1
00:00:02,520 --> 00:00:10,119
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

2
00:00:10,119 --> 00:00:13,880
Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

3
00:00:13,920 --> 00:00:17,119
Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android

4
00:00:17,160 --> 00:00:20,520
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

5
00:00:20,600 --> 00:00:25,080
Speaker 1: you get your podcasts, or watch us live on YouTube.

6
00:00:25,680 --> 00:00:28,280
Speaker 2: You've heard from Jamie Dimond and talked about stormy seas

7
00:00:28,400 --> 00:00:30,280
Speaker 2: in the markets in part because of the confusion the

8
00:00:30,360 --> 00:00:33,959
Speaker 2: uncertainty about these tariffs policies. We heard from Michael Falkunder

9
00:00:34,000 --> 00:00:36,120
Speaker 2: this morning. He's the Deputy Treasury Secretary and was on

10
00:00:36,120 --> 00:00:39,400
Speaker 2: Bloomberg Surveillance talking about what the White House is waiting for.

11
00:00:40,240 --> 00:00:44,080
Speaker 3: We are looking for China to pull back on its

12
00:00:44,120 --> 00:00:47,159
Speaker 3: tariff retaliation and to come to the table. We are

13
00:00:47,159 --> 00:00:49,280
Speaker 3: looking for them to work with us in order to

14
00:00:49,360 --> 00:00:54,040
Speaker 3: create an environment whereby we can address these vulnerabilities, where

15
00:00:54,080 --> 00:00:58,880
Speaker 3: they can come to the table and equitably address these

16
00:00:59,640 --> 00:01:02,920
Speaker 3: long standing issues that have given them an unfair advantage.

17
00:01:04,840 --> 00:01:07,920
Speaker 4: Not sure China raising its retaliatory terror freight on US

18
00:01:08,000 --> 00:01:10,120
Speaker 4: imports to one hundred and twenty five percent could be

19
00:01:10,160 --> 00:01:13,320
Speaker 4: easily classified as the pulling back that the White House

20
00:01:13,400 --> 00:01:15,720
Speaker 4: was looking for, but that is indeed what we got today,

21
00:01:15,720 --> 00:01:17,560
Speaker 4: and we want to get more now with Jordan Fabian,

22
00:01:17,600 --> 00:01:20,080
Speaker 4: who covers the White House for us here at Bloomberg

23
00:01:20,080 --> 00:01:21,720
Speaker 4: and U is here with us in our Washington, d C.

24
00:01:21,880 --> 00:01:22,280
Speaker 5: Studio.

25
00:01:22,360 --> 00:01:24,880
Speaker 4: So Jordan, the President, President Trump that is, has made

26
00:01:24,920 --> 00:01:27,080
Speaker 4: it very clear that he is willing to talk to

27
00:01:27,160 --> 00:01:29,800
Speaker 4: President She. But the signals we're getting from China is

28
00:01:29,840 --> 00:01:32,240
Speaker 4: not that they're ready to talk. They're still in fight mode.

29
00:01:32,280 --> 00:01:35,600
Speaker 6: It seems that's right. You saw that with the retaliation.

30
00:01:35,959 --> 00:01:39,560
Speaker 7: They put some restrictions on Hollywood films even and suggested

31
00:01:39,600 --> 00:01:42,800
Speaker 7: they could retaliate against other sectors. So you basically have

32
00:01:42,880 --> 00:01:45,679
Speaker 7: an unstoppable force meeting in a movable object, and there

33
00:01:45,720 --> 00:01:48,400
Speaker 7: doesn't seem to be an end in sight. The President

34
00:01:48,400 --> 00:01:51,680
Speaker 7: in fact indicating publicly that he wants she to call

35
00:01:51,760 --> 00:01:54,000
Speaker 7: him first, and g is saying no thanks.

36
00:01:54,840 --> 00:01:57,640
Speaker 2: Peter Navarro, one of the President's counselors, is branding this

37
00:01:57,720 --> 00:01:59,960
Speaker 2: is ninety Deals in ninety Days, the name that would

38
00:02:00,080 --> 00:02:03,520
Speaker 2: make Murph Griffin happy, I think in terms of its tone.

39
00:02:03,600 --> 00:02:05,240
Speaker 2: Where are we in this process? We've heard over the

40
00:02:05,320 --> 00:02:07,800
Speaker 2: last few days there's been a lot of phone calls

41
00:02:07,800 --> 00:02:10,600
Speaker 2: coming in their plans for trips people coming to Washington.

42
00:02:10,600 --> 00:02:12,839
Speaker 2: Obviously the Treasury sectory running to leave on a trip. Where

43
00:02:12,840 --> 00:02:14,919
Speaker 2: does that stand in how are they prioritizing those conversations.

44
00:02:14,960 --> 00:02:16,480
Speaker 7: I think we're one or two days past this and

45
00:02:16,520 --> 00:02:19,560
Speaker 7: we're at zero deals. So that's quite the pace that

46
00:02:19,880 --> 00:02:21,119
Speaker 7: mister Davarro has laid out.

47
00:02:21,320 --> 00:02:21,760
Speaker 6: I want to.

48
00:02:21,720 --> 00:02:25,960
Speaker 7: Remind viewers that these trade deals are extremely complex vehicles.

49
00:02:26,000 --> 00:02:28,720
Speaker 7: I mean, these often take years. I'm thinking I covered

50
00:02:28,760 --> 00:02:31,680
Speaker 7: the South Korea US negotiations of a President Obama. That's

51
00:02:31,720 --> 00:02:34,360
Speaker 7: something that took years and years to hammer out. And

52
00:02:34,440 --> 00:02:37,600
Speaker 7: so they have this sort of damnically is hanging over

53
00:02:37,639 --> 00:02:39,639
Speaker 7: them where these tariffs are going to go back into

54
00:02:39,639 --> 00:02:42,520
Speaker 7: place for all the other training partners on July ninth,

55
00:02:42,600 --> 00:02:45,200
Speaker 7: which puts a tremendous amount of pressure to read some

56
00:02:45,320 --> 00:02:47,080
Speaker 7: kind of deal. So I would assume there may be

57
00:02:47,200 --> 00:02:52,840
Speaker 7: some kind of deal in principle before maybe another specific

58
00:02:52,880 --> 00:02:55,120
Speaker 7: deal is reached, but it's really unclear at the moment.

59
00:02:55,680 --> 00:02:57,880
Speaker 4: Well, and is it clear that other countries are taking

60
00:02:57,960 --> 00:03:01,040
Speaker 4: the administration seriously in terms of the threat to enact

61
00:03:01,080 --> 00:03:03,560
Speaker 4: tariffs on ninth if there is no deal reach. I

62
00:03:03,639 --> 00:03:06,560
Speaker 4: just wonder about the leverage the opposing sides will have

63
00:03:06,600 --> 00:03:09,320
Speaker 4: against the White House, knowing how easily President Trump has

64
00:03:09,360 --> 00:03:13,960
Speaker 4: proven to alter course on things like import taxes.

65
00:03:14,320 --> 00:03:17,000
Speaker 7: This is the big problem right with President Trump's reversal,

66
00:03:17,120 --> 00:03:20,000
Speaker 7: is that him and his allies are claiming, you know,

67
00:03:20,040 --> 00:03:21,560
Speaker 7: this is the art of the deal. He now has

68
00:03:21,600 --> 00:03:25,600
Speaker 7: this extreme leverage over trading partners. But to your point, Kaylee,

69
00:03:26,400 --> 00:03:28,720
Speaker 7: if he's proven to change his mind on a whim,

70
00:03:28,760 --> 00:03:31,639
Speaker 7: In fact, he said to reporters he's judging this all

71
00:03:31,680 --> 00:03:34,360
Speaker 7: on instinct. If his instinct that July ninth is I

72
00:03:34,360 --> 00:03:36,880
Speaker 7: shouldn't go ahead with this, why should they believe he's

73
00:03:36,920 --> 00:03:38,720
Speaker 7: serious about imposing those tariffs.

74
00:03:38,840 --> 00:03:40,840
Speaker 2: I don't want to make you look into a crystal ball,

75
00:03:40,880 --> 00:03:42,760
Speaker 2: but on the campaign trail, we heard a lot from

76
00:03:42,760 --> 00:03:45,440
Speaker 2: the President about a universal tariff, and it strikes me

77
00:03:45,480 --> 00:03:47,800
Speaker 2: as I hear you talk about the difficulty in detail

78
00:03:47,800 --> 00:03:50,320
Speaker 2: that goes into each of these negotiations, At least historically,

79
00:03:50,640 --> 00:03:52,640
Speaker 2: it would be a lot easier for the President to

80
00:03:52,680 --> 00:03:54,760
Speaker 2: do that. Is there any conversations there any way that

81
00:03:54,760 --> 00:03:57,360
Speaker 2: this ends up with just a ten percent across the

82
00:03:57,360 --> 00:03:59,880
Speaker 2: board tariff or are they really wedded to this idea

83
00:04:00,120 --> 00:04:02,920
Speaker 2: doing this as they say more narrowly tailored set of deals.

84
00:04:03,240 --> 00:04:05,080
Speaker 6: It could very well end up being that way.

85
00:04:05,120 --> 00:04:07,840
Speaker 7: And I'll remind people that those ten percent tariffs are

86
00:04:07,880 --> 00:04:11,280
Speaker 7: still in place. I know the market reacted with euphoria

87
00:04:11,760 --> 00:04:13,920
Speaker 7: with the climb down from these higher rates, but they're

88
00:04:13,920 --> 00:04:17,000
Speaker 7: still in across the board tariff on all trading partners

89
00:04:17,000 --> 00:04:21,400
Speaker 7: and one hundred and forty tariff on China. That's tremendous change.

90
00:04:21,480 --> 00:04:23,880
Speaker 7: And so even if those were to could stay in

91
00:04:23,920 --> 00:04:26,359
Speaker 7: place going forward, you know, these are terif rates that

92
00:04:26,360 --> 00:04:30,279
Speaker 7: are ten times the average US terraforate that existed last year.

93
00:04:30,400 --> 00:04:32,960
Speaker 7: So yeah, I'm not sure how markets would take that

94
00:04:33,240 --> 00:04:34,559
Speaker 7: even if that were to take place.

95
00:04:34,720 --> 00:04:37,000
Speaker 4: Well, and that's before we even get to the sectoral tariffs.

96
00:04:37,040 --> 00:04:39,239
Speaker 4: You still have twenty five percent tariffs on auto imports,

97
00:04:39,279 --> 00:04:41,839
Speaker 4: on steel and aluminum imports, and the President has made

98
00:04:41,839 --> 00:04:45,680
Speaker 4: clear he's still looking at things like pharmaceuticals, chips, possibly lumber,

99
00:04:45,760 --> 00:04:47,880
Speaker 4: and copper. Do we have any sense, Jordan, of when

100
00:04:47,920 --> 00:04:49,640
Speaker 4: that shoe might drop?

101
00:04:50,000 --> 00:04:54,040
Speaker 7: The President indicated this week that he you might announce

102
00:04:54,080 --> 00:04:58,839
Speaker 7: those pharmaceutical tariffs quite soon. As for the others, you know,

103
00:04:59,200 --> 00:05:01,400
Speaker 7: copper could come in May. I think that's when that

104
00:05:01,480 --> 00:05:05,240
Speaker 7: investigation is going to conclude. But all this adds up

105
00:05:05,279 --> 00:05:09,440
Speaker 7: to uncertainty. It's more uncertainty about his tariff plans. And again,

106
00:05:09,760 --> 00:05:11,840
Speaker 7: even if the higher rates don't go into place, Let's see,

107
00:05:11,839 --> 00:05:13,960
Speaker 7: you have that ten percent baseline, you have this high

108
00:05:14,040 --> 00:05:16,800
Speaker 7: rate on rate on China, They're going to go up

109
00:05:16,839 --> 00:05:20,000
Speaker 7: even more if he goes forward with these plans.

110
00:05:20,400 --> 00:05:22,200
Speaker 2: We learned this week what we've learned before that is

111
00:05:22,240 --> 00:05:24,640
Speaker 2: it all comes down to the man who's holding the

112
00:05:24,640 --> 00:05:27,560
Speaker 2: iPhone and issues the edict at the end. President Trump's

113
00:05:27,560 --> 00:05:29,039
Speaker 2: the one who put that pause and place in a

114
00:05:29,040 --> 00:05:31,520
Speaker 2: post on untruth social We kind of are looking to

115
00:05:31,520 --> 00:05:34,400
Speaker 2: see who's leading these negotiations, who's doing what is that

116
00:05:34,440 --> 00:05:36,839
Speaker 2: the Commerce Secretary of the Treasury Sectary is at the USTR.

117
00:05:38,080 --> 00:05:39,920
Speaker 2: Why would a country want to be what is a

118
00:05:39,920 --> 00:05:42,120
Speaker 2: country who's negotiating with the White House thinking if they're

119
00:05:42,120 --> 00:05:44,200
Speaker 2: talking to a Scott Besson or a Howard Lutnik, if

120
00:05:44,240 --> 00:05:45,719
Speaker 2: it really is going to come down to President Trump,

121
00:05:45,760 --> 00:05:47,719
Speaker 2: and what is your sense of his engagement with this process?

122
00:05:47,760 --> 00:05:48,600
Speaker 2: Kind of writ large.

123
00:05:48,960 --> 00:05:51,680
Speaker 7: It's a great point is that you have these people

124
00:05:51,760 --> 00:05:54,320
Speaker 7: like Bessett and Latnik who at least have some experience

125
00:05:54,360 --> 00:05:57,080
Speaker 7: in the financial field at the very least, and you

126
00:05:57,120 --> 00:05:59,720
Speaker 7: could have people like the Vietnamese deputy Prime minister who

127
00:05:59,720 --> 00:06:02,279
Speaker 7: came in this week to talk to the Treasury Secretary.

128
00:06:02,320 --> 00:06:03,520
Speaker 7: But at the end of the day, it's going to

129
00:06:03,560 --> 00:06:06,400
Speaker 7: be Trump again. He said he's deciding this on instinct.

130
00:06:06,680 --> 00:06:10,240
Speaker 7: He said this week that when he decided to issue

131
00:06:10,240 --> 00:06:12,680
Speaker 7: that tweet pulling back on the terraces, he did it

132
00:06:12,720 --> 00:06:14,400
Speaker 7: from the heart, and there were no lawyers present.

133
00:06:14,760 --> 00:06:15,120
Speaker 6: And so.

134
00:06:16,560 --> 00:06:19,000
Speaker 7: You're right, they could, you know, theoretically reach a deal

135
00:06:19,040 --> 00:06:21,359
Speaker 7: with Bessen. Besen gives it to Trump and he says

136
00:06:21,520 --> 00:06:26,400
Speaker 7: no thanks. And so that's something very difficult for other nations.

137
00:06:26,000 --> 00:06:28,520
Speaker 4: To grapple with just because you mentioned lawyers. And I

138
00:06:28,520 --> 00:06:30,480
Speaker 4: don't even think we talked about this yesterday in the

139
00:06:30,520 --> 00:06:33,120
Speaker 4: aftermath of the cabinet meeting the President held, but he

140
00:06:33,200 --> 00:06:35,840
Speaker 4: alluded to this notion that the agreements he's making with

141
00:06:35,880 --> 00:06:37,880
Speaker 4: all of these law firms who are trying to head off,

142
00:06:37,920 --> 00:06:41,040
Speaker 4: you know, potential retaliation from the administration to do hundreds

143
00:06:41,080 --> 00:06:43,320
Speaker 4: of millions of dollars in pro boner work, that somehow

144
00:06:43,360 --> 00:06:46,200
Speaker 4: those lawyers are going to be helping kind of craft

145
00:06:46,360 --> 00:06:48,680
Speaker 4: these trade deals. Is that actually how it gets done.

146
00:06:48,680 --> 00:06:52,000
Speaker 4: You recruit all the DC big law community to do this.

147
00:06:52,040 --> 00:06:52,640
Speaker 5: Work for you.

148
00:06:52,760 --> 00:06:55,560
Speaker 2: An expansive definition of pro bono I think by the president.

149
00:06:55,600 --> 00:06:59,920
Speaker 6: Indeed, yeah, the fact of government employees. No, it's not mean.

150
00:07:00,120 --> 00:07:03,840
Speaker 7: Usually these agreements are hammered out by the US trade representatives.

151
00:07:03,920 --> 00:07:08,000
Speaker 7: The Commerce Department will get involved, and they have all.

152
00:07:07,880 --> 00:07:09,479
Speaker 6: Kinds of subject matter experts on this.

153
00:07:09,600 --> 00:07:13,400
Speaker 7: It's very unusual to turn to the private sector big

154
00:07:13,480 --> 00:07:16,120
Speaker 7: law to do this. But listen, if he's hollowing out

155
00:07:16,160 --> 00:07:18,240
Speaker 7: the federal government, maybe some of those people aren't there.

156
00:07:18,360 --> 00:07:21,440
Speaker 2: I mean, he needs their help. A busy week when

157
00:07:21,440 --> 00:07:24,680
Speaker 2: we had this pause, obviously we had the executorder on

158
00:07:24,720 --> 00:07:27,080
Speaker 2: shower heads, all these marketing announcements from the White House.

159
00:07:27,080 --> 00:07:29,760
Speaker 2: There's also this budget agreement on the hill. What is

160
00:07:29,760 --> 00:07:31,480
Speaker 2: the president? What does the White House do now having

161
00:07:31,520 --> 00:07:33,600
Speaker 2: that enhanced, or how does this process look going forward?

162
00:07:33,600 --> 00:07:34,640
Speaker 2: The way that the White House is going to be

163
00:07:34,640 --> 00:07:38,200
Speaker 2: working with lawmakers on advancing his broader economic agenda as

164
00:07:38,240 --> 00:07:40,120
Speaker 2: this kind of roiling tariffs issue continues.

165
00:07:40,560 --> 00:07:43,560
Speaker 7: Well, you've heard him keep haranguing House Republican or Center

166
00:07:43,560 --> 00:07:46,440
Speaker 7: Republican lawmakers too. To get this quote one big, beautiful bill.

167
00:07:47,240 --> 00:07:49,680
Speaker 7: The problem with that is that's a very complex endeavor,

168
00:07:50,040 --> 00:07:53,080
Speaker 7: and he really needs that even more now that he's

169
00:07:53,120 --> 00:07:56,080
Speaker 7: done this tariff move to provide relief for Americans who

170
00:07:56,080 --> 00:07:58,720
Speaker 7: are about to get hit with higher prices as a result

171
00:07:58,760 --> 00:08:01,440
Speaker 7: of these teriffs. To mention the fact that the debt

172
00:08:01,440 --> 00:08:05,840
Speaker 7: ceiling is coming up some time later this year July August.

173
00:08:06,040 --> 00:08:08,960
Speaker 7: So that sounds like a lot of time in Congress,

174
00:08:09,000 --> 00:08:11,720
Speaker 7: that's not a lot of time, and so he needs

175
00:08:11,760 --> 00:08:12,760
Speaker 7: them to come together quickly.

176
00:08:12,880 --> 00:08:15,480
Speaker 6: You know, the Republicans have proven their fractious within.

177
00:08:15,360 --> 00:08:17,440
Speaker 7: Their own ranks, so they really need to come to

178
00:08:17,520 --> 00:08:20,080
Speaker 7: agreement on some of those key issues on tax But is.

179
00:08:20,040 --> 00:08:22,800
Speaker 4: It possible that for all of his rhetoric around promises made,

180
00:08:22,920 --> 00:08:25,640
Speaker 4: promises kept, what he said on the cam campaign trail

181
00:08:25,680 --> 00:08:28,080
Speaker 4: comes true in real life. It's really up to Congress

182
00:08:28,080 --> 00:08:30,640
Speaker 4: now to decide whether or not a lot of that happens.

183
00:08:30,640 --> 00:08:32,760
Speaker 4: When it comes to no tax on tips and social security,

184
00:08:32,800 --> 00:08:34,559
Speaker 4: there is a risk, right that the president doesn't get

185
00:08:34,559 --> 00:08:35,480
Speaker 4: everything he's asked for.

186
00:08:35,880 --> 00:08:36,400
Speaker 6: Absolutely.

187
00:08:36,480 --> 00:08:38,520
Speaker 7: I mean, those are a lot of pine the sky

188
00:08:39,000 --> 00:08:43,000
Speaker 7: s and some of them aren't popular with Republicans.

189
00:08:43,000 --> 00:08:45,880
Speaker 6: There was this idea that he floated about raising.

190
00:08:47,080 --> 00:08:50,160
Speaker 7: Taxes for wealthy Americans, which has been anathema to Republicans

191
00:08:50,200 --> 00:08:53,520
Speaker 7: for decades. And so yeah, he doesn't get as much

192
00:08:53,559 --> 00:08:56,080
Speaker 7: as he wants. You know, revenue comes down, you have

193
00:08:56,600 --> 00:08:58,920
Speaker 7: Americans paying higher prices, you end up running into a

194
00:08:58,960 --> 00:09:01,120
Speaker 7: lot of problems. Not to mention, these tariffs are really

195
00:09:01,120 --> 00:09:04,120
Speaker 7: straining Republican loyalty right now. So for him to then

196
00:09:04,240 --> 00:09:06,559
Speaker 7: come to come to them with these ass is a

197
00:09:06,600 --> 00:09:07,640
Speaker 7: lot for them to take joy.

198
00:09:07,679 --> 00:09:09,559
Speaker 2: Great to speak with you, Thank you very much. Jordan Fabian,

199
00:09:09,600 --> 00:09:11,400
Speaker 2: White House editor here at Bloomberg News and Kayla, we

200
00:09:11,440 --> 00:09:14,280
Speaker 2: have the president now making his way to get his

201
00:09:14,280 --> 00:09:16,240
Speaker 2: annual physical. I guess that's on his agenda here before

202
00:09:16,240 --> 00:09:18,520
Speaker 2: the plan takes off for South Florida later today.

203
00:09:18,960 --> 00:09:19,560
Speaker 5: Gotta check in.

204
00:09:19,720 --> 00:09:21,840
Speaker 4: Walter read the first annual physical, of course of his

205
00:09:22,320 --> 00:09:24,440
Speaker 4: second term. That the president has long argued that he

206
00:09:24,520 --> 00:09:25,960
Speaker 4: is in perfect health.

207
00:09:26,000 --> 00:09:27,480
Speaker 5: I think he's called the healthiest president.

208
00:09:28,120 --> 00:09:30,520
Speaker 2: Called medical resignation.

209
00:09:30,640 --> 00:09:31,839
Speaker 5: Yeah, we'll leave that to the doctor.

210
00:09:32,040 --> 00:09:34,480
Speaker 2: Headline crossing here, I am a Republican governor, Kim Reynolds

211
00:09:34,480 --> 00:09:37,040
Speaker 2: announcing she will not seek reelection in twenty twenty six.

212
00:09:37,679 --> 00:09:40,079
Speaker 2: Continue to monitor that much more here as Balance of

213
00:09:40,080 --> 00:09:42,720
Speaker 2: Power continues. On Bloomberg Radio and on YouTube.

214
00:09:44,920 --> 00:09:48,400
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

215
00:09:48,480 --> 00:09:51,320
Speaker 1: us live weekdays at noon and five pm. He's durn

216
00:09:51,440 --> 00:09:54,880
Speaker 1: on Apple Cockley and Android Auto with the Bloomberg Business App.

217
00:09:54,920 --> 00:09:57,959
Speaker 1: You can also listen live on Amazon Alexa from our

218
00:09:58,000 --> 00:10:01,760
Speaker 1: flagship New York station Just It's a Alexa played Bloomberg

219
00:10:01,800 --> 00:10:04,400
Speaker 1: eleven thirty the Markets.

220
00:10:04,440 --> 00:10:07,560
Speaker 4: Watch each and every true social post and listen to

221
00:10:07,600 --> 00:10:10,120
Speaker 4: every word uttered by President Trump. As this has been

222
00:10:10,160 --> 00:10:12,600
Speaker 4: a wild week when it comes to tariffs, A lot

223
00:10:12,640 --> 00:10:14,520
Speaker 4: has changed, but the thing that remains the same is

224
00:10:14,559 --> 00:10:16,480
Speaker 4: that the focal point of this trade war seems to

225
00:10:16,480 --> 00:10:19,520
Speaker 4: be between the world's two largest economies. This has come

226
00:10:19,559 --> 00:10:22,400
Speaker 4: down in large part to the US and China. After

227
00:10:22,520 --> 00:10:24,880
Speaker 4: China today made the decision after the White House is

228
00:10:24,880 --> 00:10:27,800
Speaker 4: clarity yesterday that one hundred and forty five percent at

229
00:10:27,880 --> 00:10:31,000
Speaker 4: least tariff rate is now in effect for all Chinese imports.

230
00:10:31,240 --> 00:10:33,720
Speaker 4: China raised its own retaliatory rate to one hundred and

231
00:10:33,760 --> 00:10:37,480
Speaker 4: twenty five percent, suggesting they won't even bother raising tariffs

232
00:10:37,480 --> 00:10:39,719
Speaker 4: any higher than that. Is any further escalation in their

233
00:10:39,720 --> 00:10:42,959
Speaker 4: mind from the Trump administration would be considered a joke.

234
00:10:43,360 --> 00:10:47,120
Speaker 4: The Chinese government, though, is still vowing to fight to

235
00:10:47,240 --> 00:10:51,080
Speaker 4: the end, saying they'll use other countermeasures if necessary, even

236
00:10:51,080 --> 00:10:53,959
Speaker 4: as President Trump suggests he wants to make a deal.

237
00:10:54,880 --> 00:10:58,520
Speaker 8: Well, see what happens with China. We would love to

238
00:10:58,600 --> 00:11:03,800
Speaker 8: be able to work a deal. They've really taken advantage

239
00:11:03,840 --> 00:11:05,760
Speaker 8: of our country for a long period of time. We're

240
00:11:05,760 --> 00:11:10,480
Speaker 8: resetting the table and I'm sure that we'll be able

241
00:11:10,520 --> 00:11:12,679
Speaker 8: to get along very well. I have great respect for

242
00:11:12,800 --> 00:11:16,079
Speaker 8: President She's been in a true sense, he's been a

243
00:11:16,120 --> 00:11:18,679
Speaker 8: friend of mine for a long period of time, and

244
00:11:18,720 --> 00:11:21,839
Speaker 8: I think that we'll end up working out something that's

245
00:11:21,960 --> 00:11:24,000
Speaker 8: very good for both countries.

246
00:11:25,559 --> 00:11:28,160
Speaker 2: Well, with friends like that, who needs enemies that President

247
00:11:28,200 --> 00:11:30,560
Speaker 2: Trump there at the cabinet meeting yesterday, Christopher Smart joins

248
00:11:30,600 --> 00:11:33,120
Speaker 2: us now. He's managing partner at our growth and we're

249
00:11:33,160 --> 00:11:35,400
Speaker 2: drawing on his experience both the National Security Council and

250
00:11:35,400 --> 00:11:38,079
Speaker 2: the National Economic Council during the Obama administration, where he

251
00:11:38,120 --> 00:11:40,440
Speaker 2: worked an awful lot on trade issues. Thank you very

252
00:11:40,480 --> 00:11:42,319
Speaker 2: much for being here, And I'm wonder sort of how

253
00:11:42,360 --> 00:11:44,080
Speaker 2: you see all of this playing out there is the

254
00:11:44,160 --> 00:11:46,720
Speaker 2: kind of long waiting period we're in now where we

255
00:11:46,760 --> 00:11:48,960
Speaker 2: have the White House waiting for a call from Raijing,

256
00:11:49,400 --> 00:11:52,280
Speaker 2: presumably looking at sort of how this has ratcheted up

257
00:11:52,320 --> 00:11:54,319
Speaker 2: where things stand. What do you see as the next

258
00:11:54,320 --> 00:11:55,520
Speaker 2: steps in the States?

259
00:11:57,240 --> 00:11:58,719
Speaker 9: Well, could be with you, I mean, as you say,

260
00:11:58,720 --> 00:12:04,480
Speaker 9: with friends like that, who needs adversaries. The thing I

261
00:12:04,480 --> 00:12:06,840
Speaker 9: think that is spooking markets right now is that, on

262
00:12:06,920 --> 00:12:09,080
Speaker 9: top of all of the other uncertainty, we finally have

263
00:12:09,200 --> 00:12:12,559
Speaker 9: this US China confrontation that frankly we had been expecting

264
00:12:12,679 --> 00:12:16,200
Speaker 9: since the first day of the Trump administration, and with

265
00:12:16,280 --> 00:12:19,480
Speaker 9: all of the distractions around Canada and Mexico, is always

266
00:12:19,520 --> 00:12:21,880
Speaker 9: on the back burner until all of a sudden Wednesday,

267
00:12:22,600 --> 00:12:25,440
Speaker 9: these tariffs were ratcheted up to sky high levels. And

268
00:12:25,520 --> 00:12:28,760
Speaker 9: as our Chinese counterparts point out, there's not much of

269
00:12:28,760 --> 00:12:30,960
Speaker 9: a difference between one hundred and twenty five and one

270
00:12:31,040 --> 00:12:33,720
Speaker 9: hundred and forty five. It's hard right now to see

271
00:12:33,720 --> 00:12:35,040
Speaker 9: what the off ramps are going to be on this

272
00:12:35,080 --> 00:12:39,680
Speaker 9: particular bilateral relationship. President says he wants to do a deal,

273
00:12:39,760 --> 00:12:42,120
Speaker 9: but you know, again, when it gets to you know,

274
00:12:42,160 --> 00:12:45,000
Speaker 9: the other guy's got got to call me first. It's

275
00:12:45,040 --> 00:12:46,800
Speaker 9: not quite clear the other guy's ready to do that.

276
00:12:48,240 --> 00:12:51,360
Speaker 4: Well, to your exact point, Christopher, this notion that China

277
00:12:51,360 --> 00:12:54,120
Speaker 4: has suggested any further ratcheting up of tariffs would be

278
00:12:54,200 --> 00:12:57,360
Speaker 4: economically meaningless, does that mean that there was a ceiling

279
00:12:57,679 --> 00:12:59,440
Speaker 4: to hit there in terms of what would already be

280
00:12:59,480 --> 00:13:02,240
Speaker 4: the complete instruction of the US China trading relationship, And

281
00:13:02,240 --> 00:13:03,400
Speaker 4: we've already hit that ceiling.

282
00:13:05,320 --> 00:13:09,440
Speaker 9: Well, it's hard to imagine a product that is still

283
00:13:09,440 --> 00:13:11,640
Speaker 9: profitable to ship at one hundred and twenty five percent

284
00:13:11,679 --> 00:13:14,559
Speaker 9: tariff that is no longer profitable at one hundred and

285
00:13:14,600 --> 00:13:18,200
Speaker 9: forty five. So I think effectively, you know, when you

286
00:13:18,240 --> 00:13:21,280
Speaker 9: more than double the price of anything, it's very hard

287
00:13:21,360 --> 00:13:23,760
Speaker 9: to continue that relationship. And I think you've already seen

288
00:13:23,800 --> 00:13:30,640
Speaker 9: early reports of shipping companies shutting down, traffic diverted in midstream,

289
00:13:30,840 --> 00:13:33,439
Speaker 9: and all of that is beginning to unravel right now.

290
00:13:33,640 --> 00:13:35,960
Speaker 9: The real concern is if this goes on for more

291
00:13:36,000 --> 00:13:38,720
Speaker 9: than a few days. You know, President seems to be

292
00:13:38,760 --> 00:13:42,640
Speaker 9: quite nimble in terms of changing his posture, but if

293
00:13:42,679 --> 00:13:44,920
Speaker 9: this goes on more than a few days or weeks,

294
00:13:45,320 --> 00:13:47,400
Speaker 9: you know, we're more likely to get locked into something

295
00:13:47,480 --> 00:13:48,880
Speaker 9: that's going to continue for some time.

296
00:13:50,320 --> 00:13:52,440
Speaker 2: I have a definitional question, and that is, are we

297
00:13:52,559 --> 00:13:55,760
Speaker 2: seeing de coupling happen? Now? Has it happened? This is

298
00:13:56,120 --> 00:13:58,240
Speaker 2: a thing that by policy, the last administration did not

299
00:13:58,360 --> 00:14:00,920
Speaker 2: want to have happen. Are we there? And if not,

300
00:14:00,960 --> 00:14:02,040
Speaker 2: when are we going to know that we are?

301
00:14:03,840 --> 00:14:04,040
Speaker 10: Well?

302
00:14:04,080 --> 00:14:07,560
Speaker 9: We're getting there? You know, again, nothing, It seems very

303
00:14:07,559 --> 00:14:10,120
Speaker 9: hard to imagine what you can still ship back and

304
00:14:10,160 --> 00:14:14,040
Speaker 9: forth when tariffs on both sides effectively double or more

305
00:14:14,480 --> 00:14:17,000
Speaker 9: what you're sending in both directions. Now, that takes some

306
00:14:17,040 --> 00:14:20,320
Speaker 9: time to unravel. Maybe there'll be some negotiations that stop that.

307
00:14:20,720 --> 00:14:23,200
Speaker 9: But I think your broader question is really to the point,

308
00:14:23,280 --> 00:14:28,800
Speaker 9: which is when will these threats These threats will continue

309
00:14:28,840 --> 00:14:32,760
Speaker 9: to lurk to loom over trade going forward with China.

310
00:14:32,840 --> 00:14:36,600
Speaker 9: And so the decoupling or the unraveling of the relationship

311
00:14:36,640 --> 00:14:39,080
Speaker 9: that started in the first Trump administration trade is down

312
00:14:39,120 --> 00:14:42,920
Speaker 9: substantially since then continued through the Biden administration. That's going

313
00:14:43,000 --> 00:14:44,680
Speaker 9: to be a problem that's going to continue for a

314
00:14:44,680 --> 00:14:45,120
Speaker 9: long time.

315
00:14:45,160 --> 00:14:45,800
Speaker 6: And I'll just.

316
00:14:45,800 --> 00:14:48,440
Speaker 9: Add, you know, anybody doing business with the United States

317
00:14:48,480 --> 00:14:51,040
Speaker 9: isn't just wondering what's going to happen with this administration.

318
00:14:51,200 --> 00:14:53,040
Speaker 9: But you know, two and a half three years from

319
00:14:53,080 --> 00:14:55,480
Speaker 9: now we get a new president of either party, what

320
00:14:55,600 --> 00:14:56,960
Speaker 9: is that going to look like. It's going to be

321
00:14:57,080 --> 00:15:01,160
Speaker 9: very very uncertain compared what they've been used to do

322
00:15:01,440 --> 00:15:03,760
Speaker 9: dealing with the United States over the last many decades.

323
00:15:05,120 --> 00:15:07,560
Speaker 4: Well, and to that point on the uncertainty of the

324
00:15:07,600 --> 00:15:11,600
Speaker 4: credibility of the United States and the credit worthiness of

325
00:15:11,640 --> 00:15:14,280
Speaker 4: the United States, Christopher, I wonder what you make of

326
00:15:14,320 --> 00:15:17,640
Speaker 4: the increasing concern it seems we are seeing looking at

327
00:15:17,640 --> 00:15:20,880
Speaker 4: the activity and bond and currency markets about the suggestion

328
00:15:21,040 --> 00:15:24,040
Speaker 4: that whether it's US treasuries or the US dollars, the

329
00:15:24,040 --> 00:15:27,480
Speaker 4: world's reserve currency, that that status is safe haven assets

330
00:15:27,520 --> 00:15:29,880
Speaker 4: may no longer be applicable right now.

331
00:15:31,560 --> 00:15:33,400
Speaker 9: Well, I think those are the kinds of things that

332
00:15:33,480 --> 00:15:36,760
Speaker 9: come unraveled over a long period of time. But I

333
00:15:36,760 --> 00:15:39,560
Speaker 9: think anybody, including the President, who looked at markets on

334
00:15:39,560 --> 00:15:42,720
Speaker 9: Wednesday and saw stocks, bonds, and the dollar all selling

335
00:15:42,760 --> 00:15:46,200
Speaker 9: off together, I think that was sort of a moment

336
00:15:46,280 --> 00:15:49,200
Speaker 9: of cold sweat if you're an investor, or maybe as

337
00:15:49,240 --> 00:15:53,360
Speaker 9: the President describes it, the yips. But that's something that's

338
00:15:53,360 --> 00:15:57,320
Speaker 9: a sense that, as you say, global investors aren't looking

339
00:15:57,320 --> 00:15:59,160
Speaker 9: to the US as a safe haven anymore. And you're

340
00:15:59,200 --> 00:16:02,480
Speaker 9: seeing bits and piece of that, as for example, US

341
00:16:02,560 --> 00:16:06,080
Speaker 9: interest rate rise, but the dollar is selling off. There

342
00:16:06,160 --> 00:16:07,720
Speaker 9: is a sense that maybe you want to put your

343
00:16:07,760 --> 00:16:10,960
Speaker 9: money elsewhere as global tensions are rising.

344
00:16:12,480 --> 00:16:14,880
Speaker 2: As I mentioned, you worked on the NEEC and the NSC,

345
00:16:14,960 --> 00:16:17,920
Speaker 2: and I'm curious sort of what form this conversation, should

346
00:16:17,920 --> 00:16:21,359
Speaker 2: it happen, is likely to take. We're kind of dispensing

347
00:16:21,360 --> 00:16:23,760
Speaker 2: with the usual back and forth it would be done

348
00:16:23,800 --> 00:16:26,920
Speaker 2: drafting a trade deal with a country like China, all

349
00:16:26,960 --> 00:16:28,760
Speaker 2: of that shuttle diplomacy, all of the work that would

350
00:16:28,800 --> 00:16:31,320
Speaker 2: go into crafting something down to each and every nuance.

351
00:16:31,880 --> 00:16:32,480
Speaker 1: What has to.

352
00:16:32,400 --> 00:16:34,240
Speaker 2: Happen on that phone call? Is it the phone call

353
00:16:34,280 --> 00:16:38,240
Speaker 2: itself that's most important here to markets and to policy makers?

354
00:16:38,360 --> 00:16:40,120
Speaker 2: Or does it need to be substantial? Does there need

355
00:16:40,200 --> 00:16:41,800
Speaker 2: to be something substantial that comes out of it?

356
00:16:43,160 --> 00:16:45,240
Speaker 9: Well, I can tell you from your earlier conversation in

357
00:16:45,280 --> 00:16:47,240
Speaker 9: this half hour, it's not going to be lining up

358
00:16:47,240 --> 00:16:49,360
Speaker 9: a whole bunch of pro bone or corporate lawyers who

359
00:16:49,400 --> 00:16:53,840
Speaker 9: are angry with you to begin with. These are agreements

360
00:16:53,840 --> 00:16:56,560
Speaker 9: that are very difficult, very technical to iron out over

361
00:16:56,560 --> 00:16:58,760
Speaker 9: a long period of time. I think just a phone

362
00:16:58,760 --> 00:17:01,840
Speaker 9: call will do a whole whole lot to calm people's nerves,

363
00:17:02,440 --> 00:17:05,320
Speaker 9: and maybe a framework and a team going back and

364
00:17:05,359 --> 00:17:09,720
Speaker 9: forth and something that will show goodwill towards Boat on

365
00:17:09,760 --> 00:17:13,040
Speaker 9: both sides, that a deal is possible or a limitation

366
00:17:13,280 --> 00:17:15,199
Speaker 9: of the tension is possible. Just putting in in a

367
00:17:15,240 --> 00:17:17,600
Speaker 9: box would be a big step forward at this stage.

368
00:17:19,080 --> 00:17:21,399
Speaker 4: Well to your point on pro bono work, I would

369
00:17:21,480 --> 00:17:24,639
Speaker 4: just note that President Trump has announced another six hundred

370
00:17:24,680 --> 00:17:27,040
Speaker 4: million dollars worth of pro bono deals with a number

371
00:17:27,080 --> 00:17:30,000
Speaker 4: of law firms, including Kirkland and Ellis.

372
00:17:30,040 --> 00:17:31,880
Speaker 5: That's just crossing his true social feed.

373
00:17:31,960 --> 00:17:33,439
Speaker 4: So I guess we'll see what role, if any, they

374
00:17:33,440 --> 00:17:36,600
Speaker 4: play in these many, many negotiations that have to happen.

375
00:17:36,640 --> 00:17:38,720
Speaker 4: But to the notion that there are other countries that

376
00:17:38,760 --> 00:17:41,080
Speaker 4: are in this game as well, obviously or actively talking

377
00:17:41,359 --> 00:17:43,680
Speaker 4: to the White House with a ten percent levey still

378
00:17:43,760 --> 00:17:46,840
Speaker 4: in place, Christopher, which I think we all largely are

379
00:17:46,880 --> 00:17:50,040
Speaker 4: overlooking due to the dramatic figures we're seeing when it

380
00:17:50,080 --> 00:17:52,200
Speaker 4: comes to US and China tariffs. What will that ten

381
00:17:52,200 --> 00:17:55,200
Speaker 4: percent flat rate alone, as long as it applies, which

382
00:17:55,200 --> 00:17:57,280
Speaker 4: we assume will be the duration of this ninety days,

383
00:17:57,320 --> 00:18:01,400
Speaker 4: What is that going to do economically speaking, well, I think.

384
00:18:01,280 --> 00:18:03,440
Speaker 9: You're absolutely right. There is so much going on right now,

385
00:18:03,480 --> 00:18:06,240
Speaker 9: and so much news piled on top of news. You

386
00:18:06,280 --> 00:18:08,560
Speaker 9: guys are doing a great job trying to make sense

387
00:18:08,560 --> 00:18:11,960
Speaker 9: of it all for us, but we've all been distracted

388
00:18:12,000 --> 00:18:15,439
Speaker 9: for what is a wrenching readjustment of the terms of

389
00:18:15,440 --> 00:18:18,119
Speaker 9: trade with the United States. The average tariff of the

390
00:18:18,240 --> 00:18:21,080
Speaker 9: US has applied to imports has been two two and

391
00:18:21,119 --> 00:18:24,199
Speaker 9: a half percent four decades, and now it is jumping

392
00:18:24,200 --> 00:18:28,280
Speaker 9: to ten percent. And that's the expectation that that will

393
00:18:28,320 --> 00:18:31,560
Speaker 9: remain in place. Now, that's not necessarily going to mean

394
00:18:32,160 --> 00:18:35,320
Speaker 9: ten percent increase in all prices, but as you saw

395
00:18:35,400 --> 00:18:41,960
Speaker 9: from the consumer the consumer surveys just now, people are

396
00:18:42,080 --> 00:18:44,520
Speaker 9: expecting that those prices to jump. That will lead to

397
00:18:44,560 --> 00:18:47,040
Speaker 9: a reaction in the FED at some point, and we're

398
00:18:47,040 --> 00:18:49,199
Speaker 9: going to have to absorb all of that over a

399
00:18:49,240 --> 00:18:50,120
Speaker 9: longer period of time.

400
00:18:51,480 --> 00:18:53,600
Speaker 2: There's something that we hear from the President and also's

401
00:18:53,600 --> 00:18:57,119
Speaker 2: economic advisors that this could be kind of cured instantly,

402
00:18:57,440 --> 00:18:59,200
Speaker 2: that you know, we could go back to the way

403
00:18:59,200 --> 00:19:01,000
Speaker 2: things were. There could be even this to all of this.

404
00:19:01,080 --> 00:19:02,240
Speaker 2: And I want to ask you about kind of the

405
00:19:02,640 --> 00:19:04,879
Speaker 2: horse out of the barningness of all of this, and

406
00:19:04,920 --> 00:19:07,640
Speaker 2: this conversation about American exceptionalism. You talked about the kind

407
00:19:07,640 --> 00:19:12,040
Speaker 2: of reconfiguration that we've seen of geopolitics and economic relationships

408
00:19:12,080 --> 00:19:14,760
Speaker 2: around the globe. As you sit and look at all

409
00:19:14,800 --> 00:19:17,520
Speaker 2: of this and assess the damage that's been done here

410
00:19:17,600 --> 00:19:21,760
Speaker 2: in terms of confidence and reputation, how difficult will it

411
00:19:21,800 --> 00:19:24,880
Speaker 2: be to snap one's fingers and return to the way

412
00:19:24,920 --> 00:19:26,840
Speaker 2: things were or have a you know, have the comedy

413
00:19:26,880 --> 00:19:29,120
Speaker 2: that was that was there just a couple of days ago.

414
00:19:30,720 --> 00:19:32,720
Speaker 9: Well, I may actually steal the horse out of the

415
00:19:32,720 --> 00:19:38,200
Speaker 9: barningness effect that just referenced, because I think the horse

416
00:19:38,280 --> 00:19:39,920
Speaker 9: is out of the barn. It's one of those things

417
00:19:39,920 --> 00:19:42,280
Speaker 9: that takes years and years and years to build up

418
00:19:42,680 --> 00:19:46,120
Speaker 9: confidence and a sense of transparency that you can rely

419
00:19:46,240 --> 00:19:50,280
Speaker 9: on another trading partner. And the as I mentioned before,

420
00:19:50,520 --> 00:19:54,720
Speaker 9: you know, the shifts and mixed messages that we've been

421
00:19:54,760 --> 00:19:58,760
Speaker 9: getting from this administration have been very disruptive to our

422
00:19:58,840 --> 00:20:01,960
Speaker 9: trading partners. But I think again, as you look over

423
00:20:02,000 --> 00:20:04,200
Speaker 9: the last ten years, and again it was the Trump

424
00:20:04,200 --> 00:20:07,880
Speaker 9: administration in the first time around. The Biden administration kept

425
00:20:07,880 --> 00:20:10,159
Speaker 9: some tariffs in place and added some tariffs, which is

426
00:20:10,280 --> 00:20:12,440
Speaker 9: very different from the way the United States has done

427
00:20:12,440 --> 00:20:15,720
Speaker 9: business in the past. Anybody who wants to just look

428
00:20:15,800 --> 00:20:19,359
Speaker 9: past this administration has to keep in mind that we're

429
00:20:19,359 --> 00:20:22,320
Speaker 9: dealing with a new United States that is turning more inward,

430
00:20:22,640 --> 00:20:25,800
Speaker 9: that is more likely to provout to apply tariffs than

431
00:20:25,920 --> 00:20:29,119
Speaker 9: take them away, and that I think creates some longer

432
00:20:29,200 --> 00:20:32,640
Speaker 9: term uncertainty about what adds to the costs of doing

433
00:20:32,680 --> 00:20:36,320
Speaker 9: business with what has been an exceptional economy.

434
00:20:38,200 --> 00:20:40,080
Speaker 4: Christopher, Finally, before we let you go, we just have

435
00:20:40,119 --> 00:20:41,720
Speaker 4: a minute left here. I'm sorry this may be an

436
00:20:41,800 --> 00:20:43,919
Speaker 4: unfair question, but would you say the odds of a

437
00:20:43,960 --> 00:20:47,159
Speaker 4: recession occurring within the next year are now greater that

438
00:20:47,240 --> 00:20:49,840
Speaker 4: it happens than that it doesn't, even with this ninety

439
00:20:49,880 --> 00:20:51,639
Speaker 4: day pause in place on the higher rates.

440
00:20:52,280 --> 00:20:55,040
Speaker 9: OK, they have to be greater, because nobody is feeling

441
00:20:55,119 --> 00:20:57,520
Speaker 9: more comfortable right now than any decisions that were on

442
00:20:57,600 --> 00:21:00,360
Speaker 9: hold a few weeks ago or even last week can

443
00:21:00,359 --> 00:21:01,880
Speaker 9: go ahead with them. They're going to want to see

444
00:21:01,920 --> 00:21:05,400
Speaker 9: if you know, what kind of deals come together, how

445
00:21:05,400 --> 00:21:07,920
Speaker 9: they come together, how many countries sign up, and then

446
00:21:08,280 --> 00:21:10,880
Speaker 9: they are they likely to stick? And then after that

447
00:21:10,920 --> 00:21:12,879
Speaker 9: there are the sectoral tariffs that may or may not

448
00:21:12,920 --> 00:21:15,000
Speaker 9: come and go, and then after that there's this whole

449
00:21:15,119 --> 00:21:18,639
Speaker 9: US China relationship that is going to evolve over months

450
00:21:18,680 --> 00:21:22,560
Speaker 9: and years. So I think that uncertainty has to create

451
00:21:22,680 --> 00:21:25,520
Speaker 9: higher risks of recession towards the end of this year.

452
00:21:26,880 --> 00:21:29,280
Speaker 4: All right, Christopher Smart, it's always great to have you,

453
00:21:29,320 --> 00:21:32,400
Speaker 4: former Special Assistant to the President for International Economics during

454
00:21:32,440 --> 00:21:35,920
Speaker 4: the Obama administration, now managing partner at our Growth Group.

455
00:21:36,080 --> 00:21:38,320
Speaker 4: Here with us on Balance of Power on Bloomberg Radio

456
00:21:38,359 --> 00:21:40,280
Speaker 4: and on YouTube as well. Right now we are looking

457
00:21:40,280 --> 00:21:43,600
Speaker 4: at some rising equity markets though the Nasdaq one hundred

458
00:21:43,720 --> 00:21:46,320
Speaker 4: just crossing one percent gained territory. We'll have more on

459
00:21:46,320 --> 00:21:48,080
Speaker 4: the latest for you on the other side of the spreak.

460
00:21:48,280 --> 00:21:49,520
Speaker 4: This is Bloomberg.

461
00:21:52,880 --> 00:21:56,320
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

462
00:21:56,400 --> 00:21:59,240
Speaker 1: us live weekdays at noon and five pm. E's durn

463
00:21:59,359 --> 00:22:02,800
Speaker 1: on Appaco Play and Android Otto with the Bluemberg Business app.

464
00:22:02,960 --> 00:22:06,240
Speaker 1: Listen on demand wherever you get your podcasts, or watch

465
00:22:06,280 --> 00:22:08,720
Speaker 1: us live on YouTube.

466
00:22:09,080 --> 00:22:12,760
Speaker 2: Continuing to watch markets this afternoon as we see some relief,

467
00:22:12,800 --> 00:22:14,919
Speaker 2: some enthusiasm and the equities market, but again keep an

468
00:22:14,920 --> 00:22:18,280
Speaker 2: eye on treasure markets in specific as earning season gets underway.

469
00:22:18,280 --> 00:22:20,399
Speaker 2: In Earnest as well, we heard from Jamie Diamond for

470
00:22:20,480 --> 00:22:23,440
Speaker 2: i think the third time this week on that conference

471
00:22:23,440 --> 00:22:25,680
Speaker 2: call with investors. Of course, he did an interview earlier

472
00:22:25,720 --> 00:22:27,399
Speaker 2: in the week with Fox Business one that was of

473
00:22:27,480 --> 00:22:29,439
Speaker 2: keen interest to the President of the United States and

474
00:22:29,440 --> 00:22:33,600
Speaker 2: preceded his pause on some of those tariffs, and reached

475
00:22:33,600 --> 00:22:37,840
Speaker 2: out in a lengthy memo to JP Morgan investors as well,

476
00:22:37,840 --> 00:22:40,239
Speaker 2: because the conversation here still revolves around this uncertainty even

477
00:22:40,280 --> 00:22:41,960
Speaker 2: as we've seen the tit for tat between the US

478
00:22:42,000 --> 00:22:44,280
Speaker 2: and China, wondering how all of this winds.

479
00:22:44,119 --> 00:22:46,040
Speaker 4: Up well, and that was exactly what Jamie Diamond was

480
00:22:46,080 --> 00:22:48,840
Speaker 4: speaking to after JP Morgan's earnings, this notion that yes,

481
00:22:48,920 --> 00:22:50,800
Speaker 4: he could see how there are good things coming in

482
00:22:50,880 --> 00:22:53,760
Speaker 4: terms of deregulation in tax cuts, but there's also the

483
00:22:53,840 --> 00:22:57,920
Speaker 4: uncertainty that comes with these tariff policies and more widely

484
00:22:57,960 --> 00:23:00,560
Speaker 4: the economic outlook as we looked at what Charlie was

485
00:23:00,600 --> 00:23:04,199
Speaker 4: just describing Emish consumer sentiment data for example today, so

486
00:23:04,240 --> 00:23:08,920
Speaker 4: it kind of speaks to the volatility we have all

487
00:23:08,960 --> 00:23:11,800
Speaker 4: experienced over the last week. Is the market maybe has

488
00:23:11,800 --> 00:23:13,600
Speaker 4: some things it wants to look ahead to, but can't

489
00:23:13,600 --> 00:23:15,840
Speaker 4: seem to get past a lot of the immediate headwinds when.

490
00:23:15,760 --> 00:23:17,440
Speaker 5: It comes to the tariffs that are still in place

491
00:23:17,520 --> 00:23:17,800
Speaker 5: right now.

492
00:23:17,800 --> 00:23:19,600
Speaker 2: And that data that we got from Michigan so crucial

493
00:23:19,600 --> 00:23:22,520
Speaker 2: because we see kind of the premissy of that soft data,

494
00:23:22,520 --> 00:23:24,439
Speaker 2: that sentiment related data. Guess we got a lot of

495
00:23:24,440 --> 00:23:27,679
Speaker 2: hard data this week on inflation. And while the President

496
00:23:27,680 --> 00:23:29,400
Speaker 2: did take credit for the fact that it hadn't moved

497
00:23:29,440 --> 00:23:32,040
Speaker 2: that much, he said, no inflation, just a little inflation.

498
00:23:32,520 --> 00:23:34,679
Speaker 2: Of course, backward looking data. And this sentiment gives us

499
00:23:34,680 --> 00:23:37,160
Speaker 2: some insight into how, yes, consumers are feeling about the future,

500
00:23:37,160 --> 00:23:40,160
Speaker 2: their savings, their prospects, but small business owners as well.

501
00:23:40,359 --> 00:23:40,600
Speaker 11: Yeah.

502
00:23:40,600 --> 00:23:43,639
Speaker 4: Well, and that souring sentiment maybe giving Democrats something to

503
00:23:43,720 --> 00:23:46,080
Speaker 4: seize on here is they try to use a message

504
00:23:46,119 --> 00:23:48,280
Speaker 4: that arguably helped Trump win the White House, which is

505
00:23:48,280 --> 00:23:50,960
Speaker 4: about the economy now against him. And that is the

506
00:23:51,040 --> 00:23:54,560
Speaker 4: note we begin today's political panel on Bloomberg Politics and tributors.

507
00:23:54,640 --> 00:23:56,760
Speaker 4: Rick Davis and Genie Shanzano are with us. Rick of

508
00:23:56,800 --> 00:23:59,480
Speaker 4: course as a partner at Stonequirk Capital, and Republican strategist

509
00:23:59,600 --> 00:24:02,520
Speaker 4: Genie and Zeno our Democratic analyst and senior Democracy fellow

510
00:24:02,560 --> 00:24:05,440
Speaker 4: at the Center for the Study of the Presidency and Congress,

511
00:24:05,520 --> 00:24:07,600
Speaker 4: Genie as the Democrat I will start with you on

512
00:24:07,600 --> 00:24:10,119
Speaker 4: this as we're hearing messaging now from Democrats on Capitol

513
00:24:10,200 --> 00:24:13,520
Speaker 4: Hill about this being chaotic even if President Trump pulled

514
00:24:13,560 --> 00:24:17,600
Speaker 4: back on Tariff's reciprocal tariffs. So that is for the

515
00:24:17,640 --> 00:24:20,960
Speaker 4: time being that the chaos is really what the name

516
00:24:21,000 --> 00:24:22,040
Speaker 4: of the game here is.

517
00:24:22,040 --> 00:24:24,159
Speaker 5: Is that a message that works for them?

518
00:24:25,119 --> 00:24:28,560
Speaker 12: It should be you know, I feel, Kaylee, like, if

519
00:24:28,640 --> 00:24:32,400
Speaker 12: Democrats can't use what has happened over the last week

520
00:24:32,920 --> 00:24:36,320
Speaker 12: against this administration and against Republicans, they ought to hang

521
00:24:36,400 --> 00:24:39,640
Speaker 12: up their hat and go home. Because Donald Trump won

522
00:24:39,800 --> 00:24:45,200
Speaker 12: last November on the back really of a really heterogeneous

523
00:24:45,240 --> 00:24:48,280
Speaker 12: group of voters who came together to support him because

524
00:24:48,320 --> 00:24:51,840
Speaker 12: they were disgusted by the economy that Joe Biden had created,

525
00:24:52,080 --> 00:24:56,480
Speaker 12: whether that was deserved or not, and particularly the rising prices,

526
00:24:56,600 --> 00:25:01,440
Speaker 12: particularly inflation, and Donald Trump in less than eighty days

527
00:25:01,840 --> 00:25:06,080
Speaker 12: has made all of that much worse. So if Democrats

528
00:25:06,240 --> 00:25:09,000
Speaker 12: cannot use that to their advantage as we go into

529
00:25:09,000 --> 00:25:12,280
Speaker 12: twenty six and again into twenty eight, they really don't

530
00:25:12,280 --> 00:25:14,920
Speaker 12: have any hopes but I'm hopeful, Kaylee. I'm going to

531
00:25:14,960 --> 00:25:17,560
Speaker 12: be optimistic on a Friday that they can use it

532
00:25:17,560 --> 00:25:21,040
Speaker 12: to their advantage politically, because this has been quite a shock,

533
00:25:21,359 --> 00:25:24,919
Speaker 12: and not just to Democrats but Republicans and Trump supporters.

534
00:25:25,119 --> 00:25:28,119
Speaker 12: And we've heard the discontent from all areas.

535
00:25:29,840 --> 00:25:32,360
Speaker 2: Capitol hillill bit quiet on this rainy Friday in Washington

536
00:25:32,359 --> 00:25:34,680
Speaker 2: as lawmakers make their way home for recess. But before

537
00:25:34,720 --> 00:25:37,560
Speaker 2: they did, the Minority Leader Hakim Jeffries spoke about the

538
00:25:37,560 --> 00:25:38,960
Speaker 2: pause that we saw put in place all of the

539
00:25:39,040 --> 00:25:41,840
Speaker 2: undulations related to these tariff's policies. Let's take a listen

540
00:25:41,840 --> 00:25:42,600
Speaker 2: to what he had to say.

541
00:25:43,440 --> 00:25:47,400
Speaker 11: What, if any advanced knowledge did members of the House

542
00:25:47,440 --> 00:25:55,080
Speaker 11: Republican Conference have of Trump's decision to pause the reckless

543
00:25:55,119 --> 00:25:59,560
Speaker 11: tariffs that he put into place. There are several members

544
00:26:00,680 --> 00:26:08,440
Speaker 11: of Congress who will be aggressively demanding answers and transparency,

545
00:26:09,359 --> 00:26:14,600
Speaker 11: particularly as it relates to stock purchased decisions that may

546
00:26:14,640 --> 00:26:17,320
Speaker 11: have occurred over the last few days.

547
00:26:18,440 --> 00:26:21,240
Speaker 2: Well, one of those members was Mike Levin, congressman from California,

548
00:26:21,240 --> 00:26:23,280
Speaker 2: who joined this last night in balance of power. He

549
00:26:23,400 --> 00:26:26,320
Speaker 2: was a signatory to a letter to Republican leadership in

550
00:26:26,359 --> 00:26:29,240
Speaker 2: the House wanting an investigation into what trades may or

551
00:26:29,240 --> 00:26:31,320
Speaker 2: may not have happened on the day that that pause

552
00:26:31,359 --> 00:26:35,000
Speaker 2: was announced. Gity, how resonant is this call that we're

553
00:26:35,000 --> 00:26:36,920
Speaker 2: hearing from Democrats as we talk about what their messaging

554
00:26:36,920 --> 00:26:39,840
Speaker 2: should be is going forward here? Yes, there is the

555
00:26:39,920 --> 00:26:42,919
Speaker 2: kind of calamitous roll out of this tariff's policy as

556
00:26:42,960 --> 00:26:45,119
Speaker 2: we saw it play out in the markets. Is this

557
00:26:45,160 --> 00:26:46,879
Speaker 2: something that's going to resonate? Do you think with voters

558
00:26:46,920 --> 00:26:48,200
Speaker 2: this focus here on what may or may not have

559
00:26:48,200 --> 00:26:49,639
Speaker 2: happened in terms of market manipulation.

560
00:26:51,160 --> 00:26:54,240
Speaker 12: I think it's absolutely going to Even before this happened,

561
00:26:54,280 --> 00:26:57,760
Speaker 12: we had Bernie Sanders, Alexander or Casio Cortes out there

562
00:26:57,800 --> 00:27:00,959
Speaker 12: saying that Trump and the Republicans are all about the

563
00:27:01,000 --> 00:27:04,880
Speaker 12: super wealthy. And you know, one of the astonishing things

564
00:27:04,920 --> 00:27:07,800
Speaker 12: for me, David, was to have the President sit in

565
00:27:07,840 --> 00:27:11,879
Speaker 12: the White House and brag about how his friend made

566
00:27:12,040 --> 00:27:16,280
Speaker 12: two point five million dollars today nine hundred million dollars

567
00:27:16,280 --> 00:27:19,840
Speaker 12: he said about Charles Schwab and Penske. You know, to

568
00:27:19,960 --> 00:27:22,359
Speaker 12: have a president sitting in the White House saying that

569
00:27:23,119 --> 00:27:26,119
Speaker 12: is an underscoring of the fact that this is a

570
00:27:26,160 --> 00:27:30,200
Speaker 12: president and a party about the uber wealthy. He's celebrating

571
00:27:30,240 --> 00:27:32,840
Speaker 12: publicly that fact. By the way, on the same day

572
00:27:32,880 --> 00:27:35,920
Speaker 12: that Bloomberg called the best day ever for billionaires, there

573
00:27:36,000 --> 00:27:40,439
Speaker 12: was our billionaire president celebrating that. Absolutely, Again, something Democrats

574
00:27:40,640 --> 00:27:43,760
Speaker 12: should be able to underscore. Whether they do or not

575
00:27:44,280 --> 00:27:46,640
Speaker 12: is another question, but Sanders and others are out there

576
00:27:46,640 --> 00:27:46,919
Speaker 12: doing it.

577
00:27:47,000 --> 00:27:47,160
Speaker 13: Now.

578
00:27:47,160 --> 00:27:48,879
Speaker 12: The moderates have to take up the reins, and I

579
00:27:48,920 --> 00:27:50,960
Speaker 12: think that's what Jeffreys is calling for.

580
00:27:52,160 --> 00:27:54,760
Speaker 4: Yeah, I believe it was a thirty six billion dollar

581
00:27:54,840 --> 00:27:58,280
Speaker 4: swing in the net worth of Elon Musk on Wednesday

582
00:27:58,359 --> 00:27:58,960
Speaker 4: during the rally.

583
00:27:59,000 --> 00:28:02,080
Speaker 5: Obviously didn't stick. Yes, even if we're seeing stocks in.

584
00:28:02,080 --> 00:28:04,920
Speaker 4: The green today, Rick, But it comes back to what

585
00:28:04,960 --> 00:28:08,240
Speaker 4: the political liability is for President Trump around the volatility

586
00:28:08,280 --> 00:28:09,800
Speaker 4: in the markets. Is he tried, at least to a

587
00:28:09,800 --> 00:28:12,760
Speaker 4: certain extent, to look through it. Obviously maybe couldn't get

588
00:28:12,760 --> 00:28:14,960
Speaker 4: past some of the activity we saw in the bond

589
00:28:14,960 --> 00:28:17,760
Speaker 4: market a few days ago. But how how much does

590
00:28:17,800 --> 00:28:19,919
Speaker 4: it matter when people are panicking looking at their four

591
00:28:20,000 --> 00:28:20,600
Speaker 4: O one case.

592
00:28:22,080 --> 00:28:24,560
Speaker 14: Yeah, Look, I mean, you know, some of these issues

593
00:28:24,640 --> 00:28:28,720
Speaker 14: have real residents with voters, and some don't have much

594
00:28:28,720 --> 00:28:33,119
Speaker 14: of a partisan edge. This idea that somehow members of Congress.

595
00:28:33,280 --> 00:28:35,800
Speaker 14: You know that there's a difference between Republicans and Democrats

596
00:28:35,800 --> 00:28:39,280
Speaker 14: insider trading. It's pretty clear in the pulling we saw

597
00:28:39,400 --> 00:28:43,520
Speaker 14: before the election day last year that basically voter sink

598
00:28:43,600 --> 00:28:47,200
Speaker 14: everyone is insider trading in Capitol Hill. And you know,

599
00:28:47,240 --> 00:28:50,000
Speaker 14: they can't pass a bill that outlaws it, and so

600
00:28:50,160 --> 00:28:52,520
Speaker 14: they must all be in on it. And so I

601
00:28:52,520 --> 00:28:55,320
Speaker 14: don't think it's really a partisan issue, but you do

602
00:28:55,480 --> 00:29:01,120
Speaker 14: see a collapse of the consumer sentiment around the swings

603
00:29:01,160 --> 00:29:06,200
Speaker 14: in the markets and the uncertainty that's created around this

604
00:29:06,360 --> 00:29:10,880
Speaker 14: tearf regime. And and you know you're seeing record drops,

605
00:29:10,920 --> 00:29:14,600
Speaker 14: you know, ten percent in March, more in February, you know,

606
00:29:14,760 --> 00:29:19,760
Speaker 14: thirty percent since December in consumer confidence. That's a real poll, right,

607
00:29:19,800 --> 00:29:22,120
Speaker 14: Those are the polls of consumers telling you whether or

608
00:29:22,120 --> 00:29:26,320
Speaker 14: not they're optimistic about the future. And it's only grown

609
00:29:26,360 --> 00:29:28,960
Speaker 14: worse in selection day, which, by the way, was that

610
00:29:29,080 --> 00:29:31,959
Speaker 14: one of its highest points in the last you know,

611
00:29:32,040 --> 00:29:35,800
Speaker 14: five or six years. So we've fallen a long way

612
00:29:36,120 --> 00:29:40,400
Speaker 14: in making sure that our consumers have confidence in our economy.

613
00:29:40,520 --> 00:29:46,040
Speaker 14: And that's on the president himself, you know, his vacillations

614
00:29:45,480 --> 00:29:49,760
Speaker 14: and and and you know, incredible sort of rolling the

615
00:29:49,880 --> 00:29:54,800
Speaker 14: dice with this massive tearf regime has consequences, and we're

616
00:29:54,800 --> 00:29:56,400
Speaker 14: now seeing those with consumers.

617
00:29:57,960 --> 00:30:00,520
Speaker 2: Rick, put yourself in the position of a Republican lawmaker

618
00:30:00,560 --> 00:30:02,880
Speaker 2: going home to his district for the next two weeks.

619
00:30:03,440 --> 00:30:06,840
Speaker 2: Maybe you'll have a town home. Maybe he won't likely

620
00:30:06,920 --> 00:30:09,320
Speaker 2: encounter a constituent who's going to ask him why is

621
00:30:09,360 --> 00:30:11,200
Speaker 2: this happening? Why is the president doing this? Is there

622
00:30:11,240 --> 00:30:14,320
Speaker 2: a clear message from the White House down to those

623
00:30:14,320 --> 00:30:17,440
Speaker 2: backbench lawmakers about the rationale for doing this that they

624
00:30:17,440 --> 00:30:21,120
Speaker 2: can kind of easily succinctly explain to constituents on the

625
00:30:21,200 --> 00:30:22,680
Speaker 2: right or the left who just wonder what's going on

626
00:30:22,720 --> 00:30:24,840
Speaker 2: here and why we've seen the kind of undulations.

627
00:30:24,400 --> 00:30:25,840
Speaker 6: We have Now.

628
00:30:25,920 --> 00:30:27,920
Speaker 14: That's part of the problem is that we don't have

629
00:30:28,080 --> 00:30:31,120
Speaker 14: a set of talking points that members of Congress on

630
00:30:31,240 --> 00:30:36,000
Speaker 14: either side can adequately address the current situation. I mean,

631
00:30:36,040 --> 00:30:39,960
Speaker 14: what guidance has the White House given, you know, Republican

632
00:30:40,000 --> 00:30:43,200
Speaker 14: officials going home, as you point out, for easter recess

633
00:30:44,280 --> 00:30:48,440
Speaker 14: and indoubtedly they're going to be communicating with their voters

634
00:30:48,600 --> 00:30:52,480
Speaker 14: and constituents, and what are they going to tell them, Like, well,

635
00:30:52,520 --> 00:30:55,520
Speaker 14: we got a ninety day pause. That's probably the best

636
00:30:55,560 --> 00:30:59,840
Speaker 14: news that they can talk about the tariffs is that

637
00:31:00,200 --> 00:31:05,600
Speaker 14: nothing you know, really extreme is gonna happen. The fact

638
00:31:05,600 --> 00:31:09,400
Speaker 14: that we're at i'd say a trade war with China

639
00:31:09,480 --> 00:31:12,880
Speaker 14: right now, uh, sort of cuts both ways with with

640
00:31:12,880 --> 00:31:16,640
Speaker 14: with their constituents. But the lack of certainty, the lack

641
00:31:16,680 --> 00:31:20,960
Speaker 14: of you know, sort of the kind of communications guidance

642
00:31:20,960 --> 00:31:22,920
Speaker 14: that you would want from the White House. Tell us

643
00:31:22,920 --> 00:31:25,120
Speaker 14: how to go sell this right, give us the endgame,

644
00:31:25,600 --> 00:31:29,320
Speaker 14: tell us what what's the upside for our for our constituents.

645
00:31:29,680 --> 00:31:30,680
Speaker 2: They're just not getting.

646
00:31:31,280 --> 00:31:34,440
Speaker 14: And I think that that we've always seen white houses

647
00:31:34,520 --> 00:31:39,560
Speaker 14: have trouble, uh, communicating their own plans. Certainly, the Biden

648
00:31:39,600 --> 00:31:42,640
Speaker 14: administration had a horrific time communicating how they were going

649
00:31:42,680 --> 00:31:45,360
Speaker 14: to try and solve inflation. You know, they went through

650
00:31:45,400 --> 00:31:49,680
Speaker 14: denial and then you know, sort of Biden nomics.

651
00:31:49,800 --> 00:31:50,800
Speaker 2: None of that stuff work.

652
00:31:51,880 --> 00:31:55,680
Speaker 14: That the Trump administrations have a totally different approach, which

653
00:31:55,760 --> 00:31:57,440
Speaker 14: is like, we're just not going to talk about it.

654
00:31:57,720 --> 00:32:00,160
Speaker 14: We're just gonna kind of, you know, tweet our way

655
00:32:00,200 --> 00:32:04,120
Speaker 14: through this thing and in a spasmodic fashion. And the

656
00:32:04,160 --> 00:32:07,400
Speaker 14: reality is it doesn't leave these members of Congress with

657
00:32:07,480 --> 00:32:10,160
Speaker 14: any real good guidance that they can survive a town hall,

658
00:32:10,520 --> 00:32:13,280
Speaker 14: which is no wonder why they tell people don't do

659
00:32:13,440 --> 00:32:16,240
Speaker 14: town halls. You know, I'm into tell them and they're

660
00:32:16,240 --> 00:32:16,640
Speaker 14: all going to.

661
00:32:16,640 --> 00:32:17,240
Speaker 2: Be mad at you.

662
00:32:19,200 --> 00:32:19,360
Speaker 6: Yep.

663
00:32:19,440 --> 00:32:22,440
Speaker 4: We've seen some pretty cringe worthy videos merge over the

664
00:32:22,480 --> 00:32:24,560
Speaker 4: last few months of these town halls, to be sure.

665
00:32:24,600 --> 00:32:26,400
Speaker 4: But of course one of the other things. In addition

666
00:32:26,480 --> 00:32:29,400
Speaker 4: to the messaging around the economy, we've seen a lot

667
00:32:29,440 --> 00:32:31,680
Speaker 4: of focus on Geni from both Republicans and this White

668
00:32:31,680 --> 00:32:34,760
Speaker 4: House's progress when it comes to issues of migration and

669
00:32:34,800 --> 00:32:38,520
Speaker 4: efforts of deporting criminals. Of course, a lot has been

670
00:32:38,560 --> 00:32:41,960
Speaker 4: focused on of those who were deported to this notorious

671
00:32:41,960 --> 00:32:44,000
Speaker 4: prison in Al Salvador. And Genie, I know you are

672
00:32:44,040 --> 00:32:46,280
Speaker 4: a watcher of the court, So in our final few

673
00:32:46,280 --> 00:32:48,600
Speaker 4: minutes here, I wonder your reaction to the Supreme Court

674
00:32:48,640 --> 00:32:52,240
Speaker 4: decision that the administration does have to return the Maryland

675
00:32:52,240 --> 00:32:56,400
Speaker 4: man Abrego Garcia, Kilmar Abrego Garcia, who was admittedly wrongfully

676
00:32:56,960 --> 00:33:00,040
Speaker 4: deported by the administration. He has to come back, And

677
00:33:00,080 --> 00:33:01,200
Speaker 4: I wonder what you make of the ruling.

678
00:33:02,560 --> 00:33:05,640
Speaker 12: Yeah, it's such an important ruling. His twenty seventh day

679
00:33:05,680 --> 00:33:08,640
Speaker 12: today Kayley in a super max prison and the government

680
00:33:08,800 --> 00:33:12,840
Speaker 12: admitting he is there by accident, but saying sorry, essentially,

681
00:33:12,920 --> 00:33:15,320
Speaker 12: we can't get him back. And so now this judge

682
00:33:15,360 --> 00:33:17,960
Speaker 12: gave them a two hour delay. They're still supposed to

683
00:33:18,040 --> 00:33:21,760
Speaker 12: meet today. A very strange petition by the DOJ, I

684
00:33:21,800 --> 00:33:24,800
Speaker 12: think today to ask the government or ask the court

685
00:33:24,880 --> 00:33:27,760
Speaker 12: rather to postpone a hearing. And the judge came back,

686
00:33:27,840 --> 00:33:30,240
Speaker 12: essentially and said, how could it take you so long

687
00:33:30,280 --> 00:33:33,320
Speaker 12: to read a four page ruling by the court, the

688
00:33:33,360 --> 00:33:36,960
Speaker 12: Supreme Court. So you know, the government has to go

689
00:33:37,000 --> 00:33:39,719
Speaker 12: before this judge and has to say what are their

690
00:33:39,760 --> 00:33:43,000
Speaker 12: plans to get him back? And of course I think

691
00:33:43,080 --> 00:33:46,000
Speaker 12: this is very much in sync with what we're seeing

692
00:33:46,080 --> 00:33:49,520
Speaker 12: on the tariff issue. Even if you support the president's

693
00:33:49,520 --> 00:33:52,880
Speaker 12: policies on immigration and on targeted tariffs, it is the

694
00:33:53,040 --> 00:33:57,680
Speaker 12: execution in every case which has been a disaster. And

695
00:33:57,760 --> 00:34:00,800
Speaker 12: I always go back and say, reread Federal in seventy

696
00:34:00,840 --> 00:34:03,320
Speaker 12: you know, I like the Federalist papers. Gaily, what does

697
00:34:03,360 --> 00:34:07,640
Speaker 12: Hamilton say? A bad government is one that executes the

698
00:34:07,760 --> 00:34:12,279
Speaker 12: law and the legislation of the country badly, and a

699
00:34:12,320 --> 00:34:15,040
Speaker 12: bad president is one who does the same. And this

700
00:34:15,200 --> 00:34:18,040
Speaker 12: is a trap, and Joe Biden fall into the same

701
00:34:18,080 --> 00:34:21,840
Speaker 12: trap with afghanistand withdrawal. We're seeing it again. They have

702
00:34:22,080 --> 00:34:26,800
Speaker 12: to execute well. Otherwise on immigration, you lose a supporter

703
00:34:27,000 --> 00:34:28,799
Speaker 12: like Joe Rogan. You know it's over.

704
00:34:30,440 --> 00:34:33,880
Speaker 2: Jis Zeno recommending the Federalist seventy there on this Friday afternoon,

705
00:34:33,960 --> 00:34:36,440
Speaker 2: Really appreciate that senior Democracy fellow at the Center for

706
00:34:36,480 --> 00:34:38,520
Speaker 2: the Study of the Presidency and Congress Course of Bloomer

707
00:34:38,560 --> 00:34:41,399
Speaker 2: Politics contributor, along with Rick Davis, partner at Stone Court

708
00:34:41,400 --> 00:34:44,200
Speaker 2: Capital of Bloomberg Politics contributor, as well as some insight

709
00:34:44,239 --> 00:34:46,480
Speaker 2: there about the path forward here for the White House

710
00:34:46,520 --> 00:34:49,120
Speaker 2: and for lawmakers as they look ahead to the weekend

711
00:34:49,160 --> 00:34:52,440
Speaker 2: and recess to follow. No shortage of things for them

712
00:34:52,440 --> 00:34:54,560
Speaker 2: to talk about while they're back home their districts, Kayley,

713
00:34:54,600 --> 00:34:56,640
Speaker 2: including the bill that they managed to pass the House

714
00:34:56,680 --> 00:34:57,960
Speaker 2: managed to pass earlier this week.

715
00:34:58,040 --> 00:34:59,840
Speaker 4: Yeah, which seems to be just a footnote in the

716
00:35:00,040 --> 00:35:02,160
Speaker 4: week that has been. Given all of the volatility we're

717
00:35:02,160 --> 00:35:04,520
Speaker 4: seeing in financial markets, the equities are swinging to the

718
00:35:04,560 --> 00:35:06,319
Speaker 4: upside today. We're right around the highs of the session,

719
00:35:06,400 --> 00:35:08,440
Speaker 4: up about one and a half percent on the Nasdaq.

720
00:35:08,480 --> 00:35:10,719
Speaker 4: One hundred one point four percent or so on the

721
00:35:10,800 --> 00:35:12,680
Speaker 4: S and P. The ten year yield right now at

722
00:35:12,719 --> 00:35:15,040
Speaker 4: four basis points at four forty six. We'll have more

723
00:35:15,080 --> 00:35:17,160
Speaker 4: ahead in our second hour of Balance of Power. Here

724
00:35:17,400 --> 00:35:18,080
Speaker 4: on Bloomberg.

725
00:35:20,320 --> 00:35:23,799
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch

726
00:35:23,880 --> 00:35:26,719
Speaker 1: us live weekdays at noon and five pm. He's durn

727
00:35:26,840 --> 00:35:30,279
Speaker 1: on Apple, Cocklay and Android Auto with the Bloomberg Business App.

728
00:35:30,360 --> 00:35:33,359
Speaker 1: You can also listen live on Amazon Alexa from our

729
00:35:33,400 --> 00:35:38,600
Speaker 1: flagship New York station. Just say Alexa Play Bloomberg eleven thirty.

730
00:35:39,239 --> 00:35:40,960
Speaker 2: I want turn out of Joe Lorna, who's a managing

731
00:35:40,960 --> 00:35:44,000
Speaker 2: director in Chief Economists at SMBC and Necosecurities. He was

732
00:35:44,080 --> 00:35:46,520
Speaker 2: former Special Assistant to the President Chief Economists of the

733
00:35:46,600 --> 00:35:49,919
Speaker 2: National Economic Council during President Trump's first term. Joe, great

734
00:35:49,960 --> 00:35:51,479
Speaker 2: to have you with us, and I'd love to start

735
00:35:51,480 --> 00:35:53,200
Speaker 2: this by asking him sort of how you see these

736
00:35:53,239 --> 00:35:55,920
Speaker 2: next few months proceeding here. You've been in the room

737
00:35:55,960 --> 00:35:58,319
Speaker 2: with the presidents. He's thought about trade, no doubt, thought

738
00:35:58,320 --> 00:36:01,359
Speaker 2: aloud about trade, and sort of how he's policy. What

739
00:36:01,400 --> 00:36:03,480
Speaker 2: do you expect is going to happen here? Aside from

740
00:36:04,080 --> 00:36:06,040
Speaker 2: hopefully I imagine the president thinking of the phone call,

741
00:36:06,360 --> 00:36:09,040
Speaker 2: the phone ringing, How does he approach these deals? What's

742
00:36:09,040 --> 00:36:10,800
Speaker 2: he looking for in terms of just the mechanics of

743
00:36:10,840 --> 00:36:11,840
Speaker 2: putting these deals together.

744
00:36:13,000 --> 00:36:16,440
Speaker 10: We had those reciprocal tariff announcements, as you know, April second,

745
00:36:16,600 --> 00:36:19,040
Speaker 10: and I was pretty confident that, you know, we were

746
00:36:19,080 --> 00:36:21,840
Speaker 10: going to at least have that in place until you know,

747
00:36:21,880 --> 00:36:23,720
Speaker 10: it wasn't going to change until we got to the ninth.

748
00:36:24,520 --> 00:36:26,600
Speaker 10: And then when the ninth, of course struck and they

749
00:36:26,600 --> 00:36:29,840
Speaker 10: were in place shortly thereafter, the President announced there'd be delays.

750
00:36:29,840 --> 00:36:32,720
Speaker 10: And I see that because the negotiation process had been done,

751
00:36:33,200 --> 00:36:35,279
Speaker 10: so you need to come with these tariffs that were

752
00:36:35,400 --> 00:36:38,440
Speaker 10: very high, very aggressive, and then in the process that

753
00:36:38,520 --> 00:36:41,200
Speaker 10: was bringing people to the table. And now that the

754
00:36:41,239 --> 00:36:45,759
Speaker 10: negotiation has begun, to me, the maximal amount of uncertainty

755
00:36:45,760 --> 00:36:47,839
Speaker 10: in some sense with tariffs was earlier this week before

756
00:36:47,840 --> 00:36:50,760
Speaker 10: that announcement occurred. And now we could just go forward.

757
00:36:51,160 --> 00:36:53,160
Speaker 10: And my guess is the President is going to make

758
00:36:53,200 --> 00:36:56,759
Speaker 10: deals with the various countries and that will be to

759
00:36:56,800 --> 00:36:58,959
Speaker 10: the US advantage, and we're going to kind of clean

760
00:36:59,040 --> 00:37:01,360
Speaker 10: up this uncertainty and then we'll move on to the

761
00:37:01,400 --> 00:37:03,440
Speaker 10: next thing, which should be the budget and what's spending

762
00:37:03,480 --> 00:37:05,640
Speaker 10: cuts of any and how they have to impact or

763
00:37:05,680 --> 00:37:08,200
Speaker 10: help the economy. But I do think this tariff uncertainty

764
00:37:08,239 --> 00:37:11,400
Speaker 10: will pass. I think the market has I understand why

765
00:37:11,440 --> 00:37:13,720
Speaker 10: the market's reacted the way it has. I don't expect

766
00:37:13,760 --> 00:37:17,000
Speaker 10: it to continue. I do expect the volatility to subside

767
00:37:17,320 --> 00:37:19,760
Speaker 10: as progress and trade negotiation moves forward.

768
00:37:21,239 --> 00:37:23,399
Speaker 5: But it's not just about the market activity, right Joe.

769
00:37:23,440 --> 00:37:26,359
Speaker 4: It's also about consumer and business activity, who while they're

770
00:37:26,400 --> 00:37:29,440
Speaker 4: waiting for clarity to see what the outcome is ninety

771
00:37:29,520 --> 00:37:31,719
Speaker 4: days from now, they still have to make decisions with

772
00:37:31,719 --> 00:37:34,080
Speaker 4: their own purchasing power now, decide what they're doing in

773
00:37:34,160 --> 00:37:37,480
Speaker 4: terms of inventories, where they're sourcing the supply, what purchases

774
00:37:38,160 --> 00:37:41,120
Speaker 4: they're making, how much damage realistically can be done. Even

775
00:37:41,120 --> 00:37:43,239
Speaker 4: if you think ultimately we end up in a better

776
00:37:43,280 --> 00:37:45,880
Speaker 4: place at the end of the day, at the end

777
00:37:45,920 --> 00:37:47,920
Speaker 4: of this period, I should say we still have the

778
00:37:47,960 --> 00:37:49,200
Speaker 4: whole period to get through.

779
00:37:49,920 --> 00:37:52,920
Speaker 10: No, absolutely, And it's uncertainty even as it relates to

780
00:37:53,040 --> 00:37:56,359
Speaker 10: tax policy and the budget is also a factor right now.

781
00:37:56,360 --> 00:37:59,000
Speaker 10: It's just been a very relatively short period of time.

782
00:37:59,360 --> 00:38:01,440
Speaker 10: If we're looking at at the labor markets, the jobles

783
00:38:01,520 --> 00:38:03,520
Speaker 10: to claim numbers are low. For looking at the consumer

784
00:38:03,560 --> 00:38:07,400
Speaker 10: spending side, the chain source numbers look pretty good if

785
00:38:07,480 --> 00:38:10,480
Speaker 10: in the next week or two there is progress on

786
00:38:10,560 --> 00:38:14,440
Speaker 10: the trade. I don't expect this uncertainty to really meaningfully

787
00:38:14,520 --> 00:38:17,840
Speaker 10: have any long lasting or appreciable effect on the economy.

788
00:38:18,480 --> 00:38:21,239
Speaker 10: The economy is very resilient, it's very robust. It will

789
00:38:21,239 --> 00:38:23,799
Speaker 10: come back. If we go ninety days, we're day eighty

790
00:38:23,840 --> 00:38:26,760
Speaker 10: nine and there's been no progress made, yes, absolutely that'll

791
00:38:26,760 --> 00:38:28,640
Speaker 10: be a problem, but I don't expect that to be

792
00:38:28,680 --> 00:38:31,360
Speaker 10: the case. I do think we're going to my punching guests,

793
00:38:31,640 --> 00:38:33,640
Speaker 10: Gut tells me we're going to get some good news

794
00:38:34,280 --> 00:38:34,959
Speaker 10: somewhat soon.

795
00:38:36,760 --> 00:38:39,839
Speaker 2: Joe, about the kind of inherent inflationaryness of all of this,

796
00:38:40,120 --> 00:38:41,839
Speaker 2: I'm curious sort of how you're looking at this. John

797
00:38:41,880 --> 00:38:44,080
Speaker 2: Williams is speaking at the Puerto Rico Chamber of Commerce

798
00:38:44,520 --> 00:38:46,319
Speaker 2: right now. He says that his expectation is that these

799
00:38:46,360 --> 00:38:48,799
Speaker 2: tariffs are going to boost inflation this year to three

800
00:38:48,840 --> 00:38:51,320
Speaker 2: and a half four percent. We've heard from the present's

801
00:38:51,320 --> 00:38:55,200
Speaker 2: economic advisors during this term a more greatly reduced sense

802
00:38:55,200 --> 00:38:58,120
Speaker 2: of the inflationary impact this is going to have what's yours?

803
00:38:58,120 --> 00:38:59,759
Speaker 2: How do you marry your kind of forecast of what

804
00:38:59,800 --> 00:39:01,880
Speaker 2: I mentioned that what we heard from President Williams and

805
00:39:01,880 --> 00:39:04,080
Speaker 2: the New York Fed and the White House team today.

806
00:39:05,000 --> 00:39:08,000
Speaker 10: We've been up to view that energy prices will come down.

807
00:39:08,000 --> 00:39:10,600
Speaker 10: That'll be a very very powerful offset, especially to any

808
00:39:10,680 --> 00:39:12,680
Speaker 10: what I think is still likely to be a modest

809
00:39:12,719 --> 00:39:15,120
Speaker 10: impact from terraf. So for example, if you had a

810
00:39:15,120 --> 00:39:18,120
Speaker 10: ten percent across the board tariff sixty percent on China,

811
00:39:18,120 --> 00:39:20,560
Speaker 10: as the President had proposed on the campaign trail, that

812
00:39:20,600 --> 00:39:23,680
Speaker 10: doesn't even lift in price level terms your CPI more

813
00:39:23,719 --> 00:39:25,920
Speaker 10: than a point. And of course there'll be offsets from

814
00:39:25,920 --> 00:39:29,279
Speaker 10: the currency and offset from the margins. But on the

815
00:39:29,280 --> 00:39:31,680
Speaker 10: inflation side, the fact that oil is down at sixty

816
00:39:31,800 --> 00:39:35,000
Speaker 10: is very very encouraging. That might have been due to

817
00:39:35,000 --> 00:39:39,880
Speaker 10: the administration pushing the saudis a particular increased oil production

818
00:39:40,320 --> 00:39:43,880
Speaker 10: that will provide an offset. So I mean the inflation

819
00:39:43,920 --> 00:39:47,160
Speaker 10: outlook right now is still I'm still uncertain, it's still sticky.

820
00:39:47,520 --> 00:39:50,080
Speaker 10: The Fed is I think, wait looking too much into

821
00:39:50,120 --> 00:39:52,160
Speaker 10: review mirror on this stuff, because if you look at

822
00:39:52,200 --> 00:39:55,240
Speaker 10: the markets right now, they're telling you looking at break evens,

823
00:39:55,320 --> 00:39:57,880
Speaker 10: there's no inflation problem, and that's also I think one

824
00:39:57,920 --> 00:39:59,759
Speaker 10: of the reasons why the market is behaving that risk

825
00:39:59,760 --> 00:40:01,799
Speaker 10: ass since I've not behaved as well today as they've

826
00:40:01,800 --> 00:40:04,880
Speaker 10: listened to FED commentary from President to Williams and think

827
00:40:04,920 --> 00:40:07,320
Speaker 10: that the FED might be making a mistake by parping

828
00:40:07,360 --> 00:40:10,440
Speaker 10: too much on the inflation side, unless on the potential growth.

829
00:40:10,440 --> 00:40:12,359
Speaker 10: So I mean the time it could be slowing. That's

830
00:40:12,360 --> 00:40:14,800
Speaker 10: what more investors are worried about right now than inflation.

831
00:40:16,160 --> 00:40:19,040
Speaker 4: Well, have you changed your own expectation, Joe, for the

832
00:40:19,160 --> 00:40:21,960
Speaker 4: kinds or the scale of FED rate cuts we could

833
00:40:21,960 --> 00:40:23,879
Speaker 4: see this year, the number of them.

834
00:40:24,640 --> 00:40:26,799
Speaker 10: No, We've actually been pretty stable, and we marked our

835
00:40:26,840 --> 00:40:29,480
Speaker 10: growth down based on what will be the week Q one.

836
00:40:29,760 --> 00:40:31,840
Speaker 10: We've got GDP around one and a half percent, and

837
00:40:31,920 --> 00:40:34,320
Speaker 10: with most of that weakness concentrated in the first quarter.

838
00:40:34,640 --> 00:40:39,200
Speaker 10: We did raise our inflation forecast a bit, but not massively,

839
00:40:39,680 --> 00:40:42,520
Speaker 10: and we kept the FED basically not cutting until the

840
00:40:42,520 --> 00:40:44,080
Speaker 10: second half of the year, which is where we've been

841
00:40:44,120 --> 00:40:45,960
Speaker 10: for a while. I don't think the FED needs to

842
00:40:45,960 --> 00:40:47,359
Speaker 10: cut in the short term. I don't think the FED

843
00:40:47,360 --> 00:40:50,160
Speaker 10: should cut in the short term, and therefore we see

844
00:40:50,160 --> 00:40:53,200
Speaker 10: no change. You've got two cuts one twenty five in September,

845
00:40:53,440 --> 00:40:55,600
Speaker 10: another twenty five in December.

846
00:40:57,520 --> 00:41:00,000
Speaker 2: I want to ask you about dollar weakness, and Kaylee,

847
00:41:00,080 --> 00:41:01,400
Speaker 2: just a moment to go kind of running through a

848
00:41:01,480 --> 00:41:03,880
Speaker 2: number of the pairs indicating we're seeing softness in the

849
00:41:03,920 --> 00:41:06,680
Speaker 2: dollar today, and again drawing on your experience during the

850
00:41:06,680 --> 00:41:08,640
Speaker 2: first term, I wonder sort of what insight you can

851
00:41:08,680 --> 00:41:11,400
Speaker 2: give us into the way in which the president looks

852
00:41:11,400 --> 00:41:13,920
Speaker 2: at the strength of the dollar relative to other currencies.

853
00:41:14,160 --> 00:41:16,680
Speaker 2: Of course, there's this conversation maybe swirling in the background

854
00:41:16,719 --> 00:41:20,840
Speaker 2: still about this perspective mar Lago Accord getting folks to

855
00:41:20,880 --> 00:41:22,800
Speaker 2: the table there. It seems like in this current environment,

856
00:41:22,880 --> 00:41:25,239
Speaker 2: with the lack of communication between the US and China,

857
00:41:25,239 --> 00:41:26,920
Speaker 2: that would be a difficult thing to pull off, to

858
00:41:26,960 --> 00:41:30,000
Speaker 2: say the least. But what's your sense of the outlook

859
00:41:30,040 --> 00:41:32,799
Speaker 2: here from Washington on global currencies, the way that this

860
00:41:32,800 --> 00:41:34,240
Speaker 2: president is looking at the dollar today.

861
00:41:34,920 --> 00:41:37,560
Speaker 10: So in general, the trade weight, if you look at

862
00:41:37,560 --> 00:41:41,200
Speaker 10: the Fed's real broad trade weighted dollar, it's close to

863
00:41:41,239 --> 00:41:43,800
Speaker 10: a forty year high. So this notion that the dollar

864
00:41:43,880 --> 00:41:48,080
Speaker 10: is expensive, you see it in the FED data. Investors

865
00:41:48,080 --> 00:41:50,000
Speaker 10: tend to focus on the d X y as you

866
00:41:50,000 --> 00:41:52,120
Speaker 10: could pull up on your Bloomberg terminal, which is very

867
00:41:52,239 --> 00:41:54,920
Speaker 10: narrow nominal basket of currencies, and that's been a bit

868
00:41:54,960 --> 00:41:58,960
Speaker 10: weaker over time. I could see the dollar perhaps softening

869
00:41:58,960 --> 00:42:01,440
Speaker 10: a bit, but for good reasons on things like the

870
00:42:01,480 --> 00:42:04,279
Speaker 10: mar Alago courd. I don't know where that's if that's

871
00:42:04,280 --> 00:42:06,680
Speaker 10: going to happen. I'm just not privy to those discussions.

872
00:42:06,800 --> 00:42:10,120
Speaker 10: I think given the President's love of branding and marketing,

873
00:42:10,120 --> 00:42:11,439
Speaker 10: it'd be hard for me to think that there isn't

874
00:42:11,440 --> 00:42:13,640
Speaker 10: a mar A Lago accord at some point, But what

875
00:42:13,719 --> 00:42:17,080
Speaker 10: it entails I don't know. But just for a minute,

876
00:42:17,120 --> 00:42:19,839
Speaker 10: on the markets right now, we're clearly in a very

877
00:42:19,960 --> 00:42:23,719
Speaker 10: sharp de leveraging period, and I wouldn't be surprised if

878
00:42:23,719 --> 00:42:27,160
Speaker 10: some of this selling just naturally burns itself out, especially

879
00:42:27,200 --> 00:42:29,759
Speaker 10: as we get more chatter that hey, look, the administration

880
00:42:29,920 --> 00:42:33,480
Speaker 10: with its trading partners, is making some progress. And ultimately

881
00:42:33,520 --> 00:42:36,440
Speaker 10: my base case for the economy, because I'm still an optimist,

882
00:42:36,480 --> 00:42:39,080
Speaker 10: is that there will be a deal reached with China,

883
00:42:39,160 --> 00:42:41,759
Speaker 10: as it's in both countries' best interest and I think

884
00:42:41,760 --> 00:42:44,840
Speaker 10: the Chinese will want to negotiate, and the President having

885
00:42:44,920 --> 00:42:47,359
Speaker 10: had some successes with other countries that will precede those

886
00:42:47,400 --> 00:42:50,160
Speaker 10: actions will basically push China.

887
00:42:49,920 --> 00:42:50,279
Speaker 6: To do so.

888
00:42:52,000 --> 00:42:54,680
Speaker 4: I want to ask you about the bond market as well, though, Joe,

889
00:42:54,680 --> 00:42:58,400
Speaker 4: because obviously that is we understand what caught the president's

890
00:42:58,400 --> 00:43:01,920
Speaker 4: attention enough that he was actually inspired to do a

891
00:43:01,960 --> 00:43:04,000
Speaker 4: little bit of a policy shift with this ninety day

892
00:43:04,400 --> 00:43:07,120
Speaker 4: pause on reciprocal tariff rates. When you see the kind

893
00:43:07,120 --> 00:43:09,040
Speaker 4: of activity we've seen in the bond market, the upward

894
00:43:09,080 --> 00:43:10,920
Speaker 4: pressure we're seeing on the ten year yields, is that

895
00:43:10,960 --> 00:43:13,960
Speaker 4: something you attribute mostly to this back and forth over

896
00:43:14,040 --> 00:43:16,360
Speaker 4: tariffs or does that signal something else to you about

897
00:43:16,680 --> 00:43:20,000
Speaker 4: whether or not US treasuries are seen as the kind

898
00:43:20,040 --> 00:43:22,640
Speaker 4: of safety asset that they once were considering the other

899
00:43:22,960 --> 00:43:26,399
Speaker 4: kind of fiscal trajectory oriented issues that the United States

900
00:43:26,480 --> 00:43:28,480
Speaker 4: is still grappling with. Knowing we have a debt ceiling

901
00:43:28,480 --> 00:43:30,920
Speaker 4: fight potentially ahead of us, that we're going to be

902
00:43:31,160 --> 00:43:33,920
Speaker 4: looking at a tax package that could increase the deficit

903
00:43:33,960 --> 00:43:36,839
Speaker 4: if there's not enough spending cuts to offset it. How

904
00:43:36,920 --> 00:43:38,880
Speaker 4: much is that factoring into what we've been seeing.

905
00:43:39,760 --> 00:43:44,200
Speaker 10: So there's a lot darilan pack. But on the ninety day,

906
00:43:44,400 --> 00:43:48,120
Speaker 10: if I can remember everything, but on the ninety days.

907
00:43:48,040 --> 00:43:49,919
Speaker 5: Just explain the bombing market to us show.

908
00:43:50,040 --> 00:43:53,400
Speaker 10: Okay, so I think, so on why did the administration

909
00:43:54,000 --> 00:43:57,480
Speaker 10: make a very quick pivot? And to me, this is

910
00:43:57,520 --> 00:44:00,000
Speaker 10: my two cents, I'm just trying to figure this out

911
00:44:00,080 --> 00:44:03,759
Speaker 10: piece to puzzle together. But Kevin Hassett was rumorative set

912
00:44:03,800 --> 00:44:06,640
Speaker 10: a ninety day extension on Friday that was well before

913
00:44:06,680 --> 00:44:08,880
Speaker 10: the bond market. It's sold off sharply and coming in

914
00:44:08,960 --> 00:44:11,839
Speaker 10: Monday morning, the bond market to ten note was at

915
00:44:11,880 --> 00:44:14,440
Speaker 10: three eighty five and then since had a big move after.

916
00:44:14,840 --> 00:44:18,600
Speaker 10: I think once there was you know, chatter among the

917
00:44:18,680 --> 00:44:23,000
Speaker 10: various parties that there would be negotiations starting. My guess

918
00:44:23,080 --> 00:44:25,480
Speaker 10: is the administration said there's no point at this point

919
00:44:25,840 --> 00:44:29,080
Speaker 10: and not suspending for those countries that want to negotiate

920
00:44:29,120 --> 00:44:32,040
Speaker 10: with us. Now, what are we gaining by waiting now?

921
00:44:32,320 --> 00:44:34,359
Speaker 10: I don't think it was the bond market. I don't

922
00:44:34,360 --> 00:44:36,239
Speaker 10: think it was necessarily the equity market. I think it

923
00:44:36,280 --> 00:44:38,600
Speaker 10: was just the whole ray of factors. What are we getting,

924
00:44:38,640 --> 00:44:40,960
Speaker 10: what are we benefiting from? If we're having a conversation,

925
00:44:41,520 --> 00:44:45,520
Speaker 10: let's try to provide some clarity by having that negotiation. Now,

926
00:44:46,120 --> 00:44:49,160
Speaker 10: in terms of the budget, what I mentioned in seeing

927
00:44:49,400 --> 00:44:54,920
Speaker 10: is does the Senate parliamentarian, How does she attribute to scoring?

928
00:44:54,960 --> 00:44:57,279
Speaker 10: Are we going to go a current policy or are

929
00:44:57,280 --> 00:45:00,000
Speaker 10: we going to go to current law? Because that's definitely

930
00:45:00,239 --> 00:45:02,719
Speaker 10: numbers the CBO has. They do. We could debate what

931
00:45:02,760 --> 00:45:04,239
Speaker 10: the number will be, but the numbers they have on

932
00:45:04,280 --> 00:45:07,040
Speaker 10: paper simply do not make any sense. Because a policy

933
00:45:07,080 --> 00:45:09,319
Speaker 10: has been in place for over seven years that has

934
00:45:09,320 --> 00:45:11,600
Speaker 10: given us revenue share a GDP in line with his

935
00:45:11,719 --> 00:45:15,040
Speaker 10: long term average is not going to create by itself

936
00:45:15,760 --> 00:45:19,520
Speaker 10: a shortage of revenue and larger deficits. What will be

937
00:45:19,760 --> 00:45:22,040
Speaker 10: is if we have a recession, which I don't expect,

938
00:45:22,200 --> 00:45:24,480
Speaker 10: and then what happens, of course, on the spending side,

939
00:45:24,640 --> 00:45:26,600
Speaker 10: that's up for debate. I have no idea what happens

940
00:45:26,600 --> 00:45:28,719
Speaker 10: on the spending side. I'm hoping we could find some

941
00:45:28,719 --> 00:45:32,120
Speaker 10: common ground and make some cuts, but that we don't know,

942
00:45:32,200 --> 00:45:35,000
Speaker 10: and we won't know anything until Congress comes back in

943
00:45:35,080 --> 00:45:37,080
Speaker 10: two weeks following the Easter holiday.

944
00:45:38,600 --> 00:45:42,160
Speaker 4: All right, Joe Livornia, answering my multi part question. We

945
00:45:42,239 --> 00:45:42,920
Speaker 4: appreciate it.

946
00:45:43,000 --> 00:45:44,840
Speaker 5: As always. We're we're Special.

947
00:45:44,600 --> 00:45:46,880
Speaker 4: Assistant to the President, chief Economists for the NEEC in

948
00:45:46,920 --> 00:45:49,480
Speaker 4: the first Trump White House, now chief Economists for SMBC.

949
00:45:49,600 --> 00:45:51,799
Speaker 4: Eco Securities America. Always great to have you here.

950
00:45:54,040 --> 00:45:57,520
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch

951
00:45:57,600 --> 00:46:01,040
Speaker 1: us live weekdays at noon and five pm on Apple

952
00:46:01,120 --> 00:46:04,120
Speaker 1: Cockley and Android Auto with the Bloomberg Business App. You

953
00:46:04,160 --> 00:46:07,640
Speaker 1: can also listen live on Amazon Alexa from our flagship

954
00:46:07,719 --> 00:46:12,280
Speaker 1: New York station Just Say Alexa played Bloomberg eleven thirty.

955
00:46:13,239 --> 00:46:17,520
Speaker 4: Happening tomorrow are talks between the US and Iran. Those

956
00:46:17,560 --> 00:46:18,280
Speaker 4: set to take.

957
00:46:18,080 --> 00:46:18,840
Speaker 5: Place in Oman.

958
00:46:19,040 --> 00:46:21,200
Speaker 2: Yes, Seef Woo Coff, the President's envoy, continues to have

959
00:46:21,239 --> 00:46:23,760
Speaker 2: a very busy travel schedule since Saint Petersburg Rush today.

960
00:46:23,760 --> 00:46:26,080
Speaker 2: That plane that he flies on is going to mascot

961
00:46:26,080 --> 00:46:28,840
Speaker 2: Oman this weekend for those meetings that the US is

962
00:46:28,840 --> 00:46:31,720
Speaker 2: going to have with the Foreign Minister of Iran. Unclear

963
00:46:31,760 --> 00:46:33,840
Speaker 2: sort of how they'll unfold, who will be there mediating

964
00:46:33,840 --> 00:46:35,920
Speaker 2: those conversations or if they'll be direct, but they certainly

965
00:46:35,960 --> 00:46:39,919
Speaker 2: stand to be pivotal. Perhaps Chris Wright, the US Energy

966
00:46:39,920 --> 00:46:42,200
Speaker 2: Secretary of the seventeenth US Energy Secretary, is on Bloomberg

967
00:46:42,200 --> 00:46:45,120
Speaker 2: surveillance this morning talking about the importance of that meeting

968
00:46:45,560 --> 00:46:48,239
Speaker 2: for US energy policy. More broadly, Let's take a listen

969
00:46:48,239 --> 00:46:48,879
Speaker 2: to what he had to.

970
00:46:48,800 --> 00:46:53,120
Speaker 13: Say his genda can be summarized as prosperity at home

971
00:46:53,520 --> 00:46:57,000
Speaker 13: and piece abroad. Lower oil prices help both of those,

972
00:46:57,480 --> 00:47:00,600
Speaker 13: and the piece abroad that's the most concerned right now.

973
00:47:00,640 --> 00:47:02,560
Speaker 13: In the region where I am in the Middle East

974
00:47:02,880 --> 00:47:03,440
Speaker 13: is Iran.

975
00:47:04,040 --> 00:47:04,480
Speaker 2: Iran.

976
00:47:05,000 --> 00:47:09,080
Speaker 13: During the Biden administration, oil prices were higher. There was

977
00:47:09,480 --> 00:47:12,880
Speaker 13: sort of an appeasement attitude and no strong enforcement of sanctions,

978
00:47:13,520 --> 00:47:16,920
Speaker 13: enormous funding de Hamas to Hezbollah, to the Huthis, and

979
00:47:17,000 --> 00:47:20,720
Speaker 13: a rapid advancement of their nuclear program. President Trump's agenda

980
00:47:20,840 --> 00:47:24,600
Speaker 13: is exactly the opposite that it's peace through strength, but

981
00:47:24,719 --> 00:47:28,840
Speaker 13: we simply cannot and will not accept a nuclear armed Iran.

982
00:47:29,320 --> 00:47:31,120
Speaker 15: Well, when it comes to Ron, we saw even more

983
00:47:31,200 --> 00:47:34,480
Speaker 15: sanctions on the regime yesterday. When it comes to these

984
00:47:34,520 --> 00:47:36,719
Speaker 15: oil sanctions, the President has said he wants to go

985
00:47:36,760 --> 00:47:39,600
Speaker 15: back to maximum pressure. Is that part of the conversation

986
00:47:39,719 --> 00:47:43,040
Speaker 15: you're having with golf allies on this tour that they'd

987
00:47:43,040 --> 00:47:45,240
Speaker 15: be willing to step in if some of those Iranian

988
00:47:45,280 --> 00:47:46,640
Speaker 15: barrels come off the market.

989
00:47:50,000 --> 00:47:53,160
Speaker 13: Well, fortunately, just from the United States production itself and

990
00:47:53,280 --> 00:47:56,920
Speaker 13: the size of the global oil market today, absolutely we

991
00:47:57,000 --> 00:48:01,280
Speaker 13: can tolerate squeezing out Iranian exports that And of course,

992
00:48:01,360 --> 00:48:03,919
Speaker 13: do all the Gulf neighbors want the same thing we want.

993
00:48:04,120 --> 00:48:04,440
Speaker 3: Yes.

994
00:48:04,760 --> 00:48:08,600
Speaker 13: Do they fear a nuclear armed Iran? Absolutely? Do they

995
00:48:08,640 --> 00:48:11,520
Speaker 13: think now is the time to turn the screws and

996
00:48:11,640 --> 00:48:15,840
Speaker 13: end Iran's nuclear weapons program? Absolutely? But yeah, can the

997
00:48:15,880 --> 00:48:19,359
Speaker 13: world tolerate that? Absolutely? Ten years ago, twenty years ago,

998
00:48:19,440 --> 00:48:20,360
Speaker 13: could this have happened?

999
00:48:20,719 --> 00:48:20,839
Speaker 12: No?

1000
00:48:21,360 --> 00:48:25,440
Speaker 13: But today we both have large American oil production, better

1001
00:48:25,480 --> 00:48:29,440
Speaker 13: relations with our neighbors, and a strong resolute leader. In

1002
00:48:29,480 --> 00:48:32,480
Speaker 13: forty years of trouble, forty five years of trouble from Iran,

1003
00:48:32,760 --> 00:48:36,840
Speaker 13: we've never had a better chance to reduce Iranian power,

1004
00:48:37,000 --> 00:48:40,359
Speaker 13: reduce Iranian tyranny in the Middle East, and we don't

1005
00:48:40,360 --> 00:48:42,200
Speaker 13: want to miss that opportunity.

1006
00:48:41,680 --> 00:48:44,320
Speaker 15: Mister Secretary. The President has said a lot, even recently

1007
00:48:44,320 --> 00:48:46,160
Speaker 15: to me on Air Force One. He likes that. Guess

1008
00:48:46,239 --> 00:48:49,040
Speaker 15: oil prices are coming down? Do you and the President

1009
00:48:49,200 --> 00:48:50,760
Speaker 15: have a price in mind?

1010
00:48:54,360 --> 00:48:54,560
Speaker 6: Now?

1011
00:48:55,160 --> 00:48:59,800
Speaker 13: My whole life, I've avoided predicting prices or dictating prices.

1012
00:49:00,280 --> 00:49:03,000
Speaker 13: You know, we have a wonderful free market economy. That's

1013
00:49:03,040 --> 00:49:05,920
Speaker 13: what makes the world wealthier, That's what allows consumers to

1014
00:49:06,040 --> 00:49:10,120
Speaker 13: continually re express choices in every direction. So now there's

1015
00:49:10,120 --> 00:49:12,000
Speaker 13: no formula for a good oil price.

1016
00:49:14,800 --> 00:49:18,520
Speaker 4: Insightful conversation with the Energy Secretary Chris Right earlier today

1017
00:49:18,560 --> 00:49:21,040
Speaker 4: on Surveillance with our colleague and Marie hor Dern, as

1018
00:49:21,080 --> 00:49:23,719
Speaker 4: we consider the prospects of the talks happening tomorrow between

1019
00:49:23,760 --> 00:49:25,719
Speaker 4: the US and Iran and what implications they may have

1020
00:49:26,160 --> 00:49:29,120
Speaker 4: for global energy markets, we turned to Ellen Wall, nonresident,

1021
00:49:29,120 --> 00:49:31,840
Speaker 4: Senior Fellow with the Atlantic Council Global Energy Center and

1022
00:49:31,960 --> 00:49:37,080
Speaker 4: President of Transversal Consulting. Welcome back to Bloomberg TV and Radio. Ellen,

1023
00:49:37,120 --> 00:49:39,879
Speaker 4: when we considered the moment at which we're having the conversation,

1024
00:49:41,000 --> 00:49:44,080
Speaker 4: or the US in Iran is entering these conversations in

1025
00:49:44,160 --> 00:49:47,359
Speaker 4: global oil markets, knowing OPEC plus is suddenly putting more

1026
00:49:47,400 --> 00:49:51,360
Speaker 4: supply onto the market despite weakness in prices. What difference

1027
00:49:51,760 --> 00:49:54,560
Speaker 4: does the supply of Iranian crude, whether it is more

1028
00:49:54,600 --> 00:49:57,799
Speaker 4: constrained or potentially more available on the market, how does

1029
00:49:57,840 --> 00:49:59,440
Speaker 4: that impact the overall picture.

1030
00:50:00,719 --> 00:50:03,640
Speaker 16: That's a really good, good question, and I think there

1031
00:50:03,760 --> 00:50:06,560
Speaker 16: are a couple key points here. And it's interesting that

1032
00:50:07,000 --> 00:50:10,080
Speaker 16: the US Energy Secretary of things that you know, getting

1033
00:50:10,120 --> 00:50:12,360
Speaker 16: rid of all Iranian barrels from market is something that

1034
00:50:12,360 --> 00:50:16,560
Speaker 16: the market could tolerate. I think he's probably right, but

1035
00:50:16,800 --> 00:50:19,320
Speaker 16: it's not going to be quite as easy as he thinks.

1036
00:50:19,320 --> 00:50:23,439
Speaker 16: There's definitely spare capacity on you know, available that could

1037
00:50:23,640 --> 00:50:26,480
Speaker 16: definitely make up for Iranian barrels if they choose to

1038
00:50:26,520 --> 00:50:29,680
Speaker 16: really squeeze on the sanctions. But I think you will

1039
00:50:29,680 --> 00:50:32,839
Speaker 16: find that China will get very very upset by this

1040
00:50:32,880 --> 00:50:38,359
Speaker 16: because they really like their discounted Iranian oil. But given

1041
00:50:38,400 --> 00:50:41,240
Speaker 16: that President Trump seems to want to negotiate all things

1042
00:50:41,280 --> 00:50:44,600
Speaker 16: with China, I'm sure that you know this is also

1043
00:50:44,800 --> 00:50:49,640
Speaker 16: up for up for negotiation. Maybe if China agrees to

1044
00:50:49,680 --> 00:50:53,600
Speaker 16: buy less Iranian oil and really help squeeze itrun. President

1045
00:50:53,640 --> 00:50:56,840
Speaker 16: Trump's willing to make changes in the teriff regime there,

1046
00:50:56,920 --> 00:51:00,400
Speaker 16: so I wouldn't be surprised if it's all it's all together,

1047
00:51:00,440 --> 00:51:03,440
Speaker 16: it's all lumped together, it's all up for negotiation. I

1048
00:51:03,440 --> 00:51:05,919
Speaker 16: do think that, you know, when you look at maybe

1049
00:51:05,960 --> 00:51:08,279
Speaker 16: a potential for more Mani and barrels to come on

1050
00:51:08,320 --> 00:51:11,640
Speaker 16: the market down the line, say after some kind of

1051
00:51:11,719 --> 00:51:15,200
Speaker 16: an agreement, that's something that the oil market and the

1052
00:51:15,239 --> 00:51:17,759
Speaker 16: global market's going to have to work out. It would

1053
00:51:17,760 --> 00:51:20,799
Speaker 16: be great if that happened in conjunction with you know,

1054
00:51:21,120 --> 00:51:24,760
Speaker 16: an economic boom where demand is trending higher than opposed

1055
00:51:24,800 --> 00:51:27,200
Speaker 16: to right now, where we're not really so sure.

1056
00:51:28,760 --> 00:51:30,200
Speaker 2: Ellen, I was struck, I don't know if you were,

1057
00:51:30,200 --> 00:51:32,160
Speaker 2: by what we heard there from the Energy Secretary. At

1058
00:51:32,160 --> 00:51:33,640
Speaker 2: the end of those comments, he says he doesn't have

1059
00:51:33,680 --> 00:51:35,759
Speaker 2: a price in mind, and there's no formula for a

1060
00:51:35,760 --> 00:51:37,960
Speaker 2: good oil price. I'm surprised only because he was the

1061
00:51:38,000 --> 00:51:40,120
Speaker 2: CEO of Liberty Energy in his spenshial career in the

1062
00:51:40,200 --> 00:51:42,000
Speaker 2: energy business, I would assume that he would have some

1063
00:51:42,120 --> 00:51:44,520
Speaker 2: sense of that. What do you make of that? As

1064
00:51:44,560 --> 00:51:47,120
Speaker 2: you look at WTI here at sixty one forty four barrel,

1065
00:51:47,160 --> 00:51:49,120
Speaker 2: and we see these prices drifting lower over the course

1066
00:51:49,160 --> 00:51:51,839
Speaker 2: of the week, this is bound or likely to pose

1067
00:51:51,880 --> 00:51:55,040
Speaker 2: some problems for producers here here in this country. How

1068
00:51:55,040 --> 00:51:57,240
Speaker 2: do you define how do you identify a good price

1069
00:51:57,280 --> 00:51:58,720
Speaker 2: here for oil in this environment?

1070
00:51:59,640 --> 00:51:59,880
Speaker 8: You know?

1071
00:52:00,200 --> 00:52:03,400
Speaker 16: I think the Energy Secretary was giving the Ali Naimi

1072
00:52:03,480 --> 00:52:05,880
Speaker 16: answer where everyone would ask him he used to be

1073
00:52:05,920 --> 00:52:09,359
Speaker 16: the energy you know for Saudi Arabia and the CEO

1074
00:52:09,400 --> 00:52:10,800
Speaker 16: of a rampone. He would say, you know, if I

1075
00:52:10,880 --> 00:52:13,400
Speaker 16: knew with oil prices would be I'd be in Vegas

1076
00:52:13,480 --> 00:52:15,879
Speaker 16: or you know, there is no perfect oil price. So see,

1077
00:52:15,880 --> 00:52:19,400
Speaker 16: it was really challenge channeling that he definitely has an

1078
00:52:19,400 --> 00:52:22,000
Speaker 16: optimal oil price in mind. The question is is it

1079
00:52:22,040 --> 00:52:24,840
Speaker 16: the optimal oil price for consumers or the optimal price

1080
00:52:24,840 --> 00:52:27,400
Speaker 16: for producers? And those are two very different things. And

1081
00:52:27,480 --> 00:52:31,480
Speaker 16: so right now, US producers are not really liking oil

1082
00:52:31,520 --> 00:52:35,120
Speaker 16: prices right now. They'd rather see things higher, particularly because

1083
00:52:35,160 --> 00:52:38,080
Speaker 16: their costs are increasing. The cost to complete a well

1084
00:52:38,360 --> 00:52:41,360
Speaker 16: has just gone sky high with all of these tariffs

1085
00:52:41,400 --> 00:52:44,400
Speaker 16: on steel and in particular the tubular goods that they

1086
00:52:44,440 --> 00:52:47,960
Speaker 16: need to complete wells, and so you know, with prices

1087
00:52:48,280 --> 00:52:50,640
Speaker 16: trending lower, they're going to have to ask themselves is

1088
00:52:50,680 --> 00:52:53,600
Speaker 16: it really worth it to complete this well here at

1089
00:52:53,680 --> 00:52:56,920
Speaker 16: current prices? And so those are some hard decisions that

1090
00:52:56,960 --> 00:52:59,080
Speaker 16: producers are going to have to make, and every producer

1091
00:52:59,160 --> 00:53:01,920
Speaker 16: has a different price point at which it makes sense.

1092
00:53:02,120 --> 00:53:05,160
Speaker 16: Smaller producers they're going to be the first to shut in.

1093
00:53:05,520 --> 00:53:09,520
Speaker 16: Larger producers like Exxon Chevron, they're going to be able

1094
00:53:09,560 --> 00:53:11,880
Speaker 16: to keep to keep going for longer.

1095
00:53:13,320 --> 00:53:13,480
Speaker 12: Well.

1096
00:53:13,520 --> 00:53:15,520
Speaker 4: So it's what I'm hearing from you Ellen, this notion

1097
00:53:15,560 --> 00:53:18,319
Speaker 4: of unleashing American energy drill, baby drill, that that's going

1098
00:53:18,320 --> 00:53:20,719
Speaker 4: to offset whatever cost pressures may arise, or at least

1099
00:53:20,760 --> 00:53:23,560
Speaker 4: a good deal of cost pressures that arise from higher

1100
00:53:23,560 --> 00:53:26,719
Speaker 4: tariffs on imports, that that's not necessarily how this is

1101
00:53:26,760 --> 00:53:29,480
Speaker 4: realistically going to go down in terms of domestic production.

1102
00:53:30,920 --> 00:53:33,799
Speaker 16: I would say that I see drill, baby, drill, and

1103
00:53:34,440 --> 00:53:36,799
Speaker 16: you know, unleashing American energy is kind of more of

1104
00:53:36,840 --> 00:53:40,440
Speaker 16: a long term strategy. Right now, we're a very high

1105
00:53:40,520 --> 00:53:42,960
Speaker 16: levels of production. We really don't actually need any more

1106
00:53:43,000 --> 00:53:47,800
Speaker 16: American oil coming into production right now, but you know, ten, fifteen,

1107
00:53:47,880 --> 00:53:50,040
Speaker 16: twenty years down the line, we're going to need that.

1108
00:53:50,120 --> 00:53:52,279
Speaker 16: And the things that we can put in place now

1109
00:53:52,320 --> 00:53:54,560
Speaker 16: and do now are going to make it able.

1110
00:53:54,760 --> 00:53:56,040
Speaker 5: We're going to make it possible for.

1111
00:53:56,080 --> 00:54:00,480
Speaker 16: Us to unleash American energy dominance in you know year.

1112
00:54:00,600 --> 00:54:03,960
Speaker 16: So I think that they're not exactly they're not necessarily

1113
00:54:04,000 --> 00:54:06,560
Speaker 16: meant to coexist. The low oil prices, the trade ward

1114
00:54:06,640 --> 00:54:10,719
Speaker 16: right now, it's really causing some pain. What what producers

1115
00:54:10,800 --> 00:54:13,040
Speaker 16: would really like now is some reassurance from the Trump

1116
00:54:13,080 --> 00:54:16,799
Speaker 16: administration that this is a temporary turbulence. It's going to

1117
00:54:17,080 --> 00:54:18,920
Speaker 16: you know, be behind us soon, and they're going to

1118
00:54:18,920 --> 00:54:22,000
Speaker 16: be able to make decisions about how to deploy capital,

1119
00:54:22,480 --> 00:54:24,879
Speaker 16: you know, for the future, as soon as this this

1120
00:54:25,200 --> 00:54:26,000
Speaker 16: shakes out.

1121
00:54:27,320 --> 00:54:29,279
Speaker 2: As soon as this shakes out, and you've taken us

1122
00:54:29,360 --> 00:54:31,600
Speaker 2: right where I want to go, which is, how are producers?

1123
00:54:31,600 --> 00:54:34,160
Speaker 2: How are oil companies looking at the unsearchy we've been

1124
00:54:34,160 --> 00:54:36,640
Speaker 2: talking about so kind of detailing this conversation about Tariff's

1125
00:54:36,640 --> 00:54:41,040
Speaker 2: policy and this ninety day pause with your world with oil,

1126
00:54:41,640 --> 00:54:43,400
Speaker 2: I imagine it's having a chilling effect as it is

1127
00:54:43,440 --> 00:54:46,759
Speaker 2: in many other sectors. What is the oil industry waiting for?

1128
00:54:46,760 --> 00:54:48,600
Speaker 2: What would what would amount to the kind of certainty

1129
00:54:48,600 --> 00:54:51,920
Speaker 2: they need here to proceed with with with capex expenditure,

1130
00:54:52,400 --> 00:54:54,480
Speaker 2: capital expenditure in the way that they were before.

1131
00:54:55,800 --> 00:54:57,719
Speaker 16: That is a really good question, and I think what

1132
00:54:57,760 --> 00:55:01,319
Speaker 16: they need is some kind of road for what the

1133
00:55:01,320 --> 00:55:03,879
Speaker 16: Trump administration is planning for the next four years when

1134
00:55:03,880 --> 00:55:07,720
Speaker 16: it comes to energy policy. What are the regulatory changes

1135
00:55:07,760 --> 00:55:09,959
Speaker 16: going to look like? What's the regulatory regime.

1136
00:55:09,640 --> 00:55:10,080
Speaker 5: Going to be?

1137
00:55:10,480 --> 00:55:12,920
Speaker 16: All we know is that some of the regulations from

1138
00:55:12,920 --> 00:55:15,520
Speaker 16: the Biden administration have been done away with, But we

1139
00:55:15,560 --> 00:55:17,680
Speaker 16: don't know what's coming in their place. They don't know,

1140
00:55:17,960 --> 00:55:20,160
Speaker 16: and they would like to know. And so the best

1141
00:55:20,160 --> 00:55:22,920
Speaker 16: thing that the Trump administration could do for the energy

1142
00:55:22,960 --> 00:55:26,440
Speaker 16: industry right now is to give them a roadmap. You know,

1143
00:55:26,560 --> 00:55:29,520
Speaker 16: here are the kind of permitting, you know, things we're

1144
00:55:29,520 --> 00:55:31,319
Speaker 16: trying to do, we want to put in a place. Here,

1145
00:55:31,680 --> 00:55:33,719
Speaker 16: Here are the steps we're going to take to ensure

1146
00:55:33,880 --> 00:55:37,040
Speaker 16: that these changes that we're making can't be undone by

1147
00:55:37,080 --> 00:55:41,120
Speaker 16: a future administration. Yes, these trade issues are a big

1148
00:55:41,160 --> 00:55:44,880
Speaker 16: deal now, but we expect in a year or a

1149
00:55:44,960 --> 00:55:46,439
Speaker 16: year and a half there's going to be a lot

1150
00:55:46,480 --> 00:55:50,520
Speaker 16: of American made steel available for purchase. And here's what

1151
00:55:50,520 --> 00:55:52,439
Speaker 16: we're going to do to make that possible. And those

1152
00:55:52,520 --> 00:55:56,080
Speaker 16: kinds of things would really help the executives that these

1153
00:55:56,080 --> 00:56:00,920
Speaker 16: oil companies feel more secure about making decisions to deploy

1154
00:56:01,480 --> 00:56:04,680
Speaker 16: capital to say yes to that big project to drill

1155
00:56:04,800 --> 00:56:08,680
Speaker 16: exploratory wells, because they will have the surety that they

1156
00:56:08,680 --> 00:56:11,160
Speaker 16: need that yes, when they apply for that permit, they

1157
00:56:11,160 --> 00:56:14,360
Speaker 16: can expect to get it in thirty days, not a year,

1158
00:56:14,480 --> 00:56:16,960
Speaker 16: and not have it challenged by ten different people.

1159
00:56:18,640 --> 00:56:20,400
Speaker 4: Ellen, I'd like to ask you about something else that

1160
00:56:20,440 --> 00:56:23,200
Speaker 4: the President has floated and we haven't heard as much about,

1161
00:56:23,239 --> 00:56:25,080
Speaker 4: at least within the last week or so, which is

1162
00:56:25,080 --> 00:56:29,319
Speaker 4: this notion of using secondary tariffs, which isn't something that

1163
00:56:29,320 --> 00:56:33,560
Speaker 4: has previously existed in geoeconomics on countries that buy oil

1164
00:56:33,800 --> 00:56:37,560
Speaker 4: and energy from Venezuela or Russia. He has threatened to

1165
00:56:37,640 --> 00:56:40,680
Speaker 4: do this depending on whether or not he extracts the

1166
00:56:40,680 --> 00:56:43,120
Speaker 4: behavioral changes he would like to see from Venezuela when

1167
00:56:43,120 --> 00:56:47,080
Speaker 4: it comes to cooperation with migrant issues that he thinks

1168
00:56:47,080 --> 00:56:49,520
Speaker 4: they are not currently cooperating with the administration on in

1169
00:56:49,600 --> 00:56:52,560
Speaker 4: Russia when it comes to ongoing conversations around ending the

1170
00:56:52,600 --> 00:56:53,360
Speaker 4: war in Ukraine?

1171
00:56:53,400 --> 00:56:54,520
Speaker 5: Is that threat real to you?

1172
00:56:54,600 --> 00:56:58,440
Speaker 4: What would secondary tariffs on that crude actually mean for

1173
00:56:58,520 --> 00:56:59,880
Speaker 4: the global market.

1174
00:57:00,960 --> 00:57:04,080
Speaker 16: Yeah, that's that's a very complicated question because we know

1175
00:57:04,160 --> 00:57:07,719
Speaker 16: what secondary sanctions means. I think that the difference that

1176
00:57:07,719 --> 00:57:11,479
Speaker 16: we're looking at between a secondary tariff in whatever that

1177
00:57:11,480 --> 00:57:13,799
Speaker 16: that looks like, in a secondary sanction might be that

1178
00:57:14,400 --> 00:57:18,320
Speaker 16: sanctions are actually really hard to enforce. So really the

1179
00:57:18,320 --> 00:57:20,920
Speaker 16: way that it works is that people get scared about

1180
00:57:21,080 --> 00:57:24,240
Speaker 16: sanctions being enforced and so they adhere to them. To

1181
00:57:24,280 --> 00:57:27,880
Speaker 16: actually enforce the sanction requires a lot of effort and time,

1182
00:57:27,960 --> 00:57:29,520
Speaker 16: and you've got to make a really big case. You've

1183
00:57:29,520 --> 00:57:31,360
Speaker 16: got to assemble a lot of evidence and only then

1184
00:57:31,400 --> 00:57:33,160
Speaker 16: can you find them and get the money, And it

1185
00:57:33,200 --> 00:57:36,840
Speaker 16: takes a long time. With tariffs, I think the idea

1186
00:57:36,920 --> 00:57:39,240
Speaker 16: is that it's much quicker. You're not going to have

1187
00:57:39,240 --> 00:57:42,560
Speaker 16: to go through an entire process and assemble this evidence

1188
00:57:42,640 --> 00:57:44,320
Speaker 16: that you know, he can kind of say, all right, well,

1189
00:57:44,360 --> 00:57:48,080
Speaker 16: I'm putting this tariff on Spain because they're buying you know,

1190
00:57:48,320 --> 00:57:51,800
Speaker 16: this thing from Venezuela, and Venezuela is not you know,

1191
00:57:52,440 --> 00:57:55,520
Speaker 16: concurring with what we want in terms of their drug policy.

1192
00:57:55,600 --> 00:57:58,240
Speaker 16: And because he has a lot more leeway with how

1193
00:57:58,280 --> 00:58:01,920
Speaker 16: to deploy a terror, it can be deployed much faster

1194
00:58:02,040 --> 00:58:05,800
Speaker 16: than say, enforcing a sanction. But you know, I'm kind

1195
00:58:05,800 --> 00:58:07,120
Speaker 16: of in the same boat as you guys. We're not

1196
00:58:07,120 --> 00:58:09,240
Speaker 16: exactly sure what this looks like because we'd never really

1197
00:58:09,280 --> 00:58:10,600
Speaker 16: seen it employed before.

1198
00:58:11,960 --> 00:58:13,480
Speaker 2: Ellen, great to get those insights from you. Thank you

1199
00:58:13,560 --> 00:58:15,600
Speaker 2: very much. That's Ellen Waald, non Resident Senior Fellow in

1200
00:58:15,640 --> 00:58:17,960
Speaker 2: the Global Energy Center at the Atlantic Council, also the

1201
00:58:17,960 --> 00:58:20,280
Speaker 2: president of Transversal Consulting. As we talk about the oil

1202
00:58:20,280 --> 00:58:22,960
Speaker 2: market again, we've seen wt IRN sixty one dollars a

1203
00:58:22,960 --> 00:58:25,000
Speaker 2: barrel today over these last few days, that drift downward

1204
00:58:25,040 --> 00:58:27,440
Speaker 2: in oil prices, and just to keep an eye on

1205
00:58:27,440 --> 00:58:28,720
Speaker 2: all of the markets here as we kind of push

1206
00:58:28,760 --> 00:58:31,560
Speaker 2: to the weekend. Enthusiasm evidently for the weekend as well,

1207
00:58:31,600 --> 00:58:33,400
Speaker 2: after this very rough week and the equities markets we

1208
00:58:33,400 --> 00:58:35,160
Speaker 2: see the S and P five hundred up two point

1209
00:58:35,200 --> 00:58:37,360
Speaker 2: two percent, the down the S and P five hundred,

1210
00:58:37,360 --> 00:58:39,840
Speaker 2: and the NASTAC all up on this afternoon. In the

1211
00:58:39,880 --> 00:58:41,800
Speaker 2: bond market, it has been a different story here today

1212
00:58:41,840 --> 00:58:50,880
Speaker 2: and over the course of the week. Thanks for listening

1213
00:58:50,920 --> 00:58:54,280
Speaker 2: to the Balance of Power podcast. Make sure to subscribe

1214
00:58:54,320 --> 00:58:57,000
Speaker 2: if you haven't already, at Apple, Spotify, or wherever you

1215
00:58:57,040 --> 00:58:59,720
Speaker 2: get your podcasts, and you can find us live every

1216
00:58:59,760 --> 00:59:03,360
Speaker 2: week day from Washington, DC at noontime Eastern at Bloomberg

1217
00:59:03,440 --> 00:59:04,160
Speaker 2: dot com.