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Speaker 2: Investors are not waiting around for an official announcement on
Speaker 2: this auto tariff delay. Just watch GM. This is a
Speaker 2: pretty remarkable moment here following the big speech last night,
Speaker 2: So welcome yes to the day after the Wednesday edition
Speaker 2: of Balance of Power here on Bloomberg Radio, the satellite
Speaker 2: radio channel one twenty one, and on YouTube, where you
Speaker 2: can find us right now by searching Bloomberg Business News Live.
Speaker 2: No travel schedule for Donald Trump. I guess he's sleeping
Speaker 2: this offul little bit. But he is also meeting with
Speaker 2: members of Congress here to talk about the way forward
Speaker 2: on a budget resolution, reconciliation and maybe even and funding
Speaker 2: the government ten days from now. But we've got a
Speaker 2: lot to unpack from last night, as Wall Street shakes
Speaker 2: it off here on this fifth of March with news
Speaker 2: on tariffs following tariff Tuesday and a speech to a
Speaker 2: joint Session of Congress that embraced what Donald Trump considers
Speaker 2: the most beautiful word in the dictionary. Let's listen.
Speaker 3: If you don't make your product in America, however, under
Speaker 3: the Trump administration, you will pay a tariff, and in
Speaker 3: some cases a rather large one. Countless other nations charge
Speaker 3: us tremendously higher tariffs than we charge them. April second,
Speaker 3: reciprocal tariffs kick in.
Speaker 4: The tariffs will.
Speaker 3: Go on agricultural product coming into America and our farmers
Speaker 3: starting on April second. It may be a little bit
Speaker 3: of an adjustment period. I've also imposed a twenty five
Speaker 3: percent tariff on foreign aluminum, copper, lumber, and steel. Tariffs
Speaker 3: are about making America richie again and making America great again.
Speaker 3: And it's happening, and it will happen rather quickly. There'll
Speaker 3: be a little disturbance, but we're okay with that.
Speaker 2: A little disturbance in the force. We were watching, so
Speaker 2: you didn't have to one hundred minutes long. Everybody crawled
Speaker 2: out of here around midnight last night. Nine thousand, eight
Speaker 2: hundred eighty eight words. According to the transcript, Donald Trump
Speaker 2: went for broke, and indeed broke President Bill Clinton's eighty
Speaker 2: eight minute record. Remember in conclusion, that's where we start
Speaker 2: our conversation with Ashley Davis, who was also watching along
Speaker 2: last evening, Republican strategist partner S three Group, former senior
Speaker 2: Stafford the Apartment of Homeland Security. Ashley, it's great to
Speaker 2: see you. Welcome back. I don't know if you've recovered
Speaker 2: from a record setter last night, But was it time
Speaker 2: well spent because the market's still pretty confused about tariff
Speaker 2: Tuesday among a lot of other things.
Speaker 5: Well, I don't think anything's will spent for one hundred minutes,
Speaker 5: So no, I don't think so. But I do miss
Speaker 5: the Bush days when everyone criticized him for not talking
Speaker 5: long enough, and we all miss that. But listen, it
Speaker 5: was these the last few years have turned into political speeches.
Speaker 5: I mean, I feel that last night in some ways
Speaker 5: we've all hit a new low in regards to how
Speaker 5: the Democrats were reacting, how the Republicans have reacted under
Speaker 5: when Democrats spoke, And you know, I just I don't
Speaker 5: like it when you have different positive messages that are
Speaker 5: coming out, whether it's about a death of somebody or
Speaker 5: whatever it is, that you can't be you're so angry
Speaker 5: at each other that you can't support some of that stuff.
Speaker 5: So that's what I would say, just from a high level.
Speaker 5: But obviously we've been talking about this Joe for the
Speaker 5: last year, about his favorite word being tariffs. Yesterday, I
Speaker 5: think he knew exactly what he was doing. The team
Speaker 5: knew exactly what they were doing in regards to putting
Speaker 5: these tariffs, at least in place for a short period
Speaker 5: of time. I think that they knew it was going
Speaker 5: to impact the markets. It obviously did impact the markets.
Speaker 5: You see them taking a step back today. I thought Lutinx,
Speaker 5: that secretary of Lutinik on Bloomberg earlier today, gave a
Speaker 5: lot of information in regards to any type of exemptions
Speaker 5: and saying that if there are going to be exemptions
Speaker 5: that the President puts in place over the next month,
Speaker 5: that we should look at USMCA and the exemptions that
Speaker 5: are there. So I think they are starting to show
Speaker 5: the te leues. I think it was very pointed today
Speaker 5: that he just put out the announcement on the automobiles,
Speaker 5: because what, look what the market's doing.
Speaker 6: So I.
Speaker 5: People say crazy like a fox, and you know, I
Speaker 5: don't back off that. Sometimes I'm not saying it's right
Speaker 5: or wrong, but I don't think that they are. You know,
Speaker 5: when he was in the first time, everyone was like, no,
Speaker 5: he doesn't know how to run the country. Dah da
Speaker 5: da dah. But they've been preparing for this for years,
Speaker 5: and I do think that he's going to continue to
Speaker 5: use these tariffs, not just on the financial parts, but
Speaker 5: also in regards to foreign policy.
Speaker 2: You're a strategist, Ashley, though you're a communicator by profession.
Speaker 2: You know how to tell an elected official, how to
Speaker 2: crystallize a message, and how not to get in trouble,
Speaker 2: how not to break into jail. That cut we just
Speaker 2: heard from Donald Trump. There'll be a little disturbance talking
Speaker 2: about tariffs, but we're okay with that. It won't be
Speaker 2: much that's begging to be put in a campaign at
Speaker 2: if this thing turns south, isn't it. Oh?
Speaker 5: Yeah?
Speaker 2: But I regret saying that.
Speaker 5: I don't know if he will because is it going
Speaker 5: to really impact him. He can't run again, so it's
Speaker 5: going to be more that the House and Senate members
Speaker 5: that are going to be up for reelection, the governors,
Speaker 5: you know, doesn't have a triple down effect. But I
Speaker 5: think one thing that he definitely has to deal with,
Speaker 5: which was not addressed last night, were the pocketbook issues
Speaker 5: in regards to egg prices. I mean, we can go
Speaker 5: on and on. I don't need to name them. So
Speaker 5: tariffs from.
Speaker 2: Said those are Joe Biden's zagg.
Speaker 5: Prices exactly exactly. Well, that's not going to last for
Speaker 5: you can't Does you get to do that?
Speaker 7: Yeah?
Speaker 5: I mean I remember saying this when Biden came in
Speaker 5: with Trump, like, you can't continue to blame Trump for
Speaker 5: how you know, six months a year after that they left.
Speaker 5: So there has to be a grasp because I don't
Speaker 5: know if the everyday Americans really paying attention to the
Speaker 5: tariffs like you and I are, but I think that
Speaker 5: they're definitely paying attention to their grocery bills.
Speaker 2: Yeah, he told Congress to scrap the Chips Act and
Speaker 2: send spend the money on reducing debt. I realized the
Speaker 2: spirit of kind of rescinding or overturning the Biden agenda
Speaker 2: is part of Donald Trump's approach here. But doesn't that
Speaker 2: argue with the idea of bringing businesses like this back
Speaker 2: to the US.
Speaker 5: Yes, and I that was actually something I was pretty
Speaker 5: surprised about, right, before he went on that they were
Speaker 5: going to concentrate on that. I you know, just seeing
Speaker 5: come some of the talking points. I and especially because
Speaker 5: that was a pretty bipartisan bill, I would think he's
Speaker 5: talking about some of the money that wasn't spent at
Speaker 5: Commerce yet that maybe reappropriating that or moving that to
Speaker 5: different parts of the agency for different priorities. But I
Speaker 5: don't think that that can happen in regards to legislation
Speaker 5: that's already earmarked for certain things. I mean, we'll see.
Speaker 5: I mean, we have this, we're having this discussion all
Speaker 5: the time of how money is being spent with those cuts.
Speaker 5: But that was a surprise. So I don't know where
Speaker 5: that's going at this point, but I will see.
Speaker 2: Would you think of the Democrats in the room the
Speaker 2: Algreen demonstration. We're three minutes into this thing. Actually I
Speaker 2: thought it was going off the rails. Donald Trump did
Speaker 2: seem to get things under control again, or at least
Speaker 2: Democrats gave up on the initial effort to protest. There
Speaker 2: were a few who walked out, like Bernie Sanders, a
Speaker 2: few who boycotted. Does any of this.
Speaker 5: Matter No, I mean, I think this is kind of
Speaker 5: the polarization of the country and you saw it once again.
Speaker 5: Just what I said at the beginning of the show
Speaker 5: though that concerns me is you do have issues that
Speaker 5: we can't agree on, or tragedies that we should all
Speaker 5: be agreeing on. That just we can't even be doing
Speaker 5: that from both sides of the aisles. So I mean,
Speaker 5: does it make people look I'm just saying this from
Speaker 5: a Democrat perspective because they're in the minority right now,
Speaker 5: but they don't look classy when they're reacting that way
Speaker 5: in regards to you know what, yelling and during the speech. Obviously,
Speaker 5: I'd say the same thing for Arjorie Taylor Green when
Speaker 5: Biden was doing it. So both sides do it, and
Speaker 5: it's just I think it's not a good way to act.
Speaker 2: Joe, Well, that's right, and that's that's why we like you. Actually,
Speaker 2: you were brought up the right way. It was kind
Speaker 2: of weird watching that they're holding up the signs. I
Speaker 2: thought I was looking at an auction holding.
Speaker 8: Up it's trashy.
Speaker 2: I forget it was congressomme to leave had a whiteboard.
Speaker 2: I'm going to start doing that with some guests when
Speaker 2: they don't answer my questions. I'm going to hold up
Speaker 2: the whiteboard. You can just watch the YouTube feed and
Speaker 2: figure out how I feel about it. Just a minute left,
Speaker 2: Ashley Davis, it's great to have you here. Is Donald
Speaker 2: Trump going to be defined in this second term by
Speaker 2: the tariffs or is there more to it?
Speaker 5: I don't know. I mean, we thought this. We had
Speaker 5: the same conversation in twenty eighteen twenty, you know, end
Speaker 5: of twenty seventeen, beginning twenty eighteen, and then look what
Speaker 5: happened after the tough terroriffs were put on in China
Speaker 5: and everyone said the world's going to come to an end,
Speaker 5: and then Biden never overturned those tariffs. So I think
Speaker 5: that there will be exemptions just like there were before.
Speaker 5: I think obviously China and Mexico, and as Sectuary of
Speaker 5: Utnik said today, that's a war on drugs, not on tariffs.
Speaker 5: We'll see. We'll see what happens on April second. With
Speaker 5: reciprocal tariffs. I think that's obviously a big negotiating tactic
Speaker 5: for the president as well. I think these can be
Speaker 5: defined on a lot. We'll see. Remember last week we
Speaker 5: were talking about Ukraine in the fight in the Oval.
Speaker 5: So this is just a topic of the day.
Speaker 2: Oh my god, Ashley, the world shifts again under our feet.
Speaker 2: Come see us when you're back in the Capitol. It's
Speaker 2: always our pleasure to spend time with the great Ashley Davis,
Speaker 2: Republican Strategist, S three Group, Joe Matthew in Washington. We're
Speaker 2: going to talk about the tariffs in our second hour
Speaker 2: with former Treasury Secretary Larry Summers. Much more ahead, Keller
Speaker 2: at Large is coming in hot from Boston. Next.
Speaker 1: Right here on Bloomberg, you're listening to the Bloomberg Balance
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Speaker 2: We peek out of one eye today in the nation's capital.
Speaker 2: Everybody's a little bit bleary after the longest speech in
Speaker 2: recorded history, at least before a joint session of Congress. Yeah,
Speaker 2: one hundred minutes. Truly, you were with us live for
Speaker 2: the duration on Bloomberg Radio and on Bloomberg Television, eight
Speaker 2: hundred eighty eight words, much of it having to do
Speaker 2: with tariffs, but also funding the government. What are we
Speaker 2: nine days out now, nine days out from a shutdown?
Speaker 2: As we seek the truth here on Bloomberg, straddling both
Speaker 2: ends of Pennsylvania Avenue, we can tell you that Donald
Speaker 2: Trump is meeting with House Republicans today at the White
Speaker 2: House on crafting a plan to avoid a shutdown. Elon
Speaker 2: Musk on the other end on Capitol Hill, meeting with
Speaker 2: lawmakers following his fetting last night in the House Chamber. Meanwhile,
Speaker 2: today the House Oversight Committee is busy. Jim Colmer had
Speaker 2: an early start after a late night drawing Democratic mayors
Speaker 2: from sanctuary cities around the country to testify before the committee. Interesting,
Speaker 2: none of the mayors of these cities ever call them
Speaker 2: sanctuary cities. But as you consider the idea here of
Speaker 2: the Oversight trying to get some buzz and a very
Speaker 2: busy news cycle, there's only one strategy left, and that
Speaker 2: is video production. They actually made a trailer for this
Speaker 2: hearing that unfolded this morning with the likes of Mayor
Speaker 2: Eric Adams of New York, Michelle wou of Boston. Here's
Speaker 2: a taste.
Speaker 3: But provide sanctuary and protection for dangerous criminals push back in.
Speaker 9: The sanctuary City of Boston, Mayor Michelle wou So the
Speaker 9: city will not cooperate with his plan for mass deportation.
Speaker 6: These agents in Massachusetts arresting two illegal immigrants facing it
Speaker 6: sex crimes against children and two separate instances.
Speaker 2: Yeah, that's just a taste. This thing's a couple of
Speaker 2: minutes long, a lot of grainy images. I think I
Speaker 2: saw a couple of my old colleagues from the Boston
Speaker 2: News business in there. The Herald looming large. And if
Speaker 2: you're with us on ninety two nine, we see you
Speaker 2: because we wanted to get into this testimony today from
Speaker 2: the view of one of these cities. This is big
Speaker 2: local news. You don't need me to tell you that.
Speaker 2: If you're in Boston, if you're in New York, if
Speaker 2: you're in Chicago or Denver. And we have the voice
Speaker 2: of Boston politics with us, the Dean of Boston Politics,
Speaker 2: the great John Keller keleret Large, political analyst at the
Speaker 2: CBS affiliate my alma man Ter wdbz's with us now
Speaker 2: live from the Lawless City of Boston. The dystopian landscape, John,
Speaker 2: I'm picturing burning garbage cans and cars, as you join
Speaker 2: us from the middle of Blade Runner. You know, I
Speaker 2: checked to see if I could get a trailer for
Speaker 2: us here, John, and it's not in the budget. And
Speaker 2: I'm wondering what is the point of this whole exercise.
Speaker 10: Yeah, the only car is being overturned here in Boston
Speaker 10: are after one of our pro sports teams wins another championship.
Speaker 10: Maybe some college students get a little liquored up and
Speaker 10: go overboard.
Speaker 2: But yeah, in in there for that.
Speaker 10: I've been watching this. Go ahead, Joe.
Speaker 2: Sorry, no, I've been there for that. You tell me
Speaker 2: what did you see today? You're watching so our viewers
Speaker 2: and listeners didn't have to.
Speaker 10: Yeah, well, I understand why the Republicans wanted to stage
Speaker 10: this hearing. Gives them a chance to crank up the
Speaker 10: video machine, as you just pointed out, which feeds the
Speaker 10: fervor and the fear in their base. And there's no
Speaker 10: question about it. Immigration and lack of controls over immigration,
Speaker 10: lack of a comprehensive plan, has been a winning political
Speaker 10: issue for the Republicans. Donald Trump has refined it to
Speaker 10: an art form, so I get it. But so far,
Speaker 10: the hearing is a huge dud for the Republicans. You
Speaker 10: know the problem is they've all been salivating ever since
Speaker 10: in December of twenty three when they hauled the three
Speaker 10: college presidents before this oversight committee hearing. Remember Claudine Gay
Speaker 10: from Harvard, the presidents of PAAA MIT and they were
Speaker 10: just turned into mincemeat by the panelists. Well, that's not
Speaker 10: what's going on today, because big city mayors are not
Speaker 10: college presidents. With all due respect to the I'm sure
Speaker 10: many college presidents in your audience, Joe, these mayors know
Speaker 10: how to how to engage in a fight, and they
Speaker 10: came ready. But they really haven't been challenged. In particular.
Speaker 10: Mayor Wu, supposedly presiding over this paradise for rapists, has
Speaker 10: yet to be confronted with any specific evidence of any
Speaker 10: kind of malfeasance attributable to Boston's status as a sanctuary city.
Speaker 10: Time and again, the mayors have been patiently explaining to
Speaker 10: frustrated Republicans that if there's an illegal undocumented immigrant who's
Speaker 10: wanted on a violent crime charge and there's a warrant
Speaker 10: over to ice, they go, no problem, no questions asked,
Speaker 10: and they haven't been able to refute it so so far.
Speaker 10: It's democratic mayors, ten Republicans on the Oversight Committee zero
Speaker 10: and we're only in the third thing.
Speaker 2: All right, Well, let's get a taste of this because
Speaker 2: to your point, John, Michelle wou did come armed with
Speaker 2: actual data when it came to crime rates in the city.
Speaker 11: Let's listen, this federal administration is making hard working, tax paying,
Speaker 11: god fearing residents afraid to live their lives. A city
Speaker 11: that's scared is not a city that's safe. A land
Speaker 11: ruled by fear is not the land of the free.
Speaker 11: Next month, Boston will celebrate two hundred and fifty years
Speaker 11: of our nation's freedom. And in every one of those years,
Speaker 11: Boston has welcomed the world to our shores.
Speaker 2: John. She went on to say that each year she's
Speaker 2: been in office, the murder rate has declined in the
Speaker 2: city of Boston. She came packed with data that argued
Speaker 2: with what some of the Republican committee members were saying.
Speaker 2: I'm curious how this is playing at home, because all
Speaker 2: of these Democratic mayors have one thing in common. They
Speaker 2: held news conferences before they left, and they got a
Speaker 2: lot of local coverage, and most of it was positive.
Speaker 2: Is that the case in Boston?
Speaker 10: Well, I mean as far as today's hearing goes, remains
Speaker 10: to be seen. But I'm going to be commenting on
Speaker 10: this later on our local news, and I guarantee you
Speaker 10: I'm going to give her a good review. And you know,
Speaker 10: I've had my dust ups with Mayor Woo in the past.
Speaker 10: I'm sure we'll have others in the future. But she's
Speaker 10: handling this very well. I mean a tip of the
Speaker 10: cap to the Boston Police Department. They've been doing a
Speaker 10: great job and it shows up in the crime stats,
Speaker 10: which is some of the best for a major American city.
Speaker 10: So there's really no they're there for the Republicans on
Speaker 10: this panel to get a grip on. And I also
Speaker 10: think Jonah this has been kind of interesting. She's the
Speaker 10: only woman on a panel for mayors. They seem reluctant
Speaker 10: to go after her. You know, it's Ash Wednesday. She's
Speaker 10: got the Ash cross on her forehead. And while she's
Speaker 10: generally a sort of a soft spoken person, she has
Speaker 10: come prepared. Her Her body language is good, her voice
Speaker 10: quality is calm, or demeanor is calm and composed. But
Speaker 10: as you heard in that bite, she's got a little
Speaker 10: aggressive with her criticism of the Republican policies. One of
Speaker 10: the quick things Joe. In the run up to this,
Speaker 10: Mayor Wu and local advocates been making a big issue
Speaker 10: of the impact of the deportations and the ice, the
Speaker 10: increased ice activity on local businesses. Businesses that cater to
Speaker 10: the immigrant community's restaurants, pizza joints, you name it. These
Speaker 10: places are struggling. They're deserted because many immigrants are afraid
Speaker 10: to go out. So I know you've interviewed the US
Speaker 10: Chamber of Commerceville so many times about their concerns about
Speaker 10: mass deportation. I thought I heard James Comer, the chairman
Speaker 10: of this committee, at one point say, oh, well, there
Speaker 10: is no mass deportation. Maybe I misheard that, but if
Speaker 10: he did say it, maybe that indicates a rising level
Speaker 10: of concern in Republican circles about how all this is playing,
Speaker 10: at least within the business community.
Speaker 2: Spending time with John Keller on Balance of Powerful only
Speaker 2: got a couple of minutes left. John, I want to
Speaker 2: ask you about what appears to be that the dust
Speaker 2: up locally. You can tell me. Josh Kraft, who's of
Speaker 2: course challenging Michelle Wou was tweeting on X do we
Speaker 2: need to spend six hundred and fifty thousand dollars a
Speaker 2: taxpayer funds on a show trial hearing. There's a story
Speaker 2: that she spent as much money on an outside law
Speaker 2: firm to prepare for this. Is that true and what
Speaker 2: do you know about it?
Speaker 10: Apparently it's true. Nine hundred dollars an hour this law
Speaker 10: firm charges, And of course my immediate reaction, Joe, was
Speaker 10: what am I doing in this?
Speaker 2: No kidding?
Speaker 10: Why didn't I get into that racket? But while the
Speaker 10: six hundred and fifty thousand dollars figure, which was confirmed
Speaker 10: by the city that they've spent in six weeks of
Speaker 10: prep for today's hearing is an eye popping figure, it
Speaker 10: sort of looks so far like money well spent. As
Speaker 10: I say, Mayor Wu is knocking it out of the park.
Speaker 10: We put in a call for comment to Josh Kraft
Speaker 10: to who's her most significant challenger so far, it'd be
Speaker 10: interesting to see if he even wants to talk about it.
Speaker 10: That's how well it's going for Michelle Wu.
Speaker 2: Amazing, I've only got a minute left, John, you're going
Speaker 2: to be talking about I know you're already writing about
Speaker 2: it on the website. The big speech last night. Was
Speaker 2: that a win for Donald Trump? We saw a number
Speaker 2: of folks recoil from the Democratic delegation in Massachusetts. I
Speaker 2: believe it was Jim McGovern said he would rather have
Speaker 2: needles in his eyeballs than sit through that.
Speaker 10: I'm sure that could be arranged if he wants to
Speaker 10: talk to Tom Holman's the ice guy. But you know
Speaker 10: it was it was a win in the sense of,
Speaker 10: you're basically speaking uncontested. You know, the cutaways of Democrats
Speaker 10: holding up lame little signs. That's not going to move
Speaker 10: the needle for them. So the Trump basse, I'm sure
Speaker 10: loved it. Catnet for them.
Speaker 2: I don't think it hurts the.
Speaker 10: Democratic bait to get a full.
Speaker 2: Of the Trump is now a political rally apparently. Hey John,
Speaker 2: thank you as always the great John Keller, a great
Speaker 2: friend of the program. Keller at Large Busy in Boston
Speaker 2: will keep tabs on the hearing for you and assimilar panel. Next,
Speaker 2: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 2: Looks like we have breaking news on this matter, Kayley,
Speaker 2: and look no further than truth social Donald Trump so
Speaker 2: frequently making the announcement on social media, why hold an event?
Speaker 2: Justin Trudeau of Canada called me to ask what could
Speaker 2: be done about tariffs. I told him many people have
Speaker 2: died from fentanyl came through the borders of Canada and Mexico,
Speaker 2: and nothing has convinced me that it has stopped. Is
Speaker 2: this good news, Kayley? He said it's gotten better, but
Speaker 2: I said that's not good enough, calling it in a
Speaker 2: somewhat friendly manner, unable to tell them when the Canadian
Speaker 2: election is taking place, which made me curious, like what's
Speaker 2: going on here the president of the United States rights
Speaker 2: I then realized he is trying to use this issue
Speaker 2: to stay in power. Good luck justin exclamation point. Tariff's
Speaker 2: still on?
Speaker 12: Well, it would seem so. At least there's very little
Speaker 12: suggestion in this post that tariffs are off. As he said,
Speaker 12: what he has seen from Canada to this point on
Speaker 12: fentanyl is not good enough. Leaving the domestic Canadian politics aside,
Speaker 12: we should point out that Prime Minister Trudeau has said
Speaker 12: he is stepping down. There is no indication for him
Speaker 12: that he actually is changing his mind about that, trying
Speaker 12: to remain in his position. But on the fentanyl issue
Speaker 12: specifically is and this is fitting with the framing this
Speaker 12: administration has put out there that this is about a
Speaker 12: drug war, not a trade war. This is what the
Speaker 12: Commerce Secretary was alluding to. What they're trying to do
Speaker 12: right now, they say is actually just dem the flow
Speaker 12: of fentanyl. The real trade war starts what less than
Speaker 12: four weeks from now on April second, when reciprocal tariffs
Speaker 12: go it.
Speaker 2: If they go into place, If yes? What are the
Speaker 2: panel thinks about this? Rick Davis and Genie Shanzino are
Speaker 2: whether this Bloomberg Politics contributors our signature panel. They were
Speaker 2: up all night with us as well listening to and
Speaker 2: watching this address. He of course partner at Stoneport Capital,
Speaker 2: at Republican Strategists, genius political science professor at Iona University
Speaker 2: or democratic analyst, Rick, What do you think about this
Speaker 2: update here? Can we assume based on this anecdotal a
Speaker 2: post by Donald Trump at the tariffs will stick?
Speaker 10: Yeah?
Speaker 7: I think so until they don't stick. Look, I mean
Speaker 7: we need to understand Donald Trump sees tariffs as a
Speaker 7: tactic strategy is to you know, make America rich again,
Speaker 7: and tariffs are a component of that and probably the
Speaker 7: component he loves to talk about most.
Speaker 2: But he's he's like a day trader.
Speaker 7: You know, let's put the tariffs on today, We'll take
Speaker 7: him off tomorrow and put him back on a day later. Frankly,
Speaker 7: much like his handling of the Ukrainian War. Well, we're
Speaker 7: going to find a deal we can do, and then
Speaker 7: once we do that deal, we'll have some talks about
Speaker 7: peace treaties.
Speaker 4: You know.
Speaker 7: It's it's very transactional. It's that you know, sort of
Speaker 7: mercantile government that we've been talking about since day one
Speaker 7: of his administration. So it shouldn't surprise anybody that he's
Speaker 7: going to adjust these things. But remember he put these
Speaker 7: tariffs against China and other trading partners together in the
Speaker 7: beginning of his administration and many of those are still
Speaker 7: in place today. So I we have no doubt his
Speaker 7: long term plan is to use tariffs to bring in
Speaker 7: revenue to the treasury of the United States, and that's
Speaker 7: not going to change anything. Just who they're applied to
Speaker 7: will be somewhat subjective and how high and how long
Speaker 7: they last is completely at his whim.
Speaker 12: Well, speaking of his whims, he has decided to post
Speaker 12: for a second time on truth Social in just as
Speaker 12: many minutes. The President now saying, for anyone who is interested,
Speaker 12: I also told Governor Justin Trudeau of Canada that he
Speaker 12: largely caused the problems we have with them because of
Speaker 12: his weak border policies. He goes on to say that
Speaker 12: allowed tremendous amounts of fentanyl and illegal aliens to pour
Speaker 12: into the United States. These policies are responsible for the
Speaker 12: deaths of many people. Genie, A few things here won
Speaker 12: last night and his address to a joint session, he
Speaker 12: actually was talking about Joe Biden, his predecessor's border policies,
Speaker 12: as being really what is that issue here? Also, when
Speaker 12: we're considering fentanyl specifically from Canada, as we've repeatedly reminded
Speaker 12: our audience, forty three pounds a fentanyl across the northern
Speaker 12: border last year according to US data, is it actually
Speaker 12: possible for Canada to get that down to zero? Is
Speaker 12: that what it's actually going to take here?
Speaker 6: It is a made up issue, as we know when
Speaker 6: we look at the numbers of fentanyl coming from Canada,
Speaker 6: and you know, Rick was just saying he's using it
Speaker 6: as a negotiating tactic. We've heard that he's using it
Speaker 6: to get money for the treasury. We've heard that he's
Speaker 6: using it because of drugs. We've heard that the problem
Speaker 6: is there is no clear reason he is given why
Speaker 6: Americans should go through the pain that they will feel
Speaker 6: if he keeps this up. As he was talking about
Speaker 6: last night, there's going to be a disturbance. How much
Speaker 6: of a disturbance, how much pain for how long? He
Speaker 6: also noted after that that we can take it? Who
Speaker 6: is we the wealthy? Can people on the ground take
Speaker 6: it when they go to the grocery store. The truth
Speaker 6: is he is acting like a bully. He has been
Speaker 6: doing it to Ukraine, He's now doing it to Canada,
Speaker 6: to our closest down Mexico. When we were in kindergarten,
Speaker 6: we learned that bullies bully because they are weak. He
Speaker 6: is making himself look weak, He is making the US
Speaker 6: look weak, and he's hurting the market and potentially the
Speaker 6: economy long term if he keeps this up. And when
Speaker 6: we talk about what he did in the first term
Speaker 6: on China, those were targeted tariffs and guess what, they
Speaker 6: hurt farmers so much we had to bail them out.
Speaker 6: This is a bad policy. We've known that for decades.
Speaker 6: We don't know why he is so committed to it,
Speaker 6: but he seems to be despite everything. Howard Luttink keeps
Speaker 6: going on the air and saying.
Speaker 2: Yeah, Donald Trump said last night, Rick, there'll be a
Speaker 2: little disturbance, but we're okay with that. It won't be much. Well,
Speaker 2: he regrets saying those words. They've got to be saving
Speaker 2: that for a campaign at already.
Speaker 6: Yeah.
Speaker 7: First of all, he's not running again, so they can
Speaker 7: run all the campaign as they want, maybe against Jade Vans,
Speaker 7: but you know, he's he's not on a ballot again,
Speaker 7: and so I think that gives him a little bit
Speaker 7: more flexibility. Secondarily, I'm a little surprised he's actually hedging
Speaker 7: a little bit because typically he would just say how
Speaker 7: great this was going to be and how richet was
Speaker 7: going to make America, and he wouldn't even consider the
Speaker 7: negative impact on certain communities, farmers and manufacturers and others.
Speaker 2: Who would be hit by these surpluses.
Speaker 7: But remember, too, he looks at the big picture and
Speaker 7: he says, look, we've got one hundred billion dollar trade
Speaker 7: imbalance with Canada. That's what he's trying to get at.
Speaker 7: He wants to have parody, and we'll see when we
Speaker 7: get to April. April second, because April first, according to
Speaker 7: Donald Trump, he's worried. You might be thinking he's kidding.
Speaker 7: And when the reciprocity's hit on top of whatever he's
Speaker 7: got outstanding by then on these trade issues, it's going
Speaker 7: to be even more significant. So I think we're only
Speaker 7: digging into the very first skirmish of this trade war
Speaker 7: with Canada and Mexico and other nations around the world.
Speaker 12: Well, certainly that is the signal, at least at this point.
Speaker 12: He is not suggesting he's taking his foot off the gas,
Speaker 12: but perhaps pressing it down harder as we barrel toward April.
Speaker 12: In the laundry List Genie of tariffs, he says he
Speaker 12: will be implementing next month. To Rick's point, though, on
Speaker 12: the idea that Donald Trump the president may be hedging
Speaker 12: here around the idea that yes, we could actually see
Speaker 12: some economic impact from this, do you think that's reflective
Speaker 12: of what he's seeing in the stock market. What economic
Speaker 12: data is suggesting is that a hint that he is
Speaker 12: paying attention to that.
Speaker 6: Yeah, I think there's no doubt he's seen, just as
Speaker 6: we all have, what's happened in the markets the last
Speaker 6: two days. There was just a study out gen z
Speaker 6: Men of fourteen points down in terms of support for
Speaker 6: what the president is doing in the last forty three
Speaker 6: days on inflation and the cost of living. So he
Speaker 6: is seeing all of these signs. The reality is, if
Speaker 6: he keeps this up, this is a self inflicted wound.
Speaker 6: He may find himself as the first president to deliberately
Speaker 6: engineer a severe depression or recession in the United States.
Speaker 6: Normally we see these things and they are not self inflicted.
Speaker 6: And that is the question. Why is he so committed
Speaker 6: to this? What does he want to get out of it?
Speaker 6: And again he's not telling American people if we're going
Speaker 6: to feel pain, which we will if he keeps this
Speaker 6: up to what end?
Speaker 5: What is the end of this?
Speaker 12: What does he want?
Speaker 6: Lowering a fentanyl coming across the border from Canada when
Speaker 6: it's already pretty much as low as it can go.
Speaker 6: That doesn't add up and it doesn't make any sense.
Speaker 6: So if he's just being a bully, that is not enough.
Speaker 6: So you know, there's so many questions here, and this
Speaker 6: is detrimental to the economy, to the market, and quite frankly,
Speaker 6: to the GOP if he keeps it up long term.
Speaker 6: Even as Rick says, he's right, he's not running again,
Speaker 6: but gosh, I hope he's not just going to destroy
Speaker 6: the economy because he doesn't care that he's not running again.
Speaker 2: Well, what do you make of the mixed message between
Speaker 2: the President in the Commerce Secretary of the last twenty
Speaker 2: four hours, Rick Howard Lutnik has done, I believe, four
Speaker 2: broadcast interviews essentially contradicting what Donald Trump is saying about tariffs.
Speaker 2: Is this a good cop bad cop thing? In our
Speaker 2: remaining minute? Could be.
Speaker 7: They're very close. They talk all the time from what
Speaker 7: I hear, and I think that Donald Trump probably is
Speaker 7: getting him to lay down a message that either he
Speaker 7: can use in his negotiations with the heads of state
Speaker 7: that he's dealing with, or even try to keep the
Speaker 7: markets tame for the period of time that he's trying
Speaker 7: to figure out what he wants to do with these adjustments.
Speaker 7: So yeah, I think it's a good tactic. I mean,
Speaker 7: everyone's talking about him today and everyone's scratching her head
Speaker 7: last night. He's sort of keeping that going today with
Speaker 7: these changes. So stand by.
Speaker 12: We always are, Rick Davis and Jeanie Shanzy and our
Speaker 12: signature political panel. Thank you so much. And on that note,
Speaker 12: we are standing by for the beginning of the White
Speaker 12: House News conference with the Press Secretary Caroline Levitz lated
Speaker 12: to begin this hour. We'll see if we get some
Speaker 12: clarity from her, and we'll have more ahead here on
Speaker 12: Bloomberg TV and radio.
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch
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Speaker 2: As we cover politics here in the nation's capital. Thanks
Speaker 2: for being with us on the Wednesday edition of Ballots
Speaker 2: of Power, Unpacking Donald Trump's speech from last night, Waiting
Speaker 2: potentially for news on tariffs today, and with regard to that, Kaylie,
Speaker 2: we've been talking so much about Canada and Mexico, China
Speaker 2: also has tariffs that are not getting that much debate.
Speaker 2: Actually retaliatory tariffs have been announced from Beijing, and these
Speaker 2: appear to be here to stay. It's a completely separate
Speaker 2: conversation from the so called drug war that we're hearing
Speaker 2: the administration described with our two neighbors, although.
Speaker 12: They do blame fentanyl for this as well, saying right,
Speaker 12: they're not seeing enough progress from China and stemming the
Speaker 12: flow of the ingredients to places like Canada and Mexico
Speaker 12: where it then crosses the border into the United States.
Speaker 12: And yes, twenty percent levies are intact, and there is
Speaker 12: no conversation at least at this time from the administration
Speaker 12: suggesting there may be a pullback or rethinking of that
Speaker 12: as we're hearing today about Mexico.
Speaker 2: And Canada, or rethink when it comes to fentanyl, or
Speaker 2: rethink when it comes to Taiwan, or maybe a rethink
Speaker 2: when it comes to cyber Kaylee. There was a really
Speaker 2: important hearing that took place earlier today on Capitol Hill,
Speaker 2: the China Select Committee, and a hearing that would otherwise
Speaker 2: potentially be drowned out by so many of the other
Speaker 2: headlines that are happening here today and the typhoons. The
Speaker 2: name of the hearing, how to deter aging cyber actions
Speaker 2: and enhance America's lackluster cyber defenses. Salt typhoon, of course,
Speaker 2: what they're referring to here, and what is a concerted
Speaker 2: threat against America?
Speaker 12: And we're lucky to be joined now by someone who
Speaker 12: is fresh off of testifying before the committee in that hearing.
Speaker 12: Laura Glante is with us. She is former director of
Speaker 12: the Cyber Threat Intelligence Integration Center and is here with
Speaker 12: us in our Washington, d C. Studio. Welcome to Balance
Speaker 12: of Power, Laura. It's nice to have you. Obviously you
Speaker 12: already have answered a lot of questions today, but we
Speaker 12: have a few more for you, specifically when it comes
Speaker 12: to countering China specifically, what is the most effective way
Speaker 12: to do that and does it actually involve having to
Speaker 12: play the game and hacking them right back? What would
Speaker 12: that look like?
Speaker 13: You have to use the different lovers of state power, diplomatic,
Speaker 13: military sanctions, economic punitive measures in order to get across
Speaker 13: China that we are not an acceptable target for hacking.
Speaker 13: Our critical infrastructure has been hacked, energy networks, transportation networks,
Speaker 13: this is offline. We should not be able to have
Speaker 13: American networks at risk. Howd to risk constantly by the
Speaker 13: Chinese military.
Speaker 2: I want to hear more about our offensive capabilities, the
Speaker 2: extent to which you can talk about them. We hear
Speaker 2: about hacking back, We hear about, well, we could go
Speaker 2: turn the lights out if we wanted to. What is
Speaker 2: the United States actually capable of doing? Having seen the
Speaker 2: offensive nature of China's posture against.
Speaker 13: US, the US has long been postured aggressively to go
Speaker 13: after China's networks right where there are hacks against the US.
Speaker 13: We need to be able to hold people to account.
Speaker 13: Right Cyber Command is one of those key agencies that's
Speaker 13: able to do that.
Speaker 8: Now.
Speaker 13: The question really happens when the question that we continue
Speaker 13: to grapple with here is now, how do we show
Speaker 13: China that it's unaccept unacceptable to go after critical infrastructure?
Speaker 13: And at the same time, we really need to be
Speaker 13: able to partner with other countries in the region who
Speaker 13: will help hold China to account as well.
Speaker 10: Well.
Speaker 12: When we're considering partnerships, to what extent is this a
Speaker 12: public driven effort versus having to partner with the private sector,
Speaker 12: Especially Laura, considering what we're seeing in the federal government
Speaker 12: right now with the calling of the workforce in many areas.
Speaker 12: I know you have some concerns about the impact that
Speaker 12: is going to have on our cyber capabilities in particular.
Speaker 12: Can you just speak to that.
Speaker 8: Yeah, we're really.
Speaker 13: Worried that the level of talent that you have in
Speaker 13: the federal government, particularly technical talent that's been recruited from
Speaker 13: the outside, if those folks leave or if those folks
Speaker 13: are pushed out, that's a real hit on America's cybersecurity actions.
Speaker 13: And here's why. Our networks in the US are overwhelmingly
Speaker 13: private networks, right our water systems, our energy systems, these
Speaker 13: are run by private companies or utilities. We need people
Speaker 13: who can take that information about what adversaries are doing
Speaker 13: and push it out to the frontlines of the folks
Speaker 13: who are able to protect those networks.
Speaker 2: China left a lot of breadcrumbs in Salt Typhoon. Do
Speaker 2: we have a handle on the bugs, if you will,
Speaker 2: that are in our system? If they infiltrated utilities, water
Speaker 2: treatment systems, and so forth. What are they doing in
Speaker 2: there and how do we get them out?
Speaker 13: Look Salt Typhoon, which back in January a Treasury action
Speaker 13: showed that this was the Ministry of State Security, the
Speaker 13: Intel guys in China who went and hacked over nine
Speaker 13: US telecommunications providers. Right that gives core access to Americans,
Speaker 13: user data to Americans information. That's a huge espionage operation
Speaker 13: in a big win for China. The other big problem
Speaker 13: on this digital breadcrumbs is where the Chinese military has
Speaker 13: put prepositioned access sort of open doors sleeper cells into
Speaker 13: US infrastructure that could cause chaos and really sew a
Speaker 13: level of doubt in people's basic ability to go bend their.
Speaker 2: Vulnerable or can we get these open doors closed?
Speaker 8: We're still vulnerable.
Speaker 13: I mean, this is one of the really hard challenges
Speaker 13: that we have here in the asymmetry of the US
Speaker 13: is a really digitally connected place, right, and in some
Speaker 13: sense here we've got to really push better cyber defense
Speaker 13: and cybersecurity on the water plants, on the energy plants
Speaker 13: that are sitting there as the front line between nation
Speaker 13: state adversaries and the American people.
Speaker 12: Well, and when we're thinking about nation state adversaries, obviously
Speaker 12: concerns around that go beyond China, thinking specifically of Russia here,
Speaker 12: especially in light of the mixed reporting we have gotten
Speaker 12: about the Pentagon and Cybercom potentially ceasing operations when it
Speaker 12: comes to Russian cyber activity specifically, how concerned are you
Speaker 12: about that? What would that actually do to our ability
Speaker 12: to counter threats like this, gather intelligence?
Speaker 13: Even Russia is a core adversary in cyberspace for the US.
Speaker 13: If we stop planning operations, if we stop any of
Speaker 13: the muscle memory that goes into building packages that are
Speaker 13: able to target and counter aggressive Russian activity against the US,
Speaker 13: that'll really put us behind. And it's that constant ability
Speaker 13: to understand how Russian activity goes at US networks that
Speaker 13: we've got to keep our eyes on and really keep
Speaker 13: people focused on in the government.
Speaker 8: If we're going to win this domain.
Speaker 2: Could we wage a cyber war? Do we have the
Speaker 2: tools that would be required to do this? In a
Speaker 2: real sense?
Speaker 13: The US has the preeminent capability, yes, space.
Speaker 2: But Russia we're.
Speaker 13: Careful about using it. We follow the rule of law
Speaker 13: like that is what sets us apart from authoritarian regimes
Speaker 13: in Russia and China, and that's a core difference on
Speaker 13: how we're operating in this space, well, at.
Speaker 12: Least how we've been operating in the space. Do you
Speaker 12: sense that there's going to be a shift in this
Speaker 12: kind of cyber policy from this administration, Have they actually
Speaker 12: articulated the way in which they're approaching threats like these?
Speaker 12: We certainly didn't hear anything about cyber or even artificial
Speaker 12: intelligence for that matter, in President Trump's address last night.
Speaker 8: I think that's the right question.
Speaker 13: One of the huge issues that we've collectively been grappling
Speaker 13: with for years now that I'm curious to see how
Speaker 13: this administration takes on. Are ransomware actors? These are criminal
Speaker 13: groups almost always based in Russia, and they're holding American
Speaker 13: hospitals hostage through their network security practices. We've had ambulances
Speaker 13: diverted from ransomware attacks. Are these folks going to have
Speaker 13: consequences pushed against them in Russia? That's a big question
Speaker 13: and really critical for Americans.
Speaker 2: I don't know about your experience today. You were called
Speaker 2: to testify on Capitol Hill in front of a very
Speaker 2: important committee that is taking the time to get into this.
Speaker 2: I think we've already established very important story. Do these
Speaker 2: lawmakers know what questions to ask? Are they read in?
Speaker 2: Do they understand the threat?
Speaker 13: I think the Hill understands that the level of espionage
Speaker 13: and attack capabilities that China wages against the US.
Speaker 8: Is a really critical issue.
Speaker 13: The question is if we're going to really get serious
Speaker 13: about heartening our defenses. This is an offense game and
Speaker 13: a defense game, right, are we going to put in
Speaker 13: place minimums? Are we going to put in place standards
Speaker 13: in certain critical industries so that we've got safer services
Speaker 13: that defend against the types of cyber attacks that we've
Speaker 13: been talking about.
Speaker 12: Would that mean, though, providing resources for those in the
Speaker 12: private sector to fortify those defenses, because certainly that's not
Speaker 12: without cost.
Speaker 8: In certain cases. Definitely.
Speaker 13: Water sector is a great example here. There's fifty thousand
Speaker 13: different municipalities that have a touch on your water. These
Speaker 13: are not well funded cybersecurity programs for the most part. Right,
Speaker 13: how do we make sure that we get that funding
Speaker 13: but also really that sense of priority that the devices
Speaker 13: that are being used to control the water tank in
Speaker 13: your county are actually protected.
Speaker 2: So what's the follow on here? Is it legislation or
Speaker 2: is this a fact finding mission that leads to more hearings.
Speaker 13: I think the question is how do you hold China account?
Speaker 13: And that's very much at the forefront of how legislators are.
Speaker 8: Thinking right now.
Speaker 13: Can we get more serious with non cyber means diplomatic etc.
Speaker 13: To be able to hold China to account for what
Speaker 13: they've done in cyberspace. And it's that pairing that's really
Speaker 13: the question.
Speaker 8: At hand right now.
Speaker 12: Well, and that obviously goes immediately in my mind to tariffs,
Speaker 12: as we're seeing this administration now basically saying that they're
Speaker 12: using tariffs as a negotiating tactic to extract behavioral changes
Speaker 12: they want to see. Right now, they're talking about a
Speaker 12: fentanyl production specifically, but could this also tread potentially into
Speaker 12: that realm cyber I.
Speaker 13: Think grouping in the volt typhoon, which are the critical
Speaker 13: infrastructure accesses that the Chinese have, would be one way
Speaker 13: to say, this is the unacceptable behavior that we're seeing
Speaker 13: out of China and linking it to something that China's
Speaker 13: already starting to feel.
Speaker 2: When you look at this administration versus the Biden administration,
Speaker 2: which I believe you work for, when it comes to
Speaker 2: the approach to cyber a cohesive policy, is there any
Speaker 2: difference between the two.
Speaker 13: Look Holding cyber adversaries to account has been the core
Speaker 13: and central policy now for multiple administrations. How you do
Speaker 13: it is the hard part and the other piece that's
Speaker 13: so tough in the US is because cybersecurity has been neglected.
Speaker 13: From just a baseline standpoint, it's so many companies in
Speaker 13: so many sectors. We are incredibly vulnerable and the more
Speaker 13: we throw out there, the more we worry about retaliation
Speaker 13: as well. We have to up our own defensive game.
Speaker 12: Just finally, Laura, on the subject of ability, have you
Speaker 12: seen Zero Day, this new Netflix show? Is that a
Speaker 12: real possibility? I mean, this is a funny question because
Speaker 12: the show.
Speaker 2: Flakes me out.
Speaker 12: But the idea that you can take out basically all
Speaker 12: transit infrastructure caused like a blackout nationwide, is that actually
Speaker 12: something that, in the worst case scenario could happen to
Speaker 12: this country?
Speaker 13: All right, I haven't seen a lot of Netflix, but
Speaker 13: I will have recently. But I will tell you that
Speaker 13: back in twenty seventeen, there was a cyber attack that
Speaker 13: the Russians waged on Ukraine that took down the port,
Speaker 13: that took down the banks, that took down a wide
Speaker 13: variety of society, and really ground everything to a halt.
Speaker 8: How'd they get in the TurboTax version in Ukraine?
Speaker 13: Was the way that they were able to pass that
Speaker 13: piece of malware in So look, widespread effects have happened before,
Speaker 13: and we really need to make sure we've got secure systems.
Speaker 8: So it doesn't happen again.
Speaker 2: It sounds like a yes, kid.
Speaker 12: Yeah, I'm not sure that.
Speaker 2: I thought for sure you were going to tell us
Speaker 2: you were technical consultant on them. No program, Laura Galante,
Speaker 2: what a treat to have you with us. Thank you
Speaker 2: for coming to answer our question straight from the hearing room.
Speaker 2: Former director the Cyber Threat Intelligence Integration Center. I'm Joe
Speaker 2: Matthew alongside Kaylee Lines in Washington. Glad you're with us
Speaker 2: here on balance of power. We do have a White
Speaker 2: House briefing that's underway. We're keeping an ear on that
Speaker 2: for you. For any clues into what happens next with tariffs.
Speaker 2: If you're watching truth Social, Apparently a call with Justin
Speaker 2: Trudeau President Trump didn't go all that well, Kayley, it
Speaker 2: looks like these tariffs are here to stay, at least
Speaker 2: for now.
Speaker 4: Yeah.
Speaker 12: The Press Secretary just confirming reciprocal tariffs are still set
Speaker 12: to go into effect on April second, though she also
Speaker 12: did say that President Trump has spoken to the Big
Speaker 12: three automakers. We'll have more on this ahead on Bloomberg
Speaker 12: TV and radio.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
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Speaker 1: thirty markets.
Speaker 2: Kaylee, are feeling a lot more chipper than they were
Speaker 2: around this time yesterday with another deep dive. We had
Speaker 2: a couple of them this week in a row on,
Speaker 2: of course, the fit over tariffs against Canada and Mexico,
Speaker 2: a story that has been just updated.
Speaker 12: Today, Yeah, confirmed by the White House Press Secretary, who
Speaker 12: is briefing the press right now, Caroline Levitt says the
Speaker 12: White House will be giving a one month exemption for
Speaker 12: cars on those Canadia, Canada, and Mexican tariffs through the
Speaker 12: USMCA trade Agreement. This tracks with Bloomberg's earlier reporting that
Speaker 12: they were considering this, and the Press secretary also confirmed
Speaker 12: that this comes after President Trump spoke with the heads
Speaker 12: of the big three US automators.
Speaker 2: That's right. We're keeping tabs on a White House news
Speaker 2: briefing that's underway right now, and if they add an
Speaker 2: event at the White House. Of course, we'll bring you
Speaker 2: there earlier. We're keying off of not only the words
Speaker 2: the Press Secretary, but the President untruth social and of
Speaker 2: course the Commerce Secretary Howard Lutnik earlier today here on Bloomberg.
Speaker 2: And we want to add the voice of Senator Shelley
Speaker 2: Moore Capito, the Republican from West Virginia, is with us
Speaker 2: right now, only hours after leaving the chamber on the
Speaker 2: House side, following the speech last night, with us life
Speaker 2: from Capitol Hill. Senator, it's great to see you, welcome back.
Speaker 2: Do you have a sense of Donald Trump's policies when
Speaker 2: it comes to teriffs, because they seem to be changing
Speaker 2: moment to moment and it's been giving the market a
Speaker 2: bit of aguity here. Do you know what the President
Speaker 2: wants to do with Canada and Mexico specifically?
Speaker 9: Well, I think I take my clue off what the
Speaker 9: President said last night and has said consistently that he feels,
Speaker 9: and I think the American worker feels that we've been
Speaker 9: disadvantaged in some ways in terms of tariffs and reciprocal tariffs,
Speaker 9: both with Canada and Mexico, and also his great concern
Speaker 9: over the flow of fentanyl. Obviously, I live in a
Speaker 9: state that has had this has had great impacts on
Speaker 9: my state as having some of the highest amount of
Speaker 9: fatalities on overdoses from fentanyl, and so I think he's
Speaker 9: been very clear on that. I think where he still
Speaker 9: leaves himself wiggle room, and I think it's smart we
Speaker 9: know he's a negotiator, is to use these tariffs as
Speaker 9: leverage point to either get more folks on the border,
Speaker 9: more law enforcement to prevent Fentanahl, more fair reciprocal trade
Speaker 9: going across the border. And that's why I think you
Speaker 9: see the fluidity that you see over the last several
Speaker 9: days as to where everything's going to land.
Speaker 12: Well, the President last night Senator did say that there
Speaker 12: may be some disturbance because of these tariffs, but that
Speaker 12: he's okay with that. At least should West Virginians be
Speaker 12: okay with any kind of economic disturbance that may result
Speaker 12: from these policies. What should they be willing to tolerate?
Speaker 9: Well, I think what the President knows and what I
Speaker 9: know from the last election is while the border played
Speaker 9: an enormous role, there's a debate whether the economy played
Speaker 9: a bigger role in what the voters decided that they
Speaker 9: wanted inflation was killing regular Americans at the grocery store.
Speaker 9: So I think if there's a if there is a
Speaker 9: very sensitive spot for every American, it's how much they're
Speaker 9: paying for regular goods and service. And so if the
Speaker 9: tariffs come in, and when they come in, and they
Speaker 9: and we see dramatic raises in whatever energy prices or
Speaker 9: whatever it could be food prices, you're going to hear
Speaker 9: a pretty loud outcry because it's just going to be
Speaker 9: compiling on top of what we already saw during the
Speaker 9: Abide administration. And so I think that's what the President
Speaker 9: was trying to say, be patient, things will settle back down,
Speaker 9: and in the long run, I think he feels that
Speaker 9: will bring prices down and our dollars will go a
Speaker 9: lot farther. But I think he also left himself some
Speaker 9: wiggle room here to make sure that he can make
Speaker 9: adjustments in speaking with their governors or even talking to
Speaker 9: renegotiating the us mc A. So I think you know,
Speaker 9: he asked for patients. I would say patients would be
Speaker 9: good in this instance, but our patients are going to
Speaker 9: run thin if prices really really become the big pivot
Speaker 9: point here rather quickly.
Speaker 2: That's interesting. I wonder how much patience you have for
Speaker 2: the DOGE with some of the approaches that they're taking.
Speaker 2: Senator at DOCH team reportedly visiting the US Treasury Department
Speaker 2: facility in Parkersburg in your home state, do you worry
Speaker 2: about their access and the protection of personal information?
Speaker 4: You know?
Speaker 9: I think what they are doing is in these cases
Speaker 9: they are using the professionals. They're going into the Bureau
Speaker 9: Fiscal Service and other things, using the professionals who are
Speaker 9: able to have the security clearances to go into the
Speaker 9: data to find the data that they're looking for. So
Speaker 9: I'm really less worried about the personal private information that
Speaker 9: might be corrupted here. I don't think that's the big issue.
Speaker 9: I think the issue is in Parkersburg, for instance, we
Speaker 9: lost one hundred jobs. That's a big hit to a
Speaker 9: small community, and so there were probationary employees. It's yet
Speaker 9: to be seen what's going to happen with them. But honestly,
Speaker 9: we just had lunch and Elon Musk was there, and
Speaker 9: if you listen to him logically talk about some of
Speaker 9: the white waste FRAWD abuse that they've found in systems
Speaker 9: such as Social Security, where fifteen people are getting paid
Speaker 9: off the same number, or fifteen checks are being sent
Speaker 9: off the same number, things that are make total common sense.
Speaker 9: This is where I think Doge has been extremely helpful
Speaker 9: and will continue to be and even more so Senator.
Speaker 12: Finally, as you said on the Appropriations Committee, keeping in mind,
Speaker 12: we are now less than ten days out from a
Speaker 12: potential government shut down, Where is progress or is there
Speaker 12: progress toward a deal to avert that? Will there be
Speaker 12: enough Democrats in your chamber to make sure the lights
Speaker 12: stay on?
Speaker 9: Well, I think what's going to happen here is the
Speaker 9: House is going to pass something early in the week,
Speaker 9: a continuing resolution. It sounds like to the end of
Speaker 9: the year. I think that if the Democrats here in
Speaker 9: the Senate do not join us as Republicans to pass
Speaker 9: something along that nature, they will be shutting down the government.
Speaker 9: And I think we know that's a road to nowhere aservance,
Speaker 9: a disservice to every American. We've kind of been down
Speaker 9: this road before, doesn't it doesn't achieve anything. So I'm
Speaker 9: hoping we can get consensus enough Democrats to work together
Speaker 9: so by the end of the week we're up and
Speaker 9: running if it's just for a couple.
Speaker 8: Of weeks, but I hope it's to the end of
Speaker 8: the year.
Speaker 9: We should have dealt with this last year, but Senator
Speaker 9: Schumer did not even pick up one of our appropriations
Speaker 9: bills that we passed last year.
Speaker 12: All Right, Senator, thank you so much for your time
Speaker 12: joining us live from Capitol Hill Republican Senator Shelley Moore,
Speaker 12: capital of West Virginia, as we deal with some breaking
Speaker 12: news on tariffs, the White House Press Secretary Caroline Lovett
Speaker 12: has confirmed that the President is going to put into
Speaker 12: place a one month pause on auto tarraff, specifically when
Speaker 12: it pertains to Canada and Mexico. She also says that
Speaker 12: President Trump is open to hearing about additional exemptions, maybe
Speaker 12: just adding layers of uncertainty to what is already pretty
Speaker 12: uncertain policy, and we want to get more on that
Speaker 12: now with Larry Summers, the former US Treasury Secretary and
Speaker 12: Harvard University president emeritus, who was here with us on
Speaker 12: Bloomberg TV and radio. Mister Secretary, it's great to have you,
Speaker 12: and thanks very much for your patients with us as
Speaker 12: we work through all of this news. Obviously, and You've
Speaker 12: spoken about this at length with our colleague David Weston.
Speaker 12: There is economic impact of tariffs to consider, but what
Speaker 12: about the potential economic toll when it comes to business
Speaker 12: investment and activity on the part of consumers. Of just
Speaker 12: a lack of certainty around what these policies actually look like.
Speaker 12: Is implementing them and pulling them back just as damaging
Speaker 12: potentially as leaving them intact.
Speaker 4: Look, it's all there. These tariffs are a self inflicted
Speaker 4: supply shock wound higher prices, less competitiveness because businesses are
Speaker 4: having to pay more for all their inputs, and because
Speaker 4: they have to pay higher prices, less purchasing power for consumers,
Speaker 4: which means fewer jobs.
Speaker 2: Down the road.
Speaker 4: So these are like in oil price shock, They're just
Speaker 4: all bad for the economy and they're probably like it,
Speaker 4: and they probably were like an oil price shock of
Speaker 4: forty dollars a barrel in terms of what was being
Speaker 4: done to Mexico and Canada. And now with these changes,
Speaker 4: maybe it's only twenty five or thirty dollars a barrel,
Speaker 4: but it's still clear big and bad. That's why before
Speaker 4: they started saying they were going to take the tariffs
Speaker 4: off almost two trillion dollars of stock market wealth had
Speaker 4: been destroyed in a matter of two days. Now nobody
Speaker 4: knows quite what's going to happen. But why would you
Speaker 4: make an important investment decision amidst all of this uncertainty
Speaker 4: if you were thinking about buying a new car or
Speaker 4: buying a new house. When you wait, and when everybody waits,
Speaker 4: the economy slows down. And that's why the risk of recession,
Speaker 4: which everybody thought was extremely unlikely on January twentieth, is
Speaker 4: now seen by many many people as a real and
Speaker 4: serious risk for some time this year. So I think
Speaker 4: we're doing real damage to the economy. It's not just
Speaker 4: a short run thing. Inflation expectations for the long term,
Speaker 4: for five or ten years, are higher than they've been
Speaker 4: in a very long time, according to the Michigan Survey.
Speaker 4: You know, I heard the President talk about a little disturbance,
Speaker 4: and I heard the Senator talk about that a little
Speaker 4: disturbance that will work through and then it will be good.
Speaker 4: You know what that sounds like. It sounds like transitory inflation.
Speaker 4: Transitory inflation didn't work out very well for the people
Speaker 4: who use that term in twenty twenty one and twenty
Speaker 4: twenty two. It didn't work out very well for the
Speaker 4: Biden administration, it didn't work out very well for the FED.
Speaker 4: And I don't think talking about how inflation is transittory
Speaker 4: is going to work out very well for the Trump
Speaker 4: administration either. So I hope they'll respond to the market
Speaker 4: signals and that they'll find a way to save face
Speaker 4: and they'll back off all of this stuff. That would
Speaker 4: be what would be best for the country. But I
Speaker 4: really do worry about the sense that we're becoming president
Speaker 4: calls this CEO, calls that CEO, that we're becoming a
Speaker 4: bit of a crony capitalism kind of country. When you
Speaker 4: see that the Doze seems to be talking about recontracting
Speaker 4: things towards the Starlink company. When you see that law
Speaker 4: firms that represented parties adverse to the president are having
Speaker 4: all their clients penalized across the administration. This is the
Speaker 4: Argentine way, not the American way, and I think there's
Speaker 4: a substantial risk that it will have costs. And what's
Speaker 4: really sad to me about all this is there's a
Speaker 4: lot of truth in things that the President's trying to do.
Speaker 4: There is waste in the way the federal government does technology,
Speaker 4: and it should be fixed by people with more expertise
Speaker 4: than long term government employees. There have been huge problems
Speaker 4: in the way we have protected our borders. We've emphasized
Speaker 4: too much things other than excellence in hiring workers for
Speaker 4: too long. We've had too much regulation that has slowed
Speaker 4: things down too much and made it expensive to build things.
Speaker 4: Sometimes other countries have taken advantage of the United States,
Speaker 4: and so there are impulses here that are right. But
Speaker 4: if you do things too impulsively, too quickly, too carelessly,
Speaker 4: and with too many conflicts of interest where the people
Speaker 4: who are advising you are also the people who are
Speaker 4: profiting from you, then I think you're taking big risks
Speaker 4: with our economic system.
Speaker 2: Well, so, mister Secretary, you just said a lot that
Speaker 2: we can unpack your when it comes to tariffs, we
Speaker 2: read you what will be the economic impact of the
Speaker 2: DOGE because that's bringing an enormous amount of confusion as
Speaker 2: well hesitancy to hire as the headline on the ADP
Speaker 2: Jobs report today, Elon Musk is on Capitol Hill meeting
Speaker 2: with members of the House and Senate right now, presumably
Speaker 2: to connect the dots between what the DOGE is finding
Speaker 2: in some form of legislation that will be leading its
Speaker 2: way to a budget. But the fog that's coming from
Speaker 2: DOGE with the wall of receipts, some of the claims
Speaker 2: that have not turned out to be true. The gutting
Speaker 2: of the IRS means what for our economy? I think
Speaker 2: it means.
Speaker 4: More chaos, higher prices, probably next to no progress on
Speaker 4: the government defficit. Look, the irash needs more workers, not fewer.
Speaker 4: In one recent three year period, there were one hundred
Speaker 4: people who had incomes over ten million dollars who didn't
Speaker 4: even get their returns audited in any way when they
Speaker 4: didn't file any return at all. So, yeah, we got
Speaker 4: to work on the IRS. But when we go cutting
Speaker 4: the air traffic safety systems, when we go slashing thousands
Speaker 4: of people whose job it is to enforce the tax
Speaker 4: law and to man the helplines, and we do it
Speaker 4: on an impulse and a few hours study by a
Speaker 4: person with no past experience in government. See, I think
Speaker 4: that's dangerous. And that's the American part of it. For
Speaker 4: the economy, that's probably what's most important to Americans. I
Speaker 4: have to say that when I read that the United
Speaker 4: States has for decades since President Bush. There was certainly
Speaker 4: no fiery liberal put in place program to build goodwill
Speaker 4: for the United States by providing medicines for AIDS and
Speaker 4: other diseases that has saved millions of lives, saved more
Speaker 4: than a million lives per year. When I see that
Speaker 4: medicine from that program has just been ruthlessly cut off
Speaker 4: despite congressional approval, with no protection or careful thought, and
Speaker 4: that people are dying because the United States just decided
Speaker 4: to go do a bunch of experiments like it was
Speaker 4: a business being restructured, that scares me. So I think
Speaker 4: this is going to be pretty serious for our economy.
Speaker 4: And look, President Trump is someone who has in the past,
Speaker 4: at least always when the stock market went up, he
Speaker 4: was always linking it to what he did. And we
Speaker 4: couldn't have had clearer evidence over the last couple of
Speaker 4: days that when he's pursuing the policies about which he's
Speaker 4: in enthusiastic, the market is plummeting, and when he's reversing course,
Speaker 4: the market is rallying. Yeah, and I hope that'll be
Speaker 4: a lesson on many aspects of the broad approach.
Speaker 12: Well, it also is creating an interesting split screen, mister Secretary,
Speaker 12: because as we have the conversation here about the rattling
Speaker 12: of US equity markets, everything you just talked about in
Speaker 12: terms of what potentially could be happening in the US economy,
Speaker 12: you are seeing a flood of capital into Europe, as
Speaker 12: Germany is now signaling they're going to have a whatever
Speaker 12: it takes approach to increase spending. We've seen a flood
Speaker 12: into European equities, obviously massive action in the boon market today.
Speaker 12: Is this the end potentially of US exceptionalism.
Speaker 4: I think it would be premature to say on the
Speaker 4: basis of anything that happened in a few days or
Speaker 4: even a few weeks, that it was the end US exceptionalism.
Speaker 4: But I will say this, I think the broad approach
Speaker 4: we are taking to the rest of the world represents
Speaker 4: the biggest threat to the US dollars role as the
Speaker 4: central currency in the world economy that we've had in
Speaker 4: the last five decades. And if I were still sitting
Speaker 4: at the Treasury Department, I would be terrified about the
Speaker 4: consequences of the kind of rhetoric that the President is
Speaker 4: engaging in vis a vis other countries. I would be
Speaker 4: alarmed by the way in which China and Europe were
Speaker 4: a trap, being magnets for capital as people rushed out
Speaker 4: of dollars, were increasingly a lot with each other because
Speaker 4: they had both been alienated from us. And knowing that
Speaker 4: I was going to have trillions and trillions of dollars
Speaker 4: that I had to place, and that I was part
Speaker 4: of an administration that was going to raise substantially the
Speaker 4: scale of the national debt with these new ideas like
Speaker 4: not taxing overtime or not taxing tips, and extending the
Speaker 4: tax cuts for businesses and businesses in the wealthy in
Speaker 4: a massive way, so that we were looking at budget
Speaker 4: deficits that could easily exceed two trillion dollars a year.
Speaker 2: I had to plant.
Speaker 4: I had to place all that debt. When the President
Speaker 4: was calling out and yelling and complaining about all the
Speaker 4: countries that were traditionally the biggest buyers of the debt,
Speaker 4: and the President was saying that anything was legal as
Speaker 4: long as it was working for the survival of the
Speaker 4: country and he wanted to do it, I'd be hugely
Speaker 4: alarmed about the role of the dollar in our system,
Speaker 4: and I'd be doing everything I could to try to
Speaker 4: persuade the president to change course. In fairness, I wouldn't
Speaker 4: be doing it publicly. I'd be doing it behind closed doors.
Speaker 4: But we have a Treasury Secretary whose principal comment on
Speaker 4: the President has been to suggest that he should win
Speaker 4: a Nobel prize for his appeasement to President Putin. So
Speaker 4: I think we have a really serious set of issues
Speaker 4: that may loom. There's time to change there's time to
Speaker 4: change course. There's time to limit eight these kinds of tariffs.
Speaker 4: There's time to try to draw on the expertise in
Speaker 4: the Doge in more responsible ways. And if that happens,
Speaker 4: I think things could work out well. But gosh, we're
Speaker 4: looking at some risks and uncertainties of a kind we
Speaker 4: haven't seen before. You know, Wall Street, as you know
Speaker 4: better than I because you report on it all the time.
Speaker 4: Has this thing the VICS so called fear gauge. It
Speaker 4: went up by almost fifty percent in a matter of
Speaker 4: a couple of days because of the things that were
Speaker 4: being said. So I just hope that we can all
Speaker 4: take a deep breath, that we can recognize that there
Speaker 4: are plenty of real problems that need to be addreshed,
Speaker 4: and that the President in his campaign identified some important
Speaker 4: directions in which our country and its economy could be
Speaker 4: made better. But God, the way we're going about it
Speaker 4: is something that seems very scary to me.
Speaker 2: That fix is down today but still holding above twenty two. Larry,
Speaker 2: it's really great to have you with us here on
Speaker 2: Balance of Power. We do appreciate the conversation the former
Speaker 2: US Treasury Secretary of Larry Summers, of course, Harvard University
Speaker 2: President emeritus, with his insights on tariffs, tax cuts, them
Speaker 2: a lot more today in a live conversation on Bloomberg
Speaker 2: TV and radio. Thanks for listening to the Balance of
Speaker 2: Power podcast. Make sure to subscribe if you haven't already,
Speaker 2: at Apple, Spotify, or wherever you get your podcasts, and
Speaker 2: you can find us live every weekday from Washington, DC
Speaker 2: at noontime Eastern at Bloomberg dot com.