Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business Weekdaily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio.
We got to get back though to Intel.
Yeah.
Sures for Intel finished up seven point four percent today, up one point three percent in the after hours. This after Bloomberg reported exclusively that the Trump administration is said to discuss taking a steak in Intel, the US government potentially taking a steak in the chip maker, which would help support the company's effort to expand domestic manufacturing. This is according to people familiar with the plan. I want to bring in Tom Giles, He's senior executive editor for
Global Technology. Tom can't stop talking about this story. Also in the context of what happened earlier this week with Nvidia and AMD, what's happened with MP Materials and a four hundred million dollar investment from the DoD Us steal as well, it really just feels like We're in a new era when it comes to industrial policy. What does it mean to you?
You know, the Trump administration is doing some really unconventional things when it comes to trying to shape and influence industrial policy and US corporations. Not a ton of precedents for this, at least not in the US. We've seen it in other types of economies where the government leaves it to its role to shape industry and shape the direction of companies. That doesn't always end well. I'm a little surprised that the stock rallied as much as it did.
To be totally honest with you, I think in the near term, investors are looking at hey, look this is a bit of money, and think of it maybe as a bailout for Intel. The company get its financial house in order and accelerate these plans to build a foundry in Ohio on a space All of that stuff sounds good. Go ahead.
Well, I'm glad you.
I'm glad you brought up the term bailout because I was talking to Carol about this. It kind of also feels reminiscent of you know, we talked about the US taking stakes and companies. It's not unprecedented. During the financial crisis. We saw this happen with rescuing banks. We saw it happening with rescuing automakers. The question I have for you, and it really sticks to it doesn't always end well, is the concern about when you have investment from the
US government, the government picking winners and losers. When it comes to a so called quote unquote free market.
That's not a really it's not a very free market.
This isn't the principles.
He's the quotes that I that.
I studied, certainly in macro and you know, all the all the economics courses, all the finance courses that I've taken, don't really this doesn't look like the capitalism that we learned about growing up. What this is is and there's a difference between a bailout per se and a government taking a financial stake. This is about an ongoing relationship.
And again, in the short term, I see why the stock popped, right, it's seen as like, hey, Intel could use could get help wherever, you know, wherever it can. Longer term, do you really want the government? Are the government's interests aligned with those of shareholders? The government might might want to shape things for its own political interests, But are those the interests the long term interests of the shareholders of the company.
I think that's a really good point. And I would also say, Tom, since we're talking about sort of the philosophical definition of capitalism right now, that one could maybe listen to our conversation or watch our conversation and say, wait a second, we've never really lived in a free market when local and federal subsidies power so much of this economy. I mean, you look at corn farming, for example, agriculture in the US. You look at subsidies that are
given by states to llure businesses. We all remember what happened with Fox Con in Wisconsin for example. That should be an entirely different conversation. But any you know, you name it. There are Boeing in South Carolina for example. Those sorts of things. There are different reasons that companies go places.
Tax breaks all over the place. Yes, you know, the city of San Francisco just down the street incentivized Twitter to locate its headquarters right in central San Francisco, and they have lots of incentives. Think about the corporate tax cuts that we've seen in recent administrations. Those are all ways that the government is sort of giving financial incentives to these companies and incentivizing them to make investments in a city, in a state, in a county, for example.
There's a difference between that and taking a long term stake in a company. And remember the thing that I you know, I'm not I'm not an authority on corn farming, but I do know Silicon Valley, and if you think about how the way things have run here, things have gone historically over decades, the precedent is Company X in this in Silicon Valley, in the tech industry says to DC,
stay out of our hair, leave us alone. For the most part, will build, will create jobs, will build new and innovative technology that's going to change the way you live and work and the way we do business. And that has historically been the case. Government has had a relatively hands off stance towards Silicon Valley. But that is changing dramatically, and it's changing much more quickly under the Trump administration then it has in recent memory as long
as I can remember covering this industry. What are the long term implications? I don't think people are really thinking about that right now.
It's really good kind of mind boggling.
We're talking with Tom Giles, Senior executive editor for Global Tech out there on the West Coast here in our Bloomberg Interactive Broker studio. Ron Gould just coming back into our studio, Bloomberg News Deals reporter. He along with Josh Wingrove and Leanna Baker, breaking this story.
It is our most read on.
The Bloomberg Tom, stay with us, Ron, I want to roll you into this conversation. Remind everybody what you found out, and you know, do we have any insight or do you guys have any insight about how much the Trump administration, which has been called an activist administration, would want to be involved on an ongoing basis if it made this investment.
Carol, We have very few details as to the numbers. I mean, it's something we're obviously looking to find out at this point. But I think it's just worth recapping that just how novel this type of structure would be or could be. I think i Am came on here earlier on and said that they're the very good perils parallels to be drawn between MP materials and the DD that deal. I think if you just break that down, what did that mean for MP materials and what could
it mean for Intel. I mean, you look at that deal, it's something like you know, guaranteed purchases, loans, private financing, equity investment. I think these are all types of things that the government perhaps feels. And again this is what you would think from a sort of outside view looking in that if you give confidence capital in this sense, which I think is a good way to think about
what this would be for Intel shareholders. If you give confidence capital to Intel as the you know, the most credit worthy institution the world, coming in and saying where behind you, where we're here for the long term, that's a massive drawer, especially if you're Intel and you're looking to bring in customers like Apple or Qualcomm, which by the way, has been its mission for a long long time to make its foundery solvent.
Tom is that what Intel needs? Confidence capital?
Is that what's.
Gonna be the turnaround key for this company that's been kind of struggling for a while.
It has been struggling. I mean you think about what where they're lacking, right, They have fallen behind technology technologically, particularly in an age of AI. They are they have lost market share. Lipputan, the CEO has come in and he has been cutting jobs and taking some hard steps financially to shore up them from a financial perspective, but in terms of products, in terms of like making themselves attractive, making themselves the place that customers around the world want
to come for their chip making needs. That's something where they've fallen desperately behind. And so if you have a foundry, I mean, on its face, the idea of building a foundry, that's that's an alternative to TSMC. Right this this Taiwan based mammoth company that that is making most of the most advanced chips in the world. If customers want an alternative to that, Ryan mentioned Apple in Nvidia, they all
would like to have alternatives to TSMC. You want you don't want someone to have a monopoly, right So, there are certain things about this idea of advancing this chip making capabilities for Intel in Ohio on it it makes sense, but it's really hard for a company that's struggling financially to get that off the ground. So again getting back to that near term equation, it makes sense for them
to get a capital infusion in the near term. Longer term, does it make sense for the federal government to be making decisions and to be influencing the direction of companies. In many instances, the interests of the government and the shareholders may be very much aligned, but there will come a day where the government may want to politicize things in a way that doesn't work to the longer term
advantages of shareholders. That's the thing that people need to be asking hard questions about right now.
Yeah, exactly, Tom Giles, so appreciative, Senior executive editor for Global Technology with his view and reporting there.
Also on Intel, intelstrial is still up about two point eight percent here in the aftermarket.
You want to keep Ryan Gould in here as part of the team that broke the news that's still moving shares of Intel higher once again more than seven percent to the upside earlier in the session, up another two
point nine percent as we speak, right. I want to go to you off of what Tom just said, the difficult questions that need to be asked right now, because you and the team right about the President and his administration are adamant about boosting domestic champions and sectors that it deems critical to combating China on national security grounds.
I can imagine there are a lot of companies out there with executives who are raising their hands and saying, wait a second, I'm critical, where's my money?
Exactly?
I think Timmy raise a good point because if you're any other company that operates in semiconductive manufacturing or even so reconductive, you know, chip design, Hey, this isn't fair. Yeah, I mean you would be looking on and thinking what is the power play here? Yeah?
I mean a MATS down twenty three percent following its latest quarterly update. I'm not saying anything is related, but it's like, hey, maybe I need as six exactly.
And you know, if you think back, let's just retrace those steps a little bit. Some of these challenges and some of these questions are being raised a couple of months ago, quite a few months ago now, before Lipbouteen became became the CEO. When Pat left, you know, there was a big search that went underway. They used a head hunter. They spoke to people like Gary Dickison a mat about the job. I mean, they spoke to a
ton of people about the job. There is actually only one person who really wanted that job for the challenge that is on the table right now, and there's Libu ten.
Libbhuten is currently in that seat. He turned up with the White House earlier this week, cut a fairly you know, confident figure walking into the White House grounds and is now on the face of this coming out with something that looks like a potentially very favorable deal, at least in the short term, I think to Tom's point earlier on, at least in the short term for what you know, Intel is looking to do, which is right size it's balance sheet, stems some of those losses and make sorry
to use the Trump term, but you know, make Intel grade again.
It's kind of wild, kind of wild before we get caught up in the exuberance. That is very easy to get caught up in this environment, especially when you've got a stock that pops seven percent in the regular trade, another three percent here in the aftermarket. Early stages like do you have any you guys talk to a lot of folks who reported this at it's a.
Bloomberg exclusive, it's a most red story.
But do you have a feeling of again, I'm going to go back to kind of where this process maybe.
I mean, we actually don't. I mean, that's one of the challenges is you know, finding out how big this is I think, you know where on the case. I'm sure many of our competitors are now in the case. But I think one of the things I point out is that the presidents said on truth Social this week that these meetings will be happening with Commerce and with
Treasury this week. You can probably assume that there are a ton of people down in Washington and right now, both on the Intel side and the government side, who are putting minds together to figure out exactly what it will require to get Intel into on a stronger footing. I think, you know, if you look at what Intel
has said. It declined to comment I should notes on the deal discussions, but it's said in a statement to Bloomberg that it remains deeply committed to supporting the Trump's efforts to strength in US technology and manufacturing leadership.
Just quickly, we've not heard anything from the White House. Not yet. Okay, good to know you.
Rock again, Ryan gold, Deal's reporter here at Bloomberg News Again. Intel shares tim up two point six percent here in the aftermarket, after about a seven percent.
Gain in the regular training session.
Stay with us. More from Bloomberg Business Week Daily coming up after this.
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Right now, though, we want to stay with what we just heard from the President, an array of topics. We've got with us our own Jenny Welch, she is with us, joining us from our bureau in the nation's capital.
She is Bloomberg Economics Chief geoeconomics analyst. Jenny. Good to have you back with us. There was a lot from the President.
I'm always curious because he certainly says things that might be Strewda's opinion or thoughts and speculation about things. What is it that from what we just heard from the President anything in terms of new messaging that is something certainly the Bloomberg audience wants to know about well.
I think in particular as it relates to geopolitics and the summit taking place tomorrow between him and President putin that, what especially European partners are likely paying attention to is the fact that he just once again tried to set expectations slow for that meeting. But I think the new element was indicating he might be open to having European partners join some sort of subsequent summit that he hopes to be able to arrange between Putin and Ukrainian President Zelenski.
I think we would say the odd of that coming together or rather low, given Putin's previous opposition to meeting with Zelenski. But nevertheless, that seems to be a goal that Trump is very much keen to get across the finish line in tomorrow's conversation with Putin.
Jennifer, nobody has a crystal ball here, but we're thinking about possible and probable outcomes at this meeting. How are you thinking about these? What could end up happening post meeting tomorrow?
We see three broad potential pathways for the meeting. As you noted, it's hard to say for sure, so we developed multiple scenarios and hope that one of them pans out.
I think the first one, in what we would consider to be pretty unlikely, is that talks collapse in such a colamous way that Trump actually feels embarrassed and feels he needs to follow through on his previous threat of sanctions against Russia, which he's been lobbying since he returned to office in January, but hasn't actually taken any steps on.
A second potential pathway is that they do make enough progress for Trump to declare victory of a sort and walk back those previous threats, which is probably his prefer but we remain rather skeptical that the two sides will be able to reach some sort of agreement that leads to lasting, sustainable peace.
A key reason.
Behind that is that Putin thinks times on his side and that he's winning on the battlefield, and so his incentives to negotiate are pretty low, which means the third possibility that they agree to something that will actually put them on the path towards a full peace deal with Ukraine, we see, is still relatively low at this point in time.
Is there any chance, if there is no kind of peace deal worked out in a first or even second meeting, that what ultimately happens is the US steps up its efforts and support of Ukraine.
I think there's certainly that possibility out there, and that's what Zelenski and many of the European partners are hoping that certainly that Trump doesn't make any agreements with Putin without them being there, and if he doesn't agree to anything with Putin that will lead them to the negotiating table as a sort of a unified force that the very least, he'll follow through on his threats to up
the pressure on Russia while backing Ukraine stronger. I think my skeptics is and comes from we've been here multiple times since January and have yet to see Trump actually follow through on those threats. He certainly has a number of sanctions options at his disposal, but they all come with additional risks and costs, especially to the global oil market and to his relationships with other key countries, namely China, which is a major economic partner for Russia.
It's hard not to think about tomorrow's meeting in the context of when we've seen these two leaders meet in the past, and Helsinki in the first term certainly comes to mind and everything that came along with that. Jennifer, what do we know about the relationship between these two leaders and what we could see and from a negotiating perspective, from a behavioral perspective, from the way that we could see gifts too or from one another.
Yeah, the relationship between these two leaders is of high interests, especially here domestically in the United States, subject to previous inquiries, and I think will continue to be subject to a lot of skepticism. They're also have extremely different negotiating styles. Putin is a former KGB and intelligence officer that really shines through and how he approaches diplomacy, focusing on control, psychological manipulation, playing the long game as part of these talks.
We've seen him, for example, before play out international negotiations pretending like he's interested in peace while continuing to make games on the battlefield, most notably in Crimean in twenty fourteen and twenty fifteen with President Trump. He is a deal maker. He comes from New.
York real estate.
He's interested in creating some sort of win for himself, especially something that he can sell publicly. At the same time, he's someone who has shown he's willing to walk away from the table if he doesn't get what he wants. That was apparent in his first term with negotiations with North Korean leader Kim Jung un, and I think that's something he's trying to sort of put down a marker
for he's willing to do tomorrow. I think the question is will putin sort of outmatch him and out maneuver him on that front and be able to provide him some sort of tangible win that Trump says is this is a victory or play into Trump's at long standings skepticism of Ukraine.
We are living in interesting times. A headline just crossing the bloomberg. I have a five point two mag earthquake one hundred and thirty two kilometers southwest of Nikolski, Alaska.
So this is just crossing. It looks like probably from the US Geological Service.
So I'm just putting it out there because it all kind of is this big whiteboard, and it all just connects, doesn't it. Hey, Jennie, One last question you mentioned about I think you know, people moving ahead, forging agreements and so on and so forth. The President was asked specifically about Latin America and China getting closer, closer and cozier.
How are you looking at that, continuing to look at how things are changing when it comes to important global relationships, and is the US increasingly being left out or no? Is the President showing that he definitely has strength and still has a seat at the big table.
Well, certainly, China's efforts to court Latin America and other Global South countries are long standing.
I think Beijing is making a.
Lot of this moment where a lot of those countries, in particular Brazil, are facing a heavy weight of US terrorists and trying to gain the most that it can from those relationships, positioning itself as sort of the rock and Trump's storm, I think from the US perspective, and really from Trump's perspective in particular, he has kind of brought back this theme of almost a Monroe doctor and approach to Latin America, where this is considered the US's
traditional sphere of influence, and he's going to push back on China, especially in places like the Panama Canal that are regarded as kind of strategic took points. I think for many countries in that region, though, the question is what is the US going to do to give them an alternative? Because Terris is sort of the punishment. The stick might not be enough, all right.
One of our rocks.
She is a rock when it comes to what's going on too out of the White House totally and putting geoeconomics into perspective.
Jennifer Welch, thank you. So much. Joining us there from DC.
She is Bloomberg Economics Chief Geoeconomics list.
Stay with us. More from Bloomberg Business Week Daily coming up after this.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Applecarflay, 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.
As for the President, just off a press event at the White House, he did say inflation is down to a perfect number. He said, hardly any inflation at all. He also mentioned the stock market soaring for when k
is soaring. He also talked about something that is certainly a focal point for us, and that is the meeting between the United States President Trump and Russian President Vladimir Putin, the President saying that he thinks President Putin will make peace, and also talked about a second meeting will be more important than tomorrow's and talked about potentially European officials being part of that meeting, and that is kind of where
we want to start getting an end to that. More than three and a half year old war will likely take time.
And more than one meeting. As we just heard from President Trump moments.
Ago, we have a meeting with President Putin tomorrow. I think it's going to be a good meeting. But the more important meeting will be the second meeting that we're having. We're going to have a meeting with President Putin, President z Olynsky, myself, and maybe we'll bring some of the European leaders or maybe not.
It's I don't know that.
It's going to be very important.
We're going to see what happens.
And I think President Putin will make peace. I think presidents Olynsky will make peace. We'll see if they can get along, and if they can, it'll be great.
All right.
That, of course, was President Trump just earlier this hour talking from the White House talking about meeting President Putin, talking about expectations for a second meeting, talking about bringing European leaders in, and saying that he thinks President Putin will make peace. He also said he thinks President Zulensky of Ukraine will make peace. So going to be watching that certainly tomorrow. All right, let's get to our guests, because this is kind of our big backdrop.
We welcome to our studios.
She's been patient as we go through all of the news today and here at Bloomberg Headquarters Nicola Willis. She is Minister of Finance for New Zealand, joining us here in studio.
There is a lot going on. Thank you for your patients. Welcome, welcome.
How do you see kind of the macro environment? There's so much going on for so many different countries. We have a very active White House, we call it an activist White House, and I'm just curious, how would you describe the state of world affairs today?
Well, I think that there's considerable uncertainty in world affairs today. Where there were once things that were given and were very predictable, we are now seeing more volatility and policy decision making, which has implications for investors and for sovereigns in terms of the way that we go about things. For our part in New Zealand, we tend to want to be a beacon of stability in amidst all of that, to say, you know what, We're going to continue to
be rules based. We have low, stable inflation, we have declining interest rates. We're going for growth. We trade with many countries around the world and wish to continue to pursue freer trading relationships. We have prospects for growth and so we aim to be stable, predictable. We have secure institutions, and we think those things will be at a premium in the coming years as there is more volatility.
Mister Willis, whenever we have officials from other countries visiting the US, which is a big part of your job, we always ask the question about a particular trip, why are you in New York right now? Why are you visiting us right now?
We're here because we value very much both our economic and security relationship with the United States, and I'm pursuing more economic growth for New Zealand and New Zealanders, and we believe it's in the interests of both of our countries to forge stronger trade and investment ties in pursuit of that.
So, how does that work in an America first environment? In an environment from Washington, DC, where the communication has been very strongly this is an administration that is looking at the priorities of the US, whether or not it affects other countries in a negative way.
Well, quite simply, our proposition is it's in the United States interests to have a strong and growing relationship with New Zealand. We're part of the Five Eyes Security Partnership along with Canada, the United Kingdom and Australia, and we continue to believe that's very important for the United States.
We also have a very complementary trade relationship. We export primary products tech services which Americans value, and equally, we import significant amounts from the United States and will continue to do so. We, like many countries, are increasing our investment and defense, and it's likely that some of the kit that we will be purchasing in future will be manufactured in the United States. Similarly, when our national Airline replaces its fleet, it's likely that some of those planes
will be produced in America. We have very strong and longstanding people to people ties. Our two countries have gone along well for many many decades, and we think it is in the interests of both countries that New Zealand continue to be a strong relationship that the United States could look to and rely on.
So is this White House so impacting the relationship, the strong relationship that New Zealand has had with the United States in any way.
We continue to view the United States as our friends now of course, we would prefer not to be facing additional tariffs. Find me a country that says, yeah, we really like additional tariffs and we're not in that. We're not in that situation, and we have a history of pursuing freer trading agreements. We have very very low trade barriers for United States imports, and we feel we've treated American export as very well, so we would pre prefer
to be on a lower tariff rate. We've ended up at fifteen percent as a base rate, which reflects the fact we have a small trade surplus with the United States. We're talking very marginal New Zealand dollars five undred millions, so it isn't big.
We don't really it's.
Disappointing that it wasn't. Maybe the ten percent that looks were thinking initially.
We would have preferred that we understand the rule that's been applied. But it's hard to conceive that New Zealand, a country of five million people, has any kind of threat to the manufacturer in you or industrial base of America.
Does it lead though, and I guess we're trying to figure out. We talk a lot about the geopolitical world order being changing around we talked about if the President was just asked about maybe closer ties between China and Latin America. China already has a presence we know in Latin America, but maybe they are increased as a result of what's going on.
Are you forging different.
Relationships because of some of the strained relationships.
Out of the United Stations, strained relations out of the US.
I wouldn't characterize it that way. New Zealand has always looked to forge relationships around the world and to reinforce the rules based system wherever we can, and to work through multi lateral institutions because we're small and our voice will never be the la artist like the United States.
We have a strong and important economic relationship with China that we've been able to maintain while also taking very different points of view on many matters, and we've been able to balance those two things.
So not strengthening them with China because of maybe what's going on.
No, I would not characterize it that way. But continuing to lean into our relationships where we have common interests. So we are members, for example, of the CPTPP trade relationship, and we have welcomed the EU's interest in becoming a dialogue partner and looking to reinforce that trade arrangement. We've recently signed free trade agreements with the United Kingdom, with the European Union. They're important with the GCC, the UAE,
and we're pursuing a trade relationship with India. We think it's very important as a small exporting country that we have options and who we trade with wherever possible, try and open more doors. We've got a grand history of doing that. We're one of the countries in the world to drop subsidies to ensure that we were genuinely open to the world. We won't get rich selling to ourselves. We're too small for that, so we do well when the world welcomes our goods and services.
Mister Willis, are you meeting with any US officials on this trip?
Not on this trip thirty six hours only, I'm afraid, but I look forward to returning to Washington later this year for some of the annual meetings, and at that point I would hope to meet with some people from the administration.
At that point, do you will part of your job be to try to reduce the fifteen percent tariff on goods from New Zealand?
Well, look, we're realistic about the fact that the Trump administration have set a clear parameter that countries that have
surpluses are unlikely to get reductions in their tariffs. But we will continue to advance our case, which is that we have a very complementary trade relationship with the United States, built on a security partnership in a very long history, and we will press the case for our exporters that we think be fairly facing a lower rate, and we will continue to share that message with our friends in the United States to make sure that if there is
reconsideration of the current tariff regime in future, that we're front of the line for reconsideration. We think we should be. We're keyw we play fair, we play by the rules. We sell you sauvignon blanc tourism experiences and lean red meat that Americans love, and we would like you to be getting it at fair prices into the future. And a lower tariff rate supports that we expect to continue
buying huge amounts of American goods into the future. So there's nothing to fear from giving New Zealand a lower teriff right in the future.
You're also great sailors I'm just going to point it out we as a fellow sailor myself. We'll talk with Nicolo Willis, she's Minister of Finance of New Zealand. Here in our studio AP Blomberg headquarters in New York City.
What are you guys doing to encourage foreign direct investment? Yeah, well, we're very big on this.
So we've set up a new entity in Vest New Zealand to connect international investors with New Zealand. We're reforming our legislation to make it easier for foreign investors to make investments, and administratively, we've sped up the process by which they can do that. Particular, we've introduced golden visas the Active Investor Plus, which means that investors can get residency rights in exchange for making investments either actively or passively in New Zealand assets.
Is it working? That is working.
We've been delighted by their response, a really high degree of interest. Hundreds of people have applied for those visas within the first few months, pledging over a billion dollars in New Zealand funds.
And I think that reflects two things.
One, New Zealand is a safe, secure place in a world that increasingly is less so, and people like the idea of having that residency in New Zealand. But second, they can see that many of our investment opportunities are currently undercapitalized. Investing in New Zealand is a good bet.
Can they buy real estate in New Zealand?
Though if we get residency not.
Currently that is excluded. Our government, which is comprised of three parties, has been in discussion about loosening those regulations so that those who get an active investor visa may in future be able to purchase a proper.
Far future what are we talking about for a timeline here?
Those talks have been underway and you would expect that a decision would be made by our cabinet in the coming weeks.
Okay, in the coming weeks. So Carol, get ready come.
In your little slice of paradise. We're surrounded by a big fat ocean. I know, we have huge amounts of land. It's beautiful. I think the world should be looking at New Zealand. We have great prospects.
Will the US tariffs impact growth in your nation?
Well, as I said, we'd always prefer not to be facing those tariffs. But as a proportion of our overall trade, it is actually quite small. The more significant impact for us is the same as it is for many other countries, which is a lower rate of global growth resulting from tariffs and retaliat treating. You're worried about a global not a recession, but just a lower rate of potential growth would have otherwise been the case, particularly out of our
trading partners. That then effects prices for our goods and demand for our goods.
And it's just enough to feel like a recession.
And slow enough to feel like we're not meeting the potential that would have otherwise been realized. And that's been reflected in our forecast for the New Zealand economy in which we did peer down our growth expectations for the future based on what was developing with tariffs. You know, obviously there's a lot of water to go onto the bridge to see how all of this does play out globally, how countries are affected, and what it means for New
Zealand's part. We continue to forecast strong growth, low inflation. That will remain the case, but a terriff free world is one in which we grow faster.
Do you think that might come back if there's a different president in the way it house.
I think countries will always continue to pursue their own interests as they should, and that's why I will keep singing the song for freer trade, because that is in New Zealand's interests.
So glad to get some time with you. Thank you so much, Tom and I both enjoyed it. Nikola Willis, she's Minister of Finance for New Zealand. Right here in our studio.
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I want to bring in Sarah Ponsig. She's senior vice president and financial advisor for BB Group in Boca Raton, Florida. It's a UBS private wealth management team. It manages over four billion dollars. Sarah, this was not on your radar for discussing today, but that's not going to stop me from asking you about it. I know you are nimble on this stuff, being a former reporter here at Bloomberg News.
I think it's fair to say, so what do you say, what do you make of just the big picture in the you know, quote unquote industrial policy of the of the United States under the Trump administration. This is something that invests that's new to investors in the US and they're kind of having to deal with.
No.
This has been a very big week in terms of news related to the presidential administration in the United States and their view on US tech. You know, as I heard you and Carol reading off the headlines, my mind immediately went to the news from earlier this week about Nvidiana and d As as you you know, rightfully laid out, and I think, you know, there's there's a lot of information to learn and to glean to see how these
relationships are going to pan out. But from an investor's standpoint and point of view, you know, what it does show is that the administration cares about you know, US industry and our stance and our strength, I should say, when it comes to chip manufacturing and you know, being at the top of the helm in the technological industry, and it shows that they support a lot of these tech you know, technology companies that are in communication with them too, So I think it's probably a little bit
too early. I'm just hearing the headlines. Yeah, you are to take an immedia and definitive, right, take a definitive you know, investment point of view away from the.
News, but high level top view.
You know. I do think it's somewhat supportive of showing that, you know, we're living through a time in which the US presidential administration really cares about technology, and you know where our country and where our companies stand at the forefront of that technology going forwards.
All right, Sarah, But as you know, there's policy that supports an industry. There's incentives, there's an assists, there's tax breaks, and then there's making an investment in a company.
And we've even looked at Fanny.
Freddie, which are these quasi public private and it's been kind of a tortured relationship and right and then throwing the Great Financial Crisis. So I do wonder we are so critical of Chinese companies in some regards or some are because of the Chinese government involvement or perceived involvement
or actual involvement when it comes to their industries. And so wouldn't that be a fundamental shift perhaps in kind of the corporate government and maybe the investment environment here in the United States.
It certainly could be.
It's a fine line to walk, and not that I want to bring up, you know, the crypto industry either, but that's also I'm not going to say new, but you know, it's been newly more so embraced by institutional investors in large institutions, and that's another area that the administration has really put themselves at the forefront of. So you're right, it's definitely a change in tech and it's a very fine line to walk. But at this point in time, I still think it's too early to say.
You know, none of us know how involved.
The administration truly wants to be and if they're going to be making you know, decisions at the executive levels of the board of a company and whatnot, they're.
Taking a stake.
You know. I know that our brilliant reporters at Bloomberg will do a great, you know, great job hashing this out as it relates to the headlines that just broke.
So would you suggest investors buy Intel on this?
Well, I'm not supposed to speak to individual companies, unfortunately, but I think, look, I will speak to the tech sector at large and also semiconductor companies at large, especially in the face of the expectations for AI spending, artificial intelligence spending. I think if there is anything that you know investors can take away from this prior earning season, maybe you know, separate from company commentary on terriffs, because you know what everyone wants to know these days in
the world that we're living in. But if you look at we're the majority of earnings growth and expected earnings growth in the future is coming from It is from our US tech companies. One statistic that I find absolutely mind boggling and really amazing is that if you look at S and P five hundred earnings estimates growth since the end of twenty twenty two, the Magnificent seven accounts
for two thirds of that. Now, I know those are not all you know, AI specific and semiconductor companies, but a lot of them spend a lot on the future of artificial intelligence, as we all know. So I do think, you know, tech as a whole, even though it led on the way up ever since we saw the April market volatility, you know, the April tariff drama. Still think that's a good place that investors can look to for solid investment.
Do we need to rethink the way that the US government approaches companies in general? There's a great line in the piece, and we're going to be speaking to Ryan Gould in a just a minute about everything intel in
US government. But as we mentioned what we were talking about this Carol, when the headline just came out and echoes what we saw from MP materials, that four hundred million dollar Exact Priest investment from the Department of Defense, and I'm reading from the story here, Sarah, that move turned conventional wisdom on its head among investors, analysts, industry executives, and even longtime government officials in terms of how private industry has dealt with the government. Do we need to
rewrite the rules? Do you need to rewrite the rules about what you tell your clients about expectations between public private partnerships when it comes to publicly traded companies.
It's certainly something that needs to be kept in the back of our minds, especially when we're dealing with an administration which I think we can all say, you know, pretty fairly can act on a whim sometimes you know, may take two different social media platforms to put out
thoughts and whatnot. So then if you have an administration that is not only just saying their opinion but actually owns a piece of a company, and we do have a private public or a public private partnership, they have a little little bit more control obviously as a true investor in that company than they would if they were just an unrelated third party. So is it something that we need to keep in the back.
Of our minds and be aware of.
Yes?
Absolutely.
Is it something that I think is going to completely change the name of the game when it comes to, you know, strategic investing for our clients for example. At this point, no, not necessarily.
All right, we're going to leave it there. Listen.
So appreciated and thanks for going with the flow. You're so used to the news world, and we really appreciate it. Our Sarah Ponzak not our hour. She was our former Sarah Ponzac. She'll always be our Sarah Ponzac, but she is senior vice president Financial Advisor for BV Group in book or atone Flauriena.
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal