Latest / NO FILTER / _A major escalation__ Matt Egan on potential impact of tariffs(M4A_128K)

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_A major escalation__ Matt Egan on potential impact of tariffs(M4A_128K) · NO FILTER

• 0:01
  Speaker 1: It's a different Congress. They're all congratulating that. Yeah, it's lucky,
• 0:08
  Speaker 1: it is.
• 0:10
  Speaker 2: It's actually a funny moment.
• 0:11
  Speaker 3: That was President Trump interrupted at once but twice allegedly
• 0:14
  Speaker 3: by two different congressmen today in the Oval Office by
• 0:17
  Speaker 3: his iPhone ringing now.
• 0:18
  Speaker 2: Just moments after saying that the twenty five percent tariffy
• 0:21
  Speaker 2: threatened to.
• 0:22
  Speaker 3: Place on Apple will also apply to other smartphone makers
• 0:25
  Speaker 3: if they don't produce their products here in the US,
• 0:28
  Speaker 3: he also turned up the pressure in a major way
• 0:31
  Speaker 3: on the EU, imposing fifty percent tariffs set to go
• 0:33
  Speaker 3: in effect on June.
• 0:34
  Speaker 4: First.
• 0:37
  Speaker 1: I'm not looking for a deal. I mean, we've set
• 0:39
  Speaker 1: the deal. It's at fifty percent. But again, there is
• 0:42
  Speaker 1: no tariff if they build their plant here. Now, somebody
• 0:46
  Speaker 1: comes in and wants to build a plan here, I
• 0:47
  Speaker 1: can talk to them about a little bit of a delay,
• 0:50
  Speaker 1: but you know, while they're building their plant, which is
• 0:52
  Speaker 1: something I think they would be appropriate. Maybe.
• 0:56
  Speaker 2: So, what's the potential impact to the US economy?
• 0:59
  Speaker 3: Sinance Mattie is at the Magic Wall.
• 1:03
  Speaker 5: Yeah, this would be a major escalation in the President's
• 1:06
  Speaker 5: trade wars. And this definitely cut investors off guard, right,
• 1:09
  Speaker 5: They had been relieved about the fact that trade tension
• 1:12
  Speaker 5: seemed to be calming down. Now they're heating back up.
• 1:16
  Speaker 5: Just to remind you how we got here. Last month,
• 1:18
  Speaker 5: the President briefly imposed twenty percent tariffs on the EU.
• 1:22
  Speaker 5: Then he lowered them to ten percent to allow for
• 1:24
  Speaker 5: time for negotiations. Now he's not happy about how those
• 1:26
  Speaker 5: talks are going, and he's threatening a fifty percent tariff
• 1:29
  Speaker 5: on the EU now. Just to give you some context here,
• 1:33
  Speaker 5: the EU is America's biggest trading partner far and away.
• 1:38
  Speaker 5: We're talking about almost a trillion dollars worth of imports
• 1:41
  Speaker 5: and exports between the US and the EU last year alone.
• 1:44
  Speaker 5: That's more than with Mexico, more than with Canada. It's
• 1:46
  Speaker 5: actually more than with China and Japan combined. When you
• 1:50
  Speaker 5: look at what the US gets from the EU, we're
• 1:52
  Speaker 5: talking about more than six hundred billion dollars worth of
• 1:55
  Speaker 5: goods last year alone. It's not just the BMW's and
• 1:58
  Speaker 5: the volkswagons from We're also talking about aircraft, pharmaceutical products, machinery,
• 2:04
  Speaker 5: wine and other alcoholic beverages. And if you put a
• 2:06
  Speaker 5: fifty percent tariff on those goods, there's obviously a risk
• 2:10
  Speaker 5: that they're going to get expensive, more expensive, potentially a
• 2:13
  Speaker 5: lot more expensive. That's why economists over at Barkleys they
• 2:16
  Speaker 5: say that they view this threat of a fifty percent
• 2:19
  Speaker 5: tariff as a negotiating tactic, but they do caution that
• 2:24
  Speaker 5: if these tariffs did go into effect, they would weigh
• 2:27
  Speaker 5: on both GDP growth and they would further boost inflation.
• 2:32
  Speaker 5: So you could have a situation where you have slower
• 2:34
  Speaker 5: growth and higher prices. And we don't know yet exactly
• 2:39
  Speaker 5: how the EU is going to respond, but they've already
• 2:40
  Speaker 5: set in motion potential retaliatory tariffs on more than one
• 2:43
  Speaker 5: hundred billion dollars of goods that they buy from the
• 2:47
  Speaker 5: United States. And it's those retaliatory tariffs that could kill
• 2:50
  Speaker 5: US jobs. Now, it's not just the EU that the
• 2:53
  Speaker 5: President is threatening with his favorite weapon. Also, it is
• 2:56
  Speaker 5: one of America's biggest company's, Apple, Apple joining a growing
• 3:01
  Speaker 5: list of US companies that have been attacked by the
• 3:03
  Speaker 5: President so far this year. And the thing Apple has
• 3:06
  Speaker 5: in common with Amazon and Mattel and Walmart is how
• 3:12
  Speaker 5: it's linked to tariff's right. The President is threatening at
• 3:15
  Speaker 5: least a twenty five percent tariff on Apple unless they
• 3:18
  Speaker 5: move manufacturing back to the United States. But the problem
• 3:22
  Speaker 5: is the cost of labor here in the US is
• 3:24
  Speaker 5: so much higher that this is something that not only
• 3:27
  Speaker 5: Apple couldn't do overnight, right, it would take five to
• 3:30
  Speaker 5: ten years, but it would make the iPhone more expensive,
• 3:34
  Speaker 5: way more expensive. There's estimates out there that if the
• 3:37
  Speaker 5: iPhone was made in the US, each one would cost
• 3:40
  Speaker 5: thirty five hundred dollars apiece. Right, that is prohibitably expensive
• 3:45
  Speaker 5: for many Americans, and that's why veteran analyst Tech dan
• 3:49
  Speaker 5: Ives says that they believe this concept of Apple producing
• 3:53
  Speaker 5: iPhones in the US is a fairy tale, and he
• 3:56
  Speaker 5: says it's one that is not feasible. And look, even
• 4:00
  Speaker 5: if Apple found a way to somehow make it economical,
• 4:04
  Speaker 5: it is not clear at all that they'd be able
• 4:06
  Speaker 5: to find enough workers in the US who have the
• 4:10
  Speaker 5: skills and greatly the desire to build iPhones backtil.
• 4:15
  Speaker 3: Otherwise, straight path Maddie can thanks so much with me
• 4:19
  Speaker 3: is the US national editor of the Financial Times, Ed Luis,
• 4:22
  Speaker 3: who was also the author of a remarkable new biography.
• 4:25
  Speaker 2: I was going to hold it up what you got
• 4:26
  Speaker 2: a graphing. It's big.
• 4:28
  Speaker 3: The life was a big New Brazinski America's power profit.
• 4:31
  Speaker 3: I wanted to talk about that in just a moment.
• 4:34
  Speaker 3: We were already talking about it during the break, But I
• 4:37
  Speaker 3: do want to start with what's going on. I don't
• 4:39
  Speaker 3: know how your Friday morning was. Mine was interrupted by
• 4:41
  Speaker 3: the reignition of a pretty substantial trade threat starting with
• 4:47
  Speaker 3: the EU. Treasury Secretary Scott Besson said this earlier today.
• 4:51
  Speaker 2: Take a listen.
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  Speaker 6: I would hope that this would light a fire under
• 4:56
  Speaker 6: the EU because Bill, I've said before, EU has a
• 5:00
  Speaker 6: collective action problem here. So some of the feedback that
• 5:03
  Speaker 6: I've been getting is that the underlying countries don't even
• 5:06
  Speaker 6: know what the EU is negotiating on their behalf.
• 5:12
  Speaker 2: Why I want to point that out.
• 5:13
  Speaker 3: The President a couple hours later said I don't want
• 5:15
  Speaker 3: to deal and this is the constant tension that those
• 5:19
  Speaker 3: of us like you covering this.
• 5:21
  Speaker 2: Is this a negotiating strategy?
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  Speaker 3: Is it to light a fire like the Treasure Secretory
• 5:25
  Speaker 3: is saying, or is this the end game?
• 5:26
  Speaker 2: Is this the outcome? What do we think here?
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  Speaker 6: So?
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  Speaker 4: I mean, the one thing there that I strongly agree
• 5:31
  Speaker 4: with Secretary Scott Besson about is there is a collective
• 5:34
  Speaker 4: action problem with the twenty seven member states is different
• 5:37
  Speaker 4: to doing a deal with Saudi Arabia or even the UK,
• 5:41
  Speaker 4: where one government can react quickly. They have to consult
• 5:44
  Speaker 4: a lot of governments. But I suspect when they consult
• 5:47
  Speaker 4: those twenty seven governments with one or two exceptions like Hungary,
• 5:51
  Speaker 4: there's a real digging in of heels here that you know,
• 5:55
  Speaker 4: we are the largest trading block in the world. We
• 5:57
  Speaker 4: are as in the European Union, and we're not going
• 6:01
  Speaker 4: to be intimidated by these kind of casino hall tactics.
• 6:05
  Speaker 4: This is sort of a game of bluff, and we're
• 6:08
  Speaker 4: not going to lose at this game of bluff. So
• 6:10
  Speaker 4: the EU is it is not that different in fact
• 6:13
  Speaker 4: to China in saying you cannot push us around. We're
• 6:15
  Speaker 4: not the UK and we're not a Gulf kingdom. So
• 6:21
  Speaker 4: I don't know whether this is the end of, you know,
• 6:24
  Speaker 4: fifty percent raising the cost of those six hundred billion
• 6:27
  Speaker 4: dollar imports to nine hundred billion dollars in terms of
• 6:31
  Speaker 4: the cost of the American consumer. I don't know whether
• 6:33
  Speaker 4: Trump thinks this is the end game. I don't think
• 6:35
  Speaker 4: he knows whether it's the endgame. He changes his position
• 6:40
  Speaker 4: and is unfoecastable. That's that's the real problem here. You
• 6:44
  Speaker 4: cannot predict what he's going to.
• 6:45
  Speaker 2: Do real quick. Do you want to move on what's
• 6:48
  Speaker 2: around the book?
• 6:48
  Speaker 3: But what does that do to negotiating when you talk
• 6:50
  Speaker 3: to diplomats or trade teams that are involved in the
• 6:53
  Speaker 3: dozens of negotiations that are ongoing right now, that reality,
• 6:56
  Speaker 3: what does it do?
• 6:57
  Speaker 4: So, I mean, the one deal that Trump has Trump
• 7:01
  Speaker 4: is the UK Deal, and if you look at the
• 7:03
  Speaker 4: contents of that deal, they really aren't any It's sort
• 7:06
  Speaker 4: of a framework with lots of blank placeholders. So even
• 7:10
  Speaker 4: the word deal, let alone agreement, agreement means you know,
• 7:13
  Speaker 4: you've threshed out something that will last for years. But
• 7:16
  Speaker 4: the UK breathed a sigh of relief, they felt they
• 7:19
  Speaker 4: had dodged a bullet. But they've gone back to a
• 7:21
  Speaker 4: baseline of ten percent, which is not a victory. It's
• 7:25
  Speaker 4: just a worse outcome avoided. So that's not really the
• 7:29
  Speaker 4: model for the EU, it's not really the model for China,
• 7:33
  Speaker 4: it's not really the model for anybody. It's very very
• 7:35
  Speaker 4: hard to negotiate with the president who can tank the
• 7:40
  Speaker 4: markets with a tweet and without any warning.
• 7:43
  Speaker 2: It is certainly different than normal diplomatic relations. See what
• 7:46
  Speaker 2: I did. This is a segue through the book, which
• 7:50
  Speaker 2: I was genuine in.
• 7:51
  Speaker 3: Telling you during the break, and I'm not all the
• 7:53
  Speaker 3: way through it yet, but it's an extraordinary work, and
• 7:56
  Speaker 3: I actually want to ask you. You have access to
• 7:58
  Speaker 3: things people I haven't before. The family didn't ask for anything.
• 8:02
  Speaker 3: Actually explain how what you have access to because it
• 8:05
  Speaker 3: connects to the Pope in a way that I think
• 8:07
  Speaker 3: is really really extraordinary.
• 8:10
  Speaker 4: Well, thank you very much for those kind words. I
• 8:12
  Speaker 4: mean the raw material, the primary material that partly I
• 8:16
  Speaker 4: was given by the family, which is the diaries he kept.
• 8:18
  Speaker 4: He sort of used a dictaphone from the White House
• 8:21
  Speaker 4: back to his home in Virginia every night, spoken full
• 8:24
  Speaker 4: paragraph that first draft of history, these enormous diaries. I
• 8:27
  Speaker 4: got exclusive access to the correspondence with Pope John Paul
• 8:32
  Speaker 4: the second too. Of course, like Brazhinski came from Poland,
• 8:36
  Speaker 4: which was in Polish extraordinary, really historic exchange of letters
• 8:43
  Speaker 4: over many, many years. Brazinski had pe for Pope on
• 8:47
  Speaker 4: his White House phone so he could get through to
• 8:50
  Speaker 4: the bat Vatican straight away, and that helped prevent the
• 8:55
  Speaker 4: Soviet invasion of Poland that relationship. It was a really
• 8:58
  Speaker 4: sort of seminal one. But tons of stuff, the Polish
• 9:01
  Speaker 4: secret police files and the Soviet one ones on Brazinski.
• 9:06
  Speaker 4: I had those translated, all his childhood stuff. You know,
• 9:10
  Speaker 4: you need to get the formative stages for a real biography,
• 9:13
  Speaker 4: those early years.
• 9:15
  Speaker 3: The reason it's so timely given we've seen Gdvance, vice
• 9:18
  Speaker 3: president of Vance go over and you start to think, okay, well,
• 9:21
  Speaker 3: is this the thing that's happened before.
• 9:22
  Speaker 2: Yes, it has.
• 9:22
  Speaker 3: And the illustration, the picture you paint here, and the
• 9:26
  Speaker 3: stakes and the outcome which are so dramatic on some
• 9:29
  Speaker 3: of these are a little bit hopeful.
• 9:31
  Speaker 2: I do ask.
• 9:32
  Speaker 3: Look, he was a maverick in terms of partisan politics
• 9:35
  Speaker 3: right and eighty eight.
• 9:37
  Speaker 2: He didn't endorse the Democrat if.
• 9:38
  Speaker 3: I recall correctly, Is there anything is anybody like him anymore?
• 9:44
  Speaker 4: He's really unusual. There's one of the reasons I was
• 9:47
  Speaker 4: attracted to doing a biography of him. You know, he
• 9:49
  Speaker 4: was a grand strategist. He was Kissinger's Henry Kissinger's great rival.
• 9:53
  Speaker 4: But I don't like Kissinger. He wasn't much of a
• 9:57
  Speaker 4: team player. I mean, he was a very very pennant minded.
• 10:01
  Speaker 4: He'd argue with Jimmy Carter, the president he served it.
• 10:03
  Speaker 4: They'd have stand up fights. You know, this wasn't a
• 10:07
  Speaker 4: Rubio Trump relationship. Let's put it like that. He wasn't
• 10:12
  Speaker 4: a hawk, he wasn't a dove. He wasn't a realist,
• 10:14
  Speaker 4: he wasn't an idealist. He was a Democrat. But as
• 10:16
  Speaker 4: you point out, he endorsed hw Bush over Dukakis in
• 10:20
  Speaker 4: the eight eight election, voted for Nixon over McGovern in
• 10:24
  Speaker 4: nineteen seventy two. He was his own person. And it's
• 10:27
  Speaker 4: quite hard to get ahead in any political capital, including Washington,
• 10:32
  Speaker 4: d C. If you don't belong to a tribe and
• 10:34
  Speaker 4: stick to that tribe's rules and sort of absorb its
• 10:39
  Speaker 4: memos and then you know, faithfully regurgitate them. He really
• 10:43
  Speaker 4: really didn't do that. He was his own person.