00:00Let's speak now to Hosok Lee Makiyama, who is director of the European Centre for International Political Economy.
00:06Great to have you on Global Business Europe again.
00:08I have to say that the $60 billion, it sounds big, but it's only about a tenth, isn't it, of
00:14what these two economies trade with each other.
00:17How much do you think this deal really changes?
00:21That's right. It's actually around one-tenth, depending on how you count.
00:26But more importantly, it's only one-third that the bilateral trade between U.S. and China has declined over the
00:33last four or five years.
00:34So, in other words, it's a very poor recovery in terms of what they have actually lost out for trading
00:42partners that both sides have switched by supplying from other countries.
00:48I mean, China's cutting tariffs on a long list of agricultural goods, American farm goods, not soybeans, the biggest farm
00:57export of all.
00:58What does that tell us about what still is unresolved?
01:04Well, it goes actually on both sides.
01:07We see, for example, more sensitive products, for example, like electrical vehicles, semiconductors, all the things that we've been, well,
01:17we got used to reading about in the last couple of years are basically off the list.
01:22That probably means that there are going to be another round of summits or possibly a few more.
01:29And we also need to remember that President Trump and President Xi asked to see each other face-to-face
01:36at least on two occasions before the end of the year, namely at G20 in December.
01:42And also we have the meeting in November as well.
01:46On AI, they said, look, we're going to keep talking.
01:49But do you think technology is now potentially the hardest area to reach agreement on?
01:56Yes, and there is actually a caveat in the agreement for anything that either side deems as sensitive.
02:05And anything for the U.S. side, it also means anything that contains a Bluetooth chip, anything that has radio
02:12capability.
02:13Basically, if you have a teddy bear and it has a memory chip in it and you can record your
02:20voice on it or whatever it may be, any toy that has a radio capability is deemed sensitive.
02:26So obviously, there's the military and security concerns on both sides.
02:32The paranoia still runs high.
02:35We're so laser focused on the two biggest economies in the world, the United States, China.
02:40Where does all this leave Europe?
02:43Yeah, that's actually a very good question because we've heard now on the product list that it contains stuff like
02:49dairy, consumer products.
02:51And we also heard about cosmetics.
02:54And these are prime products that Europe wants to sell to China.
02:59And it also, to some degree, has been able to replace the United States as a supplier for the last
03:06few years.
03:07And we also know that the European Union is going to have a summit with China on a trade minister
03:13level in mid-October.
03:16And that probably means that Europe now needs to catch up and play nice to China for a few weeks
03:21ahead.
03:23Always a pleasure talking to you.
03:24Thank you so much.
03:25Hosok Lee, Makiyama.
03:26Hosok Lee, Makiyama.
03:26Hosok Lee, Makiyama.
03:26Hosok Lee, Makiyama.
