Europe Is Starting to Rethink China

[Music] I feel like to some degree this is the fault of the US and Europe and really every other country that has for the last 25 years gone on this you know buying spree of buying all these chinese-made made products I mean really since China entered the WTO uh but just like Chinese products are flooding the retail markets of almost every country right including the United States and like you take a I don't know like a t-shirt or something the the you could buy a t-shirt from China for say I don't know $10 and you could make that same t-shirt here for maybe $12 or $15 but you'd make it a lot cleaner uh because the US has you know environmental standards and plus it wouldn't need to be shipped uh halfway around the world uh and so there's a lot of I don't know I'd say it's not exactly complicity in the sense but it's like it's kind of we've been exporting our environmental problems to China in a kind of similar way that China has been exporting some of its environmental problems to the global South with deforestation the strip mining yeah so you're you're thinking of I like processing of minerals like Rare Earth which is a really dirty process um you know we have done that and you know mining uh We've outsourced that as well but I think there's an increasing recognition that that makes us the United States but also some of our friends even on the Pacific Rim or Europe you know really vulnerable to Chinese pressure I mean Rare Earth are increasingly important to any number of Industries you know starting with semiconductor and uh lasers but military equipment of All Sorts um so I think there's a to you know get into the the trade issue there's there's a increasing um uh change in our understanding of what we should be doing I mean you could take just a basic principle of global trade as it has been practiced for the last 75 years which is reciprocity of benefits I mean we're there there is no reciprocity with China um and the way they subsidize their Industries uh we can't compete with that we couldn't compete in solar um because they overproduced and they uh um they exported their way to dominance so I think uh I think there's a reckoning coming even even the Europeans have realized that you know the the basic core of their uh economies which is uh automobiles Machine Tools uh manufactured goods in one sort or another chemicals um they're they're starting to rethink their uh openness to China uh you know under Trump the first Trump and you know carried on really in the Biden Administration uh we were always trying to get uh the Europeans especially to join us and you know telling the Chinese that unless they you know sto subsidizing or you know stopped underselling us stopped overproducing that we're going to do what Trump did and now he's threatening to do more um so I think that there's a global Reckoning coming coming on to the four um so how would that Reckoning work cuz I guess I'm wondering how do we break out of the cycle of essentially because of China subsidizing all of these manufactured goods that they make they are they have low consumption right and high Supply like they have low demand and high Supply so they're exporting that Supply to us and we have high consumption demand but we have low domestic manufacturing supply for especially for a lot of these things that we've offshored and can no long make in the US so we're kind of in the cycle where we're kind of our high consumption is keeping China's economy going but you know China's output of excess Supply is keeping our consumption going so how do we break out of this well the um the only way we can do that is just say we're not going to buy your stuff anymore and try to get as many of our uh supposed friends around the world to do do the same thing that would uh result in higher prices here in the United States I don't think there's any doubt about that uh so we would have to make a political decision which I think at least Trump in his own mind and some of his advisors have made is that we have to take that now another a pet interest of mine is um trying to PR preserve something of uh the global trading system in part because I think we need to keep our friends on the Pacific Rim Europe but increasingly the the global South we need to keep them uh in our camp if you will and our you know nasset indust Ral policy uh which the Biden Administration really supercharged um totally undermines our commitment to the principles of the World Trade Organization so we have to juggle that if we're going to continue to subsidize our way uh to uh regaining some industrial strength that makes it harder for for us to I think to um enlist our friends in the in the project well like so one thing I've noticed uh when buying clothing for example is I would say like um seven eight years ago almost everything was made in China and now there's a lot more variety you've got Vietnam Malaysia Bangladesh Guatemala Guatemala yeah uh Malaysia and so it like is this part of um the US you know these are still like cheap labor com uh countries right which you know if you look at like economic theory like oh well you know it makes it makes sense to to to get things where they can be produced cheaper um but like is is this the right way to go or uh are there you know other problems or externalities that are resulting from this shift well um I I've got to tell you I'm not particularly concerned about buying T-shirts from even from China I don't think it's um there's no National purpose that is endangered uh if we have trade um including including with China on stuff like that but what China's doing I mean some of the that stuff I remember going it's a long time ago I was in the first Bush Administration way back then I visited Panama one time and they showed me this clothing Factory that they had just set up and even back then it was run by the Chinese I mean there there's a lot of that going on they're moving you know into lots of places around the world and producing stuff around the world but uh to me the important thing is more um stuff that is important to our you know really narrowly Define National Security our leadership in technology so that's a narrower list of stuff but I think both the Trump Administration and the Biden Administration um you know were at least on the right track of identif ifying what our our needs are for maintaining our national strength our national security and our leadership in Industries like semiconductors or uh Quantum Computing um my own view is we ought to support those more by making sure that our research capability uh our basic research capability is continues to be the best in the world and that hopefully the Chinese government can't steal that right well we we have to enforce the intellectual property laws as well which is another you another issue