Peter Lewis: Asia Business Correspondent on the US-China trade war, Japan's conditions on trade with the US and China's April exports growing

The trade war between the United States and China has settled down for 90 days.

President Donald Trump’s agreed to reduce tariffs by 115 percent.

Asia Business Correspondent Peter Lewis talks to Heather du Plessis-Allan about the developments, Japan’s conditions on singing a trade deal with the US and China’s exports growing sharply - just not in the US.

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Episode Transcript

Speaker 1 (00:00):
Peter Lewis our Asia business correspondent, is with me right now, Hi.

Speaker 2 (00:03):
Peter, Good evening header now, Peter.

Speaker 1 (00:05):
On this US China trade war, This thing is settled
down for ninety days. But is that all or is
this the start of the end?

Speaker 2 (00:15):
I think there's still a long way to go. And
the way it's sort of been painted in social media
and state media up in China is that this was
a complete climbed down by Donald Trump. He agreed to
reduce tarots by one hundred and fifteen percent. China matched that,
but didn't have to do anything else whatsoever. And they

(00:35):
probably do have a point because you have to say, well,
what was the point of all of this To put
all these tariffs on, effectively end trade between the US
and China, then take the tariffs off, but get no
concessions whatsoever from China. And I think this is only
just the beginning of what could happen over the next

(00:55):
ninety days. Already the US is talking about China list
some semiconductor companies in China and technology companies, which is
going to irritate them immensely and makes it more difficult
to have this discussion over the next ninety days. And
what we have to remember is that there are still
tariffs of thirty percent on China, So while they're not

(01:20):
these devastating tariffs are one hundred and forty thirty percent,
tariffs are still pretty high. So that is still going
to damage trade between the two countries. And I think
what's going to happen is that President jjinp is going
to do what has been doing over the last few years,
which is to create a global trading system that doesn't

(01:41):
include the US. He will deal it, diversify exports away
from the US and rely far more on countries in
the Middle East, in Southeast Asia, emerging markets. And he's
already having some success in that. Columbia only last week
agreed to join the Belton Roads in this shive, So
already he's approaching a lot of these developing nations and

(02:05):
looking to sell the goods that he would have sold
to the US to those nations instead. And I think
that process is only going to accelerate over the coming
ninety days.

Speaker 1 (02:15):
Both sides claim that they've got the upper hand, but
who do you think has got the upper hand here?

Speaker 2 (02:20):
Well, I mean they're both right to a certain extent,
because this is damaging to China, for sure, and it
has slowed its economy, and it has caused problems for
its manufacturers, many of whom just can't survive with tariffs
at that level. It puts pressure on the unemployment rate

(02:42):
in China, which is a very sensitive issue domestically. So
for sure, it called it has caused problems for China,
but I think they're in a better position to withstand
those problems. It's got a huge domestic market. It's got
many ways in which it can diversify its economy, boost

(03:03):
domestic consumption to try and offset the damage that's been done.
Now the US, it's also damaged its own economy. I mean,
shipments to China have collapsed virtually down to zero to
the US have collapsed virtually down to zero. And the
issue for the US is that it likes to blame
China and other countries for its trade deficits. But the

(03:26):
reason why it has huge trade deficits is because its
own citizens don't save enough and they want to buy
all these goods that China and other countries sell to them.
They like them, they want to pay for them, and
that's what causes the trade deficits. But it's going to
be difficult for the US as well because inflation will

(03:47):
pick up over the coming months. Retail sales are already slowing,
and we're already seeing that in the latest data, So
it's doing damage to its own economy as well, but
not getting the benefits that touted where all these manufacturers
are going to relocate to the US. We haven't seen
very much of that so far. Trump has also said

(04:10):
We're going to get huge revenues in from other countries
to play to pay for his tax cuts. Well, we're
not seeing signs of that either. So you know, he's
put these tariffs on, taken them off again, but not
got anywhere near close to getting all the benefits of
those tarifts be touted in the first place.

Speaker 1 (04:28):
The Trump the possible trade deal between Trump and Japan
is an interesting thing. Read the tariffs and the cars right,
And I was reading about this and somebody made the
point that Trump thinks that Japan is a soft target.
Is he wrong?

Speaker 2 (04:41):
Yeah, he is wrong, And if anything, Japan is rather
stealing for a longer far here. They don't think they're
going to get a deal in ninety days, and they're
absolutely adamants that tariffs on cars have to come off
as part of that deal. It's two big exports to

(05:02):
the US, auto's and agricultural products. They are both two
very very sensitive issues for Japan. Prime Minister Ashiba has
got an election coming up very soon, and his popularity
has already plunged to below thirty percent, So he's got
a lot of domestic issues and he can't afford to

(05:24):
back down and give in on the two largest sectors
of exports to the US. So I think it's going
to be very very difficult for Trump to get this
deal with Japan. I think it's also a very similar
situation for India. India also seems to be drawing a
line now as well. So these imminent trade deals that

(05:46):
Trump has touted with countries like Japan, South Korea, India,
I think are going to be struggle to get done
within the ninety days.

Speaker 1 (05:55):
Interesting. Hey, Peter, it's always lovely to talk to you.
Thank you so much. We'll talk to you in a
weekend and enjoy your weekend. That's Peter us our Age,
your business correspondent.

Speaker 2 (06:02):
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