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Darian Woods (2:51)

To learn about how butchers were reacting to the Argentine beef deal, we went to one in New York with a cute name.

Marcelo Savelli (2:57)

El Gauchito.

Darian Woods (2:58)

El Garcito Little Cowboy Translates okay, yeah yeah, yeah. El Garchito's manager is Marcelo Savelli, who showed me the Argentine beef cuts all laid out inside the counter marked with the country's sky blue flag ribeye.

Marcelo Savelli (3:11)

This is the picanha. And then we have basilo flap steak and the matambre, which is the roast beef that we usually put on the grill.

Waylon Wong (3:18)

Gary and I used to live in Buenos Aires, so I ate a lot of steak. And there was this one restaurant I'd always take visiting friends to because they would do this parlor trick where the waiters would cut your steak in front of you with the spoon to show how tender it was.

Darian Woods (3:33)

That might be coming to the U.S. more. Marcelo Savelli says Argentine beef has this distinctive taste. It's different to American beef, but, you.

Marcelo Savelli (3:44)

Know, still it's, you know, it's not for everybody.

Waylon Wong (3:46)

Well, it is for Weyland Wong. Part of Argentine beef's famous flavor is that a lot of the cattle is raised eating grass.

Marcelo Savelli (3:53)

Initially, it's not fully 100% grass fed. @ the end, they grain feed it to make it a little bigger because the cows are much smaller in Argentina.

Darian Woods (4:00)

Marcelo said he'd be happy to play his part in Portugal. More Argentine beef, of course, if it's possible.

Marcelo Savelli (4:06)

Yeah, why not?

Darian Woods (4:07)

But he also said he had no idea how the White House announcement would actually work. So we looked into the details and the answer is fairly simple. Basically, the US Government is promising to lift a quota on Argentine beef. There is a certain amount that's allowed in each year, and then above that is charged a 26% duty. And by raising that quota significantly, it'll be cheaper for businesses like Elgatito to buy more beef.

Waylon Wong (4:34)

So it is still private companies buying the meat. We explained this to our listener, Sebastian.

Darian Woods (4:39)

Does that make sense?

Sebastian Sanchez (4:41)

That does make sense. So they would purchase more because it's cheaper?

Waylon Wong (4:45)

Yeah, basically no extra tariffs. Those political lines about we're buying the beef really just message simplification.

Darian Woods (4:53)

So that's Argentine beef coming into the US but in a country where the state actually runs more companies like China, the answer to these types of questions might be different. Take soybeans. When the US hiked tariffs on China, suddenly soybean farmers found they weren't getting any chines purchases. Now, in this case, it's relatively easy for the Chinese government to basically flick a switch. State owned companies like Sinograin and Cofco import almost all the soybeans. And if the Chinese government wants to put pressure on the US Xi Jinping can tell these companies to buy from Brazil rather than the U.S. and if China and the U.S. sign a deal making up well then Beijing can tell them to buy soybeans from the US Again. Of course this is all complicated in the real world. There is right now a huge glut of soybeans in China. It's stockpiled tons of soybeans from South America. Earlier this year.

Waylon Wong (5:51)

We got a related question in the indicator inbox from Claire LeCornu. Claire wrote in about other countries pledging to spend lots of money here in.

Sebastian Sanchez (5:59)

The US My question is I keep hearing about countries that have committed to invest hundreds of billions of dollars in the U.S. for example, after Trump's recent trip to China, he received commitments of investment from JAP and South Korea. What does it mean for a foreign country to invest in the us? What does that actually look like?

Darian Woods (6:17)

To answer this question, we spoke to Wendy Cutler. Wendy is senior Vice President at the Asia Society Policy Institute and has worked on her fair share of trade deals.

Wendy Cutler (6:26)

Korea Free Trade Agreement, the Trans Pacific Partnership Agreement and I negotiated with China for many, many years.

Waylon Wong (6:32)

Those are the types of deals that cover all kinds of aspects of both countries economies from labor standards to copyright law. And getting to these deals is a much deeper than what we've seen recently where we have these agreements that are just a few pages long. I chatted with Wendy earlier this year about that.

Darian Woods (6:49)

Wendy says you can think of basically two main ways this investment is happening. The first is private companies like HD Hyundai pledging spending. HD Hyundai has pledged to spend billions of dollars improving American shipyards. Wendy walked us through how the South Korean government might have gotten that investment commitment.

Wendy Cutler (7:09)

The conversation would go along the lines of we are meeting again with the United States to negotiate a trade agreement. The United States has made it clear that they want pledges of increased foreign direct investment in the United States. Hyundai, can I count on you to pony up X billion dollars and announce a new plant in the United States?

Waylon Wong (7:32)

Wendy says these announcements make sense for the companies, firstly because they may have been planning them anyway because foreign companies.

Wendy Cutler (7:40)

Accrue benefits by investing in the United States. However, the numbers that are being pledged now to kind of placate our president who loves big numbers and big investments. This is. We're in a whole different dimension of foreign direct investment now.

Darian Woods (7:57)

And another motivation for these companies is that a big announcement is generally helpful for them to curry favour with President Trump. And finally, even if the investment doesn't really make business sense, well, writing a press release is not a binding contract.

Wendy Cutler (8:13)

I think some of the companies that are pledging frankly view these as pledges. And given that actual investments in the United States take multiple years, maybe some of them are hoping that over time either this administration will forget about their pledge or there'll be a new administration that won't really care about these pledges.

Waylon Wong (8:34)

And there's a second form of investment as part of these deals.

Wendy Cutler (8:38)

What the Trump team is doing a bit differently is deals with countries like Japan and Korea to set up an investment fund.

Darian Woods (8:47)

So for example, there's now a specific fund jointly overseen by US And Japanese government agencies. Wendy says this fund works by picking projects for investment in the US and then Japan channels both private and public money into areas like energy, semiconductors or shipbuilding. That said, Wendy suggests looking at all these huge commitments with caution.

Wendy Cutler (9:11)

I think it's easy to make a pledge and it's easy to come up with big numbers. But time will tell if these investments actually materialize. Many will, but I suspect some won't.

Waylon Wong (9:24)

So in all these trade deals, how the spending is done varies. For things like Argentine beef, that's just changing the rules to motivate private businesses. For deals with countries where the state is more hands on, like China, it might involve the government directing state owned enterprises to buy goods like soybeans. And for the investment pledges involving mixed economies like Japan and South Korea, the deals are kind of this hybrid blending carrots, sticks, persuasion and those press releases with the big numbers.

Darian Woods (9:56)

If you have a question for us, you can email us@indicatorbi.org or if it's more of a comment, leave us a review in your podcast app. This episode was produced by Koopa Cats 4 Kim with engineering by Robert Rodriguez. It was fact checked by Sierra Juarez. Cake and Cannon edits the show and the indicator is a production of npr.

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