1
00:00:02,920 --> 00:00:10,600
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

2
00:00:10,640 --> 00:00:14,560
Speaker 1: Bloomberg Balance of Power podcast. Catch US Live weekdays at

3
00:00:14,560 --> 00:00:17,040
Speaker 1: noon Eastern on Apocarplay.

4
00:00:16,200 --> 00:00:18,480
Speaker 2: And then Proud Auto with the Bloomberg Business App.

5
00:00:18,560 --> 00:00:21,720
Speaker 1: Listen on demand wherever you get your podcasts, or watch

6
00:00:21,800 --> 00:00:23,960
Speaker 1: US live on YouTube.

7
00:00:25,640 --> 00:00:28,120
Speaker 3: While it is Thanksgiving week, it certainly has not been

8
00:00:28,120 --> 00:00:31,800
Speaker 3: slow in terms of newsflow. Much coming from the President

9
00:00:31,840 --> 00:00:34,560
Speaker 3: elect Donald Trump, including last night his threat on True

10
00:00:34,600 --> 00:00:39,159
Speaker 3: Social to pose higher tariffs on the US's three largest

11
00:00:39,600 --> 00:00:42,879
Speaker 3: trading partners twenty five percent on all goods coming from

12
00:00:42,960 --> 00:00:46,680
Speaker 3: Mexico and Canada and an additional ten percent on all

13
00:00:46,680 --> 00:00:50,040
Speaker 3: goods from China. The President elect says this is necessary

14
00:00:50,040 --> 00:00:52,839
Speaker 3: to clamp down on migrants and illegal drugs like fentanyl

15
00:00:53,200 --> 00:00:56,200
Speaker 3: coming over the US border. And keep in mind here

16
00:00:56,240 --> 00:00:59,040
Speaker 3: he had floated tariffs much higher than this during the

17
00:00:59,080 --> 00:01:03,040
Speaker 3: course of his president campaign. He threw sixty percent out

18
00:01:03,080 --> 00:01:05,920
Speaker 3: there for China. So we want to turn now to

19
00:01:06,000 --> 00:01:08,600
Speaker 3: someone who focuses on China extensively in the House of

20
00:01:08,640 --> 00:01:12,400
Speaker 3: Representatives by sitting on the House China Select Committee. Democratic

21
00:01:12,400 --> 00:01:15,720
Speaker 3: Congressman Jake Auchencloss of Massachusetts is here with me now

22
00:01:15,720 --> 00:01:18,800
Speaker 3: on Bloomberg TV and Radio. Congressman, thanks for your time.

23
00:01:19,520 --> 00:01:22,640
Speaker 3: As we considered the authority Donald Trump would use to

24
00:01:22,720 --> 00:01:25,199
Speaker 3: do this if he indeed follows through on this threat,

25
00:01:25,240 --> 00:01:28,920
Speaker 3: it really is about protecting US national security interest in

26
00:01:29,040 --> 00:01:31,280
Speaker 3: large part. Is this a justified means to an end.

27
00:01:33,000 --> 00:01:35,800
Speaker 4: Good afternoon, Thanks for having me on. Before we talk

28
00:01:35,840 --> 00:01:39,120
Speaker 4: about the politics and the legality, I think it's helpful

29
00:01:39,160 --> 00:01:40,920
Speaker 4: to start with the facts of the matter. I'm the

30
00:01:40,959 --> 00:01:42,800
Speaker 4: co chair of the Fentanyl Working Group. I'm on the

31
00:01:42,880 --> 00:01:45,680
Speaker 4: Joint Task Force for combating the Mexican Drug Cartel, so

32
00:01:45,680 --> 00:01:48,280
Speaker 4: I've been able to see both sides of this problem.

33
00:01:48,480 --> 00:01:52,040
Speaker 4: And the facts are this. The Chinese are exporting about

34
00:01:52,160 --> 00:01:56,360
Speaker 4: ninety seven percent of all fentanyl precursors to either the

35
00:01:56,400 --> 00:01:58,960
Speaker 4: West coast of Mexico, where it then gets channeled into

36
00:01:59,000 --> 00:02:02,200
Speaker 4: the United States, or to the United States. It's causing

37
00:02:02,200 --> 00:02:05,600
Speaker 4: about one hundred thousand American deaths every year, about a

38
00:02:05,680 --> 00:02:09,359
Speaker 4: nine to eleven every week. The Mexican drug cartels are

39
00:02:09,520 --> 00:02:12,480
Speaker 4: absolutely part of this supply chain, both through trafficking and

40
00:02:12,520 --> 00:02:16,680
Speaker 4: also through money laundering, and yes, as the Mexican President said,

41
00:02:16,840 --> 00:02:20,080
Speaker 4: they are also being equipped by US arm sales going

42
00:02:20,320 --> 00:02:23,360
Speaker 4: to the South. So there are no clean hands in

43
00:02:23,400 --> 00:02:28,040
Speaker 4: this problem. But what is for certain is that Donald

44
00:02:28,040 --> 00:02:31,080
Speaker 4: Trump's knee jerk approach to using tariffs right off the

45
00:02:31,080 --> 00:02:34,320
Speaker 4: bat does two things. One, it removes his most potent

46
00:02:34,400 --> 00:02:38,600
Speaker 4: leverage as opposed to using an escalatory ladder starting with

47
00:02:39,160 --> 00:02:43,720
Speaker 4: other more targeted reprisals to Chinese exports.

48
00:02:43,960 --> 00:02:45,359
Speaker 5: And two, it's.

49
00:02:45,200 --> 00:02:47,639
Speaker 4: Gonna raise prices on Americans. It's gonna raise prices on

50
00:02:47,680 --> 00:02:50,440
Speaker 4: Americans for car insurance, for housing, and it's also going

51
00:02:50,520 --> 00:02:53,640
Speaker 4: to compress wages for American employees who are working for

52
00:02:53,680 --> 00:02:55,480
Speaker 4: companies that now have smaller end markets.

53
00:02:57,480 --> 00:03:01,120
Speaker 3: Okay, well, so if we consider that this notion that

54
00:03:01,160 --> 00:03:04,080
Speaker 3: these things do need to be calibrated, is there a

55
00:03:04,200 --> 00:03:07,359
Speaker 3: level of tariff you think would be appropriate to put

56
00:03:07,360 --> 00:03:11,359
Speaker 3: in place to use his leverage to get more favorable

57
00:03:11,400 --> 00:03:14,320
Speaker 3: outcomes when it comes to the flow of things over

58
00:03:14,360 --> 00:03:17,600
Speaker 3: the US border, both people and illegal drugs as Donald

59
00:03:17,600 --> 00:03:19,560
Speaker 3: Trump suggests, or is this not the right way of

60
00:03:19,560 --> 00:03:20,679
Speaker 3: approaching this policy?

61
00:03:21,880 --> 00:03:24,480
Speaker 4: Putting tariffs on the table as negotiating leverage is not

62
00:03:24,520 --> 00:03:26,320
Speaker 4: a bad idea. And by the way, Donald Trump didn't

63
00:03:26,320 --> 00:03:28,119
Speaker 4: invent that. I know he likes to claim that he's

64
00:03:28,160 --> 00:03:30,720
Speaker 4: the person who thought of the idea of mutual market

65
00:03:30,760 --> 00:03:32,400
Speaker 4: access being a negotiating tactic.

66
00:03:32,440 --> 00:03:32,720
Speaker 2: He's not.

67
00:03:32,960 --> 00:03:35,800
Speaker 4: US trade representatives have been using that for time immemorial.

68
00:03:36,600 --> 00:03:40,360
Speaker 4: Here's the more targeted approach, though. There's about two dozen

69
00:03:40,680 --> 00:03:43,680
Speaker 4: Chinese manufacturers who account for the vast majority of this

70
00:03:43,800 --> 00:03:48,680
Speaker 4: fentanyl active pharmaceutical ingredients, and these Chinese manufacturers actually have

71
00:03:48,720 --> 00:03:51,800
Speaker 4: a lot of illicit business as well as illicit business

72
00:03:52,080 --> 00:03:55,600
Speaker 4: that means they are highly susceptible to sanctions. So step

73
00:03:55,680 --> 00:03:58,160
Speaker 4: number one is the United States needs to impose and

74
00:03:58,280 --> 00:04:03,600
Speaker 4: draconiously enforce very tough sanctions on Chinese chemical manufacturers that

75
00:04:03,640 --> 00:04:06,840
Speaker 4: are shipping fentanol. Number two, we should be charging docking

76
00:04:06,880 --> 00:04:10,840
Speaker 4: fees on Chinese ships coming to ports, and we can

77
00:04:11,200 --> 00:04:14,520
Speaker 4: escalate those docking fees until they get better screening and

78
00:04:14,560 --> 00:04:18,520
Speaker 4: customs process on their end. We can also establish a

79
00:04:18,600 --> 00:04:21,960
Speaker 4: joint Task Force Counter Opioid that would fuse together various

80
00:04:22,040 --> 00:04:26,480
Speaker 4: organs of US state power, intelligence, law enforcement, customs, immigration

81
00:04:26,960 --> 00:04:29,880
Speaker 4: to targeting fentanmol shipments into the United States, whether by

82
00:04:29,920 --> 00:04:32,640
Speaker 4: air or by sea. And finally, we should totally get

83
00:04:32,720 --> 00:04:36,840
Speaker 4: rid of the dominimus exemption that Chinese both lisit and

84
00:04:36,880 --> 00:04:40,280
Speaker 4: illicit manufacturers have been abusing to ship in projects to

85
00:04:40,279 --> 00:04:42,120
Speaker 4: the United States. All of these things that I just

86
00:04:42,160 --> 00:04:44,719
Speaker 4: said don't raise the price of car insurance for the

87
00:04:44,720 --> 00:04:47,800
Speaker 4: average American family, don't raise the price of housing for

88
00:04:47,800 --> 00:04:50,400
Speaker 4: the average American family, but they still get the point

89
00:04:50,440 --> 00:04:51,239
Speaker 4: across to China.

90
00:04:52,880 --> 00:04:54,520
Speaker 3: Well, and in many of those things you just said

91
00:04:54,560 --> 00:04:58,800
Speaker 3: also involve other cabinet officials. Presumably will are other departments

92
00:04:58,839 --> 00:05:02,159
Speaker 3: at the very least Treasury for the enforcement of sanctions,

93
00:05:02,200 --> 00:05:05,440
Speaker 3: tariffs obviously there as well the Secretary of State potentially

94
00:05:05,480 --> 00:05:09,400
Speaker 3: to handle with the diplomacy aspects. And when we consider

95
00:05:09,440 --> 00:05:13,560
Speaker 3: the individuals that the President elect has selected for those posts,

96
00:05:13,560 --> 00:05:16,760
Speaker 3: does that give you more confidence about the way China

97
00:05:16,800 --> 00:05:19,200
Speaker 3: policy is going to be approached under this administration.

98
00:05:20,560 --> 00:05:24,680
Speaker 4: Well, as I look at the opioid epidemic cascading over

99
00:05:24,720 --> 00:05:27,039
Speaker 4: the United States, and then I look at the nominee

100
00:05:27,040 --> 00:05:29,320
Speaker 4: for Health and Human Services secretary, No, that doesn't fill

101
00:05:29,360 --> 00:05:33,760
Speaker 4: me with confidence because he starts by looking at problems

102
00:05:33,760 --> 00:05:36,680
Speaker 4: from a position of conspiracy, not from a position of science.

103
00:05:36,800 --> 00:05:39,119
Speaker 4: RFK is somebody who doesn't believe that AIDS is caused

104
00:05:39,120 --> 00:05:41,200
Speaker 4: by a virus. He thinks the high speed internet causes

105
00:05:41,240 --> 00:05:46,280
Speaker 4: leaky brain syndrome. He thinks that COVID was ethnically targeted

106
00:05:46,279 --> 00:05:49,719
Speaker 4: to spare Jews in Chinese and target black Americans. So

107
00:05:49,880 --> 00:05:52,040
Speaker 4: this is not an individual that I trust to look

108
00:05:52,040 --> 00:05:55,239
Speaker 4: at the evidence and take a rational and science informed

109
00:05:55,320 --> 00:05:57,440
Speaker 4: view of how we reduce opioid deaths and how we

110
00:05:57,480 --> 00:06:02,440
Speaker 4: tackle fentanyl imports to the United States. But this is

111
00:06:02,480 --> 00:06:05,480
Speaker 4: why it is so critical that Congress mandated joint task

112
00:06:05,480 --> 00:06:08,360
Speaker 4: force kind of opioid that brings together all the various

113
00:06:08,360 --> 00:06:12,480
Speaker 4: elements of US state power and makes fentanyl a priority.

114
00:06:12,800 --> 00:06:15,159
Speaker 4: Because there's really two short term things that we want

115
00:06:15,160 --> 00:06:18,320
Speaker 4: from China in my opinion, One stop exporting fentanyl to

116
00:06:18,320 --> 00:06:21,800
Speaker 4: the United States and two stop importing Irani and oil

117
00:06:22,000 --> 00:06:24,360
Speaker 4: that is funding these proxy terror groups in the Middle East.

118
00:06:24,520 --> 00:06:26,600
Speaker 4: We can accomplish those two things in the first year,

119
00:06:26,920 --> 00:06:29,920
Speaker 4: but not if Donald Trump punishes American citizens with higher

120
00:06:29,920 --> 00:06:31,440
Speaker 4: prices as opposed to punishing China.

121
00:06:32,760 --> 00:06:35,080
Speaker 3: Well, I'm glad, Congressman that you raised the Middle East,

122
00:06:35,080 --> 00:06:37,320
Speaker 3: because we're watching that as well today. In fact, any

123
00:06:37,360 --> 00:06:39,599
Speaker 3: minute now, we're expecting we will hear from Israeli Prime

124
00:06:39,640 --> 00:06:43,200
Speaker 3: Minister Benjamin Netanyahu. As we've been made to understand both

125
00:06:43,240 --> 00:06:46,240
Speaker 3: by Israeli officials but even the US Secretary of State

126
00:06:46,279 --> 00:06:49,640
Speaker 3: Anthony Blincoln as well, that a ceasefire agreement with Lebanon

127
00:06:49,720 --> 00:06:53,240
Speaker 3: or with Hesbola in Lebanon is within reach. We've talked

128
00:06:53,240 --> 00:06:56,360
Speaker 3: to you extensively about the conflict between Israel and these

129
00:06:56,360 --> 00:06:59,600
Speaker 3: proxies on this program. Congressman, how do you feel about

130
00:06:59,600 --> 00:07:02,320
Speaker 3: the pros of this being done and what it might

131
00:07:02,400 --> 00:07:07,680
Speaker 3: mean for a potential ceasefire in Gaza as well?

132
00:07:07,839 --> 00:07:12,280
Speaker 4: We should be cautious that they are distinct issues. What's

133
00:07:12,280 --> 00:07:15,000
Speaker 4: going to be critical for any ceasefire agreement with Hisbela,

134
00:07:15,080 --> 00:07:17,240
Speaker 4: in my view, is that these Israelis who have been

135
00:07:17,280 --> 00:07:20,600
Speaker 4: displaced from their homes and communities in northern Israel because

136
00:07:20,640 --> 00:07:24,040
Speaker 4: of indiscriminate Hbela rocket fire need to be able to

137
00:07:24,080 --> 00:07:26,760
Speaker 4: return back to their homes. And we also need to

138
00:07:26,800 --> 00:07:30,120
Speaker 4: see that Hisbela is not going to relocate to the

139
00:07:30,160 --> 00:07:33,400
Speaker 4: southern border of Lebanon and be able to continue their

140
00:07:33,480 --> 00:07:36,320
Speaker 4: launching of precision guided munitions, but rather that the Lebanese

141
00:07:36,360 --> 00:07:40,040
Speaker 4: Army will gain operational control of that area so that

142
00:07:40,040 --> 00:07:42,560
Speaker 4: the two thousand and six agreement can really be honored,

143
00:07:42,600 --> 00:07:45,360
Speaker 4: which is that there needs to be that buffer zone.

144
00:07:46,080 --> 00:07:49,120
Speaker 4: Gaza really remains a separate issue, and I think we

145
00:07:49,120 --> 00:07:52,080
Speaker 4: should be cautious about interlocking them too much. Of course,

146
00:07:52,120 --> 00:07:55,600
Speaker 4: every ceasefire agreement is progress, but in Gaza it still

147
00:07:55,600 --> 00:07:58,760
Speaker 4: comes down to those hostages. We have human beings held

148
00:07:58,840 --> 00:08:03,320
Speaker 4: underground in terror tunnel and they need to be released home.

149
00:08:04,440 --> 00:08:09,160
Speaker 4: And Israel has every right to continue to operation, to

150
00:08:09,200 --> 00:08:12,200
Speaker 4: operate against Hamas until those hostages are home.

151
00:08:13,520 --> 00:08:15,680
Speaker 3: Well, and we know that's something that the President has

152
00:08:15,880 --> 00:08:21,920
Speaker 3: been trying advocating for the last year or more. Congressman,

153
00:08:21,960 --> 00:08:24,560
Speaker 3: he has fifty five days left to go before Donald

154
00:08:24,560 --> 00:08:28,840
Speaker 3: Trump takes over. What would it mean if some ceasefire

155
00:08:28,840 --> 00:08:31,800
Speaker 3: agreement at least a greater degree of peace in the

156
00:08:31,800 --> 00:08:34,920
Speaker 3: Middle East can be achieved before President Biden leaves office.

157
00:08:36,520 --> 00:08:40,719
Speaker 4: Every president has aspired to that since Jimmy Carter and

158
00:08:40,800 --> 00:08:43,040
Speaker 4: onwards right, So of course every president used that as

159
00:08:43,080 --> 00:08:46,719
Speaker 4: a golden ring to furnish their legacy. What would be

160
00:08:46,920 --> 00:08:51,040
Speaker 4: really critical for Joe Biden, I think, is a hostage

161
00:08:51,040 --> 00:08:53,880
Speaker 4: deal for Gaza that got these hostages home and that

162
00:08:54,000 --> 00:08:59,560
Speaker 4: also transitioned towards Palestinian led Arab finance, Western backed reconstruction

163
00:08:59,600 --> 00:09:04,400
Speaker 4: of Gaza that respects Israel's security. That is the pinnacle

164
00:09:04,679 --> 00:09:08,600
Speaker 4: of a Israel Gaza accord. I think the second thing

165
00:09:08,600 --> 00:09:11,240
Speaker 4: that he can do within these next fifty five days

166
00:09:11,720 --> 00:09:18,760
Speaker 4: is enforce the oil export sanctions against Iran with more

167
00:09:18,880 --> 00:09:22,880
Speaker 4: muscle and vigor. Iran is exporting about ninety percent of

168
00:09:22,880 --> 00:09:26,200
Speaker 4: its oil to China, and it's using that hard currency

169
00:09:26,240 --> 00:09:28,680
Speaker 4: one to keep its own regime afloat, but two to

170
00:09:28,760 --> 00:09:31,720
Speaker 4: fund these proxetaria groups across the Middle East. And what

171
00:09:31,760 --> 00:09:34,800
Speaker 4: we saw with Israel's attack against Iran is that Iran

172
00:09:34,960 --> 00:09:38,880
Speaker 4: is significantly more vulnerable now than it was even six

173
00:09:38,920 --> 00:09:42,720
Speaker 4: months ago. And I think when it's in a position

174
00:09:42,720 --> 00:09:44,240
Speaker 4: of weakness is when you want to pounce.

175
00:09:45,000 --> 00:09:47,959
Speaker 3: All right, Congressman, thank you so much for joining me.

176
00:09:48,040 --> 00:09:51,320
Speaker 3: Congressman Jake Auchincloss, the Democrat from Massachusetts.

177
00:09:54,080 --> 00:09:57,480
Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ketch

178
00:09:57,600 --> 00:10:00,400
Speaker 1: just live weekdays at noon Eastern on Appo.

179
00:10:00,160 --> 00:10:02,679
Speaker 2: Playing Enrounoto with the Bloomberg Business app.

180
00:10:02,720 --> 00:10:05,600
Speaker 1: You can also listen live on Amazon Alexa from our

181
00:10:05,600 --> 00:10:12,880
Speaker 1: flagship New York station, Just Say Alexa play Bloomberg eleven thirty.

182
00:10:12,240 --> 00:10:15,360
Speaker 3: The Israeli Prime Minister Benjamin Netnia, who has just begun

183
00:10:16,160 --> 00:10:18,640
Speaker 3: his televised remarks, will of course bring you the headlines

184
00:10:18,679 --> 00:10:20,280
Speaker 3: from this as we get them, but we want to

185
00:10:20,280 --> 00:10:23,000
Speaker 3: add the voice as we await the news here of

186
00:10:23,040 --> 00:10:26,360
Speaker 3: Evelyn Farcas. She's executive director of the McCain Institute, joining

187
00:10:26,440 --> 00:10:29,080
Speaker 3: us now here on Bloomberg TV and Radio Evelyn, as

188
00:10:29,080 --> 00:10:33,199
Speaker 3: we await the words of Netna who and clarity as

189
00:10:33,200 --> 00:10:36,440
Speaker 3: to whether or not an agreement has been reached. The

190
00:10:36,520 --> 00:10:40,360
Speaker 3: reporting suggests that this would be temporary sixty day ceasefire.

191
00:10:40,520 --> 00:10:43,080
Speaker 3: How if it is agreed to, do you make sixty

192
00:10:43,160 --> 00:10:44,840
Speaker 3: days something more permanent?

193
00:10:46,720 --> 00:10:50,560
Speaker 6: Kayley, thank you for having me on. I think it

194
00:10:50,640 --> 00:10:53,959
Speaker 6: needs to be really considered what kind of armed force

195
00:10:54,040 --> 00:10:58,080
Speaker 6: might be in there to reinforce this agreement, because if

196
00:10:58,120 --> 00:11:02,120
Speaker 6: there's no enforcement, I'm afraid the agreement won't hold. And

197
00:11:02,280 --> 00:11:05,280
Speaker 6: there have been various proposals. Perhaps the IDF could go

198
00:11:05,400 --> 00:11:08,640
Speaker 6: in there. It would of course require the United Nations

199
00:11:08,720 --> 00:11:12,560
Speaker 6: to agree to that, which is a difficult proposition right now,

200
00:11:12,600 --> 00:11:15,760
Speaker 6: given the perspective that a lot of the United Nations

201
00:11:15,800 --> 00:11:21,760
Speaker 6: members have on Israel and the Israeli defense forces. You

202
00:11:21,800 --> 00:11:23,760
Speaker 6: know how they have been fighting in Gaza.

203
00:11:26,120 --> 00:11:30,160
Speaker 3: Well, we are nataniahu is speaking as we mentioned Evelyn

204
00:11:30,240 --> 00:11:34,040
Speaker 3: in Hebrew, we understand. But initially the first read of

205
00:11:34,040 --> 00:11:38,120
Speaker 3: his comments in part say that he says the war

206
00:11:38,160 --> 00:11:41,680
Speaker 3: will not end until residents can return to the North

207
00:11:41,800 --> 00:11:45,439
Speaker 3: and all goals are accomplished, including that safe return. And

208
00:11:45,480 --> 00:11:47,960
Speaker 3: it does raise the question of the goals Israel had

209
00:11:48,000 --> 00:11:51,199
Speaker 3: here at the outset Evelyn, and to what extent they

210
00:11:51,240 --> 00:11:54,720
Speaker 3: have been largely achieved. And that doesn't just go for

211
00:11:54,800 --> 00:11:56,240
Speaker 3: in Lebanon, but in Gaza.

212
00:11:55,960 --> 00:11:58,120
Speaker 7: As well well.

213
00:11:57,960 --> 00:12:02,080
Speaker 6: I think Killy clearly, the Israeli government has managed to

214
00:12:02,800 --> 00:12:06,720
Speaker 6: neutralize Hesbala as a threat, and in doing so it

215
00:12:06,760 --> 00:12:11,680
Speaker 6: has significantly weakened Iran, leaving a side of course, or

216
00:12:11,800 --> 00:12:14,560
Speaker 6: let's add to it what Israel has done in Gaza

217
00:12:14,760 --> 00:12:18,320
Speaker 6: and what Israel has done directly in Iran. So Iran

218
00:12:18,440 --> 00:12:21,440
Speaker 6: is much weakened. So there is an opportunity now to

219
00:12:21,480 --> 00:12:25,280
Speaker 6: put pressure on Iran to make a bigger deal, meaning

220
00:12:25,360 --> 00:12:29,440
Speaker 6: to stop the fighting through the power they have over

221
00:12:29,480 --> 00:12:33,439
Speaker 6: Hamas in Gaza. And there's an opportunity to maybe get

222
00:12:33,840 --> 00:12:39,160
Speaker 6: Iran's nuclear program back in the box.

223
00:12:39,000 --> 00:12:39,520
Speaker 4: If you will.

224
00:12:41,440 --> 00:12:44,120
Speaker 3: Yeah, and Netanyahu is now saying that he's determined to

225
00:12:44,120 --> 00:12:48,319
Speaker 3: prevent Iran from having nuclear arms. So we're talking about

226
00:12:48,320 --> 00:12:50,800
Speaker 3: the same thing here, Evelyn, and I do wonder if

227
00:12:50,800 --> 00:12:54,560
Speaker 3: the role you think Iran has in the knowledge that

228
00:12:54,640 --> 00:12:57,240
Speaker 3: it is going to take Iranian blessing, you would think

229
00:12:57,360 --> 00:13:02,120
Speaker 3: or at least allowance of, but it's proxy Hesbela to

230
00:13:02,240 --> 00:13:04,680
Speaker 3: agree to a deal like this with Israel. If one

231
00:13:05,080 --> 00:13:07,400
Speaker 3: is to be reached, I wonder what it signals to you,

232
00:13:07,600 --> 00:13:10,800
Speaker 3: knowing that their proxies have been weakened, if Iran is

233
00:13:10,840 --> 00:13:12,400
Speaker 3: going to sanction this.

234
00:13:13,800 --> 00:13:16,120
Speaker 6: Yeah, I mean I think Iran probably doesn't have a choice.

235
00:13:16,160 --> 00:13:20,000
Speaker 6: Hesbela is significantly weakened. They probably want a break, if

236
00:13:20,000 --> 00:13:22,560
Speaker 6: you will, a break from the fighting. My guess is

237
00:13:22,600 --> 00:13:26,600
Speaker 6: that hesbe Lah would you know, probably be itching or

238
00:13:26,760 --> 00:13:29,840
Speaker 6: would be willing to conduct more attacks against Israel in

239
00:13:29,880 --> 00:13:32,400
Speaker 6: the future. That's why I think there needs to be

240
00:13:32,440 --> 00:13:35,880
Speaker 6: some kind of mechanism for enforcement. But I don't think

241
00:13:35,920 --> 00:13:38,320
Speaker 6: Iran has much of a choice. If Hesbela says we

242
00:13:38,480 --> 00:13:42,440
Speaker 6: can't hold out, and if Iran wants to take some

243
00:13:42,559 --> 00:13:46,800
Speaker 6: of the pressure off of itself again minimize the likelihood

244
00:13:46,840 --> 00:13:51,800
Speaker 6: that Israel might do something further to further weaken Iran,

245
00:13:52,240 --> 00:13:55,880
Speaker 6: whether it's in their nuclear facilities or elsewhere. I think

246
00:13:56,480 --> 00:13:58,560
Speaker 6: Iran might be feeling like this is a good deal

247
00:13:58,600 --> 00:13:59,120
Speaker 6: for the moment.

248
00:14:00,559 --> 00:14:04,240
Speaker 3: Well, and Iran also knows, as does Israel and Netan Yahoo,

249
00:14:04,280 --> 00:14:08,079
Speaker 3: as do the Iranian proxies, that fifty five days from

250
00:14:08,120 --> 00:14:10,640
Speaker 3: now there will be a different US administration in place.

251
00:14:10,679 --> 00:14:13,480
Speaker 3: Donald Trump will be the president and commander in chief.

252
00:14:13,520 --> 00:14:15,160
Speaker 3: And I wonder at the extent to which Evelyn, you

253
00:14:15,240 --> 00:14:18,400
Speaker 3: think that is factoring in to the timing of this,

254
00:14:18,559 --> 00:14:21,880
Speaker 3: as it's been months of pushing for a deal like

255
00:14:21,960 --> 00:14:24,280
Speaker 3: this one, and now three weeks after the election, it

256
00:14:24,280 --> 00:14:25,960
Speaker 3: does seem like it could come to fruition.

257
00:14:27,080 --> 00:14:27,280
Speaker 2: Yeah.

258
00:14:27,320 --> 00:14:31,040
Speaker 6: I think Iran is definitely concerned about what will happen

259
00:14:31,280 --> 00:14:36,000
Speaker 6: under US government led by President Trump. We know from

260
00:14:36,040 --> 00:14:39,000
Speaker 6: media accounts that Iran tried to assassinate him, so they

261
00:14:39,000 --> 00:14:41,600
Speaker 6: clearly didn't want him to be our next president. They

262
00:14:41,640 --> 00:14:44,600
Speaker 6: are worried about this because Donald Trump has taken a

263
00:14:44,600 --> 00:14:47,520
Speaker 6: hard line against Iran, so I would think that they're

264
00:14:47,600 --> 00:14:51,360
Speaker 6: eager to have this deal. The Israelis, I think, would

265
00:14:51,400 --> 00:14:55,600
Speaker 6: be more likely to drag this out and offer a

266
00:14:55,640 --> 00:15:00,680
Speaker 6: peace agreement, even if it's temporary with Hezbollah as a

267
00:15:01,240 --> 00:15:05,600
Speaker 6: gift to incoming President Trump. So I'm a little bit skeptical, Kelly,

268
00:15:05,640 --> 00:15:08,400
Speaker 6: that this is going to get signed before the inauguration

269
00:15:08,480 --> 00:15:09,520
Speaker 6: on January twentieth.

270
00:15:11,520 --> 00:15:13,880
Speaker 3: Okay, So, and it is worth pointing out as we're

271
00:15:14,240 --> 00:15:16,440
Speaker 3: and if you're with us here on Bloomberg TV, you

272
00:15:16,560 --> 00:15:20,640
Speaker 3: see that Israeli Prime Minister Benjamin Etnia who is still speaking.

273
00:15:20,680 --> 00:15:24,920
Speaker 3: We have yet to see him specifically address a ceasefire

274
00:15:25,040 --> 00:15:27,800
Speaker 3: or to hear from him on that. We're still waiting

275
00:15:27,880 --> 00:15:31,200
Speaker 3: for that news, Evelyn. But fifty five days, I guess,

276
00:15:31,280 --> 00:15:33,520
Speaker 3: is not that long of a time. And what the

277
00:15:33,600 --> 00:15:35,440
Speaker 3: question I started with this notion that it could be

278
00:15:35,520 --> 00:15:39,480
Speaker 3: a sixty day secession of hostilities window that would essentially

279
00:15:39,520 --> 00:15:43,240
Speaker 3: bring us what five days in to a Trump presidency.

280
00:15:43,320 --> 00:15:46,880
Speaker 3: How could that play in here? They say we'll pause

281
00:15:46,960 --> 00:15:50,120
Speaker 3: things for now, but when Trump comes back, we're revisiting this.

282
00:15:51,680 --> 00:15:54,200
Speaker 6: Yeah, I mean as possible, And maybe Israel thinks that

283
00:15:54,200 --> 00:15:56,360
Speaker 6: that they'll be in a better position then I think

284
00:15:56,400 --> 00:16:00,760
Speaker 6: they will be, frankly, given the relationship between Primis Yahu

285
00:16:00,920 --> 00:16:04,040
Speaker 6: and President Trump. So that is another option they could

286
00:16:04,080 --> 00:16:06,600
Speaker 6: sign now. And then, as you point out, I hadn't

287
00:16:06,600 --> 00:16:10,200
Speaker 6: done the map, then the gifts to President Trump is

288
00:16:10,240 --> 00:16:12,560
Speaker 6: a chance to revisit and chance to make another deal.

289
00:16:14,520 --> 00:16:17,120
Speaker 3: Well, we just heard from that Neahu saying the duration

290
00:16:17,640 --> 00:16:22,560
Speaker 3: of the truce in Lebanon depends on developments. He says,

291
00:16:22,560 --> 00:16:26,960
Speaker 3: if Hesbela chooses to rearm, then Israel will attack once again.

292
00:16:28,240 --> 00:16:31,880
Speaker 3: As we consider here, Evelyn, this notion that things can

293
00:16:31,920 --> 00:16:34,840
Speaker 3: be temporary or they could be longer in duration, depending

294
00:16:34,880 --> 00:16:38,520
Speaker 3: on the decisions here of the Iranian proxies. You were

295
00:16:38,560 --> 00:16:42,120
Speaker 3: just speaking about this notion that they have been materially weakened,

296
00:16:42,200 --> 00:16:47,360
Speaker 3: commanders taken out infrastructure targeted by Israeli strikes. How long,

297
00:16:47,440 --> 00:16:52,720
Speaker 3: realistically would it take Hesbela to reconstitute them themselves to

298
00:16:52,760 --> 00:16:54,680
Speaker 3: be in the position to be as great a threat

299
00:16:54,720 --> 00:16:58,040
Speaker 3: to Israel as it was beginning on October eighth and

300
00:16:58,160 --> 00:16:58,640
Speaker 3: through now.

301
00:17:00,560 --> 00:17:02,640
Speaker 6: It's hard for me to say that's really kind of

302
00:17:02,640 --> 00:17:05,679
Speaker 6: a military question. Clearly, they lost a lot of manpower.

303
00:17:05,960 --> 00:17:10,360
Speaker 6: The people who'se you know, hands were blown off. They

304
00:17:10,400 --> 00:17:13,359
Speaker 6: are not likely to be fighters, so they need to

305
00:17:13,359 --> 00:17:16,480
Speaker 6: be replaced. They need to replace their weaponry, because of

306
00:17:16,520 --> 00:17:19,880
Speaker 6: course we know Israel has taken out large stockpiles all

307
00:17:19,880 --> 00:17:23,639
Speaker 6: the places where Hesbola had kept their weapons, those have

308
00:17:23,720 --> 00:17:26,760
Speaker 6: been eliminated. I don't think it takes that long, so

309
00:17:27,080 --> 00:17:30,639
Speaker 6: you know, probably maybe six months to a year. So

310
00:17:30,960 --> 00:17:34,400
Speaker 6: this isn't a window of opportunity for Israel, certainly, and

311
00:17:34,560 --> 00:17:38,040
Speaker 6: I would imagine that the Iranians and Hesbola would be

312
00:17:38,240 --> 00:17:41,359
Speaker 6: interested in, you know, quickly going to a ceasefire so

313
00:17:41,440 --> 00:17:44,880
Speaker 6: that they can take advantage and try to rebuild.

314
00:17:46,480 --> 00:17:49,320
Speaker 3: And just again reminding our audience on Bloomberg TV and

315
00:17:49,400 --> 00:17:52,760
Speaker 3: Radio that Israeli Prime Minister Benjamin Netnia who is speaking

316
00:17:53,000 --> 00:17:55,960
Speaker 3: suggesting now that he will be bringing a truce agreement

317
00:17:55,960 --> 00:18:00,960
Speaker 3: in Lebanon to the Cabinet for cabinet approval, which of

318
00:18:00,960 --> 00:18:03,199
Speaker 3: course we understood that the cabinet was meeting today, so

319
00:18:03,240 --> 00:18:08,400
Speaker 3: that might suggest this has not been fully agreed to yet, Evelyn.

320
00:18:08,840 --> 00:18:11,440
Speaker 3: We also thought we might hear from President Biden today.

321
00:18:11,440 --> 00:18:15,120
Speaker 3: I suppose we still could before he travels to Nantucket

322
00:18:15,160 --> 00:18:18,800
Speaker 3: for Thanksgiving. And that plays into the fact that it

323
00:18:18,840 --> 00:18:20,760
Speaker 3: was not just the US at the table here in

324
00:18:20,800 --> 00:18:24,399
Speaker 3: these negotiations. In part, this agreement was negotiated with the

325
00:18:24,440 --> 00:18:27,720
Speaker 3: help of France and French President Emmanuel and Crone. We

326
00:18:27,800 --> 00:18:30,800
Speaker 3: understand was involved here. What do you make of the

327
00:18:30,880 --> 00:18:35,520
Speaker 3: role of another ally, another mediating force in this, knowing

328
00:18:35,520 --> 00:18:37,679
Speaker 3: of course that there were many mediators at play in

329
00:18:37,720 --> 00:18:40,720
Speaker 3: the talks that have yet to come to a fruitful

330
00:18:41,000 --> 00:18:43,200
Speaker 3: ceasefire deal when it comes to Israel and Hamas.

331
00:18:44,600 --> 00:18:47,080
Speaker 6: Yeah, it is interesting that the French were involved. Of course,

332
00:18:47,080 --> 00:18:50,680
Speaker 6: the French have a long history in and with Lebanon,

333
00:18:50,800 --> 00:18:53,800
Speaker 6: and so they want to maintain their relevance in the

334
00:18:53,800 --> 00:18:56,520
Speaker 6: Middle East. So I would imagine that was part of

335
00:18:56,560 --> 00:18:59,960
Speaker 6: what was motivating France. But clearly they would also like

336
00:19:00,320 --> 00:19:04,359
Speaker 6: to tamp down the danger that we're going to have

337
00:19:04,400 --> 00:19:08,480
Speaker 6: a wider war in the Middle East involving Iran and

338
00:19:08,880 --> 00:19:13,480
Speaker 6: Israel continuing to target one another directly. That's dangerous for

339
00:19:14,200 --> 00:19:17,520
Speaker 6: the world, frankly, and so I think France was motivated

340
00:19:17,560 --> 00:19:21,199
Speaker 6: to try to help us with the diplomacy. The Lebanese government,

341
00:19:21,240 --> 00:19:24,840
Speaker 6: of course, is also involved because we the United States,

342
00:19:24,960 --> 00:19:28,760
Speaker 6: we don't deal directly with Hezbolah because they're terrorist organizations.

343
00:19:28,760 --> 00:19:31,600
Speaker 6: So the Lebanese government was essentially doing some of that

344
00:19:31,680 --> 00:19:32,920
Speaker 6: go between work.

345
00:19:35,040 --> 00:19:37,240
Speaker 3: Well, that is an important point. There's obviously a distinction

346
00:19:37,320 --> 00:19:40,920
Speaker 3: between the Lebanese government and Hezbola forces to reiterate. Netanyahu

347
00:19:41,040 --> 00:19:43,520
Speaker 3: here is saying that he will bring the Lebanon truce

348
00:19:43,760 --> 00:19:47,040
Speaker 3: agreement to the Security Cabinet for a vote, suggesting that

349
00:19:47,160 --> 00:19:50,320
Speaker 3: vote has not happened yet, though he does say the

350
00:19:50,440 --> 00:19:55,080
Speaker 3: truce proposed will help isolate Hamas and free hostages. We

351
00:19:55,119 --> 00:19:57,679
Speaker 3: also just had a headline cross the Bloomberg Terminal that

352
00:19:57,760 --> 00:20:00,560
Speaker 3: ten minutes from now, at least scheduled ten minutes from

353
00:20:00,560 --> 00:20:02,960
Speaker 3: now one thirty pm Eastern time, Biden will be delivering

354
00:20:02,960 --> 00:20:05,480
Speaker 3: remarks at the White House. I would presume, Evelyn, those

355
00:20:05,520 --> 00:20:07,960
Speaker 3: remarks would pertain to this just before I let you go,

356
00:20:08,080 --> 00:20:10,960
Speaker 3: knowing he is in the final weeks here of his presidency,

357
00:20:11,000 --> 00:20:14,679
Speaker 3: which is fifty five days to go. As we've discussed,

358
00:20:15,119 --> 00:20:17,600
Speaker 3: what would it mean if this can be achieved under

359
00:20:17,640 --> 00:20:21,359
Speaker 3: this president in particular, who has been pushing for a

360
00:20:21,400 --> 00:20:23,560
Speaker 3: ceasefire and said he wants part of his legacy to

361
00:20:23,560 --> 00:20:25,880
Speaker 3: be greater peace in the Middle East.

362
00:20:26,720 --> 00:20:28,720
Speaker 6: Well, it would mean that he has achieved, of course,

363
00:20:28,800 --> 00:20:32,679
Speaker 6: that objective, and he will have brought some peace to

364
00:20:32,760 --> 00:20:36,200
Speaker 6: the Middle East. In the aftermath of the horrible attack

365
00:20:36,400 --> 00:20:43,480
Speaker 6: that was conducted by Lebanese proxies by Hamas out of Gaza.

366
00:20:43,800 --> 00:20:46,439
Speaker 6: And then of course the fact that the Hesbola struck

367
00:20:46,520 --> 00:20:49,679
Speaker 6: Israel again the first time since, you know, in a

368
00:20:49,720 --> 00:20:53,240
Speaker 6: massive way, since the two thousand and six negotiations to

369
00:20:53,400 --> 00:20:56,200
Speaker 6: end the conflict between Hesbela and Israel in the north.

370
00:20:56,320 --> 00:21:00,320
Speaker 6: So it would be an achievement certainly, that would bring

371
00:21:00,440 --> 00:21:02,520
Speaker 6: us closer to It will bring some peace, and it'll

372
00:21:02,520 --> 00:21:05,439
Speaker 6: allow the people, the Israeli people to go back and

373
00:21:05,520 --> 00:21:07,720
Speaker 6: live in the north and also the Lebanese people to

374
00:21:07,760 --> 00:21:10,680
Speaker 6: live in their south. But it wouldn't solve the Hamas.

375
00:21:10,760 --> 00:21:13,080
Speaker 6: It might make it easier to solve Hamas, but those

376
00:21:13,080 --> 00:21:16,800
Speaker 6: are very different situations, so I'm a bit skeptical as

377
00:21:16,800 --> 00:21:20,639
Speaker 6: to whether that would open the door wide enough.

378
00:21:22,240 --> 00:21:24,880
Speaker 3: All right, Evelyn, appreciate you joining us as we work

379
00:21:24,920 --> 00:21:27,760
Speaker 3: through these headlines from the Israeli Prime Minister Benjamin Netanyahu.

380
00:21:27,840 --> 00:21:31,480
Speaker 3: Evelyn Farcas, Executive Director of the McCain Institute.

381
00:21:35,000 --> 00:21:38,520
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

382
00:21:38,600 --> 00:21:41,440
Speaker 1: us live weekdays at noon Eastern on EPO, car Play

383
00:21:41,480 --> 00:21:44,119
Speaker 1: and then Proud Otto with the Bloomberg Business app. Listen

384
00:21:44,200 --> 00:21:47,200
Speaker 1: on demand wherever you get your podcasts, or watch us

385
00:21:47,240 --> 00:21:48,840
Speaker 1: live on YouTube.

386
00:21:50,960 --> 00:21:54,200
Speaker 3: We want to assemble our signature political panel. Rick Davis,

387
00:21:54,400 --> 00:21:57,800
Speaker 3: Stone Court Capital Partner and Bloomberg Politics contributor. Also Bloomberg

388
00:21:57,800 --> 00:22:01,040
Speaker 3: Politics contributor, Jeanie Shanzino, Senior demok Chrissy Fellow at the

389
00:22:01,080 --> 00:22:03,840
Speaker 3: Center for the Study of the Presidency and Congress. Genie,

390
00:22:03,840 --> 00:22:05,760
Speaker 3: I'd like to ask you the same question I just

391
00:22:05,840 --> 00:22:09,719
Speaker 3: asked Evelyn. As we consider here a US president in

392
00:22:09,760 --> 00:22:13,199
Speaker 3: his final weeks as Commander in chief, final weeks in

393
00:22:13,240 --> 00:22:15,680
Speaker 3: the Oval office, what would it mean for President Biden

394
00:22:15,880 --> 00:22:20,040
Speaker 3: if indeed a ceasefire between Israel and Hesbela is reached

395
00:22:20,320 --> 00:22:23,000
Speaker 3: while he still holds that title.

396
00:22:24,200 --> 00:22:27,280
Speaker 8: Yeah, it would be enormously important for President Biden. This

397
00:22:27,400 --> 00:22:30,240
Speaker 8: is something he has been committed to, as Evelyn mentioned,

398
00:22:30,280 --> 00:22:34,480
Speaker 8: since the October seventh horrific attack. He went right over

399
00:22:34,520 --> 00:22:38,800
Speaker 8: to Israel. He is obviously a great friend of Israel,

400
00:22:38,880 --> 00:22:42,000
Speaker 8: and so he would like to see this happen. That said,

401
00:22:42,520 --> 00:22:47,520
Speaker 8: history doesn't sort of suggest that he should be incredibly optimistic,

402
00:22:47,640 --> 00:22:50,840
Speaker 8: because Middle East peace has been one of the most

403
00:22:50,880 --> 00:22:54,560
Speaker 8: confounding things for presidents in the modern era to get

404
00:22:54,600 --> 00:22:57,640
Speaker 8: and to achieve, and they've all tried a left, right

405
00:22:57,640 --> 00:23:01,040
Speaker 8: and center Republican Democrat, very hard to get to and

406
00:23:01,119 --> 00:23:04,040
Speaker 8: you know, to hear and Yahoo say that he has

407
00:23:04,080 --> 00:23:06,440
Speaker 8: an outline or there is an outline that the French

408
00:23:06,480 --> 00:23:09,600
Speaker 8: and the US diplomats were able to negotiate and he's

409
00:23:09,680 --> 00:23:12,600
Speaker 8: bringing it to the cabinet. I just keep wondering, in

410
00:23:12,640 --> 00:23:14,960
Speaker 8: the back of Joe Biden's mind, is he thinking he

411
00:23:15,080 --> 00:23:18,640
Speaker 8: is the next Jimmy Carter with the Iran hostages, that

412
00:23:18,880 --> 00:23:21,840
Speaker 8: he is going to work this hard and Donald Trump

413
00:23:21,880 --> 00:23:24,480
Speaker 8: will come in and on January twenty first, we will

414
00:23:24,480 --> 00:23:26,919
Speaker 8: see an agreement. You know, it's hard to say, but

415
00:23:27,040 --> 00:23:29,040
Speaker 8: that's got to be weighing in the back of his mind.

416
00:23:29,080 --> 00:23:31,080
Speaker 8: It's going to be curious to see how he handles

417
00:23:31,080 --> 00:23:32,719
Speaker 8: this when he speaks in a couple of minutes.

418
00:23:34,080 --> 00:23:36,000
Speaker 3: Yeah, and we actually do have a correction here on

419
00:23:36,040 --> 00:23:38,359
Speaker 3: the timeline. He'll be speaking now at two thirty pm

420
00:23:38,440 --> 00:23:40,720
Speaker 3: Eastern Time from the Rose Garden at the White House,

421
00:23:40,760 --> 00:23:43,280
Speaker 3: so just over one hour from now is when we

422
00:23:43,400 --> 00:23:45,680
Speaker 3: expect those remarks.

423
00:23:45,760 --> 00:23:45,879
Speaker 2: Rick.

424
00:23:45,920 --> 00:23:47,400
Speaker 3: I'd love for you to weigh in on this kind

425
00:23:47,400 --> 00:23:51,480
Speaker 3: of legacy shaping question as well, because we all remember

426
00:23:51,520 --> 00:23:54,720
Speaker 3: when President Biden came into office, he was suggesting America's back.

427
00:23:54,760 --> 00:23:59,360
Speaker 3: He made foreign policy a really key pillar of his presidency.

428
00:23:59,560 --> 00:24:02,520
Speaker 3: Is it going to end on a foreign policy oriented note?

429
00:24:03,960 --> 00:24:05,920
Speaker 9: Well, I think certainly foreign policy is going to be

430
00:24:05,960 --> 00:24:10,000
Speaker 9: one of the things that shapes Joe Biden's legacy. You know,

431
00:24:10,119 --> 00:24:13,440
Speaker 9: starting with the withdrawal from Afghanistan, you know, a horrific

432
00:24:13,440 --> 00:24:17,000
Speaker 9: outcome for him and something that actually hurt his standing

433
00:24:17,040 --> 00:24:20,240
Speaker 9: amongst the American people that sort of lasted all the

434
00:24:20,240 --> 00:24:23,520
Speaker 9: way through to the election. But then you know, the

435
00:24:23,600 --> 00:24:28,200
Speaker 9: vexing war in Ukraine. And even though many observers will

436
00:24:28,240 --> 00:24:32,280
Speaker 9: say that Joe Biden's been a staunch advocate and supporter

437
00:24:32,440 --> 00:24:36,960
Speaker 9: of Ukraine and fighting the war of Russian aggression, you know,

438
00:24:37,040 --> 00:24:39,639
Speaker 9: there are just as many who will say he hasn't

439
00:24:39,680 --> 00:24:42,439
Speaker 9: done enough quick enough to really end the war, but

440
00:24:42,520 --> 00:24:45,320
Speaker 9: has now resulted in a prolonged conflict with no end

441
00:24:45,320 --> 00:24:50,080
Speaker 9: in sight. And to some degree, this whole Israeli situation.

442
00:24:50,160 --> 00:24:52,400
Speaker 9: You take it from the time that he got elected

443
00:24:52,440 --> 00:24:55,720
Speaker 9: and that everyone was celebrating the Abraham Accords. People in

444
00:24:55,720 --> 00:24:58,680
Speaker 9: his own administration were saying, you know, this is a

445
00:24:58,720 --> 00:25:01,800
Speaker 9: peaceful situation, least could last for a long time. And

446
00:25:01,840 --> 00:25:06,720
Speaker 9: then it was just after that that of course, Israel

447
00:25:07,280 --> 00:25:10,240
Speaker 9: got the worst attack in their history, you know, from

448
00:25:10,280 --> 00:25:13,679
Speaker 9: Hamas and lit up this war that we're now talking about.

449
00:25:13,720 --> 00:25:17,159
Speaker 9: So yeah, this is definitely going to frame the foreign

450
00:25:17,160 --> 00:25:21,520
Speaker 9: policy legacy of Joe Biden and frankly difficult to find

451
00:25:21,560 --> 00:25:26,920
Speaker 9: real successes inside that legacy. And so on the domestic side,

452
00:25:26,960 --> 00:25:29,639
Speaker 9: totally different equation. Has done a lot to get us

453
00:25:29,640 --> 00:25:33,200
Speaker 9: out of COVID and restore the economic health of our country,

454
00:25:33,200 --> 00:25:36,760
Speaker 9: But on foreign policy national security, I think it's going

455
00:25:36,840 --> 00:25:39,640
Speaker 9: to be a spotty legacy at least unless we see

456
00:25:39,640 --> 00:25:42,880
Speaker 9: how all this unwinds itself well.

457
00:25:42,720 --> 00:25:46,640
Speaker 3: And to that point, Genies, we consider the domestic legacy

458
00:25:46,720 --> 00:25:49,080
Speaker 3: foreign policy as well, how much of it, even as

459
00:25:49,119 --> 00:25:52,480
Speaker 3: it stands now and when he leaves office, could be unround,

460
00:25:52,960 --> 00:25:55,680
Speaker 3: unwound over the course of the next four years when

461
00:25:55,720 --> 00:25:57,160
Speaker 3: Donald Trump gets his turn again.

462
00:25:58,160 --> 00:26:00,840
Speaker 8: Yeah, that's the big fear of every president and it

463
00:26:00,960 --> 00:26:04,160
Speaker 8: is absolutely possible. You know, as we think about Joe

464
00:26:04,160 --> 00:26:06,880
Speaker 8: Biden talking at two thirty or when he comes out,

465
00:26:07,240 --> 00:26:10,320
Speaker 8: I'm reminded that he was at the g twenty and

466
00:26:10,440 --> 00:26:13,360
Speaker 8: he did not speak to the press for like almost

467
00:26:13,400 --> 00:26:17,719
Speaker 8: a week, and so you know, it's unclear how he

468
00:26:17,800 --> 00:26:20,360
Speaker 8: is going to move forward with his attempts to protect

469
00:26:20,359 --> 00:26:24,560
Speaker 8: his legacy. And the efforts are widespread because, as you mentioned,

470
00:26:24,600 --> 00:26:28,159
Speaker 8: as it comes to regulations, they started in February and

471
00:26:28,280 --> 00:26:32,240
Speaker 8: March trying to protect those against a potential Republican takeover,

472
00:26:32,320 --> 00:26:35,720
Speaker 8: which has now happened. As you think about legislation, just

473
00:26:35,760 --> 00:26:38,719
Speaker 8: think about the Chips Act. Huge success for the Biden

474
00:26:38,760 --> 00:26:42,440
Speaker 8: administration and the Democrats in Congress, and yet about thirty

475
00:26:42,480 --> 00:26:46,199
Speaker 8: billion of that has not been spent yet, and you

476
00:26:46,240 --> 00:26:48,160
Speaker 8: know it could be an issue of them running out

477
00:26:48,160 --> 00:26:51,040
Speaker 8: of the time. And Rick was just talking about the

478
00:26:51,080 --> 00:26:54,480
Speaker 8: policy legacy. So you look at this and he does

479
00:26:54,640 --> 00:26:56,960
Speaker 8: have a lot of work to do to try to

480
00:26:57,000 --> 00:27:00,000
Speaker 8: cement this legacy. And one thing we know that's how

481
00:27:00,000 --> 00:27:03,400
Speaker 8: happening in Congress right now is the Senate is rushing

482
00:27:03,440 --> 00:27:05,800
Speaker 8: as far as it can to confirm the rest of

483
00:27:05,840 --> 00:27:09,560
Speaker 8: these judges because the Democrats will lose the Senate. All

484
00:27:09,600 --> 00:27:13,000
Speaker 8: of this impacting Joe Biden's legacy. So it is a

485
00:27:13,040 --> 00:27:16,439
Speaker 8: broad legacy. And of course Donald Trump he is you know,

486
00:27:16,520 --> 00:27:19,880
Speaker 8: the Democrats and Joe Biden are firmly convinced he might

487
00:27:20,000 --> 00:27:22,679
Speaker 8: do what he did in twenty seventeen and use the

488
00:27:22,720 --> 00:27:26,000
Speaker 8: Congressional Review Act to unwind some of this and in

489
00:27:26,119 --> 00:27:29,080
Speaker 8: EOS and that's very, very possible, so it is a

490
00:27:29,200 --> 00:27:30,000
Speaker 8: challenge for them.

491
00:27:31,280 --> 00:27:34,040
Speaker 3: Well, and something else President Biden has focused on is

492
00:27:34,119 --> 00:27:36,879
Speaker 3: lowering the cost of prescription drugs, and we actually have

493
00:27:36,920 --> 00:27:41,400
Speaker 3: a new proposal on that from the administration just today, Genie,

494
00:27:41,400 --> 00:27:44,600
Speaker 3: proposing a rule that would require both Medicare and Medicaid

495
00:27:45,280 --> 00:27:49,160
Speaker 3: to cover obesity drugs, the weight loss drugs we all

496
00:27:49,160 --> 00:27:51,920
Speaker 3: have heard so much about in recent years. The White

497
00:27:51,920 --> 00:27:54,200
Speaker 3: House says this will get more than seven million people

498
00:27:54,320 --> 00:27:57,119
Speaker 3: access to weight loss treatment, but it also could add

499
00:27:57,160 --> 00:28:00,760
Speaker 3: potentially forty billion dollars in costs over ten years in

500
00:28:00,800 --> 00:28:05,159
Speaker 3: the process for these programs. So clearly he's trying to

501
00:28:05,640 --> 00:28:08,359
Speaker 3: lower more prescription drug cost Genie. But does he still

502
00:28:08,400 --> 00:28:10,960
Speaker 3: have time for it to do so to make this

503
00:28:11,080 --> 00:28:11,680
Speaker 3: a reality?

504
00:28:12,560 --> 00:28:15,119
Speaker 8: Yeah, yeah, And that was one of his big accomplishments,

505
00:28:15,200 --> 00:28:17,640
Speaker 8: was the lowering of drug prices. They announced this, as

506
00:28:17,640 --> 00:28:20,480
Speaker 8: you mentioned, the last twenty four hours, but they may,

507
00:28:20,560 --> 00:28:23,399
Speaker 8: again to your point, run out of time. They also

508
00:28:23,560 --> 00:28:27,240
Speaker 8: have to be cognizant that if we see say RFK

509
00:28:27,520 --> 00:28:32,080
Speaker 8: Junior approved as HHS Secretary while he seems firmly and

510
00:28:32,880 --> 00:28:36,840
Speaker 8: spoken a lot about you know better eating, exercise, and health,

511
00:28:36,880 --> 00:28:39,680
Speaker 8: he has not been the biggest fan of these so

512
00:28:39,800 --> 00:28:44,200
Speaker 8: called you know, weight loss drugs and prescription drugs. And

513
00:28:44,280 --> 00:28:48,600
Speaker 8: so they have to understand that this could be reversed,

514
00:28:49,640 --> 00:28:53,680
Speaker 8: pulled back by the next administration, particularly if they don't

515
00:28:53,720 --> 00:28:56,560
Speaker 8: move with all deliberate speed. So they're trying to move

516
00:28:56,560 --> 00:28:59,640
Speaker 8: in this direction, but they've only got about a month

517
00:28:59,720 --> 00:29:01,160
Speaker 8: left to get this all in place.

518
00:29:02,880 --> 00:29:05,000
Speaker 3: Well, and I wonder to what extent they might be

519
00:29:05,080 --> 00:29:07,440
Speaker 3: rushing to get this into place, Rick, not just for

520
00:29:08,040 --> 00:29:13,520
Speaker 3: legacy protection purposes, but also proofing purposes, if you will,

521
00:29:13,800 --> 00:29:17,360
Speaker 3: if Biden is trying to make some health policy oriented

522
00:29:17,400 --> 00:29:19,560
Speaker 3: decisions here at the end of his turn, before say

523
00:29:20,160 --> 00:29:23,440
Speaker 3: RFK Junior takes the helmet Health and Human Services.

524
00:29:24,720 --> 00:29:27,560
Speaker 9: Yeah, I actually don't think they have time. There are

525
00:29:27,560 --> 00:29:31,720
Speaker 9: certain prescriptions to advertise these changes to Medicare and Medicaid,

526
00:29:32,000 --> 00:29:34,800
Speaker 9: and they've just announced it, so it runs its course,

527
00:29:35,160 --> 00:29:38,520
Speaker 9: which won't be over until after the inaugural. So this

528
00:29:38,560 --> 00:29:42,200
Speaker 9: will fall into the category of things that the Trump

529
00:29:42,280 --> 00:29:45,480
Speaker 9: administration will pick up. And look, there's a lot of

530
00:29:45,480 --> 00:29:49,480
Speaker 9: dissidence within that administration on approaches, especially when it comes

531
00:29:49,480 --> 00:29:52,640
Speaker 9: to Medicare and Medicaid. I mean, you've got doctor Oz,

532
00:29:52,720 --> 00:29:56,760
Speaker 9: who famously on his TV shows promoted weight loss drugs

533
00:29:57,440 --> 00:30:00,760
Speaker 9: and their effect on all range of things. And so

534
00:30:01,960 --> 00:30:06,000
Speaker 9: the reality is, you know, what may hold for Bobby

535
00:30:06,080 --> 00:30:08,880
Speaker 9: Kennedy might not be the same point of view as

536
00:30:08,920 --> 00:30:11,560
Speaker 9: the person who's now in charge of running those programs,

537
00:30:12,040 --> 00:30:14,320
Speaker 9: Doctor Oz. And of course all of this will probably

538
00:30:14,320 --> 00:30:17,960
Speaker 9: fall under the prescription so to speak, of President Trump,

539
00:30:18,000 --> 00:30:22,000
Speaker 9: who I think is probably much more populistic and attitude

540
00:30:22,080 --> 00:30:23,880
Speaker 9: is if people who want their drugs, we should give

541
00:30:23,880 --> 00:30:29,040
Speaker 9: them to them. And so I think that this is

542
00:30:29,080 --> 00:30:32,160
Speaker 9: going to be a administration that makes decisions out of

543
00:30:32,200 --> 00:30:34,840
Speaker 9: the White House and they will be implemented in their agencies,

544
00:30:34,920 --> 00:30:35,880
Speaker 9: not the other way around.

545
00:30:38,040 --> 00:30:40,840
Speaker 3: Well, Jeanie, I wonder if you agree with that. As

546
00:30:40,880 --> 00:30:43,640
Speaker 3: we've talked about all of these various cabinet level selections

547
00:30:43,640 --> 00:30:46,480
Speaker 3: and otherwise we've gotten from Donald Trump, the degrees to

548
00:30:46,520 --> 00:30:50,960
Speaker 3: which they will have influence on policy is that that

549
00:30:51,080 --> 00:30:53,400
Speaker 3: shapes policy. The White House approves it or the White

550
00:30:53,440 --> 00:30:56,200
Speaker 3: House originates it, and everybody else just has to act

551
00:30:56,240 --> 00:30:57,480
Speaker 3: on that desire.

552
00:30:58,760 --> 00:31:01,120
Speaker 8: You know, I think what we're seeing clearly from what

553
00:31:01,240 --> 00:31:04,880
Speaker 8: Donald Trump campaigned on and the folks that are in

554
00:31:04,920 --> 00:31:08,200
Speaker 8: the cabinet, provided they're all confirmed, is that there is

555
00:31:08,240 --> 00:31:12,400
Speaker 8: a real desire to move this all under the auspices

556
00:31:12,480 --> 00:31:13,320
Speaker 8: of the White House.

557
00:31:13,920 --> 00:31:14,160
Speaker 1: You know.

558
00:31:14,360 --> 00:31:16,680
Speaker 8: You look at Boy, you look at others. They're very

559
00:31:16,800 --> 00:31:20,640
Speaker 8: very clear that there is no independent agents anymore, there's

560
00:31:20,640 --> 00:31:22,200
Speaker 8: no independent departments.

561
00:31:22,240 --> 00:31:22,880
Speaker 2: In their view.

562
00:31:23,240 --> 00:31:27,480
Speaker 8: They want and have a firm view of strong executive

563
00:31:27,560 --> 00:31:30,960
Speaker 8: power that they would like to ensure is in the

564
00:31:31,000 --> 00:31:33,360
Speaker 8: federal government in a way they don't feel it has

565
00:31:33,400 --> 00:31:36,400
Speaker 8: been for several decades, if ever, And so I think

566
00:31:36,480 --> 00:31:39,280
Speaker 8: their view is to give Donald Trump and the White

567
00:31:39,320 --> 00:31:42,360
Speaker 8: House the power and to allow the President to do

568
00:31:42,440 --> 00:31:44,440
Speaker 8: what he thinks is in his best interest, you know,

569
00:31:45,840 --> 00:31:48,680
Speaker 8: as it concerns this particular weight loss drug. I don't

570
00:31:48,720 --> 00:31:51,960
Speaker 8: personally recall Donald Trump speaking out about it. But the

571
00:31:52,040 --> 00:31:55,560
Speaker 8: reality is there are different views in this cabinet, and

572
00:31:55,600 --> 00:31:59,520
Speaker 8: if RFK is appointed AGTs Secretary, he may not take

573
00:31:59,560 --> 00:32:02,320
Speaker 8: as kind lead to this as a doctor Oz or

574
00:32:02,640 --> 00:32:05,640
Speaker 8: even the Surgeon General, who's a fascinating woman and a

575
00:32:05,680 --> 00:32:08,600
Speaker 8: fascinating doctor if Jessup proved. So, you know, there is

576
00:32:08,640 --> 00:32:10,400
Speaker 8: a lot of different views, and it's partly going to

577
00:32:10,440 --> 00:32:13,160
Speaker 8: depend on how Donald Trump sees this and of course

578
00:32:13,240 --> 00:32:14,560
Speaker 8: the costs of all of this.

579
00:32:16,240 --> 00:32:18,360
Speaker 3: Well, and of course it also depends on if these

580
00:32:18,400 --> 00:32:22,520
Speaker 3: individuals do get that approval from the Senate. Rick, nothing

581
00:32:22,600 --> 00:32:25,640
Speaker 3: is done until it's really done when it comes to

582
00:32:26,040 --> 00:32:30,400
Speaker 3: this transition process, in these nominees becoming confirm mees or

583
00:32:30,440 --> 00:32:33,400
Speaker 3: officially being confirmed for their roles.

584
00:32:34,560 --> 00:32:36,400
Speaker 9: That's right, and that could take a while.

585
00:32:36,480 --> 00:32:36,640
Speaker 2: Right.

586
00:32:36,680 --> 00:32:40,160
Speaker 9: We know that it's taken some time in his first administration.

587
00:32:40,440 --> 00:32:43,520
Speaker 9: Although he's a head of schedule at naming these individuals,

588
00:32:43,920 --> 00:32:46,920
Speaker 9: none of them have been through proper background checks, and

589
00:32:48,200 --> 00:32:50,720
Speaker 9: the vetting process hasn't even really begun on Capitol Hill

590
00:32:50,720 --> 00:32:54,120
Speaker 9: in the Senate, so it could take a while. Maybe

591
00:32:54,160 --> 00:32:58,000
Speaker 9: some will get through quickly. I don't know about how

592
00:32:58,080 --> 00:33:01,800
Speaker 9: the Senate Committee on Hell is going to work as

593
00:33:01,800 --> 00:33:05,360
Speaker 9: far as bringing up these nominees, but it's going to

594
00:33:05,360 --> 00:33:07,720
Speaker 9: be a high priority of this administration the first quarter

595
00:33:07,720 --> 00:33:09,440
Speaker 9: of this year. But we could be still talking about

596
00:33:09,480 --> 00:33:12,320
Speaker 9: this in March, all right.

597
00:33:12,440 --> 00:33:15,240
Speaker 3: Rick Davis and Jeanie Shanzano, I look forward to talking

598
00:33:15,720 --> 00:33:17,840
Speaker 3: about this with you in March and in the months

599
00:33:17,880 --> 00:33:21,160
Speaker 3: in between. Our signature political panel here on Balance of Power.

600
00:33:21,200 --> 00:33:24,040
Speaker 3: Thank you so much. And as we are here on

601
00:33:24,120 --> 00:33:25,920
Speaker 3: Balance of Power, I would remind you that we have

602
00:33:26,040 --> 00:33:28,400
Speaker 3: been dealing with some breaking news in the last several minutes,

603
00:33:28,440 --> 00:33:31,440
Speaker 3: having just heard from the Israeli Prime Minister Benjamin net

604
00:33:31,520 --> 00:33:34,120
Speaker 3: and Yahoo, who in part said that he will be

605
00:33:34,120 --> 00:33:38,120
Speaker 3: bringing a ceasefire deal in Lebanon, that agreement to his

606
00:33:38,200 --> 00:33:42,600
Speaker 3: security cabinet for approval this evening, so we're waiting the

607
00:33:42,680 --> 00:33:45,200
Speaker 3: actual vote on that, but Netanyahu said the duration of

608
00:33:45,240 --> 00:33:48,440
Speaker 3: the ceasefire depends on what happens in Lebanon.

609
00:33:51,680 --> 00:33:55,040
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens

610
00:33:55,160 --> 00:33:57,960
Speaker 1: just Live weekdays at noon Eastern on Apple car Play

611
00:33:58,000 --> 00:34:00,600
Speaker 1: and then ron Oto with the Bloomberg Business. You can

612
00:34:00,640 --> 00:34:03,840
Speaker 1: also listen live on Amazon Alexa from our flagship New

613
00:34:03,960 --> 00:34:07,520
Speaker 1: York station, Just Say Alexa Play Bloomberg eleven thirty.

614
00:34:10,160 --> 00:34:12,799
Speaker 3: Just three weeks later, Donald Trump is seeming like he

615
00:34:12,840 --> 00:34:15,920
Speaker 3: wants to make good on promises made on the campaign trail,

616
00:34:16,360 --> 00:34:20,960
Speaker 3: including those around tariffs, taking to True Social last night

617
00:34:21,040 --> 00:34:24,280
Speaker 3: suggesting he would put into place an additional ten percent

618
00:34:24,360 --> 00:34:27,879
Speaker 3: tariff on all goods coming from China and twenty five

619
00:34:27,960 --> 00:34:31,920
Speaker 3: percent on those coming from Mexico and Canada. The President

620
00:34:31,960 --> 00:34:34,279
Speaker 3: alex suggesting that this needs to be done in order

621
00:34:34,360 --> 00:34:38,040
Speaker 3: to clamp down on migrants and illegal drugs like fentanyl

622
00:34:38,080 --> 00:34:42,200
Speaker 3: coming over the US border. It's unclear whether this is

623
00:34:42,320 --> 00:34:45,000
Speaker 3: just a negotiating tack, though, and we should keep in

624
00:34:45,040 --> 00:34:48,600
Speaker 3: mind that he had actually floated tariffs even higher than

625
00:34:48,600 --> 00:34:50,759
Speaker 3: this over the course of his campaign. At one point,

626
00:34:50,800 --> 00:34:54,919
Speaker 3: he was suggesting sixty percent Levy's placed on all Chinese goods,

627
00:34:54,960 --> 00:34:57,520
Speaker 3: a level that our own economists here at Bloomberg think

628
00:34:57,560 --> 00:35:01,960
Speaker 3: would effectively cut off trade in the world's two largest economies.

629
00:35:02,360 --> 00:35:04,600
Speaker 3: It is, though, a reminder, of course, that what you

630
00:35:04,680 --> 00:35:08,600
Speaker 3: do economically does have implications geopolitically, and that's where we

631
00:35:08,640 --> 00:35:11,719
Speaker 3: really want to focus now with our first guest, Michael O'Hanlon.

632
00:35:11,640 --> 00:35:12,000
Speaker 6: Is with me.

633
00:35:12,040 --> 00:35:15,160
Speaker 3: He is Brookings Institution Senior Fellow and director of Research

634
00:35:15,600 --> 00:35:18,920
Speaker 3: in the Foreign Policy Program. Michael, welcome back to balance

635
00:35:18,960 --> 00:35:22,800
Speaker 3: of power. When we first just consider the authority Trump

636
00:35:22,840 --> 00:35:26,040
Speaker 3: could use to do this, what powers are bestowed upon

637
00:35:26,160 --> 00:35:29,920
Speaker 3: him and the executive branch. Many of those things stem

638
00:35:29,960 --> 00:35:34,080
Speaker 3: from national security interests. Basically that the president can impose

639
00:35:34,160 --> 00:35:37,240
Speaker 3: higher tariffs if they think it is necessary to protect

640
00:35:37,360 --> 00:35:41,960
Speaker 3: US national security? Could that be adequate justification here?

641
00:35:43,560 --> 00:35:46,239
Speaker 10: You know, it's a great question. According to the letter

642
00:35:46,280 --> 00:35:49,160
Speaker 10: of the law, I'm not going to claim expertise to

643
00:35:49,160 --> 00:35:51,560
Speaker 10: be able to answer your question. According to the spirit

644
00:35:51,640 --> 00:35:54,080
Speaker 10: of the law, the answer would be yes. If you're

645
00:35:54,120 --> 00:35:58,120
Speaker 10: talking about fentanyl and Mexico. I'm not really sure what

646
00:35:58,239 --> 00:36:02,600
Speaker 10: Mexico can do in any realistic way or time horizon

647
00:36:02,840 --> 00:36:07,120
Speaker 10: to dramatically cut back on the illegal shipments of fentanol

648
00:36:07,160 --> 00:36:09,880
Speaker 10: to the United States, but it certainly is a national

649
00:36:09,880 --> 00:36:12,840
Speaker 10: security consideration. I mean, when you have one hundred thousand

650
00:36:12,840 --> 00:36:16,600
Speaker 10: Americans a year dying of opioid overdoses, I think that

651
00:36:16,680 --> 00:36:19,560
Speaker 10: qualifies as a national security problem, and I don't think

652
00:36:19,600 --> 00:36:22,359
Speaker 10: a court would be in a position to disagree, even

653
00:36:22,360 --> 00:36:24,920
Speaker 10: if scholars might have a debate on that question. So

654
00:36:24,960 --> 00:36:27,759
Speaker 10: in that sense, I think that it's plausible that both

655
00:36:27,800 --> 00:36:31,000
Speaker 10: in regard to China with its power and its rise

656
00:36:31,080 --> 00:36:34,160
Speaker 10: on the world stage, and the military implications of China's

657
00:36:34,200 --> 00:36:37,839
Speaker 10: growing economic power, as well as the fentanyl connection and

658
00:36:37,880 --> 00:36:41,359
Speaker 10: the illegal immigration connection with Mexico, I think that Trump

659
00:36:41,440 --> 00:36:45,719
Speaker 10: probably could invoke national security considerations, at least in a

660
00:36:45,760 --> 00:36:49,240
Speaker 10: political and strategic sense whether the law and the lawyers

661
00:36:49,280 --> 00:36:50,359
Speaker 10: would let him I don't know.

662
00:36:52,040 --> 00:36:55,439
Speaker 3: Well, So if we focus on China here specifically, what

663
00:36:55,880 --> 00:36:59,400
Speaker 3: could higher tariffs or greater trade barriers ultimately mean for

664
00:36:59,440 --> 00:37:03,120
Speaker 3: the nature of the relationship with an adversary like that.

665
00:37:03,239 --> 00:37:06,080
Speaker 3: Is it actually something that can be exercised as leverage

666
00:37:06,160 --> 00:37:10,200
Speaker 3: to get more favorable outcomes geopolitically, or is it something

667
00:37:10,239 --> 00:37:14,040
Speaker 3: that could potentially be even more destabilizing geopolitically and risk

668
00:37:14,160 --> 00:37:18,440
Speaker 3: undoing progress made in normalization of ties between.

669
00:37:18,120 --> 00:37:23,360
Speaker 10: The US and China both and hence the riskiness of

670
00:37:23,400 --> 00:37:27,719
Speaker 10: the strategy. Although I think that to get concessions you

671
00:37:27,800 --> 00:37:30,279
Speaker 10: have to have a reasonable theory of the case for

672
00:37:30,640 --> 00:37:34,040
Speaker 10: why the tariff is an appropriate policy tool. There has

673
00:37:34,080 --> 00:37:38,160
Speaker 10: to be some sense of fair play or at least leverage,

674
00:37:38,600 --> 00:37:42,839
Speaker 10: and I think that with Trump already having applied these

675
00:37:42,920 --> 00:37:45,720
Speaker 10: high tariffs on China in his first term and President

676
00:37:45,840 --> 00:37:50,840
Speaker 10: Biden having kept those in Biden's term, it's harder to

677
00:37:50,880 --> 00:37:55,120
Speaker 10: see why a general sweeping tariff would be appropriate. Now, obviously,

678
00:37:55,160 --> 00:37:58,320
Speaker 10: we do have intellectual property right disagreements with China. We

679
00:37:58,360 --> 00:38:00,920
Speaker 10: feel they steal a lot of our ip are, and

680
00:38:01,040 --> 00:38:03,799
Speaker 10: we also have national security concerns over high technology.

681
00:38:03,840 --> 00:38:04,799
Speaker 5: So I think on either of.

682
00:38:04,760 --> 00:38:09,240
Speaker 10: Those two more limited bins of technology, you could imagine

683
00:38:09,360 --> 00:38:13,040
Speaker 10: Trump making this threat and perhaps having some justification for

684
00:38:13,120 --> 00:38:15,960
Speaker 10: doing so, And you could imagine that the response by

685
00:38:16,040 --> 00:38:19,120
Speaker 10: China that we would want to achieve would be less

686
00:38:19,160 --> 00:38:23,520
Speaker 10: theft of intellectual property and also less provocative behavior in

687
00:38:23,560 --> 00:38:26,560
Speaker 10: the Western Pacific militarily. So in that sense, there'd be

688
00:38:26,600 --> 00:38:29,880
Speaker 10: a credible, plausible linkage. But a ten percent across the

689
00:38:29,920 --> 00:38:33,040
Speaker 10: board tariff, I mean, it's harder for me to see

690
00:38:33,080 --> 00:38:36,439
Speaker 10: how China reacts well to that. At least it's less

691
00:38:36,440 --> 00:38:38,960
Speaker 10: than sixty percent. As you pointed out earlier, you know,

692
00:38:39,320 --> 00:38:41,759
Speaker 10: ten percent the news there is almost that Trump's so

693
00:38:41,880 --> 00:38:44,840
Speaker 10: dramatically lowering the additional tariff that he said he was

694
00:38:44,880 --> 00:38:47,080
Speaker 10: going to apply to goods from China. That's more the

695
00:38:47,120 --> 00:38:50,319
Speaker 10: news in some sense than the additional proposal for ten

696
00:38:50,360 --> 00:38:51,000
Speaker 10: percent more.

697
00:38:51,400 --> 00:38:52,839
Speaker 5: But you know, the Chinese are still not.

698
00:38:52,840 --> 00:38:56,600
Speaker 10: Going to be thrilled, obviously, and whether Trump could actually

699
00:38:56,640 --> 00:39:02,080
Speaker 10: extract out less threatening behavior militarily to China, that's pretty dubious.

700
00:39:02,520 --> 00:39:05,000
Speaker 10: I do still like the idea of linkage, because China

701
00:39:05,000 --> 00:39:07,720
Speaker 10: should know that there are going to be economic repercussions

702
00:39:07,920 --> 00:39:11,480
Speaker 10: to strategically destabilizing behavior. I'm just not sure you're really

703
00:39:11,480 --> 00:39:14,120
Speaker 10: going to get a negotiation on those terms anytime soon.

704
00:39:16,200 --> 00:39:19,160
Speaker 3: Well, we'll see what happens. I suppose when Trump actually

705
00:39:19,239 --> 00:39:22,520
Speaker 3: takes office once again. Something that could happen more immediately

706
00:39:22,560 --> 00:39:25,040
Speaker 3: than that, potentially as soon as today, Michael, is a

707
00:39:25,080 --> 00:39:29,799
Speaker 3: ceasefire agreement between Israel and Lebanon. Prime Minister Benjamin net

708
00:39:29,840 --> 00:39:32,279
Speaker 3: Nyahu is set to give a televised address less than

709
00:39:32,280 --> 00:39:35,120
Speaker 3: an hour from now. There's been reports that President Biden

710
00:39:35,200 --> 00:39:38,040
Speaker 3: may speak to and Anthony Blincoln just said that the

711
00:39:38,120 --> 00:39:41,080
Speaker 3: Lebanon ceasfire effort is near the finish line and could

712
00:39:41,080 --> 00:39:45,560
Speaker 3: help end the conflict in Gaza as well. Even if

713
00:39:45,600 --> 00:39:48,520
Speaker 3: this agreement is reached, Michael, do you believe it will

714
00:39:48,560 --> 00:39:52,480
Speaker 3: stick and potentially have ramifications for beyond Lebanon but into

715
00:39:52,920 --> 00:39:54,080
Speaker 3: Israel's war with Moss.

716
00:39:55,440 --> 00:39:57,080
Speaker 10: You know, that's a great question. I think there's a

717
00:39:57,080 --> 00:39:59,560
Speaker 10: good chance it could stick, as Below, of course, has

718
00:39:59,600 --> 00:40:02,240
Speaker 10: lost of its leadership, so no one's quite sure who's

719
00:40:02,239 --> 00:40:05,160
Speaker 10: calling the shots there and exactly how much control they

720
00:40:05,200 --> 00:40:07,759
Speaker 10: have over the whole organization. So even if you get

721
00:40:07,760 --> 00:40:10,520
Speaker 10: a deal, you could have some outliers who violate it

722
00:40:10,760 --> 00:40:14,120
Speaker 10: on the Hesbola side, But I think that on balance,

723
00:40:14,600 --> 00:40:22,480
Speaker 10: Hesbola still has demonstrated an ability to graduate to adjust

724
00:40:22,880 --> 00:40:25,799
Speaker 10: the level of its fire and the locations of its

725
00:40:25,840 --> 00:40:29,240
Speaker 10: fire as a function of where things stand with Gaza,

726
00:40:29,280 --> 00:40:32,520
Speaker 10: where things stand more broadly with Israel. And so I'm

727
00:40:32,560 --> 00:40:35,640
Speaker 10: guessing they've still got enough command and control over their

728
00:40:35,760 --> 00:40:39,480
Speaker 10: organization irrespective of the loss of the top leadership that

729
00:40:39,560 --> 00:40:42,640
Speaker 10: they probably could hue to such a ceapire. And certainly

730
00:40:42,719 --> 00:40:45,160
Speaker 10: Israel would relish that because it wants to be able

731
00:40:45,200 --> 00:40:48,040
Speaker 10: to move back the tens of thousands of citizens who

732
00:40:48,080 --> 00:40:51,000
Speaker 10: have had to evacuate northern Israel due to the previous

733
00:40:51,080 --> 00:40:57,239
Speaker 10: year's attacks from Levitnese territory by Hesbola against those locations

734
00:40:57,239 --> 00:41:00,080
Speaker 10: in Israel. As to whether that could actually lead to

735
00:41:00,120 --> 00:41:04,080
Speaker 10: a higher probability of a ceasefire in Gaza, I suppose

736
00:41:04,120 --> 00:41:07,720
Speaker 10: in some broader political sense, because the atmosphere would have changed.

737
00:41:07,960 --> 00:41:10,680
Speaker 10: I'm not sure though, that it really changes the specific

738
00:41:10,680 --> 00:41:14,320
Speaker 10: options Israel would think it has in Gaza. It certainly

739
00:41:14,320 --> 00:41:17,600
Speaker 10: doesn't want to do a deal with Hamas itself unless

740
00:41:17,640 --> 00:41:20,600
Speaker 10: that deal also committed Hamas to no longer be in

741
00:41:20,680 --> 00:41:24,000
Speaker 10: charge of Gaza longer term and to just have this

742
00:41:24,080 --> 00:41:27,000
Speaker 10: be the step towards creation of a new political entity

743
00:41:27,480 --> 00:41:31,440
Speaker 10: inside of the Palestinian territories. So if Hamas would agree

744
00:41:31,440 --> 00:41:34,400
Speaker 10: to that deal, then maybe, But I don't know that

745
00:41:34,440 --> 00:41:35,440
Speaker 10: Hamas would.

746
00:41:36,920 --> 00:41:38,960
Speaker 3: Well, and it's a question of what Israel is willing

747
00:41:38,960 --> 00:41:42,280
Speaker 3: to agree to as well. Considering from the very start

748
00:41:42,320 --> 00:41:45,120
Speaker 3: of this conflict last October they said their end goal

749
00:41:45,200 --> 00:41:48,239
Speaker 3: was the total eradication of Hamas. Are we though, coming

750
00:41:48,280 --> 00:41:52,680
Speaker 3: to realize that that, at least from an ideology perspective,

751
00:41:53,120 --> 00:41:55,879
Speaker 3: is not something that feasibly could have been accomplished.

752
00:41:57,160 --> 00:41:58,920
Speaker 10: I don't think it could be. But one of the

753
00:41:58,920 --> 00:42:01,600
Speaker 10: smartest things I've seen written about this conflict in recent

754
00:42:01,600 --> 00:42:04,480
Speaker 10: weeks was by Michael Duran or the Hudson Institute, who

755
00:42:04,560 --> 00:42:07,080
Speaker 10: suggested that Israel's real goal was not so much a

756
00:42:07,120 --> 00:42:11,520
Speaker 10: ceasefire with what's left of centralized Thomas leadership, but rather

757
00:42:11,760 --> 00:42:16,520
Speaker 10: individual ceasepires with local leaders of Hamas in various parts

758
00:42:16,560 --> 00:42:19,359
Speaker 10: of Gaza, and to the extent they could achieve that,

759
00:42:19,440 --> 00:42:22,759
Speaker 10: maybe they could claim that was essentially a realization of

760
00:42:22,800 --> 00:42:27,160
Speaker 10: their earlier promise to eradicate Hamas as a central organization

761
00:42:27,880 --> 00:42:32,440
Speaker 10: inside the Gaza strip. That may be also unrealistic, but

762
00:42:33,160 --> 00:42:37,760
Speaker 10: a little less unrealistic than completely eradicating every previous member

763
00:42:37,760 --> 00:42:38,600
Speaker 10: of the organization.

764
00:42:40,440 --> 00:42:42,520
Speaker 3: And Michael, we have less than a minute left here.

765
00:42:42,560 --> 00:42:44,600
Speaker 3: But how does the knowledge that Donald Trump will be

766
00:42:44,640 --> 00:42:47,440
Speaker 3: the president fifty five days from now influence all sides

767
00:42:47,480 --> 00:42:48,680
Speaker 3: of these negotiations.

768
00:42:50,760 --> 00:42:54,280
Speaker 10: Well, I think that for Prime Minister net and Yahoo,

769
00:42:55,040 --> 00:42:58,560
Speaker 10: he will be happier with Trump than with Biden. And

770
00:42:59,040 --> 00:43:01,640
Speaker 10: I don't know if that means that he really therefore

771
00:43:01,800 --> 00:43:03,640
Speaker 10: is more likely to agree to a cease fire. In

772
00:43:03,680 --> 00:43:06,359
Speaker 10: other words, some people had the theory that Netanyahu wanted

773
00:43:06,360 --> 00:43:09,000
Speaker 10: the war beyondgoing in a way that would hurt Biden

774
00:43:09,040 --> 00:43:13,200
Speaker 10: and Harris politically. And now that that's over, the election

775
00:43:13,440 --> 00:43:16,680
Speaker 10: is complete and Trump won, this same argument would no

776
00:43:16,760 --> 00:43:19,920
Speaker 10: longer apply. But I doubt that was Netnaku's main calculus

777
00:43:19,920 --> 00:43:21,080
Speaker 10: from the start, so I don't think.

778
00:43:20,960 --> 00:43:25,480
Speaker 3: It changes that much, all right, Michael O'Hanlon, Brookings Institution

779
00:43:25,640 --> 00:43:32,880
Speaker 3: Senior Fellow and director of Research in the Foreign Policy Program.

780
00:43:33,080 --> 00:43:36,640
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

781
00:43:36,680 --> 00:43:39,680
Speaker 1: Just Live weekdays at noon Eastern on epocar Play and.

782
00:43:39,600 --> 00:43:41,840
Speaker 2: Then Rouno with the Bloomberg Business app.

783
00:43:41,880 --> 00:43:45,040
Speaker 1: Listen on demand wherever you get your podcasts, or watch

784
00:43:45,120 --> 00:43:48,600
Speaker 1: us live on YouTube.

785
00:43:48,960 --> 00:43:50,960
Speaker 3: As it was just last night that Donald Trump on

786
00:43:51,080 --> 00:43:55,080
Speaker 3: True Social threatened to place higher tariffs on the US's

787
00:43:55,120 --> 00:43:58,880
Speaker 3: three largest trading partners, an additional ten percent tariff on

788
00:43:58,920 --> 00:44:01,920
Speaker 3: all goods coming from China and twenty five percent on

789
00:44:01,960 --> 00:44:06,440
Speaker 3: those coming from Mexico and Canada. We want to talk

790
00:44:06,480 --> 00:44:10,239
Speaker 3: more about the economic impact ultimately of levies of that kind,

791
00:44:10,320 --> 00:44:13,239
Speaker 3: assuming that they do become reality, and this isn't just

792
00:44:13,320 --> 00:44:15,800
Speaker 3: a negotiating tactic, and turned to Christopher Smart. He is

793
00:44:15,880 --> 00:44:19,440
Speaker 3: managing partner at our Growth Group and former Special Assistant

794
00:44:19,480 --> 00:44:24,440
Speaker 3: to President Barack Obama for International Economics. Christopher, Welcome back

795
00:44:24,480 --> 00:44:27,520
Speaker 3: to Bloomberg TV and Radio. We've been debating all day

796
00:44:27,560 --> 00:44:30,839
Speaker 3: whether this is negotiating tactic or if it's real. If

797
00:44:30,840 --> 00:44:33,640
Speaker 3: it is the latter, what would this do to the

798
00:44:33,640 --> 00:44:34,920
Speaker 3: cost of goods in the US.

799
00:44:37,120 --> 00:44:39,319
Speaker 11: Well, Kelly, great to be with you, and I think

800
00:44:39,719 --> 00:44:41,759
Speaker 11: just listening to you talk to your colleagues. A moment

801
00:44:41,800 --> 00:44:45,200
Speaker 11: ago about President Biden trying to secure his legacy, set

802
00:44:45,239 --> 00:44:47,759
Speaker 11: the agenda and foreign policy up until his last day

803
00:44:47,760 --> 00:44:51,440
Speaker 11: in office, President Trump at least done trade and immigration policy,

804
00:44:51,560 --> 00:44:56,319
Speaker 11: is already seized control of those agendas, and I think

805
00:44:56,480 --> 00:45:00,319
Speaker 11: loud and clear he has broadcast his opening move. And

806
00:45:00,440 --> 00:45:03,719
Speaker 11: what is always a trade negotiation, whether whether you put

807
00:45:03,800 --> 00:45:06,120
Speaker 11: on tariffs or not, or threatened to put on tariffs,

808
00:45:06,400 --> 00:45:10,120
Speaker 11: it is intended at least to extract some sorts of

809
00:45:10,120 --> 00:45:13,759
Speaker 11: concessions from trade partners. In this case, the surprises that

810
00:45:13,840 --> 00:45:17,359
Speaker 11: it has come now I think, and the surprise is that,

811
00:45:18,080 --> 00:45:20,520
Speaker 11: or what is not clear is exactly what he hopes

812
00:45:20,560 --> 00:45:23,359
Speaker 11: to get in return. I'll just say one quick thing.

813
00:45:23,520 --> 00:45:26,000
Speaker 11: Framing it in terms of a national security threat, as

814
00:45:26,040 --> 00:45:29,000
Speaker 11: the president elect has done, I think gives him some

815
00:45:29,160 --> 00:45:32,960
Speaker 11: leeway legally at least to imposed tariffs without a lot

816
00:45:33,000 --> 00:45:36,160
Speaker 11: of extra congressional authorities to do so. So that may

817
00:45:36,160 --> 00:45:37,960
Speaker 11: be part of what he is thinking right now. What

818
00:45:38,080 --> 00:45:41,040
Speaker 11: we don't really know is again, what he hopes to secure.

819
00:45:42,680 --> 00:45:44,640
Speaker 3: Well, there's also the question of what the markets are

820
00:45:44,680 --> 00:45:47,560
Speaker 3: thinking about all of this, because right now, Christopher, I'm

821
00:45:47,600 --> 00:45:49,560
Speaker 3: looking at a fresh record high on the S and

822
00:45:49,560 --> 00:45:52,960
Speaker 3: P five hundred. I would describe the general attitude today

823
00:45:53,040 --> 00:45:55,200
Speaker 3: is pretty nonplused. Is that appropriate?

824
00:45:56,800 --> 00:45:57,000
Speaker 5: Well?

825
00:45:57,040 --> 00:45:58,960
Speaker 11: I was trying to do the joke about denial as

826
00:45:59,000 --> 00:46:01,400
Speaker 11: a river is not just river in Egypt.

827
00:46:01,440 --> 00:46:03,520
Speaker 5: But I think there is a.

828
00:46:03,520 --> 00:46:07,160
Speaker 11: Sense in markets that because again, this is something that

829
00:46:07,239 --> 00:46:09,640
Speaker 11: is coming out two months before the president can do anything,

830
00:46:09,840 --> 00:46:12,000
Speaker 11: and I think even then, I think he would issue

831
00:46:12,400 --> 00:46:14,279
Speaker 11: an executive order and it may take some time for

832
00:46:14,320 --> 00:46:16,800
Speaker 11: those tariffs to take effect. Will know much more in

833
00:46:16,840 --> 00:46:20,560
Speaker 11: the next two months how Mexico, Canada, and China may

834
00:46:20,640 --> 00:46:24,719
Speaker 11: respond to this. I think the fear for those of

835
00:46:24,800 --> 00:46:27,279
Speaker 11: us who look at this from a longer term is

836
00:46:27,320 --> 00:46:31,040
Speaker 11: that these are probably moving goalposts. And even if Ottawa,

837
00:46:31,560 --> 00:46:35,880
Speaker 11: Mexico City, Beijing were able to satisfy the president's concerns,

838
00:46:35,960 --> 00:46:39,120
Speaker 11: the president elects concerns right now on drugs and immigration.

839
00:46:39,960 --> 00:46:42,160
Speaker 11: He's got a whole list of concerns that he is

840
00:46:43,360 --> 00:46:46,360
Speaker 11: ready to come back to them with and use tariffs

841
00:46:46,440 --> 00:46:50,600
Speaker 11: as a as leverage. So I would expect, you know,

842
00:46:51,120 --> 00:46:53,479
Speaker 11: these tariffs, at least in some form to start getting

843
00:46:53,480 --> 00:46:55,920
Speaker 11: phased in. Maybe not a blanket tariff the way he

844
00:46:55,960 --> 00:46:59,759
Speaker 11: announced last night, but something is going to make trade

845
00:46:59,760 --> 00:47:03,160
Speaker 11: with the countries more expensive, at least in certain industries,

846
00:47:03,320 --> 00:47:06,000
Speaker 11: and probably that's we're in for a longer and more

847
00:47:06,000 --> 00:47:07,480
Speaker 11: protracted set of negotiations.

848
00:47:08,960 --> 00:47:11,920
Speaker 3: Well, Christopher, it is last night that we learned about

849
00:47:11,920 --> 00:47:14,640
Speaker 3: this new threat. We ended Monday with that, after beginning

850
00:47:14,719 --> 00:47:18,520
Speaker 3: Monday with the initial market welcoming with open arms of

851
00:47:18,600 --> 00:47:22,680
Speaker 3: the selection of Scott Besson for Treasury secretary. What check

852
00:47:23,040 --> 00:47:25,080
Speaker 3: on not just the tariff policy but all of these

853
00:47:25,160 --> 00:47:29,399
Speaker 3: kind of economic policy suggestions from the President elect. Could

854
00:47:29,440 --> 00:47:33,280
Speaker 3: Bessont actually be in this incoming administration.

855
00:47:35,040 --> 00:47:37,319
Speaker 11: Well, the president is the president and the secretary is

856
00:47:37,360 --> 00:47:40,279
Speaker 11: just the secretary. I think Scott Messon is obviously a

857
00:47:40,360 --> 00:47:47,799
Speaker 11: very experienced market savvy investor who can at least give

858
00:47:47,840 --> 00:47:50,840
Speaker 11: the president advice on how markets will react to certain

859
00:47:50,880 --> 00:47:53,319
Speaker 11: things that he is doing. And the President obviously does

860
00:47:53,360 --> 00:47:55,600
Speaker 11: care about that because he talks about certainly the stock

861
00:47:55,640 --> 00:47:57,680
Speaker 11: market as one of the measures of.

862
00:47:57,600 --> 00:48:00,680
Speaker 5: His success or the success of his presidency. So I'm

863
00:48:00,680 --> 00:48:01,680
Speaker 5: sure that is part of it.

864
00:48:01,719 --> 00:48:04,200
Speaker 11: One only wishes one could be in the room to

865
00:48:04,320 --> 00:48:09,879
Speaker 11: know just how much Scott Bessont was part of this

866
00:48:10,080 --> 00:48:13,839
Speaker 11: announcement or whether you know, welcome to the team. This

867
00:48:13,880 --> 00:48:16,960
Speaker 11: is our first move, and whether he's going to be

868
00:48:19,120 --> 00:48:22,680
Speaker 11: trying to catch up with the president and the trade

869
00:48:23,480 --> 00:48:25,640
Speaker 11: agenda but we'll have to see how that plays out.

870
00:48:25,719 --> 00:48:29,360
Speaker 11: As you recall, Secretary Mnuchin was a moderating impact on

871
00:48:29,440 --> 00:48:33,480
Speaker 11: a lot of the trade tariff agenda in the president

872
00:48:33,480 --> 00:48:34,520
Speaker 11: in President Trump's.

873
00:48:34,200 --> 00:48:37,640
Speaker 3: First term, there's also a question not just of the

874
00:48:37,719 --> 00:48:40,000
Speaker 3: role besst will play in trade policy, but also what

875
00:48:40,120 --> 00:48:42,680
Speaker 3: role of any he would play on applying pressure to

876
00:48:43,000 --> 00:48:46,600
Speaker 3: the independent Federal Reserve, because he certainly has thoughts about that.

877
00:48:46,640 --> 00:48:49,320
Speaker 3: In fact, he shared some with the host of Bloomberg

878
00:48:49,360 --> 00:48:52,200
Speaker 3: Wall Street Week, David weston just this summer. Take a listen.

879
00:48:52,920 --> 00:48:55,640
Speaker 7: Let's go back to the original sin, the original sin

880
00:48:55,719 --> 00:48:59,640
Speaker 7: and the independence of the FED. J. Powell's reappointment was

881
00:48:59,680 --> 00:49:03,560
Speaker 7: the latest this century for a FED chair. Latest is century,

882
00:49:03,840 --> 00:49:07,520
Speaker 7: and I think that that is what stoked or certainly

883
00:49:08,239 --> 00:49:14,359
Speaker 7: they accelerated the inflation at Jackson Hole August twenty twenty one.

884
00:49:14,400 --> 00:49:16,439
Speaker 7: You go back and read J. Powell's speech. He knew

885
00:49:16,440 --> 00:49:21,920
Speaker 7: inflation was hot. Biden administration did not announce his reappointment

886
00:49:22,239 --> 00:49:25,760
Speaker 7: until November, so they had him under the thumb.

887
00:49:26,560 --> 00:49:27,239
Speaker 2: He could have been a.

888
00:49:27,160 --> 00:49:31,280
Speaker 7: Good patriot and risk his job and started raising raids,

889
00:49:31,320 --> 00:49:32,480
Speaker 7: but he didn't.

890
00:49:34,640 --> 00:49:37,279
Speaker 3: And that maybe gets best into this notion He's put

891
00:49:37,320 --> 00:49:40,600
Speaker 3: forward of a shadow FED chair Christopher all of it, though,

892
00:49:40,640 --> 00:49:42,880
Speaker 3: as we're now less than ten minutes away from the

893
00:49:42,880 --> 00:49:45,520
Speaker 3: minutes of the fed's latest meeting, raises the question on

894
00:49:45,560 --> 00:49:50,040
Speaker 3: the trajectory or trajectory rather of monetary policy as we

895
00:49:50,080 --> 00:49:52,840
Speaker 3: move forward into the next four years.

896
00:49:55,080 --> 00:49:57,640
Speaker 11: Yeah, and I think Scott Beston is back to way

897
00:49:57,640 --> 00:50:00,560
Speaker 11: a little bit from those remarks since then. Obviously very

898
00:50:00,560 --> 00:50:03,719
Speaker 11: concerning for those who want the Fed's independence to be

899
00:50:03,760 --> 00:50:07,520
Speaker 11: protected and reinforced, and I think most independent investors, certainly

900
00:50:07,520 --> 00:50:09,839
Speaker 11: global investors, expect that to continue.

901
00:50:10,719 --> 00:50:12,439
Speaker 5: And I think it's also worth giving him.

902
00:50:12,320 --> 00:50:15,480
Speaker 11: The benefit of the doubt to actually be enshrined as

903
00:50:15,520 --> 00:50:18,840
Speaker 11: Treasury Secretary and to reiterate, reiterate his views on that question.

904
00:50:18,880 --> 00:50:21,000
Speaker 11: I think once you are in office and you have

905
00:50:21,080 --> 00:50:25,080
Speaker 11: those responsibilities, you may not be you'll feel a little

906
00:50:25,080 --> 00:50:27,280
Speaker 11: bit more constrained about you what you want to say

907
00:50:27,400 --> 00:50:29,600
Speaker 11: about the FED.

908
00:50:29,600 --> 00:50:30,320
Speaker 5: Once you start.

909
00:50:30,480 --> 00:50:33,080
Speaker 11: Once people start feeling like you have influence over the

910
00:50:33,120 --> 00:50:36,320
Speaker 11: fed's policy, then you also become responsible for it. And

911
00:50:36,360 --> 00:50:38,759
Speaker 11: I think that's part of the double edged sword of

912
00:50:38,920 --> 00:50:42,880
Speaker 11: FED independence. If they get things wrong, you can disown

913
00:50:42,920 --> 00:50:46,000
Speaker 11: them while it is going wrong until it gets back

914
00:50:46,000 --> 00:50:46,759
Speaker 11: on track.

915
00:50:47,000 --> 00:50:48,600
Speaker 5: So we'll watch that story play out.

916
00:50:48,680 --> 00:50:51,520
Speaker 11: My expectations once he gets into office, he'll play a

917
00:50:51,600 --> 00:50:54,560
Speaker 11: much more conventional role given his experience with markets.

918
00:50:54,560 --> 00:50:57,319
Speaker 5: But we'll be watching that one closely well.

919
00:50:57,360 --> 00:50:59,520
Speaker 3: And the Fed gets to make one more rate decision

920
00:50:59,560 --> 00:51:02,759
Speaker 3: before Donald Trump takes office. There's a decision coming up

921
00:51:02,800 --> 00:51:04,440
Speaker 3: in just a few weeks. Christopher and a lot of

922
00:51:04,480 --> 00:51:06,359
Speaker 3: people are looking to the minutes we're about to get

923
00:51:06,360 --> 00:51:09,239
Speaker 3: as a signal potentially on what that move is going

924
00:51:09,320 --> 00:51:11,360
Speaker 3: to be as we await them. What will you be

925
00:51:11,440 --> 00:51:14,200
Speaker 3: looking for and what's your call on December right now?

926
00:51:16,160 --> 00:51:17,799
Speaker 11: Well, I think my call on December would be another

927
00:51:17,800 --> 00:51:19,320
Speaker 11: twenty five basis points. I think it would be a

928
00:51:19,360 --> 00:51:22,520
Speaker 11: little bit odd for them to stop now, and it

929
00:51:22,600 --> 00:51:25,360
Speaker 11: might start looking a little bit political if they're looking ahead.

930
00:51:25,440 --> 00:51:27,160
Speaker 11: They say they don't, and I believe that they don't.

931
00:51:27,600 --> 00:51:29,840
Speaker 11: But if they were to sort of start front running

932
00:51:29,960 --> 00:51:35,120
Speaker 11: potential legislative changes, tax changes next year and pausing on

933
00:51:35,160 --> 00:51:37,600
Speaker 11: their rate cut path, I think one more this year

934
00:51:37,719 --> 00:51:40,560
Speaker 11: probably gives them a little bit of room to pause

935
00:51:40,600 --> 00:51:43,560
Speaker 11: going into next year. In terms of the minutes, Kelly,

936
00:51:43,640 --> 00:51:45,800
Speaker 11: with all due respect, this seems you know the minutes

937
00:51:45,880 --> 00:51:48,960
Speaker 11: story is one of the least interesting ones to me

938
00:51:49,040 --> 00:51:51,359
Speaker 11: as somebody who watches the FED. I mean, is it's

939
00:51:51,400 --> 00:51:54,560
Speaker 11: two week old news about people talking about two month

940
00:51:54,600 --> 00:51:57,319
Speaker 11: old data, and so I'm not sure it really gives

941
00:51:57,360 --> 00:51:58,960
Speaker 11: us a whole lot of insight into what the FED

942
00:51:59,040 --> 00:52:02,520
Speaker 11: is going to do this time around, and certainly that

943
00:52:03,320 --> 00:52:07,400
Speaker 11: plus President Biden's Rose Garden announcement is going to overshadow

944
00:52:07,440 --> 00:52:09,200
Speaker 11: anything that might come out in the minutes.

945
00:52:10,880 --> 00:52:14,279
Speaker 3: You're sounding suspiciously like my colleague Tom Keene, who has

946
00:52:14,320 --> 00:52:16,520
Speaker 3: some pretty choice thoughts on the FED minutes every time

947
00:52:16,520 --> 00:52:19,160
Speaker 3: they come out. Christopher, I'm glad that you raise what

948
00:52:19,200 --> 00:52:22,360
Speaker 3: we are expecting. It is a compliment, it is intended

949
00:52:22,480 --> 00:52:25,759
Speaker 3: as one. But you raise the fact that we are

950
00:52:25,800 --> 00:52:28,319
Speaker 3: expecting to hear from President Biden just over half an

951
00:52:28,320 --> 00:52:30,600
Speaker 3: hour from now, speaking from the Rose Garden. We expect

952
00:52:30,640 --> 00:52:32,880
Speaker 3: that may pertain to what's going on in the Middle

953
00:52:32,920 --> 00:52:35,840
Speaker 3: East and relate to foreign policy, but it's also a

954
00:52:35,880 --> 00:52:38,200
Speaker 3: reflection on this as a president now reflecting on his

955
00:52:38,320 --> 00:52:41,440
Speaker 3: legacy with just fifty five days left to go in office,

956
00:52:41,480 --> 00:52:45,400
Speaker 3: when you consider his economic legacy, Christopher, how would you

957
00:52:45,400 --> 00:52:45,960
Speaker 3: describe it?

958
00:52:48,520 --> 00:52:53,439
Speaker 11: Well, I think it's obviously going to be shaped by

959
00:52:53,480 --> 00:52:55,760
Speaker 11: people's use of inflation, and the loss of this election

960
00:52:55,920 --> 00:52:59,520
Speaker 11: by the Democratic nominee is directly related to those higher prices.

961
00:52:59,520 --> 00:53:00,799
Speaker 11: But I think if if you take it back to

962
00:53:00,840 --> 00:53:03,239
Speaker 11: look at the context of what he has done both

963
00:53:03,280 --> 00:53:06,279
Speaker 11: in the moment cyclically to dig us out of the

964
00:53:06,880 --> 00:53:11,839
Speaker 11: whole from the COVID pandemic, but also to structurally put

965
00:53:11,880 --> 00:53:17,640
Speaker 11: in place policies that reinforce phil if you will market

966
00:53:17,640 --> 00:53:25,120
Speaker 11: failures around climate development, around technology innovation, around our supply

967
00:53:25,200 --> 00:53:28,240
Speaker 11: of chips in the United States, I think that will

968
00:53:28,320 --> 00:53:31,919
Speaker 11: reflect very well on his legacy when historians look back.

969
00:53:32,680 --> 00:53:34,760
Speaker 5: This is a moment where he really has.

970
00:53:34,680 --> 00:53:38,640
Speaker 11: Invested in the next stage of US economic growth. And

971
00:53:39,400 --> 00:53:44,040
Speaker 11: in spite of what inflation is and people feel it

972
00:53:44,080 --> 00:53:46,520
Speaker 11: to be, inflation has actually been coming down.

973
00:53:46,560 --> 00:53:49,160
Speaker 5: As you know, It's just not necessarily reflecting a very.

974
00:53:49,040 --> 00:53:50,399
Speaker 10: Good point see at the start.

975
00:53:50,719 --> 00:53:53,280
Speaker 3: Christopher Smart, thank you for joining me here on Balance

976
00:53:53,320 --> 00:53:57,200
Speaker 3: of Power. This is Bloomberg TV and Radio.

977
00:54:00,239 --> 00:54:02,640
Speaker 10: Thanks for listening to the Balance of Power podcast.

978
00:54:03,280 --> 00:54:06,960
Speaker 1: Make sure to subscribe if you haven't already, at Apple, Spotify.

979
00:54:06,520 --> 00:54:09,080
Speaker 11: Or wherever you get your podcasts, and you can find

980
00:54:09,160 --> 00:54:11,239
Speaker 11: us live every weekday from Washington, d C.

981
00:54:11,400 --> 00:54:14,080
Speaker 10: At noontime, Eastern at Bloomberg dot com