Moelis Vice Chairman Eric Cantor Talks Trump Economy
10:01 Share

Join us in New York or via live stream on May 13th for Bloomberg's Winning the Innovation Game, Modernizing IT Without Disruption event and networking reception. This event will gather executives to share experiences and provide insights into strategies for implementing groundbreaking AI, cybersecurity, and data management technologies that will transform your workplace. This program is proudly sponsored by Rocket Software. Register at BloombergLive.com slash innovation.

Bloomberg Audio Studios. Podcasts. Radio. News.

Wall Street's biggest banks looking for some clarity on policy. JP Morgan's Jamie Dimon urging Trump to start talks with China and telling the FT quote, "We should be careful. I don't think anyone should assume they have a divine right to success and therefore don't worry about it." Joining us now to discuss the former Republican House Majority Leader, Eric Cantor. Eric, welcome to the program, sir. Welcome back. It's good to see you. Nice to be here, Jonathan. Let's reset. What do you make of the approach from the administration to trade over the last few weeks?

Well, listen, I mean, there are so many, there's so much noise, so many signals coming from the White House right now. I think that market players are just, you know, sort of trying to take a step back and figure out if they have a portfolio of companies, you know, what it is that they look like, if they're import sensitive. Obviously, there's now a little bit more focus on what's coming out every single day of the White House. I think the imperative for the president and his team today is

as they're meeting with Japan is to demonstrate success. I mean, this is where I think people are looking for some amount of clarity in that what does it mean when we're supposed to be enduring some pain and the president's been pretty clear, saying, hey, we've got, we're going to change sort of the trajectory of the country, we're going to strengthen the foundation, and if that's the case,

What does it really look like when he's dealing with a counterparty? And if it's Japan, and I would say even India, because India is the one that is most protectionist that comes to mind. If we can demonstrate there's an opening up of that market, that this is what it's all about, I think that that would calm some nerves right now. Are you convinced that is the metric for success?

Well, I think, you know, there is, Lisa, you talked about sort of taking him literally, taking him seriously, or hinted at that in what you just said. And I look at this term of the Trump administration somewhat differently than the way we looked at the last one, in that almost he is sticking to his literal word.

when we're talking about tariffs and trade here. So Jonathan, back to your question. If he's about trade deficits, because that's been one of the real metrics that he's put out there consistently, that's what it's about. So who, are we going to see the Japanese buying more of our goods? Are we going to see that along with the opening up of

their markets so that our exports can flow into these other countries. The president ran, though, on putting everyday goods down in prices, things like groceries, things like gas. A recent CBS poll says a majority of Americans see tariffs adding to prices, adding to inflation. Can they wrap this up before the midterms? Well, this is the... And then this brings up the last point, I think, that's really important about today and when we look at Capitol Hill when Congress gets back.

I think the administration and the Republicans need to act with dispatch. It's important that there get -- there is some success under the belt, demonstrably, so the markets see that in terms of dealing with countries. And I think from the Republican standpoint in Congress, they've got to get this reconciliation bill done. Simplicity is their friend right now. Adding additional taxes, doing those kinds of things is going to take weeks, if not months, to bring everyone on board.

And I think if we can just extend what President Trump had said was the greatest tax bill ever, 2017, they should just go ahead and do that. If I had said to you, Congress right now is debating whether or not to raise taxes on people that make a million dollars a year, would you think that came from a Republican or a Democrat? It is an extraordinary concept coming out of what I believe is still a very pro-growth party.

And I think as you've been discussing this morning, the three legs of the stool of the Trump economic plan, one of them is taxes, the other deregulation along with the trade agenda.

All that has to come together to help growth in this country, to see incomes rise, wages, growth, wealth, all of it, opportunity. And to sit here and say that we are going to be increasing marginal rates on individuals, that ends up hurting small businesses. I mean, that's the trick there. When they start talking about millionaires, remember, we've got a lot of people in this country that file taxes on

that have sub-S or LPs that are taxed at the individual level but actually run businesses. And I don't think they're gonna get too far with that concept. - But what if they do? This is a pillar of conservative orthodoxy, not to raise taxes, period, on anyone.

What do you make of the party in the direction of travel if they were to go ahead with this? Well, again, I'm not sure that they're going to go ahead with this. But they're discussing it right now. Well, I'm not so sure how widespread that discussion is and what kind of enthusiasm there is. But this is not a pro-growth item. And I think more of the focus is going to be on how they come together on these pay-fors because we saw, again, the important data point that occurred last week was the bond markets.

You know, we saw the concern there about the fiscal health going forward. And I think it's really important they focus on that so they can act with dispatch and get these tax rates extended. Heading into this year, the belief was that President Trump was going to be a pro-business president who was going to focus on fiscal responsibility as well as celebrating national champions. We have seen policies that have reaped the opposite consequences in markets.

Do you think that this president is still pro-growth? I do think he's a business guy. I mean, we all know he's a real estate developer from New York City that was very successful and had times here where, just like any in the real estate business, there are ups and downs. But he has demonstrated the ability in business to create wealth.

and I think he wants to do that for America. And so, yes, I think he is. Now, what he's going about doing in reordering our economy and trying to sort of rebalance, if you will, the balance of trade as well as the burden sharing that occurs with us and our allies, importantly in the financial realm as well as the defense realm. Although you have a unique...

position because you wear the hat of both being in government in a leadership position and also talking with tons of companies while being vice chair of MOLUS.

Do they have the confidence to invest? Do they feel like they can be expanding right now and have confidence and conviction that ultimately this whole mix will benefit where they're heading? Well, I mean, I would say, first of all, we're still America, right? I mean, there is still this unbelievable country that we've got with, and we can go through the various aspects of what draws capital and investors here. Rule of law, transparency, you name it, innovation, the rest. We're still that.

The Trump administration understands, the president in particular has said the biggest asset we've got is this huge consumer market that the world now has tooled up to take advantage of. He's trying to use that to go in and create a more stable trajectory longer term, both from a fiscal and economic standpoint.

I think, listen, right now as we started, there's a lot of signals that are creating this sort of question on the minds of individuals, whether they are strategics, whether they are sponsors, and how to go about in terms of conducting their business. And that's why I say again, really, really important that we see manifestation of success. The president's really good at communicating. I hope we can see some communication of success

and that people will begin to understand what the trade-off here is. This is ambitious stuff. Let's finish on this. Governor Youngkin was in your seat yesterday, and we asked him this question. I'll phrase it differently. At the moment, there are two very left-wing politicians in this country filling stadiums, getting support, at a time when the Democratic Party is an absolute mess and support is rock bottom. I get that.

But do you worry that if the president isn't successful, that a number of years' time this pendulum could swing aggressively to the left? If the right can't provide the solutions, does this country seek out solutions from the left? Look, all I know is the left is so in tatters and the one pillar that they've got of any kind of unity is so extreme.

on the cultural side and the design of where they see the world there's no way that the mass of this country in terms of an electorate is going to adhere to that extreme bernie sanders a_o_c_ agenda there is just no way now not to say that there will be unhappiness if we don't see success again which is why i come back to the point it's important that we act with that we see some uh... urgency and acting with dispatch in washington because you understand the risk here

To bring up the EM example, that you swing between Bolsonaro and Lula, Bolsonaro and Lula, and you start to resemble what we see in Latin America repeatedly. We are America. We are America. We are not Brazil, right? So we have a long tradition of continued...

institutional guardrails, protections. We have the deepest, broadest capital markets there are. I still believe that we can get through this. Again, as you said, this is a very ambitious goal that the president has set out to sort of rebalance it is where we can head and the fact that there have been some people left out. And when you talk about these stadiums that are filled by Bernie Sanders and AOC acolytes,

It is those people that are looking for the answers. And frankly, a lot of sort of people who feel left out if they're at those stadiums, they are looking to the president to deliver on the promises that he's made. It's an ambitious agenda. We've said it repeatedly on this program for the good of the country. We hope he's successful. Eric, it's good to see you. Thanks for dropping by. The former House Majority Leader there, Eric Cantor.

This year's bear case, very quickly.

become in the base case. Nobody covers tariffs like Bloomberg Television. Context changes everything.