November 6, 2024 • 10 mins
Former NZ ambassador to the United States Tim Groser says Donald Trump's presidential win can be attributed in a large part to the middle class "being screwed".
"The Democrats have become the party of the rich. If you take the top 25 districts in terms of wealth, 24 of them are held by democrats."
Groser, also a former Trade Minister, told Wellington Mornings host Nick Mills that Trump will move in the direction of tariffs which would impact New Zealand.
"He's been consistent on one thing since the 1980s. He's a protectionist. You can be pretty damn sure he will move in that direction, that cannot possibly be in New Zealand's interests as a small, vulnerable trading nation."
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Episode Transcript
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Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talks at.
Speaker 2 (00:12):
B Joining US now is Tim Grosser, former Trade Minister
and the Key Government and former New Zealand Ambassador to
the United States.
Speaker 3 (00:19):
Good Mornington, Good morning Nick.
Speaker 2 (00:22):
Well, what do you make of it all? Start off
by telling me what did you make of it all?
You've been there, done that, set that, talk to them,
you know what's going on.
Speaker 3 (00:31):
Well, I can hardly say I was surprised, because I've
been all over the New Zealand media saying not I
predict a Trump victory, but all the data and all
the analysis pointed to a Trump victory. So I'm not surprised.
But I mean, there are so many things coming flowing
through my mind in terms of the implications of it,
(00:53):
and the biggest one of all. I mean, we should
talk about the trade in the economic one, which is
the most immediate transmission mechanism for New Zealand's interest, but
you know, beyond that is the much biggest strategic question.
We are in the most dangerous I heard you talk
about Matthew's op ed on this very subject just a
(01:14):
moment ago. We are in the most dangerous international security
environnces in Cuban missile crisis in nineteen sixty two, we
have a huge war going on in Europe for the
first time since the end of the Second World War,
in which half a million, of largely young men, have
died half a million, and we have a war in
(01:35):
the Middle East where probably around ten percent of that
number have died. Both of them are written by the
key decision makers being Putin and Netnyahu by states that
have nuclear capabilities, and both of them have got the
potential for a wider conflagration. Now we know that both
(01:57):
of those two key decision makers were expecting a Trump victory.
Their next move is basically to decide between escalator or negotiation.
This is a major major issue, and of course we
now are in the middle of a transition that people
who know a little but the American system called the
(02:18):
lame Duck period, and they think that ends on the
twentieth of January at inauguration. No it doesn't. That's when
the process of putting the next government begins. We could
be until April before we know who the Secretary of
Defense is, who the Secretary to the Treasury is, and
so on a circle. So we've got months of uncertainty
(02:38):
at an extraordinarily dangerous time. That is to meet the
single biggest issue, not trying to analyze, you know, the
Trump bump in the s and P five hundred or
what's going to happen short term to interest rates?
Speaker 2 (02:51):
Why was Trump so popular in the US at the
final final count.
Speaker 3 (02:58):
Well, there's obviously a multitude of factors behind that, but
the most important in my opinion, is, first of all,
total political failure on the part of the US Democratic Party.
I mean, I could talk at length around this, but
the deeper forces of this are the middle class in
(03:19):
the United States has been screwed in the last thirty years.
If you look at the share. The data point I've
been using in some of my commentaries is this, The
share of the US middle class in total USGDP around
forty years ago was sixty two percent, call it two thirds.
It's now fallen to about forty percent. I think the
(03:39):
precise figure is forty two in twenty twenty three or
something like that. So the middle class have got screwed.
There's huge inequality taking place at the upper one percent
of US rich people, and the generation in their twenty
thirties forties can't see a pathway that my generation, if
(04:01):
I had been an American, can see to do better
than their parents. So there's this basic economic driver of
dissatisfaction going on in spite of the fact the economy
as a whole has improved. And then there is this
highly controversial issue of culture and the culture wars in
(04:21):
which the majority the white people of the United States
take out their Hispanics from this have been subject to
essentially what they consider to be a qualification campaign. Just
look at the proportion of the white vote that Trump
has got. It's way way above the Dems. The Dems
have become the party of the rich. This is a
(04:42):
complete reversal of classical class theory in terms of US politics.
If you take the twenty five top electorates in terms
of wealth, they're called congressional districts in the United States,
but they're electorates in our terms of the twenty five richest,
twenty four of the male by Democrats. So this uneducated
(05:03):
working class, largely white people, have felt abandoned culturally by
what they call Wokism and economically by the economic system.
Over the past thirty years. At the end of the day.
Trump is electable only because of these broader forces. If
he'd stood up in nineteen seventy five or a Trump
light figure, he wouldn't have got to where he is now.
(05:25):
This is the underlying root cause, plus shocking political strategic
errors by the US Democratic Party.
Speaker 2 (05:32):
As a former trade minister, how concerned are you about
the tariffs?
Speaker 3 (05:39):
Well, this is a very interesting question. People say, Oh,
but it's totally unpredictable. Well, yes, he is totally unpredictable
in terms of what precisely he will do. He's actually
very predictable in terms of the direction of travel. He's
been consistent on one thing from the nineteen eighties, and
that is he's a protectionist. And while of course he
(06:00):
won't go ahead and put twenty percent tariffs on everybody
and everything, you can be pretty damn sure that he
will move in that direction that cannot possibly be to
New Zealand's interests as a small, vulnerable trading country. Now,
two or three things. I've heard various people with fancy
titles who think they know about trade talk on this
(06:21):
subject and say, while New Zealand's not the target, you know, well,
you know, it'd be like telling a Palestinian in Gaza.
Don't worry about it, mate, because the idea for hunting
terrorists not you. There's a thing called collateral damage in war,
whether it's kinetic war or trade war. And so the
last time Trump was the president, I was the ambassador.
He declared, I mean, this is a laughable proposition. But
(06:44):
formerly this is true, that imports of steel and aluminum
from New Zealand constituted a security threat to the United States.
And the reason for this absurdity is because he invoked
Section two three two of the TARIFFAC that allows the
President of the United States to take emergency protection against
steel or other products deemed to be a security threat states.
(07:07):
Of course, New Zealand wasn't the bloody target, but we
were caught up as collateral damage. Look in real war,
kinetic war, bullets ricochet, same thing happens in trade wars.
So while we can't predict what will happen, the idea
that we can safely say, oh, we're not the target,
we're not going to be affected by this is naivity
of the first order.
Speaker 2 (07:26):
Wow, So you think it's coming and we should just
get ready for it, just quickly, because I know you're
a very busy man and loving hearing your opinion. And
I did actually forget that you were involved with Trump before.
I want to know, do you think that New Zealand's
better or for worse off with Trump?
Speaker 3 (07:46):
Well, with respect to the alternative, I was thinking, if
anyone asked me purely economic grounds, whether I would have
preferred Biden or Kamla Harris on purely trade and economic grounds,
I would have used Kissinger's response during the Iran Iraq
War when he was asked who wanted to win, he said,
(08:07):
I'd like to see both of them lose. So you know,
God knows what she would have done. Other than I
think she wouldn't have made things worse, but she wouldn't
have taken any positive action because the Biden administration of
which she was part she was the vice president, did
nothing to reverse Trump's protectionism in the four years that
they had the responsibility of running the world's most important country.
(08:29):
But look, just to sort of put this in perspective,
we have an insurance policy. It wasn't designed with Trump
in mind. It was designed in the mid nineteen seventies
to deal with the far far greater threat of our
then largest export market, which was Britain, which took slightly
(08:50):
under fifty percent of our total exports, going away from
policies of free trade into the THENEEC, which was a
completely protected market and we were being systematically shut out
of it. And we developed over series of labor lead
and national led governments a very creative trade policy strategy
(09:11):
that gave us alternatives. And we've now got FDA's with
numerous different countries, numerous different groupings that we never had
thirty or forty years ago. So while it wasn't designed
with Trump in mind, it didn't really matter where the
earthquake was going to happen. We built up the trade
equivalent of the Earthquake and War Damages Commission. But when
(09:32):
disaster hit, we've had something to pay it off with.
So we've actually got our insurance policy in place, designed
for different purposes, but it will produce exactly the same
useful results. So you know, we've got alternatives, We've got
strength we never had. This is not the end of
the body work for New Zealand at all.
Speaker 2 (09:51):
Term it's been amazing talking to you, just so enlightening.
I've learned so much from having a chat to you.
I appreciate you taking the time out. You know what
I said at the beginning of the show, I said,
let's just put our seatbelts on and watch the show,
because it's going to be a show, isn't it.
Speaker 3 (10:07):
Yeah, But Nick, I heard you offer lunch in Paterni
to somebody. I mean, aren't you going to extend the
same offer.
Speaker 2 (10:12):
Of course, I'd take you to. I didn't take your lunch.
I'd take you to lunch anytime you're in Willing tomorrow,
anytime you're anytime you're free. I'd love to. Aye, man,
that would be just such an exciting lunch. And it
is a very good cafe and Patoni i'd take you
to too, And not that I own it or have
anything to do with that, It's just my favorite spot.
Speaker 3 (10:28):
Thanks.
Speaker 2 (10:28):
Thanks Tim, lovely to talk to him. Tim Grosser, oh gosh,
how good a former trade minister and the Key government
and former New Zealand ambassador to the United States while
Trump was in power.
Speaker 3 (10:40):
I didn't know that.
Speaker 1 (10:42):
For more from Wellington Mornings with Nick Mills, listen live
to news Talks It'd Be Wellington from nine am week days,
or follow the podcast on iHeartRadio.
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talks at.
Speaker 2 (00:12):
B Joining US now is Tim Grosser, former Trade Minister
and the Key Government and former New Zealand Ambassador to
the United States.
Speaker 3 (00:19):
Good Mornington, Good morning Nick.
Speaker 2 (00:22):
Well, what do you make of it all? Start off
by telling me what did you make of it all?
You've been there, done that, set that, talk to them,
you know what's going on.
Speaker 3 (00:31):
Well, I can hardly say I was surprised, because I've
been all over the New Zealand media saying not I
predict a Trump victory, but all the data and all
the analysis pointed to a Trump victory. So I'm not surprised.
But I mean, there are so many things coming flowing
through my mind in terms of the implications of it,
(00:53):
and the biggest one of all. I mean, we should
talk about the trade in the economic one, which is
the most immediate transmission mechanism for New Zealand's interest, but
you know, beyond that is the much biggest strategic question.
We are in the most dangerous I heard you talk
about Matthew's op ed on this very subject just a
(01:14):
moment ago. We are in the most dangerous international security
environnces in Cuban missile crisis in nineteen sixty two, we
have a huge war going on in Europe for the
first time since the end of the Second World War,
in which half a million, of largely young men, have
died half a million, and we have a war in
(01:35):
the Middle East where probably around ten percent of that
number have died. Both of them are written by the
key decision makers being Putin and Netnyahu by states that
have nuclear capabilities, and both of them have got the
potential for a wider conflagration. Now we know that both
(01:57):
of those two key decision makers were expecting a Trump victory.
Their next move is basically to decide between escalator or negotiation.
This is a major major issue, and of course we
now are in the middle of a transition that people
who know a little but the American system called the
(02:18):
lame Duck period, and they think that ends on the
twentieth of January at inauguration. No it doesn't. That's when
the process of putting the next government begins. We could
be until April before we know who the Secretary of
Defense is, who the Secretary to the Treasury is, and
so on a circle. So we've got months of uncertainty
(02:38):
at an extraordinarily dangerous time. That is to meet the
single biggest issue, not trying to analyze, you know, the
Trump bump in the s and P five hundred or
what's going to happen short term to interest rates?
Speaker 2 (02:51):
Why was Trump so popular in the US at the
final final count.
Speaker 3 (02:58):
Well, there's obviously a multitude of factors behind that, but
the most important in my opinion, is, first of all,
total political failure on the part of the US Democratic Party.
I mean, I could talk at length around this, but
the deeper forces of this are the middle class in
(03:19):
the United States has been screwed in the last thirty years.
If you look at the share. The data point I've
been using in some of my commentaries is this, The
share of the US middle class in total USGDP around
forty years ago was sixty two percent, call it two thirds.
It's now fallen to about forty percent. I think the
(03:39):
precise figure is forty two in twenty twenty three or
something like that. So the middle class have got screwed.
There's huge inequality taking place at the upper one percent
of US rich people, and the generation in their twenty
thirties forties can't see a pathway that my generation, if
(04:01):
I had been an American, can see to do better
than their parents. So there's this basic economic driver of
dissatisfaction going on in spite of the fact the economy
as a whole has improved. And then there is this
highly controversial issue of culture and the culture wars in
(04:21):
which the majority the white people of the United States
take out their Hispanics from this have been subject to
essentially what they consider to be a qualification campaign. Just
look at the proportion of the white vote that Trump
has got. It's way way above the Dems. The Dems
have become the party of the rich. This is a
(04:42):
complete reversal of classical class theory in terms of US politics.
If you take the twenty five top electorates in terms
of wealth, they're called congressional districts in the United States,
but they're electorates in our terms of the twenty five richest,
twenty four of the male by Democrats. So this uneducated
(05:03):
working class, largely white people, have felt abandoned culturally by
what they call Wokism and economically by the economic system.
Over the past thirty years. At the end of the day.
Trump is electable only because of these broader forces. If
he'd stood up in nineteen seventy five or a Trump
light figure, he wouldn't have got to where he is now.
(05:25):
This is the underlying root cause, plus shocking political strategic
errors by the US Democratic Party.
Speaker 2 (05:32):
As a former trade minister, how concerned are you about
the tariffs?
Speaker 3 (05:39):
Well, this is a very interesting question. People say, Oh,
but it's totally unpredictable. Well, yes, he is totally unpredictable
in terms of what precisely he will do. He's actually
very predictable in terms of the direction of travel. He's
been consistent on one thing from the nineteen eighties, and
that is he's a protectionist. And while of course he
(06:00):
won't go ahead and put twenty percent tariffs on everybody
and everything, you can be pretty damn sure that he
will move in that direction that cannot possibly be to
New Zealand's interests as a small, vulnerable trading country. Now,
two or three things. I've heard various people with fancy
titles who think they know about trade talk on this
(06:21):
subject and say, while New Zealand's not the target, you know, well,
you know, it'd be like telling a Palestinian in Gaza.
Don't worry about it, mate, because the idea for hunting
terrorists not you. There's a thing called collateral damage in war,
whether it's kinetic war or trade war. And so the
last time Trump was the president, I was the ambassador.
He declared, I mean, this is a laughable proposition. But
(06:44):
formerly this is true, that imports of steel and aluminum
from New Zealand constituted a security threat to the United States.
And the reason for this absurdity is because he invoked
Section two three two of the TARIFFAC that allows the
President of the United States to take emergency protection against
steel or other products deemed to be a security threat states.
(07:07):
Of course, New Zealand wasn't the bloody target, but we
were caught up as collateral damage. Look in real war,
kinetic war, bullets ricochet, same thing happens in trade wars.
So while we can't predict what will happen, the idea
that we can safely say, oh, we're not the target,
we're not going to be affected by this is naivity
of the first order.
Speaker 2 (07:26):
Wow, So you think it's coming and we should just
get ready for it, just quickly, because I know you're
a very busy man and loving hearing your opinion. And
I did actually forget that you were involved with Trump before.
I want to know, do you think that New Zealand's
better or for worse off with Trump?
Speaker 3 (07:46):
Well, with respect to the alternative, I was thinking, if
anyone asked me purely economic grounds, whether I would have
preferred Biden or Kamla Harris on purely trade and economic grounds,
I would have used Kissinger's response during the Iran Iraq
War when he was asked who wanted to win, he said,
(08:07):
I'd like to see both of them lose. So you know,
God knows what she would have done. Other than I
think she wouldn't have made things worse, but she wouldn't
have taken any positive action because the Biden administration of
which she was part she was the vice president, did
nothing to reverse Trump's protectionism in the four years that
they had the responsibility of running the world's most important country.
(08:29):
But look, just to sort of put this in perspective,
we have an insurance policy. It wasn't designed with Trump
in mind. It was designed in the mid nineteen seventies
to deal with the far far greater threat of our
then largest export market, which was Britain, which took slightly
(08:50):
under fifty percent of our total exports, going away from
policies of free trade into the THENEEC, which was a
completely protected market and we were being systematically shut out
of it. And we developed over series of labor lead
and national led governments a very creative trade policy strategy
(09:11):
that gave us alternatives. And we've now got FDA's with
numerous different countries, numerous different groupings that we never had
thirty or forty years ago. So while it wasn't designed
with Trump in mind, it didn't really matter where the
earthquake was going to happen. We built up the trade
equivalent of the Earthquake and War Damages Commission. But when
(09:32):
disaster hit, we've had something to pay it off with.
So we've actually got our insurance policy in place, designed
for different purposes, but it will produce exactly the same
useful results. So you know, we've got alternatives, We've got
strength we never had. This is not the end of
the body work for New Zealand at all.
Speaker 2 (09:51):
Term it's been amazing talking to you, just so enlightening.
I've learned so much from having a chat to you.
I appreciate you taking the time out. You know what
I said at the beginning of the show, I said,
let's just put our seatbelts on and watch the show,
because it's going to be a show, isn't it.
Speaker 3 (10:07):
Yeah, But Nick, I heard you offer lunch in Paterni
to somebody. I mean, aren't you going to extend the
same offer.
Speaker 2 (10:12):
Of course, I'd take you to. I didn't take your lunch.
I'd take you to lunch anytime you're in Willing tomorrow,
anytime you're anytime you're free. I'd love to. Aye, man,
that would be just such an exciting lunch. And it
is a very good cafe and Patoni i'd take you
to too, And not that I own it or have
anything to do with that, It's just my favorite spot.
Speaker 3 (10:28):
Thanks.
Speaker 2 (10:28):
Thanks Tim, lovely to talk to him. Tim Grosser, oh gosh,
how good a former trade minister and the Key government
and former New Zealand ambassador to the United States while
Trump was in power.
Speaker 3 (10:40):
I didn't know that.
Speaker 1 (10:42):
For more from Wellington Mornings with Nick Mills, listen live
to news Talks It'd Be Wellington from nine am week days,
or follow the podcast on iHeartRadio.
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