Trump Hits Auto Imports With 25% Tariff

Published Mar 27, 2025, 7:48 PM

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President Donald Trump signed an order to slap a 25% tariff on auto imports, expanding his trade war designed to bring more manufacturing jobs to the US.

Trump said the tariffs would go into effect on April 2. The administration projects that the tariffs would result in $100 billion of new annual revenue to the US. Wednesday’s move comes before a broader announcement of reciprocal tariffs expected April 2.

“What we’re going to be doing is a 25% tariff on all cars that are not made in the United States,” Trump said at the White House on Wednesday. “We’re going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they’ve been taking over the years.”

Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:

  • Bloomberg Detroit Bureau Chief David Welch about the Trump Administration's planned tariffs on auto imports.
  • Former Chair of the White House Council of Economic Advisers Jared Bernstein about the impact of tariffs on the US economy.
  • Bloomberg Politics Contributor Jeanne Sheehan Zaino and Republican Strategist Chapin Fay about the immigration policies of the Trump Administration.
  • Bloomberg News SEC and CFTC Reporter Lydia Beyoud as Trump's SEC pick undergoes his confirmation hearing on Capitol Hill.
  • Former Republican Congressman and Former Air Force Intelligence Officer Denver Riggleman about the continued fallout from the Signal group chat.

Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

With a look at how markets are digesting the news we got out of Washington yesterday. Thank you so much. That more than seven percent of cline on GM right now an American auto manufacturer, which of course is something that the President says he wants to see thrive, is American auto manufacturing. That in part is the reasoning why he made the announcement he did yesterday when something he long has promised, tariffs on auto imports, were formalized.

This is the beginning of Liberation Day in America. We're going to charge countries for doing business in our country and taking our jobs. Take it out wealth. What we're going to be doing is a twenty five percent tariff on all cars that are not made in the United States.

Let's talk a little bit more about what this means with Bloomberg's Detroit Bureau chief David Welch. David it's great to have you with us today on Bloomberg TV and radio. The way this works here, we're not just talking about foreign automakers. These are in many cases cars made by US automakers that are assembled in other places. We saw data from Ward's Automotive and Barclay showing for FOD that's seventy eight percent made in the US. STILLANT is fifty seven, GM fifty two, so we would presumably be terifing the percentage of the vehicle that's assembled somewhere else.

Is that right?

That's right, and that's why GM is one of the hardest hit by this as it's proposed, as it's going to be levied right now. GM makes a lot of vehicles here, but they also make very very important models like Chevalry Silverado GMCC are pickup trucks in Canada and Mexico. Their cheapest vehicle, their entry Oval Chevy Tracks SUV made in Korea that would be hit with a twenty five percent tariff on the Mexican and Canadian vehicles. Those are a US MCA compliant. That's the trade deal between Canada, Mexico and the United States. They will be they will have tariffs levied on the non US content of those trucks. So let's just say a Silverado pickup was I'm just making this up, but if it was half US made parts, the other half of the value of that truck would be hit with the terraffs and that can still be a substantial amount of money that's added to the cost of this vehicle when it comes across the border. And then whether consumers paid or GM eats it or somewhere in the middle remains to be seen. But it's a situation where all the automakers are kind of scramming to figure out how they're going to manage this Toyota. Half of the vehicles they sell in the US are imported, some from Canada, but a lot from Japan. They're going to really have to struggle to kind of to deal with this if it's going to be long term.

Well, David, I want to expand more on what you were just saying about the question of who ultimately eats these higher costs. How confident are automakers right now in their pricing power, their ability to pass on higher input costs when we have signs of a softening consumer ata, softening consumer sentiment and still relatively high interest rates.

You do, and you also have relatively high vehicle costs. Already, we had record new car prices about two years ago. They've come down a bit, but these are still historically expensive new vehicles out there. The average price of new vehicles is not far from fifty thousand dollars. You know, ten years ago it was in the thirties, So you know, they're expensive vehicles out there with high interest rates that means high monthly payments. Consumers have been pushing back. You did start to see some activity with rebates and other deals, and you're seeing some of that now, but still big price tags in the showroom, so there's not a lot of places to bury these tariff costs. You will see some negotiating between car companies and their suppliers, maybe getting the suppliers to try to eat some of this cost, but their margins aren't very good, so you know, end of the day, the car companies themselves are either going to have to eat this or then we decide not to make certain vehicles to sell in the United States if it's that bad, and if the tariffs last a long time. You know, I don't want to say anyone's doing that yet, But the teriffs would have to be a long term thing before that happened. But it's you know, these are sort of the options of decisions that car companies would have to look at.

Yeah, you're in a world where Honda, Subaru, and Nissan are assembling a greater share of their vehicles in the US than General Motors itself. So this then becomes a question. If I'm hearing you write about how long these tariffs stay in place, how long can an automaker wait around to find out?

Yeah, look, that's that's a big question. I think they will eat these tariffs for months, you know, maybe a year or longer. It's just you know it. It also depends on the conversations they're having with the Trump administration, and they're engaged on a daily basis trying to figure out where this is going. And the big question is, Okay, if, if, if Trump's first term is any guide, do we just need to see the other countries he's negotiating with Budge on some of the tariffs they have on the US. And at the same time, General Motors, Stalantis, Toyota say they're going to move a vehicle that's made overseas or in Mexico to a factory in the US, or do they open a new plant in the US. Do they make a concession in that way where they're gonna invest more here. We've seen Trump already, you know, talking up the fact that Apple is going to invest more in the United States. He talked up a twenty one billion dollar Hundaie investment that they announced a couple of days ago. He likes to see these things, he likes to talk about them. So the concessions maybe on two fronts. The country's you know, Mexico, Canada, the e you who is negotiating with, and then the companies here who he wants to see bring jobs and investment back. That may be the way that gets companies out of a long term tariff structure that they find very difficult to operate in.

All right, David Welch, thank you so much, Bloomberg's Detroit bureau chief, helping us walk through the impact these tariffs could have on auto companies. But by extension, there also is a question as to how exactly these levies may help or hurt auto workers. And it was the impact on auto workers that the White House Press Secretary Caroline Levitt was touting from the White House earlier today.

I would just like to emphasize these auto tariffs yesterday are a big deal for auto workers in the industry. And you saw the United Auto Workers' Union Sean Fain, who wasn't the greatest fan of the president on the campaign trail, came out this morning and applauded the President for this move, saying it's a great thing for auto workers who have been sold out by unfair trade practices.

Let's see if Ared Bernstein agrees. Former director of the White House Council of Economic Advisors during the Biden administration, back with us on Balance of Power on Bloomberg TV and Radio. Jared, good to see you, as always. Obviously, during your tenure at the White House, we talked with you frequently about issues surrounding labor, including the UAW strike when it was ongoing. Is there an argument to be made here that those workers stand to benefit from the levies that were just announced.

I don't think so, And I've heard miss Levitt argue that tariffs actually will make consumer goods cheaper, not more expensive, So I think some of this analysis is kind of upside down. In fact, It's widely agreed upon that tariffs are an import tax and that at least some share, and I think most research suggests the lion's share is passed on to consumers in the form of higher prices. We have autoanalysts out this morning suggesting that these new tariffs on autos, these sweeping tariffs on all auto imports and auto parts, will raise the price the average price of a car between five and ten thousand dollars. That's real money for American consumers. And in that regard, I think liberation Day is when American consumers are liberated from paying lower costs on imports, and I'm not sure they're going to like that.

It's good to see Jared welcome back. If this is liberation Day, as the President is calling it, is he suggesting that at some point this tariff battle will result in no tariffs. Is zeroing out of trade relationships? Is that not an admirable goal.

I do think that would be an admirable goal, but I'm not sure why you have to start a trade war to get there. That's kind of like it's saying an admirable goal is to make myself feel better by not banging my head against the wall. That's true, but I probably a good idea not to start that in the first place. Look, all of this comes down to an idea that Dean Baker and I explored in an op ed in the Wall Street Journal today, where you ask yourself, even the administration, by the way, contrary to the spokesperson you played, even the administration says pain first, gain later. So really, I think their best argument is that these tariffs will eventually reindustrialize America. And I think that argument is just patently wrong. There's no evidence to support it. Lots of evidence pushing the other way. Happy to take anybody through that argument, but I don't see pain first, gain later. I see pain first.

Pain later.

Well, so let's get into that a little bit more, because in that OpEd you mentioned in the Journal today, you say that even if US manufactured exports increased enough to close the trade deficit, which you say is an extremely unlikely event, and if employment grew proportionally, our manufacturing workforce share would climb only from eight percent to nine percent, which obviously is not super dramatic. Jared, if this is not the means through which to have that manufacturing economy revival, what actually can juice it.

Yeah, really important question, Kaylee. So first of all, that calculation is based on zeroing out the trade deficit that hasn't happened since the mid nineteen seventies. We can talk about whether that's something that policy should try to do. I happen to believe that there are times when the trade deficit is a clear drag on growth and particularly on some of our manufacturing communities. So some of this impetus or motivation makes sense, which takes us to the second part of your question. We had even more success than I expected when it came to what was called our industrial policy in the Biden administration. We saw a doubling of factory construction on US soil based much more on carrots than stix tariffs, just these kind of broad based tarffs. I actually think targeted tariffs can can have a role, But these broad based tariffs have never been shown to lower the trade deficit. They've never been shown even if you do lower the trade deficit, for that to translate into more factory jobs. We had a lot more success tapping an untapped demand or elasticity for people who wanted to build factories in this country. In the area of clean energy, electric vehicles, battery production. And when I say people investors, I don't just mean American investors, I mean foreign investors. We had a surge in foreign direct investment. Now many of those factories are underway, those shovels are in the ground, and that's still ongoing. But that has proven already to be a lot more successful than the tariff's strategy.

People spent the four years many economists spent the four years of your time in the White House with Joe Biden Jared predicting a recession and getting back to the no pain, no gain situation. Here in your op ed, you write, they failed to do so, continue to double down on their unpopular agenda. We may find ourselves testing Howard Lutnix assert that a recession will be worth it.

So when does the recession begin?

Well, this is Howard Lutnick, the Commerce Secretary, saying, Yeah, the policies that we're implementing, you know, possibly could be recessionary, but it will be worth it because of the gains on the other side. And as I explained earlier, and as we go through in some detail in the piece, that's just you know, wrong argument with no historical backing, no theoretical backing, every reason to believe pain now, pain later on that as far as a recession is concerned, one thing going for the Trump team right now is that they inherited a strong economy, and at least as far as the hard data are concerned, it's still a very solid economy. I mean, I was looking at the UI claims this morning and they're not even flashing yellow. And I think if you're not seeing layoffs in the labor market, then you're not really looking at recessionary conditions now. I also noticed that Goldman Sachs marked down their first quarter GDP estimate this year, so the quarter that ends at the end of this month to one percent. Now that's down from something like, you know, well north of two for a Q four and so that kind of a deceleration that really could be problematic in terms of the labor market. But at least as far as the hard data is concerned, right now, the economy is still solid.

Well, so when we consider the domestic economy and how it will compare internationally, obviously the impact of tariffs, Jared will not just be felt in the United States, but in comparison to countries that will have to be grappling with this, like Europe, for example, which in many places seems to be abandoning austerity entirety getting ready to spend on defense and stimulate. The US currently is trying to really rein in federal spending. No such stimulus appears to be on the horizon. How could that ultimately stack or make the US impact be felt more acutely than even the impact on other countries that the President is currently trying to influence.

First of all, the trade isolation the American fortress will go it alone, I think is really antithetical to growth in the near ternament in the long term. And I think if the President and his team we're talking about a regional trade block, maybe North America, I think that maybe we could have a better conversation. But clearly their actions and threats against Mexico and Canada suggest they're not even thinking in terms of regional trade blocks. And I think this is damaging for growth. And again, this is coming from a person who is well aware of the costs of persistent trade deficits and unfair trade on communities that have been left behind In terms of fiscal pressure, I think we probably will see some fiscal worsening of the outlook from the tax cuts. And I suppose you could look at that and say, well, maybe there'll be some positive fiscal impulse there, some more spending. That's really a function of whether they're just extending existing tax cuts, which comes with no new fiscal impulse, that's just status quo in terms of it which macroeconomic impacts, or whether they're adding new tax cuts. Now, if they add new tax cuts, which they have talked about, that could induce the economy a bit more, but of course it worsens the fiscal outlook even more. And I don't know how markets are going to love that so much.

He is former chair of the White House Council of Economic Advisors.

Now he's a free man.

Jared Bernstein, it's great to see you back, Jared on Bloomberg TV and Radio alongside Kaylee Lines, I'm Joe Matthew will assemble our political panel coming up next on Balance of Power.

Here on Bloomberg.

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Thirty thousands of people showed up to protests last evening in Summerville, Mass. If you're with us on ninety in Boston, this is a big local story here and it's frankly become a big national story. If you're with us on YouTube, get a load of this. This is the scene right now on a street in Somerville, mass where a Toft's University student, remisa Os Turk of Turkey, was approached by playing clothes masked police officers and promptly arrested. If I could play the audio, you'd hear her screaming at this point. They'd take her backpack off, put it on the ground, handcuff her, get her in a car, and drive her away. Widely circulated online here, This video, according to oz Turk's lawyer, is actually the property of the Department of Homeland Security. This is a thirty year old from Turkey, Fulbright scholar PhD in Child Study in Human Development on an F one student visa at Tufts University. I guess we can hear it now as you hear her try to talk her way. I guess out of this, not sure who these people are. They do eventually identify themselves. They say we are police officers, but they're not wearing uniforms. If we can start that by the way back from the beginning, you'll hear her reaction when she first sees these police officers approach her. Here, we just got an update. This is from the Boston Globe. Osterc who is detained by ICE agents, has already been moved to Louisiana. She had been moved to Louisiana by the time a judge ordered her kept in Massachusetts. The offense here supporting Hamas, DHS and ICE investigations. This is according to an emailed statement from the Department of Homeland Security found Osterk engaged in activities in support of Hamas without sharing evidence of the claim or responding to questions about the video. Now we're isolating this case here because we want to talk about optics, or as the great political producer Adam Belmar used to call polyoptics, a couple of clicks up on the satellite radio dial at potus. Polyoptics when you consider something like this rolling on TVs across the country on phones and computer screens, coupled with some of the other stories that we've been hearing. We've been talking about tariffs a lot. Here a breakdown, for instance, in the Social Security Administration. Nobody's answering the phone, the website is crashing. Add the signal chat room flap, and you start to create a composite here, an optical composite that is in itself a political character, a political issue. And that's where we start now with our political panel. Genie Shanzano is here Bloomberg Politics contributor and of course senior Democracy Fellow at the Center for the Study of the Presidency and Congress's our democratic analyst, alongside Republican strategist Chape and Faye, founder Lighthouse Public Affairs. Now, of course, Genie, you're an educator, you're political science professor at Iona University. And what's happening on college campuses like this, this is not an isolated incident, is something that has the attention and has brought much outrage from Democrats. If you could see the statements from the mass delegation following this protest last night in Somerville, what is the optical residue what's the impact of this politically.

Yeah, I mean the ring camera footage that you're showing is utterly chilling, and you just played it. You can hear it. It's all over the internet. We have to take a step back and of course say that we do not know. And this is part of the problem. If she was indeed or is being charged with aiding and abetting Hamas, that would be illegal and that could get her detained and thrown out of the country. The problem here is that all people know is that she co authored She is a PhD candidate, and she co authored an editorial in the student newspaper last March which did not mention Hamas. It took on the administration at the university and it was calling for them to divest from their connections with Israel, and it was talking about her concern about the Palestinian people that had been killed. And so the concern is that they are taking people up off the street and throwing them in jail without due process because of their political views. So that is the concern, and that's why we're seeing you know, these you know, thousand plus people out in Powderhouse Square who are calling for her to at least be brought before a judge and charges against her be made explicit.

The Mass Attorney General Andrea Campbell said, quote it looked like a kidnapping unquote Senator ed Marky of course, democrat from Mass quote Trump sent massed law enforcement officers to arrest Ramesa oz Turk. A TUSSA university grabs student with legal status without a criminal charge unquote.

Chape and faye, what's your thought on this?

Is the impact corrosive or is this in fact going to help Donald Trump politically because he's doing what he said he was going to do.

I'll tell you what's corrosive.

Speaking of kidnapping, there's still an American in captivity in Gaza. They have the remains of other Americans that they refuse to release. Hamas is a terrorist organization. And if you were here on a student visa, you are a guest in this country. If you are supporting Hamas a terrorist organization and making your fellow students feel unsafe on campus, you gotta go. That's plain and simple. And you know, we talk about, you know, outrage from democrats, Donald Trump sneezes, then you get outrage from democrats. So I think we have to go down a little layer here, right, There will be due process for this woman. They will have to show some evidence of what they're alleging, right, and there that will play out. But if you are a guest in this country and you are supporting terrorist organizations and calling for death to America or whatever else all these Hamas supporters are doing, you should absolutely be sent back.

Home, will you?

Just a couple of important things though, chape and if in fact there is due process, that changes the story. That's one of the points of criticism here. This is somebody who so far has not been charged. What are we in a world in which a student op ed results in a visa being canceled.

I don't know, right, I don't know. Like Genie said, we don't know what the evidence is or if there's evidence there. And of course if there's no evidence, and jesus a student who wrote an editorial, then she should she should, you know, maybe be able to stay. But the United States government America gets to pick and choose who gets access to this country. This is the whole point of what's going on. And you're seeing some real world implications happen, and you know it's not pleasant, right, But It's also not pleasant that American Jewish students are getting harassed. It's like Nazi Germany. The left likes to call Republicans Nazis, but we're not the ones who are preventing Jewish students from entering buildings, taking over administrations in a violent manner, and then asking Jewish students for papers. This is all preposterous. If there's any shred of evidence that she has any connection to Hamas, I mean you're seeing here in New York right, the Columbia group that has been support doing these protests that have been taking over buildings was reactivated after being dormant moments before October seventh. I mean that needs to be investigated. This is absolutely preposterous. It's outrageous. And if you are actively calling for death to Americans and you are not a citizen and you are here as a guest, you got to go.

I completely appreciate the spirit of what you're saying here, Chapin the fact is, though we wanted to know what would happen when this stuff started happening. Forget mass deportations for a minute, in this case, targeted student protesters on campuses, just like people wondered what will be the impact of family separations if that starts to happen again, Genny, seeing sometimes changes perceptions to seeing this video change the way you're looking at this.

It doesn't change the way I am looking at it, but certainly it can change people's views. And nobody knows that better than Donald Trump. I mean, he went on Meet the Press right when he was elected and he said that he told them that this is a concern. But let's just take a step back and let's just all agree that this particular woman has been accused of nothing yet that we know. There is no evidence she intimidated anybody, let alone a Jewish student. There is no evidence that she did anything to support Hamas. All we know is she was picked up off the street and she was a co author of an op ed in a student newspaper last year which talked about the need to think about the Palestinians being killed and also asking her own university to divest from Israel. That is free speech, that is not unconstitutional. Now, obviously, if there is evidence that she is colluding with or materially supporting Hamas or any other terrorist organization, that would be a different story. But the concern of the people protesting today is that she has not been produced or charged yet. She needs to be, that's what the judge called for, and I'm sure she will be. But she was taken very quickly out of the state to Louisiana, and so all of this is concerning when it's looked at in total. These the concerns that you're hearing out there about kidnapping and otherwise, this young woman is a Fulbright scholar, a PhD candidate, and we need to be very very careful how we treat people coming into this country. And so I do think there is a chilling effect even in these cases where you would prove this stuff in the end, in this case, nothing has been proved.

The OpEd we're talking about was in the Tough Daily last March. She identified herself as a graduate student for Palestine. They called for Toughs administrators to acknowledge the Palestinian genocide and disclose its investment to Genie's point, and divest from companies with direct or indirect ties to Israel. The op ed makes no mention of Hamas. So, getting back to your point, Chapin, if there in fact is some evidence here at some point the administration will need to make this public.

No, of course, and I would have liked to agree. I am personally a First Amendment absolutist. However, let's take an even farther step back. Should we be giving visas and student visas and guest visas to people who advocate for organizations that have Americans currently in captivity? I don't think so.

So this comes back to the actual attainment of the visa. This person shouldn't have been allowed to come here to study, is what you're saying.

Well, I'm not making that judgment, but I think that's an argument and a discussion that needs to be had at a higher level. Right, I mean, it is a privilege, not a right to immigrate to this country. I'm not anti immigrant. We all come from immigrants. It makes this country amazing, Right, that's the whole point of America. But open borders doesn't work.

Right.

There are students who have left Columbia and these colleges because they are unsafe. And if you ascribe any other ethnicity or national origin other than Jewish or Israeli, we would be having a very different conversation about people who have been put in jail for making other students unsafe, but we're not. We're having a conversation about the right of someone to protest on behalf of a terrorist organization.

Felt less than a minute left here, Jeanie.

University officials say they're in contact with authorities. They hope Ramesa has provided the opportunity to avail herself of her due process rights. Is there a legal path for the school or you just have to watch and see what happens.

Yeah, you know, the university said they were not They were not privy to any of this information, and so they seem to be sort of maintaining a watchful I think again, on behalf of this student, we must say we do not have evidence yet that she was protesting in favor of Hamas. Even if she was, that may be considered political speech because what's illegal is material support, not speech. But so far, and you said this, Joe. The op ed which I read, did not mention Hamas, nor do I have any evidence, nor has the government produced some that she was protesting in favor of Ramas.

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We cover politics in the nation's capital. Thanks for being with us on the Thursday edition of Balance of Power, Kaylee. We were just talking about the potential for a lease Dephonic to either withdraw her name from consideration to be the country's ambassador to the UN or maybe delay that confirmation because of the super thin majority.

In the House. You know, we're not done with all the confirmations here.

In fact, it's an important hearing taking place today, the former Republican SEC Commissioner Paul Atkins having his moment in the sun here and a hearing that veered into a lot of different issues, including conflict of interest. Part of his opening remarks from earlier, let's.

Listen unclear overly politicized, complicated and burdensome regulations or stifling capital formation. While American investors are flooded with disclosures that do the opposite of helping them understand the true risks of an investment. It is time to reset priorities and return common sense the SEC.

So a lot of the hearing did focus on what he would do at the SEC in terms of the regulatory landscape it could create when it comes to things like crypto for example. But some of the hearing as well focused on the man himself, Paul Atkins. So after his previous tenure at the SEC that Joe just mentioned, went on to run Potomac Global Partners, firm based here in Washington that had a lot of Wall Street clients. That's where the conflict of interest concerns come from that we heard about in the hearing today, and watching all of it with us here on Bloomberg TV and Radio is Lydia Bayude, who covers a regulation for us here at Bloomberg. So Lydia obviously the conflict of interest concerns we heard for example the branking member, Senator Elizabeth Warren highlighting extensively. Ultimately, though that isn't expected to tank his nomination.

Not at all. He's got really strong support. And even Warren was by far the most kind of aggressive of the Democrats going after that record. It was touched on by a number of other Democratic lawmakers. But certainly he's got very strong support from Republicans who see who see him as sort of uniquely well qualified to run the agency, and especially at this time between all that's happening in capital markets and within government.

His personal assets valued at more than three hundred and twenty eight million dollars. He owns six billion dollars worth of bitcoin. This is, by the way, between Atkins and his wife. He will be divesting from some of these investments, or all of them, He'll.

Be divesting from the majority of them. In a letter that he sent a senator warrant today about some of her concerns with his refusals and ethics, he said he was divesting from I think at least one hundred and fifty investments. But now his wife is an heir of the Tamco roofing family, so they have some kind of family personal wealth. He is staying keeping a trustee of many of the family trusts, so there are assets that he is keeping. But he said that he's met or exceeded sort of the standard requirements for someone who's going to be in.

This role well, and of course those assets are dwarfed in comparison to the assets of say Elon Musk, who he was actually asked about in the hearing today. Didn't want to comment on the SEC's actions against Elon Musk, but talked about Doge.

It's true. Yeah.

He was asked, would you go along with DOJE if they come to the agency, and he said yes, I would certainly, And he'll be looking at whether or not the SEC is being a good steward tax payer money and how their mission fits in with what's required by Congress.

Great to have you back with us, Lydia, Thank you so much for making it clear that he won't have any trouble.

It looks like at this point, Kaylee being confirmed.

Thanks for joining us today on Balance of Power on Bloomberg TV and Radio. As we bring you back to the signal story that we've spent so much time on this week. We heard from Carolina Levitt, the Press secretary at the White House, about this a bit earlier today. Is this story moves into a fourth day now after The Atlantic actually published actual excerpts from the texted attack plans that the press, I should say, Secretary of Defense put on signal.

Let's listen to the press secretary.

Well, we have never denied that this was a mistake, and the National Security Advisor took responsibility for that, and we have said we are making changes, we are looking into the matter to ensure it can never happen again.

And this is where we start our conversation, Kailey with Denver Riggleman. We've been talking with a lot of different voices on this story, voices of experience. Denver, of course former Republican congressman, but also is steeped in technology. He's started an AI company, spent a lot of time working as an intelligence official in the United States Air Force, and he's with us now back on.

Bloomberg TV and Radio.

I hope I framed your resume properly here, Denver, because you have unique insight into what happened here with regard to whether this was in fact classified information, whether there was some sort of hack or a media hoax, because we're hearing all three in Washington right now.

What do you think?

Well, then, thanks for having me on.

And you know, I was listening to the prior segment, and I think some people are rethinking their Senate confirmation vote after what you've seen with this signal debacle. And you know my background. You did couch it pretty well, Joe, and great to be here. Mcayley too. Here's the thing. I was an Air Force mission planner and when I said, I actually deployed on multiple mission ops, was trained on fix teens and enough sixteens b ones probably mission planned more strikes than everybody on that panel has seen or done in their lifetimes. And for anybody to say that this was a hoax, Number one, it's impossible. With signal nobody can sneak onto there. It's obviously Mike Waltz already had Jeff Coleberg in his contacts, and one probably was talking to him previously, which I pointed out before right that something. He probably was leaking or talking to Jeff Berg on some other thing, which is why he's so violently aggressive and pushing these conspiracy theories. But also when you look at what happened on that signal chat, when you're looking at time over targets, when you looking at specific type of air frames, when you're looking at a specific mention of the target, all that is at the minimum secret or collateral level, it's ludicrous to say that they weren't actually talking classified on those threads, especially when it was that far out from the strike. If you can imagine somebody else being added that maybe wasn't as ethical as Jeff Goldberg. What our enemies could actually do, because if you know the air strike or the platforms, you can infer the weapons platforms that the actually caring.

So I find it laughable in anybody who's.

Been an ops, real ops like I have in the United States Air Force or on the ground or Marine Corps pilots, Navy pilots, Army pilots, they understand the timeover targets, specific payloads or specific aircraft, and the target itself would be classified.

Okay, well, Congressman, help us work through the argument that the administration is making that even if all of that were true, these plans were not compromised or at the very least not thwarted. This was a successful mission by all accounts accorded according to their telling. And that's why the President says this actually was no problem at all. What do you think, you know?

I find it interesting that they say it's no problem to have a leak from the sector at the highest levels. That was only by the good fortune that they had an ethical US citizen that they had included on these talks to somehow say just because we screwed up so badly that we could put troops in harm's way, and because it didn't. That means it's all hunky. It's so ludicrous from an intelligence background, but also from a military background, but just common sense because when you look at what these individuals have pledged to do and how they've supposedly been trained and gotten all the security briefings, they broke so many protocols in this one incident. You wonder how many protocols they've broken in the past. You know, there's something in the military, or we say past performance is indicative of future performance. How many other screwups have they done or they're going to do. When you have people who have no business being in positions of power, who don't have the expertise, the acumen right or the judgment, most of them conspiracy theorists or believers that the election was stolen. When you have people with that bad adjudgment that are actually supposed to be holding security clearances, you want those individuals actually affecting operations based on their own bad decisions. And I think that's what we have right now, is we have fantasy based policy coming from the administration, but we have individuals that have been confirmed by the Senate, as you guys alluded to earlier, that really.

Shouldn't be there.

And I think when you have people who don't have the experience level or the acumen or the ability to plan correctly or can follow directions who don't know security, all of that together could be disaster for the United States. And I think what it indicates is that they actually could be the reason that the United States has a debacle in the future based on their performance today and literally headshit role.

Well, the thing is that I don't know, it looks like that might not happen here at Denver, and you might suggest otherwise, but the President is standing behind his team and he's suggested there's nothing to see here. So is there a chance that there'll be a credible investigation led by Congress.

No, not going to happen.

No, I you know, my guess is there's going to be an executive order allowing signal tomorrow, you know, to be used for classified operations, right, or there's going to be some kind of preemptive pardon, you know, for signal users in the DoD. I mean, it's so ludicrous, and I think it's what's scaring our allies right now. And I think what people are concentrating on the fact that the signal they invited somebody they were discussing cloud fight information right on a comms channel that wasn't authorized. But it's also how do our allies think about how they were being spoken about. There's so many cascading effects here, Joe and Kayley that it's hard for people that you know, have IQ above moron and common sense to grasp how this administration could defend this in any way.

But we've seen this in the past.

I mean, we've gone from where they're not going to be an investigation on this to reparations for J six, you know, insurrectionists. So you know, let's not think that this administration is going to all of a sudden change their spots and have any kind of real adult in the room type of decision making when it comes to our troops in the field. And I think that's what it goes back to as me being a military member, I just want to make sure that our troops in the field, that people flying those missions are FOURD air controllers, those on the ground, all those are protected. And right now with this administration, what we saw with this debacle and releasing this information, I don't know if anybody in the military can feel one hundred percent that this administration has the best interest of the military or our national defense in mind. Well, and talk.

About the role allies that you were just referring to play in ensuring the safety of military or at least the obtaining of necessary intelligence. Because you've talked about the way our allies were spoken about the idea that Europeans are freeloaders and shouldn't be bailed out. It'd be one thing if they were simply offended. It would be another if they decided the US is not trustworthy in terms of receiving and transmitting classified information and intelligence they may have otherwise shared with US. What would be lost if allies started holding back some of that material.

Oh, the first thing that's lost, it really is our ability to maneuver and massage events that are happening in a foreign fair's environment. And I think that's that's what scares the hell out of me, is that we don't have this ability to dictate or to look at our best interests or to be helpful as sort of we've listened people might say, hey, Dan, you know, we don't know if it's a fantasy reality, but we've looked at ourselves as sort of the moral do gooders, the people that could come in right and give some of these security assurances to our allies. If our allies don't believe that what happens next? Right, And I think what they're seeing too is there's no truth in fact baseline to need the decision making. It seems to be knee jerk and based on fantasy, especially when you're looking at Ukraine. You know, when I'm talking about air ops, you know, you know Amy McGrath, you know Marine FA teen pilot. We're doing a new show you know, called Truth in the Barrel that's coming out, and we're talking about this exactly. The question you just asked, right is how does all this actually affect our European allies?

But how does this also affect Ukraine?

Right?

Specifically, so how do we affect Ukraine?

Now?

Joe and Kaylee? What really what is our position?

Jd Vance already made it clear when he was there before, right, that they do only think Ukraine could be in NATO. I mean, it's just ludicrous to give up all of that sort of negotiating clout. So I think what you have is that the EU needs to look at going their own way and I think you're seeing some of those positions when you're looking at poland saying, hey, you know what, maybe we need to have our own nuclear program, or you're looking at South Korea saying, hey, maybe we need our own nuclear program. Now, all the security insurance, nuclear insurance, is all the weapons, all of our contractors, all of those decades and decades of building trust is broken immediately, and how do we.

Get that trust back?

So there's multiple cascading effects for the decision making and the hyperbole that's coming out of the administration.

Then for we've only got a minute left.

President Trump had said repeatedly that the platforms that are used now to share classified information are cumbersome, they're not efficient, they're not effective. That's why they had to reach for signal. I just wonder if, from your technical background, never mind your political one, is it time for a new platform. Is there a classified friendly signal, a government friendly platform that they need to start working on.

Listen, and I can't use all of the classified chats, but as back even the middle of the two thousands, we had a chat, secure chat called jabber. You have secure chat all over the place, right, you don't need to actually absolutely go to signal. You have encrypted phones, you have all that. Also, are there things in the military there are absolute bureaucratic and ridiculous.

Yes, I was there.

Gosh, I know Joe Cayley better than most. Right, yes, but don't break the law or be stupid because you think something else needs to be used.

Try to do better.

And I think that's what it comes down to it with military ethics and integrity. Use what you have and if you have to change something in the future, then work towards it.

Then all right, we'll leave it on that note. Former Republican Congressman Denver Rigelmann, also former Air Force intelligence.

Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at Noontimeeastern at Bloomberg dot com.

Balance of Power

Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the 
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