Michael Froman on the New 'Polyamorous' Global Trading System

SPEAKER_2 (0:02)

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Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:22)

And I'm Tracy Alloway.

Joe Weisenthal (0:24)

Tracy, you know, we're several months, I guess like five months or so, according to September 16th, five months or so since Liberation Day, since the trade war started. By and large, the world is still kind of working, right? You can see its effects for sure in certain categories and so forth. But by and large, I don't think the contours of the economy look that much different than they did say in March or April.

Tracy Alloway (0:47)

Look, I'm still missing my auction item that's supposed to be mailed from the Netherlands, so it has affected me directly.

Joe Weisenthal (0:54)

What happened with it? Wait, wait, say more.

Tracy Alloway (0:56)

Say more about it. Okay, so I won something from a Dutch auction house and they were supposed to mail it, in-house shipping, and instead of mailing it, they sent out an email saying that they can't mail it because everyone's trying to figure out the new tariff schedule and customs and things like that.

Joe Weisenthal (1:11)

That's annoying.

Tracy Alloway (1:12)

I still haven't heard from them.

Joe Weisenthal (1:13)

But it still feels like something happened. There was some rupture, hard to imagine going to a March 2025 world again, but also hard to imagine going to a pre-Trump one world ever. It's hard for me to imagine that in my lifetime, that there will ever be a 2015 style trading relationship between the US and China. Well, I could be wrong.

Tracy Alloway (1:38)

Never say never, but-

Joe Weisenthal (1:40)

It's just hard for me to see at this point.

Tracy Alloway (1:42)

At this point, it's not a single administration thing, right? We've had Trump 1 and then Biden continued a lot of the tariffs and even added some new ones, and then we have Trump 2.0, which is arguably going even harder on China. It does seem like at least a durable trend, not a flash in the pan.

Joe Weisenthal (2:00)

As we've discussed, you mentioned the fact that Biden was a continuation, arguably an expansion of Trump 1, particularly with some of the export restrictions on technology. This is one of the rare trade rethinking. The global trading system, whatever that means, is one of the rare areas of bipartisan consensus in DC, as has come up in many episodes.

Tracy Alloway (2:23)

That and housing.

Joe Weisenthal (2:25)

That and housing, right. That housing is very expensive. We really do have the perfect guest, someone who has a very big picture view on trade, someone who has been directly involved in trade negotiations, someone who remembers the sort of pre-Trump one.

Tracy Alloway (2:41)

The long, long, long ago.

Joe Weisenthal (2:42)

The long, long, long ago global trading system, and who could talk about whatever remnants of that are left, or even maybe who can explain to me what the global trading system was. We're going to be speaking with Michael Froman. He is the president of the Council on Foreign Relations, and he was the former US trade representative during the Obama 2 administration, 2013 to 2017, has continued to write a lot about this topic. So Michael Froman, thank you so much for coming on Odd Lots.

Michael Froman (3:11)

Thanks for having me.

Joe Weisenthal (3:12)

Absolutely. What does the US. Trade Representative do? You had that job. I actually realize I don't really know.

Michael Froman (3:18)

It's a great job. It really has the function of negotiating trade agreements and enforcing US trade rights under previous agreements.

The reason I love the job is that it combines high diplomacy, sitting down with ministers, presidents, prime ministers of other countries, trying to reach agreements with having to have a really detailed understanding of elements of the US economy. I mean, I learned more from American farmers teaching me the 500 things you can do with a molecule of milk and how they manipulate a molecule of milk to circumvent trade restrictions and get around tariffs. You export it as butter or as whey or as low-calorie powder or whatever.

Joe Weisenthal (4:04)

This is a whole episode right there.

Michael Froman (4:07)

But that's only one example of the literally thousands of issues you have to learn as US trade rep to be able to sit down with your counterparts in other countries and negotiate agreements.

Tracy Alloway (4:16)

Can you give us an idea or a sense of the average negotiation? What exactly is the process? Like, do you meet for the first time in a designated room somewhere? Or is there prep that goes into these? You're exchanging emails. What exactly happens?