1 00:00:00,080 --> 00:00:10,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cocklay and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,080 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,560 --> 00:00:28,280 Speaker 2: The White House Press Secretary Caroline Lovitt, she said she 7 00:00:28,400 --> 00:00:31,200 Speaker 2: saw the reporting from moritters around a March first deadline, 8 00:00:31,200 --> 00:00:32,960 Speaker 2: the idea that this would be bumped back. She says 9 00:00:32,960 --> 00:00:35,320 Speaker 2: it is false that she was just with the President 10 00:00:35,360 --> 00:00:37,720 Speaker 2: in the Oval Office and can confirm that tomorrow, the 11 00:00:37,720 --> 00:00:40,879 Speaker 2: February first deadline that President Trump put into place with 12 00:00:40,920 --> 00:00:45,200 Speaker 2: a statement several weeks ago continues. So I guess that's 13 00:00:45,280 --> 00:00:47,600 Speaker 2: where we stand at this moment. We could hear from 14 00:00:47,600 --> 00:00:50,519 Speaker 2: Donald Trump himself on this later today. He is expected 15 00:00:50,560 --> 00:00:53,159 Speaker 2: to be signing executive orders this afternoon, and we'll be 16 00:00:53,159 --> 00:00:55,440 Speaker 2: traveling from Joint Bass Andrews down to Florida and mar 17 00:00:55,480 --> 00:00:58,440 Speaker 2: A Lago, another opportunity for him to potentially address the cameras. 18 00:00:58,600 --> 00:00:59,960 Speaker 3: Yeah, this is all anecdotal. 19 00:01:00,120 --> 00:01:02,400 Speaker 4: We have no paper on this and there's nothing official, 20 00:01:02,480 --> 00:01:05,080 Speaker 4: so we're just trying to follow the verbal cues here 21 00:01:05,160 --> 00:01:07,760 Speaker 4: from the Press Secretary and reporting that's coming out of 22 00:01:07,760 --> 00:01:09,800 Speaker 4: the White House. If we can bring in our panel here, 23 00:01:09,920 --> 00:01:13,360 Speaker 4: Rick Davis and Genie Shanzano or with us Bloomberg Politics contributors. 24 00:01:14,000 --> 00:01:16,440 Speaker 4: Rick is of course our Republican strategist partner at Stone 25 00:01:16,440 --> 00:01:19,920 Speaker 4: Court Capital, and Genie is our Democratic analyst and political 26 00:01:19,920 --> 00:01:24,320 Speaker 4: science professor at Iona University. Genie, once it's official here, 27 00:01:24,400 --> 00:01:26,520 Speaker 4: I guess we'll assume that this is going to be 28 00:01:26,640 --> 00:01:29,960 Speaker 4: the case. Canada, Mexico twenty five percent, China ten percent. 29 00:01:30,319 --> 00:01:33,240 Speaker 4: There's been talk of off ramps already. Is this just 30 00:01:33,319 --> 00:01:36,920 Speaker 4: the opening salvo here? And these could be pulled back 31 00:01:37,040 --> 00:01:39,200 Speaker 4: if certain conditions are met, or this is the new 32 00:01:39,240 --> 00:01:40,560 Speaker 4: reality for these three countries. 33 00:01:42,400 --> 00:01:44,520 Speaker 5: You know, I don't think we know yet. And I 34 00:01:44,560 --> 00:01:48,520 Speaker 5: thought it was fascinating your conversation with the representative because 35 00:01:48,560 --> 00:01:52,160 Speaker 5: what she said speaks to this directly. She said he 36 00:01:52,280 --> 00:01:55,680 Speaker 5: should come to Congress on such sweeping tariffs, just as 37 00:01:55,720 --> 00:01:58,800 Speaker 5: he should have come to Congress on freezing federal grants 38 00:01:58,800 --> 00:02:02,520 Speaker 5: and loans. And this is something that Donald Trump and 39 00:02:02,640 --> 00:02:06,000 Speaker 5: Russell Vote have talked about. Russell Vote said Donald Trump 40 00:02:06,000 --> 00:02:11,200 Speaker 5: will make impoundment great again. They are trying to ensure 41 00:02:11,639 --> 00:02:15,160 Speaker 5: that the power of the purse, given an Article one 42 00:02:15,160 --> 00:02:18,400 Speaker 5: to Congress, moves to the executive branch, and they are 43 00:02:18,440 --> 00:02:21,359 Speaker 5: trying to do that and trying to challenge the Impoundment 44 00:02:21,400 --> 00:02:26,400 Speaker 5: Act and so be sweeping tariffs which may go into 45 00:02:26,440 --> 00:02:28,960 Speaker 5: effect tomorrow, may go into effect in a month. It 46 00:02:29,000 --> 00:02:31,440 Speaker 5: sounds like this Press secretor is saying tomorrow and this 47 00:02:31,600 --> 00:02:34,840 Speaker 5: federal freeze is setting up not just a fight with 48 00:02:35,160 --> 00:02:39,200 Speaker 5: countries and an impact on our economy directly, but also 49 00:02:39,320 --> 00:02:43,600 Speaker 5: a fight between the executive branch and potentially Congress when 50 00:02:43,639 --> 00:02:46,799 Speaker 5: they wake up and realize that the president is trying 51 00:02:46,800 --> 00:02:51,040 Speaker 5: to get enormous executive power by taking over the power 52 00:02:51,080 --> 00:02:54,280 Speaker 5: of the purse since seventeen eighty nine in the hands 53 00:02:54,320 --> 00:02:57,960 Speaker 5: of Congress. But that's what they promised in Project twenty five, 54 00:02:58,240 --> 00:03:00,440 Speaker 5: that's what russ Vote has talked about, and that's what 55 00:03:00,520 --> 00:03:02,920 Speaker 5: the President has done in his first two weeks. And 56 00:03:03,000 --> 00:03:04,400 Speaker 5: he's continuing down that. 57 00:03:04,400 --> 00:03:08,800 Speaker 2: Road well, and the briefing is continuing as well at 58 00:03:08,840 --> 00:03:11,400 Speaker 2: the White House. Genie, we're still hearing from Caroline Levitt 59 00:03:11,440 --> 00:03:14,280 Speaker 2: on these tariffs. She does reiterate they are incoming tomorrow 60 00:03:14,560 --> 00:03:17,560 Speaker 2: on Canada, citing reasons for that as being both Canada 61 00:03:17,600 --> 00:03:20,480 Speaker 2: and Mexico have allowed an unprecedented invasion of a legal 62 00:03:20,520 --> 00:03:25,280 Speaker 2: fentanyl that is killing American citizens and allowing legal immigrants 63 00:03:25,600 --> 00:03:28,079 Speaker 2: into the country. I guess the question here, Rick, is 64 00:03:28,120 --> 00:03:31,080 Speaker 2: if these tariffs are intended to create a behavioral change 65 00:03:31,080 --> 00:03:33,720 Speaker 2: to make something different be happening at the northern and 66 00:03:33,800 --> 00:03:35,920 Speaker 2: southern borders. Do we have an idea of what the 67 00:03:36,040 --> 00:03:39,480 Speaker 2: metrics are around that what the administration is going to 68 00:03:39,480 --> 00:03:43,640 Speaker 2: decide is good progress for these things to potentially be lifted. 69 00:03:44,960 --> 00:03:45,160 Speaker 6: Yeah. 70 00:03:45,360 --> 00:03:47,880 Speaker 7: I think it's pretty subjective, right. I mean, if they 71 00:03:48,480 --> 00:03:53,600 Speaker 7: see progress that governments are taking, not necessarily on you know, 72 00:03:53,680 --> 00:03:57,800 Speaker 7: sort of quantity, but even you know, measures that these 73 00:03:57,840 --> 00:04:02,640 Speaker 7: governments might put in place sequent to the tariffs, then 74 00:04:02,800 --> 00:04:05,320 Speaker 7: maybe they see the behavioral change being enough to be 75 00:04:05,400 --> 00:04:09,080 Speaker 7: able to relax these tariffs. Original reporting was we might 76 00:04:09,120 --> 00:04:11,880 Speaker 7: see these tariffs going to effect March first. We would 77 00:04:11,880 --> 00:04:15,040 Speaker 7: have had twenty eight days to actually see what kind 78 00:04:15,040 --> 00:04:20,000 Speaker 7: of response the governments in Mexico and Canada would produce, 79 00:04:20,240 --> 00:04:23,080 Speaker 7: and maybe that would be part of the negotiation and say, well, 80 00:04:23,120 --> 00:04:26,279 Speaker 7: you're trying the best you can, maybe reduce the tariffs 81 00:04:26,320 --> 00:04:28,440 Speaker 7: in half. I mean, like, it just seems to me 82 00:04:28,600 --> 00:04:31,680 Speaker 7: that if these are going into effect tomorrow, you know, 83 00:04:31,839 --> 00:04:37,120 Speaker 7: it puts these both these countries in a significant defensive 84 00:04:37,200 --> 00:04:41,360 Speaker 7: crouch and they'll have to wonder do we meet these 85 00:04:41,400 --> 00:04:46,160 Speaker 7: tariffs with retaliation of our own? Do we take the 86 00:04:46,480 --> 00:04:51,839 Speaker 7: suggestion that we actually implement more drastic efforts around the stent, 87 00:04:52,640 --> 00:04:56,760 Speaker 7: the stop of fentanyl and immigration. I would mention that 88 00:04:57,120 --> 00:05:01,239 Speaker 7: immigration statistics are significant lower than they've been for nearly 89 00:05:01,279 --> 00:05:06,279 Speaker 7: half a decade right now. So what's as you say, Kaylee, 90 00:05:06,360 --> 00:05:09,200 Speaker 7: what's the metric that you're going to judge progress from? 91 00:05:09,240 --> 00:05:12,880 Speaker 7: And typically we'd have people from the administration out briefing 92 00:05:12,920 --> 00:05:15,800 Speaker 7: on this, so everybody could be prepared for whatever the 93 00:05:15,839 --> 00:05:19,200 Speaker 7: president announces, but not in this White House. We're going 94 00:05:19,279 --> 00:05:22,400 Speaker 7: to hear it first from the President, probably through a 95 00:05:22,440 --> 00:05:25,760 Speaker 7: tweet and echoed then throughout his administration. 96 00:05:27,000 --> 00:05:29,920 Speaker 4: Genie does the implementation of tariffs, is getting some details 97 00:05:30,000 --> 00:05:34,720 Speaker 4: on this finally actually inform or even accelerate the debate 98 00:05:35,080 --> 00:05:38,200 Speaker 4: around taxes. This is the other component, of course, that 99 00:05:38,279 --> 00:05:41,560 Speaker 4: lawmakers have been dealing with here. How you balance tax 100 00:05:41,640 --> 00:05:46,039 Speaker 4: cuts with potential revenue from tariffs? Could this actually help 101 00:05:46,120 --> 00:05:49,440 Speaker 4: to accelerate the debate on Capitol Hill. 102 00:05:49,680 --> 00:05:52,440 Speaker 5: It certainly could. I mean, I think I would say 103 00:05:52,480 --> 00:05:54,520 Speaker 5: we have to take a wait and see approach on 104 00:05:54,640 --> 00:05:57,920 Speaker 5: if it does. And I think part of our problem 105 00:05:58,000 --> 00:06:01,000 Speaker 5: here is that we simply have not gotten a lot 106 00:06:01,000 --> 00:06:04,360 Speaker 5: of direction from the White House. To Rick's point as 107 00:06:04,400 --> 00:06:07,360 Speaker 5: to what this is going to look like. What we 108 00:06:07,440 --> 00:06:10,200 Speaker 5: can rely on is what Donald Trump did in his 109 00:06:10,360 --> 00:06:15,520 Speaker 5: first term when he imposed much more targeted tariffs. The 110 00:06:15,640 --> 00:06:19,720 Speaker 5: impact on the US economy was dramatic in terms of 111 00:06:19,839 --> 00:06:24,320 Speaker 5: factory jobs, in terms of real median household income, and 112 00:06:24,360 --> 00:06:28,320 Speaker 5: that's what economists have been responded to, but responding to rather, 113 00:06:28,560 --> 00:06:32,640 Speaker 5: you know, I don't think anyone disagrees with Donald Trump 114 00:06:32,760 --> 00:06:36,719 Speaker 5: that tariffs in a targeted manner can be used to 115 00:06:36,920 --> 00:06:41,240 Speaker 5: ensure that there is equanimity in terms of trade, that 116 00:06:41,440 --> 00:06:46,160 Speaker 5: we have a ability to compete fairly with other countries 117 00:06:46,200 --> 00:06:50,040 Speaker 5: in the world. But we have so little information on 118 00:06:50,080 --> 00:06:52,600 Speaker 5: this at this point to go on beyond the fact 119 00:06:52,680 --> 00:06:56,800 Speaker 5: we were told that tariffs are his favorite word and 120 00:06:56,839 --> 00:06:59,599 Speaker 5: that he intends to go a whole hog, if you will, 121 00:06:59,800 --> 00:07:03,960 Speaker 5: in implementing them, and in an economy this strong, that 122 00:07:04,160 --> 00:07:07,719 Speaker 5: is a concerning way forward. And so we don't know 123 00:07:07,760 --> 00:07:10,000 Speaker 5: what happens in the future, but in the past, the 124 00:07:10,080 --> 00:07:14,480 Speaker 5: targeted tariffs had a real impact on people's lives, and 125 00:07:14,520 --> 00:07:18,360 Speaker 5: the American public paid for those, including farmers in the Midwest. 126 00:07:19,880 --> 00:07:22,080 Speaker 2: Well, and we're seeing just news around Terris having a 127 00:07:22,080 --> 00:07:25,160 Speaker 2: real impact in financial markets today. What was dollar weakness 128 00:07:25,200 --> 00:07:27,120 Speaker 2: is turning into a little bit more dollar strength. You're 129 00:07:27,120 --> 00:07:29,640 Speaker 2: seeing movement in the Mexican peso and the looney, the 130 00:07:29,680 --> 00:07:32,640 Speaker 2: Canadian dollar. You're seeing oil coming off the lows as well. 131 00:07:32,640 --> 00:07:34,440 Speaker 2: We're only down about a tenth of a percent here, 132 00:07:34,480 --> 00:07:36,880 Speaker 2: because that's a big factor in this equation with Canada, 133 00:07:36,920 --> 00:07:40,720 Speaker 2: specifically Rick. The vast majority of heavy crude imports that 134 00:07:40,760 --> 00:07:43,320 Speaker 2: the United States brings into the country come from Canada, 135 00:07:43,320 --> 00:07:45,480 Speaker 2: and that's not easily replaceable unless you want to turn 136 00:07:45,560 --> 00:07:49,000 Speaker 2: to Venezuela, which obviously has its own complications. And Donald 137 00:07:49,000 --> 00:07:51,640 Speaker 2: Trump suggested at the White House yesterday that a lot 138 00:07:51,680 --> 00:07:53,560 Speaker 2: of his decision making on whether there would be, say, 139 00:07:53,560 --> 00:07:57,480 Speaker 2: an exemption for oil, will depend on price. How price 140 00:07:57,560 --> 00:07:59,720 Speaker 2: reactive do we think a president who in his first 141 00:07:59,760 --> 00:08:02,320 Speaker 2: turn cared very much about what the stock market was doing, 142 00:08:02,600 --> 00:08:05,080 Speaker 2: for example, do you think Trump will be around these policies, 143 00:08:05,080 --> 00:08:07,920 Speaker 2: whether it's oil prices or the things genies referring to 144 00:08:07,960 --> 00:08:12,000 Speaker 2: prices at the grocery store, things Americans will see, Okay. 145 00:08:11,760 --> 00:08:13,559 Speaker 7: Lee, I mean, we heard a lot about the price 146 00:08:13,600 --> 00:08:17,080 Speaker 7: of eggs all during this campaign, but since they've skyrocketed 147 00:08:17,120 --> 00:08:20,320 Speaker 7: almost doubled in price since the president came into office, 148 00:08:20,760 --> 00:08:23,440 Speaker 7: we haven't heard Donald Trump talk much about his interest 149 00:08:23,520 --> 00:08:27,080 Speaker 7: in egg prices. So look, everything is transactional. I mean, 150 00:08:27,240 --> 00:08:29,800 Speaker 7: one thing we know from the first term of Donald 151 00:08:29,840 --> 00:08:34,199 Speaker 7: Trump is he is a transactional president. When he sets 152 00:08:34,240 --> 00:08:37,079 Speaker 7: out these kinds of tariffs there to elicit a response, 153 00:08:37,200 --> 00:08:42,200 Speaker 7: it's a deal. And if that deal includes, you know, 154 00:08:42,280 --> 00:08:45,320 Speaker 7: watching the price of gasoline at the pump to determine 155 00:08:45,320 --> 00:08:48,680 Speaker 7: whether or not he creates an exemption for Canadian crew 156 00:08:48,840 --> 00:08:52,719 Speaker 7: coming into the United States outside the tariff regime, then 157 00:08:53,200 --> 00:08:55,160 Speaker 7: those are the kinds of things that he's simply. 158 00:08:54,840 --> 00:08:55,240 Speaker 8: Going to do. 159 00:08:55,559 --> 00:08:58,080 Speaker 7: We should expect that. I mean, I would remind people 160 00:08:58,480 --> 00:09:01,559 Speaker 7: that Canada put tariffs on there our own crude coming 161 00:09:01,559 --> 00:09:04,720 Speaker 7: into the United States last year. That hurt some of 162 00:09:04,760 --> 00:09:10,200 Speaker 7: the producers who take Canadian crude and refine it. So 163 00:09:11,120 --> 00:09:15,040 Speaker 7: this little tit for tat crude war has been going 164 00:09:15,040 --> 00:09:18,080 Speaker 7: on for some time, and I wouldn't be surprised if 165 00:09:18,120 --> 00:09:20,360 Speaker 7: it doesn't get caught up in this terraf regame itself. 166 00:09:21,520 --> 00:09:25,760 Speaker 4: The Press Secretary has been talking about the conditions here 167 00:09:26,080 --> 00:09:30,400 Speaker 4: and the causes for these tariffs, Genie pointing to fentanyl 168 00:09:30,640 --> 00:09:33,920 Speaker 4: as a primary cause when it comes to Canada, for instance, 169 00:09:34,800 --> 00:09:38,640 Speaker 4: Mexico has its own obviously situation when it comes to fentanyl, 170 00:09:38,640 --> 00:09:41,800 Speaker 4: but also illegal immigration. I just wonder, if we're looking 171 00:09:41,800 --> 00:09:44,200 Speaker 4: at these two countries differently, is there something Canada can 172 00:09:44,240 --> 00:09:47,360 Speaker 4: do on fentanyl that, for instance, wouldn't trigger a pullback 173 00:09:47,360 --> 00:09:48,600 Speaker 4: of tariffs in Mexico. 174 00:09:50,240 --> 00:09:53,040 Speaker 5: You know, I think there probably is. And you know, 175 00:09:53,160 --> 00:09:56,360 Speaker 5: fentanyl is something that people on all sides of the aisle, 176 00:09:56,520 --> 00:10:00,800 Speaker 5: and rightly so, have been terribly concerned about. President is 177 00:10:00,920 --> 00:10:03,680 Speaker 5: absolutely right to focus on that and if he can 178 00:10:03,760 --> 00:10:08,720 Speaker 5: use targeted tariffs to improve the situation, that is important. 179 00:10:09,040 --> 00:10:12,480 Speaker 5: But the problem is, you know, perhaps those conversations are 180 00:10:12,480 --> 00:10:15,880 Speaker 5: going forward and they're not being reported at this point. 181 00:10:16,200 --> 00:10:19,520 Speaker 5: The problem is what we're hearing about are really really 182 00:10:19,720 --> 00:10:23,760 Speaker 5: massive tariffs against our neighbors. And you know, just to 183 00:10:23,840 --> 00:10:26,320 Speaker 5: use an example, Donald Trump has talked about the fact 184 00:10:26,360 --> 00:10:28,680 Speaker 5: that he is concerned that China is in the Panama 185 00:10:28,720 --> 00:10:31,439 Speaker 5: Canal and people have pushed back on that. Well, what 186 00:10:31,559 --> 00:10:35,000 Speaker 5: we do know is that China is making inroads with 187 00:10:35,080 --> 00:10:37,959 Speaker 5: our allies in this part of the hemisphere where the 188 00:10:38,080 --> 00:10:42,680 Speaker 5: United States reigns and should reign supreme. We have to 189 00:10:42,720 --> 00:10:47,119 Speaker 5: be very careful long term about doing things to disrupt 190 00:10:47,160 --> 00:10:50,920 Speaker 5: our relationships with our allies. And so, yes, we do 191 00:10:51,040 --> 00:10:54,000 Speaker 5: need to get a handle on fetanol. He's right on that. 192 00:10:54,320 --> 00:10:56,920 Speaker 5: But do you need to take a hammer or is 193 00:10:56,960 --> 00:10:58,760 Speaker 5: there sort of a chisel. I don't even know if 194 00:10:58,760 --> 00:11:01,360 Speaker 5: that's the right metaphor guys, or a way to approach 195 00:11:01,440 --> 00:11:04,240 Speaker 5: it that gets you where you want to be with fentanyl, 196 00:11:04,480 --> 00:11:08,280 Speaker 5: but doesn't long term destroy our relationships with our allies 197 00:11:08,480 --> 00:11:13,959 Speaker 5: and in the wash impact our economy unnecessarily, which doesn't 198 00:11:14,000 --> 00:11:14,760 Speaker 5: help any of us. 199 00:11:16,720 --> 00:11:20,280 Speaker 2: All Right, Jeanie Shanzano and Rick Davis, our signature political panel, 200 00:11:20,320 --> 00:11:22,920 Speaker 2: helping us out on this Friday as we grapple with 201 00:11:23,120 --> 00:11:25,040 Speaker 2: the breaking news from the White House. Thank you so 202 00:11:25,120 --> 00:11:27,880 Speaker 2: much again. The White House Press Secretary Caroline Lovitt confirming 203 00:11:27,920 --> 00:11:30,720 Speaker 2: that it is tomorrow, February first, the President intends to 204 00:11:30,720 --> 00:11:32,480 Speaker 2: put in place twenty five percent tariffs. 205 00:11:34,800 --> 00:11:38,280 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 206 00:11:38,320 --> 00:11:41,400 Speaker 1: us live weekdays at noon and five pm Eastern on 207 00:11:41,520 --> 00:11:44,760 Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business app. 208 00:11:44,800 --> 00:11:47,800 Speaker 1: You can also listen live on Amazon Alexa from our 209 00:11:47,840 --> 00:11:53,040 Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 210 00:11:53,840 --> 00:11:56,280 Speaker 4: Where we need to get something more official than just 211 00:11:56,360 --> 00:11:58,240 Speaker 4: the words of the press secretary. But that's what we 212 00:11:58,320 --> 00:11:59,800 Speaker 4: have to go on right now, and we may well 213 00:12:00,000 --> 00:12:02,880 Speaker 4: even more. Donald Trump's going to be signing some executive 214 00:12:02,960 --> 00:12:04,600 Speaker 4: orders and we'll be keeping our eyes on the president 215 00:12:04,640 --> 00:12:07,199 Speaker 4: round three o'clock, i think, is what the plan was 216 00:12:07,240 --> 00:12:09,559 Speaker 4: at this point. Knowing as well, about forty five minutes 217 00:12:09,559 --> 00:12:11,439 Speaker 4: from now he's set to be meeting with Jensen Wong, 218 00:12:11,520 --> 00:12:14,320 Speaker 4: the CEO of Nvidia. Will there be news on export 219 00:12:14,360 --> 00:12:17,120 Speaker 4: controls on this same day that we hear about tariffs, 220 00:12:17,120 --> 00:12:18,680 Speaker 4: Will of course let you know if that's the case. 221 00:12:18,679 --> 00:12:21,000 Speaker 4: That's why we have multiple editions of Balance and Power. 222 00:12:21,360 --> 00:12:24,000 Speaker 4: We need more than one at this point. It's a 223 00:12:24,000 --> 00:12:26,080 Speaker 4: great pleasure to bring in Dan Briget. What a perfect 224 00:12:26,080 --> 00:12:28,960 Speaker 4: time to have the former Energy secretary from of course 225 00:12:29,000 --> 00:12:31,840 Speaker 4: the first Trump administration as we watch crude oil turn 226 00:12:31,920 --> 00:12:35,439 Speaker 4: positive here with what appears to be an exemption. We'll 227 00:12:35,480 --> 00:12:37,760 Speaker 4: let you know if that is made official. But Secretary, 228 00:12:37,760 --> 00:12:39,240 Speaker 4: it's good to see you and thanks for joining us 229 00:12:39,280 --> 00:12:41,600 Speaker 4: here at the table today. How are you looking at 230 00:12:41,679 --> 00:12:44,280 Speaker 4: this as tariffs are detailed now with your eye on 231 00:12:44,280 --> 00:12:45,040 Speaker 4: the energy space. 232 00:12:45,440 --> 00:12:46,840 Speaker 8: Well, I think it's going to be important to see 233 00:12:46,840 --> 00:12:48,920 Speaker 8: the impact obviously on an individual company. So as we 234 00:12:48,960 --> 00:12:50,920 Speaker 8: look at the earnings reports today and we watch what 235 00:12:51,000 --> 00:12:53,680 Speaker 8: the CEOs are talking about, we'll have to evaluate what 236 00:12:53,800 --> 00:12:55,640 Speaker 8: is exactly done by the White House and then what 237 00:12:55,720 --> 00:12:59,360 Speaker 8: will be the exact impact on our company's producers here 238 00:12:59,360 --> 00:13:01,560 Speaker 8: in the United States. But when we think about tariffs, 239 00:13:01,559 --> 00:13:04,640 Speaker 8: so I think the simplistic economic analysis has been a 240 00:13:04,720 --> 00:13:07,760 Speaker 8: tariff as attacks attacks is usually paid by the consumer, 241 00:13:07,880 --> 00:13:10,720 Speaker 8: so prices will go up. It's not quite that simple 242 00:13:10,760 --> 00:13:13,120 Speaker 8: in this case with Canada. We do import about four 243 00:13:13,160 --> 00:13:17,120 Speaker 8: million barrels per day from Canada of heavy crude, and 244 00:13:17,240 --> 00:13:19,400 Speaker 8: many of our refiners in the West and the Midwest 245 00:13:19,400 --> 00:13:22,120 Speaker 8: are dependent upon that crude. But when you think about 246 00:13:22,160 --> 00:13:24,960 Speaker 8: tariffs and who ultimately pays, it really boils down to 247 00:13:25,000 --> 00:13:28,199 Speaker 8: who has options, who has optionality, and then the United 248 00:13:28,240 --> 00:13:31,880 Speaker 8: States for refiners, it is possible. I'm not suggesting it's easy, 249 00:13:31,960 --> 00:13:35,720 Speaker 8: but it is possible for refiners to retool their facilities 250 00:13:35,720 --> 00:13:38,680 Speaker 8: to do sweet crude rather than heavy sour that comes 251 00:13:38,679 --> 00:13:41,240 Speaker 8: out of Canada. If you think, if you put yourself 252 00:13:41,240 --> 00:13:43,560 Speaker 8: in the shoes of Canada, how many markets do you 253 00:13:43,640 --> 00:13:46,079 Speaker 8: have for your crude oil? It's very difficult to get 254 00:13:46,080 --> 00:13:49,319 Speaker 8: that oil to the coast, so Asia and Europe become 255 00:13:49,360 --> 00:13:53,400 Speaker 8: difficult customers. It raises their costs as well. So it 256 00:13:53,480 --> 00:13:56,600 Speaker 8: looks like on the surface, we may have more options 257 00:13:56,920 --> 00:13:59,480 Speaker 8: than they have for the product itself, which means that 258 00:13:59,480 --> 00:14:02,360 Speaker 8: they would low or their prices to maintain access to 259 00:14:02,400 --> 00:14:05,760 Speaker 8: the US market. So the notion that tariffs by definition 260 00:14:05,840 --> 00:14:09,240 Speaker 8: mean higher prices not always the case in economics. And 261 00:14:09,320 --> 00:14:11,719 Speaker 8: I think, as I watch the President, as I look 262 00:14:11,760 --> 00:14:13,800 Speaker 8: at his words and I look at his actions, he's 263 00:14:13,840 --> 00:14:15,959 Speaker 8: a very shrewd negotiator, I think. 264 00:14:15,760 --> 00:14:17,079 Speaker 3: He knows this well. 265 00:14:17,120 --> 00:14:19,640 Speaker 2: So when we consider optionality here in this suggestion that 266 00:14:19,680 --> 00:14:23,160 Speaker 2: you can retool your refining capacity for different products, how 267 00:14:23,160 --> 00:14:25,520 Speaker 2: long would that process actually take? Because if we're saying 268 00:14:25,560 --> 00:14:27,840 Speaker 2: this goes into effect tomorrow, suddenly you're cut off of 269 00:14:27,840 --> 00:14:31,000 Speaker 2: that heavy crud that's not instantly replaceable. What is the 270 00:14:31,080 --> 00:14:32,760 Speaker 2: immediate impact on pricing? 271 00:14:33,000 --> 00:14:36,720 Speaker 8: It's difficult. I mean, you're right that the timetable does matter. 272 00:14:36,720 --> 00:14:38,520 Speaker 8: So in the short run you may see some increase 273 00:14:38,560 --> 00:14:41,080 Speaker 8: in prices, but in the long run, infrastructure gets built, 274 00:14:41,440 --> 00:14:45,640 Speaker 8: production continues as it does today, and prices ultimately come down. 275 00:14:45,680 --> 00:14:48,160 Speaker 8: The question is who pays the tariff, And I think 276 00:14:48,200 --> 00:14:49,960 Speaker 8: that's what we need to focus on over the course 277 00:14:50,000 --> 00:14:51,960 Speaker 8: of the next couple weeks and months, as the President 278 00:14:52,040 --> 00:14:55,640 Speaker 8: determines how to negotiate with Canada, not really over the 279 00:14:55,680 --> 00:14:57,680 Speaker 8: price of oil. I mean, we have to remember what 280 00:14:57,720 --> 00:15:00,280 Speaker 8: this is really about. It's about a border, and it's 281 00:15:00,280 --> 00:15:03,640 Speaker 8: about another product called fentanyl, and that's really what the 282 00:15:03,680 --> 00:15:06,800 Speaker 8: President's interests are here, I suspect, so we have to 283 00:15:06,920 --> 00:15:09,720 Speaker 8: keep in mind what this ultimate negotiation is about. 284 00:15:09,920 --> 00:15:14,840 Speaker 4: I still go back to the original question about incentivizing producers. 285 00:15:14,920 --> 00:15:16,480 Speaker 3: When prices are falling. 286 00:15:17,160 --> 00:15:21,400 Speaker 4: The whole drill, baby, drill construct is you just keep 287 00:15:21,400 --> 00:15:24,560 Speaker 4: producing more. Prices, according to the President, could fall by 288 00:15:24,680 --> 00:15:28,800 Speaker 4: half and then inflation as a whole drops around it. 289 00:15:29,200 --> 00:15:32,960 Speaker 4: But if you're exon, if you're pioneer, if you're marathon, 290 00:15:33,000 --> 00:15:34,040 Speaker 4: how does that work for you. 291 00:15:34,560 --> 00:15:37,480 Speaker 8: Well, you know, demand drives pricing, I mean free markets. 292 00:15:38,120 --> 00:15:40,360 Speaker 8: This is again you know economics one oh one in 293 00:15:40,360 --> 00:15:43,280 Speaker 8: some respect. So that's going to determine the ultimate price 294 00:15:43,400 --> 00:15:44,280 Speaker 8: of oil. 295 00:15:44,120 --> 00:15:45,880 Speaker 3: Even as supplies ballooning under that. 296 00:15:46,080 --> 00:15:48,480 Speaker 8: Even as supplies ballooning. So what's happening is, you know 297 00:15:48,520 --> 00:15:50,720 Speaker 8: what has happened over the last few years is our 298 00:15:50,720 --> 00:15:53,840 Speaker 8: production has gone up, which you would think would reduce 299 00:15:53,920 --> 00:15:57,280 Speaker 8: prices for consumers. You're eliminating a scarcity in the marketplace. 300 00:15:57,520 --> 00:15:59,720 Speaker 8: But if you look at prices for retail products like 301 00:15:59,800 --> 00:16:02,480 Speaker 8: DA solar gasoline, over the course of the last few years, 302 00:16:02,520 --> 00:16:05,120 Speaker 8: i've actually gone up. So why would production go up 303 00:16:05,160 --> 00:16:07,440 Speaker 8: and the prices go up? And the reasoning for that, 304 00:16:07,960 --> 00:16:10,880 Speaker 8: I think is because we've made that production more expensive. 305 00:16:11,120 --> 00:16:13,200 Speaker 8: We've made it harder to drill here, We've made it 306 00:16:13,240 --> 00:16:17,560 Speaker 8: harder through litigation in some cases, through regulation in other cases. 307 00:16:17,960 --> 00:16:20,080 Speaker 8: If the President is correct, what he's going to do 308 00:16:20,200 --> 00:16:22,680 Speaker 8: is to start to reduce some of that, reduce the 309 00:16:22,720 --> 00:16:25,760 Speaker 8: regulatory burden that is now borne by consumers, so you 310 00:16:25,840 --> 00:16:29,840 Speaker 8: can have increased production but also lower prices. That's his goal, 311 00:16:30,120 --> 00:16:32,080 Speaker 8: and I think you can do both in this environment. 312 00:16:32,280 --> 00:16:34,720 Speaker 2: But isn't that they're a factor here that has nothing 313 00:16:34,760 --> 00:16:36,920 Speaker 2: to do with the US, really, and that's Opek when 314 00:16:36,920 --> 00:16:39,800 Speaker 2: we consider ultimately supply and demand dynamics. They've been keeping 315 00:16:39,880 --> 00:16:42,760 Speaker 2: quotas and caps on their production. We've heard the President 316 00:16:42,760 --> 00:16:44,880 Speaker 2: in the last week on multiple occasions say he's going 317 00:16:44,920 --> 00:16:47,480 Speaker 2: to be asking favors of Opek essentially when it comes 318 00:16:47,760 --> 00:16:50,080 Speaker 2: to that production. Do you have any reason to believe 319 00:16:50,120 --> 00:16:51,640 Speaker 2: that they would oblige. 320 00:16:52,160 --> 00:16:54,960 Speaker 3: I can't speak for OPEK, and I don't can the president. 321 00:16:56,240 --> 00:16:59,760 Speaker 8: I think Opek speaks for OPEK, but I do think that. Look, 322 00:17:00,040 --> 00:17:02,000 Speaker 8: Peck's a big player in the marketplace, and as I 323 00:17:02,040 --> 00:17:05,920 Speaker 8: mentioned earlier in the US, in free market economies, demand 324 00:17:05,960 --> 00:17:09,000 Speaker 8: actually sets the price demand in production. Opex a little 325 00:17:09,040 --> 00:17:10,520 Speaker 8: different in that they are a cartel and they can 326 00:17:10,520 --> 00:17:12,440 Speaker 8: snap their fingers and set the price, or they can 327 00:17:12,440 --> 00:17:15,919 Speaker 8: set a production number. They are important players in the marketplace, 328 00:17:16,000 --> 00:17:19,320 Speaker 8: but that being said, they do have to drive their 329 00:17:19,320 --> 00:17:22,160 Speaker 8: own economies and they're heavily dependent upon the price of oil. 330 00:17:22,640 --> 00:17:24,240 Speaker 8: So we'll see what happens over the course of the 331 00:17:24,280 --> 00:17:24,960 Speaker 8: next few weeks. 332 00:17:25,000 --> 00:17:26,720 Speaker 3: How long will it take to feel the impact of 333 00:17:26,800 --> 00:17:29,080 Speaker 3: lifting the ban on LERG exports. 334 00:17:29,119 --> 00:17:31,480 Speaker 8: I think it's going to be fairly immediate. I would 335 00:17:31,480 --> 00:17:35,440 Speaker 8: imagine the US Department of Energy will probably start approving 336 00:17:35,480 --> 00:17:39,560 Speaker 8: some of the pending applications for export authorization very very quickly. 337 00:17:39,560 --> 00:17:41,520 Speaker 8: And I know that there are several projects that were 338 00:17:41,520 --> 00:17:45,640 Speaker 8: somewhat halted by this pause, and I think you'll see 339 00:17:45,680 --> 00:17:49,480 Speaker 8: them speed up construction really quickly. So my expectation would 340 00:17:49,480 --> 00:17:51,080 Speaker 8: be within the next year or two you'll start to 341 00:17:51,080 --> 00:17:54,200 Speaker 8: see again this rise in the exports. 342 00:17:53,760 --> 00:17:56,480 Speaker 3: Of luc building those pipelines in that time. 343 00:17:56,320 --> 00:17:58,760 Speaker 8: Yes, And that's what's really the critical factor here. It's 344 00:17:58,840 --> 00:18:01,000 Speaker 8: getting the product to market. As we just talked about, 345 00:18:01,080 --> 00:18:03,000 Speaker 8: we know how to produce oil here in the United States, 346 00:18:03,119 --> 00:18:05,240 Speaker 8: we know how to produce gas. We can make electrons 347 00:18:05,240 --> 00:18:07,800 Speaker 8: to drive data centers and everything else. Our challenge in 348 00:18:07,800 --> 00:18:10,639 Speaker 8: this country has been getting that product to the actual market, 349 00:18:10,960 --> 00:18:14,000 Speaker 8: putting the electricity to the load through transmission and distribution, 350 00:18:14,440 --> 00:18:18,080 Speaker 8: and getting those gas molecules to the open ocean building pipelines. 351 00:18:18,560 --> 00:18:20,399 Speaker 2: Well, so when we consider it this kind of wider 352 00:18:20,480 --> 00:18:22,760 Speaker 2: energy picture, obviously we all had a bit of a 353 00:18:22,840 --> 00:18:24,760 Speaker 2: reset perhaps or there was a reset in the markets 354 00:18:24,760 --> 00:18:26,879 Speaker 2: on Monday because of deep seek about what kind of 355 00:18:26,960 --> 00:18:30,639 Speaker 2: energy capacity may actually be needed to fuel artificial intelligence, 356 00:18:30,640 --> 00:18:33,520 Speaker 2: whether or not it's less than expected. Have you retooled 357 00:18:33,520 --> 00:18:35,560 Speaker 2: your thinking around that at all? Are you expecting that 358 00:18:35,560 --> 00:18:39,560 Speaker 2: there still is going to be an incredibly pointed increase 359 00:18:39,600 --> 00:18:41,919 Speaker 2: in demand due to all of these data centers and 360 00:18:41,960 --> 00:18:43,520 Speaker 2: the facilitation of this technology. 361 00:18:43,600 --> 00:18:44,600 Speaker 8: Yeah, the demand's coming. 362 00:18:45,040 --> 00:18:47,480 Speaker 3: With or without AI. We are without deep sea Yeah. 363 00:18:47,560 --> 00:18:50,000 Speaker 8: Yeah, with or without deep SEEK, and with or without AI, 364 00:18:50,160 --> 00:18:52,359 Speaker 8: we are short on electrons here in the United States. 365 00:18:52,480 --> 00:18:55,080 Speaker 8: We simply do not generate enough to meet the current demand. 366 00:18:55,480 --> 00:18:58,320 Speaker 8: So as we think about this, the Federal Energy Regulatory Commission, 367 00:18:58,320 --> 00:19:00,600 Speaker 8: for instance, put out a report that I think it's 368 00:19:00,640 --> 00:19:03,080 Speaker 8: twenty thirty maybe it's a little earlier than that. We 369 00:19:03,119 --> 00:19:06,960 Speaker 8: may be about twenty five to thirty gigawatts short on 370 00:19:07,080 --> 00:19:11,760 Speaker 8: electricity today. That's without AI, that's without all of these 371 00:19:11,760 --> 00:19:14,600 Speaker 8: announcements that were just made. If that is true, we 372 00:19:14,680 --> 00:19:16,879 Speaker 8: have to put that in scale. New York City on 373 00:19:16,920 --> 00:19:19,600 Speaker 8: an average day uses about six gigawatts, So we're talking 374 00:19:19,600 --> 00:19:23,159 Speaker 8: about four to five New York City sized grids that 375 00:19:23,240 --> 00:19:25,800 Speaker 8: we have to build between now and twenty thirty five 376 00:19:25,880 --> 00:19:29,000 Speaker 8: years away. That demand is coming, whether we want it 377 00:19:29,119 --> 00:19:29,280 Speaker 8: or not. 378 00:19:29,359 --> 00:19:31,760 Speaker 4: Well, I'm guessing you're not building any new nuke plants 379 00:19:31,800 --> 00:19:33,399 Speaker 4: in that period of time, even if that is a 380 00:19:33,400 --> 00:19:34,280 Speaker 4: long term solution. 381 00:19:34,440 --> 00:19:36,320 Speaker 3: So the answer is gas, right. 382 00:19:36,119 --> 00:19:37,200 Speaker 8: The ANSWER's natural gas. 383 00:19:37,240 --> 00:19:37,760 Speaker 3: That's correct. 384 00:19:37,760 --> 00:19:39,800 Speaker 8: I mean the short run, the answer is going to 385 00:19:39,800 --> 00:19:42,080 Speaker 8: be natural gas. It's going to be all forms of energy, 386 00:19:42,119 --> 00:19:44,720 Speaker 8: to be honest. We need more renewable power, we need 387 00:19:44,760 --> 00:19:47,400 Speaker 8: more natural gas, we need more nuclear we need every 388 00:19:47,400 --> 00:19:49,760 Speaker 8: form of generation that we currently know how to do 389 00:19:49,800 --> 00:19:52,240 Speaker 8: because we need those electrons. But in the long run, 390 00:19:52,280 --> 00:19:55,639 Speaker 8: it's going to be newer technologies, small modular advanced reactors, 391 00:19:55,800 --> 00:19:58,320 Speaker 8: perhaps even fusion energy at some point in our lifetimes. 392 00:19:58,680 --> 00:20:01,400 Speaker 2: Well, and as we consider this whole equation, it's all 393 00:20:01,440 --> 00:20:04,200 Speaker 2: going to be inherited by Chris Wright. Presumably he's pasted 394 00:20:04,200 --> 00:20:06,119 Speaker 2: some hurdles in the Senate. He could be confirmed to 395 00:20:06,160 --> 00:20:08,960 Speaker 2: be the new Secretary of Energy, your old job within 396 00:20:09,000 --> 00:20:11,080 Speaker 2: the day or the days to come. What would your 397 00:20:11,080 --> 00:20:13,920 Speaker 2: advice be to him on navigating the environment we are 398 00:20:13,920 --> 00:20:16,600 Speaker 2: currently And obviously he's very familiar with the energy industry. 399 00:20:16,680 --> 00:20:18,639 Speaker 8: He's very familiar and this is not going to be 400 00:20:18,680 --> 00:20:20,320 Speaker 8: new to him. And that's why I think he's such 401 00:20:20,320 --> 00:20:23,359 Speaker 8: an incredible choice. To be the next secretary of the 402 00:20:23,400 --> 00:20:27,400 Speaker 8: seventeenth US Secretary of Energy. Chris has got a great 403 00:20:27,400 --> 00:20:30,680 Speaker 8: background graduated from MIT. He knows a lot about nuclear power. 404 00:20:30,720 --> 00:20:32,920 Speaker 8: He served on the board with Sam Altman at Oaklow, 405 00:20:33,240 --> 00:20:35,880 Speaker 8: which is a small modular reactor or an advanced reactor 406 00:20:35,920 --> 00:20:39,560 Speaker 8: company based out West. He's also got an incredible history 407 00:20:39,600 --> 00:20:42,359 Speaker 8: in the oil and gas industry as well as how 408 00:20:42,359 --> 00:20:44,560 Speaker 8: many people know this in the wind industry. So he 409 00:20:44,640 --> 00:20:47,400 Speaker 8: knows a lot about energy production and I'm excited about 410 00:20:47,400 --> 00:20:49,720 Speaker 8: his leadership with that department. It's a fantastic place. 411 00:20:50,000 --> 00:20:53,560 Speaker 3: Debria just dropped fusion on us. In our lifetimes? Is 412 00:20:53,560 --> 00:20:54,960 Speaker 3: that in our lifetimes? 413 00:20:55,200 --> 00:20:55,520 Speaker 8: I hope? 414 00:20:55,600 --> 00:20:57,600 Speaker 3: Are you being serious? Or this is blue skytime? 415 00:20:57,640 --> 00:20:59,679 Speaker 8: Then it's a little bit of blue sky, But I 416 00:20:59,720 --> 00:21:02,280 Speaker 8: do happens? I mean, you just think about the possibilities, 417 00:21:02,280 --> 00:21:04,280 Speaker 8: think about the impact of that. You know, we just 418 00:21:04,320 --> 00:21:08,000 Speaker 8: talked about several forms of energy, oil, natural gas, wind production. 419 00:21:08,320 --> 00:21:10,320 Speaker 8: If we can bring the Sun to Earth, and that's 420 00:21:10,320 --> 00:21:13,080 Speaker 8: what fusion energy is. Yeah, we've made all of that obsolete, 421 00:21:13,680 --> 00:21:14,480 Speaker 8: all of it obsolete. 422 00:21:14,720 --> 00:21:16,320 Speaker 3: Can you get that done in the next four years? 423 00:21:16,400 --> 00:21:16,840 Speaker 8: I'll try. 424 00:21:16,880 --> 00:21:17,240 Speaker 3: All right. 425 00:21:18,200 --> 00:21:20,639 Speaker 2: We appreciate you joining us here in our GC studio. 426 00:21:20,720 --> 00:21:23,359 Speaker 2: Dan Briette, the former US Secretary of Energy during the 427 00:21:23,359 --> 00:21:26,520 Speaker 2: first Trump administration, now president and CEO of the Edison 428 00:21:26,680 --> 00:21:27,920 Speaker 2: Electric Institute. 429 00:21:31,040 --> 00:21:34,480 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 430 00:21:34,560 --> 00:21:37,400 Speaker 1: us live weekdays at noon and five pm. E's durn 431 00:21:37,520 --> 00:21:40,960 Speaker 1: on Apple, Cockley and Android Auto with the Bloomberg Business App. 432 00:21:41,119 --> 00:21:44,399 Speaker 1: Listen on demand wherever you get your podcasts, or watch 433 00:21:44,440 --> 00:21:46,960 Speaker 1: us live on YouTube. 434 00:21:47,240 --> 00:21:50,240 Speaker 3: It's a cloudy, foggy, rainy day here at Washington. 435 00:21:50,359 --> 00:21:52,240 Speaker 4: I went back over the Wilson Bridge this morning and 436 00:21:52,320 --> 00:21:54,040 Speaker 4: I could see the boats out in the Potomac as 437 00:21:54,040 --> 00:21:56,040 Speaker 4: they continue a very, very. 438 00:21:56,000 --> 00:21:59,000 Speaker 3: Difficult job trying to find. 439 00:22:00,320 --> 00:22:03,920 Speaker 4: Of people on the American Airlines jet that crashed into 440 00:22:03,920 --> 00:22:06,800 Speaker 4: a black Hawk helicopter just hundreds of feet off the 441 00:22:06,800 --> 00:22:10,440 Speaker 4: ground on final approach two nights ago. We're going to 442 00:22:10,480 --> 00:22:12,359 Speaker 4: talk in a moment with a real expert on this, 443 00:22:12,440 --> 00:22:14,520 Speaker 4: and I'm really glad to say that doctor Allen Deal 444 00:22:14,640 --> 00:22:17,359 Speaker 4: is going to be with us, the former NTSB investigator. 445 00:22:17,840 --> 00:22:20,240 Speaker 4: A lot of us old enough to remember thought of 446 00:22:20,280 --> 00:22:24,240 Speaker 4: the Air Florida crash from the early nineteen eighties when 447 00:22:24,240 --> 00:22:27,840 Speaker 4: this happened in the Potomac Alan Deal was an investigator 448 00:22:27,960 --> 00:22:29,919 Speaker 4: assigned to that crash and is going to be with 449 00:22:30,000 --> 00:22:32,280 Speaker 4: us in just a couple of moments. We do have 450 00:22:32,359 --> 00:22:35,840 Speaker 4: news on the investigation, as you've been hearing on Bloomberg, 451 00:22:35,880 --> 00:22:38,600 Speaker 4: a couple of very important headlines. Number One, the altitude 452 00:22:38,640 --> 00:22:42,359 Speaker 4: of that helicopter, the Blackhawk helicopter, is in question at 453 00:22:42,440 --> 00:22:45,760 Speaker 4: this point, having apparently, and you heard this from the 454 00:22:45,800 --> 00:22:50,159 Speaker 4: President and the Defense Secretary themselves, was likely flying higher 455 00:22:50,160 --> 00:22:52,359 Speaker 4: than it should have been at this point. The UH 456 00:22:52,400 --> 00:22:57,200 Speaker 4: sixty Blackhawk helicopter was using what's known as helicopter Route four. 457 00:22:58,000 --> 00:23:01,520 Speaker 4: And we have another important update here as well. That 458 00:23:01,680 --> 00:23:05,879 Speaker 4: low Altitude Corridor has been closed off now according to 459 00:23:06,240 --> 00:23:08,600 Speaker 4: the FAA, and that is where we start our reporting 460 00:23:08,640 --> 00:23:11,120 Speaker 4: with Bloomberg's Tyler Kendall, who is now on day two 461 00:23:12,119 --> 00:23:13,440 Speaker 4: at Reagan National Airport. 462 00:23:13,480 --> 00:23:19,080 Speaker 9: Tyler, what do you have, well, Joe absolutely critical the 463 00:23:19,200 --> 00:23:22,040 Speaker 9: NTS speed confirming that they have received the so called 464 00:23:22,080 --> 00:23:25,560 Speaker 9: black boxes, the data recording devices from the commercial flight 465 00:23:25,600 --> 00:23:27,720 Speaker 9: That is going to be pivotal in their investigation to 466 00:23:27,720 --> 00:23:31,080 Speaker 9: get that hard data, particularly concerning the speed, the velocity, 467 00:23:31,119 --> 00:23:33,879 Speaker 9: also the elevation of the aircraft at the point of 468 00:23:33,920 --> 00:23:36,639 Speaker 9: the collision. As you mentioned, the elevation really coming to 469 00:23:36,720 --> 00:23:41,120 Speaker 9: focus in this investigation. We know that around DCA there 470 00:23:41,200 --> 00:23:43,320 Speaker 9: is a hard ceiling of about two hundred feet for 471 00:23:43,400 --> 00:23:47,359 Speaker 9: helicopters that are operating in the area. According to flight 472 00:23:47,440 --> 00:23:50,520 Speaker 9: tracking statistics that Bloomberg News is citing, it appears that 473 00:23:50,560 --> 00:23:53,080 Speaker 9: the collision happened at about three hundred and fifty feet, 474 00:23:53,119 --> 00:23:55,760 Speaker 9: so that would be above that ceiling. As you mentioned, 475 00:23:55,760 --> 00:23:58,399 Speaker 9: that is a point that President Trump posted about on 476 00:23:58,400 --> 00:24:01,880 Speaker 9: truth Social earlier today and was originally floated by Defense 477 00:24:02,000 --> 00:24:05,199 Speaker 9: Secretary Pete Heigseth yesterday saying that it appeared to be 478 00:24:05,320 --> 00:24:08,480 Speaker 9: some sort of elevation issue. Now, for the Pentagon's part, 479 00:24:08,480 --> 00:24:12,240 Speaker 9: they say that they are conducting their own investigation into this. Remember, 480 00:24:12,359 --> 00:24:15,320 Speaker 9: the Pentagon says that this was a routine training mission 481 00:24:15,320 --> 00:24:18,880 Speaker 9: and they are not sure at this moment exactly went wrong. Now, 482 00:24:18,920 --> 00:24:22,520 Speaker 9: an Army official brief reporters yesterday saying that these were 483 00:24:22,680 --> 00:24:26,320 Speaker 9: experienced pilots to Joe. Apparently, the lead pilot had about 484 00:24:26,320 --> 00:24:29,720 Speaker 9: one thousand hours of flight training under his belt. That 485 00:24:29,920 --> 00:24:34,119 Speaker 9: is considered to be significant considering that helicopters often aren't 486 00:24:34,160 --> 00:24:36,800 Speaker 9: in the air for too long. Normally about two hours 487 00:24:36,800 --> 00:24:37,320 Speaker 9: at MAX. 488 00:24:38,920 --> 00:24:43,800 Speaker 4: Fascinating, Tyler, I mentioned this corridor that the helicopters have 489 00:24:43,880 --> 00:24:47,040 Speaker 4: been using. It seems the FAA has closed that off. Now, 490 00:24:47,040 --> 00:24:48,800 Speaker 4: what do you know about that? What can you tell 491 00:24:48,880 --> 00:24:51,520 Speaker 4: us anything else about the recovery effort on this second day? 492 00:24:54,119 --> 00:24:57,120 Speaker 9: Right, So that is suspended now indefinitely as the FAA 493 00:24:57,240 --> 00:25:01,040 Speaker 9: works alongside other federal agencies, including the end TSB on 494 00:25:01,280 --> 00:25:04,760 Speaker 9: this investigation. Now, the chief of DC Fire says that 495 00:25:04,920 --> 00:25:07,800 Speaker 9: divers in the Potomac River have accessed all the areas 496 00:25:07,880 --> 00:25:10,000 Speaker 9: accessible to them. That means that we are now moving 497 00:25:10,080 --> 00:25:12,679 Speaker 9: into a second phase of the recovery effort. We are 498 00:25:12,680 --> 00:25:15,760 Speaker 9: expecting divers to start removing courts of the plane today 499 00:25:15,800 --> 00:25:18,800 Speaker 9: in a bid to try to recover additional bodies. As 500 00:25:18,800 --> 00:25:21,840 Speaker 9: we've been reporting here on Bloomberg. Sadly, we are not 501 00:25:21,920 --> 00:25:25,040 Speaker 9: expecting any survivors from this Joe. As we know, there 502 00:25:25,080 --> 00:25:29,359 Speaker 9: were sixty four passengers on that commercial American Airliners aircraft 503 00:25:29,600 --> 00:25:32,080 Speaker 9: and three US service members who are on the US 504 00:25:32,200 --> 00:25:33,520 Speaker 9: Army Blackhawk helicopter. 505 00:25:35,000 --> 00:25:36,040 Speaker 3: Thank you so much, Tyler. 506 00:25:36,440 --> 00:25:38,440 Speaker 4: We'll get back with Tyler Kendall in the second hour 507 00:25:38,520 --> 00:25:42,480 Speaker 4: of Balance of Powers. She continues her reporting from Reagan 508 00:25:42,560 --> 00:25:46,920 Speaker 4: National Airport there in Terminal two with traffic getting back 509 00:25:46,960 --> 00:25:50,480 Speaker 4: to normal. Of course, this day after Doctor Allen Deal, 510 00:25:50,520 --> 00:25:53,840 Speaker 4: as I mentioned, former air safety investigator with the NTSB, 511 00:25:54,040 --> 00:25:56,760 Speaker 4: has actually been there at times like these and the 512 00:25:56,840 --> 00:26:01,359 Speaker 4: daunting task of rebuilding what happened and trying to answer 513 00:26:01,400 --> 00:26:05,640 Speaker 4: so many tough questions with so of course much pressure, 514 00:26:05,880 --> 00:26:08,119 Speaker 4: and in very difficult conditions at this point in an 515 00:26:08,320 --> 00:26:11,680 Speaker 4: icy Potomac River, Doctor Deale, I appreciate your time today. 516 00:26:11,680 --> 00:26:14,400 Speaker 4: I know you've been in high demand these last couple 517 00:26:14,440 --> 00:26:15,960 Speaker 4: of hours, and it's great to have you with us 518 00:26:16,000 --> 00:26:19,400 Speaker 4: here on Bloomberg. I just want to start wide open 519 00:26:19,440 --> 00:26:21,920 Speaker 4: your thoughts right now. So much has been said from 520 00:26:21,960 --> 00:26:25,600 Speaker 4: the investigators yesterday to politicians in Washington. There's a lot 521 00:26:25,640 --> 00:26:28,680 Speaker 4: of armchair quarterbacking going on. What should we be focused 522 00:26:28,720 --> 00:26:31,080 Speaker 4: on at this point in this investigation. 523 00:26:32,080 --> 00:26:37,160 Speaker 6: Yeah, there's an awful lot of investigation to be done. 524 00:26:38,080 --> 00:26:41,040 Speaker 6: As far as I know, they haven't read the Army 525 00:26:41,560 --> 00:26:45,480 Speaker 6: black Box. They have a combined reportedly have a combined 526 00:26:45,600 --> 00:26:50,520 Speaker 6: voice and data recorder on the Blackhawk, and that's probably 527 00:26:50,560 --> 00:26:54,440 Speaker 6: going to be the most critical piece of evidence. If 528 00:26:55,080 --> 00:26:59,680 Speaker 6: the speculation about the l tude deviations and the misidentifying 529 00:26:59,760 --> 00:27:06,320 Speaker 6: for apps of the American Airlines airliner for another airplane 530 00:27:06,320 --> 00:27:10,960 Speaker 6: in the area. All that should be answered by the 531 00:27:11,600 --> 00:27:15,800 Speaker 6: black box aboard the black Hall helicopter. I don't know 532 00:27:15,840 --> 00:27:17,720 Speaker 6: that they actually I think I've read that they have 533 00:27:17,840 --> 00:27:20,720 Speaker 6: that in their possession. I don't think they've read it yet. 534 00:27:21,359 --> 00:27:23,239 Speaker 6: The other issue is going to be whether or not 535 00:27:23,320 --> 00:27:26,560 Speaker 6: they were actually on the so called night vision goggles. 536 00:27:27,760 --> 00:27:31,359 Speaker 6: Those can be difficult to use. I'm not a helicopter pilot. 537 00:27:31,359 --> 00:27:36,000 Speaker 6: I've flown fixed wings out of that airport, and I've 538 00:27:36,040 --> 00:27:40,720 Speaker 6: flown in helicopters with night vision goggles, and they're designed 539 00:27:40,720 --> 00:27:43,600 Speaker 6: for tactical use. You're trying to find enemies that are 540 00:27:43,640 --> 00:27:48,080 Speaker 6: hiding from you, But using them in a urban environment, 541 00:27:48,119 --> 00:27:51,359 Speaker 6: if you will, might not be the best idea. But again, 542 00:27:51,680 --> 00:27:55,200 Speaker 6: this is these are things to be investigated right now. 543 00:27:55,280 --> 00:27:59,480 Speaker 6: All we can do is speculate. I guess about where 544 00:27:59,480 --> 00:28:02,920 Speaker 6: this investorstigation might go. But of course the NTSB is 545 00:28:02,960 --> 00:28:06,679 Speaker 6: going to look at every aspect of the people, the machines, 546 00:28:06,800 --> 00:28:07,680 Speaker 6: and the environment. 547 00:28:08,760 --> 00:28:10,600 Speaker 4: Well, I know there's a lot of speculation going on 548 00:28:10,720 --> 00:28:13,960 Speaker 4: right now, which is not always the friend of the investigator. Uh, doctor, 549 00:28:14,040 --> 00:28:16,120 Speaker 4: can you tell me the process once you get these 550 00:28:16,160 --> 00:28:18,399 Speaker 4: black boxes out of the water, what happens to them? 551 00:28:18,440 --> 00:28:20,040 Speaker 3: How are they treated? And where do they go? 552 00:28:21,320 --> 00:28:26,040 Speaker 6: Well, there's an NTSB lab actually a data recorder and 553 00:28:26,320 --> 00:28:30,720 Speaker 6: voice recorder lab about a mile from the accident site 554 00:28:30,720 --> 00:28:33,440 Speaker 6: in this case, and I believe they'll also be able 555 00:28:33,440 --> 00:28:36,919 Speaker 6: to read the military recorder, which is a much newer 556 00:28:36,920 --> 00:28:42,360 Speaker 6: device than than the American airlines uh uh aircraft had. 557 00:28:42,640 --> 00:28:46,120 Speaker 6: But they they first of all, they download the data. 558 00:28:46,320 --> 00:28:49,000 Speaker 10: Use may uh yeah, and uh. 559 00:28:49,400 --> 00:28:52,160 Speaker 6: Then they when it comes to the voice recorder, they 560 00:28:52,280 --> 00:28:53,800 Speaker 6: of course, you you want people that. 561 00:28:53,880 --> 00:28:57,640 Speaker 10: Knew the deceased to be in the room. Uh. 562 00:28:57,680 --> 00:29:00,640 Speaker 6: There's really not a lot of question as to who's speaking, 563 00:29:00,680 --> 00:29:07,120 Speaker 6: but you want people that knew those people to be present. 564 00:29:07,240 --> 00:29:10,360 Speaker 6: So they'll listen to the voice recorder with people that 565 00:29:10,440 --> 00:29:14,880 Speaker 6: are familiar with the individuals, and that will be that'll 566 00:29:14,880 --> 00:29:17,880 Speaker 6: take some time because they want to get the transcript 567 00:29:18,280 --> 00:29:22,280 Speaker 6: absolutely correct and everybody's got to agree that's actually the 568 00:29:22,320 --> 00:29:25,800 Speaker 6: words that were said. This is why the NTSB takes 569 00:29:25,800 --> 00:29:29,680 Speaker 6: its time releasing this information. The data recorder, of course, 570 00:29:29,760 --> 00:29:33,480 Speaker 6: is all electronic. It's probably going to take days to 571 00:29:33,520 --> 00:29:36,320 Speaker 6: get make sure that it's correct. And of course we've 572 00:29:36,320 --> 00:29:40,240 Speaker 6: got two vehicles here, the helicopter and the airliner. Again, 573 00:29:40,520 --> 00:29:44,560 Speaker 6: a lot of the elbow work in the NTSB lab, 574 00:29:44,960 --> 00:29:47,920 Speaker 6: like I said, which is a mile from the accident site. 575 00:29:48,840 --> 00:29:51,680 Speaker 4: Fascinating if I'm understanding you correctly. Though, the voice recorder, 576 00:29:51,720 --> 00:29:53,560 Speaker 4: knowing that they were about three four hundred feet off 577 00:29:53,600 --> 00:29:56,600 Speaker 4: the ground and this was very very quick in the 578 00:29:56,640 --> 00:29:58,600 Speaker 4: way that it happened, the voice recorder is what's going 579 00:29:58,680 --> 00:30:01,920 Speaker 4: to probably provide more insight than the data. 580 00:30:02,320 --> 00:30:03,120 Speaker 3: Is that fair to say? 581 00:30:04,200 --> 00:30:07,200 Speaker 6: Yeah, what I've said in my books is that the 582 00:30:07,720 --> 00:30:10,840 Speaker 6: data recorder normally tells you what happened. Listening to the 583 00:30:10,960 --> 00:30:14,440 Speaker 6: voice recorder this, you know, even things like the voice 584 00:30:14,440 --> 00:30:18,520 Speaker 6: inflections UH give you a lot of information about what 585 00:30:18,680 --> 00:30:21,240 Speaker 6: might have been going on in the in the heads 586 00:30:21,280 --> 00:30:25,440 Speaker 6: and minds of the of the pilots. I'm an aviation psychologist, 587 00:30:26,720 --> 00:30:29,880 Speaker 6: things like speaking mannerisms, and of course as you as 588 00:30:29,920 --> 00:30:33,200 Speaker 6: we get excited, our voice goes up and pitched. So 589 00:30:33,280 --> 00:30:36,600 Speaker 6: those are the kind of very subtle clues that the 590 00:30:36,640 --> 00:30:39,880 Speaker 6: investigators will be listening to. And of course the other 591 00:30:39,920 --> 00:30:44,880 Speaker 6: thing they'll do, particularly with the helicopter UH, is to 592 00:30:44,960 --> 00:30:46,640 Speaker 6: create an out of cockpit view. 593 00:30:46,680 --> 00:30:49,000 Speaker 10: It's called an ocometric. 594 00:30:48,640 --> 00:30:52,720 Speaker 6: Study, but so you know from each pilot's viewpoint if 595 00:30:53,520 --> 00:30:57,600 Speaker 6: this American airliner was obstructed by structure like the door 596 00:30:57,640 --> 00:31:03,040 Speaker 6: frames and so on. So again, i'll lot of forensic 597 00:31:03,120 --> 00:31:06,000 Speaker 6: work needs to be done, and the NTSB is going 598 00:31:06,080 --> 00:31:10,440 Speaker 6: to be very very careful and very meticulous about examining 599 00:31:10,840 --> 00:31:13,840 Speaker 6: things like this out of cockpit view, voice inflections, and 600 00:31:13,880 --> 00:31:18,720 Speaker 6: of course obviously the electronic data provided by the recorders 601 00:31:18,720 --> 00:31:21,680 Speaker 6: and the radar. So this has all got to be 602 00:31:21,760 --> 00:31:25,840 Speaker 6: correlated and validated before they're going to make any pronouncements. 603 00:31:25,880 --> 00:31:30,080 Speaker 6: So I can speculate, you know, as long as your 604 00:31:30,120 --> 00:31:34,200 Speaker 6: listeners know that this is the only speculation. But the 605 00:31:34,240 --> 00:31:38,200 Speaker 6: process is very arduous and very demanding, and it is 606 00:31:38,240 --> 00:31:42,320 Speaker 6: a team process. The Army will be there, the air 607 00:31:42,360 --> 00:31:47,360 Speaker 6: Traffic controller unions, the pilot unions, everybody works together on this. 608 00:31:47,480 --> 00:31:51,320 Speaker 6: Even though the NTSB is leading the investigation, there's a 609 00:31:51,320 --> 00:31:54,360 Speaker 6: lot of they call them parties to the investigation and 610 00:31:54,400 --> 00:31:57,240 Speaker 6: they all get to review the data and make sure 611 00:31:57,560 --> 00:31:59,320 Speaker 6: it is as advertised. 612 00:32:00,520 --> 00:32:02,160 Speaker 4: Doctor, I've only got about a minute left that I 613 00:32:02,240 --> 00:32:04,600 Speaker 4: want to have to cut you off. But I've never 614 00:32:04,680 --> 00:32:08,800 Speaker 4: talked to an aviation psychologist before. Would wearing night vision 615 00:32:08,840 --> 00:32:12,280 Speaker 4: goggles while flying a Blackhawk helicopter increase the stress load 616 00:32:12,320 --> 00:32:13,200 Speaker 4: on the pilot. 617 00:32:15,160 --> 00:32:16,400 Speaker 10: Particularly in this environment. 618 00:32:16,480 --> 00:32:21,080 Speaker 3: Yes, well that gets right to it. 619 00:32:21,200 --> 00:32:23,200 Speaker 10: Zero field of view and. 620 00:32:24,920 --> 00:32:28,360 Speaker 6: Debt perception is always not always the greatest. So now 621 00:32:28,440 --> 00:32:33,280 Speaker 6: remember that pilot, she's going for her annual check ride, 622 00:32:33,480 --> 00:32:38,320 Speaker 6: which requires her to demonstrate competence in NBG night vision goggles. 623 00:32:38,800 --> 00:32:42,040 Speaker 6: So it may will be that they were forced to 624 00:32:42,120 --> 00:32:45,400 Speaker 6: use those devices to complete her annual check ride. 625 00:32:45,760 --> 00:32:49,080 Speaker 10: I don't know. Of course, the instructor I was more experienced. 626 00:32:49,160 --> 00:32:51,600 Speaker 6: He may have been the one on the radio that 627 00:32:51,680 --> 00:32:55,800 Speaker 6: said we see the American Airline. All of that's got 628 00:32:55,800 --> 00:33:00,240 Speaker 6: to be correlated. Yes, NBGS our challenge, Thank. 629 00:33:00,320 --> 00:33:03,680 Speaker 4: Thank you doctor you got to come back Alan deal 630 00:33:03,880 --> 00:33:07,160 Speaker 4: former NTSB. We bring it right to the source here 631 00:33:07,160 --> 00:33:13,360 Speaker 4: on Balance of Power. Thanks for listening to the Balance 632 00:33:13,400 --> 00:33:17,040 Speaker 4: of Power podcast. Make sure to subscribe if you haven't already, 633 00:33:17,040 --> 00:33:20,360 Speaker 4: at Apple, Spotify, or wherever you get your podcasts, and 634 00:33:20,400 --> 00:33:23,040 Speaker 4: you can find us live every weekday from Washington, DC 635 00:33:23,200 --> 00:33:25,880 Speaker 4: at Noontimeeastern at Bloomberg dot com.