WEBVTT - P&L: Trump's Tariff Threat Would Violate NAFTA 0:00:04.760 --> 0:00:08.080 Welcome to the Bloomberg P and L Podcast. I'm pim Fox. 0:00:08.119 --> 0:00:11.200 Along with my co host Lisa Abramowitz. Each day we 0:00:11.280 --> 0:00:14.480 bring you the most important, noteworthy, and useful interviews for 0:00:14.520 --> 0:00:16.880 you and your money, whether at the grocery store or 0:00:16.920 --> 0:00:20.680 the trading floor. Find the Bloomberg P L Podcast on iTunes, 0:00:20.840 --> 0:00:30.400 SoundCloud and at Bloomberg dot com. President elect Donald Trump 0:00:30.440 --> 0:00:36.160 had threatened to impose tariffs on automobiles made in Mexico 0:00:36.360 --> 0:00:40.600 by g M, and as part of the automotive industry's 0:00:40.600 --> 0:00:44.640 response to President elect Donald Trump, Ford Motor Company has 0:00:44.760 --> 0:00:47.880 decided that it will not spend one point six billion 0:00:47.920 --> 0:00:51.680 dollars to create a new manufacturing plant in San Luis 0:00:51.720 --> 0:00:56.560 Potoso in Mexico. Well, Shannon Petty Pieces are White House correspondent, 0:00:56.720 --> 0:00:59.200 and she joins us, Now, I know you're at the 0:00:59.280 --> 0:01:02.960 Trump Tower in Midtown Manhattan todaytion and but you're focusing 0:01:03.080 --> 0:01:10.080 on the NAFTA regulations that would prevent the imposition of tariffs. 0:01:10.080 --> 0:01:14.440 Can you explain a little bit more about this contradiction? Right? So, 0:01:14.640 --> 0:01:18.760 under NAFTA, um, you know, uh, goods are able to 0:01:18.800 --> 0:01:23.000 flow tariff free between Mexico and the US and Canada. 0:01:23.040 --> 0:01:25.760 In the US and vice versa and so forth. Um. 0:01:26.040 --> 0:01:29.679 Yesterday Trump tweeted, uh, you know, called out GM for 0:01:29.800 --> 0:01:33.320 importing a car made in Mexico into the US. UM, 0:01:33.920 --> 0:01:36.480 and you know edited with you know, something along the 0:01:36.520 --> 0:01:38.920 lines of, you know, uh, if you import products here, 0:01:38.959 --> 0:01:40.760 you're gonna have to pay a big border tax. Well, 0:01:41.000 --> 0:01:44.440 under NAFTA border tax, the tariff on goods coming into 0:01:44.480 --> 0:01:47.440 the US from Mexico is in violation of that agreement. 0:01:47.640 --> 0:01:50.080 So if Trump is going to carry through on his 0:01:50.560 --> 0:01:53.440 commitment that he made on the campaign trail knights continuing 0:01:53.480 --> 0:01:56.040 to read right now about putting attacks on goods coming 0:01:56.040 --> 0:01:58.400 in through Mexico, then that it's going to be in 0:01:58.520 --> 0:02:02.240 violation of NAFTA. And if you violate NAFTA, which uh 0:02:02.400 --> 0:02:07.200 no presidents violated a trade agreement since the eighteen hundreds. So, UM, 0:02:07.360 --> 0:02:11.079 we don't know exactly what would happen, but one possibility is, 0:02:11.360 --> 0:02:14.799 you know, Mexico rule would retaliate then with its own 0:02:14.800 --> 0:02:17.680 set of tariffs. UM, and then you get into the 0:02:17.680 --> 0:02:20.920 trade war, and uh, you know, a whole variable of 0:02:20.960 --> 0:02:23.639 things can play out from there. But uh, that's sort 0:02:23.680 --> 0:02:26.520 of what we talk about when we see uh President 0:02:26.520 --> 0:02:29.720 electrov going on, and you know, discussing things like a 0:02:29.800 --> 0:02:33.720 border tax, uh, you know, from imports to Mexico. Well, indeed, 0:02:33.760 --> 0:02:36.960 in your most recent story, Shannon, you have a quote 0:02:37.000 --> 0:02:40.720 from Republican Senator Rob Portman of Ohio. Tell us what 0:02:40.800 --> 0:02:45.360 he was talking about. Well, the concern here with you know, 0:02:45.440 --> 0:02:50.800 putting a border tax on with exiting NAFTA or you know, 0:02:50.919 --> 0:02:54.880 getting into a trade war is that, Um, the okay? 0:02:54.919 --> 0:02:57.360 So sure, you know, it would make cars made in 0:02:57.400 --> 0:03:02.560 the US more competitive, It might encourage companies to make 0:03:02.560 --> 0:03:04.839 more products in the US, but also means goods coming 0:03:04.840 --> 0:03:07.160 in from Mexico go up in price. So all the 0:03:07.160 --> 0:03:10.000 Mexican made goods that we buy that are sold in 0:03:10.080 --> 0:03:12.160 stores like Walmart are going to go up in price. 0:03:12.480 --> 0:03:15.480 And also if you're a US manufacturer and you're importing 0:03:15.800 --> 0:03:18.120 you know, let's say the fabric or the styrofoam when 0:03:18.120 --> 0:03:21.639 your seek cushions for the chairs that you're going to 0:03:21.720 --> 0:03:24.519 be manufacturing in the US, the price of those important 0:03:24.639 --> 0:03:28.720 manufactured goods go up. So uh, that's the concern of 0:03:29.080 --> 0:03:31.519 what could happen here. Of course, there's there's ways to 0:03:31.600 --> 0:03:36.640 do this. NAFTA could be renegotiated. Um, we you know, 0:03:36.920 --> 0:03:39.640 could have a trade war and the air and prices 0:03:39.640 --> 0:03:42.240 of stuff from Mexico go up, but there's taxes or 0:03:42.240 --> 0:03:44.360 other incentives to offset it. I mean, there's there is 0:03:44.880 --> 0:03:46.920 a lot of variables that could play out. But the 0:03:47.000 --> 0:03:50.680 concern is that you know, you put tariffs on cars 0:03:50.720 --> 0:03:53.400 coming in from Mexico, Mexico retaliates and the cost of 0:03:53.440 --> 0:03:55.800 all sorts of good starts going up. And also the 0:03:56.080 --> 0:03:59.680 I should mentioned yeah, then the US manufacturers exporting UH 0:04:00.000 --> 0:04:04.560 good to Mexico also get hurt. Now, the authority of 0:04:04.720 --> 0:04:10.640 the president when Donald Trump, after he's inaugurated on January twenty, 0:04:11.240 --> 0:04:14.080 his power will be what I mean, will he be 0:04:14.240 --> 0:04:18.039 able to He doesn't. He has to forward any changes 0:04:18.120 --> 0:04:24.600 to treaties UH to the Senate. Right though, under there's 0:04:24.640 --> 0:04:28.600 a clause, a very short clause in the NaSTA agreement 0:04:28.680 --> 0:04:32.480 that would give the power of the president to just 0:04:32.640 --> 0:04:37.040 completely exit the agreement altogether. And he has said on 0:04:37.120 --> 0:04:39.880 the campaign trail that he could use that article of 0:04:39.960 --> 0:04:45.200 the agreement to exit NAPTA. UM. He has said, rather, 0:04:45.279 --> 0:04:47.760 what he'd like to do is renegotiate it and get 0:04:47.839 --> 0:04:51.040 us a really a really great deal and much better 0:04:51.200 --> 0:04:53.280 terms for the US as part of the agreement. But 0:04:53.600 --> 0:04:56.560 if Mexico and Canada did not play along, he could 0:04:56.600 --> 0:05:01.240 exercise that powers and just withdraw from the treaty. And 0:05:01.440 --> 0:05:04.680 also the president would have what the ability to impose 0:05:05.320 --> 0:05:09.800 a duty for one days, claiming what is described as 0:05:09.880 --> 0:05:15.640 a balance payments emergency. What is that? Yeah, So, so 0:05:15.920 --> 0:05:19.400 then let's say we did exit from NASA. UM Trump 0:05:19.440 --> 0:05:21.800 said he'd want to put a thirty percent tariff on 0:05:21.920 --> 0:05:24.839 goods coming from Mexico. Um, he would not be able 0:05:24.960 --> 0:05:27.880 to do that because even if we did, I guess 0:05:28.000 --> 0:05:32.159 at least legally, uh, even if we did exit NASA, 0:05:32.520 --> 0:05:34.760 then in ports of Mexico would have a four percent 0:05:34.880 --> 0:05:38.839 tariff on them under the most Favored Nation status, they 0:05:38.880 --> 0:05:42.200 would get this four percent tariff. Um he could put 0:05:42.240 --> 0:05:44.960 a higher trap, that fiercent tariff on but only for 0:05:45.040 --> 0:05:48.480 a limited period of a hundred days. Longer term, the 0:05:48.560 --> 0:05:50.760 most terror and the biggest therapy will be able to 0:05:50.800 --> 0:05:54.240 put on would be four percent, unless, of course, you know, 0:05:54.360 --> 0:05:58.480 at least with his with the unilateral powers of the presidency. Indeed, 0:05:58.560 --> 0:06:00.680 all right, well, we'll be watching this story, and thank 0:06:00.760 --> 0:06:03.520 you for covering at Shannon Petty piece are White House 0:06:03.600 --> 0:06:07.159 correspondent for Bloomberg News. Today, she is at Trump Tower 0:06:07.320 --> 0:06:22.080 in Midtown Manhattan. He decided to build a better bank, 0:06:22.240 --> 0:06:25.200 and he did so. Frank Sarantino is the chief executive 0:06:25.279 --> 0:06:28.120 officer of Connect One Bank. They're based in Englewood Cliffs, 0:06:28.200 --> 0:06:30.280 New Jersey, and he joins me. Now, Frank, thanks for 0:06:30.360 --> 0:06:32.800 coming in great to see this idea that do you 0:06:32.920 --> 0:06:35.680 built the bank. You went through kind of a start 0:06:35.760 --> 0:06:38.360 where you know, you had traditional bankers in charge, and 0:06:38.480 --> 0:06:41.200 now you know you've been running the bank for a while. 0:06:41.320 --> 0:06:43.920 What is different about having a person who was formerly 0:06:44.000 --> 0:06:46.880 a customer run a bank than just someone who is 0:06:47.040 --> 0:06:50.440 only in the banking industry. So you know, from my perspective, 0:06:50.560 --> 0:06:53.600 it's just bringing more of an entrepreneurial spirit to to 0:06:53.920 --> 0:06:57.120 to the business itself. And this is a highly regulated 0:06:57.600 --> 0:07:00.840 industry and for many many years, the things the way 0:07:00.960 --> 0:07:02.960 they've always been done, and so we just think a 0:07:03.000 --> 0:07:06.159 little bit differently about everything we do connect One Bank. 0:07:06.240 --> 0:07:08.640 We think about the customer and everything we do. We 0:07:09.160 --> 0:07:11.520 we assume the customer is in every one of our meetings. 0:07:11.600 --> 0:07:13.760 Whenever we have a conversation about what to do, what 0:07:13.880 --> 0:07:16.680 to do next, how we're going to run our organization. Uh, 0:07:16.760 --> 0:07:19.840 and I think that that pervades the entire thought process 0:07:19.920 --> 0:07:22.640 of how we do things. We we really work hard 0:07:22.720 --> 0:07:24.600 to work with a sense of urgency to get things 0:07:24.640 --> 0:07:27.720 done quickly at the speed that business demands. All right, 0:07:27.760 --> 0:07:29.720 well let's let well and it's a little bit different, 0:07:29.760 --> 0:07:32.200 then let me then let's go to some specifics if 0:07:32.240 --> 0:07:36.280 we can. For example, regulatory reform and Dodd Frank legislation 0:07:36.560 --> 0:07:39.800 is certainly a topic in Washington, d C. I'm sure 0:07:39.800 --> 0:07:42.200 it's a topic in your office is as well. What 0:07:42.360 --> 0:07:44.400 do you expect to happen and what effect will it have. 0:07:45.040 --> 0:07:47.360 So there's lots of talk in the industry today about 0:07:47.400 --> 0:07:52.040 a complete repeal of Dodd Frank. That's probably unlikely. What's 0:07:52.080 --> 0:07:56.040 more likely is a real cost benefit analysis. This is 0:07:56.080 --> 0:07:59.280 an industry that has always operated with regulations and will 0:07:59.320 --> 0:08:01.560 continue to op rate with regulations. We're not going to 0:08:01.640 --> 0:08:04.560 be the Wild West with no regulation. But there are 0:08:04.640 --> 0:08:07.680 lots of regulations that were put in place specifically since 0:08:07.760 --> 0:08:10.800 Dodd Frank that really have no cost benefit analysis and 0:08:10.920 --> 0:08:13.560 really may not benefit anyone. And and the amount of 0:08:13.960 --> 0:08:16.680 data that needs to be collected and reported upon really 0:08:16.760 --> 0:08:19.600 doesn't reflect the risk that's in the marketplace, and so 0:08:19.680 --> 0:08:22.400 I think we're gonna look at more sensible regulation. Would 0:08:22.440 --> 0:08:25.680 be an example of one regulation that you feel is 0:08:25.920 --> 0:08:29.600 not necessarily beneficial to either you or to the customer. 0:08:29.680 --> 0:08:31.960 So let's take it right to main street and the 0:08:32.040 --> 0:08:34.400 ability for a banker to make what used to be 0:08:34.480 --> 0:08:37.440 known as a character loan. I know you, I knew 0:08:37.480 --> 0:08:39.600 your family. You know we know you had the store 0:08:39.640 --> 0:08:42.880 in town for the last forty years. You've never uh 0:08:43.280 --> 0:08:45.679 never not paid your debts. Yet if we don't have 0:08:46.160 --> 0:08:50.160 every single piece of financial documentation that can demonstrate that 0:08:50.559 --> 0:08:52.800 not only can you make the payments, but you can 0:08:52.880 --> 0:08:55.520 pay off the loan at maturity, we can't make that 0:08:55.600 --> 0:08:58.280 loan to you. And so today that's a that's a challenge, 0:08:58.320 --> 0:09:01.000 and that's hurting small business. On the flip side of that, 0:09:01.240 --> 0:09:02.880 you know, someone who wants to buy a home with 0:09:02.960 --> 0:09:06.800 the qualified Mortgage standards UM is making it much more 0:09:06.880 --> 0:09:09.719 difficult today for first time home buyers to purchase that 0:09:09.720 --> 0:09:12.360 at home. The bank doesn't have as much discretion as 0:09:12.400 --> 0:09:15.320 it used to have in the past about deciding who 0:09:15.480 --> 0:09:17.959 is a qualified borrower and who isn't based on the 0:09:18.080 --> 0:09:20.800 bank uh Now it has to be a standard that 0:09:20.840 --> 0:09:23.160 we can apply across the entire fifty states in the 0:09:23.240 --> 0:09:25.120 United States, and I don't think that's I don't think 0:09:25.120 --> 0:09:27.280 that's appropriate. And I think we're seeing the impact of that. 0:09:27.360 --> 0:09:31.400 We're seeing home ownership leg uh for for the reasons 0:09:31.480 --> 0:09:33.200 that people can't come up with the down payment. Now 0:09:33.240 --> 0:09:35.480 there are other reasons as well, but this is certainly 0:09:35.559 --> 0:09:39.760 one of the reasons. Has bureaucracy replaced common sense? Absolutely, 0:09:40.520 --> 0:09:43.880 we've definitely, I think the pendulum swings, and in this 0:09:44.040 --> 0:09:46.719 particular case, I think we have swung the pendulum to 0:09:46.800 --> 0:09:50.000 the place where, uh, it's more important to think about 0:09:50.040 --> 0:09:53.000 what the rules say as opposed to what makes sense. Uh. 0:09:53.240 --> 0:09:56.400 And you know there's also this happens in business, but 0:09:56.760 --> 0:09:59.560 clearly in banking, there's a fear of failure. We can 0:09:59.640 --> 0:10:02.360 never have a bank ever fail, and I don't think 0:10:02.440 --> 0:10:04.959 that's the standard. I think I think we this is 0:10:05.559 --> 0:10:08.040 you know, this is a a capitalist society, and I 0:10:08.080 --> 0:10:11.040 think people make decisions, and we have the appropriate amounts 0:10:11.080 --> 0:10:14.439 of capital required to charter a bank, but I think 0:10:14.440 --> 0:10:16.960 it's up to management in those boards to make those decisions. 0:10:17.200 --> 0:10:19.320 I also believe we should never have an institution that's 0:10:19.360 --> 0:10:21.240 too big to fail, right, that we could never have 0:10:21.480 --> 0:10:24.480 that that failure take place. But the notion that no 0:10:24.640 --> 0:10:27.800 bank should ever fail under any circumstances, I think it 0:10:27.920 --> 0:10:30.480 is really harming the industry. It sounds like a good 0:10:30.640 --> 0:10:32.280 sounds like a good thing to do, right, it sounds 0:10:32.360 --> 0:10:34.680 like it makes sense. But at the end of the day, UH, 0:10:34.760 --> 0:10:38.040 think about any other industry where you would say, under 0:10:38.160 --> 0:10:41.560 no circumstances can there be a failure? UM, that'd still 0:10:41.559 --> 0:10:44.880 be a lot of buggy with businesses and other industries 0:10:45.120 --> 0:10:47.640 today that I'm not so sure you'd want around interesting 0:10:47.720 --> 0:10:51.080 point talk about tax reform and what you perceive is likely. 0:10:51.960 --> 0:10:55.599 So I think UM tax reform is probably one of 0:10:55.679 --> 0:10:59.719 the most likely outcomes of the recent election. I think 0:10:59.760 --> 0:11:03.400 it will benefit certainly in the short term UM. Many 0:11:03.640 --> 0:11:07.000 companies banks included banks paying enormous People don't realize, but 0:11:07.080 --> 0:11:10.360 banks pay a tremendous amount of tax for both federal 0:11:10.400 --> 0:11:13.400 and state taxes UH, and so any reduction in those 0:11:13.520 --> 0:11:17.440 tax rates will not only benefit other companies. But as 0:11:17.520 --> 0:11:20.400 you know, if if a bank benefits and has more 0:11:21.200 --> 0:11:24.520 UH net income, that goes to capital and allows banks 0:11:24.559 --> 0:11:26.720 to make more loans. So I think that will benefit 0:11:27.040 --> 0:11:31.480 the economy greatly. On top of which, if everyone has 0:11:31.559 --> 0:11:34.040 is stated, gets some sort of a tax break, that's 0:11:34.080 --> 0:11:36.320 money coming into the economy. And I think we're seeing 0:11:36.360 --> 0:11:40.079 signs that the markets already reacted to that. The market 0:11:40.160 --> 0:11:42.079 has already reacted that. Do you think the market is 0:11:42.160 --> 0:11:45.360 overreacted to that? Well, that's that's to be seen. Right 0:11:45.400 --> 0:11:48.439 There are those who say we're just getting going, and 0:11:48.760 --> 0:11:51.480 there are those who say it's overreacted, and there's still 0:11:51.640 --> 0:11:53.800 lots of forces that will bring the market back to 0:11:54.559 --> 0:11:57.600 back to earth. I'm of the I'm in the camp 0:11:57.720 --> 0:12:00.560 that I think this is the a a great amount 0:12:00.559 --> 0:12:02.439 of liquidity that we're going to need today, and I 0:12:02.480 --> 0:12:05.480 think the market is reacting appropriately to what it sees 0:12:05.600 --> 0:12:08.120 is the most probable outcome to whether or not we 0:12:08.200 --> 0:12:10.520 get tax reform. I just want to bring this headline 0:12:10.559 --> 0:12:13.720 to you that President elect Donald Trump has named Jay 0:12:13.840 --> 0:12:19.120 Clayton to head the Securities in Exchange Commission. Jake Clayton 0:12:19.320 --> 0:12:23.800 is a lawyer, and he would succeed Securities and Exchanged 0:12:24.040 --> 0:12:28.720 chairman Mary Joe White, another lawyer. Clayton met with Trump 0:12:29.160 --> 0:12:33.440 in early December and is a partner at Sullivan and Cromwell, 0:12:33.480 --> 0:12:36.080 where he worked on the initial public offering of Ali 0:12:36.200 --> 0:12:42.240 Baba Group. UM. Frank last point to business sentiment more loans, 0:12:42.320 --> 0:12:44.760 less loans, kinds of loans. Give us some details. So 0:12:44.920 --> 0:12:48.679 in keeping with the tax discussion, Certainly, people feeling that 0:12:48.720 --> 0:12:51.280 they're going to have more money, whether it's a person 0:12:51.520 --> 0:12:54.800 or even businesses that think that they're going to either 0:12:55.040 --> 0:12:58.120 have more wages or more in the way of net income. 0:12:58.679 --> 0:13:01.120 UM certainly feel better about out the future. And we're 0:13:01.160 --> 0:13:04.199 seeing that our client base to connect one definitely has 0:13:04.280 --> 0:13:08.520 been coming back to us. UH. Certainly those that are 0:13:08.960 --> 0:13:12.280 any way affiliated with any type of infrastructure building right engineers, 0:13:12.320 --> 0:13:16.400 environmental firms, architectural firms, UH, investors, real estate people are 0:13:16.640 --> 0:13:19.920 very very optimistic about what the future looks like to them, 0:13:20.480 --> 0:13:23.560 and we're starting to see that sentiments spill over into 0:13:23.600 --> 0:13:26.200 the request that we're seeing today, and I think people 0:13:26.200 --> 0:13:27.880 are willing to stretch a little bit based on what 0:13:27.960 --> 0:13:30.520 they believe the future looks like. Thanks very much for 0:13:30.600 --> 0:13:33.559 coming in. Always great give us some details about the 0:13:33.600 --> 0:13:38.040 banking industry and about what might change in in this year. 0:13:38.559 --> 0:13:42.280 Frank Sorrentino is the chief executive officer of Connect One Bank. 0:13:42.280 --> 0:13:44.959 They're based in Englewood Cliffs, New Jersey. Is also the 0:13:45.000 --> 0:14:00.120 founder of the bank. All right, let's get smart when 0:14:00.120 --> 0:14:02.880 it comes to healthcare in the United States with Brian Ry. 0:14:03.040 --> 0:14:06.760 He is our senior healthcare policy analyst for Bloomberg Intelligence 0:14:06.800 --> 0:14:09.599 for their government team. Joining us from Washington, d C. 0:14:09.800 --> 0:14:12.640 Home to Bloomberg and one oh five point seven h 0:14:12.800 --> 0:14:17.480 D two. Brian, there is a battle going on right 0:14:17.600 --> 0:14:23.160 now in Washington, even before President elect Donald Trump is inaugurated, 0:14:23.480 --> 0:14:26.480 having to do with the Affordable Care Act perhaps a 0:14:26.560 --> 0:14:30.840 better known as Obamacare. What is happening and what are 0:14:31.080 --> 0:14:33.640 we witnessing? Oh? I guess you know, happy New Year 0:14:33.680 --> 0:14:37.200 and here we go, thanks for how quick? Uh? You know? 0:14:37.360 --> 0:14:41.200 The Republicans, you know, campaigned on a promise for the 0:14:41.280 --> 0:14:44.400 last six years of repealing and replacing Obamacare, and for 0:14:44.520 --> 0:14:46.280 the last six years it's sort of been a toothless 0:14:46.320 --> 0:14:49.080 promise because President Obama had a veto thread in the 0:14:49.160 --> 0:14:51.560 office in the in the White House that's going away now. 0:14:51.680 --> 0:14:53.920 And so now they're sort of the dog that's caught 0:14:53.960 --> 0:14:55.400 the car. What are you going to do with it 0:14:55.480 --> 0:14:57.520 now that you've actually caught it? Uh? And you have 0:14:57.640 --> 0:15:00.440 to actually back up those promises. So the Hotter fifteenth 0:15:00.480 --> 0:15:03.400 Congress UH was sworn in yesterday, So they are ready 0:15:03.440 --> 0:15:06.120 to go there looking to using looking at using a 0:15:06.200 --> 0:15:09.520 process and we'll get into details, but a budget reconciliation 0:15:09.640 --> 0:15:13.440 process that won't repeal Obamacare, award for word, but it 0:15:13.560 --> 0:15:16.840 can repeal or at least terminate several key provisions, the 0:15:16.960 --> 0:15:20.160 insurance mandates, the Medicaid expansion, a lot of the taxes 0:15:20.200 --> 0:15:23.440 imposed by the law. Um. But then the question becomes, well, Okay, 0:15:23.640 --> 0:15:25.800 you've done that, what are you going to replace it with? 0:15:26.200 --> 0:15:28.000 And how long is it going to take for that 0:15:28.120 --> 0:15:31.480 transition to take place. Well, clearly there's going to be 0:15:31.640 --> 0:15:34.560 a debate about it, because the President Obama has just 0:15:34.760 --> 0:15:37.640 left the or is leaving the capital after a strategy 0:15:37.720 --> 0:15:40.640 meeting with Democrats. I don't know what went on in 0:15:40.720 --> 0:15:42.520 the meeting, but I would imagine it has to do 0:15:42.880 --> 0:15:46.640 with providing a defense for many of the provisions of 0:15:46.760 --> 0:15:49.480 the Affordable Care Act. Well, that's it, and I think 0:15:49.520 --> 0:15:51.200 at the end of the day, you're going to see 0:15:51.200 --> 0:15:54.560 you actually several of those provisions remain in whatever replacement 0:15:54.680 --> 0:15:58.200 vehicle Republicans come up with, such as protections for those 0:15:58.280 --> 0:16:01.240 with pre existing conditions being able for you know, kids 0:16:01.320 --> 0:16:04.120 to stay on their parents plan until age six, um. 0:16:04.520 --> 0:16:07.120 But you know how long that actually takes in Well, 0:16:07.480 --> 0:16:10.080 how can you get there without having the the unpopular 0:16:10.120 --> 0:16:11.920 parts of the law, you know, the mandates and the 0:16:12.000 --> 0:16:15.640 penalties and and the rising premiums that that you know, frankly, 0:16:15.880 --> 0:16:17.600 you know have been an effect. And I think that's 0:16:17.640 --> 0:16:19.360 one of the reasons why we have a president elect 0:16:19.400 --> 0:16:23.080 Trump and a Republican controlled Congress, unlike what happened in 0:16:23.120 --> 0:16:25.840 two thousand ten when Democrats controlled everything. Is the law 0:16:25.920 --> 0:16:29.000 hasn't quite worked as well as the Democrats would have hoped, 0:16:29.440 --> 0:16:30.840 but they do have some things they can point to 0:16:30.920 --> 0:16:33.280 that people do like. And if there's any disruption along 0:16:33.360 --> 0:16:36.040 the way, that's certainly going to create some political headwinds, 0:16:36.040 --> 0:16:38.560 because you're right, Democrats are going to shine as bright 0:16:38.640 --> 0:16:42.040 as spotlet as they possibly can on any stories about 0:16:42.080 --> 0:16:45.400 people losing their coverage along the way, um, whatever the 0:16:45.440 --> 0:16:48.080 Republicans claim they're trying to do. I just also want 0:16:48.080 --> 0:16:51.120 to mention that president of Vice President elect that Mike 0:16:51.240 --> 0:16:55.920 Pence visited the capital earlier four meetings on the healthcare bill. 0:16:56.240 --> 0:17:01.120 Presumably that is about Republicans put putting forth the contrary plan. 0:17:02.000 --> 0:17:04.920 Can you tell us are there any Republicans that would 0:17:04.960 --> 0:17:07.200 need to be won over in the Senate in order 0:17:07.280 --> 0:17:09.879 to change provisions of the Affordable Care Act? Or they 0:17:09.960 --> 0:17:12.760 all on board? I think they're all conceptually on board. 0:17:12.800 --> 0:17:14.359 But you know, when push comes to shove, they have 0:17:14.480 --> 0:17:17.080 you know, a majority of fifty two uh in in 0:17:17.160 --> 0:17:20.000 the Senate, so not much room to spare. I think, Steve, 0:17:20.040 --> 0:17:22.399 the topics of discussion are going to be, Okay, you know, 0:17:22.920 --> 0:17:24.800 how long are we going to let people linger if 0:17:24.800 --> 0:17:26.960 we're going to say, okay, we're gonna repeal everything now, 0:17:27.560 --> 0:17:30.760 but not come up with a replacement plan until I 0:17:30.840 --> 0:17:33.960 think you might see some a few senators be on 0:17:34.040 --> 0:17:36.800 the edge about that, um. But conversely, I think others 0:17:36.800 --> 0:17:39.600 are wary of jumping into soon and causing a lot 0:17:39.640 --> 0:17:42.480 of disruption and sort of um calling, shooting themselves in 0:17:42.520 --> 0:17:44.360 the foot before they can get out of the starting gate. 0:17:44.600 --> 0:17:46.879 So I think there's certainly going to be discussions, um. 0:17:47.240 --> 0:17:49.640 And that's why you know, when when push comes to shove, 0:17:49.720 --> 0:17:52.680 Congresses is extremely efficient kicking the can down the road, 0:17:52.920 --> 0:17:54.960 and I would look for them to for all the 0:17:55.000 --> 0:17:57.760 talk and bluster that we're hearing today for this to 0:17:57.840 --> 0:18:00.399 not be a smooth process and this to take months 0:18:00.440 --> 0:18:02.600 and maybe even years rather than the weeks not that 0:18:02.680 --> 0:18:06.080 they're talking about now. So if you're an investor in 0:18:06.480 --> 0:18:10.720 either hospital corporations like h c A or indeed health 0:18:10.800 --> 0:18:16.840 insurer such as UH Community, UH Molina for example, or Sentien, 0:18:18.040 --> 0:18:20.240 what investors should be what should they be worried about 0:18:20.320 --> 0:18:23.159 and how fast should they worry? Yeah, I think the 0:18:23.359 --> 0:18:25.920 the insurance that you mentioned, the Senteens, the Molina's, I 0:18:25.960 --> 0:18:28.280 think they're worried about an aspect of the law of 0:18:28.280 --> 0:18:30.879 the Medicaid expansion. Um. You know, that was part of 0:18:30.960 --> 0:18:33.240 the a c A. That is one thing that through 0:18:33.280 --> 0:18:36.800 this budget reconciliation process that Republicans can end pretty quickly, 0:18:36.840 --> 0:18:39.200 and that's been a good source of revenue for those insurers. 0:18:39.200 --> 0:18:41.760 So that's something that could go away. And then anything 0:18:41.880 --> 0:18:45.800 that increases the number of uninsured Americans, well that's the 0:18:45.840 --> 0:18:49.280 problem for the hospitals you outlined, because if you don't 0:18:49.320 --> 0:18:51.240 have insurance, you're not able to pay those bills. That 0:18:51.400 --> 0:18:54.200 increases their bad debt expense can hurt their bottom lines 0:18:54.600 --> 0:18:56.520 as well. So those of the I think you touched 0:18:56.560 --> 0:18:59.119 on the two groups that are most most eager and 0:18:59.200 --> 0:19:01.720 most anxious about what's going to happen now. At the 0:19:01.760 --> 0:19:04.080 same time, a lot of insurers have been leaving the 0:19:04.160 --> 0:19:06.879 existing Obamacare exchanges, so it's not like that's been a 0:19:06.960 --> 0:19:10.639 great business deal for them on those state exchanges. So 0:19:10.680 --> 0:19:12.440 I think they're eager to see some changes to maybe 0:19:12.520 --> 0:19:15.280 draw them back in. And Republicans certainly have an incentive 0:19:15.320 --> 0:19:18.240 to try and UNFOS as stable as possible. Always a pleasure. 0:19:18.320 --> 0:19:21.159 Brian Rye expert when it comes to healthcare policy. He 0:19:21.359 --> 0:19:25.720 is our senior healthcare policy analysts for Bloomberg Intelligence for 0:19:25.960 --> 0:19:39.480 the Government team, which is one of two hundred thousand 0:19:39.560 --> 0:19:43.399 attendees at the Consumer Electronics Show. Sandy Rowland is the 0:19:43.480 --> 0:19:47.000 chief financial officer of Harmon. Harmon International, it's being acquired 0:19:47.080 --> 0:19:51.240 by Samsung. Sandy, thank you for being with us having 0:19:51.400 --> 0:19:54.560 how's the time in Las Vegas? Is everybody already geared 0:19:54.760 --> 0:20:00.320 up for computing and taking selfies inside their own automobiles? Wow? 0:20:00.600 --> 0:20:03.800 I mean the energy out here is just amazing. Um 0:20:04.080 --> 0:20:07.840 Our booth opened about thirty minutes ago, and uh, the 0:20:08.000 --> 0:20:10.800 lines are already forming. We're so excited to be hosting 0:20:10.920 --> 0:20:14.240 customers from all around the globe this week. Tell us 0:20:14.320 --> 0:20:17.560 some of the items that are on view at your 0:20:17.680 --> 0:20:20.240 booth and what that means for the future of the 0:20:20.320 --> 0:20:24.359 connected automobile. Yeah, well, this we're really excited that this 0:20:24.520 --> 0:20:28.879 year we've moved the conversation from connected to intelligent and 0:20:29.040 --> 0:20:33.240 intuitive UM. And this year it's all about innovation that 0:20:33.440 --> 0:20:38.160 delivers an immersive, personalized experience, whether it's for the automobile, 0:20:38.480 --> 0:20:41.600 for the enterprise, or for the home. So what would 0:20:41.640 --> 0:20:48.359 be some of those things, for example, navigation, h embedded infotainment, telematics, 0:20:48.960 --> 0:20:52.040 What would be some of the details, Yeah, absolutely, all 0:20:52.080 --> 0:20:54.560 of the above. UM. What we're excited about in the 0:20:54.640 --> 0:21:00.240 automobile this year, it's all about customization and personalization. So 0:21:00.400 --> 0:21:03.320 once the car is connected, there's so much more that 0:21:03.480 --> 0:21:06.159 you can do with it. So, for example, one of 0:21:06.200 --> 0:21:09.600 the things that we're showcasing this year is how we've 0:21:09.640 --> 0:21:13.440 brought in Microsoft solutions into the car. UM. The driver 0:21:13.640 --> 0:21:16.960 can have access to their calendar, the driver can make 0:21:17.480 --> 0:21:21.200 access conference calls seamlessly, UM. But if they don't want 0:21:21.240 --> 0:21:24.879 to do work, UM, we've brought in entertainment solutions that 0:21:25.160 --> 0:21:28.760 you can convert the car. UM really into an IMAX theater. 0:21:29.280 --> 0:21:32.399 UM you can have individual sound zones where each and 0:21:32.600 --> 0:21:36.679 every driver can have a totally different listening experience. UM. 0:21:36.800 --> 0:21:39.680 All of these are examples of how we're customizing the 0:21:39.800 --> 0:21:43.320 solutions for the car. You've also put together a package 0:21:43.640 --> 0:21:49.840 of lane departure indicators, pedestrian detection, also camera based navigation, 0:21:50.000 --> 0:21:54.320 rear view three sixties surround view solutions. This is UH 0:21:54.920 --> 0:21:57.760 going to take a lot of power, battery power in 0:21:57.880 --> 0:22:00.720 order to keep running. What is the the sort of 0:22:00.800 --> 0:22:04.160 demand from an automobile now in terms of battery used 0:22:04.160 --> 0:22:06.960 to start the car and and maybe like the interior, 0:22:07.040 --> 0:22:08.840 but that's it's a far that's a far cry from 0:22:08.880 --> 0:22:11.800 where we are today. Yeah, for us, it's it's not 0:22:11.920 --> 0:22:14.879 only about the battery, but it's about how many lines 0:22:14.920 --> 0:22:17.960 of code our solutions bring into the car UM, and 0:22:18.040 --> 0:22:20.400 the lines of codes are in the millions, over twenty 0:22:20.520 --> 0:22:23.200 five million lines of code to bring in some of 0:22:23.240 --> 0:22:26.600 these solutions into the into the car. And of course 0:22:26.680 --> 0:22:29.520