October 13, 2025 • 17 mins
There’s an unexpected place starting to feel the impact of US President Donald Trump’s trade war: Kentucky.
Bloomberg’s Josh Wingrove visited Governor Andy Beshear, the Democrat leading the red state, to understand the economic consequences tariffs have had on Kentucky’s manufacturing industry – and its iconic bourbon. Wingrove sits down with host Sarah Holder to talk about their conversation and his time in the bluegrass state.
Read more: Kentucky Governor Grapples With Tariffs, Says 2028 Call Can Wait - Bloomberg
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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio news, Gonor. Thank you for
taking the time selfishly. It's always just good to get
out of DC and touchgrass, you know, bluegrass or otherwise.
Speaker 2 (00:15):
Bloomberg's White House reporter Josh Wingrove took a trip down
to the Kentucky State Capitol a few weeks ago to
sit down with Governor Andy Basheer.
Speaker 3 (00:23):
Welcome to Frankfurt.
Speaker 1 (00:25):
Thank you, Kelly.
Speaker 2 (00:26):
They met inside the old Governor's mansion. In Bashir's office,
which featured some very Kentucky touches.
Speaker 1 (00:33):
He has a bottle of bourbon with his dog's face
on it sealed. I should know. We did not get
to crack that. I know, heartbreaking. But he also has
a KFC bucket with his own face on it, so
leaning into the brand a little bit.
Speaker 2 (00:45):
Bourbon and bluegrass music and Kentucky fried chicken. These are
just a few of Kentucky's most famous exports, but Josh
says there's a lot more to Kentucky's economy than that.
The one time coal producing center is also in auto manufacturing,
juggernaut in aerospace hub and one of the country's most
(01:08):
prolific importers.
Speaker 1 (01:10):
Kentucky kind of flies under the radar. As a trade
exposed state, its imports are the top in the country
as a share of their economy. You might think Michigan
or other states that jump to mind more as big
manufacturing states, But it's.
Speaker 2 (01:22):
Kentucky and right now it's in the crossfire of the
trade war.
Speaker 1 (01:27):
The stuff they are building is being hit with the
import tariffs, and the stuff they're selling, namely bourbon, but
other things including aerospace, is being affected as well with
potential countermeasures countries boycotting or applying their own tariffs.
Speaker 2 (01:38):
Though the pace of tariff news has slowed since the summer,
the whiplash isn't over. On Friday, President Donald Trump threatened
a new one hundred percent tariff on Chinese goods, but
then over the weekend he softened, signaling the US would
be open to further negotiations, and next month the Supreme
Court will start hearing oral arguments in a case that
(01:59):
will decide whether Trump's reciprocal tariffs are even legal. As
Trump's tariff policies start to hit Kentucky's key industries, the
red state's Democratic governor has been vocal about the consequences
for his constituents.
Speaker 3 (02:13):
The impacts are hitting the economy in Kentucky and across
the country. They haven't been fully felt yet, and part
of that is because it's constantly changing, right, But what
we will see in the United States is increased costs
on our people.
Speaker 2 (02:29):
Basher is one of the only Democrats in Kentucky state leadership,
but he's not the only Kentucky politician who's taking the
administration to task over Trump's trade war. There's Kentucky Senator
Ran Paul So.
Speaker 4 (02:42):
The number one issue I get wherever I go in
the state is tariff's are killing the family of farm.
Tariffs are killing the bourbon industry, tariff is killing the
cargo transport industry.
Speaker 2 (02:52):
And Kentucky's other Senator, Mitch McConnell.
Speaker 5 (02:55):
Put me down as a guy who hopes the trade
war isn't very long because if it's prolonged, it means
higher prices for all of you.
Speaker 2 (03:04):
For every cand State Congressman Thomas Massey has been a
vocal tariff critic too, all three of them Republicans.
Speaker 1 (03:13):
The one thing they seem to agree on down there
is tariffs are a bad idea, or at least the
way they're being done is a bad idea.
Speaker 2 (03:21):
I'm Sarah Holder, and this is the big take from
Bloomberg News Today. On the show, more from Josh's interview
with Kentucky Governor Andy Basheer what Trump's trade war and
domestic policy agenda means for the Red State's economy and
for its voters. President Trump announced his sweeping global tariffs
(03:44):
a few months into the start of his second term.
Speaker 5 (03:47):
April second, twenty twenty five. Will forever be remembered as
today American industry was reborn. Today America's destiny was reclaimed,
and the day that we began to make America wealthy again.
Speaker 2 (04:03):
After months of negotiations, escalations, downgrades, and delays, most of
those tariffs went into effect on August seventh, But that
hasn't been the end of the story.
Speaker 3 (04:14):
So we've now gone from across the board to reciprocal,
to industry specific, to company specific, and now we are
at product specific.
Speaker 2 (04:24):
Kentucky Governor Andy Basheer again, the.
Speaker 3 (04:27):
Only thing that doesn't change is that it's going to
change every day.
Speaker 2 (04:33):
Bloomberg White House reporter Josh Wingrove wanted to talk to
Governor Basher because Kentucky is in some ways a microcosm
of the rest of the US as local economies adapt
to these shifting tariff policies, But Kentucky is also uniquely vulnerable.
Speaker 1 (04:49):
Kentucky is a crossroads state, right It is near the
manufacturing heartlands of Michigan, Ohio, but a gateway between the
coasts and sort of middle and South in America. And
that's why they have a lot of logistics hubs type
of business. That's why they have a lot of manufacturing.
Ford has a huge plant there. Bourbon, of course, has
been an iconic part of their industry as well. It's
(05:11):
sold a lot domestically, but it sold a lot internationally too,
and is often targeted because countries tend to look for
sort of tangible things to hit, whether it's Florida orange
juice or Kentucky bourbon, and that's why these terrifyts tend
to bite in places like this.
Speaker 2 (05:27):
Levies on imports are hitting the state's manufacturing sector, while
retaliatory measures from other trading partners are affecting the state's exports.
Speaker 1 (05:36):
So, for instance, bourbon is an export but is being
impacted because people are simply refusing to buy it because
they're ticked off. Kentucky's main export country is Canada. The
Canadians are up in arms right now because Trump is
more or less trying to annex the country. And then
there's individual tariffs like on steel and aluminum. Well, if
you have a car plant, you use a lot of
steel and aluminum, and so Ford is navigating that.
Speaker 2 (06:00):
Ford employees more than ten thousand workers in Kentucky, and
Bashir told Josh the state depends on the company's continued success.
Speaker 3 (06:08):
Ford has been a huge investor in Kentucky over the
last five years, five and a half years since i'ben governor.
Now we also have the largest Toyota manufacturing facility in
the world in our state. What Ford is saying is
that they believe that this chaotic policy that is not
being done through normal channels, that is not having the
(06:29):
experts that understand the auto industry and how to create
a level playing field. They're not being consulted.
Speaker 2 (06:36):
Trump says his tariffs are designed to help revive American manufacturing.
The industry has lost more than five million jobs and
nearly seventy thousand factories since the nineties, But in Kentucky,
manufacturing is a major driver of its economy. Thirteen percent
of the workforce is employed in the sector, and Bashir
told Josh that in his state, Trump's tariff policies are
(06:59):
putting the success at risk.
Speaker 3 (07:01):
The president might think he's helping domestic manufacturers, but in
fact he's hurting them.
Speaker 1 (07:06):
People think about manufacturing, think about giant plants, right, but
manufacturing can be pretty small too. And you think of
like small companies that, let's say, input their materials from China,
build it in America, sell it in America, employ Americans.
What should that company do because right now they're kind
of caught in the middle of it. Trump thinks that
(07:27):
if you want to avoid tariffs, you're just going to
build a big new factory in a place like Kentucky.
Well you might, but then you have to pay the
other tariff. Citi's charging, for instance, some steel to build
that factory, and that might just get too complicated for you.
Or you might be doing it at a time when
there's a lot of questions about the economy and you're
worried about consumer demand, you know, maybe falling, and you're like, ah,
(07:47):
I know, I'll just kind of hold off and wait.
And if every company holds off and waits, and suddenly
things grind to a halt pretty quickly, and so I
think that that is why manufacturing is so often seen
as a canary in the coal mine, if you'll excuse
me completely inadvert in Kentucky pun because it is sort
of a bell weather.
Speaker 2 (08:05):
I'm wondering if Basher sees any benefits for domestic automakers
from tariffs when it comes to helping them compete globally.
For example, how does Basher see the long game here
and how does he talk about it?
Speaker 1 (08:17):
So it's funny because one of the things Trump has
done is sort of shift the consensus on this right.
Republicans were the anti tariff party until Donald Trump came along.
So Governor Basher's position is stealing aluminum tariffs, for instance,
can be appropriate when targeted.
Speaker 3 (08:33):
When you have China dumping steel and or aluminum, then
a targeted tariff that is done through the regular process
that brings in the experts on the amount those can
be helpful to ensure the US economy has certain manufacturing
that is critical to our national security.
Speaker 1 (08:52):
Without being hallowed out by the Chinese. Exactly right. So
for Governor Basher on the autopiece, it's interesting because yeah,
I think Trump likes the idea of tariffing for an
autos to help domestic automakers. The problem is the sequencing
so far has hurt domestic automakers. Right Ford in Kentucky
is the domestic automaker that makes most of its cars
in the US, and right now they are at a
(09:14):
disadvantage against their Japanese rivals because of the way the
teriffs have all shaken out. But it is complicated because GM,
for instance, is a major importer, including from South Korea,
and so they're kind of caught in the middle of
it too. If they pay a fifteen percent tariff on
a car they make in South Korea and pay input
tariffs on cars they make in America and have to
(09:34):
have a higher paid worker, or this or that, it
might actually incentivize them to shift more production to South
Korea than having it in places like Kentucky or wherever
in the United States.
Speaker 2 (09:43):
But Shir is far from the only one raising concerns
about the way Trump's tariffs have been rolled out. Following
a wave of lawsuits filed by businesses and state attorneys general,
the US Court of International Trade ruled the President does
not have the authority to use the international emergence see
Economic Powers Act to impose tariffs. There's a stay on
(10:03):
the case while the Trump administration appeals to the US
Supreme Court, which will start hearing oral arguments on November fifth.
Speaker 3 (10:11):
My hope is that the lawsuit brought by Democratic attorneys general,
both in the International Court of Trade as well as
in a district court, reaches the Supreme Court and they
rule what any other Supreme court would have, that the
president doesn't have the power to change tariffs on a whim.
This is a president who wants to simply set any
(10:34):
tariff any time, for any reason, and the law doesn't
allow that.
Speaker 2 (10:41):
After the break, Kentucky's manufacturing industry is up against more
than just tariffs. What a rollback of green energy policies
means for the Kentucky automakers who've gone all in on evs.
Kentucky wasn't always the manufacturing hub it is now. For
(11:04):
most of the twentieth century, it was known as one
of the country's top coal producers.
Speaker 3 (11:09):
When you look at the coal miners of eastern Kentucky,
West Virginia and elsewhere, they mined the coal that powered
the Industrial revolution that created the strongest middle class of
the world's ever seen. That powered US through two World wars.
Speaker 2 (11:21):
But when the US started investing more in green energy sources,
Kentucky Governor Andy Basheer says a lot of miners were
left behind in the transition.
Speaker 3 (11:30):
Yet when the energy economy changed, they weren't thanked. In
many instances, they were told they were doing something bad,
and the new jobs didn't go where the old jobs were.
Everybody was talking about environmental justice at the time, no
one was talking about economic justice, and these people that
broke their backs to help build this country were left behind.
Speaker 2 (11:51):
Basher told Bloomberg White House reporter Josh Wingrove that his
priority now is diversifying Kentucky's economy.
Speaker 3 (11:58):
I recognized that climate change is and I'm the first
Kentucky governor that's ever said that phrase out loud. I
say it because it's true, and we're not likely to
see a rebound in older areas of energy generation. Why
because every company that's coming to Kentucky is still telling
me that they want to be more sustainable, is still
(12:18):
asking for more diversity in their energy portfolio. And so
for me, if I want to recruit that next set
of jobs, I've got to make sure that we have
multiple means of energy production, including more renewables.
Speaker 2 (12:32):
A large part of Kentucky's industrial diversification has come in
the form of electric vehicles. Since Bashir took office, the
state has become a key player in the EV supply chain,
attracting billions of dollars in EV related investments in cars, parts,
and batteries. One of the most significant EV related projects
(12:52):
in Kentucky is a joint venture between South Korea's sk
On and Ford called Blue Oval.
Speaker 1 (13:00):
By the way I think we're supposed to pronounce.
Speaker 2 (13:02):
Blue Oval is like Louisville, Blueuvolle. I think it's a
pun oh okayo, Blueville, Glueville, Louisville.
Speaker 1 (13:08):
I think, as non Kentuckians, let's say blue Oval, but
I think it is. It is a nod to the
local pronunciation of Louisville.
Speaker 2 (13:15):
No thank you. After receiving a nearly ten billion dollar
loan from Biden's Department of Energy at the end of
last year, Blue Oville began producing batteries for Ford's F
one fifty lightning pickup truck in August and so to.
Speaker 3 (13:30):
Us, it was incredible first to secure Blue Level, and
that has two plants Kentucky one US up and operating
already over fourteen hundred employees. Kentucky two. They are fully constructing.
The only question is when it will go into operation.
And what that's done is brought in billions of dollars
of additional investment a supply chain that doesn't currently exist.
Speaker 2 (13:52):
But since Trump was sworn in, the battery plant has
been facing headwinds. I made a broader rollback in green energy,
and the federal EV tax credit expired in September and
demand for electric vehicles has been slowing. That's affected demand
for Blue OVAL's batteries.
Speaker 1 (14:10):
It is sort of facing uncertainty because it was meant
to build batteries for the F one fifty Lightning Fords
electric truck. Demand for that has just not been anywhere
near where Ford thought it would be.
Speaker 2 (14:21):
Ford lost about five billion dollars on its EV business
last year, and the companies said it could lose even
more this year. Meanwhile, Trump's immigration policies are also ratcheting
up uncertainty for the Blue Oval project. In September, ICE
officials rated a Hyundai battery plant in Georgia. They arrested
four hundred and seventy five people. Mostly South Korean immigrants.
Speaker 1 (14:44):
And so the big question right now is what impact
does that Georgia rad have on every other Korean project
in the country, including the Blue Oval joint venture in Louisville,
including other South Korean projects in Kentucky and future projects.
Speaker 2 (14:57):
There's a potential chilling effect, chilling effect.
Speaker 1 (15:00):
It is a huge diplomatic crisis. Hanging in the balance
of all this is President Trump's trade deal with Korea.
It's tariffs and it's immigration, it's investment, and it's trade.
I mean, it's all kind of one story.
Speaker 2 (15:11):
Despite these challenges, Josh says, Ford is committed to building
its EV business in Kentucky. It's spending two billion dollars
to build budget electric cars at its Louisville plant. And
as for the Kentucky governor, his faith in the industry
hasn't been shaken.
Speaker 3 (15:27):
What you see is Ford, and what I see is
every other major manufacturer is still continuing to make EV investments.
A lot of people have tried to fight the future,
and no one's ever won. EV's are where the world
is going in terms of automotive The question is the
pace or speed at which it moves. In Kentucky, we
also know what happens if you aren't on the forefront
(15:50):
of change in an industry. I will not let that
happen in the automotive sector.
Speaker 2 (15:55):
Bashir is a Democrat who's betting the farm on EV's
Perhaps it's not surprising to hear him critique Trump's protectionist,
oil and gas heavy economic agenda, but Bashir told Josh
that when the economic consequences of these policies start to
hit Kentucky, he believes both Democrats and Republicans will feel them.
Speaker 1 (16:15):
Democrats, including Governor Vasheer, are still trying to figure out
how to talk about the terror question, in part because
it's not totally clear where their own party will land,
in part because consumers aren't really yet totally seeing it
in the sticker shock. They still see the inflationary numbers
that they've been dealing with for years, and they assume
the prices are just stayed high. But that sticker shock
(16:35):
is going to come, and I think then we'll see
Democrats wrap up their messaging on it.
Speaker 3 (16:40):
I don't think you'd find many voters in America who
said that they went to the polls and voted because
of tariffs.
Speaker 1 (16:46):
What he told them was he was going to.
Speaker 3 (16:48):
Make paying bills at the end of the month a
little bit easier, but he's governed in any way. But
what he promised.
Speaker 1 (16:56):
Trump is already declaring victory, saying we're not seeing inflation
yet so many people, including Governor Bashir, but other industries
and companies are saying it's just not there yet because
the tariffs are changing so frequently, the companies haven't decided
what to do yet, but that eventually some or all
of that is going to get passed on to the consumer,
and that's when this is, I think, going to become
more of a potent political issue.
Speaker 2 (17:22):
This is The Big Take from Bloomberg News. I'm Sarah Holder.
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you liked this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow.
Bloomberg Audio Studios, Podcasts, radio news, Gonor. Thank you for
taking the time selfishly. It's always just good to get
out of DC and touchgrass, you know, bluegrass or otherwise.
Speaker 2 (00:15):
Bloomberg's White House reporter Josh Wingrove took a trip down
to the Kentucky State Capitol a few weeks ago to
sit down with Governor Andy Basheer.
Speaker 3 (00:23):
Welcome to Frankfurt.
Speaker 1 (00:25):
Thank you, Kelly.
Speaker 2 (00:26):
They met inside the old Governor's mansion. In Bashir's office,
which featured some very Kentucky touches.
Speaker 1 (00:33):
He has a bottle of bourbon with his dog's face
on it sealed. I should know. We did not get
to crack that. I know, heartbreaking. But he also has
a KFC bucket with his own face on it, so
leaning into the brand a little bit.
Speaker 2 (00:45):
Bourbon and bluegrass music and Kentucky fried chicken. These are
just a few of Kentucky's most famous exports, but Josh
says there's a lot more to Kentucky's economy than that.
The one time coal producing center is also in auto manufacturing,
juggernaut in aerospace hub and one of the country's most
(01:08):
prolific importers.
Speaker 1 (01:10):
Kentucky kind of flies under the radar. As a trade
exposed state, its imports are the top in the country
as a share of their economy. You might think Michigan
or other states that jump to mind more as big
manufacturing states, But it's.
Speaker 2 (01:22):
Kentucky and right now it's in the crossfire of the
trade war.
Speaker 1 (01:27):
The stuff they are building is being hit with the
import tariffs, and the stuff they're selling, namely bourbon, but
other things including aerospace, is being affected as well with
potential countermeasures countries boycotting or applying their own tariffs.
Speaker 2 (01:38):
Though the pace of tariff news has slowed since the summer,
the whiplash isn't over. On Friday, President Donald Trump threatened
a new one hundred percent tariff on Chinese goods, but
then over the weekend he softened, signaling the US would
be open to further negotiations, and next month the Supreme
Court will start hearing oral arguments in a case that
(01:59):
will decide whether Trump's reciprocal tariffs are even legal. As
Trump's tariff policies start to hit Kentucky's key industries, the
red state's Democratic governor has been vocal about the consequences
for his constituents.
Speaker 3 (02:13):
The impacts are hitting the economy in Kentucky and across
the country. They haven't been fully felt yet, and part
of that is because it's constantly changing, right, But what
we will see in the United States is increased costs
on our people.
Speaker 2 (02:29):
Basher is one of the only Democrats in Kentucky state leadership,
but he's not the only Kentucky politician who's taking the
administration to task over Trump's trade war. There's Kentucky Senator
Ran Paul So.
Speaker 4 (02:42):
The number one issue I get wherever I go in
the state is tariff's are killing the family of farm.
Tariffs are killing the bourbon industry, tariff is killing the
cargo transport industry.
Speaker 2 (02:52):
And Kentucky's other Senator, Mitch McConnell.
Speaker 5 (02:55):
Put me down as a guy who hopes the trade
war isn't very long because if it's prolonged, it means
higher prices for all of you.
Speaker 2 (03:04):
For every cand State Congressman Thomas Massey has been a
vocal tariff critic too, all three of them Republicans.
Speaker 1 (03:13):
The one thing they seem to agree on down there
is tariffs are a bad idea, or at least the
way they're being done is a bad idea.
Speaker 2 (03:21):
I'm Sarah Holder, and this is the big take from
Bloomberg News Today. On the show, more from Josh's interview
with Kentucky Governor Andy Basheer what Trump's trade war and
domestic policy agenda means for the Red State's economy and
for its voters. President Trump announced his sweeping global tariffs
(03:44):
a few months into the start of his second term.
Speaker 5 (03:47):
April second, twenty twenty five. Will forever be remembered as
today American industry was reborn. Today America's destiny was reclaimed,
and the day that we began to make America wealthy again.
Speaker 2 (04:03):
After months of negotiations, escalations, downgrades, and delays, most of
those tariffs went into effect on August seventh, But that
hasn't been the end of the story.
Speaker 3 (04:14):
So we've now gone from across the board to reciprocal,
to industry specific, to company specific, and now we are
at product specific.
Speaker 2 (04:24):
Kentucky Governor Andy Basheer again, the.
Speaker 3 (04:27):
Only thing that doesn't change is that it's going to
change every day.
Speaker 2 (04:33):
Bloomberg White House reporter Josh Wingrove wanted to talk to
Governor Basher because Kentucky is in some ways a microcosm
of the rest of the US as local economies adapt
to these shifting tariff policies, But Kentucky is also uniquely vulnerable.
Speaker 1 (04:49):
Kentucky is a crossroads state, right It is near the
manufacturing heartlands of Michigan, Ohio, but a gateway between the
coasts and sort of middle and South in America. And
that's why they have a lot of logistics hubs type
of business. That's why they have a lot of manufacturing.
Ford has a huge plant there. Bourbon, of course, has
been an iconic part of their industry as well. It's
(05:11):
sold a lot domestically, but it sold a lot internationally too,
and is often targeted because countries tend to look for
sort of tangible things to hit, whether it's Florida orange
juice or Kentucky bourbon, and that's why these terrifyts tend
to bite in places like this.
Speaker 2 (05:27):
Levies on imports are hitting the state's manufacturing sector, while
retaliatory measures from other trading partners are affecting the state's exports.
Speaker 1 (05:36):
So, for instance, bourbon is an export but is being
impacted because people are simply refusing to buy it because
they're ticked off. Kentucky's main export country is Canada. The
Canadians are up in arms right now because Trump is
more or less trying to annex the country. And then
there's individual tariffs like on steel and aluminum. Well, if
you have a car plant, you use a lot of
steel and aluminum, and so Ford is navigating that.
Speaker 2 (06:00):
Ford employees more than ten thousand workers in Kentucky, and
Bashir told Josh the state depends on the company's continued success.
Speaker 3 (06:08):
Ford has been a huge investor in Kentucky over the
last five years, five and a half years since i'ben governor.
Now we also have the largest Toyota manufacturing facility in
the world in our state. What Ford is saying is
that they believe that this chaotic policy that is not
being done through normal channels, that is not having the
(06:29):
experts that understand the auto industry and how to create
a level playing field. They're not being consulted.
Speaker 2 (06:36):
Trump says his tariffs are designed to help revive American manufacturing.
The industry has lost more than five million jobs and
nearly seventy thousand factories since the nineties, But in Kentucky,
manufacturing is a major driver of its economy. Thirteen percent
of the workforce is employed in the sector, and Bashir
told Josh that in his state, Trump's tariff policies are
(06:59):
putting the success at risk.
Speaker 3 (07:01):
The president might think he's helping domestic manufacturers, but in
fact he's hurting them.
Speaker 1 (07:06):
People think about manufacturing, think about giant plants, right, but
manufacturing can be pretty small too. And you think of
like small companies that, let's say, input their materials from China,
build it in America, sell it in America, employ Americans.
What should that company do because right now they're kind
of caught in the middle of it. Trump thinks that
(07:27):
if you want to avoid tariffs, you're just going to
build a big new factory in a place like Kentucky.
Well you might, but then you have to pay the
other tariff. Citi's charging, for instance, some steel to build
that factory, and that might just get too complicated for you.
Or you might be doing it at a time when
there's a lot of questions about the economy and you're
worried about consumer demand, you know, maybe falling, and you're like, ah,
(07:47):
I know, I'll just kind of hold off and wait.
And if every company holds off and waits, and suddenly
things grind to a halt pretty quickly, and so I
think that that is why manufacturing is so often seen
as a canary in the coal mine, if you'll excuse
me completely inadvert in Kentucky pun because it is sort
of a bell weather.
Speaker 2 (08:05):
I'm wondering if Basher sees any benefits for domestic automakers
from tariffs when it comes to helping them compete globally.
For example, how does Basher see the long game here
and how does he talk about it?
Speaker 1 (08:17):
So it's funny because one of the things Trump has
done is sort of shift the consensus on this right.
Republicans were the anti tariff party until Donald Trump came along.
So Governor Basher's position is stealing aluminum tariffs, for instance,
can be appropriate when targeted.
Speaker 3 (08:33):
When you have China dumping steel and or aluminum, then
a targeted tariff that is done through the regular process
that brings in the experts on the amount those can
be helpful to ensure the US economy has certain manufacturing
that is critical to our national security.
Speaker 1 (08:52):
Without being hallowed out by the Chinese. Exactly right. So
for Governor Basher on the autopiece, it's interesting because yeah,
I think Trump likes the idea of tariffing for an
autos to help domestic automakers. The problem is the sequencing
so far has hurt domestic automakers. Right Ford in Kentucky
is the domestic automaker that makes most of its cars
in the US, and right now they are at a
(09:14):
disadvantage against their Japanese rivals because of the way the
teriffs have all shaken out. But it is complicated because GM,
for instance, is a major importer, including from South Korea,
and so they're kind of caught in the middle of
it too. If they pay a fifteen percent tariff on
a car they make in South Korea and pay input
tariffs on cars they make in America and have to
(09:34):
have a higher paid worker, or this or that, it
might actually incentivize them to shift more production to South
Korea than having it in places like Kentucky or wherever
in the United States.
Speaker 2 (09:43):
But Shir is far from the only one raising concerns
about the way Trump's tariffs have been rolled out. Following
a wave of lawsuits filed by businesses and state attorneys general,
the US Court of International Trade ruled the President does
not have the authority to use the international emergence see
Economic Powers Act to impose tariffs. There's a stay on
(10:03):
the case while the Trump administration appeals to the US
Supreme Court, which will start hearing oral arguments on November fifth.
Speaker 3 (10:11):
My hope is that the lawsuit brought by Democratic attorneys general,
both in the International Court of Trade as well as
in a district court, reaches the Supreme Court and they
rule what any other Supreme court would have, that the
president doesn't have the power to change tariffs on a whim.
This is a president who wants to simply set any
(10:34):
tariff any time, for any reason, and the law doesn't
allow that.
Speaker 2 (10:41):
After the break, Kentucky's manufacturing industry is up against more
than just tariffs. What a rollback of green energy policies
means for the Kentucky automakers who've gone all in on evs.
Kentucky wasn't always the manufacturing hub it is now. For
(11:04):
most of the twentieth century, it was known as one
of the country's top coal producers.
Speaker 3 (11:09):
When you look at the coal miners of eastern Kentucky,
West Virginia and elsewhere, they mined the coal that powered
the Industrial revolution that created the strongest middle class of
the world's ever seen. That powered US through two World wars.
Speaker 2 (11:21):
But when the US started investing more in green energy sources,
Kentucky Governor Andy Basheer says a lot of miners were
left behind in the transition.
Speaker 3 (11:30):
Yet when the energy economy changed, they weren't thanked. In
many instances, they were told they were doing something bad,
and the new jobs didn't go where the old jobs were.
Everybody was talking about environmental justice at the time, no
one was talking about economic justice, and these people that
broke their backs to help build this country were left behind.
Speaker 2 (11:51):
Basher told Bloomberg White House reporter Josh Wingrove that his
priority now is diversifying Kentucky's economy.
Speaker 3 (11:58):
I recognized that climate change is and I'm the first
Kentucky governor that's ever said that phrase out loud. I
say it because it's true, and we're not likely to
see a rebound in older areas of energy generation. Why
because every company that's coming to Kentucky is still telling
me that they want to be more sustainable, is still
(12:18):
asking for more diversity in their energy portfolio. And so
for me, if I want to recruit that next set
of jobs, I've got to make sure that we have
multiple means of energy production, including more renewables.
Speaker 2 (12:32):
A large part of Kentucky's industrial diversification has come in
the form of electric vehicles. Since Bashir took office, the
state has become a key player in the EV supply chain,
attracting billions of dollars in EV related investments in cars, parts,
and batteries. One of the most significant EV related projects
(12:52):
in Kentucky is a joint venture between South Korea's sk
On and Ford called Blue Oval.
Speaker 1 (13:00):
By the way I think we're supposed to pronounce.
Speaker 2 (13:02):
Blue Oval is like Louisville, Blueuvolle. I think it's a
pun oh okayo, Blueville, Glueville, Louisville.
Speaker 1 (13:08):
I think, as non Kentuckians, let's say blue Oval, but
I think it is. It is a nod to the
local pronunciation of Louisville.
Speaker 2 (13:15):
No thank you. After receiving a nearly ten billion dollar
loan from Biden's Department of Energy at the end of
last year, Blue Oville began producing batteries for Ford's F
one fifty lightning pickup truck in August and so to.
Speaker 3 (13:30):
Us, it was incredible first to secure Blue Level, and
that has two plants Kentucky one US up and operating
already over fourteen hundred employees. Kentucky two. They are fully constructing.
The only question is when it will go into operation.
And what that's done is brought in billions of dollars
of additional investment a supply chain that doesn't currently exist.
Speaker 2 (13:52):
But since Trump was sworn in, the battery plant has
been facing headwinds. I made a broader rollback in green energy,
and the federal EV tax credit expired in September and
demand for electric vehicles has been slowing. That's affected demand
for Blue OVAL's batteries.
Speaker 1 (14:10):
It is sort of facing uncertainty because it was meant
to build batteries for the F one fifty Lightning Fords
electric truck. Demand for that has just not been anywhere
near where Ford thought it would be.
Speaker 2 (14:21):
Ford lost about five billion dollars on its EV business
last year, and the companies said it could lose even
more this year. Meanwhile, Trump's immigration policies are also ratcheting
up uncertainty for the Blue Oval project. In September, ICE
officials rated a Hyundai battery plant in Georgia. They arrested
four hundred and seventy five people. Mostly South Korean immigrants.
Speaker 1 (14:44):
And so the big question right now is what impact
does that Georgia rad have on every other Korean project
in the country, including the Blue Oval joint venture in Louisville,
including other South Korean projects in Kentucky and future projects.
Speaker 2 (14:57):
There's a potential chilling effect, chilling effect.
Speaker 1 (15:00):
It is a huge diplomatic crisis. Hanging in the balance
of all this is President Trump's trade deal with Korea.
It's tariffs and it's immigration, it's investment, and it's trade.
I mean, it's all kind of one story.
Speaker 2 (15:11):
Despite these challenges, Josh says, Ford is committed to building
its EV business in Kentucky. It's spending two billion dollars
to build budget electric cars at its Louisville plant. And
as for the Kentucky governor, his faith in the industry
hasn't been shaken.
Speaker 3 (15:27):
What you see is Ford, and what I see is
every other major manufacturer is still continuing to make EV investments.
A lot of people have tried to fight the future,
and no one's ever won. EV's are where the world
is going in terms of automotive The question is the
pace or speed at which it moves. In Kentucky, we
also know what happens if you aren't on the forefront
(15:50):
of change in an industry. I will not let that
happen in the automotive sector.
Speaker 2 (15:55):
Bashir is a Democrat who's betting the farm on EV's
Perhaps it's not surprising to hear him critique Trump's protectionist,
oil and gas heavy economic agenda, but Bashir told Josh
that when the economic consequences of these policies start to
hit Kentucky, he believes both Democrats and Republicans will feel them.
Speaker 1 (16:15):
Democrats, including Governor Vasheer, are still trying to figure out
how to talk about the terror question, in part because
it's not totally clear where their own party will land,
in part because consumers aren't really yet totally seeing it
in the sticker shock. They still see the inflationary numbers
that they've been dealing with for years, and they assume
the prices are just stayed high. But that sticker shock
(16:35):
is going to come, and I think then we'll see
Democrats wrap up their messaging on it.
Speaker 3 (16:40):
I don't think you'd find many voters in America who
said that they went to the polls and voted because
of tariffs.
Speaker 1 (16:46):
What he told them was he was going to.
Speaker 3 (16:48):
Make paying bills at the end of the month a
little bit easier, but he's governed in any way. But
what he promised.
Speaker 1 (16:56):
Trump is already declaring victory, saying we're not seeing inflation
yet so many people, including Governor Bashir, but other industries
and companies are saying it's just not there yet because
the tariffs are changing so frequently, the companies haven't decided
what to do yet, but that eventually some or all
of that is going to get passed on to the consumer,
and that's when this is, I think, going to become
more of a potent political issue.
Speaker 2 (17:22):
This is The Big Take from Bloomberg News. I'm Sarah Holder.
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you liked this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow.
Hosts And Creators
Sarah Holder
Saleha Mohsin
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