Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Doug Krisner.
Speaker 2: You can join Brian Curtis and myself for the stories,
Speaker 2: making news and moving markets in the APAC region. You
Speaker 2: can subscribe to the show anywhere you get your podcast
Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the
Speaker 2: Bloomberg Business app.
Speaker 3: A China trade lobby group says that China may consider
Speaker 3: raising temporary tearriffs to twenty five percent on imported cars
Speaker 3: with large engines. Joining us now for some discussion of
Speaker 3: this is Linda lu Bloomberg China Cars Reporter. So, Linda,
Speaker 3: you say in your story that we had two hundred
Speaker 3: and fifty thousand cars with engines more than two and
Speaker 3: a half liters imported into China twenty twenty three. I'm
Speaker 3: curious whether most of those come from the US and
Speaker 3: Europe And sounds like a big number, quarter of a million,
Speaker 3: is it.
Speaker 1: Yeah, it's interesting looking at this right now, we're trying
Speaker 1: to figure out from the custom stata which automakers will
Speaker 1: be impacted. But if you compare that to the number
Speaker 1: of electric vehicles that China exports, it's actually still smaller.
Speaker 1: China exported one point five million evs last year, with
Speaker 1: about six hundred and thirty eight thousand going to Europe
Speaker 1: and North America. Like with the US, which already had
Speaker 1: a high tariff, last year, they only received about fifty
Speaker 1: two thousand evs from China.
Speaker 2: So I'm imagining names like BMW, Audi, Mercedes, Benz and
Speaker 2: then from the US side, Cadillac some of the luxury models.
Speaker 2: Would that be a safe assumption.
Speaker 1: Yes, that's right. China now is such a big automaking country,
Speaker 1: they more than capable of essentially filling audio demand for
Speaker 1: cars domestically. But obviously there's some luxury models that are
Speaker 1: not made in China, and like you said, those brands
Speaker 1: would be the usual suspects when you're looking at imported
Speaker 1: cars into China.
Speaker 3: So this came from an interview from Leopin who is
Speaker 3: the chief expert of China Automotive Technology and Research Center.
Speaker 3: It was in the Global Times newspaper, and I think
Speaker 3: I'm not sure whether or not we would have picked
Speaker 3: up on it so much except for the China Chamber
Speaker 3: of Commerce to the EU talked about this and said
Speaker 3: that there would be implications, what would have to happen
Speaker 3: next for this to become policy.
Speaker 1: Yeah, we also were looking at the Global Times interview
Speaker 1: yesterday and not sure how much of an indication this
Speaker 1: is that China may eventually move to raise the tariffs.
Speaker 1: We're all really waiting to see whether an official director
Speaker 1: will come from one of China's government agencies, such as
Speaker 1: the Ministry of Commerce or Customs, where they will officially
Speaker 1: announce the raising of the tariffs.
Speaker 2: It feels like we're in a new phase of a
Speaker 2: trade war, wouldn't you say, when it comes to vehicles,
Speaker 2: particularly evs that are maybe exported from China to other markets,
Speaker 2: and now we're looking at possible punitive tariffs, temporary though
Speaker 2: they may be, that would target European and American manufactured
Speaker 2: luxury cars.
Speaker 1: Yes, I completely agree. And actually since the EU launching
Speaker 1: the anti subsidy investigation into Chinese evs, we've seen a
Speaker 1: whole series of tips for tat between China and the
Speaker 1: EU and obviously the US and January does ye China
Speaker 1: announced in anti dumping investigation into Brandy, which we think
Speaker 1: maybe a response to the EU investigation, and then with
Speaker 1: the US essentially quadrupling the imput tariffs for Chinese evs.
Speaker 1: Then in recent weeks we also saw China announcing another
Speaker 1: investigation into chemicals are being dumped from the EU. So
Speaker 1: there's a whole series of moves that I would say
Speaker 1: is really just developing this trade war.
Speaker 3: Behind the scenes here, Linda, how much is this affecting
Speaker 3: the status of some of the jvs in China that
Speaker 3: involves so many foreign companies, you know, pairing up with
Speaker 3: local companies.
Speaker 1: I would say with these tariffs, it's probably not going
Speaker 1: to have such a big impact on the jvs because
Speaker 1: a lot of their sales in China come from locally
Speaker 1: manufactured vehicles, and there the trenders in the Chinese market
Speaker 1: these days. The jvs such as General Motors, are the
Speaker 1: one with Ford, as well as the European joint ventures.
Speaker 1: They're all essentially suffering a hit to their sales because
Speaker 1: of China's fast transitioned to evs, and that's something they
Speaker 1: don't have strong offerings in and they're trying very hard
Speaker 1: to catch up.
Speaker 2: Linda, do you have a sense of what this may
Speaker 2: mean for Tesla, an American company with a factory in
Speaker 2: Shanghai making vehicles not only for the domestic market, but
Speaker 2: for exportation as well.
Speaker 1: Yeah, things could be dicey for Tesla because, as Elon
Speaker 1: Musk himself has said, the Shanghai factory is one of
Speaker 1: Tesla's most efficient and they turned out about half of
Speaker 1: Tesla's global deliveries last year. And so if the EU
Speaker 1: were to levy tariffs on Chinese made EV's going into
Speaker 1: the block, that could be a hit to Tesla. As
Speaker 1: for the US North American markets, I think Tesla's local
Speaker 1: factories there supply that market. But obviously with Chaye tensines
Speaker 1: getting worse, it's not going to be good for any
Speaker 1: business that's trying to do business over the world.
Speaker 3: And just because we're talking about two and a half
Speaker 3: leaders here on cars and these are larger engine cars,
Speaker 3: so are a lot of the jvs and local domestic
Speaker 3: manufacturers that produce these types of cars as well.
Speaker 1: Yes, I would say they produce a whole range of cars,
Speaker 1: you know, from very few efficient smaller vehicles to really
Speaker 1: beg gas guzzlers.
Speaker 3: So they would presumably benefit if some of the foreign
Speaker 3: models are closed out a bit by much higher costs.
Speaker 3: So that's something that we can watch, you know, in
Speaker 3: terms of investing Linda, thank you for joining us on
Speaker 3: the program. Linda lu Bloomberg China Cars Reporter, looking more
Speaker 3: closely at the potential here of extra tariffs on importing
Speaker 3: large cars.
Speaker 2: The world's most sophisticated chip making machines in Taiwan can
Speaker 2: be remotely disabled in the event China invades the island.
Speaker 2: This is a Bloomberg exclusive. We are told the remote
Speaker 2: shut off applies to a line of extreme ultraviolet machines
Speaker 2: made by ASML, and those machines are used by Taiwan
Speaker 2: Semiconductor Manufacturing Company or TSMC. Here's Bloomberg's Tom McKenzie from London.
Speaker 4: Essentially, this is a kill switch that would be applied
Speaker 4: to these ASML machines, these extreme ultraviolet lithography machines that
Speaker 4: process and produce, and they are essential to production of
Speaker 4: the most sophisticated chips that TSMC, that makes the biggest
Speaker 4: foundries over in Taiwan is dependent on. And TSMC's the
Speaker 4: biggest buyer of these euvs that are made and produced
Speaker 4: by SML.
Speaker 2: That is Bloomberg's Tom McKenzie. Now we are also told
Speaker 2: that American officials have privately expressed concern to both companies
Speaker 2: about what happens if Chinese aggression escalates into an attack
Speaker 2: on Taiwan. TSMC is responsible for producing the vast majority
Speaker 2: of the world's most advanced semiconductors ran well.
Speaker 3: Joining us now for some discussion of this is Peter Elstrom,
Speaker 3: Bloomberg Executive editor for Asia Technology. Peter, thank you for
Speaker 3: joining us. The two companies say they can disable these machines,
Speaker 3: and I suppose we have to take them at their
Speaker 3: word on this, but it will make people nervous, and
Speaker 3: it also raises the question of how much of this
Speaker 3: is priced in, And we saw trading in a stock
Speaker 3: didn't do all that much. But at least at the moment,
Speaker 3: there are no signs of invasion, so presumably there would
Speaker 3: be time. But are you hearing from people that they
Speaker 3: see a need to discount this further?
Speaker 5: Yeah, So this is to be clear that companies are
Speaker 5: not talking publicly about these capabilities, and the relationship is
Speaker 5: Taiwan Semiconductor makes the world's most advanced chips largely in Taiwan,
Speaker 5: and ASML supplies the most advanced equipment for making those chips.
Speaker 5: So what sources have been telling us is that there
Speaker 5: have been concerns about what happens if China gets more
Speaker 5: aggressive around Taiwan, if there's even an escalation into an
Speaker 5: attack on the island. Again, the story does not go
Speaker 5: into the prospects for that. We think that that obviously
Speaker 5: that is something that the companies are not involved and
Speaker 5: wouldn't know anything about. But ASML has been approached by
Speaker 5: the Dutch government about the possibility of what would happen then,
Speaker 5: and ASML has told those government officials that they are
Speaker 5: able to disable these machines remotely if something like that happens. Essentially,
Speaker 5: this is a remote kill switch so that they could
Speaker 5: stop these machines from producing advanced chips if something happens
Speaker 5: around Taiwan. More broadly, they'd be able to do that
Speaker 5: sort of thing. Also in addition to that, so it's
Speaker 5: an extra level of caution and security that I think
Speaker 5: the government in the Netherlands in the US would see
Speaker 5: as a sign of reassurance of these advanced chip making
Speaker 5: machines won't fall into long Peter.
Speaker 3: We stated that in our story. But what I was
Speaker 3: getting at is this discounted. I mean, are you hearing
Speaker 3: from people that that this is a serious concern or
Speaker 3: that no, it's not so much a serious concern.
Speaker 5: Well, that's sort of the question is sort of predicated
Speaker 5: on how likely is it that China actually takes some
Speaker 5: military action against Taiwan. I think the companies are not
Speaker 5: privy to the discussions at the most advanced levels of
Speaker 5: the US government or the Dutch government for that matter,
Speaker 5: So the companies are preparing for these kinds of contingencies
Speaker 5: not really knowing what the chances are that something like
Speaker 5: this would happen. Obviously, the tensions between the US and
Speaker 5: China have been escalating over the past few years, and
Speaker 5: there have been concerns about this. China continues to claim
Speaker 5: that Taiwan is a breakaway province and that eventually there
Speaker 5: should be some reunification of the two locations, and the
Speaker 5: US government has pushed back on that assertion.
Speaker 2: Peter, I remember a while back our colleagues in Washington,
Speaker 2: d C. At Bloomberg News reported that the Bide administration
Speaker 2: was looking at ways to potentially destroy this equipment should
Speaker 2: there be an invasion of Taiwan on the part of
Speaker 2: mainland China. And I think it's important to point out
Speaker 2: that under current export controls that China cannot access this
Speaker 2: very advanced technology that is produced by TSMC.
Speaker 5: Yeah, that's exactly right. Yeah, the US government's beginning with
Speaker 5: Donald Trump's first administration and then the Biden administration, have
Speaker 5: been tightening the restrictions on China's ability to get both
Speaker 5: chips and then the machines that actually make those chips.
Speaker 5: You're referring to a type of machine that ASML makes
Speaker 5: called extreme ultraviolet machines or UV machines. Those machines are
Speaker 5: used to make the most advanced semiconductors out there, including
Speaker 5: the chips that go into iPhones, the chips that Nvidia
Speaker 5: uses for AI training. China has never been able to
Speaker 5: buy those kinds of machines. Those have been prohibited, but
Speaker 5: more recently there have been tighter restrictions on others of
Speaker 5: chips and other kinds of machines that China and Chinese
Speaker 5: companies have been able to buy. So, yeah, that's an
Speaker 5: increasingly tightened restrictions. What we've seen in reaction to that
Speaker 5: is that China's investing a large amount of money into
Speaker 5: its own chip industry. It's trying to build up some
Speaker 5: of these domestic capabilities, and Smick, the leading maker in
Speaker 5: China of semiconductors, has made quite a bit of progress,
Speaker 5: as we saw last year with a chip that was
Speaker 5: found in Huawei smartphone. They've been able to reach seven
Speaker 5: nanimeter production, which is not at the cutting edge, but
Speaker 5: it's quite close.
Speaker 3: So one of the areas that we've covered here in
Speaker 3: this discussion this morning is is whether or not China
Speaker 3: could get its hands on this equipment. And we were
Speaker 3: talking about how there's a kill switch to it, and
Speaker 3: that's fine. What I think is even bigger really is
Speaker 3: is how much does this then disrupt TSMC and all
Speaker 3: the automated systems of the world and all the high
Speaker 3: tech companies that use these chips. I mean, this is
Speaker 3: what I was getting at by asking about how much
Speaker 3: is priced in about the impact on the entire semiconductor sector.
Speaker 5: Well, KSMC still is largely dependent on its base of
Speaker 5: production in Taiwan. That's where it makes the vast majority
Speaker 5: of its chips, and it certainly its most advanced chips.
Speaker 5: But you have seen the company begin to diversify geographically
Speaker 5: at the urging of governments around the world, including the
Speaker 5: US government. It's building a chip fabrication plant here in Japan,
Speaker 5: it's building another one in the United States. It may
Speaker 5: also build something in Europe at some point, So that does,
Speaker 5: I think to your point, that does create additional expenses
Speaker 5: because they need more plants in more different areas to
Speaker 5: kind of have the geographic diversity that would minimize the
Speaker 5: risks of anything happen to their Taiwan production plants. But
Speaker 5: make no mistake, what they have right now in Taiwan
Speaker 5: has not been replaced yet and probably won't be replaced
Speaker 5: for many, many years. The company's strategy for a long
Speaker 5: time was to make everything in Taiwan because they have
Speaker 5: their best equipment there, their most advanced equipment. They also
Speaker 5: have their best engineers. They can share knowledge about how
Speaker 5: to run the production lines, the whole production process that
Speaker 5: allows them to reach high yield so that they get
Speaker 5: a high percentage of their chips that are workable. At
Speaker 5: the end of that, when you start to do that
Speaker 5: in three different countries for four different countries, gets much
Speaker 5: more complicated. That's one of the strategic challenges for TSMC
Speaker 5: right now.
Speaker 3: Absolutely the impact could be you know, it just could
Speaker 3: be enormous. Peter, thanks so much for joining us. Peter Elstrom,
Speaker 3: Bloomberg Executive editor for Asia Technology. Six FED officials spoke
Speaker 3: in Unison today about keeping interest rates higher for longer.
Speaker 3: Governor Christopher Waller wants to see three to five months
Speaker 3: of good inflation data before considering cutting rates. In the meantime,
Speaker 3: Atlanta as Rafae Albostik said, the FED is actively re
Speaker 3: thinking it's view on the neutral rate. Here's Bloomberg's Michael McKee.
Speaker 6: Fed officials are speaking with one voice now that they
Speaker 6: don't think they're going to be cutting rates anytime soon.
Speaker 6: There's a slight disagreement about how many they might get
Speaker 6: in this year, if any at all, but they all
Speaker 6: seem resigned to the fact that this is going to
Speaker 6: be a long process and that the US is going
Speaker 6: to be the outlier. The ECB can go ahead first,
Speaker 6: maybe the Bank of England, but the FED is going
Speaker 6: to sit tight for several.
Speaker 3: Months Bloomberg's Michael McKee. In the meantime, ECB President Christine
Speaker 3: Legard is forecasting June rate cut for Europe if the
Speaker 3: price path holds. Joining us now. In our studios in
Speaker 3: Hong Kong is Carl Tannenbaum, chief economist at Northern Trust.
Speaker 3: Carl the implications of the economy and also the markets
Speaker 3: holding up pretty well with interest rates steady here at
Speaker 3: a pretty high level. Seems to be that the neutral
Speaker 3: rate has moved higher. Your thoughts on that and where we're.
Speaker 7: Heading, Well, first, good morning, Brian. It is not a
Speaker 7: surprise to me that the Fed formed a bucket brigade
Speaker 7: to pour cold water on the market's assumption that easing
Speaker 7: would come more approximately. This is the second round that
Speaker 7: we've had with over optimism from investors this year, and
Speaker 7: I think they want to make sure that their intentions
Speaker 7: are not misunderstood. In addition, the American economy has continued
Speaker 7: to sustain momentum far beyond expectation, leading some to think
Speaker 7: that the amount of restraint that is required to achieve
Speaker 7: the inflation target is higher. That's the science behind the
Speaker 7: neutral rate, And so again it looks to us as
Speaker 7: well as the markets, like it will be late this
Speaker 7: year at the earliest before we get that first easing
Speaker 7: from the Fed.
Speaker 2: And between now and then more dollar strength. And I
Speaker 2: would imagine Carl and the conversations that you're having there
Speaker 2: in the Apac region, there are some people that are
Speaker 2: a little annoyed with that fact.
Speaker 7: There's little doubt. While it's been good for me, I
Speaker 7: was actually able to afford breakfast in Singapore for the
Speaker 7: first time and a number of visits. The fact is
Speaker 7: is that there are central banks in emerging markets who
Speaker 7: have settled inflation, they have growth struggling, and who would
Speaker 7: like to ease interest rates to help those conditions. But
Speaker 7: to do so would risk appreciating the currency and making
Speaker 7: the things they import more expensive. So there are central
Speaker 7: banks around the world that are very much fed dependent.
Speaker 3: So, Carl I was interested to hear you say that
Speaker 3: you felt as though the markets were overextended to a
Speaker 3: certain degree. And that's not what I want to ask
Speaker 3: you about. I want to ask you about the economy,
Speaker 3: because you get this feeling that some people still hold
Speaker 3: out that a recession could happen sometime later this year
Speaker 3: or early next year. In other words, there's a lot
Speaker 3: of uncertainty. How strong is the economy and how durable
Speaker 3: and sustainable is it in your view?
Speaker 7: Well, looking backwards, American economic growth has exceeded expectation for
Speaker 7: seven quarters in a row, and not by a little,
Speaker 7: and the tracking here in the second quarter also looks
Speaker 7: very positive. I think the common over the thing that
Speaker 7: people have overlooked is the consumer strength. I know that
Speaker 7: the markets got a little excited that our unemployment rate
Speaker 7: has gone up to three point nine percent, but for
Speaker 7: most of my career that would have been an amazing level.
Speaker 7: And real wages are growing, giving the kind of spending
Speaker 7: power that sustains economic activity. Consumers have turned out their debts,
Speaker 7: so of corporations, and so monetary policy hasn't bitten as much,
Speaker 7: hence the need to keep rates higher for longer.
Speaker 2: Carl, I'm curious, how are you making sense of the
Speaker 2: inversion of the yield curve as persistent as it has been.
Speaker 7: One of the things I've pointed out to our clients
Speaker 7: at Northern Trust is that an inverted yield curve is
Speaker 7: consistent with a soft landing as well as a recession.
Speaker 7: And if you take a look at the history of
Speaker 7: the yield curve as a recession indicator, it's quite mixed.
Speaker 7: There have been times we've had inversions without a recession,
Speaker 7: and at times the curve has inverted and we haven't
Speaker 7: seen a downturn for almost two years afterwards. So I
Speaker 7: think it's important to look at other indicators as a
Speaker 7: compliment to that one gauge.
Speaker 3: There's also this fear, perhaps that the consumer is weakening
Speaker 3: a little and particularly at the lower end. And you
Speaker 3: need only look at a stock like Visa, which is
Speaker 3: actually down over the past three months. It's not up.
Speaker 3: I mean people think, oh, every stock is up in
Speaker 3: the United States, this is the everything, Raley, It is
Speaker 3: not really the case. Some consumer even Meta is actually
Speaker 3: a little bit lower over the past three months. I'm
Speaker 3: wondering how healthy is the consumer really.
Speaker 7: Over And I think you've hit on something that's very important,
Speaker 7: and that is you can look at things in aggregate,
Speaker 7: but the details matter. The incomes. Let's say the lowest
Speaker 7: forty percent of income groups in the United States, they've
Speaker 7: exhausted their pandemic savings, and while they're still working, they're
Speaker 7: spending a little bit faster than they should. And we've
Speaker 7: seen an accumulation of consumer debt that's back to levels
Speaker 7: that we saw prior to the pandemic. Associated with that,
Speaker 7: we've seen some debt delinquencies, which also suggests that maybe
Speaker 7: some belt tightening is on the horizon. One reason why
Speaker 7: I would anticipate consumer spending in America to taper off
Speaker 7: to a much lower rate of growth as we move
Speaker 7: through twenty twenty four.
Speaker 2: One of the things that we've been focusing on a
Speaker 2: lot on this program. Is the divergence between kind of
Speaker 2: what the markets may be signaling and the soft landing
Speaker 2: that you've been kind of outlying there. Do you think
Speaker 2: that there is a risk that markets need to recalibrate,
Speaker 2: that maybe there is on the equity side, at least
Speaker 2: a little too much enthusiasm.
Speaker 7: I wouldn't think so. Again, the economic outlook is very solid.
Speaker 7: The earnings outlook has been very, very good in certain
Speaker 7: sectors that have been leading our markets as well as others.
Speaker 7: There's a lot of optimism about what the next generation
Speaker 7: of machine learning and artificial intelligence might bring. That's really
Speaker 7: been the big driver. The other question that I get
Speaker 7: a lot is we do have an election coming up,
Speaker 7: and people are concerned about how that might affect markets,
Speaker 7: but the history shows that that impact is relatively small.
Speaker 3: Both gentlemen running seem to want to spend a lot.
Speaker 3: Is that something like debts and deficits don't matter at
Speaker 3: the moment, but does that come into the picture sometime soon.
Speaker 7: Well, it's frightening. Neither one of them is serious about
Speaker 7: fiscal policy. One would probably like to reduce taxes further
Speaker 7: and claim that that pays for itself. The other would
Speaker 7: like to continue spending but characterize it as an investment
Speaker 7: whose returns would also leave the budget net neutral. And
Speaker 7: I hear that said, and then I look at the
Speaker 7: national debt of thirty four trillion that's likely to triple
Speaker 7: over the next twenty years if policy isn't changed, And well,
Speaker 7: I'm looking around for somewhere else to live, just in
Speaker 7: case the worst happens in the USA may maybe here
Speaker 7: in Hong Kong.
Speaker 2: Who knows one of the candidates too, seems to be
Speaker 2: implying that maybe the FED shouldn't be an independent body.
Speaker 2: How do you feel about that?
Speaker 7: Yeah, that story came out I think a few weeks ago.
Speaker 7: Let me reassure our listeners. Structurally, from a legal perspective,
Speaker 7: it would be very difficult for an administration to have
Speaker 7: undue power over the FED absent a congressional change reopening
Speaker 7: the Federal Reserve Act itself, which I find highly unlikely.
Speaker 7: In the structure within the FED where I used to
Speaker 7: work is one that feels it's independence is really critical
Speaker 7: to economic and market performance, and they will safeguard that
Speaker 7: to their last breath.
Speaker 3: You know, I'm curious to get back at some of
Speaker 3: these uncertainties that persist, and my ultimate question to you
Speaker 3: will be what's an outlier? But let me just lay
Speaker 3: some groundwork here. First, I was interested to hear Morgan
Speaker 3: Stanley's Mike Wilson on Surveillance, excellent program. I always like
Speaker 3: to catch that before I go to sleep at night.
Speaker 3: And you know, he was a long standing bear. He's
Speaker 3: raised his targets, but he still sounds pretty bearish, pretty
Speaker 3: downbeat in many ways. So he says, look, we just
Speaker 3: don't know, We can't know. And anybody who says they know,
Speaker 3: you know, they're fooling themselves. Is it really that, Alista?
Speaker 3: What really keeps you awake at night? What are you
Speaker 3: most concerned about as a risk for the economy?
Speaker 7: If I were to try and untangle that statement, that's
Speaker 7: one that a lot of us have. First, the markets
Speaker 7: have performed very well, multiples are at the up end
Speaker 7: of their acceptable ranges, of volatility has been low, and
Speaker 7: yet we're concerned. And I suppose the way you square
Speaker 7: that circle, Brian, is that there are a lot of
Speaker 7: potential tail risks. We have high levels of geopolitical uncertainty,
Speaker 7: two wars going on, and other both economic and political
Speaker 7: conflicts likely, and I think that that leads some to
Speaker 7: suspect that the risk premium resident in markets right now
Speaker 7: is not sufficient to cover if one of those tail
Speaker 7: events becomes a reality.
Speaker 2: Maybe a third war and let's call it a trade
Speaker 2: war between the US and China. What type of impact
Speaker 2: do you think that may have? And we've already seen
Speaker 2: a lot in terms of export controls and the threats
Speaker 2: of tariffs, new tariffs being imposed. Where is this going.
Speaker 7: Well, war is probably an extreme term given the kinetic
Speaker 7: activity that we have, but the trade frictions between China
Speaker 7: and the United States continue to escalate. It actually as
Speaker 7: one of the few policy areas where Republicans and Democrats
Speaker 7: are in unison, so unlikely to see much of a
Speaker 7: change there. The challenge there is that that could be
Speaker 7: inflationary for everyone. It could narrow the path to development
Speaker 7: for smaller economies and for entrepo economies like Hong Kong Singapore.
Speaker 7: In this region, that friction is not helpful either to
Speaker 7: financial or commercial activity.
Speaker 3: Carl, thanks so much for joining us, for being here
Speaker 3: in Hong Kong and taking out the time to come
Speaker 3: into our studios. Later off, Mike, I can recommend some
Speaker 3: areas in Hong Kong if you're really seriously thinking about
Speaker 3: joining us here. I know you said that partially tongue
Speaker 3: in cheek, but it's great to have you with us
Speaker 3: on the program. Carl Tenenbaum, Chief Economist at Northern Trust.
Speaker 2: This has been the Bloomberg Daybreak Asia podcast, bringing you
Speaker 2: the stories making news and moving markets in the Asia Pacific.
Speaker 2: Visit the Bloomberg Podcast channel on YouTube to get more
Speaker 2: episodes of this and other shows from Bloomberg. Subscribe to
Speaker 2: the podcast on Apple, Spotify, or anywhere else you listen,
Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the
Speaker 2: Bloomberg Business app.