Trump Says He’ll Meet Xi Twice More This Year

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News. This is Bloomberg Businessweek Daily. Reporting from the magazine that helps global leaders stay ahead. With insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily Podcast. With Carol Masser and Tim Stenebeck.

We're all focused on geopolitics, specifically this first part when it comes to the relationship between the US and China. President Trump said he would meet again with Chinese leader Xi Jinping in November following what he said was a successful summit in Washington. Watching all of this closely, I don't think she was at the state dinner last night.

Maybe she was.

Either, maybe. Jenny Welch, Bloomberg Economics Chief Geoeconomics Analyst. She joins us from our Washington DC bureau. Jenny, were you there? I didn't see any of the pictures with Jensen or Elon.

No, sea bass isn't really my thing.

So, okay.

That is so interesting. I'm glad you went there. I think like the last thing I read before I went to bed last night was the menu. Yeah. I love this stuff. And, and, and a lot of thought goes into this and they wanted to highlight cuisine from the United States, but give, um, what they said was a, um, nod.

Yeah.

Like a, a nod to China. with the way that the food was presented. Seabass was the main course. There was a lot of other stuff in this three-course meal. How do we read into that part.

Of the dinner?

I won't proclaim to be an expert on the culinary decisions. I do think they had hot scallion oil that they kind of embedded into some of the meals as a way of paying tribute to Chinese cuisine. I did live in the area of China that Xi Jinping is from, and I can tell you that food there is delicious, but it didn't seem to be fully reflected in the menu that they had. The level of spice that I'm not sure is comfortable for President Trump, but all optics around the dinner and the broader summit are rather positive.

I think the question is, to bring it back to the culinary theme, is was the beef really there? What was the substance behind the conversation that were happening?

Substance, right?

Like a lot of pomp and circumstance, but was there a lot of substance that came out of this? Or is it, Jenny, just that these two leaders are talking is important?

That's certainly, I think, how the White House and in particular President Trump would frame it, right? He sees his role in this relationship as being the stabilizer, as having a good relationship with President Xi despite the rivalry and using that to provide kind of a ballast for the competition. But what I would say as someone who has staffed these kind of summits before is, yes, that's true. And it is difficult to get many deliverables out of a relationship between countries that don't get along in many ways.

But this is a state visit. That's a different caliber of summit. And the last time that President Xi Jinping made a state visit, which was during the Obama administration, so over a decade ago, there were a number of concrete deliverables. Granted, not all of them came to fruition, but state visits are usually used to extract deliverables. And in particular, when the U.S. is hosting deliverables that matter to the U.S. national interest.

Like something regarding soybeans? The president said, he says, I think our farmers will be very happy. And the only thing I can think of is the soybean purchases. Is that going to happen?

Possibly soybeans.

He could also be referencing that the board of trade that was established previously between the U.S. and China has been discussing bringing down tariffs on a select number of what is considered non-sensitive goods that might include U.S. agricultural products as well as LNG. They, I think, are looking to announce something on that early next week. But yes, you point to a really good question, which is what is the status of Chinese purchase agreements? The fact that we haven't gotten any written affirmation from either side on China falling through, some of which that only the United States has confirmed Beijing has signed up for in May.

We don't even have necessarily confirmation from Beijing that they are planning on doing these additional agricultural purchases that Washington said they would. So there's a lot of ambiguity there. Granted, the U.S. hasn't put out its readout yet. So maybe some of these details are still forthcoming. The Chinese put their eyes out last night. There wasn't a huge amount of detail there, and certainly nothing about these purchase agreements.

Hey, you know, two things that I think about, Jenny, that could kind of bring the U.S. to our knees to some extent, and I think about this in a world where we realized Iran had a great tool with the Strait of Hormuz when it comes to energy, world global energy supplies. But I'm thinking specifically about rare earths, our access to it, and also kind of this AI race where many would argue we need collaboration. It's something, these two areas, we're going to dig into both of them in just a moment over the next half hour or so.

What did we get, if anything, on those fronts?

So no details yet on what, if anything, was discussed on critical minerals. But as you mentioned, that's definitely hanging over the summit. In fact, that's probably the reason that the trade truce that the extension that was announced when Xi Jinping first arrived on Wednesday night was only extended by two months. It's probably because Washington in particular feels that Beijing isn't living up to its side of it.

And critical minerals is the most important thing there. It's really cast a shadow over U.S. policy towards China. It's a huge point of leverage. On AI, again, not clear what they discussed. The Chinese readout indicated that they did share some views on AI safety, but we've heard from both leaders a real reluctance to consider slowing down their leading AI companies, given the rivalry and given the potential gains from AI.

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

We have seen oil dip lower. That as a result of these talks between the U.S. and Iran and hopes to reopen the world's most important energy shipping route, we're progressing. I mean, Tim, this is something that's been just driving so much of the trade this week across assets.

Yeah, I mean, look at the relationship between yields and oil prices. We highlighted that just yesterday. I want to bring in Mekala Krishnan, partner at the McKinsey Global Institute. Mekala joins us from Boston.

The U.S.

War with Iran exposed a lot for a lot of people, I think. I mean, there were some folks who were, I never forget this, like the first week, it was like, wait, this is the worst case scenario that we were supposed to pencil out when we were at job interviews. Like, what happens if the Strait of Hormuz closes? or traffic is impeded in some way. How are we still such a world that is so dependent on fossil fuels?

Thanks, Tim.

Great to be here with all of you.

I think the important thing to remember about the world and the energy system as it exists today is it's a massive physical entity that has been optimized over centuries to give us the production and consumption of energy that we have. If you think about oil and gas pipelines, for example, they extend the distance from the Earth to the moon.

And back twice.

We have 1.5 billion vehicles on the road that are primarily internal combustion engine based. We produce 7 billion tons of industrial materials like steel and cement, all with fossil fuels today. So it's important to recognize that transforming the system is hard. It takes time. I think it's also important to recognize that the energy system to this Strait of Hormuz crisis has been much more resilient, at least so far, than had been anticipated at the very beginning.

Of course, with real.

Limits, but this system has proven to have better shock absorbers than many had expected.

So, exactly, right? And I think about how we saw the U.S. was actually in a pretty good position. But I think about how this U.S. war in Iran, Tim talked about us still being very largely dependent on fossil fuels. But we did see U.S. energy independence. When it comes to dependence on fossil fuels, that includes China, who is moving very aggressively when it comes to alternatives.

And then I think perhaps most of all, we saw.

How Iran can bring the world to its knees.

So you guys have a report out that's called Aftershocks.

And I'm just curious how you think about what is life after we get through this crisis and what is the global energy market look like?

Yeah, absolutely.

So as I mentioned, in many ways, this shock, we've been more resilient than we anticipated. And that's largely because of buffers that had been put in place on the backs of past crises, shock absorbers we'd previously built. Things like inventories, things like these bypass pipelines that have diverted flows away from this trade. But we've also realized these shock absorbers have very real limits. Inventories, the ones we've drawn down the most, like the U.S. Strategic Petroleum Reserve, all-time lows, many European product inventories at five-year minimums. We've seen the refining system really affected as well. So we've realized that these shock absorbers are finite and can thin.

They've also been very uneven across countries, countries like India, where I'm from, seeing real supply shortages. We've also recognized that it's not just about Hormuz. About 95% of the world lives in a region that is reliant on imports in some way, even in the United States. Australia, the world's largest gas exporter, still relies on diesel imports. And so this imperative for energy security extends well beyond Hormuz.

Makela, one thing that we've talked a little bit about is the idea of Iran's power over the strait. not being something that is indefinite. We've already seen a higher reliance in the East-West pipeline in Saudi Arabia, for example. I'm just curious about what you view as the timeline that Iran continues to have a grip on this waterway.

Yeah, it's a very interesting question.

We did some number crunching, as you can imagine, on what are all the resiliency measures that countries are starting to put in place in response to this crisis, not in the short term, but out to 2030. And what we find is that if you think about all the announcements that countries around the world have made, for example, for new oil supply, new coal conversion capacity. So this is converting coal to chemicals instead of using oil as an input, as well as additional bypass pipeline infrastructure that has been announced. All of these together, by our estimate, could by 2030 offset about 70 percent of the flows through the strait.

So that's the good news.

The challenge, however, is that it's not inevitable that all these announcements will actually translate to implementation.

They come with a cost.

And what they do for the most part, because most of this 70% offset comes from bypass pipeline capacities, they offer a diversion from the strait. They don't offer displacement of Gulf oil because Gulf oil still sits very low on the overall production curve.

Mikla, we only have about 30, 40 seconds here. What does this mean for alternative energies? Because one of the things former Secretary of State John Kerry said at Bloomberg Green this week pointed to China. And when it comes to alternative energies, they are all in and building and spending aggressively.

What do we need to know on that front? And if you wouldn't mind, just quickly.

Yeah, alternative energy, definitely an important response. And we've seen many countries do this. What we find, though, is that alternative energy comes with technological limits. By our estimates, it could displace about 30% of overall oil consumption, oil and gas consumption from an energy security standpoint. But in some instances, the technologies are not there. And implementing them at scale is going to take time. It's not going to happen overnight.

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

The 81st U.N.

General Assembly underway. High-level meetings have all been held this week. Presided over by U.N. Secretary General Antonio Guterres, whose term ends on December 31st. We've got one of the leading candidates to become the next U.N. Secretary General. She is Carolyn Rodriguez Burkett. She's Guyana's permanent representative to the United Nations, and she is joining from the UN Rose Garden. Ambassador, thank you so much for joining Tim and myself here on Bloomberg. You and all the candidates know all too well that the eventual choice in terms of who leads the UN next is dependent on whether a candidate can avoid opposition by the US, China, Russia, France, and UK, any of the five veto-wielding permanent members. How are you

thinking about those five members and what their role is for the UN going forward?

Thank you, Carol.

The discussion so far with the five members that you mentioned of the Security Council and indeed the entire membership has been really, really good. I think it's important for us to have a close collaboration, should I be the Secretary General. These are very important countries. Of course, all 193 members of the UN are important, but these are five important countries and the structure of the Security Council give them certain privileges. And so it's important for the Secretary General to be able to navigate the sort of chasms when those are there. with the P5 members, and this is what I intend to do. As you know, I've served on the Security Council over the last two years, and I've worked very closely with the P5. And so,

in some respects, they know me and they know how I operate. I held the position of leading Guyana's delegation, so I held the presidency twice. Of course, my country held the presidency, but I had to navigate some of those... I would say difficult moments during that time. And they've seen that as well. So I look forward to it should I be appointed.

Ambassador, League Security Council results put you at around second place for the race for Secretary General. What are you seeing as the biggest hurdles for actually getting to first place? And how do you plan to get there in the coming months?

Tim, it's up to the Security Council at the end of the day to recommend to the General Assembly. And I have outlined my vision. And over these last weeks, I've visited several capitals. I've spoken with all of the authorities of the 15 members. I've answered their questions. And so they know what I stand for, what I bring.

At the end of the day, I think you need a secretary general that, apart from competence, that would be able to build bridges, that would be able to bring people together, but also that will have the energy and the versatility and the discernment that you need in this chief administrative officer, because that's the description in the charter of the secretary general.

Ambassador, one of the things that we think about here is that many have described the secretary general position as a bit of a thankless job. So I guess the question is, why do you want it?

My life, Carol, has been about serving. And I approach each one of those positions of service that you do not do it for tanks. But if you do get tanks, it's a bonus. but you do it for service. And I believe in the United Nations. I believe that it is a force for good. I believe it has all these challenges, but that we could make it better. And this is my approach to it. So not looking for tanks, not looking to display any ego, but just to make sure that we solve some of the issues that we have, working very closely with member states, especially when you think about peace and security and the challenges that we face on that pillar, but also development and human rights. And this is how I would approach it.

Well, you know, it's interesting too, and I'm listening very, I think both of us are listening very closely to your words. You mentioned service, you mentioned delivering. You have said, though, the UN's problem is not a lack of commitments, but a failure to deliver. And what is the one thing that the UN does today that you would stop doing as Secretary-General?

I have to look at where there are duplications. We have to stop duplications. And where there are overlaps, we have to streamline that. We have many agencies dealing with development. UNDP, FAO, WFP. Well, WFP more on the humanitarian side. But we have several of these agencies dealing with development. And when you talk to the ministers and the leaders on the ground, they want to see more. more of the delivery on the ground.

And so we have to focus on that to make sure that we have a very good ratio of what we do in New York and what we do on the ground. If we look, for example, at the budget, the regular budget, Quite a bit of that go into staffing. So we have to have a good balance between what goes into staffing, what goes into programming. And so these are some of the things that I would look at in terms of how we deliver on development, but also on peace and security. The Secretary General has certain tools at her disposal, good offices, process, mediation, and I would want to offer those tools to the parties to conflict right now. Tim and Carol, we have the highest number of conflicts since World War II, and so we need

to make a dent in ending and preventing conflicts. The world is waiting for some good news on this, and I intend to work very closely with all, including the Security Council, to see how we can move the needle on that. I'm not oblivious that some are very difficult, but the UN was not made for fair weather, and we have to try.

Yeah, look, I think it's fair to say, as we say all the time, a very complicated time when it comes to geopolitics, given what happened in Venezuela, what's going on between Israel and the U.S. and Iran and Russia's invasion of Ukraine, among other conflicts around the world. I'm curious, though, about your position coming from one of the U.N. 's smaller member states. Does it give you maybe a fundamentally different view of of what the UN does than someone who comes from a major power or a larger UN agency?

The UN has over 100 small states. And one of the characteristics of small states is that we have to think global. We have to think big because our destinies are tied together. And the UN Charter and international law and adherence to that Basically, it's our only guarantee for security and protection globally. And so that's an outlook that I bring from a small state. The second point is that small states do not have any big dog in any big fight, so to speak. So we are about bridge building. We are about reaching out. And this has been the story of my life, both as foreign minister, but also my service here during the last six years as permanent representative of the United Nations and on the Security Council. So perhaps it is a time for someone

from a small state. Should I be appointed, I would be the secretary general from the smallest state ever. And I also come from a country that was built on the backs of people who came from different continents, plus our indigenous people. So we always had to work together to get along, to have unity and to have harmony.

And I bring that approach to the Secretary General's positions. should I be appointed.

Just got about 30 seconds left here.

You know, we have spent all week watching presidents and leaders come to New York, give speeches, then go home.

While wars, the UN has been unable to stop, continue.

What is your argument to someone who is watching us right now or listening to us right now who says, what is the UN actually for anymore?

Well, wars have traditionally ended with diplomacy. And so we have to protect diplomacy and we have to protect multilateralism. And one takeaway that I have from this year's General Assembly Tuesday morning, as I sat in the General Assembly, it was a very full hall. I've never seen so many people here gathered at the UN in the six years that I've been a permanent representative here. And that, I take away a positive from that. Even with all the criticisms that we find against the UN or we hear against the UN, this is still the place where leaders come to talk about the challenges, but also to talk about the world they would like to see. And we have to encourage those discussions. But we have to

go further than that to bring actual solutions on the ground. And this is what I intend to do.

Stay with us. More from Bloomberg Businessweek Daily coming up after this. At that state dinner last night, executives including Tim Cook, Jeff Bezos, Satya Nadella, Sundar Pichai, Jensen Huang, Lisa Su, Mark Zuckerberg, Sam Altman... Among others were at the White House. I didn't even mention the leaders of the big banks.

It's like a tech super party.

Yeah, yeah.

And there were more business leaders there, too.

Isn't it fascinating that normally you would lead with the bank leaders?

Yeah.

And I feel like in years past when there were meetings between the U.S. and China, you would lead with the bank leaders. But it's all about tech.

And it's all about AI because this is the week that we saw Sam Altman and Dario Amadei of Anthropic urging world leaders to work together on AI in an extraordinary appearance before the U.N. Security Council. We played that for you and their comments for you here on Bloomberg Business Week Daily. Let's get to Rodina Cesari because she's a longtime investor in this technology. She's founder and managing partner at Glasswing Ventures. She's a go-to voice for us on the evolving AI story. Rodina, good to have you back on the program. I don't think we've had a chance, even though we speak to you quite a bit, I don't think we've had a chance to talk to you since the latest alarm has been sounded by, oftentimes in

the past couple of years, it has been Dario Amadei, but I think it hit sort of fever pitch just a couple of weeks ago. I'm just curious how you're looking at the way this is playing out. And if you do indeed, as an investor in this technology, think it's as dangerous as some folks out there do.

Well, happy Friday on that note. It's an interesting time because large model providers like OpenAI and Anthropic are not only coming out and expressing views around safety, but in fact, those views are informed by activity that their agents are performing that is not in alignment, if you will, with humans or the full sort of governance around the tasks.

Most recently, You know, OpenAI had an agent in Australia that went into the Australian healthcare system to complete what was otherwise a very benign task. But in seeking to fulfill its task, i.e. it was doing its job, it actually entered systems that were, you know, violating the privacy of Australian citizens. So right there and then you have an unintended outcome for what is otherwise a very.

Go ahead.

I was going to say, it wasn't just that. I think also the Australian leader was not happy with how he was alerted timeline-wise.

Right, exactly.

And I think that was.

And that's part B. Exactly.

Yeah.

So, you know, it's sort of interesting because we are all familiar with incidents and, you know, an incident attacks. But that applies usually to the old world, the rise of what I'm going to call unintentional agent attacks. we don't have an incidence response mechanism for them yet. And further to that point, we also cannot go and do the old-fashioned patches that we used to do for these types of attacks. So internally at Glasswing, we have been talking as to whether this is a SolarWinds moment for agents.

And it's been interesting to hear both Sam and Dario take the approach of we need to slow down But perhaps before we try to, or along the lines of trying to get world leaders to collaborate and cooperate, what about getting models for the first time in their undertaking as new ones emerge to incorporate security as part of their first principles? See, in tech, going back to the beginning of times, we have never started with what is safest and especially in software we've always started with what fulfills the goal that i'm developing the software for and then security was a third party provider that patched we can't get away with that any longer so we have to go back to first principles at the models that

are coming about and incorporating governance security and honestly human alignment.

Rudina, you mentioned SolarWinds.

You go back to 2020, you're talking about the SolarWinds Orion hack. It was a major hack. It was on an IT infrastructure management company. It was, you know, state-sponsored hackers. But it just reminds us the problems and, you know, what can go wrong. And this is what we're trying to figure out. I mean, how did you— I don't know— U. S.

and China— got to watch what they're doing. It sounds like President Trump has a perspective and President Xi had a perspective of collaboration.

President China's like, we got to just kind of keep going and.

At rapid speed. How important is it that these two nations figure out how to work together? And can they really trust each other? I mean, if they say, yeah, we're working together, I mean, how do you set up guardrails around that to prove that they really are working together?

Very, very difficult because, you know, the technology in itself and AI is extremely powerful. It's not inherently good or bad. It's just very powerful. So then who are the actors driving it? And, you know, unleashing these agents will matter. And to what purpose? And by the way, it's a two-part question. One part is, do humans have bad intentions?

And secondly, do agents end up leading to unintended consequences that could be very, very meaningful? Now, if you compare the US and China, it's interesting because a lot of the Chinese AI companies have actually taken an open source approach. So they are disclosing their weights and measures as opposed to the U.S. that has sought to preserve its advantage by maintaining the models or at least their weights to be largely proprietary. So one could argue that the Chinese models are sort of explainability and understanding on how they work is higher than what we have with US models, the flip argument would be that a lot of the US models have regulations, sort of at least we know what our guardrails are around usage of data and right

and wrong, and that may not be the same standard in China. hard to get alignment in the approach of how these models are coming about and leave alone then trying to get the leaders to, you know, especially if they're on opposing ends.

Rudina, just to wrap up, every day, every week, there's a ton of headlines that are coming at all of us. Our team on the ground here covering AI are pretty incredible. Here's just a couple of headlines. Microsoft abandoning its personal AI chatbot race with a reboot of its co-pilot program. And that, our reporting says, is probably coinciding with the arrival of Meta's Muse, that personal assistant that has given A ton of market value to meta shares just this week. Jev, an AI model that can't chat, taking on bigger rivals.

You have Elon Musk aiming to double Colossus' twos NVIDIA chips by year end.

This is its own XI creation.

And then you have a startup, AI video startup Higgsfield, says it tops a billion dollar run rate. And then there's a chat GPT for doctors, open evidence.

I mean, there's just so much. One thing that sticks with me.

From that conversation we had back earlier this year at Bloomberg Invest is that when we think about the large language models, that there's going to be a commoditization element to this, that they're not all going to lead and that there's going to be more verticals.

That are important.

Just get about 40 or 50 seconds here.

How should we be reading these headlines?

And is it necessarily the right assumption to assume that OpenAI or Anthropic are going to be the companies that stick around for 10 or 20 or 30 years?

All I will tell you is, in fact, I was having this conversation with Bola Olusanya, the chief investment officer of MacArthur Foundation, very tech-forward thinker. And we were both saying that vendor lock-in for the big model providers is absolutely not a done deal. In fact, all of us, as we stand, big and large enterprises can swap between models.

almost without any sort of barriers. So these players will have to move up market, either in verticals or continue this race of model development and performance and deploy where the highest and latest sort of cutting edge performance is most valued.

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Trump Says He’ll Meet Xi Twice More This Year

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