Trump Says Iran Violated Ceasefire With Hormuz Drone Attack

Summary

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Balance of Power — Episode Summary

Podcast: Bloomberg Balance of Power
Date: June 26, 2026
Host(s): Joe Weisenthal (filling in), with Kailey Leinz
Notable Guests:

• Tyler Kendall (Bloomberg Washington Correspondent)
• Congresswoman Madeline Dean (D-PA)
• Rick Davis (Republican Strategist)
• Jeannie Shann Zaino (Democratic Analyst)
• Retired Rear Admiral Mark Montgomery

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Overview

This episode centers on escalating tensions in the Strait of Hormuz following President Trump’s accusation that Iran violated a ceasefire by attacking a cargo ship with drones, raising questions about stability, oil markets, diplomacy, and US military presence in the Gulf. The conversation also covers Trump’s tariff threats against European digital taxes, friction in congressional appropriations, and an unexpected dive into contemporary political parallels with the Watergate scandal.

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Key Discussion Points & Insights

1. Strait of Hormuz Tensions & Iran's Drone Attack

Timestamps: [00:40]–[06:48], [16:02]–[35:31]

• Incident Summary:
  President Trump accused Iran of a “foolish violation” of a recently brokered ceasefire after Iran launched four one-way drones at ships. Three drones were intercepted by the US; a fourth hit a cargo vessel without disabling it.

• Market Response:
  Despite the incident, oil prices fell, with WTI at $69/barrel, puzzling many.

  "The oil prices are dropping like a rock. And you know, as goes oil, so goes everything else." — President Trump, paraphrased at [01:56], [29:14].

• Shipping & Fees:
  Uncertainty reigns over possible Iranian/Omani fees for transiting the strait. Bloomberg reports Oman indicating a new reality—fees could be coming, with Iran potentially envisioning $40 billion in annual revenue and pitching the idea to other regional players and China.

  "Any such charging of passage wouldn't be acceptable." — Tyler Kendall, [04:21].

• Memorandum of Understanding (MOU):
  The recent ceasefire is based on a 14-point MOU, which many see as weak, more of a framework to continue negotiations than a genuine peace agreement.

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2. U.S. Political & Military Strategy

Timestamps: [06:48]–[14:46], [35:31]–[39:50]

• Congressional Frustration:
  Congresswoman Madeline Dean criticizes Trump’s foreign policy as “chaotic,” highlighting lack of briefings to key committees and calling the war in the region “an epic failure.”

  "The whiplash that you can get from listening to him from one hour to the next…this war that was named Epic Fury has actually been an epic failure. And I say that with no pleasure." — Rep. Madeline Dean, [07:30].

  She points out the disconnect between large defense budgets and requests for supplemental funding as evidence of mismanagement.

  "Why are they asking for a supplemental when they have not released $100 billion worth of defense spending from his big, beautiful bill?" — Rep. Dean, [11:51].

• Shutdown Concerns:
  Appropriations stalemate persists, with warnings of a potential government shutdown ahead of midterms. Dean blames Republican leadership for legislative gridlock.

  "We should never have another shutdown. But if we do take a look at who's in power…Republicans." — Rep. Dean, [13:32].

• Military Posture:
  Retired Rear Admiral Mark Montgomery provides a nuanced view:

  • Recommends proportionate counterstrikes to drone launch locations but expects the administration will “let this one go” to keep negotiations viable ([31:44]).
  • US naval and air force deployments must stay for at least “four 60-day periods” (into November) to maintain security, but readiness will degrade if prolonged ([35:52]).
  • Morale remains high despite extended deployments ([36:53]).

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3. Tariffs, Trade, and Global Economic Fallout

Timestamps: [05:26]–[06:50], [29:14]–[29:49]

• Digital Services Tax Threats:
  President Trump threatens 100% tariffs on all imports from any country imposing a digital services tax on US tech companies, invoking Section 301 authority. Tyler Kendall notes this is a real and flexible tool, and similar threats led Canada to back down in the past.

  “Any country imposing such a tax will immediately be met with a 100% tariff on everything.” — Tyler Kendall quoting Trump, [05:26].

  "Section 301 is a very malleable tariff. I think it's fair to say it can go up to 100%. There's no cap." — Tyler Kendall, [05:49].

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4. Comparing Trump Era to Watergate

Timestamps: [21:58]–[28:29]

• JD Vance’s Nixon Parallels:
  Senator JD Vance, speaking at the Nixon Library, draws a parallel between Nixon’s downfall and Trump’s tribulations, arguing the “deep state” went after both.

  “If Watergate happened tomorrow, it would be like a 12 hour news story... the same groups of people, the same institutions tried to do to Donald Trump and the first Trump administration.” — JD Vance, [23:07].

• Panel Reactions:
  Rick Davis and Jeannie Shann Zaino express disbelief and critique Vance’s comparison, arguing it reflects a degraded sense of public outrage over corruption and a rewriting of history.

  “They are sending messages out to QAnon. They believe in conspiracy theories. They purge the Justice Department or go after their enemies... Nixon, you had to uncover this to find out who his enemies were. Trump just tells you, 'I'm going after this list of people.'” — Rick Davis, [25:07].

  “What is not true... is that the deep state was going after Nixon. Quite the contrary: it was Nixon using the deep state…same thing Donald Trump is doing.” — Jeannie Shann Zaino, [27:01].

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5. Military Leadership Shake-Up

Timestamps: [37:18]–[39:50]

• Pentagon Brain Drain:
  Admiral Montgomery criticizes Defense Secretary Hegseth for pushing out senior officers, including General Chris Donahue, calling it “a real own goal” that “weakens our national security with no obvious payoff.”

  “He is among about a dozen to 15 senior, three and four star admirals and generals removed from service without explanation by Secretary Hegseth. And I think this weakens our national security with no obvious payoff.” — Ret. Adm. Mark Montgomery, [38:01].

  He attributes at least some firings to misogyny, notably the removal of Admiral Frank Keddie, and warns it undermines female military participation.

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Notable Quotes & Moments

• Trump on Iran/Iran Nuclear Talks:

  "They want to make a deal with us very badly and we probably will. I think we will. But the strait is open...And the oil prices are dropping like a rock." [01:56]/[29:14]

• Tyler Kendall on Shipping Fees:

  “Oman is telling European officials that there's no way of going back to the pre war status quo in the Strait of Hormuz and that transiting ships may have to be charged some fees.” [03:54]

• Dean on Administration Briefings:

  “We have not been briefed. The President and his team have not briefed us. Secretary Hegseth has not come forward to either the Appropriations or the Foreign Affairs Committees. This is an administration sadly out of its depth, following an emperor who has no clothes and has shown it over and over again.” [10:46]

• Rick Davis on Political Culture Shift:

  “The culture and values we had in the 1970s is not the culture and values we have today....things that were the violation of the law...would not actually rise to the level of an impeachment...in the Congress even today.” [25:07]

• Admiral Montgomery on Military Posture:

  “We have 80 destroyers in the Navy. Only 17 are there...The Navy will be able to do the mission for the next year, year and a half. But then three years from now...a significant readiness ding.” [35:52–36:49]

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Segment Timestamps

• Opening & Oil Market Reaction: [00:40]–[02:45]
• Shipping Fees, MOU, & Congressional Reaction: [02:45]–[14:46]
• Panel: Maintaining Status Quo, War Risks, & Political Optics: [16:02]–[21:58]
• JD Vance, Watergate, and Political Norms: [21:58]–[28:29]
• Military Analysis with Adm. Montgomery: [31:44]–[39:50]

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Tone & Atmosphere

The conversation is brisk, sometimes incredulous—frequently critical of both the Trump White House’s unpredictability and the erosion of bipartisan communication in Washington. Analysts and guests stress the complexity and fragility of the Middle Eastern situation, draw analogies to historical scandals, and express alarm about the implications of politicizing the military.

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Conclusion

This episode provides in-depth analysis of the immediate fallout from Iran’s alleged ceasefire breach, skepticism about tariffs and digital taxes, concerns about legislative dysfunction in Congress, and broader worries about US strategic posture and democratic norms. The panel’s back-and-forth reflects the deep divisions and challenges facing US policymaking, both domestically and abroad.

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Transcript

[Joe Weisenthal]

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[Joe Weisenthal]

So it does seem to be a sleepy Friday. Overall, though, you are seeing some material action in the oil market as Joe and I and Amy were mentioning, with prices lower, despite the fact that the President is accusing Iran of violating the cease fire in the Strait of Hormuz. As he says, the US Shot down three one way attack drones, but of course a fourth hit a ship that was still able to continue on but nonetheless reignited some concern concern yesterday over the ability for ships to transit the Strait of Hormuz after it of course had been declared open via this memorandum of understanding. And we still have major outstanding questions as well, Joe, about whether or not fees or tolls are going to be imposed by Iran and Oman. The different sides are saying different things

about that in particular, that's for sure, fees. The word that Iran likes to use here, service fees I think is what we're calling administration. Yeah, it's like when you check into the hotel who made that reference, you get the spa charge whether you use it or not. But there are three routes that are emerg here in the strait and the US is trying to keep its own under control here. But this is an indefinite presence of our military, it seems in that part of the world.

[Jeannie Shann Zaino]

Yeah.

[Joe Weisenthal]

And for how long is that going to be deemed sustainable when of course the Pentagon is already requesting tens of billions of dollars more in funding from Congress for what has already taken place in the Middle east as we question the future.

Heard about this from President Trump. He was speaking at the Rose Garden Club just last evening about the status of talks. This is before the Truth Post earlier today. Listen, they want to make a deal with us very badly and we probably will. I think we will. But the strait is open. Yesterday they took out 19 million barrels of oil. That's the most in the history of the strait. And the oil prices are dropping like a rock. And you know, as goes oil, so goes everything else. That's the idea. And oil is lower. $69 for WTI. And that's despite the news here with the President saying, quote, this is a foolish violation of our ceasefire agreement. Bloomberg Washington correspondent Tyler Kendall joins us right now in studio here in Washington with the latest. Tyler, is this a one off post or could there be a change here in the strait?

[Tyler Kendall]

We're going to have to see how it evolves because this does mark the first such attack that we've seen since the Memorandum of understanding was signed. President Trump giving us a little bit more details here beyond what we had been tracking last night when this news broke. He says that the US was able to intercept three out of four of these drones, but that one ultimately hit this vessel. Though damage was sustained, it was still able to continue transiting through. But you hit on a really key point, Joe, that I've been following closely here, which is that this attack happened in one of those routes that's considered to be the safer route. It's that corridor that hugs the Oman coast where the US really has some leverage and control over. So in some regard this has perhaps undermined some of the confidence. Bloomberg News was able to review a message that one major oil company did send its vessels to say hold put for now. We saw the UN's global shipper say that they're going to, for now, suspend evacuation operations in the wake of this. But still the data analyzed is showing us that it's not really having that big of an impact. Ships are still making their way ultimately through the strait.

[Joe Weisenthal]

Well, and of course there's the question on whether in order to guarantee safe transit through the strait, ships eventually are going to have to pay. Bloomberg is reporting that Oman is telling European officials that there's no way of going back to the pre war status quo in the Strait of Hormuz and that transiting ships may have to be charged some fees. You questioned the President about this directly at the G7 and he made it pretty clear he did not want fees associated. The Secretary of State has said the same thing. So where's the disconnect here?

[Tyler Kendall]

I was going to bring that up. Just last night we had Marco Rubio reiterating to reporters that that's not going to be ultimately an option. But it's very clear that it's top of mind for Iran. Earlier this week it really came to the forefront because we saw Iran release this joint statement with Oman saying that they were working out some sort of fee structure, navigational fees, environmental fees, along those lines. I think the Secretary of State said ultimately it would be semantics in his words, but any such charging of passage wouldn't be acceptable. But pair that with the Wall Street Journal report that I know we spoke yesterday about on this program that Iran's estimating it could bring in $40 billion worth of revenue each year. But not only that, they're potentially going to pitch this to other countries in the Middle east, maybe even China, to share in on the costs, but also the profit of operating such a system. It leaves a lot of big open questions. Maybe that's the most contentious point right now. But then also, as you both know, we're tracking very closely President Trump last night doubling down that unfrozen Iranian assets are going to go towards US Farmers. That's the latest that we've also heard from Iran disputing that. That's something on the table.

[Joe Weisenthal]

Fascinating. Before we bring in the Congresswoman, Tyler, what's going on with this latest tariff threat? European countries discussing, he says, the imminent implementation of a digital services tax on American companies. To Kelly's point, some already this let this statement serve to represent. Any country imposing such a tax will immediately be met with a 100% tariff on everything. On what grounds would that be made?

[Tyler Kendall]

If I could take an educated guess here, I would assume that the president is teeing up something under section 301. We know the administration actually already has investigations from the first Trump term under section 301, which is investigation into alleged unfair trade practices. And we've seen them before, pull on investigations, investigations from the first Trump term and essentially repurpose them here. Typically these investigations take nine months, but they're able to essentially expedite that process if the work has already been done. Section 301 is a very malleable tariff. I think it's fair to say it can go up to 100%. There's no cap. And it also can be done indefinitely. You have to review it every four years. But would make sense. Maybe he's leaning towards that. Whether or not this is a negotiating tactic. I mean, you mentioned I was at the G7 last week. He said 100% tariffs on French wine if France doesn't drop it quickly, will add once we have seen a country drop it. That was Canada last year during the negotiations, they chose not to collect revenue. So.

[Joe Weisenthal]

Wow.

[Tyler Kendall]

Maybe it'll work.

[Rick Davis]

All right.

[Joe Weisenthal]

Well, I guess we'll see. We've seen 100% tariffs threatened before and they actually became reality. So to some extent, we have to keep history in mind here. Bloomberg's Tyler Kendall, our Washington correspondent. Thank you very much. And for another perspective now, we turn to Democratic Congresswoman Madeline Dean, who represents Pennsylvania's 4th district and serves on the House Foreign affairs and Appropriation Committees. Congresswoman, welcome back to Balance of Power. I would love to begin with you on what we were just discussing with Tyler regarding the President accusing Iran of violating the cease fire in a way that he says was foolish. If this was a ceasefire violation, should the United States do something about it?

[Congresswoman Madeline Dean]

Well, what I wish we had were diplomats actually negotiating the ceasefire. I'm sure by now everybody has read the 14 point MOU and how weak it is, how clearly drafted by Iran and for Iran that it is. And it was only a memo to talk more, to negotiate more. And we do not have solid diplomats on the ground doing the work, the difficult, complex work of negotiating the ceasefire. What we also see, and it was part of your last conversation, is just the chaos of this President, the whiplash that you can get from listening to him from one hour to the next, whether it is on signing bills that have been passed in a bipartisan way, like the housing bill, or about the ceasefire in Iran. Think about it. This war that was named Epic Fury has actually been an epic failure. And I say that with no pleasure. Obviously, our men and women of the military have been exquisite. But we have lost 13 members of the military. Hundreds have been wounded. More than $150 billion at least, has been expended. Our munitions are low. The President's now asking for a supplemental, even as he asks for more than a trillion dollars in a defense budget. The President's chaotic moves, whether it's domestic or it is international, and a question of war and peace, frankly, have been very hard to follow and very hard to support. That's a serious problem for this country.

[Joe Weisenthal]

You're on the Foreign Affairs Committee, as has been mentioned, Congresswoman, and I'm just wondering what you guys talk about, and is it Democrats in one circle and Republicans in another? The stories that we keep hearing are that you are not being briefed by the administration, that you didn't even see this MOU until it was already signed, or has it Democrats and Republicans together somehow, because you're all living in the dark.

[Congresswoman Madeline Dean]

I didn't see it until it was leaked and picked up by the press. We have not had a briefing from the administration. We haven't had a briefing on the, on the war, on the so called Epic fury, let alone on what would be a ceasefire and hopefully peace in the Middle east and a restoration of some economic ability to recover the economy by this administration. After all, what is going on in my district, what my Constituents care about are the issues of war and peace. They also care about the issues of costs. Everything the president has done has driven up costs, originally with his reckless tariffs. And here you hear him threatening them again, 100% on you. 100% on you. But then his chaotic and inhumane immigration policy. I'd love to talk to you about my visits to both Dilley and the economic impact. Dilley, Texas, and to Moshannon in Pennsylvania. These for profit detention camps, some holding children for months, terrorizing whole families. We have not been briefed. The President and his team have not briefed us. Secretary Hegseth has not come forward to either the Appropriations or the Foreign Affairs Committees. This is an administration sadly out of its depth, following an emperor who has no clothes and has shown it over and over again. And it is very dangerous for our national security and extremely harmful to our economy.

[Joe Weisenthal]

Well, you mentioned Secretary Hegseth not coming before the Appropriations Committee. We have seen a supplemental budget request handed down that includes almost $70 billion for the Pentagon and much money for other things, including Ebola response and aid to farmers, for example. What would the consequence be for our national security if the Pentagon doesn't need or doesn't get the funding it it needs?

[Congresswoman Madeline Dean]

Well, I'm looking at this list from the supplemental from the White House ask 67 billion for the war, 1.4 billion for Ebola, 11 billion for farmers, a billion for Penn Station, and 770 million for Department of Energy security issues. What would it mean? How about they release the $100 billion? I'm in touch with the defense industry, $100 billion from last year's big, beautiful bill. How about this administration doing its job appropriately, in a straightforward fashion, even with bills that I didn't approve of, but he got them signed into law. Why are they asking for a supplemental when they have not released $100 billion worth of defense spending from his big, beautiful bill? And it's very jarring because, as you know, this week we just marked up our final appropriations bill, the 12th of 12 in the House, and it is the defense bill. For the first time in history, they have asked for more than a trillion dollars in defense spending. So why in God's name would we ever need another supplemental for this failed war?

[Joe Weisenthal]

There are questions as an appropriator, Congresswoman, about what's going to happen in September. There are questions about this defense bill if the Save America act is attached to it. But what do you think about the narrative right now that Chuck Schumer, that possibly Hakeem Jeffries maybe yourself will not be able to vote for a budget in time to fulfill our requirements in the next fiscal year. And we could have a shutdown ahead of the midterms.

[Congresswoman Madeline Dean]

I hope we never have another shutdown. There is absolutely no reason for it. We have as appropriators have been doing our job. The Senate needs to get doing theirs. Then the four corners need to come together but the administration has to actually govern. And remember, we have a shutdown. Again, shutdown is the wrong term. The week collapsed underneath the chaotic behavior of the president failing to sign the housing bill and trying to attach this falsely named Save America bill, voter suppression bill. And what happened with the speaker of the House? He said send us all home early because he could not govern, he could not get a rule passed so that legislation could move forward. We should never have another shutdown. But if we do take a look at who's in power in the presidency, Republicans in the House, Republicans in the Senate, Republicans. And now we saw yesterday with some of the releases of the Supreme Court decision, Republican appointed justices, they're in full control. They should be able to make sure we have a budget and no one suffers a shutdown.

[Joe Weisenthal]

It's good to have you back, Congresswoman. Come see us when you get back to Washington. From Pennsylvania's 4th District, Democratic Congresswoman Madeline Dean Kaylee, we should note President actually turned some fire on Republicans over this whole situation involving the House on truth socially said House Republicans should unify, stop voting down rules or threats threatening to do so knowing that there is a stoppage of all business on the floor right now thanks to one Republican member.

Yeah, Congresswoman Anna Paulina Luna wants to see the Senate act on the Save America act. So she's stopping action on the floor of the House. Not sure that's going to compel the Senate to do anything, but it certainly makes the job of the speaker much harder, which is why he had to dispatch himself to the White House yesterday to talk to Trump about it. Try to get Trump to do a little public leaning on this particular member perhaps.

Well, we're still here. We'll have a lot more with our panel. They're here too. Rick and Jeannie next, only on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.

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[Joe Weisenthal]

11:30, the president upping the ante. We got to figure out how to get in this thing, right? Can we get in one of these airplanes? The president just posted on Truth Social that the Fourth of July air show, which was already scheduled, will be the biggest by far in the history of the United States of America. Hundreds of planes, he says different type sizes, speeds will be on display. This is like a 10 hour from 1 in the afternoon, 11:30 at night. I gotta see this. As somebody who stops down for air shows, are we talking an air show here or just a lot of flybys? There's a big difference. I was lucky enough to fly with the Thunderbirds once in an F16 out at Nellis Air Force Base. Broke the sound barrier, pulled nine G's, lost my lunch. I'm not looking to do that again. Put me in a big slow like a C130 or something. I want to see the mall from up there. We'll get a camera. You think Kaylee would go? She's probably got a cookout. You know, we came in today on this Friday thinking, gosh, maybe, maybe there are slow news days left, there's nothing going on. Maybe we have some big think conversations with Rick and Jeannie. But then of course as we walk into studio, news breaks. And today once again, it was from the President of the United States. And we're back to Iran. If you're just joining us, we talked to the admiral about this. It's an important development here as he accuses Iran of breaching the cease fire. Iran shot at least four one way attack drones, he says, at ships traversing the Strait of Hormuz. One of them hit the upper deck. Large, very expensive cargo carrying ship. Damage was done. We knocked out the three other drones. I'm skipping down here a little, obviously, quote, this is a foolish violation of our cease fire agreement, unquote. What now? Bloomberg Politics contributors Rick Davis and Jeannie Shann Zaino join. Rick is back, our Republican strategist and partner at Stone Court Capitol. Good to see you my friend. And Jeanne is of course our Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ash Center. Rick, this isn't enough to go back to war over, is it? The admiral a short time ago Mark Montgomery suggested it was not. But this is so delicate that I wonder your thoughts on whether it could be different this time.

[Rick Davis]

Yeah, I think all the pressure is to keep the negotiations going on. All the pressure is to try and keep the flow of oil coming out of the Gulf. And there'll be a lot of willingness to look the other way to not overreact.

[Joe Weisenthal]

Sorry, Rick. Go ahead.

[Jeannie Shann Zaino]

I'm sorry.

[Rick Davis]

And so yeah, I think when you look at what the incentives are, I think, you know, people are going to look the other way. And even the president's own comments sounded downright at ease with it. Oh yeah, you know, this happened. But we're not going to retaliate. We're not going to, we're not going to blink. We don't want that flow of oil to stop. So I think we're in for a period of time where we're going to have a lot of different obstacles to choose from in the Gulf. You know, the Iranians are going to constantly test our resolve.

[Jeannie Shann Zaino]

Resolve.

[Rick Davis]

They'll test the resolve of other allies in the region. And, and I think this administration says, look, we got to push through. We got 60 days to get a deal. Let's get the deal done.

[Joe Weisenthal]

60 days, Jeannie. Although Mark Montgomery said a little while ago you could have three or four of those 60 day periods to get you past November. At which point the president's, what did he say? His decision making matrix. I love it when military guys start with the jargon like that. Things could feel different after November. Is that right, Jeannie? You don't want to go to war for the next couple of months. Maybe we do hit a deal, but if we don't, we'll meet you in December. What do you think?

[Jeannie Shann Zaino]

I think that Donald Trump is not going to do much, you know, oil. You were just talking about Joe down around what, $69 he's going to be, he's going to bluster, he's going to complain. But you're absolutely right, nothing he can do before November. And you know who knows that Iran, this is the same situation we've been in. They are holding all the cards. Donald Trump is playing catch up. And if you listen to Iran, what are they saying? The cease fire has been broken repeatedly given what is going on with Hezbollah and Israel in Lebanon. So Donald Trump, we're going to hear a lot about these kinds of statements, frustration. But there's nothing he can do. The cease fire is fragile and he's got no options now and he knows it to his credit. But to proceed forward and try to get an agreement and of 60 days isn't going to be enough. It's going to be a number of 60 day periods but certainly nothing pertaining to like we saw in February before November.

[Joe Weisenthal]

Before we move on to something else, Rick, what do you make of the Market reaction or the lack of reaction. This is pretty amazing. I mean, I realize it's been a couple of months of, you know, on again, off again. The market just doesn't seem to even care anymore. The president post something like this. You've got crude oil down 4%. We're at $69 a barrel. We were at 67 before this thing started. Has Wall street just moved on?

[Rick Davis]

Well, I think they feel like the commitment is there to keep the flow of oil and, and the president isn't dissuading them. If he just said, hey, I'm bottling it up again because we got to teach Iran a lesson, I think you'd have seen a different reaction. And that's the kind of things he was saying and doing just a month ago. So I think we've seen a sea change in policy. Policy will dictate some of what Wall street feels about this. Before Wall street thought we're in the middle of a war and everything goes. Now we're in the middle of trying to make peace and stability should reign supreme. So I can't imagine a scenario right now without all out war breaking out again, which is in nobody's interest that, that the markets don't sort of set this aside and say, call us when something really good or really bad happens.

[Joe Weisenthal]

Well, it's unclear when J.D. vance is going to be heading back overseas, assuming this stays in Switzerland or whatever we do here. He's still the negotiations. We do not have a date or I think even a suggestion that there'll be a second round of talks. He is making news, however, about a very different topic and curious that he would pick this one to go after Jeannie. JD Vance spoke at the Richard Nixon Presidential Library out in California. You've both probably been there. The headlines that came from it, though, are fascinating. As I read in the Washington Post, Vance Dismisses Watergate Scandal, says Deep State Went after Nixon. Vice President says he Admired Nixon. Drew parallels between the past president who resigned in 1974 and Trump today. All of it out loud. Listen to what he said. If Watergate happened tomorrow, it would be like a 12 hour news story.

[Retired Rear Admiral Mark Montgomery]

The idea that it would have taken

[Joe Weisenthal]

down a presidency is crazy. And by the way, if you look at the story of how the deep

[Retired Rear Admiral Mark Montgomery]

state took down Richard Nixon, it's not

[Joe Weisenthal]

all that different from what the same groups of people, the same institutions tried to do to Donald Trump and the first Trump administration. There is a parallel.

[Rick Davis]

Wow.

[Joe Weisenthal]

Look, it's one thing to try to express sympathy for Richard Nixon, maybe even the deep state, whatever you want to do. But to then compare him to your current boss is a strange move to make. Unless there is a parallel. Jeannie, what do you make of this?

[Jeannie Shann Zaino]

Yeah, and Joe, I have a question. Is he comparing Donald Trump to Nixon or is he comparing himself a vice president, you know, surrounded by corruption, who doesn't do so well in 60 but comes back strong? So I don't know, JD dancer or whatever it is, it is insane to sort of tease out why he decided to talk at the library about Watergate in this way. What political benefit Is this to J.D. vance? Except of course saying I too can come back. But Joe, this has been such an awkward, cringe worthy rollout of his book tour. I'm sure you saw the knee tap that was heard round the world with his lovely wife. I mean, from start to finish this thing has been awkward. So, you know, I'm stunned. He raised it and then again looking at the knee, the knee tap. And if people haven't seen it, you got to google it. It's all a little bit cringe worthy. So I'm not surprised.

[Joe Weisenthal]

Jeannie always comes prepared, I swear, like Rick. I don't know, I'm not sure what to say about the book tour here, but why call out your boss and compare him to the only president who had to resign in scandal? It's not just of course, the break in and the plumbers and all that. It's the enemy's list. The tapes, the anti semitic stuff. I mean, how do we, how do we frame this?

[Rick Davis]

Well, I don't want to look past the midterms, but I for one am really excited about the 2028 presidential cycle because if we can get this every day of that cycle, I mean it will be a circ and I want to take it to that. Look, I mean, is there this, this portends a really significant thing which is the culture and values we had in the 1970s is not the culture and values we have today. I mean, these are guys who, you know, they, they, they, they are sending messages out to QAnon. They believe in conspiracy theories. You know, they purge the Justice Department or go after their enemies. I mean, an enemy's list with Nixon was horrible. And an enemies list in the Trump administration is applauded at every rally. He even names names. I mean, Nixon, you had to uncover this to find out who his enemies were. Trump just tells you, I'm going after this list of people. And so I do think it's something worth really understanding as to how different the Political culture is today. And what, what Vance said is unfortunately the truth, which is things that were the violation of the law. The president using, you know, money to silence people, burglaries to, you know, try and win elections, would not actually rise to the level of an impeachment, you know, session in the Congress even today. So I think it's actually a really sad moment because I think what he's saying is more true than not. And it, and it's a horrible thing.

[Joe Weisenthal]

Wow, I'm so glad we brought this up that you're, you're just, you guys are dead on here. Is there truth, as Rick is saying? Jeannie, what, what was the line? If Watergate happened tomorrow, it would be like a 12 hour news story. Is that the case?

[Jeannie Shann Zaino]

I think it might be, but probably because we are now desensitized to the level of corruption. What is not true and I think has to have his Yale professors of history sort scratching their heads. I think he needs to go back to Yale and take another history class. Is that the deep state was going after Nixon. Quite the contrary. It was Nixon using the deep state. And the history is clear on this. This has been vetted, this has been proven. He was trying to use the deep state to go after his political opponents. And guess what, it's the same thing Donald Trump is doing. You know, as we're all just reading through the new Maggie Haberman and Jonathan Swan book, there's a point there which Donald Trump is talking about Jerome Powell and says in very colorful, off putting language that I'll leave to you, Joe, you know, I want his F in something. And they talk about the fact that he is, you know, wants to go after him. He wants to make his life miserable and he's going to do that any way he can. Can we use this building? Can we use the doj? I mean, this is what he's talking about. So you know, J.D. vance is trying to say that this is a deep state conspiracy on both sides. It wasn't true about Nixon. It's not true here. And we should all rewatch one of my favorite movies, all the President's Men this weekend. Great movie, great book too. And go for journalists. So good.

[Joe Weisenthal]

Well made. To Jeannie's point, JD Vance musing on his own similarities to Nixon. Quote, young senator, vice president, writes some best selling books, is hated by media. Kind of sounds like J.D. vance. He said, I've always liked Richard Nixon. Our great panel is with us here on the Friday edition. Stay with us. On balance of power. We'll have much more coming up after this.

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[Joe Weisenthal]

Trade starting to improve here. Maybe we'll be in better shape as we get closer to the bell. We'll see. The news might impact this, although so far no one seems to be blinking at what's coming out of Iran. The President saying that they violated the cease fire after shooting at a boat yesterday. We told you about this. WTI still below $70 a barrel. Pretty remarkable, the President making news on a couple of fronts here. Bear with me before we bring in the Admiral. Numerous European countries he just went up on this with Truth Social have been discussing the imminent implementation of a digital services tax on American companies. You've heard him talk about this before. Some of these countries are close to actually doing this. Please let this statement serve to represent that any country that imposes such a tax. Are you ready? Will immediately be met with a 100% tariff on any and all goods sent to the United States. 100%. The tariff, he says, will supersede trade deals made with that country, whether implemented, signed or not. Additionally, 100% tariff will be immediately imposed if they proceed. So you got that now? You got the cease fire. This also came from Truth Social. We actually haven't heard the President talk yet today. He says Iran shot at least four one way attack drones at ships traversing the Strait of Hormuz. One of the drones solidly hit the upper deck of a large and very expensive cargo carrying ship. Damage done. He says the ship was able to proceed on its way. We knocked down three other drones. A foolish violation of our cease fire agreement. Talked about Iran in the Rose Garden. I should call it the Rose Garden Club, right? Last evening, flanked by the American flags. Listen, they want to make a deal with us very badly. And we probably will. I think we will. But the strait is open. Yesterday they took out 19 million barrels of oil. That's the most in the history of the strait. And the oil prices are dropping like a rock. And you know, as goes oil, so goes everything else. Well, and oil is lower still today. Deeply curious to hear what the Admiral has to think. We're lucky to have him back today. Retired Rear Admiral Mark Montgomery, former Destroyer Squadron Commander, U.S. navy Senior Fellow of the center on Cyber and Technology Innovation foundation for Defense of Democracies. It's great to see you sir, welcome back to Bloomberg. When you hear the President say something like this and you now confirm the attack on the cargo ship, does it make you think we're going back to war?

[Retired Rear Admiral Mark Montgomery]

This is a complex issue. I think as a military officer, I would recommend a proportionate counterstrike against the drone launching areas of the irgc, you know, in around Bandar Abbas, around the Strait of Hormuz. But politically, the President really wants this peace deal to proceed or the negotiations to proceed. I think he'll probably, my gut reaction is he'll let this one go. And look, we're talking about here is the southern transit scheme, the one we've been using since about April 2. We were getting through about a million or 2 million barrels a day till the ceasefire was signed. Then it was about 9 million barrels a day. As the President said, there was a big day yesterday. I'm not sure it was a record. I think I've seen higher numbers than that. But in any case, back to normal flow yesterday. This is a, a transit scheme, generally mine, swept by the United states, protected by U.S. aircraft and ships on the, on the edges of it. But you know, clearly, you know, it shot down a lot of drones over the last, you know, four weeks. But clearly one here got through, hit a ship. The good news is, as he averred to there, many of the drones have small explosive amounts in them. So if they hit a superstructure, the top part of a ship known as a superstructure, you can get the fire out quick. Then the damage is minimal to moderate.

[Joe Weisenthal]

Iran seems convinced it's going to be able to charge fees. We don't call them tolls, which is a little bit too cute for most people, Admiral. But I'm wondering what you see as the future for the strait. Could we be in a world where these, these three separate routes are maintained by three separate entities?

[Retired Rear Admiral Mark Montgomery]

No, I don't think so. I think, look, if they decide to charge transit scheme through the northern transit lane, the one between Iranian islands and Iran, they may be able to get away with that. But what will happen is the only ships that will go through there are the ones going to Iranian ports and then one's going to other ports. You know, Qatar, Kuwait, Saudi Arabia, United Arab Emirates will go through the southern transit scheme. I think we can, can keep Oman from violating international law and going along with Iran, but that's going to mean a lot of talks with Oman. But I also tell you the other big deal is the Saudis are going to build a second cross peninsula from east to west pipeline as is the United Arab Emirates, a second one down to Fujairah outside the Strait of Hormuz. And you know, they're not limited by like environmental impact statements and OSHA and epa. They're going to be built fast. And, and once they do it, in a weird way by this overplay by Iran, they will, they're frittering away their leverage. This leverage will expire when more pipelines are complete.

[Joe Weisenthal]

Fascinating. Could we end up in a world. And I know you're not an energy analyst, Admiral, but you sure seem to know what you're talking about every time we get together on this. When it comes to the oil industry industry, could we be in a world where we create an irrelevant straight of hormones? Can you reroute that much oil?

[Retired Rear Admiral Mark Montgomery]

So I think I'd have to separate it to crude, other oils, lng, liquefied natural gas and fertilizer. The other ones, the non crude, are going to probably still have to come to the Strait. So I wouldn't call it irrelevant, but I would call it less urgent or you know, there's a lower ability to drive an international crisis because as we found out during this there are other sources of lng, particularly the United States can step in. We may be slightly more expensive than kuwaiti or Qatari LNG, but when we're available, we're 100% available because no one's blockading our ports.

[Joe Weisenthal]

What's your thought on the status of our armada of this massive fleet that we have that was conducting the blockade? Of course we've got, we've had multiple carrier strike groups there. We've got I think 50,000 men and women still in the region and we know that a lot of these deployments are extended. We've talked about this before, Admiral. Do they all need to stay in place for the balance of this 60 day period?

[Retired Rear Admiral Mark Montgomery]

Yes, and probably beyond. You know, there's going to be about four 60 day periods to get us at least past early to mid November. And then the President might have a different decision making matrix, but I would tell you maybe a more aggressive decision making matrix. But the aircraft, the Air Force squadrons that are on the Arabian peninsula and the two Navy carrier strike groups and the 17 or 18 destroyers are all critical and so we're going to maintain those. But we'll rotate the actual ships through there. You know, we have 80 destroyers in the Navy. Only 17 are there. So we have an ability to do that. I will tell you, if this goes on more than another six months, there will be a long term impact. The Navy will be able to do the mission for the next year, year and a half. But then three years from now, the navy and the Air Force fighter squadrons that are also playing in this are going to have a significant readiness ding.

[Joe Weisenthal]

How's morale out there? What are you hearing from your contacts?

[Retired Rear Admiral Mark Montgomery]

Look, they want to be on. I have lots of friends out there, relatives. They want to be on mission. Every military soldier, sailor, and marine guardian wants to be on mission. The ones in the Arabian Gulf, the ones in the Arabian Peninsula are on mission. So I think morale is, is, you know, as one would expect, you know, high at getting to do, execute mission.

[Joe Weisenthal]

Wow, we're so lucky to have this incredible volunteer military force. Admiral, I have to ask you about reports this week. Secretary of Defense Pete Hegseth forced out the man who many people know as the last American service member on the ground in the evacuation of Kabul. There was a very famous night vision photograph of him walking up the ramp, the back of a military transport aircraft. Last boots on the ground, Hegseth forced out General Chris Donahue, reportedly a fierce and beloved leader of our armed forces. The brain drain at the Pentagon is real. Why did this have to happen?

[Retired Rear Admiral Mark Montgomery]

This is a real own goal. A big mistake by Secretary Hegset. So First I'll say CD, you know, is a Delta Force commander, 82nd Airborne commander. He is a soldier. Soldier, strong leader. I spent a lot of time in Ukraine working with their military, and I learned a lot about drones. Drones. When I come out, the one US General that really, you know, senior officer that really understood drone warfare correctly and how to counter drones was General General Donahue. You know, so from my perspective, this is a big loss the Army. I don't know what his next job should have been, but I know he should have had another job where we could use his talents leading us. And he's the, you know, he's among about a dozen to 15 senior, you know, three and four star admirals and generals removed from service without explanation by Secretary Hegseth. And I think this weakens our national security with no, no obvious payoff.

[Joe Weisenthal]

What's the house cleaning all about? If we're losing this much experience, is it a loyalty test?

[Retired Rear Admiral Mark Montgomery]

I think for some of them, the initial ones, like the head of our Navy, Admiral Frank Keddie. She's fantastic. I'd known her for 35 years. She was the best person for the job, but she was a woman. And secretary headset made it clear in his 202024 book that he didn't have a lot of respect for her. Or in general for women serving in combat. And so I think he has a issue with that. It's misplaced. You know, any anything he puts in place now will be changed by his successor that we absolutely need the 51% of our society that's female to be an important part of our military across all services in combat, in support roles and everything. This is really misplaced effort by the Secretary of Defense.

[Joe Weisenthal]

I really appreciate you weighing in on that, Admiral, and it's always a pleasure to spend some time with you. Thank you. Retired Rear Admiral Mark Montgomery, US Navy foundation for Defense of Democracies 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 [e-mail] Never bet against American Grit or American Energy through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction

[Retired Rear Admiral Mark Montgomery]

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[Joe Weisenthal]

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