1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,360 --> 00:00:28,040 Speaker 2: We have the voice of an expert on geopolitics. 7 00:00:28,080 --> 00:00:31,480 Speaker 3: We're balancing the economy and geopolitics, just like the White 8 00:00:31,480 --> 00:00:34,960 Speaker 3: House is today. Agar Shamali has actually been their former 9 00:00:35,040 --> 00:00:38,880 Speaker 3: National Security Council official now Greenwich Media Strategies. Great to 10 00:00:38,880 --> 00:00:41,159 Speaker 3: see you back, Garth, Thanks for joining. I wonder if 11 00:00:41,159 --> 00:00:43,159 Speaker 3: this is a productive meeting or not that's underway in 12 00:00:43,200 --> 00:00:46,479 Speaker 3: the Oval right now. Cure Starmer wants security guarantees just 13 00:00:46,520 --> 00:00:48,840 Speaker 3: like Europeans. Donald Trump says they're not going to get them. 14 00:00:50,640 --> 00:00:53,360 Speaker 4: Well, this certainly that with the coming of the Trump administration, 15 00:00:53,440 --> 00:00:56,840 Speaker 4: it's rattled Europe's security and they're feeling of security. They've 16 00:00:56,880 --> 00:00:59,400 Speaker 4: got a war in their backyard and they're really concerned 17 00:00:59,400 --> 00:01:01,840 Speaker 4: about what the means. I was in at the Munich 18 00:01:01,840 --> 00:01:04,040 Speaker 4: Security conference just a week ago or two weeks ago now, 19 00:01:04,280 --> 00:01:07,800 Speaker 4: where this was the theme that really overtook the conference. 20 00:01:08,680 --> 00:01:11,080 Speaker 4: Everybody was talking about it, but in my experience, they 21 00:01:11,080 --> 00:01:14,080 Speaker 4: weren't panicking as much as everybody was saying. A lot 22 00:01:14,120 --> 00:01:16,360 Speaker 4: of the sentiment was we have to invest in our 23 00:01:16,400 --> 00:01:19,840 Speaker 4: defense intotelligence. We haven't invested enough over the last several decades. 24 00:01:20,040 --> 00:01:21,959 Speaker 4: We've relied on the United States, and now is the 25 00:01:22,000 --> 00:01:24,080 Speaker 4: time to step it up and to do so incrementally. 26 00:01:24,680 --> 00:01:26,880 Speaker 5: And that's the view of the NATO Secretary General as well. 27 00:01:27,160 --> 00:01:29,759 Speaker 4: So I do think it makes sense for the UK 28 00:01:29,880 --> 00:01:30,800 Speaker 4: to come to the United States. 29 00:01:30,840 --> 00:01:32,560 Speaker 5: We are we have a very close alliance. 30 00:01:32,720 --> 00:01:35,520 Speaker 4: They have been there for US with Iraq, with Afghanistan, 31 00:01:35,600 --> 00:01:39,160 Speaker 4: with series of security issues and wars and conflict, and 32 00:01:39,200 --> 00:01:40,520 Speaker 4: so I do think it makes sense for him to 33 00:01:40,520 --> 00:01:44,160 Speaker 4: get to go in there. I'm not so sure what 34 00:01:44,560 --> 00:01:47,319 Speaker 4: he expects will come out of it, unfortunately, because I 35 00:01:47,360 --> 00:01:50,640 Speaker 4: just don't think the administration negotiates in a way where 36 00:01:50,640 --> 00:01:53,000 Speaker 4: they're giving things away without getting something back. 37 00:01:53,040 --> 00:01:53,640 Speaker 6: In her Trump. 38 00:01:55,400 --> 00:01:58,560 Speaker 7: Well, we were just hearing President Trump asked about whether 39 00:01:58,640 --> 00:02:00,880 Speaker 7: or not he thinks the deal would be kept if 40 00:02:00,920 --> 00:02:03,280 Speaker 7: there would be a problem with security, as Ker Starmer 41 00:02:03,320 --> 00:02:05,800 Speaker 7: is saying, a peace deal, if there is to be one, 42 00:02:05,880 --> 00:02:09,040 Speaker 7: needs to last. President Trump Hagar says he's known Vladimir 43 00:02:09,080 --> 00:02:12,320 Speaker 7: Putin a long time and doesn't believe he will violate 44 00:02:12,840 --> 00:02:13,400 Speaker 7: his word. 45 00:02:13,680 --> 00:02:15,679 Speaker 5: Do you believe that? Yeah? 46 00:02:15,760 --> 00:02:18,840 Speaker 4: No, I absolutely believe not only that will Putin violates 47 00:02:18,840 --> 00:02:21,040 Speaker 4: his word, and he will do so happily and has 48 00:02:21,200 --> 00:02:24,440 Speaker 4: proven to do so multiple times over the last several decades, 49 00:02:24,639 --> 00:02:27,600 Speaker 4: but over the last twenty years. But it's also the 50 00:02:27,639 --> 00:02:30,360 Speaker 4: fact that negotiated settlement. And I'm not trying to seem 51 00:02:30,360 --> 00:02:33,000 Speaker 4: like I'm a warmonger. I don't want war to last 52 00:02:33,040 --> 00:02:35,560 Speaker 4: longer than it needs. But if you have a negotiated 53 00:02:35,560 --> 00:02:40,080 Speaker 4: settlement where Putin comes out with more than he should 54 00:02:40,080 --> 00:02:44,840 Speaker 4: get and nothing that prevents him from from invading again, 55 00:02:45,200 --> 00:02:47,760 Speaker 4: then it just gives him time to resupply his army, 56 00:02:47,840 --> 00:02:50,680 Speaker 4: to rebuild his troops and his weapons and his stockpile, 57 00:02:50,760 --> 00:02:53,799 Speaker 4: and to pick himself up and go after to go 58 00:02:54,000 --> 00:02:56,440 Speaker 4: and maybe to invade Ukraine again. But it could be 59 00:02:56,480 --> 00:02:59,040 Speaker 4: Georgia or Moldova. And the thing is, the proof is 60 00:02:59,080 --> 00:03:01,520 Speaker 4: in the pudding. Putin had pursued this type of aggression 61 00:03:01,680 --> 00:03:04,080 Speaker 4: since two thousand and eight, when he first went into Georgia, 62 00:03:04,400 --> 00:03:08,120 Speaker 4: and we know that if it's not outright aggression that 63 00:03:08,240 --> 00:03:12,440 Speaker 4: his tentacles are reaching into these countries in Moldova, Slovakia, 64 00:03:12,480 --> 00:03:15,480 Speaker 4: all these other countries, Hungary where he's trying to push 65 00:03:15,520 --> 00:03:19,600 Speaker 4: a pro Russian movement and control these countries, perhaps without 66 00:03:19,639 --> 00:03:22,320 Speaker 4: even needing to invade them. And so any kind of 67 00:03:22,400 --> 00:03:26,480 Speaker 4: deal that is shaped needs to include, if not some 68 00:03:26,600 --> 00:03:31,840 Speaker 4: kind of promise of NATO membership, then some kind of 69 00:03:31,960 --> 00:03:35,920 Speaker 4: provision that triggers NATO membership if Ukraine is invaded, if 70 00:03:35,920 --> 00:03:38,480 Speaker 4: these other countries are invaded. Now, I know that's complicated. 71 00:03:38,560 --> 00:03:41,240 Speaker 4: You can't guarantee that for sure. What does invasion mean? 72 00:03:41,480 --> 00:03:44,160 Speaker 4: Are you going to have a NATO membership that will 73 00:03:44,200 --> 00:03:46,640 Speaker 4: in fact approve it in the instance that it's needed. 74 00:03:46,840 --> 00:03:48,680 Speaker 4: But there needs to be something there in place. And 75 00:03:48,760 --> 00:03:51,240 Speaker 4: I do know, because I've been speaking to the White House. 76 00:03:51,280 --> 00:03:53,840 Speaker 4: I do know that there are advisors advising Trump to 77 00:03:53,880 --> 00:03:54,160 Speaker 4: do that. 78 00:03:54,600 --> 00:03:56,040 Speaker 5: So we'll just have to see how it turns out. 79 00:03:57,000 --> 00:04:00,600 Speaker 3: I want to ask you about specifically security guarantees or 80 00:04:00,640 --> 00:04:03,440 Speaker 3: what this White House sees as something. 81 00:04:03,280 --> 00:04:04,160 Speaker 2: Just as good, Hugar. 82 00:04:04,240 --> 00:04:06,240 Speaker 3: We've heard this back and forth a couple of times 83 00:04:06,240 --> 00:04:09,800 Speaker 3: now that with a minerals deal, there'll be US officials 84 00:04:09,800 --> 00:04:13,280 Speaker 3: there following up on the elements of that deal that 85 00:04:13,760 --> 00:04:19,160 Speaker 3: an inherent security guarantee will come because US investment is there. 86 00:04:19,920 --> 00:04:21,760 Speaker 3: This was brought up a short time ago in the 87 00:04:21,760 --> 00:04:25,360 Speaker 3: Oval Office. Donald Trump said, the backstop will be Americans 88 00:04:25,400 --> 00:04:28,200 Speaker 3: working in Ukraine to implement a. 89 00:04:28,240 --> 00:04:29,279 Speaker 2: Rare Earth's deal. 90 00:04:29,839 --> 00:04:32,520 Speaker 3: With your experience on the National Security Council, is that 91 00:04:32,560 --> 00:04:33,400 Speaker 3: a realistic view? 92 00:04:36,080 --> 00:04:38,359 Speaker 4: And you know what I feel with Bloomberg and with 93 00:04:38,400 --> 00:04:41,559 Speaker 4: Bloomberg's viewers. Would any of those viewers accept a deal 94 00:04:41,600 --> 00:04:44,080 Speaker 4: that isn't written in a contract? And then so the 95 00:04:44,120 --> 00:04:46,720 Speaker 4: answer is no, that's not secure enough. Yes, of course, 96 00:04:46,760 --> 00:04:49,800 Speaker 4: if you have US presence and you have US companies, 97 00:04:49,600 --> 00:04:50,680 Speaker 4: does it. 98 00:04:51,040 --> 00:04:53,039 Speaker 5: Mean that would it help? 99 00:04:53,279 --> 00:04:53,559 Speaker 8: Sure? 100 00:04:53,800 --> 00:04:57,120 Speaker 4: Perhaps, But it's no guarantee, and you have that any 101 00:04:57,200 --> 00:04:59,280 Speaker 4: anywhere around the world could land in a conflict and 102 00:04:59,320 --> 00:05:03,080 Speaker 4: the US has to leave. When Russia was first annexed 103 00:05:03,080 --> 00:05:05,200 Speaker 4: crime in twenty fourteen, I was at the Treasury Department 104 00:05:05,200 --> 00:05:07,159 Speaker 4: at the time, and we had a lot of American 105 00:05:07,200 --> 00:05:09,800 Speaker 4: companies tell us that they did not want to leave Russia. 106 00:05:09,839 --> 00:05:12,560 Speaker 5: Now the conflict wasn't there, but they didn't want to leave. 107 00:05:12,560 --> 00:05:14,440 Speaker 4: They didn't want to They didn't want to leave their 108 00:05:14,720 --> 00:05:17,560 Speaker 4: energy investments or drilling in the lurch, and we told 109 00:05:17,600 --> 00:05:20,400 Speaker 4: them they had no choice. So that's never a guarantee. 110 00:05:20,400 --> 00:05:23,320 Speaker 4: If you have American presence of broader American companies, that 111 00:05:23,560 --> 00:05:28,359 Speaker 4: doesn't de facto mean that they protect territory. It just 112 00:05:28,880 --> 00:05:32,279 Speaker 4: maybe there's an incentive for the US to ensure that 113 00:05:32,279 --> 00:05:34,679 Speaker 4: they're protected. But it doesn't mean anything unless it's written 114 00:05:34,760 --> 00:05:37,560 Speaker 4: in stone. And I think that when it comes to 115 00:05:37,560 --> 00:05:40,120 Speaker 4: presidents of Lensky, and I'm watching him be a very 116 00:05:40,160 --> 00:05:44,920 Speaker 4: adept leader. He is trying to work with Trump. He's 117 00:05:44,960 --> 00:05:46,880 Speaker 4: the one who came up with the minerals deal to 118 00:05:46,920 --> 00:05:49,920 Speaker 4: begin with back in October, with his victory plan. Now, 119 00:05:49,960 --> 00:05:52,760 Speaker 4: he may have not expected that Trump would ask for 120 00:05:52,839 --> 00:05:55,320 Speaker 4: five hundred million dollars worth of minerals, or that it 121 00:05:55,400 --> 00:05:59,040 Speaker 4: might not come with security arrangements, but he knows. 122 00:05:58,800 --> 00:06:00,559 Speaker 5: He has no choice but to work with Trump. Trump 123 00:06:00,560 --> 00:06:01,440 Speaker 5: controls the purse. 124 00:06:01,240 --> 00:06:04,599 Speaker 4: Strings, but he's also not gonna levy attacks on his 125 00:06:04,720 --> 00:06:08,560 Speaker 4: people for generations to come without something in return. And 126 00:06:08,880 --> 00:06:10,520 Speaker 4: Europe is there, so they're going to do that. But 127 00:06:10,600 --> 00:06:13,240 Speaker 4: we have to remember that Trump is a maximalist negotiator. 128 00:06:13,560 --> 00:06:17,080 Speaker 4: He pushes out the maximus scenario that he can try 129 00:06:17,080 --> 00:06:18,880 Speaker 4: and get because he knows he's going to get something 130 00:06:18,920 --> 00:06:22,400 Speaker 4: less and again, not my style of negotiating. However, I 131 00:06:22,520 --> 00:06:24,800 Speaker 4: do I hope, and I know hope is not a policy. 132 00:06:25,000 --> 00:06:27,120 Speaker 4: I would hope that there's something there. We don't know 133 00:06:27,160 --> 00:06:30,160 Speaker 4: all the terms yet, but I believe that that there 134 00:06:30,200 --> 00:06:34,159 Speaker 4: will be something there that will be enforced in a 135 00:06:34,200 --> 00:06:38,839 Speaker 4: negotiated settlement that should prevent Putin from invading again. 136 00:06:38,920 --> 00:06:40,080 Speaker 5: I hope that that is the case. 137 00:06:40,080 --> 00:06:42,720 Speaker 4: I would hope that the Trump administration knows that it 138 00:06:42,760 --> 00:06:45,520 Speaker 4: would only be emboldening Russia if it doesn't include that 139 00:06:45,600 --> 00:06:46,360 Speaker 4: kind of provision. 140 00:06:48,480 --> 00:06:50,760 Speaker 7: Well, we just heard President Trump say again, and we've 141 00:06:50,800 --> 00:06:54,760 Speaker 7: heard this from the administration before Ukraine joining NATO won't happen. 142 00:06:54,839 --> 00:06:55,119 Speaker 5: Hagar. 143 00:06:55,200 --> 00:06:56,560 Speaker 7: We have less than a minute left here, but I 144 00:06:56,560 --> 00:06:58,440 Speaker 7: do want to ask you about another conflict. Is it's 145 00:06:58,480 --> 00:07:00,839 Speaker 7: this weekend that the Phase one of the ceasefire agreement 146 00:07:00,880 --> 00:07:03,480 Speaker 7: between Israel and Amas is set to expire. What do 147 00:07:03,520 --> 00:07:04,479 Speaker 7: you think happens next? 148 00:07:05,279 --> 00:07:07,840 Speaker 5: That's said, so, I'm glad it expires Saturday at midnight. 149 00:07:08,320 --> 00:07:10,600 Speaker 4: That doesn't necessarily mean that war will start, that the 150 00:07:10,640 --> 00:07:14,280 Speaker 4: bombs will start at one am. It could ostensibly, But 151 00:07:15,160 --> 00:07:18,200 Speaker 4: what we will have, in reality is likely an extension 152 00:07:18,200 --> 00:07:22,200 Speaker 4: of a few days of this ceasefire, and the language 153 00:07:22,280 --> 00:07:24,640 Speaker 4: of the of Phase one was actually written where the 154 00:07:24,760 --> 00:07:29,280 Speaker 4: existing terms of the ceasefire for Phase one can continue. 155 00:07:29,080 --> 00:07:30,520 Speaker 5: For a few weeks. 156 00:07:30,560 --> 00:07:32,680 Speaker 4: Even so for a few days up to a few weeks, 157 00:07:32,840 --> 00:07:34,640 Speaker 4: meaning for a few days or a few weeks, you 158 00:07:34,720 --> 00:07:37,400 Speaker 4: could have, and it seems that there is a desire 159 00:07:37,440 --> 00:07:41,160 Speaker 4: for that. You could have even a continued exchange of 160 00:07:41,200 --> 00:07:45,720 Speaker 4: hostages for prisoners. You could have a continued a state 161 00:07:45,760 --> 00:07:48,040 Speaker 4: of the ceasefire that has been the case for. 162 00:07:48,040 --> 00:07:51,800 Speaker 5: The last six posoks. While these folks are negotiating Phase two, 163 00:07:51,840 --> 00:07:53,239 Speaker 5: and they are negotiating Phase. 164 00:07:53,080 --> 00:07:56,120 Speaker 4: Two, I don't believe these two would if they were 165 00:07:56,160 --> 00:07:58,280 Speaker 4: to even come to an agreement, would even look the 166 00:07:58,320 --> 00:08:00,080 Speaker 4: way President Biden. 167 00:07:59,800 --> 00:08:02,160 Speaker 5: Has plan it out back in May, where you have 168 00:08:02,240 --> 00:08:03,240 Speaker 5: all the hostage. 169 00:08:02,920 --> 00:08:05,760 Speaker 7: From regard we have to leave it there. Hagar Shamali, 170 00:08:05,840 --> 00:08:09,080 Speaker 7: formerly of the National Security Council. With us here on Bloomberg. 171 00:08:11,280 --> 00:08:14,760 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 172 00:08:14,840 --> 00:08:18,280 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 173 00:08:18,360 --> 00:08:21,360 Speaker 1: Cockley and Android Auto. With the Bloomberg Business app. You 174 00:08:21,400 --> 00:08:24,880 Speaker 1: can also listen live on Amazon Alexa from our flagship 175 00:08:24,920 --> 00:08:29,520 Speaker 1: New York station. Just say Alexa, play Bloomberg eleven thirty. 176 00:08:30,160 --> 00:08:34,400 Speaker 3: It'll be on Tuesday that we're talking about a joint address, 177 00:08:34,920 --> 00:08:37,480 Speaker 3: a joint session of Congress. It's like the State of 178 00:08:37,520 --> 00:08:39,280 Speaker 3: the Union, but they don't call it that the first 179 00:08:39,280 --> 00:08:41,720 Speaker 3: time around. For the new president, it'll be an update 180 00:08:41,760 --> 00:08:44,559 Speaker 3: on things, the state of our Union. He'll probably still 181 00:08:44,600 --> 00:08:50,000 Speaker 3: say that is what getting stronger, getting greater again. A 182 00:08:50,040 --> 00:08:54,199 Speaker 3: lot of questions about who would have the honor of 183 00:08:54,200 --> 00:08:58,000 Speaker 3: going on the front of the wheaties box here, not 184 00:08:58,040 --> 00:09:01,640 Speaker 3: always a very easy assignment to deliver. If the official 185 00:09:01,760 --> 00:09:06,320 Speaker 3: party response after the speech, it will be Senator Elissa 186 00:09:06,400 --> 00:09:12,600 Speaker 3: Slotkin Michigan delivering the official Democratic response. So next Tuesday night, 187 00:09:13,280 --> 00:09:15,240 Speaker 3: after we do the whole speech, the call in response, 188 00:09:15,240 --> 00:09:16,960 Speaker 3: and everything else that happens in the House chamber, that's 189 00:09:17,000 --> 00:09:19,679 Speaker 3: who you'll be hearing from. It'll be curious to consider 190 00:09:19,720 --> 00:09:23,800 Speaker 3: what the optics are going to be like whether a 191 00:09:23,920 --> 00:09:27,200 Speaker 3: kitchen table is involved. I'm Joe, Matthew and Washington. Thanks 192 00:09:27,240 --> 00:09:29,000 Speaker 3: for being with us here on the Thursday edition of 193 00:09:29,080 --> 00:09:32,959 Speaker 3: Balance of Power. I see you Axios on this little Friday. 194 00:09:33,840 --> 00:09:35,319 Speaker 3: We've got news at the White House. They're in the 195 00:09:35,360 --> 00:09:38,880 Speaker 3: Oval Office right now, Kuer Starmer, Donald Trump, the President, 196 00:09:38,920 --> 00:09:42,599 Speaker 3: the Prime Minister sitting around the fireplace, presumably with a 197 00:09:42,640 --> 00:09:46,200 Speaker 3: press pool in tow and because it's in the Oval, 198 00:09:46,200 --> 00:09:47,360 Speaker 3: we're not going to be able to bring you in 199 00:09:47,400 --> 00:09:49,520 Speaker 3: there live, but we will once the tape comes out 200 00:09:49,520 --> 00:09:50,760 Speaker 3: of there and they can play it back. There have 201 00:09:50,760 --> 00:09:53,400 Speaker 3: been questions about this whole press pool thing and exactly 202 00:09:53,440 --> 00:09:55,360 Speaker 3: who's going to be assigned to it each day according 203 00:09:55,400 --> 00:09:57,440 Speaker 3: to the White House, but this is supposed to play 204 00:09:57,440 --> 00:09:59,960 Speaker 3: out essentially the way the Macron visit did a cup 205 00:10:00,280 --> 00:10:03,160 Speaker 3: days ago. You get the bilateral and the Oval, spend 206 00:10:03,160 --> 00:10:05,080 Speaker 3: some time with the media, little Q and a warm 207 00:10:05,160 --> 00:10:07,240 Speaker 3: things up, and then later on it's currently scheduled for 208 00:10:07,240 --> 00:10:09,920 Speaker 3: two pm, and that will likely not be anywhere near 209 00:10:09,960 --> 00:10:13,400 Speaker 3: the start time of the joint news conference in the 210 00:10:13,440 --> 00:10:14,000 Speaker 3: East room. 211 00:10:14,360 --> 00:10:15,400 Speaker 2: Starmer Trump. 212 00:10:15,480 --> 00:10:20,120 Speaker 3: By the way, the British media they don't ask questions 213 00:10:20,120 --> 00:10:23,000 Speaker 3: the way we do around here, so this could actually 214 00:10:23,000 --> 00:10:25,080 Speaker 3: get interesting when we hear some of the more pointed 215 00:10:25,120 --> 00:10:28,640 Speaker 3: ideas from the British press. They're all here, everybody's over there. 216 00:10:28,679 --> 00:10:31,200 Speaker 3: It's a big crowd on the campus at the White House, 217 00:10:31,200 --> 00:10:34,320 Speaker 3: and that's where we start our conversation with today's political panel. 218 00:10:34,440 --> 00:10:38,000 Speaker 3: Genie Shanzo is with this Bloomberg Politics contributor, Democratic analyst 219 00:10:38,040 --> 00:10:40,520 Speaker 3: and senior Democracy fellow with the Center for the Study 220 00:10:40,559 --> 00:10:43,360 Speaker 3: of the Presidency in Congress, and Chape and Phase Back, 221 00:10:43,400 --> 00:10:46,880 Speaker 3: Republican strategist, founder of Lighthouse Public Affairs. Great to see 222 00:10:46,880 --> 00:10:48,480 Speaker 3: you both, Chape and it's been a while and nice 223 00:10:48,480 --> 00:10:51,320 Speaker 3: to have you back here on the panel. Genie, we 224 00:10:51,360 --> 00:10:53,920 Speaker 3: went through this together a couple of days ago with Macron. 225 00:10:54,320 --> 00:10:57,520 Speaker 3: There's already a different vibe though, right between these two. 226 00:10:57,559 --> 00:11:01,079 Speaker 3: Donald Trump actually likes Keir Starmer and seems to want 227 00:11:01,360 --> 00:11:04,560 Speaker 3: to offer some sort of deliverables, even if not in 228 00:11:04,640 --> 00:11:08,000 Speaker 3: the actual literal definition of security guarantees. What's going to 229 00:11:08,000 --> 00:11:11,480 Speaker 3: come out of this visit, Yeah, I mean it hits. 230 00:11:11,400 --> 00:11:14,880 Speaker 8: An uphill battle for Starmar, certainly because we heard from 231 00:11:14,880 --> 00:11:18,480 Speaker 8: the President yesterday that, you know, the security guarantees that 232 00:11:18,600 --> 00:11:22,319 Speaker 8: McCrone came asking for and Starmar is asking for are 233 00:11:22,679 --> 00:11:26,080 Speaker 8: probably not going to be forthcoming. Although he did say 234 00:11:26,480 --> 00:11:29,280 Speaker 8: that Russia would have to give up something. We don't 235 00:11:29,320 --> 00:11:32,320 Speaker 8: know what that is, so maybe there's a little movement there, 236 00:11:32,360 --> 00:11:34,800 Speaker 8: I think for Starmar. Of course, what you were just 237 00:11:34,880 --> 00:11:38,080 Speaker 8: talking about is the issue of tariffs. And I just 238 00:11:38,200 --> 00:11:42,200 Speaker 8: loved your conversation with Mike McKee because I love Mike McKee, 239 00:11:42,200 --> 00:11:45,160 Speaker 8: and he said there is no clarity here, so I said, oh, 240 00:11:45,240 --> 00:11:46,240 Speaker 8: thank god, Mike McKee. 241 00:11:46,240 --> 00:11:47,120 Speaker 2: I thought it was just me. 242 00:11:47,920 --> 00:11:51,640 Speaker 8: But Starmar is certainly trying to get some clarity on 243 00:11:51,800 --> 00:11:54,080 Speaker 8: the tariffs which are pending. So I think those are 244 00:11:54,120 --> 00:11:56,640 Speaker 8: the two big things we're looking for. But of course 245 00:11:56,679 --> 00:11:59,440 Speaker 8: it is a really fraught time in Europe. And you know, 246 00:11:59,520 --> 00:12:02,400 Speaker 8: somebody reminded me that there was a column the other 247 00:12:02,480 --> 00:12:05,319 Speaker 8: day from Martin Wolf saying the US is now an 248 00:12:05,440 --> 00:12:08,840 Speaker 8: enemy of Europe. Now that's certainly overstated in my mind, 249 00:12:09,200 --> 00:12:12,120 Speaker 8: but that's the view of some people over in Europe. 250 00:12:12,160 --> 00:12:14,480 Speaker 8: So they're going to be treading a little bit carefully, 251 00:12:14,520 --> 00:12:16,880 Speaker 8: I think in this meeting today, and certainly the press 252 00:12:16,920 --> 00:12:19,120 Speaker 8: are going to be fascinating to hear from overseas. 253 00:12:20,559 --> 00:12:22,440 Speaker 3: How's this going to go chap It in your view? 254 00:12:22,480 --> 00:12:25,200 Speaker 3: And what would make this qualify as a win for 255 00:12:25,320 --> 00:12:25,960 Speaker 3: Donald Trump? 256 00:12:27,800 --> 00:12:30,319 Speaker 9: Well, of course for Donald Trump extracting any sort of 257 00:12:30,400 --> 00:12:33,120 Speaker 9: concessions or anything that he can you know, go to 258 00:12:33,160 --> 00:12:36,440 Speaker 9: the reporters and talk about extracting from from them or 259 00:12:36,520 --> 00:12:40,320 Speaker 9: him would be a win. What that is you know, 260 00:12:40,840 --> 00:12:43,000 Speaker 9: maybe anybody's guests at this point, I think Genie's write 261 00:12:43,040 --> 00:12:47,040 Speaker 9: about the two top topics and what's important. I think 262 00:12:47,080 --> 00:12:51,080 Speaker 9: she's also right about this is a fraud time. I 263 00:12:51,160 --> 00:12:55,640 Speaker 9: agree we are not Europe's enemy, and I find that 264 00:12:55,840 --> 00:12:59,040 Speaker 9: view a little strange considering, you know, America has been 265 00:12:59,080 --> 00:13:02,520 Speaker 9: the world's piggybait, the world's police policemen, the world's protector, all. 266 00:13:02,360 --> 00:13:03,000 Speaker 2: Of this stuff. 267 00:13:03,880 --> 00:13:07,240 Speaker 9: And Donald Trump has a mandate to be transformational. So 268 00:13:07,320 --> 00:13:09,600 Speaker 9: he's taking a look, rightly, So with these relationships, what 269 00:13:09,640 --> 00:13:11,600 Speaker 9: are we getting out of it? How is it serving 270 00:13:11,640 --> 00:13:15,160 Speaker 9: American interests? I think, as opposed to the last four years, 271 00:13:15,160 --> 00:13:18,000 Speaker 9: you're going to see a president who that's really his 272 00:13:18,040 --> 00:13:20,760 Speaker 9: only concern. Now you may disagree with what he thinks 273 00:13:20,800 --> 00:13:23,600 Speaker 9: is an American's interest, but I think that's the framework 274 00:13:23,640 --> 00:13:25,160 Speaker 9: that he's using for these meetings. 275 00:13:26,160 --> 00:13:28,520 Speaker 3: This is a different relationship though, right, isn't it. Chapin, 276 00:13:28,559 --> 00:13:30,480 Speaker 3: It's one thing to have Emmanuel Macrone. He says, hey, 277 00:13:30,520 --> 00:13:32,520 Speaker 3: here's a manual. You know, there was a lot of 278 00:13:33,080 --> 00:13:37,600 Speaker 3: kind of chest thumping between these two trying to get 279 00:13:37,600 --> 00:13:38,520 Speaker 3: the better of each other. 280 00:13:38,600 --> 00:13:40,040 Speaker 2: He actually likes here, Starmer. 281 00:13:40,080 --> 00:13:44,320 Speaker 3: They've had a relationship going back to before the election, 282 00:13:44,440 --> 00:13:46,800 Speaker 3: and there was a two hour phone call that followed 283 00:13:47,040 --> 00:13:51,520 Speaker 3: Donald Trump's victory. He also likes the United Kingdom. He 284 00:13:51,600 --> 00:13:53,880 Speaker 3: wants to get the invite for the state visit and 285 00:13:53,920 --> 00:13:56,960 Speaker 3: spend time with the king. Right, this is potentially a 286 00:13:57,000 --> 00:13:59,640 Speaker 3: different vibe in this meeting today. Could it help here, Starmer? 287 00:14:00,800 --> 00:14:03,959 Speaker 9: I think it can help both men. You know, relationships 288 00:14:04,000 --> 00:14:08,240 Speaker 9: matter for all the you know Ballely who over. You 289 00:14:08,240 --> 00:14:12,240 Speaker 9: know Trump's relationships from his first term with you know, dictators, 290 00:14:12,280 --> 00:14:15,920 Speaker 9: and you know North Korea and Russia. I mean, relationships matter, right, 291 00:14:16,240 --> 00:14:19,880 Speaker 9: He cares about peace between Ukraine and Russia. So I 292 00:14:19,920 --> 00:14:23,600 Speaker 9: find it very odd that all the that everyone seems 293 00:14:23,640 --> 00:14:26,520 Speaker 9: to be in favorable war and and more money and 294 00:14:26,640 --> 00:14:30,120 Speaker 9: soldiers and manpower being sunk into this thing. So it 295 00:14:30,280 --> 00:14:34,160 Speaker 9: is a different relationship. Perhaps the UK is a little 296 00:14:35,200 --> 00:14:38,560 Speaker 9: harder of a target when you're when you're blustering against 297 00:14:39,080 --> 00:14:41,800 Speaker 9: world leaders than France is, but it is it is 298 00:14:41,840 --> 00:14:44,160 Speaker 9: a historically important relationship too, and I think both men 299 00:14:44,280 --> 00:14:45,160 Speaker 9: understand that as well. 300 00:14:46,560 --> 00:14:51,280 Speaker 3: The special relationship. Genie uh facing a new reality today, 301 00:14:51,760 --> 00:14:54,360 Speaker 3: what will look like by the time there is a deal, 302 00:14:54,600 --> 00:14:56,600 Speaker 3: presuming there is one for Ukraine. 303 00:14:58,000 --> 00:15:00,400 Speaker 8: Yeah, first of all, to your point about him liking 304 00:15:00,480 --> 00:15:03,080 Speaker 8: a great Britain, he certainly likes the royal family. 305 00:15:03,160 --> 00:15:05,120 Speaker 5: And you know, you're wonder. 306 00:15:04,640 --> 00:15:08,080 Speaker 8: If Farmer should have brought with him Princess Kate and 307 00:15:08,800 --> 00:15:11,920 Speaker 8: Prince William because he's no fan of Harry and Meghan 308 00:15:11,920 --> 00:15:14,440 Speaker 8: as we know full well, but those two he really 309 00:15:14,480 --> 00:15:17,600 Speaker 8: seems to appreciate, so that may have, you know, lund 310 00:15:17,680 --> 00:15:20,720 Speaker 8: him in good Steed there. You know, I think this 311 00:15:20,880 --> 00:15:25,360 Speaker 8: agreement is fascinating because it is so very vague what 312 00:15:25,440 --> 00:15:27,360 Speaker 8: we know about it at this point. You know, they're 313 00:15:27,400 --> 00:15:31,720 Speaker 8: talking about this jointly owned investment fund. It's going to 314 00:15:31,800 --> 00:15:36,200 Speaker 8: involve new resources, not the old, but again no commitment 315 00:15:36,240 --> 00:15:39,240 Speaker 8: on security or additional funding for the wars. So what 316 00:15:39,320 --> 00:15:42,480 Speaker 8: this looks like in terms of the specifics are very 317 00:15:42,560 --> 00:15:45,160 Speaker 8: unclear at this point. It sort of reminds me what 318 00:15:45,200 --> 00:15:47,040 Speaker 8: we saw out of the house the other day. This 319 00:15:47,160 --> 00:15:50,120 Speaker 8: is sort of like a framework with the specifics yet 320 00:15:50,120 --> 00:15:52,640 Speaker 8: to be filled in. But I do think this is 321 00:15:52,680 --> 00:15:56,160 Speaker 8: an important first step for Zelenski and I think the 322 00:15:56,240 --> 00:15:59,120 Speaker 8: agreement of this framework as I'm calling it, is important 323 00:15:59,160 --> 00:16:02,600 Speaker 8: because number one, he gets to talk to visit with 324 00:16:03,040 --> 00:16:06,640 Speaker 8: face to face with President Trump before Putin, and that 325 00:16:06,800 --> 00:16:09,080 Speaker 8: is a win for Zelensky because for a while we 326 00:16:09,120 --> 00:16:12,080 Speaker 8: thought maybe Putin and Trump would meet face to face first, 327 00:16:12,520 --> 00:16:15,000 Speaker 8: so that is important. And also he gets to let 328 00:16:15,000 --> 00:16:19,040 Speaker 8: Donald Trump celebrate a win, a victory in agreement. Nothing 329 00:16:19,120 --> 00:16:21,880 Speaker 8: Donald Trump likes more than an agreement. So here is one, 330 00:16:21,960 --> 00:16:25,040 Speaker 8: vague as it is, and then they can move forward 331 00:16:25,080 --> 00:16:27,160 Speaker 8: on the specific So I think this is a good 332 00:16:27,240 --> 00:16:30,480 Speaker 8: day tomorrow for Zelenski, but I think from a foreign 333 00:16:30,480 --> 00:16:33,240 Speaker 8: policies perspective, it is an awfully odd day for the 334 00:16:33,360 --> 00:16:36,120 Speaker 8: US that we would be requesting from a war towards 335 00:16:36,120 --> 00:16:37,840 Speaker 8: the country payback. 336 00:16:38,760 --> 00:16:38,960 Speaker 7: You know. 337 00:16:39,160 --> 00:16:43,240 Speaker 8: It has a very very sort of of concerning I 338 00:16:43,280 --> 00:16:46,960 Speaker 8: think for long term prospects of our relationships around the world. 339 00:16:47,000 --> 00:16:50,160 Speaker 8: But a win for Zelensky for sure in the short term. 340 00:16:50,880 --> 00:16:53,320 Speaker 3: I'm guessing, based on what you said earlier, Chapin, that 341 00:16:53,360 --> 00:16:55,240 Speaker 3: you like that you want to see the US got 342 00:16:55,280 --> 00:16:55,680 Speaker 3: something back. 343 00:16:55,720 --> 00:16:56,200 Speaker 2: Am I wrong? 344 00:16:57,760 --> 00:17:01,040 Speaker 9: Not at all? I mean, I think every decision has 345 00:17:01,080 --> 00:17:04,400 Speaker 9: to be run through a framework of is this helping 346 00:17:04,480 --> 00:17:07,080 Speaker 9: America or not. Why else would we be doing it. 347 00:17:07,240 --> 00:17:09,439 Speaker 9: We've put hundreds of billions of dollars into Ukraine and 348 00:17:09,480 --> 00:17:11,600 Speaker 9: we can't trust them with the money, and now people 349 00:17:11,640 --> 00:17:13,399 Speaker 9: want us to trust them with our men and women 350 00:17:14,160 --> 00:17:15,399 Speaker 9: in the military end lives. 351 00:17:15,560 --> 00:17:16,480 Speaker 2: I don't think so. 352 00:17:16,480 --> 00:17:18,520 Speaker 9: So absolutely, we should be getting something for this if 353 00:17:18,520 --> 00:17:20,720 Speaker 9: we're going, you know, on a return on investment. Now, 354 00:17:21,000 --> 00:17:22,840 Speaker 9: maybe helping Ukraine is the right thing to do. But 355 00:17:23,080 --> 00:17:26,000 Speaker 9: you know, only in the Trump era can working towards 356 00:17:26,040 --> 00:17:29,080 Speaker 9: peace and getting something for America be criticized, right, I mean, 357 00:17:29,520 --> 00:17:30,399 Speaker 9: I don't understand it. 358 00:17:32,720 --> 00:17:36,120 Speaker 3: Well, Jeanie today is going to help to inform tomorrow 359 00:17:36,640 --> 00:17:39,480 Speaker 3: when Vladavia Zelenski arrives, is he going to want to 360 00:17:39,520 --> 00:17:41,679 Speaker 3: negotiate with Donald Trump or is he going to sit 361 00:17:41,720 --> 00:17:43,440 Speaker 3: down and sign a deal? Because the White House seems 362 00:17:43,480 --> 00:17:44,320 Speaker 3: to think this is done. 363 00:17:45,720 --> 00:17:49,280 Speaker 8: Yeah, it's still unclear. I do think we are going 364 00:17:49,359 --> 00:17:52,240 Speaker 8: to see the deal signed. I do think he will 365 00:17:52,359 --> 00:17:55,480 Speaker 8: express to Donald Trump his view. But I do think 366 00:17:55,600 --> 00:17:59,280 Speaker 8: this framework likely gets signed. But when we think about 367 00:18:00,080 --> 00:18:04,400 Speaker 8: the criticism of this deal, let's think about it from 368 00:18:04,440 --> 00:18:08,360 Speaker 8: the long term perspective. You already have the incoming Chancellor 369 00:18:08,400 --> 00:18:12,880 Speaker 8: of Germany. Talking about Britain and France extending their nuclear 370 00:18:13,000 --> 00:18:17,400 Speaker 8: umbrella to Germany. I mean, just pause and think about that. Germany, 371 00:18:17,680 --> 00:18:20,439 Speaker 8: with the rise of the far right party in the 372 00:18:20,520 --> 00:18:25,000 Speaker 8: election on Sunday, is talking potentially about thinking about the 373 00:18:25,040 --> 00:18:27,840 Speaker 8: development of nuclear weapons. We haven't seen anything like that 374 00:18:27,920 --> 00:18:32,000 Speaker 8: since World War Two. That is a frightening, frightening proposition. 375 00:18:32,560 --> 00:18:37,200 Speaker 8: And we are also speaking of starmer the Baltic's, Poland Norway. 376 00:18:37,400 --> 00:18:41,520 Speaker 8: They are talking about a growing European defense community in 377 00:18:41,520 --> 00:18:44,720 Speaker 8: which Ukraine, the most powerful military in Europe, the biggest 378 00:18:44,760 --> 00:18:48,679 Speaker 8: defense industry in Europe, would be a leading component. So 379 00:18:48,840 --> 00:18:52,160 Speaker 8: we are talking about a movement away from the US 380 00:18:52,240 --> 00:18:55,920 Speaker 8: as it pertains to security. And yes, we have invested 381 00:18:56,000 --> 00:18:59,720 Speaker 8: millions of dollars, billions of dollars in Ukraine. Why because 382 00:19:00,000 --> 00:19:03,360 Speaker 8: thinking of a return on investment that is cheaper than 383 00:19:03,440 --> 00:19:07,040 Speaker 8: us having the cost of human lives on the line 384 00:19:07,600 --> 00:19:13,120 Speaker 8: or nuclear Germany over there potentially, So there's another way 385 00:19:13,119 --> 00:19:15,359 Speaker 8: to think about this. Then, out of just the sheer 386 00:19:15,560 --> 00:19:18,120 Speaker 8: dollars that are being talked about, and so I think 387 00:19:18,200 --> 00:19:21,480 Speaker 8: the long term impacts are what people are deeply concerned about. 388 00:19:22,520 --> 00:19:25,439 Speaker 3: Spending time with our great political panel Genie Schanzeno and 389 00:19:25,520 --> 00:19:27,960 Speaker 3: Chape and Fay with some headlines now coming from the 390 00:19:27,960 --> 00:19:28,560 Speaker 3: Oval Office. 391 00:19:28,600 --> 00:19:30,359 Speaker 2: They have begun their meeting guys. 392 00:19:30,440 --> 00:19:32,400 Speaker 3: Reporters in the room are letting us know what they're 393 00:19:32,440 --> 00:19:35,520 Speaker 3: talking about, as Donald Trump says, they will also discuss 394 00:19:35,640 --> 00:19:39,840 Speaker 3: trade beyond Ukraine, and Donald Trump saying he will visit 395 00:19:39,880 --> 00:19:42,240 Speaker 3: the UK in the near future. So it looks Genie 396 00:19:42,240 --> 00:19:44,159 Speaker 3: like he is going to spend some time with the 397 00:19:44,240 --> 00:19:48,280 Speaker 3: royals here. Keir Starmer thanking President Trump for changing the 398 00:19:48,359 --> 00:19:50,600 Speaker 3: conversation on a peace deal. 399 00:19:51,200 --> 00:19:51,880 Speaker 2: It seems he. 400 00:19:51,840 --> 00:19:55,119 Speaker 3: Has brought a letter from the King which is just 401 00:19:55,160 --> 00:19:57,840 Speaker 3: being presented now in our second hour. Likely because they're 402 00:19:57,840 --> 00:19:59,200 Speaker 3: going to go on for a bit, we'll bring you 403 00:19:59,240 --> 00:20:02,240 Speaker 3: into the Oval this conversation. You'll actually hear it, see 404 00:20:02,280 --> 00:20:03,320 Speaker 3: it in real time. 405 00:20:03,440 --> 00:20:04,040 Speaker 2: Jape and Fay. 406 00:20:04,600 --> 00:20:08,240 Speaker 3: These these sort of events in the Oval Office, whether 407 00:20:08,280 --> 00:20:12,160 Speaker 3: it's a bilateral, whether a foreign leader, or signing eos 408 00:20:12,280 --> 00:20:15,000 Speaker 3: or talking about executive actions, have become kind of live 409 00:20:15,040 --> 00:20:17,320 Speaker 3: at the improv for Donald Trump. He's laying down a 410 00:20:17,320 --> 00:20:19,679 Speaker 3: half hour to an hour a day in the Oval, 411 00:20:19,760 --> 00:20:23,800 Speaker 3: back and forth with reporters. This is what some Americans 412 00:20:23,840 --> 00:20:26,919 Speaker 3: said they wanted right when when Joe Biden wasn't talking 413 00:20:26,960 --> 00:20:29,879 Speaker 3: to the media on a daily basis, Is this something 414 00:20:30,200 --> 00:20:32,960 Speaker 3: that he can keep up beyond the first one hundred days. 415 00:20:34,160 --> 00:20:36,600 Speaker 9: I'm Americans. I mean, you know, if a Republican is 416 00:20:36,600 --> 00:20:38,320 Speaker 9: an office, all you hear about from the press and 417 00:20:39,240 --> 00:20:41,360 Speaker 9: the left is, you know, answer questions and how many 418 00:20:41,359 --> 00:20:43,800 Speaker 9: press conferences. We didn't hear about that for four years, 419 00:20:43,880 --> 00:20:45,920 Speaker 9: and so now it is refreshing, and I think it's good. 420 00:20:46,280 --> 00:20:49,119 Speaker 9: More transparency is always better. Again, we're living in the 421 00:20:49,200 --> 00:20:53,040 Speaker 9: upside down, right, transparency apparently is bad. The president answering questions, 422 00:20:53,240 --> 00:20:56,159 Speaker 9: you know, is being criticized. But you're right, and I 423 00:20:56,160 --> 00:20:59,040 Speaker 9: think it's a good, refreshing, transformational tone. 424 00:21:00,119 --> 00:21:02,000 Speaker 3: I had never heard anybody, I have to admit, I 425 00:21:02,000 --> 00:21:04,240 Speaker 3: thought it was I thought everybody was. He's on TV 426 00:21:04,359 --> 00:21:07,040 Speaker 3: fifteen hours a day. I thought this was a good thing. 427 00:21:10,400 --> 00:21:13,840 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 428 00:21:13,920 --> 00:21:16,920 Speaker 1: us live weekdays at noon and five pm Eastern on 429 00:21:17,080 --> 00:21:20,320 Speaker 1: almal Coarclay and Android Auto with the Bloomberg Business App. 430 00:21:20,480 --> 00:21:23,760 Speaker 1: Listen on demand wherever you get your podcasts, or watch 431 00:21:23,840 --> 00:21:25,480 Speaker 1: us live on YouTube. 432 00:21:26,640 --> 00:21:29,200 Speaker 3: In Vidia speaking right, I mean it's down today. You 433 00:21:29,320 --> 00:21:31,359 Speaker 3: just heard Charlie, it's down five bucks. But think of 434 00:21:31,359 --> 00:21:33,960 Speaker 3: how many people picked up shares of Nvidia a couple 435 00:21:34,000 --> 00:21:34,480 Speaker 3: of years. 436 00:21:34,359 --> 00:21:36,199 Speaker 2: Ago, and they just keep looking at that four oh 437 00:21:36,240 --> 00:21:38,240 Speaker 2: one k. Come on, Jensen. 438 00:21:39,040 --> 00:21:42,080 Speaker 3: We had the big earnings report last night, went pretty well, 439 00:21:43,960 --> 00:21:48,399 Speaker 3: matched expectations topped other expectations. When you look at the 440 00:21:48,440 --> 00:21:51,080 Speaker 3: AI spend, this thing is chugging along. But the stock 441 00:21:51,200 --> 00:21:53,639 Speaker 3: is lower this morning, and I'll be it maybe a 442 00:21:53,680 --> 00:21:56,920 Speaker 3: little exhausted after such an advance. But of course expectations 443 00:21:56,920 --> 00:22:00,600 Speaker 3: were so high for Nvidia. That's why it's in Nvidia. 444 00:22:00,720 --> 00:22:04,040 Speaker 3: People expect a Christmas miracle every couple of months here. 445 00:22:04,040 --> 00:22:05,399 Speaker 2: It doesn't always work out like that. 446 00:22:05,560 --> 00:22:08,159 Speaker 3: So yeah, stocks trading lower, it's pulling a bunch of 447 00:22:08,240 --> 00:22:10,560 Speaker 3: other shares lower with it. The mag seven's down, a 448 00:22:10,600 --> 00:22:14,800 Speaker 3: lot of the AI related names are down. AMD is down, Constellation, 449 00:22:15,000 --> 00:22:17,359 Speaker 3: the cooling companies, all the stuff we look at typically 450 00:22:17,359 --> 00:22:19,320 Speaker 3: when it comes to data center feeling this So it's 451 00:22:19,320 --> 00:22:21,960 Speaker 3: a kind of a market event here in Washington. It's 452 00:22:21,960 --> 00:22:24,440 Speaker 3: a policy event, and there are a lot of questions 453 00:22:24,480 --> 00:22:28,480 Speaker 3: right now about whether export controls that have been turned 454 00:22:28,640 --> 00:22:32,359 Speaker 3: on in Vidia repeatedly actually have any impact at all. 455 00:22:32,920 --> 00:22:35,919 Speaker 3: Jensen Wong doesn't seem to think so. In an interview 456 00:22:36,240 --> 00:22:39,280 Speaker 3: on the Other Network following the quarterly report, it says 457 00:22:39,320 --> 00:22:43,040 Speaker 3: it's unsure if these controls against China are effective national 458 00:22:43,080 --> 00:22:46,600 Speaker 3: security measures for the US. It's hard to tell whether 459 00:22:46,640 --> 00:22:47,359 Speaker 3: it's effective. 460 00:22:47,600 --> 00:22:48,919 Speaker 2: Responding to a question. 461 00:22:48,680 --> 00:22:52,520 Speaker 3: About whether Deep Seek proved the whole thing wrong, and 462 00:22:52,560 --> 00:22:55,960 Speaker 3: that's where we start our conversation with Michael Shepherd, who's 463 00:22:56,000 --> 00:22:57,680 Speaker 3: with us in studio here. We wanted to talk to 464 00:22:57,720 --> 00:22:59,760 Speaker 3: him in advance of the report, but of course we 465 00:23:00,000 --> 00:23:02,160 Speaker 3: spent a lot of time in the cabinet room yesterday. 466 00:23:02,560 --> 00:23:07,520 Speaker 3: He covers the intersection of Washington policy and technology. Senior 467 00:23:07,600 --> 00:23:10,879 Speaker 3: editor for Technology and Strategic Industries. Nice to see you 468 00:23:10,960 --> 00:23:14,080 Speaker 3: the day after shopping. Great, So big questions always when 469 00:23:14,119 --> 00:23:17,720 Speaker 3: we sit down with Mike Shepherd. It's never a small thought. 470 00:23:17,760 --> 00:23:21,080 Speaker 3: It's a big think on export controls, whether they're worth 471 00:23:21,119 --> 00:23:24,159 Speaker 3: it at the expense for instance of a company like 472 00:23:24,200 --> 00:23:26,640 Speaker 3: in video when a Deep Seek just pops up and says, hey, 473 00:23:26,640 --> 00:23:28,520 Speaker 3: we stole your stuff anyway, Well. 474 00:23:28,320 --> 00:23:30,639 Speaker 6: This is one of the big questions actually that was 475 00:23:31,480 --> 00:23:35,439 Speaker 6: surrounding the Trump administration as it took power, and that 476 00:23:35,640 --> 00:23:39,080 Speaker 6: was whether they would continue further down this path of 477 00:23:39,200 --> 00:23:43,919 Speaker 6: trying to restrict China's access to advanced technologies, including chips 478 00:23:43,920 --> 00:23:46,919 Speaker 6: and semiconductors, because there is a lot of impact on 479 00:23:47,080 --> 00:23:51,359 Speaker 6: US businesses. And you know, the idea of restricting China, 480 00:23:51,440 --> 00:23:56,000 Speaker 6: the world's second largest economy and the world's largest market 481 00:23:56,040 --> 00:24:01,119 Speaker 6: for semiconductor purchases, it really does have implications for companies 482 00:24:01,440 --> 00:24:04,760 Speaker 6: like Intel, but a whole bunch of others. In Vidia, 483 00:24:05,320 --> 00:24:07,440 Speaker 6: you know, of course, they do a lot of China business. 484 00:24:07,520 --> 00:24:10,760 Speaker 6: And when it comes to export controls, Joe, they did 485 00:24:10,800 --> 00:24:13,880 Speaker 6: acknowledge on the call. Jensen Wang himself said that, look, 486 00:24:13,880 --> 00:24:17,000 Speaker 6: our China business is down a little bit since the 487 00:24:17,080 --> 00:24:19,959 Speaker 6: export controls have been put into place, and that's been 488 00:24:20,000 --> 00:24:23,080 Speaker 6: over the past couple of years. More recently we've seen 489 00:24:23,200 --> 00:24:26,239 Speaker 6: a new round. Right before Joe Biden left office, his 490 00:24:26,320 --> 00:24:29,919 Speaker 6: parting gift to Donald Trump was a new three tiered 491 00:24:29,960 --> 00:24:34,280 Speaker 6: system of access, if you will, to AI computing power, 492 00:24:34,320 --> 00:24:37,280 Speaker 6: and that is a set of limits on how many 493 00:24:37,359 --> 00:24:41,480 Speaker 6: of these advanced semiconductors anyone from certain countries can buy. 494 00:24:41,640 --> 00:24:44,360 Speaker 6: So in the first year, we talked about Cure Starmer 495 00:24:44,480 --> 00:24:47,160 Speaker 6: and his visit the UK, of course, and very close 496 00:24:47,280 --> 00:24:49,880 Speaker 6: US allies would be in the twenty or so nations 497 00:24:49,880 --> 00:24:54,600 Speaker 6: that get that you're behind the velvet rope. But if 498 00:24:54,640 --> 00:24:57,720 Speaker 6: you're in kind of the big middle, you will have to, 499 00:24:59,280 --> 00:25:01,760 Speaker 6: you know, work harder to gain that access. You can 500 00:25:01,760 --> 00:25:05,119 Speaker 6: buy fewer chips without getting an export license. And then 501 00:25:05,119 --> 00:25:07,119 Speaker 6: if you're China, you're really in the third tier like 502 00:25:07,200 --> 00:25:10,280 Speaker 6: Russia and other US adversaries, where it's much more well. 503 00:25:10,359 --> 00:25:12,680 Speaker 3: At the same time, Jensen Wong said last night, there's 504 00:25:12,680 --> 00:25:16,160 Speaker 3: a lot of competition in China. He named Huawei as 505 00:25:16,240 --> 00:25:20,840 Speaker 3: a major competitor. Are we playing fair with our own 506 00:25:20,880 --> 00:25:23,320 Speaker 3: companies here when it comes to an Nvidia for instance, 507 00:25:23,400 --> 00:25:24,760 Speaker 3: or are we holding back innovation? 508 00:25:25,080 --> 00:25:28,440 Speaker 6: And that is the very question that not only Jensen Wang, 509 00:25:28,560 --> 00:25:33,879 Speaker 6: but other big CEOs have been raising. We heard Andy Jasse, 510 00:25:33,960 --> 00:25:37,560 Speaker 6: who was interviewed by our colleague Caroline Hyde earlier today 511 00:25:38,040 --> 00:25:44,159 Speaker 6: on Bloomberg Technology, basically laying out his concerns specifically for 512 00:25:44,280 --> 00:25:49,280 Speaker 6: Amazon World Services. He said, look, not a direct problem 513 00:25:49,359 --> 00:25:52,240 Speaker 6: for US, and yet he sees the risk in the 514 00:25:52,280 --> 00:25:54,600 Speaker 6: same way that Jensen Wang does. You end up pushing 515 00:25:54,720 --> 00:25:58,679 Speaker 6: US allies toward other countries. He didn't name China, but 516 00:25:59,200 --> 00:26:02,280 Speaker 6: you know, maybe you push those other countries to trying 517 00:26:02,320 --> 00:26:05,439 Speaker 6: to acquire chips from Chinese chip makers like SMIC or others. 518 00:26:05,600 --> 00:26:07,879 Speaker 3: The other side of this is, of course, come on, 519 00:26:08,440 --> 00:26:12,040 Speaker 3: the biggest company in the world. From time to time, 520 00:26:13,119 --> 00:26:17,560 Speaker 3: they're printing money. The backlog is so long the pipeline, 521 00:26:17,560 --> 00:26:21,520 Speaker 3: I mean, they can't they can't meet the orders they're receiving. 522 00:26:21,640 --> 00:26:23,200 Speaker 2: So why not turn the screws. 523 00:26:22,920 --> 00:26:23,440 Speaker 1: A little more. 524 00:26:23,600 --> 00:26:26,080 Speaker 6: Well, what they're seeing is a loss of opportunity. And 525 00:26:26,119 --> 00:26:30,560 Speaker 6: actually Jensen did talk about this yesterday and he said that, look, 526 00:26:31,160 --> 00:26:35,200 Speaker 6: deep Seek, you know, presents a challenge, but it also 527 00:26:35,320 --> 00:26:39,080 Speaker 6: presents an opportunity. And we remember the you know, the 528 00:26:39,119 --> 00:26:45,440 Speaker 6: week after deep Seek introduced its revolutionary R one chapop. 529 00:26:45,960 --> 00:26:49,679 Speaker 6: It really shook up companies across the board, but in 530 00:26:49,720 --> 00:26:54,879 Speaker 6: particular video. It's seventeen percent drop on that Monday, a 531 00:26:54,920 --> 00:26:58,120 Speaker 6: week after the deep Seek release, one of the biggest 532 00:26:58,160 --> 00:27:03,680 Speaker 6: market losses in history, really, but it highlighted the stakes 533 00:27:04,080 --> 00:27:08,560 Speaker 6: for Nvidio. But what Jensen was saying essentially was that look, 534 00:27:09,320 --> 00:27:15,120 Speaker 6: deep seeks innovation actually creates new avenues of demand potentially 535 00:27:15,200 --> 00:27:17,840 Speaker 6: for us. You know, the demand for computing power through 536 00:27:17,840 --> 00:27:21,960 Speaker 6: a model like this could grow exponentially depending on how 537 00:27:22,000 --> 00:27:25,320 Speaker 6: it's deployed. Like the one off of achieving and creating 538 00:27:25,359 --> 00:27:27,480 Speaker 6: the model is one thing, but then when you put 539 00:27:27,480 --> 00:27:29,440 Speaker 6: it to use, that's where you need the compute. 540 00:27:29,440 --> 00:27:32,240 Speaker 3: Interesting as the White House kind of figures out where 541 00:27:32,240 --> 00:27:33,680 Speaker 3: to go here, and I don't know if we're getting 542 00:27:33,720 --> 00:27:36,760 Speaker 3: any clarity from the administration on the number of nations 543 00:27:36,800 --> 00:27:38,280 Speaker 3: that are on that list, for instance, or. 544 00:27:38,280 --> 00:27:39,639 Speaker 2: How they're going to handle this. 545 00:27:39,920 --> 00:27:42,080 Speaker 3: Donald Trump met with Jensen Wong talked about it in 546 00:27:42,119 --> 00:27:45,520 Speaker 3: person just a couple of weeks ago. Is this, like 547 00:27:45,600 --> 00:27:49,640 Speaker 3: many things from this White House, whether it's tariff's other 548 00:27:49,760 --> 00:27:53,120 Speaker 3: geopolitical matters, were simply no one knows. 549 00:27:53,359 --> 00:27:55,359 Speaker 6: You're right, Joe, We are living day to day and 550 00:27:55,440 --> 00:27:58,560 Speaker 6: even yesterday you talked about the cabinet meeting. We got 551 00:27:58,680 --> 00:28:03,199 Speaker 6: one message on TARA against Canada and Mexico, and we 552 00:28:03,280 --> 00:28:06,720 Speaker 6: get another one this morning. Thing through the President's truth 553 00:28:06,800 --> 00:28:10,320 Speaker 6: social feed about the timing of those levees and whether 554 00:28:10,440 --> 00:28:13,480 Speaker 6: or not they would definitely go into effect and when 555 00:28:13,840 --> 00:28:18,199 Speaker 6: and under what circumstances. And the same thing today with 556 00:28:18,400 --> 00:28:22,800 Speaker 6: China tariffs too, he announced another ten percent. 557 00:28:22,560 --> 00:28:24,840 Speaker 2: What does that mean? In video? And for this conversation, 558 00:28:24,880 --> 00:28:25,359 Speaker 2: we're having. 559 00:28:25,400 --> 00:28:29,520 Speaker 6: Well, you know, they did address that on the call yesterday. 560 00:28:29,560 --> 00:28:34,040 Speaker 6: The CFO talked about it a little bit, and essentially 561 00:28:34,080 --> 00:28:37,160 Speaker 6: they called tariffs a big unknown for them. They said 562 00:28:37,160 --> 00:28:39,840 Speaker 6: that they will comply, of course, with whatever measures the 563 00:28:39,920 --> 00:28:43,880 Speaker 6: US government imposes in this era via tariffs or export controls, 564 00:28:44,040 --> 00:28:46,040 Speaker 6: but the tariffs are a bit of an unknown because 565 00:28:46,080 --> 00:28:49,480 Speaker 6: it also raises questions about, well, what happens if there's 566 00:28:49,560 --> 00:28:53,640 Speaker 6: retaliation by US trading partners, what happens if other companies 567 00:28:53,680 --> 00:28:57,080 Speaker 6: start to move in different directions. And remember Video makes 568 00:28:57,480 --> 00:29:00,640 Speaker 6: its chips in Taiwan. T SMC is you know, essentially 569 00:29:00,680 --> 00:29:04,440 Speaker 6: its foundry. So you know, tariff sun chips coming in 570 00:29:04,720 --> 00:29:08,720 Speaker 6: from Taiwan would hit potentially in Video and and that 571 00:29:08,760 --> 00:29:11,360 Speaker 6: would be a challenge. And if you're a hyperscaler here 572 00:29:11,520 --> 00:29:15,240 Speaker 6: in the US with data centers that you're building, think Microsoft, 573 00:29:15,280 --> 00:29:19,080 Speaker 6: think Amazon, on the cost of those chips would start 574 00:29:19,080 --> 00:29:19,520 Speaker 6: to go up. 575 00:29:19,640 --> 00:29:22,720 Speaker 3: Taiwan came up in that Cabinet meeting yesterday, and of 576 00:29:22,760 --> 00:29:26,880 Speaker 3: course you're instantly thinking about Taiwan, Semiconductor, Video, all of 577 00:29:26,880 --> 00:29:30,600 Speaker 3: these designers who rely on the foundries in Taiwan, and 578 00:29:30,640 --> 00:29:33,560 Speaker 3: he would not take a stand against China taking over. 579 00:29:33,880 --> 00:29:34,920 Speaker 6: He really shut it down. 580 00:29:35,000 --> 00:29:37,680 Speaker 3: Joe, How what if your gentsen won? How do you 581 00:29:37,680 --> 00:29:39,000 Speaker 3: make plans around something like that? 582 00:29:39,840 --> 00:29:42,960 Speaker 6: It is difficult to do so. And you know they 583 00:29:43,040 --> 00:29:47,080 Speaker 6: have been with the construction of plants and facilities here 584 00:29:47,160 --> 00:29:51,000 Speaker 6: by TSMC here in the US. That does provide a 585 00:29:51,040 --> 00:29:53,440 Speaker 6: little bit of a hedge. And in fact that TSMC 586 00:29:53,680 --> 00:29:57,160 Speaker 6: facilities producing chips at an early you know, early test, 587 00:29:57,520 --> 00:29:59,920 Speaker 6: at an even greater yield than what they are getting 588 00:30:00,080 --> 00:30:03,040 Speaker 6: back we know where that's promising. They're starting to ramp 589 00:30:03,160 --> 00:30:04,080 Speaker 6: up right now. 590 00:30:04,880 --> 00:30:06,880 Speaker 3: And that is and that is actually the sort of 591 00:30:06,920 --> 00:30:09,280 Speaker 3: legacy of the Biden administration, isn't it. That's that's what 592 00:30:09,320 --> 00:30:11,480 Speaker 3: we never saw happen while he was sitting in the overlope. 593 00:30:11,600 --> 00:30:13,400 Speaker 6: It is, that's right. But at the same time, we 594 00:30:13,440 --> 00:30:16,280 Speaker 6: are seeing that some of these other plans, including the 595 00:30:16,320 --> 00:30:19,600 Speaker 6: ones that Intel has in the pipeline, are struggling. That's 596 00:30:20,280 --> 00:30:24,440 Speaker 6: the facility in Ohio. They're looking for customers. 597 00:30:23,920 --> 00:30:26,040 Speaker 2: They're looking for the command the wrong company. 598 00:30:26,720 --> 00:30:30,240 Speaker 6: There are some questions about that, and and I think 599 00:30:30,280 --> 00:30:34,240 Speaker 6: that if we talk to Biden administration officials now after 600 00:30:34,360 --> 00:30:36,600 Speaker 6: leaving office, they may have a different view, But they 601 00:30:36,640 --> 00:30:39,480 Speaker 6: really did see Intel as a national champion. I mean 602 00:30:39,600 --> 00:30:42,760 Speaker 6: Intel inside Joe, it's it's something we have. 603 00:30:43,360 --> 00:30:44,960 Speaker 2: I can hear thele in my head right now. 604 00:30:45,000 --> 00:30:46,480 Speaker 3: Well, exactly left on the side. 605 00:30:46,280 --> 00:30:46,680 Speaker 2: Of the road. 606 00:30:47,400 --> 00:30:52,520 Speaker 6: Well, in a way they they have, they've struggled in 607 00:30:52,640 --> 00:30:54,320 Speaker 6: some of the same ways that other parts of the 608 00:30:54,400 --> 00:30:58,760 Speaker 6: US economy have struggled to you know, the the economy 609 00:30:58,800 --> 00:31:02,360 Speaker 6: did evolve away from them, and a lot of manufacturing 610 00:31:02,560 --> 00:31:05,440 Speaker 6: was moved overseas for a lot of different reasons too. 611 00:31:06,160 --> 00:31:09,960 Speaker 6: The company transformed. It's trying to transform itself yet again 612 00:31:10,040 --> 00:31:12,920 Speaker 6: at something that they hope would last. But it's been 613 00:31:13,000 --> 00:31:13,800 Speaker 6: a struggle too. 614 00:31:13,920 --> 00:31:15,920 Speaker 3: CHP, thank you as always, Michael Sheppard with us live 615 00:31:15,960 --> 00:31:23,760 Speaker 3: in Washington. Thanks for listening to the Balance of Power podcast. 616 00:31:24,400 --> 00:31:27,520 Speaker 3: Make sure to subscribe if you haven't already, at Apple, Spotify, 617 00:31:27,600 --> 00:31:30,160 Speaker 3: or wherever you get your podcasts, and you can find 618 00:31:30,240 --> 00:31:33,479 Speaker 3: us live every weekday from Washington, DC at noontime Eastern 619 00:31:33,800 --> 00:31:35,200 Speaker 3: at Bloomberg dot com.