WEBVTT - Trump’s Global Tariffs Struck Down by US Supreme Court 0:00:02.520 --> 0:00:10.520 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business 0:00:10.520 --> 0:00:14.400 Week Daily reporting from the magazine that helps global leaders 0:00:14.440 --> 0:00:18.360 stay ahead with insight on the people, companies, and trends 0:00:18.360 --> 0:00:23.360 shaping today's complex economy. Plus global business finance and tech 0:00:23.440 --> 0:00:27.320 news as it happens. The Bloomberg Business Week Daily Podcast 0:00:27.640 --> 0:00:31.720 with Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:32.440 --> 0:00:35.320 We head to DC. Bloomberg News Supreme Court reporter Greg 0:00:35.320 --> 0:00:38.080 Store was listening to President Trump as well. He is 0:00:38.080 --> 0:00:40.760 in the Bloomberg News bureau in the nation's capital. Greg, 0:00:40.800 --> 0:00:44.919 it's a big day. We kind of expected this outcome, 0:00:45.000 --> 0:00:46.960 but I don't know that we expected the decision today. 0:00:47.320 --> 0:00:49.960 But exactly what was the decision and the significance of 0:00:50.000 --> 0:00:50.800 it walk us through it. 0:00:51.560 --> 0:00:54.800 So the significance is that the main the pillar of 0:00:55.000 --> 0:00:58.400 the tariffs that the president has been imposing over the 0:00:58.480 --> 0:01:02.040 last year does not give him teriff authority. The Supreme 0:01:02.080 --> 0:01:04.720 Court said it knocked out more than half of the 0:01:04.760 --> 0:01:09.760 tariffs that Donald Trump has imposed since returning to office. 0:01:09.959 --> 0:01:13.720 The Supreme Court said that statute, which gives the president 0:01:13.800 --> 0:01:19.119 certain powers during economic emergencies, does not include the tariff power, 0:01:19.600 --> 0:01:21.800 and that was sort of the fundamental dividing point that 0:01:21.840 --> 0:01:25.960 thessending justices said, Yes, it does. Now, as the President suggested, 0:01:26.520 --> 0:01:28.800 there are other tariff authorities. He's going to try to 0:01:28.840 --> 0:01:31.360 invoke those as much as he can, but those do 0:01:31.440 --> 0:01:34.080 tend to be more cumbersome, more limited, and so we'll 0:01:34.080 --> 0:01:36.440 see just how much he's able to replace the tariffs 0:01:36.480 --> 0:01:37.440 that have been struck down. 0:01:37.920 --> 0:01:41.200 Where does this go next? Is this ever coming back 0:01:41.280 --> 0:01:44.000 to the Supreme Court or are the next steps here 0:01:44.080 --> 0:01:45.959 really going just back to lower courts? 0:01:46.680 --> 0:01:48.400 It's really give me the lower courts. There will be 0:01:48.440 --> 0:01:51.200 big fights over refunds. In that press conference, the President 0:01:51.240 --> 0:01:54.520 said he expects that to be litigated over a matter 0:01:54.560 --> 0:01:58.080 of years. It's not yet clear what argument the administration 0:01:58.160 --> 0:02:01.880 has against refunds for the one hundred and seventy billion 0:02:01.920 --> 0:02:04.960 dollars that have been paid in these tariffs under this law, 0:02:05.280 --> 0:02:08.000 but it sounds like they are prepared to at least 0:02:08.040 --> 0:02:10.120 make some of them. So that will be a big fight, 0:02:10.440 --> 0:02:12.960 and then we may well have future fights over these 0:02:13.000 --> 0:02:15.920 other laws, including the one that the President said he 0:02:16.520 --> 0:02:19.040 is going to use to impose that ten percent global tariff. 0:02:19.560 --> 0:02:23.480 That's a more limited authority that is supposed to extend 0:02:23.520 --> 0:02:25.880 only for one hundred and fifty days. There may be 0:02:26.000 --> 0:02:30.320 questions about the exact parameters of what Donald Trump can 0:02:30.320 --> 0:02:31.160 do under that law. 0:02:32.400 --> 0:02:35.600 I am curious to Greg about what the President said 0:02:36.480 --> 0:02:40.240 about foreign influence of the Supreme Court, and he said, 0:02:40.240 --> 0:02:43.840 in my opinion, the court has been swayed. What is 0:02:43.880 --> 0:02:46.960 your read on that and what is he maybe insinuating. 0:02:47.880 --> 0:02:50.720 It's a bit of a head scratcher, you know. The President, 0:02:50.720 --> 0:02:53.560 of course has always said that these tariffs are paid 0:02:53.560 --> 0:02:56.560 by foreign countries, not by US importers. Well, the US 0:02:56.600 --> 0:02:59.280 importers have made very clear ensuing over these things, that 0:02:59.280 --> 0:03:02.079 they're the ones who are paying for them, and so 0:03:02.280 --> 0:03:05.720 that is perhaps what he's alluding to there. You know, 0:03:05.800 --> 0:03:08.360 certainly no evidence of that that I've seen in the 0:03:08.400 --> 0:03:11.600 opinion that it was anything other than their interpretation of 0:03:11.639 --> 0:03:14.200 what the law and the Constitution require. 0:03:14.919 --> 0:03:18.000 I'm wondering, you know, this decision, the six to three decision, 0:03:18.080 --> 0:03:20.960 what kind of clarity does it give us about just 0:03:21.320 --> 0:03:24.000 how much power the executive branch has, Because of course, 0:03:24.280 --> 0:03:26.560 right after the decision, we have Trump coming out and saying, 0:03:26.960 --> 0:03:29.520 you know, floating another ten percent global tariff. 0:03:30.360 --> 0:03:33.280 Yeah, well so kind of two halves to the answer. 0:03:33.360 --> 0:03:36.960 One half is the president is right, he has other authorities. 0:03:36.960 --> 0:03:39.200 And the Supreme Court didn't say you couldn't put in 0:03:39.240 --> 0:03:42.520 place any tariffs at all. You just can't do it 0:03:42.680 --> 0:03:46.880 using this law that the president has used so far 0:03:47.400 --> 0:03:50.720 up until now to basically impost tariffs for any reason 0:03:50.760 --> 0:03:54.600 at all that he wants. So in that sense it's narrow. 0:03:54.720 --> 0:03:57.920 But the Court also, in a section that was joined 0:03:57.920 --> 0:04:01.720 by two Trump appointees Neil Gorsich, Amy Cony Barrett, and 0:04:01.760 --> 0:04:05.680 also the Chief Justice John Roberts, you know, talked about 0:04:06.280 --> 0:04:11.720 Congress's terrorf authority, Congress's taxing authority and said that unless 0:04:11.800 --> 0:04:15.240 a stat unless Congress has clearly handed over that power 0:04:15.320 --> 0:04:17.680 to the president, we're not just going to assume that 0:04:17.720 --> 0:04:20.800 the president can do something. There are actual limits to 0:04:20.880 --> 0:04:23.320 what he can do. And the Court invoked some of 0:04:23.360 --> 0:04:27.200 the opinions that used to roll back to trim to 0:04:27.279 --> 0:04:30.760 knock out some of Joe Biden's initiatives. So the Court 0:04:30.920 --> 0:04:33.720 at least, you know, three Republican appointed members of the 0:04:33.760 --> 0:04:35.400 Court as well as the liberals, we're trying to send 0:04:35.400 --> 0:04:38.080 the message that hey, we are putting some real limits 0:04:38.120 --> 0:04:40.440 on what this president like all presidents can do. 0:04:40.800 --> 0:04:42.960 Yeah, And I love that question from Emily and what 0:04:43.000 --> 0:04:46.200 you just said, Greg, because I do think about, you 0:04:46.240 --> 0:04:50.200 know what the president. You know, we've talked so much 0:04:50.240 --> 0:04:54.520 about the expansion of the executive branch and of presidential 0:04:54.600 --> 0:04:57.599 powers in this second term of a Trump white House, 0:04:58.160 --> 0:05:01.880 and it does seem like this many would say, can 0:05:01.920 --> 0:05:04.040 do just about anything. Right. We've seen a Congress that's 0:05:04.120 --> 0:05:08.000 very quiet, a Republican led Congress. But having said that, 0:05:09.040 --> 0:05:11.480 how do you read the tea leaves on a Supreme 0:05:11.560 --> 0:05:14.800 Court that has been seen to be very sympathetic and 0:05:14.839 --> 0:05:18.640 maybe even political, some would say to President Trump specifically 0:05:18.640 --> 0:05:21.800 and his policies to make this ruling or did they 0:05:21.839 --> 0:05:24.640 not really have any choice based on it was pretty 0:05:25.120 --> 0:05:27.039 black and white in terms of the law. 0:05:27.839 --> 0:05:30.880 Well, certainly important to emphasize, as you alluded to, that 0:05:31.279 --> 0:05:33.240 over the past year, the Supreme Court has let Donald 0:05:33.240 --> 0:05:35.239 Trump do an awful lot of things that he wanted 0:05:35.279 --> 0:05:37.840 to do, most of them only on a temporary basis, 0:05:37.920 --> 0:05:42.239 letting him fire people, letting him not spend money, letting 0:05:42.360 --> 0:05:46.719 him in immigration programs. And you know, that's still a 0:05:46.760 --> 0:05:50.080 reality that the Trump that the court is is being 0:05:50.160 --> 0:05:52.600 pretty deferential to Donald Trump in a lot of areas, 0:05:52.960 --> 0:05:56.320 but these were totally different legal questions. As I said, 0:05:56.720 --> 0:06:00.520 the Constitution says the tariff power is congresses, and the 0:06:00.600 --> 0:06:03.640 Court was looking at this case as a separation of 0:06:03.720 --> 0:06:06.000 powers case, unlike the other ones. 0:06:05.760 --> 0:06:07.240 That it had been dealing with. 0:06:07.440 --> 0:06:10.680 And this is a place where from the Court's perspective, 0:06:10.680 --> 0:06:11.960 Donald Trump just went too far. 0:06:13.320 --> 0:06:16.200 Stay with us more from Bloomberg Business Week Daily coming 0:06:16.279 --> 0:06:17.200 up after this. 0:06:21.000 --> 0:06:24.880 You're listening to the Bloomberg Business Week Daily podcast. Catch 0:06:24.960 --> 0:06:28.159 us live weekday afternoons from two to five eastering. Listen 0:06:28.200 --> 0:06:31.760 on Applecarplay and Android Otto with the Bloomberg Business app, 0:06:31.920 --> 0:06:33.800 or watch us live on YouTube. 0:06:34.920 --> 0:06:37.239 We're going to stay with this story, and we touched 0:06:37.279 --> 0:06:39.880 on some of this, certainly from the press conference with 0:06:40.000 --> 0:06:42.039 the President there at the White House, but also with 0:06:42.120 --> 0:06:44.640 Greg and we want to get into maybe a little 0:06:44.640 --> 0:06:47.279 bit more of what we are hearing from that press conference. 0:06:47.320 --> 0:06:49.880 After that press conference, what's going on inside the White House. 0:06:50.120 --> 0:06:52.600 And for that we want to get to Bloomberg News 0:06:52.600 --> 0:06:56.240 White House correspondent Kate Sullivan, who just ran to the 0:06:56.320 --> 0:06:59.880 microphone there on the north lawn of the White House. 0:07:00.400 --> 0:07:02.440 Kate Good to have you or you were in the 0:07:02.520 --> 0:07:04.360 room tell us a little bit about what that felt 0:07:04.400 --> 0:07:08.760 like on what is certainly got to be I think 0:07:08.760 --> 0:07:10.800 safe to say the president's got to be feeling a 0:07:10.840 --> 0:07:15.640 big defeat with what is a major policy of his 0:07:15.760 --> 0:07:17.200 second term here in the White House. 0:07:18.800 --> 0:07:21.840 Absolutely, So, we just wrapped that press conference and we 0:07:21.920 --> 0:07:25.400 saw a very defiant Trump at the podium. You know, 0:07:25.440 --> 0:07:28.560 there's a lot to unpack from that press conference, but 0:07:28.640 --> 0:07:31.000 some of the top lines are the President is going 0:07:31.080 --> 0:07:34.080 said that he would be signing new orders to impose 0:07:34.320 --> 0:07:37.040 tariffs to replace some of these tariffs. He talked about 0:07:37.120 --> 0:07:40.640 using Section one twenty two to impose a ten percent 0:07:40.720 --> 0:07:43.880 across the board tariff. Also talked about Section three oho one, 0:07:43.960 --> 0:07:47.960 which applies to unfair trade practices. I asked the President 0:07:48.080 --> 0:07:50.800 about whether this meant that he would now be asking 0:07:50.840 --> 0:07:54.040 Congress to take additional action when it comes to tariffs, 0:07:54.040 --> 0:07:56.120 and if he'd spoken to Leader thun about this. I 0:07:56.160 --> 0:07:58.640 thought it was really interesting. He said, I don't need to. 0:07:58.880 --> 0:08:01.120 I'm not going to do that because I don't need to. 0:08:01.520 --> 0:08:03.840 I felt like the top line from the President was 0:08:04.040 --> 0:08:06.520 We're still going to have tariffs, but they're just going 0:08:06.560 --> 0:08:08.720 to look a bit different, and I thought it was interesting. 0:08:08.760 --> 0:08:11.600 He talked a lot about certainty. He kept repeating the 0:08:11.600 --> 0:08:14.880 worst certainty, saying that for a very long time, we 0:08:14.880 --> 0:08:17.360 were waiting to see how this decision was going to 0:08:17.400 --> 0:08:19.280 play out, what was going to happen, and we were 0:08:19.280 --> 0:08:21.760 living in sort of a limbo period. The White House was, 0:08:22.200 --> 0:08:25.200 And now at least they know what has happened. They 0:08:25.200 --> 0:08:27.520 have some certainty, and they think that that should inspire 0:08:27.560 --> 0:08:31.120 some confidence and really sort of now dictates how they're 0:08:31.160 --> 0:08:31.760 going to move. 0:08:31.640 --> 0:08:34.320 Forward with this when Trump does move forward. There's a 0:08:34.320 --> 0:08:36.600 great piece on the Bloomberg terminal right now, the quick 0:08:36.640 --> 0:08:39.400 take about just all of Trump's legal options that he 0:08:39.600 --> 0:08:43.199 has after the Supreme Court said his tariffs are illegal. 0:08:44.120 --> 0:08:47.640 What will those look like in practice? Are the tariffs 0:08:47.679 --> 0:08:52.000 that Trump would potentially introduce under these new laws going 0:08:52.000 --> 0:08:54.720 to be as expansive of as what we had seen 0:08:54.840 --> 0:08:56.320 last year post Liberation Day. 0:08:58.000 --> 0:09:00.240 There were several reporters in the room who were I'm 0:09:00.320 --> 0:09:04.440 to press for more specifics on what exactly this would 0:09:04.440 --> 0:09:07.760 look like, what exactly the rates would be. The President 0:09:07.840 --> 0:09:11.440 kept saying, I can do whatever I want, So we 0:09:11.480 --> 0:09:13.280 don't have those specifics yet. 0:09:13.920 --> 0:09:14.240 We are. 0:09:14.280 --> 0:09:16.640 You know, obviously this has just happened. The White House 0:09:16.679 --> 0:09:18.880 is still responding to this. We heard a lot of 0:09:19.000 --> 0:09:22.439 broad top lines from the President today about how he's 0:09:22.480 --> 0:09:24.920 feeling about it, what he's going to do. But there 0:09:24.920 --> 0:09:27.320 are still a lot of questions. And he was asked, 0:09:27.320 --> 0:09:31.240 for example, about the refunds, whether the administration now needs 0:09:31.280 --> 0:09:34.920 to refund all the billions of dollars in revenue that 0:09:34.960 --> 0:09:39.000 they've collected from the tariffs, and he said the court didn't. 0:09:38.760 --> 0:09:39.440 Weigh in on that. 0:09:39.520 --> 0:09:41.560 He sounded frustrated that they did not weigh in on 0:09:41.600 --> 0:09:44.600 that particular part, and so we still don't know. He 0:09:44.600 --> 0:09:46.840 said that would be playing out in courts, and like 0:09:46.880 --> 0:09:49.000 a lot of this, I think this is still going 0:09:49.040 --> 0:09:52.319 There's still a lot of unresolved questions, and this is 0:09:52.320 --> 0:09:54.280 still going to be playing out for quite some time. 0:09:54.240 --> 0:09:57.720 You know, Kate, looking at Section three oh one and 0:09:57.720 --> 0:10:01.400 two thirty two. Two thirty two is national security reasons 0:10:01.400 --> 0:10:05.200 for maybe imposing tariffs. Three oh one seems to give 0:10:05.480 --> 0:10:07.480 the Section three oh one seems to give the president 0:10:07.520 --> 0:10:10.040 a lot of leeway to impose tariffs. I mean, it 0:10:10.040 --> 0:10:12.080 sounds like he still has a lot of levers that 0:10:12.120 --> 0:10:14.480 he can pull if he deems that it's important for 0:10:14.559 --> 0:10:16.760 the United States national security or otherwise. 0:10:17.760 --> 0:10:20.040 Absolutely, I think national security. 0:10:19.559 --> 0:10:21.520 Has been all within the laws. I guess what I 0:10:21.520 --> 0:10:23.880 would say, all within the law, all. 0:10:23.720 --> 0:10:27.240 Within the law. Yes, the President has been talking about 0:10:27.520 --> 0:10:30.160 how tariffs are critical to national security. That's been a 0:10:30.240 --> 0:10:32.640 key part of his argument. I think we still have 0:10:32.720 --> 0:10:35.280 to see, you know, how this is going to play out, 0:10:35.520 --> 0:10:38.440 what he's going to do next. But definitely, you know, 0:10:38.800 --> 0:10:41.480 I think another part of this is is how is 0:10:41.520 --> 0:10:43.720 this going to affect the trade deals that have already 0:10:43.720 --> 0:10:47.240 been struck. He talked about that briefly in the press 0:10:47.240 --> 0:10:49.839 briefing room today, saying that some of them are going 0:10:49.880 --> 0:10:51.360 to have to be reopen, some of them are going 0:10:51.440 --> 0:10:53.320 to have to be renegotiated, but that a lot of 0:10:53.360 --> 0:10:56.280 them can still stand. He was asked specifically about India. 0:10:56.400 --> 0:10:59.120 He said, India is the same, that will stay the same. 0:10:59.200 --> 0:11:01.000 But I think they're are still a lot of questions 0:11:01.040 --> 0:11:04.920 about how exactly he's going to use, you know, when 0:11:04.960 --> 0:11:07.840 it comes to these particular sections that he that he 0:11:07.960 --> 0:11:11.000 laid out, how that's going to be implemented in practice. 0:11:11.520 --> 0:11:15.360 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:11:15.440 --> 0:11:18.120 US Live weekday afternoons from two to five East. During 0:11:18.120 --> 0:11:21.559 that listen on Applecarplay and Android Otto with the Bloomberg 0:11:21.600 --> 0:11:24.280 Business app, or watch US Live on YouTube. 0:11:25.440 --> 0:11:27.280 So we want to see what our next guest has 0:11:27.280 --> 0:11:29.719 to say about all of this. Alucinola is head of 0:11:29.800 --> 0:11:32.960 US Economic Research at Fitch Ratings. He's responsible for coverage 0:11:32.960 --> 0:11:37.680 of US economics and then includes the labor market, consumer spending, inflation, demographics, 0:11:37.720 --> 0:11:38.760 and so much more. 0:11:38.760 --> 0:11:39.600 He joins us. 0:11:39.840 --> 0:11:43.160 Here in studio, OLU, great to have you here with 0:11:43.280 --> 0:11:46.880 Emily and myself. What matters the most to you as 0:11:46.880 --> 0:11:49.120 someone who keeps a watch in the US economy? Is 0:11:49.160 --> 0:11:51.800 it that Supreme Court ruling and pushed back on Presidents 0:11:52.440 --> 0:11:54.679 Trump's tariffs, who he has said he's going to find 0:11:54.720 --> 0:11:57.680 other ways to do this. Or is it all the 0:11:57.760 --> 0:12:00.360 economic growth? Kind of the mixed messaging maybe to some 0:12:00.440 --> 0:12:03.040 extent on inflation a little bit hotter than we thought 0:12:03.080 --> 0:12:04.280 and growth a little bit weaker. 0:12:04.720 --> 0:12:07.480 Yeah, thanks, thanks Karen for having me. It's good to 0:12:07.480 --> 0:12:10.760 be back. I think if you asked me this question 0:12:10.840 --> 0:12:13.600 at ten am, obviously I would have said, yeah, it's 0:12:14.400 --> 0:12:18.560 the GDP print, the inflation print, particularly the inflation print 0:12:18.640 --> 0:12:21.400 just because it was quite hot. But you know, fast 0:12:21.440 --> 0:12:24.120 forward the last couple of hours, Clearly the Supreme Court 0:12:24.160 --> 0:12:27.600 decision is very, very important. The uncertainty that he brings 0:12:27.640 --> 0:12:31.320 to the table, you can't run away from it. In 0:12:31.360 --> 0:12:36.440 as much as we thought tariff risks, tariff related risks 0:12:36.480 --> 0:12:41.440 were receding, it's come right back. So, yes, the President 0:12:41.480 --> 0:12:45.960 has imposed the ten percent blanket. I still have to 0:12:46.000 --> 0:12:49.319 figure out if that ten percent is truly a blanket 0:12:49.679 --> 0:12:52.679 or are we going to exam pharmaceuticals? Are we going 0:12:52.720 --> 0:12:54.840 to exam oil and gas? Which sounds to me like 0:12:54.920 --> 0:12:57.400 what they will do, But I don't know at the moment. 0:12:57.840 --> 0:12:59.560 I don't think it's clear. So when we see that 0:12:59.600 --> 0:13:03.240 execut to that executive order, we will find out. 0:13:03.760 --> 0:13:06.559 You have in your notes that you're calling today Liberation 0:13:06.720 --> 0:13:09.320 Day two point zero. Of course we had Liberation Day 0:13:09.480 --> 0:13:12.880 last year. It was a big market moving day as well. 0:13:14.040 --> 0:13:17.400 You link this though, to optimism. Are you still optimistic 0:13:17.520 --> 0:13:19.800 that this is going to be good for the US economy, 0:13:19.840 --> 0:13:23.240 particularly in light of Trump floating you know, ten percent? 0:13:23.640 --> 0:13:26.680 Now, I do think that you know competitive, I would 0:13:26.679 --> 0:13:29.800 call this echoes of liberation Day, right, not quite seismic 0:13:29.880 --> 0:13:33.040 as Liberation Day was, and the markets are not downward 0:13:33.080 --> 0:13:34.880 ten percent of which. 0:13:34.720 --> 0:13:37.640 We've been talking about, feels kind of telling yes, yeah, 0:13:37.800 --> 0:13:40.280 But I do think that to the extent that we 0:13:40.360 --> 0:13:45.120 have the ten percent, if the administration follows through with 0:13:45.160 --> 0:13:47.480 all of the exemptions, it's going to be fine because 0:13:47.600 --> 0:13:50.120 effectively it will be lower than what we had before. 0:13:50.520 --> 0:13:54.320 If it's a blanket, that means collections will be slightly higher. 0:13:54.520 --> 0:13:58.439 So that is I don't think most companies have planned 0:13:58.480 --> 0:14:00.640 for that in terms of all of a sudden they 0:14:00.640 --> 0:14:03.000 have to pay more in tariffs, right, So I think 0:14:03.040 --> 0:14:08.000 that would bring some level of uncertainty. The other point 0:14:08.080 --> 0:14:10.520 is it's just for one hundred and fifty days. What 0:14:10.600 --> 0:14:13.960 are they going to replace it with. It's most likely 0:14:14.000 --> 0:14:17.640 going to be more sector focused, So your sector focus, 0:14:17.640 --> 0:14:21.160 by nature, would affect some countries a lot more than others, 0:14:21.520 --> 0:14:25.000 So that brings a lot more on certainty. It's probably 0:14:25.080 --> 0:14:28.640 going to affect pricing decisions, capex decisions, and the likes. 0:14:28.880 --> 0:14:31.720 I don't think that's what the economy needs at the moment, 0:14:32.000 --> 0:14:35.320 because this is an economy where if the government gets 0:14:35.320 --> 0:14:38.240 out of the way, the tailwinds are actually quite strong, 0:14:38.640 --> 0:14:41.440 So you have to now think this may be a 0:14:41.480 --> 0:14:44.560 little bit negative because the economy on its own was 0:14:44.600 --> 0:14:45.680 relatively resilient. 0:14:45.760 --> 0:14:47.320 Yeah, I want to go into that. I also just 0:14:47.360 --> 0:14:49.400 want to mention that the President did threat in fifteen 0:14:49.400 --> 0:14:51.680 to thirty percent auto tariffs. Now I'm looking at forward 0:14:51.720 --> 0:14:53.720 is up about one point two percent, and I think 0:14:53.760 --> 0:14:57.320 GM is it'll change, so it's not like it's actually 0:14:57.360 --> 0:15:03.000 up about one third of one percent. Yeah, those those tailwinds, 0:15:03.040 --> 0:15:06.840 if you will, whether it's higher tax refunds we get 0:15:06.960 --> 0:15:11.360 because of tax cuts, corporate tax cuts that could lead 0:15:11.360 --> 0:15:13.000 to spending. I mean, there's a lot of stuff that 0:15:13.040 --> 0:15:16.160 could be very stimulative. So that brings us to that 0:15:16.280 --> 0:15:19.640 hotter inflation print, which you in your notes kind of 0:15:19.720 --> 0:15:23.040 says it's our reality check, Like we have to kind 0:15:23.040 --> 0:15:25.240 of own up that. As we've heard from the Fed 0:15:25.320 --> 0:15:28.160 or J. Powell, right, inflationary pressures are still a thing. 0:15:28.520 --> 0:15:29.240 They are still a thing. 0:15:29.320 --> 0:15:31.880 It could even maybe get worse, and definitely. 0:15:31.520 --> 0:15:34.640 Could get worse. I think now with this renewed on certainty, 0:15:34.720 --> 0:15:38.680 potentially could get worse. I think there's this wedge between 0:15:38.720 --> 0:15:42.360 CPI and PC At the moment the CPI print, we 0:15:42.440 --> 0:15:45.960 got a few weeks ago two twenty a half percent, 0:15:46.080 --> 0:15:49.520 two point four percent. Lots of people jumping up and 0:15:49.640 --> 0:15:53.800 down saying, hey, clearly this inflationary. But with this reality check, 0:15:54.320 --> 0:15:57.200 inflation is stuck at three percent. That's essentially what it is. 0:15:57.480 --> 0:15:59.840 And if you compare where we are today with have 0:16:00.160 --> 0:16:03.120 line of a year ago, it's actually accelerated. 0:16:03.680 --> 0:16:06.000 Well, what's really kind of wild? And Mike McKee, who 0:16:06.080 --> 0:16:08.760 is breaking down the Fed minutes on Wednesday, says, you 0:16:08.840 --> 0:16:10.640 know they're going through, going through, and then you get to, like, 0:16:10.720 --> 0:16:13.760 I think the last paragraph where it said Fed officials 0:16:14.040 --> 0:16:17.000 were wary of cutting interest rates at their January meeting, 0:16:17.040 --> 0:16:19.440 but several suggesting the Central make may need to raise 0:16:19.520 --> 0:16:22.800 rates of inflation remains high. So they are already like 0:16:23.280 --> 0:16:25.840 continuing to be very vigilant when it comes to higher inflation. 0:16:26.000 --> 0:16:28.840 You have to be, because three percent is not two 0:16:28.920 --> 0:16:33.040 percent obviously, right, and with all of the tariff noise, 0:16:33.520 --> 0:16:37.480 you still are not clear whether it would accelerate or not. 0:16:38.120 --> 0:16:41.120 So the Fed given a label market that seems to 0:16:41.200 --> 0:16:45.280 be relatively stable. Now the balance of risk has shifted, 0:16:45.800 --> 0:16:49.800 it now has to be inflation inflation inflation? 0:16:50.280 --> 0:16:52.800 Does this make the report we got today about growth 0:16:52.960 --> 0:16:56.120 being slower than we expected, more of a blow to 0:16:56.400 --> 0:16:59.760 the economic outlook, particularly if we have the FED raising. 0:17:00.240 --> 0:17:02.480 It's a good question where growth is slowing. 0:17:02.960 --> 0:17:05.280 I do think that if you dig deeper, it wants 0:17:05.320 --> 0:17:07.800 to go under the hood. You realize that about one 0:17:07.880 --> 0:17:12.080 hundred basis point or so one percentage point was because 0:17:12.119 --> 0:17:14.280 of a shutdown. If you add that back, you're talking 0:17:14.320 --> 0:17:17.080 about twenty a half percent growth. The economy on its 0:17:17.160 --> 0:17:20.440 own is resilient. I don't think it can take that away. 0:17:20.800 --> 0:17:24.520 And you're also going to get some payback during this 0:17:24.760 --> 0:17:27.840 quarter right when we get the GDP, so potentially growth 0:17:27.880 --> 0:17:29.200 will be slightly higher. 0:17:29.240 --> 0:17:31.520 All right, you're not a political analyst, but I've got 0:17:31.600 --> 0:17:33.800 to throw midterms into this because I have to think 0:17:33.920 --> 0:17:37.280 as the president starts to go to different states, we've 0:17:37.280 --> 0:17:40.159 started to see some of that. He is thinking a 0:17:40.240 --> 0:17:44.040 lot about midterms and whether or not Republicans lose a 0:17:44.080 --> 0:17:46.560 lot of seats in Congress, and which would be really 0:17:46.640 --> 0:17:49.720 a vote on his White House. So, having said that, 0:17:50.440 --> 0:17:52.720 do you think that we'll shape what he does with 0:17:53.040 --> 0:17:57.280 tariffs and policies because he wants an economy, right, any 0:17:57.320 --> 0:18:00.560 president wants an economy. Humming along whether it's midterms are 0:18:00.560 --> 0:18:02.000 obviously a presidential race. 0:18:02.600 --> 0:18:05.840 I think that would be the rational view. And without 0:18:05.920 --> 0:18:10.399 me going further, without me going further, anything can happen 0:18:10.480 --> 0:18:13.480 between now and the midterms. Right, there will be that 0:18:13.600 --> 0:18:17.880 affordability to push with starting to see that. Hopefully, if 0:18:18.040 --> 0:18:22.680 that is really really strong, that may overwhelm the tariff noise, 0:18:22.880 --> 0:18:26.879 right and to some degree, corporations are used to the 0:18:26.960 --> 0:18:30.159 tariff noise to some degree, so hopefully there will not 0:18:30.320 --> 0:18:34.639 be a knee jerk reaction from a price standpoint going forward. 0:18:35.040 --> 0:18:38.520 How optimistic are you about the refunds for the terroriffs? 0:18:38.560 --> 0:18:39.000 This morning? 0:18:39.080 --> 0:18:42.080 Before Trump spoke, the question was, oh, okay, well, how 0:18:42.119 --> 0:18:44.119 are all of who's going to get the refunds? And 0:18:44.160 --> 0:18:46.439 how smoothly is that process going to go? How are 0:18:46.480 --> 0:18:47.240 you thinking about that? 0:18:47.600 --> 0:18:50.000 So I'm going to go from I'm not a political 0:18:50.080 --> 0:18:54.480 strategist too, I'm not a lawyer, but the reality is 0:18:54.680 --> 0:18:59.000 that corporations have suit right, they have the legal basis 0:18:59.080 --> 0:19:02.679 to ask for a refund now. Prospectively going forward, they 0:19:02.720 --> 0:19:04.720 may still pay times, but it seems to me that 0:19:04.800 --> 0:19:08.680 they have the legal basis since it's illegal, Hey give 0:19:08.720 --> 0:19:11.200 me back my money, you know, it doesn't belong to you. 0:19:11.720 --> 0:19:12.520 That's my sense. 0:19:13.760 --> 0:19:16.600 Stay with us. More from Bloomberg Business Week Daily coming 0:19:16.720 --> 0:19:17.520 up after this. 0:19:21.440 --> 0:19:25.280 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:19:25.359 --> 0:19:28.040 us Live weekday afternoons from two to five e's during 0:19:28.280 --> 0:19:32.080 Listen on Applecarplay and Android Atto with the Bloomberg Business app, 0:19:32.359 --> 0:19:34.040 or watch us Live on YouTube. 0:19:35.320 --> 0:19:37.840 We've talked about the Supreme Court decision over teriffs. We've 0:19:37.880 --> 0:19:40.800 talked about the economic data, a lot of big news 0:19:40.840 --> 0:19:43.560 coming out investors. We've got to talk though about Ran 0:19:43.720 --> 0:19:47.880 because President Trump said it's considering a limited meal. Let's 0:19:47.880 --> 0:19:50.879 try it again, considering a limited military strike and or 0:19:50.920 --> 0:19:53.760 on ratcheting a pressure on the regime to come to 0:19:53.880 --> 0:19:57.040 a quick deal over its nuclear program. As the masses 0:19:57.119 --> 0:19:59.359 military forces in the region. We just talked with our 0:19:59.359 --> 0:20:03.040 Tony Capasa about saying that he doesn't anticipate maybe anything 0:20:03.240 --> 0:20:06.240 coming this weekend and kind of put in perspective the 0:20:06.320 --> 0:20:09.000 forces that are there. But let's get an update on 0:20:09.440 --> 0:20:15.120 this story and for more, we head to Alan Ayir. 0:20:15.280 --> 0:20:18.159 He's distinguished Diplomatic Fellow at Middle East Institute, and he 0:20:18.280 --> 0:20:21.159 joins us. Alan, it's good to have you here with us. 0:20:21.680 --> 0:20:24.960 Your view as you listen to what the President has 0:20:25.000 --> 0:20:26.719 said and what's coming from the White House, and as 0:20:26.760 --> 0:20:29.159 you watch what's going on in the region. 0:20:30.760 --> 0:20:33.800 Well, first, Hi, Carol, High Emily. My view is it's 0:20:33.920 --> 0:20:36.160 probable we're heading for war, whether that's in a couple 0:20:36.200 --> 0:20:39.720 of days or within ten days to two weeks. In 0:20:39.920 --> 0:20:43.280 terms as the military puts it, the table is pretty 0:20:43.320 --> 0:20:47.080 much set in terms of US military assets in the region. 0:20:47.720 --> 0:20:51.880 And even though this administration hasn't given it it's rationale, 0:20:52.640 --> 0:20:55.320 it seems to be guided almost by inertial forces. So 0:20:56.000 --> 0:20:58.600