1 00:00:00,120 --> 00:00:10,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple Coarclay and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,360 --> 00:00:27,960 Speaker 2: In a story that has dragged on days, and it's 7 00:00:28,080 --> 00:00:31,280 Speaker 2: really just beginning, let's be honest, not the market reaction, 8 00:00:31,720 --> 00:00:34,760 Speaker 2: but the tariffs. The reciprocal tariffs go into effect at 9 00:00:34,760 --> 00:00:38,960 Speaker 2: midnight tonight, and there are questions about, of course, their impact. 10 00:00:38,960 --> 00:00:42,440 Speaker 2: There are questions about what deals in fact could be made. 11 00:00:43,040 --> 00:00:47,400 Speaker 2: As we look squarely at China today, President not making 12 00:00:47,440 --> 00:00:51,360 Speaker 2: anyone happy in Beijing now criticizing President Trump's threats to 13 00:00:51,440 --> 00:00:55,200 Speaker 2: oppose this additional Remember yesterday around this time, fifty percent tariff, 14 00:00:55,200 --> 00:01:00,920 Speaker 2: he said, reciprocating the reciprocal or some to that effect. 15 00:01:01,160 --> 00:01:04,400 Speaker 2: China calls it blackmail. The US threat to escalate tariffs 16 00:01:04,440 --> 00:01:07,399 Speaker 2: on China a mistake on top of a mistake, The 17 00:01:07,440 --> 00:01:10,679 Speaker 2: country's Commerce Ministry said in a statement, China will never 18 00:01:10,760 --> 00:01:13,040 Speaker 2: accept it. If the US insists on its own way, 19 00:01:13,440 --> 00:01:17,920 Speaker 2: China ready will fight to the end unquote. That does 20 00:01:17,959 --> 00:01:21,119 Speaker 2: not sound like a country that's about to make a deal, though, 21 00:01:21,160 --> 00:01:24,800 Speaker 2: on truth social President Trump says quite the opposite. China 22 00:01:25,280 --> 00:01:28,000 Speaker 2: also wants to make a deal badly, he writes, referring 23 00:01:28,040 --> 00:01:29,920 Speaker 2: to a deal in the works now with South Korea, 24 00:01:30,360 --> 00:01:32,559 Speaker 2: but they don't know how to get it started. He says, 25 00:01:32,840 --> 00:01:36,640 Speaker 2: We're waiting for their call. It will happen exclamation point. 26 00:01:37,600 --> 00:01:41,480 Speaker 2: Earlier today we heard from the Chair of the Council 27 00:01:41,520 --> 00:01:45,280 Speaker 2: of Economic Advisors at the White House, Stephen Myron, on 28 00:01:45,319 --> 00:01:47,400 Speaker 2: Bloomberg's surveillance, had this to say. 29 00:01:48,080 --> 00:01:50,200 Speaker 3: I think that depends on the Chinese, and you know, 30 00:01:50,280 --> 00:01:51,800 Speaker 3: my advice to them would be that they have a 31 00:01:51,840 --> 00:01:54,400 Speaker 3: lot more to lose than America does. That America holds 32 00:01:54,400 --> 00:01:58,400 Speaker 3: a leverage and everybody knows that, and therefore they should 33 00:01:58,560 --> 00:02:01,560 Speaker 3: seek a detant and offer concessions which would persuade the 34 00:02:01,600 --> 00:02:03,600 Speaker 3: President to relent. 35 00:02:05,520 --> 00:02:09,280 Speaker 2: Seek a detante, as we do right now with the 36 00:02:09,320 --> 00:02:11,880 Speaker 2: great Tom Orlick. There was one voice we wanted to 37 00:02:12,200 --> 00:02:15,840 Speaker 2: get to today as this really seems to focus around 38 00:02:15,919 --> 00:02:18,519 Speaker 2: China at the moment, and that is the chief economist 39 00:02:18,560 --> 00:02:21,800 Speaker 2: at Bloomberg Economics, Tom Orlck, who spent a good chunk 40 00:02:21,840 --> 00:02:24,400 Speaker 2: of his career reporting in China and has a good 41 00:02:24,400 --> 00:02:27,839 Speaker 2: sense of the psychology right now in Beijing. It's great 42 00:02:27,840 --> 00:02:31,119 Speaker 2: to have you back, Tom. I have very simple questions 43 00:02:31,160 --> 00:02:34,440 Speaker 2: for you on this, because we're actually talking about fairly 44 00:02:34,520 --> 00:02:37,480 Speaker 2: simple ideas here. It's just been a very complicated reaction. 45 00:02:37,840 --> 00:02:40,480 Speaker 2: What is the psychology when you hear terms like blackmail, 46 00:02:40,600 --> 00:02:45,600 Speaker 2: fight to the end? How is Beijing interpreting this line 47 00:02:45,600 --> 00:02:47,480 Speaker 2: from the White House when it comes to tariffs and 48 00:02:47,600 --> 00:02:48,919 Speaker 2: more layers of tariffs? 49 00:02:49,480 --> 00:02:53,760 Speaker 4: So, of course I don't have a window into China's 50 00:02:53,840 --> 00:02:58,160 Speaker 4: leadership compound in Beijing, Joe, but I suspect if we 51 00:02:58,240 --> 00:03:02,919 Speaker 4: could listen in on some of those conversations, China's leaders 52 00:03:02,960 --> 00:03:07,000 Speaker 4: will probably be thinking. Well, First, in Trump's first term, 53 00:03:07,320 --> 00:03:12,280 Speaker 4: we engaged in an extensive negotiation over tariffs. We struck 54 00:03:12,360 --> 00:03:15,720 Speaker 4: a deal. Yes, we didn't fully live up to the 55 00:03:15,800 --> 00:03:19,400 Speaker 4: terms of those deal, but there was a COVID pandemic. 56 00:03:19,880 --> 00:03:24,400 Speaker 4: It's forced maseure. Now Trump's hitting us again and with 57 00:03:24,480 --> 00:03:29,919 Speaker 4: much higher tariffs. Is this a reasonable negotiating partner if 58 00:03:29,919 --> 00:03:32,600 Speaker 4: we negotiate in good faith once and do a deal. 59 00:03:33,280 --> 00:03:36,960 Speaker 4: But that deal doesn't seem to have any traction is 60 00:03:36,960 --> 00:03:41,160 Speaker 4: there any point in US engaging in another negotiation. So 61 00:03:41,240 --> 00:03:44,040 Speaker 4: I think that's probably part of the reason why we're 62 00:03:44,040 --> 00:03:48,880 Speaker 4: seeing China hitting back rather than attempting to negotiate. 63 00:03:49,320 --> 00:03:52,280 Speaker 2: Interesting fight to the end, it's pretty stark. That sounds 64 00:03:52,320 --> 00:03:55,320 Speaker 2: like we're not going to be reaching a deal anytime soon. 65 00:03:56,200 --> 00:03:59,480 Speaker 2: Washington has a certain angle on China. It's a bipartisan affair. 66 00:03:59,600 --> 00:04:03,360 Speaker 2: Although the White House has a particular obsession with China 67 00:04:03,400 --> 00:04:05,840 Speaker 2: when it comes to trade, does it deserve that reputation. 68 00:04:06,800 --> 00:04:10,400 Speaker 4: So I think the idea that China has more to 69 00:04:10,480 --> 00:04:14,160 Speaker 4: lose from this than the United States does is true. 70 00:04:14,840 --> 00:04:17,400 Speaker 4: China has the trade surplus, the United States has the 71 00:04:17,440 --> 00:04:21,920 Speaker 4: trade deficit. China is benefiting from catch up on technology 72 00:04:22,240 --> 00:04:26,040 Speaker 4: as US firms move their factories and their expertise and 73 00:04:26,080 --> 00:04:30,000 Speaker 4: their ip into the Chinese market. So China does have 74 00:04:30,080 --> 00:04:34,239 Speaker 4: more to lose here. But China is not the only 75 00:04:34,720 --> 00:04:37,840 Speaker 4: country that has something to lose in a trade war. 76 00:04:38,000 --> 00:04:38,320 Speaker 2: Sure. 77 00:04:38,440 --> 00:04:42,640 Speaker 4: Think about the US firms which have supply chains across 78 00:04:42,720 --> 00:04:47,960 Speaker 4: China's East Coast, apple being a prominent example. Think about 79 00:04:47,960 --> 00:04:51,880 Speaker 4: the US consumers who've grown used to being able to 80 00:04:52,360 --> 00:04:55,640 Speaker 4: pick up their clothes and their sneakers and their electronics 81 00:04:56,000 --> 00:05:00,279 Speaker 4: bargain basement prices, and think of the investors. We've been 82 00:05:00,320 --> 00:05:03,840 Speaker 4: making big bets on this relationship staying in place. There 83 00:05:03,839 --> 00:05:07,839 Speaker 4: are some pretty important US constituencies who are going to 84 00:05:07,880 --> 00:05:08,680 Speaker 4: be losing out here. 85 00:05:08,760 --> 00:05:11,520 Speaker 2: Well, that's right. I mean you could argue we wouldn't 86 00:05:11,560 --> 00:05:15,800 Speaker 2: have Walmart without China, right, we wouldn't have cheap appliances 87 00:05:15,839 --> 00:05:18,160 Speaker 2: without China. We'd be paying three thousand dollars for an 88 00:05:18,160 --> 00:05:20,440 Speaker 2: iPhone without China, or some of the countries that have 89 00:05:20,480 --> 00:05:24,520 Speaker 2: seen spillovers with Apple and so forth trying to relocate 90 00:05:24,560 --> 00:05:27,760 Speaker 2: some manufacturing. But this is why people are talking about 91 00:05:28,160 --> 00:05:32,599 Speaker 2: upending the world's economic order without China. Do we not 92 00:05:32,720 --> 00:05:33,760 Speaker 2: pay more for everything? 93 00:05:34,520 --> 00:05:36,320 Speaker 4: Well, I think the President, if you were here in 94 00:05:36,360 --> 00:05:38,680 Speaker 4: the studio j would say, we'd also have more of 95 00:05:38,720 --> 00:05:41,720 Speaker 4: a manufacturing industry if it weren't for China. Right, So 96 00:05:41,839 --> 00:05:43,479 Speaker 4: there's two sides. 97 00:05:43,200 --> 00:05:45,279 Speaker 2: To it for every but it is much more expensive. 98 00:05:45,480 --> 00:05:51,040 Speaker 4: The labor's much more expensive. But maybe it's worth paying 99 00:05:51,080 --> 00:05:55,559 Speaker 4: more for our consumer goods. The White House believes if 100 00:05:55,960 --> 00:05:59,400 Speaker 4: that guarantees a future for the US manufacturing industry, a 101 00:05:59,440 --> 00:06:03,279 Speaker 4: path to a stable middle class life for US workers 102 00:06:03,920 --> 00:06:05,839 Speaker 4: and locks in our national security. 103 00:06:06,040 --> 00:06:06,200 Speaker 5: Right. 104 00:06:06,279 --> 00:06:09,600 Speaker 4: Part of the argument here is not about economic efficiency 105 00:06:09,839 --> 00:06:14,160 Speaker 4: and profits and market gains. It's about recognizing that China's 106 00:06:14,160 --> 00:06:16,840 Speaker 4: a geopolitical rival, and do we want to be so 107 00:06:17,000 --> 00:06:21,719 Speaker 4: dependent on a geopolitical rival for crucial interests? 108 00:06:21,880 --> 00:06:25,080 Speaker 2: Well, will you talk about you know, high end manufacturing, 109 00:06:25,360 --> 00:06:29,120 Speaker 2: advanced manufacturing. I understand the drive there when you're talking 110 00:06:29,160 --> 00:06:32,880 Speaker 2: about making socks or sneakers. Is that really what we 111 00:06:32,960 --> 00:06:35,080 Speaker 2: want to bring back to this country? What would our 112 00:06:35,120 --> 00:06:35,960 Speaker 2: economy look like? 113 00:06:36,320 --> 00:06:39,040 Speaker 4: I think that's a great question. Joe So, I used 114 00:06:39,040 --> 00:06:41,400 Speaker 4: to live in China. Yeah, and I visited some of 115 00:06:41,440 --> 00:06:45,080 Speaker 4: the manufacturing centers. I've seen what it's like working in 116 00:06:45,440 --> 00:06:51,719 Speaker 4: a factory that snaps together iPhones or shows up sports gear. 117 00:06:52,760 --> 00:06:55,160 Speaker 4: Those are great jobs if you were working on a 118 00:06:55,240 --> 00:07:00,000 Speaker 4: Chinese farm, because by going into the factory your double 119 00:07:00,279 --> 00:07:04,320 Speaker 4: tripling your income. Are they a great job if you're 120 00:07:05,200 --> 00:07:08,320 Speaker 4: a US worker? Do you want to work in those conditions? 121 00:07:09,160 --> 00:07:10,560 Speaker 4: I think there are some questions there. 122 00:07:10,680 --> 00:07:13,800 Speaker 2: Well, I'm sure that's true. As a go forward. You 123 00:07:13,840 --> 00:07:17,040 Speaker 2: look at this truth post from Donald Trump that I 124 00:07:17,080 --> 00:07:19,280 Speaker 2: was reading. He seems to think that a deal with 125 00:07:19,320 --> 00:07:23,000 Speaker 2: South Korea would unlock a deal with China. In fact, 126 00:07:23,080 --> 00:07:25,800 Speaker 2: says their top team South Korea is on a plane 127 00:07:25,800 --> 00:07:28,560 Speaker 2: heading to the US and things are looking good. Were 128 00:07:28,600 --> 00:07:30,800 Speaker 2: likewise dealing with many other countries, all of whom who 129 00:07:30,840 --> 00:07:32,640 Speaker 2: want to make a deal with the United States, and 130 00:07:32,720 --> 00:07:36,000 Speaker 2: he points to China could some motion in the region, 131 00:07:36,200 --> 00:07:39,160 Speaker 2: South Korea, Japan in fact unlock a deal with Beijing. 132 00:07:39,720 --> 00:07:42,400 Speaker 4: So I think there are some really important differences between 133 00:07:42,440 --> 00:07:45,320 Speaker 4: South Korea and China when it comes to their relations 134 00:07:45,320 --> 00:07:48,240 Speaker 4: with the United States. So the first one is South 135 00:07:48,320 --> 00:07:52,000 Speaker 4: Korea is a US ally, and South Korea relies on 136 00:07:52,240 --> 00:07:57,480 Speaker 4: US troops as part of the deterrent against North Korea. 137 00:07:57,800 --> 00:08:03,160 Speaker 4: Exports are also important as a driver of South Korea's growth. 138 00:08:03,320 --> 00:08:05,560 Speaker 4: They really can't do without export markets. 139 00:08:05,960 --> 00:08:07,480 Speaker 6: So for security. 140 00:08:07,040 --> 00:08:12,240 Speaker 4: Reasons, for economic reasons, for treaty reasons, you can understand 141 00:08:12,240 --> 00:08:14,320 Speaker 4: why South Koreans might be wanting to get on a 142 00:08:14,320 --> 00:08:18,480 Speaker 4: plane to Washington, DC. None of those things apply to China. 143 00:08:19,040 --> 00:08:21,760 Speaker 4: China is not a US ally. China is in many 144 00:08:21,800 --> 00:08:26,680 Speaker 4: respects a US adversary. Exports are important for China's economy, 145 00:08:27,000 --> 00:08:30,080 Speaker 4: but not nearly as important as domestic demand. So they 146 00:08:30,120 --> 00:08:32,480 Speaker 4: take a hit here, but it's nothing like the size 147 00:08:32,520 --> 00:08:36,560 Speaker 4: of the hit which South Korea would take. So it 148 00:08:36,600 --> 00:08:39,560 Speaker 4: doesn't surprise me that some small, some mid sized economies 149 00:08:39,960 --> 00:08:43,360 Speaker 4: like South Korea should be picking up the phone. Does 150 00:08:43,440 --> 00:08:47,760 Speaker 4: that mean China is going to be picking up the phone? 151 00:08:48,240 --> 00:08:49,760 Speaker 4: I'm not holding my breath. 152 00:08:49,800 --> 00:08:52,280 Speaker 2: Wow, this has been a clinic with Tom Orlick in 153 00:08:52,280 --> 00:08:58,080 Speaker 2: our remaining moment here, Vietnam accused of wandering Chinese goods 154 00:08:58,800 --> 00:09:02,320 Speaker 2: through its country in the end, pre evading tariffs. Essentially, 155 00:09:02,840 --> 00:09:06,120 Speaker 2: do tariffs stop that kind of behavior? Is Vietnam caught 156 00:09:06,120 --> 00:09:06,600 Speaker 2: in the middle? 157 00:09:07,120 --> 00:09:10,199 Speaker 4: So think about the difference between Trump one and Trump two. 158 00:09:11,120 --> 00:09:15,240 Speaker 4: Trump one, China got hit with tariffs, Vietnam didn't get 159 00:09:15,280 --> 00:09:18,640 Speaker 4: hit with tariffs. Mexico didn't get hit with tariffs. Right, 160 00:09:19,000 --> 00:09:21,679 Speaker 4: that's a world where if you're a bit crafty, you 161 00:09:21,679 --> 00:09:22,640 Speaker 4: can game the system. 162 00:09:22,760 --> 00:09:23,560 Speaker 2: This has changed that. 163 00:09:23,880 --> 00:09:26,080 Speaker 4: Let's send the ship to Vietnam, right, and then onto 164 00:09:26,120 --> 00:09:28,240 Speaker 4: the US, and then we can dodge the tariffs. If 165 00:09:28,240 --> 00:09:31,080 Speaker 4: everyone get hits with tariff. If everyone gets hit with tariffs, 166 00:09:31,280 --> 00:09:32,640 Speaker 4: that game doesn't work anymore. 167 00:09:32,760 --> 00:09:35,200 Speaker 2: Boy, fascinating. I hope we can stay close with you 168 00:09:35,240 --> 00:09:37,240 Speaker 2: on this because the next couple of days it sounds 169 00:09:37,240 --> 00:09:39,360 Speaker 2: like we'll be critical here in the region. Tom Orlick, 170 00:09:39,679 --> 00:09:42,800 Speaker 2: he's the chief economist at Bloomberg Economics for a reason 171 00:09:43,160 --> 00:09:45,360 Speaker 2: and great to have some time. Tom. Thank you so much. 172 00:09:45,360 --> 00:09:47,040 Speaker 2: You're on the fastest show in politics. 173 00:09:49,240 --> 00:09:52,720 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 174 00:09:52,760 --> 00:09:55,600 Speaker 1: us live weekdays at noon and five pm. He's tern 175 00:09:55,760 --> 00:09:59,160 Speaker 1: on Apple Cocklay and Android Auto with the Bluemberg business app. 176 00:09:59,240 --> 00:10:02,800 Speaker 1: You can also live on Amazon Alexa from our flagship 177 00:10:02,880 --> 00:10:07,520 Speaker 1: New York station Just Say Alexa played Bloomberg eleven thirty. 178 00:10:08,240 --> 00:10:13,160 Speaker 2: Congressman Pat Fallon, the Republican from Texas's fourth Districts, is 179 00:10:13,200 --> 00:10:15,920 Speaker 2: watching all of this happen and joins us now live 180 00:10:16,000 --> 00:10:18,960 Speaker 2: on Bloomberg TV and Radio. Congressman, it's great to have you. 181 00:10:19,240 --> 00:10:21,439 Speaker 2: We've been hearing a lot of concern from both sides 182 00:10:21,480 --> 00:10:24,160 Speaker 2: of the aisle, certainly in this hearing this morning with 183 00:10:24,240 --> 00:10:27,120 Speaker 2: the US Trade Representative about the impact of these tariffs 184 00:10:27,160 --> 00:10:30,200 Speaker 2: and exactly what's going to happen after midnight tonight. Are 185 00:10:30,240 --> 00:10:32,400 Speaker 2: you hearing a coherent message from the White House that 186 00:10:32,440 --> 00:10:34,640 Speaker 2: you can support? Is the President going to make the 187 00:10:34,640 --> 00:10:36,320 Speaker 2: country stronger at midnight tonight? 188 00:10:37,679 --> 00:10:38,199 Speaker 6: Absolutely? 189 00:10:38,360 --> 00:10:40,400 Speaker 7: And I am hearing a coherent message, and that is 190 00:10:40,720 --> 00:10:44,240 Speaker 7: that there are So I just was with Leadership and 191 00:10:44,280 --> 00:10:46,040 Speaker 7: they had just got off the phone with President Trump, 192 00:10:46,080 --> 00:10:49,600 Speaker 7: and he said to them there was about seventy countries 193 00:10:49,640 --> 00:10:52,040 Speaker 7: that have reached out to the administration and wanted to 194 00:10:52,120 --> 00:10:53,400 Speaker 7: negotiate trade deals. 195 00:10:53,520 --> 00:10:54,960 Speaker 6: So what it looks like at chipping up? 196 00:10:55,000 --> 00:10:56,559 Speaker 7: And I'm not going to panic at all, and I 197 00:10:56,559 --> 00:10:59,360 Speaker 7: don't think anybody should, because things like this, you know, 198 00:10:59,520 --> 00:11:01,880 Speaker 7: days in a weeks, they should be measured in days 199 00:11:01,880 --> 00:11:03,560 Speaker 7: and weeks, they should be measured in months and years. 200 00:11:03,600 --> 00:11:05,400 Speaker 6: And I do think that we're going to see. 201 00:11:05,280 --> 00:11:09,080 Speaker 7: Trade deals really a cascade of them that will strengthen 202 00:11:09,120 --> 00:11:11,640 Speaker 7: this country, will put us in a better position. 203 00:11:11,679 --> 00:11:14,200 Speaker 6: And I think the economy will show more strength. 204 00:11:15,720 --> 00:11:19,160 Speaker 8: Well, Congressman, as we consider that kind of time horizon, 205 00:11:19,160 --> 00:11:21,480 Speaker 8: what are you telling your constituents about what they should 206 00:11:21,480 --> 00:11:23,800 Speaker 8: be bracing for in the days and weeks ahead, in 207 00:11:23,840 --> 00:11:26,680 Speaker 8: the more short term compared to what you just described 208 00:11:26,679 --> 00:11:29,559 Speaker 8: as the months and years ahead. Because this is consistently 209 00:11:29,600 --> 00:11:32,120 Speaker 8: how we see it framed by this administration, short term 210 00:11:32,160 --> 00:11:33,960 Speaker 8: pain for longer term gain. 211 00:11:34,960 --> 00:11:38,000 Speaker 7: I think really what you're asking, Kayley, is how short 212 00:11:38,040 --> 00:11:38,600 Speaker 7: term is. 213 00:11:38,640 --> 00:11:43,040 Speaker 6: Short term is it going to be yes, exactly. Don't 214 00:11:43,040 --> 00:11:43,760 Speaker 6: have the crystal ball. 215 00:11:43,800 --> 00:11:46,600 Speaker 7: But what I suspect will happen is that once we 216 00:11:46,640 --> 00:11:49,760 Speaker 7: see these major countries making deals like Vietnam, that would 217 00:11:49,800 --> 00:11:51,520 Speaker 7: be that's a sizable deal. 218 00:11:52,200 --> 00:11:53,560 Speaker 6: Obviously the EU would be. 219 00:11:55,679 --> 00:12:00,640 Speaker 7: Seismic, and then the markets will see, Okay, we're seeing 220 00:12:00,679 --> 00:12:03,720 Speaker 7: some steady stability, we're seeing some achievement, and you're going 221 00:12:03,760 --> 00:12:06,920 Speaker 7: to see a slow isolation of China, and then it's 222 00:12:06,960 --> 00:12:08,480 Speaker 7: up to them to make a deal. I know that 223 00:12:08,520 --> 00:12:10,320 Speaker 7: they're going to have to say face and whatnot, but 224 00:12:10,559 --> 00:12:13,599 Speaker 7: this trade war will hurt them way more than it 225 00:12:13,640 --> 00:12:16,480 Speaker 7: will hurt us. We will experience some pain, no doubt, 226 00:12:16,640 --> 00:12:20,160 Speaker 7: but they will experience it tenfold. So it's made behooves 227 00:12:20,160 --> 00:12:22,360 Speaker 7: them to come to the table as well. And I 228 00:12:22,360 --> 00:12:24,960 Speaker 7: think you'll see that. You just won't see it immediately 229 00:12:25,240 --> 00:12:27,480 Speaker 7: for really, I think egotistical reasons when you deal with 230 00:12:27,480 --> 00:12:29,600 Speaker 7: an authoritarian regime, that's just. 231 00:12:29,800 --> 00:12:30,440 Speaker 6: In the equation. 232 00:12:32,040 --> 00:12:34,200 Speaker 2: Well, they do like to buy some of our stuff 233 00:12:34,840 --> 00:12:38,160 Speaker 2: as well, but we buy a lot more of theirs. Congressman, 234 00:12:38,200 --> 00:12:42,160 Speaker 2: the US China Business Council finds that the fourth Congressional District, 235 00:12:42,240 --> 00:12:45,160 Speaker 2: your district alone exported five hundred and ten million dollars 236 00:12:45,200 --> 00:12:47,959 Speaker 2: worth of goods to China in the most recent year 237 00:12:48,000 --> 00:12:51,080 Speaker 2: we have here, twenty twenty two. What could that mean 238 00:12:51,120 --> 00:12:54,480 Speaker 2: for your local economy if those exports begin to slow. 239 00:12:55,280 --> 00:12:57,880 Speaker 7: The fourth Congressional District in Texas as a whole has 240 00:12:57,880 --> 00:13:01,280 Speaker 7: a very dynamic economy, Joe, and if we were our 241 00:13:01,280 --> 00:13:04,040 Speaker 7: own country would be the eighth largest economy in the world. 242 00:13:04,080 --> 00:13:05,280 Speaker 6: So five hundred and ten million. 243 00:13:05,600 --> 00:13:09,120 Speaker 7: While that's a big number, you know what, our constituents 244 00:13:09,160 --> 00:13:12,920 Speaker 7: are rooting for America and america success, unlike some other 245 00:13:12,960 --> 00:13:15,439 Speaker 7: networks like CNN that was seemingly rooting for China. 246 00:13:15,640 --> 00:13:18,360 Speaker 6: Was sent an article I read yesterday. 247 00:13:18,800 --> 00:13:22,000 Speaker 8: Well, I wonder, sir, if more help will be required 248 00:13:22,080 --> 00:13:25,000 Speaker 8: for their success if these tariffs indeed go into effect 249 00:13:25,080 --> 00:13:27,680 Speaker 8: and last for some period of time. We obviously saw 250 00:13:27,679 --> 00:13:31,360 Speaker 8: in the first Trump administration that farmers were offered subsidies. 251 00:13:31,840 --> 00:13:34,040 Speaker 8: I wonder if you expect to see that again. Bloomberg 252 00:13:34,080 --> 00:13:37,040 Speaker 8: has reported that Republican colleagues of yours are considering looking 253 00:13:37,040 --> 00:13:40,520 Speaker 8: at potentially a tax credit for exporters. Would you be 254 00:13:40,520 --> 00:13:44,040 Speaker 8: supportive of those kinds of measures? Is it worth it 255 00:13:44,080 --> 00:13:46,960 Speaker 8: to spend more in order to raise revenue. 256 00:13:48,400 --> 00:13:51,120 Speaker 7: Yeah, I think that it's too early to talk about 257 00:13:51,120 --> 00:13:53,320 Speaker 7: that or really seriously consider it, but we need to 258 00:13:53,600 --> 00:13:56,800 Speaker 7: strategically decouple from China. Obviously we're going to trade with 259 00:13:56,840 --> 00:13:59,920 Speaker 7: them even when this is over. But the reliant over 260 00:14:00,160 --> 00:14:03,880 Speaker 7: reliance that we've had on our number one geo political 261 00:14:04,040 --> 00:14:07,200 Speaker 7: competitor is alarming, and really COVID should have woken us 262 00:14:07,240 --> 00:14:10,360 Speaker 7: up to that reality. And we're far too reliant on 263 00:14:10,679 --> 00:14:13,760 Speaker 7: the Chinese right now. And this, I think is going 264 00:14:13,800 --> 00:14:18,520 Speaker 7: to act as a wonderful instrument to start that decoupling, 265 00:14:18,760 --> 00:14:20,680 Speaker 7: and that's going to make us stronger, and we need 266 00:14:20,720 --> 00:14:23,440 Speaker 7: to be We need to have more diverse trading partners. 267 00:14:24,720 --> 00:14:27,040 Speaker 2: We're watching Wall Street turn negative here. We just want 268 00:14:27,040 --> 00:14:30,080 Speaker 2: to mention after starting with a powerful rally this morning, 269 00:14:30,080 --> 00:14:33,840 Speaker 2: a relief rally that seemed to be defying gravity considering 270 00:14:33,920 --> 00:14:36,880 Speaker 2: the news that hasn't changed too much around tariffs. As 271 00:14:36,920 --> 00:14:39,760 Speaker 2: the congressman mentioned, there was some hope for deals to 272 00:14:39,840 --> 00:14:42,880 Speaker 2: emerge from these reciprocal tariffs, but hope appears to be 273 00:14:42,880 --> 00:14:45,040 Speaker 2: fading on Wall Street, the S and P five hundred 274 00:14:45,280 --> 00:14:47,920 Speaker 2: turning negative. It's now up actually just by four points. 275 00:14:47,920 --> 00:14:51,520 Speaker 2: The Nasdaq one hundred is down by twenty four points 276 00:14:51,560 --> 00:14:55,280 Speaker 2: here as we make our way through the midday in trading, Congressmen, 277 00:14:55,320 --> 00:14:58,040 Speaker 2: are you hearing from constituents? Are they Are they hitting 278 00:14:58,040 --> 00:15:00,920 Speaker 2: the constituent line to ask about their retirement accounts? 279 00:15:03,360 --> 00:15:06,000 Speaker 7: There's a few folks, but it hasn't been really all 280 00:15:06,000 --> 00:15:08,680 Speaker 7: that sizeable yet, because again, if you're an investor in 281 00:15:08,680 --> 00:15:12,080 Speaker 7: the markets, you know that what happens over days shouldn't 282 00:15:12,080 --> 00:15:12,760 Speaker 7: really concern you. 283 00:15:12,960 --> 00:15:13,640 Speaker 6: That's more of. 284 00:15:13,600 --> 00:15:16,800 Speaker 7: A weeks and months, So you know, let's see what 285 00:15:16,840 --> 00:15:18,280 Speaker 7: happens two months from now. 286 00:15:18,440 --> 00:15:21,480 Speaker 6: Well, the markets, I personally think that the markets. 287 00:15:21,200 --> 00:15:24,440 Speaker 7: Will be much higher in a few months, and I'm 288 00:15:24,480 --> 00:15:27,040 Speaker 7: maybe an eternal optimist, but I do think that this 289 00:15:27,080 --> 00:15:27,800 Speaker 7: isn't going to last. 290 00:15:27,840 --> 00:15:30,440 Speaker 6: This is just very very short term. 291 00:15:30,840 --> 00:15:34,000 Speaker 8: Well, speaking of short term, as you look ahead two months, Congressman, 292 00:15:34,040 --> 00:15:35,840 Speaker 8: I wonder what's going to happen in your chamber in 293 00:15:35,920 --> 00:15:38,800 Speaker 8: just the next two days, because the Speaker would like 294 00:15:38,880 --> 00:15:41,200 Speaker 8: to see a vote on the Senate pass budget blueprint, 295 00:15:41,280 --> 00:15:43,160 Speaker 8: which I know a number of your colleagues in the 296 00:15:43,160 --> 00:15:46,000 Speaker 8: House have taken issue with. Is it your expectation that 297 00:15:46,040 --> 00:15:48,840 Speaker 8: the votes are actually there for that to pass this week? 298 00:15:48,880 --> 00:15:50,640 Speaker 8: And for reconciliation to advance. 299 00:15:51,760 --> 00:15:52,560 Speaker 6: That's a great question. 300 00:15:52,680 --> 00:15:55,920 Speaker 7: We had a conference this morning, and it's going to 301 00:15:55,920 --> 00:15:58,000 Speaker 7: be a challenge. To be very honest, I don't know 302 00:15:58,040 --> 00:15:59,600 Speaker 7: if we're going to have the votes. I hope we do, 303 00:16:00,080 --> 00:16:02,520 Speaker 7: because all this is doing is this is like you said, 304 00:16:02,560 --> 00:16:05,200 Speaker 7: it's a blueprint to move the process forward. 305 00:16:05,200 --> 00:16:06,800 Speaker 6: There will be then a final product. 306 00:16:07,200 --> 00:16:09,480 Speaker 7: I personally would not vote for a final product that 307 00:16:09,520 --> 00:16:13,400 Speaker 7: doesn't have significant cuts in spending because we need to 308 00:16:13,480 --> 00:16:16,280 Speaker 7: work toward balancing a budget moving forward. Considering we have 309 00:16:16,280 --> 00:16:18,960 Speaker 7: a thirty six trillion dollar debt in climbing. We need 310 00:16:19,000 --> 00:16:22,120 Speaker 7: to take a fiscal responsibility seriously, not just on the 311 00:16:22,120 --> 00:16:24,080 Speaker 7: campaign trail, but actually here in Washington, d C. 312 00:16:24,560 --> 00:16:27,040 Speaker 6: So I don't know exactly what's going to happen. 313 00:16:27,080 --> 00:16:29,360 Speaker 7: We'll see, but if we don't, then we're going to 314 00:16:29,400 --> 00:16:32,640 Speaker 7: have to work together and we have to extend the 315 00:16:32,680 --> 00:16:35,440 Speaker 7: Trump tax cuts. We have to have a plan in 316 00:16:35,520 --> 00:16:39,960 Speaker 7: place to go and be a bit more disciplined fiscally, 317 00:16:40,000 --> 00:16:41,840 Speaker 7: and so I hope that we can get there. 318 00:16:43,240 --> 00:16:46,000 Speaker 2: President, writing on Truth Social last night, the House must 319 00:16:46,080 --> 00:16:50,720 Speaker 2: pass this budget resolution and quickly with the caps lock on. Congressman, 320 00:16:51,000 --> 00:16:53,800 Speaker 2: will this actually get out of the Rules Committee to 321 00:16:53,840 --> 00:16:56,640 Speaker 2: get to the floor. That might be the most important 322 00:16:56,720 --> 00:17:00,000 Speaker 2: hurdle here considering some of the Republicans who are concerned 323 00:17:00,040 --> 00:17:02,480 Speaker 2: earned about the level of cuts in this blueprint. 324 00:17:03,720 --> 00:17:05,160 Speaker 7: Well, Joe, what we don't want to do is take 325 00:17:05,160 --> 00:17:07,320 Speaker 7: it to the floor and fail. So we really have 326 00:17:07,400 --> 00:17:08,880 Speaker 7: to count the votes. We have to do the whip 327 00:17:08,920 --> 00:17:12,320 Speaker 7: counts before that happens. And again I hope that it will. 328 00:17:12,359 --> 00:17:14,280 Speaker 7: We're going to hate be having dinner with President Trump 329 00:17:14,320 --> 00:17:17,240 Speaker 7: tonight and we'll be talking about that, and if we 330 00:17:17,320 --> 00:17:19,240 Speaker 7: have it, we'll go forward. But if not, there's always 331 00:17:19,280 --> 00:17:21,080 Speaker 7: going to be a third way. It's not binary with 332 00:17:21,480 --> 00:17:23,320 Speaker 7: it's either pass or fail. There are going to be 333 00:17:23,320 --> 00:17:27,040 Speaker 7: third ways to get to that success. But we have 334 00:17:27,119 --> 00:17:29,560 Speaker 7: to do it together. We have to have currently two 335 00:17:29,640 --> 00:17:32,280 Speaker 7: hundred and seventeen votes to move it forward. 336 00:17:32,400 --> 00:17:34,760 Speaker 6: So again I'm praying that we can do it. 337 00:17:36,560 --> 00:17:38,880 Speaker 8: And finally, Congressman, we just have two minutes left here. 338 00:17:38,880 --> 00:17:41,640 Speaker 8: But given your seats on the Intelligence and Armed Services committees, 339 00:17:41,680 --> 00:17:43,240 Speaker 8: I wonder what you make of the other news we 340 00:17:43,280 --> 00:17:46,280 Speaker 8: got from the President yesterday about direct talks with Aron 341 00:17:46,440 --> 00:17:49,840 Speaker 8: to take place on Saturday. What is your expectation or 342 00:17:49,880 --> 00:17:52,680 Speaker 8: your hope that that conversations will be able to yield. 343 00:17:54,040 --> 00:17:56,800 Speaker 7: You know, I very rarely I'm going to oppose having 344 00:17:56,840 --> 00:18:00,000 Speaker 7: a conversation with another nation state because you know. 345 00:18:00,840 --> 00:18:03,000 Speaker 6: President Trump tried that in his first term with North Korea. 346 00:18:03,080 --> 00:18:05,680 Speaker 7: Really nothing came of it, but I really applauded the 347 00:18:05,720 --> 00:18:10,840 Speaker 7: effort because why not talk with President Reagan said, trust 348 00:18:10,920 --> 00:18:13,640 Speaker 7: but verified. So even if you came to some accord, 349 00:18:14,000 --> 00:18:16,400 Speaker 7: you have to make sure that their actions match their 350 00:18:16,480 --> 00:18:19,479 Speaker 7: rhetoric in the pages that they signed in any kind 351 00:18:19,520 --> 00:18:22,800 Speaker 7: of an agreement or treaty. So I do applaud talking, 352 00:18:23,119 --> 00:18:25,119 Speaker 7: but you know, Iran's on the run. They are not 353 00:18:25,200 --> 00:18:30,320 Speaker 7: strong right now. Israel has decimated, has blowed and decimated Hamas, 354 00:18:30,320 --> 00:18:32,679 Speaker 7: and even President Trump with his latest strike on the 355 00:18:32,680 --> 00:18:38,400 Speaker 7: Houties and Iran losing Syria, they're on their heels. So 356 00:18:38,800 --> 00:18:40,920 Speaker 7: we'll see. It could just be all rhetoric, it could 357 00:18:40,920 --> 00:18:42,640 Speaker 7: be for show, but we'll find out. 358 00:18:44,119 --> 00:18:44,760 Speaker 6: Indeed we will. 359 00:18:44,880 --> 00:18:47,960 Speaker 8: Congressman, thank you so much for your time this afternoon. 360 00:18:47,960 --> 00:18:51,560 Speaker 8: Congressman Pat Fallen, Republican representing Texas's fourth District, live from 361 00:18:51,600 --> 00:18:53,679 Speaker 8: Capitol Hill with us here on Balance of Power on 362 00:18:53,720 --> 00:18:56,119 Speaker 8: Bloomberg TV and Radio, as we track what's happening in 363 00:18:56,160 --> 00:18:59,320 Speaker 8: politics and how it coincides with what's happening in the markets. 364 00:18:59,320 --> 00:19:01,760 Speaker 8: A brief dip lower on the S and P five 365 00:19:01,840 --> 00:19:03,919 Speaker 8: hundred after a rally of as much as four percent. 366 00:19:04,040 --> 00:19:06,120 Speaker 8: Right now we're up just shy are just around twenty 367 00:19:06,200 --> 00:19:08,439 Speaker 8: points up four tens of one percent on the S 368 00:19:08,480 --> 00:19:08,760 Speaker 8: and P. 369 00:19:08,960 --> 00:19:12,760 Speaker 2: Vicks barely budging, and Bitcoin is lower today. It's hard 370 00:19:12,760 --> 00:19:15,040 Speaker 2: to make sense of all of this, but we'll continue 371 00:19:15,280 --> 00:19:18,520 Speaker 2: with our political panel coming up next here on Balance 372 00:19:18,560 --> 00:19:21,000 Speaker 2: of Power. Looks like we're getting another bit under this market. 373 00:19:21,080 --> 00:19:24,120 Speaker 8: Kley, Yeah, we'll see if it lasts. This is Bloomberg 374 00:19:24,160 --> 00:19:27,480 Speaker 8: TV and Radio. 375 00:19:28,560 --> 00:19:32,040 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 376 00:19:32,080 --> 00:19:35,080 Speaker 1: us live weekdays at noon and five pm Eastern on 377 00:19:35,240 --> 00:19:38,520 Speaker 1: Alma Cockley and Android Auto with the Bloomberg Business App. 378 00:19:38,680 --> 00:19:41,880 Speaker 1: Listen on demand wherever you get your podcasts, or watch 379 00:19:42,000 --> 00:19:44,440 Speaker 1: us live on YouTube. 380 00:19:44,640 --> 00:19:46,520 Speaker 2: Thank you for being with us on the Tuesday edition 381 00:19:46,600 --> 00:19:50,280 Speaker 2: here on Bloomberg TV and Radio. The anxiety that's being 382 00:19:50,320 --> 00:19:53,440 Speaker 2: felt over tariffs on Wall Street is being felt here 383 00:19:53,800 --> 00:19:56,520 Speaker 2: in Washington as well, and not only by Democrats, most 384 00:19:56,560 --> 00:19:59,960 Speaker 2: Republicans on Capitol Hill have been behind the Trump administry 385 00:20:00,359 --> 00:20:03,320 Speaker 2: on this. Most who you here join us on balance 386 00:20:03,359 --> 00:20:07,040 Speaker 2: of power speak to the short term pain, long term 387 00:20:07,080 --> 00:20:10,040 Speaker 2: gain aspects of this. But there are some Republicans now 388 00:20:10,080 --> 00:20:12,959 Speaker 2: who are beginning to vocalize their worries. Senator Ted Cruz 389 00:20:13,480 --> 00:20:15,520 Speaker 2: is one of them, referring to Elon Musk as the 390 00:20:15,560 --> 00:20:20,120 Speaker 2: angel on President Trump's shoulder. Tom Tillis, the Republican from 391 00:20:20,160 --> 00:20:23,919 Speaker 2: North Carolina, made his views clear today unless he was 392 00:20:24,000 --> 00:20:26,960 Speaker 2: just Kaylee trying to get tape on himself in case 393 00:20:27,000 --> 00:20:29,840 Speaker 2: the tariffs don't work out, right, we can play this 394 00:20:29,960 --> 00:20:32,760 Speaker 2: back during a campaign. This was part of testimony of 395 00:20:32,800 --> 00:20:36,680 Speaker 2: the US Trade Representative jameson Greer before the Senate Finance Committee. 396 00:20:36,800 --> 00:20:39,280 Speaker 2: Listen to Senator Tillis in. 397 00:20:39,200 --> 00:20:43,160 Speaker 5: This scenario, the decision maker who decided the ala prima approach, 398 00:20:43,200 --> 00:20:47,480 Speaker 5: who has obviously had to have spent time anticipating what 399 00:20:47,520 --> 00:20:49,760 Speaker 5: we saw in the markets and some of the pushback. 400 00:20:50,040 --> 00:20:53,960 Speaker 5: I'm assuming this all got gamed out because it's a 401 00:20:53,960 --> 00:20:54,639 Speaker 5: novel approach. 402 00:20:54,640 --> 00:20:55,600 Speaker 6: It need to be thought out. 403 00:20:55,920 --> 00:20:57,920 Speaker 5: Whose throat do I get to choke if this proves 404 00:20:57,920 --> 00:20:58,480 Speaker 5: to be wrong? 405 00:21:00,240 --> 00:21:04,000 Speaker 8: Yes, that was the quote, whose throat? And you might 406 00:21:04,119 --> 00:21:07,680 Speaker 8: get to chill Well. Jamison Grier kind of reluctantly said, 407 00:21:07,760 --> 00:21:09,600 Speaker 8: you can always look at me or talk to me 408 00:21:09,640 --> 00:21:12,000 Speaker 8: about that service the USTR, but we want to talk 409 00:21:12,040 --> 00:21:14,639 Speaker 8: to our political panel about this. Rick Davis is with 410 00:21:14,720 --> 00:21:17,840 Speaker 8: US Bloomberg Politics contributor and Republican strategists partner at Stone 411 00:21:17,840 --> 00:21:21,240 Speaker 8: Court Capital, alongside Kristen han Today partner at Rock Solutions 412 00:21:21,560 --> 00:21:24,399 Speaker 8: and democratic strategist. Rick, Are we about to see some 413 00:21:24,520 --> 00:21:29,080 Speaker 8: serious Republican on Republican violence, either metaphorically or physically speaking 414 00:21:29,119 --> 00:21:30,400 Speaker 8: over this tariff issue? 415 00:21:31,320 --> 00:21:34,520 Speaker 9: Yeah, I definitely think we're entering the era where there's 416 00:21:34,680 --> 00:21:39,000 Speaker 9: very little anxiety between Democrats and Republicans because Republicans basically 417 00:21:39,040 --> 00:21:43,360 Speaker 9: see this as a win or lose proposition amongst themselves. 418 00:21:43,440 --> 00:21:46,720 Speaker 9: So now the question is between Congress and the administration, 419 00:21:47,200 --> 00:21:49,720 Speaker 9: who's going to pay right? I mean, Donald Trump's a 420 00:21:49,720 --> 00:21:53,359 Speaker 9: decision maker. There's no question that there's not a policy 421 00:21:53,440 --> 00:21:57,040 Speaker 9: making apparatus that includes the Trade rep that's going to 422 00:21:57,080 --> 00:22:01,760 Speaker 9: decide these tariffs. So he can do all the damage 423 00:22:01,800 --> 00:22:05,640 Speaker 9: he wants. But that's like, you know, hitting the fodder, 424 00:22:05,760 --> 00:22:09,920 Speaker 9: not the target. And so the reality is, I think 425 00:22:09,960 --> 00:22:12,879 Speaker 9: you're already starting to see cracks in the congressional armor 426 00:22:13,080 --> 00:22:17,560 Speaker 9: around Donald Trump. And there's legislation in the Senate that 427 00:22:17,880 --> 00:22:22,119 Speaker 9: is bipartisan that would take away some of the leverage 428 00:22:22,160 --> 00:22:25,000 Speaker 9: that Donald Trump has to do these tariffs. And it'll 429 00:22:25,000 --> 00:22:28,080 Speaker 9: be interesting to see how far that goes, because that 430 00:22:28,160 --> 00:22:33,000 Speaker 9: echoes the Senator tell Us' comments, which is, if I 431 00:22:33,200 --> 00:22:35,680 Speaker 9: trust you and don't vote for that measure and take 432 00:22:35,680 --> 00:22:38,320 Speaker 9: it back into my own control, who's going to pay 433 00:22:38,320 --> 00:22:41,280 Speaker 9: the price when I go down in my Senate seat? 434 00:22:42,359 --> 00:22:45,280 Speaker 2: How does this play often? Kristin, I'm guessing you're kind 435 00:22:45,280 --> 00:22:50,359 Speaker 2: of enjoying watching this conversation. Senator Ted Cruz says there 436 00:22:50,359 --> 00:22:54,399 Speaker 2: are angels and demons vying for influence in the White 437 00:22:54,400 --> 00:22:58,119 Speaker 2: House picture. Peter Navarro on one shoulder, Elon Musk on 438 00:22:58,160 --> 00:23:02,080 Speaker 2: the other. Apparently Musk did direc directly appeal to President 439 00:23:02,119 --> 00:23:04,840 Speaker 2: Trump over the weekend to keep the reciprocal tariffs from 440 00:23:04,880 --> 00:23:08,800 Speaker 2: taking effect. It will impact his business at Tesla. Peter 441 00:23:08,880 --> 00:23:11,840 Speaker 2: Navarro says he's not really a car manufacturer, He's an 442 00:23:11,880 --> 00:23:16,239 Speaker 2: auto assembler. How does all of this end. Where's the 443 00:23:16,320 --> 00:23:19,280 Speaker 2: rupture in the administration or in the party that you 444 00:23:19,359 --> 00:23:19,919 Speaker 2: see coming. 445 00:23:21,280 --> 00:23:23,440 Speaker 10: I mean, that's a very good question. Actually we're only 446 00:23:23,480 --> 00:23:27,960 Speaker 10: four months into this administration, if that, and you're kind 447 00:23:27,960 --> 00:23:29,919 Speaker 10: of seeing I mean, you look at what's happening. The 448 00:23:29,960 --> 00:23:32,040 Speaker 10: markets are just one of the things that's happening. But 449 00:23:32,160 --> 00:23:35,880 Speaker 10: you know, I think that the president has been teflon 450 00:23:36,040 --> 00:23:39,159 Speaker 10: for so long, and Republicans in the House, in the 451 00:23:39,240 --> 00:23:42,320 Speaker 10: Senate for the most part, have stood behind him. And 452 00:23:42,760 --> 00:23:46,120 Speaker 10: like you mentioned earlier, the talking point that everybody's using 453 00:23:46,200 --> 00:23:48,440 Speaker 10: right now is that, you know, this is a major 454 00:23:48,520 --> 00:23:52,080 Speaker 10: disruptive policy. We knew that going in. We knew that 455 00:23:52,119 --> 00:23:53,480 Speaker 10: there was going to be pain. You know. 456 00:23:53,520 --> 00:23:54,040 Speaker 6: I think he was. 457 00:23:54,040 --> 00:23:56,800 Speaker 10: Saying, you've got to operate or give medicine or something. 458 00:23:57,720 --> 00:23:59,840 Speaker 10: You know, if you break it, you bought it. But 459 00:24:00,119 --> 00:24:03,040 Speaker 10: you you know, there's you're sitting you're starting to see 460 00:24:03,040 --> 00:24:04,960 Speaker 10: these certain cracks, and I think a lot of people 461 00:24:05,000 --> 00:24:08,880 Speaker 10: are seeing there holding their breath, hoping that the market's 462 00:24:08,960 --> 00:24:13,640 Speaker 10: rally and that you know, the tariffs had their well 463 00:24:13,720 --> 00:24:16,800 Speaker 10: Donald Trump's intended effect. But I think that there's gonna 464 00:24:16,800 --> 00:24:19,560 Speaker 10: be a lot of pain. And you're looking at, you know, 465 00:24:19,640 --> 00:24:23,480 Speaker 10: a country like China, and what is the impact of 466 00:24:23,520 --> 00:24:27,360 Speaker 10: these tariffs going to be on you know, people across 467 00:24:27,359 --> 00:24:32,200 Speaker 10: this country and they're they're buying ability to buy goods 468 00:24:32,200 --> 00:24:35,760 Speaker 10: and services when like it or not, we rely on 469 00:24:35,760 --> 00:24:38,480 Speaker 10: a lot on a lot of cheaper goods that come 470 00:24:38,480 --> 00:24:41,720 Speaker 10: in from China. So you know, people hired Donald Trump 471 00:24:41,800 --> 00:24:46,240 Speaker 10: because they you know, they were they were being squeezed 472 00:24:46,240 --> 00:24:49,720 Speaker 10: by inflation. They couldn't buy things at the grocery store. 473 00:24:50,560 --> 00:24:53,880 Speaker 10: The cost of goods was far too high. But if 474 00:24:53,880 --> 00:24:55,879 Speaker 10: he does stuff to make it worse, I think that 475 00:24:55,960 --> 00:24:58,520 Speaker 10: you will see repercussions at the ballot box. 476 00:25:00,440 --> 00:25:02,360 Speaker 8: I want to go back, Rick to this idea of 477 00:25:02,400 --> 00:25:05,199 Speaker 8: the angel of Elon Musk and the demon of Peter Navarro, 478 00:25:05,240 --> 00:25:07,320 Speaker 8: because they both clearly see each other as villains in 479 00:25:07,400 --> 00:25:11,000 Speaker 8: this story if you judge their public comments about each other, 480 00:25:11,080 --> 00:25:15,840 Speaker 8: including Elon Musk Overnight saying Navarro is truly a moron. 481 00:25:15,920 --> 00:25:18,520 Speaker 8: That is a direct quote, also calling him quote dumber 482 00:25:18,560 --> 00:25:21,560 Speaker 8: than a sack of bricks. The White House Press Secretary 483 00:25:21,640 --> 00:25:24,120 Speaker 8: Caroline Lovett, who was briefing reporters right now, was asked 484 00:25:24,160 --> 00:25:27,280 Speaker 8: about this, and she says, boys will be boys, and 485 00:25:27,320 --> 00:25:30,880 Speaker 8: we will let their public sparring continue. Obviously, Rick, these 486 00:25:30,920 --> 00:25:33,040 Speaker 8: are grown men we are talking about in their fifties 487 00:25:33,080 --> 00:25:36,480 Speaker 8: and seventies respectively, but their public sparring to allow it 488 00:25:36,520 --> 00:25:39,640 Speaker 8: to continue. Does that not undermine the messaging of this administration? 489 00:25:40,920 --> 00:25:41,560 Speaker 2: Yeah, for sure. 490 00:25:41,640 --> 00:25:44,040 Speaker 9: I mean, this is just a cloud that kind of 491 00:25:44,040 --> 00:25:47,680 Speaker 9: sits over the administration's effort to define what they're trying 492 00:25:47,680 --> 00:25:50,879 Speaker 9: to accomplish on tariffs. And if it weren't such a 493 00:25:51,000 --> 00:25:53,760 Speaker 9: dramatic impact, we've seen what's happened to the market since 494 00:25:53,840 --> 00:25:57,680 Speaker 9: the President has marked upon as tariff policy. You don't 495 00:25:57,760 --> 00:26:00,239 Speaker 9: need a lot of noise in the system that's going 496 00:26:00,280 --> 00:26:05,720 Speaker 9: to rankle those markets. And so the fact that one 497 00:26:05,760 --> 00:26:09,439 Speaker 9: of the top advisors to the President, Elon Musk, who 498 00:26:09,920 --> 00:26:12,720 Speaker 9: is also the world's wealthiest man and has two hundred 499 00:26:12,720 --> 00:26:16,720 Speaker 9: and nineteen million followers on his platform x is somehow 500 00:26:16,840 --> 00:26:20,679 Speaker 9: picking a fight with the top trade policy person in 501 00:26:20,720 --> 00:26:21,639 Speaker 9: the White House is. 502 00:26:23,280 --> 00:26:23,800 Speaker 2: Crazy. 503 00:26:23,880 --> 00:26:27,600 Speaker 9: I mean, no other administration would tolerate that. Either they'd 504 00:26:27,600 --> 00:26:29,960 Speaker 9: be told to shut up and go to their neutral corners, 505 00:26:30,160 --> 00:26:33,040 Speaker 9: or somebody would win that fight and the other person 506 00:26:33,080 --> 00:26:36,639 Speaker 9: would be out of the administration. And so the fact 507 00:26:36,680 --> 00:26:40,200 Speaker 9: that this is sort of gumming up what is already 508 00:26:40,200 --> 00:26:44,399 Speaker 9: a challenging message narrative for the administration doesn't help the 509 00:26:44,440 --> 00:26:47,959 Speaker 9: markets either. And so what we see today after you know, 510 00:26:48,080 --> 00:26:51,680 Speaker 9: some optimism that they're going to be deals cut with 511 00:26:51,760 --> 00:26:56,560 Speaker 9: places like Japan and maybe you know, Israel. The Prime 512 00:26:56,560 --> 00:26:59,240 Speaker 9: Minister was in the Oval Office yesterday talking about some 513 00:26:59,359 --> 00:27:04,600 Speaker 9: of these things has been overshadowed by the Boys Will 514 00:27:04,640 --> 00:27:10,040 Speaker 9: be Boys frat party fight in China, basically saying as 515 00:27:10,040 --> 00:27:14,720 Speaker 9: our largest trading partner, stick it. So, I mean, you know, 516 00:27:14,880 --> 00:27:17,560 Speaker 9: I don't know which narrative you like, but neither one 517 00:27:17,560 --> 00:27:21,160 Speaker 9: of those are going to fit a productive political scenario. 518 00:27:22,440 --> 00:27:25,679 Speaker 2: Kristin Kayley mentioned some of the nicer things that Elon 519 00:27:25,800 --> 00:27:29,399 Speaker 2: Musk has said about Peter Navarro on Twitter. A couple 520 00:27:29,440 --> 00:27:32,600 Speaker 2: of his posts were deleted, in fact, because they were 521 00:27:32,600 --> 00:27:35,080 Speaker 2: so offensive. There's one that I could not read on 522 00:27:35,119 --> 00:27:37,760 Speaker 2: the air here if I wanted to keep my job. 523 00:27:38,240 --> 00:27:40,520 Speaker 2: Is this how it ends with Elon Musk? Peter Navarro 524 00:27:40,640 --> 00:27:43,439 Speaker 2: went to jail. I think we could say for Donald Trump, 525 00:27:43,560 --> 00:27:46,919 Speaker 2: I mean, that's pretty loyal when it comes down to 526 00:27:46,920 --> 00:27:48,760 Speaker 2: who's gonna survive this fight? 527 00:27:50,680 --> 00:27:53,359 Speaker 10: Yeah, I mean I think when you talk about Donald Trump, 528 00:27:53,359 --> 00:27:55,280 Speaker 10: I mean we've always talked about how he kind of runs, 529 00:27:56,320 --> 00:27:59,040 Speaker 10: whether it's his business or the White House like a 530 00:27:59,119 --> 00:28:03,439 Speaker 10: mom boss you know, dedication and loyalty seemed to be 531 00:28:03,560 --> 00:28:06,880 Speaker 10: the number one thing he cares about. So we'll see 532 00:28:06,880 --> 00:28:09,080 Speaker 10: who comes out of this fight on top that. I 533 00:28:09,160 --> 00:28:11,359 Speaker 10: totally agree with, Rick Scott. I mean, I mean, I 534 00:28:11,400 --> 00:28:14,520 Speaker 10: didn't think there was anything that could surprise me about 535 00:28:14,520 --> 00:28:17,440 Speaker 10: this administration. But when you see two of the top 536 00:28:17,480 --> 00:28:20,680 Speaker 10: advisors to the president of the United States publicly fighting, 537 00:28:21,880 --> 00:28:26,200 Speaker 10: it's not good for anybody, particularly not their messaging going forward. 538 00:28:26,240 --> 00:28:29,199 Speaker 10: So I guess we'll have to see this What did 539 00:28:29,200 --> 00:28:31,560 Speaker 10: they call it a locker room Maybe that was a 540 00:28:31,560 --> 00:28:34,080 Speaker 10: previous thing they called locker room talk or boys will 541 00:28:34,080 --> 00:28:37,119 Speaker 10: be boys. That's just not a good answer, and frankly 542 00:28:37,160 --> 00:28:39,520 Speaker 10: they should come up with a better solution to this 543 00:28:39,560 --> 00:28:40,280 Speaker 10: little spat. 544 00:28:42,880 --> 00:28:45,280 Speaker 8: Well, Caroline Levitt has had to answer more questions than 545 00:28:45,400 --> 00:28:49,040 Speaker 8: just about this little spat. She was talking about, specifically 546 00:28:49,320 --> 00:28:52,720 Speaker 8: tariffs and US manufacturing being brought back by them. She 547 00:28:52,840 --> 00:28:55,960 Speaker 8: suggested that the president thinks the US has the workforce 548 00:28:56,400 --> 00:28:59,400 Speaker 8: to make iPhones. Rick. This is of course, as we 549 00:28:59,440 --> 00:29:02,480 Speaker 8: consider the supply chains of companies like Apple who left 550 00:29:02,600 --> 00:29:05,360 Speaker 8: China or started to diversify away from China to other 551 00:29:05,400 --> 00:29:08,959 Speaker 8: countries that are also now facing incredibly high interest rates. 552 00:29:09,240 --> 00:29:11,240 Speaker 8: Even if we had the labor supply, do we have 553 00:29:11,280 --> 00:29:13,880 Speaker 8: the desire on the part of the American workforce to 554 00:29:13,920 --> 00:29:16,080 Speaker 8: work in that kind of manufacturing. Is there not a 555 00:29:16,120 --> 00:29:19,120 Speaker 8: reason why it was outsourced to other countries aside from 556 00:29:19,120 --> 00:29:20,680 Speaker 8: just the cheapness of that labor. 557 00:29:21,840 --> 00:29:25,440 Speaker 9: Yeah. Look, I mean, you're almost at full employment in 558 00:29:25,440 --> 00:29:28,560 Speaker 9: the United States, So where you're finding thousands of workers 559 00:29:28,600 --> 00:29:30,920 Speaker 9: who are going to go into a factory and assemble 560 00:29:31,840 --> 00:29:35,920 Speaker 9: iPhones and things like that, it would be a challenge. 561 00:29:36,000 --> 00:29:39,720 Speaker 9: And the fact is that none of those things can 562 00:29:39,760 --> 00:29:44,320 Speaker 9: happen overnight. I think conservatively they're talking years to be 563 00:29:44,400 --> 00:29:49,480 Speaker 9: able to recreate the manufacturing and forget about the supply chain, 564 00:29:49,560 --> 00:29:53,520 Speaker 9: because the supply chain that all the parts and materials 565 00:29:53,560 --> 00:29:56,880 Speaker 9: and technology that goes into an iPhone is also built 566 00:29:57,200 --> 00:29:59,880 Speaker 9: in China. And so where's that supply chain going to 567 00:30:00,080 --> 00:30:04,920 Speaker 9: come from? Because we're ill equipped to start manufacturing the 568 00:30:05,040 --> 00:30:07,959 Speaker 9: kind of components that go into these kinds of units. 569 00:30:08,040 --> 00:30:11,320 Speaker 9: Why because they're done much cheaper in other markets. So 570 00:30:12,240 --> 00:30:14,840 Speaker 9: I think a lot of this talk about how we're 571 00:30:14,840 --> 00:30:18,320 Speaker 9: going to bring back manufacturing in the United States needs 572 00:30:18,360 --> 00:30:22,320 Speaker 9: to be accompanied with what kind of manufacturing are we 573 00:30:22,440 --> 00:30:24,960 Speaker 9: really going to become the low cost producer in the world. 574 00:30:25,280 --> 00:30:28,280 Speaker 9: Of course not, and we don't want to be because 575 00:30:28,320 --> 00:30:32,880 Speaker 9: we aspire to better things for workers in America than 576 00:30:33,160 --> 00:30:36,040 Speaker 9: you know, a sweatshop. So I mean, the reality is, 577 00:30:36,760 --> 00:30:39,760 Speaker 9: when you really open up the Pandora's box on this 578 00:30:39,920 --> 00:30:42,640 Speaker 9: kind of rhetoric, you really wonder what it is we're 579 00:30:42,680 --> 00:30:47,440 Speaker 9: trying to accomplish. Good jobs, high paying jobs, you know, 580 00:30:47,480 --> 00:30:52,520 Speaker 9: technical jobs that would encourage people to get better educations. Yes, 581 00:30:52,600 --> 00:30:54,560 Speaker 9: those are the things we're looking for here in the US. 582 00:30:56,400 --> 00:30:59,320 Speaker 2: Rick Davis, Stone, Core Capital, Kristen Hahn, Rock Solutions are 583 00:30:59,400 --> 00:31:02,680 Speaker 2: great panel. As Howard Lutnik said on CBS Sunday Morning, 584 00:31:02,680 --> 00:31:05,280 Speaker 2: the army of millions of human beings screwing in little 585 00:31:05,320 --> 00:31:08,440 Speaker 2: screws to make iPhones, Kayley, the kind of thing that's 586 00:31:08,480 --> 00:31:11,720 Speaker 2: going to come to America. We'll see about that much 587 00:31:11,760 --> 00:31:14,320 Speaker 2: more ahead here on Bloomberg. Stay with us on Balance 588 00:31:14,320 --> 00:31:15,680 Speaker 2: of Power Live from Washington. 589 00:31:17,840 --> 00:31:21,360 Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch 590 00:31:21,400 --> 00:31:24,240 Speaker 1: us live weekdays at noon and five pm E's durn 591 00:31:24,400 --> 00:31:27,800 Speaker 1: on Apple, Cocklay and Android Auto with the Bloomberg Business app. 592 00:31:27,880 --> 00:31:30,880 Speaker 1: You can also listen live on Amazon Alexa from our 593 00:31:30,920 --> 00:31:36,120 Speaker 1: flagship New York station, Just say Alexa play Bloomberg eleven thirty. 594 00:31:36,920 --> 00:31:39,280 Speaker 8: The current Treasury Secretary has just hit us with a 595 00:31:39,280 --> 00:31:43,560 Speaker 8: fresh post on X about these tariffs, Joe Scott Bessen 596 00:31:43,680 --> 00:31:46,000 Speaker 8: saying President Trump's end goal is bringing back jobs and 597 00:31:46,080 --> 00:31:50,040 Speaker 8: manufacturing to the United States, raising wages, increasing revenue, and 598 00:31:50,120 --> 00:31:52,480 Speaker 8: reviving the American dream. He goes on to say that 599 00:31:52,520 --> 00:31:55,360 Speaker 8: what they're trying to do is quote right, the wrongs 600 00:31:55,440 --> 00:31:57,880 Speaker 8: of long standing global trade imbalances. 601 00:31:57,960 --> 00:32:01,120 Speaker 2: That's right, different than raising redue, for instance, to pay 602 00:32:01,160 --> 00:32:03,760 Speaker 2: for tax cuts. As we seem to get together every 603 00:32:03,840 --> 00:32:06,480 Speaker 2: day here Kayley, to figure out which one it is, 604 00:32:06,880 --> 00:32:09,160 Speaker 2: what is the drive and maybe it's a combination. There 605 00:32:09,600 --> 00:32:13,880 Speaker 2: they're in de baseline tariffs stay in place, generating that 606 00:32:13,920 --> 00:32:17,320 Speaker 2: ten percent to help fill coffers in the US, and 607 00:32:17,360 --> 00:32:22,520 Speaker 2: we use reciprocal for negotiations. All of these questions are unanswered. 608 00:32:22,000 --> 00:32:24,160 Speaker 8: Well, and there are questions that we have as well. 609 00:32:24,200 --> 00:32:27,040 Speaker 8: For Greta Pisch, partner at Wiley Ryan, former General counsel 610 00:32:27,080 --> 00:32:29,200 Speaker 8: at the Office of the US Trade Representative, who is 611 00:32:29,240 --> 00:32:32,560 Speaker 8: joining us now here on Bloomberg TV and Radio. Greta, 612 00:32:32,600 --> 00:32:35,880 Speaker 8: when we consider the prospects of this being a revenue raiser, 613 00:32:35,880 --> 00:32:38,840 Speaker 8: if at least in part that is what the objective 614 00:32:39,080 --> 00:32:42,680 Speaker 8: is here, to what extent will any revenue gains be 615 00:32:42,840 --> 00:32:46,800 Speaker 8: offset by just lower trade between the US and its 616 00:32:46,840 --> 00:32:50,040 Speaker 8: trading partners, Because we've heard from many economic minds that 617 00:32:50,120 --> 00:32:52,600 Speaker 8: it is expected that the actual volume of that trade 618 00:32:52,640 --> 00:32:55,160 Speaker 8: will go down and that impacts the overall number you 619 00:32:55,160 --> 00:32:55,640 Speaker 8: could bring in. 620 00:32:55,720 --> 00:33:01,840 Speaker 11: Right, Yes, that's exactly right. As you raise the tariff, 621 00:33:02,040 --> 00:33:05,640 Speaker 11: you would expect demand for imports to go down, and 622 00:33:05,680 --> 00:33:08,160 Speaker 11: in fact, that's what the administration says that in part, 623 00:33:08,200 --> 00:33:11,360 Speaker 11: that's what they want to do by creating incentives to 624 00:33:11,440 --> 00:33:17,840 Speaker 11: move manufacturing here. So if your primary objective is revenue raising, 625 00:33:18,040 --> 00:33:20,720 Speaker 11: what you may want to do is have a relatively 626 00:33:20,760 --> 00:33:23,880 Speaker 11: lower tariff on a broader base of imports, which sort 627 00:33:23,880 --> 00:33:26,760 Speaker 11: of sounds like that ten percent base that they've already 628 00:33:26,760 --> 00:33:31,960 Speaker 11: put in place that came into effect on Saturday. Higher tariffs, 629 00:33:32,000 --> 00:33:35,440 Speaker 11: of course, are going to drive import volumes down and 630 00:33:35,720 --> 00:33:37,719 Speaker 11: ultimately lead to less revenue collection. 631 00:33:39,480 --> 00:33:42,480 Speaker 2: We heard from the US Trade Representative Jameison Greer in 632 00:33:42,520 --> 00:33:45,040 Speaker 2: testimony earlier today. Has got two days worth today in 633 00:33:45,080 --> 00:33:49,080 Speaker 2: the Senate where he spoke with Senator Bennett Michael Bennett 634 00:33:49,120 --> 00:33:52,160 Speaker 2: of Colorado about the impact of these tariffs. 635 00:33:52,200 --> 00:33:56,080 Speaker 12: Let's listen, what is that the American people should expect 636 00:33:56,120 --> 00:33:58,880 Speaker 12: to be able to suffer as a result in terms 637 00:33:58,920 --> 00:33:59,960 Speaker 12: of rising prices. 638 00:34:00,040 --> 00:34:02,680 Speaker 13: I think there's not really a one to one on 639 00:34:02,760 --> 00:34:05,920 Speaker 13: tariffs and price effects, and so many things go go 640 00:34:06,000 --> 00:34:08,440 Speaker 13: into price I know you think I'm probably like dodging 641 00:34:08,440 --> 00:34:11,000 Speaker 13: and weaving on this. Well, but I'm looking at data. 642 00:34:11,120 --> 00:34:13,200 Speaker 12: I know you're smart enough to know that the likelihood 643 00:34:13,280 --> 00:34:15,000 Speaker 12: is that prices are going to go up for the 644 00:34:15,000 --> 00:34:18,120 Speaker 12: American people as a result of the tariffs. 645 00:34:19,440 --> 00:34:22,480 Speaker 2: Was he dodging and weaving there? I'm trying to understand 646 00:34:23,040 --> 00:34:25,440 Speaker 2: where the administration is on this because we hear a 647 00:34:25,520 --> 00:34:29,160 Speaker 2: lot about a one time impact. Wall Street's factoring in 648 00:34:29,239 --> 00:34:30,520 Speaker 2: it looks like a lot worse. 649 00:34:32,640 --> 00:34:35,160 Speaker 11: Well, you know, it isn't so much a dodge and 650 00:34:35,200 --> 00:34:38,319 Speaker 11: weave in the fact that you know, inflation has a 651 00:34:38,360 --> 00:34:42,320 Speaker 11: lot of components that go into it. It's a macroeconomic 652 00:34:42,400 --> 00:34:45,200 Speaker 11: indicator that isn't just driven by tariffs, and in fact, 653 00:34:45,239 --> 00:34:48,280 Speaker 11: often it's it's something else going on the labor market, 654 00:34:48,960 --> 00:34:53,920 Speaker 11: supply demand. In the past, you know, we haven't seen 655 00:34:54,360 --> 00:34:57,919 Speaker 11: tariffs drive inflation, even in the first Trump administration when 656 00:34:58,000 --> 00:35:00,600 Speaker 11: tariffs went up quite a bit on Hi and that 657 00:35:00,680 --> 00:35:02,399 Speaker 11: felt like a lot at the time. Of course, now 658 00:35:02,440 --> 00:35:06,640 Speaker 11: what we're talking about is much bigger. That action did 659 00:35:06,680 --> 00:35:11,279 Speaker 11: not cause inflation or other tariffs that have been put 660 00:35:11,320 --> 00:35:15,239 Speaker 11: in place in the Trump administration and other administrations. We 661 00:35:15,320 --> 00:35:18,880 Speaker 11: just don't usually think of tariffs as being an inflation driver. 662 00:35:20,000 --> 00:35:23,520 Speaker 11: This is a big experiment of a much larger trade 663 00:35:23,560 --> 00:35:26,160 Speaker 11: action than we've ever seen. So in part, we'll have 664 00:35:26,200 --> 00:35:28,000 Speaker 11: to wait and see and how it interacts with other 665 00:35:28,120 --> 00:35:31,560 Speaker 11: parts of the economy. But I think his comment is 666 00:35:31,640 --> 00:35:35,279 Speaker 11: valid in the sense of looking back at how we 667 00:35:35,400 --> 00:35:38,720 Speaker 11: usually think about tariffs and their magnitude and their impact 668 00:35:38,760 --> 00:35:41,520 Speaker 11: on the economy. It is a bit complicated as to 669 00:35:41,600 --> 00:35:44,600 Speaker 11: how they get bigged into prices and what their effect is. 670 00:35:46,080 --> 00:35:49,080 Speaker 8: Well, I'd like to talk about one specific magnitude of 671 00:35:49,080 --> 00:35:51,440 Speaker 8: tariffs on one of our trading partners, GRETA, and that 672 00:35:51,520 --> 00:35:54,400 Speaker 8: is China, because in addition to the twenty percent tariffs 673 00:35:54,400 --> 00:35:57,719 Speaker 8: that have already been put into place to combat what 674 00:35:57,880 --> 00:36:00,600 Speaker 8: the White House argues as the trade of fentanyl, and 675 00:36:00,640 --> 00:36:03,080 Speaker 8: thirty four percent in terms of the reciprocal tariff rate 676 00:36:03,160 --> 00:36:05,960 Speaker 8: it was already intending to impose at midnight tonight. The 677 00:36:05,960 --> 00:36:08,080 Speaker 8: White House has confirmed today it is going ahead with 678 00:36:08,120 --> 00:36:11,640 Speaker 8: that additional fifty percent tariff on Chinese goods, bringing the 679 00:36:11,680 --> 00:36:15,759 Speaker 8: effective rate to one hundred and four percent. With a 680 00:36:15,880 --> 00:36:19,240 Speaker 8: level that high GRETA, what is realistically going to happen 681 00:36:19,400 --> 00:36:22,200 Speaker 8: with the trade relationship between the US and China and 682 00:36:22,239 --> 00:36:23,040 Speaker 8: the flow of goods? 683 00:36:24,840 --> 00:36:26,000 Speaker 6: Well, like all of. 684 00:36:25,960 --> 00:36:28,480 Speaker 11: These tariffs, you know, I think the big question is 685 00:36:28,760 --> 00:36:30,360 Speaker 11: what is the endgame? 686 00:36:30,640 --> 00:36:31,160 Speaker 3: What is the. 687 00:36:31,120 --> 00:36:36,080 Speaker 11: Administration attempting to achieve with these tariffs? And it may 688 00:36:36,120 --> 00:36:38,920 Speaker 11: be different and likely is a bit different with respect 689 00:36:39,000 --> 00:36:43,120 Speaker 11: to China than with respect to other trading partners, But 690 00:36:43,200 --> 00:36:47,160 Speaker 11: I think a question here is is this about decoupling 691 00:36:47,360 --> 00:36:52,719 Speaker 11: from China? Is it to increase leverage to have a negotiation, 692 00:36:52,800 --> 00:36:55,360 Speaker 11: which it seems like at times the President may have 693 00:36:56,080 --> 00:37:01,000 Speaker 11: alluded to. Those are very different outcomes, and China is 694 00:37:01,040 --> 00:37:03,479 Speaker 11: going to have its own as every trading partner has 695 00:37:03,560 --> 00:37:09,279 Speaker 11: its own prerogatives and its own domestic economic and political 696 00:37:09,760 --> 00:37:13,080 Speaker 11: imperatives that it has to answer to. And so I 697 00:37:13,080 --> 00:37:17,560 Speaker 11: think at this point we don't fully understand what the 698 00:37:18,160 --> 00:37:22,799 Speaker 11: administration's strategy with the President is hoping to achieve with 699 00:37:22,880 --> 00:37:26,520 Speaker 11: this further increase in tariff, But you know, I think 700 00:37:26,520 --> 00:37:30,120 Speaker 11: it's certainly going to be a consequential action and potential 701 00:37:30,200 --> 00:37:32,080 Speaker 11: discussions with China going forward. 702 00:37:33,120 --> 00:37:36,840 Speaker 2: Does the US Trade Representative's Office model this maybe in 703 00:37:36,920 --> 00:37:39,759 Speaker 2: conjunction now with the Secretary of Commerce to kind of 704 00:37:39,760 --> 00:37:42,160 Speaker 2: play this out to see what it is we're actually 705 00:37:42,200 --> 00:37:45,040 Speaker 2: asking for. When you hear Howard Lutnik talk about iPhones 706 00:37:45,120 --> 00:37:48,360 Speaker 2: being assembled in the US, once again, we heard from 707 00:37:48,640 --> 00:37:50,920 Speaker 2: Dan ives On that the analyst said that would mean 708 00:37:50,960 --> 00:37:55,279 Speaker 2: basically a three thousand dollars iPhone where it becomes the 709 00:37:55,320 --> 00:37:59,799 Speaker 2: line of diminishing returns when decisions like this are being made. 710 00:38:01,680 --> 00:38:04,680 Speaker 11: I mean, it's a great question, and again we don't 711 00:38:04,719 --> 00:38:07,239 Speaker 11: know what's in the mind of the administration and the 712 00:38:07,280 --> 00:38:10,640 Speaker 11: President and what they're hoping to achieve with these tariffs 713 00:38:10,640 --> 00:38:15,120 Speaker 11: and negotiations. Just a few minutes ago, the Press Secretary 714 00:38:15,200 --> 00:38:19,520 Speaker 11: Caroline Lovett said that the President was directing members of 715 00:38:19,600 --> 00:38:23,080 Speaker 11: the trade team to come up with Taylor made deals 716 00:38:23,200 --> 00:38:27,440 Speaker 11: for trading partners that are unique with respect to the 717 00:38:27,920 --> 00:38:32,560 Speaker 11: trade relationship imports, exports, the barriers in each of those markets. 718 00:38:33,440 --> 00:38:39,319 Speaker 11: So that indicates that you know, it may be a 719 00:38:39,400 --> 00:38:42,680 Speaker 11: different scenario for each and every one of this over 720 00:38:42,680 --> 00:38:46,279 Speaker 11: one hundred trading partners. But again we don't have a 721 00:38:46,320 --> 00:38:50,279 Speaker 11: clear sense of what the ask is and what the 722 00:38:50,520 --> 00:38:52,279 Speaker 11: end state is. You know, where do they want to 723 00:38:52,280 --> 00:38:55,080 Speaker 11: be in nine months, in eighteen months, what do they 724 00:38:55,120 --> 00:38:56,880 Speaker 11: want the tariffs to look like, and what do they 725 00:38:56,880 --> 00:38:59,319 Speaker 11: want the results of any negotiations to be. 726 00:39:01,280 --> 00:39:03,759 Speaker 8: And finally, Greta, in our final moments with you, given 727 00:39:03,760 --> 00:39:07,560 Speaker 8: that you were general counsel at the USTRD, do you 728 00:39:07,640 --> 00:39:11,040 Speaker 8: have any hesitations around the actual legal mechanisms with which 729 00:39:11,320 --> 00:39:14,400 Speaker 8: President Trump is acting to enact these tariffs, because there 730 00:39:14,400 --> 00:39:17,480 Speaker 8: are now movements in Congress toward kind of resting back 731 00:39:17,560 --> 00:39:21,840 Speaker 8: congressional authority through resolution to exert that Article one privilege 732 00:39:21,920 --> 00:39:24,560 Speaker 8: to actually be the ones in charge of tariff policy. 733 00:39:24,600 --> 00:39:26,800 Speaker 8: But how would all of this stand up in court? 734 00:39:28,920 --> 00:39:32,840 Speaker 11: Well, Congress certainly has the ability to take action to 735 00:39:34,080 --> 00:39:38,240 Speaker 11: counteract or address the trade policies that have been enacted 736 00:39:38,600 --> 00:39:42,040 Speaker 11: by the President so far. And yes, there are also 737 00:39:42,160 --> 00:39:47,360 Speaker 11: rumors or in even one case that's been filed to 738 00:39:47,440 --> 00:39:49,400 Speaker 11: challenge some of the tariffs that have been put in 739 00:39:49,440 --> 00:39:53,520 Speaker 11: place since President Trump came into office. But I think 740 00:39:53,520 --> 00:39:56,680 Speaker 11: there's a lot of question marks there. He is stretching 741 00:39:57,280 --> 00:40:04,040 Speaker 11: these authorities in new ways and them in a magnitude 742 00:40:04,080 --> 00:40:09,920 Speaker 11: that hasn't been attempted before. But and so we just 743 00:40:09,960 --> 00:40:11,680 Speaker 11: don't know what the courts are going to do with that, 744 00:40:11,760 --> 00:40:14,400 Speaker 11: and whether any of these challenges will be successful. But 745 00:40:14,440 --> 00:40:18,000 Speaker 11: I would just say that even if the courts are successful, 746 00:40:18,239 --> 00:40:21,520 Speaker 11: or even if litigants are successful and challenging some of 747 00:40:21,520 --> 00:40:24,200 Speaker 11: the actions that have been taken place so far, the 748 00:40:24,239 --> 00:40:27,000 Speaker 11: president has other tools and authorities that can be used 749 00:40:27,560 --> 00:40:32,319 Speaker 11: to put tariffs in place. So you know he is 750 00:40:32,640 --> 00:40:35,279 Speaker 11: committed to this policy. It would seem he thinks that 751 00:40:35,600 --> 00:40:39,640 Speaker 11: tariffs are effective in addressing these issues, and he'll find 752 00:40:39,640 --> 00:40:40,359 Speaker 11: a way to do it. 753 00:40:41,800 --> 00:40:45,520 Speaker 2: Greta pises Swiley Ryan, former General Counsel the Office of 754 00:40:45,560 --> 00:40:53,479 Speaker 2: the ust Are Greta many thanks for the conversation. Thanks 755 00:40:53,520 --> 00:40:56,640 Speaker 2: for listening to the Balance of Power podcast. Make sure 756 00:40:56,680 --> 00:40:59,520 Speaker 2: to subscribe if you haven't already an Apple, Spotify, or 757 00:40:59,600 --> 00:41:02,520 Speaker 2: Worthy get your podcasts and you can find us live 758 00:41:02,640 --> 00:41:06,400 Speaker 2: every weekday from Washington, DC at noontime Eastern at Bloomberg 759 00:41:06,480 --> 00:41:07,160 Speaker 2: dot com.