- 7 months ago
"It’s all the president's decision," says his treasury secretary. World trade again hangs on the whims of one man, argues François Picard's panel after Donald Trump reversed course with a 90-day moratorium on most reciprocal tariffs, but increased import duties on China to 125 percent. Will it be enough to ease markets in the long run? After all, 10 percent universal tariffs on the rest of the world still apply. Who, between China and the United States, has the stamina to win this fight between the world's top manufacturer and its number one customer?
Produced by Rebecca Gnignati, Elisa Amiri, Ilayda Habip.
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Produced by Rebecca Gnignati, Elisa Amiri, Ilayda Habip.
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NewsTranscript
00:00No moratorium, no reprieve. U.S. import duties went into effect at midnight with confidence in the world's most powerful nation shattered.
00:11Investors pulling their money from both stocks and bonds in the last trading days. Never a good sign.
00:20Most spectacular, 104% tariffs on China, which insists it won't come cap in hand to plead for mercy.
00:29Who blinks first between the world's top manufacturer and the world's top consumer?
00:34How does the rest of the world rethink trade, both with Beijing and Washington?
00:39Investors seek reliability and states that have strong and credible institutions.
00:45When U.K. Prime Minister Liz Truss in 2022 bypassed her own government services and went all in on trickle-down economics in her mini-budget,
00:54Parliament and the British media killed her rogue initiative fast.
00:57If this is Donald Trump's Liz Truss moment, then who to rein him in?
01:03Today in the France 24 debate, we're asking who blinks first in this global trade war.
01:08With us from Brussels, Nicholas Winneker, editor-at-large for Politico Europe.
01:12Great to see you.
01:16Good to see you again. Thanks for having me.
01:18In a previous life, he was a member of the European Parliament for the U.K. Independence Party.
01:22From Lancaster, England, economist John Whitaker, senior teaching fellow at Lancaster University.
01:27Welcome to the show.
01:29Yes, good evening.
01:31From New York, Zongyang Liu, fellow for international political economy at the Council on Foreign Relations.
01:38Good to see you again.
01:39And we welcome back economist and data scientist Rémy Bourgeau, associate fellow at the French Institute for International and Strategic Affairs.
01:50Iris, how are you?
01:52I'm fine. How are you?
01:53All right.
01:54Thanks, by the way, one and all, for listening.
01:56That's right, listening to the France 24 debate and subscribing wherever podcasts are streamed.
02:01Yeah, take a step back from the breaking news.
02:06And as the song goes, try to remember the kind of September when life was perhaps not so tender.
02:122022, the death of a queen on a brand new prime minister's watch.
02:16And then, against conventional wisdom, massive tax cuts that sent markets spinning.
02:23Mr. Speaker, I am a fighter and not a quitter.
02:36Liz Truss would later sack her finance minister before falling on her own sword just after 49 days in office.
02:46Nicholas Finneker, is this Donald Trump's Liz Truss moment?
02:48Well, that's certainly what some are saying.
02:55It might be time to break out the head of lettuce and start counting the days before it goes brown.
03:01Obviously, Donald Trump is not going to leave office.
03:04That's not how the U.S. political system works.
03:07But Congress could step in and put a stop to this tariff situation overnight if it wanted to.
03:14And what we're seeing is that the markets are piling pressure on Donald Trump.
03:20Some of his closest friends, some of his billionaire backers are turning against these tariffs and putting more pressure on Trump.
03:28It's even causing splits inside his administration with Elon Musk attacking Peter Navarro, who we understand is the real hardliner on these tariffs.
03:38So there's political pressure piling on, and it could simply become too great at some point if we really enter kind of massacre territory in the markets for even Donald Trump to stand up to.
03:52Right now, the Wall Street in positive territory by 1 percent, not enough to recoup much.
03:59John Whitaker, do you agree it could be a Liz Truss moment?
04:02I don't think so at all.
04:05Liz Truss, as you point out, only lasted 49 days.
04:09Trump's been around a long time already.
04:11He's done quite a lot more damage than Liz Truss ever did.
04:14And in fact, after she had finished doing all the damage, everything was quickly reversed and we went back to normal.
04:20This isn't a Liz Truss event at all.
04:22This is far, far more dangerous than that.
04:25England recovered, Britain recovered from the problem.
04:28The world's not going to recover that quickly from Trump's antics here.
04:31Even if Donald Trump reversed course tomorrow, it wouldn't recover quickly?
04:39Well, look, come on.
04:40Donald Trump reversing course tomorrow is just not there.
04:44There's no point in trying to second guess what Donald Trump's going to do next.
04:48The stock market's been bouncing up and down like a yo-yo because everybody's waiting on Trump's next word, which is a pretty foolish thing to do.
04:57Let's not try and second guess Trump.
04:59Just wait till the whole thing settles down and let's take some action there.
05:02Everybody's knee-jerk reaction to what Trump's done.
05:05It's just what he loves.
05:06Everybody's waiting for him to come up with the next announcement.
05:10He loves it.
05:10All right.
05:11The U.S. president on Tuesday serving up his version of I'm a fighter, not a quitter at the National Republican Congressional Committee dinner.
05:22Don't let some of these politicians go around saying, you know, because I'm telling you, these countries are calling us up, kissing my ass.
05:32They are.
05:33They are dying to make a deal.
05:35Please, please, sir, make a deal.
05:37I'll do anything.
05:38I'll do anything, sir.
05:39And then I'll see some rebel Republican, you know, some guy that wants to grandstand, say, I think that Congress should take over negotiations.
05:48Let me tell you, you don't negotiate like I negotiate.
05:52Zhang Yanglu, he made those remarks in front of an audience that included lawmakers.
05:57Your thoughts on the vulgar, vulgar language aside, Donald Trump's doubling down.
06:09I think this is the part where despite neither side, neither China nor the United States or the Trump administration would want to come into a deal with Baker Hand.
06:22Or the asymmetric bureaucratic arrangement right now prevent the two sides to start a trade negotiation.
06:34As you correctly pointed out, President Trump, he himself bragged about he being perhaps the best dealmaker or negotiator, at least from his point of view.
06:46But in China, President Xi Jinping, he himself does not negotiate.
06:50A lot of the negotiations would have to be done by functionary agencies.
06:56And the role of President Xi Jinping is to come in towards the end and basically close the deal.
07:03So right now we haven't seen President Xi Jinping directly make any response to President Trump's tariff hikes.
07:12So from that perspective, despite President Trump trying to hike up the pressure, we haven't seen the Communist Party of China or Chinese agencies wanting to give in.
07:26And they won't.
07:26Because the criticism of Xi Jinping has been that over time, he has consolidated his power and amassed more power into one single person than at any time since Mao.
07:40Is Donald Trump trying to do the same thing again?
07:43He's saying there that lawmakers don't matter.
07:47I'm the one that matters.
07:48In a lot of ways, I would say President Trump is not the first U.S. president trying to change some institutions.
08:01And he did not invent trying to maximize America's leverage to achieve certain things by resorting to coercion.
08:09And by contrast, Chinese President Xi Jinping, he is not the Chinese president invented self-reliance.
08:17And he's not the Chinese president to insist upon not yielding to foreign pressure.
08:23So a lot of analysts compare him to Chinese leader Chairman Mao Zedong, the founding father or Chinese version of George Washington.
08:34And if President Xi Jinping does consider himself along that line, then he has all the reasons to not give in.
08:44But so far, I would have to say on both sides, probably the intention to de-escalate or to negotiate down the tariffs are there.
08:54But the functionary-based rhetoric is not there.
08:55I'm going to interrupt you because I want to go into the – I want us to talk more in depth about that exact point.
09:01But before we talk about it, I just want to get Rémy Bourgeot's reaction to the clip of Donald Trump that we heard.
09:08How do investors take it when they hear the president of the United States say,
09:11Congress doesn't matter, I'm the one who can negotiate?
09:15Well, I think there's really a need to reshuffle the global trading system.
09:21And lots of people are aware of that.
09:23Trump has his very own take on the issue.
09:25And he thought it would be a kind of short trade war.
09:30And it's not going to be the case.
09:32I mean, he wants to show his entering into negotiations with all these countries.
09:37It might be true, and it is true when it comes to a certain number of countries.
09:43But that won't be the case with China.
09:45Yeah, how do European – we've heard the leader of Italy's opposition take exception with Donald Trump bragging about European leaders coming to kiss his behind.
09:57Because saying – because next week, Giorgio Meloni is going to Washington.
10:01Well, it's very different when it comes to Europe compared to China, for example.
10:07I mean, what we're starting to see in Europe is that they really want to find a way to calm the situation and to make huge concessions,
10:17especially when it comes to the military, to our armament, where there were all these talk of improving self-reliance in Europe.
10:28Also, when it comes to technology, the digital industries.
10:33And there's quite a great deal of disagreement also within the European Union.
10:37France was more in favour of putting that really on the table to how digital giants are being handled in Europe and taxation in particular.
10:49But when you hear two leaders in Brussels, it's a bit different.
10:52They're more really going to that direction of accepting lots of claims that Trump has made.
11:01All right.
11:04Just a final word on this point.
11:06Nicholas Vinokur, European investors, what do they think when they hear Donald Trump saying,
11:13I'm the only one who can negotiate?
11:19European investors are a hostage of a situation that he has created.
11:25And the position of the investors is to want this to stop and want the tariffs to go away.
11:32But I've got to take exception with something that was said just before.
11:38I don't agree with that assessment of the situation.
11:42Europe has been pretty unified.
11:44One, in embracing the defence ramp-up as a response to Trump's sort of abandonment of Ukraine.
11:54And there has also been a united front on trade.
11:57We have hit back today against Trump.
12:00The strategy, as I hear it from diplomats in Brussels,
12:04is to wait a little bit and let the market chaos soften up the Trump administration.
12:10If this keeps going, it will pile pressure on him,
12:13and the Europeans will return with further retaliation against the tariffs.
12:20The idea now is to try to negotiate, is to try to find a deal.
12:26But from everything I've heard here,
12:28Europe is fully prepared to come back with another round of retaliatory tariffs
12:34if there is no room for negotiation.
12:37I don't think that the division is prevailing here.
12:40Of course, we've got our usual suspects.
12:41Hungary voted against the first round of retaliation today.
12:48That's no surprise.
12:49And Georgia Maloney has been sliding away from the European mainstream
12:53ever since Donald Trump got back into office.
12:56And she'll try to go there and do what she can.
12:58But there's no guarantee she'll obtain anything from Donald Trump.
13:02There's been no interest in any kind of concession to the EU.
13:06And I think the Europeans are going to take stock and not act in a knee-jerk way,
13:11but they will react over time if there's just no deal to be made with him.
13:15All right, we're getting urgence coming in.
13:17And the U.S. president speaking, saying he's going to suspend for 50 days
13:23some of these taxes outside of China.
13:30When it comes to China, though, raising them to 125 percent.
13:36Again, to keep score, it was 104 percent tariffs when the day began.
13:41Beijing responded with 84 percent.
13:44And now Trump taking it to 125.
13:47And Tony Kerrigan has more.
13:52Faced with a 104 percent levy on all of their exports to the United States,
13:57China refuses to be intimidated.
13:59The Chinese people's legitimate right to development is inalienable.
14:06China's sovereignty, security and development interests are inviolable.
14:10We will continue to take firm and forceful measures to safeguard our legitimate rights and interests.
14:16But Beijing knows very well that without the American market,
14:19they will need to form new relationships with new markets.
14:22Why not the EU?
14:24A 27-state customs union also reeling from new Trumpian tariffs.
14:30A 20 percent levy on all EU products as of Wednesday,
14:33in addition to the 25 percent on cars, steel and aluminium already in place.
14:39As the bloc prepares its own retaliation,
14:42Brussels are also advertising their contacts with Beijing.
14:45President von der Leyen recalled the urgency for structural solutions
14:50to rebalance the bilateral trade relationship
14:53and ensure better access for European businesses,
14:56products and services to the Chinese market.
14:59But the EU are wary of increased trade with China,
15:03conscious that an inrush of cheap Chinese products
15:05could threaten whole industries even more so than the US tariffs.
15:09With this in mind, the bloc implemented a 35 percent levy on Chinese EVs in 2024,
15:17a year in which the European Commission opened several investigations into Chinese products.
15:22All right, so a difficult dance for the Europeans in the middle.
15:25And again, breaking news as we're speaking with Donald Trump at the same time,
15:30raising tariffs again for China and also announcing a 90-day pause on reciprocal tariffs
15:36for all but China.
15:38John Whitaker, the stock market is surging as a result.
15:44Earlier, you said that even if you reversed course,
15:49that's not going to repair the damage.
15:52Your thoughts after this announcement of a 90-day pause for all nations except China?
15:59Well, that's today's news.
16:01What about tomorrow's news?
16:02Is there going to be a reversal again?
16:04Please, let's not do knee-jerk reactions all the time to whatever Trump says.
16:08It's a complete waste of space.
16:10Don't second-yes Trump.
16:12Let's cool it.
16:12Wait and see what happens a bit.
16:14The worst thing we can do is we'll get excited about it
16:17because the business relies on certainty,
16:20a view of the future that can allow them to make proper decisions.
16:26Just cool it.
16:27Do nothing.
16:28Relax.
16:29Let's not do anything knee-jerk here.
16:31And I want to point out also that Trump's antics will very soon become pretty unpopular
16:39amongst the American populace.
16:41You know, only on the BBC radio this morning we heard that Trump was boasting about the fact
16:47that the tariffs are bringing in $2 billion extra to the U.S. Treasury per day.
16:53You know, that's one of the motives he had for putting tariffs on it,
16:56helping help his budget.
16:58Well, fine, that money that he's getting in, that $2 billion,
17:03is actually taxed from the American people or American businesses.
17:08They're quite quickly going to come to realize what this is all about.
17:11Why should we pay Trump to have this trade war,
17:16which is going to cause us a load of trouble and cost us a lot of money at the same time?
17:20It's got to come home to them soon.
17:22All right. Advice there from John Whitaker, not to react every time Donald Trump opens his mouth.
17:29Markets, though, are reacting.
17:30The dollar is surging.
17:32Wall Street is surging.
17:34Rémy Bourgeois, you agree with John when it comes to this 90-day moratorium,
17:38that it could all change again tomorrow?
17:40Yeah, we are in a regime of very high volatility when it comes to markets.
17:46And you can't read too much into all these announcements, which are mixed with rumors.
17:50And I think it's really important to focus on the long-term outlook, the long-term negotiations.
17:55For example, when it comes to Europe, Europe has a large trade surplus over the U.S.
18:03So there are different ways to somehow rebalance that.
18:06You can either increase exports, I mean imports of U.S. goods in other sectors, for example,
18:13where we are already extremely dependent in goods and services,
18:17especially when it comes to the digital sector services in particular, also in armaments.
18:25And on the other side, Europe and Germany in particular has a very large trade surplus in other goods like cars in particular.
18:34So I think the best way, and that's what should be discussed, is to decrease those exports and to invest more in the U.S.
18:42That's really one avenue to rebalance trade.
18:46But what is going to happen, I think, is more to increase dependencies.
18:51And Europe is also extremely dependent, over-dependent when it comes to some sectors like U.S. digital giants and armaments.
19:03And I don't think there's so much agreement in Europe because clearly you have different statements on that front.
19:09It's absolutely not about Hungary.
19:10I mean, there's always the same game on that.
19:13It's a different story.
19:15But I think we shouldn't confuse the short-term announcements and this kind of, you know, the trade war rhetoric
19:21and also longer-term negotiations that are much more important in the end,
19:26even though, of course, all this market chaos is much more focused on all the short-term announcements.
19:33Again, Zongyang Liu, 104% tariffs jumping to 125% tariffs that Trump is slapping on China since this program began.
19:45Your thoughts?
19:46I think this speaks to the nature of President Trump's willingness to use tariffs as a threat.
19:59But again, I do not anticipate the Chinese President Xi Jinping comes out and say anything about it.
20:08The role of the president in China is not to be a dealmaker.
20:12And on top of that, I think in terms of the level of competitiveness of Chinese exports,
20:19I talked with a lot of Chinese manufacturers.
20:22What they are afraid of is not tariffs.
20:26With rising tariffs, what they can do is to try to reduce their cost input.
20:32Now, this would have some costs.
20:34And potentially, this would also force some industry consolidation inside China,
20:39potentially would lead to some rising unemployment.
20:43And it might also lead to some Chinese manufacturers trying to shift more of their productivity facilities overseas,
20:53trying to mitigate the impact of sanctions.
20:55And sorry, trying to mitigate the impact of tariffs.
20:58A lot of this put pressures on the Chinese economy.
21:01But I would also emphasize that the Chinese government has already signaled their willingness to front-load economic stimulus measures.
21:11They wanted to use a relatively progressive, but progressively active monetary policy and fiscal policy,
21:20trying to do the necessary stimulus they need to, to stabilize the Chinese economy and to boost domestic consumption.
21:29And just very briefly on that, what you just said, how much could unemployment rise in China?
21:36Right now, the Chinese unemployment has been relatively stable.
21:40Overall, unemployment rate has been stable around 5%.
21:44But youth unemployment rate is something that people are watching,
21:48because China does have a lot of college graduates every year.
21:53And as a way to address this issue, President Xi Jinping has talked about encouraging Chinese youth to go to join the rural rejuvenization program.
22:06He also encouraged Chinese youth to be ready to eat bitterness and to toughen up.
22:14But then he also encouraged Chinese private business earlier this year to call on them to create more jobs.
22:24So from that perspective, I do worry the youth unemployment aspect of it.
22:29And despite the Chinese National Bureau of Statistics changed the way that they measure youth unemployment,
22:36but roughly some Chinese academics estimated that the real level of youth unemployment could be as high as over 20% or 30%.
22:47Interesting, John Whitaker, that Song Yang was mentioning there,
22:52that one of the ripple effects of this trade war could be that there could be more Chinese goods flooding into other markets.
23:02And one of the questions that economists disagree about is, are we headed for inflation or a period of deflation?
23:11Oh, hang on. You've got two questions in there.
23:14The first one about China.
23:15A few people are saying that actually Trump's actions are a gift to China,
23:20because it makes Europe look more favorably on China.
23:24We've been rather saying we shouldn't be dealing with China for security reasons and other reasons.
23:29But now with America sort of going towards isolationism, it makes a motive there for Europe to work much more with China.
23:37And China will be delighted to do more business with Europe.
23:40So perhaps it's a win from that point of view.
23:43Just getting on to your inflation question.
23:46Yeah, I'm sure in the United States we can see short-term inflation.
23:50That's why the Fed is very reluctant now to be reducing interest rates,
23:54which is another problem which will come home to the American people in due course.
24:00Just one other point I want to make, actually, if I may, in response to Remy Bourgeois' point there.
24:06He seems to be striving for the European Union to help in reducing the bilateral tariff.
24:12Can I say a word or two about this?
24:14Sure, go on.
24:15The point is that Trump has been putting these bilateral tariffs against many other countries as a thing that has to be addressed.
24:28He says all the other countries have been ripping him off.
24:30Well, the other side of that coin is the fact that the American currency, the dollar,
24:36is being used and held by other countries in the world.
24:40And that's the other side of the trade deficit, is the capital account surplus,
24:45which means dollars are used all over the world.
24:48And dollar then has the financial clout, the hegemony of the financial markets,
24:54which I think Trump would be rather loath to lose.
24:57You can't have it both ways.
24:58You either have trade deficits and a strong dollar and the influence that that has over the financial markets,
25:05or you don't have either of them.
25:07So, at some point, that must come home to people as well.
25:11Nicholas Vinokur, at this point in time, should Europe expect inflation or deflation?
25:17And how do they handle China?
25:20We saw in that report earlier, there's still a lot of arguments between the EU and China,
25:25particularly when it comes to things like tech and electric vehicles.
25:30Well, I think it's not very complicated when it comes to tariffs.
25:38They are inflationary.
25:41When those tariffs are imposed, that's an automatic increase on the items that are tariffed.
25:49So, in the short term, definitely this is bad for consumers.
25:53There's just no two ways about it.
25:56It's pretty simple, and the idea that we're transferring wealth from the markets
26:02and from boomers and pensioners into the hands of young workers is really a stretch
26:07because even the most conservative or the most optimistic scenarios say,
26:12you're not going to bring back manufacturing jobs.
26:14It will take years to build a factory.
26:17I'm going to interrupt you for a second.
26:19There's apologies, Nick, because we're going to cross to Washington
26:23and listen to the U.S. Treasury Secretary, Scott Besson.
26:27As I told everyone a week ago in this very spot,
26:33do not retaliate and you will be rewarded.
26:37So, every country in the world who wants to come and negotiate,
26:41we are willing to hear you.
26:44We're going to go down to a 10% baseline tariff for them,
26:49and China will be raised to 125 due to their insistence on escalation.
26:58Thank you for doing this.
27:01Let me ask you three quick things.
27:03I'm going to take clarity because the markets are open and they're wondering.
27:06First of all, Mexico and China, are they part of this 10% universal?
27:10Well, China, no, China.
27:13Mexico and Canada.
27:13Mexico and Canada, are they part of the 10%?
27:15Yes.
27:16Okay.
27:16Second, given then that you have the rest of the world essentially calling it,
27:20it's not China.
27:21Isn't this now just all about China?
27:24Well, it's about bad actors.
27:26And, you know, what we will see is some of the very early countries are China's neighbors.
27:33We're going to see, I'm seeing Vietnam today, Japan's at the front of the queue, South Korea,
27:39India.
27:40So, you know, we will see.
27:42And as I've repeatedly said, and President Trump has been saying it for years,
27:47China is the most imbalanced economy in the history of the modern world,
27:51and they are the biggest source of the U.S. trade problems.
27:55And, indeed, they are problems for the rest of the world
27:59because what we've seen is that as the U.S. announced the tariff wall last week,
28:05many of those goods have already started flooding into Europe.
28:09So, as you see it now, this trade war is China versus the rest of the world?
28:14Well, I'm not calling it a trade war,
28:15but I'm saying that China has escalated,
28:19and President Trump responded very courageously to that,
28:24and we are going to work on a solution with our trading partners.
28:29If I could just, excuse me,
28:31excuse me, Raquel,
28:33if I could just add to what the Secretary said,
28:35many of you in the media clearly missed the art of the deal.
28:39You clearly failed to see what President Trump is doing here.
28:42You tried to say that the rest of the world would be moved closer to China
28:46when, in fact, we've seen the opposite effect.
28:48The entire world is calling the United States of America not China
28:52because they need our markets, they need our consumers,
28:55and they need this president in the Oval Office to talk to them.
28:58And that's exactly why more than 75 countries have called,
29:01because the United States of America is the best place in the world to do business.
29:05And as the president has shown great courage, as the secretary has said,
29:08in choosing to retaliate against China even higher.
29:11Elena, go ahead.
29:12Hi, thank you, Treasury Secretary Besson.
29:14Can you explain more of the decision-making on what feels like a reversal here?
29:18I mean, just, these went into effect less than 15 hours ago, these tariffs.
29:22Why the pause now? What led to that?
29:25No. Again, President Trump created maximum negotiating leverage for himself.
29:30And which tariffs went into effect 15 hours ago?
29:33The ones that we have lowered went into effect a week ago.
29:37They were announced a week ago, and we have just been overwhelmed, overwhelmed by the response from mostly our allies who want to come and negotiate in good faith.
29:49So we are expecting them to come with their best deal.
29:53As I said a week ago today, don't retaliate.
29:57Hold your ground.
29:58Let's see what happens.
29:59And China kept escalating and escalating, and now they have 125% tariffs that will be effective immediately.
30:08Mr. Secretary, thanks so much for doing this.
30:12The 90-day pause when there were some tariffs, is that because of the whiplash that we've been seeing across the financial markets?
30:18How much was, you know, what we saw in the stock markets, you know, a part of this decision?
30:22No, it's because it's going to, because of the large number of inbounds, we've had more than 75 countries contact us.
30:30And I imagine after today, there will be more.
30:33So it is just a processing problem.
30:36Each one of these solutions is going to be bespoke.
30:40It is going to take some time.
30:42And President Trump wants to be personally involved.
30:45So that's why we're getting the 90-day pause.
30:48Mr. Secretary, there was a tweet that U.S. Secretary left before the Oval Office of the President talking about this.
30:55Can you talk about what that conversation was like and what you guys said before and nothing about the U.S. decision?
31:00Look, it's all the President's decision.
31:03And we were, the President had a level in mind to raise the China tariffs.
31:11And then he had the three-month, essentially, the three-month pause in mind.
31:17And we were discussing the exact wording.
31:20Mr. Secretary, there's a whole other conversation.
31:23Sorry?
31:23Mr. Secretary, there's a positive and right.
31:25Of course.
31:25The President's decision.
31:26It was the President's decision.
31:28It was the President's decision to wait until today.
31:31And again, as I've said in the past, no one creates leverage for himself like President Trump.
31:37Mr. Secretary.
31:38What does the President want to see by this, I think it's July 9 deadline, to keep things positive?
31:46Is it just trade barriers coming down, or is it more than that?
31:49Well, these are trade negotiations.
31:53But if countries want to come and offer other things, you know, I talked about yesterday that we are thinking about a big LNG project in Alaska that South Korea, Japan, Taiwan are interested in financing and taking a substantial portion of the offtake.
32:14But again, in essence, that is trade, because it will decrease the trade deficit that we have with those countries.
32:25So everything's on the table.
32:27Mr. Raquel, go ahead.
32:28Secretary, a clarification on the pause.
32:31What happened to those countries who just had a 10% baseline tariffs, like Brazil and others?
32:36Are they still going to have this 90 days pause?
32:39Because you were saying that there will be a 10% for others.
32:43So what happened to those who just had a 10%?
32:45Yeah, that's going to remain.
32:47Mr. Secretary.
32:48And do you call this an embargo to China?
32:51Pardon?
32:51Do you call this an embargo to China, a trade embargo?
32:54Well, I'm not sure what you mean by the word embargo.
32:59100, 125% tariffs, like those, and then impose 84%.
33:06Is it an embargo?
33:08Well, look, it's China's decision that we have the deficit with them.
33:13They sell us almost five times what we sell them.
33:16So, again, I think it's an own goal by China.
33:20Mr. Secretary, Meredith.
33:21Mr. Secretary, does this signal that you're confident that you're going to be able to strike a satisfactory deal with all these 75 nations that approach you?
33:30It signals that President Trump cares about trade and that we want to negotiate in good faith.
33:37And, as I said, each one of these is going to be a separate, bespoke negotiation.
33:44So, we are confident that, having seen the other side of where this could go, and it was like I said last week, the market didn't understand those were maximum levels.
33:58The countries can think about those levels as they come to us to bring down their tariffs, their non-tariff trade barriers.
34:05We're going to discuss currency manipulation, subsidy of labor and industry.
34:10Mr. Secretary, will the pause also apply to the sectoral tariffs that the President has announced, pharma, lumber, anything else?
34:20No, it's on the reciprocal table.
34:22So, those will still be coming here soon, right?
34:23Correct.
34:24Mr. Secretary, Andrea, go ahead.
34:27Mr. Secretary, I want to ask you about what you're doing here.
34:33So, the market is reacting crazily, right?
34:36I haven't seen it.
34:38Do you think that this group is going to change and calm down the market reaction?
34:44What?
34:45Do you think the markets have tanked, right?
34:47You know, there's been a lot of volatility in the market, not just in terms of stock markets, but also in terms of stocks.
34:55So, will this move in your mind to anticipate that this is going to calm the markets again?
35:00Well, I think what we've seen, I think the willingness by more than 75 countries to come and negotiate, I think now the market understands that everything they saw last Wednesday was a ceiling, and now we have a 10 percent temporary floor.
35:17And I think the market, my 35 years in the market, I always wanted certainty, so I think we've got more certainty.
35:25But, Mr. Secretary, why do people assume this is the last floor?
35:31The President began this morning saying, be cool, five hours later, he announces a new policy.
35:36Why will investors in the market assume that this is it?
35:38Because, again, as I said, we've given 90 days, and the only certainty we can provide is that the U.S. is going to negotiate in good faith, and we assume that our allies will too.
35:52And in terms of certainty, we will see what China does.
35:57But what I am certain of, what I am certain of, is that what China is doing will affect their economy much more than it will ours, because they have an export-driven, flood-the-world with cheap export models, and the rest of the world now understands.
36:15Because when we put up our tariff wall, those exports were already flowing to the rest of the G7 and to the global south.
36:23Mr. Secretary, Mr. Secretary, how much of this decision was driven by the bond market cratering overnight?
36:30What is happening with China selling their bonds?
36:34I have nothing that says that, and we actually had quite a good 10-year auction today.
36:39And all this was, again, this was driven by the President's strategy.
36:43He and I had a long talk on Sunday, and this was his strategy all along.
36:49And that, you know, you might even say that he goaded China into a bad position.
36:56They responded.
36:58They have shown themselves to the world to be the bad actors.
37:01And we are willing to cooperate with our allies and with our trading partners who did not retaliate.
37:09It wasn't a hard message.
37:11Don't retaliate.
37:12Things will turn out well.
37:13Mr. Secretary, these negotiations with these 75 countries, how long will that take?
37:22Will it be a matter of weeks?
37:24Will it be a matter of months?
37:25Do you expect financial markets?
37:26Live remarks by the U.S. Treasury Secretary Scott Besson after Donald Trump's reversal, of course,
37:32a 90-day moratorium for reciprocal tariffs on all nations.
37:39There's a caveat, however, that 10 percent base universal tariff, that is still on, says Besson,
37:47speaking to reporters for all nations, all nations except one, China, still on 125 percent tariffs.
37:57Nicholas Winneker, you had the floor when the U.S. Treasury Secretary started speaking from the White House grounds.
38:05Your reaction to what you just heard?
38:09You know, they're presenting it as some kind of great victory that all these countries have come begging.
38:19Effectively, what they've given into is the market pressure.
38:22Another day of declines in the markets would be devastating in the U.S.
38:28And more and more people are coming out.
38:31You had Meghan Markle just now coming out and saying, this is going to put us in a recession.
38:36And even if he lifts the tariffs on all the other countries, the tariffs on China are going to hurt the United States.
38:44That's more costs in grocery stores and buying consumer goods.
38:49There's just no way around that.
38:51But so it seems that the takeaway for all of America's trading partners is that this is completely unpredictable.
39:03It follows the whims of one person.
39:05It doesn't seem to follow any particular logic rather than than than just sort of pushing for things and extracting leverage.
39:14And, you know, the EU has been quite right to sort of wait and see for for a while.
39:21But the EU did come to Donald Trump with an offer just the day before yesterday.
39:26Ursula von der Leyen offered Trump a zero for zero tariff offer.
39:32And that was rejected the very next day.
39:35So that contradicts what we've just heard from from Mr. Besson.
39:39You know, the takeaway from this administration is it's unpredictable.
39:44It's chaotic.
39:46It doesn't provide security and predictability to investors.
39:52Zeng Yang Liu, when you heard Scott Besson say this is going to hurt China a lot more because they have an export driven economy.
39:59What was your reaction?
40:00I find that the secretary Besson is right that China does have an export driven economy.
40:08But at the same time, the Chinese government has also this time been putting a lot of emphasis to boost domestic household consumption.
40:18So from this perspective, I do agree with Nicholas point in terms of rising tariff and hurting the United States.
40:24Part of the reason is because if the point of the tariff is to rebuild American manufacturing, to boost America's export competitiveness, and this tariff would not achieve that goal.
40:36Part of the reason is because even if manufacturing companies are willing to invest in the United States and build factories, that is going to drive up labor costs, land costs.
40:50And on top of that, rising tariff on China is going to make inputs to manufacturing activities in the United States more expensive.
40:59So a lot of this inflationary pressure is not going to help U.S. export, even if manufacturing can be brought back to the U.S.
41:07And perhaps the lead buried in what we just heard, John Whitaker, the 10 percent universal tariff on every country.
41:14That is, again, still on the table.
41:17So 10 percent tariffs are huge, plus tariffs for specific industries, including some that haven't even yet come into effect, like pharmaceuticals.
41:30It's all still there, which isn't good.
41:35We've all had small tariffs already.
41:38I mean, Europe and Britain have got small tariffs of about three to five percent or something.
41:44So this is certainly an escalation on that.
41:46And it's bad news for, I suppose, guys like me who really sort of think that free trade is a great idea.
41:52Can I just make a comment on Scott Bessman while I'm here?
41:55You know, he's talking about these countries coming to negotiate.
41:58What's negotiation?
41:59It's talking amongst yourselves to try to sort something out.
42:04He doesn't want them to come and negotiate.
42:06He's asking them to come and beg.
42:09You know, that's exactly what they're trying to do.
42:11This Trump administration loves that kind of behavior by all the foreign leaders, heads of state coming over to beg for Mr. Trump.
42:20That's just what he loves to do.
42:22That's his modus operandi.
42:24It doesn't make for good business.
42:25It doesn't make for prosperous trade, doesn't make for welfare for anybody in the world, actually.
42:30But that's the way that Trump works, unfortunately.
42:33But let's not call it negotiation, please.
42:35Again, Rémy Bourgeois, if you're an investor, I say an investor, and you watch what we just saw with, I guess, the Treasury Secretary in the role of the good cop and the White House spokesperson in the role of the bad cop with a more muscular rhetoric.
42:51What do you say to yourself?
42:52Well, I think there's some relief that the situation has somehow clarified.
42:58Would you, if you're a French investor, would you invest your money in the U.S. right now?
43:02Well, I don't know, but I'm very worried about this situation.
43:06I mean, it's more than the trade war.
43:08I mean, it's clarified now.
43:09They're really targeting China and trying to take allies on board.
43:15But it's more than the trade war.
43:16It's really an embargo now when you see such high tariffs.
43:20And it's not just about the inflationary impact.
43:23It's really going to disrupt supply chains.
43:27So it's really going to have a very destructive effect on the world economy.
43:33On the other side, since other countries, especially in Asia, are exempted, China will have a way to redirect its exports to the U.S.
43:43via those countries, which it has already done in the past.
43:46But there's really clearly an escalation, a political and economic escalation between China and the U.S.
43:53And there's no real end in sight.
43:55And also, China has diversified a lot over the past few years.
43:59It has increased in terms of sophistication.
44:03And it's far less reliant.
44:04I mean, exports to the U.S. are still extremely important for China.
44:08But my main worry is it's going to last.
44:12We're almost out of time, Nicholas Vinegar.
44:14But again, we heard that phrase repeated several times.
44:19It's all the president's decision.
44:22Just very briefly, is it all the president's decision when it comes to the U.S. position?
44:27Are there other players that can temper Donald Trump?
44:35Well, it would seem not.
44:38We've heard from EU officials that Mr. Lutnik, Mr. Greer don't have much influence.
44:46And that this is really being decided by Trump and Peter Navarro.
44:51And maybe that's it.
44:53I think they are sensitive to the extreme volatility on the markets.
44:57Those are their friends.
44:58Those are their rich friends saying, hey, Donald, you've got to stop this somehow.
45:02And that's what we've seen today, really sooner than expected.
45:05Just last night, Donald Trump was telling people to hold steady.
45:08Everything is going to be fine.
45:10And he's kind of given in with this pause today as people come in.
45:16But indeed, that's what the view is here.
45:19This does sit with Trump and with his really inner Titus circle.
45:24And there's not much influence anyone can have on him.
45:28All right.
45:28We'll continue to follow it.
45:29Nicholas Winneker, many thanks for joining us from Brussels.
45:33I want to thank John Winneker for being with us from Lancaster.
45:35Zongyang Liu in New York City.
45:37Rémi Bourgeau, thank you for being with us here in the France 24 debate.
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