00:00Well, let's bring in John Glenn, the Chief Economist at the Chartered Institute of Procurement and Supply.
00:05John, welcome, good to see you.
00:07First of all, your reaction to this Mexico tariff story?
00:13Yeah, I think the context that you placed it in is pretty much on the button, as it were.
00:18I think that Mexico are looking towards the near-term renegotiation of the U.S.-Mexico-Canada free trade agreement,
00:28obviously Trump is therefore putting pressure on them to look towards North America rather than China.
00:35But interestingly, they haven't talked about how they're going to treat Chinese investments in Mexico
00:44and whether those goods will still be able to trade freely into North America.
00:49Mr. Trump isn't just pressuring Mexico, though, is he?
00:53It's reported he's also trying to pressure Europe to increase tariffs on China.
01:00Absolutely. I mean, if we look at the world where increasingly we're seeing a battle for what you might want to call economic hegemony,
01:14there is definitely a battle between North America and China at the moment.
01:18Your previous piece looked at the Chinese looking towards Europe, looking towards United Kingdom, looking to seek to build trading relationships there.
01:29At the same time, Trump is trying to, in a much more aggressive way, force the Americas to look towards the U.S.
01:41and indeed trying to drag the EU towards North America.
01:48Whether these, I mean, it might be a bit far to call it bully-boy tactics, are likely to work, only time will tell.
01:57Well, let's look at the hard figures as to whether or not this is going to work or not.
02:01I mean, let's just drill down into one sector.
02:04Let's just for a moment look at Chinese electric vehicle sales in Europe.
02:08I think Tesla sales are down something like 40% in Europe, while Chinese BYD sales are tripled.
02:19The bully-boy stuff doesn't seem to be working, does it?
02:23No, I think there is greater alignment between Europe and China.
02:29I mean, if we're looking at BYD, I live in Stockport in Manchester.
02:34I drive out of Stockport on the local motorway.
02:37I look at my Mercedes dealership and then I nearly crash my car because BYD are being sold out of a Mercedes dealership.
02:48And I think that gives you an instance of how close Europe is to China, as opposed to the stance that Donald Trump is taking.
03:00John, how much of this is the old story that the consumer is king?
03:04We don't really like to be told which car to buy, do we?
03:08We want the best deal.
03:09And that seems to be what we're doing here, regardless of the political steer.
03:15Absolutely.
03:18And we've spent the last 40 years in a sort of post-Acherite, post-Reagan economy,
03:25creating that notion that the consumer is at the centre of everything that we do.
03:32Our markets are based, oh, sorry, our wealth is based on consumer expenditure.
03:37Our wealth is based on delivering to consumer references.
03:40And quite perversely, we've taken the Chinese economy and emerging economies out of protectionist stances.
03:49We've told them to open up their economy.
03:52We've told them to become competitive and innovative.
03:55They've taken that mantra, as it were, and we've grown our global economy.
04:00And now we seem to have an American president who's hell-bent on taking us back to where we were in the 1930s.
04:10John, good to see you. Thanks for your time.
04:13John Glenn, Chief Economist at the Chartered Institute of Procurement and Supply.
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