 So next, let's get ahead a little bit of the news and think what could be a next step. So I'm very happy to be joined on the panel by Professor Jiro Temura from Keio University. He's a specialist on negotiation, trade law, and Tim Stratford, partner at Comington and Burlington here in China, and a former assistant of the US Trade Representative Office. So I would like to start with a little bit of the concepts around this. We're talking about beyond tariffs. So we already have tariffs. How could it go further? How could it escalate? So when we use that word escalate in negotiations, Jiro, what does that mean? And what happens in this kind of context when you escalate? Let me talk about the Japanese experience what we are having with President Trump's trade negotiation. One key word is he uses the word free, fair, and reciprocal. Free and fair, as you know, is a very common word already used. And the world has a pretty much good understanding of what it should mean. But reciprocal is a word already used in trade terms in the World Trade Organization. Reciprocal means it should have this same opportunity. In Japan's market, President Trump thinks it is very close. So he wants Japan to buy products. But this is giving the chance the opportunity the same and not expecting for results. But of course, President Trump wants the results there. So there, he's like raising tariffs. And in the negotiation logic, which is another expertise that I have, he would raise tariffs as if he would do a during-the-face type of tactic. It's a very simple negotiation tactic where you kind of bring a factor or a card in front of you and say, OK, you have to negotiate from there. So Japan is really having a hard time there. But since we have this free, fair, and reciprocal notion there, I think Japan should really focus on that kind of negotiation. And now China is facing a similar problem of that. And trade, as you know, once you have higher tariffs, then if you get into this kind of race of raising tariffs and on, you will come to a point where the other side has to either give up or make concessions. And it would never be good for the actual trade. There would be never not a good development from there. So I think what we should do is to make sure that we should not just fall into a negotiation tactics used by President Trump and get into a real focus on how trade should be, and it should be a multilateral and free and fair trade. Thanks, Joe. Tim, how do things look from China? Well, I think in China, the first challenge has been to figure out what does the US really want. And it's taken a while, I think, for the administration to communicate that in a way that the Chinese side has understood, because there have been different voices coming from the US government. But I think now, particularly because of the recent visit of vice ministers to the United States, China has a clear idea that the real issues are not the bilateral trade deficit, but the real issues are some systemic differences between the US economic system and the Chinese system. And the US view is that China has embarked on a path where they have state-led economic development in many key sectors of the economy and that this is against the fundamental underlying assumptions of the WTO and that, therefore, this is causing harm. The analogy I use is football. And one team shows up on one side of the field. They're the World Cup champions. And on the other side of the field, you have the Super Bowl champions. And they're both there to play football, but they have very different ideas. And each team plays a very good game, but the rules that they play are designed to showcase different skill sets. The World Cup football team is very agile. They move very quickly. They adjust rapidly. The American football team is more deliberate. Every play is planned. Every player on the team has a coordinated role. They have protective gear. And basically, the US and Chinese economies are sort of like these two teams playing on the same field. So the question is, how do you deal with that? And the US side, by putting down tariffs, is trying to pressure the Chinese government to change to play more our style of football. And by the way, in my analogy, I think the Chinese economy is more like American style football, right? But the US government wants China to move more in a market-oriented development model. And the Chinese government believes that what they're doing now is in their own best interests. And in fact, they're concerned that perhaps the US motivation is wanting to keep China down and wanting to suppress their growth, wanting to contain China. And so as China is responding to these tariffs, they don't want to make the changes the US is asking for and they're suspicious of US motivations. So you actually have a very big gap between the US side and the Chinese side. I expect, therefore, that we're going to have a deadlock for quite some time. Because the issues are very complicated. And neither side wants to change its point of view. And the fallback position for some in the United States is that if the Chinese economic system is putting harm on the US economy and on US companies, the next best thing to agree to solve the problem is to have a gradual decoupling. And all you have to do is threaten tariffs and threaten investment restrictions. And already companies have to factor this into their planning. There was a survey done by Amcham China and by Amcham Shanghai last week. The results were issued on Thursday. And it showed that more than, well, a very large percentage of the companies are looking at resourcing supplies, looking at investment decisions, and so on. So already this is taking place. So for the Chinese government, it's going to take you a while to figure out what is the proper response. You're not going to want to make major changes to your economic system if you have no other choice. So it's going to take a while to assess is the US really going to impose all these tariffs? And if so, how big of a hit are we really going to take? And will the US side back away because of domestic pressures? And until some time has passed, they're not going to be able to make that judgment. And so we're going to have to be in a deadlock for a period of time. Thank you. Just one quick note to what Tim said. Japan went through the same experience about 30 years ago on the structural impediments initiative, which I think Tim was involved on. This actually meant that the US system and the Japanese system is different. And one key word to that was the competition. Do you have the competition law that really works and actually make the firms compete free and fairly inside the country? That is like the football rule that you have mentioned. And Japan has made that effort to change. And that is something I think is a very important point that you have to also send a message to China because China is more bound for trade-oriented probably structure, where maybe subsidies might be still be there with the national institutions having a strong effect. And that will lead to trade imbalances. So I think there should be an understanding of, I would say, the word that Sir Leon Britton has said about 30 years ago about trade and competition. Trade and competition, both rules should converge to a certain level so that there would be a better understanding of what competition rules should be in a capitalist world. Thank you, George. I'd like to go out to some questions in a couple of minutes. But first, I just want to orientate the discussion a little bit towards the future. And get some comments from, start with Jiro. Where do you think this can go next? Deadlock is the word Tim used for a period. But then if the teams can't play by the same rules, or if they decide to go home, then how could this bleed over into other areas of the economy for these countries involved, but also for the rest of us? Well, this is a very tough question. It's up to what President Trump is thinking. President Trump, as you know, is a businessman who did very well in his business strategy, business type of negotiation, which is, again, like using the door in the face or anchoring highball. All these type of negotiation tactics he's using in politics. I don't think ever in history the United States President has ever done this. But usually these tactics will work because the other side will give in in the end. And so you're just actually doing a race. And usually he knows that his President Trump probably knows that time is short. It can't be a long run thing. So at a certain level, he's going to really try to figure out how to get out of this by having their staffs negotiate with the Chinese experts to come with some kind of understanding. And that's the way I see it. I don't think he is going to just keep on going until the other side, I mean, the both sides would kind of come into a big disagreement and get into a real serious situation. Well, if you have the view that the Chinese economic system is causing harm on the US economic system, which I think some important leaders in the US government have, then you're not going to be in a hurry to increase the engagement if it's going to be on the old terms. And therefore, you're going to think that the deadlock is a better long-term approach than going back to the status quo before. But you're not going to want the retaliation to keep going indefinitely because complete decoupling between the two economies is definitely not an optimum result for either one. So what you're going to want to do is cause the economies to restructure the way they do business with each other. But you're going to hope that you don't escalate it to the point that things really get out of hand and that you really are in all-out economic warfare with another. So President Trump has said he's imposing this next $200 billion. He's also said that if China retaliates, he'll impose another $267,000,000 tariffs on $267 billion goods on top of that. We hope that we don't get that far. And my expectation is that we'll arrive at a kind of a stasis and we'll be in that for a period of time where both sides will be able to think deeply about what is the best path forward. And then they'll gradually be able to approach each other with a different mindset than we have today. Do you see it going outside of the tariffs area? Well, it already has. In the survey that I've mentioned, over half of the American companies doing business in China that respond to the survey say that they're already experiencing some sort of pressure, maybe increased inspections, maybe goods are slower going through customs, maybe investment decisions or approvals by the Chinese government are being withheld. And this is a very complicated situation because on the one hand, the Chinese government would like to convey the message that we need to treat China properly or they can respond and it won't be good for us. On the other hand, they don't want to scare away the American companies doing business in China. So trying to find that right line has been very tricky. And I think what we're seeing is assurances and also retaliation happening at the same time. Jerry, could you just briefly say from a negotiations point of view, what happens when negotiation kind of goes from one issue to bundle or package up with other issues? Well, it really depends. I mean, bundling is one way of negotiation because when negotiation comes to a really deadlock, what happens is you kind of barter one thing with the other. And I can only speak for the Japanese case. When the Japanese case, there's a North Korean abductee issue, the defense treaty with the United States where US is defending the Japanese territory. So all these things, the past president has never done this to link with trade, these kind of issues. But President Trump seems to be like bundling these issues, although not really that much in the public. But it seems like with the negotiation with Prime Minister Abe and Japanese government, those type of things are actually put in there. It seems like the Japanese government is buying more military products from the United States. And Prime Minister Abe is very happy that North abductee issue is one of the top issues for President Trump. The abduction issue. Abduction issue, which sounds a little bit strange, but I'm sure there's that kind of a bundling negotiation like Philip you have mentioned, yeah. Thank you very much. It might work in that way. What I'd like to do now is go out to the audience and give an opportunity for some questions. If you could, please identify yourself and keep the questions short. And then we'll get through as many as we can in the remainder of the time. Yes, sir, please. Yes, I'm Bruce. I'm from Zhejiang Daily News Agency. I think most of her countries will support open world trade, but is there anything countries will get benefits from on China, US trade dispute? Sorry, sir, you're asking about the benefits? Is there anything countries can get benefits or can sometimes make more income or more benefits from if US and China have the trade dispute? Who could benefit? Any countries or sectors could benefit? Trade friction. Tim, do you want to go first with that? Well, I think if the US doesn't sell soy beans to China, for example, you look at other soy producers. And so there may be some possibilities of some people to fill in some gaps by the same token American companies that were sourcing some products from China are looking at other countries. And the AMTAM survey I mentioned talks about what are some of the other alternative suppliers that are American companies are referring to Vietnam, Malaysia, some other countries. So there will be some opportunities. The biggest question is whether the EU and Japan, which actually share exactly the same concerns about the Chinese system that the US has, whether they will end up supporting the basic positions that the US is taking, or whether they will see opportunities to benefit from a split between the US and China. And so I think that's one of the things that everybody is watching very carefully. Let me talk more from the country and country type of benefit. Like I mentioned earlier, US and Japan 30 years ago had a big conflict over how the system should be. And that actually affected the Japanese to really think about more competition internally, and not just export-oriented type of country style. And that's also what's in a different way maybe, but President Trump is doing to China. So you see China as a country that's quite export-oriented right now. Now you have a big domestic market. More competition rules enforced in China will make China become a more accessible market. If that happens, then it would be beneficial for many other countries, including China in the end. But unfortunately, it doesn't seem like that's the approach he's taking. But this conflict may lead to that kind of result, because of the word that I use, fee, fair, and reciprocal. If that works in the right manner, then it would be good for the whole capitalism world. So it would be a good thing if that happens. So I think there was a question here in the front, please. So do you see a challenge with the globalization that if the US continues to do this, then I see a challenge of their currency strengthening a lot. So their export will become less competitive. And is it going to force other countries to start looking inwards? And countries like India or others who are largely dependent on import, they're also going into the similar trade wars. I think right now there are a lot of, there's a lot of thinking and soul searching being done about the global trading system. If you look at the assumptions that underlie the World Trade Organization, for example, certainly the global GDP has improved because of free and open trade. But I think a lot of people are seeing, for example, that the benefits and the dislocations from global trade were not always allocated equitably in our various countries. And so you have populist movements that are challenging the global trading system. You have Brexit, you have American political candidates who were against TPP and who are saying, disparaging things about trade and about WTO. We see similar challenges in Europe. So I think some of the assumptions that were behind the foundation of the World Trade Organization are being challenged. If you look at US-China relations, China intervenes in their economy in ways that were not contemplated when the WTO was formed. Every country intervenes to a certain extent, but they don't have economies the size of China's and they don't intervene in as many different trade sectors as China does. I mean, the EU and the US are always fighting about commercial aircraft, Airbus, Boeing. But in China, we could potentially have 50 of those kinds of disputes going on across a big range. And that's not the way that you can really have a trading relationship. So that's one challenge. Another challenge is that China has decided that they should be self-sufficient in certain industry sectors, semiconductors. They feel threatened. The recent ZTE case was an example of that vulnerability. Now whether you agree with that assessment or not, if a country decides it wants to be self-sufficient, then you're throwing the principle of comparative advantage out the window. And the trade rules that are based on comparative advantage don't apply. So that's another challenge. The third challenge is national security. Every country has a right to protect its national security. Now we have more and more technologies that are not originally developed from defense industries, but from the private sector. And these technologies go across many different industry sectors, but they also have national security implications. So how do you protect your national security, which is a very legitimate objective, and look at these technologies that are going across so many different industry sectors? These are all new challenges that we have to think through as we look at how we continue to have the benefits of free and open trade and reciprocal trade in an evolving global system. Just one more, I agree with what Tim said. We should keep in mind that the World Trade Organization is definitely one very important institution that we have to keep maintaining because most of the free trade agreements, regional arrangements actually will have to try to abide by what the WTO does. So they call it WTO plus. Now if you don't have that kind of institution anymore, then these free trade agreements, if it's like a big agreement like TPP, that might be better. But if like President Trump is saying bilateral, bilateral, then you only have the two countries' interests involved and the political interests would overpower free and fair type of notion of trade. So it would be better to have the World Trade Organization govern the whole system and then have the regional trades that would comply within those boundaries and move on. And that would be a better way for all of us, yeah. Thank you very much. I think there's a question here first, please. Thank you, Andy from Institute of Chartered Accountant. So Professor, do you expect that China will retaliate and what are the measures? Because my understanding that China is going to be running out of reciprocal procedures if it's purely on tariff. The government is talking about quantitative as well as qualitative measures and what do you expect that to be or those to be? And we don't expect the last tranche to be implemented as soon as this, but it is happening. So what do you think the future will be for us? Thank you. I think Tim Goodman answered that better. China issues is more of the excellent question. Well, China has said that if the US imposed this set of tariffs on 200 billion of China's products that they would impose tariffs on another 60 billion of US products. And so we can certainly expect that China will carry out what it said. But you're right, because of the imbalance and imports and exports between the two countries, there are a lot more imports that the US can impose tariffs on than China can. And so China has talked about qualitative measures, but this comes back to what I said a moment ago. At times they have said qualitative measures and at other times they have said, don't worry, we're not gonna retaliate against American companies doing business here, because they don't wanna add to the incentive of American companies to be looking at investing elsewhere into source products elsewhere. So it's a very difficult policy decision on China's part to find just the right touch to do this. And I think we're still seeing this sort itself out. But I don't think that China is going, I mean, they're gonna try to show that they will stand up to the US and not just be pushed around. But I don't think they wanna be seen as escalating things. And if you start bringing in too many other areas, then you're opening up the door to escalating in the financial system and all sorts of things. And I think that would be very bad for both countries. And so I think China is properly being very cautious about that. Thanks, Tim. Yes, I think just behind, there's a question there. I'm from Phoenix Finance. And I'm from Phoenix Finance. And from Tamura, Mr. Tamura, you talked about Japan 30 years ago. You talked about Japan 30 years ago, 30 years ago in Japan. And it's very similar to what it is like now in China. It's not only about the trade wars, but China is facing the problems of this aging, population aging and the economic growth coming to a plateau. And those three things connected, trade wars, population aging and economic growth coming to a plateau. Thank you very much for the question. Well, you're right, Japan's also aging population, I think is a very serious problem. And Japan is trying to figure out a way to get out of that. I think you asked a very interesting question because aging population and economic growth is not going to be always increasing. I mean, always heading for the better. It's gonna become a more serious problem. Aging population, economic growth coming down. Again, the only way to get out of that is to really have a sound economic system, which I think the United States was right in the sense that you have to have competition rules, domestically, not just internationally. Just say the other party is not trading fairly, is not the important thing. The important thing is whether you have free and fair competition within. So that is if you allow foreign competitors to come in and also try to compete in a fair manner. Why? Because that will strengthen your own industry as well. If you're protecting your own industry and if you have these aging problem or growth problem, you're just gonna have a very sad end at the end. And Japan has made the effort to really allow competition rules to really have a big say in our system. And that's why we're having good competition from outside coming in. So we're really keeping our economy at a fairly low, not a good level because of this new good competition rule. So that's why, as I said before, trade and competition should go in line together. And unfortunately, the WTO and most of the rules have stayed away from bringing in competition rules because that will not help domestic industries in the short run, but in the long run, you should have competition rules that will make your own country's strength much better. You know, along the same lines, I had a conversation with the Chinese official last week and he told me that his private opinion was that if China accepted every one of the demands that the US is putting on the table right now, that the Chinese economy would turn out to be much stronger. And so his private view was sort of similar to your view. Private view, private view. Very much a private view. Any more questions here? Lady in the front row, please. Thanks very much. I can see that this is rhetorically popular in the United States, but just looking at the domestic pressures on Trump with the midterms coming up, he's effectively put a tax on American consumers. He's certainly damaged soy farmers and Canada's hanging tough. He's kind of declared war on everyone, not obviously China's the biggest foe, but he's also declared war on EU and on Canada. Do you think he needs a victory before the midterms? And do you think that therefore it's in China's interest to make sure that he doesn't get one? I actually think that the midterms are not a material factor in this discussion. I think that it's completely implausible to me that we could have a victory between now and the midterms. As I've said, the challenges, the gap between the US position and the Chinese position is simply too great. And China's not gonna be prepared to put on the table the sorts of things they would need to in order to have a deal because they don't wanna do those things. They don't particularly trust US motivations. They don't think they're in China's own interests and they would have to be squeezed a lot more and be persuaded that China's, or that the tariffs are gonna continue to be imposed by the US before they would be willing to put something so meaningful on the table. So I don't think the midterms are a significant factor in what we're seeing between the US and China right now. We have time for one last question. Yes, please. I'm Lee from the Wall Street Journal. I have a question for Tim. Could you talk a bit more about the short-term impact of the 200 billion tariffs on China's economy and China's role in the global supply chain? And how long do you think the debt log period will last? Thank you. A majority of the American companies in the survey said that they're looking at changing some of their sourcing decisions from China. So that's gotta be having an impact. I think it's gonna take some time to see what the real impact is as this next 200 billion of products are subject to tariffs. That's gonna accelerate the effort. And I think President Trump said that if China retaliates against that, he's gonna impose them on the next 267 billion. So I think that companies really have to be looking at supply chains. If it's still, if you can absorb a 25% tariff, then you'll keep it where it is. But if not, then you're gonna look at change. So I think it really is having an impact. And the United States as a supplier to Chinese companies is also affected because the Chinese products, I mean, the US products coming to China are also gonna be subjected to these tariffs. So I think this really is having a significant disruptive impact upon companies planning. Thanks. Jonah, any final comments? Well, I would like to repeat the same thing. I'm a scholar. I think what should be right should be right. So what I'd like to say is the free and fair trade is something you can only achieve with a multilateral approach. And that's why WTO is important. And also the keyword trade and competition. This has been a word that has been said for a long time but the world has been divided in these arena. And that's why many countries just focus on trade only. But like the United States focus a lot on competition, that's why US is very strong competition trade. There was a balance there. And Japan is learning from that and I think China should learn from that. And the more you do competition within, then you will have a very strong economy and you will have good strong trade as well. And that's how the world should be. And I think that should be the answer that China and US should come to agree in the end. Thank you. So there we are. Thank you very much everyone for your great questions. Tim Stratford coming to Berlin. Thank you very much for all the answers and the explanation you give. Jira Tamura, K-University, thank you very much. These issues will be taken up in many of the sessions we have coming up in the next couple of days. So please.