■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: December 19, 2024 (Thursday)
■ Talk: Cha Young-joo, Director of the Institute of i-Asset Economics, Professor Lee Jung-hwan of Hanyang University School of Economics and Finance
* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.
◆ Reporter Cho Tae-hyun (hereinafter referred to as Cho Tae-hyun): It's the story of the economy that moves the world. It's time for the world economy. We have two experts in the studio today as well. First of all, director Cha Young-joo came to the Ai Asset Economic Research Institute. Please come in.
◇ Cha Young-joo, Director of the Ai Asset Economic Research Institute (hereinafter referred to as Cha Young-joo): Yes, hello.
◆ Cho Tae-hyun: Professor Lee Jung-hwan is also at the university's School of Economics and Finance. Please come in.
■ Professor Lee Jung-hwan of Hanyang University School of Economics and Finance (hereinafter referred to as Lee Jung-hwan): Yes, hello.
◆ It's been a long time since we met as a whole group. Jungkook is not helping us. Anyway, I'd like to say that it's nice to meet you like this. Let's get into the real story. I keep chewing my tongue whenever I talk about Mar-a-Lago Resort a lot recently. Mar-a-Lago Resort. What the hell is this?
◇ Cha Young-joo: It's a resort located in Palm Beach, Florida. It was originally made on the Gallagher side, which we like, and used it as a winter vacation home for the president of the United States, but Trump took it over from the government in the 1980s. At the time of the acquisition, we bought the one that came out at 20 million dollars at a very low price for 7 million dollars, so anyway, isn't there 2nd generation ahead after Trump's 1st generation? In the meantime, I'm using this as my private office. His wife is now living here, so she declared that she would stay here for a while without going into the White House. It's a private residence and office that the Trump family likes, but her current role is like a White House where she meets many people as an elected president. I can tell you that I'm doing a little bit of an early White House role.
◆ Cho Tae-hyun: In Korea, it would be like a transition team office, but it's said that the threshold is about to wear out. I guess a lot of people come to see me.
■ Lee Jung-hwan: The biggest news recently came from Chairman Son Jeong-ui, and then everyone has to go. That's why people go there often. Elon Musk is always mentioned, so in the end, the transition team will set economic policies next time, and there will be a lot of transformation now when setting economic policies in the U.S., so there are many people who are going to be estranged, and in the end, there are many people who want to go with them, so there is no choice but to go a lot now. And especially the news recently, as I said earlier, Son Jeong-ui, chairman Masayoshi Son, will visit and spend 100 billion dollars coolly. I think the biggest news was that I would spend 100 billion dollars coolly if I said this. I think it was a situation where people received a lot of attention because they came out at the press conference together and performed for 100 billion dollars.
◇ Cha Young-joo: I'm not just going to go. Because it's a winter vacation home in Florida, it's cold right now. So, I personally think that there may be CEOs who say they are going to meet Trump and take a break from a warm place.
◆ Cho Tae-hyun: Florida has a nice weather. If I have to explain one thing, I'm familiar with the name Son Jeong-ui, but I didn't want to say it under the name Son Masayoshi because he's not from Korea. No matter how you call me, you can do it comfortably. During Trump's first term, Chairman Lee Son will actually invest $50 billion and create 50,000 jobs. I made a promise like this, but did this actually come true?
◇ Cha Young-joo: It's not confirmed because these are not situations that need to be written accurately. But if you look at the media, now that I'm talking about 100 billion dollars, Trump came out of the press conference you mentioned. Isn't that 200 billion dollars? Chairman Son Jeong-ui will consider it. It's a friendly atmosphere while laughing at each other. In the first period, he said he would invest $50 billion, but if you look at what's being said now, I think that the actual investments made in things like Uber and WeWork are part of this. So, in a way, it seems consistent because what Chairman Son Jeong-ui does now is not a person who specifically manufactures or makes things. However, during Trump's first term, he said he would invest in some new industries such as Uber and WeWork, and what's being talked about this time is that he would invest in artificial intelligence or future food. That's why the direction of investing is clear and there are parts that anyone can intuitively understand. However, the amount itself can change sufficiently depending on changes in the industry or global conditions. For example, in the case of manufacturing, Samsung Electronics will build a semiconductor factory. How much do you want to invest? This is clear, but we can see that we have a perfect interest in performing for the future.
◆ Cho Tae-hyun: Then in the end, if the interests were right, Chairman Masayoshi Son would have used this money as much as 145 trillion won in Korean money, and of course, he would have done it because he expected something. What did you expect?
■ Lee Jung-hwan: I think there was some achievement in the first period. In addition to the investment aspect, Chairman Masayoshi Son bought a U.S. carrier called Sprint in 2013, and it was about 3rd place and said it would combine T-Mobile, the fourth-largest company, but there is a story that the Trump administration closed the failure of the Obama administration. However, in the end, there is also a structure in which people who have invested can collect the return on their investment. In the end, such benefits are being actively invested in AI through AI investment, and as I said earlier, Vision Fund will make a lot of money by investing in open AI, ARM, and semiconductor design companies and continue to be forward-looking. But of course, some say that they invested in Nvidia and sold it too quickly. Basically, Tencent and the AI industry platform industry are basically interested in things like that, so we continued to invest in these things, and in the case of WeWork, we failed a little bit and spent more than $13 billion, but we failed a little.
◆ Cho Tae-hyun: There's no one in the world who succeeded in everything.
■ Lee Jung-hwan: There are talks about making a lot of money from open AI and ARM with the rest, so you have to invest 100 billion dollars and do other things, such as mergers I mentioned earlier, so after all, it's venture capital, so someone has to buy it to close it. So, it's not like Masayoshi Son can just run this company's ARM, but as an investor, when the value of this company goes up to a certain extent, he sells it again, buys innovative growth companies, especially this vision fund investment strategy, buys several innovative companies, and invests in them. After that, it is said that after one cycle, other industries are moved and these strategies are smoked a lot. In the end, to summarize, these things, that is, they have to improve investment performance and then someone has to buy them, so they will try to benefit from M&A and there will be various expectations. It is also a natural decision to invest in the United States because the US is slow in performance and VC is the best-performing side. I could say this.
◇ Cha Young-joo: We should look at it like this. Chairman Son Jeong-ui is a businessman, and Trump and Trump are running the United States with entrepreneurship, right? The two of them blew "Between You and Me" first. So it's called preoccupation first. So, from President Trump's point of view, I met with Chairman Son Jeong-ui and even dropped off the microphone and performed like this, but it could be a declaration that you have to bring more than this to meet me in the future. And in the case of Chairman Son Jeong-ui, in a way, I think there will be a lot of things that I need to get from the U.S. government, as you said. In that state, he gave a huge gift of 100 billion dollars and wanted to get it. So, Chairman Son Jeong-ui seems to have been trying to get something governmental from President Trump, and President Trump needs to bring this much to meet me through Chairman Son Jeong-ui. That's what I'm looking at. That's why many people in Korea are like that. What is Chairman Lee Jae-yong doing on social media yesterday after seeing Chairman Son Jeong-ui yesterday? There were a lot of comments like, "Should we go and meet?" But Chairman Lee Jae-yong will also feel burdened. Whether I should carry something or not, in a way, I think that's what Trump intended.
◆ Cho Tae-hyun: When we meet like this, the government's behind-the-scenes work will be important, but Japan says we worked hard on these things, but we are sorry that the government's leadership is like that. Another prominent CEO Trump met is TikTok. It's a Chinese SNS. Why did the TikTok CEO try so hard to meet Trump when he said he met your CEO?
■ Lee Jung-hwan: The TikTok ban is expected to be removed a day before Trump's inauguration. This is a bit of a long story. Originally, TikTok sold in the United States, so there was a hearing because of the leakage of personal information, but TikTok had a big accident once. I didn't think it would go all the way to the TikTok ban because it sprayed the personal information of judges and people who oppose it, but the TikTok ban was proposed while doing something very dangerous. The point of banning TikTok is that personal information about individuals in the U.S. can flow to China. Because the parent company is a Chinese company.
◆ Cho Tae-hyun: Doesn't that mean all the servers are over there?
■ Lee Jung-hwan: Yes, that's why personal information could go in that direction. There were many opinions about whether it makes sense after TikTok hit an accident once, but as public opinion suddenly turned around, the TikTok ban was actually proposed. Trump himself was originally in favor of the TikTok ban, but there's a little issue these days. There's a story that the stance has changed a little, so I'm trying to block the TikTok ban. So, isn't it trying to cancel the ban or prevent it in the end? TikTok is saying that selling American TikTok to American companies probably won't be allowed in China. We have no choice but to block the ban somehow. There isn't. So, it doesn't matter if a company called TikTok sells an American corporation to an American company, but it is predicted that it will not be approved in China. In the end, in order to maintain the U.S., the largest market for TikTok, the only way to cancel it or withdraw it from the TikTok ban law is to make fun of it.
◆ Cho Tae-hyun: Can you cancel it if the president cooks it?
◇ Cha Young-joo: Not necessarily. The Republican Party controls both the House and Senate, especially in the Trump administration, so we can't separate the real economy and politics because if Trump wants to get a lot out of this, what Trump is saying is that he won the election by 34% and this is related to TikTok. So in a way, it's a political rhetoric. I'm saying that there's such a person and saying this in a hurry, but from Trump's point of view, it's bound to be a political burden. So I'll try not to talk as much as I can, but who gets more upset the more I get? It's probably TikTok. There will be parts that need to be given out more, so in a way, going to someone who has power right now, doing a town hall, and asking them to solve it, I think it could be another political area. There may be a difference between whether this is personal or for a cause, but from Trump's point of view, there are so many complaints coming in to him, so I think it should be viewed as one of them.
◆ Cho Tae-hyun: Okay. There are many people going around as if the Mar-a-Lago resort is about to wear out the threshold, and then people who were not on good terms with Trump are donating, and there are these trends. In the midst of this, I can see a welcome name. I heard that Shinsegae Group Chairman Chung Yong-jin was the first Korean to be invited to the resort, so why did you receive it for what?
■ Lee Jung-hwan: He says he's going because he has a relationship with Trump's eldest son. I don't think he has a direct relationship with President Trump, but he has a friendship with his eldest son for quite a long time, so he seems to be visiting. However, the positive news is that there are many stories that the second Trump administration will manage the family with the eldest son Trump at the center. This is a bit of an opinion, but some politicians say that Trump is dreaming of becoming a Kennedy family, including the oldest son, Barnes, and the youngest son, so there are continuous discussions that they are trying to form a political family. The youngest son seems to have been going back and forth last year, and the basic thing is that he has a relationship with the eldest son. However, it is a little ambiguous whether President Trump will meet or not, and nevertheless, it is not a bad thing to build friendship if you think that you run a family like the Kennedy family and run a family. You can probably understand that these are things that can be a kind of force in the Republican Party. It's not a bad thing.
◇ Cha Young-joo: That's right. I think you should look at this like this, too. As you said, in the case of Japan, the government is doing these behind-the-scenes work, and there are talks about that now. Unfortunately, the Korean government is not in a condition to devote its capabilities to this kind of work, so from the perspective of some of these large companies, the fire has fallen.
◆ Cho Tae-hyun: There are many things that can't be done just by renting a company.
◇ Cha Young-joo: So now there's talk of companies mobilizing those individual connections, so they're not going through the government, they're going to contact the U.S. through some line of their own. It's seen as part of that. Also, to add a bit to what the professor said, the eldest daughter played a role in the first period, but Ivanka's eldest daughter said she wouldn't do it, and her son-in-law is from the Middle East instead. So, if you look at the Middle East issue, you should rather leave the Middle East issue to your son-in-law and the rest of your sons and daughters-in-law can be in charge of finances, so if you look at those parts, I think you should look at it like that.
◆ Cho Tae-hyun: Okay. As you said, Korea also needs a lot of government leadership policy help, but it can be said that it is a frustrating situation where such things are not done well. We're not the only problem in this situation. I would like to take a look at three countries. First of all, Canada is not in a good situation either. There are reports that the finance minister has resigned, what kind of story is it?
■ Lee Jung-hwan: I think you can say that you fought with Prime Minister Trudeau and the Finance Minister.
◆ Cho Tae-hyun: I heard there were a lot of different opinions on the policy.
■ Lee Jung-hwan: In the end, the finance minister should have a stable fiscal policy because the finance minister is basically a safe house. This is the default stance. It's not swayed by politics, because in general, what Trudeau did now was tend to raise support a little bit by giving low-income people C$25 billion in subsidies and some other welfare benefits.
◆ Cho Tae-hyun: Actually, I'm getting a little behind right now.
■ Lee Jung-hwan: Yes, because he said he's going to be pushed back. Then, the fiscal deficit is too large right now. With more than 62 trillion won, if you do such things in a situation where you have exceeded your goal, it will be a financial problem in the future, so you fought with the finance minister. And then customs duty. This is also linked to customs duty.
◆ Cho Tae-hyun: So it eventually leads to Trump.
■ Lee Jung-hwan: What's going on is that Canada now, so the United States is putting 25% tariffs on Canada, so there's a rumor that they went to Canada and did a town hall. I was thinking, "Does it make sense to lower the price of a town hall?" But now that it doesn't work, I'm thinking about going with retaliatory tariffs. If there's a tariff war, it'll be difficult economically. Considering this, isn't it a worse problem to have welfare policies with fiscal deficits like this? Overall, it is a connected issue, so the finance minister and the prime minister fought and the finance minister was kicked out. So, I think they're saying that the finance minister was kicked out because the direction of the prime minister's policy and the tariffs and financial conditions that the finance minister thought didn't match.
◆ Cho Tae-hyun: I don't know if he was kicked out or kicked out, but there's one more other country. It's hard for us. It's hard. I'm talking about it, but Europe is more difficult. Germany also seems to have quite a lot of political uncertainty, what is the situation?
◇ Cha Young-joo: I think this is also a trend. So, as the professor said earlier, Canada also had the prime minister and the finance minister. This is how it's expressed. The same goes for Germany. The prime minister and the finance minister are at odds. In that way, Germany has a coalition system, and the prime minister is a member of the Social Democratic Party. The Secretary of the Treasury is a Liberal Democrat. So, it's a part of a coalition with each other, but they got into a fight over economic policies. But I don't know if this is normal, but in Canada, there is a tariff problem with President Trump, and in Germany, there is a problem with Ukraine aid and natural gas issues, so how to spend money is an emergency. There was a conflict over this, and the Liberal Democratic Party, which was a coalition, withdrew from the coalition. In the meantime, the prime minister is dismissed again by the parliament. That's why we have to hold an early general election. In the end, in the past, these are parts that can narrow differences, but there are differences between the prime minister and the finance minister about what will happen in the future, and political anxiety is heating up by dividing it between each other. So, it's a good idea to put up with it in a good family, but in the case of the Trump economy, especially Germany, there are parts that cannot be honored in the past, so these things are more prominent and more problematic.
◆ Cho Tae-hyun: Okay. It seems that the more difficult the family is, the more the family members fight with each other. But I think France is similar. That's where the government is on the verge of collapse.
■ Lee Jung-hwan: This is a situation in which Germany has to hold another general election as the new prime minister's no-confidence proposal fell, and France seems to have gone almost the same way. So, the welfare bill is also a problem in France, but the French prime minister is a little bit on the right now because of this social security finance law. The right-wing prime minister tried to do such a bill to manage welfare budgets, but the left-of-center and the left-of-center opposed it, and a bill of no confidence in these things came up. So they're all similar. Because the economy is difficult, we have to do welfare, but because the economy is difficult, if we use welfare, the fiscal deficit becomes too severe, so there are problems like this that we can't use. But we need to resolve this politically, but we are not in a centrist position, but rather toward populism, so we can think of it as continuing to fight while splitting up. Last time, a new prime minister was appointed, but the confrontation between the ruling and opposition parties has sharply different solutions to such welfare bills. Should we help the bad economy or rather save companies by keeping their finances healthy and cutting taxes? Since they are presenting so different answers, you can probably understand that they continue to fight over similar problems in any country. Especially from the perspective of politicians, especially politicians on the left, it is right to save this by fiscal policy, but according to economic theory, such subsidies may be good for a short time in the short term, but there are discussions that the aftermath is greater in the long run. Because transfer income has a lot of problems. The public sector deficit is the same in Germany and France, but the economy is not good, so France also has a huge deficit of 6.1% of GDP, and the eurozone is requesting about 3%, but it is more than double, so you can understand that this is a problem. In the end, the economy is difficult, so the fiscal deficit is large and the fiscal deficit is difficult, so the finance department says it should be reduced, and the government should be grateful to save the company. Politicians have no choice but to do that. It can be said that such things are continuing to lead to confidence votes such as the prime minister.
◆ Cho Tae-hyun: I have to find a solution with politics, but I don't think it's really easy to find a solution because the world view is a different problem. However, if I were to pick the key word among the things I've been talking about over and over again, I can also pick this part of the tariff, but I think there are a lot of concerns about it in the United States. What's the atmosphere like?
◇ Cha Young-joo: The New York Stock Exchange fell very sharply today. We cut interest rates by 25bp, but we're going to cut interest rates twice next year. If the problems here end up with tariffs, wouldn't the U.S. have no choice but to stimulate inflation? So, if you put a tariff on what previously cost 100 won and put a tax on it, if you sell it for 110 won, that's what stimulates inflation. It's such a problem, and when President Trump is only about a month away from taking office, there are talks about electric cars, saying that they will hit tariffs unconditionally regardless of country, and economists are now saying that this can control inflation, which is currently stabilizing in the U.S. If you look at the analysis so far today in the United States, Powell and Trump are going to stick together, I think that's what they're saying now. Before that, it was a little quiet, and Powell's point of view is that the national credit rating you mentioned in France has fallen. Because of this problem. Yesterday, it was a mess with each article, and if we don't compromise to a certain extent, it could end up shaking the foundation. Therefore, Trump is so firm on the tariff issue that none of the Korean people will approve of it, but this part will be a little more difficult.
◆ Cho Tae-hyun: Okay. Tariffs will eventually bring about a huge change. We will continue to check these parts and deliver them to you. So far, we have talked about the global economy with Professor Lee Jung-hwan of Hanyang University's School of Economics and Finance and Cha Young-joo, director of the Ai Asset Economic Research Institute. Thank you for talking today. Thank you.
■ Lee Jung-hwan, ◇ Cha Young-joo: Thank you.
#Trump #Mar-Lago #SonJeongui #ElonMusk #Lee Jaeyong #Jung Yongjin #Daegwan #Japan #Germany #France #tariff #inflation #CabinetDismantling
[Copyright holder (c) YTN Unauthorized reproduction, redistribution and use of AI data prohibited]