This Is How Chinese Manufacturers Are Countering Trump's Trade War

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Odd Lots 51 min 6 speakers 6 chapters transcribed 1 month ago
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What is the main topic discussed in this episode?

Jennifer Zabasaja 0:00
A new chapter in global growth is being written and much of it is happening in Africa.
Unknown 0:05
Africans need to invest. There are deals to be done and business to be won.
Jennifer Zabasaja 0:09
I'm Jennifer Zabasaja. Every week on the Next Africa podcast, we track capital flows and political shifts shaping the continent's future.
Alex Rodriguez 0:17
Digitalization of Africa is gonna power its growth. Bridging the world of something like HIV is possible. Population growth is so enormous in Africa.
Jennifer Zabasaja 0:25
Listen to Next Africa on Apple, Spotify, or wherever you get your podcasts.
Unknown 0:32
Bloomberg Audio Studios.
Joe Weisenthal 0:48
Hello and welcome to another episode of the Oddlots podcast. I'm Jill Wiesenthal.
Tracy Alloway 0:53
And I'm Tracy Alloway.
Joe Weisenthal 0:55
Tracy, I don't know this for sure. But I kinda have this feeling that There's a bit of a fantasy, perhaps, on the part of Americans or the administration or so forth that in this trade war, that non China Asian countries, they could be our partner. They could be our big trading partner and that somehow China could be isolated from them.
Tracy Alloway 1:17
Maybe. I mean, I know there's a lot of concern about Chinese goods basically flowing over the border into places like Vietnam. So I think it's a little bit more nuanced than that. You know one thing I find really funny? And my definition of fun might differ to a lot of other people's, but you know, if you look at the real exchange rate. Yeah. So currency adjusted for inflation and stuff like that, the real effective exchange rate for the dollar is up like 20% since January. And the real effective rate for the UN, the Chinese UN, Is down 14%. So if you're trying to like make your own goods competitive, American goods competitive, it feels like we're heading in the opposite direction.
Joe Weisenthal 2:01
Wait, isn't that really true? That even with the nominal the massive nominal decline in the US dollar against all these currencies, that on a real basis is actually. According
Tracy Alloway 2:09
to Bank of America.
Joe Weisenthal 2:11
Huh, that's pretty crazy. I would not have I certainly would not have guessed that. And also, this sort of gets back to the point that like with the tariffs and with the trade war, I still don't. know what the goal
Unknown 2:23
is.
Joe Weisenthal 2:23
And it changes a lot. I don't know the degree to which I knew if it was successful, but under the Biden administration, I had some sense of, okay, we had the specific goal with trade policy and other tech transfer policies to be at or near or ahead of the frontier of cutting edge in a certain key areas. And when it comes to trade policy under this administration, it strikes me as all over the map.
Tracy Alloway 2:47
Yeah. So there's the question obviously of whether the US needs to be manufacturing things like toys in America, whether people would be interested in taking those manufacturing jobs. And then finally, as you pointed out, the goals are so confusing. Cause on the one hand, it seems like, all right, it's about bringing manufacturing back to the states. But on the other hand, the Trump administration has said that it's a way of raising revenue.
Unknown 3:11
Yeah.
Tracy Alloway 3:11
as well. And then you have Trump saying, I'm gonna strike all these deals. So deals are seen as a win for him as well. But then if he needs to raise revenue, is he actually gonna strike deals?
Joe Weisenthal 3:23
Totally. Well anyway, there's a million questions and we will have Hundreds of more episodes in our lifetime, probably that revolve around this topic. But I think it's a good time to get some perspective from the perspective of the Chinese business community, Chinese manufacturing, and so forth, Chinese policy, et cetera, and like how a lot of this is being perceived from the Chinese perspective and the response to the aggressive action.
Tracy Alloway 3:48
Yeah, because US policy isn't happening in a vacuum, right? Like China is reacting to it and you know, sometimes China can move pretty fast. So we should talk about it.
Joe Weisenthal 3:58
Totally. Well, I'm very excited to say I think we do have the perfect guest. We are gonna be speaking with Cameron Johnson. He is a senior partner at Tidal Wave Solutions. He's based in Shanghai.

How are U.S. tariffs affecting Chinese manufacturing and supply chains?

Joe Weisenthal 4:08
But he's temporarily here in the US visiting us. Someone who has his finger on the pulse of Chinese business and manufacturing.

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