Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: President Trump announcing steep tariff's on all exporters to the
Speaker 2: US yesterday, with rates ranging from ten percent to over
Speaker 2: fifty percent, which his administration says aimed to counter large
Speaker 2: trade imbalances with other countries. But the levies are also
Speaker 2: expected to have consequences here at home, and for a
Speaker 2: look at how individual states are bracing for them, we
Speaker 2: turn now to the Democratic Governor of New York, Kathy Hochel. Governor,
Speaker 2: thank you for joining us here on Bloomberg TV and radio.
Speaker 2: I'm curious what you're already hearing from businesses and companies
Speaker 2: in your state, and whether they are already suggesting they
Speaker 2: are making changes on hiring practices, on pricing, for example,
Speaker 2: or if they are playing wait and see here to
Speaker 2: see whether or not this actually sticks.
Speaker 3: No, thank you for having me now.
Speaker 1: The impact is immediate and this is nothing short of
Speaker 1: the largest tax increase in American's history, and the.
Speaker 3: Impact on New York. Let me explain.
Speaker 1: This is the tenth largest economy in the world.
Speaker 3: We have Wall Street, we have farms.
Speaker 1: We have a border four hundred and fifty miles with Canada,
Speaker 1: so we have a trade relationship with Canada for fifty
Speaker 1: billion dollars.
Speaker 3: So already here's what we're.
Speaker 1: Seeing, droppings and bookings from Canadians coming to New York State,
Speaker 1: a huge source of tourism all the way to New
Speaker 1: York City, but's certainly my hometown of Buffalo where Canadians
Speaker 1: come over all the time and they go to our
Speaker 1: sporting of as they shop in our source.
Speaker 3: So here's number one.
Speaker 1: Sales tax revenues are dropping already now. Speaking to a
Speaker 1: farmer in a very republican part of our state called
Speaker 1: Stefanic Country in the North Country, he told me that
Speaker 1: as a dairy farmer, he gets his shavings, he gets
Speaker 1: his fertilizer, he gets all these products from Canada, and
Speaker 1: his costs are going up ten thousand dollars a month
Speaker 1: a dairy farmer, not the total cost, but an increase
Speaker 1: of ten thousand dollars a month.
Speaker 3: So there's much anxiety now.
Speaker 1: Not to mention the Walmart mom who goes to Walmart
Speaker 1: like I did when my kids were little, that giant
Speaker 1: grocery cart with the oversized diapers and lots of baby food.
Speaker 3: And paper towels.
Speaker 1: That's going to have an impact on people shopping at
Speaker 1: Walmart who come out of the trailer park park like
Speaker 1: the one my parents grew up in. So I have
Speaker 1: to say it goes all the way from Wall Street
Speaker 1: to the farmers, to the small towns, main street, the
Speaker 1: Wall Street. There is a cataclysmic effect on this and
Speaker 1: its New Yorkers are reeling right now.
Speaker 4: Hear where you're coming from here, Governor. I wonder if
Speaker 4: there's a silver lining in any of this for the
Speaker 4: great industrial towns of your state from the last century, Syracuse, Rochester.
Speaker 4: Based on what we're hearing from this administration, they will
Speaker 4: again have a seat at the manufacturing table. Do you
Speaker 4: believe that?
Speaker 3: I hope so.
Speaker 1: But we already have advanced manufacturing coming to New York.
Speaker 1: I literally got off the phone with someone who's in
Speaker 1: a pharmaceutical business looking all over the world, and he's
Speaker 1: very likely with the deal I'm making to come to
Speaker 1: New York. So we have advanced manufacturer, we have pharmaceuticals.
Speaker 1: In fact, I was able to lure Micron with one
Speaker 1: hundred billion dollar investment, the largest in our nation's history,
Speaker 1: to build the semiconductors in the Syracuse area. So we're
Speaker 1: already reimagining our economy based on manufacturing, so that's important
Speaker 1: to me. I come from Buffalo. I mean, my dad
Speaker 1: worked at the Steel Plan. I know how hard it
Speaker 1: is when businesses leave. But we are backfilling in with
Speaker 1: businesses that we think will have a long term future.
Speaker 3: And they'll be affected by this.
Speaker 1: The component parts to what they're building and the supply chain.
Speaker 1: They're going to see an increased cost, not just because
Speaker 1: they're in New York, but because they're in America.
Speaker 3: And that's what worries me.
Speaker 1: There could be a silver lining. As you say, I
Speaker 1: don't know how old I'm going to be when that happens.
Speaker 1: I mean, what are they going to do? Start building
Speaker 1: factories now? And I just don't know. All I know
Speaker 1: is that people are promised lower prices on inauguration Day
Speaker 1: and guess what they're going up?
Speaker 2: Well, is there anything you can do about that? Governor?
Speaker 2: Regardless of what policy is set by the federal executive, you,
Speaker 2: as a state executive, are there levers you can pull
Speaker 2: to help offset any economic pain that results from these
Speaker 2: tariff policies.
Speaker 3: I've had to have this conversation.
Speaker 1: I'm assembling some of the smartest economists in the country
Speaker 1: to help give us advice on this.
Speaker 3: This is an unforced error. This did not have to
Speaker 3: be this way.
Speaker 1: And yes, you can use tariffs as as a tool
Speaker 1: to negotiate or have something in moderation. But this is
Speaker 1: so extreme and so immediate that I need to figure
Speaker 1: out with some real experts on what this is going
Speaker 1: to do. But I'll tell you what's going to happen.
Speaker 1: Wall Street goes down next January, and I'm looking at
Speaker 1: my revenues that are coming in from Wall Street bonuses
Speaker 1: where I fund a lot of the generous programs we
Speaker 1: hear in our state that's going to be lower. I'm
Speaker 1: gonna have to look at where we're going to have
Speaker 1: to cut there. I have to look at the whole picture.
Speaker 1: Now in the context of the budget, I'm negotiating the
Speaker 1: revenues I count on the revenues I'm going to lose,
Speaker 1: but also the impact on our businesses.
Speaker 3: Who may not be expanding now.
Speaker 1: So I have to find ways we can use state
Speaker 1: resources to say will help comment down what I can
Speaker 1: do for a farmer and upstate New York. That's a
Speaker 1: good question. I don't want them to suffer. Thirty two
Speaker 1: thousand farms in our state. People think of New York
Speaker 1: as just Manhattan. I know they do, but it's so
Speaker 1: much more than that. An important part of our economy
Speaker 1: is our agricultural sector.
Speaker 3: So all of our sectors are going to be hurt.
Speaker 1: So I have to look at our budget what we
Speaker 1: can do to help other incentives for economic development. And
Speaker 1: as I'm doing, I'm trying to put money back in
Speaker 1: people's pockets. I mean, the average New Yorker will have
Speaker 1: six thousand dollars less than their pockets because of these tariffs,
Speaker 1: and that's an opinion by a number of economists. I
Speaker 1: have a budget I'm negotiating right now that puts five
Speaker 1: thousand dollars back in people's pockets, child tax credits, a
Speaker 1: middle class tax cut the largest in seventy years, the
Speaker 1: largest tax rate decrease in seventy years, an inflation rebate
Speaker 1: for people paid so much more in sales tax. So
Speaker 1: I have a path put all this money back in
Speaker 1: their pockets. You know what's really said, that's going to
Speaker 1: be sucked right out with a six thousand dollars they're
Speaker 1: going to lose because of tariff.
Speaker 3: So I'll keep.
Speaker 1: Fighting, I'll keep doing what I can do. But this
Speaker 1: is a real hit on New Yorkers.
Speaker 4: So it sounds like the potential for state tax cuts
Speaker 4: in the year ahead depend on tax receipts from Wall Street. Governor,
Speaker 4: Is that right? Oh?
Speaker 3: It always does.
Speaker 1: I mean, I've not had an increase in our income
Speaker 1: tax because I want to make sure high net worth
Speaker 1: people know we appreciate.
Speaker 3: Them, and I don't want to drive them out of
Speaker 3: our state. So that's that's my view.
Speaker 4: But does it increase the urgency behind extending the Trump
Speaker 4: tax cuts and eliminating the salt cap because a lot
Speaker 4: of Republican members of Congress and your state are working
Speaker 4: to do that.
Speaker 3: Now, well, they better be successful.
Speaker 1: We want to make sure that the salt deduction, state
Speaker 1: local tax deduction is brought back one hundred percent. Absolutely,
Speaker 1: and I have seven Republican members at Congress. You better
Speaker 1: win on this one because you promised your voters you would.
Speaker 3: Governor.
Speaker 2: Before we let you go, our time is short. But
Speaker 2: I do want to ask you about New York City
Speaker 2: Mayor Eric Adams, who of course had charges against him dismissed.
Speaker 2: He now says he will continue his mayoral campaign for reelection,
Speaker 2: but as an independent. During the height of that controversy.
Speaker 2: You said it will be up to the voters to
Speaker 2: choose who they want to be mayor. You opted not
Speaker 2: to force him out of the position. Even if you're
Speaker 2: not going to endorse anyone, would you encourage New Yorkers
Speaker 2: to reconsider a vote for him as an independent.
Speaker 1: All I'm going to say is my job is to
Speaker 1: work with whomever's in the White House. I have a
Speaker 1: relationship with Donald Trump based on our mutual interest and
Speaker 1: building infrastructure and working on projects like Penn Station, but
Speaker 1: not allies when I don't support many of his policies.
Speaker 3: Same thing with the Mayor of New York.
Speaker 1: No matter who is sitting in that seat that the
Speaker 1: voters of New York decide they want me to work with,
Speaker 1: I will do that, but always stand up for the
Speaker 1: rights of the entire state and focus on my agenda
Speaker 1: of affordability and public safety.
Speaker 4: Treat to have you with the s govenor. Come see
Speaker 4: us again. New York Governor Kathy Hochel with a sun dalance.
Speaker 3: Thank you,