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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: noon and five pm Eastern on Apple Coarckley and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: David Gerray and for Joe Matthew and Kaylee Lions here

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Speaker 2: in Balance of Power on Bloomberg Television and Bloomberg Radio.

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Speaker 2: A big meeting coming up at eight thirty pm Wall

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Speaker 2: Street Time. I struggle to do the math to figure

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Speaker 2: out what that'll be. In Tokyo. It is early in

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Speaker 2: the morning there, and that's where we find our colleague,

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Speaker 2: Tyler Kendall, our Washington correspondent, who is traveling with the

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Speaker 2: President on this trip to Asia. The President going to

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Speaker 2: sit down with the new Prime Minister of Japan, and Tyler,

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Speaker 2: the first thing I want to ask you about is

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Speaker 2: what's going to be high up on that agenda. That

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Speaker 2: is five hundred and fifty billion dollars. That is the

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Speaker 2: commitment that Japan made to invest in the United States.

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Speaker 2: Part of that came from this deal that Japan brokered

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Speaker 2: with the US to get a lower and more favorable

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Speaker 2: tariff rate.

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Speaker 3: What do we expect to learn or hear.

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Speaker 2: From Japan about how they expect to spend that money,

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Speaker 2: And if this deal, if this trade deal that was

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Speaker 2: broker between the previous government and the United States, is

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Speaker 2: likely to be reopened and picked apart again.

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Speaker 4: Right, So, David, this investment fund that you're outlining is

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Speaker 4: absolutely critical to Japan receiving that more preferential tar frate

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Speaker 4: of fifteen percent that applies to all Japanese imports coming

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Speaker 4: into the US. But also importantly it extends to sector

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Speaker 4: specific tariffs such as autos, which we know was a

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Speaker 4: big priority for Japan while it was brokering this deal

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Speaker 4: with the US. I have to say, and I mentioned

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Speaker 4: this on the earlier hour of Balance and Power, but

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Speaker 4: all the local Japanese coverage has been on the potential

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Speaker 4: for a US Japan cooperation agreement when it comes to shipbuilding.

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Speaker 4: It appears that that cooperation agreement will include investment as

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Speaker 4: part of this investment pledge fund that we know is

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Speaker 4: really at the center of these deals. Of course, the

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Speaker 4: US Commerce Department has broad discretion on what is actually

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Speaker 4: approved as a deal as part of this, but we

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Speaker 4: know that the administration has long been prioritizing these critical

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Speaker 4: sectors they say need to be bolstered in terms of

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Speaker 4: national security, and shipbuilding is of course at the top

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Speaker 4: of that list. I would also say to pay close

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Speaker 4: attention to any conversations around Japan bolstering its defense spending.

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Speaker 4: We did see the new Prime Minister pledge to expedite

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Speaker 4: the timeline to get to Pan's military spending to GDP.

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Speaker 4: They're aiming for this two percent goal. She's trying to

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Speaker 4: move that up by actually two years, a move that

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Speaker 4: has been broadly applauded by the Trump administration. So perhaps

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Speaker 4: there's been some talk that maybe we'll see some sort

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Speaker 4: of cooperation there when it comes to imports of US

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Speaker 4: military supplies as Japan tries to really ramp up its

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Speaker 4: own speed when it comes to bolstering its military.

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Speaker 5: Tyler.

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Speaker 2: Once we get through this meeting and the presence going

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Speaker 2: to meet with some US troops and with business executives

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Speaker 2: as well as you mentioned, the focus then shifts to

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Speaker 2: South Korea, where Trump is going to sit down with

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Speaker 2: President Shishinping. And this comes on the heels of some

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Speaker 2: meetings that took place in Malaysia between the US Treasury

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Speaker 2: Secretary Scott Bessant, the US Trade Representative Jamison Greer, and

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Speaker 2: their counterparts. They announced at the end of that a

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Speaker 2: framework deal, kind of laying the groundwork again for that

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Speaker 2: leader's summit, that leader's meeting that's going to take place

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Speaker 2: in South Korea. Let's take a listen to what President

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Speaker 2: Trump said about sort of what that meeting is likely

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Speaker 2: to look like and what he hopes will be discussed

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Speaker 2: and covered when it takes place on Thursday.

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Speaker 6: Well, we understood yesterday or two days ago, even today

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Speaker 6: is not going to be necessarily what it's going to

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Speaker 6: be in two days. We're going to have a great talk.

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Speaker 6: I have a lot of respect for presidentcy I like

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Speaker 6: him a lot. He likes to me a lot. I

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Speaker 6: believe and respects me, and I think he respects our

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Speaker 6: country a lot. And we're going to have I think

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Speaker 6: we're going to have a successful transaction for both countries.

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Speaker 2: Tyler, I want to ask you about a few things.

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Speaker 2: So there were some things agreed to. Of course they

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Speaker 2: talked about that, the TikTok deal, they talked about soybeans,

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Speaker 2: But there are kind of broader fundamental issues here. That

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Speaker 2: I'm going to go out on a limb and guests

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Speaker 2: are not likely to be solved in a meeting, that

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Speaker 2: it's one hour in length, two hours in length.

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Speaker 3: What are our expectations?

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Speaker 2: What's the White House saying our expectations should be here

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Speaker 2: of what comes out of this meeting between President Trump

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Speaker 2: and President she on Thursday.

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Speaker 4: Well, of course, David, you're alluding to the broader issues

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Speaker 4: when it comes to the trade war between the US

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Speaker 4: and China, mainly national security concerns, but also the White

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Speaker 4: House's goal of ultimately rebalancing trade in their words, which

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Speaker 4: isn't going to get solved by this agreement that we're

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Speaker 4: likely going to see emerge. Now, the understanding seems to

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Speaker 4: be that we're likely going to get an extension of

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Speaker 4: the trade truce that is currently in place that's set

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Speaker 4: to expire on November tenth, as the Treasury Secretary himself

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Speaker 4: has effectively taken the thread of an additional one hundred

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Speaker 4: percent tariff off the table. As we've seen news of

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Speaker 4: some key concessions according to the US side, including that

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Speaker 4: China is going to delay and review its newly unveiled

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Speaker 4: export controls related to critical and rare earth minerals. You also,

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Speaker 4: of course mentioned soybeans, which we know has been a

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Speaker 4: top of mind for the Trump and men.

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Speaker 3: Now let's just say that that is what the main.

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Speaker 4: Deliverable out of this meeting is that there is an

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Speaker 4: extension in the trade truce. Our analysts at Bloomberg Economics

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Speaker 4: say that that will still leave the effective teriff right

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Speaker 4: on China from the US at forty percent. That is

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Speaker 4: twenty five percentage points higher than the global average, So

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Speaker 4: still a lot of work to be done there. At

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Speaker 4: the end of the day, this really does feel like

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Speaker 4: a simmering intentions both of the sides expressing optimism, calling

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Speaker 4: their talks in Malaysia over the weekend constructive and David,

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Speaker 4: what really feels like a market contrast from the recent

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Speaker 4: escalation in recent weeks. It appears that all of those

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Speaker 4: steps and threats that have been taken are for now

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Speaker 4: at least neutralized so that both sides can get back

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Speaker 4: to the negotiating table on a broader term deal.

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Speaker 3: Tyler, one more question.

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Speaker 2: It would be unfair to anybody else, but you, I

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Speaker 2: know you've been tracking all of this, but we saw

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Speaker 2: headline cross the Bloomberg terminal here a few hours ago

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Speaker 2: about the relationship between the US and Mexico, and Claudia Shinbaum,

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Speaker 2: the President of Mexico, said the US is willing to

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Speaker 2: extend the trade deadline for several weeks as conversations continue

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Speaker 2: between the US and Mexico. Of course, a dramatically different

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Speaker 2: story between the US and Canada. Your perspective on sort

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Speaker 2: of the ongoing debate over what these trade deals will

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Speaker 2: look like, given how Canada's now put itself in a

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Speaker 2: position where it is, let's say, far out of favor

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Speaker 2: from President Trump.

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Speaker 7: Right.

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Speaker 4: Actually, when this headline crossed, David, I went back to

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Speaker 4: the first extension we saw, which was August first, ninety

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Speaker 4: days would bring us to November first, which is why

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Speaker 4: we're seeing this announcement now. And at the time, President

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Speaker 4: Trump had said that Mexico was going to be given

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Speaker 4: preferential treatment because of just how much trade it does

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Speaker 4: with the US. Of course, we haven't seen that extended

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Speaker 4: as such to our northern North American neighbors when it

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Speaker 4: comes to Canada. Now, Mexico is currently facing a twenty

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Speaker 4: five percent tariff when it comes to non USMCA compliant goods.

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Speaker 4: The threat on the table over the summer had been

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Speaker 4: that that rate could ratchet up to thirty percent against Mexico.

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Speaker 4: So we're going to have to see how this unfolds.

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Speaker 4: Important to keep in mind here that the tariffs imposed

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Speaker 4: on Mexico actually aren't imposed under the so called reciprocal

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Speaker 4: tariff regime through IEPA, the International Emergency Economic Powers Act.

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Speaker 4: The tariffs are imposed through AEPA, but they're over fentanyl

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Speaker 4: concerns and concerns with the border, and that's why we're

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Speaker 4: watching really closely what sort of concessions could be made

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Speaker 4: there on Mexico's part in a bid to try to

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Speaker 4: make progress to meet President Trump's demands. Now you mentioned Canada,

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Speaker 4: of course we're watching that closely. President Trump declining to

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Speaker 4: tell reporters on Air Force one whether or not this

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Speaker 4: additional ten percent tariff will extend to USMCAA compliant goods.

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Speaker 4: Of course, there's a thirty five percent to tariff on

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Speaker 4: non USMCAA compliant goods currently in place, but David, that

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Speaker 4: does not extend to some of those sector specific tariffs.

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Speaker 4: There is a whopping fifty percent tariff on Canadian steel

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Speaker 4: and aluminum, which we know is a big point of

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Speaker 4: contention between the two economies.

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Speaker 2: Tyler, thank you very much. Tyler Kendall on what is

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Speaker 2: a grueling trip here for the president? Grueling in terms

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Speaker 2: of geography and time and amount of meetings and certainly

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Speaker 2: expectations as well. And somebody who knows what that's like,

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Speaker 2: well is one Micmlvenue, who is former acting Chief of

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Speaker 2: Staff to President Trump, director of the Office of Management

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Speaker 2: and Budget, former congressman as well. Let me ask you,

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Speaker 2: first off, you miss being on a trip like this

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Speaker 2: and what it's like for the President and his staff.

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Speaker 3: There's so much on the agenda.

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Speaker 2: He heard him float maybe he wants to take a

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Speaker 2: little side trip and meet with Kim Jong un as well?

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Speaker 2: He approached these trips and what does he hope to

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Speaker 2: get in terms of deliverpooths out.

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Speaker 8: I've done one of those side trips to meet Kim

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Speaker 8: Jong un. On the way back, I honestly don't know

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Speaker 8: how he does it. I just got back in Tokyo

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Speaker 8: last night and I can barely stand up.

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Speaker 5: I was thinking more about his meetings last week when he.

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Speaker 8: Was an interwaw with two weeks ago, and I lose

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Speaker 8: track of the time he was in Israel, and then

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Speaker 8: the Egypt and then for thirty six hours, and then

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Speaker 8: came back and did two solid days of stuff at

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Speaker 8: the White House and didn't seem to slow down at all.

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Speaker 8: It's brutal. It's probably as tough on the staff as

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Speaker 8: anybody else. I mean, Trump does asleep anyway. He only

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Speaker 8: sleeps about four hours a night, so I think he's

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Speaker 8: probably immune to jet lag. But it's really tough on

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Speaker 8: the team, there's no question about it. And at the

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Speaker 8: end of the day, he is seventy nine years old.

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Speaker 8: But I've seen no signs yet of closing, of slowing down.

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Speaker 8: Every now and then I see him seem like he's

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Speaker 8: probably a little bit, a little bit weary, but not

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Speaker 8: too frequently.

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Speaker 2: You know, from the beginning of this term, in the

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Speaker 2: context of this a conversation between President Trump and President She,

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Speaker 2: there there's been a lot of talk of President She

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Speaker 2: isn't going to do this unless we're at the point

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Speaker 2: at which these two leaders can can make a deal. Yeah,

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Speaker 2: how do you think about the meeting that's going to

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Speaker 2: take place on Thursday, what's likely to come out.

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Speaker 8: It's always been a challenge because Donald Trump and I

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Speaker 8: think President She work in entirely different manners. Trump wants

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Speaker 8: the principal one on one, you know, big guy to

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Speaker 8: big guy conversation first, and my understanding is that the

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Speaker 8: Chinese do it the exact opposite. They don't want she

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Speaker 8: to have those conversations until all the other preceding lower

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Speaker 8: level conversations have taken place. So the fact they're getting together,

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Speaker 8: I think is helpful. I don't count David on anything

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Speaker 8: major coming out of this. In fact, I don't think

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Speaker 8: counting anything major coming from the next several years.

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Speaker 5: I think both countries have sort of found this.

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Speaker 8: You know, we used to describe it when it was

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Speaker 8: military versus Soviet Union back in the nineteen sixties and seventies.

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Speaker 5: Since the Cold War, this is sort of a cold piece.

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Speaker 8: I don't think you're going to see everything sort of

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Speaker 8: get back to to warm and fuzzy. I don't think

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Speaker 8: you're going to see a full blown trade war. I

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Speaker 8: think you see sort of chopping negotiations on and off

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Speaker 8: bits and pieces here and there for the next several years.

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Speaker 8: I do expect some sort of announcement coming out of this.

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Speaker 8: I think both gentlemen would not want to have a

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Speaker 8: face to face meeting and not have something to announce.

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Speaker 8: But anybody who's sitting and looking go, I think this

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Speaker 8: is going to be wrapped up here this week and

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Speaker 8: things would be great. We go back to the way

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Speaker 8: business was before Trump was in office. Don't understand the man.

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Speaker 2: You've lived through a few of these shutdowns. Yeah, let's

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Speaker 2: go back to when you were to m B. Would

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Speaker 2: it have been a help or a hindrance not to

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Speaker 2: have the president in Washington while it's it's unfolding.

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Speaker 3: It will make it a difference.

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Speaker 8: Our problem was the Republican leadership at the House in

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Speaker 8: the Senate, and that's one of the biggest differences you

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Speaker 8: have now.

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Speaker 5: Back in twenty nineteen, Paul.

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Speaker 8: Ryan and Mitch McConnell were on the phone every single

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Speaker 8: day telling us how we were killing the country and

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Speaker 8: we had to open the government up. And you just

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Speaker 8: don't hear that today from Michael Johnson and John Thune.

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Speaker 8: That Republican Party is a lot more united behind Donald Trump,

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Speaker 8: and he's got a lot more support of his own parties.

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Speaker 8: So I think it's a dramatic difference and sort of

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Speaker 8: the balance of power. Wait a second, I've heard that before.

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Speaker 8: Thank you for that in Washington right now, again. I've

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Speaker 8: been traveling for about a week, so it's been a

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Speaker 8: while since I've sort of plugged in.

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Speaker 3: But right before I left, I.

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Speaker 8: Met with a bunch of my Democrat friends and they

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Speaker 8: were all like, look, we don't see the end of it.

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Speaker 8: You guys are killing kid in yourself if you think

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Speaker 8: this No King's Rally has anything to do with anything.

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Speaker 8: There's a lot of Republicans saying that the maybe after

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Speaker 8: the No King's Rally that Democrats would be more willing to.

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Speaker 5: Talk to Trump and so forth, but they don't see it.

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Speaker 8: Honestly, I think if I had to bet, and I've

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Speaker 8: been wrong now, as has everybody from the very beginning

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Speaker 8: on this, I think the Senate Republicans are going to

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Speaker 8: start looking more and more at changing the filibuster rules,

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Speaker 8: because that might be the only way to fund the

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Speaker 8: government at this point.

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Speaker 2: Ask another question just about the uniqueness of this shutdown.

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Speaker 2: I was on the Hill last week and sat down

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Speaker 2: with the Minority leader who came Jeffreyes, and I was

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Speaker 2: just struck by the quiet of the Capitol right now.

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Speaker 2: I mean, he's not meeting with Mike Johnson. It seems

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Speaker 2: like there are very few conversations taking place. There many

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Speaker 2: people there to have these conversations. What do you make

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Speaker 2: of that?

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Speaker 3: What does that say about the state of our politics?

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Speaker 3: It should really.

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Speaker 5: Frighten the con us.

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Speaker 8: This is one of the things David I really don't

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Speaker 8: understand fundamentally.

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Speaker 5: I thought Chuck Schumer was right.

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Speaker 8: I don't see that very often, but back in March,

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Speaker 8: I think what he was taking the position was, look,

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Speaker 8: if the Democrats don't support the funding bill, then the

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Speaker 8: government was shut down and Donald Trump's power will go

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Speaker 8: up exponentially.

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Speaker 5: And He's right.

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Speaker 8: The power that the Director of the Office of Management

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Speaker 8: Budget have during an ordinary appropriations process is pretty considerable,

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Speaker 8: but it goes up exponentially during a shutdown.

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Speaker 5: I mean, look, this is this one office.

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Speaker 8: So it's essentially the president, through the Director of OMB,

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Speaker 8: gets to say, Okay, you get to go to work today.

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Speaker 5: You don't, you don't, you don't you do.

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Speaker 8: Of course, nobody gets paid until later, and everybody will

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Speaker 8: get paid later. But think about that in terms of

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Speaker 8: the executive authority, what's open and what's closed. They've given

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Speaker 8: so much more power to the executive branch. I cannot

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Speaker 8: understand for the life of me how they allowed themselves

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Speaker 8: to get here, and I don't know how they get.

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Speaker 5: Out of it.

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Speaker 3: But nobody called you Darth Vader as we talked about

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Speaker 3: kind of them. I know, I feel bad.

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Speaker 2: What do you make of what ross Bo has done,

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Speaker 2: is being able to do with that office? Could you

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Speaker 2: have imagined that it could have as much power? Oh, yes,

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Speaker 2: in this circumstance, in this term as it has.

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Speaker 3: No we knew it did. We knew that it did.

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Speaker 8: In fact, we tried back in twenty nineteen during the

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Speaker 8: thirty five day shout out to do a lot of the.

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Speaker 5: Things that OMB is doing now.

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Speaker 8: But again, when you didn't have the support of your

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Speaker 8: own Republican leadership on the hill, it was very, very

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Speaker 8: difficult to do. When you're going out at night after

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Speaker 8: night and on Fox News and the other right wing

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Speaker 8: sort of media outlets, Republicans are beating up on the

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Speaker 8: Republican president. Was really hard to sort of to do

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Speaker 8: any of these things. So, no, we knew exactly what

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Speaker 8: the authority was, exactly what the power. I shouldn't say

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Speaker 8: that no one knows exactly what the authority is. You

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Speaker 8: don't know where the bounds are, but you do know

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Speaker 8: that the O and b and the executive branch has

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Speaker 8: a lot more authority during a shutdown than it does during.

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Speaker 5: The appropriations process.

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Speaker 8: So yeah, we knew that this was there, and restaurant

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Speaker 8: I used to joke about would it be nice to

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Speaker 8: have this job when you know you could actually use it?

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Speaker 5: And now he's getting a chance to it to use it.

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Speaker 2: When you look at the pressure points that are coming up,

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Speaker 2: so the SNAP benefits expiring in a couple of days,

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Speaker 2: open enrollment starting up, holidays on the horizons as well,

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Speaker 2: where do you see potential off ramps or points where

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Speaker 2: this could be resolved.

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Speaker 8: I see the airports as the pressure you think, so, yeah,

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Speaker 8: I do. I just don't think SNAP registers with enough people.

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Speaker 8: The media loves it and so forth, and if you

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Speaker 8: get it, it's critically important to you, But the ordinary

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Speaker 8: middle class family that goes home every single night doesn't

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Speaker 8: engage in politics. It doesn't touch them until they need

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Speaker 8: to go see Grandma at Thanksgiving. You know, you're talking

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Speaker 8: about tens of millions of people a day who travel,

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Speaker 8: and I think that was a pressure point in twenty nineteen.

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Speaker 5: I think it will be a pressure point now.

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Speaker 8: I think Sean Duffy's done an excellent job of making

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Speaker 8: it clear that you know, any fabricated sort of sickouts

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Speaker 8: won't be tolerated. But sooner or later, people aren't going

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Speaker 8: to work for no pay. We all know they're going

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Speaker 8: to get paid eventually anyway. But look, missing a paycheck

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Speaker 8: in this in this world is tough for a lot

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Speaker 8: of people. So I think that's the next pressure point.

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Speaker 8: The last time they get paid out of sequence, they

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Speaker 8: get paid actually tomorrow, they got paid two weeks ago,

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Speaker 8: and in that paycheck they got paid for the last

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Speaker 8: week in September, so they actually did get paid some

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Speaker 8: in October for September. The next check will be the

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Speaker 8: first zero dollar check for the air traffic controlers, and

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Speaker 8: I think that will be the next pain point.

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Speaker 3: Well, any great to see you, it's always going to

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Speaker 3: see you.

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Speaker 2: Welcome, Thank you a man who's worn many hats of course,

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Speaker 2: Omb Capitol Hill as chief of Staff at the White

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Speaker 2: House as well, joining us here on set in Washington, DC,

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Speaker 2: as we look ahead to where there might be potential

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Speaker 2: off rams. We'll continue that conversation with our politics panel

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Speaker 2: here in just a moment on Bloomberg Television in Bloomberg Radio,

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Speaker 2: and looked to Argentina as well at the surprising results

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Speaker 2: of the congressional race that took place there. What that

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Speaker 2: means for Haavir Malay and you ask for the Treasury

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Speaker 2: Secretary for Scott Besson as well, who authorized some extraordinary

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Speaker 2: actions in Argentina.

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Speaker 3: That's coming up.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

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Speaker 1: us live weekdays at noon and five pm Eastern on

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Speaker 1: Apple Cockley and Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 3: It's going to be the planes.

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Speaker 2: That was what Mick mulvaney said about how this shutdown

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Speaker 2: ends as he sees it. Very curious to hear what

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Speaker 2: our panelists think about that as well. Genie Sheenzano is

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Speaker 2: back with his Democracy visiting fellow at Harvard Kennedy School's

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Speaker 2: Ash Center and Bloomber Politics contributor Margi Llespie with us

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Speaker 2: here as well. Bluestack Strategies founder and Republican Strategy Jeanie,

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Speaker 2: You've been watching all of this unfold and I'm very

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Speaker 2: curious if you would agree with the former director of

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Speaker 2: the O and B the former White House Chief of

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Speaker 2: Staff if you think that's how this ends, or do

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Speaker 2: you think that these other pressure points, chiefly the snap

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Speaker 2: benefits expiring, the opening of open enrollment, those are going

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Speaker 2: to have a tangible effect here on lawmaker's willingness and

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Speaker 2: ability to get together to try to hammer something out.

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Speaker 5: Yeah.

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Speaker 9: Unfortunately, I don't see those as having the impact. You know,

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Speaker 9: when you get the announcement, you're not going to be

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Speaker 9: paying until next year, and so while people may be frustrated,

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Speaker 9: they're not going to feel the pain immediately. And for

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Speaker 9: snap benefits, unfortunately, even though we're talking about millions of

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Speaker 9: people potentially losing the ability to get food and access

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Speaker 9: food in this country, which is stunning, it's not going

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Speaker 9: to impact the representatives and senators. So I think it

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Speaker 9: is going to be travel. I think it's going to

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Speaker 9: be Thanksgiving, and that's going to depend on the fact

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Speaker 9: that these people have lost a check and it's you know,

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Speaker 9: we see flights starting to slow down and travel really impacted,

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Speaker 9: which will frustrate people more.

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Speaker 2: I want to get your thoughts, and I look at

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Speaker 2: the stats here from the Bipartisan Policy Center, seven hundred

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Speaker 2: and thirty thousand federal employees working without pay right now,

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Speaker 2: another six hundred seventy thousand federal workers are being furloughed

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Speaker 2: without pay. And I look at this statement again from

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Speaker 2: the head of the American Federation of Government Employees AFGE,

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Speaker 2: President Everett Kelly, writing, both political parties have made their point,

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Speaker 2: and still there's no clear end in sight.

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Speaker 3: Today, I'm making mind.

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Speaker 2: It's time to pass a clean continuing resolution and end

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Speaker 2: this shutdown today, no half measures and no gamesmanship. Put

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Speaker 2: every single federal worker back on the job with full

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Speaker 2: back pay today.

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Speaker 3: Curious how you react to that.

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Speaker 2: More Again, it doesn't seem like that conversation is even

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Speaker 2: taking place on Capital It doesn't seem like many conversations

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Speaker 2: are taking place on Capitol Hill here on day twenty seven.

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Speaker 10: And that's it feels so different about this shutdown, right,

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Speaker 10: is that the House has not been in since September nineteenth.

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Speaker 10: Members aren't having these conversations. And it's something that we

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Speaker 10: saw in the past, where congressional leaders were there day

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Speaker 10: in day out, at least having conversations. I maybe not

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Speaker 10: I have always led to a fruitful discussion by each day,

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Speaker 10: but at least they were open. The door was open

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Speaker 10: to figuring out a solution. I do think that the

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Speaker 10: American people's patience has run out, especially with as many

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Speaker 10: workers as you would just point out who want to work,

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Speaker 10: and when I think from a Republican messaging the standpoint,

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Speaker 10: these are people who want to go back to work,

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Speaker 10: who we're going to be paying regardless of the fact

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Speaker 10: that they're in work right now. So we're really wasting

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Speaker 10: money essentially for people who want to be in their

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Speaker 10: jobs doing their doing their work, but they can't because

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Speaker 10: the government is still shut down. And I would have

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Speaker 10: to agree that the point was made. I do think

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Speaker 10: that Senator thun and you're now even hearing some reports

440
00:19:04,600 --> 00:19:06,879
Speaker 10: that Johnson is open to figuring out what a solution

441
00:19:06,920 --> 00:19:09,600
Speaker 10: would look like. But I do think that it can't

442
00:19:09,600 --> 00:19:11,359
Speaker 10: be done right now when the government is still shut

443
00:19:11,359 --> 00:19:14,520
Speaker 10: down and it's just dried on a little bit too long.

444
00:19:14,560 --> 00:19:16,119
Speaker 10: And I don't know the Democrats, they never really had

445
00:19:16,119 --> 00:19:17,760
Speaker 10: a plan on how to get out of it, which

446
00:19:17,800 --> 00:19:22,119
Speaker 10: is really problematic because now they have to essentially just

447
00:19:22,840 --> 00:19:25,359
Speaker 10: say that the last twenty seven days was just to

448
00:19:25,400 --> 00:19:27,560
Speaker 10: prove a point. That's not a great investing tactic going

449
00:19:27,600 --> 00:19:28,679
Speaker 10: into the midterms.

450
00:19:29,920 --> 00:19:32,159
Speaker 2: Mar I'm curious for what you made of what McK

451
00:19:32,240 --> 00:19:34,359
Speaker 2: mulvany had to say about the role that President Trump

452
00:19:34,400 --> 00:19:36,360
Speaker 2: is or isn't playing in the conversations that are taking

453
00:19:36,359 --> 00:19:38,600
Speaker 2: place so much as they are here in Washington today,

454
00:19:38,640 --> 00:19:41,159
Speaker 2: and he's of course on this trip to h I

455
00:19:41,160 --> 00:19:43,160
Speaker 2: think there's a lot of resignation among people on Capitol

456
00:19:43,240 --> 00:19:45,680
Speaker 2: Hill that with him not here, it's unlikely that we're

457
00:19:45,680 --> 00:19:47,760
Speaker 2: going to see a deal. And I found this in

458
00:19:47,880 --> 00:19:49,760
Speaker 2: Henrietta Trez, the Vada Partner's latest note.

459
00:19:49,760 --> 00:19:50,639
Speaker 3: I'm going to read it aloud.

460
00:19:50,640 --> 00:19:50,840
Speaker 10: Here.

461
00:19:51,080 --> 00:19:53,760
Speaker 2: Trump is indicated he will not sign any legislation via

462
00:19:53,800 --> 00:19:55,719
Speaker 2: auto pen. This is something, of course, he cares an

463
00:19:55,720 --> 00:19:58,240
Speaker 2: awful lot about, which means even if lawmakers reach a

464
00:19:58,280 --> 00:20:00,119
Speaker 2: deal to reopen the President will have to eat or

465
00:20:00,359 --> 00:20:03,000
Speaker 2: have the text physically flown to him for his signature,

466
00:20:03,280 --> 00:20:07,159
Speaker 2: or will need to wait until he returns returns to Washington.

467
00:20:07,280 --> 00:20:09,760
Speaker 2: How do you see the role of President Trump here? Again,

468
00:20:09,840 --> 00:20:12,280
Speaker 2: going back to my conversation last week with Hakim Jefferys,

469
00:20:12,320 --> 00:20:15,480
Speaker 2: the Minority Leader, he really making the point that Republicans

470
00:20:15,480 --> 00:20:18,120
Speaker 2: in Congress can't do a whole lot without the blessing

471
00:20:18,160 --> 00:20:20,119
Speaker 2: of the President of the United States, and his absence

472
00:20:20,200 --> 00:20:22,800
Speaker 2: kind of prolongs this inherently. Do you agree with that

473
00:20:22,920 --> 00:20:25,760
Speaker 2: or do you agree with mcmulvaney who says his absence

474
00:20:25,960 --> 00:20:28,600
Speaker 2: him being overseas really doesn't affect the conversations that are

475
00:20:28,640 --> 00:20:29,840
Speaker 2: aren't taking place right now.

476
00:20:31,160 --> 00:20:33,760
Speaker 10: I think logistically speaking, you're right in terms of it

477
00:20:33,800 --> 00:20:36,359
Speaker 10: could create a problem if Senator Thuon was able to

478
00:20:36,400 --> 00:20:39,600
Speaker 10: get Democrats in the Senate to pass something that he

479
00:20:39,840 --> 00:20:42,639
Speaker 10: passed the bill he's been trying to and then that

480
00:20:42,680 --> 00:20:45,720
Speaker 10: creates a logistical kind of situation about President Trump signing

481
00:20:45,720 --> 00:20:48,640
Speaker 10: that into law. But I would say it's he can

482
00:20:48,680 --> 00:20:51,360
Speaker 10: do a lot as far as pressuring or calling members

483
00:20:51,440 --> 00:20:54,600
Speaker 10: of Congress and saying, you know, maybe how she get

484
00:20:54,640 --> 00:20:56,879
Speaker 10: back to work and how do we do that. He

485
00:20:56,920 --> 00:20:59,639
Speaker 10: can make a phone call or you know, a conversation

486
00:20:59,800 --> 00:21:04,680
Speaker 10: with Schumer and Jeffries and Thune and Johnson and Spearhead.

487
00:21:04,680 --> 00:21:06,560
Speaker 3: That conversation put a little more pressure on them.

488
00:21:07,200 --> 00:21:09,159
Speaker 10: But I think right now, again, a lot of this

489
00:21:09,200 --> 00:21:12,080
Speaker 10: does come down to Senat Johnson is working the well

490
00:21:12,119 --> 00:21:14,280
Speaker 10: of Senate trying to get his colleagues to understand that

491
00:21:14,280 --> 00:21:16,600
Speaker 10: he is open to having a vote on the subsidies

492
00:21:17,440 --> 00:21:19,560
Speaker 10: and recognizing that this is an issue that needs to

493
00:21:19,560 --> 00:21:23,040
Speaker 10: be addressed because it impacts millions of Americans and not

494
00:21:23,119 --> 00:21:27,040
Speaker 10: just Republicans, not just Democrats. But I think that Speaker

495
00:21:27,480 --> 00:21:30,040
Speaker 10: the President is really focused on his own agenda, especially

496
00:21:30,080 --> 00:21:34,239
Speaker 10: in the foreign policy realm right now, and unfortunately this

497
00:21:34,280 --> 00:21:36,480
Speaker 10: is not the top of his priority list, although you

498
00:21:36,520 --> 00:21:37,560
Speaker 10: know it probably should be.

499
00:21:39,320 --> 00:21:42,080
Speaker 2: Let's spend the remaining time we have here talking about

500
00:21:42,440 --> 00:21:44,879
Speaker 2: the midterms and the way that the political terrain is

501
00:21:44,960 --> 00:21:47,480
Speaker 2: changing ahead of them. And we've seen Preston Trump really

502
00:21:47,480 --> 00:21:50,399
Speaker 2: pushing for redistricting in a lot of states across this country.

503
00:21:50,400 --> 00:21:52,440
Speaker 2: Happened in North Carolina, There's pressure for that to happen

504
00:21:52,440 --> 00:21:55,200
Speaker 2: in Indiana and other states as well. Gidie, let me

505
00:21:55,240 --> 00:21:57,159
Speaker 2: turn to you and ask you about what's happening in Virginia,

506
00:21:57,200 --> 00:22:00,880
Speaker 2: where you have state lawmakers looking to redraw those lines themselves.

507
00:22:01,640 --> 00:22:05,160
Speaker 2: Democrats kind of respond in kind here to counter those

508
00:22:05,160 --> 00:22:08,200
Speaker 2: moves by Republicans. What do you make of what's happening

509
00:22:08,200 --> 00:22:10,560
Speaker 2: in Virginia. It's novel the session still open, so they're

510
00:22:10,560 --> 00:22:12,280
Speaker 2: able to do this or at least push for it.

511
00:22:12,800 --> 00:22:14,159
Speaker 2: But what do you make a kind of the broader

512
00:22:14,160 --> 00:22:16,560
Speaker 2: fight that we're seeing play out here? When it comes

513
00:22:16,600 --> 00:22:18,960
Speaker 2: to where the lines are drawn literally, when it comes

514
00:22:18,960 --> 00:22:20,719
Speaker 2: to the political terrain in this country.

515
00:22:22,240 --> 00:22:25,400
Speaker 9: Yeah. I think Avin Newsom described it months ago when

516
00:22:25,440 --> 00:22:28,760
Speaker 9: this started in Texas and then California picked it up

517
00:22:29,119 --> 00:22:31,760
Speaker 9: as a break the glass moment, and I think that's

518
00:22:31,800 --> 00:22:35,560
Speaker 9: what you're seeing here. There's some reluctance on the Democratic

519
00:22:35,720 --> 00:22:41,120
Speaker 9: side to engage in these mid decade redistricting proposals, But

520
00:22:41,160 --> 00:22:43,719
Speaker 9: the reality is they feel if they don't meet the

521
00:22:43,760 --> 00:22:46,760
Speaker 9: GOP on this that they are going to lose. You know,

522
00:22:46,840 --> 00:22:49,560
Speaker 9: I think one important aspect of this is to take

523
00:22:49,600 --> 00:22:53,000
Speaker 9: a step back. You know, you can draw all the

524
00:22:53,119 --> 00:22:57,560
Speaker 9: districts you want, it still doesn't ensure you are going

525
00:22:57,640 --> 00:23:01,399
Speaker 9: to win. You still need campaign you still need candidates,

526
00:23:01,480 --> 00:23:05,320
Speaker 9: You still need issues on the local state level that matter.

527
00:23:05,440 --> 00:23:08,120
Speaker 9: So I think there's sort of this idea floating since

528
00:23:08,160 --> 00:23:11,720
Speaker 9: we've been talking about from Texas on that redistricting is

529
00:23:11,720 --> 00:23:12,879
Speaker 9: some kind of panacea.

530
00:23:13,000 --> 00:23:13,600
Speaker 5: It is not.

531
00:23:14,200 --> 00:23:18,840
Speaker 9: There's no guarantee that somebody wins when you read district

532
00:23:18,960 --> 00:23:22,400
Speaker 9: So on both sides they are taking a chance here,

533
00:23:22,800 --> 00:23:25,920
Speaker 9: and I think the big losers here are the American public.

534
00:23:26,040 --> 00:23:30,640
Speaker 9: We already have a terribly gerrymanderd House. That's why it's

535
00:23:30,640 --> 00:23:34,080
Speaker 9: so close, and this is only going to make it worse.

536
00:23:34,160 --> 00:23:36,280
Speaker 9: I mean, I think when we look at the number

537
00:23:36,280 --> 00:23:38,960
Speaker 9: of competitive seats that will be left in twenty six,

538
00:23:39,080 --> 00:23:42,040
Speaker 9: it is abysmal. And that is a loser for the

539
00:23:42,040 --> 00:23:46,080
Speaker 9: American voter because we are robbed of choice when we

540
00:23:46,160 --> 00:23:49,280
Speaker 9: go to the ballot box in most instances. And so

541
00:23:49,440 --> 00:23:53,240
Speaker 9: to me, I understand the impulse of Democrats to fight back,

542
00:23:53,280 --> 00:23:56,240
Speaker 9: and I understand why they feel they need to, but

543
00:23:56,400 --> 00:24:00,439
Speaker 9: from both sides, this is another losing thing that voters

544
00:24:00,480 --> 00:24:03,720
Speaker 9: are going to feel in Americans and anybody who loves democracy.

545
00:24:04,880 --> 00:24:07,360
Speaker 2: Mar how about you on the kind of slippery slopedness

546
00:24:07,560 --> 00:24:09,600
Speaker 2: of all of this, the way that it's happening, the

547
00:24:09,640 --> 00:24:11,760
Speaker 2: kind of tit for tat nature of this, and just

548
00:24:11,800 --> 00:24:13,919
Speaker 2: sort of what it says. To pick up on what

549
00:24:13,960 --> 00:24:16,400
Speaker 2: Genie was saying about the state of our politics today,

550
00:24:16,440 --> 00:24:18,159
Speaker 2: I think in North Carolina there was one district that

551
00:24:18,200 --> 00:24:20,240
Speaker 2: was carved in such a way that the incumbents no

552
00:24:20,280 --> 00:24:22,199
Speaker 2: longer in the district he was in before. It just

553
00:24:22,200 --> 00:24:25,639
Speaker 2: presents a host of problems about representation. How do you

554
00:24:25,680 --> 00:24:27,560
Speaker 2: see all of this playing out and how do you

555
00:24:27,560 --> 00:24:28,760
Speaker 2: see it running its course?

556
00:24:30,200 --> 00:24:32,480
Speaker 10: And we see that, you know, in Illinois when my

557
00:24:32,560 --> 00:24:36,840
Speaker 10: four walls, Adam Kensinger was really redistricted.

558
00:24:36,320 --> 00:24:37,280
Speaker 3: Out of his own district.

559
00:24:37,359 --> 00:24:39,760
Speaker 10: Despite many Democrats thinking that he was a good Republican

560
00:24:39,840 --> 00:24:42,399
Speaker 10: at the time, they still drew him out of his

561
00:24:42,400 --> 00:24:46,920
Speaker 10: own district. And so we see that happen pretty frequently here.

562
00:24:46,920 --> 00:24:48,960
Speaker 10: But I think what Genie's pointing out speaks to.

563
00:24:48,920 --> 00:24:49,800
Speaker 3: A bigger problem.

564
00:24:50,280 --> 00:24:53,119
Speaker 10: Not only does this create lack of choice, but we

565
00:24:53,160 --> 00:24:55,440
Speaker 10: have a lack of choice because of the candidates themselves.

566
00:24:56,359 --> 00:24:59,800
Speaker 10: Right now, our state of politics is really devolved in

567
00:24:59,800 --> 00:25:03,520
Speaker 10: a that people don't feel inclined to run for higher office,

568
00:25:03,520 --> 00:25:06,159
Speaker 10: even if they had wanted to, the current state of

569
00:25:06,200 --> 00:25:09,800
Speaker 10: politics and how we talk to one another, how we campaign,

570
00:25:10,080 --> 00:25:13,960
Speaker 10: how we attack and demonize those who have different views

571
00:25:13,960 --> 00:25:17,679
Speaker 10: in us, it's putting people at risk. We've seen that

572
00:25:17,720 --> 00:25:20,360
Speaker 10: play out unfortunately. And so when you're talking to someone

573
00:25:20,359 --> 00:25:22,440
Speaker 10: who maybe had wanted to run for a higher office

574
00:25:22,560 --> 00:25:24,760
Speaker 10: or felt called to do so, they then are thinking

575
00:25:24,760 --> 00:25:27,359
Speaker 10: about what impact will us have on my family, my

576
00:25:27,440 --> 00:25:30,000
Speaker 10: safety and security, And so then we end up having

577
00:25:30,040 --> 00:25:32,840
Speaker 10: people who are either looking for fame, who had been

578
00:25:32,840 --> 00:25:35,119
Speaker 10: in prior and had been in for a longer time.

579
00:25:35,320 --> 00:25:37,720
Speaker 10: It just creates a I think, in my opinion, a

580
00:25:37,800 --> 00:25:41,879
Speaker 10: lesser pool to choose from people willing to do this job.

581
00:25:42,040 --> 00:25:43,560
Speaker 3: And that's a really.

582
00:25:43,480 --> 00:25:47,959
Speaker 10: Unfortunate effect of the state of our politics today. But

583
00:25:48,000 --> 00:25:50,840
Speaker 10: this certainly does not help in terms of choice and

584
00:25:50,920 --> 00:25:54,840
Speaker 10: options for American voters who are largely most in the middle. Right,

585
00:25:54,880 --> 00:25:56,960
Speaker 10: we're not on the fringes that the large wealth of

586
00:25:56,960 --> 00:25:59,840
Speaker 10: the American public and voters are somewhere in the middle,

587
00:26:00,440 --> 00:26:03,879
Speaker 10: and we're robbing them of choice here in a lot

588
00:26:03,920 --> 00:26:04,240
Speaker 10: of ways.

589
00:26:05,320 --> 00:26:07,480
Speaker 2: Jenie, I'll give you the last word on this on yes,

590
00:26:07,520 --> 00:26:09,840
Speaker 2: the state of our politics, but also just how resonant

591
00:26:09,840 --> 00:26:11,600
Speaker 2: this is going to be as we approach the midterms

592
00:26:11,800 --> 00:26:13,440
Speaker 2: and the twenty twenty eight election. How much this is

593
00:26:13,480 --> 00:26:14,639
Speaker 2: going to be something that you think is going to

594
00:26:14,680 --> 00:26:17,000
Speaker 2: have resonance among I guess both political parties.

595
00:26:18,480 --> 00:26:21,439
Speaker 9: It's going to have a huge impact. And I'm just thinking, David.

596
00:26:21,520 --> 00:26:23,880
Speaker 9: Over the weekend, I think it was yesterday, the President

597
00:26:23,920 --> 00:26:27,960
Speaker 9: posted on truth Social tying the NBA cheating scandal to

598
00:26:28,320 --> 00:26:32,320
Speaker 9: the stealing of the twenty twenty election and warning about

599
00:26:32,359 --> 00:26:35,320
Speaker 9: what could happen in the upcoming midterms and calling for

600
00:26:35,400 --> 00:26:38,680
Speaker 9: things like no early voting, no mail in voting, calling

601
00:26:38,720 --> 00:26:43,200
Speaker 9: the prop in California dishonest, and a lot of concern

602
00:26:43,280 --> 00:26:47,399
Speaker 9: with the DOJ being talked about overseeing some of these elections.

603
00:26:47,440 --> 00:26:49,560
Speaker 9: So I think this is going to be a mid

604
00:26:49,680 --> 00:26:53,679
Speaker 9: term for the ages. Not particularly competitive, but lots of

605
00:26:53,800 --> 00:26:56,320
Speaker 9: questions about how secure it is and how much people

606
00:26:56,320 --> 00:26:59,840
Speaker 9: can trust the vote, and that's so problematic in a democracy.

607
00:27:00,000 --> 00:27:03,359
Speaker 9: I wish the president would lift up and not push down.

608
00:27:04,920 --> 00:27:06,639
Speaker 2: Jeanie, great to speak with you, more great to speak

609
00:27:06,640 --> 00:27:09,080
Speaker 2: with you as well. That's Genie sheen Zeano Democracy Visiting

610
00:27:09,119 --> 00:27:12,000
Speaker 2: Fellow at the Harvard Kennedy School's Ash Center, and Bloomberg

611
00:27:12,000 --> 00:27:16,080
Speaker 2: Politics contributor. Morgillespie is Bluestack Strategies founder and Republican Strategusts.

612
00:27:16,080 --> 00:27:18,720
Speaker 2: Both joined us here on Bloomberg Balance of Power on

613
00:27:18,760 --> 00:27:21,920
Speaker 2: this Monday for a fascinating conversation there about redistricting and

614
00:27:21,960 --> 00:27:24,560
Speaker 2: about this shutdown as well. Coming up here, we're going

615
00:27:24,600 --> 00:27:26,800
Speaker 2: to turn our attention to Argentina, which has been something

616
00:27:26,800 --> 00:27:29,199
Speaker 2: that Washington has been focusing more and more on. An

617
00:27:29,200 --> 00:27:32,040
Speaker 2: election there for congressional seats took place over the course

618
00:27:32,080 --> 00:27:34,560
Speaker 2: of the weekend and Javier Malay's party did well, and

619
00:27:34,680 --> 00:27:37,919
Speaker 2: many people expected what that means for the people of Argentina,

620
00:27:38,760 --> 00:27:41,400
Speaker 2: but also for the US as well, after the US

621
00:27:41,440 --> 00:27:44,760
Speaker 2: made a sizable investment, shall we say, in that country's

622
00:27:44,760 --> 00:27:46,520
Speaker 2: election that's coming up on Bounds of Power.

623
00:27:49,600 --> 00:27:53,080
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

624
00:27:53,160 --> 00:27:56,199
Speaker 1: us live weekdays at noon and five pm Eastern on

625
00:27:56,320 --> 00:27:59,560
Speaker 1: Apple Cockway and Android Auto with the Bloomberg Business app.

626
00:27:59,600 --> 00:28:02,640
Speaker 1: You can so listen live on Amazon Alexa from our

627
00:28:02,680 --> 00:28:06,800
Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven

628
00:28:06,880 --> 00:28:08,920
Speaker 1: thirty here.

629
00:28:08,760 --> 00:28:11,240
Speaker 2: In Washington for Joe Matthew and Kayley Lyons on Balance

630
00:28:11,280 --> 00:28:14,160
Speaker 2: of Power on Bloomberg Television and Bloomberg Radio. I turned

631
00:28:14,200 --> 00:28:16,800
Speaker 2: on the Bloomberg terminal this morning. Saw the Argentine peso

632
00:28:16,920 --> 00:28:20,680
Speaker 2: jump ten percent this morning. Bond prices they're also hitting

633
00:28:20,720 --> 00:28:24,119
Speaker 2: record highs and the reason is Hafier Malay's political party

634
00:28:24,359 --> 00:28:26,720
Speaker 2: won forty one percent of the vote, sixty four seats

635
00:28:26,720 --> 00:28:29,639
Speaker 2: in the lower House of Congress and thirteen Senate seats

636
00:28:29,680 --> 00:28:33,639
Speaker 2: in this weekend's elections, a referendum yes on his plans

637
00:28:33,680 --> 00:28:35,560
Speaker 2: and policies, but also a bit of a referendum on

638
00:28:35,600 --> 00:28:39,400
Speaker 2: what the US Treasury Department had done, Treasury Secretary Scott

639
00:28:39,440 --> 00:28:42,560
Speaker 2: Bessant developing all kinds of extraordinary actions there to build

640
00:28:42,560 --> 00:28:44,120
Speaker 2: a bridge, as he put it, to the elections that

641
00:28:44,160 --> 00:28:47,120
Speaker 2: took place on this weekend. Patrick Allespie is our Buenos

642
00:28:47,200 --> 00:28:50,880
Speaker 2: Aires Bureau chief and he joins US now from Argentina. Patrick,

643
00:28:50,920 --> 00:28:54,200
Speaker 2: I could almost hear the backslapping coming from Treasury Secretary

644
00:28:54,240 --> 00:28:56,960
Speaker 2: Scott Bessant and his colleagues who are half halfway around

645
00:28:56,960 --> 00:28:57,959
Speaker 2: the world and in Asia.

646
00:28:59,160 --> 00:28:59,720
Speaker 3: They're taking a.

647
00:28:59,760 --> 00:29:01,880
Speaker 2: Victory lap here, and I wonder how premature that is

648
00:29:02,000 --> 00:29:03,800
Speaker 2: in light of what's happened here, or is it, in

649
00:29:03,840 --> 00:29:06,320
Speaker 2: fact an acknowledgement that maybe this worked and it did

650
00:29:06,320 --> 00:29:07,440
Speaker 2: help Afa and Malay.

651
00:29:10,200 --> 00:29:13,720
Speaker 11: Well, David Javir Malay just had a game changing moment

652
00:29:13,760 --> 00:29:17,160
Speaker 11: politically in Argentina. And as you might guess, nobody could

653
00:29:17,200 --> 00:29:19,720
Speaker 11: be happier than Scott Besson who took a very risky

654
00:29:19,760 --> 00:29:21,480
Speaker 11: bed about a month ago to step in with a

655
00:29:21,600 --> 00:29:26,240
Speaker 11: US financial lifeline and try to shore up Argentina's economy

656
00:29:26,240 --> 00:29:29,160
Speaker 11: and peso with the explicit goal of helping Mela win

657
00:29:29,200 --> 00:29:33,760
Speaker 11: these elections. It's remains to be seen if they could

658
00:29:33,840 --> 00:29:37,440
Speaker 11: remain happy. Will be important is if Malay can deliver

659
00:29:37,600 --> 00:29:41,120
Speaker 11: on the economic reforms that this renewed political support from

660
00:29:41,160 --> 00:29:44,120
Speaker 11: voters in Argentina is giving him. He needs to pull

661
00:29:44,160 --> 00:29:47,760
Speaker 11: off a really delicate balancing act of igniting economic growth,

662
00:29:47,840 --> 00:29:50,880
Speaker 11: keeping inflation in check, and power sharing with other centrist

663
00:29:50,880 --> 00:29:53,800
Speaker 11: blocks in Congress. So he's out of the woods politically

664
00:29:53,840 --> 00:29:56,680
Speaker 11: for now, David, but he's far from the finish line

665
00:29:56,680 --> 00:30:01,120
Speaker 11: of the free market utopia that he promised everyone talk.

666
00:30:00,960 --> 00:30:01,760
Speaker 3: A bit more about that.

667
00:30:01,800 --> 00:30:03,960
Speaker 2: You call that a balancing act, But I'd love to

668
00:30:03,960 --> 00:30:05,680
Speaker 2: get a better sense here of what these next few

669
00:30:05,680 --> 00:30:08,280
Speaker 2: months look like for the Argentine president and sort of

670
00:30:08,280 --> 00:30:11,000
Speaker 2: how difficult that's going to be for him to pull off.

671
00:30:11,000 --> 00:30:11,960
Speaker 3: Here in the months.

672
00:30:11,800 --> 00:30:19,680
Speaker 11: Ahead, absolutely, David, beyond growth and inflation, Melae is going

673
00:30:19,720 --> 00:30:23,160
Speaker 11: to have to try to push through labor tax pension

674
00:30:23,240 --> 00:30:27,120
Speaker 11: reforms that are equally wanted by investors and reviled by

675
00:30:27,240 --> 00:30:30,680
Speaker 11: Argentina's very powerful labor unions. He does not have a

676
00:30:30,720 --> 00:30:34,400
Speaker 11: simple majority in Congress. What he secured on Sunday, by

677
00:30:34,440 --> 00:30:36,840
Speaker 11: a mile was more than a third of the seats

678
00:30:36,840 --> 00:30:39,640
Speaker 11: in Congress, which protects his veto power, so he's got

679
00:30:39,840 --> 00:30:44,000
Speaker 11: a stronger position to negotiate from, but he still needs

680
00:30:44,120 --> 00:30:48,360
Speaker 11: Argentina's governors and other centrist blocks in Congress to get

681
00:30:48,360 --> 00:30:51,640
Speaker 11: his deep economic reforms across the finish line that would

682
00:30:51,680 --> 00:30:55,200
Speaker 11: be welcomed by foreign investors. But you could definitely anticipate

683
00:30:55,320 --> 00:30:59,520
Speaker 11: mass protests and pushback from these unions as Milae will

684
00:30:59,640 --> 00:31:03,800
Speaker 11: look to dismantle what our very generous severance system Severance

685
00:31:03,800 --> 00:31:07,200
Speaker 11: pain Argentina as well as the pension system, which accounts

686
00:31:07,240 --> 00:31:09,000
Speaker 11: for about two thirds of all government spending.

687
00:31:09,080 --> 00:31:10,920
Speaker 3: So he's got a long road ahead.

688
00:31:11,160 --> 00:31:13,800
Speaker 11: And we've seen this before of a pro market president

689
00:31:13,960 --> 00:31:16,600
Speaker 11: performing well on a midterm and then the wheels fall off.

690
00:31:16,840 --> 00:31:19,440
Speaker 11: So Milae needs to not repeat history and show that

691
00:31:19,480 --> 00:31:23,080
Speaker 11: he can work across the aisle, which he expressed last

692
00:31:23,160 --> 00:31:26,560
Speaker 11: night in his victory speech, but also make sure these

693
00:31:26,560 --> 00:31:29,959
Speaker 11: four reforms not only are past, but deliver the growth

694
00:31:30,160 --> 00:31:33,760
Speaker 11: and make Argentines actually feel that kind of improve quality

695
00:31:33,760 --> 00:31:36,400
Speaker 11: of life that he's pledged to deliver.

696
00:31:37,760 --> 00:31:39,280
Speaker 2: Patrick, thank you very much, Thank you very much for

697
00:31:39,280 --> 00:31:41,800
Speaker 2: that update. That's Patrick Gillespie or Buenos Airespirau Chief of

698
00:31:41,840 --> 00:31:44,600
Speaker 2: joining us from Argentina on this Monday and I want

699
00:31:44,640 --> 00:31:46,760
Speaker 2: to turn out to where that backslapping was taking place,

700
00:31:46,760 --> 00:31:48,800
Speaker 2: that of course is in Asia. And our next guest, now,

701
00:31:48,880 --> 00:31:51,360
Speaker 2: zag Nakoctar is national Security Practice group lead at Wili

702
00:31:51,440 --> 00:31:53,480
Speaker 2: Ryan the law firm, and a former Assistant Secretary for

703
00:31:53,520 --> 00:31:56,760
Speaker 2: Industry and Analysis at the International Trade Administration. Here with

704
00:31:56,800 --> 00:31:58,840
Speaker 2: some perspective on sort of the state of play when

705
00:31:58,840 --> 00:32:01,160
Speaker 2: it comes to these trade negotiations and perhaps what we

706
00:32:01,200 --> 00:32:04,400
Speaker 2: can expect on Thursday as well when it comes to

707
00:32:04,440 --> 00:32:07,280
Speaker 2: the US China relationship and kind of the stance of

708
00:32:07,280 --> 00:32:10,200
Speaker 2: the US going into these talks. How would you characterize

709
00:32:10,200 --> 00:32:12,960
Speaker 2: the US's outlook. We talk a lot about decoupling and

710
00:32:12,960 --> 00:32:16,960
Speaker 2: the prospects of decoupling. Can you with a definition or

711
00:32:16,960 --> 00:32:19,400
Speaker 2: a synthesizer of what the outlook is going into these talks?

712
00:32:19,480 --> 00:32:22,000
Speaker 7: Well, it's really good to be with you, and you know,

713
00:32:22,080 --> 00:32:24,320
Speaker 7: I'm going to use one word to really underscore what

714
00:32:24,440 --> 00:32:27,840
Speaker 7: is happening today and going into Thursday, President Trump and

715
00:32:27,880 --> 00:32:33,760
Speaker 7: presidentiji Being's meeting is complicated. Complicated, complicated. I think each

716
00:32:33,800 --> 00:32:36,120
Speaker 7: country is going to demand of the others things that

717
00:32:36,160 --> 00:32:39,120
Speaker 7: are just not going to be negotiable. That's sort of

718
00:32:39,160 --> 00:32:45,800
Speaker 7: at the outset China wants the US to oppose Taiwan's independence.

719
00:32:46,480 --> 00:32:49,920
Speaker 7: The United States needs rare earth, we need magnets. We

720
00:32:49,960 --> 00:32:54,560
Speaker 7: need magnets for our military capabilities. And so far, what

721
00:32:54,640 --> 00:32:59,160
Speaker 7: I've seen in these sort of pre negotiation negotiations framework

722
00:32:59,200 --> 00:33:03,240
Speaker 7: deals is easing of China offits export band.

723
00:33:03,280 --> 00:33:04,520
Speaker 3: But that doesn't say much.

724
00:33:04,560 --> 00:33:07,520
Speaker 7: That doesn't mean that China has made absolutely clear that

725
00:33:07,560 --> 00:33:10,520
Speaker 7: our military, our defense capabilities, will not get rare earth,

726
00:33:10,600 --> 00:33:12,640
Speaker 7: will not get the magnets that we need for the

727
00:33:12,680 --> 00:33:16,560
Speaker 7: motors imagine military equipment, all the motors that go into that.

728
00:33:16,920 --> 00:33:19,520
Speaker 7: China's made clear it doesn't want to do that. The

729
00:33:19,640 --> 00:33:22,400
Speaker 7: US has made clear. Rubio just doubled down on it

730
00:33:22,440 --> 00:33:25,760
Speaker 7: this the other day, Secretary of Rubio, the US is

731
00:33:25,840 --> 00:33:30,920
Speaker 7: going to not give in to China's demand for reunification

732
00:33:31,000 --> 00:33:34,800
Speaker 7: for the US to oppose Taiwanese independence. So negotiating positions

733
00:33:34,800 --> 00:33:38,200
Speaker 7: are really tough going in despite sort of these small

734
00:33:38,200 --> 00:33:42,360
Speaker 7: bites around the Apple framework concessions that we've gotten so

735
00:33:42,480 --> 00:33:43,680
Speaker 7: far from one another.

736
00:33:43,440 --> 00:33:44,440
Speaker 3: That's right where I want to go.

737
00:33:44,520 --> 00:33:46,560
Speaker 2: So you had the Treasury Sectorist Scott Beson and the

738
00:33:46,640 --> 00:33:49,120
Speaker 2: US Trade Representative kind of setting the table for the

739
00:33:49,120 --> 00:33:51,160
Speaker 2: conversation it's going to take place on Thursday. I think

740
00:33:51,160 --> 00:33:53,400
Speaker 2: there was some happiness that didn't go badly. They were

741
00:33:53,440 --> 00:33:56,120
Speaker 2: able to accomplish something and get that framework in place.

742
00:33:56,440 --> 00:33:57,360
Speaker 3: If you look at this as.

743
00:33:57,240 --> 00:33:59,320
Speaker 2: A spectrum sort of how far along are we in

744
00:33:59,360 --> 00:34:02,400
Speaker 2: getting to it as a result of what's taken place, Yes,

745
00:34:02,440 --> 00:34:05,680
Speaker 2: in Malaysia, but at the meetings that preceded it in Europe,

746
00:34:05,920 --> 00:34:07,680
Speaker 2: where are we in that spectrum of getting to a

747
00:34:07,720 --> 00:34:08,560
Speaker 2: deal with China.

748
00:34:08,640 --> 00:34:10,359
Speaker 7: What a great way of looking at and I really

749
00:34:10,440 --> 00:34:12,440
Speaker 7: want to underscore that this is the way to look

750
00:34:12,480 --> 00:34:15,080
Speaker 7: at it. Look at it is a time frame in

751
00:34:15,120 --> 00:34:18,240
Speaker 7: the spectrum of the time frame of our history with China.

752
00:34:18,360 --> 00:34:20,520
Speaker 7: We had a Phase one deal with China in the

753
00:34:20,560 --> 00:34:23,520
Speaker 7: first Trump administration. Myself, my colleagues, we were all part

754
00:34:23,560 --> 00:34:25,800
Speaker 7: of sort of negotiating the terms of that. And I

755
00:34:25,880 --> 00:34:28,879
Speaker 7: think everybody knew on some level that the Chinese might

756
00:34:28,920 --> 00:34:30,640
Speaker 7: not here to the terms of the Phase one deal.

757
00:34:31,040 --> 00:34:33,320
Speaker 7: And so the year's progress and the Chinese don't adhere

758
00:34:33,320 --> 00:34:36,640
Speaker 7: to the Phase one deal. All the while, the President

759
00:34:36,760 --> 00:34:41,520
Speaker 7: Hushing being has consolidated power in China. He's indigenized critical capabilities,

760
00:34:41,680 --> 00:34:45,400
Speaker 7: and he's gotten control stronger control of those critical supply chains,

761
00:34:46,480 --> 00:34:48,759
Speaker 7: and then we see in the summer of last year

762
00:34:48,920 --> 00:34:53,120
Speaker 7: China imposts export bans on gallium, germanium, antimony. This year

763
00:34:53,200 --> 00:34:55,680
Speaker 7: they just roll out, roll out, roll out more export bands.

764
00:34:55,680 --> 00:34:58,000
Speaker 7: But they're not giving us what we need. And so

765
00:34:58,080 --> 00:35:00,719
Speaker 7: when you judge China in terms of its actions, not

766
00:35:00,840 --> 00:35:03,279
Speaker 7: its words, it tells a very different story. They're not

767
00:35:03,320 --> 00:35:05,440
Speaker 7: ready to play ball. They don't want to play ball,

768
00:35:05,560 --> 00:35:09,040
Speaker 7: and because of all the consolidation of power and supply chains,

769
00:35:09,440 --> 00:35:11,799
Speaker 7: they're ready to continue to not play ball because they

770
00:35:11,800 --> 00:35:13,520
Speaker 7: know that they hold a lot of the cards right now.

771
00:35:14,160 --> 00:35:15,160
Speaker 3: Regrets, I've had a few.

772
00:35:15,160 --> 00:35:17,000
Speaker 2: I'm curious as you think about that Phase one deal

773
00:35:17,080 --> 00:35:19,799
Speaker 2: sort of what happened with it that you think that

774
00:35:19,800 --> 00:35:22,040
Speaker 2: the folks negotiating this deal are going to keep in mind.

775
00:35:22,120 --> 00:35:25,719
Speaker 2: So there's that level of enforcement that wasn't there. What

776
00:35:25,800 --> 00:35:27,200
Speaker 2: does that tell us about the way they should be

777
00:35:27,200 --> 00:35:29,399
Speaker 2: approaching these conversations in light of how that played out?

778
00:35:29,560 --> 00:35:31,520
Speaker 7: You know, I think the US has really boxed itself

779
00:35:31,520 --> 00:35:33,719
Speaker 7: into a corner. So it's going to push China for

780
00:35:33,800 --> 00:35:36,239
Speaker 7: a deal, and it's going to say enforcement, and my

781
00:35:36,320 --> 00:35:39,880
Speaker 7: key enforcement mechanism is tariffs. But what do the terriifts.

782
00:35:39,920 --> 00:35:42,680
Speaker 7: Do they impact the markets? And we know President Trump

783
00:35:42,760 --> 00:35:45,520
Speaker 7: is looking at the market. Secretary vest is looking at

784
00:35:45,520 --> 00:35:49,600
Speaker 7: the markets constantly, and they want a signal to obviously

785
00:35:49,719 --> 00:35:52,120
Speaker 7: US investors in the world that the US has a

786
00:35:52,160 --> 00:35:52,840
Speaker 7: strong market.

787
00:35:53,120 --> 00:35:54,560
Speaker 3: You can't have it both ways.

788
00:35:54,760 --> 00:35:56,680
Speaker 7: You can't have a trade deal with China with strong

789
00:35:56,760 --> 00:36:00,600
Speaker 7: enforcement and be willing to go to use your enforcement

790
00:36:00,680 --> 00:36:04,279
Speaker 7: levers because China never adheres to deals. We have twenty

791
00:36:04,360 --> 00:36:06,920
Speaker 7: five year history of China at the World Trade Organization

792
00:36:07,200 --> 00:36:11,239
Speaker 7: where it hasn't adhere to any of its commitments. So

793
00:36:11,320 --> 00:36:15,600
Speaker 7: now we're going to strengthen our negotiating tactics with enforcement,

794
00:36:15,719 --> 00:36:18,200
Speaker 7: but we're not willing to use the enforcement levers because

795
00:36:18,239 --> 00:36:21,160
Speaker 7: of the market. The administration has backed itself into a corner.

796
00:36:21,320 --> 00:36:23,000
Speaker 7: I'm sure they're going to figure out a way out,

797
00:36:23,000 --> 00:36:24,000
Speaker 7: but it's going to be tricking.

798
00:36:24,480 --> 00:36:24,719
Speaker 3: You know.

799
00:36:24,760 --> 00:36:27,080
Speaker 2: Well, the novel approach to trade that this president has,

800
00:36:27,200 --> 00:36:28,440
Speaker 2: I want to ask you about kind of the.

801
00:36:29,000 --> 00:36:30,320
Speaker 3: Corporate side of these deals.

802
00:36:30,360 --> 00:36:31,960
Speaker 2: So if you look at what was inked over the

803
00:36:32,000 --> 00:36:35,360
Speaker 2: course of the weekend, some deals for planes were agreed

804
00:36:35,400 --> 00:36:37,120
Speaker 2: to as a part of all of this. I think

805
00:36:37,120 --> 00:36:40,040
Speaker 2: about what's going to happen with conversations with Korean leadership

806
00:36:40,440 --> 00:36:43,000
Speaker 2: and with Japanese leadership, the Japanese agreed to this very

807
00:36:43,000 --> 00:36:45,200
Speaker 2: sizeable investment they're going to make in the US to

808
00:36:45,200 --> 00:36:48,799
Speaker 2: get those tear freights lowered. How complicated work is that

809
00:36:48,880 --> 00:36:50,800
Speaker 2: going to be to figure that out? And how novel

810
00:36:50,920 --> 00:36:54,080
Speaker 2: is that to impose upon a country like Japan, or

811
00:36:54,520 --> 00:36:56,320
Speaker 2: have Japan make an investment of that size, which I

812
00:36:56,320 --> 00:36:58,160
Speaker 2: think is like ten percent of their economy.

813
00:36:58,480 --> 00:37:00,960
Speaker 7: I think before getting I think think you touched on

814
00:37:01,000 --> 00:37:03,439
Speaker 7: this too. I think let's let's unpack the Malaysia even

815
00:37:03,480 --> 00:37:05,960
Speaker 7: a framework deal, because I think that illustrates the complexity.

816
00:37:06,320 --> 00:37:08,560
Speaker 7: So part of the framework deal with Malaysia is certainly

817
00:37:08,640 --> 00:37:11,680
Speaker 7: by planes, but also you know, open up your markets

818
00:37:11,719 --> 00:37:16,319
Speaker 7: to more US exports, but also don't restrict exports of

819
00:37:16,400 --> 00:37:19,279
Speaker 7: rare earth to the United States. But most of the Chinese,

820
00:37:19,480 --> 00:37:22,400
Speaker 7: most of the investments in rare is processing facilities and

821
00:37:22,440 --> 00:37:26,000
Speaker 7: minds in Malaysia are Chinese, and the Chinese have blocking

822
00:37:26,080 --> 00:37:28,640
Speaker 7: laws that says you don't adhere to US laws or

823
00:37:28,640 --> 00:37:31,160
Speaker 7: any laws that conflict with Chinese laws. What is Malaysia

824
00:37:31,280 --> 00:37:33,879
Speaker 7: going to do? What can it potentially legally do? It's

825
00:37:33,920 --> 00:37:35,719
Speaker 7: going to have to either give into China or given

826
00:37:35,719 --> 00:37:38,360
Speaker 7: to the United States, and it won't do one hundred

827
00:37:38,360 --> 00:37:40,480
Speaker 7: percent all US and one hundred percent. It's going to

828
00:37:40,480 --> 00:37:42,920
Speaker 7: do this balancing act, and we might wake up and

829
00:37:43,000 --> 00:37:45,120
Speaker 7: realize that what we thought we had agreed with Malaysia

830
00:37:45,160 --> 00:37:47,880
Speaker 7: isn't going to pan out. Same thing I think with Japan.

831
00:37:48,160 --> 00:37:51,319
Speaker 7: Japan has committed to in five hundred and fifty billion

832
00:37:51,320 --> 00:37:53,600
Speaker 7: dollars investments here, they don't know what they're going to

833
00:37:53,640 --> 00:37:56,840
Speaker 7: invest in. They don't know if the critical capabilities in

834
00:37:56,880 --> 00:37:58,480
Speaker 7: the US are going to invest in aren't going to

835
00:37:58,480 --> 00:38:00,760
Speaker 7: align with where Japan needs to go. And those supply

836
00:38:00,840 --> 00:38:03,239
Speaker 7: chains are here, and Japan needs supply chains at home.

837
00:38:03,440 --> 00:38:06,160
Speaker 7: Japan needs this is the amount of the Committee to

838
00:38:06,160 --> 00:38:09,680
Speaker 7: invest is about ten percent of their economy. Right, they

839
00:38:09,719 --> 00:38:13,000
Speaker 7: need to increase military spending. You get their supply chains

840
00:38:13,000 --> 00:38:15,759
Speaker 7: in order too, because China has a choke point on

841
00:38:15,800 --> 00:38:19,480
Speaker 7: global supply chains in terms of rare earth's, industrial diamonds, etc.

842
00:38:20,200 --> 00:38:22,439
Speaker 7: So Japan's in a tough spot as well.

843
00:38:22,680 --> 00:38:24,719
Speaker 2: Make I can ask you lastly just about the conversations

844
00:38:24,760 --> 00:38:27,239
Speaker 2: taking place or not taking place in this hemisphere. So

845
00:38:27,280 --> 00:38:29,160
Speaker 2: we reported today that Mexico is going to have a

846
00:38:29,160 --> 00:38:32,120
Speaker 2: bit of an extension on delay on as it continues

847
00:38:32,120 --> 00:38:32,919
Speaker 2: to talk with the US.

848
00:38:33,000 --> 00:38:35,319
Speaker 3: Canada not in that position. Right now, those talks are not.

849
00:38:35,360 --> 00:38:38,080
Speaker 2: Taking place, and it sounds like there's unlikely to be

850
00:38:38,080 --> 00:38:41,120
Speaker 2: a conversation between the Prime Minister and the President anytime soon.

851
00:38:41,680 --> 00:38:44,759
Speaker 2: How are you thinking about the progress of negotiations here

852
00:38:45,000 --> 00:38:46,640
Speaker 2: in the North American hemisphere.

853
00:38:46,760 --> 00:38:50,560
Speaker 7: I think it's very likely that USMCA is going to

854
00:38:50,600 --> 00:38:53,040
Speaker 7: be renegotiated, But then we're going to have some side,

855
00:38:53,160 --> 00:38:57,040
Speaker 7: really strong side deals with Canada separately and with Mexico separately.

856
00:38:57,080 --> 00:38:58,759
Speaker 7: And the reason is that their asks of them are

857
00:38:58,760 --> 00:39:00,759
Speaker 7: going to be very different Our a trade and our

858
00:39:00,800 --> 00:39:03,080
Speaker 7: dependencies are going to be very different. And with Mexico

859
00:39:03,120 --> 00:39:05,120
Speaker 7: this is sort of what I alluded to about Malaysia.

860
00:39:05,560 --> 00:39:08,520
Speaker 7: Lots of Chinese investments in Mexico, and how are we

861
00:39:08,560 --> 00:39:10,640
Speaker 7: going to deal with rules of origin? How do we

862
00:39:10,680 --> 00:39:14,040
Speaker 7: treat the products that are come from Mexico with substantial

863
00:39:14,160 --> 00:39:18,759
Speaker 7: Chinese origin input into them. That's going to complicate our

864
00:39:18,800 --> 00:39:21,880
Speaker 7: discussions with Mexico with the rest of the world. When

865
00:39:21,960 --> 00:39:25,400
Speaker 7: we ask that we impose higher tariffs on goods containing

866
00:39:25,480 --> 00:39:26,839
Speaker 7: Chinese materials ZAC.

867
00:39:26,880 --> 00:39:27,400
Speaker 3: Thank you very much.

868
00:39:27,440 --> 00:39:29,800
Speaker 2: Great thanks you here here with me here in the

869
00:39:29,840 --> 00:39:32,440
Speaker 2: studio in Washington, DC. As we look ahead to more

870
00:39:32,440 --> 00:39:34,520
Speaker 2: of the President's trip to Asia. He is in Japan's

871
00:39:34,480 --> 00:39:36,560
Speaker 2: scheduled to meet with the Japanese Prime Minister here in

872
00:39:36,600 --> 00:39:39,120
Speaker 2: the coming hours, going to visit with US troops there

873
00:39:39,120 --> 00:39:41,960
Speaker 2: in Japan as well, and with business officials as we'll

874
00:39:41,960 --> 00:39:43,440
Speaker 2: see if make any headway on that five hund and

875
00:39:43,480 --> 00:39:44,760
Speaker 2: fifty billion dollar investment.

876
00:39:44,960 --> 00:39:47,400
Speaker 3: Thanks for listening to the Balance of Power podcast.

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Speaker 2: Make sure to subscribe if you haven't already, at Apple,

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Speaker 2: Spotify

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Speaker 8: Or wherever you get your podcasts, and you can find

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Speaker 8: us live every weekday from Washington, DC at noontime Eastern

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Speaker 8: at Bloomberg dot com.