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We will measure our success not only by the battles we win, but also by the wars we end. At this point, I spent a lot of time with the president, and not once have I seen him do something that was mean or cruel. We're not going to be defeated. We're not going to be humiliated.
I'm Roland Oliphant and this is Battlelines, Trump edition. It's Friday the 11th of April and what started as Donald Trump's trade war against the world has become a standoff between two global Goliaths. Trump has cancelled or at
or at least delayed most of his tariffs against most countries on the planet, but not China. In the space of around 12 hours on Wednesday, he hiked tariffs against that country twice, first to 104%, and then a little over 12 hours later to 125%.
The second increase came after Beijing itself upped its own tariffs on U.S. goods to a total level of 84. Mr. Trump said on Truth Social that his decision was based on a lack of respect that China has shown to the world's markets, a firm demonstration that he would not tolerate other countries retaliating for his attempt to, as he calls it, make trade unlawful.
China's response? Well, it's defiant. This is Mao Ning, spokesperson for the Chinese Ministry of Foreign Affairs, put out on X.com.
we are Chinese, we are not afraid of provocations, we don't back down. And with that post, she had a video of Mao Zedong giving a speech saying that it was up to American presidents when the Korean War would end because China would stay firm as long as its last pretty belligerent stuff.
So where does this leave us? Where does it leave the United States? Who comes out on top? We'll be speaking to Kelly-Ann Shaw, who advised Mr. Trump on global trade during his first term.
But first, I'm joined by Sophia Yan, our senior foreign correspondent, formerly a Beijing correspondent, who lived in China during the last trade war between the United States and China in Donald Trump's first term. I suppose, first of all, take us back to that. I mean, what was it like then going through that? And do you see echoes of the first term's relationship here? Or is this a completely different level of confrontation? During Trump's first term, the trade war kicked off almost immediately.
almost immediately, but it was very piecemeal. It was on specific goods. They were targeting things like beef and steel. It was very much tit for tat. This time, it's escalated so quickly. I mean, during Trump's first term, it took quite a while for things to get going. And it did eventually lead to
to the lowest point of bilateral relations between the US and China. I think of the trade war that started under Trump's first term as the beginning of the end, really, in terms of how the US and China were dealing with each other. And now we're seeing it again, except the big change is that things have gotten so terrible so quickly. I mean, 125% is not a small number, 84% also not a small number. And the message that
the U.S. under Trump seems to want to send is really a warning to other countries. Don't try to retaliate. Come to us, talk to us, cut a deal. China, of course, isn't going to back down on this because they do not want to give the image or any sense, both at home domestically and also internationally, that they would even think to bow to the U.S. because this is
It's really a country that they consider an arch rival. So there's no way that they will do anything that looks like they're caving. Trevor Burrus: Hence Mao Zedong giving a speech. I'm not sure where the speech was, but he was saying it was up to President Truman. Now it's up to President Eisenhower when this war ends. It was remarkable to see that kind of belligerent reference to that war 70-odd years ago now. Just to check, so the last trade war was a similar thing. The Americans started it. Donald Trump imposed tariffs on the Chinese and the tariffs responded to it. It was a similar kind of thing.
This is much, much bigger. But you said something interesting there about it being the beginning of the end of how the Chinese and the Americans dealt with each other. Are you saying that the impact went beyond simple trade relations, but into kind of a general relationship? Well, we're also talking COVID that happened too during the first Trump term. There were a lot of
big things that occurred that really broke down the trust between the two countries. And eventually there was almost very little engagement in general. And this also had to do with China's view of not wanting to look like it was going to respond to the U.S.'s demands. And the same thing is happening again now. You know, China is very good at playing a dirty game. They're already reacting in other ways. Back in February, actually, when Trump announced tariffs of just 10 percent. So we've gone from 10 percent to 125 percent in a very short period of time.
Back in February, Beijing announced an antitrust investigation into Google. Just a few days ago, they did the same against DuPont, which is a big U.S. chemicals company. And so I think what's happening is that because, as I said before, China will in no way allow itself to publicly respond to any of this in a way that could be construed as caving to the U.S., China can really be the source of a lot of pain for the U.S., going after big U.S. corporations,
is an interesting tactic. The game plan likely being to squeeze these big companies and get them to go to Trump, to push him to back down, to push him to roll back what he's doing. So in that sense, China can get what it wants without having to have any sort of overture to the U.S. Here's something I just grabbed off the wires today. We're speaking on Thursday for the benefit of listeners. China's yuan hit its lowest against the dollar on Thursday since the global financial crisis.
With the central bank cutting guidance for the sixth successive trading session have been intensifying Sino-US trade war, ING global head of markets Chris Turner said the US and China are currently in a power play game of brinksmanship until a deal is announced or a big bilateral meeting confirmed.
USD and Chinese yuan will now be the focal attention of the FX market. It's going to hurt both parties. How does this end? Absolutely. I mean, US companies could find themselves suffering very severe supply chain disruptions. The last time this happened was during COVID. And every country in the world really realized in a very harsh way how much they were dependent on Chinese imports.
So we could see a repeat of this, especially for the U.S. again. For China also, the economy has been flagging, the economy which they were trying to grow in a more robust way, not just relying on cheap exports to fuel the economy, but to find a more advanced way to do that, a more quality way to grow the economy through advanced manufacturing, for instance, through AI. They were trying to do this already before the pandemic hit, then the pandemic hit. And now we're still seeing in China this post-COVID recovery that
It's really struggling. I mean, the economy is just nowhere close to what it used to be. And so for both sides already, there is a challenge when it comes to where things might go on an economic front. And this is not going to help either side in terms of bringing down costs for their own people in the long term.
What's really important to remember is that this gives China an opportunity to act and to position itself as the rational global entity against the bombastic nature of Trump. You know, China's going out and saying, OK, we're the champion of free trade here. Look at us. We're not doing this. We're not pressuring you like this, announcing these tariffs that you can't possibly handle and absorb so quickly. Obviously, this isn't really true with China. That's not really how the economy is. The Chinese state controls China.
domestic economy to a very serious degree. But you can already see this. It's a propaganda war for China. They've published this pretty incredible 17,000-word white paper about free trade, the benefits of free trade between the U.S. and China. I mean, this is what they do. Going back to Mao Ning, the foreign ministry spokeswoman, the other tweets she's put out over the past eight hours or so, apart from Mao Zedong during the Korean War, she's got a picture of a Make America Great Again baseball cap
with a Made in China label on it and the price tag said $50. That's been crossed out and replaced with $77. She's got a video of Ronald Reagan making a speech about the dangers of protectionism and where he makes the case that the last time America...
Experiment with protectionism. You've got the Great Depression. And she just retweeted, last thing, retweeted a post by someone else saying, China drops tariffs for vulnerable countries, prioritizing shared growth. The US imposes protectionist tariffs on practically the rest of the world. Two visions clash. A symbiotic world versus the law of the jungle. Which do you prefer?
It does not sound like China's interested in talks, right? This is not what they're going to do. They are not going to sit at the table and try to hammer out a deal because, in a way, Beijing also doesn't trust China.
with Trump in charge. Well, part of my question was how much of that is just trolling? And it is quite good trolling in a way. But how much of it really is their worldview? It's a mix of both. And you have to think about the fact that part of the reason they're saying this too is to message to their own people. They need to appear. They want to appear strong. I mean, both on the world stage, but also to the entire country. I mean, they've got more than a billion people who they've raised on this steady diet of
how China is better than the rest and how the U.S. is in decline. So this is a great moment for them to keep trumpeting that message. So it's as much something that they want the people at home to hear as much as it is something that they want the people outside of the country to also take in. In the long term, I think we could possibly see a big divide in the world in terms of trade, right? The U.S. and its allies dealing with each other on one side, China and its partners on the other side.
And you can imagine such an economic division to come down on political lines and it could exacerbate this broader global trend. We've talked a lot about this on the podcast before. But looking at how so many states are moving toward a more authoritarian direction, I mean, you think about what China has to offer to export, you know, surveillance cameras, facial recognition. You know, these are the kinds of goods they've got on the market. And electric cars. And electric cars. Solar panels and stuff.
Donald Trump, on Wednesday, after he announces all these massive tariffs and says, you know, China was not showing enough respect to the global markets. They're punished for this. He then says, I think President Xi is a very smart guy and I think we'll end up making a very good deal for both. And he says, I can't imagine raising tariffs on China again. What you're saying seems to suggest that you don't really think Xi Jinping is interested in a grand bargain. If this is just a negotiating tactic by Donald Trump.
You're shaking your head. Listen, she's shaking her head. Why not? For Xi Jinping, this is a moment for him to appear strong and tough and publicly...
In a sense, the U.S. is backing China into a corner. And it's what I said before. China does not want to appear weak at all. I mean, they see themselves as having finally risen to be very prominent. There's the appearance, right? And there's the reality of the economic realities. Can they really sustain that level of confrontation? Are they not going to have to come to the table in some sense or another? The thinking for a long time has been that the U.S. would blink first, not China, because...
the US economy is really pretty reliant on China. I want to finish by going back to your own experience. As you said, you were living there, you know, in Beijing during the first Trump term, the first trade war, the COVID impact. And you talked about the beginning and the end of relations. And of course, you've spoken about before on the Telegraph, you had your own podcast about why you had to leave China and so on. These deteriorating economic relations,
Is it likely to impact, I don't know, ordinary people? Would you say that what happened when you were there last time with the previous trade or that contributed to the closing down of the public space, for example, that ended up with you and lots of other journalists leaving? This is the great fear.
Right. This is what a lot of people are worried about. Last time this started with trade, Trump was trying to equal the playing field because there was a huge deficit. America just buying so much more from China and trying to make America less reliant on China, which itself many people would say is a pretty noble pursuit, difficult to do in practice. But it started to go into other realms because the U.S. was looking at Chinese influence, for instance, like espionage, what the role of Chinese state media was playing in terms of what
the U.S. had in its public information space, because all media in China is controlled by the state. So all the messaging, the kinds of news that they would cover, kinds of, well, I can't even say that it's news really, but really they would just put out foreign ministry press releases, for example. But it was always China's worldview.
And so from the perspective of the U.S. at the time, and also it seems again this time, is that it was unfair. It was unfair. And so they were pushing and squeezing China in different aspects. And Beijing would respond in kind. So that's why they started, for instance, to go after the foreign media. Things got really nasty. We saw a lot of hostage diplomacy. There was one instance...
The Canadians arrested the CFO of Huawei, a big Chinese telecoms company. And I think probably a lot of listeners will remember these headlines. It was on a U.S. request. And after that, Beijing grabbed two Canadian men and held them for almost three years with no real reason, just to pressure Canada in this whole situation. I mean, it got very nasty very quickly. It just turned...
So fast. And geopolitically speaking, I mean, it really was the worst, the lowest point of relations between the two countries. Things have, in comparison, have stabilized a little bit, but we're not out of that realm yet. And this could push us even further down. Sophia Yan, thank you very much for joining us on Battlelines. After the break, I speak to Kelly-Ann Short, a former trade advisor to President Trump during his first term in office, about her view of the president's strategy.
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In the first half of this podcast, we talked about the Chinese view of this new trade war. But what about the view from Washington? Well, few people a better place to talk about that than Kelly-Ann Shaw. While in the White House, she led the Office for International Economic Affairs for both the National Security Council and the National Economic Council, responsible for coordinating and advising the president on issues related to international trade, investment, development, energy and environment. Kelly-Ann, welcome to Battlelines.
Could you maybe begin by telling us, well, a bit about you, really, where you come from, what your background is and how you ended up advising Mr. Trump?
Sure. Well, good morning from Washington, D.C. It's great to join you. So I am currently a partner at the law firm of Hogan Levels in Washington, D.C. I spent 10 years as a U.S. trade negotiator where I worked for the U.S. trade representative negotiating trade deals, litigating trade disputes. I worked as a senior trade and investment advisor to the chairman of the Ways and Means Committee, which is the committee in Congress that has jurisdiction over trade and tax. And
And then my last stop in government was in the Trump administration, where I spent a year and a half as a senior trade advisor for the president, as well as his lead negotiator for the G7, the G20, APEC, worked on the China phase one deal and a bunch of other trade measures. You've literally...
sat in the White House, presumably been in the Oval Office telling the president what to do about trade and stuff. Let's just start with a big, broad question. What on earth do you make of the past week? I mean, is that something that left you your head spinning as much as anybody else's or is it is it something you knew was coming? Yeah, well, I think there's nothing precedented about what occurred over the past week. It was the announcement in the Rose Garden was the single biggest trade action of my lifetime.
And I think that the announcement yesterday where the president effectively removed all of the reciprocal tariffs, except for those on China, was the second biggest trade action of my lifetime. And so everything in between has been very unprecedented. But it is very much in the president's style. He likes the element of surprise, the unexpected. He is this consummate negotiator who likes things
to keep things ambiguous, sometimes from his own administration and his own team. And so I wasn't surprised to be surprised, but certainly nobody on planet Earth expected either of the actions last week or yesterday. I'm going to tick off one of my questions here, because one of the questions I've just scrolled down is, this isn't the orthodox way of doing things, is it? No, there's...
There's nothing orthodox about the Trump administration. I think that's one of the reasons he was elected not just once but twice, because he does things very differently than other politicians. Let me ask you this then. So this Liberation Day tariffs, these enormous tariffs on, I don't know, half the planet or the entire planet. I mean, I lost count. Then suddenly...
Yesterday, a 90-day pause and we lower the reciprocal tariffs to 10% flat rate, effective immediately. Market surge again. Did he blink? Why did he blink? So if you listen to the administration and the NEC director, Kevin Hassett, was on television this morning talking about the reasons for this reversal in terms of lifting the tariffs. And he said it was two things. One, he said the president had always had a strategy that involved
some sort of pause and that was under consideration. But two, what was happening in the bond market made this a much more urgent situation in which the administration did decide for those reasons and that timing to move forward with actually hitting a pause on those reciprocal tariffs. But to your point, we still have tariffs in place, 10% tariffs on imports from every country on earth. That universal baseline tariff has not been removed. It really just is these individual reciprocal tariffs.
And then we, as of this morning, have an executive order that was issued, and I was reading right before we logged on, that increases the tariff rate on China to 125%. It seems that from what you're saying, this was always a kind of play hardball negotiating strategy. We will...
We'd go in hard and then we'd lower them anyway. Had to move quicker because of the bond markets. So the administration was pushed around by what was happening on the markets. You were an American trade negotiator for, you said, 10 years. How do you expect this to actually help in the administration negotiating whatever it is they're trying to achieve? Would this really be a boon to you if you were still doing that job? Or would it hinder you because your interlocutors might just...
not trust anything your government might do? So it depends how it works out, right? This type of strategy has never been tried before. And I worked for different administrations, different individuals, but US concerns with trading partners are longstanding. There is this book of trade concerns called the National Trade Estimate with both President Trump held up and then USDR, Jameson Greer held up yesterday in his hearings with Senate Finance and Ways and Means Committees.
about all of the concerns the United States has had with every trading partner around the world. And the point the administration is making, and I share this perspective, is that unless the United States did something more drastic, these issues weren't going to resolve themselves. Our trading partners weren't going to, out of the goodness of their heart, lower their tariffs, lower their non-tariff barriers. The other alternative would have been to enter into more traditional ways
types of trade negotiations that could take years and years and years to resolve. That does not fit with the Trump administration style, right? He moves very quickly, very swiftly, very hard, and he sees what he gets back. And so this is an unorthodox style. It's again, unprecedented. I think their hope is exactly what happened, which is that 70 some countries came to the administration and said, let's make a deal. But I think we will judge this moment and we will judge this tactic
This is not a tactic you have any experience of?
I saw this play out in Trump 1.0 many times. And some of those times were in closed doors meetings with world leaders where the president would take a very, very hard line. And I often saw our trading partners fold in response to the hard line tactics. And for the other element, I often would get asked because I did negotiate for different administrations, like what strategy worked? You know, where did you have more fun? And my answer was always I had the most fun in the Trump administration.
Because when you're sitting across the table from someone who thinks that your leader is crazy enough to do it, you can say almost anything at the table. And I do find that that gives you a lot more leverage. But the other piece of that is what I do now, where I advise businesses and companies who are looking for more stability, predictability, certainty as to where things are going. And when you see these big tariff swings back and forth from one day to another, it is very challenging for the private sector to work out what's happening and what comes next.
But that's why, to me, the audience for a lot of this were other governments, were other trading partners, because it's part of his negotiating strategy to try to bring down some of these barriers that have been stuck there for decades. And he may be able to pull it off. We'll have to see. It's interesting what you say about this being a... You're saying these are longstanding American issues and it's not really bipartisan. It's...
successive administrations have had these kind of frustrations. I suppose you might compare it to his approach to kind of, I don't know, NATO allies defense spending. That's a concern that has been running between, you know, Obama was bringing that up and Biden was bringing that up and so on. So that's important context. Let's move on to China. I'll just read out that part of his tweet or his truth. I don't know what's the noun for a post on Truth Social. Is it a truth?
I think it's a truth, but it feels awkward to say. I agree. It does, doesn't it? It raises all kinds of philosophical questions. But anyway, this is what he said on Wednesday. Based on the lack of respect that China has shown to the world's markets, I am hereby raising the tariff charged to China by the United States of America to 125% effective immediately.
At some point, hopefully in the near future, China will realize that the days of ripping off the USA and other countries is no longer sustainable or acceptable. And then he goes on conversely, based on the fact that 75 countries have called representatives of the United States. There'll be the 90-day pause, which we've just talked about. What do you think is really going on with this China business? Because he seems to want the Chinese to come to the table and make a deal. On the other hand, it seems...
There seems something a little bit thuggish about this. It seems like China is being singled out because China was the only country that dared to reciprocate to these tariffs. I mean, is this kind of a punishment beating? Is this a kind of like, look, look, look, the rest of the world, you know, if you don't comply with my demands, you know, I'm going to really kick the living daylights out of
out of this one person and the rest of you get in line or is it as simple as him trying to trying to get the Chinese to the table or a mixture of the two
Well, I think especially for a U.S. audience, you're not going to get a lot of sympathy in terms of being tough on China, right? Like there's definitely this perspective that for decades they've been ripping off Americans and cheating the rules and gauging an unfair trading practices, subsidizing industries, distorting global markets. So, you know, how do you take this on? You know, the United States brought WTO.
dozens of lawsuits before the World Trade Organization to try to discipline China, all of which the U.S. won. Nothing changed, though. Chinese practices got worse. And the U.S. tried to directly negotiate with China, both during the Obama administration through some of these working groups and then in the Trump administration through phase one.
But once again, the situation has gotten worse and not better. And so I think you're seeing the president take an even stronger tact this time with China. But it's not surprising that he punched back at China's retaliation. This was forecasted in the original executive order that he issued that it provided an escalation clause, meaning the president had the authority to adjust tariffs upward.
in the event that other countries sought to retaliate. And you heard everyone in his administration from Secretary Besson to Peter Navarro to others saying, look, for countries that retaliate, that's a bad idea. Countries should just stay the course,
Stick with us, bear with us, and we'll see where we get to. And that's very much the message that came out of President Trump and Secretary Besson yesterday, who effectively said the same thing of like, we're removing tariffs for everyone who didn't retaliate against us. And so I put China in its own category, right? These are the two world's largest economies, right?
There is a dynamic that exists between the United States and China that does not exist between the United States and any other country on Earth. And this will be a political off ramp and a political solution between how these issues get resolved. But it is different than the United States relationship with the UK or Canada or Australia or any other country on Earth.
Or Vietnam or Namibia or anybody. We talk often in these general terms, but since you were dealing with these trade issues and you mentioned it there, you mentioned these long-running American frustrations with China bending the rules. There's a lot of stuff going on there, but if you could pick kind of the top three issues
examples. What are China's offenses from the American point of view on the trade? How are they breaking the rules of free trade? The list is very long. You could just look at that Section 301 report that the first Trump administration put out, focused on China's IP theft
on its distortion of global markets, on its subsidies for certain industries, its forced technology transfer practices, its economic coercion against third countries. There's a very long list of things that the Chinese government has done. And part of the challenge is some of these things are covered under WTO rules. Like you think about China's practices for critical minerals and rare earths.
where they're manipulating the market globally to maintain their chokehold on those sectors and those industries.
The WTO has found in successive cases that China was breaking the rules and yet China didn't comply. And so that's part of the challenge is there's no real action forcing mechanism there. And then the other piece of it is a lot of WTO rules and global rules don't cover some of these Chinese unfair trade practices because the system wasn't built to accommodate a large non-market economy.
And so that's where you see the Trump administration taking more of a unilateral approach or working with the EU, with Japan, with other allies to try to address some of these things like economic coercion or more national security related challenges in the investment space or export control space. Can I put to you then what the Chinese foreign ministry's
spokeswoman has been putting out on X over the past 24 hours. And the summary, really, I think there's this thing she retweeted. This seems to be the Chinese argument. China drops tariffs for vulnerable countries, prioritizing shared growth.
And she's tweeted a picture of countries with which China has a zero tariff relationship. The U.S. imposes protectionist tariffs on practically the rest of the world. Two visions clash, a symbiotic world versus the law of the jungle. Which do you prefer? So it seems to me the Chinese are kind of seizing this moment to say, look, we are actually the pillar, the defenders of global free trade. And America is not. It seems to me you're saying that's nonsense. Yeah.
Yeah, I think it's ironic, right? But of course, China is going to try to make this pitch that, look, we're the ones who are abiding by the rules. The United States is breaking them. It was the same pitch that they made during the first Trump administration. I think they were very unsuccessful in doing it. But, you know, they're going to try again. And at this point, while Trump has imposed this 10 percent global baseline tariff on governments,
He's taken away tariffs from everybody else in terms of these reciprocal tariffs. And so the focus really is just on China. But of course, these exchanges are going to be colorful between President Trump and President Xi. We saw that in Trump 1.0, and I'm not surprised to see it again this time. I'm interested in what you would have to say about interactions with China under Trump 1.0, because...
I saw a really interesting exchange just before we came on. Commerce Secretary Howard Lutnick said he's not engaging with China, neither is the Treasury Secretary, because Trump wants to negotiate directly with Xi Jinping. If we get a contact, we'll just pass it to the president. This is really about him.
He said publicly that maybe they don't really know the best way to go through. But the answer really is it's a phone call between the two leaders of these giant countries that they can work it out together. And Ryan Haas, who's a China East Asia specialist at the Brookings Institution, he notes that I've been told repeatedly that no advisor to Xi would recommend that Xi initiate a call to Trump now.
Because for the PRC, leader-level talks are by definition successful. You have to have extensive preparations to guard against surprise or failure. And he talks about how the Chinese were particularly spooked by President Zelensky's car crash press conference in the Oval Office and the sense that no Chinese official wants to carry the can for setting President Xi up for a similar kind of showdown. So I'm just wondering whether you think this...
gambit to get the Chinese to the table or to get a phone call with Xi Jinping is even possible? Is there just two leaders, two ways of thinking just talking completely past each other here? I agree that I see no sign that either President Trump or Xi Jinping intends to back down at this very moment. Now, that said, during Trump 1.0, there were many moments where it actually took that leader level engagement to unlock
any sort of progress at the principal or deputy level on down. And sometimes it was the reverse, because the common way that you would advise a world leader is, you know, we are going to lay some groundwork before two leaders get on a call to make sure that that call is successful. And that's the way that most governments, and I spent 10 years as a U.S. diplomat, that's the way that most governments interact with some of these high level, high stake phone calls.
But when it comes to the U.S.-China relationship, it was actually the reverse in Trump 1.0 many times. And if you recall back to 2018, where we had hundreds of billions of dollars worth of tariffs on each other at 25 percent, which at the time seemed very high stakes. And now by comparison to these 125 percent tariffs,
seemed relatively low, we weren't talking to each other at a political level or a sub-leader level in any productive way for months. And it really took that leader level meeting on the sidelines of the G20 in Buenos Aires that year
to actually start that tariff detente where we stopped increasing our escalation towards each other and to kick off an actual trade negotiation in terms of phase one. So I've seen this play out both ways on the U.S.-China side, but there are only two people in the world who are going to decide how this relationship goes, and that's President Trump and President Xi. Goodness me.
the last kind of thoughts, really. One is you mentioned earlier, you're now, you know, you're a lawyer, you advise companies and trying to, who wants stability and the safest way forward and so on. And you kind of said it's quite difficult at the moment. I mean, how alarmed are your clients and the kind of conversations you're having this week? What's the mood? Yeah, I think that there was a ton of concern from the private sector before yesterday.
about, you know, are these tariffs, the ones that were scheduled to go into effect yesterday, really going to be in effect for a long time? Will there be negotiated deals? How is this going to play out? When is it going to play out? Those were all pretty significant questions that were impacting everything from sourcing to investment decisions. But there was certainly a sigh of relief yesterday among a lot of the private sector when the
and the fact that they have been out there so publicly saying that they intend to use these 90 days to negotiate deals with a number of governments, meaning that at that 90-day mark, perhaps these tariffs won't actually be imposed. Again, we put China in a different category, in a different bucket.
So I think that the business community is, again, breathing a sigh of relief today. But the president has said he needs months for this to play out. And that's what the administration is asking for. They are looking to take a total sledgehammer to the global trading system and to reformulate all of these trading relationships.
And that's not something that's going to get resolved in a matter of days or weeks. So I do think that in three to four months, the business community is going to become a lot more angsty about wanting some answers and some certainty. But at least for the moment, most Republicans on Capitol Hill, most in the private sector and American voters seem to be giving the president a bit of space and a bit of grace to see if he can land these planes. When you say land planes, I mean, it sounds like conduct a
I mean, this is revolutionary rhetoric, right? I mean, like completely knock down global trade and build it up again in a way. You consider yourself a Republican? Yeah. Is that fair to say? Republicans are meant to be conservative. Conservatives are not meant to be revolutionaries. They're meant to preserve. I'm just wondering kind of, is it a strange kind of sensation? You've spent 10 years kind of
you know, advising US governments and learning the laws of the system as it is, as it exists. I mean, do you buy into this idea? Do you think this is a good idea? It's kind of revolutionary destruction. I think that the previous tactics haven't worked. And the system, the global trading system has remained frozen for the past 30 years in a way that no longer reflects the
comparative advantage, respective levels of development, the way that the economies have grown. It doesn't account for China. So clearly, clearly, the global trading system needs to evolve. And the manner in which the attempts to reform the system have been conducted previously haven't worked.
And so I think that there is a lot of grace on the Republican side in particular, but also among Democrats who traditionally are much more supportive of the use of tariffs in U.S. politics to try to see if this other approach will work. Now, I think it helps the president politically that there is this 90 day pause. So some of the more extreme tariff rates aren't going to go into effect today.
while there are ongoing negotiations. But I think that the American public will judge the president on whether he's been successful. And so that's why, again, it's going to be a few months before we start to see any of the fruits of this labor. And he may succeed or he may not. And I hope he does. I'm sorry to pursue this philosophical interest. It's something I've been thinking about a lot. Do you think globalization has failed?
I'm not surprised to see the backlash to globalization that we have seen now. I think that it has led to a loss of production and manufacturing in American society that is politically unsustainable. And so you see this not just on the Republican side, but also the Democratic side.
And so just before the election, I was looking at the polls and 60% of Americans, 60% believe that trade has been better for other countries than it has been for the United States. Do you think they're right about that? I think the politics are...
what they are. And in a way, it doesn't matter whether or not certain sectors have done better than others. If there is a large portion of your society that feels left behind in a democracy that is not politically sustainable.
And so that's what we're seeing play out in terms of U.S. politics. But it's happening on both sides of the aisle. And the Biden administration tapped into a lot of the same dynamics in terms of the blue collar worker feeling like it had been abandoned by the trade policies of the political elite. And so that's part of the dynamic that the Trump administration is trying to fix. And at least in American politics, you can do one of two things.
You can take the Biden administration approach, which is to just not talk about trade because it's too politically toxic and we're just not really going to have an active trade policy.
Or you can take the Trump administration approach, which is to give the people what they want, which is a total revolutionary approach to the way that we have done trade policy for the last 40 or 50 years. And so that's what we're seeing play out in terms of domestic politics in the United States. But I don't think that means we're not going to trade with other countries. This isn't about doing everything and building everything in America.
But it is about for those critical supply chains that are important for U.S. national security interests that we have domestic production and domestic capability and that we're rebalancing our other trading relationships, including with allies, to more accurately reflect
these comparative advantages and these levels of trade because the United States had been so active for all of the last century in being the first mover in terms of lowering our tariffs, lowering our non-tariff barriers in the hopes that other countries would follow. And they just didn't. And you're seeing the American people very much feel like, well, it's just not fair. We need to make this more fair.
And so that's really what the Trump administration is tapping into. The last thing I want to ask you about, obviously, you know, you worked in the last in the White House, in the last Trump administration. You're not there now. Could you tell us a bit about your experience and how you feel that Trump 2.0 differs from Trump 1.0? Are there things you're surprised about? Are there things that where's the continuity and where's the difference in your view, kind of your personal kind of?
And I was telling a friend recently, you know, take whatever I say is going to happen and add 10. That will give you a more accurate reflection of the second Trump administration versus a first Trump administration. So, you know, first, he's a second term president. He's not up for reelection. And so some of the
political constraints that the president may have felt during the first term of like, this is a second term action. We're now in the second term, so he can do those things. So like this idea of a 10% ring of tariffs, this global baseline tariff, it's something we talked about in Trump 1.0, but he didn't move forward with at the time for a variety of reasons. And now we're in a second term and we're seeing him take that step.
And so I think some of the policies come across as more aggressive because there there isn't this election at the end of it where he may want to moderate some of those actions. The president has been remarkably consistent in his views on trade for the past 40 years.
And so he very much is in legacy building mode as well. He's a true believer in the things that he's doing. He wants to enhance domestic production and domestic manufacturing. He wants to level the playing field with some of these unfair trading practices. And so he's doing that.
And so I think we're seeing this happen with tremendous speed. He is taking huge swings. Like we said, this is about breaking the entire global trading system to build it back up again. Like this is the biggest trade action of my lifetime. And I think it will be the biggest trade action that we see potentially for decades to come. But the other thing I'd say about the difference between Trump 1.0 and Trump 2.0
is that we have had four years in between where, frankly, and this is where the political consensus comes in, is divided as a country as we can be on most issues between Republicans and Democrats. We're less divided on trade. We may be divided on tactics. You've heard a number of Democrats come out and criticize the president's tariffs, but they're not critical of what the president is trying to achieve.
And the Biden administration shared a lot of the same ideology as the Trump administration did, not just on the use of tariffs and leveling out the playing field, but also on China.
And back in 2016, you had something like 54 percent of Americans who believed that China posed a national security challenge to the United States. Today, that number is up to 83 percent. Like there is large bipartisan consensus on the China challenge. And so I think that the dynamics and the U.S. electorate has shifted dramatically.
And so Trump's second term, he has more of a mandate on a lot of these things to move forward. And so that's a big difference between Trump 1.0 and Trump 2.0. So much of this back in 2017 was like a massive shock to the system. And now a 25% tariff almost seems low by comparison, right? So the country has moved along with the president as well. So that's partly why things are happening at break next week. Kellyanne Schor, thank you very much for joining us on Battlelines.
That's all for this week. We'll be back on Monday. Until then, that was Battlelines. Goodbye. Battlelines is an original podcast from The Telegraph created by David Knowles and hosted by me, Roland Oliphant, and Venetia Rainey. If you appreciated this podcast, please consider following Battlelines on your preferred podcast app. And if you have a moment, leave a review, as it helps others to find the show.
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