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Tara Davis Woodhull
Hey, this is U.S. olympic gold medalist Tara Davis Woodhull.
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Hunter Woodhull
And I'm U.S. paralympic gold medalist Hunter Woodhull.
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Tara Davis Woodhull
As athletes, our lives are about having
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Hunter Woodhull
a clear path and a team that
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Kelly
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Tara Davis Woodhull
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Hunter Woodhull
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Tara Davis Woodhull
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Kelly
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- [00:55]
Joe
There is quite the intersection between what's happening on Wall street or how Wall street is reading what's happening in Washington as President Trump is trying to continue his tariff regime just using different authorities that involve a lot of numbers after the Supreme Court of course dealt him a major blow on Friday, ruling the tariffs he had placed under the Emergency Economic Powers Act IPA unconstitutional or illegal. So now we're on to section 122, potentially section 232, section 301. Those later two, though Joe of course require investigation, whereas the section 122 tariffs are set to go into effect.
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Kelly
As if the Alphabet soup in Washington were not enough. I'm getting a popsicle headache. If you are, you're not alone. It is 122 for now, but he's got 150 days there if you want to add more numbers, which is why many are thinking that 301 is going to be the longer term solution here. But that involves an investigation. It's going to take some time, Kelly, and the markets don't love waiting in conditions like these. So let's start our coverage before we talk to Michael McKee with Jeff Mason, Bloomberg White House correspondent. He's on the North Lawn right now. Which reminds me to tell you that Mayor Mandani of New York will be holding a news briefing about 15 minutes from now on the storm cleanup. We didn't get nearly as much as New York here in the nation's capital, which allows us to talk to Jeff outdoors today. It's great to see you, Jeff. I don't know if we should assume that this is going to be the case for the next 150 days or how long this 301 investigation is going to take. But what's the White House preparing for?
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Hunter Woodhull
Well, I think that, I think you're right to say that they're basically wanting to have something in place to make up for what they lost on Friday, which was the broader executive authority that President Trump has taken for himself on trade and on tariffs since the beginning of his administration that the Supreme Court struck down. So they haven't said specifically what the, what the plan is, other than what he told everyone in the White House press corps at the press conference on Friday, which is that they basically have the plan B. And those are all of these other authorities that you were just referencing. I don't think he's going to walk away from that in less than 150 days. What I think they're going to do is try to have something in place that's more permanent by the time that that deadline pass.
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Joe
Well, I guess it becomes a question of can they do so. Jeff, We've seen Section 232 investigations open before and concluded and tariffs gone into place as a result. How much can this process be escalated, fast tracked, if they're trying to make sure that the revenue gap does not, does not actually grow?
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Hunter Woodhull
Yeah, it's a great question. I don't really know the answer. But what I do know, that there's political will to do it as fast as they possibly can. But of course, having been having lost this case at the Supreme Court Friday, they have to do it legally. They have to follow the statutes and the laws and the regulations that require the investigations that you were just referencing. So, you know, I'm, I'm the wrong guy to say how long each of those investigations are required to take. But for sure, this is a president who will be putting a lot of pressure on his trade team to do them as fast as legally possible so that he can maintain that revenue stream that you mentioned.
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Joe
All right, Jeff Mason, never the wrong guy. We appreciate your reporting from the White House North Lawn, of course. A correspondent for us here at Bloomberg. Thank, thank you so much. And as we consider the political calculations the president and the administration are making around tariffs, clearly their decisions will have economic consequences as well. And I'm imagining that's featuring pretty heavily in the discussion at the location where we find Bloomberg's Michael McKee. He is joining us live from here in Washington, but at the national association of Business Economics Conference. Nabe which Mike, I am sure the market driving forces we're looking at today, both this tariff conversation as well as artificial intelligence are also a lot of what you're hearing about.
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Michael McKee
There's a lot of talk about both here, Kelly, but it's it's really the labor market that has caught most people's attention for the moment because the folks here that they're paying attention to are central bankers. Governor Chris Waller of the Federal Reserve this morning saying that he's not sure the strong January payroll numbers are a trend and he wants to see the February payroll numbers before deciding whether he would advocate for another cut at the March meeting. His view view on the tariffs is they don't change much under this 15% section 122 method that the President is using now. And there's no real certainty about what the President's going to be able to do with the various other sections he might imply. But to Waller, it doesn't matter because even if they provide some more inflation, he still says it's going to be a one off kind of thing. Prices go up once and then stop rising. So he's going to look through it. He's not particularly worried about it yet. We're also hearing right now from Christine Lagarde who said that basically Europe is kind of behind the US On AI but has enormous potential out there and Europe is trying its best to get its act together and to move forward and keep up with the US So AI and trade and tariffs and the labor market, the big concerns here right now.
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Kelly
Well, that seems to be plenty to go around here, Michael McKee, and if the real worry is not about tariffs, at least when it comes to Mr. Waller, I'm wondering, you know, how we rationalize this reaction in the marketplace. And news today, for instance, from the European Union that they're going to put the trade deal that they struck with the United States on ice until they learn more. Doesn't that further cloud the picture?
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Michael McKee
Oh, absolutely, it clouds the picture. It makes it more uncertain. And Waller and Christine Lagarde both acknowledged that. But the problem is there's no sense on when there will be clarity because we don't know how long these investigations will take. We don't know what the administration is going to come up with at the end of that. So it just leaves everybody sort of up in the air and just continuing on the way they have been now. And it probably means we don't see huge price increases right yet, but we could down the road. So that's something to keep track of. And then, of course, is the question of what will I do to the labor market down the road. There have been and some sessions on that as well. And again, nobody knows. This is a very uncertain time for economists as well as politicians.
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Kelly
Uncharted is a word we like to use when we Talk to Michael McKee. It's great to have you back, sir. We thank you and good to have you in town. At the NAB conference, Bloomberg International economics and policy correspondent as we add, the voice now of Laurie Wallach, the director of the Rethink Trade program at American Economic Liberties Project, with our eyes on tariffs and what might come next. Laurie, it's good to have you with us here on Bloomberg TV and Radio 1 22. Do you even care when we're talking about tariffs at 10 or 15%?
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Tara Davis Woodhull
The President is looking to reestablish that same rate of tariffs that he had under ipa. And there is a smorgasbord of different congressional delegations of tariff authority that I suspect they're going to sequence into place to try and achieve that outcome.
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Joe
Well, so when we consider what outcome President Trump would like to get, specifically what he would like to elicit from our trading partners in the form of deals. The president took to true social earlier this morning to say any country that wants to, quote, play games with the ridiculous Supreme Court decision, especially those that have ripped off the USA for years and even decades, will be met with a much higher tariff and worse than which they just recently agreed to. I think he probably is alluding to the EU here, Laurie, but when we consider how high those tariffs can go, is there a limit under these other authorities? Because of course with IPA he just kind of slapped whatever rate he felt appropriate. Can he do so using other legal grounds?
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Tara Davis Woodhull
There are other legal grounds that actually allow quite high tariffs. So the unexplored IPA like instrument is a law called Section 338 of the Trade act of 1930. It hasn't been used since World War II. No one knows how it would go if it were challenged in court, which certainly it would be, but that would take many months. That allows up to 55.0% for an unlimited amount of time on a presidential basically self finding of a fact of discrimination against the interests of the United States. That one's very loose. The other provision, section 232, which is you have to have a report finding a national security basis for raising tariffs in section 301, which requires an investigation, you need to find basically unfair practices against the United States of a particular country. Those mechanisms have more procedures on the front end, but they don't have limits on the back end with respect to how high the tariffs can go. And all of those have an unlimited time. So section 122 is maximum 15% for a balance of payments problem for only five months. The other ones, the three of them, 301 and 232 have gone through the courts and have been declared fine. 338, more of a mystery, but lots of other delegated authorities for a president to use tariffs.
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Kelly
And for those other three approaches, how long would these investigations last? Might they outlast the midterms?
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Tara Davis Woodhull
Section338, again not used for since before I was born, is a process that can be very speedy. I guess the outlying question as far as how long it could stay in places if it got challenged in court, how long it would take before you'd have a ruling that would take it down if it were ruled against. As far as sections 232 and sections 301, it's probably unhelpful to say, but it kind of depends. It depends how many countries, how many issues. And also the quality of the investigation. There have not been cases challenging the qualities of the investigations. A very good section 301 investigation can be done in four or five months. Typically they take longer. It just depends how many people they're going to put on it. I think that, you know, as far as the midterms, the big X factor is as far as section 122, the 150 days runs out on July 24 and then it goes to Congress to try and extend it. And that could really make an interesting political problem because members of Congress would have to go on the record right then about whether they want to extend that authority or not.
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Joe
Well, and we've already heard from the Senate Minority Leader, Chuck Schumer, who has suggested Democrats will not vote for an extension. That probably makes it a dead on arrival proposition in the Senate. When we consider the 60 vote threshold on section 122. You mentioned how that will run out in July. Is there time between now and July for that to be challenged in a court of law? When we consider the authority he's using or the justification for using that authority. Are we in a balance of payments crisis right now? Could that not end up in court?
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Tara Davis Woodhull
So I recommend folks should look at the actual proclamation they issued. They actually have thought it through and they make a case that is not wrong. It is a case that maybe could get challenged. Almost certainly, to answer the direct question, almost certainly a lawsuit is going to get filed, but in the five months it seems extremely unlikely that will work. Its way through the courts to a point where there would be a final order. So yes, a challenge, but no, not probably a decision as far as the merits of the case, it's not the people who are saying this is ridiculous. They're basically looking back at the time period when that statute was written and we were just coming off of a gold based currency. And those conditions obviously were not literally in a balance of payments crisis in the sense of checks are going to bounce, but in the sense of what a balance of payments crisis is with respect to our overall current account balance and other factors. You can make the case, which they do in this proclamation and economists watching everyone look and come back to US Trade lawyers and say what you think. But yeah, I think that will get challenged. I also think though that they've got other potential laws to put in place place that they could do in that period of time. The much bigger X factor, honestly, is the refunds.
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Kelly
Well, I'm glad you just brought that up because as we wait to hear from the mayor of New York, he's going to be holding a news conference any moment now on the storm cleanup. Laurie, there are huge questions about refunds. No one's got any answers. And we know a lot of lawsuits have already been filed and were filed in advance of the Supreme Court ruling. We heard earlier today from the chairman of the Ways and Means Committee in the House, was speaking with us here on Bloomberg TV and radio with his thoughts on the prospect of paying back all this money. Listen, in regards to the tariffs, I think it's very certain there's probably not going to be any refunds. I don't see a pathway in Congress that there's going to be refunds. And so you're going to look at over the course of President Trump's administration, he's going to continue to use those tariff revenues to bring down the deficit. What do you think about Congressman Jason Smith there, Laurie? And if you're a Costco, for instance, and you already filed suit, does that put you at the front of the line? Potentially.
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Tara Davis Woodhull
So I suspect there are a lot of people in boardrooms who have a very different take than Chairman Smith about that question. And honestly, as a trade lawyer, I would say the question is not an if, it's actually a how question. There's a history of tariffs being refunded and there are different mechanisms. The thing that's particularly thorny with this situation as compared to the usual situation, which is say a preference program like the Generalized System of Preferences doesn't get renewed and so you have to pay in for an extra year when it should have been renewed and you wouldn't have had to pay, then that money comes back. In this instance, the tariffs were so broad on so many goods affecting so many countries that actually there's a big question where there's a gap between who is booked at customs for the entity that paid a tariff and who actually paid. So as a practical matter, it's going to be extremely difficult to figure out a fair way to do it. So Costco is so big that in some circumstances I bet their procurement people would fess up to the fact they probably made their foreign suppliers cover a lot of the tariff by either giving them a lower price on the good or by literally paying a payment to have to cover that expense, a condition for continuing to source from that particular tariff entity overseas. So the big companies that have dominant market positions and basically monopoly power could avoid paying some of them then not saying Costco did, passed on expenses to consumers. So even though they didn't pay, they raised their prices. And then you've got companies that raised prices that didn't get charged tariffs at all. So you've got a big question of how the consumer is made whole.
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Michael McKee
Yeah.
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Tara Davis Woodhull
How you don't end up with windfall profits from companies that didn't pay but are booked as paying. And then there's always the question for small businesses, what is a system that hopefully is even less complicated than like paycheck protection so they don't have to go to court?
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Joe
Well Laurie, when we consider these questions around refunds, I would point to what a former senator from Ohio hoping to be senator from Ohio again. Shared. Jared Brown, the Democrat is out on X posting about today. He says he's calling for a thirteen thirty six dollar refund for every Ohio household, saying that the reckless tariffs ruled illegal by the Supreme Court cost Ohioans six and a half billion dollars. That's not really how this will work though, right? You aren't going to see direct checks to households like that.
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Tara Davis Woodhull
You know, given the complexity I was just describing, that's as fair way of doing it. Honestly, really anything that's going to come out one way or another, there's going to be an unfairness. And given how many people have been hit by rising prices, some of it, again, price gouging using the COVID of tariffs. I mean the beef situation is a classic. 80% of the beef wheat in the US is grown and processed here. So only 20% of imports. And of that half of it has always been duty free because it comes from Mexico and Canada, which from day one under the Trump tariffs have had a duty free exception. So we've seen the prices of beef go through the ceiling has nothing to do with tariffs. Yet it's been claimed by the grocery stores, the meat packers. Oh, we can't help you. It's tariffs. We have to pass through the price. So if you had for instance the Costcos and those guys who have the wherewithal to sue getting back the money, but actually a lot of consumers have been the ones who in the end paid and some of the big retailers didn't pay at all because they had the leverage to make someone else carry it for them. How is that fairer than Senator Brown's idea of giving everyone a check?
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Kelly
Wow, Laurie, it's fascinating and refreshing to speak with someone who knows as much about this as you do because there are a lot of armchair experts in Washington right now when it comes to, to tariffs. The President said on Friday when he met the press after the ruling. Going forward, we will be able to take in more money and there will no longer be doubt. Is the first part of that true? He will be able to take in more money from fill in the blank, whether it's consumer importer or foreign country with the new tariff regime than the old one.
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Tara Davis Woodhull
I think it is hypothetically possible, although seems somewhat improbable. So as a legal matter, if they used all of the authorities that they have, at least like in the year period, the short term, they might be able to bring in 150 billion. That is more or less what I think the most clean estimates are of the revenue they brought in to date since Liberation Day. And I think, you know, with the, with the laws that they have, they could do that. They could proximate the same kind of tariff levels that they were able to do under ia. Whether or not that's what they're going to do is a different question.
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Joe
All right, Laurie, great stuff. We appreciate your expertise. Lori Wallach, director of the Rethink Trade Program at the American Economic Liberties Project, thank you so much.
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Kelly
Stay with us. On balance of power. We'll have much more coming up after this.
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- [20:07]
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- [20:26]
Kelly
We've put the band back together. Charlie's back from the great unknown. He was up in Alaska. We thought we'd lost him. We've got the panel back. Rick Davis is with us this week. They'll be coming up a little bit later. And Cliff Young's going to be with us in a moment to Kaylee's here. Everything's going to be fine. The news might not be fine, but we are going to be fine as we talk about the news. And there's a lot of it ahead of the State of the Union address tomorrow night, remembering the president's attempts to address the issue of affordability in a series of speeches. Right. He went through Pennsylvania, went to Detroit, he went to North Carolina, of course, even last week went to Georgia to seize on the issue that not only brought him here to the dance, but but threatens the Republican majority on Capitol Hill.
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Cliff Young
Listen, we inherited a mess with high
- [21:13]
Kelly
prices and high inflation and we've turned it around and we've made it great. They caused the affordability problem and we've solved it. What word have you not heard over the last two weeks? Affordability. Because I've won. I've won affordability. I've won affordability. So as we fast forward to tomorrow night, what will he say? If he seizes on the classic line, you know, he's going to talk for 45 minutes, an hour, maybe it's longer than that. We'll all be, we'll be up there flipping through the page. Think he's halfway through. We'll see how much time he even spends on the script. Maybe he wants to rift tomorrow night. We do the weave. But at some point, with this being an actual state of the Union, as opposed to the joint session we saw last year, the state of our Union is affordable. Cliff Young has been investigating this whole idea in his research at Ipsos and he is with us now in Washington, D.C. u.S. Public Affairs Chair at Ipsos, Professor, Texas A and M University's Bush School of Government and Public Service it's always great to see you, great to be here. 60% do not approve of the job he's doing. As he gears up for the speech. Does he need to speak to them tomorrow night?
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Cliff Young
Well, he's on shaky ground Right. If you flip that and you look at approval ratings, we have him at 39%. The overall market's about 41. Overall, it's come down about three or four points in the last few months. There's a lot of stuff going on. There's lots of friction in the system. Immigration, immigration enforcement, but affordability as well. But I think he has a tricky task in this State of the Union. The most important issue, affordability is his weakest point. He polls in the range of about 30% when it comes to affordability and cost of living. So it is a challenge for him going into it.
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Kelly
Does it make it worse when he says that he solved it, that he won?
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Cliff Young
Yeah, I think that's he's talking to his base. Perhaps that's the big question. Will he talk to his base exclusively? Will he talk to the population in general?
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Kelly
Didn't Joe Biden teach us that you can't tell people how they feel very successfully?
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Cliff Young
Yeah, it's committing the same sort of problems of the last administration. Remember Biden nomics? Things are going well when we would do focus groups and people would start screaming at the TV screen when they would hear that. It's the same sort of thing. You've got to be very careful not to create dissonance. That creates dissonance. When you talk to the average American today, they are having problems still making ends meet. It's about cost levels. It's not about inflation. It takes inflation. Inflationary effect is gnarly and it takes a lot of time to work itself out. And to date, that has not been the case in United States.
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Kelly
Really interesting. Now you talk about the base, and you've used that word a couple of times. You're one of the few researchers here who is actually polling non maga. When we talk about the base, we mean maga. Right. So if you broaden this to Republicans that include non MAGA voters, how different are the numbers?
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Cliff Young
Yeah, a few months ago, we started dividing that out, separating it out. When you look just at Republicans, it looks like a monolith, usually a supermajority in favor of whatever issue you're talking about. But when you peel away that onion a bit and you separate MAGA from non maga, you're finding fairly large differences. The MAGA base is still there. They still support Trump on many issues, including tariffs, for instance, which we just polled on in the 70 to 80 plus range. But when you look at non MAGA Republicans, those Republicans that are really important on election day, going to be really important for the midterms, they're below 50% on most of the signature issues at hand with the Trump administration.
- [24:56]
Kelly
Really interesting. And it makes you wonder then what kind of a jailbreak we could see by, by more traditional non MAGA Republicans in Congress. I know this may be a dwindling number of members, but there was a thought on Friday that the Supreme Court may have saved Republicans from losing the midterms of the President simply bearing back down. Could he find the line here based on those numbers with non MAGA members of Congress?
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Cliff Young
Yeah, I think he's. He would have to seriously change course. Right. I think a lot of the MAGA members tend to be moderate, tend to believe in kind of consensus based solutions, are not in favor of the tariffs. Only about 45 or so percent of non MAGA Republicans are in favor of the job that Trump is doing on tariffs. They're more traditional Republicans ultimately. But you're very right and I often emphasize those points. Indeed, it looks like it will be a blue year when it comes to the House, maybe the Senate, but especially the House this year. But more importantly, I believe is the profile of Republicans. I think we could see a more moderate class coming in, not just at the national level, the federal level, but at the state levels as well.
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Kelly
Interesting. You talk about who is equivalent, best equipped to handle major issues. Trump, Democrats, neither. It's like the same number on all three. This is the ultimate division here, isn't it?
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Michael McKee
Yeah.
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Cliff Young
We live in a divided country today. 50. 50, I guess. 1/3, 1/3, 1/3.
- [26:25]
Kelly
Yeah. Yeah.
- [26:25]
Cliff Young
It suggests the importance of the independent as a swing voter. Now they don't vote in the same numbers during the midterms, but they are also important. Indeed. They really explain Trump's decline in his numbers over the last year. He's really lost the support of those independent minded libertarians and sort of moderate conservatives.
- [26:47]
Kelly
So that number, that neither number you're looking at is an independent voter bloc.
- [26:51]
Cliff Young
Yeah, there's somewhere. There's somewhere. They haven't sort of put their hat in one ring or the other. They're probably from political perspective, they're somewhere in the middle.
- [27:01]
Kelly
Well, it's interesting. It's not Republican Democrats and neither. It's Trump Democrats in neither, which is how you smoke them out here. Right?
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Cliff Young
Exactly. Because that mega MAGA base will be with Trump until the end. They are there no matter what. It's really not just about the independents, but it's about those moderate Republicans and who they vote for or more importantly, whether they vote on election day.
- [27:24]
Kelly
Does the state of the union matter for people outside of the Beltway, when it comes to deciding what issue or what, what politician or what policy they like.
- [27:33]
Cliff Young
No, it's noise and it's very far away.
- [27:34]
Tara Davis Woodhull
Okay.
- [27:35]
Cliff Young
No. However, the State of the Union is very important.
- [27:37]
Kelly
Yeah.
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Cliff Young
Because we're going to be able to go into the mind, get into the mind to understand Trump and the administration, where they are, how they see things, whether they're aligned or not with what people think. So I do think it's an important benchmark, but only for us and not the population in general.
- [27:53]
Kelly
Paul Sweeney said earlier he's not even watching this, this thing tomorrow. I don't know if he's watching the Sopranos or we're going to have it here on Bloomberg. You know, I'll be very curious to see what kind of guests we're going to see once we get through the US Men's hockey. They got to be in the gallery. Right. Are we going to see victims of illegal aliens, a sort of bleak view of the country tomorrow night? Is this going to be a more hopeful view? We're going to pack the stands with astronauts and hockey players. How dark or light might this be?
- [28:26]
Cliff Young
Well, historically speaking, presidents have tried to gain consensus through bringing in sort of individuals. That represents consensus in one way or the other. Trump has never done that. Trump tends to be more divisive in the way he approaches his rhetoric and approaches his politics. I expect to have these credibility building individuals there. I think they will tend on the side of MAGA and being a little bit more divisive than not. But, but we will see.
- [28:53]
Kelly
President Trump's producer, James, just dug this out. His speech last year, that was March 4th, by the way. The joint session of Congress, 36.6 million viewers. With the madness that we've seen worldwide since then, that number is only going higher, right? It might not be.
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Cliff Young
I think we'll beat it.
- [29:10]
Kelly
Yeah, we're going to beat that for sure.
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Michael McKee
Yeah.
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Cliff Young
So people are paying attention.
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Kelly
Then the question becomes, what's the tenor and tone in the room? Will there be decorum and beholden signs yelling at the president?
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Cliff Young
Yeah, I think, I think there's a greater likelihood than in past years for this to be a non traditional State of the Union address.
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Kelly
We've already got like there are other competing states of the Union.
- [29:31]
Cliff Young
Yeah. But let's just take this one for the sake of argument. Trump. There's a likelihood that Trump will not go consensus. He will go really partisan in base. He needs to energize that base. It's a problem. He's looking towards a midterm and I see the Democrats as being non cooperative potentially. We live in this partisan time. I think they're energized. We'll see, obviously. But I think there's a likelihood of having a much higher likelihood of having a non traditional State of the Union.
- [29:57]
Kelly
Why would anyone do the official response if there's such a curse? If the speech doesn't help Trump, the response isn't going to help anyone else, is it? If you're Abigail Spanberg, you just won. Can you get any better than this?
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Cliff Young
Yeah, maybe you just want name recognition, you want to be known by a broader audience. It's a difficult sort of follow up.
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Michael McKee
Right.
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Cliff Young
Ultimately. But I do think that Democrats feel emboldened. They've won some off cycle elections even at the state level that are suggestive of what will happen later this year. I think they want to get their message out. They want to be seen as the affordability party, contrary to the Republicans and Trump. They have won the last few elections on that message. That's a good message for them. I think they'll want to hammer that home.
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Kelly
I haven't mentioned the Epstein files since we started talking and you did run numbers on this. The headline Epstein files undermine credibility of the political class. That cuts both ways.
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Cliff Young
Yeah, it's a pox in all your houses. It's not good for the political class in general. You know, both, you know, Americans on the right and the left want to burn it all down now, you know, so it really doesn't hurt anyone specifically directly. That said, I, I do think it takes away from the, you know, from, from the, takes away oxygen from Trump on the narratives he wants to push forward. It diverts attention away from those issues that are important to him. So it's probably a net negative for Trump because of that. But from a public opinion standpoint, they blame everyone.
- [31:23]
Kelly
State of our Union is affordable. What else could he say? Yeah, he's gonna do strong because we're safer or something like that.
- [31:29]
Cliff Young
Yeah. I also think he's, he, he might sort of double down the fact that the system is broken, the State of
- [31:33]
Kelly
our Union is broken and I'm the
- [31:35]
Cliff Young
right man to fix it. And look at what we're doing and I'm confronting the elites and the corrupt and pushing it forward. It's difficult. But I'm your man.
- [31:42]
Kelly
He didn't do it last year. Based on my research here, it was not our State of the union.that that he said, America is back. We'll see if he doubles down on that cliff. Great to see you.
- [31:52]
Cliff Young
Great to see you.
- [31:53]
Kelly
We'll see if you run numbers on the length of the speech. That's going to be another one as well. 36 million watched it last year and it was not short. We'll find out tomorrow night. Special coverage here on Bloomberg. I'm Joe. Matthew will assemble our political panel next. Stay with us on balance of Power. We'll have much more coming up after this. Financial growth begins long before the first investment. It comes from understanding what you're building toward, what's at stake and what success looks like for you.
- [32:26]
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- [32:28]
Kelly
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- [32:46]
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- [33:05]
Kelly
As we asked many of the same questions today, this Monday that we were asking on Friday, when it comes to tariffs, you listen to Bloomberg radio for five minutes. My God, how many times? 122, 300, 100 1974. Just slow down. I suspect the president will have more to say on this tomorrow. He's saying on Truth Social today he does not need Congress to help him with the tariffs and therefore that's why everyone thinks he's going to go to this. For now it's 122. Is he going to talk about this tomorrow? Sure. Of course. He's going to be looking right at the Supreme Court. What's he going to do to the justices? Will he shake John Roberts hand when he walks by? That's what everyone's been talking about. So it strikes me that it probably won't be an issue. Right. You know how this goes. Donald Trump says lots of nasty things about people until they're together and then they seem to become friends. Even Jay Powell had a pretty good time hanging out with him with the hard hats on. We'll find out knowing as well he's going to be talking about Iran with this massive buildup of military hardware in the Middle East. But really looking forward to hearing from Rick and Jeannie together on this. And this will be our chance for the first time in a week with talks now between the US And Iranian officials set for Thursday if we get that far the president. The New York Times is out with the latest bloody nose story here. Right. You do the bloody nose strike and you threaten something much larger to bring Iran to the table. Targets under consideration remain pretty much the same as well, headquarters of Iran's Islamic Revolutionary Guard Corps to the country's nuclear sites, which we've already hit to the ballistic missile program. But it's really interesting what Scott Besant said yesterday suggesting that on Fox News this might not wait until next weekend, claiming that Iran's regime is, quote, probably a week away, he said, from having industrial grade bomb making material, unquote. Well, what's that about now? And what will the president say about this tomorrow when he addresses the American people? We assemble our great political panel. They're both back together. Bloomberg Politics contributors Rick Davis and Jeannie Shan Zaino. Rick is Republican strategist and partner at Stone Court Capital. Jeannie is our Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ashe Center. Rick, I can't imagine that a president that a commander in chief would, would want to be announcing kinetic action during a State of the Union. But then again, this is Donald Trump. Do you believe that we're on the precipice of more strikes?
- [35:32]
Rick Davis
Yeah, I think as soon as he amassed this armada of power, you know, in the Persian Gulf and the Red Sea in the Mediterranean, I mean, like they have done as best they could from the sea of basically surrounding Iran, that you're not going to do that if you really don't mean business. And I can understand that there's a group within the administration who wants to see a deal cut. Steve Wyckoff said over the weekend that they think they're still got a plan to do that. And no doubt that's a better option for the president. But he's shown a likelihood to use force as a negotiating tactic. And I would not be surprised by anything, including an attack the night of the State of the Union where he would bring that up. So he is a, he is a theatrical genius. There are a lot of things you can say about Donald Trump, but he knows theater. We're going to see theater on Tuesday night. Whether that includes Iran or not, I don't know.
- [36:35]
Kelly
With his flair for drama. Jeannie, would you be surprised if the president arrived in the speaker's rostrum and said, upon my direction, you can imagine the rest of the statement. We have begun strikes against Iran.
- [36:50]
Jeannie Shan Zaino
Nothing would surprise me at this point, Joe. You know, I think the State of the Union for the president is a really important moment as it pertains to Iran for him to explain what the heck is going on. It was just months ago that he told us their nuclear program was, quote, unquote obliterated. Now we hear we are like sleepwalking ourselves into the biggest war that we have seen or been a part of in the Middle east in decades. Why? What has changed? As far as we know, nothing has changed with the proxies. Nothing has changed with their nuclear program. Nothing has changed on the ground with how they treat their citizenry, which is deplorable. So why are we doing this? The president has a moment in the State of the Union before he engages in limited strikes to explain. That doesn't mean he will, but he certainly owes it to the American people and to Congress to say, what is the point? And by the way, what is the goal? What does the United States get out of this? After Venezuela, we were told, oh, that's okay, that it's a violation of his promise not to get involved in wars overseas because it's in our hemisphere. Well, guess what? Iran is not. So why are we doing this? He has yet to tell us that. And the State of the Union is going to be his biggest audience to explain that. So, gosh, I hope he explains it before he engages in limited strikes.
- [38:18]
Kelly
Well, you know, there are going to be a lot of members in the room thinking about war powers, Rick. And it does look like the effort to check the president through legislation seems to be petering out. They don't even have all Democrats on board today. Pretty remarkable to see Representative Josh Gottheimer, Democrat from New Jersey, pull out of this. He issued a statement saying we respect and defend Congress's constitutional role in matters of war. Oversight and debate are absolutely vital. However, this resolution would restrict the flexibility needed to respond to real and evolving threats and risk signaling weakness at a dangerous moment. How many members do you think in that room he speaks for, Rick? Democrats and Republicans. Republicans.
- [38:59]
Rick Davis
You know, I think Representative Gotheimer actually speaks for the vast majority of the House of Representatives. I mean, there's a significant difference between a show of force, between using tactical military force and fighting a war. And we've gotten so used to this idea that they're the same, right? Oh, we're going to go to Venezuela, we're going to attack Venezuela. We're going to be stuck in this long war. Well, that's not what actually happened. You know, we supported Israel and its fights against the proxy groups that Iran supports. We were going to get involved in a long war there. That's not exactly what happened Syria we had soldiers stationed there for quite some time, but small number and we helped basically create a free Syria. That's not a long time war. So it just because it's happened in the past doesn't mean it's going to happen in the future. I think that speaks to a lot of House members, both Republicans and Democrat. Democrats have shown an interest over the last decade of being much more muscular when it comes to military affairs. And I think that's good for the country and it creates less of a partisan divide between Democrats and Republicans on key important national security matters. So, you know, this is a good news item. We should celebrate that because we don't have that many in Congress these days.
- [40:15]
Kelly
Well, I'll tell you, we had something to celebrate as Americans yesterday, Jeannie, if the State of the Union is going to do it for you, a US Men's hockey will. And I'm wondering if we're going to see Jack Hughes and his teammates in the gallery tomorrow night. There were videos around there. I told that they may or may not be real of the president calling things, you know, Cash Patel went to visit these guys after they won 46 years to the day after the Miracle on Ice. It's absolutely amazing. Will that be the moment, Jeannie, when both sides of the room get up and acknowledge these incredible Americans who won gold yesterday?
- [40:55]
Jeannie Shan Zaino
Oh, if they're there, absolutely. Even if they're not and the president acknowledges them, absolutely. I think we're going to see more than one moment when the entire room can get up and get together on things. But of course, you mentioned Cash Patel. Joe, why do you do this to me as the president?
- [41:11]
Kelly
Oh, you saw that getting attacked in
- [41:14]
Jeannie Shan Zaino
Mar a Lago and a 21 year old culprit apparently is shot and killed. Cash Patel is celebrating after he said through his spokespeople that he was not going there to do anything but business there. He was drinking his beer. He, he, by the way, criticized the former FBI director for doing the same. So, you know, I think there's a lot there that Caspitel needs to live down. We'll see if he accompanies the hockey team into the room tomorrow night.
- [41:44]
Kelly
We're looking at the video right now. Jeannie, this is something, man. If you want a party, you need to hang out with Cash Patel. I guess he's drinking the beer. He's throwing the beer all over the players wearing goggles. He's slamming on the table, fist pumping, table slamming display. And you know, everybody's having a Blast. The question is, is that appropriate for the FBI director? Rick, knowing everything that Jeannie just said, Mar a Lago is a deadly break in at Mar a Lago over the weekend here. He said he was not in Italy to hang out at the Olympics, but he looks like he's having a blast.
- [42:20]
Rick Davis
Yeah. No, look, I mean, first of all, let's all celebrate the Americas male and female hockey teams, right? Goal winners both. And look, I can't begrudge red blooded American going crazy and celebrating for gold medal victory at the Olympics. I mean, there are a lot of things I'll throw him under the bus to do, but this is not one of them.
- [42:44]
Kelly
This is one of them.
- [42:45]
Rick Davis
I'm happy he's there showing the flag and supporting our team. I disagree with his flavor and beer both wearing it and drinking it, but yeah, I mean, if I were the FBI director, I'm not sure there'd be much difference between Cash Patel and Rick Davis.
- [43:03]
Kelly
Well, even if maybe you pay your own way. Yeah. Michelob Ultra just flying around the room here. They must have been watching Landman. Democrats don't like it. Jeannie the gift and corruption is unreal, said Jason Crow. Sean cast in Illinois. Your taxpayer dollars funding the FBI Director's Italian vacation. Three million pages of evidence of a massive child sex trafficking range. And this is what the FBI director is doing right now. Jeannie, when do the hearings begin?
- [43:32]
Jeannie Shan Zaino
I think the Democrats may have to wait to see if they can take the House to have hearings on this kind of thing. But, you know, it is the hypocrisy, it's the public dime. It is so much going on that he is responsible for and it is his critique of the former director, not to mention flying around on this jet on the public dime. So there's a lot there to criticize. You think he might have a little bit more common sense than to do this publicly. And yet he did it and he did it full out there. And I'm curious to see what the President has to say about that because none of this makes him look good.
- [44:05]
Kelly
Well, he's very happy to see us be Canada there. And boy, I'll tell you what, maybe we'll see them all. Maybe. Or will all the men and women be up there? James, what do we think tomorrow? There aren't that many seats, you know, up in the gallery, but we got a lot to celebrate here. Two gold medals. Pretty cool and pretty amazing way to watch that whole thing come to an end. 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, D.C. at noontime eastern@bloomberg.com
- [44:40]
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- [45:06]
Joe
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