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I'm Jill, Matthew and Washington. Thanks for coming along. It's the Tuesday edition here on Bloomberg Radio, on the satellite and on YouTube. Search Bloomberg Business News Live to find our live stream. As we prepare to hear the next set of economic policy proposals from Donald Trump now that is scheduled for about half an hour from now, we're going to bring you his remarks from Savannah, Georgia when
he delivers them. As both campaigns and if you're with us your day to day, you've been seeing these ideas fleshed out kind of one bit at a time, and we're going to be adding more to the picture here. It seems, at least according to reports from the Trump campaign, when it comes to manufacturing, incentivizing foreign companies to do
business here disincentivizing American companies to do business elsewhere. When you put that together with some of the tax proposals that we've heard from Donald Trump, the picture is starting to fill out. And I'm glad to say we have an opportunity to talk with an authority about this and the campaign at large. Right now, back with us on Bloomberg for the first time since the debate, Michael Wattley, the chair of the Republican National Committee. Michael, thank you
so much for being here. I appreciate your time. I've got a lot of questions for you that we'll try to fit in in the balance of time that we have, but I appreciate your giving us some insights today as we look inside of these economic proposals. We've talked a lot about the tax proposals, for instance, a lower corporate tax rate, no tax on tips and so forth. When it comes to manufacturing, what will be here that is new today?
Well, I think that when you think about Donald Trump's overall plan, it is lower taxes and lower costs. He wants to make sure that on day one he's going to end inflationary spending. He is going to make sure that he unleashes American energy, which is going to bring all the prices down for gas, for groceries for housing. He also wants to make sure that he extends the Trump tax credits tax cuts. He also wants to make sure that there is no tax on tips, no tax
on overtime, no tax on Social Security. You flip over to Kamala Harris's proposals. What she's going to do is double down on every single one of the inflationary spending proposals that she has defended and engaged in over the course of the last four years. In fact, she was the tie breaking vote for two point five trillion dollars
worth of inflationary spending. Even President Obama's own economic advisors had said that this was going to cause inflation and prices to go through the roof, which of course it did. And on top of that, she is now proposing the largest tax hikes in American history. So there's a pretty wide divide in terms of the economic plans that these two candidates are moving forward with.
Well, I know she proudly talks about casting that tie breaking vote, and I think the hikes you're referring to would be allowing the Trump Your tax cuts to expire. But I'd love to hear specifically about what the Trump campaign and the Republican Party you are bringing forth today with reporting that is specific to manufacturing, that the campaign will lay out its pitch for foreign companies for why they should move their manufacturing operations here to the US.
In that world, would they be spared the tariffs that Donald Trump has been proposing.
Well, certainly that has been a premise of Donald Trump's tariff policies over the course of his four years in office, in the campaign since then, is that he wants to have policies that are going to encourage companies to manufacture here in a mariaera.
So that will be something new today that we'll hear about.
I certainly think that you'll have a continuation of those conversations about how we're going to get manufacturers to manufacture here in the United States instead of offshoring those jobs.
Because I understand that he's also looking at American companies and the subject that we've been hearing the last twenty four hours. The example is John Deere. Michael, would American companies face tariffs on their goods if they move jobs or manufacturing outside of the US the way we're hearing about John Deere.
I mean, certainly what the President mentioned last night, and again, you just go back to the fundamentals of his approach to tariffs and his approach to domestic manufacturing. What he did over the course of his four years in office was pull every single lever that he could to try and incentivize manufacturing here in the United States, to create those jobs here in America.
Yeah. I just in the case of a company like Deer that already has operations in South America and in Europe, would you just start tariffing them now?
I think we would have to wait and see how that gets fleshed out. And we'll wait and see what John Deere does well.
With the job market as tight as as it is. I just I'm compelled by this idea of foreign companies bringing manufacturing hubs here to the US. Would we have to import workers? Would that be part of the conversation to loosen the reins, for instance, on legal immigration to fill those jobs.
I think that we have people here in America who would like those higher paid manufacturing jobs. We've got a number of people who have been laid off of jobs, who have moved out of jobs, who are taking lower paying jobs, people who are having to have two or
even three jobs to be able to get by. The manufacturing, which was the bedrock of the American economy, is really something that President Trump has worked very hard over the course of his tenure to make sure that he's bringing into the US, and I think that we would have a workforce that would welcome those opportunities.
I want to ask you specifically about taxes as the former president has proposed, as I mentioned, to cut the corporate tax rate. We mentioned eliminating tax on tips. We can add eliminating tax on overtime and social security, also restoring the salt tax deduction. I think was the most recent edition here. Now this is Michael R. I'm supposed to ask you about these moves increasing the deficit and inflation,
and you've had this conversation. I'd rather ask you what don't economists we're talking with here on Bloomberg are groups like the Committee for Responsible Federal Budget understand What don't they get about Donald Trump's approach to tariffs and the deficit.
What we can say is that during his tenure, his first four years in office, that the economic policies that he put in place drove the American economy into a much stronger position we had more people in the workforce than ever before. We had a lower unemployment rate for women, for Blacks, for Hispanics, across every different sector. And we had a very very strong economy. That is the Trump economy. That's what we need to get back to.
Okay, So they're wrong though, right Michael. We hear about them every day here on the air. It sounds like you think they're wrong.
What we saw under Donald Trump's four years in office was a very strong, robust policy that was built on these bedrock principles.
I want to ask you about fundraising in this I know is hits close to home for you as the chair of the RNC. There's reporting today that Donald Trump has yet to appear at a major fundraising event for the NRCC. Punch Bowl reports that it's created an eight figure hole in the committee's budget. You can tell me if that's real or not, Michael. But well, the Republican National Committee end up dedicating money to the NRCC in this cycle.
What I will say is we work very closely with our friends over at the NRCC as well as the NRSEC, which is the Senate Committee, and we are going to have enough resources in this campaign to make sure that we get our message out to every American voter in all of our battleground states. We are in a fantastic position not only to win the election for the presidency, but to expand our majority in the House and be able to flip the Senate.
Early voting is underway, and I don't I'm sure you don't need me to tell you in states like Pennsylvania. Donald Trump talked about this at a rally just yesterday. Michael, let's listen to what he said. We're here today because early voting begins in Pennsylvania over the next two weeks, and we need each and every one of you to go out. Just don't take anything for granted. We have to win Pennsylvania.
Go out and make a plan to vote early, vote absentee, or vote in person on election day. Now we have this stupid stuff where you can vote forty five days early.
I wonder what the hell happens during that forty five Let's move the d's votes. You've got about aminion votes, and then let's move them. We're fixing the air conditioner in the room.
Right.
No, it's terrible. What happened the last time was disgraceful. I heard the pitch, Michael, and I think both parties agree that early voting has become a pretty important part of the strategy. What's stupid about it?
Well, look, what I'll say is this, We're going to have over half of the votes this cycle are going to be cast before election day, and the Republican Party we are working overtime right now to talk to every single one of those voters make sure that they are informed voters that are going into the polls. As the President said, it is great if you want to vote early.
It's great.
If you want to vote by mail, it's great. If you want to vote on election day. The key is you've got to make a plan, you've got to execute that plan, and you've got to deliver that.
Vote understood, so you don't think it's stupid.
What I would say is that right now we are working with the laws in all fifty state. We're going to take advantage of those laws, and we're going to encourage every single voter to take advantage of them and get their votes in.
I need to get your take on North Carolina as the former state party chair there, Michael, I'm sure you've been seeing the reports about Mark Robinson, and it's safe to say here that he has not admitted to any of this. In fact, he says that he's been hacked with some of the reports of language that he used
on a porn site. In that case, we've got a real problem here, And I wonder if you're going to demand proof from Mark Robinson or Donald Trump needs to see proof that he did not say these things to maintain his endorsement and further the extent to which he could damage Republicans' chances in North Carolina. Michael, how concerned are you?
Well, certainly, what I would say is that those comments are absolutely antithetical to Republican values. And if the Mark Robinson's going to continue in this race, then yeah, I do think that he is going to have to demonstrate to the voters of North Carolina that those are not
his words, his actions, or his values. In terms of other candidates, I think that, you know, every candidate is going to have to go out and talk to North Carolina about what the voters care about, which is the jobs, which is the economy, which is safety, which is security.
You know, Donald Trump is winning North Carolina right now because he is having a conversation with the voters about how he's going to restore our economy, he's going to rebuild our southern border, and how he's going to ensure that we are strong enough to protect American interests at home and abroad as well as those of our allies.
Don't be a stranger. It's good to see you, Michael Watley. Thank you so much for the time today on Bloomberg. He's chair of the Republican National Committee. Live here on Bloomberg Radio, I'm Joe, Matthew and Washington. This is the fastest show in politics. We'll play it to the panel next. We've said a lot this half hour, and nice to know we have Genie Schanzano and Rick Davis with us.
Our signature panel is on the way. Thanks for joining here on the radio, on the satellite, and on YouTube, where you can find us right now search Bloomberg Business News Live and we'll see you on the other side. On Bloomberg.
You're listening to the Bloomberg Balance of Power podcast. Catch Just Live weekdays at noon Eastern on Applecarplay and Enronoo 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.
On the fastest show in politics. Welcome to the Tuesday edition. Yeah it's only Tuesday, that's how much has already happened this week. With a vote set tomorrow in the House, we'll keep tabs on this. No one's talking about a shutdown, not for real, and so no countdown clocks at the moment. With a three month cr on the table, suspension of the rules, looks like this will pass. Nathan Dean told us he is not expecting a shutdown. In fact, they could get out of Dodge as early as Thursday if
they really want to. Just don't go anywhere near a national airport on Thursday. Doesn't compare with the traffic in New York, which I understand is the worst of all time. But we're talking about the economy here on this on good Day, and we're going to be hearing from Donald Trump a little bit later on about twenty minutes from night.
Right now, is scheduled to speak from Savannah, Georgia. As we were discussing with Michael Wattley, chair of the R and C, adding to the pastiche of economic proposals, just as both campaigns are doing right. It's been a little bit of a slow drip when it comes to tax incentives, tax cuts, housing incentives, in the case of today Donald Trump, manufacturing incentives. Certainly when it comes to trying to lure foreign companies to do business here and disincentivize American companies
doing business there. It's where we start our conversation with our signature panel. Rick and Genie are back together today. Rick Davis, partner at Stone Court Capital, Bloomberg Politics contributor in Geenie Shanzo, political science professor at Ionia University, Senior Democracy Fellow for the Center for the Study of the
Presidency in Congress. Great to see you both here. Genie, I'm going to give you the first swing because we just spent a good fifteen minutes with the chair of the r NC who basically indicated that economists don't get Donald Trump's approach to the economy. When you start mixing tax cuts with tariffs, you're losing the traditional economic view. Are we going to get schooled today by the former president in Savannah?
You know?
I hope?
So you know.
The reality is is that I'm all excited because it's policy week, We're supposed to hear these policy speeches, and you know, I'm listening intently to Michael Watley, and I still don't have a good sense of what Trump's manufacturing policy is going to be. And the question that comes up over and over for again is the one that you posed to him about tariffs. Are you going to exempt these companies manufacturing here from these tariffs? I didn't hear a clear answer on that. We know, and we
should know more tomorrow. What Kamala Harris says, she's talking about tax incentives, But what is Donald Trump's plan as it pertains to manufacturing in the United States? And we are still waiting. Now we may hear and I hope we do details when it comes at one o'clock and he is supposed to speak on this. But that is an enormous sort of problem. All we've heard from Trump so far is tariffs. So I'm going to increase tariffs.
I'm going to deregulate, and certainly we do need some deregulation, and I am going to cut taxes in a variety of ways. How does that benefit manufacturing in the United States? We still don't know how that's going to be pieced together, and so I'm waiting, baited breath, hoping to be schooled, but I don't know if I.
Will be by one lot Rick, We've got a view of the event in Savannah. The signage always tells you where the campaign at least wants to go, and it's pretty basic, made in the USA and fifteen percent corporate tax. If you're with us on YouTube, you see them flanking the podium, you get one on each side here. That's a pretty cohesive message. Whether he delivers it or not is another question. Whether we get into all the other
stuff here in Springfield, Ohio and the rest. He's calling it New American industrialism, and I wonder, Rick, how you think this is going to go over specifically when it comes to the manufacturing idea here, that he will invite foreign companies to do business in the US. Unclear if they'd be exempt from tariffs based on our conversation with Michael Waltley, but I think that's the direction we're going in while bringing forth penalties for the likes of John
Deere for bringing manufacturing outside of the country. This stuff rings true in states like Pennsylvania, Michigan, and Wisconsin.
Now, yeah, for sure, and I would say too. The one thing that Donald Trump has going for himself is that he was a big supporter as president. He had four years to actually do stuff, and his stuff he did led to a lot of cheap prack gas that went into building some manufacturing capability in the Midwest, as you described, So there's less test for him in the political world because he's actually done it before. Now it's
a different time, it's a different place. A lot of those jobs went away during COVID, some of them have come back, some of them haven't. So it does fit into his overall view on energy, low cost US energy, unleash the frackers. It does fit into his regime on tariffs, penalize anybody who isn't inside packs USA for bringing in
their goods, make it more expensive, harder to compete. If American manufacturers know that they can compete a lower basis than foreign competitors, they'll invest in more production, so you know, and then on top of that, a fifteen percent corporate tax cut that just makes it cheaper to do business here than virtually anywhere else in the world if your corporation. So that's of course going to bring corporations here to do this kind of work. So it's a pretty cohesive package.
It didn't take very much to really figure out. And I don't think you need a lot of detail for voters forty five days out from the election. This is what Trump actually does well, is he's really good at giving you the big picture.
There you go with the fine print becomes a little bit more of a challenged genie. I was asking Michael Walley about the inflationary impact of the tax and tariff proposals inflationary and deficit increasing, and asked him if the economists were simply wrong on this, I'm not an economist, tell me they're wrong. He wouldn't do that, but he did point back, as Rick suggests, to the first Trump administration and the growth that was seen in those four years. Is that a good enough answer?
No, I don't think so. I mean, let's just think about the federal deficit. For instance. We've got almost every economist saying, when they look at what Trump has said so far, and again this doesn't include anything he may announce today, he's going to add about three point five to six point five trillion dollars to the federal deficit. Kamala Harris too adds to the deficit. Although to a far less degree. Some people don't think this is a big problem. Many Americans do, and that is going to
be a challenge. And here is where I disagree slightly that we don't need details on these things for voters. That is true for voters who have already made up their minds, but they are fighting for undecided voters. Now we have undecided who may not vote, so we'll exclude them, but undecided voters who are going to vote. For many of them, it is not immigration or abortion at the top of their list. It's the economy, plain and simple, and they want to know what are you going to
do for me that makes my life better? And that's why we see the campaigns today focusing, you know, in these swing states on the economy, and so we do need to hear details. Certainly, those voters need to hear details, and I would say both campaigns have been less than detailed. But that's why they're coming out today. And it is a fair question to ask do your numbers add up? And in many ways, neither of these plans add up.
But when you talk about the deficit, as an example, Donald Trump clearly if he follows through, raises the deficit a heck of a lot more, and you go back to his previous time in office, he did the same. Then spending in this country is out of control. Republicans say that all the time. Where is is their concern on either side about spending. One answer to that is taxation. We've heard that from her. But he's saying he's going to lower taxes and he is going to boost manufacturing.
How So some of this has to add up before you jump on it and say, boyd, this is a really good plan. Let's take me there.
Well, and he says, drill, baby, drill. That's simply lowering energy prices, as he says, by fifty percent, will be in across the board, salve to inflation. It'll lower the cost of everything. But Rick, we need to admit here, and I think this is kind of your point when you talk big picture, that none of this matters correct. Neither campaign has really detailed how they would avoid adding
to the deficit, never mind potentially increasing inflation. At the same time, voters are not reading in on this stuff and they are not going to make up their decisions on this. Am I wrong?
Yeah, parks on both their houses. You're absolutely right. These are the two biggest free spe as candidates in history of American politics. They're just inventing ways of making it appear that they have an unlimited checkbook that they can just keep writing to benefit various groups that they need to win the presidential election. And I really haven't seen it done on this grand a scale as Genie says.
I mean, they're both you know, basically spending over for trillion dollars above what the country can actually generate in revenue, and they're being very disingenuous about it. But you know, pok's onto voters too. I don't see anybody punishing these guys, right. There used to be a punishment for overspending. There used to be voters who said, well, I'm not going to go for that, But they seem to be giving them
a break. And maybe Genie's right, Maybe there's a couple of thousand in Michigan who are still not made up their mind, who are like sitting there going wow, if I had more details about the inflationary effects of you know, of tariffs, I could make a more informed decision. But they're not going to get it, So make your mind up. Go vote early and up.
Wow, this is the most honest conversation you're going to hear about this all day. I have to be honest that the take from Erica Yorke at the Tax Foundation set at all. Jeanie, this was out of the post, the Washington Post this morning. Principles of sound tax policy economics. That is no longer in the driver's seat. Politics is in the driver's seat. That's why we're seeing carve outs and things that sound good on the campaign trail. Is that not true?
It's one thousand percent true. You know. It is the oporization of politics. You know, you get this, You get this, you get this, don't worry about how we're going to pay for that. Don't worry your pretty little head about that. We'll take care of it later. But it is not enough, at least from my perspective, for anyone to say that this doesn't matter because voters don't think about it. If
they're not. To Rick's point, they should be. We all should be, because our kids and our grandkids are going to pay the price for this, and so we should, as voters, demand more. That's why you were asking him those tough questions, Joe, because you're demanding more, and I am going to hold out hope we hear more from
Trump and Harris today, Trump tomorrow, Harris. You know, I don't know if we will, but if we don't, that is a problem for all of us because we have a system in which spending is out of control and we are not hearing solid plans to address that, and that is something we should be ball demanding.
It's a great story on the terminal from Gregory Cordy, Nancy Cook, and Darrell Dillard. Trump dangles so many tax breaks even some advisors are confused. I only have a minute left. Rick. There were a couple of moments when Michael Watley was kind of waiting to hear from Donald Trump on some of these issues, specifically involving tariffs and manufacturing today. Does the campaign know exactly what he's going to say?
You know, well, they know what's written in the speech, so yes, the policy prescriptions are there in black and white. And there's a reason they don't actually circulate his speeches in advance because they actually don't know what he's going to say. You may leave it all out and start talking about, you know, no taxes on tips and things like that that he kind of likes because he sounds good.
But yeah, I don't know if we know what's going to come out of this, but it will be finance heavy, less on strategic industries that need to be supported and things like that. I think, less manufacturing, more beaten up on the FED.
Okay, it's a schedule to start five minutes from now. Of course, whenever it begins, we'll bring you just Savannah Georgia to hear from Donald Trump, and we'll have analysis from Rick Davis and Jeanie Shanzano on the other side. That's just our first hour. We're just getting started. Kaylee Lines will join the conversation as we welcome our global TV audience. Next to Balance of Power.
Right here on Bloomberg, you're listening to the Bloomberg Balance of Power podcast. Asked Catch Just Live weekdays at noon Eastern on Appo, car Play and then Roud Otto with the Bloomberg Business at Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Donald Trump still speaking in Savannah Georgia's speech about the economy and manufacturing specifically, although clearly it has wandered into some other subject areas. But the takeaway from President Trump. He says that the US will have a manufacturing boom and that a lot of that will be driven by taxation policy and tariff policy. He outlined in part during his remarks that companies that make their products in America will have the lowest taxes, the lowest energy costs, in
the lowest regulatory burden, but only if they're made an America. Joe, he said, you also have to hire American workers for
the job, and if you don't, you'll face tariffs. He argued in part in these words here that they'll take the Treasury will take in hundreds of billions of dollars from tariffs, and he says it will not cause inflation, though of course we know here on Bloomberg TV and Radio that the majority of economists dispute that fact and do think that higher tariffs will indeed be inflationary.
Yeah, we heard a couple of things as well about US steal. Specifically, the former president said, under Kamala Harris, US steel is now being sold to Japan. I will stop it. We've got to do it fast. And of course Kamala Harris has come out against that deal, and Joe Biden is reportedly taking action to stop that deal. He also said, as he continues to that we're leading by a lot in the polls, Kayley, and it's hard
to find those polls. We did see a bit of a break for him in Arizona in the New York Times, Siana pol The fact of the matter is, and if you're with us on the daily here on Balance and Power, you know that this is statistically tied pretty much any metric that we're following, certainly when it comes down to the Swing states.
Yeah, and in Georgia specifically where he's speaking. He did their talk to the city of Savannah, where he is saying that he promises Savannah will be a premier export hub if all of these policies go into place.
Would involve quadrupling I guess the traffic in the port of Savannah, which he took credit for deepening. We wanted to bring you in the room for this because there were a few additional contours, specifically when it came to dealing with foreign companies working here in the US and American companies doing work overseas. Getting back again to Tariff's Kyley, and tomorrow we're going to bring you likely an address
that is scheduled. We're not sure what time it will happen yet by Kamala Harris as she rounds out her economic proposals and a separate address in Pittsburgh. Will be able to contrast these two with hopefully the likes of someone like Kitty Richards, who is with us right now. This is our opportunity to take a dive on what we just heard with an expert, senior strategic advisor, the groundwork collaborative economic policy advisor formerly to President Joe Biden. So, Kitty,
welcome back to the table. It's great to see you. I'm sure that you can tell us what you would like to hear from Kamala Harris tomorrow. What did you think of what you heard from Donald Trump today?
I think that we heard more of the same thing that we've been hearing for five or six years now, and luck we can roll back the tape and see how things worked out. Some of these promises that Trump is making our outlandish and very similar to promises that were made about the twenty seventeen tax cuts. So if you remember at that time, somehow a massive corporate tax giveaway was going to trickle down to workers, in the form of four thousand dollars a year in increased wages.
That was laughable at the time. Economists at the time said it was laughable. It has not worn well. We didn't see any of the increased investment that was promised, We didn't see increases in wage growth, and what we did see was really really massive giveaways to the very wealthiest in corporation.
Trump campaign will tell you though, on Michael Watley said to us earlier that we were growing, that it actually created growth that helped us. Without COVID, we would have grown out of this and actually seen revenue continue to rise by cutting taxes. You're smiling and squinting. You don't agree.
I don't agree, and in fact, you know, I wish that I had like a nice chart to show you the economy was growing and had been growing throughout the recovery to the Great Recession, and growth had picked up near the end of the Obama administration, and if you look at the line, it sort of just continued on exactly the same path as it had been before. What
didn't continue on the same path was revenue growth. Revenues bottomed out, and in fact, the revenue losses from the Tax Cuts and Jobs Act have grown and grown and grown year after year, and part of that is because of the massive corporate tax giveaways, which included a huge giveaway to corporations American multinationals that had been shifting their profits overseas to avoid paying taxes and then got a big tax break for all of those overseas profits. At the beginning of the Trump tax cuts.
Well, as we heard him say, and not directly in terms of numbers, but he did promise lower taxes on companies that make their products in the US. There was a big corporate tax rate fifteen percent sign behind him. He has said previously that that fifteen percent rate would
apply to companies that make products in the US. If it's not incentivizing American manufacturing through lower taxation for those companies, what is the proper incentive to do that to shore up the US manufacturing base without it potentially having detrimental economic effects.
I think that's a great question. I think on corporate taxation, what we can do is change the fact that right now you pay a lower tax rate for profits earned overseas than you do for profits here in the United States, which, by the way, that was a cornerstone of the Trump
tax cuts in twenty seventeen. But I think that the idea that you incentivize more economic activity in the US that's going to be good for workers and families by cutting taxes for corporations in the wealthy is an idea that just has not stood the test of time.
So what idea has stood the test?
So I think that we're seeing now, we're seeing a manufacturing and it's partly because we're seeing investments in manufacturing capacity, really smart strategic industrial policy rather than just you know, handing out tax cuts that frankly go directly into shareholders
products through buybacks, through capital gains appreciation. So you know, we need to see investment in workers and communities that will drive I mean, he talks about energy prices, but what we really need is to transition as quickly as
possible to a clean, affordable energy future. And that can be done through things like the Inflation Reduction Act, tax credits for moving toward renewable energy, which will also over time and even right now is becoming cheaper than relying on fossil fuels, so you know, trying to roll that back in order to then you know, Goose the profits of oil companies is going to have exactly the opposite effect.
A terminal user named Adam asks, having listened to Donald Trump and Savannah, so the economic policy going to be inflation, and I wonder if we can ask the same question to Kamala Harris. Neither have fleshed out how they're going to pay for all of these ideas. You can talk about who would be more inflationary than the other, but is that the world we're in?
So the Harris plan actually has been evaluated by Moody's analytics and they find that it will increase GDP, not bring on inflation, keep the labor market strong. And you know, part of that is the tax policy side of things. That the Harris campaign has largely adopted the tax policies of the Biden budgets, which are a pretty balanced approach to trying to return to some level of revenue that
can sustainably fund a modern government. And it's you know, mostly through increases on taxes on the very wealthiest and undoing some of the corporate tax cuts from the Trump administration.
So as we heard Donald Trump say, tax policy is one part of it. The other policy is effectively a tax on importers, I guess, although he may argue that it's actually attacks on on the countries that are exporting, but tariffs specifically. Kamala Harris has painted his tariff proposals as a sales tax on the American consumer. He's obviously talking about some pretty high levels here. We heard him in his remarks just moments ago talk about one hundred
percent tariffs on all cards coming out of Mexico. He floated two hundred percent on deer products made in Mexico yesterday. Is there a set tariff level, knowing that this administration has left intact many of the tariffs on Chinese goods specifically that went in place during the first Trump administration, is there a level that is in fact not inflationary, that doesn't necessarily have to have negative consequences at home and in the result of passing on those costs to American consumers.
So I think this is another place where it's not just a.
Tariff as a tariff as a tariff.
Right, the tariffs that the Biden administration has left in place or in some place in some you know, sectors of the economy put in place are largely very strategic. They are complements to other kinds of industrial policy that are designed to re onshore supply chains for really critical inputs.
You know, take the Chips and Science Act and thinking about how to make sure that we can build a robust battery manufacturing sector as we do transition to clean energy economy, and how we think about getting the most electric vehicles on the road as we can, while also avoiding a situation where we have no capacity to build those electric vehicles here in the United States. Those are places where, as part of a larger policy, tariffs can
make a lot of sense. Putting a massive across the board tariffs on everything that flows across the border is
going to increase prices for American consumers. It's also going to increase prices for American manufacturers who want to use inputs from other countries to build things that they will then sell in the United States, including manufacturers that might want to relocate to the United States to be closer to customers and employe US workers to do final builds, but might not want to do that if they're going to have to pay a massive tariff on all of
their intermediate inputs before they come into the country. So I think it's silly to think that these tariffs will have the kinds of effects that Donald Trump is claiming.
And again, I feel like we spend a lot of time rebutting wild claims made by Donald Trump, and just like I spent a lot of time in twenty seventeen talking about how corporate tax cuts were not going to raise worker wages by four thousand dollars, and these claims are the same as those claims, just with a slightly different flavor.
All right, Kitty, great to have you here in our Washington, d C. Studio. That's Kitty Richer, senior strategic advisor at the Groundwork Collaborative and former economic policy advisor to then Vice President Joe Biden.
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Price is a crude oil and fairly well restrained. We've seen a bit of an upstick recently here, but the fact is people in many cases are paying less than three dollars a gallon for gas in this country right now, Kaylee. Joe Biden, of course, talked at the United Nations General Assembly about the situation not only in the Middle East, Kayley, but the dangerous world that surrounds us. This is his last address before angle. Let's get a taste of what the President said.
Many look at the world today and see difficulties and react with despair.
But I do not.
I won't. As leaders, we don't have the luxury. I recognize the challenges from Ukraine to Gods that and beyond war, hunger, terrorism, brutality, record, displacement of people, a climate crisis, democracy at risk.
Let's bringing Michael Allen, Managing director of Beacon Global Strategies, former Special assistant to President George W. Bush in the national security sector. Always great to see Michael, Thanks for joining us today. Thank you, of course. The situation in Israel with Gaza now as well with Hesbelah and Lebanon, is a major story here at this United Nations Assembly.
The President referring to Gaza there in that address that we heard, We've been in touch with you since October seventh, and we've seen the temperature rise consistently since then, and as Israel looks to the north. Now there are questions about whether this is a war, if we can call it that with Hesbelah, or whether this could escalate more. What do you think?
I think it's slowly and steadily escalating into something like a war. The question will be ultimately does it turned
into a ground war? But when you line up all the things that have happened in recent weeks, from the commando raid to blow up a drone factory embedded in a mountain in Syria which has operated, plus you take the pager attacks, the walkie talkie attacks, the essentially decapitation of the Radwan force, and now more aggressive bombing across Lebanon in order to take out the very rockets and
missiles that Hesba likes to aim at Israel. I think this is all gearing up for something much more substantial than we're seeing now.
Well, and then if that is the case, when do we cross the line to a more substantive conflict. How do we know when it's time to call it a war?
Well, it's probably, in my estimation, already very close to being a war. There's certainly trading blows and left and right. But if there's a tank raid into Lebanon. I think that will be a new significant moment. They of course did that in nineteen eighty two and again in two
thousand and six without great results. But if you want to be optimistic about it, this is Israel trying to create new facts on the ground so that maybe diplomacy would work, that they would implement the old United Nations Security Council resolution from two thousand and six and get Hesbela pushed back northwards that they can't range their rockets.
Into northern Israel.
Or this is just a more extreme, more aggressive version of what we hear these Raelis are up to about mowing the grass here. I think it's more root and branch destruction of Hesbola, because after October seventh, I don't think they can continue to live with another genocidal terrorist organization on one of their borders.
Root and branch. All the while the US is arming up in the region, sending additional troops. We're told, with the idea you mentioned ground war in our minds, what exactly are we prepared to do?
So certainly would not go in on the ground, and the Israelis are proud of the fact that they don't want us it would be to that ask. They wouldn't make that ask of US if we have more troops in the region. I think they're largely talking about grayholed naval ships. Maybe there's some military advisors in Israel proper to help with the command and control if there were another like in April attacked by Iran. But by and large, I think the US is trying to keep its involvement as low as.
Twenty two as we park there though are for a real reason. We saw them employed in.
That absolutely from Iran to take out drones from Iran, cruise missiles and the rest. And also it has a big deterrent value. I mean, the real question is what's Iran gonna do next? Does Iran feel like my god, our most prized proxy, the all power for Hesbola, which we use as a deterrent against Israel attacking Iran's nuclear program? Does Iran si I can't stomach the complete degradation of this force, and I have to do something.
But what, well, I guess The question that then follows is how much, say, does Iran really have in the actions of Hesbela. Hesbla feels it needs to retaliate for these various attacks conducted by Israel. Would they do that without the go ahead from.
Toront I think they're definitely in consultation. They're very very tight, Andzrala, who is the head of Hesbela, is always i'm told, very close with the Supreme Leader. So they're at a minimum coordinating very closely. I think Iran knows that Hesbol has got to hit back somehow, but I think they're probably on pins and needles trying to figure out does Iran get involved in this, How do I keep Hesbeala
in the fight? How do I put pressure on Israel in another front or in another theater so that maybe they have to pull back on Lebanon.
From Unga Today, in New York NBC News reporting, the Iranian president says he does not want war with Israel. You believe I do.
I don't think it's really in his interest because he would lose in a conventional usual interest, right, I think it is. We're still marching down this road together. Yeah, I think that Israel doesn't want war per se. Everyone wants to take care of the nuclear program if they can, if that's even militarily possible at this point, and certainly Iran wants to continue using their proxies because they're getting
the best at both worlds. They have terrorist organizations that hit Israel all the time, and while there are sanctions up against them, they're not always enforced, and they would lose a conventional exchange with Israel.
Israel has maintained that its goal here is just for Israelis to be able to return to their homes in the north. Hesbla has said, if you want to be able to do that, just end the war in Gaza and then the conflict between the two of us will stop. Is that not the solution here? Is there's a push still by the Biden administration to reach a ceasefire deal. Why not focus the energy and effort on that versus this action across the northern border.
So they're definitely linked. Hesbula says, We're going to keep sending rockets your way until the Gazza ceasefire occurs. But I think even and we've seen reports of this that I know you've seen, that the United States is more or less given up on the prospects of the sea.
Certainly not openly optimistic.
They're not optimistic at all, and I don't blame them whatsoever. First of all, we don't know if sen War's dead. He might be dead. That's what some press reports have indicated of late. They're trying to figure that out. But also, just as Gaza has slown down because there are fewer targets, Israel feels freer to go northward.
So are we then given up on the hostages.
I hate to say it like that, but I don't ever really think NETANYAHUO had it at the very top of his list. I feel like after October seventh he felt like he needed to increase to Torence and increase the security of Israel in the region.
But it looks decrease.
It looks increasingly unlikely that there is going to be a deal in the offing.
But as to what we've seen from the IDF, that I have to be a deal, right these these rescue operations have been largely unsuccessful.
They've been largely unsuccessful. There's too many miles of tunnels and Goza. Now listen, if Sinhwar is killed, there are reports that the other people around him are not quite as hardcore as he was, so it's not inconceivable that some hostages could come out if there was some sort of deal. But let's see with Sinwar pokes his head back up sometime soon.
So obviously this is one active area of conflict that is dominating conversation at the United Nations, but it is unfortunately not the only one. The ward Ukraine is also on the agenda, and that was the focus of many of President Biden's remarks before the General Assembly today, this idea that Alliance is supporting Ukraine need to stick together.
The Associated Press is now reporting that the US on Wednesday, so tomorrow, will be announcing a new aid package three hundred and seventy five million dollars in military aid to But we also understand, Michael that on Thursday Zelensky, when he meets with Biden, the White House is going to be pushing a plan to end the war with Russia. Do you think it's realistically time for those conversations or is the aid going to have to keep flowing for quite some time.
Well, the aid has got to keep flowing.
The Ukrainians are honestly on their back foot for the first time. It looks like they're losing more than incremental amounts of territory. But I like this Zelensky initiative. It's because there's an election coming. It's because Donald Trump and JD. Vance say that they are either going to, in Vance's mind, do nothing for Ukraine, or, in Trump's mind, immediately try and settle the conflict. I think this is Zelensky's way of saying, I hear you, President Trump, I hear you
Vice President Harris. Understand the politics is changing in the United States. But here's what we think should be a reasonable resolution to this conflict. And I think it's fine because you can't beat something with nothing. He's got to come to something with something to the table.
Yeah. What is what of Zelenski's conversation with Donald Trump? Like Donald Trump wouldn't even say in the debate that he wanted Ukraine to win the war. Yeah, to be a fly on the wall. Considering the history that these two have had. What's Donald Trump's message to Zelensky.
I think it's well, Trump will say to Zelensky, we have to wrap this up soon. If you see anything from Trump, I do believe it's a sincere belief born from stress about endless wars, that he wants the fighting to stop in the Middle East and definitely in Ukraine.
I think to give up something I think.
Zelensky has to say, if you want a lasting piece and you want to be credited for that, I need more time and I need more military and economic assistance to condition Vladimir Putin to where he might agree to a ceasefire.
If you do it.
Along the lines as they exist today, that's trouble and a recipe for Russia to come back into Ukraine and a situation where Ukraine feels insecure.
All right, Michael Allen, always great to have you here in our Washington, d C. Studio view Courses, Managing director Beacon Global Strategies, former Special Assistant to President George W. Bush in National Security, here with us on Bloomberg TV and Radio, and of course, as Michael helps us to analyze some of the commentary we're getting out of the un specifically what we've already heard from President Biden and
his first speech of the day. We will be hearing another speech from Biden later on today four to forty five pm Eastern Time, roughly when it's scheduled at an event Bloomberg is hosting The New York.
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