A (4:13)

Well, it's interesting, Tyler, some of the reporting that we've seen, based on an early look at some at least some of the the king's remarks, he will actually make reference to Naito. He will talk about the Aukus nuclear defense deal. He'll talk about the war in Ukraine. I guess it's just a question of how he gets to them. Might he mention Iran, or is that a step too far?

D (4:35)

It does seem like it's a possibility. In fact, from excerpt released by Buckingham Palace, Joe, the king is expected to say, quote, time and again, our two countries have always found ways to come together because we know at this moment the rift between the US and the UK really has focused on the Middle east and those allies not coming to meet President Trump's demand when it comes to securing the Strait of Hormuz, for example. And what has been some pretty stark rhetoric from some European leaders, including the German chancellor just the other day, criticizing this White House's actions when it comes to the war. So we'll see if the king ultimately ends up getting there. This is going to be a rather condensed speech, if you will. Right now, Buckingham palace is saying it's going to go about 20 minutes in Washington standards It's not necessarily that long, but I think we could expect probably a likely reference there because the backdrop, at least today for this White House while we are talking about this foreign visit, we are still getting headlines when it comes to Iran because at this point, it does appear that progress on those negotiations remains stalled.

C (5:39)

Well, and on the subject of Iran, Tyler, we of course heard from the president on True Social this morning that Iran has informed us that they are in a state of collapse. Excuse me, I'm still recovering from White House correspondence weekend. Iran is in a state of collapse, Tyler. He says they want us to open the Hormuz Strait as soon as possible. Is he alluding here to the deal that reportedly Iran had sent over that would see a reopening of the Strait, but a delay on talks for the nuclear program specifically?

D (6:07)

It does feel like that, Kelly. And there is some new reporting out from CNN within the last few hours that IR may be revising that proposal to send it over to Pakistani mediators, because the sense from the White House, including from that post from the president himself, is that they weren't very happy with the proposal by Iran, which our understanding is that we could see a reopening of the Strait of Hormuz in exchange for the US Lifting that naval blockade and maybe making some other concessions, according to Iranian state media, such as paying for damages, compensation for damages, pledges that the US Want to attack Iran again, and some sort of legal framework for the Strait of Hormuz. Many things that that at least publicly have been nonstarters for this White House. And perhaps the biggest sticking point here, though, is that Iran has indicated that they want to postpone negotiations and dialogue around its nuclear program. And we know that the White House says that's not going to fly for any potential deal. In fact, we had the US Energy Secretary Christopher Wright on Bloomberg Television earlier today saying that that is the point that the US Will not be able to compromise on. In fact, we've really just seen the US Bolster its position, too, when it comes to that naval blockade. We can say overnight there was that news that it did appear that an LNG tanker did successfully transit through the Strait of Hormuz. But, Joe and Kelly, our own analysts have said that there should be cautious optimism around that. The data that they are tracking at this point shows that for the most part, that traffic remains at a standstill.

A (7:37)

All right, Tyler, thank you so much. Joining us live from the White House, Tyler Kendall, ahead of not only the king's speech, but the state dinner that will take place at the White House. Still looking for the menu here, Kelly, which surely will be released later, but we'll also be looking for the toast. The press pool will be allowed into the dining room for this. And the toast is frequently something that makes the rounds on social media. Right. You're going to see this in everything from People magazine to sort of lifestyle shows. And that's a way for the president to reach people that he normally could not.

D (8:05)

Yeah.

C (8:05)

And the question's going to be what message will he send? As Tyler was just running us through, what message will we get from the British monarchy? Will it be a political or geopolitical one? More so than you would typically expect, or certainly more so than we saw when the king's mother, the late Queen Elizabeth, last did an address to Congress like this all the way back in 1991.

A (8:23)

That's right. I don't think they'll be singing American Pie at this day dinner that took place a couple of months ago. Stay with us on balance of Power. We'll have much more coming up after this.

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B (9:06)

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just Alexa play Bloomberg 11:30.

A (9:25)

Kelly, Bloomberg Politics contributors Jeannie Shan Zaino and Rick Davis are with us. Jeannie is our Democratic Analyst and Democracy Visiting Fellow at Harvard Kennedy School's Ash Center. Rick, Republican strategist partner at Stone Court Capital. Are you still rolling your eyes, Jeannie, like when we came out of Virginia, OR Does Ron DeSantis give Republicans the leg up?

F (9:45)

Still rolling my eyes. No surprise. But I do think, you know, Kelly mentioned dummy mandering. That is, of course, a big question mark. Does all of this backfire on the gop? But another idiosyncrasy, if you could put it that way, of the state of Florida is that they have a amendment, a fair district amendment, and that says that they are not supposed to be redrawing maps for partisan reasons. And this is why I question the Number four that he went after we had talked about, well, maybe he'll go after two, maybe three. But the bigger the number, the harder it is for them in court to argue that this is not partisan. Of course, we all know it's partizan, but the harder it becomes. And so I think that's another aspect of this that we have to look at is the sort of maximalist, as I know Rick called it, aggressive way in which he's done this. Does that backfire on them in court because of this amendment?

C (10:48)

Well, so Rick, weigh in here as Jeannie's talking about the potentially partisan nature of this. Of course, the Florida governor maintains that this is just a realignment due to population growth and an undercounting in the 2020 census. Call it what you want here, I guess. But do you think he might be making a mistake?

G (11:05)

Yeah, it's, it's really doubtful. I've been saying for quite some time that this, this effort to redistrict in midterm is a fool's errand. One, because you had to assume the Democrats were going to react to it, and they have. And so there's no real advantage today. But two, we've been watering down perfectly good Republican districts all along the way. And in a season where the Democrats have a huge advantage going into the midterms, the last thing you want to do is water down what otherwise would have been safer seats. You know, Democrats have been winning in districts that have plus 17 Republican histories to them them. And if you apply those to these new districts, goodbye, fellas. Four more Republicans going down because we made the mistake of midterm redistricting.

A (11:53)

Boy. Well, I don't know if it impacts the balance of power in the midterms here, Jeannie. We're told that money is extremely lopsided in favor of Republicans right now. How would those two rationalize each other?

F (12:10)

Yeah, and of course, Donald Trump, he has an enormous amount of money. And one of the sort of big questions about the Virginia case was why didn't the Republicans spend more in that case? So I think we have to see if they feel the need to spend in the Florida case. You know, there was a big story on the front page of the New York Times talking about what a difficult midterm this is looking like it's going to be. We've all talked about that before. For Republicans, money can help them that, but it may not be enough. And another wrinkle in this whole story is, of course, we are waiting for the Supreme Court to issue a really important ruling on the Voting Rights act, if they do that and it goes in a direction that leads to redistricting in the South. This Florida redistricting may not be the end of the redistricting wars because you may see states like Colorado and New York who have these ballot initiatives, initiatives jump back into this fray. And so there is a whole lot that can happen even before November. And you know, so far to Rick's point, this has been sort of a tit for tat and nobody has come out ahead. I suspect that's where we're headed now. But there's a lot of money being spent and a lot of energy focused still on redistricting across the country.

C (13:32)

Well, and of course, when we consider where all of this is is headed, Rick, it is an attempt by both sides to try to guarantee that they can retain or get control of the House majority after November. That said, having the House majority sometimes isn't all it's cracked up to be, as it can be very difficult to keep that majority together, especially when it is as narrow of a majority as the one that House Speaker Mike Johnson is dealing with right now, including, as evidenced just yesterday around the issue of, of FISA reauthorization of section 702 key intelligence gathering powers that have been given that the administration argues is vital to stopping terrorism threats here in the United States. He can't seem to get alignment with conservatives on this. This couldn't get out of the Rules Committee yesterday. They had to adjourn. Maybe they're going to try again today. Rick, but how do you think the speaker finds his way out of this one? Is the solution actually not going to be found in the House, but the Senate jamming something down the House's throat?

G (14:29)

I mean, at some point, the Speaker's got to take a look at this and say, you know what? I am tired of living in this caucus. We don't get anything done. It's the least productive caucus in modern history. And he's got plenty of Democratic votes who'd be willing to vote on the FISA deal. And so, like, when are we going to just start doing bipartisan deals? He can't get this bill through. He's got 10 members who have already said, we're not voting for this bill yet. He keeps bringing it up, you know, for a vote. I mean, it's just stupefying to me that our country is being held hostage by caucus politics. The more power that Johnson could have would be cutting a deal with Democrats, passing these bills, getting that agriculture bill Done getting the FISA deal done and starting to act like a powerful speaker who doesn't have to be held captive by 10 people in the Freedom Caucus. I mean, honestly, I scratch my head every time I see this replayed and it's been done over and over again. Why anybody would be allowed to be holding hostage the most powerful man in Congress?

A (15:37)

Well, Rick's really getting to it here, Jeannie. Would there be 10 or a dozen Democrats willing to vote for FISA renewal to make the difference, or would Speaker Johnson have to compromise on something? I'm not thinking of what's the Democratic amendment that would make this pass the House?

F (15:54)

I think you may get 10, he may have to compromise a bit. And there is a lot that Democrats would like him to compromise on. We are still looking at DHS being closed. We're still looking at the issue of ice. I mean, the list goes on and on. But, you know, the reality is, is that Speaker Johnson is a weak speaker and Donald Trump is the actual speaker of the House. That's how this thing has played out for so long. And what is perplexing about the entire FISA debate is these are the same debates we had in 24. They're the same concerns that have been expressed. The White House waited until like March, almost April to try to push this forward. The President, as far as we can tell, has not been pushing for this. He needs to get on the phone and make this happen. Unfortunately, he is the one that can move this House. Mike Johnson can't. And that's been shown repeatedly. It's been when the President got on the phone. The only question mark on that is does the President's low approval ratings and plummeting numbers make these caucus members in the Freedom Caucus and elsewhere feel like, hey, we don't, we don't want to listen to this guy. He doesn't have support either. Then they've got a real problem. But I suspect that it's going to be up to the President and the White House to push this through. But there are, there are Democrats who would support it. Listen, FISA is very important to our security and we are in a time of war.

C (17:22)

Well, just quickly, Rick, in our final minute here, do you think we are approaching the point where the arm twisting, even from President Trump, is no longer as effective?

G (17:30)

Yeah, I think it's a really important point Jeannie makes. The closer we get to the midterms, the uglier the polling data, and it's just getting uglier and uglier whether it's the president's approval approval or Democratic advantage over Republicans and reelection to the Congress, more Republican retirements. As we pointed out, it's going to be every man for himself at some point and it may be that point now. You know, change into the summer is awful hard. You know, everybody who's normal goes on vacation. These members want to have a conversation with their constituents. Whoops, too late. You can't have it at the beach. So I think right now you see the, the characteristics of, of, you know, like every man for himself. You know, do what you can to save yourself and to heck with the caucus.

F (18:13)

Wow.

C (18:14)

All right. Rick Davis and Jeannie Shan Zaina, our political panel and Bloomberg Politics contributors joining us today. On Balance of Power. Thank you both so much.

A (18:24)

Stay with us. On Balance of Power. We'll have much more coming up after this.

E (18:31)

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B (19:02)

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app Listen on Demand wherever you get your podcasts or watch us live on YouTube.

C (19:17)

But it is north to Canada that we go next, although he's joining us from our world headquarters in New York. But the finance minister of Ontario, Peter Bethlehem Falvi is joining us now here on Bloomberg TV and Radio. Minister, welcome back. It's great to have you on Balance of Power. If we could just continue the conversation on the energy shock emanating from the Middle east due to the war between the U.S. israel and Iran. How is Ontario, Canada feeling the ripple effects of that shock already? And how is it affecting your outlook as finance Minister?

H (19:48)

Well, great to be with you again. Great to be here in New York. You're in Washington. Great to see you. You, it has a double edged effect. Clearly you just heard that for Canada we were a big oil producing nation, big agriculture, fertilizer, you know, potash, all those things. Great. But we're feeling it in Ontario at the pumps. That's where we feel it. And it'll flow through to the supply chain if this persists. I think that's, that's an impact. So mixed Emotions about the price of oil right now.

A (20:17)

Interesting. What is the, what is an average gallon of gas for you? Minister? We're at $4.17 today. Does that sound familiar?

H (20:25)

Yeah, it is. I spent two decades of my life here in New York, so very familiar. Not that high. It's a buck 70 a liter. I haven't quite figured out the conversion between liters and gallons, but we're roughly working out here. We're roughly the same and we feel the pinch. At the pumps we cut the gas tax in Ontario where a government that cuts taxes. So four years ago we cut the gas tax. So it's diminishing the impact somewhat over 10 cents a liter, but still. Or the equivalent in, at the pumps in the US in terms of gallons. But it affects, it affects the price of everything. And affordability is an issue.

C (21:02)

Well, just like it is here in the United States. And an issue that of course is, has only sharpened due to the war with Iran which as we were just discussing with Mike has seemingly reordered and perhaps structurally show some global energy markets and energy producers like those in the Gulf states. And of course the energy production we have seen in the Middle east has empowered many of those GCC countries to have massive sovereign wealth funds that they can use to invest in other areas, be it technology or here in the United States or what have you. We learned yesterday, Minister, and you all know this, that Canada is now getting into the sovereign wealth fund game. This was announced by Prime Minister Mark Carney yesterday giving essentially the Canada Strong fund seeded with $18.4 billion from the federal government. What's your reaction? What's your role in this, if any?

H (21:50)

Well, we, we have our own that we launched about four months ago or a couple of months ago. So we're, we're going in the same direction. If you think about what we're doing in Canada right now is major projects, big infrastructure. So that doesn't just mean a pipeline to the west to build more supply to markets in Asia, Southeast Asia, but also pipelines up through the north, through the Arctic and east through Ontario. We import a lot of our oil from the Middle east in eastern Canada and it gets refined in eastern Canada. We'd like to ship American and Canadian oil into those refineries. And of course we were shipping a lot into the U.S. we're a big exporter of oil into the U.S. where you're your, your largest import market for, for energy. So this will help fund those major, major projects. Tens of billions of capital required to do that.

A (22:42)

Interesting looking at the size and scale. For instance, looking at Norway's fund, which is in the area of $2 trillion, you mentioned 18 billion. How much could this grow?

H (22:56)

I think it could grow exponentially. And if you think about Canada, Canada, I mean, what we have up in Canada, your previous guest talked about oil and gas. We got an abundance of that.

A (23:06)

Yeah.

H (23:06)

We also have an abundance of agricultural projects products. He mentioned that as well. But I would add critical minerals, rare earths. We have all the minerals that the world needs for technology. And that's, you know, from a safety supply, security of supply, and we have abundance of those minerals. So all these things I think are going to really add to not only the, the safety and security of the North American continent, I would add, but, but also from an economic prosperity point of view.

C (23:33)

Well, and Minister, you mentioned Ontario's own version of this, the Protect Ontario Account Investment fund. Have you found a private sector asset manager for that yet?

H (23:42)

No, we're in the process of doing that. There are a couple of months into the process, so hopefully conclude that shortly. But what that really is is to we have a lot of, I mean the incredible amount of entrepreneurs in Canada. Canada, we have tremendous support from U.S. investors and investors around the globe. We just want to make sure that Canada, Canadian investors, we have some of the largest pension funds in the world, are based in Toronto and in Canada to, to put more of that capital to work in in the growth areas. We mentioned energy. We're talking oil and gas. But Ontario has a massive footprint of nuclear energy. Over 50% of our province generates the electricity in Ontario. And by the way, I was in midtown yesterday and one company said you're powering our building here from, from Ontario. So we ship electricity out of Ontario. We're also going to be big in defense industry. We're going from 2% of GDP to 5%. And on a Canadian 3 trillion economy, that's another 90 billion Canadian or about 65, 70 billion US per annum. So a lot of growth opportunities. And that's part of our strategy with the, with our version of the Wealth Fund.

A (24:52)

Minister Bethen Falvin, I don't mean to interrupt. When you start increasing defense spending at a time like this in Canada, are you intentionally looking around the world for defense contractors to meet those needs? And by that I mean looking away from US Contractors.

H (25:06)

No, it's not either or it's all of the above. I mean, the US Is our closest friend and ally and economic partner. Yeah, we're going to go through a negotiation on the USMCA deal, deal, deal with the Section 232s. But we're always going to have a very firm, long standing economic relationship with the US and that includes defense. I'm very confident of that. But you know, the President and others have said you got to do more. And Canada is answering that challenge. So we're going to 5%. There'll be a lot of domestic, not just manufacturing, but drones and cyber technology. We've got to protect the north as well the Arctic. So we're doing our share and that's going to be a big growth industry for us in Canada.

C (25:48)

Well, you mentioned the economic relationship between the US And Canada, Minister, which of course has been rocked by President Trump's tariff policies ahead of what could be a renegotiation of the USMCA trade agreement. What, what is your understanding of the status of that right now and what position Canada is bringing in terms of relative strength to those potential renegotiations given everything that has gone on since President Trump came back into office?

H (26:11)

Well, you know, we're not only friends and allies and a long shared history together, but there's economic interests on both sides of the border. We're stronger together. I think we do some three I'll do in Canadian dollars 360 billion of trade a year. So $1 billion a day, 1.8 million Americans wake up every day to work on something that gets shipped to Ontario. And I think we're the number one or two, I think 26 states are where the number one or two trading partner and if we were a country we'd be in Ontario, the 20th largest. So there's economic interest on both sides of the border. You know, we have a lot of natural resources up in Canada that the US we trade with and obviously the US has a lot of attributes too for us to be able to sell into. So there's a lot of mutual commercial interest to I think get a deal done and we'll, we'll work it, work it out with our, with our neighbors.

A (27:06)

Mark Carney has said that Canada will not rush a tariff deal with the US and our remaining moment Minister, do you approve of that approach?

H (27:15)

Yeah, I think we want to get a deal that's good for both sides and I think that there is a deal but through any negotiations there's pre positioning and what have you. I'll be in Washington tomorrow meeting a number of people, people from Congress, the dialogue, the two way flow of information is essential. So I look, I'm an optimist and I think just by force of geography and nature, culture, language, all those things. We're going to we're going to get through this together.

A (27:41)

Well, we wish you luck on your travels and your meetings with Congress. He is Minister of Finance from Ontario, with us from World Headquarters in New York. Peter Beth and Faulty with the thank you so much for the conversation. 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

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