Open AI Models May Have Interfered With Government Sites

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Original language: English

Original video: Open AI Models May Have Interfered With Government Sites · Channel: Bloomberg Television · 47:37 · Watch on YouTube

Topics: AI governance and regulation, Markets and economy

Summary

Bloomberg’s Balance of Power examines President Xi Jinping’s state visit to Washington, which featured warm public appearances but few concrete agreements on trade, AI, Taiwan, or Iran. Former Defense Secretary Leon Panetta calls the summit a missed opportunity and expresses skepticism about a near-term Iran deal, while Democratic Congressman Glenn Ivey urges Congress to take AI-related security incidents more seriously. The program also discusses market movements, manufacturers’ concerns about trade uncertainty and permitting delays, and the competitive Texas Senate race. Political analysts debate the electoral environment, campaign strategy, and President Trump’s travel plans ahead of the midterms.

Key points

The Xi-Trump summit produced a two-month extension of the trade truce, but reporters were still awaiting details of further agreements.
Leon Panetta characterized the summit as heavy on ceremony and light on substance, citing unresolved issues including AI, trade, and Taiwan.
Panetta said he was skeptical that an enforceable peace agreement with Iran would be reached before the midterms.
OpenAI said its models may have interfered with or negatively affected services at dozens of organizations, including governments and universities.
Congressman Glenn Ivey called for hearings and expert input on AI risks, and said technological countermeasures may be needed alongside legislation.
Manufacturers reported optimism about their outlook while facing cost pressures, trade uncertainty, workforce shortages, and permitting delays.
The National Association of Manufacturers’ Jay Timmons called for greater stability in trade relations and continued North American integration under USMCA.
Democratic Senate candidate James Talarico challenged Republican Ken Paxton to a debate as polling showed a competitive Texas race.
The political panel discussed Democrats’ prospects in the midterms and whether President Trump’s visits to reliably Republican states could help GOP candidates.

Chapters

Start	Chapter	Summary
00:04	Opening and Xi-Trump summit	The program previews the summit’s limited trade and AI outcomes, the Iran war, voter eligibility, and the day’s guests.
01:06	What the China summit achieved	Bloomberg correspondent Courtney Subramanian says the visit focused more on managing relations than resolving tensions over AI, Taiwan, and trade.
05:27	Leon Panetta on the summit and Taiwan	Former Defense Secretary Leon Panetta calls the summit a missed opportunity and discusses its lack of concrete agreements and the US position on Taiwan.
10:28	Iran diplomacy and the midterms	Panetta expresses skepticism about a near-term Iran agreement and considers how economic pressures and the war could affect the elections.
14:17	Markets and technology stocks	Bloomberg’s Nora Minda reviews the market rebound, lower oil prices, bond yields, Meta, and Microsoft’s focus on enterprise Copilot.
16:28	OpenAI reports possible model interference	The program reports that OpenAI notified dozens of organizations that its models may have negatively affected their services.
17:01	Congressman Glenn Ivey on AI risks	Ivey urges Congress to examine AI incidents, discusses possible safeguards and liability, and addresses data centers and the midterm outlook.
24:11	Manufacturers on trade and investment	NAM CEO Jay Timmons discusses manufacturers’ optimism alongside trade uncertainty, supply-chain concerns, and the need for stable agreements.
29:40	Permitting reform and manufacturing	Timmons argues that permitting and infrastructure delays impose costs on manufacturers and says reform could support energy projects and investment.
33:52	Texas Senate race and debate challenge	The program covers James Talarico’s challenge to Ken Paxton and the large sums being committed to the closely watched Texas contest.
35:29	Polling, campaigning, and Texas	Bloomberg’s Joe Levinger discusses Talarico’s polling lead, Paxton’s campaign resources, and the possibility of a debate.
38:14	Political panel on the midterms	Democratic and Republican strategists assess the Texas race, shifting electoral conditions, debates, and Trump’s campaign travel.

Quotes

there was an awful lot of pomp but not a lot of substance — 06:32

Getting to know each other a little better is great. Getting down to business is better. — 08:12

Let’s come back. Let’s bring in some experts. — 19:07

the proof is in the pudding, right? And by the way, the pudding isn’t coming here. — 28:01

permitting is holding us back. — 30:11

Concepts and entities

OpenAI, Hugging Face, Glenn Ivey, Leon Panetta, Xi Jinping, National Association of Manufacturers, Jay Timmons, James Talarico, Ken Paxton, Taiwan

Full transcript (original language)

00:04 [music] This is Balance of Power live from Washington DC. Tonight, she’s gone. China’s [music] President Xiinping wrapping a 3-day state visit filled with pomp and circumstance, but no major breakthroughs [music] on trade or artificial intelligence. And it’s not goodbye for long. Trump and she could meet twice more [music] before the year ends in the US and abroad. Jay Timonss, president CEO of the National Association of

00:35 Manufacturers [music] joins us on what manufacturers want to see from the administration’s trade deals and what those agreements could mean for American [music] industry. Plus, diplomatic path reports of a possible off-ramp to end the war with Iran paired with optimistic comments from President Trump sent oil prices lower today. We’ll talk about what that could [music] take to turn those signals into a deal with former defense secretary Leon Petta. And ballot [music] check. The Supreme Court handing President Trump a win today, allowing his administration for now to [music]

01:06 reinstate an expanded federal database that states can use to verify voters eligibility for the midterms. Democratic Congressman Glenn Ivy of Maryland joins us this hour to weigh in on that and much [music] more. From Bloomberg’s Washington DC studios to our TV and radio audiences worldwide. Welcome to Balance of Power. I’m Joe Matthew. Kaylee [music] Lines is off. We begin at the White House where President Xi wrapped his first state visit to the US in more than a decade. Closing it out with a brief tour of Washington alongside President Trump, including a stop at the National Archives to see the

01:38 nation’s founding documents. And the two leaders parting on notably good terms. Trump saying they’ve quote never gotten along better with she already looking ahead to two more meetings as we mentioned before the end of this year. But for all the warmth and pageantry, the visit was light on deliverables raising questions on exactly what was gained aside from two pandas. Joining us now for more is Bloomberg’s Courtney Submanian, who’s live on the north lawn of the White House. Courtney, I don’t know if we will get a traditional readout from this visit, but beyond the two-month extension of the trade truce.

02:12 Was anything else accomplished? >> Well, there were real questions heading into this summit about what the goals were here and what sort of concrete deliverables we would see. uh now that she is on that plane back to China, it has become abundantly clear this was more about managing the relationship than it was about, you know, the real tensions around AI, around Taiwan, around trade. As you say, we did hear about the trade truce at the beginning of the week. Um, but we are expected to hear a bit more on the trade front.

02:43 Jameson Greer saying that we should hear some announcements on Monday. uh the president and she did talk about AI which has become uh you know a flash point both here and abroad. Uh they discussed keeping an open dialogue but the president also shot down shot down um you know any sort of guard rails or setting up a mechanism to uh manage the development of AI which is something that tech leaders are talking about. Um we as you mentioned did not get a

03:16 readout from the white house. We are waiting to hear, you know, what discussions covered, if there’s any more announcements coming, but as you say, the president and President Xi are expected to meet uh later this year. So, the conversation continues. >> Sure. You know, there were a lot of questions, Courtney, as well about to what extent they would address the war with Iran. We’re looking at images on Bloomberg TV of their tour of the National Archives and it was in that rotunda that the president was asked repeatedly by reporters if it even came up. He did acknowledge and confirm that

03:50 yes it did. Courtney, do we have any idea how far they went? >> We do not, as you mentioned, we have not heard from this White House uh on any sort of real readout about what these discussions covered. These are questions we of course are asking here. Um but uh stay tuned as as we hope to hear more. >> Yeah. Just quickly as well, Courtney, the president’s got some other travel plans uh beyond China. He’s going to be back on the campaign trail, but in some unlikely places to be using the Republican commanderin-chief, Alabama,

04:22 Oklahoma, these are not purple states. >> Yeah, we do expect the president to be on the road almost daily uh in the runup to November uh during the month of October. And as you said, he’s playing a little bit of a defense here next week. He’s headed to Oklahoma uh and Alabama, which are deep red states. Um but we spoke to a White House official, my colleague spoke to an official last night who suggested that these events were designed to drive up Republican

04:54 turnout and that the locations were picked because they have uh a spillover into media markets in neighboring states. in this case, uh, Texas, for Durant, uh, Oklahoma, and, uh, for Florida in Mobile, Alabama. But we do expect the president to be on the road a bit more, uh, in the next few weeks. >> They’re promising what, 30, 35 candidates he was going to travel to help. Courtney, thank you so much. We got through another summit with the help of Courtney Supermanian. She’s live at the White House and we thank you.

05:27 Joining us now to help make some more sense of what came from this summit or not along with some potential developments that we refer to between the US and Iran, former defense secretary, former CIA director Leon Petta of course worked in Congress as well and was a White House chief of staff. So he can get to a number of angles here and it’s great to see you Mr. Secretary. Welcome back to Bloomberg TV and radio here on Balance of Power. Uh we’ve been talking about deliverables for the last two days or lack thereof. Am I using the right metric? How are you seeing this visit on the scale of

05:58 success to failure? >> Well, it’s hard not to view it as a missed opportunity. Uh because generally in my experience when a president meets with a another world leader, uh the purpose of those meetings is not just uh to have red carpets and a state dinner uh and to have events. The whole purpose of it is to deal with issues that divide the two parties and try to resolve those issues.

06:32 In other words, try to get something done. Uh and my impression here is that there was an awful lot of pomp but not a lot of substance uh when it came to the issues that are of great concern between the United States and China. >> Yeah. Well, I’m going to ask you about a couple of those issues, but I’m just compelled by the images that we’re showing on Bloomberg TV and on YouTube. The president took Xihinping, the communist leader of China, on a tour of the White House, went around town as well, but at one point brought him on

07:05 Marine 1, the president’s helicopter after showing off uh the new helipad on the south lawn. Uh, of course, he offered tours to members of the Chinese delegation of the ballroom that’s being constructed. Is this a security concern, Secretary? >> Uh, you know, I think, uh, the president was running out of things to do. Uh, and so he he basically decided that, uh, he was going to kind of take him on a tour uh, of the White House. Uh, the uh, uh,

07:38 the helicopter pad that uh, was was created there. Uh, the work on the ballroom. uh you know uh looking at uh uh at the rose garden etc. Uh and and look again those are things that are usually done with a visiting visiting dignitary but the main reason you have these summits is to do a lot of preparation on issues so that ultimately the two leaders can face the press and face the world and

08:12 say yes we’ve had some differences but we were able to get this done. We were able to get an agreement on AI. We were willing to get an agreement on trade. We were willing to get an agreement on Iran. Uh but none of that happened here. And I I’m just afraid that uh getting to know each other a little better is great. Getting down to business is better. >> I want to ask you about some issues including Taiwan. We were struck by the

08:46 words of President Xi here who urged the president essentially to reject the idea of an independent Taiwan uh presuming that we were we were reaffirming our stand against it which is of course not the position of the United States. Uh did she move the goalpost on this and does that speak to the timeline that he might have in mind? Well, I I hope that the president has not changed our position with regards to Taiwan uh and protecting their

09:18 democracy. Uh we we’ve made very clear uh that uh that Taiwan’s independence and and democracy ought to be protected uh and that uh the if necessary the United States would come to the aid of Taiwan if that were the case. China has made clear that by 2027 uh the Chinese army should be ready to take on Taiwan if necessary. Uh and for that reason,

09:53 you know, my my sense is there may have been some talk about Taiwan, but the president did not send a very clear message that Taiwan should not be interfered with and that the United States would would help protect Taiwan. That’s the kind of message a strong leader would send in order to make clear to she that he cannot take advantage of Taiwan. >> Well, I I presume that statement could

10:28 still be coming from the administration secretary. We have not seen it yet. >> And I’d like to ask you about the situation with Iran because this did come up according to the president and she did urge for peace in the Iran war. We’ve got a new deal on the table reportedly of maybe two weeks. reopen the straight and and get talks back underway. Do you think that this one might be any different than the last? [laughter] >> You know, I think we all hope and pray that that’s the case.

11:00 >> Yeah. >> But we we’ve been around uh this corner a number of times and it’s led nowhere. Uh we’ve been promised deals. We’ve been promised that ultimately the straits would open uh that it would be resolved. Uh and it doesn’t happen. And I’m a little concerned right now that the president who said nothing’s going to happen till the midterms could very well uh have developed a real problem here because why should Iran come to any kind

11:33 of agreement until the midterms in fact happen? But, you know, I I hope that’s not the case. I hope they’re able to work out an agreement, but I have to tell you, I am very skeptical about getting a really enforcable peace agreement before the midterms. >> Well, you know, in the meantime, we’ve got record high diesel $65. Gas prices are aren’t looking too hot either, depending on where you live. Your $4.5 may be approaching five by the time we

12:05 get to the midterms. I didn’t bring you on to talk about electoral politics, but you were a member of Congress and you were a White House chief of staff. Do you believe the narrative, Mr. Secretary, that Republican fortunes have dwindled to such an extent in the past two to three weeks that Democrats take both the House and the Senate? >> I’ve been through enough elections uh not to uh put my money on the table uh behind any kind of uh firm prediction. Uh I I think it’s clear that uh because

12:40 of the situation with the economy, the situation with the war, the fact that prices are going up dramatically, the fact that most people are struggling just to make it from day to day. Um, >> I don’t think there’s any question uh that u uh that there’s a real sense that the Democrats could very well take the House of Representatives. Uh, and now there are some that are saying that there’s a chance in the Senate as well. Uh, I still think uh that there’s going

13:13 to be some competitive races out there. Uh, I I’m not I’m not willing to say it’s over. I think there’s a lot of work that needs to be done. Uh and my sense is that uh the American people understand the power they have to vote and to make an impact on the situation that they’re concerned about. That is probably the biggest thing in the favor of Democrats right now is the fact that

13:44 the American people are very concerned and very angry about the war. 39 days to go. He’s the former defense secretary. He used to run the CIA and helped run the White House as chief of staff after a career in Congress. Leon Petta, it’s great to see you. We thank you as always for the insights. Have a great weekend. As we turn to the markets, finish the week on a high note today as stocks rallied on lower oil prices and a break from ever rising interest rates on hopes that this new deal, this new proposal for a deal with Iran uh gains some traction. Let’s turn now to power moves with Bloomberg’s Nora

14:17 Minda who joins live from world headquarters in New York. Hey Nora. >> Hey. Markets getting some relief to end the week on this Friday. We did see consumer confidence coming in earlier in the morning falling to a four-month low and so that did take stocks to a session low but ultimately ekking out a gain when you look at the week. Oil really, as you mentioned, retreating and not really aiding sentiment in the broader market. But a look at the bond market because that’s where a lot of our attention has been as of late. So we do see yields lower and taking a look at the 10-year though it’s still elevated above 5% currently sitting at 5.16 and that’s really still cons uh putting

14:53 a lot of concern for investors right now. So the next catalyst will be the jobs report which we get at the end of next week on Friday and that’ll essentially give more clues for Wall Street as to whether or not the Fed may have to actually hike again to reign in inflation. But one of the bigger stories on the week that I do want to call out that’s Meta. So we do see the stock lower on the day falling by about three more than 3% today but really higher uh over the past five days we’ve really been seeing a rally for this company on all that optimism that we’ve been talking about when it comes to Muse AI

15:24 that essentially reminds a lot of folks of Tomagotchi >> another 7A Microsoft popping today uh Norah and this is interesting there was a time when co-pilot was something to be making fun of now it’s a reason to buy the stock. >> That certainly seems to be the case at least for a lot of folks looking at uh the stock Microsoft higher by about 3.7% to end the day. Essentially what happened here is co-pilot. There used to be two versions, one for the consumer, one for the enterprise folks, but now

15:55 Meta or excuse me, Microsoft actually really turning toward the workplace and focusing more on enterprise where they know that they tend to excel. When you think about Microsoft and the fact that it’s so integrated into the workplace, PowerPoint, Teams, uh the list goes on, Excel. So, they’re really seeing co-pilot is really being focused in this space instead of spending too much time really chasing after the consumer like the likes of Chat GBT. >> Well, we’ll have a lot more to talk about where this came from next week. Micron earnings on tap and Bloomberg’s Nora Melinda here to help us. Thank you,

16:28 Nora. Have a great weekend. Coming up, we have breaking news right now. [music] If you haven’t heard this, Open AI says its models may have interfered with [music] government sites. This is just crossing the Bloomberg terminal. Democratic Congressman Glenn Ivy joins us with more on that and other [music] issues next on Balance of Power right here on Bloomberg TV and radio. [music]

17:01 It’s balance of power on Bloomberg TV and radio. I’m Joe Matthew in [music] Washington with breaking news. Crossing the terminal now, Open AI says it has notified [music] dozens of organizations, including governments and universities, that its AI models may have interfered and negatively impacted, in their word, their [music] services. The company uncovered these incidents as part of its ongoing probe into a recent hack of hugging face [music] by its own AI models. The latest disclosure coming just days after Open AI acknowledged that its models hacked an Australian

17:32 government website earlier this year. Joining us now to talk this out and many other issues is Democratic Congressman Glenn Ivy of Maryland, who serves on the House Appropriations and Ethics Committees, having spent years in the legal world as assistant US Attorney for the District of Columbia and states attorney for Prince George’s County, Maryland, which she calls home. It’s great to see you, Congressman. Welcome back. >> Thanks for having me. >> I have to start with this. Uh it’s not what I had planned to ask you about, but this is becoming almost a daily event uh with stories like these. Is this an issue that Congress needs to take

18:05 seriously and regulate or one that might be worked out at the White House next week? >> Well, we we definitely should be taking it more seriously than we are at, you know, in Congress and the White House. I think certainly the White House, the Trump has the the president’s been fairly dismissive about the whole thing, which I think is absolutely the wrong way to go. uh the speaker sent us home instead of having us come back. Although I heard some we got some Republicans now saying we should come back in town and start looking at this at least have some hearings. >> Well, that’s you know I I I it it prompts me to ask you is this a partisan

18:35 issue or not? I know President Trump has carved out his territory, but I’m hearing from DNRs on Capitol Hill singing the same tune. >> I think that’s right. I mean I I don’t know that it’s the partisan talking points have been locked in yet. Um, and the president, I think he started off saying it was a hoax, and obviously that’s not relevant to the real issues that we’re facing here. And you do have bipartisan legislation. You know, you’ve got Trey Han and Overli have a bill uh in the House. Uh, and then I think Senator Warner has a bill that goes a little further than theirs. But whatever

19:07 bill we want to talk about, um, let’s come back. Let’s bring in some experts. Um, you know, this one broke. We didn’t we hadn’t even finished analyzing the hugging face issue yet. Let’s let’s let’s sit down and get get some real brain power at the table >> until we get our brains together on this. Do we need a kill switch right now? >> I don’t know if you if there is one, which is problem number one. I know there’s a piece of legislation that’s aimed at that, but I don’t know that there’s one in place. Uh and I do think there’s going to have to be some degree of of self-p policing until we get legislation in place. The other aspect

19:40 of this that I’m wondering about is whether we’re going to have to get some kind of technological fix because whatever legal or legislative solution we put in place, it’ll never outpace the the this the rapidity at which this is evolving. We need technology to keep pace and give us counter measures in the event of some kind of attack. >> You spent enough time as a lawyer and as a prosecutor. Will this come down to the liability that these companies carry until there is regulation? Yeah, liability is a big factor. Although the hugging face piece, you know, based on what they said anyway was it did things

20:13 that were not expected. So since it wasn’t foreseeable or they didn’t intend for it to go there, they probably don’t have criminal exposure. But when you have more of these happen, you can’t keep saying, “Hey, we didn’t know.” It becomes foreseeable and and expected. Uh and I think we’re at that point now. >> Well, I’ll tell you, our audience should know you’re more exposed to this world than most lawmakers. you introduced us to ion Q uh which has been very busy uh with quantum. In fact, you spoke at an ion quantum conference at the University of Maryland in your district. You were speaking there I know yesterday. Um this

20:47 is one of the leaders in in in the drive for supercomput for artificial intelligence. What is your view on the argument over data centers for instance and the threat the the implied threat by AI when you’re in the throws of helping to develop quantum here in the state? >> Well, I mean there there’s a lot of different sets of issues. The quantum piece I think is uh great. We were excited to be able to host world what AI graduates to, right? uh it it it could be a key piece to that because it really it’s rapidly accelerating the pace at which you know you can do use

21:21 computers to solve problems and and things like that. Um and we got a chance to host it. Ion Q is a key player. We had 40 companies from around the world come and our governor’s calling uh college park the the capital of quantum now. But um but we do certainly have challenges. We just talked a little bit about the AI challenges and the potential threat there. And that’s only on the you know that’s not even including like criminal fraud or you know national security threats and the like. Uh and I think we’ve got similar issues uh with respect to that. Data centers is a different type of problem

21:54 that’s more local in nature and I think there’s a lot of people concerned about the impact on electricity costs and I think that’s a legitimate concern frankly. I really do. But I think we also want to make sure that we try and figure out ways if there’s ways to do it safely and keep uh force the companies to cover their own electricity costs, especially with respect to attaching to the u to the grid. We have to take a look at it because we we’re going to need that kind of capability if the rateayers protection act gets a vote next week in the Senate. Um in our remaining moment, I would love to hit

22:24 the the campaign trail with you. Are you buying the rhetoric right now as a Democrat? Are you allowing yourself to go there? A 30 seat move. Cook says five to 15 seats, you take both chambers. Is that happening? >> Well, this is like being in the lead at the end of the third quarter. >> Yeah, that’s scary sometimes. >> Yeah. And sometimes you see teams start doing the victory lap and and somebody comes back and beats them. >> So, you’re not spiking the football. >> No, no, no. We’ve got more work to do. We got to run through the tape. >> Are the ingredients not in place though for Democrats to outperform? You’ve got diesel gas at highs. You’ve got great

22:56 concerns about AI. You’ve got a deeply unpopular president. groceries that are up because of Trump’s tariffs. I mean, there’s the the the economics are all in our favor. The cost of living piece for sure, but um you know, Trump related election cycles and he’s not on the ballot on this one, but you know, the polls haven’t always been right. >> Mhm. >> And I think it’s important for us to make sure we keep telling uh the public out there what we want to do to try and address the problems that they’re facing. Bring down the gas prices by ending the war. Bring down grocery prices by rolling back the tariffs. those kinds of we’ve got to make sure

23:30 they hear that message and then if we get a chance to get in the majority, we’ve got to deliver. >> Oh, we’re in the closing month here. We’d love to stay in touch with you on this, Congressman. [music] Thanks for being here. >> Please do. Thanks for having us. >> Good to see you. That’s Democratic Congressman Glenn Ivy of Maryland. [music] We thank you, sir, as always. Coming up, National Association of Manufacturers President CEO Jay Timonss is with us on the Friday edition of Balance of Power. The outlook for investment, hiring, and growth only here on Bloomberg TV and radio.

24:11 It’s Balance of Power on Bloomberg TV and Radio. I’m Joe Matthew in Washington. President Trump’s summit [music] with President Xi putting trade back in focus this week. We’ve talked about it a lot as record diesel [music] prices put new pressure on businesses and supply chains. But American manufacturers appear optimistic with new National Association of Manufacturers survey finding confidence at a nearly 80% high with members saying they were either very positive or [music] somewhat positive when it comes to their business outlook. And joining us is the force behind this organization. Jay Timonss is

24:45 president and CEO of the National Association of Manufacturers. It’s always great to have you in the studio. Thanks for coming to see us today. Uh you know what the doom scroll has been like lately. We talk about gas prices, diesel, crude, a straight of horses that’s closed, grocery prices. I mean, I could bore you and keep on going. >> Tariffs, workforce shortages for your world. Where does the optimism come from? >> Well, you know, it’s because uh manufacturers are seeing an uptick in orders and so they’re looking ahead. They’re looking down the road >> and so they are very optimistic about the future. But, you know, there’s a lot

25:18 of headwinds that are happening right now. And I you just read you went through a list of them and so did I. Um that these are cost pressures on manufacturers. So the long-term outlook is one that I think we’re going to have to be a little cautious about. >> Uh but you know especially when it comes to trade and the uncertainty on trade which of course >> you know the the the summit this week uh was supposed to focus on right and look I am not one who thought much was going to come out of this. I mean, what we’re talking about, Joe, is we’re talking about two very different systems. You’re

25:53 talking about the United States that relies on a free market economy that that is based on capitalism and and entrepreneurship versus a command economy led by uh a communist dictator who who wants to control the means of production and prices, right? So, it’s entirely different systems and it’s hard to reconcile. And so for manufacturers too especially, we were hoping and and maybe there’ll be something announced. We were hoping we would see some some uh focus on the things that have really harmed manufacturing in the United

26:25 States. So think of how they subsidize their products and dump them on on the American market and those products are made with forced labor. Those are things that are anti the antithesis of of our moral code. And then you look at the agreements they have a, you know, agreed to in the past, the phase one China deal. I was in the White House in 2020. >> You’re still waiting to see it realized, aren’t you? >> Well, not only that, they didn’t they didn’t $200 billion commitment. They didn’t spend $1 on that. And their their

26:58 numbers were even less in terms of what they bought from us than when that agreement happened. This is why our ears perked up when the president said twice today at the National Archives and again at the White House that our farmers are going to be very happy. He said we’re everyone’s going to be very happy. >> Look, they were supposed to be happy earlier this year, right? >> That’s correct. >> As were manufacturers. >> When he says everyone, he’s got to mean manufacturers, too. So, we got a two month extension of a trade truce. That’s by many months less than what both sides >> had expected in this meeting. Are we learning that there is not much to

27:28 negotiate between? I’m hopeful that we will hold their feet to the fire for the next two months because to your point, >> there was an agriculture deal made earlier this year. There was a deal made on critical minerals and you know they’re actually selling us fewer critical minerals than before that agreement >> before the magnet standoff. >> Yeah. So look, I mean the proof is in the pudding, right? And by the way, the pudding isn’t coming here. So that’s a real problem I think for manufacturers. And and I don’t know when you’re looking back on on whether they’ve kept their

28:01 commitments. I I think I think past it prologue. So let’s hope there’s a change. Let’s hope that this summit pays off for manufacturers and the American people. >> I was really happy that the president took President Xi to the National Archives, showed him our Constitution and our Bill of Rights, those first freedoms, right? >> Hopefully he learned something. I’m not sure he was too interested to read them, but I’ll tell you, um, this is interesting because we’ve talked about USMCA, the crossber supply chains that are impacted. We’re talking about supply

28:31 chains and manufacturing chains, I should say, supply chains now, uh, from China. Your members are getting it on every side of the border here, uh, it seems. >> What’s the most important thing? Cuz he’s they’re going to meet two more times this year. The administration might suggest today was a preamble. Maybe there’s more progress at Apac. He’s going to China. What could he bring home that would change your view? >> Stability. So, we need we need some stability in these trade relationships. We’re going to have to do business with China. China is a huge part of the world economy, right? >> But we we want the stability of uh

29:07 whatever the agreements are in terms of this relationship, but we also want to make sure that they don’t steal our stuff, not our intellectual property. They don’t dump their product on the American market. And you brought up USR uh USMCA and look, we need to see that resolidified or renegotiated or renewed, whatever term you want, >> because manufacturers did what we were asked in 2019. We moved production from Asia to the North American continent. It was really important to integrate our our regional economy and it was

29:40 >> that was one of the best um that was one of the best outcomes of the first Trump administration. We want to see that that continue that agreement continue for sure. >> I know you’re looking for some changes here at home as well. And it appeared we were on the precipice of a permitting reform uh bill passing before senators left town. Uh it’s looking like that might not happen. And I’m guessing that this has any number of impacts on [clears throat] your industry. It’s not just citing new manufacturing plants. It’s pipelines to bring fuel to those plants. And you tell me what else. How

30:11 important is this for you? >> It is critical. Uh so look, we had uh we we’ve seen some improvements in in federal policy that has encouraged investment and job creation, >> but permitting is holding us back. It costs it costs manufacturers $8 billion a year for permitting delays, right? And and kind of related to that, it costs $40 billion to manufacturers because of delays in and and tie-ups in our infrastructure systems. So those infrastructure dollars that expire in December, that’s critical. permitting

30:43 reform is critical. I am I am really optimistic actually and >> I know that there may be a delay in the vote, but I know it can get over the line. When you see Senator Capo and Senator White House both working together, Senator Hinrich, Senator Lee, all four of them have been true champions, >> and I I know that we’re going to get something through because >> is that a lame duck uh event or >> Well, look, I I I’m still going to hold out hope that they’re going to go over the home over the weekend, talk with their colleagues, and maybe get something next week because, you know, you think about this, this applies to

31:16 all types of energy production, right? Um and and those projects are important to both sides of the political aisle, especially in an environment where we have the uncertainty of the Middle East conflict and the Iran war >> driving up the price of of of energy here in the United States. So, >> we need some relief. Consumers need relief. Manufacturers need relief. Permitting reform will help get that done. >> Do the midterms matter for manufacturing? Does it matter who runs Congress? Well, look, we always work with whoever the American people give

31:47 us. And the good news, I think, for manufacturers is that we are um >> it >> both political parties want to see manufacturing succeed. >> There are some nuances on how to get there, right? But we are working very closely with both parties to try to advance our our priorities and make sure that the 13 million men and women who we hope to have even more in the manufacturing workforce, Yeah. that they are benefiting from good policy that occurs in Congress and the agencies regardless of who occupies Congress or the White House. I

32:19 >> want to get back to where we started with your survey uh and and the optimistic view that many manufacturers have. Tell us who these members are and do they include data centers? Do do they include the the AI factories as Jensen Wong calls them? >> Well, Nvidia is actually on our board of directors. So, I have a large board of directors, 250 members. We just met here in Washington. uh this this last week. Um but it includes everything from I always say it it includes even like a a 10p person candy making operation all

32:52 the way to Boeing and everything in between. >> So it is truly the manufacturing economy. The more than 10,000 members of the NAM um uh cover every sector, every region, every state, about 90% of those are small and mediumsiz manufacturers, Joe. And part of that supply chain that keeps America moving. That must be quite a room when you put all your uh board members. >> It’s pretty fun because you have all these great diversities of of opinion and experiences and I think we all benefit from from their wisdom. >> Well, we always benefit from ears and I

33:22 appreciate you’re being here with us today. Jay, thank you for bringing us your view. That’s Jay Timonss with us live on Bloomberg. We thank you. Coming up, Texas becoming an expensive problem for Republicans as James Tal Rico [music] beckons Ken Paxton to the debate stage. He called him on the phone today. The increasingly competitive race in the Lone Star State next on Balance [music] of Power, only on Bloomberg TV and Radio.

33:52 [music] It’s Balance of Power [music] on Bloomberg TV and Radio. I’m Joe Matthew in Washington. We thank you for joining us on the Friday edition. In Texas, Democrats are putting Republicans [music] on defense. In a state the GOP, of course, has dominated for decades. Look no further than the Senate race where new polling has Democratic nominee James Tal Rico five points ahead of his Republican opponent Kent Paxton [music] with a striking, get this, 32 point advantage among independent voters. [music]

34:25 T Rico leaning into the competition today, challenging Paxton to a debate and actually posted a video of himself [music] calling Paxton on the phone. Listen. >> Hey Ken, it’s James. I’m calling to invite you to a debate on Fox News. Texans start voting in less than a month and they deserve to hear from both of us before they do. Uh I’ve accepted four local TV debates, but we haven’t heard from you and we’re running out of time. So, if Fox News is where you’ll be most comfortable, I’ll be there because I

34:57 think it’s that important. Brett Bearer can moderate. We can both take questions and Texans can hear from us directly. So, give me a call back and I look forward to hearing from you. Now, he has a voicemail from me. You got a voicemail. All right. Hey, Ken. It’s James. While Paxton has yet to come to the debate stage, Republicans are deeply invested in his campaign. with a Republican super PAC now poised to spend as much as $200 million on the race with 117 million in ads already booked. Remarkable amount of financial

35:29 firepower for a Senate seat that Republicans have held for over 30 years. Joining us now is Bloomberg’s Joe Levinger who’s in our Dallas bureau right now. Joe, it’s been since mid August that we’ve seen Paxton lead one of these polls against James Tal Rico. For many Democrats, they’re worried to even acknowledge what’s going on right now. Could they flip this scene? >> If you go by polling, it it certainly looks like that. You know, as you mentioned, James Talerico has been in the lead in pretty much every poll that

36:02 we’ve seen in recent weeks. Um, but again, this is Texas. Uh, and we’re just starting to see the money spiggot turn on for Ken Paxton. There’s been this standoff for months between President Trump’s MAGA, Inc. and Senate leadership and Elon Musk’s, you know, political operation on who was going to spend the big money to help get Ken Paxton across the finish line here. And I I don’t know that um the money that’s been booked so far is enough to get you across the finish line in a state like Texas where you have 20 media markets. It’s just a

36:36 gigantic state. It it’s hard just to get around as a campaigner, let alone, you know, paying for television ads and all of that. But, um, we’re starting to see the money come on and, uh, and, you know, Democrats are hopeful. Uh, they’re even, you know, starting to go on the air against, uh, Greg Abbott, the Republican governor. And, uh, we’re hearing a lot of people say it reminds them of 2018 when Betto Oorc put up that famous challenge to Ted Cruz. He ended up losing by a little under three points. So, I I do think Texas Democrats

37:06 are scarred. And it’s kind of like if you’re a New York Jets fan, you know, you just won’t believe. But um you know, we’re I guess we’re still waiting to see and and the polls suggest this is Dem’s best chance in in years. >> Okay. Are they going to debate? What do you think of this? Was that just a stunt and a good ad today or could they actually end up on the debate stage? >> You know, James Terico’s been calling for a debate now for weeks. I think he’s comfortable in combative environments. He first came to fame um by appearing on Fox News when he debated with then Fox News host Pete Hegathth about a voter ID

37:40 law that was being uh you know that was being considered in Texas. Uh and then you know he went on Joe Rogan after Rogan had endorsed President Trump and ultimately at the end of that interview Joe Rogan said that Telerico should run for president. So he’s very comfortable in these environments where he’s off script and he has to defend his views. We have not seen that same level of comfort from Ken Paxton. um he he’s done relatively few public events compared to someone like James Tarico and and he’s just not as comfortable with public speaking. So um we don’t know if he’ll accept. He said that his team has said

38:14 that he will debate but we are running short on time and uh and you know maybe this Fox News gambit will work out. We’ll see. >> Really interesting. Joe, thank you. Uh don’t be a stranger. Bloomberg’s Joe Leer with one of the best stories in politics right now live in Dallas. Joining us now, our political panel, Bloomberg politics contributors, Jeannie Shenzeno, our Democratic strategist, Democracy visiting fellow at Harvard Kennedy School’s Ash Center is with us alongside Republican strategist Rick Davis, partner at Stonecourt Capital as well a contributor. Great to see both of you here. Uh Rick, I’ve got to ask you about what’s going on uh in Texas. 30

38:47 years and we could be looking at a seat that flips. For starters, do you think they debate if you were running the Paxton campaign, would you allow him on stage with Trico? Yeah, I would never want uh Ken Paxton on a stage with Terico. In fact, you don’t even want Telerico on a stage anywhere in the state. Um [laughter] his strategyy’s got to be, and I think it is, uh Donald Trump has to get me elected. I mean, the only reason he’s the nominee is because of Donald Trump, right? >> And he looks at the state and he goes to bed at night saying, “Hey, this is a Trump plus 13 state. All I need is a couple extra points.” and and so um he’s

39:20 he’s relying on the fact that there are enough voters with muscle memory about Trump >> that he will be Trump and he’s one of the only ones in the entire country who actually believes that strategy could help him get elected otherwise most of the Republicans are saying Trump don’t come to my state it’s not about you it’s about me well these numbers are are staggering not only the polls that we’re showing on Bloomberg TV Jeanie but the money we’re not in the tens of millions we’re in the hundreds of millions millions of dollars. What makes James Tal Rico different than Betto Oor?

39:54 >> Well, obviously he is facing a very different candidate um in a very wounded um you know, Ken Paxton. And as Rick said, the one reason and one reason alone that Paxton is there is due to Donald Trump. I think we’d be having a very different conversation if Ken if we had Taler Rico against Cornin. It’s also what’s different is the environment. I mean, we are seeing Republicans run away from this White House and this administration in droves, whether it’s

40:25 Mike Rogers and Ashley Hansen on the price of or Henson, I should say, on the price of gas and the war in Iran. I mean, Joe, when you have Byron Donald’s in Florida stripping all mention of Donald Trump from his website, you know, things are bad out there. So, the environment is also different. And of course, Taler Rico is a very talented candidate, but he is facing an onslaught of funding. He is now facing a decision by the Supreme Court, and we don’t know

40:56 how that impacts what happens in November. So, there’s a lot of other factors at play here as well, but he’s definitely in the best position. I think the I think the other Joe must be a Jets fan, so I feel for him. I know what he means. [laughter] >> Sorry about that, Genie. Um, you know, more broadly, uh, speaking here, you’ve got the Cook Political Report today, Rick, saying that Democrats will take between five and 15 seats. Others are projecting a 30 seat move here, whether you’re talking about Texas or any of the

41:30 other states. I’m just curious what has happened over the past two to three weeks. I asked Frank Lunt about this, the acceleration where we’ve seen this kind of deterioration in the polls. Of course, the head of FIL, here’s what Frank told us earlier. We talked about on your show that people don’t take it seriously until Labor Day and after Labor Day they start to make a decision both [snorts] do they want to reward the past and do they want a different future and across America right now the public is saying

42:03 can we get out of this affordability crisis can we afford our food our fuel if you’re workingass can we afford [clears throat] housing and healthcare if you’re upper middle class and the public is starting to wonder our national security. Are we getting any closer to solving the war between Russia and Ukraine? To solving the dispute between us and Iran and even our relationship with China, is it productive? And it seems reasonably okay over the last 48 hours. But in the end, do I want four more years like this? Do

42:39 I want to to pursue the current politics and policy or do I want to change? >> Rick, I don’t know if you agree with his philosophy on Labor Day, but have you ever seen a turn of this magnitude in such a short period of time? >> Yeah, I you know, well, I saw a much bigger turn once in 2008, like literally overnight. Uh, >> keying off of news though, right? >> Keying off of the collapse of the global financial system, right? Does this feel for me? people went from, you know, I’m a McCain supporter to I’m an Obama

43:12 supporter in 48 hours. >> So, so you should never underestimate the willingness for a voter to change their mind in midstream. >> Two, we’ve seen this coming. Even though the public polls, which I wouldn’t put a lot of investment into, okay, have been warning signs about this kind of, you know, movement toward the left, movement toward the Democrats, the Michigan consumer sentiment has been screaming this for a year. And so when when you see consumers this grumpy, this mad about their current financial situation and this dismal about the future, you know, that’s going to translate into the

43:46 ballot at some point in time. And so, yes, I agree with Frank that says, you know, people really hone in and start getting serious about politics after their summer vacations. Labor Day is a meaningful thing in politics, no doubt. But there there’s been this symptom of this disease going on for quite some time. And it’s interesting that we’re going to have a race unfold like this in Texas without a debate. I’m wondering if this is the new normal. Uh Jeanie, I thought the numbers that were compiled today by Axios were fascinating. In 10 of the most closely watched races for governor around the country, there are

44:18 no agreed upon debates. We had Byron Donald’s here explain to us why that would be crazy to platform your opponent who he was leading in the polls. No debates are scheduled in three states, North Carolina, Ohio, and Texas when it comes to the Senate. That could change, I guess, in the next couple of weeks. But has Donald Trump created a world in politics where you just don’t need a debate anymore? >> Yeah. You know, it’s fascinating because we have seen examples, you know, think about Alexandria Kaziocortez um with the empty chair. You know, you see that. And so it is dangerous not to

44:53 go debate. But on the other hand, if you are leading, it’s also dangerous to go debate because of course then you risk dropping in the polls if you make a mistake. You know, in the case of Texas, of course, you have Terico calling for this, but if you are a candidate like um Ken Paxton, he really doesn’t have the chops to stand up on that stage as far as we know and make a debate with Terico, help him in the polls. So, I think he will try to avoid this as much

45:25 as possible and try to get Donald Trump back there. I mean, they have Donald Trump going to some of these southern states all to get into that media market. That is his shot through. He doesn’t have a shot if he stands up on that stage. Now, Byron Donald’s, if his numbers continue to shrink between him and his opponent, that might not make so much sense anymore because he is starting to struggle a little bit more than he was. Mhm. What do you think of these travel plans the president has? You know a little bit about Alabama. He’s going to Mobile. He’s going to Oklahoma. He just

46:00 went to Texas. He’s going to be in Florida. Is this where the president needs to make a difference? >> Well, it is indicative of the current state of the Republican party’s election uh chances this cycle that he’s going into bright red states. Two, he’s an incredibly unpopular president right now. So, do you really want him in a competitive state that, you know, uh is more balanced from a perspective of red and blue? Um any state that he hasn’t gotten at least 15% uh uh above Harris in the last election,

46:33 he shouldn’t even like fly over that state. I mean, he should just go straight to the beat red states and there he actually has a chance of trying to help candidates who actually might be caught in the edges of this wave. Uh, and so, uh, I don’t know anybody in a competitive state or a competitive race, even in red states, who wants the president to come visit. >> Wow. >> I’d say, other than in Texas, where at this point, without his support for Ter for uh Paxton, Paxton has zero chance, I

47:04 think, of really being able to mount a run. I mean, look at it. $150 million already been spent against Terico, and he’s gone up in the polls. >> It’s incredible. with another 200 to come. It seems Rick Davis and Jeannie Shenzeno are the best at this and delighted to have a great day of analysis with both of you on both editions of Balance of Power. Thank you both our Bloomberg Politics contributors. Check out the Washington edition newsletter. You’ve got a lot to catch up on today. Post Aunga [music] and Post Summit. President Xi’s on his way home right now and you can read about it on the terminal and online. We’ll keep dissecting what took place

47:37 next [music] week, looking for deliverables, and we’ll be back here on Monday, of course, alongside Kaylee Lines. Thank you for joining us on Balance [music] of Power, and have a great weekend. I’m Joe Matthew in Washington. This is Bloomberg.