In short
The episode debates whether UK Labour leader Andy Burnham’s new Israel sanctions signal Britain is no longer seeking US approval, and why Trump hasn’t publicly reacted as expected. Hosts argue Israel is furious: Foreign Minister Gideon Saar closes the British consulate in Jerusalem, announces countermeasures (including ending training for Palestinian Authority forces in Judea/Samaria), and denies entry to 12 UK elected officials (including Jeremy Corbyn and Zahra Sultana).
Key claims
Marco Rubio (US Secretary of State) says the US won’t mind Burnham’s sanctions; Trump’s muted response suggests pre-coordination and a “different but not broken” alliance stance (“differentiating ourselves”). Notable examples include earlier UK-US tensions over Ukraine and Trump’s social-media style. Guest Ben Judah (Chatham House visiting fellow; former special adviser to David Lammy) says Britain is leading coalitions with France/EU and “Kansas” countries, presenting America with fait accompli. Guest Ed Conway (Sky News economics/data editor; author of Trade World/Material World) shifts to trade/supply chains and debt: fish fingers and other goods rely on long, opaque global networks; bond yields drive borrowing costs and UK “headroom” loss.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOAnalyzing Trump's Expected Reaction to UK Sanctions
1:39 to 3:40
Discussion on the anticipated response from Trump and the implications of UK government actions.
“And I think it's fair to say that yesterday, around this time, we were expecting the actions of the UK government to have serious repercussions with Donald Trump.”
Burnham's Differentiation from American Policy
3:40 to 6:00
Exploration of Burnham's new approach to foreign policy and its historical context.
“Yeah, it really is interesting what's happening with British foreign policy that's taking place now.”
Implications of UK Sanctions on Israel
6:00 to 8:30
Delving into the ramifications of the UK's stance on Israel and reactions from various stakeholders.
“delivered by was we have no argument with America.”
The Role of the UK in Global Coalitions
8:30 to 11:50
Analyzing the UK's evolving role in international coalitions and its diplomatic strategies.
“And so, you know, it is not unusual for Trump to use that pre-warning and just get straight on social media and decide, you know, remember, he pre-announced Starmer's resignation, for Christ's sake.”
Ben Judah's Insights on UK Foreign Policy
11:50 to 14:00
Insights from Ben Judah regarding the UK's diplomatic strategies and relations with the US.
“Well one of the things I love about the foreign office is that mastery of language there.”
Coalition Building in Foreign Policy
14:00 to 14:48
Learn how the UK subtly influences US foreign policy through coalition building.
“And we've seen each time the UK assembles a coalition and presents the Americans with a fait accompli.”
UK's Shift in Geopolitical Strategy
14:48 to 17:10
Explore the UK's changing role in global geopolitics and its coalition strategies.
“And you've now seen that steadily, steadily, steadily, but subtly build up on Israel-Palestine.”
American Response to UK Sanctions
17:10 to 18:54
Discover the American perspective on the UK's recent sanctions and its implications.
“Ben, are you surprised at how little reaction there has been from the states over this move about, you know, sanctioning products from the West Bank, as was announced yesterday by Ed Miliband?”
Trump's Leadership Style and Influence
18:54 to 20:44
Analyze how Trump's psychology affects his leadership and international relations.
“What I saw, you know, seeing the operation of the White House close up and being at events like the NATO summit in The Hague, is that Trump likes being king of the West.”
UK's Domestic Policy Context
20:44 to 22:08
Understand the domestic political context influencing the UK's foreign policy decisions.
“You know, the war in the main phase of the war in Gaza was not yet was not yet over.”
Show all 17 chapters
Understanding Global Trade Dynamics
22:56 to 24:51
Dive into how everyday items are shaped by global trade and supply chains.
“who is the Sky News economics and data editor, but also author of this phenomenal narrative history, really, of the goods that have made up the world of trade.”
The Complexity of Supply Chains
24:51 to 28:00
Examine the intricate nature of supply chains and their impact on modern economies.
“That even the drug companies aren't actually making the drugs.”
The Impact of Offshoring on Jobs
28:00 to 30:03
Explore how offshoring has transformed job markets in the West.
“And so you think, well, he's completely naive.”
Understanding National Debt and Borrowing
30:03 to 34:44
Learn about the complexities of government borrowing and its implications.
“I don't know if there is any sounding clever about it.”
UK's Economic Challenges Post Mini-Budget
34:44 to 36:30
Discover how the UK’s borrowing costs have escalated and the resulting issues.
“But it has all contributed to the fact that right now, we are just inherently more in the firing line than other countries.”
Current Economic Landscape and Growth
36:30 to 39:50
Examine the unexpected economic growth amidst global challenges.
“It is a self-imposed thing, but it's like it feeds into your credibility.”
Conclusion and Future Outlook
39:50 to 40:32
Reflections on the financial climate and its potential risks and opportunities.
“And I think contributing to it is the sense of, gosh, the entire global trading system that was for a long time something we could all kind of just assume was always going to be there.”
Transcript
Automatic transcript. May contain errors.0:02This is a global production. Is there something going on now with Burnham's new administration where he just doesn't actually feel the need to ask permission? He said to him, have we broken with America now on foreign policy? And he just, he had a twinkle in his eye when he said this. He said, no, John, we haven't broken with America. We're just differentiating. Does Trump actually feel relieved by the position that the UK and other governments have taken? It was a good political operation. Well, I would say that the president has not commented on this. As I said, neither have I at this point.
0:41We were made aware that they were going to make this decision. We heard their argument as to why. But look, we share the goal of stability. We don't want to see some uptick in violence or an uptick in conflict or tensions in the West Bank at a very tenuous time in the region. There's always tenuous times. But beyond that, I don't think as at this moment, we don't have any further comment on the UK decision that I think was announced just a few hours ago. That was Marco Rubio, US Secretary of State, telling us bluntly that they don't really mind what Andy Burnham has decided to do in his sanctions against Israel.
1:19Presumably, he's speaking for Trump there too. So is the anger being felt about what is happening in the West Bank as keenly felt in America as it is in Europe? And to say it quietly, does Donald Trump approve of what the British have done? Welcome to the News Agents.
1:46It's John. It's Maitlis. And I think it's fair to say that yesterday, around this time, we were expecting the actions of the UK government to have serious repercussions with Donald Trump. We thought there might be a bust up. We thought there might be an incoming row. Wow. And John is checking his Truth Social account on a minutely basis. But so far, there has not been the outrage or the slapdown that we're expecting over those sanctions on Israel. Now, Israel itself is furious. We know that the foreign minister, Gideon Saar, has announced the closure of the British consulate in Jerusalem. He's put countermeasures in response to new sanctions.
2:33he's called it anti-Israel and he's also talking about the termination of British activities trained Palestinian Authority forces in Judea and Samaria and he's denying entry to 12 British elected officials. Jeremy Corbyn, Zahra Sultana, top the list you can probably work out the sort of flavour of the others. I think it was pretty unlikely they were going to be taking their holidays in their let anyway. We don't think they were heading off to Tel Aviv in the near future. The point is that Israel's ire was kind of bedded in, but Trump's ire was expected and hasn't come. So today on the episode, we're asking two questions.
3:16Does Trump actually feel relieved by the position that the UK and other governments have taken? And is there something going on now with Burnham's new administration where he just doesn't actually feel the need to ask permission in the same sense that British governments have done of their American presidents for decades and decades? Yeah, it really is interesting what's happening with British foreign policy that's taking place now. I mean, look, when we recorded yesterday, I think we did anticipate that there was going to be some kind of thermonuclear blast from Donald Trump at Britain for this latest egregious act that the United Kingdom had taken without US authority.
4:01And the reason we thought that was that Donald Trump's ambassador to Israel, Mike Huckabee, you know, former kind of presidential candidate back in the day for the Republican Party, had come out and kind of warned, talked about Jew hate in Britain and the anti-Semitism that was right here. Well, it looks like Mike Huckabee was acting without the authority of Trump and that they were blindsided. I mean, he also threatened, do you remember, you talked about this yesterday. He also threatened that Florida might take unilateral action against the UK, that Florida would stop doing business with the UK because it broke Florida laws to sanction Israel.
4:37Exactly. So, you know, Mike Huckabee went way over the top and and also had gone way off the reservation in making those remarks. But the very muted response you got from Marco Rubio was interesting and telling in itself. This morning, Emily, I bumped into someone on the tube who is a very, very senior former Foreign Office Mandarin. And, you know, we discussed in our kind of chat early morning about what we were going to talk about today. And I said to him, have we broken with America now on foreign policy? And he just he had a twinkle in his eye when he said this. He said, no, John, we haven't broken with America.
5:16We're just differentiating ourselves from America. And I thought that sounded like a perfect yes, minister cameo response. And I think he said it semi ironically. I, you know, I'm hamming up the Mandarin's response. But I think that's how they feel, that they feel that over Greenland, over Ukraine, over all manner of different things you know Britain has been able to say I'm sorry no don't agree with this look and so you know you do have a position now where Britain is not saying oh god we've got to go along with everything you don't want to start a fight with Trump but you do want to say quietly we disagree and we're going to pursue a slightly different policy I mean I think that takes you back to the King's speech back in the spring where the sort of rule that he delivered by was we have no argument with America.
6:06We don't always see eye to eye with Trump. I mean, that has been the sort of the position, hasn't it? America and the UK are staunch allies. We've been through, you know, hell and back together, but we don't necessarily see eye to eye with Trump. And we like somebody who respects the Constitution. We like somebody who respects the rule of law. Two things have occurred to me. You mentioned the Huckabee comments. The White House has slapped him down. And I think that's really important to sort of understand. They have said these are not coordinated with the White House. In other words, he's on his own.
6:41Rubio sounds pretty statesman-like. I mean, I know he is Secretary of State, but he sounded pretty calm in that delivery just now. I'm going to give you one other theory in a moment. Go on. Well, I wonder whether this is also part of the sort of the Rubio positioning himself, not just as Secretary of State but as a sort of a putative president as the person who takes on from Trump and who manages to do things slightly differently because Trump, we know behind the scenes, is angry with Netanyahu. I mean, he has sworn at him, apparently, as reported, in a phone call, told him to, you know, whatever, stop fucking around.
7:21And so I don't think Trump or Rubio likes the scenes that are coming out of the West Bank settlers. I mean, what Ed Miliband yesterday called settler terrorism, settler terrorists. I don't think the White House finds them particularly useful either, but it's much easier to get the Europeans to fight that battle. I mean, let me just give you the one other theory, which is that Marco Rubio made those comments very neutrally because Donald Trump hasn't opined. And he doesn't know what Donald Trump thinks. And he's waiting for to see, like us, what Donald Trump posts on Truth Social to find out whether Donald Trump does have a settled view.
8:00Because you never know. Donald Trump might get a phone call now from some, you know, very wealthy pro-Israel donor who says it's disgraceful what Britain have done. You've got to do something about this. And bang, there'll be a post on Truth Social. Except that Burnham talked to Trump ahead of this. I mean, that was what Rubio made clear. We think the phone call between Trump and Burnham happened sort of a week earlier. I don't think Burnham would have gone out there or let his Foreign Secretary Ed Miliband go out there and make that statement to the Commons if he hadn't pre-warned America. And so, you know, it is not unusual for Trump to use that pre-warning and just get straight on social media and decide, you know, remember, he pre-announced Starmer's resignation, for Christ's sake.
8:41So he's not a man who sort of stands by protocol and waits for the Commons to sit or to stand. You know, he would go out there if he didn't like something and do it or say it. And he hasn't. So I do think something is going on here. And I think that there may be more of a coordinated response. I mean, something we've definitely learned is that Burnham had the support of a hell of a lot of other countries before he let Ed Miliband stand up in the Commons. and in a sense this is part of I think British leadership in a way that we haven't always felt. You know we haven't always felt that we've sort of led the way.
9:21We have on Ukraine. Maybe we have in parts of NATO discussions but I think this is something where we can be quite proud that we're getting out there and we're going first. Look and maybe it's that Andy Burnham is a more sophisticated and adroit political operator and has you know it was a good political operation now look there are people who disagree profoundly with what Ed Miliband has announced and you know the chief rabbi has made clear that he thoroughly disagrees with the policy but if you look at the operation that Andy Burnham had pre-warned Trump had kind of you know made sure that that had been neutralized had presumably got all knew that all these other nations were about to follow suit so it was a it was a you know a good political operation.
10:08The one, you know, Starmer kind of obviously at the start of the Iran war where Britain had no pre-warning that America was about to start bombing with Israel and said you can't use our air bases and then sort of changed it. Well, you can use our air bases if it's for defensive purposes. Yeah. Yeah, that was, that looked clunky. It was terrible. It would look clunky. Just say your line and walk away. I mean, the thing, you know, going back to the Israeli Foreign Minister Gideon Saar, He's called the Labour government guilty of blatant interference in the affairs of a sovereign state. Now, that is categorically not untrue, right?
10:45Because the interference has only been in whether we want to trade with the people that are committee atrocities in the West Bank. And Burnham's government has decided no. So I don't see how you can for a moment call it interference in the state, in a sovereign state. And actually, if that is sending out a message that they are taking as interference into a sovereign state, then, you know, you just think they are. What else are they going to push back on? Right. If the tiniest bit, because because really what he's done, you know, sanction on goods, which amounts to what we said yesterday about two million pounds is nothing.
11:23Right. So if you can't even take that without seeing it as interference in the state, then where do you start? you know having those proper grown-up conversations with Netanyahu. Well let's speak now to Ben Judah because he was special advisor to David Lammy when he was foreign secretary. He's now a visiting fellow at Chatham House and Ben thanks for being with us. The Mandarin who said to me we haven't broken with America we're just differentiating ourselves. Is that about right? Well one of the things I love about the foreign office is that mastery of language there. What's happening in British foreign policy is there used to be an old joke from Dean Aitchison, an American Secretary of State, that said that the UK had lost an empire and not found a role.
12:11And what's happened since Trump has returned to power is that as America has abandoned a lot of its old role, leading the West and confederating the West around its foreign policy, the UK has found a role leading these coalitions on issues like Ukraine or now on Israel, Palestine, to present America either with a fait accompli or to move America. On Ukraine, we saw Britain with France assemble the coalition of the willing. And what that did was pull the Americans away from really the position that they that Trump came back to power with, which was wanting to do a quick and dirty deal with Putin in 24 hours over the head of Zelensky into a common position that's better for UK interests and for European security.
13:03And now we see on Israel-Palestine that beginning when David Lammy was Foreign Secretary and Kirsten was Prime Minister, a series of coalitions have been built up with France, first to put sanctions on extremists, Israeli ministers, then to recognise Palestine, and now to put this wider sanctions regime on illegal settlements. So it sounds from what we're beginning to hear, Ben, as if Andy Burnham had a phone call with Trump. We were kind of expecting it to be fireworks, explosions, and Trump wasn't actually that unhappy with the position that Burnham said he was going to take. Is that right? Well, one of the things that we've seen consistently since Labour came back to power is a wild overestimation in the press of potential American reaction to the UK taking a different point of view or a different course of action than the United States.
14:04And we've seen each time the UK assembles a coalition and presents the Americans with a fait accompli. The Americans see which way the wider Western community is going and don't want to be seen to trash that or to clash with that. We've seen that in a few instances. We've seen that with the coalition of the willing. At moments when Trump wanted to meet Putin and was planning to meet Putin in Alaska, You see Macron and Keir Starmer assembling a squad of Western leaders with Zelensky to go to Washington and say, no, this is our position. You saw that over Greenland, where Macron and Starmer got a team together to tell Trump, no, Greenland is a red line for us.
14:48And you've now seen that steadily, steadily, steadily, but subtly build up on Israel-Palestine. Now, what's going on here, and to come back to that sort of wonderful comment from the old Mandarin that you began with, is you've got to be subtle with the Americans. You don't want to be locking horns with them and clashing with them the way Spanish foreign policy led by a more sort of leftist government has been. You've got to make it look as if they're backing the proposal or they wanted it all along, and then you can swing them behind you. And that's where the kind of the art of British foreign policy has been played rather well here.
15:28And I think you've seen three successive foreign secretaries do that now. Just explain then, Ben, when we went on air yesterday and we were talking about the sanctions against Israel, we didn't then know just how wide that coalition of countries would be. Was the UK the pace setter for that? I mean, were we absolutely the first out of the traps? was Carney always going to come on board I mean what how did that sort of come together do you know well what we've seen consistently as Britain has taken a post-American turn in its foreign policy is the UK is not sitting around waiting like it used to to know which direction Washington is going and it has found that the old what used to call the hub and spokes alliance systems around America are dissolving, is that other countries that previously felt, well, I'm just going to do my geopolitics with Washington, and it's nice to see the Brits sometimes, are actually coming to us to try and build coalitions of the non-American West.
16:34And the role the UK has played is bringing together two sets of countries. It's not a generic list of middle powers. What you're really seeing is the UK bringing together with France European Union countries and their associates, not all of them, only some of them, and then a group of countries that the right in this country like to call the Kansas countries, Canada, Australia, New Zealand and the UK. So we've been a linchpin in making these slightly bigger than a European coalition and a sort of more global coalition. But it's quite different from saying this is a, you know, generic list of global middle powers like Brazil or Thailand or Vietnam or, you know, Japan.
17:19It's still a Western grouping. Ben, are you surprised at how little reaction there has been from the states over this move about, you know, sanctioning products from the West Bank, as was announced yesterday by Ed Miliband? Because, I mean, is it that the Americans actually might be quietly supporting us as the outriders on this policy? You know, we can't be leading the charge here, but it's quite helpful for us that you're doing this, because that means that we can apply some behind the scenes pressure on Netanyahu to deal with what's happening with the secular violence. So I don't think they view the UK as an outrider speaking for them.
18:04But I do think that part of their system is quite happy this is happening because they're so fed up with Netanyahu's outrageous behavior, not just towards the Palestinians, but towards the United States. And you have people like J.D. Vance that I saw a lot in government with David Lammy, who are really frustrated and on the record of being deeply frustrated at how Netanyahu has treated the United States in that alliance. And we'll view this action as helping the United States, just as you said, put a bit of pressure on the Israelis to follow U.S. interests. just one other question do you overstate our influence i i kind of struck by you know reading about what's happening domestically in america where no one stands up to donald trump no one acts as a break no one tells him he can't do this no one says this is dangerous or unconstitutional and here you are saying oh no we've got you know when macron and starmer or macron burnham clubbed together, they can alter the president's direction.
19:12What I saw, you know, seeing the operation of the White House close up and being at events like the NATO summit in The Hague, is that Trump likes being king of the West. He likes being the Western emperor and having all the Western leaders around him and seeing them genuflect to him. And he knows that if he really clashes with them over an issue like Greenland, they'll stop doing that. And I think that we benefit in this situation from his psychology of wanting to be seen as the centre. He's not anti-European in the sense that he wants to push us all away. He wants to feel that he is the ruler of the West.
19:59And what the UK has worked out how to do is to, within the context of him still feeling like that and him still being able to get that photo, assemble these coalitions that go, we love you and we love America, but actually we'd like to do it this way. What do you think? We think this is actually your idea, by the way. Ben, you were at David Lammy's side for a long time. I know there was a little bit of discomfort amongst those around Starmer, who didn't really like the way Burnham was getting the credit, they thought, for something that they actually put in motion months earlier. I mean, is that the sense that you were getting?
20:37Was this ever part of David Lammy's plan? Well, you've got to remember that when Keir Starmer's government came in, it was a very different moment. You know, the war in the main phase of the war in Gaza was not yet was not yet over. The priority was getting the Americans to a ceasefire, was making sure the Americans didn't do what could only be described as a new Munich with the with Putin over the head of Zelensky in Ukraine. and then getting to a position where we'd broken the seal on putting sanctions on extremist Israeli ministers and, of course, recognising Palestine, which is an important first step to get us to where we were.
21:18You know, in that year we were in the Foreign Office, I remember David Lammy very clearly telling a group of assembled officials that we were at 3 out of 10 on settlements and he wanted to get to 8 out of 10 within the year. we were focused on recognising Palestine. That was the context then. That was the international coalition. So bluntly, I mean, you must be thinking this is a government now that's sort of, that's just moving a bit faster. That's kind of, to be fair, getting its shit together a bit more quickly. Well, if David was still Foreign Secretary and I was still in the Foreign Office, we would have taken measures like this.
21:58I can't say they would have been exactly the same in all the details, was the details, but more or less we would have done we would have done the same thing. Ben Judah, thanks so much. Thanks for joining us. Thank you. You're welcome.
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22:54Well, joining us now is Ed Conway, who is the Sky News economics and data editor, but also author of this phenomenal narrative history, really, of the goods that have made up the world of trade. And what you do in this, in Trade World, Ed, is take us through, for example, bread, wool, cotton, these sort of individual materials. If people have read Material World, they'll know your style. But essentially, you take us into the world of trade through these sort of really benign everyday articles like the wall trade, right? And the idea is to say that trade, the way it's depicted so much, and we're going through these trade wars and everything that we're living through right now, it's often quite abstract, or sometimes it's about the geopolitics, but you kind of forget about the extent to which literally everything you pick up on a daily basis.
23:48And something as simple as a kind of sliced white bread is a function of trade and is a function of all these relationships that goes around the world. And often the degree to which we are in this amazing, but also quite scarily interconnected world, that's kind of invisible from us. And it's kept from us. And the example I sometimes give, which is kind of a useful way of anchoring it, is if you think about buying a pack of fish fingers in the supermarket, often the fish finger packaging may say that the fish was caught in the North Sea and that it was maybe breaded or packaged in the UK. Often, in between those two things, It was caught in the North Sea.
24:26It was put into a shipping container. It was frozen. And then it was sent all the way to China to be processed, to be kind of, you know, filleted, to be put into a kind of block of frozen fish before being sent all the way back to the UK to be breaded and then put into a supermarket. And if you look at the label on the packet of fish fingers, invariably, it doesn't tell you about any of that stuff. And it's the same thing for bread. It's the same thing for clothes. It's the same thing for cars. I do that with pharmaceuticals, right? That even the drug companies aren't actually making the drugs.
24:56The drug company doesn't make the drugs. The car company doesn't make the car. The clothing company does not make the clothing. And part of the point of this book is to say, that's a very different way of thinking about the modern world, isn't it? To the version that is the conventional wisdom and the version that most politicians are thinking about. And therefore, if you're thinking about going in there and trying to mess with it, trying to impose tariffs, trying to do whatever, trying to re-industrialise, as Andy Burnham is, then oughtn't we to start by thinking about what is the world that we inhabit?
25:26So let me do this as a quick fire. Globalisation, yes or no? I mean, that's sort of where you end up, right? Is it a good thing that we are all so interwoven and interconnected? Or is it a sense that we've actually lost control of everything that we try and do and everything that we make? Well, it's both. It's the world. That's the thing. It's not an abstract topic. It is the way we've arranged the world. And the way we've arranged the world is, you know, basically we like cheap things. And in order to make your fish fingers cheaper or indeed your kind of, you know, bread or whatever it might be, the efficient way of doing that right now, because it is so cheap to get room on the shipping container and send it across the world.
26:06I mean, it's got a little bit more expensive recently, but it's nonetheless, it's a tiny, tiny, tiny fraction of the eventual cost, which, by the way, is a total shift from the world, you know, two centuries ago. It used to be so expensive to ship anything from the other side of the world that it was only luxuries. Now, it's so cheap to do it that it makes economic sense to not employ people in Grimsby to do that and to get them to do it in China instead because they're just much cheaper. And we like cheap things. And, you know, we like cheap things. Companies like to reduce costs. And the net result of that is this world in all its magnificence, but also all its complexity and all its compromises, because the people doing the gutting of the fish over in Shandong, a lot of them, you know, the labour standards, that's questionable.
26:49You know, a lot of these people come from Xinjiang province. Some of them are Uyghurs. So the fish finger might have actually been partially made in Xinjiang. It's labour might have come from there. So the people might have come from there. But the key point here is no one is entirely sure. and even the people, you know, people working within the, you know, it's not all about fish, but like working within that supply chain or working within the clothing supply chain or working within the car supply chain, often the people working in those worlds, they're not entirely sure where things began. And that's kind of amazing, isn't it?
27:19It's quite vertiginous. Well, that's how the financial crash happened, of course, because nobody actually, there was that whole metaphor about how the sausage meat, right? It just sort of went out into the world and we couldn't work out where all the credit default swaps came from or went to. It was kind of lost in the ether, right? It's exactly the same for trade, except that it is far bigger. It is far bigger. I mean, obviously, on this podcast, we talk an awful lot about Donald Trump and we don't talk a lot about supply chains. And I kind of read the book and I was thinking, yeah, Donald Trump is right.
Read the full transcript
27:52No, Donald Trump is completely wrong. Because on one level, when Donald Trump says, right, we've got to re-industrialise America And you made the point, you know, people want to go to Walmart and pick up five pairs of trousers for their kids for school for$50 made wherever they are in the world, rather than one pair of trousers that cost$50 that are made in America. And so you think, well, he's completely naive. There's never going to be a reindustrialisation of America. Those steel factories will remain shuttered. Those textile firms, those textile plants that were once in Georgia have gone forever.
28:24But on the other hand, he is right to be concerned about the fact that these supply chains are just ludicrously long. And we saw the limitations of that when there was the war for PPE during Covid. Yeah. And think back, I mean, take back control. You know, what does that remind us of? But what was that speaking to, to some extent? And what is Donald Trump speaking to, to some extent? It's the sense for people that what was once a tractable world around them, that they used to make steel here and they made it into products. And those products, you know, enhanced people's lives. And you felt like you were part of it.
29:04And lasted a lifetime. My parents emigrated from Canada to the UK with their fridges, stoves, dishwashers. And they had them for like, they brought them over on the boat and they lasted 25 years. Yeah. And that world has gone. And the world of making clothing in these countries, for the most part, has gone. And that process, you know, offshoring, outsourcing, whatever you want to call it, I would say like that is one of the most consequential things that's happened in our countries, particularly in the West in the last kind of 20, 30, well, kind of 50 years, because the jobs that were, like you say, the jobs in Georgia have now gone to China.
29:43and yet our understanding of kind of how that happened like i say it is to some extent what lay behind trump and what lies behind brexit and what lies behind the rise of anti-establishment politics our understanding of how that happened is really primitive and so the point of this book is to go back and say how did that happen who were the first pioneers inverted commas of that moment and you know that there's that history but then there's also the present day issue which is you you can't put that back in the box very easily and if you are going to put it back in the box and try and get more manufacturing in America or Europe like Nike tried to do it um Adidas tried to do it they tried to bring back manufacturing to to Mexico as North America Mexico into into Europe the trainers were way too expensive and also people have forgotten how to make trainers so the Chinese and the Vietnamese are better at making the trainers now than we were Ed I want to turn a corner and um do everyone listening a favor who keeps hearing about the state of debt national debt, international debt, guilt yields and wants to sound clever about it and can't quite work out what on earth is going on.
30:51I don't know if there is any sounding clever about it. Well I feel like one of those people who I just, I lose my footing a bit where people start talking about bonds and yields and why debt has grown so much and why we are so nervous about it apart from the cost obviously. I mean it's I think that's I think that's a reasonable place to be to be honest with you because of all the stories I cover and I spend a lot of time covering kind of economic stories this this is really it is actually complex it's actually complex and even people who supposedly understand the bomb market are still trying to get their head around the explanation for this but I mean my best shot at it you know and people will have their own views is that a whole load of preconceptions about the way the world works and the things we thought we could rely on are kind of breaking down a bit at the moment so you know the conventional example is you've got governments that are borrowing enormous amounts and no one's quite sure at what point you can you can kind of uh keep on borrowing you've got central banks who are they borrowing from just be really obvious well they're borrowing you know every day there are millions of people out there pension funds hedge funds investors making decisions about where to allot their money and they decide you know okay some of it's going to go into equities so shares some of it's going to go into bonds and i kind of prefer putting my money into this country to that country right now because i'm a bit worried about what their government's going to do or what the central bank is going to do because you know might they you know i don't know if they trust that they're going to keep control of inflation so all of those kind of allocations are happening at the same time and the net result of all of them and and on top of this by the way is things like ai so right now you have this enormous flood of money going into building data centers which all else equal should push up interest rates because it's kind of you know that's more money trying to trying to chase for investment so all of this stuff is happening at once at the same time as you're having kind of global conflict and for me you know the thing that kind of ties it back to the thing i'm obsessed with at the moment is all those preconceptions that you can order something off from the other side of the world be it fish fingers or whatever else you can order it from the other side of the world and it will turn up that's being challenged now isn't it because of what's happening in the straits of hummers all of that stuff is kind of going on top of each other and it is helping contribute to higher interest rates everywhere because it is to some extent a sign of concern, to some extent a sign of, well, okay, there's a lot of crazy things going on right now and AI and all the rest of it.
33:09And everyone gets caught up in it because if you're thinking of the most important numbers in the world, the yield on, you know, people usually talk about the US treasuries, but it's the same thing. The yield on government bonds is one of the most important numbers in the world, abstract as it seems, because this is the foundation for so much of the rest of the financial system. And so if that number's going up, then it kind of means the interest rates that central banks start to go up as well, the borrowing costs that we all face start to go up, and then that impacts us. And it impacts Andy Burnham, impacts John Healy, because frankly, that wipes out loads of the seeming room that they had against their fiscal rules.
33:47So it all sounds abstract, but if you think about it as being the cost of having to do anything across the global economy, which is what this is, then that cost has just gone up and no one's you know no one is sure when it's going to come down and the uk so final thing the uk is kind of we are kind of the ugly duckling for some reasons that are fair and some reasons that are not which is that was my going to be my question to you which is that look you've explained globally the fact that you know people are chasing money and pension funds are kind of wanting to balance their portfolio between equities and gilts or whatever it happens to be in bonds why is it more expensive for britain to borrow than say any other european country well because i mean so again it is it's it's it's a headache and it's complicated because what you're talking about is a single number that is manifesting so many different rationales you know partly it's like down to what the bank of england is doing versus what the european central bank is doing but i think you know the fundamental moment when everything changed and we we went from being kind of in the middle of the pack with everyone else in terms of those those borrowing rates to being at the higher end that was the mini budget and so there was this moment where a lot of investors around the world you mean the Liz Trust mini budget which wasn't all you know down to her there was also other stuff going on the Bank of England was starting to do quantitative tightening so basically kind of trying to reverse a lot of the crisis era stuff it wasn't just her but a lot of stuff was happening at the same time and she did something kind of dramatic and then the yields in the uk went up like crazy and we all know what happened next you know there are lots of parts of the financial system that basically malfunctioned and someone who works in the guilt market told me you know you don't you you don't normally see things breaking down like that but in the uk it was one of the only times in recent history where you saw what happens when you go off the edge and that stays in the institutional memory of of of investors for a long time so we're not trusted so so you lose that yeah that little kind of invisible element of trust but on top of that i would say then you know star the starmer government comes in seemingly they have this big majority it looks like they have a mandate for reform and they're unable to impose any of the kind of structural reform so dealing with welfare dealing with the kind of the the country's kind of finances they don't they're not able to push through the stuff they say they want to and actually you then saw the the yields going up even higher for the UK.
36:10So it's not just a Liz Trust thing. It's not just a Starmer thing. But it has all contributed to the fact that right now, we are just inherently more in the firing line than other countries. And then that feeds into our higher debt levels. And it takes a lot, a lot of work to regain that the trust which has been lost, basically. How conscious do you think? I mean, you speak to people at the Treasury, you speak to people in government you know how conscious are they the present administration the new administration of what to do about this and do you think they've settled on any answers because you know they're being pulled in a lot of different directions they're super conscious they're super conscious you know john healy got in there wanted you know we know we all know what he wanted to do at defense he wanted to spend more money to try and get up to three percent of gdp by defense spending he got in there and has almost instantly completely changed his tune and why is that it's because he gets in in the same way that you know that people were saying well why wasn't quasi told not to do some of this stuff when he became chancellor to quasi quasi um john healy's got in there and the treasury advisors are saying this looks warring and we need to do something about it and if you don't do anything right now then the amount of headroom is such an irritating term because it's become this terminology your safety cushion exactly yes your safety cushion against breaking your fiscal rules.
37:33It is a self-imposed thing, but it's like it feeds into your credibility. And they will be saying right now, that's basically gone. And it was quite a lot. It was like 24 billion pounds. That's basically gone. Part of it's down to growth, but mostly it's down to bond yields being higher. It's not your fault, but this is the lot that you've been dealt with. And as a result, this budget will probably have to be about raising taxes. And the question to, you know, interesting question is, how much of those taxes can you raise through things like bank taxes, which I think bank taxes will come into it.
38:01But I don't think you can fully fill the hole with that. And I find it like it's a bit depressing, isn't it? Because how many budgets have we been talking about headroom and difficult decisions? But also, why would he then? I mean, presumably he's put the same red lines around himself as Reeves put around herself, as Starmer put around the government. I mean, he's not going to raise income tax because he can't. And you think he probably should do, right? I think like if you were going to raise a tax, then almost every economist out there would say, Like that is the simplest way to raise quite a bit of money and do it actually in quite a fair way because it's across.
38:36It hits everyone. But it seems to be politically impossible. Same thing with, you know, we've talked about the triple lock, the triple lock, social care. So many of the deep seated issues in the UK, they never went away. And now is the now is the moment where we find out whether Andy Burnham actually wants to confront it or not, or whether he can confront it in the realms of, you know, given the constraints he set himself. stuff um but i would say okay look some some good news to kind of follow that with it is that the economy is actually think about what we've been going through in the last kind of year or so think about we've had a cataclysmic event in the strait of hummus you've had um two of the biggest oil and gas terminals in the world basically going down for a period in anyone looking at this and the suez canal might not be kind of operational for many shipping uh panama canal might be down everyone's seeing gas prices going up you would have thought given all of that and diesel prices you would have thought all of that would have precipitated a recession or at least a dip in growth the economy's been growing this year at least faster than people expected and in the u.s it's going gangbusters partly because of ai so it's not it's not as bleak a story as it sometimes is depicted um it's just that there's there's scary stuff out there and you put it all together and i think that's to some extent what the bond markets are telling us and then on top of that And I think contributing to it is the sense of, gosh, the entire global trading system that was for a long time something we could all kind of just assume was always going to be there.
40:05Freedom of navigation, freedom of shipping, like literally one of the biggest shipping groups in the world that doesn't speak. They don't go out in public. For the first time in 60 years since their creation came out yesterday and said, we are very, very worried about freedom of navigation, about the ability of ships to get around the world. like I say if that stuff goes wrong then the financial crisis looks like a walk in the park Ed Conway great to have you with us well done on the book it's brilliant thank you thank you thanks Ed
40:48president trump said he's gonna hit the trail for republicans hard down the stretch are you hoping that he gets out there i think it'd be great yeah i don't i mean that'd be He's spectacular. I invite him to California, wherever he wants to show up. I think it would be fantastic. It is amazing how everybody's turning their back on him, members of the Republican Party, and how all these off-the-record comments and quotes, they want nothing to do with him. But he lives in that fishbowl. He lives in the bubble of Sean Hannity and a few folks that just tell him how great he is. And he needs to get out.
41:21That is a big, warm welcome to Donald Trump from the outgoing California governor, Gavin Newsom. He's essentially inviting Trump to his own party. Trump has created a midterm convention. He's calling it, what are we calling it? The Trump-a-Lumper, basically. It's the Trump party. And the only problem with this Trump party that he's hosting in Dallas is that none of his own supporters want to come or want him to be there. Yeah, they're actually putting out calls on local radio saying, you know, if you want to come to... Free tickets. Free tickets, free tickets. It's not exactly the sellout that Donald Trump hoped it would be.
41:59And we'll be talking all about it on the News Agents USA. But from us for now, we'll see you tomorrow. Bye bye. Bye for now. Who says Halloween only lasts one day? With Wayfair, one night of Halloween becomes a whole season at home. From larger than life yard decor and moody lighting to festive accents for every room in the house. Wayfair has what you need to make Halloween feel like magic all in one place. Because the best Halloween memories aren't made in just one night. They're made all season long. Shop Halloween decor now at Wayfair.com. That's W-A-Y-F-A-I-R dot com. Wayfair, every style, every home.
42:36This has been a global production. Queen Carvania stood haloed by the morning sun. An army hung on her every word. My champions, I have sold my chariot on Carvana. It was a lovely SUV, an inexplicably queenly offer. They're even coming to the castle to collect it. Tonight, we feast. An offer you can feast on. Sell your car today on Carvana. Pick up these mail. Bye.
From the publisher
It’s easy to paint Britain as a post-industrial nation in decline, plagued by crime and high taxes. Indeed, many do. But there’s a new power to Britain’s role on the world stage as America abandons its former allies. Whether it’s Ukraine, security, or now sanctions against West Bank settlers, Britain is in the ascendance - and not overly concerned about moving in a different direction to the US.
Have we decided that Trump is no longer important to our big decisions? Are we living in a post-American world? We speak to former foreign office SpAd Ben Judah who's arguing exactly that.
Later, what Ed Conway can’t explain about world trade, the global debt market and the UK economy isn’t worth knowing. He’s with the News Agents to talk about Trade World and where the next economic crash will come from.
The News Agents is a Global production.
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