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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: noon and five pm Eastern on Apple Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: Here on Tariff Tuesday, Welcome to the fastest show in politics.

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Speaker 2: It's the Tuesday edition of Balance of Power here on

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Speaker 2: Bloomberg Radio, on the satellite radio channel one twenty one,

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Speaker 2: and on YouTube, where you can find us right now

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Speaker 2: search Bloomberg Business News Live. As we count down to

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Speaker 2: the big speech nine ten pm Eastern, they tell us,

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Speaker 2: but things have a way of sliding when everybody wants

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Speaker 2: to handshake and a hug coming down the aisle. We

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Speaker 2: will have special coverage of the President's addressed to Congress

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Speaker 2: starting eight pm Eastern Time tonight on Bloomberg TV and

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Speaker 2: Radio on Tariff Tuesday. They took effect earlier today. The

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Speaker 2: President said this, as you heard live on Bloomberg yesterday,

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Speaker 2: twenty five percent tariffs on Canada and Mexico. Here is

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Speaker 2: the President of the United States.

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Speaker 3: Twenty five percent on Canada and twenty five percent on

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Speaker 3: Mexico and that'll start. So they're going to have to

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Speaker 3: have a tariffs so they can't come in and steal

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Speaker 3: our money and steal our jobs and take our factories

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Speaker 3: and take our businesses and expect not to be punished.

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Speaker 3: And they're being punished by tariffs.

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Speaker 2: Well they are as of now. Mexican President Claudia Scheinbaum says,

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Speaker 2: give me it till Sunday, having said we've got planned

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Speaker 2: BC and D ready. That's when countermeasures, as we reported

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Speaker 2: here at Bloomberg, will be announced. Canadian Prime Minister Justin

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Speaker 2: Trudeau not waiting around. In fact, he spoke a short

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Speaker 2: time ago as you heard live here on Bloomberg.

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Speaker 4: Let's listen, there is absolutely no justification or need whatsoever

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Speaker 4: for these tariffs today. Now, the legal text your government

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Speaker 4: is using to bring in these tariffs is that Canada

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Speaker 4: is apparently unwilling to help in the fight against illegal fentanyl. Well,

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Speaker 4: that is totally false.

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Speaker 2: Really interesting to hear the Commerce Secretary Howard Lutnick on

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Speaker 2: the other network this morning saying this is not a

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Speaker 2: trade war, this is a drug war. Resetting the trade

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Speaker 2: policy is what comes April second. The reciprocal tariffs we're

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Speaker 2: talking about if this is all about fentanyl, we know

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Speaker 2: that Canada and Mexico are into very different places. And

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Speaker 2: that's where we start our conversation with Josh Wingrove Bloomberg,

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Speaker 2: White House correspondent. With us at the table, it must

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Speaker 2: be a big day if you're here in person. Thanks

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Speaker 2: for joining us. You know, there's nothing they can do

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Speaker 2: in the meantime, apparently to prove that they've made good

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Speaker 2: on some of these concerns. As justin Trudeau outlined the

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Speaker 2: measures that have been taken to stop the flow of fentanyl,

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Speaker 2: the money spent on securing the border. What is it

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Speaker 2: that Donald Trump wants?

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Speaker 5: I mean, it is the Prime Minister's believe. You heard

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Speaker 5: him say today that this has been essentially a ruse,

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Speaker 5: that there was no sincere effort on fentanyl that could

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Speaker 5: have alleviated these He said he'd been holding out hope

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Speaker 5: that it was you know, merely a bargaining chip or

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Speaker 5: negotiating tactic. Obviously that has not been the case, or

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Speaker 5: at least as we sit here now, is not the case.

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Speaker 5: And so you know he's moving to essentially sort of

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Speaker 5: trade war footing. And it's you know, the clip that

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Speaker 5: you played from President Trump, Well, is it about factories

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Speaker 5: being stolen or is it about fentanyl? You know, it

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Speaker 5: is tough to say. And then Secretary of latink this

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Speaker 5: morning saying this is a drug war, not a trade war.

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Speaker 5: The trade war is just three weeks away. So I mean,

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Speaker 5: all these things are kind of coming in together. And

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Speaker 5: for those people who are just tuning in to these threats,

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Speaker 5: I think a lot of people have been tuning this

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Speaker 5: out right. Trump makes a lot of tariff threats, a

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Speaker 5: lot of teriffreats. In the first term, he made a

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Speaker 5: lot of them. The scale is so much bigger now.

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Speaker 5: I think that's really important to understand. This is not

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Speaker 5: just hitting steel aluminum, and in particular, only certain countries

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Speaker 5: with steel and aluminum today has enacted these tariffs twenty

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Speaker 5: five percent Canada, Mexico mostly, ten percent Canadian Energy, twenty

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Speaker 5: percent on China, on the three biggest trading partners, also

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Speaker 5: the three biggest customers of US products. He's picking a

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Speaker 5: fight with the three countries that have the broadest firepower

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Speaker 5: to fireback. This is structural and there's more stuff coming

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Speaker 5: down the pipe next month or excuse me, next week. Yes,

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Speaker 5: steal illuminum tariffs twenty five percent, potentially rising above that

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Speaker 5: following that aprilsecond, both the reciprocal tariffs and the sectoral ones,

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Speaker 5: both of which could pile on to Mexico and Canada

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Speaker 5: by the way, and fuel these responses that we're already seeing.

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Speaker 2: So we're in it right now while we're considering conditions

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Speaker 2: that could be met. The first time I've heard this

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Speaker 2: was in that interview with Lutnik earlier today. We need

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Speaker 2: to see material reduction in autopsied deaths from opioids. You

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Speaker 2: cover this White House closer than anyone I know. Have

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Speaker 2: you ever heard that line before? Is that the new metric?

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Speaker 5: The first time we heard that metric was about a

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Speaker 5: week ago, okay, and that felt What does that mean

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Speaker 5: to the Canadians like a goalpost, moving scenarios?

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Speaker 2: What's material?

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Speaker 5: They want to see a reduction and fentanyl deaths in

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Speaker 5: the US, which of course everything why include I mean,

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Speaker 5: I'll leave it to the secretary to say why he

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Speaker 5: said that. A week ago, what we were told by

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Speaker 5: White House official is fentanyl deaths in America need to

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Speaker 5: come down before these tariffs go away. That was what

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Speaker 5: we reported to the Canadians and Mexicans. That was new

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Speaker 5: to them, because not only have they been saying, well,

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Speaker 5: it's kind of unclear what we've been asked to do,

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Speaker 5: but the public reasons were things like fentanyl at the border,

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Speaker 5: in other words, seizures, border enforcement, that kind of thing,

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Speaker 5: as opposed to domestic fentinel deats. I should note Canada,

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Speaker 5: like many other Western nations, has its own problem with

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Speaker 5: fentanyl deaths that they're trying to you know, most countries,

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Speaker 5: developed economies are grappling with the scourge of this. So

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Speaker 5: that was to the eyes of many Canadians a goalpost shift.

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Speaker 5: To the eyes of the Americans, that is the current

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Speaker 5: metric saying these tariffs are staying in place until that.

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Speaker 5: So I should note, if you were friends the Canadian

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Speaker 5: steel producer, you might be facing tariffs of twenty five

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Speaker 5: on steel plus twenty five on allegedly on drugs today,

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Speaker 5: plus the reciprocal tariff, which, by the way, Secretary Lutinik

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Speaker 5: made clear today is still coming down as well. And

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Speaker 5: we'll count for instance, the Canadian GST, which is a

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Speaker 5: federal sales tax on all goods imported or not, as

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Speaker 5: a tariff in responding kind. So you could have three

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Speaker 5: tariffs if you're a Canadian steel producer, you can imagine

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Speaker 5: what that does for ins and Stelco recently bought by

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Speaker 5: Cleveland Cliffs, based in Ohio, home to say the vice president,

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Speaker 5: wonder what they think about all this?

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Speaker 2: Well, you know, we've heard from Canada that this could

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Speaker 2: mean an immediate recession in the Canadian economy. But what's

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Speaker 2: going on here? Look at this market, biggest loss yesterday

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Speaker 2: of the year, the S and P five hundred back

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Speaker 2: to where it was before the election, and we're not

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Speaker 2: slowing down. Even crypto is falling. You've seen the reaction

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Speaker 2: on the bond market. Donald Trump seems to pay attention

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Speaker 2: to that. What does he think of this Wall Street reaction?

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Speaker 5: Many of the president's close supporters that I talked to

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Speaker 5: will say that the market reaction is one of the

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Speaker 5: few things that is a true metric for him, that

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Speaker 5: he believes strongly in it, and so you have to

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Speaker 5: think that he's taking this seriously. But they're also saying, look,

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Speaker 5: there could be some temporary pain. So I think some

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Speaker 5: people in his administration kind of expected an initial reaction

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Speaker 5: and the question is is it more prolonged or deeper?

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Speaker 5: But I do think that President Trump just has been

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Speaker 5: talking about this for a while. On the Canada stuff.

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Speaker 5: He keeps raising Canada. He's not asked about Canada, Joe.

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Speaker 5: You know, I'm Canadian and I'm in these rooms. You know,

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Speaker 5: no one's asking about Canada. He just keeps circling back

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Speaker 5: to it. And so I think that it is clear

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Speaker 5: that Canada on is on his mind and he wants to,

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Speaker 5: you know, pressure the country. And we should also know

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Speaker 5: that in about a week there'll be a new prime

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Speaker 5: minister and then potentially a couple months after that, maybe

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Speaker 5: even another new one. So this is coming at a

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Speaker 5: point of you know, transition in the leadership of the

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Speaker 5: federal government in Canada.

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Speaker 2: Some have suggested he could help to get Trudeau's party

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Speaker 2: reelected as a political back last.

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Speaker 5: Year, Trudeau's party was on the matt in polling. That

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Speaker 5: has completely rebounded because of where we're going, and now

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Speaker 5: it is a much closer election between the Conservative Party,

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Speaker 5: which had looked like it was primed to be sort

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Speaker 5: of like cruising to a strong majority government mandate, and

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Speaker 5: now it.

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Speaker 2: Fascinus to say, we've only got about a minute left.

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Speaker 2: Of course, saving all the good stuff for the end here,

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Speaker 2: but this big speech tonight. The talking about two hours

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Speaker 2: is that real?

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Speaker 5: What's I mean? A standard Trump speech is like an hour?

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Speaker 2: You know, Oh, that's true. Democrats are talking about bringing

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Speaker 2: noisemakers into the hall of night. What are we in for?

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Speaker 5: I'm thinking of getting pizza, so I'll just speak for myself,

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Speaker 5: you know. Look, he wants to do a few things.

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Speaker 5: He wants to give a victory lap. Obviously the current

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Speaker 5: market reaction will dampen that. Yeah, he does want to

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Speaker 5: call for things, including additional border funding. We've heard, you know,

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Speaker 5: Tom Holman talk about the need for further resources, so

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Speaker 5: he is coming with a wish list, not just you know,

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Speaker 5: a celebration of what's being done. But other than that,

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Speaker 5: we're gonna hear a lot about the border. We're gonna

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Speaker 5: hear a lot about a team of restoring the American Dream,

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Speaker 5: which will dovetail on tariffs. We will hear stuff on Ukraine.

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Speaker 5: Will be watching closely for a response to what we've

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Speaker 5: heard President's landscap about an hour and a half ago,

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Speaker 5: sort of opening the door again to further talks. So

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Speaker 5: there'll be a lot of news in it. I think,

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Speaker 5: uh It likes to make an ounse.

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Speaker 2: He likes to make announcements, but if you want to

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Speaker 2: get like, get in the in the mix with Democrats.

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Speaker 2: Does he want to get into a little call and

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Speaker 2: response all on Joe Biden.

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Speaker 5: I mean, I guess we'll see. I guess we'll see.

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Speaker 2: This could be a night.

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Speaker 6: Huh.

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Speaker 5: Yeah. He doesn't have Pelosio over his shoulder now, so

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Speaker 5: it's a little bit of a different dynamics.

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Speaker 2: So much body language to watch and of course much

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Speaker 2: messaging ahead today. Josh Win Grove, thank you so much,

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Speaker 2: Bloomberg White House correspondent, setting us up for the big

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Speaker 2: speech on this tariff Tuesday. Our special covered starts eight

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Speaker 2: pm Eastern Time. Stay with us on the fastest show

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Speaker 2: in politics. I'm Joe Matthew. This is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch

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Speaker 2: Speech doesn't start till after nine o'clock tonight, and we

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Speaker 2: could be sitting here with Rick and Genie around midnight

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Speaker 2: on Bloomberg TV and Radio. Now'll call it the State

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Speaker 2: of the Union. Because it's his first year. The President

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Speaker 2: will deliver his address to Congress tonight, having said it

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Speaker 2: will be big, remember truth, social I will tell it

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Speaker 2: like it is, said Donald Trump, And well, we're just

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Speaker 2: going to have to get together around nine o'clock to

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Speaker 2: find out. That's when it starts. Our special coverage begins

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Speaker 2: at eight pm Eastern time. The theme tonight the renewal

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Speaker 2: of the American Dream. According to the White House, it's

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Speaker 2: not planning to leave the Capitol and it's till almost

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Speaker 2: eight make that eleven thirty Eastern time tonight, so we're

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Speaker 2: in for the long haul. I suspect it's going to

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Speaker 2: not only be a lot of handing in backslap, but

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Speaker 2: maybe some deal making. I'll remind you the government runs

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Speaker 2: out of money in ten days. First term Senator Elissa Slatkin,

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Speaker 2: Democrat Michigan in the crosshairs on this tariff Tuesday. We'll

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Speaker 2: be delivering the official party response will carry that as well.

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Speaker 2: Does America have a State of the Union so called?

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Speaker 2: And an Oscars ceremony in it? In the same week

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Speaker 2: thirty two million people tune in to see Joe Biden's

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Speaker 2: last date of the Union in twenty twenty four. It'll

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Speaker 2: be interesting to see what happens here. It's Canada we're

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Speaker 2: watching today and Mexico, of course, on this tariff Tuesday,

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Speaker 2: twenty five percent in each direction north and south. And

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Speaker 2: the retaliation, as I mentioned, has already begun. We heard

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Speaker 2: from Justin Trudeau a little while ago here and they

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Speaker 2: didn't wait, as I mentioned, implementing retaliatory terriffs of nearly

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Speaker 2: one hundred billion dollars of imported US goods thirty billion

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Speaker 2: effective immediately, another one hundred and twenty five billion in

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Speaker 2: three weeks time. And Justin Trudeau, you know, he has

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Speaker 2: a bit of a light touch, although he was clearly

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Speaker 2: not very happy when he spoke to the press this morning.

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Speaker 2: Doug Ford was smiling, the leader of Ontario, the Premiere

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Speaker 2: of Ontario, smiling as he suggests cutting off energy for America.

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Speaker 2: Here he is.

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Speaker 7: A terrify on Canada, is a tacks on Americans. If

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Speaker 7: they want to try to annihilate Ontario, I will do everything,

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Speaker 7: including cut off their energy with a smile on my face.

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Speaker 7: So and I'm encouraging every other province to do the same.

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Speaker 2: Well, it wasn't actually smiling, but you get the point.

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Speaker 2: Ontario Premiere says Starlink deal has been canceled. We'll add

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Speaker 2: another log on the fire here, raising great questions about

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Speaker 2: what tariffs mean for energy. Of course, Donald Trump tonight

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Speaker 2: is going to say drill, baby, drill right. That was

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Speaker 2: the centerpiece of his approach to inflation. Production ramped up.

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Speaker 2: There's been some talk and we'll get to this with

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Speaker 2: Tom Close about what Russia might be able to do

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Speaker 2: to lower oil prices. But let's get into this conversation

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Speaker 2: right now with the global head of Energy Analysis at OPUS,

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Speaker 2: an authority on these matters, and always great to have

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Speaker 2: Tom Close it with us here on Bloomberg, Tom, Happy

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Speaker 2: tariff Tuesday. We're looking at the reaction in the markets

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Speaker 2: here the world WTI West Texas crew has blow sixty

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Speaker 2: eight dollars a barrel. What are we worried about?

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Speaker 8: Well, I think that yesterday's news from the OPEC group

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Speaker 8: about increasing production in April has really, I hate to

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Speaker 8: use this verb, trumped the tariff to rade for now

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Speaker 8: because oil price has moved into the sixties substantially for

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Speaker 8: both Brent and WTI on that news. We're not seeing

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Speaker 8: that much of a reaction right now for Eightien companies

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Speaker 8: and for the US companies that import from Canada. There's

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Speaker 8: one exception, and that's in New England where Irving Oil,

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Speaker 8: which has a three hundred and twenty thousand barrel of

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Speaker 8: day refinery in the Maritimes, raised prices by twenty to

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Speaker 8: twenty seven cents overnight. But it's pretty limited. Nothing to

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Speaker 8: observe in the Mid continent. And the discount for Canadian crude,

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Speaker 8: which has been about twelve to fifty to thirteen dollars,

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Speaker 8: is about twelve eighty five right now. So if you

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Speaker 8: didn't know about all of this stirm and drying with

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Speaker 8: the tariffs, you would think that crude oil is reacting

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Speaker 8: to other elements as they should with the OPEK plus agreement.

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Speaker 2: That's something. How much does Donald Trump have to do

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Speaker 2: with that decision, that announcement from OPEK.

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Speaker 8: I don't know if he has anything to do with it.

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Speaker 8: You know, the year was setting up to be a

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Speaker 8: very very cheap year for liquid oil, and I think

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Speaker 8: it still sets up that way. And make the argument

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Speaker 8: that the tariffs and the impact from that from a

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Speaker 8: trade war is very deleterious to sort of global GDP.

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Speaker 8: And there's nothing that impacts petroleum demand like global GDP growth.

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Speaker 8: If you take the job cuts and you take the tariffs,

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Speaker 8: you can probably cut into that growth, which most people

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Speaker 8: thought would be somewhere between seven hundred and fifty thousand

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Speaker 8: and one point two million barrels a day this year.

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Speaker 2: What's going to be the real impact of this tariff program?

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Speaker 2: And I know we're still trying to get our heads

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Speaker 2: around it, Tom close up. Markets have been moving in

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Speaker 2: a couple of different directions. You heard doug Ford there.

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Speaker 2: If they want to annihilate Ontario, he says, I'll do everything,

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Speaker 2: including cutting off their energy, with a smile on my face.

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Speaker 2: What does it really mean for the industry though?

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Speaker 8: On prices, well, if he were the premier or the

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Speaker 8: governor or whatever of Alberta, it would mean a lot

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Speaker 8: more because most okay, well that we get the heavy

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Speaker 8: creud is from Alberta, from hardesty, and right now that's

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Speaker 8: trading for about what it did beforehand, and you know,

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Speaker 8: probably scraping around fifty five dollars a barrow right now.

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Speaker 8: So the tariff ostensibly would add about five dollars and

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Speaker 8: fifty cents to that, But we're not seeing it manifest

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Speaker 8: itself in downstream markets yet.

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Speaker 2: Interesting. Now, let's say they stay in place a couple

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Speaker 2: of months, because we don't have a great sense of

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Speaker 2: what it would take to bring them down, and we're

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Speaker 2: looking at Canada specifically here. I guess when it comes

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Speaker 2: to crude oil, could this create a disruption in that trajectory,

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Speaker 2: that lower price trajectory that you're talking about.

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Speaker 8: Oh yeah, it can mean that the people in the

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Speaker 8: mid continent, who typically have the cheapest energy prices and

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Speaker 8: they might have the most expensive. Canada is a stranded seller.

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Speaker 8: In other words, you know, they export four million barrels

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Speaker 8: a day or just a little bit under that to

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Speaker 8: the US, and they really don't have many other choices.

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Speaker 8: They can move some stuff to tidal water on the

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Speaker 8: Trans Mountain pipeline, but not a great deal more. The

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Speaker 8: other problem is the US refiners in the center of

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Speaker 8: the country are stranded buyers. It's going to be very

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Speaker 8: very difficult for them to come up with crude oil

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Speaker 8: they prefer if Canada is not selling it. But I

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Speaker 8: think the sense out there and the oil markets down

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Speaker 8: the energy markets is that the tariffs on Canada are

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Speaker 8: going to be measured in days, not in weeks or months.

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Speaker 8: I could be wrong on that. Mexico is a little

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Speaker 8: bit more complicated because Mexico it is twenty five percent

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Speaker 8: and a lot of the Mexican crewed goes into foreign

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Speaker 8: trade zones, which is US refinery complexes that ostensibly could

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Speaker 8: run Mexican crude and not have to pay the tariff

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Speaker 8: because they'll be exporting refined products gasoline and diesel.

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Speaker 2: Huh wow, fascinating Before I run out of time here, Tom,

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Speaker 2: I heard a fascinating conversation of which earlier today on

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Speaker 2: Bloomberg with Don Fitzpatrick. This is the chief investment officer

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Speaker 2: at Soros Fund Management, considering the impact that Russia could

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Speaker 2: have on this whole picture if we got a peace

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Speaker 2: deal in Ukraine. Here's what she said on Bloomberg.

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Speaker 9: The US really can't drill more. It's not in Saudi

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Speaker 9: Arabia's best interests to produce a lot more. They need

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Speaker 9: about ninety dollars a barrel to balance their budget. So

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Speaker 9: the lever he can really pull there is Russia. And

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Speaker 9: one kind of wild card would be Russia dropping out

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Speaker 9: of Opek, and that would have a real impact on

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Speaker 9: oil price in the context of moving it lower.

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Speaker 2: Speaking this morning at the Bloomberg invest summit, how does

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Speaker 2: that hit you, Tom Closa?

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Speaker 8: I agree that that's a significant tail risk. If there's

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Speaker 8: a raw prochemund with Russia, we're going to get Russian

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Speaker 8: molecules of liquids or natural gas, and that could be very,

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Speaker 8: very harmful to sort of the oil price universe at

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Speaker 8: the moment. Now, that's probably a second half twenty twenty

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Speaker 8: five event, if it's out there at all. But you know,

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Speaker 8: there's some banks who retain bullish views and they go, well,

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Speaker 8: Russia will comply with Opek. What in history has ever

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Speaker 8: suggested that they would comply with restrictions that are placed

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Speaker 8: upon them. So I agree with Dawn. I think she'd

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Speaker 8: spot on on that.

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Speaker 2: What would that mean for crude oil in the second

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Speaker 2: half of the price of crude?

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Speaker 8: You know, I think that with a Russian rop brochmant

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Speaker 8: and with let's say an end to some of the

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Speaker 8: tariffs for Canada, I think you're talking about crude oil,

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Speaker 8: you know, having some trades at below sixty dollars a barrel.

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Speaker 8: That's for WTI. Maybe about three or four dollars higher

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Speaker 8: for Brent.

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Speaker 2: Fascinating.

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Speaker 8: It's hard to be bullish about crude oil right now,

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Speaker 8: very very hard.

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Speaker 2: Right despite the Well, you're gonna hear drill, baby, drill

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Speaker 2: tonight for sure, Tom Close, in our remaining moment, what

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Speaker 2: else do you want to hear that might make you

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Speaker 2: feel better about prices this year?

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Speaker 8: I don't know. You know, we're going to hear about

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Speaker 8: energy dominance, but you know, ironically, we achieved energy dominance

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Speaker 8: during the Biden administration despite an adversarial relationship. So I

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Speaker 8: don't think that most companies are going to be interested

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Speaker 8: in bringing more hydrogardons to the market, with the exception

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Speaker 8: of natural gas they can explore. So I think we'll

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Speaker 8: get a lot of rhetoric and we'll get hyperbole, which

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Speaker 8: is very predictable, but I don't think we'll get much

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Speaker 8: in terms of policy change.

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Speaker 2: It's always great to have you, Tom, I appreciate it

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Speaker 2: very much. Tom Close, a global head of Energy Analysis

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Speaker 2: at Opus. The straight take ahead of the address to

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Speaker 2: Congress later It starts a little after nine pm West

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Speaker 2: Texas crewed sixty seven eighty four. We're down about one

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Speaker 2: percent today and apparently heading lower yet if Tom close

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Speaker 2: A has the right take on things.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

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Speaker 1: us live weekdays at noon and five pm Eastern on

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Speaker 1: Applecarplay and Android Auto with the Bloomberg Business App. Listen

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Speaker 1: live on YouTube.

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Speaker 2: We're talking about Canada because we've heard about their retaliation.

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Speaker 2: Sunday is when we'll hear from Mexico. Claudia Scheinbaum says

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Speaker 2: her retaliation will be spelled out. She said she had

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Speaker 2: a plan B, A C and a D. What are

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Speaker 2: we in for from Mexico.

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Speaker 10: Look, I mean one of the things that is really

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Speaker 10: in plan and is going to be hit hard here

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Speaker 10: as the auto sector. Right, we import cars from Mexico,

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Speaker 10: We import auto parts from Mexico. We also export auto

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Speaker 10: parts to Mexico that go into a lot of those cars.

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Speaker 2: That come back in.

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Speaker 10: If those are then hit by tariffs on the Mexican side,

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Speaker 10: it's just going to raise the costs even more than

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Speaker 10: these US tariffs are. And you know, we'll see how

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Speaker 10: it escalates if we move from plan A to B,

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Speaker 10: to C to D. As things escalate, that the damage

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Speaker 10: is just.

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Speaker 11: Only going to grow, all right, Seawandan and Bloomberg Senior

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Speaker 11: writer for Economics here with us as we digest all

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Speaker 11: of this tariff news. Thank you so much joining us

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Speaker 11: here on bal Power on Bloomberg TV and Radio, and

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Speaker 11: joining us now on the program live from Capitol Hill.

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Speaker 11: As Republican Congressman Mark Alford of Missouri, who sits on

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Speaker 11: the Small Business Committee. Congressman, welcome back to Bloomberg. It's

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Speaker 11: good to have you, sir. When you consider what small

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Speaker 11: businesses may be thinking today in the face of news

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Speaker 11: of these tariffs, wondering what will happen to the cost

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Speaker 11: they are facing and their ability to pass those costs

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Speaker 11: on to the people who purchase goods and services from them,

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Speaker 11: what would you tell them?

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Speaker 12: Interesting, you should bring up small business. We just had

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Speaker 12: a meeting with a new administrator, Senator Kelly Luffler, who

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Speaker 12: is intent on getting small business representatives into the rural

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Speaker 12: parts of America. In particular, we requested that in our

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Speaker 12: district just south of Kansas City. And I'll tell you

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Speaker 12: what our small business owners are saying. Look, we know

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Speaker 12: that they are going to be some price increases that

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Speaker 12: they're going to have to pass on to consumers. But

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Speaker 12: it is worth it if we can save one hundred

435
00:23:08,440 --> 00:23:12,959
Speaker 12: thousand lives a year through the fentanyl poisoning. This past administration,

436
00:23:13,000 --> 00:23:16,879
Speaker 12: the Biden administration, with the poorest borders, we're allowing this

437
00:23:17,000 --> 00:23:21,800
Speaker 12: fentanyl poison to come up, and this toxins to poison

438
00:23:21,920 --> 00:23:22,880
Speaker 12: and kill.

439
00:23:23,040 --> 00:23:23,879
Speaker 13: Our young people.

440
00:23:24,040 --> 00:23:27,000
Speaker 12: And so look, we get stuff delivered to our house

441
00:23:27,200 --> 00:23:29,520
Speaker 12: just about every day, it seems like, from Amazon, and

442
00:23:29,560 --> 00:23:32,760
Speaker 12: typically cheap goods, immediate gratification from China.

443
00:23:33,320 --> 00:23:35,600
Speaker 13: I'm willing to pay a little bit more if.

444
00:23:35,480 --> 00:23:38,720
Speaker 12: We can stop the poisoning, particularly of our young people

445
00:23:39,000 --> 00:23:40,880
Speaker 12: that's coming through Canada and Mexico.

446
00:23:42,440 --> 00:23:47,280
Speaker 2: Well that's really interesting, Congressman. We appreciate that first hand account.

447
00:23:47,320 --> 00:23:49,720
Speaker 2: If small business owners are telling you that, then they

448
00:23:49,720 --> 00:23:52,280
Speaker 2: are prepared for some short term pain, as Donald Trump

449
00:23:52,600 --> 00:23:53,760
Speaker 2: had previously warned.

450
00:23:55,080 --> 00:23:58,159
Speaker 12: Look, I think small businesses have got kind of the

451
00:23:58,640 --> 00:24:01,840
Speaker 12: short sheeted with the past administration. They have not gotten

452
00:24:01,880 --> 00:24:05,080
Speaker 12: the capital and counseling that they need from the small

453
00:24:05,080 --> 00:24:09,440
Speaker 12: business administration. It seems like Administra at Guzman was more

454
00:24:09,480 --> 00:24:13,840
Speaker 12: concerned about registering Democrat voters than actually getting out with

455
00:24:13,960 --> 00:24:16,560
Speaker 12: representatives and helping small businesses.

456
00:24:16,080 --> 00:24:18,000
Speaker 13: Grow Kelly Leffler is.

457
00:24:18,040 --> 00:24:20,280
Speaker 12: Changing that, and we are going to make sure that

458
00:24:20,359 --> 00:24:24,400
Speaker 12: small businesses thrive. Part of that is going to be

459
00:24:24,480 --> 00:24:26,840
Speaker 12: building small businesses in the rural area.

460
00:24:26,880 --> 00:24:28,200
Speaker 13: We're intent on doing that.

461
00:24:28,680 --> 00:24:32,320
Speaker 12: I know that these tariffs might be a temporary setback,

462
00:24:32,359 --> 00:24:34,440
Speaker 12: but it is a short term pain.

463
00:24:34,400 --> 00:24:36,280
Speaker 13: For a long term gain for America.

464
00:24:36,640 --> 00:24:40,280
Speaker 12: Reciprocal tariffs are what I think that we need to

465
00:24:40,359 --> 00:24:43,119
Speaker 12: write the ship in America to gain the respect on

466
00:24:43,160 --> 00:24:45,639
Speaker 12: the world stage, and Donald Trump is going to do

467
00:24:45,680 --> 00:24:48,040
Speaker 12: that with my support and the Republican Conference.

468
00:24:49,480 --> 00:24:52,080
Speaker 11: Well, I do wonder how long term is the term

469
00:24:52,119 --> 00:24:55,240
Speaker 11: we're actually talking about here, Congressman, because the President was

470
00:24:55,280 --> 00:24:57,760
Speaker 11: elected to a four year term off the back of

471
00:24:57,880 --> 00:25:00,840
Speaker 11: concerns voters had about the economy, and if you look

472
00:25:00,840 --> 00:25:03,359
Speaker 11: at polls that we've consistently seen in the last several weeks,

473
00:25:03,400 --> 00:25:05,800
Speaker 11: they are concerned he's not doing enough to address the

474
00:25:05,800 --> 00:25:08,240
Speaker 11: prices they are facing now, let alone what they might

475
00:25:08,240 --> 00:25:10,840
Speaker 11: face in the future once you account for the impact

476
00:25:11,040 --> 00:25:12,800
Speaker 11: of tariffs. What does he need to say about that

477
00:25:12,880 --> 00:25:14,800
Speaker 11: tonight when he addresses you and your colleagues.

478
00:25:15,480 --> 00:25:18,080
Speaker 12: I think he's going to talk about his wins already

479
00:25:18,240 --> 00:25:23,000
Speaker 12: opening up oil production in America, shutting down the border,

480
00:25:23,080 --> 00:25:27,320
Speaker 12: essentially securing our border with more than ninety percent reduction

481
00:25:27,880 --> 00:25:30,880
Speaker 12: in illegal crossings into our great nation. That puts such

482
00:25:30,880 --> 00:25:34,640
Speaker 12: a strain on the fabric of America. And I think

483
00:25:34,680 --> 00:25:37,159
Speaker 12: that some of the other wins that he has is

484
00:25:37,200 --> 00:25:40,240
Speaker 12: going to go a long way to bringing down the

485
00:25:40,280 --> 00:25:43,480
Speaker 12: interest rates in America, restoring If we can get this

486
00:25:43,640 --> 00:25:47,359
Speaker 12: Tax Cuts and Jobs Act passed through the House Reconciliation

487
00:25:47,560 --> 00:25:50,480
Speaker 12: and the Senate Reconciliation Bill, that will go a long

488
00:25:50,520 --> 00:25:53,800
Speaker 12: way to restoring confidence in the bond market, and in turn,

489
00:25:54,480 --> 00:25:57,119
Speaker 12: I believe the Federal Reserve will bring down the interest rates.

490
00:25:57,640 --> 00:25:59,720
Speaker 12: I am the chair of the Real Estate Caucus. We

491
00:26:00,080 --> 00:26:02,760
Speaker 12: had a meeting heard from young people here on Capitol

492
00:26:02,840 --> 00:26:05,119
Speaker 12: Hill who want to buy a home and they can't

493
00:26:05,400 --> 00:26:10,880
Speaker 12: because supply shortages, because of over regulation, Inflation Reduction Act regulations,

494
00:26:10,880 --> 00:26:15,879
Speaker 12: climate regulations that are driving some home builders out of business.

495
00:26:15,880 --> 00:26:18,760
Speaker 12: They can't keep up with these regulations. It's adding twenty

496
00:26:18,840 --> 00:26:22,200
Speaker 12: five percent to the cost of a home in Kansas City.

497
00:26:23,119 --> 00:26:26,200
Speaker 12: I firmly believe that the economic policies that Donald J.

498
00:26:26,400 --> 00:26:29,560
Speaker 12: Trump is instilling now is going to turn our economy

499
00:26:29,600 --> 00:26:33,040
Speaker 12: around in a short order. Within the next two quarters

500
00:26:33,359 --> 00:26:36,359
Speaker 12: and get our economy juiced again to where we're not

501
00:26:36,400 --> 00:26:38,720
Speaker 12: going to have to worry about these reciprocal tariffs.

502
00:26:40,680 --> 00:26:42,960
Speaker 2: So if the cost of goods, though, continues to rise

503
00:26:43,000 --> 00:26:45,160
Speaker 2: across the board, and we're looking at now the potential

504
00:26:45,200 --> 00:26:47,800
Speaker 2: for a trade war in the words of Howard Lutnik,

505
00:26:47,840 --> 00:26:49,919
Speaker 2: to begin on April second, how does that help to

506
00:26:49,960 --> 00:26:52,719
Speaker 2: get more young people in affordable homes.

507
00:26:53,960 --> 00:26:57,359
Speaker 12: Well, we raise salaries. I think you're going to see

508
00:26:57,359 --> 00:27:02,880
Speaker 12: that coming. The demand for intellect, the demand for good

509
00:27:02,960 --> 00:27:08,600
Speaker 12: labor is there, and so our workforce. If we provide

510
00:27:08,600 --> 00:27:11,159
Speaker 12: the education they need and the training they need for

511
00:27:11,240 --> 00:27:14,520
Speaker 12: skilled labor, I'm big on that in our district, they're

512
00:27:14,560 --> 00:27:16,439
Speaker 12: going to have good paying jobs and they're going to

513
00:27:16,440 --> 00:27:19,520
Speaker 12: be able to afford. Not the hyper inflation that Joe

514
00:27:19,560 --> 00:27:21,879
Speaker 12: Biden brought about, but I think a reasonable rate of

515
00:27:21,880 --> 00:27:25,680
Speaker 12: inflation that we can all live with with a higher salary,

516
00:27:26,560 --> 00:27:30,680
Speaker 12: higher earning power, and higher confidence in the American economy.

517
00:27:31,720 --> 00:27:34,600
Speaker 11: I do wonder about a potential wage price spiral that

518
00:27:34,640 --> 00:27:37,360
Speaker 11: could stem from that, Congressman, if people are constantly having

519
00:27:37,440 --> 00:27:39,520
Speaker 11: to demand more from their employers so that they can

520
00:27:39,560 --> 00:27:41,760
Speaker 11: afford the cost of goods, and that buying power only

521
00:27:41,760 --> 00:27:44,760
Speaker 11: continues to drive the cost of goods higher. But when

522
00:27:44,760 --> 00:27:48,199
Speaker 11: we're considering people who have jobs or maybe negotiating their wages,

523
00:27:48,200 --> 00:27:50,359
Speaker 11: of course, there are now thousands of federal workers who

524
00:27:50,359 --> 00:27:53,280
Speaker 11: no longer do given the efforts of the Department of

525
00:27:53,320 --> 00:27:55,480
Speaker 11: Government Efficiency. I know you had a town hall last

526
00:27:55,480 --> 00:27:57,560
Speaker 11: week and you had to answer some questions about those

527
00:27:57,640 --> 00:28:01,600
Speaker 11: layoffs and the spending cuts. Is this making your job

528
00:28:01,640 --> 00:28:04,439
Speaker 11: and your communication with your constituents harder? If not the

529
00:28:04,520 --> 00:28:07,119
Speaker 11: concept of reducing the federal government, but the way in

530
00:28:07,160 --> 00:28:08,240
Speaker 11: which this has been done.

531
00:28:09,600 --> 00:28:14,840
Speaker 12: I love talking to our constituents, Democrats, Republicans, independent, politically agnostic.

532
00:28:15,240 --> 00:28:18,520
Speaker 12: I represent seven hundred and seventy two forty seven individuals.

533
00:28:18,520 --> 00:28:21,239
Speaker 12: We give the same level of conciered service in our

534
00:28:21,280 --> 00:28:24,440
Speaker 12: three offices in our district. But look, you've got to

535
00:28:24,520 --> 00:28:26,520
Speaker 12: have a conversation. I want to have a give and

536
00:28:26,560 --> 00:28:29,000
Speaker 12: take with the constituents. We had a lot of people

537
00:28:29,119 --> 00:28:31,040
Speaker 12: show up at this. It was really supposed to be

538
00:28:31,040 --> 00:28:33,560
Speaker 12: a coffee Usually I have ten people show up.

539
00:28:33,680 --> 00:28:35,000
Speaker 13: There was almost two hundred.

540
00:28:35,480 --> 00:28:39,200
Speaker 12: I asked the I had everyone write down their question

541
00:28:39,240 --> 00:28:41,480
Speaker 12: on index cards. I read the question and then when

542
00:28:41,480 --> 00:28:44,080
Speaker 12: I started answering, they would try to shout me down.

543
00:28:44,160 --> 00:28:47,040
Speaker 12: That is not an exchange of ideas. That is not

544
00:28:47,280 --> 00:28:50,360
Speaker 12: answering questions. I want to listen to people, but I

545
00:28:50,400 --> 00:28:53,440
Speaker 12: also want to have a discussion, and that's not happening

546
00:28:53,480 --> 00:28:57,280
Speaker 12: now because of organized disruptors who are trying to.

547
00:28:58,360 --> 00:28:59,960
Speaker 13: Make what we do ineffective.

548
00:29:00,040 --> 00:29:02,960
Speaker 12: And that is not right for our constituents who really

549
00:29:02,960 --> 00:29:04,160
Speaker 12: want to have discussions.

550
00:29:05,800 --> 00:29:09,400
Speaker 2: Just talk about organized disruptors on the other side of

551
00:29:09,880 --> 00:29:14,760
Speaker 2: your isle tonight, Congressmen, Democrats may be bringing props, signs,

552
00:29:14,800 --> 00:29:18,880
Speaker 2: even noisemakers. According to some reports, What will be the

553
00:29:18,920 --> 00:29:22,680
Speaker 2: decorum in the hall later, Well.

554
00:29:22,680 --> 00:29:25,760
Speaker 12: Decorum is a very big part of the Republican Conference.

555
00:29:25,880 --> 00:29:29,280
Speaker 12: We will maintain decorum. I have no control over.

556
00:29:29,120 --> 00:29:31,080
Speaker 2: What the Republicans were doing. A lot of yelling last

557
00:29:31,160 --> 00:29:32,040
Speaker 2: year at Joe Biden.

558
00:29:33,120 --> 00:29:35,920
Speaker 12: Well, there were some, but I think the vast majority

559
00:29:35,920 --> 00:29:39,200
Speaker 12: of the Republican Conference, including myself, we're treating the officer

560
00:29:39,240 --> 00:29:43,280
Speaker 12: of the presidentcy with respect, and I would encourage all members,

561
00:29:43,320 --> 00:29:48,240
Speaker 12: Republicans or Democrats, to do the same, because, listen, this

562
00:29:48,320 --> 00:29:51,200
Speaker 12: is a chance for the chief executive.

563
00:29:50,680 --> 00:29:51,120
Speaker 13: To come in.

564
00:29:51,200 --> 00:29:53,920
Speaker 12: Although technically this is not a state of the Union address,

565
00:29:54,280 --> 00:29:57,440
Speaker 12: it's a chance to hear what's on the President's heart, soul,

566
00:29:57,480 --> 00:30:00,440
Speaker 12: and mind, and then for us as Congress of Body

567
00:30:00,480 --> 00:30:03,480
Speaker 12: to work together where we can to bring about positive

568
00:30:03,520 --> 00:30:06,239
Speaker 12: change for America. I think the president again, whether it's

569
00:30:06,320 --> 00:30:09,760
Speaker 12: Joe Biden, or whether it's Donald J. Trump, President Obama,

570
00:30:09,840 --> 00:30:13,000
Speaker 12: President Clinton, George W. Bush or Ronald Reagan, if you're

571
00:30:13,040 --> 00:30:15,480
Speaker 12: standing out there as a chief executive, you deserve to

572
00:30:15,520 --> 00:30:17,480
Speaker 12: be heard, and we deserve to give our respect to

573
00:30:17,520 --> 00:30:19,520
Speaker 12: that office and.

574
00:30:19,560 --> 00:30:22,200
Speaker 11: Our final moment together. Congressman, as you talk about working

575
00:30:22,200 --> 00:30:24,600
Speaker 11: together where you can, is one of those areas going

576
00:30:24,640 --> 00:30:27,640
Speaker 11: to be keeping the government funded beyond ten days from now?

577
00:30:27,680 --> 00:30:29,080
Speaker 11: How will shut down be averted?

578
00:30:30,280 --> 00:30:31,520
Speaker 13: Well, I certainly hope so.

579
00:30:31,600 --> 00:30:34,600
Speaker 12: I was with the Chairman of the Appropriations Committee, Tom

580
00:30:34,640 --> 00:30:37,560
Speaker 12: Cole yesterday. I'm now in the Appropriations Committee. We were

581
00:30:37,600 --> 00:30:39,760
Speaker 12: talking about he has tried in earnest to work with

582
00:30:39,800 --> 00:30:42,600
Speaker 12: his counterparts in the House and in the Senate to

583
00:30:42,720 --> 00:30:46,520
Speaker 12: keep the government open by passing the twenty twenty five Yes,

584
00:30:46,760 --> 00:30:49,400
Speaker 12: we're still trying to pass the twenty twenty five budget.

585
00:30:49,400 --> 00:30:53,600
Speaker 12: We're a year behind, and they reached the top line number,

586
00:30:53,640 --> 00:30:56,959
Speaker 12: but they wanted to hobble the President and Elon Muskin

587
00:30:57,080 --> 00:31:00,360
Speaker 12: doge from doing their job of weeding out waste, abuse

588
00:31:00,400 --> 00:31:03,840
Speaker 12: and fraud in the government and finding these savings reasonable

589
00:31:03,880 --> 00:31:06,920
Speaker 12: savings for America. And we're just not willing to do that.

590
00:31:06,960 --> 00:31:09,920
Speaker 12: Tom Cole, the Appropriation Share is not willing to do that.

591
00:31:10,240 --> 00:31:13,640
Speaker 12: He did not walk away from negotiating. That is something

592
00:31:13,680 --> 00:31:15,680
Speaker 12: that the Democrats put out there to try to win

593
00:31:15,760 --> 00:31:18,240
Speaker 12: people over. I am I'm thinking now, and I think

594
00:31:18,520 --> 00:31:21,680
Speaker 12: Senator Schumer put out a statement on social media today

595
00:31:21,760 --> 00:31:24,640
Speaker 12: that they might be going for a shutdown, and if

596
00:31:24,680 --> 00:31:28,479
Speaker 12: they do that as a Schumer shutdown, we under the

597
00:31:28,520 --> 00:31:31,280
Speaker 12: direction of our leadership, I think, are going to move

598
00:31:31,280 --> 00:31:34,960
Speaker 12: towards a continuing resolution that will fund the government to

599
00:31:35,040 --> 00:31:36,360
Speaker 12: the end of September.

600
00:31:36,760 --> 00:31:38,160
Speaker 13: Let's finish out September.

601
00:31:39,360 --> 00:31:42,200
Speaker 2: Keeping in mind Republicans do control both houses. It's great

602
00:31:42,200 --> 00:31:45,080
Speaker 2: to have you back, Mark Alford, Republican from Missouri. As

603
00:31:45,120 --> 00:31:47,120
Speaker 2: we look ahead to the speech tonight, we'll assemble our

604
00:31:47,160 --> 00:31:48,880
Speaker 2: panel next Right here on Bloomberg.

605
00:31:50,960 --> 00:31:54,480
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

606
00:31:54,560 --> 00:31:57,600
Speaker 1: us live weekdays at noon and five pm Eastern on

607
00:31:57,720 --> 00:32:00,960
Speaker 1: Apple Cockley and Android Otto with the Burk Business app.

608
00:32:01,000 --> 00:32:04,000
Speaker 1: You can also listen live on Amazon Alexa from our

609
00:32:04,040 --> 00:32:08,440
Speaker 1: flagship New York station, Just Say Alexa played Bloomberg eleven.

610
00:32:08,280 --> 00:32:11,760
Speaker 11: Thirty checking on the S and P five hundred at

611
00:32:11,800 --> 00:32:15,600
Speaker 11: levels that we haven't seen since November fifth, twenty twenty four.

612
00:32:16,280 --> 00:32:18,240
Speaker 11: And I seem to believe Joe that something pretty important

613
00:32:18,280 --> 00:32:20,240
Speaker 11: was happening on that day, and that was in fact

614
00:32:20,920 --> 00:32:25,120
Speaker 11: election day, when, of course Donald Trump was overwhelmingly by

615
00:32:25,160 --> 00:32:27,880
Speaker 11: electoral college standards and the popular vote elected president of

616
00:32:27,880 --> 00:32:31,920
Speaker 11: the United States, and in doing so helped precipitate what

617
00:32:32,040 --> 00:32:34,760
Speaker 11: had been a pretty remarkable market rally, with the S

618
00:32:34,800 --> 00:32:36,560
Speaker 11: and P five hundred as recently as a few weeks

619
00:32:36,600 --> 00:32:40,040
Speaker 11: ago at record highs, something he touted when speaking at

620
00:32:40,080 --> 00:32:44,560
Speaker 11: the Saudi Investment Forum FII in Florida just earlier this month.

621
00:32:44,760 --> 00:32:47,080
Speaker 11: And now here we are back at levels from before

622
00:32:47,120 --> 00:32:48,680
Speaker 11: we knew that it was Donald Trump who would be

623
00:32:49,240 --> 00:32:51,440
Speaker 11: the next president of the United States. And I can't

624
00:32:51,640 --> 00:32:55,000
Speaker 11: imagine that is sitting extraordinarily well with him as he

625
00:32:55,040 --> 00:32:58,320
Speaker 11: gets prepared to address the nation in a joint session

626
00:32:58,360 --> 00:32:59,960
Speaker 11: of Congress this evening at.

627
00:32:59,840 --> 00:33:02,200
Speaker 2: The yeah that prompted a big old rally as we

628
00:33:02,240 --> 00:33:04,640
Speaker 2: saw following the election. To the think that we have

629
00:33:04,720 --> 00:33:07,800
Speaker 2: done a round trip like this and so quickly, so precipitously,

630
00:33:08,360 --> 00:33:10,760
Speaker 2: is certainly freaking out a lot of investors. As we

631
00:33:10,840 --> 00:33:12,680
Speaker 2: watch the markets here, it's kind of turned into a

632
00:33:12,720 --> 00:33:15,960
Speaker 2: split screen once again. If you remember Donald Trump toward

633
00:33:16,000 --> 00:33:18,360
Speaker 2: the end of his first term, every day he'd be

634
00:33:18,360 --> 00:33:20,880
Speaker 2: out speaking about remember it was COVID. There'd typically be

635
00:33:20,920 --> 00:33:23,920
Speaker 2: an update on COVID, on vaccines and so forth, and

636
00:33:23,920 --> 00:33:25,960
Speaker 2: there'd be a split screen on every cable news screen

637
00:33:25,960 --> 00:33:27,800
Speaker 2: with the financial markets. And we may be back in

638
00:33:27,840 --> 00:33:31,600
Speaker 2: a world like that as indeed, the President addresses Congress

639
00:33:31,680 --> 00:33:33,600
Speaker 2: later and it's where we start our conversation with our

640
00:33:33,600 --> 00:33:36,200
Speaker 2: signature panel. They're in for the long haul today. Rick

641
00:33:36,240 --> 00:33:38,360
Speaker 2: and Jeanie with us right now. Rick Davis, partner at

642
00:33:38,360 --> 00:33:42,560
Speaker 2: Stone Court Capital, republican strategist, and Genie Shanzo are democratic

643
00:33:42,600 --> 00:33:45,240
Speaker 2: analyst and senior Democracy Fellow with the Center for the

644
00:33:45,240 --> 00:33:49,480
Speaker 2: Study of the Presidency and Congress. What's your thought on that, Genie,

645
00:33:49,480 --> 00:33:52,000
Speaker 2: knowing that Donald Trump thinks that the stock market is

646
00:33:52,520 --> 00:33:55,280
Speaker 2: really the ultimate metric when it comes to his success,

647
00:33:56,120 --> 00:33:58,840
Speaker 2: and the split screen, even if implied as he addresses

648
00:33:59,000 --> 00:34:01,160
Speaker 2: Congress and the American people tonight means what.

649
00:34:03,240 --> 00:34:06,120
Speaker 14: Yeah, I mean, rationally, you would think he looks at

650
00:34:06,160 --> 00:34:10,080
Speaker 14: these numbers and sees all that red and says, gosh,

651
00:34:10,200 --> 00:34:13,080
Speaker 14: I didn't mean about those tariffs. Let's go back and

652
00:34:13,120 --> 00:34:16,520
Speaker 14: pull back on that. Because the stunning thing about this

653
00:34:17,200 --> 00:34:19,480
Speaker 14: is the gains that were made, as you guys were

654
00:34:19,520 --> 00:34:22,440
Speaker 14: just talking about, have all been lost. And this is

655
00:34:22,480 --> 00:34:26,200
Speaker 14: a self inflicted wound. This was not a natural disaster.

656
00:34:26,800 --> 00:34:30,520
Speaker 14: It is not some kind of calamity that has befallen

657
00:34:30,640 --> 00:34:33,760
Speaker 14: like so many presidents have dealt with. He has done

658
00:34:33,800 --> 00:34:38,160
Speaker 14: this to himself and to the economy so far. You know,

659
00:34:38,480 --> 00:34:42,280
Speaker 14: there is an old statement civilizations decline when you forget

660
00:34:42,440 --> 00:34:46,560
Speaker 14: what's obvious. And what's obvious that we know is tariffs

661
00:34:46,600 --> 00:34:51,120
Speaker 14: are really really bad for a good economy. Nobody outside

662
00:34:51,200 --> 00:34:53,799
Speaker 14: of the administration and probably a lot of people in

663
00:34:53,840 --> 00:34:57,319
Speaker 14: the administration disagrees with that. And so why he is

664
00:34:57,400 --> 00:34:59,880
Speaker 14: doing this and if he keeps it up given these number,

665
00:35:00,719 --> 00:35:03,200
Speaker 14: I just can't imagine that he will. But so far

666
00:35:03,320 --> 00:35:04,400
Speaker 14: he is all.

667
00:35:04,280 --> 00:35:08,680
Speaker 11: In Well, Rick, we often here said and say it

668
00:35:08,719 --> 00:35:12,000
Speaker 11: ourselves at Bloomberg that the stock market is not the

669
00:35:12,080 --> 00:35:14,640
Speaker 11: economy that fundamentally they are very different things. And yet

670
00:35:14,640 --> 00:35:16,560
Speaker 11: it does seem what the stock market is reflecting, at

671
00:35:16,640 --> 00:35:20,000
Speaker 11: least right now, is concerned about the economy. So I

672
00:35:20,000 --> 00:35:22,160
Speaker 11: do wonder what your take is on how Donald Trump

673
00:35:22,239 --> 00:35:24,520
Speaker 11: is going to speak about this this evening, not just

674
00:35:24,560 --> 00:35:26,960
Speaker 11: thinking of like where asset prices actually are, but what

675
00:35:27,000 --> 00:35:29,480
Speaker 11: it is signaling about what his policies may do to

676
00:35:29,560 --> 00:35:32,320
Speaker 11: what everyday Americans are experiencing when they go to the

677
00:35:32,320 --> 00:35:34,440
Speaker 11: grocery store to take a look at their bills.

678
00:35:35,360 --> 00:35:37,400
Speaker 15: Yeah, I think he's going to double down on this

679
00:35:37,560 --> 00:35:40,960
Speaker 15: notion that he can reverse the current course of a

680
00:35:41,320 --> 00:35:45,840
Speaker 15: general economic slowdown and ramp it up. He's got a

681
00:35:45,920 --> 00:35:50,040
Speaker 15: little bit of success to talk about around oil prices,

682
00:35:50,120 --> 00:35:54,000
Speaker 15: gas pumps, but you know, he's not going to let

683
00:35:54,040 --> 00:35:55,920
Speaker 15: facts get in the way of a good story, right,

684
00:35:56,040 --> 00:35:59,160
Speaker 15: So you know, he's going to talk about how already

685
00:35:59,360 --> 00:36:05,040
Speaker 15: the country is moving forward in a better economic direction,

686
00:36:05,440 --> 00:36:09,839
Speaker 15: and there are you know, some successes. Inflation has been

687
00:36:09,880 --> 00:36:13,320
Speaker 15: held down and so on those things that is positive,

688
00:36:13,440 --> 00:36:17,560
Speaker 15: he'll take full credit for that. And for all those

689
00:36:17,600 --> 00:36:20,840
Speaker 15: negative things, I think they'll be in the basket of

690
00:36:21,320 --> 00:36:24,439
Speaker 15: Joe Biden problems that he inherited, And I think Joe

691
00:36:24,440 --> 00:36:25,640
Speaker 15: Biden will show up quite a.

692
00:36:25,680 --> 00:36:27,080
Speaker 13: Bit in the speech.

693
00:36:27,120 --> 00:36:30,000
Speaker 15: He's been sort of going back to his campaign rhetoric

694
00:36:30,080 --> 00:36:35,480
Speaker 15: recently and using Joe Biden as the person that caused

695
00:36:35,520 --> 00:36:38,360
Speaker 15: all this havoc in the United States. And I wouldn't

696
00:36:38,400 --> 00:36:42,200
Speaker 15: be surprised that all these things that are negative related

697
00:36:42,200 --> 00:36:44,360
Speaker 15: to the economy are going to be Biden problems that

698
00:36:44,400 --> 00:36:45,000
Speaker 15: he inherited.

699
00:36:46,239 --> 00:36:48,880
Speaker 2: Does he speak rick maybe to the temporary pain that

700
00:36:48,920 --> 00:36:51,520
Speaker 2: he referred to at one point the way Mark Alford

701
00:36:52,200 --> 00:36:54,760
Speaker 2: just did a moment ago that this is about something

702
00:36:54,800 --> 00:36:57,640
Speaker 2: bigger than the stock market or making money, that he's

703
00:36:57,680 --> 00:37:00,319
Speaker 2: trying to save American lives by stopping fent I left

704
00:37:00,320 --> 00:37:00,680
Speaker 2: the border.

705
00:37:01,480 --> 00:37:05,520
Speaker 15: Yeah, there's no question fentanyl will be the reason that

706
00:37:06,160 --> 00:37:10,400
Speaker 15: these punitive tariffs have been put on Mexico, China, and

707
00:37:10,520 --> 00:37:14,200
Speaker 15: uh in Canada. I mean, honestly, I mean, you know,

708
00:37:14,400 --> 00:37:17,000
Speaker 15: the broad brush on this is awful, hard to swallow.

709
00:37:17,040 --> 00:37:19,880
Speaker 15: I mean, Canada is not the reason millions of people

710
00:37:20,000 --> 00:37:21,759
Speaker 15: or one hundreds of thousands of people have been dying

711
00:37:21,800 --> 00:37:25,200
Speaker 15: from fentanyl, and yet they get tarred with the same

712
00:37:25,239 --> 00:37:28,160
Speaker 15: brush as people who have been part of the poorest

713
00:37:28,160 --> 00:37:29,920
Speaker 15: problem and that's Mexico and China.

714
00:37:30,400 --> 00:37:31,440
Speaker 13: So uh I do.

715
00:37:31,680 --> 00:37:35,040
Speaker 15: I did see though that the China retaliatory tariffs want

716
00:37:35,080 --> 00:37:38,280
Speaker 15: in effect kind of mimic that, you know, they're blaming

717
00:37:38,600 --> 00:37:42,520
Speaker 15: bark beetles for bannon our lumber and and soybean fung

718
00:37:42,560 --> 00:37:45,520
Speaker 15: guy for you know, the reason that they're they're going

719
00:37:45,560 --> 00:37:48,440
Speaker 15: to raise tariffs on soybeans. I mean, they're not saying

720
00:37:48,440 --> 00:37:52,320
Speaker 15: these are retaliatory tariffs. They're saying, oh, we've got defective products.

721
00:37:52,800 --> 00:37:55,600
Speaker 15: And so this whole tariff war, you know, is turning

722
00:37:55,680 --> 00:37:59,839
Speaker 15: into the sort of level of of sublime idiocy. I mean,

723
00:37:59,880 --> 00:38:02,239
Speaker 15: like we're going to start blaming things on beetles and

724
00:38:02,719 --> 00:38:06,960
Speaker 15: fungui and not really addressing the current problem. So I

725
00:38:07,000 --> 00:38:10,080
Speaker 15: don't think Donald Trump is going to shy away from

726
00:38:10,120 --> 00:38:13,960
Speaker 15: both the economic argument. These countries have been living off

727
00:38:13,960 --> 00:38:18,600
Speaker 15: of our trade surpluses and you know, living off of

728
00:38:18,640 --> 00:38:22,840
Speaker 15: our trade deficit, and in the meantime they've also been

729
00:38:22,920 --> 00:38:26,200
Speaker 15: hurting our country. So he's going to unload both barrels tonight.

730
00:38:26,239 --> 00:38:27,399
Speaker 15: I have no doubt about that.

731
00:38:28,920 --> 00:38:29,120
Speaker 2: Well.

732
00:38:29,160 --> 00:38:31,640
Speaker 11: And to Rick's point on Canada, as we're hearing this

733
00:38:31,680 --> 00:38:34,160
Speaker 11: administration frame it not as a trade war but as

734
00:38:34,280 --> 00:38:38,480
Speaker 11: a drug war. According to Customs and Border Patrol data,

735
00:38:39,239 --> 00:38:41,919
Speaker 11: that amount of fentanyl that crossed the Canadian border last

736
00:38:42,000 --> 00:38:44,520
Speaker 11: year was just forty three pounds compared to the twenty

737
00:38:44,560 --> 00:38:47,840
Speaker 11: one thousand pounds that crossed over the southern border. So

738
00:38:47,880 --> 00:38:49,640
Speaker 11: we should just bear those facts in mind as we

739
00:38:49,719 --> 00:38:54,360
Speaker 11: consider not just only the justification for these tariffs that

740
00:38:54,360 --> 00:38:56,040
Speaker 11: the President is using, but also the way in which

741
00:38:56,040 --> 00:38:59,160
Speaker 11: it will afform inform what moves forward. Because Genie, if

742
00:38:59,160 --> 00:39:01,919
Speaker 11: these tariffs are to be taken lower, presumably it would

743
00:39:01,920 --> 00:39:05,279
Speaker 11: be because he sees some progress. Have we yet seen

744
00:39:05,360 --> 00:39:08,480
Speaker 11: to find what kind of progress he is looking for?

745
00:39:08,560 --> 00:39:10,839
Speaker 11: What is going to be enough for him to say,

746
00:39:10,880 --> 00:39:13,720
Speaker 11: all right, now you've done what I asked.

747
00:39:14,080 --> 00:39:14,440
Speaker 13: Here we go.

748
00:39:14,480 --> 00:39:15,680
Speaker 11: The tariffs have taken them down?

749
00:39:17,280 --> 00:39:20,000
Speaker 14: So far we have not seen that. And if they're

750
00:39:20,040 --> 00:39:22,680
Speaker 14: going to continue, as Howard Lutnick said that this is

751
00:39:22,760 --> 00:39:25,279
Speaker 14: and you just were talking about fentanyl. This is a

752
00:39:25,400 --> 00:39:29,880
Speaker 14: drug war, not a trade war. How much lower could

753
00:39:30,080 --> 00:39:33,839
Speaker 14: Canada go in terms of ventanyl? They are just one

754
00:39:33,920 --> 00:39:37,360
Speaker 14: percent of the fentanyl intercepted at the US border. You

755
00:39:37,400 --> 00:39:40,239
Speaker 14: don't get much better than that. I mean, certainly we'd

756
00:39:40,280 --> 00:39:42,560
Speaker 14: all like it to be zero but that is not

757
00:39:42,800 --> 00:39:45,960
Speaker 14: the problem. But they're saying that's the problem. So how

758
00:39:46,000 --> 00:39:49,799
Speaker 14: does Canada repair that? There's no way to go, And

759
00:39:49,840 --> 00:39:52,680
Speaker 14: this gives lie to what they have been talking about.

760
00:39:53,040 --> 00:39:58,080
Speaker 14: You know, Donald Trump seems to be responding to a huge, huge,

761
00:39:58,160 --> 00:40:01,760
Speaker 14: real challenge, and that is the loss of manufacturing many

762
00:40:01,840 --> 00:40:04,920
Speaker 14: many decades in the making. But he is not going

763
00:40:05,000 --> 00:40:07,799
Speaker 14: to be able to repair that with a trade war

764
00:40:07,920 --> 00:40:12,160
Speaker 14: against our closest allies without real pain. And I think

765
00:40:12,160 --> 00:40:15,160
Speaker 14: in your great conversation with the congressman, we just heard

766
00:40:15,520 --> 00:40:18,319
Speaker 14: how difficult it is going to be for members of

767
00:40:18,440 --> 00:40:23,239
Speaker 14: Congress to defend that to their constituencies. I mean, we

768
00:40:23,320 --> 00:40:28,120
Speaker 14: even heard Ron Johnson, a fairly conservative, very very conservative guy,

769
00:40:28,239 --> 00:40:30,600
Speaker 14: say his state is going to feel pain as it

770
00:40:30,640 --> 00:40:34,239
Speaker 14: pertains to agriculture and manufacturing as a result of this

771
00:40:34,360 --> 00:40:37,520
Speaker 14: trade war. There is no win here. And Donald Trump

772
00:40:37,560 --> 00:40:39,600
Speaker 14: is not the kind of politician who's going to stand

773
00:40:39,719 --> 00:40:42,439
Speaker 14: up and say we're going to take short term pain

774
00:40:42,560 --> 00:40:44,839
Speaker 14: for long term gain. I don't see him doing that.

775
00:40:45,200 --> 00:40:47,359
Speaker 14: And he can try to blame Biden. I'm sure Rick

776
00:40:47,480 --> 00:40:50,480
Speaker 14: is right he will, but the reality is this is

777
00:40:50,520 --> 00:40:54,080
Speaker 14: a self inflicted Donald Trump wound and it's a wound

778
00:40:54,080 --> 00:40:56,600
Speaker 14: to him politically, and it's a wound to the economy

779
00:40:56,600 --> 00:40:59,080
Speaker 14: and the market that he's going to have to turn around.

780
00:40:59,120 --> 00:41:01,120
Speaker 14: I think he'll be able to do that, but he's

781
00:41:01,160 --> 00:41:04,279
Speaker 14: got to look at what's happening and see the lie

782
00:41:04,719 --> 00:41:06,920
Speaker 14: of what he has been believing so long that you

783
00:41:06,960 --> 00:41:10,080
Speaker 14: can correct the manufacturing decline in the US by a

784
00:41:10,160 --> 00:41:10,680
Speaker 14: trade war?

785
00:41:13,040 --> 00:41:13,239
Speaker 13: Rick?

786
00:41:13,320 --> 00:41:14,839
Speaker 2: Is all this going to make people want to watch

787
00:41:14,880 --> 00:41:17,680
Speaker 2: thirty two million tuned in to see Joe Biden's last

788
00:41:17,680 --> 00:41:20,799
Speaker 2: State of the Union in twenty twenty four? And you

789
00:41:20,840 --> 00:41:22,919
Speaker 2: know that, other than the stock market, I guess TV

790
00:41:23,040 --> 00:41:25,320
Speaker 2: ratings are the closest thing to a metric of success

791
00:41:25,320 --> 00:41:27,359
Speaker 2: for Donald Trump. How much show business do we have

792
00:41:27,400 --> 00:41:28,080
Speaker 2: to consider here?

793
00:41:29,000 --> 00:41:31,759
Speaker 15: Well, he always gets the eyeballs, whether it was you know,

794
00:41:31,880 --> 00:41:36,840
Speaker 15: in the days of Apprentice or in his own political career.

795
00:41:36,920 --> 00:41:39,800
Speaker 15: So I have no doubt we could be breaking records tonight.

796
00:41:40,200 --> 00:41:44,120
Speaker 15: Plus the onslaught of his policies in the last five

797
00:41:44,200 --> 00:41:48,839
Speaker 15: weeks is you know, unprecedented in Washington for a new administration.

798
00:41:49,480 --> 00:41:52,640
Speaker 15: So I am pretty confident based on just my own

799
00:41:52,760 --> 00:41:56,480
Speaker 15: poll of talking to people I know wondering like, what's

800
00:41:56,600 --> 00:41:59,160
Speaker 15: next They're going to want to tune in and see

801
00:41:59,200 --> 00:42:03,719
Speaker 15: what news makes tonight because it could impact you wherever you.

802
00:42:03,640 --> 00:42:07,799
Speaker 11: Are well well as many people stick around for the

803
00:42:07,840 --> 00:42:10,600
Speaker 11: Democratic response, Genie, it's going to be delivered by the

804
00:42:10,640 --> 00:42:13,600
Speaker 11: new Democratic Senator, Alissa Slotkin of Michigan was able to

805
00:42:13,640 --> 00:42:15,719
Speaker 11: win her Senate seat in a state that Donald Trump

806
00:42:15,800 --> 00:42:19,200
Speaker 11: carried in November. What is her message going to be?

807
00:42:21,200 --> 00:42:24,320
Speaker 14: I think her message is going to be about kitchen

808
00:42:24,400 --> 00:42:27,319
Speaker 14: table issues. She proved she could win a state like

809
00:42:27,360 --> 00:42:30,640
Speaker 14: Michigan that Donald Trump also won. She's got to show

810
00:42:30,680 --> 00:42:34,719
Speaker 14: Democrats a path forward which is appealing to people who

811
00:42:34,800 --> 00:42:38,400
Speaker 14: split their ticket in twenty twenty four because she focused

812
00:42:38,440 --> 00:42:42,160
Speaker 14: like a laser beam on issues that they really care about,

813
00:42:42,160 --> 00:42:45,960
Speaker 14: which are table sorry, kitchen issues. But of course, Kaylee,

814
00:42:46,000 --> 00:42:47,719
Speaker 14: she does not want to be in a kitchen We

815
00:42:47,760 --> 00:42:50,200
Speaker 14: saw that last year round. It's not going to go well.

816
00:42:50,280 --> 00:42:53,480
Speaker 14: So I suspect she'll have another background for the speech tonight.

817
00:42:55,000 --> 00:42:57,759
Speaker 11: Yeah, perhaps not going to take a play out of

818
00:42:58,239 --> 00:43:01,280
Speaker 11: Katie Britt's book. Genie, Shansey and Rick Davis our signature

819
00:43:01,320 --> 00:43:03,560
Speaker 11: political panel with us on the early edition. They'll be

820
00:43:03,600 --> 00:43:05,279
Speaker 11: with us on the late edition of Balance of Power,

821
00:43:05,320 --> 00:43:07,840
Speaker 11: and of course for our special coverage of this address.

822
00:43:07,880 --> 00:43:10,080
Speaker 11: It begins at eight pm Eastern Time right here on

823
00:43:10,120 --> 00:43:13,920
Speaker 11: Bloomberg TV and Radio. And who knows how long it

824
00:43:13,960 --> 00:43:15,600
Speaker 11: will go for the White House is saying that the

825
00:43:15,600 --> 00:43:18,319
Speaker 11: President will be at the Capitol for more than two hours.

826
00:43:18,520 --> 00:43:21,360
Speaker 2: Yeah, eleven twenty. He could still be shaking hands and

827
00:43:21,920 --> 00:43:24,560
Speaker 2: backslap and that's just the way these things go. Questions

828
00:43:24,560 --> 00:43:26,360
Speaker 2: too about whether he might have a couple of meetings

829
00:43:26,400 --> 00:43:31,319
Speaker 2: or more deliberate conversations with ten days left till a

830
00:43:31,320 --> 00:43:35,560
Speaker 2: funding deadline in the government. Interesting you mentioned Senator Slotkin,

831
00:43:35,600 --> 00:43:37,880
Speaker 2: the premiere of Ontario. Dug Ford, who had some pretty

832
00:43:37,920 --> 00:43:40,439
Speaker 2: tough words for Donald Trump today, says he will add

833
00:43:40,480 --> 00:43:43,520
Speaker 2: a twenty five percent tax on electricity that goes to

834
00:43:43,560 --> 00:43:44,880
Speaker 2: states including Michigan.

835
00:43:45,040 --> 00:43:47,080
Speaker 11: Yeah, and he'll do so with a smile, right, He.

836
00:43:47,080 --> 00:43:49,440
Speaker 2: Said that a smile on his face. He wasn't smiling

837
00:43:49,480 --> 00:43:50,160
Speaker 2: when he said it, though.

838
00:43:50,360 --> 00:43:53,160
Speaker 11: Yeah, all right, we'll have more on the tariffs coming

839
00:43:53,200 --> 00:43:55,360
Speaker 11: up in just a moment with someone who used to

840
00:43:55,400 --> 00:43:58,160
Speaker 11: serve at the USTR in the last administration. That's just

841
00:43:58,160 --> 00:44:00,960
Speaker 11: ahead on Balance of power on Bloomberg TV and radio.

842
00:44:03,160 --> 00:44:06,640
Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch

843
00:44:06,719 --> 00:44:09,759
Speaker 1: us live weekdays at noon and five pm Eastern on

844
00:44:09,880 --> 00:44:13,120
Speaker 1: Apple Cockley and Android Auto with the Bloomberg Business App.

845
00:44:13,160 --> 00:44:16,200
Speaker 1: You can also listen live on Amazon Alexa from our

846
00:44:16,200 --> 00:44:22,360
Speaker 1: flagship New York station, Just Say Alexa played Bloomberg eleven thirty.

847
00:44:22,239 --> 00:44:24,920
Speaker 2: On Tariff Tuesday. Thanks for being with us on the

848
00:44:24,920 --> 00:44:28,160
Speaker 2: fastest show in politics. We're live in Washington, where President

849
00:44:28,200 --> 00:44:30,759
Speaker 2: Trump will be addressing a joint session of Congress a

850
00:44:30,760 --> 00:44:33,600
Speaker 2: bit after nine pm Eastern time. We'll have special coverage

851
00:44:33,600 --> 00:44:35,759
Speaker 2: starting at eight and hope you'll be with us. Our

852
00:44:35,800 --> 00:44:39,560
Speaker 2: signature panel will be as well, Rick Davis and Janie Shanzano.

853
00:44:39,760 --> 00:44:43,560
Speaker 2: As we consider the implementation of Tariff's Kayley on Canada

854
00:44:43,600 --> 00:44:47,200
Speaker 2: and Mexico, We've already heard about retaliation from Canada, and

855
00:44:47,239 --> 00:44:50,239
Speaker 2: Donald Trump says we'll just keep on reciprocating. It's an

856
00:44:50,239 --> 00:44:53,640
Speaker 2: interesting moment, though, as the Commerce Secretary Howard Lutnik frames

857
00:44:53,719 --> 00:44:57,080
Speaker 2: this as a drug war, suggesting that the trade war

858
00:44:57,160 --> 00:44:58,720
Speaker 2: doesn't begin until April second.

859
00:44:59,000 --> 00:45:01,600
Speaker 11: Well, in April second is when we're expecting a laundry

860
00:45:01,600 --> 00:45:04,080
Speaker 11: list of other tariffs to take effect. The reciprocal tariffs

861
00:45:04,120 --> 00:45:06,640
Speaker 11: that President Trump was alluding to could impact Canada on

862
00:45:06,680 --> 00:45:09,719
Speaker 11: top of what already has been imposed. Today auto tariffs

863
00:45:09,960 --> 00:45:13,000
Speaker 11: are set to go into effect. He suggested europe tariffs

864
00:45:13,000 --> 00:45:16,200
Speaker 11: of twenty five percent may be implemented in April as well.

865
00:45:16,680 --> 00:45:18,880
Speaker 11: By all accounts, at least at this stage, the President's

866
00:45:18,880 --> 00:45:21,120
Speaker 11: signaling things only go up from here in terms of

867
00:45:21,160 --> 00:45:24,040
Speaker 11: the way in which the United States taxes imports. But

868
00:45:24,120 --> 00:45:25,640
Speaker 11: what we are dealing with right now, and what the

869
00:45:25,640 --> 00:45:27,440
Speaker 11: market is contending with, is the S and P five

870
00:45:27,520 --> 00:45:29,640
Speaker 11: hundred has now erased all gains it made in the

871
00:45:29,680 --> 00:45:33,600
Speaker 11: aftermath of President Trump's election in November. Is the reality

872
00:45:33,719 --> 00:45:36,040
Speaker 11: that our three biggest trading partners now have tariffs of

873
00:45:36,040 --> 00:45:38,319
Speaker 11: at least twenty percent on pretty much every good that

874
00:45:38,360 --> 00:45:40,759
Speaker 11: comes for them, borrowing Canadian energy, which of course is

875
00:45:40,760 --> 00:45:41,400
Speaker 11: at ten percent.

876
00:45:41,560 --> 00:45:45,120
Speaker 2: S ANDP fivert now back below fifty eight hundred today, Kaylee,

877
00:45:45,160 --> 00:45:48,520
Speaker 2: Yesterday was the biggest loss of the year for the

878
00:45:48,600 --> 00:45:51,760
Speaker 2: S and P. The vics is rising, and the market

879
00:45:51,800 --> 00:45:53,880
Speaker 2: wants to know what's next. Maybe we'll learn tonight.

880
00:45:54,400 --> 00:45:56,879
Speaker 11: Well, yes, I'm imagining we're going to get a lot

881
00:45:56,920 --> 00:45:58,880
Speaker 11: more of this from the President's speech, and as we

882
00:45:58,960 --> 00:46:01,120
Speaker 11: look ahead to that and consider or the impact of

883
00:46:01,160 --> 00:46:03,680
Speaker 11: this policy. We turn to Greta High. She's partner at

884
00:46:03,719 --> 00:46:07,000
Speaker 11: Wiley Ryan and former General counsel for the Office of

885
00:46:07,040 --> 00:46:09,719
Speaker 11: the United States Trade Representative. She's been dealing with trade

886
00:46:09,719 --> 00:46:12,759
Speaker 11: issues for many, many years. Greta, thanks for joining us

887
00:46:12,760 --> 00:46:15,880
Speaker 11: here on balance of power. When we consider this notion

888
00:46:16,320 --> 00:46:20,120
Speaker 11: of things getting ratcheted up further, reciprocal tariffs going into

889
00:46:20,120 --> 00:46:22,920
Speaker 11: place in just a few weeks, is it your expectation

890
00:46:23,520 --> 00:46:26,759
Speaker 11: that countries in advance of that may actually lower their

891
00:46:26,760 --> 00:46:28,759
Speaker 11: tariff rate so that they don't face as high a

892
00:46:28,840 --> 00:46:31,759
Speaker 11: levey from the United States or is this just going

893
00:46:31,800 --> 00:46:33,560
Speaker 11: to raise the cost of everything.

894
00:46:35,600 --> 00:46:38,000
Speaker 6: Thank you for having me. I think we don't know.

895
00:46:38,320 --> 00:46:43,840
Speaker 6: I wouldn't expect countries to preemptively lower their tariffs. I

896
00:46:43,840 --> 00:46:48,120
Speaker 6: think because of some uncertainty as to what exactly those

897
00:46:49,360 --> 00:46:54,080
Speaker 6: reciprocal tariffs will look like, what they will count, and

898
00:46:54,239 --> 00:46:57,560
Speaker 6: how they'll be implemented. And so if countries were to

899
00:46:57,680 --> 00:47:02,480
Speaker 6: lower their tariffs today before those acts were taken, it

900
00:47:02,520 --> 00:47:07,040
Speaker 6: would really be negotiating against themselves and trying to predict

901
00:47:07,400 --> 00:47:09,480
Speaker 6: something that that's just unpredictable.

902
00:47:09,560 --> 00:47:09,879
Speaker 13: Right now.

903
00:47:09,880 --> 00:47:12,239
Speaker 6: They don't know exactly what will come out of the

904
00:47:12,239 --> 00:47:18,279
Speaker 6: Trump administration and those reciprocal tariff actions that they've discussed.

905
00:47:20,040 --> 00:47:22,480
Speaker 2: Well, it'll be interesting to hear how Donald Trump frames

906
00:47:22,560 --> 00:47:26,839
Speaker 2: us tonight. We've heard a lot about temporary pain, that

907
00:47:26,880 --> 00:47:30,560
Speaker 2: this will be the cost of saving lives Greta when

908
00:47:30,800 --> 00:47:35,320
Speaker 2: the flow of Fentanyla stopped at our northern and southern borders.

909
00:47:35,600 --> 00:47:38,440
Speaker 2: How temporary would that pain be before the rest of

910
00:47:38,440 --> 00:47:42,160
Speaker 2: Donald Trump's policies, presuming that things are all passed and

911
00:47:42,200 --> 00:47:44,400
Speaker 2: codified on Capitol Hill or put into effects.

912
00:47:46,400 --> 00:47:49,319
Speaker 6: Well, we don't know, in part because we don't know

913
00:47:49,560 --> 00:47:54,040
Speaker 6: what the asks are on the fentanyl and immigration side.

914
00:47:54,160 --> 00:47:56,920
Speaker 6: We haven't seen a lot of news come out about

915
00:47:57,040 --> 00:48:01,120
Speaker 6: the negotiations with Canada and Mexico and what specifically the

916
00:48:01,160 --> 00:48:06,080
Speaker 6: Trump administration is asking in order to resolve these crises

917
00:48:06,160 --> 00:48:11,080
Speaker 6: and make a dent on the fentanyl and immigration issues.

918
00:48:11,600 --> 00:48:13,960
Speaker 6: And then, of course there is the question of what

919
00:48:14,080 --> 00:48:18,680
Speaker 6: comes next with respect to reciprable tariffs and other actions

920
00:48:18,960 --> 00:48:23,120
Speaker 6: that have either started or have been discussed. And so

921
00:48:23,440 --> 00:48:26,560
Speaker 6: I think the name of the game for these trading

922
00:48:26,600 --> 00:48:31,840
Speaker 6: partners and for businesses across the border is uncertainty about

923
00:48:31,840 --> 00:48:32,880
Speaker 6: what the future holds.

924
00:48:33,000 --> 00:48:36,200
Speaker 2: Yeah, well, just to follow up on that quickly, we

925
00:48:36,239 --> 00:48:38,680
Speaker 2: heard from the Commerce Secretary, Howard Lutnik this morning. He

926
00:48:38,760 --> 00:48:42,960
Speaker 2: said that we need to see material reduction in autopsy

927
00:48:43,160 --> 00:48:47,640
Speaker 2: deaths from opioids. That is apparently the metric based on

928
00:48:47,680 --> 00:48:51,399
Speaker 2: your experience working with the USTR. How is that made

929
00:48:51,440 --> 00:48:54,919
Speaker 2: clear and how can our partners reach a goal like that?

930
00:48:56,600 --> 00:49:00,279
Speaker 6: Well, my experience at the US Trade Representative Office, Uh,

931
00:49:00,560 --> 00:49:04,799
Speaker 6: you know it doesn't really uh shed light onto this

932
00:49:04,880 --> 00:49:08,120
Speaker 6: because this is really breaking new ground for this administration.

933
00:49:08,400 --> 00:49:13,359
Speaker 6: They're using new authorities with a new rationale in the

934
00:49:13,400 --> 00:49:18,240
Speaker 6: trade space, sort of crossing over between what we normally

935
00:49:18,239 --> 00:49:21,520
Speaker 6: think of as law enforcement issues public health issues and

936
00:49:21,600 --> 00:49:27,400
Speaker 6: tying them to trade tools. And in this case, you know,

937
00:49:27,920 --> 00:49:31,560
Speaker 6: it's a question how you know what's tied directly to

938
00:49:32,440 --> 00:49:35,799
Speaker 6: our trade relationships with Canada and Mexico and what may

939
00:49:35,800 --> 00:49:40,480
Speaker 6: not be And so you know that again, it just

940
00:49:40,560 --> 00:49:43,200
Speaker 6: raises a question of how, as you put it, how

941
00:49:43,200 --> 00:49:46,359
Speaker 6: do you measure what's the outcome? How do you know

942
00:49:46,440 --> 00:49:50,080
Speaker 6: that this is successful in addressing these issues, and what

943
00:49:50,200 --> 00:49:52,640
Speaker 6: are the actions that they're really looking for here?

944
00:49:54,280 --> 00:49:57,120
Speaker 11: Well, I'm glad, Greta that you raise the authorities with

945
00:49:57,160 --> 00:50:00,840
Speaker 11: which the president is taking this action. We've both Canada,

946
00:50:00,880 --> 00:50:03,160
Speaker 11: through Justin Trudeau, the Prime Minister, as well as China

947
00:50:03,200 --> 00:50:06,000
Speaker 11: suggests that they will be challenging these measures at the

948
00:50:06,040 --> 00:50:10,880
Speaker 11: World Trade Organization? Could this be overturned through that mechanism?

949
00:50:10,920 --> 00:50:14,200
Speaker 11: How binding would any WTO findings be? Is there a

950
00:50:14,280 --> 00:50:17,560
Speaker 11: question around whether President Trump actually has the ability to

951
00:50:17,719 --> 00:50:18,839
Speaker 11: continue enforcing this.

952
00:50:21,200 --> 00:50:24,560
Speaker 6: So yes, I saw the statements around WTO action at

953
00:50:24,600 --> 00:50:29,160
Speaker 6: this stage bringing claims at the World Trade Organization. In

954
00:50:29,200 --> 00:50:34,360
Speaker 6: some respects, it's symbolic. What the World Trade Organization does

955
00:50:34,520 --> 00:50:38,920
Speaker 6: through dispute settlement is give trading partners the sort of

956
00:50:39,680 --> 00:50:44,600
Speaker 6: green light to retaliate for trade actions. Canada is already

957
00:50:44,640 --> 00:50:48,680
Speaker 6: moving forward with its retaliation. Mexico is doing so as well,

958
00:50:49,400 --> 00:50:52,200
Speaker 6: so you can see that they're not waiting for those outcomes.

959
00:50:52,880 --> 00:50:57,560
Speaker 6: They may still go ahead at the WTO to make

960
00:50:57,600 --> 00:51:00,839
Speaker 6: the point that in their view, these are are inconsistent.

961
00:51:02,440 --> 00:51:05,840
Speaker 6: The Trump administration may have arguments that there's exceptions that

962
00:51:05,920 --> 00:51:08,480
Speaker 6: allow them to take this type of action, and we'll

963
00:51:08,520 --> 00:51:09,719
Speaker 6: have to see how that plays out.

964
00:51:11,160 --> 00:51:13,080
Speaker 2: As we spend time with Greta, I want to remind

965
00:51:13,080 --> 00:51:15,360
Speaker 2: our viewers and listeners we have an important conversation on

966
00:51:15,400 --> 00:51:19,160
Speaker 2: the way from Bloomberg invest with Gary cohenevice chair of IBM.

967
00:51:19,200 --> 00:51:21,600
Speaker 2: We're only a couple of minutes away from that, and'd

968
00:51:21,640 --> 00:51:23,440
Speaker 2: be curious to hear his take on this. Greta and

969
00:51:23,480 --> 00:51:26,840
Speaker 2: I want to tap your experience on Capitol Hill because

970
00:51:26,840 --> 00:51:30,240
Speaker 2: you are also Senior International Trade Council for the US

971
00:51:30,440 --> 00:51:34,239
Speaker 2: Senate Committee on Finance, and among the legislation that you

972
00:51:34,360 --> 00:51:38,400
Speaker 2: helped to craft and implement was the Miscellaneous Tariff Bill

973
00:51:38,520 --> 00:51:42,040
Speaker 2: Act of twenty eighteen. Now you must be smirking a

974
00:51:42,040 --> 00:51:44,960
Speaker 2: little bit knowing that the aim of that legislation was

975
00:51:44,960 --> 00:51:49,239
Speaker 2: to reduce or eliminate tariffs on imported goods. Will lawmakers

976
00:51:49,400 --> 00:51:52,239
Speaker 2: have any role in this? Will there be any legislation

977
00:51:52,960 --> 00:51:55,799
Speaker 2: surrounding the implementation of these tariffs? Or is this all

978
00:51:55,840 --> 00:51:57,080
Speaker 2: Donald Trump all the time?

979
00:51:58,719 --> 00:52:01,759
Speaker 6: Well, I think the current is assessment with this Congress

980
00:52:01,880 --> 00:52:06,240
Speaker 6: is that it's unlikely they'll be doing anything legislatively.

981
00:52:05,600 --> 00:52:06,920
Speaker 9: To alter the course.

982
00:52:07,400 --> 00:52:10,759
Speaker 6: It is very difficult to pass trade legislation. They would

983
00:52:10,760 --> 00:52:13,759
Speaker 6: need to do so on a bipartisan basis, overcoming a

984
00:52:13,800 --> 00:52:18,280
Speaker 6: potential veto from the President. I think that said members

985
00:52:18,320 --> 00:52:27,040
Speaker 6: of Congress will hear rising and continuing concerns from constituents, businesses, exporters, importers,

986
00:52:27,080 --> 00:52:31,240
Speaker 6: potentially consumers as these tariffs go into place and as

987
00:52:31,320 --> 00:52:37,719
Speaker 6: they increase, and that political pressure will start to influence

988
00:52:37,840 --> 00:52:41,520
Speaker 6: members and by extension, the White House potentially.

989
00:52:44,040 --> 00:52:46,720
Speaker 11: Well, the White House doesn't seem too influenced by any

990
00:52:47,040 --> 00:52:49,560
Speaker 11: particular political pressure at this time, as it is standing

991
00:52:49,600 --> 00:52:52,759
Speaker 11: by its policies here. Also keeping in mind, Greta, that

992
00:52:52,800 --> 00:52:55,640
Speaker 11: they see this as a means to raise revenue with

993
00:52:55,680 --> 00:52:58,600
Speaker 11: the tariff levels on this quantity of imports that we're

994
00:52:58,600 --> 00:53:00,800
Speaker 11: dealing with now a half one and a half trillion

995
00:53:00,840 --> 00:53:03,719
Speaker 11: dollars worth from our three largest trading partners, with the

996
00:53:03,719 --> 00:53:07,239
Speaker 11: potential for reciprocal tariffs, with the Commerce Secretary suggesting that

997
00:53:07,239 --> 00:53:10,879
Speaker 11: could be another several hundred billion dollars raised. How does

998
00:53:10,960 --> 00:53:13,239
Speaker 11: this mathematically work when looking at what it's going to

999
00:53:13,280 --> 00:53:16,080
Speaker 11: do to the coffers of the United States Treasury.

1000
00:53:17,680 --> 00:53:21,439
Speaker 6: Well, certainly it will increase the tariff revenue. You have

1001
00:53:21,520 --> 00:53:25,120
Speaker 6: to when you're estimating out the revenue collection from tariffs,

1002
00:53:25,120 --> 00:53:27,880
Speaker 6: you have to take into account the fact that imports

1003
00:53:27,880 --> 00:53:30,480
Speaker 6: will likely go down, So it's not going to be

1004
00:53:30,560 --> 00:53:36,200
Speaker 6: twenty five percent on the current level of trade continuing forever,

1005
00:53:36,520 --> 00:53:39,520
Speaker 6: because presumably the current level of imports will go down

1006
00:53:39,560 --> 00:53:42,279
Speaker 6: as those imports become more expensive. And I think that

1007
00:53:42,280 --> 00:53:45,959
Speaker 6: that's part of the objectives that the administration is looking for,

1008
00:53:46,960 --> 00:53:49,640
Speaker 6: so it will be a revenue raiser. I think it's

1009
00:53:51,520 --> 00:53:54,800
Speaker 6: a question of does do the tariffs stay in place

1010
00:53:54,960 --> 00:53:59,600
Speaker 6: in their current form? Is the administration able to maintain that,

1011
00:54:01,000 --> 00:54:04,160
Speaker 6: and will the trades stay at this level or will

1012
00:54:04,160 --> 00:54:07,560
Speaker 6: it decrease in a way that really diminishes the amount

1013
00:54:07,600 --> 00:54:10,480
Speaker 6: of tariff collection that results.

1014
00:54:11,960 --> 00:54:14,080
Speaker 2: I know it's all about Canada today, Greta, but I

1015
00:54:14,160 --> 00:54:17,200
Speaker 2: am interested that no one's talking about China very much.

1016
00:54:17,239 --> 00:54:20,239
Speaker 2: Donald Trump said he didn't expect Beijing to retaliate too much,

1017
00:54:21,160 --> 00:54:23,920
Speaker 2: were his words. But we've got quite the retaliation up

1018
00:54:23,960 --> 00:54:26,360
Speaker 2: to fifteen percent of a bunch of farm products here,

1019
00:54:26,560 --> 00:54:31,000
Speaker 2: including soybeans, meat, and grains. Are food prices going.

1020
00:54:30,880 --> 00:54:37,920
Speaker 6: Up, well, we'll see. So it's interesting because China did

1021
00:54:37,960 --> 00:54:42,120
Speaker 6: take strong retaliation, but of course, compared to what the

1022
00:54:42,160 --> 00:54:44,239
Speaker 6: tariffs have been put in place so far. I mean,

1023
00:54:44,280 --> 00:54:47,239
Speaker 6: we've put in place tariffs now, just in this most

1024
00:54:47,280 --> 00:54:50,880
Speaker 6: recent action on over four hundred billion dollars worth of imports,

1025
00:54:50,960 --> 00:54:58,280
Speaker 6: and China is retaliating with targeted tariffs on key agricultural

1026
00:54:58,360 --> 00:55:02,680
Speaker 6: product in the tens of billions, right, but with real

1027
00:55:02,800 --> 00:55:08,880
Speaker 6: impact on those sectors, and so that will cause pain

1028
00:55:09,160 --> 00:55:12,880
Speaker 6: in certain congressional districts in certain parts of the country,

1029
00:55:13,800 --> 00:55:18,200
Speaker 6: and it will be another cost of this policy.

1030
00:55:19,160 --> 00:55:21,360
Speaker 2: All right, Greta, thank you so much for the time.

1031
00:55:25,920 --> 00:55:29,120
Speaker 2: Thanks for listening to the Balance of Power podcast. Make

1032
00:55:29,160 --> 00:55:32,120
Speaker 2: sure to subscribe if you haven't already, at Apple, Spotify,

1033
00:55:32,200 --> 00:55:34,799
Speaker 2: or wherever you get your podcasts, and you can find

1034
00:55:34,840 --> 00:55:38,080
Speaker 2: us live every weekday from Washington, DC at noontime Eastern

1035
00:55:38,400 --> 00:55:39,800
Speaker 2: at Bloomberg dot com.