Trump, Xi Set to Meet in China Within Hours | Balance of Power 05/13/2026

Added: 2026-05-21

[00:00:07]>> THIS IS BALANCE OF POWER, LIVE FROM WASHINGTON,.

[00:00:14]>> THE AYES ARE 54. THE NAMES ARE 45.

[00:00:15]THE NOMINATION IS CONFIRMED.

[00:00:23]>> THE FED'S NEW CHAIR KEVIN WARSH IS CONFIRMED BY THE SENATE AS THE NEXT CHAIR OF THE FEDERAL RESERVE, INHERITING NO SHORTAGE OF CHALLENGES. THE STRAIT OF HORMUZ REMAINS BLOCKED AND PRESIDENT TRUMP HAS MADE IT CLEAR HE WANTS RATE CUTS. SUMMIT SET TO BEGIN.

[00:00:42]PRESIDENT TRUMP AND CHINA'S XI JINPING SET TO MEET.

[00:00:46]THE TWO ECONOMIES LOOKING TO STABILIZE TIES AS THE WAR IN IRAN LOOMS OVER THE TALKS. WE GET REACTION TO THESE DEVELOPMENTS FROM BOTH SIDES OF THE AISLE THIS HOUR AS RICHARD BLUMENTHAL AND AND MCCORMICK JOIN US.

[00:01:00]FROM BLOOMBERG'S WASHINGTON, D.C.

[00:01:02]STUDIOS, WELCOME TO BALANCE OF POWER. I'M KAILEY LEINZ.

[00:01:07]IT WAS IN THE SENATE THAT WE SAW WARSH CONFIRMED THIS AFTERNOON. THAT MAY BE THE EASY PART.

[00:01:14]THE HARD PART IS LIKELY STILL AHEAD OF HIM. JOE: THAT'S TRUE.

[00:01:20]WE CAN SAY THAT DEFINITIVELY. CHAIR WARSH IS GOING TO BE WALKING INTO THE BUILDING HERE JUST DOWN PENNSYLVANIA AVENUE OR DOWN CONSTITUTION FROM WHERE I AM HERE WITH A LANDSCAPE THAT'S DIFFERENT THAN WHEN HE WAS NOMINATED.

[00:01:37]KNOWING THAT THE WAR IS UNDERWAY, SETTING OIL PRICES INTO THE TRIPLE DIGIT. GAS ALLY -- GASOLINE PRICES ACROSS THE COUNTRY NOW. PPI FOLLOWING CPI WITH THE BIGGEST INCREASES IN PRICES WE'VE SEEN SINCE 2022.

[00:01:55]ENERGY PRICES ARE STARTING TO GET INTO THE CORE WHICH HAS A LOT OF ECONOMISTS WORRIED. KAILEY: WE WILL HAVE MORE ON THE DATA TONIGHT AND MORE FROM JOE ON CAPITOL HILL. WE BEGIN THE EVENING IN CHINA AS PRESIDENT TRUMP'S SUMMIT IS SET TO BEGIN JUST HOURS FROM NOW. TYLER KENDALL IS JOINING US LIVE FROM BEIJING WITH MORE.

[00:02:14]WALK US THROUGH WHAT WE ARE GOING TO SEE OVER THE COURSE OF THE DAY'S EVENTS. TYLER: AT THE MOMENT WE ARE ABOUT FIVE HOURS AWAY FROM PRESIDENT TRUMP MEETING FACE-TO-FACE WITH CHINESE PRESIDENT XI JINPING IN A PRIVATE CLOSED-DOOR BILATERAL MEETING.

[00:02:33]LATER IN THE EVENING, WE ARE EXPECTING A STATE BANQUET TO COMMENCE WHERE WE COULD SEE SOME MORE OF THOSE TECH CEOS THAT ARE NOW HEARING BEIJING FOR THIS VISIT EMERGE.

[00:02:42]WE WILL HAVE TO SEE WHAT HEADLINES WE GET OUT OF TOMORROW. THIS WILL BE A WHIRLWIND 36 HOUR VISIT FOR PRESIDENT TRUMP HERE IN CHINA FOLLOWED BY SOME EVENTS ON FRIDAY. SO FAR THE WHITE HOUSE IS MAINTAINING WE WILL GET SOME DELIVERABLES MAINLY RELATED TO TRADE. WE ARE WATCHING CLOSELY WHAT SORT OF POTENTIAL PURCHASE AGREEMENTS OR COMMITMENTS FROM CHINA MAY COME FROM THIS MEETING.

[00:03:06]MAINLY IN REGARDS TO U.S. AGRICULTURAL GOODS.

[00:03:10]I'M TRACKING SOYBEANS AND CORN. ENERGY PRODUCTS AND POTENTIALLY BOEING AIRCRAFT, MAINLY THE 737 JETS. AT THIS POINT, WE SEE THE ADMINISTRATION TRY TO PUSH FORWARD THE ECONOMIC AGENDA.

[00:03:22]MAYBE WE WILL GET AN EXTENSION WHEN IT COMES TO THE U.S.

[00:03:25]TRADE TRUCE. THAT DOESN'T EXPIRE UNTIL NOVEMBER SO THERE MAY BE LEEWAY HERE.

[00:03:31]OUR OWN ANALYSTS HAVE SAID THAT THE VISIT IS A VERY MUCH -- IS VERY MUCH FOCUSED ON KEEPING STABILITY IN THE U.S.

[00:03:39]CHINA RELATIONSHIP RATHER THAN MAKING SUBSTANTIAL PROGRESS.

[00:03:42]THERE ARE OTHER AREAS WHERE WE WILL LIKELY SEE THE LEADERS HIGHLIGHT. I WOULD BE REMISS IF I DIDN'T MENTION THAT JENSEN HUANG CAUGHT ALLOTMENT -- LAST-MINUTE RIDE TO BEIJING. THAT WILL PUT ARTIFICIAL INTELLIGENCE AT THE FRONT OF THE AGENDA.

[00:04:02]CHINESE PRESIDENT XI JINPING TO ALLOW COMPANIES TO PURCHASE AND IMPORT THOSE AGE 200 NVIDIA CHIPS.

[00:04:11]LOOMING VERY LARGE LOWLY -- OVER THE MEETING IS THE ISSUE OF IRAN.

[00:04:20]KAILEY: IF IT'S NOT GOING TO BE A PRIORITY, DO WE HAVE A SENSE AS TO WHETHER OR NOT WE WILL GET ANY READ-OUT AT ALL AS TO WHAT HAPPENS IN THE MORE DIPLOMATIC GEOPOLITICAL FOCUSED PART OF THESE CONVERSATIONS?

[00:04:40]>> WE ARE GOING TO HAVE TO WAIT AND SEE.

[00:04:45]AS WE WAIT FOR WHAT THE NEXT U.S. RESPONSE IS GOING TO BE, PRESIDENT TRUMP SAID HE AND HIS TEAM WERE GOING TO DISCUSS WHAT THE RED LINES WOULD BE IN ORDER FOR THE U.S.

[00:04:53]TO END IT CEASE-FIRE. MARCO RUBIO AS WELL AS PETE HEGSETH ARE HERE ON THE GROUND AS WELL WHICH IS GOING TO ADD TO THESE CONVERSATIONS. PRESIDENT TRUMP SAID YESTERDAY THAT THE U.S. DOESN'T NEED ANY HELP IN TERMS OF ENDING THE CONFLICT. IT'S IMPORTANT TO MENTION THAT HE ALLUDED TO THE FACT THAT HE WOULD BE ASKED CHINESE PRESIDENT XI JINPING FOR WHATEVER HE COULD DO TO GET AROUND TO THE NEGOTIATING TABLE IN A MORE MEANINGFUL WAY.

[00:05:23]UNDERSCORING THAT, A SENIOR OFFICIAL WHO BRIEFED US SAID THAT BEHIND CLOSED DOORS PRESIDENT TRUMP WILL PUSH BACK WHEN IT COMES TO CHINA STANCE INCLUDING BEIJING REMAINS THE LARGEST IMPORTER OF IRANIAN CRUDE.

[00:05:37]THESE MEETINGS AT THIS POINT, THE UPDATES HAVE BEEN COMING FROM PRESIDENT TRUMP ITSELF.

[00:05:50]KAILEY: TYLER KENDALL REPORTING LIVE FROM BEIJING.

[00:05:58]>> THANK YOU SO MUCH. JOINING US AS RICHARD BLUMENTHAL OF CONNECTICUT WHO SERVES ON THE SENATE ARMED SERVICES COMMITTEE AS WELL AS SENATE HOMELAND SECURED COMMITTEE. GREAT TO HAVE YOU BACK ON BLOOMBERG TV. I WOULD LIKE TO START WITH THE MATTER OF IRAN. TYLER IS WATCHING THIS UNFOLD JUST AS THE PRESIDENT TOUCHES DOWN IN BEIJING.

[00:06:20]THE NEW YORK TIMES REPORTS THAT IRAN HAS RECONSTITUTED ITS MISSILE PROGRAM, REACTIVATING ITS MISSILE SITES, AND HAS MORE MISSILES AND INVENTORY THAN WE PREVIOUSLY KNEW ABOUT PIG CAN -- ABOUT. CAN YOU CAN REFORM THAT REPORTING -- CONFIRM THAT REPORTING?

[00:06:41]>> I'M LIMITED BECAUSE IT COMES FROM CLASSIFIED BRIEFINGS.

[00:06:44]WHAT'S IN THE NEW YORK TIMES IS CERTAINLY NO SURPRISE.

[00:06:48]IT IS CONSISTENT WITH WHAT I HAVE BEEN TOLD BY VERY RELIABLE SOURCES. I WILL SAY, IT SHOULD BE NO SURPRISE TO THE AMERICAN PUBLIC. A LOT OF THESE MISSILES AND MISSILE LAUNCHERS WERE BURIED UNDERGROUND.

[00:07:04]NOW THEY HAVE TAKEN THEM ABOVE GROUND.

[00:07:10]PERHAPS 70% OF THEIR PREWAR MISSILES AND 75% OF THEIR MUSCLE LAUNCHERS -- MISSILE LAUNCHERS.

[00:07:17]THEY ARE MOBILE AND HARD TO HIT. IN THE MEANTIME, WE'VE EXPANDED -- EXPENDED 1100 STEALTH CRUISE MISSILES, A THOUSAND, HACK MISSILES, 1300 PATRIOT INTERCEPTORS.

[00:07:27]THAT'S TWO YEARS OF PRODUCTION OF INTERCEPTORS.

[00:07:34]SO THE MESSAGE HERE REALLY IS THAT IRAN STILL HAS A VERY POWERFUL CAPACITY TO ATTACK SHIPS IN THE STRAIT OF HORMUZ.

[00:07:45]30 OUT OF 33 LAUNCHING SITES ARE STILL OPERATIONAL TO ONE DEGREE OR ANOTHER. THAT POSES A MAJOR DILEMMA FOR PRESIDENT TRUMP. HE'S REALLY STUCK BECAUSE HE'S ACCOMPLISHED NONE OF HIS OBJECTIVES AT THE START OF THE WAR. THE PASTOR NEGOTIATIONS IS A VERY DIFFICULT ONE.

[00:08:04]>> THE PRESIDENT SAID, WE ALREADY WON MILITARILY.

[00:08:09]>> WELL, THE AMERICAN PEOPLE WILL JUDGE FOR THEMSELVES.

[00:08:12]THERE OUGHT TO BE A CONGRESSIONAL INVESTIGATION ABOUT HOW WE GOT INTO THE WAR. IN THE MEANTIME, I THINK THAT THE EVIDENCE SHOWS THAT THE REVOLUTIONARY GUARD AND THE HARD-CORE LEADERSHIP IS STILL THERE.

[00:08:29]THEY ARE MORE HARD-CORE THAN EVER BEFORE.

[00:08:30]THEY ARE FIRMLY IN CONTROL. THE ENRICHED URANIUM IS STILL THERE. WE HAVEN'T SECURED IT.

[00:08:38]THE CAPACITY TO MAKE MISCHIEF THROUGH HEZBOLLAH AND OTHER PROXIES, STILL THERE. OF COURSE, THE MISSILES AND THE LAUNCHERS ARE STILL THERE. WHAT HE IS DONE, GOTTA GIVE SOME CREDIT HERE.

[00:08:54]TO DESTROY PROBABLY THE PRODUCTION CAPACITY FOR THOSE MISSILES AND LAUNCHERS.

[00:09:02]>> IF 30 OUT OF 33 MISSILE SITE ARE INTACT, IS IT NOT TIME TO RESUME STRIKES?

[00:09:10]>> WELL IT WOULD IF THE EXPECTATION IN THE MILITARY IS THAT IT WOULD BE SUCCESSFUL IN DESTROYING THOSE LAUNCHERS AND THE MISSILES. BUT IT'S NO SIMPLE OR EASY TASK TO DO SO. EVEN IF THOSE LAUNCHERS AND MISSILES ARE DESTROYED, THERE ARE FAST ATTACK BOATS, THERE ARE OTHER KINDS OF ARMS THAT EXIST. SO THE PRESIDENT IS IN A DIFFICULT POSITION. THE UNITED STATES IS IN A REAL DILEMMA HERE. BECAUSE IRAN IS INSISTING ON CONTINUED CONTROL OF THE STRAIT OF HORMUZ AND THAT GIVES IT A CHOKEHOLD ON THE WORLD'S ECONOMY.

[00:09:52]>> SO A COUPLE QUESTIONS TO FOLLOW ON THERE.

[00:09:56]OBVIOUSLY WE'VE GOT REPERCUSSIONS HERE AT HOME EVEN AS THE PRESIDENT TOUCHES DOWN IN CHINA.

[00:10:02]I WILL ASK YOU ABOUT GAS PRICES IN A MOMENT.

[00:10:04]DO YOU THINK THAT THE PRESIDENT IS WILLING TO MAKE A DEAL WITH XI JINPING FOR ASSISTANCE IN REOPENING THE STRAIT AND WHAT WOULD IT LOOK LIKE?

[00:10:11]>> HARD TO KNOW.

[00:10:18]THE EXTENT OF XI'S CONTROL OVER IRAN LEADERSHIP IS VERY PROBLEMATIC AND UNCERTAIN. IN FACT, HERE'S ANOTHER REALLY IMPORTANT ASPECT OF THE PRESIDENT'S DILEMMA AND THE REASON WHY THIS MISCALCULATION ON THE WAR IS SO DEEPLY DESTRUCTIVE TO OUR CREDIBILITY AS WELL AS OUR ECONOMIC POSITION, IRAN'S LEADERSHIP NOW IS SOMEWHAT DIVIDED.

[00:10:40]THE QUESTION OF HOW TO NEGOTIATE WITH IT, HOW XI WOULD POSSIBLY EXERT SOME INFLUENCE IS VERY UNCERTAIN AND PROBLEMATIC. SO WE HAVE, IN EFFECT YOU COULD ARGUE, AND I HAVE ARGUED, WORSENED OUR POSITION VIS-A-VIS IRAN AS A RESULT OF THE WAR OF CHOICE WHICH INVOLVES NOT ONLY ILLEGALITY BUT ALSO A REALLY DIRE MISCALCULATION.

[00:11:09]>> I CHECKED OUT AAA. ER AT 4.61 IN CONNECTICUT.

[00:11:13]YOU ARE TOPPING THE NATIONAL AVERAGE.

[00:11:15]DO YOU SUPPORT SUSPENDING THE GAS TAX? DOES IT NOT MAKE ENOUGH DIFFERENCE TO RAID THE HIGHWAY FUND?

[00:11:22]>> I SUPPORT SUSPENDING THE GAS TAX.

[00:11:24]THERE ARE OTHER SOURCES TO FUND HIGHWAY TRUST FUND.

[00:11:26]BUT MAKE NO MISTAKE.

[00:11:32]THE SUSPENSION OF THE GAS TAX WILL MAKE A VERY MARGINAL DIFFERENCE IN WHAT A CONSUMER PAYS AT THE PUMP.

[00:11:45]18.4 SENSE IS NOT A LOT OF MONEY WHEN YOU CONSIDER GAS PRICES GOING TO FOUR DOLLARS 60 CENTS PER GALLON.

[00:11:53]THEY ARE HEADED HIGHER. I WOULD PREDICT TO YOU THAT THEY MAY BREAK FIVE DOLLARS PER GALLON BY THE END OF THE WEEK.

[00:11:59]BUT IT IS AN ONLY GASOLINE PRICES.

[00:12:01]AS YOU POINTED OUT AT THE START OF THE SHOW, THE PRICES OF FUEL, OF OIL AND GAS, ARE GOING THROUGH THE WHOLE ECONOMY. ALL PRODUCTS MADE WITH PETROCHEMICALS ARE GOING TO BE AFFECTED.

[00:12:21]EVERYTHING FROM PLASTIC TO MEDICAL DEVICES TO MATTRESSES TO SEMICONDUCTORS. A WHOLE ECONOMY IS AT STAKE HERE. THE WORLD'S ECONOMY. WE DON'T EXIST AND AVOID.

[00:12:33]>> I WANT TO ASK YOU ABOUT SOMETHING THAT'S IMPORTANT TO YOU BEFORE YOU LEAVE US. THAT IS THE KIDS ONLINE SAFETY ACT WHICH YOU ARE REINTRODUCING, I BELIEVE WITH MARSHA BLACKBURN AS YOUR PARTNER.

[00:12:46]DOES IT NEED TO BE TWEAKED, REWRITTEN TO ACKNOWLEDGE ADVANCEMENTS IN AI?

[00:12:51]>> THIS BILL IS A STAND-ALONE BILL THAT DEALS WITH THE PRODUCT DESIGN OF THE INTERNET RIGHT NOW.

[00:12:59]WHICH INVOLVES ALGORITHMS DRIVING TOXIC CONTENT AT CHILDREN.

[00:13:06]BULLYING, EATING DISORDERS, SUICIDE IDEATION.

[00:13:07]JUST TODAY, WE HAD TESTIMONY FROM TWO MOMS WHOSE CHILDREN TOOK THEIR OWN LIVES AS A RESULT OF WHAT THEY SAW ON THE INTERNET. THE BUSINESS MODEL, WHICH IS MORE EYEBALLS FOR MORE TIME WHICH MEANS MORE ADVERTISING REVENUE WHICH MEANS MORE DOLLARS.

[00:13:27]IT'S A QUESTION OF PRODUCT DESIGN THAT WOULD IMPOSE A DUTY OF CARE ON BIG TECH. SO REGARDLESS OF WHETHER AI OR ALGORITHMS OR SOME OTHER TECHNOLOGY IS INVOLVED, THAT DUTY OF CARE WOULD FORCE THEM TO TAKE ACCOUNT OF WHETHER THEIR PRODUCT IS HARMING PEOPLE, WHETHER THEY SHOULD KNOW IT HARMS PEOPLE. SO THE BILL THAT WE HAVE RIGHT NOW SHOULD BE APPROVED. WE HAVE 75 COSPONSORS ALREADY.

[00:13:58]IT PASSED THE SENATE LAST TIME, OVERWHELMINGLY BIPARTISAN.

[00:14:02]I'M HOPING IT WILL AGAIN PASS THE HOUSES WELL.

[00:14:07]>> DOESN'T MAKE YOU NERVOUS TO SEE MARK ZUCKERBERG IN CHINA WITH DONALD TRUMP?

[00:14:12]>> MAKES ME VERY NERVOUS. IT MAY WELL BE MORE PAY TO PLAY.

[00:14:18]MARK ZUCKERBERG HAS BEEN TREATED VERY WELL BY THIS ADMINISTRATION. HE WAS TREATED VERY BADLY BY A JURY IN CALIFORNIA WHICH JUDGED THAT INSTAGRAM AND META ARE RESPONSIBLE FOR THE DEATHS AND INJURIES TO CHILDREN, EVEN AFTER HIS TESTIMONY. APPARENTLY THE JOURNEY -- TO READ AND BELIEVE HIM. BUT HIS ACCOMPANYING THE PRESIDENT ON THIS TRIP, ALONG WITH OTHER CORPORATE EXECUTIVES, INDICATES THAT THE ADMINISTRATION MAY BE GRANTING THEM FAVORS FOR CAMPAIGN CONTRIBUTIONS OR SOME OTHER KINDS OF FAVORS THAT THEY NEED.

[00:14:57]>> SOUNDS LIKE WE HAVE A LOT TO FOLLOW-UP WITH YOU.

[00:15:03]LET'S DO IT AGAIN SOON.

[00:15:05]JOE: THAT'S OF COURSE DEMOCRATIC SENATOR BLUMENTHAL.

[00:15:09]LET'S CHECK IN WITH KATIE IN OUR WASHINGTON BUREAU. KAILEY: THANK YOU. OF COURSE HE IS TALKING ABOUT ALL THE CEOS ON ROUTE TO CHINA. THE INCLUSION AND THE BOARDING OF THE PLANE IN ANCHORAGE, SENDING THAT STOCK HIRED TODAY. IT LET A RALLY INTACT SOCKS THAT PUSHED EQUITY MARKETS TO ALL-TIME HIGHS IN THE U.S., EVEN IN THE FACE OF HOTTER INFLATION DATA.

[00:15:30]FROM WHERE WE TURNED TO POWER MOVES WITH BLOOMBERG'S ROMAINE BOSTICK IN NEW YORK. ROMAINE: THE NEWS THAT JENSEN HUANG WAS TRAVELING NOT ONLY LIT A FIRE UNDER U.S. TECH STUFF BUT CHINESE TECH STOCKS AS WELL. THE GOLDEN DRAGON INDEX HAVING ITS BEST TO GOING BACK TO JANUARY WITH A LOT OF THE NAMES IN THE CHINESE SPACE OF THE A.I. AND TECH SPACE RALLYING HARD ON THE DAY. THAT'S THE FUNDAMENTAL STORY WE CONTINUE TO SEE O -- SEE IN U.S. MARKETS.

[00:16:01]RECORD HIGH POWERED PRIMARILY BY THOSE CHIP NAMES LIKE QUALCOMM AND MICRON.

[00:16:09]THE CEOS, TRAVELING TO CHINA AS WELL AS WAS TIM COOK, THE OUTGOING CEO OF APPLE. AND THIS GENERAL IDEA HERE THAT MAY BE POTENTIALLY THEY COULD BRING SOMETHING BACK.

[00:16:21]RICHARD BLUMENTHAL, THAT SENATOR THERE WAS ALLUDING TO THAT, NOT NECESSARILY IN THE MOST POSITIVE LIGHT.

[00:16:26]BUT FOR INVESTORS IT SEEMS TO BE WHAT THEY ARE FOCUSED ON.

[00:16:29]THIS A.I. STORY IN TERMS OF REVENUE GROWTH AND PROFITABILITY HAS BEEN A U.S.

[00:16:32]STORY LARGELY BECAUSE OF A LOT OF THE CONTROLS BOTH THE U.S.

[00:16:36]HAS PLACED AS WELL AS CHINA HAS PLACED ON THE TRANSFER OF THE TECHNOLOGY ACROSS THE BORDER. NO ONE REALLY KNOWS HOW MUCH OF THAT IS GOING TO BE ON THE TABLE AND WHETHER TRUMP WE CAN ACTUALLY DELIVER ON THAT IS A HOPE RIGHT NOW, THAT THAT WILL ACTUALLY HAPPEN AND CONTINUE TO POWER THIS MARKET. A MARKET THAT WE SHOULD OF COURSE POINT OUT IS SHRUGGING HIS SHOULDERS IN THE FACE OF THOSE TWO BIG INFLATION REPORTS WE GOT OVER THE LAST 24-48 HOURS. KAILEY: THAT'S WHAT I WANTED TO ASK ABOUT, THIS INFLATION IS HOT, GOING BACK TO 2022 HOT.

[00:17:11]IT'S A ROUGH THING TO INHERIT FOR KEVIN WARSH WHO WAS CONFIRMED AS CHAIR OF THE FEDERAL RESERVE.

[00:17:18]IT'LL BE HARD FOR HIM TO CUT RATES.

[00:17:19]>> THAT IS THE CONSENSUS RIGHT NOW, THAT RATE CUTS FOR THE MOST PART ARE ON THE TABLE FOR 2026, THE WE SHOULD POINT OUT A LOT OF FOLKS WE HAVE TALKED TO ON THE CLOSE SAY, DON'T EXPECT RATE HIKES EITHER. I WAS TALKING YESTERDAY ABOUT THIS IDEA OF THE K-SHAPED NATURE OF THE ECONOMY AND THE STOCK MARKET BUT YOU ALSO SEE THAT IN THE TREASURY SPACE, REFLECTED TODAY WITH YIELDS ON THE SHORT END OVER THE CURVE.

[00:17:40]WHAT THE FED CONTROLS MOVING LOWER, SLIGHTLY LOWER.

[00:17:44]YIELDS ON THE LONGER END OF THE CURVE, MOVING HIGHER, REFLECTED IN THE BIG TREASURY OPTION WE HAD, THAT 30 YEAR BOND AUCTION THAT CAME OUT EARLIER TODAY. THE TREASURY HAD TO PROMISE 5.046% TO GET THOSE BIDDERS IN AND THAT IS SIGNIFICANT, THAT'S THE HIGHEST THEY EVER HAD TO PAY.

[00:18:00]THE FIRST TIME THEY HAVE HAD TO PAY ABOUT 5% ON A 30 YEAR OPTION SINCE 2007. THAT GIVES YOU A SENSE ARE A LOT OF CONCERNS RIGHT NOW ABOUT HOW MUCH YOU WILL BE COMPENSATED FOR THAT INFLATION RISK, WHICH WAS FRONT AND CENTER, AND THE PPI REPORT THIS MORNING AND CPI REPORT YESTERDAY. KAILEY: ALL RIGHT, BLOOMBERG'S ROMAINE BOSTICK, THANK YOU SO MUCH FOR JOINING US.

[00:18:25]WE HAVE MORE COMING UP. MORE ON TODAY'S INFLATION FIGURES AND KEVIN WARSH'S CONFIRMATION AS THE NEW FED CHAIR IN OUR CONVERSATION WITH REPUBLICAN SENATOR DAVE MCCORMICK OF PENNSYLVANIA NEXT ON "BALANCE OF POWER" ON BLOOMBERG TV AND RADIO. ♪ >> THE AYES ARE 54, NAYS, 45, THE NOMINATION IS CONFIRMED.

[00:18:59]JOE: IT IS "BALANCE OF POWER" ON BLOOMBERG TV AND RADIO.

[00:19:05]ALONGSIDE KAILEY LEINZ AND OUR WASHINGTON BUREAU, I AM JOE MATHIEU ON CAPITOL HILL. KEVIN WARSH, BEEN CONFIRMED AS THE NEXT CHAIR OF THE FEDERAL RESERVE.

[00:19:18]THAT IS THE THINNEST MARGIN FOR A CENTRAL BANK CHIEF.

[00:19:22]JOINING US FOR MORE IS BLOOMBERG'S MICHAEL MCKEE.

[00:19:25]HE GOT THE VOTE. THIS A PARTISAN NATURE OF THIS VOTE COLOR THE START OF HIS CHAIRMANSHIP?

[00:19:31]>> EVERYONE EXPECTED FOR IT TO BE A PARTISAN VOTE.

[00:19:34]IT'S BEEN A PARTISAN EFFORT TO GET HERE -- GET HIM ON THE FEDERAL RESERVE AS CHAIRMAN.

[00:19:44]WE SAW THE VOTE FOR LISA COOK WHEN SHE WAS NOMINATED, IT WAS A ONE-VOTE MARGIN FOR HER TO BE CONFIRMED TO THE BOARD OF GOVERNOR, THAT IS WHEN DEMOCRATS WERE IN CHARGED.

[00:19:54]-- WERE IN CHARGE. THIS IS WHAT HAPPENED.

[00:19:56]IT IS WASHINGTON. EVERYONE WILL FORGET ABOUT IT VERY SHORTLY. [LAUGHTER] JOE: HE'S GOING TO HAVE QUITE THE JOB AHEAD OF HIM WHEN HE STARTS HERE, AS LONG AS THIS WAR CONTINUES.

[00:20:11]WE SAW THE INITIAL CRACKS IN PPI TODAY, CPI YESTERDAY, ABOUT JUST HOW BAD THIS MIGHT GET, BIGGEST SURGE SINCE 2022, AND A MARKET THAT IS BETTING THAT A RATE HIKE IS MORE LIKELY THAN A CUT. DOES HE NEED TO STAY AWAY FROM TRUTH SOCIAL?

[00:20:25]>> I WOULD AVOID PUTTING ANY MONEY ON A RATE HIKE.

[00:20:27]AND I THINK THAT WILL GO AWAY BECAUSE THE MARKETS GO UP AND DOWN BASED ON WHAT WE SEE ON A DAY-TO-DAY BASIS.

[00:20:34]IT'S NOT GOING TO BE POSSIBLE FOR HIM TO CUT INTEREST RATES ANY TIME SOON, NOT WITH INFLATION GOING UP.

[00:20:40]THE REST OF THE OPEN MARKET COMMITTEE WILL NOT GO ALONG WITH IT AND THE MARKETS WILL NOT GO ALONG WITH IT.

[00:20:46]SO, IT IS GOING TO BE A FEW MEETINGS BEFORE WE KNOW WHETHER THIS IS GOING TO CONTINUE. MOST ANALYSTS THINK THAT THE STRAIT OF HORMUZ BEING CLOSED EVEN IF THE WAR ENDED TOMORROW WOULD HAVE INFLATIONARY IMPACTS UNTIL THE FALL.

[00:21:03]SO IT MAY BE SEPTEMBER OR OCTOBER BEFORE THERE'S EVEN A SIGN THAT INFLATION IS REALLY GOING DOWN AND UNTIL THEN, THEY CANNOT EVEN MAKE THE CASE FOR IT. JOE: WHAT IS THE FIRST THING HE DOES WHEN HE GETS IN THE BUILDING?

[00:21:14]>> SAYS HELLO TO THE DOORMAN? [LAUGHTER] THERE IS NO DOORMAN SO HE CANNOT DO THAT.

[00:21:20]I THINK WHAT HE WILL END UP DOING IS OBVIOUSLY HE KNOWS THE PEOPLE THERE. HE IS GOING TO GET BACK IN TOUCH WITH THEM AND SOUND EVERYBODY OUT.

[00:21:31]HE'S GOT A NUMBER OF REFORMS TO THE FED PROCESS THAT HE CAN WORK ON LIKELY DOT PLOT AND THINGS LIKE THAT WHERE HE CAN START TALKING TO PEOPLE ABOUT -- HE CAN START TALKING ABOUT LOWERING THE BALANCE SHEET. IS GOING TO TAKE A LONG TIME TO GET THROUGH. THERE ARE THINGS HE CAN WORK ON IN THE MEANTIME. WE WILL BE WATCHING THE FIRST MEETING BECAUSE IT WILL BE LESS ABOUT MONETARY POLICY SINCE THEY CANNOT DO ANYTHING. IT WILL BE ABOUT KEVIN WARSH.

[00:21:54]DOES HE CHANGE HIS STATEMENT? DOES HE HAVE ANY IS CONFERENCE?

[00:21:56]WE DON'T KNOW YET. JOE: JAY POWELL WILL BE AT THAT MEETING, RIGHT?

[00:22:02]>> JAY POWELL WILL BE AT THAT MEETING BUT I'M SURE HE WILL DO HIS BEST TO MAKE SURE THAT WE DO NOT SEE HIM. JOE: UNDERSTOOD.

[00:22:09]GREAT TO HAVE YOU, AS ALWAYS, AND WASHINGTON, BLOOMBERG'S MICHAEL MCKEE HERE ON "BALANCE OF POWER."

[00:22:16]I SPOKE A SHORT TIME AGO WITH REPUBLICAN SENATOR DAVE MCCORMICK OF PENNSYLVANIA WHO CHAIRS FOR THE SENATE BANKING COMMITTEE AND ALSO THE MEN WHO INTRODUCED KEVIN WARSH AND HIS CONFIRMATION HEARING. I ASKED HIM THE SAME THING I JUST ASKED MICHAEL, WHAT WILL BE THE CHAIR'S FIRST ACTION ONCE HE GETS TO THE BUILDING? LET'S LISTEN.

[00:22:31]>> HE'S A GUY WHO UNDERSTANDS FINANCIAL MARKETS.

[00:22:35]HE'S HAD EXPERIENCE AND UNDERSTANDS THE FED.

[00:22:39]HE'S GOT A REFORMER'S HEART AND MINDSET AND IT WILL NEED REFORM.

[00:22:43]IF HE HAS SAID -- AND HE HAS SAID, WHICH I THOUGHT WAS INTERESTING, HOW HE WANTS TO RUN THE FED.

[00:22:48]IT'S GOING TO BE MESSY. HE WANTS FAMILY MEETINGS WHERE THEY SIT AND TALK AND DEBATE HOW THEY HANDLE IT.

[00:22:53]HE'S GOT A VERY CLEAR VIEW ON THE REFORMS THAT ARE NEEDED, SHRINKING THE BALANCE SHEET. ALSO A FIRM VIEW THAT THIS A.I.

[00:23:00]REVOLUTION WE ARE EXPERIENCING IS GOING TO INCREASE PRODUCTIVITY AND THE DEFLATIONARY.

[00:23:05]GETTING THOSE VIEWS AND DEBATING THOSE VIEWS WITH OTHER MEMBERS OF THE FED WILL BE THE STARTING POINT.

[00:23:10]TAKING STOCK OF WHERE WE ARE AND BEGINNING TO LAY THE PREDICATE FOR WHERE THE FUTURE. AND DOING IT AT A VERY THOUGHTFUL, CLEARLY COMMUNICATED WAY. JOE: THAT REFORMER HAS INDICATED HE WANTS TO SHRINK THE BALANCE SHEET AND ALSO CHANGE THE METRICS FOR THE WAY WE LOOK AT INFLATION AND MAKE INTEREST RATE DECISIONS, WILL WE HAVE CONSENSUS?

[00:23:30]>> THAT'S WHAT I THOUGHT WAS GRADED BY HIS TESTIMONY, HE'S SOMEONE WHO WILL BE ABLE TO FORGE A, NOT START WITH CONSENSUS. THEY WILL HAVE TO REVIEW THE DATA TOGETHER. THEY WILL HAVE TO THINK ABOUT DATA DIFFERENTLY. THEY WILL HAVE TO TAKE INTO ACCOUNT THAT WE ARE IN THE MIDDLE OF A -- SORT OF A VERY ATYPICAL SITUATION WITH THE CONFLICT IN IRAN.

[00:23:50]AND I THINK HE WILL BUILD CONSENSUS OVER TIME.

[00:23:54]WITH A FED THAT HAS NOT HAD THAT KIND OF STRONG LEADERSHIP AND ALSO HAS NOT EMBRACED THE NOTION THAT THEY NEED TO HAVE THAT KIND OF OPEN DEBATE. JOE: LET'S TALK ABOUT THAT ATYPICAL SITUATION.

[00:24:06]HE IS COMING INTO A LANDSCAPE THAT'S NOT VERY FRIENDLY TO THE IDEA OF INTEREST RATE CUTS. WHEN YOU LOOK AT THE PPI TODAY AND CPI YESTERDAY, IT IS NOT ONLY IMPACTING ENERGY -- I SEE THAT YOU ARE PAYING OVER $4.60 A GALLON IN YOUR STATE, HIGHER THAN THE NATIONAL AVERAGE. IT IS STARTING TO CREEP INTO THE CORE. WILL HE EFFECTIVELY BE HANDCUFFED?

[00:24:25]WHEN IT COMES TO RATES, AS LONG AS THE WAR IS UNDERWAY?

[00:24:27]>> CERTAINLY THE FED WILL HAVE TO CONSIDER THE SHOCK UNDERWEIGHT. IT IS CLEARLY HAVING AN IMPACT IN PENNSYLVANIA. TALK ABOUT FAMILIES LIVING PAYCHECK-TO-PAYCHECK, DEALING WITH A ONE DOLLAR 20 CENTS INCREASE IN GAS PRICES, FOLKS ARE LIVING ON THE EDGE. IT IS DEFINITELY A BIG DEAL.

[00:24:46]WE HAVE SAID THAT WE WILL FIND AN END TO THIS CONFLICT RELATIVELY QUICKLY AND WHEN WE DO I THINK YOU ARE GOING TO SEE ENERGY MARKETS ADJUST RELATIVELY QUICKLY AS WELL.

[00:24:56]I THINK THEY WILL HAVE TO LOOK AT THIS AS A MOMENT WHICH ULTIMATELY THEY ARE GOING TO HAVE TO LOOK PAST THIS.

[00:25:04]BUT IT'S DEFINITELY PUTTING ALL SORTS OF COMPLEXITY INTO THE MOMENT IN TERMS OF THE FED. JOE: YOU KNOW PRESIDENT TRUMP IS A BUSINESSMAN, WILL HE GIVE THE CHAIR'S SPACE TO FIGURE THAT OUT IN HIS FIRST COUPLE OF MONTHS OR MEETINGS?

[00:25:17]>> I THINK PRESIDENT TRUMP PICKED A GUY THAT HE TRUSTS AND HE PICKED A GUY THAT HE THINKS HAS THE ABILITY, AND I THINK HE IS RIGHT, TO DRIVE THE FED AND THE RIGHT DIRECTION OVER TIME.

[00:25:30]I DON'T THINK HE IS GOING TO BE GIVEN A PERFORMANCE BE ON KEVIN WARSH IN THE FIRST 60 DAYS.. I THINK HE KNOWS THAT THE CHAIRMAN WILL HAVE TO GET HIS BEARINGS AND BEGIN TO BUILD CONSENSUS HE NEEDS. JOE: I'M SURE THE CHAIR WOULD LIKE TO HEAR YOU SAY THAT. HOW ABOUT THE BUILDING RENOVATIONS? THIS KEVIN WARSH CHANGE ANYTHING THAT'S ALREADY UNDERWAY AT THE BUILDING?

[00:25:49]>> WHAT I UNDERSTOOD ON THIS IS, IT LOOKS CLEAR THAT THERE WAS AN ENORMOUS AMOUNT OF SPENDING, PROBABLY OVERSPENDING, EXCESSIVE, AND WE NEED TO MAKE SURE THAT THAT WAS HANDLED APPROPRIATELY. IT LOOKS LIKE IT WAS MISMANAGED.

[00:26:04]THAT WAS NOT THE MEANS OR THE JUSTIFICATION FOR CRIMINAL PROSECUTION. THE IG IS LOOKING AT IT BE OVER THE SENATE BANKING COMMITTEE SHOULD PLAY A ROLE IN OVERSIGHT.

[00:26:15]THAT WILL NOT BE THE FOCUS OF THE NEW FED CHAIR, THE FED CHAIR WILL FOCUS ON THE DYNAMICS OF THIS ECONOMY, THIS REVOLUTION UNDERWAY WITH A.I. AND ENERGY AND WHAT THAT MEANS FOR THE MEDIUM-TERM AND LONG-TERM, COMBINED WITH THE NEAR-TERM SHOCK WE HAVE FROM THE CONFLICT IN IRAN AND HOW TO NAVIGATE THROUGH THOSE TWO THINGS AT THE SAME TIME.

[00:26:35]AND IN AN ECONOMY THAT HAS MANY THINGS AT A VERY STRONG.

[00:26:37]THE CHALLENGES YOU MENTIONED, BUT YOU LOOK AT THE JOB NUMBERS, GDP, AND DESPITE THE GOVERNMENT SHUTDOWN AND ALL THOSE THINGS, WE HAVE AN ECONOMY THAT IS MOVING THROUGH THIS. I WAS JUST IN PENNSYLVANIA LAST WEEK. I VISITED A NUMBER OF THESE PROJECTS WE ARE YOU'VE GOT THESE HUGE INVESTMENTS -- JOE: DATA CENTER PROJECTS.

[00:26:59]>> FROM COAL TO NATURAL GAS, I MEAN, ACROSS THE COMMONWEALTH OF PENNSYLVANIA, WHETHER IT IS THE ACQUISITION OR THE SHIPYARD OR JAPAN INVESTING IN WESTINGHOUSE OR AWS INVESTING IN BIG DATA CENTERS, WE'VE GOT A LOT OF INBOUND INVESTMENT AND YOU ARE STARTING TO SEE THAT IMPACT JOBS AND THE ECONOMY IN A POSITIVE WAY. JOE: COULD YOU HELP THE PEOPLE IN YOUR STATE AND HELP THE FED ALONG WITH ITS JOB BY SUSPENDING THE FEDERAL GAS JOB BY SUSPENDING THE FEDERAL GAS TAX?

[00:27:29]WOULD THAT MAKE A DIFFERENCE? SEN. MCCORMICK: YEAH.

[00:27:32]I THINK GIVEN UP WHEN I MADE EARLIER ABOUT PEOPLE LIVING PAYCHECK-TO-PAYCHECK, I WOULD BE SUPPORTIVE OF THAT IDEA.

[00:27:37]IF PROBLEMATIC IN SOME WAYS, BECAUSE IT WILL TAKE AWAY FUNDING. JOE: AND THEN HAVE A DEBATE ABOUT REINSTATING THE GAS TAX. SEN. MCCORMICK: ABSOLUTELY.

[00:27:52]AS WE ACCEPT IAR -- EXIT IRAN AND ENERGY PRICES STABILIZE.

[00:27:57]I WOULD NOT WANT THIS TO BE ONE OF THOSE WASHINGTON THINGS THAT IS SUPPOSED TO BE TEMPORARY AND BECOMES PERMANENT. JOE: UNDERSTOOD. IF YOU'VE GOT STABLECOIN YIELDS WORKED OUT, TELL ME IF I'M WRONG, IF COMMUNITY BANKERS ARE HAPPY, THIS KEVIN WARSH SUPPORT WHAT IS IN THIS BILL?

[00:28:13]SEN. MCCORMICK: I'M NOT SURE EVERYBODY IS HAPPY.

[00:28:15]JOE: MAYBE NOBODY IS HAPPY. SEN. MCCORMICK: I THINK WE ARE IN A GOOD PLACE IT WILL BE A STRONG MARKUP.

[00:28:23]I THINK WE'VE RESOLVE THE STICKIEST ISSUE, THAT REWARDS ARE ACTIVITY-BASED BUT NOT REWARDS ON ANYTHING THAT LOOKS LIKE YOU ARE INTO DEPOSITS. JOE: UNDERSTOOD. SEN. MCCORMICK: THAT'S A COMPROMISE I THINK THAT MAKES SENSE, GIVES YOU THE ABILITY TO HAVE PROTECTION, AND AT THE SAME TIME, AN AVENUE TO ALSO BUILD UP THEIR STABLECOIN POSITION.

[00:28:43]I THINK WE ARE AT A GOOD SPOT. WE WILL SEE THE MARK OF TOMORROW. WE NEED TO GET THIS TO THE FLOOR AND GET IT BACK. THIS IS A BURGEONING INDUSTRY.

[00:28:53]IT IS CREATING JOBS IN PENNSYLVANIA AND BEING EMBRACED BY PEOPLE ACROSS THE U.S. WE NEED TO HAVE THIS INNOVATION CARE AT HOME.

[00:28:59]JOE: LAST WEEK -- PRESIDENT TRUMP IS IN CHINA RIGHT NOW. I THINK YOU KNOW I COUPLE OF PEOPLE WHO ARE ALONG FOR THE RIDE, CORPORATE AMERICA, AN EXECUTIVE CLOSE TO YOU, NOT TO MENTION FOLKS AT BLACK ROCK, BLACKSTONE, BOTH REPRESENTED. THIS IS YOUR WORLD, TRAVELING WITH THE PRESIDENT TO BEIJING. IS THIS A TRADE MISSION?

[00:29:18]DO YOU EXPECT ACTUAL DEALS TO BE ANNOUNCED, ON CHIPS OR ANYTHING ELSE? SEN. MCCORMICK: WELL, I THINK THERE ARE TWO BIG TOPICS.

[00:29:26]WE SHOULD NEVER LOSE SIGHT OF THE FACT THAT CHINA IS OUR PRIMARY ADVERSARY, AND THAT WE ARE IN A BATTLE FOR GLOBAL LEADERSHIP. THEY ARE SEEKING TO DISPLACE US AS THE GLOBAL SUPERPOWER. THAT IS THE CONTEXT.

[00:29:39]WITH THAT, I EMBRACE THE IDEA OF DIPLOMACY, TO MANAGE THAT RELATIONSHIP WELL.

[00:29:47]CHINA AND WE HAVE AN ALIGNMENT OF INTERESTS TO GET THIS RESOLVED. THEY ARE HIGHLY DEPENDENT ON IRAN FOR OIL. JOE: WILL THIS HELP US REOPEN THE STRAIT? SEN. MCCORMICK: I THINK THEY COULD.

[00:29:58]THEY ARE ALSO SUPPORTING WEAPONS AND CAPABILITY IN IRAN, BUT I THINK THERE IS AN OPPORTUNITY.

[00:30:03]THE SECOND THING I THINK WILL BE AI.

[00:30:09]THIS AI REVOLUTION IS MOVING AT A PACE -- JOE: YOU'VE GOT JENSEN ON THE P LANE. SEN. MCCORMICK: HOW ARE WE MANAGING THAT IN A RESPONSIBLE WAY?

[00:30:24]THERE WILL BE TRADE, TRADE AND INVESTMENT, A NUMBER OF THINGS, WHETHER SOYBEANS THAT AFFECTS PENNSYLVANIA FARMERS, CHINA LIVING UP TO THE COMMITMENTS THEY MADE, WHETHER IT IS RARE EARTH METALS. WE ARE HIGHLY DEPENDENT ON CHINA, 70%, 80% OF THE RARE EARTH MINERALS WE USE IN THE UNITED STATES COME FROM CHINA. WE NEED TO MAKE SURE WE HAVE A RECIPROCAL TRADE RELATIONSHIP. THAT IS NOT BEEN THE CASE FOR DECADES. I THINK PRESIDENT TRUMP REACHED THE TABLE WITH THAT. WE NEED TO MAKE SURE CHINA IS LIVING UP TO THE PART. AND IF IT IS, THERE'S OPPORTUNITIES FOR BOTH SIDES. JOE: REPUBLICAN SENATOR DAVE MCCORMICK OF PENNSYLVANIA SPEAKING WITH US ON CAPITOL HILL JUST HOURS AFTER KEVIN WARSH WAS CONFIRMED AS THE NEW CHAIR OF THE FEDERAL RESERVE. LET'S BRING IT BACK TO KAILEY NOW IN OUR WASHINGTON BUREAU.

[00:31:07]KAILEY: WE ARE HOURS AWAY FROM THE SUMMIT BETWEEN PRESIDENT TRUMP AND CHINA'S PRESIDENT XI JINPING THAT YOU WERE JUST DISCUSSING WITH SENATOR MCCORMICK. OF TROUBLE ASK XI TO OPEN UP CHINA AND DISCUSSED THE GLOBAL CONFLICT IN THE MIDDLE EAST FOR JOINING US AS GARY LOCKE, FORMER U.S. AMBASSADOR TO CHINA.

[00:31:32]SIR, WELCOME BACK TO BLOOMBERG TV AND RADIO.

[00:31:37]AS FORMER COMMERCE SECRETARY, YOU ARE UNIQUELY POSITIONED TO ANSWER THIS QUESTION, IS THIS TRIP ABOUT DIPLOMACY OR BUSINESS? GARY: THANKS SO MUCH.

[00:31:48]WE SHOULD NOT HAVE HIGH EXPECTATIONS ABOUT THE FUNDAMENTAL ISSUES SEPARATING THE UNITED STATES AND CHINA, THEIR ECONOMIC POLICIES, SUBSIDIZATION OF THEIR BUSINESSES, AND FLOODING WORLD MARKETS WITH LOW-COST GOODS.

[00:32:00]I THINK THIS IS REALLY GOING TO BE A TRIP OF TRANSACTION.

[00:32:04]PRESIDENT TRUMP VERY BADLY NEEDS, APPROACHING THE MIDTERM ELECTIONS, TO HAVE A HEADLINE SAYING THAT CHINA IS GOING TO BUY SOYBEANS, BOEING AIRPLANES, AND THESE, AND ALL OF THESE CEO'S ON THE TRIP TO REDUCE THE BARRIERS THEY FACE IN CHINA.

[00:32:26]THERE IS A TRUCE ON THE TRADE WAR, BUT A LOT OF THE TARIFFS THAT AMERICA HAS A POST HAS BEEN INVALIDATED BY THE COURTS.

[00:32:36]BUT CHINA STILL HAS TARIFFS, RETALIATORY TARIFFS ON U.S.

[00:32:38]GOODS, WHETHER TESLA'S AND THINGS LIKE THAT.

[00:32:41]I THINK A LOT OF AMERICAN CEO'S WANT TO SEE MORE ACCESS INTO CHINA, REDUCTION OF SOME OF THESE BARRIERS.

[00:32:49]AND CHINA WILL WANT TO SAY OK, WE WILL BUY YOUR SOYBEANS AND BOEING AIRPLANES, BUT YOU'VE GOT TO LET US BUY SOME MORE OF THESE ADVANCED CHIPS, EVEN THOUGH CHINA, IN A FEW YEARS, WILL NOT BE THESE ADVANCED TIPS FROM NVIDIA OR ANY OF OUR HIGH-TECH COMPANIES. KAILEY: WELL, ON THAT POINT, HOW TELLING WAS IT TO YOU, SIR, THAT JENSEN HUANG JOINTLY PRESIDENT EN ROUTE, HOPPED ON A PLANE IN ANCHORAGE?

[00:33:14]HE WILL BE IN THESE MEETINGS. GARY: WELL, I THINK THAT'S AN INDICATION THAT PRESIDENT TRUMP HAS PERHAPS RELAXED SOME OF THE RESTRICTIONS ON THESE ADVANCED CHIPS THAT ARE BEING USED IN ARTIFICIAL INTELLIGENCE.

[00:33:30]AND, AGAIN, CHINA WILL SAY, OK, WE ARE BIDING YOUR STUFF, YOU'VE GOT TO LET US HAVE SOME OF THE THINGS WE NEED FOR OUR DOMESTIC CONSUMPTION. KAILEY: WELL, ON THE NOTION OF MAKING DEALS TO BUY THINGS, WE HEARD THAT CHINA IS GOING TO BUY MORE U.S. SOYBEANS STORY BEFORE. HOW DO YOU GUARANTEE THE FOLLOW-THROUGH, AMBASSADOR? GARY: WELL, THEY ACTUALLY MADE AN AGREEMENT A FEW MONTHS AGO IN THE MEETING BETWEEN THE TWO LEADERS IN ASIA, AND SO FAR, CHINA HAS FOLLOWED THROUGH ON ITS COMMITMENTS, BUT I'M SURE THAT BOTH SIDES REALIZED THAT FOLLOWING THROUGH ON COMMITMENTS WILL BE VERY KEY TO AVOID AN ESCALATION OF THE TRADE WAR. KAILEY: WELL, AND WE SEE IN THE TRADE WAR FILTER INTO THINGS LIKE EXPORT CONTROLS. THE U.S. OBVIOUSLY DOING THAT WHEN IT COMES TO CHIPS. WE'VE ALSO SEEN CHINA PUT INTO PLACE RESTRICTIONS ON RARE EARTH, CRITICAL MINERAL EXPORTS, PROMISING, OF COURSE, WITH THE DÉTENTE IN PLACE TO ALLOW MORE ACCESS TO THOSE. THAT IS STILL A LEVER THAT CHINA HAS AN ABILITY TO PULL, IS IT NOT? HOW DOES THE U.S.

[00:34:38]INSULATE ITSELF AGAINST THAT PARTICULAR PROBLEM, KNOWING HOW KEY IT IS TO SO MUCH OF THE TECHNOLOGY THAT WE ARE TALKING ABOUT? GARY: WELL, CERTAINLY THE UNITED STATES IS DEPENDENT ON THE RARE EARTH AND CRITICAL MINERALS COMING FROM CHINA. CHINA PROCESSES ALMOST 99% OF THE STUFF WE NEED FOR OUR PATRIOT MISSILES, OUR CRUISE MISSILES, OUR JET FIGHTERS, AND EVEN FOR AUTOMOBILES.

[00:34:59]WHILE THE UNITED STATES IS REALLY TRYING TO DIVERSIFY AND LOOK AT OTHER SOURCES OF THESE RARE EARTH AND MINERALS, THAT WILL NOT HAPPEN FOR MANY, MANY MORE YEARS.

[00:35:10]WE ARE REALLY AT THE MERCY OF CHINA IN THE MEANTIME.

[00:35:11]THAT IS WHY CHINA HAS SOMEWHAT OF AN ACE CARD HANGING OVER THE UNITED STATES, SO THE UNITED STATES AND PRESIDENT TRUMP CANNOT GO TOO FAR IN TERMS OF RESTRICTING HIGH-TECH GOODS GOING INTO CHINA, BECAUSE CHINA CAN TURN RIGHT AROUND AND SAY, YOU ARE RESTRICTING THESE HIGH-TECH GOODS INTO CHINA ON THE GROUNDS OF NATIONAL SECURITY, ON THE GROUNDS THAT MAY BE THESE HIGH-TECH SEMICONDUCTORS AND EQUIPMENT COULD BE USED BY THE CHINESE MILITARY.

[00:35:38]WELL, CHINA COULD TURN AROUND AND ACTUALLY COPY THE UNITED STATES WITH THESE EXPORT CONTROLS AND SAY, WELL, THESE RARE EARTHS AND CRITICAL MINERALS ARE BEING USED IN JET FIGHTERS, CRUISE MISSILES, PATRIOT MISSILES, AND THINGS LIKE THAT, AND SATELLITES, WHICH COULD BE USED AGAINST US BY THE U.S. MILITARY. BOTH SIDES HAVE TO BE CAREFUL THAT THEY DO NOT RAMP UP THESE CONTROLS TOO FAR. KAILEY: WELL, OF COURSE, AMBASSADOR, THIS MEETING, WHILE THERE ARE ALL OF THESE TRADE-ORIENTED ISSUES TO DISCUSS, IT WILL BE SOMEWHAT OVERSHADOWED BY THE FACT THAT THERE IS STILL A CLOSURE OF THE STRAIT OF HORMUZ, THE WATERWAY WHICH IS STILL THE ENERGY CONDUIT OF THE WORLD, BUT FOR CHINA TO, THE BIGGEST BUYER OF IRANIAN OIL THAT RELIES ON THE STRAITS FOR EXPORTS. WE HEARD IN THE DAYS LEADING UP TO THIS SOMETHING THAT XI JINPING WILL NOT BE TO INCENTIVIZED TO GET INVOLVED IN AN ATTEMPT TO REOPEN THE STRAIT OF HORMUZ, BUT WHEN IS THE TURNING POINT FOR CHINA, EVEN WITH ALL THE OIL STORAGE IT WAS ABLE TO BUILD UP, WHERE THERE'S GOING TO BE TOO MUCH OF AN ECONOMIC THREAT FOR THEM TO CONTINUE TO STAY ON THE SIDELINES? GARY: WELL, THE REALITY IS THAT CHINA ONLY GETS ABOUT 6% OF ITS TOTAL ENERGY SUPPLY FROM THE GULF STATES AND FROM IRAN.

[00:36:52]YES, THEY ARE THE MAJOR PURCHASER OF OIL FROM IRAN, BUT STILL MAKES A VERY MINUTE PORTION OF THEIR ENERGY SUPPLY, LESS THAN 6% OF THEIR ENTIRE ENERGY SUPPLY COMES FROM EITHER THE GULF STATES OR THE COUNTRY OF IRAN.

[00:37:07]THEY ARE SO HEAVILY DEPENDENT ON COAL.

[00:37:11]BUT THEY ARE CONCERNED ABOUT THE IMPACT OF THE BLOCKADE AND THE CLOSURE OF THE STRAITS, IN TERMS OF THE IMPACT ON THE ECONOMY OF THE OTHER COUNTRIES AROUND THE WORLD, BECAUSE OF THE ECONOMIES OF THOSE COUNTRIES GO INTO A TAILSPIN, BECAUSE OF THE LACK OF OIL AND NATURAL GAS, THAT WILL AFFECT THE BUYING POWER OF THOSE COUNTRIES IN TERMS OF PURCHASING GOODS MADE IN CHINA. SO, CHINA HAS AN INTEREST IN MAKING SURE THAT THE STRAIT AND THE BLOCKADE, ABOUT THIS STRAIT IS OPENED UP IN THE BLOCKADE ENDS.

[00:37:46]BUT CHA IRAN IS ALSO A CLOSE ALLY OF CHINA, SO IT WILL CONTINUE TO SAY THE WAR SHOULD INCOME OF THE STRAIT SHOULD OPEN UP, AND HOSTILE TO THESE -- AND HOSTILITY SHOULD CEASE, BUT WILL NOT PRESSURE IRAN VERY HARD. KAILEY:WELL, OF COURSE, THE CONFLICT WITH IRAN HAS LED THE U.S.

[00:38:08]TO DRAWING DOWN SIGNIFICANT PORTIONS OF OUR MUNITIONS OF STOCKPILES. THERE ARE ONGOING QUESTIONS AS TO WHAT THAT MEANS ABOUT OUR CAPABILITIES AND OTHER THEATERS, SHOULD THE NEED ARISE, INCLUDING IN THE PACIFIC, WHICH RAISES THE QUESTION OF TAI WANTED MR. AMBASSADOR, HAVING DEALT IN DIPLOMACY WITH CHINA IN PARTICULAR, YOU KNOW HOW IMPORTANT THE LANGUAGE AROUND TAIWAN IS. I WONDER HOW GREAT OF AN OPPORTUNITY THERE IS FOR A MISSTEP FROM PRESIDENT TRUMP IN THAT REGARD. GARY: WELL, I'M SURE HIS SECURITY ADVISERS WILL BE ADVISING HIM AND WATCHING HIM VERY CAREFULLY AND GIVING HIM INPUT IN TERMS OF THE LANGUAGE OF THE FINAL COMMUNICATIONS THAT COME OUT OF THE SUMMIT.

[00:38:44]BUT I THINK THAT PRESIDENT XI WILL BE TRYING TO ENCOURAGE PRESIDENT TRUMP TO SLOW DOWN THE NUMBER OF ARMS BEING SOLD TO CHINA OR DECREASE THE AMOUNT OF ARMS BEING SOLD TO CHINA, AS A WAY TO REALLY FORTIFIED CHINA'S STANCE THAT TAIWAN IS REALLY A PART OF THE MAINLAND. KAILEY: ALL RIGHT, FORMER AMBASSADOR TO CHINA AND FORMER COMMERCE SECRETARY GARY LOCKE, THANK YOU SO MUCH FOR JOINING US.

[00:39:13]COMING UP, GEORGIA GOVERNOR BRIAN KEMP IS CALLING FOR A SPECIAL SESSION TO CONSIDER REDRAWING THE STATE'S ELECTORAL MAP. WE WILL BRING YOU THE DETAILS NEXT ON "BALANCE OF POWER," ON BLOOMBERG TV AND RADIO.

[00:39:44]JOE: IT'S "BALANCE OF POWER" ON BLOOMBERG RADIO AND TV.

[00:40:01]I'M JOE MATHIEU ALONGSIDE KAILEY LEINZ IN WASHINGTON.

[00:40:04]PRESIDENT TRUMP TOUCHING DOWN IN BEIJING, SITTING DOWN FOR A SUMMIT TOMORROW WITH XI JINPING.

[00:40:10]WE WILL SEND IT BACK TO THE BUREAU RIGHT NOW WITH KAILEY LEINZ. KAILEY: YEAH.

[00:40:16]JOE, CERTAINLY THERE'S A LOT WE ARE FOLLOWING TONIGHT, INCLUDING THESE STORIES IN THIS EVENING'S POWER BRIEF.

[00:40:22]OF TWO LAWMAKERS HAVE WRITTEN LETTERS TO TECHNOLOGY FIRMS FROM ASKING HOW THEIR LARGE LANGUAGE MODELS WILL HANDLE POLITICAL NEWS AND BIAS. THE LETTER WAS WRITTEN BY REPUBLICAN CONGRESSMAN MIKE WALLER OF NEW YORK AND JOSH GOTTHEIMER OF NEW JERSEY.

[00:40:41]IT WAS TO MICROSOFT, GOOGLE, META, ANTHROPIC, X, OPENAI, AND PERPLEXITY.

[00:40:53]IN NEBRASKA'S SECOND DISTRICT, POLITICAL ACTIVIST DENISE POWELL CURRENTLY HAS A SLIGHT LEAD OVER JOSH CAVANAUGH.

[00:41:01]THE SEAT IN A DISTRICT KAMALA HARRIS WON A 2024, SEEN AS A POTENTIAL PICKUP OPPORTUNITY FOR DEMOCRATS, CURRENTLY BEING HELD BY REPUBLICAN CONGRESSMAN DON BACON, WHO IS SET TO RETIRE AT THE END OF THIS TERM.

[00:41:20]REPUBLICAN HARDING, ENDORSED BY TRUNK, RAN UNOPPOSED.

[00:41:22]GOVERNOR BRIAN KEMP IN GEORGIA CALLED FOR A SPECIAL LEGISLATIVE SESSION TO REDRAW THE STATE'S CONGRESSIONAL LINE THE HEAD OF THE 2028 ELECTION.

[00:41:28]KEMP SAID THE SPECIAL ELECTION SET FOR JUNE 18.

[00:41:32]GEORGIA IS NOW THE LATEST ON A LONG LIST OF STATES PURSUING REDISTRICTING EFFORTS WITH CONTROL OF THE HOUSE OF REPRESENTATIVES IN THE BALANCE. NEXT WEEK, [SPEAKING ANOTHER LANGUAGE] WILL BE LIVE -- NEXT WEEK "BALANCE OF POWER" WILL BE LIVE FROM GEORGIA COVERING THE PRIMARY. AHEAD OF THAT IS OUR POLITICAL PANEL, MEGAN HAYES, DEMOCRATIC STRATEGIST AND SPECIAL ADVISOR TO JOE BIDEN, AND ALSO THE PRESIDENT AND CEO OF THE REPUBLICAN MAIN STREET PARTNERSHIP.

[00:42:05]A NEW STATE PURSUING THIS EFFORT EACH AND EVERY DAY.

[00:42:08]GEORGIA IS GOING TO GO AHEAD FOR THE NEXT CYCLE.

[00:42:10]SOUTH CAROLINA APPARENTLY ALSO GOING TO BE SITTING THIS CYCLE OUT. ARE WE DONE HERE, OR IS THERE MORE TO COME?

[00:42:19]>> I THINK WE ARE DONE AFTER THIS, AND I THINK ACTUALLY REPUBLICANS WILL BE IN THE NET POSITIVE WHEN ALL IS SAID AND DONE, WHICH AFTER VIRGINIA WE WERE NOT SURE.

[00:42:28]OBVIOUSLY THIS WAS A BIG VICTORY FOR REPUBLICANS AND ALSO MAIN STREET. KAILEY: WHEN WE CONSIDER NET POSITIVE FOR REPUBLICANS, THAT'S ASSUMING THE REDRAWN MAPS, WHICH ARE IN REPUBLICAN OR WOULD BE R+X DISTRICTS, MEGHAN, ARE ABLE TO STAY IN REPUBLICAN HANDS THEM EVEN AS THEY ARE BEING WATERED DOWN AND MORE DEMOCRATIC VOTERS ARE BEING ADDED TO THEM.

[00:42:52]THOSE VOTERS HAVE TO GO SOMEWHERE, NO? MEGHAN: IT'S NOT THAT ANYTHING IS A GUARANTEE.

[00:42:56]YOU CAN REDISTRICT HOWEVER YOU WANT.

[00:43:00]THEY NORMALLY VOTE ONE WAY ONE CYCLE AND THE NEXT CYCLE TO GO BACK TO THE WAY THEY WERE DRAWN PREVIOUSLY.

[00:43:07]I ALSO DON'T THINK VOTERS LIKE HAVING THEIR AGENCY TAKEN AWAY FROM THEM, BOTH DEMOCRATS AND REPUBLICANS FIT IN VIRGINIA, I THINK DEMOCRATS ARE GOING TO FLIP TWO SEATS.

[00:43:17]TEXAS, I THINK THEY ARE GROSSLY CALCULATING REDISTRICTING.

[00:43:19]LATINOS WHO WENT HEAVILY FOR DONALD TRUMP ARE NOT GOING TO DO SO AGAIN IN THE 2026 CYCLE. MARYLAND IS THINKING ABOUT REDISTRICTING. I'M NOT SURE IF IT IS 100% OVER IN THE SOUTH, BUT I'M NOT SURE IT ALL WILL BE OVER.

[00:43:33]I DON'T THINK IT SERVES THE VOTERS WELCOME AND IT IS VERY CONFUSING TO PEOPLE. KAILEY: CERTAINLY IT IS CONFUSING TO TRY TO FOLLOW THE HEADLINES.

[00:43:43]THERE'S A LOT ELSE WE HAVE TO FOLLOW, PLAYING INTO THE POLITICS AROUND THESE MIDTERMS. YOU LOOK AT INFLATION DATA, THE LAST TWO DAYS, SARAH, THAT CAME IN HOT, UNDERSCORING SOME OF THE PRICE PRESSURES THAT AMERICANS ARE EXPERIENCING IN THE AFFORDABILITY CHALLENGES. HOW MUCH DOES THAT AFFORDABILITY CHALLENGE ERODE REPUBLICANS ABILITY TO RETAIN THE HOUSE WITH DRAWN CONGRESSIONAL DISTRICTS IN YOUR FAVOR? SARAH: IT'S A NONISSUE, EXCEPT IN ONE STATE WHERE THERE'S A LOT OF FRAUD GOING ON. WE ALL KNOW THAT STATE.

[00:44:15]MINNESOTA, FRAUD IS NUMBER ONE. OTHER THAN THAT COME AFFORDABILITY IS THE KEY ISSUE. REPUBLICANS, WE HAVE TIME.

[00:44:24]THERE'S THE WAR IN IRAN, THE GAS PRICES.

[00:44:27]WE HOPE THAT WILL COME TO A CONCLUSION SHORTLY, AND GAS PRICES WOULD COME BACK DOWN, BECAUSE THAT IS REALLY WHAT IS DRIVING THE INFLATION NUMBER. KAILEY: HOW MUCH IS "SOME TIME," AS THE MIDTERMS COME CLOSER SARAH: PROBABLY AROUND JULY 4, AS PEOPLE MAKE FLIGHT RESERVATIONS THEM ARE DRIVING THEIR CARS.

[00:44:49]WE NEED TO DO SOMETHING WITH THE PRICE OF GAS, WHICH IS WHY THE GAS TAX POTENTIALLY CAME OFF.

[00:44:54]KAILEY: PRESIDENT TRUMP SAID HE WOULD LIKE TO SEE A FEDERAL GAS TAX HOLIDAY.

[00:45:00]THIS IS SOMETHING PRESIDENT BIDEN PUSH FOR COMMODE THE LAST TIME WE WERE EXPERIENCING HIGH PRICES AND INFLATION PRESSURES LIKE THIS. IS THIS SMART POLITICS? MEGHAN: SURE. HOW ABOUT YOU OPEN THE STRAIGHT, AND THE GAS PRICES MIGHT COME DOWN QUICKER? IF WE ENDED THIS CONFLICT THAT WAS A WAR OF CHOICE. I THINK THERE ARE OTHER THINGS WE COULD BE DOING BESIDES THE GAS TAX.

[00:45:22]WHATEVER WILL GIVE RELIEF TO THE AMERICAN PEOPLE.

[00:45:24]I DON'T KNOW IF THE AMERICAN PEOPLE'S MINDS AREN'T MADE UP, WHO CAUSED THIS PROBLEM, AND I THINK THE AMERICAN PEOPLE ARE GOING TO BLAME THE REPUBLICANS BECAUSE OF DONALD TRUMP. KAILEY: WELL, IT MIGHT BE HARD FOR HIM A REPUBLICAN TO VOTE AGAINST THIS IF IT COMES TO THE FLOOR, SARAH, A GAS TAX HOLIDAY, THAT IS. IS THAT YOUR EXPECTATION THAT THIS WOULD ULTIMATELY BECOME REALITY?

[00:45:44]BECAUSE IT NEVER HAS BEFORE AT FEDERAL LEVEL. SARAH: IT NEVER HAS, BUT THIS TIME A VERY WELL COULD BE, AND IT COULD BE DONE IN A BIPARTISAN WAY, WHICH WOULD BE NICE FOR A CHANGE. MOST OF THE REPUBLICAN MAIN STREET PARTNERS WOULD SUPPORT THIS.

[00:46:00]KAILEY: IT DOES NOT SEEM LIKE SPEAKER JOHNSON OR SENATE MINORITY LEADER JOHN DUNE SUPER ENTHUSIASTIC -- THUNE ARE SUPER ENTHUSIASTIC ABOUT THIS. SARAH: THE MANY, THE GENTLEMAN SITTING IN CHINA RIGHT NOW, WHEN HE RETURNS, COULD MAKE A FEW PHONE CALLS. KAILEY: THE GENTLEMAN IN CHINA, OF COURSE, IS THE PRESIDENT.

[00:46:24]HE HAS A LAUNDRY LIST OF CORPORATE EXECUTIVES WHO ARE JOINING HIM. I WONDER HOW YOU READ INTO THAT, MEGHAN, OBVIOUSLY YOU'VE BEEN INVOLVED IN MESSAGING THE WHITE HOUSE AROUND SCRIPTS LIKE THIS BEFORE.

[00:46:38]WHAT MESSAGE IS HE SENDING? MEGHAN: EXTREME ECONOMIC IMPACT HERE, AND THEY HAVE A LARGE SHAKE AND DOING BUSINESS WITH CHINA AT A FAVORABLE LEVEL.

[00:46:49]I JUST THINK BETWEEN AUTOS AND SEMICONDUCTORS AND CHIPS, ALL OF THESE THINGS THAT CHINA PLAYS AN IMPACT IN, I THINK IT'S SHOWING A MEASURE OF STRENGTH THAT THE UNITED STATES HAS A HIGH ECONOMIC INVESTMENT IN CHINA, AND THAT THEY NEED TO PLAY BALL. KAILEY: WELL, WE ARE TALKING ABOUT AN ATTEMPT AT MAKING DEALS HERE, SARAH, IS THIS APPEALING ON CAPITOL HILL, THAT WE WANT TO BE DOING MORE BUSINESS WITH CHINA? I HEAR AN AWFUL LOT FROM LAWMAKERS ABOUT THE COMPETITION AND HOW THEY ARE OUR TOP ADVERSARY.

[00:47:16]IS THAT NECESSARILY SOMETHING WE WANT TO ATTRACT MORE MONEY INTO THE UNITED STATES? SARAH: IT DEPENDS TO WHOM YOU SPEAK WITH. OBVIOUSLY THOSE WHO LIVE IN RURAL AREAS, FARMING IS IMPORTANT.

[00:47:27]WE NEED THEM TO BE BUYING OUR SOYBEANS, TO DO WITH THE USE DO AS FAR AS THE AG SIDE. THERE'S MIXED EMOTIONS WITH CHINA ABOUT THE OTHER ISSUES, THAT HOPEFULLY THE MEN AND WOMEN WHO ARE THEY ARE CAN WORK THROUGH IT THIS WEEK.

[00:47:41]ESPECIALLY AROUND THE CHIPS ISSUE WE WILL SEE HOW IT ALL PLAYS OUT. KAILEY: ON THE CHIPS ISSUE, JENSEN HUANG WAS NOT ORIGINALLY ONE OF THE PEOPLE ACCOMPANYING THE PRESIDENT. HE DECIDED TO CHANGE THAT MID FLIGHT ON AIR FORCE ONE, HAD JENSEN MEET HIM IN ANCHORAGE ON THE REFUELING STOP, THEN HE JOINED THE TRIP.

[00:48:03]THAT'S NOT HOW USUALLY THINGS GO, ESPECIALLY WITH SUMMITS OF THIS CALIBER, HAVE YOU EVER SEEN ANYTHING LIKE THAT? MEGHAN: YOU'D BE SURPRISED, PEOPLE ALL THE TIME CHANGED THEIR SCHEDULE, THEY GET PRESSURE FROM COLLEAGUES AND OTHERS IN THEIR NETWORK, ONE PHONE CALL FROM ELON MUSK OR ANOTHER CEO ABOUT COMPETITION WHO WILL BE THERE. IT'S NOT UNUSUAL.

[00:48:22]IT'S A LITTLE SUSPECT THAT HE WAS NOT ON THE ORIGINAL LIST THAT WAS RELEASED FROM THE WHITE HOUSE, BUT I THINK IT IS IMPORTANT THAT HE GOES. CHINA HAS AN INCREDIBLE HANDLE ON THE RARE EARTH MINERALS, AND WE NEED TO HAVE THIS NEGOTIATION WITH THEM, AND HAVING THESE BUSINESS LEADERS THERE IS ONLY POSITIVE TO THE UNITED STATES. KAILEY: WELL, ASIDE FROM THE BUSINESS ASPECTS, THE GEOPOLITICAL FACTORS TO CONSIDER AS WELL. PRESIDENT BIDEN HAD A MISSPEAK OR TWO ON THE ISSUE OF TAIWAN THAT HAD TO BE CLEANED UP AFTER THE FACT. HOW DIFFICULT IS THAT LINE NOW TO WALK FOR PRESIDENT TRUMP AS HE GOES ON THE TRIP? MEGHAN: THESE CONVERSATIONS ARE A TACT. IT'S ALWAYS VERY TOUGH WHEN YOU GO ON THESE TRIPS, EVERY SINGLE STEP IS CHOREOGRAPHED WITH THE HOST GOVERNMENT TO SO IT IS EASY TO FOLLOW THE SCRIPT, BUT IT'S NOT ALWAYS EASY WHEN YOU GET IN FRONT OF THE PRESS AND FEEL MORE COMFORTABLE, AND ALL OF A SUDDEN, YOU SAY SOMETHING YOU SHOULD NOT HAVE SAID, BECAUSE WHEREVER YOU THINK IS A GOOD NEGOTIATING TACTIC. HE NEEDS TO FOLLOW THE LINE.

[00:49:22]A LOT OF OUR GEOPOLITICS HERE ARE GOING TO BE WATCHING VERY CAREFULLY. I THINK A LOT OF PEOPLE AND NATIONAL SECURITY ADVISOR ARE WORRIED ABOUT WHAT HE'S GOING TO SAY ABOUT KAILEY: THE ARMS SALE QUESTION -- SAY ABOUT TAIWAN. KAILEY: WELL, THE ARMS SALES QUESTION AS WELL. SARAH: I THINK PRESIDENT TRUMP UNDERSTANDS THAT GOING INTO THESE NEGOTIATIONS. KAILEY: YOU EXPECT NO MATERIAL CHANGE. SARAH: NO MATERIAL.

[00:49:47]NOT AT THIS POINT. KAILEY: ALRIGHT, WE WILL LEAVE IT THERE.

[00:49:54]MEGHAN HAYS, SARAH CHAMBERLAIN, THANK YOU BOTH SO MUCH FOR JOINING US, COVERING WHAT IS GOING ON ABROAD AND HERE AT HOME. SPEAKING OF HERE AT HOME, OF COURSE, JOE, YOU ARE STILL ON CAPITOL HILL, WHERE A LOT OF THESE ISSUES WE WERE DISCUSSING WITH SARAH AND MEGHAN ARE ALIVE.

[00:50:11]YOU ARE SPEAKING WITH SENATOR DAVE MCCORMICK WHO SAID CHINA WAS OUR NUMBER ONE ADVERSARY BUT WAS ALSO HERALDING THE BUSINESS LEADERS ON THIS TRIP. JOE: YEAH.

[00:50:20]REPUBLICANS WILL TRY TO THREAD THE NEEDLE ON THIS ISSUE.

[00:50:22]RICHARD BLUMENTHAL, THE DEMOCRAT FROM CONNECTICUT, WHO ALSO SPOKE TO US THIS HOUR, TOOK A DIFFERENT TACK, AND THAT HE IS VERY UNCOMFORTABLE WITH THE FACT THAT THE PRESIDENT IS TRAVELING TO CHINA WITH ALL OF THESE EXECUTIVES.

[00:50:34]HE'S VERY SENSITIVE TO AI AND OTHER TECH ADVANCEMENTS THAT HE WORRIES ABOUT GETTING INTO THE WRONG HANDS.

[00:50:41]SO THIS SUMMIT TOMORROW IS GOING TO BE AWFULLY IMPORTANT TO HIM AND YOU BETTER BELIEVE THAT THE LAWMAKERS WHO ARE STILL AT IT WITH SEVERAL OF THOSE THEY HAD KAILEY, ARE GOING TO HAVE A LOT TO SAY -- SEVERAL VOTES AHEAD THIS EVENING, KAILEY, ARE GOING TO HAVE A LOT TO SAY. KAILEY: YEAH.

[00:50:59]WE WILL HAVE A LOT TO COVER AS WELL.

[00:51:01]YOU CAN FIND COVERAGE IN THE WASHINGTON EDITION OF THE NEWSLETTER ON THE TERMINAL AND ONLINE.

[00:51:03]YOU CAN FIND US BACK HERE FOR "BALANCE OF POWER" TOMORROW.

[00:51:09]ALONGSIDE JOE MATHIEU, WHO IS LIVE ON CAPITOL HILL THIS EVENING, I'M KAILEY LEINZ IN WASHINGTON.

[00:51:14]WE WILL SEE YOU ON BLOOMBERG TV AND RADIO. ♪