.oining us now is paul donovan and alex, thank you for joining us. paul, last time, you were coolheaded. is that still the case? need to hit the panic button, but we have moved closer, no question. we don't have $200 billion of goods subject to tax. we have a list which will be subject in the future. this could be the "art of the deal." negotiating, but if it is, it is a messy form of art, more of a scribble. this is causing confusion and risk. but we are not there at the moment. second quarter, global trade was expanding. it was stable. alex, is this the arms of the deal or campaign promises? trump, before he was elected, want to deliver for his base. alex: i think it is a combination of both. it the art of, is the deal, it's not much of a problem. is hee big worry is playing for the cheap seats? izzy making the base happy? the problem is, they don't care. if that is the case, i would have worries. , howine: if they escalate much impact does have on the chinese economy and on the u.s. economy? paul: the impact is larger on the u.s. then china. what y

paul donovan from ubs.ck to the heritage of ubs in asia and the brilliant research you guys did and still do in asia. bring up the chart. this is real gdp in china. paul, i don't buy it for a minute. back in the past, the normal variance of gdp. clearly the financial courses. clearly the rebound. this has gone down to flatness. you have got to be kidding me. do you trust the statistics provided for the smoothness of gdp at the 6.7% range? as anmy guiding principle economist is to trust no statistics at all. with is normally a problem the data, u.s., european, or chinese. that is a dubious statistic. i think it is fair to say that the amplitude of economic cycles has been reduced by the application of technology over the last 15 to 20 years. the inventory cycle since 2008 has become less volatile, and that will reduce economic volatility, but not to that extent. i think what you can say is that when you look at a gdp number in china, the ballpark is probably right. the chinese economy is we 6.75%g between 6.