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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Acule. He's down by a third of one percent.

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Speaker 3: It was a bit higher, up by four basis points

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Speaker 3: the ten year four twelve forty three under Savannahs this morning,

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Speaker 3: donald Trump's favorite word.

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Speaker 4: And these companies don't make their cars and products here,

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Speaker 4: then they will pay a tariff for very stiff tariff

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Speaker 4: when they send their products into the United States. We're

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Speaker 4: going to call this policy build it in America plan.

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Speaker 4: We brought the rate down and you saw this from

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Speaker 4: close to forty percent to twenty one percent. Now we're

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Speaker 4: going to get it down to fifteen percent, but only

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Speaker 4: if they build it in America.

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Speaker 3: So here's the latest global markets pricing for Donald Trump's

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Speaker 3: plans to overhaul the US economy through steep tariffs and

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Speaker 3: big tax cuts, including cut in the corporate tax rate

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Speaker 3: of fifteen percent. At a post of the Pedis Institute

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Speaker 3: issuing a word of caution rting, the Trump approach weaponizes uncertainty,

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Speaker 3: but uncertainty is a difficult weapon to control, and it

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Speaker 3: will backfire on whoever wields it too widely. Adam joins

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Speaker 3: us now for more and welcome back to the program

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Speaker 3: Sir always important to spend some time with you and

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Speaker 3: think through some of these issues.

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Speaker 2: Let's just talk about that quote a little bit more.

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Speaker 3: What do you mean when you say it's a difficult

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Speaker 3: weapon to control and will bank fire on whoever wields

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Speaker 3: it too widely?

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Speaker 1: Thank you, John for having me back on surveillance. I

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Speaker 1: think the issue is that you do two things that

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Speaker 1: don't necessarily work in economics when you threaten a lot,

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Speaker 1: but it also is harmful to you. The first is

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Speaker 1: you create uncertainty, not just in the minds of that

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Speaker 1: corporate CEO or that particular government you're negotiating with. You

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Speaker 1: create uncertainty ripple effects throughout a whole bunch of other governments,

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Speaker 1: a whole bunch of other companies, and they start to

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Speaker 1: self ensure they don't just get scared to do what

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Speaker 1: you want of the same they don't necessarily do what

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Speaker 1: you want them to do. The second problem with this

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Speaker 1: uncertainty weaponization that Trump is big on, or at least

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Speaker 1: it's one way of rationalizing Trump's policies, is that you

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Speaker 1: actually have to implement it to be credible. You can't

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Speaker 1: just threaten it. So a lot of people talking in

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Speaker 1: the markets a lot of pundits, a lot of people

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Speaker 1: even affiliate with the campaign and say, well, this is

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Speaker 1: all just about negotiating posession. Trump will threaten these terrors,

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Speaker 1: Trim will threatn these taxes, and that will induce the

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Speaker 1: reassuring to the US. But you can't do that unless

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Speaker 1: it's credible you're actually going to do it. And the

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Speaker 1: only way to do that is to actually implement the policy,

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Speaker 1: so you get the harm up front and you don't

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Speaker 1: necessarily get the benefit. One of the ironies JOm, for

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Speaker 1: people you and I have others on this program talk

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Speaker 1: to and talk about, is that the more the market's

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Speaker 1: bet that Trump A will win but B will not

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Speaker 1: actually do these crazy things, the more it is incumbent

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Speaker 1: on him to have to do them.

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Speaker 5: But Adam, when you hear from some Trump economic advisors,

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Speaker 5: what they say is that it will be used as

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Speaker 5: a carrot and stick approach, meaning maybe two and a

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Speaker 5: half percent of the sixty percent they want to do

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Speaker 5: on China, but two and a half percent every month

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Speaker 5: until they get Hijinping to the table. Because what they

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Speaker 5: say is that there needs to be fair trade between

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Speaker 5: China and the United States, and they do not view

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Speaker 5: trade right now between China and the United States is fair?

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Speaker 5: Do you view trade right now what China is doing

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Speaker 5: as fair?

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Speaker 1: No? But I also don't view it as something you

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Speaker 1: whine about. I mean, this is the thing that both

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Speaker 1: the Biden team and the Trump team have done. Is

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Speaker 1: they if they had been Georgia playing against Texas, you know,

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Speaker 1: the top two in the football, the college football, they

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Speaker 1: would have spent their whole time whining about the referees

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Speaker 1: and wan a call went against, the north of the

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Speaker 1: crowd went against, and they would have packed it up

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Speaker 1: and gone home. That's what they're doing for packing it

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Speaker 1: up and going home. But real players in the major

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Speaker 1: is which the US economy should be. If you have

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Speaker 1: to win, you win even if the referees are skewed

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Speaker 1: against you, even if the crowd's rooting against you. You

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Speaker 1: don't get so caught up in excuses and small deterrence.

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Speaker 2: Okay, but the Biden administration.

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Speaker 1: Capt trade it is too small.

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Speaker 5: Sorry, Well, the bidendministration kept those tariffs on.

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Speaker 2: So what would you what would be your.

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Speaker 5: Idea for both of these campaigns to try to level

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Speaker 5: the playing field.

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Speaker 1: Well, but I think the point is the Biden administration

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Speaker 1: and the Trump administration kept on those terraffs and it's

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Speaker 1: had absolutely no effect. The so called Phase one tariffs

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Speaker 1: on China deal, which Trump had had no effect in

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Speaker 1: terms of what they were buying or selling. Both the

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Speaker 1: Biden and the Trump administrations claimed the Chinese are still

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Speaker 1: stealing ip, still subsidizing, still doing this and that. So

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Speaker 1: you can say, oh, well, then they if this didn't work,

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Speaker 1: let's try it tenfold. But that's the key difference here

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Speaker 1: is that Trump this time is talking repeatedly on the

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Speaker 1: record in the platform about doing tariffs at ten to

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Speaker 1: twenty times they level he did last time, and doing

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Speaker 1: them across a whole range of countries, not just China,

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Speaker 1: at a much higher level at Chinese, talking about multiple

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Speaker 1: food and so it's going to have much worse effects

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Speaker 1: on the US economy. You can shrug it off. It's

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Speaker 1: not good. It's attacks on people. Companies that were affected

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Speaker 1: by the tariffs lost valuation, as the New York Fed

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Speaker 1: study showed, it was inflationary for people. But the big

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Speaker 1: thing is Harris has at least said repeatedly. Vice President

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Speaker 1: Harris has at least said repeatedly tariffs are attacks. There

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Speaker 1: are regressive tacks that are working people more, which is

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Speaker 1: full and true, and she's not going to do across

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Speaker 1: the board Terraffs. I still wish she in her administration

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Speaker 1: if they're in reconsider this whole approach. But nonetheless, there

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Speaker 1: is a very big difference between stopping the tariffs where

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Speaker 1: they are now and only using them in specific cases

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Speaker 1: at China, which is bad but minor versus across the board,

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Speaker 1: huge Terraffs.

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Speaker 6: There's a big, bigger question here, Adam. And this is

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Speaker 6: the reason why the whole concept of tariffs has been

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Speaker 6: and resonating with a lot of people, which is their

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Speaker 6: whole swass of the US economy, that feel left behind

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Speaker 6: by globalization by moving manufacturing overseas and would welcome the

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Speaker 6: manufacturing and some of the industrial prowess to come back

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Speaker 6: to the United States. Is there a proposal to increase

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Speaker 6: production in the United States in a sustainable way with

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Speaker 6: the staff that we currently have.

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Speaker 1: I think the answer, Lease is no. I mean, I

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Speaker 1: might push back at you at that political perception because

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Speaker 1: it's not really grounded in reality, but certainly there are

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Speaker 1: people who are obsessed with having domestic manufacturing and we

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Speaker 1: have manufacturing. You know, you talk about Apple, you talk

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Speaker 1: about Nvidia, you talk about all these companies that are

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Speaker 1: worth much much more, as somebody tweeted this morning, than

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Speaker 1: the companies that make stuff. You know, these are the

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Speaker 1: companies that design stuff, that do R and D, and

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Speaker 1: so then you can say, well, what about the terrible

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Speaker 1: things that are happening. There aren't that many terrible things

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Speaker 1: that are happening. We have the highest labor force participation

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Speaker 1: rate in forever, we have one of the lowest unemployment

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Speaker 1: rates in forever. We have income growth much higher than

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Speaker 1: it's been. We have fewer people in poverty than it's

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Speaker 1: ever been. So this constant refrain that we're losing because

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Speaker 1: our manufacturing has moved up and up and up in

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Speaker 1: value and become more productive and therefore needs less workers

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Speaker 1: on the floor is falsehood. So then you say, okay,

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Speaker 1: but the how do we buy off the angry people? Well,

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Speaker 1: that's how you get Trump, and that's not good. And

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Speaker 1: so at some point you have to appeal to people

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Speaker 1: that they maybe shouldn't be so angry, or that they

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Speaker 1: maybe should adjust. And the reality is we can't drive

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Speaker 1: the entire country about what's happened in a few counties

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Speaker 1: in a few states, and that's part of our politics

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Speaker 1: that year after year, a majority of the country clearly

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Speaker 1: has views on whether it's gun control or globalization, or

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Speaker 1: the economy or healthcare. And it gets stemy by very.

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Speaker 6: Small Adam, Where does national security fall into this at

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Speaker 6: a time we're an increasing number of the goods that

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Speaker 6: we're talking about could potentially have some national security components.

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Speaker 1: That's a much more serious issue, Lisa, And that's the

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Speaker 1: one which is genuinely difficult and people are wrestling with.

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Speaker 1: I mean, you can imagine it seems a bit of

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Speaker 1: a stretch, but you can't imagine, for example, if we

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Speaker 1: do buy Chinese evs that there would be planted bugs

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Speaker 1: and controls and things in there that could be dangerous.

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Speaker 1: Not clear what that the economic res hunts, however, is

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Speaker 1: the way to get around it. That doesn't mean you

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Speaker 1: should let everything in. But we see right now there's

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Speaker 1: news reports now about all these weapons the Russians are using,

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Speaker 1: all these things the Chinese are using, where you can

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Speaker 1: see that asml TSMC, all these companies that we're protecting

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Speaker 1: are still selling and producing in China. And that's in

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Speaker 1: the very narrow spectrum of focusing on just the chips

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Speaker 1: and just these critical industries, with the full weight to

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Speaker 1: the US government, allies, and you still can't maintain the

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Speaker 1: sanctions and the controls. So again it's like the terrorists.

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Speaker 1: You just keep upping and upping and upping it, saying, well,

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Speaker 1: we didn't try hard enough, ye, Or do you.

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Speaker 2: Think Adam is a tough spot?

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Speaker 3: The conversation you and I'll continue, we'll all continue with

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Speaker 3: you through to election. Down beyond Adam posting there the

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Speaker 3: Peterson Institute