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 Coarckley and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

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 Coarckley and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

President Trump speaking right now in a cabinet meeting that Elon Musk is a featured guest that we understand, and we're going to have part of that conversation for you once it concludes a bit later on this hour, as we straddle as usual both ends of Pennsylvania Avenue, with lawmakers getting back into town today in a massive project ahead that we've discussed more than once. Reconciliation making permanent or at least extending the Trump tax cuts, lifting the debt ceiling, and what the President likes to call one big, beautiful bill. With an important meeting between House and Senate leaders set for tomorrow. It's a great pleasure to have Congressman Bill Heiseenga back with us, the Republican from Michigan's fourth district. Congressman, welcome back to town. It's good to see you. With so much on the table here. I wonder your thought on the approach to writing this legislation and the extent to which the DOGE will be codified in this bill.

President Trump speaking right now in a cabinet meeting that Elon Musk is a featured guest that we understand, and we're going to have part of that conversation for you once it concludes a bit later on this hour, as we straddle as usual both ends of Pennsylvania Avenue, with lawmakers getting back into town today in a massive project ahead that we've discussed more than once. Reconciliation making permanent or at least extending the Trump tax cuts, lifting the debt ceiling, and what the President likes to call one big, beautiful bill. With an important meeting between House and Senate leaders set for tomorrow. It's a great pleasure to have Congressman Bill Heiseenga back with us, the Republican from Michigan's fourth district. Congressman, welcome back to town. It's good to see you. With so much on the table here. I wonder your thought on the approach to writing this legislation and the extent to which the DOGE will be codified in this bill.

Well, good to be back with you, Joe and Hi Kiley. And look, there's a lot of work to be done. We know that. I'm glad to see these steps being taken by House leadership Senate leadership. We're going to have to reach consensus. And yes, the one big beautiful bill would be the preference of the House. I think here's the why there's a lot of us that are just questioning whether there's going to be a true second bite at the apple, and that means capturing both the essence of what DOGE is trying to do, which is to streamline and drive efficiencies into government which it desperately needs, as well as making sure that we capitalize on this opportun unity to make sure that there isn't a twenty two percent increase in taxes or the average American family. I mean, despite all the Democrats cattle wauling about billionaires and millionaires and now this is going to be helping on the simple fact is that with this expires, you're going to see twenty two percent increase in taxes for those families, You're going to see small businesses hurt dramatically. Nfib says, this is going to be a dramatic impact on their members. So we've got to go and get this done well.

Well, good to be back with you, Joe and Hi Kiley. And look, there's a lot of work to be done. We know that. I'm glad to see these steps being taken by House leadership Senate leadership. We're going to have to reach consensus. And yes, the one big beautiful bill would be the preference of the House. I think here's the why there's a lot of us that are just questioning whether there's going to be a true second bite at the apple, and that means capturing both the essence of what DOGE is trying to do, which is to streamline and drive efficiencies into government which it desperately needs, as well as making sure that we capitalize on this opportun unity to make sure that there isn't a twenty two percent increase in taxes or the average American family. I mean, despite all the Democrats cattle wauling about billionaires and millionaires and now this is going to be helping on the simple fact is that with this expires, you're going to see twenty two percent increase in taxes for those families, You're going to see small businesses hurt dramatically. Nfib says, this is going to be a dramatic impact on their members. So we've got to go and get this done well.

One of the differences between the House and Senate's propositions on this, Congressman, is that the House bill includes a raising of the debt ceiling. Considering we just got an estimate from the Bipartisan Policy Center out with a guess on the X state when we would theoretically default on our debt between mid July and October, knowing the deadline to extend the twenty seventeen tax because isn't really intel year end. Do you foresee that the debt ceiling fight is going to have to be separated, maybe so that you can grab some Democratic votes along the way.

One of the differences between the House and Senate's propositions on this, Congressman, is that the House bill includes a raising of the debt ceiling. Considering we just got an estimate from the Bipartisan Policy Center out with a guess on the X state when we would theoretically default on our debt between mid July and October, knowing the deadline to extend the twenty seventeen tax because isn't really intel year end. Do you foresee that the debt ceiling fight is going to have to be separated, maybe so that you can grab some Democratic votes along the way.

That's a good question. I mean, that's a matter of strategy. Frankly, as we're moving through this, it's going to need to happen. And you know, this is what I always say to folks who say, oh, well, we don't need a debt ceiling, or yes, we cannot give this up. You have to look at what the purpose of the debt ceiling vote was and it was to bring attention to a serious issue, a growing issue, and then it was curb behavior. Well, I'm not sure people have really been paying attention as we've driven this up to thirty six trillion dollars in debt, and you have to ask yourself whether this is really curbed behavior. So what I'm pushing for is, let's make sure that we have something in place that is a catalyst for the conversation. Clearly, purely a debt ceiling election or a debt ceiling vote hasn't been doing the job in my opinion, So what is it that we're going to put in play? So, but I think we need to have something to drive that conversation. So it's going to be one of those points of debate and certainly a negotiation. But we know that the President wants this off his plate as well, and so I think he'll have a compelling argument when it comes to the Senate leadership.

That's a good question. I mean, that's a matter of strategy. Frankly, as we're moving through this, it's going to need to happen. And you know, this is what I always say to folks who say, oh, well, we don't need a debt ceiling, or yes, we cannot give this up. You have to look at what the purpose of the debt ceiling vote was and it was to bring attention to a serious issue, a growing issue, and then it was curb behavior. Well, I'm not sure people have really been paying attention as we've driven this up to thirty six trillion dollars in debt, and you have to ask yourself whether this is really curbed behavior. So what I'm pushing for is, let's make sure that we have something in place that is a catalyst for the conversation. Clearly, purely a debt ceiling election or a debt ceiling vote hasn't been doing the job in my opinion, So what is it that we're going to put in play? So, but I think we need to have something to drive that conversation. So it's going to be one of those points of debate and certainly a negotiation. But we know that the President wants this off his plate as well, and so I think he'll have a compelling argument when it comes to the Senate leadership.

I'm sure you've been watching and listening to a difficult conversation on the other side of the aisle from your purge congressman with a lot of angry Democrats following the debate over the CR and Chuck Schumer's eventual decision to back it. He was sticking up for himself on Sunday morning, still fending off calls for him to step down. I don't know if this is going to be a purely Republican exercise. It is reconciliation. You have every right for it to be. I just wonder if Democrats should be or will be involved in the ground floor talks that are getting started.

I'm sure you've been watching and listening to a difficult conversation on the other side of the aisle from your purge congressman with a lot of angry Democrats following the debate over the CR and Chuck Schumer's eventual decision to back it. He was sticking up for himself on Sunday morning, still fending off calls for him to step down. I don't know if this is going to be a purely Republican exercise. It is reconciliation. You have every right for it to be. I just wonder if Democrats should be or will be involved in the ground floor talks that are getting started.

Now.

Now.

Well, those are two things should be and will be are very very different around here. You know, we should have had every Democrat that's ever complained about a potential government shutdown on that CR. But they didn't, And it begs begs the question, which is why. And I think the obvious answer to that is politics. And look, if the Democrats want to trot Bertie Sanders Sanders and AOC out and do a nationwide you know, arena tour, knock yourself out. Yes, you were getting some big crowds, but I do not believe that is where most of America is, and that is going to be problematic I think for them on their side of this equation. But you know, nonetheless, we're going to need to work through this on the reconciliation side, and we might see a few of those more clear eyed, clear minded Democrat colleagues come across and say, look, this really is our best opportunity. And if we're going to see forty million families have their per child tax credit cut in half, that's an impacts that's not a Republican issue. That's not a Democrat issue. That's not a red state blue state issue. That's a family issue that is going to impact the checkbook of many, many families sitting around the kitchen table trying to figure out how do they afford gas and groceries and school supplies and all the other stuff, much less take a vacation or anything else. So that I think is going to be the essence of this.

Well, those are two things should be and will be are very very different around here. You know, we should have had every Democrat that's ever complained about a potential government shutdown on that CR. But they didn't, And it begs begs the question, which is why. And I think the obvious answer to that is politics. And look, if the Democrats want to trot Bertie Sanders Sanders and AOC out and do a nationwide you know, arena tour, knock yourself out. Yes, you were getting some big crowds, but I do not believe that is where most of America is, and that is going to be problematic I think for them on their side of this equation. But you know, nonetheless, we're going to need to work through this on the reconciliation side, and we might see a few of those more clear eyed, clear minded Democrat colleagues come across and say, look, this really is our best opportunity. And if we're going to see forty million families have their per child tax credit cut in half, that's an impacts that's not a Republican issue. That's not a Democrat issue. That's not a red state blue state issue. That's a family issue that is going to impact the checkbook of many, many families sitting around the kitchen table trying to figure out how do they afford gas and groceries and school supplies and all the other stuff, much less take a vacation or anything else. So that I think is going to be the essence of this.

Well, something else that could affect the checkbook of American families, Congressman, is if the cost of goods is effectively risen, at least for some of them, due to tariffs that are either in place now or the President has threatened to put in place. Further, we just heard from him in a cabinet meeting saying he'll be announcing car tariffs shortly pharma at some point. But we've also had our own reporting internally here at Bloomberg that on April second, he's actually looking at something a bit more paired back than the sweeping tariffs. He's been talking about what is your hope here on the actual outcome, what level of tariffs, and on what goods is actually appropriate to achieve his objectives without hurting that checkbook you were just speaking about.

Well, something else that could affect the checkbook of American families, Congressman, is if the cost of goods is effectively risen, at least for some of them, due to tariffs that are either in place now or the President has threatened to put in place. Further, we just heard from him in a cabinet meeting saying he'll be announcing car tariffs shortly pharma at some point. But we've also had our own reporting internally here at Bloomberg that on April second, he's actually looking at something a bit more paired back than the sweeping tariffs. He's been talking about what is your hope here on the actual outcome, what level of tariffs, and on what goods is actually appropriate to achieve his objectives without hurting that checkbook you were just speaking about.

Yeah, well, Kaylee, I always bring up to people who might be sitting in these chairs behind me here in my office wanting to discuss all this. You have to look at what is policy and what's tactic, right, and I think we've seen more tactic than actual policy numbers, hard numbers out of the President so far. And good for him. Here's his goal and objective, drive as much business back into the United States as physically possible, to make sure that we've got good paying jobs here in the United States, that we are taking care of our citizens first and foremost, and that we've got a robust economy and the fundamentals of the economy are sound, especially when we're talking about making sure that energy policy is rational, not what we've had for the last four years, making sure that we are putting those tax Cuts and Jobs Act provisions back in place, making sure that we have a efficiency and a pairing down of federal government and government frankly at all levels that has hindered growth. So yes, tariffs is going to be a part of that. I know that that the Swiss and others that are dealing with pharmaceuticals have wanted to make sure that they are working with the administration. You happen to bring those up Michigan. You know, we've got a tremendous number of automotive suppliers, Tier one, Tier two, tier three automotive suppliers, A lot of them are looking at how they bring this back to the United States if at all possible. It's interesting that the United Auto Workers are in support of the tariffs. The Canadian Auto Workers are not. That is, you know, to the union that's usually together is actually split on this one. So you know, there's there's going to be some bumpy bumps in this road, there's no doubt. But I think we have to look at what that end game is, and that's to make America stronger, more prosperous, and and and stronger on the world stage. And I think President Trump is absolutely doing that well.

Yeah, well, Kaylee, I always bring up to people who might be sitting in these chairs behind me here in my office wanting to discuss all this. You have to look at what is policy and what's tactic, right, and I think we've seen more tactic than actual policy numbers, hard numbers out of the President so far. And good for him. Here's his goal and objective, drive as much business back into the United States as physically possible, to make sure that we've got good paying jobs here in the United States, that we are taking care of our citizens first and foremost, and that we've got a robust economy and the fundamentals of the economy are sound, especially when we're talking about making sure that energy policy is rational, not what we've had for the last four years, making sure that we are putting those tax Cuts and Jobs Act provisions back in place, making sure that we have a efficiency and a pairing down of federal government and government frankly at all levels that has hindered growth. So yes, tariffs is going to be a part of that. I know that that the Swiss and others that are dealing with pharmaceuticals have wanted to make sure that they are working with the administration. You happen to bring those up Michigan. You know, we've got a tremendous number of automotive suppliers, Tier one, Tier two, tier three automotive suppliers, A lot of them are looking at how they bring this back to the United States if at all possible. It's interesting that the United Auto Workers are in support of the tariffs. The Canadian Auto Workers are not. That is, you know, to the union that's usually together is actually split on this one. So you know, there's there's going to be some bumpy bumps in this road, there's no doubt. But I think we have to look at what that end game is, and that's to make America stronger, more prosperous, and and and stronger on the world stage. And I think President Trump is absolutely doing that well.

When we consider the concept of re shoring, whether it's the auto industry you mentioned, or high tech, whether it's chips or pursuing AI, you need energy for all of that. Congressman, and I want to ask you about this nuclear plant in your backyard that's being relt with help from a grant from this White House, the Palisades Nuclear Generating Station. If this thing is repaired and gets back online, is that for the better of your grid in your district or are you going to be announcing a deal with a hyperscaler at some point that's going to park a data center next to that plant.

When we consider the concept of re shoring, whether it's the auto industry you mentioned, or high tech, whether it's chips or pursuing AI, you need energy for all of that. Congressman, and I want to ask you about this nuclear plant in your backyard that's being relt with help from a grant from this White House, the Palisades Nuclear Generating Station. If this thing is repaired and gets back online, is that for the better of your grid in your district or are you going to be announcing a deal with a hyperscaler at some point that's going to park a data center next to that plant.

Well, they look, the way we have energy that's crossing around in the Midwest is the MISO and we need to have a grid that is robust. Palisades was actually taken offline and decommissioned. This is the first recommissioning of one of those plants. Three Mile Island is being discussed about another one out in Iowa. And this is a fifty six million dollar loan guarantee that's part of a larger package that I was glad to see went from the Biden administration. And I want to say thanks to Secretary Right and President Trump for pushing this through as well, making sure that it's happening, because at the end of the day, if it is about energy independence and making sure that we've got the ability to power our economic recovery, that's not just traditional oil and gas. This is making sure that we have nuclear available available and developing those those small modular reactors SMRs, and you might see those surrounding this because you've got the grid in place, so you don't have all the delay and permitting and a lot of those things. So this is good not just for Southwest Michigan or Michigan. This is good for the country. And we've got to figure out if this is a very viable way of repowering ourselves. And I'm glad to see it happening in southwest Michigan.

Well, they look, the way we have energy that's crossing around in the Midwest is the MISO and we need to have a grid that is robust. Palisades was actually taken offline and decommissioned. This is the first recommissioning of one of those plants. Three Mile Island is being discussed about another one out in Iowa. And this is a fifty six million dollar loan guarantee that's part of a larger package that I was glad to see went from the Biden administration. And I want to say thanks to Secretary Right and President Trump for pushing this through as well, making sure that it's happening, because at the end of the day, if it is about energy independence and making sure that we've got the ability to power our economic recovery, that's not just traditional oil and gas. This is making sure that we have nuclear available available and developing those those small modular reactors SMRs, and you might see those surrounding this because you've got the grid in place, so you don't have all the delay and permitting and a lot of those things. So this is good not just for Southwest Michigan or Michigan. This is good for the country. And we've got to figure out if this is a very viable way of repowering ourselves. And I'm glad to see it happening in southwest Michigan.

Well, that's a domestic nuclear power plant, Congressman. I'd also like to ask you, given your seat on the Foreign Affairs Committee, about nuclear power plant or potentially plants plural abroad in Ukraine or areas of Ukraine currently occupied by Russia. President Trump during the Cabinet meeting talked about talking with Ukraine about nuclear power plant ownership. We know Zaparizia has come up in conversations with President Zelinsky. We also heard from Secretary of State Marco Rubio during this cabinet meeting that there is no military solution to the Russia Ukraine war. As you hear the words coming from the administration, track the efforts toward peace that are underway, and what you're hearing on the committee, where do you think this goes from here? What does the US end up with and Ukraine and Russia end up with.

Well, that's a domestic nuclear power plant, Congressman. I'd also like to ask you, given your seat on the Foreign Affairs Committee, about nuclear power plant or potentially plants plural abroad in Ukraine or areas of Ukraine currently occupied by Russia. President Trump during the Cabinet meeting talked about talking with Ukraine about nuclear power plant ownership. We know Zaparizia has come up in conversations with President Zelinsky. We also heard from Secretary of State Marco Rubio during this cabinet meeting that there is no military solution to the Russia Ukraine war. As you hear the words coming from the administration, track the efforts toward peace that are underway, and what you're hearing on the committee, where do you think this goes from here? What does the US end up with and Ukraine and Russia end up with.

Well, that's part of the negotiations, and certainly this the mineral agreement, was a big step of that. I know the President played some hardball on that, and he should have. I'm glad he did. I thought it was out of bounds what President Zelensky had done, and now that will drive hopefully an understanding and an agreement between our two countries. Exact same thing could be happening with the nuclear power plants, and of course those are more unique in that they're not just inert, right, you know, I mean, they have to be actively taken care of, they have to be tended to, they have to be utilized, and if you don't, or you bomb them or do something terrible like that, there's you know, real consequences to that. So it's a beneficial I think for Ukraine to have involvement of the United States, whether it's US government or US companies that are involved and engaged in that. And I think we can get there. I really do. And I think Secretary of Rubio is right after we've seen billions of dollars getting poured in to Ukraine and that conflict. You know, they're at kind of a stalemate. Now the Ukrainians have to figure out what exactly is that going to mean? You know, I mean, but let's all remember twenty percent of the country of Georgia next to Crimeas under Russian occupation. Crimea became under occupation during the Obama administration. Joe Biden called it a small incursion, a minor incursion when Russia initially came in a couple of years ago. So at this point, we've got to come up with a solution. It's costing millions of lives. I want to make sure that there's no US lives, but I don't want to see any lives getting lost over this. So I'm glad to see him President Trump and President Zelenski and Putin having the conversations that they need, and I'm thankful to Frankly the Saudist for hosting a lot of that conversation, whether it's both in Gaza and Israel, but as well as this Russia and Ukraine problem.

Well, that's part of the negotiations, and certainly this the mineral agreement, was a big step of that. I know the President played some hardball on that, and he should have. I'm glad he did. I thought it was out of bounds what President Zelensky had done, and now that will drive hopefully an understanding and an agreement between our two countries. Exact same thing could be happening with the nuclear power plants, and of course those are more unique in that they're not just inert, right, you know, I mean, they have to be actively taken care of, they have to be tended to, they have to be utilized, and if you don't, or you bomb them or do something terrible like that, there's you know, real consequences to that. So it's a beneficial I think for Ukraine to have involvement of the United States, whether it's US government or US companies that are involved and engaged in that. And I think we can get there. I really do. And I think Secretary of Rubio is right after we've seen billions of dollars getting poured in to Ukraine and that conflict. You know, they're at kind of a stalemate. Now the Ukrainians have to figure out what exactly is that going to mean? You know, I mean, but let's all remember twenty percent of the country of Georgia next to Crimeas under Russian occupation. Crimea became under occupation during the Obama administration. Joe Biden called it a small incursion, a minor incursion when Russia initially came in a couple of years ago. So at this point, we've got to come up with a solution. It's costing millions of lives. I want to make sure that there's no US lives, but I don't want to see any lives getting lost over this. So I'm glad to see him President Trump and President Zelenski and Putin having the conversations that they need, and I'm thankful to Frankly the Saudist for hosting a lot of that conversation, whether it's both in Gaza and Israel, but as well as this Russia and Ukraine problem.

All right, Congressman, thank you so much for your time. That's Republican Congressman Bill Hazenga of Michigan joining us live here on Balance of Power on Bloomberg TV and Radio.

All right, Congressman, thank you so much for your time. That's Republican Congressman Bill Hazenga of Michigan joining us live here on Balance of Power on Bloomberg TV and Radio.

You're listening to the Bloomberg Balance of Power Podcast. Catch us live weekdays at noon and five pm. E's durn on Apple Cockley and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

You're listening to the Bloomberg Balance of Power Podcast. Catch us live weekdays at noon and five pm. E's durn on Apple Cockley and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

Thanks for joining Balance of Power the Monday edition on Bloomberg Radio on the satellite radio channel one twenty one. On YouTube is well searched. Bloomberg Business News Live. You can dial up our live stream there and just let it run straight through the day for all of our shows from New York and Washington, DC, where lawmakers are coming back to town and we'll have a lot more on that. We're going to be talking at the top of our next hour with Congressman Bill heizinga Republican from Michigan fourth District, with Trump tax cuts on the agenda, a debt ceiling that needs to be raised, and a lot of work, a lot of tough work that needs to be done between the House and the Senate when it comes to the Republican reconciliation plan that we've been talking about for months, actually get down to it now that they have avoided a government shutdown and at least have the lights on for the.

Thanks for joining Balance of Power the Monday edition on Bloomberg Radio on the satellite radio channel one twenty one. On YouTube is well searched. Bloomberg Business News Live. You can dial up our live stream there and just let it run straight through the day for all of our shows from New York and Washington, DC, where lawmakers are coming back to town and we'll have a lot more on that. We're going to be talking at the top of our next hour with Congressman Bill heizinga Republican from Michigan fourth District, with Trump tax cuts on the agenda, a debt ceiling that needs to be raised, and a lot of work, a lot of tough work that needs to be done between the House and the Senate when it comes to the Republican reconciliation plan that we've been talking about for months, actually get down to it now that they have avoided a government shutdown and at least have the lights on for the.

Rest of the year.

Rest of the year.

There's a cabinet meeting underway right now as we prepare to bring Rick and Jeanie into the conversation. It's one that I guess we're going to actually bear witness to. We didn't know about this earlier, but that's the way things go with this White House. They have apparently allowed reporters with cameras and microphones into the room. So pretty newsy so far, actually, or is it? I can never tell exactly. Wall Street's in a good mood right now, so we're not going to mess with it. The president's talking about tariffs again, having promised a secondary tariff on Venezuela earlier today in a truth social post, he says, and that, by the way, is something the president's been talking about here, but announcing cars and pharma. Cars shortly, he says, pharma at some point, and we went up with the red head announcing car tariff shortly pharma at some point twelve twenty seven pm East Coast time. Markets really didn't blink. We're still looking pretty good here. The S and P five hundred one and a half percent. Nasdaq is up two percent because, as we think established with Nathan Dean, nobody knows exactly what any of this will mean. And it's entirely possible, if not likely, that all of these sectoral tariffs as we call them, could in fact be delayed again in the spirit of another review or investigation. But something's gonna happen on April second. That's Liberation Day, right. Is there a lawmaker by the way out there who's put Liberation Day up to be a federal holiday. I'm not even kidding. You've got legislation up there to put Trump on Mount Rushmore, make his birthday at federal holiday. Liberation Day. April second, that's a week from Wednesday, and our signature panel is back with us I'm happy to say Genie Shanzano and Rick Davis. Genie is our Democratic analyst, Bloomberg Politics contributor, and political science professor at Iona University. Rick Davis republican strategist partner Stone Court Capital. Great to see you both here, Genie. The narrative this morning was that the markets were feeling relieved because the tariffs, as Bloomberg it self reported, would be more targeted. When you start hearing headlines like this coming out of the cabinet meeting though from Donald Trump, from Howard Lutnik, does that further confuse the situation?

There's a cabinet meeting underway right now as we prepare to bring Rick and Jeanie into the conversation. It's one that I guess we're going to actually bear witness to. We didn't know about this earlier, but that's the way things go with this White House. They have apparently allowed reporters with cameras and microphones into the room. So pretty newsy so far, actually, or is it? I can never tell exactly. Wall Street's in a good mood right now, so we're not going to mess with it. The president's talking about tariffs again, having promised a secondary tariff on Venezuela earlier today in a truth social post, he says, and that, by the way, is something the president's been talking about here, but announcing cars and pharma. Cars shortly, he says, pharma at some point, and we went up with the red head announcing car tariff shortly pharma at some point twelve twenty seven pm East Coast time. Markets really didn't blink. We're still looking pretty good here. The S and P five hundred one and a half percent. Nasdaq is up two percent because, as we think established with Nathan Dean, nobody knows exactly what any of this will mean. And it's entirely possible, if not likely, that all of these sectoral tariffs as we call them, could in fact be delayed again in the spirit of another review or investigation. But something's gonna happen on April second. That's Liberation Day, right. Is there a lawmaker by the way out there who's put Liberation Day up to be a federal holiday. I'm not even kidding. You've got legislation up there to put Trump on Mount Rushmore, make his birthday at federal holiday. Liberation Day. April second, that's a week from Wednesday, and our signature panel is back with us I'm happy to say Genie Shanzano and Rick Davis. Genie is our Democratic analyst, Bloomberg Politics contributor, and political science professor at Iona University. Rick Davis republican strategist partner Stone Court Capital. Great to see you both here, Genie. The narrative this morning was that the markets were feeling relieved because the tariffs, as Bloomberg it self reported, would be more targeted. When you start hearing headlines like this coming out of the cabinet meeting though from Donald Trump, from Howard Lutnik, does that further confuse the situation?

You know?

You know?

I don't think so.

I don't think so.

I think that we have heard this time and time again from Donald Trump and from the administration. I think everybody is well aware of quote unquote Liberation Day, and I think it's sort of like now a wait and see attitude. Does he or doesn't he? And I suspect at some point he will, but it may not be on the second, as Nathan was pointing out, But at some point it may come. And when it comes, as Nathan said, they're very very hard to turn around and pull off again. So I think people are sort of, you know, playing right now that this is something they're expecting at some point in the near future. And auto's and pharma, as you were reporting, is something he's talked an awful lot about in this context.

I think that we have heard this time and time again from Donald Trump and from the administration. I think everybody is well aware of quote unquote Liberation Day, and I think it's sort of like now a wait and see attitude. Does he or doesn't he? And I suspect at some point he will, but it may not be on the second, as Nathan was pointing out, But at some point it may come. And when it comes, as Nathan said, they're very very hard to turn around and pull off again. So I think people are sort of, you know, playing right now that this is something they're expecting at some point in the near future. And auto's and pharma, as you were reporting, is something he's talked an awful lot about in this context.

Is Wall Street projecting today, Rick, or is this reporting from Bloomberg the real news that a lot of these is across the board. Tariffs will never in fact be implemented, and they'll be a more targeted approach depending on the country.

Is Wall Street projecting today, Rick, or is this reporting from Bloomberg the real news that a lot of these is across the board. Tariffs will never in fact be implemented, and they'll be a more targeted approach depending on the country.

Well, I feel like it's a little bit of back to the future. You know, in the first administration, we learned that it's not what he says, it's what he does that matters. And it seems like so far, just over a month in, we are actually learning the same lesson all over again. And don't listen to what he says. Let's watch what he actually does. And what he actually does so far on tariffs is significantly less than what he's been saying he's going to do. And sometimes he does what he says he levies big tariffs on country is that he pulls off twenty four hours later, thirty six hours later, forty eight hours later. And so I think Wall Street's starting to get the hang of it, right, Okay, we know this is going to be big pr day. This is probably making his base happy. He's going to call it Independence Day and there's going to be lots of fervor around it. But I think one of the things that's a tell today in this cabinet meeting is Howard Lutnix, you know, sort of competing with the tariff news that he's going to release this external revenue service and the facts that they're even bringing that up indicates that they don't have enough to say on tariffs and they got to have some kind of structural thing and that will happen, and based on what Lutinix says, it will happen on April second. So my suspicions that may lead the news interesting.

Well, I feel like it's a little bit of back to the future. You know, in the first administration, we learned that it's not what he says, it's what he does that matters. And it seems like so far, just over a month in, we are actually learning the same lesson all over again. And don't listen to what he says. Let's watch what he actually does. And what he actually does so far on tariffs is significantly less than what he's been saying he's going to do. And sometimes he does what he says he levies big tariffs on country is that he pulls off twenty four hours later, thirty six hours later, forty eight hours later. And so I think Wall Street's starting to get the hang of it, right, Okay, we know this is going to be big pr day. This is probably making his base happy. He's going to call it Independence Day and there's going to be lots of fervor around it. But I think one of the things that's a tell today in this cabinet meeting is Howard Lutnix, you know, sort of competing with the tariff news that he's going to release this external revenue service and the facts that they're even bringing that up indicates that they don't have enough to say on tariffs and they got to have some kind of structural thing and that will happen, and based on what Lutinix says, it will happen on April second. So my suspicions that may lead the news interesting.

But you also need tariffs to feed an external revenue service, right, Geenie, So what's going to happen on Liberation Day? And how are you planning to celebrate?

But you also need tariffs to feed an external revenue service, right, Geenie, So what's going to happen on Liberation Day? And how are you planning to celebrate?

I don't know if I'll be celebrating it. I will be monitoring it, you know, I don't think you know, I do think we're gonna see some action, because you know, how can you build something up this much and then do nothing? But to Rick's point, I think it might be far less than the rhetoric suggests. And I also think in the context of Howard Lutnik, you know, this is something that we haven't talked a lot about, but he really does need to think about what he is saying on the media. You know, Rick was just talking about this structural change, but he also goes on the air and talks about the fact that elderly people who aren't receiving their Social Security check aren't likely to raise buses unless they're fraudsters. And how does he know this because his mother in law wouldn't say anything if she didn't receive her check. I mean, this kind of rhetoric is just built for a democratic campaign. At Howard lutnik mother is the mother of a billionaire. Of course she doesn't raise heck when she doesn't get a check from the Social Security Administration. But you know what the regular folks among us do, and that doesn't mean they're fronsters. And oh, by the way, does this mean they're cutting Social Security for a limited, temporary or long term period? I mean, so Lutnik has to be very careful, or Donald Trump, on his behalf, has to be very careful. It's almost like Elon Musk talking about, you know, social Security as a Ponzi scheme. These guys don't seem to realize the political implications of this kind of very very loose rhetoric that's going on.

I don't know if I'll be celebrating it. I will be monitoring it, you know, I don't think you know, I do think we're gonna see some action, because you know, how can you build something up this much and then do nothing? But to Rick's point, I think it might be far less than the rhetoric suggests. And I also think in the context of Howard Lutnik, you know, this is something that we haven't talked a lot about, but he really does need to think about what he is saying on the media. You know, Rick was just talking about this structural change, but he also goes on the air and talks about the fact that elderly people who aren't receiving their Social Security check aren't likely to raise buses unless they're fraudsters. And how does he know this because his mother in law wouldn't say anything if she didn't receive her check. I mean, this kind of rhetoric is just built for a democratic campaign. At Howard lutnik mother is the mother of a billionaire. Of course she doesn't raise heck when she doesn't get a check from the Social Security Administration. But you know what the regular folks among us do, and that doesn't mean they're fronsters. And oh, by the way, does this mean they're cutting Social Security for a limited, temporary or long term period? I mean, so Lutnik has to be very careful, or Donald Trump, on his behalf, has to be very careful. It's almost like Elon Musk talking about, you know, social Security as a Ponzi scheme. These guys don't seem to realize the political implications of this kind of very very loose rhetoric that's going on.

There's quite a bit of talking going on in this meeting. It's hard to tell if there's a heck of a lot of news. Rick, and I wonder if you know, maybe we should be spending a little more attention looking at the other end of Pennsylvania Avenue as lawmakers get back into town and hold some very important meetings by the way between House and Senate leadership. The first will take place tomorrow, with of course the goal being a mass of reconciliation bill that would extend or make permanent the Trump tax cuts, raise the debt ceiling. We've got this at least new range on an X date today from the Bipartisan Policy Center. Is that something closer to what we can actually call news?

There's quite a bit of talking going on in this meeting. It's hard to tell if there's a heck of a lot of news. Rick, and I wonder if you know, maybe we should be spending a little more attention looking at the other end of Pennsylvania Avenue as lawmakers get back into town and hold some very important meetings by the way between House and Senate leadership. The first will take place tomorrow, with of course the goal being a mass of reconciliation bill that would extend or make permanent the Trump tax cuts, raise the debt ceiling. We've got this at least new range on an X date today from the Bipartisan Policy Center. Is that something closer to what we can actually call news?

It could be.

It could be.

Uh, there's a long way to go before we really know how this reconciliation process is going to sort of come to light. We've been kicking around all day to day different times that we think it could come to vote. Lindsey Graham is saying that his bill's going to get done, he hopes before the August recess, which means nothing urgent is happening in the Senate right now on that, And of course, you know the House leadership is saying something even sooner than that. People are still struggling with how to pay for this. Crapo, who chairs committee going through this right now, says that you know, he's just going to call those tax cuts current policy. And when you call it current policy means it goes on forever. It doesn't have to find new funding when it expires at the end of this year, and that's a way to fill a big five trillion dollar hole. So there's a lot of talk and not a lot of legislation being written right now. But the reality is you're right. The other half of Pennsylvania Avenue where Congress resides, is going to have a significant impact on this first year of Donald Trump's administration because Donald Trump has insisted they do it that way. Now, the question is can they perform woy.

Uh, there's a long way to go before we really know how this reconciliation process is going to sort of come to light. We've been kicking around all day to day different times that we think it could come to vote. Lindsey Graham is saying that his bill's going to get done, he hopes before the August recess, which means nothing urgent is happening in the Senate right now on that, And of course, you know the House leadership is saying something even sooner than that. People are still struggling with how to pay for this. Crapo, who chairs committee going through this right now, says that you know, he's just going to call those tax cuts current policy. And when you call it current policy means it goes on forever. It doesn't have to find new funding when it expires at the end of this year, and that's a way to fill a big five trillion dollar hole. So there's a lot of talk and not a lot of legislation being written right now. But the reality is you're right. The other half of Pennsylvania Avenue where Congress resides, is going to have a significant impact on this first year of Donald Trump's administration because Donald Trump has insisted they do it that way. Now, the question is can they perform woy.

Well, there's a lot there, Genie, and I don't know to the extent to which we're going to be getting news to Rick's point in the near term. On Capitol Hill. But Democrats don't seem to know what to do here either. You saw Chuck Schumer doing Sunday morning television refusing calls to step down. What is the Democratic answer to this process? Knowing it might take up the rest of the year.

Well, there's a lot there, Genie, and I don't know to the extent to which we're going to be getting news to Rick's point in the near term. On Capitol Hill. But Democrats don't seem to know what to do here either. You saw Chuck Schumer doing Sunday morning television refusing calls to step down. What is the Democratic answer to this process? Knowing it might take up the rest of the year.

You know, they don't really have a big voice here. They're going to have to pick and choose their battles. Yeah, Chuck Schumer all over on his book tour, at least on television at this point, and saying he's not going anywhere. And of course Bernie Sanders and Alexandria Casio Cortes hitting the trail and drawing really really big audiences. So you see the division. You know, Rick was just talking about the division between Republicans and the House. In the Senate, you see a division in the Democratic side between again the more moderates and the more progressive wing. And at this point the energy is on the progressive side and they are pushing for a fight. Chuck Schumer doesn't want to deliver on a fight, and he doesn't have a lot of power to but they are really looking for a fight. So I think maybe later in the year, the Democrats, moderates and progressives will stand together, and they will refuse to work with Republicans. And you know, we don't know whether that's going to be on the debt ceiling or something else. But there's so much coming up. But their powers are limited, so they're going to have to figure out how do we move forward, and their real aim has to be of course, twenty twenty six in the midterms.

You know, they don't really have a big voice here. They're going to have to pick and choose their battles. Yeah, Chuck Schumer all over on his book tour, at least on television at this point, and saying he's not going anywhere. And of course Bernie Sanders and Alexandria Casio Cortes hitting the trail and drawing really really big audiences. So you see the division. You know, Rick was just talking about the division between Republicans and the House. In the Senate, you see a division in the Democratic side between again the more moderates and the more progressive wing. And at this point the energy is on the progressive side and they are pushing for a fight. Chuck Schumer doesn't want to deliver on a fight, and he doesn't have a lot of power to but they are really looking for a fight. So I think maybe later in the year, the Democrats, moderates and progressives will stand together, and they will refuse to work with Republicans. And you know, we don't know whether that's going to be on the debt ceiling or something else. But there's so much coming up. But their powers are limited, so they're going to have to figure out how do we move forward, and their real aim has to be of course, twenty twenty six in the midterms.

Well, I suspect that we're going to be hearing a bit about this from the President and his cabinet members. Howard Lutnik, aforementioned Scott Besson also speaking today in a conversation that will bring you a little bit later on from the cabinet room. The Trump administration asking the Supreme Court Rick to allow the firing of thousands of probationary workers and an effort that was stopped by a lower court. And we're also seeing another important hearing take place today in Washington, Rick about whether to allow the deportation of in this case, Venezuelan detainees who are put on aircraft sent to El Salvador. We talked about this as well. Under the Alien Enemies Act, these will result of likely before reconciliation ever takes place. How important will they be to the policy coming out of this administration.

Well, I suspect that we're going to be hearing a bit about this from the President and his cabinet members. Howard Lutnik, aforementioned Scott Besson also speaking today in a conversation that will bring you a little bit later on from the cabinet room. The Trump administration asking the Supreme Court Rick to allow the firing of thousands of probationary workers and an effort that was stopped by a lower court. And we're also seeing another important hearing take place today in Washington, Rick about whether to allow the deportation of in this case, Venezuelan detainees who are put on aircraft sent to El Salvador. We talked about this as well. Under the Alien Enemies Act, these will result of likely before reconciliation ever takes place. How important will they be to the policy coming out of this administration.

You know, I think that the latter one has immense impact on the Trump administration's policy regarding deportations. You know, if the Supreme Court rules that they can't use the Alien Enemies Act as a precursor to deporting people without due process, then that's going to take a big chunk out of his aggressive efforts to put people on planes and send them, you know, outside the country. And so I think this is a bit of a gamble. You know, in most administrations, you kind of don't want to let the Supreme Court decide policy for you, so you try and stay within a certain level of activity that doesn't trigger that, or if it does trigger it, it's just seen as relatively minor policy disputes, and they tend to side with the administration on on administering the laws that are governing us. But in this case, I think that the Supreme Court is going to be setting a lot of policy for the administration, and I don't think they stand a chance of not liking the outcome. So it falls into the category be careful what you ask for.

You know, I think that the latter one has immense impact on the Trump administration's policy regarding deportations. You know, if the Supreme Court rules that they can't use the Alien Enemies Act as a precursor to deporting people without due process, then that's going to take a big chunk out of his aggressive efforts to put people on planes and send them, you know, outside the country. And so I think this is a bit of a gamble. You know, in most administrations, you kind of don't want to let the Supreme Court decide policy for you, so you try and stay within a certain level of activity that doesn't trigger that, or if it does trigger it, it's just seen as relatively minor policy disputes, and they tend to side with the administration on on administering the laws that are governing us. But in this case, I think that the Supreme Court is going to be setting a lot of policy for the administration, and I don't think they stand a chance of not liking the outcome. So it falls into the category be careful what you ask for.

So you have it from Rick Davis, GD Shanzano. Our signature panel.

So you have it from Rick Davis, GD Shanzano. Our signature panel.

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.

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.

It's true. Social posts from earlier today on Venezuela threatening a twenty five percent tariff on countries that import Venezuelan oil and gas. Of course, those continued tariff threats other subjects we heard the Cabinet discussing, including efforts to trim down the federal government tax policy as well, all of it feeding into the economic outlook. And we get the view on the economic outlook from the White House now with the Chair of the Council of Economic Advisor, Stephen Myron, sitting down here in our Washington, d C. Studio with our colleague Bloomberg's Salaiya most in Selia.

It's true. Social posts from earlier today on Venezuela threatening a twenty five percent tariff on countries that import Venezuelan oil and gas. Of course, those continued tariff threats other subjects we heard the Cabinet discussing, including efforts to trim down the federal government tax policy as well, all of it feeding into the economic outlook. And we get the view on the economic outlook from the White House now with the Chair of the Council of Economic Advisor, Stephen Myron, sitting down here in our Washington, d C. Studio with our colleague Bloomberg's Salaiya most in Selia.

Thank you so much, Kayleie. We have Steven Meyern here with us. Stephen, you are the one of the top economists at the White House right now. Welcome to Bloomberg. You're serving in this role at a tenuous moment for the economy. We saw last week the Federal Reserve officials there cut economic growth outlook, also citing inflationary risks mostly from Trump's trade policy. And I want to know, do you think that the Fed has gotten the effects of tariffs on the economy?

Thank you so much, Kayleie. We have Steven Meyern here with us. Stephen, you are the one of the top economists at the White House right now. Welcome to Bloomberg. You're serving in this role at a tenuous moment for the economy. We saw last week the Federal Reserve officials there cut economic growth outlook, also citing inflationary risks mostly from Trump's trade policy. And I want to know, do you think that the Fed has gotten the effects of tariffs on the economy?

Wrong?

Wrong?

Thanks Salleiah. It's great to be here, so thanks for having me. Look, yeah, I think that folks that a lot of folks you know, have got the effects of tariff's wrong. I think there's there's quite a bit that people missbat tariffs. The number one point that I make about tariffs is a general point about economics, which is that when you think about any economic policy, a terriff, a tax, anything else, right, the economists believe that the party that bears the burden or the benefit of that policy is the party that's more inflexible. Because if you are flexible, you can change your behavior to avoid the costs. And so think about it this way. If you are buying a house and the town that you're looking at raises property taxes, right, you say, Okay, maybe I'm gonna look at the next the house in the next town over, right. Whereas so you can adjust your behavior flexible, whereas the seller of that house is inflexible. They already own it, so they have to drop their selling price. So in this example, economists would say, Okay, the seller of the house ends up bearing the increase in the property tax. And you have to think about tariffs the same way. US consumers are flexible. We have options. We can produce stuff at home, we have a variety of countries, we can import stuff, we can substant into home production. Whereas countries that sell to the United States are inflexible.

Thanks Salleiah. It's great to be here, so thanks for having me. Look, yeah, I think that folks that a lot of folks you know, have got the effects of tariff's wrong. I think there's there's quite a bit that people missbat tariffs. The number one point that I make about tariffs is a general point about economics, which is that when you think about any economic policy, a terriff, a tax, anything else, right, the economists believe that the party that bears the burden or the benefit of that policy is the party that's more inflexible. Because if you are flexible, you can change your behavior to avoid the costs. And so think about it this way. If you are buying a house and the town that you're looking at raises property taxes, right, you say, Okay, maybe I'm gonna look at the next the house in the next town over, right. Whereas so you can adjust your behavior flexible, whereas the seller of that house is inflexible. They already own it, so they have to drop their selling price. So in this example, economists would say, Okay, the seller of the house ends up bearing the increase in the property tax. And you have to think about tariffs the same way. US consumers are flexible. We have options. We can produce stuff at home, we have a variety of countries, we can import stuff, we can substant into home production. Whereas countries that sell to the United States are inflexible.

They've only got the United States to sell to.

They've only got the United States to sell to.

There's no alternative, So they're the ones who will bear the burden of this of these tariffs, which means that there's going to be very limited pass through into downside economic risk or into higher prices.

There's no alternative, So they're the ones who will bear the burden of this of these tariffs, which means that there's going to be very limited pass through into downside economic risk or into higher prices.

So I think that a lot of folks have got that wrong.

So I think that a lot of folks have got that wrong.

But even Trump and his advisors, included in your colleagues, Elon Musk, Scott best in, the treasure secretary and others are signaling a no pay, no gain concept here that for a little while things could get bumpy in the economy.

But even Trump and his advisors, included in your colleagues, Elon Musk, Scott best in, the treasure secretary and others are signaling a no pay, no gain concept here that for a little while things could get bumpy in the economy.

Yeah, so there are some risks in the economy, but I think those risks predominantly derived from the transition from an economy which was primarily government driven to an economy that's primarily private sector driven, and that might contribute to make to make things bumpier and less robust in the short run. And just to give you one number that's a great example of that is if you look at the shares of the share of jobs created in twenty three, twenty twenty three, and twenty twenty four, so the second half of the Biden administration, when COVID is over, and it's really just a result of bidenministration policies, seventy three percent of all jobs created in those two years were due to government and government adjacent sectors. By government adjacent, I mean sectors like education, sectors like healthcare, social assistance. These are sectors of the economy that derive a very large or maybe even in some of them, the majority of their financing ultimately from the taxpayer through direct transfers or substies. So three quarters of jobs created in the last couple of years came from basically, you know, sort of government expenditures and taxpayer substies. So it is a brittle economy as we transition away from that to the private sector.

Yeah, so there are some risks in the economy, but I think those risks predominantly derived from the transition from an economy which was primarily government driven to an economy that's primarily private sector driven, and that might contribute to make to make things bumpier and less robust in the short run. And just to give you one number that's a great example of that is if you look at the shares of the share of jobs created in twenty three, twenty twenty three, and twenty twenty four, so the second half of the Biden administration, when COVID is over, and it's really just a result of bidenministration policies, seventy three percent of all jobs created in those two years were due to government and government adjacent sectors. By government adjacent, I mean sectors like education, sectors like healthcare, social assistance. These are sectors of the economy that derive a very large or maybe even in some of them, the majority of their financing ultimately from the taxpayer through direct transfers or substies. So three quarters of jobs created in the last couple of years came from basically, you know, sort of government expenditures and taxpayer substies. So it is a brittle economy as we transition away from that to the private sector.

But the FED and you know FED officials are correct, then that there will be at least short term pain as tariffs kick in.

But the FED and you know FED officials are correct, then that there will be at least short term pain as tariffs kick in.

So I don't think that there's going to be material short term pain from from the tariffs. I think the short term pain is coming from the reorientation of the of the economy from the government to the to the private sector.

So I don't think that there's going to be material short term pain from from the tariffs. I think the short term pain is coming from the reorientation of the of the economy from the government to the to the private sector.

Now, of course, you know, as you know, the tariff.

Now, of course, you know, as you know, the tariff.

Situation is still developing, and the President will decide what he wants to. The President will decide what the tariffs are on April second, and has been very clear telegraphing that let's.

Situation is still developing, and the President will decide what he wants to. The President will decide what the tariffs are on April second, and has been very clear telegraphing that let's.

Talk about the tariffs, what's coming down in April second, that the President has tasked his advisors and his team with an immense job here to come up with these tariffs for next week. What can you share about the contours of this. Should we expect country by country tariffs, sectoral tariffs being announced?

Talk about the tariffs, what's coming down in April second, that the President has tasked his advisors and his team with an immense job here to come up with these tariffs for next week. What can you share about the contours of this. Should we expect country by country tariffs, sectoral tariffs being announced?

Sure?

Sure?

So, Look, you know, it's important to calculate a whole variety of things when you're thinking about non terariff when you're thinking about about fair and reciprocal tariffs, those include outright tariff rates that have a country's charges, and they also include non tariff barriers right ways that countries prevent us selling our experts into their markets through means other than tariffs, through not opening their markets, through intellectual property theft or or lack of enforcement, through currency changes, through regulatory you know, regulatory differences that prohibit our products from entering their markets. And you have to consider this entire host of things, right, and so the dimensions of analysis can get really big, really fast. Now that goes at odds with another principle, which is that simplicity is great, right, and so the you know, simplicity is a virtue when you think about these things in one in one sense because it makes it more difficult for other countries to gain. Now the situation is developing, you know, the team and the pre and the president are entertaining or entertaining options. It would be wrong for me to get ahead of that, but you know, we'll we'll find out soon, Stephen.

So, Look, you know, it's important to calculate a whole variety of things when you're thinking about non terariff when you're thinking about about fair and reciprocal tariffs, those include outright tariff rates that have a country's charges, and they also include non tariff barriers right ways that countries prevent us selling our experts into their markets through means other than tariffs, through not opening their markets, through intellectual property theft or or lack of enforcement, through currency changes, through regulatory you know, regulatory differences that prohibit our products from entering their markets. And you have to consider this entire host of things, right, and so the dimensions of analysis can get really big, really fast. Now that goes at odds with another principle, which is that simplicity is great, right, and so the you know, simplicity is a virtue when you think about these things in one in one sense because it makes it more difficult for other countries to gain. Now the situation is developing, you know, the team and the pre and the president are entertaining or entertaining options. It would be wrong for me to get ahead of that, but you know, we'll we'll find out soon, Stephen.

The other thing that a lot of people here at Bloomberg have been talking about is this paper that you wrote in November, after elections, but before you were nominated to be CE chair. The title of this paper was a User's Guide to Restructuring the Global Trading System, and it has caused a stir. You talk about some unorthodox policies like revaluing US gold stocks, applying a user fee to treasuries, and a new global currency accord. Can you tell me how much of this is in the works now?

The other thing that a lot of people here at Bloomberg have been talking about is this paper that you wrote in November, after elections, but before you were nominated to be CE chair. The title of this paper was a User's Guide to Restructuring the Global Trading System, and it has caused a stir. You talk about some unorthodox policies like revaluing US gold stocks, applying a user fee to treasuries, and a new global currency accord. Can you tell me how much of this is in the works now?

Yeah, So I'm glad you brought that up, because this paper seems to have taken on a life of its own against all my intents. Look, I'm pretty clear in that paper that it's a catalog of available options, and you know, it's a recipe book, and I'm trying to evaluate how useful or not useful or easy difficult those various recipes are to make. Some of them are easy, some are tough, some are you know, you know, some are are are filling satisfying meals, and some will leave you hungry again in a half an hour. And my goal in that paper was to provide an evaluation of options, that a cost benefit analysis of risks and rewards, so that whoever was making a decision, you know, sort of could have that available if if if helpful. To be clear, you know, I'm not the chef, right The President is the chef, and he's been very clear, very clear that he's focused on fair and reciprocal tariffs. Uh, he couldn't be clearer, and so anybody who's anybody who's thinking that that something that I that I included in a catalog in November is the source of is what the policy agenda is?

Yeah, So I'm glad you brought that up, because this paper seems to have taken on a life of its own against all my intents. Look, I'm pretty clear in that paper that it's a catalog of available options, and you know, it's a recipe book, and I'm trying to evaluate how useful or not useful or easy difficult those various recipes are to make. Some of them are easy, some are tough, some are you know, you know, some are are are filling satisfying meals, and some will leave you hungry again in a half an hour. And my goal in that paper was to provide an evaluation of options, that a cost benefit analysis of risks and rewards, so that whoever was making a decision, you know, sort of could have that available if if if helpful. To be clear, you know, I'm not the chef, right The President is the chef, and he's been very clear, very clear that he's focused on fair and reciprocal tariffs. Uh, he couldn't be clearer, and so anybody who's anybody who's thinking that that something that I that I included in a catalog in November is the source of is what the policy agenda is?

Now? You know, I think I think that's wrong.

Now? You know, I think I think that's wrong.

So tell me a currency accord, A mar Alago accord. Is that currently in the works.

So tell me a currency accord, A mar Alago accord. Is that currently in the works.

The President's been very clear that he's focused on fair and reciprocal tariffs, and you know that's what that's what that's what the team is working on.

The President's been very clear that he's focused on fair and reciprocal tariffs, and you know that's what that's what that's what the team is working on.

Is it a twenty twenty six goal? Did you a currency pact?

Is it a twenty twenty six goal? Did you a currency pact?

I mean, look, I would look at it this way. I would look at it as the United States has been running very significant trade and current account deficits for a very long period of time. Those are very costly to us economically, they're very costly to disproportionately costly to some parts of the country that are reliant on manufacturing, reliant in exports. And there's a variety of means of trying to address that problem. Right, the President very clear that he wants to start with tariffs, and that's what we're doing.

I mean, look, I would look at it this way. I would look at it as the United States has been running very significant trade and current account deficits for a very long period of time. Those are very costly to us economically, they're very costly to disproportionately costly to some parts of the country that are reliant on manufacturing, reliant in exports. And there's a variety of means of trying to address that problem. Right, the President very clear that he wants to start with tariffs, and that's what we're doing.

Right.

Right.

We are starting with tariffs. We have been moving in tariffs. We are going to continue moving on tariffs. April seconds is around the corner, and that's the sole focus right now. Could it be something that is entertained down the road, Sure it could, but right now the president is focused on tariffs.

We are starting with tariffs. We have been moving in tariffs. We are going to continue moving on tariffs. April seconds is around the corner, and that's the sole focus right now. Could it be something that is entertained down the road, Sure it could, but right now the president is focused on tariffs.

In the paper you talk about an overvalued dollar. Is that still the case?

In the paper you talk about an overvalued dollar. Is that still the case?

Look, another thing that I think most of the economics profession gets wrong about tariffs is that all of these models of international trade all assume that trade eventually balances, and that if you run a trade deficit, the dollar will weaken and that will restore the trade deficit to balance. If you run a trade surplus, the dollar will strengthen and that will restore the trade surplus to balance. And so therefore the currency will adjust to balance trade over time, and there's no need for tariffs because the economy is basically self adjusting, self equilibrating, as an economist would say. However, it seems very clear that that's not the case. We've been running current account deficits for five decades now, and they only get worse in dollar terms and percentage terms lately. So you know, I think it's very clear that that standard model of the economy that assumes away the need for tariffs is wrong, because we have been running those persistent, those persistent current account and trade deficits. If the dollar were able to weaken to equilibrate trade, then we wouldn't have a lot of the to balance trade deficits. Then we wouldn't have a lot of the problems that tariffs and other policies are designed to address, because US experts would be more competitive on the global stage and we wouldn't be as cheated by other countries.

Look, another thing that I think most of the economics profession gets wrong about tariffs is that all of these models of international trade all assume that trade eventually balances, and that if you run a trade deficit, the dollar will weaken and that will restore the trade deficit to balance. If you run a trade surplus, the dollar will strengthen and that will restore the trade surplus to balance. And so therefore the currency will adjust to balance trade over time, and there's no need for tariffs because the economy is basically self adjusting, self equilibrating, as an economist would say. However, it seems very clear that that's not the case. We've been running current account deficits for five decades now, and they only get worse in dollar terms and percentage terms lately. So you know, I think it's very clear that that standard model of the economy that assumes away the need for tariffs is wrong, because we have been running those persistent, those persistent current account and trade deficits. If the dollar were able to weaken to equilibrate trade, then we wouldn't have a lot of the to balance trade deficits. Then we wouldn't have a lot of the problems that tariffs and other policies are designed to address, because US experts would be more competitive on the global stage and we wouldn't be as cheated by other countries.

Trump has talked a lot about maintaining the dollar as the world's reserve asset, but also there's a desire for a weaker exchange rate. Aren't these dueling forces.

Trump has talked a lot about maintaining the dollar as the world's reserve asset, but also there's a desire for a weaker exchange rate. Aren't these dueling forces.

So there's a variety of means which you can take to try to address the problems in demand, which the allocation of demand across countries, which leads to the persistent trade deficits that we have in the United States and that we have had for decades in the United States. There are various means of doing so, right. Some of these means go down different paths right, and some of these means would be dollar positive, some of these means would be dollar negative. And again, the point of the esset that I wrote in November was to evaluate the variety of paths and just because there are many ways to get to an end result doesn't mean you want to take all the paths at once.

So there's a variety of means which you can take to try to address the problems in demand, which the allocation of demand across countries, which leads to the persistent trade deficits that we have in the United States and that we have had for decades in the United States. There are various means of doing so, right. Some of these means go down different paths right, and some of these means would be dollar positive, some of these means would be dollar negative. And again, the point of the esset that I wrote in November was to evaluate the variety of paths and just because there are many ways to get to an end result doesn't mean you want to take all the paths at once.

I mean you can't cut yourself in half.

I mean you can't cut yourself in half.

All right, Well, thank you so much for joining Steve Lovely to have you.

All right, Well, thank you so much for joining Steve Lovely to have you.

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.

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.