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- [00:00]
Podcast Host/Announcer
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- [00:57]
Tyler Kendall
Tyler Kendall here in Washington alongside Jo Matthew. And we have one eye today focused on China after President Trump just moments ago in the Cabinet Room was speaking with the Australian prime Minister about shoring up ties to compete with China when it comes to rare earths. And rare earths have really taken center stage in the negotiations with China as both sides are appearing to re engage ahead of this Nov. 10 deadline for the tariff truce. We heard from President Trump outlining some of his key demands he wants to see from Beijing as he heads into this highly anticipated meeting with the Chinese president next week.
- [01:32]
President Donald Trump
If they don't do business with us, I think China's in big trouble. I'll be honest with you, I think China is. I don't know that they even make it. I really do. I believe that they're in big trouble and I don't want them to be in big trouble. I want them to do great. I want them to thrive. But we have to thrive together. It's a two way street. I think when we finish our meetings and it's going to be a big deal, I'm meeting with a lot of other countries, but this seems to be the one that people are very interested in. I think when we finish our meetings in South Korea, China and I will have a really fair and really great trade deal together.
- [02:08]
Joe Matthew
All right, from the Cabinet Room a little while ago, he's got the Australian prime minister in the House today and they're going to do a working lunch. Having spent some time taking questions from reporters a little bit earlier. With us now in Washington, having listened to that conversation, is Wendy Benjamin Son back with us for the first time in a minute. Bloomberg Senior Editor. It's great to see you, Wendy. As we see Another world leader come through the revolving door, as Marjorie Taylor Greene puts it. It is pretty remarkable here. We're going to Talk to Bob McNally in a moment about the of oil, which is precipitously lower to the point where the White House is kicking out news releases today talking about $2.99 gas. Yeah, that's the most domestically focused message that's coming out of a geopolitically focused White House here. The president's been kind of all over the place in the middle of a government shutdown. What do you make of that?
- [02:56]
Wendy Benjaminson
Well, it's an interesting dynamic. I think he feels much more comfortable in that space than he did in his first term. Yeah, I think he's, he may be frustrated. Well, he may have just decided the shutdown. You know, he believes his own talking points. Right. That the shutdown is indeed the work of the Democrats, whether it is or not. And therefore he'll just let them do their thing while he goes off and, you know, does has all of these various projects around the world. I wonder when at some point his political base doesn't say what happened to America First. His argument is, one, America first is, quote, whatever I say it is, as he said a few months ago, and two, he, he keeps saying that there will be a benefit to the US Consumers and things like that from all of these tariffs. We haven't quite seen that yet, but we'll see what we'll see if that ever materializes.
- [03:45]
Tyler Kendall
Wendy, when we're looking holistically at where these negotiations with China stand now, we know that we're up against this deadline, perhaps November 1st. Now President Trump threatening maybe up to 155% tariff that comes against November 10th, which is the deadline for that broader trade truce. We know the secret. The treasury secretary is meeting in Malaysia this week with his trade counterpart. What sort of details do you think we're going to be able to glean from that as we set up to this highly anticipated meeting with President Trump the next week with his counterpart?
- [04:18]
Wendy Benjaminson
Right. Well, we know from what he said on the plane last night that he is interested in the soybeans in, in getting China to once again buy American soybeans and getting China to loosen its unprecedented hold on rare earth minerals and, you know, some other, some other trade deals that, that he wants to get done. I think he's may have seen that threatening these massive, I mean, 155% tariff on these countries, especially China, seems to result in, you know, China retaliating and then one of them backs down and it's this whole dance. I don't know whether, you know, what will come of this meeting whenever it happens. And Trump's deadlines are always a little fungible. One of the things that struck me was that he was asked today in the Cabinet Room about some report that he may or may, he may see to not recognize Taiwan. And he quickly said, well, I don't want to talk about that. It would be, it seems, news if Taiwan is also on the table in the middle of a trade negotiation, be.
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Joe Matthew
A pretty big deal. The apple of Xi's eye, I think, is how he put it, which she frequently describes Ukraine as being the apple of Putin's eye. We haven't even talked about Ukraine. There was actually a lot happening over the weekend, including the no Kings rally. The president was posting a lot of stuff on social media, including a video in which an AI video, he was wearing a crown, I guess, embracing this idea. Yeah, there were a couple of, he's dumping manure on the protesters and so forth. Where's the president's head? Before we go to Bob McNally on the oil scene, where's the president's head on the shutdown here? Because he's taken a number of moves to kind of remove the pain points.
- [06:03]
Wendy Benjaminson
Right.
- [06:03]
Joe Matthew
And he's not talking about it a heck of a lot. Is he concerned with the outcome here, or is this a moment where he can seize opportunity?
- [06:10]
Wendy Benjaminson
I wonder if the fact that he's not talking about it much signals that they do know that there is a very, very big risk, a very big chance that Republicans will take the blame for this. The Democrats are, for the first time in this shutdown or the first time, are using the shutdown to stand up to Trump. There were 7 million people protesting. And Trump did, when he was asked about it last night, he was just like, those aren't, those aren't representative of Americans. I don't know how they couldn't be. And Mike Johnson kept talking about the communists and the socialists and the Marxists who were there instead of acknowledging that these were frustrated Americans. And even some of his own people, like Joe Rogan, has started complaining about some of his, the immigration regime. And so I think maybe he's starting to feel a little uncomfortable on the domestic front, and that's why he's focusing so much on the, on the foreign affairs front.
- [07:02]
Tyler Kendall
All right, Wendy Benjaminson, senior editor at Bloomberg, thank you so much, as always. And now, as Wendy mentioned, there's domestic issues, but we also have our eyes towards foreign policy. And when we often talk about China. We're talking about national security, but also energy security. And we wanted to take a look today at the oil market, WTI currently hovering around $57 a barrel. And as Joe had mentioned, the White House just moments before we came to air, kicking out this statement touting that gas prices are reaching new lows due to the, quote, relentless, relentless commitment to American energy production, according to the statement from the White House. But while production is rising, including here in the US Demand growth seems to be slowing. And to get into all of that, we're lucky to say we're joined now by Bob McNally, founder and president of the Rapian Energy Group and former special assistant and Senior Director for International energy on the National Security Council under President George W. Bush. Bob, thanks so much for being here. And we're lucky to have your expertise on a day like today because there have been these long held predictions that the surging production is going to push the market into a surplus. From your view, where are we at right now? Are we at some sort of tipping point?
- [08:17]
Bob McNally
Great to be with you, Kelly. We are. You know, we're like a bunch of folks at the beach who've been hearing on the radio that a tsunami is coming, but kind of questioning if it's coming or not. Now Rapidan is predicting or forecasting, to extend the analogy, a tsunami for quite a while. And, and we're starting to see it on the horizon. And, but it's a good news story for consumers, whereas a tsunami is a bad news story for bathers. Right. We're about to cross through $3 a gallon. And by some metrics we already have according to GasBuddy. And you know, if you think about it, President Trump Never was above $3 a gallon in his first term. We got close. So he enjoyed a $2 pump price in his term. And the White House is just overjoyed because, you know, whether they deserve it or not, a sitting president gets the blame when gasoline prices get up, go up, and it gets the, the, the joy and the congratulations and the benefit when they go down. And barring a geopolitical disruption, the way my colleagues and I at Rapidan look at the markets, we think gasoline prices are more likely headed down further into that two dollar range on a national average.
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Joe Matthew
Wow, that's something. Bob, it's good to have you back and I appreciate it. I'm looking at your note to clients predicting daily prints in the 40s by early next year when it comes to crude oil. You just mentioned where we're going in Terms of gasoline. You know, as Tyler mentioned a moment ago, we're looking at increased production levels. But this isn't because of drill, baby, drill. Right. This is because of many other outside factors.
- [09:52]
Bob McNally
You know, you're right. We are quite bearish in the near term. But I want to hasten to mention, Joe, what we're telling clients is brace for the great crude steepener, like a steepening yield curve. Near term, we've got supply growth running three times faster than demand growth. And that's only partly a US Story, as you said. That's an Argentina story. That's a Brazil story. Brazil adding almost as much as the United States, Guyana. But near term, we have a glut. But, and I hasten to say, but in the medium term, this market is going to tighten it up. So we're telling clients, prepare for this. Consumers enjoy it. We're going to go down, but then in the coming years, we're going to go much higher. We think we're going to go into a tightening market. But politics always about what's tomorrow. And tomorrow is likely to see a deluge of oil. And we have to ask ourselves, Joe, what stops crude oil prices falling in the 40s? And we think either OPEC has to step up and cut production, they've been raising it, or President Trump has to follow through. And he may feel he has the ability to do that by restricting Russian or Iranian oil exports with tough sanctions instead of weak sanctions. And Joe, if neither OPEC nor President Trump and sanctions remove a lot of oil next year, it's the US Sales sector that's going to take it on the chin and we'll have an echo of 2020 when the price will fall further to shut in shale wells. And that will not be a happy story. President Trump did not enjoy 2020. Gasoline was at 170 a gallon. The president was not happy, though, because we were shutting down US production. Well over 2 million barrels a day shut down in a few months.
- [11:27]
Courtney McBride
Wow.
- [11:28]
Tyler Kendall
Well, Bob, let's build on one of the geopolitical risks that you just mentioned, which is, of course, Russia. How are you watching this as you hear President Trump say that he's expecting to have potentially this meeting with Vladimir Putin, Zelensky saying that he also wants to come to the table. How is the calculus changing here day by day as we await for any sort of developments towards a cease fire there?
- [11:51]
Bob McNally
Yeah, you know, we've learned with President Trump, he has an MO with these negotiations and you have to take them pretty seriously. Consider Iran just as a Template for what we're about to see with Russia. I think he could have signed a deal with Tehran, he could have lifted sanctions, he could have opened an embassy had they agreed to a deal. But instead he became the president who ordered an aerial attack on the Fordo facility. I don't think any of his predecessors would either have done a deal or ordered an attack. He can go either way with Russia. It's the same way, I think if President Putin doesn't agree to a cease fire here and President Trump's going to go the last mile and then a few hundred yards after the last mile for diplomacy, he really doesn't want to drop the bomb here, if you will. Figuratively now speaking now, if they don't get to a deal in the coming weeks, I think the President is ready. This White House is ready, along with the Europeans, to impose tough sanctions on Russian oil to do what they were unwilling to do in 2022, which is actually cut into Russian production and risk higher oil prices. Again, going back to the glut we were just talking about, if the president sees in the White House, sees this glut develop, he'll be more willing to really crack down on India, Turkey, even China, and shut in Russian production, more willing than his Predecessor was in 2022. So he can go either way, either a deal with Putin or I think very tough sanctions here down the road.
- [13:12]
Joe Matthew
Well, as you predict an oil tsunami, Bob McNally, I wonder what that means for refilling the SPR. Should we not be bidding right now on 50 something dollar a barrel? Or to your point, eventually 40 something dollar a barrel oil?
- [13:28]
Bob McNally
Absolutely, Joe, and it's just a shame. And I think there is bipartisan consensus even we should be doing that. The problem is the money. When I was working for President Bush, we had authority to do what we call a royalty in kind program. Didn't have to ask Congress. We just said to those oil companies producing oil in federal waters, hey, pay us in oil instead of cash. And we filled it for the only time to the top. But Congress took that authority away. So I think one thing Congress should be working on with the President is either get that authority back so we can start taking those royalties in oil and fill it up that way, or even better, appropriate the money. We can't even open the government, as you've been talking about all day, but if we open the government, it'd be great if we could pony up some money and refill the spr. Absolutely.
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Wendy Benjaminson
Bob.
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Tyler Kendall
In the final minute that we have with you, we had reporting out from Bloomberg News this weekend that India is actually making progress when it comes to a trade deal with the U.S. we've heard President Trump suggest that India could abandon its imports of Russian energy supplies. Of course, 25% of the tariff currently in place against the country has to deal with its imports of Russian energy supplies, this so called secondary tariff. But in your view, how realistic is this? Is India going to move away?
- [14:42]
Bob McNally
I think they will. You know, India took no Russian oil, remember before President Putin invaded Ukraine and now has become the biggest customer. And of course India has been having a wonderful time enjoying cheap discounted Russian oil. Who wouldn't, who wouldn't enjoy a 15% discount on pump prices if you can get it over your neighbors? However, if forced to choose between enjoying this discounted Russian oil supply on the one hand or having economic relations and trade and so forth, much less stable political relationships with not only the US but the eu. The EU has some tough sanctions coming in on India in January. I think India will side with maybe letting go of that enjoyable discount and preventing a sort of worse and more costly trade measures on the other side. It's a cost benefit and I think they'll quietly, they won't enjoy it, they won't say it publicly, but quietly, I think they'll move away from Russia.
- [15:37]
Joe Matthew
Well, you're the first call we'll make when that happens. Bob, it's great to talk to you and we appreciate your analysis as always. Bob McNally, founder, president, Rapidan Energy Group In a conversation you'll only hear right here on Balance of Power alongside Tyler Kendall, I'm Joe. Matthew will assemble our panel next after the no Kings rallies last week, and it's straight ahead on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this. Your next product launch is coming fast. Don't let billing slow you down. Legacy systems can't handle usage based billing. That means your team is stuck gluing code together, piecing through spreadsheets and running ad hoc queries just to figure out what to bill. With Metronome, you can roll out new pricing in minutes instead of months, whether it's usage based, seat based, or a hybrid model. Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products. That's metronome.com you're listening to the Bloomberg.
- [16:36]
Podcast Host/Announcer
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 say Alexa, play.
- [16:51]
Tyler Kendall
Bloomberg 11:30 Washington was at least one one of the sites this weekend that saw these no king protests across the U.S. demonstrators and organizers saying that 2,600 protests happened across the country protesting President Trump and his agenda. Now, President Trump was asked about these protests last night on Air Force One and here's how he characterized them.
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President Donald Trump
I think it's a joke. I looked at the people, they're not representative of this country. And I looked at all the brand new signs. Paid for. I guess it was paid for by Soros and other radical left lunatics. It looks like it was. We're checking it out. The demonstrations were very small, very ineffective, and the people were whacked out. When you look at those people, those are not representative of the people of our country. I'm not a king. I work my off to make our country great. That's all it is. I'm not a king at all.
- [17:45]
Joe Matthew
Another day in which we're bleeping the president referring to some of the costumes there. Presumably as he was making the point there, he said, I guess it was paid for by Soros. Very ineffective people were whacked out. Which brings us to the headline in the Washington Post why protesters against Trump are wearing frog, chicken and T Rex costumes. Yeah, they were having some fun out there over the weekend. We saw pandas, hot dogs, Santa Clauses and indeed T Rex dinosaurs. Now, no Kings, the group that put this all together, and I don't know if it had anything to do with George Soros, says nearly 7 million people turned out for these monster rallies. And you saw the images of them as Tyler was just talking. If you're with us on Bloomberg TV or on YouTube, Seas of Humanity in different cities around the country. So we thought we'd see what the panel thought about this, considering the obsession that Washington has with crowd sizes. Bloomberg Politics contributors Rick Davis and Jeannie Shan Zaino are here. Jeannie is our Democratic Analyst and democracy visiting fellow at Harvard Kennedy School School's Ash Center. Rick is our Republican strategist and partner at Stone Court Capital. Rick, I can't really imagine you in the T Rex or the, or the panda costume at a rally like this. But what are we supposed to make of the, what is the impact politically of crowds of this size gathering on a weekend in October?
- [19:08]
Rick Davis
Well, Joe, you know, it is Halloween season, so no telling what Rick is going to show up like on the 31st of this month. But, but you're right, I Mean, it's, it looked more like a Comic Con convention as it did to a government protest. And I think that's great. I was actually very impressed with the fact that there wasn't really any violence. There wasn't a lot of troublemaking. I guess Antifa didn't show up for this parade. And, and so I think that's a real tribute to America. I mean, like, nobody likes a good protest more than Americans. We found our nation over protesting. And I think that it's, it's a really good thing that people look like they were enjoying themselves and, and gathered in large numbers, because at the end of the day, you know, it's a form of political participation. And regardless of how you feel about Republicans, Democrats, Independents, or vegetarians, you want to show up and participate. I think that's what they did this weekend.
- [20:07]
Tyler Kendall
Well, Jeannie Axios is reporting on some of the preliminary data collected by American University researchers that track protest movements. It found nearly 90% of the participants this weekend identified with the political left. Jeannie, how effective is this for actual change when it comes to the policies that these protesters are protesting?
- [20:28]
Jeannie Shanzano
Yeah, Tyler, you notice that Rick did not deny he wasn't under one of those costumes like the chicken or the panda. So you may just see him when he comes in for the show on the 31st in one of those. Yeah, I mean, not surprisingly, we are talking, I think the number was about 7 million, which is up 2 million from the summer protest, the no Kings protest, which was the third largest in American history. And what does the data show us? 3.5% of a population is enough to diminish an autocratic government. That's the rule of thumb. We're not quite there yet, but 7 million is a little over 2.2percent of the American population. It certainly has, you know, vast numbers up from the left, but the question is, does that start to bleed into the moderates and even some people on the right in terms of how they vote? And we're going to have a go at this in just a few weeks when we see these big elections in New Jersey, Virginia, and of course, New York City. So I think we have to wait to see what the ballot impact is. But no doubt these are huge numbers of turnouts and as you mentioned, Tyler, 2600 locations around the country. That's pretty impressive for this group.
- [21:46]
Joe Matthew
And so what do we make of the President's reaction, Rick? I guess it's somewhat predictable. He called it a joke, as you just heard. I looked at the paper. He said they're not representative of this country. But of course, the numbers are pretty remarkable here. Not just the number of people, but the number of different events as Jeannie and Tyler have qualified. You saw what he put on social media, the no Kings rally. He's in this AI video wearing a crown, flying a fighter jet that's literally bombing the crowd with manure. He's dumping poop on American cities. Rick Davis, what do we think about the Commander in Chief in a look like that?
- [22:28]
Rick Davis
Well, every time I think I've seen a new low coming out of the White House, yeah. I lose my breath at the next version of that. This was, this was pretty comical in the sense that, you know, he's obviously not taking any of this very seriously. But, but to disparage people like this reminds me of Hillary Clinton calling his supporters deplorables. And that got them all rallied up, probably helped, you know, defeat her as a result of it. And to see him doing that in the speaker on shows this Sunday, calling them all communists and socialists and Marxists. I mean, like, when you paint with a brush in American politics that wide, you're going to hit a lot of people who otherwise would have thought of voting for you or your causes. And this is not a good way to build a coalition for the future.
- [23:17]
Tyler Kendall
Well, Jeannie, let's get your reaction to the White House's response here, but also talk about some tangible policy, because as President Trump was alleging that these protests are ineffective. He was also talking about the government shutdown in his remarks over the weekend, blaming Democrats again. How are we seeing these two things collide this weekend as the government is now officially the longest government shutdown, the third longest government shutdown in U.S. history.
- [23:45]
Jeannie Shanzano
Yeah. And many people are predicting, as you know, Tyler, that it could be the longest, given where the President is headed in the next few weeks overseas and the need for him to step into this if we're going to see an end to it. You know, I think for the Democrats, the warning here is, is that, yes, you can get out large numbers of people against Donald Trump. No question there. The problem for Democrats is going to be articulating just what you mentioned, Tyler, what you are for from a policy perspective, I think they've done that better than I expected in terms of the shutdown on health care. Whether that resonates in the end is another question. But they're going to have to have a message, and I believe that message should be cost of living. I'm in New York. As you know, we have the New York City Merrill race coming up. And one of the reasons or on Mandani his resonated here is because he's talking about people's lives, the amount it costs to buy groceries, the amount it costs to rent an apartment, how difficult it is for people to make ends meet and how concerned they are. That's what I think the Democrats need to articulate. And these so far protests have been great at getting large numbers out, but they've been more anti Trump than pro something. And that's what I think the Democrats are going to need to work on if they're going to resonate at the polls.
- [25:06]
Bob McNally
Interesting.
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Joe Matthew
There's a new bill to pay federal workers who have been furloughed along with members of the military. Once this pay cycle is exhausted, they're going to have to fund military as well again. And it looks, Rick, like this is going to happen Wednesday or Thursday in the Senate. But interestingly, no one seems to think it's going to pass. A few Democratic senators, much like we saw with the continuing resolution, will probably get on board. But wouldn't that be a good look for Democrats to vote to pay the workers?
- [25:38]
Rick Davis
Yeah, there's a precedent to this, too. You know, we've had partial government shutdowns in the past that have gone a long time and don't wreck havoc in the lives of government workers like the military and other essential personnel. So I think it's a risky strategy for Democrats to all of a sudden play hardball with the lives of these employees. They can't sustain long terms of being out like the senators and the congressmen and frankly the White House staff who are getting paid every day. And so I think you've got to have some sensibilities around that. So I do think this should go through pretty easily. I think most of these Democrats, especially moderates like John Ossoff in Georgia, he's running for reelection. There's a huge amount of military in his state that vote in his state. And you think they're going to want to vote for a guy who wouldn't pay him for the work they're doing. I mean, that's a, that's a hard sell against a guy like John Ostroff. So my guess is you're going to see some moderate Democrats, especially who have iffy reelections, you know, sort of march to the drum of getting these people paid in a, in a partial shutdown.
- [26:49]
Tyler Kendall
Well, Jeannie, what's your assessment? Should Democrats get on board with this bill that would pay these essential workers? And who are you watching? The same sort of names that Rick's laying out here.
- [26:59]
Jeannie Shanzano
Yeah, absolutely. OSSIP is a great example and I think Democrats should vote for it. I've been against this shutdown from the beginning, but I think they should vote for it. I also think this would be more effective on the Republicans part if the president was spending less time overseas and with foreign leaders and more time focusing on reopening this government and the concerns of Americans. So I think it's effective, but I don't think it's effective enough when he's got this revolving door, as Marjorie Taylor Greene says of foreign leaders and far less focus on what's going on with Americans.
- [27:32]
Tyler Kendall
All right, our political panel today, Rick Davis and Jeannie Shanzano, both Bloomberg Politics contributors. Thank you both, as always. And Joe, it feels like we're ramping up here. Some of the pressure has been taken down, but of course, we're marching on to November 1st, the open enrollment start date.
- [27:48]
Joe Matthew
Open enrollment, November 1st. Something else that happens on that date as well is the expiration of SNAP benefits. So you're going to start hearing a lot more talk about the 1st of November as the next inflection point on the calendar. And let's remember the president did unlock funds to pay active duty military, but that was only one pay cycle, $8 billion. Another week we're going to be having that conversation all over again. If this bill that we were just discussing does not pass with the military in mind, we're going to turn our attention to the war in Ukraine. Coming up, some really important developments over the weekend that probably are not making President Zelinsky feel very good with a turnabout again by President Trump. We'll get into it with Melinda Herring from the Atlantic Council. That's straight ahead here on Balance of Power on Bloomberg TV and Radio. Stay with us on Balance of Power. We'll have much more coming up after this. Your next product launch is coming fast. Don't let billing slow you down. Legacy systems can't handle usage based billing. That means your team is stuck gluing code together, piecing through spreadsheets and running ad hoc queries just to figure out what to bill. With Metronome, you can roll out new pricing in minutes instead of months, whether it's usage based, seat based or a hybrid model. Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products. That's metronome.com you're listening to the Bloomberg.
- [29:11]
Podcast Host/Announcer
Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Aut with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.
- [29:28]
Tyler Kendall
Foreign policy has really taken center stage in recent days. Today, President Trump welcoming the Australian prime minister to the White House after Friday's meeting with the Ukrainian President Vladimir Zelinsky. President Trump was asked about the state of negotiations and the war earlier today in the Cabinet Room and had this to say about those talks.
- [29:48]
President Donald Trump
Most of the people dying are soldiers, the soldiers that are dying in Russia and Ukraine. It's unbelievable. Five to seven thousand a week. Can you believe it? And I look at that and I say it's pretty amazing. But in addition to that, there are attacks on Kiev and some of the other places. And it's, it's human lives. But the big number of human lives are soldiers that are being killed in the battlefield.
- [30:12]
Tyler Kendall
For the latest, we're joined now by Courtney McBride, Bloomberg National Security Report. So, Courtney, can you just give us an update? We had Zelensky here in Washington on Friday. You're hearing President Trump talking about this ongoing in the fighting. Where do talks actually stand right now?
- [30:28]
Jeannie Shanzano
Sure.
- [30:29]
Courtney McBride
Well, you know, as you said, President Zelensky was here. President Trump has said that he plans to meet with Russian President Vladimir Putin sometime in the coming weeks. President Zelensky has said that he would be open to attending or to engaging in some sort of shuttle diplomacy if that happens. Secretary of State Marco Rubio spoke with his Russian counterpart today and according to the State Department, sort of emphasized the opportunity that these upcoming talks present. In the meantime, you know, US Allies in Europe are really trying to do their best to shore up Ukraine's position and to bring Putin to the table. But a lot remains to be seen. You know, the President Trump did not commit the sort of military support that President Zelensky seemed to be seeking in terms of Tomahawk missiles, you know, to try to really improve Ukraine's battlefield position and perhaps exert some really meaningful pressure on Putin.
- [31:26]
Joe Matthew
Jim Gilmore, we're getting a sense this was not a good meeting for President Zelensky. When you read the write up in the Financial Times, for instance, it wasn't only he didn't get the Tomahawks and we saw, I won't say a remorseful Zelensky, but a pretty low key Zelinsky coming off that meeting in the news conference that he held in Lafayette park. The FT says this devolved into a shouting match are the words that they use. Trump Quote, cursing all the time, unquote, echoing Putin's talking points and even suggesting that Zelensky hand over the entire Donbas as Ukraine lost America again.
- [31:59]
Courtney McBride
Well, I think it's, I mean, it's early to make any sort of, you know, dramatic pronouncements like that, but certainly the meeting didn't yield, you know, the sorts of gains either, you know, in terms of weapons or commitments that Zelenskyy was hoping for. But, you know, I think we've seen a lot of back and forth in terms of the US President's position. He's made very clear that he wants the parties to come to the table. You know, maybe that means offering some carrots to Putin to convince him to do so. But it's really unclear exactly where things stand.
- [32:38]
Tyler Kendall
Well, if we stick on this idea of military assistance, particularly these Patriot missile batteries, we had reporting that Ukraine was actually preparing a contract for 25 of these air defense systems which the country would receive over the years, it appears that the US And Ukraine might be pretty far apart when it comes to this issue. What has been the White House's reasoning? What have we heard from President Trump when it comes to really the state of the talks between these two countries?
- [33:05]
Courtney McBride
Well, President Trump has been pretty clear that Ukraine can have as many weapons as it needs if someone is purchasing those weapons, but that the American taxpayer is not going to fund those. And so the potential contract that you're referring to presumably would be to purchase those systems. But as you said, I mean, that takes the approvals and then the negotiations and delivery take years for any of those systems. So that could be a long term prospect. But in the interim, the EU is really trying to increase the ability to fund weapons for Ukraine potentially by using Russian assets that are held in European banks. The US has been pushing back against that effort, according to some of our reporting.
- [33:56]
Joe Matthew
Courtney, thank you as always. Courtney McBride from our national security team here in Washington, D.C. as we keep the beat on this, we want to add the voice of an expert in Melinda Herring, who's going to be with us in just a moment. Back from the Atlantic Council with a sense of disappointment for those who have been in Ukraine, Ukraine's corner here. And I'll point back to the president's truth Social post following the meeting on Friday where he says the meeting with Zelensky of Ukraine was very interesting and cordial. But I told him, as I likewise strongly suggested to President Putin, that it's time to stop the killing and make a deal. We read this together when it was Released, he says they should stop where they are. Property lines being defined by war and guts. Let both claim victory, let history decide. The President was asked on Air Force One over the weekend about this idea of essentially freezing the lines in place and going even further to essentially donate the Donbas to Vladimir Putin. Here's what he said during that meeting. Did you tell him he needed to cede all of the Donbass region to Russia?
- [34:57]
President Donald Trump
No, we never discussed it. We think that what they should do is just stop at the lines where they are, the battle lines. You have a battle line right now. The rest is very tough to negotiate. If you're going to say, you take this, we take that. You know, there's so many different permutations. So what I say is they should stop right now at the battle lines, go home, stop killing people and be done.
- [35:18]
Joe Matthew
Stop right now at the battle lines. Now, of course, if that were the definition of a ceasefire, that might be something that President Zelensky would be in favor of, stopping the guns so negotiations can begin. But that may not be what the President is proposing here. It's a bit difficult to tell. And at this confusing stage of the conversation, we're glad to have Melinda Herring back with us, non resident senior fellow at the Atlantic Council's Eurasia Center. I don't know how long it's been since you were in Kiev, but every time I see you, you just come back or you're about to go and it's great to see you, Melinda. I can't imagine your thoughts when you read this, when you heard the tone from President Zelensky and now this morning, to read in the FT that it was a shouting match, in fact, that took place. Are we all the way back to where we were following the first Oval meeting?
- [36:03]
Podcast Host/Announcer
It's deja vu again, Joe. It does feel like February. But look, Trump is a yo yo. So I know that the, the actual, you know, it doesn't feel so good right now, but I would say don't overreact. I think things are going to pull back. I think Trump will pull back from where he is now. So Trump is, has said, why doesn't Ukraine give up the Donbas in exchange for a little sliver of two very important pieces in southern Ukraine? It is a terrible deal. Ukraine will not take it. It is a non starter. And I'd like to ask Donald Trump, what about the security guarantees? Where is the ceasefire and where are the security guarantees? Why on earth would Ukraine take this deal when there's no that there's no guarantee that Russia won't strike again.
- [36:42]
Tyler Kendall
Can you actually give us a little bit more context here when you hear the president say that we should stop right now at the battle line. What are these regions? Why are they so imperative to, to Russia's ambitions here? Just give us a little bit of why this has really been long a flashpoint in this conversation.
- [37:00]
Podcast Host/Announcer
Sure. It's great to be with you, Tyler. So look, there's. Ukraine is a huge country and Russia occupies about 18% of it right now. You remember back in 2014, the boot of Ukraine, Crimea was ill, legally annexed by the Russians and there was a fake referendum. So that's one piece of the story that goes back to 2014. But the Russians also tried to take the Donbas. And this is two different provinces in Eastern Ukraine. It's Luhansk and Donetsk Oblast. And they didn't manage to take very much of those provinces. Fast forward to February of 22, and the Russians surrounded Ukraine by three sides and they tried to take and dismember the country. Remember, they came in from the north, from Belarus and they tried to whack Zelensky in three days and they failed. They were repelled. But a lot has happened since then. But this area out in the east is important because they've been fighting about it for a long time. But just to summarize it in a sentence, Ukraine is not, I'm sorry, Russia is not an empire without Ukraine. So that's why it's so important and that's why Russia can't let Ukraine go.
- [38:02]
Joe Matthew
The president was asked in the White House a short time ago by a reporter about. It was only, what, just a couple, a couple of weeks ago. He said that Ukraine was capable of winning back all of the land that Russia had occupied. He's singing a pretty different tune now and was asked about that change in rhetoric and he said they could win the war. He still in fact believes that. I just don't think they will. What did Vladimir Putin tell him in this phone call last week?
- [38:29]
Podcast Host/Announcer
I'm dying to know, Joe. I have no idea and I think everyone is dying to know. So. So look, this is typical behavior. Let's take a broader perspective every time the US Decides to be more firm. So it wasn't that long ago, two days, three days, that Trump was talking about giving the Ukrainians tomahawks. This is up to 1,000 miles in range. Right. This is a game changer. The war is over if Ukraine has enough long range fires. I've talked to a lot of generals and brigade commanders in Ukraine, Joe. And they tell me if we have 2,000 long range fires, they don't have to be Tomahawks, but they have to have long range.
- [39:03]
Joe Matthew
Moscow?
- [39:03]
Wendy Benjaminson
Yeah.
- [39:03]
Podcast Host/Announcer
To be able to hit behind enemy lines, command and control centers and ammo depots, it's over. That's why this was such a big deal and Moscow overreacted. So what does Vladimir Putin do? He gets on the phone with Trump and he. Sweets talks him. I don't know what he offered him. But we do know one thing about Donald Trump. He's vain and he really wants a Nobel Peace Prize and he has. How many wars has he solved now?
- [39:26]
Joe Matthew
8.
- [39:27]
Podcast Host/Announcer
9. I think he's claiming 9. So he knows that he's not going to get it until he can bring peace to Ukraine. So he's frustrated and he's emotional and he thinks that, that if he lashes out, he may get. He may cause the Ukrainians to capitulate. Ain't going to happen.
- [39:40]
Tyler Kendall
Well, keeping with this phone call that President Trump had with Vladimir Putin, the President came out of it saying that there potentially could be a face to face meeting in Hungary. We then had a headline on the Bloomberg terminal saying that Zelensky, despite his reservations about the venue, would like to be part of that conversation. Can you just talk a little bit about the geopolitical forces here if such a conversation was going to happen in Hungary?
- [40:04]
Podcast Host/Announcer
So to my knowledge, Putin hasn't agreed yet, has he?
- [40:07]
Joe Matthew
That there's nothing formal that we're aware of. Only from the truth do we know this.
- [40:10]
Podcast Host/Announcer
So this is sort of the shocking part is that Trump has made such an about face on the promise that Putin might appear in Budapest and there's no commitment from the Kremlin. So I think Washington really gave a lot away on Friday for no good reason. But the geopolitics. I mean, look, Putin is delighted. They are mixing martinis. I was just looking at the Russian newspaper coverage. They're mixing martinis in Moscow tonight. They are so delighted. They think that the European Union is full of hypocrites and they think they punched Zelensky in the stomach. That's one of the titles that I saw. So they are very, very happy with the outcome. And Hungary is not a place that's hospitable to the west, to Ukraine, to Western values. Remember, this is the home of Viktor Orban and he's tight with Putin and also Trump.
- [40:59]
Joe Matthew
So what would be the optics of a meeting like that? To think that Zelensky would show up? We just saw what took place in Alaska. Now we're going to have Viktor Orban essentially controlling the optics around a meeting between these two presidents with no preconditions. Is that the assumption?
- [41:14]
Podcast Host/Announcer
I don't think it's going to happen, Joe.
- [41:15]
Joe Matthew
You don't think the meeting takes place?
- [41:17]
Podcast Host/Announcer
I don't think it's going to happen. Look, let's ignore the hysterics for a minute. The war is going to continue till at least next spring or summer. The Russians are going to continue at the same pace, the same intensity of the war right now until about Christmas. Something happens in Christmas. The leaves start to fall off trees, which means the Russians won't have as much air cover. So same intensity till Christmas. Then it will diminish a little bit. And then as, as spring changes, there'll be another big push from the Russians. And the Russians are going to see what they can get and they're going to see what kind of mood Donald Trump is in. And what does this mean? This means that human beings in Ukraine, children, women, elderly people are going to suffer and the winter is going to be very hard. We see the Russians hitting the grid right now. I saw pictures of Kyiv, a city of 4 million people in pitch blackness. We're going to see more and more of this. And unfortunately, the US Government doesn't have anyone who's paying attention to the energy picture.
- [42:07]
Joe Matthew
Going to be a cold winter, Tyler.
- [42:09]
Tyler Kendall
A lot to follow here, of course. Melinda Herring, non resident Senior Fellow at the Atlantic Council's Eurasia Center. Thank you so much.
- [42:16]
Joe Matthew
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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