How The U.S.-China Trade War Is Affecting The Global Economy
AILSA CHANG, HOST:
Leaders of the Group of Seven, the world's leading industrial democracies, wrapped up their summit in France today. This summit took place as the U.S. and China ratcheted up their trade war over the weekend with no clear end in sight.
Peter Spiegel is the U.S. managing editor for the Financial Times newspaper. He was watching the G-7 summit in Biarritz, France. And he joins me now to talk about what, if anything, was achieved.
PETER SPIEGEL: Thanks for having me on.
CHANG: So there were a lot of mixed signals all weekend and also today from President Trump towards China. He would go from threatening to raise tariffs to offering to negotiate with China. Like on Friday, he called Xi Jinping an enemy, then later he called Xi a great leader. Trump was asked about this sort of back-and-forth quality to his remarks this weekend, and here's how he explained it.
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PRESIDENT DONALD TRUMP: It's the way I negotiate. It's done very well for me over the years.
CHANG: What do you think, Peter, if anything the other leaders took away from all of these sort of conflicting remarks?
SPIEGEL: Well, I'd imagine they're just as confused as everyone else, including the financial markets, I must say. I mean, remember - it was just Friday where all these angry tweets led the Dow Jones to plummet - fourth straight week of losses, which again, he doesn't like in general because he tends to measure his own performance on how the stock market does. And perhaps that's why today he came in and sounded slightly more conciliatory. Again, the markets responded positively because of that.
But frankly, as you said, because the comments are so contradictory, I don't think the fellow leaders have any sense of where he's going on this any more so than we as journalists or investors in the markets. The one thing to say is there is a growing feeling in Europe, as well as in the U.S., that China is a bad actor.
CHANG: Do you believe that these leaders came away from this summit with any consensus on what to do about that bad actor?
SPIEGEL: No. And I don't think that was on the agenda, to be honest with you. I mean, there are several issues that are really hot points right now. One is Huawei. This is a Chinese telecom operator that basically is providing everyone, including our European allies, with a backbone for the next generation mobile phone networks.
SPIEGEL: 5G. So this is of great concern to the U.S. because some of these are our closest allies, including Britain, Germany. That is still a very hot issue about how to deal with China and has risen to the level of the G-7 because they're having discussions on bilateral levels. That was not discussed up here. And I think that's sort of the trouble with Trump's very-in-your-face diplomacy.
There are serious issues which the U.S. and its European allies have that they should be discussing, that they have common cause on, but because in these kinds of settings the Europeans become so nervous about sort of angrily setting Trump off or triggering him, these things are not discussed at that level.
CHANG: Well, that also raises the question of how much impact the G-7 summit even has anymore.
SPIEGEL: It really ebbs and flows. There are occasions when it does have real influence. I remember back to some of - you know, the financial crisis in 2008, 2009, and the eurozone crisis in 2010, 2011. We were getting those leaders in the room to calm the markets, to come up with strategies to deal with the financial crisis. That was pretty critical. Then remember sort of post-Russia invasion of Ukraine, again, they kicked Putin out of - what was then the G-8 and created the G-7. And there were some consensus built around really tough sanctions against Russia.
So there have been moments of crises where these things do have some impact. The problem is, you know, 9 times out of 10, these meetings happen and they're just processed. They're moving things along. You know, things that were discussed between Trump and Macron today, like the issue of whether to tax tech companies in Europe, that's a serious issue. There does seem to be some progress on that.
So it's not inconsequential. But I think it's one of those things that nothing really big happens unless there is a big news event or a big event on the global stage where the allies need to consult.
CHANG: Peter Spiegel is the U.S. managing editor for the Financial Times.
Thank you very much for joining us today.
SPIEGEL: My pleasure.
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