September 20, 2025 • 46 mins
When President Trump announced the tariffs on Liberation Day, it seemed to truly mark the end of the old world trading system. But of course it had been dying for a long time. The first Trump administration erected aggressive trading barriers against China. Then Biden expanded them further. And there were signs of its demise even under Obama. So what was the global trading system? What will come after it? What are the benefits and costs to changes? On this episode, we speak with Michael Froman, the President of the Council on Foreign Relations, and the former Trade Representative during Obama's second term. We discuss how the system began to collapse, and what he sees as the emergence of a new "polyamorous" global trading system, where friends and allies and partners move in a more liquid manner between different poles and blocs.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3 (00:21):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2 (00:23):
Tracy, you know, we're several months, I guess, like five
months or so, recording to September sixteenth, five months or
so since Liberation days, since the trade war started. By
and large, the world is still kind of working right.
You could see its effects for sure, and certain categories
and so forth, but by and large, I don't think
the contours of the economy look that much different than
(00:46):
they did, say in March or April.
Speaker 3 (00:47):
Look, I'm still missing my auction item that's supposed to
be mailed from the Netherlands, so it has affected me directly.
Speaker 2 (00:54):
Wait what happened with it? Wait? Say more?
Speaker 3 (00:56):
Okay, So I won something from a Dutch auction house
and they were supposed to mail it in house shipping,
and instead of mailing it, they sent out an email
saying that they can't mail it because everyone's trying to
figure out the new tariff schedule and customs and things
like that. I still haven't heard from.
Speaker 2 (01:13):
Them, but it still feels like something happened. There was
some sort of rupture. Kind of hard to imagine going
to a March twenty twenty five world again, but also
hard to imagine going to a pre Trump one world ever, Like,
it's hard for me to imagine that in my lifetime
that there will ever be a sort of twenty fifteen
(01:35):
style trading relationship between the US and China.
Speaker 3 (01:37):
Well, I could be wrong, never say never, but.
Speaker 2 (01:40):
It's just hard for me to see at this point.
Speaker 3 (01:42):
At this point, like, it's not a single administration thing. Right,
We've had Trump one point oh, and then Biden continued
a lot of the tariffs and even added some new ones,
and then we have Trump two point zero, which is
arguably going even harder on China. So it does seem
like at least a durable trend.
Speaker 2 (01:59):
Yeah, not a fly. And as we've discussed, you mentioned
the fact that Biden was a continuation arguably an expansion
of Trump one, particularly with some of the export restrictions
on technology. Yeah, this is one of the rare trade
rethinking the global trading system, whatever that means, is one
of the rare areas of bipartisan consensus in dc IS,
(02:22):
as has come up in many episodes.
Speaker 3 (02:23):
Yeah, that in housing, that in.
Speaker 2 (02:25):
Housing right, that housing is very expensive. We really do
have the perfect guest, someone who has a very big
picture view on trade, someone who has been directly involved
in trade negotiations, someone who remembers the sort of pre Trump.
Speaker 3 (02:40):
One, the long long long ago, the.
Speaker 2 (02:42):
Long long long ago global trading system, and who could
talk about whatever remnants of that are left, or even
maybe who can explain to me what the global trading
system was. We're going to be speaking with Michael Frohman.
He is the President of the Council on Foreign Relations
and he was the former US Trade repper reve during
the Obama Obama two administration twenty thirteen to twenty seventeen.
(03:05):
Has continued to write a lot about this topic. So,
Michael Frohman, thank you so much for coming out odd last,
Thanks for having me. Absolutely What does the US trade
representative do? You had that job? I actually realized I
don't really know.
Speaker 4 (03:18):
It's a great job. It really has the function of
negotiating trade agreements and enforcing US trade rights under previous agreements.
The reason I love the job is that it combines
high diplomacy, sitting down with ministers, presidents, prime ministers of
other countries, trying to reach agreements with having to have
(03:39):
a really detailed understanding of elements of the US economy.
I mean, I learned more from American farmers teaching me
the five hundred things you can do with a molecule
of milk and how they manipulate a molecule of milk
to circumvent trade restrictions and get around tariffs, so you
export it as butter or his way, or as low
(04:01):
calorie powder or whatever.
Speaker 5 (04:04):
This is a whole episode episode, right, But that's really
one example of the literally thousands of issues you have
to learn as US trade rep to be able to
sit down with your counterparts in other countries and negotiate agreements.
Speaker 3 (04:16):
Can you give us an idea or a sense of
the average negotiation? What exactly is the process? Like do
you meet for the first time in a designated room
somewhere or is there prep that goes into these you're
exchanging emails? What exactly happens?
Speaker 4 (04:32):
So in the past, and of course it's a very
different situation now, But in the past, the US or
another country might come up with an idea of what
they wanted to do in a trade negotiation, a set
of issues they wanted to take on a set of
countries they wanted to negotiate with, and they would go
around and do consultations with other countries, float the ideas,
see what kind of feedback they got, and scope out
(04:53):
the nature of the negotiation. Is it going to be
just about goods and tariffs? Is it going to touch
upon agriculture, sure and regulations and services and labor and
environment and all various other issues that have become part
of trade negotiations in the past, and get agreement by
the other countries that this was the agenda. And then
in the past usually it's the US that has been
(05:15):
sort of driving the agenda. These would be the topics
we would deal with. The US would come up with
proposals of what are the disciplines that we would like
to see in each of these areas, what are the
rules that we'd like to see. And it was the
way the US brought other countries along to adopt high
standard rules across one sector, one subject matter or another.
And the idea was, we know, we live in a
(05:37):
high wage, highly regulated economy. We compete with economies that
oftentimes have lower wages, lower regulation, and if we could
raise other country standards closer to our own. It would
level the playing field for American workers and farmers and
ranchers and make it easier for us to compete.
Speaker 2 (05:55):
I mean, for better or worse. It really just seems
like a totally different era and out the idea of
getting to the idea of going back to some world
where the US is actively working with a bunch of
country on rules rather than rates terror for it really
does seem it seems like ancient history. Now, it just
seems right.
Speaker 4 (06:15):
Look, I think that's right. First of all, I think
I think the international trading system had been under stressed
for some time. President Trump, in some ways put was
the final nail in the coffin of it. But you know,
the global multilateral rules based system, that's like the wto
the World Trade Organization, where one hundred and sixty plus
countries got together, agreed to a set of rules, agreed
(06:36):
to some mechanisms for enforcing those rules and for monitoring them.
That's been under stress for a long time. There's been dissatisfaction,
and I think now, in fact, you're right. I think
we can't go back to the way things were pre Trump.
We're gonna have to think about what comes next.
Speaker 3 (06:53):
Just to play a devil's advocate for a second, to
what extent did we actually have a rules based trading
system in the sense that everyone was actually beholden to
the same limitations or the same rules, Because looking back,
there were always accusations about China cheating or maybe the
US was taking advantage in some way, And in fact,
(07:14):
you could argue that that sense of unfairness is kind
of what got us to where we are today. So
was it really rules based for everyone?
Speaker 4 (07:24):
So I think we have to look back at the
whole history of the post war period because for decades,
China wasn't a factor, it wasn't part of the global
trading system, it wasn't a major economy, and it was
the US and Europe, Japan, others who came together to
really form this set of rules. And it's never a
perfect system. My sense is what rules means is that
(07:47):
most countries follow most of the rules most of the time,
not that it's one hundred percent perfection. By the way,
that's true when you have laws in the United States,
I mean we have laws of the United States because
people do commit crimes. The existence of laws does not
prevent people from committing crimes. That's why you need enforcement.
Same thing is true on the international side as well.
The big difference, as you pointed out, Tracy, is when
(08:09):
China became a major factor in the global economy and
began to integrate globally. On one hand, there was an
opportunity to say, Okay, this is an opportunity for bring
China into the global system, get them to adopt the
set of rules that the rest of us have all
agreed to, because they appear to be on this path
towards market reform, openness, liberalization. I think what happened in
(08:31):
reality is that trajectory wasn't as linear, didn't go as far,
didn't go as fast as people anticipated. And what we
did not anticipate is that somebody like President She would
come in and in fact stop or reverse it. And
so now we have an economy that is huge, second
largest economy in the world, biggest manufacturing part of the
(08:52):
global economy, likely to be accounting for something like forty
five percent of all global manufacturing in a few years,
which is the I guess that any country has ever
been in history, and it's following a fundamentally different set
of rules, and that has led to a law of
the stress in the international system.
Speaker 2 (09:25):
Can you explain maybe the philosophical premise behind the idea
that trade with China? I guess, why do we care
about what their internal rules are? Right theory of trade,
it's sort of okay, they're cheaper for whatever reason, or
they're more efficient, et cetera, and so you know, comparative
(09:47):
advantage we benefit from that. Why does the global trading
system why is it or was it or is it
premised on this notion that all of the participants would
and in some sort of more liberal direction with their
domestic economies.
Speaker 4 (10:04):
You know, I think it's because the actions that China
has taken domestically to drive they're really quite remarkable economic
growth over the last few decades does have ramifications outside
of China, has ramifications for the rest of the world,
for manufacturing in the rest of the world, for other factors,
and so it's not something that can be limited to
(10:24):
China if China gets to where it's going, because it
steals intellectual property, because it produces over capacity, so it
creates far more factories than it needs to for the
reasonable demand for a product in order to drive other
producers out of the market in other countries that has
an average effect on us. If they subsidize state owned
(10:46):
enterprises or even private enterprises in such a way that
it creates this unlevel playing field, then it affects the
rest of US as well. And I think that's what's
really happened, is that China, whether it's a state owned enterprise,
is subsidization, intellectual property rights, theft, government intervention into the
private sector, all towards positioning China as the leading manufacturer.
(11:09):
But it has come at the expense of other industrialized countries,
in some cases other emerging economies, and that's why there's
been thisess counter reaction.
Speaker 3 (11:17):
So I know you were trade representative before the tensions
with China really ramped up under the first Trump administration,
But how were you thinking back then about incentivizing other
countries when it comes to trade negotiations like KARRA and
stick strategy. Was it mostly about incentives and if so,
what were you giving them or was it sometimes maybe threats?
Speaker 4 (11:42):
So you have to use both. I think on the
threat side, it's not really threats. It was enforcement that
we would bring cases against countries, including China at the
WTO or against other trading partners where we had arrangements
if we felt that they were violating our rights under
those agreements. We brought during the Obama I think we
brought the most cases ever brought against China. We won
(12:03):
all the cases that got to conclusion. The problem was
China would find ways either of delaying implementation or by
the time the fix was implemented, the relevant industry in
the United States or elsewhere was gone, and so it
was really sort of cold comfort. And that's one of
the challenges I think that we saw in the World
Trade Organization. I think on the incentive side, that's where
(12:24):
trade agreements, real trade agreements come into play. I was
involved in something called the Transpecific Partnership, which was twelve
countries around the Asia Pacific region that were working on
opening their economies to each other, abiding by a high
standard set of rules. Some of the countries already had
free trade agreements with US, about half of them did,
(12:45):
so we weren't giving them any more access to our economy.
We'd already given them access. But at the table we
had Japan, and Japan was an economy that had never
really opened up to other markets, and these other countries
knew that they couldn't get Japan to open on their own,
but if the US was pushing Japan to open, they
would benefit from it. So you had countries like Peru
(13:07):
or Chile who already had free trade agreements with US
willing to raise their labor standards or willing to enforce
environmental laws because they were getting access not to our market,
but to Japan, and that incentive was one that was
powerful for them.
Speaker 2 (13:21):
That's a very uh, that's a very interesting dynamic. Talk
a little bit more about those years twenty thirteen pre
Trump in the actions towards China, because if you said,
by that point Obama had already introduced a record number
of actions against China, winning many of them, winning all
of them to do something, well, all of them that
went to conclusions, all of them that went to conclusion,
(13:44):
but it didn't really matter because either there was some
way to evade or the US industry had been decimated.
Was there something pre Trump, I mean, I don't know.
Whenever that was there a feeling that something has to
change fundamentally in how the US and China trade or
the rules governing that trade.
Speaker 4 (14:02):
At that point, no, absolutely, Look the day one of
the Obama administration. The world had been involved in something
called the Doha Round of negotiations at the World Trade
Organization had been going on since two thousand and one,
and I remember going to a G twenty summit. There
was one in April in London, and all the other
leaders around the table here was the new President of
(14:23):
the United States. On their mind was asking him, Okay,
what are you going to do to bring the Doha
Round to successful conclusion this year? And the President said,
all right, We're going to go back and take a
look at this, and he asked a group of us
to do a study, and by the summer we had
come back to him and said, this Doha Round isn't
going to get done. The door A Round was founded
(14:43):
on this fundamental premise in two thousand and one that
basically developing countries. It was called the Development Round, and
the primary beneficiaries of the door A Round would have
been developing countries, not industrialized countries. And the fundamental premise
was developing countries shouldn't have to live by too many
rules industrial countries should, and this would help the developing
(15:06):
countries catch up. By two thousand and nine, when we
saw what had happened with China between two thousand and
one and two thousand and nine. There was no way
that an agreement that gave China a pass on rules
so they could continue to expand its manufacturing and undermine
manufacturing around the world, that that was going to fly.
And the President went back to the other leaders at
(15:27):
the next year twenty meeting and said, the Doha Round
is not going to get done on the path that
is currently on. And I remember we were at a
G twenty summit and the other leaders all went around
and read their talking points. The traditional talking point at
the time was the Doha Round will get completed by
December this year or by the ministerial this year. And
you know, President Obama intervened, He made his point. The
(15:49):
other leaders read their talking points, and he put his
flag back up and said, you know, you guys aren't listening.
This isn't going to happen. And that was the first
indication that something needed to change. And then we were
sitting down with the Chinese bilaterally in lots of consultations,
sort of on ending consultations, and we'd have this conversation
(16:10):
with them and remind them that their tremendous success was
based on a benign international environment, the capacity to export
to the rest of the world, and that if we
didn't address these underlying concerns, stayed on enterprises, subsidization, IPR rights, etc.
That benign international environment was going to disappear. And that,
of course, is exactly what's happened, and that's the bipartisan
(16:34):
consensus against China that has now emerged. We started warning
them of that back in two thousand and nine twenty ten,
and I think we made some modest progress during the
Obama administration to get them changed certain practices. But by
the time President she came in and made it clear
he was going to be dominant in the following sectors.
He was going to reduce his dependency on the rest
(16:54):
of the world and increase everybody else's dependency on China,
the game was over.
Speaker 3 (16:59):
Lead into my next question, which is we've talked a
lot about how you know there was this break in
the rules based liberal trading order. Was there a single
moment where you went like, Aha, this has fundamentally broken
instead of just like slowly declining, slowly changing, was there
something that sticks out to you about, Wow, this is
(17:21):
actually changing right now.
Speaker 4 (17:23):
So I think that Doha moment back in two thousand
and nine was one of them. I also think later
on in the Obama administration, we were trying to negotiate
an agreement over environmental goods. It was a list of
two hundred and fifty or so products that would have
been good for countries to buy more of and produce
(17:44):
more of because it was good for the environment, for
climate change or otherwise. And it failed. It failed over
bicycles that between China and the EU. The EU was
protecting the Polish bicycle industry. I wanted to put bicycles
on the list, and they couldn't agree on what to
(18:05):
do with bicycles, and so the entire agreement fell over
that one issue. And to me, it's sort of underscored. Okay,
we're pretty far from reaching consensus that if we can't
reach agreement over bicycles, we're not going to reach agreement
over things that are much more meaningful.
Speaker 2 (18:21):
Were you surprised at all? I want to we start
to move a little bit closer to the present. But
before we go to the present, was it inevitable that,
in your view, that the Biden administration ended up as
a continuation slash expansion of some of the Trump restrictions.
Was there still an opportunity to turn somewhere closer to
(18:42):
a pre Trump path.
Speaker 4 (18:44):
I think there was an opportunity to make some changes,
but not to go back to the way things were before.
The Biden administration, for example, launched a review of the
China tariffs, and I think in many respects, the by
administration was very strategic in how it approached export controls
and foreign investment constraints, was very targeted the tariffs. They
(19:06):
launched a review to try and distinguish between strategic and
non strategic tariffs. There's a case to be made for
tariffs if there's unfair trade practices, or if it's a
product that you really need to produce here in the
United States. You don't want dependency, But do we need
tariffs on t shirts and underwear and socks? Is that
important to our national security? And they never got themselves
(19:28):
to the position of reducing those tariffs. And to me,
it's not necessarily a criticism of the Biden administration. I
think it just goes to show that tariffs are easy
to put on and hard to take off, because once
they're on, there are constituencies that are supportive of them,
and any movement to reduce tariffs, particularly in this political context,
(19:49):
is seen as being weak on China, even if it
makes pure sense from an economic point of view. Who
is hurt most by tariffs on underwear t? Shirts? And
it tends to be low income Americans who spend a
disproportionate amount of their disposable income on imported goods, And
we could afford to bring in those products from China
(20:10):
without questioning our national.
Speaker 3 (20:12):
Security, without losing our strategic underwear producing capacity. Although I
think the US military does actually have some strategy.
Speaker 4 (20:21):
There are restrictions. Yeah, under I used to call it
the Department of Defense the Department of War, that require
uniforms for where to the things to be made in
the United States.
Speaker 3 (20:32):
Fun fact, how would you actually describe the current state
of the global trade system, because you know, I've heard
people say there are shades of mercantilism, protectionists, that sort
of thing. What's your description of where we are right now?
Speaker 4 (20:47):
Well, I think the challenge of where we are right
now is you have the two largest economies in the world,
the US and China, basically following their own set of
rules rather than the multilateral rules based system that the
US was very much driving the creation and the defense
of over all these over all these years. And when
you have the two largest economies doing that, the question is, well,
(21:10):
what are their other economies going to do? Are they
going to start imitating the US or China? Will they
continue to abide by the rules if nobody else does.
I think they're all sort of wrestling with that question
because for some of them, like the European Union, European
Union is more ideologically in favor of free trade, integration,
the rules based system. The whole notion of the European
(21:31):
Union is based on that bringing the European countries together,
let alone the rest of the world. So it's harder
for them to make this leap than it has been
for the United States. But I think the reality is
is that the system is under great stress and we're
going to have to think through how does it evolve,
What are the elements of it that we want to
(21:51):
try and preserve or reconstitute, and how does it need
to change to take into account not only the lessons
of the last eighty years prior to Trump, but the
lessons of the Trump administration. You know, some of which
will be instructured.
Speaker 2 (22:20):
Let's talk more about some of the paths that things
could go, because I'm thinking about sitting aside even the
Europe in the US, you know, there was the bricks
gathering recently. These are there are a lot of countries
whose own developmental trajectory could be undermined by China's manufacturing
success right, and yet perhaps because of the actions of
(22:43):
this administration, et cetera, they don't feel that there is
a sort of comfortable home or friend in DC and
that maybe it makes more sense for them even given
the competitive challenges to be friendlier with Beijing, et cetera.
What is your view on that? Do you believe there
could be a new I mean, one thing we've heard
(23:04):
we were talking to We recently interviewed Robert Kaplan, vice
chairman over at Goldman Sect. His view was globalization is alive,
and well, it's just that the US isn't really part
of it, and that we're actually re emerging sort of
free trade, etc. Acceptance with China at the home Is
that a fair characterization? Like what is happening with these
mass of other countries as they think about who their
(23:27):
partners and friends are.
Speaker 4 (23:28):
So, first of all, I think I think globalization is
not over. Other countries continue to move ahead to integrate
their economies. European Union has signed additional trade agreements with
Marcasour that're working on one with India. Africa has a
continental wide free trade agreement signed a few years ago
that they're in the process of implementing. So I think
(23:50):
Robert Kaplan's observation that it's the US that has exempted
itself is to a certain degree correct. I'm not sure
the next step is that this is all in a
shift to China, and it's going to be a China
led block because there's no country that's more concerned about
the potential adverse impact of Chinese exports on their own
(24:11):
manufacturing and economic aspirations than India, India, and you could
add Brazil, you could add Indonesia, you could add South Africa.
They're all deeply concerned that if the US and Europe
begin to close their markets, all that excess capacity from
China has to go somewhere, and it could well get
dumped in their markets and hurt their capacity to build
(24:31):
up their manufacturing base as well. And so I've been
of the view that we had this. The Cold War
was about bipolarity US Soviet Union. The wall came down,
the Soviet Union was dismantled, and that was kind of
a unipolar moment. That's over. Now that thirty year period
is over. What we have now isn't multipolarity. It's not
(24:54):
like you've got two or three camps that do everything together,
a China camp, a US camp, some other camp. I
think it's really more akin to like polyamorous life right
in India is the prompt. India is the greatest, is
the greatest example of this. India loves the United States
(25:16):
released until recently, for technical technological cooperation, for civil nuclear cooperation,
for investment, for the relationship between the Indiandia aspora and
our you know, entrepreneurial ecosystem.
Speaker 1 (25:31):
Here.
Speaker 4 (25:32):
They love Russia for oil, for arms, They love Iran
for oil. They love and they hate, depending on the
day they've had. It's one of the countries they've gone
to war with, you know, on their border. They've had skirmishes,
people have died in armed conflict between India and China.
But then as you saw recently, there was a conference
(25:52):
in China where you had Mody she and putin holding hands,
walking down the red carpet together. So I think India's
is archetypal example of trying to play these relationships.
Speaker 2 (26:05):
They were during the Cold Wars too, right, they were
non aligned, that's right, right.
Speaker 4 (26:10):
I mean it's changed now then they were non aligned.
Now I think they're multi aligned, so they'd be aligned
with the polyamorous and you could use the same analysis too,
I think cover a lot of other countries, a lot
of the other Middle countries. That makes it a much
more complicated world. You know, in retrospect, the Cold War
was very simple. It was black and white. You were
with us, you're with the Soviet Union, you know, and
(26:31):
there were some proxy wars in between, but it was
pretty it was pretty simple. This is much more complicated,
and it leads to the view that you're going to
have to be very proactive and creative and creating coalitions
of the willing around various issues, because sometimes India might
be in it, sometimes they might not. Sometimes China might
be in it, sometimes not. And I think that's the
(26:51):
challenge for the United States to continue to exert leadership
going forward.
Speaker 3 (26:55):
How resilient would those smaller coalitions of the willing act
actually be because I can imagine maybe it's easier to
negotiate with a smaller group, maybe you don't get caught
up in debates over bicycles and things like that. But
on the other hand, if you don't have like a
big trading partner who is necessarily driving the agenda, it
(27:17):
seems like it might be a little bit more difficult
to enforce.
Speaker 4 (27:22):
I think you need a combination of smaller groups of
like minded countries. But it does, to your point, tracy,
require leadership, and in the past, the US has been
a leader of it. I mean, you've got some very
strong examples, like NATO. You know, a military alliance is
the strongest example of a plurilateral group, so something less
than the whole world, but like minded countries that have
(27:43):
agreed to do certain things together because they have a
combination to do so. I'm not sure it would exist
without US leadership and US driving it going forward. That
was true of the transpecific partnership as well. I think
it could be true of a number of these other things.
And by the way, China is very good at this.
I mean the conference, the Shanghai Cooperation Organization Conference that
they recently held, where Mody and others were present. That's
(28:06):
a good example of them pointing together coalitions. Bricks is
another good example. Now we can talk about the strengths
and the weaknesses of bricks and where the countries actually
have common interests and conflicting interests. But it's that kind
of drive that you need a leader and you need
a group of like minded countries.
Speaker 2 (28:23):
Let's talk a little bit more about some of these
tensions that emerge, because it does sound like, you know,
bricks is a nice acronym did Gremonial from Goldman sex
As in management came up with in two thousand and one,
in which may now be you know, this important geopolitical
entity we'll see. We don't really know for sure yet,
(28:44):
but it seems like one possibility is that, Okay, the
US we feel that we need to have in key
strategic sectors some sort of you know, capacity to build
semiconductors or maybe capacity to build batteries. At least there
was a big push under at under the Biden administration.
Of course, China has that and it's growing. I mean,
(29:05):
when people think about the economy going forward, is there
a risk that essentially every country feels they have to
make that decision that India feels it has to have
its own battery making capacity, the Germany feels it has
to make its own battery making capacity, and that there's
a sort of domino effect and we just wind up
in a much costlier, less efficient world.
Speaker 4 (29:27):
Well, I think we are heading towards a cost layer
less efficient world. I'm not sure that's necessarily a bad
outcome in that to go down the path of greatest
efficiency could be at least in the short run, to
become utterly dependent on China for all of this product
because they can produce things cheaper, not not always because
(29:47):
it's cheaper labor, but because they become very efficient infrastructure,
massive scale. And I think the question is is it
a good thing? I mean that the US have a
battery industry and that Europe have a battery industry.
Speaker 2 (30:00):
It's probably a good thing.
Speaker 4 (30:01):
It may not be as efficient as relying completely on China,
but having that diversification, particularly over the long run, is
a positive rule number one of risk management diversification. And
yet we became very complacent and very it became very
complacent over the years of just relying on China as
our manufacturing floor. And now I think companies have come
(30:24):
to the conclusion, whether it's because of natural disasters, COVID
or political intervention as we've seen with China, that it's
to their benefit, their economic benefit, even over the longer run,
to diversify, even in the short run if it's more expensive.
Speaker 3 (30:40):
With your trade representative, hat On, can you maybe say
something about how you view military strategy and I guess
trade and this idea of well, maybe we want to
be independent, maybe we want to have independent capacity in
something that's strategically important, like semiconductors or I don't know,
making ballistic missiles or something like that. How does the
(31:02):
US government actually think about the relationship between trade and
military might.
Speaker 4 (31:07):
So I think over time, broadly economics and national security
have converged into economic security, and we're sorting through what
that means in practice. So in the case of the
Biden administration, they talked about a small yard and a
high fence. So take a limited number of technologies and
say these technologies we refuse to export to our competitors
(31:31):
and our adversaries. We refuse to allow them to buy
US companies that specialize in those technologies, and refuse our
companies to who dominate that area to invest in China
and give them their capacity, but it was a relatively
few sectors, relatively few technologies. The question is, is there
(31:51):
an exorable set of pressures to expand that yard and
to add more and more things to it, and where
is it appropriate and where is it not appropriate? And
I think that's what we're now sort of wrestling with.
We're highly dependent on China for all the ingredients that
go into our pharmaceuticals. Do we feel comfortable with that?
China has done nothing to say they would cut it off,
(32:12):
but they could, and we've seen recently China has used
its choke point capacity rare earth's magnets to demonstrate that
it has leverage too, and it worked. The Trump administration
raised tariffs to one hundred and forty five percent on China,
China restricted the export of certain rare earths and magnets,
(32:33):
and suddenly there was a de escalation. And so we
have to now wrestle with that and decide over the
long run, what products do we actually need to be
made in the United States because they're so critical to
national security or our sense of national security, and which
ones And this is where there's been I think in
sufficient attention, which ones can we rely on our allies
(32:54):
and partners because we probably can't produce everything at least
in the short run, makes sense to produce everything ourselves.
But can we rely on Canada and Europe and Japan
and South Korea and Mexico for some of this production
or in India? And how do we differentiate between which
products fit in what group? And therefore then what do
(33:15):
we need to do about it? To drive production here
we're necessary, and to develop the relationships with the allies
and partners where possible.
Speaker 2 (33:22):
The idea of friends shoring or whatever you want to
call it sounds very intuitive, and it's like, we don't
need to build a ton of shipyards. Maybe we could
get the Koreans to do that for us. Or I
don't know. The private fins are good at I'm not sure,
et cetera.
Speaker 4 (33:36):
The fins are very good.
Speaker 2 (33:38):
Yeah, that's right, one of these facts that we've learned
over the years. But is there I mean, when you
look at the current administration, do you see anything other
than widening a gulf between those partners? Like yeah, it
sounds great to have a nice relationship with the Koreans
for them to build more ships for us, and then
(34:00):
that solves the problem of scale and redundancy, etc. But
in practice, from your perspective, is going the opposite direction.
Speaker 4 (34:08):
Well, look, I think one of the challenges of any administration,
but it's certainly evidence in this one, is the connecting
of dots between one policy objective and another policy objective.
And so yes, in the short run, it's going to
take us a while to build up our shipbuilding industry,
and it's going to require a lot of government support,
and I mean it's going to require a lot of
(34:28):
policies that we've not yet adopted. Perhaps it's something we
should do, but it will take years to really build
that up. In the meantime. Should we look to Korea,
Should we look to Japan? Should we look to Finland
for the ships that we need right now? That's one
set of objectives. Then you have the raid on the
Hondai plant, which was another set of objectives, objectives around migration,
(34:52):
illegal migration, and illegal workers. I sometimes wonder whether the
dots are being connected within the administration or whether there's
a view and they may be right, they may be wrong,
but they can have it both ways. That they can
come down on Korean workers in the United States and
still look to Korea and say you will deliver US chips.
Speaker 3 (35:12):
And share your expertise and technical knowledge and.
Speaker 4 (35:15):
And help US billship building here in the United States.
Speaker 3 (35:17):
I want to broaden out the conversation, very ambassador, of course,
just to broaden out the conversation.
Speaker 2 (35:24):
Though.
Speaker 3 (35:25):
Back in March, I wrote an Odd Thoughts newsletter titled
the US is looking a lot like China. I got
an enormous amount of pushback on it, but you actually
wrote something similar, And I don't even have a question.
Just tell me that I was right.
Speaker 4 (35:42):
You're right, you were right.
Speaker 3 (35:44):
Thank you.
Speaker 4 (35:44):
Look, I think we spent years. We always thought there
was a theory of convergence. By bringing China into the
international system, we would become more alike Now. Our view
was they would become more like us, like US, more open,
more liberal, more market oriented. And we used to go
to them and lecture them about don't be protectionists, don't
(36:05):
restrict foreign investment in your country, don't make it impossible
for our companies to invest in your company, don't engage
in industrial policy and subsidization, and don't take stakes in
private companies and intervene in the private sector, and now
what are we doing. We are protectionists, we have restrictions
on foreign investment, we are engaged in limited industrial policy,
(36:29):
and now we're beginning to take stakes government stakes in
private companies. So rather than them becoming more like us,
we have become more like them. And the challenge of that,
I think is that we're now competing with them on
their playing field, under their set of roles. I'm not
at all convinced that we can compete on their playing
field as well as we can compete on ours, because
(36:52):
we don't have unlimited We can't go to Congress and
say give us unlimited resources to invest in this sector
or after that sector. We can't subes you know, the
commanding heights of the technology competition. And I think it's
unfortunate because I think the Chinese can play that game
much better than we can.
Speaker 3 (37:10):
Yeah, I think this is a really important point because
when we're thinking about you know, choke points in terms
of manufacturing or whatever, China has the most experience out
of practically anyone in the world of like building up
strategic capacity and doing it in a very conscious and
interventionist way.
Speaker 2 (37:28):
Well, and also a lot of that sort of massive
oversupply that people call it is maybe to some extent intentional,
but maybe also just to some extent a function of
their provincial versus provincial relationship, where the provinces are hypercompeting, etc.
For market share. That's just a dynamic that does. Nothing
(37:52):
like that exists in the United States. And so the
idea of moving in that direction all kinds of conditions,
either by design or just sort of by happenstance of
the political structure of the system.
Speaker 4 (38:06):
It's just very different, exactly, right, Joe. I think you know,
in their case, leadership says we want to be dominant
in these fifteen sectors. Every provincial governor looks at that
and says, all right, I'm going to take.
Speaker 3 (38:19):
My local stage judge to ability.
Speaker 4 (38:23):
And we have you know, in China, I think they're
over one hundred ev companies, right, you know, and so
and they're producing and they will be producing enough cars
to meet the demand of the entire world. So where
does that leave the US auto sector? Where does it
leave the European auto sector. Now, in our case, I
think you know, we have effectively kept them out. We've
(38:44):
effectively said we're not going to have Chinese evs here,
at least at the moment, Europeans have a slight you know,
more schizophrenic about it. They've also adopted protectionism, but they're
more open I think to having Chinese imports. What does
that mean for the future of Volkswagen, for the future
of now, for the future of the other auto companies,
and you know, in that case it could have broad
political implications in Europe as well over time.
Speaker 3 (39:08):
I hesitate to ask this question, but is there anything
the US can learn from China in terms of you know,
trade and building out strategic industries.
Speaker 4 (39:18):
Well, look, I think China. We shouldn't make China into
more than it is. China's made huge mistakes. They've wasted
hundreds of billions of dollars on bad domestic investments, and
they've got, you know, tremendous challenges, including demographic challenges that
the US currently it doesn't have, and so we shouldn't
(39:39):
make them out to be twelve feet tall. I think
one thing that is current is to think through, Okay,
if there is an industry that you think is important
for national security or otherwise, what's the best way of
supporting it by the government. The Trump administration's approach I
think has been based largely on tariffs. We create this
(40:00):
wall of tariffs, companies will have to produce or have
to move their supply chain to the United States, and
that's how we'll build out this area. I think what
we've seen in China is that yes, they've used tariffs
and other restrictions, they've also used industrial policy. They've also
invested in the subsidies credit free energy. They've also invested
(40:23):
heavily in R and D in many sectors, the life sciences,
obviously AI, among others, government subsidies and government investment, and
it's that combination of policies that probably is more effective
than tariffs alone. To me, the concern is we're approaching
this from a position of tariffs are the answer to everything.
(40:44):
We know what the cost of tariffs are, and we're
taking a gamble on whether the benefits will be there
and whether tariffs alone are going to re manufacture the
United States economy.
Speaker 2 (40:56):
You mentioned that some degree of greater redundancy and higher
costs is not the end of the world, particularly if
there's some political it creates some political sustainability.
Speaker 4 (41:07):
What is it?
Speaker 2 (41:07):
What does the left tail risk looks look like to you?
What is the scenario in which things really, the wheels
really come off one.
Speaker 4 (41:18):
The US doesn't have a great history with industrial policy,
so if we were to multiply our efforts in various
ways but not do it well, that would that would
be a waste of resources and costs that we didn't
need to need to incur. I think if we don't
go back to the point about allies and partners, if
we insist on reshoring everything and not ensuring anything, I
(41:41):
think we probably lose some of the economies of scale
and some of the comparative advantage that we have. I
also think if we're if the if the existential threat
is competition with China, if they are the pacing challenge,
working with allies and partners is our way to reach scale.
(42:02):
We're a big economy, we're the biggest economy in the world,
but when it comes to manufacturing, we're not going to
be able to compete with China alone necessarily, or rather,
we're gonna be able to compete with China much better
if we do so with our allies and partners.
Speaker 3 (42:16):
I have just one more question, this is the most
important one. How good are you at Tradel?
Speaker 2 (42:21):
Do you ever play that we do.
Speaker 4 (42:22):
I love these games Trade All and World a World.
Speaker 2 (42:27):
Oh yeah, that's the other one. I didn't get into that.
Speaker 4 (42:28):
Yeah, the trade all I think is a great is
a great game. I don't always get it right, but
I it's it's a good Uh. It's a good reminder
of just how complex certain economies are.
Speaker 2 (42:39):
After we're done with this, could you help us find
that dairy farmer who explained the five.
Speaker 4 (42:44):
Absolutely, it's a fascinating lesson.
Speaker 2 (42:47):
Michael Frohman, thank you so much for coming online.
Speaker 4 (42:50):
Thanks for having me.
Speaker 2 (42:50):
Thank you.
Speaker 3 (42:51):
That was great.
Speaker 2 (43:05):
Tracy. I'm really I'm really a fan of this neologism
or wherever it came from, the polyamorous world order, because
you know, people talk about the G seven and what's
his name talks about the G zero Yeah, and other
people talk, oh, bipolarity. But but I think this is
a good one.
Speaker 3 (43:23):
It is kind of funny to me that there's this
idea out there that just because Goldman came up with
like a catchy acronym for the bricks, that somehow that's
going to like create a new strategic coalition from.
Speaker 2 (43:35):
It's like so pretty dick, so perfect countries. We should
have Jim o'neilon to talk about. We've never talked to
Jimo neilon, So the thought of him coming up with
this paper, these are going to be the big economies,
and now they now that it's a rival. Yeah, but
the West is like a really good.
Speaker 3 (43:49):
That would be really interesting. But I do think Okay,
one thing you can say about polyamorous relationships is they
tend to come with a lot of drama, right, and
so it it definitely feels like we're going to have
more instability, or at least like more things changing, more
things in flux, more volatility.
Speaker 4 (44:08):
Right.
Speaker 2 (44:09):
So this idea that I find it compelling, this idea
that the old globalization can't just be replaced with the
same globalization. Except the leader is right. I mean, the
US was this huge trade deficit country. China is a
huge trade surplus country. That naturally means that its relationship
(44:31):
with all of its partners on some level, even if
it wants to be at the forefront of creating new
terror free zones, et cetera, is going to be of
a different type than the relationship that the US had.
Speaker 3 (44:45):
Absolutely, shall we leave it there, Let's leave it there,
all right? This has been another episode of the Authoughts podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (44:53):
And I'm joll Wisenthal. You could follow me at The Stalwart.
Follow our guest Michael Frowman. He's at Mike Frohman. Follow
our producers Krmen Rodriguez at, Kerman armand Deshil Bennett, a Dashbot,
and Kilbrooks and Kalebrooks. From our odd Lots content, go
to Bloomberg dot com slash odd Lots were the daily
newsletter and all of our episodes, and you can chat
about all of these topics twenty four to seven in
(45:14):
our discord Discord dot gg slash od Loots.
Speaker 3 (45:18):
And if you enjoy odd Lots, if you like it
when we talk about the future of global trade, then
please leave us a positive review on your favorite podcast platform.
And remember, if you are a Bloomberg subscriber, you can
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you need to do is find the Bloomberg channel on
Apple Podcasts and follow the instructions there. Thanks for listening.
(46:04):
In the a
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3 (00:21):
I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2 (00:23):
Tracy, you know, we're several months, I guess, like five
months or so, recording to September sixteenth, five months or
so since Liberation days, since the trade war started. By
and large, the world is still kind of working right.
You could see its effects for sure, and certain categories
and so forth, but by and large, I don't think
the contours of the economy look that much different than
(00:46):
they did, say in March or April.
Speaker 3 (00:47):
Look, I'm still missing my auction item that's supposed to
be mailed from the Netherlands, so it has affected me directly.
Speaker 2 (00:54):
Wait what happened with it? Wait? Say more?
Speaker 3 (00:56):
Okay, So I won something from a Dutch auction house
and they were supposed to mail it in house shipping,
and instead of mailing it, they sent out an email
saying that they can't mail it because everyone's trying to
figure out the new tariff schedule and customs and things
like that. I still haven't heard from.
Speaker 2 (01:13):
Them, but it still feels like something happened. There was
some sort of rupture. Kind of hard to imagine going
to a March twenty twenty five world again, but also
hard to imagine going to a pre Trump one world ever, Like,
it's hard for me to imagine that in my lifetime
that there will ever be a sort of twenty fifteen
(01:35):
style trading relationship between the US and China.
Speaker 3 (01:37):
Well, I could be wrong, never say never, but.
Speaker 2 (01:40):
It's just hard for me to see at this point.
Speaker 3 (01:42):
At this point, like, it's not a single administration thing. Right,
We've had Trump one point oh, and then Biden continued
a lot of the tariffs and even added some new ones,
and then we have Trump two point zero, which is
arguably going even harder on China. So it does seem
like at least a durable trend.
Speaker 2 (01:59):
Yeah, not a fly. And as we've discussed, you mentioned
the fact that Biden was a continuation arguably an expansion
of Trump one, particularly with some of the export restrictions
on technology. Yeah, this is one of the rare trade
rethinking the global trading system, whatever that means, is one
of the rare areas of bipartisan consensus in dc IS,
(02:22):
as has come up in many episodes.
Speaker 3 (02:23):
Yeah, that in housing, that in.
Speaker 2 (02:25):
Housing right, that housing is very expensive. We really do
have the perfect guest, someone who has a very big
picture view on trade, someone who has been directly involved
in trade negotiations, someone who remembers the sort of pre Trump.
Speaker 3 (02:40):
One, the long long long ago, the.
Speaker 2 (02:42):
Long long long ago global trading system, and who could
talk about whatever remnants of that are left, or even
maybe who can explain to me what the global trading
system was. We're going to be speaking with Michael Frohman.
He is the President of the Council on Foreign Relations
and he was the former US Trade repper reve during
the Obama Obama two administration twenty thirteen to twenty seventeen.
(03:05):
Has continued to write a lot about this topic. So,
Michael Frohman, thank you so much for coming out odd last,
Thanks for having me. Absolutely What does the US trade
representative do? You had that job? I actually realized I
don't really know.
Speaker 4 (03:18):
It's a great job. It really has the function of
negotiating trade agreements and enforcing US trade rights under previous agreements.
The reason I love the job is that it combines
high diplomacy, sitting down with ministers, presidents, prime ministers of
other countries, trying to reach agreements with having to have
(03:39):
a really detailed understanding of elements of the US economy.
I mean, I learned more from American farmers teaching me
the five hundred things you can do with a molecule
of milk and how they manipulate a molecule of milk
to circumvent trade restrictions and get around tariffs, so you
export it as butter or his way, or as low
(04:01):
calorie powder or whatever.
Speaker 5 (04:04):
This is a whole episode episode, right, But that's really
one example of the literally thousands of issues you have
to learn as US trade rep to be able to
sit down with your counterparts in other countries and negotiate agreements.
Speaker 3 (04:16):
Can you give us an idea or a sense of
the average negotiation? What exactly is the process? Like do
you meet for the first time in a designated room
somewhere or is there prep that goes into these you're
exchanging emails? What exactly happens?
Speaker 4 (04:32):
So in the past, and of course it's a very
different situation now, But in the past, the US or
another country might come up with an idea of what
they wanted to do in a trade negotiation, a set
of issues they wanted to take on a set of
countries they wanted to negotiate with, and they would go
around and do consultations with other countries, float the ideas,
see what kind of feedback they got, and scope out
(04:53):
the nature of the negotiation. Is it going to be
just about goods and tariffs? Is it going to touch
upon agriculture, sure and regulations and services and labor and
environment and all various other issues that have become part
of trade negotiations in the past, and get agreement by
the other countries that this was the agenda. And then
in the past usually it's the US that has been
(05:15):
sort of driving the agenda. These would be the topics
we would deal with. The US would come up with
proposals of what are the disciplines that we would like
to see in each of these areas, what are the
rules that we'd like to see. And it was the
way the US brought other countries along to adopt high
standard rules across one sector, one subject matter or another.
And the idea was, we know, we live in a
(05:37):
high wage, highly regulated economy. We compete with economies that
oftentimes have lower wages, lower regulation, and if we could
raise other country standards closer to our own. It would
level the playing field for American workers and farmers and
ranchers and make it easier for us to compete.
Speaker 2 (05:55):
I mean, for better or worse. It really just seems
like a totally different era and out the idea of
getting to the idea of going back to some world
where the US is actively working with a bunch of
country on rules rather than rates terror for it really
does seem it seems like ancient history. Now, it just
seems right.
Speaker 4 (06:15):
Look, I think that's right. First of all, I think
I think the international trading system had been under stressed
for some time. President Trump, in some ways put was
the final nail in the coffin of it. But you know,
the global multilateral rules based system, that's like the wto
the World Trade Organization, where one hundred and sixty plus
countries got together, agreed to a set of rules, agreed
(06:36):
to some mechanisms for enforcing those rules and for monitoring them.
That's been under stress for a long time. There's been dissatisfaction,
and I think now, in fact, you're right. I think
we can't go back to the way things were pre Trump.
We're gonna have to think about what comes next.
Speaker 3 (06:53):
Just to play a devil's advocate for a second, to
what extent did we actually have a rules based trading
system in the sense that everyone was actually beholden to
the same limitations or the same rules, Because looking back,
there were always accusations about China cheating or maybe the
US was taking advantage in some way, And in fact,
(07:14):
you could argue that that sense of unfairness is kind
of what got us to where we are today. So
was it really rules based for everyone?
Speaker 4 (07:24):
So I think we have to look back at the
whole history of the post war period because for decades,
China wasn't a factor, it wasn't part of the global
trading system, it wasn't a major economy, and it was
the US and Europe, Japan, others who came together to
really form this set of rules. And it's never a
perfect system. My sense is what rules means is that
(07:47):
most countries follow most of the rules most of the time,
not that it's one hundred percent perfection. By the way,
that's true when you have laws in the United States,
I mean we have laws of the United States because
people do commit crimes. The existence of laws does not
prevent people from committing crimes. That's why you need enforcement.
Same thing is true on the international side as well.
The big difference, as you pointed out, Tracy, is when
(08:09):
China became a major factor in the global economy and
began to integrate globally. On one hand, there was an
opportunity to say, Okay, this is an opportunity for bring
China into the global system, get them to adopt the
set of rules that the rest of us have all
agreed to, because they appear to be on this path
towards market reform, openness, liberalization. I think what happened in
(08:31):
reality is that trajectory wasn't as linear, didn't go as far,
didn't go as fast as people anticipated. And what we
did not anticipate is that somebody like President She would
come in and in fact stop or reverse it. And
so now we have an economy that is huge, second
largest economy in the world, biggest manufacturing part of the
(08:52):
global economy, likely to be accounting for something like forty
five percent of all global manufacturing in a few years,
which is the I guess that any country has ever
been in history, and it's following a fundamentally different set
of rules, and that has led to a law of
the stress in the international system.
Speaker 2 (09:25):
Can you explain maybe the philosophical premise behind the idea
that trade with China? I guess, why do we care
about what their internal rules are? Right theory of trade,
it's sort of okay, they're cheaper for whatever reason, or
they're more efficient, et cetera, and so you know, comparative
(09:47):
advantage we benefit from that. Why does the global trading
system why is it or was it or is it
premised on this notion that all of the participants would
and in some sort of more liberal direction with their
domestic economies.
Speaker 4 (10:04):
You know, I think it's because the actions that China
has taken domestically to drive they're really quite remarkable economic
growth over the last few decades does have ramifications outside
of China, has ramifications for the rest of the world,
for manufacturing in the rest of the world, for other factors,
and so it's not something that can be limited to
(10:24):
China if China gets to where it's going, because it
steals intellectual property, because it produces over capacity, so it
creates far more factories than it needs to for the
reasonable demand for a product in order to drive other
producers out of the market in other countries that has
an average effect on us. If they subsidize state owned
(10:46):
enterprises or even private enterprises in such a way that
it creates this unlevel playing field, then it affects the
rest of US as well. And I think that's what's
really happened, is that China, whether it's a state owned enterprise,
is subsidization, intellectual property rights, theft, government intervention into the
private sector, all towards positioning China as the leading manufacturer.
(11:09):
But it has come at the expense of other industrialized countries,
in some cases other emerging economies, and that's why there's
been thisess counter reaction.
Speaker 3 (11:17):
So I know you were trade representative before the tensions
with China really ramped up under the first Trump administration,
But how were you thinking back then about incentivizing other
countries when it comes to trade negotiations like KARRA and
stick strategy. Was it mostly about incentives and if so,
what were you giving them or was it sometimes maybe threats?
Speaker 4 (11:42):
So you have to use both. I think on the
threat side, it's not really threats. It was enforcement that
we would bring cases against countries, including China at the
WTO or against other trading partners where we had arrangements
if we felt that they were violating our rights under
those agreements. We brought during the Obama I think we
brought the most cases ever brought against China. We won
(12:03):
all the cases that got to conclusion. The problem was
China would find ways either of delaying implementation or by
the time the fix was implemented, the relevant industry in
the United States or elsewhere was gone, and so it
was really sort of cold comfort. And that's one of
the challenges I think that we saw in the World
Trade Organization. I think on the incentive side, that's where
(12:24):
trade agreements, real trade agreements come into play. I was
involved in something called the Transpecific Partnership, which was twelve
countries around the Asia Pacific region that were working on
opening their economies to each other, abiding by a high
standard set of rules. Some of the countries already had
free trade agreements with US, about half of them did,
(12:45):
so we weren't giving them any more access to our economy.
We'd already given them access. But at the table we
had Japan, and Japan was an economy that had never
really opened up to other markets, and these other countries
knew that they couldn't get Japan to open on their own,
but if the US was pushing Japan to open, they
would benefit from it. So you had countries like Peru
(13:07):
or Chile who already had free trade agreements with US
willing to raise their labor standards or willing to enforce
environmental laws because they were getting access not to our market,
but to Japan, and that incentive was one that was
powerful for them.
Speaker 2 (13:21):
That's a very uh, that's a very interesting dynamic. Talk
a little bit more about those years twenty thirteen pre
Trump in the actions towards China, because if you said,
by that point Obama had already introduced a record number
of actions against China, winning many of them, winning all
of them to do something, well, all of them that
went to conclusions, all of them that went to conclusion,
(13:44):
but it didn't really matter because either there was some
way to evade or the US industry had been decimated.
Was there something pre Trump, I mean, I don't know.
Whenever that was there a feeling that something has to
change fundamentally in how the US and China trade or
the rules governing that trade.
Speaker 4 (14:02):
At that point, no, absolutely, Look the day one of
the Obama administration. The world had been involved in something
called the Doha Round of negotiations at the World Trade
Organization had been going on since two thousand and one,
and I remember going to a G twenty summit. There
was one in April in London, and all the other
leaders around the table here was the new President of
(14:23):
the United States. On their mind was asking him, Okay,
what are you going to do to bring the Doha
Round to successful conclusion this year? And the President said,
all right, We're going to go back and take a
look at this, and he asked a group of us
to do a study, and by the summer we had
come back to him and said, this Doha Round isn't
going to get done. The door A Round was founded
(14:43):
on this fundamental premise in two thousand and one that
basically developing countries. It was called the Development Round, and
the primary beneficiaries of the door A Round would have
been developing countries, not industrialized countries. And the fundamental premise
was developing countries shouldn't have to live by too many
rules industrial countries should, and this would help the developing
(15:06):
countries catch up. By two thousand and nine, when we
saw what had happened with China between two thousand and
one and two thousand and nine. There was no way
that an agreement that gave China a pass on rules
so they could continue to expand its manufacturing and undermine
manufacturing around the world, that that was going to fly.
And the President went back to the other leaders at
(15:27):
the next year twenty meeting and said, the Doha Round
is not going to get done on the path that
is currently on. And I remember we were at a
G twenty summit and the other leaders all went around
and read their talking points. The traditional talking point at
the time was the Doha Round will get completed by
December this year or by the ministerial this year. And
you know, President Obama intervened, He made his point. The
(15:49):
other leaders read their talking points, and he put his
flag back up and said, you know, you guys aren't listening.
This isn't going to happen. And that was the first
indication that something needed to change. And then we were
sitting down with the Chinese bilaterally in lots of consultations,
sort of on ending consultations, and we'd have this conversation
(16:10):
with them and remind them that their tremendous success was
based on a benign international environment, the capacity to export
to the rest of the world, and that if we
didn't address these underlying concerns, stayed on enterprises, subsidization, IPR rights, etc.
That benign international environment was going to disappear. And that,
of course, is exactly what's happened, and that's the bipartisan
(16:34):
consensus against China that has now emerged. We started warning
them of that back in two thousand and nine twenty ten,
and I think we made some modest progress during the
Obama administration to get them changed certain practices. But by
the time President she came in and made it clear
he was going to be dominant in the following sectors.
He was going to reduce his dependency on the rest
(16:54):
of the world and increase everybody else's dependency on China,
the game was over.
Speaker 3 (16:59):
Lead into my next question, which is we've talked a
lot about how you know there was this break in
the rules based liberal trading order. Was there a single
moment where you went like, Aha, this has fundamentally broken
instead of just like slowly declining, slowly changing, was there
something that sticks out to you about, Wow, this is
(17:21):
actually changing right now.
Speaker 4 (17:23):
So I think that Doha moment back in two thousand
and nine was one of them. I also think later
on in the Obama administration, we were trying to negotiate
an agreement over environmental goods. It was a list of
two hundred and fifty or so products that would have
been good for countries to buy more of and produce
(17:44):
more of because it was good for the environment, for
climate change or otherwise. And it failed. It failed over
bicycles that between China and the EU. The EU was
protecting the Polish bicycle industry. I wanted to put bicycles
on the list, and they couldn't agree on what to
(18:05):
do with bicycles, and so the entire agreement fell over
that one issue. And to me, it's sort of underscored. Okay,
we're pretty far from reaching consensus that if we can't
reach agreement over bicycles, we're not going to reach agreement
over things that are much more meaningful.
Speaker 2 (18:21):
Were you surprised at all? I want to we start
to move a little bit closer to the present. But
before we go to the present, was it inevitable that,
in your view, that the Biden administration ended up as
a continuation slash expansion of some of the Trump restrictions.
Was there still an opportunity to turn somewhere closer to
(18:42):
a pre Trump path.
Speaker 4 (18:44):
I think there was an opportunity to make some changes,
but not to go back to the way things were before.
The Biden administration, for example, launched a review of the
China tariffs, and I think in many respects, the by
administration was very strategic in how it approached export controls
and foreign investment constraints, was very targeted the tariffs. They
(19:06):
launched a review to try and distinguish between strategic and
non strategic tariffs. There's a case to be made for
tariffs if there's unfair trade practices, or if it's a
product that you really need to produce here in the
United States. You don't want dependency, But do we need
tariffs on t shirts and underwear and socks? Is that
important to our national security? And they never got themselves
(19:28):
to the position of reducing those tariffs. And to me,
it's not necessarily a criticism of the Biden administration. I
think it just goes to show that tariffs are easy
to put on and hard to take off, because once
they're on, there are constituencies that are supportive of them,
and any movement to reduce tariffs, particularly in this political context,
(19:49):
is seen as being weak on China, even if it
makes pure sense from an economic point of view. Who
is hurt most by tariffs on underwear t? Shirts? And
it tends to be low income Americans who spend a
disproportionate amount of their disposable income on imported goods, And
we could afford to bring in those products from China
(20:10):
without questioning our national.
Speaker 3 (20:12):
Security, without losing our strategic underwear producing capacity. Although I
think the US military does actually have some strategy.
Speaker 4 (20:21):
There are restrictions. Yeah, under I used to call it
the Department of Defense the Department of War, that require
uniforms for where to the things to be made in
the United States.
Speaker 3 (20:32):
Fun fact, how would you actually describe the current state
of the global trade system, because you know, I've heard
people say there are shades of mercantilism, protectionists, that sort
of thing. What's your description of where we are right now?
Speaker 4 (20:47):
Well, I think the challenge of where we are right
now is you have the two largest economies in the world,
the US and China, basically following their own set of
rules rather than the multilateral rules based system that the
US was very much driving the creation and the defense
of over all these over all these years. And when
you have the two largest economies doing that, the question is, well,
(21:10):
what are their other economies going to do? Are they
going to start imitating the US or China? Will they
continue to abide by the rules if nobody else does.
I think they're all sort of wrestling with that question
because for some of them, like the European Union, European
Union is more ideologically in favor of free trade, integration,
the rules based system. The whole notion of the European
(21:31):
Union is based on that bringing the European countries together,
let alone the rest of the world. So it's harder
for them to make this leap than it has been
for the United States. But I think the reality is
is that the system is under great stress and we're
going to have to think through how does it evolve,
What are the elements of it that we want to
(21:51):
try and preserve or reconstitute, and how does it need
to change to take into account not only the lessons
of the last eighty years prior to Trump, but the
lessons of the Trump administration. You know, some of which
will be instructured.
Speaker 2 (22:20):
Let's talk more about some of the paths that things
could go, because I'm thinking about sitting aside even the
Europe in the US, you know, there was the bricks
gathering recently. These are there are a lot of countries
whose own developmental trajectory could be undermined by China's manufacturing
success right, and yet perhaps because of the actions of
(22:43):
this administration, et cetera, they don't feel that there is
a sort of comfortable home or friend in DC and
that maybe it makes more sense for them even given
the competitive challenges to be friendlier with Beijing, et cetera.
What is your view on that? Do you believe there
could be a new I mean, one thing we've heard
(23:04):
we were talking to We recently interviewed Robert Kaplan, vice
chairman over at Goldman Sect. His view was globalization is alive,
and well, it's just that the US isn't really part
of it, and that we're actually re emerging sort of
free trade, etc. Acceptance with China at the home Is
that a fair characterization? Like what is happening with these
mass of other countries as they think about who their
(23:27):
partners and friends are.
Speaker 4 (23:28):
So, first of all, I think I think globalization is
not over. Other countries continue to move ahead to integrate
their economies. European Union has signed additional trade agreements with
Marcasour that're working on one with India. Africa has a
continental wide free trade agreement signed a few years ago
that they're in the process of implementing. So I think
(23:50):
Robert Kaplan's observation that it's the US that has exempted
itself is to a certain degree correct. I'm not sure
the next step is that this is all in a
shift to China, and it's going to be a China
led block because there's no country that's more concerned about
the potential adverse impact of Chinese exports on their own
(24:11):
manufacturing and economic aspirations than India, India, and you could
add Brazil, you could add Indonesia, you could add South Africa.
They're all deeply concerned that if the US and Europe
begin to close their markets, all that excess capacity from
China has to go somewhere, and it could well get
dumped in their markets and hurt their capacity to build
(24:31):
up their manufacturing base as well. And so I've been
of the view that we had this. The Cold War
was about bipolarity US Soviet Union. The wall came down,
the Soviet Union was dismantled, and that was kind of
a unipolar moment. That's over. Now that thirty year period
is over. What we have now isn't multipolarity. It's not
(24:54):
like you've got two or three camps that do everything together,
a China camp, a US camp, some other camp. I
think it's really more akin to like polyamorous life right
in India is the prompt. India is the greatest, is
the greatest example of this. India loves the United States
(25:16):
released until recently, for technical technological cooperation, for civil nuclear cooperation,
for investment, for the relationship between the Indiandia aspora and
our you know, entrepreneurial ecosystem.
Speaker 1 (25:31):
Here.
Speaker 4 (25:32):
They love Russia for oil, for arms, They love Iran
for oil. They love and they hate, depending on the
day they've had. It's one of the countries they've gone
to war with, you know, on their border. They've had skirmishes,
people have died in armed conflict between India and China.
But then as you saw recently, there was a conference
(25:52):
in China where you had Mody she and putin holding hands,
walking down the red carpet together. So I think India's
is archetypal example of trying to play these relationships.
Speaker 2 (26:05):
They were during the Cold Wars too, right, they were
non aligned, that's right, right.
Speaker 4 (26:10):
I mean it's changed now then they were non aligned.
Now I think they're multi aligned, so they'd be aligned
with the polyamorous and you could use the same analysis too,
I think cover a lot of other countries, a lot
of the other Middle countries. That makes it a much
more complicated world. You know, in retrospect, the Cold War
was very simple. It was black and white. You were
with us, you're with the Soviet Union, you know, and
(26:31):
there were some proxy wars in between, but it was
pretty it was pretty simple. This is much more complicated,
and it leads to the view that you're going to
have to be very proactive and creative and creating coalitions
of the willing around various issues, because sometimes India might
be in it, sometimes they might not. Sometimes China might
be in it, sometimes not. And I think that's the
(26:51):
challenge for the United States to continue to exert leadership
going forward.
Speaker 3 (26:55):
How resilient would those smaller coalitions of the willing act
actually be because I can imagine maybe it's easier to
negotiate with a smaller group, maybe you don't get caught
up in debates over bicycles and things like that. But
on the other hand, if you don't have like a
big trading partner who is necessarily driving the agenda, it
(27:17):
seems like it might be a little bit more difficult
to enforce.
Speaker 4 (27:22):
I think you need a combination of smaller groups of
like minded countries. But it does, to your point, tracy,
require leadership, and in the past, the US has been
a leader of it. I mean, you've got some very
strong examples, like NATO. You know, a military alliance is
the strongest example of a plurilateral group, so something less
than the whole world, but like minded countries that have
(27:43):
agreed to do certain things together because they have a
combination to do so. I'm not sure it would exist
without US leadership and US driving it going forward. That
was true of the transpecific partnership as well. I think
it could be true of a number of these other things.
And by the way, China is very good at this.
I mean the conference, the Shanghai Cooperation Organization Conference that
they recently held, where Mody and others were present. That's
(28:06):
a good example of them pointing together coalitions. Bricks is
another good example. Now we can talk about the strengths
and the weaknesses of bricks and where the countries actually
have common interests and conflicting interests. But it's that kind
of drive that you need a leader and you need
a group of like minded countries.
Speaker 2 (28:23):
Let's talk a little bit more about some of these
tensions that emerge, because it does sound like, you know,
bricks is a nice acronym did Gremonial from Goldman sex
As in management came up with in two thousand and one,
in which may now be you know, this important geopolitical
entity we'll see. We don't really know for sure yet,
(28:44):
but it seems like one possibility is that, Okay, the
US we feel that we need to have in key
strategic sectors some sort of you know, capacity to build
semiconductors or maybe capacity to build batteries. At least there
was a big push under at under the Biden administration.
Of course, China has that and it's growing. I mean,
(29:05):
when people think about the economy going forward, is there
a risk that essentially every country feels they have to
make that decision that India feels it has to have
its own battery making capacity, the Germany feels it has
to make its own battery making capacity, and that there's
a sort of domino effect and we just wind up
in a much costlier, less efficient world.
Speaker 4 (29:27):
Well, I think we are heading towards a cost layer
less efficient world. I'm not sure that's necessarily a bad
outcome in that to go down the path of greatest
efficiency could be at least in the short run, to
become utterly dependent on China for all of this product
because they can produce things cheaper, not not always because
(29:47):
it's cheaper labor, but because they become very efficient infrastructure,
massive scale. And I think the question is is it
a good thing? I mean that the US have a
battery industry and that Europe have a battery industry.
Speaker 2 (30:00):
It's probably a good thing.
Speaker 4 (30:01):
It may not be as efficient as relying completely on China,
but having that diversification, particularly over the long run, is
a positive rule number one of risk management diversification. And
yet we became very complacent and very it became very
complacent over the years of just relying on China as
our manufacturing floor. And now I think companies have come
(30:24):
to the conclusion, whether it's because of natural disasters, COVID
or political intervention as we've seen with China, that it's
to their benefit, their economic benefit, even over the longer run,
to diversify, even in the short run if it's more expensive.
Speaker 3 (30:40):
With your trade representative, hat On, can you maybe say
something about how you view military strategy and I guess
trade and this idea of well, maybe we want to
be independent, maybe we want to have independent capacity in
something that's strategically important, like semiconductors or I don't know,
making ballistic missiles or something like that. How does the
(31:02):
US government actually think about the relationship between trade and
military might.
Speaker 4 (31:07):
So I think over time, broadly economics and national security
have converged into economic security, and we're sorting through what
that means in practice. So in the case of the
Biden administration, they talked about a small yard and a
high fence. So take a limited number of technologies and
say these technologies we refuse to export to our competitors
(31:31):
and our adversaries. We refuse to allow them to buy
US companies that specialize in those technologies, and refuse our
companies to who dominate that area to invest in China
and give them their capacity, but it was a relatively
few sectors, relatively few technologies. The question is, is there
(31:51):
an exorable set of pressures to expand that yard and
to add more and more things to it, and where
is it appropriate and where is it not appropriate? And
I think that's what we're now sort of wrestling with.
We're highly dependent on China for all the ingredients that
go into our pharmaceuticals. Do we feel comfortable with that?
China has done nothing to say they would cut it off,
(32:12):
but they could, and we've seen recently China has used
its choke point capacity rare earth's magnets to demonstrate that
it has leverage too, and it worked. The Trump administration
raised tariffs to one hundred and forty five percent on China,
China restricted the export of certain rare earths and magnets,
(32:33):
and suddenly there was a de escalation. And so we
have to now wrestle with that and decide over the
long run, what products do we actually need to be
made in the United States because they're so critical to
national security or our sense of national security, and which
ones And this is where there's been I think in
sufficient attention, which ones can we rely on our allies
(32:54):
and partners because we probably can't produce everything at least
in the short run, makes sense to produce everything ourselves.
But can we rely on Canada and Europe and Japan
and South Korea and Mexico for some of this production
or in India? And how do we differentiate between which
products fit in what group? And therefore then what do
(33:15):
we need to do about it? To drive production here
we're necessary, and to develop the relationships with the allies
and partners where possible.
Speaker 2 (33:22):
The idea of friends shoring or whatever you want to
call it sounds very intuitive, and it's like, we don't
need to build a ton of shipyards. Maybe we could
get the Koreans to do that for us. Or I
don't know. The private fins are good at I'm not sure,
et cetera.
Speaker 4 (33:36):
The fins are very good.
Speaker 2 (33:38):
Yeah, that's right, one of these facts that we've learned
over the years. But is there I mean, when you
look at the current administration, do you see anything other
than widening a gulf between those partners? Like yeah, it
sounds great to have a nice relationship with the Koreans
for them to build more ships for us, and then
(34:00):
that solves the problem of scale and redundancy, etc. But
in practice, from your perspective, is going the opposite direction.
Speaker 4 (34:08):
Well, look, I think one of the challenges of any administration,
but it's certainly evidence in this one, is the connecting
of dots between one policy objective and another policy objective.
And so yes, in the short run, it's going to
take us a while to build up our shipbuilding industry,
and it's going to require a lot of government support,
and I mean it's going to require a lot of
(34:28):
policies that we've not yet adopted. Perhaps it's something we
should do, but it will take years to really build
that up. In the meantime. Should we look to Korea,
Should we look to Japan? Should we look to Finland
for the ships that we need right now? That's one
set of objectives. Then you have the raid on the
Hondai plant, which was another set of objectives, objectives around migration,
(34:52):
illegal migration, and illegal workers. I sometimes wonder whether the
dots are being connected within the administration or whether there's
a view and they may be right, they may be wrong,
but they can have it both ways. That they can
come down on Korean workers in the United States and
still look to Korea and say you will deliver US chips.
Speaker 3 (35:12):
And share your expertise and technical knowledge and.
Speaker 4 (35:15):
And help US billship building here in the United States.
Speaker 3 (35:17):
I want to broaden out the conversation, very ambassador, of course,
just to broaden out the conversation.
Speaker 2 (35:24):
Though.
Speaker 3 (35:25):
Back in March, I wrote an Odd Thoughts newsletter titled
the US is looking a lot like China. I got
an enormous amount of pushback on it, but you actually
wrote something similar, And I don't even have a question.
Just tell me that I was right.
Speaker 4 (35:42):
You're right, you were right.
Speaker 3 (35:44):
Thank you.
Speaker 4 (35:44):
Look, I think we spent years. We always thought there
was a theory of convergence. By bringing China into the
international system, we would become more alike Now. Our view
was they would become more like us, like US, more open,
more liberal, more market oriented. And we used to go
to them and lecture them about don't be protectionists, don't
(36:05):
restrict foreign investment in your country, don't make it impossible
for our companies to invest in your company, don't engage
in industrial policy and subsidization, and don't take stakes in
private companies and intervene in the private sector, and now
what are we doing. We are protectionists, we have restrictions
on foreign investment, we are engaged in limited industrial policy,
(36:29):
and now we're beginning to take stakes government stakes in
private companies. So rather than them becoming more like us,
we have become more like them. And the challenge of that,
I think is that we're now competing with them on
their playing field, under their set of roles. I'm not
at all convinced that we can compete on their playing
field as well as we can compete on ours, because
(36:52):
we don't have unlimited We can't go to Congress and
say give us unlimited resources to invest in this sector
or after that sector. We can't subes you know, the
commanding heights of the technology competition. And I think it's
unfortunate because I think the Chinese can play that game
much better than we can.
Speaker 3 (37:10):
Yeah, I think this is a really important point because
when we're thinking about you know, choke points in terms
of manufacturing or whatever, China has the most experience out
of practically anyone in the world of like building up
strategic capacity and doing it in a very conscious and
interventionist way.
Speaker 2 (37:28):
Well, and also a lot of that sort of massive
oversupply that people call it is maybe to some extent intentional,
but maybe also just to some extent a function of
their provincial versus provincial relationship, where the provinces are hypercompeting, etc.
For market share. That's just a dynamic that does. Nothing
(37:52):
like that exists in the United States. And so the
idea of moving in that direction all kinds of conditions,
either by design or just sort of by happenstance of
the political structure of the system.
Speaker 4 (38:06):
It's just very different, exactly, right, Joe. I think you know,
in their case, leadership says we want to be dominant
in these fifteen sectors. Every provincial governor looks at that
and says, all right, I'm going to take.
Speaker 3 (38:19):
My local stage judge to ability.
Speaker 4 (38:23):
And we have you know, in China, I think they're
over one hundred ev companies, right, you know, and so
and they're producing and they will be producing enough cars
to meet the demand of the entire world. So where
does that leave the US auto sector? Where does it
leave the European auto sector. Now, in our case, I
think you know, we have effectively kept them out. We've
(38:44):
effectively said we're not going to have Chinese evs here,
at least at the moment, Europeans have a slight you know,
more schizophrenic about it. They've also adopted protectionism, but they're
more open I think to having Chinese imports. What does
that mean for the future of Volkswagen, for the future
of now, for the future of the other auto companies,
and you know, in that case it could have broad
political implications in Europe as well over time.
Speaker 3 (39:08):
I hesitate to ask this question, but is there anything
the US can learn from China in terms of you know,
trade and building out strategic industries.
Speaker 4 (39:18):
Well, look, I think China. We shouldn't make China into
more than it is. China's made huge mistakes. They've wasted
hundreds of billions of dollars on bad domestic investments, and
they've got, you know, tremendous challenges, including demographic challenges that
the US currently it doesn't have, and so we shouldn't
(39:39):
make them out to be twelve feet tall. I think
one thing that is current is to think through, Okay,
if there is an industry that you think is important
for national security or otherwise, what's the best way of
supporting it by the government. The Trump administration's approach I
think has been based largely on tariffs. We create this
(40:00):
wall of tariffs, companies will have to produce or have
to move their supply chain to the United States, and
that's how we'll build out this area. I think what
we've seen in China is that yes, they've used tariffs
and other restrictions, they've also used industrial policy. They've also
invested in the subsidies credit free energy. They've also invested
(40:23):
heavily in R and D in many sectors, the life sciences,
obviously AI, among others, government subsidies and government investment, and
it's that combination of policies that probably is more effective
than tariffs alone. To me, the concern is we're approaching
this from a position of tariffs are the answer to everything.
(40:44):
We know what the cost of tariffs are, and we're
taking a gamble on whether the benefits will be there
and whether tariffs alone are going to re manufacture the
United States economy.
Speaker 2 (40:56):
You mentioned that some degree of greater redundancy and higher
costs is not the end of the world, particularly if
there's some political it creates some political sustainability.
Speaker 4 (41:07):
What is it?
Speaker 2 (41:07):
What does the left tail risk looks look like to you?
What is the scenario in which things really, the wheels
really come off one.
Speaker 4 (41:18):
The US doesn't have a great history with industrial policy,
so if we were to multiply our efforts in various
ways but not do it well, that would that would
be a waste of resources and costs that we didn't
need to need to incur. I think if we don't
go back to the point about allies and partners, if
we insist on reshoring everything and not ensuring anything, I
(41:41):
think we probably lose some of the economies of scale
and some of the comparative advantage that we have. I
also think if we're if the if the existential threat
is competition with China, if they are the pacing challenge,
working with allies and partners is our way to reach scale.
(42:02):
We're a big economy, we're the biggest economy in the world,
but when it comes to manufacturing, we're not going to
be able to compete with China alone necessarily, or rather,
we're gonna be able to compete with China much better
if we do so with our allies and partners.
Speaker 3 (42:16):
I have just one more question, this is the most
important one. How good are you at Tradel?
Speaker 2 (42:21):
Do you ever play that we do.
Speaker 4 (42:22):
I love these games Trade All and World a World.
Speaker 2 (42:27):
Oh yeah, that's the other one. I didn't get into that.
Speaker 4 (42:28):
Yeah, the trade all I think is a great is
a great game. I don't always get it right, but
I it's it's a good Uh. It's a good reminder
of just how complex certain economies are.
Speaker 2 (42:39):
After we're done with this, could you help us find
that dairy farmer who explained the five.
Speaker 4 (42:44):
Absolutely, it's a fascinating lesson.
Speaker 2 (42:47):
Michael Frohman, thank you so much for coming online.
Speaker 4 (42:50):
Thanks for having me.
Speaker 2 (42:50):
Thank you.
Speaker 3 (42:51):
That was great.
Speaker 2 (43:05):
Tracy. I'm really I'm really a fan of this neologism
or wherever it came from, the polyamorous world order, because
you know, people talk about the G seven and what's
his name talks about the G zero Yeah, and other
people talk, oh, bipolarity. But but I think this is
a good one.
Speaker 3 (43:23):
It is kind of funny to me that there's this
idea out there that just because Goldman came up with
like a catchy acronym for the bricks, that somehow that's
going to like create a new strategic coalition from.
Speaker 2 (43:35):
It's like so pretty dick, so perfect countries. We should
have Jim o'neilon to talk about. We've never talked to
Jimo neilon, So the thought of him coming up with
this paper, these are going to be the big economies,
and now they now that it's a rival. Yeah, but
the West is like a really good.
Speaker 3 (43:49):
That would be really interesting. But I do think Okay,
one thing you can say about polyamorous relationships is they
tend to come with a lot of drama, right, and
so it it definitely feels like we're going to have
more instability, or at least like more things changing, more
things in flux, more volatility.
Speaker 4 (44:08):
Right.
Speaker 2 (44:09):
So this idea that I find it compelling, this idea
that the old globalization can't just be replaced with the
same globalization. Except the leader is right. I mean, the
US was this huge trade deficit country. China is a
huge trade surplus country. That naturally means that its relationship
(44:31):
with all of its partners on some level, even if
it wants to be at the forefront of creating new
terror free zones, et cetera, is going to be of
a different type than the relationship that the US had.
Speaker 3 (44:45):
Absolutely, shall we leave it there, Let's leave it there,
all right? This has been another episode of the Authoughts podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (44:53):
And I'm joll Wisenthal. You could follow me at The Stalwart.
Follow our guest Michael Frowman. He's at Mike Frohman. Follow
our producers Krmen Rodriguez at, Kerman armand Deshil Bennett, a Dashbot,
and Kilbrooks and Kalebrooks. From our odd Lots content, go
to Bloomberg dot com slash odd Lots were the daily
newsletter and all of our episodes, and you can chat
about all of these topics twenty four to seven in
(45:14):
our discord Discord dot gg slash od Loots.
Speaker 3 (45:18):
And if you enjoy odd Lots, if you like it
when we talk about the future of global trade, then
please leave us a positive review on your favorite podcast platform.
And remember, if you are a Bloomberg subscriber, you can
listen to all of our episodes absolutely ad free. All
you need to do is find the Bloomberg channel on
Apple Podcasts and follow the instructions there. Thanks for listening.
(46:04):
In the a
Hosts And Creators
Joe Weisenthal
Tracy Alloway
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