Valuetainment - April 10, 2025


＂Who Needs Who More？＂ - Richard Werner REVEALS The U.S. vs China Power Struggle In Global Trade War


Episode Stats


Length

14 minutes

Words per minute

158.28279

Word count

2,340

Sentence count

215

Harmful content

Misogyny

4

sentences flagged

Hate speech

10

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Trade tensions between the United States and China continue to escalate. President Trump announced a new round of tariffs on $50 billion worth of Chinese goods. China responded in kind, with a tit-for-tat response of its own. This is the latest in a series of tit for tat tariffs between the two countries.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 This morning, we get word that China announces 84% tariff on U.S. goods in showdown with Trump, okay?
00:00:09.700 And Europe also hits back.
00:00:11.240 You'll obviously give a little bit more intel on this.
00:00:13.560 Then, the president—do you have the Europe on here as well, Rob, or no?
00:00:17.460 Let me see on the story you were just on.
00:00:19.840 Yes, this has Europe in here as well.
00:00:21.060 If you can go a little bit lower, let's see what Europe's is. 0.86
00:00:24.260 The European Union announced it would begin collecting retaliatory duties on U.S. imports starting Tuesday, okay?
00:00:33.600 All right, and that's fine.
00:00:35.480 So now, if you go back to Trump's tweet, here's what Trump puts on Truth Social.
00:00:40.380 And this is as of two and a half hours ago, three hours ago.
00:00:45.180 Based on the lack of respect that China has shown to the world's markets,
00:00:49.360 I am hereby raising the tariff charge to China by U.S. to 125% effective immediately.
00:00:58.660 At some point, hopefully in the near future, China will realize that the days of ripping off the U.S. and other countries is no longer sustainable or acceptable. 0.93
00:01:07.940 Conversely, and based on the fact that more than 75 countries have called representatives of the U.S.,
00:01:15.600 including Department of Commerce, Treasury, and the USTR,
00:01:19.080 to negotiate a solution to the subjects being discussed relative to trade, trade barriers, tariffs, and currency manipulation,
00:01:25.920 and non-monetary tariffs.
00:01:27.780 And that these countries have not, at my strong suggestion, retaliated in any way, shape, or form against the U.S.,
00:01:35.360 I have authorized a 90-day pause and a substantially lowered reciprocal tariff during this period of 10%,
00:01:43.680 also effective immediately.
00:01:45.520 Thank you for your attention to this matter.
00:01:47.620 He posts this.
00:01:49.000 Immediately, the market, Rob, if you can go to the market, the market responds accordingly.
00:01:54.320 Go to the one day.
00:01:55.620 The one day ends up being 3,000.
00:01:58.720 That was up 3,000, nearly 8% in a single day, right after the announcement is made.
00:02:05.960 You can tell that, Rob.
00:02:06.800 If you can do that again, that was great.
00:02:08.420 He makes the announcement there at 37,941.
00:02:11.760 Boom.
00:02:12.280 The rest of the day ends up being nearly 3,000 today.
00:02:14.860 So, for you, with this back and forth, this is your world.
00:02:17.900 This is what you do as an economist and somebody that's watched the quantitative easing,
00:02:22.260 and now we're doing a little bit of quantitative tightening that's going on.
00:02:24.760 We'll show that as well.
00:02:25.980 What do you think is going on here?
00:02:27.360 Is this good news?
00:02:28.480 Is this over with?
00:02:29.500 Is China going to come to the table? 0.81
00:02:31.040 What do you think?
00:02:32.260 Well, the question is for who?
00:02:33.580 Good news for who or bad news for who?
00:02:35.720 Certainly, the markets take the viewpoint that this is good for most of the countries.
00:02:43.180 So, stock markets are up not only in the U.S., but also in Europe and any market that's open.
00:02:51.560 And actually, you wonder, because really what's happened is
00:02:54.720 President Trump, who previously had this longest list of countries that were faced with these new tariffs
00:03:03.980 and partly extremely high tariffs in one go, the longest ever, I think, has been announced in one go.
00:03:10.860 But they're now gone.
00:03:14.080 It's all back to a minimum of 10%.
00:03:16.360 Some were at 10%.
00:03:17.320 The U.K. was 10%.
00:03:19.120 And which one is left over?
00:03:23.100 China.
00:03:23.640 So, you're really now pinpointing, zooming in on China.
00:03:27.180 And clearly, China is the target now. 0.78
00:03:32.520 The question is, was this now caving in to the market pressure?
00:03:37.840 Because it's been relentless selling last week, relentless, also Monday, Tuesday.
00:03:43.520 And, you know, that really created a lot of pressure.
00:03:46.980 At Treasury, they were quite concerned.
00:03:48.640 And there were some voices at Treasury saying, you know.
00:03:50.940 And actually, there was this announcement, I think it was on Monday, that there will be a 90-day reprieve,
00:04:00.540 which was then denied by the White House.
00:04:03.560 They said, no, no, that's not true.
00:04:04.380 That's a rumor.
00:04:06.040 You see, so clearly, it's being proposed by somebody, perhaps from Treasury.
00:04:09.620 Ah, you know, why don't we do this?
00:04:11.820 And now it's become policy.
00:04:13.760 Well, we can't know.
00:04:14.580 We can only guess and speculate exactly how it came about.
00:04:17.100 But the result is clear.
00:04:19.380 Trump has made a major statement, you know, last week on this Liberation Day, on these tariffs,
00:04:28.740 and certainly woke up the whole world like they're paying attention to what he's saying and what the U.S. is doing.
00:04:35.620 That's for sure.
00:04:36.440 So he clearly got that attention.
00:04:37.980 And as he said in his tweet and his, you know, his message on Truth Central, so many countries have got in touch with the U.S.
00:04:48.380 and they're saying, hey, let's make a deal.
00:04:51.140 That's, of course, what he wants.
00:04:52.740 So in that sense, you could say, well, it's worked.
00:04:54.660 They're all coming, crawling back to the earth saying, ah, yeah, okay, we realize we did have some tariffs on you guys,
00:05:00.780 and you wanted to have a level playing field.
00:05:03.300 So fair enough.
00:05:04.100 Let's come to a deal.
00:05:05.260 And in many ways, that was clearly the goal.
00:05:09.460 Of course, you need to get those deals worked through and signed and, you know, done and dusted, so we're not there yet.
00:05:16.840 But he's got the reaction.
00:05:18.760 They know he can be very serious.
00:05:21.520 And if they don't negotiate properly, it will become serious again.
00:05:25.100 There's no doubt.
00:05:25.740 So in many ways, and I think that was in favor of this idea that, hey, let's have a reprieve because you've got everyone's attention.
00:05:32.740 They want to negotiate.
00:05:34.300 Negotiations can be tricky, can take a bit of a while.
00:05:37.000 So why don't we have this reprieve?
00:05:39.960 And I can imagine when somebody suggested that, perhaps from Treasury, I'm speculating here, but I'm sure Trump's, President Trump's response was, ah, but not China.
00:05:49.380 Surely we can't let China off the hook. 1.00
00:05:51.900 I'm not going to let China off the hook. 1.00
00:05:54.000 What do you think is going to happen with this?
00:05:55.240 I mean, meaning, you know, earlier today I tweeted something out.
00:05:59.820 I said this is really going to come down to one of three things, right?
00:06:02.840 Who needs who more? 0.77
00:06:04.740 Okay.
00:06:05.800 And then, yeah, right there, zoom in if you could, Rob.
00:06:09.360 Who needs who more? 0.77
00:06:11.100 Who has more leverage?
00:06:12.840 And then who has more time?
00:06:14.680 Right?
00:06:14.960 So when you look at the two here, back and forth, 84, 104, 125, who do you think can tolerate this pain long enough until the other has to cave?
00:06:26.440 It's a tricky question.
00:06:27.600 We're talking about the number one and the number two economies in the world.
00:06:31.460 You know, we're not talking about, say, the U.S. negotiating with the U.K.
00:06:35.160 or, you know, some other, you know, lesser ranked economy in the world is number one and number two.
00:06:41.580 And, of course, you know, by some measures, purchasing power parity measures, China could be considered number one in some way.
00:06:48.080 And obviously that's disputed.
00:06:49.460 But, so, you know, it's a big thing.
00:06:51.700 This is a big thing.
00:06:54.800 Now, timing is important because had this happened only 10 years ago or 15 years ago,
00:07:01.980 China clearly would have been in a much weaker position and it would have been, from a U.S. viewpoint, strategically much better to have it done then. 0.91
00:07:12.520 And interestingly, if you go back to some of the old interviews that President, well, Donald Trump in those days gave,
00:07:21.060 there's one I saw from 1988.
00:07:26.460 Oprah Winfrey.
00:07:27.400 Amazing.
00:07:28.280 And he's already saying, hey, we've got to have some proper tariffs.
00:07:31.260 You know, there's some unfair things going on.
00:07:33.380 We're paying, you know, our products are being, you know, faced with this tariff wall as they're trying to export to other countries.
00:07:39.820 We need to do this.
00:07:41.320 And, of course, that would have been, for some countries, a brilliant time, even for the following decades vis-a-vis China, 0.98
00:07:47.300 because China was still building up its industrial strength.
00:07:51.400 Now, it's not so obvious.
00:07:53.740 You know, the answer to your question is not so easy because China is now in a very strong position,
00:08:00.220 clearly stronger than 15 years ago or 10 years ago.
00:08:04.360 And also, it has other trading partners.
00:08:08.260 The U.S. remains, and this is the strong side from the U.S. viewpoint, 0.93
00:08:12.140 and that's what President Trump, of course, is very much aware of and is playing on.
00:08:16.480 The U.S. remains the number one desirable market to export to.
00:08:21.600 There's no doubt about that.
00:08:23.800 And, of course, that gives the U.S. a strong hand.
00:08:27.100 And that's the whole point of this, you know, of this way of bringing about trade negotiations.
00:08:33.720 But, having said that, China does have options.
00:08:38.500 We've had, in the last 10 years, increasingly, rapidly, an expansion of an alternative network,
00:08:45.900 the BRICS groups of countries.
00:08:48.020 And, in fact, the BRICS has grown.
00:08:52.440 More and more countries have joined.
00:08:53.460 Also, China has set up this Shanghai Corporation Organization.
00:08:56.860 And there is the Belt and Road Initiative, which recently, you know, celebrated its 10-year anniversary last year,
00:09:05.360 where more than, I think, more than 150 countries signed up,
00:09:09.700 and they are in bilateral arrangements and deals with China.
00:09:13.900 So, China has other options.
00:09:15.120 But, of course, as a single market, the U.S. remains, number one, also for China,
00:09:20.840 the most attractive single market.
00:09:22.720 With the others, you know, you have to aggregate a lot of countries to get anything close to what the U.S. offers.
00:09:28.960 So, it's fairly, it's quite balanced.
00:09:33.640 And I think that's what the Chinese response also shows.
00:09:37.040 You know, why have they been so, well, you know, disrespectful is how President Trump puts it,
00:09:44.380 but clearly not very accommodating, let's say.
00:09:48.280 Okay.
00:09:48.900 Why?
00:09:49.580 They seem very self-confident.
00:09:51.500 Who's there, U.S.?
00:09:52.700 Sorry, China. 1.00
00:09:53.780 China has not been accommodating and has been quite aggressive in its response,
00:09:58.260 unlike other countries, has not been accommodating.
00:10:04.300 And as immediately said, we're not going to be pushed into a corner.
00:10:07.760 We're just going to do the same.
00:10:08.920 We're just going to have higher tariffs on the U.S. products and so on.
00:10:12.620 And so, now we have this literally, this very aggressive bilateral mutual raising of tariffs,
00:10:20.320 which will kill off trade between these two major economies.
00:10:25.180 And that will, even if everything else now is fine, everyone gets a deal and things will be sorted out with all other countries,
00:10:33.000 that still will have a negative impact on global trade and reverberations in many sectors,
00:10:42.520 whether it's, you know, shipping or whether it's particular industries where China is a necessary partner,
00:10:48.460 you know, rare earths and various, actually, even inputs that other countries need,
00:10:54.660 not to mention final products that we've been getting quite used to buying from China.
00:11:00.440 So, this trade war has become, at the moment, with this 90-day reprieve,
00:11:06.660 very focused on just the U.S.-China trade, well, dispute, trade war, if you want.
00:11:15.140 And in that sense, and markets take a view of, okay, that's much better than before
00:11:19.300 with all these dozens and dozens of countries, but it still remains an issue.
00:11:25.460 If that continues to escalate, it will actually hurt the world still.
00:11:30.440 And, yeah, your question, you know, who's got more time, who's got more leverage,
00:11:39.600 it's fairly evenly balanced.
00:11:42.240 On some things, the U.S. is stronger.
00:11:44.200 On some things, China has built up a very formidable position.
00:11:47.680 What are we stronger in?
00:11:50.040 We have the best customer base.
00:11:51.960 We have the best buyer base.
00:11:53.540 I just looked up right now China's top 10 biggest trade partners.
00:11:57.820 Number one is U.S., roughly 600 billion, Hong Kong, 297, Japan, 308, South Korea, 328.
00:12:06.880 These are big numbers.
00:12:08.480 Vietnam, 260, Germany, 202, Netherlands, 110, India, 138, Malaysia, 212, and Russia, 245, right?
00:12:16.540 So it's not like U.S. is 50% of the trade.
00:12:20.880 It's not, okay?
00:12:23.860 How much total trade does China do in 2024?
00:12:27.760 How much was their total trade?
00:12:29.480 What was China's total trade in 2024?
00:12:36.500 China, 6.1 trillion?
00:12:38.480 Okay.
00:12:39.320 Of the 6.1, so if you divide five, what was the number I said, 582, I mean, it's 9%, right?
00:12:47.240 582 divided by 61.
00:12:50.380 So if we do 582 divided by 61, 9.5%, still a big number, but it's not 25, 40%.
00:13:00.180 Now, of course, this is from the aggregate, you know, 6.1 trillion imports and exports aggregated.
00:13:06.340 If you say, okay, let's look at just exports, you know, you probably get a higher figure.
00:13:11.160 So, but yes, so it's not, you know, it's not negligible either way.
00:13:16.820 So maybe check, Rob, what percent of China's export is U.S.?
00:13:21.180 What, what percentage, what percentage of China's export is U.S.?
00:13:30.260 Yeah, yeah, 15%.
00:13:31.960 Okay.
00:13:32.220 That's sort of, that sounds right.
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