1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,600 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,440 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,239 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,680 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,280 --> 00:00:33,919 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,000 --> 00:00:37,360 Speaker 2: Terminal and the Bloomberg Business app. The former US Vice 10 00:00:37,360 --> 00:00:40,760 Speaker 2: President Mike Pence taking a critical stance on President Trump's tariffs, 11 00:00:40,800 --> 00:00:42,920 Speaker 2: writing in a Wall Street Journal op ed in the 12 00:00:42,960 --> 00:00:45,680 Speaker 2: past few months that since the President announced his Liberation 13 00:00:45,800 --> 00:00:49,479 Speaker 2: Day tariffs, the only thing America has been limerated from 14 00:00:49,840 --> 00:00:52,680 Speaker 2: is trillions of dollars in investments. And pleased to say, 15 00:00:52,720 --> 00:00:55,400 Speaker 2: the forty eighth Vice President of the United States, Mike Pence, 16 00:00:55,800 --> 00:00:57,760 Speaker 2: joins us now for more. It's the vice president of Mornick. 17 00:00:58,120 --> 00:00:59,440 Speaker 3: Good morning, votes for having me on. 18 00:00:59,440 --> 00:01:00,840 Speaker 2: Thanks for being I want to pick up on a 19 00:01:00,920 --> 00:01:03,440 Speaker 2: question I know you've been exploring. What can forty seven 20 00:01:03,840 --> 00:01:07,040 Speaker 2: then from forty five. Let's start that, and silk Aback's right. 21 00:01:07,720 --> 00:01:10,679 Speaker 4: Well, well, first off, I'm want to give President Trump 22 00:01:10,720 --> 00:01:14,080 Speaker 4: all the credit in the world for a historic political comeback. 23 00:01:15,319 --> 00:01:18,959 Speaker 4: But in that Republican primary I was traveling as a 24 00:01:18,959 --> 00:01:23,640 Speaker 4: candidate in twenty twenty three, I mostly heard people saying, 25 00:01:23,680 --> 00:01:25,560 Speaker 4: we want to get back in the midst of the 26 00:01:25,600 --> 00:01:28,800 Speaker 4: failed economic policies of the Biden administration. We want to 27 00:01:28,800 --> 00:01:32,679 Speaker 4: get back to what the Trump pens administration was advancing. 28 00:01:33,200 --> 00:01:35,440 Speaker 4: And so in the Wall Street Journal I gave the 29 00:01:35,480 --> 00:01:39,399 Speaker 4: president great credit, high marks for securing the border, for 30 00:01:39,680 --> 00:01:42,840 Speaker 4: restoring morale and recruitment in our military, for taking the 31 00:01:42,840 --> 00:01:45,920 Speaker 4: fight to the Hoho Thies. Since then, I will talk 32 00:01:45,959 --> 00:01:49,560 Speaker 4: more later. I'm very encouraged about the strong stand that 33 00:01:49,600 --> 00:01:53,200 Speaker 4: the President is taking on the world stage, particularly in 34 00:01:53,240 --> 00:01:53,840 Speaker 4: the Middle. 35 00:01:53,600 --> 00:01:55,040 Speaker 3: East and in Eastern Europe. 36 00:01:55,880 --> 00:01:57,760 Speaker 4: But what I wanted to call attention to was the 37 00:01:58,080 --> 00:02:03,880 Speaker 4: policy toward tariffs was was changed with Liberation Day. During 38 00:02:03,920 --> 00:02:07,560 Speaker 4: our administration, we use tariffs in the threat of tariffs 39 00:02:08,320 --> 00:02:15,160 Speaker 4: principally focused on China to leverage changes in behavior, but 40 00:02:15,320 --> 00:02:19,919 Speaker 4: the objective was to essentially lower trade barriers and expand trade. 41 00:02:21,120 --> 00:02:24,040 Speaker 4: In this administration, I think what we saw several months ago, 42 00:02:24,160 --> 00:02:27,840 Speaker 4: now it's paused again happily, is the kind of broad 43 00:02:27,919 --> 00:02:32,600 Speaker 4: based industrial policy that I think ultimately will harm the 44 00:02:32,639 --> 00:02:37,720 Speaker 4: American economy, will harm American consumers, and so we've spoken 45 00:02:37,760 --> 00:02:40,680 Speaker 4: out against it. We've tried to take a stand. What 46 00:02:40,760 --> 00:02:43,520 Speaker 4: I like to say is free trade with free nations. 47 00:02:43,800 --> 00:02:47,080 Speaker 4: Be tough on China, be tough on trade abusers, but 48 00:02:47,680 --> 00:02:51,639 Speaker 4: have the objective of ultimately lowering trade barriers, and that's 49 00:02:51,639 --> 00:02:55,839 Speaker 4: how America wins and prospers. That's how we won during 50 00:02:55,880 --> 00:02:56,480 Speaker 4: our first term. 51 00:02:56,560 --> 00:03:00,000 Speaker 2: You've identified that change. What's your understanding of what's behind it, 52 00:03:00,120 --> 00:03:01,280 Speaker 2: what's lent that change? 53 00:03:02,080 --> 00:03:11,160 Speaker 4: Well, I think that what's changed is that I think 54 00:03:11,200 --> 00:03:14,360 Speaker 4: the president feels at least I perceive it. You know, 55 00:03:14,440 --> 00:03:17,240 Speaker 4: sometimes I tell people that I know President Trump better 56 00:03:17,280 --> 00:03:20,959 Speaker 4: than his most ardent defenders. We served together for four 57 00:03:20,960 --> 00:03:23,720 Speaker 4: and a half years. We had a close working relationship, 58 00:03:24,280 --> 00:03:27,800 Speaker 4: and I've said many times President Trump is not an isolationist. 59 00:03:29,000 --> 00:03:33,440 Speaker 4: He is someone deeply committed to free market capitalism. But 60 00:03:33,639 --> 00:03:36,920 Speaker 4: for all of his career he has been very sympathetic 61 00:03:36,960 --> 00:03:41,240 Speaker 4: to protectionist thinking in philosophy. You can go back thirty 62 00:03:41,360 --> 00:03:45,400 Speaker 4: years on YouTube and find Donald Trump saying the same 63 00:03:45,480 --> 00:03:48,920 Speaker 4: things that President Trump is saying today. He and I 64 00:03:49,000 --> 00:03:52,680 Speaker 4: had many vigorous conversations during our four years about trade. 65 00:03:53,000 --> 00:03:56,360 Speaker 4: I come from one of the leading exporting states in 66 00:03:56,400 --> 00:03:59,520 Speaker 4: the country. What we make, we grow in Indiana, we 67 00:03:59,720 --> 00:04:02,880 Speaker 4: sell to the world. But at the end of the day, 68 00:04:02,920 --> 00:04:06,280 Speaker 4: I think what you're seeing is not different influences around 69 00:04:07,040 --> 00:04:12,000 Speaker 4: President Trump. I think you're simply seeing him extending out 70 00:04:12,120 --> 00:04:15,480 Speaker 4: into a philosophy of government and economics that he has 71 00:04:15,520 --> 00:04:16,200 Speaker 4: long believed. 72 00:04:16,320 --> 00:04:19,480 Speaker 5: Were these impulses then there when he during the first 73 00:04:19,480 --> 00:04:24,680 Speaker 5: administration and individuals like you maybe talked him out of it, well, 74 00:04:24,920 --> 00:04:25,480 Speaker 5: I don't know. 75 00:04:25,440 --> 00:04:25,920 Speaker 3: That it was. 76 00:04:27,720 --> 00:04:30,880 Speaker 4: I mean, there were a few times that I saw 77 00:04:30,920 --> 00:04:33,040 Speaker 4: him change his mind on things, but I think it 78 00:04:33,080 --> 00:04:38,200 Speaker 4: was more about priorities in the first term, to make 79 00:04:38,240 --> 00:04:43,280 Speaker 4: sure that we passed the tax cuts, rolled back regulation, 80 00:04:43,440 --> 00:04:48,920 Speaker 4: unleashed American energy, and we changed the national consensus on China. 81 00:04:49,960 --> 00:04:52,680 Speaker 3: In China with its years of trade abuses. 82 00:04:52,520 --> 00:04:56,240 Speaker 4: And I played a leading role in articulating that in 83 00:04:56,279 --> 00:05:00,240 Speaker 4: the early going, and I'm incredibly proud of that record 84 00:04:59,400 --> 00:05:02,560 Speaker 4: and that at least the Biden administration didn't change the 85 00:05:02,640 --> 00:05:06,440 Speaker 4: tariff policy towards China. But for me it was more 86 00:05:06,480 --> 00:05:11,680 Speaker 4: about it was more about driving toward free trade agreement. 87 00:05:11,720 --> 00:05:14,760 Speaker 4: So I had the privilege of announcing the beginning of 88 00:05:14,839 --> 00:05:18,200 Speaker 4: a free trade agreement with UK at this in the 89 00:05:18,240 --> 00:05:22,440 Speaker 4: City of London. We renegotiated a free trade agreement with 90 00:05:22,520 --> 00:05:26,000 Speaker 4: South Korea that's back in the news this week with 91 00:05:26,640 --> 00:05:32,160 Speaker 4: new tariff threats, and I was leading with my counterpart 92 00:05:32,200 --> 00:05:35,320 Speaker 4: in Japan. I was actually tasked with leading a working 93 00:05:35,320 --> 00:05:40,400 Speaker 4: group for a free trade agreement with Japan. So for US, 94 00:05:40,800 --> 00:05:45,159 Speaker 4: it was that we saw an expansion of trade and 95 00:05:45,360 --> 00:05:49,080 Speaker 4: opening markets as a key part of American growth right now. 96 00:05:49,120 --> 00:05:53,080 Speaker 4: I actually believe that President Trump is driving toward a 97 00:05:53,160 --> 00:05:57,800 Speaker 4: long term change in industrial policy in America where he 98 00:05:58,000 --> 00:06:01,919 Speaker 4: sees permanent unilateral. 99 00:06:01,600 --> 00:06:04,799 Speaker 3: Trade tariff barriers. 100 00:06:04,320 --> 00:06:08,000 Speaker 4: As beneficial to America in the long term, and as 101 00:06:08,040 --> 00:06:11,719 Speaker 4: a free market conservative, as something I just don't embrace. 102 00:06:11,839 --> 00:06:14,400 Speaker 5: Can you do that and isolate China with the rest 103 00:06:14,440 --> 00:06:17,239 Speaker 5: of the world on board at the same time, Well, a, Marie. 104 00:06:17,120 --> 00:06:19,680 Speaker 3: I think that's the right question that. 105 00:06:21,880 --> 00:06:24,160 Speaker 4: Senator Phil Graham, we had on Capitol Hill with our 106 00:06:24,279 --> 00:06:28,800 Speaker 4: foundation yesterday, had over one hundred staffers that came out 107 00:06:28,839 --> 00:06:31,159 Speaker 4: to hear him He had probably the best description of it. 108 00:06:31,240 --> 00:06:31,679 Speaker 3: He said. 109 00:06:33,320 --> 00:06:37,799 Speaker 4: He said, by going after all of the free nations 110 00:06:37,800 --> 00:06:40,800 Speaker 4: that you're trading with at the same time that you're 111 00:06:40,839 --> 00:06:46,120 Speaker 4: trying to bring China farther along in opening markets and 112 00:06:46,440 --> 00:06:50,200 Speaker 4: ending years of trade abuses, he said, it's like it's 113 00:06:50,240 --> 00:06:53,960 Speaker 4: like dismissing your front line in a football game and 114 00:06:54,200 --> 00:06:56,279 Speaker 4: expecting that you're going to take on the other side. Look, 115 00:06:56,320 --> 00:06:59,960 Speaker 4: we need Japan, we need South Korea, we need Australia, 116 00:07:00,120 --> 00:07:04,520 Speaker 4: we need the EU to continue to bring the kind 117 00:07:04,600 --> 00:07:08,800 Speaker 4: of economic pressure on China that I believe is all 118 00:07:08,839 --> 00:07:12,920 Speaker 4: that President g and the Chinese Communist Party will will respect. 119 00:07:13,000 --> 00:07:14,080 Speaker 3: We saw some change. 120 00:07:14,120 --> 00:07:17,000 Speaker 4: Remember that Phase one trade deal in the early days 121 00:07:17,000 --> 00:07:19,320 Speaker 4: of twenty twenty. Most people have long since forgotten it. 122 00:07:19,360 --> 00:07:23,120 Speaker 4: There were bigger stories that year by far, but we 123 00:07:23,200 --> 00:07:25,560 Speaker 4: saw the China when we imposed those two hundred and 124 00:07:25,560 --> 00:07:28,800 Speaker 4: fifty billion dollars in tariffs. The Chinese came to the 125 00:07:28,800 --> 00:07:34,480 Speaker 4: table quickly and began negotiations. And I still believe that's 126 00:07:34,520 --> 00:07:38,160 Speaker 4: the right approach, with free trade, with free nations being 127 00:07:38,200 --> 00:07:38,760 Speaker 4: the backstop. 128 00:07:38,880 --> 00:07:41,119 Speaker 6: Mister Vice President, I want to pick out a line 129 00:07:41,280 --> 00:07:43,440 Speaker 6: in that Wall Street Journal up ed that John was 130 00:07:43,480 --> 00:07:46,200 Speaker 6: mentioning that you wrote, mister Trump's proposed tariffs would be 131 00:07:46,200 --> 00:07:49,200 Speaker 6: the largest peacetime hike in American history, harming consumers and 132 00:07:49,280 --> 00:07:53,840 Speaker 6: driving inflation. President Trump his administration has been talking about 133 00:07:53,840 --> 00:07:56,680 Speaker 6: they're not going to be inflationary, that the producers and 134 00:07:56,760 --> 00:07:59,280 Speaker 6: other countries are going to absorb it. Are you seeing 135 00:07:59,320 --> 00:08:02,200 Speaker 6: evidence that that's not the case. Are you really concerned 136 00:08:02,240 --> 00:08:04,640 Speaker 6: about what this does to the economy? 137 00:08:05,200 --> 00:08:09,240 Speaker 4: Well, I really am, and I understand that that's the 138 00:08:09,280 --> 00:08:13,520 Speaker 4: debate right now. We haven't seen the inflation from Liberation Day, 139 00:08:13,560 --> 00:08:15,680 Speaker 4: and I think there's several reasons to explain that. 140 00:08:16,840 --> 00:08:18,000 Speaker 3: Number one is. 141 00:08:19,760 --> 00:08:25,040 Speaker 4: The teriff regime was paused and has now been paused again, 142 00:08:25,240 --> 00:08:29,000 Speaker 4: and the markets and are responding to that, and businesses 143 00:08:29,040 --> 00:08:31,640 Speaker 4: are responding. Secondly, I got to tell you the businesses 144 00:08:31,680 --> 00:08:34,120 Speaker 4: I talked to as I travel around the country have 145 00:08:34,200 --> 00:08:37,600 Speaker 4: been spending an awful lot of money on inventory right now. 146 00:08:38,200 --> 00:08:40,439 Speaker 4: You know, there's an old saying where I come from 147 00:08:40,480 --> 00:08:41,840 Speaker 4: that you know, I was born in the morning, but 148 00:08:41,880 --> 00:08:46,360 Speaker 4: not yesterday morning. So people say that these tariffs are common, 149 00:08:46,600 --> 00:08:49,040 Speaker 4: So why don't we Why don't we fill the warehouse 150 00:08:49,120 --> 00:08:52,440 Speaker 4: right now? And I think that's wise but you know, 151 00:08:52,520 --> 00:08:55,760 Speaker 4: at the end of the day, I also think that 152 00:08:56,600 --> 00:08:59,000 Speaker 4: you know, the President on Liberation Day talked about twenty 153 00:08:59,000 --> 00:09:04,800 Speaker 4: five fifty seventy percent tariffs on countries, and seeing some 154 00:09:04,920 --> 00:09:08,280 Speaker 4: of these early frameworks that end up with the UK 155 00:09:08,520 --> 00:09:12,400 Speaker 4: with ten percent, there's a temptation to say, well, that's 156 00:09:12,640 --> 00:09:15,400 Speaker 4: just ten percent, And so I think that's the reason 157 00:09:15,400 --> 00:09:19,480 Speaker 4: why markets, so my businesses have not adjusted prices yet. 158 00:09:20,240 --> 00:09:23,439 Speaker 4: But if we have a unilateral tariff of ten percent 159 00:09:23,600 --> 00:09:26,240 Speaker 4: on the American economy of all imported goods, that's four 160 00:09:26,320 --> 00:09:31,720 Speaker 4: times the average tariff today. And the reality is that 161 00:09:32,360 --> 00:09:33,839 Speaker 4: I watch, you know, I spent a lot of time 162 00:09:33,880 --> 00:09:37,640 Speaker 4: in that cabinet room. I watched a little bit of 163 00:09:37,640 --> 00:09:40,880 Speaker 4: the cabinet meeting this week, and I saw Secretary Vessant 164 00:09:41,679 --> 00:09:46,160 Speaker 4: speaking very glowingly about the projection is three hundred billion 165 00:09:46,240 --> 00:09:52,000 Speaker 4: dollars in tariff revenue this year. Well, tariffs are attax 166 00:09:52,920 --> 00:09:59,440 Speaker 4: and American importers and businesses and ultimately consumers pay almost 167 00:09:59,480 --> 00:10:02,720 Speaker 4: all of that. And so literally a week after we 168 00:10:02,880 --> 00:10:06,040 Speaker 4: managed to extend the Trumpets tax cuts and prevent a 169 00:10:06,080 --> 00:10:10,559 Speaker 4: two thousand dollars tax increase on working families, the administration 170 00:10:10,760 --> 00:10:12,200 Speaker 4: is right now boasting. 171 00:10:11,800 --> 00:10:12,720 Speaker 3: Of the fact that. 172 00:10:14,840 --> 00:10:17,079 Speaker 4: The average American household is going to see about three 173 00:10:17,080 --> 00:10:22,360 Speaker 4: thousand dollars increase in the cost of goods because we're 174 00:10:22,440 --> 00:10:25,880 Speaker 4: paying that. So that's why I referred to a liberation day. 175 00:10:25,920 --> 00:10:28,720 Speaker 4: I said, could well be the largest peacetime tax hike 176 00:10:28,760 --> 00:10:32,360 Speaker 4: in American history. We've been pushing back on that. I 177 00:10:32,440 --> 00:10:37,040 Speaker 4: welcome the pauses, but I I really do believe the 178 00:10:37,080 --> 00:10:40,720 Speaker 4: antidote here is free trade with free nations. Tough on China, 179 00:10:41,360 --> 00:10:46,439 Speaker 4: but continue continue to drive toward lowering trade barriers and 180 00:10:48,920 --> 00:10:50,280 Speaker 4: you know, non tariff subsidient. 181 00:10:50,320 --> 00:10:52,439 Speaker 2: He reflects the inflation risk. The White House of don't 182 00:10:52,440 --> 00:10:54,959 Speaker 2: say like this feder af to cut interest rates. You've 183 00:10:55,000 --> 00:10:56,439 Speaker 2: been in the room a few times. I'm sure it's 184 00:10:56,440 --> 00:10:59,120 Speaker 2: talking about this federic f How did the president end 185 00:10:59,200 --> 00:11:03,040 Speaker 2: up with a the heat dislikes so much? How did 186 00:11:03,040 --> 00:11:03,520 Speaker 2: that happen? 187 00:11:04,160 --> 00:11:08,240 Speaker 4: Well, well, I've been watching a lot of what the 188 00:11:08,240 --> 00:11:10,520 Speaker 4: presidents had to say about Jay Powell lately. 189 00:11:10,320 --> 00:11:14,080 Speaker 3: And. 190 00:11:13,760 --> 00:11:17,679 Speaker 4: He did appoint him, So it's part of the awkward 191 00:11:18,120 --> 00:11:20,559 Speaker 4: aspect here. Well, first, I think the President of the 192 00:11:20,640 --> 00:11:24,960 Speaker 4: United States is fully entitled to express his opinion about 193 00:11:25,000 --> 00:11:28,240 Speaker 4: both the FED chair and about the Federal Reserve itself. 194 00:11:28,320 --> 00:11:32,520 Speaker 4: I have long had great concerns about the dual. 195 00:11:32,240 --> 00:11:33,920 Speaker 3: Mandate and the Federal Reserve. 196 00:11:33,960 --> 00:11:36,520 Speaker 4: I think it confuses the issue, and the Federal Reserve 197 00:11:36,600 --> 00:11:39,920 Speaker 4: has his for your viewers, has a dual mandate to 198 00:11:39,920 --> 00:11:43,479 Speaker 4: protect the integrity of the dollar and achieve full employment. 199 00:11:44,640 --> 00:11:47,240 Speaker 4: I think the Federal Reserve ought to just focus on 200 00:11:47,360 --> 00:11:50,920 Speaker 4: the dollar. And I think that the hesitation that I 201 00:11:50,960 --> 00:11:55,520 Speaker 4: have seen from the Fed chair and ostensibly the Committee 202 00:11:56,440 --> 00:12:00,880 Speaker 4: is that the uncertainty around these broad based tariffs and 203 00:12:00,920 --> 00:12:06,040 Speaker 4: the potential for inflation has slowed their intention and and 204 00:12:06,160 --> 00:12:08,880 Speaker 4: their earlier efforts at at lowering rates. 205 00:12:08,960 --> 00:12:09,439 Speaker 3: And so. 206 00:12:11,440 --> 00:12:15,360 Speaker 4: How the President got to where he can he considers 207 00:12:16,120 --> 00:12:19,240 Speaker 4: the Federal Reserve chairman to be worthy of the nickname 208 00:12:19,280 --> 00:12:23,440 Speaker 4: too late. I can't really testify, but but to me, 209 00:12:23,840 --> 00:12:27,439 Speaker 4: you're pushing back on on the idea that what's what 210 00:12:27,840 --> 00:12:30,120 Speaker 4: seems to be holding up the Federal Reserve. Although I 211 00:12:30,120 --> 00:12:33,120 Speaker 4: read this morning there's now more vigorous debate. I'm sure 212 00:12:33,120 --> 00:12:38,400 Speaker 4: you've covered here on Bloomberg on the Committee as that 213 00:12:38,880 --> 00:12:41,559 Speaker 4: there we may have lowering of interest rates, which certainly 214 00:12:41,600 --> 00:12:42,120 Speaker 4: would welcome. 215 00:12:42,160 --> 00:12:44,200 Speaker 2: As you know, the President one of his greatest strengths 216 00:12:44,200 --> 00:12:46,199 Speaker 2: is to break the status quaid and have very little 217 00:12:46,200 --> 00:12:49,160 Speaker 2: respect for it. That limits to that, and it's fed 218 00:12:49,200 --> 00:12:50,719 Speaker 2: independence and example of it. 219 00:12:51,960 --> 00:12:56,480 Speaker 4: That's that's right, and I think, look, the President appoints 220 00:12:56,760 --> 00:13:00,640 Speaker 4: the chairman of the Federal Reserve, and a careful study 221 00:13:00,640 --> 00:13:03,760 Speaker 4: of American history shows I don't really accept that the 222 00:13:03,760 --> 00:13:06,559 Speaker 4: Federal Reserve should be a completely. 223 00:13:07,559 --> 00:13:09,839 Speaker 3: Separate agency, you. 224 00:13:09,800 --> 00:13:12,320 Speaker 4: Know, like a college of cardinals that we never refer 225 00:13:12,440 --> 00:13:16,120 Speaker 4: to other than in respectful hush tones. John, I think 226 00:13:16,200 --> 00:13:19,360 Speaker 4: the president ought to be able to express himself. Elected 227 00:13:19,360 --> 00:13:21,760 Speaker 4: officials ought to be able to express themselves, because it's 228 00:13:21,760 --> 00:13:24,200 Speaker 4: almost like that old saying about the Supreme Court. You 229 00:13:24,200 --> 00:13:27,920 Speaker 4: know that justices do read the newspaper, and I expect 230 00:13:27,960 --> 00:13:30,199 Speaker 4: that's also true of members of the Federal Reserve. 231 00:13:30,400 --> 00:13:32,760 Speaker 2: You have taken a balance view on the current administration. 232 00:13:32,880 --> 00:13:35,680 Speaker 2: You've been somewhat critically of trained. We've discussed that, I 233 00:13:35,679 --> 00:13:38,200 Speaker 2: would say ringing endulsement about that approach to the Middle East. 234 00:13:38,360 --> 00:13:40,719 Speaker 2: So let's talk about that. You know where you were 235 00:13:40,760 --> 00:13:43,520 Speaker 2: in your first term with the president, where he is 236 00:13:43,559 --> 00:13:45,680 Speaker 2: in his second term, and what went wrong in between 237 00:13:46,040 --> 00:13:48,600 Speaker 2: from your standpoint on the Middle East. 238 00:13:49,520 --> 00:13:54,920 Speaker 4: Well, I just think when Joe Biden returned to a 239 00:13:55,040 --> 00:14:00,920 Speaker 4: policy of appeasement toward Iran, it really in bold UH 240 00:14:00,960 --> 00:14:04,600 Speaker 4: the enemies UH of Israel across UH the region. I 241 00:14:04,600 --> 00:14:09,440 Speaker 4: I I traveled to Israel in about six months UH 242 00:14:09,480 --> 00:14:13,000 Speaker 4: after October seventh and saw what occurred there, and I 243 00:14:13,000 --> 00:14:14,480 Speaker 4: I would tell you it's one of the things I'm 244 00:14:14,480 --> 00:14:17,120 Speaker 4: probably most proud of our administration. 245 00:14:17,360 --> 00:14:20,200 Speaker 3: And not only did UH did we we. 246 00:14:20,240 --> 00:14:23,920 Speaker 4: Changed the national consensus on China, but UH we were 247 00:14:23,960 --> 00:14:29,440 Speaker 4: probably UH the most pro Israel administration since the re 248 00:14:29,560 --> 00:14:32,000 Speaker 4: establishment of the State of Israel in nineteen forty eight. 249 00:14:32,360 --> 00:14:35,520 Speaker 4: There's just simply to recognize it. Moving the American embassy 250 00:14:35,560 --> 00:14:39,120 Speaker 4: to Jerusalem, recognizing the gol Onites, these were all historic 251 00:14:39,160 --> 00:14:44,080 Speaker 4: achievements that everyone told us would foment violence and discord 252 00:14:44,440 --> 00:14:47,880 Speaker 4: UH across the Middle East. But again, another twenty twenty 253 00:14:47,960 --> 00:14:50,440 Speaker 4: story that is long forgotten by many. 254 00:14:50,280 --> 00:14:52,200 Speaker 3: People's the Abraham. 255 00:14:52,200 --> 00:14:55,040 Speaker 4: Of course, I mean we we actually imonstrated that when 256 00:14:55,080 --> 00:14:59,360 Speaker 4: you stand without UH w W in an unwavering way 257 00:14:59,720 --> 00:15:02,720 Speaker 4: with with Israel that I call our most cherished ally 258 00:15:03,480 --> 00:15:08,120 Speaker 4: throughout our history, it sends a very clear scegnal that 259 00:15:08,160 --> 00:15:11,560 Speaker 4: makes peace more possible. Not less possible. We also isolated 260 00:15:12,400 --> 00:15:16,720 Speaker 4: Iran as never before. We unleashed our military to take 261 00:15:16,760 --> 00:15:21,240 Speaker 4: down the ISIS Caliphate, and of course the President made 262 00:15:21,280 --> 00:15:24,280 Speaker 4: the decision to take down Accustom Solomoni, the head of 263 00:15:24,280 --> 00:15:30,320 Speaker 4: the Iran Revolutionary Guard. All of that had Iran on 264 00:15:30,360 --> 00:15:34,040 Speaker 4: its back heels. The Biden administration changed that went back 265 00:15:34,080 --> 00:15:36,720 Speaker 4: to the Obama approach of re engaging with the Mullahs 266 00:15:36,760 --> 00:15:41,040 Speaker 4: in Tehran. I think they were emboldened the violence that 267 00:15:41,080 --> 00:15:45,720 Speaker 4: we saw, whether it be October seventh with Hamas one 268 00:15:45,720 --> 00:15:50,000 Speaker 4: of their patron groups, where the Houthis all were a 269 00:15:50,080 --> 00:15:54,560 Speaker 4: resultd I've always believed that that weakness arouses evil, but 270 00:15:54,840 --> 00:15:58,480 Speaker 4: peace comes through strength, and the weakness of the Biden 271 00:15:58,480 --> 00:16:02,720 Speaker 4: administration I think created the conditions for the mayhem that 272 00:16:03,640 --> 00:16:07,520 Speaker 4: the new Trump administration inherited. And that's why I've been 273 00:16:07,520 --> 00:16:11,520 Speaker 4: so encouraged to see the strong stand the President has 274 00:16:11,560 --> 00:16:18,800 Speaker 4: taken with Israel. We publicly encouraged the use of American 275 00:16:18,800 --> 00:16:19,800 Speaker 4: military assets. 276 00:16:20,360 --> 00:16:22,560 Speaker 3: If Iran was not willing to dismantle their. 277 00:16:22,560 --> 00:16:26,400 Speaker 4: Nuclear program, I believe it needed to be destroyed, and 278 00:16:26,760 --> 00:16:30,320 Speaker 4: I commend the President for his decisive leadership in our 279 00:16:30,360 --> 00:16:34,040 Speaker 4: incredible airman who delivered those payloads. 280 00:16:34,200 --> 00:16:36,720 Speaker 5: You welcomed those strikes on the Irani nuclear facilities. But 281 00:16:36,760 --> 00:16:39,440 Speaker 5: the President still talks about a deal with Iran. Do 282 00:16:39,480 --> 00:16:42,080 Speaker 5: you think he'll do a deal at any cost? 283 00:16:44,000 --> 00:16:45,520 Speaker 3: Well, I hope not. 284 00:16:45,680 --> 00:16:48,080 Speaker 4: I said in that Wall Street Journal piece that you cited. 285 00:16:48,840 --> 00:16:52,480 Speaker 4: It was about two months ago, and one of my concerns, 286 00:16:52,520 --> 00:16:55,080 Speaker 4: in addition to some of the tariff issues that we 287 00:16:55,120 --> 00:16:58,640 Speaker 4: talked about, was that a lot of what we were 288 00:16:58,640 --> 00:17:02,280 Speaker 4: hearing from the administration in the first hundred days sounded 289 00:17:02,280 --> 00:17:06,280 Speaker 4: an awful lot like a new Iran nuclear deal, and 290 00:17:07,119 --> 00:17:09,080 Speaker 4: we pushed back on that pretty hard. 291 00:17:09,480 --> 00:17:10,359 Speaker 3: And I. 292 00:17:11,960 --> 00:17:17,920 Speaker 4: My hope is that the President, having seen both the 293 00:17:18,359 --> 00:17:22,080 Speaker 4: run up to the need for American action and also 294 00:17:22,119 --> 00:17:27,920 Speaker 4: the response by the Malus in Tehran, we'll keep He'll 295 00:17:28,000 --> 00:17:32,760 Speaker 4: keep his hand on the holster and look ultimately for 296 00:17:33,240 --> 00:17:36,840 Speaker 4: achieving the objective that that has been the stated US 297 00:17:36,920 --> 00:17:39,959 Speaker 4: policy through multiple administrations that Ran can never be allowed 298 00:17:40,000 --> 00:17:43,800 Speaker 4: to obtain a nuclear weapon or have a nuclear program 299 00:17:43,800 --> 00:17:44,400 Speaker 4: of any kind. 300 00:17:44,480 --> 00:17:46,760 Speaker 5: When it comes to foreign policy, you've been very critical 301 00:17:46,840 --> 00:17:50,280 Speaker 5: and hawkish on Russia. In the debate when you were 302 00:17:50,760 --> 00:17:52,879 Speaker 5: running with President Trump in the first term, you called 303 00:17:52,960 --> 00:17:56,360 Speaker 5: putin a small and bullying dictator. Why do you think 304 00:17:56,359 --> 00:17:59,200 Speaker 5: Trump has only just started changing his tune when it 305 00:17:59,200 --> 00:17:59,880 Speaker 5: comes to Vladimir. 306 00:18:02,080 --> 00:18:04,920 Speaker 3: Well, I've never had any illusions about Vladimir Putin. No, 307 00:18:05,040 --> 00:18:09,440 Speaker 3: but President Trump has Well, that remains to be seen. 308 00:18:10,440 --> 00:18:13,080 Speaker 4: I would tell you that, you know, I was on 309 00:18:13,119 --> 00:18:15,280 Speaker 4: the Foreign Affairs Committee when I was in the Congress. 310 00:18:15,920 --> 00:18:18,880 Speaker 4: I've been a student of Vladimir Putin. He's never made 311 00:18:18,880 --> 00:18:22,639 Speaker 4: a secret of his ambitions in Eastern Europe. It's something 312 00:18:22,680 --> 00:18:27,040 Speaker 4: he's spoken about, written about. His aim has always been 313 00:18:27,960 --> 00:18:31,080 Speaker 4: to re establish the old Soviet sphere of influence in 314 00:18:31,119 --> 00:18:33,679 Speaker 4: Eastern Europe. And I really do believe it was our 315 00:18:33,720 --> 00:18:37,600 Speaker 4: administration in the Trump Pence years that were the first 316 00:18:37,680 --> 00:18:41,359 Speaker 4: to literally provide lethal aid to Ukraine. I think that's 317 00:18:41,440 --> 00:18:45,760 Speaker 4: what discouraged Putin from crossing. 318 00:18:45,320 --> 00:18:47,000 Speaker 3: That border during those four years. 319 00:18:47,400 --> 00:18:50,800 Speaker 4: Forget, and I think it continues to be the only 320 00:18:50,840 --> 00:18:52,040 Speaker 4: pathway toward peace today. 321 00:18:52,119 --> 00:18:54,720 Speaker 6: But forgive me, mister Vice President, to go back to 322 00:18:54,760 --> 00:18:57,840 Speaker 6: Emory's question, what's changed? Because right now we've seen a 323 00:18:57,840 --> 00:19:02,359 Speaker 6: president who's warned against Russia doing crossing certain real lines 324 00:19:02,359 --> 00:19:06,320 Speaker 6: that Russia's crossed, and then the sanctions haven't come. Right, 325 00:19:06,440 --> 00:19:07,640 Speaker 6: what do you think is going on. 326 00:19:07,880 --> 00:19:09,600 Speaker 3: Well, I'm hopeful that they will. 327 00:19:10,240 --> 00:19:14,080 Speaker 4: What makes you I am I've seen some statements by 328 00:19:14,720 --> 00:19:18,200 Speaker 4: my friend Senator Lindsey Graham, who just in the last 329 00:19:18,240 --> 00:19:21,160 Speaker 4: few days said that the President told him to move 330 00:19:21,200 --> 00:19:28,239 Speaker 4: the bill, and these new Russia sanctions, which are the 331 00:19:28,359 --> 00:19:31,520 Speaker 4: secondary sanctions against people that are doing business with Russia 332 00:19:31,520 --> 00:19:36,000 Speaker 4: that are subsidizing the war effort by oil purchases and 333 00:19:36,119 --> 00:19:40,360 Speaker 4: energy purchases, I think can be enormously impactful. 334 00:19:40,520 --> 00:19:45,280 Speaker 3: But you know, I would I would say that, you. 335 00:19:45,200 --> 00:19:56,640 Speaker 4: Know, I've made it very clear that that my deep 336 00:19:56,680 --> 00:20:02,560 Speaker 4: conviction is Vladimir Putin doesn't want piece. Vladimir Putin wants Ukraine, 337 00:20:03,320 --> 00:20:07,359 Speaker 4: and despite the stops and starts that gave him any 338 00:20:07,400 --> 00:20:12,199 Speaker 4: of US concern, including that famous Oval Office meeting between 339 00:20:12,200 --> 00:20:15,880 Speaker 4: the President and President Zelenski, who I came to know, well, 340 00:20:17,480 --> 00:20:21,760 Speaker 4: I sense that my old running mate is coming around 341 00:20:21,760 --> 00:20:26,359 Speaker 4: to recognizing Putin's real intentions here. I mean when I 342 00:20:26,400 --> 00:20:34,040 Speaker 4: think that the the clear irritation in the President's voice 343 00:20:34,040 --> 00:20:37,560 Speaker 4: of having a conversation and then to see some of 344 00:20:37,560 --> 00:20:40,840 Speaker 4: the some of the worst drone attacks launched in Kiev 345 00:20:40,960 --> 00:20:47,800 Speaker 4: within a matter of hours, is I think having its effect. 346 00:20:47,960 --> 00:20:52,000 Speaker 4: But look, I just think that I was pleased that 347 00:20:52,119 --> 00:20:55,120 Speaker 4: the President countermanded what had been a pause of aid 348 00:20:55,200 --> 00:21:03,320 Speaker 4: to Ukraine last week, which I think was unfortunate wherever 349 00:21:03,359 --> 00:21:07,240 Speaker 4: it originated. But I commend the President for reversing that decision. 350 00:21:08,160 --> 00:21:12,240 Speaker 4: And my hope is when the Senate reconvenes that Senator 351 00:21:12,280 --> 00:21:16,840 Speaker 4: Thunal will put the Graham Bill on the floor and 352 00:21:17,480 --> 00:21:18,800 Speaker 4: put it on the President's desk. 353 00:21:18,840 --> 00:21:22,439 Speaker 3: I think it's time, and it's my judgment. 354 00:21:22,480 --> 00:21:25,119 Speaker 4: I've met Vladimir Putin. I've stood with him closer than 355 00:21:25,160 --> 00:21:27,760 Speaker 4: I'm sitting next to you. I've told him things he 356 00:21:27,800 --> 00:21:33,159 Speaker 4: didn't want to hear, and I think he is I 357 00:21:33,200 --> 00:21:36,960 Speaker 4: think he is not a man who understands anything other 358 00:21:37,040 --> 00:21:41,920 Speaker 4: than strength. And this is a moment, I think where 359 00:21:42,240 --> 00:21:44,240 Speaker 4: it's in the interest of our country, it's in the 360 00:21:44,280 --> 00:21:48,200 Speaker 4: interest of our allies in the region and long term 361 00:21:48,240 --> 00:21:50,920 Speaker 4: peace in Eastern Europe for US to continue to provide 362 00:21:50,960 --> 00:21:56,760 Speaker 4: military support to Ukraine, to put punishing sanctions on Russia 363 00:21:57,080 --> 00:21:59,320 Speaker 4: until the just and lasting peace can be secured. 364 00:22:00,119 --> 00:22:03,000 Speaker 2: President, I appreciate your time, sir, enjoyed the conversation. 365 00:22:03,280 --> 00:22:04,560 Speaker 3: Great, it's going to say it. Thank you. 366 00:22:05,040 --> 00:22:07,320 Speaker 2: The former Vice President of the United States. There Mike 367 00:22:07,400 --> 00:22:19,800 Speaker 2: Plans joining US non plays the science Bloomberg's mid Men 368 00:22:19,840 --> 00:22:22,080 Speaker 2: Low from Kuala Lumpa, Midmen, good. 369 00:22:21,880 --> 00:22:26,920 Speaker 3: Morning, good morning. 370 00:22:27,000 --> 00:22:28,920 Speaker 7: Yes, I'm here the Asian Summit and it's a big 371 00:22:29,000 --> 00:22:31,560 Speaker 7: day because the Asian foreign ministers are meeting with many 372 00:22:31,600 --> 00:22:35,600 Speaker 7: key dialogue partners, including the envoye from Career, Japan, China, 373 00:22:35,680 --> 00:22:38,080 Speaker 7: the US, and of course the EU as well. And 374 00:22:38,200 --> 00:22:41,600 Speaker 7: joining me here is the EU's top diplomat, Kayak Kalas. 375 00:22:41,880 --> 00:22:44,720 Speaker 7: Thank you so much for making time. So tariffs have 376 00:22:44,840 --> 00:22:48,080 Speaker 7: been looing very large over this entire summit. The EU 377 00:22:48,200 --> 00:22:51,200 Speaker 7: hasn't yet received that letter from Trump. What is your 378 00:22:51,240 --> 00:22:53,520 Speaker 7: team expecting to see you, whether that let it comes, 379 00:22:53,560 --> 00:22:57,120 Speaker 7: any specific coverouts in particular that you're expecting to have achieved. 380 00:22:57,640 --> 00:23:00,919 Speaker 8: Well. Of course, sir, trade team is working very hard 381 00:23:01,760 --> 00:23:05,919 Speaker 8: to get good agreement, but at the same time we 382 00:23:05,960 --> 00:23:09,840 Speaker 8: are also working with other countries like here in Southeast 383 00:23:09,840 --> 00:23:14,119 Speaker 8: Asia or in the world to have trade deals and 384 00:23:14,240 --> 00:23:18,560 Speaker 8: trade agreement agreements to diversify our trade portfolios. 385 00:23:18,920 --> 00:23:21,920 Speaker 7: Okay, so the Chinese Forum MINUSA one is here as well. 386 00:23:22,280 --> 00:23:25,080 Speaker 7: Are you going to meet him to maybe stabilize relations 387 00:23:25,119 --> 00:23:27,520 Speaker 7: a little bit? Because it seems like that you China 388 00:23:28,680 --> 00:23:31,560 Speaker 7: sub it might be partially derailed from what we have 389 00:23:31,640 --> 00:23:32,480 Speaker 7: reported before. 390 00:23:33,680 --> 00:23:38,760 Speaker 8: Well, we had a good meeting in Brussels with my 391 00:23:38,920 --> 00:23:42,879 Speaker 8: counterpart and we are discussing it's the same format that 392 00:23:42,960 --> 00:23:46,840 Speaker 8: we have had in twenty twenty three the summit then, 393 00:23:46,960 --> 00:23:50,800 Speaker 8: and and it's important the substance. What are we discussing? 394 00:23:51,119 --> 00:23:53,240 Speaker 7: But you're cutting a shot and you're you're not bringing 395 00:23:53,280 --> 00:23:54,359 Speaker 7: any additional business. 396 00:23:54,440 --> 00:23:58,800 Speaker 8: Now, there was there was no no you know plan 397 00:23:59,119 --> 00:24:03,000 Speaker 8: that was that was the question that that actually wasn't 398 00:24:03,119 --> 00:24:07,120 Speaker 8: clear how China wants to hold this summit and now 399 00:24:07,160 --> 00:24:10,639 Speaker 8: we know that it's one day, and what kind of 400 00:24:10,680 --> 00:24:13,359 Speaker 8: meetings we have and what discussions we have. 401 00:24:13,720 --> 00:24:16,760 Speaker 7: What is your response to China's assertion that the EU's 402 00:24:17,200 --> 00:24:20,399 Speaker 7: public percubin has been unfair, that the EU does have 403 00:24:20,480 --> 00:24:25,080 Speaker 7: its own immense subsidies for its manufacturers and producers as well. 404 00:24:25,200 --> 00:24:26,760 Speaker 7: Is there a double standard being applied. 405 00:24:27,200 --> 00:24:32,679 Speaker 8: No, Well, our subsidies are in accordance with the WTO rules. 406 00:24:32,440 --> 00:24:34,960 Speaker 3: So this is very very clear. 407 00:24:35,359 --> 00:24:38,240 Speaker 8: We want a level playing fields. We are very worried 408 00:24:38,280 --> 00:24:41,320 Speaker 8: about the economic version of China, and we are also 409 00:24:41,359 --> 00:24:46,560 Speaker 8: worried about they're enabling Russia's war in Ukraine. So these 410 00:24:46,560 --> 00:24:47,720 Speaker 8: are the two big. 411 00:24:47,480 --> 00:24:48,119 Speaker 3: Issues we have. 412 00:24:48,720 --> 00:24:51,600 Speaker 7: Let's talk about Gaza because President Trump said that a 413 00:24:51,640 --> 00:24:54,040 Speaker 7: ceasfire could be insight this week or next week. What 414 00:24:54,160 --> 00:24:57,400 Speaker 7: you envision as the EU's role in supporting that ceasfire. 415 00:24:57,920 --> 00:25:00,720 Speaker 8: Well, we have been working very hard since the last 416 00:25:00,760 --> 00:25:04,280 Speaker 8: Foreign Affairs Council that we had in Brussels with these 417 00:25:04,320 --> 00:25:07,359 Speaker 8: reel is to really improve the situation on the ground 418 00:25:07,359 --> 00:25:10,320 Speaker 8: with the humanitarian aid for the people, so that the 419 00:25:10,359 --> 00:25:15,000 Speaker 8: situation would be better. We achieved an agreement on very 420 00:25:15,040 --> 00:25:18,640 Speaker 8: concrete terms, how many trucks will get in, how many 421 00:25:18,680 --> 00:25:23,879 Speaker 8: crossings will be opened, distribution points so that people would 422 00:25:24,680 --> 00:25:28,800 Speaker 8: receive help of water distribution for the Gazan people, so 423 00:25:28,920 --> 00:25:31,600 Speaker 8: waste management, a lot of a lot of issues. We 424 00:25:31,760 --> 00:25:35,240 Speaker 8: reached an agreement and we really need to see also 425 00:25:35,840 --> 00:25:40,399 Speaker 8: this agreement put in practice the implementation and I'm glad 426 00:25:40,480 --> 00:25:45,320 Speaker 8: to hear that already today there were improvements like fuel 427 00:25:45,680 --> 00:25:49,960 Speaker 8: getting to the hospitals and you know, the situation being 428 00:25:50,000 --> 00:25:50,840 Speaker 8: a bit improved. 429 00:25:50,960 --> 00:25:51,160 Speaker 1: Right. 430 00:25:51,520 --> 00:25:54,560 Speaker 7: Ukraine's intelligence says that Loos is prepared to stand up 431 00:25:54,560 --> 00:25:58,680 Speaker 7: to fifty troops to a place in Russia for mining operations. 432 00:25:59,000 --> 00:26:01,560 Speaker 7: Given that certain love is here in Asia, and to 433 00:26:01,600 --> 00:26:04,240 Speaker 7: what extent are you worried that he is here to 434 00:26:04,800 --> 00:26:07,600 Speaker 7: beef up recruitment for the war in Russia in Ukraine. 435 00:26:08,119 --> 00:26:12,119 Speaker 8: Well, of course Laos has denied this, and we will 436 00:26:12,160 --> 00:26:16,760 Speaker 8: have a meeting also with representatives from LAOS to ask 437 00:26:17,119 --> 00:26:20,800 Speaker 8: because we also give a lot of development aid to 438 00:26:21,119 --> 00:26:25,359 Speaker 8: Laos and they, you know, they are supporting Russia's war, 439 00:26:25,600 --> 00:26:29,040 Speaker 8: which is an existential threat to Europe. Then we have 440 00:26:29,200 --> 00:26:33,600 Speaker 8: to look into our arrangements. It just can't be that 441 00:26:34,119 --> 00:26:37,040 Speaker 8: getting you know, support from US and at the same 442 00:26:37,080 --> 00:26:38,520 Speaker 8: time undermining US. 443 00:26:38,880 --> 00:26:43,160 Speaker 7: Okay, just very quickly, we know that Miamar's junta has 444 00:26:43,200 --> 00:26:47,040 Speaker 7: been squarely under Moscow's orbit as well. The cup's chief 445 00:26:47,080 --> 00:26:50,480 Speaker 7: traveled to Russia and Belarus as well. Any insight as 446 00:26:50,520 --> 00:26:53,560 Speaker 7: to what sort of cooperation is underway that could support 447 00:26:53,600 --> 00:26:54,800 Speaker 7: Russia's war machine. 448 00:26:55,400 --> 00:26:58,920 Speaker 8: Well, of course we are worried about all these steps, 449 00:26:58,920 --> 00:27:01,199 Speaker 8: and it's clear if we look at the bigger picture 450 00:27:01,320 --> 00:27:05,560 Speaker 8: that these autocratic rulers are really teaming up, which is 451 00:27:05,840 --> 00:27:09,240 Speaker 8: dangerous for everybody. And that's why we really need to 452 00:27:09,320 --> 00:27:13,320 Speaker 8: stand up for the international law, international rules, face order 453 00:27:13,440 --> 00:27:17,320 Speaker 8: and defend it. With the countries that share the same values. 454 00:27:17,960 --> 00:27:19,200 Speaker 8: All right, thank you so much. 455 00:27:19,240 --> 00:27:22,080 Speaker 7: There was Kaya Kalas that e US top diplomat speaking 456 00:27:22,119 --> 00:27:24,440 Speaker 7: to be here at the qual Long for a Convention 457 00:27:24,600 --> 00:27:27,359 Speaker 7: center at the AS Foreign Minister's meeting. 458 00:27:37,320 --> 00:27:40,520 Speaker 2: Listenne Summers a child swap writing. Second quarter earnings calls 459 00:27:40,560 --> 00:27:43,600 Speaker 2: are critical to assess how companies are handling tariffs in 460 00:27:43,680 --> 00:27:47,000 Speaker 2: terms of pass through and or profit margin compression. 461 00:27:47,200 --> 00:27:47,959 Speaker 3: A place to say that. 462 00:27:47,960 --> 00:27:49,840 Speaker 2: Listeners back with us for more Listen and welcome back 463 00:27:49,880 --> 00:27:51,760 Speaker 2: to the program. We've got to pick up on down 464 00:27:51,760 --> 00:27:53,960 Speaker 2: to rare lines. They seem to have some clarity and 465 00:27:54,000 --> 00:27:56,280 Speaker 2: some confidence for the future. Do you think we'll see 466 00:27:56,320 --> 00:27:58,359 Speaker 2: a repeat of that through this earning season? 467 00:27:59,040 --> 00:28:01,600 Speaker 9: Well, John, I heard you earlier. I think you're absolutely 468 00:28:01,640 --> 00:28:04,760 Speaker 9: right that, certainly within the airline space, it's going to 469 00:28:04,800 --> 00:28:07,720 Speaker 9: be difficult for any other airlines that might have withdrawn 470 00:28:07,800 --> 00:28:12,520 Speaker 9: guidance or provided a really wide range or scenario analysis 471 00:28:12,800 --> 00:28:16,520 Speaker 9: to not narrow that in a little bit. But I 472 00:28:16,640 --> 00:28:20,160 Speaker 9: found the use of the word stable a little bit 473 00:28:20,359 --> 00:28:23,200 Speaker 9: odd or at odds with what has been a pretty 474 00:28:23,320 --> 00:28:28,520 Speaker 9: unstable backdrop, particularly from a tariff's perspective. So I think 475 00:28:29,280 --> 00:28:31,920 Speaker 9: I also heard you earlier. I think the passage of 476 00:28:32,040 --> 00:28:34,720 Speaker 9: the budget builds is good in the sense that you've 477 00:28:34,760 --> 00:28:38,840 Speaker 9: got that surety from a corporate tax extension standpoint, from 478 00:28:38,840 --> 00:28:43,280 Speaker 9: an expensing and depreciation standpoint, But it is still a 479 00:28:43,400 --> 00:28:46,200 Speaker 9: kind of whack a mole environment from a tariff perspective. 480 00:28:46,320 --> 00:28:50,880 Speaker 9: So I wouldn't describe the backdrop as stable broadly, Lazen. 481 00:28:51,200 --> 00:28:54,440 Speaker 6: Maybe not in the headline stance, but from an economic stance, 482 00:28:54,760 --> 00:28:57,320 Speaker 6: our consumer is getting as tired from all of the 483 00:28:57,360 --> 00:29:00,680 Speaker 6: headlines in the headline roulette as some of the trading parts. 484 00:29:00,240 --> 00:29:01,160 Speaker 3: Seem to be getting. 485 00:29:01,360 --> 00:29:03,920 Speaker 6: This idea that people are getting used to this environment 486 00:29:03,920 --> 00:29:06,640 Speaker 6: of uncertainty, looking at their paychecks, looking at the fact 487 00:29:06,680 --> 00:29:09,680 Speaker 6: that the economy keeps grinding along, and developing a level 488 00:29:09,720 --> 00:29:12,120 Speaker 6: of certainty in that well. 489 00:29:12,200 --> 00:29:15,640 Speaker 9: Except that, I think, Lisa, you pointed out earlier, we 490 00:29:16,040 --> 00:29:18,440 Speaker 9: have a bifurcation. I think we may be using the 491 00:29:18,560 --> 00:29:21,720 Speaker 9: K letter again to describe the backdrop, particularly as it 492 00:29:21,720 --> 00:29:24,840 Speaker 9: relates to the consumer, because you are seeing pressure on 493 00:29:24,880 --> 00:29:28,400 Speaker 9: some of the lower end consumers, inclusive of now that 494 00:29:28,440 --> 00:29:31,760 Speaker 9: there's no more moratorium on the reporting of student loan delinquencies. 495 00:29:32,160 --> 00:29:35,360 Speaker 9: They've shot through the roof that feeds into credit scores, 496 00:29:35,440 --> 00:29:39,320 Speaker 9: credit availability, access to other forms of loans. You see 497 00:29:39,320 --> 00:29:42,520 Speaker 9: it in the retail sales data that have been generally weaker. 498 00:29:42,880 --> 00:29:45,320 Speaker 9: The next report coming up in the next week is important. 499 00:29:45,640 --> 00:29:49,440 Speaker 9: You also saw the downward revision to Q one GDP. 500 00:29:50,120 --> 00:29:53,760 Speaker 9: A big, pretty hefty chunk of that was a consumption 501 00:29:54,440 --> 00:29:58,360 Speaker 9: revision lower. So I think there is still some resilience, 502 00:29:58,400 --> 00:30:01,800 Speaker 9: but it's more up the income spectrum. I think where 503 00:30:01,800 --> 00:30:05,760 Speaker 9: you're seeing the pressure most acutely is down the income spectrum. 504 00:30:05,800 --> 00:30:08,840 Speaker 9: Now to mention the fact that within inflation data, the 505 00:30:09,000 --> 00:30:13,760 Speaker 9: non discretionary components, the needs components. That's where inflation has 506 00:30:13,800 --> 00:30:17,000 Speaker 9: been stickiest on the high side and added pressure for 507 00:30:17,080 --> 00:30:21,000 Speaker 9: lower end consumers because more of their spending goes into 508 00:30:21,080 --> 00:30:22,800 Speaker 9: those needs buckets. 509 00:30:23,000 --> 00:30:26,080 Speaker 6: This really raises a sort of a deep question about 510 00:30:26,160 --> 00:30:29,560 Speaker 6: the stock market and the sort of cyclicals versus defensives 511 00:30:29,560 --> 00:30:32,000 Speaker 6: that we've been talking about, and what is defensive at 512 00:30:32,000 --> 00:30:34,000 Speaker 6: a time where the big tech names seem to be 513 00:30:34,040 --> 00:30:37,800 Speaker 6: in vulnerable to any potential changes in the broader economy. 514 00:30:37,880 --> 00:30:41,600 Speaker 6: I just wonder keen cyclicals rally on the heels of 515 00:30:41,720 --> 00:30:45,040 Speaker 6: just the high income consumer again and again, or are 516 00:30:45,080 --> 00:30:47,120 Speaker 6: you going to start to see what you're talking about, 517 00:30:47,120 --> 00:30:49,600 Speaker 6: that ke shaped economy play out in a much more 518 00:30:49,600 --> 00:30:51,719 Speaker 6: significant way in the upcoming earnings quarters. 519 00:30:52,760 --> 00:30:56,280 Speaker 9: Well, I think what I would guess what happened throughout 520 00:30:56,320 --> 00:30:58,800 Speaker 9: second quarter earning season is a bit of a continuation 521 00:30:58,960 --> 00:31:01,520 Speaker 9: of what we have seen in re and quarters, where 522 00:31:01,560 --> 00:31:05,840 Speaker 9: the beats don't get rewarded anywhere near to the same 523 00:31:05,920 --> 00:31:09,120 Speaker 9: degree that the misses get hit. So I think there 524 00:31:09,200 --> 00:31:12,080 Speaker 9: is still that sensitivity, but I do think we are 525 00:31:12,160 --> 00:31:14,680 Speaker 9: going to get more meat put on the bones in 526 00:31:14,760 --> 00:31:17,960 Speaker 9: terms of what the strategy is, what the pricing strategy. 527 00:31:18,000 --> 00:31:20,920 Speaker 9: We know that a lot of companies built up a 528 00:31:20,920 --> 00:31:24,200 Speaker 9: massive amount of inventories at a low cost basis insteadsibly 529 00:31:24,280 --> 00:31:30,520 Speaker 9: giving them an opportunity to kind of experiment with price increases. 530 00:31:30,600 --> 00:31:33,120 Speaker 9: So I think we're going to our analysts are going 531 00:31:33,160 --> 00:31:37,360 Speaker 9: to be asking pretty pointed questions about pricing strategy, about 532 00:31:37,800 --> 00:31:40,880 Speaker 9: profit margins. In terms of the cyclical ap performance, I mean, 533 00:31:40,960 --> 00:31:44,320 Speaker 9: industrials is by far the best performing sector this year, 534 00:31:44,400 --> 00:31:48,640 Speaker 9: up thirteen or fourteen percent, besting even technology and communication 535 00:31:48,920 --> 00:31:52,840 Speaker 9: services also at play here, and what's doing well ore 536 00:31:53,000 --> 00:31:57,200 Speaker 9: sectors and industries that have a high portion of their 537 00:31:57,360 --> 00:32:00,400 Speaker 9: revenue growth coming from overseas sources, and that's where weeker 538 00:32:00,480 --> 00:32:03,040 Speaker 9: dollar has come into play, and also why a sector 539 00:32:03,160 --> 00:32:06,360 Speaker 9: like tech is really pulling up the revisions ratio, the 540 00:32:06,400 --> 00:32:09,640 Speaker 9: positive revisions ratio. The weaker dollar has been a big 541 00:32:09,680 --> 00:32:10,640 Speaker 9: part of that, Liza. 542 00:32:10,760 --> 00:32:12,680 Speaker 5: When it comes to strategies, we're all aware of the 543 00:32:12,720 --> 00:32:15,400 Speaker 5: Trump put that was really prevalent as well in Trump's 544 00:32:15,440 --> 00:32:16,160 Speaker 5: first administration. 545 00:32:16,240 --> 00:32:18,400 Speaker 1: But you're pondering something new, the Trump call. 546 00:32:18,760 --> 00:32:19,480 Speaker 2: What is that? 547 00:32:20,440 --> 00:32:22,880 Speaker 9: Well, the notion, of course of the Trump put was 548 00:32:23,080 --> 00:32:25,520 Speaker 9: and we saw it come into play on April night, 549 00:32:25,640 --> 00:32:28,080 Speaker 9: that if there's enough weakness that kicks into the market. 550 00:32:28,080 --> 00:32:30,120 Speaker 9: In the case of that first week in April, it 551 00:32:30,160 --> 00:32:32,280 Speaker 9: wasn't just in the equity market. You saw the spike 552 00:32:32,320 --> 00:32:35,840 Speaker 9: and bond yields, you saw the crush and the dollar. 553 00:32:36,720 --> 00:32:40,920 Speaker 9: That combination sent a message to the administration woe, hence 554 00:32:40,960 --> 00:32:47,120 Speaker 9: the announcement of the ninety ish delay for the reciprocal tariffs. 555 00:32:47,240 --> 00:32:50,320 Speaker 9: But I think the open question that maybe we're getting 556 00:32:50,320 --> 00:32:52,440 Speaker 9: a little bit of an answer to is if you 557 00:32:52,520 --> 00:32:56,120 Speaker 9: get enough resilience in economic data, labor market data, you 558 00:32:56,240 --> 00:32:59,840 Speaker 9: don't start to see a move higher with any meaning 559 00:33:00,240 --> 00:33:03,840 Speaker 9: magnitude in the inflation data and the stock market trading 560 00:33:03,880 --> 00:33:06,920 Speaker 9: at all time highs? Does that behold in the administration 561 00:33:07,120 --> 00:33:10,240 Speaker 9: to sort of press forward with tariffs? So just the 562 00:33:10,720 --> 00:33:14,280 Speaker 9: opposite way to think about it from an optioned lingo. 563 00:33:14,120 --> 00:33:17,680 Speaker 2: Perspective raises big questions about August one Lazan as always 564 00:33:17,720 --> 00:33:20,560 Speaker 2: perfect framing of things. Lizanne sunders there a child swamp 565 00:33:20,560 --> 00:33:32,720 Speaker 2: on the latest in the equity market. Let's stick with 566 00:33:32,760 --> 00:33:36,120 Speaker 2: the US consumer Bank for America releasing its monthly Consumer Checkpoint, 567 00:33:36,280 --> 00:33:39,560 Speaker 2: highlighting ongoing softness into the summer months. The report finding 568 00:33:39,600 --> 00:33:43,440 Speaker 2: spending rebounded in June but didn't fully offset declines in 569 00:33:43,480 --> 00:33:46,240 Speaker 2: both April and May. Joining us now to discuss is 570 00:33:46,320 --> 00:33:49,320 Speaker 2: Liz Everett Chris Berkley, head of Bank for America Institute, 571 00:33:49,360 --> 00:33:50,120 Speaker 2: Let's got to see you. 572 00:33:50,200 --> 00:33:50,880 Speaker 3: Great to be here. 573 00:33:51,040 --> 00:33:52,680 Speaker 2: Let's just talk about where we are right now and 574 00:33:52,720 --> 00:33:54,400 Speaker 2: also where we've been over the last few months, because 575 00:33:54,400 --> 00:33:56,440 Speaker 2: this has been very confusing. We had this big pull 576 00:33:56,480 --> 00:33:58,880 Speaker 2: forward and now we feel like we've had some payback. 577 00:33:59,040 --> 00:33:59,760 Speaker 3: Where are we now? 578 00:34:00,160 --> 00:34:02,200 Speaker 1: So I think it depends on if we're looking at 579 00:34:02,200 --> 00:34:04,960 Speaker 1: services or if we're looking at retail. If we're looking 580 00:34:04,960 --> 00:34:08,280 Speaker 1: at retail and we're looking at durables, things like electronics, 581 00:34:08,320 --> 00:34:12,120 Speaker 1: things like furniture. We are still seeing spending kind of 582 00:34:12,160 --> 00:34:15,680 Speaker 1: decline in those categories because you've got the payback from 583 00:34:15,719 --> 00:34:18,520 Speaker 1: the tariff by ahead. But for the first time in 584 00:34:19,400 --> 00:34:22,279 Speaker 1: frankly a long time, we actually saw what drove the 585 00:34:22,280 --> 00:34:26,920 Speaker 1: consumer spending up in June was retail spending, and it 586 00:34:27,120 --> 00:34:30,160 Speaker 1: was in the you know, things like gas. Some of 587 00:34:30,160 --> 00:34:32,600 Speaker 1: that was pricing, but it was really broad based other 588 00:34:32,680 --> 00:34:36,440 Speaker 1: than things like electronics and furniture. But grocery spending was up. 589 00:34:36,480 --> 00:34:39,800 Speaker 1: General merchandise was up, clothing was up. That's what's driving 590 00:34:40,040 --> 00:34:45,600 Speaker 1: the spending. Interestingly, also services services spending was actually down, 591 00:34:45,800 --> 00:34:48,640 Speaker 1: just a little bit down about one tenths in June. 592 00:34:49,239 --> 00:34:52,640 Speaker 1: But what breaking that down People are pulling back on 593 00:34:52,680 --> 00:34:55,319 Speaker 1: discretionary on travel, and we can get into that because 594 00:34:55,320 --> 00:35:00,319 Speaker 1: you're gonna want me to scare the circle with delta, yes, right, yeah, 595 00:35:01,200 --> 00:35:05,720 Speaker 1: right away. So travel spending travel categories like airlines did decline. 596 00:35:06,040 --> 00:35:09,680 Speaker 1: But if you delve into what drives total spending, right, 597 00:35:09,880 --> 00:35:13,040 Speaker 1: it's the number of households that are spending, it's the 598 00:35:13,160 --> 00:35:16,319 Speaker 1: average transaction size, and it's the number of transactions they're 599 00:35:16,360 --> 00:35:19,160 Speaker 1: making a month, right, what we saw. When you break 600 00:35:19,239 --> 00:35:21,920 Speaker 1: that down, there are certain households, and we can get 601 00:35:21,960 --> 00:35:25,040 Speaker 1: into which ones, lower income households who are pulling back 602 00:35:25,160 --> 00:35:29,440 Speaker 1: completely from making purchases in travel if we look at 603 00:35:29,480 --> 00:35:33,080 Speaker 1: other categories, discrectionary categories like restaurants. On the other hand, 604 00:35:33,360 --> 00:35:37,600 Speaker 1: again same analysis, you're seeing fewer but some households pull 605 00:35:37,680 --> 00:35:38,240 Speaker 1: back completely. 606 00:35:38,360 --> 00:35:39,280 Speaker 3: So we have fewer. 607 00:35:39,080 --> 00:35:41,640 Speaker 1: Households making a transaction at all, but the people who 608 00:35:41,719 --> 00:35:44,760 Speaker 1: are still going out to eat are going out more often, 609 00:35:45,200 --> 00:35:48,239 Speaker 1: went out more often in June and paid more. So 610 00:35:48,719 --> 00:35:50,640 Speaker 1: you've got a little bit of a disconnect. And it's 611 00:35:50,719 --> 00:35:52,120 Speaker 1: kind of a tale of two cities. 612 00:35:52,160 --> 00:35:54,040 Speaker 6: We've been talking about the K shaped economy and it 613 00:35:54,120 --> 00:35:56,080 Speaker 6: seems to be just sort of widening the gap between 614 00:35:56,120 --> 00:35:58,279 Speaker 6: the haves and the have nots, and 're seeing people 615 00:35:58,320 --> 00:36:00,440 Speaker 6: who have the money to spend spend more and the 616 00:36:00,480 --> 00:36:03,239 Speaker 6: people who don't spend less and less. And I just 617 00:36:03,440 --> 00:36:06,160 Speaker 6: wonder if this is analogous to what we've seen over 618 00:36:06,200 --> 00:36:08,680 Speaker 6: the past few years, or if this is almost an 619 00:36:08,680 --> 00:36:12,239 Speaker 6: acceleration of that trend, if it feels unsustainable, if you 620 00:36:12,280 --> 00:36:15,399 Speaker 6: can give us a sense of historically what this trend 621 00:36:15,520 --> 00:36:16,160 Speaker 6: is heading. 622 00:36:15,920 --> 00:36:19,080 Speaker 1: Towards, so there is a disconnect, and I think the 623 00:36:19,239 --> 00:36:21,640 Speaker 1: best way to understand what's happening is to look at 624 00:36:21,640 --> 00:36:24,279 Speaker 1: the labor market. The labor market on its whole has 625 00:36:24,360 --> 00:36:28,680 Speaker 1: been very strong, but digging in again by income higher 626 00:36:28,760 --> 00:36:31,320 Speaker 1: income households. Last month, we look at the money actually 627 00:36:31,360 --> 00:36:34,480 Speaker 1: coming into accounts that accelerated third month in a row. 628 00:36:34,560 --> 00:36:39,120 Speaker 1: It's just shy of three percent. Lower income households actually 629 00:36:39,280 --> 00:36:41,600 Speaker 1: decelerated a little bit. They're still up, there's still up 630 00:36:41,640 --> 00:36:44,080 Speaker 1: one point six percent, but that's down from one point 631 00:36:44,080 --> 00:36:48,680 Speaker 1: eight percent. So you're seeing this difference. That being said, 632 00:36:48,840 --> 00:36:51,600 Speaker 1: we go back a year two years, what was happening 633 00:36:51,680 --> 00:36:55,600 Speaker 1: lower income households, we're having double digit income gains that's 634 00:36:55,760 --> 00:37:00,120 Speaker 1: come down, whereas hir income households is particularly you know, 635 00:37:00,920 --> 00:37:02,719 Speaker 1: a year eighteen months ago when we saw a lot 636 00:37:02,760 --> 00:37:07,759 Speaker 1: of tech layoffs, hiringcome households had negative wage growth. Now 637 00:37:07,840 --> 00:37:10,880 Speaker 1: they're coming up, and then they're also supported by hiringcome. 638 00:37:10,920 --> 00:37:13,920 Speaker 1: Households having more invested in the markets are also being 639 00:37:13,960 --> 00:37:15,719 Speaker 1: supported by that. So I think that's kind of the 640 00:37:16,320 --> 00:37:19,680 Speaker 1: explanation for why the consumers behaving the way that it is. 641 00:37:19,840 --> 00:37:21,719 Speaker 1: It comes down to the labor When you say lower 642 00:37:21,800 --> 00:37:25,000 Speaker 1: income households are pulling back. Yeah, what's the reasoning you 643 00:37:25,160 --> 00:37:27,239 Speaker 1: find behind it? Is it because their wages are not 644 00:37:27,360 --> 00:37:30,120 Speaker 1: keeping up with inflation? Or is it actually this concern 645 00:37:30,200 --> 00:37:35,239 Speaker 1: about policy in Washington, tariffs and the like. So one 646 00:37:35,239 --> 00:37:36,960 Speaker 1: of the things we do at Bank of American Students 647 00:37:37,000 --> 00:37:39,279 Speaker 1: we don't actually ask people what they think, because we 648 00:37:39,400 --> 00:37:41,000 Speaker 1: find that when they tell us what they're doing, it 649 00:37:41,040 --> 00:37:44,239 Speaker 1: doesn't necessarily align with what they say, So we look 650 00:37:44,280 --> 00:37:46,040 Speaker 1: at what they are actually doing. So I can't tell 651 00:37:46,040 --> 00:37:48,960 Speaker 1: you why they're doing it, specifically why they think they're 652 00:37:49,000 --> 00:37:53,279 Speaker 1: doing it, but I but what I can tell you 653 00:37:53,680 --> 00:37:56,719 Speaker 1: is that looking at the breakdown in where people are 654 00:37:56,800 --> 00:38:03,759 Speaker 1: spending non discretionary spending item rents, insurance, utilities, those are 655 00:38:03,920 --> 00:38:07,600 Speaker 1: growing faster than inflation. They're taking up a bigger piece 656 00:38:07,719 --> 00:38:10,680 Speaker 1: of people's budget. And now that wages are growing, they're 657 00:38:10,680 --> 00:38:14,120 Speaker 1: still growing, but growing more slowly, not keeping up. That's 658 00:38:14,120 --> 00:38:15,360 Speaker 1: where I think the disconnect is. 659 00:38:15,480 --> 00:38:18,080 Speaker 2: The refocus on necessities sort of seems to. 660 00:38:18,080 --> 00:38:21,840 Speaker 6: Be which doesn't speak well to their ability to withstand 661 00:38:21,960 --> 00:38:26,000 Speaker 6: any further increases, but also the idea that higher income 662 00:38:26,120 --> 00:38:28,839 Speaker 6: households are seeing an acceleration and income at the same 663 00:38:28,920 --> 00:38:30,960 Speaker 6: time you're seeing a deceleration and lower income that is 664 00:38:31,080 --> 00:38:33,800 Speaker 6: different though what we saw in the immediate post pandemic reality. 665 00:38:33,880 --> 00:38:36,000 Speaker 2: The case shaped economy has been a thing this morning, 666 00:38:36,040 --> 00:38:37,240 Speaker 2: hasn't it ites? 667 00:38:37,360 --> 00:38:39,239 Speaker 6: And I just wonder how sustainable that is. And it 668 00:38:39,600 --> 00:38:40,759 Speaker 6: is a political issue as well. 669 00:38:41,600 --> 00:38:45,120 Speaker 2: This is the Bloomberg Sevenance podcast, bringing you the best 670 00:38:45,160 --> 00:38:48,239 Speaker 2: in markets, economics, an gio politics. You can watch the 671 00:38:48,280 --> 00:38:51,200 Speaker 2: show live on Bloomberg TV weekday mornings from six am 672 00:38:51,400 --> 00:38:54,520 Speaker 2: to nine am Eastern. Subscribe to the podcast on Apple, 673 00:38:54,840 --> 00:38:57,680 Speaker 2: Spotify or anywhere else you listen, and as always on 674 00:38:57,680 --> 00:39:00,279 Speaker 2: the Bloomberg Terminal and the Bloomberg Business w