Stephen Miran, White House Council of Economic Advisers Chairman, says there's been no evidence to show that President Donald Trump's tariffs have been inflationary. Miran, speaking with Bloomberg's Matt Miller and Sonali Basak, says the copper tariffs will help the US produce more of the metal domestically.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
I want to now bring in our Bloomberg TV and
radio audiences worldwide. We're going to simulcast this joining us
now as White House Counsel of Economic Advisors Chairman Steven Meyer,
and Steven thanks very much for joining us. We were
just listening to David Costin of Goldman Sachs giving an
optimistic view of the stock market and the way companies
(00:28):
are dealing with tariffs, and I wonder how you think
about the uncertainty that this creates. You definitely must have
calculated that in coming up with this strategy, and if
we're going to see an end to that uncertainty come
August first.
Speaker 1 (00:45):
Good morning, Thanks for having me. Look, you know, I
do see the uncertainty starting to reduce in the near term.
You know, part of the part of the benefit of
uncertainty is it gives us leverage and negotiations. Right Like,
the President knows how to extract concessions from our trading partners,
and he has been very successfully doing so. Now as
what you've seen with a number of these letters is
there's some countries that haven't made the concessions that the
(01:05):
United States requires and as a result of the decades
of accumulated trade deficits. The President has decided that, you know,
teriff rates should ratchet back off for those countries on
effect of August first, and I expect that to happen.
Speaker 3 (01:17):
I want to talk more about the sectoral tariffs in
section two thirty two. You look at copper just over
the last twenty four hours and the price increase you've
seen in copper alone. This is a critical input for
data centers, for power grids, for industrial machinery, and as
the administration looks to bring more manufacturing on shore, how
isn't it the case that a fifty percent tariff would
(01:38):
impact some of those other efforts to otherwise power the economy.
Speaker 1 (01:44):
So you have to differentiate between changes in relative prices
and changes in the general price level. And when you
target a specific good with the tariff, like copper or
or some other specific good, you're going to get relative
price changes, and that's that's totally expected. But that doesn't
mean that there's an increase in the general price level
between inflation, because there are lots of you know, thousands
of products and services that go into the general price level,
(02:05):
and it's an average a way to average across all
of those. And we just published research yesterday showing that
there has been no tariff induced inflation in a general
price level since since the teriffs began being implemented in January.
Quite to the contrary of all the all of the
cassandras that were shouting that it was going to be extremely,
extremely inflationary, there's just no evidence of that thus far,
(02:26):
just like in twenty eighteen, twenty nineteen.
Speaker 3 (02:27):
H listen, I read the research and we'll get back
to it. But on copper, I want to read this
note from Jeffreys. They say that the US does not
have nearly enough mindsmelter refinery capacity to be self sufficient
in copper, So then why target it.
Speaker 1 (02:43):
Well, we need more of it, We need more of
it produced domestically. You know, there are certain critical minerals,
of which copper is one that you just absolutely need
if you're going to have a manufacturing sector. And having
a manufacturing sector is important, not just economically because it
tends to be a high high capital, high productivity field
with you know, good paying jobs, but also for national security.
You cannot defend yourselves if you do not have the
(03:04):
robust manufacturing sector and critical minerals like copper are essential
to that. So we'll be a little corner a market
in copper. Absolutely not. But can we make more than
we currently do?
Speaker 3 (03:13):
Yes?
Speaker 2 (03:14):
So how long will that take? I mean, for example,
when will these copper tariffs go into effect? Or is
this just a stick rather than a carrot that you
use to try and motivate the industry. No?
Speaker 1 (03:31):
Well, the President said we're going to do copper tariffs,
and I think the president, you know, I think the
President follows through on his promises, so I would expect
them to happen. I don't have a I don't have
a date for that happening yet. Well I don't. I mean,
I don't have a date for that happening. You know
that that process is underway.
Speaker 2 (03:46):
All right. I want to ask also about you know,
the first point that you made, using tariffs not necessarily
as a revenue raiser, but as leverage in discussions. I've
watched Japan tariff US auto makers for decades now, and
they refuse to back down. Are you going to be
able to extract that kind of concession from such a
(04:06):
stubborn economy?
Speaker 1 (04:09):
Look, you know, I think that the President is one
of the best negotiators in history. I mean, he's spent
decades negotiating deals across every field, from commercial real estate
to international trade, and I have no doubt that he
can negotiate successfully now too. But in order to negotiate successfully,
other countries have to know that you're serious and that
you're willing to You're willing to do what it takes
to get there, and that's what these letters show that
(04:31):
we are absolutely serious. So you know, I hope that
a country la Japan comes to its senses and does
make the concessions they need, because it'll be better for
them if they do.
Speaker 3 (04:40):
Steven, I do want to go back to your report,
and I do appreciate the reports that have been coming
out of the Council of Economic Advisors. I have been
reading all of it. On the most recent report on
the imported goods inflation, what do you say to the
people that are looking at the impact of energy prices,
because if you subtract petroleum, you're not getting the same impact.
In fact, you're seeing goods rising in many categories that
(05:02):
matter to American households, like electrical equipment and appliances.
Speaker 1 (05:07):
Yeah, so you're right to flag that energy prices have
come down, and that we got to the lowest price
at the pump since twenty twenty one, I think, and
that's been a huge advantage to American consumers and a
huge advantage to the American economy. It does drive the
overall you know, some of the overall indicies and the
inflation data. But even if you take energy out and
you look at core goods, you know, as we do
in our as we do in our paper, or at durables,
(05:29):
you still see the same wedge. No matter how you
slice the different goods data. In the inflation data, there's
a consistent, roughly fifty to sixty basis point wedge between
the price increases in domestically produced sorry in overall goods
versus the price increases in imported goods alone. And when
you annualize that fifty basis foot wedge, obviously it comes
(05:49):
to a bit more than a percentage bit more than
a percentage point at annualized rate. And so when you
slice things like taking out energy or just looking at
doorables or whatever, you end up with different different levels.
But the wedge between overall goods and imported goods remains.
So the conclusion continues to hold.
Speaker 3 (06:05):
So I also want to ask about the central bank here.
The President himself has been very very vocal for the
desire for lower rates. He has said just recently on
truth Social that three points is too high, and he's
talking about the interest costs that are embedded with higher
interest rates, which of course is a good point when
you do have interest costs about to reach a trillion
(06:27):
dollars or more pretty soon. But at the same time
he has been very critical of the FED. I want
to read you this note from Neil Dotta over at
Renaissance Macro. He's basically saying here that the pressure that
the President is putting on the FED is making it
so that any future nominee has to be beholden to
what the President is saying. What Neil Dotta said is
(06:49):
Trump has created a litmus test for his FED nominee.
They have to agree to cut rates. If Trump picks
someone close to his orbit, that person will look like
a complete and I'm quoting the research and have a
limited ability to persuade colleagues to a dubbish position at
some point. Here is the president's weighing in on central
(07:11):
bank policy counter productive? For what should otherwise have been
a independent central bank.
Speaker 1 (07:20):
I thinks so, you know, look, I'm a huge fan
of Neil and I get along great, but I don't
agree on this point. I don't think that at the
end of the day, anything matters, but what the policy
rate is. I think, you know, sort of sitting around
talking about you know, about optics and committee you know,
you know, sort of internal committee discussions doesn't really matter.
What matters is what the policy rate is and what
markets expect the policy rate to be. And if they
(07:41):
expect the policy rate to be better for the economy,
then we'll have better economic outcomes and markets will welcome that.
If the policy rate is set in a way that's
not better for the economy, then we'll have worse economic
outcomes and markets will reflect that. I think the rest
of it is just is just chatter. What matters is
policy being set well or is being set poorly?
Speaker 2 (07:56):
Stephen, can I ask about just the basics of raising revenue.
What do you expect from tariff revenue, say over the
next three or four years, since that's what's left in
this term, And what about golden visa revenue? I heard
Howard Lutnik saying that you've got seventy five thousand applicants
(08:17):
or queries, and at five million apiece, that would be
like three hundred and seventy five billion dollars, massive amounts
of revenue if you could. Can you repeat that every
year and bring in like at least a quarter a
quarter trillion dollars in revenue every year from selling visas?
Speaker 1 (08:34):
Thanks, So I expect a tariff revenue to be substantial,
And in the research we put out about the defict
implications of the One Big Beautiful Bill and the rest
of the administration's policies, tariff revenue played a substantial role
in thinking about where the deaths it would go in
future years. We had about three trillion dollars over a
decade from it, which works out to obviously about three
hundred million dollars a year, and that's pretty close to
where CBO ended up to when CBO got around to
(08:56):
scoring it. So that's a number that I think is
a little baseline expectation. Given tarif rates are going a
little bit higher now, number it might actually be a
bit higher than that. So, you know, I think it's
such a fantastic thing to raise money from tariffs that
are ultimately the incidents of which is ultimately born by
the tariff country, and use that money to finance lower
marginal rates in American families and American firms to encourage
(09:18):
more investment and more work here and encourage reshoring. I
think that's just a fantastic common sense policy combination with
aspective of Golden visas. I mean, look, I think that
Howard has enormous demand for these things. You know, he's
created an amazing product. Howard and the President have created
an amazing product that has attracted enormous amount of interest
from foreigners abroad, and I think we're going to see
(09:39):
that huge demand materialized. However, I think you're right to
point out I don't expect that demand to reproduce every
single year. It's not going to replicate every single year.
I think you'll see a big demand upfront.
Speaker 2 (09:49):
All right, really interesting stuff, Steven, appreciate your time. White
House Counsel of Economic Advisors Chairman Steven Myron
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
I want to now bring in our Bloomberg TV and
radio audiences worldwide. We're going to simulcast this joining us
now as White House Counsel of Economic Advisors Chairman Steven Meyer,
and Steven thanks very much for joining us. We were
just listening to David Costin of Goldman Sachs giving an
optimistic view of the stock market and the way companies
(00:28):
are dealing with tariffs, and I wonder how you think
about the uncertainty that this creates. You definitely must have
calculated that in coming up with this strategy, and if
we're going to see an end to that uncertainty come
August first.
Speaker 1 (00:45):
Good morning, Thanks for having me. Look, you know, I
do see the uncertainty starting to reduce in the near term.
You know, part of the part of the benefit of
uncertainty is it gives us leverage and negotiations. Right Like,
the President knows how to extract concessions from our trading partners,
and he has been very successfully doing so. Now as
what you've seen with a number of these letters is
there's some countries that haven't made the concessions that the
(01:05):
United States requires and as a result of the decades
of accumulated trade deficits. The President has decided that, you know,
teriff rates should ratchet back off for those countries on
effect of August first, and I expect that to happen.
Speaker 3 (01:17):
I want to talk more about the sectoral tariffs in
section two thirty two. You look at copper just over
the last twenty four hours and the price increase you've
seen in copper alone. This is a critical input for
data centers, for power grids, for industrial machinery, and as
the administration looks to bring more manufacturing on shore, how
isn't it the case that a fifty percent tariff would
(01:38):
impact some of those other efforts to otherwise power the economy.
Speaker 1 (01:44):
So you have to differentiate between changes in relative prices
and changes in the general price level. And when you
target a specific good with the tariff, like copper or
or some other specific good, you're going to get relative
price changes, and that's that's totally expected. But that doesn't
mean that there's an increase in the general price level
between inflation, because there are lots of you know, thousands
of products and services that go into the general price level,
(02:05):
and it's an average a way to average across all
of those. And we just published research yesterday showing that
there has been no tariff induced inflation in a general
price level since since the teriffs began being implemented in January.
Quite to the contrary of all the all of the
cassandras that were shouting that it was going to be extremely,
extremely inflationary, there's just no evidence of that thus far,
(02:26):
just like in twenty eighteen, twenty nineteen.
Speaker 3 (02:27):
H listen, I read the research and we'll get back
to it. But on copper, I want to read this
note from Jeffreys. They say that the US does not
have nearly enough mindsmelter refinery capacity to be self sufficient
in copper, So then why target it.
Speaker 1 (02:43):
Well, we need more of it, We need more of
it produced domestically. You know, there are certain critical minerals,
of which copper is one that you just absolutely need
if you're going to have a manufacturing sector. And having
a manufacturing sector is important, not just economically because it
tends to be a high high capital, high productivity field
with you know, good paying jobs, but also for national security.
You cannot defend yourselves if you do not have the
(03:04):
robust manufacturing sector and critical minerals like copper are essential
to that. So we'll be a little corner a market
in copper. Absolutely not. But can we make more than
we currently do?
Speaker 3 (03:13):
Yes?
Speaker 2 (03:14):
So how long will that take? I mean, for example,
when will these copper tariffs go into effect? Or is
this just a stick rather than a carrot that you
use to try and motivate the industry. No?
Speaker 1 (03:31):
Well, the President said we're going to do copper tariffs,
and I think the president, you know, I think the
President follows through on his promises, so I would expect
them to happen. I don't have a I don't have
a date for that happening yet. Well I don't. I mean,
I don't have a date for that happening. You know
that that process is underway.
Speaker 2 (03:46):
All right. I want to ask also about you know,
the first point that you made, using tariffs not necessarily
as a revenue raiser, but as leverage in discussions. I've
watched Japan tariff US auto makers for decades now, and
they refuse to back down. Are you going to be
able to extract that kind of concession from such a
(04:06):
stubborn economy?
Speaker 1 (04:09):
Look, you know, I think that the President is one
of the best negotiators in history. I mean, he's spent
decades negotiating deals across every field, from commercial real estate
to international trade, and I have no doubt that he
can negotiate successfully now too. But in order to negotiate successfully,
other countries have to know that you're serious and that
you're willing to You're willing to do what it takes
to get there, and that's what these letters show that
(04:31):
we are absolutely serious. So you know, I hope that
a country la Japan comes to its senses and does
make the concessions they need, because it'll be better for
them if they do.
Speaker 3 (04:40):
Steven, I do want to go back to your report,
and I do appreciate the reports that have been coming
out of the Council of Economic Advisors. I have been
reading all of it. On the most recent report on
the imported goods inflation, what do you say to the
people that are looking at the impact of energy prices,
because if you subtract petroleum, you're not getting the same impact.
In fact, you're seeing goods rising in many categories that
(05:02):
matter to American households, like electrical equipment and appliances.
Speaker 1 (05:07):
Yeah, so you're right to flag that energy prices have
come down, and that we got to the lowest price
at the pump since twenty twenty one, I think, and
that's been a huge advantage to American consumers and a
huge advantage to the American economy. It does drive the
overall you know, some of the overall indicies and the
inflation data. But even if you take energy out and
you look at core goods, you know, as we do
in our as we do in our paper, or at durables,
(05:29):
you still see the same wedge. No matter how you
slice the different goods data. In the inflation data, there's
a consistent, roughly fifty to sixty basis point wedge between
the price increases in domestically produced sorry in overall goods
versus the price increases in imported goods alone. And when
you annualize that fifty basis foot wedge, obviously it comes
(05:49):
to a bit more than a percentage bit more than
a percentage point at annualized rate. And so when you
slice things like taking out energy or just looking at
doorables or whatever, you end up with different different levels.
But the wedge between overall goods and imported goods remains.
So the conclusion continues to hold.
Speaker 3 (06:05):
So I also want to ask about the central bank here.
The President himself has been very very vocal for the
desire for lower rates. He has said just recently on
truth Social that three points is too high, and he's
talking about the interest costs that are embedded with higher
interest rates, which of course is a good point when
you do have interest costs about to reach a trillion
(06:27):
dollars or more pretty soon. But at the same time
he has been very critical of the FED. I want
to read you this note from Neil Dotta over at
Renaissance Macro. He's basically saying here that the pressure that
the President is putting on the FED is making it
so that any future nominee has to be beholden to
what the President is saying. What Neil Dotta said is
(06:49):
Trump has created a litmus test for his FED nominee.
They have to agree to cut rates. If Trump picks
someone close to his orbit, that person will look like
a complete and I'm quoting the research and have a
limited ability to persuade colleagues to a dubbish position at
some point. Here is the president's weighing in on central
(07:11):
bank policy counter productive? For what should otherwise have been
a independent central bank.
Speaker 1 (07:20):
I thinks so, you know, look, I'm a huge fan
of Neil and I get along great, but I don't
agree on this point. I don't think that at the
end of the day, anything matters, but what the policy
rate is. I think, you know, sort of sitting around
talking about you know, about optics and committee you know,
you know, sort of internal committee discussions doesn't really matter.
What matters is what the policy rate is and what
markets expect the policy rate to be. And if they
(07:41):
expect the policy rate to be better for the economy,
then we'll have better economic outcomes and markets will welcome that.
If the policy rate is set in a way that's
not better for the economy, then we'll have worse economic
outcomes and markets will reflect that. I think the rest
of it is just is just chatter. What matters is
policy being set well or is being set poorly?
Speaker 2 (07:56):
Stephen, can I ask about just the basics of raising revenue.
What do you expect from tariff revenue, say over the
next three or four years, since that's what's left in
this term, And what about golden visa revenue? I heard
Howard Lutnik saying that you've got seventy five thousand applicants
(08:17):
or queries, and at five million apiece, that would be
like three hundred and seventy five billion dollars, massive amounts
of revenue if you could. Can you repeat that every
year and bring in like at least a quarter a
quarter trillion dollars in revenue every year from selling visas?
Speaker 1 (08:34):
Thanks, So I expect a tariff revenue to be substantial,
And in the research we put out about the defict
implications of the One Big Beautiful Bill and the rest
of the administration's policies, tariff revenue played a substantial role
in thinking about where the deaths it would go in
future years. We had about three trillion dollars over a
decade from it, which works out to obviously about three
hundred million dollars a year, and that's pretty close to
where CBO ended up to when CBO got around to
(08:56):
scoring it. So that's a number that I think is
a little baseline expectation. Given tarif rates are going a
little bit higher now, number it might actually be a
bit higher than that. So, you know, I think it's
such a fantastic thing to raise money from tariffs that
are ultimately the incidents of which is ultimately born by
the tariff country, and use that money to finance lower
marginal rates in American families and American firms to encourage
(09:18):
more investment and more work here and encourage reshoring. I
think that's just a fantastic common sense policy combination with
aspective of Golden visas. I mean, look, I think that
Howard has enormous demand for these things. You know, he's
created an amazing product. Howard and the President have created
an amazing product that has attracted enormous amount of interest
from foreigners abroad, and I think we're going to see
(09:39):
that huge demand materialized. However, I think you're right to
point out I don't expect that demand to reproduce every
single year. It's not going to replicate every single year.
I think you'll see a big demand upfront.
Speaker 2 (09:49):
All right, really interesting stuff, Steven, appreciate your time. White
House Counsel of Economic Advisors Chairman Steven Myron
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