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, Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
We have the voice of an expert on geopolitics.
We're balancing the economy and geopolitics, just like the White House is today. Agar Shamali has actually been their former National Security Council official now Greenwich Media Strategies. Great to see you back, Garth, Thanks for joining. I wonder if this is a productive meeting or not that's underway in the Oval right now. Cure Starmer wants security guarantees just like Europeans. Donald Trump says they're not going to get them.
Well, this certainly that with the coming of the Trump administration, it's rattled Europe's security and they're feeling of security. They've got a war in their backyard and they're really concerned about what the means. I was in at the Munich Security conference just a week ago or two weeks ago now, where this was the theme that really overtook the conference. Everybody was talking about it, but in my experience, they
weren't panicking as much as everybody was saying. A lot of the sentiment was we have to invest in our defense intotelligence. We haven't invested enough over the last several decades. We've relied on the United States, and now is the time to step it up and to do so incrementally.
And that's the view of the NATO Secretary General as well.
So I do think it makes sense for the UK to come to the United States.
We are we have a very close alliance.
They have been there for US with Iraq, with Afghanistan, with series of security issues and wars and conflict, and so I do think it makes sense for him to get to go in there. I'm not so sure what he expects will come out of it, unfortunately, because I just don't think the administration negotiates in a way where they're giving things away without getting something back.
In her Trump.
Well, we were just hearing President Trump asked about whether or not he thinks the deal would be kept if there would be a problem with security, as Ker Starmer is saying, a peace deal, if there is to be one, needs to last. President Trump Hagar says he's known Vladimir Putin a long time and doesn't believe he will violate his word.
Do you believe that? Yeah?
No, I absolutely believe not only that will Putin violates his word, and he will do so happily and has proven to do so multiple times over the last several decades, but over the last twenty years. But it's also the fact that negotiated settlement. And I'm not trying to seem like I'm a warmonger. I don't want war to last
longer than it needs. But if you have a negotiated settlement where Putin comes out with more than he should get and nothing that prevents him from from invading again, then it just gives him time to resupply his army, to rebuild his troops and his weapons and his stockpile, and to pick himself up and go after to go and maybe to invade Ukraine again. But it could be Georgia or Moldova. And the thing is, the proof is
in the pudding. Putin had pursued this type of aggression since two thousand and eight, when he first went into Georgia, and we know that if it's not outright aggression that his tentacles are reaching into these countries in Moldova, Slovakia, all these other countries, Hungary where he's trying to push a pro Russian movement and control these countries, perhaps without
even needing to invade them. And so any kind of deal that is shaped needs to include, if not some kind of promise of NATO membership, then some kind of provision that triggers NATO membership if Ukraine is invaded, if these other countries are invaded. Now, I know that's complicated. You can't guarantee that for sure. What does invasion mean? Are you going to have a NATO membership that will in fact approve it in the instance that it's needed.
But there needs to be something there in place. And I do know, because I've been speaking to the White House. I do know that there are advisors advising Trump to do that.
So we'll just have to see how it turns out.
I want to ask you about specifically security guarantees or what this White House sees as something.
Just as good, Hugar.
We've heard this back and forth a couple of times now that with a minerals deal, there'll be US officials there following up on the elements of that deal that an inherent security guarantee will come because US investment is there. This was brought up a short time ago in the Oval Office. Donald Trump said, the backstop will be Americans working in Ukraine to implement a.
Rare Earth's deal.
With your experience on the National Security Council, is that a realistic view?
And you know what I feel with Bloomberg and with Bloomberg's viewers. Would any of those viewers accept a deal that isn't written in a contract? And then so the answer is no, that's not secure enough. Yes, of course, if you have US presence and you have US companies, does it.
Mean that would it help?
Sure?
Perhaps, But it's no guarantee, and you have that any anywhere around the world could land in a conflict and the US has to leave. When Russia was first annexed crime in twenty fourteen, I was at the Treasury Department at the time, and we had a lot of American companies tell us that they did not want to leave Russia.
Now the conflict wasn't there, but they didn't want to leave.
They didn't want to They didn't want to leave their energy investments or drilling in the lurch, and we told them they had no choice. So that's never a guarantee. If you have American presence of broader American companies, that doesn't de facto mean that they protect territory. It just maybe there's an incentive for the US to ensure that they're protected. But it doesn't mean anything unless it's written
in stone. And I think that when it comes to presidents of Lensky, and I'm watching him be a very adept leader. He is trying to work with Trump. He's the one who came up with the minerals deal to begin with back in October, with his victory plan. Now, he may have not expected that Trump would ask for five hundred million dollars worth of minerals, or that it might not come with security arrangements, but he knows.
He has no choice but to work with Trump. Trump controls the purse.
Strings, but he's also not gonna levy attacks on his people for generations to come without something in return. And Europe is there, so they're going to do that. But we have to remember that Trump is a maximalist negotiator. He pushes out the maximus scenario that he can try and get because he knows he's going to get something less and again, not my style of negotiating. However, I do I hope, and I know hope is not a policy.
I would hope that there's something there. We don't know all the terms yet, but I believe that that there will be something there that will be enforced in a negotiated settlement that should prevent Putin from invading again.
I hope that that is the case.
I would hope that the Trump administration knows that it would only be emboldening Russia if it doesn't include that kind of provision.
Well, we just heard President Trump say again, and we've heard this from the administration before Ukraine joining NATO won't happen.
Hagar.
We have less than a minute left here, but I do want to ask you about another conflict. Is it's this weekend that the Phase one of the ceasefire agreement between Israel and Amas is set to expire. What do you think happens next?
That's said, so, I'm glad it expires Saturday at midnight.
That doesn't necessarily mean that war will start, that the bombs will start at one am. It could ostensibly, But what we will have, in reality is likely an extension of a few days of this ceasefire, and the language of the of Phase one was actually written where the existing terms of the ceasefire for Phase one can continue.
For a few weeks.
Even so for a few days up to a few weeks, meaning for a few days or a few weeks, you could have, and it seems that there is a desire for that. You could have even a continued exchange of hostages for prisoners. You could have a continued a state of the ceasefire that has been the case for.
The last six posoks. While these folks are negotiating Phase two, and they are negotiating Phase.
Two, I don't believe these two would if they were to even come to an agreement, would even look the way President Biden.
Has plan it out back in May, where you have all the hostage.
From regard we have to leave it there. Hagar Shamali, formerly of the National Security Council. With us here on Bloomberg.
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, play Bloomberg eleven thirty.
It'll be on Tuesday that we're talking about a joint address, a joint session of Congress. It's like the State of the Union, but they don't call it that the first time around. For the new president, it'll be an update on things, the state of our Union. He'll probably still say that is what getting stronger, getting greater again. A lot of questions about who would have the honor of going on the front of the wheaties box here, not
always a very easy assignment to deliver. If the official party response after the speech, it will be Senator Elissa Slotkin Michigan delivering the official Democratic response. So next Tuesday night, after we do the whole speech, the call in response, and everything else that happens in the House chamber, that's who you'll be hearing from. It'll be curious to consider what the optics are going to be like whether a
kitchen table is involved. I'm Joe, Matthew and Washington. Thanks for being with us here on the Thursday edition of Balance of Power. I see you Axios on this little Friday. We've got news at the White House. They're in the Oval Office right now, Kuer Starmer, Donald Trump, the President, the Prime Minister sitting around the fireplace, presumably with a press pool in tow and because it's in the Oval, we're not going to be able to bring you in there live, but we will once the tape comes out
of there and they can play it back. There have been questions about this whole press pool thing and exactly who's going to be assigned to it each day according to the White House, but this is supposed to play out essentially the way the Macron visit did a cup
days ago. You get the bilateral and the Oval, spend some time with the media, little Q and a warm things up, and then later on it's currently scheduled for two pm, and that will likely not be anywhere near the start time of the joint news conference in the East room.
Starmer Trump.
By the way, the British media they don't ask questions the way we do around here, so this could actually get interesting when we hear some of the more pointed ideas from the British press. They're all here, everybody's over there. It's a big crowd on the campus at the White House, and that's where we start our conversation with today's political panel.
Genie Shanzo is with this Bloomberg Politics contributor, Democratic analyst and senior Democracy fellow with the Center for the Study of the Presidency in Congress, and Chape and Phase Back, Republican strategist, founder of Lighthouse Public Affairs. Great to see you both, Chape and it's been a while and nice to have you back here on the panel. Genie, we went through this together a couple of days ago with Macron. There's already a different vibe though, right between these two.
Donald Trump actually likes Keir Starmer and seems to want to offer some sort of deliverables, even if not in the actual literal definition of security guarantees. What's going to come out of this visit, Yeah, I mean it hits.
An uphill battle for Starmar, certainly because we heard from the President yesterday that, you know, the security guarantees that McCrone came asking for and Starmar is asking for are probably not going to be forthcoming. Although he did say that Russia would have to give up something. We don't know what that is, so maybe there's a little movement there, I think for Starmar. Of course, what you were just
talking about is the issue of tariffs. And I just loved your conversation with Mike McKee because I love Mike McKee, and he said there is no clarity here, so I said, oh, thank god, Mike McKee.
I thought it was just me.
But Starmar is certainly trying to get some clarity on the tariffs which are pending. So I think those are the two big things we're looking for. But of course it is a really fraught time in Europe. And you know, somebody reminded me that there was a column the other day from Martin Wolf saying the US is now an enemy of Europe. Now that's certainly overstated in my mind, but that's the view of some people over in Europe.
So they're going to be treading a little bit carefully, I think in this meeting today, and certainly the press are going to be fascinating to hear from overseas.
How's this going to go chap It in your view? And what would make this qualify as a win for Donald Trump?
Well, of course for Donald Trump extracting any sort of concessions or anything that he can you know, go to the reporters and talk about extracting from from them or him would be a win. What that is you know, maybe anybody's guests at this point, I think Genie's write about the two top topics and what's important. I think
she's also right about this is a fraud time. I agree we are not Europe's enemy, and I find that view a little strange considering, you know, America has been the world's piggybait, the world's police policemen, the world's protector, all.
Of this stuff.
And Donald Trump has a mandate to be transformational. So he's taking a look, rightly, So with these relationships, what are we getting out of it? How is it serving American interests? I think, as opposed to the last four years, you're going to see a president who that's really his only concern. Now you may disagree with what he thinks is an American's interest, but I think that's the framework that he's using for these meetings.
This is a different relationship though, right, isn't it. Chapin, It's one thing to have Emmanuel Macrone. He says, hey, here's a manual. You know, there was a lot of kind of chest thumping between these two trying to get the better of each other.
He actually likes here, Starmer.
They've had a relationship going back to before the election, and there was a two hour phone call that followed Donald Trump's victory. He also likes the United Kingdom. He wants to get the invite for the state visit and spend time with the king. Right, this is potentially a different vibe in this meeting today. Could it help here, Starmer?
I think it can help both men. You know, relationships matter for all the you know Ballely who over. You know Trump's relationships from his first term with you know, dictators, and you know North Korea and Russia. I mean, relationships matter, right, He cares about peace between Ukraine and Russia. So I find it very odd that all the that everyone seems to be in favorable war and and more money and soldiers and manpower being sunk into this thing. So it
is a different relationship. Perhaps the UK is a little harder of a target when you're when you're blustering against world leaders than France is, but it is it is a historically important relationship too, and I think both men understand that as well.
The special relationship. Genie uh facing a new reality today, what will look like by the time there is a deal, presuming there is one for Ukraine.
Yeah, first of all, to your point about him liking a great Britain, he certainly likes the royal family.
And you know, you're wonder.
If Farmer should have brought with him Princess Kate and Prince William because he's no fan of Harry and Meghan as we know full well, but those two he really seems to appreciate, so that may have, you know, lund him in good Steed there. You know, I think this agreement is fascinating because it is so very vague what we know about it at this point. You know, they're talking about this jointly owned investment fund. It's going to involve new resources, not the old, but again no commitment
on security or additional funding for the wars. So what this looks like in terms of the specifics are very unclear at this point. It sort of reminds me what we saw out of the house the other day. This is sort of like a framework with the specifics yet
to be filled in. But I do think this is an important first step for Zelenski and I think the agreement of this framework as I'm calling it, is important because number one, he gets to talk to visit with face to face with President Trump before Putin, and that is a win for Zelensky because for a while we thought maybe Putin and Trump would meet face to face first, so that is important. And also he gets to let Donald Trump celebrate a win, a victory in agreement. Nothing
Donald Trump likes more than an agreement. So here is one, vague as it is, and then they can move forward on the specific So I think this is a good day tomorrow for Zelenski, but I think from a foreign policies perspective, it is an awfully odd day for the US that we would be requesting from a war towards the country payback.
You know.
It has a very very sort of of concerning I think for long term prospects of our relationships around the world. But a win for Zelensky for sure in the short term.
I'm guessing, based on what you said earlier, Chapin, that you like that you want to see the US got something back.
Am I wrong?
Not at all? I mean, I think every decision has to be run through a framework of is this helping America or not. Why else would we be doing it. We've put hundreds of billions of dollars into Ukraine and we can't trust them with the money, and now people want us to trust them with our men and women in the military end lives.
I don't think so.
So absolutely, we should be getting something for this if we're going, you know, on a return on investment. Now, maybe helping Ukraine is the right thing to do. But you know, only in the Trump era can working towards peace and getting something for America be criticized, right, I mean, I don't understand it.
Well, Jeanie today is going to help to inform tomorrow when Vladavia Zelenski arrives, is he going to want to negotiate with Donald Trump or is he going to sit down and sign a deal? Because the White House seems to think this is done.
Yeah, it's still unclear. I do think we are going to see the deal signed. I do think he will express to Donald Trump his view. But I do think this framework likely gets signed. But when we think about the criticism of this deal, let's think about it from the long term perspective. You already have the incoming Chancellor of Germany. Talking about Britain and France extending their nuclear
umbrella to Germany. I mean, just pause and think about that. Germany, with the rise of the far right party in the election on Sunday, is talking potentially about thinking about the development of nuclear weapons. We haven't seen anything like that since World War Two. That is a frightening, frightening proposition. And we are also speaking of starmer the Baltic's, Poland Norway.
They are talking about a growing European defense community in which Ukraine, the most powerful military in Europe, the biggest defense industry in Europe, would be a leading component. So we are talking about a movement away from the US as it pertains to security. And yes, we have invested
millions of dollars, billions of dollars in Ukraine. Why because thinking of a return on investment that is cheaper than us having the cost of human lives on the line or nuclear Germany over there potentially, So there's another way to think about this. Then, out of just the sheer dollars that are being talked about, and so I think the long term impacts are what people are deeply concerned about.
Spending time with our great political panel Genie Schanzeno and Chape and Fay with some headlines now coming from the Oval Office.
They have begun their meeting guys.
Reporters in the room are letting us know what they're talking about, as Donald Trump says, they will also discuss trade beyond Ukraine, and Donald Trump saying he will visit the UK in the near future. So it looks Genie like he is going to spend some time with the royals here. Keir Starmer thanking President Trump for changing the conversation on a peace deal.
It seems he.
Has brought a letter from the King which is just being presented now in our second hour. Likely because they're going to go on for a bit, we'll bring you into the Oval this conversation. You'll actually hear it, see it in real time.
Jape and Fay.
These these sort of events in the Oval Office, whether it's a bilateral, whether a foreign leader, or signing eos or talking about executive actions, have become kind of live at the improv for Donald Trump. He's laying down a half hour to an hour a day in the Oval, back and forth with reporters. This is what some Americans said they wanted right when when Joe Biden wasn't talking to the media on a daily basis, Is this something that he can keep up beyond the first one hundred days.
I'm Americans. I mean, you know, if a Republican is an office, all you hear about from the press and the left is, you know, answer questions and how many press conferences. We didn't hear about that for four years, and so now it is refreshing, and I think it's good. More transparency is always better. Again, we're living in the upside down, right, transparency apparently is bad. The president answering questions,
you know, is being criticized. But you're right, and I think it's a good, refreshing, transformational tone.
I had never heard anybody, I have to admit, I thought it was I thought everybody was. He's on TV fifteen hours a day. I thought this was a good thing.
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on almal Coarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
In Vidia speaking right, I mean it's down today. You just heard Charlie, it's down five bucks. But think of how many people picked up shares of Nvidia a couple of years.
Ago, and they just keep looking at that four oh one k. Come on, Jensen.
We had the big earnings report last night, went pretty well, matched expectations topped other expectations. When you look at the AI spend, this thing is chugging along. But the stock is lower this morning, and I'll be it maybe a little exhausted after such an advance. But of course expectations were so high for Nvidia. That's why it's in Nvidia. People expect a Christmas miracle every couple of months here.
It doesn't always work out like that.
So yeah, stocks trading lower, it's pulling a bunch of other shares lower with it. The mag seven's down, a lot of the AI related names are down. AMD is down, Constellation, the cooling companies, all the stuff we look at typically when it comes to data center feeling this So it's a kind of a market event here in Washington. It's a policy event, and there are a lot of questions right now about whether export controls that have been turned on in Vidia repeatedly actually have any impact at all.
Jensen Wong doesn't seem to think so. In an interview on the Other Network following the quarterly report, it says it's unsure if these controls against China are effective national security measures for the US. It's hard to tell whether it's effective.
Responding to a question.
About whether Deep Seek proved the whole thing wrong, and that's where we start our conversation with Michael Shepherd, who's with us in studio here. We wanted to talk to him in advance of the report, but of course we spent a lot of time in the cabinet room yesterday. He covers the intersection of Washington policy and technology. Senior editor for Technology and Strategic Industries. Nice to see you the day after shopping. Great, So big questions always when
we sit down with Mike Shepherd. It's never a small thought. It's a big think on export controls, whether they're worth it at the expense for instance of a company like in video when a Deep Seek just pops up and says, hey, we stole your stuff anyway, Well.
This is one of the big questions actually that was surrounding the Trump administration as it took power, and that was whether they would continue further down this path of trying to restrict China's access to advanced technologies, including chips and semiconductors, because there is a lot of impact on
US businesses. And you know, the idea of restricting China, the world's second largest economy and the world's largest market for semiconductor purchases, it really does have implications for companies like Intel, but a whole bunch of others. In Vidia, you know, of course, they do a lot of China business. And when it comes to export controls, Joe, they did
acknowledge on the call. Jensen Wang himself said that, look, our China business is down a little bit since the export controls have been put into place, and that's been over the past couple of years. More recently we've seen a new round. Right before Joe Biden left office, his parting gift to Donald Trump was a new three tiered system of access, if you will, to AI computing power, and that is a set of limits on how many of these advanced semiconductors anyone from certain countries can buy.
So in the first year, we talked about Cure Starmer and his visit the UK, of course, and very close US allies would be in the twenty or so nations that get that you're behind the velvet rope. But if you're in kind of the big middle, you will have to, you know, work harder to gain that access. You can buy fewer chips without getting an export license. And then if you're China, you're really in the third tier like Russia and other US adversaries, where it's much more well.
At the same time, Jensen Wong said last night, there's a lot of competition in China. He named Huawei as a major competitor. Are we playing fair with our own companies here when it comes to an Nvidia for instance, or are we holding back innovation?
And that is the very question that not only Jensen Wang, but other big CEOs have been raising. We heard Andy Jasse, who was interviewed by our colleague Caroline Hyde earlier today on Bloomberg Technology, basically laying out his concerns specifically for Amazon World Services. He said, look, not a direct problem for US, and yet he sees the risk in the same way that Jensen Wang does. You end up pushing
US allies toward other countries. He didn't name China, but you know, maybe you push those other countries to trying to acquire chips from Chinese chip makers like SMIC or others.
The other side of this is, of course, come on, the biggest company in the world. From time to time, they're printing money. The backlog is so long the pipeline, I mean, they can't they can't meet the orders they're receiving.
So why not turn the screws.
A little more.
Well, what they're seeing is a loss of opportunity. And actually Jensen did talk about this yesterday and he said that, look, deep Seek, you know, presents a challenge, but it also presents an opportunity. And we remember the you know, the week after deep Seek introduced its revolutionary R one chapop. It really shook up companies across the board, but in
particular video. It's seventeen percent drop on that Monday, a week after the deep Seek release, one of the biggest market losses in history, really, but it highlighted the stakes for Nvidio. But what Jensen was saying essentially was that look, deep seeks innovation actually creates new avenues of demand potentially for us. You know, the demand for computing power through a model like this could grow exponentially depending on how
it's deployed. Like the one off of achieving and creating the model is one thing, but then when you put it to use, that's where you need the compute.
Interesting as the White House kind of figures out where to go here, and I don't know if we're getting any clarity from the administration on the number of nations that are on that list, for instance, or.
How they're going to handle this.
Donald Trump met with Jensen Wong talked about it in person just a couple of weeks ago. Is this, like many things from this White House, whether it's tariff's other geopolitical matters, were simply no one knows.
You're right, Joe, We are living day to day and even yesterday you talked about the cabinet meeting. We got one message on TARA against Canada and Mexico, and we get another one this morning. Thing through the President's truth social feed about the timing of those levees and whether or not they would definitely go into effect and when and under what circumstances. And the same thing today with China tariffs too, he announced another ten percent.
What does that mean? In video? And for this conversation, we're having.
Well, you know, they did address that on the call yesterday. The CFO talked about it a little bit, and essentially they called tariffs a big unknown for them. They said that they will comply, of course, with whatever measures the US government imposes in this era via tariffs or export controls, but the tariffs are a bit of an unknown because it also raises questions about, well, what happens if there's retaliation by US trading partners, what happens if other companies
start to move in different directions. And remember Video makes its chips in Taiwan. T SMC is you know, essentially its foundry. So you know, tariff sun chips coming in from Taiwan would hit potentially in Video and and that would be a challenge. And if you're a hyperscaler here in the US with data centers that you're building, think Microsoft, think Amazon, on the cost of those chips would start to go up.
Taiwan came up in that Cabinet meeting yesterday, and of course you're instantly thinking about Taiwan, Semiconductor, Video, all of these designers who rely on the foundries in Taiwan, and he would not take a stand against China taking over.
He really shut it down.
Joe, How what if your gentsen won? How do you make plans around something like that?
It is difficult to do so. And you know they have been with the construction of plants and facilities here by TSMC here in the US. That does provide a little bit of a hedge. And in fact that TSMC facilities producing chips at an early you know, early test, at an even greater yield than what they are getting back we know where that's promising. They're starting to ramp up right now.
And that is and that is actually the sort of legacy of the Biden administration, isn't it. That's that's what we never saw happen while he was sitting in the overlope.
It is, that's right. But at the same time, we are seeing that some of these other plans, including the ones that Intel has in the pipeline, are struggling. That's the facility in Ohio. They're looking for customers.
They're looking for the command the wrong company.
There are some questions about that, and and I think that if we talk to Biden administration officials now after leaving office, they may have a different view, But they really did see Intel as a national champion. I mean Intel inside Joe, it's it's something we have.
I can hear thele in my head right now.
Well, exactly left on the side.
Of the road.
Well, in a way they they have, they've struggled in some of the same ways that other parts of the US economy have struggled to you know, the the economy did evolve away from them, and a lot of manufacturing was moved overseas for a lot of different reasons too. The company transformed. It's trying to transform itself yet again at something that they hope would last. But it's been a struggle too.
CHP, thank you as always, Michael Sheppard with us live in Washington. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, or wherever you get your podcasts, and you can find us live every weekday from Washington, DC at noontime Eastern at Bloomberg dot com.