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Speaker 1: Hello, this is COI Time, a podcast series on markets

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Speaker 1: and economies from DBS Group Research. I'm Tammu Wei, chief economist,

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Speaker 1: welcoming you to our 146th episode. Today, it's all about

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Speaker 1: trade policy. We welcome back to the show Dr. Deborah Elms,

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Speaker 1: head of trade policy at the Heinrich Foundation in Singapore.

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Speaker 1: Prior to joining the Foundation, Deborah was the executive director

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Speaker 1: and founder of the Asian Trade Center.

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Speaker 1: She was also president of the Asia Business Trade Association

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Speaker 1: and the board of director of the Asian Trade Center Foundation.

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Speaker 1: Deborah Elms, great to have you back on COI time.

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Speaker 2: Thank you. And can I just say what an amazing

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Speaker 2: achievement it is to have 146 episodes under your belt.

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Speaker 1: Uh, those 146 episodes stand on the back of illuminas

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Speaker 1: like you. So thanks for your support, Deborah. Thank you. Uh,

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Speaker 1: let's start with an assessment of US trade policy of

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Speaker 1: the last 8 years.

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Speaker 1: Did the narrative shift from Trump to Biden, or has

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Speaker 1: it really been a single bipartisan threat of rising protectionism?

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Speaker 2: I think there were signs of change happening even before

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Speaker 2: Trump won.

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Speaker 2: Uh, that came into office. And in fact, if you

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Speaker 2: start looking back through 2010, 2011, Tea Party efforts in

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Speaker 2: the US under the Republican Party, you still see, you,

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Speaker 2: you begin to see really strong strains of what is

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Speaker 2: now sort of called Trumpism, but they started back even

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Speaker 2: before he, he made it into office. However, he has

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Speaker 2: changed the narrative. He changed the narrative in his first term.

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Speaker 2: From an acceptance of open trade, open markets, globalization more broadly,

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Speaker 2: the US as part of an important network of all

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Speaker 2: of alliances, um,

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Speaker 2: Both for security and economic reasons, for raising living standards,

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Speaker 2: reducing poverty, all kinds of things. Trump changed that narrative,

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Speaker 2: and he changed it in a way that I think

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Speaker 2: is durable and probably lasting, uh, particularly around the difficulties

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Speaker 2: of keeping trade open.

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Speaker 2: And so I think that narrative shift, which again was

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Speaker 2: building up over time, really reached a tipping point, if

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Speaker 2: you will, under Trump one, and it maintained um mostly

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Speaker 2: intact through Biden and of course with Trump and again,

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Speaker 2: we're pushing the boundary of even further in this new protectionist,

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Speaker 2: isolationist America first law of the jungle kind of direction.

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Speaker 1: I mean, I remember even back in the 80s and 90s,

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Speaker 1: you know, Buy American movement was there with trucks that,

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Speaker 1: you know, you bought Ford and you didn't buy Toyota.

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Speaker 1: But then Toyota started getting made in the US, and

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Speaker 1: I don't think people think of a Toyota truck as

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Speaker 1: a Japanese truck per se, but I saw salvos of that,

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Speaker 1: and of course I'm sure you know, and I always

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Speaker 1: like to point it out to people that even the

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Speaker 1: young Trump back in 1987 took a full page ad

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Speaker 1: criticizing Reagan for being too nice to the Japanese on

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Speaker 1: the trade front.

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Speaker 2: Yeah, I remember those days quite vividly because I was

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Speaker 2: at the time, obviously much younger and, you know, and

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Speaker 2: a student going through the process of studying trade, and

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Speaker 2: from my perspective, I also looked at US Japan disputes

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Speaker 2: at the time.

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Speaker 2: If you were to flash forward, many of Trump's specific

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Speaker 2: complaints about China look exactly like Trump's specific complaints about

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Speaker 2: Japan in the 80s and 90s. And I, I always

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Speaker 2: sort of laughed in the first Trump administration, my dissertation

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Speaker 2: was on this tool called Section 301 on unfair trade.

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Speaker 2: And when I finished my dissertation, I thought, well, you know,

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Speaker 2: I mean, it was an interesting thing to do, and

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Speaker 2: I'm glad that I did it, but ultimately this is

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Speaker 2: a pointless piece of research because we're never going to

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Speaker 2: see Section 301 again. It's been retired, it's not gonna

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Speaker 2: be in use. The United States has declared it's not

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Speaker 2: using it, so really, why does it, you know, this

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Speaker 2: was a lot of effort for not very much purpose.

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Speaker 2: And then when Trump came back, came into power and

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Speaker 2: suddenly we were using Section 301.

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Speaker 2: I thought, holy cow, I had to dust off my dissertation,

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Speaker 2: read up again on what the statute was, why did

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Speaker 2: it work, review the whole set of cases. And I thought,

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Speaker 2: who would have imagined at the time that I was

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Speaker 2: writing this, that I would have to come back to

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Speaker 2: this again as a live issue?

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Speaker 1: There were you and I were at an event on

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Speaker 1: US inauguration just a few days ago, and I remember

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Speaker 1: you saying that we should stop saying unprecedented because just

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Speaker 1: about everything that is happening is sort of so out

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Speaker 1: of the realms of ordinary that it is by definition

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Speaker 1: all of these things are a first and we just

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Speaker 1: have to get used to this unprecedented stuff happening over

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Speaker 1: and over again.

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Speaker 1: But let me ask you for a report card. We've had,

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Speaker 1: to your point, longer than 8 years of rising protectionism,

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Speaker 1: but let's just take the last 8 years. Trump really

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Speaker 1: sort of, you know, re-entered the discussion around protectionism. What

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Speaker 1: has been the impact of these measures to restrict trade

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Speaker 1: and investment? Has the US gained jobs and investment? Has

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Speaker 1: China been hurt materially?

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Speaker 2: Uh, I think if you say, what are the broad

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Speaker 2: macro trends, and you would know this better than anyone,

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Speaker 2: the broad macro trends look relatively unchanged. I mean, trade

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Speaker 2: is at a global trade is at a higher level

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Speaker 2: than it was pre-Trump.

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Speaker 2: COVID, uh, the challenge we have in a little bit,

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Speaker 2: a little bit on the data is, you know, COVID

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Speaker 2: made a big difference on trade flows and trade patterns. So,

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Speaker 2: COVID plus Trump creates a sort of confusion over what the,

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Speaker 2: the information actually shows, but global trade remains intact and robust.

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Speaker 2: But what has changed is the patterns of global trade,

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Speaker 2: and it hasn't changed completely, but you can see, for example,

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Speaker 2: That in the wake of Trump's first term, direct trade

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Speaker 2: between China and the United States, especially as shown by

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Speaker 2: trade in goods, has fallen off rather dramatically. But at

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Speaker 2: the same time, trade in goods from other places into

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Speaker 2: the United States has gone up dramatically, and part of

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Speaker 2: that is the reshuffling of supply chains to take

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Speaker 2: Into account restrictions on trade with the US. Part of

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Speaker 2: it is markets and firms that are finding new opportunities.

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Speaker 2: You know, absent to crisis, sometimes it's hard for a

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Speaker 2: firm to say, this is the moment when I'm gonna

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Speaker 2: spend a lot of money and a lot of resources,

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Speaker 2: time and effort on new market.

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Speaker 2: Exploration, developing my new markets, but in a crisis, then

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Speaker 2: you suddenly can say, actually, this is the moment when

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Speaker 2: we have to make that investment and look for alternative

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Speaker 2: final markets for our products, new suppliers, new distributors, etc.

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Speaker 2: and I think that's been happening as well over the

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Speaker 2: last 8 years.

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Speaker 1: Why was it not possible for the Biden administration to

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Speaker 1: make a case for rolling back Trump era tariffs, even

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Speaker 1: though inflation was such a big issue in 201, 202?

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Speaker 2: Well, that's gonna be one of the many subjects for

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Speaker 2: the next PhD dissertation. It's why is it that the

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Speaker 2: Democrats have and Biden himself have been so spectacularly unsuccessful

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Speaker 2: at explaining why trade and economic openness matters to average Americans. We,

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Speaker 2: we just, we have done a terrible job of being pro-trade.

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Speaker 2: In general, anyone who's pro-trade done a terrible job of

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Speaker 2: explaining why this matters, and it's not just in the US.

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Speaker 2: I mean, there is a quote that has, will stick

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Speaker 2: with me till I die, that came from the Brexit

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Speaker 2: period in which uh uh right after the Brexit vote

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Speaker 2: for the UK to leave the European Union, they interviewed

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Speaker 2: as

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Speaker 2: A worker at a Japanese automaker in the UK that

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Speaker 2: sells almost or at least it did at the time,

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Speaker 2: sold almost all of their products directly into the European Union.

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Speaker 2: And this gentleman, when asked about Brexit, said, What is

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Speaker 2: trade to me? I don't own any stocks.

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Speaker 2: And I thought, wow, we have lost the plot. When

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Speaker 2: a guy who works for a Japanese company in the

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Speaker 2: UK that exports all of the products does not see

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Speaker 2: that he is a vital part of global trade. And

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Speaker 2: so I think that experience is replicated over and over

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Speaker 2: and over again, where people experience trade in every hour

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Speaker 2: of their day, but they don't know that. They don't

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Speaker 2: recognize it. And so that makes it easy for them

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Speaker 2: to to to listen to someone who says, I will

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Speaker 2: protect your back, I will save you from trade evil.

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Speaker 2: And they say fantastic. And then when you say, but

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Speaker 2: let's think about what you do and where you do

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Speaker 2: it and why you do it, and actually, you know what,

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Speaker 2: you need trade, both for your own personal life but

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Speaker 2: also for your professional life. Your job depends on trade often.

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Speaker 2: That's a hard lesson for people to get.

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Speaker 1: Yeah, very much so. I've got to say, I mean,

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Speaker 1: I was disappointed, but lately, Deborah, I've been sort of

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Speaker 1: reading about the late 1890s when McKinley was imposing all

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Speaker 1: those tariffs. I mean, there was this whole period between

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Speaker 1: 1892 and 1896 when the Democrats ran against tariffs, wanted

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Speaker 1: to roll them back, but failed despite having the House

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Speaker 1: and the Senate and grow Cleveland as the president because

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Speaker 1: the regulatory.

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Speaker 1: Lobbying was so much that whoever was getting protection under

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Speaker 1: tariff basically said, All right, you may have run against tariff,

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Speaker 1: but not my industry, keep my industry under protection. I'm

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Speaker 1: not entirely aware if there was substantial lobbying done by

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Speaker 1: American companies um in the Biden administration days to prevent

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Speaker 1: Trump era tariffs from being rolled back, but are you

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Speaker 1: aware of any such thing?

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Speaker 2: Definitely. I mean, this is the problem with tariffs, is

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Speaker 2: that it's very concentrated, right? So if you receive a tariff,

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Speaker 2: in other words, you receive the protection behind the tariff wall,

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Speaker 2: you're very aware of it and you're very delighted by

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Speaker 2: that because it means that the competition is much less

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Speaker 2: for you. You can charge whatever prices you want within reason,

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Speaker 2: of course, but you, you, you have flexibility that you

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Speaker 2: wouldn't have if you weren't sheltered behind this tariff wall.

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Speaker 2: And so firms fight for that. And, and the most

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Speaker 2: classic example, there are many in the US, but one

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Speaker 2: classic example in the US is the steel sector. And

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Speaker 2: if you look at who pushed hard to keep steel

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Speaker 2: and aluminum tariffs through Trump, through Biden, and now into

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Speaker 2: Trump too, it's steel and aluminum. And in fact, steel

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Speaker 2: and aluminum tariffs, not only are they back on the

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Speaker 2: agenda for Trump too, but there is an effort to

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Speaker 2: try to raise them.

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Speaker 2: Potentially, or to crack down on any kind of of

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Speaker 2: assumed subversion of steel and aluminum to ensure that Buy

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Speaker 2: American is only for American steel and aluminum, etc. etc.

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Speaker 2: And when you do the research, uh, on how much

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Speaker 2: does it cost per job saved to save these jobs

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Speaker 2: and steel and aluminum, the last time that I saw

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Speaker 2: the numbers come through, it was $300 850,000 dollars per

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Speaker 2: job saved to keep steel working in the United States.

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Speaker 2: So you say, wow, that's an awful lot of money

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Speaker 2: that is going to protect uh not very many jobs.

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Speaker 2: And it's likely to get even more expensive as you

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Speaker 2: go forward in time and you continue to keep this protection.

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Speaker 2: But you can imagine just to sort of wrap this up,

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Speaker 2: if you're receiving $850,000 per job saved, you will fight

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Speaker 2: hard to maintain that protection, because as soon as that

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Speaker 2: protection goes away.

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Speaker 2: You're then exposed to competitive forces that you may not

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Speaker 2: be prepared for. And so the fight is brutal in

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Speaker 2: Washington over reducing any kind of existing tariff preferences, even

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Speaker 2: in sectors where the United States, for example, doesn't trade.

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Speaker 2: It's really hard to get rid of a tariff once

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Speaker 2: it's in place.

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Speaker 1: Yeah, absolutely. And Deborah, on the issue of jobs, A,

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Speaker 1: it is expensive to keep the jobs, but B,

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Speaker 1: The US steel sector is not a job intensive industry anymore.

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Speaker 1: The employment in the steel industry is like 75% less

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Speaker 1: than it was 40 years ago. Production is more or

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Speaker 1: less the same, so it has become immensely profitable. You

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Speaker 1: could argue that they can actually produce more steel with

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Speaker 1: less people and therefore it's more productive. But any favor

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Speaker 1: to that industry is basically going to the owner of

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Speaker 1: the capital, not necessarily to hundreds of thousands of workers

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Speaker 1: because there aren't hundreds of thousands of workers working in

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Speaker 1: the steel industry anymore.

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Speaker 2: It's crazy actually how upside down policy, particularly from the

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Speaker 2: United States, is to protect a relatively small number of

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Speaker 2: jobs in manufactured goods, while ignoring, and I think for

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Speaker 2: me this is the key second part, while ignoring the

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Speaker 2: enormous number of jobs in the United States and most

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Speaker 2: developed economies in the services sector.

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Speaker 2: So Trump especially, more than anyone I can think of,

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Speaker 2: is so fixated on trade and manufactured goods that he

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Speaker 2: does not ever talk about trade and services. That's especially

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Speaker 2: weird to me because if you think about Trump's own background,

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Speaker 2: he is 100% services. His whole background, real estate, travel, tourism,

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Speaker 2: golf courses, food and beverage, social clubs, whatever it is,

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Speaker 2: those are all services sector jobs, services sector.

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Speaker 2: Um, um, positions, and yet he has no interest in services,

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Speaker 2: which is most of the jobs and most of the

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Speaker 2: economic growth and, and the future for most developed world

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Speaker 2: economies is in services.

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Speaker 1: Deborah, I just want to add one story on the

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Speaker 1: washing machine element because that was one area where we

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Speaker 1: saw clear evidence of prices going up after the tariffs

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Speaker 1: were imposed. I think the counter from some of the

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Speaker 1: people in the Trump camp has been it's nonetheless forced

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Speaker 1: LG and others to move some plants.

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Speaker 1: To the US and created a few 1000 jobs. But

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Speaker 1: I think that is one example where we actually have

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Speaker 1: good data on what happens when you put up tariff

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Speaker 1: and what what happens when you remove the tariff because

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Speaker 1: just I think it was in 2022 or 2023 when

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Speaker 1: the Biden administration allowed the tariffs to go down, washing

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Speaker 1: machine prices fell for the first time since the tariffs

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Speaker 1: were imposed. So this is one tiny example where we

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Speaker 1: can see there is a link between tariffs and inflation,

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Speaker 1: pretty quick and clear.

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Speaker 1: But again, I'm sort of vexed why it was not

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Speaker 1: something that was embraced broadly by the Biden administration.

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Speaker 2: I can't, I can't really help you there, but I,

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Speaker 2: I would say again, like who fought against washing machine

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Speaker 2: tariff removal, washing machine companies and companies in the steel

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Speaker 2: sector that supplied steel to domestic, potentially domestic washing machine manufacturers.

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Speaker 2: And so you end up with protectionist industries supporting other

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Speaker 2: protectionist industries in a sort of unholy alliance, I would argue.

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Speaker 2: Of of restrictions for the purpose of maintaining those jobs,

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Speaker 2: and there is a clear sense from especially the Trump administration,

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Speaker 2: but also potentially from the Biden administration with their worker

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Speaker 2: centered trade policy, that there is something uniquely valuable about

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Speaker 2: a manufacturing job.

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Speaker 2: Which is worth supporting. And so I think from the

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Speaker 2: Biden side at least, they would say, even if it

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Speaker 2: costs us money, even if we have to pay more

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Speaker 2: for washing machines, it's worth it because it's important to

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Speaker 2: keep manufacturing jobs in the United States and to keep

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Speaker 2: those opportunities available for Americans who want to be in manufacturing.

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Speaker 2: And so I think that's the, the, the slightly unusual

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Speaker 2: orientation that the Biden team had, but the Trump team

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Speaker 2: has it as well. And if you look at many

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Speaker 2: of the statements across different people in the Trump administration,

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Speaker 2: it's quite clear that they see a manufacturing job as

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Speaker 2: more valuable than an alternative job, whether you're, I don't know.

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Speaker 2: Doing education or you're, you know, in finance or whatever

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Speaker 2: it is, you are not as valuable as a as

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Speaker 2: an source of employment as a manufactured job.

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Speaker 1: Yeah, it's odd because just like Trump, most of those

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Speaker 1: people also are very much from the services sector, lawyers

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Speaker 1: and techies, but somehow they're all in love with blue

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Speaker 1: collar jobs

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Speaker 2: in love

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Speaker 2: with manufacturing. And if you say to them, do you

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Speaker 2: want your son or daughter to be making washing machines,

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Speaker 2: to be physically.

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Speaker 2: The assembly line, making washing machines, they would say, No,

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Speaker 2: I sent my kid to Harvard or Yale or something.

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Speaker 2: I don't want my kid to be the one who's

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Speaker 2: putting together the, the washing drum with the whatever wiring

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Speaker 2: harness or whatever goes into, I don't even know what

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Speaker 2: goes into a washing machine. Um, they would say no.

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Speaker 2: You know, so it's, it's rare. I mean, I, I,

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Speaker 2: my son is in manufacturing, and I will tell you

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Speaker 2: that especially among my peers, that's very unusual to have

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Speaker 2: a child that goes on and ends up in in

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Speaker 2: manufacturing is very unusual.

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Speaker 2: Um, and we could talk about whether that's a good

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Speaker 2: thing or a bad thing. I don't think I'm just

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Speaker 2: to be clear, I'm perfectly happy with manufacturing jobs. I'm

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Speaker 2: not suggesting that they're horrible or they're all horrible or

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Speaker 2: we shouldn't have them. I'm just saying that if you

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Speaker 2: look at the structure of the US economy and you

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Speaker 2: look at where most of the jobs are, it's not

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Speaker 2: in manufacturing.

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Speaker 2: And it's likely to be less in manufacturing the future

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Speaker 2: for the reasons that you just indicated, as you move

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Speaker 2: towards more automation in plants, you have fewer people who

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Speaker 2: are on the assembly line, making the washing machines. You

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Speaker 2: might have more people who are fixing the assembly line.

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Speaker 2: My, my son does that. My son is in maintenance

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Speaker 2: at the, at the Tesla plant in, in San Francisco.

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Speaker 2: So he's working very hard on everything from the robots

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Speaker 2: themselves to the assembly line production to make sure that

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Speaker 2: it still works. But they're not, he's not putting the

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Speaker 2: door on the car. The robot puts the door on

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Speaker 2: the car, you know, and, and

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Speaker 2: So there's jobs in this space, but they're either fixing

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Speaker 2: the robot, putting the door on the car, or they're

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Speaker 2: programming the robot, you know, or they're doing very simple

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Speaker 2: things like, you know, bringing the steel to the beginning

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Speaker 2: of the assembly line to make sure that it can

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Speaker 2: then be stamped out and put into the vehicle. So that,

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Speaker 2: I think the kind of jobs that are available in

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Speaker 2: manufacturing are shifting.

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Speaker 1: Absolutely. Deborah, I don't know if you've watched this documentary

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Speaker 1: called An American Factory. It was on Netflix 4 or

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Speaker 1: 5 years ago. It is about a Chinese glass company

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Speaker 1: opening up a plant in Dearborn, Michigan, and you see

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Speaker 1: there that the Chinese engineers and technicians and foremen bringing

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Speaker 1: their work practices to an assembly line manufacturing plant in

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Speaker 1: the US and it is backbreaking work, although it is

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Speaker 1: a very automated plant.

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Speaker 1: And just like the Tesla plant you're talking about, there

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Speaker 1: is a lot of robot arms doing things, but still,

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Speaker 1: when you make a windshield for a car or a

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Speaker 1: glass display for a phone, there is a very complex

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Speaker 1: man-machine interaction. It requires a lot of mental equity, but

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Speaker 1: also entails standing around machines hours at an end. So

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Speaker 1: the one thing that you see in the documentary is

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Speaker 1: that there are a lot of American workers who just

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Speaker 1: don't have the health.

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Speaker 1: To stand around in an assembly line using both their

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Speaker 1: mind and their body for 8 hours, 10 hours a day,

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Speaker 1: which is the minimum that the Chinese owners expect.

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Speaker 2: Yeah, I mean, my son regularly will clock 18,000 steps

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Speaker 2: in a shift, and his shifts are 12 hours. So,

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Speaker 2: you know, an 18,000 step day every day that you're

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Speaker 2: on the site is very challenging and you know, my

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Speaker 2: son who's young.

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Speaker 2: is already looking ahead and saying, you know, I don't, uh,

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Speaker 2: this clearly is not for me, uh, a, a lifetime

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Speaker 2: kind of a job because I, among other things, I'm

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Speaker 2: not going to be able to do 18,000 steps as

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Speaker 2: I get older. This is going to become more and

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Speaker 2: more physically challenging. And so, you know, again, the sort

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Speaker 2: of evolution of what it is that we're asking workers

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Speaker 2: to do is also challenging. It's challenging for them, and

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Speaker 2: they're gonna need, again, upskilling, reskilling, that's get you all

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Speaker 2: into a

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Speaker 2: Discussion about the changing nature of labor, but my point

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Speaker 2: is mostly just to say.

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Speaker 2: There are jobs in manufacturing, we should maintain some jobs

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Speaker 2: in manufacturing for many, many reasons, but that's never going to,

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Speaker 2: it's unlikely to be, I, I shouldn't never say never anymore.

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Speaker 2: It's unlikely to be the growth sectors of the future

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Speaker 2: for the United States or for other advanced industrialized economies

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Speaker 2: because of many things that are happening, not the least

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Speaker 2: of which is automation. Not, not so much by trade,

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Speaker 2: by the way. It's much more automation of the existing factories.

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Speaker 2: I'm

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Speaker 2: People keep saying the United States doesn't manufacture anything. That's

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Speaker 2: not true at all. The United States still manufactures an

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Speaker 2: awful lot, and the United States is, in fact, incredibly

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Speaker 2: successful as a manufacturing economy, but what it doesn't do

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Speaker 2: is generate a lot of jobs in those manufacturing sectors.

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Speaker 2: It does so through automation and through, um, you know,

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Speaker 2: other kinds of, of procedures that make it easier to

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Speaker 2: produce the thing that you want at the end of

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Speaker 2: the day with fewer people.

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Speaker 1: Right. Yeah, absolutely.

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Speaker 1: Um, Deborah, I'm not sure the question I'm about to

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Speaker 1: ask you is a hard question or an incredibly easy question,

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Speaker 1: but here it goes. Trump 2.0, early days, but what's

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Speaker 1: your sense of where we're headed?

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Speaker 2: I think it's going to be very bad. I, I, I,

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Speaker 2: I really, I am extremely alarmed about the direction of travel,

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Speaker 2: and it's not just because I, obviously I'm not a

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Speaker 2: fan of protectionism, and we're about to get a lot

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Speaker 2: of it. I think it's because we're getting a lot

399
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Speaker 2: of protectionism from the US, but it's going to be

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Speaker 2: met by

401
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Speaker 2: Protectionist behavior in other places and it's going to be

402
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Speaker 2: met by retaliatory behavior in other places, and the combination

403
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Speaker 2: of protectionism, additional protectionism, retaliation, new retaliation is going to

404
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Speaker 2: potentially spin us into a a whirling cycle of bad things,

405
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Speaker 2: and I just worry that uh that's where we're headed.

406
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Speaker 2: We are, we have forgotten why trade matters to us, one.

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Speaker 2: We have been happy to say we would rather have jobs,

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Speaker 2: this kind of job over that kind of job. We

409
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Speaker 2: seem perfectly fine to assume that you can do what

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Speaker 2: you want, whatever you need, and that others will go

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Speaker 2: along with that.

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Speaker 2: Which is I think delusional. Um, and then, you know,

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Speaker 2: the system as a whole is in much, much weaker

414
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Speaker 2: state than it was even 8 years ago. And so

415
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Speaker 2: trying to think about like who on the global stage

416
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Speaker 2: is going to be able to stand up and say

417
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Speaker 2: this is not in our interest, it's not in our

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Speaker 2: collective interest, we need to do something about this.

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Speaker 2: I am deeply worried. I'm deeply worried. I'm deeply worried,

420
00:22:23,670 --> 00:22:25,589
Speaker 2: of course, about the United States, but I'm also worried

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Speaker 2: about what this does for other countries, and I'm extraordinarily worried,

422
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Speaker 2: and I don't think anyone is talking about it, but

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Speaker 2: I'm very worried about the developing economies, many of which are,

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Speaker 2: especially when you get down to the poorest countries.

425
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Speaker 2: We are going to be so far back of the

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Speaker 2: queue of priorities that I, again, I'm, I'm deeply worried

427
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Speaker 2: about what happens in a lot of developing countries that

428
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Speaker 2: we're making pretty strong forward progress in terms of growth

429
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Speaker 2: and new job opportunities, new, new sources of income and

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Speaker 2: revenue for them, and now suddenly may not have that.

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Speaker 2: Cause if you close your market, you're not just closing

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Speaker 2: it to one country, you're closing it to all. And

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Speaker 2: so that, again, limits the potential for developing economies to

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Speaker 2: participate in economic growth.

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Speaker 1: I want to expand our conversation to the broader global

436
00:23:14,849 --> 00:23:19,609
Speaker 1: economy momentarily, but first, just staying in North America, Deborah, USMCA,

437
00:23:19,729 --> 00:23:22,089
Speaker 1: are they going to dig it out again and is

438
00:23:22,089 --> 00:23:25,250
Speaker 1: Mexico likely to suffer a big setback and Canada and

439
00:23:25,250 --> 00:23:28,079
Speaker 1: the US get tighter? I mean, what, what's your sense

440
00:23:28,079 --> 00:23:29,199
Speaker 1: of where all this is going?

441
00:23:30,310 --> 00:23:33,829
Speaker 2: I think USMCA is in serious trouble. I mean, they

442
00:23:33,829 --> 00:23:38,709
Speaker 2: were already due for a renegotiation in 2026. In a

443
00:23:38,709 --> 00:23:40,988
Speaker 2: piece of irony, they set that date because they thought

444
00:23:40,989 --> 00:23:44,069
Speaker 2: it would be after a potential second Trump administration and

445
00:23:44,069 --> 00:23:46,709
Speaker 2: so then it would be fine, and now suddenly here's

446
00:23:46,709 --> 00:23:49,560
Speaker 2: Trump in the 2026 review period.

447
00:23:50,130 --> 00:23:53,500
Speaker 2: Um, I don't think we're gonna wait until 2026 to

448
00:23:53,500 --> 00:23:56,419
Speaker 2: have this discussion, and in fact, Trump's, one of Trump's

449
00:23:56,420 --> 00:24:02,140
Speaker 2: many executive orders on his first day included a directive

450
00:24:02,140 --> 00:24:06,099
Speaker 2: to his agencies to give him recommendations about what should

451
00:24:06,099 --> 00:24:10,339
Speaker 2: be done with NAFTA or USMCA immediately. So that report

452
00:24:10,339 --> 00:24:13,420
Speaker 2: is due by April 1st, and that recommendation is likely

453
00:24:13,420 --> 00:24:18,060
Speaker 2: to include the potential for withdrawal, even. And for serious

454
00:24:18,060 --> 00:24:19,819
Speaker 2: adjustments in all kinds of things.

455
00:24:20,189 --> 00:24:24,290
Speaker 2: So I, I think USMCA is headed for Rocky period

456
00:24:24,290 --> 00:24:29,750
Speaker 2: even before we get to 2026. And Trump's early comments

457
00:24:29,750 --> 00:24:33,709
Speaker 2: and early actions around tariffs are not directed at, have

458
00:24:33,709 --> 00:24:38,069
Speaker 2: not been directed at China or, you know, others, it's

459
00:24:38,069 --> 00:24:39,829
Speaker 2: gone after Canada and Mexico.

460
00:24:40,599 --> 00:24:43,239
Speaker 2: This is, uh, you know, the Canadians especially are really

461
00:24:43,239 --> 00:24:45,359
Speaker 2: quite incensed about this because they say, wait a second,

462
00:24:45,400 --> 00:24:48,520
Speaker 2: we're being held accountable for immigration and fentanyl in particular.

463
00:24:48,599 --> 00:24:51,359
Speaker 2: That's what Trump keeps complaining about, neither one of which

464
00:24:51,359 --> 00:24:54,209
Speaker 2: seems to be a problem out of Canada. So even if,

465
00:24:54,280 --> 00:24:57,359
Speaker 2: let's imagine the Canadians said, OK, you, you win, Mr. President,

466
00:24:57,680 --> 00:25:00,469
Speaker 2: you're right, we should do something about immigration and fentanyl.

467
00:25:00,680 --> 00:25:02,630
Speaker 2: How do you fix a problem that doesn't exist?

468
00:25:03,280 --> 00:25:05,199
Speaker 2: Even if I wanted to show you that I was

469
00:25:05,199 --> 00:25:08,119
Speaker 2: doing a great job fixing this problem, because it's not

470
00:25:08,119 --> 00:25:11,199
Speaker 2: a real problem, there isn't any evidence I could give

471
00:25:11,199 --> 00:25:14,000
Speaker 2: you that would say this is the solution to this

472
00:25:14,000 --> 00:25:15,439
Speaker 2: problem that you've imagined.

473
00:25:16,500 --> 00:25:19,250
Speaker 2: So, you know, the Canadians are really up against it.

474
00:25:19,859 --> 00:25:23,420
Speaker 1: But on Canada, is there sufficient political will on Canada's

475
00:25:23,420 --> 00:25:27,199
Speaker 1: side to retaliate if the US goes ahead with this 25%

476
00:25:27,199 --> 00:25:29,329
Speaker 1: tariff that it's threatening? Well,

477
00:25:29,660 --> 00:25:32,150
Speaker 2: again, this is for me why Trump is so alarming.

478
00:25:32,199 --> 00:25:34,609
Speaker 2: It's not just that Trump is alarming, it's that the

479
00:25:34,619 --> 00:25:37,880
Speaker 2: the leaders who are around him are much, much more

480
00:25:38,099 --> 00:25:40,969
Speaker 2: weak than they were, and Canada is about to enter

481
00:25:41,300 --> 00:25:44,149
Speaker 2: a new political election, which we haven't seen in Canada

482
00:25:44,150 --> 00:25:45,130
Speaker 2: in quite some time.

483
00:25:45,489 --> 00:25:49,380
Speaker 2: That comes at like the worst possible time, right? The worst,

484
00:25:49,770 --> 00:25:52,250
Speaker 2: the worst possible time is uh to have your own

485
00:25:52,250 --> 00:25:56,369
Speaker 2: transition at the moment when your most important economic and

486
00:25:56,369 --> 00:26:00,079
Speaker 2: security partner is treating you as if you were the adversary,

487
00:26:00,209 --> 00:26:04,089
Speaker 2: you know, this is not a recipe for successful Canadian

488
00:26:04,089 --> 00:26:09,369
Speaker 2: policymaking or for bold policymaking from Canada. So, uh, you know,

489
00:26:09,500 --> 00:26:12,839
Speaker 2: we'll see. I suspect they're gonna try to muddle through somehow.

490
00:26:13,469 --> 00:26:16,550
Speaker 2: But that's gonna be very problematic. Uh, you know, Trump

491
00:26:17,069 --> 00:26:19,930
Speaker 2: is in a position to do a fair amount of

492
00:26:19,930 --> 00:26:24,909
Speaker 2: damage to the Canadian economy, and Canada is in less

493
00:26:24,910 --> 00:26:28,270
Speaker 2: strong position to do something to the United States economically,

494
00:26:28,489 --> 00:26:31,000
Speaker 2: but also politically to, you know, again, they would have

495
00:26:31,000 --> 00:26:34,410
Speaker 2: to really be committed to doing so and at an

496
00:26:34,410 --> 00:26:38,719
Speaker 2: election cycle, it's always easy for the opposition to take

497
00:26:38,719 --> 00:26:41,050
Speaker 2: a side that

498
00:26:41,550 --> 00:26:43,239
Speaker 2: In the long run is going to be a problem

499
00:26:43,239 --> 00:26:43,520
Speaker 2: for them.

500
00:26:44,699 --> 00:26:48,170
Speaker 1: Yeah, I'm beginning to see that sort of jockeying for

501
00:26:48,170 --> 00:26:51,050
Speaker 1: either curry favor with the US or trying to carve

502
00:26:51,050 --> 00:26:53,329
Speaker 1: out something independent, but yes, you're right, the political space

503
00:26:53,329 --> 00:26:57,479
Speaker 1: is extremely narrow in Canada. They're in a pretty weak spot.

504
00:26:57,650 --> 00:26:59,209
Speaker 1: And Deborah, let me just go back to the point

505
00:26:59,209 --> 00:27:01,130
Speaker 1: that you made. It's just not Canada. When we look

506
00:27:01,130 --> 00:27:04,319
Speaker 1: around the world, many countries are right now going through

507
00:27:04,319 --> 00:27:06,390
Speaker 1: a rather fragile moment in their

508
00:27:06,609 --> 00:27:10,290
Speaker 1: A political cycle, you know, Germany and France and Korea

509
00:27:10,290 --> 00:27:14,849
Speaker 1: and so on. So yeah, Trump is pretty lucky. He

510
00:27:14,849 --> 00:27:17,159
Speaker 1: is in a position to do a lot of things

511
00:27:17,160 --> 00:27:20,680
Speaker 1: where the other side doesn't have a very cohesive stance.

512
00:27:21,530 --> 00:27:23,930
Speaker 2: Yeah, I had, I had someone who I thought was,

513
00:27:24,010 --> 00:27:26,250
Speaker 2: was brilliant at this actually and said, you know, we're

514
00:27:26,250 --> 00:27:28,639
Speaker 2: in a bit of a prisoner's dilemma here, which is,

515
00:27:29,089 --> 00:27:33,079
Speaker 2: while the rest of us all have strong incentives to cooperate,

516
00:27:33,449 --> 00:27:37,489
Speaker 2: to maintain open markets, to maintain lots of different principles

517
00:27:37,489 --> 00:27:40,880
Speaker 2: that have been important, bedrock principles for some period of time,

518
00:27:41,609 --> 00:27:44,889
Speaker 2: each of us has an individual incentive to cave and

519
00:27:44,890 --> 00:27:49,130
Speaker 2: collapse and to say to Trump, you know, whatever you want, we'll,

520
00:27:49,209 --> 00:27:50,649
Speaker 2: we'll do it we'll do it, sir.

521
00:27:51,089 --> 00:27:54,129
Speaker 2: And so you have this sort of prisoner's dilemma pressure

522
00:27:54,699 --> 00:27:58,459
Speaker 2: that is likely to lead everyone to try, or nearly

523
00:27:58,459 --> 00:28:01,420
Speaker 2: everyone to, to ultimately cave, and the net result for

524
00:28:01,420 --> 00:28:03,329
Speaker 2: all of us is significantly worse off.

525
00:28:04,160 --> 00:28:07,550
Speaker 1: Yeah. Uh, I, I think that the, the risk of

526
00:28:07,550 --> 00:28:11,909
Speaker 1: that is extremely high. Now Deborah, it's not all about

527
00:28:11,910 --> 00:28:16,670
Speaker 1: the US and it's not just one-sided. The countries who

528
00:28:16,670 --> 00:28:19,079
Speaker 1: might be on the receiving end of the US are

529
00:28:19,079 --> 00:28:23,669
Speaker 1: pursuing regional agreements, bilateral agreements, just as an offset to

530
00:28:23,670 --> 00:28:26,510
Speaker 1: some extent of the US are turning away from.

531
00:28:26,750 --> 00:28:30,469
Speaker 1: The world that we have been familiar with characterized by globalization.

532
00:28:30,680 --> 00:28:33,000
Speaker 1: So let's talk about a couple of trade agreements. We

533
00:28:33,000 --> 00:28:35,959
Speaker 1: talked a little bit about USMCA. What about CPTPP? Is

534
00:28:35,959 --> 00:28:40,040
Speaker 1: there any strategy in there among those non-US entities to

535
00:28:40,040 --> 00:28:40,569
Speaker 1: do something?

536
00:28:41,939 --> 00:28:43,839
Speaker 2: Well, I would like to think so. I've been trying

537
00:28:43,839 --> 00:28:46,219
Speaker 2: to buck them up to be more bold for quite

538
00:28:46,219 --> 00:28:49,369
Speaker 2: a long period of time, and it's been an uphill slog,

539
00:28:49,420 --> 00:28:51,500
Speaker 2: but I, I'd like to think again, in every crisis

540
00:28:51,500 --> 00:28:54,140
Speaker 2: is an opportunity, and if there was ever an an

541
00:28:54,140 --> 00:28:58,020
Speaker 2: opportunity for CPTPP members to band together and to show

542
00:28:58,020 --> 00:29:04,699
Speaker 2: that open trade matters, that cooperation matters, that coordination on

543
00:29:04,699 --> 00:29:07,219
Speaker 2: regulations and so forth makes a difference, that you end

544
00:29:07,219 --> 00:29:09,650
Speaker 2: up with a stronger economic growth as a result of it.

545
00:29:09,859 --> 00:29:10,689
Speaker 2: This is the moment.

546
00:29:10,969 --> 00:29:14,140
Speaker 2: And so the CPTPP countries, uh, we have 12 of

547
00:29:14,140 --> 00:29:17,569
Speaker 2: them now, it's an active agreement, including the the UK

548
00:29:17,569 --> 00:29:19,930
Speaker 2: who just became a member, um.

549
00:29:20,719 --> 00:29:23,439
Speaker 2: Just became a member. I, I think it's, there is

550
00:29:23,439 --> 00:29:26,310
Speaker 2: a platform there for them to be bolder, but they

551
00:29:26,310 --> 00:29:31,949
Speaker 2: are hamstrung themselves by two things in particular. One is

552
00:29:32,479 --> 00:29:34,910
Speaker 2: on their own, again, they're relatively

553
00:29:36,530 --> 00:29:39,680
Speaker 2: They're not large economies on their own, so they have

554
00:29:39,680 --> 00:29:42,969
Speaker 2: to actually coordinate in order to have real heft, and

555
00:29:42,969 --> 00:29:46,520
Speaker 2: that's difficult. Coordination is always difficult, and they have to

556
00:29:46,520 --> 00:29:50,530
Speaker 2: coordinate the first and most urgent issue or an urgent

557
00:29:50,530 --> 00:29:54,250
Speaker 2: issue for them is the expansion process. In the queue

558
00:29:54,250 --> 00:29:57,969
Speaker 2: to expand is China and Taiwan.

559
00:29:58,599 --> 00:30:02,890
Speaker 2: And a bunch of other countries. That decision on what

560
00:30:02,890 --> 00:30:06,060
Speaker 2: to do about China and Taiwan is really tying the

561
00:30:06,060 --> 00:30:09,260
Speaker 2: group up in knots because they, they cannot make a

562
00:30:09,260 --> 00:30:13,060
Speaker 2: political decision to either move or not move and so

563
00:30:13,060 --> 00:30:15,250
Speaker 2: their solution to this is to do nothing at all,

564
00:30:15,380 --> 00:30:16,140
Speaker 2: and I think

565
00:30:16,469 --> 00:30:19,719
Speaker 2: The more you get buffeted by external events, the harder

566
00:30:19,719 --> 00:30:22,089
Speaker 2: it is to continue to do nothing at all. So,

567
00:30:22,479 --> 00:30:25,640
Speaker 2: that's the challenge for CPTPP is to sort of figure

568
00:30:25,640 --> 00:30:29,160
Speaker 2: out how are we gonna stay united, again, in this

569
00:30:29,160 --> 00:30:32,040
Speaker 2: sort of prisoner's dilemma, law of the jungle world that

570
00:30:32,040 --> 00:30:34,839
Speaker 2: we're entering, but I think there is a platform there

571
00:30:34,839 --> 00:30:38,959
Speaker 2: already made. It is providing economic benefits to companies already

572
00:30:38,959 --> 00:30:41,910
Speaker 2: and has been since 2018 when it went into force.

573
00:30:42,250 --> 00:30:46,349
Speaker 2: So there's, there is room for CPTPP countries to seize

574
00:30:46,349 --> 00:30:50,390
Speaker 2: the initiative and to be bold, but it is challenging.

575
00:30:50,550 --> 00:30:51,949
Speaker 2: I mean, it's definitely challenging.

576
00:30:53,150 --> 00:30:55,040
Speaker 1: And what about REP?

577
00:30:55,770 --> 00:30:59,989
Speaker 2: Yeah, the Regional Comprehensive Economic Partnership is 1615 countries now

578
00:30:59,989 --> 00:31:03,520
Speaker 2: in Asia, so all of ASEAN, China, Japan, Korea, Australia,

579
00:31:03,599 --> 00:31:07,670
Speaker 2: and New Zealand. That again, is a really interesting agreement

580
00:31:07,670 --> 00:31:11,319
Speaker 2: because in addition to the direct economic benefits that come

581
00:31:11,319 --> 00:31:14,880
Speaker 2: from using the agreement, you have a potential platform for

582
00:31:14,880 --> 00:31:17,319
Speaker 2: conversations about trade in Asia for Asia.

583
00:31:17,989 --> 00:31:21,589
Speaker 2: And like CPTPP, I would argue that at a time

584
00:31:21,589 --> 00:31:26,069
Speaker 2: of global shifts, it is the perfect time actually for

585
00:31:26,400 --> 00:31:30,380
Speaker 2: more intensive dialogue and communication around where do we want

586
00:31:30,380 --> 00:31:33,119
Speaker 2: the future to be, what kinds of actions are we

587
00:31:33,119 --> 00:31:35,079
Speaker 2: prepared to take, what kinds of actions are we not

588
00:31:35,079 --> 00:31:38,520
Speaker 2: prepared to take. Let's actually have those conversations with one another.

589
00:31:38,599 --> 00:31:40,359
Speaker 2: We can't do it in a lot of other settings.

590
00:31:40,640 --> 00:31:42,829
Speaker 2: REP is a natural platform for that.

591
00:31:43,339 --> 00:31:45,699
Speaker 2: Accept that, and it goes back to the sort of,

592
00:31:45,739 --> 00:31:49,229
Speaker 2: you know, weak leadership. Like, who's gonna lead that? The, the,

593
00:31:49,380 --> 00:31:52,339
Speaker 2: the Koreans certainly know know we wouldn't even know who

594
00:31:52,339 --> 00:31:57,500
Speaker 2: would show up. The Japanese really struggling internally to make

595
00:31:57,500 --> 00:32:01,650
Speaker 2: sure that their leader remains in place. Australia's facing an

596
00:32:01,650 --> 00:32:05,959
Speaker 2: election going on. New Zealand has shifted its policies. There

597
00:32:05,959 --> 00:32:09,170
Speaker 2: are new leaders in across ASEAN as well, who would be.

598
00:32:09,719 --> 00:32:12,829
Speaker 2: Jockeying for position, so you know, you think about like

599
00:32:13,000 --> 00:32:14,050
Speaker 2: it's a great idea.

600
00:32:14,910 --> 00:32:18,880
Speaker 2: But practically speaking, who's gonna lead the charge? Answer, oh,

601
00:32:19,109 --> 00:32:22,270
Speaker 2: probably not really anybody, which means you don't get that

602
00:32:22,270 --> 00:32:25,920
Speaker 2: kind of coordinated activity that you would like to see.

603
00:32:26,619 --> 00:32:28,209
Speaker 2: But that doesn't mean, let me just be clear, and

604
00:32:28,209 --> 00:32:30,670
Speaker 2: this is why I, I think Asia is the place

605
00:32:30,670 --> 00:32:33,510
Speaker 2: to be. That doesn't mean that leaders themselves don't understand

606
00:32:33,510 --> 00:32:35,670
Speaker 2: the importance of open trade. I mean, for a region

607
00:32:35,670 --> 00:32:41,670
Speaker 2: that has been built on economic openness, if that ends,

608
00:32:41,709 --> 00:32:44,030
Speaker 2: it's a problem for them. And so you, you do see,

609
00:32:44,150 --> 00:32:46,750
Speaker 2: which is very heartening in my view, you do see

610
00:32:46,750 --> 00:32:49,069
Speaker 2: lots of leaders in this region who are continuing to

611
00:32:49,069 --> 00:32:53,270
Speaker 2: pursue trade openness agreements in any kind of fashion.

612
00:32:53,660 --> 00:32:57,459
Speaker 2: Whether it's these big mega regionals like CPTPP or REP,

613
00:32:57,699 --> 00:33:00,930
Speaker 2: whether it's sector specific agreements, so we have some green

614
00:33:00,930 --> 00:33:05,180
Speaker 2: economy agreements between Singapore and Australia, New Zealand just just

615
00:33:05,180 --> 00:33:08,020
Speaker 2: put through a very interesting uh trade and climate.

616
00:33:08,479 --> 00:33:13,390
Speaker 2: Agreement with the unusual batch of countries. Whether it's digital

617
00:33:13,390 --> 00:33:15,939
Speaker 2: economy agreements, we have a bunch of those growing in place,

618
00:33:16,109 --> 00:33:19,930
Speaker 2: bilateral trade, a lot more trade with the EU, so

619
00:33:19,930 --> 00:33:24,280
Speaker 2: the EU is continuing to sign agreements with this region

620
00:33:24,280 --> 00:33:28,430
Speaker 2: or restart, like with the Malaysians. Um, the GCC, the

621
00:33:28,430 --> 00:33:33,099
Speaker 2: Gulf Cooperation Council, is also very keen to do trade agreements, uh,

622
00:33:33,109 --> 00:33:35,140
Speaker 2: with members of Asia.

623
00:33:35,439 --> 00:33:37,849
Speaker 2: And so I think there is this sort of interesting

624
00:33:37,849 --> 00:33:42,010
Speaker 2: dichotomy between the protectionist poll, which is likely to get

625
00:33:42,010 --> 00:33:46,930
Speaker 2: stronger as Trump gives license for leaders that like protectionism

626
00:33:46,930 --> 00:33:50,170
Speaker 2: to go down that path, with an integration poll that's

627
00:33:50,170 --> 00:33:53,290
Speaker 2: always been there and a cooperation set of communi, you know,

628
00:33:53,489 --> 00:33:55,410
Speaker 2: set of agreements that keeps you open.

629
00:33:57,270 --> 00:34:01,099
Speaker 1: Deborah, within Asia, when you talk about trade in Asia

630
00:34:01,099 --> 00:34:04,420
Speaker 1: for Asia, with respect to goods, we actually have pretty

631
00:34:04,420 --> 00:34:07,859
Speaker 1: low tariff barrier and inputs do move around pretty freely

632
00:34:07,859 --> 00:34:09,899
Speaker 1: in the region and hence we have a regional supply

633
00:34:09,899 --> 00:34:12,979
Speaker 1: chain which is very efficient. Talk to me a little

634
00:34:12,979 --> 00:34:17,580
Speaker 1: bit about trade and services. I think once somebody told

635
00:34:17,580 --> 00:34:19,780
Speaker 1: me that if you have a bunch of Google engineers

636
00:34:19,780 --> 00:34:22,500
Speaker 1: sitting in Malaysia for a project, they can't just get

637
00:34:22,500 --> 00:34:25,179
Speaker 1: into a plane and go to another project in Thailand.

638
00:34:25,539 --> 00:34:28,058
Speaker 1: There are issues related to those engineers having work permits

639
00:34:28,059 --> 00:34:30,739
Speaker 1: in uh Thailand, although they're all part of our SAP.

640
00:34:30,858 --> 00:34:33,779
Speaker 1: So have we made any progress that is sort of

641
00:34:33,779 --> 00:34:36,259
Speaker 1: tangible nature with respect to trade and services?

642
00:34:37,639 --> 00:34:41,259
Speaker 2: Well, trade in services is, as I said earlier, super

643
00:34:41,260 --> 00:34:46,360
Speaker 2: important because that's the direction of travel for most advanced, uh, economies.

644
00:34:46,659 --> 00:34:48,820
Speaker 2: So you need to think about trade and services, but

645
00:34:48,820 --> 00:34:53,179
Speaker 2: our rule making around trade and services is still weaker

646
00:34:53,179 --> 00:34:55,419
Speaker 2: than it should be. And there's a number of reasons

647
00:34:55,419 --> 00:34:57,659
Speaker 2: for that, but the most important, I think, is that

648
00:34:57,659 --> 00:34:59,969
Speaker 2: when we start talking about trade and services,

649
00:35:00,479 --> 00:35:04,560
Speaker 2: It's actually about your domestic level regulations that we're discussing, right?

650
00:35:04,679 --> 00:35:07,439
Speaker 2: So if we want to provide banking services in a

651
00:35:07,439 --> 00:35:10,719
Speaker 2: different market, it's about what are the banking rules that

652
00:35:10,719 --> 00:35:14,600
Speaker 2: I have in my market and whether or not you

653
00:35:14,600 --> 00:35:18,120
Speaker 2: qualify under my existing rules. And if you don't qualify,

654
00:35:18,199 --> 00:35:20,370
Speaker 2: then am I gonna change my rules? Am I gonna

655
00:35:20,560 --> 00:35:23,879
Speaker 2: make you follow my existing rules? And so it's all

656
00:35:23,879 --> 00:35:27,350
Speaker 2: about sort of behind the border or inside the domestic economy,

657
00:35:27,479 --> 00:35:28,520
Speaker 2: rules and regulations.

658
00:35:28,939 --> 00:35:33,219
Speaker 2: That can be much more sensitive, even if it's uh

659
00:35:33,219 --> 00:35:37,209
Speaker 2: an area where both parties agree or all parties agree

660
00:35:37,209 --> 00:35:41,100
Speaker 2: that something should be done, the practicalities of making changes

661
00:35:41,100 --> 00:35:44,179
Speaker 2: at the domestic level to accommodate more trade and services

662
00:35:44,179 --> 00:35:47,979
Speaker 2: is difficult. So that's, I think, why we don't have

663
00:35:47,979 --> 00:35:51,540
Speaker 2: the the same commitments to trade and services. It's also

664
00:35:51,540 --> 00:35:53,229
Speaker 2: harder to identify.

665
00:35:55,810 --> 00:35:58,500
Speaker 2: First of all, what services are traded at what levels.

666
00:35:58,580 --> 00:36:00,419
Speaker 2: We just don't have the statistics that we do on

667
00:36:00,419 --> 00:36:03,500
Speaker 2: trade and goods. It's much harder, much, much harder to

668
00:36:03,500 --> 00:36:07,419
Speaker 2: model or to guess at what is the benefit of

669
00:36:07,419 --> 00:36:10,699
Speaker 2: opening up this services sector. Whereas if I say I'm

670
00:36:10,699 --> 00:36:14,610
Speaker 2: gonna change a tariff level, that's relatively easy to model,

671
00:36:14,659 --> 00:36:16,739
Speaker 2: and we have lots and lots of tools to do that.

672
00:36:16,979 --> 00:36:20,139
Speaker 2: We don't have a tool that says, if I

673
00:36:20,909 --> 00:36:24,620
Speaker 2: Grant 3 licenses for insurance brokers. This is what happens.

674
00:36:25,110 --> 00:36:27,270
Speaker 2: If I grant 5 licenses, this is what happens. Like

675
00:36:27,270 --> 00:36:30,989
Speaker 2: we just don't have those models uh to easily show

676
00:36:30,989 --> 00:36:33,270
Speaker 2: us what the difference is. And so the net result

677
00:36:33,270 --> 00:36:37,469
Speaker 2: of that is services tend to be still much more protected.

678
00:36:38,129 --> 00:36:41,110
Speaker 2: Uh, and when you talk about different ways that you

679
00:36:41,110 --> 00:36:43,948
Speaker 2: deliver a service, the most protected by far in this

680
00:36:43,949 --> 00:36:46,750
Speaker 2: region is movement of people, which is why your Google

681
00:36:46,750 --> 00:36:50,509
Speaker 2: engineers cannot move, because they are, it's not, it's not

682
00:36:50,510 --> 00:36:53,840
Speaker 2: that Google as a company cannot deliver services in multiple

683
00:36:53,840 --> 00:36:55,489
Speaker 2: locations necessarily, it's that

684
00:36:55,889 --> 00:37:02,770
Speaker 2: Their people cannot move seamlessly between their own entities to

685
00:37:02,770 --> 00:37:06,080
Speaker 2: deliver those services, at least on a temporary basis. Forget

686
00:37:06,080 --> 00:37:08,770
Speaker 2: about long term immigration, just even on a temporary basis,

687
00:37:08,850 --> 00:37:11,489
Speaker 2: the project ends, I go to another project, that can

688
00:37:11,489 --> 00:37:12,929
Speaker 2: be complicated in this region.

689
00:37:14,530 --> 00:37:18,260
Speaker 1: Um, I want to take a small detour, Deborah. I

690
00:37:18,260 --> 00:37:21,550
Speaker 1: read this article which was in the Henrich Foundation website.

691
00:37:21,800 --> 00:37:23,679
Speaker 1: You wrote it, I think it came out just a

692
00:37:23,679 --> 00:37:26,689
Speaker 1: few days ago. The title is Who Is Us, us

693
00:37:26,689 --> 00:37:33,000
Speaker 1: in inverted comma. Why a Battle to define connected cars Matters.

694
00:37:33,120 --> 00:37:36,759
Speaker 1: I think your article sort of underlines or underscores the

695
00:37:36,760 --> 00:37:38,199
Speaker 1: complexity associated with.

696
00:37:38,870 --> 00:37:41,870
Speaker 1: Nationality-based production, which is what Trump is trying to go

697
00:37:41,870 --> 00:37:44,388
Speaker 1: after because the world has changed a lot. So walk

698
00:37:44,389 --> 00:37:45,360
Speaker 1: us through your article.

699
00:37:46,250 --> 00:37:48,320
Speaker 2: Yeah, thanks very much. I'm happy that you gave a

700
00:37:48,320 --> 00:37:50,560
Speaker 2: shout out to this piece. I've, I've been working on

701
00:37:50,560 --> 00:37:52,840
Speaker 2: it for quite a while, and it's been a challenge

702
00:37:52,840 --> 00:37:57,560
Speaker 2: to put into words my, my thinking on this because it's,

703
00:37:57,600 --> 00:38:00,879
Speaker 2: it's a sort of a big amorphous idea. But what

704
00:38:00,879 --> 00:38:03,459
Speaker 2: I'm trying to get at above all, is that

705
00:38:04,300 --> 00:38:07,879
Speaker 2: We have often treated firms as if they were countries,

706
00:38:07,939 --> 00:38:11,449
Speaker 2: so we say things like, China should do such and such,

707
00:38:11,570 --> 00:38:14,409
Speaker 2: the United States should do such and such, but actually

708
00:38:14,409 --> 00:38:15,540
Speaker 2: we're talking about

709
00:38:16,550 --> 00:38:20,790
Speaker 2: Hundreds, thousands, millions of different firms and consumers who are

710
00:38:20,790 --> 00:38:22,750
Speaker 2: doing whatever it is that we would like them to

711
00:38:22,750 --> 00:38:24,189
Speaker 2: do or not like them to do.

712
00:38:24,780 --> 00:38:28,669
Speaker 2: So, that's always been a challenge, but it's becoming even

713
00:38:28,669 --> 00:38:34,510
Speaker 2: more urgent in a world in which we create incentives

714
00:38:34,510 --> 00:38:39,500
Speaker 2: for firms that are considered to be Chinese or American,

715
00:38:39,750 --> 00:38:43,820
Speaker 2: and we say only Chinese firms are subject to these rules,

716
00:38:43,830 --> 00:38:47,909
Speaker 2: or only American firms are eligible for these benefits. So

717
00:38:47,909 --> 00:38:50,939
Speaker 2: the question comes up, well, who is us? Who is Chinese?

718
00:38:51,149 --> 00:38:51,989
Speaker 2: Who is American?

719
00:38:52,469 --> 00:38:56,279
Speaker 2: And our traditional ways of looking at this don't seem

720
00:38:56,280 --> 00:38:59,560
Speaker 2: to fit particularly well. So it's not about even where

721
00:38:59,560 --> 00:39:04,000
Speaker 2: you're headquartered or where you pay taxes, or where you

722
00:39:04,000 --> 00:39:08,070
Speaker 2: hold a board meeting, or where you manufacture the thing

723
00:39:08,070 --> 00:39:11,239
Speaker 2: that you're making, or where you deliver the services from

724
00:39:11,239 --> 00:39:14,699
Speaker 2: or to. You get this gets extremely complicated. And when

725
00:39:14,699 --> 00:39:18,830
Speaker 2: I saw this draft regulation, which is now a firm regulation,

726
00:39:18,870 --> 00:39:20,770
Speaker 2: unless the Trump administration undoes it,

727
00:39:21,229 --> 00:39:24,658
Speaker 2: On connected cars or on electric vehicles, it gets really,

728
00:39:24,699 --> 00:39:27,429
Speaker 2: you can really see the sort of sharp edges of

729
00:39:27,429 --> 00:39:30,590
Speaker 2: this policy dilemma, and let me just briefly describe what

730
00:39:30,590 --> 00:39:34,790
Speaker 2: that is, which is this piece of legislation says that

731
00:39:34,790 --> 00:39:38,270
Speaker 2: for connected cars, again, like, think of them as electric vehicles,

732
00:39:38,389 --> 00:39:39,229
Speaker 2: passenger cars.

733
00:39:40,010 --> 00:39:45,219
Speaker 2: You cannot have any hardware or software with a nexus

734
00:39:45,830 --> 00:39:46,279
Speaker 2: to

735
00:39:46,860 --> 00:39:50,350
Speaker 2: The People's Republic of China, or Russia, but we don't

736
00:39:50,350 --> 00:39:54,149
Speaker 2: care about Russia in this instance. So the, the, that

737
00:39:54,149 --> 00:39:56,350
Speaker 2: raises all sorts of red flags in your head, or

738
00:39:56,350 --> 00:39:59,629
Speaker 2: at least it should, which is like, how, what is

739
00:39:59,629 --> 00:40:02,709
Speaker 2: a nexus? How much nexusing do we need to do

740
00:40:02,709 --> 00:40:06,709
Speaker 2: in order for this firm that is supplying hardware or

741
00:40:06,709 --> 00:40:09,319
Speaker 2: software to a connected car company.

742
00:40:09,780 --> 00:40:12,739
Speaker 2: Um, how close do they need to be to the

743
00:40:12,739 --> 00:40:17,229
Speaker 2: PRC and what constitutes significant nexus, like, so there are

744
00:40:17,229 --> 00:40:22,540
Speaker 2: really big questions that are overarching, that are not being addressed,

745
00:40:22,830 --> 00:40:25,540
Speaker 2: and as we create more and more rules like this

746
00:40:25,540 --> 00:40:29,149
Speaker 2: connected car regulation, we have to think even harder about

747
00:40:29,149 --> 00:40:31,629
Speaker 2: what does it mean to be us, whatever us is.

748
00:40:31,830 --> 00:40:35,179
Speaker 2: Why do we assume that an American company, in quotations,

749
00:40:35,429 --> 00:40:38,479
Speaker 2: is less of a security, national security.

750
00:40:38,899 --> 00:40:44,419
Speaker 2: Economic threat to something, then, uh, I don't know, a

751
00:40:44,419 --> 00:40:49,379
Speaker 2: Singaporean company or a Chinese company or a company from Lesotho.

752
00:40:49,459 --> 00:40:51,500
Speaker 2: I mean, we, we, we really need to think about

753
00:40:51,500 --> 00:40:54,169
Speaker 2: what is it that is the source of the threat,

754
00:40:54,300 --> 00:40:57,138
Speaker 2: if there is one, and then how do we design

755
00:40:57,139 --> 00:41:01,100
Speaker 2: policies that capture just that and not everything under the sun.

756
00:41:02,629 --> 00:41:05,219
Speaker 1: There were, I was in India recently on the streets

757
00:41:05,219 --> 00:41:08,389
Speaker 1: of India. You see all these MG cars. Indians don't

758
00:41:08,389 --> 00:41:10,939
Speaker 1: tend to think MG as a Chinese car, although it's

759
00:41:10,939 --> 00:41:14,779
Speaker 1: owned by SAIC, and primarily the reason is that it's

760
00:41:14,780 --> 00:41:17,219
Speaker 1: a joint venture in India. So the Indians are doing

761
00:41:17,219 --> 00:41:19,060
Speaker 1: the same thing that the Chinese have done over the decades,

762
00:41:19,100 --> 00:41:22,139
Speaker 1: which is require a joint venture with a local partnership.

763
00:41:22,260 --> 00:41:27,459
Speaker 1: So JSW and SAIC, 50/50 owner of MG cars. But

764
00:41:27,459 --> 00:41:29,780
Speaker 1: the fact of the matter is the components are all Chinese.

765
00:41:30,360 --> 00:41:33,040
Speaker 1: But now you have a beneficial owner, which is Indian,

766
00:41:33,169 --> 00:41:35,299
Speaker 1: at least for half of it, and India seems to

767
00:41:35,300 --> 00:41:37,929
Speaker 1: be OK with it despite having various reasons of friction

768
00:41:37,929 --> 00:41:42,750
Speaker 1: with the Chinese. Similarly, you know, a company like Volvo,

769
00:41:42,969 --> 00:41:44,770
Speaker 1: we all think it's a Swedish car, but actually it's

770
00:41:44,770 --> 00:41:47,449
Speaker 1: owned by Geely in China. Now, is Volvo not going

771
00:41:47,449 --> 00:41:49,169
Speaker 1: to be able to run on the streets of the

772
00:41:49,169 --> 00:41:53,370
Speaker 1: US because the ultimate owner is that, but some components

773
00:41:53,370 --> 00:41:56,770
Speaker 1: are European, some are Chinese. It, it, it becomes a

774
00:41:56,770 --> 00:41:58,929
Speaker 1: rather nebulous situation.

775
00:42:00,350 --> 00:42:02,639
Speaker 2: And that was the, the, the real point of my

776
00:42:02,639 --> 00:42:05,600
Speaker 2: piece was to say we are not thinking hard enough

777
00:42:05,600 --> 00:42:10,060
Speaker 2: about who is us. And as we create these rules, the,

778
00:42:10,120 --> 00:42:14,840
Speaker 2: the consequences and the unintended consequences of rules like you

779
00:42:14,840 --> 00:42:18,080
Speaker 2: may not have a sufficient nexus to this or that country.

780
00:42:18,649 --> 00:42:22,839
Speaker 2: Uh, uh, becomes even more urgent to, to really think about, well,

781
00:42:22,929 --> 00:42:26,689
Speaker 2: why is it, why is it actually that having a

782
00:42:26,689 --> 00:42:29,810
Speaker 2: nexus to this particular country is the problem? Is it,

783
00:42:29,850 --> 00:42:32,770
Speaker 2: is it, why? I mean, in some cases it's a

784
00:42:32,770 --> 00:42:35,370
Speaker 2: clear line and you can say, ah, because here in

785
00:42:35,370 --> 00:42:39,229
Speaker 2: this case, we do have ownership, for example, potentially by

786
00:42:39,600 --> 00:42:44,000
Speaker 2: The Chinese government, which controls the board, which controls the factory,

787
00:42:44,060 --> 00:42:46,589
Speaker 2: which controls the production, which controls the, you know, you could,

788
00:42:46,719 --> 00:42:48,750
Speaker 2: you can draw a very straight line and that maybe

789
00:42:48,750 --> 00:42:50,669
Speaker 2: then we say, yeah, you know, that does look very

790
00:42:50,669 --> 00:42:53,120
Speaker 2: alarming and we should be careful about that. But that's

791
00:42:53,120 --> 00:42:55,879
Speaker 2: not always the case, and you just mentioned several examples

792
00:42:55,879 --> 00:43:00,479
Speaker 2: that I think are much more thought provoking, like, is

793
00:43:00,479 --> 00:43:03,159
Speaker 2: this really a risk to us? And if so, why?

794
00:43:03,320 --> 00:43:06,279
Speaker 2: What is it about this that makes it risky? And

795
00:43:06,280 --> 00:43:06,810
Speaker 2: if

796
00:43:07,120 --> 00:43:10,110
Speaker 2: Again, life is full of risks. Is it a sufficient

797
00:43:10,110 --> 00:43:15,679
Speaker 2: risk that we think we should undo existing legislation on

798
00:43:15,679 --> 00:43:18,550
Speaker 2: existing rules in order to change it to stop this

799
00:43:18,550 --> 00:43:19,830
Speaker 2: kind of behavior in the future?

800
00:43:21,350 --> 00:43:25,810
Speaker 1: Let's um reverse the perspective of this discussion from what

801
00:43:25,810 --> 00:43:29,209
Speaker 1: the US is seeing and what the US would do

802
00:43:29,209 --> 00:43:33,638
Speaker 1: to China. What is uh China's strategy going forward?

803
00:43:35,469 --> 00:43:39,300
Speaker 2: In the first Trump administration, it, it looks as though

804
00:43:39,300 --> 00:43:42,469
Speaker 2: the Chinese strategy was to buy for time.

805
00:43:43,350 --> 00:43:46,888
Speaker 2: To engage in negotiations in I, I, I think.

806
00:43:47,830 --> 00:43:50,239
Speaker 2: Uh, again, we're gonna have a big argument about this,

807
00:43:50,280 --> 00:43:53,009
Speaker 2: but I would say they engaged in those negotiations at

808
00:43:53,010 --> 00:43:54,929
Speaker 2: a fairly high level and they appear to have taken

809
00:43:54,929 --> 00:43:58,549
Speaker 2: it seriously. Did they follow through on all their commitments? No.

810
00:43:59,050 --> 00:44:00,729
Speaker 2: What they, did they intend to follow through on all

811
00:44:00,729 --> 00:44:04,000
Speaker 2: of their commitments? It's unclear. But at least the process

812
00:44:04,000 --> 00:44:09,649
Speaker 2: itself was a high level of engagement, extensive negotiations. They

813
00:44:09,649 --> 00:44:12,770
Speaker 2: produced a phase one document, they agreed to purchase things

814
00:44:12,770 --> 00:44:15,479
Speaker 2: far in excess of anything they'd ever purchased before.

815
00:44:15,989 --> 00:44:19,919
Speaker 2: You know, and so I think the Chinese strategy was,

816
00:44:20,030 --> 00:44:21,709
Speaker 2: let's see if that works and in fact.

817
00:44:22,639 --> 00:44:25,330
Speaker 2: Of course, they had higher tariffs applied against their products,

818
00:44:25,399 --> 00:44:28,239
Speaker 2: up to 25% on a very wide range of products.

819
00:44:28,399 --> 00:44:30,879
Speaker 2: Many of those tariffs remain today. In fact, all of

820
00:44:30,879 --> 00:44:33,560
Speaker 2: them remain today. None of them have been removed and

821
00:44:33,560 --> 00:44:35,879
Speaker 2: none of them have been reduced. In fact, they've had

822
00:44:35,879 --> 00:44:37,989
Speaker 2: more tariffs applied to Chinese products.

823
00:44:38,540 --> 00:44:42,459
Speaker 2: Um, so that is obviously a downside if you're China. So,

824
00:44:42,590 --> 00:44:44,590
Speaker 2: you go into Trump too, what are you gonna do?

825
00:44:44,750 --> 00:44:47,300
Speaker 2: That playbook, I don't think is gonna work as well. So,

826
00:44:47,429 --> 00:44:50,300
Speaker 2: it's not obvious that Trump wants a deal with China,

827
00:44:50,389 --> 00:44:51,989
Speaker 2: and if he does, what does it look like? It's

828
00:44:51,989 --> 00:44:52,840
Speaker 2: gonna be quite different.

829
00:44:53,590 --> 00:44:55,649
Speaker 2: So I think the Chinese at the moment are.

830
00:44:56,590 --> 00:44:58,750
Speaker 2: Go to do two things. You can already see it.

831
00:44:58,870 --> 00:45:02,669
Speaker 2: They started before Trump was inaugurated with a few smaller

832
00:45:02,669 --> 00:45:06,419
Speaker 2: actions to indicate, I think, their willingness to respond this time.

833
00:45:07,260 --> 00:45:10,379
Speaker 2: And those could be ramped up, they could be made

834
00:45:10,379 --> 00:45:13,590
Speaker 2: much more challenging for US companies and, and for the

835
00:45:13,590 --> 00:45:15,709
Speaker 2: United States in general, in a lot of different ways.

836
00:45:15,790 --> 00:45:18,509
Speaker 2: It doesn't have to be tariffs for tariffs. There are

837
00:45:18,510 --> 00:45:20,389
Speaker 2: lots of things that the Chinese can do if they

838
00:45:20,389 --> 00:45:25,360
Speaker 2: choose to retaliate against the US or US companies, um,

839
00:45:25,669 --> 00:45:27,709
Speaker 2: big and small. So I think there will be some

840
00:45:27,709 --> 00:45:30,939
Speaker 2: retaliation that takes place if necessary because the Chinese want to,

841
00:45:31,070 --> 00:45:32,569
Speaker 2: to indicate their own resolve.

842
00:45:33,100 --> 00:45:35,580
Speaker 2: But they will, I think, also see if there is

843
00:45:35,580 --> 00:45:37,370
Speaker 2: a deal to be had because if there's a deal

844
00:45:37,370 --> 00:45:40,739
Speaker 2: to be had and it's relatively simple, then I think

845
00:45:40,739 --> 00:45:44,580
Speaker 2: China would say fine. At the moment, Trump has been

846
00:45:44,580 --> 00:45:48,060
Speaker 2: threatening a 10% tariff against China. Trump has been threatening that.

847
00:45:48,899 --> 00:45:52,580
Speaker 2: That is relatively manageable, I think if you're China, because

848
00:45:52,580 --> 00:45:56,929
Speaker 2: they're ultimately, after the first Trump administration, the Chinese diversified

849
00:45:56,929 --> 00:45:59,620
Speaker 2: themselves and they are far less reliant on the US

850
00:45:59,620 --> 00:46:02,379
Speaker 2: market than they were. They have a lot, lot more

851
00:46:02,379 --> 00:46:04,739
Speaker 2: on the table than they did at the time. So

852
00:46:04,739 --> 00:46:07,620
Speaker 2: a 10% tariff, not great, but they could manage. If

853
00:46:07,620 --> 00:46:10,780
Speaker 2: it goes beyond that, and if it goes into other areas,

854
00:46:10,899 --> 00:46:12,859
Speaker 2: then they have new challenges and I would say that

855
00:46:12,860 --> 00:46:15,090
Speaker 2: for China, to me, the bigger worry at the moment

856
00:46:15,090 --> 00:46:16,610
Speaker 2: is not what Trump is gonna do.

857
00:46:17,010 --> 00:46:19,570
Speaker 2: But what Congress is going to do, because Congress is

858
00:46:19,570 --> 00:46:22,340
Speaker 2: united around the idea that that China is the biggest

859
00:46:22,340 --> 00:46:25,620
Speaker 2: adversary and so there is a lot of activity that

860
00:46:25,620 --> 00:46:27,658
Speaker 2: I expect to see out of Congress.

861
00:46:28,500 --> 00:46:33,510
Speaker 2: Um, and out of the, the agencies, White House agencies

862
00:46:33,510 --> 00:46:36,339
Speaker 2: that are not tariff related, that could be much more

863
00:46:36,340 --> 00:46:39,979
Speaker 2: problematic if you're China than whatever Trump decides to do

864
00:46:39,979 --> 00:46:41,189
Speaker 2: from the Oval Office.

865
00:46:42,270 --> 00:46:44,139
Speaker 1: Now, I really cannot believe I'm about to say this,

866
00:46:44,270 --> 00:46:47,389
Speaker 1: but I'll say it anyway, is Elon Musk the honest

867
00:46:47,389 --> 00:46:49,300
Speaker 1: broker between China and the United States?

868
00:46:50,310 --> 00:46:51,889
Speaker 2: I think that's less clear. I think if you look

869
00:46:51,889 --> 00:46:57,010
Speaker 2: at Musk, you know, in, in his huge volume of

870
00:46:57,010 --> 00:47:01,810
Speaker 2: trade activities and business activities, his, his dealings in China

871
00:47:01,810 --> 00:47:05,989
Speaker 2: with Tesla is actually pretty small, much more important for

872
00:47:05,989 --> 00:47:08,889
Speaker 2: him and much bigger for him in terms of the

873
00:47:08,889 --> 00:47:13,169
Speaker 2: financial benefits are his other businesses. And so, I am

874
00:47:13,169 --> 00:47:16,729
Speaker 2: unconvinced that that Musk is gonna moderate even his own

875
00:47:16,729 --> 00:47:17,879
Speaker 2: behavior based on

876
00:47:18,459 --> 00:47:21,780
Speaker 2: Tesla being in China, he is more likely, I, I

877
00:47:21,780 --> 00:47:26,060
Speaker 2: would argue to cut that out or off than to

878
00:47:26,060 --> 00:47:30,709
Speaker 2: cut off or out his other initiatives like infrastructure, you know, the,

879
00:47:30,780 --> 00:47:35,699
Speaker 2: the telecommunications infrastructure, you know, space exploration, etc. So those

880
00:47:35,699 --> 00:47:38,500
Speaker 2: are contracts that are bigger and more urgent for him

881
00:47:38,500 --> 00:47:40,570
Speaker 2: than Tesla in China.

882
00:47:41,070 --> 00:47:43,750
Speaker 2: And I, if push comes to shove, I don't think

883
00:47:43,750 --> 00:47:46,589
Speaker 2: he's gonna come down on the side of let's save Tesla,

884
00:47:46,669 --> 00:47:49,360
Speaker 2: let's intervene in US China relations.

885
00:47:50,030 --> 00:47:52,149
Speaker 2: But I could be wrong, because again, we're dealing with

886
00:47:52,149 --> 00:47:56,310
Speaker 2: very um volatile personalities and so I maybe it depends

887
00:47:56,310 --> 00:47:57,948
Speaker 2: on the day and the hour, I'm not sure.

888
00:47:58,790 --> 00:48:01,060
Speaker 1: Well, I think your point on Tesla is very well taken.

889
00:48:01,219 --> 00:48:03,580
Speaker 1: I mean, Tesla does sell a lot of cars in

890
00:48:03,580 --> 00:48:06,179
Speaker 1: China and the made in China Tesla cars are sold

891
00:48:06,179 --> 00:48:09,138
Speaker 1: all over Asia, including in Singapore, but I think we

892
00:48:09,139 --> 00:48:12,179
Speaker 1: are at an inflection point because the kinds of cars

893
00:48:12,179 --> 00:48:14,860
Speaker 1: that the Chinese brands are rolling out, they're not only

894
00:48:14,860 --> 00:48:17,860
Speaker 1: ultra competitive with Tesla, I think going forward they're going

895
00:48:17,860 --> 00:48:21,529
Speaker 1: to be out competing Tesla on price and quality and technology.

896
00:48:22,000 --> 00:48:24,319
Speaker 1: So if Trump is really, you know, Musk is really

897
00:48:24,320 --> 00:48:26,759
Speaker 1: forward looking, you're right, he may actually focus on the

898
00:48:26,760 --> 00:48:29,520
Speaker 1: more lucrative chunkier thing than being fixated on his footprint

899
00:48:29,520 --> 00:48:34,479
Speaker 1: in China. Yeah, mercurial personalities, maybe he's, you know, he

900
00:48:34,479 --> 00:48:36,600
Speaker 1: and Trump want to do a deal on TikTok and

901
00:48:36,600 --> 00:48:40,439
Speaker 1: God knows where that goes. But, but yeah, Deborah, I

902
00:48:40,439 --> 00:48:41,850
Speaker 1: think we need to have you back like every 6

903
00:48:41,850 --> 00:48:43,080
Speaker 1: months to do an update on the show.

904
00:48:43,899 --> 00:48:46,449
Speaker 2: Yeah, well, trade has never been more interesting. We had

905
00:48:46,449 --> 00:48:49,370
Speaker 2: hats made in the first Trump administration that said making

906
00:48:49,370 --> 00:48:52,060
Speaker 2: trade great again. And I, you know, I thought it was,

907
00:48:52,229 --> 00:48:54,489
Speaker 2: it was good, and I enjoyed the hat, and I

908
00:48:54,489 --> 00:48:56,570
Speaker 2: put the hat to the side. And now I'm like, oh,

909
00:48:56,649 --> 00:48:59,370
Speaker 2: we're gonna have to make more hats because we're gonna

910
00:48:59,370 --> 00:49:02,899
Speaker 2: make trade great again for the next however long as everyone,

911
00:49:03,290 --> 00:49:06,409
Speaker 2: including people who never cared about trade, suddenly are, you know,

912
00:49:06,489 --> 00:49:09,850
Speaker 2: having conversations about tariffs. You get in a taxi anywhere

913
00:49:09,850 --> 00:49:11,760
Speaker 2: in the world and all of a sudden tariffs comes up.

914
00:49:12,469 --> 00:49:15,428
Speaker 2: From a taxi driver like that never happened before Trump,

915
00:49:15,469 --> 00:49:17,310
Speaker 2: and it will happen again in Trump too.

916
00:49:18,050 --> 00:49:20,639
Speaker 1: I think if you have a t-shirt that says I

917
00:49:20,639 --> 00:49:24,439
Speaker 1: did Section 301 in my dissertation, even that will get

918
00:49:24,439 --> 00:49:24,919
Speaker 1: response from

919
00:49:24,919 --> 00:49:25,429
Speaker 1: people.

920
00:49:25,639 --> 00:49:27,830
Speaker 2: I have a lot of t-shirt ideas that are coming

921
00:49:27,830 --> 00:49:28,939
Speaker 2: out of the Trump

922
00:49:28,939 --> 00:49:29,469
Speaker 2: administration.

923
00:49:30,800 --> 00:49:34,040
Speaker 1: Deborah, thank you so much for your time and insights. Sure,

924
00:49:34,199 --> 00:49:34,959
Speaker 2: thank you very much for

925
00:49:34,959 --> 00:49:35,399
Speaker 2: having me.

926
00:49:35,600 --> 00:49:38,189
Speaker 1: It's great to have you and thanks to our listeners

927
00:49:38,189 --> 00:49:40,959
Speaker 1: and viewers as well. Kope was produced by Ken.

928
00:49:41,165 --> 00:49:44,354
Speaker 1: Bridge at Spy Studios. Via Lee and Daisy Sharma provided

929
00:49:44,354 --> 00:49:47,594
Speaker 1: additional assistance. It is for information only and does not

930
00:49:47,594 --> 00:49:51,915
Speaker 1: represent any trade recommendations. All 146 episodes of COIT Time

931
00:49:51,915 --> 00:49:55,304
Speaker 1: are available on YouTube and on all major podcast platforms,

932
00:49:55,594 --> 00:49:59,544
Speaker 1: including Apple, Google, and Spotify. As for our research publications, webinars,

933
00:49:59,554 --> 00:50:01,475
Speaker 1: and live streams, you can find them all by Googling

934
00:50:01,475 --> 00:50:04,114
Speaker 1: Devious Research Library. Have a great day.