May 9, 2025 • 51 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
US President Donald Trump floated an 80% tariff on China ahead of negotiations due to begin Saturday as he urged Beijing to do more to open their markets to US goods.
“80% Tariff on China seems right! Up to Scott B,” Trump said in a social-media post Friday morning, referring to Treasury Secretary Scott Bessent.
“CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!,” he said in a separate post.
Bessent and US Trade Representative Jamieson Greer are set to begin talks with Chinese Vice Premier He Lifeng in Switzerland this weekend, the first public discussions between the world’s two largest economies on defusing a trade war that has seen Trump impose 145% levies on China and Beijing retaliate with 125% duties on many American goods.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Kailey speaks with:
- Wiley Rein National Security Practice Group Lead and Former Assistant Secretary for Industry & Analysis at the International Trade Administration Nazak Nikakhtar.
- Bloomberg's Erik Wasson and Wendy Benjaminson.
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino.
- Greenwich Media Strategies Founder and CEO Hagar Chemali.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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(00:20):
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Speaker 2 (00:25):
Live on Bloomberg TV and radio. As we still, as
we are pretty much every day, are keeping track of
the latest when it comes to terrors after President Trump,
of course, today floated the idea of an eighty percent
tariff on China, much lower than the current one hundred
and forty five percent cumulative rate, seeming right, leaving it
up to the Treasury Secretary Scott Besson as he makes
tracks to Switzerland for talks alongside the US Trade Representative
(00:48):
Jamison Greer with China that begin tomorrow, and we're trying
to get as much insight as we can into the
thinking of this administration around trade ahead of that meeting,
in the aftermath of the framework agreed to between the USA,
US and the UK yesterday, and we got some of
that from Peter Navarro earlier on Bloomberg Surveillance. He's White
House Director of the Office of trade and manufacturing policy,
(01:09):
and he had this to share with our colleagues.
Speaker 3 (01:12):
All we're doing is trying to level the playing field.
I saw the EU kind of rattling Sabers. I think
it was yesterday about some kind of retaliation, and I
would just say to anybody who's in the European Union,
I mean, how how can you look at us in
the face and threaten us when your tariffs are higher?
(01:32):
You have lost cases repeatedly at the WTO on US
selling you things like beef and poultry, and you won't
even honor that.
Speaker 4 (01:43):
So yesterday the President called Ursula Vonderline fantastic, and he
said he hopes to meet her. But are you saying
that the European Union is not as high on the
priority list than say, other trading partners like the brand Japan.
Speaker 3 (01:57):
Not at all. I mean the EU to be clear here,
we have the second highest trade deficit with the EU,
behind China, so they're very high on the list. All
I'm saying here is that I thought I found it
unfortunate that the EU kind of fired I think some
term was fired shots.
Speaker 5 (02:18):
Across our bow.
Speaker 3 (02:19):
It's like retaliation will not work against the United States.
We shouldn't have that. Let's talk, let's figure this out,
and it would be nice here. Let's give piece a
chance here. All we're asking for here in the United
States of America is fairness. I mean, would you agree
is there any disagreement on this set and on your
set that the tariffs of the EU are higher, and
(02:41):
that the non tariff bearers are higher, and that the
w t O in Geneva is basically sanctioning that through
twodays one is the but but would.
Speaker 6 (02:53):
You agree with that fact check? There? There's a bigger
question here. There's a bigger question here, and this is
something that the German Finance Minister has come out and
talked about, which is they'd be willing to drop all
tariffs to zero. If the US were willing to drop
all tariffs to zero, there is a willingness to negotiate
aground the board to a lower tariff regime. Would that
(03:14):
be acceptable to you?
Speaker 2 (03:15):
Or is ten percent?
Speaker 3 (03:16):
So let's stay with that. See that's such a misdirection. Okay,
it's the non tariff barrier. Stupid to kind of paraphrase
Bill Clinton, It's like, it's the non tariff barriers. So
when countries like Vietnam or entities like the EU say
to us, oh, let's all go to zero tariffs and
(03:37):
everything will be okay. That's not the problem. It's part
of the problem. But the bigger problem is the non
tariff barriers in Europe. It's the vattax.
Speaker 2 (03:50):
So Peter Navarro choosing to focus on non tariff barriers
rather than the question around this ten percent baseline teriff
f eight that still remains, which is what my colleague
Lisa Bramo It's was asked about, and we actually heard
from the White House Press Secretary Caroline Levit about that
she's still briefing the press from the briefing room as
we speak, saying she had just heard from President Trump
that he is determined on that ten percent tastes like
(04:14):
baseline tariff, that he is committed to it. So I
guess there's your answer, at least for now. She also,
of course, was asked about the President's musing on true
social Today's suggesting that eighty percent was a tariff level
on China. That seems right. This is how the Press
secretary addressed that.
Speaker 7 (04:31):
The President still remains with his position that he is
not going to unilaterally bring down tariffs on China, we
need to see concessions from them as well. And again
that's part of the reason that Secretary Besson is going
to talk to his Chinese counterparts this weekend to start
those discussions in person. As for the eighty percent number,
that was a number the President through out there, and
we'll see what happens this weekend. And always in the
(04:53):
effort of transparency, I'm sure you'll hear directly from the
Treasury Secretary or the President.
Speaker 2 (05:00):
And as we wait to hear from the Treasury Secretary
or the President, we hadd a voice of experience here
on Bloomberg TV and Radio. Nazac Nakoktar is with me.
She's National Security Practice group lead at Wiley Ryan former
Assistant Secretary for Industry and Analysis at the International Trade
Administration as well, And Zach, welcome back to Bloomberg TV
and Radio. As we consider this number that was thrown
(05:23):
out there, to paraphrase the words of the Press Secretary
today by President Trump, that the tariff right on China
be brought from one hundred and forty five percent down
to eighty percent. Even at that level, what does that
really fix? What trade can realistically happen with tariff still
that high.
Speaker 8 (05:40):
Great to be with you again, that's an really important
number because when we look at our trading relationship with China,
we have two key issues. We have massive market access
barriers to exports of goods and services into China, and
then we have China's distored command style economic system where
(06:03):
the government holds every possible lever of the economy, including
you know, raw material, electricity, land, labor, certainly prices to
underprice the United States. And what I've found out through
my twenty five years of experience dealing with trade with
China representing domestic industries, so Chinese goods are typically valued
(06:24):
at about sixty seventy percent in many instances less than
the US products. So yeah, I think the President, if
he needs to point to numbers to justify his eighty percent,
I don't think he's going to have to look far
farther than looking at China's market access barriers and China's
level of underpricing that is aided and embedded by the
(06:45):
Chinese government pulling these levers of the Chinese economy to
underprice US. So he's at its essentially actual level of minefield.
Speaker 2 (06:54):
Yeah, if you see justification for that number. Do you
have confidence that they are actually could walk away from
talks in Switzerland tomorrow at a number like that given
your best experience in dealing with China on trade issues.
Are they going to be a willing partner in these
conversations here in Azaka? Do you think tangible outcomes are
(07:16):
possible in the short term?
Speaker 8 (07:19):
Look, I think I think it's the Chinese press, the
president or secretary busn't and ambassador's career on the eighty percent.
It's going to be easy for them for the US
administration to justify it, but I don't want to. There's
it's impossible to over estate how difficult these negotiations are
(07:39):
going to be. The US is looking for the Chinese
government to not only open up the markets for US businesses,
but really to reform their economy so the US market
doesn't have to deal with these distortions that arise from
the Chinese government intervening so much in the economy, including
currency manipulation to under price. But it's going to be
(08:00):
very difficult to press for that because the Chinese government
needs that to become to stay retain its position as
the global manufacturer. So what we ask for the Chinese
government may not be able to give. And so the
big question for a secretary Veston and ambassador career is
where do you find compromise and can you find compromise
at all? The Chinese are pretty much going to, I think,
(08:23):
stand firm on what their demands are, which are continued
access to the US market and technology transfer from the
US to China, and those are things that the administration
might not be too keen to give.
Speaker 2 (08:38):
Well, on your point about the kind of manufacturing over capacity,
the flooding of global markets with Chinese supply, this is
not a unique idea to this administration. We heard plenty
about this during the Biden administration as well. This is
something that the Treasury Secretary then Janet Yellen, was incredibly
focused on. But is the difficulty with that in particular
(08:59):
and not just an hour asking China to make kind
of structural changes to the economy as you described, also
that the US can't necessarily force that alone. When China
has plenty of other buyers you may be willing to
take that supply. Is it that the US actually needs
other countries to cooperate with this effort, Because when I
spoke to the Commerce Secretary Howard Letnink about this yesterday.
He kind of pushed back on the idea that they're
(09:19):
asking that of other countries to counter China.
Speaker 8 (09:24):
That's a great question, and you hit the nail on
the head. Look, the dynamic is when China floods the
global markets with chief goods, right, and steel and aluminum.
That's kind of when the world started waking up the
China's over capacity. But now we have autos, we have semiconductors,
optical fiber cables, the list goes on. Right. What happens
there is that it collapses global prices, and then producers
(09:46):
and other markets can't sell in their markets, can't sell
in markets abroad, so then they end up redirecting their
product to the United States. Which is why the tariffs
that the President had imposed on steel and aluminum, in
part just to put the wall around the United States
prevented us from feeling that effect of China's gloat over capacity. So,
(10:06):
on one hand, the Secretary Vestment is right, and on
the other hand, there's a counter argument. One if we
just put barriers around ourselves to sort of shield us
in the United States from overcapacity, does that kind of
take care of the problem. Yes, and we saw that
example was steel and aluminum. But at the end of
the day, we can't have our allies markets collapse either
(10:27):
by virtue of China's over capacity, because it's having the
same effect on our allies that it is on the
United States. So it's really incumbent on the United States
to kind of give them top cover to be able
to push back. The thing I want to really emphasize
is that when we impose the steel and aluminum tariffs,
many of our allies started getting getting flooded with cheap
(10:47):
Chinese steel and aluminum, so they started directing safeguards around
their borders to shield themselves from China's overcapacity. So I
think we're going to get there. It's really incumbent on
us to give our allies cover so they could do
the same and push back on China. Well.
Speaker 2 (11:04):
One ally, the UK now has a framework at least
trade agreement with the US that does include taking down
tariffs on steel and aluminum in particular, as well as
kind of other sectoral elements, including this one hundred thousand
auto quota where the tariff rate is only ten percent.
And I wonder what you make of that framework we
learned about yesterday, knowing there's still details that need to
be filled in a zaka. And if you see that
(11:25):
as being a kind of reliable blueprint that other countries
might look to follow, or just being unique to the
UK specifically.
Speaker 8 (11:37):
It's an important sort of signaling tool, right. I mean
there's elements of the deals that are really good increase
market access for agriculture in addition to the items you
said market access. I think the US government is estimating
an increase of five billion dollars still, that the ten
percent terraffs remain on most goods from the UK, thattt'll
raise six billion dollars in tariff revenue from the United States.
(11:59):
UK tariffs on the on the United States drops from
five point one percent to one point eight percent. That's
a big deal. So there's a lot of good there
and I think what the President really wanted to do
is was quickly get a deal, a big deal that
signal to other countries look a deal with the United
States as possible. We don't have to continue to be enemies.
(12:22):
Peter who was on just a little bit earlier, Peter
Navarrow is right, our allies in Europe. Most of these
European countries, if you combine their tariff and non tariff
barrier equivalents and converted into a teriffright, it's about thirteen
percent on the United States. Before the Trump administration, the
teriffras of the United States were about one point six
(12:42):
percent applied terraff. So you see this huge disparity. So
I think with Trump again, the Trump administration is really
at least hoping is signals to the markets, is you know,
we want to work with our allies again, and we
want to get to trade deals that open up both
of our markets. And if we can do that, if
we can integrate our economies with those of our allies,
now we have a hope of pushing back against China.
(13:04):
And let's be clear, Europe doesn't have to rely on
the Chinese marketing anymore. Integrate your supply chains with the
United States. I think this is what Trump's trying to signal.
Integrate your supply chains with the United States. Neither of
us are going to be dependent on China, and our
economies are going to be stronger. I hope the President
can execute that strategy, but we'll see what happens in Switzerland.
Speaker 2 (13:26):
Indeed, we will now Zach, Thank you so much as
always for joining us, and as Zach concoct our national
Security Practice Group lead at Riley Ryan Wiley, Ryan and
former Assistant Secretary for Industry and Analysis at the International
Trade Administration, joining me here on the early edition of
Balance of Power.
Speaker 1 (13:44):
You're listening to the Bloomberg Balance of Power Podcast. Catch
us live weekdays at noon and five pm E's durn
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You can also listen live on Amazon Alexa from our
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Speaker 2 (14:03):
Very Happy Friday too, you. Happy Friday to everyone. We
are on the cusp of the weekend here, although for
many in Congress the weekend has already started. They've already
left Washington doing so with some major questions still remaining
on Republicans' budget reconciliation package that they're trying to pass
in the House at least before Memorial Day. A number
(14:23):
of outstanding issues still even as we look ahead to
two key markups that are scheduled for Tuesday in the
Energy and Commerce Committee, which has to make decisions about
Medicaid cuts and in the Ways and Means Committee, which
is charged with grafting the entirety of the tax portion
of this package. That means making a decision on what
happens with the salt cap, whether or not the president
(14:43):
gets things like no tax on tips or overtime or
social security, and maybe whether or not to raise taxes
on the wealthy. After Bloomberg's Eric Wasason had a scoop
yesterday that the President himself actually talked to the Speaker
of the House about raising the raid on those making
two and a half million dollars or more for single person,
five million dollars for a couple to thirty nine point
(15:04):
six percent. I asked the Commerce Secretary, Howard Lutnik about
that proposal last night on balance of power. This is
what he told me.
Speaker 9 (15:13):
The President's trying to make sure he gets no tax
on tips, no tax on overtime, overtime, and no tax
on social security. And if he says, look the richest Americans,
remember he cut it from thirty nine point six to
thirty seven. So if he just goes back to what
he did last time, you know, I'm in favor of that.
I think it's smart as long as it's a redistribution
(15:33):
to his priorities of no tax on tips, no tax
on overtime, and no tax on social security. I think
it's smart.
Speaker 2 (15:41):
So Lutnik is in favor. But is the President himself
actually in favor of this or just willing to tolerate it?
Because this is what he said on True Social earlier
today quote. The problem with even a tiny tax increase
for the rich, which I and all others would graciously
accept in order to help the lower and middle income
workers is that the radical left democratic lunatics would go
around screaming, read my lips the fabled quote by George
(16:04):
Bush the elder that is said to have cost him
the election. No Ross Perot cost him the election. In
any event, Republicans should probably not do it, but I'm
okay if they do, so will they? It's on that
note we turned to Bloomberg's Eric Wasson as well as
Wendy Benjaminson, who's here with me in our Washington, d C.
Speaker 10 (16:23):
Studio.
Speaker 2 (16:24):
We find Eric on Capitol Hill, where he spends a
lot of his time these days covering Congress for US.
And Eric, given that this was your reporting initially that
I'm referencing here, this thirty nine point six percent tax
rate for a party that by and large is in
it to cut taxes, not raise taxes on anyone. Is
this actually something that could happen in this House of Representatives?
Speaker 7 (16:47):
Now?
Speaker 11 (16:47):
I really don't think so. You would take an enormous
push from President Trump if he had come out on
truth social and rarely doubled down on what he said
privately to the Speaker and pushed them to do it.
You know, Trump can move mountains in this party. He's
taken over for the party for all attents and purposes.
But his ambivalent truth social posts really makes me think
this thing is dead. We saw Mike Crapo, is the
(17:08):
top tax writer in the Senate, go on the Hugh
Hewitts Show and pan this idea. We know most Republicans
and leadership positions are against it. I just don't see
it happening. That being said, I think the President does
have good political instincts. It would play well. The biggest
attacks from Democrats will be this is a billionaire tax
cut funded by cutting medicaid for the poorest, and that's
(17:32):
going to sting them in the midterm elections, I predict.
But I don't think the President's going to be able
to get that rate increase.
Speaker 2 (17:41):
And I want to talk about the political calculations here
with Wendy as well. But first Eric on this suggestion,
and Howard Lutman was kind of speaking to this, that
they would consider this because they need to find the
money somewhere to fund all of these other tax cuts
if it's not going to be raising taxes on the wealthy,
and it's also potentially not going to be cutting Medicaid
as much as is prescribed the budget for the Energy
(18:01):
and Commerce Committee. Where do you come up with that
or does that just mean you can't cut all the
taxes the president wants.
Speaker 11 (18:08):
Yeah, it's a tail of two cities, tail two chambers.
The House is where the issue of spending cuts is
really sailing. You've got a group of conservatives who just
really want to see at least two trillion or in
some cases one point five trillion in exchange for four
trillion in tax cuts. The Senate has given itself permission
in its budget to essentially barely cut spending at all,
(18:29):
just four billion, and basically use a budget gimmick to
say that this is extending the existing tax cuts costs
zero dollars because's current policy. At the end of the day,
a lot of people up here think that the Senate
will get its way. There's not the appetite in the
Senate for this type of spending cuts, and the deficit hawks,
the excent they are deficit hawks, will just swallow it.
(18:50):
In the House, I'm not sure that's the case. It's
going to be a protracted fight. But the real problem
right now in the House is they can't they can't
get the House moderates to sign onto these deep medicaid cuts,
and they're going to have to lower their tax appetite.
I'm looking at perhaps maybe three or four years only
of this no tax on tips and no tax on overtime.
They just can't afford ten year package, and maybe everything
(19:12):
else gets scaled back to just four years and say
you'd have to re elect Republicans in twenty twenty eight
to get it extended.
Speaker 2 (19:20):
Well, and it is the question of whether or not
the Republicans can get re elected that's at play here, Wendy,
to the point Eric was making. Democrats argument has made
they're only trying to cut taxes for the rich. They're
going to cut Medicaid. They don't care about lower and
middle income people. But if, for whatever reason, even if
Eric is a little bit skeptical about this, we end
up with a higher tax bracket for those who are
(19:42):
millionaires and we don't end up with as steep medicaid cuts.
That really makes complicated the messaging of the other side.
Speaker 12 (19:50):
It does, it does, and Democrats will have their own
problems finding the messaging. But there's a lot of chess
moving at play here. The sir Donald Trump has been
championing hurt his base. It will raise consumer prices for
goods made in China, Mexico, things like that, it will
raise the cost of American cars, And so he knows
(20:12):
he does have good political instincts, and he knows that
that has hurt his base voters. So he answers that with, well,
but look how populous I am. I'm going to raise
taxes on millionaires, which he says he would graciously accept
to pay. And we saw evidence in the first term
that he doesn't pay the taxes he owes anyway, so
you know, who knows if he'll actually pay it. But
then he realizes that this may not raise enough money
(20:37):
that it puts Republicans in a buind who are in
districts with high income earners, and therefore now he's got
to sort of back off of it and say I
don't really want to do it, but if you want to,
I'm okay. And that gives him the cover to not
be responsible. It will be look at those crazy House Republicans.
They raise taxes on the rich just so I could
(20:58):
cut taxes elsewhere.
Speaker 13 (21:00):
Well.
Speaker 2 (21:00):
But I feel like we've had this conversation a few times,
whether it's the election of a speaker or other matters
in the House that ultimately the president, or one bill
or two. We've obviously now settled on one big, beautiful bill,
but for a while President Trump was leaving things open
on that front too. Have we not learned he has
to make a decision and enforce it among the ranks
of Republicans on Capitol Hill for anything to actually get done.
Speaker 12 (21:21):
Yes, I mean this the way, as Eric says, the
way he has remade the party. He has made it
so that he makes every single decision that is coming
forward and doesn't leave it to the House Speaker or
the Senate majority leader to be able to whip their
voters into a bill that they know will pass and
will protect them politically. They are only interested in what
(21:44):
Donald Trump thinks, and that leaves them in a real bind.
Speaker 2 (21:47):
Well, you're especially in a bind, Eric, if you're in
one of these blue state districts, or maybe a member
of the so called Salt Caucus. As we know, the
salt cap is very much still up for debate. The
Speaker has floated raising it to thirty thousand dollars from
the current ten and at least one Salt District member,
Nicole Mallya Takis of New York, is suggesting that's a
(22:08):
number that she's okay with. My question is is that
going to be enough to satisfy everybody else?
Speaker 11 (22:14):
It's really not. Maley took us was kind of the
weakest link in the Salt Caucus block. You know, we
saw the five other members, including from New York State,
including Mike Lawler, Andrew Garbarino and Nick Loloda being much firmer,
and then they were joined by at least Stephanic. Very
interesting move by her. She had not been a player
on the Salt isssue. There's talk of her running for
(22:36):
governor of New York, and she suddenly got in on
these meetings where she had been absent before, and then
she was part of a statement rejecting the thirty thousand. Yesterday,
Young Kim and a very vulnerable publicadd in California also
rejected the offer. We haven't heard from Tom Caine, who's
a bit of a silent figure up here on Capitol
Hill of New Jersey, but he's a very salt heavy
(22:58):
district in the western part of the state. I suspect
he's against it, but keeping his cards closer to his chest.
So you know, this is going to continue to be
to negotiated. One thing, we might see this was a
flat thirty thousand. We might see them double it for couples.
You know, there's been a lot of I talk about
the marriage penalty under salt, but you know Young Kim
had come out and said she wants sixty two thousand
(23:20):
for an individual. I think she's much more wealthy district.
So we'll see. You know, they can afford to make
me lose one. But they already know there's certain people
like Thomas Massey who were going to vote no on
any tax bill, and they can only afford to lose
two or three. So it's going to come down to
the wire and the House floor.
Speaker 2 (23:39):
Well, and when we consider these members, in particular Wendy,
I wonder how much leverage they have, knowing that if
they decide not to vote for a tax package at
all and the twenty seventeen cuts are allowed to expire,
there is no cap on salt that could arguably work
better for them at home.
Speaker 12 (23:54):
It absolutely could. It would also increase the ire of
Donald Trump. So going back to my earlier point, which
is they're going to have to pass something and they
will have to figure it out. But what every decision
will make is how much political pain can they endure
to deliver to Trump, you know, what he wants. And
if they do cut medicaid or narrow it down, that
(24:16):
is going to cause tremendous pain in the red states
that Trump wants. The salt also hits all those members
that Eric listed, you know, New York and California Republicans
may be thrown out in the midterms, leading to Democratic
members which could flip the majority.
Speaker 10 (24:32):
And install his agenda.
Speaker 12 (24:34):
So there's like, there's so many layers to every decision
that they're going to make here.
Speaker 2 (24:39):
Well, and decisions do still have to be made. Eric,
just in our final minute here, what's the likelihood that
these markups currently scheduled for Tuesday get punted again.
Speaker 11 (24:48):
I don't think they'll be punted, but I think, you know,
we may see a product come out that's less than
satisfactory to every committee member and some last minute changes.
You know, I'm anticipating, for example, ways it means is
going to meet at two pm on Tuesday. They may
go all night onto the world. It's completely exhausted, and
then spring some compromise deal that we can barely understand,
(25:10):
super complex, full of all kinds of loopholes on us,
and we'll have to digest it. So it's gonna I
think it's gonna be very messy. I also think the
House could vote on it in May and we can
see it fail and then come back. There's going to
be a lot of fits and starts in this because
it's going to be very very hard to get the
near unanimity that they need to pass us package.
Speaker 2 (25:31):
Can you sense the excitement in Eric Wasasson's voice here
to have to cover all of this. Eric Waston, Bloomberg
Congressional reporter, thank you so much, alongside Bloomberg Senior editor
Wendy Benjaminson here in Washington, very much appreciated. As we
look forward to the events of next week here in DC,
it's going to be a big one for trying to
advance this massive legislative agenda and get it through Congress.
(25:55):
This Memorial Day is quickly approaching, and we still have
much more ahead here on Balance of Power. Next, Bloomberg
Politics contributors Rick Davis and Jeanie Shanzeno will join me.
We'll turn to our political panel about the new nomination
we got from President Trump last night for the district
attorney in Washington. We'll have more ahead on Bloomberg.
Speaker 1 (26:16):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
Cockley and Android Auto with the Bloomberg Business app. Listen
on demand wherever you get your podcasts, or watch us
live on YouTube.
Speaker 2 (26:32):
I'm Keeley Lines in Washington, and indeed you're listening to
us on Bloomberg Radio or watching our Bloomberg feed on YouTube.
Happy Friday to you all, and here at Bloomberg. Of course,
we don't consider ourselves to be in the business of
necessarily discussing other media outlets, so please know what I'm
about to say is not a comment around Fox News.
It's simply purely an objective observation about how strong the
(26:53):
Fox News to Trump administration pipeline continues to prove to be.
Number two of President Trump's cabinets secretaries, the Transportation Secretary
Sean Duffy and the Defense Secretary Pete Hegseth, Our former
hosts on Fox News. There are dozens of others who
are either in the President's orbit or in other roles
in the administration who are formally affiliated with Fox and
Fox Business as well, And as of last night, we
(27:16):
have another name to add to the list here. Judge
Janine Piro, who of course was a host up until
yesterday I guess of the five on Fox has officially
been tapped to be the interim US Attorney for the
District of Columbia after the President pulled the nomination of
Ed Martin for the post once it became clear his
climb to Senate confirmation was going to be much more
(27:38):
uphill and steeper than previously thought. Martin's now going to
get a role at the Department of Justice instead. Those
official roles will be the next Director of Weaponization Working
Group Associate Deputy Attorney General and pardon Attorney. So we
want to get reaction to these developments and others, and
turn to our political panel on this Friday. Bloomer Cut
(28:00):
contributors Rick Davis and Jeanie Shanzano are with me. Rick,
of course, republican strategist and Stone Court Capital partner. Genie
democratic analyst and senior democracy fellow at the Center for
the Study of the Presidency and Congress. Welcome to you both.
Rick would love you to weigh in here, not just
on the idea that Ed Martin's nomination had to be
polled and what that might signal, but that his interim
(28:22):
replacement is once again someone who's face we recognized from
television and one network in particular.
Speaker 10 (28:28):
Yeah.
Speaker 5 (28:28):
No, this is right out of the playbook by Donald Trump.
He really likes his team at Fox and as you
point out, has been mining them for his administration. It's
worth noting that a contributor like Genie and I Tulsea
Gabber from Fox is also one of the more notorious
members of the Trump administration. So shout out to contributors
(28:52):
all over the place. But look judged Innen. Yeah, she
is a big sort of celebrity within Fox. But she
had a career as a county judge and as a
prosecutor in Westchester County, New York, which was extremely successful.
(29:13):
I mean, she has got the credits, the capability and
the experience you need to serve in this post. So
it's not just a Fox News analyst or or partsipilatory
a journalist. It's somebody who actually was a prosecutor and
a judge and has a lot of experience here.
Speaker 2 (29:33):
So Genie is she qualified.
Speaker 13 (29:37):
I have to tell you, Kaylee, Jeanine Piro was my
Westchester County DA for many, many years. Small it's a
small world. Shout out to contributors and das everywhere, you know.
It's just fascinating because one of the reasons that Tom Tillis,
who's really the lynchpin of this entire move from Martin
(29:58):
to Judge Janine is we call her, was because of
his role primarily in the January sixth incident and also
obviously supporting the pardons of the January six rioters. And
yet if you listen carefully to Judge Janine, and it
really doesn't take to be very careful, but if you
(30:18):
just listen to Fox News. She has said a number
of things that really leave you scratching your head if
you're listening to Tom Tillis, because there's not a lot
of difference between what Martin was saying and what Judge
Janine has said about January six In fact, she's named
in these two big defamation lawsuits, the dominion voting one
(30:42):
which obviously Fox News ended up settling. Some of that
was about things that she had said on the air,
So that, to me is one of the fascinating areas here.
And yet despite that, Tom Tillis goes on Twitter and says,
you know, this is a great appointment on Judge Janine.
So you know, it's interesting to see how this is
(31:04):
playing out. She seems to be more politically palatable, despite
the fact she's no more independent from Donald Trump in
the White House and her views are very similar to
Martin's on the issue of January sixth.
Speaker 2 (31:17):
Well, I'm glad she's raising Tom Tillis here, Rick, because
one of the most memorable lines from you I think
we've gotten here on Bloomberg this year was when you
said everybody sometimes wants to be a John McCain and
they end up a Tom Tillis when he notably did
not defy the Republican Party with a few of Trump's
other nominees earlier this year for higher profile cabinet posts.
What is it about Ed Martin that finally got a
(31:38):
Republican senator to step out of line with the party.
Speaker 5 (31:41):
Well, I'm pretty sure he was listening to me and
not thinking about Ed Martin. Right, Look, Sier Tillis makes
the case, And I think it is a differentiator to
judge Jannine that Ed was someone who actually participated in
the h the protests, the march to the Capitol. Reports
(32:03):
have it that he didn't enter the capital, but he
was an activist in the effort, and and and and
then you know, really didn't just comment about it on TV.
You know, he actively represented members and lobbied hard for
their for their for their commutation. So I think I
(32:25):
think you'd have to consider him in a different, different
subset than someone who just comments about it on TV.
But look, I think all these folks in the Senate,
especially as relates to controversial nominations, are feeling their way.
They're trying to think through, you know, how far they
can go. There was a rally around the cabinet initially,
(32:46):
get them in place, do it early, do it historically early.
But I think now you've got some folks who are,
you know, thinking, gee, uh, maybe we maybe we shouldn't
just be a rubber stamp and and and start feeling
our way through some of these nominal who may not
be qualified to serve.
Speaker 8 (33:05):
Well.
Speaker 2 (33:05):
And when we consider other nominees, I would note, Genie
that it wasn't just Ed Martin's that was pulled. This week,
Trump also abandoned his original pick for surgeon General in
favor of Casey Means. And I wonder if you see
that as a signal at this point, when he was
able to get all of his at least highest profile
cabinet level positions filled with record speed, as Rick was
alluding to, and with relative ease, with the exception of
(33:28):
Matt Gates, does it even matter if he has to
pull them at this point?
Speaker 13 (33:33):
You know, I think he feels that. In the case
of Means, he said, you know, look at this was
somebody who came highly recommended by Kennedy, who he trusts enormously.
He said, he doesn't know her well, but based on
what he has heard and the recommendation, he was fine
going with her. But I think it shows in both
cases that the president feels he has other priorities that
(33:56):
are taking precedent over a big fight in the Senate.
That's what it would be about. A confirmation that's on
the edge, you know. And and this Martins one was
going to be on the edge when you look at
some of what had come out about him posting and
praising on his podcast. Somebody who spoke, you know, about
(34:16):
Hitler dressed up as Hitler said horrible things, horribly anti
Semitic things. This was the kind of thing that was
going to come out in the Senate confirmation hearing. And
so does the president really want to waste you know,
political capital on that. Probably not, so you would fight
for those upper level positions. But now he's trying to
(34:37):
he's starting to say he's got other priorities, of course,
number one being getting that reconciliation bill. So I think
that's what we're starting to see here with some of
these other appointments. That's not to say they're not important,
but the president isn't willing to waste a lot of
political capital on them.
Speaker 2 (34:56):
And while we're discussing current nominees and nominations. I also
want to talk about a nomination that was made decades
ago that we're reflecting on today, and that was the
nomination made by then President George H. W. Bush for
David Souter to get a seat on the Supreme Court.
He was thought at the time to be a conservative pick,
and his tenure on the Court maybe proved otherwise. Rick.
(35:17):
He died this week at eighty five peacefully, we understanded
his home in New Hampshire, and I wonder your thoughts
as to how we should be reflecting on that legacy.
Speaker 5 (35:27):
Yeah, this might have been the greatest surprise in the
last fifty years as far as an appointment under the
Supreme Court. I remember very clearly, as a young Reagan
Conservative thinking, Wow, this is an incredible opportunity to put
a conservative on the Court. And of course, my great friend,
(35:47):
late Signer Warren Rudman picked this one out of his
back pocket from New Hampshire and stunned the world. And
when George HW. Bush, President Reagan's vice president, appointed him,
I think people were floored, and it was not a
shock or a surprise that he wound up being as
(36:09):
moderate a Supreme Court justice as he turned out to be,
but really an amazing period of time. Then we see
a lot of the debates around things like Roe v.
Wade happening. Then that happened in the first Trump administration,
So it is a little bit of deja vu all
over again. But may he rest in peace. A great
(36:29):
servant of the people of our nation, and somebody who
I think, you know, considered the law, you know, the
highest calling in the land, and certainly served honorably.
Speaker 2 (36:43):
Well in genie. As we consider his tenure on the
court and his service for nineteen years on the High Court,
are we ever going to see someone like that again,
given how partisan and politically tinged to the court seems
to have become.
Speaker 13 (37:00):
You know, I don't think so. I think one of
the things we see in Suitor is a good example
of this is future administrations learn from past administrations, and
in this case, the H. W. Bush administration described Suitor
as the biggest mistake of his presidency. I don't know
if you know that is something that everybody would agree with,
(37:22):
but certainly, you know, he was in a camp like
Earl Warren, you know, Earl Warren appointed and then becomes this,
you know, really really the most liberal lion of the
Supreme Court. Ever in Chief Justice Suitor not quite as impactful,
but certainly in the latter part of the twentieth century
(37:42):
had a big voice on the Court. And so I
don't know that we'll see this. He's also something of
a throwback in so many ways, Kaylee. Here was somebody
who wrote decisions Longhand on pen and paper, famously decried technology.
Here was somebody, they said, every day took a luncheon
plastic bag of a yogurt and an apple to the
(38:03):
office and ate by himself. And here's somebody who retired after,
as you mentioned, just nineteen years at the young age
of sixty nine, to go back home to New Hampshire
and continue to serve the public there. And so, in
so many ways, also a traditional sort of New Englandish
Republican that you don't see a lot of anymore. So,
(38:25):
in so many ways, a throwback to an earlier era.
And it's sad for me personally, because I don't know
that we're going to see that again, at least in
the near future.
Speaker 2 (38:35):
Have we seen, though, rick glimpses of it. In Justice
Amy Coney Barrett, who earlier this year was getting a
lot of flak from the right for multiple times siding
against the Trump administration when she wasn't expected to.
Speaker 10 (38:48):
Yeah, I think.
Speaker 5 (38:49):
Certainly my experiences, you never really know what you get
with a Supreme Court appointment until they've started ruling. And
I would say not just Amy Coney Barrett, but Brett Kavanaugh.
I think has been a surprise to some conservatives who
thought he would be, you know, a very conservative judge,
and even Neil Gorsitch has surprised some with his ruling.
(39:11):
So I think that this court currently is particularly interesting
because they are not following just a very clear conservative
line every time there's an issue in front of the docket.
Speaker 2 (39:27):
All right, Rick Davis and Jeanie Shanzino.
Speaker 1 (39:31):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm. He's durn
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You can also listen live on Amazon Alexa from our
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Speaker 2 (39:50):
It's another one of those weeks where there's so much
news that sometimes you don't have enough time to talk
about it all. Like yesterday, for example, we got the
first post Liberation Day trade or framework between the US
and the United Kingdom, and we got history made in
Rome with the election of a new American pope. And
with those things going on, you'd be forgiven if you
miss the Bloomberg scoop that the Treasury Department was actually
(40:12):
developing a fast track process for screening foreign investments in
the US through Sciphius, an effort that this administration, the
Trump administration, expects could smooth the way for billions of
dollars from foreign sovereign wealth funds to come into the
United States sovereign wealth friends from countries like the UAE
or Saudi Arabia or cutter no coincidence that those happened
(40:35):
to be three countries where President Trump will be visiting
next week as he makes a trip to the Middle East.
And obviously, in addition to foreign investment, there's a lot
of other things he is likely to discuss there, and
that's what we want to get into now here on
Bloomberg TV and Radio. I'm pleased to say. Joining me
is so Gar Shimali. She is now the CEO of
Greenwich Media Strategies and founder, but also former director of
(40:56):
Syria and Lebanon at the National Security Council and here
with me in our Washington, d C studio, Hagar, good
to see you as always, Thanks for having me. Obviously,
this is going to be a very big week for
the President. There is a lot he'd like to discuss
with the UAE and the Saudi's and Cutter specifically, how
should we consider the kind of financial aspect of this relationship.
(41:17):
Is he's courting investment from these countries into the US,
and how that influence is actually the shape of those
alliances and the positioning of geopolitics in the Middle East.
Speaker 10 (41:27):
Yeah, that's such a good question.
Speaker 14 (41:28):
No one is framing it that way, by the way,
and because one of the most important pieces of this
is actually an economic route that started under the Biden
administration and is now being continued in the Trump administration.
One of the real policies actually that's being continued called IMEC,
so something where you're going India, Middle East, Europe, fashioning
this corridor, if you will, to not only encourage economic
(41:51):
trade with all of these continents and locations and regions,
but also a lot of that is about providing becoming
a counterweight to China. So that's going to be a
lot of the focus of this trip. There are going
to be many things actually that they're going to discuss
that are not economic as well, but a lot of
that too is making sure you're pulling Saudi Arabia from China,
pulling the region away from China, ensuring that as Saudi
(42:15):
Arabia is trying to diversify its economy, they're interested in
all sorts of investments back and forth, and so they're
going to be looking for that. Certainly an increase in
any kind of trade related to defense equipment as well.
That's something that Saudi Arabia struggles with democrats and has
better luck with the Republicans, so they're going to be
talking about things like that as well well.
Speaker 2 (42:35):
And for the UAE especially, we know there's kind of
chip considerations as well. Bloomberg has had some reporting on
whether or not the administration is likely to lift chip
restrictions on the UAE in particular. As to your point,
the whole point of that is to try to make
sure those chips ultimately don't find their way to China.
So maybe a lot of this does come back to China,
but a lot of this is about this region as
well in the current environment in the Middle East, when
(42:57):
we consider the engagement we've seen from this administration and
so far with Israel as it relates to the ongoing
conflict in Gaza, with Saudi Arabia, as they look to
expand the Abraham Accords, what really is for Middle East
purposes objective number one for the president? Do you think?
Speaker 10 (43:14):
Absolutely so.
Speaker 14 (43:14):
There's a lot of wins for the president to achieve
in Saudi Arabia, and one of the ones at the
top of the list is the discussions that would lead
to peace deals, a number of peace deals they want
to They want to increase the Abraham Accords, increase the
countries under the Abraham Accords as much as possible. The President,
and I'm not trying to say this lightly, he is
(43:35):
focused on a Nobel Peace Prize at through the Abraham Accords,
and he's been very clear about that, right. He was
clear about that the first time around and now the
second time around, and a lot of that, A big
chunk of that is really through Saudi Arabia, not all
of the countries, but Saudi Arabia would be a big
one because you'd get a lot of others in its trail,
and those talks are talks that have already existed, right,
so they've been going on for a while, really since
(43:57):
the end of Trump's term Trump one points, and so
that's really they're going to be continuing those talks now.
There are certain things elements of those talks initially that
appears that they're also being pulled out, things like discussing
civil nuclear partnerships, things of that kind that were originally
going to be part of a normalization deal or peace deal,
(44:18):
and it looks as though that might be pulled out.
But nonetheless, I think it'll all be in the context
of getting to a final destination, and that destination being
having Saudi Arabia and other Middle Eastern countries under the
Abrahamic Coords.
Speaker 2 (44:30):
What timeline do you think is realistic for that? It's visit,
I would imagine is not going to be alone.
Speaker 14 (44:35):
In accomplishing that. No, Well, and the Saudis, unlike other countries.
They've made it clear and I don't think that they're
going to backtrack on their insistence that there be the
promise of a Palestinian state. It doesn't mean that one
needs to be necessarily created to recognized, but that there
be some kind of process on to get there, and
that's going to hamper things a little bit. I mean,
(44:58):
if I were a betting woman, it's it's hard to say.
Maybe twenty twenty seven. I just sometimes I think it'll
be in a year or so, and then other times
there are days where I'm like, we're this is really happening,
and then there are days where I think maybe maybe
another two years.
Speaker 8 (45:11):
Yeah.
Speaker 2 (45:11):
Well, every day is different around here, that's for sure.
But to your point on there being some kind of
day after long term solution for the Palestinians in Gaza,
where even are we on those conversations on the idea
of renewing any kind of ceasefire agreement or bringing some
kind of end to this conflict, because the administration was
very focused on that, very proud of the deal reached
(45:32):
on the eve of Trump's negotiation, and then what happened.
Speaker 14 (45:35):
Yeah, And you know, it's funny. The last time I
was on, which was maybe ten days ago, we discussed
this and there were a number of deals that were
going back and forth, and there was a deal proposed
by the Israelis that was rejected. Then the Egyptians and
Cutteries had come in and we are now really unfortunately
in a spot where we've gone completely backwards. The war
is being actively expanded by Israel in Gaza. It's a
(45:58):
decision by the cabinet, but also more importantly, it was
a decision that very clearly laid out that the hostages
were not being prioritized. There are we don't know, but
we believe between now, we're hearing between twenty one and
twenty four who are alive.
Speaker 10 (46:14):
I don't want to make I don't want to make.
Speaker 14 (46:15):
Any kind of assertion on this, but anyway, every day
that passes as a risk for them, and we know that.
And the Cabinet really came out crystal clear and said
we are prioritizing the expansion of this because we don't.
Speaker 10 (46:29):
They have Hamas by the neck and they want to
crush them completely.
Speaker 14 (46:31):
And I, as account as somebody who worked in counter terrorism,
I want nothing more than to see Hamas obliterated. My
own opinion is I do I'm not sure I understand
why they can't cut a deal, get the hostages released
and then do targeted operations as they have in Lebanon,
for example. But because I'm completely behind the idea of
crushing Hamas completely. But anyway, that's Bibie's very clearly, very
(46:52):
intent on that singular goal.
Speaker 2 (46:54):
So what role does the US play in influencing Israel
in any of this? Knowing that Israel also maybe have
taken a bat by some of the Trump Administration's recent actions,
including declaring a truce with the Houthies seemingly out of nowhere.
Speaker 10 (47:06):
Yeah, I was just going to say that.
Speaker 14 (47:07):
So, actually, the Israelis, and this I think is a
bit indicative, indicative of how things might go between the
United States and israel Is. The BB has been blindsided
by the Trump administration a number of times now.
Speaker 10 (47:19):
So first you.
Speaker 14 (47:20):
Had, for example, the talks that were taking place directly
with Hamas on the release of American hostages.
Speaker 10 (47:27):
You had, then you have the Iran talks, and now.
Speaker 14 (47:30):
You have this deal that the US administration cut with
the Hoothy's where the Houthis have promised not to target
American vessels in the Red Sea. But that's it, just
the American vessels and that deal not only blindsided BB,
according to press reports, but it indicates it's a it's
very demonstrative of an America first policy, Right, we care
about our vessels we care about our national security objectives
(47:54):
only and what is directly American, and we're going to
pursue that unapologetically. And that makes it difficult. While Bebe
seems to listen to Trump and has a lot of
respect for him, or you know, Trump has a lot
of clout with BB, those kind of efforts are going
to make it more difficult for the US to push
BB where they want.
Speaker 2 (48:12):
You raised Iran in that last answer, and I do
want to talk about that as well. As we learned today.
Another round of talks between the US and Iran will
take place this weekend on Sunday, specifically in Oman. And
I wonder how you see progress here because we are
still talking. This is the next round of talks and
what has been a line of them in succession. But
(48:32):
how far still does that put us from actually reaching
some kind of agreement with Iran?
Speaker 14 (48:36):
Yeah, so this one in particular. The thing that I
is I think so important to talk about these talks
is that a lot what I see a lot in
the public discourse out there is that it's just a
repeat of what the jcpoa under prison is thinking.
Speaker 2 (48:51):
Wrong.
Speaker 10 (48:51):
He's completely wrong, Okay, he's completely wrong.
Speaker 14 (48:53):
And I worked on that deal as a spokesburs and
I was Praisury spokesurson at the time. I worked on
that deal when it was happy under person. This is
completely different. This is based on an assessment that Iran
is very close to a nuclear weapon, that that would
fundamentally change things in the Middle East and would trigger
an arms race and completely change our national security problems there.
Speaker 10 (49:14):
Then that means that the it inevitably.
Speaker 14 (49:17):
Could lead to a military solution, and that these talks
are a last ditch effort. So the talks are last
ditch effort, and unlike the ones with under Obama, they
don't go into the nitty gritty of how many centrifugeons
can they have, which centrifuges wear in Iran, how much
can those centrifugees operate, how much uranium. No, it's very
singularly focused onnot you Iran can never have a nuclear weapon.
There is no timeline there is it's never. If you
(49:39):
don't agree, the US and or Israel or Israel whichever
will bomb those nuclear facilities, and that is a threat
Iran takes very seriously because in October Israel bombed the
defense systems around those nuclear facilities and Tehran and the
Iranian regime is very weak at the moment, so they
can't risk.
Speaker 2 (49:55):
That, so would they agree.
Speaker 14 (49:58):
They are in a position where these talks could go
well to agree because they're desperate for a win, given
that they're on the defense and that they want they
need to survive, and that they need sanctions lifted. But
I don't know that everybody across the Middle least is
happy about that. By the way, I don't think the
Saudis are very excited about that. I know that those
(50:18):
who are against working against Hesbala and Lebanon are not
excited about that. They want nothing more be included to
see the Irananguram crushed.
Speaker 2 (50:26):
Well, so President Trump could get an earful about this.
He's not just coming to these countries with his own objectives.
They probably have things they want to say to him
in return.
Speaker 14 (50:34):
Absolutely, and I think that I believe the Trump administration
from everything I've seen in those I've spoken to, there
is a very large focus on this question of triggering
a nuclear arms race in the Middle East. That is
what incentivized these talks, and you even saw it with
the Vice President Jadie Vance.
Speaker 10 (50:49):
He said earlier this week.
Speaker 14 (50:50):
Yes, he's hoping that these talks could open the door
for talks with China and Russia to talk about decreasing
their nuclear weapons altogether. That everybody could. That's very by
the way reagan Esque way of looking at things. It's
a positive goal regardless of what people like me think
would be Ronny regime. And so that's how they're going
to catch it, and they're going to go to Saudi
(51:11):
Arabia and say, listen, this is important, this is a priority.
You need to support us, even if it's quietly behind
the scenes, and let us do this. But I have
no doubt that it will come with some kind of
exchange of some kinds as it did under person Obama,
whether it's defense equipment deals or whatever.
Speaker 2 (51:25):
Well, we'll have to look and see how all of
this pans out next week. Good to see you as always, Haigar.
Thank you for being here. H Gar Shimali, former director
for Syria and Lebanon at the National Security Council, now
founder and CEO at Greenwich Media Strategies here with us
on Balance of Power.
Speaker 11 (51:41):
Thanks for listening to the Balance of Power podcast. Make
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(00:20):
you get your podcasts, or watch us live on YouTube.
Speaker 2 (00:25):
Live on Bloomberg TV and radio. As we still, as
we are pretty much every day, are keeping track of
the latest when it comes to terrors after President Trump,
of course, today floated the idea of an eighty percent
tariff on China, much lower than the current one hundred
and forty five percent cumulative rate, seeming right, leaving it
up to the Treasury Secretary Scott Besson as he makes
tracks to Switzerland for talks alongside the US Trade Representative
(00:48):
Jamison Greer with China that begin tomorrow, and we're trying
to get as much insight as we can into the
thinking of this administration around trade ahead of that meeting,
in the aftermath of the framework agreed to between the USA,
US and the UK yesterday, and we got some of
that from Peter Navarro earlier on Bloomberg Surveillance. He's White
House Director of the Office of trade and manufacturing policy,
(01:09):
and he had this to share with our colleagues.
Speaker 3 (01:12):
All we're doing is trying to level the playing field.
I saw the EU kind of rattling Sabers. I think
it was yesterday about some kind of retaliation, and I
would just say to anybody who's in the European Union,
I mean, how how can you look at us in
the face and threaten us when your tariffs are higher?
(01:32):
You have lost cases repeatedly at the WTO on US
selling you things like beef and poultry, and you won't
even honor that.
Speaker 4 (01:43):
So yesterday the President called Ursula Vonderline fantastic, and he
said he hopes to meet her. But are you saying
that the European Union is not as high on the
priority list than say, other trading partners like the brand Japan.
Speaker 3 (01:57):
Not at all. I mean the EU to be clear here,
we have the second highest trade deficit with the EU,
behind China, so they're very high on the list. All
I'm saying here is that I thought I found it
unfortunate that the EU kind of fired I think some
term was fired shots.
Speaker 5 (02:18):
Across our bow.
Speaker 3 (02:19):
It's like retaliation will not work against the United States.
We shouldn't have that. Let's talk, let's figure this out,
and it would be nice here. Let's give piece a
chance here. All we're asking for here in the United
States of America is fairness. I mean, would you agree
is there any disagreement on this set and on your
set that the tariffs of the EU are higher, and
(02:41):
that the non tariff bearers are higher, and that the
w t O in Geneva is basically sanctioning that through
twodays one is the but but would.
Speaker 6 (02:53):
You agree with that fact check? There? There's a bigger
question here. There's a bigger question here, and this is
something that the German Finance Minister has come out and
talked about, which is they'd be willing to drop all
tariffs to zero. If the US were willing to drop
all tariffs to zero, there is a willingness to negotiate
aground the board to a lower tariff regime. Would that
(03:14):
be acceptable to you?
Speaker 2 (03:15):
Or is ten percent?
Speaker 3 (03:16):
So let's stay with that. See that's such a misdirection. Okay,
it's the non tariff barrier. Stupid to kind of paraphrase
Bill Clinton, It's like, it's the non tariff barriers. So
when countries like Vietnam or entities like the EU say
to us, oh, let's all go to zero tariffs and
(03:37):
everything will be okay. That's not the problem. It's part
of the problem. But the bigger problem is the non
tariff barriers in Europe. It's the vattax.
Speaker 2 (03:50):
So Peter Navarro choosing to focus on non tariff barriers
rather than the question around this ten percent baseline teriff
f eight that still remains, which is what my colleague
Lisa Bramo It's was asked about, and we actually heard
from the White House Press Secretary Caroline Levit about that
she's still briefing the press from the briefing room as
we speak, saying she had just heard from President Trump
that he is determined on that ten percent tastes like
(04:14):
baseline tariff, that he is committed to it. So I
guess there's your answer, at least for now. She also,
of course, was asked about the President's musing on true
social Today's suggesting that eighty percent was a tariff level
on China. That seems right. This is how the Press
secretary addressed that.
Speaker 7 (04:31):
The President still remains with his position that he is
not going to unilaterally bring down tariffs on China, we
need to see concessions from them as well. And again
that's part of the reason that Secretary Besson is going
to talk to his Chinese counterparts this weekend to start
those discussions in person. As for the eighty percent number,
that was a number the President through out there, and
we'll see what happens this weekend. And always in the
(04:53):
effort of transparency, I'm sure you'll hear directly from the
Treasury Secretary or the President.
Speaker 2 (05:00):
And as we wait to hear from the Treasury Secretary
or the President, we hadd a voice of experience here
on Bloomberg TV and Radio. Nazac Nakoktar is with me.
She's National Security Practice group lead at Wiley Ryan former
Assistant Secretary for Industry and Analysis at the International Trade
Administration as well, And Zach, welcome back to Bloomberg TV
and Radio. As we consider this number that was thrown
(05:23):
out there, to paraphrase the words of the Press Secretary
today by President Trump, that the tariff right on China
be brought from one hundred and forty five percent down
to eighty percent. Even at that level, what does that
really fix? What trade can realistically happen with tariff still
that high.
Speaker 8 (05:40):
Great to be with you again, that's an really important
number because when we look at our trading relationship with China,
we have two key issues. We have massive market access
barriers to exports of goods and services into China, and
then we have China's distored command style economic system where
(06:03):
the government holds every possible lever of the economy, including
you know, raw material, electricity, land, labor, certainly prices to
underprice the United States. And what I've found out through
my twenty five years of experience dealing with trade with
China representing domestic industries, so Chinese goods are typically valued
(06:24):
at about sixty seventy percent in many instances less than
the US products. So yeah, I think the President, if
he needs to point to numbers to justify his eighty percent,
I don't think he's going to have to look far
farther than looking at China's market access barriers and China's
level of underpricing that is aided and embedded by the
(06:45):
Chinese government pulling these levers of the Chinese economy to
underprice US. So he's at its essentially actual level of minefield.
Speaker 2 (06:54):
Yeah, if you see justification for that number. Do you
have confidence that they are actually could walk away from
talks in Switzerland tomorrow at a number like that given
your best experience in dealing with China on trade issues.
Are they going to be a willing partner in these
conversations here in Azaka? Do you think tangible outcomes are
(07:16):
possible in the short term?
Speaker 8 (07:19):
Look, I think I think it's the Chinese press, the
president or secretary busn't and ambassador's career on the eighty percent.
It's going to be easy for them for the US
administration to justify it, but I don't want to. There's
it's impossible to over estate how difficult these negotiations are
(07:39):
going to be. The US is looking for the Chinese
government to not only open up the markets for US businesses,
but really to reform their economy so the US market
doesn't have to deal with these distortions that arise from
the Chinese government intervening so much in the economy, including
currency manipulation to under price. But it's going to be
(08:00):
very difficult to press for that because the Chinese government
needs that to become to stay retain its position as
the global manufacturer. So what we ask for the Chinese
government may not be able to give. And so the
big question for a secretary Veston and ambassador career is
where do you find compromise and can you find compromise
at all? The Chinese are pretty much going to, I think,
(08:23):
stand firm on what their demands are, which are continued
access to the US market and technology transfer from the
US to China, and those are things that the administration
might not be too keen to give.
Speaker 2 (08:38):
Well, on your point about the kind of manufacturing over capacity,
the flooding of global markets with Chinese supply, this is
not a unique idea to this administration. We heard plenty
about this during the Biden administration as well. This is
something that the Treasury Secretary then Janet Yellen, was incredibly
focused on. But is the difficulty with that in particular
(08:59):
and not just an hour asking China to make kind
of structural changes to the economy as you described, also
that the US can't necessarily force that alone. When China
has plenty of other buyers you may be willing to
take that supply. Is it that the US actually needs
other countries to cooperate with this effort, Because when I
spoke to the Commerce Secretary Howard Letnink about this yesterday.
He kind of pushed back on the idea that they're
(09:19):
asking that of other countries to counter China.
Speaker 8 (09:24):
That's a great question, and you hit the nail on
the head. Look, the dynamic is when China floods the
global markets with chief goods, right, and steel and aluminum.
That's kind of when the world started waking up the
China's over capacity. But now we have autos, we have semiconductors,
optical fiber cables, the list goes on. Right. What happens
there is that it collapses global prices, and then producers
(09:46):
and other markets can't sell in their markets, can't sell
in markets abroad, so then they end up redirecting their
product to the United States. Which is why the tariffs
that the President had imposed on steel and aluminum, in
part just to put the wall around the United States
prevented us from feeling that effect of China's gloat over capacity. So,
(10:06):
on one hand, the Secretary Vestment is right, and on
the other hand, there's a counter argument. One if we
just put barriers around ourselves to sort of shield us
in the United States from overcapacity, does that kind of
take care of the problem. Yes, and we saw that
example was steel and aluminum. But at the end of
the day, we can't have our allies markets collapse either
(10:27):
by virtue of China's over capacity, because it's having the
same effect on our allies that it is on the
United States. So it's really incumbent on the United States
to kind of give them top cover to be able
to push back. The thing I want to really emphasize
is that when we impose the steel and aluminum tariffs,
many of our allies started getting getting flooded with cheap
(10:47):
Chinese steel and aluminum, so they started directing safeguards around
their borders to shield themselves from China's overcapacity. So I
think we're going to get there. It's really incumbent on
us to give our allies cover so they could do
the same and push back on China. Well.
Speaker 2 (11:04):
One ally, the UK now has a framework at least
trade agreement with the US that does include taking down
tariffs on steel and aluminum in particular, as well as
kind of other sectoral elements, including this one hundred thousand
auto quota where the tariff rate is only ten percent.
And I wonder what you make of that framework we
learned about yesterday, knowing there's still details that need to
be filled in a zaka. And if you see that
(11:25):
as being a kind of reliable blueprint that other countries
might look to follow, or just being unique to the
UK specifically.
Speaker 8 (11:37):
It's an important sort of signaling tool, right. I mean
there's elements of the deals that are really good increase
market access for agriculture in addition to the items you
said market access. I think the US government is estimating
an increase of five billion dollars still, that the ten
percent terraffs remain on most goods from the UK, thattt'll
raise six billion dollars in tariff revenue from the United States.
(11:59):
UK tariffs on the on the United States drops from
five point one percent to one point eight percent. That's
a big deal. So there's a lot of good there
and I think what the President really wanted to do
is was quickly get a deal, a big deal that
signal to other countries look a deal with the United
States as possible. We don't have to continue to be enemies.
(12:22):
Peter who was on just a little bit earlier, Peter
Navarrow is right, our allies in Europe. Most of these
European countries, if you combine their tariff and non tariff
barrier equivalents and converted into a teriffright, it's about thirteen
percent on the United States. Before the Trump administration, the
teriffras of the United States were about one point six
(12:42):
percent applied terraff. So you see this huge disparity. So
I think with Trump again, the Trump administration is really
at least hoping is signals to the markets, is you know,
we want to work with our allies again, and we
want to get to trade deals that open up both
of our markets. And if we can do that, if
we can integrate our economies with those of our allies,
now we have a hope of pushing back against China.
(13:04):
And let's be clear, Europe doesn't have to rely on
the Chinese marketing anymore. Integrate your supply chains with the
United States. I think this is what Trump's trying to signal.
Integrate your supply chains with the United States. Neither of
us are going to be dependent on China, and our
economies are going to be stronger. I hope the President
can execute that strategy, but we'll see what happens in Switzerland.
Speaker 2 (13:26):
Indeed, we will now Zach, Thank you so much as
always for joining us, and as Zach concoct our national
Security Practice Group lead at Riley Ryan Wiley, Ryan and
former Assistant Secretary for Industry and Analysis at the International
Trade Administration, joining me here on the early edition of
Balance of Power.
Speaker 1 (13:44):
You're listening to the Bloomberg Balance of Power Podcast. Catch
us live weekdays at noon and five pm E's durn
on Apple, Cogway and Android Auto with the Bloomberg Business App.
You can also listen live on Amazon Alexa from our
flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 2 (14:03):
Very Happy Friday too, you. Happy Friday to everyone. We
are on the cusp of the weekend here, although for
many in Congress the weekend has already started. They've already
left Washington doing so with some major questions still remaining
on Republicans' budget reconciliation package that they're trying to pass
in the House at least before Memorial Day. A number
(14:23):
of outstanding issues still even as we look ahead to
two key markups that are scheduled for Tuesday in the
Energy and Commerce Committee, which has to make decisions about
Medicaid cuts and in the Ways and Means Committee, which
is charged with grafting the entirety of the tax portion
of this package. That means making a decision on what
happens with the salt cap, whether or not the president
(14:43):
gets things like no tax on tips or overtime or
social security, and maybe whether or not to raise taxes
on the wealthy. After Bloomberg's Eric Wasason had a scoop
yesterday that the President himself actually talked to the Speaker
of the House about raising the raid on those making
two and a half million dollars or more for single person,
five million dollars for a couple to thirty nine point
(15:04):
six percent. I asked the Commerce Secretary, Howard Lutnik about
that proposal last night on balance of power. This is
what he told me.
Speaker 9 (15:13):
The President's trying to make sure he gets no tax
on tips, no tax on overtime, overtime, and no tax
on social security. And if he says, look the richest Americans,
remember he cut it from thirty nine point six to
thirty seven. So if he just goes back to what
he did last time, you know, I'm in favor of that.
I think it's smart as long as it's a redistribution
(15:33):
to his priorities of no tax on tips, no tax
on overtime, and no tax on social security. I think
it's smart.
Speaker 2 (15:41):
So Lutnik is in favor. But is the President himself
actually in favor of this or just willing to tolerate it?
Because this is what he said on True Social earlier
today quote. The problem with even a tiny tax increase
for the rich, which I and all others would graciously
accept in order to help the lower and middle income
workers is that the radical left democratic lunatics would go
around screaming, read my lips the fabled quote by George
(16:04):
Bush the elder that is said to have cost him
the election. No Ross Perot cost him the election. In
any event, Republicans should probably not do it, but I'm
okay if they do, so will they? It's on that
note we turned to Bloomberg's Eric Wasson as well as
Wendy Benjaminson, who's here with me in our Washington, d C.
Speaker 10 (16:23):
Studio.
Speaker 2 (16:24):
We find Eric on Capitol Hill, where he spends a
lot of his time these days covering Congress for US.
And Eric, given that this was your reporting initially that
I'm referencing here, this thirty nine point six percent tax
rate for a party that by and large is in
it to cut taxes, not raise taxes on anyone. Is
this actually something that could happen in this House of Representatives?
Speaker 7 (16:47):
Now?
Speaker 11 (16:47):
I really don't think so. You would take an enormous
push from President Trump if he had come out on
truth social and rarely doubled down on what he said
privately to the Speaker and pushed them to do it.
You know, Trump can move mountains in this party. He's
taken over for the party for all attents and purposes.
But his ambivalent truth social posts really makes me think
this thing is dead. We saw Mike Crapo, is the
(17:08):
top tax writer in the Senate, go on the Hugh
Hewitts Show and pan this idea. We know most Republicans
and leadership positions are against it. I just don't see
it happening. That being said, I think the President does
have good political instincts. It would play well. The biggest
attacks from Democrats will be this is a billionaire tax
cut funded by cutting medicaid for the poorest, and that's
(17:32):
going to sting them in the midterm elections, I predict.
But I don't think the President's going to be able
to get that rate increase.
Speaker 2 (17:41):
And I want to talk about the political calculations here
with Wendy as well. But first Eric on this suggestion,
and Howard Lutman was kind of speaking to this, that
they would consider this because they need to find the
money somewhere to fund all of these other tax cuts
if it's not going to be raising taxes on the wealthy,
and it's also potentially not going to be cutting Medicaid
as much as is prescribed the budget for the Energy
(18:01):
and Commerce Committee. Where do you come up with that
or does that just mean you can't cut all the
taxes the president wants.
Speaker 11 (18:08):
Yeah, it's a tail of two cities, tail two chambers.
The House is where the issue of spending cuts is
really sailing. You've got a group of conservatives who just
really want to see at least two trillion or in
some cases one point five trillion in exchange for four
trillion in tax cuts. The Senate has given itself permission
in its budget to essentially barely cut spending at all,
(18:29):
just four billion, and basically use a budget gimmick to
say that this is extending the existing tax cuts costs
zero dollars because's current policy. At the end of the day,
a lot of people up here think that the Senate
will get its way. There's not the appetite in the
Senate for this type of spending cuts, and the deficit hawks,
the excent they are deficit hawks, will just swallow it.
(18:50):
In the House, I'm not sure that's the case. It's
going to be a protracted fight. But the real problem
right now in the House is they can't they can't
get the House moderates to sign onto these deep medicaid cuts,
and they're going to have to lower their tax appetite.
I'm looking at perhaps maybe three or four years only
of this no tax on tips and no tax on overtime.
They just can't afford ten year package, and maybe everything
(19:12):
else gets scaled back to just four years and say
you'd have to re elect Republicans in twenty twenty eight
to get it extended.
Speaker 2 (19:20):
Well, and it is the question of whether or not
the Republicans can get re elected that's at play here, Wendy,
to the point Eric was making. Democrats argument has made
they're only trying to cut taxes for the rich. They're
going to cut Medicaid. They don't care about lower and
middle income people. But if, for whatever reason, even if
Eric is a little bit skeptical about this, we end
up with a higher tax bracket for those who are
(19:42):
millionaires and we don't end up with as steep medicaid cuts.
That really makes complicated the messaging of the other side.
Speaker 12 (19:50):
It does, it does, and Democrats will have their own
problems finding the messaging. But there's a lot of chess
moving at play here. The sir Donald Trump has been
championing hurt his base. It will raise consumer prices for
goods made in China, Mexico, things like that, it will
raise the cost of American cars, And so he knows
(20:12):
he does have good political instincts, and he knows that
that has hurt his base voters. So he answers that with, well,
but look how populous I am. I'm going to raise
taxes on millionaires, which he says he would graciously accept
to pay. And we saw evidence in the first term
that he doesn't pay the taxes he owes anyway, so
you know, who knows if he'll actually pay it. But
then he realizes that this may not raise enough money
(20:37):
that it puts Republicans in a buind who are in
districts with high income earners, and therefore now he's got
to sort of back off of it and say I
don't really want to do it, but if you want to,
I'm okay. And that gives him the cover to not
be responsible. It will be look at those crazy House Republicans.
They raise taxes on the rich just so I could
(20:58):
cut taxes elsewhere.
Speaker 13 (21:00):
Well.
Speaker 2 (21:00):
But I feel like we've had this conversation a few times,
whether it's the election of a speaker or other matters
in the House that ultimately the president, or one bill
or two. We've obviously now settled on one big, beautiful bill,
but for a while President Trump was leaving things open
on that front too. Have we not learned he has
to make a decision and enforce it among the ranks
of Republicans on Capitol Hill for anything to actually get done.
Speaker 12 (21:21):
Yes, I mean this the way, as Eric says, the
way he has remade the party. He has made it
so that he makes every single decision that is coming
forward and doesn't leave it to the House Speaker or
the Senate majority leader to be able to whip their
voters into a bill that they know will pass and
will protect them politically. They are only interested in what
(21:44):
Donald Trump thinks, and that leaves them in a real bind.
Speaker 2 (21:47):
Well, you're especially in a bind, Eric, if you're in
one of these blue state districts, or maybe a member
of the so called Salt Caucus. As we know, the
salt cap is very much still up for debate. The
Speaker has floated raising it to thirty thousand dollars from
the current ten and at least one Salt District member,
Nicole Mallya Takis of New York, is suggesting that's a
(22:08):
number that she's okay with. My question is is that
going to be enough to satisfy everybody else?
Speaker 11 (22:14):
It's really not. Maley took us was kind of the
weakest link in the Salt Caucus block. You know, we
saw the five other members, including from New York State,
including Mike Lawler, Andrew Garbarino and Nick Loloda being much firmer,
and then they were joined by at least Stephanic. Very
interesting move by her. She had not been a player
on the Salt isssue. There's talk of her running for
(22:36):
governor of New York, and she suddenly got in on
these meetings where she had been absent before, and then
she was part of a statement rejecting the thirty thousand. Yesterday,
Young Kim and a very vulnerable publicadd in California also
rejected the offer. We haven't heard from Tom Caine, who's
a bit of a silent figure up here on Capitol
Hill of New Jersey, but he's a very salt heavy
(22:58):
district in the western part of the state. I suspect
he's against it, but keeping his cards closer to his chest.
So you know, this is going to continue to be
to negotiated. One thing, we might see this was a
flat thirty thousand. We might see them double it for couples.
You know, there's been a lot of I talk about
the marriage penalty under salt, but you know Young Kim
had come out and said she wants sixty two thousand
(23:20):
for an individual. I think she's much more wealthy district.
So we'll see. You know, they can afford to make
me lose one. But they already know there's certain people
like Thomas Massey who were going to vote no on
any tax bill, and they can only afford to lose
two or three. So it's going to come down to
the wire and the House floor.
Speaker 2 (23:39):
Well, and when we consider these members, in particular Wendy,
I wonder how much leverage they have, knowing that if
they decide not to vote for a tax package at
all and the twenty seventeen cuts are allowed to expire,
there is no cap on salt that could arguably work
better for them at home.
Speaker 12 (23:54):
It absolutely could. It would also increase the ire of
Donald Trump. So going back to my earlier point, which
is they're going to have to pass something and they
will have to figure it out. But what every decision
will make is how much political pain can they endure
to deliver to Trump, you know, what he wants. And
if they do cut medicaid or narrow it down, that
(24:16):
is going to cause tremendous pain in the red states
that Trump wants. The salt also hits all those members
that Eric listed, you know, New York and California Republicans
may be thrown out in the midterms, leading to Democratic
members which could flip the majority.
Speaker 10 (24:32):
And install his agenda.
Speaker 12 (24:34):
So there's like, there's so many layers to every decision
that they're going to make here.
Speaker 2 (24:39):
Well, and decisions do still have to be made. Eric,
just in our final minute here, what's the likelihood that
these markups currently scheduled for Tuesday get punted again.
Speaker 11 (24:48):
I don't think they'll be punted, but I think, you know,
we may see a product come out that's less than
satisfactory to every committee member and some last minute changes.
You know, I'm anticipating, for example, ways it means is
going to meet at two pm on Tuesday. They may
go all night onto the world. It's completely exhausted, and
then spring some compromise deal that we can barely understand,
(25:10):
super complex, full of all kinds of loopholes on us,
and we'll have to digest it. So it's gonna I
think it's gonna be very messy. I also think the
House could vote on it in May and we can
see it fail and then come back. There's going to
be a lot of fits and starts in this because
it's going to be very very hard to get the
near unanimity that they need to pass us package.
Speaker 2 (25:31):
Can you sense the excitement in Eric Wasasson's voice here
to have to cover all of this. Eric Waston, Bloomberg
Congressional reporter, thank you so much, alongside Bloomberg Senior editor
Wendy Benjaminson here in Washington, very much appreciated. As we
look forward to the events of next week here in DC,
it's going to be a big one for trying to
advance this massive legislative agenda and get it through Congress.
(25:55):
This Memorial Day is quickly approaching, and we still have
much more ahead here on Balance of Power. Next, Bloomberg
Politics contributors Rick Davis and Jeanie Shanzeno will join me.
We'll turn to our political panel about the new nomination
we got from President Trump last night for the district
attorney in Washington. We'll have more ahead on Bloomberg.
Speaker 1 (26:16):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
Cockley and Android Auto with the Bloomberg Business app. Listen
on demand wherever you get your podcasts, or watch us
live on YouTube.
Speaker 2 (26:32):
I'm Keeley Lines in Washington, and indeed you're listening to
us on Bloomberg Radio or watching our Bloomberg feed on YouTube.
Happy Friday to you all, and here at Bloomberg. Of course,
we don't consider ourselves to be in the business of
necessarily discussing other media outlets, so please know what I'm
about to say is not a comment around Fox News.
It's simply purely an objective observation about how strong the
(26:53):
Fox News to Trump administration pipeline continues to prove to be.
Number two of President Trump's cabinets secretaries, the Transportation Secretary
Sean Duffy and the Defense Secretary Pete Hegseth, Our former
hosts on Fox News. There are dozens of others who
are either in the President's orbit or in other roles
in the administration who are formally affiliated with Fox and
Fox Business as well, And as of last night, we
(27:16):
have another name to add to the list here. Judge
Janine Piro, who of course was a host up until
yesterday I guess of the five on Fox has officially
been tapped to be the interim US Attorney for the
District of Columbia after the President pulled the nomination of
Ed Martin for the post once it became clear his
climb to Senate confirmation was going to be much more
(27:38):
uphill and steeper than previously thought. Martin's now going to
get a role at the Department of Justice instead. Those
official roles will be the next Director of Weaponization Working
Group Associate Deputy Attorney General and pardon Attorney. So we
want to get reaction to these developments and others, and
turn to our political panel on this Friday. Bloomer Cut
(28:00):
contributors Rick Davis and Jeanie Shanzano are with me. Rick,
of course, republican strategist and Stone Court Capital partner. Genie
democratic analyst and senior democracy fellow at the Center for
the Study of the Presidency and Congress. Welcome to you both.
Rick would love you to weigh in here, not just
on the idea that Ed Martin's nomination had to be
polled and what that might signal, but that his interim
(28:22):
replacement is once again someone who's face we recognized from
television and one network in particular.
Speaker 10 (28:28):
Yeah.
Speaker 5 (28:28):
No, this is right out of the playbook by Donald Trump.
He really likes his team at Fox and as you
point out, has been mining them for his administration. It's
worth noting that a contributor like Genie and I Tulsea
Gabber from Fox is also one of the more notorious
members of the Trump administration. So shout out to contributors
(28:52):
all over the place. But look judged Innen. Yeah, she
is a big sort of celebrity within Fox. But she
had a career as a county judge and as a
prosecutor in Westchester County, New York, which was extremely successful.
(29:13):
I mean, she has got the credits, the capability and
the experience you need to serve in this post. So
it's not just a Fox News analyst or or partsipilatory
a journalist. It's somebody who actually was a prosecutor and
a judge and has a lot of experience here.
Speaker 2 (29:33):
So Genie is she qualified.
Speaker 13 (29:37):
I have to tell you, Kaylee, Jeanine Piro was my
Westchester County DA for many, many years. Small it's a
small world. Shout out to contributors and das everywhere, you know.
It's just fascinating because one of the reasons that Tom Tillis,
who's really the lynchpin of this entire move from Martin
(29:58):
to Judge Janine is we call her, was because of
his role primarily in the January sixth incident and also
obviously supporting the pardons of the January six rioters. And
yet if you listen carefully to Judge Janine, and it
really doesn't take to be very careful, but if you
(30:18):
just listen to Fox News. She has said a number
of things that really leave you scratching your head if
you're listening to Tom Tillis, because there's not a lot
of difference between what Martin was saying and what Judge
Janine has said about January six In fact, she's named
in these two big defamation lawsuits, the dominion voting one
(30:42):
which obviously Fox News ended up settling. Some of that
was about things that she had said on the air,
So that, to me is one of the fascinating areas here.
And yet despite that, Tom Tillis goes on Twitter and says,
you know, this is a great appointment on Judge Janine.
So you know, it's interesting to see how this is
(31:04):
playing out. She seems to be more politically palatable, despite
the fact she's no more independent from Donald Trump in
the White House and her views are very similar to
Martin's on the issue of January sixth.
Speaker 2 (31:17):
Well, I'm glad she's raising Tom Tillis here, Rick, because
one of the most memorable lines from you I think
we've gotten here on Bloomberg this year was when you
said everybody sometimes wants to be a John McCain and
they end up a Tom Tillis when he notably did
not defy the Republican Party with a few of Trump's
other nominees earlier this year for higher profile cabinet posts.
What is it about Ed Martin that finally got a
(31:38):
Republican senator to step out of line with the party.
Speaker 5 (31:41):
Well, I'm pretty sure he was listening to me and
not thinking about Ed Martin. Right, Look, Sier Tillis makes
the case, And I think it is a differentiator to
judge Jannine that Ed was someone who actually participated in
the h the protests, the march to the Capitol. Reports
(32:03):
have it that he didn't enter the capital, but he
was an activist in the effort, and and and and
then you know, really didn't just comment about it on TV.
You know, he actively represented members and lobbied hard for
their for their for their commutation. So I think I
(32:25):
think you'd have to consider him in a different, different
subset than someone who just comments about it on TV.
But look, I think all these folks in the Senate,
especially as relates to controversial nominations, are feeling their way.
They're trying to think through, you know, how far they
can go. There was a rally around the cabinet initially,
(32:46):
get them in place, do it early, do it historically early.
But I think now you've got some folks who are,
you know, thinking, gee, uh, maybe we maybe we shouldn't
just be a rubber stamp and and and start feeling
our way through some of these nominal who may not
be qualified to serve.
Speaker 8 (33:05):
Well.
Speaker 2 (33:05):
And when we consider other nominees, I would note, Genie
that it wasn't just Ed Martin's that was pulled. This week,
Trump also abandoned his original pick for surgeon General in
favor of Casey Means. And I wonder if you see
that as a signal at this point, when he was
able to get all of his at least highest profile
cabinet level positions filled with record speed, as Rick was
alluding to, and with relative ease, with the exception of
(33:28):
Matt Gates, does it even matter if he has to
pull them at this point?
Speaker 13 (33:33):
You know, I think he feels that. In the case
of Means, he said, you know, look at this was
somebody who came highly recommended by Kennedy, who he trusts enormously.
He said, he doesn't know her well, but based on
what he has heard and the recommendation, he was fine
going with her. But I think it shows in both
cases that the president feels he has other priorities that
(33:56):
are taking precedent over a big fight in the Senate.
That's what it would be about. A confirmation that's on
the edge, you know. And and this Martins one was
going to be on the edge when you look at
some of what had come out about him posting and
praising on his podcast. Somebody who spoke, you know, about
(34:16):
Hitler dressed up as Hitler said horrible things, horribly anti
Semitic things. This was the kind of thing that was
going to come out in the Senate confirmation hearing. And
so does the president really want to waste you know,
political capital on that. Probably not, so you would fight
for those upper level positions. But now he's trying to
(34:37):
he's starting to say he's got other priorities, of course,
number one being getting that reconciliation bill. So I think
that's what we're starting to see here with some of
these other appointments. That's not to say they're not important,
but the president isn't willing to waste a lot of
political capital on them.
Speaker 2 (34:56):
And while we're discussing current nominees and nominations. I also
want to talk about a nomination that was made decades
ago that we're reflecting on today, and that was the
nomination made by then President George H. W. Bush for
David Souter to get a seat on the Supreme Court.
He was thought at the time to be a conservative pick,
and his tenure on the Court maybe proved otherwise. Rick.
(35:17):
He died this week at eighty five peacefully, we understanded
his home in New Hampshire, and I wonder your thoughts
as to how we should be reflecting on that legacy.
Speaker 5 (35:27):
Yeah, this might have been the greatest surprise in the
last fifty years as far as an appointment under the
Supreme Court. I remember very clearly, as a young Reagan
Conservative thinking, Wow, this is an incredible opportunity to put
a conservative on the Court. And of course, my great friend,
(35:47):
late Signer Warren Rudman picked this one out of his
back pocket from New Hampshire and stunned the world. And
when George HW. Bush, President Reagan's vice president, appointed him,
I think people were floored, and it was not a
shock or a surprise that he wound up being as
(36:09):
moderate a Supreme Court justice as he turned out to be,
but really an amazing period of time. Then we see
a lot of the debates around things like Roe v.
Wade happening. Then that happened in the first Trump administration,
So it is a little bit of deja vu all
over again. But may he rest in peace. A great
(36:29):
servant of the people of our nation, and somebody who
I think, you know, considered the law, you know, the
highest calling in the land, and certainly served honorably.
Speaker 2 (36:43):
Well in genie. As we consider his tenure on the
court and his service for nineteen years on the High Court,
are we ever going to see someone like that again,
given how partisan and politically tinged to the court seems
to have become.
Speaker 13 (37:00):
You know, I don't think so. I think one of
the things we see in Suitor is a good example
of this is future administrations learn from past administrations, and
in this case, the H. W. Bush administration described Suitor
as the biggest mistake of his presidency. I don't know
if you know that is something that everybody would agree with,
(37:22):
but certainly, you know, he was in a camp like
Earl Warren, you know, Earl Warren appointed and then becomes this,
you know, really really the most liberal lion of the
Supreme Court. Ever in Chief Justice Suitor not quite as impactful,
but certainly in the latter part of the twentieth century
(37:42):
had a big voice on the Court. And so I
don't know that we'll see this. He's also something of
a throwback in so many ways, Kaylee. Here was somebody
who wrote decisions Longhand on pen and paper, famously decried technology.
Here was somebody, they said, every day took a luncheon
plastic bag of a yogurt and an apple to the
(38:03):
office and ate by himself. And here's somebody who retired after,
as you mentioned, just nineteen years at the young age
of sixty nine, to go back home to New Hampshire
and continue to serve the public there. And so, in
so many ways, also a traditional sort of New Englandish
Republican that you don't see a lot of anymore. So,
(38:25):
in so many ways, a throwback to an earlier era.
And it's sad for me personally, because I don't know
that we're going to see that again, at least in
the near future.
Speaker 2 (38:35):
Have we seen, though, rick glimpses of it. In Justice
Amy Coney Barrett, who earlier this year was getting a
lot of flak from the right for multiple times siding
against the Trump administration when she wasn't expected to.
Speaker 10 (38:48):
Yeah, I think.
Speaker 5 (38:49):
Certainly my experiences, you never really know what you get
with a Supreme Court appointment until they've started ruling. And
I would say not just Amy Coney Barrett, but Brett Kavanaugh.
I think has been a surprise to some conservatives who
thought he would be, you know, a very conservative judge,
and even Neil Gorsitch has surprised some with his ruling.
(39:11):
So I think that this court currently is particularly interesting
because they are not following just a very clear conservative
line every time there's an issue in front of the docket.
Speaker 2 (39:27):
All right, Rick Davis and Jeanie Shanzino.
Speaker 1 (39:31):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm. He's durn
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You can also listen live on Amazon Alexa from our
flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 2 (39:50):
It's another one of those weeks where there's so much
news that sometimes you don't have enough time to talk
about it all. Like yesterday, for example, we got the
first post Liberation Day trade or framework between the US
and the United Kingdom, and we got history made in
Rome with the election of a new American pope. And
with those things going on, you'd be forgiven if you
miss the Bloomberg scoop that the Treasury Department was actually
(40:12):
developing a fast track process for screening foreign investments in
the US through Sciphius, an effort that this administration, the
Trump administration, expects could smooth the way for billions of
dollars from foreign sovereign wealth funds to come into the
United States sovereign wealth friends from countries like the UAE
or Saudi Arabia or cutter no coincidence that those happened
(40:35):
to be three countries where President Trump will be visiting
next week as he makes a trip to the Middle East.
And obviously, in addition to foreign investment, there's a lot
of other things he is likely to discuss there, and
that's what we want to get into now here on
Bloomberg TV and Radio. I'm pleased to say. Joining me
is so Gar Shimali. She is now the CEO of
Greenwich Media Strategies and founder, but also former director of
(40:56):
Syria and Lebanon at the National Security Council and here
with me in our Washington, d C studio, Hagar, good
to see you as always, Thanks for having me. Obviously,
this is going to be a very big week for
the President. There is a lot he'd like to discuss
with the UAE and the Saudi's and Cutter specifically, how
should we consider the kind of financial aspect of this relationship.
(41:17):
Is he's courting investment from these countries into the US,
and how that influence is actually the shape of those
alliances and the positioning of geopolitics in the Middle East.
Speaker 10 (41:27):
Yeah, that's such a good question.
Speaker 14 (41:28):
No one is framing it that way, by the way,
and because one of the most important pieces of this
is actually an economic route that started under the Biden
administration and is now being continued in the Trump administration.
One of the real policies actually that's being continued called IMEC,
so something where you're going India, Middle East, Europe, fashioning
this corridor, if you will, to not only encourage economic
(41:51):
trade with all of these continents and locations and regions,
but also a lot of that is about providing becoming
a counterweight to China. So that's going to be a
lot of the focus of this trip. There are going
to be many things actually that they're going to discuss
that are not economic as well, but a lot of
that too is making sure you're pulling Saudi Arabia from China,
pulling the region away from China, ensuring that as Saudi
(42:15):
Arabia is trying to diversify its economy, they're interested in
all sorts of investments back and forth, and so they're
going to be looking for that. Certainly an increase in
any kind of trade related to defense equipment as well.
That's something that Saudi Arabia struggles with democrats and has
better luck with the Republicans, so they're going to be
talking about things like that as well well.
Speaker 2 (42:35):
And for the UAE especially, we know there's kind of
chip considerations as well. Bloomberg has had some reporting on
whether or not the administration is likely to lift chip
restrictions on the UAE in particular. As to your point,
the whole point of that is to try to make
sure those chips ultimately don't find their way to China.
So maybe a lot of this does come back to China,
but a lot of this is about this region as
well in the current environment in the Middle East, when
(42:57):
we consider the engagement we've seen from this administration and
so far with Israel as it relates to the ongoing
conflict in Gaza, with Saudi Arabia, as they look to
expand the Abraham Accords, what really is for Middle East
purposes objective number one for the president? Do you think?
Speaker 10 (43:14):
Absolutely so.
Speaker 14 (43:14):
There's a lot of wins for the president to achieve
in Saudi Arabia, and one of the ones at the
top of the list is the discussions that would lead
to peace deals, a number of peace deals they want
to They want to increase the Abraham Accords, increase the
countries under the Abraham Accords as much as possible. The President,
and I'm not trying to say this lightly, he is
(43:35):
focused on a Nobel Peace Prize at through the Abraham Accords,
and he's been very clear about that, right. He was
clear about that the first time around and now the
second time around, and a lot of that, A big
chunk of that is really through Saudi Arabia, not all
of the countries, but Saudi Arabia would be a big
one because you'd get a lot of others in its trail,
and those talks are talks that have already existed, right,
so they've been going on for a while, really since
(43:57):
the end of Trump's term Trump one points, and so
that's really they're going to be continuing those talks now.
There are certain things elements of those talks initially that
appears that they're also being pulled out, things like discussing
civil nuclear partnerships, things of that kind that were originally
going to be part of a normalization deal or peace deal,
(44:18):
and it looks as though that might be pulled out.
But nonetheless, I think it'll all be in the context
of getting to a final destination, and that destination being
having Saudi Arabia and other Middle Eastern countries under the
Abrahamic Coords.
Speaker 2 (44:30):
What timeline do you think is realistic for that? It's visit,
I would imagine is not going to be alone.
Speaker 14 (44:35):
In accomplishing that. No, Well, and the Saudis, unlike other countries.
They've made it clear and I don't think that they're
going to backtrack on their insistence that there be the
promise of a Palestinian state. It doesn't mean that one
needs to be necessarily created to recognized, but that there
be some kind of process on to get there, and
that's going to hamper things a little bit. I mean,
(44:58):
if I were a betting woman, it's it's hard to say.
Maybe twenty twenty seven. I just sometimes I think it'll
be in a year or so, and then other times
there are days where I'm like, we're this is really happening,
and then there are days where I think maybe maybe
another two years.
Speaker 8 (45:11):
Yeah.
Speaker 2 (45:11):
Well, every day is different around here, that's for sure.
But to your point on there being some kind of
day after long term solution for the Palestinians in Gaza,
where even are we on those conversations on the idea
of renewing any kind of ceasefire agreement or bringing some
kind of end to this conflict, because the administration was
very focused on that, very proud of the deal reached
(45:32):
on the eve of Trump's negotiation, and then what happened.
Speaker 14 (45:35):
Yeah, And you know, it's funny. The last time I
was on, which was maybe ten days ago, we discussed
this and there were a number of deals that were
going back and forth, and there was a deal proposed
by the Israelis that was rejected. Then the Egyptians and
Cutteries had come in and we are now really unfortunately
in a spot where we've gone completely backwards. The war
is being actively expanded by Israel in Gaza. It's a
(45:58):
decision by the cabinet, but also more importantly, it was
a decision that very clearly laid out that the hostages
were not being prioritized. There are we don't know, but
we believe between now, we're hearing between twenty one and
twenty four who are alive.
Speaker 10 (46:14):
I don't want to make I don't want to make.
Speaker 14 (46:15):
Any kind of assertion on this, but anyway, every day
that passes as a risk for them, and we know that.
And the Cabinet really came out crystal clear and said
we are prioritizing the expansion of this because we don't.
Speaker 10 (46:29):
They have Hamas by the neck and they want to
crush them completely.
Speaker 14 (46:31):
And I, as account as somebody who worked in counter terrorism,
I want nothing more than to see Hamas obliterated. My
own opinion is I do I'm not sure I understand
why they can't cut a deal, get the hostages released
and then do targeted operations as they have in Lebanon,
for example. But because I'm completely behind the idea of
crushing Hamas completely. But anyway, that's Bibie's very clearly, very
(46:52):
intent on that singular goal.
Speaker 2 (46:54):
So what role does the US play in influencing Israel
in any of this? Knowing that Israel also maybe have
taken a bat by some of the Trump Administration's recent actions,
including declaring a truce with the Houthies seemingly out of nowhere.
Speaker 10 (47:06):
Yeah, I was just going to say that.
Speaker 14 (47:07):
So, actually, the Israelis, and this I think is a
bit indicative, indicative of how things might go between the
United States and israel Is. The BB has been blindsided
by the Trump administration a number of times now.
Speaker 10 (47:19):
So first you.
Speaker 14 (47:20):
Had, for example, the talks that were taking place directly
with Hamas on the release of American hostages.
Speaker 10 (47:27):
You had, then you have the Iran talks, and now.
Speaker 14 (47:30):
You have this deal that the US administration cut with
the Hoothy's where the Houthis have promised not to target
American vessels in the Red Sea. But that's it, just
the American vessels and that deal not only blindsided BB,
according to press reports, but it indicates it's a it's
very demonstrative of an America first policy, Right, we care
about our vessels we care about our national security objectives
(47:54):
only and what is directly American, and we're going to
pursue that unapologetically. And that makes it difficult. While Bebe
seems to listen to Trump and has a lot of
respect for him, or you know, Trump has a lot
of clout with BB, those kind of efforts are going
to make it more difficult for the US to push
BB where they want.
Speaker 2 (48:12):
You raised Iran in that last answer, and I do
want to talk about that as well. As we learned today.
Another round of talks between the US and Iran will
take place this weekend on Sunday, specifically in Oman. And
I wonder how you see progress here because we are
still talking. This is the next round of talks and
what has been a line of them in succession. But
(48:32):
how far still does that put us from actually reaching
some kind of agreement with Iran?
Speaker 14 (48:36):
Yeah, so this one in particular. The thing that I
is I think so important to talk about these talks
is that a lot what I see a lot in
the public discourse out there is that it's just a
repeat of what the jcpoa under prison is thinking.
Speaker 2 (48:51):
Wrong.
Speaker 10 (48:51):
He's completely wrong, Okay, he's completely wrong.
Speaker 14 (48:53):
And I worked on that deal as a spokesburs and
I was Praisury spokesurson at the time. I worked on
that deal when it was happy under person. This is
completely different. This is based on an assessment that Iran
is very close to a nuclear weapon, that that would
fundamentally change things in the Middle East and would trigger
an arms race and completely change our national security problems there.
Speaker 10 (49:14):
Then that means that the it inevitably.
Speaker 14 (49:17):
Could lead to a military solution, and that these talks
are a last ditch effort. So the talks are last
ditch effort, and unlike the ones with under Obama, they
don't go into the nitty gritty of how many centrifugeons
can they have, which centrifuges wear in Iran, how much
can those centrifugees operate, how much uranium. No, it's very
singularly focused onnot you Iran can never have a nuclear weapon.
There is no timeline there is it's never. If you
(49:39):
don't agree, the US and or Israel or Israel whichever
will bomb those nuclear facilities, and that is a threat
Iran takes very seriously because in October Israel bombed the
defense systems around those nuclear facilities and Tehran and the
Iranian regime is very weak at the moment, so they
can't risk.
Speaker 2 (49:55):
That, so would they agree.
Speaker 14 (49:58):
They are in a position where these talks could go
well to agree because they're desperate for a win, given
that they're on the defense and that they want they
need to survive, and that they need sanctions lifted. But
I don't know that everybody across the Middle least is
happy about that. By the way, I don't think the
Saudis are very excited about that. I know that those
(50:18):
who are against working against Hesbala and Lebanon are not
excited about that. They want nothing more be included to
see the Irananguram crushed.
Speaker 2 (50:26):
Well, so President Trump could get an earful about this.
He's not just coming to these countries with his own objectives.
They probably have things they want to say to him
in return.
Speaker 14 (50:34):
Absolutely, and I think that I believe the Trump administration
from everything I've seen in those I've spoken to, there
is a very large focus on this question of triggering
a nuclear arms race in the Middle East. That is
what incentivized these talks, and you even saw it with
the Vice President Jadie Vance.
Speaker 10 (50:49):
He said earlier this week.
Speaker 14 (50:50):
Yes, he's hoping that these talks could open the door
for talks with China and Russia to talk about decreasing
their nuclear weapons altogether. That everybody could. That's very by
the way reagan Esque way of looking at things. It's
a positive goal regardless of what people like me think
would be Ronny regime. And so that's how they're going
to catch it, and they're going to go to Saudi
(51:11):
Arabia and say, listen, this is important, this is a priority.
You need to support us, even if it's quietly behind
the scenes, and let us do this. But I have
no doubt that it will come with some kind of
exchange of some kinds as it did under person Obama,
whether it's defense equipment deals or whatever.
Speaker 2 (51:25):
Well, we'll have to look and see how all of
this pans out next week. Good to see you as always, Haigar.
Thank you for being here. H Gar Shimali, former director
for Syria and Lebanon at the National Security Council, now
founder and CEO at Greenwich Media Strategies here with us
on Balance of Power.
Speaker 11 (51:41):
Thanks for listening to the Balance of Power podcast. Make
sure to subscribe if you haven't already At Apple, Spotify,
or wherever you get your podcasts, and you can find
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