1 00:00:02,520 --> 00:00:08,240 Speaker 1: Bloomberg Audio Studios, podcasts, radio news less. 2 00:00:08,080 --> 00:00:10,840 Speaker 2: Than twenty four hours now until tomorrow's event in the 3 00:00:10,920 --> 00:00:13,480 Speaker 2: Rose Garden, we take a look at how individual states 4 00:00:13,520 --> 00:00:16,920 Speaker 2: are preparing for the economic impact if they can. Joining 5 00:00:17,000 --> 00:00:21,000 Speaker 2: us now in fact, from Denver, Colorado Governor Jared Poulis, Governor, 6 00:00:21,040 --> 00:00:23,040 Speaker 2: it's great to see you. Welcome back to Bloomberg TV 7 00:00:23,120 --> 00:00:26,360 Speaker 2: and Radio. A report just doubt from a group called 8 00:00:26,400 --> 00:00:29,480 Speaker 2: Farmers for Free Trade and the World Trade Center Denver 9 00:00:30,200 --> 00:00:33,680 Speaker 2: finds that the tariff policies were expecting and we're unclear 10 00:00:33,720 --> 00:00:36,000 Speaker 2: on what exactly they will be from Donald Trump tomorrow 11 00:00:36,000 --> 00:00:40,559 Speaker 2: could quadruple what Colorado already pays for imports. How do 12 00:00:40,600 --> 00:00:41,360 Speaker 2: you prepare for that? 13 00:00:44,040 --> 00:00:46,440 Speaker 3: Look, I mean, this is one of the biggest tax 14 00:00:46,520 --> 00:00:48,199 Speaker 3: hikes in American history. 15 00:00:48,360 --> 00:00:50,840 Speaker 1: It's not Liberation Day, it's recession day. 16 00:00:51,479 --> 00:00:54,480 Speaker 3: Fundamentally, I'm saddened because, like so many others, I was 17 00:00:54,520 --> 00:00:58,080 Speaker 3: hoping the President was using this as a negotiating tactic 18 00:00:58,160 --> 00:01:00,880 Speaker 3: to have more free trade, which we would love and 19 00:01:00,920 --> 00:01:05,360 Speaker 3: benefit from. Free trade is fair trade, bring down tariffs 20 00:01:05,360 --> 00:01:08,560 Speaker 3: and barriers, both for imports as well as reciprocally for 21 00:01:08,640 --> 00:01:11,360 Speaker 3: exports to other countries. But it looks like they're actually 22 00:01:11,400 --> 00:01:14,680 Speaker 3: fixated on a tax increase here, increasing the size of 23 00:01:14,760 --> 00:01:19,640 Speaker 3: government through charging consumers more destructive to American manufacturing, agricultures, 24 00:01:19,680 --> 00:01:23,240 Speaker 3: Colorado's biggest sector. It would be devastating our biggest trade partners, 25 00:01:23,319 --> 00:01:28,280 Speaker 3: Canada and Mexico. So I really go into this in 26 00:01:28,319 --> 00:01:31,600 Speaker 3: a very realistic but sad state that this is what. 27 00:01:31,600 --> 00:01:32,160 Speaker 1: It's coming to. 28 00:01:33,400 --> 00:01:36,720 Speaker 4: Well, as you talk about US manufacturing, Governor, the President 29 00:01:36,800 --> 00:01:39,319 Speaker 4: argues that this is a way to bring more manufacturing 30 00:01:39,360 --> 00:01:41,880 Speaker 4: to this country. Do you expect Colorado could reap any 31 00:01:41,920 --> 00:01:44,480 Speaker 4: of that benefit of companies wanting to make more in 32 00:01:44,520 --> 00:01:45,400 Speaker 4: the United States. 33 00:01:47,800 --> 00:01:50,960 Speaker 3: It'll destroy American manufacturing. And I've talked to many manufacturers 34 00:01:50,960 --> 00:01:53,120 Speaker 3: here who are going to close down and move overseas 35 00:01:53,160 --> 00:01:56,120 Speaker 3: or considering doing that because guess what two things. One is, 36 00:01:56,480 --> 00:01:59,360 Speaker 3: the supply chain for parts and materials is international. 37 00:02:00,120 --> 00:02:02,240 Speaker 1: Your tariff upon entry to the United States. 38 00:02:02,440 --> 00:02:04,920 Speaker 3: If you're exporting international markets, you're going to set up 39 00:02:04,920 --> 00:02:09,200 Speaker 3: production in another country like Canada or Mexico or Central America. 40 00:02:09,240 --> 00:02:11,840 Speaker 3: It doesn't make sense to manufacture anything here if you're 41 00:02:11,880 --> 00:02:15,000 Speaker 3: not able to export it to other countries. And now 42 00:02:15,000 --> 00:02:17,520 Speaker 3: they're going to have high reciprocal tariffs as well as 43 00:02:17,560 --> 00:02:21,440 Speaker 3: many of the inputs for those products are sourced in 44 00:02:21,480 --> 00:02:24,280 Speaker 3: other countries as well, So you get tax coming, you 45 00:02:24,320 --> 00:02:27,520 Speaker 3: get tax going, and you know, the power to tax 46 00:02:27,600 --> 00:02:30,000 Speaker 3: is the power to destroy. And I think if this 47 00:02:30,080 --> 00:02:33,040 Speaker 3: policy moves forward, it'll do an excellent job of really 48 00:02:33,120 --> 00:02:34,320 Speaker 3: hurting the American economy. 49 00:02:34,320 --> 00:02:35,640 Speaker 1: And that's what makes me so sad. 50 00:02:36,760 --> 00:02:39,240 Speaker 2: Have you had or are you having any dialogue with 51 00:02:39,280 --> 00:02:41,040 Speaker 2: the White House about this government? 52 00:02:43,440 --> 00:02:43,639 Speaker 1: Why. 53 00:02:43,800 --> 00:02:46,840 Speaker 3: I've certainly expressed to officials, and you know, when I 54 00:02:46,840 --> 00:02:48,800 Speaker 3: had the chance to visit with the President himself my 55 00:02:49,320 --> 00:02:51,920 Speaker 3: skepticism of tariffs, I told him what I tell you. 56 00:02:51,960 --> 00:02:54,280 Speaker 3: I said, Look, if you're using this as a negotiating 57 00:02:54,320 --> 00:02:57,720 Speaker 3: tactic to achieve more free trade and reduce tariffs, I'm 58 00:02:57,720 --> 00:02:59,959 Speaker 3: all for it. I'll be the first to praise your 59 00:03:00,120 --> 00:03:03,200 Speaker 3: four dimensional chess and wisdom. But the proof will be 60 00:03:03,200 --> 00:03:05,800 Speaker 3: in the pudding if the terrorifts actually go in and 61 00:03:05,840 --> 00:03:10,000 Speaker 3: they weren't in negotiation, we're effectively stabbing ourselves in the 62 00:03:10,040 --> 00:03:14,200 Speaker 3: heart and causing a major recession that affects US and 63 00:03:14,240 --> 00:03:16,480 Speaker 3: of course has global ramifications as well. 64 00:03:18,000 --> 00:03:21,359 Speaker 4: So what does not just you and your position as governor, 65 00:03:21,400 --> 00:03:25,080 Speaker 4: but your party as Democrats, what can you do realistically 66 00:03:25,080 --> 00:03:28,680 Speaker 4: to counter these policies from the administration if anything? 67 00:03:31,280 --> 00:03:33,560 Speaker 3: Well, I think what we've learned for the future is 68 00:03:33,600 --> 00:03:36,560 Speaker 3: that as part of future trade agreements and who's going 69 00:03:36,600 --> 00:03:38,960 Speaker 3: to of course trust United States as a trade partner 70 00:03:39,560 --> 00:03:42,600 Speaker 3: for negotiated treaties after this, we need to make sure 71 00:03:42,600 --> 00:03:45,040 Speaker 3: that future presidents are not able to amend those without 72 00:03:45,080 --> 00:03:47,320 Speaker 3: going back to Congress. I know our future trading partners 73 00:03:47,360 --> 00:03:49,000 Speaker 3: are going to want to see this will emerge from 74 00:03:49,280 --> 00:03:52,600 Speaker 3: these arcages of isolationism once again and embrace the global 75 00:03:52,640 --> 00:03:55,680 Speaker 3: marketplace for maade in America and grown in America products. 76 00:03:55,680 --> 00:03:58,000 Speaker 3: And when we do, we're going to have to build 77 00:03:58,000 --> 00:04:01,400 Speaker 3: in assurances that our trading partners will demand that we 78 00:04:01,440 --> 00:04:05,960 Speaker 3: won't have future presidents at their own whim destroy our economy. 79 00:04:06,400 --> 00:04:08,760 Speaker 2: Governor, what does this mean for Colorado as a major 80 00:04:09,840 --> 00:04:15,560 Speaker 2: tourism state? Count the ways right, skiing, hiking, craft, breweries, weed. 81 00:04:16,040 --> 00:04:17,040 Speaker 2: Are they all impacted? 82 00:04:19,480 --> 00:04:20,080 Speaker 1: They really are. 83 00:04:20,160 --> 00:04:23,119 Speaker 3: So we talked about how it damages American manufacturing. Of course, 84 00:04:23,120 --> 00:04:26,840 Speaker 3: how it damages consumers, that's self evident, but it goes 85 00:04:26,880 --> 00:04:30,400 Speaker 3: beyond those sectors because you know, we trade in goodwill 86 00:04:30,720 --> 00:04:33,279 Speaker 3: and We've already seen a reduction in flights from Canada 87 00:04:33,320 --> 00:04:35,400 Speaker 3: and Mexico, two of our biggest tourism partners. 88 00:04:35,400 --> 00:04:35,839 Speaker 1: As well. 89 00:04:36,320 --> 00:04:38,200 Speaker 3: If you go to our ski resorts and we still 90 00:04:38,200 --> 00:04:41,080 Speaker 3: have our world class skiing open here into spring, come visit. 91 00:04:41,680 --> 00:04:44,400 Speaker 3: We often have many Canadian and Mexican tourists in Veil 92 00:04:44,440 --> 00:04:48,159 Speaker 3: and Aspen, etc. We're already seeing decreases in that because 93 00:04:48,160 --> 00:04:50,479 Speaker 3: of burning through the goodwill. We know we're going to 94 00:04:50,480 --> 00:04:53,080 Speaker 3: see that even more so. It not only hurts manufacturing, 95 00:04:53,080 --> 00:04:56,200 Speaker 3: and it not only hurts it only hurts consumers, it also 96 00:04:56,320 --> 00:04:59,960 Speaker 3: hurts tourism in many other sectors. Plus, look, we know better. 97 00:05:00,440 --> 00:05:05,000 Speaker 3: This is economics one oh one, David Ricardo. Competitive advantage. 98 00:05:05,839 --> 00:05:09,200 Speaker 3: We know what this does. Every country shouldn't and doesn't 99 00:05:09,240 --> 00:05:12,480 Speaker 3: need to make everything, make what you're good at and trade. 100 00:05:12,760 --> 00:05:16,200 Speaker 3: Trade inherently makes both parties better off, and they both 101 00:05:16,240 --> 00:05:19,080 Speaker 3: emerge from a trade wealthier and in a better place, 102 00:05:19,320 --> 00:05:22,200 Speaker 3: whether they're buying or selling, whether it's cash or a 103 00:05:22,240 --> 00:05:25,039 Speaker 3: product or service. And we need more of that to 104 00:05:25,120 --> 00:05:29,520 Speaker 3: help increase global prosperity, not less well. 105 00:05:29,560 --> 00:05:32,520 Speaker 4: Obviously, Governor the President also argues that what is needed 106 00:05:32,560 --> 00:05:35,280 Speaker 4: to increase US prosperity is not just what he sees 107 00:05:35,360 --> 00:05:37,880 Speaker 4: is better balanced trade around the world, but also the 108 00:05:37,880 --> 00:05:42,160 Speaker 4: notion that he needs lower barriers on things like regulation 109 00:05:42,279 --> 00:05:45,840 Speaker 4: lower taxes. In addition, he argues that tariffs and tax 110 00:05:45,880 --> 00:05:49,640 Speaker 4: policy really shouldn't be separated. This should all be viewed 111 00:05:49,720 --> 00:05:52,200 Speaker 4: as one long term game here, and that tax cuts 112 00:05:52,279 --> 00:05:54,920 Speaker 4: ultimately could come act as a reprieve for whatever economic 113 00:05:54,960 --> 00:05:58,120 Speaker 4: pain results from tariffs. What's your response to that theory. 114 00:06:00,120 --> 00:06:03,560 Speaker 3: Look, if corporate tax cuts can absolutely help companies grow, 115 00:06:03,600 --> 00:06:06,320 Speaker 3: but remember they only pay those they only pay those 116 00:06:06,360 --> 00:06:10,160 Speaker 3: taxes on profits. If the tariffs plunge you into losses, 117 00:06:10,920 --> 00:06:12,880 Speaker 3: or from a profit into a loss, or to break 118 00:06:12,880 --> 00:06:16,920 Speaker 3: even status, you don't benefit one iota from a corporate 119 00:06:17,040 --> 00:06:17,920 Speaker 3: tax cut if. 120 00:06:17,839 --> 00:06:19,920 Speaker 1: You're not even making money on your bottom line because 121 00:06:19,960 --> 00:06:20,520 Speaker 1: of the tariffs. 122 00:06:20,600 --> 00:06:23,520 Speaker 3: So tariffs are attacked on your gross rather than your 123 00:06:23,560 --> 00:06:25,760 Speaker 3: net and that's one of the reasons they're so pernicious. 124 00:06:26,000 --> 00:06:27,960 Speaker 3: They can drive companies out of business in a way 125 00:06:27,960 --> 00:06:31,240 Speaker 3: that corporate taxes, no matter how high they are, never can, 126 00:06:31,480 --> 00:06:34,360 Speaker 3: because ultimately those are attacks on profits, whereas this is 127 00:06:34,440 --> 00:06:37,280 Speaker 3: a tax on gross sales that. 128 00:06:37,360 --> 00:06:40,320 Speaker 2: For tomorrow's announcement will Colorado face a recession. 129 00:06:43,200 --> 00:06:45,239 Speaker 3: We're in We're look, we're part of the United States 130 00:06:45,240 --> 00:06:47,320 Speaker 3: of America in good times and in bad. 131 00:06:47,360 --> 00:06:49,799 Speaker 1: It's like a marriage for better or for worse. 132 00:06:50,640 --> 00:06:53,400 Speaker 3: You know, no state can buck a national economic trend 133 00:06:53,400 --> 00:06:55,480 Speaker 3: if this is where it takes it. And I still 134 00:06:55,520 --> 00:06:59,320 Speaker 3: hope as an American that the President has a master 135 00:06:59,440 --> 00:07:02,680 Speaker 3: negotiates strategy here that somehow will wind up with free 136 00:07:02,720 --> 00:07:05,600 Speaker 3: trade with every country. If that happens, I will be 137 00:07:05,680 --> 00:07:07,800 Speaker 3: the first to congratulate his brilliance. 138 00:07:07,839 --> 00:07:11,040 Speaker 1: But I am skeptical. I don't think that's where it's going. 139 00:07:11,760 --> 00:07:14,200 Speaker 3: And I'm fearful because from what I see so far, 140 00:07:14,360 --> 00:07:16,960 Speaker 3: this is leading to a recession for the whole nation. 141 00:07:18,880 --> 00:07:21,400 Speaker 4: And finally, Governor, do you believe that the president has 142 00:07:21,440 --> 00:07:24,920 Speaker 4: other voices in his ear, whether it's the Treasury Secretary 143 00:07:24,960 --> 00:07:29,160 Speaker 4: Scott Bessett, who may encourage some of the arguments you 144 00:07:29,200 --> 00:07:32,040 Speaker 4: were making about the potential detrimental effects, or is this 145 00:07:32,080 --> 00:07:35,520 Speaker 4: Trump and Trump's decision alone. 146 00:07:36,400 --> 00:07:38,920 Speaker 3: Well, I'm sure that there are many varied voices around 147 00:07:38,960 --> 00:07:42,560 Speaker 3: the president. Republicans have traditionally been a pro trade party. 148 00:07:43,080 --> 00:07:46,160 Speaker 3: There's many pro trade voices around the president. Again, high 149 00:07:46,200 --> 00:07:53,080 Speaker 3: stakes game of chicken at best, awful, ill informed, counterproductive, 150 00:07:53,400 --> 00:07:56,800 Speaker 3: economic devastation at the worst. So again, let's go into 151 00:07:56,840 --> 00:07:58,480 Speaker 3: it with the benefit of a doubt. Let's hope that 152 00:07:58,800 --> 00:08:01,120 Speaker 3: every country agrees to take down their barriers. 153 00:08:01,160 --> 00:08:02,840 Speaker 1: Our tariffs go down, theirs go down. 154 00:08:03,680 --> 00:08:06,000 Speaker 3: You know, call me a skeptic, but again, I'll be 155 00:08:06,080 --> 00:08:08,239 Speaker 3: back in a week or two, and if that's what happens, 156 00:08:08,320 --> 00:08:10,240 Speaker 3: I'll be praising the brilliance of the strategy. 157 00:08:11,440 --> 00:08:13,680 Speaker 4: All right, well, we'll look forward to you coming back, sir, 158 00:08:13,720 --> 00:08:15,520 Speaker 4: Thanks very much for your time this evening. That's the 159 00:08:15,560 --> 00:08:18,440 Speaker 4: Governor of Colorado, Jared Polus here with us on our 160 00:08:18,480 --> 00:08:20,559 Speaker 4: extended edition of Balance of Power.