1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,840 Speaker 1: us live on YouTube as right. 6 00:00:27,880 --> 00:00:34,400 Speaker 2: Prasad with this magisterial book, The Dooload of Cornell on Trade, Professor, 7 00:00:34,600 --> 00:00:36,760 Speaker 2: what is a single thing you would say to a 8 00:00:36,800 --> 00:00:42,320 Speaker 2: freshman class at Cornell this morning about this court decision? 9 00:00:44,479 --> 00:00:49,200 Speaker 3: It is a very important accession of the Court's authority 10 00:00:49,400 --> 00:00:51,920 Speaker 3: in terms of making sure that the separation of powers 11 00:00:51,960 --> 00:00:56,040 Speaker 3: between the executive branch, the legislative branch, and the judicial branch, 12 00:00:56,440 --> 00:00:58,240 Speaker 3: you know, stays in place. There has been a lot 13 00:00:58,320 --> 00:01:01,320 Speaker 3: of concent about the rule of law and what is 14 00:01:01,360 --> 00:01:03,040 Speaker 3: being done to that. But it's very good that the 15 00:01:03,080 --> 00:01:05,479 Speaker 3: Supreme Court really put its foot down and made it 16 00:01:05,520 --> 00:01:08,839 Speaker 3: clear that at least the state authority that President Trump 17 00:01:08,880 --> 00:01:12,400 Speaker 3: has been using to invoke tariffs against the broad range 18 00:01:12,400 --> 00:01:14,640 Speaker 3: of trading partners, that's not quite on. 19 00:01:15,520 --> 00:01:18,240 Speaker 2: You do this, You get on planes and you go 20 00:01:18,600 --> 00:01:23,280 Speaker 2: advise the French, the Germans, you advise Singapore. What is 21 00:01:23,319 --> 00:01:27,440 Speaker 2: your advice to the continent of Europe, is they respond 22 00:01:27,520 --> 00:01:31,440 Speaker 2: to this trade bombshell patience. 23 00:01:32,200 --> 00:01:34,280 Speaker 3: I think the key issue right now is how this 24 00:01:34,400 --> 00:01:37,039 Speaker 3: is going to play out. The Trump administration has made 25 00:01:37,040 --> 00:01:40,680 Speaker 3: it abundantly clear that it's going to use other tools 26 00:01:40,680 --> 00:01:43,759 Speaker 3: that it has in its arsenal in order to reimpose 27 00:01:43,840 --> 00:01:47,279 Speaker 3: tariffs at one level or the other. But the question 28 00:01:47,360 --> 00:01:50,240 Speaker 3: of how effectively they can do it, how broadly they 29 00:01:50,240 --> 00:01:52,320 Speaker 3: can do it, and how quickly they can do it, 30 00:01:52,720 --> 00:01:56,680 Speaker 3: I think it's really on the table right now. Many countries, 31 00:01:56,720 --> 00:02:03,120 Speaker 3: including economic areas the European Union, have in fact been 32 00:02:03,560 --> 00:02:06,400 Speaker 3: engaged in negotiations, have set up trade deals for the 33 00:02:06,480 --> 00:02:09,840 Speaker 3: US already, and some of them have gotten better deals 34 00:02:09,880 --> 00:02:13,519 Speaker 3: because of this core tooling. Some of them have gotten 35 00:02:13,560 --> 00:02:16,400 Speaker 3: worse deals. But I think the reality is that nobody 36 00:02:16,480 --> 00:02:18,919 Speaker 3: quite knows right now what the trade landscape is going 37 00:02:18,919 --> 00:02:21,640 Speaker 3: to look like, what sort of tariff measures are going 38 00:02:21,680 --> 00:02:24,240 Speaker 3: to be in place. So I think right now waiting 39 00:02:24,320 --> 00:02:28,000 Speaker 3: is probably the best thing to see how it does settles. 40 00:02:28,520 --> 00:02:32,280 Speaker 4: So as far as this, if I'm a you know, 41 00:02:32,360 --> 00:02:35,320 Speaker 4: some of the countries trading partners in the US, I mean, 42 00:02:35,400 --> 00:02:38,200 Speaker 4: if I've already struck deals, what do I do here 43 00:02:38,200 --> 00:02:40,320 Speaker 4: do I come back to the US and say, hey, 44 00:02:40,320 --> 00:02:41,639 Speaker 4: we need to renegotiate. 45 00:02:42,400 --> 00:02:44,600 Speaker 5: I'm not paying thirty percent here, I want the ten 46 00:02:44,720 --> 00:02:45,639 Speaker 5: or to fifteen percent. 47 00:02:45,880 --> 00:02:48,320 Speaker 6: What happens here, That's right. 48 00:02:48,400 --> 00:02:52,320 Speaker 3: Many of these countries have made economic concessions and it 49 00:02:52,400 --> 00:02:57,600 Speaker 3: has caused them some political capital within their own countries. 50 00:02:58,040 --> 00:03:00,680 Speaker 3: So I think countries do want to stick with the 51 00:03:00,720 --> 00:03:03,640 Speaker 3: trade deals if this core ruling leaves them in a 52 00:03:03,680 --> 00:03:07,000 Speaker 3: better position. But there are many countries who struck trade deals, 53 00:03:07,040 --> 00:03:09,480 Speaker 3: made these concessions, and now find themselves in a worse 54 00:03:09,560 --> 00:03:14,200 Speaker 3: position because Trump has imposed these tariffs across the board 55 00:03:14,280 --> 00:03:18,600 Speaker 3: using Section one two two, and that is certainly going 56 00:03:18,680 --> 00:03:22,239 Speaker 3: to mean that renegotiation is needed. But the reality is 57 00:03:22,280 --> 00:03:25,399 Speaker 3: that the US administration has limited capacity to deal with 58 00:03:25,440 --> 00:03:28,680 Speaker 3: all of this at the same time. But certainly if 59 00:03:28,720 --> 00:03:31,120 Speaker 3: a country has struck a trade deal and now is 60 00:03:31,160 --> 00:03:34,160 Speaker 3: in a worse position, then before the deal they need 61 00:03:34,200 --> 00:03:37,280 Speaker 3: to make a pitch for renegotiation or at least for 62 00:03:37,320 --> 00:03:40,480 Speaker 3: the Trump administration, you know, to adhere to the terms 63 00:03:40,480 --> 00:03:43,280 Speaker 3: of the deal and give them exemptions from this broad 64 00:03:43,360 --> 00:03:47,400 Speaker 3: fifteen percent tariff that Trump has now applied across the 65 00:03:47,440 --> 00:03:51,080 Speaker 3: board for countries set there in the midst of negotiations. 66 00:03:51,240 --> 00:03:54,480 Speaker 3: Certainly it gives them a stronger bargaining hand because the 67 00:03:54,520 --> 00:03:59,360 Speaker 3: Trump administration clearly cannot apply tariff's villy nilly across the board. 68 00:03:59,400 --> 00:04:01,720 Speaker 3: So I think those those negotiations are probably going to 69 00:04:01,720 --> 00:04:02,760 Speaker 3: take a bit of a pause. 70 00:04:03,560 --> 00:04:03,800 Speaker 7: S far. 71 00:04:03,920 --> 00:04:06,440 Speaker 5: One could argue that, if nothing else, this Supreme Court 72 00:04:06,520 --> 00:04:11,400 Speaker 5: ruling just reintroduces, I guess, a level of uncertainty into 73 00:04:11,520 --> 00:04:15,560 Speaker 5: trade global trade like we had back almost in April 74 00:04:15,600 --> 00:04:19,600 Speaker 5: of last year. How do you think global trading partners 75 00:04:20,160 --> 00:04:23,719 Speaker 5: will proceed over the coming months given the Supreme Court ruling. 76 00:04:25,200 --> 00:04:27,680 Speaker 3: The level of uncertainty, as you've pointed out, Paul, is 77 00:04:27,839 --> 00:04:32,520 Speaker 3: just enormously elevated right now, because, yes, Trump's actions with 78 00:04:32,640 --> 00:04:36,719 Speaker 3: tariffs are quite you know, peremptory mercurial, and you never 79 00:04:36,839 --> 00:04:38,640 Speaker 3: quite knew what was going to happen in terms of 80 00:04:38,680 --> 00:04:40,880 Speaker 3: the levels of tariffs, who would be subjected to them. 81 00:04:41,240 --> 00:04:43,799 Speaker 3: But there was a sense that at least some certainty 82 00:04:43,960 --> 00:04:48,000 Speaker 3: was returning to the process with some tariffs being taken off, 83 00:04:48,040 --> 00:04:50,520 Speaker 3: some trade deals being struck. All of that is off 84 00:04:50,560 --> 00:04:53,920 Speaker 3: the table right now. The more interesting question is how 85 00:04:54,040 --> 00:04:57,280 Speaker 3: businesses are going to respond because to them now the 86 00:04:57,360 --> 00:05:01,599 Speaker 3: landscape hascome completely uncertain, and the presumption is probably that 87 00:05:01,640 --> 00:05:04,440 Speaker 3: they're going to retreat from trade and try to protect 88 00:05:04,480 --> 00:05:06,160 Speaker 3: themselves from further on seventday. 89 00:05:06,160 --> 00:05:08,040 Speaker 2: At the moment, that's right, I want to go as 90 00:05:08,080 --> 00:05:10,240 Speaker 2: we're to finish up here, and folks, I can't say enough. 91 00:05:10,320 --> 00:05:10,920 Speaker 6: I'm gonna say it. 92 00:05:11,000 --> 00:05:15,159 Speaker 2: With Zwaran the Doom Loop, I'm like he's got Circe 93 00:05:15,320 --> 00:05:18,320 Speaker 2: from the Game of Thrones in chapter one. I mean, 94 00:05:18,360 --> 00:05:20,599 Speaker 2: I had no idea as far as Circe from the 95 00:05:20,600 --> 00:05:24,240 Speaker 2: Game of Thrones was doing economics. She was. She was 96 00:05:24,279 --> 00:05:28,839 Speaker 2: at Cornell. She was so so difficult at Cornell. She 97 00:05:28,880 --> 00:05:33,279 Speaker 2: melted snowduts, just like in show. I look at the 98 00:05:33,320 --> 00:05:37,240 Speaker 2: Doom Loop here and for me it's Apple lawyer up. 99 00:05:37,680 --> 00:05:40,400 Speaker 2: They had eight hundred million and one point one billion, 100 00:05:40,440 --> 00:05:44,159 Speaker 2: maybe one point four billion, some model of three point. 101 00:05:44,160 --> 00:05:46,200 Speaker 6: Two billion in tariffs. 102 00:05:46,520 --> 00:05:50,320 Speaker 2: His tim Cook can assue the United States of America 103 00:05:50,520 --> 00:05:51,640 Speaker 2: to get that money back. 104 00:05:54,000 --> 00:05:56,520 Speaker 3: That's going to be a long and very complicated role 105 00:05:56,640 --> 00:06:00,760 Speaker 3: because certainly I'm traveling all the refunds, all the tariffs 106 00:06:00,760 --> 00:06:03,359 Speaker 3: that have already been paid, and sending out refunds is 107 00:06:03,360 --> 00:06:07,520 Speaker 3: going to be a massively difficult administrative process, although some 108 00:06:07,680 --> 00:06:11,039 Speaker 3: argue that, you know, it's quite easy to just turn 109 00:06:11,080 --> 00:06:14,760 Speaker 3: the money back, given that the US administration has a 110 00:06:14,839 --> 00:06:19,400 Speaker 3: very clear indication of who paid tariffs and when. But 111 00:06:19,560 --> 00:06:22,080 Speaker 3: I think there is going to be again some holding 112 00:06:22,120 --> 00:06:25,040 Speaker 3: off on this because the numbers involved are really large 113 00:06:25,040 --> 00:06:27,279 Speaker 3: at the moment, and it's sort of entirely clear this 114 00:06:27,360 --> 00:06:30,760 Speaker 3: administration is that capacity to turn things around or wants to, 115 00:06:31,400 --> 00:06:35,360 Speaker 3: because again with new tariffs coming into place, and some 116 00:06:35,440 --> 00:06:40,560 Speaker 3: of these decisions now likely to rest on what tools 117 00:06:40,560 --> 00:06:44,280 Speaker 3: the administration decides to use. I think all the uncertainty 118 00:06:44,279 --> 00:06:46,920 Speaker 3: with the tariff landscape means that corporations are not going 119 00:06:46,960 --> 00:06:49,720 Speaker 3: to be jumping up and down to get the tariffs back, 120 00:06:49,800 --> 00:06:52,800 Speaker 3: especially the large ones. For the smaller ones that live 121 00:06:52,960 --> 00:06:55,239 Speaker 3: day to day, it's a much more important issue because 122 00:06:55,240 --> 00:06:56,200 Speaker 3: they need that money. 123 00:06:56,600 --> 00:06:56,840 Speaker 7: Yeah. 124 00:06:57,880 --> 00:07:02,039 Speaker 2: I don't disagree with that anyway. Shape for an asurpisade. 125 00:07:02,120 --> 00:07:05,880 Speaker 2: Thank you so much for joining us, Stay with us. 126 00:07:06,120 --> 00:07:09,360 Speaker 2: More from Bloomberg Surveillance coming up after this. 127 00:07:16,600 --> 00:07:20,200 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live 128 00:07:20,240 --> 00:07:23,400 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 129 00:07:23,480 --> 00:07:26,920 Speaker 1: Apple Karplay and Android auto with the Bloomberg Business app, 130 00:07:27,080 --> 00:07:29,120 Speaker 1: or watch us live on YouTube to. 131 00:07:29,160 --> 00:07:32,720 Speaker 2: Short a visit right now with Torston Slock with Apollo 132 00:07:32,760 --> 00:07:36,760 Speaker 2: Global Management. He has spent the weekend and has wonderful 133 00:07:37,120 --> 00:07:41,400 Speaker 2: continental europe experience. Torston, how do you think the continent 134 00:07:41,520 --> 00:07:46,120 Speaker 2: will respond to tear us? The zeitgeist over the weekend 135 00:07:46,760 --> 00:07:50,480 Speaker 2: is Britain hammered, China, Brazil, etc. 136 00:07:50,880 --> 00:07:53,760 Speaker 6: I mean, how does the EU adjust? 137 00:07:54,760 --> 00:07:57,160 Speaker 8: Well, the European Commission put out a statement yesterday where 138 00:07:57,160 --> 00:07:59,760 Speaker 8: they clearly said that they were going to honor the 139 00:07:59,800 --> 00:08:01,560 Speaker 8: train deal, but at the same time way were of 140 00:08:01,560 --> 00:08:05,840 Speaker 8: course asking questions about well, what are the exact conditions 141 00:08:05,880 --> 00:08:08,600 Speaker 8: for what we're doing going forward. So the Europeans have 142 00:08:08,680 --> 00:08:11,400 Speaker 8: already stated that they are going to honor the trade deal. 143 00:08:11,400 --> 00:08:13,400 Speaker 8: They expect the US to honor the trade deal. But 144 00:08:13,440 --> 00:08:15,840 Speaker 8: it's very clear that this is indeed injecting a whole 145 00:08:15,880 --> 00:08:18,200 Speaker 8: new level of uncertainty. Also on the Europeans Pod. 146 00:08:18,400 --> 00:08:20,840 Speaker 6: With your work at Apollo Global Management. 147 00:08:21,400 --> 00:08:25,200 Speaker 2: Is there a sum market reaction to what this does 148 00:08:25,360 --> 00:08:26,240 Speaker 2: to confidence? 149 00:08:26,520 --> 00:08:27,920 Speaker 6: Say out of the fourth of July. 150 00:08:29,320 --> 00:08:31,240 Speaker 8: Well, the channels now is of course that Section one 151 00:08:31,240 --> 00:08:33,679 Speaker 8: two two tariffs, the fifteen percent. They only count for 152 00:08:33,679 --> 00:08:36,320 Speaker 8: one hundred and fifty days, and then it remains to 153 00:08:36,360 --> 00:08:38,520 Speaker 8: be seen whether they will be continued by Congress. So 154 00:08:38,640 --> 00:08:40,719 Speaker 8: in that sense, that's a whole new level of uncertainty. 155 00:08:41,040 --> 00:08:43,280 Speaker 8: The other level of uncertainty also is that the fifteen 156 00:08:43,280 --> 00:08:46,320 Speaker 8: percent is on the whole world and not on individual countries. 157 00:08:46,640 --> 00:08:48,760 Speaker 8: So this is also raising questions about that it's no 158 00:08:48,800 --> 00:08:50,680 Speaker 8: longer as targeted as it was before. 159 00:08:51,040 --> 00:08:53,079 Speaker 9: It cannot even be targeted just to Europe or to. 160 00:08:53,120 --> 00:08:56,880 Speaker 8: Say Korea or Japan. It is on literally every trade 161 00:08:56,920 --> 00:08:59,640 Speaker 8: partner that the US has. So those two dimensions, both 162 00:08:59,679 --> 00:09:02,839 Speaker 8: of the time length and also that on everyone, is 163 00:09:02,880 --> 00:09:06,840 Speaker 8: indeed injecting uncertainty. I mean, well, of course many people 164 00:09:06,920 --> 00:09:08,720 Speaker 8: might even have looked at this and say, well, Friday 165 00:09:08,720 --> 00:09:11,079 Speaker 8: it was ten percent, now it's fifteen percent, And that's 166 00:09:11,120 --> 00:09:13,679 Speaker 8: of course we're raising questions on their thoughts also about 167 00:09:13,720 --> 00:09:16,040 Speaker 8: what is exactly the level of terrorists in particularly when 168 00:09:16,040 --> 00:09:17,680 Speaker 8: we get two hundred and fifty days down the road. 169 00:09:17,760 --> 00:09:22,160 Speaker 2: In Claudia Sampaul was blistering and saying that even these 170 00:09:22,240 --> 00:09:24,760 Speaker 2: new tariffs could be legally. 171 00:09:24,440 --> 00:09:27,960 Speaker 5: Challenged exactly so in TOURSA, what are our how do 172 00:09:28,000 --> 00:09:31,520 Speaker 5: you think our trading partners will react here. It's just 173 00:09:31,720 --> 00:09:36,800 Speaker 5: yet another kind of unknown thrown into the discussions of 174 00:09:36,880 --> 00:09:39,640 Speaker 5: trade policy. How do you think they're going to react here? 175 00:09:41,000 --> 00:09:43,280 Speaker 8: Well, I think that again the Europeans response, and I 176 00:09:43,280 --> 00:09:45,280 Speaker 8: think also the fact that the Indian mission to the 177 00:09:45,400 --> 00:09:48,560 Speaker 8: US to trade to do trade negotiations was canceled is 178 00:09:48,559 --> 00:09:50,480 Speaker 8: telling you also that they are beginning to be at 179 00:09:50,559 --> 00:09:53,199 Speaker 8: least some legal issues around both of course the existing 180 00:09:53,200 --> 00:09:57,360 Speaker 8: trade deals, but also what might be the framework going forward. 181 00:09:58,400 --> 00:10:01,280 Speaker 8: They are likely thinking about, well, if we signed a 182 00:10:01,280 --> 00:10:04,200 Speaker 8: document today, is this going to change soon? 183 00:10:04,240 --> 00:10:04,560 Speaker 6: Again? 184 00:10:04,640 --> 00:10:06,880 Speaker 8: Are they going to be any legal issues? Ascodia Sam 185 00:10:06,960 --> 00:10:09,720 Speaker 8: was saying that there one two two is actually under 186 00:10:09,760 --> 00:10:11,680 Speaker 8: the conditions that there has to be a balance of 187 00:10:11,760 --> 00:10:15,840 Speaker 8: payment crisis, which is very different from a trade crisis 188 00:10:15,920 --> 00:10:16,640 Speaker 8: or a trade. 189 00:10:16,360 --> 00:10:18,080 Speaker 6: Deficit and a balance of payment deficit. 190 00:10:18,440 --> 00:10:21,240 Speaker 8: So from that perspective, there's also legal challenges likely going 191 00:10:21,240 --> 00:10:23,800 Speaker 8: to come on this section one two two the tariffs. 192 00:10:24,000 --> 00:10:25,800 Speaker 8: So that's why there's just a lot of things. The 193 00:10:25,920 --> 00:10:28,000 Speaker 8: dust has really been whirled up. We really opened up 194 00:10:28,000 --> 00:10:31,280 Speaker 8: the macroeconomic text boogainst national finance, because there's just a 195 00:10:31,280 --> 00:10:33,000 Speaker 8: lot of things that now people need to think very 196 00:10:33,040 --> 00:10:35,080 Speaker 8: hard about it, and I think that's what the rest 197 00:10:35,080 --> 00:10:37,040 Speaker 8: of the world is trying to do at this moment. 198 00:10:37,520 --> 00:10:37,960 Speaker 6: Torsen. 199 00:10:38,360 --> 00:10:43,200 Speaker 5: Despite all the global trade uncertainty over the past fourteen 200 00:10:43,240 --> 00:10:46,880 Speaker 5: fifteen months, the US economy performing well. How do you 201 00:10:46,920 --> 00:10:47,960 Speaker 5: put that into context? 202 00:10:48,880 --> 00:10:51,240 Speaker 8: Well, because in the background, while we've had the trade 203 00:10:51,240 --> 00:10:53,320 Speaker 8: ball especially of course this diberation day, we've had a 204 00:10:53,440 --> 00:10:56,640 Speaker 8: very strong boom in AI spending, and we've also had 205 00:10:56,640 --> 00:11:00,000 Speaker 8: an industrial renaissance. The dustrial renaissance really was already started 206 00:11:00,360 --> 00:11:02,280 Speaker 8: on the Biden with the Chips Act saying that semi 207 00:11:02,320 --> 00:11:05,680 Speaker 8: conductors need to reproduce domestically. Of course, Trump has also 208 00:11:05,720 --> 00:11:09,040 Speaker 8: focused on pharmaceuticals, need to produce domestically. That's also non 209 00:11:09,320 --> 00:11:12,200 Speaker 8: focused on defense. Of course, need to also grow and 210 00:11:12,240 --> 00:11:14,600 Speaker 8: this is us for a renaissance. This is indeed also 211 00:11:14,640 --> 00:11:17,000 Speaker 8: something that's a tail into growth. And finally, let's not 212 00:11:17,040 --> 00:11:18,800 Speaker 8: forget on January the first, we also got the one 213 00:11:18,840 --> 00:11:20,880 Speaker 8: big beautiful bill, The one big bulti of Al bill 214 00:11:21,080 --> 00:11:24,160 Speaker 8: was changes to tax laws that were done retroactively, so 215 00:11:24,200 --> 00:11:27,120 Speaker 8: it actually took effect of first of January twenty twenty five. 216 00:11:27,520 --> 00:11:29,760 Speaker 8: That means that when households get a tax refund here 217 00:11:29,800 --> 00:11:32,880 Speaker 8: in April and March. Well, that tax refund, which normally 218 00:11:32,920 --> 00:11:34,960 Speaker 8: is around three thousand dollars, that will not go up 219 00:11:34,960 --> 00:11:37,240 Speaker 8: too roughly around four thousand dollars. So we have a 220 00:11:37,240 --> 00:11:40,680 Speaker 8: fairly significant boost coming to consumer spending here in March, April, 221 00:11:40,679 --> 00:11:42,480 Speaker 8: and May. And on top of that, we also have 222 00:11:42,600 --> 00:11:46,160 Speaker 8: immediate expensing where companies can write down their capex expenditures 223 00:11:46,240 --> 00:11:48,840 Speaker 8: right away, which is also a boost to capic spending. 224 00:11:48,920 --> 00:11:50,839 Speaker 6: So the short answer to your question is, yes, the. 225 00:11:50,760 --> 00:11:52,880 Speaker 8: Trade bill has certainly been a hit wind, but while 226 00:11:52,880 --> 00:11:54,760 Speaker 8: that heatment has been playing out, we've had a number 227 00:11:54,760 --> 00:11:56,640 Speaker 8: of tailwinds that, of course have been the reason why 228 00:11:56,640 --> 00:11:58,240 Speaker 8: the economy has continued to do so well. 229 00:11:58,360 --> 00:12:01,319 Speaker 6: Have you got a rationalization, tourist cinem a one point 230 00:12:01,360 --> 00:12:05,800 Speaker 6: four percent GDP was due to shutdown. Did you bring 231 00:12:05,880 --> 00:12:08,840 Speaker 6: down a real, real GDP view forward for the rest 232 00:12:08,880 --> 00:12:09,440 Speaker 6: of this year. 233 00:12:10,679 --> 00:12:14,240 Speaker 8: No, because also exactly as you're saying, Tom, this PA 234 00:12:14,400 --> 00:12:17,480 Speaker 8: clearly said that the one point four number, if we 235 00:12:17,640 --> 00:12:19,920 Speaker 8: take what the shutdown accounted for, there was roughly one 236 00:12:19,920 --> 00:12:22,199 Speaker 8: percent is point, So that brings you to two point 237 00:12:22,280 --> 00:12:24,600 Speaker 8: four which is higher than the Congressional Budget Office estimate 238 00:12:24,640 --> 00:12:26,319 Speaker 8: of two percent, which is the long run growth rate 239 00:12:26,320 --> 00:12:28,920 Speaker 8: for the US. So in that sense, the US economy 240 00:12:28,960 --> 00:12:31,480 Speaker 8: outside of the shutdown, of course, was actually still doing 241 00:12:31,520 --> 00:12:33,920 Speaker 8: reasonly well, and they slowly out of the label market. 242 00:12:33,920 --> 00:12:36,040 Speaker 8: As you also have discussed so much, it really is 243 00:12:36,160 --> 00:12:38,960 Speaker 8: mainly drawn by labor supply that has been falling and 244 00:12:39,040 --> 00:12:41,600 Speaker 8: much so much labor demand. So that's why you can 245 00:12:41,640 --> 00:12:44,320 Speaker 8: still have strong GDP and slower job growth. But slow 246 00:12:44,400 --> 00:12:47,000 Speaker 8: job growth is not because of weaker labor demand, but 247 00:12:47,040 --> 00:12:49,760 Speaker 8: it's really because the weaker labor supply. So taken together, 248 00:12:50,000 --> 00:12:52,240 Speaker 8: the US economy actually continued to do well. That doesn't 249 00:12:52,280 --> 00:12:54,040 Speaker 8: mean that there are still risks that we could hit 250 00:12:54,280 --> 00:12:56,880 Speaker 8: the rough and not go down straight the fairway. We 251 00:12:56,920 --> 00:12:58,720 Speaker 8: actually think the risk of hitting the rough and not 252 00:12:58,800 --> 00:13:01,160 Speaker 8: going straight to the whole here it has increased from 253 00:13:01,160 --> 00:13:03,360 Speaker 8: ten percent to thirty percent. So we are watching the 254 00:13:03,400 --> 00:13:05,520 Speaker 8: tail ridge to the opto very carefully, not only of 255 00:13:05,559 --> 00:13:07,800 Speaker 8: course because of AI and what's going on with the 256 00:13:07,840 --> 00:13:10,640 Speaker 8: trade ball, but also because of issues. Just as comment debt, 257 00:13:10,920 --> 00:13:13,280 Speaker 8: interest rates could potentially see a quick move up and 258 00:13:13,320 --> 00:13:15,880 Speaker 8: down because of the inflation surprise at imposting and all 259 00:13:15,960 --> 00:13:17,760 Speaker 8: SAX saying inflation is going to go high. So that's 260 00:13:17,760 --> 00:13:19,839 Speaker 8: a number of other things that could throw us off. 261 00:13:19,880 --> 00:13:22,240 Speaker 8: But the bottom line is the economy continues to do well. 262 00:13:22,320 --> 00:13:24,679 Speaker 2: Or is there can post and looking at wage inflation, 263 00:13:24,760 --> 00:13:27,079 Speaker 2: that maybe the surprise of the year. Turst and Sluck, 264 00:13:27,480 --> 00:13:28,920 Speaker 2: thank you so much with a puddle. 265 00:13:30,679 --> 00:13:31,400 Speaker 6: Stay with us. 266 00:13:31,640 --> 00:13:34,839 Speaker 2: More from Bloomberg Surveillance coming up after this. 267 00:13:42,120 --> 00:13:45,680 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live 268 00:13:45,760 --> 00:13:48,920 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 269 00:13:49,000 --> 00:13:52,640 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 270 00:13:52,800 --> 00:13:54,400 Speaker 1: watch us Live on YouTube. 271 00:13:54,480 --> 00:13:54,920 Speaker 7: It's one of. 272 00:13:54,960 --> 00:13:59,880 Speaker 2: The most twisted parchments and economics out of Brown Universe, 273 00:14:00,679 --> 00:14:03,720 Speaker 2: with all of the fabulous heritage there of William Poole 274 00:14:03,800 --> 00:14:07,240 Speaker 2: and other giants as well. They're not to the crazy 275 00:14:07,320 --> 00:14:11,280 Speaker 2: Mathewess Paul of San Diego, which is like the most mathematical. 276 00:14:11,640 --> 00:14:15,920 Speaker 2: I mean, they're doing standard deviations in the hallways and 277 00:14:16,040 --> 00:14:19,360 Speaker 2: it's nuts. Martha Gimblet survived at all. It has provided 278 00:14:19,360 --> 00:14:22,640 Speaker 2: a leadership at the budget lab at Yale, and as 279 00:14:22,640 --> 00:14:27,680 Speaker 2: we go from stumbling crisis to stumbling crisis, everybody is 280 00:14:27,760 --> 00:14:31,480 Speaker 2: tuning in with more and more intensity to the academic work. 281 00:14:32,080 --> 00:14:35,080 Speaker 2: This weekend they published a tour de force. I put 282 00:14:35,160 --> 00:14:38,480 Speaker 2: one chart, figure five out. I'm going to translate it 283 00:14:38,560 --> 00:14:42,160 Speaker 2: now with political viciousness for Martha Gimble. 284 00:14:42,680 --> 00:14:45,720 Speaker 6: Martha, your distribution. 285 00:14:45,120 --> 00:14:49,520 Speaker 2: Of tariff effect and then adjusted for the fact will substitute. 286 00:14:50,080 --> 00:14:53,720 Speaker 2: And you take it after tex when you take the 287 00:14:53,840 --> 00:14:58,840 Speaker 2: tariff analysis of the budget, lab after tax, after some 288 00:14:59,080 --> 00:15:03,680 Speaker 2: form of rental housing measurement, after some form of basic 289 00:15:03,840 --> 00:15:07,880 Speaker 2: food measurement, how is the bottom half going to survive 290 00:15:08,520 --> 00:15:09,320 Speaker 2: these tariffs? 291 00:15:11,080 --> 00:15:14,840 Speaker 9: You know, it's not going to be great for anyone, 292 00:15:14,960 --> 00:15:19,000 Speaker 9: but tariffs are also regressive. It's much much worse for 293 00:15:19,120 --> 00:15:22,120 Speaker 9: people at the bottom. And I think it's also important 294 00:15:22,160 --> 00:15:25,480 Speaker 9: to keep in mind that this combines with the One 295 00:15:25,480 --> 00:15:28,520 Speaker 9: Big Beautiful Bill Act from last year, which yes, you 296 00:15:28,560 --> 00:15:31,480 Speaker 9: know does send money out into the economy, but is 297 00:15:31,640 --> 00:15:37,280 Speaker 9: also regressive. And if you combine the effects of teriffs 298 00:15:38,000 --> 00:15:40,840 Speaker 9: and the One Big Beautiful Bill Act, it's only really 299 00:15:40,920 --> 00:15:43,760 Speaker 9: people at the top who are better off on net. 300 00:15:44,440 --> 00:15:46,720 Speaker 9: And so if you're thinking about what's going to happen 301 00:15:46,760 --> 00:15:51,120 Speaker 9: with consumer spending in the future, we're going to be 302 00:15:51,120 --> 00:15:54,120 Speaker 9: facing consumers towards the middle and bottom who are a 303 00:15:54,200 --> 00:15:57,200 Speaker 9: lot more constrained because prices are going up for them 304 00:15:57,200 --> 00:15:59,000 Speaker 9: at the same time that they have less spending power. 305 00:16:00,080 --> 00:16:05,200 Speaker 5: So, Martha, what did the Supreme Court ruling mean for 306 00:16:06,000 --> 00:16:09,160 Speaker 5: the overall tariff rate? Is it HighRes it lowers the same? 307 00:16:09,520 --> 00:16:10,000 Speaker 7: I don't know. 308 00:16:11,240 --> 00:16:16,200 Speaker 9: Well, yes, that is an excellent question. That's partly because 309 00:16:16,240 --> 00:16:18,560 Speaker 9: the tariff rate has been a lot of different things 310 00:16:18,800 --> 00:16:23,360 Speaker 9: over the weekend. So we started at sixteen percent going 311 00:16:23,440 --> 00:16:27,000 Speaker 9: into this Scotus ruling. Then scot Has ruled, it went 312 00:16:27,040 --> 00:16:32,440 Speaker 9: down to nine. Then President Trump announced tariffs, but they 313 00:16:32,440 --> 00:16:34,760 Speaker 9: didn't announce the exemption, so it looked like it went 314 00:16:34,800 --> 00:16:37,720 Speaker 9: up to fifteen percent, and then they announced the exemptions, 315 00:16:37,760 --> 00:16:40,240 Speaker 9: went down to twelve, and then he announced that we 316 00:16:40,240 --> 00:16:43,080 Speaker 9: were going to fifteen and went back up to fourteen percent. 317 00:16:43,200 --> 00:16:46,680 Speaker 9: So we've had like five different tariff rates in the 318 00:16:46,720 --> 00:16:49,720 Speaker 9: space of thirty six hours. I should also note when 319 00:16:49,760 --> 00:16:53,160 Speaker 9: I say, you know, twelve fourteen, he's using an authority 320 00:16:53,160 --> 00:16:55,440 Speaker 9: that expires in one hundred and fifty days. Now they've 321 00:16:55,480 --> 00:16:58,720 Speaker 9: said that they're going to put other tariffs in place 322 00:16:59,680 --> 00:17:02,720 Speaker 9: that will, you know, in some way was replicate these 323 00:17:02,760 --> 00:17:06,880 Speaker 9: tariffs That might be true at the overall effective tariff rate, 324 00:17:06,920 --> 00:17:10,600 Speaker 9: that headline number. But if you're a business, you need 325 00:17:10,640 --> 00:17:13,360 Speaker 9: to know, wait, exactly what products are going to be tariffed, 326 00:17:13,600 --> 00:17:18,120 Speaker 9: exactly what countries are going to be affected, And they 327 00:17:18,160 --> 00:17:21,320 Speaker 9: haven't provided clarity on that, and so what we're in 328 00:17:21,400 --> 00:17:24,560 Speaker 9: is this big sea of uncertainty that we're all going 329 00:17:24,600 --> 00:17:25,919 Speaker 9: to be sitting in for quite some time. 330 00:17:26,560 --> 00:17:30,040 Speaker 5: So, boy, it's so hard for just to keep track 331 00:17:30,080 --> 00:17:33,120 Speaker 5: of what the tariff rates are. Do we have any 332 00:17:33,160 --> 00:17:37,440 Speaker 5: confidence that they're being collected accurately? Because I can't imagine 333 00:17:37,480 --> 00:17:42,120 Speaker 5: some person, it's some loading doc, you know, figuring all 334 00:17:42,119 --> 00:17:43,040 Speaker 5: this stuff out here. 335 00:17:44,960 --> 00:17:47,880 Speaker 9: I will say, at one point in twenty twenty five, 336 00:17:47,960 --> 00:17:50,280 Speaker 9: a reporter called me and said, do you know what 337 00:17:50,320 --> 00:17:53,000 Speaker 9: the tariff rate is on this very specific product? And 338 00:17:53,040 --> 00:17:55,320 Speaker 9: I said, I have no idea. That's a question for 339 00:17:55,480 --> 00:17:57,919 Speaker 9: CBP And he said they were my first call. They 340 00:17:57,920 --> 00:18:03,000 Speaker 9: said they couldn't tell me. It's very confusing, and you're 341 00:18:03,000 --> 00:18:05,000 Speaker 9: trying to keep track of all these different things and 342 00:18:05,000 --> 00:18:09,000 Speaker 9: when things land when they landed. This is it's really 343 00:18:09,119 --> 00:18:12,119 Speaker 9: hard to do business under these circumstances. 344 00:18:12,160 --> 00:18:13,679 Speaker 6: Give us a window, Martha, into this. 345 00:18:13,800 --> 00:18:17,200 Speaker 2: How many experts at the Budget Lab of Yale were 346 00:18:17,240 --> 00:18:20,680 Speaker 2: working on this magic Friday and into the weekend. How 347 00:18:20,680 --> 00:18:22,760 Speaker 2: many people were making the soup? 348 00:18:23,640 --> 00:18:28,080 Speaker 9: Yeah, we had four. So I will call in here 349 00:18:28,880 --> 00:18:31,960 Speaker 9: John Rico, John Isln, Josh Kendall, and Mattie Lee. So 350 00:18:32,080 --> 00:18:33,960 Speaker 9: everyone please take your local So. 351 00:18:33,960 --> 00:18:38,359 Speaker 2: Like Uslin's got substantial like Berkeley, Maryland chops, he's worked 352 00:18:38,359 --> 00:18:41,200 Speaker 2: at CBO. And that did the adults in the room, 353 00:18:41,280 --> 00:18:44,399 Speaker 2: these young turks who are brilliant, do they see the 354 00:18:44,480 --> 00:18:49,600 Speaker 2: same legal sequence ballet again of a court, an appeals court, 355 00:18:49,640 --> 00:18:52,399 Speaker 2: a Supreme court, or for all our listeners and viewers, 356 00:18:52,440 --> 00:18:55,200 Speaker 2: Martha Gimble, can we get this done faster? 357 00:18:56,920 --> 00:18:57,280 Speaker 6: I don't know. 358 00:18:57,320 --> 00:18:59,680 Speaker 9: I mean, so the section one twenty two, which is 359 00:18:59,720 --> 00:19:02,520 Speaker 9: the already that they're using right now, you've already seen 360 00:19:02,560 --> 00:19:06,840 Speaker 9: people over the weekend debating whether or not it applies 361 00:19:06,880 --> 00:19:11,280 Speaker 9: to this particular situation. And you know, once again, are 362 00:19:11,320 --> 00:19:15,000 Speaker 9: these tariffs legal? So I assume that there's going to 363 00:19:15,000 --> 00:19:18,119 Speaker 9: be litigation and we're just going to go through the 364 00:19:18,160 --> 00:19:19,399 Speaker 9: whole thing all over again. 365 00:19:20,000 --> 00:19:23,400 Speaker 2: Martha Gimblale with us a budget levity, and we continue here. 366 00:19:23,520 --> 00:19:27,439 Speaker 2: Douglas Irwin of Dartmouth College definitive his book Against the 367 00:19:27,480 --> 00:19:32,800 Speaker 2: Tides Change the landscape of tariff analysis thirty forty years 368 00:19:32,800 --> 00:19:34,560 Speaker 2: ago with US tomorrow as well. 369 00:19:34,600 --> 00:19:36,560 Speaker 6: Paul Sweeney with Martha Kimball. 370 00:19:36,960 --> 00:19:40,440 Speaker 5: Martha, you know, how about some of these training quote 371 00:19:40,520 --> 00:19:45,520 Speaker 5: unquote partners that have signed I guess, big reciprocal deals 372 00:19:45,520 --> 00:19:48,600 Speaker 5: that are at rates perhaps higher than the ten or 373 00:19:48,640 --> 00:19:50,880 Speaker 5: fifteen percent wherever we are. Now, what do they do? 374 00:19:50,880 --> 00:19:52,960 Speaker 5: Did they come back to the negotiating table and say, hey, 375 00:19:52,960 --> 00:19:55,520 Speaker 5: we want the better rate? What do they do? 376 00:19:56,640 --> 00:19:59,280 Speaker 9: Yeah, that's a really great question. There was just reporting 377 00:19:59,320 --> 00:20:01,919 Speaker 9: out this morning saying that Europe is putting their you know, 378 00:20:02,040 --> 00:20:04,800 Speaker 9: deals on hold until they find out what on earth 379 00:20:04,840 --> 00:20:08,280 Speaker 9: is going on. There's a lot of uncertainty at this point. 380 00:20:08,440 --> 00:20:10,800 Speaker 9: You haven't asked me about refunds for people who have 381 00:20:10,920 --> 00:20:15,280 Speaker 9: already paid merits as another source of uncertainty. You know, 382 00:20:15,400 --> 00:20:18,280 Speaker 9: the court didn't really rule on that. The administration has 383 00:20:18,280 --> 00:20:21,719 Speaker 9: heavily implied that they're going to fight any payment of refunds, 384 00:20:22,040 --> 00:20:23,520 Speaker 9: So people are going to start sumer ring. 385 00:20:24,600 --> 00:20:24,800 Speaker 2: You know. 386 00:20:24,880 --> 00:20:29,400 Speaker 9: It's it's when you think about tariffs. There are negative 387 00:20:29,400 --> 00:20:33,840 Speaker 9: economic effects that I think about with tariffs, But for me, overall, 388 00:20:34,359 --> 00:20:37,520 Speaker 9: the biggest negative comes in through the uncertainty and people 389 00:20:37,560 --> 00:20:40,200 Speaker 9: being unable to make decisions and not knowing what's going on, 390 00:20:40,920 --> 00:20:43,959 Speaker 9: and we certainly did not see a decrease in uncertainty 391 00:20:43,960 --> 00:20:45,080 Speaker 9: over My. 392 00:20:45,160 --> 00:20:48,080 Speaker 2: Answer is, as an amateur, this gets decided at the 393 00:20:48,119 --> 00:20:51,080 Speaker 2: ballot box, as it has back to eighteen ninety and 394 00:20:51,160 --> 00:20:54,119 Speaker 2: frankly before that that was coming off the Panic of 395 00:20:54,160 --> 00:20:56,840 Speaker 2: eighteen seventy two. They had the enjoyment of the Panic 396 00:20:56,880 --> 00:20:59,879 Speaker 2: of eighteen ninety three three years later or basically then 397 00:21:00,440 --> 00:21:03,560 Speaker 2: through the Republicans out of office. Martha Gimble, do you 398 00:21:03,600 --> 00:21:08,320 Speaker 2: and your team see a political ballot back solution to 399 00:21:08,440 --> 00:21:09,680 Speaker 2: our tariff discussion? 400 00:21:11,040 --> 00:21:14,080 Speaker 9: You know, we're a nonpartisan group of economists, so I 401 00:21:14,080 --> 00:21:18,400 Speaker 9: want to mention in trouble. Come on, I will leave 402 00:21:18,400 --> 00:21:20,680 Speaker 9: that to the political scientist. The one thing I will 403 00:21:20,720 --> 00:21:23,159 Speaker 9: say is, you know, because of the one hundred and 404 00:21:23,200 --> 00:21:26,480 Speaker 9: fifty day limit on the type of legal authority that 405 00:21:26,480 --> 00:21:29,560 Speaker 9: they're using right now, this is actually going to become 406 00:21:30,160 --> 00:21:33,159 Speaker 9: almost by design, a very live issue over the summer, 407 00:21:33,320 --> 00:21:36,040 Speaker 9: just as we're heading into the midterms. So I think 408 00:21:36,160 --> 00:21:37,600 Speaker 9: you know, depending on which way you think this is 409 00:21:37,640 --> 00:21:40,520 Speaker 9: going to go, it's going to be established a discussion. 410 00:21:40,560 --> 00:21:45,080 Speaker 2: Then can you calculate the fiscal whole. Now, can you 411 00:21:45,160 --> 00:21:49,280 Speaker 2: figure out with the just the craziness of what Paul 412 00:21:49,359 --> 00:21:52,520 Speaker 2: seventy two hours, is there a new plug in that 413 00:21:52,680 --> 00:21:55,520 Speaker 2: CBO is going to have where the money's not there? 414 00:21:55,680 --> 00:21:56,320 Speaker 6: What do we do? 415 00:21:58,160 --> 00:22:00,680 Speaker 9: Well? First of all, shout out to CBO who managed 416 00:22:00,720 --> 00:22:04,880 Speaker 9: to get their updated budget and economic outlook out right 417 00:22:04,960 --> 00:22:07,560 Speaker 9: before this, so I know the animals. They're beating a 418 00:22:07,640 --> 00:22:09,800 Speaker 9: size side of relief, you know. 419 00:22:09,960 --> 00:22:10,320 Speaker 6: There. 420 00:22:10,800 --> 00:22:14,760 Speaker 9: They did say that they expect that the administration will 421 00:22:14,760 --> 00:22:17,600 Speaker 9: be able to, under different legal authorities, basically recreate the 422 00:22:17,600 --> 00:22:20,159 Speaker 9: tariffs and it won't have a huge impact on revenue. 423 00:22:20,720 --> 00:22:24,200 Speaker 9: We're still waiting to see again what a final mix 424 00:22:24,240 --> 00:22:26,879 Speaker 9: of tariffs looks like. If you look at the fifteen 425 00:22:26,880 --> 00:22:29,920 Speaker 9: percent and it's extended after one hundred and fifty days, 426 00:22:30,520 --> 00:22:34,160 Speaker 9: you know that takes you down to two trillion over ten. 427 00:22:34,400 --> 00:22:36,720 Speaker 9: We were previously at two point three trillion over ten, 428 00:22:36,800 --> 00:22:39,800 Speaker 9: So you've lost three hundred billion. You know, that's a 429 00:22:39,840 --> 00:22:42,800 Speaker 9: substantial amount of money, to be clear, but you haven't 430 00:22:42,800 --> 00:22:45,439 Speaker 9: lost the full shebang. You're still going to get substantial 431 00:22:45,440 --> 00:22:46,040 Speaker 9: amount of revenue. 432 00:22:46,119 --> 00:22:48,440 Speaker 2: If Apple wants a big check, or name any other 433 00:22:48,480 --> 00:22:52,320 Speaker 2: big company, are the tariff monies in a piggy bank 434 00:22:52,680 --> 00:22:56,280 Speaker 2: somewhere or have they already Dare I say, have they 435 00:22:56,320 --> 00:22:57,200 Speaker 2: already been spent? 436 00:22:58,640 --> 00:23:02,240 Speaker 9: Well, it's sort of an interesting question actually of like, 437 00:23:02,560 --> 00:23:05,239 Speaker 9: you know, how good has the record keeping been on this? 438 00:23:05,560 --> 00:23:08,919 Speaker 9: You know, it's not like they've been kept in a 439 00:23:10,600 --> 00:23:13,960 Speaker 9: you know, special box in case of you know, how 440 00:23:14,000 --> 00:23:17,199 Speaker 9: the Supreme Court ruled. Now you know, that doesn't mean 441 00:23:17,240 --> 00:23:18,960 Speaker 9: that they can't give refunds, but they have to track 442 00:23:19,040 --> 00:23:21,959 Speaker 9: down who paid what in what way. You need the documentation. 443 00:23:22,080 --> 00:23:23,320 Speaker 9: It's just going to be a mess. 444 00:23:24,200 --> 00:23:27,480 Speaker 5: So what is the the bold case for just broad 445 00:23:27,560 --> 00:23:33,120 Speaker 5: tearffs like we're seeing this administration. You're an economist, what 446 00:23:33,280 --> 00:23:36,040 Speaker 5: there's got to be something there for this administration to 447 00:23:36,080 --> 00:23:36,679 Speaker 5: hang their hat on. 448 00:23:39,119 --> 00:23:44,160 Speaker 9: You know, almost all economists would say to you that 449 00:23:44,200 --> 00:23:48,159 Speaker 9: there is not. You know, we've started doing a tariff 450 00:23:48,160 --> 00:23:51,760 Speaker 9: impacts tracker where every month we look at the impacts 451 00:23:51,760 --> 00:23:54,679 Speaker 9: of tariffs and you know, are we seeing that improvement 452 00:23:54,840 --> 00:23:58,480 Speaker 9: in manufacturing employment that the administration said we would get 453 00:23:58,480 --> 00:24:01,840 Speaker 9: from tariffs? No, has not been the case, right, things 454 00:24:01,880 --> 00:24:06,119 Speaker 9: like that, we are seeing some sign of tariffs showing 455 00:24:06,200 --> 00:24:12,199 Speaker 9: up in durable prices. So, you know, so far what 456 00:24:12,240 --> 00:24:16,320 Speaker 9: you're seeing is the beginnings of what economist said was 457 00:24:16,320 --> 00:24:19,760 Speaker 9: going to happen, which is on net bad for employment, 458 00:24:20,000 --> 00:24:23,320 Speaker 9: not ideal for GDP, and a rise in prices. 459 00:24:23,680 --> 00:24:27,760 Speaker 6: Paul is the most uncomfortable questions, Martha. It's made more 460 00:24:27,800 --> 00:24:31,320 Speaker 6: so by the exactly Martha, you're a trooper. Thank you 461 00:24:31,400 --> 00:24:33,800 Speaker 6: so much. Folks may think Tank of the Year last year, 462 00:24:33,840 --> 00:24:35,080 Speaker 6: the budget lab at Yelle. 463 00:24:35,119 --> 00:24:39,359 Speaker 2: There's a million other people doing spectacular at work, but wow, 464 00:24:39,480 --> 00:24:40,920 Speaker 2: had they become influential? 465 00:24:42,600 --> 00:24:43,320 Speaker 6: Stay with us. 466 00:24:43,560 --> 00:24:46,800 Speaker 2: More from Bloomberg Surveillance coming up after this. 467 00:24:54,040 --> 00:24:57,639 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 468 00:24:57,680 --> 00:24:59,800 Speaker 1: weekday afternoons from seven to ten am. 469 00:25:00,040 --> 00:25:08,920 Speaker 6: I mean, in silence, you don't really know right now. 470 00:25:09,080 --> 00:25:11,000 Speaker 5: I know in New Jersey Translit will wait on them, 471 00:25:11,000 --> 00:25:13,959 Speaker 5: but I suspect I'll be spending another evening in the metropolis. 472 00:25:14,000 --> 00:25:17,879 Speaker 2: We will get an update now from a gentleman with experiences, 473 00:25:17,920 --> 00:25:22,440 Speaker 2: this legit major storm experience. General liber joins us now 474 00:25:22,680 --> 00:25:26,560 Speaker 2: with the mt A Jenna. What's your biggest headache right now? 475 00:25:28,200 --> 00:25:28,560 Speaker 7: Listen? 476 00:25:28,720 --> 00:25:31,960 Speaker 10: We got service running. You know, the challenges are are 477 00:25:32,040 --> 00:25:35,480 Speaker 10: well known. We got to keep our snow fighting equipment. 478 00:25:35,520 --> 00:25:40,160 Speaker 10: We got jet engine snowblowers operating on the subways, uh, 479 00:25:40,200 --> 00:25:44,480 Speaker 10: literally clearing the tracks, especially in the outdoor areas. The 480 00:25:44,600 --> 00:25:46,920 Speaker 10: challenge of you know, buses moving around is the same 481 00:25:46,920 --> 00:25:47,800 Speaker 10: as any vehicle. 482 00:25:48,440 --> 00:25:51,160 Speaker 7: But we are meeting the challenge, Tom Paul. We are. 483 00:25:51,560 --> 00:25:54,679 Speaker 10: We're running full subway service, albeit on a little you know, 484 00:25:54,720 --> 00:25:55,920 Speaker 10: reduced frequencies. 485 00:25:56,200 --> 00:25:57,520 Speaker 7: We got buses out there. 486 00:25:57,560 --> 00:26:01,800 Speaker 10: Metro North is operating on a reduced The one piece 487 00:26:01,800 --> 00:26:05,040 Speaker 10: of our system that is on suspension is the Long 488 00:26:05,080 --> 00:26:08,160 Speaker 10: Island Railroad. It's no secret that Long Island's getting hammered 489 00:26:08,160 --> 00:26:11,840 Speaker 10: and that wasn't the safe place to operate. But otherwise subways, buses, 490 00:26:11,880 --> 00:26:13,000 Speaker 10: commuter rail operating. 491 00:26:13,200 --> 00:26:15,400 Speaker 2: How does the wind play into it? I mean, I'm 492 00:26:15,400 --> 00:26:18,520 Speaker 2: calling it a snow it cane. I get the temperature 493 00:26:18,920 --> 00:26:23,120 Speaker 2: snow is snow, But like the wind on the various 494 00:26:23,280 --> 00:26:26,359 Speaker 2: trunks that you have, I mean underground, it doesn't affect it. 495 00:26:26,440 --> 00:26:28,359 Speaker 2: But how do you adapt to the wind? 496 00:26:28,760 --> 00:26:33,639 Speaker 10: Generally, Burt, the issue with wind mostly is actually the 497 00:26:33,680 --> 00:26:36,800 Speaker 10: impact it has undrifting it. You know, when you have, 498 00:26:37,240 --> 00:26:39,600 Speaker 10: for example, we have some areas of the subway system 499 00:26:39,600 --> 00:26:41,480 Speaker 10: that are what we call an open cut. That's like 500 00:26:41,520 --> 00:26:45,200 Speaker 10: a little valley, a depressed area below grade, but it's 501 00:26:45,240 --> 00:26:48,880 Speaker 10: still open to the sky and snow tends to accumulate, 502 00:26:48,920 --> 00:26:51,760 Speaker 10: and the wind pushes the snow into those areas. The 503 00:26:51,840 --> 00:26:55,440 Speaker 10: drifting on the commuter railroads sometimes we'll cover the third 504 00:26:55,520 --> 00:26:59,520 Speaker 10: rail are source of power. So that is and obviously 505 00:26:59,560 --> 00:27:02,720 Speaker 10: for people who are driving buses and even trains, the 506 00:27:02,800 --> 00:27:07,440 Speaker 10: visibility issues associated with wind. That wind is the dominant 507 00:27:07,480 --> 00:27:10,560 Speaker 10: factor in determining when we can bring back Long Island 508 00:27:10,640 --> 00:27:13,800 Speaker 10: Railroad service at the east end of our system. 509 00:27:14,440 --> 00:27:17,800 Speaker 5: So what is the latest thinking, johneral about the Long 510 00:27:17,800 --> 00:27:20,560 Speaker 5: Island Railroad here, because again, as you've mentioned, and we've 511 00:27:20,560 --> 00:27:23,720 Speaker 5: heard from the weather folks, that's really bearing the brunt 512 00:27:23,760 --> 00:27:24,359 Speaker 5: of the storm. 513 00:27:25,240 --> 00:27:25,440 Speaker 7: Yeah. 514 00:27:25,440 --> 00:27:28,520 Speaker 10: Well, we did an orderly shutdown last night at about 515 00:27:28,520 --> 00:27:32,639 Speaker 10: one am. The goal is always to get everybody home. 516 00:27:33,760 --> 00:27:37,600 Speaker 10: We did that last night with some extra service late 517 00:27:37,680 --> 00:27:41,600 Speaker 10: late and now we're going to be focused on orderly 518 00:27:41,720 --> 00:27:46,560 Speaker 10: resumption of service, hopefully in time to operate tomorrow when 519 00:27:47,000 --> 00:27:49,080 Speaker 10: the world will will be getting a little bit back 520 00:27:49,119 --> 00:27:52,960 Speaker 10: to normal. So that's the approach that we take safety first, 521 00:27:53,320 --> 00:27:56,399 Speaker 10: you know, and take account of where the snow accumulations 522 00:27:56,440 --> 00:27:59,879 Speaker 10: and the drifting may have impacted on service. You know, 523 00:28:00,040 --> 00:28:01,560 Speaker 10: one thing to bear in mind is in our big 524 00:28:01,640 --> 00:28:04,600 Speaker 10: train yards, that's where we tend to get, you know, 525 00:28:04,640 --> 00:28:06,200 Speaker 10: the biggest drifting issues. 526 00:28:06,280 --> 00:28:07,440 Speaker 7: And you know sometimes that. 527 00:28:07,400 --> 00:28:11,200 Speaker 10: Inhibits your ability to put cars into the system into service. 528 00:28:11,920 --> 00:28:14,399 Speaker 10: So we'll be digging out from in the yards and 529 00:28:14,480 --> 00:28:18,719 Speaker 10: making sure that again the third rail and the tracks 530 00:28:18,720 --> 00:28:20,560 Speaker 10: themselves are clear of snow. 531 00:28:20,800 --> 00:28:25,280 Speaker 2: We continue with General liber MTA share quality time from 532 00:28:25,280 --> 00:28:28,399 Speaker 2: his crisis center, Paul Sweeney with General liber Jenna. 533 00:28:28,480 --> 00:28:32,480 Speaker 5: So, all your personnel, the critical personnel of the MTA, 534 00:28:32,720 --> 00:28:35,440 Speaker 5: how do you manage getting those folks to where they 535 00:28:35,520 --> 00:28:37,840 Speaker 5: need to be, because, boy, they have to get there 536 00:28:37,880 --> 00:28:38,680 Speaker 5: just like the rest of us. 537 00:28:39,240 --> 00:28:40,000 Speaker 7: It's part of the. 538 00:28:40,000 --> 00:28:42,480 Speaker 10: Deal when you sign up to work for the MTA 539 00:28:42,680 --> 00:28:46,520 Speaker 10: that you may have to come in under extreme circumstances. 540 00:28:46,520 --> 00:28:48,280 Speaker 10: When the rest of the world is being told to 541 00:28:48,320 --> 00:28:51,239 Speaker 10: stay home, our workers are being told to come in 542 00:28:51,440 --> 00:28:55,120 Speaker 10: and they do. They work through the night, they work heavily. 543 00:28:55,240 --> 00:28:59,120 Speaker 10: Yesterday we got seventy thousand employees at the MTA. Thousands 544 00:28:59,160 --> 00:29:01,840 Speaker 10: of them have been many of them have slept in 545 00:29:02,360 --> 00:29:05,360 Speaker 10: you know, in bus garages or in rail the rail 546 00:29:05,440 --> 00:29:08,320 Speaker 10: Control center where our head of Subways spent the night 547 00:29:08,360 --> 00:29:09,719 Speaker 10: at the bus command center. 548 00:29:10,840 --> 00:29:12,880 Speaker 7: It's part of the deal working for the NTA. 549 00:29:13,000 --> 00:29:15,120 Speaker 10: And you know, I talked to Governor Hokel in the 550 00:29:15,200 --> 00:29:17,240 Speaker 10: last you know, in the last hour or two and 551 00:29:17,800 --> 00:29:20,720 Speaker 10: uh and and she's really focused on on you know, 552 00:29:20,760 --> 00:29:23,480 Speaker 10: a tip of the hat to the to the workforce. 553 00:29:23,160 --> 00:29:23,840 Speaker 6: A general lever. 554 00:29:24,080 --> 00:29:27,880 Speaker 2: I love artificial intelligence. It can ruin your day. General, 555 00:29:28,040 --> 00:29:30,760 Speaker 2: you gotta help me here with the one point eight 556 00:29:30,840 --> 00:29:34,040 Speaker 2: million dollars per inch? Myth Now, this is a Department 557 00:29:34,040 --> 00:29:38,480 Speaker 2: of sanitation. Did every inch of snow costs one million dollars? 558 00:29:38,760 --> 00:29:42,200 Speaker 2: What's your every inch of blizzard that costs the MTA? 559 00:29:42,360 --> 00:29:44,400 Speaker 6: Do you have a number? Even if you don't tell me, 560 00:29:44,720 --> 00:29:46,640 Speaker 6: do you have a number in your head? 561 00:29:47,400 --> 00:29:50,560 Speaker 10: I'll tell you the absolute truth. I have no idea whatsoever. 562 00:29:50,920 --> 00:29:53,000 Speaker 7: It's that you've given me a new metric. 563 00:29:53,120 --> 00:29:56,720 Speaker 10: We we use analytics here like crazy to evaluate how 564 00:29:56,720 --> 00:29:59,640 Speaker 10: well we're doing, hopefully to operate more efficiently every day. 565 00:30:00,120 --> 00:30:03,160 Speaker 10: You know, revue you know, costs per car mile, costs 566 00:30:03,200 --> 00:30:06,640 Speaker 10: per revenue mile for it subway and bus and commuter rail. 567 00:30:07,600 --> 00:30:10,520 Speaker 10: You've given me a new metric to study. But right 568 00:30:10,560 --> 00:30:12,440 Speaker 10: now I have no idea what to say to you. 569 00:30:12,720 --> 00:30:13,120 Speaker 6: John Old. 570 00:30:13,400 --> 00:30:16,760 Speaker 5: This is the second big, big winter storm of the season. 571 00:30:16,800 --> 00:30:18,720 Speaker 5: It's arguably one of the biggest storms we've had in 572 00:30:19,040 --> 00:30:23,239 Speaker 5: decades in this area. How's your system kind of holding up? 573 00:30:23,280 --> 00:30:26,240 Speaker 5: Does is there a cumulative effect where boy, we can't 574 00:30:26,360 --> 00:30:28,000 Speaker 5: We really don't want to have a third or fourth 575 00:30:28,000 --> 00:30:28,720 Speaker 5: storm this season. 576 00:30:30,320 --> 00:30:36,080 Speaker 10: Honestly, the challenge is, uh is you know the same 577 00:30:36,160 --> 00:30:39,120 Speaker 10: every time, which is you have to get the snow off. 578 00:30:39,200 --> 00:30:40,880 Speaker 10: You have to make sure you have enough people to 579 00:30:40,960 --> 00:30:43,840 Speaker 10: operate fully. You have to chain all the buses, you 580 00:30:43,920 --> 00:30:47,440 Speaker 10: have to move car you know, subway cars around and 581 00:30:47,480 --> 00:30:49,640 Speaker 10: put them in the tunnel, store them in the tunnels. 582 00:30:50,120 --> 00:30:51,520 Speaker 7: Uh, you know it's not. 583 00:30:51,880 --> 00:30:56,080 Speaker 10: That we we we every storm makes it harder. To 584 00:30:56,120 --> 00:30:59,240 Speaker 10: the contrary, you know, for better, whereas we're getting better 585 00:30:59,320 --> 00:31:02,800 Speaker 10: at preparing for these because we've had repetitive storms and 586 00:31:02,840 --> 00:31:04,760 Speaker 10: we're going to continue to try to get better. In 587 00:31:04,760 --> 00:31:07,280 Speaker 10: the air of climate change, we're dealing with all kinds 588 00:31:07,320 --> 00:31:09,880 Speaker 10: of extreme weather events. You know, right now we're forgetting 589 00:31:09,880 --> 00:31:14,120 Speaker 10: about torrential rainfall and and and rising sea levels, but 590 00:31:14,240 --> 00:31:16,080 Speaker 10: those are issues for the MTA as well. 591 00:31:16,400 --> 00:31:18,440 Speaker 2: What does the morning look like. Let's say four or 592 00:31:18,520 --> 00:31:22,880 Speaker 2: five am Tuesday morning. Mister Lieber, can you say back 593 00:31:22,920 --> 00:31:23,480 Speaker 2: to normal. 594 00:31:25,200 --> 00:31:28,320 Speaker 10: I don't know about normal, but listen, our friends in 595 00:31:28,560 --> 00:31:31,880 Speaker 10: at the Department of Sanitation are clearing not just the 596 00:31:31,920 --> 00:31:35,400 Speaker 10: streets but the bus stops. That's really important, something that 597 00:31:35,520 --> 00:31:38,240 Speaker 10: I know the Mayor wants to do better at compared 598 00:31:38,280 --> 00:31:41,480 Speaker 10: to the first time around, so that our bus people 599 00:31:41,480 --> 00:31:43,560 Speaker 10: who depend on buses will be able to get on 600 00:31:43,640 --> 00:31:45,520 Speaker 10: and off them without having. 601 00:31:45,320 --> 00:31:47,760 Speaker 7: To climb climb over a four foot mint of snow. 602 00:31:47,840 --> 00:31:50,480 Speaker 7: Who shots intant issue. 603 00:31:50,280 --> 00:31:50,960 Speaker 6: That's brilliant. 604 00:31:51,000 --> 00:31:54,280 Speaker 2: Who actually picks up a shovel and shovels a bus stop? 605 00:31:54,520 --> 00:31:55,440 Speaker 2: Who is that person? 606 00:31:55,480 --> 00:31:58,440 Speaker 10: Well, it's a lot of it's it's folks who work 607 00:31:58,440 --> 00:31:59,480 Speaker 10: for the Department of Sanitation. 608 00:31:59,560 --> 00:32:00,560 Speaker 7: There's some implemented. 609 00:32:01,000 --> 00:32:03,120 Speaker 10: This is City of New York as opposed to MTR 610 00:32:03,120 --> 00:32:07,040 Speaker 10: but they're supplemented by Parks Department workers and they're actually 611 00:32:07,160 --> 00:32:11,040 Speaker 10: hiring folks off the street for extra shovelers this time around. 612 00:32:11,120 --> 00:32:14,560 Speaker 10: So I'm very hopeful that that particular challenge will be 613 00:32:14,600 --> 00:32:17,560 Speaker 10: addressed and we're we're going to be clearing not just 614 00:32:17,600 --> 00:32:21,040 Speaker 10: the tracks but also our yards as I mentioned, which 615 00:32:21,080 --> 00:32:23,080 Speaker 10: is where trains tend to get stuck. 616 00:32:23,560 --> 00:32:23,760 Speaker 7: Uh. 617 00:32:23,800 --> 00:32:25,600 Speaker 10: And and there are you know, a lot of complex 618 00:32:25,640 --> 00:32:29,520 Speaker 10: switches that can inhibit things that they're not properly in 619 00:32:29,640 --> 00:32:30,280 Speaker 10: order one. 620 00:32:30,160 --> 00:32:33,200 Speaker 6: More question, Paul, you were you were impressed by the buses. 621 00:32:33,400 --> 00:32:35,440 Speaker 5: Yeah, just walking to work this morning, I saw some 622 00:32:35,480 --> 00:32:38,120 Speaker 5: of the buses here. Talk to us about the buses 623 00:32:38,120 --> 00:32:41,240 Speaker 5: because boy, there, I haven't seen too many snowplows out yet. 624 00:32:41,280 --> 00:32:43,400 Speaker 5: Because the storm is still raging here. How do the 625 00:32:43,400 --> 00:32:45,120 Speaker 5: buses adapt here? 626 00:32:46,200 --> 00:32:48,200 Speaker 7: It's it's old fashioned stuff, Paul. 627 00:32:48,280 --> 00:32:51,000 Speaker 10: It's we put chains on every on the tires of 628 00:32:51,040 --> 00:32:55,240 Speaker 10: every bus, and that that that gets done in the days. 629 00:32:55,080 --> 00:32:57,240 Speaker 7: Leading up to, uh to the storm. 630 00:32:57,800 --> 00:33:00,280 Speaker 10: When we know it's coming, you know, forecastings get better 631 00:33:00,320 --> 00:33:03,440 Speaker 10: and better, we chain the entire fleet, and we take 632 00:33:03,480 --> 00:33:07,080 Speaker 10: all the articulated buses, which are you know, tend to 633 00:33:07,080 --> 00:33:09,440 Speaker 10: move around a little more in slippery conditions. We take 634 00:33:09,480 --> 00:33:13,000 Speaker 10: them out of service, and we make plans accordingly. 635 00:33:13,760 --> 00:33:17,280 Speaker 2: Gennal, thank you so much for taking precious time this morning. 636 00:33:17,360 --> 00:33:20,320 Speaker 6: This is the MTA of New York City. 637 00:33:20,400 --> 00:33:22,800 Speaker 2: As they deal with the storm, as I'm sure that 638 00:33:22,880 --> 00:33:24,720 Speaker 2: we're seeing in Philadelphia and Boston. 639 00:33:25,040 --> 00:33:29,880 Speaker 1: This is the Bloomberg Surveillance Podcast. Available on apples, Spotify, 640 00:33:30,000 --> 00:33:34,280 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 641 00:33:34,400 --> 00:33:37,840 Speaker 1: seven to ten am Eastern on Bloomberg dot Com, the 642 00:33:37,960 --> 00:33:41,960 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 643 00:33:42,000 --> 00:33:45,360 Speaker 1: can also watch us live every weekday on YouTube and 644 00:33:45,560 --> 00:33:47,320 Speaker 1: always on the Bloomberg terminal