Speaker 1: Bloomberg Audio Studios, podcasts, radio news less.
Speaker 2: Than twenty four hours now until tomorrow's event in the
Speaker 2: Rose Garden, we take a look at how individual states
Speaker 2: are preparing for the economic impact if they can. Joining
Speaker 2: us now in fact, from Denver, Colorado Governor Jared Poulis, Governor,
Speaker 2: it's great to see you. Welcome back to Bloomberg TV
Speaker 2: and Radio. A report just doubt from a group called
Speaker 2: Farmers for Free Trade and the World Trade Center Denver
Speaker 2: finds that the tariff policies were expecting and we're unclear
Speaker 2: on what exactly they will be from Donald Trump tomorrow
Speaker 2: could quadruple what Colorado already pays for imports. How do
Speaker 2: you prepare for that?
Speaker 3: Look, I mean, this is one of the biggest tax
Speaker 3: hikes in American history.
Speaker 1: It's not Liberation Day, it's recession day.
Speaker 3: Fundamentally, I'm saddened because, like so many others, I was
Speaker 3: hoping the President was using this as a negotiating tactic
Speaker 3: to have more free trade, which we would love and
Speaker 3: benefit from. Free trade is fair trade, bring down tariffs
Speaker 3: and barriers, both for imports as well as reciprocally for
Speaker 3: exports to other countries. But it looks like they're actually
Speaker 3: fixated on a tax increase here, increasing the size of
Speaker 3: government through charging consumers more destructive to American manufacturing, agricultures,
Speaker 3: Colorado's biggest sector. It would be devastating our biggest trade partners,
Speaker 3: Canada and Mexico. So I really go into this in
Speaker 3: a very realistic but sad state that this is what.
Speaker 1: It's coming to.
Speaker 4: Well, as you talk about US manufacturing, Governor, the President
Speaker 4: argues that this is a way to bring more manufacturing
Speaker 4: to this country. Do you expect Colorado could reap any
Speaker 4: of that benefit of companies wanting to make more in
Speaker 4: the United States.
Speaker 3: It'll destroy American manufacturing. And I've talked to many manufacturers
Speaker 3: here who are going to close down and move overseas
Speaker 3: or considering doing that because guess what two things. One is,
Speaker 3: the supply chain for parts and materials is international.
Speaker 1: Your tariff upon entry to the United States.
Speaker 3: If you're exporting international markets, you're going to set up
Speaker 3: production in another country like Canada or Mexico or Central America.
Speaker 3: It doesn't make sense to manufacture anything here if you're
Speaker 3: not able to export it to other countries. And now
Speaker 3: they're going to have high reciprocal tariffs as well as
Speaker 3: many of the inputs for those products are sourced in
Speaker 3: other countries as well, So you get tax coming, you
Speaker 3: get tax going, and you know, the power to tax
Speaker 3: is the power to destroy. And I think if this
Speaker 3: policy moves forward, it'll do an excellent job of really
Speaker 3: hurting the American economy.
Speaker 1: And that's what makes me so sad.
Speaker 2: Have you had or are you having any dialogue with
Speaker 2: the White House about this government?
Speaker 1: Why.
Speaker 3: I've certainly expressed to officials, and you know, when I
Speaker 3: had the chance to visit with the President himself my
Speaker 3: skepticism of tariffs, I told him what I tell you.
Speaker 3: I said, Look, if you're using this as a negotiating
Speaker 3: tactic to achieve more free trade and reduce tariffs, I'm
Speaker 3: all for it. I'll be the first to praise your
Speaker 3: four dimensional chess and wisdom. But the proof will be
Speaker 3: in the pudding if the terrorifts actually go in and
Speaker 3: they weren't in negotiation, we're effectively stabbing ourselves in the
Speaker 3: heart and causing a major recession that affects US and
Speaker 3: of course has global ramifications as well.
Speaker 4: So what does not just you and your position as governor,
Speaker 4: but your party as Democrats, what can you do realistically
Speaker 4: to counter these policies from the administration if anything?
Speaker 3: Well, I think what we've learned for the future is
Speaker 3: that as part of future trade agreements and who's going
Speaker 3: to of course trust United States as a trade partner
Speaker 3: for negotiated treaties after this, we need to make sure
Speaker 3: that future presidents are not able to amend those without
Speaker 3: going back to Congress. I know our future trading partners
Speaker 3: are going to want to see this will emerge from
Speaker 3: these arcages of isolationism once again and embrace the global
Speaker 3: marketplace for maade in America and grown in America products.
Speaker 3: And when we do, we're going to have to build
Speaker 3: in assurances that our trading partners will demand that we
Speaker 3: won't have future presidents at their own whim destroy our economy.
Speaker 2: Governor, what does this mean for Colorado as a major
Speaker 2: tourism state? Count the ways right, skiing, hiking, craft, breweries, weed.
Speaker 2: Are they all impacted?
Speaker 1: They really are.
Speaker 3: So we talked about how it damages American manufacturing. Of course,
Speaker 3: how it damages consumers, that's self evident, but it goes
Speaker 3: beyond those sectors because you know, we trade in goodwill
Speaker 3: and We've already seen a reduction in flights from Canada
Speaker 3: and Mexico, two of our biggest tourism partners.
Speaker 1: As well.
Speaker 3: If you go to our ski resorts and we still
Speaker 3: have our world class skiing open here into spring, come visit.
Speaker 3: We often have many Canadian and Mexican tourists in Veil
Speaker 3: and Aspen, etc. We're already seeing decreases in that because
Speaker 3: of burning through the goodwill. We know we're going to
Speaker 3: see that even more so. It not only hurts manufacturing,
Speaker 3: and it not only hurts it only hurts consumers, it also
Speaker 3: hurts tourism in many other sectors. Plus, look, we know better.
Speaker 3: This is economics one oh one, David Ricardo. Competitive advantage.
Speaker 3: We know what this does. Every country shouldn't and doesn't
Speaker 3: need to make everything, make what you're good at and trade.
Speaker 3: Trade inherently makes both parties better off, and they both
Speaker 3: emerge from a trade wealthier and in a better place,
Speaker 3: whether they're buying or selling, whether it's cash or a
Speaker 3: product or service. And we need more of that to
Speaker 3: help increase global prosperity, not less well.
Speaker 4: Obviously, Governor the President also argues that what is needed
Speaker 4: to increase US prosperity is not just what he sees
Speaker 4: is better balanced trade around the world, but also the
Speaker 4: notion that he needs lower barriers on things like regulation
Speaker 4: lower taxes. In addition, he argues that tariffs and tax
Speaker 4: policy really shouldn't be separated. This should all be viewed
Speaker 4: as one long term game here, and that tax cuts
Speaker 4: ultimately could come act as a reprieve for whatever economic
Speaker 4: pain results from tariffs. What's your response to that theory.
Speaker 3: Look, if corporate tax cuts can absolutely help companies grow,
Speaker 3: but remember they only pay those they only pay those
Speaker 3: taxes on profits. If the tariffs plunge you into losses,
Speaker 3: or from a profit into a loss, or to break
Speaker 3: even status, you don't benefit one iota from a corporate
Speaker 3: tax cut if.
Speaker 1: You're not even making money on your bottom line because
Speaker 1: of the tariffs.
Speaker 3: So tariffs are attacked on your gross rather than your
Speaker 3: net and that's one of the reasons they're so pernicious.
Speaker 3: They can drive companies out of business in a way
Speaker 3: that corporate taxes, no matter how high they are, never can,
Speaker 3: because ultimately those are attacks on profits, whereas this is
Speaker 3: a tax on gross sales that.
Speaker 2: For tomorrow's announcement will Colorado face a recession.
Speaker 3: We're in We're look, we're part of the United States
Speaker 3: of America in good times and in bad.
Speaker 1: It's like a marriage for better or for worse.
Speaker 3: You know, no state can buck a national economic trend
Speaker 3: if this is where it takes it. And I still
Speaker 3: hope as an American that the President has a master
Speaker 3: negotiates strategy here that somehow will wind up with free
Speaker 3: trade with every country. If that happens, I will be
Speaker 3: the first to congratulate his brilliance.
Speaker 1: But I am skeptical. I don't think that's where it's going.
Speaker 3: And I'm fearful because from what I see so far,
Speaker 3: this is leading to a recession for the whole nation.
Speaker 4: And finally, Governor, do you believe that the president has
Speaker 4: other voices in his ear, whether it's the Treasury Secretary
Speaker 4: Scott Bessett, who may encourage some of the arguments you
Speaker 4: were making about the potential detrimental effects, or is this
Speaker 4: Trump and Trump's decision alone.
Speaker 3: Well, I'm sure that there are many varied voices around
Speaker 3: the president. Republicans have traditionally been a pro trade party.
Speaker 3: There's many pro trade voices around the president. Again, high
Speaker 3: stakes game of chicken at best, awful, ill informed, counterproductive,
Speaker 3: economic devastation at the worst. So again, let's go into
Speaker 3: it with the benefit of a doubt. Let's hope that
Speaker 3: every country agrees to take down their barriers.
Speaker 1: Our tariffs go down, theirs go down.
Speaker 3: You know, call me a skeptic, but again, I'll be
Speaker 3: back in a week or two, and if that's what happens,
Speaker 3: I'll be praising the brilliance of the strategy.
Speaker 4: All right, well, we'll look forward to you coming back, sir,
Speaker 4: Thanks very much for your time this evening. That's the
Speaker 4: Governor of Colorado, Jared Polus here with us on our
Speaker 4: extended edition of Balance of Power.