1 00:00:02,759 --> 00:00:07,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,320 --> 00:00:10,480 Speaker 2: If we can get these trade deals done, if we 3 00:00:10,520 --> 00:00:13,440 Speaker 2: can get the tax cut down, those two things, if 4 00:00:13,440 --> 00:00:16,080 Speaker 2: they happen in the next three to six months, we're 5 00:00:16,079 --> 00:00:18,480 Speaker 2: going to see the biggest boom you ever saw. You're 6 00:00:18,480 --> 00:00:20,239 Speaker 2: going to see the stock marker go through the roof. 7 00:00:20,320 --> 00:00:22,680 Speaker 2: You're going to see the United States as sucking capital 8 00:00:22,720 --> 00:00:34,159 Speaker 2: in from the rest of the world. I'm bullish. 9 00:00:34,200 --> 00:00:37,400 Speaker 3: I'm Stephanie Flander's head of Government and Economics at Bloomberg. 10 00:00:37,680 --> 00:00:40,720 Speaker 3: Welcome to Trumponomics, the podcast that looks at the economic 11 00:00:40,720 --> 00:00:44,120 Speaker 3: world of Donald Trump, how he's already shaped the global economy. 12 00:00:44,479 --> 00:00:47,320 Speaker 3: What on earth is going to happen next? This week, 13 00:00:47,320 --> 00:00:50,240 Speaker 3: we're stepping back from the string of trade deals, pauses, 14 00:00:50,479 --> 00:00:52,960 Speaker 3: and all round events of the past week or so 15 00:00:53,440 --> 00:00:56,880 Speaker 3: to ask where are we in Donald Trump's grand strategy 16 00:00:56,960 --> 00:01:00,720 Speaker 3: for the US economy? What comes next? We've had a 17 00:01:00,840 --> 00:01:03,960 Speaker 3: kind of trade piece breakout between the US and China 18 00:01:04,120 --> 00:01:06,640 Speaker 3: just this weekend, which in turn has produced a kind 19 00:01:06,680 --> 00:01:09,360 Speaker 3: of recovery in the US stock market. Of course, there's 20 00:01:09,400 --> 00:01:13,039 Speaker 3: plenty of unanswered questions about this ninety day pause in 21 00:01:13,080 --> 00:01:15,720 Speaker 3: the very high tariffs that both countries had imposed on 22 00:01:15,760 --> 00:01:18,360 Speaker 3: each other, US and China, and we had that other 23 00:01:18,480 --> 00:01:21,360 Speaker 3: ninety day pause. Won't last that much longer on the 24 00:01:21,400 --> 00:01:24,840 Speaker 3: tariffs imposed on everyone else. But for now we're forgetting 25 00:01:24,840 --> 00:01:26,920 Speaker 3: about tariffs, or at least the world seems to be, 26 00:01:26,959 --> 00:01:29,640 Speaker 3: and it's onto the next big thing, which is tax cuts. 27 00:01:30,240 --> 00:01:34,000 Speaker 3: Hours after that US China truce was announced, House Republicans 28 00:01:34,000 --> 00:01:37,600 Speaker 3: in Congress released a multi trillion dollar draft tax bill 29 00:01:37,959 --> 00:01:42,120 Speaker 3: containing many of Donald Trump's campaign tax pledges, things like 30 00:01:42,280 --> 00:01:46,000 Speaker 3: no taxes on tips and overtime pay, and new tax 31 00:01:46,040 --> 00:01:53,960 Speaker 3: breaks for car buyers and seniors. Also, crucially, that bill 32 00:01:54,280 --> 00:01:57,320 Speaker 3: makes permanent the lower individual tax rates that were passed 33 00:01:57,360 --> 00:02:01,560 Speaker 3: in Trump's first term in twenty seventeen. Well, we recorded 34 00:02:01,560 --> 00:02:05,400 Speaker 3: this conversation on Tuesday morning, US time, just as people 35 00:02:05,400 --> 00:02:08,480 Speaker 3: in Washington were still getting to grips with a detail 36 00:02:08,520 --> 00:02:11,200 Speaker 3: of that big bill. But we had exactly the right 37 00:02:11,240 --> 00:02:13,560 Speaker 3: guests to help us put all of this in context. 38 00:02:14,600 --> 00:02:18,239 Speaker 3: Josh Wingrove, senior reporter for Bloomberg's White House team, who 39 00:02:18,240 --> 00:02:20,640 Speaker 3: can tell us something of the mood in Washington in 40 00:02:20,639 --> 00:02:24,360 Speaker 3: Congress and the West Wing. And Stephen Moore, economist and 41 00:02:24,400 --> 00:02:27,079 Speaker 3: the author most recently of the book The Trump Economic 42 00:02:27,280 --> 00:02:31,480 Speaker 3: Miracle and the Plan to Unleash Prosperity Again, among other things. 43 00:02:31,840 --> 00:02:35,840 Speaker 3: Stephen has advised Donald Trump's twenty sixteen presidential campaign, and 44 00:02:35,880 --> 00:02:38,160 Speaker 3: he's now serving as a Senior Fellow in economics at 45 00:02:38,160 --> 00:02:47,960 Speaker 3: the Heritage Foundation. Stephen, thank you very much for doing this. 46 00:02:48,040 --> 00:02:50,800 Speaker 3: I know it's a very busy week. So if you 47 00:02:50,960 --> 00:02:53,240 Speaker 3: just sort of stepped back on these first few months, 48 00:02:53,280 --> 00:02:54,960 Speaker 3: how do you think he's doing well. 49 00:02:55,000 --> 00:02:57,440 Speaker 2: I like most of what Trump has done. I'm a 50 00:02:57,480 --> 00:02:59,919 Speaker 2: big fan of the tax cut. In fact, Lary Cudler 51 00:03:00,000 --> 00:03:02,880 Speaker 2: and I wrote the very first version of the Trump 52 00:03:02,919 --> 00:03:05,840 Speaker 2: tax cut back in twenty sixteen when he first started 53 00:03:05,880 --> 00:03:08,440 Speaker 2: running for president, and of course in the weeks and 54 00:03:08,560 --> 00:03:11,079 Speaker 2: maybe months ahead, we're going to try to finalize making 55 00:03:11,160 --> 00:03:13,840 Speaker 2: that tax cut permanent and making other changes. So I'm 56 00:03:13,840 --> 00:03:15,600 Speaker 2: a big fan of that. I like what he's doing 57 00:03:15,919 --> 00:03:19,760 Speaker 2: potentially saving a trillion dollars in deregulation costs. I like 58 00:03:19,800 --> 00:03:23,040 Speaker 2: the fact that he's promoting pro American energy policy that 59 00:03:23,120 --> 00:03:25,799 Speaker 2: uses oil or gas or coal or nuclear power, everything 60 00:03:25,840 --> 00:03:29,079 Speaker 2: we've got. So I'm very supportive of most things Trump 61 00:03:29,280 --> 00:03:32,200 Speaker 2: has done. As you know, i'm a kind of old 62 00:03:32,200 --> 00:03:35,680 Speaker 2: fashioned Milton Friedman, free trader. So I'm not a big 63 00:03:35,680 --> 00:03:38,920 Speaker 2: fan of tariffs. But if Trump can pull this off 64 00:03:38,960 --> 00:03:41,720 Speaker 2: and can get other countries to reduce their TIFFs, which 65 00:03:41,760 --> 00:03:45,160 Speaker 2: is his objective, that would be a very positive thing 66 00:03:45,280 --> 00:03:47,560 Speaker 2: for growth and for trade. But boy, it's been a 67 00:03:47,600 --> 00:03:48,160 Speaker 2: bumpy road. 68 00:03:48,360 --> 00:03:50,080 Speaker 3: We will get onto some of the tax side of 69 00:03:50,120 --> 00:03:53,720 Speaker 3: things and maybe deregulation. But because you had raised publicly 70 00:03:53,760 --> 00:03:57,400 Speaker 3: some concerns about the economic impact of those tariffs, how 71 00:03:57,440 --> 00:03:59,560 Speaker 3: are you reading the last few weeks do you think 72 00:03:59,600 --> 00:04:01,480 Speaker 3: or the last few days do you think there has 73 00:04:01,520 --> 00:04:05,160 Speaker 3: been a real change of approach from the administration. You know, 74 00:04:05,160 --> 00:04:07,440 Speaker 3: we're having a deal with certainly the Chinese feel they 75 00:04:07,440 --> 00:04:10,400 Speaker 3: got everything that they wanted in that initial negotiation with 76 00:04:10,440 --> 00:04:13,480 Speaker 3: Scott Besson or is it too soon to say? 77 00:04:14,080 --> 00:04:16,520 Speaker 2: Maybe a little too soon to say. But the last 78 00:04:16,600 --> 00:04:19,880 Speaker 2: couple of weeks have been enormously successful for Trump. We've had, 79 00:04:19,920 --> 00:04:23,599 Speaker 2: as you know, we've had a major, major comeback in 80 00:04:23,640 --> 00:04:26,400 Speaker 2: our stock market, so that's been good. A lot of 81 00:04:26,400 --> 00:04:28,159 Speaker 2: people lost a lot of money in March. In April, 82 00:04:28,200 --> 00:04:30,279 Speaker 2: it may has been a pretty good month. You know, 83 00:04:30,360 --> 00:04:33,200 Speaker 2: you never know what Trump, whether this was the grand design, 84 00:04:33,720 --> 00:04:36,080 Speaker 2: He's a very good negotiator. He's a very clever guy. 85 00:04:36,160 --> 00:04:40,800 Speaker 2: He's always underestimated by his political opposition. So I think that, 86 00:04:40,920 --> 00:04:42,320 Speaker 2: for example, when he said, well, we're going to put 87 00:04:42,320 --> 00:04:45,240 Speaker 2: one hundred and twenty five percent tarosun China, and then 88 00:04:45,240 --> 00:04:47,440 Speaker 2: when he said, well, maybe we'll go down in the 89 00:04:47,440 --> 00:04:50,400 Speaker 2: press at oh, there is is retreating, but that may 90 00:04:50,440 --> 00:04:52,360 Speaker 2: have been part of the plan all along, is to 91 00:04:52,360 --> 00:04:54,520 Speaker 2: start with a very high number and bring it down 92 00:04:54,839 --> 00:04:58,760 Speaker 2: as a negotiating tactic. I do believe that the UK 93 00:04:59,240 --> 00:05:01,440 Speaker 2: deal betwe in the US and the UK was a 94 00:05:01,440 --> 00:05:05,080 Speaker 2: great deal for both sides of the Atlantic. And I 95 00:05:05,080 --> 00:05:07,880 Speaker 2: think if this China thing can be consummated I don't 96 00:05:07,920 --> 00:05:11,560 Speaker 2: know where exactly it is in its negotiating phase, then 97 00:05:11,640 --> 00:05:13,920 Speaker 2: I think you're getting got a domino effect, and I 98 00:05:13,960 --> 00:05:16,159 Speaker 2: think you'll get a lot of other countries knocking on 99 00:05:16,200 --> 00:05:18,400 Speaker 2: the door and saying let's make a deal. And that's 100 00:05:18,440 --> 00:05:21,080 Speaker 2: exactly what Trump has always wanted to see. 101 00:05:21,320 --> 00:05:24,000 Speaker 3: As you point out, the markets have certainly responded well 102 00:05:24,040 --> 00:05:26,159 Speaker 3: in the last week or so. The line is this 103 00:05:26,240 --> 00:05:28,400 Speaker 3: trade war was all the ninth series of Dallas. It 104 00:05:28,440 --> 00:05:30,359 Speaker 3: was all why it was all well, you know, Bobby 105 00:05:30,400 --> 00:05:33,320 Speaker 3: Ewing was the was in the shower, But as Josh 106 00:05:33,400 --> 00:05:35,680 Speaker 3: was reminding me as we were speaking earlier, I mean, 107 00:05:35,720 --> 00:05:38,880 Speaker 3: the effective tariff rate that we're left with even now, 108 00:05:38,920 --> 00:05:42,320 Speaker 3: at these kind of ceasefire levels, is very similar or 109 00:05:42,400 --> 00:05:46,440 Speaker 3: higher to the Smoot Hawley level. Even that UK trade 110 00:05:46,480 --> 00:05:51,080 Speaker 3: deal quote unquote leaves trade between the two countries kind 111 00:05:51,120 --> 00:05:54,040 Speaker 3: of in many ways less open than it was before 112 00:05:54,040 --> 00:05:57,720 Speaker 3: Donald Trump came to office. Our own economists think that 113 00:05:57,760 --> 00:06:00,600 Speaker 3: the tarifs in place now even and if they stay 114 00:06:00,640 --> 00:06:03,760 Speaker 3: at these lower levels, would mean over time a seventy 115 00:06:03,800 --> 00:06:06,960 Speaker 3: percent fall in Chinese exports to the US. Are we 116 00:06:07,080 --> 00:06:11,120 Speaker 3: underestimating how much damage could still be done by these tariffs? 117 00:06:11,720 --> 00:06:14,719 Speaker 2: Boy, that's a good question. It's a tough question to answer, 118 00:06:14,839 --> 00:06:16,960 Speaker 2: because I do think there may be a little bit 119 00:06:17,000 --> 00:06:20,560 Speaker 2: of a rational exuberance here. The market so much wanted 120 00:06:20,560 --> 00:06:23,560 Speaker 2: to see a deal and end to this turbulence that 121 00:06:23,680 --> 00:06:26,040 Speaker 2: maybe they're reading too much. I don't know if they 122 00:06:26,040 --> 00:06:28,560 Speaker 2: are or not, but it's certainly a possibility. I do 123 00:06:28,600 --> 00:06:31,520 Speaker 2: think there's still going to be a lot of turbulence 124 00:06:31,839 --> 00:06:34,479 Speaker 2: in the months to come as we start to try 125 00:06:34,480 --> 00:06:37,160 Speaker 2: to hopefully finalize these things. But I also think that 126 00:06:37,160 --> 00:06:40,039 Speaker 2: the Trump administration was a little bit taken aback by 127 00:06:40,080 --> 00:06:46,200 Speaker 2: how negatively the international markets responded to the tariff wars, 128 00:06:46,480 --> 00:06:51,440 Speaker 2: and therefore they strategically tried to cut these deals as 129 00:06:51,480 --> 00:06:54,640 Speaker 2: a way to stop the turbulence. They're not stupid. They 130 00:06:54,680 --> 00:06:57,280 Speaker 2: realized that you had a falling dollar, hat a falling 131 00:06:57,320 --> 00:07:00,040 Speaker 2: stock market. You had a lot of factories in the 132 00:07:00,440 --> 00:07:03,520 Speaker 2: which were only running at fifty percent capacity because they 133 00:07:03,520 --> 00:07:06,560 Speaker 2: couldn't get the inputs and the raw materials they needed 134 00:07:06,600 --> 00:07:10,120 Speaker 2: to produce their products. Hopefully the worst of the turbulence 135 00:07:10,200 --> 00:07:13,440 Speaker 2: is over. I'm still hopeful that at the end of 136 00:07:13,480 --> 00:07:15,960 Speaker 2: the day, which would be in the next say, six months, 137 00:07:16,000 --> 00:07:18,480 Speaker 2: that we're going to see freer and fairer trade. In 138 00:07:18,480 --> 00:07:23,040 Speaker 2: other words, I do think that these other nations, the Europeans, 139 00:07:23,400 --> 00:07:27,600 Speaker 2: the Koreans, India, Japan, are going to have to lower 140 00:07:27,640 --> 00:07:30,239 Speaker 2: their terrifts, and Trump is kind of flexing our muscle 141 00:07:30,800 --> 00:07:33,320 Speaker 2: as a way to force these countries to do that. 142 00:07:34,080 --> 00:07:38,440 Speaker 3: Josh, you and nodding when we're talking about irrational exuberance. 143 00:07:38,600 --> 00:07:41,760 Speaker 1: I think Trump has shifted the conversation a lot here, right, So, 144 00:07:41,800 --> 00:07:44,240 Speaker 1: even when he's retreating back to levels that when he 145 00:07:44,320 --> 00:07:47,840 Speaker 1: said them campaign right were I popping to people, he 146 00:07:47,920 --> 00:07:50,200 Speaker 1: talked about ten percent global tariffs and maybe a sixty 147 00:07:50,240 --> 00:07:53,120 Speaker 1: percent tariff on China. In the campaign. He's sort of 148 00:07:53,160 --> 00:07:56,960 Speaker 1: generally in the ballpark of that. So I think I 149 00:07:57,000 --> 00:07:59,160 Speaker 1: would just say a couple points. Steve, I'm sure would 150 00:07:59,160 --> 00:08:03,760 Speaker 1: agree with the first one. Trump loves tariffs. Some people 151 00:08:03,800 --> 00:08:07,000 Speaker 1: are trying to parse the logic and strategy, and there 152 00:08:07,080 --> 00:08:09,480 Speaker 1: might be some, but the guy just likes them. He 153 00:08:09,560 --> 00:08:12,280 Speaker 1: talks about them both as a revenue tool. He talked 154 00:08:12,280 --> 00:08:15,520 Speaker 1: about them as an incentive to push things back, and 155 00:08:15,600 --> 00:08:19,520 Speaker 1: when business groups who've been very silent comparatively throughout the 156 00:08:19,520 --> 00:08:22,600 Speaker 1: process of this come to him and say, our factories 157 00:08:22,680 --> 00:08:25,160 Speaker 1: in the American heartland cannot get their inputs right now 158 00:08:25,200 --> 00:08:28,200 Speaker 1: because right right they just don't seem particularly a responsive, 159 00:08:28,200 --> 00:08:31,920 Speaker 1: at least publicly to those concerns. So he likes tariffs. 160 00:08:31,920 --> 00:08:34,000 Speaker 1: And the other thing that I would mention is like, 161 00:08:35,160 --> 00:08:38,240 Speaker 1: there's more to come still right now as we right 162 00:08:38,280 --> 00:08:42,280 Speaker 1: we've got these outstanding two three two investigations. We're expecting 163 00:08:42,320 --> 00:08:45,720 Speaker 1: those tariffs speak of like, you know, exuberance. When he 164 00:08:46,080 --> 00:08:49,880 Speaker 1: exempted so many consumer goods, particularly in China from that 165 00:08:50,000 --> 00:08:51,840 Speaker 1: China tariff, including you know, I. 166 00:08:51,720 --> 00:08:54,000 Speaker 3: Feel like the electronics electronics, right. 167 00:08:54,760 --> 00:08:56,720 Speaker 1: The stated reason for that is because he plans to 168 00:08:56,760 --> 00:08:59,040 Speaker 1: hit them with a different caraff which seems like it 169 00:08:59,040 --> 00:09:00,960 Speaker 1: will be twenty five percent, if only because that's what 170 00:09:00,960 --> 00:09:03,040 Speaker 1: every other sectoral tariff has been, which of course is 171 00:09:03,120 --> 00:09:06,120 Speaker 1: higher than the current ten percent pause level on China. 172 00:09:06,200 --> 00:09:09,040 Speaker 1: So it's it's a break. But he's planning on hitting 173 00:09:09,080 --> 00:09:13,480 Speaker 1: these industries with that semiconducted tariff, a lumber tariff, copper 174 00:09:13,520 --> 00:09:16,200 Speaker 1: tariff is still to come. These things are still coming 175 00:09:16,240 --> 00:09:19,360 Speaker 1: down the pipe here, and so I think that people 176 00:09:19,440 --> 00:09:22,560 Speaker 1: who are looking at this as the sort of level 177 00:09:22,640 --> 00:09:26,840 Speaker 1: set moment. Secretary Beson of course talked about ten percent 178 00:09:26,880 --> 00:09:29,080 Speaker 1: as a floor. He's also talked about those April second 179 00:09:29,160 --> 00:09:32,600 Speaker 1: numbers as a ceiling if people don't de escalate. But 180 00:09:32,640 --> 00:09:34,760 Speaker 1: there's other stuff to come in other streams, and the 181 00:09:34,800 --> 00:09:37,400 Speaker 1: overall effect of tariff it is probably going to go up, 182 00:09:37,679 --> 00:09:39,280 Speaker 1: not damp from where it is today. 183 00:09:40,080 --> 00:09:42,280 Speaker 4: Well, I'm getting dizzy from all these numbers you're throwing 184 00:09:42,400 --> 00:09:45,800 Speaker 4: top of the different rafy. Oh he's a different thing. 185 00:09:46,000 --> 00:09:48,480 Speaker 4: And actually there's a serious point here though, and you're 186 00:09:48,520 --> 00:09:51,679 Speaker 4: quite right, Trump has a different view of tariffs than say, 187 00:09:51,679 --> 00:09:54,640 Speaker 4: a free trader like I do what he wants to do. 188 00:09:54,720 --> 00:09:57,679 Speaker 4: And I think there is something to this as an American, 189 00:09:58,040 --> 00:10:00,440 Speaker 4: which is that for the first one hundred years of 190 00:10:00,440 --> 00:10:03,240 Speaker 4: our country or more, we did not have an income tax, 191 00:10:03,559 --> 00:10:05,880 Speaker 4: you know, and we made a big mistake in nineteen 192 00:10:05,920 --> 00:10:08,079 Speaker 4: sixteen we adopted an income tax. I think that was 193 00:10:08,120 --> 00:10:10,840 Speaker 4: one of our greatest mistakes as a nation. And what 194 00:10:10,880 --> 00:10:13,520 Speaker 4: Trump is saying is, wouldn't it be better if our 195 00:10:13,559 --> 00:10:16,640 Speaker 4: tax system was through tarifsts, not taxes, income taxing? And 196 00:10:16,640 --> 00:10:18,360 Speaker 4: he's right, yes, that would be better. 197 00:10:18,720 --> 00:10:21,760 Speaker 2: Income taxes have very negative effects on the economy, much 198 00:10:21,760 --> 00:10:24,400 Speaker 2: more so than terrorists do. And so what he wants 199 00:10:24,440 --> 00:10:28,360 Speaker 2: to do is he wants to reduce the taxes that 200 00:10:28,400 --> 00:10:31,360 Speaker 2: are imposed on things that are made in Michigan or 201 00:10:31,440 --> 00:10:34,840 Speaker 2: Maine or Montana and increase the taxes on things that 202 00:10:34,920 --> 00:10:38,360 Speaker 2: are made in China or Japan and Korea and other nations. 203 00:10:38,679 --> 00:10:40,840 Speaker 2: And as American, yeah, that seems to make a lot 204 00:10:40,880 --> 00:10:43,200 Speaker 2: of sense. Why would we punish our own producers. Why 205 00:10:43,240 --> 00:10:45,240 Speaker 2: not put a higher tax on the things that are 206 00:10:45,240 --> 00:10:47,679 Speaker 2: coming into the country. And Trump is also right, by 207 00:10:47,679 --> 00:10:49,400 Speaker 2: the way, that for the first one hundred and twenty 208 00:10:49,440 --> 00:10:51,720 Speaker 2: five years of our country. That's essentially how we tax. 209 00:10:52,240 --> 00:10:55,559 Speaker 2: Now that being said, one of the things I object 210 00:10:55,640 --> 00:10:59,480 Speaker 2: to about the Trump strategy is exactly kind of embedded 211 00:10:59,480 --> 00:11:02,880 Speaker 2: in your question. You mentioned ten different teriff rates, and 212 00:11:03,080 --> 00:11:05,480 Speaker 2: I don't like this idea of picking winners and losers. 213 00:11:05,600 --> 00:11:07,679 Speaker 2: If we're going to have a terrraff policy, let's just 214 00:11:07,679 --> 00:11:10,560 Speaker 2: have a fifteen percent across the board tariff import tariff. 215 00:11:10,760 --> 00:11:13,560 Speaker 2: Anytime something comes in the United States, you're going to 216 00:11:13,559 --> 00:11:15,959 Speaker 2: pay a tax on it. I don't like this idea 217 00:11:15,960 --> 00:11:17,960 Speaker 2: of saying, Okay, well we like this industry, we're going 218 00:11:18,000 --> 00:11:20,199 Speaker 2: to protect that protect that industry. And by the way, 219 00:11:20,240 --> 00:11:21,960 Speaker 2: if you get a meeting in the White House, we 220 00:11:22,000 --> 00:11:24,320 Speaker 2: could lower your terraff for you. I don't think that's 221 00:11:24,400 --> 00:11:26,360 Speaker 2: the way tax system should work. 222 00:11:26,559 --> 00:11:28,280 Speaker 3: Steve, you just touched on it. And of course, the 223 00:11:28,320 --> 00:11:31,480 Speaker 3: suspicion is that one of the reasons that he not 224 00:11:31,679 --> 00:11:36,679 Speaker 3: only likes tariffs which are changeable by executive action and 225 00:11:36,760 --> 00:11:41,760 Speaker 3: not only by Congress, but specifically these very variable country 226 00:11:41,760 --> 00:11:44,959 Speaker 3: by country tariffs, even company by company in some cases 227 00:11:45,240 --> 00:11:48,680 Speaker 3: in effect, is the power that it gives Donald Trump 228 00:11:48,720 --> 00:11:51,720 Speaker 3: to be doing these favors for people and doing deals. 229 00:11:51,760 --> 00:11:53,800 Speaker 3: I mean, knowing him as you do, is that a 230 00:11:53,840 --> 00:11:56,079 Speaker 3: big part of what he likes about this strategy. 231 00:11:56,480 --> 00:11:58,560 Speaker 2: I can really answer that, but I will say this 232 00:11:58,640 --> 00:12:00,640 Speaker 2: that I don't think it's a good way to make policy. 233 00:12:01,160 --> 00:12:03,880 Speaker 2: Let's say that Kamala Harris had won the election, and 234 00:12:03,960 --> 00:12:06,120 Speaker 2: let's say she said, Oh, you know, we have to 235 00:12:06,120 --> 00:12:07,840 Speaker 2: worry about climate change, so we're going to put all 236 00:12:07,840 --> 00:12:11,280 Speaker 2: these tariffs. I'm just going to unilaterly declare an emergency 237 00:12:11,280 --> 00:12:13,000 Speaker 2: and we're going to have tariffs on this. That the 238 00:12:13,040 --> 00:12:15,640 Speaker 2: other thing, Well, the Republicans would be going crazy. Oh, 239 00:12:15,800 --> 00:12:18,880 Speaker 2: she'd the dictator. She can't just impose this tax. Look, 240 00:12:19,000 --> 00:12:22,439 Speaker 2: our constitution very clear taxes start in the House of Representatives. 241 00:12:22,440 --> 00:12:25,800 Speaker 2: That's in our constitution. And so what Congress has done 242 00:12:25,960 --> 00:12:29,920 Speaker 2: is essentially delegated this so called emergency powers to the president. 243 00:12:30,160 --> 00:12:32,520 Speaker 2: And I don't think that's good for our system of government. 244 00:12:32,559 --> 00:12:34,960 Speaker 2: I think that these should be approved by Congress. It's 245 00:12:35,080 --> 00:12:38,560 Speaker 2: just a matter of accountability. I'd probably a minority of 246 00:12:38,559 --> 00:12:41,600 Speaker 2: my party on that, because Trump is a very powerful 247 00:12:41,640 --> 00:12:44,360 Speaker 2: president and the party does what he wants. But I'm 248 00:12:44,400 --> 00:12:46,240 Speaker 2: not so sure in the long run. So that's a 249 00:12:46,240 --> 00:12:47,600 Speaker 2: good way to make tax policies. 250 00:12:48,320 --> 00:12:50,400 Speaker 1: You're not alone entirely in your party on that right, 251 00:12:50,480 --> 00:12:53,920 Speaker 1: including Chuck Grassley and other Republican senators have lent their 252 00:12:53,960 --> 00:12:57,240 Speaker 1: name to a bill reclaiming some of this tariff power. 253 00:12:57,280 --> 00:13:01,000 Speaker 1: Trump has really pushed the limits or tested them, shall 254 00:13:01,040 --> 00:13:04,680 Speaker 1: we say, like what a president can do unilaterally on tariffs? 255 00:13:05,000 --> 00:13:06,439 Speaker 1: By the way, I think there is a little kinton 256 00:13:06,480 --> 00:13:09,280 Speaker 1: his strategy here because he's using AEPA to do a 257 00:13:09,280 --> 00:13:12,200 Speaker 1: lot of these across the board country tariffs. Trade lawyers 258 00:13:12,240 --> 00:13:15,600 Speaker 1: say that that is flimsier than other ways, like the 259 00:13:15,640 --> 00:13:18,080 Speaker 1: two three two tariffs are the three oh one tariffs, 260 00:13:18,160 --> 00:13:21,040 Speaker 1: Those are more bulletproof, and those are the ones he's 261 00:13:21,120 --> 00:13:23,960 Speaker 1: using for the sectoral tariffs on steel cars, that kind 262 00:13:24,000 --> 00:13:24,400 Speaker 1: of thing. 263 00:13:24,440 --> 00:13:26,000 Speaker 3: Stephen, I know you want to come in, but just 264 00:13:26,000 --> 00:13:28,040 Speaker 3: in case people didn't know, so that IPA, that's the 265 00:13:28,120 --> 00:13:32,080 Speaker 3: International Emergency Economic Powers Act, which lets the president impose 266 00:13:32,200 --> 00:13:36,319 Speaker 3: tariffs in times of economic emergency. So he's citing an 267 00:13:36,360 --> 00:13:39,040 Speaker 3: emergency relating to the trade deficit. 268 00:13:39,600 --> 00:13:41,800 Speaker 2: Let me just say one thing in response to that 269 00:13:42,240 --> 00:13:45,000 Speaker 2: both of your questions, which is that to defend Trump 270 00:13:45,040 --> 00:13:47,480 Speaker 2: on this for a moment, and again I'm not a 271 00:13:47,480 --> 00:13:50,000 Speaker 2: big fan of the terror policy, but it is true. 272 00:13:50,080 --> 00:13:52,480 Speaker 2: I mean when Trump ran for president, he ran around 273 00:13:52,480 --> 00:13:54,640 Speaker 2: the country saying, tariff is my favorite word, and if 274 00:13:54,640 --> 00:13:56,640 Speaker 2: you will like me, I'm going to put these tariffs on. 275 00:13:56,920 --> 00:13:59,560 Speaker 2: And guess what middle class blue collar America kind of 276 00:13:59,640 --> 00:14:02,920 Speaker 2: like that idea. They are concerned about the factories leaving 277 00:14:03,000 --> 00:14:06,040 Speaker 2: and the jobs leaving. One of my concerns is, you know, 278 00:14:06,080 --> 00:14:08,760 Speaker 2: with the terror strategy, is are we chasing the jobs 279 00:14:08,760 --> 00:14:10,800 Speaker 2: of the twentieth century not the jobs of the twenty 280 00:14:10,840 --> 00:14:13,320 Speaker 2: first century, because let's face it, in ten years, there 281 00:14:13,360 --> 00:14:15,920 Speaker 2: won't be factory jobs. Everything will be done by robots. 282 00:14:15,920 --> 00:14:17,720 Speaker 2: So you know, I want to make sure that we 283 00:14:17,800 --> 00:14:21,200 Speaker 2: have an economy that's retro fitted for you know, the 284 00:14:21,240 --> 00:14:24,560 Speaker 2: twenty twenties and twenty thirties, not for the nineteen twenties 285 00:14:24,560 --> 00:14:25,440 Speaker 2: and nineteen thirties. 286 00:14:26,320 --> 00:14:29,280 Speaker 3: Let's get onto the tax bill, because of course, journalists, 287 00:14:29,320 --> 00:14:31,440 Speaker 3: we're also kind of turning our eyes to the next 288 00:14:31,440 --> 00:14:33,880 Speaker 3: big thing. You know, US China trade will all over 289 00:14:33,920 --> 00:14:36,160 Speaker 3: at least for a couple of months. So now we're 290 00:14:36,200 --> 00:14:38,960 Speaker 3: focused on the tax bill that we saw come through 291 00:14:39,040 --> 00:14:43,240 Speaker 3: late on Monday this week, and it has a lot 292 00:14:43,240 --> 00:14:46,440 Speaker 3: of the things that Donald Trump campaigned, or not just 293 00:14:46,560 --> 00:14:50,280 Speaker 3: making those individual tax cuts that you mentioned, Steve permanent, 294 00:14:50,400 --> 00:14:54,080 Speaker 3: but some of the other measures, like eliminating some of 295 00:14:54,120 --> 00:14:57,960 Speaker 3: the taxes on tips and other things. Using some fairly 296 00:14:58,400 --> 00:15:02,760 Speaker 3: creative or at least non stand accounting, it supposedly adds 297 00:15:02,800 --> 00:15:06,800 Speaker 3: to the deficit three point seven trillion dollars over ten years. 298 00:15:08,080 --> 00:15:10,360 Speaker 3: I know you're a fan of doing many of those things, 299 00:15:10,360 --> 00:15:13,080 Speaker 3: but you're also a fan of smaller government and lower deficits. 300 00:15:13,080 --> 00:15:15,320 Speaker 3: So I just wonder how you're feeling about that big, 301 00:15:15,360 --> 00:15:17,360 Speaker 3: beautiful bill. 302 00:15:17,520 --> 00:15:20,160 Speaker 2: Well, first of all, it's this just so your audience 303 00:15:20,320 --> 00:15:23,200 Speaker 2: understands failure is not an option here, because if this 304 00:15:23,280 --> 00:15:26,520 Speaker 2: does not get done by December thirty, First, you know, 305 00:15:26,560 --> 00:15:29,760 Speaker 2: we're facing the biggest tax increase in American history. Every 306 00:15:29,800 --> 00:15:32,520 Speaker 2: middle class family would pay more, every small business would 307 00:15:32,520 --> 00:15:35,560 Speaker 2: pay more taxes, a lot of our corporations would pay more. 308 00:15:35,600 --> 00:15:38,480 Speaker 2: So they have to get this done. And most of 309 00:15:38,520 --> 00:15:42,440 Speaker 2: the tax bill is really just extending what's already in law. 310 00:15:42,960 --> 00:15:45,480 Speaker 2: And so now you're right, there are other things that 311 00:15:45,520 --> 00:15:48,840 Speaker 2: Trump wants to add to that that no tax on tips, 312 00:15:48,840 --> 00:15:51,800 Speaker 2: which is actually from a fiscal point of view, pretty irrelevant. 313 00:15:52,200 --> 00:15:54,280 Speaker 2: You don't raise a lot might be taxing tips anyway, 314 00:15:54,560 --> 00:15:56,440 Speaker 2: but you know, not taxes not. 315 00:15:56,560 --> 00:15:58,440 Speaker 3: Now you may find you use a lot of money 316 00:15:58,440 --> 00:16:00,800 Speaker 3: when everyone decides their entire commentaries. 317 00:16:00,920 --> 00:16:04,040 Speaker 2: Everywho's going to be a tip to boy because taxes 318 00:16:04,080 --> 00:16:06,240 Speaker 2: do affect people's behavior. But one of the ones that 319 00:16:06,280 --> 00:16:09,960 Speaker 2: I think is most important is the fifteen percent tax 320 00:16:10,040 --> 00:16:12,760 Speaker 2: rate for businesses. You know, he wants to cut our 321 00:16:12,800 --> 00:16:15,080 Speaker 2: corporate tax rate to fifteen percent, which I think would 322 00:16:15,080 --> 00:16:18,640 Speaker 2: be enormously beneficial from a strategic point of view. So 323 00:16:18,800 --> 00:16:20,920 Speaker 2: I'm a big fan of this bill. I don't believe 324 00:16:21,040 --> 00:16:23,400 Speaker 2: the numbers that you cited. I mean, I know those 325 00:16:23,400 --> 00:16:25,720 Speaker 2: are the right numbers, but I don't believe that it's 326 00:16:25,760 --> 00:16:27,840 Speaker 2: going to cost money. And I know that because the 327 00:16:27,920 --> 00:16:30,520 Speaker 2: same people forecast is going to lose three trillion or 328 00:16:30,520 --> 00:16:32,520 Speaker 2: whatever the number is. These are the same people who 329 00:16:32,520 --> 00:16:34,880 Speaker 2: said when we passed the tax bill in twenty seventeen, 330 00:16:35,320 --> 00:16:38,120 Speaker 2: you know, that could cost several trillion dollars, and we 331 00:16:38,240 --> 00:16:40,240 Speaker 2: now know just from a look back that they were 332 00:16:40,280 --> 00:16:43,760 Speaker 2: wrong by about one point five trillion. Because our tax 333 00:16:43,920 --> 00:16:48,800 Speaker 2: estimators always overestimate the revenue losses from cutting tax rates, 334 00:16:48,800 --> 00:16:51,680 Speaker 2: and they always overestimate the revenues that are going to 335 00:16:51,680 --> 00:16:54,240 Speaker 2: gain by raising taxes because they use a kind of 336 00:16:54,280 --> 00:16:57,960 Speaker 2: static analysis that doesn't take into account. You know, when 337 00:16:57,960 --> 00:17:00,400 Speaker 2: you cut taxes, good things for happen for the enemy. 338 00:17:00,960 --> 00:17:03,360 Speaker 3: Josh, I know you were. You were also looking at 339 00:17:03,360 --> 00:17:05,480 Speaker 3: some of the details of this bill, and also, I 340 00:17:05,480 --> 00:17:08,360 Speaker 3: guess as a sign of a kind of relative influence 341 00:17:08,400 --> 00:17:10,480 Speaker 3: of the president over his party. 342 00:17:11,880 --> 00:17:13,760 Speaker 1: Well, the fact that it's one big, beautiful bill is 343 00:17:13,760 --> 00:17:16,479 Speaker 1: itself a sign of the influence of the party because they, 344 00:17:16,720 --> 00:17:18,760 Speaker 1: you know, going back a couple of months, Republicans were 345 00:17:18,760 --> 00:17:21,200 Speaker 1: divided on that, namely, the House and the Senate were 346 00:17:21,240 --> 00:17:23,879 Speaker 1: divided on that. So Jason Smith, the ways means Chairman, 347 00:17:23,920 --> 00:17:26,000 Speaker 1: has come out with this bill that does maintain several 348 00:17:26,040 --> 00:17:31,119 Speaker 1: of Trump's priorities, including on taxation of tips, social Security one, 349 00:17:31,160 --> 00:17:34,840 Speaker 1: on auto loan interest deductibility, which is a one that 350 00:17:34,880 --> 00:17:37,800 Speaker 1: Trump loves, which allows you to write off the interest 351 00:17:37,800 --> 00:17:41,280 Speaker 1: payments on your car if you buy an American made car. 352 00:17:41,400 --> 00:17:44,760 Speaker 1: So that's in there. What isn't in there, interestingly, is 353 00:17:44,800 --> 00:17:47,200 Speaker 1: the very thing Steve mentioned that Trump has been calling 354 00:17:47,240 --> 00:17:51,400 Speaker 1: for the fifteen percent corporate tax rate on American manufacturers 355 00:17:51,560 --> 00:17:54,560 Speaker 1: down from the current twenty one percent. Trump had talked 356 00:17:54,560 --> 00:17:57,360 Speaker 1: about that. He'd also talked about lowering the twenty one 357 00:17:57,359 --> 00:18:01,200 Speaker 1: to twenty regardless of whether you manufacturing in the US. Instead, 358 00:18:01,640 --> 00:18:04,879 Speaker 1: they're doing a one hundred percent depreciation, which is essentially 359 00:18:04,960 --> 00:18:07,120 Speaker 1: a big carrot on a stick to build new factories 360 00:18:07,160 --> 00:18:11,399 Speaker 1: in America. The manufacturers group seem jazzed about that. You know, 361 00:18:11,400 --> 00:18:13,560 Speaker 1: they'll take it. They don't seem too concerned about the 362 00:18:13,640 --> 00:18:15,800 Speaker 1: lack of the corporate tax rate. But they are having 363 00:18:15,840 --> 00:18:18,640 Speaker 1: to pick and choose. And remember, as we sit here, 364 00:18:18,680 --> 00:18:21,880 Speaker 1: the US budget devicit is hovering it a shade under 365 00:18:21,920 --> 00:18:24,960 Speaker 1: two trillion annually, something like twenty one trillion over the 366 00:18:25,000 --> 00:18:27,480 Speaker 1: ten year budget window. And when we talk about three 367 00:18:27,520 --> 00:18:29,600 Speaker 1: point seven trillion, that's over that ten years for the 368 00:18:29,600 --> 00:18:32,439 Speaker 1: people that might be listening to us outside of the US, 369 00:18:32,800 --> 00:18:35,040 Speaker 1: And so you know, we're talking about a quite wide 370 00:18:35,240 --> 00:18:37,840 Speaker 1: budget gap over the coming decade. Now. Trump wants to 371 00:18:37,920 --> 00:18:40,880 Speaker 1: narrow that through the deregulation that Steve mentioned. He wants 372 00:18:40,920 --> 00:18:43,639 Speaker 1: to narrow that of course with tariff revenue. But you 373 00:18:43,720 --> 00:18:47,040 Speaker 1: still got a significant, significant budget shortfall, and of course 374 00:18:47,119 --> 00:18:49,919 Speaker 1: that's why Secretary Besson is watching that ten year to 375 00:18:49,960 --> 00:18:52,320 Speaker 1: try to see how markets are going to be digesting all. 376 00:18:52,200 --> 00:18:53,680 Speaker 3: Of US, which has not come down. 377 00:18:53,880 --> 00:18:55,439 Speaker 1: It has come down a bit if you've measured back 378 00:18:55,440 --> 00:18:57,439 Speaker 1: to January twentieth, when Trump took office, but it has 379 00:18:57,480 --> 00:19:00,760 Speaker 1: been rising pretty steadily here for a while. There are 380 00:19:00,760 --> 00:19:03,280 Speaker 1: concerns clearly in the bond market about the US direction 381 00:19:03,400 --> 00:19:03,800 Speaker 1: right now. 382 00:19:04,240 --> 00:19:06,679 Speaker 3: Steve, you mentioned that the numbers will turn out to 383 00:19:06,680 --> 00:19:10,000 Speaker 3: be better than expected, but if you look at really, 384 00:19:10,000 --> 00:19:15,680 Speaker 3: on any assumptions, the US debt relative to GDP is 385 00:19:16,480 --> 00:19:19,399 Speaker 3: looking pretty unsustainable. I mean, the line keeps going up 386 00:19:19,440 --> 00:19:21,600 Speaker 3: no matter what you make. You know, almost any assumption 387 00:19:21,680 --> 00:19:24,320 Speaker 3: you would make, not least because of the higher cost 388 00:19:24,400 --> 00:19:26,040 Speaker 3: of money that we have now, even if it doesn't 389 00:19:26,080 --> 00:19:27,560 Speaker 3: go up so much from here. 390 00:19:28,080 --> 00:19:30,800 Speaker 2: Well, there's no doubt about it that our national debt 391 00:19:31,000 --> 00:19:33,479 Speaker 2: is a clear and present danger, no question about it. 392 00:19:33,560 --> 00:19:36,280 Speaker 2: And you're also right that you know we're vulnerable to 393 00:19:36,320 --> 00:19:38,760 Speaker 2: an interest rate shot. As the world's biggest borrower, every 394 00:19:38,760 --> 00:19:42,040 Speaker 2: time interest rates go up, our borrowing expenses go up. 395 00:19:42,200 --> 00:19:44,879 Speaker 2: But I'm a growth hoart. What I care most about, 396 00:19:44,920 --> 00:19:49,240 Speaker 2: that's the overriding factor that drives all these numbers is jobs. 397 00:19:49,280 --> 00:19:53,840 Speaker 2: Economic growth and prosperity. And so what I've told the President, 398 00:19:53,880 --> 00:19:57,720 Speaker 2: I've told the speak of the House in Republicans, anything 399 00:19:57,760 --> 00:20:01,600 Speaker 2: that makes the economy grow faster, do you do it? 400 00:20:01,680 --> 00:20:01,959 Speaker 3: Do it? 401 00:20:02,000 --> 00:20:02,320 Speaker 1: Do it. 402 00:20:02,520 --> 00:20:04,919 Speaker 2: Anything that makes the economy grow slower is going to 403 00:20:04,920 --> 00:20:08,520 Speaker 2: make our debt situation worse. So I want Republicans to 404 00:20:08,560 --> 00:20:11,720 Speaker 2: be focused on one thing, getting the keeping our economic 405 00:20:11,760 --> 00:20:13,880 Speaker 2: growth rate, which has been hovering at about one point 406 00:20:13,960 --> 00:20:16,520 Speaker 2: five one point six percent, get it back to the 407 00:20:16,560 --> 00:20:18,640 Speaker 2: three to three and a half percent growth rate, which 408 00:20:18,680 --> 00:20:22,440 Speaker 2: is our America's you know, normal growth rate. And if 409 00:20:22,480 --> 00:20:25,280 Speaker 2: you do that, if you get that economic growth rate 410 00:20:25,359 --> 00:20:28,560 Speaker 2: and that productivity up, then guess what that debt that 411 00:20:28,560 --> 00:20:31,159 Speaker 2: you're talking about is a share of our economy. It 412 00:20:31,200 --> 00:20:33,560 Speaker 2: doesn't go up from you know, currently one hundred percent 413 00:20:33,560 --> 00:20:36,119 Speaker 2: of GDP to two hundred percent of GDP, it actually 414 00:20:36,160 --> 00:20:40,000 Speaker 2: starts to fall. So growth is everything. We have a 415 00:20:40,000 --> 00:20:43,600 Speaker 2: president who's hyper focused on growing the economy, bringing jobs 416 00:20:43,640 --> 00:20:46,800 Speaker 2: back home, making our economy as efficient as possible through 417 00:20:46,840 --> 00:20:50,480 Speaker 2: things like deregulation. We're going to produce a lot more oil, gas, 418 00:20:50,520 --> 00:20:52,479 Speaker 2: and coal, so we can be the number one producer 419 00:20:52,520 --> 00:20:55,120 Speaker 2: of energy in the world, and all of those things 420 00:20:55,160 --> 00:20:57,520 Speaker 2: I think are good for growth, good for jobs, and 421 00:20:57,560 --> 00:21:01,560 Speaker 2: we'll make our deficit situation less hazardous in the future. 422 00:21:02,320 --> 00:21:04,480 Speaker 3: Okay, but if you think of just the balance of 423 00:21:04,680 --> 00:21:06,840 Speaker 3: policies and where the emphasis has been in the last 424 00:21:07,040 --> 00:21:09,040 Speaker 3: few months, do you feel like there has been enough 425 00:21:09,040 --> 00:21:10,919 Speaker 3: focus on growth? A lot of the growth rate that 426 00:21:10,960 --> 00:21:16,000 Speaker 3: you talked about just now came from immigration, came from 427 00:21:16,040 --> 00:21:18,320 Speaker 3: the tax cuts that we're just making permanent. As you 428 00:21:18,320 --> 00:21:20,840 Speaker 3: pointed out, there's no change of policy, so it's just 429 00:21:20,960 --> 00:21:22,960 Speaker 3: keeping things as they are, which doesn't necessarily give you 430 00:21:23,000 --> 00:21:26,639 Speaker 3: an extra burst. And also from some of the trade 431 00:21:26,680 --> 00:21:29,280 Speaker 3: that has happened back and forth between Mexico and Canada 432 00:21:29,359 --> 00:21:31,040 Speaker 3: and other things, some of these industries that are now 433 00:21:31,119 --> 00:21:33,359 Speaker 3: going to be disrupted by the tariff. So if you 434 00:21:33,359 --> 00:21:36,600 Speaker 3: think about deregulation, you know, has there been enough focus 435 00:21:36,640 --> 00:21:36,840 Speaker 3: on that? 436 00:21:37,080 --> 00:21:40,119 Speaker 2: As I said earlier, I really do believe if we 437 00:21:40,160 --> 00:21:42,440 Speaker 2: can get these trade deals done, if we can get 438 00:21:42,440 --> 00:21:45,639 Speaker 2: the tax cut down, those two things, if that happen 439 00:21:45,840 --> 00:21:48,600 Speaker 2: in the next three to six months, and you heard 440 00:21:48,600 --> 00:21:51,280 Speaker 2: it first here on your show on Bloomberg, We're going 441 00:21:51,320 --> 00:21:53,679 Speaker 2: to see the biggest boom you ever saw. You're going 442 00:21:53,720 --> 00:21:55,600 Speaker 2: to see the stock marker go through the roof, you're 443 00:21:55,600 --> 00:21:57,879 Speaker 2: going to see the United States a sucking capital in 444 00:21:57,960 --> 00:22:00,359 Speaker 2: from the rest of the world has happened like in 445 00:22:00,400 --> 00:22:03,919 Speaker 2: the Reagan era. So I'm bullish. I'm bullish out America 446 00:22:04,040 --> 00:22:07,400 Speaker 2: right now now that those are the two big ifs though. 447 00:22:07,600 --> 00:22:10,240 Speaker 2: If we can get the trade deals done and if 448 00:22:10,240 --> 00:22:12,280 Speaker 2: we can get the tax cut done, those are the 449 00:22:12,320 --> 00:22:16,040 Speaker 2: two highest priorities for Trump. And I wouldn't better gun Stem. 450 00:22:16,200 --> 00:22:18,800 Speaker 3: You have always been someone who was focused on the 451 00:22:18,800 --> 00:22:20,679 Speaker 3: business agenda and the agenda for growth, and you just 452 00:22:20,720 --> 00:22:24,080 Speaker 3: talked about it here. The judgments that investors have made, 453 00:22:24,160 --> 00:22:25,760 Speaker 3: even as the S and P has gone back up 454 00:22:25,760 --> 00:22:27,960 Speaker 3: in the last few weeks, is the dollar is still 455 00:22:28,000 --> 00:22:31,840 Speaker 3: weaker and the other markets are actually doing better because 456 00:22:31,880 --> 00:22:35,359 Speaker 3: they think fundamentally the US is going to go backwards 457 00:22:35,400 --> 00:22:37,520 Speaker 3: with these policies that are trying to take them out 458 00:22:37,560 --> 00:22:40,159 Speaker 3: of a globally integrated economy. Do you not worry that 459 00:22:40,240 --> 00:22:43,680 Speaker 3: when the dust settles, you might be okay, but you're 460 00:22:43,680 --> 00:22:45,320 Speaker 3: still going to be a step back from where you 461 00:22:45,320 --> 00:22:47,879 Speaker 3: would have been because of this effort to pull you 462 00:22:47,960 --> 00:22:49,879 Speaker 3: out of an integrated global economy. 463 00:22:50,160 --> 00:22:52,159 Speaker 2: I do worry about that. And I think actually one 464 00:22:52,160 --> 00:22:54,040 Speaker 2: of the things that's that some of my friends in 465 00:22:54,040 --> 00:22:56,840 Speaker 2: the Trump administration not fully appreciate is one of the 466 00:22:56,880 --> 00:23:00,160 Speaker 2: things that's made the American account on me so strong 467 00:23:00,160 --> 00:23:02,639 Speaker 2: over the last forty years since you know, the running 468 00:23:02,680 --> 00:23:06,760 Speaker 2: of the Reagan era, is that we are are incredibly 469 00:23:06,840 --> 00:23:09,840 Speaker 2: globally integrated. And you know that, I think a lot 470 00:23:09,840 --> 00:23:12,920 Speaker 2: of people don't appreciate. You know why it is that 471 00:23:12,960 --> 00:23:16,359 Speaker 2: the factories here are being harmed by the terrorists because 472 00:23:16,480 --> 00:23:19,280 Speaker 2: actually this was supposed to bring jobs back to the 473 00:23:19,359 --> 00:23:22,560 Speaker 2: United States, and in fact instead that factories have had 474 00:23:22,600 --> 00:23:25,280 Speaker 2: to layoff workers because we you know, as I talked 475 00:23:25,400 --> 00:23:27,560 Speaker 2: one manufacturer said, look, I get we get our seal 476 00:23:27,600 --> 00:23:31,040 Speaker 2: from Japan, we get our we get our copper from Vietnam, 477 00:23:31,280 --> 00:23:34,280 Speaker 2: we get our parts from Mexico. We got our lumber 478 00:23:34,320 --> 00:23:37,359 Speaker 2: from Canada. So we are incredibly globally integrated. It makes 479 00:23:37,400 --> 00:23:40,360 Speaker 2: our economy very efficient, and we don't want to lose 480 00:23:40,359 --> 00:23:42,600 Speaker 2: that edge. And that's why we've got to get these 481 00:23:42,920 --> 00:23:46,439 Speaker 2: trade deals done in a way that benefits America but 482 00:23:46,560 --> 00:23:50,560 Speaker 2: also benefits global growth. And I can't guarantee it, but 483 00:23:50,680 --> 00:23:52,760 Speaker 2: I think over the next three to six monitor to 484 00:23:52,800 --> 00:23:56,240 Speaker 2: see a lot of improvement in the trade turmoil that 485 00:23:56,359 --> 00:23:58,080 Speaker 2: right now is dominating the markets. 486 00:23:58,160 --> 00:24:00,200 Speaker 3: Steven, we will remember that in a few months time. 487 00:24:00,240 --> 00:24:02,119 Speaker 3: Thank you very much for joining us. 488 00:24:03,240 --> 00:24:05,800 Speaker 2: And when I'm right, I watch you to help me 489 00:24:05,840 --> 00:24:06,440 Speaker 2: back on it. 490 00:24:07,119 --> 00:24:11,720 Speaker 3: We will any time. Josh, having interviewed him a million 491 00:24:11,800 --> 00:24:14,640 Speaker 3: years ago, he's always very enthusiastic and bullish, which makes 492 00:24:14,680 --> 00:24:17,399 Speaker 3: for a good interview. But when you're talking to people 493 00:24:18,320 --> 00:24:20,560 Speaker 3: in and around the White House and on the Hill, 494 00:24:20,800 --> 00:24:23,399 Speaker 3: are people feeling that bullish now that you've got some 495 00:24:23,520 --> 00:24:24,840 Speaker 3: of these trade deals under way. 496 00:24:25,400 --> 00:24:28,239 Speaker 1: I think Republicans have exhaled a little bit, but the 497 00:24:28,240 --> 00:24:31,600 Speaker 1: bullish thing is I think a step too far yet, 498 00:24:31,760 --> 00:24:35,320 Speaker 1: because the deals that we've seen have been pretty modest. 499 00:24:35,600 --> 00:24:37,560 Speaker 1: Some cans have been kicked down the road, and of 500 00:24:37,600 --> 00:24:41,640 Speaker 1: course big deals hang in the air. Steve talked about 501 00:24:41,720 --> 00:24:45,240 Speaker 1: Japan and South Korea. Those are really two big tests 502 00:24:45,720 --> 00:24:49,520 Speaker 1: because the UK deal had way few thornier issues than 503 00:24:49,640 --> 00:24:53,600 Speaker 1: those ones will. And you know, it's difficult to see 504 00:24:53,640 --> 00:24:56,520 Speaker 1: how a fundamental deal comes together if Trump wants to, 505 00:24:56,560 --> 00:24:59,359 Speaker 1: for instance, keep it twenty five percent auto tariff on 506 00:24:59,440 --> 00:25:02,800 Speaker 1: two crucial sectors for those two economies. And so I 507 00:25:02,800 --> 00:25:08,439 Speaker 1: think right now, the Republican complaints about this have quieted. 508 00:25:09,119 --> 00:25:12,840 Speaker 1: The sort of subtle momentum towards a bill to recapture 509 00:25:12,840 --> 00:25:16,480 Speaker 1: some of the tariff power in Congress has abated, and 510 00:25:16,520 --> 00:25:19,240 Speaker 1: the focus is on getting this tax bill passed. Bessen 511 00:25:19,480 --> 00:25:21,840 Speaker 1: talks about it the Treasury Secretary about three legs of 512 00:25:21,880 --> 00:25:25,639 Speaker 1: the stool, right, not only tariffs, but the tax cuts 513 00:25:25,680 --> 00:25:29,119 Speaker 1: and the deregulation. They're really racing to get these tax 514 00:25:29,160 --> 00:25:31,879 Speaker 1: cuts done by July fourth, by the way, right, so 515 00:25:31,880 --> 00:25:34,080 Speaker 1: we had Liberation Day on April second, we're going to 516 00:25:34,080 --> 00:25:38,200 Speaker 1: celebrate Independan's Day allegedly by signing a big tax cut package. Here, 517 00:25:38,640 --> 00:25:41,479 Speaker 1: they're sort of just biting their tongue and holding their 518 00:25:41,520 --> 00:25:44,440 Speaker 1: breath in a lot of cases that this is all 519 00:25:44,640 --> 00:25:47,639 Speaker 1: going to work out. But clearly there's unease, and I 520 00:25:47,640 --> 00:25:50,520 Speaker 1: should not leave any suggestion that I'm saying that some 521 00:25:50,640 --> 00:25:54,879 Speaker 1: revolt is coming. President Trump continues to have very strong 522 00:25:54,880 --> 00:25:59,120 Speaker 1: support in his party. People are not speaking out emphatically 523 00:25:59,160 --> 00:26:01,639 Speaker 1: against him. You get sort of comments about tariffs here 524 00:26:01,640 --> 00:26:04,880 Speaker 1: and there, but right now he's sort of full steam ahead. 525 00:26:05,440 --> 00:26:07,399 Speaker 3: Well, I guess we will see. I will certainly be 526 00:26:07,520 --> 00:26:09,080 Speaker 3: checking in with you and maybe we should check in 527 00:26:09,119 --> 00:26:11,399 Speaker 3: with Stephen Moore in a few months time see if 528 00:26:11,440 --> 00:26:15,040 Speaker 3: his bullish predictions have turned out. But Josh Wingo, thanks 529 00:26:15,119 --> 00:26:21,760 Speaker 3: very much, Thank you for having me, Thanks for listening 530 00:26:21,800 --> 00:26:24,040 Speaker 3: to Trump andomics from Bloomberg. It was hosted by me, 531 00:26:24,160 --> 00:26:27,240 Speaker 3: Stephanie Flanders, and I was joined by Bloomberg's Josh Wingrove 532 00:26:27,560 --> 00:26:33,399 Speaker 3: and the Heritage Foundation Stephen Moore. Trump and Noomics is 533 00:26:33,400 --> 00:26:36,040 Speaker 3: produced by Summer Sadi and Moses and Am with help 534 00:26:36,040 --> 00:26:40,000 Speaker 3: from Chris martinlu Tala Amadi and Amy Keen. Sound design 535 00:26:40,080 --> 00:26:43,400 Speaker 3: is by Robert Williams and special thanks to Jared Rudderman. 536 00:26:43,800 --> 00:26:47,560 Speaker 3: Brendan Francis Newnan is our executive producer. To help others 537 00:26:47,600 --> 00:26:50,880 Speaker 3: find the show, please rate and review it highly wherever 538 00:26:50,960 --> 00:26:52,080 Speaker 3: you find your podcasts.