Latest / Bloomberg Intelligence / Supreme Court Lets Trump Strip 500,000 Migrants of Legal Status

Transcript

Supreme Court Lets Trump Strip 500,000 Migrants of Legal Status · Bloomberg Intelligence

• 0:02
  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
• 0:10
  Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
• 0:14
  Speaker 1: Eastern on Apple, Coarclay and Android Auto with the Bloomberg
• 0:17
  Speaker 1: Business App. Listen on demand wherever you get your podcasts,
• 0:21
  Speaker 1: or watch us live on YouTube.
• 0:23
  Speaker 2: Earlier across the tape that the Supreme Court is going
• 0:27
  Speaker 2: to let President Trump strip five hundred thousand migrants of
• 0:29
  Speaker 2: legal status. Let's get the latest reporting on that. Greg Store,
• 0:33
  Speaker 2: Bloomberg Supreme Court Reporter, Greg. What did the court ruled
• 0:37
  Speaker 2: here today?
• 0:38
  Speaker 3: So the Trump administration is trying to end a so
• 0:42
  Speaker 3: called parole status for people from Cuba, Haiti, Nicaragua, and Venezuela.
• 0:47
  Speaker 3: And what that is is a temporary status that let
• 0:49
  Speaker 3: people live and work here because their home countries are
• 0:52
  Speaker 3: in crisis. That it's designed to be for humanitarian reasons.
• 0:56
  Speaker 3: And the question was whether the Trump administration could do
• 0:59
  Speaker 3: thisguorically rather than on a case by case basis. A
• 1:03
  Speaker 3: lower court had blocked the Trump administration from doing this.
• 1:06
  Speaker 3: The Supreme Court today lifted that block. That means these
• 1:11
  Speaker 3: roughly five hundred thousand people. We don't know the precise number.
• 1:16
  Speaker 3: No longer have those protections, and many of them are
• 1:19
  Speaker 3: open to or subject to immediate deportation.
• 1:23
  Speaker 4: Who are these five hundred thousand and did they come
• 1:26
  Speaker 4: here legally?
• 1:27
  Speaker 3: They did come here legally. They are allowed into the program.
• 1:33
  Speaker 3: They were given this status by the Biden administration, and
• 1:43
  Speaker 3: they have work permits. They are allowed to be here.
• 1:46
  Speaker 3: But it was always understood that this was a temporary program.
• 1:50
  Speaker 3: It was done on humanitarian basis. You have to get
• 1:55
  Speaker 3: into this program, you have to get a US sponsor,
• 1:58
  Speaker 3: you have to get US government a approval, and you
• 2:00
  Speaker 3: actually have to pay for your own flight into the country.
• 2:04
  Speaker 3: But again it was always designed to be temporary. And
• 2:07
  Speaker 3: what the Trump administration says it's doing is we're just
• 2:10
  Speaker 3: ending that temporary status has.
• 2:12
  Speaker 2: The Are are these widows and orphans or they hardened
• 2:16
  Speaker 2: gang criminals? Do we know anything more about them?
• 2:20
  Speaker 3: Well, it's a big group of people, so undoubtedly there's
• 2:23
  Speaker 3: there's a mix. But unlike some other things, these are
• 2:26
  Speaker 3: not people who just slipped across the Mexican border. They
• 2:29
  Speaker 3: did have to get that US sponsor, The government had
• 2:32
  Speaker 3: to actually approve them, So there has been some vetting
• 2:34
  Speaker 3: of these people going in, so you know, it is
• 2:39
  Speaker 3: certainly not the case that well, it's unlikely that a
• 2:43
  Speaker 3: big category of them are going to be you know,
• 2:45
  Speaker 3: hardened criminals, to use your expression, but we don't know
• 2:49
  Speaker 3: a whole lot, and we don't even as I suggested,
• 2:52
  Speaker 3: know the exact number of people, because some of them
• 2:55
  Speaker 3: may have left. We know that there were about five
• 2:58
  Speaker 3: hundred and thirty two thousand people who came in initially
• 3:02
  Speaker 3: under these programs. We don't know how many remain in
• 3:05
  Speaker 3: the country under that status. Some of them may have
• 3:07
  Speaker 3: some other protected status and maybe aren't subject to immediate deportation,
• 3:12
  Speaker 3: but certainly a big chunk of them will be subject
• 3:15
  Speaker 3: to it.
• 3:16
  Speaker 2: All right, Greg, thank you so much for your reporting.
• 3:18
  Speaker 2: Really appreciated. Greg Store, Bloomberg Supreme Court a reporter. Appreciate that.
• 3:23
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 3:27
  Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto
• 3:30
  Speaker 1: with the Bloomberg Business app. Listen on demand wherever you
• 3:33
  Speaker 1: get your podcasts, or watch us live on YouTube.
• 3:37
  Speaker 2: If you look at the market, we had that twenty
• 3:39
  Speaker 2: percent so off in the SP five hundred earlier in
• 3:42
  Speaker 2: the year as a market was trying to figure out
• 3:44
  Speaker 2: what's going on with the terrort story. The Mark's kind
• 3:47
  Speaker 2: of retraced most of that coming back up. Son other
• 3:49
  Speaker 2: question is where do we go from here? So let's
• 3:51
  Speaker 2: check in with Brian Levick, Global Market Strategies at Invesco.
• 3:56
  Speaker 2: He's zooming in from somewhere in the Jersey Burbs there.
• 4:00
  Speaker 2: What's the message to your clients these days? We've kind
• 4:03
  Speaker 2: of been whips all but if you look back on
• 4:05
  Speaker 2: a you to day basis, it's almost like nothing happened here.
• 4:09
  Speaker 5: It's amazing. It's like if you woke up today, you
• 4:11
  Speaker 5: wouldn't have realized that any of this has been going on.
• 4:13
  Speaker 5: You see that not only in the equity market, but
• 4:15
  Speaker 5: also the bond market, inflation expectations, really yields, corporate bond
• 4:20
  Speaker 5: spreads are actually not all that changed since the beginning
• 4:23
  Speaker 5: of the year. Either. We're talking to our clients about
• 4:26
  Speaker 5: having optionality in our portfolios. We don't know which way
• 4:30
  Speaker 5: we're going to be whipsawd, but we also don't want
• 4:33
  Speaker 5: to be out of these markets. So diversification is sometimes,
• 4:39
  Speaker 5: you know, a cliche, but it does make sense to
• 4:41
  Speaker 5: try and diversify your portfolio bring down the valuation. If
• 4:46
  Speaker 5: you're just SMP five hundred, You're sitting at an elevated valuation,
• 4:50
  Speaker 5: So bring down the valuation of the portfolio potentially protect yourself.
• 4:54
  Speaker 5: But if things do become better on a policy front,
• 4:59
  Speaker 5: you know, other parts to the market, whether it's value
• 5:01
  Speaker 5: stocks Europe and MidCap should do well in more of
• 5:05
  Speaker 5: a recovery type feel. So you know, heads hopefully to
• 5:10
  Speaker 5: you win, tails hopefully you win.
• 5:13
  Speaker 4: Hey, Brian, can you ditch US exceptionalism for European exceptionalism.
• 5:19
  Speaker 5: I don't like getting rid of the word exceptionalism because
• 5:23
  Speaker 5: I think that it gives US investors the sense that
• 5:26
  Speaker 5: they shouldn't be invested in the United States. There still
• 5:30
  Speaker 5: are exceptional businesses, and it's still going to be an
• 5:34
  Speaker 5: exceptional economy over the long term. But what you want
• 5:39
  Speaker 5: to think though, with regards to Europe is there's a
• 5:42
  Speaker 5: couple of things happening. For one, European equities have been cheaper,
• 5:47
  Speaker 5: but generally for a good reason, so you need a
• 5:49
  Speaker 5: catalyst to unlock that. What you have right now, of course,
• 5:54
  Speaker 5: is easier policy out of the European Central Bank than
• 5:57
  Speaker 5: you're likely to have out of the US Federal Reserve.
• 6:00
  Speaker 5: Also have oncoming stimulus from some of the major European
• 6:04
  Speaker 5: economies and all that's leading to some weakness in the
• 6:07
  Speaker 5: US scholars. So yeah, I would say we do want
• 6:09
  Speaker 5: to diversify into non US stocks. Investors in the US
• 6:14
  Speaker 5: have not wanted to do that for a while. I
• 6:16
  Speaker 5: don't think that's trading one exceptionalism for the other. It's
• 6:20
  Speaker 5: more increasing our exposure to the part of the world
• 6:24
  Speaker 5: where I think a lot of people have become pretty
• 6:26
  Speaker 5: heavily underweighted too.
• 6:28
  Speaker 2: Red headline crossing the Bloomberg Tromoor. I want to get
• 6:30
  Speaker 2: to the Supreme Court. Let's Trump strip five hundred thousand
• 6:34
  Speaker 2: migrants of legal status, so we'll have more reporting on
• 6:37
  Speaker 2: that throughout the day. Brian, what are we doing in
• 6:39
  Speaker 2: the world of fixed income here? I considered to your
• 6:42
  Speaker 2: treasury and get darn near four percent, which seems like
• 6:44
  Speaker 2: a good living there. Do I take credit risk on
• 6:48
  Speaker 2: top of that?
• 6:49
  Speaker 5: Yeah, I would take credit risk. You know, four percent
• 6:53
  Speaker 5: is what people used to beg for, and now you
• 6:55
  Speaker 5: can get spread above that on good fundamental corporate bonds.
• 6:59
  Speaker 5: You can get that in a tax equivalent basis on
• 7:03
  Speaker 5: fundamentally sound municipal bonds. So look, I mean you you again,
• 7:08
  Speaker 5: you you don't want to put all your risk into
• 7:11
  Speaker 5: one place, So diversified mix can help. But I think
• 7:15
  Speaker 5: just sitting in money markets, you're missing the opportunity to
• 7:19
  Speaker 5: augment the yield, and you know there's there's the old
• 7:23
  Speaker 5: pick up in other parts of these markets.
• 7:26
  Speaker 4: What does that tell you, how yield at this point
• 7:28
  Speaker 4: about the recession.
• 7:29
  Speaker 6: Risk, it tells you it's not likely in the cars,
• 7:33
  Speaker 6: I mean how US high yeald bonds have been one
• 7:36
  Speaker 6: of the best performing asset classes in the United States
• 7:39
  Speaker 6: this year.
• 7:40
  Speaker 5: You know, when we saw volatility spiking the way we
• 7:43
  Speaker 5: did following Liberation Day, we did see a modest pick
• 7:46
  Speaker 5: up in high heal bond spreads, but still well below
• 7:49
  Speaker 5: the long term average. That was comforting to us. I
• 7:53
  Speaker 5: still few the high heal bond market as the canary
• 7:55
  Speaker 5: and the coal mine for the cycle. So if volatility
• 7:59
  Speaker 5: is picking up and credit spreads can't even get to average,
• 8:03
  Speaker 5: that's a buying opportunity in our perspective, And it's our
• 8:07
  Speaker 5: view that it's a market that is telling us that
• 8:10
  Speaker 5: a recession is not in the offing, at least in
• 8:14
  Speaker 5: the immediate term.
• 8:15
  Speaker 2: Hey, Brian, we've seen risk assets most notably US equities
• 8:19
  Speaker 2: kind of snap back here from some of the initial
• 8:22
  Speaker 2: shock selling earlier in the year. We have not seen
• 8:25
  Speaker 2: that in the US dollar to The dollar remains at
• 8:27
  Speaker 2: its you know, kind of recent lows here. What is
• 8:30
  Speaker 2: that telling you?
• 8:32
  Speaker 5: Yeah, what it's telling us is that there's still some
• 8:36
  Speaker 5: concerns around US policy and there's still some greater excitement
• 8:41
  Speaker 5: around being in currencies outside of outside of the United States.
• 8:47
  Speaker 5: So while the US has essentially gotten back to flat,
• 8:52
  Speaker 5: you've seen substantially higher returns in other parts in the market,
• 8:55
  Speaker 5: particularly particularly Germany of other European countries, as well as
• 9:00
  Speaker 5: some emerging markets. So what it tells me is back
• 9:03
  Speaker 5: to that diversification story. It's not a collapse in the dollar,
• 9:07
  Speaker 5: but it's a rebalancing a way to some extent or
• 9:11
  Speaker 5: diversifying away from.
• 9:12
  Speaker 7: Remember, the US dollar was at very elevated levels and
• 9:16
  Speaker 7: that was based on US growth being stronger than the
• 9:20
  Speaker 7: rest of the world, and you know that starts to
• 9:24
  Speaker 7: narrow as we have concerns about ongoing trade policy.
• 9:29
  Speaker 2: Brian, thanks so much for joining us, really appreciate it.
• 9:31
  Speaker 2: On a summer Friday, Brian love It, global macro strategist
• 9:35
  Speaker 2: at Invesco.
• 9:38
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 9:41
  Speaker 1: weekdays at ten am Eastern on Applecarclay and Android Auto
• 9:45
  Speaker 1: with the Bloomberg Business App. Listen on demand wherever you
• 9:48
  Speaker 1: get your podcasts, or watch us live on YouTube.
• 9:52
  Speaker 2: Right now, let's go down to Dallas, Texas. Michael McKee
• 9:55
  Speaker 2: is in our Texas bureau down there, and I can
• 9:57
  Speaker 2: tell you he does all the economic stuff for Bloomberg.
• 10:00
  Speaker 2: We know Michael McKee. Yesterday he was smack in the
• 10:03
  Speaker 2: oil patch. We're talking like Midland, Odessa, Texas oil gas.
• 10:07
  Speaker 2: The setting of my new favorite TV showed Landman and
• 10:11
  Speaker 2: I don't know what he was doing now, Usually that's.
• 10:13
  Speaker 4: Out the terror's job as a roused about.
• 10:16
  Speaker 2: Roused Michael Mickey arroussabout on an oil rig. Mike, thanks
• 10:20
  Speaker 2: so much for joining us here. We had some economic
• 10:22
  Speaker 2: data today. It seems like inflation, Mike, is still pretty
• 10:26
  Speaker 2: much being contained here. What did you take away from
• 10:29
  Speaker 2: some of the PCEE data we saw this morning.
• 10:31
  Speaker 8: Well, basically, you're right, Paul, we're seeing inflation come down.
• 10:34
  Speaker 8: We're just a tenth of a percent over the fed's target.
• 10:37
  Speaker 8: On the pce headline, he came in at two point
• 10:40
  Speaker 8: one percent this month, So the FED is very close
• 10:42
  Speaker 8: to being able to say soft landing, except of course,
• 10:46
  Speaker 8: for the tariffs and everything else that's going on with
• 10:48
  Speaker 8: the Trump administration. And that's the hard part is consumer
• 10:52
  Speaker 8: spending held up wasn't great, but it was okay in
• 10:55
  Speaker 8: April after a lot of people pulled forward purchases into
• 10:58
  Speaker 8: March in February, So where do we go from here?
• 11:02
  Speaker 8: That's where the FED is stuck because minute by minute
• 11:07
  Speaker 8: we get new court decisions that make the tariffs on,
• 11:10
  Speaker 8: make tariffs off, et cetera. So they can't really do anything.
• 11:13
  Speaker 8: So we're still sort of still in this groundhog day
• 11:16
  Speaker 8: of waiting to see what happens next.
• 11:18
  Speaker 4: All right, so the Fed's dealing with uncertainty too. There's
• 11:21
  Speaker 4: a meeting coming up what the eighteenth, and this time around,
• 11:25
  Speaker 4: we're going to get the little dot things. What are
• 11:28
  Speaker 4: we going to learn?
• 11:30
  Speaker 8: Nothing. When you talk to Fed officials, and this was
• 11:34
  Speaker 8: of course, before this last week of back and forth
• 11:37
  Speaker 8: court decisions, most of them would say, you know, take
• 11:39
  Speaker 8: take these numbers with a grain of salt. We just
• 11:41
  Speaker 8: have to basically act as if the current conditions are
• 11:45
  Speaker 8: going to last, and we have no reason to think
• 11:48
  Speaker 8: that they are going to, but we don't have anything
• 11:51
  Speaker 8: to base a.
• 11:51
  Speaker 5: New forecast on.
• 11:52
  Speaker 8: So I think when you get the decision, the dot
• 11:55
  Speaker 8: plot and the new summary of economic projections, that they
• 11:59
  Speaker 8: will have a shelf life of an hour or so
• 12:02
  Speaker 8: and then we'll be back to, well what happens next, Mike.
• 12:06
  Speaker 2: We also got the University of Michigan data out for
• 12:09
  Speaker 2: the month of May, and we showed an improvement from
• 12:11
  Speaker 2: kind of the shocking decline we saw last month, but
• 12:14
  Speaker 2: inflation expectations, while they've come down, are still pretty darn high. Here,
• 12:20
  Speaker 2: what would you learn from the MISS data?
• 12:23
  Speaker 8: We didn't learn a whole lot except that people weren't
• 12:26
  Speaker 8: feeling as bad about the economy in April as they were,
• 12:30
  Speaker 8: or in May, rather as they were in April. We
• 12:33
  Speaker 8: saw a rise in consumer expectations, but it's still below
• 12:37
  Speaker 8: fifty and it didn't match at all the rise in
• 12:40
  Speaker 8: expectations in the Conference Board survey earlier this week. So
• 12:44
  Speaker 8: we leave to somewhat in limbo on what people think
• 12:46
  Speaker 8: about the economy going forward. As you mentioned, the inflation
• 12:50
  Speaker 8: numbers come down a little bit, but they're still very elevated.
• 12:53
  Speaker 8: And right now, Conference Board and Michigan match in what
• 12:57
  Speaker 8: people think is going to happen over the next year. Now,
• 12:59
  Speaker 8: the drop in the inflation expectations maybe because gasoline prices
• 13:04
  Speaker 8: have come down a little bit and food prices have
• 13:06
  Speaker 8: stopped rising as much. But at this point, people still
• 13:10
  Speaker 8: think that the President's policies are going to be inflationary,
• 13:13
  Speaker 8: and that's the consensus of most economists. So it's not
• 13:17
  Speaker 8: telling us anything new. It's telling us that not much
• 13:19
  Speaker 8: has changed.
• 13:21
  Speaker 4: Way back when Arthur Burns was called in to meet
• 13:24
  Speaker 4: with Richard Nixon, we know the outcome of that. Yesterday,
• 13:28
  Speaker 4: was it that Donald Trump met with j Powell. What's
• 13:33
  Speaker 4: going to be the outcome of this meeting?
• 13:34
  Speaker 8: If anything, nothing, I don't think Jay Pole reiterated the
• 13:41
  Speaker 8: FED doesn't know what they're going to be doing. And
• 13:43
  Speaker 8: here's where we see the economy at the moment. The
• 13:46
  Speaker 8: President tells us that he told Jay Powell to cut
• 13:49
  Speaker 8: interest rates, but the Fed isn't going to do what
• 13:52
  Speaker 8: the President asks just because he's asking if economic conditions
• 13:55
  Speaker 8: don't warrant it. What it may be is that if
• 13:58
  Speaker 8: things do turn out better than expected, then Donald Trump
• 14:02
  Speaker 8: can come out and say well, I told you so.
• 14:05
  Speaker 8: I told Paul so, and they didn't listen to me.
• 14:07
  Speaker 8: But if things turn out as economists expect, then Paul
• 14:11
  Speaker 8: has the better response.
• 14:12
  Speaker 2: All right, Mike, thanks so much for joining us. Michael McKee,
• 14:14
  Speaker 2: International Economics and Policy corresponding for Bloomberg News from our
• 14:18
  Speaker 2: Dallas bureau. He's got to get back to New York.
• 14:20
  Speaker 2: Fly back to New York on a summer Friday.
• 14:21
  Speaker 4: We could go wrong.
• 14:22
  Speaker 2: I mean, you know, for I don't know where he's going,
• 14:26
  Speaker 2: but I just I've always voided Friday traveling in general,
• 14:31
  Speaker 2: particularly in the summer. That's just kind of been my
• 14:33
  Speaker 2: strategy all along. Sometimes it works, sometimes it doesn't.
• 14:37
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 14:41
  Speaker 1: weekdays at ten am Eastern on Apple Corplay and Android
• 14:44
  Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
• 14:48
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 14:51
  Speaker 2: We get the latest on what's happening down in Washington, DC.
• 14:54
  Speaker 2: When I say the latest, people we're doing it on
• 14:56
  Speaker 2: any hour by hour baby basis. I think it's not
• 14:59
  Speaker 2: day to day. But somebody who actually has a this
• 15:01
  Speaker 2: is what they do. They kind of tell us what's
• 15:03
  Speaker 2: going on in watching in DC, and they're so valuable
• 15:06
  Speaker 2: to us in our audience. Henrietta trez is the absolute
• 15:09
  Speaker 2: best managing partner and director of economic policy for Veda Partners. Here,
• 15:13
  Speaker 2: let's just start with tariff's Henrietta, the courts are kind
• 15:18
  Speaker 2: of going all over the place. What's the understanding in
• 15:21
  Speaker 2: Washington with the need administration of kind of where they
• 15:23
  Speaker 2: are these days?
• 15:25
  Speaker 9: Well, I appreciate having me on.
• 15:27
  Speaker 10: The administration is preparing for all avenues, and fortunately for them,
• 15:32
  Speaker 10: they have so many available pathways to perpetuate the president's
• 15:36
  Speaker 10: trade wars and to keep the tariffs on. And I
• 15:38
  Speaker 10: think that's why the market is not responding with the
• 15:40
  Speaker 10: bulliants today or even yesterday that the AIBA tariffs have
• 15:43
  Speaker 10: been taken off. The reality is we need to pivot
• 15:47
  Speaker 10: to Section three oh one, which of course was the
• 15:49
  Speaker 10: entire rationale and the authority used to wage the trade war.
• 15:53
  Speaker 9: With China in the first Trump term.
• 15:55
  Speaker 10: We need to get very seriously in the weeds on
• 15:57
  Speaker 10: sectoral tariffs which are coming across sectors, semiconductors, pharmaceuticals, copper, trucking,
• 16:04
  Speaker 10: air cargo free, you know, the whole shebang. And then
• 16:07
  Speaker 10: we really need to start thinking about stacking those tariffs,
• 16:11
  Speaker 10: what that.
• 16:11
  Speaker 9: Might mean for individual sectors.
• 16:13
  Speaker 10: And then, of course some components of the tax bill
• 16:15
  Speaker 10: that also include effectively tariff strategy and authority for the
• 16:19
  Speaker 10: Treasury Secretary. Something that's really captured the street's attention in
• 16:22
  Speaker 10: the last couple of days is section eight ninety nine,
• 16:24
  Speaker 10: which creates an authority for the Treasury Secretary too effectively
• 16:29
  Speaker 10: tax entities from foreign nations, including individuals that have unfair
• 16:33
  Speaker 10: trade practices or unfair tax practices on everything from the
• 16:37
  Speaker 10: digital services trade and beyond. So there's a lot still
• 16:41
  Speaker 10: to do, and you know, the trade wars are going
• 16:43
  Speaker 10: to be a hallmark of President Trump's second term, just
• 16:46
  Speaker 10: like they were in his first.
• 16:47
  Speaker 4: Okay, did you just tell me that uncertainty is far
• 16:50
  Speaker 4: from concluded.
• 16:53
  Speaker 9: I think it's ramping up.
• 16:54
  Speaker 10: I mean, we had a brief reprieve when AIPO was
• 16:56
  Speaker 10: the law of the land, and now we're in you know,
• 16:59
  Speaker 10: get out your numbers two oh one, two two, three
• 17:02
  Speaker 10: oh one. You know, this is what you this is
• 17:04
  Speaker 10: what you need to pay for now is the expertise
• 17:06
  Speaker 10: around these various specific components.
• 17:09
  Speaker 2: So I guess that's there's more avenues for the administration
• 17:13
  Speaker 2: to pursue to pursue trade policy. But my understanding is
• 17:16
  Speaker 2: they are They take much longer than just saying we're
• 17:19
  Speaker 2: going to have ten percent across the board tariffs, which
• 17:23
  Speaker 2: the president can do with the stroke of a pen.
• 17:25
  Speaker 2: What's the timing associated with all this? It sounds complicated, Yeah,
• 17:28
  Speaker 2: great question.
• 17:29
  Speaker 10: So there are The IEPA Statute was the fastest, blondest
• 17:33
  Speaker 10: and easiest instrument that the president could have taken up,
• 17:36
  Speaker 10: and that's exactly what he did.
• 17:37
  Speaker 9: But we have a number of components that are.
• 17:41
  Speaker 10: Already in the pipeline, already in effect, and also that
• 17:45
  Speaker 10: can easily be effectuated. So, for example, the Balance of
• 17:48
  Speaker 10: Payments Authority, which is something Ambassador Lithheiser, president Trump's first
• 17:51
  Speaker 10: trade representative, talked about in the run up to President
• 17:55
  Speaker 10: Trump's win in November of twenty twenty four, which is
• 17:58
  Speaker 10: immediately imposed a balance at payments authority, which is an
• 18:01
  Speaker 10: adval arum duty of up to fifteen percent for one
• 18:04
  Speaker 10: hundred and fifty days on any nation where there's a
• 18:06
  Speaker 10: trade deficit.
• 18:06
  Speaker 9: That can happen very quickly.
• 18:08
  Speaker 10: Customs and Border protection can change tariff rates within twelve hours,
• 18:12
  Speaker 10: so that's something to be mindful of as sort of
• 18:14
  Speaker 10: an AIPA replacement. The drawback is that it's capped at
• 18:18
  Speaker 10: one hundred and fifty days unless Congress authorizes an extension.
• 18:21
  Speaker 9: It's my base case expectation.
• 18:23
  Speaker 10: That Congress will not authorize that extension, mostly because many
• 18:28
  Speaker 10: Republicans do not support the President's tariffs because of course
• 18:32
  Speaker 10: they are taxes on consumers, and they're seeing the blowback
• 18:35
  Speaker 10: in various industries like the farming sector and small businesses
• 18:38
  Speaker 10: in manufacturers who are struggling with the lack of imports
• 18:40
  Speaker 10: from China right now. But compounding that are the Section
• 18:44
  Speaker 10: two thirty two tariffs that are already in place, including
• 18:46
  Speaker 10: on automobiles and automobile bill parts. Those rates are twenty
• 18:50
  Speaker 10: five percent for the most part. They can be ratcheted
• 18:52
  Speaker 10: up overnight. The President also has a series of investigations
• 18:57
  Speaker 10: already in the works whose comment period have ended, and
• 19:01
  Speaker 10: they can release their findings and impose new tariffs pretty
• 19:04
  Speaker 10: much at any time. Now. That applies to the semiconductor space,
• 19:07
  Speaker 10: the pharmaceutical space.
• 19:09
  Speaker 9: Copper, and a couple of others.
• 19:10
  Speaker 10: And then I think the most important to be mindful
• 19:12
  Speaker 10: of is Section three oh one this is the authority
• 19:16
  Speaker 10: to tariff everything coming in from China. In Trump's first term,
• 19:19
  Speaker 10: we did that across List one, two, three, four A,
• 19:23
  Speaker 10: and we haven't done it on List for B. But
• 19:25
  Speaker 10: this is five hundred and fifty billion dollars worth of trade.
• 19:27
  Speaker 10: And there is no upper bound on the tariff rate
• 19:30
  Speaker 10: that can be imposed under Section three oh one that
• 19:32
  Speaker 10: I've ever been able to find. So we're mostly at
• 19:35
  Speaker 10: twenty five percent now, no reason that can't go up
• 19:37
  Speaker 10: to fifty or one hundred and forty five.
• 19:40
  Speaker 4: A reporter asked the president the taco question, and you
• 19:44
  Speaker 4: heard his response. I think the Trump always chickens out
• 19:47
  Speaker 4: on tariffs of this sort. He was angry, and he
• 19:52
  Speaker 4: sounded even more emboldened that What was your take.
• 19:56
  Speaker 10: It just reminded me of the twenty eighteen escalation. I'm
• 19:59
  Speaker 10: sure y'all remember it at the time. I'll never forget it.
• 20:02
  Speaker 10: The President got upset in the Oval office and he
• 20:04
  Speaker 10: escalated tariffs almost immediately and during.
• 20:07
  Speaker 9: The hot summer months.
• 20:09
  Speaker 10: We saw that repeatedly throughout twenty eighteen, and I think that.
• 20:12
  Speaker 9: We're looking at it again here.
• 20:13
  Speaker 10: I mean, these are very emotional, heady times for him,
• 20:17
  Speaker 10: and when he puts these tariffs on it, here's something
• 20:20
  Speaker 10: like the street doesn't take him seriously.
• 20:22
  Speaker 9: That's got to be pretty embarrassing. So obviously we're seeing
• 20:24
  Speaker 9: escalation today.
• 20:25
  Speaker 2: All right, that's tariff's Let's move on to another areas
• 20:28
  Speaker 2: of your expertise, which is Capitol Hill legislation. We've got
• 20:33
  Speaker 2: a House tax bill. I guess the Senate's now looking
• 20:36
  Speaker 2: at it. Where are we with that important piece of legislation.
• 20:41
  Speaker 10: We've got a cup seventy two hours before things really
• 20:44
  Speaker 10: kick off on the Senate side.
• 20:46
  Speaker 9: The House passed their bill.
• 20:47
  Speaker 10: As you point out, it is very comprehensive and really
• 20:50
  Speaker 10: thread the needle between a whole host of factions that
• 20:53
  Speaker 10: just don't exist on the Senate side. So, for example,
• 20:56
  Speaker 10: the deduction for the salt cap is very generous in
• 21:00
  Speaker 10: the House passed legislation, probably about two hundred billion dollars,
• 21:05
  Speaker 10: more generous than anything the Senators will agree to.
• 21:08
  Speaker 9: So that's going to have to.
• 21:08
  Speaker 10: Be something that they change when the Senate takes up
• 21:10
  Speaker 10: their bill.
• 21:11
  Speaker 9: I suspect it'll.
• 21:12
  Speaker 10: Probably be about three weeks before we see any legislation
• 21:15
  Speaker 10: from the Senate Finance Committee. This is the most critical
• 21:18
  Speaker 10: committee in the Senate. Unlike on the House side where
• 21:21
  Speaker 10: we have Energy and Commerce that had to cut believe
• 21:24
  Speaker 10: it's seven hundred and fifteen billion dollars from Medicaid and
• 21:27
  Speaker 10: then a separate Ways and Means committee that tackle the
• 21:30
  Speaker 10: four trillion dollar tax package. That's all one committee on
• 21:33
  Speaker 10: the Senate side. So we're going to get their package
• 21:35
  Speaker 10: late in the process, probably towards.
• 21:37
  Speaker 9: The end of June.
• 21:39
  Speaker 10: They're hoping that they can get legislation through their chamber
• 21:42
  Speaker 10: by the fourth of July, which I think is distinctly
• 21:44
  Speaker 10: possible and puts.
• 21:45
  Speaker 9: Us on a path to get that bill passed.
• 21:47
  Speaker 10: And signed into law by the July twenty fourth recess
• 21:51
  Speaker 10: in the House of the August first start of the
• 21:53
  Speaker 10: recess in the Senate, since.
• 21:55
  Speaker 4: Is breaking news and do this in twenty seconds. The
• 21:57
  Speaker 4: Supreme Court ruling letting the Administration strip five hundred thousand
• 22:02
  Speaker 4: migrants of legal status, can you speak to the importance
• 22:05
  Speaker 4: of migrants to the US economy real quick?
• 22:09
  Speaker 10: Yeah, A migration to the US economy is critical for
• 22:12
  Speaker 10: the housing sector. One of the sectoral tariffs I talked
• 22:14
  Speaker 10: about I didn't mention was the lumber tariffs. I mean,
• 22:17
  Speaker 10: these are critical for the housing industry, and the combination
• 22:20
  Speaker 10: of kicking out five hundred thousand immigrants and imposing tariffs
• 22:24
  Speaker 10: on lumber has got to be brutal for that whole sector.
• 22:26
  Speaker 9: Really would focus on that.
• 22:27
  Speaker 2: Henrieta Trees, thank you so much.
• 22:29
  Speaker 5: We appreciate it.
• 22:29
  Speaker 2: Henryeta Trees, Managing partner and Director of Economic Policy at
• 22:32
  Speaker 2: VATA Partners. Somehow she keeps all that Washington legislation, tariff
• 22:37
  Speaker 2: stuff tweets. Somehow she keeps it all in focus, and
• 22:40
  Speaker 2: she explains it to us because I can't follow it.
• 22:44
  Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
• 22:49
  Speaker 1: and anywhere else you get your podcasts. Listen live each
• 22:52
  Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com,
• 22:56
  Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.
• 23:00
  Speaker 1: You can also watch us live every weekday on YouTube
• 23:03
  Speaker 1: and always on the Bloomberg terminal