Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch US live weekdays at noon and five pm Eastern on Apple, Cockley and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch US live on YouTube.
But talk today, frankly, is what happened in Riod in the early hours Eastern time this morning. A meeting between US and Russian officials to discuss the future of the war in Ukraine, or perhaps more specifically, an end to that war, which the US State Department says they want
to see happen as soon as possible. At these talks, obviously Russian Foreign Minister Sergey Lavrov, a number of emissaries from the US as well, Mike Waltz, the National Security Advisor, Steve Witkoff, who is the Special Envoy for the Middle East, not notably the Special Envoy for Ukraine, Keith Kellogg, and then of course Secretary of State Marco Rubio, who had this to stay from Saudi Arabia earlier.
We're going to appoint a high level team from our end to help negotiate and walk work through the end of the conflict in Ukraine in a way that's enduring and acceptable to all the parties engaged. The third point is to begin to work at a high level as well, to begin to discuss and think about and examine both the geopolitical and economic cooperation that could result from an end to the conflict in Ukraine.
That's where we start a conversation with Jennifer Kavanaugh, back with a senior fellow, director of Military Analysis at Defense Priorities and co author of the book Truth Decay, an initial exploration of the diminishing role of facts and analysis in American public life. Jennifer, it's great to see you. Welcome back to Bloomberg TV and Radio. There's been a lot of criticism, as you might expect surrounding such a sensitive interaction like this first meeting. Much has been said
about who is not at the table. What's your thought of about the way this is starting. Is this a positive move or not?
I do think it's a positive move. It's the first time that there's been a high level meeting like this between the United States and Russia since the war started almost three years ago now, and any negotiation is going to take a lot of rounds of talks, and it makes sense that the United States and Russia would start
by dealing with some of their bilateral issues. That does not mean that Ukraine should be excluded for all the rounds of talks, but certainly the United States and Russia have a long history of tense and difficult relationships, and there are a lot of bilateral issues that the two countries need to work out before they even sit down at the table with the other parties, to work through the tough issues surrounding the war in Ukraine and the
relationship between Russia and the rest of Europe. So, as you heard Secretary Rubio say in the clip you played, you know, a big piece of this is thinking about the future of US Russia relationships. So I see this first meeting as sort of setting the foundation for future talks. And it makes sense that the United States and Russia, which are both two major nuclear powers, would start that off together alone before inviting the rest of the parties in.
But does this not also set the foundation for a deal that could end up being more favorable to Russia given some of the rhetoric we're hearing, than to Ukraine. Who wasn't there.
I don't necessarily think that any decisions were made today about how.
The war would end.
Today. It seems like the key outcome was the appointing high level negotiating teams to work through those issues. So no decisions about Ukraine were made without Ukraine today. It was more decisions about process and how the process might unfold. I would agree certainly that any decision that deals specifically with the war Ukraine should be a party to, and I think that anyone who's working in the Trump administration who really does want a lasting piece would also want
Ukraine at the table. Research shows that no peace settlements that are imposed on countries the countries are forced to sign rarely endure. So if the goal here is to have a lasting piece, which it seems like it is, then Ukraine will have to be at the table. So I don't see any necessarily any foreboding signs here from Ukraine's perspective.
Well, you did put your finger on something in the language that the Secretary of State was using.
There this idea.
Of potentially more comprehensive talks involving, as Marco Rubio put it, both the geopolitical and economic cooperation that could result from an end of the conflict.
So what are we talking about here?
Is this exon mobile and McDonald's going back to Beijing or should I say Moscow rather.
It could be I think the key things are Number One, this war was in the approximate terms, about Ukraine, but also about Russia's security concerns. There's a debate about wether those are legitimate or not, but Russia does have concerns about having NATO right up on its border, and it made it clear before the war that it wanted to have at least discussions about the security architecture and the
relationship between NATO and Russia. And so I see in Secretary rubio statement and indication that that will be something that the two parties discuss, or the four parties or however
many parties are at the table. And then on the economic piece, I think there's a recognition coming from Secretary Rubio and the US team that sanctions, the very stiff and extensive sanctions that the United States and its allies and partners have placed on Russia since the beginning of the war, that some of those sanctions will have to be rolled back, maybe not all at once, but that in the long term future a stable relationship between the United States and Russia and NATO and Russia will have
to have those sanctions removed at least over a period of time. And so that's what I see is sort of the economic piece that there has to be some reopening of these economic relationships.
Yeah, remarkable to see today Marco Rubio sitting across the table from Sergey Lavrov, who personally is under sanctioned by
the US government. But that is exactly why Rubio was talking about the need for a European cooperation here in that Europe also has sanctions on Russia, so will have to be involved if you're a leader in a European capital right now, Jennifer facing down the prospect of not only being excluded from the talks today, but having to rethink defense posturing because of the signal of a US pullback in many of those areas you were just alluding to,
especially those countries right on the front when it comes to NATO. What are you thinking right now?
I mean, this has been a challenge for European leaders for some time now, is the sort of unwillingness to recognize the changing attitude in the United States towards continuing to have this all encompassing security guarantee to its European partners. We heard comments from a number of administration players, whether it was Secretary of Defense P. Xth or Vice President J. D Vance, about, you know, the ways in which they
were looking for Russia to step up. And I do think that there was a change in tone in the administration to point out that it's not just that the administration, the Trump administration, is looking for Europe to spend more under US leadership, but to actually take on that leadership themselves, and that's that's there's a difference there. And I think we saw the recognition and the urgency felt in Europe after that with the summit yesterday in Paris, but the
results were kind of lackluster. So, if you know, if I personally am a European leader, I'm trying to figure out what do I need to defend myself with no US support, because that should be my security goal. I don't necessarily see that that level of urgency yet for most of Europe. Certainly you see it in the Baltic States and in Poland, but those countries can only do so much without the rest of Europe behind them.
Yeah, Poland has made that clear, so Frances it will help with peacekeeping troops as well. The uk kere starmer those is he wants US military support, it sounds like he's not.
Going to get it.
This seems unlikely at least right now from what the Administration said last week. I mean, the reality is that a European whether it's a peacekeeping force or a trip wire force of any meaningful size, can't really sustain itself without US support, at least in terms of logistics and other types of enablers, even if there aren't US boots
on the ground in Ukraine. The administration comments last week weren't all that clear whether or not that support is off the table, But there are another other challenges with any sort of European security guarantees. So I personally am not that confident that a sort of European peacekeeping force is a likely outcome of the negotiations, both because of feasibility as well as because of what Russia is likely
to accept. They're not going to be too enthusiastic about having a big peacekeeping force or deterrent force of European soldiers on their border either or on the de facto border. Ukraine that's likely to come from any settlement, So I don't really see that as a likely outcome, but certainly there will be more talk about it because it's the only real alternative to US backed security guarantees that's on the table right now.
All right, Jennifer Kavanaugh, Senior Fellow and Director of Military Analysis at Defense Priorities, thank you for joining us here on Balance of Power today. Much appreciated. And I do Joe just think back to the number of conversations we have had with foreign ministers, other European diplomats here at this table, especially during the election, about what it would mean for Europe infer NATO if Donald Trump were to be elected, and now that he's president, after all of
them essentially telling us we'll work with any administration. I do wonder how that tenor might change.
It's not resulting in much unity at the moments. Italy showed up late for the emergency meeting over the weekend, ole Off Schultz left early.
We'll see how things go Wednesday. Reuter says that will be the next meeting.
You're listening to the Bloomberg Balance of Power podcast. Catch us Live weekdays at noon and five pm. Eastern on Apple Cockley and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
We're live from Washington, but we do have our eyes on New York, right where Charlie Pellett is sitting, where the news really could be focused on later today, as the Governor of New York raises questions about the future of the Eric Adams administration. We talked about this a bit on Friday, when the resignations began from inside the Department of Justice over this DOJ order that the corruption case against him be dropped that has expanded.
Now.
Four of Adams's top deputies announced their resignations over the weekend on this push to drop the corruption case in apparent exchange for help with Donald Trump's deportation agenda. There is talk of a quid now Kathy Hokeel, who as you might remember, was in Washington last week, so she's weighing the serious step now of removing the mayor.
How does that happen?
You say, the city's charter lays it out, and what is in fact an untested process which the governor can begin by serving the mayor with charges warranting removal. She's in meetings today with a lot more to follow here, including the city council speaker and controller. They're part of the committee that can declare a mayor unable to serve. We could be in a situation where things went from being very good for Eric Adams to not at all under the Trump White House. It's where we start with
our panel today off the long weekend. Rick Davis, Partner at Stone Court Capital, Bloomberg Politics contributor and Republican strategist, joined by Democratic analyst Genie Schanzano, Senior Democracy Fellow at the Center for the Study of the Presidency in Congress, Bloomberg Politics contributor, Genie, This hits close to home for you in New York and as a Democrat, is Eric Adams going to be the mayor for law?
You know, it's unclear now. Everybody in democratic politics in New York is at that meeting, so we'll have to see what they say. And she, the governor, is certainly getting a lot of pressure to remove him, but it is a bad idea. She chose not to remove him, and she is allowed to as you just mentioned via
city charter when he was indicted in October. So to remove him now would be to suggest that she is removing him because he cozied up to Donald Trump and because they feel that the you know, he is cooperating with the federal government as it pertains to immigration. I don't like what the Justice Department did. I don't like the dropping of the charges. I certainly am not a big fan of Eric Adams, nor are many New Yorkers. He's at about nine percent. But this would be a
historic move by a New York governor. Two hundred and thirty five years, we've never seen this, and so to do it now would be to open a Pandora's box in terms of what a mayor could or couldn't be removed for.
What do you think of this?
Rick Governor Hokel says, the alleged conduct at City Hall that has been reported over the past two weeks is troubling and cannot be ignored.
Will she remove the mayor? Well, you know, it's hard to tell.
I mean, does she really feel like she's got the leverage.
To be able to do it?
I kind of agree with Genie. I mean, if she was going to do that. She probably should have done it when he was indicted, said resigner or get kicked out, and then she should have kicked him out and we would have been spared all this quid pro quo talk and losing the leadership of the Southern District.
Of New York's Justice Department.
I mean, like this thing has turned in to a circus when you think of all the impact that this thing has had on the City of New York, the Justice Department, the immigration program, the state of New York, the state of the Democratic Party in the City of New York. I mean, if Eric Adams doesn't resign based on the top four people in his administration walking out on him yesterday, then Kathy Holkl should do something. And twiddling away at this is only making it worse by the day, and that's on her.
You know, it's not going in a good direction. When Adolph Hitler is invoked Eric adams Genie quote. I was listening to some of doctor Martin Luther King's teachings and he talked about the book Mine comf referencing Adolf Hitler's manifesto quote. He said, if you repeat a lie long enough loud enough people will believe it is true.
And that's what you're seeing right now.
This is a modern day mind comf Where is he going with that? Because it doesn't sound like someone is about to resign.
Oh, and he said clearly and that very bizarre speech gave yesterday, that he was not going anywhere. Of course, that has become sort of practice amongst politicians who are accused of improprieties is to just stay, put fight and say they are victimized. And this is of course what Adams has been saying right along. This is why he went down tomorrow lago. This is why he went to
the inauguration. He's been closing up with Donald Trump because Donald Trump has been publicly empathetic with him, saying that he has been a victim of an over zealous prosecution. You know that said, the timeline here is critically important. If she doesn't act to remove him before March twenty six, that's ninety days before the primary, we are in an election here in New York. There would need to be a special election by Jimani Williams, who's the public advocate
who would become acting mayor on his removal. So there are a lot of moving parts here, and you know you want to add insult to injury. Look at that Fox interview with Tom Holman on Friday and Eric Adams where Tom Holman is joking about laughing, I don't know, joking about a quid pro quo. I mean, the entire thing is ugly. Adams should resign, he looks like he won't, and then the governor has lost her chance to remove him.
Man to be a New York Republican once again, Rick, I don't know. But if Kathy Hokle removes the mayor from office, knowing that he is close to Donald Trump, what does this do for the New York delegation that was already on thin ice here when it came to so many issues.
Including salt. This is a tough room to be a Republican, Rick Davis.
Yeah, this is not your grandfather's Republican Party for sure, and I think that they have to act on their own interests. In other words, what do they think is good for the state of New York, for the country. And lastly, you know you can slot in there something for the Republican Party if you can still recognize it. But look, I mean, this is the trouble here. I mean, you know, if you don't think it was a quid pro quote, watch that Fox interview with.
Tom Holman in the Mayor.
I mean, if you don't deliver for Ice, I'm going to come to New York and we won't be sitting on a couch. I will be up your keister. And I'm saying that on a Bloomberg approved boy. I mean, like, really, I just can't imagine a scenario that could be worse for the administration. But they're gonna get what they want right and Kathy Hokle is the only thing that steps
between them and getting their way. And in the meantime, you have a crisis at the Justice Department with you know, the senior leadership of the Southern District of New York's US Attorney's office walking out because they claim it's a quid pro quote and politicize. So, I mean, who are you gonna believe your eyes or your ears?
Unbelievable that you've both brought it up.
The optics of seeing these two sit together for the interview on Fox, even with the sound off, was remarkable. What does this mean for Kathy Hockele's reelection Genie.
This is a very sensitive moment.
Yeah, I mean, I think politically she has a lot of reason to try to remove Eric Adams because she is not popular. She has seen as fairly weak. She was, you know, not everybody's first choice for governor. She became sort of an accidental governor after we Cuomo resigned or was pushed out. And by the way, Culomo is likely to be the New York City's next mayor. He certainly has a leg up and will announce in March, so
he's not left for long as well. So she has a lot of political reason to do this, but that is not enough. If she was going to do it, it should have been done in October. She didn't do it. And I think, speaking as Rick was about the Justice Department, what the Trump administration has done here is preposterous. For Emil Bouvet to say that we can't prosecute Eric Adams because if we do, he can't carry out the immigration
raids that we want. Means that you have put an end to public corruption in the United States, public corruption investigations, because that means any public official charged with public corruption, they can't possibly be charged or investigated or removed because how could they do their job. Well, the answer is they can resign when they are indicted by a grand jury.
So the preposterousness of what the Trump administration and Emil Bovet has done to their very own Justice Department and the Office of Public Integrity should not go unnoticed.
Here amazing analysis from Rick and Genie, and you mentioned Andrew Cuomo. Genie, could we be in a world, Rick where Donald Trump helps to reform the political careers of both Eric Adams and Andrew Cuomo.
Well, here just letting blog out of jail from Chicago and appointed him to a job. So I think this is sort of, you know, like he's the Grim Reaper, but in reverse he takes you know, politically dead people and turns them into superstars. And I don't know, I mean, like maybe this is just something he wants to do because he felt that he was unfairly prosecuted by the
legal system. And I kind of get that, right, I mean, in his mind all of this was made up, and he probably figures everybody who has the same kind of thing a political career, either past or present, who are being pursued by the Justice Department must be just as innocent. As he is, and so that kind of transference makes sense, but it doesn't preclude the fact that some of these people are guilty as hell and they probably ought to be locked up.
So I don't know.
I mean, I think that anybody who thinks that he's going to make decisions based on the political access or failure of the Republicans the Democrats, it's all about whether or not it's his success, and that will determine the alcolaes.
Okay, so Geenie, how long? And so we see Andrew Cuomo on the patio at mar A Lago.
I think it could be imminent. Joe Matthew, you know, it looks like he again will announce in March. It's all the signs are pointing in that direction, including a support from some of his you know, not so long ago fierce opponents. So that looks likely. And you know, speaking of old people coming back, Anthony Wiener says he is running for city council in New York. So no, they are all coming back, you know, by let by guns,
be byguns. And I think the real loser here again is the fact that public integrity matters our justice department at the federal and state level have to be able to investigate on behalf of the public. When we have public officials who who have been accused of wrongdoing, the idea that you can't charge them because then they won't be able to do the bidding of another public official, even the president, is the height of irresponsibility. And hopefully
that is addressed. But I I, you know, looking at well Goidovich, looking at all these folks coming back, it seems to be public corruption be dammed.
Well, I guess that's true.
You know, I don't know what Bloggo thinks about this whole thing, but producer James does invoke the name of Curtis Sliwa. Rick, is it time to break out the red beret here or what?
I don't know.
I'm still looking for a Republican who could run in all this, because what an opportunity for Republicans in New York City.
You're here, You're the feral cats, Rick Davis and Jeanie Shanzino with a conversation we thought we'd never have, but I guess we can say that. Every day here on this program.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Alma Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
You know it feels like on Monday. I hope you had a long weekend.
We're glad you're here on Bloomberg Radio, Satellite radio and YouTube.
Search Bloomberg Business News Live if you want to find our live string.
We keep a seat for you constantly here in the studio, and the cameras are lit. Having survived Valentine's Day massacre, that's what they're calling it. After several thousand probationary employees across various government departments were fired over the weekend, fired by email, fired by voicemail. In some cases, they were called in to empty their desks and kiss them goodbye. The termination notices hitting over the weekend after a raft
of executive actions signed by the President. We've talked about them in real time, and now we're looking at the fallout. Jim Jones, the head of the Food division at the US Food and Drug Administration, oversaw the banning of red dye number three earlier this.
Year, which RFK Junior, of course won.
He stepped down yesterday quit, pointing to the layoffs of eighty nine staffers in the Foond division as indiscriminate, fruitless for me to continue in this role, says his statement. The top official at the Social Security Administration also stepped down this weekend after the DOGE went after Social Security. Michelle King, the acting commissioner out and the question is
who's next here. It does appear the FAA is part of what's next as they try to envision ways to overhaul the air traffic control system and of course lay off a lot of people. Union leaders said the FAA canned four hundred probationary employees as part of the.
Valentine's Day massacre. And so now it's on to NASA now.
The last we checked here considered a national asset by both Democrats and Republicans. One of the few bipartisan activities in Washington is.
Feeling good about our space program.
On Tuesday, Donald Trump signed an executive order saying that DOGE would be installed in agencies, including NASA. By Thursday of last week. They were on site. Now, We've been doing a lot of reporting on this, and I've also been following the work of Keith Cowing, who you hear and see on this program pretty often whenever we talk about the space program, it's usually about something good. When we talk to Keith, something good's about to happen. Hard
to tell this time. Former NASA employee, he's been in the agency himself. He's now editor at NASA Watch and has been on the forefront of this coverage the downsizing of NASA.
Keith, it's good to have you back. Welcome.
Have we seen the layoffs we're going to get from NASA or is this just the beginning, Because people inside the agency are very worried. Meetings are being canceled. They don't know if they're going to have a program tomorrow.
Well, if you look across the government, this is happening everywhere, but at NASA, the little agency that I follow, this is.
Sort of the pregame show.
Early on when they put these all these executive orders out, they said, by the way, identify all the probationary employees one or two years, because quote they're the easiest to get rid of, or they have the fewest complaints if you just let them go for almost any reason. So that's now happening, and it's happening in real time. As we as we talk right now. After that, though, is the main attraction, which is a reduction in force or
a riff. And that's where they go across a larger swath of an agency and really try and dig in to get this. You know, pick a number I here, ten percent was the ideal, but twenty five percent reduction in force and so you're gonna have a lot of people who are not in a particularly good place for a long time.
Boy, it sure sounds like it. So this is all right, just probationary. Then the real stuff is to follow.
Uh.
If Donald Trump and the administration here are going for twenty five billion dollars in budget cuts when it comes time to craft.
A budget this year, what would that look like? Keith?
And when you back off, here is the endgame canceling the Artemis program.
What does Elon Musk want to do to NASA?
I don't know if it's.
Elon per se as a larger swarm of people that are using the Project twenty twenty five and other metrics to guide what they're going to do. As far as the Artemis program goes. The issue isn't the program going back to the moon. It's the big sols. Rocket Boeing has sort of gotten a bit of the writing on the wall, and they put a war notice out to for saying that there might be up to upwards a
four h or so layoffs. But here's the thing. If you start laying off civil servants, you're going to cut your budget a little bit, but not a whole bunch, because it's really not the biggest part of the federal budget. But the knee jerk reaction is that NASA, oh, well, we'll just get contractors to do that work. Well, you know, you can just fire them with a nasty look.
You don't even have.
To go through any procedures other than what's in the contract.
So ask yourself.
You put this with, oh, we want to go to Mars by twenty twenty five to eight whatever, you're going to do that with less people. You know, if it was a private sector company, you might get away with that, but this is a government agency with government contracts, and it's probably going to take them two or three years to figure out what's left. Much less not be able to do a sprint thing to Mars and to the Moon and to build a new space station and all the other things that NASA does well.
And who runs the biggest space contractor in the world Keith Right now, apparently.
It's it's space X with Elon Musk. But you know, there's I think people would ask me, you know about this. I don't agree necessarily with his political science, but I do like his rocket science, and his company has a lot of people there that they're just there to build rocket ships and explore the universe. So you got to kind of parse the personalities here. But at the end of the day, it's the White House. You know, elections have consequences. It's the people in the news with the names,
and it's going against the government as a whole. Again, poor little NASA just happens to be a little more vulnerable because you can't just take too many pieces out of the rocket ship because it'll blow up.
Wow.
So on January thirty first, Keith NASA paused all activities of advisory organizations inside the agency and you can talk about these are scientific groups. They focus on planetary science and more esoteric fields. The first group affected the Mercury Exploration Assessment Group. They're supposed to gather on the fourth of February for a couple of days of talks here and meetings about some of the planning that they were doing here.
Sixty people set to show up JOHNS.
Hopkins Applied Physics Research Lab in suburban Washington. This is according to the Washington Post. After the DEI orders went out from the agency, they try they canceled one topic. I guess that was talking about DEI and trying to lift up some community who didn't have access to a lot of science training. And they thought the meeting was compliant. On January thirty first, NASA forced them to cancel the entire thing. This is happening across different groups in the agency.
What does it mean for scientific research, for innovation and what actually people want to get out of NASA?
Well, nothing good, And of course you know again with NASA, there's other space agencies. But I just tweeted something, this is the most I worked there. It's the most amazing group of people. You need to collaborate with each other and talk. And then they've touched the Sun, they've gone to every planet and we're interstellar space.
Now.
You just don't sit down and do that. You have to work with these groups, and these advisory committees are usually sanity checks like the program managers itself says hey, I want to point the telescope here, here, here or there, and they say, you know what, you should do this, you should do that. Yeah, we think it's good and it's just a sanity check, but it's also those people are also being paid to do the science, so sting
these meetings. They're not just you know, if they said hey, we're going to go to Zoom, I think all right, maybe they're going to save some travel funds. No, they're not doing any of these meetings at all. And when it comes to the DEEI thing again, you can go wherever you are on that position. But NASA has always, as an agency, tried to be is inclusive of everybody everywhere, even when I was a little kid in the sixties. And so you know, if you're over zealous with OAP
that looks like a word, I can't use it. You just slice things off, and that's what's happening.
What do you think of Jared Isaacman, This is the billionaire entrepreneur has actually been to space a couple of times because he's extremely wealthy. He's been a customer of SpaceX and he's set to run the agency what experience beyond his own space tourism does he bring to the table.
Well, I'm looking forward to it, you'd be quite honest with you. The thing that caught me off guard at first was Oh, this guy's going to buy these flights. But then like a second later he said, and we're going to raise a fast amount of money for Saint Jude, And I go, all right, that's my sort of guy.
You know, you take the space exploration, you take non traditional people up there, and you go out of your way and every way possible to make a good thing on Earth elsewhere in an unrelated sector, come along with it and hope and inspire and all that sort of stuff. So that that got me as a fan right off the bat. He's gone twice. He puts his money where
his mouth is. He started his own company, so I mean, you know, rich people tend to figure out how to do things, and he's got sort of a raw enthusiasm that reminds me a bit of Jim Bridenstein, who is the administrator to back you know where they just really want. They got the whole Star Trek, star Wars, let's explore the universe things, So you need other skills they'll bring
other people in to help them. But having the raw I want to go explore space thing embedded in your head is you know, really important and he's got it in spades.
Okay, Well, this is nice to hear something good come out of this conversation. Yeah, is this going to be the end of the space launch system by the time DOGE is done?
You know what again, if they if they cancel that, more people will be off, you know, out of work, which you know again, work is work, but you got you know, do we want to go back to the moon? Okay? Is the SOLS the best way to do it? Well, it was mandated as it is by Congress, it's cost many billions more than it should, it's many years late, and are there other ways to do it?
Yeah?
Elon Musk is making these big rockets like corn silos in Texas, and if he blows one up, he says, Okay, I got three more to go.
So maybe we have a different way of going to do things.
And if we really want to go to the moon and go elsewhere, maybe we need to bite the bullet and say, you know, we thought that was the way to do it, but we've got a better way now and again, every every SpaceX rocket, every Blue Origin rocket is built with a lot of X NASA people were pioneering done by NASA, So you got to be hoping that NASA's had a real impact on what we're.
Going to do.
So wait, all right, so we do we have some short term pain here that ends up being a long term solution. Maybe this is all good for NASA, Keith, Is that what I've learned in talking with you, Well.
When I left NASA, I had to quit, but they fired everybody I worked in the space Station Freedom program, which if you look at the space station now, it's all the stuff we built, just with different names on it. But it's not fun when you're on the street and your friends are on the street. But NASA rebounded, and you would hope that NASA learns from these things. It's, you know, never a good reason to do something bad, but you kind of make it worse if you don't
learn from it. I would hope that the NASA that results from this, and the contractors community and.
The science community.
Yeah, if you parse.
It down, will you have a clear way of doing things? If that's what comes from this, then okay, we'll look back and say, I guess it was good after all. But if it doesn't.
From NASA, watch Keith Cowing.
Are you a Star Trek Guy or a Star Wars Guy, Keith Star Trek, Star Trek Guy.
I should have I should have known that. I'm sorry I even asked you.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple Cocklay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
To with tariffs threatened against Columbia, then pulled back, threatened against Canada and Mexico, delayed until a few weeks from now, implemented on all Chinese imports, implemented on steel and aluminum imports. And as we've heard from the President repeatedly, more very well could be coming, including what he floated last week. April second, he's looking at auto.
Tariffs, Joe, And that was all off the top of her head. With more where this could come from.
Yeah, April second, we didn't want to do April Fool's Day. The idea of auto tariffs going into effect though really causing the question the way that our auto companies make the vehicles going back and forth across the border, complicating the idea when it comes to Mexico and Canada. And remember what Jim Farley said, it would blow a hole in the US industry that we've ever seen. You paid a visit to Capitol Hill to deliver that message last week.
It makes you wonder the impact of reciprocal tariffs as well, if.
They come around to your point? Right, this all comes together? Was that what I added?
Getting something?
There's always another. John Bazella knows all about this.
He is the President's CEO of the Alliance for Automotive Innovation, So what must be going through his minds as ev incentives are also rescinded? John, It's good to see you.
Welcome.
I don't know how you make sense of all of this. We can barely get through an intro to talk to somebody like you because there's so much going on. What is really about to happen when it comes to auto tariffs? Not the bluster but the reality.
Yeah, well, first of all, thanks thanks for having me. Here's what I think Jim was getting at. When you look at the automotive industry here in the United States, for over twenty five years now, we have had a seamless North American industry. As you mentioned just a minute ago, joe parts, components, and vehicles flow back and forth across the border. In some cases components several times before they
become a finished vehicle. This benefits American consumers. We get more affordable vehicles, we get more choice, and the US ends up more competitive as a result of it. So here's what I think Jim's getting at. If you look at the scale of this industry, it's massive, these plants and you've been in them, millions of feet square feet under roof. These are massive assets. You cannot move these assets overnight. You can't shift supply chains overnight, you can't
move production overnight. So what could happen is costs could increase on consumers before jobs come into the United States. That's the dilemma, that's the challenge of tariffs that appear out of nowhere.
Well, but the President would argue that the tariffs are intended to protect American industry, protect American made cars. So what is the appropriate way to do that? If it's not through policies like this.
Yeah.
Well, first of all, I think President Trump really understands the importance of a healthy and competitive auto industry. I have no doubt about that. I listened carefully during the campaign. We've had an opportunity to talk to the team. I feel like he understands this, this importance, the importance of a competitive auto industry. I think the way to focus on this is through discussions like well, that will occur when USMCA, for example, is reviewed, in other words, the
trade agreement between the US, Mexico and Canada. So during that process, these are the types of conversations that should take place. What should those parties to the agreement and do in order to comply with duty free trade? Those are reasonable questions, and I think that's the ultimately what Jim saying is, look, we need a review.
Sticking with Jim Farley for a minute. After he came to Washington, he warmed up to the idea of putting tariffs on imported vehicles. We applaud President Trump's idea to look at all vehicle imports into the US an important step forward, which now then calls it the question what's an important vehicle? Because We just talked about American cars going back and forth across the border for various stages of assembly.
Does that count.
Yeah, it's a great question.
Right there is no one hundred percent US vehicle or one hundred percent Mexican made vehicle or one hundred percent Canadian made vehicle.
And you've got Europeans assembling cars here in the US.
So it's it's a to me.
The big question is do we need and want a healthy and competitive auto industry in the United States?
And I think the answer to that, and I think the.
President agrees, is yes, because it's important to our economic security and it's important to our national security. And when you think about how cutting edge this the manufacturing sector is, the automotive sector is in the United States, and how important technology is to vehicles and how important that technology is to our national defense, I think that you really do need to focus on competitiveness, and I.
Think that's what this administration will do.
And is it competitiveness specifically with China that you're most focused on.
Yeah, I think that's a great point. When you look at what's happening. There is an intense global competition for automotive investments and It's really happening in three areas China clearly.
The United States, and Europe.
And it's important that the US is competitive in this dynamic. Right now, what you see in China, and I was recently there just before the end of the year, what you see there is an industry with massive overcapacity, lots of government subsidies, and a desire to export all that extra capacity. And the question is is this trade that's likely to happen, is it fair right or is this anti competitive behavior? And so that is really going to be an important question for policymakers when we.
Talk about China.
We're not going to see BYD selling cars here anytime soon, I can only imagine. But what will be the impact, with that said, of the lifting or the rescinding of EV tax credits and other incentives. Elon Musk is doing pretty well at Tesla right now, but you've also got Jim Farley, Mary Barra and others trying to break into this Nason business.
What does this bring to the table.
Yeah, I think context is really important here. There's two bits of context I think we have to understand when we talk about the EV incentives. The first piece of context is we right now as an auto industry in the United States, fast face significant challenging automotive regulations emission standards. Those really challenging emission standards both set at the federal level in the Biden administration and by the state of California. And that's a crazy land story we can get into.
Those were based on the assumption that ev incentives would stay. Yes, so if you take the incentives out, my question to you would be.
Did the standards go away? And so that's context number one. Context number two.
What we were just talking about the importance of a healthy and competitive industry in this competition with China and the Chinese automotive industry. I would make an argument that the incentives are important in both sets of contexts. In other words, they are important in a context where you've got really aggressive standards, and they're particularly important as we transform our industrial base to remain competitive and become competitive with China.
Well, and you just in your first answer talking to us about China, talked about how China heavily subsidizes its own, yeah automotive industry. So is it a mistake for the US to be pulling back subsidies of any kind? Do we actually need more of them.
Yeah, I look, I think this is exactly the question. This is exactly the question. If you believe in a healthy, competitive auto industry, and you believe that that industry, that competitive and healthy in industry is supportive of our economic and national security, you should look at a balance between regulation and policy, and in this case, policy would be incentives.
There are.
These incentives are not just the consumer incentives that a lot of people have focused on. In other words, money at available at the dealership to support the purchase of an EV. We're talking about incentives to transform the industrial base, to build the automotive industry of the future. That is really important for this industry.
What does this mean for innovation at a time when we realize, you know what, most people are buying hybrids, not evs, right, and that Elon Musk may not have a consumer priced vehicle anytime soon.
Right.
Hybrids are a form of electrified vehicle. Right. And I love this.
Idea that consumers have choice, and I think that's essential. They should have a choice a gasoline vehicle if it fits their wants and needs, a hybrid, a plug in hybrid, or a battery.
Keep up with China when it comes to innovation, that's the key.
The key is you need an innovative and vibrant auto industry and so to be able to have choice, choice, including electrified vehicles, is going to be really important. So you've got to build an industrial base to have that innovation and choice.
Well, and obviously we've talked about and you were talking about these large facilities that actually assemble these cars, but what about battery technology. What about the chips that need to power these cars that can do us so much more from a technological basis. Talk to us about kind of those lower rungs of this.
Yeah, and they're not much lower, right if you think about it. I mean, the battery is critical to the vehicle, a hybrid vehicle as well as a battery electric vehicle, and so are these computer chips. Vehicles are effectively consumers excuse me, computers on wheels, and consumers recognize this. And so you need to have access to cutting edge technology. That means computer chips, semiconductors, and it also means the
latest battery technology. And so investments. Now, should government do all of this, absolutely not, But the innovators are leading and so you see chipset manufacturers investing in the United States. You see battery manufacturers investing in the United States. The question is for some period of time, should there be some supportive policy that encourages those investments while the market
remains choppy. The market is going to be spiky for some period of time as we transform to these new technologies.
We're almost out of time. When do we get ROBOTAXI? When does self driving happen? For real?
Let's get to the innovation, the fun stuff for him.
Well, look, I think you can go to some places and get into robotax and right now, absolutely, you know what the problem is with highly automated vehicles. The holdup is not the engineering or the science. The holdup is the policy. Once again, we need a national policy that recognizes again same idea, the competitive importance of this NEXTOK technology in the US market.
So is this when we're kind of talking about that knowing that Donald Trump and part campaigned on deregulating, on making things like permitting easier, that's all part and parcel the.
Way you're talking.
Yeah, Oh, I think absolutely.
What I saw in the first Trump administration was a welcoming of this type of technology and flexible tools in the Department of Transportation toolbox to encourage those technologies. I look forward to those conversations with this set of regulators.
Is there a safety trade off there if you deregulate too much?
Absolutely not. There can't be a safety trade off. Absolutely.
Safety has to be first and foremost in the minds of what we do, and I think that's one of the benefits.
Of highly automated vehicle technology is more safety.
I just want to know when I can read on my way to work. I don't want to even look out the window. I want the car to drive me to work. That's what I'm getting at here. You want one of these, right.
I would love one of those now. By the way, in our commutes in Washington, d C.
That's a lot of time. It's a massive productivity story. Also, the car would drive my seventeen year old. The seventeen year old would not drive the car, something that I think masurance company wants.
We are half joking, but I know you're serious. I as we're talking about productivity gains, we're also talking about access to personal mobility for people who can't drive.
How about that not to mention safety. I guess while we're out of here.
You've got a lot to figure out in the next couple of years. To please get back to.
Us on the April.
Maybe I love it that that's true. You should be available. John Bozzella, president's CEO, Alliance for Automotive Innovation. Great to meet you and thank you for bringing your experience in point of view to us here.
At the table. 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.