1
00:00:02,560 --> 00:00:07,040
Speaker 1: Bloomberg Audio Studios, podcasts, radio News.

2
00:00:09,840 --> 00:00:13,160
Speaker 2: This is your weekly Washington Policy Pulse, the Balance of

3
00:00:13,240 --> 00:00:17,680
Speaker 2: Power podcast. I'm Joe Matthew. Every Monday, Bloomberg Intelligence, senior

4
00:00:17,720 --> 00:00:20,800
Speaker 2: policy analyst and friend of the show, Nathan Dean shares

5
00:00:20,840 --> 00:00:24,200
Speaker 2: his weekly call on upcoming catalysts in the nation's capital.

6
00:00:24,720 --> 00:00:27,360
Speaker 2: Listen for the most recent and relevant policy research from

7
00:00:27,400 --> 00:00:30,880
Speaker 2: our team at Bloomberg Intelligence. Now with today's installment, here's

8
00:00:30,960 --> 00:00:31,520
Speaker 2: Nathan Dean.

9
00:00:31,760 --> 00:00:34,279
Speaker 3: Good afternoon, everybody. My name is Nathan Dean. I am

10
00:00:34,280 --> 00:00:37,280
Speaker 3: a senior policy anolst with Bloomberg Intelligence here in the Washington,

11
00:00:37,360 --> 00:00:39,240
Speaker 3: d C. Bureau. We want to say welcome for joining

12
00:00:39,320 --> 00:00:42,159
Speaker 3: us on the Washington Policy Pulse, and specifically for those

13
00:00:42,200 --> 00:00:43,800
Speaker 3: of you on the East coast of the United States, we

14
00:00:43,840 --> 00:00:45,879
Speaker 3: hope that you are safe and sound, especially for those

15
00:00:45,920 --> 00:00:47,479
Speaker 3: of you up in New York and Boston. We hear

16
00:00:47,520 --> 00:00:50,400
Speaker 3: the snow is quite bad at the moment, but again

17
00:00:50,520 --> 00:00:52,360
Speaker 3: I'm hoping this is one of the situations where the

18
00:00:52,400 --> 00:00:54,960
Speaker 3: children are more not bothering you as you try to

19
00:00:55,000 --> 00:00:57,400
Speaker 3: work the type of situations. So what we want to

20
00:00:57,400 --> 00:00:59,520
Speaker 3: do today is we want to talk about President Trump

21
00:00:59,640 --> 00:01:02,760
Speaker 3: and obviously the Supreme Court ruling from last week on AIEPA,

22
00:01:03,480 --> 00:01:05,120
Speaker 3: we also want to talk about the State of the

23
00:01:05,200 --> 00:01:07,600
Speaker 3: Union address, but before we do that, let me bring

24
00:01:07,640 --> 00:01:10,960
Speaker 3: in Holly from our senior litigation analyst. Holly is the

25
00:01:10,959 --> 00:01:14,560
Speaker 3: one who's been leading Bloomberg Intelligence's research on the tariffs

26
00:01:14,560 --> 00:01:18,480
Speaker 3: and specifically the tariff's ruling. And so, Holly, as the

27
00:01:18,520 --> 00:01:23,039
Speaker 3: tariff ruling came out last week, what were your initial reactions?

28
00:01:23,360 --> 00:01:28,280
Speaker 3: What was your thoughts? And as President Trump subsequently announced

29
00:01:28,280 --> 00:01:30,640
Speaker 3: that he was going to increase a or at least

30
00:01:30,720 --> 00:01:33,920
Speaker 3: levy a ten percent tariff via Section one twenty two

31
00:01:34,080 --> 00:01:38,080
Speaker 3: and then increase that to fifteen percent via executive order,

32
00:01:38,360 --> 00:01:39,840
Speaker 3: you know, what are your thoughts that have come out

33
00:01:39,880 --> 00:01:42,120
Speaker 3: from over the weekend in terms of President Trump's next steps.

34
00:01:43,640 --> 00:01:45,760
Speaker 1: So, I think the important thing to note from the

35
00:01:45,880 --> 00:01:48,920
Speaker 1: Supreme Court's ruling is that he is not allowed to

36
00:01:48,960 --> 00:01:52,400
Speaker 1: impose any tariffs using AIBUS. So the Supreme Court found

37
00:01:52,480 --> 00:01:56,040
Speaker 1: that the tariffs were a tax and that taxing power

38
00:01:56,080 --> 00:02:00,240
Speaker 1: is firmly vested in Congress, and the statute didn't really

39
00:02:00,320 --> 00:02:06,840
Speaker 1: authorize him to impose tariffs. The regulate import language that

40
00:02:06,840 --> 00:02:10,919
Speaker 1: that language regulate has never been used to confer power

41
00:02:10,960 --> 00:02:13,560
Speaker 1: to tax, so they said Congress didn't do that here.

42
00:02:13,680 --> 00:02:16,560
Speaker 1: So what that means is that any tariffs he's imposed

43
00:02:16,680 --> 00:02:19,720
Speaker 1: using AIPA are probably going to be struck. So the

44
00:02:19,800 --> 00:02:21,880
Speaker 1: terroriffs on India and Brazil are probably going to be

45
00:02:21,880 --> 00:02:23,160
Speaker 1: struck as well.

46
00:02:24,639 --> 00:02:26,079
Speaker 4: I think with respect.

47
00:02:25,680 --> 00:02:28,520
Speaker 1: To Section one, the one twenty two terriffs, I think

48
00:02:28,560 --> 00:02:31,160
Speaker 1: he's probably on good legal footing there because that's the

49
00:02:31,280 --> 00:02:33,920
Speaker 1: terror that's the statute that the lower court said he

50
00:02:33,960 --> 00:02:38,440
Speaker 1: should have used to address trade imbalances, and what that

51
00:02:38,480 --> 00:02:40,840
Speaker 1: statute allows him to do is to impose a fifteen

52
00:02:40,840 --> 00:02:43,880
Speaker 1: percent tariff for one hundred and fifty days if there's

53
00:02:43,880 --> 00:02:47,880
Speaker 1: a serious balance of payments deficit. And the court went

54
00:02:47,919 --> 00:02:51,360
Speaker 1: into length, the lower court went into great length to

55
00:02:51,440 --> 00:02:54,880
Speaker 1: explain why they think a trade imbalance falls under that

56
00:02:55,040 --> 00:02:58,440
Speaker 1: definition a serious balance of payments issue.

57
00:02:58,560 --> 00:03:00,280
Speaker 4: So I think he's on good legal footing there.

58
00:03:00,400 --> 00:03:04,120
Speaker 1: It can be challenged if, for example, you know, people

59
00:03:04,160 --> 00:03:06,720
Speaker 1: are saying what's happening, what exists in the world now

60
00:03:06,800 --> 00:03:09,440
Speaker 1: is not a serious balance of payment issue, But the

61
00:03:09,520 --> 00:03:15,160
Speaker 1: statute doesn't say who has discretion to determine that. And

62
00:03:15,240 --> 00:03:17,920
Speaker 1: I don't think courts are going to be too inclined

63
00:03:17,919 --> 00:03:23,560
Speaker 1: to second guess the president's determination. So that's what I

64
00:03:23,600 --> 00:03:27,040
Speaker 1: think about Section one twenty two. I think the waffling though,

65
00:03:27,200 --> 00:03:29,399
Speaker 1: where you know, he put he imposed it the executive

66
00:03:29,520 --> 00:03:32,240
Speaker 1: order and said that his advisors say a ten percent

67
00:03:32,440 --> 00:03:34,359
Speaker 1: RAF is necessary, and then he comes out the next

68
00:03:34,400 --> 00:03:36,840
Speaker 1: day and says, actually, no, fifteen percent. I think that

69
00:03:37,080 --> 00:03:40,680
Speaker 1: makes it a little bit shakier because it doesn't seem justified.

70
00:03:41,080 --> 00:03:44,760
Speaker 1: But I think, you know, he probably will put on

71
00:03:44,880 --> 00:03:50,440
Speaker 1: another executive order, probably on February twenty fourth, I'm expecting,

72
00:03:50,960 --> 00:03:55,560
Speaker 1: and if he if he further clarifies why the fifteen

73
00:03:55,560 --> 00:03:59,000
Speaker 1: percent RAF is necessary, I think that will ultimately be upheld.

74
00:04:00,160 --> 00:04:02,360
Speaker 3: So, you know, just to we had a question in here,

75
00:04:02,400 --> 00:04:05,200
Speaker 3: you know you expect the legality of the one twenty

76
00:04:05,240 --> 00:04:07,920
Speaker 3: two tariffs to be challenged, and I think from your

77
00:04:07,920 --> 00:04:10,600
Speaker 3: answer it's no, Well, it.

78
00:04:10,600 --> 00:04:13,000
Speaker 1: Could be challenged. It could be challenged, but I don't

79
00:04:13,040 --> 00:04:14,400
Speaker 1: think a challenge would succeed.

80
00:04:14,920 --> 00:04:15,240
Speaker 4: Okay.

81
00:04:15,640 --> 00:04:17,560
Speaker 3: Yeah, And I would also just say, because I've gotten

82
00:04:17,600 --> 00:04:19,680
Speaker 3: a similar question on the congressional side, you know, will

83
00:04:19,720 --> 00:04:21,920
Speaker 3: you see Congress because the one twenty two only goes

84
00:04:22,000 --> 00:04:24,680
Speaker 3: one hundred and fifty days till you need congressional authorization.

85
00:04:24,720 --> 00:04:27,640
Speaker 3: I don't anticipate we'll ever see Congress have to apply

86
00:04:27,800 --> 00:04:30,800
Speaker 3: on this for two reasons. One is and this is

87
00:04:30,800 --> 00:04:32,640
Speaker 3: where I'm going for My next question is to explain

88
00:04:32,680 --> 00:04:34,320
Speaker 3: what two thirty two and three oh one is and

89
00:04:34,320 --> 00:04:37,000
Speaker 3: whether or not President Trump will then transfer these tariffs

90
00:04:37,000 --> 00:04:40,440
Speaker 3: from one twenty two to those other statutes. And secondly,

91
00:04:40,880 --> 00:04:44,640
Speaker 3: I think Republicans will just say, look, there is a

92
00:04:44,760 --> 00:04:46,800
Speaker 3: They're going to look at the political reality of here

93
00:04:46,880 --> 00:04:49,560
Speaker 3: of President Trump's actions, and they'll say, look, we don't

94
00:04:49,560 --> 00:04:52,880
Speaker 3: need to have authorization on this. So you know, that

95
00:04:52,960 --> 00:04:55,560
Speaker 3: being said, you know, if my theory is correct, the

96
00:04:55,600 --> 00:04:58,320
Speaker 3: one that we've been floating around is that you know,

97
00:04:58,400 --> 00:05:00,320
Speaker 3: President Trump will then go from one twenty two to

98
00:05:00,440 --> 00:05:03,279
Speaker 3: three oh one. Can you explain the difference between two

99
00:05:03,279 --> 00:05:06,640
Speaker 3: thirty two and three oh one? And when President Trump

100
00:05:06,680 --> 00:05:09,400
Speaker 3: just said just minutes ago that nations that quote play

101
00:05:09,480 --> 00:05:12,720
Speaker 3: games with the United States, and I think he's referring

102
00:05:12,720 --> 00:05:15,360
Speaker 3: to the European Union here, because we saw reporting from

103
00:05:15,480 --> 00:05:20,080
Speaker 3: just this morning that the European Union has paused negotiations

104
00:05:20,200 --> 00:05:24,080
Speaker 3: or paused its ratification of the trade deal. You know,

105
00:05:24,279 --> 00:05:25,960
Speaker 3: what does he mean by playing games here?

106
00:05:27,400 --> 00:05:29,400
Speaker 4: Okay, Well, with respect to two oh one.

107
00:05:29,560 --> 00:05:33,160
Speaker 1: At three oh one, he's allowed to impose tariffs if

108
00:05:33,200 --> 00:05:36,480
Speaker 1: he finds a country is an honoring trade agreements, or

109
00:05:36,680 --> 00:05:41,760
Speaker 1: is treating America, or is discriminating against US commerce. He's

110
00:05:41,839 --> 00:05:45,200
Speaker 1: used this before in twenty eighteen against China on three

111
00:05:45,279 --> 00:05:48,279
Speaker 1: hundred over three hundred billion dollars worth of goods from China,

112
00:05:49,440 --> 00:05:52,279
Speaker 1: when he said that they were violating trade agreements with

113
00:05:52,360 --> 00:05:58,120
Speaker 1: respect to intellectual property. Now, with regard to two thirty two,

114
00:05:59,200 --> 00:06:02,880
Speaker 1: that is a tariff that that's a statute that allows

115
00:06:02,880 --> 00:06:07,640
Speaker 1: the president to impose tariffs if he if he imports

116
00:06:07,680 --> 00:06:10,960
Speaker 1: threatened to impair national security. So he can use this statute,

117
00:06:10,960 --> 00:06:12,800
Speaker 1: but he can't He probably can't use it on a

118
00:06:12,800 --> 00:06:16,240
Speaker 1: countrywide basis. It probably has to be sector specific. So

119
00:06:16,640 --> 00:06:20,640
Speaker 1: you've seen him use it on autos, for example, seal

120
00:06:20,720 --> 00:06:24,280
Speaker 1: and aluminum. Both of these require investigations. Three oh one

121
00:06:24,360 --> 00:06:28,000
Speaker 1: requires an investigation by the US Trade rep and two

122
00:06:28,000 --> 00:06:31,000
Speaker 1: thirty two requires an investigation by the Department of Commerce.

123
00:06:32,000 --> 00:06:34,479
Speaker 4: But he's already begun some of those investigations.

124
00:06:35,680 --> 00:06:39,320
Speaker 1: So it's not like a clean slate with respect to

125
00:06:39,320 --> 00:06:42,440
Speaker 1: all tariffs that he could impose via three oh one

126
00:06:42,440 --> 00:06:45,120
Speaker 1: and two thirty two. He started some investigations already so

127
00:06:45,120 --> 00:06:48,120
Speaker 1: that those could be you know, on the horizon.

128
00:06:49,320 --> 00:06:50,280
Speaker 4: But with regard to.

129
00:06:50,880 --> 00:06:54,120
Speaker 1: You know, playing games and the EU Trade deal, the

130
00:06:54,160 --> 00:06:57,080
Speaker 1: EU Trade Deal, I believe it was that I believe

131
00:06:57,080 --> 00:07:00,120
Speaker 1: it was at ten percent, and so the increase to

132
00:07:00,200 --> 00:07:03,480
Speaker 1: fifteen percent is something that they won't accept. The question

133
00:07:03,560 --> 00:07:06,719
Speaker 1: is whether if they say that they won't accept anything

134
00:07:06,800 --> 00:07:14,360
Speaker 1: now like a ten percent or fifteen percent, well, you know,

135
00:07:15,080 --> 00:07:17,280
Speaker 1: if they won't accept the ten percent that they previously

136
00:07:17,280 --> 00:07:22,640
Speaker 1: agreed to. The question is does the President have legal

137
00:07:22,680 --> 00:07:25,160
Speaker 1: authority and under section three ZHO one to say they're

138
00:07:25,160 --> 00:07:29,360
Speaker 1: not honoring trade agreements? And it's not clear because the

139
00:07:29,400 --> 00:07:34,560
Speaker 1: trade agreement was entered into under section under the AEPA Statute,

140
00:07:34,560 --> 00:07:38,040
Speaker 1: which the Supreme Court says is unlawful. So arguably there's

141
00:07:38,080 --> 00:07:41,560
Speaker 1: no legal basis for that trade agreement. Congress hasn't approved it.

142
00:07:41,920 --> 00:07:45,160
Speaker 1: That's another reason why it could be suspect and may

143
00:07:45,160 --> 00:07:48,960
Speaker 1: not be subject to three ZHO one terriffs. But with

144
00:07:49,000 --> 00:07:51,960
Speaker 1: regard to Section one twenty two, he can still impose

145
00:07:51,960 --> 00:07:53,120
Speaker 1: the fifteen percent terriff.

146
00:07:54,080 --> 00:07:56,760
Speaker 3: Gotcha, Okay, we had a couple of questions come in,

147
00:07:56,800 --> 00:07:58,960
Speaker 3: and I actually think the easiest way for me to

148
00:07:59,000 --> 00:08:01,080
Speaker 3: answer some of these questions is to share my screen

149
00:08:01,120 --> 00:08:03,560
Speaker 3: and show you an analysis that Bloomberg Economics plit out.

150
00:08:04,400 --> 00:08:06,560
Speaker 3: So if you just bear with me for one second,

151
00:08:07,800 --> 00:08:11,680
Speaker 3: these are from our friends over at Bloomberg Economics. Let

152
00:08:11,680 --> 00:08:14,920
Speaker 3: me go ahead and hide that. Sorry, let me get that. Okay,

153
00:08:15,760 --> 00:08:19,120
Speaker 3: everybody can see my screen, Thank you very much. So,

154
00:08:19,880 --> 00:08:22,520
Speaker 3: you know section one twenty two plan falls short of

155
00:08:22,560 --> 00:08:25,840
Speaker 3: replacing AEPA. You know, we see here twenty twenty four,

156
00:08:25,960 --> 00:08:29,080
Speaker 3: we see the pre ruling section one twenty two AEPA tariffs.

157
00:08:29,400 --> 00:08:31,120
Speaker 3: And then if you go to this section one twenty

158
00:08:31,120 --> 00:08:34,120
Speaker 3: two AEPA replacement plan, you can see that the effective

159
00:08:34,200 --> 00:08:39,199
Speaker 3: US teriff rate has decreased slightly because of the pre

160
00:08:39,320 --> 00:08:43,439
Speaker 3: ruling versus the ten percent or just the fifteen percent ruling.

161
00:08:43,720 --> 00:08:45,880
Speaker 3: And for those of you who are on the Bloomberg

162
00:08:46,280 --> 00:08:48,800
Speaker 3: Bounce of Power podcast, I just realized you can't see

163
00:08:48,800 --> 00:08:51,560
Speaker 3: this screen. So then if you do feel that you

164
00:08:51,600 --> 00:08:53,840
Speaker 3: need to see this charts, please feel free to come back.

165
00:08:53,880 --> 00:08:55,880
Speaker 3: We will actually be happy to show this to you.

166
00:08:56,240 --> 00:08:58,360
Speaker 3: I apologize that we're doing this spur of the moment

167
00:08:58,679 --> 00:08:59,960
Speaker 3: and then if you come down just a little bit,

168
00:09:00,280 --> 00:09:02,200
Speaker 3: and for those of you on the terminal just ping me.

169
00:09:02,720 --> 00:09:06,240
Speaker 3: The analyst who's leading this is Nicole Gordon Caraatelli over

170
00:09:06,280 --> 00:09:08,480
Speaker 3: at Bloomberg Economics. Feel free to reach out to her.

171
00:09:08,559 --> 00:09:10,160
Speaker 3: Feel free to reach out to me. I will make

172
00:09:10,200 --> 00:09:15,200
Speaker 3: sure that you get this insight into your into your inbox.

173
00:09:15,200 --> 00:09:16,599
Speaker 3: But you can see here on a country by a

174
00:09:16,600 --> 00:09:19,280
Speaker 3: country basis, we have the pre ruling which is the

175
00:09:19,280 --> 00:09:22,600
Speaker 3: white dot, the Section one two APA replacement plan which

176
00:09:22,640 --> 00:09:25,560
Speaker 3: is the yellow dot, and then the or the Bloomberg

177
00:09:25,600 --> 00:09:28,079
Speaker 3: orange dot, and then we have the fifteen percent. So

178
00:09:28,120 --> 00:09:31,119
Speaker 3: you can see in some cases obviously there was some increases.

179
00:09:31,120 --> 00:09:33,920
Speaker 3: In some cases in China, there's a significant decrease here.

180
00:09:34,320 --> 00:09:36,000
Speaker 3: And so I think this is a lot of the

181
00:09:36,040 --> 00:09:38,360
Speaker 3: information that's going to be played out over the next

182
00:09:38,360 --> 00:09:40,760
Speaker 3: couple of weeks because there are winners and losers to

183
00:09:41,320 --> 00:09:45,640
Speaker 3: President Trump's plan here. So I'm going to stop my sharing,

184
00:09:46,440 --> 00:09:51,160
Speaker 3: come back and just check the questions real quick. You know, Holly,

185
00:09:51,200 --> 00:09:53,720
Speaker 3: there was a question about legal challenges to the new tariffs.

186
00:09:53,720 --> 00:09:57,040
Speaker 3: You know, could courts pause their implementation unlike what we

187
00:09:57,080 --> 00:10:01,480
Speaker 3: saw through AYEPA.

188
00:10:00,640 --> 00:10:02,680
Speaker 4: With regard to the one twenty two terraffs.

189
00:10:02,720 --> 00:10:04,160
Speaker 3: Well, yeah, there was one.

190
00:10:04,880 --> 00:10:07,520
Speaker 1: I don't think they'd do that because they didn't do

191
00:10:07,600 --> 00:10:11,880
Speaker 1: that with the AEPA teriffs, even though even when they

192
00:10:11,960 --> 00:10:14,079
Speaker 1: ruled that they were on lawful. So the lower court said,

193
00:10:14,080 --> 00:10:16,280
Speaker 1: they're on lawful, but we're going to stay our ruling

194
00:10:16,559 --> 00:10:19,120
Speaker 1: until this goes all the way up and and the

195
00:10:19,120 --> 00:10:21,880
Speaker 1: Federal Circuit did the same thing, we find this on lawful,

196
00:10:21,920 --> 00:10:26,120
Speaker 1: but the ruling was stayed. The Supreme Court stayed stayed

197
00:10:26,440 --> 00:10:28,920
Speaker 1: the application of the Federal circuits ruling until they ruled.

198
00:10:28,960 --> 00:10:32,319
Speaker 1: So even when you have a challenge that's successful, they

199
00:10:32,360 --> 00:10:34,480
Speaker 1: stayed it until the Supreme Court could rule.

200
00:10:34,559 --> 00:10:37,360
Speaker 4: So I don't think I don't foresee that happening.

201
00:10:37,920 --> 00:10:41,480
Speaker 3: Okay, no, that it sounds good. Let me just make

202
00:10:41,520 --> 00:10:45,800
Speaker 3: sure you know, and what would you think? You know?

203
00:10:45,960 --> 00:10:48,080
Speaker 3: Another question came in is like would he be able

204
00:10:48,080 --> 00:10:50,560
Speaker 3: to keep the average teriff right around that fifteen percent

205
00:10:50,640 --> 00:10:53,600
Speaker 3: level once the one twenty two tariffs expire? What's the

206
00:10:53,840 --> 00:10:55,160
Speaker 3: what's the limit on three oh one?

207
00:10:55,760 --> 00:10:58,840
Speaker 1: There is no limit on three oh one, right, but

208
00:10:59,440 --> 00:11:02,199
Speaker 1: he'd have to find every country that he imposed this

209
00:11:02,280 --> 00:11:04,840
Speaker 1: fifteen percent tariff on, or his US trade rep would

210
00:11:04,840 --> 00:11:07,640
Speaker 1: have to find every country that he's used fifteen percent

211
00:11:07,640 --> 00:11:11,640
Speaker 1: against has discriminated against US commerce or violated a trade agreement.

212
00:11:12,440 --> 00:11:14,560
Speaker 3: Okay, So, and that would come through a notice in

213
00:11:14,640 --> 00:11:18,760
Speaker 3: comment period, or at least the investigations go via a

214
00:11:18,800 --> 00:11:22,800
Speaker 3: noticing comment period. Correct, But investigations have already started. I

215
00:11:22,880 --> 00:11:26,400
Speaker 3: just want to clarify for the folks listening investigations. So

216
00:11:26,600 --> 00:11:28,680
Speaker 3: one two only goes for one hundred and fifty days.

217
00:11:29,360 --> 00:11:33,920
Speaker 3: We don't anticipate congressional authorization. They have already started investigations

218
00:11:33,960 --> 00:11:35,600
Speaker 3: of via three h one Correct.

219
00:11:36,360 --> 00:11:37,120
Speaker 4: Right on China.

220
00:11:37,960 --> 00:11:40,040
Speaker 3: On China, But what about like, let's just say I'm

221
00:11:40,040 --> 00:11:42,680
Speaker 3: going to just pluck out Argentina because I had Jivytory

222
00:11:42,760 --> 00:11:45,480
Speaker 3: this past weekend. You know, if there was an investigation

223
00:11:45,520 --> 00:11:48,080
Speaker 3: in Argentina, would they have to do a separate noticeing

224
00:11:48,120 --> 00:11:51,400
Speaker 3: period comment period for that or could they lumped that

225
00:11:51,480 --> 00:11:52,240
Speaker 3: in with something else.

226
00:11:53,679 --> 00:11:57,080
Speaker 1: I don't know that there's any existing investigation that they

227
00:11:57,120 --> 00:12:00,200
Speaker 1: could lump that in with. But you could see all

228
00:12:00,200 --> 00:12:03,439
Speaker 1: the investigations that they've done, that they've opened. And that's

229
00:12:03,480 --> 00:12:09,160
Speaker 1: on the UH. I think it's a business industry's web page.

230
00:12:10,000 --> 00:12:12,720
Speaker 1: It's a it's a division of the car Department of Commerce.

231
00:12:13,440 --> 00:12:14,920
Speaker 1: So you can see all the ones that have been opened.

232
00:12:14,920 --> 00:12:17,320
Speaker 1: I don't think there's one that they can Lumbargentina into.

233
00:12:18,600 --> 00:12:21,880
Speaker 1: But uh so, so if if it was an investigation

234
00:12:21,960 --> 00:12:25,199
Speaker 1: that you know, it's it's a new issue, they'd probably

235
00:12:25,240 --> 00:12:26,840
Speaker 1: have to open a new investigation for that.

236
00:12:27,360 --> 00:12:29,440
Speaker 3: Okay, So it's not one of those situations where they

237
00:12:29,440 --> 00:12:32,280
Speaker 3: can just blanket. You know, there's got to be an investigation.

238
00:12:32,520 --> 00:12:35,439
Speaker 3: And I guess that that brings some clarity to the markets,

239
00:12:35,480 --> 00:12:38,000
Speaker 3: because like, you know, yes, I'm not going to say

240
00:12:38,000 --> 00:12:41,320
Speaker 3: that there's clarity posts rolling, but if we at least

241
00:12:41,360 --> 00:12:43,520
Speaker 3: know that there has to be a notification period for

242
00:12:43,559 --> 00:12:45,640
Speaker 3: an investigation, we can at least go back and say,

243
00:12:45,960 --> 00:12:48,040
Speaker 3: here are the investigations that are taking place, here the

244
00:12:48,080 --> 00:12:50,080
Speaker 3: ones that aren't taking place, and you know, we can

245
00:12:50,559 --> 00:12:52,600
Speaker 3: you know, at least try and get some ideas there.

246
00:12:52,720 --> 00:12:55,560
Speaker 3: So okay, Holly, last question I have for you is,

247
00:12:55,640 --> 00:12:59,640
Speaker 3: let's talk about refunds. You know, the court didn't address refunds.

248
00:12:59,800 --> 00:13:03,080
Speaker 3: You know, Treasury Secretary Scott Bessett said, look, you know,

249
00:13:03,559 --> 00:13:06,560
Speaker 3: in our paraphrasing here, you know, refunds aren't really in

250
00:13:06,600 --> 00:13:10,400
Speaker 3: the cards. Right now, how is this refund chaos going

251
00:13:10,440 --> 00:13:12,079
Speaker 3: to play it out? I presume it would have to

252
00:13:12,160 --> 00:13:14,400
Speaker 3: go back down into a lower court and somebody would

253
00:13:14,400 --> 00:13:18,199
Speaker 3: have to sue to get that refund am I right.

254
00:13:19,240 --> 00:13:21,560
Speaker 4: So that's probably what's going to happen.

255
00:13:21,760 --> 00:13:24,520
Speaker 1: They can try to apply to the Customs agency, but

256
00:13:24,559 --> 00:13:27,760
Speaker 1: if the Customs Agency doesn't refund their money, then they

257
00:13:27,800 --> 00:13:30,720
Speaker 1: would have to go to the court. And so typically

258
00:13:30,760 --> 00:13:34,280
Speaker 1: so and so they think there is this existing case

259
00:13:34,360 --> 00:13:37,800
Speaker 1: that's been filed by a bunch of companies. They were

260
00:13:37,800 --> 00:13:43,719
Speaker 1: consolidated into one lawsuit before the International Trade Court, and

261
00:13:43,800 --> 00:13:47,280
Speaker 1: that may be the vehicle that the court uses to

262
00:13:47,360 --> 00:13:51,760
Speaker 1: explain how these refunds should be sought and what procedures

263
00:13:51,760 --> 00:13:56,720
Speaker 1: are necessary. But there was this thinking that they may

264
00:13:56,880 --> 00:14:00,199
Speaker 1: just use the old procedure, which is the proceed you're

265
00:14:00,320 --> 00:14:05,120
Speaker 1: used for challenging any duty that they think that you

266
00:14:05,200 --> 00:14:08,400
Speaker 1: think it was wrongfully paid. So there's a procedure whereby

267
00:14:09,160 --> 00:14:13,800
Speaker 1: the importer, when the importer enters goods or imports goods.

268
00:14:14,000 --> 00:14:18,640
Speaker 4: On the date of entry, they have to say.

269
00:14:18,400 --> 00:14:22,360
Speaker 1: To the customs agency what they think these goods, what

270
00:14:22,440 --> 00:14:26,080
Speaker 1: they think the right amount to pay is. And so

271
00:14:26,280 --> 00:14:28,760
Speaker 1: that's based on what the classification of the goods are,

272
00:14:28,840 --> 00:14:32,920
Speaker 1: what the duty rate is, and within three hundred and

273
00:14:32,920 --> 00:14:36,800
Speaker 1: fourteen days of entry, the Customs Agency decides whether that

274
00:14:37,000 --> 00:14:39,200
Speaker 1: was the right amount or not, whether they owe more,

275
00:14:40,120 --> 00:14:41,680
Speaker 1: and that's called liquidation.

276
00:14:42,160 --> 00:14:44,520
Speaker 4: And when that's finalized, when the.

277
00:14:44,560 --> 00:14:47,640
Speaker 1: Duties liquidate, it's called the amount is finalized by the

278
00:14:47,640 --> 00:14:51,080
Speaker 1: Customs Agency the amount they owe. The importer then has

279
00:14:51,200 --> 00:14:55,320
Speaker 1: one hundred and eighty days to challenge that. It's called

280
00:14:55,320 --> 00:15:00,120
Speaker 1: by by by via a protest. And so they think

281
00:15:00,120 --> 00:15:02,240
Speaker 1: they're thinking that they're going to have to do something

282
00:15:02,280 --> 00:15:05,120
Speaker 1: like that. So they're gonna have to file some kind

283
00:15:05,200 --> 00:15:08,720
Speaker 1: of you know, application procedure and say we've paid this,

284
00:15:08,960 --> 00:15:11,960
Speaker 1: we shouldn't have paid it, and see if Customs remits,

285
00:15:12,200 --> 00:15:15,680
Speaker 1: and if they don't, then they would probably have to

286
00:15:15,720 --> 00:15:16,680
Speaker 1: file a lawsuit.

287
00:15:17,920 --> 00:15:20,440
Speaker 2: So just to en so, some.

288
00:15:20,400 --> 00:15:22,840
Speaker 1: Lawyers are recommending to their clients, you know, do both

289
00:15:23,320 --> 00:15:25,560
Speaker 1: because there are these deadlines and they don't want the

290
00:15:25,560 --> 00:15:28,640
Speaker 1: deadlines to expire. So do both apply to Customs agency

291
00:15:28,720 --> 00:15:30,040
Speaker 1: and file a lawsuit.

292
00:15:30,560 --> 00:15:31,960
Speaker 4: And someone I'm recommended they.

293
00:15:31,840 --> 00:15:34,240
Speaker 1: Do that before the Supreme Court even rules because some

294
00:15:34,320 --> 00:15:35,520
Speaker 1: of the deadlines are passing.

295
00:15:36,960 --> 00:15:38,520
Speaker 3: So what I'm hearing for you is that if you're

296
00:15:38,560 --> 00:15:42,120
Speaker 3: a trade lawyer who's about refund litigation or Section three

297
00:15:42,160 --> 00:15:45,440
Speaker 3: oh one, you're probably gonna have really good job security

298
00:15:45,480 --> 00:15:47,920
Speaker 3: for the next three years. I'm guessing because it sounds

299
00:15:47,960 --> 00:15:49,520
Speaker 3: like all of this is just headed to the courts.

300
00:15:50,040 --> 00:15:54,080
Speaker 1: Yeah, or there's definitely going to be like litigation that well,

301
00:15:54,400 --> 00:15:56,560
Speaker 1: not definitely, but I think there's gonna be litigation that

302
00:15:56,600 --> 00:15:57,280
Speaker 1: arises out of this.

303
00:15:57,800 --> 00:16:01,560
Speaker 3: So okay, sounds good. Thank you. I don't see any

304
00:16:01,560 --> 00:16:04,680
Speaker 3: more questions about tariffs. We do have a webinar tomorrow

305
00:16:04,720 --> 00:16:08,040
Speaker 3: at ten am Eastern that is going to have Holly,

306
00:16:08,440 --> 00:16:11,720
Speaker 3: our friends from Bloomberg Economics, the Nicole who wrote that

307
00:16:11,720 --> 00:16:14,160
Speaker 3: piece on the countries. We're also going to have other

308
00:16:14,240 --> 00:16:20,040
Speaker 3: analysts talking about the sectors like retail and technology. So

309
00:16:20,080 --> 00:16:22,040
Speaker 3: if you do want to attend that webinar, just feel

310
00:16:22,080 --> 00:16:23,560
Speaker 3: free to reach out to me. I'll make sure that

311
00:16:23,640 --> 00:16:25,720
Speaker 3: you get that link. That's a ten am Eastern and

312
00:16:25,800 --> 00:16:27,560
Speaker 3: if you missed that, there is going to be a

313
00:16:27,560 --> 00:16:29,720
Speaker 3: really replay. But Holly, thank you much for a joining.

314
00:16:29,720 --> 00:16:31,040
Speaker 3: I know you got a busy day, so I'll let

315
00:16:31,080 --> 00:16:34,320
Speaker 3: you go and then I'll just talk about state of

316
00:16:34,320 --> 00:16:36,200
Speaker 3: the Union, and then we will let everybody get back

317
00:16:36,200 --> 00:16:40,200
Speaker 3: to their day jobs. So so state of the Union.

318
00:16:40,720 --> 00:16:43,480
Speaker 3: There are really, I think three themes that we're going

319
00:16:43,520 --> 00:16:48,360
Speaker 3: to see tomorrow. This is tomorrow night, around eight pm Eastern. Obviously,

320
00:16:48,440 --> 00:16:50,360
Speaker 3: President Trump's going to come in, He's going to address

321
00:16:50,400 --> 00:16:52,800
Speaker 3: the Congress. The Supreme Court is going to be there.

322
00:16:53,120 --> 00:16:55,360
Speaker 3: Cal she already has on the betting markets. Is he

323
00:16:55,440 --> 00:16:59,000
Speaker 3: going to shake John Roberts hand or not? Right now,

324
00:16:59,080 --> 00:17:01,560
Speaker 3: the nose have it. I didn't look at the number,

325
00:17:01,600 --> 00:17:04,080
Speaker 3: but the nos are saying that they think President Trump's

326
00:17:04,080 --> 00:17:06,440
Speaker 3: not going to shake his hand. But anyway, there's three

327
00:17:06,440 --> 00:17:08,200
Speaker 3: themes that I think you should keep in mind. One

328
00:17:08,240 --> 00:17:11,320
Speaker 3: is geopolitical. Let me get this right, there we go.

329
00:17:11,960 --> 00:17:15,200
Speaker 3: One is geopolitical. Obviously the question about Iran. Now I'm

330
00:17:15,200 --> 00:17:17,080
Speaker 3: not going to talk about this because obviously I focus

331
00:17:17,119 --> 00:17:19,240
Speaker 3: on US domestic policy. But again, my friends over at

332
00:17:19,240 --> 00:17:22,639
Speaker 3: Bloomberg Economics have a great piece of scenario analysis of

333
00:17:22,680 --> 00:17:25,360
Speaker 3: what could hum come out. Now. President Trump has been

334
00:17:25,560 --> 00:17:28,320
Speaker 3: at least according to Bloomberg News. The latest fro Bloomberg

335
00:17:28,320 --> 00:17:30,520
Speaker 3: News is that President Trump was thinking about a limited

336
00:17:30,560 --> 00:17:34,439
Speaker 3: strike on Iran. The negotiations are scheduled for Thursday, and

337
00:17:34,480 --> 00:17:36,960
Speaker 3: then you would have a much more intense strike sometimes

338
00:17:37,000 --> 00:17:40,160
Speaker 3: later if negotiations falter and so forth. But again that's

339
00:17:40,160 --> 00:17:42,560
Speaker 3: the Bloomberg News. But if you do need a geopolitical

340
00:17:42,600 --> 00:17:45,080
Speaker 3: analyst to discuss this in greater detail, please let me

341
00:17:45,160 --> 00:17:47,480
Speaker 3: know and we'll get you in touch with Jenny and

342
00:17:47,520 --> 00:17:49,919
Speaker 3: her team. Now, the two domestic themes that you're going

343
00:17:50,000 --> 00:17:52,240
Speaker 3: to you're gonna hear is one is my colleague Dwayne

344
00:17:52,240 --> 00:17:54,560
Speaker 3: Wright put on a great note on healthcare, you know,

345
00:17:54,640 --> 00:17:56,919
Speaker 3: talking about changes to the Affordable Care Act. Now, the

346
00:17:56,960 --> 00:17:59,560
Speaker 3: reason why there's going to be talked about the Affordable

347
00:17:59,600 --> 00:18:03,160
Speaker 3: Care Act is because Republicans are talking about another bite

348
00:18:03,160 --> 00:18:05,639
Speaker 3: of the apple via reconciliation. Now, this is think of

349
00:18:05,680 --> 00:18:08,240
Speaker 3: one big, beautiful bill, part two, and this is the

350
00:18:08,280 --> 00:18:11,000
Speaker 3: process that allows Republicans to do it once per fiscal year.

351
00:18:11,040 --> 00:18:13,480
Speaker 3: You avoid the Senate filibusters. Some majority vote in the House,

352
00:18:13,560 --> 00:18:15,880
Speaker 3: majority vote in the Senate. Now, there are a lot

353
00:18:15,880 --> 00:18:18,760
Speaker 3: of healthcare changes have been discussed about. This tax changes,

354
00:18:18,840 --> 00:18:22,840
Speaker 3: things about you know, increasing home builders, you know, decreasing

355
00:18:22,880 --> 00:18:27,159
Speaker 3: taxes associated with home building. But also just recently, in

356
00:18:27,240 --> 00:18:30,040
Speaker 3: light of Friday's rolling, you have some Republicans out there

357
00:18:30,040 --> 00:18:34,280
Speaker 3: saying that they should reinstitute tariff authority VIE but via reconciliation.

358
00:18:34,920 --> 00:18:36,639
Speaker 3: All you need to know is is that if President

359
00:18:36,680 --> 00:18:39,560
Speaker 3: Trump talks about things last night or tomorrow night regarded

360
00:18:39,760 --> 00:18:43,600
Speaker 3: that require legislative change, if it's via reconciliation, we have

361
00:18:43,640 --> 00:18:45,720
Speaker 3: a twenty percent chance of that happening this year. The

362
00:18:45,800 --> 00:18:47,960
Speaker 3: votes just aren't there. You can't get the House of

363
00:18:48,040 --> 00:18:50,560
Speaker 3: Representatives aligned when you only have a margin of one

364
00:18:50,960 --> 00:18:53,440
Speaker 3: and when you have certain Republicans out there who are

365
00:18:53,480 --> 00:18:55,280
Speaker 3: just pretty much at the point where they're not on

366
00:18:55,320 --> 00:18:57,800
Speaker 3: board with the President's agenda, it just doesn't seem like

367
00:18:57,840 --> 00:19:00,400
Speaker 3: it's going to happen. So, whether it's for terrifying authority

368
00:19:00,520 --> 00:19:02,960
Speaker 3: or maybe some of the healthcare changes, etc. But again,

369
00:19:03,000 --> 00:19:04,679
Speaker 3: if you need to copy of Twain's note, please let

370
00:19:04,720 --> 00:19:06,680
Speaker 3: me know. The third thing you're going to hear about

371
00:19:06,720 --> 00:19:09,320
Speaker 3: tomorrow is in addition to tariffs, which we already discussed,

372
00:19:09,359 --> 00:19:12,520
Speaker 3: but the third thing we'll hear about it tomorrow is affordability. Now,

373
00:19:12,520 --> 00:19:14,399
Speaker 3: President Trump is going to make a lot of repeat

374
00:19:14,400 --> 00:19:16,400
Speaker 3: statements of what you've said over the last couple of weeks.

375
00:19:16,440 --> 00:19:18,560
Speaker 3: You'll probably call for a credit card interst rate cap

376
00:19:18,800 --> 00:19:21,639
Speaker 3: probably call for the banning of corporation purchases of single

377
00:19:21,640 --> 00:19:24,240
Speaker 3: family homes. But the story here is that if it

378
00:19:24,320 --> 00:19:26,960
Speaker 3: requires an active legislation, it's very difficult to come by.

379
00:19:27,000 --> 00:19:30,520
Speaker 3: Even that corporation ban, there's bipartisan warmth to it, and

380
00:19:30,520 --> 00:19:32,600
Speaker 3: not of all the things that he said, that's probably

381
00:19:32,600 --> 00:19:35,040
Speaker 3: the one that's going to drive the most headlines because

382
00:19:35,320 --> 00:19:37,200
Speaker 3: this week you are going to see the Senate work

383
00:19:37,200 --> 00:19:39,800
Speaker 3: on housing reform, and the White House is pressuring to

384
00:19:39,840 --> 00:19:42,520
Speaker 3: get that attached as an amendment to the housing bill.

385
00:19:42,560 --> 00:19:45,120
Speaker 3: I don't think it's going to work, but again that's

386
00:19:45,119 --> 00:19:46,920
Speaker 3: something that we're going to keep an eye on. Where

387
00:19:46,960 --> 00:19:49,560
Speaker 3: I'm going with this is is that tomorrow on affordability,

388
00:19:49,560 --> 00:19:51,399
Speaker 3: you're going to hear a lot of statements about it.

389
00:19:51,400 --> 00:19:53,080
Speaker 3: It's going to lead to a lot of headline risk.

390
00:19:53,359 --> 00:19:55,720
Speaker 3: But think of this, If it requires an active legislation,

391
00:19:55,880 --> 00:19:58,600
Speaker 3: it's probably not likely to happen. And if it requires

392
00:19:58,640 --> 00:20:01,919
Speaker 3: regulation it's new idea. It's going to be quarters, if

393
00:20:02,000 --> 00:20:05,040
Speaker 3: not years, to happen. And if it requires the executive order,

394
00:20:05,280 --> 00:20:07,000
Speaker 3: then it's either going to be tested in the courts

395
00:20:07,240 --> 00:20:08,720
Speaker 3: or he's going to try and do it via the

396
00:20:08,720 --> 00:20:11,399
Speaker 3: bully pulpit, and that's most likely what you're going to

397
00:20:11,400 --> 00:20:13,119
Speaker 3: see here is President of Trump trying to use the

398
00:20:13,119 --> 00:20:15,880
Speaker 3: bully pulpit. Think of things like, you know, pressuring these

399
00:20:15,880 --> 00:20:17,960
Speaker 3: banks to issue these credit cards, or just over the

400
00:20:17,960 --> 00:20:20,919
Speaker 3: weekend he was pressuring Netflix over Susan Rice, one of

401
00:20:20,920 --> 00:20:23,640
Speaker 3: their board members. So the bully pulpit is what most

402
00:20:23,800 --> 00:20:25,480
Speaker 3: likely is the thing to keep in mind for the

403
00:20:25,520 --> 00:20:29,040
Speaker 3: State of the Union address. So I apologize that we've

404
00:20:29,080 --> 00:20:31,200
Speaker 3: gone a little bit longer, but you know, we've got

405
00:20:31,240 --> 00:20:33,320
Speaker 3: a lot going on. I know this was really quick,

406
00:20:33,359 --> 00:20:35,840
Speaker 3: So if you do any need a deeper dive conversations,

407
00:20:35,840 --> 00:20:38,000
Speaker 3: please feel free to reach out again. My email is

408
00:20:38,160 --> 00:20:41,080
Speaker 3: ending Tenant Bloomberg dot net. We very much happy to

409
00:20:41,119 --> 00:20:43,600
Speaker 3: have a conversation with you again. All this here is

410
00:20:43,600 --> 00:20:46,480
Speaker 3: available for you in the Bloomberg terminal. Stay safe, stay warm,

411
00:20:46,560 --> 00:20:48,680
Speaker 3: and we will talk to you soon. Thank you very much.

412
00:20:49,680 --> 00:20:53,600
Speaker 2: Our thanks to Nathan Dee, Bloomberg Intelligence senior policy analysts,

413
00:20:53,640 --> 00:20:57,320
Speaker 2: bringing you the latest installment of his weekly Washington Policy Pulse.

414
00:20:57,720 --> 00:21:00,480
Speaker 2: For more from BI or to join this call live

415
00:21:00,720 --> 00:21:04,399
Speaker 2: each week, you can email Nathan at ndan at Bloomberg

416
00:21:04,480 --> 00:21:07,720
Speaker 2: dot net. That's n d E. A. N At Bloomberg

417
00:21:07,760 --> 00:21:10,399
Speaker 2: dot Net and come back to the podcast later today

418
00:21:10,640 --> 00:21:12,639
Speaker 2: for the latest edition of Balance of Power.