Visit our website:
http://www.france24.com
Like us on Facebook:
https://www.facebook.com/FRANCE24.English
Follow us on Twitter:
https://twitter.com/France24_en
Category
🗞
NewsTranscript
00:00Back to our main story now and the trade war between the U.S. and China.
00:05For more, we can speak to Moshe Lander, senior lecturer at economics at Calgary's Concordia University.
00:10Hello to you, Moshe.
00:12When it's all said and done and the textbooks are writing about this trade war, what's the title of that chapter going to be?
00:20A stupid period in human history and self-inflicted at that.
00:24It was completely avoidable.
00:26This should never have happened.
00:27And I don't know how to state it clearly enough.
00:30This is just bad news all around.
00:32And that seems to echo some of the sentiments we're hearing out of Beijing today that are questioning the strategy or the reasoning that's going on in Washington.
00:43Yeah, look, China's not innocent in all of this.
00:46But at least in this particular case, they were provoked and their response was fully foreseeable.
00:53It's not like China was just going to sit there and thank the Americans for their tariffs and stand by and say, I hope we can get rid of them.
01:00It was it was, of course, going to escalate into a trade war.
01:02And I have to feel that the White House knew that it was going to escalate into a trade war.
01:06So their response is measured given the circumstances, but they can afford to play a long game and sit this one out.
01:16They have the nationalist fervor that we've seen before when they feel that they've been wronged.
01:23And that's going to surface here again.
01:25And if they have to wait this out or escalate alongside the U.S., they'll be happy to do so, even at the expense of economic growth for them.
01:31So so in a showdown between the world's two biggest economies, who blinks first?
01:35Is it going to be the U.S.?
01:38It is going to be the U.S.
01:39And part of the reason is because China can play the long game.
01:42But part of it is because the Americans have already blinked.
01:45And so if you were to sit down at the negotiating table with them right now, why would you concede?
01:50You saw what they did to the stock market.
01:51You saw what they do to the global economy.
01:53You saw how enraged people became.
01:55And then when they realized that this was a mess of their own doing, they backed away.
01:59Even though they said they're going to give it 90 days, they can keep rotating those 90 days for another 11 times until Trump is out of office and say, well, we never got around to it.
02:08I would never negotiate at this point and concede on anything, especially if you're a large economy like China, where you can afford to take that position.
02:15And at which point are we genuinely concerned about a global slowdown?
02:20Are we already there or is it going to be a little bit later?
02:24It has to last a little bit longer, right?
02:28Just because we've had this going on now for a couple of weeks doesn't mean that that's going to tank all of 2025.
02:33It's 52 weeks in the year.
02:34But there is going to be a point where for China and the U.S., they are probably for most of the advanced economies, either number one or number two in terms of export markets and number one or number two in terms of import markets.
02:46And certainly here in Canada, they are number one and number two.
02:49So the longer that their trade war lasts, even though Canada might be on the outside, even though the EU might be on the outside, the more it's going to start to drag because we're going to lose major markets for our goods and services.
03:01And we're going to have a more difficult time acquiring goods and services from our two main partners.
03:06Yeah. And in the U.S. this week, we saw a lot of anger about how this was all handled.
03:12Some Democrats saying it looked like it could have been market manipulation.
03:17Others saying the trade secretary was not on the same page with the president.
03:20The president seemed to be announcing measures on social media the trade secretary wasn't even aware of.
03:29You can't be surprised, though, right?
03:30That seems to be the way that Trump runs his business.
03:33Certainly going to be the way that he runs his government.
03:35I'm not surprised either, though, to hear that the Democrats are upset.
03:38Of course, they would be upset.
03:40What's more interesting to me is to see that now there are some mainstream Republicans that are starting to speak up, saying, I don't think this was handled particularly well.
03:47If his own party, who's afraid of him, is starting to get the confidence to speak up, that's where it becomes a worrying sign because their unconditional support of him is what allowed him to do this in the first place.
03:58But now that they're seeing the consequences, they might want for a little more oversight.
04:02And we've started to see Congress push back, saying maybe we should take back control of tariffs, which is really a congressional decision, and not allow the president to have total control over how you set the trade agenda.
04:14But, yes, it does look very suspicious of the way that he handled things, and there certainly seems to be a lack of communication from all ends of the White House.
04:23We saw that in the press conference when the repealing of the tariffs were announced.
04:28That poor man that was standing out front in the West Wing looked like he was shoved out there rather than going out there willingly.
04:34And for those of us who might not be financially savvy, are there any thresholds or indicators we should be looking for, whether it's from U.S. Treasury yields or anything, about that are sort of like major red flags, a certain point we do not want to get to?
04:50Well, the thing is that I don't think that there's any point that we cross that we can't come back from.
04:56Remember that we've had COVID, we had a financial crisis, we had a dot-com crash at the turn of the century, and, of course, we had a Great Depression that was 100 years ago.
05:04And every time we come back, so even if inflation numbers start to rise, even if unemployment starts to rise, GDP goes down, the stock market falls, all of these things will eventually reverse themselves.
05:15The issue, then, is how fast can it bounce back?
05:17And I think that the longer this lasts, the harder it is to bounce back.
05:21But it will come back eventually.
05:23We, I guess, just have to play the long game ourselves.
05:26All right, Moshe.
05:26Thank you so much for your time.
05:27Moshe Olander joining us from Calgary.
05:29Moshe Olanders
05:48Moshe Olander
05:53Moshe Olander