Balance of Power – “US and China Hit Pause”

Podcast: Balance of Power
Host: Bloomberg (guest host David Guray, in for Joe Mathieu and Kailey Leinz)
Date: October 27, 2025

Episode Overview

This episode explores a critical week for US foreign and domestic policy: President Trump’s high-stakes trip to Asia and the ongoing political and economic repercussions of the US government shutdown. The hosts and guests analyze how upcoming meetings with Japan, China, and allies could affect trade, defense, and global markets, and discuss the gridlock on Capitol Hill as the shutdown stretches on. The program covers the evolving balance of power between the executive and legislative branches and the broader implications for upcoming US midterm elections, including contentious redistricting battles. Notable guests include correspondents on the ground, former Trump Chief of Staff Mick Mulvaney, political strategists, and trade policy experts.

Key Segments & Discussion Points

1. President Trump’s Asia Trip: Focus on Japan and South Korea

Timestamps: 00:55 – 04:44

• Japan’s $550 Billion Investment in the US
  • David and Tyler Kendall, in Tokyo, discuss Japan’s unprecedented commitment tied to preferential tariff rates (down to 15% on imports, notably autos).
  • Shipbuilding sector and military cooperation agreements are in focus, connected to US national security priorities.
  • Japan aims to expedite its military spending target (2% of GDP), applauded by the Trump administration.

“This investment fund that you're outlining is absolutely critical to Japan receiving that more preferential tariff rate... it extends to sector specific tariffs such as autos, which we know was a big priority for Japan.”
— Tyler Kendall (01:48)

• US-China Leaders Summit Preview
  • President Trump is set to meet with President Xi Jinping in South Korea following groundwork laid by US Treasury Secretary Scott Besant and US Trade Representative Jamison Greer.
  • News of a “framework deal” from Kuala Lumpur meetings, including a truce extension and rare earths concessions.
  • Trump signals optimism but expectations remain tempered:

“We're going to have a great talk. I have a lot of respect for President Xi... I think we're going to have a successful transaction for both countries.”
— Donald Trump (via Mick Mulvaney) (03:56)

2. Trade War Dynamics: Pausing, Not Resolving

Timestamps: 04:44 – 06:47

• Temporary extension of the US-China trade truce expected, with rumors of China reviewing its new rare earths export controls.
• High tariffs remain (effectively 40% on Chinese goods).
• No solution yet to core issues: national security, global trade balance, tech, and agri-imports (soybeans remain a sticking point).
• Both sides are dialing down rhetoric to "get back to the negotiating table".

“At the end of the day, this really does feel like a simmering intentions... for now at least neutralized so that both sides can get back to the negotiating table on a broader term deal.”
— Tyler Kendall (05:50)

3. Trade Status with Mexico and Canada

Timestamps: 06:14 – 08:16

• US extends trade deadline for Mexico negotiations while maintaining a hard line on Canada.
• Mexico faces high tariffs (23.5% on non-USMCA goods, with threats up to 30%).
• Tariffs on Mexico are linked to fentanyl and border concerns; for Canada, steel and aluminum are singled out (50% tariffs), with Trump reluctant to exempt USMCA-compliant goods.
• Ongoing uncertainty over future North American trade arrangements.

“There is a whopping 50% tariff on Canadian steel and aluminum, which we know is a big point of contention between the two economies.”
— Tyler Kendall (08:07)

4. Inside the White House – Mulvaney’s Perspective

Timestamps: 08:16 – 10:56

• Mick Mulvaney describes the rigors of presidential travel and the contrasting negotiation styles of Trump and Xi.
• Mulvaney predicts a continuation of “cold peace” between US and China — no dramatic breakthroughs, just ongoing, incremental talks.

“This is sort of a cold peace. I don't think you're going to see everything sort of get back to warm and fuzzy. I don't think you're going to see a full blown trade war. I think you see sort of choppy negotiations on and off, bits and pieces here and there for the next several years.”
— Mick Mulvaney (09:47)

5. The Government Shutdown: Evolving Power Dynamics

Timestamps: 10:56 – 16:17

• Mulvaney explains (from his time at OMB) that compared to prior shutdowns, Trump now enjoys stronger Republican support, increasing his leverage.
• With Congress at an impasse, the executive branch (especially OMB) wields greater authority than ever during a shutdown, determining which government functions remain open.
• Airports (particularly air traffic controllers missing paychecks) are seen as the likely pressure point, not SNAP benefits or open enrollment.

“The ordinary middle class family that... doesn't engage in politics. It doesn't touch them until they need to go see grandma at Thanksgiving... I think the airports are the pressure point.”
— Mick Mulvaney (14:40)

6. Panel Roundtable – Impact & Implications of the Shutdown

Timestamps: 17:35 – 23:09

Guests: Jeannie Zaino (Harvard Kennedy School), Maura Gillespie (Bluestack Strategies)

• Snap/Benefit Expirations vs. Travel Delays
  • Both panelists agree with Mulvaney: widespread frustration will mount if Thanksgiving travel is disrupted, more than benefit expiration notices.
• Capitol Hill Inaction
  • Unlike past shutdowns, virtual silence from congressional leaders; the House has not met since September 19th.
  • Public patience runs thin — huge numbers of federal workers furloughed or working without pay.
  • Both parties blamed for point-proving with no endgame in sight.

“...the House has not been in since September 19th. Members aren't having these conversations... at least having conversations may not have always led to a fruitful discussion by each day, but at least they were open...”
— Maura Gillespie (19:44)

• Presidential Absence
  • Trump's refusal to sign bills via autopen could physically delay a reopening deal.
  • While phone lobbying is possible, his current focus is foreign policy — shutdown solutions not a top priority.

“...the president is really focused on his own agenda, especially in the foreign policy realm right now. And unfortunately, it's not. This is not on the top of his priority list, although, you know, it probably should be.”
— Maura Gillespie (22:01)

7. Midterms and Redistricting Fights

Timestamps: 23:09 – 27:48

• National Redistricting Moves
  • Virginia serves as a microcosm for nationwide partisan battles.
  • Democrats, previously reluctant, are now engaging in mid-decade redistricting to counter Republican moves.
  • Both panelists lament decreased competitiveness and increasing voter disenfranchisement — gerrymandering reduces true voter choice.

“...you can draw all the districts you want. It still doesn't ensure you are going to win. You still need campaigns, you still need candidates... And this is only going to make it worse. I mean, I think when we look at the number of competitive seats that will be left in 26, it is abysmal. And that is a loser for the American voter...”
— Jeannie Zaino (23:52)

• Disincentives for Political Participation
  • Climate for candidates is increasingly toxic; safety and family considerations deter many from running.

“...how we attack and demonize those who have different views than us, it's putting people at risk. We've seen that play out, unfortunately... it just creates a, I think, in my opinion, a lesser pool to choose from...”
— Maura Gillespie (26:00)

• Election Trust and 2028 Outlook
  • President Trump’s rhetoric links unrelated scandals to claims of electoral fraud, coloring the atmosphere for the coming elections.

“...lots of questions about how secure it is and how much people can trust the vote. And that's so problematic in a democracy. I wish the president would lift up up and not push down.”
— Jeannie Zaino (27:48)

8. Argentina’s Shifting Political & Market Landscape

Timestamps: 30:39 – 34:49

• Javier Milei’s Party Surges
  • Argentina’s currency and bonds surge after Milei’s party wins unexpectedly; viewed as an endorsement of US-encouraged reforms.
  • The path ahead is fraught — Milei will need to balance pro-market reforms (including unpopular pension/labor reforms) with reality of no clear congressional majority. Mass protests likely if cuts are aggressive.

“He needs to pull off a really delicate balancing act of igniting economic growth, keeping inflation in check and power sharing with other centrist blocs in Congress.”
— Patrick Gillespie (31:40)

9. Trade Policy Deep Dive: The Hard Limits of ‘Decoupling’

Guest: Nazagna Kakhdar, National Security Practice Group Lead, Wiley Ryan
Timestamps: 34:49 – 41:57

• Complicated Demands Between Washington and Beijing
  • Both governments are entering this round of talks with non-negotiable red lines: US on Taiwan and rare earths, China on non-interference.
  • Ongoing “framework deals” offer symbolism more than substance; China’s past non-compliance with “Phase One” deals weighs heavily.
  • Technical legal, economic, and political hurdles make progress incremental at best.

“What I've seen in these sort of pre negotiation negotiations, framework deals is easing of China off its export ban. But that doesn't say much. That doesn't mean that China has made absolutely clear that our military, our defense capabilities will not be get rare earths...”
— Nazagna Kakhdar (34:49)

• Market Considerations vs. Enforcement
  • US negotiators are boxed in — tough enforcement (tariffs) hurts markets, which the administration wants to keep stable.

“You can't have a trade deal with China with strong enforcement and be willing to go to use your enforcement levers because China never adheres to deals... The administration has backed itself into a corner.”
— Nazagna Kakhdar (37:59)

• Complexity of North American, Asian Supply Chains
  • Japan’s $550B investment commended, but questions remain over what will be invested in and where (given Japan’s own supply chain needs).
  • Malaysia and Mexico face similar pressure as China’s influence in supply chains complicates commitments to the US.

Notable Quotes, Moments & Insights

• On US-China “Cold Peace”:
  “I don't count…on anything major coming out of this. In fact, I don't count on anything major coming for the next several years... This is sort of a cold peace.”
  — Mick Mulvaney (09:47)

• On Shutdown Dynamics:
  “The power that the director of the Office of Management Budget has during an ordinary appropriations process is pretty considerable, but it goes up exponentially during a shutdown.”
  — Mick Mulvaney (12:28)

• On Redistricting Dangers:
  “We already have a terribly gerrymandered House. That's why it's so close. And this is only going to make it worse... the American public... are robbed of choice.”
  — Jeannie Zaino (23:52)

• On Election Distrust:
  “I wish the president would lift up up and not push down.”
  — Jeannie Zaino (27:48)

Summary Table of Key Segments

| Segment | Speaker(s) | Timestamps | Main Points | |-----------------------------------------------------|---------------------------|--------------|------------------------------------------------------------------| | US-Japan Trade & Defense Talks | David, Tyler Kendall | 00:55–04:44 | Japan’s $550B investment, tariffs, shipbuilding, defense | | US-China Summit Expectations | Trump (via Mulvaney), Tyler| 03:56–06:14 | Trade truce, rare earths, soybeans, “cold peace” | | North America Trade Dynamics | Tyler Kendall | 06:14–08:16 | Mexico & Canada tariff wrangling, border/fentanyl, USMCA | | Mulvaney on White House–Congress Dynamics | Mulvaney | 08:16–10:56 | Staff fatigue, negotiation styles, expectations from Xi meeting | | Shutdown Power & Pressure Points | Mulvaney | 10:56–16:17 | OMB leverage, airports vs. SNAP, shutdown pain points | | Shutdown Impact—Panel Reactions | Zaino, Gillespie | 17:35–23:09 | Congressional inaction, pain points, presidential absence | | Redistricting, Division, and Political Participation| Zaino, Gillespie | 23:09–27:48 | Gerrymandering, candidate pipeline woes, trust in elections | | Argentina’s Election/Economic Update | Patrick Gillespie | 30:39–34:49 | Milei’s rise, market reaction, pending reforms/protests | | Trade Policy, US-China, Supply Chains | Nazagna Kakhdar | 34:49–41:57 | Rare earths, enforcement dilemmas, Japan/Malaysia complexities |

Tone & Takeaways

• Sober and Analytical: The hosts and guests balance sharp political analysis with practical, sometimes pessimistic, assessments regarding both international diplomacy and domestic governance.
• Frustration with Congressional Inaction: Multiple speakers note the near absence of productive dialogue on Capitol Hill.
• Complexity and Caution in Global Negotiations: Both on trade and foreign policy, there’s consensus that progress will be slow, complicated, and subject to unexpected events and entrenched interests.
• Concern for Democratic Integrity: Gerrymandering and election security are highlighted as urgent, possibly intractable problems.

Recommended Episodes, Further Listening

• Previous episodes covering earlier rounds of US-China trade talks
• Special episodes on the government shutdown, OMB’s role, and historical precedent
• Deep dives on redistricting, electoral trust, and global supply chains

This summary delivers a comprehensive, sectioned recap of the October 27, 2025, “Balance of Power” episode, preserving the tone and insights of the speakers while orienting new listeners to critical ongoing stories in US politics, international relations, and economics.