WEBVTT - Bloomberg Surveillance TV: March 5, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.400 with Lisa Bromwitz and am Marie Hordern. Join us each 0:00:18.480 --> 0:00:21.360 day for insight from the best in markets, economics, and 0:00:21.400 --> 0:00:24.720 geopolitics from our global headquarters in New York City. We 0:00:24.760 --> 0:00:27.400 are live on Bloomberg Television weekday mornings from six to 0:00:27.480 --> 0:00:31.000 nine am Eastern. Subscribe to the podcast on Apple, Spotify, 0:00:31.200 --> 0:00:33.479 or anywhere else you listen, and as always on the 0:00:33.479 --> 0:00:36.879 Bloomberg Terminal and the Bloomberg Business app. Joining us now 0:00:37.000 --> 0:00:39.520 is the man behind the negotiations, the forty first United 0:00:39.560 --> 0:00:42.640 States Secretary of Commace, Howard Lannik missed the Secretary before 0:00:42.680 --> 0:00:44.479 we get go in a warm congratulations for the team 0:00:44.520 --> 0:00:46.880 here at Bloomberg Surveillance on your confirmation. 0:00:48.320 --> 0:00:49.159 Oh thanks so much. 0:00:49.200 --> 0:00:52.440 It wasn't last night's speech amazing. I really I could 0:00:52.440 --> 0:00:55.120 have been more proud of President Trump. 0:00:55.520 --> 0:00:58.000 We'll get into the niceties on that in just a moment. 0:00:58.200 --> 0:01:00.440 Let's kick it off, sir, with a question about your 0:01:00.440 --> 0:01:03.680 comments yesterday when you suggested that maybe they could be 0:01:03.720 --> 0:01:07.160 a compromise on trade between the United States and Mexico 0:01:07.200 --> 0:01:09.840 and Canada and maybe we'ld hear more about that today. 0:01:10.120 --> 0:01:12.320 Has the President confirmed that is that still the plan? 0:01:14.040 --> 0:01:17.480 Well, I think what happened is you have the trade 0:01:17.520 --> 0:01:20.800 ministers and all the people from Canada really working hard 0:01:20.920 --> 0:01:22.639 with our homeland security people. 0:01:22.959 --> 0:01:26.280 Remember, this is not a trade war. This is a 0:01:26.400 --> 0:01:27.000 drug war. 0:01:27.120 --> 0:01:30.440 We've got fentanyls still pouring into the country and it's 0:01:30.480 --> 0:01:31.280 got to stop. 0:01:31.400 --> 0:01:34.440 So what's happened is they're showing us even more. 0:01:34.200 --> 0:01:36.679 Ways to try to stop the floor of fentanyl and 0:01:36.720 --> 0:01:38.280 if they can stop the floor of fenyl. 0:01:38.560 --> 0:01:42.440 The President is open minded. There are going to be tariffs, let's. 0:01:42.200 --> 0:01:45.000 Be clear, But what he is thinking about is which 0:01:45.080 --> 0:01:51.160 sections of the market that can maybe he'll consider giving 0:01:51.160 --> 0:01:54.560 them relief until we get to of course, April second, 0:01:54.560 --> 0:01:56.040 but I don't want anybody to forget. 0:01:56.160 --> 0:01:59.320 April second is the day that we announced our. 0:01:59.240 --> 0:02:03.000 Reciprocal tarraffs around the world, and so April second is coming. 0:02:03.200 --> 0:02:05.360 But this is about fetnel this month. 0:02:05.600 --> 0:02:07.960 Got that. Just want additional clarity, just to be very 0:02:07.960 --> 0:02:10.360 clear on this. Yesterday when you said I think the 0:02:10.400 --> 0:02:12.359 President's going to figure out you do more and I 0:02:12.480 --> 0:02:14.360 meet you in the middle we're probably going to announce 0:02:14.400 --> 0:02:17.360 that tomorrow as in today. Can we no longer respect 0:02:17.360 --> 0:02:18.040 that announcement? 0:02:19.160 --> 0:02:21.520 No, no, no, no, I didn't say that. I said the 0:02:21.560 --> 0:02:22.320 President is. 0:02:22.360 --> 0:02:26.560 Listening, uh to the offers from Mexico and Canada. He's 0:02:26.600 --> 0:02:29.519 thinking about trying to do something in the middle. He's 0:02:29.560 --> 0:02:31.840 thinking about it. We're talking about it. We're going to 0:02:31.919 --> 0:02:33.920 what I leave here, I'm going to go talk about 0:02:33.960 --> 0:02:36.440 it with him, and I think early this afternoon or 0:02:36.520 --> 0:02:39.720 this afternoon we expect to make an announcement. And my 0:02:39.720 --> 0:02:42.000 my thinking is it's going to be somewhere in the middle, 0:02:42.280 --> 0:02:46.000 so not one hundred percent of all products and not none, 0:02:46.120 --> 0:02:49.320 somewhere in the middle, because I think Mexico and Canada 0:02:49.360 --> 0:02:52.040 are trying the best and let's see where we end up. 0:02:52.120 --> 0:02:54.400 So I do think somewhere in the middle is a 0:02:54.600 --> 0:02:55.440 likely outcome. 0:02:55.600 --> 0:02:57.080 When you say somewhere in the middle, do you mean 0:02:57.120 --> 0:02:59.960 somewhere in the middle on tariffs, as in somewhere between 0:03:00.120 --> 0:03:02.960 zero and twenty five or do you mean that certain groups, 0:03:03.000 --> 0:03:05.800 certain industries will just get a carve out, And would 0:03:05.800 --> 0:03:08.160 that carve out be say the autos, Because the President 0:03:08.160 --> 0:03:11.080 mentioned last night he'd spoken to the auto's CEOs, the 0:03:11.120 --> 0:03:12.679 carve outs we should be thinking about. 0:03:12.480 --> 0:03:16.239 Here, Yeah, I think I think it's by product and 0:03:16.280 --> 0:03:20.639 by regent. Remember the us MCA, right, the United States, 0:03:20.800 --> 0:03:24.840 Mexico and Canada agreement set up some policies that said 0:03:24.880 --> 0:03:27.320 you've got to have a certain amount of US content 0:03:27.680 --> 0:03:30.760 in your products to be USMCA compliant. 0:03:31.080 --> 0:03:32.639 So I think he's thinking. 0:03:32.280 --> 0:03:36.200 About those categories, the us MCA compliant and does not 0:03:36.320 --> 0:03:40.360 make sense to you, Right, if you complied with the agreement, then. 0:03:40.240 --> 0:03:41.960 Maybe you avoid tariffs. And if you. 0:03:41.960 --> 0:03:44.600 Didn't comply with the agreement, well you did sue at 0:03:44.600 --> 0:03:47.960 your own risk. You knew you weren't complying, and therefore 0:03:48.000 --> 0:03:50.760 it seems likely that's a place where the president will go. 0:03:51.120 --> 0:03:53.200 Again, the president gets to make the decision. 0:03:53.600 --> 0:03:55.720 I'm there talking with him about it, and so is 0:03:55.760 --> 0:03:59.840 the team. But our expectation is that it'll be categories. 0:03:59.840 --> 0:04:02.680 It will be twenty five percent, but it'll be there 0:04:02.680 --> 0:04:05.480 will be some categories left out. It could well be autos, 0:04:05.840 --> 0:04:10.480 could be others as well. USMCA go look at that. 0:04:10.480 --> 0:04:12.080 That was the agreement we made with. 0:04:12.160 --> 0:04:16.880 US Mexico and Canada saying those products are exempt. Everyone 0:04:16.920 --> 0:04:20.800 who didn't live under those terms and did so at 0:04:20.839 --> 0:04:22.760 their own risk and knew they were doing it at 0:04:22.760 --> 0:04:24.000 their own risk always. 0:04:25.120 --> 0:04:26.480 Secretary Latna, good morning. 0:04:26.520 --> 0:04:29.480 Would you say right now that you think that US 0:04:29.560 --> 0:04:34.919 autos like GM and Ford are compliant under USMCA. 0:04:35.080 --> 0:04:37.760 That is my understanding is the Big Three say they 0:04:37.839 --> 0:04:42.200 produce cars that are compliant under USMCA, which means they 0:04:42.320 --> 0:04:48.080 have sufficient US content in them to be part of 0:04:48.120 --> 0:04:51.720 the USMCA agreement. So I think that's part of our 0:04:51.760 --> 0:04:55.000 discussion and the President's really thinking about that. 0:04:56.160 --> 0:04:59.320 So it's fair to assume, then, especially given the constituencies 0:04:59.520 --> 0:05:02.320 of autoworkers that the President was able to pick up 0:05:02.320 --> 0:05:04.720 in this past election, that it is the auto industry 0:05:04.760 --> 0:05:07.960 that can potentially get that exemption later this afternoon. 0:05:09.279 --> 0:05:12.839 It's not really the decemption, remember, it's it's we're trying 0:05:12.880 --> 0:05:16.920 to end fentanyl coming into the country. So we're trying 0:05:16.960 --> 0:05:20.400 to send a message that fetanyl has got to end 0:05:20.480 --> 0:05:21.880 coming in from Mexico and Canada. 0:05:21.960 --> 0:05:23.640 It just has to end. 0:05:23.920 --> 0:05:26.279 And they've done a reasonable job on the border, and 0:05:26.320 --> 0:05:28.159 they're going to do a better job on the border. 0:05:28.200 --> 0:05:30.800 But this is memory, it's a key about fentanyl for 0:05:30.839 --> 0:05:33.560 this month April tewcond We could talk about the rest, 0:05:33.600 --> 0:05:37.760 but this month it's about fentanyl, and the President's trying 0:05:37.760 --> 0:05:41.560 to give Mexico and Canada some statement, some move forward 0:05:41.600 --> 0:05:45.240 because they are doing they are trying their hardest, and 0:05:45.279 --> 0:05:48.120 we believe they're trying their hardest. But the fact is 0:05:48.640 --> 0:05:52.400 that we're going to put something on because depths in 0:05:52.480 --> 0:05:57.479 America have not decreased in a way that is sufficient. 0:05:57.320 --> 0:05:59.960 Depths of ferialisms were in America. 0:06:01.120 --> 0:06:05.080 Many families will sympathize with this, remarks me myself, I 0:06:05.120 --> 0:06:08.359 know families who have been at the end of the 0:06:08.440 --> 0:06:11.240 suffering when it comes to fentanyl. But yesterday though, the 0:06:11.279 --> 0:06:15.279 President questioned the fairness of Canadian banks, So what is 0:06:15.320 --> 0:06:17.520 it about. Is it about Canada's banking system or is 0:06:17.600 --> 0:06:18.839 it really about fentanyl? 0:06:20.800 --> 0:06:25.760 So this month, right now is about fentanyl. When we 0:06:25.800 --> 0:06:29.400 talk about April second, we will talk about the bigger 0:06:29.520 --> 0:06:33.719 trade picture between our trading partners Canada and our trading 0:06:33.760 --> 0:06:36.719 partners of Mexico. So April second, I'll be happy to 0:06:36.920 --> 0:06:39.840 come on and talk to you about our thinking and 0:06:39.880 --> 0:06:43.760 our thoughts about a broad trading model. But right now 0:06:43.800 --> 0:06:49.320 it's about fentanyl. This is a drug related issue. Drugs 0:06:49.360 --> 0:06:51.760 coming into the United States of America have got to stop. 0:06:51.839 --> 0:06:54.040 The border. It's got to remain closed. 0:06:54.279 --> 0:06:57.760 That's the key of how you treat your great trading partner. 0:06:57.760 --> 0:07:01.000 You treat your great trading partner with respect, and you 0:07:01.160 --> 0:07:03.359 stop letting sentinel. 0:07:02.920 --> 0:07:03.640 Into the country. 0:07:03.680 --> 0:07:07.000 So my view is the President is thinking about it, 0:07:07.279 --> 0:07:11.120 he's thinking about autos, he's thinking about USMCA. He's going 0:07:11.160 --> 0:07:13.120 to come up with a plan. This afternoon. We're going 0:07:13.120 --> 0:07:15.280 to announce that plan. I think it's going to be 0:07:15.440 --> 0:07:18.160 in the middle somewhere. There's going to be twenty five 0:07:18.160 --> 0:07:20.520 percent tariffs. It's not the middle as in a number. 0:07:20.760 --> 0:07:24.680 I think it's in middle in terms of USMCA, not USMCA. 0:07:24.920 --> 0:07:27.720 But the President will decide that this afternoon and then 0:07:27.720 --> 0:07:30.400 we'll go on from there. But think about that, if 0:07:30.400 --> 0:07:34.600 you were compliant with USMCA, you did what President Trump 0:07:34.640 --> 0:07:35.720 asked in his last term. 0:07:36.000 --> 0:07:38.240 And if you weren't compliant, you did that at your 0:07:38.240 --> 0:07:38.760 own risk. 0:07:39.080 --> 0:07:41.720 Secretary Latnik, I just want to make sure that I 0:07:41.840 --> 0:07:44.600 understand this correctly. You're talking about the idea that this 0:07:44.760 --> 0:07:48.160 all has to do with the drug wars, and at 0:07:48.160 --> 0:07:50.440 the same time, some people have speculated that this could 0:07:50.520 --> 0:07:53.280 lead to a renegotiation of USMCA that. 0:07:53.200 --> 0:07:56.480 Would lead all around to even lower tariffs than before. 0:07:56.600 --> 0:07:57.920 Are you saying that's off the table. 0:07:57.960 --> 0:07:59.800 The tariffs are still part of this at the twenty 0:07:59.840 --> 0:08:00.880 five five percent level. 0:08:02.360 --> 0:08:07.679 Well, remember April second, we begin our reciprocity model, which 0:08:07.760 --> 0:08:10.000 is how you treat us as how we treat you, 0:08:10.440 --> 0:08:12.240 and that is going to be part of his exemption, 0:08:12.760 --> 0:08:20.680 part of his tier policy. And then he's got industries, autos, semiconductors, pharmaceuticals, 0:08:21.040 --> 0:08:22.960 steel and aluminum. 0:08:22.480 --> 0:08:26.440 And copper lumber. These issues need to come home. 0:08:26.800 --> 0:08:32.000 We need to help our domestic industries grow and flourish, 0:08:32.160 --> 0:08:36.079 and so we called out those product sets for extra focus. 0:08:36.280 --> 0:08:37.720 But that's April second. 0:08:37.880 --> 0:08:42.200 So on April second, our reciprocal trade policy will come out. 0:08:43.040 --> 0:08:47.840 In twenty twenty six, we renegotiate USMCA with Canada and Mexico, 0:08:47.880 --> 0:08:51.199 and we're going to have really clear analysis and clear 0:08:51.240 --> 0:08:52.679 focus on how that changes. 0:08:53.160 --> 0:08:57.320 But right today, let's be clear, today is about Fentanel. 0:08:57.920 --> 0:08:59.480 We heard from last night the President. 0:08:59.559 --> 0:09:02.640 He said that he was fine with a little disturbance, 0:09:03.080 --> 0:09:06.319 but going forward, there will be all of these gains realized. 0:09:06.800 --> 0:09:07.720 Secretary Lutnik. 0:09:07.800 --> 0:09:11.200 Are you concerned about the level of uncertainty express not 0:09:11.320 --> 0:09:13.480 just in markets, but just even from people who you 0:09:13.600 --> 0:09:15.960 used to work with, where they're saying, we don't have 0:09:16.040 --> 0:09:18.040 a clear sense of what the goal is. And I 0:09:18.120 --> 0:09:20.640 understand you're saying it'll come on April second, But in 0:09:20.679 --> 0:09:23.440 the meantime people are just putting all plans on hold. 0:09:25.360 --> 0:09:28.040 Well, I'm not seeing all plants at all. In fact, 0:09:28.360 --> 0:09:29.520 I'm seeing the opposite. 0:09:29.600 --> 0:09:29.760 Right. 0:09:29.800 --> 0:09:33.200 We saw Apple commit to five hundred billion dollars. We 0:09:33.280 --> 0:09:38.200 saw open Ai an Oracle commit to five hundred billion 0:09:38.280 --> 0:09:39.400 dollars of investments. 0:09:39.600 --> 0:09:41.160 TSMC just the. 0:09:41.160 --> 0:09:44.160 Other day saying one hundred billion dollar investment in America. 0:09:44.720 --> 0:09:47.840 Saw Bank two hundred billion dollar investment in America. So 0:09:48.400 --> 0:09:51.040 a trillion, three hundred billion dollars. And you think people 0:09:51.080 --> 0:09:53.720 are waiting on the sidelines. We feel it every day. 0:09:53.920 --> 0:09:57.040 All these companies are coming, they're building in America, they're 0:09:57.040 --> 0:09:58.520 committing to America. 0:09:58.840 --> 0:10:01.040 We agree a April second is coming. 0:10:01.120 --> 0:10:03.960 We have to do our work before we announce our 0:10:04.000 --> 0:10:06.840 plans on April second. Of course, we have to do 0:10:06.960 --> 0:10:09.880 our work and do it properly and do it thoughtfully. 0:10:10.120 --> 0:10:14.120 But in this period of time, America needs a president 0:10:14.160 --> 0:10:18.040 to protect people from fentanyl that shouldn't be killing people 0:10:18.080 --> 0:10:22.760 in our country. China still has fentanyl as a highest 0:10:23.080 --> 0:10:24.800 list of subsidies. 0:10:25.240 --> 0:10:25.960 Subsidies. 0:10:26.000 --> 0:10:32.040 They subsidize the production of precursors, the ingredients to fentanyl. 0:10:32.080 --> 0:10:34.680 They send it to Mexico and Canada and into the 0:10:34.679 --> 0:10:38.880 country it comes. So our president has said enough already, 0:10:39.120 --> 0:10:42.360 enough already, and that's why he's come up with this 0:10:42.480 --> 0:10:46.280 tariff plan today. April second will be a fairness plan. 0:10:46.360 --> 0:10:49.360 And fairness plan is not that hard to figure out. 0:10:49.679 --> 0:10:50.960 If you have a vet look it. 0:10:51.000 --> 0:10:53.559 Can I jump in there on the on the fairness plan? 0:10:53.720 --> 0:10:57.520 Is that an initial, partial assessment and response or will 0:10:57.600 --> 0:11:00.760 tariffs actually hit on April second? 0:11:02.120 --> 0:11:04.800 Well, there are a whole variety of laws in the 0:11:04.920 --> 0:11:07.760 United States of America that we will follow with precision. 0:11:08.280 --> 0:11:11.080 Some tariffs will come on right away, and then some 0:11:11.160 --> 0:11:13.880 tariffs will go be registered and they will take three 0:11:13.920 --> 0:11:16.560 weeks or four weeks, and they will come on in 0:11:16.640 --> 0:11:17.200 due course. 0:11:17.480 --> 0:11:20.240 So there's a process for tariffs in America. 0:11:20.280 --> 0:11:23.439 But we will announce them and we will be negotiating 0:11:23.480 --> 0:11:26.680 with all these countries thereafter, and then they go into 0:11:26.720 --> 0:11:30.319 effect over a period of months, so basically. 0:11:29.840 --> 0:11:31.600 April six, as you know, we will announce them and 0:11:31.640 --> 0:11:32.319 then they come. 0:11:32.160 --> 0:11:37.040 In because there's months of studies, massive report, public opinion. 0:11:37.080 --> 0:11:38.800 This can take a very long time. 0:11:39.160 --> 0:11:43.400 So legally there's no law that's short enough really to 0:11:43.440 --> 0:11:44.760 put tariffs in place. 0:11:44.480 --> 0:11:45.160 On the second. 0:11:45.559 --> 0:11:48.800 So how long between April second till the tariffs actually 0:11:48.880 --> 0:11:50.440 hit do you think we'll see? 0:11:51.760 --> 0:11:56.640 As I said there, we launched our studies on January twentieth, 0:11:57.000 --> 0:11:58.000 so April second of. 0:11:58.080 --> 0:11:59.080 Studies are done. 0:11:59.200 --> 0:12:02.720 Some tariffs can come straight away, some can come weeks later, 0:12:03.000 --> 0:12:05.640 some can come some can take over a month or 0:12:05.679 --> 0:12:06.840 two to come online. 0:12:06.880 --> 0:12:10.000 But it will be very, very. 0:12:09.840 --> 0:12:14.240 Thoughtful, very organized, and we begin on April second. We've 0:12:14.280 --> 0:12:17.720 announced it from January twentieth, that April second was the day. 0:12:17.760 --> 0:12:19.120 We're sticking with our day. 0:12:19.520 --> 0:12:23.360 We're sticking with reciprocity at this time for America to 0:12:23.440 --> 0:12:24.640 be treated fairly. 0:12:24.960 --> 0:12:27.200 And that's what the President Trump is going to do. 0:12:27.440 --> 0:12:28.040 He's going to. 0:12:28.040 --> 0:12:31.760 Make sure we are treated fairly. He's talked about it 0:12:31.800 --> 0:12:35.640 last night. He's made this clear. So Mexico and Canada 0:12:35.720 --> 0:12:38.360 is about fentanyl today for the month of March, but 0:12:38.480 --> 0:12:41.840 on April second, it's about fairness. And yes, that is 0:12:41.880 --> 0:12:45.080 a process that comes in that is strictly specific to 0:12:45.120 --> 0:12:47.600 the laws, but it'll take over a month or two 0:12:47.600 --> 0:12:50.480 months to come in. But once it's in, they will 0:12:50.520 --> 0:12:54.880 stick which is treat us fairly, treat us properly, or 0:12:54.920 --> 0:12:55.839 don't trade with us. 0:12:56.320 --> 0:12:58.360 Missus Secretary, I was a man of my word. I 0:12:58.360 --> 0:12:59.720 am a man of my word, and I promise would 0:12:59.720 --> 0:13:01.800 come back the address last night, So let's finish there. 0:13:02.000 --> 0:13:03.960 The President of the United States talked about a big, 0:13:04.000 --> 0:13:06.640 beautiful job in interest rates. A lot of people in 0:13:06.640 --> 0:13:09.360 this market are curious whether the President is no longer 0:13:09.400 --> 0:13:12.240 sensitive to the deadly gyrations of the equity market, that 0:13:12.320 --> 0:13:15.080 the focus, the emphasis now is on the bond market. 0:13:15.280 --> 0:13:17.800 Is that the shift is that the way to understand things. 0:13:19.360 --> 0:13:19.480 All. 0:13:19.840 --> 0:13:23.480 I think that is too specific. I mean, let's face it, 0:13:23.600 --> 0:13:26.600 if we balance the budget of the United States of America, 0:13:27.240 --> 0:13:29.840 interest rates are going to come smashing down. And I 0:13:29.880 --> 0:13:32.760 don't mean ten basis points, I mean one hundred and 0:13:32.800 --> 0:13:35.800 fifty basis points. You're going to have an explosion in 0:13:35.840 --> 0:13:36.720 the housing market. 0:13:36.880 --> 0:13:39.160 You're going to have an explosion in the equity markets. 0:13:39.160 --> 0:13:42.600 Because this is not a manufactured cut in the interest 0:13:42.640 --> 0:13:46.000 rates like you saw last time with this huge money 0:13:46.000 --> 0:13:48.000 supply which created the vast inflation. 0:13:48.400 --> 0:13:50.200 This is the right way to do it. 0:13:50.440 --> 0:13:55.560 You stop printing money, you stop running deficits, you balance 0:13:55.600 --> 0:13:58.400 the budget of the United States of America. You smash 0:13:58.559 --> 0:14:03.120 interest rates down, produce enormous amounts of energy, drive those 0:14:03.160 --> 0:14:06.760 prices down, and you will see the greatest equity market 0:14:07.080 --> 0:14:08.240 and the greatest. 0:14:07.800 --> 0:14:09.400 Economy in the United States of America. 0:14:09.559 --> 0:14:12.400 Now, remember this president is worried about the United States 0:14:12.400 --> 0:14:15.440 of America. Sometimes I get asked questions about am I 0:14:15.480 --> 0:14:17.760 worried about Canadam I worried about Mexican And am I 0:14:17.800 --> 0:14:21.480 worried about Peu? My president is worried about the United 0:14:21.520 --> 0:14:23.960 States of America. And you are going to see the 0:14:24.040 --> 0:14:28.120 greatest equity market and bond markets under President Trump. 0:14:28.160 --> 0:14:30.560 Well, let's want to be apparently American data right now, 0:14:30.560 --> 0:14:33.040 because equities have rolled over just a little bit, you 0:14:33.120 --> 0:14:34.800 know the market. Well, I won't make a big deal 0:14:34.840 --> 0:14:36.240 of it. We're just a bit software at the back 0:14:36.280 --> 0:14:39.200 of this data from ADP, which is a downside surprise 0:14:39.240 --> 0:14:42.360 at seventy seven K the estimate was one forty so 0:14:42.400 --> 0:14:44.200 with sub one hundred we'll see what we get on 0:14:44.200 --> 0:14:47.160 the m later on this morning and on payrolls on Friday. 0:14:47.320 --> 0:14:49.560 But as you know, mister Secretary, the data over the 0:14:49.640 --> 0:14:52.880 last few weeks hasn't been great. The survey data has 0:14:52.960 --> 0:14:55.560 been softer, and a lot of these companies in these 0:14:55.600 --> 0:14:59.600 surveys have pointed to tariff uncertainty. Do Youmick scept that 0:14:59.600 --> 0:15:03.920 the business community needs some clarity or whether it's twenty five, fifteen, ten, whatever, 0:15:03.960 --> 0:15:06.560 the number is going to be, that the volatility around 0:15:06.600 --> 0:15:10.800 the trade story, the cumulative effect of persistent uncertainty is 0:15:10.840 --> 0:15:12.480 trying to wink into this economy a little bit. 0:15:14.200 --> 0:15:14.720 No way. 0:15:14.960 --> 0:15:17.080 I mean, the President spoke about him last night. He 0:15:17.120 --> 0:15:22.080 said Biden left him a pile of poop. Okay, he 0:15:22.200 --> 0:15:24.680 left him a louse of the economy that he's trying 0:15:24.720 --> 0:15:25.120 to fix. 0:15:25.440 --> 0:15:28.280 You're looking at data that's Biden data. 0:15:28.720 --> 0:15:34.520 Do not try to besmirch my President Trump with Biden's nonsense. 0:15:34.520 --> 0:15:37.200 Do you think the manufacturing number is Biden date? So 0:15:37.280 --> 0:15:38.840 I just want to be very clear, that's your opinion. 0:15:38.920 --> 0:15:40.960 You're entitled to it. You think that's his dates. 0:15:41.720 --> 0:15:45.760 My opinion, Okay, what possible could change? Seriously, we are 0:15:45.920 --> 0:15:50.280 in early March. My president took over January twentieth. 0:15:50.640 --> 0:15:54.960 You think economic data coming out in early March is 0:15:55.040 --> 0:15:57.960 Donald Trump related data monthly surveys. 0:15:58.000 --> 0:16:04.280 I'm to be kidd mister Secretary, are you suggesting about it? 0:16:04.360 --> 0:16:08.320 You suggesting so when Bonyard's drop in a market that's 0:16:08.320 --> 0:16:11.360 worth trillions of dollars and investors place bets off the 0:16:11.440 --> 0:16:14.200 back of that economic data, that that data doesn't count 0:16:14.240 --> 0:16:16.640 front of thing, that that data somehow misleading. 0:16:18.480 --> 0:16:19.080 I think that. 0:16:19.080 --> 0:16:22.920 Data is leading you to understand if Joe Biden was 0:16:22.960 --> 0:16:25.000 still in charge, you'd be in trouble. 0:16:25.240 --> 0:16:27.400 But you have a new president. There's a new sheriff 0:16:27.440 --> 0:16:28.119 in town. 0:16:28.280 --> 0:16:31.280 And I would bet, I would bet on the economic 0:16:31.320 --> 0:16:33.320 growth that is coming from Donald Trump. 0:16:33.640 --> 0:16:36.520 You see the investments. You see it already. 0:16:36.720 --> 0:16:41.200 There's trillions of dollars of manufacturing moving to America. 0:16:41.320 --> 0:16:45.320 It's moving to America. That means the cavalry is coming. 0:16:45.360 --> 0:16:46.960 For every trillion. 0:16:46.600 --> 0:16:49.520 Dollars that invests in the United States of America that 0:16:49.600 --> 0:16:53.160 produces one percent of GDP growth, imagine that you have 0:16:53.240 --> 0:16:58.720 a president bringing GDP growth directly to his economy. 0:16:58.880 --> 0:16:59.800 That's amazing. 0:17:00.280 --> 0:17:03.040 It's the Secretary, We appreciate your time and your opinion 0:17:03.080 --> 0:17:05.920 as always. The US Commerce Secretary Howard love Nick there 0:17:05.960 --> 0:17:08.920 on the economic data, financial markets, and what's going to 0:17:08.960 --> 0:17:21.040 happen with trade, joining us now to discuss JP Morgan 0:17:21.080 --> 0:17:24.040 Act managements. But Michael Bob, good morning, good morning. We've 0:17:24.040 --> 0:17:25.640 got a lot to get through. We're getting Europe quickly, 0:17:25.680 --> 0:17:27.040 but I want to start with the United States. Does 0:17:27.080 --> 0:17:28.600 it bring you comfort that the White House seems to 0:17:28.600 --> 0:17:31.480 be more interested in your bond market than the equity market. 0:17:32.320 --> 0:17:36.160 It does to some extent. I think bond investors are 0:17:36.160 --> 0:17:39.359 going to go through a period of discomfort, to borrow 0:17:39.400 --> 0:17:42.879 a phrase from the President, where probably yields have gotten 0:17:42.880 --> 0:17:45.960 a little ahead of themselves. So you know, any kind 0:17:45.960 --> 0:17:49.320 of backup to the mid fours looks like a good 0:17:49.400 --> 0:17:50.520 level for us to get in. 0:17:50.600 --> 0:17:53.800 So you're not a buyer here, not right now, you're 0:17:53.800 --> 0:17:55.560 a buyer of buns here. Can we bring up the curve. 0:17:55.600 --> 0:17:57.560 Let's get back to the German curve two year, ten year, 0:17:57.640 --> 0:18:01.000 thirty year, double digit move we're seeing over in Germany 0:18:01.000 --> 0:18:03.040 off the back of the prospect of a lot more supply. 0:18:03.400 --> 0:18:05.600 The ten Europe by twenty basis points. Where do you 0:18:05.600 --> 0:18:06.320 stand on Europe? 0:18:06.320 --> 0:18:10.399 Now I think you're looking at steeper curves in Europe. 0:18:10.400 --> 0:18:12.919 I think you're going to see a lot of issuance. 0:18:13.760 --> 0:18:17.359 They've thrown fiscal austerity to the side. They've looked at 0:18:17.359 --> 0:18:19.520 what's going on in China and the US and they 0:18:19.520 --> 0:18:22.040 want to join the party and they're going to I 0:18:22.080 --> 0:18:25.439 still see the ECB bringing rates down towards two percent, 0:18:25.760 --> 0:18:28.080 but I think with the amount of supply that's potentially 0:18:28.080 --> 0:18:31.040 coming in Germany, you're going to drift up towards three percent. 0:18:31.400 --> 0:18:36.360 I think that's fantastic for bond investors. Again, discomfort ear term, 0:18:36.760 --> 0:18:40.040 but the ability to have a bond market that has 0:18:40.119 --> 0:18:42.480 yield to it and that's durable fantastic. 0:18:42.640 --> 0:18:45.320 There's a fantastic bond market for investors, and they're fantastic 0:18:45.359 --> 0:18:48.760 bond markets for traders. A fantastic bond market for investors 0:18:48.800 --> 0:18:51.560 is one where there's actual coupon, there's actual yield. A 0:18:51.600 --> 0:18:54.880 fantastic bond for traders. Bond market for traders is when yield. 0:18:54.720 --> 0:18:56.680 Are going down. Is that move over? 0:18:56.840 --> 0:19:00.880 Is it not any longer a fantastic market for traders. 0:19:01.640 --> 0:19:03.880 I think there's potential for a yield to go down 0:19:03.920 --> 0:19:06.600 in the front end of curves. I think central banks, 0:19:06.600 --> 0:19:08.960 whether it's the ECBER, the FED, or looking for that 0:19:09.080 --> 0:19:12.520 opportunity to bring yields down a little bit get closer 0:19:12.560 --> 0:19:15.399 to what they perceive is neutral. But I think the 0:19:15.440 --> 0:19:18.080 long end is going to stay about where it is. 0:19:18.520 --> 0:19:22.720 We're having conversations every day with plan sponsors who want 0:19:22.760 --> 0:19:25.360 to get into this bond market. They're looking at it 0:19:25.440 --> 0:19:27.440 as the anchor in the storm. They like the fact 0:19:27.720 --> 0:19:30.119 they can buy the US aggregate bond market at a 0:19:30.240 --> 0:19:33.600 yield of close to five percent. They're looking to bring 0:19:33.680 --> 0:19:36.960 money out of cash and out of risk assets, whether 0:19:37.040 --> 0:19:40.800 it's privates or equities, and go into the market. Fantastic. 0:19:40.920 --> 0:19:42.760 You said this bond market. 0:19:42.800 --> 0:19:46.320 Are you talking about the United States or develop markets 0:19:46.400 --> 0:19:48.800 more broadly? At a time where we were just talking 0:19:48.840 --> 0:19:51.160 with a number of guests, Peter Share among them saying 0:19:51.600 --> 0:19:54.560 maybe Europe is going to draw capital away from the 0:19:54.640 --> 0:19:57.960 United States, I think it's all bond markets. 0:19:58.040 --> 0:20:00.800 I think when you look at what equities have done, 0:20:00.960 --> 0:20:05.960 they've become lopsided in terms of portfolio allocations. The plans 0:20:06.000 --> 0:20:08.680