Loading summary
Transcript55 lines
- [00:00]
Adobe Announcer
Introducing the all new Adobe Acrobat studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat.
- [00:35]
Verizon Business Announcer
With Volley from Ishares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly Inc. Not guaranteed prepared by BlackRock Investments, LLC as a contractor, I don't pay for materials I don't use, so why would I pay for stuff I don't need in my mobile plan? That's why my biz plan from Verizon Business is so perfect. Now I can choose exactly what I want and I only pay for what I need right now with my biz plan. Get our best price as low as $25 a line. Visit verizon.combusiness to get started today. New lines only. Price per month with five plus lines includes auto pay and paper free billing and promotional discounts, taxes, fees, economic adjustment charge applicable. Add ons prices and terms apply. Guarantee applies to base monthly rate and stated discounts only. Add on prices. Additional offers in 3-31-20.
- [01:34]
Adobe Announcer
Bloomberg Audio Studios.
- [01:36]
Amy Morris
Podcasts Radio News.
- [01:42]
David Gueret
Tuesday marks the end of the first year of President Trump's second term and it's been busy.
- [01:48]
Mark Nikkei
We're cutting down the size of government.
- [01:50]
David Gueret
The Trump administration moved quickly and decisively to reshape the US Economy and by extension it's reshaped the global economy.
- [01:58]
Adobe Announcer
President Donald Trump's trade wars bring uncertainty, drive up costs and disrupt global commerce. So called one big beautiful bill.
- [02:06]
Okta Announcer
American hiring plummeted.
- [02:08]
Mark Nikkei
The cost of groceries is a major source of stress. Investigation of Fed Chair Jerome Powell is sparking backlash.
- [02:14]
Nancy Cook
I think that he and his team have come in and really tried to juice the economy and sort of take a bunch of guardrails off of it.
- [02:21]
David Gueret
Nancy Cook is a political reporter for Bloomberg I spoke with her and Mark Nickat, our colleague whose beat is the real economy.
- [02:29]
Mark Nikkei
The administration really looks at affecting the economy and boosting the economy as kind of a three legged stool with taxes and the tax cuts, deregulation. Trump has talked about eliminating 10 rules for every new rules. And the third leg of the stool would be trade and adjusting what he sees as a trade imbalance with other countries to boost U.S. manufacturing and production.
- [02:58]
David Gueret
I'm David Gueret and this is the big take from Bloomberg News today on the show. The deep and dramatic changes the Trump administration has made and proposed and imposed and the effects they've had on the way the US does business, which have had the biggest impact and which are likely to last. So we're not going to get through everything President Trump has done in 2025. Our time is limited. So I asked Bloomberg's Nancy Cook and Mark Nikette to help me make sense of some of the administration's biggest initiatives related to business and the economy. And we started with what's become the hallmark of his second term so far.
- [03:45]
Interviewer
For more than half a century, the US had been a huge supporter of free trade. President Trump has certainly changed that over the last year. He slapped these big the board tariffs on longstanding trading partners.
- [03:55]
David Gueret
Mark, what has the effect of that.
- [03:56]
Interviewer
Been on the global economy? The president going down that path?
- [04:00]
Mark Nikkei
It's completely reordered global trade. One because of the scope of these tariffs. You know, highest tariff rate now since the 1930s in the US but also because of the uncertainty that it caused for US Businesses, particularly manufacturers, because the tariffs kept going on, coming off. Trump would adjust the rates. Businesses just were not able to plan because of the vacillating tariff rates. And we saw just massive swings in trade because of the tariffs. We saw, you know, companies rushing to import goods ahead of tariffs, which affected the trade balance. And we just saw a bunch of activity related to companies trying to get ahead of or around Trump's tariffs.
- [04:42]
Nancy Cook
You know, it hasn't shown up in economic data as much as people thought it would, and I feel like we're still waiting to see the effects of it. Partly it's because Trump keeps changing his mind on the trade. When there was those elections in November where Democrats won the gubernatorial races in Virginia and New Jersey, and it just sort of was revealed that Americans were really mad about still high prices. You know, just a sense that American life is unaffordable. I think the White House really pivoted at that point and started to do even more trade carve outs on things like coffee and bananas, you know, really rolling back those tariffs. And so one of the things with trade policy is it's just been a moving target. Sort of every month it looks completely different, Depending on which CEOs went in and and tried to make the case of how there needed to be fewer tariffs on retailers. And so it's just changed so much that it is hard to get a real clear picture of what its economic effect has been like in the first year, because it's kind of this thing that's changing and morphing kind of week after week.
- [05:43]
Interviewer
And, Nancy, it's the president who is moving that target. And I want to ask you about the politics of trade. In the past, historically, it has been the provenance of Congress to determine trade policy. That is not the case anymore. And I wonder how surprising it is to you that lawmakers, Republican lawmakers, have really taken a back seat here and ceded a lot of that power to the president.
- [06:03]
Nancy Cook
Well, I think it's been very surprising. You know, I covered the first Trump White House, and so I've been covering Trump for almost a decade now. And I think one of the interesting things between the first term and the second term is that Republican lawmakers have ceded basically all their power to the Trump White House. Trade is totally in the authority of Congress. But Trump this time came in trying to sort of use these different statues or sections or different laws to give himself the authority, and has completely run over Republican lawmakers on this and has really done so without a lot of protest. Now, the one backstop that we're waiting to see what happens with is the Supreme Court. We're expecting the Supreme Court to rule on this one legal statue that Trump tried to use to give himself authority to make rulings on trade. And a lot of Trump advisors I talked to think that the Supreme Court, in a rare rebuke of Trump, will not rule in his favor. I think what will happen is that it won't pull back from the tariffs. I think it just means that they will lean on a different legal authority to pursue the same policies. Out of all of Trump's economic policies, trade is the thing that I would say he feels most deeply. So even if the Supreme Court strikes him down, I think he'll just continue to pursue it, but just with a different explanation for why he's doing it.
- [07:23]
Interviewer
Mark, we know that President Trump loves tariffs. He reaffirmed that in a speech that he gave to the Economic Club of Detroit just a few days ago.
- [07:30]
Mark Nikkei
It's his favorite word.
- [07:32]
David Gueret
Favorite word seen him impose those tariffs.
- [07:34]
Interviewer
For a variety of reasons. And a big one has been to encourage a kind of manufacturing renaissance in the U.S. how's that working out?
- [07:41]
Mark Nikkei
It's not. And part of the problem is it might be just too early because these kind of reassuring actions that Trump is looking for and increase in manufacturing production are in some cases years long investments and commitments by companies. And they've been unwilling in a lot of cases to make these kind of commitments because the tariff rates keep changing and they don't know where the trade policy is ultimately going to land. So the intent clearly is to, as Trump says when he talks about tariffs, is that if you make your goods or your products in the US you don't have to pay the tariff. That's the whole intent behind it. But it's just not that simple because in a lot of cases, companies need inputs that they can't make in the US for production in the US and as those inputs now, the prices are higher because of the tariffs. So I think the big picture is, you know, we have yet to see sort of significant reshoring activity because of the tariffs. You know, that might still be coming. But in the meantime, you know, we're seeing manufacturers in particular struggle, and we've certainly seen a decrease in manufacturing employment.
- [08:52]
Interviewer
Maybe you could walk us through sort of the way that the president, in broad strokes, has kind of reshaped the regulatory landscape here in the last year.
- [08:59]
Nancy Cook
Sure. Well, I think, you know, like a lot of Republican presidents, he just has thought that there has been too many rules. And so he has, like really undone a lot of, you know, regulations out of EPA and a lot of energy regulations, both to encourage a lot more oil drilling and exploration, but also just roll back things like rules on pesticides or different things like that. They have really rolled back some bank regulations. You know, how much money banks need to have, like things that were put in place after the financial crisis. And so they've rolled that back to be more bank friendly.
- [09:32]
Interviewer
Immigration mark, trade a big policy party for the president. Immigration is another one. And you scour the data as it comes out. What do we know about how President Trump's immigration policy is impacting the economy?
- [09:45]
Mark Nikkei
There's no question that, you know, his immigration policy has had an impact on the economy, if nothing else, because, you know, we've essentially shut down the southern border. I mean, he succeed, succeeded in his promise in the campaign to close the border. You know, we've seen almost no immigration from the southern border, at least statistics would suggest that. But we've also seen Trump go after legal immigration. There's a big fight right now over Trump's proposal to charge $100,000 fee for H1B visas, which are the sort of the work visas that tech companies in particular use to hire skilled foreign workers that they believe they need. The U.S. chamber has sued to, and it's in the courts right now. But we've just seen a broad sort of reaction to companies that depend on migrant labor, I'm thinking like construction, agricultural sectors, and a real concern that there'll be a shortage of workers in these industries because of the curtailing of both legal and illegal immigration.
- [10:47]
Interviewer
Certainly the relationship between the president and the Federal Reserve is one that stands out. And there have been presidents in the past who've disagreed with Fed chairpersons and their decisions. But this is something unique. The level of public criticism that we've seen, denigration, both of the Fed chair and the institution itself, intimidation through the courts. How far are we mark from what that relationship between the White House and the Fed was like under previous administrations?
- [11:12]
Mark Nikkei
I mean, it's been sort of nonstop attacks on Jerome Powell in particular for, you know, not lowering interest rates fast enough for the president's view. And it's completely upended, you know, the relationship that we've come used to between a presidential administration and the Federal Reserve and sort of this long held idea, particularly since Richard Nixon, that the Fed should have independence and that the U.S. economy benefits when the Fed is allowed to make decisions about interest rates and monetary policy separate from and independent from executive actions and executive authorities that are more interested in maybe the political outcomes and the economic impacts.
- [11:56]
David Gueret
These concerns about the Fed's independence have caused the dollar to weaken, raising questions about its role as the world's reserve currency. And another relationship Trump has changed is the one between the US Government and private companies. It's taken an equity stake in intel and made a revenue sharing agreement with Nvidia. Nancy, I'm sure that you have spoken to traditional Republicans, as I have, who just express astonishment that this is the direction the Republican Party is going in now. I mean, suffice to say this is a sea change when it comes to Republican Party politics.
- [12:28]
Nancy Cook
It has been a remarkable moment, sort of seeing the US Government take a stake in intel, for instance. But Trump, the thing about him is he always wants a deal on the economy. And so what has happened is these CEOs have gone in and, you know, he's managed to take stakes in the companies. Now, the argument that many people in his administration make is he's taking stakes in companies that are critical to national security, so like critical minerals or chip makers. But it is just so interesting because it's also really this democratic idea of the government should be more involved in controlling things. And it's really not something that traditional Republicans have thought of, but it has become a really key part of the Trump agenda. And I'm really curious just to see what that looks like at the end of three years. What companies does the US Government partially own at the end of the four year Trump term? And is that something that sticks beyond him? If it's President, J.D. vance or Marco Rubin, Rubio is running for president. What do they say about that? Is that really part of the Republican idea at this point for the economy?
- [13:30]
David Gueret
We dig into that question after the break.
- [13:36]
Public.com Announcer
Support for the show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public.
- [14:27]
Mark Nikkei
Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com disclosures so.
- [14:46]
Okta Announcer
Have you heard the story about the prescription plan? With savings automatically built in, it's where a family of any size can feel confident the cost of their medication won't hold them back. Go to CMK Co Stories to learn how CVS Caremark helps members save just by being members. That's CMK Co Stories. These days it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise. With Okta, you'll turn risk into opportunity. Secure every agent. Secure any agent. Okta secures. AI.
- [15:47]
David Gueret
Presidents all leave their mark on the country, some more than others. A new president may try to undo the signature policies of his predecessor or not. President Biden, for example, did not reverse the tariffs on China that President Trump put in place during his first term. So to understand the potential staying power of the big economic changes Trump pursued last year, I asked Bloomberg's Nancy Cook and Mark Nikkei how difficult it might be for future administrations to reverse them. Take, for example, the tax cuts in Trump's one big beautiful bill, that big tax and spending bill.
- [16:21]
Mark Nikkei
The Trump administration is really counting on big economic boost from that bill in 2026, from both the continuation of the tax cuts that were enacted in his first term and Congress didn't change in the interim. Also, those were augmented. You know, we had the no tax on tips and no tax on overtime, and the administration's counting on, you know, a big boost from that. We've seen estimates of $30 billion to $100 billion in additional refunds for consumers as a result of these tax cuts. But also there's business tax provisions in that one big beautiful bill, you know, allowing businesses to fully expense capital investments, for example. And the expectation is that we're going to see a big jump in capital expenditures from companies as a result of these provisions in 2026. So the combination of the consumer tax breaks and the business tax breaks in the one big beautiful bill, I think we're going to see play out in 2026. And that probably will go a long way toward determining whether these breaks stay in effect with the next administrations or if there's any kind of adjustments made as a result.
- [17:30]
Nancy Cook
The Republican lawmakers, I would say, on most economic issues really haven't protested. It was interesting covering the tax bill and that moving through the Hill, because there was. Trump did have one idea at one point where he wanted to raise taxes on millionaires. It was a populist idea, and Republican lawmakers really put their foot down there. And that's one of the only instances I can think of where they really told him no, not publicly, but privately. There was a lot of discussion between the Hill and the White House.
- [18:00]
Interviewer
Mark. It's all wrapped up in this issue of affordability, which is something the president talked a lot about on the campaign trail and has been more reluctant to talk about in recent speeches. He claims he's made a lot of inroads when it comes to affordability. As you survey the economic landscape, has he.
- [18:15]
Mark Nikkei
I think you can point more to things that he's done that have added costs to products or even inflation, particularly with trade, than you can to things that he's done to lower costs. I mean, I think that's one of the reasons you're seeing President Trump roll out these proposals, like, you know, banning corporate ownership of single family homes or capping credit card fees at 10% a year. I think it's sort of an acknowledgement that at least he needs to be seen as doing more to address affordability. But, you know, we continue to see high prices for groceries, beef, and other products. That I think is what's really driving, you know, the depressed consumer sentiment surveys we're seeing where, you know, folks just don't feel good about the cost of living or the direction of the economy.
- [19:05]
Interviewer
The Trump administration is engaged in this kind of bold experiment to change the global economy, change America's place in the world. We've seen global supply chain shift, relationships change. That times has been in conflict with President Trump's desire to tackle inflation and affordability concerns.
- [19:20]
David Gueret
What do folks you talk to say.
- [19:22]
Interviewer
About how long this is likely to stay in place? Yes, during this administration, but after President Trump leaves office?
- [19:29]
Nancy Cook
I mean, I think that's just an open question. One of the interesting things that I see happening in the beginning of Trump's second year is that he is really willing to break Republican orthodoxy and go after populist economic ideas. He called Elizabeth Warren earlier this week.
- [19:47]
Interviewer
And texted with Mayor Mamdani, yeah, he.
- [19:50]
Nancy Cook
Didn'T do it, but he thought about raising taxes on millionaires. He has thought about sort of capping credit card interest payments. And so the thing that I am looking for for the next three is Trump already really changed Republicans approach to trade, let's say, and now they think about trade totally differently. And Democrats left some of those policies in place. And so how much does Trump's populist agenda, which is sometimes populous and sometimes actually not, how much does that sort of end up changing the whole conversation about economic policy? Because when I first came to Washington in 2011, you know, people of both parties were concerned about, you know, taxes, but they were also really concerned about the deficit. And now it's like the things that the real policy issues that I see in Washington as being really the kind of anchors of an economic agenda are the cost of housing, what's going to happen with AI, what's going to happen with electricity bills. You know, things shift based on what people are concerned about. And so for me, I'm just really curious to see how Republicans take sort of some of these populist threads that Trump appears really open to. How did how do they deal with them moving forward? Republicans are not really the party of lower taxes and less regulation anymore. They still like those things, but there's a lot of different things in the mix, and it's unclear to me what the party will take as their platform moving forward. And I think that's going to be one of the most interesting things to watch over the next three years.
- [21:21]
Okta Announcer
These days it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent, secure any agent. Okta secures AI.
- [21:53]
Amy Morris
You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris.
- [21:58]
Karen Moscow
And I'm Karen Moscow here to tell you about our new On Demand News report delivered right to your podcast feed. Bloomberg News now is a short 5 minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed.
- [22:14]
Amy Morris
Yes, there are other products like this from a variety of news organizations, but they usually rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes that can only be heard on Bloomberg News now.
- [22:30]
Karen Moscow
And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes. So you're always getting the latest stories and developments.
- [22:39]
Amy Morris
Get the reporting and the context from Bloomberg's 3,000 journalists and analysts were all over the world. Listen to the latest from Bloomberg News now on Apple, Spotify or anywhere you listen.