Speaker 1: Welcome to Kobe Time, a podcast series on Markets and
Speaker 1: Economies from D BS Group Research. I'm Tambe, chief economist.
Speaker 1: Welcoming you to our 140th episode. Today's podcast is on
Speaker 1: the US elections during our annual outlook event held on
Speaker 1: November the eighth. I discussed the implications of Donald Trump
Speaker 1: and the Republican Party's emphatic victory in the US elections
Speaker 1: with Angela Mancini partner at Control Risks. Link to our
Speaker 1: publication is in the show notes, here is a recording.
Speaker 2: Hi, good morning,
Speaker 1: good morning. And it's been quite the week, Angela and
Speaker 2: you're busy, but something happened this week.
Speaker 1: Yes, something happened, something
Speaker 1: happened. So let's start by looking back. We had all
Speaker 1: these polls, we suggest that it was a neck and
Speaker 1: neck race. It wasn't at the end.
Speaker 1: Explain.
Speaker 2: Yeah. So there's a couple of takeaways that we have here.
Speaker 2: And first of all, I have to say so, so
Speaker 2: I work for control risk. We do political and regulatory
Speaker 2: risk consulting. We also have a security practice. That practice
Speaker 2: was quite worried about unrest around the election. We heard
Speaker 2: a lot of issues around, not just if it were
Speaker 2: to be a close contested race. But even in the
Speaker 2: mornings as the polls were opening, were we going to
Speaker 2: see voter intimidation, you know, who was going to come
Speaker 2: out to help watch the election, et cetera.
Speaker 2: Very few things happened. So that's a good thing. So
Speaker 2: my main takeaway is for the optimists in the group
Speaker 2: would definitely be the system worked. Very quiet. Election. In fact,
Speaker 2: some of the news coverage that I was doing was
Speaker 2: cut back because there just wasn't that much to say.
Speaker 2: That's a good thing, right? System worked.
Speaker 2: So the other thing I'd say, what didn't work is
Speaker 2: the polls, right? So there was an infinite amount of
Speaker 2: data in the, in the weeks and days leading up
Speaker 2: of slicing all kinds of voter groups, right? From obviously
Speaker 2: gender education class race also who moved from blue states
Speaker 2: to red states with COVID. What's happening with inflation, the
Speaker 2: impact of A I and the professional class, all of it.
Speaker 2: And at the end of the day, it didn't really
Speaker 2: matter what we saw as you've seen is the electorate shifted,
Speaker 2: it shifted right word. So there wasn't, you know, there's
Speaker 2: not a lot of pursing left to do. I think
Speaker 2: uh if, if you're aware of the name Alan Lichtman,
Speaker 2: he's a famous historian and he's called nine out of
Speaker 2: the 10. Now, now that the last 11 presidential races
Speaker 2: correctly and he's got these 13 keys that he looks at,
Speaker 2: they didn't work. He was quite confident be hear us
Speaker 2: his take away as I was mentioning was, you know,
Speaker 2: at some point, the math doesn't math anymore.
Speaker 2: And what I take from that is the electorate shifted.
Speaker 2: The zeitgeist has shifted. The main issues we saw voters
Speaker 2: coming out with exit polls was clearly the economy, inflation.
Speaker 2: And that's something people feel every day, even though the
Speaker 2: rate of inflation has uh slowed down, the cost of
Speaker 2: living stays high. So when you go to the grocery
Speaker 2: store every other day, when you go to the gas
Speaker 2: station every other day, you see that. So that's another issue.
Speaker 2: One thing to say, the other thing I'd point out
Speaker 2: that I haven't seen a lot of press on is
Speaker 2: job security increasingly in the professional class.
Speaker 2: I know people, lawyers, accountants, bankers, what have you maybe
Speaker 2: not bankers but you know, working in the marketing people
Speaker 2: that they're starting to have job loss, there's layoffs that
Speaker 2: are still going on in the corporate world and the
Speaker 2: impact of A I on that professional class, especially those
Speaker 2: in their forties and fifties in the States is, is concerning.
Speaker 2: So I think there's a, a couple of trends there.
Speaker 2: The last thing I'd say on the trends is a
Speaker 2: lot of people said they're worried about democracy, but I
Speaker 2: think the mainstream media
Speaker 2: uh got confused of what that meant because people can
Speaker 2: mean different things by that, right? So a a democrat
Speaker 2: voter would say rule of law, you know,
Speaker 2: policy basically, right? What it means for, you know, women
Speaker 2: and minorities and things. But Republican voters, I think, felt
Speaker 2: like freedom to be free in their view to um
Speaker 2: go back to the way things were to do. Not
Speaker 2: have the government telling me what to do and all
Speaker 2: the kind of culture war issues. So when some, I'd
Speaker 2: say a big message, I think the Democratic Party has
Speaker 2: a lot to think about. Uh I think the Republican
Speaker 2: Party has also got a lot to think about because
Speaker 2: that will shift as well.
Speaker 1: Did the um external issues relationship with Russia or the
Speaker 1: war in Gaza? Did those things have much of an
Speaker 1: impact?
Speaker 2: There was some impact. I'd say, first of all, China,
Speaker 2: I'd say almost none because in the US, as we
Speaker 2: know it, it's a, it's the number one bipartisan issue.
Speaker 2: In fact, probably the only bipartisan issue is the feeling
Speaker 2: that the US needs to restrict trade and, and um
Speaker 2: you know, increase competition with China. Uh Ukraine, I don't
Speaker 2: think had that big of an impact.
Speaker 2: There's a, there, it'd be interesting to see how policy
Speaker 2: gets shaped going forward because there are fractions within the
Speaker 2: Republican Party about how much one should support Ukraine. Some
Speaker 2: say we should, you know, stop passing the money, we
Speaker 2: need to spend that money at home. Others would say
Speaker 2: Russia since the Cold beginning of the Cold War has
Speaker 2: been uh you know, a geopolitical enemy. How could we
Speaker 2: ever just let them take it? You know, there would
Speaker 2: be an, um, uh, foreign policy disaster akin to withdrawing
Speaker 2: from Afghanistan. Right.
Speaker 2: So there's fractions there. But I don't think that really
Speaker 2: came into play. I do think the issue in Gaza
Speaker 2: was more significant. What was interesting though is if you
Speaker 2: look at the Michigan vote, so Michigan Dearborn, Michigan has
Speaker 2: a lot of, uh, I think 200,000 or so Arab
Speaker 2: American voters and they went Republican. So that's an interesting statistic.
Speaker 2: So I think there's at play the issue of,
Speaker 2: are you voting? Because you're, you're unhappy with how the
Speaker 2: Biden administration has prosecuted the war. Are you also voting
Speaker 2: in your pocket because you're, you know, working for a union.
Speaker 2: How do these things go? There's, there's multiple layers per
Speaker 2: voter is, I guess what I would take away from
Speaker 2: that
Speaker 1: right now, Angela, it was not just a presidential election.
Speaker 1: We had elections on the Senate on the House, a
Speaker 1: whole bunch of local legislative bodies. Was this a national election?
Speaker 1: And Trump just pulls everything red?
Speaker 2: I don't think so. I think clearly there was uh
Speaker 2: you know, when you go to the polls, you vote
Speaker 2: president and you usually vote down ballot. But I do
Speaker 2: think that there was a shift in the mentality of
Speaker 2: the electorate. But you did see some wonders if you
Speaker 2: look like if you look at Alyssa Slotkin who's actually a,
Speaker 2: a friend of mine. So Alyssa Slotkin is a democrat.
Speaker 2: She was a congresswoman in Michigan running for a senate seat.
Speaker 2: Highly contested. She won it by a hair, I think
Speaker 2: she won by like 5000 votes or something.
Speaker 2: So, what I take from that is indeed, there's been
Speaker 2: a shift in the electorate in what the values are
Speaker 2: potentially in the States and what people worried about, really
Speaker 2: worried about their jobs and inflation.
Speaker 2: But if you look at a um uh a candidate
Speaker 2: like Alyssa, she's out every day, all day doing the
Speaker 2: policy work. So the user experience of her is very
Speaker 2: different from maybe some politicians who, you know, quote data
Speaker 2: and the the famous uh criticism of the Democratic Party is,
Speaker 2: you know, I don't want, you know, you tell us
Speaker 2: about how the statistics are looking good in a certain place,
Speaker 2: but our lived experience is different, right?
Speaker 2: So I think in some, I'd say he did pull
Speaker 2: the voting right word, but it was going there anyway. And,
Speaker 2: you know, if you go anywhere outside the urban cities,
Speaker 2: you could kind of feel things were changing.
Speaker 1: Oh, no, I, I certainly felt that I was in
Speaker 1: the US two weeks ago and I wrote to my
Speaker 1: team uh while I was there, I think I asked
Speaker 1: about 50 people between San Francisco DC and New York
Speaker 1: and 46 told me that Trump was going to win.
Speaker 1: I really was hoping that they were wrong but of
Speaker 1: course they knew better.
Speaker 1: Um house. Is it going to go red as
Speaker 2: well? It's probably gonna go red. So I was just
Speaker 2: checking as right before um we started this morning. It's
Speaker 2: still not called, we still got something like um I
Speaker 2: think 28 seats to 27 seats, they still have to call,
Speaker 2: but the Democrats would have to win 21 of those.
Speaker 2: So from a trend perspective, that's not gonna happen. I mean,
Speaker 2: the statistic that I took away from the election morning,
Speaker 2: I was heading in to do an interview uh early
Speaker 2: in the morning and I heard on the radio that Georgia,
Speaker 2: which is a big swing state,
Speaker 2: 30% of that electorate is independent. And when Biden and
Speaker 2: Trump ran last time, it was plus eight for Biden
Speaker 2: this time, it was trending plus 11 for Trump. So
Speaker 2: to me, I thought, ok, well, that's it. So again,
Speaker 2: I think there's underlying trends there to look at, but
Speaker 2: with the House for sure, it'll go Republican. So we'll
Speaker 2: have a clean sweep on the Republican side.
Speaker 1: So economic issues mattered a lot. Democracy in danger was
Speaker 1: a theme. But the fact that Trump is a convicted felon,
Speaker 1: the fact that, you know, he was impeached or all
Speaker 1: the other, you know, not so pleasant things that he
Speaker 1: says had not much of an impact. I mean, he
Speaker 1: is getting the popular vote as
Speaker 1: well.
Speaker 2: He is getting the popular vote. So a couple of
Speaker 2: things I'd say to unpick that because that's definitely, I
Speaker 2: think the big takeaway, I'd say a couple of things.
Speaker 2: Number one, interestingly, voter turnout is down.
Speaker 2: So it was 68% last time. It's a shameful. It's
Speaker 2: not higher. 64% this time. People are saying, oh, Kamala got,
Speaker 2: you know, 11 million less votes than Biden did, but
Speaker 2: she got 83 or four more than Hillary, right? So
Speaker 2: there's a lot of kind of data within there. But
Speaker 2: I think,
Speaker 2: you know, and some might say we're seeing the electorate shift.
Speaker 2: I don't know that it's values so much that are
Speaker 2: shifting again as people's just pain in the pocket. I mean,
Speaker 2: it's interesting listening to your optimistic presentation about the States
Speaker 2: because it'll, I'm now watching. Uh I hate to be
Speaker 2: the person that says that elections over. Let's turn to
Speaker 2: the next one the same day. But I do think
Speaker 2: it's interesting to watch what will happen with the midterms
Speaker 2: because if you look at the from the policy making
Speaker 2: perspective now
Speaker 2: republicans have everything. So it's like, ok, you wanted it,
Speaker 2: you have it, let's see what you do. And I
Speaker 2: don't think we have a Trump now that's coming into power, furious.
Speaker 2: We don't have a Trump that's coming into power wanting
Speaker 2: to break a lot of things because he just barely
Speaker 2: got there and he had to, you know, rally the
Speaker 2: troops to get there. He is kind of an open field.
Speaker 2: He's quite jubilant is the words that we're hearing described.
Speaker 2: So what, what is that policy making look like
Speaker 2: in that regard? And then what's the impact of that?
Speaker 2: What are the outcomes as we go into the next
Speaker 2: couple of years?
Speaker 1: Are
Speaker 1: you trying to suggest that we will see like no
Speaker 1: daily tweet storm and it won't be that. No,
Speaker 2: I'm I'm trying to be optimistic. I think it's gonna
Speaker 2: be very, very, very chaotic also because you remember his
Speaker 2: advisor last time were more establishment people and, and now
Speaker 2: that's not going to be the case. We don't know
Speaker 2: really exactly who's gonna come in.
Speaker 2: I think it's gonna be volatile. But what I take
Speaker 2: from it, which is interesting is imagine if he had
Speaker 2: run a bit more of a conventional campaign which he
Speaker 2: was doing until the end towards the end when he
Speaker 2: started making comments about Kamala and he had the comic
Speaker 2: on stage that said the racist things about Puerto Rico,
Speaker 2: which we heard him say, maybe he did that because
Speaker 2: he thought things were too kind of stale. But if
Speaker 2: he had run a more conventional campaign and if he
Speaker 2: dialed down that rhetoric, imagine the gap that it would
Speaker 2: have been right? And Kamala had record breaking money, record breaking,
Speaker 2: get out the vote efforts, very, very professional and organized
Speaker 2: best we've ever seen. And we still had this shift.
Speaker 2: So imagine if she hadn't been quite so organized and
Speaker 2: he had been a little calmer. It tells me
Speaker 2: the electorate has shifted but then it starts looking at,
Speaker 2: to me it becomes shifting to what, in terms of
Speaker 2: policy and, and what's actually fixable and what's not. But
Speaker 2: it will definitely, I think, be more volatile from a
Speaker 2: domestic side and a foreign policy
Speaker 2: side.
Speaker 1: Where do the Democrats go from here?
Speaker 2: I think what I'd like to see is uh a
Speaker 2: real step back and think about,
Speaker 2: forget about the party politics and whatnot. This is, of course, ideal,
Speaker 2: I don't know that they're gonna do this. But ideally
Speaker 2: I think what they should do is take a step
Speaker 2: back and say, where is the US voter now? Get
Speaker 2: back in touch with them and you can have a
Speaker 2: conversation about policy, you know, do things that are closer to,
Speaker 2: you know, supporting the unions and the working class, which
Speaker 2: actually to be fair, I think Biden did. But that
Speaker 2: feels like things on paper. I think what they need
Speaker 2: to do is have the connection
Speaker 2: with a broader voter base and understand some of the
Speaker 2: cultural issues a bit better and really tap into that
Speaker 2: a bit better. The message. Absolutely. As we saw, fell flat,
Speaker 2: what I am seeing unfortunately, at least in these first
Speaker 2: day or so is a lot of, uh you know,
Speaker 2: you did it. No, you did it. No, you did. It.
Speaker 2: We're blaming Biden. We're blaming, blaming his wife. We're blaming,
Speaker 2: um K Kamala. We're blaming her advisers. When actually it's,
Speaker 2: to me it's too big of a gap to be
Speaker 2: a flaw in the actual campaign prosecution or the,
Speaker 2: even the candidate. I just think the values have shifted
Speaker 2: the issues that matter to voters are different than they
Speaker 2: thought they were.
Speaker 1: Immigration tax cut tariffs all on the cards,
Speaker 2: all on the cards. I think we're getting a lot.
Speaker 2: So we work for 80% of the Fortune 500. We,
Speaker 2: as you can imagine, be getting heaps of calls around.
Speaker 2: Oh my gosh. What do we do? In fact, we've
Speaker 2: been scenario planning for months on, for both sides. I
Speaker 2: think the thing to, to look at is so number one,
Speaker 2: I think what he'll do is what he did last time,
Speaker 2: which is, uh, you know, he has a day one
Speaker 2: package that'll probably include an executive order that says freeze
Speaker 2: everything until we review it. That's fair.
Speaker 2: We may see some things around immigration on day one. Like,
Speaker 2: you know, we saw some quite striking things before, but
Speaker 2: I do still think it's early days. There's a lot
Speaker 2: of jockeys. So first of all, they had, they don't
Speaker 2: know even with the Senate how big that majority is
Speaker 2: going to be. There's still some Senate races to call.
Speaker 2: So the question, you know, once we have all the
Speaker 2: numbers around the races, we'll understand how big is your
Speaker 2: Senate majority? How big is your house majority? They're starting
Speaker 2: to think about who's gonna be the senate majority leader
Speaker 2: Mitch mcconnell's retiring. I was reading this morning there was
Speaker 2: a kind of a jockeying between the three people that
Speaker 2: should have that and are close to Trump and want that,
Speaker 2: you know, who is that and who starts getting on
Speaker 2: those really powerful house committees like the Appropriations Committee, the
Speaker 2: Ways and Means Committee. So it really matters. I think,
Speaker 2: not just who he's putting in his cabinet and as advisers,
Speaker 2: but how those the workings of government shape up and
Speaker 2: I've done a bit of dusting off of education around. How,
Speaker 2: how does the law actually work. So if you look
Speaker 2: at something like NATO, there's been legislation passed recently last
Speaker 2: December to more um formalize the US, uh you know,
Speaker 2: uh any interaction with or, or, or, you know, belonging
Speaker 2: to NATO. So you can't just walk in and do
Speaker 2: an executive order and rip it up, so to speak.
Speaker 2: It's different for Ukraine, you know, there's funding that we
Speaker 2: give but the Americans give but that can be stopped.
Speaker 2: So I think
Speaker 2: it's gonna be really interesting to see what the workings
Speaker 2: of government actually allow in a situation where you have
Speaker 2: a completely dominant party and what they don't because it's
Speaker 2: gonna be different, you know, they kind of, they put
Speaker 2: some things in place to stop uh to, to reduce
Speaker 2: the ability for one person to come in and change
Speaker 2: everything overnight. Risking takes some time to figure
Speaker 2: out.
Speaker 1: But speaking of one person, Elon Musk is pretty popular
Speaker 1: and uh p powerful, like popular. I don't know, I mean, powerful. Uh,
Speaker 1: he went all in with Trump and it worked out
Speaker 1: for him.
Speaker 1: Um, in the past, Angela, the Republican party has been
Speaker 1: the party of big corporations. We see a bit of
Speaker 1: a bifurcation Now we see some tech bros, Elon Musk,
Speaker 1: the Winklevoss brothers, Peter Theo, they have been big funders
Speaker 1: of Trump, but the rest of the corporate world still
Speaker 1: seems to be either mainstream Republican or Democrat.
Speaker 1: So, is the Republican party a party of big corporations
Speaker 1: no more?
Speaker 2: Well, it's interesting that you say that I think that
Speaker 2: was also my impression, but in recent days and weeks
Speaker 2: as we've been going out and talking to clients, there
Speaker 2: are quite a lot of big corporations that are more
Speaker 2: supportive of that America first agenda than you might see, especially,
Speaker 2: you know, kind of looking at it from over here.
Speaker 2: So I think it's a bit of a mix. Um
Speaker 2: what I, what I'm watching for and, you know, you're
Speaker 2: the economist and, and a lot of really smart people
Speaker 2: watching finance in this room. I'm really watching for, ok,
Speaker 2: he's got the stage now. He's got everything he has
Speaker 2: nothing to prove in terms of the election. He won
Speaker 2: it by a large margin. He's a lame duck president.
Speaker 2: No more elections to be had. So he can kind
Speaker 2: of like rest for a second and say, what do
Speaker 2: I actually want to accomplish? He does have an agenda.
Speaker 2: It's called Agenda 47. It's 14 pages. It's not long.
Speaker 2: Um So there's not a lot of policy detail there,
Speaker 2: but what's he gonna actually do? And at some point,
Speaker 2: does he take the ear more of
Speaker 2: the more um bombastic advisor he's had before on trade
Speaker 2: and economic policy or does he start talking to more
Speaker 2: traditional economists that are, you know, we've seen the statistics
Speaker 2: that say if everything he said he wanted to do,
Speaker 2: the high tariffs went into place very damaging for the
Speaker 2: US economy, very damaging for the global economy. Is he
Speaker 2: going to actually do it? I mean, let's see if
Speaker 2: he gets some advisers around him that can um
Speaker 2: maybe help him moderate some of that policy. So in some,
Speaker 2: I'd say
Speaker 2: the Republican Party
Speaker 2: still is uh supporting, you know, representing big business, but
Speaker 2: even something like the business leaders round table has come
Speaker 2: out and said they, you know, have had big concerns.
Speaker 2: So in some, I'd say it's a mix but it's
Speaker 2: not just he's got the tech and the crypto people
Speaker 2: and none of big business it's really overlapped.
Speaker 1: Could he under a scenario that you can think of?
Speaker 1: And maybe you can assign a probability to that step
Speaker 1: down in two years and give the presidency to JD Vance.
Speaker 2: So that's an interesting uh an interesting proposition, I think
Speaker 2: uh
Speaker 2: overall, I'd say that's unlikely. But remember he's not a
Speaker 2: young man,
Speaker 1: he'll be in two
Speaker 2: years time. And actually, what's interesting is one of the
Speaker 2: top risks that we're trending as control risks in the
Speaker 2: years ahead is if you look at first of all,
Speaker 2: as we know, this was the year of the election globally.
Speaker 2: If you take a step back a second year of
Speaker 2: the election globally, almost all of those from Japan and
Speaker 2: India to France and the UK change elections. So what
Speaker 2: we're seeing in the States is actually not that different. Also,
Speaker 2: if you look at the countries with the 10 biggest populations,
Speaker 2: almost all of them have leaders that are well north
Speaker 2: of 75 Russia, you can name them all off. So
Speaker 2: does he step down in two years? What's his health like?
Speaker 2: What's his mental ability? Like, I mean, one thing is
Speaker 2: stepping down another might be just a step kind of
Speaker 2: a little bit back like Reagan did, I don't know
Speaker 2: that he'd be keen to relinquish it, but also I
Speaker 2: don't think he's that keen to govern. He was keen
Speaker 2: to prove a point and get in. He feels passionate
Speaker 2: about tariffs, he feels passionate about China and he feels,
Speaker 2: I think passionate about,
Speaker 2: you know, domestic policy that might um push back a
Speaker 2: vengeance as they say right on some of the people
Speaker 2: that he thought blocked him before. I don't think he,
Speaker 2: you know, this isn't, uh, a Joe Biden or Bill Clinton.
Speaker 2: That's like I just want to get into that policy
Speaker 2: and really tweak what, you know, what we're actually doing
Speaker 2: from a legislative point of view. So he may,
Speaker 2: it was a scenario if he gets tired and, or
Speaker 2: bored or, and, or, and, or unhealthy, but I think
Speaker 2: it would take a lot for him to formally step down,
Speaker 2: but I could see him stepping back and then others
Speaker 2: would jump in. But I would say on JD Vance
Speaker 2: doesn't have a lot of friends, right? I mean, there
Speaker 2: was a phenomenal podcast. David Remnick from the New Yorker
Speaker 2: did with Newt Gingrich who if you remember was the
Speaker 2: Republican from way back, who first orchestrated, you know, the
Speaker 2: tea party and this what became the mega movement and
Speaker 2: it is scathing things to say about JDF
Speaker 2: and all the how young he is and how much
Speaker 2: his policy positions have shifted just with the wind. So
Speaker 2: I think there's a long list of people right around
Speaker 2: JD Vance said, if there's an opening, he wouldn't step down.
Speaker 2: But in terms of having power, I don't know that
Speaker 2: it's going to go straight to him.
Speaker 1: All right, let's uh talk about China.
Speaker 1: Uh It's not the case that Donald Trump brought in
Speaker 1: the entire China anti China spectrum. The US had been
Speaker 1: turning sort of protectionist even during the Obama years, but
Speaker 1: he turbo charge it with the tariff, but it's not like,
Speaker 1: you know, Biden took anything back. In fact, in the
Speaker 1: last four years, it's gotten tighter on China on tech
Speaker 1: access and no tariffs have come down. What can we
Speaker 1: expect and what are you telling your clients on the
Speaker 1: China policy? Yeah.
Speaker 2: So I think
Speaker 2: we shouldn't be too worried out of the gate. I
Speaker 2: can see that there's a, there's a a thinking of
Speaker 2: being very, very worried. He said, you know, he said
Speaker 2: really aggressive things, 60% tariffs and whatnot. But I again,
Speaker 2: I think the way he's coming in matters, he's not
Speaker 2: coming in with something to prove that may impact the
Speaker 2: who he's bringing in, which then impacts policy. I still
Speaker 2: think we're going to see some of the same old faces,
Speaker 2: Robert Lighthizer, maybe Peter Navarro as an adviser in some
Speaker 2: way and definitely
Speaker 2: what we're advising clients is the US China tensions will
Speaker 2: continue and probably escalate in the trade area. But there's,
Speaker 2: he's also if you want to be optimistic, I mean,
Speaker 2: he is a deal maker and so is Xi Jinping.
Speaker 2: So there is a scenario where they kind of um
Speaker 2: look at what is on offer and figure out some
Speaker 2: ways to,
Speaker 2: to focus very specifically on things. I mean, the Biden
Speaker 2: administration with Jake Sullivan had the um approach with China
Speaker 2: of as you know, narrow yard, high fence Trump is
Speaker 2: more blunt policy tools, you know, 60% tariffs and everything.
Speaker 2: I don't know what he was going to actually do though.
Speaker 2: In the end, I think we have to see, I
Speaker 2: will say on the China side, they have not retaliated
Speaker 2: in kind, they've done
Speaker 2: bits but it has never e equal to nor exceeded
Speaker 2: what the US has done in terms of um trade restrictions.
Speaker 2: So I, so I would say two things. Number one,
Speaker 2: China has put together the architecture to retaliate quite well
Speaker 2: in these past years, unreliable entities list anti foreign sanctions law.
Speaker 2: So they have it there, they haven't really used it.
Speaker 2: Um But then I would say let's look at third
Speaker 2: countries because if you've got, you know, if the US
Speaker 2: really were to want to tighten
Speaker 2: trade restrictions with China, you know, you're asking Japan and
Speaker 2: the Netherlands and others to stop exporting their semiconductor manufacturing equipment.
Speaker 2: But even Biden can get that to happen at some point.
Speaker 2: Allies say there's only so far we can help you.
Speaker 2: What does that look like? If you have a more
Speaker 2: bombastic unilateralist President
Speaker 2: Biden will probably, I don't know that Trump's gonna have
Speaker 2: as strong relationships with the countries. He's trying to keep
Speaker 2: on side as, as Biden would do.
Speaker 1: Um Korea, Japan, Taiwan, these countries are also looking at
Speaker 1: this election with some degree of
Speaker 1: nervousness.
Speaker 2: Yeah, I think there's a couple of things there. Obviously,
Speaker 2: number one, there's trade, there's and, and there's um so
Speaker 2: there's trade and there's security, the trade, economics and security
Speaker 2: from the trade and economics perspective. We hear a lot
Speaker 2: of course about actual trade flows and whatnot. But look
Speaker 2: also at the Inflation Reduction Act and the Chips Act
Speaker 2: in the States that was giving, you know, that legislation
Speaker 2: that Biden put in is giving a lot of
Speaker 2: credits to companies in Korea, Taiwan and other Japan to
Speaker 2: put investments of, you know, tech, tech manufacturing equipment in,
Speaker 2: especially in, you know, kind of southern states. So what
Speaker 2: happens to that? Ira? That's gonna be interesting. Just, you know,
Speaker 2: Trump has said, I'm going to rip all that, those
Speaker 2: things up, which would make white elephants out of these
Speaker 2: investments in the States. But what if they are red states?
Speaker 2: Maybe that's not such a good idea, they're bringing jobs
Speaker 2: to the States. So there's, there's this very interesting trade
Speaker 2: investment component.
Speaker 2: Uh I did see last night on TV that Japan
Speaker 2: thinks by the end of the year now it's going
Speaker 2: to be able to have to take the acquisition of
Speaker 2: us steel, which was a big question, right? Because how again,
Speaker 2: how can the US ask Japan to help them so
Speaker 2: much on trade when they're pushing them and saying, but
Speaker 2: you can't invest in us steel? That's been a tricky
Speaker 2: tricky one. But then obviously, I'd say this
Speaker 2: security component, right? So the uh the US of course,
Speaker 2: has been providing security support to Korea and Japan under
Speaker 2: Trump one point. Oh, he was asking for or pressing
Speaker 2: for more uh payment to be made by Japan and Korea,
Speaker 2: you know, increase your own defense spending. Take on this
Speaker 2: burden yourself. Where does that go out of the gate?
Speaker 2: One could say that's gonna be back on the table.
Speaker 2: But again, maybe it's not because it's a different world
Speaker 2: and there's, maybe there's, um,
Speaker 2: I guess in some I'd say I'm watching to see
Speaker 2: if his approach. Now, if it's a learned approach that
Speaker 2: you can't ask for a trade, something on, on this
Speaker 2: side and then push someone hard on security for this side.
Speaker 2: It's got, it's a complex, it's a, it's a multi,
Speaker 2: you know, phrase sentence, so to speak. And, and what
Speaker 2: did his advisers say on that? What does he do?
Speaker 1: OK. Finally, Singapore, we do such a good job of
Speaker 1: balancing East and the West under Trump.
Speaker 1: I point out,
Speaker 2: I think we keep balancing. I mean, first of all,
Speaker 2: I'd say Singapore has done a phenomenal job. It's not easy.
Speaker 2: I think it's going to continue to not be easy.
Speaker 2: I think there's looking at the signals through the noise.
Speaker 2: I think there'll be a lot of volatility, you know,
Speaker 2: tweets coming through or X coming through. But when you
Speaker 2: look at the actual policy, I don't think the US
Speaker 2: is looking to change anything radically as it relates to
Speaker 2: Singapore or even Southeast Asia. Some of the tensions that
Speaker 2: we see
Speaker 2: potentially spiking are things around Vietnam or Malaysia that have
Speaker 2: big trade deficits with the US. And what does that
Speaker 2: mean also for China to invest in a third country
Speaker 2: to then export to the States? Is that fair? What
Speaker 2: does the US think about that? That's I think the
Speaker 2: interest with Southeast Asia, I think Singapore continues to balance. Well,
Speaker 2: um there is a scenario where us China tensions
Speaker 2: don't necessarily get all that much worse. And uh Singapore,
Speaker 2: you know, keep on keeping on, I would say and
Speaker 2: uh it has a, it has a great obviously team
Speaker 2: in place to do that,
Speaker 1: Angela. Thank you very much for your insights. Thank you.
Speaker 1: Thanks for listening. Kobe Time was produced by Ken Delbridge
Speaker 1: from Spy studios, Violet Lee and Daisy. She were provided
Speaker 1: additional assistance. This podcast is for information only and does
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