Trump Says He’ll Meet Xi Twice More This Year

0:00Bloomberg Businessweek Daily is brought to you by HPE, bringing you the self-driving network, a network that's self-optimizing, self-healing, and self-protecting, and only continues to get smarter. Learn more at hpe.com slash networking.

0:14Carol Massar:Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

0:56Carol Massar:This is Robert Smith from Business History. If you're listening to this, there's a good chance you're a small business owner. And like every small business owner, you started with a dream to do what you love and watch it grow. What you probably didn't dream about? Keeping up with cyber threats. That's where MasterCard can help, with access to tools that help identify cyber threats to better protect your business. Building your dream business? Priceless. For cybersecurity in a changing world, there's MasterCard. Learn more at mastercard.com slash small business. Bloomberg Audio Studios. Podcasts.

1:32Radio. News. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus, global business, finance and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenebeck. We're all focused on geopolitics, specifically this first part when it comes to the relationship between the U.S. and China. President Trump said he would meet again with Chinese leader Xi Jinping in November following what he said was a successful summit in Washington.

2:13Watching all of this closely, I don't think she was at the state dinner last night. Maybe she was. Maybe. Jenny Welch, Bloomberg Economics Chief Geoeconomics Analyst. She joins us from our Washington, D.C. Bureau. Jenny, were you there? I didn't see one of the pictures with Jensen or Elon. No, sea bass isn't really my thing. Okay. I hear you. So, okay. That is so interesting. I'm glad you went there. I think like the last thing I read before I went to bed last night was the menu. Yeah, I love this stuff. And a lot of thought goes into this. And they wanted to highlight cuisine from the United States, but give what they said was a...

2:51Nod? Yeah, like a nod to China. with the way that the food was presented. You went, sea bass was the main course. There was a lot of other stuff in this three-course meal. How do we read into that part of the dinner? I won't proclaim to be an expert on the culinary decisions. I do think they had hot scallion oil that they kind of embedded into some of the meals as a way of paying tribute to Chinese cuisine. I did live in the area of China that Xi Jinping is from, and I can tell you that food there is delicious, but it didn't seem to be fully reflected in the menu that they had. It's a level of spice that I'm not sure is comfortable for President Trump.

3:27But all optics around the dinner and the broader summit are rather positive. I think the question is, to bring it back to the culinary theme, is was the beef really there? What was the substance behind the conversations that were happening?

3:41Carol Massar:Substance, right? Like a lot of pomp and circumstance, but was there a lot of substance that came out of this? Or is it, Jenny, just that these two leaders are talking is important? That's certainly, I think, how the White House and in particular President Trump would frame it, right? He sees his role in this relationship as being the stabilizer, as having a good relationship with President Xi despite the rivalry and using that to provide kind of a ballast for the competition. But what I would say as someone who has staffed these kind of summits before is, yes, that's true. And it is difficult to get many deliverables out of a relationship between countries that don't get along in many ways.

4:19But this is a state visit. That's a different caliber of summit. And the last time that President Xi Jinping made a state visit, which was during the Obama administration. So over a decade ago, there were a number of concrete deliverables. Granted, not all of them came to fruition, but state visits are usually used to extract deliverables. And in particular, when the U.S. is hosting deliverables that matter to the U.S. national interest. Like something regarding soybeans. The president said our farm. He says, I think our farmers will be very happy. And the only thing I can think of is the soybean purchases.

4:52Is that going to happen? Possibly soybeans. He could also be referencing that the board of trade that was established previously between the U.S. and China has been discussing bringing down tariffs on a select number of what is considered nonsensitive goods that might include U.S. agricultural products as well as LNG. They, I think, are looking to announce something on that early next week. But yes, you point to a really good question, which is what is the status of Chinese purchase agreements? The fact that we haven't gotten any written affirmation from either side on China falling through, some of which that only the United States has confirmed Beijing has signed up for in May.

5:28We don't even have necessarily confirmation from Beijing that they are planning on doing these additional agricultural purchases that Washington said they would. So there's a lot of ambiguity there. Granted, the U.S. hasn't put out its readout yet. So maybe some of these details are still forthcoming. The Chinese put their eyes out last night. There wasn't a huge amount of detail there and certainly nothing about these purchase agreements.

5:49Carol Massar:Hey, you know, two things that I think about, Jenny, that could kind of bring the U.S. to our knees to some extent. And I think about this in a world where we realized Iran had a great tool with the Strait of Hormuz when it comes to energy, world global energy supplies. But I'm thinking specifically about rare earths, our access to it, and also kind of this AI race where many would argue we need collaboration. It's something these two areas we're going to dig into, both of them, in just a moment over the next half hour or so. What did we get, if anything, on those fronts? So no details yet on what, if anything, was discussed on critical minerals.

6:24But as you mentioned, that's definitely hanging over the summit. In fact, that's probably the reason that the trade truce, that the extension that was announced when Xi Jinping first arrived on Wednesday night, was only extended by two months. It's probably because Washington in particular feels that Beijing isn't living up to its side of it. and critical minerals is the most important thing there. It's really cast a shot over U.S. policy towards China. It's a huge point of leverage. On AI, again, not clear what they discussed. The Chinese readout indicated that they did share some views on AI safety, but we've heard from both leaders a real reluctance to consider slowing down their leading AI companies, given the rivalry and given the potential gains from AI.

7:08Stay with us. More from Bloomberg Businessweek Daily coming up after this.

7:19Carol Massar:We have seen oil dip lower. That as a result of these talks between the U.S. and Iran and hopes to reopen the world's most important energy shipping route were progressing. I mean, And Tim, this is something that's been just driving so much of the trade this week across assets. Yeah, I mean, look at the relationship between yields and oil prices. We highlighted that just yesterday. I want to bring in Mekala Krishnan, partner at the McKinsey Global Institute. Mekala joins us from Boston. The U.S. war with Iran exposed a lot for a lot of people, I think. I mean, there were some folks who were, I never forget this, like the first week.

7:55It was like, wait, this is the worst case scenario that we were supposed to pencil out when we were at job interviews. Like what happens if the Strait of Hormuz closes or traffic is impeded in some way? How are we still such a world that is so dependent on fossil fuels? Thanks, Tim. Great to be here with all of you. I think the important thing to remember about the world and the energy system as it exists today is it's a massive physical entity that has been optimized over centuries to give us the production and consumption of energy that we have. If you think about oil and gas pipelines, for example, they extend the distance from the Earth to the moon and back twice.

8:37We have 1.5 billion vehicles on the road that are primarily internal combustion engine based. We produce 7 billion tons of industrial materials like steel and cement, all with fossil fuels today. So it's important to recognize that transforming this system is hard. It takes time. I think it's also important to recognize that the energy system to this Strait of Hormuz crisis has been much more resilient, at least so far, than had been anticipated at the very beginning. Of course, with real limits, but the system has proven to have better shock absorbers than many had expected.

9:12Carol Massar:So, exactly, right? And I think about how we saw the U.S. was actually in a pretty good position. But I think about how this U.S. war in Iran, Tim talked about us still being very largely dependent on fossil fuels. But we did see U.S. energy independence. When it comes to dependence on fossil fuels, that includes China, who is moving very aggressively when it comes to alternatives. And then I think perhaps most of all, we saw how Iran can bring the world to its knees. So you guys have a report out that's called Aftershocks. And I'm just curious how you think about what is life after we get through this crisis?

9:50Carol Massar:And what does the global energy market look like? Yeah, absolutely. So as I mentioned, in many ways, this shock, we've been more resilient than we anticipated. And that's largely because of buffers that had been put in place on the backs of past crises, shock absorbers we'd previously built. Things like inventories, things like these bypass pipelines that have diverted flows away from this trade. But we've also realized these shock absorbers have very real limits. Inventories, the ones we've drawn down the most, like the U.S. Strategic Petroleum Reserve, all-time lows, many European product inventories at five-year minimums.

10:25We've seen the refining system really affected as well. So we've realized that these shock absorbers are finite and can thin. They've also been very uneven across countries, countries like India, where I'm from, seeing real supply shortages. We've also recognized that it's not just about Hormuz. About 95 % of the world lives in a region that is reliant on imports in some way, Even in the United States, Australia, the world's largest gas exporter, still relies on diesel imports. And so this imperative for energy security extends well beyond Hormuz. Meikala, one thing that we've talked a little bit about is the idea of Iran's power over the strait not being something that is indefinite.

11:08We've already seen a higher reliance in the East-West pipeline, in Saudi Arabia, for example. I'm just curious about like what you view as the timeline that Iran continues to have a grip on this on this waterway. Yeah, it's a very interesting question. We did some number crunching, as you can imagine, on what are all the resiliency measures that countries are starting to put in place in response to this crisis, not in the short term, but out to 2030. And what we find is that if you think about all the announcements that countries around the world have made, for example, for new oil supply, new coal conversion capacity.

11:44So this is converting coal to chemicals instead of using oil as an input, as well as additional bypass pipeline infrastructure that has been announced. All of these together, by our estimate, could by 2030 offset about 70 percent of the flows through the strait. So that's the good news. The challenge, however, is that it's not inevitable that all these announcements will actually translate to implementation. They come with a cost. And what they do for the most part, because most of this 70 percent offset comes from bypass pipeline capacities, they offer a diversion from the straight. They don't offer displacement of Gulf oil because Gulf oil still sits very low on the overall production curve.

12:25Carol Massar:Mikla, we only have about 30, 40 seconds here. What does this mean for alternative energies? Because one of the things former Secretary of State John Kerry said at Bloomberg Green this week pointed to China. And when it comes to alternative energies, they are all in and building and spending aggressively. What do we need to know on that front? And if you wouldn't mind, just quickly. Yeah, alternative energy, definitely an important response. And we've seen many countries do this. What we find, though, is that alternative energy comes with technological limits. By our estimates, it could displace about 30 percent of overall oil consumption, oil and gas consumption from an energy security standpoint.

13:01But in some instances, the technologies are not there and implementing them at scale is going to take time. It's not going to happen overnight.

13:13Stay with us. More from Bloomberg Businessweek Daily coming up after this.

13:23Carol Massar:The 81st U.N. General Assembly underway. High-level meetings have all been held this week. Presided over by U.N. Secretary General Antonio Guterres, whose term ends on December 31st. We've got one of the leading candidates to become the next U.N. Secretary General. She's Carolyn Rodriguez-Burquette. She's Guyana's permanent representative to the United Nations. and she is joining from the UN Rose Garden. Ambassador, thank you so much for joining Tim and myself here on Bloomberg. You and all the candidates know all too well that the eventual choice in terms of who leads the UN next is dependent on whether a candidate can avoid opposition by the US, China, Russia, France, and UK, any of the five veto-wielding permanent members.

14:10Carol Massar:How are you thinking about those five members and what their role is for the UN going forward?

14:21Thank you, Carl. The discussion so far with the five members that you mentioned of the Security Council and indeed the entire membership has been really, really good. I think it's important for us to have a close collaboration, should I be the Secretary General. These are very important countries. Of course, all 193 members of the UN are important, but these are five important countries. And the structure of the Security Council gives them certain privileges. and so it's important for the Secretary General to be able to navigate the sort of chasms when those are there with the P5 members and this is what I intend to do.

15:05As you know, I've served on the Security Council over the last two years and I've worked very closely with the P5 and so in some respects they know me and they know how I operate. I held the position of leading Guyana's delegation, So I held the presidency twice. Of course, my country held the presidency, but I had to navigate some of those, I would say, difficult moments during that time. And they've seen that as well. So I look forward to it should I be appointed. Ambassador Leake Security Council results put you at around second place for the race for secretary general. What are you seeing as the biggest hurdles for actually getting to first place?

15:44And how do you plan to get there in the coming months?

15:51Tim, it's up to the Security Council at the end of the day to recommend to the General Assembly. And I have outlined my vision. And over these last weeks, I've visited several capitals. I've spoken with all of the authorities of the 15 members. I've answered their questions. And so they know what I stand for, what I bring. At the end of the day, I think you need a secretary general that, apart from competence, that would be able to build bridges, that would be able to bring people together, but also that will have the energy and the versatility and the discernment that you need in this chief administrative officer, because that's the description in the charter of the secretary general.

16:37Carol Massar:Ambassador, you know, one of the things we think about here is that many have described the secretary general position as a bit of a thankless job. So I guess the question is, why do you want it?

16:52My life, Carol, has been about serving. And I approach each one of those positions of service that you do not do it for tanks. But if you do get tanks, it's a bonus. But you do it for service. And I believe in the United Nations. I believe that it is a force for good. I believe it has all these challenges, but that we could make it better. And this is my approach to it. So not looking for tanks, not looking to display any ego, but just to make sure that we solve some of the issues that we have working very closely with member states, especially when you think about peace and security and the challenges that we face on that pillar, but also development and human rights.

17:33and this is how I would approach it.

17:35Carol Massar:Well, you know, it's interesting too and I'm listening very, I think both of us are listening very closely to your words. You mentioned service, you mentioned delivering. You have said though, the UN's problem is not a lack of commitments but a failure to deliver. And what is the one thing that the UN does today that you would stop doing as Secretary General?

17:57I have to look at where there are duplications. We have to stop duplications and where there overlaps, we have to streamline that. We have many agencies dealing with development, UNDP, FAO, WFP, well, WFP more on the humanitarian side, but we have several of these agencies dealing with development. And when you talk to the ministers and the leaders on the ground, they want to see more of us, more of the delivery on the ground. And so we have to focus on that to make sure that we have a very good ratio of what we do in New York and what we do on the ground. If we look, for example, at the budget, the regular budget, quite a bit of that go into staffing.

18:41So we have to have a good balance between what goes into staffing, what goes into programming. And so these are some of the things that I would look at in terms of how we deliver on development. But also on peace and security. The Secretary General has certain tools at her disposal, good offices, process, mediation. and I would want to offer those tools to the parties to conflict right now. Tim and Carol, we have the highest number of conflicts since World War II. And so we need to make a dent in ending and preventing conflicts. The world is waiting for some good news on this. And I intend to work very closely with all, including the Security Council, to see how we could move the needle on that.

19:21I'm not oblivious that some are very difficult, but the UN was not made for fair weather and we have to try. Yeah, look, I think it's fair to say, as we say all the time, a very complicated time when it comes to geopolitics, given what happened in Venezuela, what's going on between Israel and the U.S. and Iran and Russia's invasion of Ukraine, among other conflicts around the world. I'm curious, though, about your position coming from one of the UN's smaller member states. Does it give you maybe a fundamentally different view of what the UN does than someone who comes from a major power or a larger UN agency?

20:03The UN has over 100 small states. And one of the characteristics of small states is that we have to think global. We have to think big because our destinies are tied together. and the UN Charter and international law and adherence to that, basically it's our only guarantee for security and protection globally. And so that's an outlook that I bring from a small state. The second point is that small states do not have any big dog in any big fight, so to speak. So we are about bridge building. We are about reaching out. And this has been the story of my life, both as foreign minister, but also my service here during the last six years as permanent representative of the United Nations and on the Security Council.

20:50So perhaps it is a time for someone from a small state. Should I be appointed, I would be the secretary general from the smallest state ever. And I also come from a country that was built on the backs of people who came from different continents, plus our indigenous people. So we always had to work together to get along, to have unity and to have harmony. And I bring that approach to the secretary general's position, should I be appointed.