August 7, 2025 • 37 mins
Watch Bloomberg Businessweek Daily LIVE every day on YouTube: http://bit.ly/3vTiACF.
President Donald Trump said he had chosen Council of Economic Advisers Chairman Stephen Miran to serve as a Federal Reserve governor.
“He has been with me from the beginning of my Second Term, and his expertise in the World of Economics is unparalleled — He will do an outstanding job,” Trump said in a social media post.
Trump said that Miran, who will need to be confirmed by the US Senate, would only serve the expiring term of Fed Governor Adriana Kugler, which ends in January.
“In the meantime, we will continue to search for a permanent replacement,” Trump said. The Federal Reserve did not immediately respond to a request for comment.
Miran has been critical of the Fed’s track record in recent years. In a March 2024 paper, Miran and Dan Katz, now chief of staff at the Treasury Department, laid out a 24-page plan for reforming the Fed that blames policy errors at the central bank on “groupthink.” It also takes the Fed to task for having expanded into political areas that they argue are beyond its remit.
Today's show features:
- Bloomberg TV and Radio International Economics & Policy Correspondent Mike McKee on Federal Reserve
- Bloomberg News US Semiconductor & Networking Reporter Ian King on President Donald Trump’s criticism of Intel CEO Lip-Bu Tan
- Governor Christopher Waller emerging as a top candidate to serve as the central bank's next chair
- Dr. Gracelin Baskaran, Director of the Critical Minerals Security Program at the Center for Strategic and International Studies, and Bloomberg News Economic Statecraft Reporter Joe Deaux on the rare earth materials market
- Dr. Angela Stent, Senior Fellow at the Brookings Institution, on the latest developments between the US and Russia surrounding the War in Ukraine
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
This is Bloomberg business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business, finance
and tech news as it happens. The Bloomberg Business Weekdaily
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Speaker 3 (00:32):
The Headlines at cross There's been a lot coming when
it comes to the FED. As of late, White House
officials are preparing for President Trump to nominate Council of
Economic Advisor's chairman Stephen Myron to serve as a FED governor.
This is going to a person familiar with the search.
You might recall that the President did say yesterday he
would likely nominate a temporary governor to fill the seat
(00:52):
rather than a successor in waiting for FITZJERJ. Powell. That
seat to be filled is from FED Governor Adrianna Koogler,
who plans to leave that spot on Friday. All right,
running into the studio because the Fed headlines continues our
own Michael McKey, who covers the FED in International policy
and the international economy. Are we surprised with this.
Speaker 4 (01:16):
No, he being chosen not necessarily.
Speaker 5 (01:22):
First of all, he's a top epic economic advisor to
Donald Trump, so he's there in the mix, and the
President has said he wants a temporary replacement there, So
it does make some sense because he's been recently confirmed.
He was confirmed in March as cea chair by the Senate.
So he's got his paperwork in. There's not going to
(01:44):
have you anything he needs to add to it, and
he's probably done all the financial divestitures he would need
to do. That check is done, based background check is done,
They've they've looked at his TikTok and everything else, and
so they could move fairly quickly.
Speaker 4 (01:59):
Now the question is.
Speaker 5 (02:02):
What's the Senate calendar, Like, the Senate doesn't come back
till September. Second, the next Fed meeting is September seventeenth.
There are ten legislative days in there that they could
move on this, and they need to get the paperwork
in from the President. They need to go through the
hearing process, which they could rock it through, but then
(02:25):
they need to take it to the floor, and the
Senate is going to be busy with a lot of
other things, including the fact that there might be a
government shutdown because there's no budget at this point, so
it's a long shot maybe to get him in by
September seventeenth. But the thing to keep in mind is
the way Fed officials have been talking the last forty
eight hours. It may not matter because right now, given
(02:47):
the economic data, they're sort of.
Speaker 3 (02:49):
Say September seventeenth, because that's the next.
Speaker 5 (02:52):
They're teeing up a rate cut. Then I think already
if the data continue the way it's going now with
a relatively weak August payrolls report, and we get CPIPPI
next week, and then at the end of the month
the PCE, and if those show inflation rising a bit
but not too much, then you'd have probably have a
(03:14):
rate cut in train.
Speaker 6 (03:15):
So we're talking about Myron here and how much impact
could really happen here given the fact that Kogler's term
was at the expire at the end of January twenty
twenty six.
Speaker 5 (03:24):
Yeah, part of this is going to be how the
president presents this. If Myron's going to be a long
term member of the Fed, then people will pay a
lot more attention if he's just holding a seat for
four months and the President's going to appoint somebody else.
Then there's no reason to pay any attention to him,
because the Fed's going to be doing what the President
wants anyway, probably, and so he's not going to add
(03:46):
anything to the debate. But he has been a FED critic.
He thinks that they have been too slow. He is
also remember the author of the Mara a Lago Accord,
idea that would see the US try to weaken its
dollar and get people to give up their.
Speaker 4 (04:06):
Treasuries, foreign countries to give up their treasures.
Speaker 3 (04:09):
We talked about it. We kept like we couldn't stop
talking about it.
Speaker 5 (04:11):
Yeah, so there's a lot there that the markets could
focus on if they wanted to. And as I say,
it would depend on how long he's going to be
on the FED, what kind of influence he would have
if the Fed's gonna If he's done by January and
the Fed's cutting rates, it.
Speaker 3 (04:29):
Just done, President Trump, posting on Social it is my
great honor to announce that I've chosen doctor Stephen Stephen Myron,
current Chair of the Council of Economic Advisors, to serve
in the just vacated seat on the Federal Reserve Board
until January thirty first, twenty twenty six. In the meantime,
we will continue to search for a permanent replacement. Stephen
has a PhD in economics from Harvard University and serve
(04:51):
a distinction in my first administration. He has been with
me from the beginning of my second term and his
expertise in the world of economics is unparalleled. He will
do an ounce standing job. Congratulations Steven, Well there's your answer.
Speaker 4 (05:03):
Well, there's your answery.
Speaker 5 (05:04):
We don't have to make it speculation anymore. It's not if.
Speaker 4 (05:07):
Now.
Speaker 5 (05:08):
The important thing to remember is you can't do a
recess appointment to the FED.
Speaker 4 (05:12):
So he does have to be confirmed.
Speaker 5 (05:13):
They do will have to go through the process, he
will have to resign as the CEA chair. And if
he doesn't stay on at the FED and they want
him to go back, yeah, then he's got to be reconfirmed.
So it's a bit of a pain in the butt
for him to go back to go back to the
CEA because the Federal Reserve Act requires that a member
of the FED.
Speaker 4 (05:34):
Board have no other job.
Speaker 5 (05:35):
So this isn't going to be like a Sean Duffy
or a Marco Rubio thing where the President just gives
them job after job because he hasn't got somebody else
to fill them.
Speaker 3 (05:45):
So we shouldn't make the assumption that he'll go back
to that.
Speaker 4 (05:48):
I would think not.
Speaker 5 (05:49):
I mean, I wouldn't want to take a job for
four months, and I don't. My guess is that the
pay level is about the same. But you know, to
go through the Senate confirmation process for four months, if
that right, if you got four months and then to
have to go back and do it for the CEA again. See,
(06:12):
if the President decides to nominate him for another fourteen
year term, they could put him through at both times at.
Speaker 4 (06:22):
Pretty much at the same time.
Speaker 5 (06:25):
Or you know, he wouldn't have to really do much
to get the second the second confirmation, They just do
that in the background.
Speaker 6 (06:33):
I mean, does this bring a certain layer of certainty
here looking at markets that are pairing just the touch here,
But I mean, of course we still have the idea
of who's going to be fed chair.
Speaker 1 (06:43):
Potentially, yes, But the story that we reported today and
again this is Seleiah Mosen's scoops that Chris Waller would
be selected.
Speaker 5 (06:53):
It fits in the sense that you don't know whether
Pol's going to leave the board. Now, choosing Waller might
help Powell leave the board because he would feel better
about the way the FED was going to go afterwards.
Speaker 4 (07:07):
But he's already on the board, so you don't have
to have an open seat.
Speaker 5 (07:11):
You can leave my ren in there and then you
can promote Waller and it all just works together.
Speaker 4 (07:17):
So it does make sense, just real quickly.
Speaker 3 (07:21):
Does this make Jackson Hall all a lot more interesting
just quickly, which is coming up at the end of
the month.
Speaker 4 (07:27):
Yeah, it's going to make it more interesting.
Speaker 5 (07:28):
But it also may mean that the Jay Powell doesn't
want to say a whole lot because there's all these
balls in the air. But if the Fed's made it
clear they're going to if everybody else speaking on the
FED makes it clear they're going to cut rates, then
he doesn't have to prep the markets or anything.
Speaker 3 (07:43):
You know, you can't go home because the FED headlines
just keep cutting.
Speaker 4 (07:46):
No, I've moved on there.
Speaker 5 (07:47):
Yes, as Ariel said, like George Costanza on Seinfeld brought
me some blankets.
Speaker 3 (07:55):
I don't know, a huggy or what is it called
the buzzy snuggy? Yeah, you're almost there to here, I
know whatever they're called, all right, Mike mckaie, thank you
so much.
Speaker 2 (08:02):
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Speaker 3 (08:16):
All right, semiconductors definitely on our watch again for a
few reasons. First up, yesterday, President Trump mentioned amping up
tariffs on the space.
Speaker 7 (08:26):
We'll be putting a terraphone of approximately one hundred percent
on chips and semiconductors. But if you're building in the
United States of America, there's no charge, even though you're
building and you're not producing yet in terms of the
big numbers of jobs and all of the things that
you're building. If you're building, there will be no charges.
(08:49):
All right.
Speaker 3 (08:49):
That, of course, was President Trump yesterday. And then this morning,
the President called on the chief executive officer of Intel
Lit Bhutan to resign because of what he called conflicts
of interest, adding to the challenges for a company that
is supposed to anchor restoration of the US semiconductor industry.
Here's what the President put out. He said, the CEO
of Intel is highly conflicted and must resign immediately. He
(09:12):
was doing this, of course, on truth Social earlier today.
He went on to say, there is no other solution
to this problem. Thank you for your attention to this problem.
Speaker 5 (09:20):
Now.
Speaker 3 (09:20):
This comes after Republican Senator Tom Cotton asked the chairman
of Intel's board this week to answer questions about Intel
CEO ties to China, specifically including investments in the country,
semiconductor companies and others with connections to the country's military.
As we mentioned, there's a fair amount of stuff going on,
so let's get to it. A look at the Intel CEO.
(09:42):
We wanted to talk to someone who has followed this
company for a long time, knows the current challenges and
knows the executives certainly in the space with us. As
Bloomberg News US semiconductor networking reporter Ian King, he's out
there in our San Francisco studio. First of all, Ian,
thank you so much. You know this company so well,
you know what they're facing. You un understand the executives
(10:02):
who are there. I mean Intel, we know is a
critical piece of Washington's efforts to rebuild the domestic semiconductor industry.
I want to start with you, first of all, and
we ask you this a lot. I mean, Intel, even
with its struggles, is still a very important company, certainly
to the United States.
Speaker 4 (10:23):
Yeah.
Speaker 8 (10:23):
Absolutely. If you want this country to be domestically capable
of producing technology that leads this industry, the vehicle has
to be Intel. There's no other company that's even close.
Yes they are not what they were. Yes they have stumbled,
but they're still the best if you believe in the
(10:44):
necessity of advanced semiconductive manufacturing in this country.
Speaker 6 (10:48):
So how are you perceiving this new added pressure here?
I mean, has a CEO had enough time here to
really turn around and really show a turnaround story here?
Speaker 9 (10:58):
Yeah?
Speaker 8 (10:58):
I mean I think what you have to do is
look at what has changed. I think that you've gone
to the heart of the matter there. He's only been
in the job four months. Two years ago, the House
Committee on China asked him questions about his history of
investments in China. So none of this kind of association
(11:19):
with China is new. That that's just not new at all.
What is new is that Intel recently during earnings, cast
doubts on whether it'll build the plants in Ohio that
everybody's looking at as a cornerstone of chip manufacturing in
the US that it will be very measured in its
introduction of new new chip technology. That has obviously created
(11:40):
an undermining of this story of bringing back chip manufacturing
to the US and sort of making the US great
again in that particular area. So clearly that has caught
the attention of politicians, and clearly they're not happy with
the direction that that's going in. And obviously we're now
seeing some kind of a backlash, and that's focusing on
(12:01):
the CEO of.
Speaker 3 (12:01):
Intel well, and I think it's kind of interesting Ian
if this comes one day after we saw Apple CEO
Tim Cook in the Oval Office with the President talking
about investments in the US, and seemingly at least some
are weighing in on this and saying this is a
way of getting some of the heat off of Apple, Right,
Is this potentially about the Intel CEO kind of not
(12:23):
kissing the ring here?
Speaker 8 (12:26):
Yeah. I mean we've seen Jensen Wang from video, We've
seen Lisa Sue from AMD, and pretty much all of
the chip CEOs at some point making an appearance in
the White House or at various events where the President
or senior administration adon officials have been so that's clearly
been a policy that has you know, blossomed, shall we say,
(12:46):
in the chip industry. We have not seen Bhutan make
any appearances at any of these type of events. But
to be fair to him, he's only just got the
job and he's apparently taking twenty odd meetings a day
trying to figure out what the heck is wrong with
Intel and how to fix it. So you know, you
pick your poison here in terms of what he should.
Speaker 3 (13:04):
Be doing right and as investors, you probably want him
focusing on doing what he needs to do at the company.
The stock that we should point out is down about
three point seven percent today in down just sh I
have two percent year to date here. If the president, though,
is coming at you hard, Ian, what does that do
to your turnaround efforts? Does it kind of spread you
a little bit?
Speaker 8 (13:24):
I mean, that's what we need to know. We haven't
seen a response to this latest message from the president
from Intel yet. We've been trying hard to get one,
and we haven't seen one up here anywhere else. So
you have to believe that that means that they are
thinking very carefully and in a very measured way about
how they respond to this, We've seen conjecture, well, is
this the end for lip Boutwan? What does this mean
(13:47):
for Intel's turnaround all out there? And clearly more uncertainty
is not what Intel needs right now. We need signs
that they're moving forward and this clearly does not help.
Speaker 6 (13:58):
So earlier on we actually had Republican Senator Tom Cotton
saying adding pressure, saying, the chairman of Intel's board earlier
this week, he was asking questions about tans ties to China,
and of course we know that the US is really
focused on those national security concerns. Of course, Intel did
say that they argumented to national security, but can you
just speak to what some of those barriers are and
(14:19):
what some of those headwinds Essentially, what are the flags
that a lot of this industry is dealing with as
it pertains to national security here?
Speaker 8 (14:26):
Yeah, I mean it's semiconductors have become the absolute central
tool that the US is using in its increasing geopolitical
rivalry with China. Semiconductors are considered because they are absolutely
essential to technology that you would use to develop either
economic strength or military strength, and that has only increased
(14:48):
in focus with the emergence of AI as a viable
tool for any number of different uses, including military. So
depriving China of semi advanced semiconductors or the ability to
develop them themselves has become a number one priority, or
very close to the top priority. And you know, for
this administration, for the previous one. So anything that talks
(15:11):
to that is a very much a political hot potato.
And you know, we'll come acutely into focus and be
used by politicians depending upon what it is they want
to achieve.
Speaker 3 (15:21):
Yeah, and a hot potato sometimes conflicting signals is what
some might say in terms of protecting this industry here
in the US and also putting some pressure. Ian, thank
you so much. Busy day for you, and so glad
we could get some time with him. Ian King. He's
Bloomberg News US semi conductor networking reporter.
Speaker 2 (15:37):
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Speaker 3 (15:54):
All right, Well this week GM General Motors signed a
deal with Texas based Novian Magnetics care rare earth magnets
for its full size pickup trucks and suv So this
is the third domestic supply contract the automaker has signed
related to the critical trade dominated by China. You might
recalled last month Applestruck a five hundred million dollar deal
to buy rare earth minerals from MP Materials. That's the
(16:16):
US producer that secured backing from the Pedagon. That company,
by the way, reporting after the close. We're talking about
rare Earth's a lot and with good reason, especially considering
the world's dependence on China for rare earth permanent magnets.
And we know that this has been certainly part of
the trade conflict between the US and China. So let's
get to it a great roundtable with us. Back with
(16:36):
us is doctor Graycelyn baskerin. She's director of the Critical
Mineral Security Program at the Center for Strategic and International Studies.
She's out there in our DC news bureau. Also here
in studio is Bloomberg News Economic Statecraft reporter Jodo, who
understands and is constantly explaining the space to us here
at Bloomberg he's right here in our studio joining Nora
and myself. Hello everybody, Doctor Baskrin. Great to have you
(16:59):
here again, and you know, remind the world just why
this is so important. Who really has them? What the
US wanted is the US making the right moves to
expand their presence when it comes to rare earths.
Speaker 9 (17:14):
Thanks Carol, it's great to be back.
Speaker 10 (17:15):
So the first and foremost is in April this year,
China rolled out restrictions on heavy rare earth and what
this did is put a choke hold on the industry
because all of a sudden we had a supply chain disruption,
and the automotive industry was particularly hard hit. Within eight weeks,
we saw that Ford actually had to pause production of
its Explorer model owing to these supply shortages.
Speaker 9 (17:37):
What the US did.
Speaker 10 (17:38):
In response was a full out effort to warp speed
access to these rare earths and these magnets. Most recently,
we saw the Department of Defense make a four hundred
dollar four hundred million dollar investment in MP Materials, essentially
putting the US government as the biggest shareholder to accelerate
production both of the rare earths and the permanent magnets.
Speaker 3 (17:58):
Yeah, we've talked about that, which was kind got all
of us like, wait a minute, is this now a
state owned entity? Joe, come on in on this.
Speaker 11 (18:04):
Yeah, I mean this, this investment that we've talked about
now for a few weeks, right, was a signal to
the market.
Speaker 4 (18:13):
I think that was kind of the main thing.
Speaker 11 (18:14):
It was a signal to the market from the Trump administration,
from the Defense Department that the United States was serious
about a mind to magnet supply chain. They were also
signaling the real concern that the United States has over
the fact that China has put in these export controls.
As Grayson points out, we'd seen rare earth export controls
(18:37):
starting back in twenty twenty three. The difference maker here
was the magnets, and that's why companies like GM came
out and publicly said the magnets are a problem. We're
short and we're having this stop production.
Speaker 4 (18:48):
So we now have.
Speaker 11 (18:49):
A situation where MP Materials has been given a four
hundred million dollar investment equity investment by the DoD loan
financing to become a magnet producer. This is a minor
so problem solved and problem I'm just being so right,
exactly problem right right, And actually your that sarcasm is
is very much the conversation I have heard constantly now
(19:13):
for the past few weeks in the market, which is
in anything in manufacturing. Manufacturing is hard because just because
you say you're going to build a plant doesn't mean
the plant will just come together and work straight out
of the gates. And I think there are questions among
many in the market of this mining company, can they
figure out how to produce so many magnets at scale
right in the time needed.
Speaker 3 (19:32):
So as listen, you brought us Gracelynd, you ask her something.
Speaker 11 (19:36):
So my question is, I mean, Grayson, you're sitting here
now weeks later after this announcement, what do you.
Speaker 10 (19:42):
Think we're giving all the right signals and from both
the supply and the demand side intervention.
Speaker 9 (19:48):
You know, a lot of.
Speaker 10 (19:49):
What this NP Materials deal with Department of Defense was
was it was supply side. It was saying we need
more rare earths and we need permanent magnets. What this
new big announcement from General Motors is really telling us
they're also giving the demand signal by agreeing to off
take Joe. We've talked about this before, but one of
the difficulties is the price environment.
Speaker 9 (20:08):
Prices are generally pretty low.
Speaker 10 (20:10):
By stimulating demand and showing that there is an off taker,
what we're really saying is that we are meeting a
market need and that's a really positive signal. General Motors
as a whole has had first mover advantage on a
number of deals related to this. We saw them with
the MP Materials deal. Now we see it with the
Novion deal for the magnet. So really it's showing that
(20:31):
it is a full mind to magnet effort. And if
we want to reduce our reliance on China.
Speaker 11 (20:35):
Do you think now that we're showing there's commercial market
for this commercial demand as you're saying, are we now
in a show me moment, like prove it that you
can actually deliver these magnets.
Speaker 9 (20:47):
Absolutely.
Speaker 10 (20:47):
We've already seen that Novan Magnet is already making their
first magnets and they were delivered last month, which is
a really great first step. Now, what we need to
make sure that they can do, along with some of
these other magnet efforts like MP material second production facility,
is to make sure that we can ramp up.
Speaker 9 (21:03):
At a level that is quick enough.
Speaker 10 (21:06):
Because we know that whatever trade agreement is reached with
China is still transitory and time bound, and we could
have future disruption. So we now need to make sure
that we can ramp up fast enough.
Speaker 3 (21:16):
Can we? In your view, as Joe said, none of
this is easy.
Speaker 10 (21:24):
Yeah, I mean I think that there is enough market
pressure to do it. You know, I was always reminded
that during the COVID nineteen pandemic, we developed a vaccine
for a virus that we didn't know existed in less
than a year.
Speaker 9 (21:34):
America's strong suit is.
Speaker 10 (21:36):
Innovation when under pressure, and I think what we've seen
from the amount of government support but also the way
that we have embraced that challenge from a private sector
point of view, that we are well on our way
to being able to do that.
Speaker 6 (21:48):
I mean, China controls over sixty percent of the global
rare earth mining and more than eighty five percent of
process and capacity. And of course we know that the
US really sees rare earth independence as essentially a security concern.
How does the US fit into all this? I know
you mentioned that you do think that we have a
stake in the game, but let me know to what degree.
Speaker 9 (22:12):
So I want to take you back to actually two
thousand and seven.
Speaker 10 (22:14):
In two thousand and eight, quickly when our auto industry
started collapsing and we saw significant bailouts to the automotive industry.
Given the impact on jobs and investment in a really
important sector to the US economy, we have skin in
the game to ensure that our automotive supply chain does
not have disruptions because we know what the economic consequences,
not just in the Midwest, but to the entire country
(22:36):
that relies on it.
Speaker 9 (22:37):
So when we think about it through the.
Speaker 10 (22:39):
Lens of the economic health of our country as well
as importantly national security, given that magnets are used in
a variety of defense technologies, we have every incentive to
get this right.
Speaker 11 (22:50):
Graceland, what's your biggest concern though moving forward? I know
you're optimistic, but what do you think is going to
be the biggest hurdle actually making this happen?
Speaker 9 (22:59):
Can we do it fast enough?
Speaker 10 (23:00):
I mean a lot of these things are very very
small scale. You know, in MP materials first year, they're
actually only going to make one percent of the amount
of permanent magnets China made back in twenty eighteen, So
the ramp up will take time. And given the risk
to further disruptions, the big question is can we do
it fast enough? And that's really difficult to see if
(23:22):
to be able to say that now we're.
Speaker 3 (23:24):
Talking about Graceland Basker and director of the Critical Mineral
Security Program at the Center for Strategic and International Studies
out there in our Washington News Bureau, our own Jodo
is also with us, with Nora and myself. Hey, one
of the things Gracelyn I wanted to ask you is
how important though is this market for China and their economy?
And if the US is backing off, who does China
(23:46):
then start talking with to do deals? And are we
starting to see signs of that.
Speaker 10 (23:51):
China's economy is already struggling. We saw this past year
they had the highest levels of deflation in modern Chinese history.
Economic growth has really slowed. IMF has actually flagged a
number of these trade risks is a really big economic
risk that China is facing any time you have a
new players coming on, because remember it's not just the
United States. We have countries like Saudi Arabia, Australia, and
(24:15):
Malaysia are also going to bring facilities online.
Speaker 9 (24:18):
In the next couple of years.
Speaker 10 (24:19):
This is a significant risk to China's future because they
relied on supplying the entire global economy until this far.
Speaker 3 (24:26):
So could we have a glut in a few years?
I mean, I know they're called rare earth and we've
already debunked that, but could we have a glut essentially
in a few years or impossible?
Speaker 9 (24:36):
That's a that's a real risk we have.
Speaker 10 (24:38):
The reason a lot of mineral prices are actually quite low,
like lithium is down eighty five percent in three years,
nickel is down about eighty percent in three years, is
because there's oversupply on the market. Oversupply is a real
risk and one that the market hasn't really conditioned itself
to understanding. If we get to a point where we
have far more than we need and prices get pushed
(24:59):
down ether.
Speaker 6 (25:01):
Yeah, talk to me about what this means for a
lot of those technology companies. When we think about rare
earth materials, how does this impact something like the likes
of Apple, for instance, and iPhones.
Speaker 10 (25:11):
So, I mean, technology firms need rare earths across the board,
and that's part of why Apple signed this deal, and
increasingly companies are willing to pay a premium to not
be reliant on China because they saw that manufacturing could
come to a grinding halt in the instance that China
wants to roll out these restrictions. So generally, for tech firms,
they'd rather have too many options to buy from rather
(25:35):
than not enough grace.
Speaker 11 (25:37):
And I think one of the questions I have is,
when you're looking out two years, three years from now,
where's the investor class on this space? Do you feel like, yeah, great,
we're seeing some off take agreements. There's real commercial interests,
But at some point the rubber's going to meet the road,
and the question will be where the investor is going
to sit.
Speaker 10 (25:59):
The investors are really going to be a variety a
couple of different sources. So given that rare erth and
permanent magnets are used in virtually ever every sector of
the economy, a lot of these investments are going to
be made by off takers. So we have seen already
general motors really probably an Apple being really signs of
what is to come going forward. We expect to kind
(26:20):
of see these deals being cut across the economy, particularly
with President Trump's recent announcements, for example, on semiconductor tariffs, right,
which is really an effort to incentivize sourcing here in America.
So when you kind of add up the aggregation of
efforts ranging from tariffs to supply side intervention to stockpiling
which was part of the New Budget Act, it's really
(26:41):
a full throttled effort to ensure that we are sourcing
from America for American companies.
Speaker 3 (26:47):
Hey, last question, Grace, So before we wrap, we do
have MPEd Materials reporting after the closing bill. As I mentioned,
stocks up almost three hundred and fifty percent. Here to date,
it's up another four point three percent in today's session.
What are you watching for? And just got about thirty seconds.
Speaker 10 (27:03):
I'm looking to see how fast MP Materials can deliver.
The amount of support MP Materials has gotten is absolutely unprecedented,
and now they have the significant task of being able
to scale up quick enough to meet both our national
security and economic security goals. So I want to know
how fast they're going to deliver on the very high
(27:23):
expectations that the US government has placed before them, as
well as industry in this country.
Speaker 3 (27:28):
Okay, whenever I talk with you, I always want to
just take a class on wear earths. But you have
to be the professor. I'm just going to put it
out there, doctor Gracelynd Basker, and thank you so much,
Director of the Critical Mineral Security Program at the Center
for Strategic and International Studies, and same thing. I'll take
a class with you anytime. Joe doo He is Bloomberg
News Economic stakecraft reporter, a must read here at Bloomberg.
Speaker 2 (27:49):
You are listening to the Bloomberg Business Weekdaily podcast. Catch
us live weekday afternoons from two to five pm Eastern.
Listen on Apple CarPlay and Android Auto with the Bloomberg
Business or watch us Live on YouTube.
Speaker 3 (28:03):
Well, the Kremlin said President Vladimir Putin and President Donald
Trump are finalizing details for a meeting within the next
few days, even as the White House insisted that the
Russian leader still needed to agree to meet with Ukrainian
President Vladimir Zelenski now from the Oval Office. Late yesterday,
President Trump commented on a possible meeting with the Russian leader.
Speaker 7 (28:23):
We had some very good talks with President Putin today
and there's a very good chance that we could be
ending the ending the round, ending the end of that road.
Road was long and continues to be long, but there's
a good chance that there will be a meeting very
soon with you. Excuse me, how both do you think
(28:43):
you are to some kind of well, look, I don't
want to say I've been disappointed before.
Speaker 3 (28:48):
All right. That, of course was President Trump yesterday from
the Oval Office. Back to help us understand what may
be going on behind the scenes, especially when it comes
to President Putin. Is doctor Angelas Stent. Delighted to have
her back with us. She's senior fellow at the Brookings Institution,
the author of Putin's World, Russia Against the West and
With the Rest, former National Intelligence Officer for Russia and
Eurasia at the National Intelligence Council, and she served in
(29:11):
the Office of Policy Planning at the US Department of State.
She joins us on this Thursday from Nantucket. Doctor Stent,
nice to have you here with Nora and myself. The
President said that we could be ending the ending the round.
He said, it could be an end to that road.
Do you agree that we are close to an end
(29:31):
of the war between Russia and Ukraine.
Speaker 12 (29:34):
I do not agree with that. I mean, I think
it'll be good if the two leaders meet, but we
know that Putin really doesn't have any intention of agreeing
to a cease fire or really stopping the war until
he's sure that he gets all the concessions from Ukraine
that he wants, and unless something occurred in this discussion
between mister Whitcoff and Putin that we don't know about,
(29:56):
we don't know the content yet. I don't think that
Putin's going to be get that yet. So this will
be the first step, hopefully towards something that could result
in ending the war, but that will be a very
long time ahead.
Speaker 6 (30:10):
Can you put into context for us just how complicated
and exhaustive ceasefire negotiations could get.
Speaker 12 (30:16):
Well, First of all, the US side with the Europeans
and the Ukrainians would like to have a ceasefire agreed
upon first, and then get into the details of what
a resolution or a negotiated settlement to this war would
be like. Putin has insisted that the ceasefire will only
come when quote unquote, the root causes of this conflict
(30:38):
are addressed, And the root causes for Russia are that
it wants to subordinate Ukraine, and it wants to have
guarantees that NATO won't expand anymore and that its borders
will be secure from its definition. So I think a
ceasefire itself is complicated to negotiate because you have to
(30:59):
figure out who's going to monitor it of the what
line do you then say the ceasefire is because the
Russians are insisting that the Ukrainians recognize the incorporation of
four territories into Russia, none of which Russia fully controls.
The Ukrainians control part of that territory, so that in
itself would be very complicated. But I think the more
(31:20):
serious question is whether the Russians will be willing to
talk about a ceasefire before they get the kind of
guarantees they're asking from the United States about Ukraine's future.
Speaker 6 (31:31):
Angel I whant I traditionally think about a summit. I
usually assume that negotiations and discussions have already happened before
your meeting. It's more or less a formality purpose. Are
we working backwards here?
Speaker 12 (31:42):
Yeah? I think this is a very different situation. I mean, normally,
as you say US Russian summits, a lot goes into
the planning, most of the stuffs agreed upon before the
leaders meet, that communicates and everything. Clearly there have been
some negotiations going on behind the scenes. We're not informed
about them. But this would seem to be a very
quick timetable for a summit. And therefore, even though I
(32:07):
think President Trump said it might be very soon, I'm
not sure how soon it will be. And we even
the Russians now say that it's the US side that
wants the summit. The US side said it's the Russians
that asked for the summit. So list in itself would
be quite unusual, unless again, something was agreed upon between
mister Woodcoffin President Putin that we don't know about.
Speaker 3 (32:29):
Do you have a clear tell on the relationship between
President Trump and President Putin right now? Because increasingly and
most recently we have seen the White House the President
specifically seem to be putting more pressure on Russia and
being tougher with Russia and President Putin. But what you
read on that relationship with Us, which up to now
(32:50):
we've seen President Trump, I should say, talk often in
his first term and certainly a second term about how
much he admired the Russian president.
Speaker 12 (32:58):
Yes, I mean, I think I'm till recently he morral
has only had praise for President Putin. He said that
they had these great phone calls, and it's only recently
that he said, well, actually the phone calls were great,
but then immediately afterwards, the Russians would intensify their bombing
on civilian targets and infrastructure in Ukraine. So I think
President Trump is on the one hand, I think increasingly
(33:20):
impatient with President Putin and realizing that the Russian leader
says one thing and then doesn't do anything about it.
On the other hand, he's clearly not willing to go
full out and condemn Russia and put much more pressure
on it. He hasn't imposed sanctions on more sanctions on Russia,
although he could still do that tomorrow, And he still
hasn't agreed that the US will supply Ukraine with any
(33:44):
of the weapons that it needs to push back against Russia,
although he has said that our European allies in fact
are purchasing and will purchase weapons from the US that
they will then give Ukraine. So I think you have
to listen to what he says, but then you also
have to see what he does, and clearly Putin wants
this meeting with him to preemp President Trump from doing
(34:06):
anything else that would put more pressure on Russia.
Speaker 3 (34:09):
I mean, it sounds to me like this is going
to be difficult. If the US is saying the Ukrainian
president President Zelenski needs to be there, that's not likely.
It sounds like Russia is not going to give in
and give any territories back. I mean, it sounds like
this will never happen.
Speaker 12 (34:28):
I mean, I mean this is a delaying tactic on
Putin's pot. Okay, quite, he has no intention of meeting
with President Zelenski. He doesn't consider President Zelenski his equal.
He wants to meet with President Trump. And you know,
none of the European leaders are going to be president
this meeting either, even though President Trump did have a
phone call with him after the Whitcough meeting, and he
(34:49):
is I think keeping them informed. So I would I
would be very surprised if anything emerges from this meeting
other than you know, they had a conversation and they're
going to be future convass stations and this process is
going to continue.
Speaker 3 (35:02):
Do we need to be worried at all about President
Putin's health here? I mean, there's been some reports out there.
I'm looking at Google, but we've had some talk in
the newsroom. We have a viewer asking about that, I mean,
I don't know. Do we have a clear read on
that as well?
Speaker 4 (35:18):
We don't.
Speaker 12 (35:19):
I mean, there were roomors a number of years ago,
you know, even before the full scale invasion of Ukraine,
and that afterwards, that he was sick, that he you know,
there was speculation about what different diseases he had. There
is still speculation about that. We don't but we don't
have too much concrete information about it. And he appears
(35:39):
to be quite vigorous, he goes to meetings, he shows up,
so I would say that we don't have a clear
reading of this.
Speaker 6 (35:49):
What's the nature of the United States support for Ukraine
at this stage? If you think back to the previous administration,
there were a lot of discussions about how much we
were giving in terms of financial support to Ukraine.
Speaker 12 (35:59):
So the moment, there is still money actually left over
from the Biden administration that hasn't been fully dispersed to Ukraine,
but there have been no new commitments under the Trump administration.
There are I think a majority of Senators, including many Republicans,
who would like to support Ukraine more, but of course
the magabase is very much against that, and that is
(36:22):
why President Trump has said, you know, we're not going
to supply any more money or weapons for free if
the Ukrainians going to buy the weapons they can, and
this is why the Europeans are doing this. So there
is not much support and there's no new support going
to Ukraine from the United States.
Speaker 3 (36:39):
Angela, just quickly twenty five seconds. Are sanctions the toughest
tool the US can use on Russia and President Putin
to get him to the table.
Speaker 12 (36:50):
Now, I think the tough I mean that the sanctions
are important, but the toughest tool would be to supply
Ukraine with all of the weapons it needs to really
push back against the Russian. The Russians on making very
much progress in Ukraine. They're taking little bits of territory
every week. That losing still thousands of people.
Speaker 3 (37:09):
All right, Always fun and always informative when we check
in with you, Doctor Angela stant, Senior fellow at the
Brooking Constitution, author of Putin's World.
Speaker 2 (37:17):
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(37:38):
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Speaker 2 (00:08):
This is Bloomberg business Week Daily reporting from the magazine
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Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 3 (00:32):
The Headlines at cross There's been a lot coming when
it comes to the FED. As of late, White House
officials are preparing for President Trump to nominate Council of
Economic Advisor's chairman Stephen Myron to serve as a FED governor.
This is going to a person familiar with the search.
You might recall that the President did say yesterday he
would likely nominate a temporary governor to fill the seat
(00:52):
rather than a successor in waiting for FITZJERJ. Powell. That
seat to be filled is from FED Governor Adrianna Koogler,
who plans to leave that spot on Friday. All right,
running into the studio because the Fed headlines continues our
own Michael McKey, who covers the FED in International policy
and the international economy. Are we surprised with this.
Speaker 4 (01:16):
No, he being chosen not necessarily.
Speaker 5 (01:22):
First of all, he's a top epic economic advisor to
Donald Trump, so he's there in the mix, and the
President has said he wants a temporary replacement there, So
it does make some sense because he's been recently confirmed.
He was confirmed in March as cea chair by the Senate.
So he's got his paperwork in. There's not going to
(01:44):
have you anything he needs to add to it, and
he's probably done all the financial divestitures he would need
to do. That check is done, based background check is done,
They've they've looked at his TikTok and everything else, and
so they could move fairly quickly.
Speaker 4 (01:59):
Now the question is.
Speaker 5 (02:02):
What's the Senate calendar, Like, the Senate doesn't come back
till September. Second, the next Fed meeting is September seventeenth.
There are ten legislative days in there that they could
move on this, and they need to get the paperwork
in from the President. They need to go through the
hearing process, which they could rock it through, but then
(02:25):
they need to take it to the floor, and the
Senate is going to be busy with a lot of
other things, including the fact that there might be a
government shutdown because there's no budget at this point, so
it's a long shot maybe to get him in by
September seventeenth. But the thing to keep in mind is
the way Fed officials have been talking the last forty
eight hours. It may not matter because right now, given
(02:47):
the economic data, they're sort of.
Speaker 3 (02:49):
Say September seventeenth, because that's the next.
Speaker 5 (02:52):
They're teeing up a rate cut. Then I think already
if the data continue the way it's going now with
a relatively weak August payrolls report, and we get CPIPPI
next week, and then at the end of the month
the PCE, and if those show inflation rising a bit
but not too much, then you'd have probably have a
(03:14):
rate cut in train.
Speaker 6 (03:15):
So we're talking about Myron here and how much impact
could really happen here given the fact that Kogler's term
was at the expire at the end of January twenty
twenty six.
Speaker 5 (03:24):
Yeah, part of this is going to be how the
president presents this. If Myron's going to be a long
term member of the Fed, then people will pay a
lot more attention if he's just holding a seat for
four months and the President's going to appoint somebody else.
Then there's no reason to pay any attention to him,
because the Fed's going to be doing what the President
wants anyway, probably, and so he's not going to add
(03:46):
anything to the debate. But he has been a FED critic.
He thinks that they have been too slow. He is
also remember the author of the Mara a Lago Accord,
idea that would see the US try to weaken its
dollar and get people to give up their.
Speaker 4 (04:06):
Treasuries, foreign countries to give up their treasures.
Speaker 3 (04:09):
We talked about it. We kept like we couldn't stop
talking about it.
Speaker 5 (04:11):
Yeah, so there's a lot there that the markets could
focus on if they wanted to. And as I say,
it would depend on how long he's going to be
on the FED, what kind of influence he would have
if the Fed's gonna If he's done by January and
the Fed's cutting rates, it.
Speaker 3 (04:29):
Just done, President Trump, posting on Social it is my
great honor to announce that I've chosen doctor Stephen Stephen Myron,
current Chair of the Council of Economic Advisors, to serve
in the just vacated seat on the Federal Reserve Board
until January thirty first, twenty twenty six. In the meantime,
we will continue to search for a permanent replacement. Stephen
has a PhD in economics from Harvard University and serve
(04:51):
a distinction in my first administration. He has been with
me from the beginning of my second term and his
expertise in the world of economics is unparalleled. He will
do an ounce standing job. Congratulations Steven, Well there's your answer.
Speaker 4 (05:03):
Well, there's your answery.
Speaker 5 (05:04):
We don't have to make it speculation anymore. It's not if.
Speaker 4 (05:07):
Now.
Speaker 5 (05:08):
The important thing to remember is you can't do a
recess appointment to the FED.
Speaker 4 (05:12):
So he does have to be confirmed.
Speaker 5 (05:13):
They do will have to go through the process, he
will have to resign as the CEA chair. And if
he doesn't stay on at the FED and they want
him to go back, yeah, then he's got to be reconfirmed.
So it's a bit of a pain in the butt
for him to go back to go back to the
CEA because the Federal Reserve Act requires that a member
of the FED.
Speaker 4 (05:34):
Board have no other job.
Speaker 5 (05:35):
So this isn't going to be like a Sean Duffy
or a Marco Rubio thing where the President just gives
them job after job because he hasn't got somebody else
to fill them.
Speaker 3 (05:45):
So we shouldn't make the assumption that he'll go back
to that.
Speaker 4 (05:48):
I would think not.
Speaker 5 (05:49):
I mean, I wouldn't want to take a job for
four months, and I don't. My guess is that the
pay level is about the same. But you know, to
go through the Senate confirmation process for four months, if
that right, if you got four months and then to
have to go back and do it for the CEA again. See,
(06:12):
if the President decides to nominate him for another fourteen
year term, they could put him through at both times at.
Speaker 4 (06:22):
Pretty much at the same time.
Speaker 5 (06:25):
Or you know, he wouldn't have to really do much
to get the second the second confirmation, They just do
that in the background.
Speaker 6 (06:33):
I mean, does this bring a certain layer of certainty
here looking at markets that are pairing just the touch here,
But I mean, of course we still have the idea
of who's going to be fed chair.
Speaker 1 (06:43):
Potentially, yes, But the story that we reported today and
again this is Seleiah Mosen's scoops that Chris Waller would
be selected.
Speaker 5 (06:53):
It fits in the sense that you don't know whether
Pol's going to leave the board. Now, choosing Waller might
help Powell leave the board because he would feel better
about the way the FED was going to go afterwards.
Speaker 4 (07:07):
But he's already on the board, so you don't have
to have an open seat.
Speaker 5 (07:11):
You can leave my ren in there and then you
can promote Waller and it all just works together.
Speaker 4 (07:17):
So it does make sense, just real quickly.
Speaker 3 (07:21):
Does this make Jackson Hall all a lot more interesting
just quickly, which is coming up at the end of
the month.
Speaker 4 (07:27):
Yeah, it's going to make it more interesting.
Speaker 5 (07:28):
But it also may mean that the Jay Powell doesn't
want to say a whole lot because there's all these
balls in the air. But if the Fed's made it
clear they're going to if everybody else speaking on the
FED makes it clear they're going to cut rates, then
he doesn't have to prep the markets or anything.
Speaker 3 (07:43):
You know, you can't go home because the FED headlines
just keep cutting.
Speaker 4 (07:46):
No, I've moved on there.
Speaker 5 (07:47):
Yes, as Ariel said, like George Costanza on Seinfeld brought
me some blankets.
Speaker 3 (07:55):
I don't know, a huggy or what is it called
the buzzy snuggy? Yeah, you're almost there to here, I
know whatever they're called, all right, Mike mckaie, thank you
so much.
Speaker 2 (08:02):
If you're listening to the Bloomberg Business Weekdaily podcast, catch
US live weekday afternoons from two to five pm Eastern.
Listen on Applecarplay and the Android Auto with the Bloomberg
Business app, or watch US live on YouTube.
Speaker 3 (08:16):
All right, semiconductors definitely on our watch again for a
few reasons. First up, yesterday, President Trump mentioned amping up
tariffs on the space.
Speaker 7 (08:26):
We'll be putting a terraphone of approximately one hundred percent
on chips and semiconductors. But if you're building in the
United States of America, there's no charge, even though you're
building and you're not producing yet in terms of the
big numbers of jobs and all of the things that
you're building. If you're building, there will be no charges.
(08:49):
All right.
Speaker 3 (08:49):
That, of course, was President Trump yesterday. And then this morning,
the President called on the chief executive officer of Intel
Lit Bhutan to resign because of what he called conflicts
of interest, adding to the challenges for a company that
is supposed to anchor restoration of the US semiconductor industry.
Here's what the President put out. He said, the CEO
of Intel is highly conflicted and must resign immediately. He
(09:12):
was doing this, of course, on truth Social earlier today.
He went on to say, there is no other solution
to this problem. Thank you for your attention to this problem.
Speaker 5 (09:20):
Now.
Speaker 3 (09:20):
This comes after Republican Senator Tom Cotton asked the chairman
of Intel's board this week to answer questions about Intel
CEO ties to China, specifically including investments in the country,
semiconductor companies and others with connections to the country's military.
As we mentioned, there's a fair amount of stuff going on,
so let's get to it. A look at the Intel CEO.
(09:42):
We wanted to talk to someone who has followed this
company for a long time, knows the current challenges and
knows the executives certainly in the space with us. As
Bloomberg News US semiconductor networking reporter Ian King, he's out
there in our San Francisco studio. First of all, Ian,
thank you so much. You know this company so well,
you know what they're facing. You un understand the executives
(10:02):
who are there. I mean Intel, we know is a
critical piece of Washington's efforts to rebuild the domestic semiconductor industry.
I want to start with you, first of all, and
we ask you this a lot. I mean, Intel, even
with its struggles, is still a very important company, certainly
to the United States.
Speaker 4 (10:23):
Yeah.
Speaker 8 (10:23):
Absolutely. If you want this country to be domestically capable
of producing technology that leads this industry, the vehicle has
to be Intel. There's no other company that's even close.
Yes they are not what they were. Yes they have stumbled,
but they're still the best if you believe in the
(10:44):
necessity of advanced semiconductive manufacturing in this country.
Speaker 6 (10:48):
So how are you perceiving this new added pressure here?
I mean, has a CEO had enough time here to
really turn around and really show a turnaround story here?
Speaker 9 (10:58):
Yeah?
Speaker 8 (10:58):
I mean I think what you have to do is
look at what has changed. I think that you've gone
to the heart of the matter there. He's only been
in the job four months. Two years ago, the House
Committee on China asked him questions about his history of
investments in China. So none of this kind of association
(11:19):
with China is new. That that's just not new at all.
What is new is that Intel recently during earnings, cast
doubts on whether it'll build the plants in Ohio that
everybody's looking at as a cornerstone of chip manufacturing in
the US that it will be very measured in its
introduction of new new chip technology. That has obviously created
(11:40):
an undermining of this story of bringing back chip manufacturing
to the US and sort of making the US great
again in that particular area. So clearly that has caught
the attention of politicians, and clearly they're not happy with
the direction that that's going in. And obviously we're now
seeing some kind of a backlash, and that's focusing on
(12:01):
the CEO of.
Speaker 3 (12:01):
Intel well, and I think it's kind of interesting Ian
if this comes one day after we saw Apple CEO
Tim Cook in the Oval Office with the President talking
about investments in the US, and seemingly at least some
are weighing in on this and saying this is a
way of getting some of the heat off of Apple, Right,
Is this potentially about the Intel CEO kind of not
(12:23):
kissing the ring here?
Speaker 8 (12:26):
Yeah. I mean we've seen Jensen Wang from video, We've
seen Lisa Sue from AMD, and pretty much all of
the chip CEOs at some point making an appearance in
the White House or at various events where the President
or senior administration adon officials have been so that's clearly
been a policy that has you know, blossomed, shall we say,
(12:46):
in the chip industry. We have not seen Bhutan make
any appearances at any of these type of events. But
to be fair to him, he's only just got the
job and he's apparently taking twenty odd meetings a day
trying to figure out what the heck is wrong with
Intel and how to fix it. So you know, you
pick your poison here in terms of what he should.
Speaker 3 (13:04):
Be doing right and as investors, you probably want him
focusing on doing what he needs to do at the company.
The stock that we should point out is down about
three point seven percent today in down just sh I
have two percent year to date here. If the president, though,
is coming at you hard, Ian, what does that do
to your turnaround efforts? Does it kind of spread you
a little bit?
Speaker 8 (13:24):
I mean, that's what we need to know. We haven't
seen a response to this latest message from the president
from Intel yet. We've been trying hard to get one,
and we haven't seen one up here anywhere else. So
you have to believe that that means that they are
thinking very carefully and in a very measured way about
how they respond to this, We've seen conjecture, well, is
this the end for lip Boutwan? What does this mean
(13:47):
for Intel's turnaround all out there? And clearly more uncertainty
is not what Intel needs right now. We need signs
that they're moving forward and this clearly does not help.
Speaker 6 (13:58):
So earlier on we actually had Republican Senator Tom Cotton
saying adding pressure, saying, the chairman of Intel's board earlier
this week, he was asking questions about tans ties to China,
and of course we know that the US is really
focused on those national security concerns. Of course, Intel did
say that they argumented to national security, but can you
just speak to what some of those barriers are and
(14:19):
what some of those headwinds Essentially, what are the flags
that a lot of this industry is dealing with as
it pertains to national security here?
Speaker 8 (14:26):
Yeah, I mean it's semiconductors have become the absolute central
tool that the US is using in its increasing geopolitical
rivalry with China. Semiconductors are considered because they are absolutely
essential to technology that you would use to develop either
economic strength or military strength, and that has only increased
(14:48):
in focus with the emergence of AI as a viable
tool for any number of different uses, including military. So
depriving China of semi advanced semiconductors or the ability to
develop them themselves has become a number one priority, or
very close to the top priority. And you know, for
this administration, for the previous one. So anything that talks
(15:11):
to that is a very much a political hot potato.
And you know, we'll come acutely into focus and be
used by politicians depending upon what it is they want
to achieve.
Speaker 3 (15:21):
Yeah, and a hot potato sometimes conflicting signals is what
some might say in terms of protecting this industry here
in the US and also putting some pressure. Ian, thank
you so much. Busy day for you, and so glad
we could get some time with him. Ian King. He's
Bloomberg News US semi conductor networking reporter.
Speaker 2 (15:37):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on applecar Play
and the 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 3 (15:54):
All right, Well this week GM General Motors signed a
deal with Texas based Novian Magnetics care rare earth magnets
for its full size pickup trucks and suv So this
is the third domestic supply contract the automaker has signed
related to the critical trade dominated by China. You might
recalled last month Applestruck a five hundred million dollar deal
to buy rare earth minerals from MP Materials. That's the
(16:16):
US producer that secured backing from the Pedagon. That company,
by the way, reporting after the close. We're talking about
rare Earth's a lot and with good reason, especially considering
the world's dependence on China for rare earth permanent magnets.
And we know that this has been certainly part of
the trade conflict between the US and China. So let's
get to it a great roundtable with us. Back with
(16:36):
us is doctor Graycelyn baskerin. She's director of the Critical
Mineral Security Program at the Center for Strategic and International Studies.
She's out there in our DC news bureau. Also here
in studio is Bloomberg News Economic Statecraft reporter Jodo, who
understands and is constantly explaining the space to us here
at Bloomberg he's right here in our studio joining Nora
and myself. Hello everybody, Doctor Baskrin. Great to have you
(16:59):
here again, and you know, remind the world just why
this is so important. Who really has them? What the
US wanted is the US making the right moves to
expand their presence when it comes to rare earths.
Speaker 9 (17:14):
Thanks Carol, it's great to be back.
Speaker 10 (17:15):
So the first and foremost is in April this year,
China rolled out restrictions on heavy rare earth and what
this did is put a choke hold on the industry
because all of a sudden we had a supply chain disruption,
and the automotive industry was particularly hard hit. Within eight weeks,
we saw that Ford actually had to pause production of
its Explorer model owing to these supply shortages.
Speaker 9 (17:37):
What the US did.
Speaker 10 (17:38):
In response was a full out effort to warp speed
access to these rare earths and these magnets. Most recently,
we saw the Department of Defense make a four hundred
dollar four hundred million dollar investment in MP Materials, essentially
putting the US government as the biggest shareholder to accelerate
production both of the rare earths and the permanent magnets.
Speaker 3 (17:58):
Yeah, we've talked about that, which was kind got all
of us like, wait a minute, is this now a
state owned entity? Joe, come on in on this.
Speaker 11 (18:04):
Yeah, I mean this, this investment that we've talked about
now for a few weeks, right, was a signal to
the market.
Speaker 4 (18:13):
I think that was kind of the main thing.
Speaker 11 (18:14):
It was a signal to the market from the Trump administration,
from the Defense Department that the United States was serious
about a mind to magnet supply chain. They were also
signaling the real concern that the United States has over
the fact that China has put in these export controls.
As Grayson points out, we'd seen rare earth export controls
(18:37):
starting back in twenty twenty three. The difference maker here
was the magnets, and that's why companies like GM came
out and publicly said the magnets are a problem. We're
short and we're having this stop production.
Speaker 4 (18:48):
So we now have.
Speaker 11 (18:49):
A situation where MP Materials has been given a four
hundred million dollar investment equity investment by the DoD loan
financing to become a magnet producer. This is a minor
so problem solved and problem I'm just being so right,
exactly problem right right, And actually your that sarcasm is
is very much the conversation I have heard constantly now
(19:13):
for the past few weeks in the market, which is
in anything in manufacturing. Manufacturing is hard because just because
you say you're going to build a plant doesn't mean
the plant will just come together and work straight out
of the gates. And I think there are questions among
many in the market of this mining company, can they
figure out how to produce so many magnets at scale
right in the time needed.
Speaker 3 (19:32):
So as listen, you brought us Gracelynd, you ask her something.
Speaker 11 (19:36):
So my question is, I mean, Grayson, you're sitting here
now weeks later after this announcement, what do you.
Speaker 10 (19:42):
Think we're giving all the right signals and from both
the supply and the demand side intervention.
Speaker 9 (19:48):
You know, a lot of.
Speaker 10 (19:49):
What this NP Materials deal with Department of Defense was
was it was supply side. It was saying we need
more rare earths and we need permanent magnets. What this
new big announcement from General Motors is really telling us
they're also giving the demand signal by agreeing to off
take Joe. We've talked about this before, but one of
the difficulties is the price environment.
Speaker 9 (20:08):
Prices are generally pretty low.
Speaker 10 (20:10):
By stimulating demand and showing that there is an off taker,
what we're really saying is that we are meeting a
market need and that's a really positive signal. General Motors
as a whole has had first mover advantage on a
number of deals related to this. We saw them with
the MP Materials deal. Now we see it with the
Novion deal for the magnet. So really it's showing that
(20:31):
it is a full mind to magnet effort. And if
we want to reduce our reliance on China.
Speaker 11 (20:35):
Do you think now that we're showing there's commercial market
for this commercial demand as you're saying, are we now
in a show me moment, like prove it that you
can actually deliver these magnets.
Speaker 9 (20:47):
Absolutely.
Speaker 10 (20:47):
We've already seen that Novan Magnet is already making their
first magnets and they were delivered last month, which is
a really great first step. Now, what we need to
make sure that they can do, along with some of
these other magnet efforts like MP material second production facility,
is to make sure that we can ramp up.
Speaker 9 (21:03):
At a level that is quick enough.
Speaker 10 (21:06):
Because we know that whatever trade agreement is reached with
China is still transitory and time bound, and we could
have future disruption. So we now need to make sure
that we can ramp up fast enough.
Speaker 3 (21:16):
Can we? In your view, as Joe said, none of
this is easy.
Speaker 10 (21:24):
Yeah, I mean I think that there is enough market
pressure to do it. You know, I was always reminded
that during the COVID nineteen pandemic, we developed a vaccine
for a virus that we didn't know existed in less
than a year.
Speaker 9 (21:34):
America's strong suit is.
Speaker 10 (21:36):
Innovation when under pressure, and I think what we've seen
from the amount of government support but also the way
that we have embraced that challenge from a private sector
point of view, that we are well on our way
to being able to do that.
Speaker 6 (21:48):
I mean, China controls over sixty percent of the global
rare earth mining and more than eighty five percent of
process and capacity. And of course we know that the
US really sees rare earth independence as essentially a security concern.
How does the US fit into all this? I know
you mentioned that you do think that we have a
stake in the game, but let me know to what degree.
Speaker 9 (22:12):
So I want to take you back to actually two
thousand and seven.
Speaker 10 (22:14):
In two thousand and eight, quickly when our auto industry
started collapsing and we saw significant bailouts to the automotive industry.
Given the impact on jobs and investment in a really
important sector to the US economy, we have skin in
the game to ensure that our automotive supply chain does
not have disruptions because we know what the economic consequences,
not just in the Midwest, but to the entire country
(22:36):
that relies on it.
Speaker 9 (22:37):
So when we think about it through the.
Speaker 10 (22:39):
Lens of the economic health of our country as well
as importantly national security, given that magnets are used in
a variety of defense technologies, we have every incentive to
get this right.
Speaker 11 (22:50):
Graceland, what's your biggest concern though moving forward? I know
you're optimistic, but what do you think is going to
be the biggest hurdle actually making this happen?
Speaker 9 (22:59):
Can we do it fast enough?
Speaker 10 (23:00):
I mean a lot of these things are very very
small scale. You know, in MP materials first year, they're
actually only going to make one percent of the amount
of permanent magnets China made back in twenty eighteen, So
the ramp up will take time. And given the risk
to further disruptions, the big question is can we do
it fast enough? And that's really difficult to see if
(23:22):
to be able to say that now we're.
Speaker 3 (23:24):
Talking about Graceland Basker and director of the Critical Mineral
Security Program at the Center for Strategic and International Studies
out there in our Washington News Bureau, our own Jodo
is also with us, with Nora and myself. Hey, one
of the things Gracelyn I wanted to ask you is
how important though is this market for China and their economy?
And if the US is backing off, who does China
(23:46):
then start talking with to do deals? And are we
starting to see signs of that.
Speaker 10 (23:51):
China's economy is already struggling. We saw this past year
they had the highest levels of deflation in modern Chinese history.
Economic growth has really slowed. IMF has actually flagged a
number of these trade risks is a really big economic
risk that China is facing any time you have a
new players coming on, because remember it's not just the
United States. We have countries like Saudi Arabia, Australia, and
(24:15):
Malaysia are also going to bring facilities online.
Speaker 9 (24:18):
In the next couple of years.
Speaker 10 (24:19):
This is a significant risk to China's future because they
relied on supplying the entire global economy until this far.
Speaker 3 (24:26):
So could we have a glut in a few years?
I mean, I know they're called rare earth and we've
already debunked that, but could we have a glut essentially
in a few years or impossible?
Speaker 9 (24:36):
That's a that's a real risk we have.
Speaker 10 (24:38):
The reason a lot of mineral prices are actually quite low,
like lithium is down eighty five percent in three years,
nickel is down about eighty percent in three years, is
because there's oversupply on the market. Oversupply is a real
risk and one that the market hasn't really conditioned itself
to understanding. If we get to a point where we
have far more than we need and prices get pushed
(24:59):
down ether.
Speaker 6 (25:01):
Yeah, talk to me about what this means for a
lot of those technology companies. When we think about rare
earth materials, how does this impact something like the likes
of Apple, for instance, and iPhones.
Speaker 10 (25:11):
So, I mean, technology firms need rare earths across the board,
and that's part of why Apple signed this deal, and
increasingly companies are willing to pay a premium to not
be reliant on China because they saw that manufacturing could
come to a grinding halt in the instance that China
wants to roll out these restrictions. So generally, for tech firms,
they'd rather have too many options to buy from rather
(25:35):
than not enough grace.
Speaker 11 (25:37):
And I think one of the questions I have is,
when you're looking out two years, three years from now,
where's the investor class on this space? Do you feel like, yeah, great,
we're seeing some off take agreements. There's real commercial interests,
But at some point the rubber's going to meet the road,
and the question will be where the investor is going
to sit.
Speaker 10 (25:59):
The investors are really going to be a variety a
couple of different sources. So given that rare erth and
permanent magnets are used in virtually ever every sector of
the economy, a lot of these investments are going to
be made by off takers. So we have seen already
general motors really probably an Apple being really signs of
what is to come going forward. We expect to kind
(26:20):
of see these deals being cut across the economy, particularly
with President Trump's recent announcements, for example, on semiconductor tariffs, right,
which is really an effort to incentivize sourcing here in America.
So when you kind of add up the aggregation of
efforts ranging from tariffs to supply side intervention to stockpiling
which was part of the New Budget Act, it's really
(26:41):
a full throttled effort to ensure that we are sourcing
from America for American companies.
Speaker 3 (26:47):
Hey, last question, Grace, So before we wrap, we do
have MPEd Materials reporting after the closing bill. As I mentioned,
stocks up almost three hundred and fifty percent. Here to date,
it's up another four point three percent in today's session.
What are you watching for? And just got about thirty seconds.
Speaker 10 (27:03):
I'm looking to see how fast MP Materials can deliver.
The amount of support MP Materials has gotten is absolutely unprecedented,
and now they have the significant task of being able
to scale up quick enough to meet both our national
security and economic security goals. So I want to know
how fast they're going to deliver on the very high
(27:23):
expectations that the US government has placed before them, as
well as industry in this country.
Speaker 3 (27:28):
Okay, whenever I talk with you, I always want to
just take a class on wear earths. But you have
to be the professor. I'm just going to put it
out there, doctor Gracelynd Basker, and thank you so much,
Director of the Critical Mineral Security Program at the Center
for Strategic and International Studies, and same thing. I'll take
a class with you anytime. Joe doo He is Bloomberg
News Economic stakecraft reporter, a must read here at Bloomberg.
Speaker 2 (27:49):
You are listening to the Bloomberg Business Weekdaily podcast. Catch
us live weekday afternoons from two to five pm Eastern.
Listen on Apple CarPlay and Android Auto with the Bloomberg
Business or watch us Live on YouTube.
Speaker 3 (28:03):
Well, the Kremlin said President Vladimir Putin and President Donald
Trump are finalizing details for a meeting within the next
few days, even as the White House insisted that the
Russian leader still needed to agree to meet with Ukrainian
President Vladimir Zelenski now from the Oval Office. Late yesterday,
President Trump commented on a possible meeting with the Russian leader.
Speaker 7 (28:23):
We had some very good talks with President Putin today
and there's a very good chance that we could be
ending the ending the round, ending the end of that road.
Road was long and continues to be long, but there's
a good chance that there will be a meeting very
soon with you. Excuse me, how both do you think
(28:43):
you are to some kind of well, look, I don't
want to say I've been disappointed before.
Speaker 3 (28:48):
All right. That, of course was President Trump yesterday from
the Oval Office. Back to help us understand what may
be going on behind the scenes, especially when it comes
to President Putin. Is doctor Angelas Stent. Delighted to have
her back with us. She's senior fellow at the Brookings Institution,
the author of Putin's World, Russia Against the West and
With the Rest, former National Intelligence Officer for Russia and
Eurasia at the National Intelligence Council, and she served in
(29:11):
the Office of Policy Planning at the US Department of State.
She joins us on this Thursday from Nantucket. Doctor Stent,
nice to have you here with Nora and myself. The
President said that we could be ending the ending the round.
He said, it could be an end to that road.
Do you agree that we are close to an end
(29:31):
of the war between Russia and Ukraine.
Speaker 12 (29:34):
I do not agree with that. I mean, I think
it'll be good if the two leaders meet, but we
know that Putin really doesn't have any intention of agreeing
to a cease fire or really stopping the war until
he's sure that he gets all the concessions from Ukraine
that he wants, and unless something occurred in this discussion
between mister Whitcoff and Putin that we don't know about,
(29:56):
we don't know the content yet. I don't think that
Putin's going to be get that yet. So this will
be the first step, hopefully towards something that could result
in ending the war, but that will be a very
long time ahead.
Speaker 6 (30:10):
Can you put into context for us just how complicated
and exhaustive ceasefire negotiations could get.
Speaker 12 (30:16):
Well, First of all, the US side with the Europeans
and the Ukrainians would like to have a ceasefire agreed
upon first, and then get into the details of what
a resolution or a negotiated settlement to this war would
be like. Putin has insisted that the ceasefire will only
come when quote unquote, the root causes of this conflict
(30:38):
are addressed, And the root causes for Russia are that
it wants to subordinate Ukraine, and it wants to have
guarantees that NATO won't expand anymore and that its borders
will be secure from its definition. So I think a
ceasefire itself is complicated to negotiate because you have to
(30:59):
figure out who's going to monitor it of the what
line do you then say the ceasefire is because the
Russians are insisting that the Ukrainians recognize the incorporation of
four territories into Russia, none of which Russia fully controls.
The Ukrainians control part of that territory, so that in
itself would be very complicated. But I think the more
(31:20):
serious question is whether the Russians will be willing to
talk about a ceasefire before they get the kind of
guarantees they're asking from the United States about Ukraine's future.
Speaker 6 (31:31):
Angel I whant I traditionally think about a summit. I
usually assume that negotiations and discussions have already happened before
your meeting. It's more or less a formality purpose. Are
we working backwards here?
Speaker 12 (31:42):
Yeah? I think this is a very different situation. I mean, normally,
as you say US Russian summits, a lot goes into
the planning, most of the stuffs agreed upon before the
leaders meet, that communicates and everything. Clearly there have been
some negotiations going on behind the scenes. We're not informed
about them. But this would seem to be a very
quick timetable for a summit. And therefore, even though I
(32:07):
think President Trump said it might be very soon, I'm
not sure how soon it will be. And we even
the Russians now say that it's the US side that
wants the summit. The US side said it's the Russians
that asked for the summit. So list in itself would
be quite unusual, unless again, something was agreed upon between
mister Woodcoffin President Putin that we don't know about.
Speaker 3 (32:29):
Do you have a clear tell on the relationship between
President Trump and President Putin right now? Because increasingly and
most recently we have seen the White House the President
specifically seem to be putting more pressure on Russia and
being tougher with Russia and President Putin. But what you
read on that relationship with Us, which up to now
(32:50):
we've seen President Trump, I should say, talk often in
his first term and certainly a second term about how
much he admired the Russian president.
Speaker 12 (32:58):
Yes, I mean, I think I'm till recently he morral
has only had praise for President Putin. He said that
they had these great phone calls, and it's only recently
that he said, well, actually the phone calls were great,
but then immediately afterwards, the Russians would intensify their bombing
on civilian targets and infrastructure in Ukraine. So I think
President Trump is on the one hand, I think increasingly
(33:20):
impatient with President Putin and realizing that the Russian leader
says one thing and then doesn't do anything about it.
On the other hand, he's clearly not willing to go
full out and condemn Russia and put much more pressure
on it. He hasn't imposed sanctions on more sanctions on Russia,
although he could still do that tomorrow, And he still
hasn't agreed that the US will supply Ukraine with any
(33:44):
of the weapons that it needs to push back against Russia,
although he has said that our European allies in fact
are purchasing and will purchase weapons from the US that
they will then give Ukraine. So I think you have
to listen to what he says, but then you also
have to see what he does, and clearly Putin wants
this meeting with him to preemp President Trump from doing
(34:06):
anything else that would put more pressure on Russia.
Speaker 3 (34:09):
I mean, it sounds to me like this is going
to be difficult. If the US is saying the Ukrainian
president President Zelenski needs to be there, that's not likely.
It sounds like Russia is not going to give in
and give any territories back. I mean, it sounds like
this will never happen.
Speaker 12 (34:28):
I mean, I mean this is a delaying tactic on
Putin's pot. Okay, quite, he has no intention of meeting
with President Zelenski. He doesn't consider President Zelenski his equal.
He wants to meet with President Trump. And you know,
none of the European leaders are going to be president
this meeting either, even though President Trump did have a
phone call with him after the Whitcough meeting, and he
(34:49):
is I think keeping them informed. So I would I
would be very surprised if anything emerges from this meeting
other than you know, they had a conversation and they're
going to be future convass stations and this process is
going to continue.
Speaker 3 (35:02):
Do we need to be worried at all about President
Putin's health here? I mean, there's been some reports out there.
I'm looking at Google, but we've had some talk in
the newsroom. We have a viewer asking about that, I mean,
I don't know. Do we have a clear read on
that as well?
Speaker 4 (35:18):
We don't.
Speaker 12 (35:19):
I mean, there were roomors a number of years ago,
you know, even before the full scale invasion of Ukraine,
and that afterwards, that he was sick, that he you know,
there was speculation about what different diseases he had. There
is still speculation about that. We don't but we don't
have too much concrete information about it. And he appears
(35:39):
to be quite vigorous, he goes to meetings, he shows up,
so I would say that we don't have a clear
reading of this.
Speaker 6 (35:49):
What's the nature of the United States support for Ukraine
at this stage? If you think back to the previous administration,
there were a lot of discussions about how much we
were giving in terms of financial support to Ukraine.
Speaker 12 (35:59):
So the moment, there is still money actually left over
from the Biden administration that hasn't been fully dispersed to Ukraine,
but there have been no new commitments under the Trump administration.
There are I think a majority of Senators, including many Republicans,
who would like to support Ukraine more, but of course
the magabase is very much against that, and that is
(36:22):
why President Trump has said, you know, we're not going
to supply any more money or weapons for free if
the Ukrainians going to buy the weapons they can, and
this is why the Europeans are doing this. So there
is not much support and there's no new support going
to Ukraine from the United States.
Speaker 3 (36:39):
Angela, just quickly twenty five seconds. Are sanctions the toughest
tool the US can use on Russia and President Putin
to get him to the table.
Speaker 12 (36:50):
Now, I think the tough I mean that the sanctions
are important, but the toughest tool would be to supply
Ukraine with all of the weapons it needs to really
push back against the Russian. The Russians on making very
much progress in Ukraine. They're taking little bits of territory
every week. That losing still thousands of people.
Speaker 3 (37:09):
All right, Always fun and always informative when we check
in with you, Doctor Angela stant, Senior fellow at the
Brooking Constitution, author of Putin's World.
Speaker 2 (37:17):
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