1
00:00:02,520 --> 00:00:10,119
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

2
00:00:10,119 --> 00:00:13,880
Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

3
00:00:13,920 --> 00:00:17,120
Speaker 1: noon and five pm Eastern on Apple Coarclay and Android

4
00:00:17,160 --> 00:00:20,520
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

5
00:00:20,600 --> 00:00:23,760
Speaker 1: you get your podcasts, or watch us live on YouTube.

6
00:00:25,480 --> 00:00:28,040
Speaker 2: The Siren, the Drudge Siren is up thanks to the

7
00:00:28,080 --> 00:00:31,840
Speaker 2: Press Secretary Caroline Levitt on Twitter. Ex President Trump indeed

8
00:00:32,000 --> 00:00:34,000
Speaker 2: will hold a press briefing, she says on the Supreme

9
00:00:34,040 --> 00:00:37,159
Speaker 2: Court's teariff decision twelve forty five pm. We'll see if

10
00:00:37,159 --> 00:00:39,400
Speaker 2: he's late for his own party, and when he speaks,

11
00:00:39,720 --> 00:00:41,239
Speaker 2: we will of course bring it to you live here

12
00:00:41,280 --> 00:00:41,800
Speaker 2: on Bloomberg.

13
00:00:41,800 --> 00:00:42,800
Speaker 3: It's going to be one of these days.

14
00:00:42,880 --> 00:00:47,360
Speaker 2: Let's just open the microphones, clear out the brakes. We've

15
00:00:47,360 --> 00:00:49,599
Speaker 2: got a lot to do, and as I mentioned, we're

16
00:00:49,640 --> 00:00:51,960
Speaker 2: going to spend a moment with Tom Keene after we

17
00:00:52,080 --> 00:00:54,400
Speaker 2: get an update from Tyler Kendall. Knowing that this, of

18
00:00:54,480 --> 00:00:57,960
Speaker 2: course is the centerpiece of the economic agenda that helped

19
00:00:57,960 --> 00:01:00,240
Speaker 2: to bring this president into office. He's been talking about

20
00:01:00,240 --> 00:01:02,400
Speaker 2: it since before he was reelected.

21
00:01:02,560 --> 00:01:05,280
Speaker 3: Listen, we hadn't rich because of tariffs.

22
00:01:05,280 --> 00:01:07,320
Speaker 4: By the way, I hope everyone understands.

23
00:01:06,800 --> 00:01:10,680
Speaker 5: That tariffs are bringing us hundreds of billions of dollars.

24
00:01:10,720 --> 00:01:13,440
Speaker 5: Without tariffs, we would be this country would be in

25
00:01:13,480 --> 00:01:16,520
Speaker 5: such trouble as they were for many years. Every prediction

26
00:01:16,720 --> 00:01:21,600
Speaker 5: the critics made about our tariff policy has failed to materialize.

27
00:01:21,959 --> 00:01:25,479
Speaker 5: Seventy eight percent reduction in our trade deficit, and next

28
00:01:25,520 --> 00:01:28,800
Speaker 5: year we're going to be positive if we keep it

29
00:01:28,840 --> 00:01:29,360
Speaker 5: all going.

30
00:01:31,880 --> 00:01:32,680
Speaker 3: Now here's the thing.

31
00:01:33,240 --> 00:01:34,920
Speaker 2: He's going to have much more to say coming up

32
00:01:34,959 --> 00:01:36,679
Speaker 2: in a little bit more than a half hour's time.

33
00:01:36,760 --> 00:01:38,800
Speaker 2: Knowing and the market knows this too. He's got a

34
00:01:38,840 --> 00:01:42,240
Speaker 2: lot of options at his disposal, at least five fallbacks.

35
00:01:42,600 --> 00:01:45,319
Speaker 2: And that's where we start our conversation with Tyler Kendall,

36
00:01:45,319 --> 00:01:47,560
Speaker 2: who decides to leave the nation's capital on one of

37
00:01:47,640 --> 00:01:50,360
Speaker 2: the most important days in this administration. Tyler, course, you've

38
00:01:50,360 --> 00:01:52,920
Speaker 2: been up half the night as well, anchoring coverage from

39
00:01:52,960 --> 00:01:54,560
Speaker 2: early in the morning, and it's great to have you

40
00:01:54,600 --> 00:01:57,040
Speaker 2: with us here. The White House quick to respond on

41
00:01:57,080 --> 00:01:57,520
Speaker 2: this one.

42
00:01:57,400 --> 00:01:58,040
Speaker 6: Huh yeah.

43
00:01:58,040 --> 00:02:01,120
Speaker 7: And we'll get more information later to Joe when President

44
00:02:01,160 --> 00:02:04,480
Speaker 7: Trump apparently is going to brief the press and answer

45
00:02:04,560 --> 00:02:07,120
Speaker 7: some of these lingering questions, of which there are a

46
00:02:07,160 --> 00:02:09,760
Speaker 7: lot of them, including what's going to happen to those

47
00:02:09,800 --> 00:02:13,200
Speaker 7: ongoing trade negotiations that are still out there, and how

48
00:02:13,240 --> 00:02:16,680
Speaker 7: are our trading partners going to respond. Just last night

49
00:02:16,720 --> 00:02:20,040
Speaker 7: we saw the US finally ink that deal with Indonesia,

50
00:02:20,080 --> 00:02:22,400
Speaker 7: and we're hearing from India's trade minister in the last

51
00:02:22,440 --> 00:02:24,840
Speaker 7: twenty four hours that we could be greening towards a

52
00:02:24,880 --> 00:02:29,080
Speaker 7: deal maybe next month, as soon as possible, given that

53
00:02:29,200 --> 00:02:32,960
Speaker 7: negotiations have dragged on for so long. But does this threat,

54
00:02:33,040 --> 00:02:37,359
Speaker 7: as you mentioned that President Trump has these other federal authorities,

55
00:02:37,400 --> 00:02:41,280
Speaker 7: these other tools in their toolkit, change that calculus for

56
00:02:41,400 --> 00:02:44,519
Speaker 7: our trading partners. Section two thirty two, for example, those

57
00:02:44,639 --> 00:02:48,240
Speaker 7: national security tariffs that have already been levied in many cases,

58
00:02:48,320 --> 00:02:52,560
Speaker 7: right those tariffs against steel, aluminum, autos, pharmaceuticals, those are

59
00:02:52,600 --> 00:02:55,840
Speaker 7: already baked in. That's not what these end up being

60
00:02:56,000 --> 00:02:58,239
Speaker 7: extended to. And we know that there are some other

61
00:02:58,280 --> 00:03:03,480
Speaker 7: authorities to Section three oh one over alleged unfair trade practices.

62
00:03:03,520 --> 00:03:06,080
Speaker 7: But Joe, you're going to hear the White House speak

63
00:03:06,160 --> 00:03:09,919
Speaker 7: about how their flexibility is now limited. That's why they

64
00:03:09,960 --> 00:03:12,320
Speaker 7: say they liked EPO though it has never been used

65
00:03:12,480 --> 00:03:15,160
Speaker 7: for tariffs before. It's typically used for a president to

66
00:03:15,200 --> 00:03:18,080
Speaker 7: impose sanctions, for example. But they're going to point to

67
00:03:18,080 --> 00:03:21,120
Speaker 7: the flexibility in the rate and the timeline that has

68
00:03:21,160 --> 00:03:22,080
Speaker 7: now been taken away.

69
00:03:23,160 --> 00:03:25,880
Speaker 2: And Tyler, thank you so much. Tyler Kendall live from

70
00:03:25,880 --> 00:03:29,720
Speaker 2: World Headquarters in New York. They're already talking about that flexibility.

71
00:03:30,080 --> 00:03:32,440
Speaker 2: Can you imagine, by the way, what happened to Tom

72
00:03:32,520 --> 00:03:35,120
Speaker 2: Keane's friend Peter Navarro when this news drops out.

73
00:03:35,520 --> 00:03:38,520
Speaker 8: We're hearing from thinking of this as well.

74
00:03:38,560 --> 00:03:42,680
Speaker 2: I mean, the heads exploded in the White House, right, Yeah, I.

75
00:03:42,640 --> 00:03:46,240
Speaker 8: Think that's accurate. You know, I heard Terry Haines very

76
00:03:46,240 --> 00:03:48,720
Speaker 8: carefully there about the idea of folks that this is

77
00:03:48,760 --> 00:03:51,360
Speaker 8: not a big deal. I'm going to go against it.

78
00:03:51,440 --> 00:03:53,480
Speaker 8: I think it is a huge deal on a legal basis.

79
00:03:53,480 --> 00:03:56,800
Speaker 8: I'll defer to jun Gresso, who has prodigious chops all

80
00:03:56,840 --> 00:03:59,880
Speaker 8: the people at Bloomberg Opinion. But what I look at,

81
00:04:00,240 --> 00:04:03,440
Speaker 8: frankly more Joe, is your area, which is the politics

82
00:04:03,480 --> 00:04:06,200
Speaker 8: of it. And I think there's been a huge a

83
00:04:06,480 --> 00:04:11,080
Speaker 8: historical struggle here with We've done this before, and I'm

84
00:04:11,080 --> 00:04:13,560
Speaker 8: going to go back to eighteen ninety when the arch

85
00:04:13,640 --> 00:04:19,800
Speaker 8: protectionist William McKinley in Congress lost his seat in a

86
00:04:19,920 --> 00:04:25,039
Speaker 8: complete Republican whiteout because the people of America were fed

87
00:04:25,160 --> 00:04:28,440
Speaker 8: up with paying higher prices. And Joe, that sounds a

88
00:04:28,440 --> 00:04:29,720
Speaker 8: little familiar, does it?

89
00:04:31,800 --> 00:04:32,080
Speaker 3: Yes?

90
00:04:32,120 --> 00:04:34,240
Speaker 2: And then someone's going to come on this show and

91
00:04:34,279 --> 00:04:36,760
Speaker 2: say that the Supreme Court just saved the midterms for

92
00:04:36,839 --> 00:04:39,520
Speaker 2: Donald Trump. And we'll see if that's true. But stick

93
00:04:39,560 --> 00:04:43,080
Speaker 2: with me on flexibility for a moment. Earlier today Fox Business,

94
00:04:43,240 --> 00:04:46,160
Speaker 2: Kevin Hassett right talking about the options they have at hand.

95
00:04:46,200 --> 00:04:50,480
Speaker 9: Here he is, should the Supreme Court make the wrong move,

96
00:04:50,920 --> 00:04:53,520
Speaker 9: is we're going to adjust and use other authorities that

97
00:04:53,560 --> 00:04:56,480
Speaker 9: we have, because we've now seen the proof is in

98
00:04:56,520 --> 00:05:00,240
Speaker 9: the pudding that these tariffs work. They do e factly

99
00:05:00,279 --> 00:05:02,560
Speaker 9: what President Trump says. I think the IPA is the cleanest.

100
00:05:02,839 --> 00:05:04,760
Speaker 9: But if the Supreme Court doesn't like that one, then

101
00:05:04,839 --> 00:05:06,279
Speaker 9: Jameson Greer has a backup plan.

102
00:05:06,360 --> 00:05:10,479
Speaker 2: It's just as good, is this, Tom Keen? Why the

103
00:05:10,520 --> 00:05:13,719
Speaker 2: Dow's only up thirty seven points? Why retail is down?

104
00:05:13,800 --> 00:05:16,760
Speaker 2: How is retail down? How is Nike negative on a

105
00:05:16,839 --> 00:05:18,880
Speaker 2: day when this was supposed to be a celebration.

106
00:05:19,080 --> 00:05:22,160
Speaker 8: A lot of uncertainty Stephen Stanley Publishing at Santander did

107
00:05:22,200 --> 00:05:26,359
Speaker 8: a wonderful job of gauging the uncertainty here. I would

108
00:05:26,360 --> 00:05:29,760
Speaker 8: focus Joe and yes, that uncertainty, and we see the

109
00:05:29,760 --> 00:05:32,760
Speaker 8: market with the Dow up only forty points right now.

110
00:05:32,800 --> 00:05:36,400
Speaker 8: But I would focus on the theory behind this, which

111
00:05:36,400 --> 00:05:40,080
Speaker 8: has been beautifully explained by our arch academic Douglas Erwin

112
00:05:40,560 --> 00:05:44,920
Speaker 8: at Dartmouth College and Professor Irwin talks about the revenue

113
00:05:44,920 --> 00:05:47,360
Speaker 8: side as a president will and his press conference here

114
00:05:47,680 --> 00:05:50,880
Speaker 8: in forty minutes, they brought in a quarter of a trillion.

115
00:05:51,400 --> 00:05:53,800
Speaker 8: The smart people tell me they're going to lose forty percent,

116
00:05:53,880 --> 00:05:56,800
Speaker 8: maybe half of that that will go away because of

117
00:05:56,839 --> 00:05:59,880
Speaker 8: this ruling. Then there's a whole idea of restriction infinite.

118
00:06:00,320 --> 00:06:03,760
Speaker 8: We want to keep business in America. But what Justice

119
00:06:03,839 --> 00:06:07,920
Speaker 8: Roberts focused on Joe Matthew was reciprocity, and that's part

120
00:06:07,920 --> 00:06:11,919
Speaker 8: of the Douglas Sirwin calculation. And what the way I

121
00:06:12,000 --> 00:06:14,839
Speaker 8: read it as an amateur is this is a court

122
00:06:15,000 --> 00:06:18,920
Speaker 8: including Trump appointees screaming for guardrails.

123
00:06:19,120 --> 00:06:19,280
Speaker 7: Joe.

124
00:06:19,360 --> 00:06:22,120
Speaker 8: I love the sentence here if I can find it

125
00:06:22,440 --> 00:06:26,560
Speaker 8: right now. Amy Cony Barrett in the group the President

126
00:06:26,640 --> 00:06:32,680
Speaker 8: cannot impose tariffs based on a laws, silence or vague language.

127
00:06:32,720 --> 00:06:33,680
Speaker 8: To me, that's the heart of it.

128
00:06:35,000 --> 00:06:39,360
Speaker 2: You know, while we're reading from some of these opinions,

129
00:06:39,360 --> 00:06:41,800
Speaker 2: look at Justice Gorsags. For those who think it is

130
00:06:41,839 --> 00:06:44,080
Speaker 2: important for the nation to impose more tariffs, I understand

131
00:06:44,080 --> 00:06:47,599
Speaker 2: today's decision will be disappointing. All I can offer them

132
00:06:47,920 --> 00:06:50,960
Speaker 2: is that most major decisions affecting the rights and responsibilities

133
00:06:50,960 --> 00:06:54,080
Speaker 2: of the American people are funneled for the legislative process

134
00:06:54,120 --> 00:06:54,919
Speaker 2: for a reason.

135
00:06:55,200 --> 00:06:57,560
Speaker 3: It's schoolhouse rock, Tom, you know.

136
00:06:57,880 --> 00:07:00,480
Speaker 8: Well it is. But I again, I'm going to go

137
00:07:00,520 --> 00:07:03,920
Speaker 8: this was widely anticipated. We've seen the market reaction and

138
00:07:04,600 --> 00:07:08,320
Speaker 8: frankly churning right down, Nasdaq up seven tens of a percent.

139
00:07:08,880 --> 00:07:11,960
Speaker 8: But the heart of the matter is is because the

140
00:07:12,080 --> 00:07:16,640
Speaker 8: president act in an assertive manner as President Trump has,

141
00:07:17,120 --> 00:07:19,600
Speaker 8: the Appeals Court says you know better than me. Joe

142
00:07:19,880 --> 00:07:22,560
Speaker 8: has said no one ruling was seven to four, and

143
00:07:22,600 --> 00:07:25,280
Speaker 8: for the first time, the Supreme Court rais in. I

144
00:07:25,280 --> 00:07:29,000
Speaker 8: would suggest Joe and the arc of this, they'll be back.

145
00:07:29,360 --> 00:07:31,960
Speaker 8: We haven't heard the last from the Supreme Court.

146
00:07:33,040 --> 00:07:34,000
Speaker 3: Okay, there you go.

147
00:07:34,200 --> 00:07:36,720
Speaker 2: Enter Mike Johnson, Speaker of the House probably got a

148
00:07:36,760 --> 00:07:38,960
Speaker 2: phone call from Donald Trump this morning.

149
00:07:39,080 --> 00:07:40,360
Speaker 3: No one can deny, he.

150
00:07:40,360 --> 00:07:43,160
Speaker 2: Writes, if the president's use of tariffs has brought in

151
00:07:43,200 --> 00:07:46,360
Speaker 2: billions of dollars and created an immense leverage for America's

152
00:07:46,400 --> 00:07:50,160
Speaker 2: trade strategy and for securing strong, reciprocal America First trade

153
00:07:50,160 --> 00:07:52,960
Speaker 2: agreements with countries that have been taking advantage of American

154
00:07:53,000 --> 00:07:53,920
Speaker 2: workers for decades.

155
00:07:54,120 --> 00:07:57,840
Speaker 3: Is that's fact for you? Well, yeah, we brought in a.

156
00:07:57,880 --> 00:07:59,960
Speaker 8: Quarter of a trillion dollars so far, and guess what

157
00:08:00,080 --> 00:08:02,640
Speaker 8: it's added every month. Let me get it up here.

158
00:08:03,280 --> 00:08:05,840
Speaker 8: McKee has this memorized. I don't, Joe, I'm sorry, I

159
00:08:05,880 --> 00:08:06,280
Speaker 8: just can't.

160
00:08:06,400 --> 00:08:09,280
Speaker 2: Did we bring in a quarter of or did consumers

161
00:08:09,320 --> 00:08:11,040
Speaker 2: have to hand that over?

162
00:08:11,200 --> 00:08:11,360
Speaker 7: Oh?

163
00:08:11,400 --> 00:08:15,280
Speaker 8: No consumer. I think there's wide agreement against Kevin Hasset,

164
00:08:15,280 --> 00:08:19,360
Speaker 8: that doctor Hasset in Pennsylvania, that we in somewhere are

165
00:08:19,400 --> 00:08:22,200
Speaker 8: paying for this. Before Liberation Day, you were in the

166
00:08:22,280 --> 00:08:25,120
Speaker 8: rose garden, Joe, when that happened. Our tariff was one

167
00:08:25,200 --> 00:08:28,400
Speaker 8: or two percent, two percent, maybe three percent. The peak

168
00:08:28,440 --> 00:08:31,720
Speaker 8: the worst case was twenty eight percent. Then we've backed

169
00:08:31,720 --> 00:08:34,480
Speaker 8: it off, including you had a tizzy about bananas, Joe.

170
00:08:34,840 --> 00:08:38,120
Speaker 8: So the President for Joe Matthew backed off bananas. We

171
00:08:38,160 --> 00:08:41,400
Speaker 8: went down to fourteen and a half percent like twenty

172
00:08:41,559 --> 00:08:45,760
Speaker 8: days ago. Now after this ruling, I've seen two numbers.

173
00:08:45,800 --> 00:08:48,959
Speaker 8: I've seen six percent, and I believe Martha Gimble at

174
00:08:48,960 --> 00:08:52,080
Speaker 8: the Budget Lab at Yale has nine percent. So we've

175
00:08:52,160 --> 00:08:56,080
Speaker 8: almost round tripped from keep the math simple, folks, two

176
00:08:56,120 --> 00:09:00,400
Speaker 8: percent to twenty eight percent to nine percent? What's the

177
00:09:00,440 --> 00:09:02,320
Speaker 8: next path, Joe? Down from nine percent?

178
00:09:02,360 --> 00:09:05,560
Speaker 3: About that? Okay? So you got a ten year that

179
00:09:05,640 --> 00:09:06,520
Speaker 3: moves two tenths.

180
00:09:07,920 --> 00:09:11,760
Speaker 8: That's why I think it's it's just a tepid reaction

181
00:09:11,880 --> 00:09:15,040
Speaker 8: on a Friday off of what was anticipated. And again

182
00:09:15,080 --> 00:09:19,880
Speaker 8: the response of the president, and critically is my amateur

183
00:09:19,960 --> 00:09:24,680
Speaker 8: take on this ruling, folks, is the response of Republicans

184
00:09:24,679 --> 00:09:28,240
Speaker 8: in the House, Republicans in the Senate, and Joe, I'll

185
00:09:28,320 --> 00:09:32,120
Speaker 8: let you gauge Democrats in the House or dare I

186
00:09:32,160 --> 00:09:35,800
Speaker 8: say democrats in the House and Senate the first Wednesday

187
00:09:35,840 --> 00:09:40,480
Speaker 8: of November and that would be apartment Joe. I got

188
00:09:40,480 --> 00:09:43,200
Speaker 8: to go this. I did some extensive research here, folks.

189
00:09:43,200 --> 00:09:45,120
Speaker 8: I have a team of interns that make it go

190
00:09:45,280 --> 00:09:48,120
Speaker 8: every single day, and I need to bring this up

191
00:09:48,120 --> 00:09:50,679
Speaker 8: because this is what matters you. You look at Yosheta

192
00:09:50,720 --> 00:09:53,359
Speaker 8: on the Boston Red Sox and then the guy's underpaid.

193
00:09:53,840 --> 00:09:55,920
Speaker 8: And the answer is he's one of the few people

194
00:09:56,559 --> 00:10:00,280
Speaker 8: using the Mazuno Haga pitching glove. The pictures love it.

195
00:10:00,280 --> 00:10:03,080
Speaker 8: This is a Mazuno baseball glove, and that thing is

196
00:10:03,120 --> 00:10:07,199
Speaker 8: popping a twenty five percent tariff until they make it.

197
00:10:07,520 --> 00:10:09,320
Speaker 8: And so you know, I mean you take it as

198
00:10:09,360 --> 00:10:12,400
Speaker 8: something like, you know, gloves made in the Philippines, gloves

199
00:10:12,480 --> 00:10:15,840
Speaker 8: made in Vietnam, these gorgeous gloves, the Haga gloves made

200
00:10:15,840 --> 00:10:19,520
Speaker 8: by Mizuno in Japan. Those tariffs, I guess are going

201
00:10:19,600 --> 00:10:22,640
Speaker 8: to come down and greatly affect the Red Sox ability

202
00:10:22,920 --> 00:10:25,760
Speaker 8: to stay in first place. After April thirtieth.

203
00:10:26,440 --> 00:10:27,840
Speaker 3: When are you going to four myers?

204
00:10:28,200 --> 00:10:30,559
Speaker 8: I want to go. Somebody's going. Mike mckey's going. It's

205
00:10:30,559 --> 00:10:32,960
Speaker 8: an American he's you know, is he really? Oh yeah,

206
00:10:32,960 --> 00:10:35,280
Speaker 8: he's He's got the whole Jet blue thing going.

207
00:10:36,679 --> 00:10:39,319
Speaker 2: Exactly all right? Before you leave us? Is eem the

208
00:10:39,400 --> 00:10:41,160
Speaker 2: buy here? How do you make money on this?

209
00:10:41,800 --> 00:10:45,360
Speaker 8: I don't do that, Joe, you know, I don't do that.

210
00:10:45,400 --> 00:10:45,800
Speaker 3: What else?

211
00:10:45,800 --> 00:10:47,920
Speaker 8: Say and say this firmly, folks, And we do it

212
00:10:47,960 --> 00:10:52,000
Speaker 8: every day blue. The system will clear. I'm going to

213
00:10:52,040 --> 00:10:54,720
Speaker 8: go to Friedrich Kayak, who went from Austria over to

214
00:10:54,880 --> 00:11:00,439
Speaker 8: LC and then over hugely influential in American economics. The

215
00:11:00,520 --> 00:11:04,920
Speaker 8: market will clear, and Joe to balance the power. The

216
00:11:05,080 --> 00:11:09,040
Speaker 8: arch way we clear is that the ballot box, which

217
00:11:09,080 --> 00:11:11,559
Speaker 8: means I'm looking at the control room right now. Can

218
00:11:11,600 --> 00:11:14,720
Speaker 8: we agree that Joe Matthew will be employed the first

219
00:11:14,760 --> 00:11:15,840
Speaker 8: Wednesday of November?

220
00:11:16,160 --> 00:11:19,839
Speaker 3: I think so, Joe, Oh yeah, I think it's sitting

221
00:11:19,920 --> 00:11:20,200
Speaker 3: in there.

222
00:11:21,080 --> 00:11:23,679
Speaker 8: This is just this is massive midterms. I go back

223
00:11:23,679 --> 00:11:26,800
Speaker 8: to the election of eighteen ninety and the people are

224
00:11:26,840 --> 00:11:28,720
Speaker 8: going to speak that.

225
00:11:29,000 --> 00:11:29,520
Speaker 3: There you go.

226
00:11:29,640 --> 00:11:32,240
Speaker 2: And by the way, Tuesday night is going to be

227
00:11:32,280 --> 00:11:34,400
Speaker 2: a doozy. This State of the.

228
00:11:34,400 --> 00:11:36,400
Speaker 3: Union just took on new meaning. Am I wrong?

229
00:11:37,080 --> 00:11:39,560
Speaker 8: I no, I think I think it's brilliant. I'm not

230
00:11:39,720 --> 00:11:42,720
Speaker 8: prepared on that. I went a couple times. You know

231
00:11:42,880 --> 00:11:45,360
Speaker 8: it was well, let's tell you what it's like a

232
00:11:45,440 --> 00:11:47,760
Speaker 8: it's like a plumbing convention in Las Vegas.

233
00:11:49,720 --> 00:11:52,600
Speaker 2: Yes, with the Chief Justice in the front row. Tom Keane,

234
00:11:52,679 --> 00:11:54,640
Speaker 2: thank you. I understand you might be around a little bit.

235
00:11:54,679 --> 00:11:55,360
Speaker 2: We'll see what we learn.

236
00:11:55,480 --> 00:11:57,520
Speaker 3: I can stay around this present press conference.

237
00:11:57,559 --> 00:12:00,400
Speaker 8: I had an incredible lunch scheduled with David Ger and

238
00:12:00,440 --> 00:12:03,840
Speaker 8: it got blown and did he's rehearsing Bloomberg this weekend

239
00:12:04,160 --> 00:12:06,760
Speaker 8: and Joe Matthews doing Bloomberg these tariffs.

240
00:12:07,880 --> 00:12:09,760
Speaker 3: I hope there was a good surveillance map. That's all

241
00:12:09,800 --> 00:12:10,280
Speaker 3: I can say.

242
00:12:10,320 --> 00:12:13,120
Speaker 2: The great Tom Keen, Ladies and gentlemen, I told you

243
00:12:13,160 --> 00:12:15,720
Speaker 2: that the t Rex of finance was coming in. You know,

244
00:12:15,760 --> 00:12:18,040
Speaker 2: it's a big day when Tom key right, we blew

245
00:12:18,040 --> 00:12:20,040
Speaker 2: off the news at the top and brought Tom Keen

246
00:12:20,120 --> 00:12:22,040
Speaker 2: in with Tyler Kendall.

247
00:12:24,360 --> 00:12:25,120
Speaker 3: On a Friday.

248
00:12:26,240 --> 00:12:28,400
Speaker 2: One of the first calls we made, thank you, Tom,

249
00:12:28,720 --> 00:12:31,720
Speaker 2: was to the author of the Everything Risk newsletter, because

250
00:12:31,760 --> 00:12:33,559
Speaker 2: you know, we were just looking at some of the

251
00:12:33,640 --> 00:12:37,079
Speaker 2: numbers here with Tom. It's somewhat confounding to see the reaction.

252
00:12:37,600 --> 00:12:40,200
Speaker 2: And Edward Harrison, of course, has been preparing for this

253
00:12:40,360 --> 00:12:44,360
Speaker 2: day Bloomberg Senior strategist. Yes, the Everything Risk Newsletter. It's

254
00:12:44,400 --> 00:12:45,040
Speaker 2: great to see you.

255
00:12:46,000 --> 00:12:50,280
Speaker 3: Did you expect a more visceral, a more passionate reaction.

256
00:12:50,520 --> 00:12:52,480
Speaker 10: I did, actually, And by the way, it was great

257
00:12:52,520 --> 00:12:54,520
Speaker 10: to see that Tom likes the Red Sox because I'm

258
00:12:54,520 --> 00:12:55,240
Speaker 10: a Red Sox.

259
00:12:55,040 --> 00:12:57,600
Speaker 3: Fan so well very well, and you didn't have the jacket.

260
00:12:57,760 --> 00:13:00,640
Speaker 10: I'm a bit surprised and disappointed that we don't have

261
00:13:00,720 --> 00:13:01,880
Speaker 10: chili here this time.

262
00:13:02,080 --> 00:13:03,599
Speaker 2: Yeah, you know, we didn't have time to put the

263
00:13:03,640 --> 00:13:06,480
Speaker 2: food together because of the tariff ruling. But we'll get

264
00:13:06,520 --> 00:13:08,600
Speaker 2: back on track for you, ed we're James. We need

265
00:13:08,640 --> 00:13:10,960
Speaker 2: to have refreshments for this to work. I think in

266
00:13:11,000 --> 00:13:14,360
Speaker 2: the future for Edward, is this market going to turn negative?

267
00:13:14,400 --> 00:13:16,439
Speaker 2: Look at this, The Dow's down one hundred points.

268
00:13:16,280 --> 00:13:18,679
Speaker 3: Now, yeah, I look at this as part of the rotation.

269
00:13:18,880 --> 00:13:21,520
Speaker 10: I was looking through you know, the Dow, the NASAK

270
00:13:21,600 --> 00:13:23,480
Speaker 10: versus the s m P, and then the equal weight

271
00:13:23,640 --> 00:13:27,320
Speaker 10: versus the you know, the normal weight, and what you

272
00:13:27,360 --> 00:13:31,240
Speaker 10: see is is that the s m P equal weight

273
00:13:31,520 --> 00:13:33,160
Speaker 10: is doing.

274
00:13:34,440 --> 00:13:36,000
Speaker 3: It's it's not from the.

275
00:13:36,040 --> 00:13:40,440
Speaker 10: Last I saw that the equal weight is doing worse

276
00:13:40,840 --> 00:13:45,080
Speaker 10: than the phenomenal. And that's because you know, you see

277
00:13:45,120 --> 00:13:48,720
Speaker 10: all the sectors that people were rotating out of now

278
00:13:49,800 --> 00:13:55,439
Speaker 10: rotating into before now being shunned. And then on the NASDAC,

279
00:13:55,520 --> 00:13:58,440
Speaker 10: what you're seeing is is people are moving into you know,

280
00:13:58,480 --> 00:14:01,880
Speaker 10: the more speculative body. And then you also see silver

281
00:14:02,600 --> 00:14:06,120
Speaker 10: going up. Bitcoin is getting a bid. So overall, I

282
00:14:06,160 --> 00:14:08,240
Speaker 10: think what we're seeing here from the data that we've

283
00:14:08,280 --> 00:14:13,560
Speaker 10: seen today and from the tariffs, that people look at

284
00:14:13,600 --> 00:14:16,920
Speaker 10: it as very positive for more speculative assets.

285
00:14:16,960 --> 00:14:19,600
Speaker 3: Really interesting. It's kind of a blow day though, right.

286
00:14:19,720 --> 00:14:23,040
Speaker 2: Dow's down ninety eight nasdac's up ninety five s and

287
00:14:23,080 --> 00:14:27,560
Speaker 2: P to your point, is higher. It's up a dozen points.

288
00:14:27,600 --> 00:14:29,800
Speaker 2: Here is a fraction of one percent where the equal

289
00:14:29,800 --> 00:14:33,600
Speaker 2: weight is slightly lower. What do you make of the

290
00:14:33,680 --> 00:14:35,720
Speaker 2: lack of reaction in the bond market? You get two

291
00:14:35,800 --> 00:14:38,720
Speaker 2: three tenths, Yeah, I mean ten or the thirty or.

292
00:14:38,920 --> 00:14:40,920
Speaker 10: I was looking at the bond market to react to

293
00:14:40,960 --> 00:14:45,160
Speaker 10: the inflation data earlier today. Yeah, because the inflation data,

294
00:14:45,440 --> 00:14:49,760
Speaker 10: if you parse the data core PCE, inflation has gone

295
00:14:49,800 --> 00:14:53,600
Speaker 10: up zero point four percent since we got these tariffs.

296
00:14:54,240 --> 00:14:57,520
Speaker 10: We also saw that it's gone up on the headline

297
00:14:57,600 --> 00:15:01,040
Speaker 10: zero point six percent over an eight month period. Uh,

298
00:15:01,240 --> 00:15:04,960
Speaker 10: that's a considerable amount. That means that disinflation basically is over.

299
00:15:05,440 --> 00:15:08,000
Speaker 10: Inflation is not coming down, it's been going up. But

300
00:15:08,120 --> 00:15:11,320
Speaker 10: then we had no reaction. Then we got the tariffs,

301
00:15:11,320 --> 00:15:14,320
Speaker 10: which were the the you know, which caused that inflation

302
00:15:15,160 --> 00:15:18,720
Speaker 10: to be rescinded. So markets really don't know what to

303
00:15:18,800 --> 00:15:20,720
Speaker 10: do is basically what we're seeing.

304
00:15:20,840 --> 00:15:24,239
Speaker 2: That's where we are the smart analysis today. People expected

305
00:15:24,560 --> 00:15:26,120
Speaker 2: maybe a little bit more, and I'll be curious to

306
00:15:26,120 --> 00:15:28,320
Speaker 2: see by the way we'll be looking at the markets

307
00:15:28,320 --> 00:15:30,600
Speaker 2: as the President is speaking, he's set himself up for

308
00:15:30,640 --> 00:15:32,880
Speaker 2: a heck of a split screen here. You want to

309
00:15:32,960 --> 00:15:34,720
Speaker 2: you want to come in off the top rope in

310
00:15:34,760 --> 00:15:37,840
Speaker 2: the twelve o'clock hour while while trading is active. After

311
00:15:37,840 --> 00:15:41,080
Speaker 2: we're ruling like this, every news organization is going to

312
00:15:41,120 --> 00:15:43,400
Speaker 2: have the Dow and the President on the screen today.

313
00:15:43,440 --> 00:15:46,520
Speaker 2: What will the reaction be like depending on what we hear.

314
00:15:46,920 --> 00:15:50,360
Speaker 10: Well, really, what we should be thinking is this gives

315
00:15:51,320 --> 00:15:55,120
Speaker 10: President Trump a chance to pivot because he knows that,

316
00:15:55,480 --> 00:15:58,080
Speaker 10: just as you were talking to Tom that the midterms,

317
00:15:58,400 --> 00:16:01,920
Speaker 10: our problem afford to bild is potentially a problem for

318
00:16:02,000 --> 00:16:02,840
Speaker 10: those midterms.

319
00:16:03,080 --> 00:16:05,840
Speaker 3: He can recalibrate his tariff.

320
00:16:07,240 --> 00:16:11,680
Speaker 10: Policy to be less onerous, because he obviously is going

321
00:16:11,720 --> 00:16:15,480
Speaker 10: to do tariffs again, yes, of a different ilk, but

322
00:16:15,640 --> 00:16:17,520
Speaker 10: this gives him a chance to actually do it in

323
00:16:17,560 --> 00:16:22,680
Speaker 10: a way that helps him in the midterms. Whereas these

324
00:16:22,680 --> 00:16:27,520
Speaker 10: tariffs we're going to be negative for the Republicans and

325
00:16:27,560 --> 00:16:28,520
Speaker 10: the potential.

326
00:16:28,080 --> 00:16:33,640
Speaker 2: Sugg the House, the Court save the midterms for Republicans.

327
00:16:33,280 --> 00:16:37,280
Speaker 3: If he uses it the right way. But you know

328
00:16:37,720 --> 00:16:39,720
Speaker 3: that's a big if. That's a big if.

329
00:16:39,800 --> 00:16:43,200
Speaker 2: God knows there are We've got a number of fallbacks here.

330
00:16:43,240 --> 00:16:45,000
Speaker 2: In fact, we had listed them in advance of the ruling.

331
00:16:45,000 --> 00:16:49,800
Speaker 2: There are five obvious fallback options. Section two thirty two

332
00:16:50,120 --> 00:16:53,800
Speaker 2: Trade Expansion Act of nineteen sixty two comes with limitations.

333
00:16:54,120 --> 00:16:56,880
Speaker 2: Section two oh one Trade Act of nineteen seventy four,

334
00:16:57,560 --> 00:17:00,240
Speaker 2: Section three oh one Trade Act nineteen seventy four, Action

335
00:17:00,320 --> 00:17:02,920
Speaker 2: one twenty two, same trade acts. And then we've got

336
00:17:02,920 --> 00:17:06,080
Speaker 2: section three thirty eight Smoot Holly nineteen thirty.

337
00:17:06,320 --> 00:17:08,960
Speaker 10: Well, as soon as you mentioned Smooth Hollis suddenly you're

338
00:17:09,000 --> 00:17:11,800
Speaker 10: just like hella, yeah, yeah, Well, now what are we

339
00:17:11,840 --> 00:17:12,480
Speaker 10: thinking the market?

340
00:17:12,560 --> 00:17:14,840
Speaker 2: This is why though everyone knows that there's something else

341
00:17:14,920 --> 00:17:17,199
Speaker 2: is about to drop here, right, does he delineate that

342
00:17:17,200 --> 00:17:17,439
Speaker 2: we think?

343
00:17:18,320 --> 00:17:21,880
Speaker 10: Perhaps This is why we've had the muted reaction from

344
00:17:21,920 --> 00:17:24,560
Speaker 10: markets right now so far, is that we're waiting for

345
00:17:24,640 --> 00:17:26,840
Speaker 10: what he's going to say because they already have a

346
00:17:26,840 --> 00:17:28,960
Speaker 10: game plan. They knew that this was going to happen,

347
00:17:29,000 --> 00:17:33,720
Speaker 10: it was likely to happen, and therefore they've developed a

348
00:17:33,800 --> 00:17:35,919
Speaker 10: different way to deal with it. Obviously, we have to

349
00:17:35,960 --> 00:17:38,520
Speaker 10: deal with the refunds and so forth, but you know,

350
00:17:38,680 --> 00:17:42,560
Speaker 10: tariffs themselves and mentioned that have not are not off

351
00:17:42,640 --> 00:17:44,800
Speaker 10: the table. Yeah, there's still going to be in place.

352
00:17:44,920 --> 00:17:48,800
Speaker 10: And what that obviously means is, given the inflation numbers

353
00:17:48,840 --> 00:17:52,880
Speaker 10: that we saw today, we still have an inflation problem

354
00:17:52,920 --> 00:17:56,200
Speaker 10: relative to where we were before tariffs became an issue.

355
00:17:56,280 --> 00:18:01,040
Speaker 2: Walmark's down three percent, TJX is lower Costco, which is

356
00:18:01,040 --> 00:18:04,879
Speaker 2: already suing over the refunds, is down one percent.

357
00:18:06,840 --> 00:18:07,960
Speaker 3: When you step.

358
00:18:07,680 --> 00:18:11,800
Speaker 2: Back, think about the market this year from your thirty

359
00:18:11,840 --> 00:18:15,880
Speaker 2: thousand foot everything risk standpoint, here, does it change your

360
00:18:15,920 --> 00:18:18,960
Speaker 2: calculus for what we might see in twenty twenty six.

361
00:18:19,359 --> 00:18:23,600
Speaker 10: It might be slightly more pro growth because you know,

362
00:18:23,680 --> 00:18:29,000
Speaker 10: to the degree that recalibrating the tariffs is difficult. Really,

363
00:18:29,080 --> 00:18:33,280
Speaker 10: what you're doing is you're increasing the deficit and you're

364
00:18:33,359 --> 00:18:37,520
Speaker 10: decreasing the drag that tariffs have on because we know

365
00:18:37,640 --> 00:18:41,760
Speaker 10: that consumers and importers are paying ninety six percent in

366
00:18:41,800 --> 00:18:45,399
Speaker 10: the tariffs on the US economy, and so that's you know,

367
00:18:45,720 --> 00:18:50,359
Speaker 10: marginally pro growth. It's also somewhat anti inflation, so that

368
00:18:50,520 --> 00:18:53,080
Speaker 10: should be a positive and That's why I think the

369
00:18:53,119 --> 00:18:57,480
Speaker 10: initial reaction was slightly to the risk onside earlier today.

370
00:18:57,560 --> 00:18:59,879
Speaker 10: But people are still sort of trying to figure out

371
00:19:00,119 --> 00:19:02,320
Speaker 10: what it means over the long term. And then we

372
00:19:02,440 --> 00:19:05,919
Speaker 10: have President Trump who's going to tell us what his

373
00:19:06,000 --> 00:19:07,080
Speaker 10: reaction to this is.

374
00:19:07,960 --> 00:19:11,720
Speaker 3: Does this make water's even muddier for the FED? I

375
00:19:11,720 --> 00:19:12,160
Speaker 3: think it.

376
00:19:12,080 --> 00:19:15,439
Speaker 10: Does, because you know, you even saw someone who was

377
00:19:15,560 --> 00:19:20,320
Speaker 10: very pro Trump aligned, like Stephen Myron, saying that you know,

378
00:19:20,440 --> 00:19:26,440
Speaker 10: actually the employment mandate is not as problematic as I

379
00:19:26,440 --> 00:19:27,960
Speaker 10: thought it was. I still want to do one hundred

380
00:19:28,000 --> 00:19:33,000
Speaker 10: bases points of cuts. However, you know I could have

381
00:19:33,040 --> 00:19:36,480
Speaker 10: done even more than that, had you know, had we

382
00:19:36,520 --> 00:19:38,000
Speaker 10: not seen this issue.

383
00:19:37,840 --> 00:19:39,560
Speaker 3: Would you have answered that the same way?

384
00:19:39,600 --> 00:19:41,320
Speaker 2: If the ruling had not come today and you would

385
00:19:41,320 --> 00:19:43,320
Speaker 2: only seen the data.

386
00:19:42,800 --> 00:19:45,720
Speaker 10: You know, I would say that it would be even

387
00:19:45,880 --> 00:19:48,399
Speaker 10: more the case that inflation was a problem.

388
00:19:48,560 --> 00:19:51,440
Speaker 3: I think inflation is a problem. It would have been

389
00:19:51,440 --> 00:19:54,399
Speaker 3: more of a problem without the terriffs being was sended.

390
00:19:54,800 --> 00:19:57,520
Speaker 3: Did you kick out your newsletter on Wednesday?

391
00:19:57,560 --> 00:19:57,800
Speaker 10: I did?

392
00:19:58,640 --> 00:20:01,240
Speaker 3: I have a macro view special on the ruling?

393
00:20:01,280 --> 00:20:02,920
Speaker 2: You do all right, beautiful, look for it on the

394
00:20:03,000 --> 00:20:06,040
Speaker 2: terminal or online. You're so good at this I appreciate

395
00:20:06,040 --> 00:20:08,280
Speaker 2: your walking us through it. Edward Harrison live in our

396
00:20:08,400 --> 00:20:10,480
Speaker 2: Washington bureau here on Balance of Power.

397
00:20:11,160 --> 00:20:13,480
Speaker 3: Kaylee Lines picked a pretty good data not be here,

398
00:20:13,600 --> 00:20:16,359
Speaker 3: it seems to me. I bet she's enjoying all of

399
00:20:16,359 --> 00:20:18,240
Speaker 3: this right now. Big tariff ruling.

400
00:20:18,359 --> 00:20:21,160
Speaker 2: If you're just joining us, this is the day we've

401
00:20:21,160 --> 00:20:21,800
Speaker 2: been waiting for.

402
00:20:21,840 --> 00:20:22,560
Speaker 3: The big kahuna.

403
00:20:22,680 --> 00:20:25,760
Speaker 2: Happened at ten am and the court has struck down

404
00:20:25,800 --> 00:20:29,080
Speaker 2: the tariffs across the board, ending the tariff regime until,

405
00:20:29,119 --> 00:20:31,159
Speaker 2: of course, we hear next from the President, which is

406
00:20:31,160 --> 00:20:33,360
Speaker 2: going to be about twenty minutes from now, if things

407
00:20:33,359 --> 00:20:36,000
Speaker 2: are on time twelve forty five Washington time and news

408
00:20:36,000 --> 00:20:37,959
Speaker 2: briefing at the White House that we will bring you

409
00:20:38,000 --> 00:20:40,520
Speaker 2: live here on Bloomberg. I'm going to remind everybody this

410
00:20:40,600 --> 00:20:42,400
Speaker 2: is not the only story in the world here, not

411
00:20:42,520 --> 00:20:45,399
Speaker 2: just the data, not just the ruling. We are also

412
00:20:45,520 --> 00:20:49,040
Speaker 2: on watch for a potential series of strikes military strikes

413
00:20:49,040 --> 00:20:52,959
Speaker 2: against Iran, and we're going to involve ourselves in that

414
00:20:53,000 --> 00:20:53,840
Speaker 2: part of the conversation.

415
00:20:53,960 --> 00:20:54,560
Speaker 3: Coming up next.

416
00:20:54,560 --> 00:20:58,040
Speaker 2: Michael O'Hanlon Brookings Institution will join us for what to

417
00:20:58,119 --> 00:21:01,000
Speaker 2: watch this weekend. Stay with us, Balance of Power We'll

418
00:21:01,040 --> 00:21:02,640
Speaker 2: have much more coming up after this.

419
00:21:08,040 --> 00:21:11,520
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

420
00:21:11,600 --> 00:21:15,520
Speaker 1: us live weekdays at noon and five pm Eastern on Applecarclay,

421
00:21:15,560 --> 00:21:18,600
Speaker 1: and Android Auto with the Bloomberg Business app. Listen on

422
00:21:18,640 --> 00:21:21,920
Speaker 1: demand wherever you get your podcasts, or watch us live

423
00:21:22,000 --> 00:21:25,080
Speaker 1: on YouTube.

424
00:21:24,119 --> 00:21:27,639
Speaker 2: On Bloomberg Radio, streaming live on YouTube, and of course

425
00:21:27,760 --> 00:21:30,240
Speaker 2: on Bloomberg Originals. If you're in the car, work channel

426
00:21:30,240 --> 00:21:33,639
Speaker 2: one twenty one on your satellite radio. We'll welcome our

427
00:21:33,680 --> 00:21:35,840
Speaker 2: global television audience to the program about a half an

428
00:21:35,840 --> 00:21:38,119
Speaker 2: hour from now. We will likely be underway at that

429
00:21:38,280 --> 00:21:40,960
Speaker 2: time in a news conference at the White House and

430
00:21:41,040 --> 00:21:45,240
Speaker 2: news briefing as it's been built by the Press Secretary,

431
00:21:45,280 --> 00:21:47,520
Speaker 2: and of course sometimes those don't involve questions. We'll just

432
00:21:47,560 --> 00:21:49,119
Speaker 2: have to find out what form this is going to

433
00:21:49,200 --> 00:21:54,359
Speaker 2: take together with more than just the Supreme Court to

434
00:21:54,480 --> 00:21:58,000
Speaker 2: talk about. The President is being asked very serious questions

435
00:21:58,000 --> 00:22:00,760
Speaker 2: about his plans, his motivations when it comes to Iran.

436
00:22:01,800 --> 00:22:04,800
Speaker 2: Last evening, a series of reports, beginning with The Wall

437
00:22:04,800 --> 00:22:09,320
Speaker 2: Street Journal, that the White House is considering a bloody

438
00:22:09,359 --> 00:22:12,560
Speaker 2: nose strike, as they call it, a little punch in

439
00:22:12,600 --> 00:22:16,760
Speaker 2: the face Tony Sopranos style to wake everybody up and

440
00:22:16,800 --> 00:22:21,359
Speaker 2: in this case, pressure Iran to cut a deal, knowing

441
00:22:21,480 --> 00:22:25,160
Speaker 2: that we have the largest build up of military forces

442
00:22:25,160 --> 00:22:28,000
Speaker 2: in the region since two thousand and three. Right, So,

443
00:22:28,160 --> 00:22:31,919
Speaker 2: bloody nose strike. Then you give them a timeline and

444
00:22:32,000 --> 00:22:35,240
Speaker 2: let them wait to sign the deal unless you want

445
00:22:35,240 --> 00:22:37,920
Speaker 2: to feel the full force of the American military. That's

446
00:22:37,920 --> 00:22:39,920
Speaker 2: at least the report. Now it's one of the options

447
00:22:39,960 --> 00:22:41,919
Speaker 2: being weighed by this president who says he'll make up

448
00:22:41,960 --> 00:22:44,440
Speaker 2: his mind and I don't know ten days, he says,

449
00:22:44,440 --> 00:22:47,000
Speaker 2: maybe twelve. He was asked about it on Air Force

450
00:22:47,040 --> 00:22:47,880
Speaker 2: One just yesterday.

451
00:22:47,920 --> 00:22:50,080
Speaker 3: Listen, it is the goal.

452
00:22:50,359 --> 00:22:52,440
Speaker 5: If they're using US millis work, we're going to make

453
00:22:52,440 --> 00:22:54,040
Speaker 5: a deal or we're going to get a deal one

454
00:22:54,080 --> 00:22:54,600
Speaker 5: way or the other.

455
00:22:54,720 --> 00:22:57,000
Speaker 8: We're you either going to get a deal or it's

456
00:22:57,040 --> 00:22:58,840
Speaker 8: going to be unfortunate for them.

457
00:22:58,840 --> 00:23:00,400
Speaker 5: I would think that would be enough to I'm ten

458
00:23:00,520 --> 00:23:04,240
Speaker 5: fifteen days pretty much maximum.

459
00:23:04,280 --> 00:23:06,360
Speaker 3: Ten fifteen pretty much maximum.

460
00:23:06,560 --> 00:23:09,200
Speaker 2: Last time he said two weeks, it was a strike

461
00:23:09,240 --> 00:23:12,480
Speaker 2: three days later. So we're trying to read tea leaves

462
00:23:12,480 --> 00:23:16,320
Speaker 2: and we're glad to involve Michael O'Hanlon in our conversation today.

463
00:23:16,359 --> 00:23:18,359
Speaker 2: It's been some time, The director of Foreign policy and

464
00:23:18,400 --> 00:23:22,280
Speaker 2: Research at Brookings Institution joins us. Now, Michael, it's great

465
00:23:22,320 --> 00:23:25,000
Speaker 2: to see you. Welcome back to Bloomberg. Where's your head

466
00:23:25,200 --> 00:23:26,880
Speaker 2: this weekend? What are you going to be watching for?

467
00:23:28,320 --> 00:23:28,560
Speaker 10: Thank you.

468
00:23:28,760 --> 00:23:29,399
Speaker 4: Nice to be with you.

469
00:23:29,720 --> 00:23:32,160
Speaker 11: First of all, I think that we need to put

470
00:23:32,160 --> 00:23:34,920
Speaker 11: the build up in perspective because you quoted the Wall

471
00:23:34,960 --> 00:23:38,240
Speaker 11: Street Journal article that said biggest build up since two

472
00:23:38,320 --> 00:23:42,119
Speaker 11: thousand and three. In a way, that headline was a

473
00:23:42,119 --> 00:23:44,760
Speaker 11: little misleading in the sense that this is not a

474
00:23:44,840 --> 00:23:47,640
Speaker 11: huge armada. The build up in two thousand and three

475
00:23:47,920 --> 00:23:51,080
Speaker 11: was probably five to ten times greater than this one.

476
00:23:51,160 --> 00:23:53,520
Speaker 11: And then we kept forces in the broader Middle East

477
00:23:53,520 --> 00:23:55,960
Speaker 11: that were much larger than what we've got there right now,

478
00:23:56,160 --> 00:23:59,840
Speaker 11: throughout the entire Iraq war, so for seven or eight years,

479
00:24:00,000 --> 00:24:00,760
Speaker 11: and so this.

480
00:24:00,720 --> 00:24:04,200
Speaker 4: Is a couple hundred aircraft, maybe a little more. That's

481
00:24:04,240 --> 00:24:04,639
Speaker 4: a lot.

482
00:24:05,119 --> 00:24:08,520
Speaker 11: It's partly, I think, designed to handle any retaliation by

483
00:24:08,560 --> 00:24:14,360
Speaker 11: iron against American Basis, Jordan, Israel should we undertake various strikes.

484
00:24:15,080 --> 00:24:18,280
Speaker 11: And of course President Trump's happy to see it discussed

485
00:24:18,280 --> 00:24:20,000
Speaker 11: as an absolutely huge armada.

486
00:24:20,080 --> 00:24:21,720
Speaker 4: But I think we need to keep that in.

487
00:24:21,720 --> 00:24:24,840
Speaker 11: Perspective, which means that we're not really committed to any

488
00:24:24,880 --> 00:24:27,280
Speaker 11: immediate The reason why I make that distinction is we're

489
00:24:27,320 --> 00:24:31,040
Speaker 11: not therefore committed to any near term quick action just

490
00:24:31,080 --> 00:24:35,240
Speaker 11: because we've somehow leveraged ourselves exclusively on this particular moment

491
00:24:35,640 --> 00:24:38,960
Speaker 11: with a buildup that cannot otherwise be sustained. This is

492
00:24:39,000 --> 00:24:42,200
Speaker 11: a big capability, but it's something that President Trump can

493
00:24:42,280 --> 00:24:45,000
Speaker 11: sort of play around with, if you will, can try

494
00:24:45,000 --> 00:24:48,840
Speaker 11: to use as negotiating leverage. Could undertake a brief strike

495
00:24:48,880 --> 00:24:52,080
Speaker 11: and then follow it up with a larger strike. And

496
00:24:52,160 --> 00:24:55,360
Speaker 11: so the bloody nose option quote unquote raises the obvious

497
00:24:55,440 --> 00:24:58,120
Speaker 11: question which targets are you going after and which are

498
00:24:58,160 --> 00:25:01,400
Speaker 11: you withholding or And I think that if there were

499
00:25:01,400 --> 00:25:03,639
Speaker 11: going to be a bloody no strike quote unquote, it

500
00:25:03,680 --> 00:25:06,879
Speaker 11: would probably involve maybe some of the air defenses or

501
00:25:07,280 --> 00:25:10,679
Speaker 11: the beginnings of new work around the nuclear sites that

502
00:25:10,680 --> 00:25:14,880
Speaker 11: we struck last June. Or it could possibly aim at

503
00:25:15,000 --> 00:25:17,720
Speaker 11: one or two of the missile launching test sites or

504
00:25:17,760 --> 00:25:22,760
Speaker 11: production facilities, of which Iran probably has dozens total, and

505
00:25:22,880 --> 00:25:25,080
Speaker 11: therefore send the message that if you don't do a

506
00:25:25,119 --> 00:25:28,280
Speaker 11: deal soon, we can attack the full range of targets.

507
00:25:28,560 --> 00:25:30,280
Speaker 11: And then, of course the last piece. Sorry for the

508
00:25:30,280 --> 00:25:33,800
Speaker 11: long answer, but the last piece is the Iranian leadership itself,

509
00:25:34,200 --> 00:25:37,440
Speaker 11: and whether now that Israel's killed so many Hamas leaders

510
00:25:37,440 --> 00:25:40,640
Speaker 11: and killed the leader of Hesbolah and thought about going

511
00:25:40,680 --> 00:25:44,200
Speaker 11: after the the Supreme leader in Iran last spring according

512
00:25:44,240 --> 00:25:47,920
Speaker 11: to reports, maybe this would be the time that President

513
00:25:47,960 --> 00:25:50,680
Speaker 11: Trump and Prime Minister at Yaho would agree it's time

514
00:25:50,680 --> 00:25:52,680
Speaker 11: to go after the political leadership in Iran.

515
00:25:52,720 --> 00:25:53,800
Speaker 4: That would be a huge step.

516
00:25:54,119 --> 00:25:55,679
Speaker 11: But I think they want to put the fear of

517
00:25:55,720 --> 00:25:59,159
Speaker 11: God or fear of Allah into the Supreme Leader and

518
00:25:59,240 --> 00:26:02,240
Speaker 11: his close confidants with this sort of talk of a

519
00:26:02,280 --> 00:26:04,320
Speaker 11: bloody nose and then maybe a bigger.

520
00:26:04,080 --> 00:26:09,600
Speaker 2: Strike later fear of God's strike. So interesting, and you

521
00:26:09,680 --> 00:26:12,000
Speaker 2: set that out really nicely. The fact that the Trump

522
00:26:12,080 --> 00:26:16,040
Speaker 2: team has not at least publicly made explicit what Iran

523
00:26:16,119 --> 00:26:19,760
Speaker 2: needs to do to cut a deal to avoid a strike,

524
00:26:20,280 --> 00:26:23,600
Speaker 2: I find interesting. Do you think that's being delineated privately

525
00:26:23,800 --> 00:26:25,679
Speaker 2: between the two nations?

526
00:26:26,320 --> 00:26:26,880
Speaker 4: Yeah, I do.

527
00:26:27,040 --> 00:26:30,000
Speaker 11: My sense is that they really want to complete, verifiable

528
00:26:30,000 --> 00:26:33,880
Speaker 11: and to all elements of Iran's nuclear enrichment and potential

529
00:26:33,920 --> 00:26:37,080
Speaker 11: weapons capabilities. So, in other words, as you know, for

530
00:26:37,160 --> 00:26:40,119
Speaker 11: many years we watched Iran and rich and we agreed

531
00:26:40,160 --> 00:26:44,080
Speaker 11: at what point they should stop. What concentration of uranium

532
00:26:44,080 --> 00:26:46,679
Speaker 11: two thirty five. As you know, you need ninety percent

533
00:26:46,720 --> 00:26:49,600
Speaker 11: you two thirty five to sustain a nuclear reaction, but

534
00:26:49,640 --> 00:26:52,159
Speaker 11: it's only zero point seven percent in natural uranium.

535
00:26:52,200 --> 00:26:54,640
Speaker 4: That's why you enrich, and you do it in several stages.

536
00:26:54,680 --> 00:26:57,240
Speaker 11: So the first stage getting it up to maybe three

537
00:26:57,320 --> 00:26:59,440
Speaker 11: five percent U two thirty five is no big deal

538
00:27:00,200 --> 00:27:03,000
Speaker 11: near weapons grade. That's what you do to get fuel

539
00:27:03,040 --> 00:27:06,800
Speaker 11: ready for reactors, and so we've had inspectors watching that process.

540
00:27:06,840 --> 00:27:08,920
Speaker 4: But of course, after President Trump.

541
00:27:08,720 --> 00:27:11,040
Speaker 11: Pulled out of the Iran nuclear deal in his first term,

542
00:27:11,280 --> 00:27:14,320
Speaker 11: the constraints have sort of been off, and Iran's exceeded

543
00:27:14,359 --> 00:27:17,920
Speaker 11: previous agreed thresholds and gotten up to sixty percent you

544
00:27:18,040 --> 00:27:20,439
Speaker 11: two thirty five. We don't know where all that U

545
00:27:20,440 --> 00:27:23,560
Speaker 11: two thirty five is right now. Some of it might

546
00:27:23,560 --> 00:27:25,920
Speaker 11: have been destroyed or at least rendered inaccessible in the

547
00:27:26,000 --> 00:27:29,640
Speaker 11: June strikes. The United States could demand of Iran, let's

548
00:27:29,680 --> 00:27:32,359
Speaker 11: find all that sixty percent you two thirty five, and

549
00:27:32,400 --> 00:27:36,760
Speaker 11: we want it, and also we want verifiable confirmation going

550
00:27:36,800 --> 00:27:40,959
Speaker 11: forward that you don't reconstitute any of your centrifuge facilities

551
00:27:40,960 --> 00:27:43,600
Speaker 11: that can be used to further enrich uranium, So that

552
00:27:43,640 --> 00:27:46,200
Speaker 11: would be the basic deal thereafter. They don't want Ron

553
00:27:46,240 --> 00:27:49,200
Speaker 11: to have any ability to enrich any uranium at all.

554
00:27:49,359 --> 00:27:51,959
Speaker 4: That's my understanding of their goal. And on the missile

555
00:27:51,960 --> 00:27:53,000
Speaker 4: issue and.

556
00:27:53,000 --> 00:27:55,199
Speaker 11: Other issues, they are a little bit more flexible, but

557
00:27:55,200 --> 00:27:57,399
Speaker 11: they're adamant on the nuclear enrichment question.

558
00:27:58,640 --> 00:28:01,000
Speaker 2: If there is a strike, does the US do this

559
00:28:01,119 --> 00:28:03,560
Speaker 2: alone or do we have Israeli planes in the air

560
00:28:03,720 --> 00:28:06,400
Speaker 2: as well or some other type of support.

561
00:28:08,600 --> 00:28:11,320
Speaker 11: You know, that's an excellent question in the sense that

562
00:28:11,520 --> 00:28:16,359
Speaker 11: we've tended to prioritize the nuclear issue, and Israel, of

563
00:28:16,359 --> 00:28:19,159
Speaker 11: course prioritizes it too, but has let the United States

564
00:28:19,160 --> 00:28:23,000
Speaker 11: sort of drive that debate with the Joint Comprehensive Plan

565
00:28:23,080 --> 00:28:26,600
Speaker 11: of Action negotiated under President Obama with the strikes last

566
00:28:26,680 --> 00:28:30,520
Speaker 11: June where we did the major damage to the underground facilities.

567
00:28:30,840 --> 00:28:34,560
Speaker 11: So in a sense, it would make a logical division

568
00:28:34,600 --> 00:28:37,320
Speaker 11: of labor for Israel to keep doing the kind of

569
00:28:37,320 --> 00:28:40,360
Speaker 11: things it did last spring in regard to ballistic missile

570
00:28:40,400 --> 00:28:43,400
Speaker 11: launchers and air defenses, and the United States to handle

571
00:28:43,400 --> 00:28:46,719
Speaker 11: the nuclear portfolio. And so if you just did a

572
00:28:46,760 --> 00:28:50,160
Speaker 11: strike against nuclear targets, maybe the United States does that

573
00:28:50,200 --> 00:28:53,120
Speaker 11: by itself. But I'm really speculating here. I think you

574
00:28:53,160 --> 00:28:55,240
Speaker 11: know it could go either way.

575
00:28:55,280 --> 00:28:55,760
Speaker 3: Interesting.

576
00:28:56,440 --> 00:29:00,560
Speaker 2: I've only got about ninety seconds here, Michael, and loath

577
00:29:00,680 --> 00:29:04,840
Speaker 2: to cut you off. Are you concerned that there might

578
00:29:04,880 --> 00:29:08,560
Speaker 2: be some sort of kinetic activity this weekend or would

579
00:29:08,560 --> 00:29:11,840
Speaker 2: it be next weekend once the carrier strike group arrives,

580
00:29:12,440 --> 00:29:15,760
Speaker 2: once Iran has a chance to present, as it says

581
00:29:15,760 --> 00:29:17,560
Speaker 2: its detailed proposals.

582
00:29:18,440 --> 00:29:21,880
Speaker 11: Feels more like the following weekend to me. But again,

583
00:29:22,680 --> 00:29:25,560
Speaker 11: President Trump likes to keep us all guessing. I think

584
00:29:25,560 --> 00:29:29,080
Speaker 11: he does feel that he was an honest negotiator last time,

585
00:29:29,080 --> 00:29:30,760
Speaker 11: and that he gave a Ron a certain number of

586
00:29:30,800 --> 00:29:33,080
Speaker 11: weeks and then once there was no deal, then he

587
00:29:33,120 --> 00:29:38,080
Speaker 11: struck pretty quickly, and Israel striking pretty quickly. So in

588
00:29:38,120 --> 00:29:41,000
Speaker 11: that regard, I think he likes to have this reputation

589
00:29:41,080 --> 00:29:43,720
Speaker 11: of a straight shooter, so to speak. And to the

590
00:29:43,760 --> 00:29:47,680
Speaker 11: extent he's talking about ten more days, it seems that

591
00:29:47,760 --> 00:29:50,400
Speaker 11: maybe he would grant that. On the other hand, if

592
00:29:50,440 --> 00:29:53,640
Speaker 11: his bloody nos idea is meant to tell Iran you

593
00:29:53,720 --> 00:29:56,360
Speaker 11: better do a real deal within ten days, and I'm

594
00:29:56,400 --> 00:29:58,960
Speaker 11: going to change your calculus by giving you some more

595
00:29:59,240 --> 00:30:02,240
Speaker 11: reason to think I'm serious than maybe the quote unquote,

596
00:30:02,280 --> 00:30:04,440
Speaker 11: you know, smaller strike or bloody nos strike does happen

597
00:30:04,720 --> 00:30:05,560
Speaker 11: in the coming days.

598
00:30:05,560 --> 00:30:06,680
Speaker 4: My money is against that.

599
00:30:07,040 --> 00:30:09,760
Speaker 11: I think it's probably more likely to be in ten

600
00:30:09,840 --> 00:30:10,960
Speaker 11: to fifteen days.

601
00:30:11,120 --> 00:30:11,720
Speaker 4: But who knows.

602
00:30:12,800 --> 00:30:15,280
Speaker 2: It's always a real pleasure to spend time with somebody

603
00:30:15,320 --> 00:30:17,160
Speaker 2: who knows what they're talking about, and that's the case

604
00:30:17,200 --> 00:30:21,200
Speaker 2: with Michael o'hanlan on this particular story. Years of research

605
00:30:21,480 --> 00:30:23,560
Speaker 2: went into what you just heard from the director of

606
00:30:23,600 --> 00:30:25,200
Speaker 2: Foreign Policy Research at Brookings.

607
00:30:25,240 --> 00:30:25,520
Speaker 3: Michael.

608
00:30:25,520 --> 00:30:27,520
Speaker 2: Thank you, don't be a stranger, because boy, this is

609
00:30:28,040 --> 00:30:28,760
Speaker 2: far from over.

610
00:30:29,080 --> 00:30:31,040
Speaker 3: Bloody knows. This weekend, we'll see.

611
00:30:30,800 --> 00:30:32,920
Speaker 2: That's just what the market's going to want after this

612
00:30:33,000 --> 00:30:36,320
Speaker 2: ruling on the Supreme Court. Right, we'll assemble our political

613
00:30:36,320 --> 00:30:38,240
Speaker 2: panel next with a lot to talk about here on

614
00:30:38,280 --> 00:30:40,560
Speaker 2: Balance of Power. Stay with us. We're live in Washington

615
00:30:40,720 --> 00:30:43,320
Speaker 2: on Bloomberg. Stay with us on Balance of Power. We'll

616
00:30:43,360 --> 00:30:44,960
Speaker 2: have much more coming up after this.

617
00:30:49,240 --> 00:30:52,720
Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch

618
00:30:52,760 --> 00:30:55,840
Speaker 1: us live weekdays at noon and five pm Eastern on

619
00:30:55,960 --> 00:30:59,200
Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business app.

620
00:30:59,240 --> 00:31:02,800
Speaker 1: You can also live on Amazon Alexa from our flagship

621
00:31:02,880 --> 00:31:06,760
Speaker 1: New York station Just say Alexa played Bloomberg eleven thirty.

622
00:31:08,040 --> 00:31:09,360
Speaker 2: We're going to get into all of this with the

623
00:31:09,400 --> 00:31:13,120
Speaker 2: panel in a moment, not just the ruling today. Look,

624
00:31:13,160 --> 00:31:15,000
Speaker 2: you can be surprised or not. You can have a

625
00:31:15,040 --> 00:31:17,040
Speaker 2: reaction or not. On Wall Street. It is kind of

626
00:31:17,040 --> 00:31:20,840
Speaker 2: amazing what the reaction has been. As you just heard

627
00:31:20,840 --> 00:31:23,160
Speaker 2: from Nathan, we're not even positive on the down anymore.

628
00:31:23,160 --> 00:31:26,160
Speaker 2: This is supposed to be party time. But of course

629
00:31:26,240 --> 00:31:29,200
Speaker 2: the President's got other plans. They saw this coming, and

630
00:31:29,280 --> 00:31:32,560
Speaker 2: so did Terry Haynes, the founder of Pangaea Policy, who

631
00:31:32,600 --> 00:31:35,600
Speaker 2: was holding forth on Bloomberg just about an hour ago,

632
00:31:35,680 --> 00:31:37,320
Speaker 2: just cranked out a new note to clients. And this

633
00:31:37,360 --> 00:31:39,520
Speaker 2: is really interesting. This is important. I want you to

634
00:31:40,080 --> 00:31:43,960
Speaker 2: remember this as we watch Mike Johnson make his next move,

635
00:31:44,000 --> 00:31:47,840
Speaker 2: and as we wait to hear from the president. Number one,

636
00:31:47,880 --> 00:31:50,719
Speaker 2: he says, Trump still has many tariff powers, at least five. Right,

637
00:31:50,760 --> 00:31:53,560
Speaker 2: we talked about his five options earlier this hour, none

638
00:31:53,600 --> 00:31:56,200
Speaker 2: of which are in dispute. He will use them all. Okay, fine,

639
00:31:56,240 --> 00:32:00,680
Speaker 2: no shocker there. This is where it gets interesting. Terry says,

640
00:32:00,720 --> 00:32:03,680
Speaker 2: Trump is likely to get from Congress and IIPA fix

641
00:32:04,400 --> 00:32:08,120
Speaker 2: to get the emergency tariff authority. He wants listen for

642
00:32:08,200 --> 00:32:11,560
Speaker 2: it on Tuesday. Yeah, the State of the Union on Tuesday,

643
00:32:11,760 --> 00:32:14,720
Speaker 2: when he's going to call out the justices of the

644
00:32:14,720 --> 00:32:19,480
Speaker 2: Supreme Court in the front row. Tuesday just got rich, right,

645
00:32:20,560 --> 00:32:23,600
Speaker 2: but this is important. Listen for it in the State

646
00:32:23,600 --> 00:32:26,280
Speaker 2: of the Union, or even today, maybe a couple of

647
00:32:26,280 --> 00:32:29,560
Speaker 2: moments from now when President Trump speaks the President and

648
00:32:29,600 --> 00:32:33,400
Speaker 2: the Republicans on Capitol Hill. Already we're likely to use

649
00:32:34,840 --> 00:32:39,040
Speaker 2: let me say it out loud, reconciliation for the big

650
00:32:39,120 --> 00:32:40,680
Speaker 2: beautiful Bill two point zero.

651
00:32:40,720 --> 00:32:42,600
Speaker 3: There were big questions about what would go in it.

652
00:32:42,680 --> 00:32:43,480
Speaker 3: Well now you know.

653
00:32:44,920 --> 00:32:48,479
Speaker 2: Even more likely now that it almost certainly includes an

654
00:32:48,520 --> 00:32:50,000
Speaker 2: i EPA tariff's fix.

655
00:32:51,560 --> 00:32:52,800
Speaker 3: So the playbook is there.

656
00:32:52,880 --> 00:32:56,640
Speaker 2: They've already got it, Mike Johnson, as we told you

657
00:32:56,680 --> 00:33:00,720
Speaker 2: earlier on not true social but the good old thing X.

658
00:33:01,560 --> 00:33:04,200
Speaker 2: He says, Congress and the administration will determine the best

659
00:33:04,200 --> 00:33:07,600
Speaker 2: path forward in the coming weeks. This has already been

660
00:33:07,600 --> 00:33:09,520
Speaker 2: written into the speech for Tuesday, right, or it's going

661
00:33:09,560 --> 00:33:12,080
Speaker 2: to be going in this weekend the question is.

662
00:33:14,760 --> 00:33:15,560
Speaker 3: Are the votes there.

663
00:33:15,880 --> 00:33:18,280
Speaker 2: We already saw Republicans cross the aisle when it came

664
00:33:18,320 --> 00:33:22,200
Speaker 2: to Canadian tariffs. I've seen Republicans crossed the island a

665
00:33:22,240 --> 00:33:23,920
Speaker 2: couple of things recently. We've had a little bit of

666
00:33:23,920 --> 00:33:26,920
Speaker 2: a jail break when it came to the Department of

667
00:33:26,960 --> 00:33:31,680
Speaker 2: Homeland Security funding, when it came to ACA premiums, Obamacare

668
00:33:32,880 --> 00:33:36,440
Speaker 2: premiums that were ever rising. And all of this feeds

669
00:33:36,440 --> 00:33:39,720
Speaker 2: into the same story about affordability. Right This is about

670
00:33:39,720 --> 00:33:41,800
Speaker 2: prices we're talking and of course, well yesterday, if you

671
00:33:41,800 --> 00:33:46,200
Speaker 2: listen to the President at his affordability speech in Rome, Georgia,

672
00:33:46,280 --> 00:33:50,440
Speaker 2: he put up the Mission Accomplished sign on affordability.

673
00:33:50,480 --> 00:33:54,960
Speaker 5: Listen, we inherited a mess with high prices and high inflation,

674
00:33:55,360 --> 00:33:57,640
Speaker 5: and we've turned it around and we've made it great.

675
00:33:57,680 --> 00:34:01,240
Speaker 5: They caused the affordability problem and we've solved it. What

676
00:34:01,360 --> 00:34:05,280
Speaker 5: word have you not heard over the last two weeks affordability?

677
00:34:06,000 --> 00:34:09,320
Speaker 5: Because I've won I've won affordability.

678
00:34:10,760 --> 00:34:15,560
Speaker 2: I've won affordability, which makes Genie Shenzano smile ear to

679
00:34:15,640 --> 00:34:20,040
Speaker 2: ear because they're making the ads right now. Genie is,

680
00:34:20,080 --> 00:34:25,320
Speaker 2: of course one side of our great panel Bloomberg Politics contributor,

681
00:34:25,400 --> 00:34:29,040
Speaker 2: democratic strategist, and democracy visiting fellow at Harvard Kennedy Schools

682
00:34:29,080 --> 00:34:32,320
Speaker 2: ASH Center. She's joined today by Republican strategist John Seaton,

683
00:34:32,360 --> 00:34:36,200
Speaker 2: the founder CEO of Echo Canyon Consulting. Great to see

684
00:34:36,239 --> 00:34:38,680
Speaker 2: you both. Bet you didn't know what you were signing

685
00:34:38,760 --> 00:34:41,600
Speaker 2: up for today. Genie, start me off on this one.

686
00:34:42,760 --> 00:34:45,120
Speaker 2: We have so many threads that the President will be

687
00:34:45,160 --> 00:34:48,759
Speaker 2: weaving through in his news conference coming up, and I'll

688
00:34:48,840 --> 00:34:50,440
Speaker 2: you know, we're all going to be interrupted at some

689
00:34:50,520 --> 00:34:58,160
Speaker 2: point here when he begins, Genie, he won affordability? Did

690
00:34:58,160 --> 00:35:04,200
Speaker 2: the Supreme Court just help Republicans maintain the majority?

691
00:35:06,040 --> 00:35:07,680
Speaker 3: Well, we don't.

692
00:35:07,400 --> 00:35:10,840
Speaker 12: Know yet, but there's certainly got to be some members

693
00:35:10,880 --> 00:35:14,120
Speaker 12: of Congress on the Republican side who are quietly, very

694
00:35:14,200 --> 00:35:17,759
Speaker 12: quietly happy about this ruling, because, of course they know

695
00:35:18,160 --> 00:35:21,880
Speaker 12: what Donald Trump refused to acknowledge yesterday in the speech,

696
00:35:22,280 --> 00:35:25,719
Speaker 12: which is that the American public does not feel like

697
00:35:25,800 --> 00:35:28,399
Speaker 12: he has won the affordability war. I mean, we talked

698
00:35:28,440 --> 00:35:32,200
Speaker 12: frequently about this k shaped economy where people at the top,

699
00:35:32,280 --> 00:35:33,880
Speaker 12: the kind of people who go to mar A Lago,

700
00:35:34,000 --> 00:35:37,319
Speaker 12: who the President hangs out with, they're swimming along, But

701
00:35:37,440 --> 00:35:39,680
Speaker 12: it's the people at the bottom, that people who helped

702
00:35:39,719 --> 00:35:44,160
Speaker 12: get Republicans in office, who are telling polsters in really

703
00:35:44,280 --> 00:35:50,120
Speaker 12: high numbers that the economy is an enormous concern. Affordability, inflation,

704
00:35:50,280 --> 00:35:53,320
Speaker 12: the cost of living, prices at the at the groceries,

705
00:35:53,320 --> 00:35:54,319
Speaker 12: at the pubs, you.

706
00:35:54,239 --> 00:35:57,160
Speaker 3: Go on and on. So that is you do see.

707
00:35:57,239 --> 00:36:01,560
Speaker 12: Republicans may be quietly happy about this. And I love

708
00:36:01,719 --> 00:36:04,600
Speaker 12: Terry talking about the fact that we're going to have reconciliation,

709
00:36:04,719 --> 00:36:05,680
Speaker 12: because what does that mean.

710
00:36:05,800 --> 00:36:07,960
Speaker 4: Or we may have reconciliation, that.

711
00:36:07,880 --> 00:36:10,680
Speaker 12: Means those Republicans who just want to go home, Joe

712
00:36:10,719 --> 00:36:14,480
Speaker 12: and run for office and say, you know, didn't increase

713
00:36:14,560 --> 00:36:17,440
Speaker 12: these tariffs and these taxes. We hear you now are

714
00:36:17,480 --> 00:36:19,920
Speaker 12: going to be battling with the Speaker of the House

715
00:36:20,000 --> 00:36:24,359
Speaker 12: and potentially the President on fixing IEPA or at least

716
00:36:24,440 --> 00:36:27,560
Speaker 12: changing the language to allow the president to do something

717
00:36:28,080 --> 00:36:31,439
Speaker 12: that middle class family is half suffered from. So all

718
00:36:31,440 --> 00:36:33,879
Speaker 12: in all, not a good day for the president. That's

719
00:36:33,880 --> 00:36:36,520
Speaker 12: why he's using choice language, and not a good day

720
00:36:36,560 --> 00:36:40,239
Speaker 12: for Republicans at least out Loud I.

721
00:36:40,200 --> 00:36:43,560
Speaker 3: Saw something about that.

722
00:36:42,320 --> 00:36:44,759
Speaker 2: That choice language. The front of the Drudge Report is

723
00:36:44,800 --> 00:36:47,480
Speaker 2: wild at the moment. So all right, john how do

724
00:36:47,560 --> 00:36:50,440
Speaker 2: we get to this? This is huge for the midterms.

725
00:36:50,960 --> 00:36:52,880
Speaker 2: Did you break into a sweat when you heard this

726
00:36:53,080 --> 00:36:56,680
Speaker 2: because it was good or bad news? And I guess

727
00:36:57,680 --> 00:37:00,759
Speaker 2: there's a chance that this IEPA fix could happen reconciliation.

728
00:37:00,880 --> 00:37:03,480
Speaker 3: But does the president have the votes?

729
00:37:05,000 --> 00:37:07,520
Speaker 6: You know, I'm not sure about that, and as you've noted,

730
00:37:07,520 --> 00:37:10,120
Speaker 6: there has been I wouldn't say a full jail break.

731
00:37:10,120 --> 00:37:12,160
Speaker 6: But when you have such a narrow majority, when you

732
00:37:12,239 --> 00:37:17,440
Speaker 6: have resignations, when you have the House Republican Conference really

733
00:37:17,480 --> 00:37:19,839
Speaker 6: only having one or two votes to spare on any

734
00:37:19,840 --> 00:37:23,040
Speaker 6: given issue, assuming the Democrats continue to vote in lockstep,

735
00:37:24,239 --> 00:37:26,680
Speaker 6: the margin fair is very very small. So I am

736
00:37:26,719 --> 00:37:29,520
Speaker 6: skeptical that Speaker Johnson will be able to get the

737
00:37:29,640 --> 00:37:34,719
Speaker 6: votes to force this fix through a reconciliation bill. Time

738
00:37:34,760 --> 00:37:37,240
Speaker 6: will tell, but I have to tell you to your point,

739
00:37:37,520 --> 00:37:39,720
Speaker 6: I think that there's a lot of Republicans in swing

740
00:37:39,760 --> 00:37:43,040
Speaker 6: districts who are already starting to see signs of economic

741
00:37:43,320 --> 00:37:46,040
Speaker 6: confidence getting a little bit higher, who I think are

742
00:37:46,080 --> 00:37:48,560
Speaker 6: not going to be terribly sad that the tariffs are

743
00:37:49,239 --> 00:37:51,120
Speaker 6: very well likely to go by the wayside.

744
00:37:52,000 --> 00:37:55,719
Speaker 2: Really interesting. What do you think the President's going to

745
00:37:55,760 --> 00:37:57,920
Speaker 2: say here in a couple of minutes. Genie, we don't

746
00:37:57,960 --> 00:37:59,520
Speaker 2: have a two minute warning yet, but at some point

747
00:37:59,560 --> 00:38:00,520
Speaker 2: he's going to emerge.

748
00:38:01,400 --> 00:38:05,200
Speaker 3: We understand he's very upset. I guess you could assume

749
00:38:05,239 --> 00:38:06,680
Speaker 3: that based on the ruling today.

750
00:38:06,680 --> 00:38:10,120
Speaker 2: But does he actually call on Congress to draft a

751
00:38:10,160 --> 00:38:14,520
Speaker 2: reconciliation plan to fix AEPA?

752
00:38:15,160 --> 00:38:17,560
Speaker 12: You know, I think strategically, if I would it was

753
00:38:17,600 --> 00:38:20,000
Speaker 12: to advise him, I would say absolutely not. I mean,

754
00:38:20,120 --> 00:38:25,160
Speaker 12: John just mentioned it. These margins are so tight Congress

755
00:38:25,280 --> 00:38:28,200
Speaker 12: doing anything. Heck, Joe, these people cannot even pass a

756
00:38:28,320 --> 00:38:31,080
Speaker 12: budget on time. Are they really going to do this

757
00:38:31,160 --> 00:38:34,240
Speaker 12: during an election year with margins this type on something

758
00:38:34,280 --> 00:38:38,319
Speaker 12: this wildly unpopular in swing districts. I don't think it

759
00:38:38,400 --> 00:38:41,839
Speaker 12: makes sense politically. He may ask for it, he does have,

760
00:38:41,960 --> 00:38:44,960
Speaker 12: and you were just listing those earlier, these five avenues

761
00:38:45,000 --> 00:38:48,280
Speaker 12: by which to do this. The problem for the president,

762
00:38:48,360 --> 00:38:51,279
Speaker 12: and I'm so curious about how he comes out he's

763
00:38:51,280 --> 00:38:56,120
Speaker 12: certainly angry, is that there is nothing, probably even nothing

764
00:38:56,239 --> 00:38:58,880
Speaker 12: even beyond his children, that he is more committed to

765
00:38:59,000 --> 00:39:02,560
Speaker 12: during his life for the last fifty years than tariffs

766
00:39:02,920 --> 00:39:06,960
Speaker 12: twenty eight times in Georgia, yesterday he said the word tariffs.

767
00:39:07,320 --> 00:39:08,600
Speaker 3: He loves tariffs.

768
00:39:08,880 --> 00:39:11,520
Speaker 12: It is a tool for him economically, it is a

769
00:39:11,560 --> 00:39:14,520
Speaker 12: foreign policy tool. It is a carrot, it is a stick.

770
00:39:14,760 --> 00:39:17,359
Speaker 12: He holds them and lords them over people's heads. To

771
00:39:17,440 --> 00:39:20,080
Speaker 12: have that taken away for him is from him rather

772
00:39:20,200 --> 00:39:22,799
Speaker 12: is going to sting. And while he has these five

773
00:39:22,840 --> 00:39:26,080
Speaker 12: other paths, and he could certainly try to push for reconciliation,

774
00:39:26,680 --> 00:39:29,239
Speaker 12: none of those are as smooth as what he had

775
00:39:29,280 --> 00:39:33,759
Speaker 12: with emergency power, because all the sections that you listed three, three, eight, one, two,

776
00:39:33,840 --> 00:39:37,600
Speaker 12: two to one, the whole litany, they all are limited

777
00:39:37,760 --> 00:39:41,440
Speaker 12: in one way or another. They either have time limitations

778
00:39:41,880 --> 00:39:43,880
Speaker 12: or you have to pass a lot of reports. And

779
00:39:44,160 --> 00:39:47,239
Speaker 12: you know, it's the usual mumble jumbo of government and

780
00:39:47,440 --> 00:39:50,560
Speaker 12: the things Donald Trump doesn't like. He wants to impose tariffs,

781
00:39:50,600 --> 00:39:52,680
Speaker 12: and he wants to do it quickly. He was able

782
00:39:52,719 --> 00:39:55,600
Speaker 12: to do that, and two people who he appointed to

783
00:39:55,680 --> 00:39:58,840
Speaker 12: the court have taken that away, along with four others.

784
00:39:58,880 --> 00:40:01,600
Speaker 12: And I think he's go have some choice works for them.

785
00:40:01,880 --> 00:40:05,480
Speaker 2: Maybe, boy, Yeah, Tuesday is going to be something else.

786
00:40:05,760 --> 00:40:07,640
Speaker 2: John Seaton, I don't know what you're expecting from the

787
00:40:07,680 --> 00:40:10,200
Speaker 2: State of the Union, but is there a world in

788
00:40:10,239 --> 00:40:12,640
Speaker 2: which the White House might want to slow roll this

789
00:40:12,920 --> 00:40:17,040
Speaker 2: after talking with John Thune and Mike Johnson say yeah,

790
00:40:17,080 --> 00:40:19,160
Speaker 2: we'll get you this fixed. But it sure would be

791
00:40:19,200 --> 00:40:22,120
Speaker 2: great to time it after November. If we're voting on

792
00:40:22,160 --> 00:40:26,080
Speaker 2: this in the House of Representatives.

793
00:40:25,400 --> 00:40:28,640
Speaker 3: Before voters weigh in on.

794
00:40:28,600 --> 00:40:30,879
Speaker 2: The midterms, it's going to obviously make things a little

795
00:40:30,920 --> 00:40:33,759
Speaker 2: more complicated. Could this end up being good news, this

796
00:40:33,840 --> 00:40:37,759
Speaker 2: ruling for Republicans if the timing helps candidates on the

797
00:40:37,800 --> 00:40:38,520
Speaker 2: midterm trail?

798
00:40:39,640 --> 00:40:42,279
Speaker 6: Well, and you noted that the market is still kind

799
00:40:42,280 --> 00:40:44,080
Speaker 6: of in wait and see mode right now, but I

800
00:40:44,120 --> 00:40:47,200
Speaker 6: would not be at all surprised if economic sentiment does

801
00:40:47,320 --> 00:40:50,799
Speaker 6: get marginally and even much better as a result of this.

802
00:40:51,000 --> 00:40:53,400
Speaker 6: As you noted that the tariffs are not terribly popular,

803
00:40:53,480 --> 00:40:56,040
Speaker 6: there are Republicans in swing districts who are going to

804
00:40:56,040 --> 00:41:00,000
Speaker 6: be running on the economy, and that's what voters clearly

805
00:41:00,200 --> 00:41:02,799
Speaker 6: care about. So I'm sure there'll be discussions in the

806
00:41:02,800 --> 00:41:05,359
Speaker 6: White House about how to roll this out and when

807
00:41:05,400 --> 00:41:07,800
Speaker 6: to roll this out. At the same time, As Genie noted,

808
00:41:08,040 --> 00:41:10,880
Speaker 6: the President has a very long history, long before he

809
00:41:10,920 --> 00:41:13,880
Speaker 6: was a president of United States, of being strongly supportive

810
00:41:13,880 --> 00:41:16,319
Speaker 6: of tariffs. I don't expect for him to just let

811
00:41:16,320 --> 00:41:19,160
Speaker 6: this go, especially knowing that there's a at least fifty

812
00:41:19,160 --> 00:41:21,360
Speaker 6: to fifty chance that he won't have a House majority

813
00:41:21,480 --> 00:41:24,600
Speaker 6: in after November of this year. So I expect the

814
00:41:24,600 --> 00:41:27,080
Speaker 6: State of the Union to be very, very interesting. I

815
00:41:27,120 --> 00:41:29,360
Speaker 6: expect for him to have a number of choice words,

816
00:41:29,680 --> 00:41:33,120
Speaker 6: and I do expect him to call on publican majorities

817
00:41:33,120 --> 00:41:34,720
Speaker 6: to act quickly.

818
00:41:36,080 --> 00:41:41,280
Speaker 2: We just got a statement from taxpayers for common sense, Genie.

819
00:41:41,320 --> 00:41:42,680
Speaker 3: This is the other side of the coin.

820
00:41:42,800 --> 00:41:45,600
Speaker 2: Taxpayers now need Congress to use this ruling as a

821
00:41:45,719 --> 00:41:51,400
Speaker 2: prompt to reassert its constitutionally mandated power to raise revenue.

822
00:41:51,560 --> 00:41:55,200
Speaker 2: Our country is thirty eight trillion dollars in debt, with

823
00:41:55,280 --> 00:41:58,799
Speaker 2: an annual budget deficit round two trillion projected to rise.

824
00:41:58,840 --> 00:42:02,799
Speaker 2: Our country is on an sustainable fiscal path. That would

825
00:42:02,800 --> 00:42:06,680
Speaker 2: be the opposite approach here, Genie. And of course, this

826
00:42:06,719 --> 00:42:10,440
Speaker 2: is a pretty good mantra for Democrats on the midterm trail.

827
00:42:12,000 --> 00:42:15,920
Speaker 2: What about congressional authority? Is this the opportunity that members

828
00:42:15,960 --> 00:42:17,080
Speaker 2: of Congress have been waiting for?

829
00:42:18,880 --> 00:42:21,920
Speaker 12: You know, I think many, particularly on the Democratic side,

830
00:42:22,040 --> 00:42:26,520
Speaker 12: some Republicans, more traditional Republicans, and you know, Mike Pence's statement,

831
00:42:26,560 --> 00:42:28,880
Speaker 12: I think is a good reminder of where the party

832
00:42:29,000 --> 00:42:31,960
Speaker 12: used to be. But I do think it is important

833
00:42:31,960 --> 00:42:34,920
Speaker 12: to remember what the majority said in this decision, which

834
00:42:34,960 --> 00:42:38,040
Speaker 12: is that separation of powers was put in for a reason.

835
00:42:38,400 --> 00:42:41,960
Speaker 12: There's the reason the Framers gave the People's branch the

836
00:42:42,040 --> 00:42:46,600
Speaker 12: ability to raise taxes. Nothing is more close to all

837
00:42:46,640 --> 00:42:49,440
Speaker 12: of our hearts as we face down April fifteenth than

838
00:42:49,640 --> 00:42:53,440
Speaker 12: taxes and the irs. They wanted to ensure that it

839
00:42:53,520 --> 00:42:56,840
Speaker 12: was the people closest to the people of the United

840
00:42:56,880 --> 00:43:00,200
Speaker 12: States that were making these decisions, not a president. And

841
00:43:00,200 --> 00:43:03,360
Speaker 12: that's why I think even the idea of reconciliation and

842
00:43:03,440 --> 00:43:06,160
Speaker 12: changing this language on the Republican side in normal safe

843
00:43:06,239 --> 00:43:09,920
Speaker 12: circumstances would be very difficult. So I do think we're

844
00:43:09,920 --> 00:43:11,520
Speaker 12: going to hear a lot of this on the trail.

845
00:43:11,760 --> 00:43:14,040
Speaker 12: We have ice out there, this has three times the

846
00:43:14,040 --> 00:43:17,080
Speaker 12: budget it usually has, and we're facing the deficit. The

847
00:43:17,120 --> 00:43:19,080
Speaker 12: Trade Group just talk I mean, the Tax Group just

848
00:43:19,120 --> 00:43:21,399
Speaker 12: talked about all of that is going to come into

849
00:43:21,440 --> 00:43:23,920
Speaker 12: play as people on the middle in the middle of

850
00:43:23,960 --> 00:43:26,600
Speaker 12: class and the lower class feel like they can't afford

851
00:43:26,680 --> 00:43:27,880
Speaker 12: childcare and groceries.

852
00:43:29,280 --> 00:43:31,279
Speaker 2: To think I thought we were going to be talking

853
00:43:31,320 --> 00:43:35,640
Speaker 2: about aliens today, you know, like UFOs president says they'll

854
00:43:35,640 --> 00:43:37,280
Speaker 2: declassify the alien files.

855
00:43:37,360 --> 00:43:41,120
Speaker 3: We got nothing on this. Thanks for listening to the

856
00:43:41,160 --> 00:43:42,640
Speaker 3: Balance of Power podcast.

857
00:43:43,239 --> 00:43:46,360
Speaker 2: Make sure to subscribe if you haven't already, at Apple, Spotify,

858
00:43:46,480 --> 00:43:49,040
Speaker 2: or wherever you get your podcasts, and you can find

859
00:43:49,120 --> 00:43:51,919
Speaker 2: us live every weekday from Washington, DC at New Time

860
00:43:52,000 --> 00:43:54,080
Speaker 2: Eastern at Bloomberg dot com.