Bloomberg Audio Studios, podcasts, radio news.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon Eastern on applecar Play and then Roun Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
I'm Kaylie Lines in Washington tracking the movement in politics, and while much of that this week has focused on the incoming president President elect Donald Trump and his transition the forming of his second administration, there is still an administration in place right now and a sitting US president That would be Joe Biden, who is taking his presidential duties abroad over the course of the next several days.
In fact, right now as we speak, he is in Lima, Peru for the APEC Summit, and on the sidelines of that summit. Tomorrow he will be meeting for the third time of his presidency face to face with Chinese President Xi Jinping. We want to get more on this meeting and the outlook for US and China policy, and turn out to Anne Ashton. She is founder of Ashton Analytics and of course knows a lot about China and this geopolitical relationship. Thanks for joining us on balance of power, Anna,
if we can just focus on tomorrow. Should we expect any tangible outcome from that Biden she meeting or is once again this mostly about talking for the sake of doing so.
Hi, Kailey, thank you for having me on and hopefully you can hear me clearly, my headphones suddenly stopped working, but.
I can hear you.
I can hear you. Great, Anna, perfect, We'll be fantastic.
So no, I don't think that we should expect any big outcomes from this talk. The talk is significant as
a sort of taking stock. As Jake Sullivan said that this is an opportunity to for the two leaders to assess how they've been doing with responsibly manage competition, you know, and they're likely to talk about sort of the perennial issues in US China relations, including Taiwan, China's relationship with Russia, and human rights issues, but really in terms of what the US policy towards China is going to be moving forward.
Bid Biden is now the lame duck president and all eyes are on incoming second term President Trump.
Well, yeah, and he certainly has made his feelings about trade with China, specifically well known, he's floated the idea of sixty percent tariffs plus on everything exported from China to the US. And I wonder, Anna, if you think that discussion around tariffs and those levels of tariffs specifically is actually just a negotiating tactic or something that is likely to come to fruition.
Well, we can all hope that it's a negotiating tactic, because of course sixty percent tariffs on everything from China would be inflationary, and you know, it would raise prices for American consumers and businesses, which is I think exactly the opposite of what most people were hoping would be accomplished with a second Trump presidency when they cast their
vote for him. You know, I think we should fully expect that there will be an increase in tariffs of some kind, whether it's sixty percent or something less than that, whether it's on all Chinese goods or on currently tariff to Chinese goods.
And I think we should.
Expect that because we know that Lightheiser has been involved in economic strategy for the incoming Trump administration, and we know that Trump has appointed you know, a series or has announced an intention to a point a series of people to significant roles who are known for being Chinahawks. But that doesn't necessarily mean that it's not a jumping
off point for negotiations. It could be, And we know that that Trump has a history of cycling through cabinet members and senior officials, so this could be the starting lineup.
Well.
And there's not just China hawks that will surround him in his second administration at the executive branch level of government ANA, but plenty of China hawks in Congress, which is going to be controlled by Republicans in both chambers. In fact, the Republican chair of the China Select Committee in the House is putting forward new legislation to revoke the US or China rather hit China's normal trade status with the United States. What would the consequence of that.
Be significant and not dissimilar to sixty percent tariffs on everything coming in from China. You know, I think that the writing has been on the wall for some time now that most policymakers in Washington feel that there needs to be a much tougher approach to China and there needs to be an expedited effort to make the US
less dependent on China. In a full variety of supply chains, and you know, Republicans by and large have been more aggressive of them, forward leaning in their approach to that. So we should fully expect that that will be on the minds of members of Congress, as well as on the mind of Donald Trump and his advisors.
And I think the key thing will be to, you know.
Hopefully their ears will also be open to people who are pointing out the perhaps unintended consequences of the policies that they're considering and ways to mitigate them.
We spoke anna with someone who did help to shape trade policy during the first Trump administration at the Commerce Department earlier this week, and her suggestion to us was that this is really about addressing China's over capacity problem, like flooding the world with supply that it doesn't actually need, that there's no demand for, and that you have to do tariffs, not just on China, but actually globally, inclusive of say, allies in Europe to actually help level that
out and address those oversupply concerns. I wonder what you make of that logic or if there is an alternative approach that could be utilized to have China stop producing so much and to pull back on some of this capacity expansion.
Well, I certainly questioned Kayleie the idea.
That applying tariffs to Europe is going to make a difference US applying tariffs to Europe would make a difference to.
China's over capacity.
I do think it's worth pointing out that Europe is actively exploring and pursuing tariffs on certain Chinese goods such as electric vehicles, because of Chinese over capacity and because of the fact that it looks like China is doubling down on its reliance on exports to help generate more robust.
Economic growth at home.
Right now, I think that that is going to continue to be a problem for the United States as well as other treating partners with China, unless China rolls out a very different approach to its economic recovery, one that more directly benefits consumers and causes consumers to spend money.
So Anna is effectively what you're saying, Actually, the tariffs could have the opposite of the intended effect, which is that because of the hit to the economy of China by not being able to export all those goods necessarily to the US, China could actually stimulate more, spend more money on trying to build out its productive capacity, and therefore make the over capacity problem even worse.
Well, I certainly think that if China feels that it can't successfully export to the United States, it's going to be trying to export elsewhere to our trading partners, and.
It will.
I don't see a sign that China is considering rolling back its efforts to stimulate growth by increasing exports of certain kinds of products, such as electric vehicles or lithium
ion batteries. It is possible that tariffs from the United States will cause a rethink, or that you know, China will consider policies that are US specific to improved ties by not offloading oversupply into the United States, which of course will be harder to do anyway, given tariffs and given other laws and regulations that are in place that make it hard to send things like Chinese electric vehicles into the US market.
Just quickly, and we have about a minute left here. The US China relationship is one thing, but the US also has concern about China's relationship with other adversaries like Russia. How should we be thinking about the nature of that relationship right.
Now it's going to be a really interesting few months as this new administration gets settled in, because, of course, you know, the Trump Trump hasn't always had a different sense of Russia and in Vladimir Putin than the Biden administration seems to have.
He seems to be.
Interested in more dialogue and in trying to come to an agreement that will end the conflict in Ukraine. Maybe not an agreement that Ukraine would like, but one that might settle things.
And I think, you know he's going to be pursuing.
That, which will change the dynamic between the US and China in terms of China support for Russia. If the United States is wanting to come to the table with Russia to talk about ending the conflict in Ukraine in some way, you know, China would like to have that conversation too. And if it is on terms where Russia is able to retain some of the territory that it has taken control of.
Of Astan Analytics, we have to leave it there. Thank you for joining us on Bloomberg.
You're listening to the Bloomberg Balance of Power podcast Ketch just live weekdays at noon Eastern on Applecarplay and then Roudoto with the Bloomberg Business app. You can also listen and live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
So as we consider those that Donald Trump has not tapped yet, we do know some that he has a few of them that he selected have actually been pulled from the House of Representatives. That includes now former Congressman Matt Gates for ag Florida Congressman another one, Mike Waltz for National Security Advisor, and then of course Congressman Elisetaphonic, who has been tapped to be the UN Ambassador for the US. So that reduces what looks like it could
be a very tight majority. And we want to turn now to a member of that majority, both the current one and the one in coming. Congresswoman Ashley Hinson of Iowa is joining me now here on Bloomberg TV and Radio. Congresswoman, welcome back to balance of power. Can the Conference afford to lose one more member to this administration or should would you encourage the President elect to stop here?
Well, I think it's very very clear we have a narrow House majority and we need to be able to deliver and to govern on President Trump's agenda starting on day one.
So that's going to be my priority.
I'm very very proud of our of course, next to you and Ambassador in Elis Daphonix. She's been a good friend of mine and a great mentor to me here in Congress as well. And I look forward to seeing the Senate do its job to confirm all President Trump's nominees so that we can execute on that agenda. But look, we have a very narrow house majority, we have one right now.
I would like to see us work together.
And hopefully I think what you're seeing here on the Hill right now is definitely a more unified government approach, and certainly in our House Republican conference, we are feeling that momentum heading into the next Congress.
Well, as the Senate does have to confirm these nominees, should they be armed with all potentially available information when they do so, Specifically, when it pertains to your now former colleague Matt Gates, does that ethics report need to come out?
Well?
I think, look who's going to be chairing the Senate Judiciary Committee. Every single one of these nomine is going to get a thorough vetting from my calling from Iowa and Senator Chuck Grassley. I know he has a lot of experience in going through this process, so I would just encourage all of the Senators to do their job and bet every nominee. But I think we do need to get these nominees through. President Trump did win this election.
We need to make sure that his picks do get that vetting, but that we can get them into place as soon as possible.
Well, all of that, of course, is going to come in the next Congress, and there is still been a business to finish in this one, including sorting out funding by the deadline in December. Congressman, we were speaking with your colleague Andy Barr of Kentucky yesterday who suggested to us he does not want to see the can kick down the road with another continuing resolution, that there needs to be a clean slate in January, and that means
actually getting the appropriations bills passed. I just wonder if that means we're either going to end up with that cr that he doesn't want or some kinds of omnibus to end the year.
Yeah.
Well, I certainly don't want to see an omnibus.
As a House appropriator I've worked tirelessly to get all twelve, all of these individual appropriations bills across the finish line. I'm very frustrated that we haven't been able to do that, But I do want to again make sure that on day one, come the next one hundred nineteenth Congress, that we're giving President Trump the best success plan.
I do think that also means clearing this deck.
But I'm going to wait to hear from the President, and I know our Appropriations Chair Tom Cole is.
Planning to do the same.
We want to see what he wants to do in terms of government funding, and all of that is going to have to kind of come colliding in with the end of your priorities for the farm bill. We're already talking about what the tax bill for next year is going to look like. So we just want to make sure that we're doing this right. What I don't want to see is a continuation of a lot of really, really bad Democrat policies that we've had to negotiate on
over the past couple of years. I think with the current balance of power and knowing what's coming in the next Congress, I think some of my colleagues across the Aisle may be a little bit more willing to negotiate heading into the end of the year.
Well, I did want to ask you about that farm bill, Congresswoman, considering you are representing constituents in Iowa that could be effect did ultimately buy this What is the prospect of that actually happening in this lame duck session.
Yeah, Well, I've continued to advocate to our leadership about this. Our producers and our manufacturers need this long term stability. We have some great investments, and therefore precision agriculture for trade, which I know is going to be a huge priority for the next administration, hasn't been much of one under the current administration.
So there are a lot of.
Provisions in there that I am excited to see move forward that I think are not only about preserving our food security, which I think is national security, but also again making sure that we can be competitive on the global stage. So I will continue to advocate to our leadership to hopefully get that done in the next couple of weeks. Again, I would defer to the chairman on that, Gt. Thompson,
who's been working in a bipartisan way. I know that passed out of the House with bipartisan votes out of the House Agriculture Committee, and our Senate counterparts haven't done any bill yet, so that's a little disheartening.
But again I'm.
Hopeful that they'll take up our House bill and I'll continue to put pressure on our leadership to do that.
Well.
Congressman, I'd like to pick up on your trade point because earlier this week here on Balance of Power, we spoke with the CEO of Landis, which is an agricultural services company, Matt Carson's, and this is what he had to say about the way in which trade relationships is that influences agriculture should be approached.
Take a listen, and then I'll have your response.
We've got to make sure that both sides are being understood, whatever the solve is and whatever the cause and effect is to agriculture, because those international markets are absolutely critical for companies like Landis and Conduit that are trying to move those goods out of our state, out of the Midwest and get them into a position to go into a global market. And when you lose a volume like we have the China, that has a long term ripple effect and it's hard to recover from.
So congresswoman.
As the President elect has talked about ratching ended up ratcheting up tariffs on China, what should farmers in the agricultural community be bracing for in terms of potential retaliation.
Yeah, well, for every action that we take, we know China is going to take some sort of action and to retaliate. I think the most important thing here is that President Trump is the first president in a long time to actually stand up to the Chinese Communist Party and to stand up to President she. If there's one thing that I know, it's that China has been taking advantage of the United States for decades. They haven't been
following normal trade rules. And while they are a very critical market for our producers, not just from Iowa, but from this country, we need to make sure that we are playing fair going forward. You know, it was in my district just about ten years ago that the Chinese were discovered trying to literally steal seeds to take them
back to China, to reverse engineer them and cheat. So they're cheating, they're trying to steal our intellectual property, whether that's in the manufacturing space or in the agriculture space. So I look forward to seeing a tough stance on China. This current administration has not taken a tough stance, has really acquiesced there.
And now we see that debt trapped diplomacy.
Continuing to happen all over the world with President she you know, going around and handing out cash all of these nations. We need to be making sure we're making entrees to people who not just for trade relationships, but for defense purposes.
As well, and I will look forward to.
Seeing our new Defense secretary and the President work to achieve those goals so we can actually be competitive on the global stage.
Again.
Well, we have seen this administration leave intact the tariffs in large part that were put into place in the Trump administration and expand export controls as well. But you, of course did on the China Select Committee, which makes you a very valuable voice on this, and I wonder if you support that committee's chairman, Chairman Molinar's legislation that he put forward this week to revoke China's normal trade status.
Are the votes there for that.
We're definitely taking a look at all bills, but I think what I support about the chairman is that he is taking a tough stance on China, they have not been following the rules. I'm not sure if that bill is the ultimate answer here. We definitely want to be cognizant of the impact to agricultural states like Iowa. And that is one thing that I I heard loud and clear from my producers is you know, we still need
to be able to sell our products to China. So I want to be cognizant of that in any stance that we take. It is a pretty bold stance, and what I will say is that I think we do need to be signaling though that we're ready to get tough on them. Right if you don't play by the rules, and you don't start playing on a level playing field, and you continue with these malign practices, then there are going to be some consequences there, and I support the Chairman in his efforts to do that.
Well.
President Biden is going to be sitting down with Chinese President Chieshin Ping in person tomorrow on the sidelines of the APEC summit in Peru. It's their third such meeting of his presidency, and obviously, as his presidency is almost over, it will be the last. And I wonder if you still see room here for some kind of forward movement to be made when it comes to this relationship and the normalization of communication here before President Trump takes office in January.
Well, I think communication is always a key goal no matter who it is that we're trying to work with.
As I said, we need to make sure we still preserve those markets for trade going forward.
I'm hopeful President Biden will continue to hopefully express that we need to have American dominance. America needs to be strong on the global stage. And again, this is about fairness and a level playing field. And so I think what we will see as president she probably take a little bit of a different posture knowing who's coming in next. He's seen this show before. He knows that President Trump talks tough carries that he's not, you know, speak softly
and carry a big stick. No, it's speak loudly and carry a big stick too. So I think that he certainly understands what's coming down the pipeline.
But again, my goal for diplomatic.
Relations is always going to be to be able to have open lines of communication.
How important, as we don't have the announcement yet as to who Donald Trump would like this to be congressome, when will the US trade representative be in this next administration? And is there anyone you hope gets the job.
Yeah, well, certainly, Ambassador Leiheiser did a I think fantastic job. We've had him actually as a witness before our China Select Committee several times to to talk about the importance of trade. I would certainly hope someone like him is being considered for that. You know, it took far too long for the Biden administration to get a trade representative
in place. I think we have suffered economically. We see major gaps in our trade export numbers, and we are actually experiencing a deficit in that in some key sectors for the first time.
We need to reverse that.
And I think that someone like Ambassador Lthheiser would be great if he decides to come back. But I look forward to seeing who the President picks to fill out the rest of his cabinet, because I do think Agriculture Secretary and obviously Trade rep are going to be critical for a state like Iowa.
Well, you and me, both, congresswomen, I'm keeping a close eye on the wire to see when more names come down, But we sincerely appreciate you joining us here on Bloomberg TV and radio. That is the Republican Congresswoman from Iowa, Ashley Henson.
Life from Capitol Hill, your list name to.
The Bloomberg Balance of Power podcast Ketch just live weekdays at noon Eastern on Epocarplay and then roud Otto with the Bloomberg Business app on demand wherever you get your podcasts, or watch us live on YouTube.
I literally glued to my Bloomberg terminal and specifically the ni heads function. If you have one, you know what I'm talking about, because we're tracking everything that's coming out of this Trump transition team. Donald Trump just confirming that Stephen Chung, who of course was working with his campaign, will be joining the administration as director of Communications. But sources now telling Bloomberg someone doesn't want to join this
second administration, Larry Kudlow. Remember there was reporting earlier today that Larry Cudlow could be up for either National Economic Counsel or even Treasury Secretary. It's currently a host on Fox Business. But source is telling us that he has told the Trump team that he does not want a job in this second term.
So who's going to get it.
We still don't know about Treasury secretary or other important economic roles that could help shape economic policy under a second go round with Donald Trump. So let's turn to our political pain for more. Jeanie Shanzeno is with me, Democratic analyst, Bloomberg Politics contributor, and senior Democracy Fellow at the Center for the Study of the Presidency and Congress,
alongside Ashley Davis, Republican strategists and principle at West Front Strategies. Ashley, just to begin with you, we've kind of seen this happening where people are taking themselves out of contention. John Paulson did it. It was too financially complicated for him. Now I guess Larry Cudlow maybe would rather stay in the anchor chair. And it's all kind of playing out publicly in the press. What do you make of it?
I mean, that's not real surprising with the Trump you know, we're back to the waking up every day to tweets or now it's yeah, true social posts, true spocial So
I mean, I think it's not surprising. And what I was what was really interesting was your earlier segment on Jamie Diamond, because I think him being a little coy during the election of really not supporting either candidate was probably why Trump right away came out and said, you know, Jamie Diamond's not going to be I mean, talking about one of the best Treasury secretaries he could pick, it would be him. I also agree that I think that the names that are being floated right now for Treasury
secretary are probably not who it's going to be. I mean, at least the final contenders, because I think that he would have made It's obviously one of the most important positions, and I think that he, uh, there's some reason he's not picking one of them. But I do think Linda McMahon gets commerce because I think she's just slow and steady. She's keeping under the radar screen, she's being very professional, and so I would expect that to happen.
I hope.
So she's a good Yeah, of course, former small business administrator during the first administration. Genie, I wonder what you make of that, the fact that people are trying actively in public to secure this job, could that make them actually less likely to get it?
It?
Absolutely could?
You know.
The reality is it's hard to get in Donald Trump's brain. I mean, you know, just reading what Mark Caputo was reporting about how Matt Gates rose to the top of that list. Apparently early this week he wasn't even on the list for ag I end up flying to the Washington together, and Donald Trump, frustrated by the other contenders talking about legal theories and the constitution, looks at Matt Gates, and Matt Gates says he's going to go over there
and start cutting heads, and he gets the nods. So you know, this is back to what you guys were just talking about. The Donald Trump who likes to do this as a reality TV game, and so this is where we are. So I would never pretend to know what he's going to do next with treasury or otherwise.
Well, it is interesting, though, Ashley, when we consider what we were hearing from him on the campaign trail, the messaging that ultimately got him elected to a second go at the presidency. Part of it was the border, and we got a lot of those kind of appointments first, not just Christy nun for DHS, but Stephen Miller for example,
being tapped, Tom Homan being tapped as well. I would have thought, based off of what he was saying, that he was going to take on the economy next, right, It was fixing the economy that he was running on.
Absolutely, but we have to remember it's only a week.
It feels like it's been a year exactly.
That's why I do think that he hasn't that there's probably someone else out there. I mean, obviously you've still have been young, and who would be fantastic as a Treasury secretary? You know, is does Haggardy come back?
Maybe?
You know, he's always someone that's been talked about. But I do agree as well that there's probably someone from Wall Street that's going to get it. I would expect that we find someone over the weekend or by Monday, or he announces someone.
Well, certainly we're all hoping for that here on Bloomberg. This one's really important to us because it's a reminder as well that Donald Trump, as I was saying, made a lot of promises on the campaign trail, a lot of things he would like to do from an economic perspective, but he only has so much unilateral power as the president,
especially in kind of enforcing these kind of things. So just characterize Ashley how important these roles actually are in ensuring that Donald Trump's agenda actually becomes reality.
Treasury and USTR Ambassador is very important, especially in regards to Tara for both friends. Obviously, the Sexuary of Commerce is also very important important, but a lot of the policies, obviously with tax reform coming up, Treasury is going to the Hill's going to look to Treasury a lot to see what the Trump administration wants. But at the end
of the day, they have to pass the bill. And I do think some of what Ashwoods Congressman Henson was saying in regards to the small numbers in the House, I do think some of those members that are kind of the far right that have caused problems for the last few years for the Speaker and obviously McCarthy before that they're going to get in line better if it's
Trump's policies because they're Trump people. Okay, So I actually think that the moderate Republicans Brian Fitzpatrick and others are going to be the ones that have more of the power this time than the extreme right.
Well, and they're the ones, right Genie that need to get reelected in twenty twenty six so that Donald Trump doesn't say, get impeached again if we have a democratic House, because he has four years. This Congress only has two. So it makes those kind of frontline Republican men, if you will, really important.
Oh, they are absolutely important, you know. And I think we forget that he's coming with a much narrower margin in the House than he did the first time. But to Ashley's point, you have a lot more people who line up with his you know, make America First values, and so he may be able to make up for that. But I'm not one of the people who thinks that, And I've been debating with so many of my friends on this that this is a Washington on the Republican
side that is without schisms. I think there are schisms in Washington on the Republican side, and we are going to see those play out.
I mean, you just look at.
Who he is nominated so far, and you can see people with vastly different governing philosophies from you know, say a Marco Rubio all the way to Matt Gates. Now you know, who knows who's going to get in, but
you know, America First. The Donald Trump Republican Party is a big party now, and they've got p from all different elements, and the trick is going to be able to make them work together and I think it's going to be easier said than done when it comes to passing some of these economic bills that he has talked about on the campaign trail.
Well as we consider potential schisms within the party leadership is a question here. I actually spoke with a member of the newly elected and current Senate leadership, Republican Senator Shelley Moore Capito of West Virginia, last night, specifically on this notion of recess appointments that could be made by Donald Trump.
This is what she told me.
We can fulfill in the regular order way of confirming the nominees, and that's what we intend to do. I think all of this talk about recess appointments is way premature.
I don't believe that's the direction that we want to go, and I don't think President Trump will want to go that he wants the confirmation of the Senate because we're going to be working together all throughout these next several years, and we need to make sure that we respect each other's roles, but that we have the confirmation from each other that's we're moving in the right direction.
So she doesn't think Donald Trump is going to want to abandon the checks and balances here, Ashley, but she can't know for sure what Donald Trump wants any more than the rest of US can. And I wonder if you do think this brand new leadership team that's going to take a hold in January could potentially run into conflict with Donald Trump pretty early on.
Well.
I think the statement that John Thune made is right after he got elected, was the fact that he's going to keep the filibuster in place. And I to me, no matter what side of the out you're on, I think that's a very important. If we don't have that philibuster in place, no matter if you're a Republican or Democrat, there's going to be really bad policies that are passed beyond what already gets past sometimes. So I really was
I was really happy that he came out that. I think that Trump will go after him publicly, just like he did McConnell when McConnell said he's keeping the philibuster in place. So I think that's going to be the number one moral I agree with the Senator with Senator Capitol, I really as I said earlier in the segment, I think this recess appointment is a little bit of a noise right now.
Well, I guess we'll I'll find out come January whether or not it's noise or real.
It's sometimes hard to tell.
You also think we're going to be in until like Easter, because they're going to want to get stuff done. They're going to pass the budget resolution, They're going to do tax reform right away. I think we're never it's going to be crazy, so much to look forward to.
Just when we think we might get a break at some point, Ashley's like, just wait, you won't keep your jobs right. This is very true. Is certainly going to keep Genie Shanzano busy as well.
Genie.
If we consider everything as Ashley is outlining, this incoming Congress is going to want to get done. We already discussed what is a very tight majority. It's going to be in the House. In the Senate right now, the majority is fifty three. But there is a recount in Pennsylvania in the Dave McCormick, the Republican versus the incumbent Democrat Bob Casey race. Do you think there's potential this goes down to fifty two or is that a recount going nowhere?
You know, historically the recounts done in Pennsylvania. I think there were four, and they have all gone the way that they were originally decided or initially decided. So my guess would be that it still remains with Dave McCormick and Casey is going to have to concede. And you know, while I do agree that Donald Trump may be throwing out a trial balloon on the recess or more likely to threaten the Senate, no president worth their salt is happy with the advice and consent of the Senate. They
all want to get rid of it. Nobody wants to have to go to somebody else to do their job, so you know, he doesn't want to have to go there. And I am waiting with baited breath because Kaylee, remember when he said, Mike Johnson and I have a secret, And of course that secret is the recess. I don't know, but the House Speaker has an enormous role potentially there. So Hayley, don't sleep this week and figure the secret out, would you.
I was told that the secret was Teletown Halls during the final startch of the campaign for the House.
I don't know, maybe we'll find out.
Probably was then who knows.
The secret will remain secret. Perhaps Ashley Davis and Jeanie Shanzino our wonderful political panel today. Thank you both so much for joining me and enjoy the weekend certainly well deserved for everyone who has had to keep track of what's going on here in Washington. We've talked a lot about what could happen in terms of the economic policy team, but we have to focus on the legal and justice
team as well. Bloomberg Sarah Forden is on her way in, and we'll have Democratic Congressman Brad Sherman of California as well.
On Bloomberg.
You're listening to the Bloomberg Balance of Power podcast Ketch just live weekdays at noon Eastern on Applecarplay and thenroyd Oto 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.
We're still awaiting some pretty important cabinet picks from the President elect Donald Trump, think Treasury or Commerce roles that you might think would be pretty high on the checklist in terms of nominees. You need to get out there, maybe less so lower down on the checklist you might expect would be say, US Attorney for the Southern.
District of New York. But that's what we got yesterday.
Donald Trump has tapped Jay Clayton, the former SEC Chair, for that role. He's also tapped a number of his personal attorneys to serve him in this upcoming administration, and of course most of all, he has tapped former Congressman now Matt Gates to serve as Attorney General. Though there are some pretty serious confirmation questions there. But we want to get into all of these questions and turn to Sarah Ford and who leads Bloomberg's legal coverage here in Washington,
and she's joining me in our DC studio. So, Sarah, if we could start with Gates, because if confirmed, he would be running the entire Department of Justice.
What would that actually look like?
In what ways could he potentially dismantle the existing structure?
Well, I mean, there's been a lot of coverage of Trump's angst about the Justice Department, the investigations well also dating back to the Russian investigation under the former leader of the FBI. In that case, you know, the Justice Department includes the FBI, the Criminal Division, the Civil Division, the Human Rights Division. It's a massive law enforcement agency, and you know the aim is to whittle it down and to weed out anybody who isn't loyal to the president's agenda.
Well, of course, Matt Gates has argued that the Justice Department has been weaponized against him, and Donald Trump has argued the very same, because he, of course has been indicted by the DOJ, specifically Special Council Jack Smith in two separate federal cases that he's now Jack Smith that is trying to wind down before Donald Trump takes office. How is that process likely to go and is everyone who was involved in it going to have to leave the DOJ before Trump takes the oath.
Well, it's most likely that they will all leave ahead of time, and they're winding down the cases because they have a long standing policy to not prosecute sitting presidents. So there's no you know, thinking to wait until Trump gets into office. You know, this is inevitable. These cases are going to go away, and so Jack Smith is preparing his filings to dismiss them. He's asked for a little more time to do that. This has not been postponed till December second, and the issues are a little
bit different in the two cases. So the January sixth case is about Trump's efforts to overturn the results of the election. The Florida case is about his handling of classified documents, and that case was thrown out by federal Judge Eileen Cannon arguing that the special council. The dj
wasn't authorized to appoint the special council. So that is an issue that Jack Smith wants to actually try to preserve because for decades in this country, president and the Justice Department have appointed special councils, you know, going back to Nixon and before.
We're the one that investigated Hunter Biden for example.
So this has been, you know, very standard practice of law enforcement to put a special council in charge of a politically sensitive case. So Jack Smith and his team are going to try to argue that appeal in a way to protect and preserve that right.
Well, so that's that team, which was of course the prosecution team. Then there was the defense team for Donald Trump in all of these cases, his personal attorneys, some of which are now going to be having a role in his second administration.
Well, and these are people that really put out for Trump and really successfully got those cases delayed and delegitimized in the views of many. And so he's, you know, in his loyalty principle, he's rewarding the people who who came through for him. So Todd Blanche, Emil Bove, Dean John Souer, all of these people are now going to be flanking him in his new administration.
I want to, finally, Sarah, ask you about Jay Clayton as well, who, of course is best known to our audience here as the former SEC chair. He's getting sd and Y. So he's the cop literally on Wall Street. And I wonder what we should make of this pick. He was, I guess involved in securities law, surely, but what about criminal law.
Well, exactly.
I mean, he's a seasoned lawyer, he's senior partner with Sullivan and Cromwell's part of the establishment. He's seen as more of an institutionalist than some of Trump's other picks. But at the same time, the whole criminal enforcement area is a brand new chapter for him. So it's going to be interesting to see how he's going to interpret this mandate. For example, s d and Y, the US attorney in Manhattan, has been famous for going after financial crime,
insider trading, white collar crime. So the question is are the priorities of this office going to change? Are we going to see sdn Y get involved in a push on the immigration agenda that the Trump administration has, So we're watching that very closely.
All right, well, we look forward to the continued reporting from Sarah and her team on this Bloomberg Sarah Ford, and thank you so much, and we want to get reaction as well from Capitol Hill to some of these conversations and others. In turn, now to Democratic Congressman Brad Sherman of California, who's joining me live from the Hill here on Bloomberg TV and Radio. Congressman, welcome back to
Balance of Power. There's much I'd like to discuss with you, but would love for you to take a swing, as you do sit on the Financial Services Committee, about Jay Clayton being a different kind of cop for the financial world potentially in the second administration.
I think Clayton is one of the more reasonable picks for Donald Trump. I realize that isn't a real high standard, but I think is an entirely reasonable pick to be the chief prosecutor in the nation's financial capital.
And what about the other picks that I feel like you are alluding to, Sir.
Oh my god, Matt Gates Attorney general. Wow, it is just stunningly bizarre. Especially you'd think that Donald Trump, who says we should have openness with the American people, isn't demanding that the Ethics Committee investigation, which was supposed to report today and might still report today, that that report
isn't made public. How can we spend all this government money, have a Congress, which is a House of Representatives, which is in Republican hands, do a bipartisan, fair investigation, and then hide it from the American people. I think that's outrageous.
Well, I guess we'll see if that either leaks out or is formally issued, and we'll see whether or not Matt Gates ultimately is confirmed for that job.
Congressman.
I'd also like to ask you about a man with a job currently, and that is the FED Chair J Powell, who has had to field questions about whether he would resign if asked by Donald Trump. He's stated it's not legal for Trump to demote him or anyone else in FED leadership. But I wonder if you think those theories will be tested in this incoming administration.
I wouldn't put it past Trump to try to do things that he doesn't have a legal right to do. I'm counting on the court system to defend our laws. And I think Jay Powell will serve out his term.
Well, and he certainly has more work ahead of him. Just in the next couple of weeks, Congressman, there will be a rate decision. The market seems less convinced that they're actually going to cut rates again before the year is out, But do you believe the economy needs it, Well.
You've got to look at what the economy is going to be next year. Trump is proposing policies which, according to the Peterson Institute, are going to boost inflation between four and seven percentage points. That's worse than COVID's effect on the inflation rate. And we would rely upon the Fed to somehow do its best to control inflation. Of course, higher interest rates are bad for consumers, just as inflation is bad for consumers.
Well, so I guess we'll see how the Fed navigates that next year. But before this year is over, Congressman, the government also needs to be funded. There's a deadline coming up for that as well in December, and I wonder if you think it's more likely we end up with a continuing resolution or an omnibus package.
Congress will tend to kick a can down the road, and omnibus is much more difficult to put together. I wouldn't be surprised if there was a continuing resolution until at least February. Republicans are talking about a continuing resolution all the way through the end of the fiscal year in September. And given how much I'd disagree with the things they would try to do in our Appropriations bill, putting the government on automatic pilot is it's not good, but it's not as bad as all the things.
Well, try is an operative word there, sir. The votes will still be required, and it does seem that in the incoming Congress it is going to be, once again, as we've experienced for the last two years, a very tight majority, especially with Donald Trump having pulled not just Gates but two others out of the Republican Conference for roles in the administration. Is there a way Democrats can use that to their advantage.
Well, in the Senate they're going to keep the filibuster, and in the Senate. They have only a three vote margin. So for example, if only four Republican Senators will stand up and say we can't vote on Matt Gates until we see the Ethics Committee report, then there'll be an important step for for honesty with the American people, the
openness and uh uh on on that nomination. I would suspect that they will not allow, for example, Stephanic to take her role as UH as UN ambassador until such time as they've had special elections to fill other seats, say they can't operate with with you know, with a one seat majority, and we'll see how the elections come out. I think the ones in California that are still in uncalled or going to go our way.
Well, I'm glad you raised a last stephonics Sir. She, of course, as you alluded to, tapped his ambassador for the United Nations.
We also saw former Arkansas Governor Mike.
Huckabee tapped as ambassador to Israel, and I wonder what that says to you about the way in which Israel policy could look different as we move forward into this next administration.
I think Stephanic will do a good job, probably in the mold of Nikki Haley. I think Huckabee has gone way too far and will lead Israel in the wrong direction. Israel may be able to take extreme positions and still remain popular in the Republican Party of the United States, but there are eight billion people on this planet. And if Israel only has the support of Israelis, or a majority of Israelis and a majority of Republicans, then Israel is isolated from the rest of the world. The fact
is that Israel seventy six years old. During its first half of existence, Democrats and Republicans were in control about halfway half the time, and that'll be true the next seventy six years. And if Israel puts itself in a position where it has no appeal to those to the left of Donald Trump, that's a terrible position for Israel to be in.
Congressman, we just have a minute or two left here. The Washington Post reported this week that the Israeli Prime Minister Benjamin net Yahoo is preparing a ceasefire in Lebanon as a quote unquote gift to the incoming president Donald Trump. Do you think that is actually achievable before he takes office.
I think if Hezbollah will follow the UN resolution. Usually UN resolutions aren't particularly good for Israel, but will follow you in resolution and move north of the Latani River as they agreed to do decades ago or over a decade ago, that we should get a cease fire. And I don't think we should continue killing people unnecessarily on either side just to make a gift to an incoming US administration. Israel should conclude a cease fire when it can do so in a way that will keep its
northern Israeli safe. And that is pretty much a decision Hesbola has to make. Are they willing to do what they agreed to do over a decade ago and move north of the Latani River?
All right, Congressman, appreciate your time on this Friday, sir, enjoy the weekend that is. Democratic Congressman Brad Sherman of California, a member of the House Foreign Affairs and Financial Services Committee, here with us on Bloomberg TV and Radio.
Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already an 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.