00:00Well, Harry Broadman is a former U.S. international trade negotiator, and he joins me now.
00:05Thank you very much for joining me.
00:06Now, President Trump says his first request to Xi Jinping will be to open up China to American business.
00:14From a trade negotiator's point of view, is that a realistic ask, do you think, or is that more just
00:19a political slogan?
00:21Well, I think it's very important that he's raised it.
00:24I think it's sort of both.
00:25I mean, obviously, you know, he wants to get the markets open in a very tangible and concrete way.
00:31On the other hand, I think, thinking about it through a Chinese lens, the opening, of course, has great symbolic
00:38significance.
00:39And I think, you know, it would be really well, do well, if both countries were to agree to open
00:45each other's markets, frankly, you know, on equal footing, more or less.
00:51Now, of course, rare earths appear to be one of Beijing's strongest cards at the moment.
00:57How valuable is the U.S. still to Chinese control of critical minerals and processing, do you think?
01:05Well, quite critical.
01:06I think that, you know, I think the distinction is between, you know, the raw materials and the refining of
01:11the materials, the minerals.
01:13And that's really where I think the negotiations need to focus rather than simply the mining of the minerals.
01:20Because it's the upstream that, you know, gives some value, but it's really the downstream refinement of those minerals that
01:27is commercially important.
01:30What would count as a serious trade outcome from this summit?
01:35And what would be merely cosmetic, in your opinion?
01:39Well, I think for the U.S. side, you know, and Chinese side, the agreement on export controls with very
01:47tangible performance indicators and realistic moves on export controls.
01:53To date, most of those moves have been symbolic.
01:56And I think the markets certainly understand where there's symbolism rather than actual, you know, tangible moves to free up
02:04exports and imports, frankly, on both sides of the ledger.
02:09Now, of course, we'll be looking out for all the press opportunities, the handshakes, the visits to various places, to
02:15the Forbidden City, et cetera, et cetera.
02:17But what should we be looking out for when the summit is over?
02:21There's the joint statement, the tariff schedules, export control licenses or enforcement mechanisms or a little bit of everything.
02:28What do you think we should be looking out for once it ends?
02:32Well, I mean, you know, the body language is important, but really what's most important is what would be in
02:37a communique, what's written down.
02:39And most importantly, not just what's written down, but how will each side measure whether or not they have fulfilled
02:46the obligations that they have made in the document that presumably is agreed upon.
02:51That's been the problem all along between U.S. and China.
02:54But frankly, it's also not unique to China.
02:57You know, having two trade partners agree on very tangible measures and, you know, tick off exactly.
03:04We expect you to export X amount and you will import X amount.
03:09And let's make sure that those happen when they don't have those kinds of tangible indicators.
03:14It just becomes rhetoric.
03:16And I think the market certainly understand when that happens.
03:19And they'll just say, well, this was not much of a meeting.
03:23Briefly, if you will, of course, they last met in 2017.
03:26That was the last time that the U.S. president went across to Beijing.
03:31Since then, of course, we've had the tariff war.
03:34We've had the trade war.
03:35Did that actually achieve anything, do you think, in terms of leverage or disruption?
03:40Or was it just for show?
03:43Well, I think, you know, I think the Chinese sort of saw that, you know, that Trump is sort of
03:48acting in a tangible kind of way.
03:50The problem is, and this is not unique to China, is that the world economy sees that Mr. Trump's, you
03:57know, policymaking says A one day and then B the next day and then C the next day.
04:02And I think the real issue is not what's written down on paper, but whether or not these are measurable
04:08indicators.
04:08And most importantly, I think, given who is in the White House right now, I don't think we've ever had
04:13a president who has been so perpetetic and moving all around.
04:17And one day he says X, the next day he says Y, and the third day he says Z.
04:28Harry Broadman, thank you very much indeed for that.
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