WEBVTT - Bessent Says US Must Win on AI and Quantum; Hollywood Shaken by Tariff Threat 0:00:02.520 --> 0:00:09.760 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.800 --> 0:00:15.520 where innovation, money and power collide in Silicon Valley and beyond. 0:00:15.960 --> 0:00:45.480 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:34.520 --> 0:00:36.720 Live from New York and Caroline Hyde and this is 0:00:36.760 --> 0:00:40.199 Bloomberg Technology coming up markets. They are on edge as 0:00:40.240 --> 0:00:42.880 trade concerns holt the four day winning street for tech stocks. 0:00:43.280 --> 0:00:46.320 This as President Trump announces plans to impose one hundred 0:00:46.360 --> 0:00:51.760 percent tariffs of films produced overseas, slamming media companies and Microsoft, 0:00:51.800 --> 0:00:55.840 surpassing Apple becoming the largest US company by market value. 0:00:56.160 --> 0:00:59.960 And in just a few minutes, Treasury Secretary Scott best 0:01:00.040 --> 0:01:02.959 And will be speaking from the Milking Conference in Los Angeles. 0:01:03.000 --> 0:01:03.600 We'll bring you that. 0:01:03.600 --> 0:01:06.800 Conversation live as it gets underway. The President Trump is 0:01:06.840 --> 0:01:09.760 taking aim at the movie industry and announcing plans to 0:01:09.800 --> 0:01:12.759 impose check this out, one hundred percent tariff on films 0:01:12.800 --> 0:01:15.360 produced overseas. Now is all in a post on truth 0:01:15.400 --> 0:01:19.240 social adding quote, we want movies made in America again. 0:01:19.400 --> 0:01:22.119 Bloommeg's Tyler Kennell joins us Now for more details and 0:01:22.480 --> 0:01:25.120 in fact, movie moguls in the industry went to the 0:01:25.160 --> 0:01:27.920 President saying we want movies made in the US with 0:01:28.040 --> 0:01:30.560 tax credits, he proposes something very different. 0:01:31.560 --> 0:01:33.880 Yeah, hey, Caroline. While President Trump has often taken the 0:01:34.000 --> 0:01:36.679 stick verse cared approach, saying no to those subsidies and 0:01:36.720 --> 0:01:39.080 incentives instead of yes to his tariff plans. As you 0:01:39.120 --> 0:01:43.080 alluded to there, Bloomberg News reporting that John Voight and 0:01:43.200 --> 0:01:45.560 his agent met with President Trump at Mara a Lago 0:01:45.640 --> 0:01:48.040 over the weekend and asked him to put forward some 0:01:48.120 --> 0:01:51.400 tax excentives, including expanding a current tax credit that would 0:01:51.400 --> 0:01:54.840 help boost production in the US. But there's still now 0:01:54.880 --> 0:01:57.000 that he is pursuing this tariff route. There's a lot 0:01:57.040 --> 0:01:59.640 of big questions here, including how will a movie actually 0:01:59.720 --> 0:02:03.240 be valued for tariff purposes. Movies are, of course, more 0:02:03.280 --> 0:02:05.240 of a service instead of a good. Not to mention 0:02:05.320 --> 0:02:08.519 that one film could be produced in multiple locations. Does 0:02:08.520 --> 0:02:11.480 this extend to foreign based production companies or US based 0:02:11.480 --> 0:02:15.040 production companies that make their movies overseas. What we do 0:02:15.240 --> 0:02:17.640 know is that President Trump has indicated that he would 0:02:17.639 --> 0:02:21.200 invoke these tariffs on the basis of national security concerns. 0:02:21.240 --> 0:02:22.520 That signals two things for US. 0:02:22.560 --> 0:02:25.600 One, that's likely the justification that this White House will 0:02:25.639 --> 0:02:27.640 take Whether or not that means they're going to evoke 0:02:27.720 --> 0:02:30.800 IIBA or Section two thirty two really remains to be seen. 0:02:30.880 --> 0:02:33.919 Since we haven't actually seen an executive order putting these 0:02:33.960 --> 0:02:36.520 into motion. We do know that the USTR and Commerce 0:02:36.520 --> 0:02:39.840 Department are working on looking into this, and the second 0:02:39.840 --> 0:02:42.480 thing it indicates is that these tariffs would likely face 0:02:42.520 --> 0:02:45.160 some heavy legal scrutiny if they are put into effect. 0:02:45.280 --> 0:02:48.440 As you mentioned, the music the movie industry was caught 0:02:48.520 --> 0:02:50.440 pretty off guard by the announcement. 0:02:50.880 --> 0:02:53.600 I mean, we're seeing sir an analysts saying this would 0:02:53.680 --> 0:02:58.320 just reap devastation upon the US entertainment industry tailer. More broadly, 0:02:58.840 --> 0:03:01.720 costs would rise the many, but remind us of perhaps 0:03:01.800 --> 0:03:06.279 what the anxiety has been why other countries US outside 0:03:06.320 --> 0:03:08.400 the US. We think the UK, we think Canada have 0:03:08.560 --> 0:03:10.880 managed to pull away a lot of US production. 0:03:11.480 --> 0:03:13.000 Right, and that really does have to do with the 0:03:13.080 --> 0:03:16.680 tax incentives and lower labor costs as well as production costs. 0:03:16.680 --> 0:03:18.079 And the Most Picture. 0:03:17.800 --> 0:03:20.760 Association does say that employees about two point three two 0:03:20.960 --> 0:03:23.760 million people in the US in this industry alone, but 0:03:23.800 --> 0:03:26.359 actually pulled some other statistic for you, which is that 0:03:26.600 --> 0:03:29.760 US spending on film and TV production fell twenty eight 0:03:29.840 --> 0:03:33.280 percent between twenty twenty one and twenty twenty four, according 0:03:33.320 --> 0:03:36.480 to data from research firm fraud Pro and its countries 0:03:36.480 --> 0:03:39.440 that you're talking about, like Australia, New Zealand, the UK, 0:03:39.560 --> 0:03:42.280 also Canada that have really pulled ahead when it comes 0:03:42.440 --> 0:03:47.680 to lessening these higher costs in order to make movies, 0:03:47.720 --> 0:03:49.960 and quickly, I will just throw one other country in there, 0:03:50.000 --> 0:03:52.240 because this isn't the first time that we've seen movies 0:03:52.280 --> 0:03:55.200 come into this trade war of calculation and talk. It's 0:03:55.280 --> 0:03:58.360 China actually not necessarily that they've been taking US production, 0:03:58.440 --> 0:04:00.520 but of course, as you well know, last month they 0:04:00.520 --> 0:04:02.720 did say that they were going to restrict US of 0:04:02.800 --> 0:04:05.640 Film's access to their market. So it's kind of continuing 0:04:05.720 --> 0:04:08.280 how we're seeing these tariffs really go beyond just what 0:04:08.400 --> 0:04:09.680 we traditionally think about. 0:04:10.400 --> 0:04:12.960 Certainly, Tyler Kendall, with all the latest from the White House, 0:04:13.000 --> 0:04:16.120 we thank you. Now let's get more market reaction, not 0:04:16.160 --> 0:04:19.080 just media entertainment stocks, but more broadly. Daniel Morgan's with 0:04:19.160 --> 0:04:23.040 us senior portfolio manager that's the Nervous Trust Company, and Daniel, 0:04:23.080 --> 0:04:25.680 you focus mainly on the Magnificent seven, big tech and 0:04:25.800 --> 0:04:28.719 chips more broadly rather than media names. But it does 0:04:28.760 --> 0:04:30.960 feel that once again tariffs are the eye of the storm. 0:04:32.480 --> 0:04:35.760 Yeah, so, Caroline, I mean it keeps extending to different groups. 0:04:35.839 --> 0:04:38.200 I mean, obviously it's going to affect a company like Netflix, 0:04:38.360 --> 0:04:40.760 which is kind of used to be in the talk 0:04:40.800 --> 0:04:44.400 of those saying magnificent seven. But again, you know, Caroline, 0:04:44.440 --> 0:04:46.880 if you look at the tariffs in terms of all 0:04:46.880 --> 0:04:50.200 these different industry groups, it seems like technology is the 0:04:50.279 --> 0:04:54.000 hardest hit. Even though there's a reprieve on PCs and smartphones, 0:04:54.520 --> 0:04:56.680 you don't know if that reprieve is going to be 0:04:56.800 --> 0:05:02.080 lifted up. And chips another sector that is obviously heavily 0:05:02.080 --> 0:05:05.720 impacted by tariffs. So that's really been the you know, 0:05:05.800 --> 0:05:08.000 black cloud over the group that's kind of kept it 0:05:08.320 --> 0:05:10.760 from rebounding like the S and P five hundred has. 0:05:10.800 --> 0:05:14.479 It's still a down about fifteen to sixteen percent off 0:05:14.520 --> 0:05:17.039 mid February highs, where the SMP is only off about 0:05:17.080 --> 0:05:20.560 maybe eight to ten percent. So it's a tough, tough sector, 0:05:21.040 --> 0:05:24.920 not only media and movies, but also in the tech sector. 0:05:25.160 --> 0:05:28.080 That's going into individual names, Daniel, because of course we 0:05:28.240 --> 0:05:30.960 just talked about how Apple has switched places with Microsoft, 0:05:31.000 --> 0:05:33.320 it's no longer the most valuable company on the SMP 0:05:33.440 --> 0:05:36.640 for example, we seem to see hardware hit the hardest 0:05:36.640 --> 0:05:39.000 at the moment. Is Apple just one that you cannot 0:05:39.120 --> 0:05:43.520 rebuy into until as a future catalyst, Carolin. 0:05:43.760 --> 0:05:47.039 Apple's a tough stock because before the teriffs even came out, 0:05:47.080 --> 0:05:49.040 there were a lot of concerns that there would be 0:05:49.080 --> 0:05:53.280 a delay in users upgrading to the new iPhones because 0:05:53.320 --> 0:05:58.360 they didn't have the same AI serie personal assistant technology 0:05:59.120 --> 0:06:02.719 that everybody was hoping for that would be unveiled. Looks 0:06:02.720 --> 0:06:04.800 like it's going to go into the iPhone seventeen that's 0:06:04.839 --> 0:06:07.320 not coming out to the fall. If you look at 0:06:07.320 --> 0:06:10.640 the most recent quarter, even though there were no direct 0:06:10.680 --> 0:06:13.080 tariffs at the time, I mean, iPhone revenues were only 0:06:13.160 --> 0:06:14.120 up about two percent. 0:06:14.279 --> 0:06:16.520 So they are in a really. 0:06:16.440 --> 0:06:20.880 Difficult position caring because they are so heavily entrenched in 0:06:20.920 --> 0:06:23.280 the Pacific Rim, not just China, but through all their 0:06:23.279 --> 0:06:27.400 supply chains and manufacturing. They do about fifteen percent in India, 0:06:27.839 --> 0:06:29.960 but for them to move that out of that part 0:06:30.000 --> 0:06:31.640 of the world is going to be very challenging. 0:06:31.800 --> 0:06:34.200 So they have a very tough road. 0:06:34.040 --> 0:06:37.280 To go, and there were factors and headwinds that were 0:06:37.440 --> 0:06:40.039 up against them even before the whole tariff news. 0:06:40.440 --> 0:06:43.400 And Daniel, we actually at least got some sort of 0:06:43.440 --> 0:06:46.680 admission of a lack of clarity from executives, and we 0:06:46.800 --> 0:06:50.040 got some feeling for fundamentals in earnings. We've still got 0:06:50.040 --> 0:06:51.719 earnings to come. I know you've been thinking about what 0:06:51.760 --> 0:06:53.800 AMD is going to give us. Tonight, we get pal 0:06:53.880 --> 0:06:56.720 Andeer and it's been a real winner over the last 0:06:56.760 --> 0:06:58.919 year or so. But even software feels a little bit 0:06:58.960 --> 0:07:01.120 of pressure today. You look for in some of these 0:07:01.160 --> 0:07:01.960 earning still left. 0:07:03.320 --> 0:07:05.920 Well, Palantar is a whole different game, Carolin, because they're 0:07:05.920 --> 0:07:08.080 in the defense industry, but they're a tech sector. But 0:07:08.440 --> 0:07:11.160 you know, looking into let's say advanced market Devices, which 0:07:11.160 --> 0:07:14.679 reports on Tuesday, we know that Intel, when they reported 0:07:14.680 --> 0:07:17.360 two weeks ago their data center group revenues were up 0:07:17.400 --> 0:07:21.360 ten percent. Will get another window into data center revenues. 0:07:22.360 --> 0:07:25.120 I'm afraid, Daniel, I'm going to have to leave it 0:07:25.160 --> 0:07:27.360 there for a moment, so kind of you to join us, 0:07:27.360 --> 0:07:29.160 but we have to go over to the Milken Conference 0:07:29.200 --> 0:07:33.040 in Los Angeles. Treasury Sectory Scott Besson has started speaking seventies. 0:07:33.280 --> 0:07:36.320 He had the rare combination of guts and intellect to 0:07:36.400 --> 0:07:40.560 defy the Wall Street consensus. With his heterodox approach to 0:07:40.680 --> 0:07:44.880 junk bonds, he pioneered a new asset class known today 0:07:45.080 --> 0:07:49.040 as high yield bonds. By staying true to his vision, 0:07:49.560 --> 0:07:56.160 Mike overturned decades of economic orthodoxy. He bootstrapped entirely new 0:07:56.200 --> 0:08:00.920 industries by redirecting billions of dollars in cap to non 0:08:01.120 --> 0:08:02.880 investment grade companies. 0:08:03.560 --> 0:08:05.320 His colleagues on Wall Street told. 0:08:05.200 --> 0:08:09.160 Him he was delusional and a fool, but ultimately history 0:08:09.600 --> 0:08:10.320 proved him right. 0:08:11.160 --> 0:08:14.000 Sound familiar like Mike Milkan. 0:08:14.520 --> 0:08:18.280 President Trump has no shortage of critics in establishment circles, 0:08:18.880 --> 0:08:21.600 but he proved them wrong in his first term, and 0:08:21.640 --> 0:08:25.800 he is proving them wrong again today. On President Trump's 0:08:25.840 --> 0:08:30.000 first day in office, he vowed to usher in a 0:08:30.040 --> 0:08:34.360 new golden age for our country, a golden age. America 0:08:34.400 --> 0:08:39.960 deserve a golden age. America deserves a golden age economy. 0:08:40.080 --> 0:08:42.840 So for the past one hundred days, we've been preparing 0:08:42.880 --> 0:08:47.360 the soil. We have uprooted government waste and harmful regulations. 0:08:47.840 --> 0:08:51.000 We have planted the seeds of private investment, and we 0:08:51.080 --> 0:08:56.480 have fertilized the ground with fresh tax legislation. Next, we harvest, 0:08:56.960 --> 0:09:01.240 and we want you to harvest with us. America is 0:09:01.280 --> 0:09:05.000 the showing point of global finance. We have the world's 0:09:05.000 --> 0:09:09.160 reserve currency, and the deepest and most liquid capital markets, 0:09:09.440 --> 0:09:13.760 and the strongest property rights. For these reasons, the United 0:09:13.800 --> 0:09:18.640 States is the premier destination for international capital, and the 0:09:18.679 --> 0:09:22.480 administration's goal is to make it even more appealing for 0:09:22.559 --> 0:09:26.440 investors like you. This morning, I will explain how we 0:09:26.520 --> 0:09:30.880 plan to achieve that goal. The primary components of the 0:09:30.920 --> 0:09:36.680 Trump economic agenda, trade, tax cuts, and deregulation, are not 0:09:36.880 --> 0:09:42.199 standalone policies. They are interlocking parts of an engine designed 0:09:42.200 --> 0:09:46.920 to drive long term investment in the American economy. Our 0:09:46.960 --> 0:09:50.440 goal with trade policy is to level the playing field 0:09:50.800 --> 0:09:54.559 for our great American workers and companies. With a level 0:09:54.679 --> 0:10:00.800 playing field, American industry can out compete all challengers, tariffs 0:10:00.880 --> 0:10:04.559 or engineer to encourage companies like yours to invest directly 0:10:04.600 --> 0:10:08.200 in the United States. Hire your workers here, build your 0:10:08.240 --> 0:10:10.760 factories here, make your products here. 0:10:11.160 --> 0:10:14.280 You'll be glad you did, not only because we have the. 0:10:14.240 --> 0:10:18.040 Most productive work force in the world, but because we 0:10:18.160 --> 0:10:21.920 will soon have the most favorable tax and regulatory environment 0:10:22.040 --> 0:10:26.760 as well. This is where tax incentives and deregulation come 0:10:26.800 --> 0:10:31.120 into play. You may have heard one big, beautiful bill 0:10:31.520 --> 0:10:35.240 floating around Congress. This bill is big and beautiful for 0:10:35.400 --> 0:10:40.400 Main Street America and investors alike. The President's signature tax 0:10:40.520 --> 0:10:45.160 legislation will prevent an enormous tax hike on Main Street 0:10:45.720 --> 0:10:49.760 by making the small business deduction permanent. It will also 0:10:49.920 --> 0:10:54.320 provide tax credits and deductions for research and innovation to 0:10:54.360 --> 0:11:00.560 stimulate investment in high tech operations. It will restore one 0:11:00.640 --> 0:11:05.280 hundred percent expensing for equipment while expanding that incentive to 0:11:05.440 --> 0:11:12.000 new factory construction. The objective to accelerate investment in American industry. 0:11:12.800 --> 0:11:16.720 To make that investment as seamless and rewarding as possible, 0:11:17.160 --> 0:11:23.239 President Trump has embraced an ambitious deregulation agenda. This includes 0:11:23.480 --> 0:11:28.360 expansive permitting reform. The President doesn't want to just drill, 0:11:28.400 --> 0:11:31.200 baby drill, He wants to build, baby build. 0:11:31.880 --> 0:11:32.920 To that end, he. 0:11:32.880 --> 0:11:37.359 Has signed executive orders to reduce the federal approval process 0:11:37.440 --> 0:11:41.120 for new energy and construction projects from several years to 0:11:41.320 --> 0:11:45.520 just a few months. This simple reform will unleash the 0:11:45.600 --> 0:11:50.280 creative potential of America's builders. It will empower business leaders 0:11:50.559 --> 0:11:54.000 like you to put your capital to work as quickly 0:11:54.240 --> 0:11:59.000 and efficiently as possible. The building renaissance will be fueled 0:11:59.000 --> 0:12:03.880 by the President's Energy Dominates agenda. Energy is the base 0:12:03.960 --> 0:12:06.480 layer of all economic activity. 0:12:06.720 --> 0:12:07.839 That's why the. 0:12:07.800 --> 0:12:12.280 Administration champions and all of the above approach to energy 0:12:12.320 --> 0:12:16.800 development to drive down the cost of doing business. I 0:12:16.840 --> 0:12:20.240 hope you can see the bigger picture now. The Trump 0:12:20.280 --> 0:12:24.560 economic agenda is more than the sum of its parts. Trade, 0:12:24.600 --> 0:12:29.040 tax cuts, and deregulation may be three distinct policies, but 0:12:29.080 --> 0:12:33.560 each policy is mutually reinforcing and acting in concert. They 0:12:33.600 --> 0:12:38.760 push toward the same goal to solidify our position as 0:12:38.840 --> 0:12:39.559 the home. 0:12:39.360 --> 0:12:42.280 Of global capital. The result of. 0:12:42.280 --> 0:12:47.160 The President's economic plan will be more more jobs, more homes, 0:12:47.400 --> 0:12:53.319 more growth, more factories, more critical manufacturing plans, more semiconductors, 0:12:53.559 --> 0:13:00.160 more energy, more opportunity, more defense, more economic security, more innovation. 0:13:01.040 --> 0:13:05.040 In short, more of all things we need the most. 0:13:05.320 --> 0:13:09.640 The President believes we can achieve more together. This is 0:13:09.679 --> 0:13:13.400 the abundant vision he has for the future. He wants 0:13:13.520 --> 0:13:14.880 everyone to be a part of it. 0:13:15.679 --> 0:13:18.959 Thousands of businesses are now catching the President's vision. 0:13:19.720 --> 0:13:23.320 Since he assumed office in January companies have pledged to 0:13:23.360 --> 0:13:28.160 invest trillions into the US economy. President Trump has secured 0:13:28.240 --> 0:13:31.959 more investment for our country in one hundred days than 0:13:32.000 --> 0:13:36.920 President Biden did during all four years. Entrepreneurs, too, are 0:13:37.000 --> 0:13:39.559 starting to understand what the President is. 0:13:39.520 --> 0:13:40.839 Trying to accomplish. 0:13:41.200 --> 0:13:44.600 Mart sold one of the highest levels ever recorded for 0:13:44.720 --> 0:13:48.280 new business applications. Many of these men and women, like 0:13:48.360 --> 0:13:51.720 many of you, are grasping that America First is a 0:13:51.720 --> 0:13:52.600 blueprint for. 0:13:52.679 --> 0:13:56.600 More abundant world for now. A parting thought. 0:13:57.200 --> 0:14:00.320 When I entered public service, I spent more than forty 0:14:00.360 --> 0:14:05.040 years in the asset management business. There one mantra guides 0:14:05.480 --> 0:14:09.800 one of the world's most successful investors. Never bet against America. 0:14:10.400 --> 0:14:13.320 Warren Buffett coined the phrase, and it's been his load 0:14:13.400 --> 0:14:17.000 star as long as he's been in the game. Never 0:14:16.600 --> 0:14:21.960 bet against America captures a time tested truth. The American 0:14:22.040 --> 0:14:27.040 economy is unstoppable. Throw whatever you will at our capital markets, 0:14:27.280 --> 0:14:31.160 the Great Depression, two World Wars nine to eleven, a 0:14:31.240 --> 0:14:32.800 COVID recession. 0:14:33.800 --> 0:14:36.560 Of the last few years, or sky high inflation. 0:14:37.240 --> 0:14:40.920 Each time the American economy gets knocked down, it gets 0:14:40.960 --> 0:14:44.840 back up again, and it gets back up even stronger 0:14:44.200 --> 0:14:50.280 than it was before US markets are anti fragile. Indeed, 0:14:50.320 --> 0:14:55.040 the entire history can be distilled into just five words 0:14:55.560 --> 0:14:59.360 up and to the right. On a long term horizon, 0:14:59.760 --> 0:15:02.080 it's it's never a bad time to invest in America, 0:15:02.520 --> 0:15:05.880 but especially now. The United States is entering a new 0:15:05.880 --> 0:15:10.080 golden age of economic prosperity for both Main Street and 0:15:10.200 --> 0:15:13.600 Wall Street. And we don't want anyone to get left behind. 0:15:14.280 --> 0:15:16.520 Come with us so we can build a more abundant 0:15:16.560 --> 0:15:17.320 America together. 0:15:17.960 --> 0:15:23.760 Thank you all, Please welcome Institute Chairman Michael Milkin. 0:15:37.240 --> 0:15:42.840 So, as a scholar in college, a leading university, an 0:15:42.920 --> 0:15:49.160 accomplished fund manager, former professor, and distinguished career in finance 0:15:49.240 --> 0:15:55.760 and academic, your range of life options was unlimited. What 0:15:56.000 --> 0:16:02.640 inspired you to choose the field of public service? Joining 0:16:02.720 --> 0:16:07.600 President Trump's administration in a very high profile and I 0:16:07.640 --> 0:16:09.600 should say high pressure role. 0:16:11.640 --> 0:16:13.000 I would agree on all the above. 0:16:15.120 --> 0:16:19.400 So, Mike, there was a long, long art desire for 0:16:19.480 --> 0:16:23.080 public service. I had tried or considered going to the 0:16:23.160 --> 0:16:26.680 Naval Academy, and I was applying in nineteen seventy nine. 0:16:26.680 --> 0:16:27.960 I wanted to serve my country. 0:16:28.760 --> 0:16:32.800 Due to central orientation, I was unable to so, even 0:16:32.880 --> 0:16:35.520 since I was a teenager. I wanted to serve my country, 0:16:36.200 --> 0:16:40.120 and I'd had a great career like many people in 0:16:40.160 --> 0:16:42.320 this room and finance, the country had been good to me, 0:16:43.040 --> 0:16:49.920 and as an economic history scholar, I was shocked at 0:16:49.920 --> 0:16:54.280 what was happening with these budget deficits. So last year 0:16:54.400 --> 0:16:58.960 six point seven percent of GDP highest ever when. 0:16:58.800 --> 0:17:00.680 We weren't at war, weren't in. 0:17:00.640 --> 0:17:03.480 A recession, and I wanted to come out from behind 0:17:03.560 --> 0:17:06.480 my desk and be part of the solution because I 0:17:06.520 --> 0:17:10.160 was afraid the four more years of that, and it 0:17:10.240 --> 0:17:13.040 was kind of a deeply cynical plan. 0:17:13.200 --> 0:17:14.320 I thought, run up the. 0:17:14.280 --> 0:17:18.680 Debt and then have to raise taxes and really buy 0:17:18.760 --> 0:17:22.240 me the American engine of growth, innovation, and opportunity. 0:17:23.200 --> 0:17:26.880 Well, we once again were very happy you took up 0:17:26.920 --> 0:17:31.240 that mission. And I can't think of a better person 0:17:31.560 --> 0:17:34.640 at this time to be the Secretary of the Treasury. 0:17:35.040 --> 0:17:35.760 Let me try. 0:17:40.880 --> 0:17:44.119 Over the years, we've had a number of Secretary's Treasuries 0:17:44.200 --> 0:17:50.160 that were not really into financial markets, and so you're 0:17:50.200 --> 0:17:54.920 the right person at the right time. But it's interesting 0:17:54.960 --> 0:17:56.919 when I think about it, and how do you strike 0:17:57.040 --> 0:18:02.919 the balance between the administration's goal of reindustrialization in the 0:18:03.040 --> 0:18:06.879 US and the risk of isolating the US economy. 0:18:08.160 --> 0:18:14.040 Well, I think that they're not mutually exclusive. And as 0:18:14.320 --> 0:18:19.200 I've said many times that obviously in this trade puzzle, 0:18:19.640 --> 0:18:21.080 China's the biggest piece. 0:18:22.080 --> 0:18:23.879 Where do we end up with China? 0:18:24.440 --> 0:18:29.679 And I said during IMF week in Washington, said, you know, 0:18:29.800 --> 0:18:33.120 it's possible that we could, as Ray Dalio might say, 0:18:33.160 --> 0:18:37.360 do a big, beautiful rebalancing that if we want more manufacturing, 0:18:38.520 --> 0:18:43.119 everyone agrees except Chinese leadership, that they need more consumption, 0:18:43.640 --> 0:18:47.000 we could actually do that together. And then look on 0:18:47.040 --> 0:18:51.959 the other side that getting better terms of trade is 0:18:52.000 --> 0:18:55.440 not always a right line. 0:18:55.520 --> 0:18:57.840 It's not always a pleasant process. 0:18:57.960 --> 0:19:02.520 But I think at the end, the trading relationships will 0:19:02.560 --> 0:19:08.359 be stronger, our security and values ties will still be there. 0:19:09.119 --> 0:19:11.000 I look back and I. 0:19:10.920 --> 0:19:16.400 Think about the example of NATO and German fiscal spending. 0:19:16.960 --> 0:19:19.120 So I lived in London for a long time, rand 0:19:19.160 --> 0:19:24.040 the Soro's office there, and since the well forever actually 0:19:25.680 --> 0:19:30.200 the whether it's a French president, the Italian Prime minister, 0:19:30.800 --> 0:19:34.560 people in Brussels were trying to break open the German piggybank, 0:19:35.520 --> 0:19:39.560 and President Trump not in a straight line, not in 0:19:39.800 --> 0:19:43.040 what would be what anyone would call a diplomatic manner 0:19:43.800 --> 0:19:48.120 has gotten NATO countries to step up and meet their 0:19:48.119 --> 0:19:53.239 spending requirements. I think these numbers are approximate, but I 0:19:53.280 --> 0:19:56.600 think only twenty five percent. When he came in in 0:19:56.600 --> 0:20:00.560 twenty seventeen, only twenty five percent of NATO country we're 0:20:00.560 --> 0:20:04.040 meeting their spinning requirements. Now I think only twenty five 0:20:04.040 --> 0:20:08.120 percent aren't. So the Germans for the first time are 0:20:08.160 --> 0:20:11.600 going to allegedly do a big fiscal spin which will 0:20:11.680 --> 0:20:16.320 drive European growth, And so can we do the same 0:20:16.320 --> 0:20:17.200 thing on trade? 0:20:17.600 --> 0:20:18.920 I think so. 0:20:18.920 --> 0:20:25.119 So let's talk maybe about a specific situation. You recently 0:20:25.160 --> 0:20:30.560 sign an historic economic partnership with Ukraine, and as you said, 0:20:30.600 --> 0:20:34.920 there was a little few bumps along the way. Can 0:20:34.960 --> 0:20:38.080 you walk us through the role that the Treasury played 0:20:38.200 --> 0:20:41.680 and what is expected to come out of this agreement? 0:20:42.880 --> 0:20:51.120 And let's hold backwards that. I was amused, gratified. 0:20:52.400 --> 0:20:58.600 To see that on Saturday as I was coming out here. Friday, 0:20:58.640 --> 0:21:02.840 as I was coming out here, Washington Post lead headline 0:21:03.480 --> 0:21:10.160 was Russia now nervous after US Ukraine signed deal, and 0:21:11.080 --> 0:21:15.200 that I believe that this would happen in February. President 0:21:15.280 --> 0:21:18.199 Trump believed that it would happen in February. And this 0:21:18.359 --> 0:21:23.159 was President Trump's idea. He likes negotiating, as you know 0:21:23.880 --> 0:21:26.200 a lot of people in this room probably know, and 0:21:26.280 --> 0:21:31.400 he likes creating negotiating leverage for himself and the Ukraine 0:21:32.080 --> 0:21:36.400 Investment partnership. The economic partnership was his idea, and he 0:21:36.440 --> 0:21:41.200 believed that it would do several things. One, it would 0:21:41.240 --> 0:21:45.520 create more leverage for him with the Russian leadership when 0:21:45.640 --> 0:21:47.760 it was time to go to them. So the idea 0:21:47.960 --> 0:21:52.199 was start with Ukraine, sign a deal that shows that 0:21:52.200 --> 0:21:57.280 there is no daylight between the US and the Ukrainian people. 0:21:58.160 --> 0:22:00.359 It would be a symbol to Ukrainian people that the 0:22:00.480 --> 0:22:03.560 US is still there. It would be a symbol to 0:22:03.760 --> 0:22:10.280 a tired American public, skeptical of more financial commitments, that 0:22:11.080 --> 0:22:15.160 it was possible to have a shared prosperity with Ukraine. 0:22:16.080 --> 0:22:21.080 And then it would in essence be a tacit security 0:22:21.240 --> 0:22:25.959 guarantee because of the economic partnership. I went to and 0:22:26.080 --> 0:22:29.439 just to give you the timeline. So he tests me 0:22:30.440 --> 0:22:36.320 with throwing up the document speaking with Ukrainians. I thought 0:22:36.359 --> 0:22:38.520 it was a good idea to actually go to Kiev. 0:22:39.240 --> 0:22:43.879 For anyone who hasn't been you fly to Poland, you 0:22:43.960 --> 0:22:47.160 take a ten hour night train the end of Kiev, 0:22:47.160 --> 0:22:50.120 and you do that to keep from the getting shot down, 0:22:50.880 --> 0:22:57.280 and which good And everyone was saying, oh, look, this isn't. 0:22:57.119 --> 0:22:59.280 A good deal. This isn't a good deal. And I said, well, 0:22:59.720 --> 0:23:00.440 if it's. 0:23:00.200 --> 0:23:03.879 Not a good deal, why did the Russians bomb Kiev 0:23:04.800 --> 0:23:08.680 for the first time? So I went on February tenth, 0:23:08.960 --> 0:23:12.840 the Russians bomb Kiev at four in the morning for 0:23:12.880 --> 0:23:16.159 an hour for the first time since November because they 0:23:16.200 --> 0:23:20.359 knew the train arrived at eight and so before I 0:23:20.400 --> 0:23:23.880 got there. So if the Russians, if we were pro 0:23:23.960 --> 0:23:27.119 Russian and this was a terrible deal for the Ukrainians, 0:23:27.359 --> 0:23:29.000 why didn't the Russians want it signed? 0:23:29.440 --> 0:23:30.960 So then. 0:23:32.480 --> 0:23:35.320 President Zelenski elected not to sign it that day. He 0:23:35.400 --> 0:23:38.440 elected not to sign it. At the Munich Security Conference 0:23:38.440 --> 0:23:42.399 a few days later, there was a little incident at 0:23:42.400 --> 0:23:45.320 the White House. Some of you may have seen. President 0:23:45.359 --> 0:23:51.520 Trump called it great TV and when the deal went 0:23:51.600 --> 0:23:54.720 south that day. And I actually think in terms of 0:23:54.760 --> 0:23:58.439 the final deal, and I'm sure you everyone in this 0:23:58.560 --> 0:24:01.600 room has seen it that sometimes the blow up, you 0:24:01.680 --> 0:24:05.560 end up with a better deal. So February twenty eighth 0:24:05.760 --> 0:24:07.679 was the blow up in the Oval, and what was 0:24:07.720 --> 0:24:09.880 going to be signed that day was actually just. 0:24:09.880 --> 0:24:12.160 A four page memorandum of understanding. 0:24:12.600 --> 0:24:18.600 After that blow up, Treasury made the decision to try 0:24:18.600 --> 0:24:22.960 to make the blow up into an opportunity and my team. 0:24:23.119 --> 0:24:26.239 I instructed my team to go straight to writing the 0:24:26.240 --> 0:24:32.240 full agreement, which is six different agreements, varying lengths, but 0:24:32.800 --> 0:24:37.000 hundreds of pages. So we worked on that document, and 0:24:37.040 --> 0:24:41.840 then when there was the recovery and trust between President 0:24:41.880 --> 0:24:47.479 Trump president Zelenski after the meeting at the Vatican, we 0:24:47.560 --> 0:24:50.359 signed the deal a few days later. And look, I 0:24:50.359 --> 0:24:53.040 think it's win when what it is not is one 0:24:53.080 --> 0:24:54.960 of these rapacious Chinese deals. 0:24:55.400 --> 0:24:57.720 Sign here, it's a loan to own. 0:24:58.680 --> 0:25:00.960 You're going to default on the debt. We're going to 0:25:01.040 --> 0:25:06.159 own all your minerals, and that's life. This is economic partnership. 0:25:06.400 --> 0:25:09.720 They put in assets, we put in capital from the DFC, 0:25:09.800 --> 0:25:12.160 American best practices and know how. 0:25:12.200 --> 0:25:15.960 And it's fifty to fifty. It's equity, not debt. 0:25:16.240 --> 0:25:19.840 And some of our European partners were criticizing me at 0:25:19.840 --> 0:25:22.520 the G seven and I said, you know, you know, guys, 0:25:23.400 --> 0:25:25.520