1
00:00:02,520 --> 00:00:07,080
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:07,520 --> 00:00:09,559
Speaker 2: I want to now bring in our Bloomberg TV and

3
00:00:09,680 --> 00:00:13,239
Speaker 2: radio audiences worldwide. We're going to simulcast this joining us

4
00:00:13,240 --> 00:00:16,599
Speaker 2: now as White House Counsel of Economic Advisors Chairman Steven Meyer,

5
00:00:16,640 --> 00:00:19,520
Speaker 2: and Steven thanks very much for joining us. We were

6
00:00:19,560 --> 00:00:24,120
Speaker 2: just listening to David Costin of Goldman Sachs giving an

7
00:00:24,120 --> 00:00:28,920
Speaker 2: optimistic view of the stock market and the way companies

8
00:00:28,960 --> 00:00:33,559
Speaker 2: are dealing with tariffs, and I wonder how you think

9
00:00:33,600 --> 00:00:36,600
Speaker 2: about the uncertainty that this creates. You definitely must have

10
00:00:36,680 --> 00:00:40,320
Speaker 2: calculated that in coming up with this strategy, and if

11
00:00:40,520 --> 00:00:42,880
Speaker 2: we're going to see an end to that uncertainty come

12
00:00:43,159 --> 00:00:44,240
Speaker 2: August first.

13
00:00:45,200 --> 00:00:47,320
Speaker 1: Good morning, Thanks for having me. Look, you know, I

14
00:00:47,360 --> 00:00:49,800
Speaker 1: do see the uncertainty starting to reduce in the near term.

15
00:00:50,360 --> 00:00:52,320
Speaker 1: You know, part of the part of the benefit of

16
00:00:52,360 --> 00:00:55,000
Speaker 1: uncertainty is it gives us leverage and negotiations. Right Like,

17
00:00:55,040 --> 00:00:58,040
Speaker 1: the President knows how to extract concessions from our trading partners,

18
00:00:58,200 --> 00:01:00,600
Speaker 1: and he has been very successfully doing so. Now as

19
00:01:00,640 --> 00:01:02,520
Speaker 1: what you've seen with a number of these letters is

20
00:01:02,600 --> 00:01:05,679
Speaker 1: there's some countries that haven't made the concessions that the

21
00:01:05,720 --> 00:01:08,640
Speaker 1: United States requires and as a result of the decades

22
00:01:08,640 --> 00:01:11,959
Speaker 1: of accumulated trade deficits. The President has decided that, you know,

23
00:01:12,040 --> 00:01:14,640
Speaker 1: teriff rates should ratchet back off for those countries on

24
00:01:14,800 --> 00:01:17,160
Speaker 1: effect of August first, and I expect that to happen.

25
00:01:17,440 --> 00:01:19,520
Speaker 3: I want to talk more about the sectoral tariffs in

26
00:01:19,560 --> 00:01:22,440
Speaker 3: section two thirty two. You look at copper just over

27
00:01:22,440 --> 00:01:25,200
Speaker 3: the last twenty four hours and the price increase you've

28
00:01:25,240 --> 00:01:28,000
Speaker 3: seen in copper alone. This is a critical input for

29
00:01:28,200 --> 00:01:32,600
Speaker 3: data centers, for power grids, for industrial machinery, and as

30
00:01:32,640 --> 00:01:35,600
Speaker 3: the administration looks to bring more manufacturing on shore, how

31
00:01:35,680 --> 00:01:38,679
Speaker 3: isn't it the case that a fifty percent tariff would

32
00:01:38,760 --> 00:01:43,320
Speaker 3: impact some of those other efforts to otherwise power the economy.

33
00:01:44,440 --> 00:01:47,240
Speaker 1: So you have to differentiate between changes in relative prices

34
00:01:47,240 --> 00:01:49,200
Speaker 1: and changes in the general price level. And when you

35
00:01:49,240 --> 00:01:52,400
Speaker 1: target a specific good with the tariff, like copper or

36
00:01:52,520 --> 00:01:54,760
Speaker 1: or some other specific good, you're going to get relative

37
00:01:54,800 --> 00:01:57,600
Speaker 1: price changes, and that's that's totally expected. But that doesn't

38
00:01:57,600 --> 00:01:59,600
Speaker 1: mean that there's an increase in the general price level

39
00:02:00,000 --> 00:02:03,240
Speaker 1: between inflation, because there are lots of you know, thousands

40
00:02:03,280 --> 00:02:05,720
Speaker 1: of products and services that go into the general price level,

41
00:02:05,760 --> 00:02:07,880
Speaker 1: and it's an average a way to average across all

42
00:02:07,920 --> 00:02:11,080
Speaker 1: of those. And we just published research yesterday showing that

43
00:02:11,120 --> 00:02:14,799
Speaker 1: there has been no tariff induced inflation in a general

44
00:02:14,800 --> 00:02:18,760
Speaker 1: price level since since the teriffs began being implemented in January.

45
00:02:19,000 --> 00:02:21,160
Speaker 1: Quite to the contrary of all the all of the

46
00:02:21,160 --> 00:02:23,359
Speaker 1: cassandras that were shouting that it was going to be extremely,

47
00:02:23,520 --> 00:02:25,960
Speaker 1: extremely inflationary, there's just no evidence of that thus far,

48
00:02:26,280 --> 00:02:27,520
Speaker 1: just like in twenty eighteen, twenty nineteen.

49
00:02:27,680 --> 00:02:29,359
Speaker 3: H listen, I read the research and we'll get back

50
00:02:29,360 --> 00:02:31,960
Speaker 3: to it. But on copper, I want to read this

51
00:02:32,000 --> 00:02:34,280
Speaker 3: note from Jeffreys. They say that the US does not

52
00:02:34,480 --> 00:02:39,560
Speaker 3: have nearly enough mindsmelter refinery capacity to be self sufficient

53
00:02:39,600 --> 00:02:41,919
Speaker 3: in copper, So then why target it.

54
00:02:43,360 --> 00:02:45,040
Speaker 1: Well, we need more of it, We need more of

55
00:02:45,080 --> 00:02:47,880
Speaker 1: it produced domestically. You know, there are certain critical minerals,

56
00:02:47,880 --> 00:02:50,360
Speaker 1: of which copper is one that you just absolutely need

57
00:02:50,360 --> 00:02:52,840
Speaker 1: if you're going to have a manufacturing sector. And having

58
00:02:52,840 --> 00:02:56,320
Speaker 1: a manufacturing sector is important, not just economically because it

59
00:02:56,360 --> 00:02:59,120
Speaker 1: tends to be a high high capital, high productivity field

60
00:02:59,520 --> 00:03:02,600
Speaker 1: with you know, good paying jobs, but also for national security.

61
00:03:02,800 --> 00:03:04,560
Speaker 1: You cannot defend yourselves if you do not have the

62
00:03:04,639 --> 00:03:08,079
Speaker 1: robust manufacturing sector and critical minerals like copper are essential

63
00:03:08,120 --> 00:03:10,760
Speaker 1: to that. So we'll be a little corner a market

64
00:03:10,800 --> 00:03:12,960
Speaker 1: in copper. Absolutely not. But can we make more than

65
00:03:12,960 --> 00:03:13,560
Speaker 1: we currently do?

66
00:03:13,720 --> 00:03:13,960
Speaker 3: Yes?

67
00:03:14,280 --> 00:03:17,480
Speaker 2: So how long will that take? I mean, for example,

68
00:03:17,560 --> 00:03:21,880
Speaker 2: when will these copper tariffs go into effect? Or is

69
00:03:21,919 --> 00:03:26,240
Speaker 2: this just a stick rather than a carrot that you

70
00:03:26,639 --> 00:03:31,600
Speaker 2: use to try and motivate the industry. No?

71
00:03:31,680 --> 00:03:33,720
Speaker 1: Well, the President said we're going to do copper tariffs,

72
00:03:33,720 --> 00:03:35,800
Speaker 1: and I think the president, you know, I think the

73
00:03:35,840 --> 00:03:38,240
Speaker 1: President follows through on his promises, so I would expect

74
00:03:38,280 --> 00:03:40,400
Speaker 1: them to happen. I don't have a I don't have

75
00:03:40,480 --> 00:03:42,760
Speaker 1: a date for that happening yet. Well I don't. I mean,

76
00:03:42,800 --> 00:03:44,200
Speaker 1: I don't have a date for that happening. You know

77
00:03:44,240 --> 00:03:46,080
Speaker 1: that that process is underway.

78
00:03:46,120 --> 00:03:48,000
Speaker 2: All right. I want to ask also about you know,

79
00:03:48,080 --> 00:03:51,760
Speaker 2: the first point that you made, using tariffs not necessarily

80
00:03:51,760 --> 00:03:56,080
Speaker 2: as a revenue raiser, but as leverage in discussions. I've

81
00:03:56,200 --> 00:04:00,640
Speaker 2: watched Japan tariff US auto makers for decades now, and

82
00:04:00,680 --> 00:04:03,040
Speaker 2: they refuse to back down. Are you going to be

83
00:04:03,080 --> 00:04:06,680
Speaker 2: able to extract that kind of concession from such a

84
00:04:06,720 --> 00:04:09,160
Speaker 2: stubborn economy?

85
00:04:09,600 --> 00:04:11,440
Speaker 1: Look, you know, I think that the President is one

86
00:04:11,480 --> 00:04:14,160
Speaker 1: of the best negotiators in history. I mean, he's spent

87
00:04:14,360 --> 00:04:18,800
Speaker 1: decades negotiating deals across every field, from commercial real estate

88
00:04:18,839 --> 00:04:21,520
Speaker 1: to international trade, and I have no doubt that he

89
00:04:22,080 --> 00:04:25,480
Speaker 1: can negotiate successfully now too. But in order to negotiate successfully,

90
00:04:25,520 --> 00:04:27,200
Speaker 1: other countries have to know that you're serious and that

91
00:04:27,240 --> 00:04:29,200
Speaker 1: you're willing to You're willing to do what it takes

92
00:04:29,200 --> 00:04:31,039
Speaker 1: to get there, and that's what these letters show that

93
00:04:31,040 --> 00:04:34,039
Speaker 1: we are absolutely serious. So you know, I hope that

94
00:04:34,120 --> 00:04:36,040
Speaker 1: a country la Japan comes to its senses and does

95
00:04:36,160 --> 00:04:38,760
Speaker 1: make the concessions they need, because it'll be better for

96
00:04:38,800 --> 00:04:39,359
Speaker 1: them if they do.

97
00:04:40,120 --> 00:04:41,640
Speaker 3: Steven, I do want to go back to your report,

98
00:04:41,680 --> 00:04:43,680
Speaker 3: and I do appreciate the reports that have been coming

99
00:04:43,720 --> 00:04:46,040
Speaker 3: out of the Council of Economic Advisors. I have been

100
00:04:46,120 --> 00:04:49,000
Speaker 3: reading all of it. On the most recent report on

101
00:04:49,320 --> 00:04:52,400
Speaker 3: the imported goods inflation, what do you say to the

102
00:04:52,400 --> 00:04:55,120
Speaker 3: people that are looking at the impact of energy prices,

103
00:04:55,160 --> 00:04:59,120
Speaker 3: because if you subtract petroleum, you're not getting the same impact.

104
00:04:59,120 --> 00:05:02,000
Speaker 3: In fact, you're seeing goods rising in many categories that

105
00:05:02,040 --> 00:05:05,720
Speaker 3: matter to American households, like electrical equipment and appliances.

106
00:05:07,160 --> 00:05:09,240
Speaker 1: Yeah, so you're right to flag that energy prices have

107
00:05:09,279 --> 00:05:11,000
Speaker 1: come down, and that we got to the lowest price

108
00:05:11,040 --> 00:05:13,560
Speaker 1: at the pump since twenty twenty one, I think, and

109
00:05:13,560 --> 00:05:16,200
Speaker 1: that's been a huge advantage to American consumers and a

110
00:05:16,240 --> 00:05:19,120
Speaker 1: huge advantage to the American economy. It does drive the

111
00:05:19,160 --> 00:05:21,440
Speaker 1: overall you know, some of the overall indicies and the

112
00:05:21,440 --> 00:05:24,400
Speaker 1: inflation data. But even if you take energy out and

113
00:05:24,400 --> 00:05:26,599
Speaker 1: you look at core goods, you know, as we do

114
00:05:26,680 --> 00:05:28,800
Speaker 1: in our as we do in our paper, or at durables,

115
00:05:29,040 --> 00:05:31,920
Speaker 1: you still see the same wedge. No matter how you

116
00:05:31,960 --> 00:05:36,000
Speaker 1: slice the different goods data. In the inflation data, there's

117
00:05:36,240 --> 00:05:39,800
Speaker 1: a consistent, roughly fifty to sixty basis point wedge between

118
00:05:40,120 --> 00:05:44,040
Speaker 1: the price increases in domestically produced sorry in overall goods

119
00:05:44,160 --> 00:05:47,000
Speaker 1: versus the price increases in imported goods alone. And when

120
00:05:47,040 --> 00:05:49,400
Speaker 1: you annualize that fifty basis foot wedge, obviously it comes

121
00:05:49,400 --> 00:05:51,640
Speaker 1: to a bit more than a percentage bit more than

122
00:05:51,640 --> 00:05:54,560
Speaker 1: a percentage point at annualized rate. And so when you

123
00:05:54,600 --> 00:05:56,839
Speaker 1: slice things like taking out energy or just looking at

124
00:05:56,880 --> 00:05:59,920
Speaker 1: doorables or whatever, you end up with different different levels.

125
00:06:00,120 --> 00:06:03,159
Speaker 1: But the wedge between overall goods and imported goods remains.

126
00:06:03,200 --> 00:06:04,920
Speaker 1: So the conclusion continues to hold.

127
00:06:05,920 --> 00:06:09,000
Speaker 3: So I also want to ask about the central bank here.

128
00:06:09,120 --> 00:06:11,599
Speaker 3: The President himself has been very very vocal for the

129
00:06:11,680 --> 00:06:15,080
Speaker 3: desire for lower rates. He has said just recently on

130
00:06:16,160 --> 00:06:19,920
Speaker 3: truth Social that three points is too high, and he's

131
00:06:19,960 --> 00:06:22,520
Speaker 3: talking about the interest costs that are embedded with higher

132
00:06:22,560 --> 00:06:24,680
Speaker 3: interest rates, which of course is a good point when

133
00:06:24,720 --> 00:06:27,480
Speaker 3: you do have interest costs about to reach a trillion

134
00:06:27,520 --> 00:06:30,719
Speaker 3: dollars or more pretty soon. But at the same time

135
00:06:31,839 --> 00:06:34,760
Speaker 3: he has been very critical of the FED. I want

136
00:06:34,760 --> 00:06:36,520
Speaker 3: to read you this note from Neil Dotta over at

137
00:06:36,520 --> 00:06:40,520
Speaker 3: Renaissance Macro. He's basically saying here that the pressure that

138
00:06:40,560 --> 00:06:43,520
Speaker 3: the President is putting on the FED is making it

139
00:06:43,600 --> 00:06:46,880
Speaker 3: so that any future nominee has to be beholden to

140
00:06:46,920 --> 00:06:49,240
Speaker 3: what the President is saying. What Neil Dotta said is

141
00:06:49,279 --> 00:06:52,920
Speaker 3: Trump has created a litmus test for his FED nominee.

142
00:06:53,080 --> 00:06:56,480
Speaker 3: They have to agree to cut rates. If Trump picks

143
00:06:56,600 --> 00:06:59,240
Speaker 3: someone close to his orbit, that person will look like

144
00:06:59,279 --> 00:07:03,440
Speaker 3: a complete and I'm quoting the research and have a

145
00:07:03,520 --> 00:07:07,600
Speaker 3: limited ability to persuade colleagues to a dubbish position at

146
00:07:07,640 --> 00:07:11,760
Speaker 3: some point. Here is the president's weighing in on central

147
00:07:11,800 --> 00:07:16,560
Speaker 3: bank policy counter productive? For what should otherwise have been

148
00:07:16,600 --> 00:07:18,320
Speaker 3: a independent central bank.

149
00:07:20,160 --> 00:07:22,360
Speaker 1: I thinks so, you know, look, I'm a huge fan

150
00:07:22,400 --> 00:07:24,320
Speaker 1: of Neil and I get along great, but I don't

151
00:07:24,360 --> 00:07:26,200
Speaker 1: agree on this point. I don't think that at the

152
00:07:26,280 --> 00:07:28,000
Speaker 1: end of the day, anything matters, but what the policy

153
00:07:28,080 --> 00:07:29,720
Speaker 1: rate is. I think, you know, sort of sitting around

154
00:07:29,720 --> 00:07:34,240
Speaker 1: talking about you know, about optics and committee you know,

155
00:07:34,560 --> 00:07:37,160
Speaker 1: you know, sort of internal committee discussions doesn't really matter.

156
00:07:37,200 --> 00:07:39,040
Speaker 1: What matters is what the policy rate is and what

157
00:07:39,120 --> 00:07:41,320
Speaker 1: markets expect the policy rate to be. And if they

158
00:07:41,320 --> 00:07:43,239
Speaker 1: expect the policy rate to be better for the economy,

159
00:07:43,240 --> 00:07:45,560
Speaker 1: then we'll have better economic outcomes and markets will welcome that.

160
00:07:45,800 --> 00:07:47,240
Speaker 1: If the policy rate is set in a way that's

161
00:07:47,280 --> 00:07:49,120
Speaker 1: not better for the economy, then we'll have worse economic

162
00:07:49,160 --> 00:07:51,280
Speaker 1: outcomes and markets will reflect that. I think the rest

163
00:07:51,320 --> 00:07:53,560
Speaker 1: of it is just is just chatter. What matters is

164
00:07:54,040 --> 00:07:56,120
Speaker 1: policy being set well or is being set poorly?

165
00:07:56,680 --> 00:08:00,880
Speaker 2: Stephen, can I ask about just the basics of raising revenue.

166
00:08:00,960 --> 00:08:05,560
Speaker 2: What do you expect from tariff revenue, say over the

167
00:08:05,600 --> 00:08:08,600
Speaker 2: next three or four years, since that's what's left in

168
00:08:08,640 --> 00:08:12,520
Speaker 2: this term, And what about golden visa revenue? I heard

169
00:08:12,520 --> 00:08:17,040
Speaker 2: Howard Lutnik saying that you've got seventy five thousand applicants

170
00:08:17,440 --> 00:08:21,720
Speaker 2: or queries, and at five million apiece, that would be

171
00:08:22,160 --> 00:08:24,960
Speaker 2: like three hundred and seventy five billion dollars, massive amounts

172
00:08:25,000 --> 00:08:27,200
Speaker 2: of revenue if you could. Can you repeat that every

173
00:08:27,280 --> 00:08:30,800
Speaker 2: year and bring in like at least a quarter a

174
00:08:30,880 --> 00:08:33,520
Speaker 2: quarter trillion dollars in revenue every year from selling visas?

175
00:08:34,880 --> 00:08:37,760
Speaker 1: Thanks, So I expect a tariff revenue to be substantial,

176
00:08:37,800 --> 00:08:39,720
Speaker 1: And in the research we put out about the defict

177
00:08:39,720 --> 00:08:41,920
Speaker 1: implications of the One Big Beautiful Bill and the rest

178
00:08:41,920 --> 00:08:45,520
Speaker 1: of the administration's policies, tariff revenue played a substantial role

179
00:08:45,520 --> 00:08:47,079
Speaker 1: in thinking about where the deaths it would go in

180
00:08:47,160 --> 00:08:49,880
Speaker 1: future years. We had about three trillion dollars over a

181
00:08:49,920 --> 00:08:52,080
Speaker 1: decade from it, which works out to obviously about three

182
00:08:52,120 --> 00:08:54,200
Speaker 1: hundred million dollars a year, and that's pretty close to

183
00:08:54,400 --> 00:08:56,760
Speaker 1: where CBO ended up to when CBO got around to

184
00:08:56,800 --> 00:08:59,160
Speaker 1: scoring it. So that's a number that I think is

185
00:08:59,679 --> 00:09:02,599
Speaker 1: a little baseline expectation. Given tarif rates are going a

186
00:09:02,600 --> 00:09:04,400
Speaker 1: little bit higher now, number it might actually be a

187
00:09:04,400 --> 00:09:06,720
Speaker 1: bit higher than that. So, you know, I think it's

188
00:09:06,760 --> 00:09:09,760
Speaker 1: such a fantastic thing to raise money from tariffs that

189
00:09:09,800 --> 00:09:12,719
Speaker 1: are ultimately the incidents of which is ultimately born by

190
00:09:12,760 --> 00:09:15,480
Speaker 1: the tariff country, and use that money to finance lower

191
00:09:15,520 --> 00:09:18,600
Speaker 1: marginal rates in American families and American firms to encourage

192
00:09:18,600 --> 00:09:21,679
Speaker 1: more investment and more work here and encourage reshoring. I

193
00:09:21,679 --> 00:09:25,280
Speaker 1: think that's just a fantastic common sense policy combination with

194
00:09:25,360 --> 00:09:27,800
Speaker 1: aspective of Golden visas. I mean, look, I think that

195
00:09:27,840 --> 00:09:30,400
Speaker 1: Howard has enormous demand for these things. You know, he's

196
00:09:30,440 --> 00:09:33,360
Speaker 1: created an amazing product. Howard and the President have created

197
00:09:33,520 --> 00:09:36,960
Speaker 1: an amazing product that has attracted enormous amount of interest

198
00:09:37,000 --> 00:09:39,160
Speaker 1: from foreigners abroad, and I think we're going to see

199
00:09:39,160 --> 00:09:41,760
Speaker 1: that huge demand materialized. However, I think you're right to

200
00:09:41,760 --> 00:09:45,440
Speaker 1: point out I don't expect that demand to reproduce every

201
00:09:45,440 --> 00:09:47,679
Speaker 1: single year. It's not going to replicate every single year.

202
00:09:47,679 --> 00:09:49,199
Speaker 1: I think you'll see a big demand upfront.

203
00:09:49,880 --> 00:09:53,200
Speaker 2: All right, really interesting stuff, Steven, appreciate your time. White

204
00:09:53,200 --> 00:09:56,840
Speaker 2: House Counsel of Economic Advisors Chairman Steven Myron