June 11, 2025 • 18 mins
President Donald Trump said a trade framework with China has been completed after two days of talks in London. He said Beijing would supply rare earths and magnets “UP FRONT” and the US would allow Chinese students into colleges and universities.
On today’s episode, Big Take hosts Sarah Holder and K. Oanh Ha speak to Bloomberg’s Brendan Murray, who’s on the ground in London, and John Liu about how the two countries will hammer out a deal. This conversation was taped before Trump announced a deal had been done.
Read more: Trump Says China Will Ship Rare Earths in ‘Done’ Trade Deal
Further listening: A Turning Point in Trump’s Trade War
Is the US-China Trade War Over?
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
The world has waited for months for a lasting trade
deal between China and the US, one that could potentially
cool the tariff war that's been raging between both countries
in President Trump's second term. On Monday, representatives from the
US and China hold up in a mansion near Buckingham
Palace in London to hammer that potential deal out, and
(00:29):
on Tuesday they were still there. Brendon Murray runs Bloomberg's
trade coverage. He and other reporters have spent the last
two days looking for any signs of how the talks
might be going.
Speaker 1 (00:41):
We've seen a lot of delivery food being brought to
Lancaster House Otto Lingi both days, the upscale deli and
dessert chain, but other than that, there's not much information
coming out.
Speaker 2 (00:53):
So lunch being brought in good sign, bad sign.
Speaker 1 (00:57):
Well, yesterday's lunch was six bags was twelve, so we
think maybe one side bought lunch for the other. But
moments after that we saw the Chinese delegation leave for
a lunch break, so apparently they weren't into it.
Speaker 2 (01:11):
Around five point thirty pm local time, the two sides
took a break, and a person familiar with the matter
told Bloomberg they were planning to resume talks at eight
pm Tuesday night. US Commerce Secretary Howard Lutnik said later
that the talks went quote really, really well, and then
while he hoped the negotiations would end this evening, they
could stretch into Wednesday morning. And Bloomberg's John lu says
(01:35):
there's still a lot at stake as both sides try
to find common ground.
Speaker 3 (01:40):
Can the United States accept a China that is three
times as large economically and has the world's most cutting
edge technology. Until that day comes, and it may never come,
we will have trade wars.
Speaker 2 (01:58):
I'm Sarah Holder, and this is the Big Take from
Bloomberg News Today. On the show inside the latest trade
negotiations between the US and China, I speak with Bloomberg
Trade editor Brendan Murray, who's on the ground in London,
and Big Take Asia host Juan ha sits down with
John Lu who's been covering developments from Beijing. Could these
(02:19):
talks mark a pivotal turning point in the tariff war
between the US and China and what could relations between
the two countries look like after they're done.
Speaker 3 (02:32):
Well?
Speaker 2 (02:33):
Brendan, You've been covering these negotiations closely over the past
few months as tensions between the US and China have
escalated and de escalated. When I spoke with you just
last week, we talked about how the deal they'd reached
in Geneva in May was on shaky ground, and how that,
plus the lack of progress on other tariff deals more
than halfway through the self imposed ninety day pause, had
(02:55):
put new pressure on Donald Trump's credibility at home. How
has that ticking clock played into these talks this week
in London.
Speaker 1 (03:04):
Well, the focus for the past couple weeks for the
Trump administration has really been on China. It's been almost
exactly a month since they emerged from talks in Geneva,
Switzerland with what they called a deal, which was essentially
a ceasefire in the very high crippling tariffs that they
were imposing on each other. They brought those down to
a significant degree, the US to thirty percent, China brought
(03:27):
its tariffs down to ten percent, and they said, let's
spend the next ninety days talking through these difficulties that
we're having, reaching agreements on specific issues. But what's happened
In the meantime, is China has shown the world how
much leverage it has. China controls most of the world's
rare earth minerals. These are things that make electric car
(03:50):
batteries and lasers and all sorts of advanced manufactured goods,
and China controls most of the supply of them and
the processing of them. And what's happened and is China has,
either deliberately or through its bureaucratic process of permitting export
licenses for those goods, has shown the world how much
(04:13):
pain it can inflict on auto supply change aerospace supply
chains if it slows the export of those minerals. And
the US recently has said, look, you're not complying with
the agreement that we made in Geneva. We expected those
permits and those rare earth minerals to start flowing to
(04:34):
us sooner than that. Let's get back to the negotiating table.
That's what led Donald Trump to urge Hijinping to get
on the phone and say, we need to have a
talk about this because this is going to hurt our economy.
And it's not just the US. The European companies are
complaining about it. Indian automakers are also in trouble. If
(04:55):
China withholds these very important critical minerals really could become
a worldwide issue. The US, in the meantime started to
make moves to put controls on things like software for chips,
for jet engine parts, for nuclear reactor materials, some chemicals.
(05:16):
So the US struck back and said, hey, we have
stuff that you need too, and so China has an
interest in seeing that stuff moved to them too.
Speaker 2 (05:26):
So how did they get back to the negotiating table.
Who was more instrumental in getting these talks actually planned
in London?
Speaker 1 (05:33):
Well, Donald Trump has been urging Shijimpang to have a
talk for months now. That urgency has increased recently in
part because of the dragging of the feet that the
US would say that China has done with the rare
earth mineral those exports. And so the two leaders got
on the phone and the team's got the go ahead
(05:54):
to meet here in the UK. It's a bit of
a neutral territory. They're at a venue right now that's
not a US government site, not a Chinese government site.
It's neutral ground where they can hash out these differences.
Speaker 2 (06:07):
Heading into these talks the US's main priority was securing
access to China's rare earth minerals, and China's goal was
to get semiconductor trips from US tech companies like Nvidia.
But those are big concessions, and Brendan says meeting in
the middle was always going to be difficult.
Speaker 1 (06:25):
The problem for the US and for China for that matter,
is at what point do these products that are shipped
around the world cross over into the realm of national security.
At what point should the US say we shouldn't ship
China our most sophisticated chips for AI because those could
(06:47):
be used for supercomputing in defense applications and those sorts
of things, and vice versa. China would say we wouldn't
want the US Defense Department to get a hold of
our best critical minerals to be used in a military way.
So the two countries are walking a very fine line
between national security and economic security, and the line between
(07:11):
those two is getting blurrier and blurrier by the day.
Speaker 2 (07:15):
How are they trying to balance those concerns and what
would a deal actually look like that would satisfy each party.
Speaker 1 (07:22):
I think a deal that would allow both countries to
maintain a certain amount of trade, but not so much
trade that it impedes the other's ability to accomplish its
domestic goal. President Trump wants to reshore manufacturing, and one
way to do that is to put high tariffs on
Chinese imports and to force some of that production back home.
(07:46):
China has an interest in exporting what it makes. It's
still the factory of the world to the rest of
the world, and if it's not to the US, it
could be to other countries, to Vietnam or India or
other places where those products would be welcome if they're
not welcome in the US anymore. So, their two sides
(08:06):
seem to be aiming for some sort of a re
drawn arrangement where they can say, we'll trade with you,
but only up to a certain point. We'll make sure
that we diversify where we're getting our imports from or
exporting two and reduce the dependency on each other. Is
(08:27):
ultimately what both sides want to do if what we
are looking at is the battle for global economic supremacy
over the next decade or two.
Speaker 2 (08:36):
And then there is the last chess piece in these talks,
the piece that Trump touted as a bargaining Chip on
the campaign trail and enacted when he took office.
Speaker 1 (08:45):
Tariffs Tariffs are something that you keep on until the
very last moment of a trade negotiation. They are your
leverage and you don't give them up at round one
like we are now. So the tariffs that China bases
for their products coming into the US are this twenty
percent based on fentanyl and border security that initially Canada
(09:09):
and Mexico also we're hit with, and the ten percent
reciprocal rate that everyone else is dealing with as well,
and China has brought its tariff of US products down
to ten percent. So there is a bit of a
mismatch there, but it's a mismatch that both sides can
live with for the time being.
Speaker 2 (09:28):
The two sides haven't come to an agreement yet, formal
or informal, but Brendan says once they do, both countries
expect to see the results pretty quickly.
Speaker 1 (09:38):
China would want to demonstrate that it's acting in good faith.
The US said it wasn't after the Geneva agreement, so
the US will want to see fairly quick action out
of China, and China will want to see the US
back off of its threats of its own export controls.
Speaker 2 (09:56):
After the break, my Colleaguejan Ha sits down with Bloomberg's
job Lou to talk about the factors that could be
shaping China's thinking as the country's representatives sit at the
negotiating table.
Speaker 4 (10:16):
John, thanks so much for joining us.
Speaker 3 (10:17):
Sure, it's wonderful to be here.
Speaker 4 (10:19):
I really wanted to get your read of the mood
on the ground in China right now. You know, the
last time we took a temperature check, people were largely
supportive of President she standing his ground in these negotiations.
Speaker 3 (10:32):
Has that changed No, I think that remains the fact.
There's a lot of support, a groundswell. I think I
would even say that wants China to stand up and
fight these tariffs. There is a broad view that the
actions that the Trump administration have taken our prejudice. They're unfair,
they're unjust. I think what's even added to it has
(10:53):
been these moves to void student visas. A lot of
Chinese kids, a lot of Chinese families spent years working
very hard saving money for the opportunity for that one person,
one child, to be able to go to an Ivy
League school and change the course of their lives and
now they're being denied that possibility, and there is a
(11:13):
lot of angst about that, and so there's a lot
of support for she standing up to the Trump administration.
But at the same time, I think there's also a
lot of worry. I think the fact that we've seen
deflation CPI in China be negative for four months in
a row, I think that speaks to how people are
trying to save more, spend less, and that is a
(11:34):
reflection of concern, not feeling a great deal of confidence
about the future. Exports have been really important for the
Chinese economy over the last couple of years because consumption.
Domestic consumption has been so weak, and it's been weak
because of the collapse of property prices. Households are feeling poor,
they're spending less, and so exports has really been the
(11:56):
major driver of growth for China's economy over the last
two or three years. That has come down substantially. Exports
from China to the United States fell by thirty four
point four percent in the month of May.
Speaker 4 (12:07):
That's got to hurt.
Speaker 3 (12:08):
That's the biggest drop since February of twenty twenty. So
that's at the start of COVID now.
Speaker 4 (12:14):
Before the talks were confirmed, Trump took to his Truth
social platform last week to post that quote, she is
very tough and extremely hard to make a deal with.
He really wanted to get on that phone with President She,
and it seemed to be a strategic decision for she.
Was he holding out and what was the message that
he was trying to send?
Speaker 3 (12:33):
So I would start by saying, we don't know. But
at the same time, I think there are some things
about President Jipin deciding to get on the phone with
President Trump that suggests one there could be more concern
about the economy from the perspective of the Chinese leadership,
and maybe that was the additional motivating factor for President
(12:59):
She to do something that it was unorthodox, that was
not something that Chinese leaders have done in the past.
They prefer for any deals to be struck, to be
negotiated and the details worked out by lower level officials,
and then President She would come in and sign a
document put a ribbon on it. That is the preferred
(13:19):
method of doing business. And so agreeing to the phone
call suggests that something else is there. It could be
more concerned about the economy. It could also be that
potentially the Chinese leadership saw some opportunity, some opening, some
chance for she to get on the phone and maybe
get a concession that the lower level officials would not
(13:41):
have been able to get from the American side.
Speaker 4 (13:44):
Certainly for the US, resuming exports of China's rare earth's
mineral is really key in these talks, and turning the
flow of these rare earth exports on and off seems
to be a big leverage for China right now. Will
we see China increasingly play hardball on that to get
the trade deal it wants, certainly from the US, but
also potentially from other global partners.
Speaker 3 (14:03):
I think China is willing to play hardball, but I
think there is an understanding in Beijing that the more
you use the rare earth card, the more it actually
gets other countries starting to think about, well, I can't
depend on China for rare earths. I gotta have my
own minds, I gotta have my own processing. And so
the more that Beijing uses it, potentially the less powerful
(14:23):
it becomes. Although the caveat there is you don't build
rare earth refineries and rare earth minds overnight, so it's
going to be a period of time.
Speaker 2 (14:34):
On the other side, China is hoping that the US
doesn't play hardball when it comes to semiconductor chips. But
if the US is willing to compromise there and ease
restrictions on semiconductor exports, John says, it could open the
door to other deals.
Speaker 3 (14:50):
If the Trump administration is going to show that it's
willing to negotiate on these sanctions, it brings up the
possibility that the Trump administration might, I'd also be willing
for the right price to negotiate the other sanctions that
were put in place by the Biden administration, sanctions that
are more targeted at more fundamental technologies, and so that
(15:13):
I think is another important aspect of what happens next.
Speaker 4 (15:17):
Now, you mentioned at the top that these tensions we're
seeing right now between the US and China, they're not
only about trade. We've also seen the Trump administration revoke
Chinese student visas and looking at limiting intrigue to the
US for Chinese students in critical maths, science and tech fields.
How is all of that contributing to the tone around
(15:37):
these negotiations.
Speaker 3 (15:39):
So the Chinese leadership is not elected, there are no elections.
But at the same time, the Chinese leadership is very
sensitive to public opinion. It's maybe even more so sensitive
because there are no elections, right They have to keep
track of how people are feeling. And so when you
have student visas being canceled and parents being upset and
that affects entire family, that's something that strikes accord with
(16:04):
the Chinese government. There is another issue, I think, which
is Taiwan, and that is the number one issue when
it comes to the US China relationship if you ask
anybody in Beijing. And before these most recent talks, there
was a report by Reuters that the Trump administration was
planning a very large weapons sale to Taiwan. We don't
(16:25):
know if that came up during these talks, but one
thing that Beijing would be very eager for is some
displayed by the American side of adhering to the One
China principle, not supporting Taiwanese independence, not supporting the current
Taiwan administration, which the Chinese side views as being extremely
pro independence and hostile.
Speaker 4 (16:47):
What do we think China wants beyond the tariff negotiations
that are happening this week, What more does China want
out of this.
Speaker 3 (16:53):
I think fundamentally, what China wants is space to maneuver
economically and diplomatic in the world. Right now, on a
per capita basis, the average Chinese citizen is making only
about a third or a quarter as much as the
average American person is, so China is still relatively poor.
The goal of the Chinese government of Xijipin is to
(17:16):
move China from middle income to high income, and to
do that, they need technology and they need trade, and
so that's what they want. They want to have a
world in which China has access to technology that can
fuel its economic growth, that can move its standard of
living up. And they want access to markets so that
(17:36):
the goods that Chinese companies produce have a place that
they can be sold into.
Speaker 2 (17:45):
This is the Big Take from Bloomberg News. I'm Sarah Holder.
To get more from The Big Take and unlimited access
to all of Bloomberg dot Com, subscribe today at Bloomberg
dot com slash podcast offer. If you liked this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
The world has waited for months for a lasting trade
deal between China and the US, one that could potentially
cool the tariff war that's been raging between both countries
in President Trump's second term. On Monday, representatives from the
US and China hold up in a mansion near Buckingham
Palace in London to hammer that potential deal out, and
(00:29):
on Tuesday they were still there. Brendon Murray runs Bloomberg's
trade coverage. He and other reporters have spent the last
two days looking for any signs of how the talks
might be going.
Speaker 1 (00:41):
We've seen a lot of delivery food being brought to
Lancaster House Otto Lingi both days, the upscale deli and
dessert chain, but other than that, there's not much information
coming out.
Speaker 2 (00:53):
So lunch being brought in good sign, bad sign.
Speaker 1 (00:57):
Well, yesterday's lunch was six bags was twelve, so we
think maybe one side bought lunch for the other. But
moments after that we saw the Chinese delegation leave for
a lunch break, so apparently they weren't into it.
Speaker 2 (01:11):
Around five point thirty pm local time, the two sides
took a break, and a person familiar with the matter
told Bloomberg they were planning to resume talks at eight
pm Tuesday night. US Commerce Secretary Howard Lutnik said later
that the talks went quote really, really well, and then
while he hoped the negotiations would end this evening, they
could stretch into Wednesday morning. And Bloomberg's John lu says
(01:35):
there's still a lot at stake as both sides try
to find common ground.
Speaker 3 (01:40):
Can the United States accept a China that is three
times as large economically and has the world's most cutting
edge technology. Until that day comes, and it may never come,
we will have trade wars.
Speaker 2 (01:58):
I'm Sarah Holder, and this is the Big Take from
Bloomberg News Today. On the show inside the latest trade
negotiations between the US and China, I speak with Bloomberg
Trade editor Brendan Murray, who's on the ground in London,
and Big Take Asia host Juan ha sits down with
John Lu who's been covering developments from Beijing. Could these
(02:19):
talks mark a pivotal turning point in the tariff war
between the US and China and what could relations between
the two countries look like after they're done.
Speaker 3 (02:32):
Well?
Speaker 2 (02:33):
Brendan, You've been covering these negotiations closely over the past
few months as tensions between the US and China have
escalated and de escalated. When I spoke with you just
last week, we talked about how the deal they'd reached
in Geneva in May was on shaky ground, and how that,
plus the lack of progress on other tariff deals more
than halfway through the self imposed ninety day pause, had
(02:55):
put new pressure on Donald Trump's credibility at home. How
has that ticking clock played into these talks this week
in London.
Speaker 1 (03:04):
Well, the focus for the past couple weeks for the
Trump administration has really been on China. It's been almost
exactly a month since they emerged from talks in Geneva,
Switzerland with what they called a deal, which was essentially
a ceasefire in the very high crippling tariffs that they
were imposing on each other. They brought those down to
a significant degree, the US to thirty percent, China brought
(03:27):
its tariffs down to ten percent, and they said, let's
spend the next ninety days talking through these difficulties that
we're having, reaching agreements on specific issues. But what's happened
In the meantime, is China has shown the world how
much leverage it has. China controls most of the world's
rare earth minerals. These are things that make electric car
(03:50):
batteries and lasers and all sorts of advanced manufactured goods,
and China controls most of the supply of them and
the processing of them. And what's happened and is China has,
either deliberately or through its bureaucratic process of permitting export
licenses for those goods, has shown the world how much
(04:13):
pain it can inflict on auto supply change aerospace supply
chains if it slows the export of those minerals. And
the US recently has said, look, you're not complying with
the agreement that we made in Geneva. We expected those
permits and those rare earth minerals to start flowing to
(04:34):
us sooner than that. Let's get back to the negotiating table.
That's what led Donald Trump to urge Hijinping to get
on the phone and say, we need to have a
talk about this because this is going to hurt our economy.
And it's not just the US. The European companies are
complaining about it. Indian automakers are also in trouble. If
(04:55):
China withholds these very important critical minerals really could become
a worldwide issue. The US, in the meantime started to
make moves to put controls on things like software for chips,
for jet engine parts, for nuclear reactor materials, some chemicals.
(05:16):
So the US struck back and said, hey, we have
stuff that you need too, and so China has an
interest in seeing that stuff moved to them too.
Speaker 2 (05:26):
So how did they get back to the negotiating table.
Who was more instrumental in getting these talks actually planned
in London?
Speaker 1 (05:33):
Well, Donald Trump has been urging Shijimpang to have a
talk for months now. That urgency has increased recently in
part because of the dragging of the feet that the
US would say that China has done with the rare
earth mineral those exports. And so the two leaders got
on the phone and the team's got the go ahead
(05:54):
to meet here in the UK. It's a bit of
a neutral territory. They're at a venue right now that's
not a US government site, not a Chinese government site.
It's neutral ground where they can hash out these differences.
Speaker 2 (06:07):
Heading into these talks the US's main priority was securing
access to China's rare earth minerals, and China's goal was
to get semiconductor trips from US tech companies like Nvidia.
But those are big concessions, and Brendan says meeting in
the middle was always going to be difficult.
Speaker 1 (06:25):
The problem for the US and for China for that matter,
is at what point do these products that are shipped
around the world cross over into the realm of national security.
At what point should the US say we shouldn't ship
China our most sophisticated chips for AI because those could
(06:47):
be used for supercomputing in defense applications and those sorts
of things, and vice versa. China would say we wouldn't
want the US Defense Department to get a hold of
our best critical minerals to be used in a military way.
So the two countries are walking a very fine line
between national security and economic security, and the line between
(07:11):
those two is getting blurrier and blurrier by the day.
Speaker 2 (07:15):
How are they trying to balance those concerns and what
would a deal actually look like that would satisfy each party.
Speaker 1 (07:22):
I think a deal that would allow both countries to
maintain a certain amount of trade, but not so much
trade that it impedes the other's ability to accomplish its
domestic goal. President Trump wants to reshore manufacturing, and one
way to do that is to put high tariffs on
Chinese imports and to force some of that production back home.
(07:46):
China has an interest in exporting what it makes. It's
still the factory of the world to the rest of
the world, and if it's not to the US, it
could be to other countries, to Vietnam or India or
other places where those products would be welcome if they're
not welcome in the US anymore. So, their two sides
(08:06):
seem to be aiming for some sort of a re
drawn arrangement where they can say, we'll trade with you,
but only up to a certain point. We'll make sure
that we diversify where we're getting our imports from or
exporting two and reduce the dependency on each other. Is
(08:27):
ultimately what both sides want to do if what we
are looking at is the battle for global economic supremacy
over the next decade or two.
Speaker 2 (08:36):
And then there is the last chess piece in these talks,
the piece that Trump touted as a bargaining Chip on
the campaign trail and enacted when he took office.
Speaker 1 (08:45):
Tariffs Tariffs are something that you keep on until the
very last moment of a trade negotiation. They are your
leverage and you don't give them up at round one
like we are now. So the tariffs that China bases
for their products coming into the US are this twenty
percent based on fentanyl and border security that initially Canada
(09:09):
and Mexico also we're hit with, and the ten percent
reciprocal rate that everyone else is dealing with as well,
and China has brought its tariff of US products down
to ten percent. So there is a bit of a
mismatch there, but it's a mismatch that both sides can
live with for the time being.
Speaker 2 (09:28):
The two sides haven't come to an agreement yet, formal
or informal, but Brendan says once they do, both countries
expect to see the results pretty quickly.
Speaker 1 (09:38):
China would want to demonstrate that it's acting in good faith.
The US said it wasn't after the Geneva agreement, so
the US will want to see fairly quick action out
of China, and China will want to see the US
back off of its threats of its own export controls.
Speaker 2 (09:56):
After the break, my Colleaguejan Ha sits down with Bloomberg's
job Lou to talk about the factors that could be
shaping China's thinking as the country's representatives sit at the
negotiating table.
Speaker 4 (10:16):
John, thanks so much for joining us.
Speaker 3 (10:17):
Sure, it's wonderful to be here.
Speaker 4 (10:19):
I really wanted to get your read of the mood
on the ground in China right now. You know, the
last time we took a temperature check, people were largely
supportive of President she standing his ground in these negotiations.
Speaker 3 (10:32):
Has that changed No, I think that remains the fact.
There's a lot of support, a groundswell. I think I
would even say that wants China to stand up and
fight these tariffs. There is a broad view that the
actions that the Trump administration have taken our prejudice. They're unfair,
they're unjust. I think what's even added to it has
(10:53):
been these moves to void student visas. A lot of
Chinese kids, a lot of Chinese families spent years working
very hard saving money for the opportunity for that one person,
one child, to be able to go to an Ivy
League school and change the course of their lives and
now they're being denied that possibility, and there is a
(11:13):
lot of angst about that, and so there's a lot
of support for she standing up to the Trump administration.
But at the same time, I think there's also a
lot of worry. I think the fact that we've seen
deflation CPI in China be negative for four months in
a row, I think that speaks to how people are
trying to save more, spend less, and that is a
(11:34):
reflection of concern, not feeling a great deal of confidence
about the future. Exports have been really important for the
Chinese economy over the last couple of years because consumption.
Domestic consumption has been so weak, and it's been weak
because of the collapse of property prices. Households are feeling poor,
they're spending less, and so exports has really been the
(11:56):
major driver of growth for China's economy over the last
two or three years. That has come down substantially. Exports
from China to the United States fell by thirty four
point four percent in the month of May.
Speaker 4 (12:07):
That's got to hurt.
Speaker 3 (12:08):
That's the biggest drop since February of twenty twenty. So
that's at the start of COVID now.
Speaker 4 (12:14):
Before the talks were confirmed, Trump took to his Truth
social platform last week to post that quote, she is
very tough and extremely hard to make a deal with.
He really wanted to get on that phone with President She,
and it seemed to be a strategic decision for she.
Was he holding out and what was the message that
he was trying to send?
Speaker 3 (12:33):
So I would start by saying, we don't know. But
at the same time, I think there are some things
about President Jipin deciding to get on the phone with
President Trump that suggests one there could be more concern
about the economy from the perspective of the Chinese leadership,
and maybe that was the additional motivating factor for President
(12:59):
She to do something that it was unorthodox, that was
not something that Chinese leaders have done in the past.
They prefer for any deals to be struck, to be
negotiated and the details worked out by lower level officials,
and then President She would come in and sign a
document put a ribbon on it. That is the preferred
(13:19):
method of doing business. And so agreeing to the phone
call suggests that something else is there. It could be
more concerned about the economy. It could also be that
potentially the Chinese leadership saw some opportunity, some opening, some
chance for she to get on the phone and maybe
get a concession that the lower level officials would not
(13:41):
have been able to get from the American side.
Speaker 4 (13:44):
Certainly for the US, resuming exports of China's rare earth's
mineral is really key in these talks, and turning the
flow of these rare earth exports on and off seems
to be a big leverage for China right now. Will
we see China increasingly play hardball on that to get
the trade deal it wants, certainly from the US, but
also potentially from other global partners.
Speaker 3 (14:03):
I think China is willing to play hardball, but I
think there is an understanding in Beijing that the more
you use the rare earth card, the more it actually
gets other countries starting to think about, well, I can't
depend on China for rare earths. I gotta have my
own minds, I gotta have my own processing. And so
the more that Beijing uses it, potentially the less powerful
(14:23):
it becomes. Although the caveat there is you don't build
rare earth refineries and rare earth minds overnight, so it's
going to be a period of time.
Speaker 2 (14:34):
On the other side, China is hoping that the US
doesn't play hardball when it comes to semiconductor chips. But
if the US is willing to compromise there and ease
restrictions on semiconductor exports, John says, it could open the
door to other deals.
Speaker 3 (14:50):
If the Trump administration is going to show that it's
willing to negotiate on these sanctions, it brings up the
possibility that the Trump administration might, I'd also be willing
for the right price to negotiate the other sanctions that
were put in place by the Biden administration, sanctions that
are more targeted at more fundamental technologies, and so that
(15:13):
I think is another important aspect of what happens next.
Speaker 4 (15:17):
Now, you mentioned at the top that these tensions we're
seeing right now between the US and China, they're not
only about trade. We've also seen the Trump administration revoke
Chinese student visas and looking at limiting intrigue to the
US for Chinese students in critical maths, science and tech fields.
How is all of that contributing to the tone around
(15:37):
these negotiations.
Speaker 3 (15:39):
So the Chinese leadership is not elected, there are no elections.
But at the same time, the Chinese leadership is very
sensitive to public opinion. It's maybe even more so sensitive
because there are no elections, right They have to keep
track of how people are feeling. And so when you
have student visas being canceled and parents being upset and
that affects entire family, that's something that strikes accord with
(16:04):
the Chinese government. There is another issue, I think, which
is Taiwan, and that is the number one issue when
it comes to the US China relationship if you ask
anybody in Beijing. And before these most recent talks, there
was a report by Reuters that the Trump administration was
planning a very large weapons sale to Taiwan. We don't
(16:25):
know if that came up during these talks, but one
thing that Beijing would be very eager for is some
displayed by the American side of adhering to the One
China principle, not supporting Taiwanese independence, not supporting the current
Taiwan administration, which the Chinese side views as being extremely
pro independence and hostile.
Speaker 4 (16:47):
What do we think China wants beyond the tariff negotiations
that are happening this week, What more does China want
out of this.
Speaker 3 (16:53):
I think fundamentally, what China wants is space to maneuver
economically and diplomatic in the world. Right now, on a
per capita basis, the average Chinese citizen is making only
about a third or a quarter as much as the
average American person is, so China is still relatively poor.
The goal of the Chinese government of Xijipin is to
(17:16):
move China from middle income to high income, and to
do that, they need technology and they need trade, and
so that's what they want. They want to have a
world in which China has access to technology that can
fuel its economic growth, that can move its standard of
living up. And they want access to markets so that
(17:36):
the goods that Chinese companies produce have a place that
they can be sold into.
Speaker 2 (17:45):
This is the Big Take from Bloomberg News. I'm Sarah Holder.
To get more from The Big Take and unlimited access
to all of Bloomberg dot Com, subscribe today at Bloomberg
dot com slash podcast offer. If you liked this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow.
Popular Podcasts
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.