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The President announcing the new tariffs on an additional eighteen billion dollars of Chinese imports. The announcement from the Rose Garden with evs in focus here the rate increasing fourfold, as Bloomberg reported two days ago, twenty five percent to one hundred. You've got lithium ion EV batteries on here, solar panels doubling to fifty percent, Tariffs on semiconductors doubling to fifty percent as well, all in effect by the
year twenty twenty five. We're lucky to have the in site of Gene Sperling, senior economic advisor to the President, who has advised many presidents on the economy, and he joins us now live here on Bloomberg. Gene, it's great to have you back. We just heard the president's remarks. Our listeners and viewers had a chance to listen and watch live. Is Joe Biden not a free markets guy anymore.
The President is a fair competition markets guy. That implies to how he looks at domestic market competition. He wants fair competition. That same principle applies internationally. We want nothing more than for countries like China, particularly China, to be a fair competitor where we are all playing by the same rules. We all know what happens though, with China's economic strategy. They decide that instead of dealing with their own demand internally, that they're going to grow by exporting
at all costs. And what that really means is exporting at unrealistically overly subsidized costs that help their export numbers at the expense of American workers in American industry. And we've seen this movie before. We don't want to see it again now. The President is not coming at this
just with a tariff approach. From the campaign when he had his Build Back Better strategy, there's been a focus exactly on this, the strategic manufacturing, jobs and industries of the future, ensuring that we both have a strategy to encourage investment. And it is remarkable to see over eight hundred billion of new private sector investment coming in in these critical sectors, but we know what could throw that off is to be flooded with Chinese imports on those
same areas. So this is a very strategic hip, but it is one that is designed to ensure and encourage and fair competition and make clear you're not going to do this incredible over subsidization at times, trying to create more products than exist than there is demand in the whole world, and to do stuff that is so below market costs that it is your effort to grow at our expense.
Okay, you just said a lot there, Gene. I'm just trying to get a sense of what's motivating the president here, having seen the surgical approach on certain items as opposed to the across the board approach that we saw from the Trump administration, and I know that the administration has been trying to highlight that difference, but we didn't see anything go down, and having seen all of the Trump tariffs remain in place, it sounds like he was on the right track.
There just couldn't be a greater difference. And first of all, let's even just look at the results. Our trade deficit with China is right now, the lowest it's been in a decade, lower than any of the four years under the previous administration. There was no strategy on semi to actually revive a semiconductor industry in the United States to compete for electric vehicle jobs or electric batteries, no strategy
at all. Now what you've seen is the most aggressive legislation that is widely praised by the US private sector and labor as well for encouraging more jobs here. So the President, as part of that integrated strategy that he has been working on every day since he's been here, is saying, we know what could disrupt our effort to increase supply and to make sure our companies have a chance to compete fairly and to sell our products domestically and externally, is for to engage as they continue have
have in oversubsidization of key manufacturing sectors. This is not just our opinion, This is Europe's opinion. It is the opinion of even major other major of the bricks others, well you know which ones that would that China is not playing by the rules and that they are seeking to export their way out of their challenges at the
expense of others. So this is really part of that strategy. Now, going across the board in areas that are not essential, where we're not trying to build supply where they could actually hurt production here or hurt families is not part
of that kind of strategic approach. And if we had done nothing till now, if there's been no Chips Act, if there's been no Infrastructure bill, if there's been no IRA bill to urge electric vehicles and green manufacturing here, you could say, oh my god, this is just a one part, you know, off the cuff trade strategy.
It's not.
This has been part of an integrated strategy that has shown we can induce the private sector to create supply and manufacturing here, and manufacturing, as we know, punches above its weight in terms of private sector R and D innovation patents and the spread of suppliers and strong supply chain that we saw how much we were hurt by not having during the pandemic. And we are not going to let be disrupted with unfair trade practices from China.
If they want to play by the rules, bring it on, let's compete.
Okay.
I want to talk about briefly our relationship with China and the reaction. Gene Spurling, the President said just now in the Rose Garden that China imports of US goods, to your point on the trade balance barely budged under the trade deal. But I see now the reaction from Beijing resolutely opposes the president's decision, sees the move as political manipulation. What's the drama for then, if we weren't buying China evs to begin with, and what does this mean for our relationship?
Well, I think it's very clear, and the President's been very clear. We're not trying to provoke a trade war, We're not trying to hurt relations We're trying to have a sustainable, fair relationship where nobody seeks to strengthen their economy through unfair trade practices at the expense of others. But it really, you know, we're not talking about a
situation of little differences in small products. We're talking about almost a global consensus that China still operates on a model where they oversubsidize products to the extent sometimes where
they have more capacity than there is global demand. At that point, you just have an organized strategic effort to flood the market with cheap goods that undercut those who are trying to play by the rules, who can't possibly compete because their costs are so low, not because of innovation, not because they actually have lower costs, but because of
excessive market subsidization. So the President is by having a targeted strategy making clear this is not just an across the board slap at your face that would also hurt
American consumers and raise their prices. We are looking at the areas in electric vehicles, in semiconductors, in electric batteries, where we have invested in strong apply and a strong supply chain in the United States and are seeking to have an industry that can compete long into the future, where both sides are playing realistically with what their costs are going forward. So I think it sends a strong message.
It lets them know the areas where they need to play by the rules, or at least understand that we've seen this movie before of them crushing American communities and jobs with unfair subsidies, and we're not going to just watch that movie again. You have a president who's going to take strong action. This is part of a comprehensive strategy he's had for American manufacturing revival. The private sector has bought in, labor has bought in, the American public
has bought in. We're not going to sit by and let it be disrupted by China if they want to play by the rules and have fair competition. And what the President is saying is bring it on. Let's have that.
Bring it on, says Gene Sperling. Gene, I'm glad you could join us today, and I appreciate that having heard from the President on tariffs and now his economic advisor with the Griffith Observatory at his back, that's why you should be on YouTube. Gene. Thank you. We're going to play this to the panel next hour. We'll have Rick
Davis and Jeanie Shanzano with us. Also June Grasso from Bloomberg Law and Congress from Brad Sherman, the Democrat from California, will join with a lot more to talk about here on the fastest show in politics, This is Bloomberg.
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Really, it's where New York is the center of the action, and it has been for the last almost month as Donald Trump has been on criminal trial in this hush money case that continues today. But we could be nearing the endgame here is the prosecution's getting ready to finish up it's questioning of Michael Cohene as former attorney and fixer.
Yeah, the cross will be the news is what we're expecting here. Obviously he hasn't said anything yet that we haven't really heard before. But yeah, to your point, I thought lawmakers were coming back to town today. The Speaker of the House is at the courthouse, along with several
contenders for vice president. We want to get into this with June Grosso, of course, the host of Bloomberg Law, who has a beautiful distillation every evening six pm Eastern Time on Bloomberg Radio about everything that happened over the course of the day. June, it's great to have you back from world headquarters in New York. Is there any component of potential witness intimidation here? I realize anybody can come to the courthouse right but when you have some
of the highest ranking elected officials. We saw Senator Rick Scott there today, the Speaker of the House.
What's the.
Testimony supposed to key off of here? What does Michael Cohen think when he looks up and sees all these people.
Well, I'll tell you one that happened after the mid morning break. By the way, the speaker was down there, I think for about forty five minutes and left. But Michael Cohen, after the mid morning break, was in the middle of his testimony, and according to our reporters who were there, a number of these Republican leaders walked into the courtroom at the time when Michael Cohen was testifying so late, and they walked right down the middle of
the court asle and went to their seat. You know, it is a little bit intimidating, I think for witnesses who are on the stand now. Michael Cohen may be used to it, but other witnesses it would be intimidating. For another interesting thing is the gag order. You know, these lawmakers came because Donald Trump is looking to have his family's not there. One of his sons is there on and off, but he's looking to have this support
from his backers, But did he tell them anything? Did he tell them anything about what to say about the witnesses? If so, that's a violation of the gag order tech technically, So, I mean there are a lot of It's very unusual, and if the jurors know who they are, I wonder how they view this, Maybe not in the way that Donald Trump wants them to view it as oh, this is support, but more as oh, this is intimidation, and what's going on here? It's really unusual.
Well, it's an interesting point on the gag order, Jude, because of course that Barstrump from speaking about certain witnesses, including Michael Cohen, but also members of the judges family, including his daughter and House speaker Mike Johnson specifically called out Judge Murshawn's daughter and her TISA to Democratic fundraising today, which I thought was interesting when it comes to the actual testimony though that we are hearing from Michael Cohen
and the questions we have gotten from the prosecution to what extent is their line of questioning today basically trying to set up to hedge against what could come in the cross examination when the defense gets its turn.
Well that's how they ended the direct examination. The last thing they did was go through, you know, Michael Cohen's various convictions and the lies that he told to Banks and Congress, et cetera. And the final question was one of those do you regret this? And he apparently his voice choked up and he talked about regretting all he'd done and he lost his moral compass, and they ended on that. So they did try to sort of what they call it, take the sting out of what's definitely
coming up on the cross examination. But you know, he is a troublesome, really flawed star witness because he not only is saying that you know, he lied about at the times before Congress, but he's also on the stand saying and they're asking him, what about this document?
Is that false?
Yes? Did you lie about that?
Yes?
So his testimony itself is filled with I lied, I lied, I lied, but now you believe me. And so the prosecution is hoping that the backup that they have with the documents is going to make the jury, you know,
comfortable believing him. I think one of the best documents they've had so far was introduced yesterday afternoon, and it was a slip from the bank saying that he had paid the one hundred and thirty thousand dollars to the Stormy Daniel's lawyer, and there was handwriting on it from Weiselberg, the CFO, and it was the formula for how he
was going to be paid. And the interesting thing was that it took account for the fact that this is a little mathematical I'm not gonna get too mathematical, but if this is a payment for his services, then it would be taxed. If it was a payment reimbursement, it wouldn't be taxed. So they figured out what the taxes would be. They added another fifty percent onto it so that the taxes would be taken care of, and they sort of they say it they grossed it up, is
the term that they used. So that's sort of interesting, and I think so very supportive of the fact that, you know, Wesseelberg did the formula here. And we've heard time and time again that Trump knew, you know, every dime that went out in his company. So I thought that was really good testimony.
All right.
June Grosso, the host of Bloomberg Law, breaking down another day of dramatic testimony in the Trump hush money case in New York, the trial that is, and of course it's not yet over. They are just on lunch break right now, June, thank you so much. And of course Joe Well, Donald Trump, as he campaigns for the presidency, wants to be elected in November, of course, has these
legal headaches to deal with. President Biden has many headaches as well, not in the legal arena, but certainly in terms of geopolitics, as he has faced a lot of criticism over his handling of Israel and its conflict with a Moss most recently the decision to withhold sending large bombs to Israel because of concern over how they could be used in RAFA.
Yeah, count the ways, I mean, from geopolitics to border politics to the economy. This is a candidate and a president spinning a lot of plates right now, as we saw him try to employ the Rose Garden strategy earlier announcing some new tariffs on China. But fascinating to see they're spending so many plates that we forget some of
them sometimes. Kaylie is the Secretary of State touches down in Kiev with all the shuttle diplomacy throughout the Middle East, Ukraine is in the focus at the White House today.
Yeah, the first time we've seen the Secretary there since the actual supplemental aid package passed Congress after months and months of efforts, finally Ukraine getting more military assistance that needed from the US. The question is how quickly does it make a difference in that conflict, especially when we're seeing another hot conflict in the Middle East as well. And it's on that note we want to turn now to Maara Rudman. She is the University of Virginia professor
at the Miller Center. She's also former State Department Deputy Special Envoy for Middle East Peace and former Deputy National Security Advisor. Professor, thank you so much for being here on Bloomberg Television and Radio. If we could first begin in the Middle East, as the Prime Minister of Cutter was actually speaking at the Cutter Economic Forum that Bloomberg is helping host earlier today, suggesting that right now cease fire talks between Israel and AMMA are essentially at a
stale meat. If it doesn't happen in the near immediate future, is it ever going to.
Well, Yes, the hope will continue and the work must continue on getting to a pause in the fighting, in getting to Israel to focus more strategically on their goals and the best ability to defend themselves and getting hostages out and humanitarian aid in These are all the reasons why it's really critical to maximize pressure and focus on getting to a cease fire agreement.
So, with that said, how much would a ceasefire depend on hostages being released? Knowing that not everyone believes they are all alive, and we keep hearing reports that Hamas cannot identify the location of all of the hostages with whom they are dealing, how does this play out in the end.
So part of a ceasefire is very much dependent on getting hostages out, and that is badly at this point, whether it's bodies or whoever is remaining alive. The hostages have obviously been held under horrific circumstances, were taken into Gaza under even more horrific circumstances, and it is critical that they be returned they or sadly their bodies in terms of what Hamas knows or doesn't know about where
they are. That was certainly brought out early in the immediate post effects of October seventh, given the number of different groups associated with Hamas that had a role in taking those hostages in. I think it has less credibility at this point since it is so clear that Yahya Sinhoar, who is the military commander of Hamas in Gaza, who orchestrated this entire October seventh attack and the aftermath, is
a guy who is very much in control. So I think it begs credibility at this point that they don't know exactly where most, if not all, of the hostages are.
It's interesting and I wonder if any of them maybe in Rafa, where more than a million Palestudians had sought refuge and where the US policy is really coming to most, or a conflict perhaps with what Israel would like to do, as the US would not like to see a major ground invasion of Rafa, and yet Israel is already making incremental moves in that city. In particular, the UN has said within the last twenty four hours that some four hundred and fifty thousand civilians have already fled Rafa in
the last week. Do they have anywhere safe to go? For all of the administration saying we just want to make sure there is a plan in place to protect civilian life in Rafa, while Israel is trying to achieve its objectives of eradicating Hamas, getting those last remaining battalions they're taken care of. I just wonder if it really is possible for Israel to do both.
Well.
Kayley. The question you raised is a question being raised, and it has been continuously raised by the US administration at the most senior levels, and also reportedly by Israel military, Israel's military leaders who are increasingly coming out more publicly and questioning the ways in which Prime Mister Neyahu has been directing this effort. So there's a concern certainly about
where the hostages are. It is almost certain that they're in tunnels that many, many, many tunnels that are deep under Gaza, and so whether they're in Rafa or in communits, they're almost certainly surrounding and being used as human shields for Yaya Sinwar, the military commander of Hamas, and probably for many other Hamas fighters. To be clear, much of Hamas the military units are deep underground in these tunnels, they do not. Hamas does not allow the many Palestinian
innocence that privilege. In other words, they are using Palestinian innocence very much as fodder in a horrible way. And those folks are all on the ground, and as you say, there are no real safe places in Gaza at this point. And that's part of the point that National Security Advisor Jake Sullivan made really clearly just recently in saying that the United States has yet to see any kind of credible plan by Israel on how to protect Palestinians above ground in Gaza.
Lur, I know you were in Ukraine just last month, in Kiev where the Secretary of State is today, knowing that the money has been passed, the weapons are on the way. What was the purpose of this visit by Anthony Blincoln if not only to send a message to Vladimir Putin?
So in fact, I think that Secretary Blincoln was sending a message both to Vladimir Putin and frankly to the people of Ukraine as well. He and President Zelenski have
a very good and strong relationship. Ukrainians have been quite concerned about the degree of US continued commitment to their very real fight, to their struggle against Russia, given how long it has taken the United States, frankly because of skirmishes within the Republican Party in Congress how long it had taken the United States to get that vitally needed
assistance to Ukraine. So I believe what Tony Blnkoln was doing was spending a message was in a very real way, showing the people of Ukraine as well as President Zelensky the degree of US commitment and offering some reassurance, as Jake Sullivan did on his visit back. I believe in the end of March that usaid some of it has arrived, more is coming, and it will very much help Ukraine in the very significant challenges they are facing down from Russia.
And finally Mara. In our final minute with you, obviously, while the US has provided aid to Ukraine, the US also has put essentially limits on what it would like Ukraine to do with that aid, including not doing anything offensively into Russian territory for Ukraine to win this war. Are we going to have to see a tweak on the margin to administration policy on that front?
Two, Kayle, I think that's a very good way of describing it in terms of the language you just used about a tweak on the margins. I do think it's important that the United States have the most expansive possible view of allowing Ukraine to fight this fight. The United States is quite fortunate that we are the United States and Americans are not on the ground having to defend
against Russia. We need to make sure that Ukraine has every ability to do so and to prevent the further spread of Russian aggression in Europe.
Laura, it's great to have you and we appreciate the time today on balance of power. MARAA Rudman, University of Virginia professor, former State Department Deputy Special Envoy from Middle East Peace, spends a good deal of time in the National security space in your insights are important to us. I'm Joe Matthew alongside Kaylee Lines in Washington. Kaylie, we
have to play this to the panel. We haven't heard from Rick and Genie yet, and we have a lot to cover today from both spheres and politics and both ends of Pennsylvania Avenue.
Indeed, and up in New York where we're seeing the veepsteaks take things on the road all the way to New York City outside the courthouse.
The optics are amazing today and we'll have more on all of this next with our signature panel on the fastest show in politics, This is Bloomberg.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on Appo, car Play, and then roud Otto with the Bloomberg Business app.
Listen on demand wherever you get your podcasts, or watch us live on YouTube.
I'm Kaylee Lines alongside Joe Matthew here in Washington, where we have had our eyes on New York on the ongoing hush money trial of former President Donald Trump. But we have another legal development that it impacts potentially the current president, or at least his family, specifically his son Hunter Biden. According to the Associated Press, a judge has rejected Hunter Biden's bid to delay his federal gun trial. That trial is now going to begin Joe next month
in Delaware. Again, this is the son of the president, it's not the president himself, but still this could be a headache for Joe Biden as to campaigns for reelection. The legal issues certainly do not begin an end with the Republican presumptive nominee.
Well, that's for sure, And obviously the president has had to deal with this more than once although at the same time, we've seen efforts in Congress to try to vilify what they refer to as the Biden crime family kind of fall flat to the point where it doesn't really appear that the impeachment preceding or the impeachment inquiry that could lead to a proceeding is underwan any longer. It's a lot of gray there right now with James Comber and his Oversight Committee.
Yeah, so I guess we'll have to wait and see if we get developments out of Congress or any further announcements in regarding impeachment from the House Speaker Mike Johnson. But he wasn't actually even on Capitol Hill in Washington, d C. This morning. He was up in New York at the courthouse where Donald Trump is today. And this is what the Speaker had to say outside.
I'm an attorney, I'm a former litigator myself. I am disgusted by what is happening here, what is being done here to our entire system of justice overall. The people are losing faith right now in this country, in our institutions.
Let's get into it with our signature panel. Rick Davis and Genie Shanzano join us on balance of power for their take on this and a few other stories happening today. Great to see both of you here, Rick. These are politically motivated trials and they are a disgrace, said the Speaker of the House. You can weigh in on the value of this entourage, but I guess the point here is he can say things Donald Trump cannot. Is this a good strategy?
Well, it certainly improves upon the strategy. I mean, when this trial got started, Donald Trump was basically alone in that courtroom and very few people as family coming in every now and then he started complaining about that, and I think limited himself to what he was starting to say about judges and what not to not trigger any
more fines for contempt. So yeah, now it seems like this is all part of a choreograph campaign to interview vice presidential candidates, to show party unity around Donald Trump, and to undermine the legal process that's going on in New York. I came up today to New York just to see if I could get on the list of VP candidates. I guess that's probably not going to happen, But the reality is it's going to be crowded up here.
Indeed, well of the VP candidates who are at the courthouse alongside Mike Johnson today. We're talking specifically about North Dakota Governor Doug Burgham, the Vakramswami, former presidential candidate himself, who was running against Trump at one point. In Florida Congressman Byron Donalds, who it's also been floated. But Mike Johnson has a genie. He's not in the running for VEEP. Why did he feel the need to go? Brick was
just speaking to the strategy here for Donald Trump. What's the strategy for Mike Johnson.
He's got to stay very close to Donald Trump because that's why he has his job.
After all.
That's why Donald Trump decided not to support Marjorie Taylor Green for the moment in her quest to vacate him. But I have to tell you I find this all a little depressing and sad for Donald Trump. I mean, you can't get your family there to show you some love when you're facing thirty four felon accounts, well except for his son, and so you're getting what all of these people who are only there because they want to maintain their positions or get their positions. It's very very strange.
And you know, don't these people have anything else to do besides sitting in a New York courtroom all day, the Speaker of the House, sitting senators in the US. And you know, I would think they might be a little careful about calling out a young woman. We've heard Mike Johnson, We've heard JD. Vance attacking the judge's daughter
because she has a job. I mean, folks, look back at what happened to Rudy Giuliani and others when they attacked Ruby Freeman and her daughter one hundred and forty eight million dollars later, you think they'd be very careful of this. But nothing can get between any of them and Trump apparently at this point.
Well, while we're talking about the veepstakes here, I'm curious to get both of your reaction to what we heard from Ken Griffin Citadel, of course, talking about the weight to see who wins the veepstakes, he was asked if he had donated to the campaign.
Yet here's what he said, I have not, will you.
I'm going to wait to see who he picks as his VP candidate.
Is there anyone whom you'd like.
To see him pick as his VP candidate.
I you know, I don't. This is again like poking the bear.
Not sure which way my recommendation goes in terms of helping that person's prospects.
So he doesn't want to thumb the scale on this one, I guess, Rick. But in a serious world, I don't mean to make you smirk here, but taking a look at those folks who were actually at the courthouse and some of the others who have been to fundraisers in Palm Beach recently, do any of them appeal more to the investment crowd, well, for sure.
And I think this is what I'm hearing within the Republican donor community from people like King Griffin is I can see toward supporting Donald Trump those who haven't so far, and they're a lot if he picks the right vice president. Obviously, Doug Burgham is a good example of that. To a lesser extent, Jadie Vance, I've heard the Virginia Governor Youngkin mentioned many times how much more comfortable we would be if he had someone like Youngkin on and his VP selection.
So I do think those kinds of folks matter, and I think that's an advantage for Tim Scott. You know, he's a ranking on the Banking Committee in the United States Senate. He's had a lot of support from Wall Street and the investment community, and so I think these things are going to matter to that group as to whether or not they put their thumb on the scale. As you say, and look, I mean, you know, somebody like Ken Griffin,
He's already given sixty million dollars this cycle. I mean like he can really make a difference if they get the right candidate on that picket.
Well, and where Ken Griffin is putting a lot of his money after he initially had donated to Nicky Haley obviously hasn't donated to Donald Trump yet, is down ballot races Genie. In fact, that's where a lot of mega donors have shifted their focus who have been reluctant to support Donald Trump, including the Coke Network for example, which was also back in Niki Haley now is looking down ballot.
And on that note, we do have a pretty important primary that could help decide the composition of the United
States Senate, potentially in Maryland. Larry Hogan, the very popular former governor of Maryland, the Republican is going to be up again either David Trone or Angela also Brooks, depending on who wins that Democratic primary today, could potentially Genie the Democrat decide whether or not Republicans flip that seat, and Larry Hogan could get a seat from Maryland at West Virginia to that the Senate's gone, right.
It absolutely is. And of course Larry Hogan incredibly popular and interestingly not somebody who would probably be visiting the trial with Donald Trump because he has been a big Trump critic. But I think we are seeing in some of these down ballot races, unlike in the last midterm, Republicans are willing to go with and choose candidates who have a better shot of winning, not just because of their fealty to Donald Trump. And Larry Hogan's a perfect
example of that. You know, on the Democratic side, it's a fascinating primary because also Brooks has the support of basically the establishment in Maryland up and down the ballot. But you know, Trone has spent so much money is I'm sure you know Killy living in that area. You can't go to the DC Virginia Maryland area and not see his his ads, and so it's going to be interesting to see where Democrats go on that does the
establishment win? You know, you've got you know, a woman with a lot of support in that area, and you've got somebody who can spend his own money and basically making the case, do you want to be you know, spend the party's money we needed elsewhere, Let me spend mine. And so it's going to be fascinating to see what happens tonight.
Well, so, Rick Davis, what is worth more the endorsements of Wes Moore Senator Chris van holland Stannie Hoyer or sixty dollars in your personal bank account.
We're going to find out tonight because that's exactly what we're looking at in that Democratic primary. But I hate to burst their bubble. All of that may be for not because when I see the Kurt pulling, Larry Hogan is crushing him almost a twenty race, and I know that the popular thing is to say, oh, you know, people vote differently for governor than they do for the Senate. And generally speaking, I'd say that's probably the case, and
they'd have to be very different in this case. But he left Larry Hogan left office with a seventy seven percent approval rating. Let's not underestimate the fact that it almost if you look at the polling today, is irrelevant who wins this primary tonight. It's going to be a very stiff undertaking for Democrats to hold that seat.
All right.
Rick Davis and Jeanie Shanzano are signature political panel joining us on this primary day. Thank you so much, and Joe again, we almost forget that they're still ongoing primaries because we have a presumptive Republican and Democratic nominee for president. But there still are a lot of important ones that are for other races that we still.
Have to pay attention to.
This is a big one in Maryland, and to your point, you get this in West Virginia behind you tonight.
And we could have this decided already.
We'll find out together.
Yeah, you're listening to the Bloomberg Balance of Power podcast Ken just live weekdays at noon Eastern on Applecarplay.
And enroun Oo with the Bloomberg Business app.
You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa play Bloomberg eleven thirty.
Thanks for joining on the fastest show in politics alongside Kaylee Lines I'm Joe Matthew. As we were just discussing, Kayley, the political challenges that Israel policy has brought the Biden
campaign and the Biden White House for that matter. It's been a problem for a lot of progressive Democrats, and the withholding of at least one, maybe two shipments of weapons upset a lot of Republicans on this matter, which will point our listeners and viewers to House Resolution twelve nineteen, a messaging bill, but an important one today, Kaylee that we'll see a vote tomorrow looks like yep.
That is when the House is set to vote on this. This is essentially a bill that would force President Biden to send withheld weapons to Israel. Remember that this weapons withholding that we've seen the administration take here is offensive weapons large bombs that they have not yet sent, just paused for now because of concern over how they could
be used in RAFA. Does not actually have anything to do with the supplemental funding that Congress pass that was mostly defensive weapons, including things that would restock the Iron Dome missile defense system. But there has been a lot of consternation about this decision from the administration, and now there's going to be an attempt to put members of the House on the record choosing a side on this. One of them who is going to have to do
so is joining us now. Democratic Congressman Brad Sherman of California is with us here on Bloomberg Television and Radio. Congressman, welcome back. Thank you so much for joining us on Balance of Power. Will you be voting yes to this bill tomorrow?
I will probably vote no.
I wish the Republicans had worked with Democrats on a bipartisan resolution that we could vote yes on, because we should be shipping those weaponsons and more. Much more important than the bombs that are getting on the discussion is the jay dams. Those are kits that turn smart bombs dumb bombs into smart bombs. And to criticize Israel for not acting with precision while depriving them of the kits that make the bombs act precisely.
Is just the wrong message.
The problem with the Republican resolution is that it not only deals with these immediate concerns, but makes Israel permanently exempt from.
The lay He review.
That's a review to see whether the country's receiving our weapons or using them. According to international standards and our standards.
Israel passes that review.
Israel is doing a better job, and it's a very difficult job, but a better job than any other military in waging urban warfare with that while seeking to minimize civilian casualties. Now, it's a very hard thing to do, and there have been civilian casualties. But to exempt his real permanently from the standard is like me going to the high school and telling them, don't make my kids take the test. No, my kids are smart. I want them to take the test, and I know they're going
to pass. And what we should do is have this standard apply and show that Israel is in fact complying with international law and our own standards.
To exempt them.
Feeds into this worldwide narrative that Israel is not seeking to minimize civilian casualties. Now, given that Hamas their whole strategy is to surround themselves with as many women and children as possible while firing rockets at Israel, that makes it difficult on Israel, but that is part of the standard that you used to review, and Israel should not be exempt.
Israel, though, however, passes the standards.
The report by the State Department, Congressman, thanks for being with us today. That Anthony Blinken submitted last week does bring some concerns accusing Israeli forces of potentially violating international humanitarian law. Have you told the President how you feel about this?
I have told the State Department that I don't think that they phrased things correctly in that report. But the fact is that potentially violate everybody potentially might have violated. What the hell does that mean? But the fact is that Israel not only complies with the standards, but they have a system for reviewing their own military. Look in Vietnam, we didn't comply with all the standards, but Lieutenant Kelly went to prison because we identify and we had a system for.
Reviewing the actions of our individual soldiers.
Israel has that as well. They're conducting a number of of investigations. So according to Israel, it is possible that some of their soldiers acted wrongful, And according to America, it is possible that some Israeli soldiers have acted wrongful, But that.
The Leahy standard isn't.
That you cut off weapons to an ally because some soldiers may have acted wrongful, you inspect, you want to see the top echelons of any allied government implementing standards to hold their soldiers accountable. Israel does that, and that's why the ratio of civilian to mill it to terrorist deaths in Gaza is actually considerably better.
Than what we saw in Moses and Fallujah. And we've got.
A very moral and very capable on military force and that's what we.
Used in a wrap.
Well, Congressman, it's great to hear your perspective on issue of Israel's ongoing war with a mosque. Given your seat on the House Foreign Affairs Committee, but you also have a seat on another committee, which we'll be focusing on here at Bloomberg Tomorrow. House Financial Services will have the prudential regulators in front of you and your colleagues in a hearing. I'm sure there will be some questions for Michael Barr of the FED over the Basil three endgame
and what that's looking like. But I'm imagining, especially your Republican colleagues, will have some very tough questions from Marty Grunberg of the FDIC. After that scathing third party report came out about the workplace culture at the FDIC, there have been a lot of calls serve for the chair to resign, would that at least go some distance to solving what is described as a deep rooted problem.
I think we have to deal with the atmosphere at FDIC. They have over six thousand employees and they deserve a better atmosphere. But as important as those six thousand employees are, every American has a state and whether of these BOSL three regulations.
Serve our economy.
Well, if we go too far one way, banks won't have the sufficient capital and we'll see a press a need or at least a claim need.
For bailouts in the future.
But if we go too far the other way, banks won't lend, particularly to small business. They'll just invest in treasury bills, and that will leave a small business without a way to get the funds that they need. In addition, there are individual problems with the proposed regulations, provisions that don't treat appropriately energy efficiency standards and clean energy clean energy tax credits, which are an asset that banks should
get credit for. There is a language in Basel three that will not give credit for mortgage insurance, so banks will be reluctant to lend the first time home buyers, even if they have mortgage insurance as a practical matter, insulates the bank from risk.
We've got a host.
Of other problems where these regulations seem to push the bank stared investing in bonds on Wall Street and push.
Them away from making loans to local.
Businesses on Main Street. That's the exact opposite of what we need. It's local businesses that need the capital. Wall Street's doon a fine job providing money to publicly traded corporation.
Congress, and it's great to have you back, Brad Sherman, the Democrat from California, walking us through a couple of issues today. Thanks for joining us today on Bloomberg. I'm Joe Matthew alongside Kaylie Liones here on Bloomberg TV and Radio. And thanks for joining us on Balance of Power. We heard from the President a short time ago addressing the nation from the Rose Garden, where he made good on
expectations to raise tariffs on certain China imports. If you've been with us here on Bloomberg TV and Radio or on its terminally, you saw this coming. Evs, solar panels, batteries, semiconductors all on the list. Kaylee, this is market moving stuff coming from the White House today, and I guess the President's trying to encroach on one of Donald Trump's lanes here.
Yeah.
Donald Trump, of course, has proposed something much more sweeping, sixty percent blanket tariffs on every import coming from China, whereas the administration here is perhaps being more targeted. The question, Joe, is to what extent are the symbolic and to what extent will they actually have an impact considering existing tariffs are already in place for a number of these goods, essentially boxing Chinese products out of the US market.
All Right, this is the type of thing we need Jenny Welch to help us with. That's why she's at Bloomberg of course, economist geoeconomists in our geopolitical division at Bloomberg Economics. It's great to see Jenny welcome back. This is something that does smack of Donald Trump. But the President also said in the Rose Garden that we weren't really getting any imports from China out of our trade deals anyway. Does this change anything?
So?
I think what this will change is it's particularly the specific sectors. As you noted, this is a very targeted move to target the industries that President Biden has made a lot of investments in and protect those investments so that they can be the industries of the future, as he calls them. In terms of the macro impact on
US China trade, it's pretty small. The macro impact on China's economy is also small, But the signal it sends about Washington's interests and commitment to competing in these industries is major for Beijing.
Well, so what signal will Beijing send in response? Already, their Ministry of Commerce has essentially said that they are not in favor of this, They view it as a political move. Should we expect retaliatory TIET tariffs on US goods going to China in response?
Our expectation is that Beijing's response is likely to be more in the symbolic category of things for a few reasons. One, again, the impact on China's economy and on US China trade is relatively targeted. It's relatively modest. Second, China is probably where the fact that the EU is watching all of this very closely, and it could factor into the EU's own pending decisions about how it approaches Chinese goods like evs, And Third, retaliation bears some risk and harm to China
and China's economy. We saw during the original trade war that China actually downshifted some of its retaliatory tariffs to avoid further harm to China's economy, which is now facing even greater headwinds than it was back then.
Political manipulation, I think, is how Beijing described this when it was at least anticipated. Jenny, then what's the end results with our relationship? Having just seen Anthony Blinkn and Janet Yellen in Beijing.
Well, on those trips, both Secretary Yellen and Secretary Blinkin pretty clearly signaled that the United States was concerned about overcapacity in several of these sectors.
Right.
I think this has been a pretty well telegraphed move that Beijing has been expecting.
Well telegraphed indeed, and symbolic, as we've discussed in large part, at least for some of these industries like electric vehicles, for example, you can't really buy a lot of Chinese made evs in the US as it is for some of the other sectors though, in which we've seen the tariffs go into place, including a twenty five percent tariff now on critical minerals, things like batteries and the things
the stuff that goes into them. The US needs these right to power a greener energy future, and we're still heavily reliant on China for those things. Is this going to backfire to some extent?
So I think that's the exact reason that Bide administration took these steps, as they're concerned about China's dominance of these supply chains and US reliance on them. In particular, as you mentioned critical minerials batteries, we also get the vast majority of our lithium ion batteries, which are critical to evs and other clean energy products from China. That's part of the reason why the administration is phasing some
of these terraces in. Some of them will come into play, like EV's this year after the initial comment period, but several are for twenty twenty five twenty twenty six to allow the market to adjust them, and is to create that space for more resilient, sort of diversified supply chains in these sectors.
The idea of this as a tacit endorsement of the Trump tariffs is something I brought to Gene Sperling, who joined US earlier in the broadcast one of the President's economic advisors, and he wasn't having any part of that. We do need to acknowledge all the Trump tariffs have stayed in place. They didn't bring down any of them.
Yes, no, that's absolutely right. And this is a process that folks should know began several years ago. It took a long time for it to come to culmination. It's an opportunity for Biden to put his personal stamp on the US trade approach to China and underscore what his priorities are and protect his investments. But yes, it reflects continuity in terms of concerns about the US China trade imbalance that former President Trump also shares well.
And that President Biden called out the Trump administration policy when he was actually in the Oval office, as well as the policy that Trump said he would pursue if he gets to go back there again as president. This idea of sixty percent blanket tariffs. He said that that would raise costs by a certain dollar amount for American consumers, essentially be inflationary. Will these tariffs that announced today also be inflationary or are we likely not to really feel the economic impact?
I think for these terrorists. Now it's a more modest impact for many of these goods. Again, with the exception of batteries and critical minter rules, where we do import a lot from China, we're actually not getting very much from them this space. But yes, if former President Trump were to be re elected and follow through on this pledge to enact sixty percent terrafts on all Chinese goods, that would have a significant impact on US China trade,
bring it down to olmost zero. Depending on the timeline in which he does, that could be quite inflationary, all right.
Jennifer Welsh, Bloomberg Economics, Chief geoeconomics analysts. This is the very definition of geoeconomics. Thank you so much for joining us here in Washington.
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, DC at noontime Eastern at Bloomberg dot com.