How to Win a Trade War: Soumaya Keynes on Trump, China, and Her Great-Great-Uncle Maynard

00:00:31 Andrew Keen: Hello, everybody. We live, of course, in anxious economic times, anxious global times. It would have been nice to get John Maynard Keynes on the show to give us his wisdom. Keynes, of course, famously said in the long run, we're all dead, and even he's dead these days. So instead, we got the next best thing, which is his great-great-niece, Soumaya Keynes, is a Financial Times writer and the author of an intriguing new book, How to Win a Trade War: An Optimistic Guide to an Anxious Global Economy. She coauthored it with Chad Bown, and the book is out on May 27 [note: actual US release May 26, UK May 28]. And she's joining us from New York. Soumaya, congratulations on the new book.

00:01:23 Soumaya Keynes: Thank you so much. It's, you know, it feels slightly surreal that people might actually read it, you know, after pouring so much energy and, you know, work into it. People seem to like it so far.

00:01:38 Andrew Keen: What do you think your great-great-uncle would think of it?

00:01:44 Soumaya Keynes: I'm not sure. I mean, you know, he died in 1946, so we weren't close. You know, there is one idea of his that we reference in the book. Right? So, you know, if you think about one of the big challenges in the global economy today, you know, one of them is that you've got these massive imbalances. Right? And so, you know, his international economics is one of his great concerns. And one of his proposals was that, if you leave countries to their own devices, eventually, it's the country with a big trade deficit or current account deficit that will be forced to adjust. And he recognized that actually, when you've got these big imbalances, the blame or the fault of that shouldn't just be pinned on the country with a trade deficit. Right? It's also partly the responsibility of the players with trade surpluses or current account surpluses. And so he proposed a system that would essentially introduce penalties for countries that run these big surpluses as well as the deficits. Right? And that would sort of try and bring the system closer to some kind of equilibrium, something slightly more stable than there was otherwise. And so, you know, he was living in a different time. He was talking about a completely different financial system. But, you know, as we're thinking about solutions to this, you know, these extreme imbalances that we find ourselves facing today, you know, something like a kind of penalty so that the countries with these massive surpluses have an incentive to, you know, reduce them. So I think he'd probably quite like the fact that his ideas were being cited in the book.

00:03:38 Andrew Keen: Let me ask you another question. The book is called How to Win a Trade War. There's no question mark there. Can trade wars be won? What are the classic examples of trade wars by one country or another that have actually been won? What models did you use?

00:03:55 Soumaya Keynes: Yeah. This is a common, refrain. You know, no one wins a trade war. And, you know, we basically agree in that, you know, it would be better everyone would be better off with trade peace if everyone could just get along, you know, hug, make friends, that sort of thing. But, you know, in a world of economic conflict, that we find ourselves in, you know, we're in a much more zero sum situation. So, you know, thinking about past examples, you know, I think okay. So today, what's happening essentially is that Donald Trump is imposing tariffs on other countries to try to squeeze out concessions. And right at the start, when he first did that, there was a kind of, you know, outcry from economists saying no one wants to trade war. This is terrible for the global economy. Because, of course, if you apply tariffs, everyone else will apply tariffs, and you'll fall into this downward spiral. And, actually, what happened is countries caved. Right? Countries came. They offered concessions. They were willing to do deals. And if you look at history, that actually wasn't that surprising. Right? We have seen examples in the past where you had very unequal trading partners where one, you know, government essentially said, okay. We're gonna tariff you unless you give us a better deal. And where the countries are small or very dependent on that trading partner, they did that. Right? And so there's an example of, you know, the French in the late, eighteen hundreds basically going to its partners and saying, great. You thought you had a treaty with us? You know, great news. Now you need to now we're gonna renegotiate it, and you're gonna give us more concessions. So, yeah, so history has these examples of countries throwing their weight around.

00:05:41 Andrew Keen: Does it in terms of these outcomes of the war, you mentioned, late eighteenth century France. Does it usually reflect other kinds of power? I mean, Trump, of course, is throwing his weight around. America, for all its criticism, remains a great power both in economic and military cultural terms. Do great powers win trade wars and middle or weak powers always lose them?

00:06:10 Soumaya Keynes: I think sort of by definition, if you have more power than if you're a great power, then you have more power than the smaller countries. I think one of the dynamics that we write about is the difficulty of coordinating between the middle powers. Right? So in theory, it could be that the smaller powers, the middle powers, all unite and push back against that bigger power. And then, you know, perhaps they could, you know, gain the upper hand or at least, you know, equalize in a power struggle. But, you know, the reality is often that it's extremely hard to coordinate and they don't manage it. Right? So, you know, to give an example, just think about what happened after Trump announced his tariffs last year. Right? There were suggestions that America's trading partners would coordinate. They would join forces and push back against Trump, and, you know, maybe they would have had more leverage that way. There was some, you know, governments in Asia that suggested doing that. There was, I think, one point a suggestion that, you know, the Europeans and Japanese might coordinate on some kind of common action, it went nowhere. And that's because there's always an incentive to cut a deal. Right? There's always an incentive to go in first and say, oh, well, if we do a deal early, then we'll get better trade access than our partner over there. And so that, I think, you know, undermines the potential for these smaller powers to really push back against the bigger ones. And that's exactly the same dynamic that you see with China and its trading partners. You know, China has enormous, power in all of these dynamic relationships. It's got blocking power. And so the idea that all these smaller countries are gonna, you know, unite against China is also, slightly fanciful.

00:08:08 Andrew Keen: You were recently on the Jon Stewart show in the US, very high profile. Stewart, of course, is no great friend of Donald Trump. A lot of people on the left, progressives, dismissed Trump's trade policies, his trade wars as either theatrics or economic ignorance, stupidity of one kind or another or self interest. What do you make of it? Is it credible, his trade policy?

00:08:35 Soumaya Keynes: I think there's a real distinction between okay. So in summary, I don't think he has a very coherent trade strategy. I think in the past, it has appeared to be more coherent because there were people working for him who had a coherent strategy, who he was listening to. And right now, we're in a situation where, you know, there are people who are genuinely concerned and aware of the challenges posed by China, for example, but they don't have much influence over, you know, the guy sitting in the White House. And so it's you know, there are things that the Trump administration is doing that kind of deserve praise. Right? You know, they've been working with allies to try to diversify away from China's choke hold on critical minerals. You know, they're making some progress there. You know, some of the toughening up with US, with Canada and Mexico is about trying to restrict Chinese components from getting in through other countries. You know, there are there are sensible coherent people there. I think the real challenge that they're finding is that Trump's just very mercurial, doesn't see the he doesn't see the benefit in earning trust, and that means that it's then very difficult to, you know, form genuine partnerships. You know, why should why should a training partner make tough concessions when they don't trust you to keep your side of the deal? And so that's the challenge that everyone faces, I think.

00:10:16 Andrew Keen: Yeah. I take your point on Trump being mature. I don't think anyone would argue, probably including himself, on that one. But is his basic logic and excuse my rather vulgar questioning, Sumer here. I mean, is this basic understanding of economics, is it credible when it comes to trading between countries?

00:10:43 Soumaya Keynes: I genuinely don't I'm not sure I would be able to describe a coherent view. I mean, he's always been skeptical of trade. Right? You know, he was he's, you know, obviously been quite hostile towards China in the past, although, actually, he's kind of softer on China than many in Washington DC think he should be and certainly some people within his administration. So I guess I genuinely find it hard to identify an intellectual framework there. I think he's an opportunist and that he'll, you know, he'll see what leave levers he has and he'll pull them when he can. And right now with China, you know, the risk of pulling any of those levers is that China, you know, pulls its own lever right back and creates problems for the US economy. But I don't really I don't really know if he has a philosophy there that's that it's possible to analyze. Yeah.

00:11:57 Andrew Keen: The subtitle of your book, how to win a trade war, is an optimistic guide to an anxious global economy. Where's the optimism?

00:12:09 Soumaya Keynes: Yeah. So this is this is a question that, it's a good question. So I think there's optimism in two fronts, because, you know, yeah, there is good reason to be anxious. Right? We're pragmatic, and we're not saying that everything can be fixed by everyone hugging and holding hands and, you know, going back to the old rules based system. We're basically saying that's not an option anymore. The optimism comes because we do think there are some things you can do. Right? So we have some agency. If winning a trade war is about minimizing your own wounds, then there are things we can do. We can we can look to other countries. We can take the right lessons from China, which has been, you know, engaging in very active, policy to try and, you know, protect itself for years. We can we can learn from the mistakes of China, right, which obviously has used subsidies to excess and, you know, created mountains of debt, and generated huge amounts of waste. We can look to, you know, the history of stockpiling. Where did it go well? When did it go badly? You know, the whole book is supposed to be a guide. Right? You know, what can we say? Because there's so much screaming. You know, this the whole point was that this was supposed to be the kind of nuanced, you know, evidence based. You know, we're not ideological. We're not pushing a particular agenda here. We're just saying, you know, this is the challenge. It's really hard, but what can we do? And we do think there are things you can do. And then the second the second note of optimism, maybe I'm stretching, optimism here, optimism here, is that, you know, in the end of the book, we lay out scenarios for how everyone could feel like they've won. Right? Now I think some of those scenarios in some of those scenarios, we're still in a slightly zero sum world, where, you know, it really is about who has the autonomy to do what they wanna do. Right? And, you know, there are scenarios in which you could get a coalition of, you know, western allies to, you know, uphold the rules amongst themselves, but also defend themselves from the mercantilist policies of China. And then there's a kind of final policy of, like, okay. What about in '20 in 2050? Right? Or, you know, even further away than that. Right? Is there is there something that could come out of the ashes? Right? You know, after everyone has raised trade barriers and we're all, you know, operating alone. Could that create the opportunity to say enough? Can we go to a more stable world? Can we get ourselves out of this era of economic conflict and get something, that looks like, you know, a corporation for everyone's benefit? And so, you know, we do try to end on a more positive note.

00:15:05 Andrew Keen: Editors like that, of course. You asked whether trade causes peace or perhaps war and you wrote a recent FT piece. I guess, thinking about 2050, it all depends on whether there's real war maybe, with China over Taiwan or somewhere else in the world. One of the things that strikes me, Soumaya, is Thomas Friedman famously said that countries with McDonald's don't go to war. I'm not sure if he was right or not on that one. I'm sure he's wrong. He's usually wrong. But as the and you've mentioned China a lot, and this is, of course, the core subject, the core relationship or failed relationship, US China, which drives your book and drives the world economy. As the US and China become, perhaps, in economic terms, more similar as Trump seems to be nudging America towards a kind of state capitalism, and, of course, in China, Xi is the pioneer of state capitalism. The countries which have similar economic or political economic arrangements, do they tend to be better at not just fighting trade wars, but trade pieces? In other words, as China and America become more alike, does that make a trade war between these two great economic powers more or less likely?

00:16:36 Soumaya Keynes: Yeah. That's a really good question. I think, you know, the dynamic that you've identified is you know, I would argue that China has forced the Americans to become more Chinese in some sense. Right? Because once you're dealing with a country where, you know, budget constraints don't apply, where, you know, there are there are companies just being kept alive with, just super cheap credit, you know, the market isn't fully working there. Right? And that kind of forces you to intervene to protect yourself against that. So I get yeah. I guess I'd sort of slightly reframe that. Then in terms of your question of whether so the question is about the relationship right. So does that dynamic make the US and China more likely to go to war? So I think in the book, we know we grapple with this question of do trade ties help peace. Right? The basic theory being that the more connected you are, the higher the costs of a conflict. Right? And so the risk is now that, you know, now that the US is having to protect itself from China and it's having to sever some of those trade ties, you know, could that make, conflict more likely by essentially reducing the cost of conflict? And I think it's I mean, yeah. It we're just in a very tricky situation because, you know, the risk is that in the quest to derisk from China to, minimize one's, dependence on Chinese rare earths, for example, you know, maybe the Chinese see that they should strike now. They should not strike. I mean, they should try to take Taiwan now, right, while they have leverage. If they see that if they see that leverage is falling because the US is trying to derisk, maybe the Chinese say, well, let's get it now while we have the upper hand, essentially. So that kind of dynamic is possible, and it you know, it's not the kind of dynamic that's very easy to, you know, prove empirically, but any political economist historian will tell you that these are, you know, these are real dynamics that we should worry about. So I suppose the question is, what's the counterfactual? Right? So, you know, we're in a world where the US is trying to derisk from China and essentially taking on some Chinese characteristics, as you say. And the question is if it wasn't trying to do that, would what would the world look like? Right? And I suppose the you know, it could be that if the US wasn't looking more Chinese, if it was just saying, okay. Great. We're gonna import lots from China, and that's gonna be fine. Then, actually, conflict would be pretty likely as well. Right? Because the Chinese would say, great. Well, we've got this choke hold. We're going to weaponize our dominance and do what we want. And so it's just it's just not obvious there from the theory, which is, you know, a tricky way of a very long winded way of saying we don't really know. I think I think overall, you know, a world in which you've got very strong trade ties and, you know, mutual and interdependence is alive and well is a safer one, than the one in which we're all disconnected. I just don't know if in the current situation we're in that going back to that world is one that we have.

00:20:28 Andrew Keen: You don't seem to be particularly impressed with the meeting few days ago between Trump and Xi. In the New York Times, you and Chad Bown, your coauthor of the book, had a piece about how Trump and Xi would need personality transplants to get the deal done, which doesn't seem very likely. And then you imagine yourself as the couple's therapist of the two characters trying to bring them together as their marriage, if they ever had a marriage, unraveled. What do you make of this recent summit, this meeting? Is it significant historically, or is it just another example of Trump's reality television show?

00:21:16 Soumaya Keynes: I think this Trump this summit was important, and I think it was important for what wasn't agreed. Right? Because the US side clearly wanted, you know, some kind of announcements, some obvious deliverables. And, you know, my understanding was that in the run up, the Chinese were just not really negotiating. And, you know, afterwards, they did each announce deliverables and, you know, the, there's going to be this board of trade where they're going to, you know, talk about trade issues and try and get, agreement on which products are fine to trade. But, you know, I think what this represented is that we're not in a world in which, the Trump administration kind of can dangle some tariff threats, and then the Chinese will just roll over and say, great. What do you want us to buy? Right? They're not in that kind of public application mode anymore, because the Chinese feel like they have the upper hand. And so, you know, I think I think the summit was interesting for, you know, for highlighting that. You know, perhaps in an in an earlier world, maybe in his first time, if the Chinese had slow walked, the talks to that extent, maybe there would have been another tariff threat. Right? Those tariff threats on the Chinese have been pretty have been pretty quiet recently. So I think it's kind of significant for that. And then, you know, of course, it just you know, it I suppose it's frustrating that, you know, Trump goes to China and he, you know, he the purchases being some kind of achievement, like a deal, is just it wasn't clear even if they had got everything they wanted that, you know, purchase of agricultural goods would really solve the underlying problems with the US China relationship. So I suppose, you know, I'm a bit frustrated that it was, you know, seems to be on the trade side at least, and obviously, trade is just one issue that they were discussing, that, you know, is the president wanting shiny baubles, rather than really pursuing a kind of coherent long term strategy, which I think members of his administration are trying to push, but not everyone's working on the same not everyone's on the same page, I think.

00:23:50 Andrew Keen: Does he have the nuclear option of just canceling the debt? How does that play into it?

00:23:57 Soumaya Keynes: I don't think anyone wants the US to default on US treasuries. I think the kind of, you know, potential financial crisis that could cause is something that he will have been advised against. You might be —

00:24:10 Andrew Keen: Advising Trump against anything seems to be just an invitation for him to do it.

00:24:17 Soumaya Keynes: True. I mean, you might be referring to this point about, you know, the Chinese holding a bunch of US treasuries.

00:24:23 Andrew Keen: Exactly.

00:24:26 Soumaya Keynes: I think I yeah. I think there are serious people in the US treasury who have, who will who will understand the risks associated with doing that, like the US being in default. Right? I mean, they issue the world's safe asset. You don't wanna mess around with that. And so, you know, I guess I do have faith in, you know, like Scott Bessent and his team that they will have communicated to president Trump that you don't do that. So, yeah, I'm not that concerned that he would he would do that because of the just the systemic, implications.

00:25:07 Andrew Keen: Is therapy, though, helpful? I mean, you're not you know, your piece in the Financial Times was obviously half joking. But, would it be helpful to bring in some therapy when it comes to this US China relationship of both sides understanding what the other wants and being sensitive, empathetic to their needs?

00:25:29 Soumaya Keynes: Yeah. I mean, the couple's therapist in my piece wasn't a very good couple's therapist. I think there was, you know, one point at which, the therapist was pretending to take notes and instead doodling a kangaroo. So, you know, I'm not sure if —

00:25:41 Andrew Keen: Is there such a thing as a good couple's therapist?

00:25:45 Soumaya Keynes: I mean, I think there could be. I think it's it can be valuable for some couples. I think, given where Trump and Xi are, I'm not sure that much is going to be resolved, you know, between the two of them. I think that, you know, both of them neither are kind of open to changing their behavior particularly. Right? Which means that, you know, I don't think, you know, a deeper understanding of each other would open up opportunities that weren't there before. Right? China, you know, they have their own system. It's, you know, they've got their domestic challenges. They're exporting to deal with those domestic challenges. They're not gonna be bullied by the US administration to change that in their in their current position. Similarly, the idea that president Xi would get Trump to, you know, change his ways or change US policy is absurd. You know, this is what you have when you move away from a world with one dominant party to one with multiple powerful players. You know, no one has the upper hand. And, you know, so in that couples therapy session, there's no there's no particular reason for these guys to listen to each other deeply. And so yeah, you know, I think there could be I think in the medium term, I think we're all gonna have to try much harder to understand the Chinese position, to understand the Chinese economy. I think it took, you know, me personally and Chad also, you know, a while to appreciate how, you know, unwilling, they were to change their system to fit into the global rules. And, you know, that's fine. They don't want to. They're not going to do that. But then, you know, the point of the book is to say, well, how do you how do you operate in that system? And so, yeah, maybe couples therapy isn't gonna fix everything. Maybe it's just you know, maybe we're in the divorce lawyer stage where it's like, okay. Well, how can we manage this process, and how can we make sure that, you know, people don't, you know, the couple don't make each other destitute with all the —

00:28:01 Andrew Keen: You — I mean, you would be — if you got the call from Xi or Trump, you would be available to do the therapy?

00:28:07 Soumaya Keynes: I'll definitely be available for Trump and Xi if they want some therapy. And I'll doodle several kangaroos as they talk as well.

00:28:16 Andrew Keen: That would be very generous. There's the famous phrase, of course, in the US that when the US catches a cold, the rest of the world, particularly Latin America, gets pneumonia. When it comes to these trade wars, it's obviously a very technical issue. Your book is an a very engaging, entertaining way of treating trade wars and our complicated global arrangement. But why should we really care? Is it the smaller countries? You talked about the middle countries of Canada and Western Europe. But is it the countries of Latin America and East Asia that are most impacted by these trade wars in terms of ordinary people's lives, how they eat, how they pay their rent, how they survive?

00:28:59 Soumaya Keynes: Yeah. So I think, you know, there are a few ways that these trade wars can affect real people. I mean, you know, in one sense, what's going on with the Strait of Hormuz with Iran is a sort of trade war. Right? I mean, Iran is —

00:29:11 Andrew Keen: A hot trade war then.

00:29:13 Soumaya Keynes: Right. Iran is weaponizing, its control over the flows of energy out of the Persian Gulf. That's gonna put up everyone's heating bills come the winter and, you know, it's already put up people's gas bills, you know, when it comes to, fuel bills when it comes to driving around. So, you know, that's pretty obvious. You know, I think I think the tricky thing is that for ordinary people, there's a real trade off here. Right? Because in the short run, the status quo delivers cheap stuff to people. Right? You know, one of the arguments we're trying to make is that, yeah, stuff might be cheap, but it might be too cheap. Right? It might be so cheap that you're kind of hooked on it, and maybe you're in a position you're putting yourself in a position where a bigger party can coerce you, by threatening to withdraw it because there are no other suppliers. So, you know, there's a sense that, you know, in the good times, ordinary people might just, you know, lead their lives and enjoy the cheap stuff. But, you know, in an emergency, suddenly, you know, there are no cars or smartphones on sale or, you know, something suddenly becomes unavailable and then, you know, buying a new car is super expensive or, you know, people lose their jobs because of all the, you know, the car plants are shutting down. I'm mentioning cars a lot, but, you know, that's just one example of a of a supply chain that's, you know, very globalized and so quite vulnerable to these trade wars. So there's a kind of, you know, short term, long term trade offs here. Because for the ordinary person, you know, in a very extreme situation, you know, you could see shortages and that, you know, then there would be the question, well, why didn't why didn't governments do something about this before? Why were we so vulnerable, to coercion or to, you know, the supply chains breaking? And so the idea is that, you know, one thing we argue is, you know, one you know, just how to make sense of these massive, forces that just seem really confusing. You know, so the first thing that people can do is kind of, you know, educate themselves, wise up, work out what go what's going on.

00:31:35 Andrew Keen: Read your book, of course.

00:31:37 Soumaya Keynes: Reread the book, of course. And then, you know, unfortunately, accept that in some cases, stuff may have to get a bit more expensive in the short run, and that's the price that we pay for the kind of the long term security. You know, one thing I'm personally worried about is, you know, in the US right now, you know, Trump has just started a war on every single front he could imagine. And so, you know, we've got an inflation issue in the US, and so people are gonna associate, you know, tariffs, trade wars with, inflation. And that means that's gonna become a real political obstacle to tackling the real problems, with you know, on the trade war front that Trump really should have been focusing on. Right? That's kind of my concern.

00:32:26 Andrew Keen: Two very quick questions, Soumaya. You've been very generous with your time. And excuse again the naivety of this question. I don't understand why you and Chad argue that we can't go back. Why can't we go back to the international rules based system that your great-great-uncle and others built after the second World War? Why is that impossible?

00:32:55 Soumaya Keynes: So for the rules to work, if you if you think of, if you think of the trading system like a sports game, and so this is this is an analogy that we use in the book. Think of it as a sports game. You need rules to ensure a level playing field — otherwise everyone gets just very upset. Right? And, so, you know, in a sports game, you have doping rules. Right? No individual player is supposed to just drag up and build massive muscles so they can destroy every other player on the pitch. And, essentially, China's subsidies are the equivalent of those, you know, performance enhancing drugs. And the problem with China's system is that those performance enhancing drugs are very hard to identify. And so you could write rules saying China won't give these, you know, corporate handouts. It won't give all this cheap credit. It won't give favors to Chinese companies that then, you know, compete other industries in other countries out of existence. But you can't see those subsidies very easily. Right? And so for rules to work, you have to be able to enforce them. You have to be able to say, well, here's the rule. Is China meeting the rule? But if you can't see the subsidies, then it's just almost impossible to actually enforce that rules and check that China is behaving in the way that it's said. Essentially, China's system is just so opaque, that, you know, it just doesn't it just hasn't worked. And, you know, there were there have been efforts over the past few years to try and create rules that China might adhere to, but there's just no evidence that China has any interest in signing up to those new rules, which is a sense yeah. And, you know, the fundamental issue is that China is just too big to say, it doesn't matter. We'll have one party who's not really breaking the rules. And then I suppose the final thing is the Americans are done. Right? For rules based system to work, you need to be able to you know, you need to be willing to sign up to what the referee says in terms of who's broken the rules. The Americans have lost confidence in the ability of a referee to make rulings, to say what's fair and what's not. That's because of a long and, you know, boring history I won't go into. But the Americans aren't signing up to a new, you know, rules based system adjudicated by and so when you've got China that's not interested in signing up to new rules, the US, which is not interested in signing up to a referee. You've got two of the world's biggest actors who aren't interested, and there isn't you know, you need the biggest players for it to be meaningful.

00:35:41 Andrew Keen: Yeah. So in a way, your take on China is, I wouldn't say it's Trumpian, but it's not that different from what Trump you articulate it better than he does because you're a trained economist, and he isn't. But for whether we like Trump or not, he has pioneered a new way of thinking about China.

00:36:03 Soumaya Keynes: Yeah. Although, I think that was really that's something that happened in his first term when I think Robert Lighthizer, he was he was basically running trade policy in Trump's first term. He was really pushing that. And I think, you know, the Trump's second term when he's putting tariffs on every you know, if you were really tough on China, you really would have done something differently. Right? You wouldn't have put tariffs on everyone. It would have been more targeted. And so, you know, I think in his second term, the difference is that Trump hasn't allowed himself to be driven by those who have such, you know, pure, who have such who have the same focus on the on the real problem in the in the global economy. So I don't wanna I'm kind of hesitant to give him the credit for, you know, being anti China when, you know, actually, he seems to be seems to quite like Xi Jinping, you know, got a pretty transactional president. You know, he can he can be flattered by Xi, you know, with the ceremony all he wants. You know, I'm not I'm not sure that, he's got, you know, the grand, the grand theory, there.

00:37:19 Andrew Keen: Final question, Soumaya, in these kind of conversations is always the final question. AI, does it change anything? Does it just compound everything you're talking about in how to win a trade war? Some people, particularly out here on the West Coast, are arguing that AI will produce some sort of cornucopian economy domestically, of course, but presumably internationally as well, do away with labor, machines will do all the work. How does AI change all this potentially?

00:37:51 Soumaya Keynes: Yeah. I mean, so a couple of things. One is obviously the AI is central to, you know, a lot a lot of this conflict between the US and China because, obviously, the US is restricting China's access to the top end AI chips. Right? The US is very concerned that China will have, you know, incredible AI capabilities that will give it an advantage militarily. China, meanwhile, is saying is, you know, it's trying to use AI and kind of implement it as broadly in its economy as possible, thinking that will give it economic strength. So economic you know, AI is really integral to this kind of competition between these two countries. And, of course, you know, if either of them is right? I mean, if the US does, you know if the US is right that the next, you know, two, three years are really pivotal and that they can get this advantage that will be unassailable, then, you know, maybe the dynamics of these trade conflicts will change, and America will, you know, be in a much more powerful position. You know, on the other hand, China may, be able to use AI to its advantage. I think the other the other kind of point I'd make on AI is that, you know, it's possible that AI could just really fundamentally reshape international flows of trade, and I mean services trade. So if you think about the UK, for example, massive services exporter, massively reliant on that. If no one wants their services anymore because of AI, then, you know, maybe, well, that could be a problem, right, for the UK's financial balance. That could generate a whole new wave of trade tensions when as, you know, the economy reorients itself. So, you know, if I told you I knew exactly how AI would play out, you should discount anything else I said because, obviously, we don't know. But I you know, obviously, it has the massive potential to be incredibly disruptive and to create a whole new, you know, set of tensions, which maybe how to win a trade war will help you understand.

00:40:12 Andrew Keen: There you have it. How to win a trade war. The book is out, in the United States, May 26 in the UK, May 28. I think it's gonna be one of the best selling books. It makes all this very accessible, written in a very witty way by my guest, Soumaya Keynes, and her coauthor, Chad Bown. Congratulations, Soumaya on the book, and lovely to talk to you. Thank you so much.

00:40:40 Soumaya Keynes: Thanks for having me, and thanks for reading it.