Doug Holtz-Eakin: Economist and former advisor to John McCain on potential easing tensions between the US and China

Rising hopes of easing tensions in the trade war between the US and China. 

Donald Trump's signalling a potential U-turn, saying the 145% tariffs on Chinese goods are "very high" and will "come down substantially". 

But the two countries are yet to hold any formal trade talks. 

Economist Doug Holtz-Eakin —a former adviser to John McCain— told Mike Hosking if Trump keeps waiting for Xi Jinping's call, he'll be waiting a long time. 

He says China has no reason to come to the table, and intermediaries will need to get involved to get both sides talking. 

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Episode Transcript

Speaker 1 (00:00):
So has the Trump still blink? Is the white flag up?
His latest approach to China and tariffs appears to be
that he's going to back down and significantly. Currently the
tariffs one hundred and forty five percent of that level. Realistically,
it's an ambigo. The market, of course, once they heard
that news yesterday got a bit fizzed up. Doug Halseeken
is a former advisor to Senator John Mccainey's with the
American Action Forum these days. He's with us. Good morning

(00:20):
and good warning to you as well, before we deal
with the specifics. What's your sense of this whole tariff
thing so far?

Speaker 2 (00:28):
Well, I think it's been just a real problem for
the US and the global economy in general. It was
rolled out poorly, it's all thought out, and I think
everybody involved is now looking for a way to gracefully
exit from some of these proposals.

Speaker 1 (00:45):
Would you say Trump has blinked in the last twenty
four hours? Is this what the comments about China's really about.

Speaker 2 (00:53):
I think it's absolutely true that the President never he
made a mistake, but he does respond to pressure. We've
seen him respond to that pressure in the past week.

Speaker 1 (01:02):
So what happens now. Do you think.

Speaker 2 (01:06):
I think that the reciprocal tariffs go away. I think
they were still thought out, very damaging, and will easily
exit under the guise of negotiations with each country or
something like that. I think we'll continue to see the products,
the steel, aluminum, autos and others. Steady. Look, so, Levy,

(01:28):
I don't know the fate of the ten percent universal tariffs.
It's an unwise idea. He would have to withdraw because
it's universal. And that's the hardest of my view. In China, China,
you know, they have no reason to come to the table,
and he keeps suspecting g to bend the need to him.
I think that's unlikely. So wiser heads are going to

(01:50):
have to serve as intermediaries to get both sides to start.

Speaker 1 (01:52):
Talking if what you say is correct and the ps
to be because we view this from a you know,
free tride lanes at the bottom of the world in
New Zealand, as free tried is. What we've never been
able to understand is how he couldn't order his administration,
couldn't see this, none of it made since How did
it make sense in his head?

Speaker 2 (02:12):
That's the question I can't answer. I'm not qualified to
diagnose mister Trump's thinking thought processes. The one thing that
puzzles everyone, and puzzles you, and puzzles many puzzles people
around the world is he does things that do not
appear to be in his self interest. This is not
in his self interest. It's damaging the uist economy. I

(02:32):
believe we will enter a recession if he doesn't quickly
back off these teriffs. And no president wants to preside
over rising unemployments and and a failure to control place.
And that's what he would have.

Speaker 1 (02:45):
How much political capital do you think he's spent on this.

Speaker 2 (02:51):
I think he has worn out his welcome internationally quickly,
and that seems like a bad first step. He needs
help for his domestic agenda in the US Congress, and
nobody there is vocal about it, but they are quite
frustrated by the fact that they are basing the possiblity

(03:11):
of running for reelection in a bad economy. And that's
what no elected legislator wants to do. That.

Speaker 1 (03:17):
All right, Doug, you have a good week and appreciate it.
Doug Holtzeken, who's American Action Forum former, advances to John mccampery.
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