Team,
This conversation on Bloomberg’s Balance of Power cuts straight to the core of the economic fight we’re engaged in right now. We get into the Fed’s rate-cut paralysis, the Supreme Court battle over Trump’s tariffs, and why Jay Powell’s missteps have cost this country growth, jobs, and affordability.
We also dig deep into the real drivers of inflation—Biden’s legacy inflation across housing, food, energy, transportation, and healthcare—and why different sectors respond on different timelines. Chicken versus beef. Rent versus wages. What’s already moving and what’s still stuck behind long biological and economic lags.
If you want a clear, unapologetic explanation of where the economy actually stands—and how President Trump is attacking each inflation category head-on—this exchange delivers.
Watch the video or read the transcript below.
Best,
Peter
Balance of Power (Bloomberg) – Senior Trade Counselor Peter Navarro Interview
JOE MATHIEU: Joining us now with a view from inside the administration is Peter Navarro, white House senior counselor for trade and manufacturing. He’s live with us here in our Washington Bureau. It’s nice to see you again.
SENIOR TRADE COUNSELOR PETER NAVARRO: Great to be here.
MATHIEU: Thanks for coming over from the White House.
SENIOR COUNSELOR NAVARRO: I always love being in here.
MATHIEU: Well, so no household survey and we don’t get a September jobs report, right? Can the Fed make a credible decision to cut rates at the
SENIOR COUNSELOR NAVARRO: Made a credible decision two months ago? Looking at, this isn’t rocket sciences. I think the risks are clearly to the downside on the jobs. It is a strong argument for cutting rates, which they should have done already by they’re 50 basis, 50, 75 basis points behind already. And with the shutdown, clearly that’s not going to improve job prospects. So what are they waiting for? Look, I think that Jay Powell is almost purposely being obstructionist to this administration. He’s been cutting, screwed us the last time he’s doing it again. I don’t know why the man is costing this country literally hundreds of billions of dollars in growth and thousands of jobs.
MATHIEU: He’s been cutting, but not enough is what you’re saying.
SENIOR COUNSELOR NAVARRO: He’s too late. Powell. I mean, look, he did it the first time around. He was too early when in the first term, everybody agrees that he raised rates too fast on us because he thought our supply side stimulus was somehow going to create inflation. He didn’t understand basic economics. And then when Biden’s in, he was too late. He’s the one along with Biden and Buttigieg and the others who ignited the inflation. And now what the hell is he doing? And first of all, he blames tariffs and then he has an epiphany. Well, tariffs might not like. No, it’s time. It’s time. And Jay, I mean, if he was an honorable man and this were Japan, he’d leave. He’d just leave. He’s not doing anybody any good.
TYLER KENDALL: Well, we did want to ask you about the future of tariffs.
SENIOR COUNSELOR NAVARRO: Have I made myself clear and Jay?
MATHIEU: I think so
SENIOR COUNSELOR NAVARRO: Yes, ma’am.
KENDALL: Well, we did want to ask you about the future of Terrace, which is of course the backdrop here when we’re talking about the FOMC. We’ve heard administration officials, including Kevin Hassett, tell Bloomberg that the administration’s already looking at other authorities like Section 2 32, section 1 22, section 3 0 1, in case IEPA does get struck down. Can all of those authorities make up the type of tariff revenue that we would lose if the Supreme Court weighs against this administration
SENIOR COUNSELOR NAVARRO: So I’ve looked very, very carefully, listened very carefully to the oral arguments, and I think we’re in a really strong position. I think that the boy, it was popularly received in the press. I don’t think the press did a fair job of handicapping the race. And there seems to be some negativity out there. But when I look at what everybody said, I’ll tell you the two issues. Is it tariff attacks? And it’s not in the context that it’s administered. And most important, the fact that tariff, the word tariff doesn’t appear in the string of things which I EPA allows, was something that the plaintiffs really pushed hard on. But it’s a total red herring because when you see it in the totality of the history and the law and case law like Algonquin, it’s very clear that the Supreme Court, if it wants to, has a very strong legal argument to support the tariffs. So our first best is to have the Supreme Court support the Trump tariffs as justice. Amy Coney Barrett said, it’s going to be a mess otherwise. So that’s the first thing. Now with respect to those other authorities, there’s a bunch of other authorities, what was spoken about in the oral arguments actually pointed to their possible uses. But I think the best thing would be for the Supreme Court to rule as case law and history and the Constitution would allow them to do it and support it. There’s a very, very strong argument for our side.
MATHIEU: I’m deeply curious about this idea. Maybe you’re already talking about it inside the White House or with folks on Capitol Hill about saying, okay, if it is a tax, then we’ll go have another reconciliation package and call it a tax and put it in legislation.
SENIOR COUNSELOR NAVARRO: I don’t want to go there because it’s not a tax, It’s a tariff. There’s a reason why you have separate word and you have to make the fine distinction between the Article one powers of Congress with respect to taxation that refers to domestic taxation to raise revenues. These tariffs are being administered, and incidentally they raise a bunch of revenues, but it’s in the context of regulating importation of products for the purpose of addressing national emergencies of both the fentanyl emergency and more broadly the trade deficit, which is no question, it’s an emergency. So let’s see what happens. But I’m just telling you, if you look at that carefully and you listen, there’s a very, very strong argument, support of those tariffs that comes out on the two big issues of tax and the absence of the explicit word of tariffs in the string.
KENDALL: Well, tariffs have been impacting Americans perception when it comes to inflation expectations. And I wanted to ask you about a new Harris poll that was conducted for Bloomberg News, which shows that half of respondents in October said that the economy isn’t working for them. And then 64% said that their price of household goods has gone up. I’m wondering what you make of what we are learning from the data about how Americans feel about this, particularly as consumer sentiment has also hit near record lows.
SENIOR COUNSELOR NAVARRO: So first thing I want to say is that President Trump viscerally understands the pain many Americans are going through because of the inflation issue. And a lot of that pain is centered on our MAGA base, and we understand that. Now politically, what’s interesting is we’re facing the same kind of problem that Ronald Reagan faced coming off his win over Jimmy Carter. He broke the back of inflation beginning in 81 with the help of Paul Volcker, big help from Paul Volcker. But by the time the midterms rolled around in 82, the lags associated with inflation coming out were too long for the voters to feel good about that. We lost the house in that case and we wound up with terrible gridlock. So we are mindful of the history, we’re mindful of the lags. Let me explain what I mean by lags with something as simple as the price of chicken and the price of beef. Okay, we come in and both are very high chicken’s high because what we call the great chicken slaughter by the Biden administration over in Navy and flu thing, and also the price of feed going up because of the green New Deal. Okay? Chicken’s going off the roof, eggs are going off the roof. We saw that very quickly. The lag is short. It’s about 45 days from egg to supermarket. And so the Department of Agriculture, Brooke Rollins did a very good job. We went in and we attacked that, and that’s done. That’s good beef. The lag there is as much as two to two and a half years because you’ve got to go through from calving to all of that. And so beef prices are still high, but we are attacking that with a whole range of issues. And it’s complicated by things like drought. So what we have to do, here’s the punchline, that was a long explanation, but what we have to do as an administration is first of all be crystal clear about the sources of inflation. What we still have because of these lags, is a Biden legacy inflation from everything from the fiscal stimulus to the green New Deal to 20 million illegal aliens coming up and driving up rent. We still have, we got to explain that. We’ve got to explain very carefully by category housing, health insurance, transportation, energy, how we are attacking the problem and we are taking this seriously. This is issue number one for us, and it will be for the foreseeable Future. And that means the whole administration. And I’ll come back next week or whatever and I’ll go chapter and verse about what we’re doing in each of those categories. But I want everybody to understand that we’re after this, we’re making really good progress in some areas where things are moving too slow. It’s explained not by what we’re doing, but by how long it takes.
KENDALL: Alright, well I’m sure we’ll take you up on that to continue the conversation.
SENIOR COUNSELOR NAVARRO: Yes, good to see you both.
KENDALL: Peter Navarro, white House senior counselor for trade and manufacturing at the White House. Thank you so much.
