WEBVTT - Colorado Governor Jared Polis Talks Trump Tariff Impact

0:00:02.520 --> 0:00:08.240
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news less.

0:00:08.080 --> 0:00:10.840
<v Speaker 2>Than twenty four hours now until tomorrow's event in the

0:00:10.920 --> 0:00:13.480
<v Speaker 2>Rose Garden, we take a look at how individual states

0:00:13.520 --> 0:00:16.920
<v Speaker 2>are preparing for the economic impact if they can. Joining

0:00:17.000 --> 0:00:21.000
<v Speaker 2>us now in fact, from Denver, Colorado Governor Jared Poulis, Governor,

0:00:21.040 --> 0:00:23.040
<v Speaker 2>it's great to see you. Welcome back to Bloomberg TV

0:00:23.120 --> 0:00:26.360
<v Speaker 2>and Radio. A report just doubt from a group called

0:00:26.400 --> 0:00:29.480
<v Speaker 2>Farmers for Free Trade and the World Trade Center Denver

0:00:30.200 --> 0:00:33.680
<v Speaker 2>finds that the tariff policies were expecting and we're unclear

0:00:33.720 --> 0:00:36.000
<v Speaker 2>on what exactly they will be from Donald Trump tomorrow

0:00:36.000 --> 0:00:40.559
<v Speaker 2>could quadruple what Colorado already pays for imports. How do

0:00:40.600 --> 0:00:41.360
<v Speaker 2>you prepare for that?

0:00:44.040 --> 0:00:46.440
<v Speaker 3>Look, I mean, this is one of the biggest tax

0:00:46.520 --> 0:00:48.199
<v Speaker 3>hikes in American history.

0:00:48.360 --> 0:00:50.840
<v Speaker 1>It's not Liberation Day, it's recession day.

0:00:51.479 --> 0:00:54.480
<v Speaker 3>Fundamentally, I'm saddened because, like so many others, I was

0:00:54.520 --> 0:00:58.080
<v Speaker 3>hoping the President was using this as a negotiating tactic

0:00:58.160 --> 0:01:00.880
<v Speaker 3>to have more free trade, which we would love and

0:01:00.920 --> 0:01:05.360
<v Speaker 3>benefit from. Free trade is fair trade, bring down tariffs

0:01:05.360 --> 0:01:08.560
<v Speaker 3>and barriers, both for imports as well as reciprocally for

0:01:08.640 --> 0:01:11.360
<v Speaker 3>exports to other countries. But it looks like they're actually

0:01:11.400 --> 0:01:14.680
<v Speaker 3>fixated on a tax increase here, increasing the size of

0:01:14.760 --> 0:01:19.640
<v Speaker 3>government through charging consumers more destructive to American manufacturing, agricultures,

0:01:19.680 --> 0:01:23.240
<v Speaker 3>Colorado's biggest sector. It would be devastating our biggest trade partners,

0:01:23.319 --> 0:01:28.280
<v Speaker 3>Canada and Mexico. So I really go into this in

0:01:28.319 --> 0:01:31.600
<v Speaker 3>a very realistic but sad state that this is what.

0:01:31.600 --> 0:01:32.160
<v Speaker 1>It's coming to.

0:01:33.400 --> 0:01:36.720
<v Speaker 4>Well, as you talk about US manufacturing, Governor, the President

0:01:36.800 --> 0:01:39.319
<v Speaker 4>argues that this is a way to bring more manufacturing

0:01:39.360 --> 0:01:41.880
<v Speaker 4>to this country. Do you expect Colorado could reap any

0:01:41.920 --> 0:01:44.480
<v Speaker 4>of that benefit of companies wanting to make more in

0:01:44.520 --> 0:01:45.400
<v Speaker 4>the United States.

0:01:47.800 --> 0:01:50.960
<v Speaker 3>It'll destroy American manufacturing. And I've talked to many manufacturers

0:01:50.960 --> 0:01:53.120
<v Speaker 3>here who are going to close down and move overseas

0:01:53.160 --> 0:01:56.120
<v Speaker 3>or considering doing that because guess what two things. One is,

0:01:56.480 --> 0:01:59.360
<v Speaker 3>the supply chain for parts and materials is international.

0:02:00.120 --> 0:02:02.240
<v Speaker 1>Your tariff upon entry to the United States.

0:02:02.440 --> 0:02:04.920
<v Speaker 3>If you're exporting international markets, you're going to set up

0:02:04.920 --> 0:02:09.200
<v Speaker 3>production in another country like Canada or Mexico or Central America.

0:02:09.240 --> 0:02:11.840
<v Speaker 3>It doesn't make sense to manufacture anything here if you're

0:02:11.880 --> 0:02:15.000
<v Speaker 3>not able to export it to other countries. And now

0:02:15.000 --> 0:02:17.520
<v Speaker 3>they're going to have high reciprocal tariffs as well as

0:02:17.560 --> 0:02:21.440
<v Speaker 3>many of the inputs for those products are sourced in

0:02:21.480 --> 0:02:24.280
<v Speaker 3>other countries as well, So you get tax coming, you

0:02:24.320 --> 0:02:27.520
<v Speaker 3>get tax going, and you know, the power to tax

0:02:27.600 --> 0:02:30.000
<v Speaker 3>is the power to destroy. And I think if this

0:02:30.080 --> 0:02:33.040
<v Speaker 3>policy moves forward, it'll do an excellent job of really

0:02:33.120 --> 0:02:34.320
<v Speaker 3>hurting the American economy.

0:02:34.320 --> 0:02:35.640
<v Speaker 1>And that's what makes me so sad.

0:02:36.760 --> 0:02:39.240
<v Speaker 2>Have you had or are you having any dialogue with

0:02:39.280 --> 0:02:41.040
<v Speaker 2>the White House about this government?

0:02:43.440 --> 0:02:43.639
<v Speaker 1>Why.

0:02:43.800 --> 0:02:46.840
<v Speaker 3>I've certainly expressed to officials, and you know, when I

0:02:46.840 --> 0:02:48.800
<v Speaker 3>had the chance to visit with the President himself my

0:02:49.320 --> 0:02:51.920
<v Speaker 3>skepticism of tariffs, I told him what I tell you.

0:02:51.960 --> 0:02:54.280
<v Speaker 3>I said, Look, if you're using this as a negotiating

0:02:54.320 --> 0:02:57.720
<v Speaker 3>tactic to achieve more free trade and reduce tariffs, I'm

0:02:57.720 --> 0:02:59.959
<v Speaker 3>all for it. I'll be the first to praise your

0:03:00.120 --> 0:03:03.200
<v Speaker 3>four dimensional chess and wisdom. But the proof will be

0:03:03.200 --> 0:03:05.800
<v Speaker 3>in the pudding if the terrorifts actually go in and

0:03:05.840 --> 0:03:10.000
<v Speaker 3>they weren't in negotiation, we're effectively stabbing ourselves in the

0:03:10.040 --> 0:03:14.200
<v Speaker 3>heart and causing a major recession that affects US and

0:03:14.240 --> 0:03:16.480
<v Speaker 3>of course has global ramifications as well.

0:03:18.000 --> 0:03:21.359
<v Speaker 4>So what does not just you and your position as governor,

0:03:21.400 --> 0:03:25.080
<v Speaker 4>but your party as Democrats, what can you do realistically

0:03:25.080 --> 0:03:28.680
<v Speaker 4>to counter these policies from the administration if anything?

0:03:31.280 --> 0:03:33.560
<v Speaker 3>Well, I think what we've learned for the future is

0:03:33.600 --> 0:03:36.560
<v Speaker 3>that as part of future trade agreements and who's going

0:03:36.600 --> 0:03:38.960
<v Speaker 3>to of course trust United States as a trade partner

0:03:39.560 --> 0:03:42.600
<v Speaker 3>for negotiated treaties after this, we need to make sure

0:03:42.600 --> 0:03:45.040
<v Speaker 3>that future presidents are not able to amend those without

0:03:45.080 --> 0:03:47.320
<v Speaker 3>going back to Congress. I know our future trading partners

0:03:47.360 --> 0:03:49.000
<v Speaker 3>are going to want to see this will emerge from

0:03:49.280 --> 0:03:52.600
<v Speaker 3>these arcages of isolationism once again and embrace the global

0:03:52.640 --> 0:03:55.680
<v Speaker 3>marketplace for maade in America and grown in America products.

0:03:55.680 --> 0:03:58.000
<v Speaker 3>And when we do, we're going to have to build

0:03:58.000 --> 0:04:01.400
<v Speaker 3>in assurances that our trading partners will demand that we

0:04:01.440 --> 0:04:05.960
<v Speaker 3>won't have future presidents at their own whim destroy our economy.

0:04:06.400 --> 0:04:08.760
<v Speaker 2>Governor, what does this mean for Colorado as a major

0:04:09.840 --> 0:04:15.560
<v Speaker 2>tourism state? Count the ways right, skiing, hiking, craft, breweries, weed.

0:04:16.040 --> 0:04:17.040
<v Speaker 2>Are they all impacted?

0:04:19.480 --> 0:04:20.080
<v Speaker 1>They really are.

0:04:20.160 --> 0:04:23.119
<v Speaker 3>So we talked about how it damages American manufacturing. Of course,

0:04:23.120 --> 0:04:26.840
<v Speaker 3>how it damages consumers, that's self evident, but it goes

0:04:26.880 --> 0:04:30.400
<v Speaker 3>beyond those sectors because you know, we trade in goodwill

0:04:30.720 --> 0:04:33.279
<v Speaker 3>and We've already seen a reduction in flights from Canada

0:04:33.320 --> 0:04:35.400
<v Speaker 3>and Mexico, two of our biggest tourism partners.

0:04:35.400 --> 0:04:35.839
<v Speaker 1>As well.

0:04:36.320 --> 0:04:38.200
<v Speaker 3>If you go to our ski resorts and we still

0:04:38.200 --> 0:04:41.080
<v Speaker 3>have our world class skiing open here into spring, come visit.

0:04:41.680 --> 0:04:44.400
<v Speaker 3>We often have many Canadian and Mexican tourists in Veil

0:04:44.440 --> 0:04:48.159
<v Speaker 3>and Aspen, etc. We're already seeing decreases in that because

0:04:48.160 --> 0:04:50.479
<v Speaker 3>of burning through the goodwill. We know we're going to

0:04:50.480 --> 0:04:53.080
<v Speaker 3>see that even more so. It not only hurts manufacturing,

0:04:53.080 --> 0:04:56.200
<v Speaker 3>and it not only hurts it only hurts consumers, it also

0:04:56.320 --> 0:04:59.960
<v Speaker 3>hurts tourism in many other sectors. Plus, look, we know better.

0:05:00.440 --> 0:05:05.000
<v Speaker 3>This is economics one oh one, David Ricardo. Competitive advantage.

0:05:05.839 --> 0:05:09.200
<v Speaker 3>We know what this does. Every country shouldn't and doesn't

0:05:09.240 --> 0:05:12.480
<v Speaker 3>need to make everything, make what you're good at and trade.

0:05:12.760 --> 0:05:16.200
<v Speaker 3>Trade inherently makes both parties better off, and they both

0:05:16.240 --> 0:05:19.080
<v Speaker 3>emerge from a trade wealthier and in a better place,

0:05:19.320 --> 0:05:22.200
<v Speaker 3>whether they're buying or selling, whether it's cash or a

0:05:22.240 --> 0:05:25.039
<v Speaker 3>product or service. And we need more of that to

0:05:25.120 --> 0:05:29.520
<v Speaker 3>help increase global prosperity, not less well.

0:05:29.560 --> 0:05:32.520
<v Speaker 4>Obviously, Governor the President also argues that what is needed

0:05:32.560 --> 0:05:35.280
<v Speaker 4>to increase US prosperity is not just what he sees

0:05:35.360 --> 0:05:37.880
<v Speaker 4>is better balanced trade around the world, but also the

0:05:37.880 --> 0:05:42.160
<v Speaker 4>notion that he needs lower barriers on things like regulation

0:05:42.279 --> 0:05:45.840
<v Speaker 4>lower taxes. In addition, he argues that tariffs and tax

0:05:45.880 --> 0:05:49.640
<v Speaker 4>policy really shouldn't be separated. This should all be viewed

0:05:49.720 --> 0:05:52.200
<v Speaker 4>as one long term game here, and that tax cuts

0:05:52.279 --> 0:05:54.920
<v Speaker 4>ultimately could come act as a reprieve for whatever economic

0:05:54.960 --> 0:05:58.120
<v Speaker 4>pain results from tariffs. What's your response to that theory.

0:06:00.120 --> 0:06:03.560
<v Speaker 3>Look, if corporate tax cuts can absolutely help companies grow,

0:06:03.600 --> 0:06:06.320
<v Speaker 3>but remember they only pay those they only pay those

0:06:06.360 --> 0:06:10.160
<v Speaker 3>taxes on profits. If the tariffs plunge you into losses,

0:06:10.920 --> 0:06:12.880
<v Speaker 3>or from a profit into a loss, or to break

0:06:12.880 --> 0:06:16.920
<v Speaker 3>even status, you don't benefit one iota from a corporate

0:06:17.040 --> 0:06:17.920
<v Speaker 3>tax cut if.

0:06:17.839 --> 0:06:19.920
<v Speaker 1>You're not even making money on your bottom line because

0:06:19.960 --> 0:06:20.520
<v Speaker 1>of the tariffs.

0:06:20.600 --> 0:06:23.520
<v Speaker 3>So tariffs are attacked on your gross rather than your

0:06:23.560 --> 0:06:25.760
<v Speaker 3>net and that's one of the reasons they're so pernicious.

0:06:26.000 --> 0:06:27.960
<v Speaker 3>They can drive companies out of business in a way

0:06:27.960 --> 0:06:31.240
<v Speaker 3>that corporate taxes, no matter how high they are, never can,

0:06:31.480 --> 0:06:34.360
<v Speaker 3>because ultimately those are attacks on profits, whereas this is

0:06:34.440 --> 0:06:37.280
<v Speaker 3>a tax on gross sales that.

0:06:37.360 --> 0:06:40.320
<v Speaker 2>For tomorrow's announcement will Colorado face a recession.

0:06:43.200 --> 0:06:45.239
<v Speaker 3>We're in We're look, we're part of the United States

0:06:45.240 --> 0:06:47.320
<v Speaker 3>of America in good times and in bad.

0:06:47.360 --> 0:06:49.799
<v Speaker 1>It's like a marriage for better or for worse.

0:06:50.640 --> 0:06:53.400
<v Speaker 3>You know, no state can buck a national economic trend

0:06:53.400 --> 0:06:55.480
<v Speaker 3>if this is where it takes it. And I still

0:06:55.520 --> 0:06:59.320
<v Speaker 3>hope as an American that the President has a master

0:06:59.440 --> 0:07:02.680
<v Speaker 3>negotiates strategy here that somehow will wind up with free

0:07:02.720 --> 0:07:05.600
<v Speaker 3>trade with every country. If that happens, I will be

0:07:05.680 --> 0:07:07.800
<v Speaker 3>the first to congratulate his brilliance.

0:07:07.839 --> 0:07:11.040
<v Speaker 1>But I am skeptical. I don't think that's where it's going.

0:07:11.760 --> 0:07:14.200
<v Speaker 3>And I'm fearful because from what I see so far,

0:07:14.360 --> 0:07:16.960
<v Speaker 3>this is leading to a recession for the whole nation.

0:07:18.880 --> 0:07:21.400
<v Speaker 4>And finally, Governor, do you believe that the president has

0:07:21.440 --> 0:07:24.920
<v Speaker 4>other voices in his ear, whether it's the Treasury Secretary

0:07:24.960 --> 0:07:29.160
<v Speaker 4>Scott Bessett, who may encourage some of the arguments you

0:07:29.200 --> 0:07:32.040
<v Speaker 4>were making about the potential detrimental effects, or is this

0:07:32.080 --> 0:07:35.520
<v Speaker 4>Trump and Trump's decision alone.

0:07:36.400 --> 0:07:38.920
<v Speaker 3>Well, I'm sure that there are many varied voices around

0:07:38.960 --> 0:07:42.560
<v Speaker 3>the president. Republicans have traditionally been a pro trade party.

0:07:43.080 --> 0:07:46.160
<v Speaker 3>There's many pro trade voices around the president. Again, high

0:07:46.200 --> 0:07:53.080
<v Speaker 3>stakes game of chicken at best, awful, ill informed, counterproductive,

0:07:53.400 --> 0:07:56.800
<v Speaker 3>economic devastation at the worst. So again, let's go into

0:07:56.840 --> 0:07:58.480
<v Speaker 3>it with the benefit of a doubt. Let's hope that

0:07:58.800 --> 0:08:01.120
<v Speaker 3>every country agrees to take down their barriers.

0:08:01.160 --> 0:08:02.840
<v Speaker 1>Our tariffs go down, theirs go down.

0:08:03.680 --> 0:08:06.000
<v Speaker 3>You know, call me a skeptic, but again, I'll be

0:08:06.080 --> 0:08:08.239
<v Speaker 3>back in a week or two, and if that's what happens,

0:08:08.320 --> 0:08:10.240
<v Speaker 3>I'll be praising the brilliance of the strategy.

0:08:11.440 --> 0:08:13.680
<v Speaker 4>All right, well, we'll look forward to you coming back, sir,

0:08:13.720 --> 0:08:15.520
<v Speaker 4>Thanks very much for your time this evening. That's the

0:08:15.560 --> 0:08:18.440
<v Speaker 4>Governor of Colorado, Jared Polus here with us on our

0:08:18.480 --> 0:08:20.559
<v Speaker 4>extended edition of Balance of Power.