1 00:00:02,360 --> 00:00:06,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,919 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:35,840 Speaker 2: Terminal and the Bloomberg Business app. 10 00:00:36,320 --> 00:00:39,040 Speaker 1: The US and Aron are preparing for another round of 11 00:00:39,120 --> 00:00:41,280 Speaker 1: nuclear talks that two sides are set to meet on 12 00:00:41,360 --> 00:00:44,680 Speaker 1: Thursday in Geneva. Former senior US intelligence official Norman Rule 13 00:00:44,960 --> 00:00:47,160 Speaker 1: joins us now, Nouram, thank you so much for being 14 00:00:47,159 --> 00:00:49,320 Speaker 1: with us. While we was just talking about how is 15 00:00:49,360 --> 00:00:52,480 Speaker 1: anable exactly what any kind of Iranian response would be. 16 00:00:52,800 --> 00:00:53,960 Speaker 3: To US action? 17 00:00:54,520 --> 00:00:56,960 Speaker 1: What's your take on how close we are right now 18 00:00:57,040 --> 00:00:59,840 Speaker 1: to some sort of hot war in the region. 19 00:01:01,080 --> 00:01:04,560 Speaker 4: Good morning, We're approaching an inflection point. 20 00:01:04,840 --> 00:01:07,680 Speaker 5: The Thursday represents the third round of talks, and the 21 00:01:07,840 --> 00:01:12,200 Speaker 5: United States will be looking to see if Iran's proposal 22 00:01:12,280 --> 00:01:17,160 Speaker 5: its written proposal from the Supreme with the Supreme Leader's approval, 23 00:01:17,200 --> 00:01:20,400 Speaker 5: will show any indication of softening in the Iranian position, 24 00:01:20,520 --> 00:01:21,360 Speaker 5: That is unlikely. 25 00:01:22,120 --> 00:01:26,360 Speaker 4: But if there is no change the Iranian position. 26 00:01:26,240 --> 00:01:29,520 Speaker 5: Then we are rapidly approaching the end of the President's 27 00:01:29,720 --> 00:01:32,200 Speaker 5: deadline for. 28 00:01:33,400 --> 00:01:35,320 Speaker 4: Some sort of significant. 29 00:01:35,520 --> 00:01:38,680 Speaker 5: Change in Iran's position on its nuclear program, missiles, and 30 00:01:38,800 --> 00:01:40,560 Speaker 5: regional militia building. 31 00:01:40,840 --> 00:01:42,720 Speaker 4: That's going to be about March third. 32 00:01:43,400 --> 00:01:47,320 Speaker 5: Based on the original February twentieth announcement, the President has 33 00:01:47,400 --> 00:01:51,600 Speaker 5: all assets in place to conduct a massive air and 34 00:01:51,680 --> 00:01:55,680 Speaker 5: missile campaign against Iran strategic capabilities against which Iran has 35 00:01:55,760 --> 00:02:02,960 Speaker 5: no credible defense, therefore leaving it only external operational. 36 00:02:02,600 --> 00:02:07,080 Speaker 4: Capabilities, which it will likely employ. So Thursday is. 37 00:02:07,040 --> 00:02:10,440 Speaker 5: Going to be an indicator of whether we're going to 38 00:02:10,480 --> 00:02:15,239 Speaker 5: see any significant change in the direction of this initiative. 39 00:02:15,320 --> 00:02:17,840 Speaker 6: Well, Steve Wikoff, wh will be there on Thursday, norm 40 00:02:17,960 --> 00:02:20,000 Speaker 6: said to Fox News over the weekend the President is 41 00:02:20,080 --> 00:02:23,560 Speaker 6: quote curious why Iran has not shifted course despite mounting 42 00:02:23,639 --> 00:02:27,720 Speaker 6: US pressure in the region. Do you think Iran will 43 00:02:27,720 --> 00:02:30,840 Speaker 6: come back to the table with any sort of change 44 00:02:30,880 --> 00:02:34,720 Speaker 6: of heart given the rast array of military hardware right 45 00:02:34,800 --> 00:02:36,080 Speaker 6: now in the region. 46 00:02:36,840 --> 00:02:38,440 Speaker 4: Well, Iran needs to buy time. 47 00:02:38,560 --> 00:02:42,960 Speaker 5: Iran needs to extend this process. Iron also needs to 48 00:02:43,000 --> 00:02:45,920 Speaker 5: promote debate in the United States and debate between the 49 00:02:46,000 --> 00:02:49,240 Speaker 5: United States and its partners abroad. So Iran needs to 50 00:02:49,240 --> 00:02:51,600 Speaker 5: come up with enough of an offer to keep the 51 00:02:51,720 --> 00:02:55,480 Speaker 5: US at the table, enough of the offer to promote 52 00:02:55,480 --> 00:02:58,320 Speaker 5: a debate between the president and his advisors that perhaps 53 00:02:58,320 --> 00:03:03,280 Speaker 5: diplomacy has hope, but not to do anything that would 54 00:03:03,520 --> 00:03:08,240 Speaker 5: provoke the initiation of military action which would threaten an 55 00:03:08,360 --> 00:03:09,120 Speaker 5: end to the regime. 56 00:03:09,680 --> 00:03:12,200 Speaker 6: Well, when it comes to how Iran thinks about this, 57 00:03:12,840 --> 00:03:15,799 Speaker 6: when it comes to the regime survival, what is worse 58 00:03:15,919 --> 00:03:19,840 Speaker 6: potentially capituating at the negotiating table or having to deal 59 00:03:19,919 --> 00:03:21,200 Speaker 6: with a military assault. 60 00:03:21,919 --> 00:03:24,520 Speaker 5: I think you're touching the heart of the matter here. 61 00:03:24,560 --> 00:03:28,760 Speaker 5: There is highly likely a significant debate ongoing within Iran 62 00:03:28,800 --> 00:03:33,200 Speaker 5: on that very question. The President and his advisors are 63 00:03:33,480 --> 00:03:38,080 Speaker 5: almost certainly attempting to shape that debate through the presence 64 00:03:38,160 --> 00:03:41,960 Speaker 5: of the US military forces and the diplomatic campaign against Iran, 65 00:03:42,280 --> 00:03:44,400 Speaker 5: just as Iran is attempting to shift the debate in 66 00:03:44,440 --> 00:03:48,080 Speaker 5: the United States on this entire initiative through its defiance, 67 00:03:48,160 --> 00:03:52,000 Speaker 5: its use of only indirect negotiations, its use of engagement 68 00:03:52,120 --> 00:03:56,360 Speaker 5: with partners and allies. So their debates within each side 69 00:03:56,440 --> 00:03:59,880 Speaker 5: is to the direction of where they take the future 70 00:04:00,280 --> 00:04:02,520 Speaker 5: their countries on their engagement with the other. 71 00:04:02,800 --> 00:04:04,560 Speaker 6: There's a lot of reporting the president has yet to 72 00:04:04,600 --> 00:04:06,880 Speaker 6: make a decision. But norm given all of your years 73 00:04:06,880 --> 00:04:09,160 Speaker 6: of experience, have you seen this sort of military build 74 00:04:09,200 --> 00:04:11,040 Speaker 6: up which we haven't seen since two thousand and three 75 00:04:11,080 --> 00:04:14,600 Speaker 6: pre invasion of the Iraq War, and then an executive 76 00:04:15,160 --> 00:04:18,000 Speaker 6: not decide to have at least that minimum and minimal strike. 77 00:04:18,839 --> 00:04:21,000 Speaker 5: Well, to be clear, we have never seen this sort 78 00:04:21,040 --> 00:04:24,240 Speaker 5: of military build up against the Islamic Republic in the 79 00:04:24,480 --> 00:04:27,240 Speaker 5: history of the Islamic Republic in the United States. We 80 00:04:27,320 --> 00:04:31,159 Speaker 5: have also not seen this level of military build up 81 00:04:31,200 --> 00:04:33,719 Speaker 5: in the Middle East since two thousand and three. We 82 00:04:33,760 --> 00:04:36,560 Speaker 5: have also not seen this level of military build up 83 00:04:36,600 --> 00:04:40,200 Speaker 5: without the United States employing that military build up at 84 00:04:40,240 --> 00:04:44,040 Speaker 5: some point. So it's going to require some significant concession 85 00:04:44,080 --> 00:04:50,680 Speaker 5: by the Iranian government to justify withdrawal of that military contingent. 86 00:04:51,000 --> 00:04:54,200 Speaker 1: Norm House stressed is the US naval contingent given the 87 00:04:54,200 --> 00:04:57,080 Speaker 1: fact that some of these deployments have been pretty long 88 00:04:57,120 --> 00:04:59,679 Speaker 1: and have been extended pretty significantly. 89 00:05:00,040 --> 00:05:01,920 Speaker 5: Well, the deployments have been long, but this is an 90 00:05:01,920 --> 00:05:05,920 Speaker 5: incredibly well trained Of course, there is absolutely no evidence 91 00:05:06,000 --> 00:05:10,039 Speaker 5: whatsoever that the US forces have been stressed in any 92 00:05:10,040 --> 00:05:13,080 Speaker 5: way to the point that it would degrade operational capability 93 00:05:13,240 --> 00:05:18,000 Speaker 5: or morale, or on any other indicator that would reduce 94 00:05:19,640 --> 00:05:25,799 Speaker 5: the threat it poses to Iran or the operational ability 95 00:05:25,800 --> 00:05:28,719 Speaker 5: that's forced to manage the mission the President has put. 96 00:05:28,560 --> 00:05:29,160 Speaker 4: In front of it. 97 00:05:29,440 --> 00:05:32,159 Speaker 1: No, I'm just on a broader scale, how imminent is 98 00:05:32,200 --> 00:05:34,360 Speaker 1: the thread coming from Iran right now? In other words, 99 00:05:34,440 --> 00:05:37,440 Speaker 1: is this the right time to make some sort of 100 00:05:37,480 --> 00:05:40,520 Speaker 1: strike or make some sort of ultimatum given the fact 101 00:05:40,880 --> 00:05:43,480 Speaker 1: that there could be potentially a rebuilding of the nuclear 102 00:05:43,520 --> 00:05:46,520 Speaker 1: capabilities and there's still is really questions around how much 103 00:05:46,720 --> 00:05:48,480 Speaker 1: they can go back to their former strength. 104 00:05:49,200 --> 00:05:51,159 Speaker 4: I think there's a different way of looking at the question. 105 00:05:52,000 --> 00:05:55,719 Speaker 5: The United States and Israel have severely degraded, if not destroyed, 106 00:05:55,720 --> 00:05:59,800 Speaker 5: Iran's nuclear weapons capability. Do we want them to rebuild 107 00:05:59,800 --> 00:06:02,400 Speaker 5: that capability or do we want to do something to 108 00:06:02,480 --> 00:06:06,159 Speaker 5: stop them from rebuilding their capability. Iran's missile program is 109 00:06:06,200 --> 00:06:09,280 Speaker 5: advancing in its sophistication, and it is a genuine threat 110 00:06:09,320 --> 00:06:11,760 Speaker 5: to Israel. And partners in the region, and it is 111 00:06:11,839 --> 00:06:15,200 Speaker 5: moving in the direction of an intercontinental ballistic missile which 112 00:06:15,240 --> 00:06:17,279 Speaker 5: is a threat to the United States and Western Europe. 113 00:06:17,360 --> 00:06:19,520 Speaker 4: Do we want to stop that or not? And the 114 00:06:19,600 --> 00:06:20,560 Speaker 4: Kuds Force. 115 00:06:20,279 --> 00:06:22,919 Speaker 5: Which creates all of the molenicias in the region, is 116 00:06:22,960 --> 00:06:25,240 Speaker 5: still exit in existence and it is going to try 117 00:06:25,240 --> 00:06:28,720 Speaker 5: to rebuild those militias Hes Balajamas and the Hoothy still exists. 118 00:06:28,720 --> 00:06:30,040 Speaker 4: Do we want to stop that or not? 119 00:06:30,400 --> 00:06:32,160 Speaker 5: So the question is really this, do you want to 120 00:06:32,240 --> 00:06:34,520 Speaker 5: kick the can down the road and pay the price 121 00:06:34,600 --> 00:06:36,640 Speaker 5: later or do you want to do something about it now? 122 00:06:36,680 --> 00:06:39,279 Speaker 5: While Iran is facing all of these stresses. So the 123 00:06:39,279 --> 00:06:42,599 Speaker 5: President's approach has a logic to it, a significant logic. 124 00:06:42,680 --> 00:06:44,640 Speaker 5: This is a moment to do something. The question is 125 00:06:44,960 --> 00:06:47,159 Speaker 5: do you want to pay that price now or risk 126 00:06:47,240 --> 00:06:48,320 Speaker 5: paying a higher price later. 127 00:06:49,240 --> 00:06:52,760 Speaker 3: Stay with us Mulbloomberg surveillance coming up off to this. 128 00:07:01,960 --> 00:07:04,839 Speaker 1: For our White House Trade advisor Kate Colliquitz, writing the 129 00:07:04,920 --> 00:07:08,080 Speaker 1: ruling may open space for further litigation and other tariffs 130 00:07:08,120 --> 00:07:11,480 Speaker 1: imposed by the Trump administration. Kate joins us Now, Kate, 131 00:07:11,480 --> 00:07:13,640 Speaker 1: have you slept in twenty four hours? 132 00:07:14,320 --> 00:07:16,600 Speaker 7: It's been an exciting weekend, you know, the weekend we 133 00:07:16,600 --> 00:07:18,920 Speaker 7: were always hoping for. But as we say, it's always 134 00:07:18,920 --> 00:07:21,160 Speaker 7: good to have a Friday more post of a Friday 135 00:07:21,160 --> 00:07:23,320 Speaker 7: evening decision, so we were able to get some work 136 00:07:23,320 --> 00:07:23,880 Speaker 7: in on Friday. 137 00:07:24,000 --> 00:07:26,920 Speaker 1: So, Kate, how much our company is trying to sue 138 00:07:26,960 --> 00:07:30,120 Speaker 1: to get some of the refunds to the tariffs that 139 00:07:30,120 --> 00:07:32,160 Speaker 1: they have paid over the past six months. 140 00:07:32,880 --> 00:07:35,800 Speaker 7: Well, I think a lot of companies are still waiting 141 00:07:35,880 --> 00:07:38,240 Speaker 7: and seeing what's going to happen. I think the Treasury 142 00:07:38,280 --> 00:07:43,120 Speaker 7: Secretary yesterday said very clearly that the federal government will 143 00:07:43,160 --> 00:07:45,400 Speaker 7: abide by the lower courts. We have to see how 144 00:07:45,440 --> 00:07:48,280 Speaker 7: this plays out. Of all the things that Supreme Court 145 00:07:48,360 --> 00:07:50,800 Speaker 7: ruled on, of course, they did not give clear direction 146 00:07:50,880 --> 00:07:54,240 Speaker 7: on refunds. So I think a lot of companies continue 147 00:07:54,280 --> 00:07:56,720 Speaker 7: to be in a wait and see posture to find 148 00:07:56,720 --> 00:07:57,920 Speaker 7: out what happens next there. 149 00:07:58,320 --> 00:08:00,320 Speaker 6: These are not just small businesses. We're talking about cost 150 00:08:00,400 --> 00:08:04,080 Speaker 6: go about Alcoa. How long could this take when it 151 00:08:04,120 --> 00:08:08,320 Speaker 6: comes to the US International Trade Court and deciding whether 152 00:08:08,400 --> 00:08:09,960 Speaker 6: or not these companies get refunds. 153 00:08:10,840 --> 00:08:14,080 Speaker 7: Well, you know, we've not seen a litigation like this before, 154 00:08:14,120 --> 00:08:16,880 Speaker 7: so it's hard to predict. And even the President, in 155 00:08:16,960 --> 00:08:20,440 Speaker 7: his conference on Friday, suggested that this. 156 00:08:20,400 --> 00:08:22,160 Speaker 4: Litigation could go on and on. 157 00:08:22,480 --> 00:08:25,640 Speaker 7: So, you know, I think some companies, of course, will 158 00:08:26,000 --> 00:08:28,720 Speaker 7: lead the litigation. We've seen cost Co take a leading 159 00:08:28,800 --> 00:08:31,800 Speaker 7: role there, but they're the guinea pig in a way, 160 00:08:31,840 --> 00:08:34,319 Speaker 7: and I think everyone else is going to continue to 161 00:08:34,920 --> 00:08:38,440 Speaker 7: employ cost saving measures as they can to deal with 162 00:08:38,480 --> 00:08:41,079 Speaker 7: the tariffs. But you know the reality is, whether or 163 00:08:41,160 --> 00:08:43,760 Speaker 7: not we have AIPA or some other measure in place, 164 00:08:44,360 --> 00:08:44,840 Speaker 7: a high. 165 00:08:44,760 --> 00:08:47,240 Speaker 4: Tariff scenario is where we're going to be. 166 00:08:47,440 --> 00:08:50,160 Speaker 7: So I think a lot of the strategies these companies 167 00:08:50,200 --> 00:08:52,079 Speaker 7: have been using are going to have to continue to 168 00:08:52,120 --> 00:08:53,120 Speaker 7: be on the table. 169 00:08:53,120 --> 00:08:54,160 Speaker 8: When it comes to AIPA. 170 00:08:54,200 --> 00:08:58,080 Speaker 6: Though how much of the US trade policy, as from 171 00:08:58,160 --> 00:09:00,240 Speaker 6: last week one not curling so it was struck down, 172 00:09:00,720 --> 00:09:02,120 Speaker 6: was tethered to using AEPA. 173 00:09:03,720 --> 00:09:03,880 Speaker 8: Well. 174 00:09:03,920 --> 00:09:07,800 Speaker 7: The trade strategy itself, I think, of course, is we 175 00:09:07,880 --> 00:09:12,520 Speaker 7: have many authorities to employ to maintain very high tariff rates. AIBA, 176 00:09:12,559 --> 00:09:15,319 Speaker 7: of course, was a tool of the President. He liked 177 00:09:15,320 --> 00:09:17,560 Speaker 7: to use it because it was quick, it was fast, 178 00:09:17,600 --> 00:09:19,760 Speaker 7: He could take it on and take it off. But 179 00:09:19,880 --> 00:09:22,000 Speaker 7: as we've seen, and as you just mentioned, there are 180 00:09:22,000 --> 00:09:25,920 Speaker 7: a number of other three numbered authorities the president can 181 00:09:25,960 --> 00:09:30,760 Speaker 7: tap into, I think the most significant difference, not necessarily 182 00:09:30,800 --> 00:09:33,360 Speaker 7: with one twenty two, which is just the bridge to 183 00:09:33,440 --> 00:09:34,520 Speaker 7: these other authorities. 184 00:09:35,120 --> 00:09:36,240 Speaker 4: When we end up. 185 00:09:36,080 --> 00:09:38,960 Speaker 7: In a scenario with three oh one tariffs or two 186 00:09:39,040 --> 00:09:42,840 Speaker 7: thirty two tariffs, these become much more durable, and I 187 00:09:42,840 --> 00:09:46,520 Speaker 7: think they actually lead to a tariff environment much more 188 00:09:46,600 --> 00:09:50,640 Speaker 7: lasting beyond this particular administration. So what we may end 189 00:09:50,760 --> 00:09:54,600 Speaker 7: up with here is a durable Trump tariff scenario which 190 00:09:54,640 --> 00:09:56,560 Speaker 7: we didn't have in the AEPA environment. 191 00:09:57,160 --> 00:09:57,960 Speaker 8: Kate, I was. 192 00:09:57,920 --> 00:10:01,559 Speaker 1: Looking into the Supreme Court decision and the descents, as 193 00:10:01,600 --> 00:10:06,440 Speaker 1: well as some of the accompanying remarks from Chief Justice Roberts, 194 00:10:06,559 --> 00:10:10,439 Speaker 1: and it seems like the big message from the majority was, Hey, Congress, 195 00:10:10,640 --> 00:10:12,960 Speaker 1: where are you? Why are you not taking back the 196 00:10:13,000 --> 00:10:17,839 Speaker 1: authority that the Constitution gave you. What chance is there 197 00:10:18,000 --> 00:10:20,679 Speaker 1: that a majority of Congress members will actually vote for 198 00:10:20,920 --> 00:10:23,440 Speaker 1: tariffs at a time when they're up for reelection and 199 00:10:23,520 --> 00:10:27,040 Speaker 1: potentially affordability issues, or really make this politically infeasible. 200 00:10:28,080 --> 00:10:31,040 Speaker 4: I think you just answered your own question. I don't 201 00:10:31,080 --> 00:10:32,199 Speaker 4: think it's set feasible. 202 00:10:32,240 --> 00:10:34,960 Speaker 7: I mean, we've seen Congress, not only this Congress, to 203 00:10:35,000 --> 00:10:39,319 Speaker 7: be fair, several successive Congresses be unwilling to take away 204 00:10:39,360 --> 00:10:43,040 Speaker 7: this tariff authority, be willing to act in favor of 205 00:10:43,080 --> 00:10:46,840 Speaker 7: what we call trade promotion authority to use what with 206 00:10:46,920 --> 00:10:49,840 Speaker 7: the Constitution gave them to control the power of tariffs. 207 00:10:50,400 --> 00:10:53,120 Speaker 7: And as you described, we are in a mid term 208 00:10:53,160 --> 00:10:57,480 Speaker 7: scenario where the issue of affordability, the issue of tariffs 209 00:10:57,880 --> 00:11:00,880 Speaker 7: is very front and center on one and the Democrats 210 00:11:00,880 --> 00:11:03,640 Speaker 7: want to use this issue, of course, to put pressure 211 00:11:03,679 --> 00:11:07,280 Speaker 7: on the administration and Republicans and have them own this 212 00:11:07,480 --> 00:11:12,640 Speaker 7: issue of rising prices and affordability concerns. But the Republicans 213 00:11:12,720 --> 00:11:15,680 Speaker 7: can't cross President Trump here. He issued a very firm 214 00:11:16,559 --> 00:11:19,960 Speaker 7: statement a few weeks ago that criticizing the tariffs would 215 00:11:20,040 --> 00:11:23,480 Speaker 7: be seen as criticizing him. He will put pressure on 216 00:11:23,600 --> 00:11:26,360 Speaker 7: them to certify these tariffs. But I don't think the 217 00:11:26,400 --> 00:11:30,880 Speaker 7: administration feels they need Congress. So I predict we'll see 218 00:11:30,920 --> 00:11:36,599 Speaker 7: Congress continue to just avoid taking their constitutional responsibility in 219 00:11:36,679 --> 00:11:38,680 Speaker 7: tariffs and leaving the pressure with the President. 220 00:11:39,559 --> 00:11:40,240 Speaker 4: Stay with US. 221 00:11:40,559 --> 00:11:53,000 Speaker 3: Mulblomberg Savana's coming up off to this, Let's head. 222 00:11:52,840 --> 00:11:56,240 Speaker 1: Over to BEMO Global Metals, Mining and Critical Minerals Conference. 223 00:11:56,280 --> 00:11:59,480 Speaker 1: The US moving toward a strategic reserve as governments and 224 00:11:59,559 --> 00:12:03,160 Speaker 1: corporations race to secure raw materials. BIBO sits at the 225 00:12:03,160 --> 00:12:05,360 Speaker 1: center of the shift as one of North America's largest 226 00:12:05,400 --> 00:12:09,920 Speaker 1: cross border lenders. BMO CEO Daryl White joins US now. Daryl, 227 00:12:09,920 --> 00:12:11,720 Speaker 1: I hope it is much better weather where you are 228 00:12:11,800 --> 00:12:12,240 Speaker 1: right now. 229 00:12:12,480 --> 00:12:14,360 Speaker 4: I want to just start with how. 230 00:12:14,240 --> 00:12:17,559 Speaker 1: Important and how much more activity this sector has seen 231 00:12:17,880 --> 00:12:19,800 Speaker 1: given the fact that there is this renewed interest in 232 00:12:19,800 --> 00:12:21,720 Speaker 1: building out the US infrastructure. 233 00:12:22,160 --> 00:12:24,000 Speaker 9: Yeah, well, thanks for having us, Lisa, and the weather 234 00:12:24,120 --> 00:12:25,920 Speaker 9: is a little bit better. I hope you're peeping safe 235 00:12:25,920 --> 00:12:29,439 Speaker 9: in the snow in the storm. It's very important when 236 00:12:29,440 --> 00:12:31,560 Speaker 9: I step back and think about what we're hosting here 237 00:12:31,600 --> 00:12:34,480 Speaker 9: this week. It really is the greatest metals and mining 238 00:12:34,520 --> 00:12:38,160 Speaker 9: show on Earth. We've got in the neighborhood of seven thousand, 239 00:12:38,320 --> 00:12:41,880 Speaker 9: six hundred one on one encounters that we're coordinating and hosting. 240 00:12:42,120 --> 00:12:44,400 Speaker 9: We've got three hundred and fifty capital providers, which is 241 00:12:44,400 --> 00:12:46,880 Speaker 9: the most we've ever had in our thirty five years 242 00:12:46,920 --> 00:12:50,520 Speaker 9: doing this, and we've got over six hundred corporates who 243 00:12:50,520 --> 00:12:53,960 Speaker 9: are here as well taking part in a really important conversation. 244 00:12:54,000 --> 00:12:56,480 Speaker 9: I think in this moment in time in particular when 245 00:12:56,520 --> 00:12:59,720 Speaker 9: we think about the global forces that are colliding into 246 00:12:59,720 --> 00:13:03,520 Speaker 9: thetical mineral space. This is a very important conversation at 247 00:13:03,520 --> 00:13:05,800 Speaker 9: a very important time for the economy and for the 248 00:13:05,800 --> 00:13:07,560 Speaker 9: future of the next five or ten years of our 249 00:13:07,600 --> 00:13:09,240 Speaker 9: resilience agendas. 250 00:13:09,040 --> 00:13:11,600 Speaker 1: Darrel, we'll get into exactly what the demand could look like, 251 00:13:11,679 --> 00:13:14,200 Speaker 1: which metals are going to be priority, what the production 252 00:13:14,280 --> 00:13:16,160 Speaker 1: plans are going to look like. I am curious how 253 00:13:16,200 --> 00:13:18,840 Speaker 1: much people there are talking about tariffs this morning, given 254 00:13:19,000 --> 00:13:21,800 Speaker 1: the AEPA ruling by the Supreme Court, the fact that 255 00:13:22,160 --> 00:13:25,080 Speaker 1: metals might be among some of the most affected. 256 00:13:26,559 --> 00:13:28,520 Speaker 8: Yeah, you know, at least I think it's early days. 257 00:13:28,520 --> 00:13:31,319 Speaker 9: I mean, the announcements a couple of days old on AAEPA. 258 00:13:31,440 --> 00:13:33,880 Speaker 9: If you look at the market reaction, it's been pretty subdued. 259 00:13:33,920 --> 00:13:35,959 Speaker 9: As we've all been talking about this morning. I think 260 00:13:36,160 --> 00:13:38,840 Speaker 9: part of that is because some of the outcome that 261 00:13:38,880 --> 00:13:41,120 Speaker 9: we saw over the last few days was probably priced 262 00:13:41,160 --> 00:13:43,000 Speaker 9: into bond markets, so we haven't seen much of a 263 00:13:43,040 --> 00:13:45,000 Speaker 9: reaction there. And if you talk to most of the 264 00:13:45,040 --> 00:13:48,000 Speaker 9: corporates that we're dealing with, the reality is over the 265 00:13:48,000 --> 00:13:50,439 Speaker 9: course of the last years, so the instability and the 266 00:13:50,520 --> 00:13:53,439 Speaker 9: volatility that's been brought by various decisions over the course 267 00:13:53,480 --> 00:13:56,040 Speaker 9: of the last year on tariffs have become a little 268 00:13:56,040 --> 00:13:59,360 Speaker 9: bit more normal course, So in the meantime they've rebuilt 269 00:13:59,400 --> 00:14:02,400 Speaker 9: supply to aims or organize themselves in different ways to 270 00:14:02,440 --> 00:14:05,600 Speaker 9: have resiliency and how they think about dealing to surprise 271 00:14:05,720 --> 00:14:08,640 Speaker 9: or maybe not such a surprise as the case may be, 272 00:14:08,800 --> 00:14:12,280 Speaker 9: depending on the audience. So in the meantime more stable 273 00:14:12,320 --> 00:14:12,920 Speaker 9: than you might think. 274 00:14:13,200 --> 00:14:15,800 Speaker 1: How much do you's here also a discussion around domestic 275 00:14:15,840 --> 00:14:20,680 Speaker 1: production and expediting some of the licensing around getting say, 276 00:14:20,800 --> 00:14:23,720 Speaker 1: for example, the compromide in Arizona up and running at 277 00:14:23,720 --> 00:14:26,360 Speaker 1: a time when there is this priority on metals of 278 00:14:26,360 --> 00:14:26,920 Speaker 1: all sorts. 279 00:14:27,560 --> 00:14:28,760 Speaker 8: Yeah, that's a live conversation. 280 00:14:28,800 --> 00:14:30,480 Speaker 9: I mean I I think it's a very important one 281 00:14:30,520 --> 00:14:33,520 Speaker 9: because if you think about the confluence of two forces. 282 00:14:33,520 --> 00:14:34,440 Speaker 8: We've got the. 283 00:14:34,440 --> 00:14:37,680 Speaker 9: Demand being driven by the AI power up, so the 284 00:14:37,720 --> 00:14:40,840 Speaker 9: newest industries are literally dependent on the oldest industries. 285 00:14:41,240 --> 00:14:43,640 Speaker 8: In addition to the global order reorganizing. 286 00:14:43,680 --> 00:14:46,880 Speaker 9: At the same time, there's a massive demand push here 287 00:14:46,920 --> 00:14:48,880 Speaker 9: and the response to that at the end of the 288 00:14:48,960 --> 00:14:51,040 Speaker 9: day is going to hit a bottleneck on the supply side. 289 00:14:51,080 --> 00:14:57,320 Speaker 9: So the needed reorganization of permitting, of getting to market faster, 290 00:14:57,520 --> 00:15:01,040 Speaker 9: of regulatory reform is a really active conversation, and I think, 291 00:15:01,040 --> 00:15:03,600 Speaker 9: as you know, we're seeing some positive developments on that, 292 00:15:03,640 --> 00:15:05,120 Speaker 9: particularly here in the United States. 293 00:15:05,440 --> 00:15:09,040 Speaker 6: Are companies feeling confident right now? Though to pour money 294 00:15:09,040 --> 00:15:10,600 Speaker 6: into the United States in this sector? 295 00:15:12,200 --> 00:15:15,440 Speaker 9: I think companies are feeling confident, and perhaps more importantly, 296 00:15:15,880 --> 00:15:18,280 Speaker 9: we've got investors who are feeling confident and trying to 297 00:15:18,320 --> 00:15:20,360 Speaker 9: pick their spots. And when we look at the North 298 00:15:20,360 --> 00:15:21,680 Speaker 9: American continent. 299 00:15:21,320 --> 00:15:22,600 Speaker 8: It's particularly attractive. 300 00:15:22,720 --> 00:15:24,480 Speaker 9: There are other places in the world that are attractive 301 00:15:24,480 --> 00:15:26,520 Speaker 9: as well, but they may come with a higher risk premium. 302 00:15:26,800 --> 00:15:29,520 Speaker 6: Do you see consolidation in this space? I know there 303 00:15:29,560 --> 00:15:31,560 Speaker 6: was potentially going to be a Rio blank Core deal 304 00:15:31,640 --> 00:15:34,240 Speaker 6: that fell through, But do you see potentially that this 305 00:15:34,320 --> 00:15:37,080 Speaker 6: space right now, given everything you've described, is right for 306 00:15:37,160 --> 00:15:38,000 Speaker 6: more consolidation. 307 00:15:39,320 --> 00:15:41,280 Speaker 8: Yeah, there is a lot of talk of consolidation. 308 00:15:41,840 --> 00:15:44,760 Speaker 9: We've seen a fair bit of consolidation over the last 309 00:15:44,800 --> 00:15:47,120 Speaker 9: six to twelve months, haven't we. And right now, if 310 00:15:47,160 --> 00:15:49,280 Speaker 9: I look at our own internal pipelines, they're as full 311 00:15:49,320 --> 00:15:52,040 Speaker 9: as they've ever been. Our teams have been responsible for 312 00:15:52,160 --> 00:15:55,240 Speaker 9: advising on seventy percent of all mny activity that we've 313 00:15:55,240 --> 00:15:57,760 Speaker 9: seen in the sector globally in the last four years. 314 00:15:58,040 --> 00:16:00,360 Speaker 9: We expect that to continue as we go through this year. 315 00:16:00,360 --> 00:16:03,080 Speaker 9: In the conditions both from a capital perspective as well 316 00:16:03,120 --> 00:16:06,120 Speaker 9: as the efficiency perspective of the producers are pretty are 317 00:16:06,160 --> 00:16:08,480 Speaker 9: pretty constructive for that consolidation theme as well. 318 00:16:08,640 --> 00:16:11,440 Speaker 6: This is a space that the Trump administration has taken 319 00:16:11,440 --> 00:16:14,760 Speaker 6: aim on to take actual equity stakes. Has that been 320 00:16:15,040 --> 00:16:18,360 Speaker 6: positive or is that concerning to the individuals you're talking to, 321 00:16:18,560 --> 00:16:20,720 Speaker 6: because potentially it means less competition. 322 00:16:21,800 --> 00:16:23,920 Speaker 9: Yeah, but I would say on balance, it's a very 323 00:16:23,960 --> 00:16:27,880 Speaker 9: good question. But it's generally been positive because it feeds 324 00:16:28,320 --> 00:16:33,560 Speaker 9: into the narrative of needing more reliable, bankable solutions on 325 00:16:33,840 --> 00:16:36,680 Speaker 9: particular demand signals. So we've got a demand signal, we 326 00:16:36,680 --> 00:16:39,640 Speaker 9: can set a floor capital crave certainty as we know, 327 00:16:40,120 --> 00:16:42,720 Speaker 9: and certainty is in a luxury. Certainty is something that 328 00:16:43,040 --> 00:16:45,840 Speaker 9: folks need in the sector to make those investments. So, 329 00:16:45,880 --> 00:16:49,880 Speaker 9: on balance, well structured, these are considered fairly positive interventions, 330 00:16:49,880 --> 00:16:53,240 Speaker 9: and we're seeing other countries around the world slowly follow 331 00:16:53,280 --> 00:16:55,200 Speaker 9: step and look at projects like these as well. 332 00:16:55,520 --> 00:16:59,600 Speaker 1: Daryl, there is a lot of controversy, certainly in Montreal. 333 00:16:59,600 --> 00:17:03,000 Speaker 1: It was just actually in Montreal, just not a long 334 00:17:03,040 --> 00:17:05,720 Speaker 1: time ago, and I was overhearing people saying that they're 335 00:17:05,720 --> 00:17:08,080 Speaker 1: trying to avoid going to the United States, and you 336 00:17:08,080 --> 00:17:11,000 Speaker 1: could definitely feel a certain sentiment there. Has it made 337 00:17:11,000 --> 00:17:14,720 Speaker 1: it difficult for you being both in Canada as well 338 00:17:14,760 --> 00:17:18,560 Speaker 1: as having increased your US platform to navigate the growing 339 00:17:18,600 --> 00:17:20,040 Speaker 1: tensions between the two countries. 340 00:17:21,240 --> 00:17:23,560 Speaker 9: Yeah, Look, we've been doing business for two hundred and 341 00:17:23,560 --> 00:17:26,040 Speaker 9: eight years, and seven of them we've been in the 342 00:17:26,119 --> 00:17:28,399 Speaker 9: United States. So this is a long game for us, 343 00:17:28,400 --> 00:17:30,680 Speaker 9: and it'll be a very long game for us. We're committed. 344 00:17:30,880 --> 00:17:33,280 Speaker 9: We continue to be committed to both countries almost an 345 00:17:33,280 --> 00:17:36,320 Speaker 9: equal measure. They're very important client basis for us, and 346 00:17:36,359 --> 00:17:38,520 Speaker 9: we continue to run our strategy as we always have. 347 00:17:38,760 --> 00:17:42,399 Speaker 1: How much do companies on a cross border level have 348 00:17:42,480 --> 00:17:47,000 Speaker 1: difficulty making decisions about deal making about investments when you 349 00:17:47,080 --> 00:17:49,879 Speaker 1: do see such an uncertain landscape that will affect the 350 00:17:49,920 --> 00:17:52,520 Speaker 1: long term potentially, right, I mean you think about USMCA, 351 00:17:52,560 --> 00:17:54,359 Speaker 1: they could get renegotiated. I mean, how much is that 352 00:17:54,400 --> 00:17:56,399 Speaker 1: affecting some of the discussions. 353 00:17:55,960 --> 00:17:58,480 Speaker 8: That you hear on the ground there. Yeah, it is 354 00:17:58,520 --> 00:17:59,880 Speaker 8: affecting the discussions for sure. 355 00:18:00,040 --> 00:18:02,359 Speaker 9: I think what you've seen is we're now about a 356 00:18:02,440 --> 00:18:06,080 Speaker 9: year into the volatility that we've seen around uncertainty of tariffs, 357 00:18:06,160 --> 00:18:08,640 Speaker 9: all kinds of tariffs. But over that period of time, 358 00:18:08,760 --> 00:18:12,040 Speaker 9: corporates move pretty quickly. They're able to reorganize their supply chains, 359 00:18:12,280 --> 00:18:15,399 Speaker 9: make decisions based on the path of most certainty, not 360 00:18:15,520 --> 00:18:18,480 Speaker 9: least certainty, and you do see some reorganization going on there, 361 00:18:18,640 --> 00:18:20,640 Speaker 9: and our bankers here have been there to support them 362 00:18:20,640 --> 00:18:21,920 Speaker 9: through all of those discussions. 363 00:18:22,400 --> 00:18:25,320 Speaker 6: Building on Lisa's point and putting Hockey aside, we have 364 00:18:25,480 --> 00:18:30,600 Speaker 6: seen a more acrimonious tone coming from Washington to this 365 00:18:30,680 --> 00:18:33,440 Speaker 6: government when it comes to Prime Minister Mark Carney. I 366 00:18:33,480 --> 00:18:35,920 Speaker 6: would just love your reaction from his speech at Davos, 367 00:18:35,960 --> 00:18:38,320 Speaker 6: which didn't name the United States, but there was that 368 00:18:38,520 --> 00:18:41,760 Speaker 6: tone that he was calling out the US, forcing allies 369 00:18:41,840 --> 00:18:45,560 Speaker 6: to pick between China and US. 370 00:18:47,200 --> 00:18:47,440 Speaker 4: Yeah. 371 00:18:47,480 --> 00:18:49,159 Speaker 9: Look, I think in the end, if you look at 372 00:18:49,240 --> 00:18:53,000 Speaker 9: the economic cooperation between the two countries over a long 373 00:18:53,040 --> 00:18:56,239 Speaker 9: period of time, we have no anticipation that that's going 374 00:18:56,280 --> 00:18:58,480 Speaker 9: to change. In the meantime, if you look at some 375 00:18:58,600 --> 00:19:01,160 Speaker 9: of the middle powers of the world, old Canada included, 376 00:19:01,480 --> 00:19:03,200 Speaker 9: are there things that we can do for our own 377 00:19:03,240 --> 00:19:06,320 Speaker 9: agendas that we can consider what's going on right now 378 00:19:06,320 --> 00:19:07,919 Speaker 9: as a bit of a wake up call. Whether in 379 00:19:07,920 --> 00:19:11,440 Speaker 9: the country of Canada, it's enterprovincial trade barriers, it's productivity 380 00:19:11,480 --> 00:19:14,960 Speaker 9: and efficiency of our own are diversifying our trade relationships 381 00:19:15,119 --> 00:19:18,280 Speaker 9: at the same time as we preserve a wonderful relationship 382 00:19:18,320 --> 00:19:19,760 Speaker 9: with the United States for the long term. 383 00:19:19,800 --> 00:19:20,840 Speaker 8: Those are all good things. 384 00:19:21,200 --> 00:19:23,280 Speaker 6: You also in the past talked about how Carne should 385 00:19:23,280 --> 00:19:25,800 Speaker 6: be cutting taxes. You don't think that Canada is competitive 386 00:19:25,880 --> 00:19:28,040 Speaker 6: on tax? Do you like what you're seeing out of 387 00:19:28,040 --> 00:19:28,800 Speaker 6: the Cardi government? 388 00:19:30,480 --> 00:19:33,760 Speaker 9: I do, And I will also underscore that it remains 389 00:19:33,800 --> 00:19:36,480 Speaker 9: early days. The government has been in power for a 390 00:19:36,520 --> 00:19:39,160 Speaker 9: little less than a year now with a full mandate. 391 00:19:39,160 --> 00:19:40,960 Speaker 8: There have been some changes that are positive. 392 00:19:41,359 --> 00:19:45,040 Speaker 9: There are more changes along the lines of competition, along 393 00:19:45,080 --> 00:19:47,960 Speaker 9: the lines of competitiveness, along the lines of competitive tax 394 00:19:48,240 --> 00:19:50,520 Speaker 9: that always should be considered through any government. But I 395 00:19:50,520 --> 00:19:52,800 Speaker 9: think we've seen material progress over the last year. 396 00:19:52,920 --> 00:19:55,640 Speaker 1: Daryl, is this the most attended a conference that you've 397 00:19:55,680 --> 00:19:58,320 Speaker 1: had of this type in terms of all of these questions? 398 00:19:59,040 --> 00:20:01,000 Speaker 9: Oh, by far. I mean people are beating down the 399 00:20:01,000 --> 00:20:03,160 Speaker 9: doors to get in here. The weather happens to be good, 400 00:20:03,160 --> 00:20:05,359 Speaker 9: I feel for you in New York, but we've got. 401 00:20:05,280 --> 00:20:07,520 Speaker 8: A lot of important conversations going on around here. 402 00:20:08,160 --> 00:20:11,720 Speaker 2: This is the Bloomberg Surveillance Podcast, bringing you the best 403 00:20:11,760 --> 00:20:15,080 Speaker 2: in markets, economics, antient politics. 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