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The Globalist
Macron says France will recognise a Palestinian state, becoming the first G7 nation to do so
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- [00:04]
Georgina Godwin
We're proud to support the craft of journalism. UBS brings you the latest news from around the world with the Globalist on Monocle Radio. Be part of an international network that brings together leading insights, research and technology across 24 time zones and 12 key financial hubs. With you at the centre of it all, UBS advice is our craft. You're listening to the Globalist, first broadcast on 25 July 2025 on Monocle Radio. The Globalist in association with U. Hello, this is the Globalist broadcasting to you live from Midori House in London. I'm Georgina Godwin. On the show ahead, France says it will recognize the state of Palestine. We'll look at the fallout and the current situation in Gaza. Then fighter jets, rocket launchers and closed borders. Tensions between Thailand and Cambodia explode into deadly clashes. Can diplomacy pull this back from the brink? We'll have a roundup of the papers from Nairobi and hear how Volodymyr Zelensky may be putting Ukrainian democracy in jeopardy now. Tariffs are rising, trade tensions are high and yet the global economy is holding firm. We'll ask what's behind this surprising resilience and how long it can last. And to get more specific on that, Vicky Price joins us to give us the latest news from the markets. But there is still plenty of crazy stuff out there, as Andrew Muller will illustrate.
- [02:08]
Andrew Muller
We learned this week that there is a limit to the insouciance, the sangfreud and general lasseculaire of French President Emmanuel Macron.
- [02:19]
Georgina Godwin
And we'll bring the curtain down with news of the latest West End openings. That's all ahead here on the Globalist. Live from London. First, a look at what else is happening in the news. The US has lifted sanctions on Myanmar after the junta praised Trump in a move Human Rights Watch calls a dangerous shift in policy. The UK has pledged absolute commitment to Australia as the Aukus submarine pact strengthens Indo Pacific defence ties. And wrestling legend Hulk Hogan has died at 71 after a career that blended superstardom, scandal and Trump era politics. Do stay tuned to Monacal Radio throughout the day for more on those stories. Now, France will recognize a Palestinian state at the UN General assembly in September, a diplomatic shift that's already drawn sharp criticism from Israel and the US President Emmanuel Macron says the move is aimed at reviving the two states solution and building momentum for peace. Israel's government has called it a reward for terror, while Washington's says it plays into Hamas propaganda. And in Gaza, ceasefire talks now face new delays after Israel recalled its delegation following A revised proposal from Hamas. Well, I'm joined now from Dubai by Greg Karlstrom, who's Middle east correspondent and author of How Long Will Israel Survive the Threat From Within. Greg, thanks for coming on the show today. What's behind Macron's decision to recognize Palestine now and could it have real diplomatic weight or is it merely symbolic?
- [04:04]
Greg Karlstrom
I think it's more the latter. The announcement of this forthcoming recognition comes a few days ahead of a conference that France has organized along with Saudi Arabia on trying to sort of revive the two state solution and come up with a concrete plan for getting to a Palestinian state and the end of the conflict. That conference was supposed to be held in New York last month, but it was postponed because of the war in Iran. So it's been rescheduled for the end of July. And obviously it's a sign of frustration on the part of European government, Arab governments, many governments with the direction of politics in Israel under this right wing government that doesn't even want to talk about Palestinian statehood. So you can see it as a sign of how badly Israel's international standing has fallen over the past two years. But at the same time, I don't think it makes much difference on the ground. You already have 100 plus countries that recognize a Palestinian state, but that recognition hasn't done anything to help bring that state to creation. And I don't think France joining the group will make much of a difference.
- [05:19]
Georgina Godwin
And what's been the Israeli and US Response?
- [05:25]
Greg Karlstrom
Anger on both sides. The Israeli reaction, of course, is predictable. A lot of right wing politicians, and not just right wing ones denouncing this, but also the reaction from the United States, the Trump administration condemning France for this decision. Mike Huckabee, the US Ambassador in Israel, tweeting earlier this morning that, you know, perhaps if France can recognize a Palestinian state, then the UK can take over France or something like that, if we could just change borders unilaterally. So a very angry reaction from the US as well.
- [06:02]
Georgina Godwin
Could this isolate France diplomatically?
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Greg Karlstrom
Well, I think it will strain their relations with America a bit for a moment, but I'm not sure in the long run how much difference it's going to make in terms of their relationship with the US And I think in terms of relations with Israel, this isn't the biggest irritant in the bilateral relationship. I think for France and for so many other countries around the world right now, the issue that they have with Israel is they want the war in Gaza to end, they want a ceasefire. They've been pushing for one for many, many months. So those relationships are already quite strained because of what Israel is doing in Gaza.
- [06:43]
Georgina Godwin
Well, let's have a look at Gaza, because Israel's pulled its delegation from the talks in Qatar, as has the U.S. they say to consider a new proposal from Hamas. So what is in that proposal and why did the other negotiators le?
- [06:59]
Greg Karlstrom
I think there are two issues here. There's the sort of detail focused issue that the negotiators have been working on in Qatar and also in Italy yesterday, where Steve Witkoff, America's Middle east envoy, met with Israeli and Qatari officials and they are trying to negotiate the extent of Israel's withdrawal from Gaza. During the initial phase of the ceasefire, which is meant to last for 60 days, Hamas wants Israel to pull out of larger chunks of territory in Gaza. So they've been going back and forth offering and counteroffering maps of how far Israel would pull out. That's the main issue in these negotiations. And then there are some ancillary issues to do with the release of Palestinian prisoners and other things as well. So all of that needs to get worked out in negotiations. But above all of that, you have the bigger question of is this just another time limited truce that is meant to facilitate the release of some Israeli hostages and then the Israeli government will resume the war in two months time, or is this really going to be the deal that ends the war for good? And so far it's not clear that the Israeli government is prepared to end the war. And it's also not clear that the Trump administration is prepared to apply the sort of pressure on Israel that it would need to to push Prime Minister Netanyahu into a permanent ceasefire.
- [08:29]
Georgina Godwin
Meanwhile, of course, conditions in Gaza remain absolutely dire. How much are humanitarian issues shaping the pressure on both sides?
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Greg Karlstrom
Well, it should be shaping the pressure, I think, within the Israeli military. There is some recognition now that conditions, as you say, really are dying, that people are dying of starvation in Gaza and that could accelerate quite quickly. The way hunger tends to work is that you have a trickle of deaths in the beginning and numbers don't look maybe that horrifying, but then people start to die quite quickly afterwards. So humanitarian groups are warning that Gaza may be at that point where we've seen perhaps a few dozen people die of starvation already. Those numbers could grow significantly in the coming days. So there's obviously a need to get more aid in both in northern Gaza, where the UN is struggling to do aid distribution, and in the south, where this so called Gaza humanitarian foundation is doing a woefully inadequate job handing out aid. There's a need to get more aid in. But as long as the war is ongoing, as long as Gaza is still an active war zone, it's very hard to distribute that aid for people to come and collect that aid. Even if you're getting more across the border, that doesn't necessarily mean it's getting people who need it.
- [09:52]
Georgina Godwin
Yeah. So, finally, on the ground, with these ongoing strikes and gunfire, with people being attacked even as they go for aid, what is the current picture and how is that affecting negotiations?
- [10:06]
Greg Karlstrom
People are being pushed into ever smaller areas in Gaza. We saw earlier this week Israeli troops going into Deir Al Balah, which is a city in the central part of Gaza that by and large had been spared heavy fighting over the past few years. That's for the first time, Israeli tanks had entered that city. So you have then another wave of displacement. People who had fled there, who thought it was relatively safe now being pushed out and forced to find somewhere else to go so that the space available for Gazans to live on keeps getting smaller. And then, as you say, there's the question of, you know, people being attacked even as they are trying to collect aid. We're hearing these weekly, if not daily, reports of people being shot or shelled or otherwise killed by Israeli troops. And that is just. That is an inevitable consequence of the way Israel has decided that aid distribution should work in Gaza, because you now only have a handful of distribution sites run by this foundation. That is going to lead to very large crowds forming every morning, desperate people trying to get into the distribution hubs and pick up a scarce parcel of food. And when you have big crowds forming in what is still a very chaotic war zone, unfortunately, you are going to end up with these kinds of horrific incidents day after day.
- [11:27]
Georgina Godwin
Greg, thank you very much indeed. That's Middle east correspondent and author Greg Karlstrom there. And this is the globalist. It's 1311 in Bangkok, 711 here in London. Tension between Thailand, neighbouring Cambodia continues to escalate. At least 11 Thai civilians and a soldier have been killed in clashes along the frontier. Both sides accuse the other of firing first, but the response has been severe. Thailand has carried out airstrikes using F16s, while Cambodia has reportedly launched BM21 rockets. Bangkok has sealed all land border crossings and evacuated 40,000 civilians. Phnom Penh has downgraded diplomatic ties and condemned what it calls brutal military aggression. With fighting spreading across at least six points on the frontier and no sign of either side backing down, peace talks remain off the table. Well, in Bangkok I'm joined by James Chambers, Monocle's Asia editor. James, thanks for coming back on the show. We spoke to you yesterday. So how has the situation advanced since then?
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James Chambers
Well, I should say that, I mean we're getting most of our information from the Thai side. I am based in Bangkok. We do have a direct like kind of channel with the, the Ministry of Foreign affairs and there's a lot of international journalists here. So I guess there's a lot of the news is, is coming from, from the Thai side and the Cambodians are actually not putting out much information whatsoever. So in terms of today, the, the, the Thai army, you know, have confirmed that fighting is continuing across the border, but it doesn't sound like it's anywhere near what the devastation that we saw yesterday. As you mentioned, I mean, Thailand launched F16 several times to bomb Cambodia and there was these kind of, you know, really distressing scenes of a 711 convenience store at a petrol station that had been hit by a Cambodian rocket. So that was yesterday. And most of the fatalities, as you mentioned, were yesterday. The death count on the Thai side is up to 14. Now the Cambodian, a local Cambodian provincial leader has confirmed one death on the Cambodian side, but I suspect that will be much higher. But today the focus has been on kind of clearing what the Thai army are calling a red zone around the border and evacuating Thai civilians at least 20km back from the Cambodian border. You know, that number now is up to 100,000 people. So there are 100,000 people now living, you know, in temporary accommodation and, and, and tense. But yes, it's not, it's still ongoing, but there's been no kind of escalation from the fighting we saw yesterday.
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Georgina Godwin
And with all those evacuations and diplomatic ties downgraded, what's the immediate impact on livelihoods and regional stability?
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James Chambers
Well, I mean, you know, livelihoods on the border will have been completely disrupted. I mean, we saw some horrible scenes yesterday of, you know, of kids being killed in this and there are families obviously fleeing for their lives. But then, you know, when you look at the capital and everywhere else in Thailand, I mean Thailand's quite a big country in, I was, I was out and about in Bangkok early this morning. I was on the BTS sky train going into the center for meetings and you know, it's life is going on as normal. I imagine everybody on the, on public transport is following the news very closely on their phones. But it doesn't feel like a country that's gearing up to go to war. I mean, you don't see any, any soldiers on the streets yet. It does feel like something that's happening quite a way away. And the, the acting Prime Minister Poontam we, Chaya Chai came out yesterday after a two and a half hour meeting of the National Security Council. And his wording suggested that, you know, they want to, they want to keep a lid on this and de escalate. He said, you know, Thailand is not yet declaring war on Cambodia and he was keen to call this not a war but a border skirmish. So at the moment the words that are being used on the Thai side are definitely trying to keep a lid on this. But it's worth pointing out that civilian control by any political party of anything that happens on the border, especially a contested ball like this is very light and it's always handed over or taken over by the, the army. And given the political instability in Thailand right now, that the army is certainly running the show. So I mean, if you want to look at what's going to happen and how this is going to reach any kind of de escalation, it'll be, you know, for the army to, to probably be, you know, front and center.
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Georgina Godwin
And what role can ASEAN or other international bodies realistically play? What needs to happen to open the door to talks?
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James Chambers
Well, every, you know, all of these institutions and big countries and allies have been coming out to, you know, to call for a de escalation and maximum restraint. We've heard from the U.S. we've heard from Antonio Gutierrez in the UN, from Australia, the EU, China, and there's actually going to be an emergency meeting of the UN Security Council later today. The Cambodians did appeal to the UN for that. I think Pakistan is actually in the rotating chair. And as it turns out the Thai Foreign Minister Maris Sang Yampong is actually was actually in New York at the time addressing the Security Council. So he's going to be there for that. So let's hope that forum can provide a chance for the two sides to actually talk rather than to continue this bickering. But I mean, you could either see today's, you know, I guess the fact that it's, the fighting has, has slowed down a bit as the first signs of de escalation or you could just see this as the, another day in what's probably going to be another border skirmish that will go on for months and months until both sides finally agree to kind of withdraw their troops.
- [17:43]
Georgina Godwin
And James, should this continue spiraling, is there a risk of regional contagion and how would neighboring countries line up? And crucially, who would China support?
- [17:56]
James Chambers
Well, I mean the interesting thing here is, I mean both countries are neighbors and they're both part of, of asean, the association of Southeast Asian nations. And one of the core principles of ASEAN is non interference in each other's business. This, this whole thing flared up because the Cambodian kind of patriarch, Hun Sen essentially interfered in Thai domestic politics by leaking that call he had with the suspended Prime Minister Peitong Shinhuat. So that will have got a lot of noses out of joint around the region. But it's not one of those conflicts that's going to bring in other, other countries. That's not what, what goes on in this region. And China doesn't have, you know, a history of, of running into foreign wars and getting involved in, in disputes between neighbors. It, you know, it will be interested in, in peace and kind of trying to leverage its, its influence in here, but it's not going to, it's not one of those, I mean, I call it border skirmish that's going to bring in other nations, but it will take, you know, other nations and influential allies and partners like China, like the us, like the ASEAN chair Anwar Ibrahim to bring the sides together. And let's hope the conversations at the in New York later today can be the first step towards a, you know, peaceful outcome.
- [19:20]
Georgina Godwin
James, thank you very much indeed. That's James Chambers, Monocle's Asia editor, speaking to us from Bangkok. Still to come on the programme, by.
- [19:29]
Julia Laseka
Straying into authoritarianism, Zelenskyy has shot himself in the foot.
- [19:33]
Georgina Godwin
We'll hear about democracy and defence under threat in Ukraine. This is the globalist craft is its own reward. Which is why at UBS we're honoured to work alongside over 50 of today's leading Nobel laureates, each an expert in the art of economic science, bringing you engaging discussions, actionable insights and inspired solutions, all focused around the questions that shape our world today. For a better outlook, find a Nobel perspective. UBS banking is our craft. Let's continue now with today's newspapers. And joining us down the line from Kenya is Naveena Kotor, Monocle's Nairobi correspondent. Good morning to you, Naveena.
- [20:28]
Naveena Kotor
Good morning, Georgina.
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Georgina Godwin
So we're looking at US sanctions, possible US sanctions on South Africa. Now this is interesting because it's already been signed, I think by Congress. It's not set in stone yet. But why does the US want to sanction South Africa?
- [20:45]
Naveena Kotor
Yes, this is quite extraordinary news, I have to say, that's coming out of Congress. The U.S. house Foreign Affairs Committee voted to send a bill that would see sanctions being passed to the House of Representatives. I mean, I think if this is supposed to become law, the House of Representatives will have to vote on it, and then the Senate will have to vote on it. So I think we'll have to see how it goes. But what this bill that was introduced in April is saying that South Africa made a choice to abandon America and its allies and side with communists and terrorists. The bill accuses South Africa of undermining US Interests in the region by having close ties to Russia and China because it trades with these countries. But also there's a sort of political alliance. It also accuses South Africa of backing Hamas, something that South Africa has denied. And I think the root cause of this is South Africa's support for the Palestinian cause and filing a case at the International Court of Justice two years ago.
- [21:54]
Georgina Godwin
And, of course, if we look at the six Democrats who voted for the bill within the Foreign Affairs Committee, they are known to be strong Israel supporters. So there does seem to be quite a strong Israeli lobby behind this.
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Naveena Kotor
Yes, I think the South African government is trying to see what comes of it. So far, the Foreign Ministry and the spokesperson for President Ramaphosa have denied to, declined to comment. Let's remember, there are various issues that the South Africans are currently addressing with the American government. One is tariffs. The other one is the issue of granting asylum to white South Africans who are claiming to be persecuted, a perception that is shared by the US Government. So at this stage, the South African government, I think, is trying to sort of maneuver all of these issues and avoid being pulled into a discussion about the veracity of the accusations that are being made in this bill.
- [22:51]
Georgina Godwin
Yeah. Now, there is a really inspirational piece in the East African. It's written by Abdul Muhammad, who's a former senior official of the African Union and United Nations. And it just. It's a kind of cri de corps. He says we want. He's talking about Africa. We once won our freedom by believing in ourselves. We must now win our future by doing the same. And the whole piece is framed around, well, this New Yorker, this Ugandan New Yorker, if you like, Zoran Mamdani, who of course won the Democratic primary race for mayor of New York. And he is in Uganda.
- [23:25]
Naveena Kotor
Yes, he is in Uganda. And I have to say, I know there's a bit of a hype in the United States on the east coast, but there's definitely a hype in on the east coast of Africa. The hype is real. I Think a lot of people here, commentators, but also just young East Africans are feeling quite inspired by this guy who is their age, who is communicating the way they communicate on Instagram, on X, who talks about the things that actually also matter to people here, education, child care, health care, sort of the bread and butter issues that a lot of people feel politicians and leaders here are not paying enough, you know, attention to. And the way he is seen, the same way he's basically seen as an antidote to kind of the Trump and Republican government in Washington. I think he is actually seen as an antidote to, you know, leaders like Museveni and Ruto and leaders in, in Tanzania. So I think there's a lot of excitement about the fact that he has come to Uganda. Rumor has it that he's getting, he's celebrating his wedding here and he'll be here for six weeks. So I, I'm also heading to Uganda tomorrow actually. So I'm hoping to bump into him. If I bump into him, I'll try to put him on air.
- [24:43]
Georgina Godwin
Absolutely. We're fascinated by him. And just this whole idea that he wants to, he's sort of really behind this movement to return African American to democracy rather than kleptocracy, which a great deal of the continent is in the grip of. Let's move on now and have a look at the former head of the Central African football body. Jail for war crimes.
- [25:06]
Naveena Kotor
Yes. I mean, this is a trial that has been ongoing for a really, really long time. We are talking about human rights abusers and crimes against humanity that happened in 2013, 2014 in the Central African Republic. And Patrice in Gasona was found guilty of committing 28 war crimes and crimes against humanity by judges at the International Criminal Court. I think it's a very important, you know, I don't want to call it success, but trial at the International Criminal Court that often is accused of not being very effective. He the judges gave their verdict after a trial that lasted almost four years, involving more than 170 witnesses and 20,000 items of evidence. And he will be, he has been sentenced to 12 years. The other person has been sentenced to 15 years.
- [26:01]
Georgina Godwin
That's extraordinary. And how do people feel about this justice finally being served?
- [26:07]
Naveena Kotor
You know, I think the Central African Republic has come a long way since these crimes that happened in 2013, 2014. Back then he was accused of leading fighters into the capital Bongi and slaughtering primarily Muslim civilians. But there has been the political situation in a way has calmed down. I think there has been a bit of development. And I think people are welcoming these judgments because they're part of a sort of, you know, a development of movement, of looking forward by closing these chapters that happened in the past.
- [26:47]
Georgina Godwin
And finally, let's have a look at news of one of my former employers, actually. South Africa's antitrust regulators conditionally approved the $2 billion acquisition of the Pan African broadcaster MultiChoice, by France's Canal Plus. Tell us more.
- [27:02]
Naveena Kotor
Yes. So this is the way this is going to be, the biggest pay TV and streaming business in Africa. The France Canal plus is very much interested in pushing into this market. There's similar deals being made in other parts of the country, in other parts of the continent, but I think we're looking to. We're looking towards 50 million subscribers. That's, you know, what Canalus has announced and a decent amount of investment being made to create more local content and cover more local sports. And I think it goes to show or shows the development that we have touched on in the past, that the sort of media market here, the entertainment market and the sports market is growing, given how young the audience is, how keen the audience is on sports on the continent, but also on kind of dedicated content that has been produced for the local market. And that's, I think, what we're going to see as part of this merger.
- [28:04]
Georgina Godwin
Naveena, thank you very much indeed. That's Naveena Kotor, Monocle's Nairobi correspondent. Have fun in Kampala. Naveena, this is the Globalist on Monocle Radio. Now here's what else we're keeping an eye on today. The U.S. has lifted sanctions on Myanmar military allies just weeks after the junta praised Trump. Rights groups warn of a troubling policy shift amid rare earth competition with China. The UK has vowed absolute commitment to Australia as the Aukus submarine treaty deepens. Defence ties. A new pact to underpin security in the Indo Pacific and the euro Atlantic with £20 billion worth of British exports is expected. And wrestling icon Hulk Hogan has died at 71. The WWE star helped turn pro wrestling into a global entertainment juggernaut known for his Trump support and let Trump mania rule. Rally cry. Hogan leaves a polarising legacy. This is the Globalist. Stay tuned now for a look behind the headlines. Here's Monocle's Julia Laseka on Ukrainian democracy and defence in the firing line.
- [29:27]
Julia Laseka
By straying into authoritarianism, Zelenskyy has shot himself in the foot. A brazen show of authoritarianism from Ukrainian President Volodymyr Zelenskyy has put the country's democracy and defence in Jeopardy. On Tuesday, Zelenskyy signed a bill to strip Ukraine's anti corruption watchdogs of their power. The new law targets the National Anti Corruption Bureau, also known as naboo, and the Specialized Anti Corruption Prosecutor's Office SAP. The two agencies have in charge of investigating and prosecuting corruption across Ukrainian society. Zelenskyy's stated reasoning is to root out Russian agents supposedly embedded in the agencies. But recently NABOO and SAP had started investigating officials in the President's inner circle. Zelenskyy's move has led to the biggest protests in Ukraine since Russia's full scale invasion and puts the country's survival in peril. Allies of the country, wary of criticizing it for fear of Russia weaponizing any accusations, are beginning to speak up. A statement from US Senators Lindsey Graham and Jeanne Shaheen, both strong supporters of Ukraine, noted that one of the most common arguments to ending aid for Ukraine is potential corruption. They stated that future US Investments are dependent on the continued strength of Ukraine's governance structures. There are signs that the once lauded wartime leader might reverse his folly. Regardless, Zelenskyy's actions have already had a damning effect. The EU paused talks with Ukraine on accession into the bloc. Now the flow of money that is keeping the country's defence industry on target will be even more highly scrutinized. Zelenskyy, who came to power on a wave of public anti corruption anger, surely knows that his gamble was wasn't worth it.
- [31:16]
Georgina Godwin
That was Monocle's Julia Lassica. And for more from Monocle's editors and correspondents around the world, do sign up to our free daily newsletter, the monocle minute@monocle.com forward slash minute. Despite months in months of rising tariffs and deepening trade tensions, the global economy seems to be weathering the storm. Growth remains steady, trade volumes are holding up and markets have rebounded. So in this time of great uncertainty, how is this possible? Well, I'm joined now by Tom Fairless, global economics correspondent for the Wall Street Journal. He's recently published a piece entitled the Global Economy is Powering through a Historic Increase in Tariffs. Tom, welcome to the Globalist. In your article, you argue that both business, businesses and households have shown surprising agility in adapting. What strategies are they using to get round these new trade barriers?
- [32:19]
Tom Fairless
Hi. Thanks so much for having me. So yeah, I think it's surprised economists how flexible households and businesses globally have been. There was a lot of kind of catastrophizing in April about how we were going back to sort of Great Depression level tariffs and I suppose the implication was that the economy was going to have a huge dip and really it's just continued exactly as before with, as you were saying, trade volumes are continuing, businesses are continuing to invest to import and export. So I think a central element has been that the US consumer, that US households have been very strong and have continued to import even recently when they were facing already high levels of tariffs. And I think that's partly because households in the US are doing very well, very, very prosperous. They've seen good wage increases recently and household net worth is strong because of the stock markets, because of house prices have increased. So I think households are in a very good position. I think businesses, as you were saying, have been flexible and have sort of found ways to. So businesses in China have had record exports by basically rerouting exports to the US through other countries like Mexico and Southeast Asia. And I think some of the Western businesses that I was talking to have really become shock proof because of the whole experience of COVID I mean, the last, I suppose 15 or 20 years in global business have really been just a series of these kind of global shocks. And this is just the latest one. And I think some of the German businesses that I speak to basically just rolled out the playbook that they used in Covid and sort of created these specialist trade teams to look at how they could deal with these tariffs. And so they, yeah, they, they, I think they've become sort of crisis experts. So yeah, one of the strategies I suppose was to, to try and front load and bring in more imports before the, the tariff deadline. But trade has continued even after tariffs increased around April. So I think, yeah, the economists have been very surprised with the agility of the, of businesses globally.
- [34:41]
Georgina Godwin
Talking about front loading though, how does that affect short term indicators and what risks does that pose going forward?
- [34:51]
Tom Fairless
I suppose there is a risk that you'll get a payback that the imports were very strong in the first quarter, which we did see, and that in the second, third quarter there'll be a big drop. To be honest, we haven't really seen that so far. There was the big surge in factory production and in trade in the first quarter, but in the second quarter it was relatively resilient too. And so some economists are saying, well, maybe there won't be so much for payback. I mean, it could be that also the price increases haven't been passed on completely and that businesses have absorbed a bit of them and because of the inventories they haven't had to pass them on. And so once they do Start passing through those, those higher prices, then you'll start to see the shock and consumers will bulk at paying these higher prices.
- [35:39]
Georgina Godwin
Although you give the example of Italian cheese exporters who pass these costs on and it hasn't hurt sales at all.
- [35:47]
Tom Fairless
That's right, yeah. So these cheese producers did do some inventory buildup and so they managed to protect a bit of the, to reduce the price increases a little bit, but they passed on some of the price increases. And yeah, the US consumers just continued to buy. So I think that just shows how resilient the households are and how much of a strong economy the US has right now.
- [36:11]
Georgina Godwin
And Tom, you highlight large scale government spending as a cushion against trade, trade shocks. How is this fiscal policy translating into real economic resilience?
- [36:21]
Tom Fairless
Where it started gives a degree of confidence to businesses. You see that in Germany where the government is doing this kind of historic increase in debt and it's really the business confidence and this etho business climate index is rebounding and it gives a degree of stability that they know that the various contracts will come through over time and these infrastructure projects, building projects and so there'll be more confidence, more money in the economy. And I think in the US it's more in kind of tax cuts that Trump is pushing through this big budget bill that will lower taxes and so that should, you know, support the economy going forward and support households ability to continue buying.
- [37:12]
Georgina Godwin
And finally, do you think as the ECB seems to, that we're witnessing deeper structural changes such as localised production that could in fact shift how global trade works completely in the long run?
- [37:27]
Tom Fairless
I think that's true, absolutely. And I think we've seen that for some time now and that this is just another event that will deepen that. I think that that's also a reason that trade hasn't been disrupted in the way it might have been. Because businesses have already already set themselves up to be more sort of operating on, on different continents and producing closer to the final consumer so they don't have to import and export as much. Certainly German businesses, a lot of the ones I speak to have already got large US operations and they're only going to double down on that when they see this risk of a world with higher and higher trade barriers.
- [38:10]
Georgina Godwin
So the August 1st tariff deadline, arbitrary deadline is looming. Do you think we could see radical change after that?
- [38:21]
Tom Fairless
So I think the uncertainty will clear after the larger trade deals with the eu, maybe with China go through. Japan was just, just, just seems to have done a deal. So I think that will, that should support the economy. But then there's, there is the fact that tariffs will probably increase from this. The base rate is 10% right now. It probably increased to 15, maybe 20% in places like Europe. And so you could. And then businesses, once they know how much they're paying and once their inventory is run thin, they could start to pass through more of those price increases. And so I think most economists think there'll be some kind of dip in the second half of the year.
- [39:03]
Georgina Godwin
Tom, thank you very much indeed. That's Tom Fairless, global economics correspondent for the Wall Street Journal. You're with Monocle Radio. It's 8:39 in Zurich, 7:39 here in London. And it's time to talk more on trade and economy with Vicky Price, economist and former joint head of the UK Government's economic Service. Vicki, really sort of picking off the back of what we were speaking about, the European Central bank has left interest rates unchanged despite trade war uncertainty. Tell us more about that.
- [39:41]
Vicky Price
That's interesting, of course, that they've decided not to do anything, but they did say that it was all, you know, quite uncertain, looking ahead. And what they really mean is that what is happening to the economy is something they're watching very carefully. And of course, the uncertainty regarding tariffs and it could go either way. So things could improve quite considerably in terms of having a deal which is still going to leave the EU slightly worse off than it was before in terms of its trade with the us because tariffs would be higher than what they were being charged before. So if they go for, say, 15%, if you see that before it was about 2, 2.5%, depending on the product you were looking at. Although there have been periods of high tariffs on steel and aluminium, which were then dropped during the first term of President Trump. But overall, the EU has benefited from quite low tariffs on its sales to the US. If we get 15% is worse than before, but actually better than the alternative, which could perhaps be 30% or even higher for particular products. So if that deal is reached, then there are lots of discussions that this may indeed be the case and we may have some resolution coming up pretty soon. They're not, obviously that will be helpful for the economy, and so that's an upside that they may be looking at, and therefore maybe even inflation might be higher if the economy does better. On the other hand, if the agreement is not particularly beneficial to the eu, even worse than what I've just been discussing with the us, we might end up with more concerns about growth ahead and therefore perhaps cuts in Interest rates will come faster than would otherwise have been the case. I think that's where they are. So when you. The interesting thing for me is just looking at some of the headlines and how the various news outlets are covering it, some are saying that, you know, they didn't cut, you know, despite concerns for the economy, and others are saying that actually perhaps they should have cut because whatever happens, everything is slowing down anyway, which is indeed the case in a number of sectors. So that is where I think we are now in anticipation. The markets are all behaving quite well, actually, that they seem to think that there will be a resolution. We've seen that, of course, happening all across the world with the agreements with Japan and possibly some resolution will be coming forward also on the Chinese front. So we are in this sort of expectant sort of period when you just don't know how we'll end up. But as you've been discussing with a previous contributor, things look a little bit better than perhaps we thought just even a few weeks ago.
- [42:20]
Georgina Godwin
Although perhaps not for British carmakers. They say they've been left underwhelming by the UK India trade deal that was signed on Thursday. Tell us more.
- [42:29]
Vicky Price
Yes, I think the concern is that there are different, possibly different rates of import taxes that will still be applicable to cars, depending on how luxurious, if you like, they are, or what their make is containing. So. So there are lots of uncertainties still out there. And whether in the end it's going to be positive for the car manufacturing sector or not is a question mark, because what we've seen already in the UK is of course, quite a substantial drop in car production. In fact, it's gone back to the lowest levels we've seen in decades. And there are worries, of course, about, again, the US and tariffs and so on. But all the trade deals that are being discussed now and are being signed, it's going to take quite some time. Them to be effective, of course, have lots of little details which the car manufacturers in particular are concerned about, which need to be resolved over the next year or so. And so there isn't unanimous sort of joy about that trade agreement, even though obviously it's good news overall for the economy, because what it means is that tariffs are being reduced. Both sides, you know, whiskey exporters are jumping up and down with joy because. Because those tariffs are being reduced quite significantly. On the other hand, we're letting in loads of goods coming in from India at quite low rates as well. So real reduction in tariffs both ways. And of course it could affect particular sectors in different ways. But it's part of the overall ambition of this government, of course, to make up for the fact that we've had to do new deals since Brexit in order to make up for the loss of trade with the eu. And some of those deals, of course, are being pursued as well by the eu. So they're going to have an Indian trade deal as well. So the question mark as to, you know, whether in fact we're ahead of the game or not or will remain ahead of the game for some time is, is. Is something we don't really know. But overall, some concerns there without any doubt and lots of details to be sorted out, but good news overall.
- [44:38]
Georgina Godwin
Vicki, thank you very much indeed. That's Vicky Price, economist and former joint head of the UK Government's Economic Service. And this is the Globalist on Monocle Radio.
- [44:48]
Greg Karlstrom
You.
- [44:52]
Georgina Godwin
With ubs, you have a truly global partner incorporating new technologies, innovative approaches and unexpected opportunities, leading you to insights that help answer the questions that matter. Delivered with passion, care and unmatched expertise. Because it's about rising with the dawn each day, knowing that we can do even better. That's what banking is to us. Not just work, but a craft. UBS banking is our craft. Now it's time for Andrew Muller's regular Friday installment of what we Learned this Week.
- [45:38]
Andrew Muller
We learned this week that there is a limit to the insouciance, the sangfreud and general lasseculaire of French President Emmanuel Macron. We learned that Macron had instructed his learned friends to file suit for defamation, or perhaps should we say defamation, against conservative American commentator and idiot Candace Owens, who has persistently made a number of interesting assumptions, assertions about Macron's missus, AKA first lady of France, Brigitte Macron. We learned, and you may want to strap yourselves in for this, that Owen believes that Madame Macron, a mother of three, was in fact born a man, one Jean Michel Trogniu, and is actually a blood relative of President Macron, who is himself the product of some variety of CIA mind control endeavour. Not really sure. Owens is asserting that Macron, though fundamentally human, has merely been programmed by American spooks or is some sort of wholesale Android being Holly remotely controlled from a bunker at Langley and to be honest, don't care all that much as this is all obviously quite mad. But we learned that Owen's wall was unrepentant, if incomprehensible.
- [47:00]
Naveena Kotor
We are revolting against this. We're revolting against the perverts that run the world. And I want to be very clear here. I count you among them. I think you're sick. I think you're disgusting. And I am fully prepared to take on this battle on behalf of the entire world.
- [47:16]
Andrew Muller
Speaking on behalf of the entire world. This all sounds like tremendous fun. Good luck with it. And we, for one humorous new review, look forward to a court case which will basically write this thing for us for weeks, as well as furnish ample further opportunity to wheel out that somewhat borderline Gallic outrage chorus we recorded whenever and why ever it was. Actually, wasn't there a thing where we thought we'd lost it and made another one? Sticking anyway with the theme of reasons the French might now be regretting their encouragement of the fledgling United states circa the 1770s, and that the Marquis de Lafayette might be turning, if not weeping in his tomb. We learned that one 34 time convicted felon had figured out who the real criminal is.
- [48:24]
Matt Wolf
It would be President Obama. He started it. And Biden was there with him. And Comey was there. And Clapper. The whole group was there. Brennan. They were all there in a room right here. This was the room. This is much more beautiful than it was then, but that's okay.
- [48:41]
Andrew Muller
A reference there to the increasing difficulty many are experiencing in telling the Oval Office apart from one of Saddam Hussein's bathrooms. We learned, yes, that President Donald Trump had concluded that his predecessors had connived in a hideous conspiracy.
- [48:58]
Matt Wolf
This was treason. This was every word you can think of.
- [49:02]
Greg Karlstrom
What?
- [49:03]
Andrew Muller
Every word?
- [49:04]
James Chambers
Carrots.
- [49:04]
Georgina Godwin
Check it.
- [49:06]
Vicky Price
Water. Hopping.
- [49:08]
Georgina Godwin
Coffee mug.
- [49:09]
James Chambers
Light burger.
- [49:10]
Vicky Price
Sky. Light bulbs.
- [49:12]
Andrew Muller
We digress. Although we did learn that Trump himself seemed intent on making a bold stab at saying every number he could think of.
- [49:20]
Matt Wolf
We will have reduced drug prices by 1000% by 1100-1200-1300-1400, 700, 600.
- [49:29]
Andrew Muller
Anyway, we learned that, yes, a former President of the United States had attempted to subvert the constitutional order because they didn't like the way an election had gone and that President Trump was appalled by this notion. The very possibility of anything of the kind ever transpiring having simply never occurred to him.
- [49:48]
Matt Wolf
They tried to steal the election. They tried to obfuscate the election. They did things that nobody's ever even imagined.
- [49:56]
Andrew Muller
But we learned that Trump's point person on this, Director of National Intelligence, Tulsi Gabbard, an appointment which continues to make as much sense as naming Vin Diesel Director of National hair, was somewhat struggling to make the case. Possibly because there isn't one who can.
- [50:12]
Vicky Price
Say it has to do with an outgoing president taking action to manufacture intelligence.
- [50:18]
Naveena Kotor
To undermine and usurp the will of the American people in that election election and launch what would be a years long coup against the incoming president, United.
- [50:27]
Andrew Muller
States Donald Trump, an outgoing president taking action to undermine and usurp the will of the American people. Sounds dreadful. We learned, or at least found ourselves suspecting, that this flim flam and if you will, flummery may have been not altogether unrelated to escalating pressure upon the Trump administration to release possibly scandalous files pertaining to the friendships with powerful personages enjoyed by the late sex trafficker Jeffrey Epstein. Which we learned Republican House Speaker Mike Johnson was so grimly determined to get to the bottom of that he sent Congress home for the summer so they couldn't ask any questions about it.
- [51:09]
Greg Karlstrom
There's no purpose for Congress to push an administration to do something that they're already doing.
- [51:14]
Andrew Muller
Are they though, Mr. Speaker? Are they? For we learned that the figure at the top of said administration appeared to be frantically engaged in tactics which the flint hearted sceptic may suspect were intended to distract.
- [51:28]
Matt Wolf
This morning, President Donald Trump is escalating his call for the Washington commanders to change their name back to the Redskins.
- [51:34]
Andrew Muller
We learned that the President was all back in on reviving the inane culture war brouhaha over whether Washington D.C. 's NFL team should re embrace a nickname by which no basically well adjusted adult conversant with the common courtesies and possibly not even Donald Trump would dream of addressing an actual Native American. But if he can't get that up to the gate, the Washington Epstein's is right there. For Monocle Radio, I'm Andrew Miller.
- [52:06]
Georgina Godwin
Thank you, Andrew. You're listening to the Globalist on Monocle Radio. And finally, let's get a sense of the big weekend releases in Theatreland with Matt Wolf, theatre critic at the International New York Times, who joins me here in the studio. Matt, we always appreciate you getting up early and coming in here. Thank you so much.
- [52:29]
Matt Wolf
Always a joy to be here, Georgina. Thank you.
- [52:31]
Georgina Godwin
Now, two big openings at the national and a very female positive both.
- [52:36]
Matt Wolf
Yes. I mean this is interesting for a lot of reasons. First of all, the national has three auditoria under one roof. All three of the plays at the moment are new plays, which is worth saying because it didn't need to be that. And two of the three plays which we're going to discuss, both newly opened, are by women. And this has been a big thing in New York recently. Not enough female playwrights. So it's good to see women being given their due on Britain's most important theatrical stages. These are also byproducts of the outgoing regime of Rufus Norris, who had been running the national. And Indirinpasingham starts her regime in the autumn with classics Hamlet and the Bacchae. So the first of these is, Inter Alia, which is a new play by Susie Miller, who people will know from Prima Facie, which was a big deal a couple of years ago with Jodie Comercial. This is going to be, I would imagine, a comparable big deal with Rosamund Pike.
- [53:28]
Georgina Godwin
She's an Australian.
- [53:28]
Matt Wolf
She's an Australian who has hit the international market with a very particular theme, which is she's a former lawyer herself and her theme seems to be people who. Women who work in the law who come up against the limitations of the very landscape in which they work. So in Prima Facie, we had a barrister who specialized in defending men accused of sexual assault who was herself then assaulted. And in this play, Rosamund pike plays brilliantly a judge, Jessica Parks, who holds forth on all sorts of theories and whatever, and she's very dryly objective and commanding. And this all comes crashing down when her teenage son is accused of rape. And all of a sudden there's a big. You know, you may have a kind of legal defense about things, but what happens when that comes in your own, in your own kitchen, in your own kind of family life? Some of the writing is a little bald faced and on the nose and there are times when you feel like you're being talked at. There's a lot of the players narration right to the audience, but it's got a very kinetic, volatile production from Justin Martin, who also directed Prima Facie. And Rosamund pike is brilliant and might I say, by the way, that she does a mean Tina Turner impression. Very good, which I didn't expect because we see her in a karaoke bar and all of a sudden she's letting loose with only the best, which in Rosamund pike is one of the best.
- [54:50]
Georgina Godwin
That is wonderful. I'm very, very pleased to find out.
- [54:53]
Matt Wolf
She has a whole new calling should she want it.
- [54:56]
Georgina Godwin
What else are we seeing there?
- [54:57]
Matt Wolf
Well, the other play, the Estate, other new play by chance, Ahte, who is herself, interestingly, a doctor who has turned to playwriting. Of course, the great history of doctors turned playwrights is Chekhov. Whether Chansetta will be the next Chekhov we shall see, but this is not quite as successful as inter ali, in my view, but certainly worth seeing largely for the star performance of Adil Akhtar, who plays the son of a Punjabi immigrant. He's a junior shadow minister who wants the top job. He wants to be leader of the opposition and he is within a very fractious family. So it's the personal and the political as in a way, as inter alia when you've got the workplace and the domestic. So in a way they're kind of quite, quite. They're sort of kindred spirits. But I think Interella is the more successful of the two.
- [55:49]
Georgina Godwin
Now to the Globe.
- [55:50]
Matt Wolf
This was very interesting to me, a huge surprise because it completely wrong footed my expectation. I love it when that happens. This is a production by Sean Holmes of the Merry Wives of Windsor. Now this is a Shakespeare comedy that's not done very much and people don't seem to like it. It's very bourgeois. It's Shakespeare writing about his own community, not about, not about fairy sprites, it's about the people he hung out with. And it's full of silly names and pratfalls and people kind of going head over heels. But in this production, instead of celebrating the community in which the play exists, you realize as the show goes on that it's a sort of gentle critique of kind of a cozy domesticity which doesn't allow room for outsiders. Anyone in the play who's French or Welsh, for instance, forget it. They're subject to ridicule. And Falstaff, who we know from the Henry Ford plays, who's the main character here, a very different sort of man in this play is humiliated in the extreme in the last section of the play. I suppose in contemporary parlance you would say he's othered and it lends a very disquieting air to what should be something quite sort of genteel. And as a result you sort of look at the play in a new way. And I think that's what you absolutely want from Shakespeare.
- [57:03]
Georgina Godwin
I mean, the Guardian accuses it of being xenophobic.
- [57:06]
Matt Wolf
Well, I think one of the things that the production does is expose the quiet xenophobia that lurked beneath pleasant small town life where you think, oh, what a jolly community. Everyone gets along and goes about their business. But in fact here you've got paranoia, loveless marriages, xenophobia indeed. I began to feel after a while as if I was watching an album. And that's not what I usually think when I go to Shakespeare. So I would go see it and go along with its changes in mood, which are very powerful.
- [57:37]
Georgina Godwin
I love again, the Guardians picking up on this. The Devil who deceived Faust is pronounced because normally you would say Mephistopheles but Mephistophallus.
- [57:46]
Matt Wolf
Yes, yes. There are lots of sort of things to kind of chivy the audience along. Because, because most people, it's not like going to see Twelfth Night, which is coming up there. Romeo and Juliet, which were just there. People arriving at the Globe for kind of a larky night out, don't know this play. So you have to kind of get them into the spirit of the piece and then just to kind of gently turn the knife, as Sean Holmes has done, and kind of expose just kind of little bit of finality about this sweet natured group of people. Very clever indeed.
- [58:17]
Georgina Godwin
Matt Wolfe, thank you so much. As Mistress quickly says in Act 2, Scene 2 of the Merry Wives marry, this is the short and the long of it. That's all we have time for. Thanks to our producers, Laura Kramer, Chris Chermack and Tom Webb, our researcher, Henry King, and our studio manager, Lily Austin, with editing assistance from Flynn Simons. And the Headlines coming up at the top of the hour. Then there's more music on the way. And the briefing is is live at midday in London. The Globalist returns at the same time on Monday. And I'll be with you tomorrow for Monocle on Saturday and lots of sharp programming. And then on Sunday, meet the Writers features the Mexican novelist Guadalupe Netal. That's all to come. I'm Georgina Godwin. Thanks for listening.