenland as 0:04:49.279 --> 0:04:51.840 an asset to the US, and would the US be 0:04:51.880 --> 0:04:53.200 able to do that with soft power? 0:04:54.160 --> 0:04:55.479 The way I would have done it is I would 0:04:55.520 --> 0:04:58.080 have called Denmark. I would have said to them, listen, 0:04:58.120 --> 0:05:00.479 you're tiny, we're huge. Why don't we give you the 0:05:00.520 --> 0:05:02.520 six hundred million or whatever it is, or double it 0:05:02.640 --> 0:05:05.240 every year. You don't have to worry. We already have bases. 0:05:05.440 --> 0:05:07.520 We can finagle it. And I think there are many 0:05:07.520 --> 0:05:09.320 ways that the United States does that around the world 0:05:09.360 --> 0:05:12.720 today anyway, the United Kingdom in some ways is a garrison. 0:05:13.080 --> 0:05:17.440 Germany is a garrison. Japan was basically conquered, right, so 0:05:17.440 --> 0:05:19.599 we already do this. We don't need to say that 0:05:19.640 --> 0:05:23.320 we're doing it now. If we did. You know, again, 0:05:23.400 --> 0:05:25.040 this is science fiction. But if we did say, right, 0:05:25.080 --> 0:05:28.680 turn the troops over to Greenland, it's ours now, that 0:05:28.720 --> 0:05:31.640 would inaugurate all sorts of hell in the world. Because, 0:05:31.680 --> 0:05:33.599 of course other people would do exactly the same thing 0:05:34.120 --> 0:05:36.480 you'd have. Japan would have to get nuclear weapons immediately, 0:05:36.760 --> 0:05:40.400 probably Germany as well. God knows what Aram would do, 0:05:40.480 --> 0:05:43.800 and the Monroe doctri aforementioned would have to be enforced. 0:05:44.960 --> 0:05:49.680 Okay, so let's go to Panama and your anticipation of 0:05:50.040 --> 0:05:50.919 what happens there. 0:05:50.960 --> 0:05:54.680 Does he have some points to be made here? 0:05:54.839 --> 0:05:59.960 Or I think the Panama Canal was designed from naval purposes, right, 0:06:00.200 --> 0:06:02.040 so that we can move our fleet around the world. 0:06:02.080 --> 0:06:05.240 That was the original Roosevelt's idea. I don't see that 0:06:05.720 --> 0:06:08.360 it's necessary right now to say that we can't do that. 0:06:08.440 --> 0:06:10.839 I think we can. He said something about China controlling 0:06:10.880 --> 0:06:12.599 the conc I mean goodness. 0:06:12.360 --> 0:06:14.240 For goodness speech and the inaugural part two. 0:06:14.480 --> 0:06:16.560 Yes, yes, what an address that will ask to echo 0:06:16.600 --> 0:06:19.279 through the ages. No, I don't and I sort of 0:06:19.279 --> 0:06:20.800 I've been googling that trying to find out if that's true. 0:06:20.800 --> 0:06:22.360 I don't think it is true, right, So no, I 0:06:22.360 --> 0:06:24.560 don't think it's true. So there's all sorts of nonsense. 0:06:25.000 --> 0:06:26.920 And as I understand it, the treaty does allow us 0:06:26.960 --> 0:06:30.520 to go back anyway if we really need to. But 0:06:30.520 --> 0:06:32.480 but I guess the point for me is that as 0:06:32.520 --> 0:06:36.200 we look at Trump's vision of this American imperium, it 0:06:36.279 --> 0:06:39.479 contradicts so many of the macroeconomic policies that he's actually 0:06:39.480 --> 0:06:43.440 also floating. For example, keeping the dollar standard, this is one. 0:06:43.440 --> 0:06:44.880 I mean, I know you guys think about this, but 0:06:45.120 --> 0:06:46.760 he says, on the one hand, I want to maintain 0:06:46.800 --> 0:06:49.960 the international dollar standard. That's critical. But on the other hand, 0:06:50.000 --> 0:06:53.080 I'm going to start denying other countries, you know, the 0:06:53.160 --> 0:06:56.360 dollar through these incredible new tariffs. I mean, that ultimately 0:06:56.360 --> 0:06:59.640 doesn't jibe, right, So there are these huge contradictions running 0:06:59.640 --> 0:07:02.159 through this thing. I think we should take him seriously 0:07:02.200 --> 0:07:03.799 in everything that he says, but they don't make sense. 0:07:04.600 --> 0:07:07.719 We've talked a little bit about tariffs and trade policy, 0:07:07.720 --> 0:07:09.440 and I wonder how you see that factoring into the 0:07:09.440 --> 0:07:11.960 conversation that we're having here. So if we take your 0:07:12.320 --> 0:07:15.680 lead here on this American imperium. What do you make 0:07:15.720 --> 0:07:17.840 of what he's floated thus far? Do you see the 0:07:17.920 --> 0:07:21.559 rhetoric as punitive for the point of negotiation, putitive because 0:07:21.600 --> 0:07:26.160 he intends to show force to these allies and whatever come, 0:07:26.200 --> 0:07:28.360 whatever may. How do you process sort of what he's 0:07:28.360 --> 0:07:30.600 said so far? How much does that bombas to or 0:07:30.600 --> 0:07:32.239 a rhetoric translate to actual policies? 0:07:32.280 --> 0:07:34.720 Do you think, Listen, I don't think he understands what 0:07:34.760 --> 0:07:37.400 a tariff is, Okay, get in trouble saying this. I 0:07:37.440 --> 0:07:39.960 think he thinks that a tariff is a great big 0:07:40.000 --> 0:07:42.640 stick that you can permanently beat your opponent over the 0:07:42.680 --> 0:07:44.840 head with. I don't think he understands that the supply 0:07:44.920 --> 0:07:47.920 side over time would shift and these supply chains would change, 0:07:48.560 --> 0:07:51.800 and that goes the same for these you know, the 0:07:51.880 --> 0:07:54.760 currency that other countries need, they wouldn't get. Okay, So 0:07:54.920 --> 0:07:57.440 it really doesn't make sense if he wants to take 0:07:57.480 --> 0:08:00.200 his own tariff policy seriously, he needs to continue you 0:08:00.200 --> 0:08:03.960 and expand Joe Biden's industrial policy, right, because then you 0:08:04.080 --> 0:08:06.920 quickly develop your US supply side. You get these cars 0:08:06.920 --> 0:08:10.400 he's talking about, You get all that going and so 0:08:10.960 --> 0:08:13.360 I would suggest that he takes this seriously because he 0:08:13.400 --> 0:08:16.480 doesn't understand what he's saying. All right, So that's all 0:08:16.560 --> 0:08:17.720 very well and good for me to sit in your 0:08:17.720 --> 0:08:20.240 studio and say that as a commentator, right, as a punt, 0:08:20.680 --> 0:08:23.200 But it doesn't make sense, particularly not against what he's 0:08:23.200 --> 0:08:24.800 saying about the dollar standard at all. 0:08:25.560 --> 0:08:29.080 So okay, So markets certainly are and investors are pretty 0:08:29.080 --> 0:08:31.440 smart and they will parse through some of this. But 0:08:31.480 --> 0:08:35.920 when you're getting conflicting messages, what do investors do in 0:08:35.960 --> 0:08:36.720 that environment? 0:08:36.840 --> 0:08:39.400 Like, how do you figure out what's reality? 0:08:40.440 --> 0:08:44.360 I would imagine that sophisticated investors, more sophisticated than I, 0:08:44.440 --> 0:08:47.120 are wondering about when to get out of anything. Right, 0:08:47.240 --> 0:08:51.000 And you can follow this narrative, this Trump narrative, this 0:08:51.080 --> 0:08:54.200 Trump curve up, and we saw that with equities. But 0:08:54.240 --> 0:08:57.120 you're going to start seeing these contradictions appear, and at 0:08:57.120 --> 0:08:59.160 that point, I think people will start getting out of things. 0:08:59.200 --> 0:09:02.960 They exit. I'll give you an example. Scott Besant. Okay, 0:09:03.200 --> 0:09:08.840 Treasury secretary pick, extremely smart, erudite guy. He's heads recently 0:09:08.960 --> 0:09:12.280 that tariffs are not inflationary in the aggregate, making reference 0:09:12.280 --> 0:09:15.120 to the Chicago School of monetarism, and you scratch your 0:09:15.160 --> 0:09:17.640 head and think, well, my goodness, me, like, that's not 0:09:17.679 --> 0:09:20.760 how Trump supporters or voters think, right, So there is 0:09:20.800 --> 0:09:23.160 this sugar rush. I think there will be some excitement. 0:09:23.160 --> 0:09:25.400 We've seen that in markets. You're right, But as these 0:09:25.400 --> 0:09:27.920 contradictions start working their way through the system, as you 0:09:27.960 --> 0:09:31.360 see this potential civil war between the sort of Trump purists, 0:09:31.400 --> 0:09:35.600 MAGA purists, and the established sensible Republicans who are also 0:09:35.600 --> 0:09:37.360 in the cabinet, as you see that sort of come 0:09:37.360 --> 0:09:39.640 to a head, I think that you'll see that in markets. 0:09:39.800 --> 0:09:41.480 And I'm not runing out of financial crisis at some 0:09:41.520 --> 0:09:42.360 point in his term. 0:09:42.559 --> 0:09:45.440 Truly, what would what would what would trigger that financial 0:09:45.480 --> 0:09:46.600 crist and what kind of crisis? 0:09:46.920 --> 0:09:48.520 Well, first of all, it might be that the FED 0:09:48.520 --> 0:09:50.800 turns around and says, look, CPI is going in the 0:09:50.880 --> 0:09:52.439 right direction. It's okay right now. 0:09:52.800 --> 0:09:54.640 Like three point two gave a story in the terminal 0:09:54.679 --> 0:09:56.840 that it's not popular that the idea that the next 0:09:56.880 --> 0:09:59.400 FED moves or possibly in the future could be higher. 0:09:59.600 --> 0:10:01.040 Well, this is what I'm saying. I think they could 0:10:01.040 --> 0:10:04.400 be higher. Right if they're watching the economy, unemployment of 0:10:04.440 --> 0:10:06.679 four percent of that lobby's against that, but I'm not 0:10:06.760 --> 0:10:09.520 ruling this out. And then at that point of course, 0:10:09.640 --> 0:10:11.560 japower would have to pull the rug out of anything 0:10:11.559 --> 0:10:16.920 that's considered a bubble. So jpow not Trump's friends, and 0:10:17.160 --> 0:10:20.120 markets nobody's friend if they decide that they're going to 0:10:20.120 --> 0:10:20.680 pull the rub on you. 0:10:20.679 --> 0:10:23.839 Anyway, when do you look at the international order as 0:10:23.880 --> 0:10:28.480 it stands? Who are the individuals that Donald Trump can 0:10:28.520 --> 0:10:31.560 have a conversation with or I guess conversely, who feels 0:10:31.559 --> 0:10:33.520 like he or she can have a frank conversation with 0:10:34.600 --> 0:10:40.320 this new president about multilateralism international affairs more broadly than that, 0:10:40.400 --> 0:10:42.439 who has his ear with whom does he have a 0:10:42.559 --> 0:10:45.920 kind of can he have a dialogue about the international order? 0:10:45.960 --> 0:10:46.440 More broadly? 0:10:47.160 --> 0:10:49.080 I was going to answer nobody. I was going to 0:10:49.080 --> 0:10:51.560 answer nobody. I don't think that's his plan. I was 0:10:51.559 --> 0:10:54.800 going through the list of world leaders in my head. Obviously, 0:10:54.800 --> 0:10:57.200 he wants to sit down with Putin and talk about 0:10:57.320 --> 0:10:59.920 ending the war in Ukraine. He probably wants to call 0:11:00.120 --> 0:11:02.840 She or visits she and talk about Taiwan. But I 0:11:02.880 --> 0:11:04.920 don't get the sense that this is the art of 0:11:04.960 --> 0:11:06.559 the deal. I get the sense that this is the 0:11:06.679 --> 0:11:09.160 art of the Act and he's just going to start 0:11:09.200 --> 0:11:11.080 doing things. He's also on the clock, right, I mean 0:11:11.080 --> 0:11:14.079 two years from now there'll be Senate elections. If he 0:11:14.120 --> 0:11:17.760 loses four seats, that's trouble too. So it's a really 0:11:17.760 --> 0:11:19.880 good question, but I think the answer is a bit disingenuous. 0:11:20.000 --> 0:11:22.200 Nobody he's not intending to do that. 0:11:22.960 --> 0:11:24.679 So then what does it mean for something like the 0:11:24.800 --> 0:11:27.440 Russia Ukraine War? So if he does sit down with 0:11:27.480 --> 0:11:30.920 President Putin, how do you possibly see that scenario playing out? 0:11:30.960 --> 0:11:32.920 Because the US, as we know, has been a big 0:11:32.960 --> 0:11:37.160 backer in terms of financial weapons right in terms for Ukraine. 0:11:37.240 --> 0:11:40.200 So how might that ultimately end? 0:11:40.720 --> 0:11:42.240 Well? Does it? Well? 0:11:42.280 --> 0:11:43.720 This is the question. I don't think we were a 0:11:43.720 --> 0:11:46.880 big enough backer. I think the United States fundamentally mishandled 0:11:46.880 --> 0:11:52.360 this question. In Ukraine. We seemed to accept Putin's nuclear framing. 0:11:52.920 --> 0:11:54.839 He said, listen, I've got these nuclear weapons, so I'm 0:11:54.880 --> 0:11:56.360 going in and we sort of said, all right, then 0:11:56.440 --> 0:11:59.319 we'll give out little bits and bobs of weapons. I 0:11:59.320 --> 0:12:00.680 think I said this before for in your show. I 0:12:00.720 --> 0:12:03.360 just would have handed everything to the Ukraine all in all, 0:12:03.360 --> 0:12:04.520 in long range go for it. 0:12:05.559 --> 0:12:07.760 Would you have sent American troops to. 0:12:07.800 --> 0:12:11.120 Absolutely I would have closed the airspace. Absolutely I would have. 0:12:11.559 --> 0:12:15.199 And I think if you if you present weakness to dictators, 0:12:15.280 --> 0:12:17.320 history has taught us that you get you get more 0:12:17.640 --> 0:12:19.240 in the way of annexations, you get more in the 0:12:19.240 --> 0:12:21.920 way of aggression. So I think so to answer your. 0:12:21.840 --> 0:12:24.720 Question exactly what Putt did right around. 0:12:24.720 --> 0:12:27.440 Exactly what he did, and we should have slapped him 0:12:27.440 --> 0:12:29.640 in twenty fourteen over the CRIMEA to be honest with you, 0:12:29.679 --> 0:12:31.360 so I don't know how it ends, probably at the 0:12:31.400 --> 0:12:37.320 negotiating table, probably not in a good way for Ukraine. 0:12:42.960 --> 0:12:46.520 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:46.600 --> 0:12:50.040 Live weekday afternoons from two to five pm Eastern Listen 0:12:50.080 --> 0:12:53.560 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:12:53.760 --> 0:12:56.400 or watch us Live on YouTube. 0:12:57.280 --> 0:12:59.920 We've been talking with Ed Price, former British trade official, 0:13:00.000 --> 0:13:03.000 well non resident senior fellow over at NYU and as 0:13:03.040 --> 0:13:05.480 we mind you, he has advised members of the European 0:13:05.480 --> 0:13:06.600 and British parliaments. 0:13:07.720 --> 0:13:09.400 We were talking in the break about kind of where 0:13:09.400 --> 0:13:10.440 we wanted to go next. 0:13:10.640 --> 0:13:12.880 Ed, and I do think a lot about US China relations, 0:13:12.880 --> 0:13:14.800 I mean the United States and China, the two biggest 0:13:14.800 --> 0:13:18.000 global economies when they do different things, A lot of 0:13:18.240 --> 0:13:20.440 other countries, a lot of companies feel it, a lot 0:13:20.480 --> 0:13:25.880 of investors feel it. How do you anticipate that relationship 0:13:25.960 --> 0:13:29.480 evolves during the next couple of years with Donald Trump? 0:13:29.600 --> 0:13:32.599 It's a great question, Carol. So you have two emperors 0:13:32.640 --> 0:13:37.360 eyeballing each other across the ocean, both of whom think, believe, 0:13:37.480 --> 0:13:41.040 indeed that the other should bow down to the other. 0:13:41.160 --> 0:13:42.760 That is a way of saying, of course, that Shi 0:13:42.880 --> 0:13:46.920 Jinpin and Trump believe themselves to be powerful individuals who 0:13:46.920 --> 0:13:49.320 deserve respect from the other. And it's another way of 0:13:49.320 --> 0:13:53.360 saying that both China and the US consider themselves to 0:13:53.440 --> 0:13:56.800 be the conservative power. It depends on the horizon, right, 0:13:56.840 --> 0:13:58.199 So if you look at things from a sort of 0:13:58.200 --> 0:14:01.160 one hundred year horizon, the United States is the conservative 0:14:01.240 --> 0:14:03.920 power in the region, trying to uphold the existing order. 0:14:04.200 --> 0:14:06.080 If you look at things from a three hundred or 0:14:06.080 --> 0:14:08.760 more year horizon, of course, China was their first and 0:14:08.800 --> 0:14:10.959 who on earth are we right? We're sort of flash 0:14:11.000 --> 0:14:15.680 in the pan. So China US relations are extremely complex. 0:14:15.760 --> 0:14:19.200 I think they will get more combative, and ultimately the 0:14:19.240 --> 0:14:21.680 pinch point will be something in the south China Sea 0:14:21.760 --> 0:14:24.760 or Taiwan. When the Chinese come to the United States, 0:14:24.880 --> 0:14:27.720 my interpretation is that we're having an argument. I don't 0:14:27.760 --> 0:14:30.520 think that they would come if we weren't, And if 0:14:30.560 --> 0:14:32.680 they weren't here, I would be more relaxed about the 0:14:32.680 --> 0:14:34.080 forward path of our relationship. 0:14:34.920 --> 0:14:37.640 It's axiomatic they weren't here, Yeah, I'd be. 0:14:37.680 --> 0:14:39.560 Like, okay, So you know, when you really argue with someone, 0:14:39.640 --> 0:14:41.040 you go over to their house and say we need 0:14:41.080 --> 0:14:44.360 to talk, right And I would assume that's why they're here. 0:14:44.440 --> 0:14:46.520 Sigin Pin was invited, by the way and didn't come, 0:14:46.560 --> 0:14:48.880 which probably would have been a breach of protocol on 0:14:48.880 --> 0:14:49.400 some level. 0:14:49.880 --> 0:14:52.040 But there is a. 0:14:52.200 --> 0:14:56.120 Fundamental difference between the United States current interest in the 0:14:56.160 --> 0:14:58.840 South China Sea and in the world versus what the 0:14:58.920 --> 0:15:02.560 Chinese are proposing. Right now, we are on a collision course. 0:15:03.480 --> 0:15:06.160 As I said earlier, Donald Trump, President Trump, to be 0:15:06.200 --> 0:15:09.320 fair to him, sees this, understands this. It probably takes 0:15:09.320 --> 0:15:11.040 a con man to spot a con and I think 0:15:11.080 --> 0:15:13.880 that's why he put his hand up earlier in history 0:15:13.960 --> 0:15:17.280 in twenty sixteen, seventeen eighteen about tariffs. But to be 0:15:17.280 --> 0:15:20.680 fair to him, he sees the world through real politique lens. 0:15:20.960 --> 0:15:23.520 He sees the world through a power lens. He knows 0:15:23.520 --> 0:15:26.160 what the Chinese want to do. He might avoid a 0:15:26.160 --> 0:15:29.160 conflict with China, but it would probably mean giving them 0:15:29.200 --> 0:15:31.520 what they want in exchange for a freer hand in 0:15:31.560 --> 0:15:33.400 the rest of the world. I don't think that trade 0:15:33.440 --> 0:15:35.520 works because I think we're already on top. 0:15:36.280 --> 0:15:38.600 I had an opportunity to have some conversations with the 0:15:38.600 --> 0:15:42.400 outgoing Secretary of State and Treasury Secretary, and what each 0:15:42.440 --> 0:15:45.880 of them stressed is the importance of rebuilding and reanimating 0:15:45.920 --> 0:15:48.000 a conduit of communication, because I think that they saw 0:15:48.000 --> 0:15:50.520 what you were alluding to, that is this collision course, 0:15:50.840 --> 0:15:52.920 a fear that if there was no red phone to 0:15:52.920 --> 0:15:55.160 pick up or way to contact a Chinese official or 0:15:55.200 --> 0:15:58.520 an American official, vice versa, that could be really cataclysmic. 0:15:58.560 --> 0:16:00.840 And something both of those individuals tall was they were 0:16:00.840 --> 0:16:03.760 really trying to impress upon their successors the importance of 0:16:03.800 --> 0:16:06.800 having that Are you at all optimistic that that view 0:16:06.880 --> 0:16:09.280 one out that there can be this kind of pugilistic rhetoric, 0:16:09.960 --> 0:16:13.040 but there may be in a Marco Rubio or it 0:16:13.080 --> 0:16:14.880 as Scott Bess and an awareness of the fact that 0:16:14.920 --> 0:16:16.920 at least, having any means by which you can talk 0:16:16.960 --> 0:16:20.400 to your counterpart is useful from a negotiating standpoint. 0:16:20.680 --> 0:16:22.920 So the wonderful thing about the Bloomberg terminal is that 0:16:22.960 --> 0:16:26.520 it is information rich, as our markets and your market 0:16:26.520 --> 0:16:30.120 listeners have so much information at the fingertips. My limited 0:16:30.160 --> 0:16:32.320 experience of policy and policy making is that it is 0:16:32.400 --> 0:16:36.680 information low, information poor. And I don't see that we 0:16:36.800 --> 0:16:39.200 have enough of a conduit with the Chinese right now 0:16:39.200 --> 0:16:41.520 to avoid that sort of thing. I mean, Christ Jeff 0:16:41.520 --> 0:16:45.600 basically sent Kennedy a facts right or two factxes, and 0:16:45.640 --> 0:16:47.800 I don't know that we are at that level of 0:16:47.840 --> 0:16:51.440 communication or understanding. There was an equilibrium between the United 0:16:51.440 --> 0:16:54.640 States and the Soviet Union. Both of them were enlightenment 0:16:54.640 --> 0:16:56.480 projects in a sense. One of them was a bit perverse, 0:16:56.520 --> 0:17:01.480 but they were about managing a country essentially, right. The Chinese, 0:17:01.520 --> 0:17:03.760 I think, have a different view of the world. They 0:17:03.760 --> 0:17:07.080 have a civilizational view of the world. And I don't know, 0:17:07.200 --> 0:17:08.480 and this is our fault. I don't know that we 0:17:08.560 --> 0:17:11.800 understand them promptly that or that we truly understand them 0:17:11.960 --> 0:17:15.240 or are always respectful. Again, I mean, there's there's one 0:17:15.280 --> 0:17:19.119 word that you can throw out their opium and you know, 0:17:19.280 --> 0:17:21.240 tell an entire story of how the West hasn't always 0:17:21.240 --> 0:17:23.280 been respectful to the Chinese. That's a long winded way 0:17:23.320 --> 0:17:25.080 of saying, I don't think that we are communicating with 0:17:25.119 --> 0:17:29.359 them properly, and I don't I don't feel confident that 0:17:29.400 --> 0:17:30.040 we can. 0:17:30.600 --> 0:17:31.600 You know, to be fair. 0:17:31.880 --> 0:17:35.960 You know, President Trump, you know, pushed back with tariffs 0:17:36.000 --> 0:17:37.160 on China in his first term. 0:17:37.200 --> 0:17:39.320 They were carried over into President Biden's term. 0:17:39.600 --> 0:17:41.560 And if you think about China, I think that's fair 0:17:41.600 --> 0:17:43.760 to say that both sides of the aisle agree that 0:17:43.760 --> 0:17:46.240 there needs to be some pushback. So having said that, 0:17:46.280 --> 0:17:48.760 are we just at this point where, you know, for 0:17:48.840 --> 0:17:50.760 what twenty twenty five years? I feel like from the 0:17:50.800 --> 0:17:53.080 beginning of my career in business news, it was all 0:17:53.080 --> 0:17:57.399 about making sure that global multinationals were in China, US 0:17:57.800 --> 0:17:59.119 big firms were in China. 0:17:59.200 --> 0:18:02.879 And now we're starting to rethink what needs to be 0:18:03.000 --> 0:18:03.760 going forward. 0:18:03.800 --> 0:18:06.320 And I just whether it's the pushback against globalization, push 0:18:06.440 --> 0:18:08.959 back against China specifically. I mean, is it just a 0:18:09.000 --> 0:18:13.880 new chapter that's being created in the US China relationship 0:18:13.920 --> 0:18:17.320 that lasts for I don't know the next it could be. 0:18:17.480 --> 0:18:18.800 I think it's I think it's a bit of a 0:18:18.840 --> 0:18:23.640 conundrum because on the one hand, businesses and American capital 0:18:24.040 --> 0:18:27.199 need as much positive exposure to the Chinese economy of 0:18:27.200 --> 0:18:30.080 scale as they can get still still absolutely and I 0:18:30.080 --> 0:18:31.840 think they would be both. I mean, if you look 0:18:31.880 --> 0:18:34.040 at I don't know, JP Morgan, what have you like, 0:18:34.119 --> 0:18:36.840 they would be loath to unilaterally pull out, particularly if 0:18:36.880 --> 0:18:39.360 their competitors were still there. So this is economics right, 0:18:40.400 --> 0:18:42.600 And ultimately JP Morgan pays a lot of tax and 0:18:42.600 --> 0:18:44.720 that goes into the US military, So there's a there's 0:18:44.720 --> 0:18:48.159 a conduit there. On the other hand, at some point, 0:18:48.600 --> 0:18:53.359 either through uncertainty or through executive order or what have you, 0:18:53.680 --> 0:18:55.679 there will be a moment that there is a strong 0:18:55.760 --> 0:18:58.280 case to be the first out and to cut your 0:18:58.280 --> 0:19:01.800 losses and to get a from a negative exposure to China. 0:19:02.200 --> 0:19:04.680 I think that businesses are in a constant statum uncertainty 0:19:04.800 --> 0:19:07.040 right now. They don't know how to comply. This is 0:19:07.080 --> 0:19:09.119 very similar to the Brexit process, which I sort of 0:19:09.119 --> 0:19:11.600 saw someone from the inside, where the commission would say 0:19:11.600 --> 0:19:14.479 some European commission would say something, and then the British 0:19:14.520 --> 0:19:18.080