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Speaker 2: I will not mince words.
Speaker 3: This is a required read for anybody inside the Beltway
Speaker 3: this morning.
Speaker 2: It is a book from a time ago.
Speaker 3: Paul, you walked around because you were cool, because Douglas
Speaker 3: had a book with a sailboat on the cover as
Speaker 3: a lightful book that was against the tide, and it
Speaker 3: was absolutely definitive. I read every word of it, and
Speaker 3: we're thrilled that Professor Irwin could join us from Dartmouth today.
Speaker 3: Let me just get out of the way. Dougarr won
Speaker 3: a cup of coffee with a president this morning as
Speaker 3: he prepares the State of the Union. What would be
Speaker 3: your counsel to President Trump.
Speaker 4: I don't think you'd want to hear anything i'd have
Speaker 4: to say. I'd say the Supreme Court gave him hit
Speaker 4: him a favor by trying to put these tariffs on pause.
Speaker 4: But of course President has just reimposed these similar tariffs
Speaker 4: using different authority, so it had It was a very
Speaker 4: important decision. It was a very historic one, but just
Speaker 4: shunted the president to using different statutory authorities to levy tariffs,
Speaker 4: and he's going.
Speaker 2: To move forward with them.
Speaker 3: Will we see a legal battle of these new tariffs,
Speaker 3: Claudia Sum, it's away from her remit, which is monetary economics.
Speaker 3: But Professor Irwin, do you just assume further legal battles
Speaker 3: about ten percent or fifteen percent, one twenty whatever, two
Speaker 3: thirty this.
Speaker 4: Yeah, a lot of numbers are being thrown around in
Speaker 4: terms of the statutes. Yeah, so the new tariffs, which
Speaker 4: are ten percent, he's promised fifteen percent, but they haven't
Speaker 4: issued the executive order on that quite yet. Those will
Speaker 4: probably be subject to legal challenge. And that's because the
Speaker 4: statute allows for the president to impose tariffs in the
Speaker 4: cases of a balance of payments, deficit or disequilibrium, and
Speaker 4: it's not clear that in an era of floating exchange grades,
Speaker 4: whether it's actually a thing exists anymore.
Speaker 2: Now.
Speaker 4: The other side is that the terroffs can only be
Speaker 4: in effect for one hundred and fifty days and then
Speaker 4: it require congressional approval. So there's a lot of uncertainty
Speaker 4: about how this is going to play out over the next.
Speaker 2: Couple of months.
Speaker 5: Professor I guess most of our viewing and listening to
Speaker 5: audience what they know about teriffs they've learned over the
Speaker 5: last six, seven, eight years, which is just massive tariffs
Speaker 5: on all types of countries, all types of products across
Speaker 5: the board. But typically, how are tariffs historically used and
Speaker 5: how can they be most useful?
Speaker 4: Well, that's really why this administration marks such a sharp
Speaker 4: break from what we've seen in terms of historical experience.
Speaker 4: You know, you've probably mentioned smooth Holly on the air
Speaker 4: over the past couple of years. Before that actually smoothly itself.
Speaker 4: Congress determined tariffs. It's part of the legislative power of
Speaker 4: tax It's in Article one, section eight of the Constant.
Speaker 4: It was basically Congress's decision.
Speaker 2: What to do.
Speaker 4: Then powers began, delegate began being delegated to the president,
Speaker 4: and we entered the era after World War Two of
Speaker 4: the president negotiating trade rooms to reduce terifts and the
Speaker 4: tariffs have been sort of on a one way path
Speaker 4: down since World War Two. And that's when entered Trump
Speaker 4: and also when they start and that same authority starts
Speaker 4: being used to increase terrans once again across different products,
Speaker 4: across different countries in all manner of way.
Speaker 2: Worldwide and across the nation.
Speaker 3: This morning, Douglas Irwin of Dartmouth College, he is our
Speaker 3: definitive expert on trade only standing with him as Barry
Speaker 3: Ke and Green of Berkeley, we'll get professor I can
Speaker 3: agree on in a bid out with his new book,
Speaker 3: Paul Sweeney with Professor Irwin.
Speaker 5: Professor, we had the New York Fed come out with
Speaker 5: a report, I guess a week or so ago that said,
Speaker 5: you know, ninety percent issue of the tariffs have been
Speaker 5: born by the American economy, either importers, companies, and even consumers.
Speaker 5: Obviously the White House pushing back on that. Who pays
Speaker 5: Who pays really at the end of the day for tariffs.
Speaker 4: Well, the importer in the US actually writes the check,
Speaker 4: but then they pass it on to whoever they're selling
Speaker 4: the products to, and it sort of goes a lot
Speaker 4: of the value chain. That Federal Reserve, that FED study,
Speaker 4: it's been sort of erupted that finding that ninety percent
Speaker 4: of the terrorists get passed through to domestic purchasers. Either
Speaker 4: final consumers or businesses along the way. That's been confirmed
Speaker 4: by you know, at least half a dozen other studies.
Speaker 4: So study after study has sort of consistently shown that
Speaker 4: both for the Trump first term tariffs as well as
Speaker 4: these most recent lines.
Speaker 3: Medlon Marshall has a fabulous video out at the Wall
Speaker 3: Street Journal. I put it out about a week ago, folks.
Speaker 3: I'll redo that with the academic input of Douglas Irwin.
Speaker 3: Doug Your's three hours of trade policy, revenue restriction, reciprocity.
Speaker 3: We're not going to acquisit the end of the interview,
Speaker 3: but professor, and they're very chronological, and what I find
Speaker 3: interesting is the restriction using high tariffs to restrict the
Speaker 3: imports of McKinley in post Civil War America. I mean,
Speaker 3: they were all shown the door in the voting in
Speaker 3: eighteen ninety. The Republicans, including McKinley, basically lost their jobs.
Speaker 3: Do you anticipate that in November a McKinley eighteen ninety
Speaker 3: kind of vote by America.
Speaker 4: Well, that's a very interesting historical observation, and you're right
Speaker 4: it does have some residents for today. So I mentioned
Speaker 4: the new statutory authority that the President's levied these tariffs.
Speaker 4: After one hundred and fifty days, he might have to
Speaker 4: ask Congress to re up those tariffs. Does Congress want
Speaker 4: to vote for higher tariffs in the summer before midterm elections,
Speaker 4: when Republicans are already divided over trade policy? I don't
Speaker 4: think so. So it leads into the affordability AGCA in prices,
Speaker 4: and so I think tariffs could be toxic come this fall.
Speaker 3: What should China do? There's a lot of the press
Speaker 3: today about how China responds. I guess the president is
Speaker 3: going to Maybe Doug Irwin's going to carry the President's
Speaker 3: luggage to China.
Speaker 6: Could do that.
Speaker 2: I can see it.
Speaker 3: He could stay in Hong Kong and Shanghai rather at
Speaker 3: the Piece hotel where Henry Kissinger state yep, I mean
Speaker 3: it could do that. Professor Irwin, if you were to
Speaker 3: go to China with the president, how do you discuss
Speaker 3: this with Beijing and how do they respond?
Speaker 7: Well?
Speaker 4: I think what Beijing is looking for is stability in
Speaker 4: the bilateral relationship, and that's exactly what we don't have
Speaker 4: at the moment.
Speaker 5: Now.
Speaker 4: We do have special tariffs on China under a different
Speaker 4: provision of trade law, and those can be subject to negotiation,
Speaker 4: but we're sort of in this uneasy truce with Beijing
Speaker 4: about they're not going to restrict rare earths and we're
Speaker 4: not going to impose further tariffs. How we move out
Speaker 4: of that remains to be seen, and it really depends
Speaker 4: on what the administration has in mind. And then Beijing,
Speaker 4: I think is holding its cards close to his chest
Speaker 4: and probably won't do much until it sees what the
Speaker 4: administration wants.
Speaker 6: Professor. One of the I guess.
Speaker 5: The results of the Supreme Court decision last week is
Speaker 5: maybe some companies, some individuals may want to get some
Speaker 5: rebates of the tariffs that they've incurred in. Just today,
Speaker 5: FedEx sues the United States to get full refund of
Speaker 5: emergency tarriffs after Supreme Court ruling.
Speaker 6: Do we have any idea how that process would work.
Speaker 4: We have no idea at the moment. So the administration
Speaker 4: has promised that there will be rebates, but they could
Speaker 4: be slow walked, and that's why I think we'll see
Speaker 4: lawsuits to try to accelerate the process. It could take
Speaker 4: months or even years. Doesn't necessarily have to take that long,
Speaker 4: but it's clear the administration is reluctant to give up
Speaker 4: that revenue, and no processes identified, at least as far
Speaker 4: as I know about what the process will be to
Speaker 4: adjudicate all those claims for the revenue that is amounting
Speaker 4: to tens of billions of dollars to going back to
Speaker 4: American businesses that imported foreign goods.
Speaker 3: Come on, Blache Flower is gonna say, dougg Ruin, David Armth,
Speaker 3: just print more debt. I mean, do we need that revenue?
Speaker 3: I mean, I haven't seen a clear case that we must, must,
Speaker 3: must have the revenue. The first of your.
Speaker 4: Three rs, Well, you're right that the Trump administration has
Speaker 4: used all three of those ours, and revenue has been
Speaker 4: an important one. And they certainly made the case on
Speaker 4: for the tariffs on the revenue grounds. But they're legally
Speaker 4: obligated I think to turn it back. But the question
Speaker 4: is it's not a matter of government have the money,
Speaker 4: but can they go back through the records and isolate
Speaker 4: those who those firms that actually paid the tariffs in
Speaker 4: the first place.
Speaker 3: The continuum of your against the tide, folks, I can't
Speaker 3: emphasize enough. It was like Daniel Jurgen's surprise. Even if
Speaker 3: you didn't read it, you walked around with it because
Speaker 3: it was cool.
Speaker 2: You had to be cool. So Dougrans against the tides.
Speaker 3: The absolute foundation of your book is Robert Solo.
Speaker 2: Technology.
Speaker 3: Technology comes to the rescue is America expands and that
Speaker 3: do you just assume our international trade tensions, Doug Irwin
Speaker 3: will get fixed by further technology leadership in America.
Speaker 4: I think the two are interrelated. I think that the
Speaker 4: US leadership in technology and other matters gets disrupted with
Speaker 4: all these trade frictions across countries and the tariffs that
Speaker 4: are going up and down and can change on a whim. So,
Speaker 4: you know, trade disrupts that process of spreading technology around
Speaker 4: the world. It inhibits our ability to export to other
Speaker 4: countries because there's implicit retaliation against the US, and it
Speaker 4: disrupts all the business relationships that are needed to provide
Speaker 4: the funds for more R and D. So it's not
Speaker 4: good for our technological development. But at the same time,
Speaker 4: technology does march to its own drama to some extent
Speaker 4: and will continue to move forward regardless of what is
Speaker 4: happening on the trade front.
Speaker 5: Professors, is it reasonable to assume that this Supreme Court
Speaker 5: decision may embold in Congress to try to reassert some
Speaker 5: of it's already over tariff policy.
Speaker 4: Well, it certainly was a wake up call, and some
Speaker 4: of the justices really did call out Congress and not
Speaker 4: so many words, saying you have to step up. It's
Speaker 4: really your responsibility under the Constitution to adjudicate an oversee
Speaker 4: trade policy. Question is whether they'll do it under this administration.
Speaker 4: I think Congress would act with act with great trepidation
Speaker 4: in trying to pull back some of the powers it's
Speaker 4: delegated to the president. But I think there is a
Speaker 4: medium term agenda for future Congresses and future administrations to
Speaker 4: write rethink US trade law and ensure that we don't
Speaker 4: go through the mess in the model that we've gone
Speaker 4: through over the past year.
Speaker 5: Professor, is the concept of free trade? Is that still
Speaker 5: relevant in today's global economy?
Speaker 2: I think it.
Speaker 4: Always remains relevant to some extent. Now, free trade doesn't
Speaker 4: mean absolutely no barriers and no interventions whatsoever, but I
Speaker 4: think we do have to distinguish and former Vice President
Speaker 4: Mike Pence has sort of made this clear that between
Speaker 4: you know, what he's called for is free trade with
Speaker 4: free nations, and we have to think about trade as
Speaker 4: part of our alliance system as a way of working
Speaker 4: with allies and then separating out those countries that are
Speaker 4: adversaries and we don't want to treat them the same
Speaker 4: in terms of our trade policy, because that's an extension
Speaker 4: of our foreign policy.
Speaker 2: Oh, this is a really good point here.
Speaker 3: We're going to have to leave here in a big
Speaker 3: Professor Irwin, but off of your wonderful article and essay,
Speaker 3: I should say in the Economist here in the last
Speaker 3: couple of days, can you explain while we're going after
Speaker 3: Canada and not China. I mean, I know that I
Speaker 3: still call them. Governor Kearney from the Bank of England,
Speaker 3: Mark Kearney, good morning and everyone up in Ottawa, Doug Irwin.
Speaker 3: Why are we going after Canada when we have true
Speaker 3: adversaries that we're trading with.
Speaker 2: That's a great question.
Speaker 4: Unfortunately I'm giving a talk in Canada about two weeks,
Speaker 4: so I don't have to think this through for our
Speaker 4: Canadian friends up there.
Speaker 2: Careful, you may lose your teeth.
Speaker 4: Yes, high sticking off the cocktail the Dartmouth hockey team
Speaker 4: about how they prevent such things that from happening. But
Speaker 4: you know, I don't know whether it's a personal relationship
Speaker 4: that Donald Trump didn't forage with Justin Trudeau, whether there's
Speaker 4: some real estate deals that went bad in the past,
Speaker 4: whether some other aggrieved parties within the administration that speaking
Speaker 4: to the President ill of Canada.
Speaker 2: But I agree with you.
Speaker 4: In some sense, it just doesn't make sense that here
Speaker 4: we've had peaceful, cooperative relations with this great neighbor to
Speaker 4: the north of US for so many decades, and yet
Speaker 4: we're jeopardizing that with these trade wars.
Speaker 3: One final question, I mentioned Davenport, Iowa, the first district
Speaker 3: of Iowa, where the congresswoman is fighting for her life.
Speaker 3: What is your counsel to Republican House of Representative types
Speaker 3: on the precipice of losing their seats, what should they
Speaker 3: do on trade?
Speaker 4: Well, I think they really have to speak their constituents
Speaker 4: about how in certain ways they differ from the president.
Speaker 4: Once again, in the West farm states, they've been hammered
Speaker 4: with foreign retaliation against our agricultural exports. So American farmers
Speaker 4: are really suffering, and so they have to offer some
Speaker 4: sort of promise that there's a better days ahead in
Speaker 4: terms of the ability of the US farmers to export
Speaker 4: in other countries. And we're just not seeing it under
Speaker 4: this administration.
Speaker 2: Where in God's name is the update to Against the Tide?
Speaker 6: Yeah, exactly are you smashing off, Dougerwin?
Speaker 3: When do we get the next three chapters of Against
Speaker 3: the Tide?
Speaker 4: I'm not sure, but I've got another book called Free
Speaker 4: Trade under Fire. There's any time free trade has been
Speaker 4: under fire that one's due for a revision.
Speaker 3: Very good, Douglas Irwin, Thank you so much, just wonderful,
Speaker 3: generous of your time.
Speaker 2: This morning is a Dartmouth stay with us.
Speaker 3: More from Bloomberg Surveillance coming up after this.
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Speaker 3: This is a really good time to talk to Cam Dawson.
Speaker 3: I'm just going to cut to the chase. You're on
Speaker 3: the cover of Barons this weekend. They give you lots
Speaker 3: of play as they deservedly, as you deserve and they should.
Speaker 3: And the question is simply going to be there, is
Speaker 3: this the opportunity of a lifetime to reset in a
Speaker 3: beleaguered mag seven.
Speaker 8: Well, I think that a lot of people have been
Speaker 8: considering it that because if you look at the flows
Speaker 8: into the software ETF, they've been a record relating that
Speaker 8: the dip buyers have been out in force. And I
Speaker 8: think that a lot of people are trying to catch
Speaker 8: that proverbial falling knife. I think the question is is
Speaker 8: or have you seen enough damage to some of these
Speaker 8: what were powerful uptrends to start forming into what could
Speaker 8: be more distributional kinds of patterns. And I think at
Speaker 8: this point we wouldn't be stepping into some of the
Speaker 8: areas is like a software necessarily. I think the one
Speaker 8: key thing is that a lot of these areas have
Speaker 8: been a monolith on the way down. We don't think
Speaker 8: that there'll be a monolith on the way up. And
Speaker 8: this is where we're starting to sharpen our pencils to
Speaker 8: say who are those who will truly be disrupted and
Speaker 8: who are those who could actually benefit from this AI.
Speaker 5: SMP equal weighted up five to six percent, SMP SPX
Speaker 5: actually flat for the year. We don't we rarely see that.
Speaker 5: I guess, so that broadening out trade seems to be
Speaker 5: a thing so far.
Speaker 8: I think the way we would frame it is that
Speaker 8: this market has not been risk off, it's been risk swap. Effectively,
Speaker 8: we are swapping out of the areas of the market
Speaker 8: that we think are AI disrupted into areas that either
Speaker 8: benefit from the AI infrastructure or those that cannot be disrupted.
Speaker 8: HURT a really great new acronym called HALO from the
Speaker 8: Saxo podcast. It stands for high asset low obsolescence. So
Speaker 8: people are crowding into areas of the market that they
Speaker 8: think cannot be disrupted by AI. The challenges those areas
Speaker 8: are higher, higher acid intensity, and lower return on Investigator.
Speaker 3: Kiman Dawson with us here the equity markets, right Paul's talking,
Speaker 3: I'm using the Bloomberg to really look at the charts
Speaker 3: and the technology.
Speaker 2: We'll get to that in a moment.
Speaker 3: But the draw it out on Nasdaq futures Paul back
Speaker 3: to November is all of seven percent.
Speaker 5: Yeah, I would have thought it was fifteen or twenty
Speaker 5: percent exactly. Can We're pretty much through most of the
Speaker 5: earnings so far here. This cycle pretty darn solid. I think,
Speaker 5: how do you think, how do you view earnings and
Speaker 5: what does the market need to see from this earnings
Speaker 5: going forward?
Speaker 8: What's fascinating is that, yes, the earnings have been strung.
Speaker 8: You've been revising up estimates for four Q. They're coming
Speaker 8: in at thirteen percent versus the expected eight percent at
Speaker 8: the start of the quarter. If you look at twenty
Speaker 8: twenty six numbers, those have been revised higher. You're actually
Speaker 8: even revising higher twenty twenty seven numbers, if you can
Speaker 8: even believe so. People are expecting thirteen percent this year,
Speaker 8: thirteen percent growth next year. But all of the pain
Speaker 8: has been coming from the multiple, from the valuation, because
Speaker 8: it does appear like this market is not as eager
Speaker 8: to extrapolate today's earnings power ever into the future.
Speaker 3: Such An Adelegan out tweeting for Microsoft today he's in
Speaker 3: London on regulatory and that'll be their response to these
Speaker 3: real sensitivities of AI. Over at Mike Allen over at Axios,
Speaker 3: really writing up the tension in the State of the
Speaker 3: Union speechs at Washington about artificial intelligence? Can I go
Speaker 3: tech with Cam? Sure, Nerd, let's get practice. You're going
Speaker 3: to be in Phoenix with me next week?
Speaker 4: Right?
Speaker 9: Sure?
Speaker 2: All nerds?
Speaker 3: Phoenix From the CFA Society Kim Dawson and Tom kit Okay,
Speaker 3: the price of Microsoft is back to early twenty twenty four.
Speaker 3: I don't have a cell signal on weekly climate exponential
Speaker 3: moving averages. I don't have a violation of two monthly
Speaker 3: units of parabolic sort.
Speaker 2: What this means is trends in place, but we really
Speaker 2: haven't broken down. Yeah, well that's simple.
Speaker 8: Well, I think that that is the key point, which
Speaker 8: is that right now within the broader Software index, we
Speaker 8: are sitting at exactly the two hundred week moving average,
Speaker 8: not two hundred day two hundred week moving average. This
Speaker 8: has been such powerful support ever since the low's coming
Speaker 8: out of the Great Financial Crisis. Anytime there has been
Speaker 8: a whoopsie in markets, we've gotten to that week move
Speaker 8: that two hundred week moving average. The question is does
Speaker 8: it hold this time?
Speaker 3: Alexis Christopher says, Tom lose the technical mamo jumbo.
Speaker 2: They'll tip there.
Speaker 3: Folks from the pro Cam Dawson is the big mistake
Speaker 3: is to only look at daily charts.
Speaker 2: The pros look weekly.
Speaker 5: Paul sweeing, So Cam's what's screening well for you these days?
Speaker 6: Is it? Is it an industry? Is it a factor?
Speaker 6: What's screaming well well? For the last year or so?
Speaker 8: My colleague Brian coined the term we have to shore
Speaker 8: up the sixty inequity market portfolios, and what that means
Speaker 8: is that we didn't want to be over concentrated in
Speaker 8: one factor, over concentrated in one style. So if you
Speaker 8: rode the growth wave up and you were way overweight growth,
Speaker 8: it was a great opportunity to add some more value
Speaker 8: into portfolios being a bit more balanced. There add international
Speaker 8: into portfolios. Remember the international weight in the Global index,
Speaker 8: so that ACQUI index is about thirty percent, which meant
Speaker 8: that most of our clients were by definition underweight international,
Speaker 8: so there was room to move those allocations higher. So
Speaker 8: all that means is that diversification is now a really
Speaker 8: good friend. Over the course of effectively the last eighteen.
Speaker 3: Months, quickly, do you think the tech companies will finally
Speaker 3: grow up and issue normal debt just going to go
Speaker 3: out like Google did and billions of dollars of debt?
Speaker 8: I mean, I thought that there was a really interesting
Speaker 8: note in the ft from Moody's today talking about effectively
Speaker 8: how a lot of the tech companies are using some
Speaker 8: accounting gimmick it I mean, and you know, being able
Speaker 8: to not have things be on the balance sheet that's
Speaker 8: typically what we see in late cycles. Ops. You off,
Speaker 8: you skate some of the cash flows in order to
Speaker 8: make things look better. You do not play tricks with cash.
Speaker 8: If everything is awesome.
Speaker 3: Thank you so much, and I'll go into detail, folks.
Speaker 3: And the wonderful work the f he did in the
Speaker 3: last twenty four is on this Kim Dawson, Cameron Dawson,
Speaker 3: New Edge.
Speaker 2: Wealth, Manage It. Stay with us.
Speaker 3: More from Bloomberg Surveillance coming up after this.
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Speaker 2: Joining us now from Washington.
Speaker 3: The voice I want to speak to I went to
Speaker 3: the State of the Union ones, folks, and basically it's
Speaker 3: a lot of meat and glad ahead and all that,
Speaker 3: but underneath the substance. Nathan Dean, senior US policy analyst,
Speaker 3: Bloomberg Intelligence.
Speaker 2: What's the substance tonight, Nathan?
Speaker 9: So, I think there's three themes that we're telling our
Speaker 9: clients to watch out for. The first is geopolitics. And
Speaker 9: the reason why this is so important is for everything else.
Speaker 9: President Trump says tonight, there's a process, we can work
Speaker 9: the process, and there's time to respond. For geopolitics, that
Speaker 9: can change in an instance, So obviously keep an eye
Speaker 9: on what he says there.
Speaker 10: The other is tariffs. He's going to double down on tariffs.
Speaker 9: I don't think you're going to see any new information
Speaker 9: coming out from Tariff's but he's going to double down,
Speaker 9: and he's going to have to look the Supreme Court
Speaker 9: in the eye and say, why did you essentially reverse
Speaker 9: my AAEPA tariffs. But when it comes to affordability, you know,
Speaker 9: we're seeing a lot of headline risks and opportunities. We
Speaker 9: don't anticipate a lot of new ideas. Potentially President Trump's
Speaker 9: talking about this idea of a new four oh one
Speaker 9: K for you know, Americans that don't have employer sponsored programs.
Speaker 9: But the thing about headline risk is that for anything
Speaker 9: that comes that President Trump says, like cutting credit card
Speaker 9: interest rate caps, you know in just at ten percent,
Speaker 9: requires an active legislation.
Speaker 10: It's going to be very difficult to get through in
Speaker 10: an election year.
Speaker 3: I have been saying, folks, really off the mic, to
Speaker 3: be honest, where is the military and the discussion of Iran.
Speaker 3: And there it is Nathan Deane those photographs and that
Speaker 3: cover the Washington Post, the chairman of the Joint Chief
Speaker 3: of Staff, And the reporting is they're saying, slow down
Speaker 3: into this State of the Union tonight, how will the
Speaker 3: president address the military and preparations in the Middle East?
Speaker 9: So it really comes down to the fact that, you know,
Speaker 9: are we going to see what Bloomberg News is reporting
Speaker 9: of this limited strike? Are we going to see negotiations
Speaker 9: take place on Thursday? I mean that's really I think
Speaker 9: the signal that we're looking for.
Speaker 10: You know, we're we're you know, we're we're.
Speaker 9: Seeing a lot of what Bloomberg Economics is putting out
Speaker 9: on the subject, and either they've just been saying that
Speaker 9: like look, you know, we've got a significant number of
Speaker 9: assets in the region and they can't stay there forever.
Speaker 9: So you know, we're going to look for words. It
Speaker 9: essentially says, you know, are we going to offer the
Speaker 9: olive branch?
Speaker 10: Are we going to.
Speaker 9: Try and drive this you know, more of a force,
Speaker 9: if you will, to bring people to the table. But again,
Speaker 9: you know, this idea of limited strike is really what's
Speaker 9: the idea that's floating around Washington at the moment.
Speaker 6: Nathan, it is an election year. How to typically do
Speaker 6: presidents use this.
Speaker 5: State of the Union address during an election year, particularly
Speaker 5: when President Trump's approval ratings are lower their Republicans in
Speaker 5: the ranks are a little bit concerned about some of
Speaker 5: those trends.
Speaker 10: Great question.
Speaker 9: You know, the State of the Union starting election years
Speaker 9: are always campaign speeches, and that's what people should be
Speaker 9: thinking of when they watch tonight.
Speaker 10: You know, President Trump isn't going to move to the middle.
Speaker 9: He's going to try and drive a little bit deeper
Speaker 9: in terms of bringing back you know, optimism, if you will,
Speaker 9: amongst the Republican Party, because if you look at the
Speaker 9: prediction markets, you know, the odds are favoring that the
Speaker 9: Democrats are going to take the House and they have
Speaker 9: a little bit stronger opportunity of taking the Senate. So
Speaker 9: I think you're going to see President Trump come back
Speaker 9: to Republican ideas to try and drive optimism amongst the party.
Speaker 9: You're not going to see Democrats really, you know, stand
Speaker 9: up and clap for the president all that much. It's
Speaker 9: going to be very much a partisan speech, and that's
Speaker 9: something that we should take in mind when he says
Speaker 9: statements like I want to do this, can you get
Speaker 9: that through an election year? In a lot of cases,
Speaker 9: you know, presidents can't do that.
Speaker 6: Is there pushback?
Speaker 5: I guess the question is what level of pushbacks are
Speaker 5: in DC amongst the folks down there about this whole
Speaker 5: tariff policy. It doesn't seem to be polling particularly well.
Speaker 5: Yet the President is very adamant aout doubling down, tripling down.
Speaker 9: So it's not really there's much pushback in the way
Speaker 9: of just the uneasiness. And the way that the Republicans
Speaker 9: are approaching this is they're essentially saying, look, I just
Speaker 9: would prefer to talk about something else, you know, because
Speaker 9: even though you have the Republicans who are signaling that
Speaker 9: they are at ease about tariffs, they're not going to
Speaker 9: push back on the President's certainly during an election year
Speaker 9: when they need his support in the primary season.
Speaker 10: So you know, maybe after.
Speaker 9: The primary seasons, think may you could see additional pushback,
Speaker 9: But right now the Republicans are just going to say
Speaker 9: hands off. And that's one of the reasons why I
Speaker 9: don't think a reconciliation bill can get forward. So when
Speaker 9: you hear senators say, I want to codify President Trump's tariffs.
Speaker 10: It's just probably not going to happen.
Speaker 3: Nathan, you are more qualified than anyone at Bloomberg to
Speaker 3: talk about this. When you go Norris from Harry's Chocolate Shop,
Speaker 3: it produe boiler.
Speaker 2: Up, Nathan Deane, can you go up?
Speaker 3: And you go across the width of Illinois and all
Speaker 3: all of a sudden, there's a river and there's Devenport.
Speaker 3: The President asks to speak tonight to Marionette Miller Meeks
Speaker 3: of the first District in Iowa. She's fighting for her life.
Speaker 3: What does President Trump have to say to Congresswoman Miller
Speaker 3: Meeks of Devenport.
Speaker 9: It has to be about affordability, and affordability and affordability.
Speaker 9: And this is one of the problems for the Republican
Speaker 9: Party at the moment, because you're gonna hear President Trump
Speaker 9: talk about significant number of ways to cut down costs
Speaker 9: for consumer goods, but in the same breath he's embracing tariffs,
Speaker 9: which we would argue has an inflationary impact as well.
Speaker 10: And so this is really a muddled message.
Speaker 9: But President Trump has to essentially tell the American people
Speaker 9: that he understands the costs are going up, and when
Speaker 9: his message is essentially said, we're bringing costs down and
Speaker 9: inflation is down, it's a difficult.
Speaker 10: Message for a lot of people together.
Speaker 3: Nathan, we have to go because I have to save
Speaker 3: time at the end of this block to point out
Speaker 3: to Purdue his number eight ranked in the nation and
Speaker 3: Duke is ranked number one.
Speaker 2: So we got to move on to get to that.
Speaker 2: March madness. Nathan Dean in.
Speaker 3: Charge of our boiler up operation in Washington and of
Speaker 3: course all of our policy.
Speaker 2: Just wonderful to speak to him on this Stay with us.
Speaker 3: More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
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Speaker 3: This is going to be another interview of a spectacular
Speaker 3: foreign affairs article, but things have changed in the last
Speaker 3: twenty four hours.
Speaker 2: On the front of the Washington Post.
Speaker 3: On the front of the New York Times, a still
Speaker 3: photograph of the Chairman of the Joint Chief of Staff
Speaker 3: looking lonely separate in a part the reporting by different
Speaker 3: media is simple. The military pushing am back against Oval
Speaker 3: office thoughts of Iran. NaIO Shadlow joins US now a
Speaker 3: spectacular foreign affairs issue because sure Mabu Bani, among others.
Speaker 3: A great article in Germany Professor Shadlow writing why America
Speaker 3: must build a new operating system? How alone is the
Speaker 3: President Nada looking at a new operating system? Is he
Speaker 3: looks to Tehran? The military seems to be saying slow down.
Speaker 7: Well, he's not alone overall in that my article essentially
Speaker 7: was an argument about how the global approach to problem
Speaker 7: sets has not.
Speaker 11: Worked and has.
Speaker 7: Not solved problems, and in a sense Iran is a
Speaker 7: good example of that in that for some forty seven
Speaker 7: years we've seen the Iranian regime grow in strength, create
Speaker 7: regional chaos, kill thousands upon thousands of its own people,
Speaker 7: and grow its nuclear program right most importantly for the
Speaker 7: United States and for Israel to threaten Israel, our allies
Speaker 7: in the region, and potentially the United States that the
Speaker 7: Iranian regime has called the Great Satan for many.
Speaker 11: Many years.
Speaker 7: So it's actually a good example of how global institutions
Speaker 7: writ large have not been that successful by their own measure.
Speaker 7: In solving some of these key problems. These are difficult problems.
Speaker 7: You're not going to necessarily solve all of them. But
Speaker 7: even in managing them, the President is now in a
Speaker 7: position where he sees that this may be the best
Speaker 7: chance ever of finally degrading the Iranian nuclear program right.
Speaker 7: For years and years, for decades, other approaches have not worked.
Speaker 7: Iran is at its weakest in many, many years, largely
Speaker 7: also because of the June strikes, Operation Midnight Hammer.
Speaker 11: But you know now, yeah, he's considering a course.
Speaker 7: Of action which he thinks will put the United States, Israel,
Speaker 7: and our allies in a better position. The Chairman of
Speaker 7: the Joint Chiefs is right to point out the risks
Speaker 7: of military action. There are always risks of military action.
Speaker 7: It certainly would not be easy. In US history, all
Speaker 7: of the wars that we've been involved with have had
Speaker 7: to deal with the political ramifications of war, the need
Speaker 7: to stabilize the country, the need to create better political
Speaker 7: outcomes than when you went in. So it's not going
Speaker 7: to be easy if the President chooses to go.
Speaker 6: In Nadia again.
Speaker 5: The President and the US has assembled quite the armada
Speaker 5: in that.
Speaker 2: Part of the world.
Speaker 6: We have two carrier strike groups there.
Speaker 5: It's a show of force that we've not seen there
Speaker 5: in a very, very long time. What do you think
Speaker 5: the views of the Iranians here when they look at
Speaker 5: that amount of the force that's been assembled.
Speaker 7: I think the Iranian regime says, you know, President Trump
Speaker 7: is serious, right, They see the potential for destruction, great
Speaker 7: destruction in their country. I think they're taking it seriously.
Speaker 7: And I think the President did the right thing by
Speaker 7: assembling this this huge strength of military force, the largest
Speaker 7: in the region since the two thousand and three, since
Speaker 7: the two since two thousand and three.
Speaker 11: So I think it's the right course.
Speaker 7: You want to show you off your military power to
Speaker 7: deter to potentially get the Iranians to come to an agreement.
Speaker 7: So far they haven't come an agreement. In some ways,
Speaker 7: it's in their hands, right. I mean, the President clearly
Speaker 7: wants a negotiated settlement. He wants a settlement that will degrade,
Speaker 7: get rid of Iran's nuclear program, degrade its ballistic missiles,
Speaker 7: all of those things.
Speaker 2: He said, what is the distinction, folks.
Speaker 3: Natty's Shadlow with us from the Hudson Institute senior fellow
Speaker 3: brilliant article in foreign affairs. What is this distinction that
Speaker 3: Nadia between the globalist delusion of Nadia's Shadlow and Ian
Speaker 3: Bremer's every nation for itself.
Speaker 7: I'm not arguing, you know, I didn't, I didn't need
Speaker 7: I need to read Ian's article, but I'm not I mean,
Speaker 7: maybe we're not. My argument points out that by its
Speaker 7: own measures, the United Nations, for instance, and other global
Speaker 7: institutions have not achieved what they said they have wanted
Speaker 7: to achieve. Climate is a perfect example. For twenty five
Speaker 7: thirty years, climate has been a key focus of this
Speaker 7: global group think movement, and yet the numbers aren't there,
Speaker 7: So maybe we need to try something new. I'm arguing
Speaker 7: that power resides in states. It's a state centric system.
Speaker 7: But that's a good thing. It's okay, that's the way
Speaker 7: the world works, and if you acknowledge that as a
Speaker 7: starting point, maybe you'll get to better outcomes.
Speaker 11: I think others who.
Speaker 7: Argue against a state centric approach see it as sort
Speaker 7: of a Hobbesian world of everyone fighting against each other.
Speaker 7: I'm not arguing that. I just argue that if you
Speaker 7: acknowledge that states have power, are the source of power,
Speaker 7: and you begin from that, you create a way of
Speaker 7: doing things that might lead you to.
Speaker 11: A better place. I'm arguing for cooperation.
Speaker 7: You need cooperation, but not necessarily through these hugely bureaucratic institutions.
Speaker 7: Work with other like minded countries. And I argue that
Speaker 7: it's really important for democracies because we're seeing over and
Speaker 7: over again the difficulty of actually getting things done. We
Speaker 7: see this domestically too, and it hurts democracies. It hurts
Speaker 7: confidence in the American system. People want to see that
Speaker 7: the promises are kept and that outcomes are achieved. So
Speaker 7: I'm arguing for a different operating system, meaning a different
Speaker 7: approach to solving problems and to going more to a
Speaker 7: level where you're approaching things from coalitions of the willing,
Speaker 7: smaller scale, beginning at the local and working your way up,
Speaker 7: not beginning from in New York. I think we're all
Speaker 7: near New York, not from New York top down, United
Speaker 7: Nations top down and solving that way.
Speaker 5: So Nadia again, just to fall upon that point, what
Speaker 5: is the role of the United Nations of NATO. How
Speaker 5: should the US, I guess, operate within that framework or
Speaker 5: is it America first?
Speaker 11: Well, NATO is really different.
Speaker 7: NATO is a perfect example of the exact type of
Speaker 7: multilateral institution of states cooperating. We're cooperating because we basically
Speaker 7: agree on the problem sets. We have similar political systems.
Speaker 7: We're all democracies almost roughly. Where we've created. Where NATO
Speaker 7: has created for a particular reason, and it's a military
Speaker 7: alliance that has worked, that has developed real defense capabilities
Speaker 7: that we should not throw out. It's really hard to
Speaker 7: operate with allies and partners on the ground in a
Speaker 7: military way. So NATO is a great example of an
Speaker 7: institution we should work with and through the United Nation
Speaker 7: is a huge, sprawling set of agencies and organizations that
Speaker 7: really is far.
Speaker 11: Removed from state control.
Speaker 7: Fundamentally, states fund it, but it's far removed from from
Speaker 7: democracies and from actually being close to what you might
Speaker 7: vote for as a citizen. And then get through the United.
Speaker 3: Nations, Naddie, we've got to get your back up on
Speaker 3: coming out of the Cornell's Soviet Studies combine, which is
Speaker 3: world class. We've got to get you back on to
Speaker 3: get an update on Vladimir Putin. I just really can't
Speaker 3: say enough about what they've done in Ithica on Soviet
Speaker 3: studies over many, many decades. Nanni is Shadlow in Foreign
Speaker 3: Affairs magazine. The issue is really something.
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