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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Joining us now, I'm

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Speaker 1: pleased to say, is another member of President Trump's former cabinet.

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Speaker 1: Wilbur Ross's former Commerce secretary and the author of the

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Speaker 1: book Risk and Returns, Creating Success in Business and Life,

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Speaker 1: joins us now. Secretary, fantastic to have you with us.

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Speaker 1: I want to start with the tariff deadline, because you

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Speaker 1: were on the record that July ninth, the original tariff deadline,

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Speaker 1: was going to be very difficult to achieve. We did

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Speaker 1: see that pushback to August first, and I'm curious from

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Speaker 1: where you're sitting, do you think that August first is

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Speaker 1: achievable or might we see another delay here?

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Speaker 2: Well, I think almost every major country has already submitted

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Speaker 2: a counter proposal to the Trump administration trying to ward

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Speaker 2: off the tariffs that otherwise will go into effect.

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Speaker 3: So the real question is will.

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Speaker 2: Trump accept what they have on the table, will they

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Speaker 2: put a little more on the table? Where will it

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Speaker 2: come out? The worst comes to worst, he is fully

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Speaker 2: prepared to go through with the tariffs, then have that

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Speaker 2: for the end of the story.

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Speaker 4: You know, Secretary Ross, you also recently told Fortune magazine

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Speaker 4: that quote my one fear is that if our government

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Speaker 4: feels too chesty with their progress, they may overplay the

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Speaker 4: hand and get to levels that are hard, maybe even

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Speaker 4: impossible for other countries to give in. It's easy to

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Speaker 4: get carried away with early successes. Now you've pointed to

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Speaker 4: the success that the early administration has had in these discussions,

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Speaker 4: in these early phases. But what if they go too far?

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Speaker 4: Do they risk doing damage to relationships as well as

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Speaker 4: parts of the US economy.

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Speaker 2: Well, first of all, there's already been one hundred billion

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Speaker 2: dollars collected in terrace, and it has not really adversely

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Speaker 2: affected the economy. The estimates are that that total will

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Speaker 2: get to around three hundred billion by the end of

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Speaker 2: the year. Three hundred billion on a full year basis

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Speaker 2: is a little over one percent of our economy.

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Speaker 3: But what will really happen.

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Speaker 2: American consumers won't pay the whole three hundred The importers

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Speaker 2: will absorb some of it, The exporters will absorb some

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Speaker 2: of it. Probably some of the foreign governments will also.

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Speaker 3: Absorb part of it.

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Speaker 2: So it's only a fraction of that that I think

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Speaker 2: will come to pass. And so what are you talking

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Speaker 2: a fraction of one percent? Who you can't really even

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Speaker 2: estimate the economy to within a fraction of one percent.

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Speaker 1: Interesting, but we know that it's some people's entire jobs

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Speaker 1: to try to do exactly that. Let's talk about something

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Speaker 1: that's even harder to measure, and that is confidence, investor confidence.

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Speaker 1: I know that you know you made the point to

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Speaker 1: Bloomberg News that sort of this tit for tat the

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Speaker 1: will he won't he when it comes to these terrif

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Speaker 1: rates that could erode investor a confidence. And it was

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Speaker 1: interesting to read into the Delta earnings this morning because

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Speaker 1: we heard from CEO Ed Bastian that people are starting

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Speaker 1: to understand with clarity where things are headed. That allows

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Speaker 1: them to start making plans whether to travel or invest

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Speaker 1: in a business. And when you take a look at

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Speaker 1: the current landscape right now, heading towards potentially another deadline

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Speaker 1: that could be pushed back for tariffs, do you think

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Speaker 1: that investors have just gotten used to the uncertainty or

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Speaker 1: do you think we could be nearing a point where

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Speaker 1: some of that calm starts to crack.

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Speaker 3: Well, I think a couple of things.

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Speaker 2: First of all, the most recent unemployment report was very favorable.

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Speaker 2: It's only two hundred and twenty seven thousand in that week,

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Speaker 2: so there's no sign that employers have started to be

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Speaker 2: more cautious about hiring people than they were. Second, I

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Speaker 2: think the key will be knowing what the endgame is,

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Speaker 2: and assuming it gets resolved on the first of August

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Speaker 2: or thereabouts, that will clear the air. Because businesses and

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Speaker 2: markets can adjust to good news, they can adjust to

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Speaker 2: bad news, but they have trouble adjusting too is uncertainty,

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Speaker 2: and so one way or another, I believe things will

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Speaker 2: be clarified around the first of August.

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Speaker 4: Why do you have confidence in that August first deadline,

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Speaker 4: especially when we see some areas in which the Trump

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Speaker 4: administration has been escalating the tariff wars here. You look

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Speaker 4: at Brazil for example, and the escalation there is quite severe.

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Speaker 4: So why would August be a thick and final Well.

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Speaker 3: First of all, the Brazil is a one off.

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Speaker 2: It's a very unusual talk about terror because it doesn't

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Speaker 2: have to do.

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Speaker 3: With imports and exports.

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Speaker 2: It has to do with President Trump's anger as the

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Speaker 2: way the Brazilian government is treating the Formula leader Balsonaro,

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Speaker 2: who's very friendly.

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Speaker 3: With the president. So that's a one off.

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Speaker 2: I don't think it tells you much about anything else

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Speaker 2: that he's doing.

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Speaker 1: Well, let's talk about that, Secretary, because you described that

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Speaker 1: as a one off, the situation with Brazil. But there

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Speaker 1: is some worry there that we're really pushing into other realms,

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Speaker 1: that we're not using these tariff measures just for trade anymore,

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Speaker 1: and that this could set a precedent.

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Speaker 2: Well, he president already sets the precedent. Remember back in

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Speaker 2: the early days of this administration, when he went after

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Speaker 2: Mexico because they weren't helping him with the border and

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Speaker 2: with controling fentanyl. So he has you and he's used

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Speaker 2: it with Europe in terms of the contribution of the

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Speaker 2: various EU member states to defense budgets, as.

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Speaker 3: They're supposed to do with NATO.

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Speaker 2: So the difference between the last administration of Trump in

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Speaker 2: this one is he is using tariffs much more broadly.

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Speaker 2: He's using the tariffs for achieving what you might call

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Speaker 2: diplomatic or other rules having not much to do with tariffs.

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Speaker 2: So the Bolsonaro thing, the Fentan all, there are a

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Speaker 2: number of things like that that he's been using tariffs for.

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Speaker 2: And I think the reason he's able to do that,

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Speaker 2: or feels he is is here we learned in the

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Speaker 2: first administration just how extensively the president can use tariffs

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Speaker 2: without going back to Congress. Historically, the Senate has played

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Speaker 2: a very major role in tariffs. This president has not

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Speaker 2: taken anything, by the way tariffs to the Congress, and

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Speaker 2: he's got some more things that will be coming down

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Speaker 2: the road. He has Secretary Lutnek doing two thirty two

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Speaker 2: investigations on pharmaceuticals, semiconductors, and probably other things. In two

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Speaker 2: thirty two is what we use is originally to put

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Speaker 2: on the steel and aluminum tariffs.

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Speaker 1: Well, Secretary, what do you make of that push as

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Speaker 1: you describe it using terms for really expansive purposes outside

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Speaker 1: of trade. We heard from Vice President former Vice President

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Speaker 1: Mike Pence this morning. It seems like he disagrees with

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Speaker 1: that push, and I just wonder what your opinion is.

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Speaker 2: Well, yes, I think Vice President in Pence has tended

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Speaker 2: to disagree with a number of the tariff decisions the

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Speaker 2: President Trump has made, so that doesn't surprise me too

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Speaker 2: much at all. But he is the president. He is

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Speaker 2: making the decisions that he decides to make, and while

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Speaker 2: some of them probably eventually will be challenged.

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Speaker 3: In the court.

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Speaker 2: For the most part, the courts have been pretty good

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Speaker 2: and coming in on is side, and as I said,

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Speaker 2: that's what gives him the confidence to be a bit

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Speaker 2: more expensive secretary.

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Speaker 4: You're also on the side, very interestingly about to join

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Speaker 4: the board of a company focus on crypto. This company,

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Speaker 4: Reserve One, is merging with us back going public. And

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Speaker 4: we spoke to the CEO of Reserve One a little

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Speaker 4: bit earlier this week and she actually mentioned your involvement,

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Speaker 4: had mentioned that perhaps in the past you might not

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Speaker 4: have been keen on crypto, but now are obviously taking

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Speaker 4: a much bigger stance by joining this company which is

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Speaker 4: focused on bitcoin. Treasury, why did you change your mind?

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Speaker 4: Are you a believer now in crypto more broadly or

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Speaker 4: is there something about bitcoin that you are now latching

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Speaker 4: onto as the administration warms up to crypto?

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Speaker 3: Right?

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Speaker 2: Well, what has changed? My objection to crypto in the

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Speaker 2: beginning had been that it was a little bit like

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Speaker 2: the wild ones. You didn't really have government regulation, you

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Speaker 2: didn't have government supervision, you didn't have professional investors really

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Speaker 2: active in it. But look at now here you have

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Speaker 2: President Trump getting all sorts of regulatory things through and

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Speaker 2: in fact getting into the family, getting into the crypto

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Speaker 2: business themselves. You've got Black Rock, Fidelity funds and others

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Speaker 2: coming in. You have Strategy and others using corporate treasury

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Speaker 2: and arbitraging capital markets into bitcoin. So what's happening is

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Speaker 2: you're getting away from the retail wild west and into

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Speaker 2: a more professional environment. And I think that's what we're

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Speaker 2: trying to accomplish with Reserve is bring a batch of

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Speaker 2: professional skills, both broadly investing and specifically knowledge of bitcoin

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Speaker 2: and the other competitors. So the world is changing. It's

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Speaker 2: becoming widely accepted as an appropriate institutional class, and therefore

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Speaker 2: the environment has changed.

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Speaker 3: And I think that's the important thing.

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Speaker 2: For example, the trading of late has been mostly what

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Speaker 2: they call whales on the cell side. Those are retail

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Speaker 2: individuals who had accumulated a thousand or more coins in

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Speaker 2: the old days and therefore have now made a big

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Speaker 2: fortune out of it. Those are tending to sell and

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Speaker 2: whose boy are the ETFs and people like Strategy and

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Speaker 2: all sorts of institutional investors.

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Speaker 3: Larry Fink is widely.

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Speaker 2: Quoted as saying he recommends that five percent of portfolios

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Speaker 2: should be in bitcoin. Centenderer Big Spanish bank they're recommending

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Speaker 2: to their clients.

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Speaker 3: So what's happening is you're.

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Speaker 2: Getting away from the wild and weally unregulated, mostly retail

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Speaker 2: market into one that's very much more professionalized, and I

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Speaker 2: think that's a healthier thing.

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Speaker 1: Right Unfortunately, Secretary, we're up against the clock, really looking

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Speaker 1: forward to seeing your progress with Reserve one, and you're

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Speaker 1: right in that this has become a much more mature

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Speaker 1: cryptocurrency market. Really appreciate your time this morning. That is

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Speaker 1: Wilba Ross. He is the former US Secretary of Commerce,