1 00:00:03,160 --> 00:00:07,480 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,760 --> 00:00:11,000 Speaker 2: China's economy is in rough shape. 3 00:00:11,160 --> 00:00:14,680 Speaker 3: China's real estate factor is in a significant correction. 4 00:00:14,800 --> 00:00:17,400 Speaker 1: This inflation number is just crossing the Bloomberg right now. 5 00:00:18,280 --> 00:00:18,800 Speaker 2: Ouch. 6 00:00:18,880 --> 00:00:21,560 Speaker 3: We've seen monthly losses now for six months in a row. 7 00:00:21,840 --> 00:00:25,680 Speaker 2: Six trillion dollars worth of market capitalization wiped out. There's 8 00:00:25,720 --> 00:00:29,120 Speaker 2: a property crisis, exports are down, and the stock market's 9 00:00:29,160 --> 00:00:33,159 Speaker 2: been in a tailspin. Last month, consumer prices fell at 10 00:00:33,159 --> 00:00:36,760 Speaker 2: the quickest pace since the two thousand and eight financial crisis. 11 00:00:37,680 --> 00:00:41,360 Speaker 2: The Chinese government's been under increasing pressure to do something, 12 00:00:41,840 --> 00:00:44,800 Speaker 2: and it has. But there's another threat on the horizon 13 00:00:44,840 --> 00:00:52,080 Speaker 2: when it comes to China's economy, the US election. During 14 00:00:52,120 --> 00:00:55,800 Speaker 2: their presidencies, both Joe Biden and Donald Trump backed policies 15 00:00:55,800 --> 00:00:58,960 Speaker 2: that drove the US and China further apart. That's only 16 00:00:59,000 --> 00:01:01,880 Speaker 2: continued now that the two twenty twenty four campaign is underway. 17 00:01:02,520 --> 00:01:06,280 Speaker 2: In November, Biden doubled down on his statement that China's 18 00:01:06,319 --> 00:01:10,520 Speaker 2: President Shijinping is a dictator, and earlier this month, on 19 00:01:10,600 --> 00:01:13,920 Speaker 2: Fox News's Sunday Morning Futures, Trump said that he might 20 00:01:14,080 --> 00:01:19,120 Speaker 2: raise tariffs on Chinese imports to over sixty percent. This 21 00:01:19,200 --> 00:01:22,960 Speaker 2: wouldn't just hurt China. Ratcheting up tensions between these two 22 00:01:23,040 --> 00:01:26,400 Speaker 2: nations might mean American consumers feel the cost at home, 23 00:01:27,000 --> 00:01:30,280 Speaker 2: like with the prices of everyday goods getting higher and 24 00:01:30,319 --> 00:01:33,040 Speaker 2: the rest of the world. With the world's two largest 25 00:01:33,080 --> 00:01:37,839 Speaker 2: economies fighting, well, they might end up as collateral damage. 26 00:01:38,959 --> 00:01:41,920 Speaker 2: This is the Big Take DC podcast from Bloomberg News. 27 00:01:42,080 --> 00:01:45,480 Speaker 2: I'm Salaia Mosen. Today I'm turning over the mic to 28 00:01:45,560 --> 00:01:49,640 Speaker 2: Joe Weisenthal and Tracy Alloway, co hosts of our sister podcast, 29 00:01:49,760 --> 00:01:53,160 Speaker 2: Odd Lots. They sat down with two colleagues from Bloomberg's 30 00:01:53,200 --> 00:01:56,240 Speaker 2: Washington bureau who measured just what a Trump victory in 31 00:01:56,280 --> 00:01:59,640 Speaker 2: twenty twenty four could mean for China's economy and beyond. 32 00:02:11,919 --> 00:02:15,280 Speaker 4: Hello, and welcome to another episode of the Odd Lots podcast. 33 00:02:15,320 --> 00:02:17,560 Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. 34 00:02:17,880 --> 00:02:21,400 Speaker 4: Tracy, here's something that I've thought about that's been interesting 35 00:02:21,440 --> 00:02:24,960 Speaker 4: for a few years. The Trump administration obviously sort of 36 00:02:25,000 --> 00:02:29,680 Speaker 4: took this hawkish line on China, introduced the tariffs on 37 00:02:29,800 --> 00:02:33,320 Speaker 4: a lot of Chinese exports to the US, and then 38 00:02:33,600 --> 00:02:37,280 Speaker 4: when the Biden administration took over, it kind of seems 39 00:02:37,280 --> 00:02:40,040 Speaker 4: like we basically got continuity on that front. There was 40 00:02:40,080 --> 00:02:43,080 Speaker 4: no roll back, yeah, anything, Maybe some of the screws 41 00:02:43,080 --> 00:02:44,120 Speaker 4: have been tightened even further. 42 00:02:44,200 --> 00:02:46,280 Speaker 1: I think that's exactly right. And it's kind of funny, 43 00:02:46,360 --> 00:02:48,800 Speaker 1: as you mentioned that it's flown a little bit under 44 00:02:48,960 --> 00:02:52,640 Speaker 1: the radar. And I'm thinking back to Trump's statement trade 45 00:02:52,639 --> 00:02:55,799 Speaker 1: wars are good and easy to yeah, and I mean 46 00:02:56,000 --> 00:02:58,880 Speaker 1: he got a lot of flak for that, probably rightfully so. 47 00:02:59,200 --> 00:03:01,799 Speaker 1: But if you think about what's been happening over the 48 00:03:01,800 --> 00:03:04,760 Speaker 1: past few years, it seems like the US is kind 49 00:03:04,760 --> 00:03:08,640 Speaker 1: of winning the trade war against China in some respects. 50 00:03:08,639 --> 00:03:12,240 Speaker 1: I mean, the US economy outperforming much of the rest 51 00:03:12,240 --> 00:03:14,320 Speaker 1: of the world. I think GDP growth was something like 52 00:03:14,360 --> 00:03:18,120 Speaker 1: three percent in twenty twenty three. China's GDP growth is 53 00:03:18,200 --> 00:03:20,680 Speaker 1: still higher. I believe it was at five percent, but 54 00:03:20,760 --> 00:03:23,000 Speaker 1: it's slowing a lot. And if you look at what's 55 00:03:23,040 --> 00:03:25,320 Speaker 1: going on with the economy right now, it seems like 56 00:03:25,360 --> 00:03:27,320 Speaker 1: it is really struggling in various ways. 57 00:03:27,680 --> 00:03:31,160 Speaker 4: It's interesting that they're winning. I hadn't really winning. 58 00:03:31,240 --> 00:03:33,359 Speaker 1: Might be strong, but like, well. 59 00:03:33,200 --> 00:03:34,480 Speaker 4: Our contry is clearly doing better. 60 00:03:34,560 --> 00:03:34,720 Speaker 5: Yeah. 61 00:03:34,800 --> 00:03:39,280 Speaker 4: Least on the other hand, China clearly has a handful 62 00:03:39,320 --> 00:03:43,880 Speaker 4: of industrial powerhouses that are creating anxiety for legacy industrial 63 00:03:43,920 --> 00:03:47,760 Speaker 4: powerhouses in the US and Europe. And we could say 64 00:03:47,800 --> 00:03:51,360 Speaker 4: that clearly when it comes to ev first legacy automakers, 65 00:03:51,640 --> 00:03:54,000 Speaker 4: we can look at, you know, the rising number of 66 00:03:54,040 --> 00:03:57,600 Speaker 4: conversations like Oboeing is faltering, will Comac and the CM 67 00:03:57,640 --> 00:04:01,440 Speaker 4: whe nine eventually takes significant market share in commercial aerospace. 68 00:04:01,800 --> 00:04:04,280 Speaker 4: We did an episode, I think near the end of 69 00:04:04,600 --> 00:04:08,320 Speaker 4: last year that actually, despite all of the restrictions on 70 00:04:08,480 --> 00:04:13,360 Speaker 4: equipment imports into China for semiconductors, that the domestic semiconductor 71 00:04:13,760 --> 00:04:17,080 Speaker 4: industry is making gains. So like in the GDP sense 72 00:04:17,160 --> 00:04:20,200 Speaker 4: of the word like clearly China is struggling, but on 73 00:04:20,240 --> 00:04:24,680 Speaker 4: these sort of like key industrial strategic areas of the economy, 74 00:04:24,720 --> 00:04:27,240 Speaker 4: there is the word things still seem to be working out. 75 00:04:27,320 --> 00:04:30,000 Speaker 1: No, absolutely, And I think there is this overall angst 76 00:04:30,120 --> 00:04:34,040 Speaker 1: in the US with this idea that China is somehow 77 00:04:34,160 --> 00:04:38,000 Speaker 1: better at doing this kind of targeted industrial policy. We 78 00:04:38,080 --> 00:04:40,680 Speaker 1: used to talk about the Chinese command economy. They have 79 00:04:40,800 --> 00:04:44,400 Speaker 1: experience with pouring lots and lots of money into areas 80 00:04:44,400 --> 00:04:47,720 Speaker 1: that they identify as strategically important. That doesn't mean they 81 00:04:47,760 --> 00:04:51,120 Speaker 1: do it perfectly every time. I mean, we basically saw 82 00:04:51,160 --> 00:04:54,320 Speaker 1: that with some of the consumer tech companies, where there 83 00:04:54,400 --> 00:04:58,239 Speaker 1: was a reversal of the government stance towards them, lots 84 00:04:58,240 --> 00:05:02,479 Speaker 1: of talk of disorderly capital flowing into that space. But 85 00:05:02,600 --> 00:05:04,880 Speaker 1: then what we saw is, you know, they said that 86 00:05:04,880 --> 00:05:07,160 Speaker 1: they cracked down on the sector, and then they said, 87 00:05:07,200 --> 00:05:09,840 Speaker 1: what we really want you to invest in is things 88 00:05:09,880 --> 00:05:13,480 Speaker 1: like solar panels and electric vehicles and semiconductors, And so 89 00:05:13,720 --> 00:05:16,560 Speaker 1: we saw those areas start to boom. So I think 90 00:05:16,560 --> 00:05:19,560 Speaker 1: there is a real sense of concern in the US 91 00:05:19,760 --> 00:05:22,960 Speaker 1: that maybe China, if they're not better at it, they 92 00:05:23,080 --> 00:05:25,640 Speaker 1: certainly have done it for a longer time on a 93 00:05:25,640 --> 00:05:27,240 Speaker 1: more consistent basis. 94 00:05:27,080 --> 00:05:29,800 Speaker 4: Right, And so it feels like now the debate in 95 00:05:29,880 --> 00:05:32,760 Speaker 4: the US is like, Okay, everyone is sort of accepted 96 00:05:33,000 --> 00:05:35,440 Speaker 4: that the tariffs that Trump introduced, that the idea that 97 00:05:35,480 --> 00:05:39,120 Speaker 4: the US in various ways tries to constrain Chinese exports 98 00:05:39,200 --> 00:05:42,919 Speaker 4: or constrain Chinese industry. It feels like that's become conventional 99 00:05:42,920 --> 00:05:45,039 Speaker 4: wisdom now, or that everyone sort of agrees we do 100 00:05:45,120 --> 00:05:47,640 Speaker 4: that in Washington, and now the question is how much. 101 00:05:47,920 --> 00:05:50,400 Speaker 4: And of course recently we heard Trump say that were 102 00:05:50,440 --> 00:05:53,039 Speaker 4: he to be elected president, he would ratch up the 103 00:05:53,080 --> 00:05:55,800 Speaker 4: tariffs even more. I think he put the number like 104 00:05:55,920 --> 00:05:58,719 Speaker 4: sixty percent, which I have to imagine would like totally clobber. 105 00:05:58,960 --> 00:06:01,760 Speaker 1: He did say sixty but then I saw right before 106 00:06:01,839 --> 00:06:04,880 Speaker 1: we came on, let's see, we're recording this on February eighth. 107 00:06:05,000 --> 00:06:08,159 Speaker 1: I think there was an interview from like February six 108 00:06:08,520 --> 00:06:10,720 Speaker 1: where he basically said that the tariffs could be even 109 00:06:10,760 --> 00:06:14,400 Speaker 1: bigger than sixty percent. So I don't know where he's 110 00:06:14,600 --> 00:06:18,520 Speaker 1: quite getting those round numbers from, but maybe more than 111 00:06:18,560 --> 00:06:19,600 Speaker 1: sixty percent right now. 112 00:06:19,760 --> 00:06:22,279 Speaker 4: So as much as Biden has been a continuation and 113 00:06:22,400 --> 00:06:26,920 Speaker 4: extension and an expansion of Trump policies, maybe Trump, if 114 00:06:26,920 --> 00:06:29,359 Speaker 4: you were to win the presidency in November, would be 115 00:06:29,360 --> 00:06:33,520 Speaker 4: a continuation and expansion even further. Anyway, we should talk 116 00:06:33,680 --> 00:06:37,720 Speaker 4: about what a Trump victory, which is of course certainly possible, 117 00:06:37,920 --> 00:06:41,440 Speaker 4: what it would mean for the US China relationship, and 118 00:06:41,480 --> 00:06:43,200 Speaker 4: what it might look like, what the direction all this 119 00:06:43,279 --> 00:06:45,080 Speaker 4: is heading. Let's do it all right, Well, we have 120 00:06:45,240 --> 00:06:48,000 Speaker 4: two absolutely perfect guests today. We're going to be speaking 121 00:06:48,000 --> 00:06:51,720 Speaker 4: to Tom Orlick, previous Odd Lots guest, multiple times, chief 122 00:06:51,720 --> 00:06:55,760 Speaker 4: economist for Bloomberg Economics and Mackenzie Hawkins, she's the US 123 00:06:55,760 --> 00:06:59,360 Speaker 4: Industrial policy reporter for Bloomberg in DC. Both of them 124 00:06:59,440 --> 00:07:03,080 Speaker 4: worked on a big new reports sort of examining this question, 125 00:07:03,120 --> 00:07:06,160 Speaker 4: which everyone should go and read. But thankfully they are 126 00:07:06,200 --> 00:07:08,800 Speaker 4: taking the time to speak with us. So Tom and McKenzie, 127 00:07:08,960 --> 00:07:10,600 Speaker 4: thank you so much for joining us. 128 00:07:10,640 --> 00:07:13,080 Speaker 3: Great to be here. Thanks Jo, Thanks Tracy, thanks. 129 00:07:12,880 --> 00:07:13,520 Speaker 5: For having us on. 130 00:07:13,720 --> 00:07:15,560 Speaker 4: Actually, Tom, let me just start with you with like 131 00:07:15,600 --> 00:07:20,640 Speaker 4: the most vague theoretical question there is, from a purely 132 00:07:20,920 --> 00:07:23,120 Speaker 4: economist standpoint, what do tariffs do? 133 00:07:23,880 --> 00:07:29,960 Speaker 3: So tariffs increase the cost of imports, and when the 134 00:07:30,000 --> 00:07:34,720 Speaker 3: cost goes up, the demand goes down. So in the 135 00:07:34,760 --> 00:07:40,000 Speaker 3: first Trump administration, we saw twenty five percent tariffs on 136 00:07:40,480 --> 00:07:45,480 Speaker 3: a swathe of Chinese exports to the United States, and 137 00:07:45,520 --> 00:07:48,320 Speaker 3: we've got a bunch of data on the impact that 138 00:07:48,360 --> 00:07:51,960 Speaker 3: those tariffs had, so we can kind of say what 139 00:07:52,040 --> 00:07:56,080 Speaker 3: the impact was. And we're seeing Chinese sales to the 140 00:07:56,200 --> 00:07:59,520 Speaker 3: US in the categories of goods that face the tariffs 141 00:08:00,160 --> 00:08:04,200 Speaker 3: down more than one hundred billion dollars relative to where 142 00:08:04,240 --> 00:08:06,640 Speaker 3: they would have been if no tariffs have been put 143 00:08:06,680 --> 00:08:09,160 Speaker 3: in place. Now Here we are at the start of 144 00:08:09,160 --> 00:08:12,120 Speaker 3: twenty twenty four, still a few months to the election, 145 00:08:13,280 --> 00:08:17,560 Speaker 3: but Donald Trump clearly in the lead for the Republican nomination, 146 00:08:18,280 --> 00:08:22,040 Speaker 3: running ahead of Joe Biden in the polls in some 147 00:08:22,160 --> 00:08:26,280 Speaker 3: key swing states, and talking about a sixty percent tariff 148 00:08:26,520 --> 00:08:31,040 Speaker 3: on all Chinese imports. Well, if twenty five percent tariffs 149 00:08:31,240 --> 00:08:34,640 Speaker 3: put a bit of a hole in revenue for Chinese factories, 150 00:08:35,400 --> 00:08:38,320 Speaker 3: sixty percent tariffs, I think would turn that hole into 151 00:08:38,320 --> 00:08:39,080 Speaker 3: more like a crater. 152 00:08:40,679 --> 00:08:43,880 Speaker 1: So Joe asked a very theoretical question, and I guess 153 00:08:43,880 --> 00:08:46,680 Speaker 1: I'm going to ask something a little bit more specific, 154 00:08:46,720 --> 00:08:50,160 Speaker 1: but talk to us about how targeted or I guess 155 00:08:50,200 --> 00:08:53,480 Speaker 1: customized the tariffs are that we've seen from the Trump 156 00:08:53,559 --> 00:08:57,160 Speaker 1: administration and then the Biden administration, Because of course Trump's 157 00:08:57,200 --> 00:09:01,520 Speaker 1: export curbs did involve semi conductors when he was president, 158 00:09:01,559 --> 00:09:05,080 Speaker 1: but then Biden came in, and I believe he targeted, 159 00:09:05,240 --> 00:09:09,280 Speaker 1: you know, advanced semiconductor technology and China's access to it, 160 00:09:09,320 --> 00:09:12,680 Speaker 1: and in some ways he was even more strategic in 161 00:09:12,760 --> 00:09:14,520 Speaker 1: the things that he was limiting. 162 00:09:14,960 --> 00:09:18,520 Speaker 5: So in the Trump administration you saw this sweeping terror 163 00:09:18,640 --> 00:09:21,400 Speaker 5: review that affected a wide range of Chinese industries, and 164 00:09:21,440 --> 00:09:25,200 Speaker 5: the Biden administration has held those tariffs in place. There's 165 00:09:25,280 --> 00:09:28,200 Speaker 5: been sort of a quote unquote imminent tariff review for 166 00:09:28,320 --> 00:09:30,880 Speaker 5: months now, and a big question in Washington is whether 167 00:09:30,920 --> 00:09:34,600 Speaker 5: the administration will stay the course with the sectors that 168 00:09:34,640 --> 00:09:38,199 Speaker 5: Trump targeted or have a more refined approach that might 169 00:09:38,240 --> 00:09:41,440 Speaker 5: focus on key strategic sectors for the US, like evs 170 00:09:41,480 --> 00:09:44,080 Speaker 5: and other clean energy products, which of course the Biden 171 00:09:44,080 --> 00:09:47,480 Speaker 5: administration is trying to subsidize at home. But then you 172 00:09:47,520 --> 00:09:50,560 Speaker 5: saw Biden look at a whole suite of other tools 173 00:09:50,559 --> 00:09:54,720 Speaker 5: of economic statecraft that have actually become his favorite mechanisms 174 00:09:54,760 --> 00:09:57,640 Speaker 5: to get at the Beijing question. One of those, as 175 00:09:57,640 --> 00:10:01,000 Speaker 5: you said, Tracy, is export controls on A and semiconductors. 176 00:10:01,040 --> 00:10:04,559 Speaker 5: These are the critical electronic components that power everything from 177 00:10:04,600 --> 00:10:07,800 Speaker 5: your phone to your car to nuclear missiles. And there's 178 00:10:07,840 --> 00:10:11,400 Speaker 5: a big fear in Washington that if China catches up 179 00:10:11,440 --> 00:10:15,400 Speaker 5: with US technology that they could use AI to power 180 00:10:15,480 --> 00:10:18,240 Speaker 5: weapons systems, that it could pose a significant military threat 181 00:10:18,240 --> 00:10:21,360 Speaker 5: to the US. And so you saw in October twenty 182 00:10:21,400 --> 00:10:25,200 Speaker 5: twenty two sweeping controls on the ability of US companies 183 00:10:25,200 --> 00:10:29,400 Speaker 5: to export the most advanced semiconductor technology and ship making 184 00:10:29,440 --> 00:10:31,520 Speaker 5: equipment to any Chinese company. 185 00:10:32,080 --> 00:10:35,000 Speaker 4: McKenzie just as a follow up on that specifically and 186 00:10:35,240 --> 00:10:38,000 Speaker 4: talking about politically, like as we said in the introduction, 187 00:10:38,160 --> 00:10:41,040 Speaker 4: and as Tracy just mentioned, you know, Biden continued with 188 00:10:41,120 --> 00:10:43,880 Speaker 4: a lot of these terrify views. They're ongoing, they've become 189 00:10:43,920 --> 00:10:47,960 Speaker 4: even more targeted. How did this become the consensus that 190 00:10:48,000 --> 00:10:50,720 Speaker 4: the idea of just dropping tariffs and sort of returning 191 00:10:50,760 --> 00:10:53,839 Speaker 4: to the pre Trump status quo with regards to trade 192 00:10:54,240 --> 00:10:57,240 Speaker 4: now doesn't even seem on the table anymore, and it 193 00:10:57,240 --> 00:11:00,560 Speaker 4: doesn't seem like anyone advocates for that. How did this 194 00:11:00,720 --> 00:11:04,560 Speaker 4: just become like the bipartisan consensus that setting aside the 195 00:11:04,600 --> 00:11:08,000 Speaker 4: degree of restrictions, that some restrictions must be applied. 196 00:11:08,360 --> 00:11:10,040 Speaker 5: It's a great question. You know, when you talk to 197 00:11:10,160 --> 00:11:12,080 Speaker 5: folks on both sides of the aisle on the hill, 198 00:11:12,120 --> 00:11:15,000 Speaker 5: they say, the one thing that everyone agrees on is China, 199 00:11:15,320 --> 00:11:18,120 Speaker 5: and the question is not what, but how much? And 200 00:11:18,240 --> 00:11:20,920 Speaker 5: you know, you really saw the Trump administration, you know, 201 00:11:21,040 --> 00:11:24,920 Speaker 5: early on introduce this tariff's question, and then later on 202 00:11:25,000 --> 00:11:28,480 Speaker 5: towards the latter years, start to target specific Chinese firms. 203 00:11:28,520 --> 00:11:31,720 Speaker 5: Like a great example is Huawei, the Chinese telecommunications giant, 204 00:11:32,040 --> 00:11:36,000 Speaker 5: which you saw Trump sanction in twenty nineteen over concerns 205 00:11:36,040 --> 00:11:40,240 Speaker 5: about the security of their telecommunication systems that are all 206 00:11:40,280 --> 00:11:43,520 Speaker 5: over the US. And then once that sort of entered 207 00:11:43,679 --> 00:11:48,240 Speaker 5: the Washington think tank sphere and people really started seeing 208 00:11:48,280 --> 00:11:51,680 Speaker 5: Huawei as a security threat, it became Okay, what else 209 00:11:51,720 --> 00:11:54,560 Speaker 5: is Huawei doing that's a security threat? And you know, 210 00:11:54,600 --> 00:11:58,079 Speaker 5: the initial sanction sort of crippled their telecommunications business and 211 00:11:58,200 --> 00:12:01,200 Speaker 5: their smartphone business for quite some time time. But we 212 00:12:01,280 --> 00:12:04,439 Speaker 5: saw Juawe debut a smartphone in August that's powered by 213 00:12:04,440 --> 00:12:07,040 Speaker 5: its ship that's far more advanced than where the US 214 00:12:07,160 --> 00:12:11,120 Speaker 5: was hoping to hamstring China's rise. And so as we've 215 00:12:11,160 --> 00:12:14,600 Speaker 5: seen China sort of make incremental technological progress in these 216 00:12:14,679 --> 00:12:19,040 Speaker 5: areas that Washington has decided it's quite concerned about, there 217 00:12:19,120 --> 00:12:21,839 Speaker 5: doesn't really seem to be a big debate over whether 218 00:12:22,040 --> 00:12:24,600 Speaker 5: should we really be doing expert controls in the first place. 219 00:12:24,640 --> 00:12:27,600 Speaker 5: It's we've been on this path, we've seen China continue 220 00:12:27,600 --> 00:12:30,160 Speaker 5: to make progress. What are additional measures that we can 221 00:12:30,200 --> 00:12:34,080 Speaker 5: take with our allies to prevent any further progress from 222 00:12:34,120 --> 00:12:37,240 Speaker 5: these firms that now for five years have been thought 223 00:12:37,280 --> 00:12:39,200 Speaker 5: of as a significant security threat in DC. 224 00:12:39,720 --> 00:12:42,520 Speaker 3: I just build on that briefly and point to three 225 00:12:42,640 --> 00:12:45,560 Speaker 3: big factors which I think have changed the dynamic here 226 00:12:45,600 --> 00:12:50,040 Speaker 3: in Washington, DC and made anti China into a sort 227 00:12:50,040 --> 00:12:53,320 Speaker 3: of broad and firm consensus. I think the first thing 228 00:12:53,520 --> 00:12:57,520 Speaker 3: driving it has been China's sudden rise. Right when everyone 229 00:12:57,600 --> 00:13:01,720 Speaker 3: was agreeing that China could join the Double Wuto back 230 00:13:01,760 --> 00:13:05,760 Speaker 3: in nineteen ninety nine two thousand, China's GDP was a 231 00:13:05,760 --> 00:13:10,240 Speaker 3: fraction of US GDP. China's military capabilities were nowhere near 232 00:13:10,920 --> 00:13:15,360 Speaker 3: US military capabilities, and so China really wasn't regarded as 233 00:13:15,400 --> 00:13:18,199 Speaker 3: a threat, and it was still possible to regard China 234 00:13:18,320 --> 00:13:20,959 Speaker 3: as a kind of almost like a disciple. That's now 235 00:13:21,000 --> 00:13:24,080 Speaker 3: clearly changed. I think the second thing, which is important 236 00:13:24,160 --> 00:13:27,319 Speaker 3: is the kind of the peculiarities of the US election system, 237 00:13:27,640 --> 00:13:31,080 Speaker 3: which gives a disproportionate amount of power to the votes 238 00:13:31,160 --> 00:13:36,240 Speaker 3: and the voices of a constituency in a few swing states, 239 00:13:36,440 --> 00:13:40,480 Speaker 3: places like Pennsylvania, which are in the US rust Belt 240 00:13:40,720 --> 00:13:44,160 Speaker 3: and which have suffered disproportionately from China's rise as a 241 00:13:44,200 --> 00:13:47,720 Speaker 3: manufacturing power, and so where tough on China is a 242 00:13:47,800 --> 00:13:51,160 Speaker 3: very popular vote winner. And then I think the third factor, 243 00:13:51,200 --> 00:13:52,960 Speaker 3: which we have to acknowledge is the kind of the 244 00:13:53,040 --> 00:13:56,679 Speaker 3: strange genius of Donald Trump, right, who kind of revealed 245 00:13:56,800 --> 00:14:00,679 Speaker 3: in his campaign in twenty sixteen that being really tough 246 00:14:00,679 --> 00:14:04,160 Speaker 3: on China was a powerful motivating factor for the voters 247 00:14:04,200 --> 00:14:05,160 Speaker 3: in those swing space. 248 00:14:20,800 --> 00:14:25,680 Speaker 1: Whatever happened to the sort of old simplistic argument for protectionism, 249 00:14:25,720 --> 00:14:29,360 Speaker 1: which was what we want to know, reshore manufacturing, create 250 00:14:29,400 --> 00:14:33,560 Speaker 1: more jobs in the US. It feels like it's sort 251 00:14:33,600 --> 00:14:39,840 Speaker 1: of evolved into this very specific anti China action and 252 00:14:39,880 --> 00:14:42,480 Speaker 1: we haven't seen correct me if I'm wrong, but we 253 00:14:42,560 --> 00:14:47,320 Speaker 1: certainly haven't seen as stringent actions on other countries and 254 00:14:47,400 --> 00:14:51,360 Speaker 1: other manufacturing threats. I mean, we know Mexico is exporting 255 00:14:51,640 --> 00:14:54,680 Speaker 1: tons to the US now, sort of filling some of 256 00:14:54,720 --> 00:14:58,080 Speaker 1: the gap that China has left. But what happened to 257 00:14:58,200 --> 00:15:01,160 Speaker 1: that argument? That feels like it's lost a little bit 258 00:15:01,200 --> 00:15:05,880 Speaker 1: of popularity in DC. Everything feels very strategic, very security focused. 259 00:15:06,240 --> 00:15:09,080 Speaker 3: So I think when it comes to China, these two 260 00:15:09,160 --> 00:15:14,520 Speaker 3: things come together from a US policy perspective rather nicely. Right, 261 00:15:15,120 --> 00:15:20,000 Speaker 3: Here's China, a single party state, a state dominated economy, 262 00:15:20,600 --> 00:15:25,440 Speaker 3: rising quickly one point three billion people. It's easy to 263 00:15:25,520 --> 00:15:29,400 Speaker 3: see why this is regarded as a national security threat, 264 00:15:29,800 --> 00:15:32,520 Speaker 3: and so why it's easy to win the argument in 265 00:15:32,680 --> 00:15:37,760 Speaker 3: DC for things like banning sales of leading edge semiconductors 266 00:15:38,040 --> 00:15:42,920 Speaker 3: because potentially they could fuel China's military capabilities. At the 267 00:15:42,960 --> 00:15:48,440 Speaker 3: same time, China's enormous success in grabbing global market share 268 00:15:48,600 --> 00:15:52,400 Speaker 3: in the manufacturing sector and the consequences of that for 269 00:15:52,720 --> 00:15:57,080 Speaker 3: US manufacturing, where factory towns have been hollowed out and 270 00:15:57,520 --> 00:16:00,560 Speaker 3: people have lost their jobs, makes the case that this 271 00:16:00,640 --> 00:16:03,960 Speaker 3: is really important, not just from a national security perspective, 272 00:16:04,200 --> 00:16:07,520 Speaker 3: but also from a kind of social well being allowing 273 00:16:07,520 --> 00:16:11,160 Speaker 3: everyone to benefit from the growth of the US economy perspective. 274 00:16:11,560 --> 00:16:14,360 Speaker 3: So it's a complicated picture now when it comes to China, 275 00:16:14,680 --> 00:16:18,360 Speaker 3: those national security arguments and those concerns about the hollowing 276 00:16:18,360 --> 00:16:22,880 Speaker 3: out of the manufacturing sector come together very nicely. The 277 00:16:23,720 --> 00:16:27,040 Speaker 3: messiness of it, which I think you're sort of alluding to, Tracy, 278 00:16:27,800 --> 00:16:32,760 Speaker 3: is that near assuring and friendsuring. That addresses the national 279 00:16:32,800 --> 00:16:35,800 Speaker 3: security piece of it, but it certainly doesn't help people 280 00:16:35,840 --> 00:16:38,680 Speaker 3: who lost their manufacturing jobs here in the United States. 281 00:16:39,160 --> 00:16:41,480 Speaker 3: They're not going to be super delighted to see those 282 00:16:41,600 --> 00:16:45,280 Speaker 3: jobs coming back to Mexico or Vietnam or other places, 283 00:16:45,320 --> 00:16:46,320 Speaker 3: which don't really help them. 284 00:16:46,320 --> 00:16:49,360 Speaker 5: Out, and the manufacturing argument still has a lot of 285 00:16:49,400 --> 00:16:51,880 Speaker 5: salience in DC and on the campaign trail. You know, 286 00:16:51,880 --> 00:16:54,960 Speaker 5: you can think of one tranch of Biden's China policy 287 00:16:55,160 --> 00:17:00,040 Speaker 5: as sanctioned controls on outbound investment, export controls on semiconductor ships, 288 00:17:00,080 --> 00:17:02,960 Speaker 5: and the continuation of Trump tariffs. But you can think 289 00:17:02,960 --> 00:17:05,119 Speaker 5: of the other side of the coin as the massive 290 00:17:05,160 --> 00:17:07,840 Speaker 5: industrial policy effort that the US has embarked on over 291 00:17:07,880 --> 00:17:10,440 Speaker 5: the past couple of years. The Chips and Science Act, 292 00:17:10,760 --> 00:17:13,720 Speaker 5: the Inflation Reduction Act, which is democrats signature climate Law, 293 00:17:13,960 --> 00:17:16,840 Speaker 5: and the bipart is In Infrastructure Law have poured well 294 00:17:16,840 --> 00:17:21,480 Speaker 5: over a trillion dollars of federal funding into revitalizing these 295 00:17:21,520 --> 00:17:25,639 Speaker 5: domestic manufacturing bases in areas that lost a lot of 296 00:17:25,760 --> 00:17:27,600 Speaker 5: jobs to the so called China shock. 297 00:17:28,080 --> 00:17:30,680 Speaker 1: It is true also that I think Trump has talked 298 00:17:30,720 --> 00:17:34,560 Speaker 1: about doing a blanket ten percent tariff on all imports 299 00:17:34,600 --> 00:17:38,280 Speaker 1: to the US, so basically ring fencing the entire economy. 300 00:17:38,320 --> 00:17:40,760 Speaker 4: Well, this is dovetails with what I was about to 301 00:17:40,800 --> 00:17:44,640 Speaker 4: ask next time, and it's sort of another theoretical economics question, 302 00:17:44,760 --> 00:17:46,159 Speaker 4: kind of like when I asked what tariffs do, but 303 00:17:46,400 --> 00:17:48,880 Speaker 4: why didn't we have inflation? Why don't they. Why weren't 304 00:17:48,880 --> 00:17:53,520 Speaker 4: the inflationary in the Trump period? And how do economists 305 00:17:53,560 --> 00:17:58,160 Speaker 4: think about the inflation risks associated with aggressive tariffs either 306 00:17:58,160 --> 00:17:59,960 Speaker 4: on one country or blanket tariffs on it. 307 00:18:01,280 --> 00:18:03,760 Speaker 3: So it's a really good question if we think about 308 00:18:03,760 --> 00:18:08,080 Speaker 3: the kind of the big picture over the last thirty years, 309 00:18:08,480 --> 00:18:13,600 Speaker 3: globalization and the ability of consumers in the United States 310 00:18:13,680 --> 00:18:17,920 Speaker 3: to tap cheap goods made in China has been one 311 00:18:17,920 --> 00:18:21,720 Speaker 3: of the factors that was pretty helpful in keeping inflation 312 00:18:22,359 --> 00:18:25,439 Speaker 3: around the FEDS two percent target, at least until the 313 00:18:25,480 --> 00:18:30,480 Speaker 3: post pandemic inflation surge. Now, why didn't the Trump tariffs 314 00:18:30,560 --> 00:18:34,600 Speaker 3: have a more significant impact on that dynamic? I think 315 00:18:34,680 --> 00:18:37,439 Speaker 3: the reason is there's a few factors at work. The 316 00:18:37,480 --> 00:18:41,399 Speaker 3: first factor is goods inflation is important in the US, 317 00:18:41,640 --> 00:18:45,760 Speaker 3: but it's not as important as services inflation, and services 318 00:18:45,760 --> 00:18:49,240 Speaker 3: inflation doesn't really get impacted by tariffs that you put 319 00:18:49,280 --> 00:18:53,240 Speaker 3: on goods. The second factor is, yes, China is a 320 00:18:53,280 --> 00:18:57,919 Speaker 3: really important supplier of goods to the United States, but 321 00:18:58,000 --> 00:19:00,720 Speaker 3: it's not the only supplier. And then the third factor 322 00:19:00,760 --> 00:19:04,920 Speaker 3: at work is tariffs aren't the only thing going on. Yes, 323 00:19:04,960 --> 00:19:08,080 Speaker 3: the Trump administration put twenty five percent tariffs on but 324 00:19:08,800 --> 00:19:11,520 Speaker 3: over the same period we saw a significant depreciation of 325 00:19:11,600 --> 00:19:15,359 Speaker 3: China's yuan. China's factories were able to absorb some of 326 00:19:15,400 --> 00:19:19,040 Speaker 3: the shock by taking lower profit margins, and that provided 327 00:19:19,080 --> 00:19:20,080 Speaker 3: a little bit of an officer. 328 00:19:20,800 --> 00:19:23,680 Speaker 1: So, just on this note, have you done any number 329 00:19:23,720 --> 00:19:27,800 Speaker 1: crunching on what Trump's proposal would mean for inflation? 330 00:19:27,960 --> 00:19:28,160 Speaker 5: Now? 331 00:19:28,200 --> 00:19:29,520 Speaker 1: Do you have specific numbers? 332 00:19:30,040 --> 00:19:33,639 Speaker 3: So we have actually been crunching the numbers, Tracy, And 333 00:19:33,680 --> 00:19:36,600 Speaker 3: here I want to give a shout out to Eleanora 334 00:19:36,720 --> 00:19:40,520 Speaker 3: Mavrodi in our modeling team in Paris. She's taken a 335 00:19:40,560 --> 00:19:44,000 Speaker 3: big model of the global economy and she's plugged in 336 00:19:44,160 --> 00:19:48,840 Speaker 3: that Trump proposal for a sixty percent increase in tariff's 337 00:19:49,280 --> 00:19:52,320 Speaker 3: on US imports from China. And what the model is 338 00:19:52,400 --> 00:19:56,240 Speaker 3: telling us is that that has a pretty catastrophic impact 339 00:19:56,320 --> 00:19:59,359 Speaker 3: on trade. In fact, if the US goes ahead with 340 00:19:59,400 --> 00:20:03,919 Speaker 3: sixty percent tariffs and China reciprocates with sixty percent tariffs, 341 00:20:03,960 --> 00:20:06,879 Speaker 3: matching the pattern of kind of tit for tat retaliation 342 00:20:07,000 --> 00:20:10,320 Speaker 3: we saw during the first Trump term, that pretty much 343 00:20:10,480 --> 00:20:15,199 Speaker 3: turns off trade between the world's two biggest economies. The 344 00:20:15,200 --> 00:20:20,320 Speaker 3: impact on inflation, well, it's there. If import costs go up, 345 00:20:20,680 --> 00:20:23,719 Speaker 3: then that's a positive impact on inflation, but it's not 346 00:20:23,880 --> 00:20:27,080 Speaker 3: particularly marked. That's partly for the reasons I was just 347 00:20:27,119 --> 00:20:31,400 Speaker 3: sharing services inflation is more important than goods inflation. It's 348 00:20:31,440 --> 00:20:35,320 Speaker 3: also because there's an offsetting drag. Import prices go up, 349 00:20:35,359 --> 00:20:39,679 Speaker 3: and that directly affects the CPI. But tariffs also have 350 00:20:39,720 --> 00:20:42,920 Speaker 3: a depressing effect on growth, and that means the economy 351 00:20:42,960 --> 00:20:45,040 Speaker 3: is weaker, and that's an offset on inflation. 352 00:20:45,480 --> 00:20:48,040 Speaker 4: If the US and China, there's two huge trading partners 353 00:20:48,080 --> 00:20:50,760 Speaker 4: suddenly stop trading, what other knock on effects do we 354 00:20:50,760 --> 00:20:51,360 Speaker 4: see from there? 355 00:20:51,800 --> 00:20:54,040 Speaker 3: So I can speak to the economics of that, and 356 00:20:54,200 --> 00:20:56,600 Speaker 3: maybe Mackenzie has some thoughts on the sort of broader 357 00:20:56,640 --> 00:21:00,159 Speaker 3: policy implications. So on the economics, I think, I think 358 00:21:00,160 --> 00:21:02,359 Speaker 3: it's interesting to think about this not just at the 359 00:21:02,400 --> 00:21:06,320 Speaker 3: aggregate level, but also at the sector level, and not 360 00:21:06,400 --> 00:21:08,520 Speaker 3: just about the impact on the US and China, but 361 00:21:08,560 --> 00:21:11,560 Speaker 3: also about the impact on other economies around the world. 362 00:21:12,200 --> 00:21:15,680 Speaker 3: So at the sector level, in the United States, it's 363 00:21:15,800 --> 00:21:21,400 Speaker 3: kind of a policy to support the industries of the past, right, mining, 364 00:21:21,800 --> 00:21:25,560 Speaker 3: production of steel. These are industries which are crucially important 365 00:21:25,560 --> 00:21:28,280 Speaker 3: to the United States in an earlier stage of its development. 366 00:21:28,920 --> 00:21:31,880 Speaker 3: Not so important. Now those would be the industries which 367 00:21:31,880 --> 00:21:35,560 Speaker 3: would be the main beneficiary of a sixty percent tariff. 368 00:21:36,200 --> 00:21:39,600 Speaker 3: Who loses out, Well, it's kind of the industries of 369 00:21:39,640 --> 00:21:43,600 Speaker 3: the future, right, it's the people making the semiconductors, is 370 00:21:43,640 --> 00:21:46,600 Speaker 3: the people making the advanced electronics, the people with the 371 00:21:46,640 --> 00:21:52,120 Speaker 3: exposure to that East Asian electronics supply chain. And thinking 372 00:21:52,119 --> 00:21:55,520 Speaker 3: about the global impact, Well, if we break the trade 373 00:21:55,560 --> 00:21:59,119 Speaker 3: relationship between China and the United States, that's bad for 374 00:21:59,160 --> 00:22:02,199 Speaker 3: those two countries. But there are some other countries that 375 00:22:02,280 --> 00:22:06,680 Speaker 3: could well gain thinking about those connect to economies, places 376 00:22:06,720 --> 00:22:11,720 Speaker 3: like Vietnam, places like Mexico that have a strong manufacturing base, 377 00:22:12,000 --> 00:22:15,119 Speaker 3: that have low costs, and that have pretty good trade 378 00:22:15,119 --> 00:22:16,919 Speaker 3: relationships with those two economies. 379 00:22:17,640 --> 00:22:21,240 Speaker 5: And when you think about the bilateral relationship between Washington 380 00:22:21,280 --> 00:22:25,000 Speaker 5: and Beijing. At the same time as Biden has become 381 00:22:25,240 --> 00:22:29,240 Speaker 5: increasingly hawkish on China, employing sort of novel tools of 382 00:22:29,280 --> 00:22:32,680 Speaker 5: economic statecraft to get at advanced industries in the country, 383 00:22:33,080 --> 00:22:37,240 Speaker 5: there's also been this significant back channel effort to improve 384 00:22:37,400 --> 00:22:42,639 Speaker 5: direct diplomatic tize military to military communications, culminating in a 385 00:22:42,720 --> 00:22:45,159 Speaker 5: meeting between the two leaders on the sidelines of the 386 00:22:45,160 --> 00:22:48,679 Speaker 5: Apex Summit. In San Francisco, And so you can imagine, 387 00:22:48,960 --> 00:22:53,560 Speaker 5: you know, after establishing formal communication networks between the Treasury 388 00:22:53,560 --> 00:22:56,880 Speaker 5: Department and their counterparts in China, formal communications networks between 389 00:22:56,920 --> 00:23:00,240 Speaker 5: the Commerce Department here and MOFCOMM and China, this sort 390 00:23:00,280 --> 00:23:03,520 Speaker 5: of deterioration of a lot of this sort of day 391 00:23:03,560 --> 00:23:07,000 Speaker 5: to day's slow working diplomatic effort that's been happening under 392 00:23:07,000 --> 00:23:10,359 Speaker 5: President Biden, if the US were to sort of blow 393 00:23:10,440 --> 00:23:12,800 Speaker 5: up the trade relationship between the two countries under a 394 00:23:12,840 --> 00:23:14,040 Speaker 5: potential Trump administration. 395 00:23:29,440 --> 00:23:33,560 Speaker 1: Mackenzie, you mentioned earlier the Infrastructure Investment Act, and the 396 00:23:33,600 --> 00:23:36,920 Speaker 1: other big set piece from the Biden administration has been 397 00:23:37,080 --> 00:23:40,600 Speaker 1: the clean energy transition and the money that is pouring 398 00:23:40,640 --> 00:23:43,560 Speaker 1: in there. And this is a question that I've asked 399 00:23:43,600 --> 00:23:46,840 Speaker 1: a couple people on this podcast at this point, But 400 00:23:47,440 --> 00:23:51,720 Speaker 1: it seems like the US has a desire to shift 401 00:23:51,760 --> 00:23:55,040 Speaker 1: away from fossil fuels, maybe build up home capacity of 402 00:23:55,080 --> 00:23:58,920 Speaker 1: clean energy technology like solar panels. But at the same time, 403 00:23:59,000 --> 00:24:01,880 Speaker 1: it is also very true that China is good at 404 00:24:01,920 --> 00:24:05,920 Speaker 1: producing lots of cheap solar panels and things like that. 405 00:24:06,040 --> 00:24:08,760 Speaker 1: So I guess I'm curious what you're hearing from the 406 00:24:08,800 --> 00:24:13,960 Speaker 1: administration in terms of I guess the need to build 407 00:24:14,040 --> 00:24:17,639 Speaker 1: up or increase some of that capability at home and 408 00:24:17,680 --> 00:24:22,399 Speaker 1: make it more efficient versus the lower cost and sheer 409 00:24:22,520 --> 00:24:26,040 Speaker 1: volume of production that you would get from Chinese made 410 00:24:26,160 --> 00:24:29,040 Speaker 1: renewable technology or even semiconductors. 411 00:24:29,800 --> 00:24:32,880 Speaker 5: It's a great question. The solar panel question is kind 412 00:24:32,880 --> 00:24:37,200 Speaker 5: of the most often cited explanation of the danger that 413 00:24:37,400 --> 00:24:40,800 Speaker 5: China poses to these sort of more nascent industries in 414 00:24:40,840 --> 00:24:45,200 Speaker 5: the US on hydrogen, on wind, and also on electric 415 00:24:45,280 --> 00:24:48,480 Speaker 5: vehicles and semiconductor ships, where the US was long the 416 00:24:48,520 --> 00:24:51,200 Speaker 5: technological leader and then seated a lot of that production 417 00:24:51,320 --> 00:24:54,440 Speaker 5: capability to East Asia. And so when we think about 418 00:24:54,480 --> 00:24:57,000 Speaker 5: the sort of critical industries that the US is investing 419 00:24:57,040 --> 00:24:59,199 Speaker 5: in right now, you identified them right off the bed. 420 00:24:59,240 --> 00:25:03,280 Speaker 5: It's semiconductor ships, it's electric vehicles, it's solar, wind, hydro, 421 00:25:03,760 --> 00:25:05,760 Speaker 5: a bunch of types of clean energy through the Chips 422 00:25:05,760 --> 00:25:08,439 Speaker 5: and Science Act and the Inflation Reduction Act. And the 423 00:25:08,520 --> 00:25:11,439 Speaker 5: worry is that the US could pour significant amounts of 424 00:25:11,440 --> 00:25:14,600 Speaker 5: government capital trying to crowd in private capital to build 425 00:25:14,640 --> 00:25:18,280 Speaker 5: up these industries. But if Chinese firms are not operating 426 00:25:18,280 --> 00:25:21,720 Speaker 5: in the same market environment, there could be a significant 427 00:25:21,760 --> 00:25:26,160 Speaker 5: dumping risk. The fear on chips, for example, is that 428 00:25:26,560 --> 00:25:29,280 Speaker 5: China's been building up capacity in the sort of mature, 429 00:25:29,400 --> 00:25:33,680 Speaker 5: older generation semiconductors that still power the entire global economy, 430 00:25:33,720 --> 00:25:35,520 Speaker 5: even if they're not the cutting edge. Those are not 431 00:25:35,600 --> 00:25:37,800 Speaker 5: the ones that the US is trying to deal with 432 00:25:37,800 --> 00:25:41,879 Speaker 5: with export controls. And that's why the Biden administration is 433 00:25:41,920 --> 00:25:44,680 Speaker 5: talking about tariffs. They say, we see this following this 434 00:25:44,800 --> 00:25:49,000 Speaker 5: same trajectory that we saw with solar panels and on 435 00:25:49,080 --> 00:25:52,879 Speaker 5: electric vehicles as well. The US is pouring billions of 436 00:25:52,920 --> 00:25:57,080 Speaker 5: dollars and trying to get American auto giants to build 437 00:25:57,160 --> 00:26:00,679 Speaker 5: cleaner cars in the US, but Chinese models are on 438 00:26:00,800 --> 00:26:03,360 Speaker 5: offer for less than half the cost, and the only 439 00:26:03,400 --> 00:26:06,080 Speaker 5: reason they haven't entered US markets yet, or the primary reason, 440 00:26:06,400 --> 00:26:08,639 Speaker 5: is that there's a twenty seven point five percent tariff 441 00:26:08,640 --> 00:26:11,359 Speaker 5: imposed under Donald Trump, and you're hearing a lot of 442 00:26:11,440 --> 00:26:14,439 Speaker 5: concern in Washington. Maybe we might need to increase that 443 00:26:14,560 --> 00:26:17,159 Speaker 5: number to protect these industries that we're investing in so 444 00:26:17,240 --> 00:26:17,760 Speaker 5: much at home. 445 00:26:17,920 --> 00:26:19,800 Speaker 4: I'm glad you went there. There's literally going to be 446 00:26:19,920 --> 00:26:22,400 Speaker 4: what I ask because when you talk about the Chinese 447 00:26:22,520 --> 00:26:26,600 Speaker 4: EV boom, most of the people talk about the European 448 00:26:26,720 --> 00:26:31,399 Speaker 4: market specifically, and how it's a threat to BMW and 449 00:26:31,400 --> 00:26:34,560 Speaker 4: the various legacy automakers. But in theory, right, like if 450 00:26:34,600 --> 00:26:39,320 Speaker 4: the quality continues to improve, if they continue to go down, 451 00:26:39,359 --> 00:26:42,040 Speaker 4: like the sort of learning cost curve of costs, like 452 00:26:42,520 --> 00:26:44,720 Speaker 4: is it only a matter of time at current rates 453 00:26:44,760 --> 00:26:49,280 Speaker 4: before we start seeing bid cars in the US competing 454 00:26:49,320 --> 00:26:53,000 Speaker 4: against you know, obviously Tesla, but also the EV efforts 455 00:26:53,040 --> 00:26:55,440 Speaker 4: of the Detroit three and others that so far haven't 456 00:26:55,440 --> 00:26:57,000 Speaker 4: gone all that great as far as I can tell. 457 00:26:57,440 --> 00:27:00,560 Speaker 5: So that is one of the central question I think 458 00:27:00,560 --> 00:27:03,520 Speaker 5: the policymakers in the administration are thinking about right now. 459 00:27:03,600 --> 00:27:06,720 Speaker 5: You know, the EV question in the US is manifold one. 460 00:27:06,880 --> 00:27:10,680 Speaker 5: There is concern that Chinese EV supply chain companies will 461 00:27:10,720 --> 00:27:13,520 Speaker 5: try to take advantage of the tax credits offered for 462 00:27:13,800 --> 00:27:16,480 Speaker 5: US production. There's been a lot of focus, for example, 463 00:27:16,960 --> 00:27:20,480 Speaker 5: on this forward facility in Michigan, which has a licensing 464 00:27:20,560 --> 00:27:24,879 Speaker 5: agreement with Cattle, which is the preeminent global battery maker, 465 00:27:25,400 --> 00:27:28,040 Speaker 5: and a lot of China hawks on the hill, you know, 466 00:27:28,119 --> 00:27:29,760 Speaker 5: in some cases on both sides of the aisle are 467 00:27:29,800 --> 00:27:31,960 Speaker 5: saying we should really keep a close eye on that. 468 00:27:32,080 --> 00:27:34,240 Speaker 5: Is this sort of an attempt by China to work 469 00:27:34,280 --> 00:27:37,840 Speaker 5: around restrictions that say you can't take advantage of the 470 00:27:37,880 --> 00:27:40,760 Speaker 5: tax credits if you have a certain threshold of Chinese 471 00:27:40,760 --> 00:27:44,359 Speaker 5: investment in your supply chain to sort of tap into 472 00:27:44,400 --> 00:27:47,879 Speaker 5: this inflation Reduction Act fueled EV boom in the United States. 473 00:27:48,520 --> 00:27:52,040 Speaker 5: Then there's the question of will Bid and other Chinese 474 00:27:52,080 --> 00:27:54,440 Speaker 5: companies try to invest in Mexico. You know, you saw 475 00:27:54,960 --> 00:27:58,040 Speaker 5: Treasury Secretary Janet Yellen in December on a trip to 476 00:27:58,040 --> 00:28:02,359 Speaker 5: Mexico City saying we want to help Mexico fortify against 477 00:28:02,400 --> 00:28:07,639 Speaker 5: you know, foreign investment threats, including specifically China, and Commerce 478 00:28:07,680 --> 00:28:11,240 Speaker 5: Secretary Gina Raimondo last week sort of opened the door 479 00:28:11,320 --> 00:28:14,679 Speaker 5: to a little bit of a novel take on Chinese 480 00:28:14,720 --> 00:28:17,960 Speaker 5: EV's coming from the administration citing data security risks. So 481 00:28:18,040 --> 00:28:21,800 Speaker 5: not even just talking about the market dynamics and the 482 00:28:21,920 --> 00:28:24,760 Speaker 5: trade threat, which was the logic behind the Trump tariffs 483 00:28:24,800 --> 00:28:28,119 Speaker 5: to begin with, and this sort of long going conversation 484 00:28:28,240 --> 00:28:31,600 Speaker 5: among Biden officials about whether to adjust or potentially increase 485 00:28:31,680 --> 00:28:35,160 Speaker 5: those tariffs, but also the question of you know, these 486 00:28:35,240 --> 00:28:38,760 Speaker 5: cars are equipped with thousands of sensors, and she asked 487 00:28:38,800 --> 00:28:41,280 Speaker 5: the question, do we really want all of that data 488 00:28:41,400 --> 00:28:44,480 Speaker 5: going to Beijing, and so that was almost seating the 489 00:28:44,560 --> 00:28:47,760 Speaker 5: floor a little bit to maybe this quote unquote small 490 00:28:47,880 --> 00:28:51,080 Speaker 5: yard high fence approach that the Biden administration has touted 491 00:28:51,080 --> 00:28:55,120 Speaker 5: for years is becoming or could become a slightly larger 492 00:28:55,200 --> 00:28:58,240 Speaker 5: yard and higher fence. Looking at other forms of critical 493 00:28:58,280 --> 00:29:01,440 Speaker 5: technologies that compare to sort of the market risks that 494 00:29:01,480 --> 00:29:04,120 Speaker 5: Tom was talking about earlier that fueled sort of the 495 00:29:04,160 --> 00:29:08,000 Speaker 5: traditional US China trade battle. Now we're thinking about information 496 00:29:08,120 --> 00:29:11,600 Speaker 5: technology that lends a national security argument to some of 497 00:29:11,640 --> 00:29:12,840 Speaker 5: these same products. 498 00:29:13,680 --> 00:29:17,280 Speaker 1: So just thinking about things that have changed since the 499 00:29:17,360 --> 00:29:20,320 Speaker 1: Trump years twenty sixteen to twenty twenty. One of the 500 00:29:20,320 --> 00:29:23,720 Speaker 1: big things has to be Russia's invasion of Ukraine, and 501 00:29:23,760 --> 00:29:27,680 Speaker 1: I guess the sort of economic alliance that we've seen 502 00:29:28,200 --> 00:29:31,920 Speaker 1: between China and Russia emerged since then. And I'm wondering 503 00:29:32,040 --> 00:29:34,720 Speaker 1: We've obviously been focused a lot on the US China 504 00:29:34,880 --> 00:29:39,600 Speaker 1: relationships specifically, but could we potentially see the emergence of, 505 00:29:39,920 --> 00:29:42,800 Speaker 1: for lack of a better term, East West trade blocks. 506 00:29:43,160 --> 00:29:45,840 Speaker 3: I think that's a really interesting question, Tracy, and it 507 00:29:46,120 --> 00:29:50,400 Speaker 3: reminds me of the kind of the miscalculation that many 508 00:29:50,600 --> 00:29:54,160 Speaker 3: here in the United States made about the impact of 509 00:29:54,880 --> 00:29:59,040 Speaker 3: US sanctions and European sanctions on Russia in the days 510 00:29:59,240 --> 00:30:04,000 Speaker 3: after Putin's tanks rolled across the border into Ukraine. You 511 00:30:04,040 --> 00:30:07,400 Speaker 3: remember back two years ago, there was sweeping sanctions, right, 512 00:30:07,720 --> 00:30:13,840 Speaker 3: Russia essentially locked out of the dollar financial market, Russian firms, 513 00:30:13,960 --> 00:30:18,080 Speaker 3: with some exceptions in energy, essentially locked out of trade 514 00:30:18,280 --> 00:30:21,840 Speaker 3: with the US and Europe. And at that moment there 515 00:30:21,880 --> 00:30:24,360 Speaker 3: was a rush to sort of call the collapse of 516 00:30:24,360 --> 00:30:28,000 Speaker 3: the Russian economy. Right, the US is sanctioning them, Europe 517 00:30:28,080 --> 00:30:32,200 Speaker 3: is sanctioning them, They can't participate in the global financial system. 518 00:30:32,440 --> 00:30:35,880 Speaker 3: This must be the first moment of a crisis. And 519 00:30:35,920 --> 00:30:38,880 Speaker 3: in fact, two years on we can see that these 520 00:30:38,920 --> 00:30:41,800 Speaker 3: sanctions and these controls have certainly had a negative impact 521 00:30:41,840 --> 00:30:45,400 Speaker 3: on Russia, but it's certainly not tipped them into crisis. 522 00:30:46,040 --> 00:30:48,760 Speaker 3: Why is that Well, I think the unfortunate reality for 523 00:30:48,880 --> 00:30:53,440 Speaker 3: policymakers here in DC and in Brussels is that they 524 00:30:53,480 --> 00:30:56,400 Speaker 3: no longer have the same impact that they once did. 525 00:30:56,640 --> 00:31:00,040 Speaker 3: And the reason for that is because of China and 526 00:31:00,080 --> 00:31:03,600 Speaker 3: to a lesser extent, India, which has also maintained more 527 00:31:03,680 --> 00:31:07,440 Speaker 3: or less normal trading relations with Russia. And so what 528 00:31:07,440 --> 00:31:13,480 Speaker 3: that suggests is that as China rises, and as India rises, 529 00:31:13,520 --> 00:31:17,000 Speaker 3: and other major emerging markets which don't necessarily fall into 530 00:31:17,080 --> 00:31:20,320 Speaker 3: line with DC start playing a bigger role in the 531 00:31:20,320 --> 00:31:24,920 Speaker 3: global economy, the capacity of the United States and its 532 00:31:24,960 --> 00:31:29,840 Speaker 3: allies to shape outcomes for particular countries by imposing sanctions 533 00:31:29,960 --> 00:31:34,720 Speaker 3: or tariffs becomes that much less. And to your question, Tracy, yes, 534 00:31:35,120 --> 00:31:38,520 Speaker 3: that possibility of an East West trade block is very 535 00:31:38,600 --> 00:31:42,960 Speaker 3: much there. Bad for global growth, but a buffer for 536 00:31:43,040 --> 00:31:46,200 Speaker 3: countries that find themselves at the wrong end of US 537 00:31:46,320 --> 00:31:47,360 Speaker 3: economic statecraft. 538 00:31:47,680 --> 00:31:51,240 Speaker 5: And China's alignment with Russia has actually lent a lot 539 00:31:51,280 --> 00:31:55,000 Speaker 5: more credence to US arguments about the national security risks 540 00:31:55,400 --> 00:31:58,560 Speaker 5: that a lot of European allies have been lukewarm on 541 00:31:58,720 --> 00:32:01,720 Speaker 5: for some time. So, you know, they've seen China as 542 00:32:01,880 --> 00:32:07,000 Speaker 5: a market opportunity, not necessarily the geopolitical threat that Washington sees, 543 00:32:07,440 --> 00:32:10,280 Speaker 5: but they've started to pay more attention to US warnings, 544 00:32:10,320 --> 00:32:14,360 Speaker 5: particularly about the risk of invasion of Taiwan, since they've 545 00:32:14,360 --> 00:32:17,560 Speaker 5: felt this pressure from Russia and then the alignment between 546 00:32:17,560 --> 00:32:20,240 Speaker 5: those two powers. And you know, one of the best 547 00:32:20,280 --> 00:32:22,880 Speaker 5: examples of this is in order for the US to 548 00:32:23,080 --> 00:32:27,040 Speaker 5: restrict China's access to advanced semiconductors, they had to get 549 00:32:27,120 --> 00:32:30,240 Speaker 5: key allies with key companies in the supply chain on board. 550 00:32:30,600 --> 00:32:33,720 Speaker 5: One of the best examples is ASML, the leading maker 551 00:32:33,840 --> 00:32:36,640 Speaker 5: of chip making equipment, which is based in the Netherlands. 552 00:32:37,120 --> 00:32:39,680 Speaker 5: And if the US is going to prevent China from 553 00:32:39,720 --> 00:32:42,800 Speaker 5: developing advanced chips, they have to convince the Dutch government 554 00:32:43,120 --> 00:32:46,960 Speaker 5: to block ASML from sending the most high tech machines 555 00:32:47,000 --> 00:32:50,320 Speaker 5: over to China. And so this sort of increasing threat 556 00:32:50,320 --> 00:32:53,760 Speaker 5: from Russia, where a company like ASML might say, we 557 00:32:53,800 --> 00:32:58,000 Speaker 5: want to trade China's a fantastic customer. China just became 558 00:32:58,080 --> 00:33:00,800 Speaker 5: sort of proportionally the largest share of ASMA sales just 559 00:33:01,120 --> 00:33:03,960 Speaker 5: a month or two ago. The alignment between China and 560 00:33:04,000 --> 00:33:07,000 Speaker 5: Russia has sort of helped bring European powers around to 561 00:33:07,040 --> 00:33:09,720 Speaker 5: the idea that no, China does pose a significant risk 562 00:33:10,040 --> 00:33:13,360 Speaker 5: if they invade Taiwan, which houses the world pre eminent 563 00:33:13,480 --> 00:33:16,160 Speaker 5: chip maker where we get all of the most advanced 564 00:33:16,200 --> 00:33:19,040 Speaker 5: chips that power all of our most advanced technology. That 565 00:33:19,160 --> 00:33:20,800 Speaker 5: is a threat that we need your alignment on. 566 00:33:21,200 --> 00:33:21,560 Speaker 2: Tom. 567 00:33:21,880 --> 00:33:24,160 Speaker 4: I know when trade deals are crafted, when people think 568 00:33:24,160 --> 00:33:27,680 Speaker 4: about tariffs, the actual country of origin for a given 569 00:33:27,760 --> 00:33:30,840 Speaker 4: good is always people try to figure that out essentially, 570 00:33:30,920 --> 00:33:33,240 Speaker 4: so that you know, if we want to restrict Chinese 571 00:33:33,280 --> 00:33:36,080 Speaker 4: exports to the US, that they can't just like land 572 00:33:36,080 --> 00:33:39,240 Speaker 4: in Mexico first and then across the border and say 573 00:33:39,240 --> 00:33:42,040 Speaker 4: it's some Mexican good. But we do know that imports 574 00:33:42,080 --> 00:33:44,640 Speaker 4: into the US from Mexico have been surging, and as 575 00:33:44,640 --> 00:33:47,320 Speaker 4: you mentioned, Mexico could be a beneficiary if they were 576 00:33:47,360 --> 00:33:50,520 Speaker 4: cut off. Like, how leaky is that? And to what 577 00:33:50,640 --> 00:33:55,320 Speaker 4: degree can other countries other destinations be de facto yes, 578 00:33:55,360 --> 00:33:58,080 Speaker 4: we're importing from Mexico, but really this is a continuation 579 00:33:58,160 --> 00:33:59,440 Speaker 4: of importing from China. 580 00:33:59,560 --> 00:34:02,040 Speaker 3: Yeah, really good question, Joe. It reminds me of a 581 00:34:02,080 --> 00:34:04,960 Speaker 3: funny moment in a Chinese novel I read a few 582 00:34:05,040 --> 00:34:08,520 Speaker 3: years ago, Shandi or Brothers, And there's a moment in 583 00:34:08,560 --> 00:34:10,720 Speaker 3: the novel where there's a kind of rise in anti 584 00:34:10,800 --> 00:34:14,600 Speaker 3: Japanese sentiment in China and there's a violent mob that 585 00:34:14,680 --> 00:34:18,080 Speaker 3: goes out and tries to smash Japanese products, and they're 586 00:34:18,080 --> 00:34:19,960 Speaker 3: on the cusp of smashing what they think is a 587 00:34:20,040 --> 00:34:24,080 Speaker 3: Japanese car, and one of the characters says, wait, this 588 00:34:24,160 --> 00:34:27,720 Speaker 3: car was made of the joint venture enterprise in China, 589 00:34:28,360 --> 00:34:31,000 Speaker 3: and then another protagonist says, Okay, let's just smash half 590 00:34:31,040 --> 00:34:34,520 Speaker 3: of it. And I think that's kind of like that's 591 00:34:34,560 --> 00:34:37,120 Speaker 3: the reality of global trade, right, I mean, the sort 592 00:34:37,120 --> 00:34:41,440 Speaker 3: of the classic example is the iPhone technology and branding 593 00:34:41,520 --> 00:34:46,240 Speaker 3: here in the United States, semiconductors from Taiwan snaps together 594 00:34:46,640 --> 00:34:49,399 Speaker 3: in mainland China. If there's going to be a trade war, 595 00:34:49,800 --> 00:34:51,640 Speaker 3: which bit of it are you going to impact? 596 00:34:51,719 --> 00:34:51,879 Speaker 6: Right? 597 00:34:52,000 --> 00:34:55,319 Speaker 3: Well, the reality is that you can't impact one bit 598 00:34:55,360 --> 00:34:58,920 Speaker 3: of it without impacting another. We're seeing some of that 599 00:34:59,000 --> 00:35:02,560 Speaker 3: complexity playing out in different ways in the years since 600 00:35:02,600 --> 00:35:06,400 Speaker 3: the Trump tariffs came into place. We're seeing Chinese companies 601 00:35:06,440 --> 00:35:10,520 Speaker 3: setting up shop in Vietnam, Chinese companies attempting to set 602 00:35:10,560 --> 00:35:14,200 Speaker 3: up shop in Mexico, so they'd be exporting from those 603 00:35:14,239 --> 00:35:18,120 Speaker 3: countries to the United States, dodging the Trump tariffs. But 604 00:35:18,160 --> 00:35:21,239 Speaker 3: where does the revenue go, in many cases still going 605 00:35:21,239 --> 00:35:25,440 Speaker 3: to those Chinese firms. It's a complex system, and that 606 00:35:25,520 --> 00:35:28,200 Speaker 3: makes it that much harder to wield these tools of 607 00:35:28,200 --> 00:35:32,280 Speaker 3: economic state craft without creating some unintended collateral damage. 608 00:35:32,360 --> 00:35:34,319 Speaker 5: And there's always the question of how deep in the 609 00:35:34,320 --> 00:35:36,319 Speaker 5: supply chain are you going to go when you think 610 00:35:36,320 --> 00:35:38,840 Speaker 5: about chips or you think about evs down to the 611 00:35:38,920 --> 00:35:42,200 Speaker 5: raw components, the minerals. I mean, China has been snapping 612 00:35:42,239 --> 00:35:44,839 Speaker 5: up mines across the world. And if you say we 613 00:35:44,920 --> 00:35:48,399 Speaker 5: don't want any Chinese investment anywhere in the supply chain 614 00:35:48,440 --> 00:35:50,280 Speaker 5: for any of the goods that we're going to subsidize 615 00:35:50,360 --> 00:35:52,640 Speaker 5: or even allow to be impoured into the US, you 616 00:35:52,680 --> 00:35:54,279 Speaker 5: could end up with zero goods at all. 617 00:35:55,160 --> 00:35:59,040 Speaker 1: So, on the one hand, we have Trump running on 618 00:35:59,120 --> 00:36:03,120 Speaker 1: this idea of sixty percent tariffs on China, maybe more, 619 00:36:03,320 --> 00:36:07,560 Speaker 1: plus perhaps a ten percent ring fence on all imports 620 00:36:07,600 --> 00:36:11,919 Speaker 1: into America. On the other hand, you have the Biden administration, 621 00:36:12,160 --> 00:36:15,520 Speaker 1: which is already in office and has already continued some 622 00:36:15,719 --> 00:36:21,320 Speaker 1: quite stringent restrictions on China. When you talk to policymakers 623 00:36:21,480 --> 00:36:24,120 Speaker 1: in China, or when you look at surveys of the 624 00:36:24,280 --> 00:36:28,800 Speaker 1: domestic Chinese population, what do they say about their preferred candidate? 625 00:36:28,920 --> 00:36:30,680 Speaker 1: Do they express a preference? 626 00:36:31,120 --> 00:36:34,720 Speaker 5: So we cite a survey in our story and online 627 00:36:34,760 --> 00:36:37,320 Speaker 5: survey figured out trying to figure out how the Chinese 628 00:36:37,360 --> 00:36:41,200 Speaker 5: public feels about the upcoming US vote, and about sixty 629 00:36:41,280 --> 00:36:45,520 Speaker 5: percent of the respondent's preferred Trump. But it wasn't that. 630 00:36:45,880 --> 00:36:48,640 Speaker 5: You know, his China plans stack up better for them 631 00:36:48,719 --> 00:36:52,000 Speaker 5: against Biden's, but they thought that he would ease the 632 00:36:52,000 --> 00:36:56,560 Speaker 5: pressure on China by bringing chaos to America. 633 00:36:58,719 --> 00:37:01,799 Speaker 4: Well, we'll see what happen. Mackenzie and Tom, thank you 634 00:37:01,880 --> 00:37:04,920 Speaker 4: so much for coming on. Fascinating work. Everyone should go 635 00:37:04,960 --> 00:37:07,799 Speaker 4: read your Big Take article out on the Bloomberg now 636 00:37:07,960 --> 00:37:10,080 Speaker 4: and we'll have to have you both back on odd 637 00:37:10,120 --> 00:37:13,520 Speaker 4: Lots maybe after the November election. We'll see what happening. 638 00:37:13,640 --> 00:37:14,680 Speaker 5: Thanks so much for having us. 639 00:37:14,840 --> 00:37:28,640 Speaker 6: Thanks Jay, Thanks Tracy, Tracy. 640 00:37:28,680 --> 00:37:30,280 Speaker 4: I thought that was great. There was a lot interesting 641 00:37:30,480 --> 00:37:32,319 Speaker 4: in there. One thing that I'll pick out that was 642 00:37:32,360 --> 00:37:36,680 Speaker 4: sort of something McKenzie said about even as these economic 643 00:37:36,760 --> 00:37:40,480 Speaker 4: constraints have grown, there has been some other progress, like 644 00:37:40,520 --> 00:37:44,800 Speaker 4: military to military communication, treasury to treasury communication. It reminds 645 00:37:44,840 --> 00:37:46,760 Speaker 4: me of something, you know, we talked to Adam Posen 646 00:37:47,040 --> 00:37:50,640 Speaker 4: generation and that was one of his concerns about trade wars, 647 00:37:50,680 --> 00:37:54,000 Speaker 4: which is that trade freedom doesn't necessarily lead to peace, 648 00:37:54,280 --> 00:37:57,960 Speaker 4: but trade constraints can create geopolitical. 649 00:37:57,360 --> 00:37:59,160 Speaker 1: Problems, right, which makes a lot of sense. 650 00:37:59,239 --> 00:37:59,399 Speaker 2: Yeah. 651 00:37:59,440 --> 00:38:02,120 Speaker 1: Well, on that note, the other thing that both of 652 00:38:02,160 --> 00:38:05,080 Speaker 1: them really emphasized was this idea of China sort of 653 00:38:05,160 --> 00:38:08,800 Speaker 1: in a sweet spot for this kind of trade restriction, 654 00:38:08,960 --> 00:38:12,240 Speaker 1: where you do have concerns over the loss of jobs 655 00:38:12,239 --> 00:38:14,560 Speaker 1: and manufacturing that have been going on for decades, but 656 00:38:14,640 --> 00:38:17,080 Speaker 1: then on the other hand, you do have the strategic 657 00:38:17,160 --> 00:38:20,680 Speaker 1: concerns strategically important industries. Is the US going to be 658 00:38:20,719 --> 00:38:24,200 Speaker 1: able to compete on semiconductors or clean energy tech? And 659 00:38:24,360 --> 00:38:28,400 Speaker 1: also that military aspect of it. So it sort of 660 00:38:28,440 --> 00:38:31,400 Speaker 1: makes sense why the US would focus on China and 661 00:38:31,440 --> 00:38:34,160 Speaker 1: why it's politically appealing totally. 662 00:38:34,400 --> 00:38:36,759 Speaker 4: Can I express an unpopular opinion? I don't know if 663 00:38:36,800 --> 00:38:38,960 Speaker 4: it's unpopular. I just don't hear many people say it. 664 00:38:39,600 --> 00:38:42,120 Speaker 4: I really believe that if there's you know, if there's 665 00:38:42,160 --> 00:38:44,400 Speaker 4: one country in the world that could do true like 666 00:38:44,480 --> 00:38:47,560 Speaker 4: add tarchy, like it's obviously the US, right, Like it 667 00:38:47,560 --> 00:38:50,880 Speaker 4: would probably be very economically harmful to literally no longer 668 00:38:50,920 --> 00:38:51,759 Speaker 4: trade with the world. 669 00:38:51,800 --> 00:38:54,799 Speaker 1: Just to be clear, you are not recommended, but as 670 00:38:54,840 --> 00:38:56,000 Speaker 1: a thought expert. 671 00:38:55,920 --> 00:38:58,600 Speaker 4: A thought experiment, if there's one place that is all 672 00:38:58,640 --> 00:39:01,600 Speaker 4: the food, all of the minerals, all of the oil, 673 00:39:01,760 --> 00:39:04,520 Speaker 4: all the natural gas, all the talented companies, all of 674 00:39:04,560 --> 00:39:06,400 Speaker 4: the high tech, Like, if there's one place that I 675 00:39:06,440 --> 00:39:09,480 Speaker 4: think could possibly pull it off. It's clearly the US, 676 00:39:09,560 --> 00:39:13,319 Speaker 4: So like, again, this is not me making a policy recommendation. 677 00:39:13,400 --> 00:39:15,359 Speaker 4: I just think, like, I think we could. It would 678 00:39:15,360 --> 00:39:17,680 Speaker 4: be very disruptive, and I'm not in favorite, but I 679 00:39:17,719 --> 00:39:18,520 Speaker 4: think we could survive. 680 00:39:18,800 --> 00:39:21,279 Speaker 1: Someone is going to take that quote completely out of 681 00:39:21,320 --> 00:39:23,040 Speaker 1: context and tweet it. 682 00:39:23,320 --> 00:39:23,480 Speaker 5: Well. 683 00:39:23,520 --> 00:39:25,319 Speaker 1: The one other thing I was thinking, and it's a 684 00:39:25,360 --> 00:39:27,960 Speaker 1: shame we didn't get into this, but maybe we should 685 00:39:27,960 --> 00:39:30,919 Speaker 1: do an episode more related to this down the road. 686 00:39:31,120 --> 00:39:35,040 Speaker 1: But I never quite figured out Trump's policy on currency, 687 00:39:35,320 --> 00:39:38,920 Speaker 1: because he seemed to switch or vary between wanting a 688 00:39:38,960 --> 00:39:41,680 Speaker 1: strong dollar because it sounds good to have a strong dollar, 689 00:39:41,840 --> 00:39:44,719 Speaker 1: but then also wanting a week dollar to be because it's 690 00:39:44,719 --> 00:39:45,320 Speaker 1: good fort for it. 691 00:39:45,520 --> 00:39:48,280 Speaker 4: You know, that's very funny because right like strong dollar, 692 00:39:48,360 --> 00:39:51,120 Speaker 4: it sounds very trumpy, right, But he also had some 693 00:39:51,239 --> 00:39:53,560 Speaker 4: like intuitions that it wasn't quite right, and even I 694 00:39:53,600 --> 00:39:57,400 Speaker 4: remember once on the campaign trail he said something to 695 00:39:57,440 --> 00:39:59,720 Speaker 4: the effect of like, yeah, I'd like want a week dollar. 696 00:39:59,800 --> 00:40:02,040 Speaker 4: It's good for borrowing, it's good for exports. It's one 697 00:40:02,040 --> 00:40:05,319 Speaker 4: of those things where like it's counterintuitive but also makes sense. Yeah, 698 00:40:05,360 --> 00:40:07,680 Speaker 4: it's not retorted. No one rhetorically wants to come on 699 00:40:07,800 --> 00:40:10,160 Speaker 4: for a week dollar, but it's. 700 00:40:10,000 --> 00:40:12,880 Speaker 1: You never quite made up his mind. Well, maybe someone 701 00:40:12,920 --> 00:40:15,040 Speaker 1: will ask him about that on the campaign trail. 702 00:40:15,080 --> 00:40:17,760 Speaker 4: Maybe he'll come on Oddlocks talk about his currency policy. 703 00:40:17,840 --> 00:40:18,279 Speaker 5: All right. 704 00:40:18,760 --> 00:40:20,160 Speaker 1: In the meantime, shall we leave it there. 705 00:40:20,239 --> 00:40:20,960 Speaker 4: Let's leave it there. 706 00:40:21,080 --> 00:40:24,239 Speaker 1: This has been another episode of the Authots podcast. I'm 707 00:40:24,280 --> 00:40:27,560 Speaker 1: Tracy Alloway. You can follow me at Tracy Alloway. 708 00:40:27,239 --> 00:40:30,160 Speaker 4: And I'm Jill Wisenthal. You can follow me at the Stalwart. 709 00:40:30,400 --> 00:40:34,640 Speaker 4: Follow our guest McKenzie Hawkins. She's at Matt Hawk. Follow 710 00:40:34,840 --> 00:40:39,279 Speaker 4: tom Orlick at tom Orlick. Follow our producers Carman Rodriguez 711 00:40:39,320 --> 00:40:42,160 Speaker 4: at Carman Erman, dash Oll, Bennett at Dashbot and cal 712 00:40:42,200 --> 00:40:45,400 Speaker 4: Brooks at cal Brooks. Thank you to our producer Moses Onam. 713 00:40:45,680 --> 00:40:48,800 Speaker 4: For more Oddlots content, go to Bloomberg dot com slash Odlots, 714 00:40:48,800 --> 00:40:51,640 Speaker 4: where we have a blog, transcripts and a newsletter. And 715 00:40:52,000 --> 00:40:54,960 Speaker 4: check out the discord Discord dot gg slash odd Lots 716 00:40:54,960 --> 00:40:56,400 Speaker 4: where you can chat with fellow listeners. 717 00:40:56,400 --> 00:40:59,400 Speaker 1: Twenty four seven And if you enjoy Oddlots, if you 718 00:40:59,520 --> 00:41:02,920 Speaker 1: like it when we examine the Trump and Biden tariffs, 719 00:41:03,040 --> 00:41:06,160 Speaker 1: then please leave us a positive review on your favorite 720 00:41:06,160 --> 00:41:10,080 Speaker 1: podcast platform. And don't forget, if you are a Bloomberg subscriber, 721 00:41:10,200 --> 00:41:13,440 Speaker 1: you can listen to all of our episodes absolutely ad free. 722 00:41:13,840 --> 00:41:34,120 Speaker 1: Just connect your Bloomberg subscription to Apple Podcasts. Thanks for listening.