April 23, 2025 • 38 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
Confronted with fresh warnings from financial markets, business leaders and top advisers, President Donald Trump this week eased off on two of his frequent punching bags: Jerome Powell and China.
Trump entered office with a steadfast desire to reshape the global economy. But his resolve has appeared to waver in the face of turmoil in equities and bonds and pleas from powerful executives who fear his sweeping tariffs and interference with the Federal Reserve could set off an economic calamity.
Trump on Tuesday said he had no intention to fire Powell — despite days of criticism over the central bank’s policies — and said he believed a deal with Beijing would significantly reduce the sweeping tariffs he’s posted on Chinese goods. After a report that the US would be willing to phase in lighter tariffs on Beijing over five years on Wednesday, Trump told reporters that China was “going to do fine” once talks had settled.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino.
- Atlantic Council Nonresident Senior Fellow Melinda Haring.
- Bloomberg Technology Co-Host Ed Ludlow.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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(00:20):
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Speaker 2 (00:25):
This market again takes a deep breath here, another cleansing breath.
That's the White House changes course on a couple of
pretty significant issues. We're talking tariffs, and we're talking about
the FED share the tariffs. Even at this time yesterday,
people were feeling better. After Scott Bessen suggested the standoff
couldn't last unsustainable, musty escalate? President Trump added to that
(00:47):
quite a bit, suggesting that tariffs could be significantly lower,
specifically on China, as talks continue. And then the matter
of Jay Powell came up. You know, reporters were in
the Oval Office. He was there actually to swear in
the chair of the SEC. You know where the conversation
was going to go. After Donald Trump threatened to fire
the FED share a couple days in a row. Not
(01:10):
sounding so much like that. Now, listen to the President.
Speaker 3 (01:13):
Now, I have no intention of firing him I would
like to see him be a little more active in
terms of his idea to lower interest rate. It's just
a perfect time to lower interest rates. If he doesn't
is at the end to know it's not, but it
would be good timing it, which could have taken place earlier.
(01:33):
But no, I have no intention to fire him.
Speaker 2 (01:37):
Why did you hear something? It was only forty eight
hours earlier? Actually what twenty four hours earlier? Donald Trump
posted on truth Social there could be a slowing of
the economy. He wrote, unless mister too late, a major
loser lower's interest rates. Now he went under right. Powell
has always been too late, except when it came to
(01:58):
the election period, when in order to help Sleepy Joe
Biden later kammally get elected. How did that work out?
Remember he said he could not be terminated soon enough.
And now there's a whole round of reporting about how
Scott Bessett and Howard Lutnik walked this one into the
Oval office and pulled the President back from his desire
to fire the chair of the Fed, the very man
(02:21):
he appointed. And so we're traveling in reverse here when
it comes to the messaging and moving higher on Wall
Street with our panel in place. Bloomberg Politics contributors Rick
Davis and Jeanie Shanzano are with us right now. Genie is,
of course democratic analyst and political science professor at Iona University.
Rick a Republican strategist and partner at stone Court Capital.
(02:43):
So Janie, the headline today is never mind, that's right,
And Joe, I'm trying to be positive on a Wednesday,
So I'm going to.
Speaker 4 (02:51):
Say there's good news here.
Speaker 5 (02:53):
Number one is that for the first time we are
seeing that the Trump administration in at least two point
zero is responding to the market. So that is a
good thing, and it shows, really to your point, how
hungry the market is for some good news, even if
it's just little tidbits like this, you know. On the
(03:14):
negative side, the reality is we are in a situation
where the markets are hoping number one, that Donald Trump
doesn't pursue his policies, and number.
Speaker 4 (03:23):
Two, that he doesn't mean what he says.
Speaker 5 (03:25):
So when he says would be great to get rid
of Jerome Powell, you know all of these things, they're
praying that he doesn't mean it.
Speaker 4 (03:33):
So that's a.
Speaker 5 (03:34):
Situation we're in, and that is not a very good place.
For a country to find itself. But it is a
little bit of bright light from what's been a pretty
tough month.
Speaker 4 (03:42):
Through the markets.
Speaker 2 (03:43):
Yeah. Well, boy, I guess that's for sure, Rick. These
are all market moving comments, whether it's the president or
the Treasury secretary that we're hearing from. Earlier today, Scott
Bessett said, yes, America first, but that does not mean
America alone. Is that the difference of the messaging here
that's soothing the market?
Speaker 6 (04:04):
Yeah?
Speaker 7 (04:04):
I think that what we're seeing is Trump's reaction not
to the markets, but but to his advisors and and
to you know, the corporations that came in on Monday, Walmart,
you know, and and a few others talking about empty shelves,
and because we've seen the markets gyrate wildly in the
(04:26):
one hundred days that he's been president, and he hasn't
really seemingly cared. But I think when they walk into
the Oval office and they say, hey, look we've got
a problem, boss, he sits up and listens. And so
I think that that a lot of this isolationism discussion.
Speaker 2 (04:42):
Has been a little overwrought.
Speaker 7 (04:44):
I think, you know, Secretary Vestan's effort to try and
rationalize it a little bit was probably a good investment
of time today, you know, during the IMF meetings or
bank meetings, because we are active with multilateral instats. We're
negotiating with the European Union. We're not isolating European countries
(05:05):
one by one, which you could have imagined what happened.
You know, Trump has, you know, formulated efforts to try
and be supportive of these lending institutions that Lessons speaking to.
So the reality is and there are all kinds of
engagements around the world around you know, negotiations with Iranians
(05:27):
on nuclear weapons, negotiations with the Russians and the Ukrainians
on stoff in the war. Look, I mean, it isn't
what you would expect out of a Republican president, but
in this case, it is more than you would have
expected from Donald Trump.
Speaker 2 (05:44):
The isolations pretty amazing stuff here, Genie, what's your thought,
do we have Target to thank that or Scott Besstt,
Because Rick is right Walmart Target Home Depot sitting in
the Oval office saying not only are prices going to
go up, but you're going to see empty shells if
you continue. That's that's the imagery that changed Donald Trump's mind.
Speaker 4 (06:05):
Isn't it Well?
Speaker 5 (06:07):
I can't read what changed his mind. He did have
those meetings with those big box CEOs. He is, you know,
seems to be listening a bit to Scott Besson. But
I think the real question here number one, what is
the long term impact of this policy of protectionism he
has been pursuing.
Speaker 4 (06:25):
And number two, and most importantly, what is the world
to think?
Speaker 5 (06:30):
And what are we as Americans to think about a
president and a White House who seemed to be the
gang that can't shoot straight. On the one hand, he
says one thing one day, one thing the next day,
and it raises real questions about competence. So I don't
know if it much matters if he's listening to CEO,
Scott Bessen or the market. He did pull back what
(06:52):
he had said a few hours earlier yesterday, and the
markets responded positively. But this is no way to run
the global economy or the US economy on these kinds
of whims. And you know, for everybody who feels confident
that his attacks on Powell are, you know, a thing
of the past, he seems to flip like the wind
(07:14):
these days.
Speaker 4 (07:14):
So I'm not so sure that next week when the
FED meeting his meeting. He's not going to go back
on the attack. Doesn't mean he's.
Speaker 2 (07:20):
Going to fire it, but we'll be watching truth social
of course. I just wonder when we consider the the
deal making aspect of all of this, what the message
is to China. Let's go back to the Oval Office
last evening and here Donald Trump on tariffs for Beijing.
Speaker 3 (07:37):
Listen, I'm not gonna say, oh, I'm gonna play hardball
with China.
Speaker 8 (07:40):
I'm going to play hardball with you President She. No, No,
We're going to be very nice. They're going to be
very nice, and we'll see what happens. But ultimately they
have to make a deal because otherwise they're not going
to be able to deal in the United States.
Speaker 3 (07:55):
So we want them involved.
Speaker 2 (07:58):
Okay, so we're not going to play hardball, Rick Davis,
what is the message there to President She? We're going
to be very nice. Is that the way to set
up a meeting? Yeah?
Speaker 7 (08:09):
First of all, one hundred and forty five percent tariff
is hardball. I don't know that may be a dictionary
definition of hardball. It is an embargo against Chinese goods
into the United States. One's our largest trading partner. So
whether or not you're calling them names is one thing.
But like when you shut off trade to a country
(08:29):
like China that is solely dependent upon it for their economy,
it's it's playing hardball. So it's confusing because we have
so many inter you know, connecting priorities. You know, everything
from military and issues related to Taiwan in the Indo
(08:51):
Pacific to our trade relationships. It impacts everything like climate.
I mean, China in the US has to find a
way to get along otherwise there's conflict. There's conflict economically
and militarily, and that is bad for the world. If
China gets a cold, we start showing symptoms and vice versa.
(09:12):
So this is good news that Donald Trump is seemingly
open for business when it comes to negotiating a trade
to deal with China that's different than the current one.
The question I have is what's China thinking, because they
got to be sitting there in Beijing going what the
heck is going on here? You know, he's waiting for
(09:32):
our call.
Speaker 6 (09:33):
We don't call.
Speaker 7 (09:35):
She goes around, starts meeting with the Vietnamese and other
friends and allies of the United States, and all of
a sudden Donald Trump's tune changes. So look, I'm glad
it's where it is, and you know, partly concern like
genius about what the future brings, because if we're running
hot first cold second, hot first cold second, I mean
(09:55):
like it's a new definition of good cop, bad cop,
because you're the same person.
Speaker 2 (10:03):
I think there's a word for that. Well, I'll tell
you what. If it takes two years, like Scott Bessen said,
or three to come to an important trade deal with China,
we do know one lawmaker who will not be here
for it. Pretty important news today, Genie the Senator from
Illinois is leaving the building. This is Dick Durbin from
social media a short time ago.
Speaker 9 (10:25):
The decision of whether to run for reelection has not
been easy. I truly love the job of being a
United States Senator, but in my heart, I know it's
time to pass the torch. So I'm announcing today that
I will not be seeking reelection at the end of
my term. The people of Illinois have honored me with
this responsibility longer than anyone elected to the Senate in
our state's history. I'm truly grateful, all right.
Speaker 2 (10:49):
I look, maybe not surprised We've been waiting on this one,
but we're talking about the second ranking Democrat in the
United States, Senate Genie A Lion the Democratic Party. Does
this say more about Dick Durbin's age or the state
of politics in Washington?
Speaker 5 (11:08):
You know, forty four years is a long time for
any of us to be in one job. He's the
fifth Senator over sixty five to retire this term, as
you mentioned, not a surprise. I do think it speaks
to this recognition we've been seeing on the Democratic side,
in the Republican side, but the Democratic side, that you
do need to make sure you bring up the people
(11:31):
who are coming behind you. And there's a lot of
good Democrats in the Illinois contingent, you know, on the
Democratic side who have expressed interest in running if he
was to set aside, including a very popular lieutenant governor.
So I do think it is he knew it was time.
I gotta say, Joe, I love the music behind that video.
(11:55):
But you know, he has served, you know, very admirably,
and I think he sort of paves the way of
saying I'm going to go while I am in a
good position and leaving behind a seat that can be
filled by Democrats.
Speaker 2 (12:08):
They hope, Rick, we've only got about a minute left.
You worked with and around Dick Durbin in the United
States Senate in your time with Senator John McCain. This
stays Democrat, right, This isn't a threat to the seat
count for Democrats in the Senate.
Speaker 7 (12:22):
You know they're going to have to spend money. Some
of their candidates, Rob Emmanuel, others are lining up. They're
gonna have a good candidate comes out of that primary.
But remember Mark Kirk was the last Republican that got
elected to the Senate in Illinois. And so it's not
a miracle. And yet I would say likely a bad
(12:42):
year for Republicans, and so I would think the seat
probably stays the same. But durban was a class act,
is a class act, worked well with John McCain and
other Republicans, was a bipartisan and yet knew how to
throw a punch.
Speaker 2 (13:00):
That's right. We've always enjoyed our conversations with him here
on Balance of Power. I hope we'll have more opportunities.
Speaker 1 (13:07):
You're listening to the Bloomberg Balance of Power podcast ketch
Us Live weekdays at noon and five pm Eastern on
Apple Cocklay 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 played Bloomberg eleven thirty.
Speaker 10 (13:26):
Secretary Beston, telling reporters that the US is not looking
to unilaterally lower tariffs against China, though perhaps if you're
looking for areas of optimism, he did suggest a trade
deal with India is getting closer, at least some kind
of understanding as to what the broad architecture of that
could look like, keeping in mind these deals may take
some time to actually fully finalize, but of course that
(13:47):
has been the effort underway in India this week by
the Vice President of the United States JD. Vance, who
had bilateral talks with the Prime Minister Arrind Remodi and
talked about trade. But we also heard from the Vice
President while he was an Indiana today about a completely
separate issue, and that is ongoing efforts toward ending the
war in Ukraine, a peace agreement being reached between Ukraine
and Russia. This, of course, as there was a meeting
(14:09):
in London today that was supposed to be attended by
the Secretary of State Mark Rubiuo and those at the
highest levels in foreign policy in the governments of France
and Germany, in the UK and Ukraine as well. Rubio
didn't go the Envoy Keith kellag Win instead, and this
was reduced to kind of a technical level meeting. And
this is how the Vice President characterized the state of things.
Speaker 11 (14:29):
We've issued a very explicit proposal to both the Russians
and the Ukrainians, and it's time for them to either
say yes or for the United States to walk away
from this process. We've engaged in an extraordinary amount of
diplomacy of on the ground work. We've really tried to
understand things from the perspective of both the Ukrainians and
the Russians. What do Ukrainians care the most about? What
(14:49):
do the Russians care the most about? The current lines
Somewhere close to them is where you're ultimately, I think,
going to draw all the new lines in the conflict now.
Of course, that means the Ukrainians and the Russians are
both going to have to give up some of the
territory they currently own.
Speaker 2 (15:05):
Another suggestion of walking away, echoing Marco Rubio, who made
that reference on Friday, Knowing that Donald Trump campaigned on
a promise to end this war, as he said he
was the only one who could do it. He would
end this within hours on day one. He's speaking very
differently today on truth social President Trump referring to comments
(15:26):
from Vladimir Zelenski, as he says, boasting on the front
page of the Wall Street Journal that Ukraine will not
legally recognize the occupation of Crimea. It's a long post.
Donald Trump goes on to write, it's inflammatory statements like
Zelensky's that makes it so difficult to settle this war.
He has nothing to boast about. The situation for Ukraine,
he says, is dire. He can have peace, or he
(15:49):
can fight for another three years before losing the whole country.
That's where we start our conversation with Melinda Herring, nonresident
Senior Fellow Atlantic Council and a voice of urience when
it comes to all things Ukraine. Melinda, it's great to
have you back. Is that where this is going? Losing
the whole country?
Speaker 12 (16:07):
Not quite, Joe.
Speaker 13 (16:08):
And there's a few other factual errors in Donald Trump's
statement that he put out. So he says, why didn't
Zelensky and all of Ukraine fight for Crimea when the
Russians illegally annexed it and the Ukrainians. He forgets that
the Ukrainians didn't have any money, that there was no
way to fight back, and I think that's an important
(16:29):
point as well. But no, things are not headed in
a good direction. We know that the White House has
lost patience with negotiations and they found this entire negotiation
exercise much more different, are much more difficult than they expected.
Speaker 10 (16:47):
Well, and certainly President Trump has suggested that Vadimer Zelensky
himself is contributing to that difficulty. The US position seems
to be, Melinda, that Ukraine is going to have to
be willing to give up some territory if they ultimately
want a settlement in this war. Is that the wrong
way of thinking about this? How could they possibly reclaim
all the territory that has been lost to CRIMEA included.
Speaker 12 (17:10):
Piky Lee. I don't think that's actually the stumbling point.
Speaker 13 (17:13):
So we've seen a seven point East plan and that's
what we thought they were going to be arguing about
in London. And the real stumbling points are the US
is asking Ukraine to give up NATO membership. It's also
as it also wants to recognize Crimea as legally Russian,
and this I think it's worth reminding our audience. Back
(17:35):
in twenty eighteen, when Donald Trump was president the first time,
the State Department issued something called the Crimea Declaration, and
it said that we will never ever recognize the use
of force to take to take territory, that this is
illegal under international law. So if you go back to
Donald Trump's first administration, the policy that they're trying to
(17:56):
push now is not very consistent. I mean, look, it's politics.
No one's very consistent, but it's worth pointing out that
they're in a very different position. So I don't think
Zelensky is willing to concede some territory.
Speaker 12 (18:09):
I think he understands he has to.
Speaker 13 (18:10):
But the real issue is there's no security guarantees, and
the US is unwilling to give them security guarantees, and
the British government has said that it must have a
US backstop. So we're sort of stuck. We're very stuck.
But there's a bigger issue that I'm really worried about.
So when Donald Trump and JD. Vance say we're.
Speaker 12 (18:29):
Pulling out, I want to know what that means.
Speaker 13 (18:31):
Does that mean we're not going to participate in the
process or does that mean we're not going to cooperate
with intelligence sharing and we're not going to allow Europe
to buy.
Speaker 12 (18:39):
Weapons for Ukraine.
Speaker 13 (18:41):
If it's the second, Ukraine is in a really hard spot.
If it's we're not going to participate in the negotiations,
I'm a lot less worried.
Speaker 2 (18:50):
Interesting in the end, though, Melinda, you've been talking to
us since before the invasion actually took place. Every wrinkle
we've had a chance to get your analysis to do
you see any world in which there is a peace
deal struck that does not favor Russia.
Speaker 12 (19:07):
So I think it depends on the facts on the ground.
Speaker 13 (19:10):
But Ukraine is not going to agree to anything, Joe,
unless there's some kind of security agreement to ensure that
Russia doesn't come back. So right now, Russia occupies twenty
percent of Ukraine and they're likely going to have to
give up some territory.
Speaker 12 (19:26):
But when I talk to.
Speaker 13 (19:26):
Medics on the front line, Joe, they tell me that
we are totally committed to defending Ukraine even if the
US is not there. So the mood in Ukraine has
not changed. But I don't think the situation is ripe
for negotiations at this point.
Speaker 10 (19:42):
Well, Melinda, I want to return to your point about
kind of characterizing what walking away actually means for the
United States. If it were to be just, we are
removing ourselves as a third party in these negotiations, leaving
it for either other countries to mediate or Ukraine and
Russia to sort this out among themselves. With that actually
make it easier for the Ukrainians or does that make
(20:03):
the whole thing more difficult because Vladimir Putin may not
want to go ahead or essentially take this directly to Zelensky.
Speaker 13 (20:12):
So the negotiating format is a little bit difficult, Kaylee.
Speaker 12 (20:15):
So right now Putin.
Speaker 13 (20:17):
Is saying that he's willing to meet with Zolensky, and
Zelensky has said before I will not meet with him directly,
that there has to be an intermediary. Zelensky is now saying,
I'm willing to consider all formats, but you have to
stop killing civilians.
Speaker 12 (20:29):
And that's one of the difficulties is Russia.
Speaker 13 (20:33):
Has not stopped its missile strikes, so that is a
prerequisite for any kind of negotiation. To your bigger point, though,
if the US were to step back from being the
lead negotiator. I think it's not the end of the world.
I think Britain could take that place. I think the
Turkey would be interested in taking that place. I think
there's some Middle Eastern governments that might be willing to
(20:54):
take that place.
Speaker 12 (20:55):
And Ukraine doesn't see Washington as a neutral actor at
this point.
Speaker 13 (21:00):
They every one of the positions that they've been pushing
in these negotiations is seen from Kiev as is something
that doesn't favor them. So I don't think it's a
terrible thing if Washington walks away from the negotiations.
Speaker 2 (21:15):
There was a time a Linda when peace appeared to
Hinge on the signing of a minerals deal, remembering Scott
Besson's ill fated trip to Kiev. We're still, according to
President Trump, expecting something to happen. Here's what he said
about a minerals deal potentially happening this week.
Speaker 14 (21:31):
We have a minerals deal, which I guess is going
to be signed on Thursday, Scott next Thursday soon, and
I assume they're going to live up to the deal,
so we'll see that we have a deal on that. No,
I have no comment on that.
Speaker 9 (21:46):
I have no idea.
Speaker 14 (21:47):
That's his statement of mind.
Speaker 2 (21:50):
All right, So that was last Thursday, Melinda. Will it still.
Speaker 13 (21:53):
Happen, Joe, I don't know. I've been poking around on this.
The expectation is that it was going to be signed tomorrow.
So that was five days ago where the initial agreement
was signed between the United States and Ukraine, and it's
an eighty page document. The details of that document haven't
been released yet. But what's interesting is that this seven
(22:13):
point negotiating document that the United States gave Ukraine, one
of the points was the mineral deal. So it seems
like the mineral deal is contingent on Ukraine going along
with this bigger plan that President Trump and Vice President
Vance had envisioned. So I think it looks like it's
in trouble, but let's watch and see.
Speaker 10 (22:36):
Well, we certainly will be on watch tomorrow to see
whether or not this deal ultimately assigned or if there's
any progress toward it in the first place. But the
original basis for it, Melinda, was that having an economic
incentive or economic interest in Ukraine would be some kind
of security guarantee. And obviously we've discussed that thoroughly with
you in the absence of a deal being signed in
(22:57):
the US, still not being willing to pony up on
any other kind of security guarantees. What position does that
realistically leave Ukraine? And I'm just trying to consider their
position here as they decide whether or not to sign
on the dotted line.
Speaker 13 (23:11):
Right, So Ukraine is going to put increasing pressure on
European government's London in particular, to make good on the
commitment to put troops on the ground and provide some
kind of security backstop without Washington. I think that's where
we're going next. And I wasn't privy to the discussions today.
I'm sure that was discussed in London, and I think
(23:32):
they'll be increasing pressure on Ukraine's other friends in Asia
and in other parts of the world to deliver military
kits so that Ukraine can stay in the fight and
defend itself.
Speaker 2 (23:42):
Was this always the direction we were going in here, Melinda,
We're just kind of getting to the reality of the
matter now, or did that meeting in the Oval Office
send things off the rails and potentially permanently for President Zelensky.
Speaker 4 (23:57):
Joe.
Speaker 12 (23:57):
It's a great question.
Speaker 13 (23:59):
I've been told that President Trump was actually in a
good mood and wanted progress in the relationship that day,
and we still don't know why it was spiked. I
think it's possible that Donald Trump. Look, never say never
with Donald Trump, right, It's possible he'll wake up tomorrow
and say I'm fed up with Vladimir Putin. He's unwilling
(24:21):
to move I don't see it happening though. At this point.
I think that Donald Trump wanted an easy deal. This
is not going to be an easy deal, and I
think he's going to move on. Unfortunately for forty million Ukrainians.
Speaker 2 (24:34):
Wow.
Speaker 10 (24:35):
Wow, So Steve Witkoff as he gets ready to head
to Moscow and Vladimir Putin has no real hope of
success in your mind, Melinda.
Speaker 13 (24:43):
Look, you can't force the Ukrainians to sign a deal
that they won't bring them lasting security. So I don't
see how this deal goes forward. This is Witkoff's fourth trip,
and you know, I think they're going to discuss the peculiarities.
Speaker 12 (24:58):
Of this agreement.
Speaker 13 (24:59):
But Zelensky's already come out and said that accepting this
agreement would violate the constitution of Ukraine and no president
could do it.
Speaker 2 (25:09):
M Well, Melinda, I'm not sure what happens from here.
What signs should we be watching for. Is it a
meeting that includes Marco Rubio and Witkoff that would get
your attention? What are you going to see that you
might take seriously.
Speaker 13 (25:24):
I'm going to be watching the battlefield that my eyes
ensumi in northern Ukraine. I want to I want to
see what the Russians are doing there, and I'm going
to continue to watch and see. There's some interesting reports
that North Korea is also sending workers to Russia, Joe,
which indicates that Russia doesn't have enough people to be
fueling it's.
Speaker 12 (25:44):
It's it's economy.
Speaker 13 (25:46):
So uh, I'm not I don't think much is going
to happen on the high level negotiations, but the real
issue is the security guarantees and also the production of
weapons in Europe.
Speaker 12 (25:57):
So watch that space, all right.
Speaker 10 (26:00):
We will be and we trust you will be as well,
and continue to come back and share your insights with us.
Melinda Herring, Senior Fellow at the Atlanta Council's Eurasia Center.
Joining us here on Bloomberg TV and radio.
Speaker 1 (26:12):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Apple Cocklay and Android Auto with the Bloomberg Business app.
You can also listen live on Amazon Alexa from our
flagship New York station, Just say Alexa, play Bloomberg eleven.
Speaker 2 (26:29):
Thirty watching stocks rise today, including Tesla. Charlie's been checking
Tesla for a couple of reasons here, and it brings
us back to the late edition of Balance of Power
right after the bell yesterday. Worst quarter in years was
the headline, look at the stock up six percent, fourteen
dollars back above two hundred and fifty because it looks
(26:50):
like they're going to get Elon back. Yeah, that's the
story that we're following here in Washington. Of course, we've
talked so much about his work at the DOGE with
another headline, must to refocus on Tesla after its worst
quarter in years. And you know, we've been looking at
the end of May here if you listen to this program, remembering,
of course, that that's the deal one hundred and thirty
day limit. I guess unless they re up this deal
(27:13):
his role as a special government employee, that would kind
of round things out by the end of May. My
only real question is does he get to keep the chainsaw.
Elon Musk did speak to investors on the quarterly conference
call following the results last evening.
Speaker 15 (27:28):
Listen, starting probably an ex month may my time allocation
to dogs will drop significantly. I'll have to continue doing
it for I think fight the remainder of the president's term.
Just make sure that the waste and fraud that we
stop does not come roaring back.
Speaker 2 (27:47):
He called his work at the Doge quote mostly done, unquote,
raising a whole new load of questions here inside the
beltwagh about what exactly the Doge has a complied Elon
Musk promising in the outset to cut two trillion dollars
in spending, waste, fraud, and abuse, and it might not
(28:09):
come anywhere near that number, although we're going to be
talking a lot more about recisions when lawmakers get back
to town, and you can park that here for a moment.
It's not very often I get to spend time with
Ed Ludlow. It's usually a big deal involving a rocket launch.
So that should tell you how important this story is. Today.
He's with us from our bureau in San Francisco. Of course,
the cohost of Bloomberg Technology or Elon whisperer at the moment,
(28:32):
and it's great to see you and I appreciate this.
This is really what investors we're looking for. Does Elon
Musk mean it is he going to be showing up
at the Tesla plant? What's his new life going to
be like the one he used to lead?
Speaker 16 (28:46):
I mean that's a pretty good summary. It was the
only metric that mattered.
Speaker 9 (28:51):
You know.
Speaker 16 (28:51):
We asked going into the earnings print, how do you
gauge someone's commitment to something? And he opened the cool
saying exactly that as of next month May, he will
drop the amount of time that he spends with Doge
and boost the allocation of.
Speaker 6 (29:06):
Time for Tesla.
Speaker 16 (29:07):
But you make a really good point, which is, depending
on who you asked, this was or wasn't a surprise, right.
We've known for quite a long time that a special
government employee has a one hundred and thirty day limit
on their contributions, even if they're unpaid, and we've all
been looking at the calendar and thinking what happens at
the end of May. But it's just sort of the
public coming out and saying, don't worry, I'm coming back
(29:30):
to Tesla and I'm focused on the big picture.
Speaker 2 (29:33):
Stuff, fascinating what happened to the company in this quarter?
Ed and how much did politics have to do with it?
Speaker 6 (29:40):
Yeah, there's a lot of politics to discuss.
Speaker 16 (29:43):
I mean, there were contradictions between the statements that Elon
Musk made on the earnings call and the statements made
by his CFO. The CFO quite clearly addressed the issue
that in the first quarter there is what he referred
to as brand damage and vandalism that impact first quarter sales.
Elon Musk opened his remarks just before he kind of
(30:05):
announced he would step back from doage, saying he recognized
a backlash. So, and what's interesting is that there's more
than just about the United States here. You know, there's
a lot of evidence that we have protests in the
United States. Elon Musk made unsubstantiated claims that they were
sort of a targeted and paid for campaign against him,
and that has impacted Tesla's sales. But the politics extends
(30:26):
to China right where Tesla is under pressure from domestic
players in China. And if you're a Chinese national, would
you buy a Tesla or champion your own domestic brand?
Speaker 6 (30:36):
Right now?
Speaker 16 (30:36):
Knowing that Elon Musk is an associate of President Trump
in this in this trade scenario, you.
Speaker 2 (30:43):
Know, you see poles ed. You've been in business news
long enough, you see poles. What brand association people have,
whether they're from the left or the right. They've got
their own beer, They've got their own car. In this case,
they've really got their own car. But to watch that
transition from being a darling on the left right with
making the the most successful ev ever made in this country,
(31:04):
to the complete political opposite makes you wonder how much
permanent damage is done here.
Speaker 6 (31:10):
Yeah, and it's hard to quantify, I mean within the data.
Speaker 16 (31:13):
There is also a debate about whether the softness in
the first quarter reflected Americans who were existing Tesla owners
and have become disgruntled or disenfranchised with Elon Musk, or
whether Elon Musk's profile and relationship with government was holding
off first time buyers of a Tesla product. We just
don't know, but it's an excellent question. I think what
(31:34):
was also so interesting is just the tariff's debate. You know,
Elon Musk is closely aligned with the President, as you know,
but he did say I don't believe in high levels
of tariffs I believe in low tariffs, and I advocated
that position to the president, but it's not up to me.
It's up to the president. And in the context of
an earning school, that's not unprecedented, but a little bit surprising, right, It's.
Speaker 6 (31:55):
Something that doesn't happen in the daily course of my job. Yeah.
Speaker 2 (31:58):
No, that was fascinting and I wonder ed if that
was the breaking point. I'm not sure we'll ever know,
but was it the political tug to have to get
back to and of course the investor tug to get
back to the company to get the stock moving again,
to have a better story to tell at Tesla, Or
was it, Hey, you know what, I don't believe in
tariff So I think maybe our work here is done.
Speaker 6 (32:20):
In any company.
Speaker 16 (32:21):
It's not just the CEO, right, And in any company
earnings the literal statement, the report and the call, the
IR team is involved, the legal team is involved, in
the CFO is involved, and it's said very clearly in
the earnings deck that the company recognizes a changing political
landscape without defining geographically where it recognized it, and an
(32:42):
evolving trade policy and they're all impacted by that. And
it was a big moment where you know, we know
about the disagreements within the cabinet, Musk and Peter Navarro
not necessarily getting on. But this was a company in
regulatory filings recognizing what's happening around the world right now.
And while Tesla is more insulated than other American companies
(33:04):
because it has a very onshore vertically integrated supply chain,
it basically said this isn't good for us, and our
opinion on it is this, and that was an important moment.
It was an indirect message to this administration. I think
that's a fair interpretation.
Speaker 2 (33:19):
Tell me about the man ed before I ask you
about some other stuff that I wanted to talk to
you about. Much has been said about Elon Musk's lifestyle,
and there have been a lot of questions about the
stress levels he's been under. He talked about how difficult
it's been trying to do all of this. There have
been questions about his sobriety. There have been questions about,
my gosh, this piece about all the kids and the
mothers that he's dealing with, is he well.
Speaker 16 (33:43):
Elon Musk has the lifestyle of someone that is atypical
for the everyday person. He is on and off the
world's richest person you know as an understatement. Look, I
know a lot of people that have worked for and
with Elon Musk across all of his companies for a
really long time. He is a micro manager. He likes
to make decison, he likes to be told tell me
why I am wrong. He spends a lot of time
(34:03):
on private jets working off of his cell phone. But
the story has been has he been too focused on
DOJE and been operating in Mari Lago and DC too
much relative to Tesla's facilities. But he's also credited with
some of the biggest technological breakthroughs that humankind's seen in
the domain of energy, EV's rocket Tree. And I think
(34:26):
that this whole debate was about that he's good at
that stuff, so if he focused more on it, then
there might be progress in those fields. And it's also
important to reflect that lots of times Elon Musk makes
bold predictions and timelines that he gets the timing wrong,
but he does often get there in the end with
a product or whatever that right.
Speaker 2 (34:45):
Fascinating story. As we got our hooks into Ed Ludlow,
I need to ask you about Intel. It's an important
headline plans this week to cut over twenty percent of
its staff. I'm sitting in Washington, you're in San Francisco.
So the question I'm supposed to ask you is, did
Joe Biden? Did the Biden administration pick the wrong company?
Speaker 16 (35:05):
Yeah, you'd think that the Intel would be the national champion, right.
It is both a designer of semiconductor products and a
manufacturer of them, a domestic manufacturer, and Intel's been very
frustrated with the CHIPSAC because the money has not really
been forthcoming. The intended impact of it's not yet happened.
What we're reporting is that they're cutting twenty percent. But
(35:25):
it's not just about bloat. It's about kind of getting
focused on technology. There are lots of middle managers at
Intel that are involved in making decisions that mean good
decisions don't happen, and Intel is trying to find a
way to kind of get back to their heritage, which
is being the leader in the field of semiconductor manufacturing
at the cutting edge of technology. What they want to
(35:46):
do is very much in line with the Trump administration
wants to do with onshoring manufacturing, and so I'm so
curious to hear when they report numbers, has anyone from
the administration phoned them or have they phone the administration?
Speaker 6 (35:57):
That would be a big piece of news.
Speaker 2 (36:00):
Absolutely fascinating. And more broadly, when you consider the semiconductor space, ed,
how would you describe this industry right now? Obviously we're
in flux. We're dealing with export controls that we've seen
an enormous amount of damage here to in Vidia shares,
for instance, over the past couple of weeks, despite a
great meeting between Jensen Wong and Donald Trump. But we're
(36:23):
drawing a line around Taiwan here and trying to figure
out how quickly they can pull this off.
Speaker 16 (36:27):
It's the one hundred billion dollar question, and we don't
have enough time for me to answer it in full.
But basically, there are American chip companies that all design
chips that are right now in vogue. We are talking
about GPUs or accelerators that go into data centers to
train AI models. Intel's fallen behind in that space. In
video largely has a monopoly. The key point about a
(36:48):
company like in Video is it's what's called a fabulous
chip company. It designs the chips, someone else makes them.
As you just said, TSMC. The supply chain therefore has
the critical part the manufacturing of the chip in Taiwan
that is not China, but of course, in the context
of renegotiating the world order for trade, it's an important factor.
(37:08):
China is also a critically important end market for all
of these names, be they smartphone chip makers, be they
in the data center business. And what they want to
find out is, if I make a chip somewhere in
the world outside of the United States, is there a
business for me in China? And we don't have an
answer to that yet. I saw the headlines from Vestent today.
It doesn't answer the question of what happens next in
(37:30):
that sector specifically, It.
Speaker 2 (37:33):
Sure doesn't, So we got to keep talking about it.
Ed Ludlow a journalist and a broadcaster peaking right now.
Ed come on more often and talk to us. He
co host Bloomberg Technology. He does have a full time job,
but we'll try to pull him into this conversation as
often as we can. Really interesting stuff. This is again
the intersection once again of Wall Street, Washington, and in
(37:54):
the case of Ed Ludlow, San Francisco, the technology sector.
You can't pull one leg out of the stool Ed.
Thank you, thanks for listening to the Balance of Power podcast.
Make sure to subscribe if you haven't already, at Apple, Spotify,
or wherever you get your podcasts, and you can find
(38:14):
us live every weekday from Washington, DC at noontime Eastern
at Bloomberg dot com.
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Balance of Power podcast. Catch us live weekdays at
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Auto with the Bloomberg Business App. Listen on demand wherever
(00:20):
you get your podcasts, or watch us live on YouTube.
Speaker 2 (00:25):
This market again takes a deep breath here, another cleansing breath.
That's the White House changes course on a couple of
pretty significant issues. We're talking tariffs, and we're talking about
the FED share the tariffs. Even at this time yesterday,
people were feeling better. After Scott Bessen suggested the standoff
couldn't last unsustainable, musty escalate? President Trump added to that
(00:47):
quite a bit, suggesting that tariffs could be significantly lower,
specifically on China, as talks continue. And then the matter
of Jay Powell came up. You know, reporters were in
the Oval Office. He was there actually to swear in
the chair of the SEC. You know where the conversation
was going to go. After Donald Trump threatened to fire
the FED share a couple days in a row. Not
(01:10):
sounding so much like that. Now, listen to the President.
Speaker 3 (01:13):
Now, I have no intention of firing him I would
like to see him be a little more active in
terms of his idea to lower interest rate. It's just
a perfect time to lower interest rates. If he doesn't
is at the end to know it's not, but it
would be good timing it, which could have taken place earlier.
(01:33):
But no, I have no intention to fire him.
Speaker 2 (01:37):
Why did you hear something? It was only forty eight
hours earlier? Actually what twenty four hours earlier? Donald Trump
posted on truth Social there could be a slowing of
the economy. He wrote, unless mister too late, a major
loser lower's interest rates. Now he went under right. Powell
has always been too late, except when it came to
(01:58):
the election period, when in order to help Sleepy Joe
Biden later kammally get elected. How did that work out?
Remember he said he could not be terminated soon enough.
And now there's a whole round of reporting about how
Scott Bessett and Howard Lutnik walked this one into the
Oval office and pulled the President back from his desire
to fire the chair of the Fed, the very man
(02:21):
he appointed. And so we're traveling in reverse here when
it comes to the messaging and moving higher on Wall
Street with our panel in place. Bloomberg Politics contributors Rick
Davis and Jeanie Shanzano are with us right now. Genie is,
of course democratic analyst and political science professor at Iona University.
Rick a Republican strategist and partner at stone Court Capital.
(02:43):
So Janie, the headline today is never mind, that's right,
And Joe, I'm trying to be positive on a Wednesday,
So I'm going to.
Speaker 4 (02:51):
Say there's good news here.
Speaker 5 (02:53):
Number one is that for the first time we are
seeing that the Trump administration in at least two point
zero is responding to the market. So that is a
good thing, and it shows, really to your point, how
hungry the market is for some good news, even if
it's just little tidbits like this, you know. On the
(03:14):
negative side, the reality is we are in a situation
where the markets are hoping number one, that Donald Trump
doesn't pursue his policies, and number.
Speaker 4 (03:23):
Two, that he doesn't mean what he says.
Speaker 5 (03:25):
So when he says would be great to get rid
of Jerome Powell, you know all of these things, they're
praying that he doesn't mean it.
Speaker 4 (03:33):
So that's a.
Speaker 5 (03:34):
Situation we're in, and that is not a very good place.
For a country to find itself. But it is a
little bit of bright light from what's been a pretty
tough month.
Speaker 4 (03:42):
Through the markets.
Speaker 2 (03:43):
Yeah. Well, boy, I guess that's for sure, Rick. These
are all market moving comments, whether it's the president or
the Treasury secretary that we're hearing from. Earlier today, Scott
Bessett said, yes, America first, but that does not mean
America alone. Is that the difference of the messaging here
that's soothing the market?
Speaker 6 (04:04):
Yeah?
Speaker 7 (04:04):
I think that what we're seeing is Trump's reaction not
to the markets, but but to his advisors and and
to you know, the corporations that came in on Monday, Walmart,
you know, and and a few others talking about empty shelves,
and because we've seen the markets gyrate wildly in the
(04:26):
one hundred days that he's been president, and he hasn't
really seemingly cared. But I think when they walk into
the Oval office and they say, hey, look we've got
a problem, boss, he sits up and listens. And so
I think that that a lot of this isolationism discussion.
Speaker 2 (04:42):
Has been a little overwrought.
Speaker 7 (04:44):
I think, you know, Secretary Vestan's effort to try and
rationalize it a little bit was probably a good investment
of time today, you know, during the IMF meetings or
bank meetings, because we are active with multilateral instats. We're
negotiating with the European Union. We're not isolating European countries
(05:05):
one by one, which you could have imagined what happened.
You know, Trump has, you know, formulated efforts to try
and be supportive of these lending institutions that Lessons speaking to.
So the reality is and there are all kinds of
engagements around the world around you know, negotiations with Iranians
(05:27):
on nuclear weapons, negotiations with the Russians and the Ukrainians
on stoff in the war. Look, I mean, it isn't
what you would expect out of a Republican president, but
in this case, it is more than you would have
expected from Donald Trump.
Speaker 2 (05:44):
The isolations pretty amazing stuff here, Genie, what's your thought,
do we have Target to thank that or Scott Besstt,
Because Rick is right Walmart Target Home Depot sitting in
the Oval office saying not only are prices going to
go up, but you're going to see empty shells if
you continue. That's that's the imagery that changed Donald Trump's mind.
Speaker 4 (06:05):
Isn't it Well?
Speaker 5 (06:07):
I can't read what changed his mind. He did have
those meetings with those big box CEOs. He is, you know,
seems to be listening a bit to Scott Besson. But
I think the real question here number one, what is
the long term impact of this policy of protectionism he
has been pursuing.
Speaker 4 (06:25):
And number two, and most importantly, what is the world
to think?
Speaker 5 (06:30):
And what are we as Americans to think about a
president and a White House who seemed to be the
gang that can't shoot straight. On the one hand, he
says one thing one day, one thing the next day,
and it raises real questions about competence. So I don't
know if it much matters if he's listening to CEO,
Scott Bessen or the market. He did pull back what
(06:52):
he had said a few hours earlier yesterday, and the
markets responded positively. But this is no way to run
the global economy or the US economy on these kinds
of whims. And you know, for everybody who feels confident
that his attacks on Powell are, you know, a thing
of the past, he seems to flip like the wind
(07:14):
these days.
Speaker 4 (07:14):
So I'm not so sure that next week when the
FED meeting his meeting. He's not going to go back
on the attack. Doesn't mean he's.
Speaker 2 (07:20):
Going to fire it, but we'll be watching truth social
of course. I just wonder when we consider the the
deal making aspect of all of this, what the message
is to China. Let's go back to the Oval Office
last evening and here Donald Trump on tariffs for Beijing.
Speaker 3 (07:37):
Listen, I'm not gonna say, oh, I'm gonna play hardball
with China.
Speaker 8 (07:40):
I'm going to play hardball with you President She. No, No,
We're going to be very nice. They're going to be
very nice, and we'll see what happens. But ultimately they
have to make a deal because otherwise they're not going
to be able to deal in the United States.
Speaker 3 (07:55):
So we want them involved.
Speaker 2 (07:58):
Okay, so we're not going to play hardball, Rick Davis,
what is the message there to President She? We're going
to be very nice. Is that the way to set
up a meeting? Yeah?
Speaker 7 (08:09):
First of all, one hundred and forty five percent tariff
is hardball. I don't know that may be a dictionary
definition of hardball. It is an embargo against Chinese goods
into the United States. One's our largest trading partner. So
whether or not you're calling them names is one thing.
But like when you shut off trade to a country
(08:29):
like China that is solely dependent upon it for their economy,
it's it's playing hardball. So it's confusing because we have
so many inter you know, connecting priorities. You know, everything
from military and issues related to Taiwan in the Indo
(08:51):
Pacific to our trade relationships. It impacts everything like climate.
I mean, China in the US has to find a
way to get along otherwise there's conflict. There's conflict economically
and militarily, and that is bad for the world. If
China gets a cold, we start showing symptoms and vice versa.
(09:12):
So this is good news that Donald Trump is seemingly
open for business when it comes to negotiating a trade
to deal with China that's different than the current one.
The question I have is what's China thinking, because they
got to be sitting there in Beijing going what the
heck is going on here? You know, he's waiting for
(09:32):
our call.
Speaker 6 (09:33):
We don't call.
Speaker 7 (09:35):
She goes around, starts meeting with the Vietnamese and other
friends and allies of the United States, and all of
a sudden Donald Trump's tune changes. So look, I'm glad
it's where it is, and you know, partly concern like
genius about what the future brings, because if we're running
hot first cold second, hot first cold second, I mean
(09:55):
like it's a new definition of good cop, bad cop,
because you're the same person.
Speaker 2 (10:03):
I think there's a word for that. Well, I'll tell
you what. If it takes two years, like Scott Bessen said,
or three to come to an important trade deal with China,
we do know one lawmaker who will not be here
for it. Pretty important news today, Genie the Senator from
Illinois is leaving the building. This is Dick Durbin from
social media a short time ago.
Speaker 9 (10:25):
The decision of whether to run for reelection has not
been easy. I truly love the job of being a
United States Senator, but in my heart, I know it's
time to pass the torch. So I'm announcing today that
I will not be seeking reelection at the end of
my term. The people of Illinois have honored me with
this responsibility longer than anyone elected to the Senate in
our state's history. I'm truly grateful, all right.
Speaker 2 (10:49):
I look, maybe not surprised We've been waiting on this one,
but we're talking about the second ranking Democrat in the
United States, Senate Genie A Lion the Democratic Party. Does
this say more about Dick Durbin's age or the state
of politics in Washington?
Speaker 5 (11:08):
You know, forty four years is a long time for
any of us to be in one job. He's the
fifth Senator over sixty five to retire this term, as
you mentioned, not a surprise. I do think it speaks
to this recognition we've been seeing on the Democratic side,
in the Republican side, but the Democratic side, that you
do need to make sure you bring up the people
(11:31):
who are coming behind you. And there's a lot of
good Democrats in the Illinois contingent, you know, on the
Democratic side who have expressed interest in running if he
was to set aside, including a very popular lieutenant governor.
So I do think it is he knew it was time.
I gotta say, Joe, I love the music behind that video.
(11:55):
But you know, he has served, you know, very admirably,
and I think he sort of paves the way of
saying I'm going to go while I am in a
good position and leaving behind a seat that can be
filled by Democrats.
Speaker 2 (12:08):
They hope, Rick, we've only got about a minute left.
You worked with and around Dick Durbin in the United
States Senate in your time with Senator John McCain. This
stays Democrat, right, This isn't a threat to the seat
count for Democrats in the Senate.
Speaker 7 (12:22):
You know they're going to have to spend money. Some
of their candidates, Rob Emmanuel, others are lining up. They're
gonna have a good candidate comes out of that primary.
But remember Mark Kirk was the last Republican that got
elected to the Senate in Illinois. And so it's not
a miracle. And yet I would say likely a bad
(12:42):
year for Republicans, and so I would think the seat
probably stays the same. But durban was a class act,
is a class act, worked well with John McCain and
other Republicans, was a bipartisan and yet knew how to
throw a punch.
Speaker 2 (13:00):
That's right. We've always enjoyed our conversations with him here
on Balance of Power. I hope we'll have more opportunities.
Speaker 1 (13:07):
You're listening to the Bloomberg Balance of Power podcast ketch
Us Live weekdays at noon and five pm Eastern on
Apple Cocklay 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 played Bloomberg eleven thirty.
Speaker 10 (13:26):
Secretary Beston, telling reporters that the US is not looking
to unilaterally lower tariffs against China, though perhaps if you're
looking for areas of optimism, he did suggest a trade
deal with India is getting closer, at least some kind
of understanding as to what the broad architecture of that
could look like, keeping in mind these deals may take
some time to actually fully finalize, but of course that
(13:47):
has been the effort underway in India this week by
the Vice President of the United States JD. Vance, who
had bilateral talks with the Prime Minister Arrind Remodi and
talked about trade. But we also heard from the Vice
President while he was an Indiana today about a completely
separate issue, and that is ongoing efforts toward ending the
war in Ukraine, a peace agreement being reached between Ukraine
and Russia. This, of course, as there was a meeting
(14:09):
in London today that was supposed to be attended by
the Secretary of State Mark Rubiuo and those at the
highest levels in foreign policy in the governments of France
and Germany, in the UK and Ukraine as well. Rubio
didn't go the Envoy Keith kellag Win instead, and this
was reduced to kind of a technical level meeting. And
this is how the Vice President characterized the state of things.
Speaker 11 (14:29):
We've issued a very explicit proposal to both the Russians
and the Ukrainians, and it's time for them to either
say yes or for the United States to walk away
from this process. We've engaged in an extraordinary amount of
diplomacy of on the ground work. We've really tried to
understand things from the perspective of both the Ukrainians and
the Russians. What do Ukrainians care the most about? What
(14:49):
do the Russians care the most about? The current lines
Somewhere close to them is where you're ultimately, I think,
going to draw all the new lines in the conflict now.
Of course, that means the Ukrainians and the Russians are
both going to have to give up some of the
territory they currently own.
Speaker 2 (15:05):
Another suggestion of walking away, echoing Marco Rubio, who made
that reference on Friday, Knowing that Donald Trump campaigned on
a promise to end this war, as he said he
was the only one who could do it. He would
end this within hours on day one. He's speaking very
differently today on truth social President Trump referring to comments
(15:26):
from Vladimir Zelenski, as he says, boasting on the front
page of the Wall Street Journal that Ukraine will not
legally recognize the occupation of Crimea. It's a long post.
Donald Trump goes on to write, it's inflammatory statements like
Zelensky's that makes it so difficult to settle this war.
He has nothing to boast about. The situation for Ukraine,
he says, is dire. He can have peace, or he
(15:49):
can fight for another three years before losing the whole country.
That's where we start our conversation with Melinda Herring, nonresident
Senior Fellow Atlantic Council and a voice of urience when
it comes to all things Ukraine. Melinda, it's great to
have you back. Is that where this is going? Losing
the whole country?
Speaker 12 (16:07):
Not quite, Joe.
Speaker 13 (16:08):
And there's a few other factual errors in Donald Trump's
statement that he put out. So he says, why didn't
Zelensky and all of Ukraine fight for Crimea when the
Russians illegally annexed it and the Ukrainians. He forgets that
the Ukrainians didn't have any money, that there was no
way to fight back, and I think that's an important
(16:29):
point as well. But no, things are not headed in
a good direction. We know that the White House has
lost patience with negotiations and they found this entire negotiation
exercise much more different, are much more difficult than they expected.
Speaker 10 (16:47):
Well, and certainly President Trump has suggested that Vadimer Zelensky
himself is contributing to that difficulty. The US position seems
to be, Melinda, that Ukraine is going to have to
be willing to give up some territory if they ultimately
want a settlement in this war. Is that the wrong
way of thinking about this? How could they possibly reclaim
all the territory that has been lost to CRIMEA included.
Speaker 12 (17:10):
Piky Lee. I don't think that's actually the stumbling point.
Speaker 13 (17:13):
So we've seen a seven point East plan and that's
what we thought they were going to be arguing about
in London. And the real stumbling points are the US
is asking Ukraine to give up NATO membership. It's also
as it also wants to recognize Crimea as legally Russian,
and this I think it's worth reminding our audience. Back
(17:35):
in twenty eighteen, when Donald Trump was president the first time,
the State Department issued something called the Crimea Declaration, and
it said that we will never ever recognize the use
of force to take to take territory, that this is
illegal under international law. So if you go back to
Donald Trump's first administration, the policy that they're trying to
(17:56):
push now is not very consistent. I mean, look, it's politics.
No one's very consistent, but it's worth pointing out that
they're in a very different position. So I don't think
Zelensky is willing to concede some territory.
Speaker 12 (18:09):
I think he understands he has to.
Speaker 13 (18:10):
But the real issue is there's no security guarantees, and
the US is unwilling to give them security guarantees, and
the British government has said that it must have a
US backstop. So we're sort of stuck. We're very stuck.
But there's a bigger issue that I'm really worried about.
So when Donald Trump and JD. Vance say we're.
Speaker 12 (18:29):
Pulling out, I want to know what that means.
Speaker 13 (18:31):
Does that mean we're not going to participate in the
process or does that mean we're not going to cooperate
with intelligence sharing and we're not going to allow Europe
to buy.
Speaker 12 (18:39):
Weapons for Ukraine.
Speaker 13 (18:41):
If it's the second, Ukraine is in a really hard spot.
If it's we're not going to participate in the negotiations,
I'm a lot less worried.
Speaker 2 (18:50):
Interesting in the end, though, Melinda, you've been talking to
us since before the invasion actually took place. Every wrinkle
we've had a chance to get your analysis to do
you see any world in which there is a peace
deal struck that does not favor Russia.
Speaker 12 (19:07):
So I think it depends on the facts on the ground.
Speaker 13 (19:10):
But Ukraine is not going to agree to anything, Joe,
unless there's some kind of security agreement to ensure that
Russia doesn't come back. So right now, Russia occupies twenty
percent of Ukraine and they're likely going to have to
give up some territory.
Speaker 12 (19:26):
But when I talk to.
Speaker 13 (19:26):
Medics on the front line, Joe, they tell me that
we are totally committed to defending Ukraine even if the
US is not there. So the mood in Ukraine has
not changed. But I don't think the situation is ripe
for negotiations at this point.
Speaker 10 (19:42):
Well, Melinda, I want to return to your point about
kind of characterizing what walking away actually means for the
United States. If it were to be just, we are
removing ourselves as a third party in these negotiations, leaving
it for either other countries to mediate or Ukraine and
Russia to sort this out among themselves. With that actually
make it easier for the Ukrainians or does that make
(20:03):
the whole thing more difficult because Vladimir Putin may not
want to go ahead or essentially take this directly to Zelensky.
Speaker 13 (20:12):
So the negotiating format is a little bit difficult, Kaylee.
Speaker 12 (20:15):
So right now Putin.
Speaker 13 (20:17):
Is saying that he's willing to meet with Zolensky, and
Zelensky has said before I will not meet with him directly,
that there has to be an intermediary. Zelensky is now saying,
I'm willing to consider all formats, but you have to
stop killing civilians.
Speaker 12 (20:29):
And that's one of the difficulties is Russia.
Speaker 13 (20:33):
Has not stopped its missile strikes, so that is a
prerequisite for any kind of negotiation. To your bigger point, though,
if the US were to step back from being the
lead negotiator. I think it's not the end of the world.
I think Britain could take that place. I think the
Turkey would be interested in taking that place. I think
there's some Middle Eastern governments that might be willing to
(20:54):
take that place.
Speaker 12 (20:55):
And Ukraine doesn't see Washington as a neutral actor at
this point.
Speaker 13 (21:00):
They every one of the positions that they've been pushing
in these negotiations is seen from Kiev as is something
that doesn't favor them. So I don't think it's a
terrible thing if Washington walks away from the negotiations.
Speaker 2 (21:15):
There was a time a Linda when peace appeared to
Hinge on the signing of a minerals deal, remembering Scott
Besson's ill fated trip to Kiev. We're still, according to
President Trump, expecting something to happen. Here's what he said
about a minerals deal potentially happening this week.
Speaker 14 (21:31):
We have a minerals deal, which I guess is going
to be signed on Thursday, Scott next Thursday soon, and
I assume they're going to live up to the deal,
so we'll see that we have a deal on that. No,
I have no comment on that.
Speaker 9 (21:46):
I have no idea.
Speaker 14 (21:47):
That's his statement of mind.
Speaker 2 (21:50):
All right, So that was last Thursday, Melinda. Will it still.
Speaker 13 (21:53):
Happen, Joe, I don't know. I've been poking around on this.
The expectation is that it was going to be signed tomorrow.
So that was five days ago where the initial agreement
was signed between the United States and Ukraine, and it's
an eighty page document. The details of that document haven't
been released yet. But what's interesting is that this seven
(22:13):
point negotiating document that the United States gave Ukraine, one
of the points was the mineral deal. So it seems
like the mineral deal is contingent on Ukraine going along
with this bigger plan that President Trump and Vice President
Vance had envisioned. So I think it looks like it's
in trouble, but let's watch and see.
Speaker 10 (22:36):
Well, we certainly will be on watch tomorrow to see
whether or not this deal ultimately assigned or if there's
any progress toward it in the first place. But the
original basis for it, Melinda, was that having an economic
incentive or economic interest in Ukraine would be some kind
of security guarantee. And obviously we've discussed that thoroughly with
you in the absence of a deal being signed in
(22:57):
the US, still not being willing to pony up on
any other kind of security guarantees. What position does that
realistically leave Ukraine? And I'm just trying to consider their
position here as they decide whether or not to sign
on the dotted line.
Speaker 13 (23:11):
Right, So Ukraine is going to put increasing pressure on
European government's London in particular, to make good on the
commitment to put troops on the ground and provide some
kind of security backstop without Washington. I think that's where
we're going next. And I wasn't privy to the discussions today.
I'm sure that was discussed in London, and I think
(23:32):
they'll be increasing pressure on Ukraine's other friends in Asia
and in other parts of the world to deliver military
kits so that Ukraine can stay in the fight and
defend itself.
Speaker 2 (23:42):
Was this always the direction we were going in here, Melinda,
We're just kind of getting to the reality of the
matter now, or did that meeting in the Oval Office
send things off the rails and potentially permanently for President Zelensky.
Speaker 4 (23:57):
Joe.
Speaker 12 (23:57):
It's a great question.
Speaker 13 (23:59):
I've been told that President Trump was actually in a
good mood and wanted progress in the relationship that day,
and we still don't know why it was spiked. I
think it's possible that Donald Trump. Look, never say never
with Donald Trump, right, It's possible he'll wake up tomorrow
and say I'm fed up with Vladimir Putin. He's unwilling
(24:21):
to move I don't see it happening though. At this point.
I think that Donald Trump wanted an easy deal. This
is not going to be an easy deal, and I
think he's going to move on. Unfortunately for forty million Ukrainians.
Speaker 2 (24:34):
Wow.
Speaker 10 (24:35):
Wow, So Steve Witkoff as he gets ready to head
to Moscow and Vladimir Putin has no real hope of
success in your mind, Melinda.
Speaker 13 (24:43):
Look, you can't force the Ukrainians to sign a deal
that they won't bring them lasting security. So I don't
see how this deal goes forward. This is Witkoff's fourth trip,
and you know, I think they're going to discuss the peculiarities.
Speaker 12 (24:58):
Of this agreement.
Speaker 13 (24:59):
But Zelensky's already come out and said that accepting this
agreement would violate the constitution of Ukraine and no president
could do it.
Speaker 2 (25:09):
M Well, Melinda, I'm not sure what happens from here.
What signs should we be watching for. Is it a
meeting that includes Marco Rubio and Witkoff that would get
your attention? What are you going to see that you
might take seriously.
Speaker 13 (25:24):
I'm going to be watching the battlefield that my eyes
ensumi in northern Ukraine. I want to I want to
see what the Russians are doing there, and I'm going
to continue to watch and see. There's some interesting reports
that North Korea is also sending workers to Russia, Joe,
which indicates that Russia doesn't have enough people to be
fueling it's.
Speaker 12 (25:44):
It's it's economy.
Speaker 13 (25:46):
So uh, I'm not I don't think much is going
to happen on the high level negotiations, but the real
issue is the security guarantees and also the production of
weapons in Europe.
Speaker 12 (25:57):
So watch that space, all right.
Speaker 10 (26:00):
We will be and we trust you will be as well,
and continue to come back and share your insights with us.
Melinda Herring, Senior Fellow at the Atlanta Council's Eurasia Center.
Joining us here on Bloomberg TV and radio.
Speaker 1 (26:12):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Apple Cocklay and Android Auto with the Bloomberg Business app.
You can also listen live on Amazon Alexa from our
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Speaker 2 (26:29):
Thirty watching stocks rise today, including Tesla. Charlie's been checking
Tesla for a couple of reasons here, and it brings
us back to the late edition of Balance of Power
right after the bell yesterday. Worst quarter in years was
the headline, look at the stock up six percent, fourteen
dollars back above two hundred and fifty because it looks
(26:50):
like they're going to get Elon back. Yeah, that's the
story that we're following here in Washington. Of course, we've
talked so much about his work at the DOGE with
another headline, must to refocus on Tesla after its worst
quarter in years. And you know, we've been looking at
the end of May here if you listen to this program, remembering,
of course, that that's the deal one hundred and thirty
day limit. I guess unless they re up this deal
(27:13):
his role as a special government employee, that would kind
of round things out by the end of May. My
only real question is does he get to keep the chainsaw.
Elon Musk did speak to investors on the quarterly conference
call following the results last evening.
Speaker 15 (27:28):
Listen, starting probably an ex month may my time allocation
to dogs will drop significantly. I'll have to continue doing
it for I think fight the remainder of the president's term.
Just make sure that the waste and fraud that we
stop does not come roaring back.
Speaker 2 (27:47):
He called his work at the Doge quote mostly done, unquote,
raising a whole new load of questions here inside the
beltwagh about what exactly the Doge has a complied Elon
Musk promising in the outset to cut two trillion dollars
in spending, waste, fraud, and abuse, and it might not
(28:09):
come anywhere near that number, although we're going to be
talking a lot more about recisions when lawmakers get back
to town, and you can park that here for a moment.
It's not very often I get to spend time with
Ed Ludlow. It's usually a big deal involving a rocket launch.
So that should tell you how important this story is. Today.
He's with us from our bureau in San Francisco. Of course,
the cohost of Bloomberg Technology or Elon whisperer at the moment,
(28:32):
and it's great to see you and I appreciate this.
This is really what investors we're looking for. Does Elon
Musk mean it is he going to be showing up
at the Tesla plant? What's his new life going to
be like the one he used to lead?
Speaker 16 (28:46):
I mean that's a pretty good summary. It was the
only metric that mattered.
Speaker 9 (28:51):
You know.
Speaker 16 (28:51):
We asked going into the earnings print, how do you
gauge someone's commitment to something? And he opened the cool
saying exactly that as of next month May, he will
drop the amount of time that he spends with Doge
and boost the allocation of.
Speaker 6 (29:06):
Time for Tesla.
Speaker 16 (29:07):
But you make a really good point, which is, depending
on who you asked, this was or wasn't a surprise, right.
We've known for quite a long time that a special
government employee has a one hundred and thirty day limit
on their contributions, even if they're unpaid, and we've all
been looking at the calendar and thinking what happens at
the end of May. But it's just sort of the
public coming out and saying, don't worry, I'm coming back
(29:30):
to Tesla and I'm focused on the big picture.
Speaker 2 (29:33):
Stuff, fascinating what happened to the company in this quarter?
Ed and how much did politics have to do with it?
Speaker 6 (29:40):
Yeah, there's a lot of politics to discuss.
Speaker 16 (29:43):
I mean, there were contradictions between the statements that Elon
Musk made on the earnings call and the statements made
by his CFO. The CFO quite clearly addressed the issue
that in the first quarter there is what he referred
to as brand damage and vandalism that impact first quarter sales.
Elon Musk opened his remarks just before he kind of
(30:05):
announced he would step back from doage, saying he recognized
a backlash. So, and what's interesting is that there's more
than just about the United States here. You know, there's
a lot of evidence that we have protests in the
United States. Elon Musk made unsubstantiated claims that they were
sort of a targeted and paid for campaign against him,
and that has impacted Tesla's sales. But the politics extends
(30:26):
to China right where Tesla is under pressure from domestic
players in China. And if you're a Chinese national, would
you buy a Tesla or champion your own domestic brand?
Speaker 6 (30:36):
Right now?
Speaker 16 (30:36):
Knowing that Elon Musk is an associate of President Trump
in this in this trade scenario, you.
Speaker 2 (30:43):
Know, you see poles ed. You've been in business news
long enough, you see poles. What brand association people have,
whether they're from the left or the right. They've got
their own beer, They've got their own car. In this case,
they've really got their own car. But to watch that
transition from being a darling on the left right with
making the the most successful ev ever made in this country,
(31:04):
to the complete political opposite makes you wonder how much
permanent damage is done here.
Speaker 6 (31:10):
Yeah, and it's hard to quantify, I mean within the data.
Speaker 16 (31:13):
There is also a debate about whether the softness in
the first quarter reflected Americans who were existing Tesla owners
and have become disgruntled or disenfranchised with Elon Musk, or
whether Elon Musk's profile and relationship with government was holding
off first time buyers of a Tesla product. We just
don't know, but it's an excellent question. I think what
(31:34):
was also so interesting is just the tariff's debate. You know,
Elon Musk is closely aligned with the President, as you know,
but he did say I don't believe in high levels
of tariffs I believe in low tariffs, and I advocated
that position to the president, but it's not up to me.
It's up to the president. And in the context of
an earning school, that's not unprecedented, but a little bit surprising, right, It's.
Speaker 6 (31:55):
Something that doesn't happen in the daily course of my job. Yeah.
Speaker 2 (31:58):
No, that was fascinting and I wonder ed if that
was the breaking point. I'm not sure we'll ever know,
but was it the political tug to have to get
back to and of course the investor tug to get
back to the company to get the stock moving again,
to have a better story to tell at Tesla, Or
was it, Hey, you know what, I don't believe in
tariff So I think maybe our work here is done.
Speaker 6 (32:20):
In any company.
Speaker 16 (32:21):
It's not just the CEO, right, And in any company
earnings the literal statement, the report and the call, the
IR team is involved, the legal team is involved, in
the CFO is involved, and it's said very clearly in
the earnings deck that the company recognizes a changing political
landscape without defining geographically where it recognized it, and an
(32:42):
evolving trade policy and they're all impacted by that. And
it was a big moment where you know, we know
about the disagreements within the cabinet, Musk and Peter Navarro
not necessarily getting on. But this was a company in
regulatory filings recognizing what's happening around the world right now.
And while Tesla is more insulated than other American companies
(33:04):
because it has a very onshore vertically integrated supply chain,
it basically said this isn't good for us, and our
opinion on it is this, and that was an important moment.
It was an indirect message to this administration. I think
that's a fair interpretation.
Speaker 2 (33:19):
Tell me about the man ed before I ask you
about some other stuff that I wanted to talk to
you about. Much has been said about Elon Musk's lifestyle,
and there have been a lot of questions about the
stress levels he's been under. He talked about how difficult
it's been trying to do all of this. There have
been questions about his sobriety. There have been questions about,
my gosh, this piece about all the kids and the
mothers that he's dealing with, is he well.
Speaker 16 (33:43):
Elon Musk has the lifestyle of someone that is atypical
for the everyday person. He is on and off the
world's richest person you know as an understatement. Look, I
know a lot of people that have worked for and
with Elon Musk across all of his companies for a
really long time. He is a micro manager. He likes
to make decison, he likes to be told tell me
why I am wrong. He spends a lot of time
(34:03):
on private jets working off of his cell phone. But
the story has been has he been too focused on
DOJE and been operating in Mari Lago and DC too
much relative to Tesla's facilities. But he's also credited with
some of the biggest technological breakthroughs that humankind's seen in
the domain of energy, EV's rocket Tree. And I think
(34:26):
that this whole debate was about that he's good at
that stuff, so if he focused more on it, then
there might be progress in those fields. And it's also
important to reflect that lots of times Elon Musk makes
bold predictions and timelines that he gets the timing wrong,
but he does often get there in the end with
a product or whatever that right.
Speaker 2 (34:45):
Fascinating story. As we got our hooks into Ed Ludlow,
I need to ask you about Intel. It's an important
headline plans this week to cut over twenty percent of
its staff. I'm sitting in Washington, you're in San Francisco.
So the question I'm supposed to ask you is, did
Joe Biden? Did the Biden administration pick the wrong company?
Speaker 16 (35:05):
Yeah, you'd think that the Intel would be the national champion, right.
It is both a designer of semiconductor products and a
manufacturer of them, a domestic manufacturer, and Intel's been very
frustrated with the CHIPSAC because the money has not really
been forthcoming. The intended impact of it's not yet happened.
What we're reporting is that they're cutting twenty percent. But
(35:25):
it's not just about bloat. It's about kind of getting
focused on technology. There are lots of middle managers at
Intel that are involved in making decisions that mean good
decisions don't happen, and Intel is trying to find a
way to kind of get back to their heritage, which
is being the leader in the field of semiconductor manufacturing
at the cutting edge of technology. What they want to
(35:46):
do is very much in line with the Trump administration
wants to do with onshoring manufacturing, and so I'm so
curious to hear when they report numbers, has anyone from
the administration phoned them or have they phone the administration?
Speaker 6 (35:57):
That would be a big piece of news.
Speaker 2 (36:00):
Absolutely fascinating. And more broadly, when you consider the semiconductor space, ed,
how would you describe this industry right now? Obviously we're
in flux. We're dealing with export controls that we've seen
an enormous amount of damage here to in Vidia shares,
for instance, over the past couple of weeks, despite a
great meeting between Jensen Wong and Donald Trump. But we're
(36:23):
drawing a line around Taiwan here and trying to figure
out how quickly they can pull this off.
Speaker 16 (36:27):
It's the one hundred billion dollar question, and we don't
have enough time for me to answer it in full.
But basically, there are American chip companies that all design
chips that are right now in vogue. We are talking
about GPUs or accelerators that go into data centers to
train AI models. Intel's fallen behind in that space. In
video largely has a monopoly. The key point about a
(36:48):
company like in Video is it's what's called a fabulous
chip company. It designs the chips, someone else makes them.
As you just said, TSMC. The supply chain therefore has
the critical part the manufacturing of the chip in Taiwan
that is not China, but of course, in the context
of renegotiating the world order for trade, it's an important factor.
(37:08):
China is also a critically important end market for all
of these names, be they smartphone chip makers, be they
in the data center business. And what they want to
find out is, if I make a chip somewhere in
the world outside of the United States, is there a
business for me in China? And we don't have an
answer to that yet. I saw the headlines from Vestent today.
It doesn't answer the question of what happens next in
(37:30):
that sector specifically, It.
Speaker 2 (37:33):
Sure doesn't, So we got to keep talking about it.
Ed Ludlow a journalist and a broadcaster peaking right now.
Ed come on more often and talk to us. He
co host Bloomberg Technology. He does have a full time job,
but we'll try to pull him into this conversation as
often as we can. Really interesting stuff. This is again
the intersection once again of Wall Street, Washington, and in
(37:54):
the case of Ed Ludlow, San Francisco, the technology sector.
You can't pull one leg out of the stool Ed.
Thank you, thanks for listening to the Balance of Power podcast.
Make sure to subscribe if you haven't already, at Apple, Spotify,
or wherever you get your podcasts, and you can find
(38:14):
us live every weekday from Washington, DC at noontime Eastern
at Bloomberg dot com.
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