Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amerie Hordern join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
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Speaker 2: with stocks extending their sell off as President Donald Trump's
Speaker 2: push to take control of Greenland is sending fresh volatility
Speaker 2: into markets worldwide. The IBM Vice chairman and former NEC
Speaker 2: director Gary Cohne joins us now for more carry good
Speaker 2: to see you, good, Thanks for having me. You heard
Speaker 2: the way we open the program. There seem to be
Speaker 2: a concrete ideology when you were alongside the president in
Speaker 2: his first term or how would you describe this moment?
Speaker 3: What is this all about?
Speaker 4: No one knows for sure, but I think what we've
Speaker 4: seen evolve in the Trump presidency is this desire to
Speaker 4: negotiate and get a deal. So ultimately, is Greenland all
Speaker 4: about getting a deal? We know that the North Atlantic
Speaker 4: is becoming much more of a sought after territory from
Speaker 4: a militaristic standpoint, So I understand the presence concerned to
Speaker 4: have a military presence and protection of the North Atlantic
Speaker 4: is if we want to expand our air defenses. Greenland
Speaker 4: is a pretty strategic spot, so I understand what the
Speaker 4: President's interest is.
Speaker 5: They also have rarers, which is.
Speaker 4: Something that we in the United States can't supply to ourselves.
Speaker 4: So the question is is this a negotiating posture to
Speaker 4: get a deal with Greenland, to get more rarers, to
Speaker 4: get a larger naval and air force presence. And it
Speaker 4: may be it does seem like that's on the table,
Speaker 4: and this may all evolve in a place where the
Speaker 4: United States ends up in a very good strategic position.
Speaker 2: Do you think that's the way the business world sees
Speaker 2: it coming into the world economy before in this week?
Speaker 4: You know, I think the business world's split on it.
Speaker 4: You know, you've a these got a European presence here
Speaker 4: in the US presence here. I think the US presence
Speaker 4: is a little bit more optimistic that this is going
Speaker 4: to end in the right place, and we've seen this before.
Speaker 4: I think the European contingency is a little more leary
Speaker 4: and say, look, you.
Speaker 5: Know, maybe you're confident this ends well. We don't like
Speaker 5: being in the middle of this right now, which is.
Speaker 6: A reason why in European hours, treasuries are selling off
Speaker 6: much more of the dollar was much lower, and as
Speaker 6: the US wakes up, people are coming in and buying it.
Speaker 6: How much is the sell America trade real and how
Speaker 6: much is it a perception based on these moments, the
Speaker 6: ones that we saw on.
Speaker 4: Liberation Day, there is some sell America going on right now.
Speaker 4: I've met with a couple of different asset managers this morning, say,
Speaker 4: the global funds are reallocating a little bit out of
Speaker 4: the United.
Speaker 5: States, so you see that.
Speaker 4: You know, interest rates are higher, so people selling bonds
Speaker 4: rates go higher. People are repatriating currency back home. They're
Speaker 4: selling dollars to buy local currency, they're selling stock market
Speaker 4: they've got to repatriate currency. So I think we're seeing
Speaker 4: a little bit of that. I don't think that's what's
Speaker 4: driving the overall market right now. It doesn't feel like
Speaker 4: we've got a liquidate in America. It feels like we've
Speaker 4: got a trim around the edges in asset allocation models
Speaker 4: going on.
Speaker 6: This goes back to the wrestling match we were describing
Speaker 6: AI on one side. You've got politics on the other,
Speaker 6: and they're facing off and sort of sell America until.
Speaker 7: AI rears its head and get into the lead. And
Speaker 7: that's where it is.
Speaker 4: Sell America until the light turns green and everyone has
Speaker 4: to buy America. Because in the real reality, if you
Speaker 4: look at the US economy and what's going on, we've
Speaker 4: got one of the strongest economies in the world today.
Speaker 4: You know, we're growing at five plus percent and growth.
Speaker 4: We've got a pretty good tail wind going on behind US.
Speaker 4: I mean, right now, the only thing stopping is all
Speaker 4: this geopolitical risk. If and when, and I say, when
Speaker 4: this geopolitical risk settles down, the market's probably going to
Speaker 4: take off again. That's been the history of this pattern.
Speaker 8: Settles down Gary. Two and a half weeks ago, we
Speaker 8: captured Nicholas Madora. It feels like a decade ago. Now
Speaker 8: we're sitting in Davos talking about Greenland. You think you
Speaker 8: to settle down under a.
Speaker 5: Recadministry two weeks Yeah, we're going to settle down.
Speaker 4: I think that there's a couple of balls up in
Speaker 4: the air right now.
Speaker 5: But you know, this two show pass.
Speaker 4: We can go back in the last eight twelve years,
Speaker 4: and there's been periods of time where we've had these,
Speaker 4: you know, highly.
Speaker 5: Volatile geopolitical moments.
Speaker 4: We're in a highly valuatible geopolitical.
Speaker 5: Moment right now.
Speaker 4: And by the way, I'm not sure as a coincidence
Speaker 4: that Davis is right in the middle.
Speaker 8: All right, Interesting, I want to ask you about the
Speaker 8: FED chair race because you were in the room with
Speaker 8: the president in Trump won when he decided to go
Speaker 8: for J.
Speaker 3: Powell.
Speaker 8: What kind of questions do you think he's lobbing at
Speaker 8: these individuals and in the end, who do you think
Speaker 8: it's going to come down to.
Speaker 5: Look, the president's in an enviable position right now.
Speaker 4: He's got what we know, He's got four really highly
Speaker 4: qualified candidates. Any one of those four could do a
Speaker 4: really good job in there. I think the President at
Speaker 4: this point is trying to understand the sort of mindset
Speaker 4: of the person he's going to put into the position.
Speaker 4: The President clearly has a view on what interest rate
Speaker 4: policy should be. The problem or the opportunity with the
Speaker 4: FED job is once he appoints someone into that job,
Speaker 4: they're an independent agency and he loses his day to
Speaker 4: day contact with that person. So I think the President
Speaker 4: learned in the first administration that it's very important to
Speaker 4: who he puts in that job, and that he should
Speaker 4: make sure that he's very comfortable with their policy mandate
Speaker 4: before he appoints them.
Speaker 2: Do you think it's become even more important now that
Speaker 2: that individual needs to have the ability to persuade the
Speaker 2: rest of the committee in a way that maybe a
Speaker 2: few years ago that wasn't as relevant. There's just a
Speaker 2: sense on Wall Street that the President's approach in the
Speaker 2: last twelve months has galvanized the rest of the committee
Speaker 2: to dig in.
Speaker 4: Look, I think the committee's structure is going to be
Speaker 4: the committee structure. I'm not sure if the chairperson can
Speaker 4: ultimately sway the committee that far. Could they sway one
Speaker 4: vote or two votes potentially? But you've got some very
Speaker 4: strong regional bank presidents, You've got some very strong governors
Speaker 4: in the FED. I think the FED, ultimately, at the
Speaker 4: end of the day, is going to be a tough
Speaker 4: group to persuade. I think they'll come out in the
Speaker 4: right place I mean, historically, the FED has done a
Speaker 4: very good job. Have they been a little bit late? Yeah,
Speaker 4: they were late in the transitory inflationary problem of COVID,
Speaker 4: but they've caught up.
Speaker 5: They've gotten to the right place.
Speaker 4: I think if you look at the FED through the cycle,
Speaker 4: they end up getting.
Speaker 5: To the right place.
Speaker 2: He was diplomatic about the four candidates. Can I just
Speaker 2: talk about some of them individually? You can Governor Chris Waller?
Speaker 2: You can too, You can governor Chris Waller. I believe
Speaker 2: you were part of that process, right, Vice Chef Clarity,
Speaker 2: you were part of that process too. What was the
Speaker 2: president's approach to that process back then? Was he as
Speaker 2: involved as he appears to be now?
Speaker 4: He was not as involved then, But you remember he
Speaker 4: was a first term president who was an outsider to Washington.
Speaker 4: That was part of his mystique. As he was an
Speaker 4: outsider to Washington. He knew he had to put someone
Speaker 4: into the FED chair's role, and he approached it. But
Speaker 4: I think now, understanding the importance of interest rate policy
Speaker 4: and understanding his view of interest rate policy, he's taking
Speaker 4: considerably more time talking to the various candidates.
Speaker 2: Ill asked you the question, Mike got even trouble. Is
Speaker 2: Kevin Wash a chameleon? Is he a hawk? Is he
Speaker 2: a dove? Is he whatever it takes to get the job?
Speaker 2: Why didn't you get the job last time? Look, Kevin
Speaker 2: is highly qualified, without doubt. Kevin has served in the
Speaker 2: FED without a doubt. Kevin was there during some of
Speaker 2: the toughest days of the FED during the financial crisis.
Speaker 2: I personally was dealing with Kevin on an hourly basis
Speaker 2: as we were trying to figure out what was going
Speaker 2: on in the United States financials system. Kevin was an
Speaker 2: active participant in the outcome that we all benefited from.
Speaker 2: And without Kevin's wisdom, I'm not sure we would have
Speaker 2: ended up in the same place. He's a highly qualified candidate.
Speaker 2: It sounds like out of the thought that's who he'd
Speaker 2: like to see in the seat. Based on that strong
Speaker 2: defense of Kevin Wood.
Speaker 4: I think Kevin Hasset's a great quality candidate. I worked
Speaker 4: with Kevin Hasse when I was in the White House.
Speaker 4: He was the CEA director. You thought Kevin Kevin Hasse
Speaker 4: was an excellent CEA.
Speaker 2: Let me tell you what some people say about Kevin
Speaker 2: has said that if he's appointed, that's a puppet of
Speaker 2: the President of the United styce sit.
Speaker 3: They're small and do whatever it takes.
Speaker 4: Is that unfat You know, you and I both know
Speaker 4: whoever gets appointed, there will be people that are disappointed
Speaker 4: and will have negative things to say about them. On
Speaker 4: the flip side, there will be people that'll be very
Speaker 4: happy with whoever one of those four gets appointed, and
Speaker 4: if it's if it's a fifth candiate we haven't seen yet,
Speaker 4: they'll be equally happy.
Speaker 5: With that one.
Speaker 6: There is a sense of whoever's going to be there,
Speaker 6: they're going to cut rates. How much is the entire
Speaker 6: buildout of AI, which is what you spend most of
Speaker 6: your time talking about here, based on the idea that
Speaker 6: the FED is going to be easying policy.
Speaker 4: No matter what the AI buildout in rates their link,
Speaker 4: but they're not in a strictly link. This AI buildout
Speaker 4: is being built because there's demand, there's forward demand, and
Speaker 4: the AI companies feel like they are behind the curve
Speaker 4: and being able to facilitate the needs of their clients.
Speaker 4: They are going to build these data centers. The only
Speaker 4: question that rates have is what is the ultimate all
Speaker 4: in cost to build these things? And interest rates are
Speaker 4: going to be important These are big, huge capex expenditures
Speaker 4: with thirty year life, so you know the amount of
Speaker 4: interest you're going to pay to finance win these centers
Speaker 4: is important. So twenty five or fifty basis points has
Speaker 4: a lot to do with these decisions. But I will
Speaker 4: caution you, like I always do, the FED only controls
Speaker 4: FED funds, they control overnight rates. You've been talking all
Speaker 4: morning about the tenure, the ten years at four thirty
Speaker 4: where these where these data centers are going to be financed.
Speaker 4: They're going to be financed to the medium to the
Speaker 4: long to the very long end of the curve. It's
Speaker 4: going to the combination of duration. FED funds is not
Speaker 4: going to affect that. So FED funds could possibly go
Speaker 4: down and the interest rate to finance a data setting
Speaker 4: could be unchanged.
Speaker 3: Do you miss the trident floor?
Speaker 5: Of course you missed the trading floor.
Speaker 2: Yeah, if you missed the tread and floor, can you
Speaker 2: imagine how scary things were back at Goment back in
Speaker 2: the day. But that's when the first year round list.
Speaker 2: Gary's walking the trident floor.
Speaker 4: Yeah, I think that he But John, that's when they
Speaker 4: really were trading floor us. Like he actually stood up
Speaker 4: and talked on phones and smoked each other.
Speaker 5: And did it prepare now now it's machines. Now it's machines.
Speaker 7: Did it prepare you for the West Wing?
Speaker 5: I did it? Did it? Very much? Did?
Speaker 3: In what way?
Speaker 5: Gary?
Speaker 4: Just they think the ability to be watching five different
Speaker 4: things going on at the same time and be listening
Speaker 4: in five places.
Speaker 5: People in the White House were always amazed that I.
Speaker 4: Could be like having a conversation over here and talking
Speaker 4: to someone behind me because I heard them talking. But
Speaker 4: when you grew up in a trading floor, and you
Speaker 4: grew up in a trading environment, your eyes and ears
Speaker 4: have to see everything.
Speaker 2: Stay with us more Bloomberg surveillance coming up after this.
Speaker 2: Joining us now in Dallas, Switzerland's Paul Ryan, the former
Speaker 2: House Speaker and now today Vice Chef Speaker.
Speaker 3: Ryan, Good morning, good to.
Speaker 2: See you, Good morning to see I had this question
Speaker 2: planned for a while. Does your party now have more
Speaker 2: in common with Senator Bernie Sanders than the one hundred
Speaker 2: and fourteenth and one hundred and fifteenth Congress that you
Speaker 2: ever saw?
Speaker 9: Apparently in economics, maybe the case is right on tariffs
Speaker 9: and on interest rate caps and things like that. Perhaps
Speaker 9: I'm a conservative. This is not conservative economics.
Speaker 2: It's the space for that in your party.
Speaker 10: Now, yeah, there is. Our party is a big ten party.
Speaker 10: It's got a lot of different factions.
Speaker 9: The dominant faction right now is more of an economic
Speaker 9: populist faction.
Speaker 10: That's the President's faction. That's MAGA.
Speaker 9: I'm a conservative, I'm in the minority of my own party.
Speaker 8: But that happens when John's talking about having this relationship,
Speaker 8: say the MAGA wing with Bernie Sanders.
Speaker 7: We're seeing that with a ton of issues.
Speaker 8: The president's talking about that the defense sector shouldn't have
Speaker 8: dividends or buybacks, credit card interest rate caps. Bernie Sanders
Speaker 8: literally wrote the bill. How do individuals in the minority
Speaker 8: of the Republican Party right now make their voices heard.
Speaker 9: This is populism, but it's populism tethered to whatever people
Speaker 9: think is popular, not tethered to certain core principles like liberty, freedom,
Speaker 9: free enterprise, private property rights, et cetera, et cetera. So
Speaker 9: my wing of the party, which is the classical liberal
Speaker 9: conservative winging the free market wing of the party, is
Speaker 9: in the minority, and we just have to make our
Speaker 9: case for why we believe what we believe in why
Speaker 9: we think people are better off. At the end of
Speaker 9: the day, the challenge is it's hard to defeat populism
Speaker 9: in sound bites, in emotion, and that's what can win
Speaker 9: the day, but it doesn't win the issue. It doesn't
Speaker 9: actually deliver the results. So the end of the day,
Speaker 9: I think results are what matter, and I think people
Speaker 9: voters vote for results. If they're going to vote for populism,
Speaker 9: that that that that speaks to their concerns and their
Speaker 9: grievances and their their and their frustrations.
Speaker 10: That's one thing.
Speaker 9: But if that populism doesn't deliver policies that actually solve problems,
Speaker 9: then they're going to look elsewhere and hopefully we can
Speaker 9: have a better discussion about what actually works. What principles
Speaker 9: that build our country, that make our economy strong. It's
Speaker 9: our private property rights, our deep liquid capital markets, our
Speaker 9: rule of law.
Speaker 10: That's why America is America. That's why we've done so well.
Speaker 9: We have to defend those principles, even if those principles
Speaker 9: aren't that popular.
Speaker 7: You're a free market individual.
Speaker 8: This administration is taking equity stakes in companies.
Speaker 7: Is that state capitalism the way that Chinese do it,
Speaker 7: or say, like the Europeans in the seventies.
Speaker 9: Yeah, it's more of Europeans more, it's more Japanese, it's
Speaker 9: more Europeans. It's it's not Chinese, it's it's it's not
Speaker 9: what conservatives are for. We don't believe in doing that.
Speaker 9: But this is more industrial policy, less, less communist dictatorship.
Speaker 10: It's very different.
Speaker 6: Your role right now is to advise companies, and you're
Speaker 6: coming at a time where companies have no clue what's
Speaker 6: going on at the White House or what might come
Speaker 6: out of it.
Speaker 10: What do you tell them?
Speaker 9: Yeah, I mean, we just did a survey actually of
Speaker 9: seven hundred and fifty CEOs that Tonayo just did, and frankly,
Speaker 9: a lot of them are pretty optimistic about.
Speaker 10: M and A.
Speaker 9: They're optimistic about economic growth. Where they're uncertain is tariffs.
Speaker 9: So they have to plan for resiliency. They're basically building
Speaker 9: resilience systems because they don't know what's going.
Speaker 10: To happen on tariffs.
Speaker 9: I actually think and I hope, that the Supreme Court
Speaker 9: may take away the IEP authority. I don't think that
Speaker 9: law was written for tariffs. It's a sanctions law. We'll
Speaker 9: find out and maybe even later today, I don't know
Speaker 9: when the court's going to rule, but that's a tool
Speaker 9: the president's been using far beyond Congress's intents.
Speaker 10: In my that's my opinion.
Speaker 9: But if that happens, then he'll have to go to
Speaker 9: other trade laws that aren't as easy to use, like
Speaker 9: the IEPA laws have been used, and so that takes
Speaker 9: away some uncertainty. But we're going to have trade uncertainty,
Speaker 9: tear if uncertainty. But there's good regulatory posture, we have
Speaker 9: good tax policy.
Speaker 10: There's gonna be a lot of M and A.
Speaker 9: So I think there's it's we're driving the car with
Speaker 9: two feet. We got one foot on the gas, one
Speaker 9: put on the brake, and that's what That's what CEOs
Speaker 9: are trying to plan for. How do they respond, how
Speaker 9: do they seize the opportunities and plan for the uncertainties.
Speaker 6: We just had the head of General Atlantic on who
Speaker 6: said that resilience to him, means diversifying, and it means
Speaker 6: diversifying away from the United States.
Speaker 7: This is the what if scenario.
Speaker 6: In the meantime, businesses have to plan how much are
Speaker 6: the people you're talking to moving capital flows outside of
Speaker 6: the US in a way that concerns you.
Speaker 10: I worry about that.
Speaker 9: I worry more frankly about a long term debt posture
Speaker 9: and the fact that we're not doing anything to deal
Speaker 9: with our debt, which means our dollar.
Speaker 10: So I think there.
Speaker 9: Are things that are that are good that are happening,
Speaker 9: Say the stable coins being deployed.
Speaker 10: That's good for the dollar. If we got our fiscal
Speaker 10: house in order, that'd be great for the dollar.
Speaker 9: But I don't see the populist politics lending itself to
Speaker 9: doing those things. But we do have the best economy
Speaker 9: in the world. We have the deepest, most liquid capital markets,
Speaker 9: so I still think we're going to be there. We
Speaker 9: have better regulations than what we had in the last administration.
Speaker 9: We have good tax policy. But there's a lot of uncertainty.
Speaker 9: So yeah, it bothers me when I hear companies feel
Speaker 9: they need to diversify away from America because of the uncertainty.
Speaker 9: But if we get this uncertainty dealt with, if the
Speaker 9: uncertainty tamps down, then I think we'll be back in business.
Speaker 10: So overall, I think we're going to be okay. At
Speaker 10: the end of the day. I think our institutions stick.
Speaker 2: Can we finish on the debt market you took us
Speaker 2: that there's a sale off in today's session. Look four
Speaker 2: thirty on a ten year bonb yeld. It's not a crisis.
Speaker 2: I'm not going to pretend it is. But the direction
Speaker 2: of travel is just to push more and push more.
Speaker 2: And it's not just America anymore, that's right, Abe, Japan
Speaker 2: is leaning in the same direction, and that'll loosened things
Speaker 2: up as well.
Speaker 3: What do you think we're building up to?
Speaker 10: What I worry about our auction failures.
Speaker 9: They won't technically be a failure because they'll make the primary.
Speaker 10: Dealers buy the paper.
Speaker 9: But I worry if we see that an auction would
Speaker 9: have failed, that what the spike and yields will look like,
Speaker 9: and then what that does to our fiscal policy. So
Speaker 9: if we could get ahead of our fiscal policy problems
Speaker 9: by reforming our entitlement programs prospectively for the X generation
Speaker 9: on down, I think we could calm the bomb markets
Speaker 9: down and we could be the flight to quality. Again,
Speaker 9: We're not there and our politics aren't there yet, so
Speaker 9: because that's not anywhere near.
Speaker 10: Being politically viable.
Speaker 9: You have these kinds of things, then you have all
Speaker 9: this terarif uncertainty, all the things that are happening there
Speaker 9: that are going to spook to markets. I don't know
Speaker 9: if this is a Japan story today or if there's
Speaker 9: a denmarket. I don't know what this is about. But
Speaker 9: if we had our fiscal outs in order, I don't
Speaker 9: think you'd see these kinds of shocks.
Speaker 2: Stay with us multiple impeg Savannah's coming up off to this,
Speaker 2: the President threatening to impose additional tariffs on some European
Speaker 2: allies supporting Denmark while he pursues Greenland. The Finland President
Speaker 2: Alexanders Stoop joins U snaffle moments the President, good to
Speaker 2: see it, nice to say, thanks for always making some
Speaker 2: time for us. Look, I would never traditionally start a
Speaker 2: conversation like this with the head of state, but given
Speaker 2: the news flow and the headlines and the pictures of
Speaker 2: text we've seen over the past few days, I have
Speaker 2: to get a better understanding from you directly. I understand
Speaker 2: you were on an exchange with the President of the
Speaker 2: United States where the President almost explicitly linked his failure
Speaker 2: to win the Nobel Priest Prize with a more assertive
Speaker 2: stance on Greenland.
Speaker 3: Did that actually happen?
Speaker 1: Well, yeah, I mean we do message a lot with
Speaker 1: the President and sometimes I message together with the Prime
Speaker 1: Minister of Norway, you and US Guard Sturta. So yes,
Speaker 1: the response was as has been reported, and this is
Speaker 1: what frank diplomacy is all about.
Speaker 5: This is quite.
Speaker 1: Normal in our engagements behind the scenes, and it's good
Speaker 1: that we have these conversations.
Speaker 3: You'd have to forgive me.
Speaker 2: But for many people that don't feel that it's normal
Speaker 2: to connect the failure to win a prize with a
Speaker 2: more assertive stance over someone else's territory.
Speaker 5: It is normal to have direct talks.
Speaker 1: Of course, on the Greenland issue, I agree with the President.
Speaker 1: I think now what we need to do is to
Speaker 1: bring down the temperature. We need to find an off
Speaker 1: ramp and probably create some kind of a process which will.
Speaker 5: Strengthen Arctic security.
Speaker 1: And sort of at the end of the tunnel, I
Speaker 1: wish we could have a NATO summit in Ankara where
Speaker 1: we all agree on a new Arctic security structure.
Speaker 5: I come from an Arctic country.
Speaker 1: I come from a country which has one of the
Speaker 1: biggest militaries in Europe. I come from a country which
Speaker 1: has the best know how in Arctic defense. So these
Speaker 1: are the types of things that we need to work
Speaker 1: with the alliance, including the United States.
Speaker 8: President Trump has been talking about Greenland since twenty nineteen.
Speaker 8: What makes it different this time? What does an off
Speaker 8: ramp actually look like.
Speaker 1: I think there's a short term scenario here. This is
Speaker 1: a long term. Short term is to basically de escalate
Speaker 1: the language, and I hope we'll see some of that
Speaker 1: here in Davos, here today, tomorrow and the day after tomorrow.
Speaker 1: And then the second one is a long term strategic
Speaker 1: thinking on Okay, is this an issue of sovereignty or
Speaker 1: is it an issue of security? I hope that it
Speaker 1: is an issue of security, and then we start looking
Speaker 1: at how we can beef up security in the Arctic region. Now,
Speaker 1: the latest conversations that I've had about this subject in
Speaker 1: the past two to three hours, this is how fast
Speaker 1: things are changing in the new foreign policy world. Gives
Speaker 1: me a little bit of hope that we'll find a way.
Speaker 7: It feels like a live negotiation.
Speaker 8: The President a lot of the time does come out
Speaker 8: with something very aggressive to get to an endpoint, which
Speaker 8: really is just a better deal.
Speaker 7: I like this to NATO.
Speaker 8: At one point there was reports you want to pull
Speaker 8: out NATO, but really, at the end of the day,
Speaker 8: you wanted Europe to spend more.
Speaker 7: Is that how you view this through that lens.
Speaker 1: Well, first of all, the president of the United States
Speaker 1: has a capacity to deal with the multiplicity of issues
Speaker 1: at the same time. I mean, you only look at
Speaker 1: what's happened this year Venezuela, Iran, Greenland, Gaza, the Peace Board,
Speaker 1: and many other things at the same time. And of
Speaker 1: course add on to that domestic issues on the NATO issue.
Speaker 1: If someone would have told me at the seventy fifth
Speaker 1: anniversary of NATO in Washington, d C. In twenty twenty four,
Speaker 1: I think it was that we are looking at increasing
Speaker 1: our defense expenditure to five percent next year.
Speaker 5: I please go and see a.
Speaker 1: Doctor or consult the Foreign Affairs magazine because this.
Speaker 5: Is not going to happen now.
Speaker 1: If at the end of the day, after this what
Speaker 1: could be called rhetorical escalation, we come up with a
Speaker 1: stronger Arctic security, then that is good. And obviously we're
Speaker 1: seeing foreign policy done in a slightly different way from
Speaker 1: what we're used to.
Speaker 5: But you know, I'm a finn.
Speaker 1: I thought you'd ask the first question that you know,
Speaker 1: what do you do? I said, in these coins of situations,
Speaker 1: you take a deep breath, you go in the sauna
Speaker 1: and you take an ice bath, and that's what we're
Speaker 1: a missing.
Speaker 5: That's what we're missing.
Speaker 8: See sauna where they have had diplomatic dealings done.
Speaker 7: Quite a scene. You can have the ice path right there. Look,
Speaker 7: then there's this.
Speaker 6: Question, mister President, about why European nations were sending more
Speaker 6: troops to Greenland over the past couple of days in
Speaker 6: the past week. At first it was to beef up
Speaker 6: and show that they were serious about the security.
Speaker 5: Not what it was about at all.
Speaker 6: Okay, okay, So whether it was taken by President Trump
Speaker 6: was I.
Speaker 1: Think there was probably a misunderstanding or not. Probably there was.
Speaker 1: So basically, let me explain. There is something called Arctic Endurance,
Speaker 1: which is basically a NATO training exercise.
Speaker 5: That exercise has eight different.
Speaker 1: Components, all of which the United States is present. We
Speaker 1: were asked by our allies to go and do a
Speaker 1: reconnaissance miss mission to check out the territory, the landscape,
Speaker 1: and how it's going to work out. This is completely
Speaker 1: normal procedure and obviously I can't talk about the specifics
Speaker 1: of that exercise, but trust me, it is not trying
Speaker 1: to protect anything westbound, it's more eastbound.
Speaker 7: At what point do.
Speaker 6: You feel like you're just fielding calls because you thought
Speaker 6: of as a Trump whisperer. I mean, what are you
Speaker 6: telling your colleagues and other European nations how to deal
Speaker 6: with mister.
Speaker 5: Well, I think you know diplomacy.
Speaker 1: A lot of times when people analyze diplomacy, they look
Speaker 1: at it on a state to state relations. You know,
Speaker 1: what's the values, interests, power, culture, history, geography, But they
Speaker 1: forget that a lot of it is actually about person
Speaker 1: to person engagement and the fact that I'm able to
Speaker 1: communicate directly with the president puts me as president of
Speaker 1: filling into good position. But I have no illusions about
Speaker 1: being a Trump whisperer. You know, he's the President of
Speaker 1: the United States. He decides completely for himself. I throw
Speaker 1: out a couple of ideas, sometimes he likes them, sometimes
Speaker 1: he doesn't, and then I throw ideas to our other
Speaker 1: European allies and friends.
Speaker 5: That's what diplomacy is about. Last week, Oh, we spoke.
Speaker 1: It was a collective phone call I think in Paris
Speaker 1: on the fifth of December or Berly, I forget when
Speaker 1: it was.
Speaker 5: But the president yeah, yeah, But that was sort of
Speaker 5: a collective.
Speaker 2: And the last message with each other was in the
Speaker 2: last time I.
Speaker 5: Think it's been made public. That was the last time
Speaker 5: you spoke. That's the last time message. Ye.
Speaker 2: The reason I asked this is I'm trying to engage
Speaker 2: whether there was a misunderstanding. It certainly seems like you
Speaker 2: perceive there was a misunderstand.
Speaker 5: My perception is that it was a misunderstanding.
Speaker 1: So now we need to, you know, sit down, discuss,
Speaker 1: get an off ramp and at the end of the day,
Speaker 1: we need more Arctic security and with European and American presence.
Speaker 2: This is clearly played out very publicly, and you've been
Speaker 2: transparent about how frank things are.
Speaker 3: Often behind the scenes.
Speaker 2: But given how publicly this has played out, what kind
Speaker 2: of a message you think this is sending to the
Speaker 2: Russians at the moment, the way this is playing.
Speaker 1: Out, well, any time there is a diplomatic issue, to
Speaker 1: put it diplomatically between us the Transatlantic partners. I'm sure
Speaker 1: that the Kremlin is enjoying it, I mean, and they
Speaker 1: will use it as they best can, as we saw,
Speaker 1: you know, I mean, for a Minister of Russia, love
Speaker 1: Rov puts out a tweet and saying that for the US,
Speaker 1: Greenland is what Crimea is for Russia. And obviously, you
Speaker 1: know that's an insult and we all understand that. So
Speaker 1: we always have to be careful with the Russians because
Speaker 1: they will use any moment and any possibility for good
Speaker 1: old information warfare and propaganda.
Speaker 8: The unintended consequences just creates more of a positive attitude
Speaker 8: towards Russia and China and divides the Transatlantic relationship.
Speaker 7: How may a.
Speaker 8: Concern is that, especially as we just saw Mark Karney
Speaker 8: go over to Beijing and say.
Speaker 7: They have this new strategic partnership.
Speaker 1: Yeah, I mean I think you know, I'm very pro European,
Speaker 1: I'm very pro American, and I'm a transatlanticist. So it
Speaker 1: is in my interests and also based on my values
Speaker 1: that we have a closer relationship with the United States.
Speaker 1: That's why I'm also very pragmatic. I understand that the
Speaker 1: United States is the number one superpower and what we
Speaker 1: need to avoid, of course, is a certain disengagement. At
Speaker 1: the same time, I have to say that Europe needs
Speaker 1: to use this moment as well. You know, it needs
Speaker 1: to beef up its defense, it needs to get stronger economically,
Speaker 1: and I think, you know, my big ceasis is that
Speaker 1: it's going to be the global South that decides the
Speaker 1: new world order. So that means that we need to
Speaker 1: engage more with the likes of India. I really like
Speaker 1: the free trade agreement that the EU forged with Mercosur,
Speaker 1: and I think people will start looking a little bit elsewhere,
Speaker 1: but I really still want to contain and bring back
Speaker 1: the US as best we can on.
Speaker 7: Top of Russia.
Speaker 8: On that conversation, I've been told those discussions are going
Speaker 8: very well between the United States and Ukrainians, the United
Speaker 8: States and the Russians. Krauel Dimitriev reportedly is here having
Speaker 8: a conversation with Steve Wikoff today. How much longer do
Speaker 8: you think it will take to get that deal done?
Speaker 8: Do you think Putin even wants a deal?
Speaker 1: Okay, So two observations on this. The first one is
Speaker 1: that I'm afraid that the Greenland issue will take all
Speaker 1: the oxygen here in Davos from the Ukraine dossier, which
Speaker 1: I still think is fundamentally important acute.
Speaker 5: But the second point is good news.
Speaker 1: I think ever since Jared Kushnaier came into the game,
Speaker 1: actually in Geneva right after the g twenty summit, and
Speaker 1: we had another meeting in Berlin and then in Paris.
Speaker 1: We have a lot of more practicality, so we basically
Speaker 1: have depends on how you count six documents or two
Speaker 1: or two plus five documents. The good news is that Ukraine,
Speaker 1: the United States, and the Coalision of the Willing or
Speaker 1: Europe we're on the same page. The big question is
Speaker 1: are the Russians. I'm quite skeptical about that. I think
Speaker 1: we might get a deal on security arrangements, we might
Speaker 1: get a deal on territory. Certainly on the prosperity package.
Speaker 1: I'm quite hope that will get something here this week.
Speaker 1: But then the Russians will say and yet, well, if.
Speaker 8: Russer continues to drag the United States along, do you
Speaker 8: have a sense of what Trump's red line is with Putin.
Speaker 1: I'm not going to start interpreting the red lines of
Speaker 1: the President of the United States, but I have to
Speaker 1: say that I really like what he did on Luke
Speaker 1: Oil and Rosneft, on the sanctions, and to be honest,
Speaker 1: I mean putin light to President Trump about the drones
Speaker 1: hitting his dutcha they fired ballistic missiles. So this is
Speaker 1: something that certainly will shorten the fuse of the President
Speaker 1: of the United States. And it of course depends on
Speaker 1: how much carrot do you put before you hit with
Speaker 1: the big stick.
Speaker 2: Just to find a question, we often ask our guests
Speaker 2: for forecasts the World Economic Forum. I'm not going to
Speaker 2: ask for a long term one. Where do you think
Speaker 2: will be at the end of this week?
Speaker 1: I think we will have defused the Greenland issue. I
Speaker 1: think we will have made progress on Ukraine, and I
Speaker 1: am one hundred percent sure that the world will not
Speaker 1: be finished by that.
Speaker 2: This is the bloomberg S Events podcast, bringing you the
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