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 Coarclay, 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 --> 00:00:23,760 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,360 --> 00:00:28,240 Speaker 2: The President today with trade on the agenda, sitting down 7 00:00:28,600 --> 00:00:32,320 Speaker 2: with the President of the Philippines, Ferdinand Marcos Junior inside 8 00:00:32,360 --> 00:00:35,000 Speaker 2: the White House right now, knowing of course that Donald 9 00:00:35,040 --> 00:00:38,040 Speaker 2: Trump has threatened a twenty percent tariff against our ally 10 00:00:38,520 --> 00:00:41,480 Speaker 2: in the South Pacific. The President speaking a short time 11 00:00:41,520 --> 00:00:45,280 Speaker 2: ago with reporters alongside President Marcos in the Oval Office. 12 00:00:45,320 --> 00:00:46,840 Speaker 3: Listen, well, it's tough. 13 00:00:46,880 --> 00:00:49,760 Speaker 4: He's a very tough togretiated so far, we're not there 14 00:00:49,760 --> 00:00:53,400 Speaker 4: because he's he's negotiating too tough. In fact, I used 15 00:00:53,440 --> 00:00:55,480 Speaker 4: to like him better than I do now he's too tough. 16 00:00:56,160 --> 00:00:58,960 Speaker 4: But we'll probably agree to something. But he is a 17 00:00:59,080 --> 00:01:01,720 Speaker 4: strong he loves your country. 18 00:01:03,320 --> 00:01:05,760 Speaker 2: We'll see if a trade deal emerges. Here there meeting 19 00:01:05,840 --> 00:01:09,200 Speaker 2: right now, in fact, over lunch following the bilateral meeting, 20 00:01:09,240 --> 00:01:12,000 Speaker 2: in the presence of the White House Press Corps, Bloomberg's 21 00:01:12,000 --> 00:01:14,839 Speaker 2: Tyler Kendall is with me right now in Washington, having 22 00:01:14,880 --> 00:01:17,400 Speaker 2: watched what turned out to be Tyler a roughly half 23 00:01:17,440 --> 00:01:20,480 Speaker 2: hour news conference of briefing, if you will, a bit 24 00:01:20,520 --> 00:01:23,160 Speaker 2: of a weave with President Trump here through a series 25 00:01:23,200 --> 00:01:24,240 Speaker 2: of issues from trade. 26 00:01:24,240 --> 00:01:25,039 Speaker 5: We didn't spend too. 27 00:01:25,040 --> 00:01:27,960 Speaker 2: Much time on that to j Powell, to in fact, 28 00:01:28,000 --> 00:01:31,800 Speaker 2: the Russia investigation dating back to the twenty sixteen election. 29 00:01:31,959 --> 00:01:34,240 Speaker 5: The real news today though, has to do with tariffs. 30 00:01:34,280 --> 00:01:36,880 Speaker 5: What could come of this right exactly, Joe. 31 00:01:36,920 --> 00:01:39,080 Speaker 6: I mean, we have to put into context here that 32 00:01:39,160 --> 00:01:42,520 Speaker 6: we did see the Philippines receive one of those long 33 00:01:42,560 --> 00:01:45,120 Speaker 6: awaited trade letters and they actually saw their tear freight 34 00:01:45,360 --> 00:01:47,199 Speaker 6: go up. You said it there. They're facing a twenty 35 00:01:47,280 --> 00:01:50,320 Speaker 6: percent levee on so called Liberation Day, they were facing 36 00:01:50,400 --> 00:01:53,480 Speaker 6: a seventeen percent levey, so it didn't appear that negotiations 37 00:01:53,520 --> 00:01:56,880 Speaker 6: were really going in their favor. And of course this 38 00:01:57,120 --> 00:01:59,640 Speaker 6: is actually one of the first visits, the first visit 39 00:01:59,640 --> 00:02:02,480 Speaker 6: of ahead of state from the Association of Southeast Asian 40 00:02:02,680 --> 00:02:06,280 Speaker 6: Nations OSSION, and that's important because these were really countries 41 00:02:06,320 --> 00:02:08,840 Speaker 6: that were prioritized in these trade talks, but that we 42 00:02:08,960 --> 00:02:12,520 Speaker 6: really haven't seen much movement when it comes to any 43 00:02:12,560 --> 00:02:16,480 Speaker 6: sort of framework deal being announced. Now, the Philippines does 44 00:02:16,560 --> 00:02:20,200 Speaker 6: run about a five billion dollar trade surplus. 45 00:02:19,680 --> 00:02:20,119 Speaker 4: With the US. 46 00:02:20,160 --> 00:02:21,880 Speaker 6: The US is on the deficit end, So this is 47 00:02:21,880 --> 00:02:24,720 Speaker 6: something that the administration is definitely looking to try to 48 00:02:24,840 --> 00:02:27,880 Speaker 6: advance and move forward. But why these nations were really 49 00:02:27,919 --> 00:02:30,840 Speaker 6: prioritized has to do with China, which of course also 50 00:02:30,919 --> 00:02:34,160 Speaker 6: came in to the conversation. Today. We heard President Trump 51 00:02:34,160 --> 00:02:36,240 Speaker 6: saying that perhaps he will visit China in the not 52 00:02:36,680 --> 00:02:40,000 Speaker 6: so distant future, and he also confirmed that they have 53 00:02:40,120 --> 00:02:44,000 Speaker 6: started to see or rather he suggested that those export 54 00:02:44,080 --> 00:02:48,000 Speaker 6: licenses related to rare earth minerals and magnets have started 55 00:02:48,000 --> 00:02:49,880 Speaker 6: to speed up. And we know that that's something that 56 00:02:49,919 --> 00:02:52,360 Speaker 6: we watch really closely because that's really been at the 57 00:02:52,400 --> 00:02:54,960 Speaker 6: crux of the negotiations with Beijing. 58 00:02:55,080 --> 00:02:57,320 Speaker 2: Interesting language, very trumpy, and we're going to have a 59 00:02:57,400 --> 00:03:00,320 Speaker 2: very good relationship. You said the country the friend of 60 00:03:00,320 --> 00:03:03,519 Speaker 2: the Philippines was maybe tilting towards China. He said, we 61 00:03:03,600 --> 00:03:06,680 Speaker 2: are untilting it. And you wonder what kind of details 62 00:03:06,720 --> 00:03:09,160 Speaker 2: we might get following this meeting today. But he talked 63 00:03:09,160 --> 00:03:12,480 Speaker 2: about a lot more than trade. He got into the 64 00:03:13,200 --> 00:03:15,240 Speaker 2: matter involving Jay Powell, and I should be clear he 65 00:03:15,280 --> 00:03:17,480 Speaker 2: was asked about this by a reporter. This was the 66 00:03:17,480 --> 00:03:19,080 Speaker 2: first thing that came up when this went to Q 67 00:03:19,200 --> 00:03:22,000 Speaker 2: and A following their opening remarks. Having heard the President 68 00:03:22,040 --> 00:03:24,480 Speaker 2: of course threatened to fire Jay Powell, listened to what 69 00:03:24,520 --> 00:03:25,120 Speaker 2: he said today. 70 00:03:26,040 --> 00:03:28,760 Speaker 7: I think he's done a bad job. But he's going 71 00:03:28,800 --> 00:03:31,200 Speaker 7: to be out pretty soon anyway, and eight months he'll 72 00:03:31,200 --> 00:03:35,360 Speaker 7: be out. But I call him too late. He's too 73 00:03:35,440 --> 00:03:37,240 Speaker 7: late all the time. He should have loaded interest rates 74 00:03:37,280 --> 00:03:40,440 Speaker 7: many times. Europe loaded their rate ten times, we load 75 00:03:40,480 --> 00:03:43,640 Speaker 7: ours none, and it's causing a problem for people that 76 00:03:43,720 --> 00:03:46,520 Speaker 7: want to buy a home. Look, our economy is so 77 00:03:46,520 --> 00:03:48,040 Speaker 7: strong now, we're blowing through everything. 78 00:03:48,120 --> 00:03:50,760 Speaker 4: We're setting records, you know that. You see that, and 79 00:03:51,760 --> 00:03:54,280 Speaker 4: whether it's the Philippines or anyone else, we're setting records 80 00:03:54,280 --> 00:03:56,600 Speaker 4: at levels that nobody's ever seen before. But you know what, 81 00:03:57,440 --> 00:04:00,320 Speaker 4: people aren't able to buy a house because this guy 82 00:04:00,440 --> 00:04:03,280 Speaker 4: is a numb skull. He keeps the rich too high 83 00:04:04,080 --> 00:04:06,680 Speaker 4: and probably doing it for political races. 84 00:04:08,040 --> 00:04:10,240 Speaker 2: Interesting though, it sounds like he's going to let Jay 85 00:04:10,280 --> 00:04:12,600 Speaker 2: Powell run out the clock. And it follows the comments 86 00:04:12,640 --> 00:04:15,520 Speaker 2: we heard from the Treasury Secretary earlier kind of tamping 87 00:04:15,600 --> 00:04:18,000 Speaker 2: down this idea that Jay Powell should resign. 88 00:04:18,320 --> 00:04:20,800 Speaker 6: Right, the question seems to be here in Washington is 89 00:04:20,839 --> 00:04:22,800 Speaker 6: are they trying to build up the momentum to fire 90 00:04:23,080 --> 00:04:27,240 Speaker 6: j Powell or to force perhaps a resignation. And you're 91 00:04:27,320 --> 00:04:29,680 Speaker 6: exactly right. You did say that he's going to let 92 00:04:29,760 --> 00:04:31,919 Speaker 6: him perhaps run out the term, alluding to May of 93 00:04:31,920 --> 00:04:34,960 Speaker 6: twenty twenty six, when Jay Powell would be up as 94 00:04:35,000 --> 00:04:37,479 Speaker 6: FED chair. But he also touched on the recent renovations 95 00:04:37,480 --> 00:04:40,279 Speaker 6: of the Federal Reserve, saying that he wants this to 96 00:04:40,320 --> 00:04:42,560 Speaker 6: be looked into. We had Bill Poulty on the program 97 00:04:42,680 --> 00:04:44,680 Speaker 6: last week. You said he's confident that there's going to 98 00:04:44,680 --> 00:04:48,040 Speaker 6: be a congressional investigation into this. We had Lisa McClain 99 00:04:48,120 --> 00:04:50,640 Speaker 6: yesterday telling you me on Balance of Power that she 100 00:04:51,000 --> 00:04:52,800 Speaker 6: doesn't want to get ahead of anything, but she didn't 101 00:04:52,839 --> 00:04:55,800 Speaker 6: rule it out to that lawmakers would ultimately look into 102 00:04:55,920 --> 00:04:58,640 Speaker 6: what has been cost overruns at the Federal Reserve. Though 103 00:04:58,680 --> 00:05:01,120 Speaker 6: the Fed, of course says that everything is an order. 104 00:05:01,400 --> 00:05:05,640 Speaker 6: They've only been truthful in their testimony about these renovations. 105 00:05:05,640 --> 00:05:07,880 Speaker 6: But it is interesting because they seem to be walking 106 00:05:07,920 --> 00:05:10,279 Speaker 6: the line here at the administration. You have Scott Bessen, 107 00:05:10,360 --> 00:05:13,560 Speaker 6: of course, as you alluded to, saying that at the moment, 108 00:05:14,040 --> 00:05:17,600 Speaker 6: he doesn't see there is a need for power to 109 00:05:18,120 --> 00:05:19,919 Speaker 6: be gone, though he would like to see these lower 110 00:05:19,960 --> 00:05:21,800 Speaker 6: interest rates. But they're starting to talk about this idea 111 00:05:21,800 --> 00:05:24,320 Speaker 6: of mission creep, and that really seems to be where 112 00:05:24,360 --> 00:05:26,719 Speaker 6: the administration is focusing their rhetoric at the moment. 113 00:05:27,040 --> 00:05:29,920 Speaker 2: Interesting, Tyler, just quickly before you leave us, we're going 114 00:05:29,960 --> 00:05:32,760 Speaker 2: to have AI on the menu for tomorrow. This is 115 00:05:33,600 --> 00:05:35,520 Speaker 2: the big plan that we've been waiting for, the blueprint, 116 00:05:35,720 --> 00:05:38,479 Speaker 2: if you will, from the administration that has little to 117 00:05:38,520 --> 00:05:40,960 Speaker 2: do with restrictions and a lot to do with energy. 118 00:05:41,000 --> 00:05:42,680 Speaker 6: What are we going to learn right exactly? And this 119 00:05:42,720 --> 00:05:44,839 Speaker 6: is something that we've been expecting from the administration. I 120 00:05:45,000 --> 00:05:48,480 Speaker 6: was at the AI Innovation Summit last week in Pittsburgh 121 00:05:48,480 --> 00:05:51,440 Speaker 6: where President Trump really tried to tout that the US 122 00:05:51,560 --> 00:05:54,000 Speaker 6: is trying to keep this edge when it comes to China. 123 00:05:54,040 --> 00:05:56,680 Speaker 6: Now we are expecting him to announce perhaps these policy 124 00:05:56,760 --> 00:05:59,640 Speaker 6: guidelines around artificial intelligence that would really have to do 125 00:05:59,680 --> 00:06:03,719 Speaker 6: with easing regulation but also expanding the energy resources. And 126 00:06:03,720 --> 00:06:05,760 Speaker 6: that was a big theme that we heard last week 127 00:06:05,760 --> 00:06:08,960 Speaker 6: as we had the CEOs from Exxon and Chevron sort 128 00:06:08,960 --> 00:06:12,200 Speaker 6: of descend on this policy summit to make the case 129 00:06:12,200 --> 00:06:14,479 Speaker 6: that there does need to be more energy production in 130 00:06:14,520 --> 00:06:16,760 Speaker 6: the United States. I can tell you from the experts 131 00:06:16,760 --> 00:06:19,640 Speaker 6: that I have spoken to, including the US Energy Secretary, 132 00:06:19,839 --> 00:06:22,400 Speaker 6: that they're really going to need a holistic approach because 133 00:06:22,400 --> 00:06:24,480 Speaker 6: there is just so much demand. And that does open 134 00:06:24,600 --> 00:06:27,159 Speaker 6: up the door for other sources of energy, whether that 135 00:06:27,240 --> 00:06:30,240 Speaker 6: be alternative energies or nuclear for example. That's one that 136 00:06:30,240 --> 00:06:32,279 Speaker 6: we keep hearing about when it comes to productions. 137 00:06:32,360 --> 00:06:34,760 Speaker 2: A lot of that's following your conversation last week with 138 00:06:34,920 --> 00:06:37,240 Speaker 2: the CEO at Corewave. It makes you realize how many 139 00:06:37,279 --> 00:06:39,599 Speaker 2: of these deals are emerging. Tyler, thank you so much. 140 00:06:39,960 --> 00:06:42,479 Speaker 2: Reporting for Bloomberg at the White House. Tyler Kendall with 141 00:06:42,560 --> 00:06:46,200 Speaker 2: us in person today in Washington, DC. This is the 142 00:06:46,240 --> 00:06:48,680 Speaker 2: story that we wanted to get to with and new 143 00:06:48,680 --> 00:06:50,480 Speaker 2: Burger because it's going to be something that we talk 144 00:06:50,520 --> 00:06:52,120 Speaker 2: about a lot tomorrow. It's actually getting a lot of 145 00:06:52,120 --> 00:06:55,400 Speaker 2: talk today. Sam Altman open Ai is in town speaking 146 00:06:55,440 --> 00:06:57,880 Speaker 2: at a Federal Reserve event. In fact, you can see 147 00:06:57,880 --> 00:07:00,279 Speaker 2: that live on Bloomberg TV and on YouTube. In the 148 00:07:00,320 --> 00:07:03,400 Speaker 2: process of speaking right now about what could be and 149 00:07:03,400 --> 00:07:05,960 Speaker 2: I think we can all agree the most important technological 150 00:07:06,480 --> 00:07:11,640 Speaker 2: trend before US and Newburger was tasked with gauging the 151 00:07:11,760 --> 00:07:15,720 Speaker 2: risks and potential benefits of artificial intelligence when she worked 152 00:07:15,760 --> 00:07:20,280 Speaker 2: in the Biden administration as the Deputy National Security Advisor 153 00:07:20,320 --> 00:07:23,440 Speaker 2: for Cyber and Emerging Technology and is now pain Distinguished 154 00:07:23,480 --> 00:07:26,800 Speaker 2: Lecturer at Stanford University and with US Live on Bloomberg 155 00:07:26,840 --> 00:07:29,680 Speaker 2: TV and Radio and Newburger welcome back. You've heard the 156 00:07:29,680 --> 00:07:31,640 Speaker 2: way this is being framed. I know we'll get the 157 00:07:31,680 --> 00:07:36,680 Speaker 2: official document tomorrow, but the idea of not bringing guardrails, 158 00:07:36,720 --> 00:07:40,520 Speaker 2: adding guardrails to AI, but tearing them off seems to 159 00:07:40,560 --> 00:07:42,680 Speaker 2: be the approach the White House has taken, going so 160 00:07:42,840 --> 00:07:46,640 Speaker 2: far reportedly to actually penalize states when it comes to 161 00:07:46,680 --> 00:07:48,960 Speaker 2: funding if they add their own restrictions. 162 00:07:49,440 --> 00:07:51,520 Speaker 5: Is this the direction we should be taking or one 163 00:07:51,520 --> 00:07:52,400 Speaker 5: that scares. 164 00:07:52,080 --> 00:07:54,760 Speaker 2: You, frankly about the future of artificial intelligence? 165 00:07:56,120 --> 00:07:58,240 Speaker 8: Thanks Joe, it's good to be here with you. The 166 00:07:58,280 --> 00:08:01,320 Speaker 8: discussion has always been about respond innovation, and I think 167 00:08:01,360 --> 00:08:04,640 Speaker 8: what we'll expect tomorrow is some efforts to reduce regulation. 168 00:08:05,280 --> 00:08:10,000 Speaker 8: Largely is noted around electricity accelerating permitting since the United 169 00:08:10,000 --> 00:08:13,320 Speaker 8: States does need a great deal more of new plants 170 00:08:13,360 --> 00:08:16,280 Speaker 8: in order to power large models that are core to 171 00:08:16,360 --> 00:08:20,040 Speaker 8: artificial intelligence, as well as efforts to accelerate private sector 172 00:08:20,200 --> 00:08:24,720 Speaker 8: innovation and potentially use tools like government financing tools to 173 00:08:24,760 --> 00:08:28,480 Speaker 8: help the US compete with China in deploying AI, particularly 174 00:08:28,480 --> 00:08:29,520 Speaker 8: in developing countries. 175 00:08:31,280 --> 00:08:33,120 Speaker 2: Well, it doesn't sound like you're worried at all, then 176 00:08:33,200 --> 00:08:38,080 Speaker 2: is this the approach we need to hasten America's place 177 00:08:38,320 --> 00:08:40,880 Speaker 2: in this development because AI is either going to go, 178 00:08:41,320 --> 00:08:43,760 Speaker 2: they say, to America or China. And there's been a 179 00:08:43,840 --> 00:08:47,520 Speaker 2: very careful approach, certainly was in the prior administration for 180 00:08:47,600 --> 00:08:51,600 Speaker 2: fear of the impact that AI could have on competing technologies, 181 00:08:51,600 --> 00:08:54,360 Speaker 2: on the job market, on the overall economy. 182 00:08:55,040 --> 00:08:57,120 Speaker 8: So my own view is that the risk and the 183 00:08:57,160 --> 00:09:01,120 Speaker 8: opportunity in AI is actually in deployment, where we take 184 00:09:01,200 --> 00:09:04,760 Speaker 8: the power of large language models and apply them in manufacturing, 185 00:09:04,880 --> 00:09:09,559 Speaker 8: in robotics, in education. That brings a great deal of opportunity. 186 00:09:09,840 --> 00:09:12,920 Speaker 8: Accelerating innovation to also bring some level of risk, for example, 187 00:09:13,080 --> 00:09:16,959 Speaker 8: in cyber the opportunity to use models to find vulnerabilities, 188 00:09:17,040 --> 00:09:20,000 Speaker 8: either to exploit them or on the positive side, to 189 00:09:20,000 --> 00:09:22,240 Speaker 8: find them in order to fix them. So I think 190 00:09:22,280 --> 00:09:26,600 Speaker 8: the key will be as the Trump administration takes steps 191 00:09:26,640 --> 00:09:30,880 Speaker 8: to promote innovation, that we also ensure that the organizations 192 00:09:30,880 --> 00:09:34,160 Speaker 8: that are deploying AI are thinking carefully about what are 193 00:09:34,200 --> 00:09:38,160 Speaker 8: the related risks, whether that's to actual operations, whether that's 194 00:09:38,200 --> 00:09:40,760 Speaker 8: to decisions that are given to AI models, and ensure 195 00:09:40,840 --> 00:09:44,600 Speaker 8: that they understand how models are used, they're explainable, they 196 00:09:44,720 --> 00:09:47,040 Speaker 8: keep humans in the loop on key decisions, and they're 197 00:09:47,040 --> 00:09:51,280 Speaker 8: really continuously reassessing the risks of those deployments. But there's 198 00:09:51,320 --> 00:09:53,640 Speaker 8: a lot of promise in AI, and I think it's 199 00:09:53,679 --> 00:09:56,960 Speaker 8: exciting to see these steps that will do things like 200 00:09:57,360 --> 00:10:00,959 Speaker 8: enable the United States to compete in building power plans 201 00:10:01,000 --> 00:10:06,439 Speaker 8: and accelerating permitting or potentially helping companies around the world 202 00:10:06,440 --> 00:10:09,800 Speaker 8: with government financing to ensure that as deployments of AI 203 00:10:09,880 --> 00:10:12,360 Speaker 8: happen in countries around the world, it's happening on US 204 00:10:12,480 --> 00:10:16,439 Speaker 8: artificial and telerodence rails, using our models and our infrastructure 205 00:10:16,720 --> 00:10:18,360 Speaker 8: to promote this next stage of innovation. 206 00:10:19,480 --> 00:10:21,400 Speaker 2: Well, you sound a lot like Jensen Wong and a 207 00:10:21,400 --> 00:10:24,640 Speaker 2: little bit like the White House in this case, and 208 00:10:24,720 --> 00:10:28,040 Speaker 2: the idea to promote open source. This is what we're 209 00:10:28,080 --> 00:10:31,439 Speaker 2: going to hear tomorrow. And open weight AI development and 210 00:10:31,520 --> 00:10:37,400 Speaker 2: quote export American AI technologies through full stack deployment packages 211 00:10:37,520 --> 00:10:40,320 Speaker 2: almost like what you just said, What are the national 212 00:10:40,360 --> 00:10:43,480 Speaker 2: security implications of this? Knowing that the White House just 213 00:10:43,559 --> 00:10:47,559 Speaker 2: recently loosened export controls on in Nvidia's Age twenty and 214 00:10:47,640 --> 00:10:51,360 Speaker 2: a different chip competing chip from AMD in China, if 215 00:10:51,400 --> 00:10:54,800 Speaker 2: we're talking about full stack deployment packages around the world, 216 00:10:55,160 --> 00:10:56,920 Speaker 2: what does that mean for countries like China. 217 00:10:58,400 --> 00:11:02,920 Speaker 8: The national security risks really are that AI powers military 218 00:11:02,960 --> 00:11:06,480 Speaker 8: and intelligence applications, and in the competition between the US 219 00:11:06,480 --> 00:11:09,360 Speaker 8: and China on the global stage, we want to ensure 220 00:11:09,400 --> 00:11:12,240 Speaker 8: that US technologies are not being used by China to 221 00:11:12,320 --> 00:11:16,920 Speaker 8: promote its intelligence and military advancements. And that's the key 222 00:11:17,280 --> 00:11:20,160 Speaker 8: that was the thinking behind export controls, to ensure that 223 00:11:20,200 --> 00:11:22,760 Speaker 8: the highest end chips that are produced by the United 224 00:11:22,800 --> 00:11:27,560 Speaker 8: States are not made available to China. And that is 225 00:11:27,600 --> 00:11:30,040 Speaker 8: the core concern that we have in the area of 226 00:11:30,120 --> 00:11:32,719 Speaker 8: national security. There are secondary concerns in the area of 227 00:11:32,960 --> 00:11:35,960 Speaker 8: how does AI models in the hands not only of China, 228 00:11:36,280 --> 00:11:40,440 Speaker 8: but of adversaries around the world. Transnational terrorist criminals accelerate 229 00:11:40,520 --> 00:11:44,520 Speaker 8: cyber attacks, potentially accelerate advancements in bioweapons. Those are a 230 00:11:44,520 --> 00:11:47,200 Speaker 8: broader set of concerns, and that's why it's so important 231 00:11:47,240 --> 00:11:52,000 Speaker 8: that the companies generating AI models ensure that there are controls. 232 00:11:52,080 --> 00:11:54,480 Speaker 8: And that's the reason why government is maintaining a careful 233 00:11:54,520 --> 00:11:58,880 Speaker 8: eye on advancements and models, on the controls that are models, 234 00:11:59,000 --> 00:12:03,360 Speaker 8: and also considering how we would defend against potential advancements 235 00:12:03,480 --> 00:12:04,320 Speaker 8: in those areas. 236 00:12:05,320 --> 00:12:08,880 Speaker 2: Do you trust this administration to guide the way on 237 00:12:08,960 --> 00:12:12,440 Speaker 2: this technology? A day after President Trump posted an AI 238 00:12:12,600 --> 00:12:16,719 Speaker 2: video of Barack Obama being arrested in the Oval Office. 239 00:12:17,280 --> 00:12:20,000 Speaker 8: There are many parties that have a key role in 240 00:12:20,120 --> 00:12:23,240 Speaker 8: ensuring that AI is used responsibly. The government has that 241 00:12:23,400 --> 00:12:26,920 Speaker 8: role governments around the world most importantly, and not most important, 242 00:12:26,960 --> 00:12:30,439 Speaker 8: I would say very importantly private sector that is generating 243 00:12:30,440 --> 00:12:35,040 Speaker 8: these models or deploying these models their partners and assessing 244 00:12:35,080 --> 00:12:38,079 Speaker 8: them carefully, and in ensuring guardrails are built in as 245 00:12:38,120 --> 00:12:41,880 Speaker 8: models are used. When we come to US leadership and chips, 246 00:12:42,080 --> 00:12:44,920 Speaker 8: that's clearly a national security goal for the United States, 247 00:12:45,120 --> 00:12:47,440 Speaker 8: but I would note that chips is one part of 248 00:12:47,520 --> 00:12:51,520 Speaker 8: global leadership. It's also who's using our models, because values 249 00:12:51,520 --> 00:12:54,120 Speaker 8: are baked into models, and we want to ensure that 250 00:12:54,240 --> 00:12:57,080 Speaker 8: those American values are built in as countries around the world, 251 00:12:57,120 --> 00:12:59,720 Speaker 8: as companies around the world begin deploying AI. 252 00:13:01,040 --> 00:13:03,040 Speaker 2: As we spend time with and Newberger, I have to 253 00:13:03,040 --> 00:13:05,200 Speaker 2: bring up what's going on at Microsoft, and this is 254 00:13:05,200 --> 00:13:09,800 Speaker 2: something the company is actively now naming two groups supported 255 00:13:09,840 --> 00:13:13,640 Speaker 2: by the Chinese government it is accusing of hacking its technology, 256 00:13:13,760 --> 00:13:20,040 Speaker 2: state sponsored hackers using flaws and its SharePoint document management software, 257 00:13:20,440 --> 00:13:22,680 Speaker 2: and a hacking campaign that has gone on for some 258 00:13:22,840 --> 00:13:25,720 Speaker 2: time now. And I wonder your thoughts on this blog 259 00:13:25,760 --> 00:13:29,880 Speaker 2: post that not only identifies China, but the specific groups within. 260 00:13:31,520 --> 00:13:36,480 Speaker 8: This is a deeply, deeply concerning vulnerability in hack. SharePoint 261 00:13:36,520 --> 00:13:39,400 Speaker 8: is a widely used application. I'll note there's two versions, 262 00:13:39,440 --> 00:13:43,240 Speaker 8: one enterprises manage themselves, one managed by Microsoft, and the 263 00:13:43,280 --> 00:13:47,600 Speaker 8: cloud is vulnerability only applies to those managed by companies themselves. 264 00:13:47,840 --> 00:13:50,960 Speaker 8: But because SharePoint is so widely used, we can expect 265 00:13:51,559 --> 00:13:54,640 Speaker 8: likely a fair number of victims and the vulnerability is 266 00:13:54,640 --> 00:13:58,040 Speaker 8: a major one. So attackers cannot only steal data, they're 267 00:13:58,080 --> 00:14:02,080 Speaker 8: stealing keys. They steal keys. Think about physical keys in 268 00:14:02,120 --> 00:14:05,000 Speaker 8: our own homes. That means they can get back in 269 00:14:05,440 --> 00:14:08,520 Speaker 8: unless keys are changed, and they can maintain access unless 270 00:14:08,600 --> 00:14:12,040 Speaker 8: organizations do a fair amount of work to not only patch, 271 00:14:12,480 --> 00:14:15,080 Speaker 8: but to ensure new keys are being used. So a 272 00:14:15,240 --> 00:14:17,719 Speaker 8: very concerning hack at this moment in time, and a 273 00:14:17,840 --> 00:14:20,320 Speaker 8: very concerning vulnerability as well. 274 00:14:20,440 --> 00:14:20,600 Speaker 9: Well. 275 00:14:20,640 --> 00:14:22,640 Speaker 2: You wonder what the government role here should be, and 276 00:14:22,640 --> 00:14:25,080 Speaker 2: by that I mean our government. In a statement that 277 00:14:25,200 --> 00:14:29,160 Speaker 2: Chinese embassy said, China firmly opposes all forms of cyber 278 00:14:29,200 --> 00:14:32,880 Speaker 2: attacks quote. At the same time, we also firmly oppose 279 00:14:32,960 --> 00:14:39,040 Speaker 2: smearing others without solid evidence unquote. Will remind everyone that 280 00:14:39,080 --> 00:14:43,040 Speaker 2: the budget put forth by the Trump administration in fact, 281 00:14:43,160 --> 00:14:46,520 Speaker 2: would cut almost five hundred million dollars nearly thirty percent 282 00:14:46,560 --> 00:14:50,600 Speaker 2: of positions at the cybersecurity and an infrastructure security agency. 283 00:14:50,960 --> 00:14:54,960 Speaker 2: Is this an administration that's equipped to deal with China. 284 00:14:54,720 --> 00:14:55,200 Speaker 5: In this way? 285 00:14:56,480 --> 00:14:58,680 Speaker 8: No, exactly as you said, Joe, there's a role for 286 00:14:58,760 --> 00:15:03,280 Speaker 8: government and its it's very concerning to seek cuts in 287 00:15:03,360 --> 00:15:06,520 Speaker 8: the government's cybersecurity mission because this is a time when 288 00:15:06,960 --> 00:15:10,280 Speaker 8: our infrastructure, our power, our pipelines, are water, all run 289 00:15:10,480 --> 00:15:14,440 Speaker 8: on digital infrastructure, and in many cases that digital infrastructure 290 00:15:14,840 --> 00:15:17,480 Speaker 8: is not secure enough to deal with threats by countries 291 00:15:17,520 --> 00:15:20,560 Speaker 8: and criminals. But as a partner to government, there's also 292 00:15:20,600 --> 00:15:22,640 Speaker 8: a role for the private sector, and I think there's 293 00:15:22,680 --> 00:15:26,120 Speaker 8: real questions to be asked about how Microsoft is using 294 00:15:26,160 --> 00:15:30,280 Speaker 8: AI to find and fix vulnerabilities in its products. You know, 295 00:15:30,360 --> 00:15:33,680 Speaker 8: you may have seen just recently Google announced Big Sleep, 296 00:15:33,760 --> 00:15:37,280 Speaker 8: a partnership between their cybersecurity and their AI arm within 297 00:15:37,320 --> 00:15:41,000 Speaker 8: Google that found and fixed a very significant exploit. And 298 00:15:41,040 --> 00:15:44,080 Speaker 8: I think we should really be expecting tech companies to 299 00:15:44,120 --> 00:15:47,760 Speaker 8: start using AI not only to generate more secure software, 300 00:15:47,800 --> 00:15:51,280 Speaker 8: but to look back at their enterprise of products find 301 00:15:51,360 --> 00:15:54,280 Speaker 8: and fix those vulnerabilities, because our digital infrastructure needs to 302 00:15:54,320 --> 00:15:56,240 Speaker 8: be a lot more secure than it is for the 303 00:15:56,280 --> 00:15:59,920 Speaker 8: reasons you just noted countries like China and criminals as well. 304 00:16:01,040 --> 00:16:02,480 Speaker 5: That's a pretty compelling use case. 305 00:16:02,480 --> 00:16:02,680 Speaker 10: Ann. 306 00:16:02,680 --> 00:16:05,280 Speaker 2: I'm really glad you could join us today and Newburger Payne, 307 00:16:05,320 --> 00:16:09,360 Speaker 2: Distinguished Lecturer, Stanford University, former Biden Administration cyber is great 308 00:16:09,400 --> 00:16:12,200 Speaker 2: to hear your insights today. We should note that Microsoft 309 00:16:12,280 --> 00:16:15,040 Speaker 2: shares are a bit lower today, but still trading just 310 00:16:15,080 --> 00:16:15,800 Speaker 2: below their all. 311 00:16:15,680 --> 00:16:18,120 Speaker 5: Time high above five hundred dollars. This is Bloomberg. 312 00:16:20,360 --> 00:16:23,840 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 313 00:16:23,920 --> 00:16:26,960 Speaker 1: us live weekdays at noon and five pm Eastern on 314 00:16:27,080 --> 00:16:30,320 Speaker 1: Apple cocklay and Android Auto with the Bloomberg Business app. 315 00:16:30,360 --> 00:16:33,360 Speaker 1: You can also listen live on Amazon Alexa from our 316 00:16:33,400 --> 00:16:38,600 Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty. 317 00:16:39,280 --> 00:16:41,760 Speaker 2: What is there to talk about President Trump? In the 318 00:16:41,760 --> 00:16:44,240 Speaker 2: West Wing today with the President of the Philippines, we 319 00:16:44,280 --> 00:16:46,400 Speaker 2: are standing by for news if we get it on 320 00:16:46,480 --> 00:16:49,280 Speaker 2: trade with a thret and twenty percent tariff against the Philippines. 321 00:16:49,320 --> 00:16:53,240 Speaker 2: They are talking about that now on Capitol Hill. It's 322 00:16:53,240 --> 00:16:55,720 Speaker 2: a whole different ballgame. And by the way, we brought 323 00:16:55,720 --> 00:16:58,360 Speaker 2: you a news conference a bit earlier with President Trump 324 00:16:58,400 --> 00:17:01,080 Speaker 2: in the Oval, he was asked about Jeffrey Epstein. He 325 00:17:01,120 --> 00:17:03,320 Speaker 2: talked about a lot of different things, from j Powell 326 00:17:03,920 --> 00:17:08,680 Speaker 2: to Barack Obama, who he claims was a trader for 327 00:17:09,040 --> 00:17:12,359 Speaker 2: the Russia hoax, in his words, trying to change the 328 00:17:12,440 --> 00:17:15,000 Speaker 2: topic here on the daily question about Jeffrey Epstein. I 329 00:17:15,000 --> 00:17:18,240 Speaker 2: don't come here to talk about the Epstein files every day, 330 00:17:18,240 --> 00:17:21,040 Speaker 2: but it's been impossible to hide from it. Case in point, 331 00:17:21,080 --> 00:17:24,720 Speaker 2: what's happening in the House of Representatives. All work has 332 00:17:24,760 --> 00:17:26,600 Speaker 2: basically stopped on legislation. 333 00:17:26,680 --> 00:17:27,080 Speaker 5: This week. 334 00:17:27,119 --> 00:17:30,080 Speaker 2: There were going to be some votes on immigration and 335 00:17:30,200 --> 00:17:33,080 Speaker 2: environmental related bills. They are not going to happen. After 336 00:17:33,119 --> 00:17:36,000 Speaker 2: Democrats tried to force a vote on the release of 337 00:17:36,000 --> 00:17:38,399 Speaker 2: the Epstein files and the Rules Committee last night, the 338 00:17:38,400 --> 00:17:40,520 Speaker 2: whole thing broke down. We're in a world now where 339 00:17:40,640 --> 00:17:44,360 Speaker 2: we could see lawmakers going home as early as tomorrow 340 00:17:44,720 --> 00:17:48,240 Speaker 2: in the House following what took place in Rules. But 341 00:17:48,320 --> 00:17:52,520 Speaker 2: let's be honest, long before we started talking Jeffrey Epstein, 342 00:17:52,640 --> 00:17:55,560 Speaker 2: in the last couple of days here in Washington, d C. 343 00:17:55,680 --> 00:17:58,960 Speaker 2: The last couple of weeks, there was a crisis of 344 00:17:59,080 --> 00:18:03,600 Speaker 2: trust on Capitol Hill following what Republicans put together in 345 00:18:03,640 --> 00:18:07,280 Speaker 2: the President's Big Beautiful Bill, then a recisions package that 346 00:18:07,359 --> 00:18:11,479 Speaker 2: clawed back congressionally approved funding, something that we talked about 347 00:18:11,760 --> 00:18:15,840 Speaker 2: with Congresswoman Becka Balen, the Democrat from Vermont, joined us 348 00:18:15,840 --> 00:18:18,439 Speaker 2: on the late edition of Balance of Power last evening. 349 00:18:18,720 --> 00:18:21,000 Speaker 2: When we talk about the idea of a potential government 350 00:18:21,080 --> 00:18:25,920 Speaker 2: shut down, remember what the congresswoman said, Let's listen. 351 00:18:27,160 --> 00:18:31,399 Speaker 11: Why should we negotiate in good faith? Why should we 352 00:18:31,480 --> 00:18:35,280 Speaker 11: come together and do that hard work of coming to 353 00:18:35,320 --> 00:18:38,320 Speaker 11: an agreement if in the end the agreement will not 354 00:18:38,400 --> 00:18:41,080 Speaker 11: be honored. And that's what I've seen for my entire 355 00:18:41,160 --> 00:18:43,639 Speaker 11: term in Congress. Now this is my third year in Congress. 356 00:18:44,000 --> 00:18:46,960 Speaker 11: Every single time we have an agreement, a top line agreement, 357 00:18:47,520 --> 00:18:50,560 Speaker 11: it is only as good as you know the words 358 00:18:50,560 --> 00:18:52,639 Speaker 11: on the paper, because they do not honor it. So 359 00:18:52,880 --> 00:18:55,680 Speaker 11: of course we have to look at playing hardball, because 360 00:18:55,720 --> 00:18:58,480 Speaker 11: they break the rules and then they expect us as 361 00:18:58,520 --> 00:19:00,960 Speaker 11: Democrats to continue to lay by those rules. 362 00:19:02,280 --> 00:19:05,240 Speaker 2: Of course we have to look at playing hardball, she said, 363 00:19:05,359 --> 00:19:08,720 Speaker 2: I had just asked the congresswoman if she was prepared 364 00:19:08,720 --> 00:19:11,879 Speaker 2: to vote to shut down the government when the funding 365 00:19:11,920 --> 00:19:15,080 Speaker 2: deadline hits on September thirtieth. Let's assemble there our panel 366 00:19:15,119 --> 00:19:18,399 Speaker 2: for their take on this. Bloomberg Politics contributors Jeanie Schanzano 367 00:19:18,680 --> 00:19:21,399 Speaker 2: and Rick Davis are with US Genius, Senior Democracy Fellow 368 00:19:21,400 --> 00:19:23,680 Speaker 2: with the Center for the Study of the Presidency in Congress. 369 00:19:24,000 --> 00:19:28,520 Speaker 2: Rick our Republican strategist and partner at Stone Court Capital. Jeanie, 370 00:19:28,600 --> 00:19:30,920 Speaker 2: is she channeling you when you listen to congress Woman 371 00:19:31,000 --> 00:19:34,879 Speaker 2: balance in that case? And will Democrats vote to shut 372 00:19:34,880 --> 00:19:35,560 Speaker 2: down the government? 373 00:19:36,960 --> 00:19:38,760 Speaker 12: We are hearing, and by the way, it was a 374 00:19:38,760 --> 00:19:41,320 Speaker 12: great conversation with her and you head back to back 375 00:19:41,400 --> 00:19:44,399 Speaker 12: representatives last night, so we heard both sides, which was 376 00:19:44,400 --> 00:19:48,120 Speaker 12: so wonderful, and I think she is what we are 377 00:19:48,200 --> 00:19:52,440 Speaker 12: hearing from Democrats. More broadly, we heard the same thing 378 00:19:52,600 --> 00:19:56,600 Speaker 12: from Brendan Boyle, the top Democrat on the Budget Committee, 379 00:19:56,800 --> 00:20:00,119 Speaker 12: who said, how can we be expected to go, oh 380 00:20:00,960 --> 00:20:04,920 Speaker 12: when we negotiate and then two weeks later they claw 381 00:20:05,000 --> 00:20:07,640 Speaker 12: back the funding. And I think that is a story 382 00:20:07,720 --> 00:20:11,320 Speaker 12: everybody can understand. If Republicans don't want to work in 383 00:20:11,359 --> 00:20:15,480 Speaker 12: a bipartisan fashion, and we heard from Russ's vote they 384 00:20:15,520 --> 00:20:18,320 Speaker 12: do not, then they will have to pass the budget 385 00:20:18,359 --> 00:20:21,879 Speaker 12: as best they can by themselves. And that's something I 386 00:20:21,920 --> 00:20:24,960 Speaker 12: think we're going to hear from a unified Democratic caucus 387 00:20:25,000 --> 00:20:28,520 Speaker 12: as we go forward, unless, of course, Republicans decide to 388 00:20:28,560 --> 00:20:30,720 Speaker 12: deal fairly with their counterparts. 389 00:20:31,640 --> 00:20:33,439 Speaker 5: Well, it does feel like things are frozen at the 390 00:20:33,440 --> 00:20:33,879 Speaker 5: moment here. 391 00:20:33,920 --> 00:20:34,080 Speaker 6: Rick. 392 00:20:34,080 --> 00:20:35,639 Speaker 2: I don't know your thoughts on what took place in 393 00:20:35,640 --> 00:20:39,159 Speaker 2: the House of Representatives last evening. We've talked about the 394 00:20:39,200 --> 00:20:42,880 Speaker 2: recisions package before, but this feels like we're in a more, 395 00:20:42,960 --> 00:20:46,719 Speaker 2: if even possible, a more dysfunctional place than we were before. 396 00:20:46,800 --> 00:20:50,359 Speaker 2: If Democrats continue to threaten a vote on Jeffrey Epstein files, 397 00:20:50,400 --> 00:20:51,600 Speaker 2: can they get anything done? 398 00:20:53,040 --> 00:20:53,240 Speaker 10: Yeah? 399 00:20:53,359 --> 00:20:54,680 Speaker 5: Look, they're going to be gone. 400 00:20:55,480 --> 00:20:57,359 Speaker 3: Nothing's going to happen in the House of Representatives for 401 00:20:57,400 --> 00:21:00,199 Speaker 3: the balance of the summer, and that's probably a good thing. 402 00:21:00,520 --> 00:21:02,800 Speaker 3: We need a reset to the politics that exists on 403 00:21:02,800 --> 00:21:07,080 Speaker 3: Capitol Hill today. You know, right now the future is 404 00:21:07,080 --> 00:21:10,840 Speaker 3: pretty glooming. As you've pointed out, Why should Democrats cooperate 405 00:21:10,880 --> 00:21:12,960 Speaker 3: with Republicans when reposed, they are only going to break 406 00:21:13,000 --> 00:21:15,879 Speaker 3: their commitments and come back after the funds that they 407 00:21:16,200 --> 00:21:21,240 Speaker 3: both jointly Byparson Way agreed to pass. It is amazing 408 00:21:21,320 --> 00:21:25,040 Speaker 3: that the Recisions Package nine billion dollars has created this 409 00:21:25,119 --> 00:21:28,399 Speaker 3: biggest stink. When Congress just passed four trillion dollars a 410 00:21:28,520 --> 00:21:31,879 Speaker 3: debt as a part of the reconciliation bill, that should 411 00:21:31,880 --> 00:21:34,560 Speaker 3: be what people are fuming about, not nine billion dollar 412 00:21:34,960 --> 00:21:38,200 Speaker 3: recision package. And I think Democrats would be on much 413 00:21:38,240 --> 00:21:40,719 Speaker 3: better ground to say that we have just run up 414 00:21:40,720 --> 00:21:43,640 Speaker 3: a deficit the likes of which no other president has 415 00:21:43,680 --> 00:21:47,280 Speaker 3: ever done. I mean, I just I guess I missed 416 00:21:47,280 --> 00:21:50,320 Speaker 3: the point that the Recision package of nine billion dollars, 417 00:21:50,359 --> 00:21:53,920 Speaker 3: which is a rounding error on that deficit, is somehow 418 00:21:53,960 --> 00:21:56,440 Speaker 3: going to make a big difference politically to the Democrats. 419 00:21:56,480 --> 00:21:58,879 Speaker 3: But so be it. I don't give advice to Democrats 420 00:21:59,240 --> 00:22:01,600 Speaker 3: and they're on their but it does look pretty gloomy 421 00:22:01,640 --> 00:22:03,480 Speaker 3: when it comes to whether or not there can be 422 00:22:03,520 --> 00:22:08,080 Speaker 3: a bipartisan budget that gets approved by the end of September. 423 00:22:09,160 --> 00:22:11,320 Speaker 2: So it sounds like we're cruising for a shutdown. It's 424 00:22:11,320 --> 00:22:14,280 Speaker 2: not even August yet. It's about the principle here, right, Genie. 425 00:22:14,320 --> 00:22:15,920 Speaker 2: It could be one dollar, the fact that it was 426 00:22:15,960 --> 00:22:18,320 Speaker 2: approved signing to law. This is why Democrats are angry. 427 00:22:18,359 --> 00:22:18,800 Speaker 5: Am I wrong? 428 00:22:20,240 --> 00:22:20,480 Speaker 9: Well? 429 00:22:20,520 --> 00:22:24,400 Speaker 12: Absolutely? I mean, anybody who has negotiated anything knows that 430 00:22:24,480 --> 00:22:26,880 Speaker 12: what is the point if the other side is going 431 00:22:26,920 --> 00:22:30,080 Speaker 12: to negotiate and then a couple hours later pull back 432 00:22:30,119 --> 00:22:32,960 Speaker 12: on what you've agreed to fairly and I would just 433 00:22:33,080 --> 00:22:35,679 Speaker 12: say that we are going to hear an awful lot, 434 00:22:35,800 --> 00:22:39,160 Speaker 12: by the way, about the debt and deficit from the Democrats. 435 00:22:39,560 --> 00:22:42,440 Speaker 12: There was a really important op ed in The Times 436 00:22:42,520 --> 00:22:46,240 Speaker 12: by James Carvill and he is speaking for many Democrats 437 00:22:46,280 --> 00:22:48,720 Speaker 12: when he says the twenty twenty sixth election should be 438 00:22:48,800 --> 00:22:52,399 Speaker 12: run on one thing, and that is repeal the Big 439 00:22:52,480 --> 00:22:57,040 Speaker 12: Beautiful Bill, or what they describe as the Big Ugly Bill. 440 00:22:57,440 --> 00:23:01,200 Speaker 12: And one of the main reasons is Medicare Medicare. One 441 00:23:01,440 --> 00:23:05,400 Speaker 12: reason is the food snap and other pullbacks on that, 442 00:23:05,680 --> 00:23:08,439 Speaker 12: but a big reason is the debt and deficit. And 443 00:23:08,480 --> 00:23:11,479 Speaker 12: so I think Democrats are going to do both. They 444 00:23:11,520 --> 00:23:14,080 Speaker 12: are going to continue to ask to be treated fairly 445 00:23:14,160 --> 00:23:18,040 Speaker 12: and provide partisan negotiations with Republicans, and they are going 446 00:23:18,119 --> 00:23:22,240 Speaker 12: to push for a repeal for this bill because the 447 00:23:22,280 --> 00:23:25,800 Speaker 12: bill is regressive and it hits the working and the 448 00:23:25,880 --> 00:23:29,520 Speaker 12: lower class harder in the interest of tax breaks for 449 00:23:29,560 --> 00:23:30,040 Speaker 12: the wealthy. 450 00:23:31,760 --> 00:23:36,400 Speaker 2: Rick Davis, where's this Epstein going in the House of Representatives? 451 00:23:36,760 --> 00:23:39,520 Speaker 2: Because it appears the House Oversight Committee is going to 452 00:23:39,520 --> 00:23:41,879 Speaker 2: get involved here, and this is an interesting headline today. 453 00:23:41,920 --> 00:23:45,000 Speaker 2: Tim Burchett, who's joined us on the program before, is 454 00:23:45,040 --> 00:23:49,600 Speaker 2: responsible for this. The Oversight Committee will subpoena imprisoned Epstein 455 00:23:49,720 --> 00:23:55,200 Speaker 2: associate Glaine Maxwell to testify before Congress. Burchett says he 456 00:23:55,240 --> 00:23:59,760 Speaker 2: did not consult President Trump beforehand. He's got the support 457 00:23:59,840 --> 00:24:03,199 Speaker 2: of the committee chair James Comer, who also says he 458 00:24:03,280 --> 00:24:06,439 Speaker 2: did not compare notes or speak with Trump or the 459 00:24:06,520 --> 00:24:10,680 Speaker 2: Speaker of the House about this. This story's not going 460 00:24:10,720 --> 00:24:14,199 Speaker 2: away anytime soon. What would testimony like this bring to 461 00:24:14,280 --> 00:24:15,320 Speaker 2: this whole scan well, I. 462 00:24:15,240 --> 00:24:17,960 Speaker 3: Mean you really have to wonder. I mean, why in 463 00:24:18,000 --> 00:24:23,119 Speaker 3: the world would the Attorney General say that all, you know, 464 00:24:23,200 --> 00:24:27,720 Speaker 3: efforts have been made to discover the truth about Jeffrey 465 00:24:27,720 --> 00:24:32,880 Speaker 3: Epstein's but Jelaane Maxwell wasn't ever talked to. I mean, really, 466 00:24:33,200 --> 00:24:35,399 Speaker 3: she's sitting just a few miles away from you. 467 00:24:35,880 --> 00:24:36,040 Speaker 6: Now. 468 00:24:36,080 --> 00:24:38,960 Speaker 3: Evidently, according to the reporting I've seen, even the Attorney 469 00:24:38,960 --> 00:24:40,439 Speaker 3: General wants to have a little tat to. 470 00:24:40,480 --> 00:24:41,919 Speaker 5: Day with Maxwell. 471 00:24:42,640 --> 00:24:45,840 Speaker 3: So my guess is we may be right into this 472 00:24:45,880 --> 00:24:49,880 Speaker 3: after Labor Day where the theatrics of the House of Representatives, 473 00:24:50,000 --> 00:24:53,320 Speaker 3: you know, thank goodness, they're there for entertainment value alone, 474 00:24:54,200 --> 00:24:58,200 Speaker 3: you know, are going to plunge deeply into this issue 475 00:24:58,400 --> 00:25:02,040 Speaker 3: of Jeffrey Epps and just keep it alive a little 476 00:25:02,040 --> 00:25:04,639 Speaker 3: bit longer. But there are a lot of Republicans scritching 477 00:25:04,680 --> 00:25:07,199 Speaker 3: a head wondering, you know, is that every man for 478 00:25:07,280 --> 00:25:10,000 Speaker 3: himself today? What's the Attorney General going to do? Cut 479 00:25:10,040 --> 00:25:12,080 Speaker 3: a deal with Maxwell not to testify to the House. 480 00:25:12,240 --> 00:25:14,840 Speaker 3: I mean, this is going to be an interesting August. 481 00:25:15,880 --> 00:25:17,960 Speaker 2: Well you got that right, boy, Just when you thought 482 00:25:18,080 --> 00:25:20,480 Speaker 2: the dog days of summer were arriving, we just got 483 00:25:20,480 --> 00:25:24,479 Speaker 2: to read out guys on the President's meeting with President 484 00:25:24,560 --> 00:25:27,919 Speaker 2: Marcos of the Philippines, President Trump writing, it was a 485 00:25:27,960 --> 00:25:32,320 Speaker 2: beautiful visit. We concluded our trade deal. Concluded our trade deal, 486 00:25:32,359 --> 00:25:35,520 Speaker 2: whereby the Philippines, he writes, is going open market with 487 00:25:35,600 --> 00:25:39,640 Speaker 2: the United States and zero tariffs. The Philippines will pay 488 00:25:39,680 --> 00:25:44,360 Speaker 2: a nineteen percent tariff. In addition, we will work together militarily. 489 00:25:44,440 --> 00:25:48,080 Speaker 2: Remembering that the President had threatened a twenty percent tariff 490 00:25:48,520 --> 00:25:52,480 Speaker 2: in the trade letter that went out, So, Jeanie, President 491 00:25:52,480 --> 00:25:55,520 Speaker 2: Marcos just saved himself one percent. We call this a 492 00:25:55,560 --> 00:25:56,040 Speaker 2: trade deal. 493 00:25:57,960 --> 00:26:00,280 Speaker 12: I don't know if that's what he came for. It 494 00:26:00,320 --> 00:26:02,960 Speaker 12: seems to be that's what he's leaving with. It will 495 00:26:03,000 --> 00:26:05,760 Speaker 12: be really curious, and I have not seen this readout. 496 00:26:05,760 --> 00:26:09,040 Speaker 12: It will be really curious to see what the President 497 00:26:09,080 --> 00:26:12,159 Speaker 12: Marco's side has to say about this. But my gosh, 498 00:26:12,240 --> 00:26:14,879 Speaker 12: you go in with twenty and come out with nineteen. 499 00:26:15,400 --> 00:26:19,359 Speaker 12: I think the President has won this round. But unfortunately, 500 00:26:19,800 --> 00:26:23,320 Speaker 12: it is the American public that will pay that nineteen percent, 501 00:26:23,720 --> 00:26:27,000 Speaker 12: not the Philippines. And that's something that needs to be 502 00:26:27,160 --> 00:26:31,360 Speaker 12: underscored repeatedly. This is a tax on the American consumer 503 00:26:31,440 --> 00:26:33,640 Speaker 12: should they buy anything from the Philippines. 504 00:26:35,240 --> 00:26:37,760 Speaker 5: The Philippines will pay a nineteen percent. 505 00:26:37,480 --> 00:26:41,520 Speaker 2: Here if he writes the United States zero, maybe Rick, 506 00:26:41,680 --> 00:26:44,760 Speaker 2: you're more concerned with the next line here, we will 507 00:26:44,760 --> 00:26:48,040 Speaker 2: work together militarily. How important is that when it comes 508 00:26:48,040 --> 00:26:49,840 Speaker 2: to China? 509 00:26:49,960 --> 00:26:51,320 Speaker 5: You know, look, I think it's critical. 510 00:26:52,359 --> 00:26:56,119 Speaker 3: Philippines has always been a strategic partner of ours for 511 00:26:56,160 --> 00:26:58,879 Speaker 3: many years. We've had ups and downs with the island 512 00:26:58,920 --> 00:27:02,720 Speaker 3: we got kicked out of and Clark Basse in the 513 00:27:02,760 --> 00:27:06,760 Speaker 3: early eighties, and we've now been able to resurrect that 514 00:27:06,840 --> 00:27:11,160 Speaker 3: military relationship. But you know, look, I mean, you do wonder. 515 00:27:11,840 --> 00:27:13,600 Speaker 3: You know, the Philippines are in the position to give 516 00:27:13,600 --> 00:27:17,520 Speaker 3: blood and treasure to our effort to contain China aggression 517 00:27:17,560 --> 00:27:22,160 Speaker 3: in the South China Sea. They've been harassed and shot 518 00:27:22,200 --> 00:27:24,520 Speaker 3: at by the Chinese, and yet we're going to slap 519 00:27:24,560 --> 00:27:27,959 Speaker 3: them with a nineteen percent tariff. I really wonder what 520 00:27:28,000 --> 00:27:31,040 Speaker 3: the symmetry of all this policy is, because sometimes it 521 00:27:31,040 --> 00:27:32,040 Speaker 3: doesn't make any sense. 522 00:27:33,840 --> 00:27:36,320 Speaker 2: Rick Davis and Jeanie Schanzeno with breaking news in the 523 00:27:36,359 --> 00:27:38,720 Speaker 2: Clutch here from the White House following the President's meeting 524 00:27:39,320 --> 00:27:42,080 Speaker 2: with the Philippine President. Many thanks to both of you, 525 00:27:42,160 --> 00:27:45,400 Speaker 2: of course, Bloomberg Politics contributors Rick Davis and Jeanie Schanzeno. 526 00:27:45,680 --> 00:27:48,680 Speaker 2: We're going to have more on this, the emerging details 527 00:27:48,760 --> 00:27:51,760 Speaker 2: on this deal here in a conversation ahead with Doug Reticker, 528 00:27:51,760 --> 00:27:53,640 Speaker 2: who's going to join us in studio just a couple 529 00:27:53,680 --> 00:27:55,520 Speaker 2: of moments from now. We'll also check the markets with 530 00:27:55,600 --> 00:27:58,600 Speaker 2: Charlie Pellett to see if there's a Wall Street reaction here. 531 00:27:58,640 --> 00:28:01,199 Speaker 2: There hasn't been too much Wall Street concern over the 532 00:28:01,240 --> 00:28:03,720 Speaker 2: matter of tariffs now for weeks as we head for 533 00:28:03,800 --> 00:28:06,960 Speaker 2: an August first deadline on reciprocal tariffs. Right now, the 534 00:28:07,040 --> 00:28:09,320 Speaker 2: Dow's ahead by one hundred and thirty eight s and 535 00:28:09,359 --> 00:28:12,120 Speaker 2: P five hundred is up five and ASDAK remains lower, 536 00:28:12,160 --> 00:28:15,160 Speaker 2: it's not about sixty five points right now, much more 537 00:28:15,160 --> 00:28:18,120 Speaker 2: ahead here on Balance of Power only on Bloomberg. 538 00:28:21,359 --> 00:28:24,840 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 539 00:28:24,880 --> 00:28:28,320 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 540 00:28:28,400 --> 00:28:31,760 Speaker 1: Cockley and Android Auto with the Bloomberg Business App. Listen 541 00:28:31,800 --> 00:28:34,919 Speaker 1: on demand wherever you get your podcasts, or watch us 542 00:28:34,960 --> 00:28:37,280 Speaker 1: live on YouTube. 543 00:28:37,560 --> 00:28:40,120 Speaker 2: You wouldn't think there was a trade deadline a week 544 00:28:40,160 --> 00:28:42,560 Speaker 2: and a half away, remembering of course, how the markets 545 00:28:42,600 --> 00:28:47,200 Speaker 2: behaved following President Trump's Liberation Day. But we do have 546 00:28:47,320 --> 00:28:49,720 Speaker 2: news on the trade front. President Trump meeting today with 547 00:28:49,760 --> 00:28:52,680 Speaker 2: the President of the Philippines, President Marcos, was in the 548 00:28:52,720 --> 00:28:53,320 Speaker 2: Oval Office. 549 00:28:53,360 --> 00:28:54,280 Speaker 5: There was a half. 550 00:28:54,080 --> 00:28:57,720 Speaker 2: Hour back and forth with the White House Press Corps 551 00:28:58,080 --> 00:29:00,239 Speaker 2: and when they went back behind closed doors, if they 552 00:29:00,240 --> 00:29:05,000 Speaker 2: did strike a trade deal, according to President Trump, who 553 00:29:05,040 --> 00:29:09,000 Speaker 2: says the Philippines will go open market with the United 554 00:29:09,040 --> 00:29:12,240 Speaker 2: States and zero tariffs, I'm reading his language here. Quote 555 00:29:12,240 --> 00:29:18,640 Speaker 2: the Philippines will pay a nineteen percent tariff, the United 556 00:29:18,720 --> 00:29:21,560 Speaker 2: States will pay zero, he says. In addition, we will 557 00:29:21,600 --> 00:29:24,440 Speaker 2: work together militarily. It was a great honor to be 558 00:29:24,560 --> 00:29:27,600 Speaker 2: with the President. This was a pretty short meeting. They 559 00:29:27,640 --> 00:29:29,960 Speaker 2: spoke with reporters for about a half hour, met for 560 00:29:30,080 --> 00:29:32,960 Speaker 2: roughly an hour, and the President just posted this a 561 00:29:33,040 --> 00:29:35,480 Speaker 2: short time ago. We're joined in studio now by Doug 562 00:29:35,560 --> 00:29:39,040 Speaker 2: Reticker ahead of this August first deadline. It's a conversation 563 00:29:39,080 --> 00:29:42,000 Speaker 2: that we've been looking forward to. Founder managing partner International 564 00:29:42,000 --> 00:29:44,840 Speaker 2: Capital Strategies, a former member of the executive board on 565 00:29:44,880 --> 00:29:47,320 Speaker 2: the International Monetary Fund. Doug, it's great to see you. 566 00:29:47,360 --> 00:29:50,600 Speaker 2: Welcome back to Bloomberg TV. And radio, So I guess 567 00:29:50,600 --> 00:29:52,720 Speaker 2: we'll call this a deal. We don't have much more 568 00:29:52,760 --> 00:29:55,480 Speaker 2: than what we're seeing in this brief post from the 569 00:29:55,480 --> 00:29:58,040 Speaker 2: president here. There have been a number of framework agreements, 570 00:29:58,080 --> 00:30:01,160 Speaker 2: which might be the way that you describe this, But 571 00:30:01,240 --> 00:30:03,440 Speaker 2: with all the noise in Washington today, this is the 572 00:30:03,440 --> 00:30:06,680 Speaker 2: closest thing we have to a bit of news. This 573 00:30:06,720 --> 00:30:09,520 Speaker 2: is a market that has been very forgiving to this president. 574 00:30:09,520 --> 00:30:11,440 Speaker 2: Do you expect further deals to emerge? 575 00:30:12,000 --> 00:30:14,479 Speaker 9: First of all, we have to put deals in quotes, okay, 576 00:30:14,680 --> 00:30:16,880 Speaker 9: because as you said, a deal is a framework, and 577 00:30:16,920 --> 00:30:20,160 Speaker 9: a framework is still an undefined set of agreements that 578 00:30:20,320 --> 00:30:25,720 Speaker 9: is not entirely even the UK deal is not entirely 579 00:30:25,800 --> 00:30:28,760 Speaker 9: bedded down. So let's be careful how we expect to 580 00:30:28,760 --> 00:30:31,400 Speaker 9: see things until they're in writing. Until you have a 581 00:30:31,480 --> 00:30:34,560 Speaker 9: tariff schedule that is sent to a customs officer who 582 00:30:34,600 --> 00:30:38,680 Speaker 9: reads across and says, this product gets this tariff, we 583 00:30:38,720 --> 00:30:41,040 Speaker 9: actually don't know what's in these things. Do I expect 584 00:30:41,080 --> 00:30:44,440 Speaker 9: more deals deals in that amorphous sense? Maybe kind of 585 00:30:44,480 --> 00:30:48,320 Speaker 9: sort of yes, But I'm very worried that the markets 586 00:30:48,320 --> 00:30:53,480 Speaker 9: broadly have just become overly complacent, overly sanguine, either because 587 00:30:53,480 --> 00:30:57,120 Speaker 9: they don't really fully appreciate the impact that is forthcoming, 588 00:30:57,480 --> 00:31:00,600 Speaker 9: or because they go back to the taco trade. Yeah think, Well, 589 00:31:00,680 --> 00:31:03,840 Speaker 9: Trump's going to back down in a matter of days anyway. Therefore, 590 00:31:03,960 --> 00:31:06,600 Speaker 9: let's just go on our August break. I'm just not 591 00:31:06,880 --> 00:31:09,360 Speaker 9: sure that's going to be a great strategy, at least 592 00:31:09,520 --> 00:31:10,080 Speaker 9: in the short run. 593 00:31:10,160 --> 00:31:12,520 Speaker 2: That's a pretty risky proposition if it's one or the other. Here, 594 00:31:12,560 --> 00:31:15,000 Speaker 2: we've got markets that are knocking on all time highs 595 00:31:15,520 --> 00:31:18,360 Speaker 2: on a daily basis. Here you seem to suggest we 596 00:31:18,400 --> 00:31:19,440 Speaker 2: could be in for a reckoning. 597 00:31:19,920 --> 00:31:22,800 Speaker 9: Well, I think the economy. I mean, I'm not going 598 00:31:22,880 --> 00:31:25,120 Speaker 9: to say the economy is not strong. The economy is 599 00:31:25,160 --> 00:31:29,200 Speaker 9: doing fine. However, that's in part because of these artificial 600 00:31:29,520 --> 00:31:33,520 Speaker 9: postponements of the impacts of tariffs that have basically made 601 00:31:33,560 --> 00:31:36,720 Speaker 9: sure that the impacts of those tariffs are not being felt. 602 00:31:37,000 --> 00:31:38,960 Speaker 9: If everybody assumes that you're going to kick the can 603 00:31:39,000 --> 00:31:42,560 Speaker 9: down the road on tariffs forever, then fine, then the 604 00:31:42,560 --> 00:31:46,959 Speaker 9: floodgates of growth and modest impacts are for as far 605 00:31:46,960 --> 00:31:49,040 Speaker 9: as the eye can see. But I'm a little more 606 00:31:49,040 --> 00:31:52,120 Speaker 9: skeptical that this is all sustainable when you've got big, 607 00:31:52,360 --> 00:31:57,160 Speaker 9: big countries Japan, the EU that are Canada and Mexico, 608 00:31:57,400 --> 00:32:01,040 Speaker 9: where these are the US's largest trading partners, and it 609 00:32:01,120 --> 00:32:03,080 Speaker 9: is not clear there's going to be a deal, and 610 00:32:03,160 --> 00:32:05,520 Speaker 9: if there is a deal, that that deal is sustainable. Yes, 611 00:32:05,640 --> 00:32:10,000 Speaker 9: So I'm very anxious that people haven't fully digested what 612 00:32:10,200 --> 00:32:11,880 Speaker 9: could could be coming. 613 00:32:11,960 --> 00:32:13,360 Speaker 2: Well, it's coming out in the wash here a little 614 00:32:13,360 --> 00:32:15,880 Speaker 2: bit in earnings reporting seasons. Some of these conference calls 615 00:32:15,920 --> 00:32:20,000 Speaker 2: this week, DOUG have been really interesting. Lockheed Martin today 616 00:32:20,040 --> 00:32:22,479 Speaker 2: pointing to the cost of steel when it comes to 617 00:32:22,480 --> 00:32:26,280 Speaker 2: making missiles. General Motors similar situation. In fact, we heard 618 00:32:26,280 --> 00:32:30,760 Speaker 2: from Paul Jacobson earlier today's the CFO at General Motors 619 00:32:30,800 --> 00:32:34,160 Speaker 2: about the supply chain pinch that this has been creating. 620 00:32:34,200 --> 00:32:36,640 Speaker 2: This is from earlier today on Bloomberg TV and Radio. 621 00:32:36,680 --> 00:32:37,200 Speaker 5: Let's listen. 622 00:32:37,680 --> 00:32:41,440 Speaker 10: Since COVID, we've been looking at creating more resiliency in 623 00:32:41,480 --> 00:32:44,880 Speaker 10: the supply chain and we've onshoored a lot of things. 624 00:32:44,760 --> 00:32:47,640 Speaker 10: As we mentioned in our last call, only about three 625 00:32:47,680 --> 00:32:50,880 Speaker 10: percent of our direct purchases come from China through the 626 00:32:50,920 --> 00:32:53,240 Speaker 10: supply chain, so that's helped us a little bit in 627 00:32:53,320 --> 00:32:56,520 Speaker 10: terms of being proactive on that. Obviously, we'll do some 628 00:32:56,600 --> 00:33:00,960 Speaker 10: resetting in partnership with our supply chain partner. But you know, 629 00:33:01,040 --> 00:33:03,640 Speaker 10: it really starts with our manufacturing. 630 00:33:02,840 --> 00:33:08,720 Speaker 5: Footprint resetting in partnership with our supply chain partners. 631 00:33:08,760 --> 00:33:12,360 Speaker 2: That's real. That's different than waving tariff letters around here. 632 00:33:12,360 --> 00:33:15,680 Speaker 2: When you hear a company like General Motors talking like that, 633 00:33:15,760 --> 00:33:17,920 Speaker 2: what does that tell you about the evolution or economy 634 00:33:17,920 --> 00:33:18,960 Speaker 2: could be about to go through? 635 00:33:19,120 --> 00:33:22,800 Speaker 9: Well, it says take notice and pay attention. And while 636 00:33:22,800 --> 00:33:26,000 Speaker 9: the auto sector is particularly exposed, they're getting it on 637 00:33:26,440 --> 00:33:29,920 Speaker 9: autos themselves, on auto parts, on steel, on aluminum. The 638 00:33:29,920 --> 00:33:32,880 Speaker 9: auto guys are really in the crosshres. But I think 639 00:33:32,920 --> 00:33:34,640 Speaker 9: we can I'm not saying it's a canary in the 640 00:33:34,640 --> 00:33:37,720 Speaker 9: coal mine, but certainly we should be taking it very 641 00:33:37,720 --> 00:33:40,960 Speaker 9: seriously that. As I said earlier, the impact of these 642 00:33:41,000 --> 00:33:46,680 Speaker 9: tariffs across supply chains, across economies, across trading patterns is 643 00:33:47,040 --> 00:33:50,360 Speaker 9: just not being fully appreciated, in part because companies have 644 00:33:50,400 --> 00:33:53,840 Speaker 9: gone to great extremes to try and mask it, tamp 645 00:33:53,920 --> 00:33:56,840 Speaker 9: it down not only under political pressure, but under the 646 00:33:57,280 --> 00:34:00,760 Speaker 9: risk slash opportunity that these towers will be reversed by 647 00:34:00,800 --> 00:34:03,640 Speaker 9: the Supreme Court ultimately, if not the interim courts along 648 00:34:03,680 --> 00:34:06,320 Speaker 9: the way, So they're saying, well, let's try and keep 649 00:34:06,400 --> 00:34:10,040 Speaker 9: things as stable as we can until we're forced, but 650 00:34:10,080 --> 00:34:12,400 Speaker 9: there will be a point at which they might be forced. 651 00:34:12,440 --> 00:34:12,760 Speaker 5: Huh. 652 00:34:12,800 --> 00:34:16,719 Speaker 2: Well, and that's pretty interesting here when you consider the 653 00:34:16,719 --> 00:34:20,680 Speaker 2: possibilities that what you just described has given the administration 654 00:34:20,800 --> 00:34:23,160 Speaker 2: cover to say tariffs are not inflationary. 655 00:34:23,920 --> 00:34:24,720 Speaker 5: Look at the data. 656 00:34:24,760 --> 00:34:26,440 Speaker 2: You guys have been talking about it for months and 657 00:34:26,520 --> 00:34:28,239 Speaker 2: we don't see it yet, but we of course know 658 00:34:28,320 --> 00:34:30,920 Speaker 2: that it's been spread around, it has been shared by 659 00:34:30,960 --> 00:34:34,279 Speaker 2: companies and in some cases has yet to hit the 660 00:34:34,400 --> 00:34:35,040 Speaker 2: hard data. 661 00:34:35,320 --> 00:34:39,000 Speaker 5: When do you see that happening. Well, there have been 662 00:34:39,040 --> 00:34:39,839 Speaker 5: some cracks. 663 00:34:39,560 --> 00:34:44,879 Speaker 9: Already, a lot of companies front loaded, and we don't 664 00:34:44,880 --> 00:34:46,680 Speaker 9: know exactly when that's going to run out, but it's 665 00:34:46,760 --> 00:34:49,560 Speaker 9: inevitable that it's going to run out, So I can't 666 00:34:49,600 --> 00:34:52,560 Speaker 9: say what the date certain will be where actually you 667 00:34:52,640 --> 00:34:55,839 Speaker 9: start to see a spike in inflation because these new 668 00:34:55,960 --> 00:34:58,919 Speaker 9: orders have to replace the stockpiles that are being drawn down. 669 00:34:59,080 --> 00:35:00,480 Speaker 9: But I do want to go back to one point, 670 00:35:00,520 --> 00:35:04,920 Speaker 9: which is the snatching defeat from the jaws of victory, 671 00:35:05,320 --> 00:35:08,879 Speaker 9: which is I think President Trump did a spectacular job 672 00:35:09,480 --> 00:35:13,320 Speaker 9: in basically getting everyone to accept the baseline ten percent tariff, 673 00:35:13,760 --> 00:35:16,600 Speaker 9: which six months ago we all said nobody's going to 674 00:35:16,600 --> 00:35:19,279 Speaker 9: accept the baseline ten percent tariff. Suddenly, whether it was 675 00:35:19,320 --> 00:35:22,080 Speaker 9: the EU or others, said we will accept the ten 676 00:35:22,120 --> 00:35:24,640 Speaker 9: percent tariff. And if you just look at it from 677 00:35:24,680 --> 00:35:29,040 Speaker 9: a budget deficit reduction standpoint, that's two hundred and eighty 678 00:35:29,080 --> 00:35:31,879 Speaker 9: three hundred billion dollars of additional revenue. There's a lot 679 00:35:31,920 --> 00:35:35,399 Speaker 9: of upside to Trump's own agenda. What did he do? 680 00:35:35,640 --> 00:35:39,359 Speaker 9: He extrapolated a linear If nothing bad is happening at ten, 681 00:35:39,719 --> 00:35:42,320 Speaker 9: then nothing bad will happen at twenty. And so now 682 00:35:42,560 --> 00:35:46,000 Speaker 9: he's just overplaying his hands. Whether it's the EU or others, 683 00:35:46,280 --> 00:35:49,520 Speaker 9: they're all saying, you know, we swallowed hard. We were 684 00:35:49,560 --> 00:35:52,800 Speaker 9: willing to accept something we didn't want to accept. Now 685 00:35:53,120 --> 00:35:56,319 Speaker 9: you're at risk of overplaying your hand. That's what worries me, 686 00:35:56,520 --> 00:35:58,799 Speaker 9: because then you've got the risk of no deal or 687 00:35:59,000 --> 00:36:03,000 Speaker 9: teriffs that are so inflationary and disruptive that it does 688 00:36:03,080 --> 00:36:05,000 Speaker 9: have a serious impact on the economy. 689 00:36:05,000 --> 00:36:06,759 Speaker 2: I want to ask you about Jay Powell while you're 690 00:36:06,760 --> 00:36:08,640 Speaker 2: still with us, because if the market's whistling passed the 691 00:36:08,680 --> 00:36:11,400 Speaker 2: graveyard on tariffs, you could argue the same when it 692 00:36:11,400 --> 00:36:13,520 Speaker 2: comes to Powell. Then again, we heard from the President 693 00:36:13,560 --> 00:36:16,439 Speaker 2: earlier today and it doesn't sound like he has any 694 00:36:16,480 --> 00:36:19,879 Speaker 2: intention of firing him or even forcing him to step down. 695 00:36:19,920 --> 00:36:21,600 Speaker 2: He says, we'll give it the next eight months. It's 696 00:36:21,600 --> 00:36:22,560 Speaker 2: not that long anyway. 697 00:36:22,600 --> 00:36:25,320 Speaker 9: Is this even a story, Well, it's a story because 698 00:36:25,400 --> 00:36:28,160 Speaker 9: the markets focus on Yeah. But I don't think the 699 00:36:28,200 --> 00:36:32,439 Speaker 9: markets are wrong to somewhat take the president's words today 700 00:36:32,480 --> 00:36:35,040 Speaker 9: at least that he's not planning to fire Chair Powell 701 00:36:35,840 --> 00:36:38,120 Speaker 9: before the end of his term. I think taking that 702 00:36:38,160 --> 00:36:40,839 Speaker 9: at face value is probably a good bet. I think 703 00:36:40,880 --> 00:36:43,920 Speaker 9: that obviously Trump is trying to jawbone Chair Powell and 704 00:36:43,960 --> 00:36:47,799 Speaker 9: the FMC into bending to his wishes. I don't think 705 00:36:47,840 --> 00:36:50,480 Speaker 9: that they are susceptible to that. But I think the markets, 706 00:36:50,520 --> 00:36:53,640 Speaker 9: while they clearly get excited whenever there's a talk about 707 00:36:53,840 --> 00:36:56,439 Speaker 9: changing the FED chair for good reason, I think they're 708 00:36:56,480 --> 00:37:00,120 Speaker 9: probably correct in tamping down the expectations that Trump is 709 00:37:00,160 --> 00:37:03,600 Speaker 9: going to pull the trigger. I'd throw in one political observation, 710 00:37:03,680 --> 00:37:08,160 Speaker 9: which is, if something else happens, something unrelated to the FED, 711 00:37:08,680 --> 00:37:11,840 Speaker 9: and President Trump needs to change the narrative, he is 712 00:37:12,000 --> 00:37:16,480 Speaker 9: prone to doing something which will absorb all of our 713 00:37:16,520 --> 00:37:20,640 Speaker 9: eyes on new headlines, and one of those possibilities could 714 00:37:20,719 --> 00:37:23,839 Speaker 9: be the so called wag the dollar scenario, which is 715 00:37:24,280 --> 00:37:27,080 Speaker 9: you threaten, if not pull the trigger on firing chair 716 00:37:27,120 --> 00:37:30,520 Speaker 9: powel in order to distract attention from something else that 717 00:37:30,600 --> 00:37:32,560 Speaker 9: you really want people not to focus on. 718 00:37:32,640 --> 00:37:35,399 Speaker 5: Not that there's anything like that around here. I've been 719 00:37:35,480 --> 00:37:36,360 Speaker 5: looking forward to seeing it. 720 00:37:36,400 --> 00:37:39,880 Speaker 2: I appreciate your coming in Doug Redicker International Capital Strategies 721 00:37:39,920 --> 00:37:43,520 Speaker 2: with us live in Washington here on Bloomberg TV and radio. 722 00:37:46,000 --> 00:37:49,200 Speaker 2: Thanks for listening to the Balance of Power podcast. Make 723 00:37:49,239 --> 00:37:52,200 Speaker 2: sure to subscribe if you haven't already, at Apple, Spotify, 724 00:37:52,320 --> 00:37:54,879 Speaker 2: or wherever you get your podcasts, and you can find 725 00:37:54,920 --> 00:37:58,160 Speaker 2: us live every weekday from Washington, DC at noontime Eastern 726 00:37:58,480 --> 00:37:59,880 Speaker 2: at Bloomberg dot com