August 4, 2020 • 22 mins
Nicole Lamb-Hale, Fellow at the Duff & Phelps Institute, discusses how the presidential election will impact future trade agreements.
Hosts: Carol Massar and Jason Kelly. Producer: Doni Holloway.
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Episode Transcript
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Speaker 1 (00:00):
You're listening to Bloomberg Business Week with Carol Masser and
Jason Kelly on Bloomberg Radio. So our next guest was
a former Assistant Secretary for Manufacturing and Services in the
US Department of Commerce in the International Trade Mission administration.
That was during the Obama administration. She's got some thoughts
and how the presidential election will impact future trade agreements.
(00:20):
We have a lot to talk to her about on
this Monday. Nicole Lamb Hall is a managing director at Kroll.
She's fellow at Duff and Phelps Institute UM and she
joins us on the phone in Washington, d C. Nicole,
it is nice to have you here with us. Welcome
to Bloomberg. Well, thank you. Carol's great to be with you.
You know, it's funny we kid Jason and I kind
(00:42):
of laugh a little bit about Oh yeah, it's as
a presidential election year, because in any other year, that
is what every conversation would probably revolve around, and yet
this year is unlike any other. Talk to us though
about from your perspective, what you're seeing, what you're thinking
about when it comes to the up coming election and
when it comes to trade. Sure, well, I really believe,
(01:06):
and and this is something that we talk to our
clients with the Definite Self Institute about all the time.
It's just really the differences around kind of a choice
between a unilateral and a multilateral approach to trade. Uh.
It seems clear to me that the Trump doctrine is
kind of a go at a loan approach that isolates
and sometimes alienates the US from our allies and and
(01:28):
in some ways embraces what I would say our market
distorative tools such as tear offfs and quotas for purchases
of of US goods and services. And by contrast, and
multilateral approach to trades, these collaborative action with our allies
and and and in working together hopes to maybe you know,
nudge uh countries that don't want to play by the
(01:50):
same rules towards playing by those rules. And so I
think that that's what the that's what's being set up
now in the presidential election as it relates to trade,
is just those different kind of approach, those different approaches.
And so Nicole, I guess one of the big questions
is if there is a change over, if you do
(02:11):
have a Biden administration, how easy is it to get
back to a multilateral world. Since we've been in this
bilateral or unilateral world now for three and a half years, Well,
it's going to be very challenging, Jason, I can tell
you because it's it's really there has been a sea change.
(02:31):
There have been some norms, that is that have obviously
changed since the Trump administration came into into office, and
so I think it's it's going to take us a
while to get back to the point where we can
be viewed as leaders in the as a leader in
the multilateral approach. I don't think it will happen overnight,
but I think it's necessary, particularly when you look at
(02:53):
what's happened as it relates to US China trade. I mean,
I think that that in and of itself illustrates kind
of the perils of going it alone. Um. I think that,
you know, the global businesses, like our clients with Deaf
and Phelps and Corole are really caught in the balance now,
kind of in the cross hair, so to speak, of
the U. S. China trade tensions that that have been
(03:16):
largely brought about. I think, even though they existed prior
to President Trump coming into the office into office, I
think they have created been exacerbated by this going alone approach. Well,
and it's interesting because I feel like Nicole, the US
isn't alone in kind of looking inward, and I feel
like we've seen, you know, some of this around the world.
(03:39):
And I do wonder though increasingly you mentioned China, if
we are getting ready to kind of divide the world
into China and the countries that want to work with
China and the US and the countries that want to
work with the US. Well, I think there's a danger
of that, and I think that is bad, particularly for
global businesses like our clients has the world. You know,
(04:02):
what what we do know now is that global supply
chains our our reality. They aren't going that's not going
to change. We have globalization, and we have to learn
to work together within this sphere, with multinational UH companies
that are both in the US and in other countries
around the world, to find a way to um, you know,
(04:23):
create some normalcy around what global trading rules should be UM.
I think what what I worry about is, and I
recognize that there is a little bit of nationalism that
we're seeing around the world. I worry that some of
the progress that we've made with trade agreements kind of
moving away from care ofs and looking more broadly at
(04:44):
policies like environmental protections and labor protections. I'm afraid that
we're moving away from that and we're going to get
to a point where the global economy and global businesses
will suffer. And so Nicole, when we look at the
headlines to a and over the weekend and going into
the weekend and we see something like the action around TikTok,
(05:07):
you know, part of this is about an area that
you are very familiar with, which is foreign ownership. You know,
you've done a lot of work, uh, I believe on
SCIPHIUS and you know that looks at it's the committee
for our listeners, It's Committee on Foreign Investment in the US.
An incredibly important sort of piece of the puzzle here
(05:29):
when you think about that element and how it relates
to global trade and how it relates to the relationship
among superpowers. What do you think about right now? Well,
what I worry about is that SIPIUS is used and
and other similar committees or entities around the world are
(05:49):
used not for what they were intended to be used
as is to protect national security, but are used as
tools and trade craft. Um, I think that you know,
the as I look at the TikTok transaction, and this
is you know, consistent with my experience when I was
on the committee, when I was in the Obama administration.
It is really centered, it seems to me, on national
(06:11):
security concerns around data privacy of U. S citizens, And
so I think that it's it's probably right on the
mark um, but it does create to the tensions. I mean,
we have a trifecta tensions with China around trade, technology,
and geopolitics, so it certainly falls into the kind of
the technology tensions. But I think that you know, data
(06:32):
privacy is a real concern. And while you know, when
you look at the legislation that updated the SCIFIST process
and it's focus on protecting p i I or personally
identifiable information of US citizens, that was always an issue
even when I was on SCIFISTS, But now with the
legislation being updated, it's really coming into into full focus.
(06:54):
And it's a it's a legitimate issue. But if scythist
is used as a tool of trade craft, then you know,
it kind of loses its bite, I think, and I
think we want to avoid that and so, so help me.
This is a really important point now. I want to
make sure that I understand it, Nicole, which is what
what is the role or what mechanism should be used
(07:14):
in this case when it relates to something like TikTok
If there are indeed, and I think there's some questions
out there as to whether there are you know, real
concerns about data privacy. If there are those concerns, how
should this be essentially investigated or ultimately litigated. What's the mechanism?
What's the right mechanism? Well, I think Scipias certainly is
(07:37):
the right mechanism, especially because this transaction was not reviewed
by Sippius when it was done initially. And Siffius does
have the ability to look at cases and transactions that
we're not they're called non notified transactions Jason, And there's
no statute of limitations on you know, how long before
Scippius can look at this. Uh, you know, they have
(07:59):
the ability to open up any transaction that threatens national security.
So I think it's the right um, the right forum
for it. So civit so sorry to interrupt you. So
Ciffius is the right forum. But basically the administration or
the president coming in and being like you're done or
you're done. You know at a date certain is maybe
not the right thing. Well, you know, SCIFFIUS has typically
(08:21):
been a process that's been confidential. You know, it's it's
a highly um because it's a national security focused review process.
It's it's usually not something that you read about in
the media as much as we have in the last
few days. So I'm a little bit concerned about that
because that's a that's a change in norms. But I
do believe that CIFFIUS is the right venue for for
(08:42):
these issues to be resolved. And if indeed the intelligence
reports show that there is a data privacy risk for U.
S citizens, then it's the right decision for SIFFIUS to
be reviewing this and should possibly cause it cause of
investment here. What do you hear, Nicole, from some of
your clients that you guys work with, I mean you
work with you know more than half of I believe
(09:05):
the SMP five hundred companies, I mean household companies that
certainly our listeners know of. I'm curious what they see
as the trade environment going forward, especially if there is
a second term under Donald Trump, or whether there's a
change in the White House, do they have a preference, Well,
you know, it's it's it's it's a very good question, Carol.
(09:27):
And what I'd say is our clients with the devil
Fels Institute really want certainty even if the news isn't great,
even if it's not ideal. The ping pong approach or
the seesaw approach of you know, teariffs or x at
X level one day, you know another level another day,
they're on the table, they're off the table. That really
(09:47):
interferes with the ability of global businesses to do long
term business planning. So I think that certainly if President
Trump is reelected, we'll see more of the same, a
continuation of kind of the unilateral approach to trade negotiations.
I mean, the President has been very clear that he
does not favor multilateral negotiations. He'd rather do bilateral negotiations,
So I can I anticipate that that will continue in
(10:10):
a Biden administration. I think we will see more of
what I described earlier as a multilateral approach, which really
gets to or speaks to working with our allies so
that we have a little bit more of a united
front and maybe more sway with China. So if you
think about the t PP, the Trans Spacific Partnership Effort,
(10:31):
you know that was designed to work with our allies
to create an alternative to the approach that that China
was taken and taking as it related to trade, and
I could see with a Biden administration and moved towards
something more like that. Nicole, I wanted to ask you
about COVID Night Team because obviously that complicated, to say
the least, the relationship between US and China. And it's
(10:54):
hard to sort of tease out the threads necessarily, or
it takes a little work to tease out the threads
of what is a trade tension, what is a health tension,
what is a political tension, what is an economic tension?
In some ways they're all wrapped up together. What were
the implications of the world and the US specifically, and
I guess China on the front end of dealing with
(11:17):
COVID nineteen and how that affected kind of the equation here. Well,
it certainly has complicated the equation because, as I mentioned,
the trifecta earlier earlier of trade, technology and geopolitics. When
you sprinkle, you know kind of the impact of the
origins and handling of COVID nineteen. Uh, it really complicates
further the U. S. China relationship. And I can tell
(11:40):
you that the impact that we've seen with our clients
is that you know, they they if they didn't understand
the need for this before, they now know that they
really have to diversify their supply chains. We have seen
a lot of tension in the supply chains around the
world as a result of COVID nineteen. You know, China
has been just kind of the center of much of
(12:03):
manufacturing activity, particularly in supply chains, and it's it's just
I think it's been a wake up call that that
companies really need to be looking around the corner even
more around what could happen if the center, you know,
if they if they have too much of an investment
in one area of the world and their supply chains,
what that can mean for their businesses overall. China has
(12:25):
been though so important to call, as you well know,
to the supply chain. Are people are companies? Is it
is it more of okay, we need to you know,
spread out our supply chains. Is it also that we
need to reduce our exposure to China? I think it's
a little bit of both because certainly what China, China
has an advantaged because they've really been successful at at
(12:48):
creating the value as it relates to the supply chains,
particularly with manufacturing companies who are global. That's been a
great base h for um for such companies and they've
perfected that craft. And certainly there are other countries that
can benefit from some of the shifts, like Vietnam and
and even India, but they aren't at the same level
(13:09):
as China in terms of their maturity in the supply chains.
So I think that what companies are doing is, you know,
they know and recognize that they need to remain in China,
but they're beginning to build in other areas as well
to try to hedge their bets a bit. And some
of that may even involve where it's appropriate economically restoring
(13:29):
to the US. You know, one of the other political issues,
political and trade and economic issues has been you know,
right here on this continent, Nicole, and I know you're
familiar with this as well, very familiar, which is the
U s m c A, the re cut of NAFTA.
What did that tell us about the state of trade
(13:51):
as it relates to you know, our neighbors to the
north and South Canada, Mexico. Well, I think that's what's
really important to recognize today is that regions are competing,
not just countries, and so it's important to have a
strong North American trade agreement for our region to be successful.
It benefits the US, China and Mexico. So I think that,
(14:14):
you know, it's it's been important and important development. It
did modernize NaSTA. In fact, the irony Jason is it
was modeled after the TPP that the Obama administrations put forward.
A lot of the provisions that are there are are
very much along the lines of what I talked about
in terms of focuses on labor and environmental concerns. So,
(14:36):
you know, I think it's very positive that the that
the North American region is able to be competitive with
the rest of the world. So so much of this
whether we're talking about US China, whether we're talking about
U S. M c A, or as Carol Master likes
to called Usmica because you know, we just love acronyms.
(14:58):
She doesn't actually I just teach out that other do that. Um.
But you know, when I think about this through a
political lens, Nicole. So much of it comes back to,
especially in a presidential election year, two jobs, and that's
the way it's framed. That's the way it's framed on
both sides of the equation. You know. I was listening
to the I'm sort of showing a little my podcast
(15:20):
listening here. I was traveling this weekend with my son,
and we listened to the Joe Rogan interview with Bernie
Sanders from like way back in the Day, which are
from a year or so ago, which is interesting to
listen to because there's obviously no talk of a pandemic.
But one of the things that Bernie Sanders on the
far left talks about is the same thing that you
hear from President Trump about, you know, offshoring jobs and
(15:42):
taking care of American workers. And that's the political lens
that we that so many people see this through. How
does this fit in and how does it get magnified
the jobs question when it comes to trade because we're
in a presidential year. You know, it's a a question, Jason,
and I don't know that I have the perfect answer,
(16:03):
but but what I would say is that the positive
of the U S m c A is that you know,
there's there was a lot of focus on UM the
content in the region US content UH, ensuring that the
levels were higher in terms of being able to take
advantage of the of the most favorite nation status, so
(16:24):
to speak, within the within the region having a certain
level a higher level of US content and goods and
services than existed under NaSTA. And and that's good for jobs.
I mean, it's good for American jobs, you know, especially
when you look at an industry like the automotive industry,
where products at various stages of completion are going back
(16:44):
and forth brought across both the northern border and the
southern border daily several times. That's good for jobs. I
think though, what I will say is in a political
year like we have now, you know, trade is a
very convenient boogeyman. And I think that you know, often
both parties use use it to to varying degrees. Um,
(17:06):
if we look at the facts, you know, I think
that that they bear out that increases and exports and
if we look at it even between you know, Canada,
the US and Mexico create jobs and support jobs, sustained jobs.
And when you think about that, and you think about
the North America competing with the rest of the world
(17:26):
and and exporting to the rest of the world. That
is also good for American jobs. So it's it's a
tough it's a tough thing, but it's it's something that
is certainly in an election year, does get elevated in
the way you suggest it, Nicole, while we have you
and I am curious because since you have such a
great direct line into you know, many of the nations
(17:47):
and worlds kind of big companies, I am curious, um
how nervous they are about the second half of the year.
You know here they are looking at, you know, potentially
a change in the White House or continuation of the
current administration. And then we also have the virus and
the impact that that is having on many many businesses,
on workers, on the economy. I'm just curious about what
(18:09):
you're hearing from them on that front. Yes, well, I
thank you, Carol. The the question is is a good one,
and it really varies by industry. As as we're seeing.
I mean, you know, our clients and travel and tourism
are very nervous. The COVID virus not being under control
has really hurt them, uh, financially and and there's really
(18:31):
at this point we don't know where the bottom is,
and so there is concerned about that uncertainty. Uh, the
uncertainty around you know, consumer purchasing patterns ways on our
clients minds. Um, supply chain continues to be you know,
stability of the supply chain continues to be a concern.
And then when and those of the things that no
one can control, you know, President controump Trump can't control those,
(18:55):
a President Biden wouldn't be able to control those. All
we can do is try to manage this by I
ris um. The uncertainty around the change in administration and
policy direction, I think is is common at this juncture
in our political calendar. Um. I think our clients you know,
want to know, you know, kind of where the regulatory
direction will be depending on who wins the White House.
(19:18):
With President Trump, I assume it's more of the same
and they do too. But you know, there's still so
much uncertainty given many of the changes in norms that
existed and allowed multinational companies based in the US and
otherwise to make do the long term business planning that
(19:39):
they are accustomed to doing. So what's the biggest challenge
if if we do see a Biden administration, this sort
of goes back to where we started at the beginning, Nicole,
Just to wrap up our conversation here, if there is
a Biden administration, what's the single biggest challenge when it
comes to trated What's the first thing you would advise
(19:59):
a Biden administration to do to potentially change the direction
of where we are, especially when it comes to getting
to a multilateral world, a more multilateral world. Well, the
first thing that I would have uh advise the President
Biden to do, and this is even broader than trade,
it has happens to really relate to US foreign policy
(20:23):
generally is outreached to our allies and and and and
reassuring our allies that the United States is interested in
a multilateral approach to trade. I mean, if you look
at it, Jason, I mean we've been waring with some
of our traditional allies in Europe over trade. They don't
know what box we're coming out of, you know, and
not to mention China and the rest of Asia. So
(20:44):
I think the first thing that the that the President
Biden would need to do is really try to get
back to level two levels set the leadership that the
United States has had in the areas of foreign policy
and trade that have really been altered to a point
where they're they're kind of, in my view, unrecognizable, and
they aren't recognizable to our our allies and to global businesses.
(21:06):
I think we need to kind of go back to
the center and then go from there. I think that
would be the best thing to do. Interesting, all right, Well, uh,
we know a lot of people are going to be
focused on this, especially over the next few months. We
really appreciate that overview, and you spending so much time
with us. Nicole lamb Hale, she's a fellow at the
Deaf and Phelps Institute, also former Sister Secretary of Commerce
(21:28):
for Manufacturing and Services in the Obama administration. She joined
us on the phone from the nation's capital. Carroll, some
really good context, I mean, and important to think about
these issues. I feel like we get so caught up
in a lot of the politics. This is just some
good old fashioned policy, Shawn don in somewhere. It's like
they just had a twenty five minute conversation about It's
(21:50):
reality check, right, because we do spend so much time
talking about the virus, and understandably so, it impacts, you know,
all of the industries that we touch upon. But at
the same time, she's got clients who are very much
thinking about the trade environment, right and going back to that,
that's a core thing in terms of you know, how
they construct their business or develop longer term strategies, whether
(22:10):
it's reassessing or you know, redesigning their supply chain. So, um,
a really deep die when it comes to trade, loved,
and it's all connected. It's all connected, the politics, the
economics of it. And I mean, when was the last
time we talked about your favorite trade agreement US MACA
back back, back on the agenda
You're listening to Bloomberg Business Week with Carol Masser and
Jason Kelly on Bloomberg Radio. So our next guest was
a former Assistant Secretary for Manufacturing and Services in the
US Department of Commerce in the International Trade Mission administration.
That was during the Obama administration. She's got some thoughts
and how the presidential election will impact future trade agreements.
(00:20):
We have a lot to talk to her about on
this Monday. Nicole Lamb Hall is a managing director at Kroll.
She's fellow at Duff and Phelps Institute UM and she
joins us on the phone in Washington, d C. Nicole,
it is nice to have you here with us. Welcome
to Bloomberg. Well, thank you. Carol's great to be with you.
You know, it's funny we kid Jason and I kind
(00:42):
of laugh a little bit about Oh yeah, it's as
a presidential election year, because in any other year, that
is what every conversation would probably revolve around, and yet
this year is unlike any other. Talk to us though
about from your perspective, what you're seeing, what you're thinking
about when it comes to the up coming election and
when it comes to trade. Sure, well, I really believe,
(01:06):
and and this is something that we talk to our
clients with the Definite Self Institute about all the time.
It's just really the differences around kind of a choice
between a unilateral and a multilateral approach to trade. Uh.
It seems clear to me that the Trump doctrine is
kind of a go at a loan approach that isolates
and sometimes alienates the US from our allies and and
(01:28):
in some ways embraces what I would say our market
distorative tools such as tear offfs and quotas for purchases
of of US goods and services. And by contrast, and
multilateral approach to trades, these collaborative action with our allies
and and and in working together hopes to maybe you know,
nudge uh countries that don't want to play by the
(01:50):
same rules towards playing by those rules. And so I
think that that's what the that's what's being set up
now in the presidential election as it relates to trade,
is just those different kind of approach, those different approaches.
And so Nicole, I guess one of the big questions
is if there is a change over, if you do
(02:11):
have a Biden administration, how easy is it to get
back to a multilateral world. Since we've been in this
bilateral or unilateral world now for three and a half years, Well,
it's going to be very challenging, Jason, I can tell
you because it's it's really there has been a sea change.
(02:31):
There have been some norms, that is that have obviously
changed since the Trump administration came into into office, and
so I think it's it's going to take us a
while to get back to the point where we can
be viewed as leaders in the as a leader in
the multilateral approach. I don't think it will happen overnight,
but I think it's necessary, particularly when you look at
(02:53):
what's happened as it relates to US China trade. I mean,
I think that that in and of itself illustrates kind
of the perils of going it alone. Um. I think that,
you know, the global businesses, like our clients with Deaf
and Phelps and Corole are really caught in the balance now,
kind of in the cross hair, so to speak, of
the U. S. China trade tensions that that have been
(03:16):
largely brought about. I think, even though they existed prior
to President Trump coming into the office into office, I
think they have created been exacerbated by this going alone approach. Well,
and it's interesting because I feel like Nicole, the US
isn't alone in kind of looking inward, and I feel
like we've seen, you know, some of this around the world.
(03:39):
And I do wonder though increasingly you mentioned China, if
we are getting ready to kind of divide the world
into China and the countries that want to work with
China and the US and the countries that want to
work with the US. Well, I think there's a danger
of that, and I think that is bad, particularly for
global businesses like our clients has the world. You know,
(04:02):
what what we do know now is that global supply
chains our our reality. They aren't going that's not going
to change. We have globalization, and we have to learn
to work together within this sphere, with multinational UH companies
that are both in the US and in other countries
around the world, to find a way to um, you know,
(04:23):
create some normalcy around what global trading rules should be UM.
I think what what I worry about is, and I
recognize that there is a little bit of nationalism that
we're seeing around the world. I worry that some of
the progress that we've made with trade agreements kind of
moving away from care ofs and looking more broadly at
(04:44):
policies like environmental protections and labor protections. I'm afraid that
we're moving away from that and we're going to get
to a point where the global economy and global businesses
will suffer. And so Nicole, when we look at the
headlines to a and over the weekend and going into
the weekend and we see something like the action around TikTok,
(05:07):
you know, part of this is about an area that
you are very familiar with, which is foreign ownership. You know,
you've done a lot of work, uh, I believe on
SCIPHIUS and you know that looks at it's the committee
for our listeners, It's Committee on Foreign Investment in the US.
An incredibly important sort of piece of the puzzle here
(05:29):
when you think about that element and how it relates
to global trade and how it relates to the relationship
among superpowers. What do you think about right now? Well,
what I worry about is that SIPIUS is used and
and other similar committees or entities around the world are
(05:49):
used not for what they were intended to be used
as is to protect national security, but are used as
tools and trade craft. Um, I think that you know,
the as I look at the TikTok transaction, and this
is you know, consistent with my experience when I was
on the committee, when I was in the Obama administration.
It is really centered, it seems to me, on national
(06:11):
security concerns around data privacy of U. S citizens, And
so I think that it's it's probably right on the
mark um, but it does create to the tensions. I mean,
we have a trifecta tensions with China around trade, technology,
and geopolitics, so it certainly falls into the kind of
the technology tensions. But I think that you know, data
(06:32):
privacy is a real concern. And while you know, when
you look at the legislation that updated the SCIFIST process
and it's focus on protecting p i I or personally
identifiable information of US citizens, that was always an issue
even when I was on SCIFISTS, But now with the
legislation being updated, it's really coming into into full focus.
(06:54):
And it's a it's a legitimate issue. But if scythist
is used as a tool of trade craft, then you know,
it kind of loses its bite, I think, and I
think we want to avoid that and so, so help me.
This is a really important point now. I want to
make sure that I understand it, Nicole, which is what
what is the role or what mechanism should be used
(07:14):
in this case when it relates to something like TikTok
If there are indeed, and I think there's some questions
out there as to whether there are you know, real
concerns about data privacy. If there are those concerns, how
should this be essentially investigated or ultimately litigated. What's the mechanism?
What's the right mechanism? Well, I think Scipias certainly is
(07:37):
the right mechanism, especially because this transaction was not reviewed
by Sippius when it was done initially. And Siffius does
have the ability to look at cases and transactions that
we're not they're called non notified transactions Jason, And there's
no statute of limitations on you know, how long before
Scippius can look at this. Uh, you know, they have
(07:59):
the ability to open up any transaction that threatens national security.
So I think it's the right um, the right forum
for it. So civit so sorry to interrupt you. So
Ciffius is the right forum. But basically the administration or
the president coming in and being like you're done or
you're done. You know at a date certain is maybe
not the right thing. Well, you know, SCIFFIUS has typically
(08:21):
been a process that's been confidential. You know, it's it's
a highly um because it's a national security focused review process.
It's it's usually not something that you read about in
the media as much as we have in the last
few days. So I'm a little bit concerned about that
because that's a that's a change in norms. But I
do believe that CIFFIUS is the right venue for for
(08:42):
these issues to be resolved. And if indeed the intelligence
reports show that there is a data privacy risk for U.
S citizens, then it's the right decision for SIFFIUS to
be reviewing this and should possibly cause it cause of
investment here. What do you hear, Nicole, from some of
your clients that you guys work with, I mean you
work with you know more than half of I believe
(09:05):
the SMP five hundred companies, I mean household companies that
certainly our listeners know of. I'm curious what they see
as the trade environment going forward, especially if there is
a second term under Donald Trump, or whether there's a
change in the White House, do they have a preference, Well,
you know, it's it's it's it's a very good question, Carol.
(09:27):
And what I'd say is our clients with the devil
Fels Institute really want certainty even if the news isn't great,
even if it's not ideal. The ping pong approach or
the seesaw approach of you know, teariffs or x at
X level one day, you know another level another day,
they're on the table, they're off the table. That really
(09:47):
interferes with the ability of global businesses to do long
term business planning. So I think that certainly if President
Trump is reelected, we'll see more of the same, a
continuation of kind of the unilateral approach to trade negotiations.
I mean, the President has been very clear that he
does not favor multilateral negotiations. He'd rather do bilateral negotiations,
So I can I anticipate that that will continue in
(10:10):
a Biden administration. I think we will see more of
what I described earlier as a multilateral approach, which really
gets to or speaks to working with our allies so
that we have a little bit more of a united
front and maybe more sway with China. So if you
think about the t PP, the Trans Spacific Partnership Effort,
(10:31):
you know that was designed to work with our allies
to create an alternative to the approach that that China
was taken and taking as it related to trade, and
I could see with a Biden administration and moved towards
something more like that. Nicole, I wanted to ask you
about COVID Night Team because obviously that complicated, to say
the least, the relationship between US and China. And it's
(10:54):
hard to sort of tease out the threads necessarily, or
it takes a little work to tease out the threads
of what is a trade tension, what is a health tension,
what is a political tension, what is an economic tension?
In some ways they're all wrapped up together. What were
the implications of the world and the US specifically, and
I guess China on the front end of dealing with
(11:17):
COVID nineteen and how that affected kind of the equation here. Well,
it certainly has complicated the equation because, as I mentioned,
the trifecta earlier earlier of trade, technology and geopolitics. When
you sprinkle, you know kind of the impact of the
origins and handling of COVID nineteen. Uh, it really complicates
further the U. S. China relationship. And I can tell
(11:40):
you that the impact that we've seen with our clients
is that you know, they they if they didn't understand
the need for this before, they now know that they
really have to diversify their supply chains. We have seen
a lot of tension in the supply chains around the
world as a result of COVID nineteen. You know, China
has been just kind of the center of much of
(12:03):
manufacturing activity, particularly in supply chains, and it's it's just
I think it's been a wake up call that that
companies really need to be looking around the corner even
more around what could happen if the center, you know,
if they if they have too much of an investment
in one area of the world and their supply chains,
what that can mean for their businesses overall. China has
(12:25):
been though so important to call, as you well know,
to the supply chain. Are people are companies? Is it
is it more of okay, we need to you know,
spread out our supply chains. Is it also that we
need to reduce our exposure to China? I think it's
a little bit of both because certainly what China, China
has an advantaged because they've really been successful at at
(12:48):
creating the value as it relates to the supply chains,
particularly with manufacturing companies who are global. That's been a
great base h for um for such companies and they've
perfected that craft. And certainly there are other countries that
can benefit from some of the shifts, like Vietnam and
and even India, but they aren't at the same level
(13:09):
as China in terms of their maturity in the supply chains.
So I think that what companies are doing is, you know,
they know and recognize that they need to remain in China,
but they're beginning to build in other areas as well
to try to hedge their bets a bit. And some
of that may even involve where it's appropriate economically restoring
(13:29):
to the US. You know, one of the other political issues,
political and trade and economic issues has been you know,
right here on this continent, Nicole, and I know you're
familiar with this as well, very familiar, which is the
U s m c A, the re cut of NAFTA.
What did that tell us about the state of trade
(13:51):
as it relates to you know, our neighbors to the
north and South Canada, Mexico. Well, I think that's what's
really important to recognize today is that regions are competing,
not just countries, and so it's important to have a
strong North American trade agreement for our region to be successful.
It benefits the US, China and Mexico. So I think that,
(14:14):
you know, it's it's been important and important development. It
did modernize NaSTA. In fact, the irony Jason is it
was modeled after the TPP that the Obama administrations put forward.
A lot of the provisions that are there are are
very much along the lines of what I talked about
in terms of focuses on labor and environmental concerns. So,
(14:36):
you know, I think it's very positive that the that
the North American region is able to be competitive with
the rest of the world. So so much of this
whether we're talking about US China, whether we're talking about
U S. M c A, or as Carol Master likes
to called Usmica because you know, we just love acronyms.
(14:58):
She doesn't actually I just teach out that other do that. Um.
But you know, when I think about this through a
political lens, Nicole. So much of it comes back to,
especially in a presidential election year, two jobs, and that's
the way it's framed. That's the way it's framed on
both sides of the equation. You know. I was listening
to the I'm sort of showing a little my podcast
(15:20):
listening here. I was traveling this weekend with my son,
and we listened to the Joe Rogan interview with Bernie
Sanders from like way back in the Day, which are
from a year or so ago, which is interesting to
listen to because there's obviously no talk of a pandemic.
But one of the things that Bernie Sanders on the
far left talks about is the same thing that you
hear from President Trump about, you know, offshoring jobs and
(15:42):
taking care of American workers. And that's the political lens
that we that so many people see this through. How
does this fit in and how does it get magnified
the jobs question when it comes to trade because we're
in a presidential year. You know, it's a a question, Jason,
and I don't know that I have the perfect answer,
(16:03):
but but what I would say is that the positive
of the U S m c A is that you know,
there's there was a lot of focus on UM the
content in the region US content UH, ensuring that the
levels were higher in terms of being able to take
advantage of the of the most favorite nation status, so
(16:24):
to speak, within the within the region having a certain
level a higher level of US content and goods and
services than existed under NaSTA. And and that's good for jobs.
I mean, it's good for American jobs, you know, especially
when you look at an industry like the automotive industry,
where products at various stages of completion are going back
(16:44):
and forth brought across both the northern border and the
southern border daily several times. That's good for jobs. I
think though, what I will say is in a political
year like we have now, you know, trade is a
very convenient boogeyman. And I think that you know, often
both parties use use it to to varying degrees. Um,
(17:06):
if we look at the facts, you know, I think
that that they bear out that increases and exports and
if we look at it even between you know, Canada,
the US and Mexico create jobs and support jobs, sustained jobs.
And when you think about that, and you think about
the North America competing with the rest of the world
(17:26):
and and exporting to the rest of the world. That
is also good for American jobs. So it's it's a
tough it's a tough thing, but it's it's something that
is certainly in an election year, does get elevated in
the way you suggest it, Nicole, while we have you
and I am curious because since you have such a
great direct line into you know, many of the nations
(17:47):
and worlds kind of big companies, I am curious, um
how nervous they are about the second half of the year.
You know here they are looking at, you know, potentially
a change in the White House or continuation of the
current administration. And then we also have the virus and
the impact that that is having on many many businesses,
on workers, on the economy. I'm just curious about what
(18:09):
you're hearing from them on that front. Yes, well, I
thank you, Carol. The the question is is a good one,
and it really varies by industry. As as we're seeing.
I mean, you know, our clients and travel and tourism
are very nervous. The COVID virus not being under control
has really hurt them, uh, financially and and there's really
(18:31):
at this point we don't know where the bottom is,
and so there is concerned about that uncertainty. Uh, the
uncertainty around you know, consumer purchasing patterns ways on our
clients minds. Um, supply chain continues to be you know,
stability of the supply chain continues to be a concern.
And then when and those of the things that no
one can control, you know, President controump Trump can't control those,
(18:55):
a President Biden wouldn't be able to control those. All
we can do is try to manage this by I
ris um. The uncertainty around the change in administration and
policy direction, I think is is common at this juncture
in our political calendar. Um. I think our clients you know,
want to know, you know, kind of where the regulatory
direction will be depending on who wins the White House.
(19:18):
With President Trump, I assume it's more of the same
and they do too. But you know, there's still so
much uncertainty given many of the changes in norms that
existed and allowed multinational companies based in the US and
otherwise to make do the long term business planning that
(19:39):
they are accustomed to doing. So what's the biggest challenge
if if we do see a Biden administration, this sort
of goes back to where we started at the beginning, Nicole,
Just to wrap up our conversation here, if there is
a Biden administration, what's the single biggest challenge when it
comes to trated What's the first thing you would advise
(19:59):
a Biden administration to do to potentially change the direction
of where we are, especially when it comes to getting
to a multilateral world, a more multilateral world. Well, the
first thing that I would have uh advise the President
Biden to do, and this is even broader than trade,
it has happens to really relate to US foreign policy
(20:23):
generally is outreached to our allies and and and and
reassuring our allies that the United States is interested in
a multilateral approach to trade. I mean, if you look
at it, Jason, I mean we've been waring with some
of our traditional allies in Europe over trade. They don't
know what box we're coming out of, you know, and
not to mention China and the rest of Asia. So
(20:44):
I think the first thing that the that the President
Biden would need to do is really try to get
back to level two levels set the leadership that the
United States has had in the areas of foreign policy
and trade that have really been altered to a point
where they're they're kind of, in my view, unrecognizable, and
they aren't recognizable to our our allies and to global businesses.
(21:06):
I think we need to kind of go back to
the center and then go from there. I think that
would be the best thing to do. Interesting, all right, Well, uh,
we know a lot of people are going to be
focused on this, especially over the next few months. We
really appreciate that overview, and you spending so much time
with us. Nicole lamb Hale, she's a fellow at the
Deaf and Phelps Institute, also former Sister Secretary of Commerce
(21:28):
for Manufacturing and Services in the Obama administration. She joined
us on the phone from the nation's capital. Carroll, some
really good context, I mean, and important to think about
these issues. I feel like we get so caught up
in a lot of the politics. This is just some
good old fashioned policy, Shawn don in somewhere. It's like
they just had a twenty five minute conversation about It's
(21:50):
reality check, right, because we do spend so much time
talking about the virus, and understandably so, it impacts, you know,
all of the industries that we touch upon. But at
the same time, she's got clients who are very much
thinking about the trade environment, right and going back to that,
that's a core thing in terms of you know, how
they construct their business or develop longer term strategies, whether
(22:10):
it's reassessing or you know, redesigning their supply chain. So, um,
a really deep die when it comes to trade, loved,
and it's all connected. It's all connected, the politics, the
economics of it. And I mean, when was the last
time we talked about your favorite trade agreement US MACA
back back, back on the agenda
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