Latest / Best of Business / Peter Lewis: Asia Business Correspondent on the US-China trade war, Japan's conditions on trade with the US and China's April exports growing

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Peter Lewis: Asia Business Correspondent on the US-China trade war, Japan's conditions on trade with the US and China's April exports growing · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. It'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Peter Lewis, our Asia business correspondent, is with me right now. Hi, Peter,
• 0:21
  Speaker 2: Good evening header now, Peter on this US China trade war.
• 0:25
  Speaker 2: This thing is settled down for ninety days. But is
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  Speaker 2: that all or is this the start of the end?
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  Speaker 3: I think there's still a long way to go. And
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  Speaker 3: the way it's sort of being painted in social media
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  Speaker 3: and state media up in China is that this was
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  Speaker 3: a complete climbed down by Donald Trump. He agreed to
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  Speaker 3: reduce tarots by one hundred and fifteen percent. China matched that,
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  Speaker 3: but didn't have to do anything else whatsoever. And they
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  Speaker 3: probably do have a point, because you have to say, well,
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  Speaker 3: what was the point of all of this To put
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  Speaker 3: all these tariffs on, effectively end trade between the US
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  Speaker 3: and China, then take the tariffs off, but get no
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  Speaker 3: concessions whatsoever from China. And I think this is only
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  Speaker 3: just the beginning of what could happen over the next
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  Speaker 3: ninety days. Already the US is talking about trying to
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  Speaker 3: blacklist some semiconductor companies in China and technology companies, which
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  Speaker 3: is going to irritate them immensely and makes it more
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  Speaker 3: difficult to have this discussion over the next ninety days.
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  Speaker 3: And what we have to remember is that there are
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  Speaker 3: still tariffs of thirty percent on China, So while they're
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  Speaker 3: not these devastating tariffs are one hundred and forty thirty percent,
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  Speaker 3: tariffs are still pretty high. So that is still going
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  Speaker 3: to damage trade between the two countries. And I think
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  Speaker 3: what's going to happen is that President jenp is going
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  Speaker 3: to do what has been doing over the last few years,
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  Speaker 3: which is to create a global trading system that doesn't
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  Speaker 3: include the US. He will deal it, diversify exports away
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  Speaker 3: from the US and rely far more on countries in
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  Speaker 3: the Middle East, in Southeast Asia, emerging markets. And he's
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  Speaker 3: already having some success in that. Columbia only last week
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  Speaker 3: agreed to join the Belton Road Initiative, so already he's
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  Speaker 3: approaching a lot of these developing nations and looking to
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  Speaker 3: sell the goods that he would have sold to the
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  Speaker 3: US to those nations instead. And I think that process
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  Speaker 3: is only going to accelerate over the coming ninety days.
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  Speaker 2: Both sides claim that they've got the upper hand. But
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  Speaker 2: who do you think has got the upper hand here?
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  Speaker 3: Well, I mean they're both right to a certain extent,
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  Speaker 3: because this is damaging to China, for sure, and it
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  Speaker 3: has slowed its economy, and it has caused problems for
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  Speaker 3: its manufacturers, many of whom just can't survive with tariffs
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  Speaker 3: at that level. It puts pressure on the unemployment rate
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  Speaker 3: in China, which is a very sensitive issue domestically. So
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  Speaker 3: for sure, called it has caused problems for China, but
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  Speaker 3: I think they're in a better position to withstand those problems.
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  Speaker 3: It's got a huge domestic market. It's got many ways
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  Speaker 3: in which it can diversify its economy, boost domestic consumption
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  Speaker 3: to try and offset the damage that's been done. Now
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  Speaker 3: the US, it's also damaged its own economy. I mean,
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  Speaker 3: shipments to China have collapsed virtually down to zero to
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  Speaker 3: the US have collapsed virtually down to zero. And the
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  Speaker 3: issue for the US is that it likes to blame
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  Speaker 3: China and other countries for its trade deficits. But the
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  Speaker 3: reason why it has huge trade deficits is because its
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  Speaker 3: own citizens don't save enough and they want to buy
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  Speaker 3: all these goods that China and other countries sell to them,
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  Speaker 3: they like them, they want to pay for them, and
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  Speaker 3: that's what causes the trade deficits. But it's going to
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  Speaker 3: be difficult for the US as well because inflation will
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  Speaker 3: pick up over the coming months. Retail sales are already slowing,
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  Speaker 3: and we're already seeing that in the latest data, So
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  Speaker 3: it's doing damage to its own economy as well, but
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  Speaker 3: not getting the benefits that Trump touted, where all these
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  Speaker 3: manufacturers are going to relocate to the US. We haven't
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  Speaker 3: seen very much of that so far. Trump has also
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  Speaker 3: said We're going to get huge revenues in from other
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  Speaker 3: countries to play to pay for his tax cuts. Well,
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  Speaker 3: we're not seeing signs of that either. So you know,
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  Speaker 3: he's put these tarifts on, taking them off again, but
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  Speaker 3: not got anywhere near close to getting all the benefits
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  Speaker 3: of those tarots be touted in the first place.
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  Speaker 2: The Trump the possible trade deal between Trump and Japan
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  Speaker 2: is an interesting thing. Read the tariffs and the cars, right,
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  Speaker 2: And I was reading about this and somebody made the
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  Speaker 2: point that Trump thinks that Japan is a soft target.
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  Speaker 2: Is he wrong?
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  Speaker 3: Yeah, he is wrong, And if anything, Japan is rather
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  Speaker 3: stealing for a longer font here. They don't think they're
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  Speaker 3: going to get a deer in ninety days, and they're
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  Speaker 3: absolutely adamants that tariffs on cars have to come off
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  Speaker 3: as part of that deal. It's two big exports to
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  Speaker 3: the US, auto's and agricultural products. They are both two
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  Speaker 3: very very sensitive issues for Japan. Prime Minister Ashiba has
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  Speaker 3: got an election coming up very soon, and his popularity
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  Speaker 3: has already plunged to below thirty percent, so he's got
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  Speaker 3: a lot of domestic issues and he can't afford to
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  Speaker 3: back down and give in on the two largest sectors
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  Speaker 3: of exports to the US. So I think it's going
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  Speaker 3: to be very, very difficult for Trump to get this
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  Speaker 3: deal with Japan. I think it's also a very similar
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  Speaker 3: situation for India. India also seems to be drawing a
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  Speaker 3: line now as well. So these imminent trade deals that
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  Speaker 3: Trump has touted with countries like Japan, South Korea, India
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  Speaker 3: are going to be struggle to get done within the
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  Speaker 3: ninety days.
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  Speaker 2: Interesting. Hey, Peter, it's always lovely to talk to you.
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  Speaker 2: Thank you so much. We'll talk to you in a
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  Speaker 2: week and enjoy your weekend. That's Peter Lewis, our Asia
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  Speaker 2: Business correspondent.
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