Daybreak Weekend: Trump Inauguration, Davos preview, Tariff Threat

Bloomberg Audio Studios, Podcasts, radio news. 0:00:10.400 --> 0:00:12.960 This is Bloomberg Daybreak Weekend, our global look at the 0:00:12.960 --> 0:00:15.560 top stories in the coming week from our Daybreak anchors 0:00:15.600 --> 0:00:18.000 all around the world, and straight ahead on the program, 0:00:18.000 --> 0:00:21.200 a look ahead to what Donald Trump's campaign promises will 0:00:21.200 --> 0:00:24.360 mean for the US economy once he's sworn in. I'm 0:00:24.440 --> 0:00:25.640 Tom Busby in New York. 0:00:25.920 --> 0:00:28.400 I'm Caroline Hetger in London, where we're looking ahead to 0:00:28.440 --> 0:00:32.040 the annual meeting of the World Economic Forum in DeVos. 0:00:32.280 --> 0:00:35.319 I'm Doug Christner looking at how China is gearing up 0:00:35.360 --> 0:00:37.000 for the incoming Trump administration. 0:00:38.400 --> 0:00:42.440 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.440 --> 0:00:46.160 eleven to three year, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:46.640 --> 0:00:51.800 Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, Syrias, 0:00:51.960 --> 0:00:55.480 XM one twenty one, and around the world on Bloomberg Radio, 0:00:55.520 --> 0:00:57.720 dot Com and the Bloomberg Business app. 0:01:02.320 --> 0:01:02.840 Good day to you. 0:01:02.920 --> 0:01:05.160 I'm Tom Busby, and we begin today's program with the 0:01:05.160 --> 0:01:08.440 inauguration of Donald Trump as President of the US, because 0:01:08.440 --> 0:01:11.280 he officially takes office for the second time on Monday. 0:01:11.720 --> 0:01:13.760 For more on what Trump two point zero means for 0:01:13.800 --> 0:01:17.400 the US economy and geopolitics in general. We're joined by 0:01:17.440 --> 0:01:21.640 Joe Matthew Bloomberg Balance of Power co hosts. Well, Joe, 0:01:22.200 --> 0:01:24.560 mm hmm, Well, let's start with what Donald Trump has 0:01:24.600 --> 0:01:27.760 promised to do on day one of his new administration. 0:01:28.200 --> 0:01:31.240 A lineup of executive orders. What are we going to see? 0:01:31.280 --> 0:01:33.600 Well, it's a long list, Tom, get your sharpy out, 0:01:33.640 --> 0:01:35.520 because he's going to be pushing a lot of paper, 0:01:35.560 --> 0:01:37.880 it sounds like, and you're right. We'll have the inaugural, 0:01:38.000 --> 0:01:40.039 The process will last a few hours. They have the 0:01:40.080 --> 0:01:42.960 parade and so forth, and then Donald Trump moves into 0:01:42.959 --> 0:01:45.000 the Oval office, and he's made a lot of promises 0:01:45.040 --> 0:01:46.880 for day one. It's a little bit difficult to really 0:01:46.880 --> 0:01:50.200 predict exactly what will be involved in those couple of hours, 0:01:50.200 --> 0:01:52.520 but we know there will be a series of executive 0:01:52.640 --> 0:01:56.720 orders eos as they call them here, maybe even exceeding 0:01:56.800 --> 0:01:59.560 one hundred of them. Tom. They'll be aimed at the border. 0:01:59.600 --> 0:02:03.360 We've certainly heard that from Donald Trump on the campaign 0:02:03.400 --> 0:02:06.560 trail and since the election. The President elect is promising 0:02:06.600 --> 0:02:09.160 to shut down the border in his words, and there 0:02:09.200 --> 0:02:10.720 is a lot of talk in Washington a lot of 0:02:10.760 --> 0:02:14.240 reporting that he will invoke Title forty two, that covid 0:02:14.280 --> 0:02:17.120 era rule that was used to close the border in 0:02:17.160 --> 0:02:21.040 his first term, something that the Biden administration lifted. There 0:02:21.080 --> 0:02:24.680 could be executive orders on mass deportation, of course, something 0:02:24.720 --> 0:02:26.960 that we've heard a lot about. As he says on 0:02:27.080 --> 0:02:29.880 day one, whether it takes effect on day one, we'll see. 0:02:30.440 --> 0:02:33.280 But beyond that, we could see maybe some things reversing 0:02:33.520 --> 0:02:37.280 some Biden rules and laws potentially that were passed. They 0:02:37.320 --> 0:02:39.679 want to strip back at least components for instance of 0:02:39.720 --> 0:02:42.880 the IRA the Inflation Reduction Act. And then let's remember 0:02:42.880 --> 0:02:45.840 the war in Ukraine. To Donald Trump had said all 0:02:45.880 --> 0:02:48.120 through the campaign that on day one he could do 0:02:48.200 --> 0:02:50.560 this in the first day, basically with one phone call, 0:02:50.840 --> 0:02:52.320 get them both in a room, and he could get 0:02:52.360 --> 0:02:54.639 it done to end the war in Ukraine, which would 0:02:54.639 --> 0:02:56.800 be remarkable. I'm not sure we should expect that, but 0:02:56.880 --> 0:02:59.880 I would expect to see paper on that and potentially 0:03:00.040 --> 0:03:01.799 announcement of a meeting with Vladimir Putin. 0:03:01.919 --> 0:03:05.320 Oh, that's a full full house, that's one day. Yeah, 0:03:05.320 --> 0:03:08.480 that's right, right. Well, you know, Trump is walking into 0:03:08.520 --> 0:03:13.320 a pretty good economy. We saw just last week resilient spending. 0:03:13.400 --> 0:03:16.799 During December, we have a very solid job market, wages up, 0:03:17.320 --> 0:03:21.720 but conversely stubbornly high inflation. The housing market very troubled. 0:03:21.919 --> 0:03:23.040 You know, I don't know when we're going to get 0:03:23.040 --> 0:03:25.760 out of that. Rates are above seven percent now, a 0:03:25.800 --> 0:03:28.920 lot of income equality, inequality. So what do you think 0:03:28.960 --> 0:03:31.920 Trump is planning? How will he address those issues? 0:03:32.040 --> 0:03:32.720 Well, it's interesting. 0:03:32.760 --> 0:03:35.520 We were listening to Scott Besson, his pick for Treasury Secretary, 0:03:35.840 --> 0:03:38.680 in his confirmation hearing just a couple of days ago, 0:03:39.360 --> 0:03:41.120 and he's going to be the one carrying the message 0:03:41.160 --> 0:03:42.360 on a lot of this. And we've had a chance 0:03:42.400 --> 0:03:44.440 to talk with Scott Bessen, so we do have a 0:03:44.480 --> 0:03:46.680 sense of what Donald Trump wants to do. And it 0:03:46.720 --> 0:03:49.119 begins with, by the way, going back to day one, 0:03:49.200 --> 0:03:51.880 this is going to be likely another executive order where 0:03:51.880 --> 0:03:55.200 Donald Trump says drill, baby, drill. That literally his approach 0:03:55.320 --> 0:03:59.560 to inflation is to get to energy prices. He's had 0:03:59.560 --> 0:04:03.720 a promise to increase specifically crude oil in terms of 0:04:03.760 --> 0:04:07.960 supplies by three million barrels a day, but overall he says, drill, baby, drill, 0:04:08.000 --> 0:04:11.920 will lower energy cost by half. That's a tall order 0:04:11.960 --> 0:04:15.800 and it would likely require a weakened economy to see 0:04:15.920 --> 0:04:18.359 oil and gas prices fall by fifty percent. But he 0:04:18.480 --> 0:04:22.039 sees that with energy being the feed stock for our economy, 0:04:22.040 --> 0:04:24.800 as the conduit to lower inflation. Whether that is a 0:04:24.839 --> 0:04:27.360 real plan, whether it works has yet to be seen, 0:04:27.400 --> 0:04:30.080 because we also know that Donald Trump wants to make 0:04:30.120 --> 0:04:33.040 permanent the so called Trump tax cuts from twenty seventeen, 0:04:33.080 --> 0:04:36.000 and couple that with across the board tariffs. Now, when 0:04:36.000 --> 0:04:39.320 you put that whole picture together, Scott Bessett would say 0:04:39.560 --> 0:04:43.039 that that mosaic is the antidote to inflation. When you 0:04:43.120 --> 0:04:46.360 take each one in a vacuum, most economists would tell 0:04:46.360 --> 0:04:50.000 you that they are potentially inflationary. And the economists that 0:04:50.080 --> 0:04:52.440 we have spoken with have been very skeptical of this plan. 0:04:52.480 --> 0:04:54.920 We're going to find out tom in real time whether 0:04:54.960 --> 0:04:55.719 it works. 0:04:55.480 --> 0:04:59.240 Well, especially those tariffs. And you know, he campaigned on 0:05:00.080 --> 0:05:03.560 punishing tariffs ten to twenty percent, our biggest trading partners, 0:05:03.600 --> 0:05:07.760 Canada and Mexico sixty percent more. You know on imports 0:05:07.800 --> 0:05:11.200 from China. Has that softened? I mean there are reports 0:05:11.200 --> 0:05:14.040 of maybe a slower rollout than ramping up. 0:05:14.200 --> 0:05:16.960 That's right, and that was a bloomberg scoop. By the way, 0:05:17.600 --> 0:05:21.680 interesting when you're running, how the language changes when you're governing. 0:05:21.839 --> 0:05:24.039 It's a different world sometimes when you're dealing with the 0:05:24.080 --> 0:05:26.760 realities and you have world leaders on the phone. We 0:05:26.839 --> 0:05:29.640 certainly know what the reaction has been from Canada, very 0:05:29.640 --> 0:05:33.279 different reaction from Mexico. China's a different matter, and our 0:05:33.320 --> 0:05:36.200 of course, our European allies are too. Everyone's been on 0:05:36.240 --> 0:05:38.840 the phone with mar A Lago, if not actually traveling 0:05:38.839 --> 0:05:41.960 there in person to talk about this. And yes, it 0:05:42.000 --> 0:05:45.239 does seem like there could be a phasing, if you will, 0:05:45.279 --> 0:05:47.480 maybe a couple percent at a time in tariffs, if 0:05:47.480 --> 0:05:51.000 that's what Donald Trump wants to do. The confusion will 0:05:51.040 --> 0:05:54.840 be for the Federal Reserve. How do you forecast anything 0:05:54.839 --> 0:05:57.120 in a world like that, not knowing where tariffs will 0:05:57.120 --> 0:05:59.679 be month to month, quarter to quarter when you start 0:05:59.720 --> 0:06:02.560 fact in the impact it will have on the economy. 0:06:02.640 --> 0:06:05.720 And speaking of the Federal Reserve in his last administration, 0:06:06.080 --> 0:06:10.760 very critical the person he appointed, Jerome Powell, that's right. 0:06:11.520 --> 0:06:14.360 Do you think his tenor do you think what he 0:06:14.400 --> 0:06:17.919 does is going to change? In his Trump two point zero. 0:06:17.680 --> 0:06:20.679 It might be even more aggressive. Keep your eyes on truth, 0:06:20.720 --> 0:06:23.640 social and Twitter or whatever platform he decides. You know, 0:06:23.640 --> 0:06:25.240 we used to wake up every morning to see what 0:06:25.279 --> 0:06:27.800 the policy was based on what was tweeted at two am. 0:06:28.600 --> 0:06:31.719 That may well be the case now. The aforementioned Scott Bessen, 0:06:31.839 --> 0:06:34.240 his likely Treasury Secretary, is the one who floated the 0:06:34.279 --> 0:06:39.120 idea of a shadow FED share, which would potentially kneecap 0:06:39.200 --> 0:06:41.919 the current FED share. I'm not sure that's something that 0:06:41.960 --> 0:06:44.400 would happen, and I'm not sure that Donald Trump will 0:06:44.400 --> 0:06:46.680 have the influence he wants to have on j. Powell, 0:06:46.680 --> 0:06:49.320 but he is certainly going to be a vocal member 0:06:49.360 --> 0:06:51.320 of the chorus here when it comes to interest rates. 0:06:51.480 --> 0:06:54.760 Oh you bet our thanks to Joe Matthew Bloomberg Balance 0:06:54.800 --> 0:06:57.080 of Power co hosts, and a lot to look forward 0:06:57.120 --> 0:06:59.960 to this coming week. We move next to corporate earning 0:07:00.160 --> 0:07:03.520 from the streaming giant Netflix out on Tuesday for more 0:07:03.680 --> 0:07:06.760 on how that company has been impacted by new content 0:07:06.880 --> 0:07:09.840 and it's foray into live sports. Were joined by Getha 0:07:09.920 --> 0:07:15.320 raganathin Bloomberg Intelligence analyst on US Media. Well, Githa, Well, 0:07:15.360 --> 0:07:17.640 let me just start with the results that you expect 0:07:17.640 --> 0:07:19.760 to see for the fourth quarter from Netflix. 0:07:20.400 --> 0:07:23.920 Sure, Tom, so this is actually going to be, you know, 0:07:23.960 --> 0:07:28.200 in many ways, kind of a very you know, significant 0:07:28.240 --> 0:07:30.520 quarter for Netflix. And I say that because this is 0:07:30.680 --> 0:07:33.760 the very last time in their history that they will 0:07:33.760 --> 0:07:36.760 be reporting subscriber metrics. So it makes it kind of 0:07:36.800 --> 0:07:38.960 special because as you know, you know, Netflix is really 0:07:38.960 --> 0:07:42.160 a subscriber story. I think they're actually going to have 0:07:42.200 --> 0:07:45.240 an extremely strong quarter. They're pricing in one of their 0:07:45.320 --> 0:07:50.280 best content cycles. You know, they have had huge pieces 0:07:50.320 --> 0:07:54.560 of content, a lot of them actually sports related, that 0:07:54.600 --> 0:07:57.480 have performed extremely well, and so we think that that 0:07:57.560 --> 0:08:00.880 will be a huge driver of subscriber ads during the quarter. 0:08:01.120 --> 0:08:05.040 So consensus right now is close to nine million, nine 0:08:05.040 --> 0:08:08.200 million new subscribers. We're thinking it'll actually go well into 0:08:08.200 --> 0:08:10.680 the double digits, maybe closer to about eleven or twelve 0:08:10.720 --> 0:08:13.640 million subscribers. But again, remember this is the last time 0:08:13.640 --> 0:08:16.200 that they're reporting subscribers, so investors are definitely going to 0:08:16.200 --> 0:08:18.960 focus on what the next big thing will be. So 0:08:19.000 --> 0:08:21.000 what are the other metrics that we need to focus 0:08:21.040 --> 0:08:21.840 on going forward? 0:08:22.480 --> 0:08:26.040 So up to double digits. It was five million in 0:08:26.080 --> 0:08:29.120 the third quarter, and this could double that new subscribers. 0:08:29.240 --> 0:08:30.880 Do you see a lot of that signing up because 0:08:30.880 --> 0:08:33.280 of the ad supported tier or the paid sharing tier. 0:08:33.640 --> 0:08:36.920 Well, absolutely, I think the ad supported tier definitely is 0:08:37.040 --> 0:08:40.200 accounting for a lot of those new signups. Netflix actually 0:08:40.240 --> 0:08:42.480 did give us a statistic in the third quarter. They 0:08:42.520 --> 0:08:45.560 said that it accounts for about fifty percent of all 0:08:45.600 --> 0:08:47.960 of the new signups in the markets where that option 0:08:48.080 --> 0:08:51.120 is available. So it's definitely, I think a pretty big 0:08:51.160 --> 0:08:55.280 success story for Netflix. And of course the paid sharing initiative, 0:08:55.280 --> 0:08:57.560 which is you know, cracking down on password sharing, has 0:08:57.559 --> 0:09:01.640 obviously been responsible for you know, the thirty million new 0:09:01.679 --> 0:09:04.480 subscriber ads that we've seen so far, you know, in 0:09:04.800 --> 0:09:09.479 twenty twenty four. So definitely both those have been huge contributors. 0:09:09.720 --> 0:09:12.320 But then I think the biggest piece really is is 0:09:12.360 --> 0:09:15.280 the content. Every Time you have huge pieces of content, 0:09:15.760 --> 0:09:18.280 whether it's you know, Mike Tyson versus Jake Paul, whether 0:09:18.320 --> 0:09:21.360 it's the NFL games or even you know, the second 0:09:21.360 --> 0:09:23.720 season of Squid Game, which is by far their most 0:09:23.840 --> 0:09:27.520 watched television series ever, you know, those are all going 0:09:27.559 --> 0:09:29.960 to be huge drivers of subscriber acquisition. 0:09:30.320 --> 0:09:32.920 Well, let's talk about that live sports strategy. A lot 0:09:32.920 --> 0:09:36.120 of glitches on that fight you mentioned Tyson Jake Paul, 0:09:36.240 --> 0:09:39.080 but it looks like Netflix figured out what went wrong 0:09:39.120 --> 0:09:42.000 in time for those NFL games on Christmas Day, right. 0:09:42.760 --> 0:09:46.280 Oh, absolutely so, yes, lots of glitches in their you know, 0:09:46.440 --> 0:09:49.319 first big I guess live events for a but they 0:09:49.320 --> 0:09:51.520 have figured it out. You're absolutely right, because remember it's 0:09:51.559 --> 0:09:54.240 not just the NFL games on Christmas Day. They've also 0:09:54.400 --> 0:09:59.960 been streaming WWE content starting January. So we've already had 0:10:00.040 --> 0:10:03.600 two Mondays where you've had kind of Netflix takeover, you know, 0:10:03.640 --> 0:10:07.080 the raw programming, and it's gone off I would say 0:10:07.120 --> 0:10:09.600 fairly well without a glitch. So they definitely have it 0:10:09.600 --> 0:10:11.840 figured out from a technology perspective, and just kind of 0:10:11.880 --> 0:10:14.600 thinking of, you know, the viewership and the numbers we've saw. 0:10:14.679 --> 0:10:16.960 We saw some really really strong numbers. So for the 0:10:16.960 --> 0:10:21.120 Tyson Paul match, for instance, there were sixty million households 0:10:21.160 --> 0:10:24.480 across the globe that streamed that event, so close to 0:10:24.480 --> 0:10:27.640 almost one hundred and ten million viewers. You know, that's 0:10:27.720 --> 0:10:30.840 kind of comparable to the reach of broadcast television. And 0:10:30.880 --> 0:10:33.280 then if you take the NFL games, you know, they 0:10:33.360 --> 0:10:37.520 reported about twenty six point five million viewers for each 0:10:37.559 --> 0:10:40.200 of those games, which is exactly what it was on 0:10:40.280 --> 0:10:43.360 broadcast television last year. So they've kind of proved that 0:10:43.480 --> 0:10:46.800 they can replicate the same model, the TV model on 0:10:46.920 --> 0:10:48.040 a streaming platform. 0:10:48.760 --> 0:10:51.800 Now, Netflix already has that deal that WWE deal with 0:10:52.000 --> 0:10:55.199 TKO Group, and it looks like they're in the running 0:10:55.240 --> 0:10:59.880 to secure another of TKO's properties, Ultimate Fighting Championship Ball 0:11:01.120 --> 0:11:03.880 right now on ESPN ESPN Plus. How important would that 0:11:03.920 --> 0:11:06.400 be for Netflix or is it just the next step 0:11:06.480 --> 0:11:07.240 for them? 0:11:07.760 --> 0:11:10.800 It could be very important, Tom, and it definitely is 0:11:10.840 --> 0:11:13.560 the next step. I mean, remember, ultimately they are looking 0:11:14.120 --> 0:11:16.800 to build this business, and the new metrics that are 0:11:16.840 --> 0:11:19.280 going to be really important for them now that subscribers, 0:11:19.360 --> 0:11:22.000 the number of subscribers is going away, is really going 0:11:22.000 --> 0:11:24.079 to be revenue growth. So the two numbers that I 0:11:24.080 --> 0:11:26.400 think investors are going to now be hyper focused on 0:11:26.880 --> 0:11:29.800 is are they posting you know, double digit revenue growth, 0:11:29.800 --> 0:11:32.520 so ten plus percent revenue growth, and are they posting 0:11:32.960 --> 0:11:35.400 strong operating income growth? So the number again that we're 0:11:35.440 --> 0:11:38.520 looking for is twenty percent plus operating income growth. And 0:11:38.600 --> 0:11:41.400 for that it's really important that they have these type 0:11:41.440 --> 0:11:44.480 of events in order to kind of drive that buzz, 0:11:44.880 --> 0:11:47.920 in order to drive you know, subscriber numbers. But more 0:11:47.920 --> 0:11:51.640 importantly for them, advertising is going to become a bigger 0:11:51.800 --> 0:11:54.840 chunk of revenue, and they need to have live events 0:11:55.000 --> 0:11:58.199 to appeal to advertisers, and so I absolutely think that 0:11:58.200 --> 0:12:00.079 they're going to go after it. We already know that 0:12:00.200 --> 0:12:03.080 UFC is demanding something like a doubling of its current 0:12:03.160 --> 0:12:06.079 rights fees from ESPN, so we'll see how that goes. 0:12:06.160 --> 0:12:08.920 But I think Netflix will definitely want to go after 0:12:08.960 --> 0:12:09.480 that as well. 0:12:09.760 --> 0:12:13.520 Oh, it's big, and is there any talk of price hikes? 0:12:14.240 --> 0:12:17.800 So we have actually been expecting price hikes for quite 0:12:17.840 --> 0:12:20.920 a while now, so they haven't done anything for over 0:12:21.000 --> 0:12:25.080 two years, which is really uncharacteristic for Netflix. So a 0:12:25.120 --> 0:12:28.959 price hike I would definitely say is overdue in the US, 0:12:29.120 --> 0:12:31.760 at least on the standard plan, which right now costs 0:12:31.880 --> 0:12:35.560 fifteen dollars and fifty cents. It's still a little bit 0:12:35.600 --> 0:12:39.160 of a wait and watch, but they haven't mentioned anything, 0:12:39.160 --> 0:12:41.240 but we definitely think it is something that's going to 0:12:41.240 --> 0:12:42.720 happen in twenty twenty five. 0:12:42.960 --> 0:12:45.400 Well we'll look for that. Q four earning from Netflix 0:12:45.440 --> 0:12:48.800 out this Tuesday are thanks to get the raganathin Bloomberg 0:12:48.840 --> 0:12:52.120 Intelligence Analysts on US Media and coming up on Bloomberg 0:12:52.200 --> 0:12:54.280 day Break weekend, we'll look ahead to the annual meeting 0:12:54.320 --> 0:12:58.679 of the World Economic Forum in Davos. I'm Tom Busby 0:12:58.800 --> 0:13:12.320 and this is bloom This is Bloomberg Daybreak weekend, our 0:13:12.320 --> 0:13:14.640 global look ahead at the top stories for investors in 0:13:14.679 --> 0:13:17.800 the coming week. I'm Tom Busby in New York. Up 0:13:17.920 --> 0:13:20.439 later in our program a look at whether incoming President 0:13:20.480 --> 0:13:23.760 Donald Trump will make good on his threats regarding China. 0:13:24.280 --> 0:13:27.000 But first, leaders from across the globe descending on the 0:13:27.040 --> 0:13:30.360 sleepy Swiss mountain resort of Davos for the annual meeting 0:13:30.360 --> 0:13:33.120 of the World Economic Forum this week. It's where the 0:13:33.160 --> 0:13:35.719 world's most powerful meet to address the pressing issues of 0:13:35.760 --> 0:13:38.520 the day, and this year, conflict is at the top 0:13:38.559 --> 0:13:41.920 of the agenda, with war anxiety racking the nerves of 0:13:42.000 --> 0:13:45.160 expert surveyed ahead of discussions for more. Let's go to 0:13:45.200 --> 0:13:49.000 London and bring in Bloomberg Daybreak, Europe anchor Caroline Hepgar. 0:13:49.320 --> 0:13:53.560 State based armed conflict is the biggest worry for this year. 0:13:53.640 --> 0:13:57.000 That's according to the World Economic Forums twenty twenty five 0:13:57.080 --> 0:14:00.360 Global Risks Report, which has been released head of the 0:14:00.440 --> 0:14:04.800 organization's elite gathering in Davos. The findings provide the mood 0:14:04.920 --> 0:14:08.319 music for an event where world leaders mingle with business 0:14:08.440 --> 0:14:13.320 executives among a total tally of some three thousand participants. 0:14:13.920 --> 0:14:17.880 But that grim assessment of global security evident in the 0:14:17.920 --> 0:14:22.400 report suggests that any sense of safety provided by the 0:14:22.680 --> 0:14:27.120 thousands of Swiss police and military personnel patrolling in freezing 0:14:27.200 --> 0:14:32.760 temperatures outside can't be taken for granted. Elsewhere, worries about 0:14:32.760 --> 0:14:38.680 geopolitical instability are followed by concerns about extreme weather events 0:14:38.720 --> 0:14:44.040 and the prevalence of misinformation and disinformation. So it looks 0:14:44.120 --> 0:14:46.680 like it's going to be a pretty somber gathering with 0:14:46.800 --> 0:14:49.920 some serious issues brought to the table. I've been speaking 0:14:49.960 --> 0:14:54.360 to Bloomberg's Jumana Bisecchi about what else we can expect 0:14:54.640 --> 0:14:56.360 from Davos twenty twenty five. 0:14:57.360 --> 0:14:59.640 Well, you talk about dusting off my warm clothes, they'll 0:14:59.680 --> 0:15:02.280 definitely to does stuff my warm clothes coming from Dubai. 0:15:02.800 --> 0:15:05.720 But look that the World Economic Forum's most well known events. 0:15:05.760 --> 0:15:08.600 It's an annual meeting that takes place in the Swiss Alps. 0:15:09.040 --> 0:15:13.200 Typically it's a forum for debate, for dialogue, to discuss 0:15:13.240 --> 0:15:15.160 some of the biggest issues of the day and to 0:15:15.200 --> 0:15:17.120 think about some of the solutions to these problems. So 0:15:17.200 --> 0:15:19.120 every year they set a theme. The theme for this 0:15:19.200 --> 0:15:23.280 year is a call for Collaboration in the Intelligent Age. 0:15:23.320 --> 0:15:26.440 That is the title of this year's forum, and I 0:15:26.480 --> 0:15:28.400 think the clue is in the title. On one hand, 0:15:28.480 --> 0:15:31.160 there's a lot of excitement about this intelligent age, the 0:15:31.400 --> 0:15:35.480 huge technological advances the world is witnessing, like artificial intelligence, 0:15:35.880 --> 0:15:39.920 smart energy solutions. But then also that word collaboration is 0:15:39.960 --> 0:15:42.360 perhaps and not to the fact that some of the 0:15:42.400 --> 0:15:46.720 world's existing multilateral order has broken down because of rising 0:15:46.760 --> 0:15:51.480 geopolitical tensions, a fracturing of global chest, fragmentation, and the 0:15:51.520 --> 0:15:52.360 climate crisis. 0:15:53.440 --> 0:15:56.040 There's always so much attention on the guest list on 0:15:56.120 --> 0:15:58.960 who turns up to the World Economic Forum, as well 0:15:58.960 --> 0:16:00.920 as what they say, who do you think is going 0:16:01.000 --> 0:16:02.560 to be there? What leaders are confirmed? 0:16:02.920 --> 0:16:06.800 Yeah, well, typically you see a fair share of world leaders, 0:16:06.840 --> 0:16:11.640 business leaders, academics, even heads of NGOs and celebrities actually 0:16:12.920 --> 0:16:15.600 tend to come to Davos. And for that reason it's 0:16:15.640 --> 0:16:17.840 been criticized as becoming a bit of a talking shop 0:16:17.920 --> 0:16:20.840 for the top one percent of the world's elites. But 0:16:21.000 --> 0:16:24.160 this year, what we do know is Donald Trump, So 0:16:24.280 --> 0:16:27.200 the new US President, who steps into office on Monday, 0:16:27.240 --> 0:16:31.640 will actually be delivering a virtual speech on Thursday via 0:16:31.880 --> 0:16:34.760 a live video link, so that will be widely awaited. 0:16:35.200 --> 0:16:37.880 Urslaer van de Lyon will be there, the President of 0:16:37.920 --> 0:16:40.840 the European Commission, even the Vice Premier of China will 0:16:40.840 --> 0:16:43.840 be attending. Olaf Schultz, who's facing his fair share of 0:16:43.920 --> 0:16:48.200 domestic issues, will also be attending interestingly, and el Frederick Merz, 0:16:48.240 --> 0:16:51.440 who is the opposition candidate into the Journal elections, will 0:16:51.480 --> 0:16:54.240 also be attending Davos, so you've got to think about 0:16:54.280 --> 0:16:57.120 the type of audience that he's targeting. There have you 0:16:57.160 --> 0:17:00.600 and me. Lay will be attending Argentinian President writing on 0:17:00.640 --> 0:17:05.280 a high after a quite successful year of instituting economic reforms, 0:17:06.000 --> 0:17:09.560 and then from the Middle East you have the Prime 0:17:09.600 --> 0:17:12.359 Minister of the Palestinian National Authority, which will be interesting 0:17:12.440 --> 0:17:16.000 given the latest developments. You also have the Prime Minister 0:17:16.240 --> 0:17:18.840 and Minister of Foreign Affairs from the State of Qatar. 0:17:19.520 --> 0:17:23.080 And then beyond that, Zelenski will be attending President of Ukraine, 0:17:23.160 --> 0:17:25.080 so a bit of a mixed bag and people from 0:17:25.119 --> 0:17:26.320 all around the world will be there. 0:17:27.080 --> 0:17:30.400 But then does that imply that there'll be much discussion 0:17:30.400 --> 0:17:36.000 about war and invotes in terms of creating pace any 0:17:36.160 --> 0:17:37.320 precedent for. 0:17:37.280 --> 0:17:42.000 That, Absolutely, there isn't a precedent for sure historically. 0:17:42.480 --> 0:17:43.960 But war will be. 0:17:43.880 --> 0:17:48.040 The top of agenda this year, and every year into 0:17:48.160 --> 0:17:51.760 the event they put out a top Risks report, and 0:17:52.040 --> 0:17:57.159 this year war is actually the top worry on the 0:17:57.240 --> 0:18:03.360 list of things that experts have been flagging as potential 0:18:03.440 --> 0:18:06.879 risks into twenty twenty five. So state based armed conflict 0:18:07.320 --> 0:18:11.000 is the most pressing immediate concern given what it tumultuous 0:18:11.080 --> 0:18:13.399 year twenty twenty four was, not just in terms of 0:18:13.440 --> 0:18:15.679 the many elections that took place, but of course in 0:18:15.760 --> 0:18:18.399 terms of the many conflicts that are taking place around 0:18:18.400 --> 0:18:22.000 the world and the ongoing conflict of course between Ukraine 0:18:22.040 --> 0:18:25.000 and Russia, but perhaps slightly more positive steps with the 0:18:25.000 --> 0:18:28.000 announcement of that ceasefire deal between Israel and Hamas. 0:18:28.880 --> 0:18:33.560 Although also extreme weather events were singled out as a 0:18:33.600 --> 0:18:40.440 concern for WEF participants and this is perhaps are ushering 0:18:40.440 --> 0:18:43.199 in quite a new era in terms of the global 0:18:43.240 --> 0:18:45.680 economy and views on climate change. 0:18:46.000 --> 0:18:51.159 Yeah, absolutely, and so you mentioned the global economy. We 0:18:51.320 --> 0:18:53.800 F Into these events, they typically put out the risk report, 0:18:53.840 --> 0:18:56.480 but then they also put out the economic outlook for 0:18:56.640 --> 0:19:00.919 twenty twenty five, fifty six percent of the economists surveyed 0:19:01.040 --> 0:19:05.760 expect weaker global economic conditions, again weighed down by concerns 0:19:05.800 --> 0:19:09.840 of fragmentation, economic fragmentation, the rise in protectionism it spells 0:19:09.920 --> 0:19:13.840 by potentially, of course, the new US administration, rising debt, 0:19:14.119 --> 0:19:16.880 and political uncertainty. And then to add to that over 0:19:16.920 --> 0:19:21.800 the medium term horizon, the risks from emanating from the 0:19:21.800 --> 0:19:26.560 climate crisis always feature on the medium term and long 0:19:26.680 --> 0:19:30.440 term concerns that come up in these reports. And this 0:19:30.520 --> 0:19:32.800 is a year where we've spoken about this is one 0:19:32.800 --> 0:19:34.760 of the hottest years on records. In fact, it was 0:19:34.760 --> 0:19:38.119 actually the hottest year on records, and we're still looking 0:19:38.200 --> 0:19:41.680 at the devastation caused by, say, the wildfires in La 0:19:42.040 --> 0:19:44.560 Lots of those events have been happening with increasing amount 0:19:44.600 --> 0:19:49.800 of frequency and with increasing intensity one and will continue 0:19:49.840 --> 0:19:52.080 to be one of the pertinent issues discussed at the 0:19:52.119 --> 0:19:53.399 World Economic Forum. 0:19:53.520 --> 0:19:56.280 My thanks to Bloomberg's humount of BISECI. So the risks 0:19:56.280 --> 0:19:59.919 associated with global conflict are set to take center stage 0:20:00.280 --> 0:20:04.160 in DeVos in the next few days. With interstate relationships 0:20:04.160 --> 0:20:09.080 being so pivotal this year, will diplomacy be crucial. Katherine Ashton, 0:20:09.160 --> 0:20:12.159 the former EU Foreign Affairs chief, has been speaking to 0:20:12.240 --> 0:20:16.359 us about how countries can understand each other better. This year, 0:20:16.600 --> 0:20:18.520 she's been speaking to Blomberg's Farci Laqua. 0:20:18.760 --> 0:20:21.560 I think we've had some sort of messages. We know 0:20:21.720 --> 0:20:27.040 that he's very interested in playing a role in stopping wars. 0:20:27.359 --> 0:20:30.560 Let's put it simply that, of course applies to what's 0:20:30.560 --> 0:20:35.879 happening in Ukraine. But the relationship with Putin is not straightforward, 0:20:36.000 --> 0:20:39.320 and President Putin does not do what other people tell 0:20:39.359 --> 0:20:42.439 him to do. So I see a sense that they 0:20:42.520 --> 0:20:44.720 might be moving away from suggesting that can be done 0:20:44.800 --> 0:20:48.520 very quickly. And he's obviously going to get a lot 0:20:48.520 --> 0:20:52.000 of pressure within Congress as well from Ukraine not to 0:20:52.240 --> 0:20:55.480 just give this away, not to be somebody who seemed 0:20:55.480 --> 0:20:57.920 to be in Putin's sad And then we've seen some 0:20:58.040 --> 0:21:02.040 extraordinary statements about Greenland and so on. But you know, 0:21:02.440 --> 0:21:05.679 he's the master of getting the headline. He's the master 0:21:05.800 --> 0:21:08.760 of saying something or not saying something. In the case 0:21:08.800 --> 0:21:11.760 of would you use military force against Greenland? You know, 0:21:11.840 --> 0:21:13.960 the idea that he and Denmark are going to war 0:21:14.680 --> 0:21:18.200 doesn't seem realistic, But by not saying that it's set 0:21:18.240 --> 0:21:21.239 off our whole set of issues, and it feels like 0:21:21.359 --> 0:21:23.680 these are almost a little bit of a distraction from 0:21:23.720 --> 0:21:26.639 the main elements for the foreign policy that he's going 0:21:26.680 --> 0:21:28.480 to have to put in place, of which China is 0:21:28.520 --> 0:21:31.120 clearly going to be key, but also what he wants 0:21:31.119 --> 0:21:33.639 to do on Ukraine, Russia and of course in the 0:21:33.680 --> 0:21:34.360 Middle East too. 0:21:35.080 --> 0:21:37.960 You've spent your whole career actually dealing with either unreadable 0:21:38.040 --> 0:21:43.199 or treaty personalities, foreign of course stage people. What's the 0:21:43.280 --> 0:21:45.240 right way of dealing with Donald Trump right now? 0:21:45.840 --> 0:21:47.960 I spent quite a bit of time with some of 0:21:48.000 --> 0:21:50.880 his foreign policy people in what we now call Trump One, 0:21:51.720 --> 0:21:54.720 and that was really interesting because it's a combination of 0:21:54.760 --> 0:21:57.639 people who've got years of experience. I may disagree with 0:21:57.680 --> 0:22:00.600 them on how they do something, but you can see 0:22:00.880 --> 0:22:04.000 the sense of direction. I think this time we'll see 0:22:04.000 --> 0:22:07.440 things slightly differently. It will be much more I think 0:22:07.560 --> 0:22:10.639 clear early on where he's trying to get to it, 0:22:10.680 --> 0:22:12.840 and a lot of his work will be domestic, so 0:22:12.920 --> 0:22:15.960 on foreign policy issues, what I would say to anybody 0:22:16.160 --> 0:22:19.000 is listen to what he says, because he says what 0:22:19.080 --> 0:22:22.080 he means at that point, and he often continues to 0:22:22.160 --> 0:22:25.959 mean it. Look at what the realistic elements of what 0:22:26.000 --> 0:22:28.760 he's saying are, and that's especially going to be important 0:22:29.080 --> 0:22:33.560 as everybody gets very nervous about tariffs, but also finding 0:22:33.680 --> 0:22:38.120 ways that you can build the foreign policy commitments, for 0:22:38.160 --> 0:22:40.800 example with NATO. I don't think that he'll pull out 0:22:40.800 --> 0:22:42.680 of nature, but I think he is going to pressure 0:22:43.160 --> 0:22:45.720 for more money to be spent by European countries. And 0:22:45.760 --> 0:22:48.320 to be fair to him, he's been incredibly successful in 0:22:48.400 --> 0:22:51.480 achieving what previous presidents have failed to do, which is 0:22:51.520 --> 0:22:53.160 getting European countries to pay more. 0:22:53.600 --> 0:22:56.640 There's the added complexity of Elon Musk. He's an advisor 0:22:56.680 --> 0:22:59.280 of Donald Trump. We understand he'll have an office in 0:22:59.280 --> 0:23:03.200 the White House close to the White House, and he's 0:23:03.200 --> 0:23:06.480 attacking including you know, the Prime Minister, but he's attacking 0:23:06.520 --> 0:23:10.800 foreign actors. He's supporting some, for example, of the far 0:23:10.920 --> 0:23:13.240 right in Germany. What's the right way to deal with him. 0:23:13.440 --> 0:23:16.119 Well, he's obviously going to be an important player in 0:23:16.160 --> 0:23:19.120 the Trump administration, at least for now. Whether he will 0:23:19.119 --> 0:23:21.639 decide to stay long term will partly depend, I think 0:23:21.680 --> 0:23:24.439 on where his other interests lack. I always think with 0:23:24.840 --> 0:23:27.199 anyone who is playing in a key role, you have 0:23:27.240 --> 0:23:29.679 to look at what their motivation might be. And I 0:23:29.720 --> 0:23:34.119 think for mister Musk, he's primarily a businessman, and so 0:23:34.960 --> 0:23:37.320 some of the things that he's saying are I think 0:23:37.359 --> 0:23:40.639 relevant to how he sees not just his business, but 0:23:40.720 --> 0:23:44.960 the world he's in, whether it's artificial intelligence, robotic space 0:23:45.000 --> 0:23:48.720 and so on, as being really important. So when he 0:23:48.800 --> 0:23:52.040 says to NASA, you shouldn't focus on the Moon, you 0:23:52.080 --> 0:23:56.360 should focus on Mars, that's a fair point from his perspective, 0:23:56.640 --> 0:23:59.280 you know. So some of this is about business, other 0:23:59.359 --> 0:24:01.800 I think will be about his own opinions. 0:24:01.760 --> 0:24:04.800 What's the right way of the UK in dealing with this. 0:24:05.400 --> 0:24:09.400 We've always had that sort of bridge effect really that 0:24:09.960 --> 0:24:13.080 the relationship with the US is a long term, ongoing 0:24:13.240 --> 0:24:18.920 special relationship that I think the outgoing US ambassador described 0:24:18.920 --> 0:24:22.000 as the essential relationship, and they'll be very keen to 0:24:22.160 --> 0:24:25.080 keep that, but to keep it within a framework that 0:24:25.200 --> 0:24:30.040 actually means we're going to be economically benefiting, politically benefiting. 0:24:30.480 --> 0:24:34.040 So there'll be a big move too to work with 0:24:34.080 --> 0:24:37.560 colleagues in NATO on defense security and I think with Europe, 0:24:37.800 --> 0:24:41.000 and there's a whole raft of staff that from defense 0:24:41.040 --> 0:24:44.040 and security right the way through to environmental climate change 0:24:44.080 --> 0:24:45.840 and so on, where there is a lot of what 0:24:45.880 --> 0:24:48.560 you might call common cause to be made that will 0:24:48.560 --> 0:24:53.200 be different to America's direction of travels, certainly under the president. 0:24:53.520 --> 0:24:56.000 Where the business chooses a different path is another thing. 0:24:56.680 --> 0:24:59.560 So it'll be about a balancing act. And I think 0:25:00.119 --> 0:25:02.320 the only way you can approach you is to stay calm, 0:25:03.040 --> 0:25:07.200 keep moving, do the stuff behind the scenes, because I'm 0:25:07.240 --> 0:25:09.840 a huge believer that most of it happens behind the 0:25:09.880 --> 0:25:13.800 scenes that we never see and shouldn't see, and not 0:25:13.960 --> 0:25:18.840 get too distressed or kind of turned away from your 0:25:18.880 --> 0:25:25.080 objectives because of what's happening that seems to be incredibly newsworthy, 0:25:25.400 --> 0:25:27.880 but actually it's just a lot of rhetoric that's going 0:25:27.880 --> 0:25:28.720 on in the background. 0:25:29.000 --> 0:25:32.280 That was the former EU Foreign Affairs chief Katherine Ashton 0:25:32.359 --> 0:25:35.560 speaking too Fancy in Laquat on Bloomberg Television. Now we 0:25:35.600 --> 0:25:38.840 will have full coverage over the World Economic Forums and 0:25:39.000 --> 0:25:42.439 your meeting in Devils live on Bloomberg Radio and TV. 0:25:43.000 --> 0:25:45.160 I'm Caroline Hepge here in London and you can catch 0:25:45.200 --> 0:25:48.159 us every weekday morning for Bloomberg Daybreak. You at beginning 0:25:48.160 --> 0:25:51.439 at six am in London. That's one am on Wall Street. 0:25:51.560 --> 0:25:54.679 Tom, thank you, Caroline, And coming up on Bloomberg day 0:25:54.680 --> 0:25:57.080 Break Weekend and look at what a Donald Trump presidency 0:25:57.280 --> 0:26:01.680 will mean for US China relations. I'm Tom Busby and 0:26:01.800 --> 0:26:15.479 this is Bloomberg. This is Bloomberg day Break Weekend, our 0:26:15.520 --> 0:26:17.760 global look ahead at the top stories for investors in 0:26:17.800 --> 0:26:20.359 the coming week. I'm Tom Busby in New York with 0:26:20.520 --> 0:26:23.080 his swearing in. Right around the corner, will Donald Trump 0:26:23.080 --> 0:26:25.879 made good on his campaign threats toward China once he 0:26:25.920 --> 0:26:28.320 takes office. For a closer look, let's get to the 0:26:28.359 --> 0:26:31.520 host of the Daybreak Asia podcast, Doug Krisner. 0:26:31.960 --> 0:26:34.679 Tom, let's start with a recollection. It was back in 0:26:34.720 --> 0:26:39.000 October when then Republican nominee Donald Trump sat down with 0:26:39.000 --> 0:26:42.199 Bloomberg News editor in chief John Micklethwaite. Here's part of 0:26:42.240 --> 0:26:43.040 that conversation. 0:26:43.480 --> 0:26:46.679 I told them, and I said it publicly, They're not 0:26:46.680 --> 0:26:49.760 going to sell one car into the United States. I said, 0:26:50.440 --> 0:26:52.199 if I run this country, if I'm going to be 0:26:52.240 --> 0:26:54.080 president of this country, I'm going to put a one 0:26:54.160 --> 0:26:57.439 hundred two hundred two thousand percent triff. They're not going 0:26:57.480 --> 0:27:01.360 to sell one car into the United state, because we're 0:27:01.400 --> 0:27:04.800 not going to destroy our country. Right. So, because I 0:27:04.840 --> 0:27:08.080 know you're an anti tariff guy, but I'm the exact opposite. 0:27:08.320 --> 0:27:11.200 If I had there is no other way I could 0:27:11.200 --> 0:27:13.119 have stopped there, other than what am I gonna do 0:27:13.240 --> 0:27:15.680 negotiating with Mexico, which you're not going to get anything 0:27:15.680 --> 0:27:18.440 from them. I said, I'm gonna put a one hundred, 0:27:18.480 --> 0:27:20.439 two hundred or three hundred. I'm going to put the 0:27:20.520 --> 0:27:23.200 highest tariff in history, meaning I'm going to stop them 0:27:23.240 --> 0:27:24.440 from ever selling a current. 0:27:24.520 --> 0:27:27.080 And that says Trump. I let you give your example. 0:27:27.440 --> 0:27:29.800 You talked a lot about tariffs. You look at the 0:27:29.840 --> 0:27:33.440 American economy. Forty million jobs rely on trade. It counts 0:27:33.440 --> 0:27:36.920 for twenty seven percent of GDP. If you cut that off, 0:27:37.000 --> 0:27:39.840 that's also going to effect on many many business people here. 0:27:40.359 --> 0:27:43.639 Tariffs also have another side. Isn't that something that you 0:27:43.720 --> 0:27:46.040 have to acknowledge? You could be plunging America into the 0:27:46.080 --> 0:27:49.960 biggest trade war since Smoothall, But you're gonna stop. You're 0:27:49.960 --> 0:27:51.560 gonna there are tariffs already. 0:27:51.359 --> 0:27:52.160 There are riffs. 0:27:52.200 --> 0:27:53.639 All you have to do is build your plant in 0:27:53.640 --> 0:27:55.600 the United States and you don't have any tariffs. 0:27:56.359 --> 0:27:58.760 People, there's a lot of places, a lot of places 0:27:58.800 --> 0:28:00.800 like this they rely there, a lot of jobs that 0:28:00.840 --> 0:28:03.640 rely on foreigners coming here. You're going to basically stop 0:28:04.240 --> 0:28:07.480 trade with China. You're talking about sixty percent trade on that, 0:28:07.560 --> 0:28:09.600 sixty perent tariffs on that. You're talking, as you said, 0:28:09.680 --> 0:28:12.520 one hundred two hundred percent all things you don't really like. 0:28:12.800 --> 0:28:15.480 You're also talking about twenty ten to twenty percent tariffs 0:28:15.520 --> 0:28:17.399 on the rest of the world. That is going to 0:28:17.400 --> 0:28:19.760 have a serious effect on the overall economy. And yes, 0:28:19.800 --> 0:28:22.080 you're going to find some people who were gained from 0:28:22.080 --> 0:28:25.640 individual tariffs. The overall effect could be massive. 0:28:25.680 --> 0:28:29.920 I agree, it's going to have a massive effect, positive effect. 0:28:30.400 --> 0:28:33.800 That's Donald Trump there, in conversation with Bloomberg News editor 0:28:33.840 --> 0:28:37.480 in chief John Micklethwaite. Now, mister Trump's hardline approach to 0:28:37.640 --> 0:28:40.320 China is no secret. He is vowed to be tough 0:28:40.560 --> 0:28:43.920 and enact hefty tariffs. Now those rates could potentially be 0:28:43.920 --> 0:28:47.240 as high as sixty percent, and the President elect is 0:28:47.320 --> 0:28:51.680 likely to maintain strict export controls on AI related technology 0:28:51.720 --> 0:28:56.280 to prevent China's access. Curiously, Trump has touted a friendly 0:28:56.360 --> 0:29:00.280 relationship with Chinese President Chi Jinping, and Trump is also 0:29:00.400 --> 0:29:03.920 taken a laissez fair stance on Taiwan. So how he 0:29:04.040 --> 0:29:07.560 is Beijing preparing for a second Trump administration. To help 0:29:07.600 --> 0:29:11.000 explore that, I'm joined now by John lu Bloomberg, Executive 0:29:11.080 --> 0:29:14.520 editor for Greater China. John joining from our studios in Beijing. 0:29:14.760 --> 0:29:16.920 Thank you so much for making time. I'm sure it's 0:29:16.960 --> 0:29:19.959 been busy for you, as it has been for US stateside. 0:29:20.240 --> 0:29:23.280 So leaders in China know Trump. John, they've dealt with 0:29:23.400 --> 0:29:26.160 him before. I'm curious to get your take on how 0:29:26.200 --> 0:29:28.520 things may change in the years ahead. 0:29:29.000 --> 0:29:33.440 I think that there is a familiar aity with Trump. 0:29:33.600 --> 0:29:37.280 I think the question is how will he roll out 0:29:37.320 --> 0:29:40.080 some of these promises that he has made during the campaign, 0:29:41.120 --> 0:29:44.640 the sixty percent tariffs that you talked about already. I 0:29:44.680 --> 0:29:47.840 think there is a preparation in Beijing. We see that 0:29:47.960 --> 0:29:50.680 when it comes to new laws in terms of how 0:29:50.680 --> 0:29:56.920 the government can limit exports of key medals, other technologies 0:29:56.920 --> 0:30:00.960 such as battery technologies. I think that is a sign 0:30:01.000 --> 0:30:03.959 of the Chinese government ready to punch back if and 0:30:04.000 --> 0:30:06.840 when the Trump administration does punch. 0:30:06.880 --> 0:30:09.640 It's interesting that they use that metaphor because I'm wondering 0:30:09.680 --> 0:30:11.840 whether this is going to be a fight or whether 0:30:11.880 --> 0:30:14.320 it's going to be kind of more of a negotiation 0:30:14.440 --> 0:30:17.480 where they're looking both sides are looking to strike deals. 0:30:18.040 --> 0:30:21.000 I think there's a broad thinking in Beijing that Trump 0:30:21.080 --> 0:30:26.640 is less ideologically driven and more driven by the desire 0:30:26.760 --> 0:30:30.280 to get a deal. And if that is the assumption, 0:30:30.480 --> 0:30:34.440 then I think a lot of these tariffs, a lot 0:30:34.480 --> 0:30:39.280 of this tough talk is a negotiating tactic to try 0:30:39.320 --> 0:30:43.000 and improve the position that Trump is in when he 0:30:43.080 --> 0:30:45.360 goes to the table, when he sits across from Cijiping 0:30:45.640 --> 0:30:47.000 and they try and hash out a deal. 0:30:47.320 --> 0:30:50.240 Marco Rubio has been nominated to be Secretary of State, 0:30:50.240 --> 0:30:53.040 and back in twenty twenty one, he authored the Weager 0:30:53.120 --> 0:30:57.280 Forced Labor Prevention Act. And do you expect human rights 0:30:57.280 --> 0:31:00.240 to be at all a part of the conversation between 0:31:00.320 --> 0:31:01.320 Beijin and Washington. 0:31:02.360 --> 0:31:08.040 I think mister Rubio many of his positions are different 0:31:08.080 --> 0:31:11.800 from those the President Trump has, and I think it'll 0:31:12.080 --> 0:31:15.080 one of the many interesting things to watch is how 0:31:15.080 --> 0:31:18.400 that works itself out. I do think that as far 0:31:18.440 --> 0:31:22.200 as humor rights go, if it does strengthen Trump's hand 0:31:22.240 --> 0:31:24.400 at the negotiating table, I think they will be a 0:31:24.440 --> 0:31:29.200 factor whether or not that is, humor rights is something 0:31:29.200 --> 0:31:31.840 that he's not willing to negotiate on. I don't think 0:31:31.880 --> 0:31:35.560 that they are. And so if you were to give 0:31:35.640 --> 0:31:38.800 up some of these issues that Rubio finds to be 0:31:39.000 --> 0:31:42.200 core in his view of American policy, then that will 0:31:42.280 --> 0:31:43.800 be very interesting how it plays out. 0:31:44.080 --> 0:31:46.640 It's interesting because we have seen that China has already 0:31:46.640 --> 0:31:51.520 begun to reposition itself in other parts of Southeast Asia, 0:31:51.920 --> 0:31:54.520 in Latin America, even in the Mid East in recent years, 0:31:54.520 --> 0:31:58.040 and I'm wondering whether that's preemptive, that there's already a 0:31:58.120 --> 0:32:02.920 feeling that they're going to have to reduce maybe reliance 0:32:02.960 --> 0:32:04.920 on the United States to a great degree. 0:32:06.120 --> 0:32:08.719 I think partly it is that. Partly it is China 0:32:08.760 --> 0:32:11.680 trying to make sure it has access to other markets 0:32:11.760 --> 0:32:13.880 if it's going to be shut out of the United States. 0:32:14.280 --> 0:32:17.080 The other part of that, actually, I think is, you know, 0:32:17.200 --> 0:32:24.080 as we've seen already with Trump's promises of tariffs against Canada, 0:32:24.360 --> 0:32:29.479 against Mexico, the issues that he has with NATO, that 0:32:30.040 --> 0:32:34.880 during the Trump administration there's a lot of fractiousness between 0:32:34.880 --> 0:32:37.280 the United States and its allies, and that actually gives 0:32:37.360 --> 0:32:40.760 China a chance to make friends abroad that may not 0:32:40.840 --> 0:32:42.760 have been there under the Biden administration. 0:32:42.880 --> 0:32:46.160 That's interesting too, because the Biden administration, I think we 0:32:46.200 --> 0:32:49.520 can agree, took a multilateral approach in dealing with China 0:32:49.560 --> 0:32:52.200 in a way that during the first Trump administration it 0:32:52.280 --> 0:32:56.080 was more unilateral. Will that change in your view going forward? 0:32:57.320 --> 0:33:01.280 I would expect President Trump to continue you to act 0:33:01.320 --> 0:33:05.160 in a very America first way, right. I think he's 0:33:05.160 --> 0:33:09.080 made that very clear. I think the Chinese, having seen 0:33:09.280 --> 0:33:12.280 what the first administration did in terms of American allies, 0:33:12.640 --> 0:33:15.000 I think the Chinese see and opportunity to strengthen their 0:33:15.040 --> 0:33:20.280 relationships in Asia, in Europe, and other locations around the world. 0:33:20.840 --> 0:33:24.160 If Trump is going to be fighting tariff wars left 0:33:24.200 --> 0:33:24.520 and right. 0:33:25.000 --> 0:33:28.480 We can debate the state of the Chinese economy, whether 0:33:28.560 --> 0:33:30.360 or not a bottom has kind of been put in 0:33:30.440 --> 0:33:33.800 and things are beginning to improve. One of the powerhouses 0:33:33.840 --> 0:33:37.360 clearly has been the export part of the Chinese economy. 0:33:37.880 --> 0:33:42.040 Tariffs obviously would threaten that. Is that a major concern 0:33:42.120 --> 0:33:43.440 on the part of leaders in China. 0:33:44.440 --> 0:33:49.760 I think is definitely a major concern for Beijing. There's 0:33:49.800 --> 0:33:53.200 a lot of worry that if tariff's coming right away, 0:33:53.600 --> 0:33:57.360 it really SAPs the ability of the export engine to 0:33:57.440 --> 0:34:01.320 help prop up economic growth here at home. That that 0:34:01.360 --> 0:34:04.760 will result in things getting much much more difficult for 0:34:04.840 --> 0:34:06.920 Hiding Ping and his government to try to work out. 0:34:07.200 --> 0:34:09.279 They will have less time. I mean, the push right 0:34:09.280 --> 0:34:13.080 now is Beijing is trying to retune the economy so 0:34:13.120 --> 0:34:15.880 that it's more dependent on consumption. The problem is the 0:34:15.920 --> 0:34:19.640 consumer is not spending, and if they don't have exports, 0:34:19.719 --> 0:34:21.520 it's not going to give them as much time as 0:34:21.520 --> 0:34:22.680 they would like to try and fix that. 0:34:22.680 --> 0:34:22.960 Pulce. 0:34:23.040 --> 0:34:26.520 So, having said that, is the position in China a 0:34:26.560 --> 0:34:30.279 little bit more vulnerable right now? And is the Trump administration, 0:34:30.360 --> 0:34:34.240 the incoming Trump administration aware of that to the degree 0:34:34.239 --> 0:34:36.839 that it would seek to take advantage of that vulnerability. 0:34:37.920 --> 0:34:40.320 I think the Trump administration, I would have to imagine, 0:34:40.360 --> 0:34:44.239 is aware of the situation that China finds itself in economically, 0:34:44.280 --> 0:34:47.840 and the domestic economy being weak puts China at a 0:34:47.880 --> 0:34:51.040 more of a disadvantage when it comes to negotiations. At 0:34:51.040 --> 0:34:54.080 the same time, I think China realizes that, but it 0:34:54.160 --> 0:34:58.040 also has some bottom lines that it's not going to 0:34:58.040 --> 0:35:00.160 cross these red lines, that it's not going to to 0:35:00.200 --> 0:35:05.320 give up things we talked about Taiwan before sovereignty issues. 0:35:05.440 --> 0:35:09.520 They're not going to undermine those issues to get a 0:35:09.520 --> 0:35:10.399 better trade deal. 0:35:10.880 --> 0:35:14.439 What about access to high technology? I indicated earlier that 0:35:15.120 --> 0:35:19.200 it's likely that Trump would maintain the level of export 0:35:19.239 --> 0:35:21.839 controls that were put in place by the Biden administration, 0:35:21.920 --> 0:35:26.440 which is essentially keeping China's access to certain components for 0:35:26.520 --> 0:35:29.960 AI kind of restricted in a major way, and that 0:35:30.000 --> 0:35:34.040 may be holding back the development of certain technologies in China. 0:35:34.280 --> 0:35:36.920 Is this something that Beijing is expecting when it comes 0:35:36.960 --> 0:35:42.200 to areas of artificial intelligence, whether it's kind of software 0:35:42.360 --> 0:35:44.240 or whether it's hardware like a chip. 0:35:45.360 --> 0:35:48.400 I think this is an area that's a little more unclear. 0:35:49.400 --> 0:35:52.719 The Biden administration has made it very crystal clear they've 0:35:52.719 --> 0:35:57.240 got this small yard, high fence approach to China policy 0:35:57.760 --> 0:36:02.319 limiting Chinese access to technology. Trump during the campaign, when 0:36:02.320 --> 0:36:05.840 he's talked about it's been much more about trade, about 0:36:05.880 --> 0:36:09.520 the trade surplus. He has not had as much of 0:36:09.560 --> 0:36:12.759 an emphasis on technology. For example, he's in support of 0:36:12.840 --> 0:36:15.640 allowing TikTok to stay. Obviously he would like to see 0:36:15.640 --> 0:36:18.120 it in American hands, not in Chinese hands. But it 0:36:18.239 --> 0:36:20.719 just sort of shows there's a slight difference when it 0:36:20.719 --> 0:36:22.880 comes to technology, and so I think the interesting question 0:36:23.040 --> 0:36:27.840 is when a negotiation happens, how likely would it be 0:36:27.920 --> 0:36:32.960 that Trump might compromise on technology access in exchange for 0:36:33.440 --> 0:36:36.760 more Chinese buying of American agriculture, for example. 0:36:36.440 --> 0:36:39.040 When it comes to high technology, and I'm thinking in 0:36:39.080 --> 0:36:43.279 particular of advanced semiconductors, it's all about Taiwan semi. We 0:36:43.400 --> 0:36:47.680 know that when it comes to the US being able 0:36:47.719 --> 0:36:51.520 to support through arm sales the government in Taiwan. Is 0:36:51.560 --> 0:36:55.120 that something that you believe that Trump administration will continue 0:36:55.200 --> 0:36:59.040 as happened during the Bidy administration or will we see 0:36:59.600 --> 0:37:00.800 a shift and that slightly. 0:37:01.840 --> 0:37:04.520 I think it's most likely going to continue. I think 0:37:04.600 --> 0:37:08.279 it'll continue because you have people like Marco Rubio who 0:37:08.280 --> 0:37:11.799 will be at the State Department and they will continue 0:37:11.840 --> 0:37:15.040 to support those actions arm cells to Taiwan to help 0:37:15.080 --> 0:37:18.879 Taiwan defend itself against any potential aggression that might come 0:37:18.960 --> 0:37:22.160 from China. But I think it's also very clear that 0:37:22.200 --> 0:37:25.919 Trump is much less interventionist when it comes to using 0:37:26.000 --> 0:37:30.080 American military power abroad, and so that makes it a 0:37:30.160 --> 0:37:33.239 much more nuanced relationship, and it makes it much more 0:37:33.280 --> 0:37:36.200 difficult for Taiwan to try and figure out how much 0:37:36.239 --> 0:37:39.200 they can depend on Washington if things get hairy. 0:37:39.520 --> 0:37:42.759 What about the relationship that China has with Russia right now, 0:37:42.760 --> 0:37:46.640 I'm thinking about how that's impacted war in Ukraine. Trump 0:37:46.680 --> 0:37:49.000 has said that he would like to end that conflict. 0:37:49.480 --> 0:37:51.600 Do you believe that China will play any type of 0:37:51.719 --> 0:37:52.319 role in that. 0:37:53.000 --> 0:37:57.160 I think the key players in this are Kiev in Moscow. Certainly. 0:37:57.280 --> 0:38:00.719 I think the Chinese would very very much like the 0:38:00.760 --> 0:38:04.319 war to end. It has been a big detriment to 0:38:04.760 --> 0:38:07.880 the Chinese relationship with Europe and in Chinese relationship with 0:38:07.920 --> 0:38:11.360 lots of other countries who see this aggression from Russia 0:38:11.480 --> 0:38:15.759 and are themselves fearful. I think if China any role 0:38:15.800 --> 0:38:18.480 that China can play on getting a piece still done, 0:38:18.560 --> 0:38:21.600 it will do that, although I do not think they 0:38:21.640 --> 0:38:25.879 are willing to exert overwhelming pressure on Russia to come 0:38:25.880 --> 0:38:26.400 to the table. 0:38:26.760 --> 0:38:28.759 John, we'll leave it there. Thank you so much for 0:38:28.840 --> 0:38:32.200 helping us a preview what relations may look like between 0:38:32.400 --> 0:38:36.480 Beijing and Washington under a second Trump administration. John Liu, 0:38:36.520 --> 0:38:40.000 their executive editor for Greater China, joining from our studios 0:38:40.080 --> 0:38:43.000 in Beijing. I'm Doug Chrisner, and you can catch us 0:38:43.000 --> 0:38:47.120 weekdays here for the Daybreak Asia podcast. It's available wherever 0:38:47.200 --> 0:38:50.120 you get your podcast. Tom, thank you Doug. 0:38:50.320 --> 0:38:52.520 And that does it for this edition of Bloomberg day 0:38:52.560 --> 0:38:55.120 Break Weekend. Join us again Monday morning at five am 0:38:55.160 --> 0:38:57.560 Wall Street Time for the latest on markets overseas and 0:38:57.600 --> 0:39:00.840 the news you need to start your day. I'm Tom Busby. 0:39:00.920 --> 0:39:03.759 Stay with us. Top stories and global business headlines are 0:39:03.800 --> 0:39:04.959 coming up right now.