1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,600 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,440 --> 00:00:18,400 Speaker 2: with Lisa Bromwitz and a Marie Hordern. Join us each 4 00:00:18,480 --> 00:00:21,360 Speaker 2: day for insight from the best in markets, economics, and 5 00:00:21,400 --> 00:00:24,720 Speaker 2: geopolitics from our global headquarters in New York City. We 6 00:00:24,760 --> 00:00:27,400 Speaker 2: are live on Bloomberg Television weekday mornings from six to 7 00:00:27,480 --> 00:00:31,000 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify 8 00:00:31,200 --> 00:00:33,479 Speaker 2: or anywhere else you listen, and as always, on the 9 00:00:33,479 --> 00:00:37,280 Speaker 2: Bloomberg Terminal and the Bloomberg Business app. The Common Secretary 10 00:00:37,320 --> 00:00:39,440 Speaker 2: joins us now for more. Mister Secretary, thank you for 11 00:00:39,479 --> 00:00:41,040 Speaker 2: making time for us on a busy morning for you 12 00:00:41,120 --> 00:00:43,360 Speaker 2: and the team appreciate it. As always, let's talk about 13 00:00:43,360 --> 00:00:46,720 Speaker 2: those deadlines, those dates. Baseline tariff start on April fifth, 14 00:00:47,000 --> 00:00:49,880 Speaker 2: Higher tariff start on April ninth. What happens between now 15 00:00:50,159 --> 00:00:50,760 Speaker 2: and then. 16 00:00:53,159 --> 00:00:57,280 Speaker 3: Well it really We are talking to all the trade ministers, 17 00:00:57,280 --> 00:01:01,520 Speaker 3: but nothing really happens between now and then. What CEOs 18 00:01:01,560 --> 00:01:05,800 Speaker 3: are thinking about is, finally, let's think about building in America. 19 00:01:06,080 --> 00:01:09,880 Speaker 3: You've got almost five trillion dollars of commitments coming to 20 00:01:10,040 --> 00:01:13,280 Speaker 3: America to build their factories. That number is only going 21 00:01:13,319 --> 00:01:16,920 Speaker 3: to grow as people realize it's time to bring manufacturing 22 00:01:16,959 --> 00:01:20,720 Speaker 3: home to America, where the greatest economy and the greatest 23 00:01:20,760 --> 00:01:23,480 Speaker 3: market in the world is. It's time for America to 24 00:01:23,480 --> 00:01:26,440 Speaker 3: stop taking care of every other economy in the world 25 00:01:26,680 --> 00:01:30,119 Speaker 3: and building them up. Let's build the American economy up. 26 00:01:30,280 --> 00:01:34,000 Speaker 3: Let's build American GDP, and you're going to see great 27 00:01:34,160 --> 00:01:35,400 Speaker 3: growth from America. 28 00:01:35,520 --> 00:01:38,319 Speaker 2: Mister Secretary, as you know, capitals around the world watching 29 00:01:38,319 --> 00:01:40,960 Speaker 2: this program right now wants to understand what they can 30 00:01:41,040 --> 00:01:43,840 Speaker 2: do between now and then to avoid those tariffs. What 31 00:01:44,000 --> 00:01:46,840 Speaker 2: do they need to do. Have you communicated any metrics 32 00:01:46,840 --> 00:01:47,919 Speaker 2: to them, whatsoever. 33 00:01:50,280 --> 00:01:52,840 Speaker 3: Well, we've been talking to the trade ministers of the 34 00:01:52,880 --> 00:01:56,880 Speaker 3: major trading partners for more than a month, and we've 35 00:01:56,920 --> 00:02:00,000 Speaker 3: been talking to them, and so you have to understand it. 36 00:02:00,160 --> 00:02:03,000 Speaker 3: And this is what's difficult for your audience to understand. 37 00:02:03,120 --> 00:02:05,800 Speaker 3: That tariffs are easy to understand. Right, we have a 38 00:02:05,800 --> 00:02:08,520 Speaker 3: two and a half percent tariff on autos, and Europe 39 00:02:08,520 --> 00:02:12,360 Speaker 3: has a ten percent tariff, and other people have twenty 40 00:02:12,400 --> 00:02:15,880 Speaker 3: percent or fifteen percent tariff, and that's sort of easy, 41 00:02:15,919 --> 00:02:18,280 Speaker 3: so they can all come down. But it's the non 42 00:02:18,480 --> 00:02:22,280 Speaker 3: tariff trade barriers that are the difference. Some countries have 43 00:02:22,600 --> 00:02:25,920 Speaker 3: that and they take that that tax of twenty percent 44 00:02:26,320 --> 00:02:29,720 Speaker 3: and they use it to subsidize the production of their 45 00:02:29,880 --> 00:02:34,239 Speaker 3: domestic industries. That's why we can't sell cars there because 46 00:02:34,240 --> 00:02:37,440 Speaker 3: they give a rebate either they give it directly. One 47 00:02:37,520 --> 00:02:40,520 Speaker 3: country told me yesterday that they give it directly to 48 00:02:40,560 --> 00:02:44,160 Speaker 3: their car manufacturer to make their cars cheaper. That's why 49 00:02:44,200 --> 00:02:48,200 Speaker 3: they sell successfully and we don't. Others take the money 50 00:02:48,200 --> 00:02:52,120 Speaker 3: and use it and give cheap energy costs to this production. 51 00:02:52,240 --> 00:02:55,399 Speaker 3: And that's why the steel industry. Why is everybody else 52 00:02:55,440 --> 00:02:57,760 Speaker 3: so good at steel and we're not, It's because their 53 00:02:57,800 --> 00:03:02,320 Speaker 3: governments subsidize it. We really need to change the way 54 00:03:02,760 --> 00:03:06,680 Speaker 3: trade works around the world. It's tariffs, but don't get 55 00:03:06,720 --> 00:03:10,520 Speaker 3: confused that these non tariff trade barriers, they are the 56 00:03:10,639 --> 00:03:12,440 Speaker 3: monster that needs to be slaved. 57 00:03:12,560 --> 00:03:16,600 Speaker 2: You've been consistent about this argument subsidized production, manipulated currencies, 58 00:03:16,600 --> 00:03:19,320 Speaker 2: foreign trade barriers, something the President addressed just last night. 59 00:03:19,360 --> 00:03:21,480 Speaker 4: Can we just sit on the numbers just for a moment. 60 00:03:21,520 --> 00:03:24,720 Speaker 2: The EU twenty percent, twenty four percent on Japan, thirty 61 00:03:24,720 --> 00:03:27,920 Speaker 2: four percent on China. Just what exactly was the methodology 62 00:03:28,280 --> 00:03:30,880 Speaker 2: to go through all those different barriers to entry that 63 00:03:30,960 --> 00:03:32,000 Speaker 2: you want to knock down. 64 00:03:32,120 --> 00:03:33,560 Speaker 4: How did you come up with these numbers? 65 00:03:35,680 --> 00:03:39,440 Speaker 3: Well, the Council of Economic Advisors, you know, the PhD 66 00:03:39,760 --> 00:03:45,600 Speaker 3: economists of the administration, coupled with USTR, the United States 67 00:03:45,680 --> 00:03:48,840 Speaker 3: Trade Representative, they publish a book called Trade Barriers about 68 00:03:48,840 --> 00:03:52,440 Speaker 3: this thick right, and they've been analyzing for decades all 69 00:03:52,520 --> 00:03:57,000 Speaker 3: of these different tools that these other economies use to 70 00:03:57,480 --> 00:03:58,520 Speaker 3: hurt America. 71 00:03:58,920 --> 00:03:59,080 Speaker 5: Right. 72 00:03:59,160 --> 00:04:01,880 Speaker 3: They won't take our corn in India, they won't take 73 00:04:01,920 --> 00:04:05,600 Speaker 3: our beef almost anywhere, it's unbelievable. 74 00:04:05,640 --> 00:04:08,080 Speaker 5: They won't take our agricultural products. 75 00:04:08,160 --> 00:04:12,800 Speaker 3: They just treat us badly because we've allowed them to 76 00:04:12,920 --> 00:04:13,880 Speaker 3: treat us badly. 77 00:04:14,160 --> 00:04:16,240 Speaker 5: And when you finally go back at them and say 78 00:04:16,440 --> 00:04:17,200 Speaker 5: this has got to. 79 00:04:17,279 --> 00:04:19,560 Speaker 3: End, it's going to be tough for them because they've 80 00:04:19,560 --> 00:04:24,960 Speaker 3: built their whole social network, their whole economies on basically 81 00:04:25,320 --> 00:04:28,760 Speaker 3: exploiting America. And Donald Trump has said it's time for 82 00:04:28,839 --> 00:04:30,120 Speaker 3: America to change that. 83 00:04:30,440 --> 00:04:32,760 Speaker 5: It's going to be difficult for them to change that. 84 00:04:33,120 --> 00:04:36,320 Speaker 3: But eventually America is going to be treated fairly and 85 00:04:36,400 --> 00:04:42,240 Speaker 3: the production of American factories is going to the incredibly 86 00:04:42,320 --> 00:04:45,560 Speaker 3: strong growth and you're going to see that growth reverberate 87 00:04:45,720 --> 00:04:51,360 Speaker 3: through GDP. Remember, people forget the d gross domestic production. 88 00:04:51,720 --> 00:04:55,120 Speaker 3: If you buy a foreign made Toyota, that is not 89 00:04:55,240 --> 00:04:59,400 Speaker 3: domestic production. Making a car in America that's domestics. 90 00:04:59,480 --> 00:05:01,360 Speaker 2: It's a secondar We could just sit on the methodology 91 00:05:01,520 --> 00:05:03,960 Speaker 2: just for a beat longer and address it directly. This 92 00:05:04,080 --> 00:05:05,920 Speaker 2: is what we understand, what most people understand. 93 00:05:06,000 --> 00:05:06,440 Speaker 4: You did that. 94 00:05:06,560 --> 00:05:09,080 Speaker 2: Essentially, you divided the country's trade surplus with the United 95 00:05:09,080 --> 00:05:12,240 Speaker 2: States by the total exports and then divided the number 96 00:05:12,240 --> 00:05:15,640 Speaker 2: by two and produce this discounted rate. If you're a 97 00:05:15,680 --> 00:05:19,440 Speaker 2: trade partner right now and you've just watched how America's 98 00:05:19,480 --> 00:05:22,359 Speaker 2: put together that policy, how are you meant to negotiate 99 00:05:22,400 --> 00:05:22,720 Speaker 2: with that? 100 00:05:22,960 --> 00:05:24,560 Speaker 4: What are those countries meant to say? What are they 101 00:05:24,600 --> 00:05:25,040 Speaker 4: meant to do? 102 00:05:27,560 --> 00:05:33,120 Speaker 3: The country is understand that their trade policies were exploited, 103 00:05:34,040 --> 00:05:35,920 Speaker 3: in exploitation of America. 104 00:05:36,120 --> 00:05:37,479 Speaker 5: Everybody understands. 105 00:05:37,760 --> 00:05:41,279 Speaker 3: One country actually said to me, I was amazed that 106 00:05:41,320 --> 00:05:43,719 Speaker 3: we were able to get away with it for this long. 107 00:05:44,360 --> 00:05:45,280 Speaker 5: I mean, imagine that. 108 00:05:45,560 --> 00:05:48,680 Speaker 2: We share that country, Because they don't. They never say 109 00:05:48,680 --> 00:05:51,640 Speaker 2: this on the record. You've got the potential, the option, 110 00:05:51,760 --> 00:05:55,359 Speaker 2: the ability right now to share say it who's saying 111 00:05:55,400 --> 00:05:55,920 Speaker 2: that to you? 112 00:05:56,600 --> 00:05:58,239 Speaker 5: Come on, oh stop. 113 00:05:58,400 --> 00:06:02,080 Speaker 3: I mean the country told us that they give the 114 00:06:02,160 --> 00:06:03,560 Speaker 3: subsidy to the car companies. 115 00:06:03,600 --> 00:06:04,320 Speaker 5: Another country he. 116 00:06:04,400 --> 00:06:07,200 Speaker 3: Admitted that they give their subsidy to their steel companies. 117 00:06:07,480 --> 00:06:10,159 Speaker 3: I mean, they're not going to repeat it on here. 118 00:06:10,200 --> 00:06:13,200 Speaker 3: What's on here is that this is going to change. 119 00:06:13,560 --> 00:06:16,800 Speaker 3: That it's time for these things to change, and they're 120 00:06:16,800 --> 00:06:19,920 Speaker 3: going to be more fair and America is going to 121 00:06:19,920 --> 00:06:20,400 Speaker 3: do well. 122 00:06:20,440 --> 00:06:23,640 Speaker 5: And in the middle of that time, all the. 123 00:06:23,600 --> 00:06:25,719 Speaker 3: Factories are going to come back to America. You're going 124 00:06:25,760 --> 00:06:29,320 Speaker 3: to see an enormous number of factories come back to America, 125 00:06:29,440 --> 00:06:33,120 Speaker 3: or you're going to see incredible change globally. It's going 126 00:06:33,120 --> 00:06:35,680 Speaker 3: to take time, but the factories are going to be 127 00:06:35,680 --> 00:06:36,520 Speaker 3: built in America. 128 00:06:36,600 --> 00:06:38,000 Speaker 5: That's the most important thing. 129 00:06:38,279 --> 00:06:41,359 Speaker 3: Donald Trump wants to see steel and aluminum made in 130 00:06:41,400 --> 00:06:43,840 Speaker 3: America so we could defend ourselves. He's going to want 131 00:06:43,880 --> 00:06:47,799 Speaker 3: to see pharmaceuticals made in America. Who on your audience 132 00:06:47,880 --> 00:06:52,640 Speaker 3: doesn't want us to make the ingredients for pharmaceuticals todaybody 133 00:06:52,640 --> 00:06:56,799 Speaker 3: ever ask themselves why the ingredients for our drugs should 134 00:06:56,880 --> 00:07:00,680 Speaker 3: be made in China? Why is that that's not labor, 135 00:07:01,200 --> 00:07:05,680 Speaker 3: that's factor, that's high tech factories in China. Why because 136 00:07:05,720 --> 00:07:10,800 Speaker 3: their government helped create it. They created cheap goods there, 137 00:07:11,200 --> 00:07:15,000 Speaker 3: they oversupply them, They drive the capitalist American who don't 138 00:07:15,040 --> 00:07:17,520 Speaker 3: think like this out of business, and then they make 139 00:07:17,560 --> 00:07:18,280 Speaker 3: it in China. 140 00:07:18,400 --> 00:07:20,840 Speaker 5: And Donald Trump has said, I've had nothing. 141 00:07:21,440 --> 00:07:24,040 Speaker 2: It was the secretary. Most people weren't totally agree with you. 142 00:07:24,080 --> 00:07:27,440 Speaker 2: They would totally agree with you because China is an adversary. 143 00:07:27,840 --> 00:07:30,920 Speaker 2: It is not a partner for the United States. Europe 144 00:07:30,920 --> 00:07:33,840 Speaker 2: would make a very different argument. And Europe might be 145 00:07:33,880 --> 00:07:35,960 Speaker 2: wondering this morning why they're being thrown into the same 146 00:07:36,000 --> 00:07:41,280 Speaker 2: bunket as the Chinese. What explanation can you give them? 147 00:07:41,560 --> 00:07:46,080 Speaker 3: Europe does not treat our products fairly. They do not 148 00:07:46,280 --> 00:07:52,160 Speaker 3: treat our companies fairly. They treat themselves incredibly well, to 149 00:07:52,280 --> 00:07:54,640 Speaker 3: the detriment of the United States of America. 150 00:07:55,120 --> 00:07:57,720 Speaker 5: Right, it is time for them to treat us fairly. 151 00:07:58,240 --> 00:08:01,560 Speaker 3: And that is the point, is not it's not free 152 00:08:01,560 --> 00:08:04,760 Speaker 3: and fair trade there. Tariffs are higher, the non tariff 153 00:08:04,800 --> 00:08:09,120 Speaker 3: trade barriers are incredible. Like I'd asked you, why don't 154 00:08:09,160 --> 00:08:13,600 Speaker 3: they take our beef? Why don't they take our agricultural products? 155 00:08:14,000 --> 00:08:14,360 Speaker 5: Why? 156 00:08:14,640 --> 00:08:18,160 Speaker 3: Because they don't want them? Because they want to make 157 00:08:18,200 --> 00:08:21,680 Speaker 3: the money themselves. Why is it okay for every other 158 00:08:21,800 --> 00:08:25,040 Speaker 3: country to feel this way, and it's not okay for America. 159 00:08:25,080 --> 00:08:28,560 Speaker 3: I tell you why, because we were the world's piggybank. 160 00:08:29,000 --> 00:08:32,880 Speaker 3: And Donald Trump has said our thirty six trillion dollar deficit, 161 00:08:33,160 --> 00:08:37,360 Speaker 3: our one point two trillion dollar trade deficit, one point 162 00:08:37,400 --> 00:08:41,520 Speaker 3: two trillion dollars. We buy other people's things more than 163 00:08:41,559 --> 00:08:45,559 Speaker 3: we sell them. Ours has got to be rebalanced. It's 164 00:08:45,600 --> 00:08:50,559 Speaker 3: a national emergency. Let's fix America and we can. 165 00:08:51,559 --> 00:08:54,240 Speaker 6: Mister Secretary, for you, it's beef for the president. 166 00:08:54,280 --> 00:08:55,600 Speaker 4: I know it's Ford and Berlin's. 167 00:08:55,600 --> 00:08:58,760 Speaker 6: But there are products that Europe takes, things like LNG, 168 00:08:59,320 --> 00:09:02,640 Speaker 6: things like Microsoft services. Do you want to see balance 169 00:09:02,760 --> 00:09:04,680 Speaker 6: trade product by product? 170 00:09:07,240 --> 00:09:10,640 Speaker 5: No? No, no, it's not product by products. It's a 171 00:09:10,679 --> 00:09:12,800 Speaker 5: big macro issue. Okay. 172 00:09:13,280 --> 00:09:18,200 Speaker 3: Fairness comes when one decides that they can stop. They 173 00:09:18,240 --> 00:09:20,719 Speaker 3: can't get away with it any longer. So let's make 174 00:09:20,760 --> 00:09:23,320 Speaker 3: a great deal with the United States of America. Okay, 175 00:09:23,200 --> 00:09:26,920 Speaker 3: They've got core issues. They have a that tax of 176 00:09:27,040 --> 00:09:30,600 Speaker 3: twenty percent or twenty Europe has twenty one percent. I mean, 177 00:09:30,640 --> 00:09:33,160 Speaker 3: so when our goods are sold there, we pay twenty 178 00:09:33,200 --> 00:09:33,680 Speaker 3: one percent. 179 00:09:33,720 --> 00:09:36,160 Speaker 5: They say, everybody pays that, and then they. 180 00:09:36,120 --> 00:09:40,000 Speaker 3: Use that money to beat us down in other ways. 181 00:09:40,080 --> 00:09:42,480 Speaker 5: I mean, come on, we need to. 182 00:09:42,480 --> 00:09:47,080 Speaker 3: Have fair trade macro, not product by product. But I 183 00:09:47,120 --> 00:09:49,880 Speaker 3: think the way Donald Trump looks at it is country 184 00:09:50,240 --> 00:09:51,119 Speaker 3: by country. 185 00:09:51,600 --> 00:09:53,680 Speaker 5: And what's going to happen is you're going to see 186 00:09:53,800 --> 00:09:55,480 Speaker 5: domestic production grow. 187 00:09:56,200 --> 00:09:59,079 Speaker 3: You're going to see interest rates come down in America. 188 00:09:59,320 --> 00:10:02,920 Speaker 3: You're going to see growth in America, great jobs in America. 189 00:10:03,440 --> 00:10:05,520 Speaker 5: Robotics is going to come to America. 190 00:10:05,520 --> 00:10:09,200 Speaker 3: It's going to replace cheap labor overseas. Robots can make things, 191 00:10:09,240 --> 00:10:11,800 Speaker 3: you know what, the job there's going to be mechanics 192 00:10:12,080 --> 00:10:16,040 Speaker 3: who fix robots, kind of like a high end BMW. 193 00:10:16,280 --> 00:10:18,520 Speaker 3: Robots are going to need to be fixed, and those 194 00:10:18,600 --> 00:10:21,120 Speaker 3: jobs are going to be high paying jobs, and they're 195 00:10:21,160 --> 00:10:22,000 Speaker 3: going to be here. 196 00:10:22,400 --> 00:10:24,240 Speaker 5: We're tired of them being overseas. 197 00:10:25,679 --> 00:10:28,480 Speaker 6: For some countries, there's the ten percent base. That's the 198 00:10:28,520 --> 00:10:30,520 Speaker 6: only levee that they were hit with yesterday. I'm think, 199 00:10:30,520 --> 00:10:32,880 Speaker 6: give you United Kingdom. I think of Australia. But those 200 00:10:32,880 --> 00:10:35,439 Speaker 6: countries have a trade surplus with the United States. 201 00:10:35,760 --> 00:10:36,880 Speaker 4: So why put the terrify on. 202 00:10:39,240 --> 00:10:42,320 Speaker 3: Well, I think the President understands that all of these 203 00:10:42,360 --> 00:10:44,520 Speaker 3: countries even if they have a trade surplus, if you 204 00:10:44,559 --> 00:10:47,480 Speaker 3: dig into it, like for instance, the UK, there are 205 00:10:47,520 --> 00:10:52,000 Speaker 3: trade surplus counts that they have this London Medals exchange. 206 00:10:51,480 --> 00:10:55,040 Speaker 5: And so gold and silver bullion going in counts. I mean, 207 00:10:55,200 --> 00:10:56,920 Speaker 5: come on, that doesn't really count. 208 00:10:57,160 --> 00:11:01,120 Speaker 3: So and Australia, which is one wonderful partner of ours, 209 00:11:01,280 --> 00:11:03,440 Speaker 3: they buy a lot of our planes, right, and if 210 00:11:03,480 --> 00:11:06,120 Speaker 3: you buy our commodity gas, I mean, that's really what 211 00:11:06,200 --> 00:11:08,560 Speaker 3: you need, not really what we need to sell you. 212 00:11:08,600 --> 00:11:09,439 Speaker 5: It's not the same. 213 00:11:09,840 --> 00:11:13,719 Speaker 3: So the President decided, why don't we have a baseline 214 00:11:13,760 --> 00:11:18,199 Speaker 3: of ten percent? Okay, to really understand that everybody needs 215 00:11:18,280 --> 00:11:21,840 Speaker 3: our economy. Our economy is the magnet of the world. 216 00:11:22,200 --> 00:11:23,520 Speaker 5: Everybody needs our economy. 217 00:11:23,600 --> 00:11:28,120 Speaker 3: Let's them pay coming in and let's change that deficit 218 00:11:28,200 --> 00:11:31,719 Speaker 3: of one point two trillion dollars, and let's make America's 219 00:11:31,800 --> 00:11:36,840 Speaker 3: economy grow and let's balance that out. Let's fix that first, 220 00:11:37,240 --> 00:11:39,400 Speaker 3: and then we'll go and readdress the rest of the world. 221 00:11:39,480 --> 00:11:41,960 Speaker 3: But we need to fix our trade deficit one point 222 00:11:42,000 --> 00:11:47,079 Speaker 3: two trillion dollars. It's unbelievable. Why we don't have those 223 00:11:47,200 --> 00:11:48,920 Speaker 3: jobs and the rest of the world does. 224 00:11:50,160 --> 00:11:53,080 Speaker 6: Treasury Secretary Scott Besson told me last night, this is 225 00:11:53,120 --> 00:11:56,160 Speaker 6: a ceiling. Potentially we can see a different floor. Are 226 00:11:56,200 --> 00:11:59,440 Speaker 6: you prepared to negotiate all of these rates? 227 00:11:59,520 --> 00:11:59,760 Speaker 7: Is that? 228 00:12:00,080 --> 00:12:01,920 Speaker 6: Is this truly the start of the negotiation. 229 00:12:04,640 --> 00:12:07,880 Speaker 3: Well, it's the start of a rebalancing of the way 230 00:12:07,920 --> 00:12:12,040 Speaker 3: the world works. I agree with the Secretary that our 231 00:12:12,200 --> 00:12:15,160 Speaker 3: view is that the only way these rates are going 232 00:12:15,280 --> 00:12:18,760 Speaker 3: up is if countries decide to retaliate. But why would 233 00:12:18,800 --> 00:12:22,520 Speaker 3: you retaliate against your biggest client, your biggest clients? 234 00:12:22,600 --> 00:12:23,840 Speaker 5: Is I want to reorder things. 235 00:12:23,880 --> 00:12:26,160 Speaker 3: I mean, the United States of America is the largest 236 00:12:26,160 --> 00:12:28,840 Speaker 3: client in the world. And yes, of course the countries 237 00:12:28,840 --> 00:12:31,640 Speaker 3: are going to talk to us, but they talk too casually. 238 00:12:31,679 --> 00:12:34,679 Speaker 3: They always talk about their tariff rates. I mean it's 239 00:12:35,400 --> 00:12:37,360 Speaker 3: like they say, oh, I'm going to cut my tariff. 240 00:12:37,400 --> 00:12:37,559 Speaker 8: Right. 241 00:12:37,679 --> 00:12:40,080 Speaker 3: You think the reason we don't sell a car is 242 00:12:40,120 --> 00:12:42,600 Speaker 3: because Europe charges a ten percent tariff and we were 243 00:12:42,600 --> 00:12:43,760 Speaker 3: only charging two and a half. 244 00:12:44,240 --> 00:12:47,400 Speaker 5: That was outrageous. But the key is they. 245 00:12:47,280 --> 00:12:51,040 Speaker 3: Have all these rules, rules and rules and rules. Like 246 00:12:51,240 --> 00:12:54,280 Speaker 3: one of my favorites is the Koreans. When we made 247 00:12:54,320 --> 00:12:56,079 Speaker 3: a deal with them in twenty twelve, we took their 248 00:12:56,120 --> 00:12:58,839 Speaker 3: cars right, Kia and Hundai, and we were going to 249 00:12:58,920 --> 00:13:02,760 Speaker 3: sell agricultural products to them, right, And when McDonald's went to. 250 00:13:02,760 --> 00:13:05,120 Speaker 5: Send in French fries, they wouldn't. 251 00:13:04,840 --> 00:13:08,079 Speaker 3: Let them go in because we couldn't prove the origin 252 00:13:08,360 --> 00:13:09,240 Speaker 3: of the potato. 253 00:13:09,840 --> 00:13:12,800 Speaker 5: I mean, you don't understand the scale and. 254 00:13:12,840 --> 00:13:15,400 Speaker 3: Depth of how they keep our products out. 255 00:13:15,760 --> 00:13:18,640 Speaker 5: And Donald Trump has said I've had enough. We are 256 00:13:18,679 --> 00:13:19,959 Speaker 5: going to be treated better. 257 00:13:20,120 --> 00:13:24,280 Speaker 3: America is going to be treated better, and that starts today. 258 00:13:24,000 --> 00:13:26,720 Speaker 2: Missus Sancrigy, Why exactly wasn't Russia on that list yesterday? 259 00:13:29,080 --> 00:13:35,640 Speaker 3: Because we have sanctions against Russia, North Korea, Belarus, and Cuba, 260 00:13:36,080 --> 00:13:38,400 Speaker 3: and so we're not supposed to be trading with them. 261 00:13:38,520 --> 00:13:39,480 Speaker 4: Thanks for clearing that out. 262 00:13:39,520 --> 00:13:42,320 Speaker 2: The additional question that other people had too about Mexico 263 00:13:42,360 --> 00:13:44,679 Speaker 2: and Canada, they were also noticeably absent. 264 00:13:44,880 --> 00:13:45,800 Speaker 4: Why would they absent? 265 00:13:47,800 --> 00:13:51,880 Speaker 3: Well, they are operating under a rule that was set 266 00:13:52,200 --> 00:13:54,960 Speaker 3: on for fentanyl, right that they needed to close the 267 00:13:55,000 --> 00:13:58,160 Speaker 3: border and stop fentanyl. And what that rule is that 268 00:13:58,360 --> 00:14:05,080 Speaker 3: USMCA major trading is exempt, right, and the other products 269 00:14:05,080 --> 00:14:07,600 Speaker 3: that they do have a twenty five percent tariff when 270 00:14:07,840 --> 00:14:10,600 Speaker 3: that is resolved, So we're not going to double count it. 271 00:14:10,679 --> 00:14:12,400 Speaker 5: That's just not the way it works. 272 00:14:12,880 --> 00:14:16,440 Speaker 3: When that's resolved, they will fall into a model like this. 273 00:14:16,800 --> 00:14:20,760 Speaker 3: But I think USMCA in the order, USMCA continues to 274 00:14:20,800 --> 00:14:24,920 Speaker 3: be exempted. So car parts, for instance, don't come with 275 00:14:25,080 --> 00:14:26,600 Speaker 3: a tariff if they end. 276 00:14:26,560 --> 00:14:29,240 Speaker 5: Up being finished in American car. 277 00:14:29,160 --> 00:14:32,360 Speaker 3: So if you're building your car in America and you're 278 00:14:32,440 --> 00:14:35,280 Speaker 3: getting parts from Canada and Mexico, that's fine. 279 00:14:35,320 --> 00:14:38,520 Speaker 5: The American cars still come with no terror. 280 00:14:38,720 --> 00:14:40,800 Speaker 2: Okay, that's how full The additional question we had on 281 00:14:40,880 --> 00:14:42,320 Speaker 2: just a few numbers because we're all trying to make 282 00:14:42,320 --> 00:14:44,240 Speaker 2: sense of this in real time, and you've got the numbers. 283 00:14:44,760 --> 00:14:48,120 Speaker 2: What's the tariff on China? Now, the complete tariff including everything? 284 00:14:48,120 --> 00:14:48,840 Speaker 2: What is that number? 285 00:14:48,840 --> 00:14:53,760 Speaker 3: Now, Well, there was a twenty percent tariff because they 286 00:14:53,840 --> 00:14:57,640 Speaker 3: continue to make the ingredients for fentanel and send them 287 00:14:57,680 --> 00:15:03,640 Speaker 3: out right, and those ingredients have the highest subsidy rate 288 00:15:03,800 --> 00:15:08,560 Speaker 3: in China, meaning the Chinese government is paying these factories 289 00:15:08,640 --> 00:15:12,800 Speaker 3: to make these goods that the ingredients for fentanyl, which 290 00:15:12,840 --> 00:15:16,880 Speaker 3: is killing Americans. Right, So Donald Trump put a twenty 291 00:15:16,880 --> 00:15:22,200 Speaker 3: percent taff on that, and now the regular trade deficit number. 292 00:15:22,600 --> 00:15:22,800 Speaker 5: Right. 293 00:15:22,800 --> 00:15:25,440 Speaker 3: The analysis by the Council of Economic Advisors and the 294 00:15:25,480 --> 00:15:29,160 Speaker 3: United States Trade representative, we have a thirty four percent TAFT, 295 00:15:29,200 --> 00:15:32,520 Speaker 3: so it's fifty four percent. But when they stop making 296 00:15:32,560 --> 00:15:35,120 Speaker 3: the ingredients for fentanyl. And I want to point out, 297 00:15:35,120 --> 00:15:40,040 Speaker 3: in twenty nineteen, President Chi told President Trump that he 298 00:15:40,040 --> 00:15:43,120 Speaker 3: would put the death penalty on anyone who made fentanyl, 299 00:15:43,760 --> 00:15:47,080 Speaker 3: and now he's actually subsidizing them. 300 00:15:47,320 --> 00:15:51,320 Speaker 5: And that's just it's just so so so. 301 00:15:51,840 --> 00:15:55,200 Speaker 3: Wrong that Donald Trump is just he's not going to 302 00:15:55,240 --> 00:15:56,720 Speaker 3: stand for it, and he's got to hit them with 303 00:15:56,760 --> 00:15:59,960 Speaker 3: the only thing you get, which is economic. 304 00:15:59,480 --> 00:16:02,640 Speaker 6: China as well, on China as well. What about the 305 00:16:02,680 --> 00:16:04,560 Speaker 6: three oh one terrifs that we're put in place under 306 00:16:04,560 --> 00:16:06,360 Speaker 6: Trump one point zero and then carried on to the 307 00:16:06,480 --> 00:16:09,840 Speaker 6: Biden administration, it's about twenty five percent. Are those still 308 00:16:09,840 --> 00:16:12,480 Speaker 6: in place? Do they get added to this cumulative number? 309 00:16:14,440 --> 00:16:14,760 Speaker 5: They do? 310 00:16:14,920 --> 00:16:18,560 Speaker 3: Indeed, but those are on specific product segments and those 311 00:16:18,600 --> 00:16:19,680 Speaker 3: still are as well. 312 00:16:19,840 --> 00:16:20,760 Speaker 5: Autos are not. 313 00:16:20,880 --> 00:16:23,440 Speaker 6: So we're talking about seventy nine. So we're talking about 314 00:16:23,480 --> 00:16:27,480 Speaker 6: seventy nine percent for some imports cumulative, we're talking about 315 00:16:27,480 --> 00:16:30,040 Speaker 6: a seventy nine percent tariff from China. 316 00:16:30,120 --> 00:16:31,200 Speaker 8: Is that accurate. 317 00:16:32,920 --> 00:16:35,120 Speaker 5: On certain products? That could be true? 318 00:16:35,280 --> 00:16:37,840 Speaker 3: Sure, but they've got to stop the UA All they 319 00:16:37,880 --> 00:16:40,520 Speaker 3: have to have is a phone call. All they have 320 00:16:40,560 --> 00:16:42,960 Speaker 3: to have is a phone call from President She to 321 00:16:43,040 --> 00:16:46,680 Speaker 3: President Trump saying I'm going to in fentnyl production that's 322 00:16:46,760 --> 00:16:49,880 Speaker 3: killing Americans and it drops twenty percent. I mean, that's 323 00:16:49,920 --> 00:16:52,720 Speaker 3: a pretty inexpensive phone call. But you have to make 324 00:16:52,760 --> 00:16:55,520 Speaker 3: the decision. You got to stop killing Americans, and so 325 00:16:55,680 --> 00:16:56,840 Speaker 3: far they haven't. 326 00:16:56,600 --> 00:16:57,400 Speaker 5: Made that decision. 327 00:16:57,920 --> 00:17:00,560 Speaker 3: Shocking that they haven't made that decision, And you really 328 00:17:00,560 --> 00:17:00,840 Speaker 3: got to. 329 00:17:00,840 --> 00:17:02,880 Speaker 5: Think about that for a minute. Think about that for 330 00:17:02,920 --> 00:17:03,280 Speaker 5: a minute. 331 00:17:03,360 --> 00:17:07,040 Speaker 3: A phone call would save them twenty percent on all 332 00:17:07,119 --> 00:17:10,840 Speaker 3: their products, but they'd have to stop making the ingredients 333 00:17:10,880 --> 00:17:14,639 Speaker 3: of fentanyl, and they refuse outrageous. 334 00:17:14,680 --> 00:17:17,080 Speaker 6: Has your counterpart reached out to set up that phone 335 00:17:17,080 --> 00:17:18,959 Speaker 6: call between President Trump and Shojipeing? 336 00:17:21,480 --> 00:17:24,720 Speaker 5: You know, President Trump and President. 337 00:17:24,320 --> 00:17:27,320 Speaker 3: She, they have away, they're not going to be when 338 00:17:27,320 --> 00:17:29,520 Speaker 3: their phone call gets made. I don't think they're asking 339 00:17:29,560 --> 00:17:31,880 Speaker 3: me to set it up. I think that's above. 340 00:17:31,640 --> 00:17:32,760 Speaker 4: Me and missus Secretary. 341 00:17:32,760 --> 00:17:35,080 Speaker 2: Does that tell you something about maybe the lenforce you 342 00:17:35,160 --> 00:17:37,960 Speaker 2: think you have, perhaps you don't have over the Chinese. 343 00:17:38,000 --> 00:17:39,800 Speaker 2: The fact that they aren't reaching down, they aren't doing 344 00:17:39,840 --> 00:17:42,359 Speaker 2: those things, despite the fact you've put taras up as 345 00:17:42,440 --> 00:17:43,000 Speaker 2: much as you have. 346 00:17:45,800 --> 00:17:46,400 Speaker 5: Well, we'll see. 347 00:17:46,440 --> 00:17:50,119 Speaker 3: Remember these tariffs are just going into place, and you know, 348 00:17:50,440 --> 00:17:53,239 Speaker 3: I think they will have that phone call and they 349 00:17:53,280 --> 00:17:56,520 Speaker 3: will have lots of conversation together. I think for me, 350 00:17:57,440 --> 00:17:59,760 Speaker 3: the greatest thing for me is that Donald Trump is 351 00:17:59,760 --> 00:18:03,000 Speaker 3: sitting behind the resolute desk and the Oval office and 352 00:18:03,080 --> 00:18:05,879 Speaker 3: he is the greatest dealmaker and he will decide how 353 00:18:05,960 --> 00:18:08,600 Speaker 3: he wants to play his hand. But the way he's 354 00:18:08,640 --> 00:18:11,359 Speaker 3: played his hand now is he's been talking about this for. 355 00:18:11,280 --> 00:18:12,199 Speaker 5: Thirty five years. 356 00:18:12,359 --> 00:18:16,280 Speaker 3: He wants to reorder trade, to have the world stop 357 00:18:16,400 --> 00:18:20,000 Speaker 3: exploiting us, to bring the factories back, to bring employment back. 358 00:18:20,040 --> 00:18:22,480 Speaker 3: You know, no one thought about when NAFTA, which he 359 00:18:22,600 --> 00:18:25,800 Speaker 3: called yesterday the worst trade deal ever. When NAFTA did 360 00:18:25,840 --> 00:18:30,440 Speaker 3: it gave Canada and Mexico sort of the economic right 361 00:18:30,520 --> 00:18:33,200 Speaker 3: to be a state of the United States without paying 362 00:18:33,240 --> 00:18:36,680 Speaker 3: federal tax and without respecting the Constitution. But you could 363 00:18:36,680 --> 00:18:40,360 Speaker 3: build in Mexico and drive to Texas and build in Canada, 364 00:18:40,480 --> 00:18:43,760 Speaker 3: just drive across the border. Was all fine, and no, 365 00:18:44,920 --> 00:18:48,600 Speaker 3: you know, economically equal to being Alabama and Georgia. Yeah, 366 00:18:48,680 --> 00:18:52,199 Speaker 3: And so what happened is our manufacturing left America and 367 00:18:52,280 --> 00:18:55,440 Speaker 3: put those Americans out of jobs, and Donald Trump wants 368 00:18:55,480 --> 00:18:59,560 Speaker 3: to bring back factories, bring back those jobs, and they 369 00:18:59,600 --> 00:19:03,520 Speaker 3: can come back. Five trillion dollars worth of commitments to 370 00:19:03,600 --> 00:19:07,920 Speaker 3: bring back those jobs is pretty unbelievably impressive, and that's 371 00:19:07,920 --> 00:19:09,120 Speaker 3: what Donald Trump's capable. 372 00:19:09,520 --> 00:19:12,080 Speaker 2: Also impressive is the sound of demonic and a big 373 00:19:12,160 --> 00:19:14,880 Speaker 2: question the markets, asking how much pain you're willing to tolerate. 374 00:19:15,240 --> 00:19:18,200 Speaker 2: The SMP's down by three point seven percent, the dollar 375 00:19:18,280 --> 00:19:21,440 Speaker 2: is being sold quite aggressively against the euro. Was saying 376 00:19:21,440 --> 00:19:24,200 Speaker 2: one of the biggest moves we've seen in the last decade, 377 00:19:24,440 --> 00:19:26,760 Speaker 2: mister secretary, how much pain are you willing to tolerate? 378 00:19:26,760 --> 00:19:29,200 Speaker 2: How much market pain are you willing to tolerate? 379 00:19:31,760 --> 00:19:35,359 Speaker 3: Donald Trump has focused on the economic pain that the 380 00:19:35,440 --> 00:19:39,439 Speaker 3: United States of America has suffered over decades since NAFTA, 381 00:19:39,640 --> 00:19:45,760 Speaker 3: ninety thousand factories, not jobs, factories, five million high paying 382 00:19:45,920 --> 00:19:51,239 Speaker 3: jobs gone overseas. He's focused on the US worker and 383 00:19:51,280 --> 00:19:54,920 Speaker 3: the US economy. And what's going to happen is people 384 00:19:54,960 --> 00:19:58,439 Speaker 3: are going to realize it is the great American economy 385 00:19:58,520 --> 00:20:01,720 Speaker 3: that is the winner here, and anyone who doubts it, 386 00:20:01,760 --> 00:20:05,040 Speaker 3: and anybody who shorts Donald Trump or anybody who doubts 387 00:20:05,080 --> 00:20:08,199 Speaker 3: the strength and the power of the American economy is 388 00:20:08,280 --> 00:20:09,840 Speaker 3: making a foolish bet. 389 00:20:10,280 --> 00:20:14,000 Speaker 5: Sure, importers are going to have a tough time figuring. 390 00:20:13,640 --> 00:20:15,879 Speaker 3: Out what to do because they went and found the 391 00:20:15,960 --> 00:20:18,560 Speaker 3: cheapest production in the world. It's time to bring that 392 00:20:18,640 --> 00:20:22,160 Speaker 3: production home, to have the smart, amazing people who run 393 00:20:22,240 --> 00:20:23,840 Speaker 3: American companies figure it out. 394 00:20:24,200 --> 00:20:26,080 Speaker 5: Bring robotics back to America. 395 00:20:26,119 --> 00:20:30,480 Speaker 3: And I would say that United States domestic growth is 396 00:20:30,560 --> 00:20:34,760 Speaker 3: going to have the greatest resurgence ever under Donald Trump, 397 00:20:34,840 --> 00:20:37,880 Speaker 3: and that's what he has set in motion yesterday. 398 00:20:38,000 --> 00:20:41,160 Speaker 2: You'll accept it takes time to engineer a supply side response, though, sir, 399 00:20:41,600 --> 00:20:44,399 Speaker 2: and in the mad time you can see bad things happen. 400 00:20:44,520 --> 00:20:45,199 Speaker 4: Do you accept that? 401 00:20:47,600 --> 00:20:48,719 Speaker 5: Well, what I can accept. 402 00:20:48,760 --> 00:20:52,680 Speaker 3: Of course, takes time to build factories, but companies understand 403 00:20:52,720 --> 00:20:55,320 Speaker 3: how to do it, they will do it. The United 404 00:20:55,359 --> 00:20:58,520 Speaker 3: States of America is the greatest economy in the world. 405 00:20:58,840 --> 00:21:00,719 Speaker 5: People have to do business with it. 406 00:21:01,080 --> 00:21:04,480 Speaker 3: The rest of the world will bring down their trade 407 00:21:04,520 --> 00:21:08,280 Speaker 3: barriers and you'll see a great resurgence in our ability 408 00:21:08,359 --> 00:21:13,000 Speaker 3: to sell agriculture overseas. You'll see factories being built here 409 00:21:13,000 --> 00:21:16,080 Speaker 3: and that factory production will be faster. So sure, there 410 00:21:16,119 --> 00:21:19,199 Speaker 3: will be a rebalancing of those who make things in 411 00:21:19,320 --> 00:21:21,640 Speaker 3: cheap labor markets figuring. 412 00:21:21,200 --> 00:21:22,880 Speaker 5: Out how to make them here. 413 00:21:23,320 --> 00:21:26,680 Speaker 3: But ultimately speaking, and I think in much less time 414 00:21:26,760 --> 00:21:30,320 Speaker 3: than you think, the world will reorder itself, will figure 415 00:21:30,320 --> 00:21:34,200 Speaker 3: it out, and the United States growth rate will turbocharge 416 00:21:34,200 --> 00:21:36,400 Speaker 3: compared to the rest of the world. We've been too 417 00:21:36,480 --> 00:21:39,480 Speaker 3: close to them because we've been Our presidents have been 418 00:21:39,520 --> 00:21:40,800 Speaker 3: presidents of the world. 419 00:21:41,080 --> 00:21:44,120 Speaker 5: And Donald Trump ran on the policy that. 420 00:21:44,119 --> 00:21:46,320 Speaker 3: He was going to be the president of the United 421 00:21:46,320 --> 00:21:49,159 Speaker 3: States of the workers of the United States, and he 422 00:21:49,280 --> 00:21:52,919 Speaker 3: was going to place American workers first. And that's what 423 00:21:53,040 --> 00:21:56,800 Speaker 3: he did yesterday. And that's what everybody's feeling. Those workers 424 00:21:56,840 --> 00:22:00,800 Speaker 3: have been disrespected and now they're going to be respected. 425 00:22:00,840 --> 00:22:02,760 Speaker 2: To miss the secretary, just the final question, if we 426 00:22:02,840 --> 00:22:06,240 Speaker 2: might any course schedule for today with the Europeans to 427 00:22:06,359 --> 00:22:09,320 Speaker 2: those negotiations start this morning immediately. Can you give us 428 00:22:09,320 --> 00:22:10,000 Speaker 2: a sense of things? 429 00:22:12,480 --> 00:22:16,239 Speaker 3: Absolutely, we are our teams are talking to all the 430 00:22:16,280 --> 00:22:20,240 Speaker 3: great trading partners today and we are available for our great. 431 00:22:20,040 --> 00:22:21,520 Speaker 5: Trading partners every day. 432 00:22:21,920 --> 00:22:25,040 Speaker 3: It is time for them to do deep soul searching 433 00:22:25,240 --> 00:22:27,960 Speaker 3: of how they treat us poorly and how. 434 00:22:27,760 --> 00:22:30,240 Speaker 5: To make it right. It is time for them to 435 00:22:30,280 --> 00:22:30,640 Speaker 5: do that. 436 00:22:30,640 --> 00:22:33,040 Speaker 3: That is going to be difficult for them because they've 437 00:22:33,040 --> 00:22:35,159 Speaker 3: taken advantage of US for so long. 438 00:22:35,520 --> 00:22:36,440 Speaker 5: They should just. 439 00:22:36,480 --> 00:22:40,120 Speaker 3: Be disappointed that the free ride is over. It's time 440 00:22:40,160 --> 00:22:42,760 Speaker 3: for them to be realistic and to change the way 441 00:22:42,800 --> 00:22:45,119 Speaker 3: they look at the United States of America. And I 442 00:22:45,119 --> 00:22:46,840 Speaker 3: think that's going to happen starting today. 443 00:22:46,920 --> 00:22:49,240 Speaker 2: I think it's changing in real time, so in many ways, 444 00:22:49,359 --> 00:22:51,919 Speaker 2: Miss the Secretary, appreciate your time. The US COMMAS Secretary 445 00:22:51,920 --> 00:22:55,399 Speaker 2: Hammut Latinik on the trade tariffs announced overnight from the 446 00:22:55,480 --> 00:23:07,480 Speaker 2: United States of America. Joining US now for the next 447 00:23:07,520 --> 00:23:10,520 Speaker 2: thirty minutes or so, the perfect guest. Jim's out, the 448 00:23:10,600 --> 00:23:13,040 Speaker 2: president of Apollo Global Management. Jim, it's good to see you. 449 00:23:13,080 --> 00:23:14,399 Speaker 8: Good morning, good morning as always. 450 00:23:14,440 --> 00:23:16,600 Speaker 2: Congratulations on the new title, because how mu's focus to 451 00:23:16,640 --> 00:23:17,440 Speaker 2: you for a number of months. 452 00:23:17,480 --> 00:23:17,880 Speaker 5: Thank you. 453 00:23:18,640 --> 00:23:21,640 Speaker 8: It's been a long journey and I appreciate the note. 454 00:23:21,720 --> 00:23:24,640 Speaker 2: Well, let's get straight into it. You've called it macro paralysis. 455 00:23:24,800 --> 00:23:25,520 Speaker 4: What is it now? 456 00:23:26,400 --> 00:23:26,960 Speaker 5: Well it is. 457 00:23:27,000 --> 00:23:30,120 Speaker 8: I mean, I sit here this morning and this really 458 00:23:30,160 --> 00:23:33,280 Speaker 8: can't be a surprise. The reality of the surprise is 459 00:23:33,280 --> 00:23:35,800 Speaker 8: a little bit more painful for everybody to digest. But 460 00:23:36,119 --> 00:23:39,640 Speaker 8: this administration was very clear during the campaign what their 461 00:23:39,680 --> 00:23:43,719 Speaker 8: objective was. They really wanted to revitalize American industry. They 462 00:23:43,760 --> 00:23:47,560 Speaker 8: wanted to bring back manufacturing, focus on energy, focus on 463 00:23:47,640 --> 00:23:52,600 Speaker 8: industrial renaissance, and tariffs. As Amrita said, tariffs, taxes, and 464 00:23:52,640 --> 00:23:55,639 Speaker 8: deregulation were a three legged stool, and right now the 465 00:23:55,720 --> 00:23:59,280 Speaker 8: focus is on tariffs. They have been probably signaling I 466 00:23:59,320 --> 00:24:01,760 Speaker 8: know you're having Secretary Lutnik on later on this morning, 467 00:24:02,080 --> 00:24:04,720 Speaker 8: but they've been signaling this was the dialogue. This is 468 00:24:04,760 --> 00:24:08,000 Speaker 8: obviously a long negotiation, but again, this was part of 469 00:24:08,040 --> 00:24:11,280 Speaker 8: the administration's agenda. This is what they wanted to accomplish. 470 00:24:11,320 --> 00:24:14,240 Speaker 8: They've been very clear in the communication. So the pain 471 00:24:14,400 --> 00:24:16,960 Speaker 8: of the announcement is being felt this morning in the market. 472 00:24:17,000 --> 00:24:18,680 Speaker 5: But again I'm not. 473 00:24:18,600 --> 00:24:23,439 Speaker 8: Saying preaching patients and perspective, but certainly this should not 474 00:24:23,480 --> 00:24:26,200 Speaker 8: be a surprise. And I think now as we think 475 00:24:26,200 --> 00:24:29,480 Speaker 8: about the big trends in the last twenty thirty years, 476 00:24:29,560 --> 00:24:33,639 Speaker 8: the first of which is globalization. Globalization is not going 477 00:24:33,680 --> 00:24:35,560 Speaker 8: to be like we have seen it in the past. 478 00:24:35,880 --> 00:24:39,480 Speaker 8: It's a new global world order. How the US manufacturing 479 00:24:39,600 --> 00:24:42,520 Speaker 8: and financial base fits into that as a TBD, but 480 00:24:42,640 --> 00:24:44,399 Speaker 8: certainly it's going to be one that plays out over 481 00:24:44,400 --> 00:24:45,280 Speaker 8: the next several months. 482 00:24:45,400 --> 00:24:47,920 Speaker 2: I can't think of many people outside of you and 483 00:24:47,960 --> 00:24:50,520 Speaker 2: the team more doubt into the C suite and corporate America. 484 00:24:51,040 --> 00:24:53,720 Speaker 2: How are they planning for the changes in the global 485 00:24:53,720 --> 00:24:55,960 Speaker 2: economy that you and the team are anticipating A plans 486 00:24:56,000 --> 00:24:56,440 Speaker 2: going ahead? 487 00:24:56,440 --> 00:24:58,280 Speaker 4: Do they on hold? Are they totally derailed? 488 00:24:58,320 --> 00:24:59,200 Speaker 5: Yeah? Listen. 489 00:24:59,359 --> 00:25:02,320 Speaker 8: I've used the term macro paralysis because I think we 490 00:25:02,359 --> 00:25:05,040 Speaker 8: came into the year the busiest folks on Wall Street 491 00:25:05,040 --> 00:25:06,639 Speaker 8: were supposed to be the M and A bankers and 492 00:25:06,680 --> 00:25:10,200 Speaker 8: the ECM folks, and that has not taken place, and 493 00:25:10,240 --> 00:25:14,720 Speaker 8: so the pace of broad activity in the public markets 494 00:25:14,920 --> 00:25:17,560 Speaker 8: has certainly been muted. And I think this really plays 495 00:25:17,600 --> 00:25:20,359 Speaker 8: into and I've been on the show before talking about 496 00:25:20,600 --> 00:25:23,640 Speaker 8: the role of public markets and the role of private markets, 497 00:25:23,960 --> 00:25:26,879 Speaker 8: and not just private credit, but overall private markets, and 498 00:25:27,320 --> 00:25:29,320 Speaker 8: you're going to see this will be a turning point 499 00:25:29,400 --> 00:25:32,639 Speaker 8: where private markets play a larger role for a lot 500 00:25:32,680 --> 00:25:35,520 Speaker 8: of these corporates that are still they have long term plans, 501 00:25:35,520 --> 00:25:39,280 Speaker 8: whether it's what's going on in technology, energy mining, a 502 00:25:39,320 --> 00:25:43,120 Speaker 8: lot of US domestics, who's going to finance this reshoring 503 00:25:43,560 --> 00:25:44,920 Speaker 8: that's part of the master plan. 504 00:25:45,200 --> 00:25:47,960 Speaker 5: So no doubt. I think in c suites and. 505 00:25:47,920 --> 00:25:52,320 Speaker 8: In boardrooms there's vision, there's a desire, but the practical 506 00:25:52,400 --> 00:25:54,480 Speaker 8: reality is things have come to a stop. And I 507 00:25:54,480 --> 00:25:56,359 Speaker 8: know you're going to have Torston on later on today. 508 00:25:57,080 --> 00:26:00,880 Speaker 8: The soft data, when you see what's going on with consumers, 509 00:26:00,920 --> 00:26:07,160 Speaker 8: consumer concern, corporate concern, it's really certainly it's amazing what 510 00:26:07,200 --> 00:26:10,840 Speaker 8: the President has been able to do in seventy five days, 511 00:26:11,359 --> 00:26:13,879 Speaker 8: what four hundred basis points didn't do over two or 512 00:26:13,880 --> 00:26:16,120 Speaker 8: three years. As I said here, a couple of years ago, 513 00:26:16,160 --> 00:26:18,680 Speaker 8: we talked about the tightening of financial conditions. 514 00:26:18,760 --> 00:26:19,560 Speaker 5: It didn't happen. 515 00:26:19,840 --> 00:26:23,080 Speaker 8: The US consumer led in a massive rally and a 516 00:26:23,119 --> 00:26:26,960 Speaker 8: strength in the US economy in seventy five days. Talk 517 00:26:27,040 --> 00:26:29,320 Speaker 8: of today has really slowed down the economy. So the 518 00:26:29,440 --> 00:26:33,520 Speaker 8: soft data and anecdotes would tell you that we have 519 00:26:33,960 --> 00:26:36,000 Speaker 8: the recession went from a one to five to one 520 00:26:36,000 --> 00:26:38,879 Speaker 8: in three that now, depending on who you talk to, 521 00:26:38,920 --> 00:26:41,880 Speaker 8: it's north of fifty percent. It's probably fifty percent going 522 00:26:41,960 --> 00:26:44,040 Speaker 8: higher depending on what happens on the ninth. 523 00:26:44,080 --> 00:26:45,360 Speaker 5: There's a lot to unpack there. 524 00:26:45,480 --> 00:26:47,160 Speaker 9: I want to go back to something that you said 525 00:26:47,160 --> 00:26:49,080 Speaker 9: that this shouldn't have been a surprise. 526 00:26:48,720 --> 00:26:52,680 Speaker 1: To anyone, and maybe the objective shouldn't have been a surprise, 527 00:26:53,280 --> 00:26:57,000 Speaker 1: but the execution is raising some questions for people about 528 00:26:57,040 --> 00:27:00,399 Speaker 1: how it is going to be past through. 529 00:27:00,600 --> 00:27:02,800 Speaker 9: Is there anything about what you have seen over the 530 00:27:02,840 --> 00:27:06,680 Speaker 9: past week that makes you materially change some of your 531 00:27:06,720 --> 00:27:09,919 Speaker 9: strategy about how you go forward, how you advise the 532 00:27:09,920 --> 00:27:10,480 Speaker 9: c suite. 533 00:27:10,520 --> 00:27:12,720 Speaker 8: Sure, well, let's just go through two or three things 534 00:27:12,960 --> 00:27:16,440 Speaker 8: about investing today. And a lot depends on the portfolio 535 00:27:16,560 --> 00:27:19,360 Speaker 8: or the liabilities you manage. If you run a domestic 536 00:27:19,840 --> 00:27:22,760 Speaker 8: US long short fund, this is obviously much more fundamental. 537 00:27:23,520 --> 00:27:26,440 Speaker 8: We're a long term, long duration investor with a lot 538 00:27:26,440 --> 00:27:28,760 Speaker 8: of investment great assets. So when you look around the 539 00:27:28,800 --> 00:27:30,879 Speaker 8: globe right now, is anything cheap? 540 00:27:31,320 --> 00:27:31,800 Speaker 5: Not really. 541 00:27:32,600 --> 00:27:35,560 Speaker 8: Our rates probably going to be notwithstanding the rate move 542 00:27:35,560 --> 00:27:38,119 Speaker 8: in the last twenty four hours, Our rates going to 543 00:27:38,160 --> 00:27:40,639 Speaker 8: be materially higher over the next few years, and they 544 00:27:40,680 --> 00:27:44,679 Speaker 8: have been because of deglobalization probably, And then you have 545 00:27:44,720 --> 00:27:50,080 Speaker 8: to weigh the geopolitics. So certainly your risk parameters and 546 00:27:50,160 --> 00:27:53,119 Speaker 8: how you want to calibrate risk has certainly gone up 547 00:27:53,359 --> 00:27:56,600 Speaker 8: the last several months. And the idea of the hurdle 548 00:27:56,640 --> 00:27:59,080 Speaker 8: of an equity return has certainly gone up the last 549 00:27:59,080 --> 00:28:02,720 Speaker 8: several months, and with base rates high and getting a coupon, 550 00:28:03,119 --> 00:28:06,120 Speaker 8: it's all about your calibration of risks. So certainly this 551 00:28:06,160 --> 00:28:10,040 Speaker 8: has taken a situation where in terms of what you 552 00:28:10,080 --> 00:28:13,119 Speaker 8: can get in base rates, in terms of bonds, in 553 00:28:13,240 --> 00:28:15,960 Speaker 8: terms of fixed income, in terms of fixed income replacement, 554 00:28:16,320 --> 00:28:19,040 Speaker 8: it certainly made the equity risk premium a lot higher. 555 00:28:19,520 --> 00:28:22,680 Speaker 8: And certainly for us we are in the private equity business, 556 00:28:22,680 --> 00:28:25,040 Speaker 8: where we are in the equity business, and for us 557 00:28:25,160 --> 00:28:27,840 Speaker 8: as risk premiums arisen, it's a really high heartle for 558 00:28:27,880 --> 00:28:29,080 Speaker 8: equity these days, which. 559 00:28:28,960 --> 00:28:31,719 Speaker 9: Raises a question, especially if Apollo has really seen the 560 00:28:31,720 --> 00:28:34,720 Speaker 9: debt portion. If your business grow and exceed what you 561 00:28:34,760 --> 00:28:37,480 Speaker 9: see in the equity, is that only set to expand, 562 00:28:37,680 --> 00:28:41,640 Speaker 9: especially if rates are going to remain structurally higher in 563 00:28:41,680 --> 00:28:42,719 Speaker 9: this new regime. 564 00:28:43,240 --> 00:28:45,600 Speaker 8: There's a reason why we positioned our business the way 565 00:28:45,640 --> 00:28:48,680 Speaker 8: we have over the last five to seven years, not 566 00:28:48,720 --> 00:28:51,560 Speaker 8: suspecting a day like this would occur. But the reality 567 00:28:51,600 --> 00:28:54,360 Speaker 8: is around the globe you have millions and millions of 568 00:28:54,400 --> 00:28:57,720 Speaker 8: folks that are ill prepared, unfortunately for their retirement their pension. 569 00:28:58,080 --> 00:29:01,080 Speaker 8: I was in Asia and Australia last week. Even as 570 00:29:01,080 --> 00:29:04,280 Speaker 8: well as the superannuation funds have done for Australia, they 571 00:29:04,320 --> 00:29:07,280 Speaker 8: do not really have a system on post accumulation and 572 00:29:07,320 --> 00:29:10,160 Speaker 8: post retirements and so around the globe, and even in 573 00:29:10,200 --> 00:29:12,960 Speaker 8: this country, eleven thousand people a day are becoming sixty 574 00:29:13,080 --> 00:29:16,720 Speaker 8: or turning sixty five. We're ill prepared for the pension 575 00:29:17,160 --> 00:29:19,280 Speaker 8: system of tomorrow in terms of the needs. And that's 576 00:29:19,320 --> 00:29:24,600 Speaker 8: why listen what's being written recently about public about private markets. 577 00:29:24,640 --> 00:29:28,160 Speaker 8: Certainly in Larry Fink's letter, it's a tune that we've 578 00:29:28,200 --> 00:29:32,040 Speaker 8: been talking about the last several years about changing market structure, 579 00:29:32,400 --> 00:29:36,400 Speaker 8: the role of private markets with retirement systems financing. What 580 00:29:36,480 --> 00:29:40,360 Speaker 8: this administration is putting forth. We think we're primed to 581 00:29:40,400 --> 00:29:42,880 Speaker 8: be a position of First and Maine in what's going 582 00:29:42,880 --> 00:29:46,160 Speaker 8: on right now, but certainly a wake up call for 583 00:29:46,240 --> 00:29:47,320 Speaker 8: retirees around the globe. 584 00:29:47,400 --> 00:29:49,680 Speaker 2: Jim, let's talk about Europe. There's been a major sentiment 585 00:29:49,720 --> 00:29:52,520 Speaker 2: shift towards the European side of financial markets and a 586 00:29:52,640 --> 00:29:54,720 Speaker 2: pullback from the United States. For a long time we 587 00:29:54,800 --> 00:29:58,000 Speaker 2: talked about so called US exceptionalism, and one big feature 588 00:29:58,000 --> 00:30:00,000 Speaker 2: of that maybe even the secret source I think Jeff 589 00:30:00,080 --> 00:30:01,240 Speaker 2: Bezos and self set. 590 00:30:01,240 --> 00:30:02,200 Speaker 4: It is risk. 591 00:30:02,000 --> 00:30:06,640 Speaker 2: Seeking capital, abundant markets, really really deep markets, tons of liquidity. 592 00:30:06,920 --> 00:30:08,480 Speaker 4: Is any of that under threat? 593 00:30:09,000 --> 00:30:11,280 Speaker 8: Well, I think that what you're seeing is maybe not 594 00:30:11,440 --> 00:30:14,600 Speaker 8: the US going down, but also parts of our globe 595 00:30:14,600 --> 00:30:17,240 Speaker 8: coming up. I mean the Drogy letter that was put 596 00:30:17,240 --> 00:30:19,760 Speaker 8: out last September that everybody had in the file. They've 597 00:30:19,800 --> 00:30:21,720 Speaker 8: quickly pulled it out the last three or four weeks 598 00:30:22,120 --> 00:30:27,440 Speaker 8: because certainly this administration has woken woken Europe up. And 599 00:30:27,560 --> 00:30:29,800 Speaker 8: as they wake up, they're saying, how do we create 600 00:30:29,840 --> 00:30:33,959 Speaker 8: an economic environment where capital can grow? Capital being created 601 00:30:33,960 --> 00:30:37,120 Speaker 8: for growth companies. Think about a securitization market. You've got 602 00:30:37,400 --> 00:30:41,800 Speaker 8: a twenty three trillion economy with a nascent securitization market. 603 00:30:42,200 --> 00:30:45,320 Speaker 8: And I think this administration has woken up Europe in 604 00:30:45,440 --> 00:30:49,080 Speaker 8: terms of thinking about how they actually fund finance and 605 00:30:49,160 --> 00:30:52,680 Speaker 8: grow in this industrial renaissance that's going around the globe 606 00:30:52,760 --> 00:30:55,640 Speaker 8: right now. So it's certainly been a massive wake up call, 607 00:30:55,680 --> 00:30:59,080 Speaker 8: and I think again, you're going to see private market 608 00:30:59,160 --> 00:31:02,320 Speaker 8: solutions for me any of these countries, companies and industries, 609 00:31:02,680 --> 00:31:05,479 Speaker 8: not only in the US but in Western Europe as 610 00:31:05,560 --> 00:31:07,280 Speaker 8: they rise to the challenge. 611 00:31:07,480 --> 00:31:10,800 Speaker 9: One discussion point has been that US exceptionalism was predicated 612 00:31:10,840 --> 00:31:13,840 Speaker 9: both on the AI trade as well as fiscal stimulus 613 00:31:14,280 --> 00:31:17,520 Speaker 9: that's going into reverse a bit, maybe at the same 614 00:31:17,560 --> 00:31:20,320 Speaker 9: time that the fiscal expansion is going on in places 615 00:31:20,360 --> 00:31:22,360 Speaker 9: like Europe, in places like China. How much do you 616 00:31:22,400 --> 00:31:26,000 Speaker 9: see that continuing in terms of market performance and something 617 00:31:26,000 --> 00:31:27,000 Speaker 9: that you're willing to follow. 618 00:31:27,840 --> 00:31:31,360 Speaker 8: Well, what you're really addressing is mostly on the equity performance, 619 00:31:31,360 --> 00:31:33,960 Speaker 8: in the public equity performance where public equity dollars go. 620 00:31:34,800 --> 00:31:39,560 Speaker 8: Certainly there's been a massive amount of global investment in 621 00:31:39,600 --> 00:31:42,320 Speaker 8: the US equity markets in the S and P, and 622 00:31:42,360 --> 00:31:44,920 Speaker 8: that's going to be muted as there's a global pullback 623 00:31:44,920 --> 00:31:47,320 Speaker 8: as investors think about other parts of the globe right now. 624 00:31:47,360 --> 00:31:49,959 Speaker 8: But the bigger question, which you're really getting at, is 625 00:31:50,280 --> 00:31:52,480 Speaker 8: if a recession coming into If I was here six 626 00:31:52,520 --> 00:31:54,320 Speaker 8: months ago, we would have said a recession in twenty 627 00:31:54,360 --> 00:31:57,520 Speaker 8: five twenty six was one in five, and now that's 628 00:31:57,560 --> 00:32:00,320 Speaker 8: certainly one in two, if not higher, with what's going 629 00:32:00,400 --> 00:32:02,960 Speaker 8: on over the next several weeks. The other scenario is 630 00:32:03,000 --> 00:32:05,880 Speaker 8: a stagflation scenario that went from a one in six 631 00:32:05,960 --> 00:32:08,560 Speaker 8: one and seven to probably one in five right now, 632 00:32:08,640 --> 00:32:11,280 Speaker 8: one in four and that's the concern. That's got to 633 00:32:11,320 --> 00:32:14,080 Speaker 8: be the concern of policy makers in the US but 634 00:32:14,120 --> 00:32:14,960 Speaker 8: also around the globe. 635 00:32:15,120 --> 00:32:16,840 Speaker 9: Just building on that, before it sounded like you didn't 636 00:32:16,840 --> 00:32:18,480 Speaker 9: think the FED could cut rates. You said that this 637 00:32:18,560 --> 00:32:20,600 Speaker 9: is going to be a permanently higher rate environment, and 638 00:32:20,640 --> 00:32:23,600 Speaker 9: that happens with both the US as well as Europe. 639 00:32:24,000 --> 00:32:26,600 Speaker 9: Why you think that they're destined to allow that kind 640 00:32:26,720 --> 00:32:27,360 Speaker 9: of scenario. 641 00:32:27,560 --> 00:32:30,600 Speaker 8: No, but I think they have a When you look 642 00:32:30,640 --> 00:32:34,000 Speaker 8: at the balance of the dual mandate right now, it's 643 00:32:34,160 --> 00:32:36,800 Speaker 8: certainly much more challenging. Certainly the White House is going 644 00:32:36,840 --> 00:32:40,000 Speaker 8: to want to see them cut rates, but and certainly 645 00:32:40,040 --> 00:32:43,800 Speaker 8: some of the economic data in terms of slower growth, 646 00:32:43,880 --> 00:32:47,760 Speaker 8: would portray that to be the next move. I think 647 00:32:47,800 --> 00:32:49,520 Speaker 8: the FED is going to have to practice much more 648 00:32:49,560 --> 00:32:50,400 Speaker 8: patience in here. 649 00:32:50,360 --> 00:32:52,600 Speaker 2: Lisa, this is the number one question in financial markets 650 00:32:52,680 --> 00:32:56,040 Speaker 2: right now. Is that Fed put constraint because of higher 651 00:32:56,040 --> 00:32:57,400 Speaker 2: inflation further down the road? 652 00:32:57,640 --> 00:32:59,200 Speaker 1: Right now, the market is betting that. 653 00:32:59,280 --> 00:33:01,000 Speaker 9: No, it is not, because what you are seeing is 654 00:33:01,000 --> 00:33:03,800 Speaker 9: more than three rate cuts, almost four rate cuts being 655 00:33:03,840 --> 00:33:05,880 Speaker 9: priced into the market by year end, with some like 656 00:33:05,920 --> 00:33:08,320 Speaker 9: City saying that they're going to accelerate them, and others 657 00:33:08,360 --> 00:33:11,560 Speaker 9: like Morgan Stanley taking away their call key question at 658 00:33:11,560 --> 00:33:13,720 Speaker 9: a time we're coming off a real inflationary bomp. 659 00:33:13,960 --> 00:33:14,160 Speaker 5: Jim. 660 00:33:14,160 --> 00:33:16,280 Speaker 2: We caught up with the Treasury Secretary yesterday in the 661 00:33:16,320 --> 00:33:19,040 Speaker 2: immediate aftermath of the announcement from the President, and he 662 00:33:19,080 --> 00:33:21,520 Speaker 2: was asked by a Marie about the equity market sell 663 00:33:21,560 --> 00:33:24,400 Speaker 2: off since February, the highst of the year, and he 664 00:33:24,440 --> 00:33:26,280 Speaker 2: pointed to the nastack and said, it seems like a 665 00:33:26,320 --> 00:33:29,400 Speaker 2: Max seven problem and not a MAGA problem. Now you 666 00:33:29,440 --> 00:33:31,959 Speaker 2: can push back against that, pour some cold water over it, 667 00:33:32,000 --> 00:33:33,840 Speaker 2: but he has kind of got a point. There's something 668 00:33:33,880 --> 00:33:36,200 Speaker 2: else going on here outside of just trite. 669 00:33:36,520 --> 00:33:39,200 Speaker 8: Well that goes back to my point earlier, like you know, 670 00:33:39,200 --> 00:33:42,280 Speaker 8: when you look around, like what is an investor right now? 671 00:33:42,640 --> 00:33:43,680 Speaker 5: Are things cheap? 672 00:33:43,760 --> 00:33:47,280 Speaker 8: No, they've gone down in price, But don't confuse a 673 00:33:47,360 --> 00:33:50,160 Speaker 8: price move with something being cheap. And it was a 674 00:33:50,200 --> 00:33:52,840 Speaker 8: marketplace that the mag seven took the market up, and 675 00:33:52,880 --> 00:33:55,840 Speaker 8: now the mag seven has taken the market down. But again, 676 00:33:55,880 --> 00:33:58,080 Speaker 8: this is a very very complex economy. And again this 677 00:33:58,160 --> 00:34:00,360 Speaker 8: is the big theme that we've been talking about years 678 00:34:00,400 --> 00:34:02,400 Speaker 8: and I know we're talking about financial markets in the 679 00:34:02,400 --> 00:34:06,720 Speaker 8: equity market, but these public markets only reflect a very 680 00:34:06,840 --> 00:34:09,640 Speaker 8: very small portion of the US economy. Yes, these are 681 00:34:09,680 --> 00:34:12,719 Speaker 8: great growth companies or global companies, but so much of 682 00:34:12,719 --> 00:34:15,400 Speaker 8: the US economy, so much of the European economy, is 683 00:34:15,520 --> 00:34:19,160 Speaker 8: private companies, and how do they navigate this? And that's 684 00:34:19,200 --> 00:34:22,600 Speaker 8: what gives us a great deal of enthusiasm because what's 685 00:34:22,640 --> 00:34:25,600 Speaker 8: going on for investors in private markets but also for 686 00:34:25,840 --> 00:34:29,280 Speaker 8: companies needing capital. There's a lot more tools in the toolbox, 687 00:34:29,280 --> 00:34:29,799 Speaker 8: and there was. 688 00:34:29,719 --> 00:34:30,319 Speaker 5: A decade ago. 689 00:34:30,400 --> 00:34:32,279 Speaker 2: Can we just finish that on data centers which has 690 00:34:32,280 --> 00:34:34,520 Speaker 2: been a major thing, sure, not just in public markets. 691 00:34:34,920 --> 00:34:37,080 Speaker 2: There have been some warnings about over capacity in the 692 00:34:37,120 --> 00:34:37,920 Speaker 2: last few weeks. 693 00:34:38,280 --> 00:34:39,719 Speaker 4: How are you even the team navigates in that. 694 00:34:40,640 --> 00:34:43,640 Speaker 8: We've certainly taken on much more as a debt provider 695 00:34:43,719 --> 00:34:46,520 Speaker 8: to date. Certainly, those who have been around for a 696 00:34:46,520 --> 00:34:49,080 Speaker 8: few decades, you feel like you're seeing a bit of 697 00:34:49,120 --> 00:34:52,200 Speaker 8: the conversation about dark fiber from ninety eight to ninety 698 00:34:52,280 --> 00:34:52,920 Speaker 8: nine and two. 699 00:34:52,800 --> 00:34:54,840 Speaker 5: Thousand and one, two thousand and two. Build it and 700 00:34:54,840 --> 00:34:55,520 Speaker 5: they will come. 701 00:34:56,560 --> 00:34:59,880 Speaker 8: Certainly, there are economics that still need to be developed 702 00:35:00,000 --> 00:35:03,120 Speaker 8: in terms of the economic model of the data center business. 703 00:35:03,640 --> 00:35:06,920 Speaker 8: A lot of capital has been created upfront to purchase 704 00:35:06,960 --> 00:35:10,480 Speaker 8: the land, secure the power, create the facility. But who's 705 00:35:10,560 --> 00:35:13,319 Speaker 8: the long term off take of that, who's the long 706 00:35:13,400 --> 00:35:15,440 Speaker 8: term capital? And again this goes back to the conversation 707 00:35:15,480 --> 00:35:18,480 Speaker 8: I had earlier about the pension deficit issue. There's a 708 00:35:18,520 --> 00:35:21,480 Speaker 8: tremendous amount of long term capital that wants to be 709 00:35:21,560 --> 00:35:24,520 Speaker 8: matched up with that opportunity set. But to date we've 710 00:35:24,520 --> 00:35:27,880 Speaker 8: been much more of a debt provider. But I certainly 711 00:35:27,920 --> 00:35:30,560 Speaker 8: think that questions that were raised last week by Joe 712 00:35:30,680 --> 00:35:34,640 Speaker 8: Sai pretty legitimate questions about the long term economics and 713 00:35:34,680 --> 00:35:38,320 Speaker 8: the short term supply demand mismatch about how these things 714 00:35:38,360 --> 00:35:40,239 Speaker 8: come online and what the economics are. 715 00:35:40,440 --> 00:35:42,279 Speaker 2: Jim, we could talk you all monic, and I've got 716 00:35:42,280 --> 00:35:44,160 Speaker 2: a job to do, though we appreciate your time always 717 00:35:44,160 --> 00:35:44,439 Speaker 2: with job. 718 00:35:44,800 --> 00:35:45,239 Speaker 4: Thank you, Jim. 719 00:35:45,280 --> 00:35:56,480 Speaker 2: Jim's out to that the president of a public global management. 720 00:35:58,160 --> 00:35:59,880 Speaker 6: As for that conversation, I'm pleased to be dry by 721 00:35:59,880 --> 00:36:02,919 Speaker 6: a front of the show. Terry Haynes of PENJEA Policy. Terry, 722 00:36:02,920 --> 00:36:04,680 Speaker 6: you put ot a note last night, you said Liberation 723 00:36:04,800 --> 00:36:09,680 Speaker 6: Day tariffs, now watch for many quote path dependent negotiations. 724 00:36:09,960 --> 00:36:12,680 Speaker 6: Do you think all of these rates that the President 725 00:36:12,719 --> 00:36:14,440 Speaker 6: outlined yesterday can come down. 726 00:36:14,719 --> 00:36:17,120 Speaker 7: I think a lot of them can, sure. And the 727 00:36:17,160 --> 00:36:20,920 Speaker 7: one reason I would say that is that Secretary of 728 00:36:20,920 --> 00:36:24,640 Speaker 7: Commerce Lutnik has been kind of pre loading everything over 729 00:36:24,680 --> 00:36:27,239 Speaker 7: the past days and weeks with a lot of different countries, saying, 730 00:36:27,280 --> 00:36:29,040 Speaker 7: you know, here's what we'd like on tariffs, here's what 731 00:36:29,080 --> 00:36:33,160 Speaker 7: we'd like on tariff barriers. You know, here's the realm 732 00:36:33,239 --> 00:36:35,520 Speaker 7: of things we want to talk about. They've already been 733 00:36:35,560 --> 00:36:38,600 Speaker 7: those other countries have already been discussing that internally, and 734 00:36:38,680 --> 00:36:41,399 Speaker 7: they'll have internal politics as well as external politics. Things 735 00:36:41,400 --> 00:36:42,839 Speaker 7: they can do, things they can't. 736 00:36:42,840 --> 00:36:44,920 Speaker 6: Commerce Secretor Harold Lounik has been in touch with his 737 00:36:44,960 --> 00:36:47,200 Speaker 6: counterparts a few times. He's been on our program. He've 738 00:36:47,200 --> 00:36:49,200 Speaker 6: been saying he was going to talk to say's European 739 00:36:49,239 --> 00:36:51,719 Speaker 6: counterpart that day when Trump came out with a two 740 00:36:51,800 --> 00:36:56,640 Speaker 6: hundred percent tariff on wine, champagne and cheese. Why not 741 00:36:56,880 --> 00:37:01,000 Speaker 6: then just do the deal? Why have the destructive what 742 00:37:01,080 --> 00:37:03,920 Speaker 6: some would call in the market moment right now? To 743 00:37:03,960 --> 00:37:04,840 Speaker 6: get to that point. 744 00:37:05,160 --> 00:37:10,520 Speaker 7: I think the administration wagers that trade negotiations of those 745 00:37:10,640 --> 00:37:14,960 Speaker 7: kind never end and they get bogged down and not 746 00:37:15,040 --> 00:37:18,040 Speaker 7: being able to finish them. I think they think that 747 00:37:18,200 --> 00:37:20,880 Speaker 7: there's more value in kind of a shotgun awe approach 748 00:37:21,239 --> 00:37:23,600 Speaker 7: that brings people to the table and in sens them 749 00:37:25,040 --> 00:37:28,280 Speaker 7: to do things and actually get something done. 750 00:37:28,440 --> 00:37:31,480 Speaker 6: April fifth is when the ten percent baseline goes into effect, 751 00:37:31,480 --> 00:37:33,799 Speaker 6: and an April ninth, for if you're one of those 752 00:37:33,800 --> 00:37:35,919 Speaker 6: countries that has a higher level, like the European Union 753 00:37:35,960 --> 00:37:37,960 Speaker 6: at twenty percent. Do you think we get a deal 754 00:37:38,000 --> 00:37:39,800 Speaker 6: before April ninth? 755 00:37:40,120 --> 00:37:44,120 Speaker 7: I doubt that some places will probably have that happen, yeah, 756 00:37:44,120 --> 00:37:47,600 Speaker 7: but I think the big places won't. There's too much 757 00:37:47,960 --> 00:37:51,719 Speaker 7: complexity internally in a very large country to be able 758 00:37:51,960 --> 00:37:54,680 Speaker 7: to check off with stakeholders, figure out how you want 759 00:37:54,719 --> 00:37:57,920 Speaker 7: to change things go through the legislative or regulatory process. 760 00:37:57,960 --> 00:37:59,080 Speaker 7: I think that's all very unlikely. 761 00:37:59,160 --> 00:38:03,840 Speaker 6: Trump's entire agenda is a three legged stool, deregulation, tariffs, 762 00:38:03,840 --> 00:38:08,319 Speaker 6: and tax cuts. If one of these stools collapses, the 763 00:38:08,440 --> 00:38:11,880 Speaker 6: entire agenda might collapse. How quickly do they need to 764 00:38:11,880 --> 00:38:14,239 Speaker 6: get the tax cuts to make sure they keep this 765 00:38:14,320 --> 00:38:15,160 Speaker 6: economy afloat? 766 00:38:15,680 --> 00:38:17,799 Speaker 7: I have it at eighty percent by the end of 767 00:38:17,840 --> 00:38:22,240 Speaker 7: this calendar year, because that's the way the congressional process 768 00:38:22,280 --> 00:38:25,839 Speaker 7: will work. Third quarter is largely screwed up because of 769 00:38:26,120 --> 00:38:29,080 Speaker 7: the need to deal with spending bills. But at the 770 00:38:29,120 --> 00:38:32,919 Speaker 7: same time, can they do it fast? Sure? And that's 771 00:38:32,960 --> 00:38:35,000 Speaker 7: exactly what Besson told you yesterday. 772 00:38:35,440 --> 00:38:39,040 Speaker 6: Is that why they're including the debt ceiling into this record? 773 00:38:39,120 --> 00:38:41,479 Speaker 7: Well, exactly. But he's going to now turn He's told 774 00:38:41,480 --> 00:38:44,680 Speaker 7: you he's now going to turn his attention to dealing 775 00:38:44,760 --> 00:38:47,200 Speaker 7: with the tax cuts. I joked on your radio side 776 00:38:47,200 --> 00:38:49,879 Speaker 7: this morning that Beson's going to be the Gary Cone 777 00:38:49,920 --> 00:38:52,800 Speaker 7: of twenty twenty five. And that's largely the way I 778 00:38:52,840 --> 00:38:54,880 Speaker 7: think markets should look at it. But Lutnik's going to 779 00:38:54,920 --> 00:38:56,520 Speaker 7: be the guy who deals with the terariff issuing. 780 00:38:56,680 --> 00:39:00,120 Speaker 6: Okay, But when it comes to those tax cuts and 781 00:39:00,160 --> 00:39:02,360 Speaker 6: how quickly they need to get it done, we're just 782 00:39:02,400 --> 00:39:05,719 Speaker 6: talking about an extension of current policy, the sweeten theer's 783 00:39:05,719 --> 00:39:07,520 Speaker 6: no tax on tips and tax on Social Security. Does 784 00:39:07,520 --> 00:39:09,920 Speaker 6: that actually get done? Trevie Secretary seems to think so. 785 00:39:10,239 --> 00:39:13,080 Speaker 6: I'm not so sure when I speak to sources on Congress. 786 00:39:13,880 --> 00:39:16,280 Speaker 7: Do I think it gets done? Yeah? I do, certainly 787 00:39:16,320 --> 00:39:18,400 Speaker 7: by the end of the yetras, yeah, I think so. 788 00:39:18,800 --> 00:39:22,440 Speaker 6: You think all of them, this economy, the budget hawks, 789 00:39:22,480 --> 00:39:24,560 Speaker 6: the deficit hawks, are willing to sign. 790 00:39:24,360 --> 00:39:27,560 Speaker 7: Up for that they eventually will be. Yeah, because one 791 00:39:27,600 --> 00:39:31,400 Speaker 7: of the many reasons why there's Trump urgency is because 792 00:39:31,440 --> 00:39:36,080 Speaker 7: Trump understands that his biggest leverage points politically with members, 793 00:39:36,160 --> 00:39:39,960 Speaker 7: particularly deficit hawks, come up in the midterms, all right, 794 00:39:40,040 --> 00:39:42,799 Speaker 7: and I think that's where you'll see a lot of that. 795 00:39:43,120 --> 00:39:45,520 Speaker 6: Terry, thank you so much for your time this morning, Jonathan, 796 00:39:45,560 --> 00:39:47,600 Speaker 6: of course. Terry Haynes of Panji a Policy, a friend 797 00:39:47,600 --> 00:39:49,200 Speaker 6: of the show. He thinks it's a shock and off 798 00:39:49,560 --> 00:39:52,879 Speaker 6: a moment to get negotiators to the table, but doesn't 799 00:39:52,920 --> 00:39:55,000 Speaker 6: sound like we'll get deals before April nine. 800 00:39:55,719 --> 00:39:59,239 Speaker 2: This is the Bloomberg Seventans podcast, bringing you the best 801 00:39:59,320 --> 00:40:02,640 Speaker 2: in markets, economics, angio politics. You can watch the show 802 00:40:02,680 --> 00:40:05,640 Speaker 2: live on Bloomberg TV weekday mornings from six am to 803 00:40:05,760 --> 00:40:09,520 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify 804 00:40:09,680 --> 00:40:11,880 Speaker 2: or anywhere else you listen, and as always, on the 805 00:40:11,880 --> 00:40:14,359 Speaker 2: Bloomberg Terminal and the Bloomberg Business app.