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The US imposing ten percent tariffs on China.
China retaliated with tariffs on fourteen billion dollars worth of American products, as well some other measures. It was what many have been said is a calculated response. We wanted to look at this latest development when it comes to possible trade or actual trade wars, the back and forth, the geopolitics perhaps at play, Tim, and also what is the current economic relationship between the US and China, which
economy may have more to lose. We want to kind of tie it all together to kind of understand this very important relationship and one that's been important for many years.
Okay, so we're going to talk about the actual back and forth on tariffs between the two, to talk about what we've seen, what it means. We welcome in Leland Miller, CEO of China beige Book International. It's a private in country, a data collection network developed to track the Chinese marketplace. Leland also a member of the National Committee on US China Relations, also the Council of Foreign Relations, and a non resident Senior Fellow at the Branch Scoutcraft Center on
International Security at the Atlantic Council. Also with US Bloomberg News Global Economy reporter and a current who's in our Washington DC bureau Leland joining us from DC as well. Leland, you dig into the Chinese economy.
That's what you do.
You try to tell an accurate and a current picture. What do we need to understand about the Chinese economy today?
Well, markets are usually bipolar on China's economy. They either think things are going so terribly it's on the vergiic collapse disaster disaster weights, or they're really optimistic that we're, you know, right around the corner from big stimulus things are getting better. It's usually one or the other. We're in neither of those positions. That haven't been for a while. The economy's week of our latest data, I've actually been better, and not just better, but also better than official data.
So what we're seeing as an economy is not doing terribly well.
And it is certainly under pressure and will be under a lot of pressure if there are terriffs put in the economy later, because manufacturing has been the growth driver for a number of years now, but not in such a weak position that she has to come to the table groveling. So you know, you've got you're sort of in the middle right now, a week economy, but one that's still standing up.
Okay, all right, So maybe she is not groveling and don't want to bring you in. You watch the global economy for US here at Bloomberg. We talk to you a lot about it, but also in particular the China US relationship. Do you see she in an okay position to negotiate with President Trump? I mean, does one of them have the upper hand? I guess I'm asking in your view, the.
Chinese economy is in a week spot at a moment, whereas the US economy is going relatively relatively well. And of course Chin account at the US dollar for dollar on putting tariffs and goods because China doesn't buy as much stuff from the US that the US buys from China, so there's a big imbalance. If you want to talk about tariff tennis. There's a big imbalance in that game to begin with. But you know, these things are never binary. It's not just as simple as making the point of
the US has the upperhand. They do have a strong advantage when it comes to, as I say, tariffs, but Shana can retaliate in ways that at once too. We saw those measures announced overnight, putting companies on an anti list antiy list, for example, putting some export restrictions on some of those critical minerals like tungsten, putting tariffs on goods where they can like the farming machinery that China
buys off the US. So there are ways they can respond, as I say, not dollar for dollar, but there are ways they can retaliate against the US leland.
How would you say?
How would you describe how interconnected the Chinese and US economies are right now? We went through this during the first Trump presidency and then during COVID. There was a lot of concern about, Okay, well, we don't have access to ppe because it's all made in China and there's a huge supply shortage of that, and there was a lot of conversation about decreasing our reliance for certain things on countries such as China, but laid out for US today. How interconnected are the US and China.
Well, it's a multi, multi layered story. And on the one hand, there's enormous bilateral trade between the two. It's mostly the US buying Chinese goods, not the other way around, but there's plenty of both. On the other hand, you have certain things that China controls the supply chains for whether it's ppe, whether it's pharmaceuticals, whether it's with certain critical minerals. So on the one hand, you know you'd
have a lot of trade. The other hand, China has leverage over certain supply chains going in the United States. On the other hand, you're seeing some aspects of strategic to coupling, you know, particularly in the tech sector, where the United States and China are both looking at the other and saying, you know, we don't want to be as reliant on the other country as possible, so we're gonna do everything we can to minimize those vulnerabilities. So
really you have multiple stories here about it. A lot of trade interdependence, but also some elements of to coupling will continue into.
The future, you know, And what I do also wonder is President Trump has talked about wanting a more balanced trade overall from an economics and growth perspective, You know, is he right that we should want that And is that even possible with the lopsided relationship that we have in trade between China and the United States. The US obviously buying a lot more from China currently.
Yeah, I mean, obviously it is in terms of the merchandise goods deaths that it's a pretty big hole there. China need to buy a lot of US product to make up that gap. There was the original agreement, of course focused mainly agricultural goods. The new administration is that they're going to go back and look at just how
China performed in that deal. But China can step forward to the table and buy goods to make up some of that gap, and they have said they have said they're willing to do so, by the way, But that's only the merchandise goods deaths. Outside of the story, I mean, the US China's tension goes way beyond that. It goes into the areas of a strategic competition, who's going to be the technology leader of the world. It goes into concerns over human rights speeds Jiang Hong Kong. Of course,
you have Taiwan. There's a whole gambit of issues there when it comes to US China relations. So there's a possibility both leaders and they've said they're going to talk over at some point of coming days, there could be some conversation around buying more goods, some kind of a meeting of minds on the merchandised trade deficit. But that one solve all these other much more broader strategic sources of competition between the US and China.
You know, one thing I want to ask you, and let me first follow up with you, is.
That I mean remind our audience what American consumers get as a result of the US China trade relationship.
Look, China has been the world's factory based now for the past four plus decades. It's been a cheaper source of labor, It's had a less regular, less environmental standards, less regulations of the kind you've seen in the Western world. So the end the product has been that China has been a source of cheaper goods, cheaper white goods, cheaper clothing, cheaper electronics, cheaper computers, all of that, and the US consumer has benefited from that, not just the US, of course,
entire world has benefited from that. Now we are, of course now at a moment of reckoning where why you have President Trump making the point that a lot of those products and materials should be sourced and built at
home anyway to drive investment and create jobs here. And we've seen alone as part of this process, we've seen these kind of middle connector economies emerges, kind of bridging points between China and the US, So Mexico, Vietnam and Poland and Morocco and others are kind of setting up manufacturing bases and selling into the US as well. So you know, writ large, the US consumer and global consumer has benefited from China's industrial based over the past few
decades cheaper goods. But as I say, we now seem to be at something of an inflection point.
And let's not forget that cheaper cost of goods means it's cheaper for companies to produce lots of different products sell them.
Margins are maybe improved as a result.
Lean come on in though, so what is China get out of the relationship with the United States in terms of trade.
Well, China buys commodities, China buys advanced technology.
I'll be the lesson I did before.
I think they'd buy a lot of want to buy a lot of a lot more of it if they could. But essentially, you know, the real inequity of the relationship is the fact that domestic demand in China's weak and the imports have been traditionally weak week week, and exports have been strong, strong, strong, So the reason that there are trade frictions here is that the imbalance in the relationship is bad and has gotten worse and worse and
worse over time. And now you've got a Chinese government plan which is called New Quality Productive Forces, which is we're going to manufacture more, We're going to produce more, we're going to export more, particularly in advanced technology sectors.
So you're really taking political friction that.
Already existed over trade and you're saying, not only are we not going to address them, we're going to double down and triple down the years ahead. So you know, you have a real problem in terms of the structural trade balances of the two countries and where it's going next.
Leland I'm wondering about given that that she, you know, was ruling during the first Trumpet minute and experience this trade war the first time. How you view what we know about how he's responded since, given that there is a history here, like what did he learn in the first Trump administration?
I think that they find President Trump less shocking the day before. But I think markets have gotten ahead of themselves. We are not in a trade war with China, at least not yet. What's going on right now is part of a sequential rollout of the President's priorities in the very early days of the term. So Mexico and Canada we're big targets because of fetanyl one A and illegal immigration one B.
What's happening right now is a derivative of that.
It's the fact that China sends a lot of the fetanyl precursors through Mexico. In the United States, they're a big problem in terms of fetanyl getting into the United States. Ultimately, so the President threatened and then has apparently going forward with a ten percent tariff on China for that. That is very different than what we may see later in the year based on a broader trade war. It has
to do with the economic imbalance. As I was talking about before the fact that the trade deficit is so high for the United States bilatterally multilaterally of course too. But you know, there are inequities in the trading relationship. There are economic restructuring issues that people in administration.
Care very much about. We're not there yet.
We're at the very baby steps where we're still addressing the fentanyl issue. And that's why, you know, baby stepping into the trade war. But this is not a trade war. Yet.
Another thing that complicates matters and is Taiwan and the US reliance on chips and other high tech that comes from Taiwan. It's a little different now than it was during the first Trump administration. But when you mail geopolitics and economics here, how does the equation change.
Well, obviously, a US has been attended to de risk it in very supply chains, and certainly semi conductors is one of them. We've seen that big investment pushed by the last previous administration, for example, So it's not quite
as hot a topic as it was. But nonetheless, though there's reliance is there obviously, But the real crooks here is that President She has made explicitly clear, consistently and perhaps even more so over the past here that when in terms of his three red lines or his red lines, one of them is certainly Taiwan and what they consider to be internal interference. And that's that's where the rubber
hit the road in the US and China relationship. Whether how President Trump navigates that, how he comes through terms with President She accommodates him or not on his claim on over Taiwan. That's certainly going to be one of the thorney's topics in all of this and goes well above somebody issues us to speaking about.
Earlier, and it was a stake if this relationship breaks down, I mean, it's already been a tense one for a while. If you think about the tech war that's been underway and so on and so forth. It's not like this just happened overnight, you know, go back to certainly the first Trump administration even before that, it's been a very
complicated and increasingly complicated relationship. What happens if the relationship geopolitical as well as economical economic wise breaks down between the US and China, well, it is very complicated.
They are both intertwined. I mean, if you want to talk about just the economic side of it, if they were to say good, down the road of further decoupling, the language now uses more about de risking. But if it was to go down the road of decoupling, well, that's just going to be very expensive for businesses. They're going to have to relocate supply chains, relocate sources of manufacturing, shuffle production around the world, maybe shuffle production back to
the US. So there's all kinds of complications, expense delays and under like involved in that. Then you get into people people exchanges, whether it's at student and university level or tourism level, that would be another area impacted. And of course if you go beyond that, then you get into a you know, a deterioration or collapsive relations between both governments. Well, then that obviously speaks to are a very difficult position for the world globally geopolitically at a
time wh they're already our significant tensions. But I think the first step in that ladder would be a lot of disruption for the world economy.
Yeah, let's not forget too.
We've seen China and certainly Russian around or North three or right like, we've seen kind of some outreaches, certainly among those Leland.
Let me put the same question to you.
What's at stake if the relationship between the United States and China breaks down?
Well a lot. But you know, usually when people answer this they talk about market volatility and all kinds of threats. There's a positive side to this too, because the United States has a lot of vulnerabilities to Chinese control supply chains going into the United States, and so yes, there are all kinds of economic disruptions that are possible when you sort of pull these two countries apart from the incredibly interwoven manner that they've been operating it for decades.
But at the same time, if you're the United States, you have to look at your supply chains and say, what do we not want Beijing to have leverage over us on critical minerals, pharmaceuticals, you know, ppe other things like that that have a national security element to them. So look, there's scary things when you talk about disrupting patterns of trade that have been the case for several decades.
On the other hand, I think people are getting smarter on the idea that it doesn't make sense for a country to have to not look at this through a naw security lens and to minimize the vulnerabilities they have to a country that could be its adversary in the future.
And I'm curious that you know, in twenty twenty five, given the global supply chain and what we saw happen during COVID and understanding what different countries are good at manufacturing, is it possible for the US to decouple from China.
It's probably not possible. But let's just say there has been diversification due to a trade war one point zero. When those initial round of tariffs went on. That was not a much narrower band of goods, intermediate goods and the like, but it was enough to cause some businesses to have a look around them and move their production. There was that there was COVID. The pandemic absolutely rattled supply chains and opened a lot of manufacturing executive's eyes.
So there's been diversification there as a result of that. But you know, in terms of bigger picture cand of all of that production come back to say, the US, for example, will no account because it's much more expensive here, labor is more expensive, there are more regulations. It's a very different story in terms of trying to set up manufacturing here. The other point is there are a few other places on the planet that offered to scale that
China offers. I mean, there's always talk about alternatives, maybe India, but China has the infrasecture in scale in place, and that's why it remains so attractive for manufacturing basis.
Yeah, I'm increasingly as I pick up things seeing things that are made out of in India. Hey, Leland just got about thirty forty seconds in a sign that deal is maybe front of mine. President Trump rote on his truth social platforms hour before the US tariffs against China took effect that there was great interest in TikTok, adding a deal would be wonderful for China on some level.
Is this is a sign that all of this is just jockeying by the president for a win, as some have suggested, And forgive me just about thirty seconds.
Again, this is all about sequencing.
So if we're talking about taking care of fentanyl, getting a deal for TikTok, other things like that, which are forefront of the President's mind, sure.
You can get to a deal and all these things.
If Beijing is willing talking about the structural and balances of the relationship that's a bigger deal that will require probably bigger tariffs and a lot more tension. So look, can you get to the first step of this Sure you get to the next step of this lot?
Yeah, a lot longer road.
Listen, both of you. Thank you so much.
Leland Miller, the CEO of China, beige Book International, Bloomberg News Global Economy Reporter, and a current both coming to us from DC.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Now, let's get to two well known tech companies, both with government contracts and with tech billionaires connected to each. We're talking about Palenteer and Tesla. Palenteer shares they are soaring to a record intraday after the Peter Teal co founded company gave a full year revenue forecast that exceeded analyst estimates, driven by quote untamed organic growth in demand for its AI software. And then there's Tesla and it's CEO Elon Musk and his Doze teams seeming takeover of
the US government. We're following both of these stories on Tesla and Elon. President Jump pointing out some para just yesterday.
Elon can't do and won't do anything without our approval, and we'll give him the approval we're appropriate with. There's a conflict that we won't let him get near it. But he does have a good natural instinct. He's got a team of very talented people. We're trying to shrink government, and he can probably shrink it as well as anybody else if done better.
All right, that, of course is President Trump yesterday in the Oval Office. There's a lot going on and just kind of some interesting player around these two companies. Let's get to it with Max Chafkin, Bloomberg BusinessWeek columnists, co host of the elin Ing podcast, author of The Contrarian Peter Tiel in Silicon Valley's Pursuit of Power. He's here in studio and then out there in Denver. Is Kurt Wagner,
Bloomberg News technology reporter. He's author of Battle for the Bird, Jack Dorsey, Elon Musk, and the forty four billion dollar Fight for Twitter. So so perfect to talk to you. I want to start with you, Max. Some earnings business just to get it out of the way. But Pallenteer soaring to a record interday more than twenty two percent after report last night. What is it about this business and why are investors so enthusiastic?
So two things. One is AI.
This is a company that has sort of made its embrace of AI sort of central to how it talks about what it does. This is a company that makes software that helps governments and big companies organized data. So so part of it is that this general sense that big companies and the government are going for AI. And the second part is related to the other thing you mentioned, which is Elon Musk Donald Trump, this sense that the
Trump administration is likely to embrace things like Palenteer. I think both because you have Doge and you have Elon Musk saying we need to make things more efficient. Palenteer has a value proposition there. But also, of course there is a political connection. You know, Palenteer co founded by Peter Teel. Peter Teel still a major shareholder in this company. You know they are going to have you would think at least some kind of inside laye in terms of
trying to get additional contracts. Both because of the relationships with the Teal network because of their AI stuff and because of Teal himself.
Okay, speaking of government contractors, palanteers a government contractor, so too is SpaceX SpaceX founder Tesla, uh, the guy who built Tesla. I'm fair to say, Elon Musk they have or had relationships with President Trump. So that's where we want to go, and we want to bring in Kurt Wagner. What do we know about all that Elon and his team of engineers and others linked to his own company
and the DOGE team. What exactly they're doing at what parts of the US government, what they're asking and what they're trying to accomplish.
Oh, man, I mean that's a lot, But I think generally what you can assume is that Elon and his team are are taking a bit of a forceful approach, right. I Mean, we saw stories come out over the weekend and yesterday about them, you know, essentially bullying their way into having full access to the Treasury Department's payment system. We saw them you know, single handedly closed USAID, right, like this idea that they could go in and just sort of say hey, this agency, this this federal agency.
We don't think they're doing a good job, and we're just gonna you know, shut them down right then and there. And we hear these sort of horror stories come out from employees of these you know, different agencies sort of saying, hey, we're trying to maybe stop this this group of people, We're trying to make sure that they have appropriate you know, access levels to read this classified information, and essentially they're
just forcing their way through. And so what I wrote about this morning in our Tech newsletter was just sort of the parallels between what we're seeing there and what we saw with the Twitter takeover right, which was obviously a very brute force effort as well. Elon shows up, he brings his crew of people who are loyal to him and sort of just span out and start causing
chaos and recon havoc. And I think we're seeing that now, but on the government scale, which is obviously a very different and I think a bit of a scarier situation for people.
Max.
I want to bring you in.
I mean, in terms of when you guys talk about, you know, Elon on the podcast and just you know, the coverage that you have done that. On one hand, I think Elon's probably like this is pretty cool to ask, like, oh my god.
I want to like fix this right.
And on the other hand, I'm like, wait a minute, he's got to be like look at what I have access to, Like, what do you think.
Is his goal?
What is you know he learning or wanting to learn in this process? Is it altruistic or is it well.
I think you have a squirrel. It's probably both, right.
I got both out, both a sense of altruism and a profit motivation. And I think for someone like Elon Musk, those two things are tangled up. You know, Elon Musk he believes and I think this is a genuine belief, not a cynical belief put on to make money, but he believes that yes, humanity.
Needs to get to Mars.
He needs we should spend tens of billions of dollars, you know, as a country put on a Mars mission, and that Elon Musk, having the market leading rocket, should get a large of that money. Now, of course, like that raises some significant questions in terms of conflict of interest, and and I'd say, in addition to being a guy who's very motivated by these kind of big picture things, he is also a guy who tends not to pause.
Much for concerns about conflict of interest, right.
He's he's a shoot from the hip guy, and that's and that's kind of what we're seeing in some of these incidents over the past couple of weeks that Kurt's
talking about. You know, this this actual like almost a physical confrontation between Musk's sort of representatives at DOGE going into us i D and attempting to get access to these classified documents and you had USAID personnel trying to stop them, and so so yeah, it's it's chaotic, and I think there are real questions about sort of legality and whether or not any of this stuff he's doing
is actually legal. And also, of course these these conflict of interest rules because even with USAID, Starlink has taken money from usai D.
So like if he is.
Quote unquote you know, shutting down USAID, which I don't think we really know that has happened, although he.
Has said it will those.
Starlink contracts go away, I mean, and so there are gonna be a lot of questions like that.
Kurt.
One thing that's unique about this situation, and it's not the you know, it's certainly There are a lot of parallels, as you write about, between what happened at Tesla and what's happening right now with Doge. He does report to the President ultimately in this and I'm wondering if that changes things at all for the Elon Musk playbook. He's certainly used to being boss. But as we heard from
the President yesterday, what did he say exactly? He said that Elon can't do and won't do anything without our approval, and will give approval where appropriate. If there's a conflict, we won't let him anywhere near it. That's part of what he said in the Oval office yesterday. What do you make of it?
I mean, it feels like we haven't seen him, you know, slow down at all to this point. Right. I presume perhaps behind the scenes he's saying, Hey, I really want to cut this thing, and President Trump is saying no, no, no, don't touch that. I don't really see that maybe playing out in that way.
Right.
It feels like Trump has certainly given him a wide you know, birth or to go out and do this thing, and to do it in the way that he thinks he should. I think the point that I was trying to make earlier in the Tech column was that, you know, with Twitter, that was a private company that was purchased with private money. Right, Like, if he wants to sort of run that thing aggressively, run it into the ground in certain cases, and deal with the consequences.
That's his choice.
The issue here is that all these decisions he is making and making them at an incredibly fast speed, have impact on you know, every US citizen and including nobody who voted for him, because he wasn't voted, he wasn't elected to this role, right, And so I think the distinction there is like, okay, private business, private ownership versus public funds, public you know, impact, And that's I think the big thing that we need to keep in mind.
Yeah, absolutely totally agree with Kurt.
And I think in where you're seeing real opposition is not from Donald Trump. I mean, it really seems like Donald Trump and Elon Musk are aligned.
At the moment. On him it.
Musk had a Twitter spaces and x spaces over the weekend and he said, I asked Trump if it was okay if to shut down USA a d and he said yes, And then I asked him again he said yes,
you know, really emphasizing that Trump is on board. We have seen a few members of Congress, including Republican members of Congress, raise questions, raised questions about for instance, pep FAR, which is this program HIV medication program that has brought support, and then you know Republicans raising questions about cutting that funding off. Of course, Democrats very spun up. I think, like to Kurt's point about Musk and the government having you know, more shareholders than Elon Musk.
The shareholders are the voters.
You know, That's where we're going to start to That's where the rubber is going to meet the road when we start start seeing congressional opposition because a lot of this stuff can't be really can't be done legally without an Act of Congress.
Max, Well, go ahead, Caryl, go ahead. I was going to say, there are a lot of supporters of what Musk is doing. Look no further than just logging into the for you page on Twitter and you'll see it there.
Right.
Cynics might say, this is a guy with you know, you talked about the Mars connection. There's also the Tesla self driving car legislation connection. There's perhaps the Xai connection if they end up using AI tech. There's the ex payments connection if they want to bring in payments technology. I mean, what are some other potential conflicts of interest you see here?
Yeah, I mean it's conflicts of interest all the way up and down. I mean, Musk, one of the reasons he's been effective, i'd say, over the last couple of weeks, if you if you could give him credit for you know, making a lot of noise, get maybe getting some stuff done, has been that he has a lot of experience with government. So besides the ones you mentioned, Neuralink is going to need FDA approval. That's that's Musk's brain implant if it
wants to go beyond the kind of testing phase. You also have the boring company, right, that's a in infrastructure play that is going to live or die on federal contracts.
Even Tesla.
You mentioned self driving cars, but of course Tesla makes a ton of money, and much of its profit in any given quarter comes from these regulatory credits. So really, like Musk is a master at working the levers of government, and he's trying a playbook that is relatively untested, i'd say, but does come from maybe you know, twenty years or so of experience of trying to bend the levers of power to his will.
Hey, Kurk just got about twenty five seconds here. How confident do we or how much do we really know?
Is going on?
So, in other words, the information flow of what Elon's doing sleeping on the floor or not or whatever, like, how much do we really know? And forgive me just about twenty five seconds.
No, I think it's similar to all of his companies, right, which is that he's surrounded by people who are very loyal to him, who believe that he's in the right and probably trying to protect him. So what you do here is from those people who are willing to stick their neck out or raise their hand and say what I'm seeing you know, doesn't sit well with me, and that includes government employees right now.
All right, guys, thank you so much more to come, no doubt on this issue in the days and weeks to come. Max Schafkin, columnist at Bloomberg Business Seek Kirk Wagner, tech reporter here at Bloomberg News.
This is the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern up on Apple car Play and the Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Cash Betel, President Trump's pick to lead the FBI, received a stock award last week from True Socials parent company worth more than eight hundred thousand dollars. The grant of restricted shares in Truck Media and Technology Group did not, though a pair on Patel's financial Disclosure or Ethics Agreement, which details how federal appointees will handle potential conflicts of interest.
So with what else we need to know on this and how much of a conflict this could actually we turn to Bloomberg News Wealth reporter Annie Massa, who joins us here in our Bloomberg BusinessWeek studio. Annie, you and the team have a great piece out about what exactly was awarded and when. So let's just start there.
What do we know?
Yeah, So, kind of stepping back, what's going on right now? As Trump's nominees are going through their Senate confirmation hearings, they're putting out disclosure reforms that give a full kind of financial picture of what they own, the assets that they have, what they own and a plan for what they intend to keep divest and it all goes through this Office of Government Ethics. So Cash Pattel is of
course going through the confirmation process. And something that happened last week that we took note of was some corporate filings came out from Trump Media and Technology Group, which is the platform or the parent company of Truth Social where mister Patel is on the board, and he along with other board members were given awards of restricted stock.
So these awards, the timing is interesting, and these awards do not show up on that ethics disclosure, which some ethics experts who I spoke to said kind of raise raise some cause for question of what he would actually do with those restricted shares.
So what does Cash Patil say? What does Trump Media say?
So Trump Media, So we did not receive a response for the UH for the story. But I mean it's
true that companies award shares to board members. The timing, the timing is notable because the company is giving these shares out just as actually it was both Cash Battel and Linda McMahon who's up for a Department of Education secretary, they both received these kind of restricted stock awards and so if you step back, it's an interesting time for that to happen because the company presumably does know that these two people are leaving to go be in government positions,
So it's an interesting time to give those awards, and they vest, they will vest over a period through twenty twenty seven.
What are the rules when it comes to not just the financial disclosures, but what people who get confirmed in positions such as this have to do with assets once they are confirmed.
So this is the process that all of these nominees are going through. There's a plan in place, and it's disclosed.
It's disclosed to senators, it's disclosed to the public so that there's accountability, and so that the idea is to go through all of their financials, see what they own, see where potential conflicts might arise, and come up with some plan that then the og has approved and seen this government ethics body and put out there for how for what they would have to divest, what they would keep. And it's a plan that everyone can see. And so
what's notable here is there's no plan outlined. Mister Ptel said he would step down from his board position, but there's no specific plan outlined. That you can see on what would happen to those very recently granted shares, And I mean it bears mentioning that the value of those that those restricted shares last week was over eight hundred thousand dollars, so it's not a small sum.
You also know in the story that his disclosures revealed another potential conflict of interest, and that is a stake of worth at least a million dollars in the parent company, a fast fashioned brand shan which we face some legal challenges here in the United States and some back and forth they do they have to disclose and do they have to divest?
That's one where there's a there's a plan in place. In the disclosures that he has. They report these in ranges, so between one million dollars and five million dollars of restricted shares in that parent company, and there's more.
Of a plan laid out there.
He said in the disclosures that.
There matters involved with this parent company could come across his desk at the FBI, but he would be recused from them, and so there's more of a plan that we can see there.
But it was a big asset that was disclosed.
It's interesting seeing the assets that he has and also the business income that he's made.
What about consulting and consulting work is absolutely part of this as well, And you know that's part of his relationship to for example, Trump Media, which is I mean one other thing that bears mentioning with that relationship and being on the board of that company is you know, Trump is the majority I feel like it bears mentioning that Trump is the majority shareholder of Trump Media. It's different from other holdings, right to say, I mean, it's
important to keep that in mind. So in conversations about what does this all mean, what kept coming up with the professors and experts that I spoke to was, you know, what does it mean to have that company with that ownership structure?
Trump has those.
Shares in a trust that's overseen by his son.
You know, what does that mean to have an FBI director who who is could perhaps.
Be owed stock?
Like what will happen to those share units?
It was an open question on some people's.
Words, and I guess what I was asking, like what is I wanted a reminder of the rules they have to disclose or do they have to disclose? And do they have to ultimately divest or put it in a blind trust or something like. I don't remember what are the rules?
The rules, it's kind of a case, but it's a bit of a case by case for different nominees.
Every nominee has a different financial picture.
But if a conflict of interest is determined to be there, there are options they can they can divest or sometimes they can hold on to restricted stock units. There's not just like one path or one type of asset. There's a review process that happens, and that's what all these nominees are going through. And the point is to get everyone on the same page with a set of facts
about this. You know, this is what I own, this is what I'm going to do with it, right, and these are the potential conflicts in how they might arise.
We've had a long conversation with Max Chafkin and Kurt Wagner about Elon Musk and the different conflicts of interest that Elon Musk might have or appearance of conflict of interests. I should say, given what his role is at DOGE, are we just in this kind of new era where these things are acceptable and no longer looked at as actual conflicts it's just the way it goes when you hire people who have backgrounds such as these.
I mean, it's not new to have people coming into government roles who have some kind of business ties.
Of course that's happened before.
But what's unprecedented here is something like Trump having you know, a majority stake in a publicly traded firm. There are people in who are you know, coming into his administration presumably who have had ties financial ties to that firm. I mean, these are the questions that are completely new in the Trump two point zero era.
Yeah, it would be like, you know, I'm trying to think about, you know, Jack Welch being President of the United States and somebody from his board being his I don't know, secretary of what. You know, if you just pick your CEO, like you do wonder like that's just see.
Well, Devin Nunez, who runs true social left Congress and went in in you know, ran through social right.
Like there's this now there's always this back and forth.
But you do wonder about someone who is a key member of an administration, right and then having a lot of exposure to the company that is owned by the President of the United States exactly.
So that's where you get into territory where it's.
Really something different, really something beyond Wall Street DC for it.
And potentially not you know, your typical conflict of interest. It's just interesting right as we try to make our way through and understand.
Annie.
Thank you, really appreciate it. Bloomberg News Wealth Reporter Annie Massik.
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