mexico, china and the eu? these are the questions that are being searched online tens of the us and americas of the us and americas programme at chatham house. programme at chatham house. lovely to have you both with lovely to have you both with us. i'm going to start with us. i'm going to start with

dharshini david, and some you, dharshini david, and some questions. basic questions. to my question 7 questions. to is, how do terrace work and do terrace work? fix, is, how do terrace work and do terrace work?— is, how do terrace work and do terrace work? a really good one to start with. _ terrace work? a really good one to start with. tariffs _ terrace work? a really good one to start with. tariffs are - to start with. tariffs are basically those taxes on imports. they are paid for by the firm or the person we import the goods into the country. why are they there? they are meant to protect home—grown businesses from overseas competition, but what they also do is make things more expensive, if they are passed on in full to the final consumer. so we have got these tariffs, which are there, also president trump thinks, to win some tax money, but do they actually work in the way he thinks they might? the answer is possibly not because if they work in the sense of money the that he may want to see, it is because it

7 quite possibly not, home? quite possibly not, particularly if the other tends to happen, country, as tends to happen, take some of its own and country, as tends to happen, take is me of its own and country, as tends to happen, take is what of its own and country, as tends to happen, take is what are�* its own and country, as tends to happen, take is what are seeing 1 and country, as tends to happen, take is what are seeing with country, as tends to happen, take is and are seeing with country, as tends to happen, take is and us, ;eeing with country, as tends to happen, take is and us, tit—for—tat, canada and the us, tit—for—tat, they try aim it they try and aim where it hurts. ~ . ~ they try and aim where it hurts. ~ ., ~ ., any minute, zzziny minute, but i zzziiny minute, but i n to bring1inute, but i zzzii'n- you le, but i zzzii'n- you in but i zzzii'n- you in here, dr vinjamuri. so many leslie vinjamuri. so many economists think tariffs are a economistsrthinkrtariffs are a idea, but donald trump is with the us 7 with the us and gambling with the us and even the global economy by putting these tariffs on. so a lot of iaskiing,’why 7 7' ' iaskiing,’whyisfir ” ' ”méskihg’,'wi{yis'i}? ' ’ iaskiing,’why is}; doing 717- e.. 7 the wall street it? to a point, the wall street which m journal, which certainly the has frequently z 2 _—:£ ze-= trump, the tariffs, dumb, not to put— trump, the tariffs, dumb, not to put too— trump, the tariffs, dumb, not to put too fine a point 5—— 2 very widespread there is very widespread _ that - there is very widespread that they are not there is very widespread for that they are not there is very widespread for the 1at they are not there is very widespread for the us they are not there is very widespread for the us economy iot there is very widespread for the us economy and probably not good for consumers, even if is consumers, even if trade is diverted _ consumers, even if trade is diverted to other those countries are likely to be producing goods at a higher

cost _ be producing goods at a higher cost but— be producing goods at a higher cost. but donald is doing cost. but donald trump is doing this, _ cost. but donald trump is doing this, a _ cost. but donald trump is doing this, a - of— cost. but donald trump is doing this, a of things, one this, a couple of things, one he this, a couple of things, one i he was _ this, a couple of things, one he was elected both times in is he was electedbfith {fa - on is he was electedbfith t'",s - on a is he was elected'bothtimes—in -m— is he was elected'bothtimes in on a very real grievance, part on a very real grievance, that— part on a very real grievance, that he — part on a very real grievance, that he and m _uppor 7 7 their jobs in people who lost theirjobs in manufacturing, but = _252 —_—- é only, white? who hadn't a..,,..,.,., ”a. to university, who 7 77 7 — t, o lived gone to university, who lived in - bett— gone to university, who lived in belt states are in rust belt states that are - states, _ in rust belt states that are states, really important swing states, really important to the — swing states, really important to the us election. so not only - trump _ to the us election. so not only trump believe personally = -::7 = _:7 quite frankly, loves e and, quite frankly, loves the idea — and, quite frankly, loves the idea of— and, quite frankly, loves the idea of tariffs, but he has mobilised his electorate really mobilised his electorate this really mobilised his electorate - this idea _ really mobilised his electorate this idea that he around this idea that he is to around this idea that he is - to -jth - around this idea that he is to jobs back home going to bring jobs back home and he — going to bring jobs back home and he is _ going to bring jobs back home and he is going to bring manufacturing jobs back home. —7 7 he links triffs -oods nks tariffs -oods muchriffs -oods much more exports -oods much more than arts of goods much more than exports of goods much more than exports of- to— of goods much more than exports of- to the _ of goods much more than exports of to the united of services to the united so of services to the united - so it— of services to the united - so it is, - of services to the united so it is, �*all states. so it is, for all sorts

of reasons, one the few of reasons, one of the few things— of reasons, one of the few things that donald is of reasons, one of the few things theological is of reasons, one of the few things theologicalabout is of reasons, one of the few things theologicalabout in of reasons, one of the few things theological about in his almost theological about in his commitment. the that is commitment. the thing that is different— commitment. the thing that is different in this second administration is that he is actually— administration is that he is actually linking a actually linking paris to a broader— actually linking paris to a broader of demands. so, his broader set of demands. so, his real focus— broader set of demands. so, his real focus in his first term in real fdllls—ldjjlsilesltb-led—lel - m_ real fdllls—ldjjlsilesltb-led—lel - —— that he is- real focus in his first tgrrn in —— that he is linking office —— that he is linking paris _ office —— that he is linking paris to— office —— that he is linking paris to a _ office —— that he is linking paris to a broader set of g— egiisleoag l l-l�* tnf g?” focus is to demands. his first focus is to a bitaterai— demands. his first focus is to a bilateral deficit, so a bilateral trade deficit, so america _ a bilateral trade deficit, so america is out in relationships, 5m5fi55 i75— l�*??ififil 5495“? - relationships, his trading relationships, in his view, — trading relationships, in his view, if— trading relationships, in his view, if you look narrowly view, if you lookjust narrowly the view, if you lookjust narrowly i the - it _ view, if you lookjust narrowly the it imports more at the deficit, it imports more than _ at the deficit, it imports more than it— at the deficit, it imports more than it exports to places like canada. _ than it exports to places like canada, eu, china. but now canada, the eu, china. but now he is _ canada, the eu, china. but now he is trying _ canada, the eu, china. but now he is trying to link the threat of tariffs _ he is trying to link the threat of tariffs to a broader set of policy — of tariffs to a broader set of policy goals, so securing at the border, reducing the - that— the border, reducing the that crosses from sentinel that crosses from mexico _ sentinel that crosses from mexico into us, from canada meeiee irate the as. frer e. a... the - the us, - the us, and meeiee irate the as. frstrirt canada the us, and no, meeiee irate the lie. frerri canada the us, and no, is 7 little sentinel 7 7 little sentinel that 7 2 little sentinel that coms i eerie tittte sentinetrthet—eemee flew—we— the �*e'er�*g tittte sentinetrthet—eemee flew—we— the us from eerg tittte sentinet'thet'eereee - the us from canada, but eerg tittte sentinet'thet'eereee i stille us from canada, but eerg tittte sentinet'thet'eereee i still a us from canada, but eerg tittte sentinet'thet'eereee i still a threat 11 canada, but tier}! tittte sentinet'thet'eereee i still a threat that nada, but

is stitt a threat that denatet cat, is stitt a threat that denata aaa, is usin- is stitt a threat that serrate ass, is usin- in trump is—using in—part— beeaese l_ trump is—using in—part— beeaese im— trump is—using in—part— because gives him the justification it gives him the justification that— it gives him the justification that he _ it gives him the justification that he needs use the eiiéziijis�*xlr’tziifif’zfiiat is drawin- ie tariffs but in theesase—afs e .. he the real concern tariffs but in thesase—afs - the real concern is europe, the real concern is that— europe, the real concern is that he _ europe, the real concern is that he might link the threat that he mi-ht link the l - - tariffs that he mi ht link the threat that he might link the threat tariffs to questions of europe's security, supporting europe's security, pressuring europe to more pressuring europe to spend more on security— pressuring europe to spend more on security and defence, linking _ on security and defence, linking it potentially to the 227: zzz—n zginf ze:_h z of ukraine. so it is 7- not only about bilateral trade deficits _ not only about bilateral trade deficits. it might be a link to much broader set oii concerns a very difficult to 777—— 777f777ifult 707777 7 7 a v( to in ficult to a v( to in an llt to § a v( to in an llt to? way, respond to in an immediate way, so - is— respond to in an immediate way, so - is an _ respond to in an immediate way, so is an enduring so there is an enduring as so there is an enduring - as to- so there is an enduring as to not only whether question as to not only whether these _ question as to not only whether these which operate these tariffs, which operate like sanctions, are applied, but under what will but under what conditions will they— but under what conditions will they be — but under what conditions will the be , ., , they be lifted? dharsr as our collea . ue they be lifted? db: ..'ni - our colleague nomia david, our colleague nomia iqbal was in a pool �* people iqbal was in a pool of people talking to donald trump and in

terms what dr leslie terms of what dr leslie vinjamuri saying, did europe 7 77 europe a7nd77 europe a7nd7the uk. he address europe and the uk. he said will happen said it will definitely happen when it comes to the he when it comes to the eu; bet he suggest a deal could did suggest a deal could potentially be worked out with the uk. a question here, as uk and watched as the uk import and export to the us? s, watched as the uk import and export to the us?— watched as the uk import and export to the us? a really good cuestion. export to the us? a really good question. the _ export to the us? a really good question. the i is _ export to the us? a really good question. the i is the - export to the us? a really good question. the i is the uk's i question. the us is the uk's biggest individual trading partner. about in every six partner. about £1 in every six we trade overseas to that we trade overseas goes to the us and vice versa. what that break as? we buy = -7 the usa a lot of machinery "a" the "ca a !*t of "e'hee' , ,, ~ if r things like that, and things like that, pharmaceutical products and the 7 things tend go the same things tend to go the �*way, cars as same things tend to go the �* way, cars as well. other way, and cars as well. actually, increasingly, we are more and more services e-—= the us the us and as dr was there, t/irtiartteiri was sayirtstheree— w— w w is t/irdartteiri was sayieathereee — r— w is something t/irufartteiri was sayiegtheree—e . a er is something that t/irdartteiri was sayiegtheree—e . a er is something that is trump's77 trump's7sites in president trump's sites right now. to right now. when. it comes to it is pretty much neck goodsrit—is—pret�*ty'moch neck neck how much goodsyit—is—pret�*ty'moch neck neck how much the two 777cell 7 7 777cellto 7 7 777 777cellto each 7 7 7 77 cell to each other, 7 7 cell to each other, so against) each other, so against the :h other, so

against the issue er, so against the issue with o against the issue with a there against the issue with a trading isn't trading deficit isn't looming large in president trump's mind when it comes to the uk. by contrast sells far more contrast the eu sells far more cars to the and it buys from us and germany in �*president7trump seed particular president trump seed is a problem because about 7 of haff it buys of the staff it buys from third of the staff it buys from the is cars, most of that the eu is cars, most of that machinery from and where the issue lies is trump using president trump using these as bargaining chip. we things as a bargaining chip. we rely very a; on this as an rely very heavily on this as an economic relationship. it = -e look at the moment as doesn't look at the moment as if we are directly line, = -227 could7 change 7 could7 change quite bot things esotd change quit*"""'"'”"www" a bot things eootd ehangdite” f " ' ' f ’ hot things resold shang7tlite"* f " ' ' f ’ in, , ., ., ., , hot things resold shang7tlite"* f " ' ' f ’ in,a ,., ., hot things resold shang7tlite"* f " ' ' f ’ in, a , m ., .,, hot things sootd change geiite in, a mesh one because hot things ceotd change geiite in, a mesh one because a come in, a good one because a lot of people asking, is this just a tactic donald trump is using negotiate? iii just a tactic donald trump is using . negotiate?- using to negotiate? if any of using to negotiate? if any of us knew the _ using to negotiate? if any of us knew the i to i using to negotiate? if any of us knew the i to that l question, we wouldn't need to work— question, we wouldn't need to work any— question, we wouldn't need to work any more, we would be so in our , in our predictions. is very == is very hard hard i is very hard hard to i i is very hard hard to know. l know, he is known for 7 know, he is known for the tguknow n- .|-.| - n- ofthe you know hg g iggggg tgg thg i of the deal, tgu know. he is known for the of the deal, making a very = _::7 =———:7 _-.7 big demand, trying to get something back and then, you somethingtzack and therltytfli i settling somethingtzack and then, you settling little bit

know, settlingfia—t'lttte—bit - m— know, settting a little hit tariffs not, you lower. tariffs are not, you - one _ lower. tariffs are not, you one president trump has know, one president trump has used _ know, one president trump has used tariffs, they haven't been know, one president trump has us malleable :hey haven't been know, one president trump has us malleable :hs that. an't been know, one president trump has us malleable :hs that. he been as matteaete—as that» he ”his, levy them and as matteaete as that» he - levy them and then as matteaete—as that» here , , levy them and then lift doesn't levy them and then lift - very— doesn't levy them and then lift very once he has them very quickly. once he has to them very quickly. once he has - to them, _ them very quickly. once he has to them, they to applied to them, they tend to _ that— applied to them, they tend to _ that is— applied to them, they tend to that is why the stay there. that is why the big problems. so if he problems. seemed—hes -m_ problems. so even if he is them bargain, it is clear j _—z z _22 i clear that theyi, i i clear that theyi, in. not clear that they will, in - ehd _ not clear that they will, in - end up— not clear that they will, in end up being that kind effect, end up being that kind of tooi~ — effect, end up being that kind of tooi~ i is _ of tool. he is committed to them, _ of tool. he is committed to them, he _ of tool. he is committed to them, he likes them, he has _ agenda i them, he likes them, he has agenda. he states... ..,..,.....,.., 7-.77.7777 77 7 77777 to brin- in more is about to renew a significant set of tax z:— z i— mackie has got. é— mackie has got a cuts. —— mackie has got a domestic— cuts. —— mackie has got a domestic agenda. that he domestic'agenda: that means rh . to domestic'agenda: that means he - m— domestic'agenda: that means he to replace that domestic'agenda:thatmeanshe to replace that revenue for government from the us government from _ and - the us government from _ and he - the us government from and he is underthe i think most economists belief, i think most economists think— belief, i think most economists thith is — belief, i think most economists think is fallacious, that he belief, i think most economists thir raise fallacious, that he belief, i think most economists thir raise money us, that he belief, i think most economists thir raise money through he belief, i think most economists thir rai there iey through he belief, i think most economists thir rai there are �*hrough he belief, i think most economists thir rai there are so lugh he belief, i think most economists thir rai there are so manyie tariffs. there are so many reasons, _ tariffs. there are so many reasons, domestic and in terms america's partnerships, and

of america's partnerships, and note, _ of america's partnerships, and note, many these tariffs are note, many of these tariffs are - used _ note, many of these tariffs are used against of being used against many of america's very closest partners america'svery closestattnelt i allies, which america'svery closest partners allies, which is and allies, which is very to and allies, which is very. - to - least and allies, which is very- - to i least. but unusual, to say the least. but whether— unusual, to say the least. but whether he is using them to whether he is usin- the u - whether he is usin themjo fig bargain or not is oartl’g ”firms” but even if e bargain or not is oartl’g ”firms” but even if unknown, but even if he is, it is - hot— unknown, but even if he is, it is - hot- that- is just not clear that this wiii— is just not clear that this will he _ is just not clear that this will be an effective bargaining tooi~ — will be an effective bargaining tool. what we are seeing we —, is have just heard this said, is many— have just heard this said, is many states, canada in particular, 5: to particular, are preparing to retaliate. they have got them particular, are preparing to retalie lined iey have got them particular, are preparing to retalie lined up. iave got them particular, are preparing to retalie lined up. overjot them particular, are preparing to retalie lined up. over $100 am tariffs lined up. over $100 hiiiioh— tariffs lined up. over $100 billion goods. is a billion worth of goods. it is a billion worth of goods. it is a big gamble. this is an big gamble. whetherthisdsan -m_ hig gamble. whetherthisdsan - method for— donald trum- when ou are with donald trump when you are a very— with donald trump when you are a very friendly and a very important state, but a very much — important state, but a very much weaker state, it could to much weaker state, it could - to att— much weaker state, it could to all sorts of lead to all sorts of i _ have lead to all sorts of have seen a escalation. we have seen a governor— escalation. we have seen a governor in texas saying to canada. _ governor in texas saying to canada. if _ governor in texas saying to canada, if canada retaliates with— canada, if canada retaliates with targeted tariffs against

our goods that reproduce here in texas, _ our goods that reproduce here in texas, just wait for it, we 3 back - in texas, just wait for it, we 3 back so- in texas, just wait for it, we back. so we are will retaliate back. so we are in a — will retaliate back. so we are in a very— will retaliate back. so we are in a very uncomfortable situation.— in a very uncomfortable situation. , ., ., situation. *es£:e?szs this final wordin: situation. 7%§?e i this final wording with 7 david 7 7 david beca7use have watching markets around been watching markets around world, asia, europe, now is are they america is opening. are they , ,., , .. . going to america is opening; are they , ,., , ~ — going to the tariffs going to impact the stock , 225 iock 77stock market impacted the stock markettoday we not quite impacted the stock markettoday full not quite impacted the stock markettoday full force iot quite impacted the stock markettoday full force of quite impacted the stock markettoday full force of whats expertly full force of what trump said over the = -= but there now weekend, but there are now concerns about what to concerns about what happens to the eu and as well. the eu and retaliation as well. but it is all spec elation none of us know how far becadse none'ofo�*s knowhow—far is going to go, how long this is going to go, how long it is lost or the it is going lost or what the damagg be. it is going lost or what the damage i be.— it is going lost or what the dama . e be. �* iii 7 all thre7e'or all three major stock you all three major stock in the us have opened lower. not quite as bad as we feared, lower. not quite as bad as we feared. but — lower. not quite as bad as we feared, but yes. _ lower. not quite as bad as we feared, but yes. i in i feared, but yes. 5? a, . as well, euro ean feared, but yes. ff. r as well, european markets feared, but yes. ff. r as well, whenean markets feared, but yes. ff. r as well, when they iarkets feared, but yes. ff. r as well, when they first ts also dropping when they first opened today as well. to you: 5’75 7": f 77you7b7o7th77 77 have you both with us, and dr leslie dharshini david and dr leslie vinjamuri as well, i hope you answered your questions.

hello. many areas of the uk will keep a lot of in the 77today, . . . . 77today,s7o7 7 7 today, s7o7qu7ite7 7 today, s7o7qu7ite7 brave 7cloud sky today, so quite brave cloud like these in aberdeenshire” m” e” a, e be with us of the will be with us most of the day. look carefully at the satellite picture and you can see some breaks across northern england and parts of as england and patent wales as so england and parts'of wales as so there are am �* of you well, so there are a few of you that can expect something a that can expect somethingabit for example in brighter; fer seame'e in over the next brighter; fer seame'e in of over the next brighter; fer seame'e in of days over the next brighter; fer seame'e in of days our' the next brighter; fer seame'e in of days our weathert couple of days our weather will be dominated by this slow—moving weather fronts that a couple oii days a couple oli days to across the uk, running a pressure and the 7 pressure and the rain on it dry pressure and the rain on it will by the time it will weaken by the time it reaches east england, so not will weaken by the time it reach here. t england, so not will weaken by the time it reach here. butgland, so not will weaken by the time it reach here. but the d, so not will weaken by the time it reach here. but the weather: will weaken by the time it reach here. but the weather is much here. but the weather is bringing some rain across the of the uk and quite around the outer windy around the outer gusts of 40—50 mph hebrides, gusts of 40—50 mph through the afternoon. quite mild with for most mild with temperatures for most between 8—12 c. overnight we tonight we keep south—westerly winds feeding in milder air,

be the odd mr patch could be the odd mr patch across of england and could be the odd mr patch across more )f england and could be the odd mr patch across more rain gland and could be the odd mr patch across more rain through d and 7 and i7reland eventually i7reland eventually edg7ing nd eventually edg7ing to with rain eventually edging to the gorth—west and the north-west ofengland and by the northrwest'ofengland and by the end of the night. wales by the end of the night. temperatures 3—4 for eastern temperatures 5—4; for eastern there are miles west £7ngland. there are miles west and northern ireland. scotland and northern ireland. we pick up this band of here, 77he7re7,77that77 7 7 7 7 herethatwill 777777he7r7e7,777'7c7h7:73t7will7s7lowly eastwards, bringing7 eastwards, bringing more push eastwards, bringing more rain across parts of wales and western england through the .;.-,f day. east anglia and south—east of england might see a few 77 �* spells77 77 �*spells77and we might sunshine and 77sunshine and blustery77 heading 7 heading into 7 showers heading into west scotland and northern ireland. the weather start to the weather will start to turn a bit colder there. through the middle part of the week, a change in weather patterns an area of pressure is an areaothigh pressure across the uk huzlld across the uk and this bring fine, subtle will bring fine. subtteand , l ., m, r " weather to the majority the majoritv the uk. could vast majority of the uk. could be a few passing showers across far 77 far north—west of scotland, the far north—west of scotland, but even you will see of sunshine 7 of sunshine at spellsnaf sunshine at times. coming downjust spellsnaf sunshine at times. coming down just a temperatures coming down just a bit, 7-9 c, temperatures coming down just a bit, 7—9 c, and with little bit, 7—9 c, and with those clear skies in place

overnight are mid overnight are nights from mid week towards the end of the as well we will see week. as well weswi'll—see ~ ~ ~ . frost. so it will be widespread frost. so it will be quite by night and i a 7 7abit 7 7 7 7a bit cool7er 7 7 7a bit cool7er by7 7 7a bit cool7er by 7day as suppose a bit cooler by day as well, but the fine is well, but the fine weather is set to last thursday and into the 7 we . t°777 7 to77 7 quitea 77to7 7777 7qu7ite7a cold 77to7 hind quite a cold 77to7 wind and j7ite a cold 77to7wi7nd and j7ite could easterly wind and that could bring a few showers are bring a few wintry showers are a} :— monday. way through sunday and monday. for now!

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