1 00:00:02,720 --> 00:00:10,520 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,480 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:17,800 Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg 4 00:00:17,880 --> 00:00:21,000 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,320 --> 00:00:23,480 Speaker 1: or watch us live on YouTube. 6 00:00:24,640 --> 00:00:27,920 Speaker 2: Obviously, the question is how do you factor in any 7 00:00:28,000 --> 00:00:30,280 Speaker 2: Trump policies? Right? Was a JP Morgan that said they're 8 00:00:30,280 --> 00:00:32,760 Speaker 2: going to have like a tariff trade desk now working 9 00:00:32,840 --> 00:00:34,880 Speaker 2: like twenty four hours a day, try to do on 10 00:00:34,920 --> 00:00:36,839 Speaker 2: top of it, right, just try and like understand what 11 00:00:36,880 --> 00:00:38,680 Speaker 2: the input means for their models. So we wanted to 12 00:00:38,680 --> 00:00:41,520 Speaker 2: get more on that with Branda Murray, Bloomberg Global Trade Editor, 13 00:00:41,920 --> 00:00:43,919 Speaker 2: on all these tariffs, Let's just start with what we 14 00:00:43,960 --> 00:00:46,440 Speaker 2: know in terms of Mexico and Canada and what we 15 00:00:46,479 --> 00:00:48,160 Speaker 2: could expect come February first. 16 00:00:49,479 --> 00:00:52,440 Speaker 3: Yeah, so, so Trump in an Oval Office press briefing 17 00:00:52,840 --> 00:00:56,040 Speaker 3: late yesterday said that he was going to put twenty 18 00:00:56,120 --> 00:00:59,959 Speaker 3: five percent tariff on Mexico and Canada starting February five. 19 00:01:00,280 --> 00:01:02,800 Speaker 3: So you know, less than two weeks from now, thirty 20 00:01:02,800 --> 00:01:07,120 Speaker 3: percent of all US trade imports would have would have 21 00:01:07,160 --> 00:01:11,119 Speaker 3: a what would be you know, a quoter more expensive. Uh. Now, 22 00:01:11,160 --> 00:01:15,039 Speaker 3: whether those are threats that are aimed at driving those 23 00:01:15,040 --> 00:01:18,720 Speaker 3: two countries to the negotiating table or I promise that 24 00:01:18,760 --> 00:01:22,240 Speaker 3: he'll actually follow through on is We don't know. But 25 00:01:22,440 --> 00:01:26,119 Speaker 3: he has the authority to do so. And uh and 26 00:01:26,120 --> 00:01:28,640 Speaker 3: and and the currency markets at least are taking him 27 00:01:28,640 --> 00:01:29,360 Speaker 3: at as word. 28 00:01:29,840 --> 00:01:33,440 Speaker 4: Brendan, would these be enacted via an executive orders at 29 00:01:33,480 --> 00:01:37,080 Speaker 4: simply signing a pen uh and they're put in place? 30 00:01:37,840 --> 00:01:40,720 Speaker 3: Yeah, there's there's a there's some legal mumbo jumbo that 31 00:01:40,840 --> 00:01:43,320 Speaker 3: he would have to go through and and declare quote 32 00:01:43,360 --> 00:01:47,640 Speaker 3: unquote a national emergency. Uh and and and and you 33 00:01:47,680 --> 00:01:50,680 Speaker 3: know that could be the fentanyl uh you know problem, 34 00:01:51,040 --> 00:01:55,920 Speaker 3: or the migration illegal migration problem from from both countries, 35 00:01:55,960 --> 00:01:58,320 Speaker 3: although Canada there's that's a lot that's a lot less 36 00:01:58,320 --> 00:02:03,600 Speaker 3: acute from the northern border. He there is executive authority 37 00:02:03,600 --> 00:02:07,480 Speaker 3: that the president has to put tariffs at least temporarily 38 00:02:07,880 --> 00:02:12,160 Speaker 3: on countries that are causing you know, a big trade 39 00:02:12,160 --> 00:02:15,559 Speaker 3: and balance or some kind of economic emergency. 40 00:02:15,840 --> 00:02:16,000 Speaker 5: Right. 41 00:02:16,080 --> 00:02:18,640 Speaker 2: That's what's really confusing, because if we look at tariff 42 00:02:18,680 --> 00:02:21,680 Speaker 2: policy as a negotiating tool, and you could look at 43 00:02:21,680 --> 00:02:24,880 Speaker 2: what wasn't said about China as a window into that. 44 00:02:25,600 --> 00:02:28,079 Speaker 2: What is the US trying to negotiate with Canada? 45 00:02:30,200 --> 00:02:34,560 Speaker 3: Yeah, I mean it's a good question. Trump basically looks 46 00:02:34,639 --> 00:02:39,080 Speaker 3: at bilateral trade relationships and says, if you have a 47 00:02:39,080 --> 00:02:41,880 Speaker 3: surplus for US, we're losing and we're going to fix those. 48 00:02:42,080 --> 00:02:46,840 Speaker 3: So he would want, you know, Canada to to buy 49 00:02:46,840 --> 00:02:51,000 Speaker 3: more US products or subsidize less of its own products 50 00:02:51,400 --> 00:02:55,880 Speaker 3: at the expense of American producers. So it would be 51 00:02:56,080 --> 00:03:01,600 Speaker 3: to drive you know, concessions the US MCA. This is 52 00:03:01,960 --> 00:03:05,680 Speaker 3: the successor to the NAFTA agreement that was renegotiated in 53 00:03:05,720 --> 00:03:09,040 Speaker 3: Trump's first term, is up for review in about a 54 00:03:09,120 --> 00:03:11,560 Speaker 3: year and a half. So perhaps this is a tactic 55 00:03:11,639 --> 00:03:14,680 Speaker 3: to you know, to kind of put put the US 56 00:03:14,720 --> 00:03:18,799 Speaker 3: on the front foot in those talks that will undoubtedly 57 00:03:18,880 --> 00:03:19,600 Speaker 3: start this year. 58 00:03:20,160 --> 00:03:22,079 Speaker 4: It's only been a very short time for this administration, 59 00:03:22,200 --> 00:03:25,720 Speaker 4: but we've not heard much as relates to China and Tarish. 60 00:03:25,760 --> 00:03:28,160 Speaker 4: Where do you think that the policy wins are blowing there? 61 00:03:29,320 --> 00:03:32,080 Speaker 3: Yeah, So lost in all all of the you know, 62 00:03:32,160 --> 00:03:37,640 Speaker 3: Mexico Canada headlines yesterday was the actual executive action that 63 00:03:37,680 --> 00:03:41,000 Speaker 3: the President put out on trade policy, and there were 64 00:03:41,040 --> 00:03:44,360 Speaker 3: a number of things in that that he asked his 65 00:03:44,440 --> 00:03:48,800 Speaker 3: departments heads, his cabinet secretaries to investigate or assess. And 66 00:03:48,880 --> 00:03:55,840 Speaker 3: one of those is oversized trade imbalances, currency misalignments, and 67 00:03:55,880 --> 00:03:58,320 Speaker 3: those kinds of things that you know, the code word 68 00:03:58,680 --> 00:04:01,160 Speaker 3: you know, that's just code for for China there. So 69 00:04:01,680 --> 00:04:04,680 Speaker 3: those will go through a more uh, you know, a 70 00:04:04,760 --> 00:04:10,760 Speaker 3: longer department led review. The deadline is April first, so 71 00:04:11,520 --> 00:04:13,560 Speaker 3: that's not too far out. That's you know, just a 72 00:04:13,560 --> 00:04:16,120 Speaker 3: couple of months. And you know, and and those could 73 00:04:16,160 --> 00:04:21,360 Speaker 3: be the legal justifications for a tougher tariff stance with China. 74 00:04:22,240 --> 00:04:25,520 Speaker 2: What's so interesting is when we're starting to get company 75 00:04:25,560 --> 00:04:27,520 Speaker 2: calls or even in the fourth quarter, when we were 76 00:04:27,520 --> 00:04:30,400 Speaker 2: getting third quarter earnings out CEO is talking about tariffs, 77 00:04:30,600 --> 00:04:32,720 Speaker 2: they all seem to say, like, we can handle it. 78 00:04:32,839 --> 00:04:36,480 Speaker 2: We're monitoring it very closely. We've already diversified maybe our 79 00:04:36,520 --> 00:04:41,240 Speaker 2: supply base after the last Trump administration. What are do 80 00:04:41,480 --> 00:04:44,159 Speaker 2: you feel like companies are prepared this time around? Because 81 00:04:44,160 --> 00:04:46,039 Speaker 2: I'm trying to see where the equity impact is going 82 00:04:46,120 --> 00:04:46,279 Speaker 2: to be. 83 00:04:47,480 --> 00:04:49,600 Speaker 3: Yeah, they would be, and I agree with you the 84 00:04:49,920 --> 00:04:53,000 Speaker 3: lots of those reaped through those transcripts myself and and 85 00:04:53,000 --> 00:04:55,360 Speaker 3: and try to see where the winds are blowing in 86 00:04:55,880 --> 00:04:59,960 Speaker 3: the C suite, but they would be more more diversified 87 00:05:00,080 --> 00:05:03,200 Speaker 3: in there in their supplier or supply chains. You know, 88 00:05:03,240 --> 00:05:05,360 Speaker 3: a lot of a lot of companies started doing that 89 00:05:05,400 --> 00:05:08,839 Speaker 3: well before Trump, uh, the move move outside China. That's 90 00:05:08,880 --> 00:05:11,679 Speaker 3: sort of so called China plus plus one or plus 91 00:05:11,720 --> 00:05:14,720 Speaker 3: two strategies. So there would be you know, a bit 92 00:05:14,760 --> 00:05:19,279 Speaker 3: of a you know, a shock absorber built in since 93 00:05:19,320 --> 00:05:23,360 Speaker 3: the first Trump administration. But still there's no there's no 94 00:05:23,640 --> 00:05:26,279 Speaker 3: getting around the fact that if if you know, a 95 00:05:26,480 --> 00:05:30,800 Speaker 3: universal tax that Trump has floated even yesterday, uh, you know, 96 00:05:30,880 --> 00:05:35,960 Speaker 3: on on all US imports, would start chipping away at 97 00:05:36,000 --> 00:05:38,960 Speaker 3: earnings outlooks, you know, quarter by quarter as we go 98 00:05:39,040 --> 00:05:39,560 Speaker 3: through the year. 99 00:05:40,480 --> 00:05:41,120 Speaker 6: Brennan, if we. 100 00:05:41,080 --> 00:05:44,480 Speaker 4: Heard anything from Mexico and Canada about what they would 101 00:05:44,480 --> 00:05:47,479 Speaker 4: do if, in fact, these twenty five percent tariffs do 102 00:05:47,520 --> 00:05:49,920 Speaker 4: start on February first, maybe. 103 00:05:50,160 --> 00:05:53,839 Speaker 3: Well Canada has Canada has said, you know, we'll retaliate 104 00:05:53,920 --> 00:05:55,920 Speaker 3: in kind. And if you if you come at if 105 00:05:55,920 --> 00:05:58,600 Speaker 3: you come at US with you know, a twenty five 106 00:05:58,600 --> 00:06:00,680 Speaker 3: percent tariffs, then we have a list of US products 107 00:06:00,680 --> 00:06:04,600 Speaker 3: that will that will do the same thing too. Mexico 108 00:06:04,800 --> 00:06:10,080 Speaker 3: has I'm not sure, Mexico has threatened in kind retaliation, 109 00:06:10,240 --> 00:06:12,120 Speaker 3: but Mexico has said, look, you're just going to hurt 110 00:06:12,120 --> 00:06:15,360 Speaker 3: yourself because a lot of a lot of the imports 111 00:06:15,400 --> 00:06:17,440 Speaker 3: at a lot of a lot of American companies are 112 00:06:17,440 --> 00:06:20,760 Speaker 3: in Mexico. And if you start, if you start, you know, 113 00:06:20,800 --> 00:06:24,800 Speaker 3: putting tariffs on those on those, on those companies, those 114 00:06:24,839 --> 00:06:27,720 Speaker 3: companies products, then then you're just going to hurt you know, 115 00:06:28,200 --> 00:06:30,440 Speaker 3: the business back in the US. 116 00:06:30,680 --> 00:06:32,160 Speaker 4: Right, all right, we'll have to see how that plays out. 117 00:06:32,200 --> 00:06:35,600 Speaker 4: Will follow it closely, of course. Brendan Murray, global trade editor, 118 00:06:35,600 --> 00:06:37,640 Speaker 4: who's going to be busy going forward, that's for sure, 119 00:06:37,720 --> 00:06:41,120 Speaker 4: Global Trade editor for Bloomberg News. He is based in London. 120 00:06:42,839 --> 00:06:46,719 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program 121 00:06:46,839 --> 00:06:50,239 Speaker 1: live weekdays at ten am Eastern on Applecarplay and Android 122 00:06:50,279 --> 00:06:53,279 Speaker 1: Auto with the Bloomberg Business app. You can also listen 123 00:06:53,360 --> 00:06:56,640 Speaker 1: live on Amazon Alexa from our flagship New York station. 124 00:06:57,160 --> 00:06:59,839 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 125 00:07:00,640 --> 00:07:02,080 Speaker 2: All right, now we want to go to the broader 126 00:07:02,080 --> 00:07:04,279 Speaker 2: look on the market. Right, I'm getting all the notes 127 00:07:04,320 --> 00:07:06,800 Speaker 2: of like Trump Day one had a position, what does 128 00:07:06,880 --> 00:07:09,120 Speaker 2: it mean? The whiplash we've seen in the market, So 129 00:07:09,520 --> 00:07:11,800 Speaker 2: how do you position if you're actually putting together an 130 00:07:11,800 --> 00:07:15,600 Speaker 2: equity portfolio or an investment portfolio. Christopher Smart is managing 131 00:07:15,640 --> 00:07:20,360 Speaker 2: partner at Abroth Group. He is joining us now. I 132 00:07:20,400 --> 00:07:24,800 Speaker 2: guess the question really becomes, Chris, how do you model 133 00:07:25,320 --> 00:07:30,280 Speaker 2: things we don't know but think are coming well? 134 00:07:30,600 --> 00:07:32,920 Speaker 7: Good to be with you, Alex, I think the answer 135 00:07:32,960 --> 00:07:36,640 Speaker 7: is very carefully and very slowly. And you know, we're 136 00:07:36,680 --> 00:07:40,800 Speaker 7: not quite twenty four hours into this new administration. We've 137 00:07:40,840 --> 00:07:44,520 Speaker 7: had a slew of decisions and executive orders and comments 138 00:07:44,560 --> 00:07:47,520 Speaker 7: by the new president, but I think we're many of 139 00:07:47,600 --> 00:07:49,960 Speaker 7: us still scratching our heads as to what this might 140 00:07:50,040 --> 00:07:53,760 Speaker 7: mean for any given portfolio. You have a series of 141 00:07:54,200 --> 00:07:57,480 Speaker 7: macro decisions that are looming, whether that's around the budget 142 00:07:57,680 --> 00:08:02,720 Speaker 7: or taxes or FED policy that we're still not clear about. 143 00:08:02,800 --> 00:08:05,160 Speaker 7: In terms of the president giving signals about what he 144 00:08:05,200 --> 00:08:07,880 Speaker 7: has in store for what his preferences are for the 145 00:08:08,000 --> 00:08:12,520 Speaker 7: upcoming budget. We have a lot of announcements on tax 146 00:08:12,720 --> 00:08:14,840 Speaker 7: and tariff policy, which sort of takes you down to 147 00:08:14,920 --> 00:08:16,920 Speaker 7: the corporate level. You know a lot of CFOs, as 148 00:08:16,920 --> 00:08:19,360 Speaker 7: you were talking about earlier on your program, trying to 149 00:08:19,360 --> 00:08:22,120 Speaker 7: figure out what this means for them, and then oh, 150 00:08:22,120 --> 00:08:24,880 Speaker 7: by the way, this is earnings week, so there's just 151 00:08:24,920 --> 00:08:27,120 Speaker 7: a whole lot for investors to digest. And as I 152 00:08:27,160 --> 00:08:29,520 Speaker 7: talked to my clients, I know they're working very hard 153 00:08:29,560 --> 00:08:32,800 Speaker 7: and feeling that flashback to four or five, six, seven 154 00:08:32,880 --> 00:08:35,079 Speaker 7: years ago in the first Trump administration, where if you 155 00:08:35,200 --> 00:08:39,040 Speaker 7: haven't checked your news feed in the last couple of hours, 156 00:08:39,040 --> 00:08:40,320 Speaker 7: you feel like you may be out of date. 157 00:08:41,040 --> 00:08:43,520 Speaker 4: So, Christopher, what do you think is some of the 158 00:08:43,559 --> 00:08:47,280 Speaker 4: most important things for President Biden and his administration to 159 00:08:47,400 --> 00:08:49,319 Speaker 4: achieve in the first one hundred days. 160 00:08:51,120 --> 00:08:52,640 Speaker 7: I think you meant President Trump Trump. 161 00:08:52,760 --> 00:08:54,720 Speaker 8: Yes, we're all going to get used to that. 162 00:08:56,640 --> 00:09:00,760 Speaker 7: I think it's really the thing that investors, I think 163 00:09:00,760 --> 00:09:02,840 Speaker 7: are going to want to really get clarity on is 164 00:09:03,320 --> 00:09:06,480 Speaker 7: the tariff's issue. And I think we have maybe less 165 00:09:06,520 --> 00:09:08,320 Speaker 7: clarity on it today than we did a couple of 166 00:09:08,360 --> 00:09:11,800 Speaker 7: days ago. To my mind, the tariffs that are linked 167 00:09:11,880 --> 00:09:15,400 Speaker 7: to non economic issues, whether it's ventanyl, or it's immigration 168 00:09:16,120 --> 00:09:22,880 Speaker 7: Canada and Mexico, whether it's tariffs that were promised to China, 169 00:09:22,960 --> 00:09:27,400 Speaker 7: you know, related to the byte dance, TikTok divestiture, those 170 00:09:27,440 --> 00:09:32,000 Speaker 7: feel a lot like negotiating moves to kind of apply 171 00:09:32,200 --> 00:09:35,840 Speaker 7: leverage to a non economic issue that will get resolved 172 00:09:35,920 --> 00:09:39,280 Speaker 7: before big tariffs are applied. I think the real thing 173 00:09:39,320 --> 00:09:41,840 Speaker 7: that investors need to keep their eyes on are these 174 00:09:42,200 --> 00:09:44,439 Speaker 7: these studies that he's now commissioned from the Department of 175 00:09:44,480 --> 00:09:48,120 Speaker 7: Commerce and others to look at currency manipulation, to look 176 00:09:48,160 --> 00:09:50,079 Speaker 7: at market protection, to look at all of these other 177 00:09:50,160 --> 00:09:52,760 Speaker 7: things that is likely to bring on the wave of 178 00:09:52,840 --> 00:09:56,880 Speaker 7: tariffs again, maybe you know, not at the sixty or 179 00:09:56,880 --> 00:09:59,920 Speaker 7: one hundred percent level that were talked about during the campaign, 180 00:10:00,600 --> 00:10:05,640 Speaker 7: but really focused on countries where there is a trade imbalance, 181 00:10:05,679 --> 00:10:08,080 Speaker 7: a bilateral deficit. Of the President is clearly focused on, 182 00:10:08,160 --> 00:10:12,360 Speaker 7: even the most economists are not so much, and that 183 00:10:12,440 --> 00:10:13,960 Speaker 7: those are the ones that I think we're gonna have 184 00:10:13,960 --> 00:10:14,720 Speaker 7: to watch over time. 185 00:10:15,360 --> 00:10:17,960 Speaker 2: I should point out that Scott Bessant has won a 186 00:10:18,000 --> 00:10:20,480 Speaker 2: Senate Finance Committee backing for Treasury. 187 00:10:20,760 --> 00:10:22,440 Speaker 8: A secretary job will of course. 188 00:10:22,360 --> 00:10:24,800 Speaker 2: Keep you updated in any one of those headlines as 189 00:10:24,840 --> 00:10:27,880 Speaker 2: they continue to come across. Chris Stang on that clearly 190 00:10:27,960 --> 00:10:31,400 Speaker 2: what happens to Treasury and issuance will have very dramatic 191 00:10:31,440 --> 00:10:35,280 Speaker 2: effects on the Treasury curve particularly. Also, many factor in 192 00:10:35,720 --> 00:10:38,880 Speaker 2: the debt ceiling. What are you telling your clients about that? 193 00:10:40,520 --> 00:10:43,120 Speaker 7: Well, we've of course got no word on any of 194 00:10:43,120 --> 00:10:45,959 Speaker 7: that from the from the new president in the last 195 00:10:46,000 --> 00:10:48,120 Speaker 7: in last twenty four hours in terms of what he 196 00:10:48,160 --> 00:10:52,600 Speaker 7: may have in mind for debt's deficits and debt limits. 197 00:10:53,120 --> 00:10:55,160 Speaker 7: I think again, this is going to be something that 198 00:10:55,280 --> 00:10:58,400 Speaker 7: causes a lot of near term anxiety, but ultimately at 199 00:10:58,400 --> 00:11:02,560 Speaker 7: the at the eleventh, twelfth or maybe thirteenth hour gets 200 00:11:02,600 --> 00:11:07,040 Speaker 7: resolved in terms of both the debt limit and you know, 201 00:11:07,840 --> 00:11:11,559 Speaker 7: keeping the government funded. I think we're all expecting there 202 00:11:11,600 --> 00:11:15,600 Speaker 7: to be some kinds of tax cuts, probably, you know, 203 00:11:16,040 --> 00:11:20,200 Speaker 7: not much to close the deficit, just because no matter 204 00:11:20,240 --> 00:11:21,880 Speaker 7: what the president wants, there just a whole lot of 205 00:11:21,920 --> 00:11:25,000 Speaker 7: people in Congress who have, you know, an interest in 206 00:11:25,040 --> 00:11:27,480 Speaker 7: some sort of spending program and those are very hard 207 00:11:27,480 --> 00:11:29,920 Speaker 7: to close. You know, it's very narrow majority of the 208 00:11:29,960 --> 00:11:34,120 Speaker 7: Speaker Johnson has there. So I think not a lot 209 00:11:34,160 --> 00:11:36,480 Speaker 7: of change, not a lot of change there in the 210 00:11:36,800 --> 00:11:37,640 Speaker 7: budget trajectory. 211 00:11:38,520 --> 00:11:40,880 Speaker 4: Chris, what do you think the president's policy will likely 212 00:11:40,880 --> 00:11:46,160 Speaker 4: be as it relates to illegal immigrants, maybe returning some 213 00:11:46,800 --> 00:11:49,400 Speaker 4: people back to their country of origin. How do you 214 00:11:49,440 --> 00:11:52,080 Speaker 4: think that might play out, because that was certainly, if 215 00:11:52,080 --> 00:11:55,600 Speaker 4: not the biggest, one of the biggest topics in the campaigns. 216 00:11:57,120 --> 00:11:58,920 Speaker 7: I think it was, and I think we'll see some 217 00:11:59,080 --> 00:12:02,040 Speaker 7: very high profile while moves on that front. You're already 218 00:12:02,040 --> 00:12:04,880 Speaker 7: seeing some of it in terms of the executive orders, 219 00:12:05,600 --> 00:12:08,280 Speaker 7: the emergency declared on the border, the return to Mexico 220 00:12:08,320 --> 00:12:12,040 Speaker 7: policy being put back into place. I wonder, though, how 221 00:12:12,320 --> 00:12:17,800 Speaker 7: much tolerance voters and Americans will have for a lot 222 00:12:17,840 --> 00:12:23,480 Speaker 7: of disruption to law abiding citis, law abiding immigrants in 223 00:12:23,520 --> 00:12:27,000 Speaker 7: this country, whether they are documented or undodocumented, how much 224 00:12:27,320 --> 00:12:30,800 Speaker 7: disruption they will they will tolerate. You know, there are 225 00:12:30,880 --> 00:12:34,800 Speaker 7: estimates of about eight to ten million undocumented Americans, some 226 00:12:34,880 --> 00:12:38,280 Speaker 7: even higher estimates than that. It's really hard to see, 227 00:12:38,400 --> 00:12:42,160 Speaker 7: you know, that number of people being removed from the 228 00:12:42,200 --> 00:12:45,599 Speaker 7: country physically. So I think you're going to see a 229 00:12:45,640 --> 00:12:50,559 Speaker 7: lot of drama around it and in the next few months, 230 00:12:50,640 --> 00:12:53,679 Speaker 7: but maybe not so much to move the at least 231 00:12:53,720 --> 00:12:55,200 Speaker 7: the economic needle in terms. 232 00:12:55,080 --> 00:12:55,760 Speaker 6: Of the labor force. 233 00:12:56,679 --> 00:12:58,520 Speaker 2: Is there any sector, Chris, before you let you go 234 00:12:59,080 --> 00:13:02,200 Speaker 2: that feels really, really really not in a good place. 235 00:13:02,280 --> 00:13:03,839 Speaker 2: And I'm just kind of setting you up to say 236 00:13:03,880 --> 00:13:05,520 Speaker 2: offshore win, but doesn't have to be that. 237 00:13:05,559 --> 00:13:06,880 Speaker 6: It can pretty much be anything. 238 00:13:07,920 --> 00:13:09,800 Speaker 7: Well, you can start with offshore win you can start 239 00:13:09,800 --> 00:13:14,160 Speaker 7: with anything that's related to renewables. You can go on 240 00:13:14,320 --> 00:13:17,480 Speaker 7: to sort of, you know, anything that relies heavily on 241 00:13:17,600 --> 00:13:22,319 Speaker 7: a single source of imports from China, and then you know, 242 00:13:22,800 --> 00:13:25,360 Speaker 7: a lot of costs are going to go up. Whether 243 00:13:25,480 --> 00:13:28,480 Speaker 7: you either have a customer living across the border or 244 00:13:28,480 --> 00:13:31,200 Speaker 7: a supplier living across the border. You know it's going 245 00:13:31,280 --> 00:13:33,640 Speaker 7: to be more and more difficult to operate in an 246 00:13:33,640 --> 00:13:37,240 Speaker 7: international footprint than it was before. So there are some 247 00:13:37,360 --> 00:13:39,920 Speaker 7: key pain points initially, as you point out, but I 248 00:13:39,920 --> 00:13:42,640 Speaker 7: think more broadly speaking, you know these costs are going 249 00:13:42,679 --> 00:13:43,080 Speaker 7: to rise. 250 00:13:43,880 --> 00:13:45,680 Speaker 4: Chris, thanks so much for joining us. Really appreciated. 251 00:13:45,720 --> 00:13:46,400 Speaker 6: Christopher Smart. 252 00:13:46,520 --> 00:13:49,360 Speaker 4: He's a managing partner at our Growth Group, former Special 253 00:13:49,400 --> 00:13:52,560 Speaker 4: Assistant to the President for International economics. Giving us the 254 00:13:52,679 --> 00:13:55,400 Speaker 4: latest on some of these very very early hours of 255 00:13:55,440 --> 00:13:59,199 Speaker 4: the Trump administration. Here day two of his administration, staying 256 00:13:59,240 --> 00:14:01,960 Speaker 4: on top of some of the discussions around terrors and 257 00:14:02,080 --> 00:14:06,720 Speaker 4: other economic policies that may emanate from this new administration. 258 00:14:08,480 --> 00:14:12,199 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us Live 259 00:14:12,280 --> 00:14:15,360 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 260 00:14:15,360 --> 00:14:18,679 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 261 00:14:18,720 --> 00:14:21,840 Speaker 1: you get your podcasts, or watch us live on YouTube. 262 00:14:22,880 --> 00:14:25,120 Speaker 2: Alex Youl here alongside Paul Sweeney. This is the Bloomberg 263 00:14:25,160 --> 00:14:27,760 Speaker 2: Intelligence Radio, and we are broadcasting to live from our 264 00:14:27,800 --> 00:14:32,160 Speaker 2: interactive Broker studio right here in the very cold midtown Manhattan. 265 00:14:32,760 --> 00:14:35,320 Speaker 2: I did see someone running this morning in fourteen degrees, 266 00:14:35,360 --> 00:14:37,040 Speaker 2: which was a whole bunch of crazy. I don't know 267 00:14:37,080 --> 00:14:39,440 Speaker 2: how you do that, but apparently that's something that we do. 268 00:14:40,240 --> 00:14:40,520 Speaker 7: Fortunate. 269 00:14:41,200 --> 00:14:41,640 Speaker 2: Yeah, in the. 270 00:14:41,560 --> 00:14:43,040 Speaker 6: Studio, it's called Anyway. 271 00:14:43,040 --> 00:14:46,040 Speaker 2: We were just talking about how to understand President Trump's 272 00:14:46,040 --> 00:14:47,720 Speaker 2: policies when it comes to the markets. 273 00:14:47,760 --> 00:14:49,000 Speaker 6: Now, let's kind of pick apart. 274 00:14:49,320 --> 00:14:52,560 Speaker 2: What are those most important policies, what's the noise, what's 275 00:14:52,600 --> 00:14:55,240 Speaker 2: the reality? Joining us now is Jennifer Lawless, Professor at 276 00:14:55,360 --> 00:14:59,120 Speaker 2: University of Virginia. We've had less than twenty four hours 277 00:14:59,320 --> 00:15:02,320 Speaker 2: to dissect President Trump's second term. There was so much 278 00:15:02,360 --> 00:15:05,400 Speaker 2: coming out. What stood out the most. 279 00:15:05,120 --> 00:15:09,080 Speaker 8: To you, Well, yesterday really was a whirlwind. 280 00:15:09,320 --> 00:15:12,440 Speaker 9: What was typical was that when a new president comes in, 281 00:15:12,800 --> 00:15:16,000 Speaker 9: he typically issues executive orders, undoing a lot of what 282 00:15:16,040 --> 00:15:17,600 Speaker 9: the previous administration did. 283 00:15:18,040 --> 00:15:20,840 Speaker 8: So those kinds of things are pretty standard. 284 00:15:20,880 --> 00:15:24,800 Speaker 9: What struck me yesterday was this speed with which Donald 285 00:15:24,800 --> 00:15:28,320 Speaker 9: Trump is willing to follow through on some campaign promises 286 00:15:28,680 --> 00:15:33,240 Speaker 9: that didn't matter that much to most people. So, for example, 287 00:15:33,320 --> 00:15:35,920 Speaker 9: he used both his inauguration address and the power of 288 00:15:35,960 --> 00:15:39,160 Speaker 9: the pen to say that, moving forward, the federal government 289 00:15:39,240 --> 00:15:43,360 Speaker 9: only recognizes two genders. He moved forward saying that the 290 00:15:43,360 --> 00:15:46,360 Speaker 9: federal government is going to require a hiring freeze for 291 00:15:46,400 --> 00:15:49,480 Speaker 9: all open positions and that people working for the federal 292 00:15:49,480 --> 00:15:52,000 Speaker 9: government have to return to work. These are not the 293 00:15:52,040 --> 00:15:55,360 Speaker 9: reasons that people elected Donald Trump, but they're the quick 294 00:15:55,400 --> 00:15:58,000 Speaker 9: things that he can do on day one. 295 00:15:57,640 --> 00:16:00,840 Speaker 4: Jenifer, can he talk to us about presidential It seems 296 00:16:00,880 --> 00:16:03,040 Speaker 4: like the last days of the Biden administration and now 297 00:16:03,040 --> 00:16:06,880 Speaker 4: the first day that Trump administration, these presidents have just 298 00:16:07,120 --> 00:16:09,720 Speaker 4: gone to extraordinary lengths in terms of the number of 299 00:16:09,760 --> 00:16:12,960 Speaker 4: pardons and the severity and the types of pardons. Has 300 00:16:12,960 --> 00:16:15,200 Speaker 4: this always been a part of the American presidency? 301 00:16:15,200 --> 00:16:15,800 Speaker 6: What's happening? 302 00:16:16,960 --> 00:16:17,400 Speaker 8: It has not. 303 00:16:17,600 --> 00:16:20,960 Speaker 9: There have always been examples of pardons being issued. Sometimes 304 00:16:21,000 --> 00:16:24,720 Speaker 9: it's to political friends, sometimes it's to people who were 305 00:16:24,760 --> 00:16:29,120 Speaker 9: serving sentences that are no longer mainstream kinds of sentences 306 00:16:29,160 --> 00:16:32,280 Speaker 9: because policy has evolved over time. What we've seen here 307 00:16:32,440 --> 00:16:35,200 Speaker 9: from both the Biden and the Trump teams in terms 308 00:16:35,200 --> 00:16:38,120 Speaker 9: of these pardons, are really a response to Donald Trump. 309 00:16:38,680 --> 00:16:40,800 Speaker 9: Over the course of the last four years, he's made 310 00:16:40,840 --> 00:16:44,080 Speaker 9: it clear that he thinks he's been politically persecuted and 311 00:16:44,120 --> 00:16:46,160 Speaker 9: that as a result, one of the first things he's 312 00:16:46,240 --> 00:16:51,080 Speaker 9: going to do as president is seek retribution, and we've 313 00:16:51,160 --> 00:16:53,880 Speaker 9: saw him yesterday continue to talk about that. We saw 314 00:16:53,960 --> 00:16:57,160 Speaker 9: him pardon most of the January sixth insurrectionists. 315 00:16:57,680 --> 00:16:59,680 Speaker 8: The Biden pardons are related. 316 00:16:59,320 --> 00:17:01,800 Speaker 9: To all of this two though, because by pardoning members 317 00:17:01,800 --> 00:17:04,880 Speaker 9: of his family and the January sixth committee, for example, 318 00:17:05,160 --> 00:17:08,240 Speaker 9: what Biden was trying to do was inoculate those people 319 00:17:08,280 --> 00:17:13,240 Speaker 9: from Trump's retribution. So it's unusual, but Biden and Trump's 320 00:17:13,240 --> 00:17:14,960 Speaker 9: behavior is related to each other. 321 00:17:16,080 --> 00:17:18,480 Speaker 2: There was also some narratives that came out of the 322 00:17:18,520 --> 00:17:22,800 Speaker 2: last twenty four hours from analysts saying that it's hard 323 00:17:22,800 --> 00:17:25,040 Speaker 2: to know which Trump we are going to see, like 324 00:17:25,080 --> 00:17:27,720 Speaker 2: are we going to see the Trump that spoke amongst 325 00:17:27,720 --> 00:17:31,040 Speaker 2: his peers right after he was inaugurated That seemed a 326 00:17:31,080 --> 00:17:33,320 Speaker 2: much more measured approach to policy and a much more 327 00:17:33,359 --> 00:17:36,720 Speaker 2: politically savvy individual. Or do you see the one that 328 00:17:36,840 --> 00:17:39,080 Speaker 2: was talking to his supporters later that night that seemed 329 00:17:39,160 --> 00:17:42,760 Speaker 2: much more kind of out for blood and retribution, and 330 00:17:42,800 --> 00:17:46,360 Speaker 2: we got executive orders and pardons relating to both. How 331 00:17:46,400 --> 00:17:49,000 Speaker 2: does that evolve you think over the next coming weeks. 332 00:17:50,200 --> 00:17:52,680 Speaker 9: I think we're going to see both Donald Trump's We 333 00:17:52,720 --> 00:17:55,639 Speaker 9: know that he's happiest when he's talking to his supporters, 334 00:17:55,680 --> 00:17:58,600 Speaker 9: when he's in campaign mode and when he's generating and 335 00:17:58,640 --> 00:18:01,360 Speaker 9: getting up that kind of populace sentiment that got him elected. 336 00:18:01,800 --> 00:18:02,879 Speaker 8: But he's also aware of. 337 00:18:02,880 --> 00:18:05,360 Speaker 9: The fact that in order to pass any of his 338 00:18:05,480 --> 00:18:09,520 Speaker 9: legislative initiatives, he needs Congress on board. So I think 339 00:18:09,560 --> 00:18:12,440 Speaker 9: he'll try to thread that needle. But when push comes 340 00:18:12,440 --> 00:18:17,080 Speaker 9: to shove, we've now had nine solid years of evidence 341 00:18:17,160 --> 00:18:20,840 Speaker 9: that he ultimately prefers the campaign trail style. 342 00:18:21,840 --> 00:18:23,560 Speaker 4: Jennifer, what do you think in terms of some of 343 00:18:23,600 --> 00:18:26,560 Speaker 4: these nominations to cabinet positions, which ones you think will 344 00:18:26,560 --> 00:18:27,280 Speaker 4: be problematic? 345 00:18:28,840 --> 00:18:30,760 Speaker 9: Well, let me first say that I think the Marco 346 00:18:30,880 --> 00:18:35,240 Speaker 9: Rubio nomination getting through so quickly with unanimous Senate approval 347 00:18:35,880 --> 00:18:37,800 Speaker 9: was a smart move on the part of the Democrats. 348 00:18:37,880 --> 00:18:40,679 Speaker 9: So that when they do vote against other nominees. I 349 00:18:40,680 --> 00:18:45,360 Speaker 9: think problematic will be people like Pete Hegseth, like Telsea Gabbert, 350 00:18:45,440 --> 00:18:46,000 Speaker 9: like Robert F. 351 00:18:46,080 --> 00:18:46,760 Speaker 8: Kennedy Junior. 352 00:18:47,400 --> 00:18:49,560 Speaker 9: That the Republicans won't be in a position where they 353 00:18:49,560 --> 00:18:53,080 Speaker 9: can simply say that the Democrats are obstructing everybody. But 354 00:18:53,359 --> 00:18:55,760 Speaker 9: you know, Donald Trump knew that he was putting forward 355 00:18:55,840 --> 00:18:59,200 Speaker 9: controversial names. He was doing it as a signal both 356 00:18:59,240 --> 00:19:02,600 Speaker 9: to his base to Republicans in Congress that he is 357 00:19:02,680 --> 00:19:04,920 Speaker 9: going to usher in a new kind of government. 358 00:19:05,400 --> 00:19:06,640 Speaker 8: But I don't think what he. 359 00:19:06,640 --> 00:19:11,840 Speaker 9: Realized is that Senators do take quite seriously the nomination process, 360 00:19:11,880 --> 00:19:14,760 Speaker 9: the confirmation process, and the experience of a lot of 361 00:19:14,760 --> 00:19:17,040 Speaker 9: these people. So you know, I think a lot of 362 00:19:17,040 --> 00:19:20,080 Speaker 9: them will get through, especially the lower profile ones. But Gabert, 363 00:19:20,080 --> 00:19:23,160 Speaker 9: Hegsteth and Kennedy. My bet is we'll face some tough 364 00:19:23,200 --> 00:19:23,760 Speaker 9: times ahead. 365 00:19:24,320 --> 00:19:26,840 Speaker 2: Talk to us about staffing currently in the White House, 366 00:19:26,840 --> 00:19:29,760 Speaker 2: his White House chief of staff really in part, I 367 00:19:29,760 --> 00:19:32,680 Speaker 2: mean drove through that election, that reelection campaign. 368 00:19:33,359 --> 00:19:34,280 Speaker 8: What do we expect there. 369 00:19:36,080 --> 00:19:38,720 Speaker 9: I think we'll see what we have generally seen with 370 00:19:38,840 --> 00:19:41,199 Speaker 9: chiefs of staff early on, and then it'll just be 371 00:19:41,240 --> 00:19:44,640 Speaker 9: a question of how long she can last. You know, 372 00:19:45,000 --> 00:19:49,160 Speaker 9: we've seen this movie before, and people want to sort 373 00:19:49,200 --> 00:19:52,840 Speaker 9: of protect Donald Trump from people that might otherwise want 374 00:19:52,840 --> 00:19:55,080 Speaker 9: to get into the Oval office and influence him, who 375 00:19:55,160 --> 00:19:58,680 Speaker 9: might want to move him away from what the administration's 376 00:19:58,720 --> 00:20:01,760 Speaker 9: agenda is, might want to from away from sort of 377 00:20:01,760 --> 00:20:04,280 Speaker 9: the normal way of dealing with Congress. She has her 378 00:20:04,320 --> 00:20:06,280 Speaker 9: work cut out for her, and at some point Donald 379 00:20:06,320 --> 00:20:08,400 Speaker 9: Trump will probably get frustrated and replace. 380 00:20:08,119 --> 00:20:09,480 Speaker 8: Her, Jennifer. 381 00:20:09,480 --> 00:20:12,760 Speaker 4: How about Ukraine, that seems to be from an international perspective, 382 00:20:12,760 --> 00:20:14,880 Speaker 4: one of the key areas for President Trump to act. 383 00:20:14,960 --> 00:20:19,560 Speaker 9: What do you expect, Well, based on what President Zelenski 384 00:20:19,600 --> 00:20:23,080 Speaker 9: has said, you know, he's hopeful that the United States 385 00:20:23,080 --> 00:20:27,280 Speaker 9: will continue to provide funding and will continue. 386 00:20:26,640 --> 00:20:29,040 Speaker 8: To you know, allow Ukraine to exist. 387 00:20:29,119 --> 00:20:32,320 Speaker 9: But based on Donald Trump's relationship with Putin and his 388 00:20:32,480 --> 00:20:36,040 Speaker 9: general view of you know, world powers right now and 389 00:20:36,119 --> 00:20:38,879 Speaker 9: mentioning things like invading Greenland and taking back the panic 390 00:20:38,920 --> 00:20:41,760 Speaker 9: from the canal, if I were the Ukraine or supporter 391 00:20:41,880 --> 00:20:46,320 Speaker 9: of people in Ukraine, I'd be concerned because the talk 392 00:20:46,440 --> 00:20:49,240 Speaker 9: that's coming out of Donald Trump is more consistent with 393 00:20:49,240 --> 00:20:50,880 Speaker 9: Putin's agenda than Zelensky's. 394 00:20:52,640 --> 00:20:55,080 Speaker 2: What are you watching for next so as we reap 395 00:20:55,200 --> 00:20:57,600 Speaker 2: up the segment, like what's the number one thing on 396 00:20:57,680 --> 00:21:00,400 Speaker 2: your radar right now, Jennifer, I. 397 00:21:00,320 --> 00:21:02,520 Speaker 9: Would say that over the course of the next week, 398 00:21:02,760 --> 00:21:06,560 Speaker 9: the biggest thing will be whether the Senate is willing 399 00:21:06,600 --> 00:21:10,240 Speaker 9: to just accept everything that Donald Trump pushes forward when 400 00:21:10,240 --> 00:21:13,120 Speaker 9: it comes to these nominees. Are they going to provide 401 00:21:13,160 --> 00:21:15,040 Speaker 9: the check that it seems. 402 00:21:14,720 --> 00:21:17,320 Speaker 8: Like they might be positioned too. If they don't, and 403 00:21:17,359 --> 00:21:18,000 Speaker 8: they don't. 404 00:21:17,760 --> 00:21:19,840 Speaker 9: Do it now, then He's basically going to be able 405 00:21:19,840 --> 00:21:21,480 Speaker 9: to get whatever he wants for at least the next 406 00:21:21,480 --> 00:21:22,000 Speaker 9: two years. 407 00:21:22,200 --> 00:21:23,479 Speaker 8: Got it really interesting? 408 00:21:23,520 --> 00:21:25,720 Speaker 2: All right, Jennifer, thanks so much, Really appreciate it. Jennifer 409 00:21:25,760 --> 00:21:28,960 Speaker 2: Lola's professor at University of Virginia. 410 00:21:30,040 --> 00:21:33,760 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 411 00:21:33,840 --> 00:21:36,879 Speaker 1: weekdays at ten am Eastern on Apple, Corplay and Android 412 00:21:36,920 --> 00:21:40,240 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 413 00:21:40,280 --> 00:21:43,840 Speaker 1: you get your podcasts, or watch us live on YouTube. 414 00:21:44,440 --> 00:21:46,000 Speaker 8: Let's go now to the policy part. 415 00:21:46,800 --> 00:21:49,080 Speaker 2: I love what Paul was saying about the r between 416 00:21:49,119 --> 00:21:52,760 Speaker 2: EV's between Tesla and everybody else that on a relative basis, 417 00:21:52,760 --> 00:21:56,080 Speaker 2: it's less bad for Tesla. Ed Mills, Washington Policy analyst 418 00:21:56,119 --> 00:21:59,920 Speaker 2: and managing director over Raymond James joins us, Hey, Ede, 419 00:22:00,240 --> 00:22:01,960 Speaker 2: just on that point, what do you make of the 420 00:22:01,960 --> 00:22:03,679 Speaker 2: fact you got Tesla down, like you know. 421 00:22:03,960 --> 00:22:04,680 Speaker 8: Three percent? 422 00:22:04,880 --> 00:22:07,520 Speaker 2: You have the EV mandate sort of being rolled back 423 00:22:07,560 --> 00:22:10,359 Speaker 2: by President Trump. What do you make of that part 424 00:22:10,359 --> 00:22:11,760 Speaker 2: of the policy and its impact. 425 00:22:13,200 --> 00:22:15,480 Speaker 5: Yeah, Alex, it's a good question. I don't think there's 426 00:22:15,520 --> 00:22:17,680 Speaker 5: going to be a lot of policies that are enacted 427 00:22:18,040 --> 00:22:22,080 Speaker 5: that are not favorable to Elon Musk. So there is 428 00:22:22,119 --> 00:22:24,560 Speaker 5: the EV mandate that's going away. There will be a 429 00:22:24,600 --> 00:22:28,160 Speaker 5: conversation when Congress deals with tax cuts if the tax. 430 00:22:28,000 --> 00:22:28,840 Speaker 6: Credits go away. 431 00:22:29,400 --> 00:22:32,080 Speaker 5: But I do think that if Elon steps in and 432 00:22:32,119 --> 00:22:34,600 Speaker 5: says this is important to me, they stay. Or if 433 00:22:34,600 --> 00:22:37,960 Speaker 5: he says, look, I actually have a better position visa 434 00:22:38,040 --> 00:22:41,399 Speaker 5: the everyone else. He's going to let the market decide 435 00:22:41,560 --> 00:22:45,120 Speaker 5: and be able to compete there. So I don't view 436 00:22:45,160 --> 00:22:48,080 Speaker 5: this as a huge issue. Three percent move in Tesla 437 00:22:48,160 --> 00:22:49,879 Speaker 5: is not a huge move. And you look at some 438 00:22:49,920 --> 00:22:53,160 Speaker 5: of the moves that have occurred since the election, those 439 00:22:53,160 --> 00:22:54,440 Speaker 5: are the moves that matter to him. 440 00:22:55,080 --> 00:22:57,720 Speaker 4: And what did your take away from day one? Yesterday? 441 00:22:57,920 --> 00:23:01,160 Speaker 4: Very busy day for this administy for this new President. 442 00:23:01,400 --> 00:23:03,240 Speaker 4: What were some of the things that kind of stood 443 00:23:03,280 --> 00:23:03,879 Speaker 4: at it to you? 444 00:23:04,520 --> 00:23:07,280 Speaker 5: Yeah, Paul, I think that the interesting thing to me 445 00:23:07,400 --> 00:23:09,760 Speaker 5: is when I've talked to folks in and around the 446 00:23:09,800 --> 00:23:13,240 Speaker 5: Trump administration, they are insisting that they are going to 447 00:23:13,320 --> 00:23:15,320 Speaker 5: go much faster in Trump two point zero than they 448 00:23:15,359 --> 00:23:17,879 Speaker 5: did in Trump one point zero. And so we've had 449 00:23:17,920 --> 00:23:20,159 Speaker 5: a lot of questions about tarifs and that they didn't 450 00:23:20,160 --> 00:23:23,479 Speaker 5: go in on day one. Don't have that as your 451 00:23:23,520 --> 00:23:27,000 Speaker 5: takeaway that the tariffs are not coming. They are absolutely coming. 452 00:23:27,080 --> 00:23:29,000 Speaker 5: They're going to be aggressive, and they are going to 453 00:23:29,080 --> 00:23:32,120 Speaker 5: come this year. In Trump one point zero, he spent 454 00:23:32,240 --> 00:23:35,119 Speaker 5: three years negotiating with China before he got a Phase 455 00:23:35,160 --> 00:23:39,000 Speaker 5: one trade deal that was never implemented. So China very 456 00:23:39,080 --> 00:23:43,680 Speaker 5: much on that list. Canada, Mexico. Real issues there on energy, 457 00:23:44,000 --> 00:23:48,160 Speaker 5: big unleashing of opportunities and on energy. It's not about 458 00:23:48,200 --> 00:23:50,680 Speaker 5: just oil and natural gas, but there was a lot 459 00:23:50,720 --> 00:23:54,680 Speaker 5: of conversations about critical minerals as well as rare earth. 460 00:23:54,720 --> 00:23:59,040 Speaker 5: Minerals are definition of energies expanding. Those are opportunities to 461 00:23:59,080 --> 00:24:00,920 Speaker 5: rebuild supply chain here in the United. 462 00:24:00,720 --> 00:24:03,200 Speaker 2: States, right as long as you're not offshore with because 463 00:24:03,240 --> 00:24:05,960 Speaker 2: that is Forbotten and that feels like that. It's definitely 464 00:24:06,040 --> 00:24:08,040 Speaker 2: not nothing's going to come from that anytime soon from 465 00:24:08,080 --> 00:24:10,760 Speaker 2: the Trump administration. Which you talk about critical minerals though, 466 00:24:11,320 --> 00:24:13,320 Speaker 2: which makes the Canada thing even more of a head 467 00:24:13,320 --> 00:24:16,040 Speaker 2: scratcher because they have all that stuff, even the non 468 00:24:16,080 --> 00:24:18,960 Speaker 2: critical minerals like a rare earth, they still have the 469 00:24:19,000 --> 00:24:20,480 Speaker 2: stuff that we need to build the things. 470 00:24:21,520 --> 00:24:23,320 Speaker 6: Well, I was in Canada all last week. 471 00:24:23,359 --> 00:24:26,200 Speaker 5: I was in Montreal, Toronto talking to investor after investor, 472 00:24:26,720 --> 00:24:29,320 Speaker 5: and the thing that they focused on, and what I've 473 00:24:29,320 --> 00:24:31,720 Speaker 5: been talking to clients at Raymond James about is if 474 00:24:31,720 --> 00:24:34,320 Speaker 5: you have something that Donald Trump wants, that's part of 475 00:24:34,320 --> 00:24:36,840 Speaker 5: the solution. So Trump is going to put tariffs on 476 00:24:37,359 --> 00:24:39,960 Speaker 5: but a deal will be struck. And if we expand 477 00:24:39,960 --> 00:24:42,840 Speaker 5: out the definition of energy to include things that you 478 00:24:43,040 --> 00:24:46,960 Speaker 5: own or you have as a natural resource, you should 479 00:24:46,960 --> 00:24:49,720 Speaker 5: get excited about that. So a deal with Canada that 480 00:24:49,800 --> 00:24:53,840 Speaker 5: includes critical minerals and rare earth mineral extraction refinement in 481 00:24:53,960 --> 00:24:57,399 Speaker 5: building a supply chain that is de risk from China 482 00:24:57,720 --> 00:25:02,160 Speaker 5: is an opportunity, not necessarily a risk alex for Canada 483 00:25:02,520 --> 00:25:03,760 Speaker 5: and other allies. 484 00:25:03,960 --> 00:25:06,959 Speaker 4: Interesting, Hey, Ed, talk to us about how you think 485 00:25:07,000 --> 00:25:10,440 Speaker 4: this immigration and border security policies will evolve over time. 486 00:25:10,480 --> 00:25:13,239 Speaker 4: Obviously a big, big part of the campaign, a very 487 00:25:13,240 --> 00:25:16,240 Speaker 4: big issue for many American voters. But boy, if you 488 00:25:16,240 --> 00:25:19,879 Speaker 4: think about the economic impact, where do these migrant workers go? 489 00:25:19,960 --> 00:25:20,520 Speaker 6: Will they go to? 490 00:25:20,680 --> 00:25:23,880 Speaker 4: Agricultural and construction? Are the two big areas as well 491 00:25:23,880 --> 00:25:26,840 Speaker 4: as hospitality. But those two big areas agricultural and construction, 492 00:25:27,480 --> 00:25:28,400 Speaker 4: that could be a problem. 493 00:25:28,720 --> 00:25:29,920 Speaker 6: How do you think that's going to play out? 494 00:25:30,800 --> 00:25:32,680 Speaker 5: Paul, and I think you're right to point this out 495 00:25:32,720 --> 00:25:34,840 Speaker 5: because when we think about some of the policies that 496 00:25:34,880 --> 00:25:38,840 Speaker 5: can be market positive or market neutral negative, the immigration 497 00:25:38,960 --> 00:25:42,520 Speaker 5: executive orders, probably for clients at Raymond James have been 498 00:25:42,680 --> 00:25:45,159 Speaker 5: the area where we've gotten the most concerned. Is this 499 00:25:45,240 --> 00:25:47,720 Speaker 5: going to lead to labor market shortages? Is this going 500 00:25:47,760 --> 00:25:51,679 Speaker 5: to be read inflationary? We saw labor shortages as we 501 00:25:51,760 --> 00:25:54,280 Speaker 5: came out of COVID that had a real market impact. 502 00:25:54,600 --> 00:25:56,320 Speaker 5: I think this is an area where we're going to 503 00:25:56,320 --> 00:25:59,960 Speaker 5: get headlines that are very aggressive, but the follow through actions, 504 00:26:00,040 --> 00:26:02,760 Speaker 5: I guess I would take the under in terms of 505 00:26:02,800 --> 00:26:06,040 Speaker 5: the actual number of immigrants that are deported from the 506 00:26:06,119 --> 00:26:07,560 Speaker 5: United States as a result of this. 507 00:26:07,840 --> 00:26:09,360 Speaker 6: I think they're going to be very flashy. 508 00:26:09,560 --> 00:26:11,320 Speaker 5: They're going to have a signing of the Lake and 509 00:26:11,400 --> 00:26:14,359 Speaker 5: Riley Act within the next day or two. It's going 510 00:26:14,400 --> 00:26:16,600 Speaker 5: to be the first bill that Donald Trump signs into law. 511 00:26:17,000 --> 00:26:20,520 Speaker 5: There will be deportations, but the first term of Donald 512 00:26:20,560 --> 00:26:24,520 Speaker 5: Trump had fewer deportations than the second term of Barack Obama. 513 00:26:24,880 --> 00:26:28,000 Speaker 5: So it is a conversation about there will be folks 514 00:26:28,040 --> 00:26:31,480 Speaker 5: that are deported, but if it's folks with jobs, I 515 00:26:31,480 --> 00:26:34,280 Speaker 5: think it's going to be less likely that there is 516 00:26:34,320 --> 00:26:36,600 Speaker 5: going to be an actual labor market impact. I could 517 00:26:36,640 --> 00:26:38,080 Speaker 5: be wrong, but that's what I'm tracking. 518 00:26:38,600 --> 00:26:41,520 Speaker 2: We also know today in the next few hours that 519 00:26:41,640 --> 00:26:44,879 Speaker 2: there may be quote, a massive announcement of things. So 520 00:26:45,000 --> 00:26:47,840 Speaker 2: President Trump will start his first day in full in 521 00:26:47,880 --> 00:26:51,359 Speaker 2: the office. He's a bunch of high level meetings. Literally 522 00:26:51,400 --> 00:26:54,840 Speaker 2: in the afternoon, he's supposed to meet with two congressional partners, 523 00:26:54,880 --> 00:26:57,800 Speaker 2: House Speaker Mike Johnson and Senate Majority Leader John Thune. 524 00:26:57,880 --> 00:27:00,280 Speaker 2: And apparently they're going to discuss the legislative agenda and 525 00:27:00,320 --> 00:27:04,639 Speaker 2: the approach to passing one or two reconcilient reconciliation bills. 526 00:27:04,640 --> 00:27:09,560 Speaker 2: This is according to people familiar with the matter. Okay, 527 00:27:09,640 --> 00:27:13,240 Speaker 2: what does that mean? Like what would a massive announcement 528 00:27:13,359 --> 00:27:14,760 Speaker 2: mean with the three of them. 529 00:27:15,359 --> 00:27:17,520 Speaker 5: So I think if it is one big beautiful bill 530 00:27:17,560 --> 00:27:19,600 Speaker 5: as they've talked about, it is an extension of the 531 00:27:19,640 --> 00:27:23,960 Speaker 5: tax cuts, but it's also a package that is immigration funding, 532 00:27:24,400 --> 00:27:28,680 Speaker 5: defense funding, in permitting reform, under energy, and more leasing 533 00:27:28,960 --> 00:27:33,000 Speaker 5: than what was released yesterday through the executive orders. If 534 00:27:33,040 --> 00:27:37,639 Speaker 5: they want to do something quick, you separate the immigration, defense, 535 00:27:37,800 --> 00:27:40,440 Speaker 5: energy out of that. And what's really interesting there, Alex, 536 00:27:40,520 --> 00:27:43,399 Speaker 5: is that we've had this focus on DOZE and that 537 00:27:43,440 --> 00:27:47,399 Speaker 5: really impacted the defense contractors in government service contractors to 538 00:27:47,440 --> 00:27:49,480 Speaker 5: the extent that we could see one hundred to two 539 00:27:49,600 --> 00:27:53,200 Speaker 5: hundred billion dollars plus up in the defense budget this year. 540 00:27:53,400 --> 00:27:55,480 Speaker 5: And when you look at the executive order for DOSE, 541 00:27:55,760 --> 00:27:59,560 Speaker 5: they want a massive upgrade in it spend in systems 542 00:27:59,680 --> 00:28:02,720 Speaker 5: within the federal government for efficiency. That sounds like a 543 00:28:02,760 --> 00:28:06,440 Speaker 5: lot more spending than a lot of cuts from where 544 00:28:06,440 --> 00:28:10,000 Speaker 5: I sit. And on the tax cuts they absolutely get extended. 545 00:28:10,040 --> 00:28:13,040 Speaker 5: The big conversation right now in DC is can you 546 00:28:13,119 --> 00:28:16,440 Speaker 5: get a score that actually allows you to make them 547 00:28:16,520 --> 00:28:20,360 Speaker 5: permanent by just saying all the current policy. Just extending 548 00:28:20,359 --> 00:28:23,520 Speaker 5: that out is technically zero dollars because we're not making 549 00:28:23,640 --> 00:28:26,200 Speaker 5: changes that's not priced into this market. 550 00:28:27,080 --> 00:28:29,320 Speaker 4: So all right, we've got a bunch of issues that 551 00:28:29,440 --> 00:28:31,600 Speaker 4: you know, with the administration would like to get through. 552 00:28:31,880 --> 00:28:36,000 Speaker 4: The question, though, is, while the Republicans control both houses 553 00:28:36,000 --> 00:28:40,320 Speaker 4: of Congress, very very slight edge, is there in reality, 554 00:28:40,400 --> 00:28:44,240 Speaker 4: giving your experience their ed what percentage of the stuff 555 00:28:44,280 --> 00:28:45,720 Speaker 4: can they get done? Can they get some of the 556 00:28:45,800 --> 00:28:46,680 Speaker 4: hard stuff done? 557 00:28:46,720 --> 00:28:48,520 Speaker 6: Do you think so? 558 00:28:48,640 --> 00:28:50,760 Speaker 5: I think that the base case, Paul, is that extension 559 00:28:50,800 --> 00:28:54,880 Speaker 5: of the tax cuts, in adding something on that defense, immigration, 560 00:28:55,160 --> 00:28:58,080 Speaker 5: energy provisions. I think it is going to be very difficult. 561 00:28:58,160 --> 00:28:59,920 Speaker 5: I don't think we look at the majority in the 562 00:29:00,120 --> 00:29:04,720 Speaker 5: House and have any concept that that is not going 563 00:29:04,800 --> 00:29:08,400 Speaker 5: to be a fragile flower of consensus, very difficult to 564 00:29:08,480 --> 00:29:12,000 Speaker 5: hold together one or two votes and it all gets sunk. 565 00:29:12,720 --> 00:29:14,040 Speaker 6: A different way of thinking about it. 566 00:29:13,960 --> 00:29:18,040 Speaker 5: Though, is when you are the one or two individuals 567 00:29:18,280 --> 00:29:21,600 Speaker 5: that is standing in way of the Trump agenda, the 568 00:29:21,640 --> 00:29:25,320 Speaker 5: pressure on you is going to be so difficult to 569 00:29:25,440 --> 00:29:30,560 Speaker 5: vote no is to vote to get yourself unelected next term. 570 00:29:30,680 --> 00:29:33,920 Speaker 5: So the fact that so snarrow actually could be something 571 00:29:33,960 --> 00:29:36,000 Speaker 5: at the end of the day, the more you get 572 00:29:36,040 --> 00:29:38,960 Speaker 5: the Trump Agenda on the line to vote know on 573 00:29:39,080 --> 00:29:43,080 Speaker 5: that besides Massy, probably everyone is on board. 574 00:29:43,560 --> 00:29:46,520 Speaker 2: Interesting, right, so that would be a definite something to stomach. 575 00:29:46,560 --> 00:29:49,120 Speaker 2: And we were talking earlier to a professor at the 576 00:29:49,200 --> 00:29:53,160 Speaker 2: University of Virginia about how Congress deals with the confirmation 577 00:29:53,360 --> 00:29:56,400 Speaker 2: process of all of the nominees. Will also tell us 578 00:29:56,480 --> 00:29:59,479 Speaker 2: how willing Republicans may or may not be to go 579 00:29:59,560 --> 00:30:04,600 Speaker 2: against that agenda. What sector are you telling clients to 580 00:30:04,640 --> 00:30:05,760 Speaker 2: focus on the most, if. 581 00:30:05,680 --> 00:30:09,200 Speaker 5: You had to pick financials, I think we're going to 582 00:30:09,240 --> 00:30:14,320 Speaker 5: see massive consolidation, especially among smaller banks. We're going to 583 00:30:14,360 --> 00:30:17,000 Speaker 5: see a recision of some of the merger guidance that 584 00:30:17,080 --> 00:30:21,880 Speaker 5: went in just in September. We see a massive deregulatory 585 00:30:21,960 --> 00:30:25,240 Speaker 5: push something that really was under the radar. On Christmas Eve, 586 00:30:25,360 --> 00:30:28,640 Speaker 5: the banks sue to overturn the stress test that the 587 00:30:28,680 --> 00:30:31,960 Speaker 5: Federal Reserve does. See car If that gets overturned and 588 00:30:32,160 --> 00:30:36,560 Speaker 5: banks have more capital kind of freedom that they're not 589 00:30:36,800 --> 00:30:38,920 Speaker 5: worried that the Fed could come in in a year 590 00:30:38,960 --> 00:30:42,400 Speaker 5: from now and change that stress test and deny them 591 00:30:42,400 --> 00:30:45,640 Speaker 5: the ability to return shareholder capital, I think you get 592 00:30:45,680 --> 00:30:48,280 Speaker 5: a rerating in the banks. And one of the biggest 593 00:30:48,280 --> 00:30:50,720 Speaker 5: debates at Raymond James is there was a lot of 594 00:30:51,000 --> 00:30:54,320 Speaker 5: optimism in twenty seventeen and a lot of promises. What's 595 00:30:54,400 --> 00:30:57,320 Speaker 5: different this time in the fact that the Supreme Court 596 00:30:57,440 --> 00:31:01,280 Speaker 5: made several rulings in the last several years, especially last year, 597 00:31:01,720 --> 00:31:04,240 Speaker 5: just up ends what you can do on regulation and 598 00:31:04,240 --> 00:31:06,480 Speaker 5: Trump two point zero versus what you were able to 599 00:31:06,480 --> 00:31:08,160 Speaker 5: do in one point zero, So it's going to be 600 00:31:08,240 --> 00:31:10,960 Speaker 5: much more aggressive in those heavily regulated areas. I put 601 00:31:11,040 --> 00:31:13,480 Speaker 5: banks at the top of that as a keywinner. 602 00:31:13,600 --> 00:31:14,200 Speaker 9: Great stuff ed. 603 00:31:14,280 --> 00:31:15,760 Speaker 4: I'm sure we're gonna be talking to you a lot 604 00:31:15,960 --> 00:31:19,520 Speaker 4: going forward at Mills, Managing Director, Washington Policy Anaels for 605 00:31:19,720 --> 00:31:20,440 Speaker 4: Raymond and James. 606 00:31:21,040 --> 00:31:25,719 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 607 00:31:25,920 --> 00:31:29,360 Speaker 1: and anywhere else you get your podcasts. Listen live each 608 00:31:29,400 --> 00:31:33,160 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 609 00:31:33,280 --> 00:31:36,800 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 610 00:31:37,240 --> 00:31:40,320 Speaker 1: You can also watch us live every weekday on YouTube 611 00:31:40,560 --> 00:31:42,800 Speaker 1: and always on the Bloomberg terminal.