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Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.

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Speaker 1: Famed short seller Andrew Left faces the possibility of decades

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Speaker 1: behind bars after a jury found him guilty of using

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Speaker 1: disingenuous social media posts to manipulate stocks. It's a landmark

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Speaker 1: case on market manipulation that threatens to further chill a

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Speaker 1: broader trading strategy loathed by corporate executives. After two days

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Speaker 1: of deliberations, the jury convicted the fifty five year old

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Speaker 1: Left of thirteen of seventeen counts. He'll be sentenced on

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Speaker 1: August thirty first, but as already indicated, he intends to

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Speaker 1: appeal the verdict. Joining me is Bloomberg Legal reporter Eric Larson,

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Speaker 1: who's covered the trial. Eric tell us about Andrew Left,

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Speaker 1: who is he and how did he end up on trial?

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Speaker 2: So, Andrew Left is one of the most prominent short

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Speaker 2: sellers on Wall Street, and he's been closely watched by

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Speaker 2: his followers and supporters for a long time. He was

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Speaker 2: a big, you know guy on Twitter back in the

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Speaker 2: day and had lots of followers who watched his comments

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Speaker 2: about stocks and companies, and you know, like other activist

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Speaker 2: short sellers, he put out research reports on companies that

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Speaker 2: he was tracking. He was known for that, he had

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Speaker 2: you know, some correct commentary and views that he came

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Speaker 2: out with that lent him some credibility and again built

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Speaker 2: up that big Twitter following. And of course short sellers,

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Speaker 2: you know, make money betting against companies, so you know

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Speaker 2: a lot of executives maybe don't like them because of

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Speaker 2: what they do, but so a lot of different activists

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Speaker 2: short sellers engaged in this kind of practice, especially back

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Speaker 2: in the years relevant here, which was twenty eighteen to

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Speaker 2: twenty twenty three. But the Justice Department started investigating the

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Speaker 2: whole industry and ended up targeting mister Left in particular

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Speaker 2: over the specific way that he did his social media

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Speaker 2: commentary and trading in which Boiling it Down basically said

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Speaker 2: that he was misleading investors, particularly retail investors, about his

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Speaker 2: trading intentions and specifically just trying to manipulate the stocks

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Speaker 2: so that he could do some real quick trades and

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Speaker 2: make some money. And according to the government, and mister

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Speaker 2: Left didn't deny it. Over that period of time on

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Speaker 2: the stocks an issue in the case, he made over

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Speaker 2: twenty million dollars in trading profits.

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Speaker 1: What was the prosecution's case give us sort of the

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Speaker 1: focus of the prosecution their most critical evidence.

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Speaker 2: So the case really did hinge on his tweets at

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Speaker 2: the time, that's what they were on the platform then

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Speaker 2: known as Twitter, and the records of his trading activity,

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Speaker 2: lots of detailed records and charts about those trades were

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Speaker 2: shown to the jury, and of course his private communications

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Speaker 2: that the government sees as part of their investigation, his

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Speaker 2: telegram messages, texts, emails, that sort of thing. And what

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Speaker 2: they did was use all of this evidence to paint

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Speaker 2: a picture of mister Left planning in advance, specifically to

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Speaker 2: manipulate the market with a tweet or a research report

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Speaker 2: or both at the same time, and then already pre

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Speaker 2: arranging trades in advance so that he could quickly make

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Speaker 2: trades close out his short or long positions. His long

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Speaker 2: bets were also part of this case, and it showed

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Speaker 2: that he didn't always believe what he was saying, that

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Speaker 2: his primary goal was to get his followers to help

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Speaker 2: move the market so that he could make those trades,

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Speaker 2: which according to the government, were often complete opposite of

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Speaker 2: what he was basically saying. He was saying he was

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Speaker 2: short on a company, but then he would quickly close

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Speaker 2: out his short position after saying that when others started

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Speaker 2: doing the same, so he made his profit. And oftentimes

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Speaker 2: these target prices, he would say, I'm betting this company

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Speaker 2: will go to this price, way down to this price,

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Speaker 2: implying that he was going to hold his short position

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Speaker 2: until that time, but then of course closed it out

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Speaker 2: much sooner and again made that quick profit that I

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Speaker 2: mentioned earlier.

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Speaker 1: So now Left took the rare step of taking the stand,

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Speaker 1: testifying in his own behalf, and trial experts say that

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Speaker 1: when a defendant does that, the whole trial sort of

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Speaker 1: becomes about his or her credibility. So how did he

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Speaker 1: do on the stand.

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Speaker 2: Well, it was a bit rough, I mean, as you

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Speaker 2: can imagine. The reason that criminal defendants don't often take

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Speaker 2: that risk is because after you get done with your

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Speaker 2: really friendly questioning by your defense lawyer allowing you to

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Speaker 2: you know, put whatever we could say, spin on the

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Speaker 2: evidence in your own words, justify your actions, you're then

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Speaker 2: put up on cross examination and it can be pretty brutal.

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Speaker 2: I mean, in this case, a prosecutor, you know, went

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Speaker 2: line by line sort of picking apart a lot of

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Speaker 2: what mister Left had said and presenting evidence at that

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Speaker 2: time to show that maybe what he was saying wasn't

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Speaker 2: exactly true, you know, confronting him with these communications that

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Speaker 2: undermined a lot of what he was saying, and he

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Speaker 2: came off, you know, not to be surprised, as pretty defensive.

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Speaker 2: At times. The judge had to interrupt him repeatedly to

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Speaker 2: tell him to just answer the question. He didn't want

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Speaker 2: to give the yes or no that the prosecutor was

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Speaker 2: looking for because he wanted to add his own extra

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Speaker 2: explanation to things, and the judge just kept shutting him

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Speaker 2: down and striking a few of his answers from the record,

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Speaker 2: even which just isn't a great look in front of

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Speaker 2: the jury. So it was pretty rough, and clearly it

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Speaker 2: didn't have the impact that he was hoping for because

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Speaker 2: he was found guilty.

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Speaker 1: He testified that he didn't believe that there was any

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Speaker 1: law that barred him from making trades in the minutes

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Speaker 1: and hours after he published social media post or research reports.

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Speaker 1: I mean, was that part of the defense case that

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Speaker 1: there's no law against this?

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Speaker 2: Yeah, And you know what, he's right on that, and

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Speaker 2: the government couldn't really claim otherwise. So on the one hands. Yes,

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Speaker 2: that's true. But on the other hand, the government was

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Speaker 2: pointing to other evidence that said he was doing more

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Speaker 2: than just trading around his research reports tweets that it

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Speaker 2: was a little worse than that. Well, it was fraud

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Speaker 2: according to the government and the jury. So it is

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Speaker 2: a really interesting point though, because that is the chilling

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Speaker 2: effect that mister Luft and his lawyers have said would

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Speaker 2: hit the short selling industry if he were convicted, and

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Speaker 2: actually already hit the industry after he was indicted. So

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Speaker 2: it's hard to say because in effect, we have, you know,

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Speaker 2: regulations now in place with this industry via a jury verdict,

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Speaker 2: which isn't normally how regulations are put in place. So

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Speaker 2: maybe we'll see some of those in the future. But

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Speaker 2: all the experts that I've been talking to, i mean,

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Speaker 2: the lead up to this trial and earlier today and

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Speaker 2: last night, have just been saying that this will have

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Speaker 2: a chilling effect on the industry, an industry that's already

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Speaker 2: you know, sort of withering and having some tough times

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Speaker 2: because of market considerations. But you know, where's the line.

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Speaker 2: That's what people aren't exactly sure, so they're going to

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Speaker 2: be more timid.

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Speaker 1: Yeah, I was going to ask you if this trial,

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Speaker 1: if the verdict showed where the line was between statements

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Speaker 1: of opinion and when it crosses into market manipulation.

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Speaker 2: Yeah, I wish I could answer that, but I really

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Speaker 2: don't think it did. I guess that's the answers. I

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Speaker 2: don't think it really drew a clear line because they're

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Speaker 2: a very specific set of circumstances involving a specific individual,

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Speaker 2: and so how do you apply that to everyone else

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Speaker 2: who's doing things a little differently or much differently, and

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Speaker 2: the fear of being that because of that uncertainty, maybe

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Speaker 2: you just don't engage in that type of behavior the

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Speaker 2: way that you would. But you know, I don't think

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Speaker 2: that any short seller out there would probably say that

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Speaker 2: they're doing exactly the same thing as mister Left.

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Speaker 1: The experts that I spoke to before the trial said

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Speaker 1: that they thought this was an uphill battle for the prosecution.

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Speaker 1: So the jury was out two days, they didn't convict

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Speaker 1: him on all the charges, So how did they see it?

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Speaker 2: So? Right? I mean, normally, if you get a really

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Speaker 2: fast verdict on the first you know, just after deliberations,

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Speaker 2: then it's probably going to be a guilty verdict. And

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Speaker 2: I'm sure, that's what the prosecution was hoping for. But

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Speaker 2: they did get the guilty berth they wanted. But it

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Speaker 2: spanned two full days of deliberations plus a little extra

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Speaker 2: on the first day, and so they clearly were looking

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Speaker 2: at this evidence very closely, very very closely, and at

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Speaker 2: one point they sent a note back to the judge

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Speaker 2: during deliberations as they often do, and ended up having

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Speaker 2: the court report come in and read the entire transcript

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Speaker 2: of a specific witness to them back and forth. The

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Speaker 2: direct examination, the cross examination, the whole thing, and it

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Speaker 2: was the testimony of Citron Capital's lawyer, securities lawyer, the

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Speaker 2: one who testified that he had sort of reviewed the

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Speaker 2: trading strategy and didn't see anything illegal about it. It

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Speaker 2: was hard to read the tea leaves on what that

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Speaker 2: meant at the time why they wanted to hear that again,

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Speaker 2: but clearly they determined that even though the lawyer had

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Speaker 2: given the green light to this trading strategy, he actually

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Speaker 2: didn't have all the information about what mister Left was

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Speaker 2: up to, which is what was revealed on the cross

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Speaker 2: examination of the witness. So as far as the four

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Speaker 2: counts that he was found not guilty on again, I

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Speaker 2: think that would point to how closely they were looking

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Speaker 2: at the evidence on each of those counts. The first

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Speaker 2: count of securities fraud was the overall overarching fraud scheme,

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Speaker 2: and then counts two through seventeen were for individual stocks

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Speaker 2: that he was accused of manipulating. So on four of

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Speaker 2: those they looked at the evidence that the government had

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Speaker 2: presented and decided that it just didn't quite go as

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Speaker 2: far as the other ones went. We didn't speak to

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Speaker 2: the jurors, so I don't know exactly how that played

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Speaker 2: into it, but I think we can just assume that

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Speaker 2: they looked at the evidence and they couldn't reach unanimity

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Speaker 2: on it.

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Speaker 1: Eric, I always like to hear about some of the

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Speaker 1: colorful events that go on in the courtroom that you

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Speaker 1: might miss reading an article about the trial. So explain

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Speaker 1: why on the day of the verdict the judge had

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Speaker 1: threatened to put left in custody.

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Speaker 2: Right So yesterday morning, the jury started deliberating at eight am,

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Speaker 2: as they had the day before, and they had that

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Speaker 2: note that I mentioned where they wanted to have that

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Speaker 2: transcript read back to them, and the judge got that

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Speaker 2: note first thing in the morning, and so around a

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Speaker 2: thirty nine or so she called the judge called court

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Speaker 2: to session without the jury yet they were going to

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Speaker 2: be brought in. But when the judge came in, a

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Speaker 2: mister Left's legal team had to tell him that he

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Speaker 2: wasn't in the building. And so we don't know why

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Speaker 2: he wasn't, If he was late, or if he just

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Speaker 2: didn't think he needed to be there that early because

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Speaker 2: it was so unlikely that they would have a verdict

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Speaker 2: by then. We just don't know. But she was very angry.

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Speaker 2: She threatened to throw him in jail or have him

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Speaker 2: taken into custody rather until a verdict was reached if

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Speaker 2: he did that again, and ordered him to remain in

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Speaker 2: the building while the jury is there deliberating. And eventually

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Speaker 2: he did show up. I was actually standing out in

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Speaker 2: the hallway and saw him tearing around the corner in

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Speaker 2: a real rush and ran into court and she delivered

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Speaker 2: that threat again to him directly once he had arrived,

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Speaker 2: and he apologized, and we don't know why he was late,

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Speaker 2: and we moved on, Well, you.

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Speaker 1: Don't want the person who's sentencing you angry at you.

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Speaker 1: So how much time is he actually facing?

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Speaker 2: The government says maximum twenty five years on that first

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Speaker 2: main count I mentioned right, then twenty years for each

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Speaker 2: of the other ones. Of course, we know that a

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Speaker 2: judge almost always is going to run those concurrent so

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Speaker 2: that the maximum would be twenty five years essentially. But then,

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Speaker 2: of course we also know often these sentences are much

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Speaker 2: less than the maximum, so I really can't say he's

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Speaker 2: most likely going to appeal. He certainly hinted at an appeal.

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Speaker 2: You know, they've also asked for a mistrial. By the way,

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Speaker 2: another bit of color. This was the strangest jury verdict

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Speaker 2: delivering I've ever seen. Once the verdict was reached, everyone

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Speaker 2: came into court, everyone's you know, waiting to find out

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Speaker 2: what this verdict is. The jury comes out, they say

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Speaker 2: that they've reached a verdict. They hand the verdict to

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Speaker 2: the judge, who has practiced reads it carefully at her desk,

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Speaker 2: and then she calls a sidebar where she wants all

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Speaker 2: the lawyers and mister left to come up around the

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Speaker 2: side of the where she sits and have a private conversation.

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Speaker 2: And that has just never seen that before. The verdict

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Speaker 2: is about to be delivered, and they're talking for a

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Speaker 2: long time, and eventually she reveals that the jury all

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Speaker 2: this time had filled out an incorrect verdict form. Yeah,

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Speaker 2: it was outdated because it included an eighteenth charge of

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Speaker 2: lying to federal investigators that had been dismissed before the trial.

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Speaker 2: So that's why the Left lawyers requested a mistrial, and

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Speaker 2: the judge said that she would rule on that later.

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Speaker 1: I doubt that she would declare a mistrial over that,

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Speaker 1: although you never really know. Has the defense mentioned any

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Speaker 1: issues it might raise on appeal. I assume that having

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Speaker 1: the wrong jury verdict form will be one of them.

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Speaker 2: I did speak with mister left right outside court after

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Speaker 2: he was sentenced. He did say that this wasn't the

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Speaker 2: end of the story. I think it's pretty clear that

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Speaker 2: he was hinting at an appeal. We don't know anything

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Speaker 2: about that yet or how quickly that might happen, or

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Speaker 2: but it is for him a matter of free speech.

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Speaker 2: He gave a rather lengthy explanation of how he thinks

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Speaker 2: it's going to chill people who want to comment on

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Speaker 2: stocks and trade about it. You know, again, as we

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Speaker 2: discussed before, there's different views about that exactly what he

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Speaker 2: was doing, but he just clearly sees it as a

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Speaker 2: free speech matter.

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Speaker 1: The Trump administration has dropped a lot of white collar

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Speaker 1: cases that were started in the Biden administration, as this

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Speaker 1: one was. Do you have any inkling as to why

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Speaker 1: they kept going on this one?

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Speaker 2: I don't. Unfortunately, I do know that mister Left's lawyer

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Speaker 2: made some outreach directly to the administration on this issue

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Speaker 2: and tried to say, hey, you've made it clear your

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Speaker 2: priorities are different. This case should be one that goes

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Speaker 2: away as well. And obviously that outreach was unsuccessful. But

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Speaker 2: in terms of why the government decided to go ahead

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Speaker 2: with this one, it's anyone's guests. I mean, prosecutors really

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Speaker 2: did focus their closing arguments on the notion that mister

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Speaker 2: Left was misleading and manipulating and taking advantage of retail investors,

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Speaker 2: you know, average folks. So perhaps that had something to

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Speaker 2: do with the way they looked at at the case.

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Speaker 1: That seems like a good reason for continuing the case.

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Speaker 1: Thanks so much, Eric, that's Bloomberg Legal reporter Eric Larson.

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Speaker 1: The Customs and Border Protection Agency opened a refund portal

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Speaker 1: on April twentieth for more than three hundred and thirty

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Speaker 1: thousand firms that paid import taxes under President Trump's use

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Speaker 1: of the International Emergency Economic Powers Act or AIPA. That's

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Speaker 1: signaled that it intended to repay at least some of

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Speaker 1: the approximately one hundred and sixty six billion dollars in

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Speaker 1: levies struck down by the Supreme Court earlier this year.

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Speaker 1: The first batch of payments came quickly, but now legal

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Speaker 1: chaos may be injected into the claims process that's already underway.

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Speaker 1: The Trump administration has filed a notice that it will

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Speaker 1: appeal a court order compelling customs authorities to recalculate all

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Speaker 1: import taxes that the administration collected under AEPA. My guest

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Speaker 1: is trade law expert Timothy Brightbill a partner Wilie Rhyan. So, Tim,

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Speaker 1: last time we talked about how the refund process was

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Speaker 1: rolling along, how the portal was working.

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Speaker 3: What happened, Well, we've had a series of very significant

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Speaker 3: developments in the last week for those parties seeking refunds

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Speaker 3: of the tariffs paid under AEPA, the tariffs that were

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Speaker 3: struck down by the Supreme Court. So, first of all,

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Speaker 3: last Wednesday, Judge Eaton issued an order asking the Customs

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Speaker 3: and Border Protection and the Justice Department to explain not

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Speaker 3: only the status of refunds being paid, but also calling

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Speaker 3: the Customs and Border Protection Commissioner Rodney Scott to testify

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Speaker 3: in court as to the delays in the process. So

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Speaker 3: a very noteworthy escalation of the process. Then two days later,

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Speaker 3: last Friday, Customs and Border Protection responded to Judge Eaton

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Speaker 3: said that it would be improper to call on Commissioner Scott,

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Speaker 3: who is presidentially nominated and Senate confirmed, to have to

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Speaker 3: appear to answer the Court's questions. And then also Customs

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Speaker 3: challenged the court or in a way that I think

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Speaker 3: makes it clear that it is going to be difficult

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Speaker 3: for some importers to potentially receive refunds of their idea

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Speaker 3: of duties. So Customs has been paying refunds and has

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Speaker 3: refunded about eighty five billion dollars of tariffs or is

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Speaker 3: in the process of refunding those tariffs. But those are

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Speaker 3: tariffs that were never liquidated or finalized. They were always

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Speaker 3: sort of held in suspension and not finalized, and therefore

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Speaker 3: they were still in Customs control. The bigger question is

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Speaker 3: for tariffs that were paid on entries that have been liquidated,

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Speaker 3: that have been finalized, and what to do with those.

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Speaker 3: And in this most recent filing, Customs has said it

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Speaker 3: has no authority to re liquidate or refund money without

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Speaker 3: a court order. So what that seems to mean is

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Speaker 3: that or parties that have filed a case in the court,

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Speaker 3: there may be a way to refund the money, but

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Speaker 3: for parties that have not filed cases in the court,

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Speaker 3: Customs claims it does not have the authority to refund

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Speaker 3: money without a court order. So that's a very significant

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Speaker 3: change from this automated system that was moving along. Customs

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Speaker 3: was providing the court with updates, but now there seems

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Speaker 3: to be a roadblock and things seem to be coming

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Speaker 3: to a head.

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Speaker 4: Why do you think this happened.

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Speaker 5: Do you think that this is really about the technicality

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Speaker 5: about having filed a lawsuit or not, or it's a

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Speaker 5: Trump administration attempt not to pay or desire not to

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Speaker 5: pay these tariff refunds.

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Speaker 3: Well, I think it's a combination of both of those factors.

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Speaker 3: First of all, Customs is claiming that it doesn't have

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Speaker 3: any authority under the law to re liquidate duties that

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Speaker 3: have already been finalized unless there is a court order

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Speaker 3: telling them to do so. So the legal reason they're

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Speaker 3: claiming is that they don't have the authority to pay

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Speaker 3: refunds on these entries. Now, I think the practical reason

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Speaker 3: is that there are billions of dollars worth of entries

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Speaker 3: by smaller importers that have not filed suit, and it's

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Speaker 3: likely that the Trump administration does want to keep that

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Speaker 3: money and doesn't want to refund it. So in effect,

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Speaker 3: that seems to be forcing companies to file lawsuits in

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Speaker 3: order to get their money back. And in fact, we've

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Speaker 3: been recommending to our clients now for we were fairly

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Speaker 3: neutral on this for most of the last year, but

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Speaker 3: a couple of months ago we started recommending to our

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Speaker 3: clients that if you want to be sure, we think

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Speaker 3: the best course of action is to file a lawsuit

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Speaker 3: at the Court of International Trade. These recent orders seem

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Speaker 3: to confirm that that is the step that many importers

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Speaker 3: will want to think carefully about taking. It's, of course,

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Speaker 3: an individual company decision based on their own circumstances, but

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Speaker 3: we think that this means it's more likely that more

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Speaker 3: lawsuits will be filed to try and ensure the refunds

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Speaker 3: will happen.

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Speaker 1: That sounds like a lot of lawsuits will that clog

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Speaker 1: up the Court of International trade well.

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Speaker 3: The Court has handled hundreds and thousands of lawsuits before.

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Speaker 3: There have been prior cases, some involving anti dumping and

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Speaker 3: kunter ailing duties, some involving harbor maintenance tax and other

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Speaker 3: customs provisions. So the court can handle these large cases.

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Speaker 3: I think it would prefer to have customs set up

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Speaker 3: an automated process so that companies don't have to face

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Speaker 3: the burden of filing these individual lawsuits. But the Court

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Speaker 3: can handle it. They've done it before, but it will

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Speaker 3: create a burden for all parties involved.

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Speaker 1: Coming up next, I'll continue this conversation with trade attorney

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Speaker 1: Timothy Brightbill. We'll take a look at some of the

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Speaker 1: other tariffs that President Trump has imposed or will impose.

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Speaker 1: I'm June Grosso. When you're listening to Bloomberg, I've been

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Speaker 1: taught looking to trade law expert Timothy Brightbill, a partner

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Speaker 1: Wilie Ryan, about the Trump administration appealing a court order

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Speaker 1: compelling customs authorities to recalculate all the import taxes that

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Speaker 1: the administration collected under President Donald Trump's use of the

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Speaker 1: International Emergency Economic Powers Act or IEPA. The Supreme Court

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Speaker 1: struck down those tariffs in a six to three decision

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Speaker 1: in February. Tim let's talk about some of the many

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Speaker 1: other tariffs. So many tariffs, so little time. The Section

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Speaker 1: one twenty two tariffs, the ten percent tariffs, Where do

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Speaker 1: they stand?

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Speaker 3: So those tariffs are still for the most part in effect. Again,

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Speaker 3: those are tariffs based on balance of payments authority, and

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Speaker 3: the law does authorize the president to impose tariffs of

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Speaker 3: up to fifteen percent to one hundred and fifty days.

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Speaker 3: So what President Trump did was declare ten percent universal tariffs,

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Speaker 3: and those are in effect until July twenty fourth. Now,

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Speaker 3: the Court of International Trade has already struck down those tariffs.

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Speaker 3: In a two to one decision. One judge dissenting, found

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Speaker 3: that those tariffs were inappropriately applied and that the administration

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Speaker 3: used the justification of trade deficits. But of course there's

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Speaker 3: a difference between a trade deficit and a balanced human's deficit,

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Speaker 3: so the court found that those tariffs were not properly applied.

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Speaker 3: The administration has already appealed to the Court of Appeals

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Speaker 3: for the Federal Circuit and those arguments are being heard,

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Speaker 3: but it is unlikely that this will get all the

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Speaker 3: way through the courts by the time the Section one

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Speaker 3: twenty two tariffs expire on July twenty fourth, So even

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Speaker 3: though the peals are going on, the ten percent tariffs

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Speaker 3: were not stayed except for the actual parties through the lawsuits.

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Speaker 3: So that means most companies, most importers are still paying

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Speaker 3: those ten percent tariffs on all entries.

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Speaker 4: So assuming that President Trump wants to continue these two traffs,

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Speaker 4: what can they replace that with come July.

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Speaker 3: Well, that process is already underway. You're right this president.

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Speaker 3: Tariffs are his favorite word in the English language for

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Speaker 3: a reason, and so the work is already underway on

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Speaker 3: the replacement for those tariffs, which would be done under

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Speaker 3: section three oh one of the Trade Act. Section three

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Speaker 3: oh one, as you'll recall, is the authority that was

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Speaker 3: used in the first Trump administration to impose tariffs on

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Speaker 3: hundreds of billions of dollars of Chinese imports, and China

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Speaker 3: then retaliated against US imports as well. Those Section three

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Speaker 3: oh one tariffs are still in place. Section three oh

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Speaker 3: one just requires a finding that there are foreign practices

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Speaker 3: that are unreasonable and that burden or restrict US commerce.

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Speaker 3: So it's a very broad test and it has been

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Speaker 3: found to meet situations like the Chinese forced technology transfer,

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Speaker 3: data localization laws, cyber hacking, and so forth. And then

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Speaker 3: to ensure that that authority is available, the administration started

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Speaker 3: a series of Section three h one investigations looking at

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Speaker 3: structural overcapacity from a number of countries and also the

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Speaker 3: lack of forced labor laws or strong forced labor laws

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Speaker 3: in many other countries. So that process is underway. There

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Speaker 3: were a series of hearings held here in Washington on

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Speaker 3: Section three h one on this overcapacity issue and forced

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Speaker 3: labor issue in late April and early May. And we

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Speaker 3: are probably getting close to the point where the US

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Speaker 3: Trade Representative will announce or propose some new tariffs under

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Speaker 3: Section three oh one, with the goal being that those

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Speaker 3: tariffs will be finalized and in place by the time

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Speaker 3: that the ten percent Section one twenty two tariffs expire

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Speaker 3: on July twenty fourth.

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Speaker 4: So it seems to you like those tariffs will survive

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Speaker 4: a court challenge.

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Speaker 3: In the past, they have. So the tariffs brought during

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Speaker 3: the first Trump administration under Section three zhoo one were

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Speaker 3: largely upheld by the courts as reasonable and within the

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Speaker 3: President's discretions, with some exceptions, and there are still court

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Speaker 3: challenges going on against those original tariffs from twenty eighteen,

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Speaker 3: so the courts could rule, but so far those tariffs

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Speaker 3: have been upheld again because the law is broad and

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Speaker 3: gives the president a good deal of discretion, and so

440
00:25:57,720 --> 00:26:01,359
Speaker 3: the courts in the past have mostly deferred to the

441
00:26:01,359 --> 00:26:06,240
Speaker 3: president's discretion, although again we're in unprecedented territory here given

442
00:26:06,320 --> 00:26:11,240
Speaker 3: the scope of these investigations that the Trump administration has undertaken.

443
00:26:11,560 --> 00:26:15,199
Speaker 4: Moving on to national security tariffs.

444
00:26:14,880 --> 00:26:17,960
Speaker 3: These tariffs are done under Section two thirty two of

445
00:26:18,000 --> 00:26:23,240
Speaker 3: the Trade Act, which basically assesses are imports of a

446
00:26:23,280 --> 00:26:27,879
Speaker 3: certain good or item a threat to US national security,

447
00:26:28,520 --> 00:26:34,160
Speaker 3: and these were the basis for tariffs of twenty five

448
00:26:34,240 --> 00:26:38,840
Speaker 3: percent that were put on steel and aluminum imports during

449
00:26:38,840 --> 00:26:42,520
Speaker 3: the first Trump administration and which have continued since. Similarly,

450
00:26:42,960 --> 00:26:47,400
Speaker 3: in the current Trump administration, tariffs have been put, for example,

451
00:26:47,400 --> 00:26:52,359
Speaker 3: on wood products like cabinets and furniture and softwood lumber,

452
00:26:53,320 --> 00:26:57,040
Speaker 3: and on copper and on other types of goods. So

453
00:26:57,119 --> 00:27:01,160
Speaker 3: there were about a dozen Section two thirty two investigations

454
00:27:01,160 --> 00:27:03,800
Speaker 3: started within the last year or so. Some of those

455
00:27:03,840 --> 00:27:09,080
Speaker 3: are completed, others are still underway. One that is coming

456
00:27:09,080 --> 00:27:12,960
Speaker 3: to a conclusion relates to polysilicon that is used in

457
00:27:13,040 --> 00:27:18,000
Speaker 3: solar cells and solar modules. The Commerce Department has already

458
00:27:18,600 --> 00:27:21,639
Speaker 3: done its study as to whether or not imports our

459
00:27:21,720 --> 00:27:25,440
Speaker 3: threat to national security. That study has gone to the President,

460
00:27:25,520 --> 00:27:29,080
Speaker 3: who now has ninety days to decide what sort of

461
00:27:29,119 --> 00:27:32,360
Speaker 3: relief to apply. So there are a number of these

462
00:27:32,440 --> 00:27:36,520
Speaker 3: national security investigations going on. For the most part, if

463
00:27:36,520 --> 00:27:40,400
Speaker 3: a national security tariff is applied, then the Section three

464
00:27:40,520 --> 00:27:43,080
Speaker 3: h one tariffs have not applied, so there is not

465
00:27:43,920 --> 00:27:47,520
Speaker 3: stacking of the national security tariffs with the Section three

466
00:27:47,560 --> 00:27:50,560
Speaker 3: oh one TIFFs at any rate. It's a very convoluted

467
00:27:50,640 --> 00:27:55,480
Speaker 3: landscape and it's changing on a daily, weekly, monthly basis.

468
00:27:56,000 --> 00:28:02,000
Speaker 3: For example, just yesterday, USTR ounce potential new tariffs of

469
00:28:02,000 --> 00:28:07,280
Speaker 3: twenty five percent on Brazil due to unreasonable practices under

470
00:28:07,320 --> 00:28:11,399
Speaker 3: Section three to zero one. So it requires careful monitoring

471
00:28:11,480 --> 00:28:15,240
Speaker 3: by everyone involved. Anyone who's importing from dozens of countries

472
00:28:15,320 --> 00:28:18,000
Speaker 3: needs to be aware of all the latest developments.

473
00:28:18,440 --> 00:28:22,520
Speaker 4: It's exhausting, and as you say, it's it's constantly changing.

474
00:28:22,960 --> 00:28:25,840
Speaker 4: What's the effect on the economy of it? Never seems

475
00:28:25,840 --> 00:28:29,040
Speaker 4: that tariffs do the economy any good. But Trump loves them.

476
00:28:29,440 --> 00:28:32,879
Speaker 3: It's very difficult to say the overall impact on the

477
00:28:32,920 --> 00:28:36,320
Speaker 3: economy of all of these tariffs. Certainly it's possible to

478
00:28:36,400 --> 00:28:41,800
Speaker 3: do limited or specific tariffs without causing harm to the economy,

479
00:28:41,840 --> 00:28:46,640
Speaker 3: without driving up inflation. But these tariffs are of unprecedented

480
00:28:46,840 --> 00:28:50,800
Speaker 3: scale and scope, and it is remarkable that the US

481
00:28:50,920 --> 00:28:55,440
Speaker 3: economy is doing as well as it is given not

482
00:28:55,480 --> 00:28:58,920
Speaker 3: only these tariffs. But the uncertainty caused by all the

483
00:28:59,000 --> 00:29:02,880
Speaker 3: changes is never good for businesses. Our clients would rather

484
00:29:03,080 --> 00:29:06,000
Speaker 3: have a stable environment. They would rather know what the

485
00:29:06,040 --> 00:29:08,040
Speaker 3: tariff levels are and what they're going to be for

486
00:29:08,160 --> 00:29:10,440
Speaker 3: years to come, so that they can plan their capital

487
00:29:10,440 --> 00:29:14,040
Speaker 3: improvements and investments. So this does make it very difficult

488
00:29:14,160 --> 00:29:17,400
Speaker 3: for companies and industries to grow, and the last many

489
00:29:17,440 --> 00:29:21,080
Speaker 3: of them are investing. And again, the US economy is

490
00:29:21,120 --> 00:29:23,960
Speaker 3: holding up rather well despite the turmoil.

491
00:29:24,600 --> 00:29:29,120
Speaker 4: So now let's talk about the US China relationship and

492
00:29:29,480 --> 00:29:31,000
Speaker 4: how that plays in here.

493
00:29:31,480 --> 00:29:35,520
Speaker 3: Yes, so we recently have the summit between Presidents Trump

494
00:29:35,560 --> 00:29:38,840
Speaker 3: and She, and I would say the outcomes from that

495
00:29:38,920 --> 00:29:44,040
Speaker 3: summit were rather modest. There was discussion about a potential

496
00:29:44,040 --> 00:29:47,720
Speaker 3: Board of Trade to handle certain difficult trade issues, but

497
00:29:48,280 --> 00:29:52,120
Speaker 3: really not major developments from that summit, whoms like both

498
00:29:52,160 --> 00:29:58,960
Speaker 3: countries would like to continue engagement and continue to grow

499
00:29:59,000 --> 00:30:04,120
Speaker 3: their own economy is without escalating to even higher and

500
00:30:04,200 --> 00:30:07,000
Speaker 3: higher levels of tariffs. So we'll have to see. I

501
00:30:07,040 --> 00:30:10,720
Speaker 3: think there's one of two outcomes likely either a continued

502
00:30:10,760 --> 00:30:14,240
Speaker 3: sort of standoff in detent at the current tariff levels,

503
00:30:14,400 --> 00:30:19,760
Speaker 3: or some sort of escalation based on export controls or

504
00:30:19,880 --> 00:30:24,440
Speaker 3: chip issues or rare earth and magnet issues that causes

505
00:30:24,560 --> 00:30:29,520
Speaker 3: both sides to react with even more aggressive actions trade

506
00:30:29,560 --> 00:30:30,600
Speaker 3: actions going forward.

507
00:30:31,160 --> 00:30:34,080
Speaker 4: So tim tariffs are not an issue that I think

508
00:30:34,120 --> 00:30:37,440
Speaker 4: about when I think about the midterm elections coming up.

509
00:30:37,440 --> 00:30:40,920
Speaker 1: But what role do you think tariffs will play in

510
00:30:40,960 --> 00:30:41,720
Speaker 1: the midterms.

511
00:30:42,080 --> 00:30:45,840
Speaker 3: I think the elections are always affected by economic issues,

512
00:30:45,960 --> 00:30:49,760
Speaker 3: as presidents have famously said over the years, So I

513
00:30:49,800 --> 00:30:53,479
Speaker 3: think you've seen that affordability is likely going to be

514
00:30:53,600 --> 00:30:57,120
Speaker 3: the key issue of the midterm elections as well as

515
00:30:57,120 --> 00:31:01,480
Speaker 3: the presidential elections in two years. And so really the

516
00:31:01,600 --> 00:31:06,240
Speaker 3: question is does the American public think that tariffs have

517
00:31:06,360 --> 00:31:10,120
Speaker 3: an effect on affordability and that will play an important

518
00:31:10,160 --> 00:31:14,080
Speaker 3: role in how votes are cast. So it is a

519
00:31:14,160 --> 00:31:18,760
Speaker 3: very important issue. I think numbers of Congress feel it

520
00:31:18,800 --> 00:31:21,440
Speaker 3: acutely with the House and the Senate and the balance,

521
00:31:22,200 --> 00:31:25,120
Speaker 3: and the Trump administration is aware as well. So even

522
00:31:25,160 --> 00:31:29,720
Speaker 3: though this administration is very much in favor of tariffs

523
00:31:30,080 --> 00:31:33,080
Speaker 3: and an aggressive trade policy, they also have an eye

524
00:31:33,160 --> 00:31:36,080
Speaker 3: on the stock markets and they have an eye on

525
00:31:36,360 --> 00:31:40,120
Speaker 3: what regular Americans are feeling in terms of paying more

526
00:31:40,160 --> 00:31:41,200
Speaker 3: for goods and services.

527
00:31:41,480 --> 00:31:44,800
Speaker 1: Thanks so much, Tim for sharing your expertise in this area,

528
00:31:44,880 --> 00:31:50,400
Speaker 1: which requires expertise because it's so complicated. That's Timothy Bright Bill,

529
00:31:50,520 --> 00:31:54,440
Speaker 1: a partner Wilie Ryan. In other legal news, today, Acting

530
00:31:54,480 --> 00:31:58,760
Speaker 1: Attorney General Todd Blanch was grilled by lawmakers from both

531
00:31:58,840 --> 00:32:04,400
Speaker 1: parties about President trumps so called Anti Weaponization Fund. The

532
00:32:04,480 --> 00:32:09,040
Speaker 1: administration says the one point seventy seven billion dollar fund

533
00:32:09,360 --> 00:32:14,040
Speaker 1: would be used to compensate alleged victims of political persecution

534
00:32:14,440 --> 00:32:17,480
Speaker 1: under the Biden administration, but it's being held up in

535
00:32:17,520 --> 00:32:20,960
Speaker 1: the courts to determine whether it's legal. And now Blanche

536
00:32:20,960 --> 00:32:24,640
Speaker 1: says the Justice Department is not moving ahead with the fund.

537
00:32:25,200 --> 00:32:28,280
Speaker 2: You're right that there's a date that in the case

538
00:32:28,280 --> 00:32:31,280
Speaker 2: in the Eastern Sco Virginia in June, but we are

539
00:32:31,280 --> 00:32:32,600
Speaker 2: not moving forward with the fund.

540
00:32:33,000 --> 00:32:38,760
Speaker 1: But under questioning by Representative Rosa Deloro, a Democrat from Connecticut.

541
00:32:39,000 --> 00:32:42,360
Speaker 1: Blanche admitted that nothing has changed with the part of

542
00:32:42,400 --> 00:32:45,640
Speaker 1: the deal where the irs agreed to drop all pending

543
00:32:45,760 --> 00:32:48,800
Speaker 1: and future probes of Trump and his family.

544
00:32:49,560 --> 00:32:55,720
Speaker 6: This is really pretty extraordinary that we are going to

545
00:32:56,840 --> 00:33:02,560
Speaker 6: forever barred and precluded from I'm examining or prosecuting the President,

546
00:33:03,000 --> 00:33:08,520
Speaker 6: his sons, and the Trump organization's current tax Finally, simply put,

547
00:33:08,680 --> 00:33:12,200
Speaker 6: you just gave the president's family of tax immunity to

548
00:33:12,280 --> 00:33:15,720
Speaker 6: the tune of about one hundred million dollars. Not true, Well,

549
00:33:15,920 --> 00:33:17,520
Speaker 6: yes you have my friends.

550
00:33:17,640 --> 00:33:22,280
Speaker 1: Judges in Virginia and Maryland are considering the fund. And

551
00:33:22,320 --> 00:33:24,480
Speaker 1: that's it for this edition of The Bloomberg Law Show.

552
00:33:24,800 --> 00:33:27,160
Speaker 1: Remember you can always get the latest legal news on

553
00:33:27,200 --> 00:33:31,480
Speaker 1: our Bloomberg Law podcasts. You can find them on Apple Podcasts, Spotify,

554
00:33:31,680 --> 00:33:36,720
Speaker 1: and at www dot Bloomberg dot com, slash podcast Slash Law,

555
00:33:37,120 --> 00:33:39,719
Speaker 1: And remember to tune into The Bloomberg Law Show every

556
00:33:39,760 --> 00:33:43,640
Speaker 1: weeknight at ten pm Wall Street Time. I'm June Grosso

557
00:33:43,800 --> 00:33:45,400
Speaker 1: and you're listening to Bloomberg