Will Tariff Exemptions Ease Trade Tensions?

CGTN Europe

CGTN Europe spoke to Santosh Rao, Head of Research and Partner, Manhattan Venture Partners.

Transcript

00:00Santosh Rao is head of research and a partner at Manhattan Venture Partners.

00:06He joins us now. Hello, Santosh.

00:07So this decision to exempt smartphone and computer imports from the tariffs,

00:12even items from China, does it give you a glimmer of hope?

00:17Good afternoon.

00:19Well, you know, any reduction in tariff is good news.

00:23The only problem, I was very excited when I first read that thing.

00:26I said, OK, finally, there is some reasonable, some sense into this whole tariff war, tit for tat.

00:35But I just read about 10 minutes ago that Howard Lutnick, the Commerce Secretary,

00:40he said that this is temporary.

00:42There is a review of Section 232 on the semiconductor imports.

00:48So that's the piece that talks about any import that is at risk to the national security.

00:57And they want to review that in a month.

00:59So this is not all clear yet.

01:00It's a near-term excitement.

01:02I guess products in the pipeline, they will not be imposed.

01:06There won't be a tariff on that.

01:08But overall, I think that hammer is still there.

01:11We don't know if he's going to come back.

01:13The string of reversals is bad.

01:15He's been going back and forth.

01:16It's not good for business, not good for planning.

01:19So I think net-net, I think it's OK, but it's not going to really take the market up

01:28because there's still that uncertainty there.

01:30We have to wait a month before they come up with their final tariff plan for semiconductors.

01:37Yeah, and he did say, Donald Trump, that he'd be talking about semiconductors on Monday.

01:41What do you think he could be saying?

01:43Well, he's going to say it's important, but he's making a long statement that, you know,

01:53overall, things need to be done in the U.S.

01:56We need to produce all these things.

01:58We need to start screwing the items and put the machines together, screwing in a sense,

02:06screw the machines together.

02:07So I think that's their ultimate goal.

02:10And that's a far-fetched goal.

02:12It's not going to happen in the near term.

02:13It's going to take 10 years at least before we see that, the on-shoring of everything.

02:19So I think that's where we are.

02:20I think he's going to say, yes, that's a long-term goal, but he's doing it for the sake of,

02:24you know, we have too many important products that we need semiconductors for.

02:28And so I think he's going to say, OK, I'm going to do that.

02:32But in the end, he might continue.

02:34That's the problem.

02:35That unpredictability of, you know, changing his mind, that's the big issue.

02:40Hopefully, it won't be more.

02:42It will stay with exemptions.

02:44And he won't really go forward with all these drastic and very regressive tariff plans.

02:51What's your gut feel?

02:52Do you think that we are going to see a series of climb downs on these tariffs from Trump?

03:00Yes, I expect that because that's the economic sense.

03:04That's the reality.

03:05We need each other.

03:06China needs U.S.

03:07U.S. needs China.

03:09So that's a fact of life.

03:10You can't just turn on and off.

03:12So ultimately, there is going to be some middle ground.

03:16There's going to be an off-ramp for both of them.

03:18There's a lot of nationalism involved, a lot of promises made that need to be kept by Trump administration.

03:25He just got elected on that whole idea of being independent and doing everything and make America first.

03:30So I think he needs an off-ramp.

03:32So let's see if the negotiations go on, if things come on to a point where both are comfortable.

03:38So that's going to take some time, a lot of discussions, a lot of we need to see the impact.

03:44We need the companies to kind of speak up some way or the other.

03:47So I don't know where the pushback is going to come from, but it needs to come, and I expect that to come.

03:54And there's some middle ground, and both countries get an off-ramp to what they're saying so far.

03:59All right.

03:59Thank you so much for chatting to us.

04:02Santosh Rao is Head of Research and a partner at Manhattan Venture Partners.

Category

Transcript

Recommended