WEBVTT - US Inflation Eases, Offering Some Relief Ahead of Tariffs 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:12.680 This is Bloomberg Business Week Insight from the reporters and 0:00:12.800 --> 0:00:16.800 editors that bring you America's most trusted business magazine, plus 0:00:17.000 --> 0:00:20.799 global business, finance and tech news. The Bloomberg Business Week 0:00:20.840 --> 0:00:25.760 Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio. 0:00:27.040 --> 0:00:29.160 We do want to kick off this hour with Moran. 0:00:29.400 --> 0:00:34.040 Today's inflation print. US consumer prices rose at the slowest pace. 0:00:33.840 --> 0:00:34.520 In four months. 0:00:34.560 --> 0:00:37.080 That was in the month of February, offering some reprieve 0:00:37.159 --> 0:00:40.640 ahead of tariffs that are expected to drive costs higher 0:00:40.680 --> 0:00:43.240 here in the United States. The BLS saying nearly half 0:00:43.280 --> 0:00:46.159 of the advance though in the overall measure in February 0:00:46.280 --> 0:00:49.360 was due to shelter costs, but it is still decelerating 0:00:49.440 --> 0:00:51.400 from the prior month. So we wanted to get more 0:00:51.440 --> 0:00:53.440 on the print, and we've got a great person to 0:00:53.479 --> 0:00:54.040 do just that. 0:00:54.240 --> 0:00:56.720 We're back with us as Bloomberg Economics US economist store 0:00:56.760 --> 0:00:59.360 Paul he joins us here in any Bloomberg Business Week 0:00:59.440 --> 0:01:02.600 studio a good inflation read. Is there a big caveat here, 0:01:02.640 --> 0:01:06.800 Stuart that it's came before the tariffs have really kicked in. 0:01:06.880 --> 0:01:09.720 That's the first caveat. Yes, they came before most of 0:01:09.720 --> 0:01:12.400 the tariffs kicked in. We get the big retaliatory tariffs 0:01:12.440 --> 0:01:14.679 on April second. Of course Trump doesn't want to do 0:01:14.720 --> 0:01:17.520 it on April Fool's Day. I think that the other 0:01:17.600 --> 0:01:20.080 thing to keep in mind with this report is that 0:01:21.040 --> 0:01:26.000 most of the disinflation came from things like core services 0:01:26.600 --> 0:01:31.039 excluding shelter, some of the supercore services indexes, things like airfares, 0:01:31.080 --> 0:01:34.680 where there was a big seasonal factor dragging down airfares. 0:01:34.959 --> 0:01:37.560 Now we know the demand for air travel hasn't been 0:01:37.840 --> 0:01:41.240 super robust. We heard guidance from Delta. We also could 0:01:41.280 --> 0:01:43.400 just see the TSA numbers. But when you have such 0:01:43.400 --> 0:01:47.160 a big seasonal factor in play accounting for so much 0:01:47.160 --> 0:01:49.920 of the month to month disinflation, I sort of discount 0:01:49.920 --> 0:01:53.160 today's reading. And then beyond that, we do have goods 0:01:53.320 --> 0:01:58.720 core goods excluding autos and including autos boosting inflation both 0:01:58.720 --> 0:02:02.800 headline and core. When you have core goods boosting inflation 0:02:02.840 --> 0:02:05.160 as opposed to providing a minor amount of drag, which 0:02:05.160 --> 0:02:07.960 it typically does, we should be a little bit concerned. 0:02:08.360 --> 0:02:11.360 Add on top of that, used auto prices continuing to 0:02:11.440 --> 0:02:14.200 rise during the month and when you think about auto 0:02:14.320 --> 0:02:18.600 supply chains and auto manufacturing and tariffs coming against Canada 0:02:18.639 --> 0:02:20.800 and Mexico, you have to be a little bit concerned. 0:02:21.280 --> 0:02:22.800 Add on top of all of that. 0:02:23.120 --> 0:02:24.600 Final a lot of additions. 0:02:24.600 --> 0:02:25.520 I'm just going to point. 0:02:25.320 --> 0:02:29.760 Out somehow I go deep into the details and I 0:02:29.760 --> 0:02:32.720 always find, you know, the opposite of a silver lining. 0:02:32.960 --> 0:02:35.240 But the one final one that I would point out 0:02:35.280 --> 0:02:38.800 is that inflation actually became more pervasive. If you count 0:02:38.840 --> 0:02:42.359 the number of core spending line items that are seeing 0:02:42.400 --> 0:02:47.600 excessive inflation right now. Disinflation and deflation became less pervasive 0:02:47.680 --> 0:02:50.320 during the month. So again there are a lot of 0:02:50.360 --> 0:02:52.760 caveats that we actually have to keep in mind when 0:02:52.800 --> 0:02:54.560 we look at this report. It's going to be a 0:02:54.560 --> 0:02:58.160 really long last mile to the FEDS two percent inflation target. 0:02:58.320 --> 0:03:01.760 Is that why initially I think we saw yields back off, 0:03:01.800 --> 0:03:04.120 but we've moved off. I know we had also had 0:03:04.120 --> 0:03:07.120 a treasury auction today, but you've got what a tenure 0:03:07.200 --> 0:03:10.240 right now yielding almost four thirty four point twenty nine, 0:03:10.280 --> 0:03:11.799 and I'm looking at the sure end of the yell curve. 0:03:11.840 --> 0:03:13.680 Of course, most sensitive to what we might get from 0:03:13.680 --> 0:03:16.079 the Fed three ninety seven So is that why. 0:03:15.960 --> 0:03:18.080 We are seeing yield high or what's your thinking that. 0:03:18.200 --> 0:03:19.639 There was a little bit of a treat in rate 0:03:19.720 --> 0:03:23.040 cut bets. We did see a full three cuts for 0:03:23.120 --> 0:03:26.400 the year priced as of last night today after the 0:03:26.400 --> 0:03:29.560 CPI report, we got just about, you know, sixty eight 0:03:29.600 --> 0:03:32.400 basis points or just a touch under three cuts fully priced. 0:03:32.400 --> 0:03:34.280 And I think that that's a part of it. Looking 0:03:34.320 --> 0:03:36.320 at some of the details of this report, it's not 0:03:36.520 --> 0:03:39.680 the most inspiring report, and when we had tariffs coming 0:03:39.960 --> 0:03:42.520 while we have goods adding to inflation, it could be 0:03:42.560 --> 0:03:43.440 a little bit of a problem. 0:03:43.520 --> 0:03:46.600 Was the market reaction to this report incorrect in your view? 0:03:46.760 --> 0:03:47.960 The equity market reaction. 0:03:48.560 --> 0:03:49.960 Look, I mean it's going to be tough for a 0:03:50.000 --> 0:03:53.040 classically trained economist to say that the market is wrong. 0:03:52.960 --> 0:03:55.480 But are allowed to comment. 0:03:55.640 --> 0:03:57.680 We're giving you these is that because the market is 0:03:57.720 --> 0:03:58.200 never wrong. 0:03:58.320 --> 0:04:01.440 I the market is never wrung. I think that the 0:04:01.480 --> 0:04:04.680 retreat in rate cut bets is probably the right move. 0:04:05.080 --> 0:04:06.640 I think that when you start looking at equities, you 0:04:06.680 --> 0:04:09.160 have other things that are in play, including earning's guidance 0:04:09.200 --> 0:04:09.560 and so on. 0:04:09.760 --> 0:04:12.960 So is the Fed fed beating next week right second 0:04:13.000 --> 0:04:17.000 of the year? Is their job getting more difficult based 0:04:17.000 --> 0:04:19.800 on what you say, all these caveats in the inflation 0:04:20.000 --> 0:04:22.480 print reminds us that inflation it ain't over. And then 0:04:22.520 --> 0:04:24.280 you've got tariffs being loaded on. 0:04:24.400 --> 0:04:25.520 So are they in a. 0:04:25.440 --> 0:04:27.559 Tricky spot At the same time we do see signs 0:04:27.560 --> 0:04:28.360 of growth slowing down. 0:04:28.440 --> 0:04:29.960 Yeah, so the FED is in a tricky spot. 0:04:30.040 --> 0:04:32.719 Tariffs make it especially difficult for the FED to achieve 0:04:32.760 --> 0:04:34.760 its dual mandate because you have two things that are 0:04:34.760 --> 0:04:38.440 going on. You have upward inflation pressures that are coming 0:04:38.480 --> 0:04:41.560 from input costs as a consequence of the tariffs. But 0:04:42.760 --> 0:04:46.560 a sort of rebalancing of the economy that comes with 0:04:46.600 --> 0:04:50.320 the implementation of tariffs can be demand destructive. So the 0:04:50.400 --> 0:04:52.760 extent to which those higher input costs can then get 0:04:52.800 --> 0:04:56.480 passed the long to consumer prices isn't abundantly clear quite yet, 0:04:56.839 --> 0:04:58.880 and we know that firms are going to try to 0:04:58.880 --> 0:05:01.040 pass along those costs. Question is just how much to 0:05:01.120 --> 0:05:02.160 man destruction there is. 0:05:02.560 --> 0:05:06.120 You mentioned the airlines, the disinflation that we saw in 0:05:06.120 --> 0:05:08.000 the airlines and the numbers today when it comes to 0:05:08.040 --> 0:05:10.960 airline comes to airline prices. We saw that play out 0:05:11.080 --> 0:05:16.320 yesterday with the market reaction to Delta and American airlines 0:05:16.360 --> 0:05:20.680 coming out and updating their guidance because of soft consumer demand. 0:05:21.160 --> 0:05:23.200 Given everything that we've seen just in the last couple 0:05:23.279 --> 0:05:26.160 of weeks, in your view, how's the consumer doing? 0:05:26.240 --> 0:05:27.440 How is the economy doing? 0:05:27.880 --> 0:05:30.680 We do see higher prices weighing on consumers. We do 0:05:30.720 --> 0:05:34.320 see it in discretionary spending categories. One thing that was 0:05:34.400 --> 0:05:37.919 especially difficult to judge starting in January was the effect 0:05:37.960 --> 0:05:41.240 of weather. Consumers did pull back across the board, But 0:05:41.279 --> 0:05:43.240 one of the reasons why spending was so terrible in 0:05:43.279 --> 0:05:45.760 the month of January is because auto sales were down. 0:05:46.200 --> 0:05:49.799 Nobody wants to spend their time walking on auto dealer's lot. 0:05:49.720 --> 0:05:50.480 During a polar war. 0:05:50.520 --> 0:05:54.480 Attax auto numbers were back up in February, and we 0:05:54.520 --> 0:05:57.440 can expect to see some improvement in retail sales that'll 0:05:57.440 --> 0:06:01.720 come on Monday. Still sharpening our pencils, but overall, it 0:06:01.720 --> 0:06:03.560 does look like consumers are pulling. 0:06:03.320 --> 0:06:04.240 Back quite a little bit. 0:06:04.360 --> 0:06:08.800 We do see credit card default auto loan defaults all 0:06:08.839 --> 0:06:12.120 on the rise, and for that reason, we should expect 0:06:12.120 --> 0:06:15.320 consumers to show a little bit more precautionary savings in 0:06:15.320 --> 0:06:19.400 the months ahead. And when you see consumer consumer sentiment 0:06:19.680 --> 0:06:22.520 and buying plans retreating, you would expect that to be 0:06:22.600 --> 0:06:24.599 reflected in subsequent months and actual spend. 0:06:24.800 --> 0:06:26.440 We are going to talk at the end of this 0:06:26.520 --> 0:06:28.359 hour about the wealth effect, and I am curious if 0:06:28.400 --> 0:06:30.159 you guys are also you and the team sharpening your 0:06:30.160 --> 0:06:33.080 pencils over the idea that with all the volatility that 0:06:33.120 --> 0:06:36.200 we're seeing in the equity markets and stocks pulling back, 0:06:36.680 --> 0:06:39.440 you know, fairly dramatically here in twenty twenty five, that 0:06:39.520 --> 0:06:42.120 for those who are the wealthiest sect of our economy, 0:06:42.200 --> 0:06:45.960 who spend a lot in our economy, there are some 0:06:46.000 --> 0:06:48.560 concerns about that having an economic impact. 0:06:48.800 --> 0:06:51.200 That's right, So of course there is a wealth effect 0:06:51.240 --> 0:06:55.440 that works in both directions. Right, So for every additional 0:06:55.480 --> 0:06:58.080 dollar and accumulated wealth, you could expect a few cents 0:06:58.080 --> 0:07:01.320 of additional spending for those who have the most exposure 0:07:01.320 --> 0:07:04.880 to equity markets, stocks retreating nearly ten percent off the 0:07:04.920 --> 0:07:07.040 all time highs. I think that the thing to though, 0:07:07.200 --> 0:07:10.040 keep in mind is the accumulated wealth since the pandemic. 0:07:10.080 --> 0:07:12.800 It's still something like fifty trillion dollars and accumulated well 0:07:12.840 --> 0:07:15.440 since the pandemic. Yes, what we've seen over the past 0:07:15.520 --> 0:07:18.560 couple weeks puts a dent in it, and it will 0:07:18.600 --> 0:07:20.960 make the upper end of the income distribution a bit 0:07:21.000 --> 0:07:24.440 more cautious in their spending behaviors. Is it the sort 0:07:24.480 --> 0:07:27.360 of thing that's good? Is that negative wealth effect enough 0:07:27.400 --> 0:07:31.240 to derail spending completely? Probably not, And there is still 0:07:31.280 --> 0:07:33.400 plenty of credit that can smooth over any sort of 0:07:33.400 --> 0:07:35.440 bumps in the road real quickly. 0:07:35.440 --> 0:07:37.160 Twenty seconds PPI. What do we need to know? 0:07:38.640 --> 0:07:41.960 Keeping an eye really on PPI for airfares, hospital cost, 0:07:42.040 --> 0:07:44.920 physician services, because that's what ends up going into core 0:07:45.000 --> 0:07:47.600 PCE spending. But based on what we have right now, 0:07:48.040 --> 0:07:51.360 fed's favored inflation index, the PCE price Index should have 0:07:51.400 --> 0:07:53.640 a relatively favorable reading at this point based on what 0:07:53.680 --> 0:07:54.640 we know about February. 0:07:54.720 --> 0:07:57.160 Great stuff as always, Stuart, Thank you so much, Bloomberg 0:07:57.160 --> 0:08:00.600 Economics US economist Stuart Paul, all right, the latest US 0:08:00.640 --> 0:08:04.040 inflation print may ultimately cause some relief ahead of US tariffs. 0:08:04.040 --> 0:08:05.440 The tariffs are happening tim. 0:08:05.320 --> 0:08:08.440 At twelve oh one am this Wednesday morning, President Donald 0:08:08.440 --> 0:08:11.600 Trump's twenty five percent tariffs on steel and aluminum imports 0:08:11.640 --> 0:08:15.360 came into force. It triggered concern across export reliant Asia 0:08:15.400 --> 0:08:18.360 and immediate reprisals from the European Union in Canada as 0:08:18.440 --> 0:08:21.760 the global trade war enters a rocky phase, Carol. Meantime, 0:08:21.840 --> 0:08:24.239 Canada announced new twenty five percent tariffs on about twenty 0:08:24.280 --> 0:08:27.840 point eight billion dollars of US made products, including steel 0:08:27.880 --> 0:08:28.560 and aluminum. 0:08:28.680 --> 0:08:28.960 Yeah. 0:08:29.000 --> 0:08:32.480 Indeed, and these retaliatory measures by Canada will also apply 0:08:32.480 --> 0:08:35.600 to consumer items such as computer sporting goods. They match 0:08:35.720 --> 0:08:37.679 the US tariff's dollar for dollar, and they're going to 0:08:37.760 --> 0:08:40.160 take effect at twelve oh one am New York time. 0:08:40.320 --> 0:08:42.080 All right, so let's get an update on this tariff 0:08:42.080 --> 0:08:44.280 trade war between the US and Canada as it relates 0:08:44.320 --> 0:08:47.000 in particular to the metals market in industry back with 0:08:47.040 --> 0:08:49.800 US as Bloomberg News Metals and Mining Heavy Machinery reporter 0:08:49.960 --> 0:08:53.040 Jodoe an expert on this space. So all right, not 0:08:53.160 --> 0:08:55.719 fifty percent, twenty five percent? How does that change any 0:08:55.720 --> 0:08:58.000 of the conversation like that we had with you yesterday. 0:08:58.720 --> 0:09:00.840 I think it goes back to what most of the 0:09:00.880 --> 0:09:04.200 market was expecting, what most buyers were anticipating, and what 0:09:04.240 --> 0:09:07.760 producers were anticipating. And to be clear, none of them 0:09:07.840 --> 0:09:11.439 wanted this on either side. Well, I mean American steelmakers 0:09:11.440 --> 0:09:13.920 probably did to some level, but people actually making business 0:09:13.920 --> 0:09:16.480 decisions are saying, Okay, well, at least we got what 0:09:16.520 --> 0:09:19.040 we were planning for the past month or so. I 0:09:19.040 --> 0:09:21.280 think that's the first part. The fact that the fifty 0:09:21.320 --> 0:09:24.319 percent did get walked back allowed for people to breathe. 0:09:24.360 --> 0:09:26.600 I spoke to I spoke to somebody in the market 0:09:26.679 --> 0:09:29.800 today in the steel market, who said, yesterday it was hectic, 0:09:30.200 --> 0:09:32.400 but today I'm getting almost no phone calls. 0:09:32.640 --> 0:09:33.600 And are they making trades. 0:09:35.000 --> 0:09:38.080 Well, they're in the service center space, so they don't trade, 0:09:38.559 --> 0:09:41.760 but they do supply important end markets in the United States. 0:09:41.840 --> 0:09:43.240 Can you just you know? 0:09:43.360 --> 0:09:46.400 Fortunately, at Bloomberg, we have a great feature on the 0:09:46.440 --> 0:09:48.080 terminal where I can go and look at this chart 0:09:48.120 --> 0:09:51.520 from our bloombergy economics team that has tariffs and when 0:09:51.559 --> 0:09:54.800 they were enacted and what's expected to That's super helpful 0:09:54.840 --> 0:09:56.760 for me because I'm having trouble keeping track of all this. 0:09:56.800 --> 0:09:57.679 It's helpful for me too. 0:09:57.800 --> 0:10:00.880 Okay, remind us why these were imple in the first place, 0:10:00.920 --> 0:10:02.520 and what the off ramp for these are. 0:10:02.600 --> 0:10:05.720 The Trump administration put twenty five percent steeled terriffs and 0:10:05.760 --> 0:10:08.720 ten percent aluminum terraffs into place back in twenty eighteen 0:10:08.760 --> 0:10:11.679 as a part of his initial move on trade. In 0:10:11.720 --> 0:10:14.800 the years since, the United States gave exemptions to various 0:10:14.840 --> 0:10:18.760 countries and various products for these for these imports for 0:10:18.840 --> 0:10:21.599 various reasons, and many of them were approved under the 0:10:21.640 --> 0:10:25.280 Trump administration and others were approved under the Biden administration. 0:10:25.760 --> 0:10:28.000 Trump sat down in the early part of his term 0:10:28.120 --> 0:10:31.040 and probably was even having conversations before he got into 0:10:31.080 --> 0:10:35.320 office in which the steel lobby and various individuals in 0:10:35.360 --> 0:10:37.599 the aluminum lobby said you got to get rid of 0:10:37.679 --> 0:10:40.600 the exemptions because they're no longer having the impact of 0:10:40.640 --> 0:10:44.040 giving more production and more profit to the producers inside 0:10:44.080 --> 0:10:46.800 the United States. So he clearly sat down with his 0:10:46.840 --> 0:10:49.560 advisors and said, we're going to re implement it with 0:10:49.760 --> 0:10:52.200 no exemptions, and by the way, we're going to bump 0:10:52.280 --> 0:10:54.040 up the aluminum tariff to twenty five percent. 0:10:54.200 --> 0:10:56.120 But there is there is this related at all to 0:10:56.320 --> 0:10:59.559 border crossings or fentanyl or is there an off ramp 0:11:00.240 --> 0:11:02.200 for these in the near future. 0:11:02.280 --> 0:11:05.120 Section two thirty two is what he okay. 0:11:05.200 --> 0:11:07.200 So they implemented this on security. 0:11:06.840 --> 0:11:08.760 Right, So I think a key thing right, and this 0:11:08.840 --> 0:11:12.040 is a great question, right, is he knew and his 0:11:12.080 --> 0:11:14.959 administration knew that the Section two thirty two terrifts in 0:11:15.000 --> 0:11:17.320 twenty eighteen had been tested in the courts and they 0:11:17.360 --> 0:11:21.839 had stood up because Section two thirty two was implemented 0:11:21.920 --> 0:11:25.120 under Kennedy right and gives the authority to the President 0:11:25.120 --> 0:11:28.040 of the United States broad reaching power to implement terriffs 0:11:28.080 --> 0:11:31.920 on imports that they deem threaten national security. So under 0:11:31.960 --> 0:11:35.600 that umbrella, they were able to re implement that statute 0:11:36.240 --> 0:11:38.240 with the twenty five percent tariff and pull off all 0:11:38.240 --> 0:11:41.520 the exemptions. That's why this this in particular, had nothing 0:11:41.559 --> 0:11:44.240 to do with the Mexico Canada across the board tariffs. 0:11:44.400 --> 0:11:46.520 That's why this one went into effect. And for the 0:11:46.559 --> 0:11:49.240 most part, people in the markets in the steel and 0:11:49.280 --> 0:11:52.880 aluminum market said, Okay, well, maybe we're not pumped with this, 0:11:52.960 --> 0:11:54.440 but at least we know how it works. 0:11:54.640 --> 0:11:55.959 Well, do they feel like that's it? 0:11:56.920 --> 0:11:58.439 Because the reason I asked you about the trade, and 0:11:58.480 --> 0:12:00.640 you're right, it was not the right company to be asking. 0:12:00.679 --> 0:12:03.000 But one of the things that stuck with me from 0:12:03.040 --> 0:12:05.400 what you said yesterday that the folks that are trading 0:12:05.480 --> 0:12:07.199 in these markets are free to even make a bet 0:12:07.200 --> 0:12:10.360 because it's just things change and it's not just you know, 0:12:10.400 --> 0:12:12.960 weekly changes, monthly changes, it's like hourly changes. 0:12:13.040 --> 0:12:15.760 And it's largely because of the President of the United 0:12:15.800 --> 0:12:20.160 States coming out and saying, unexpectedly, we're putting we're putting 0:12:20.160 --> 0:12:23.600 tariffs on all imports from Canada and Mexico, right, and 0:12:23.640 --> 0:12:26.320 then days later saying, actually, we're going to delay that, 0:12:26.800 --> 0:12:28.480 and then later on coming out and saying we're going 0:12:28.559 --> 0:12:31.559 to do something called reciprocal tariffs. These are things that 0:12:31.679 --> 0:12:34.160 people in my markets that I cover steal on aluminum 0:12:34.559 --> 0:12:37.520 that is like a totally different component that was not 0:12:37.679 --> 0:12:40.160 on their radar, that they had to start figuring out 0:12:40.280 --> 0:12:42.880 what it actually meant to their markets. And as I 0:12:42.920 --> 0:12:45.480 said to you guys yesterday, the anecdote of the person 0:12:45.520 --> 0:12:49.360 putting on a copper trade right, that was, oh my gosh, Okay, 0:12:49.440 --> 0:12:52.000 So he's we think he's going to put import terriffs 0:12:52.040 --> 0:12:53.839 on a lot of things, and we think copper might 0:12:53.880 --> 0:12:55.800 be one of the things. And the President the United 0:12:55.800 --> 0:12:57.800 States comes out at the end of January and says, 0:12:58.120 --> 0:13:00.200 steal on aluminum, terariffs are coming back on and by 0:13:00.200 --> 0:13:02.480 the way, we're going to do copper too. Well, suddenly 0:13:02.480 --> 0:13:04.760 you see the price of copper go up that trader says, great, 0:13:04.800 --> 0:13:06.839 that's a good play for us. And then by Monday, 0:13:06.880 --> 0:13:09.680 the President of United States comes back out and says, actually, 0:13:09.679 --> 0:13:12.280 we're going to walk a few things back, including copper, 0:13:12.559 --> 0:13:14.640 which we might have to do a Section two thirty 0:13:14.640 --> 0:13:17.560 two investigation on. So it's unclear that we might actually 0:13:17.600 --> 0:13:17.880 do this. 0:13:18.559 --> 0:13:19.160 Oh, go ahead. 0:13:19.960 --> 0:13:23.000 So these traders are saying, that's the uncharted territory. We 0:13:23.080 --> 0:13:25.920 know Section two thirty two for stealing aluminum, but all 0:13:25.960 --> 0:13:28.600 these other terriffs are new, and they're coming under things 0:13:28.640 --> 0:13:32.920 like IPA, like trade terrifts that weren't actually put into 0:13:32.960 --> 0:13:35.680 place the first time around. So the Trump administration this 0:13:35.720 --> 0:13:39.400 time around has deald even further into books that were 0:13:39.480 --> 0:13:41.760 dusted off. I mean section two thirty two. I had 0:13:41.920 --> 0:13:44.719 trade lawyers tell us in twenty eighteen, we didn't know 0:13:44.760 --> 0:13:47.880 what Section two thirty two was. We had to actually 0:13:47.960 --> 0:13:50.520 go back into the stacks to read up everything to 0:13:50.600 --> 0:13:55.240 understanding in a long time. And listen. I spoke to 0:13:55.240 --> 0:13:57.880 wilber Ross a month ago and asked him some follow 0:13:57.920 --> 0:14:00.600 up questions on this, and he did make the point. Remember, 0:14:00.920 --> 0:14:04.360 Section two thirty two was tried in the courts and 0:14:04.480 --> 0:14:07.040 was upheld and he knows that is one tool he 0:14:07.120 --> 0:14:09.080 has in his back pocket that he can go through 0:14:09.120 --> 0:14:11.000 with the president does the president of United States, And 0:14:11.120 --> 0:14:13.080 that's what we saw go into effect last night at 0:14:13.080 --> 0:14:14.120 twelve o one or this morning. 0:14:14.400 --> 0:14:17.680 So essentially, the new tariffs that have been imposed this week, 0:14:18.320 --> 0:14:20.960 they've been tested in the mechanism, has been tested in 0:14:21.000 --> 0:14:21.400 the courts. 0:14:21.440 --> 0:14:21.960 That's right. 0:14:22.040 --> 0:14:25.160 These are in the view of the prop Trump administration. 0:14:25.360 --> 0:14:26.680 These are safe, These are good to go. 0:14:26.760 --> 0:14:31.480 These won't be challenged probably, so that's probably how they feel. 0:14:31.560 --> 0:14:31.840 Now. 0:14:32.040 --> 0:14:34.040 The question is will they walk some of it back, 0:14:34.080 --> 0:14:36.760 in other words, will they go into exemptions. That's unclear 0:14:36.760 --> 0:14:38.640 to me. But we did have reporting in our main 0:14:38.680 --> 0:14:42.320 bar story yesterday that we knew of a meeting between Alcoa, 0:14:42.800 --> 0:14:46.360 the CEO of Alcoa, Bill Opplinger, some Rio Tanto officials, 0:14:46.560 --> 0:14:49.280 and the US Aluminum Association president in which they sat 0:14:49.280 --> 0:14:51.160 down with the Commerce Department in the past couple of 0:14:51.200 --> 0:14:54.880 weeks telling the Commerce Department you need to not implement 0:14:54.920 --> 0:14:58.920 the aluminum terras on imports from Canada. Now they had 0:14:59.000 --> 0:15:01.640 the conversation, which at least indicates to the market that 0:15:01.640 --> 0:15:05.760 they're listening to people. So maybe they end up do 0:15:05.840 --> 0:15:08.520 giving exemptions. But as of this point, Trump made it 0:15:08.600 --> 0:15:13.680 very clear we're not giving any exemptions. And remember, the 0:15:13.720 --> 0:15:17.359 biggest people who are against exemptions are the US steelmakers, 0:15:17.400 --> 0:15:20.480 New Core Corporations, Steel Dynamics, US Steel, and Cliffs all 0:15:20.480 --> 0:15:22.720 came out with a letter on Friday and said, mister President, 0:15:23.040 --> 0:15:26.520 do not give exemptions because that will just undo everything 0:15:26.520 --> 0:15:27.240 that we have here. 0:15:29.240 --> 0:15:31.800 Don't ever go away. 0:15:31.960 --> 0:15:34.080 No, it's just it's a complicated, and as Jim said, 0:15:34.120 --> 0:15:36.360 we're trying to keep up to date on what's new, 0:15:36.400 --> 0:15:38.560 what's old, what's on top of each other, because it 0:15:38.560 --> 0:15:41.160 makes a difference in terms of the implications for the industry, 0:15:41.200 --> 0:15:43.840 for companies, for costs, for inflation. 0:15:43.480 --> 0:15:45.600 For the economy. Thank you, Thank you. 0:15:45.800 --> 0:15:48.840 Bloomberg News Medals and Mining Heavy Machinery reporter Jode, who 0:15:48.880 --> 0:15:50.040 is never going to leave us. 0:15:51.000 --> 0:15:54.560 You're listening to the Bloomberg Business Week podcast. Catch us 0:15:54.600 --> 0:15:58.080 live weekday afternoons from two to five pm Eastern Listen 0:15:58.080 --> 0:16:01.640 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:16:01.800 --> 0:16:03.560 or watch us live on YouTube. 0:16:04.720 --> 0:16:04.880 Well. 0:16:04.920 --> 0:16:06.560 With a lot continuing to come out of the White 0:16:06.640 --> 0:16:10.280 House and Trump administration regarding Tariff's, geopolitics and so much more. 0:16:10.680 --> 0:16:13.000 We wanted to do deep dive into how the United 0:16:13.000 --> 0:16:16.120 States relationship with the world is changing short term and 0:16:16.480 --> 0:16:19.400 possibly longer term, and to try and really suss out 0:16:19.400 --> 0:16:22.080 what President Trump's an endgame and agenda may be when 0:16:22.120 --> 0:16:25.400 it comes to the global role of the US government. 0:16:25.480 --> 0:16:27.400 And to that we turn once again to Ed Price. 0:16:27.640 --> 0:16:30.480 He's a former British Trade official official now non resident 0:16:30.720 --> 0:16:33.440 Senior Fellow over at NYU. He has advised members of 0:16:33.480 --> 0:16:37.480 the European and British parliaments, writes regularly about politics, economic 0:16:37.520 --> 0:16:39.920 policy and more just tying it all together, and he 0:16:40.000 --> 0:16:41.280 joins us here in studio. 0:16:41.920 --> 0:16:43.960 Welcome, Welcome, Thank you very much, Carol. 0:16:44.160 --> 0:16:46.280 You were doing okay, like trying to keep up with 0:16:46.280 --> 0:16:47.920 the headlines and make sense of it all. And I 0:16:47.920 --> 0:16:51.320 think we too are all trying to think longer term change. 0:16:51.320 --> 0:16:53.240 Disruption We talk about it all the time. Can be 0:16:53.320 --> 0:16:55.720 good and we'll get to that in just a moment. 0:16:55.800 --> 0:16:59.720 But you have a recent column he wrote about for Barons, 0:16:59.840 --> 0:17:02.120 and you get into how President Trump's rise marks the 0:17:02.200 --> 0:17:04.359 end of a long progressive era in the United States, 0:17:04.640 --> 0:17:06.560 and you seize on at least you kick it off 0:17:06.760 --> 0:17:09.119 the column with something that the President said in his 0:17:09.240 --> 0:17:12.520 recent joint address to Congress, saying he wants the United 0:17:12.520 --> 0:17:16.840 States to be the most dominant civilization over ever to 0:17:16.920 --> 0:17:18.520 exist on the face of this earth. 0:17:19.080 --> 0:17:21.560 So what is he striving for? What is he in 0:17:21.600 --> 0:17:22.000 your view? 0:17:23.040 --> 0:17:26.840 In my view, he is a good thing for America, 0:17:26.920 --> 0:17:30.240 the nation, and America the democracy, because everybody's talking about 0:17:30.480 --> 0:17:33.520 America and the democracy, and we're sitting here doing this again. 0:17:34.560 --> 0:17:36.320 And he is potentially a very bad thing for the 0:17:36.320 --> 0:17:38.840 Republic and the Union and the United States. And it 0:17:38.920 --> 0:17:42.919 might seem strange to make that distinction, because as things stand, 0:17:43.000 --> 0:17:45.199 we very often think of those things as the same. Right, 0:17:45.280 --> 0:17:49.159 we will say USA and we'll say America interchangeably. And 0:17:49.200 --> 0:17:50.840 as I try to argue in this column, I may 0:17:50.840 --> 0:17:55.000 be wrong. I think that Trump's absolute structural purpose, is 0:17:55.040 --> 0:17:58.720 foundational purpose, is to split those two things in half, 0:17:58.840 --> 0:18:00.600 to get them away from the war from the other. 0:18:01.520 --> 0:18:04.080 Explain how he does that and what that means. People 0:18:04.160 --> 0:18:06.360 might hear you and say, wait a second, these things 0:18:06.400 --> 0:18:08.680 sound like something that are inextricably bound. 0:18:08.840 --> 0:18:09.280 So they're not. 0:18:10.040 --> 0:18:13.399 In my opinion, right, seventeen seventy six is the moment 0:18:13.480 --> 0:18:16.160 that the American nation was born and it was born 0:18:16.200 --> 0:18:18.360 of breaking the law and defying a king. So that's 0:18:18.400 --> 0:18:21.040 the rebelliousness, right, that's the flags on the back of pickups. 0:18:21.040 --> 0:18:24.399 It's great, it's all American. Seventeen eighty nine, when the 0:18:24.400 --> 0:18:27.879 Constitution is ratified, is the moment that we chose to 0:18:27.920 --> 0:18:31.320 be legalists and chose to be a republic. Alexander Hamilton 0:18:31.359 --> 0:18:33.720 in that intereigrament was saying, look, should we have a 0:18:33.800 --> 0:18:36.399 king right? And they were arguments about how powerful the 0:18:36.400 --> 0:18:40.160 president should be. These arguments have never been resolved, and 0:18:40.640 --> 0:18:44.440 we saw with Nixon, we saw with Kennedy the imperial presidency, 0:18:44.480 --> 0:18:48.040 because again, we haven't decided as a nation what exactly 0:18:48.640 --> 0:18:53.080