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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Tuesday marks the end of the first year of President

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Speaker 2: Trump's second term, and it's been busy well. Cutting down

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Speaker 2: the size of government. The Trump administration moved quickly and

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Speaker 2: decisively to reshape the US economy, and by extension, it's

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Speaker 2: reshaped the global economy.

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Speaker 3: President Donald Trump's trade wars bring uncertainty, drive up costs,

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Speaker 3: and disrupt global commerce.

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Speaker 2: So called one Big Beautiful Bill, American hiring plumbting the

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Speaker 2: cost of groceries there is a major source of stress.

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Speaker 2: Investigation of Fed shair Jerome Powell as sparking backlash.

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Speaker 1: I think that he and his team have come in

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Speaker 1: and really tried to juice the economy and sort of

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Speaker 1: take a bunch of guardrails off of it.

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Speaker 2: Nancy Cook is a political reporter for Bloomberg. I spoke

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Speaker 2: with her and Mark Nikatt, our colleague, who's beat is

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Speaker 2: the real economy.

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Speaker 3: The administration really looks at effects the economy and boosting

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Speaker 3: the economy is kind of a three legged stool. With

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Speaker 3: taxes and the tax cuts deregulation. Trump has talked about

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Speaker 3: eliminating ten rules for every new rules, and the third

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Speaker 3: leg of the stool would be trade and adjusting what

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Speaker 3: he sees as a trade in balance with other countries

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Speaker 3: to boost US manufacturing and production.

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Speaker 2: I'm David Gerrett, and this is the big take from

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Speaker 2: Bloomberg News today on the show. The deep and dramatic

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Speaker 2: changes the Trump administration has made and proposed and imposed,

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Speaker 2: and the effects they've had on the way the US

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Speaker 2: does business, which have had the biggest impact and which

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Speaker 2: are likely to last. So we're not going to get

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Speaker 2: through everything President Trump has done in twenty twenty five.

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Speaker 2: Our time is limited. So I asked Bloomberg's Nancy Cook

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Speaker 2: and Mark Niquette to help me make sense of some

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Speaker 2: of the administration's biggest initiatives related to business and the economy.

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Speaker 2: And we started with what's become the hallmark of his

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Speaker 2: second term so far. For more than half a century,

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Speaker 2: the US had been a huge supporter of free trade.

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Speaker 2: President Trump has certainly changed that over the last year.

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Speaker 2: He slapped these big, across the board tariffs on long

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Speaker 2: standing trading partners. Mark, What has the effect of that

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Speaker 2: been on the global economy? The president going down that.

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Speaker 3: Path, it's completely reordered global trade. One. Because of the

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Speaker 3: scope of these tariffs, you know, highest tariff rate now

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Speaker 3: since the nineteen thirties in the US, but also because

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Speaker 3: of the uncertainty that it caused for US businesses, particularly manufacturers,

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Speaker 3: because the tariffs kept going on coming off, Trump would

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Speaker 3: adjust the rates. Businesses just were not able to plan

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Speaker 3: because of the vacillating tariff rates. And we saw just

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Speaker 3: massive swings in trade because of the tariffs. We saw,

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Speaker 3: you know, companies rushing to import good so it's ahead

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Speaker 3: of tariffs, which affected the trade balance. And we just

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Speaker 3: saw a bunch of activity related to companies trying to

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Speaker 3: get ahead of or around Trump's tariffs.

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Speaker 1: You know, it hasn't shown up in economic data as

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Speaker 1: much as people thought it would, and I feel like

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Speaker 1: we're still waiting to see the effects of it. Partly

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Speaker 1: it's because Trump keeps changing his mind on the trade.

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Speaker 1: When there was those elections in November where Democrats won

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Speaker 1: the gubernatorial races in Virginia and New Jersey, and it

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Speaker 1: just sort of was revealed that Americans are really mad

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Speaker 1: about still high prices, you know, just a sense that

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Speaker 1: American life is unaffordable. I think the White House really

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Speaker 1: pivoted at that point and started to do even more

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Speaker 1: trade carve outs on things like coffee and bananas, you know,

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Speaker 1: really rolling back those tariffs. And so one of the

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Speaker 1: things with trade policy is it's just been a moving

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Speaker 1: target sort of every month. It looks completely different depending

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Speaker 1: on which CEOs went in and tried to make the

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Speaker 1: case of how there needed to be fewer tariffs on retailers.

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Speaker 2: You know.

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Speaker 1: And so it's just changed so much that it is

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Speaker 1: hard to get a real clear picture of what its

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Speaker 1: economic effect has been like in the first year, because

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Speaker 1: it's kind of this thing that's changing and morphine kind

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Speaker 1: of week after week.

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Speaker 2: And Nancy, it's the president who is moving that target.

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Speaker 2: And I want to ask you about the politics of

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Speaker 2: trade in the past. Historically it's been the providence of

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Speaker 2: Congress to determine trade policy. That is not the case anymore.

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Speaker 2: And I wonder how surprising it is to you that lawmakers,

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Speaker 2: Republican lawmakers have really taken a back seat here and

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Speaker 2: seeded a lot of that power to the president.

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Speaker 1: Well, I think it's been very surprising. You know, I

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Speaker 1: covered the first Trump White House, and so I've been

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Speaker 1: covering Trump for almost a decade now, and I think

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Speaker 1: one of the interesting things between the first term, and

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Speaker 1: the second term is that Republican lawmakers have ceded basically

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Speaker 1: all their power to the Trump White House. Trade is

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Speaker 1: totally in the authority of Congress. But Trump this time

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Speaker 1: came in trying to sort of use these different statues

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Speaker 1: or sections or different laws to give himself the authority

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Speaker 1: and has completely run over Republican lawmakers on this and

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Speaker 1: has really done so without a lot of protests. Now,

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Speaker 1: the one backstop that we're waiting to see what happens

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Speaker 1: with is the Supreme Court. We're expecting the Supreme Court

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Speaker 1: to rule on this one legal statue that Trump tried

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Speaker 1: to use to give himself authority to make rulings on trade,

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Speaker 1: and a lot of Trump advisors I talk to you

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Speaker 1: think that the Supreme Court, in a rare rebuke of Trump,

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Speaker 1: will not rule in his favor. I think what will

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Speaker 1: happen is that it won't pull back from the tariffs.

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Speaker 1: I think it just means that they will lean on

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Speaker 1: a different legal authority to pursue the same policies. Out

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Speaker 1: of all of Trump's economic policies, trade is the thing

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Speaker 1: that I would say he feels most deeply, So even

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Speaker 1: if the Supreme Court strikes it down. I think he'll

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Speaker 1: just continue to pursue it, but just with a different

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Speaker 1: explanation for why he's doing it.

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Speaker 2: Mark, we know that President Trump loves tariffs. He reaffirmed

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Speaker 2: that in a speech that he gave to the Economic

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Speaker 2: Club of Detroit not just a few days ago. Favorite words,

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Speaker 2: favorite word. Seeing him impose those tariffs for variety of reasons,

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Speaker 2: and a big one has been to encourage a kind

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Speaker 2: of manufacturing renaissance in the US. How's that working out?

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Speaker 3: It's not. And part of the problem is it might

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Speaker 3: be just too early because these kind of reassuring actions

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Speaker 3: that Trump is looking for and increase in manufacturing production

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Speaker 3: are in some cases years long investments and commitments by companies,

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Speaker 3: and they've been unwilling in a lot of cases to

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Speaker 3: make these kind of commitments because the tariff rates keep

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Speaker 3: changing and they don't know where the trade policy is

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Speaker 3: ultimately going to land. So the intent clearly is to,

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Speaker 3: as Trump says when he talks about tariffs, is that

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Speaker 3: if you make your goods or your products in the US,

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Speaker 3: you don't have to pay the tariff. That's the whole

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Speaker 3: intent behind it. But it's just not that simple because

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Speaker 3: in a lot of cases, companies need inputs that they

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Speaker 3: can't make in the US for production in the US,

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Speaker 3: and that's those inputs now the prices are higher because

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Speaker 3: of the tariffs. So I think the big picture is,

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Speaker 3: you know, we have yet to see sort of significant

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Speaker 3: reshoring activity because of the tariffs. You know, that might

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Speaker 3: still be calmly, but in the meantime, you know, we're

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Speaker 3: seeing manufacturers in particular struggle and we certainly seen a

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Speaker 3: decrease in manufacturing employment.

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Speaker 2: Maybe you could walk us through sort of the way

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Speaker 2: that the President and broad Strokes has kind of reshaped

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Speaker 2: the regulatory landscape here in the last year.

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Speaker 1: Sure, well, I think, you know, like a lot of

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Speaker 1: Republican presidents, he just has thought that there has been

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Speaker 1: too many rules, and so he has like really undone

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Speaker 1: a lot of you know, regulations out of EPA and

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Speaker 1: a lot of energy regulations, both to encourage a lot

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Speaker 1: more oil drilling and exploration, but also just roll back

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Speaker 1: things like rules on pesticides or different things like that.

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Speaker 1: They have really rolled back some bank regulations about you know,

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Speaker 1: how much money banks need to have, like things that

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Speaker 1: were put in place after the financial crisis, and so

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Speaker 1: they've rolled that back to be more bank friendly.

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Speaker 2: Immigration, mark trade a big policy party for the president.

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Speaker 2: Immigration is another one, and you scour the data as

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Speaker 2: it comes out. What do we know about how President

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Speaker 2: Trump's immigration policy is impacting the economy.

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Speaker 3: There's no question that, you know, his immigration policy has

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Speaker 3: has had an impact on the economy, if nothing else,

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Speaker 3: because you know, we've essentially shut down the southern border.

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Speaker 3: I mean, he succeeded in his promise in the campaign

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Speaker 3: to close the border. You know, we've seen almost no

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Speaker 3: immigration from the southern border lease statistics would suggest that.

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Speaker 3: But we've also seen Trump, you know, go after legal immigration.

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Speaker 3: You know, there's a big fight right now over Trump's

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Speaker 3: proposal to charge one hundred thousand dollars fee for H

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Speaker 3: one B visas, which are the sort of the work

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Speaker 3: visas that tech companies in particular use to hire skilled

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Speaker 3: foreign workers that they believe they need. The US Chamber

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Speaker 3: has sued to stop that and it's in the courts

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Speaker 3: right now. But we've just seen a broad sort of

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Speaker 3: reaction two companies that depend on migrant labor. I'm thinking

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Speaker 3: like construction, agricultural sectors, and a real concern that you know,

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Speaker 3: there'll be a shortage of workers in these industries because

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Speaker 3: of the curtailing of both legal and illegal immigration.

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Speaker 2: Certainly, the relationship between the president and the Federal Reserve

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Speaker 2: is one that stands out. And there have been presidents

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Speaker 2: in the past who've disagreed with FED chairpersons and their decisions,

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Speaker 2: but this is something unique. The level of public criticism

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Speaker 2: that we've seen, denigration both of the FED chair and

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Speaker 2: the institution itself, intimidation through the courts. How far are

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Speaker 2: we mark from what that relationship between the White House

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Speaker 2: and the FED was like under previous administrations.

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Speaker 3: I mean, it's been sort of NonStop, you know, attacks

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Speaker 3: on Jerome Poal in particular for you know, not lowering

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Speaker 3: interest rates fast enough for the president's view, and it's

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Speaker 3: completely upended, you know, the relationship that we've come used

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Speaker 3: to between a presidential administration and the Federal Reserve and

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Speaker 3: sort of this long held idea, particularly since you know

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Speaker 3: Richard Nixon, that you know, the FED, which should have independence,

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Speaker 3: and that the US economy benefits when the FED is

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Speaker 3: allowed to make decisions about interest rates and monetary policy

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Speaker 3: separate from an independent from executive actions and executives' authorities

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Speaker 3: that are more interested in maybe the political outcomes than

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Speaker 3: the economic impacts.

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Speaker 2: These concerns about the fed's independents have caused the dollar

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Speaker 2: to weaken, raising questions about its role as the world's

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Speaker 2: reserve currency. And another relationship Trump has changed is the

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Speaker 2: one between the US government and private companies. It's taken

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Speaker 2: an equity stake in Intel and made a revenue sharing

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Speaker 2: agreement with Nvidia. Nancy, I'm sure that you have spoken

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Speaker 2: to traditional Republicans as I have, who just express astonishment

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Speaker 2: that this is the direction the Republican Party is going.

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Speaker 2: And now I mean suffice to say, this is a

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Speaker 2: sea change when it comes to Republican Party politics.

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Speaker 1: It has been a remarkable moment sort of seeing the

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Speaker 1: US government take stake and Intel, for instance. But Trump,

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Speaker 1: the thing about him is he always wants a deal

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Speaker 1: on the economy, and so what has happened is the

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Speaker 1: CEOs have gone in and you know, he's managed to

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Speaker 1: take stakes in the companies. Now, the argument that many

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Speaker 1: people in his administration make is he's taking stakes in

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Speaker 1: companies that are critical to national security, so like critical

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Speaker 1: minerals or you know, chip makers. But it is just

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Speaker 1: so interesting because it's also really this democratic idea of

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Speaker 1: you know, the government should be more involved in controlling things,

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Speaker 1: And it's really not something that traditional Republicans have thought of,

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Speaker 1: and so but it has become a really key part

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Speaker 1: of the Trump agenda. And I'm really curious just to

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Speaker 1: see what that looks like at the end of three years,

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Speaker 1: Like what companies does the US government partially own at

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Speaker 1: the end of the four year Trump term And is

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Speaker 1: that something that sticks beyond him If it's President j. D.

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Speaker 1: Vance or Marco Rubio is running for president, what do

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Speaker 1: they say about that? Is that really part of the

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Speaker 1: Republican idea at this point for the economy?

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Speaker 2: We dig into that question after the break. Presidents all

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Speaker 2: leave their mark on the country, some more than others.

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Speaker 2: A new president may try to undo the signature policies

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Speaker 2: of his predecessor or not. President Bind for example, did

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Speaker 2: not reverse the tariffs on China that President Trump put

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Speaker 2: in place during his first term. So to understand the

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Speaker 2: potential staying power of the big economic changes Trump pursued

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Speaker 2: last year, I asked Bloomberg's Nancy Cook and Marketquette how

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Speaker 2: difficult it might be for future administrations to reverse them. Think,

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Speaker 2: for example, the tax cuts in Trump's one Big Beautiful bill,

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Speaker 2: that big tax and spending bill.

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Speaker 3: The Trump administration is really counting on big economic boost

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Speaker 3: from that bill in twenty twenty six, from both the

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Speaker 3: continuation of the tax cuts that were enacted in his

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Speaker 3: first term and Congress didn't change in the interim. Also

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Speaker 3: those were augmented, you know, we had the no tax

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Speaker 3: on tips and no tax on overtime, and the administrations

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Speaker 3: counting on you know, a big boost from that. We've

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Speaker 3: seen estimates of thirty billion to one hundred billion dollars

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Speaker 3: in additional refunds for consumers as a result of these

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Speaker 3: tax cuts. But also there's business tax provisions in that

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Speaker 3: one Big Beautiful Bill, you know, allowing businesses to fully

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Speaker 3: expense capital investments, for example, and the expectation is that

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Speaker 3: we're going to see a big jump in capital expenditures

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Speaker 3: from companies as a result of these provisions in twenty

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Speaker 3: twenty six. So the combination of the consumer tax breaks

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Speaker 3: and the business tax breaks and the One Big Beautiful Bill,

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Speaker 3: I think we're going to see play out in twenty

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Speaker 3: twenty six, and that probably will go a long way

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Speaker 3: toward determining, you know, whether these breaks stay in effect.

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Speaker 3: You know, with the next administrations or if there's any

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Speaker 3: kind of adjustments made as a result.

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Speaker 1: You know, the Republican lawmakers I have would say on

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Speaker 1: most economic issues really haven't protested. It was in interesting

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Speaker 1: covering the tax bill and that moving through the Hill,

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Speaker 1: because there was Trump did have one idea at one

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Speaker 1: point where he wanted to raise taxes on millionaires. It

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Speaker 1: was a populist idea, and Republican lawmakers really put their

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Speaker 1: foot down there and that's one of the only instances

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Speaker 1: I can think of where they really told him. Now,

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Speaker 1: not publicly, but privately. There was a lot of discussion

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Speaker 1: between the Hill and the White House.

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Speaker 2: Market's all wrapped up in this issue of affordability, which

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Speaker 2: is something the President talked a lot about on the

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Speaker 2: campaign trail and has been more reluctant to talk about

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Speaker 2: in recent speeches. He claims he's made a lot of

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Speaker 2: inroads when it comes to affordability. As you survey the

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Speaker 2: economic landscape, has he.

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Speaker 3: I think you can point more to things that he's

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Speaker 3: done that have added costs to products or even inflation,

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Speaker 3: particularly with trade, than you can to things that he's

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Speaker 3: done to lower costs. I mean, I think that's one

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Speaker 3: of the reasons you're seeing President Trump roll out these

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Speaker 3: proposals like banning corporate ownership of single family homes or

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Speaker 3: capping credit card fees at ten percent a year. I

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Speaker 3: think it's sort of an acknowledgment that at least he

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Speaker 3: needs to be seen as doing more to address affordability.

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Speaker 3: But you know, we continue to see high prices for groceries,

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Speaker 3: beef and other products that I think is what's really driving,

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Speaker 3: you know, the depressed consumer sentiment surveys we're saying, where

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Speaker 3: you know, folks just don't feel good about the cost

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Speaker 3: of living or the direction of the economy.

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Speaker 2: The Trump administration is engaged in this kind of bold

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Speaker 2: experiment to change the global economy, change America's place in

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Speaker 2: the world. We've seen global supply chain shift, relationships change

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Speaker 2: that times has been in conflict with President Trump's desire

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Speaker 2: to tackle inflation and affordability concerns. What do folks you

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Speaker 2: talk to say about how long this is likely to

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Speaker 2: stay in place? Yes, during this administration, but after President

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Speaker 2: Trump leaves.

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Speaker 1: Office, I mean, I think that's just an open question.

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Speaker 1: One of the interesting things that I see happening in

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Speaker 1: the beginning of Trump's second year is that he is

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Speaker 1: really willing to break Republican orthodoxy and go after populist

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Speaker 1: economic ideas. He called Elizabeth Warren earlier this.

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Speaker 2: Week contexted with may or Mum Donnie.

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Speaker 1: Yeah, he didn't do it, but he thought about raising

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Speaker 1: taxes on millionaires. He has thought about sort of capping

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Speaker 1: credit card interest payments. And so the thing that I

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Speaker 1: am looking for for the next three years is Trump

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Speaker 1: already really changed Republican's approach to trade, let's say, and

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Speaker 1: now they think about trade totally differently, and Democrats left

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Speaker 1: some of those policies in place. And so how much

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Speaker 1: does Trump's populist agenda, which is sometimes populist and sometimes

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Speaker 1: actually not, how much does that sort of end up

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Speaker 1: changing the whole conversation about economic policy. Because when I

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Speaker 1: first came to Washington in twenty eleven, you know, people

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Speaker 1: of both parties were concerned about, you know, taxes, but

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Speaker 1: they were also really concerned about the deficit. And now

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Speaker 1: it's like the things that the real policy issues that

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Speaker 1: I see in Washington as being really the kind of

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Speaker 1: anchors of an economic agenda are the cost of housing.

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Speaker 1: What's going to happen with AI, What's going to happen

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Speaker 1: with electricity bills. You know, things shift based on what

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Speaker 1: people are concerned about, and so for me, I'm just

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Speaker 1: really curious to see how Republicans take sort of some

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Speaker 1: of these populous threads that Trump appears really open to.

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Speaker 1: How do they deal with them moving forward. Republicans are

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Speaker 1: not really the party of lower taxes and less regulation anymore.

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Speaker 1: They still like those things, but there's a lot of

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Speaker 1: different things in the mix, and it's unclear to me

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Speaker 1: what the party will take as their platform moving forward,

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Speaker 1: and I think that's going to be one of the

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Speaker 1: most interesting things to watch over the next three years.