Luke Vargas (3:02)

Meanwhile, Chinese competition has been a growing headache for European carmakers, but now two major players are teaming up to try and push back. Ford is engaging France's Renault to make a pair of small EVs and maybe a van down the line to bolster its European lineup. Ford's accounted for just over 3% of new passenger cars sold on the continent this year, down from over 7% a decade ago.

Luke Vargas (3:32)

Well, let's keep the focus on China as the country has hit a major trade milestone, achieving a $1 trillion trade surplus in goods that is in spite of US tariffs meant to dent Chinese exports and which have instead seen products redirected elsewhere, including to Europe, where a pair of leaders are now sounding the alarm and hinting at new restrictive measures of their own. Joining us from Beijing is our China bureau chief, Jonathan Cheng. And from Berlin, we've got global economics correspondent Tom Fairless with us as well. John, let me start with you. Talk to us about this trillion dollar goods surplus figure. What does it represent?

Jonathan Cheng (4:11)

Obviously, what it means is that they're selling far more to the world than they are buying from the world to the tune of a trillion dollars this year. This is obviously not something that is necessarily looked upon as a good thing in other countries, particularly in the White House, where President Trump has long had a problem with deficits, especially with China. But, you know, this is US China thing, this is a Europe thing. This is a whole world thing. This is China just making a lot more and selling a lot more to the world than they're buying.

Luke Vargas (4:40)

Yeah. And it would seem putting a target on its back in the process. And we should note that this trillion dollar figure is actually probably going to be higher when 2025 is all said and done because it just covers the first 11 months of the year. Tom, let's look at Europe, the EU among the places where Chinese shipments have been increasing quite dramatically this year. They're up 15%. That has evidently attracted the attention of leaders in and Germany who've been making some big comments in recent days.

Tom Fairless (5:07)

Yes, that's right. The French president, Emmanuel Macron, recently said that the trade balance with China is unsustainable and he raised the prospect of tariffs, of European tariffs against Chinese products. The Germans have been more cautious. And I think there is a kind of groundswell of concern that's coming especially from businesses, from German businesses that are being hit directly. The core of German industry is being threatened now by China because China has moved up the value chain Germany escaped the first China shock that sort of rattled the US economy because it produced higher end goods and it produced the machinery that China needed. But now China doesn't need Germany so much anymore because it produces all the stuff itself. The German China shock could be even more severe than the US China shock because for the US it wasn't the core of the US economy, it was furniture and toys. But machinery and cars is really the heart of the German economy. So German industry has really rattled and lobbyists are speaking out more and more for tariffs in br.

Luke Vargas (6:08)

What is the chance we might see Beijing and for instance, these European countries reach some sort of mutually agreeable solution here? John, I noticed Emmanuel Macron saying the goal is to get China to take measures to curb its advantage. Is there a reason China might be amenable to that?

Jonathan Cheng (6:24)

Certainly, I think the view in Beijing is to say, listen, we're playing by your rules. The whole idea is that those who can make certain products more competitively than others should make them and sell them to other countries. That's what we're doing now. You're going to penalize us because you don't like the result. But I do think that when you look at the geopolitical chessboard around the world, China really regards the US as the main rival adversary, however you want to put it. And in that scenario, Europe is actually someone that China wants to bring onto its side. So you could see a scenario where China looks at Europe and sees perhaps a tactical reason for wanting to extend a lifeline or go a little easier on Europe when it comes to trade.

Luke Vargas (7:07)

And Tom, for Europe, what's the chance that, I don't know, getting a bit more defensive in their dealings with China would help their domestic champions. They've tried to boost them up for a while to no avail. Is there a reason this could be successful here where it hasn't been in the past?

Tom Fairless (7:21)

I think some kind of deal either on the currency that sort of maybe if China agreed to allow the yuan to appreciate or on some kind of tariffs against certain products could buy time for European industries. From the European perspective, there seems to be a growing sense that they're going to lose this battle, that for large parts of the world, expensive German products will not be competitive anymore and that they have to climb the value chain. They have to focus on the really the highest end manufacturing goods and also probably refocus on the European market. Probably markets like India and Brazil are maybe lost in future because China is just too dominant. So some kind of of agreement with China could buy time. I think one thing that the Europeans would like is if the Chinese were to build more factories in Europe and to share some of the technologies, it would be a sort of reverse of what European and US Companies were doing in China where they were sharing tech. It would be China coming to Europe and sharing tech. The question is whether China would accept, and there's some question about that.

Luke Vargas (8:27)

John Cheng is the Wall Street Journal's China bureau chief and Tom Fairless, our global economics correspondent based in Berlin. John, Tom, thank you both so much.

Jonathan Cheng (8:35)

Thanks for having us.

Luke Vargas (8:36)

Thanks, Nick. Coming up, Jamie Dimon puts himself forward to help defend American tech from foreign adversaries. We have got that story, plus a spin through the day's market news and a preview of a big election in Miami after the break.

Luke Vargas (8:55)

Millions of players, one world, no lag. How's it done? AWS is how.

Luke Vargas (9:05)

Epic games turn to AWS to scale to more than 100 million Fortnite players worldwide so they can stay locked in with battle tested reliability. AWS is how leading businesses power next level innovation.

Luke Vargas (9:27)

Jamie Dimon has announced that he's launching a $1.5 trillion initiative aimed at bolstering American SEL self sufficiency in critical industries including rare earths and AI. The JP Morgan CEO says he wants to protect America from potential foreign adversaries and is bringing together a list business leaders, politicians and military experts to advise the $4.6 trillion bank on the so called security and resiliency initiative. The elite advisory council includes Amazon founder Jeff Bezos and former Secretary of State Condoleezza Rice. Dimon has also poached Todd Combs, One of Warren Buffett's handpicked advisors, to manage a $10 billion internal fund to invest in critical American supply chains. In other markets, news the Fed is kicking off its final rate setting meeting of the year with a cut widely expected tomorrow. A US Jobs market update is landing today in the form of October's JOLTS survey, which covers job openings and labor turnover. Shares of PepsiCo will be in focus after the beverage maker agreed to trim its as part of an agreement with activist investor Elliott Investment Management. And this evening, President Trump will lay out his plans to fight inflation at an event in Pennsylvania. That's after he asked advisors in recent days to look into lowering beef prices.

Luke Vargas (10:53)

And finally, Miami residents are voting in a runoff mayoral election today that's widely being seen as the latest referendum on President Trump. Journal reporter Arian Campo Flores says that while the candidates have TR to highlight local issues like affordability, voters have also been focused on Trump's policies on immigration and the economy.

Arian Campo Flores (11:15)

The race is a runoff between the top two vote getters on November 4, the Democrat Eileen Higgins, who is a former county commissioner, and the Republican Emilio Gonzalez, who is a former Miami city manager. And it has increasingly become nationalized in the wake of recent elections, including the gubernatorial elections in New Jersey and Virginia, as well as the mayoral race in New York City. Democrats came out of them with a jolt of momentum, and so a win in Miami would give them another boost ahead of the midterm elections next year. It would also be significant because Miami hasn't had a Democratic mayor for roughly 30 years.

Luke Vargas (11:58)

Ariane explains that despite Miami being a Republican stronghold, Trump's immigration policies have come under growing scrutiny by the city's large immigrant population.

Arian Campo Flores (12:07)

There was a recent poll that was done for the Miami Herald that found that even though Trump had 46% approval rating in Miami Dade county, voters were less enthused by some of his administration's policies. For instance, only 35% supported the administration's efforts to end temporary protected status for Venezuelans. And only 15% agreed with this decision to hand over land owned by Miami Dade College to be used for a trunk presidential library.

Luke Vargas (12:38)

Polls in Miami are open until 7pm Eastern. And that's it for what's news for this Tuesday morning. Today's show was produced by Hattie Moyer and Daniel Bok. Our supervising producer is Sandra Kilhoff and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show and until then, thanks for listening.

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