August 5, 2025 • 40 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
President Donald Trump said that US tariffs on semiconductor and pharmaceutical imports would be announced “within the next week or so,” as the administration prepares to target key economic sectors in its effort to remake global trade.
“We’ll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it’s going to go to 150% and then it’s going to go to 250% because we want pharmaceuticals made in our country,” Trump said Tuesday in an interview on CNBC.
“We’re going to be announcing on semiconductors and chips, which is a separate category,” the president continued.
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, Joe and Kailey speak with:
- Bloomberg Washington Deputy Bureau Chief Laura Davison.
- Former Deputy US Trade Representative Sarah Bianchi.
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino.
- Retired Two-Star Marine Corps Major General Arnold Punaro, former Staff Director of the Senate Armed Services Committee.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Balance of Power podcast. Catch US Live weekdays at
noon and five pm Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch US live on YouTube.
Speaker 2 (00:25):
Only Tuesday and already we have a lot of tariff
news we're grappling with, and more tariff news we're expecting
over the course of the next week or so. As
it is at the end of this week, not even
August seventh, when the US is set to start collecting
higher levies on a number of trading partners after they
were told what TERI free on their exports would be
charged last Friday on August first. Then, of course there's
(00:46):
the August twelfth deadline that the current detent between the
US and China is set to expire at and in
the next week or so, timing to be determined here,
I suppose Joe, we're expecting we'll finally get the long
awaited hour of sectoral tariffs on tikey industry, semiconductors and
pharmaceutical She.
Speaker 3 (01:04):
Did that all off the top of her head.
Speaker 4 (01:06):
I was watching Yeah, it's a lot of dates to
be swimming through here, and it looks like the chips
could be coming at least the chip tariff semiconductors in
the next two or three weeks, next week or two,
based on the language we heard from President Trump this
morning in an interview on another network. It's where we
start our conversation with Laura Davison, who is with US
now our deputy bureau chief here in Washington. Laura's job
(01:27):
is of course to like, you know, cut through all
the noise and when you have a half an hour
long weave like that. Frankly, not a lot of news
in that conversation, but this one got our attention, and
it's something that investors have been waiting for. Was there
anything new when it came to chip tariffs?
Speaker 3 (01:40):
Do we have a number? Do we have a more
exact timeline?
Speaker 5 (01:43):
We don't other than it is a week or so.
In Trump world, that can mean a week or it
could mean months. But he's made several comments now in
recent weeks that you know, kind of by the end
of the month that this is sort of something that
the usgr US TRADERFF is getting close to. This is
one of one of those We're going to a little
nerd to here. The two thirty two tariffs. These are
the ones that are about a national emergency. These are
(02:04):
the ones that have staying power. This is the same
authority he used in his first term, So these are
not likely to get caught up in the courts. The
reciprocal tariffs, those tariffs that are on countries, those are
the ones that could get a little bit tricky. And
you're starting to see the White House think about, Okay,
if the courts come down and strike down some of these,
how do we implement our tariff strategy in a way
that the courts will uphold. That's going to be after
we get through this spate of dates of different deadlines
(02:26):
coming up. That's kind of the long term strategy of
what's going on at the White House.
Speaker 2 (02:29):
Yeah, it's a good point that there's a massive legal
question around the use of the AIFA authority to implement
these kind of tariffs broadly on countries like for example,
Laura Switzerland, which of course last week learned it was
going to be paying a thirty nine percent tarif, or
rather that tariff would be charged on its exports to
the United States, surprising Switzerland to the extent that now
(02:51):
the Swiss president is rushing to DC to try to
get something of a better deal. Is this likely to
go anywhere?
Speaker 6 (02:59):
Is it?
Speaker 2 (02:59):
Thirty nine percent starting to be collected on the seventh,
just two days from now.
Speaker 5 (03:02):
This is entirely up to Trump. The reason they are
at a thirty nine percent tariff is because of a
call that went badly with the Swiss president last week
ahead of that August first deadline, where they really were
talking about trade deficits, things that the president that US
President Trump did not want to hear at all. They're
trying to rectify that now. I anticipate the tone of
this conversation is going to be a lot different. But
will there be enough groveling for Trump to say, Okay,
(03:24):
we'll bring you down to more in line with other
EU nations.
Speaker 4 (03:27):
Well, apparently they're showing up without an invitation? Is that correct?
From the White House? You just get on a plane
and hope for the best. Knock on the door. Will
the President let them in?
Speaker 5 (03:35):
We will see this. This is really sort of a
high stakes negotiation. Trump, however, loves this. He loves when people,
you know, kind of come to him sort of you know,
our supplicants are asking for his forgiveness. You know, he
has a public event this afternoon. He's signing an executive order,
so we will may get a sense of where his
state of mind is on these negotiations in just a
couple hours.
Speaker 2 (03:55):
And you know, the one thing I forgot to mention
that also falls within this week or so timeline is
come Friday, that's the deadline he gave Russia to agree
to a seasfire in Ukraine or else implement secondary tariffs
or secondary sanctions. I'm not sure we have full clarity, Laura,
as to what exactly he is willing to implement on
Friday if there is no agreement. Even as we learn
Russia is at least considering an air truce with Ukraine,
(04:18):
even if not a full seasfire.
Speaker 5 (04:19):
And even before then, he said he would put more
tariffs on India within the next twenty four hours because
of their purchases of Russian oil. So you have all
of these, as Joe said, a weave of tariffs that's
coming together that makes it very difficult for markets to
figure out what's coming. These timelines are all subject to
Trump's whims and this is just a very very difficult moment,
and that's why we're seeing some of this economic data
(04:41):
come in lower than expected. Services were lower. We also saw,
of course, the very infamous now jobs report last week.
Speaker 4 (04:46):
How much of this is purposeful in its confusion to
keep I guess our trading partners or maybe other countries
on their heels to some extent as opposed to changing
the subject from Jeffrey Epstein. And I bring that up
because there is news today that the House Republicans have
subpoenaed the DOJ, along with former President Clinton, a former
(05:08):
Secretary of State Hillary Clinton, an unredacted complete Epstein files.
I don't know if you see that happening by the
deadline on August nineteenth, but this is obviously something that
the White House does not want us to be talking about.
Speaker 5 (05:20):
There's really two tracks here for the White House. One
it helps to distract from Epstein, and clearly Republicans on
the Hill they're not even in town, but they're still
working on this Epstein issue. I think what we saw
yesterday in terms of the Justice Department also announcing they
were going to investigate the Russiagate scenario going back and
investigate Obama era officials over the Russia's involvement in the
twenty sixteen election. This is kind of a multi prong
(05:42):
strategy from the Trump administration to distract and pivot the narrative. Also,
it's important to remember that they just also don't have
a lot of these deals negotiated. They haven't made up
their mind, they haven't finished the investigations, and that they've
been doing tariffs on dozens of different fronts. And Trump
likes to leave these things to the very last minute
and make up was mine only when he has to.
Speaker 2 (06:01):
All right, Laura Davison, our deputy beer chief here in Washington,
d C, thank you so much for joining us now
as we consider the President making up his mind or
not on tariffs of all different shapes and sizes. We
turned out of Sarah Bianki, who of course served as
a deputy US Trade Representative during the Biden administration. She's
now senior managing director and chief strategist of International Political
(06:21):
Affairs and Public Policy at Evercore ISSI. Sarah, welcome back
to Bloomberg TV and Radio. If we could just begin
with what was a very big number put out by
the President today, the suggestion that tariff's on pharmaceuticals when
and if they are announced, could ultimately go as high
as two hundred and fifty percent, just not immediately to
allow for some more on shoring of that industry here
(06:44):
in the United States. How long of a window do
you really need to leave to allow that kind of
supply chain reorientation to happen. Will two hundred and fifty
percent tariffs the threat of it actually make a difference
on say, things like drug prices that American people are
faced with at the pharmacy.
Speaker 7 (07:02):
Well, two fifty is certainly a very very big number.
And it's particularly interesting because in the EU Agreement, the
EU sends the United States a lot of the drugs
that we get. They were given a fifteen percent from
the President on pharma, So a lot of confusion about
(07:24):
exactly what the President is solving for Relocating a manufacturing
facility or building one of the United States is very
very time consuming and expensive. You need to get FDA approval,
among other things. I think it'll be interesting to see
what part of the drug chain supply chain is the
(07:46):
President looking for. There's all the way down from the
very basic inputs like API to generic drugs. Many of
those come from India to more some of the more
advanced drugs from the EU. So I think we have
a lot to learn from the President about exactly what
he is seeking to achieve here.
Speaker 4 (08:04):
Interesting we're talking about, to your point two very specialized industries,
and you've already expressed that when it comes to pharma,
when you talk about chips as well, it takes a
very long time to build a chip foundry, and there
seems to be an expectation in the White House that
these things can happen, including auto manufacturing back in the
US very quickly. You throw a switch and we're making
(08:27):
iPhones here in the United States. What would be more
difficult to re sure chips or pharmaceuticals.
Speaker 7 (08:35):
Well, they're both very, very very challenging. Chips may be
even more complex, but they're both very very difficult and
not totally clear that there will be a cost advantage
of doing that. I think with the chips investigation, really
what I'm looking for is how much is the President
(08:58):
looking to just tear or if the chips themselves that
come in that's more in the fifty a billion dollar range,
or how wide is he willing to go with products
that have chips in them? In that case, you can
get to about three hundred billion of imports. So what
I'm really looking for on the chips is to see
(09:18):
how much of the derivative products is he looking for.
If not, again, you might find that what the teriffs
encourage is countries to send chips to other places first
and have them embedded in a product and then come
to the US. So how these tariffs are designed makes
(09:38):
a big difference in how the industry responds.
Speaker 6 (09:42):
Well.
Speaker 2 (09:43):
As you talk about chips being embedded in other products,
it reminds me of the idea of where things are originating,
in what form, or from where they ultimately come to
the United States. Knowing Sarah, part of what is said
to be collected beginning August seventh, there is also a
forty percent tariff on trans shipped goods. That we've lacked
a great deal of clarity as to how exactly those
(10:04):
rules would be designed, how they would be tracked and implemented.
What is your expectation. How difficult is it actually to
get accurate transhipment information and charge levy accordingly.
Speaker 7 (10:15):
Well, you have to It's very difficult. What you have
to first do is decide, again, what are you trying
to solve for There are some areas where I think
there's just abuses now where things come safe from China
and they really aren't transformed much in another country and
then they make it on their way to the United States.
(10:36):
That kind of crackdown is really just working, is just
more of a customs enforcement thing than anything else. But alternatively,
the president could be looking for something like a what
about a Chinese factory that's fully built in Vietnam in Mexico.
This is something that the Biden administration looked at around
(10:57):
steel we started to see more steel, Chinese steel coming
in through Mexico. Or are you trying to solve for buid?
You really have to define here what problem am I
solving for? Am I literally talking about any Chinese ownership?
And then design your policy accordingly? And trendshipment is one
where the definitions could certainly run the gamut.
Speaker 4 (11:21):
Interesting data today as we find the US trade deficit
narrowed in June to the tightest since September of twenty
twenty three. It is happening a trade gap down sixteen
percent from the prior month to just over sixty billion dollars,
lower than expected to what extent, will this trend continue?
Speaker 7 (11:41):
Well, certainly, you know, if you teariff things at very
high rates, you do get less of them. And particularly
while we've had remember over this period, we've had a
lot of different policies in place, and we had some
a pre ordering that happened in advance of the month
that could be so I would say I'd want to
(12:02):
see the data for a few more months to see
if we can cut out some of the noise as
the policy has adjusted. But in general, yeah, we should
see the trade deficit down. That's obviously a metric that
this administration cares a lot about. You know, there's a
lot of other metrics that are relevant as well, but
(12:23):
on this one, sure, the trade deficit should marginally come down.
Speaker 2 (12:28):
Well, and we know that deficits in many ways factor
into the calculations the administration has made when setting tariff
rates on individual countries, Sarah, to what extent should we
expect a dramatic reduction in those actual structural deficits or
surplus is depending obviously on what country we're talking about.
But is this an achievable aim to try to bring
all of those down substantially?
Speaker 7 (12:52):
It really depends. I mean you know, one of the
reasons we a lot of people don't just look at
trade deficits across the board as a meaningful metric, even
though this administration takes them quite seriously, is it can
tell you a lot of different things about what's going on. So,
for example, in from Canada, we get a lot of
energy in the United States pretty cost effective. That's one
(13:14):
that's been exempted from some of the tariffs, So that
deficit should persist. I think that's probably good for both economies.
In other places where you were talking about, you know,
the Swiss, Sure they're going to send a lot more.
Speaker 6 (13:32):
Thing.
Speaker 7 (13:33):
So it really depends on the country. It depends what
composition of their exports to the US are sectoral. But
certainly places that can are looking to divert to other
markets to the degree that there's demand, because this is
an expensive way to go. So it may not be
(13:55):
that the United States isn't necessarily exporting anymore to that country,
but rather they're just sending of their goods elsewhere.
Speaker 4 (14:03):
Sure, sorry, Sarah, we were talking earlier about the deadline
at the end of the week that the President has
put on Russia for secondary sanctions, which sometimes he refers
to as tariffs. If that in fact happens, does that
jeopardize our potential to make a trade deal with China
or does it hasten an opportunity.
Speaker 7 (14:23):
Well, I think there's a lot riding on the trade
deal with China, and the administration does seem quite nervous
about the potential for China to take additional action or
or revert to some of the action we've seen on
rare Earth. So I think they're going to try to
not really disrupt that negotiation going into August twelfth, So
(14:46):
we'll see what he does on this oil front. It
shouldn't be a huge but I don't think he's looking
to escalate with China. Certainly, it's also an issue with India,
where he's been trying to land a deal that's gone
a bit sideways of late, so certainly impacts if he
(15:06):
goes there. But again, my expectation is that the administration
is looking to keep China from not escalating at this point,
and my base case is they'll do policies supportingly.
Speaker 4 (15:22):
It's great to have you back as always, Sarah evercore Isi,
Sarah Bianki, we appreciate the insights our panels Up next
here on Bloomberg.
Speaker 1 (15:33):
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.
You can also listen live on Amazon Alexa from our
flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 2 (15:52):
Town is a whole lot less crowded as it is August,
which means Congress is on recess. Both the Senate and
the House are either traveling on codels or home in
their districts talking to their constituents. And in the case
of several Republican lawmakers who have decided to hold town
halls with their constituents in recent days, it hasn't necessarily
(16:14):
gone incredibly well as they try to tout what they
see as the positives of the one big, beautiful bill
that they all just voted for, and those gathered at
the town halls seemed to see it in a very
different light. We saw the most recent evidence of this
yesterday when Republican Congressman Flood of Nebraska held a town hall.
(16:35):
He's actually the vice chair of the Republican Main Street Caucus.
He's been on this program several times Mike Flood faced
down some seven hundred individuals at a town hall, and
let's just get a taste of the reception he got.
Speaker 3 (16:51):
We've heard this, sat, We've got Medicare.
Speaker 8 (16:54):
Now we can start rolling back behaves five ten years
at a time.
Speaker 3 (17:00):
Would you support that? We can't afford that.
Speaker 9 (17:03):
Why did you cut snap and healthcare research?
Speaker 3 (17:08):
We do not have unllimited money in the United States.
Speaker 4 (17:14):
Lincoln, Nebraska, a room that erupted in chants of tax
the rich.
Speaker 3 (17:20):
This, of course, Kaylee, follows our.
Speaker 4 (17:22):
Conversation right around this time yesterday with Congressman Brian's Style
Republican from Wisconsin had a similar experience, although to see
hundreds of people line up around the block in this
case for a Mike Flood town hall says a lot
about where we are, and it's where we start today
with our political panel here on Balance of Power. Bloomberg
Politics contributors Rick Davis and Jeanie Shanzano are with us. Genie,
(17:44):
of course, is Senior Democracy Fellow with the Center for
the Study of the Presidency in Congress. Rick is partner
at Stone Court Capital. You know what they're saying, Genie
and it's happened at a couple of these that Democrats
packed the room with activists, some people not even from
the district, to make trouble for somebody like Mike Flood, who,
by the way, is considered a pretty moderate Republican. And
the grand scheme here in the House is that what's
(18:05):
going on, that is.
Speaker 9 (18:07):
Part of it. I mean, if we look at the
spending numbers, the DNC has already put together and activated
a campaign on these very issues. They are flooding the airwaves,
online advertisements, billboards, and certainly getting people out to the
very few town halls that are being held. By one count,
only one or two of the thirty five vulnerable Republicans
(18:30):
has held a town hall. So have to give credit
to Brian Style, Mike Flood, the ones that are willing
to hold these town halls. But the reality is that
can't account for all of the energy and frustration that
we're hearing at those town halls. It can't be accounted
for by Democrats alone. And Republicans have to get on
(18:52):
message if they want to fight this. And one big
problem they have is, you know who hasn't been out
defending this. Donald Trump said on Meet the press, it
was so wildly popular that he didn't need to. But
the polls say something different, And of course we heard
it in Floodstown Hall yesterday. The people on the ground,
at least in certain parts of the country don't think
(19:13):
it's quite as popular as the president.
Speaker 2 (19:17):
Well, when we consider Republicans trying to get their messaging out, Rick,
it does seem that both the lawmakers were talking about
in this instance instance, did come prepared with the messages
that they wanted to be able to send to these
individuals to defend the various elements of this bill. Hard
to do so, though, when you're being drowned out by
booze and shouts. Is this productive? Yes, give credit to
(19:41):
members who are actually getting out there and doing the
FaceTime thing, but is it getting them anywhere at all?
Speaker 10 (19:48):
Yeah, As someone who has attended literally thousands of town
halls throughout the years, sadly it was one of John
McCain's favorite modes of communication. Off some steam is a
good thing from time to time, right, I mean, like
part of what happens at these is your constituencies have
a chance to sort of voice their own opinion in
(20:11):
addition to you out there selling what you've just done,
and so yeah, I mean I think that all in all,
there's no such thing as a bad town hall. If
the opposition wants to come and crowd it in there
and disrupt it, your own voters sit there and look
at that and say, gee that they're being unfair to
Brian Styles or you know, Mike Flood. But at the
(20:34):
end of the day, what you really care about are
those voters who are more likely to vote for you,
and that you have a chance to convey that. And
sometimes it's tough, as you point out, it can get
out of control, but by and large, I am a
big believer in that these guys have to go and
face the music. And if you're good at what you
do for your day job, then you ought to be
(20:56):
able to sell what you just did in this case
on the Reconciliation bill and answer the questions that people
have and give it your best shot, because if you don't,
they will only hear the Democratic talking point and that
ain't going to help you at all.
Speaker 4 (21:11):
You know, It's interesting, guys, because the lawmakers who are
actually choosing to do town halls, let's just take the
two names we've already mentioned here. Brian style and now
Mike Flood are not considered MAGA, they're not considered the
most conservative members of their conference. In the case of
Mike Flood, Genie, he was on the program here less
(21:32):
than two weeks ago. Remember, they had just passed the
recisions package President's Big beautiful Bill, and he actually didn't
seem to like any of the procedure around this. That
has upset a lot of Democrats. Let's back up less
than two weeks. Mike Flood here on balance of power.
Speaker 11 (21:48):
Listen, I don't want to talk about recisions either. We
have a process for appropriations. We appropriate the money, we
pass a budget. We use our article, want authority and
our power of the purse.
Speaker 3 (21:59):
To do our job.
Speaker 11 (22:01):
Listen, I signed out to be in Congress. I signed
up to a help craft legislation, put budgets together, decide
where the spending goes. I don't want to hear the
word recision. I don't want to hear the word impoundment.
I really don't even want to hear the word reconciliation.
Speaker 3 (22:15):
I want to get back.
Speaker 11 (22:17):
To work and I want to pass a budget.
Speaker 4 (22:20):
He doesn't even want to use the word reconciliation, nevermind
recision or impoundment Genie. He almost sounds like a Democrat there.
What's the problem with Mike Flood.
Speaker 9 (22:30):
I don't think there's a problem with Mike Flood except
for the fact that he voted in favor of a
bill that he told his constituents he didn't even read.
He is one thousand percent right they should move away
from recisions unless they are completely supported with documented evidence,
that we should get back to regular order, as Rick
(22:51):
likes to say. But you listen to him there, and
he sounds like his constituents who were frustrated at that
town hall. And he even went out and said that
if there's a problem with this bill that I have
voted for, we can go back and revisit it and
rethink some of it very much, sounding like Josh Hawley
(23:12):
and some other Republicans. But the reality is you voted
for the bill, and pulling back on any part of
that is going to be all but impossible. So he
is acknowledging the frustration his constituents are feeling. You gave
a big tax break for the ultra wealthy. You are
cutting people off of healthcare in the millions, You're cutting
(23:33):
back on money for food, for Needy all the while
they're building a ballroom at the White House for two
hundred million dollars and you're standing up there saying we
don't have money. I mean, the number of ways in
which people can just go around this is you know,
so so must be so frustrating for him because you
know that he probably is understanding what they're saying, but
(23:56):
because he's under the thumb of Trump and the Maga universe,
he hasn't been able to say it, and they're calling
him out on that.
Speaker 2 (24:04):
We should note that President Trump says he and donors
will be footing the bill for that two hundred million
dollar ballroom. He actually reiterated as much when he was
on the roof of the White House earlier today. He
told reporters he was just taking a little walk. When
he was asked if he was thinking about adding a
second story potentially, he didn't necessarily answer, but he did
make the point, Joe that he would finance any projects.
Speaker 3 (24:25):
That's true.
Speaker 4 (24:25):
Yeah, look at him up there, by the way, if
you're with us on Bloomberg TV or on YouTube. The
President of the United States walked out on the roof
of the West Wing out of the State dining room.
He had the architect of that ballroom that Genie mentions,
and he held a gaggle from the roof with questions
being held up to him, implying they're going to build
something up there. Kaylee, I wonder if they're going to
(24:45):
put a skylight in the briefing room.
Speaker 2 (24:47):
I guess we're all going to have to stay tuned
on the latest White House renovation project. They are numerous.
Apparently there's more guilding going into the Ogle office as well.
We've got the flat. You hear about the rosegard We're
doing the ceiling though, I guess yeah. To get back
to what we were just discussing, though, Rufe adventure aside, Rick,
As we consider the messaging around this bill, the struggle
(25:09):
Republicans are finding themselves in and trying to defend their
positions on this what does this all mean in reality
for twenty twenty six because some of those unpopular provisions
that Genie was just referring to won't have even actually
been implemented by the time the midterms roll around. So
as angry as people might be, now, do you see
that lasting until next November when they haven't felt the
effects yet?
Speaker 10 (25:29):
Well? I do think Genie makes a good point. The
answers to the questions that we're hearing from the Brian
styles and the Mike Floods are things like, oh well,
I wasn't for this either, or we can change some
of this when we get back to Congress. And if
you look at the sort of articulation of the concerns
(25:51):
people have, especially around the Medicaid, they already get it.
I would have thought that until it actually impacted them,
they would not have been this voiceless. But whether that's
good democratic talking points or people paying attention don't care
when it actually comes into effect because they know it's
going to and that it's going to affect their families
(26:12):
or their families families, I think they've already been lit
up and the explosion is likely to occur, you know,
in November twenty twenty six. I don't think it's a
wait and see attitude that the public's taking based on
some of the anecdotal evidence we're seeing on the ground
in front of these districts. And I might add, these
(26:32):
are two vulnerable Republicans, right, I mean, these are guys
on the Democratic target list to be taken out, and
they made a lot of good commercials for their Democratic
opponents just by holding these town halls and backing off
of what they already had voted for.
Speaker 4 (26:49):
Fascinating, Genie, Are Democrats holding town halls right now or
is there no point?
Speaker 9 (26:55):
Yeah? I mean they are out there. They've got a
lot of work to do. They have got to make
the case that this bill is against what the president
promised when he was running, and that to support the
working in the middle class, and they are making a
message of repealing it. I don't know if they're going
to be successful on that, but I think we should
(27:17):
also keep in mind that this all may help explain
this push to redistrict in Texas and elsewhere. The Republicans
know that they are in a bit of trouble or
a lot of trouble as they look out and look
into twenty twenty six. Hence the argument that we've got
to redraw these districts if we're going to hold the House,
(27:38):
because we can't defend what we have done when we've
been in Congress. And that's going to be a huge,
huge talking point for Democrats as well.
Speaker 2 (27:48):
All Right, Jeanie Shanzeno and Rick Davis our Political Panel
on this Tuesday. Thank you so much, Jennie. Thank you
especially for giving us the opportunity to talk about the
president's morning White House roof adventure. I'm more still had
here in Balance of Power on Bloomberg TV and Radio.
Speaker 1 (28:06):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
Cocklay and Android Auto with the Bloomberg Business App. Listen
on demand wherever you get your podcasts, or watch us
live on YouTube.
Speaker 4 (28:23):
Yeah, it's only Tuesday, and it's already been a pretty
newsy week, considering the fact that the House and Senate
are both gonzo, and we have no major public events
in the works here at the White House. Although, did
you see the President on the roof a little while ago.
I've never been watching Washington for some time, never seen
the President on the roof of the West Wing. It
was up there, right up on top of the briefing
(28:44):
room with who appeared to be the architect of the
new ballroom.
Speaker 3 (28:48):
That's being installed at the White House.
Speaker 4 (28:49):
The President actually was shouting down to reporters who were
shouting questions at him. He says, they're working on something beautiful.
Maybe they'll get skylights in the reefing room. That would
be kind of a bit dungeony in there. So with
the Senate gone, maybe it makes sense when the majority
(29:10):
of Leader John Thune says the process is broken. He's
referring to the process for confirming nominations, routine nominations to
the Pentagon, and what appeared to be a deal in
the works with Chuck Schumer last weekend fell apart. We
haven't talked about this a lot outside of a brief
mention yesterday. There's very big reason why there are calls
(29:32):
now or predictions even louder predictions for a government shutdown
in September, because no one is getting along. When this
came to be an opportunity over the weekend to start
confirming nominees, en mass Democrats asked for no more recisions packages.
I want to promise on that and to reinstate some
(29:53):
already approved funding for foreign aid and some other programs
they got nowhere, talks broke down and everybody went home.
And now this has left a lot of people still
on the field here. Remembering that President Trump at one
point said he wanted the Senate to stay here until
the work was done. Work through August, if you have to, well,
(30:15):
that never happened. Democrats were able to use the rules
of the Senate to delay dozens of votes on Trump
nominees until fall. And this is where we start our
conversation with General Penaro. Really glad to say that he's back,
because this is an individual who knows what it's like
to prep these nominees for their confirmation hearings and has
the rule book memorized. Cold retired Marine Corps General, former
(30:38):
staff director of the Senate Armed Services Committee, General Arnold Panaro,
Welcome back to Bloomberg. It's great to see you, sir,
Is John Thune Wright. The process is broken.
Speaker 6 (30:48):
Well, Joe, privileged to be with you, and I call
the August recess all play and no work. And unfortunately
the Senate and the House won't be back till the
first week in September, and our national security has not
gone on vacation. And unfortunately the majority leader is correct.
The process has deteriorated and broken down over the years.
(31:10):
And as you've said on your program, often the world
is more dangerous and unstable than the peak of the
Cold War, and we need these senior people in the
Nikey national security jobs on the job and not sitting
in confirmation purgatory in the US Senate where they are today.
The administration, the President is nominated fifty five of the
(31:31):
sixty five presidentially appointed Senate confirmed individuals that run DoD,
a record for this point in any administration, and yet
only fifteen of them have been confirmed by the Senate.
We left fourteen pending on the Senate Executive calendar that
should have been confirmed by unanimous consent and voice vote.
There's another twenty four in the Armed Services Committee awaiting
(31:53):
processing in the Doe Nuclear Complex that runs our nuclear
weapons surity and safety and provides the warheads that we
need for strategic nuclear deterrence. Four of the five are
in the penning in the Senate. And yet Brandon Williams,
who's going to run the Nuclear Security Administration, has been
penning since January twentieth and very capable, very experienced individual
(32:17):
and so we are really it is broken. I think
that the majority leader, unfortunately is absolutely correct.
Speaker 3 (32:24):
It is broken.
Speaker 4 (32:26):
Well, there's a move now by Senate Republicans to consider
changes to the rules of the Senate that would allow
them to move without Democrats, essentially a simple majority here
approve the president's nominees on their own. Does that need
to happen next?
Speaker 6 (32:40):
Well, you actually have a simple majority now. But the
simple majority you have now won when they won't agree
to do anything by unanimous consent or voice vote, which
has been the standard for these non controversial national security
nominations in every administration, you have to file cloture, and
cloture is a majority vote. Once you get cloture on
(33:02):
a nominee because of the filibuster of that nomination, then
you have two hours of post cloture debate before you
can vote on the actual nominee, which also is a
majority vote. So you technically have it now, but the
cloture petition can take two legislative days before you can
vote on it. Then you have the time afterwards. So
I think what they will look at when they come back.
(33:25):
If there's no agreement on a package, and there should be,
just like there should have been before the recess, then
I think that the leadership on the Republican side will
correctly look at how do we shorten all these timeframes,
how do we reduce the amount of time it takes
us to get these nominees through, and how do we
do more at a time than just one at a time,
(33:46):
so I think all of those things will be on
the table.
Speaker 3 (33:50):
Fascinating.
Speaker 4 (33:50):
This is really instructive, General, and I brings us back
to the conversations we were having around the Senator Tubberville blockade,
conversations about not only military readiness, but chaos within the
military culture, families that are waiting to move, families and
in this case, perspective generals who are not going to
(34:13):
be made good on pay that they missed while waiting.
These are all real factors for these nominees as well.
Speaker 3 (34:19):
Right, That's correct.
Speaker 6 (34:21):
And the good news in this particular Congress is we're
not seeing any hold up on our senior military nominations
or any of the n block nominations of our field
grade officers, so those are moving through at a pace.
We just confirmed the new Chief of Naval Operations to
additional war fighting combatant commanders they and several would confirmed
(34:42):
weeks before. So the military we are not facing the
Senator Tuberville hole, which, as you know, was opposed by
four Republicans with combat experience, Senator Dan Sullivan, Senator Joey Arnt,
Senator Todd Young, and Senator Lindsay Graham Republicans, saying that
Senator Tuberville Hole was unwarranted over nine hundred senior military
(35:03):
nominations for close to nine months. We're not seeing that now,
Thank goodness.
Speaker 3 (35:09):
This is good to know.
Speaker 4 (35:11):
I want to ask you about a couple of other
things happening at the Pentagon right now. And we had
a really interesting conversation yesterday with the US Ambassador to
NATO about a pretty important announcement when it comes to
providing US made weapons to Ukraine. In this case, though,
as the President had announced a couple of weeks ago,
NATO allies will be buying the weapons and transferring them
(35:33):
to Ukraine, as opposed to going to Congress, coming up
with a weapons package and putting it overseas to our
allies in Kiev. We talked to Matthew Whitaker about this,
the NATO Ambassador General.
Speaker 3 (35:44):
Here's what he said.
Speaker 8 (35:46):
I want to make sure that the United States has
never at a strategic disadvantage or puts ourselves in a
vulnerable position. And so what we're providing is what would
be considered access in addition to what we need to
defend ourselves strategically. But at the same time.
Speaker 3 (36:03):
You know, we're still manufacturing.
Speaker 8 (36:04):
We see the need in Ukraine. We've then, you know,
the people at the Pentagon, especially the generals that manage
a lot of these important programs, looked and determined what
we could sell to our NATO allies and.
Speaker 3 (36:21):
Then they could provide them to Ukraine.
Speaker 4 (36:23):
Do you like this idea, this plan, General, and do
you worry about eliminating some of our own stocks? There
was a moment there where the Pentagon had halted supplies
to Ukraine, suggesting that we needed to preserve our own
arsenal for our own uses here at home.
Speaker 3 (36:39):
What's your thought, well, Joe, I.
Speaker 6 (36:41):
Think we have to take the strategic view. We cannot
allow Russia to be successful in Ukraine. They wouldn't stop there.
And also if they were successful, it would mold in China.
I ran in North Korea, which would be a bad situation.
And so I don't know the ambassador but I'm very
impressed with what I've seen of him today. Remember, at
the outset of the administry there was concern that we're
going to abandon NATO and abandon Ukraine.
Speaker 3 (37:03):
That has not happened.
Speaker 6 (37:04):
So I would say this is a really good positive
mood where we get the NATO allies to do more
of the burden sharing, a longstanding principle of President Trump
get these weapons into the hands of the Ukrainians. Quicker.
I think we also need the President needs to move
out on the sanctions that he's talked about on Russia
and those people that are helping Russia, you know, perpetuate
(37:26):
this war. And I think also the Deputy Secretary of Defense,
Steve Finberg, is working with our munition suppliers to significantly
enhance it. If you look at the Reconciliation bill that
passed the House and the Senate marked up by the
two authorizing committees of substantial increases in our munitions, and
(37:48):
our industry is getting ready to Roger up to really
beat that up. So I think a combination of all
of these factors are all needed. You can't just do one.
I think all of the above is necessary.
Speaker 4 (38:00):
It's time to Roger Rupp, says the General. We just
got a headline while we're talking here, General Penaro, Russia
mulling Ukraine air truce offer to Trump without ending the war.
We've got a deadline coming at the end of this week.
The President says. Secondary sanctions go on Russia and it's
trading partners. If the bombing of civilians does not cease.
(38:21):
The Kremlin now weighing options, according to Bloomberg News, for
a concession, including an air truce with Ukraine.
Speaker 3 (38:28):
Do you see that happening?
Speaker 6 (38:30):
Well, look, Joe, I hate to say, I'm a very
realistic I've been in a war where I was told
there was a ceasefire and a truce and those things
never happen. I wouldn't trust Russia one centil you know.
I think they basically we've got to bring the hammer down.
That's the only thing that putin understand He's a thug.
He kills his own people, he has no regard for
(38:52):
human life. He's killing women, children, infants. I wouldn't trust him,
and I think we've got to bring the hammer down
and do all the things that we just discussed, Put
the sanctions in place, give Ukraines of weapons they need
to defend their country, both offensively and defensively.
Speaker 8 (39:08):
I don't.
Speaker 3 (39:08):
I wouldn't.
Speaker 6 (39:09):
I wouldn't be very careful. I wouldn't trust them. I've
been in actual in combat when I was told there
was a cease fire and a truce, and the other
side never honored it.
Speaker 3 (39:20):
Which which battle was that?
Speaker 6 (39:22):
General, Well, this goes back to Vietnam, you know, the
where we had different things in Vietnam. And but I
mean I also know from being in the First Iraq
War when there was said talks about well you're in
a no fire zoneer, you're in a free fire zone,
things like that. Though, I mean, when you're on the battlefield,
you know, Murphy's law works all the time. You know,
(39:43):
you've got to.
Speaker 3 (39:44):
Be prepared for anything.
Speaker 6 (39:45):
And so the Russians have never been good at their
work when it comes to this, and so why would
we trust them?
Speaker 7 (39:52):
Now?
Speaker 6 (39:53):
Ronald Reagan was right terrify. I think the hammer. I
think the President is right to bring the hammer down.
Speaker 4 (40:00):
Bringing as many years of experience to us here on Bloomberg.
We thank you for your service as always, General Arnold Panaro,
author of the book If Confirmed, An Insider's view of
the National security confirmation process. You just got your insider's
view right there, and we'll have to tackle the rest
of these nominations in the fall. Thanks for listening to
(40:22):
the Balance of Power podcast. Make sure to subscribe if
you haven't already, at Apple, Spotify.
Speaker 3 (40:27):
Or wherever.
Speaker 4 (40:28):
You get your podcasts, and you can find us live
every weekday from Washington, DC at noontime Eastern at Bloomberg
dot com
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Balance of Power podcast. Catch US Live weekdays at
noon and five pm Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch US live on YouTube.
Speaker 2 (00:25):
Only Tuesday and already we have a lot of tariff
news we're grappling with, and more tariff news we're expecting
over the course of the next week or so. As
it is at the end of this week, not even
August seventh, when the US is set to start collecting
higher levies on a number of trading partners after they
were told what TERI free on their exports would be
charged last Friday on August first. Then, of course there's
(00:46):
the August twelfth deadline that the current detent between the
US and China is set to expire at and in
the next week or so, timing to be determined here,
I suppose Joe, we're expecting we'll finally get the long
awaited hour of sectoral tariffs on tikey industry, semiconductors and
pharmaceutical She.
Speaker 3 (01:04):
Did that all off the top of her head.
Speaker 4 (01:06):
I was watching Yeah, it's a lot of dates to
be swimming through here, and it looks like the chips
could be coming at least the chip tariff semiconductors in
the next two or three weeks, next week or two,
based on the language we heard from President Trump this
morning in an interview on another network. It's where we
start our conversation with Laura Davison, who is with US
now our deputy bureau chief here in Washington. Laura's job
(01:27):
is of course to like, you know, cut through all
the noise and when you have a half an hour
long weave like that. Frankly, not a lot of news
in that conversation, but this one got our attention, and
it's something that investors have been waiting for. Was there
anything new when it came to chip tariffs?
Speaker 3 (01:40):
Do we have a number? Do we have a more
exact timeline?
Speaker 5 (01:43):
We don't other than it is a week or so.
In Trump world, that can mean a week or it
could mean months. But he's made several comments now in
recent weeks that you know, kind of by the end
of the month that this is sort of something that
the usgr US TRADERFF is getting close to. This is
one of one of those We're going to a little
nerd to here. The two thirty two tariffs. These are
the ones that are about a national emergency. These are
(02:04):
the ones that have staying power. This is the same
authority he used in his first term, So these are
not likely to get caught up in the courts. The
reciprocal tariffs, those tariffs that are on countries, those are
the ones that could get a little bit tricky. And
you're starting to see the White House think about, Okay,
if the courts come down and strike down some of these,
how do we implement our tariff strategy in a way
that the courts will uphold. That's going to be after
we get through this spate of dates of different deadlines
(02:26):
coming up. That's kind of the long term strategy of
what's going on at the White House.
Speaker 2 (02:29):
Yeah, it's a good point that there's a massive legal
question around the use of the AIFA authority to implement
these kind of tariffs broadly on countries like for example,
Laura Switzerland, which of course last week learned it was
going to be paying a thirty nine percent tarif, or
rather that tariff would be charged on its exports to
the United States, surprising Switzerland to the extent that now
(02:51):
the Swiss president is rushing to DC to try to
get something of a better deal. Is this likely to
go anywhere?
Speaker 6 (02:59):
Is it?
Speaker 2 (02:59):
Thirty nine percent starting to be collected on the seventh,
just two days from now.
Speaker 5 (03:02):
This is entirely up to Trump. The reason they are
at a thirty nine percent tariff is because of a
call that went badly with the Swiss president last week
ahead of that August first deadline, where they really were
talking about trade deficits, things that the president that US
President Trump did not want to hear at all. They're
trying to rectify that now. I anticipate the tone of
this conversation is going to be a lot different. But
will there be enough groveling for Trump to say, Okay,
(03:24):
we'll bring you down to more in line with other
EU nations.
Speaker 4 (03:27):
Well, apparently they're showing up without an invitation? Is that correct?
From the White House? You just get on a plane
and hope for the best. Knock on the door. Will
the President let them in?
Speaker 5 (03:35):
We will see this. This is really sort of a
high stakes negotiation. Trump, however, loves this. He loves when people,
you know, kind of come to him sort of you know,
our supplicants are asking for his forgiveness. You know, he
has a public event this afternoon. He's signing an executive order,
so we will may get a sense of where his
state of mind is on these negotiations in just a
couple hours.
Speaker 2 (03:55):
And you know, the one thing I forgot to mention
that also falls within this week or so timeline is
come Friday, that's the deadline he gave Russia to agree
to a seasfire in Ukraine or else implement secondary tariffs
or secondary sanctions. I'm not sure we have full clarity, Laura,
as to what exactly he is willing to implement on
Friday if there is no agreement. Even as we learn
Russia is at least considering an air truce with Ukraine,
(04:18):
even if not a full seasfire.
Speaker 5 (04:19):
And even before then, he said he would put more
tariffs on India within the next twenty four hours because
of their purchases of Russian oil. So you have all
of these, as Joe said, a weave of tariffs that's
coming together that makes it very difficult for markets to
figure out what's coming. These timelines are all subject to
Trump's whims and this is just a very very difficult moment,
and that's why we're seeing some of this economic data
(04:41):
come in lower than expected. Services were lower. We also saw,
of course, the very infamous now jobs report last week.
Speaker 4 (04:46):
How much of this is purposeful in its confusion to
keep I guess our trading partners or maybe other countries
on their heels to some extent as opposed to changing
the subject from Jeffrey Epstein. And I bring that up
because there is news today that the House Republicans have
subpoenaed the DOJ, along with former President Clinton, a former
(05:08):
Secretary of State Hillary Clinton, an unredacted complete Epstein files.
I don't know if you see that happening by the
deadline on August nineteenth, but this is obviously something that
the White House does not want us to be talking about.
Speaker 5 (05:20):
There's really two tracks here for the White House. One
it helps to distract from Epstein, and clearly Republicans on
the Hill they're not even in town, but they're still
working on this Epstein issue. I think what we saw
yesterday in terms of the Justice Department also announcing they
were going to investigate the Russiagate scenario going back and
investigate Obama era officials over the Russia's involvement in the
twenty sixteen election. This is kind of a multi prong
(05:42):
strategy from the Trump administration to distract and pivot the narrative. Also,
it's important to remember that they just also don't have
a lot of these deals negotiated. They haven't made up
their mind, they haven't finished the investigations, and that they've
been doing tariffs on dozens of different fronts. And Trump
likes to leave these things to the very last minute
and make up was mine only when he has to.
Speaker 2 (06:01):
All right, Laura Davison, our deputy beer chief here in Washington,
d C, thank you so much for joining us now
as we consider the President making up his mind or
not on tariffs of all different shapes and sizes. We
turned out of Sarah Bianki, who of course served as
a deputy US Trade Representative during the Biden administration. She's
now senior managing director and chief strategist of International Political
(06:21):
Affairs and Public Policy at Evercore ISSI. Sarah, welcome back
to Bloomberg TV and Radio. If we could just begin
with what was a very big number put out by
the President today, the suggestion that tariff's on pharmaceuticals when
and if they are announced, could ultimately go as high
as two hundred and fifty percent, just not immediately to
allow for some more on shoring of that industry here
(06:44):
in the United States. How long of a window do
you really need to leave to allow that kind of
supply chain reorientation to happen. Will two hundred and fifty
percent tariffs the threat of it actually make a difference
on say, things like drug prices that American people are
faced with at the pharmacy.
Speaker 7 (07:02):
Well, two fifty is certainly a very very big number.
And it's particularly interesting because in the EU Agreement, the
EU sends the United States a lot of the drugs
that we get. They were given a fifteen percent from
the President on pharma, So a lot of confusion about
(07:24):
exactly what the President is solving for Relocating a manufacturing
facility or building one of the United States is very
very time consuming and expensive. You need to get FDA approval,
among other things. I think it'll be interesting to see
what part of the drug chain supply chain is the
(07:46):
President looking for. There's all the way down from the
very basic inputs like API to generic drugs. Many of
those come from India to more some of the more
advanced drugs from the EU. So I think we have
a lot to learn from the President about exactly what
he is seeking to achieve here.
Speaker 4 (08:04):
Interesting we're talking about, to your point two very specialized industries,
and you've already expressed that when it comes to pharma,
when you talk about chips as well, it takes a
very long time to build a chip foundry, and there
seems to be an expectation in the White House that
these things can happen, including auto manufacturing back in the
US very quickly. You throw a switch and we're making
(08:27):
iPhones here in the United States. What would be more
difficult to re sure chips or pharmaceuticals.
Speaker 7 (08:35):
Well, they're both very, very very challenging. Chips may be
even more complex, but they're both very very difficult and
not totally clear that there will be a cost advantage
of doing that. I think with the chips investigation, really
what I'm looking for is how much is the President
(08:58):
looking to just tear or if the chips themselves that
come in that's more in the fifty a billion dollar range,
or how wide is he willing to go with products
that have chips in them? In that case, you can
get to about three hundred billion of imports. So what
I'm really looking for on the chips is to see
(09:18):
how much of the derivative products is he looking for.
If not, again, you might find that what the teriffs
encourage is countries to send chips to other places first
and have them embedded in a product and then come
to the US. So how these tariffs are designed makes
(09:38):
a big difference in how the industry responds.
Speaker 6 (09:42):
Well.
Speaker 2 (09:43):
As you talk about chips being embedded in other products,
it reminds me of the idea of where things are originating,
in what form, or from where they ultimately come to
the United States. Knowing Sarah, part of what is said
to be collected beginning August seventh, there is also a
forty percent tariff on trans shipped goods. That we've lacked
a great deal of clarity as to how exactly those
(10:04):
rules would be designed, how they would be tracked and implemented.
What is your expectation. How difficult is it actually to
get accurate transhipment information and charge levy accordingly.
Speaker 7 (10:15):
Well, you have to It's very difficult. What you have
to first do is decide, again, what are you trying
to solve for There are some areas where I think
there's just abuses now where things come safe from China
and they really aren't transformed much in another country and
then they make it on their way to the United States.
(10:36):
That kind of crackdown is really just working, is just
more of a customs enforcement thing than anything else. But alternatively,
the president could be looking for something like a what
about a Chinese factory that's fully built in Vietnam in Mexico.
This is something that the Biden administration looked at around
(10:57):
steel we started to see more steel, Chinese steel coming
in through Mexico. Or are you trying to solve for buid?
You really have to define here what problem am I
solving for? Am I literally talking about any Chinese ownership?
And then design your policy accordingly? And trendshipment is one
where the definitions could certainly run the gamut.
Speaker 4 (11:21):
Interesting data today as we find the US trade deficit
narrowed in June to the tightest since September of twenty
twenty three. It is happening a trade gap down sixteen
percent from the prior month to just over sixty billion dollars,
lower than expected to what extent, will this trend continue?
Speaker 7 (11:41):
Well, certainly, you know, if you teariff things at very
high rates, you do get less of them. And particularly
while we've had remember over this period, we've had a
lot of different policies in place, and we had some
a pre ordering that happened in advance of the month
that could be so I would say I'd want to
(12:02):
see the data for a few more months to see
if we can cut out some of the noise as
the policy has adjusted. But in general, yeah, we should
see the trade deficit down. That's obviously a metric that
this administration cares a lot about. You know, there's a
lot of other metrics that are relevant as well, but
(12:23):
on this one, sure, the trade deficit should marginally come down.
Speaker 2 (12:28):
Well, and we know that deficits in many ways factor
into the calculations the administration has made when setting tariff
rates on individual countries, Sarah, to what extent should we
expect a dramatic reduction in those actual structural deficits or
surplus is depending obviously on what country we're talking about.
But is this an achievable aim to try to bring
all of those down substantially?
Speaker 7 (12:52):
It really depends. I mean you know, one of the
reasons we a lot of people don't just look at
trade deficits across the board as a meaningful metric, even
though this administration takes them quite seriously, is it can
tell you a lot of different things about what's going on. So,
for example, in from Canada, we get a lot of
energy in the United States pretty cost effective. That's one
(13:14):
that's been exempted from some of the tariffs, So that
deficit should persist. I think that's probably good for both economies.
In other places where you were talking about, you know,
the Swiss, Sure they're going to send a lot more.
Speaker 6 (13:32):
Thing.
Speaker 7 (13:33):
So it really depends on the country. It depends what
composition of their exports to the US are sectoral. But
certainly places that can are looking to divert to other
markets to the degree that there's demand, because this is
an expensive way to go. So it may not be
(13:55):
that the United States isn't necessarily exporting anymore to that country,
but rather they're just sending of their goods elsewhere.
Speaker 4 (14:03):
Sure, sorry, Sarah, we were talking earlier about the deadline
at the end of the week that the President has
put on Russia for secondary sanctions, which sometimes he refers
to as tariffs. If that in fact happens, does that
jeopardize our potential to make a trade deal with China
or does it hasten an opportunity.
Speaker 7 (14:23):
Well, I think there's a lot riding on the trade
deal with China, and the administration does seem quite nervous
about the potential for China to take additional action or
or revert to some of the action we've seen on
rare Earth. So I think they're going to try to
not really disrupt that negotiation going into August twelfth, So
(14:46):
we'll see what he does on this oil front. It
shouldn't be a huge but I don't think he's looking
to escalate with China. Certainly, it's also an issue with India,
where he's been trying to land a deal that's gone
a bit sideways of late, so certainly impacts if he
(15:06):
goes there. But again, my expectation is that the administration
is looking to keep China from not escalating at this point,
and my base case is they'll do policies supportingly.
Speaker 4 (15:22):
It's great to have you back as always, Sarah evercore Isi,
Sarah Bianki, we appreciate the insights our panels Up next
here on Bloomberg.
Speaker 1 (15:33):
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.
You can also listen live on Amazon Alexa from our
flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 2 (15:52):
Town is a whole lot less crowded as it is August,
which means Congress is on recess. Both the Senate and
the House are either traveling on codels or home in
their districts talking to their constituents. And in the case
of several Republican lawmakers who have decided to hold town
halls with their constituents in recent days, it hasn't necessarily
(16:14):
gone incredibly well as they try to tout what they
see as the positives of the one big, beautiful bill
that they all just voted for, and those gathered at
the town halls seemed to see it in a very
different light. We saw the most recent evidence of this
yesterday when Republican Congressman Flood of Nebraska held a town hall.
(16:35):
He's actually the vice chair of the Republican Main Street Caucus.
He's been on this program several times Mike Flood faced
down some seven hundred individuals at a town hall, and
let's just get a taste of the reception he got.
Speaker 3 (16:51):
We've heard this, sat, We've got Medicare.
Speaker 8 (16:54):
Now we can start rolling back behaves five ten years
at a time.
Speaker 3 (17:00):
Would you support that? We can't afford that.
Speaker 9 (17:03):
Why did you cut snap and healthcare research?
Speaker 3 (17:08):
We do not have unllimited money in the United States.
Speaker 4 (17:14):
Lincoln, Nebraska, a room that erupted in chants of tax
the rich.
Speaker 3 (17:20):
This, of course, Kaylee, follows our.
Speaker 4 (17:22):
Conversation right around this time yesterday with Congressman Brian's Style
Republican from Wisconsin had a similar experience, although to see
hundreds of people line up around the block in this
case for a Mike Flood town hall says a lot
about where we are, and it's where we start today
with our political panel here on Balance of Power. Bloomberg
Politics contributors Rick Davis and Jeanie Shanzano are with us. Genie,
(17:44):
of course, is Senior Democracy Fellow with the Center for
the Study of the Presidency in Congress. Rick is partner
at Stone Court Capital. You know what they're saying, Genie
and it's happened at a couple of these that Democrats
packed the room with activists, some people not even from
the district, to make trouble for somebody like Mike Flood, who,
by the way, is considered a pretty moderate Republican. And
the grand scheme here in the House is that what's
(18:05):
going on, that is.
Speaker 9 (18:07):
Part of it. I mean, if we look at the
spending numbers, the DNC has already put together and activated
a campaign on these very issues. They are flooding the airwaves,
online advertisements, billboards, and certainly getting people out to the
very few town halls that are being held. By one count,
only one or two of the thirty five vulnerable Republicans
(18:30):
has held a town hall. So have to give credit
to Brian Style, Mike Flood, the ones that are willing
to hold these town halls. But the reality is that
can't account for all of the energy and frustration that
we're hearing at those town halls. It can't be accounted
for by Democrats alone. And Republicans have to get on
(18:52):
message if they want to fight this. And one big
problem they have is, you know who hasn't been out
defending this. Donald Trump said on Meet the press, it
was so wildly popular that he didn't need to. But
the polls say something different, And of course we heard
it in Floodstown Hall yesterday. The people on the ground,
at least in certain parts of the country don't think
(19:13):
it's quite as popular as the president.
Speaker 2 (19:17):
Well, when we consider Republicans trying to get their messaging out, Rick,
it does seem that both the lawmakers were talking about
in this instance instance, did come prepared with the messages
that they wanted to be able to send to these
individuals to defend the various elements of this bill. Hard
to do so, though, when you're being drowned out by
booze and shouts. Is this productive? Yes, give credit to
(19:41):
members who are actually getting out there and doing the
FaceTime thing, but is it getting them anywhere at all?
Speaker 10 (19:48):
Yeah, As someone who has attended literally thousands of town
halls throughout the years, sadly it was one of John
McCain's favorite modes of communication. Off some steam is a
good thing from time to time, right, I mean, like
part of what happens at these is your constituencies have
a chance to sort of voice their own opinion in
(20:11):
addition to you out there selling what you've just done,
and so yeah, I mean I think that all in all,
there's no such thing as a bad town hall. If
the opposition wants to come and crowd it in there
and disrupt it, your own voters sit there and look
at that and say, gee that they're being unfair to
Brian Styles or you know, Mike Flood. But at the
(20:34):
end of the day, what you really care about are
those voters who are more likely to vote for you,
and that you have a chance to convey that. And
sometimes it's tough, as you point out, it can get
out of control, but by and large, I am a
big believer in that these guys have to go and
face the music. And if you're good at what you
do for your day job, then you ought to be
(20:56):
able to sell what you just did in this case
on the Reconciliation bill and answer the questions that people
have and give it your best shot, because if you don't,
they will only hear the Democratic talking point and that
ain't going to help you at all.
Speaker 4 (21:11):
You know, It's interesting, guys, because the lawmakers who are
actually choosing to do town halls, let's just take the
two names we've already mentioned here. Brian style and now
Mike Flood are not considered MAGA, they're not considered the
most conservative members of their conference. In the case of
Mike Flood, Genie, he was on the program here less
(21:32):
than two weeks ago. Remember, they had just passed the
recisions package President's Big beautiful Bill, and he actually didn't
seem to like any of the procedure around this. That
has upset a lot of Democrats. Let's back up less
than two weeks. Mike Flood here on balance of power.
Speaker 11 (21:48):
Listen, I don't want to talk about recisions either. We
have a process for appropriations. We appropriate the money, we
pass a budget. We use our article, want authority and
our power of the purse.
Speaker 3 (21:59):
To do our job.
Speaker 11 (22:01):
Listen, I signed out to be in Congress. I signed
up to a help craft legislation, put budgets together, decide
where the spending goes. I don't want to hear the
word recision. I don't want to hear the word impoundment.
I really don't even want to hear the word reconciliation.
Speaker 3 (22:15):
I want to get back.
Speaker 11 (22:17):
To work and I want to pass a budget.
Speaker 4 (22:20):
He doesn't even want to use the word reconciliation, nevermind
recision or impoundment Genie. He almost sounds like a Democrat there.
What's the problem with Mike Flood.
Speaker 9 (22:30):
I don't think there's a problem with Mike Flood except
for the fact that he voted in favor of a
bill that he told his constituents he didn't even read.
He is one thousand percent right they should move away
from recisions unless they are completely supported with documented evidence,
that we should get back to regular order, as Rick
(22:51):
likes to say. But you listen to him there, and
he sounds like his constituents who were frustrated at that
town hall. And he even went out and said that
if there's a problem with this bill that I have
voted for, we can go back and revisit it and
rethink some of it very much, sounding like Josh Hawley
(23:12):
and some other Republicans. But the reality is you voted
for the bill, and pulling back on any part of
that is going to be all but impossible. So he
is acknowledging the frustration his constituents are feeling. You gave
a big tax break for the ultra wealthy. You are
cutting people off of healthcare in the millions, You're cutting
(23:33):
back on money for food, for Needy all the while
they're building a ballroom at the White House for two
hundred million dollars and you're standing up there saying we
don't have money. I mean, the number of ways in
which people can just go around this is you know,
so so must be so frustrating for him because you
know that he probably is understanding what they're saying, but
(23:56):
because he's under the thumb of Trump and the Maga universe,
he hasn't been able to say it, and they're calling
him out on that.
Speaker 2 (24:04):
We should note that President Trump says he and donors
will be footing the bill for that two hundred million
dollar ballroom. He actually reiterated as much when he was
on the roof of the White House earlier today. He
told reporters he was just taking a little walk. When
he was asked if he was thinking about adding a
second story potentially, he didn't necessarily answer, but he did
make the point, Joe that he would finance any projects.
Speaker 3 (24:25):
That's true.
Speaker 4 (24:25):
Yeah, look at him up there, by the way, if
you're with us on Bloomberg TV or on YouTube. The
President of the United States walked out on the roof
of the West Wing out of the State dining room.
He had the architect of that ballroom that Genie mentions,
and he held a gaggle from the roof with questions
being held up to him, implying they're going to build
something up there. Kaylee, I wonder if they're going to
(24:45):
put a skylight in the briefing room.
Speaker 2 (24:47):
I guess we're all going to have to stay tuned
on the latest White House renovation project. They are numerous.
Apparently there's more guilding going into the Ogle office as well.
We've got the flat. You hear about the rosegard We're
doing the ceiling though, I guess yeah. To get back
to what we were just discussing, though, Rufe adventure aside, Rick,
As we consider the messaging around this bill, the struggle
(25:09):
Republicans are finding themselves in and trying to defend their
positions on this what does this all mean in reality
for twenty twenty six because some of those unpopular provisions
that Genie was just referring to won't have even actually
been implemented by the time the midterms roll around. So
as angry as people might be, now, do you see
that lasting until next November when they haven't felt the
effects yet?
Speaker 10 (25:29):
Well? I do think Genie makes a good point. The
answers to the questions that we're hearing from the Brian
styles and the Mike Floods are things like, oh well,
I wasn't for this either, or we can change some
of this when we get back to Congress. And if
you look at the sort of articulation of the concerns
(25:51):
people have, especially around the Medicaid, they already get it.
I would have thought that until it actually impacted them,
they would not have been this voiceless. But whether that's
good democratic talking points or people paying attention don't care
when it actually comes into effect because they know it's
going to and that it's going to affect their families
(26:12):
or their families families, I think they've already been lit
up and the explosion is likely to occur, you know,
in November twenty twenty six. I don't think it's a
wait and see attitude that the public's taking based on
some of the anecdotal evidence we're seeing on the ground
in front of these districts. And I might add, these
(26:32):
are two vulnerable Republicans, right, I mean, these are guys
on the Democratic target list to be taken out, and
they made a lot of good commercials for their Democratic
opponents just by holding these town halls and backing off
of what they already had voted for.
Speaker 4 (26:49):
Fascinating, Genie, Are Democrats holding town halls right now or
is there no point?
Speaker 9 (26:55):
Yeah? I mean they are out there. They've got a
lot of work to do. They have got to make
the case that this bill is against what the president
promised when he was running, and that to support the
working in the middle class, and they are making a
message of repealing it. I don't know if they're going
to be successful on that, but I think we should
(27:17):
also keep in mind that this all may help explain
this push to redistrict in Texas and elsewhere. The Republicans
know that they are in a bit of trouble or
a lot of trouble as they look out and look
into twenty twenty six. Hence the argument that we've got
to redraw these districts if we're going to hold the House,
(27:38):
because we can't defend what we have done when we've
been in Congress. And that's going to be a huge,
huge talking point for Democrats as well.
Speaker 2 (27:48):
All Right, Jeanie Shanzeno and Rick Davis our Political Panel
on this Tuesday. Thank you so much, Jennie. Thank you
especially for giving us the opportunity to talk about the
president's morning White House roof adventure. I'm more still had
here in Balance of Power on Bloomberg TV and Radio.
Speaker 1 (28:06):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
Cocklay and Android Auto with the Bloomberg Business App. Listen
on demand wherever you get your podcasts, or watch us
live on YouTube.
Speaker 4 (28:23):
Yeah, it's only Tuesday, and it's already been a pretty
newsy week, considering the fact that the House and Senate
are both gonzo, and we have no major public events
in the works here at the White House. Although, did
you see the President on the roof a little while ago.
I've never been watching Washington for some time, never seen
the President on the roof of the West Wing. It
was up there, right up on top of the briefing
(28:44):
room with who appeared to be the architect of the
new ballroom.
Speaker 3 (28:48):
That's being installed at the White House.
Speaker 4 (28:49):
The President actually was shouting down to reporters who were
shouting questions at him. He says, they're working on something beautiful.
Maybe they'll get skylights in the reefing room. That would
be kind of a bit dungeony in there. So with
the Senate gone, maybe it makes sense when the majority
(29:10):
of Leader John Thune says the process is broken. He's
referring to the process for confirming nominations, routine nominations to
the Pentagon, and what appeared to be a deal in
the works with Chuck Schumer last weekend fell apart. We
haven't talked about this a lot outside of a brief
mention yesterday. There's very big reason why there are calls
(29:32):
now or predictions even louder predictions for a government shutdown
in September, because no one is getting along. When this
came to be an opportunity over the weekend to start
confirming nominees, en mass Democrats asked for no more recisions packages.
I want to promise on that and to reinstate some
(29:53):
already approved funding for foreign aid and some other programs
they got nowhere, talks broke down and everybody went home.
And now this has left a lot of people still
on the field here. Remembering that President Trump at one
point said he wanted the Senate to stay here until
the work was done. Work through August, if you have to, well,
(30:15):
that never happened. Democrats were able to use the rules
of the Senate to delay dozens of votes on Trump
nominees until fall. And this is where we start our
conversation with General Penaro. Really glad to say that he's back,
because this is an individual who knows what it's like
to prep these nominees for their confirmation hearings and has
the rule book memorized. Cold retired Marine Corps General, former
(30:38):
staff director of the Senate Armed Services Committee, General Arnold Panaro,
Welcome back to Bloomberg. It's great to see you, sir,
Is John Thune Wright. The process is broken.
Speaker 6 (30:48):
Well, Joe, privileged to be with you, and I call
the August recess all play and no work. And unfortunately
the Senate and the House won't be back till the
first week in September, and our national security has not
gone on vacation. And unfortunately the majority leader is correct.
The process has deteriorated and broken down over the years.
(31:10):
And as you've said on your program, often the world
is more dangerous and unstable than the peak of the
Cold War, and we need these senior people in the
Nikey national security jobs on the job and not sitting
in confirmation purgatory in the US Senate where they are today.
The administration, the President is nominated fifty five of the
(31:31):
sixty five presidentially appointed Senate confirmed individuals that run DoD,
a record for this point in any administration, and yet
only fifteen of them have been confirmed by the Senate.
We left fourteen pending on the Senate Executive calendar that
should have been confirmed by unanimous consent and voice vote.
There's another twenty four in the Armed Services Committee awaiting
(31:53):
processing in the Doe Nuclear Complex that runs our nuclear
weapons surity and safety and provides the warheads that we
need for strategic nuclear deterrence. Four of the five are
in the penning in the Senate. And yet Brandon Williams,
who's going to run the Nuclear Security Administration, has been
penning since January twentieth and very capable, very experienced individual
(32:17):
and so we are really it is broken. I think
that the majority leader, unfortunately is absolutely correct.
Speaker 3 (32:24):
It is broken.
Speaker 4 (32:26):
Well, there's a move now by Senate Republicans to consider
changes to the rules of the Senate that would allow
them to move without Democrats, essentially a simple majority here
approve the president's nominees on their own. Does that need
to happen next?
Speaker 6 (32:40):
Well, you actually have a simple majority now. But the
simple majority you have now won when they won't agree
to do anything by unanimous consent or voice vote, which
has been the standard for these non controversial national security
nominations in every administration, you have to file cloture, and
cloture is a majority vote. Once you get cloture on
(33:02):
a nominee because of the filibuster of that nomination, then
you have two hours of post cloture debate before you
can vote on the actual nominee, which also is a
majority vote. So you technically have it now, but the
cloture petition can take two legislative days before you can
vote on it. Then you have the time afterwards. So
I think what they will look at when they come back.
(33:25):
If there's no agreement on a package, and there should be,
just like there should have been before the recess, then
I think that the leadership on the Republican side will
correctly look at how do we shorten all these timeframes,
how do we reduce the amount of time it takes
us to get these nominees through, and how do we
do more at a time than just one at a time,
(33:46):
so I think all of those things will be on
the table.
Speaker 3 (33:50):
Fascinating.
Speaker 4 (33:50):
This is really instructive, General, and I brings us back
to the conversations we were having around the Senator Tubberville blockade,
conversations about not only military readiness, but chaos within the
military culture, families that are waiting to move, families and
in this case, perspective generals who are not going to
(34:13):
be made good on pay that they missed while waiting.
These are all real factors for these nominees as well.
Speaker 3 (34:19):
Right, That's correct.
Speaker 6 (34:21):
And the good news in this particular Congress is we're
not seeing any hold up on our senior military nominations
or any of the n block nominations of our field
grade officers, so those are moving through at a pace.
We just confirmed the new Chief of Naval Operations to
additional war fighting combatant commanders they and several would confirmed
(34:42):
weeks before. So the military we are not facing the
Senator Tuberville hole, which, as you know, was opposed by
four Republicans with combat experience, Senator Dan Sullivan, Senator Joey Arnt,
Senator Todd Young, and Senator Lindsay Graham Republicans, saying that
Senator Tuberville Hole was unwarranted over nine hundred senior military
(35:03):
nominations for close to nine months. We're not seeing that now,
Thank goodness.
Speaker 3 (35:09):
This is good to know.
Speaker 4 (35:11):
I want to ask you about a couple of other
things happening at the Pentagon right now. And we had
a really interesting conversation yesterday with the US Ambassador to
NATO about a pretty important announcement when it comes to
providing US made weapons to Ukraine. In this case, though,
as the President had announced a couple of weeks ago,
NATO allies will be buying the weapons and transferring them
(35:33):
to Ukraine, as opposed to going to Congress, coming up
with a weapons package and putting it overseas to our
allies in Kiev. We talked to Matthew Whitaker about this,
the NATO Ambassador General.
Speaker 3 (35:44):
Here's what he said.
Speaker 8 (35:46):
I want to make sure that the United States has
never at a strategic disadvantage or puts ourselves in a
vulnerable position. And so what we're providing is what would
be considered access in addition to what we need to
defend ourselves strategically. But at the same time.
Speaker 3 (36:03):
You know, we're still manufacturing.
Speaker 8 (36:04):
We see the need in Ukraine. We've then, you know,
the people at the Pentagon, especially the generals that manage
a lot of these important programs, looked and determined what
we could sell to our NATO allies and.
Speaker 3 (36:21):
Then they could provide them to Ukraine.
Speaker 4 (36:23):
Do you like this idea, this plan, General, and do
you worry about eliminating some of our own stocks? There
was a moment there where the Pentagon had halted supplies
to Ukraine, suggesting that we needed to preserve our own
arsenal for our own uses here at home.
Speaker 3 (36:39):
What's your thought, well, Joe, I.
Speaker 6 (36:41):
Think we have to take the strategic view. We cannot
allow Russia to be successful in Ukraine. They wouldn't stop there.
And also if they were successful, it would mold in China.
I ran in North Korea, which would be a bad situation.
And so I don't know the ambassador but I'm very
impressed with what I've seen of him today. Remember, at
the outset of the administry there was concern that we're
going to abandon NATO and abandon Ukraine.
Speaker 3 (37:03):
That has not happened.
Speaker 6 (37:04):
So I would say this is a really good positive
mood where we get the NATO allies to do more
of the burden sharing, a longstanding principle of President Trump
get these weapons into the hands of the Ukrainians. Quicker.
I think we also need the President needs to move
out on the sanctions that he's talked about on Russia
and those people that are helping Russia, you know, perpetuate
(37:26):
this war. And I think also the Deputy Secretary of Defense,
Steve Finberg, is working with our munition suppliers to significantly
enhance it. If you look at the Reconciliation bill that
passed the House and the Senate marked up by the
two authorizing committees of substantial increases in our munitions, and
(37:48):
our industry is getting ready to Roger up to really
beat that up. So I think a combination of all
of these factors are all needed. You can't just do one.
I think all of the above is necessary.
Speaker 4 (38:00):
It's time to Roger Rupp, says the General. We just
got a headline while we're talking here, General Penaro, Russia
mulling Ukraine air truce offer to Trump without ending the war.
We've got a deadline coming at the end of this week.
The President says. Secondary sanctions go on Russia and it's
trading partners. If the bombing of civilians does not cease.
(38:21):
The Kremlin now weighing options, according to Bloomberg News, for
a concession, including an air truce with Ukraine.
Speaker 3 (38:28):
Do you see that happening?
Speaker 6 (38:30):
Well, look, Joe, I hate to say, I'm a very
realistic I've been in a war where I was told
there was a ceasefire and a truce and those things
never happen. I wouldn't trust Russia one centil you know.
I think they basically we've got to bring the hammer down.
That's the only thing that putin understand He's a thug.
He kills his own people, he has no regard for
(38:52):
human life. He's killing women, children, infants. I wouldn't trust him,
and I think we've got to bring the hammer down
and do all the things that we just discussed, Put
the sanctions in place, give Ukraines of weapons they need
to defend their country, both offensively and defensively.
Speaker 8 (39:08):
I don't.
Speaker 3 (39:08):
I wouldn't.
Speaker 6 (39:09):
I wouldn't be very careful. I wouldn't trust them. I've
been in actual in combat when I was told there
was a cease fire and a truce, and the other
side never honored it.
Speaker 3 (39:20):
Which which battle was that?
Speaker 6 (39:22):
General, Well, this goes back to Vietnam, you know, the
where we had different things in Vietnam. And but I
mean I also know from being in the First Iraq
War when there was said talks about well you're in
a no fire zoneer, you're in a free fire zone,
things like that. Though, I mean, when you're on the battlefield,
you know, Murphy's law works all the time. You know,
(39:43):
you've got to.
Speaker 3 (39:44):
Be prepared for anything.
Speaker 6 (39:45):
And so the Russians have never been good at their
work when it comes to this, and so why would
we trust them?
Speaker 7 (39:52):
Now?
Speaker 6 (39:53):
Ronald Reagan was right terrify. I think the hammer. I
think the President is right to bring the hammer down.
Speaker 4 (40:00):
Bringing as many years of experience to us here on Bloomberg.
We thank you for your service as always, General Arnold Panaro,
author of the book If Confirmed, An Insider's view of
the National security confirmation process. You just got your insider's
view right there, and we'll have to tackle the rest
of these nominations in the fall. Thanks for listening to
(40:22):
the Balance of Power podcast. Make sure to subscribe if
you haven't already, at Apple, Spotify.
Speaker 3 (40:27):
Or wherever.
Speaker 4 (40:28):
You get your podcasts, and you can find us live
every weekday from Washington, DC at noontime Eastern at Bloomberg
dot com
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!