January 22, 2025 • 37 mins
The World Economic Forum in Davos, Switzerland, once a hub of globalism and progressive ideals, is now seeing a shift towards embracing the ideology of US President Donald Trump. With CEOs and other business leaders trying to get in line with his views, many are abandoning previous initiatives around equality, diversity, free trade and climate change. On this week’s episode of Trumponomics, we discuss how and why so many of the global elite at Davos are pressing “unsubscribe” on their previous commitments in favor of (like Trump’s book) the art of dealing with the new White House occupant.
In a live taping before an audience at Bloomberg House in Davos, host Stephanie Flanders speaks with Bloomberg News Editor in Chief John Micklethwait, Washington reporter Jenny Leonard and Bloomberg Businessweek Editor Brad Stone. They unpack how the world order has already changed in anticipation of Trump’s return, what the Republican’s style of transactionalism will look like for foreign policy, and what will be the fallout for the global economy and trade policy.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. The Golden Age of
America begins right now. I will very simply put America first.
Speaker 2 (00:26):
Welcome to trump Andomics, the Bloomberg podcast that looks at
the economic world of Donald Trump, how he's already shaped
the global economy and what on earth is going to
happen next. I'm Stephanie Flanners, head of Government and Economics
at Bloomberg, and this week we're recording Trump Andomics in
the Swiss Alps, in the Bloomberg DeVos House at the
(00:48):
World Economic Forum, And as we speak, we're looking at
pictures from Washington. We're recording on Monday, and the second
inauguration of Donald Trump is getting underway. So we did
I think it was fitting given the timing that in
this episode we asked the question, is Davos learning the
art of the deal? You know, not so long ago,
(01:09):
the billionaires, the heads of state, the tech moguls who
come here every January for the World Economic Forum, they
thought they were done with Donald Trump, and now they
seem to be pretty meekly falling into line.
Speaker 3 (01:23):
I'm super fired up for the future. It's going to
be very exciting.
Speaker 1 (01:28):
As the President said, We're going to have a golden age.
I'm actually very optimistic this time. He seems to have
a lot of energy around.
Speaker 4 (01:35):
Reducing regulation, and if I can help him do that,
I'm going to help him. I mean, seeing Donald Trump
get get up after getting shot.
Speaker 1 (01:43):
In the face and pump his fist in.
Speaker 4 (01:46):
The air with the American flag, it's like hard to
not get kind of emotional about that spirit.
Speaker 2 (01:52):
And I'm wondering what the implications are for everyone else
and for markets, for money, for investors, for the broader world.
And I've got a stellar cast here to discuss these issues,
Bloomberg's editor in chief, John Micklethwaite, and I'm very glad
that you made it this year. You were human ill
last year and lots of us had to pretend to
(02:12):
be you, which didn't go well at all. We have
Jenny Leonard white House reporter who focuses on international economic
issues and has been the first to an awful lot
of trade stories and policies ever since she came to Bloomberg.
And Bradstone, who's now editor of Bloomberg business Week, but
before that was Senior Executive editor for Global Technology at
(02:34):
Bloomberg News and the author of four books very relevant
to our discussions today, including Amazon Unbound, Jeff Bezos and
The Invention of a Global Empire Looking Around, and it
was written up rather nicely in an introductory story that
Bloomberg News wrote, You'd have to say the movers and
shakers descending on the World Economic Forum here in Devils
(02:56):
this week have already been paying their dues to the
new president, realigning their priorities to better fit his somewhat
unreconstructed America First Agenda. We had a great quote from
Lloyd Blankvine, the former head of Goldman Sachs. He said
he was reminded of what happened when Napoleon escaped from Elba,
(03:17):
and the French newspapers changed their tune pretty dramatically in
eighteen fifteen. They started off, in fact, the Monitor started
off characterizing Napoleon as a monster, but by the time
he got close to Paris, they announced that his Majesty
was arriving. And it definitely has sort of felt a
bit like that, And of course Donald Trump himself would
love the comparison with Napoleon. So let me start with you, Brad,
(03:40):
because there has been so much focus on how Silicon
Valley has sort of turned on a dime with this
president and some of the key figures like Mark Zuckerberg
in particular. But maybe what's changed it is just they've
been able to show their true colors.
Speaker 3 (03:55):
Everything has changed.
Speaker 4 (03:56):
Let's go about eight years ago and all the CEOs
in to the White House looking like they had some
bad fish the night before, and there was Tim Cook
and Jeff Bezos and Cheryl Sandberg.
Speaker 3 (04:07):
Zuckerberg didn't even go.
Speaker 4 (04:09):
Elon didn't go, and then withdrew from the Presidential Council
a couple of weeks later when Trump withdrew from the
Paris Climate Accords, and so what happened? I mean, they
felt unjustly persecuted during the Biden years, either through the
anti trust agenda or the regulation of crypto, maybe a
little bit of the anti tech mood in the media.
(04:30):
And they have come out of the last four years
in some ways you know, maga and it's startling.
Speaker 3 (04:38):
But look, credit Trump a little bit.
Speaker 4 (04:39):
He opened the tent large enough to make room for
all the tech leaders and they see a kind of
common cause with Trump on crypto, on anti trust, on
Mark and Dreesen calls it raising the tech flag building
acquiring investing, and I think you know, there's optimism, but
there's also opportunity.
Speaker 3 (05:00):
And they know that by closing up.
Speaker 4 (05:02):
To Trump and contributing to the inauguration and being up there.
Speaker 3 (05:06):
In the day is today, that that is good for business.
Speaker 2 (05:08):
I mean, you make the point though, that you know
they have shifted in the last eight years. It's not
just that they're sort of suddenly waking up to the
reality of a second Trump term. So how much were
you surprised by any of what's happened in the last time.
Speaker 4 (05:22):
Absolutely shocked, because you know, there did seem to be
a sense of legitimate resistance eight years ago.
Speaker 3 (05:30):
But the world has changed. And Trump, as you know,
as I said, you know, to his credit, he's evolved.
Now there's not a lot of consistency.
Speaker 4 (05:37):
I mean, he was the one who raised the idea
of banning TikTok and has just given it a reprieve.
He was anti crypto and just launched the Trump coin
and the Melennia coin to great enrichment of the family.
So he's seeing some of the political and frankly the
financial opportunities of being big Trump, being.
Speaker 3 (05:56):
Big tech, big Trump. I think, well, that might be
even more appropriate.
Speaker 2 (06:01):
Obviously financially, and that's a big part of all the
discussions around here. We have seen a lot of bedding
on and moving of money in line with the Trump agenda,
not just bitcoin, but price of oil, growth, stocks, the dollar.
They've all gone up there about eight percent. I was
looking at it this morning, since Donald Trump was elected,
(06:23):
and when I look at what the impact has already
been on countries like the UK, the big increase in
bond yield that's gone with this, you know, it feels
like already before he's done anything, any country with underlying weaknesses,
any government with underlying weaknesses, is having those exacerbated or
(06:44):
highlighted just by the fact of the Trump agenda, and
they're on the back foot. How would you say the
world has changed in particularly the sort of foreign policy
and financial markets.
Speaker 1 (06:56):
What Brad said about tech is actually quite true of
business in general, and not just linked to Trump. I mean,
I think if you look around the world, compared with
say eight years ago, business people everywhere since both more
fear and more opportunity in their relations with government. The
idea when I first started coming to devoce that business
(07:18):
was this wonderful thing that existed outside the realms of government,
and it was all about kind of doing good and
all that sort of stuff. Now business people realize that
you can both get clobbered by government, and that applies
from Trump, but it also applies to the European Union
and lots of other places. But also it's a chance
for enrichment, as you know, TikTok is suddenly discovering and
(07:39):
lots of other people that people in the Midwest now
will be thinking, well, maybe we can make money out
of tariffs if they come our way. There'll be people
you know around here thinking about different things that they
might be able together if Europe puts up bigger barriers
and so on. So there's both kind of fear and
greed are driving business and government together, I think generally.
But on this specific question you said, you can see
(08:01):
it everywhere. You know, Britain has suddenly got somewhat sort
of freaked out by a kind of semi Liz Trust moment.
You can argue how much of this is Rachel We've
spoilt also, you know, and how much of it is
just the simple fact that Trump has arrived and everything
has been thrown into greater kind of impact either good
(08:22):
or bad. And I think that's almost almost a way
to look at Trump at the moment. He's sort of
throw every weakness or every strength is somehow being massively exaggerated.
Trump is always about exaggerating.
Speaker 2 (08:33):
And when it comes to the UK, I mean if
you look at actually the sort of gap in borrowing
costs between the UK and the US has barely moved,
and yet all of the pressure, none of the pressure
in the UK has all been on the chancellor for
reasons that sort of pre date that change. Well, I
want it in a little bit good defense. I'm just
looking at the spread on as you'd expect any Bloomberg imparted,
(08:57):
we will get onto some of these kind of broader
packs of basic things like the cost of money actually
going up along.
Speaker 1 (09:03):
With all good news.
Speaker 2 (09:05):
But Jenny, obviously a lot of the big news we've
seen have been trying to game out how serious Donald
Trump is on his agenda for tariffs, what it will
mean for different aspects of the global economy and different companies. So,
since you're usually the first to find out these things,
what's your sense so far?
Speaker 5 (09:27):
Well, I would also say Washington has seen a big
shift since the last strund term on this. First of all,
they're all accepting the outcome that he's president again. But
we also see both parties coming together wanting to do
things together, which I think eight years ago we wouldn't
have imagined them talking about, oh, we need to actually
(09:48):
do something on the border, because that played into the
election outcome. Maybe Trump has a point here on trade,
on tariffs. They're talking about tariffs in a very different
way than eight years ago. The GOP that's in the
Congress right now, I think has many more Trump allies
than they did traditional free trade republicans eight years ago.
(10:09):
You know, we see TikTok is a massive shift from
a bipartisan, massively bipartisan legislation that passed saying this is
a national security threat, it has to be banned. All
of a sudden. Mike Walls, the incoming National Security Advisor, says,
this is a great app. I think I wish I
had it on my phone. That kind of shift is
what we're seeing right now. Doge is another example. This
(10:32):
is all things that we're seeing right now, and I
think when the rubber meets the road, we're going to
see if this actually sticks. I am a little bit
skeptical that everyone in the Republican Party will go along
with broad global tariffs hitting every country, every import. I
also think we've seen this from spending discussions in Washington.
When it comes to cutting your base in your district
(10:54):
or whatever project you care about, you know, they might
throw a fit. And I think that we'll see when
the rubber meets the road if they're actually that far
along in their shrift.
Speaker 2 (11:03):
Well, we have had and you've been involved with some
of them. I mean, there have already been sort of
competing narratives coming out of the administration, precisely on tariffs,
because you have a sort of grown up view supposedly
that says, oh, they're going to be targeted. There was
a Washington Post story that talked about that, and then
quite a lot of pushback that seems to have come
from even from Donald Trump himself.
Speaker 5 (11:24):
Yes, I will say we'll probably see a repeat of
what we saw eight years ago on the economic front
and the battle on the inside on tariffs. We have
two camps. Largely, even though Scott Besson and Hard Lutnik
I think are talking about tariffs now in a way
that are a little bit more in line with the
(11:44):
Hawks than Steven Mnuchan maybe did eight years ago as
his Treasury secretary. But we had reported that there is
an effort under way to stage the tariffs, to not
hit every country, every reimport with ten percent, twenty percent,
you name it, at one time, but kind of go gradually.
(12:06):
And the way it was described to us is this
is a negotiating play. We open this up, countries will
come to the table, we get something out of it,
but we don't cause massive inflation by hitting every good
with twenty percent. We report it this morning that he's
not going after China the way he promised on the
campaign trail. Of all the executive orders he will sign today,
(12:27):
there's not going to be anything on tariffs. There will
be no day on tariffs, even though everyone who's been
following his truth social posts, I think we're expecting China
tariffs for fentanyl, China tariffs for trade, Mexico Canada tariffs.
All that seems to have been put on pause for
we don't know how long. But that's the state of
(12:49):
play right now. And if you follow his public comments
but also privately, is what I'm told he has really
shifted on China to a much less adversarial tone. He
used to bring up in meetings with people his agrievances
about Beijing, and now we see he hopped on the phone.
(13:10):
He invited Chujingping to the inauguration. He's obviously not coming,
but sent his vice president. He tweeted about world peace
and he wants to save TikTok. And we also know
that nothing in Trump world really sticks for a very
long time. So this could all change tomorrow. If the
Hawks get in a room with the President and say, hey,
(13:33):
you know what, you really let down some of your
supporters who voted for you because you promised across the
world tariffs and you did nothing on day one, this
could sway him.
Speaker 2 (13:42):
I mean what is funny is, of course, of all
the things in Trump's agenda on which both parties he
has united, it is an aggressive antipathy towards China. So
if that's the one thing that he steps back from
will be interesting. But I mean, sorry, Elon, they need
for the need for pay Brad, this is this all, Elon.
(14:06):
I mean, you have the you emphasize some of the
things that the tech well will be quite happy to
see the back of if they can like the competition
efforts to reign in tech. But both the control on
immigration and indeed the measures against China stood to damage
quite large parts of silicon value will certainly not be
particularly in their interests. Are they Are they betting that
(14:28):
Elon's going to be the Trump whisperer.
Speaker 3 (14:29):
And I think we don't know.
Speaker 4 (14:31):
And I think you've put your finger on what will
be probably the most significant divide within the Trump rule
and coalition, and that's the line of thought represented by
Elon and his group of tech CEOs who are now
in government or advising government. And then I guess traditional
maga Steve Bannon and the like. And we're already seeing
clashes on issues like deportation and a T one B visas,
(14:55):
and it will be interesting to see how it plays out.
But I mean, you know, if you go back eight
years ago, what we know about Trump is that he
is he is, he can be influenced, and he's quite transactional.
Speaker 3 (15:06):
And so when you saw.
Speaker 4 (15:07):
The parade of CEOs like Tim Cook to the White
House to carve out relief for companies like Apple, I
think I think it often comes down to who is
the loudest voice in his ear and who has he
talked to most recently.
Speaker 2 (15:22):
So it's a big big tech will be fine. Potentially
big tech is betting they're fine. Small and medium sized
tech and other businesses, and probably, I.
Speaker 4 (15:29):
Mean, it really depends, you know. He said at one
point that he thought Mark Zuckerberg should spend the rest
of his life in jail. And now zuck Is is
at the inauguration.
Speaker 3 (15:37):
Today, will the attitude change?
Speaker 4 (15:40):
You know, Elon's interests are in some ways quite opposed
to Marx, and so if Elon does have the loudest
voice in the room, maybe Mark's on a little bit
of trouble.
Speaker 2 (15:49):
Joe mentioned it at the beginning. It is kind of
breathtaking the one eighty that corporate leaders seem to be
doing on ESG on a lot of their net zero goals.
We just saw the six largest US banks all quitting
the UN sponsored net zero alliance and McDonald's, Walmart. They're
(16:11):
rolling back all their DEI initiatives. Did they not mean
it ever? Or is this the thing that's performative?
Speaker 1 (16:16):
It is incredible. I will I'm slightly crossed with Lloyd
blank Vine for using the monitor thing, which I've used
countless times, but I advise everyone in this room to
go look at it. It is the most incredible series of
headlines that begin with the cannibal as escape from his hideout,
he will never escape the mountains, and then it ends
with the Emperor has arrived in Fontaine Lower with I
(16:38):
think this is imperial match just in fourteen days. But
that is pretty much what has happened with Suddenly CEOs
have jumped almost a medling and you can see it
just in terms of the sort of things they talk about.
They are moving back from things. I mean a lot
that some of this is posturing. It's just in the
same way as some of the diversity stuff maybe was
posturing in one way. Now some of the retreat is
(17:00):
the same thing. They don't want to get called out
for not taking profits as seriously as their rivals, and
a lot of these things they can fiddle with just
by changing the language a bit.
Speaker 2 (17:10):
But globally, is there going to be a divide though,
because I mean you've already seen it. We learned today
actually the mess is not taking away all of the
sort of moderating that it had outside of the US.
How a big company is going to navigate that? Oh,
I'm very green for the rest of the world, but
I've given up on all my climate things in the.
Speaker 1 (17:31):
I don't know what Brad. Brad may have different views
on this, but I tend to think there are two
different sort of things going on. One is the stuff
to do with tech and this enormous increase in wealth,
And if you look at throughout the history of commerce,
there's always been times where industries shoot from being the
people who everyone wants to be, whether you're Rockefeller and
(17:52):
Morgan one hundred years ago, to suddenly being the malefactors
of great wealth. And notwithstanding the recent love in I
think there is a real push to get the tech companies,
which is most obvious in Europe because they're all American,
but I think is generally there and it's going to
have touch points. We've got a film coming out on
the number of children who died because they'd be pushed
(18:14):
towards suicide videos and things like that. There is a
lot of nasty stuff around the tech companies per se,
and that's one issue, and we'll see what happens on that,
and that's obviously slightly altered by Elon's presence. But the
other one, more generally is business. I think on the whole.
You know, most business people, there's quite a lot to
(18:35):
gain from Trump if he does deregulate. Two big things
they don't like is one the idea of immigration taking
taking away workers they would need. And as Jenny was saying,
on tariffs, and that will be the area. But I do, yes,
I do think there is a there are divides there
and there will be a big divide between Europe and America.
I think that's very difficult to avoid.
Speaker 2 (18:54):
Have you seen, Jenny, have you seen sort of in
the in Washington and elsewhere, anyone kind of standing up
for DEI or well in climate I mean, there's a
lot of support in Congress for still continuing to come
up climate change.
Speaker 5 (19:12):
Yeah, but there's only so much you can do when
you're in the minority in both houses, so everything they
say kind of goes into avoid. I don't see anything
coming together as an actual initiative, you know, legislation they
can't really pass without any Republicans, So it's sort of statements.
Speaker 4 (19:30):
Yeah, And can I just add, I mean, for at
least for tech CEOs, they have seen, they have watched
as both the legal and the political environment shifted. So
the Supreme Court struck down race based admissions at Harvard,
you know, in terms of the political environment, just what
seems to be like a full shift away from the
principles of DEI. For a long time, they were criticized
(19:53):
for creating a discriminatory environment.
Speaker 3 (19:55):
They you know, did these.
Speaker 4 (19:56):
Annual transparency reports around the makeup of their workforces and
essentially showed no progress and got clobbered year after year.
And so I do think there's a feeling of like
genuine relief that they can, with political safety kind of
retreat from some of these commitments.
Speaker 3 (20:12):
And I think at least in the US, there's a
realization that the population is.
Speaker 4 (20:16):
A lot more conservative than what was if you look
at poles surrounding like mass deportation. You know, generally it
feels like, and the election demonstrated it, that the country
is supporting some of.
Speaker 3 (20:27):
These Trump ideals.
Speaker 4 (20:28):
And so with that cover, the tech CEOs at least
feel they're on safe ground to retreat from some of
these things that always made them feel uncomfortable.
Speaker 2 (20:35):
There had been a lot of hand ringing around the
development of AI and how the training of the large
language models and others on data was inherently biasing them
in favor of you know, stereotypes that came alongside the
DEI agenda, you know, concern about that. Do you think
that's going to stay or do will companies now feel
that I have to work about.
Speaker 4 (20:55):
Well, Zuckerberg just promised a lot more masculine energy and
the Facebook, so I don't look, I mean, I think
we're going to still hear those critiques level at the
tech companies, and I don't know if in this environment
they will have as much traction as they once did.
Speaker 2 (21:11):
So, Jenny, we have already talked implicitly about this, but
I'm interested in how it feels as a reporter on
the ground. There's always been a lot of corporate interests
behind the scenes, particularly in US politics and policy making,
but a lot of people have been sort of taken
aback by or found it jarring that just the very
(21:31):
explicit corporate interests literally sitting behind the president as he
gets inaugurated, the idea that policy is potentially being as
affected by Elon Musk and his interests as any kind
of broader ideological agendas. How does that affect the way
you're reporting and where the team's reporting.
Speaker 5 (21:49):
Well, first of all, what was very different this time
around was trum Ran his entire transition out of mar Lago,
which obviously there's no access for press, so it was
very hard to find out which CEOs he was dining with,
and that matters to the policymaking or jobs. You know,
everyone's there for a reason or an agenda, so that
(22:10):
was really different. It feels more explicit than it did
eight years ago because he came out of the gate
starting trade wars, and I remember talking to companies or
their lobbyists in DC and everyone was terrified to be
named in a tweet. So if you could just lay
low and deal with him behind the scenes, that was
(22:33):
sort of how big companies were approaching it last time around.
This time around, it seems like everyone is explicitly kissing
the rank. The story you mentioned also had the good
anecdote about the Coca Cola bottle in the end, they're
made a special inauguration edition. So everyone is out there
now on whatever truth, social X, any platform they can
(22:55):
say I am meeting with Trump, I am close to Trump.
That is much more explicit this time around. It obviously
will create I think instability in the way that every
single person that can go into the White House or
to mar A Lago to spend the weekend. There can't
shift policy on the fly, so it might be for
(23:15):
US reporters we might actually have a solid story but
are unaware that the president is having dinner in mar
A Lago with you name it and then completely shift
his policies. So I think the pace was already very
fast last time around, but the mar A Lago addition,
I think an access to this time around will be
(23:36):
could be more challenging and more interesting to figure out
how we well.
Speaker 2 (23:40):
It's true that we'd had an economic statecraft team pretty
much since Trump got elected the first time, and this
time is very much or at least alongside that, we
also have the corporate statecraft team, and I guess we'll
see how they both do. I mean, John I said
at the start that in a sense, this was many
people on the outside of the US to say, well,
this is nothing new. There's always been a lot of
(24:01):
business interests involved in US policy, and there's plenty of
people I've spoken to international policy makers, particularly, I would say,
in what you might call the global South, who say,
thank goodness, we now have a nakedly transactional president. You know,
in America is on the world stage admitting that it's
totally self interested and it's just out for its own interest,
(24:23):
just like every other country, and it's not pretending to
have all these high ideals. You know, this is a
government I can do business with.
Speaker 1 (24:30):
I think there is a degree of that, definitely, you
can feel it. The only thing is on that I
sort of be careful what you wish for, because in general,
that world of free trade and globalization which people like
me supported and which I think Donald Trump said I
was wrong about everything all my life, specially tariff, especially tarist,
but that was a world that enriched the poorer world,
(24:54):
and I think from that point of view, the global
South would be ill advised to celebrate this thing. I
can see why that if you are a copper magnate
in some place, this might sound great in the short term.
And yes, it is perhaps more honest than some of
the talk about talking about freedom and then coming in
to beat people up behind it. But I think you
(25:14):
have to be careful what you wish for. I did
listen to Jenny and a bit. It did strike me
that some of this stuff could reverse relatively quickly. On Trump,
you know, he does deeply believe in tariffs. I think
it's always been a been a constancy of his. So
at some point there is going to be an argument
with the tech people on Trump and Elon at some
(25:34):
point that could come apart, and more generally, I think
on things like DEI and greenery without signing too sort
of bled about it, there are other forces that will
keep pushing it forward. One is just the pressure from investors,
which I don't think will change that much in terms
of different categories. Secondly, it is on climate change. You
(25:55):
just have the fact that we have to deal with
the climate, and I think lots of people see that.
I think at the end, yes, you might see changes,
but I think I would still expect corporations will retreat
from some of the more publicly extreme versions of DEIS
you might put it. But I don't think that's going
to be. It's not going to go all the way
back to how it was in the nineteen fifties, where
(26:16):
a group of white men sat and decided everything.
Speaker 2 (26:19):
And in short term, I think the biggest thing internationally
that people will be dealing with is the global financial
side effects of everyone betting on a sort of super
sore away America that potentially has unsustainable growth but certainly
inflicts higher costs of borrowing.
Speaker 1 (26:35):
You already see the bond rate, the bomb market. I
think I've put a Trump in the bond market will
police you, and that seems to be what's happening. Seems
to be the one thing he's frightened of is if
the bomb market turns on you. That that's something that
people can see. And so far Trump has always focused
We had a very good bit and the last edition
of Trump andomics on this. Trump is always focused on
(26:57):
the stock market. If you're running a government to the end,
it's the bomb market, which probably matters more.
Speaker 2 (27:03):
Jenny, I can't help mentioning we've sort of got you
mid Atlantic almost because although you're still technically in DC,
you will be moving to Berlin. And I've sort of
intrigued how you think reporting this story from Europe. I mean,
I've said you have to still be on the phone
to Washington a lot. You'll be kind of covering both sides.
But how do you think the Europeans will be dealing
(27:26):
with this agenda?
Speaker 5 (27:30):
From my reporting right now, I would say they're not
as prepared as they should be. This is a little wonky,
but there is a big trade case that the Europeans
brought against China. You might remember China used economic version
against Lithuania. It was about them opening a Taiwan trade office.
(27:53):
This has been in the works the entire Biden administration,
with lots of support from the Biden administration, and they
are seems set to withdrawa case which we reported last
week was angering the Trump team because it reinforces their
belief that the Europeans are weak and they're not willing
to stand up to China, and Brussels is not willing
(28:13):
to defend one of its member states, and arguably a
smaller one. So I will be on the phone with
people in Washington. I think I will be on the
phone with people in different capitals and the people that
Trump sens there.
Speaker 2 (28:27):
On this sort of transactionalism. I mean, if there's goment,
there are some governments around the world who think, okay,
this is quite a straightforward thing. We just have to
work out how to sell something to Trump, how could
make it be in his interest. Europeans maybe they're a
lot that they're not so good.
Speaker 1 (28:42):
At being transactional.
Speaker 5 (28:44):
They're a little bit slow compared to the Trump timeline,
So I think if something gels and Brussels, Trump has
moved on to a new demand. So the transactional nature
I think really works well with countries one on one.
I think Trump obviously seems really close to Jorgo Maloney,
so he will find an ally and her and Victor orban.
(29:08):
But once you actually have to respond as a body
in Brussels, I don't know how well that's going to
work with the transactional So I could foresee a bunch
of fights in Europe on how to respond. Do you
stand up to him if he threatens tariffs or can
you work out something else that's good for your country.
Speaker 2 (29:28):
I mean John has been an orgy of sort of
talking Europe down, one could say, in response to the
to the Donald Trump's victory, and also what's happened in
financial markets, and just an enormous spotlight on whether it's
the lack of defense spending, just the lack of speed
and coming up to coming up with anything. Lack of
speed when it comes to the economy for sure, any.
Speaker 1 (29:49):
Positive opportunities and there maybe if I was an investor,
I would be a lot richer than I am. But
there may be a kind of buying opportunity to the
extent that Europe is so written down, but it's on
the face of it, it's hard not to see all
these pessimistic things about Europe and not add more because
I think you look at it for exactly the reasons
Jenny said. They're going to have this question about whether
(30:11):
they deal within through the European Union, which they are
supposed to do on trade things. But you know he
will start the way he acts the where you talked
to him. He will immediately start ringing Macrol rather than
particularly going to Brussels. He's not going to pay much
attention to that. But to me, I went to a
meeting the other day where a group of bradslot came
(30:31):
across to see European politicians, and the message they basically
said is you have no idea about Trump, but you
are comparatively well informed about Trump compared with AI, because
you have no idea what AI is going to do
to the economy, you have no companies that are involved
in this, You have nothing that you can really show
(30:53):
the world in this. There isn't anything in continental Europe
that we even think about, and so I think that
is almost small friendly. I'm slightly setting bread up to
say how great Europe is. I certainly yeah.
Speaker 2 (31:05):
My effort to get anything out of you, but it
was positive on your is completely failed.
Speaker 4 (31:08):
I don't know.
Speaker 2 (31:08):
I look hopefully towards Brad, but I'm not sure i'll
get a better answer.
Speaker 4 (31:12):
Well, I mean, Europe does have a couple of interesting
AI companies, including.
Speaker 1 (31:18):
Which is great, but it is very, very small compared
with ending in America.
Speaker 4 (31:22):
But it is interesting that a lot of the leaders
of these AI companies are predicting that will we will
achieve the next benchmark superintelligence or AGI in the next
four years and so that you know, monumental economic and
social change. And we can debate what it is will
happen on Trump's watch.
Speaker 2 (31:41):
And does it matter in your world that money is
much more expensive because it's going to get the cost
of finances going up.
Speaker 3 (31:49):
I don't know that it matters.
Speaker 4 (31:51):
I think I think that's a that's an industry that is,
you know, focused on creating the next thing, and you know,
to them and we'll see if it's true and overly optimistic,
but they believe that, you know, Trump is making it
safe again for business.
Speaker 2 (32:06):
So in a year's time. I mean hopefully no one
here will remember what you said, and you know things
it will just go on the internet.
Speaker 1 (32:15):
I mean, you know no one will listen to it.
Speaker 2 (32:18):
What do you think will be Brad, What do you first,
what do you think we'll be talking about?
Speaker 4 (32:21):
Well, we'll be talking about Trump, right, because first role
of Trump is that you must always talk about Donald Trump.
I think in one year, this honeymoon period where he
has assembled a very broad coalition of supporters and partners.
Speaker 3 (32:34):
And allies, I think that will end.
Speaker 4 (32:37):
You know that that may not even last the next
few weeks or is as long as the first you know,
truly ambitious and.
Speaker 3 (32:45):
Aggressive executive action.
Speaker 4 (32:48):
I think you know, we've had the hottest year on
record now for the past few years, so we we
will almost undoubtedly still be talking about climate change and
whether AI and the requirements data center usage or making
the problems worse rather than better. And then knock on wood,
last thing I think we might you know, be talking
about global conflict. I mean, in the short term, we're
(33:10):
seeing the sunsetting of the of the war in Gaza,
maybe some prospects for the war in Ukraine. But if
we're talking about a deglobalized world, where America is pulling
back as the world's policeman. Then you know, power uphoors
a vacuum, and I worry what the next four years
brings in that.
Speaker 2 (33:27):
Regard, Jenny, that's taken a quite a lot of ground
for what we'll talk about nam certainly that's the classic, well.
Speaker 5 (33:38):
All the all the hopefully not a virus. I think tariffs,
tariffs will be Trump's going to be tariff man again.
I think in the year's time we see him probably
shift on China or his global tariff. He's probably going
to do something with the Canada Mexico agreement, rip that up,
(34:00):
which that will cause a lot of instability. So yeah,
I think tariffs will be on everyone's mind.
Speaker 1 (34:06):
Again.
Speaker 2 (34:06):
Jenny doesn't always like me quoting her back on this,
but I am struck by your answer. And when You've
got one of your many scoops a few years ago,
and I said, quite early in Trump's term, and I've
complimented you, and you came back saying, never a dull
moment in national trade policy, which I had to reply, oh,
there really have been, but you came into it at
a very good time exactly, John, what will we be
(34:30):
talking about.
Speaker 1 (34:31):
Well, basically, I think Jenny and Brad has said all
the main ones. I sort of agree with Jenny that
I think that the trade thing will come back in
because Trump cares about that. And I think also the
China thing will heat up again. It has to, because
I think it is the one thing where you can
unite America. You might be able to unite America and Europe,
(34:52):
and that by definition brings in both of those sides.
I think the main thing, and it's a very bad
cop out, is all the unexpected things. If you went
back a month ago, whoever thought that South Korea would
go crazy or that we'd all be looking at pictures
of Pacific palisades? And the element about being president and
(35:12):
Trump discovered it in the first Its first rain with
COVID is that you get surprised by things that come
at you from the other side of the world Greenland
Greenland exactly, or places you decide to invade just for
the hell of it. Those but it will be that
kind of thing. And you add in on top of
it all the difficulties of Trump that Trump causes anyone
(35:35):
who tries to predict things. If you go to China,
and you meet some very bright people whose job it
is to try and explain what's happening in America to Xijingping.
I think for them, the first Trump presidency was a
complete nightmare because every morning they woke up to discover
these tweets landing on them with places that they had
never ever thought of. It's hard to imagine that Jijingping
(35:57):
was thinking about the Panamaketer Canal and Greenland just a
few weeks ago, but now someone in Beijing is having
to muster on that. The obvious answers, what do you think?
Speaker 2 (36:07):
You've said it so well, John, and we've run out
of time.
Speaker 1 (36:09):
It's such a shame.
Speaker 2 (36:11):
But we have been at various times while we record this,
I should say that we've been watching footage from Washington,
the both the outgoing and the incoming president getting into
the motorcade and heading heading for the inauguration, people people
filing in, and you kind of get the sense that
people will be watching DC in various ways throughout this
(36:34):
World Economic Forum because his return casts such a shadow
or a spotlight on this, depending on what you think.
But thank you very much to all of you, to Brad,
to Jenny, to John and all of you in the
audience for joining us for this only second ever episode
of trump Andomics from Bloomberg. We hope all of you
(36:55):
here enjoyed it and those of you listening raped it
very highly and review it. It was hosted by me,
Stephanie Flanders, and I was joined by Bradstone, Jenny Leonard
and John Wikelthwaite. Thanks very much, Thank you.
Bloomberg Audio Studios, podcasts, radio news. The Golden Age of
America begins right now. I will very simply put America first.
Speaker 2 (00:26):
Welcome to trump Andomics, the Bloomberg podcast that looks at
the economic world of Donald Trump, how he's already shaped
the global economy and what on earth is going to
happen next. I'm Stephanie Flanners, head of Government and Economics
at Bloomberg, and this week we're recording Trump Andomics in
the Swiss Alps, in the Bloomberg DeVos House at the
(00:48):
World Economic Forum, And as we speak, we're looking at
pictures from Washington. We're recording on Monday, and the second
inauguration of Donald Trump is getting underway. So we did
I think it was fitting given the timing that in
this episode we asked the question, is Davos learning the
art of the deal? You know, not so long ago,
(01:09):
the billionaires, the heads of state, the tech moguls who
come here every January for the World Economic Forum, they
thought they were done with Donald Trump, and now they
seem to be pretty meekly falling into line.
Speaker 3 (01:23):
I'm super fired up for the future. It's going to
be very exciting.
Speaker 1 (01:28):
As the President said, We're going to have a golden age.
I'm actually very optimistic this time. He seems to have
a lot of energy around.
Speaker 4 (01:35):
Reducing regulation, and if I can help him do that,
I'm going to help him. I mean, seeing Donald Trump
get get up after getting shot.
Speaker 1 (01:43):
In the face and pump his fist in.
Speaker 4 (01:46):
The air with the American flag, it's like hard to
not get kind of emotional about that spirit.
Speaker 2 (01:52):
And I'm wondering what the implications are for everyone else
and for markets, for money, for investors, for the broader world.
And I've got a stellar cast here to discuss these issues,
Bloomberg's editor in chief, John Micklethwaite, and I'm very glad
that you made it this year. You were human ill
last year and lots of us had to pretend to
(02:12):
be you, which didn't go well at all. We have
Jenny Leonard white House reporter who focuses on international economic
issues and has been the first to an awful lot
of trade stories and policies ever since she came to Bloomberg.
And Bradstone, who's now editor of Bloomberg business Week, but
before that was Senior Executive editor for Global Technology at
(02:34):
Bloomberg News and the author of four books very relevant
to our discussions today, including Amazon Unbound, Jeff Bezos and
The Invention of a Global Empire Looking Around, and it
was written up rather nicely in an introductory story that
Bloomberg News wrote, You'd have to say the movers and
shakers descending on the World Economic Forum here in Devils
(02:56):
this week have already been paying their dues to the
new president, realigning their priorities to better fit his somewhat
unreconstructed America First Agenda. We had a great quote from
Lloyd Blankvine, the former head of Goldman Sachs. He said
he was reminded of what happened when Napoleon escaped from Elba,
(03:17):
and the French newspapers changed their tune pretty dramatically in
eighteen fifteen. They started off, in fact, the Monitor started
off characterizing Napoleon as a monster, but by the time
he got close to Paris, they announced that his Majesty
was arriving. And it definitely has sort of felt a
bit like that, And of course Donald Trump himself would
love the comparison with Napoleon. So let me start with you, Brad,
(03:40):
because there has been so much focus on how Silicon
Valley has sort of turned on a dime with this
president and some of the key figures like Mark Zuckerberg
in particular. But maybe what's changed it is just they've
been able to show their true colors.
Speaker 3 (03:55):
Everything has changed.
Speaker 4 (03:56):
Let's go about eight years ago and all the CEOs
in to the White House looking like they had some
bad fish the night before, and there was Tim Cook
and Jeff Bezos and Cheryl Sandberg.
Speaker 3 (04:07):
Zuckerberg didn't even go.
Speaker 4 (04:09):
Elon didn't go, and then withdrew from the Presidential Council
a couple of weeks later when Trump withdrew from the
Paris Climate Accords, and so what happened? I mean, they
felt unjustly persecuted during the Biden years, either through the
anti trust agenda or the regulation of crypto, maybe a
little bit of the anti tech mood in the media.
(04:30):
And they have come out of the last four years
in some ways you know, maga and it's startling.
Speaker 3 (04:38):
But look, credit Trump a little bit.
Speaker 4 (04:39):
He opened the tent large enough to make room for
all the tech leaders and they see a kind of
common cause with Trump on crypto, on anti trust, on
Mark and Dreesen calls it raising the tech flag building
acquiring investing, and I think you know, there's optimism, but
there's also opportunity.
Speaker 3 (05:00):
And they know that by closing up.
Speaker 4 (05:02):
To Trump and contributing to the inauguration and being up there.
Speaker 3 (05:06):
In the day is today, that that is good for business.
Speaker 2 (05:08):
I mean, you make the point though, that you know
they have shifted in the last eight years. It's not
just that they're sort of suddenly waking up to the
reality of a second Trump term. So how much were
you surprised by any of what's happened in the last time.
Speaker 4 (05:22):
Absolutely shocked, because you know, there did seem to be
a sense of legitimate resistance eight years ago.
Speaker 3 (05:30):
But the world has changed. And Trump, as you know,
as I said, you know, to his credit, he's evolved.
Now there's not a lot of consistency.
Speaker 4 (05:37):
I mean, he was the one who raised the idea
of banning TikTok and has just given it a reprieve.
He was anti crypto and just launched the Trump coin
and the Melennia coin to great enrichment of the family.
So he's seeing some of the political and frankly the
financial opportunities of being big Trump, being.
Speaker 3 (05:56):
Big tech, big Trump. I think, well, that might be
even more appropriate.
Speaker 2 (06:01):
Obviously financially, and that's a big part of all the
discussions around here. We have seen a lot of bedding
on and moving of money in line with the Trump agenda,
not just bitcoin, but price of oil, growth, stocks, the dollar.
They've all gone up there about eight percent. I was
looking at it this morning, since Donald Trump was elected,
(06:23):
and when I look at what the impact has already
been on countries like the UK, the big increase in
bond yield that's gone with this, you know, it feels
like already before he's done anything, any country with underlying weaknesses,
any government with underlying weaknesses, is having those exacerbated or
(06:44):
highlighted just by the fact of the Trump agenda, and
they're on the back foot. How would you say the
world has changed in particularly the sort of foreign policy
and financial markets.
Speaker 1 (06:56):
What Brad said about tech is actually quite true of
business in general, and not just linked to Trump. I mean,
I think if you look around the world, compared with
say eight years ago, business people everywhere since both more
fear and more opportunity in their relations with government. The
idea when I first started coming to devoce that business
(07:18):
was this wonderful thing that existed outside the realms of government,
and it was all about kind of doing good and
all that sort of stuff. Now business people realize that
you can both get clobbered by government, and that applies
from Trump, but it also applies to the European Union
and lots of other places. But also it's a chance
for enrichment, as you know, TikTok is suddenly discovering and
(07:39):
lots of other people that people in the Midwest now
will be thinking, well, maybe we can make money out
of tariffs if they come our way. There'll be people
you know around here thinking about different things that they
might be able together if Europe puts up bigger barriers
and so on. So there's both kind of fear and
greed are driving business and government together, I think generally.
But on this specific question you said, you can see
(08:01):
it everywhere. You know, Britain has suddenly got somewhat sort
of freaked out by a kind of semi Liz Trust moment.
You can argue how much of this is Rachel We've
spoilt also, you know, and how much of it is
just the simple fact that Trump has arrived and everything
has been thrown into greater kind of impact either good
(08:22):
or bad. And I think that's almost almost a way
to look at Trump at the moment. He's sort of
throw every weakness or every strength is somehow being massively exaggerated.
Trump is always about exaggerating.
Speaker 2 (08:33):
And when it comes to the UK, I mean if
you look at actually the sort of gap in borrowing
costs between the UK and the US has barely moved,
and yet all of the pressure, none of the pressure
in the UK has all been on the chancellor for
reasons that sort of pre date that change. Well, I
want it in a little bit good defense. I'm just
looking at the spread on as you'd expect any Bloomberg imparted,
(08:57):
we will get onto some of these kind of broader
packs of basic things like the cost of money actually
going up along.
Speaker 1 (09:03):
With all good news.
Speaker 2 (09:05):
But Jenny, obviously a lot of the big news we've
seen have been trying to game out how serious Donald
Trump is on his agenda for tariffs, what it will
mean for different aspects of the global economy and different companies. So,
since you're usually the first to find out these things,
what's your sense so far?
Speaker 5 (09:27):
Well, I would also say Washington has seen a big
shift since the last strund term on this. First of all,
they're all accepting the outcome that he's president again. But
we also see both parties coming together wanting to do
things together, which I think eight years ago we wouldn't
have imagined them talking about, oh, we need to actually
(09:48):
do something on the border, because that played into the
election outcome. Maybe Trump has a point here on trade,
on tariffs. They're talking about tariffs in a very different
way than eight years ago. The GOP that's in the
Congress right now, I think has many more Trump allies
than they did traditional free trade republicans eight years ago.
(10:09):
You know, we see TikTok is a massive shift from
a bipartisan, massively bipartisan legislation that passed saying this is
a national security threat, it has to be banned. All
of a sudden. Mike Walls, the incoming National Security Advisor, says,
this is a great app. I think I wish I
had it on my phone. That kind of shift is
what we're seeing right now. Doge is another example. This
(10:32):
is all things that we're seeing right now, and I
think when the rubber meets the road, we're going to
see if this actually sticks. I am a little bit
skeptical that everyone in the Republican Party will go along
with broad global tariffs hitting every country, every import. I
also think we've seen this from spending discussions in Washington.
When it comes to cutting your base in your district
(10:54):
or whatever project you care about, you know, they might
throw a fit. And I think that we'll see when
the rubber meets the road if they're actually that far
along in their shrift.
Speaker 2 (11:03):
Well, we have had and you've been involved with some
of them. I mean, there have already been sort of
competing narratives coming out of the administration, precisely on tariffs,
because you have a sort of grown up view supposedly
that says, oh, they're going to be targeted. There was
a Washington Post story that talked about that, and then
quite a lot of pushback that seems to have come
from even from Donald Trump himself.
Speaker 5 (11:24):
Yes, I will say we'll probably see a repeat of
what we saw eight years ago on the economic front
and the battle on the inside on tariffs. We have
two camps. Largely, even though Scott Besson and Hard Lutnik
I think are talking about tariffs now in a way
that are a little bit more in line with the
(11:44):
Hawks than Steven Mnuchan maybe did eight years ago as
his Treasury secretary. But we had reported that there is
an effort under way to stage the tariffs, to not
hit every country, every reimport with ten percent, twenty percent,
you name it, at one time, but kind of go gradually.
(12:06):
And the way it was described to us is this
is a negotiating play. We open this up, countries will
come to the table, we get something out of it,
but we don't cause massive inflation by hitting every good
with twenty percent. We report it this morning that he's
not going after China the way he promised on the
campaign trail. Of all the executive orders he will sign today,
(12:27):
there's not going to be anything on tariffs. There will
be no day on tariffs, even though everyone who's been
following his truth social posts, I think we're expecting China
tariffs for fentanyl, China tariffs for trade, Mexico Canada tariffs.
All that seems to have been put on pause for
we don't know how long. But that's the state of
(12:49):
play right now. And if you follow his public comments
but also privately, is what I'm told he has really
shifted on China to a much less adversarial tone. He
used to bring up in meetings with people his agrievances
about Beijing, and now we see he hopped on the phone.
(13:10):
He invited Chujingping to the inauguration. He's obviously not coming,
but sent his vice president. He tweeted about world peace
and he wants to save TikTok. And we also know
that nothing in Trump world really sticks for a very
long time. So this could all change tomorrow. If the
Hawks get in a room with the President and say, hey,
(13:33):
you know what, you really let down some of your
supporters who voted for you because you promised across the
world tariffs and you did nothing on day one, this
could sway him.
Speaker 2 (13:42):
I mean what is funny is, of course, of all
the things in Trump's agenda on which both parties he
has united, it is an aggressive antipathy towards China. So
if that's the one thing that he steps back from
will be interesting. But I mean, sorry, Elon, they need
for the need for pay Brad, this is this all, Elon.
(14:06):
I mean, you have the you emphasize some of the
things that the tech well will be quite happy to
see the back of if they can like the competition
efforts to reign in tech. But both the control on
immigration and indeed the measures against China stood to damage
quite large parts of silicon value will certainly not be
particularly in their interests. Are they Are they betting that
(14:28):
Elon's going to be the Trump whisperer.
Speaker 3 (14:29):
And I think we don't know.
Speaker 4 (14:31):
And I think you've put your finger on what will
be probably the most significant divide within the Trump rule
and coalition, and that's the line of thought represented by
Elon and his group of tech CEOs who are now
in government or advising government. And then I guess traditional
maga Steve Bannon and the like. And we're already seeing
clashes on issues like deportation and a T one B visas,
(14:55):
and it will be interesting to see how it plays out.
But I mean, you know, if you go back eight
years ago, what we know about Trump is that he
is he is, he can be influenced, and he's quite transactional.
Speaker 3 (15:06):
And so when you saw.
Speaker 4 (15:07):
The parade of CEOs like Tim Cook to the White
House to carve out relief for companies like Apple, I
think I think it often comes down to who is
the loudest voice in his ear and who has he
talked to most recently.
Speaker 2 (15:22):
So it's a big big tech will be fine. Potentially
big tech is betting they're fine. Small and medium sized
tech and other businesses, and probably, I.
Speaker 4 (15:29):
Mean, it really depends, you know. He said at one
point that he thought Mark Zuckerberg should spend the rest
of his life in jail. And now zuck Is is
at the inauguration.
Speaker 3 (15:37):
Today, will the attitude change?
Speaker 4 (15:40):
You know, Elon's interests are in some ways quite opposed
to Marx, and so if Elon does have the loudest
voice in the room, maybe Mark's on a little bit
of trouble.
Speaker 2 (15:49):
Joe mentioned it at the beginning. It is kind of
breathtaking the one eighty that corporate leaders seem to be
doing on ESG on a lot of their net zero goals.
We just saw the six largest US banks all quitting
the UN sponsored net zero alliance and McDonald's, Walmart. They're
(16:11):
rolling back all their DEI initiatives. Did they not mean
it ever? Or is this the thing that's performative?
Speaker 1 (16:16):
It is incredible. I will I'm slightly crossed with Lloyd
blank Vine for using the monitor thing, which I've used
countless times, but I advise everyone in this room to
go look at it. It is the most incredible series of
headlines that begin with the cannibal as escape from his hideout,
he will never escape the mountains, and then it ends
with the Emperor has arrived in Fontaine Lower with I
(16:38):
think this is imperial match just in fourteen days. But
that is pretty much what has happened with Suddenly CEOs
have jumped almost a medling and you can see it
just in terms of the sort of things they talk about.
They are moving back from things. I mean a lot
that some of this is posturing. It's just in the
same way as some of the diversity stuff maybe was
posturing in one way. Now some of the retreat is
(17:00):
the same thing. They don't want to get called out
for not taking profits as seriously as their rivals, and
a lot of these things they can fiddle with just
by changing the language a bit.
Speaker 2 (17:10):
But globally, is there going to be a divide though,
because I mean you've already seen it. We learned today
actually the mess is not taking away all of the
sort of moderating that it had outside of the US.
How a big company is going to navigate that? Oh,
I'm very green for the rest of the world, but
I've given up on all my climate things in the.
Speaker 1 (17:31):
I don't know what Brad. Brad may have different views
on this, but I tend to think there are two
different sort of things going on. One is the stuff
to do with tech and this enormous increase in wealth,
And if you look at throughout the history of commerce,
there's always been times where industries shoot from being the
people who everyone wants to be, whether you're Rockefeller and
(17:52):
Morgan one hundred years ago, to suddenly being the malefactors
of great wealth. And notwithstanding the recent love in I
think there is a real push to get the tech companies,
which is most obvious in Europe because they're all American,
but I think is generally there and it's going to
have touch points. We've got a film coming out on
the number of children who died because they'd be pushed
(18:14):
towards suicide videos and things like that. There is a
lot of nasty stuff around the tech companies per se,
and that's one issue, and we'll see what happens on that,
and that's obviously slightly altered by Elon's presence. But the
other one, more generally is business. I think on the whole.
You know, most business people, there's quite a lot to
(18:35):
gain from Trump if he does deregulate. Two big things
they don't like is one the idea of immigration taking
taking away workers they would need. And as Jenny was saying,
on tariffs, and that will be the area. But I do, yes,
I do think there is a there are divides there
and there will be a big divide between Europe and America.
I think that's very difficult to avoid.
Speaker 2 (18:54):
Have you seen, Jenny, have you seen sort of in
the in Washington and elsewhere, anyone kind of standing up
for DEI or well in climate I mean, there's a
lot of support in Congress for still continuing to come
up climate change.
Speaker 5 (19:12):
Yeah, but there's only so much you can do when
you're in the minority in both houses, so everything they
say kind of goes into avoid. I don't see anything
coming together as an actual initiative, you know, legislation they
can't really pass without any Republicans, So it's sort of statements.
Speaker 4 (19:30):
Yeah, And can I just add, I mean, for at
least for tech CEOs, they have seen, they have watched
as both the legal and the political environment shifted. So
the Supreme Court struck down race based admissions at Harvard,
you know, in terms of the political environment, just what
seems to be like a full shift away from the
principles of DEI. For a long time, they were criticized
(19:53):
for creating a discriminatory environment.
Speaker 3 (19:55):
They you know, did these.
Speaker 4 (19:56):
Annual transparency reports around the makeup of their workforces and
essentially showed no progress and got clobbered year after year.
And so I do think there's a feeling of like
genuine relief that they can, with political safety kind of
retreat from some of these commitments.
Speaker 3 (20:12):
And I think at least in the US, there's a
realization that the population is.
Speaker 4 (20:16):
A lot more conservative than what was if you look
at poles surrounding like mass deportation. You know, generally it
feels like, and the election demonstrated it, that the country
is supporting some of.
Speaker 3 (20:27):
These Trump ideals.
Speaker 4 (20:28):
And so with that cover, the tech CEOs at least
feel they're on safe ground to retreat from some of
these things that always made them feel uncomfortable.
Speaker 2 (20:35):
There had been a lot of hand ringing around the
development of AI and how the training of the large
language models and others on data was inherently biasing them
in favor of you know, stereotypes that came alongside the
DEI agenda, you know, concern about that. Do you think
that's going to stay or do will companies now feel
that I have to work about.
Speaker 4 (20:55):
Well, Zuckerberg just promised a lot more masculine energy and
the Facebook, so I don't look, I mean, I think
we're going to still hear those critiques level at the
tech companies, and I don't know if in this environment
they will have as much traction as they once did.
Speaker 2 (21:11):
So, Jenny, we have already talked implicitly about this, but
I'm interested in how it feels as a reporter on
the ground. There's always been a lot of corporate interests
behind the scenes, particularly in US politics and policy making,
but a lot of people have been sort of taken
aback by or found it jarring that just the very
(21:31):
explicit corporate interests literally sitting behind the president as he
gets inaugurated, the idea that policy is potentially being as
affected by Elon Musk and his interests as any kind
of broader ideological agendas. How does that affect the way
you're reporting and where the team's reporting.
Speaker 5 (21:49):
Well, first of all, what was very different this time
around was trum Ran his entire transition out of mar Lago,
which obviously there's no access for press, so it was
very hard to find out which CEOs he was dining with,
and that matters to the policymaking or jobs. You know,
everyone's there for a reason or an agenda, so that
(22:10):
was really different. It feels more explicit than it did
eight years ago because he came out of the gate
starting trade wars, and I remember talking to companies or
their lobbyists in DC and everyone was terrified to be
named in a tweet. So if you could just lay
low and deal with him behind the scenes, that was
(22:33):
sort of how big companies were approaching it last time around.
This time around, it seems like everyone is explicitly kissing
the rank. The story you mentioned also had the good
anecdote about the Coca Cola bottle in the end, they're
made a special inauguration edition. So everyone is out there
now on whatever truth, social X, any platform they can
(22:55):
say I am meeting with Trump, I am close to Trump.
That is much more explicit this time around. It obviously
will create I think instability in the way that every
single person that can go into the White House or
to mar A Lago to spend the weekend. There can't
shift policy on the fly, so it might be for
(23:15):
US reporters we might actually have a solid story but
are unaware that the president is having dinner in mar
A Lago with you name it and then completely shift
his policies. So I think the pace was already very
fast last time around, but the mar A Lago addition,
I think an access to this time around will be
(23:36):
could be more challenging and more interesting to figure out
how we well.
Speaker 2 (23:40):
It's true that we'd had an economic statecraft team pretty
much since Trump got elected the first time, and this
time is very much or at least alongside that, we
also have the corporate statecraft team, and I guess we'll
see how they both do. I mean, John I said
at the start that in a sense, this was many
people on the outside of the US to say, well,
this is nothing new. There's always been a lot of
(24:01):
business interests involved in US policy, and there's plenty of
people I've spoken to international policy makers, particularly, I would say,
in what you might call the global South, who say,
thank goodness, we now have a nakedly transactional president. You know,
in America is on the world stage admitting that it's
totally self interested and it's just out for its own interest,
(24:23):
just like every other country, and it's not pretending to
have all these high ideals. You know, this is a
government I can do business with.
Speaker 1 (24:30):
I think there is a degree of that, definitely, you
can feel it. The only thing is on that I
sort of be careful what you wish for, because in general,
that world of free trade and globalization which people like
me supported and which I think Donald Trump said I
was wrong about everything all my life, specially tariff, especially tarist,
but that was a world that enriched the poorer world,
(24:54):
and I think from that point of view, the global
South would be ill advised to celebrate this thing. I
can see why that if you are a copper magnate
in some place, this might sound great in the short term.
And yes, it is perhaps more honest than some of
the talk about talking about freedom and then coming in
to beat people up behind it. But I think you
(25:14):
have to be careful what you wish for. I did
listen to Jenny and a bit. It did strike me
that some of this stuff could reverse relatively quickly. On Trump,
you know, he does deeply believe in tariffs. I think
it's always been a been a constancy of his. So
at some point there is going to be an argument
with the tech people on Trump and Elon at some
(25:34):
point that could come apart, and more generally, I think
on things like DEI and greenery without signing too sort
of bled about it, there are other forces that will
keep pushing it forward. One is just the pressure from investors,
which I don't think will change that much in terms
of different categories. Secondly, it is on climate change. You
(25:55):
just have the fact that we have to deal with
the climate, and I think lots of people see that.
I think at the end, yes, you might see changes,
but I think I would still expect corporations will retreat
from some of the more publicly extreme versions of DEIS
you might put it. But I don't think that's going
to be. It's not going to go all the way
back to how it was in the nineteen fifties, where
(26:16):
a group of white men sat and decided everything.
Speaker 2 (26:19):
And in short term, I think the biggest thing internationally
that people will be dealing with is the global financial
side effects of everyone betting on a sort of super
sore away America that potentially has unsustainable growth but certainly
inflicts higher costs of borrowing.
Speaker 1 (26:35):
You already see the bond rate, the bomb market. I
think I've put a Trump in the bond market will
police you, and that seems to be what's happening. Seems
to be the one thing he's frightened of is if
the bomb market turns on you. That that's something that
people can see. And so far Trump has always focused
We had a very good bit and the last edition
of Trump andomics on this. Trump is always focused on
(26:57):
the stock market. If you're running a government to the end,
it's the bomb market, which probably matters more.
Speaker 2 (27:03):
Jenny, I can't help mentioning we've sort of got you
mid Atlantic almost because although you're still technically in DC,
you will be moving to Berlin. And I've sort of
intrigued how you think reporting this story from Europe. I mean,
I've said you have to still be on the phone
to Washington a lot. You'll be kind of covering both sides.
But how do you think the Europeans will be dealing
(27:26):
with this agenda?
Speaker 5 (27:30):
From my reporting right now, I would say they're not
as prepared as they should be. This is a little wonky,
but there is a big trade case that the Europeans
brought against China. You might remember China used economic version
against Lithuania. It was about them opening a Taiwan trade office.
(27:53):
This has been in the works the entire Biden administration,
with lots of support from the Biden administration, and they
are seems set to withdrawa case which we reported last
week was angering the Trump team because it reinforces their
belief that the Europeans are weak and they're not willing
to stand up to China, and Brussels is not willing
(28:13):
to defend one of its member states, and arguably a
smaller one. So I will be on the phone with
people in Washington. I think I will be on the
phone with people in different capitals and the people that
Trump sens there.
Speaker 2 (28:27):
On this sort of transactionalism. I mean, if there's goment,
there are some governments around the world who think, okay,
this is quite a straightforward thing. We just have to
work out how to sell something to Trump, how could
make it be in his interest. Europeans maybe they're a
lot that they're not so good.
Speaker 1 (28:42):
At being transactional.
Speaker 5 (28:44):
They're a little bit slow compared to the Trump timeline,
So I think if something gels and Brussels, Trump has
moved on to a new demand. So the transactional nature
I think really works well with countries one on one.
I think Trump obviously seems really close to Jorgo Maloney,
so he will find an ally and her and Victor orban.
(29:08):
But once you actually have to respond as a body
in Brussels, I don't know how well that's going to
work with the transactional So I could foresee a bunch
of fights in Europe on how to respond. Do you
stand up to him if he threatens tariffs or can
you work out something else that's good for your country.
Speaker 2 (29:28):
I mean John has been an orgy of sort of
talking Europe down, one could say, in response to the
to the Donald Trump's victory, and also what's happened in
financial markets, and just an enormous spotlight on whether it's
the lack of defense spending, just the lack of speed
and coming up to coming up with anything. Lack of
speed when it comes to the economy for sure, any.
Speaker 1 (29:49):
Positive opportunities and there maybe if I was an investor,
I would be a lot richer than I am. But
there may be a kind of buying opportunity to the
extent that Europe is so written down, but it's on
the face of it, it's hard not to see all
these pessimistic things about Europe and not add more because
I think you look at it for exactly the reasons
Jenny said. They're going to have this question about whether
(30:11):
they deal within through the European Union, which they are
supposed to do on trade things. But you know he
will start the way he acts the where you talked
to him. He will immediately start ringing Macrol rather than
particularly going to Brussels. He's not going to pay much
attention to that. But to me, I went to a
meeting the other day where a group of bradslot came
(30:31):
across to see European politicians, and the message they basically
said is you have no idea about Trump, but you
are comparatively well informed about Trump compared with AI, because
you have no idea what AI is going to do
to the economy, you have no companies that are involved
in this, You have nothing that you can really show
(30:53):
the world in this. There isn't anything in continental Europe
that we even think about, and so I think that
is almost small friendly. I'm slightly setting bread up to
say how great Europe is. I certainly yeah.
Speaker 2 (31:05):
My effort to get anything out of you, but it
was positive on your is completely failed.
Speaker 4 (31:08):
I don't know.
Speaker 2 (31:08):
I look hopefully towards Brad, but I'm not sure i'll
get a better answer.
Speaker 4 (31:12):
Well, I mean, Europe does have a couple of interesting
AI companies, including.
Speaker 1 (31:18):
Which is great, but it is very, very small compared
with ending in America.
Speaker 4 (31:22):
But it is interesting that a lot of the leaders
of these AI companies are predicting that will we will
achieve the next benchmark superintelligence or AGI in the next
four years and so that you know, monumental economic and
social change. And we can debate what it is will
happen on Trump's watch.
Speaker 2 (31:41):
And does it matter in your world that money is
much more expensive because it's going to get the cost
of finances going up.
Speaker 3 (31:49):
I don't know that it matters.
Speaker 4 (31:51):
I think I think that's a that's an industry that is,
you know, focused on creating the next thing, and you know,
to them and we'll see if it's true and overly optimistic,
but they believe that, you know, Trump is making it
safe again for business.
Speaker 2 (32:06):
So in a year's time. I mean hopefully no one
here will remember what you said, and you know things
it will just go on the internet.
Speaker 1 (32:15):
I mean, you know no one will listen to it.
Speaker 2 (32:18):
What do you think will be Brad, What do you first,
what do you think we'll be talking about?
Speaker 4 (32:21):
Well, we'll be talking about Trump, right, because first role
of Trump is that you must always talk about Donald Trump.
I think in one year, this honeymoon period where he
has assembled a very broad coalition of supporters and partners.
Speaker 3 (32:34):
And allies, I think that will end.
Speaker 4 (32:37):
You know that that may not even last the next
few weeks or is as long as the first you know,
truly ambitious and.
Speaker 3 (32:45):
Aggressive executive action.
Speaker 4 (32:48):
I think you know, we've had the hottest year on
record now for the past few years, so we we
will almost undoubtedly still be talking about climate change and
whether AI and the requirements data center usage or making
the problems worse rather than better. And then knock on wood,
last thing I think we might you know, be talking
about global conflict. I mean, in the short term, we're
(33:10):
seeing the sunsetting of the of the war in Gaza,
maybe some prospects for the war in Ukraine. But if
we're talking about a deglobalized world, where America is pulling
back as the world's policeman. Then you know, power uphoors
a vacuum, and I worry what the next four years
brings in that.
Speaker 2 (33:27):
Regard, Jenny, that's taken a quite a lot of ground
for what we'll talk about nam certainly that's the classic, well.
Speaker 5 (33:38):
All the all the hopefully not a virus. I think tariffs,
tariffs will be Trump's going to be tariff man again.
I think in the year's time we see him probably
shift on China or his global tariff. He's probably going
to do something with the Canada Mexico agreement, rip that up,
(34:00):
which that will cause a lot of instability. So yeah,
I think tariffs will be on everyone's mind.
Speaker 1 (34:06):
Again.
Speaker 2 (34:06):
Jenny doesn't always like me quoting her back on this,
but I am struck by your answer. And when You've
got one of your many scoops a few years ago,
and I said, quite early in Trump's term, and I've
complimented you, and you came back saying, never a dull
moment in national trade policy, which I had to reply, oh,
there really have been, but you came into it at
a very good time exactly, John, what will we be
(34:30):
talking about.
Speaker 1 (34:31):
Well, basically, I think Jenny and Brad has said all
the main ones. I sort of agree with Jenny that
I think that the trade thing will come back in
because Trump cares about that. And I think also the
China thing will heat up again. It has to, because
I think it is the one thing where you can
unite America. You might be able to unite America and Europe,
(34:52):
and that by definition brings in both of those sides.
I think the main thing, and it's a very bad
cop out, is all the unexpected things. If you went
back a month ago, whoever thought that South Korea would
go crazy or that we'd all be looking at pictures
of Pacific palisades? And the element about being president and
(35:12):
Trump discovered it in the first Its first rain with
COVID is that you get surprised by things that come
at you from the other side of the world Greenland
Greenland exactly, or places you decide to invade just for
the hell of it. Those but it will be that
kind of thing. And you add in on top of
it all the difficulties of Trump that Trump causes anyone
(35:35):
who tries to predict things. If you go to China,
and you meet some very bright people whose job it
is to try and explain what's happening in America to Xijingping.
I think for them, the first Trump presidency was a
complete nightmare because every morning they woke up to discover
these tweets landing on them with places that they had
never ever thought of. It's hard to imagine that Jijingping
(35:57):
was thinking about the Panamaketer Canal and Greenland just a
few weeks ago, but now someone in Beijing is having
to muster on that. The obvious answers, what do you think?
Speaker 2 (36:07):
You've said it so well, John, and we've run out
of time.
Speaker 1 (36:09):
It's such a shame.
Speaker 2 (36:11):
But we have been at various times while we record this,
I should say that we've been watching footage from Washington,
the both the outgoing and the incoming president getting into
the motorcade and heading heading for the inauguration, people people
filing in, and you kind of get the sense that
people will be watching DC in various ways throughout this
(36:34):
World Economic Forum because his return casts such a shadow
or a spotlight on this, depending on what you think.
But thank you very much to all of you, to Brad,
to Jenny, to John and all of you in the
audience for joining us for this only second ever episode
of trump Andomics from Bloomberg. We hope all of you
(36:55):
here enjoyed it and those of you listening raped it
very highly and review it. It was hosted by me,
Stephanie Flanders, and I was joined by Bradstone, Jenny Leonard
and John Wikelthwaite. Thanks very much, Thank you.
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