Bessent Says US Must Win on AI and Quantum; Hollywood Shaken by Tariff Threat
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Live from New York, I'm Caroline Hyde and this is Bloomberg Technology Coming up, markets, they are on edge as trade concerns halt the four-day winning streak for tech stocks. This as President Trump announces plans to impose 100% tariffs of films produced overseas, slamming media companies. And Microsoft surpassing Apple, becoming the largest US company by market value.

And in just a few minutes, Treasury Secretary Scott Besson will be speaking from the Milken Conference in Los Angeles. We'll bring you that conversation live as it gets underway. President Trump is taking aim at the movie industry and announcing plans to impose...

check this out, 100% tariff on films produced overseas. Now, it's all in a post on Truth Social adding, quote, "We want movies made in America again." Bloomberg's Tyler Kendall joins us now for more details. And in fact, movie moguls in the industry went to the president saying, we want movies made in the US with tax credits. He proposes something very different.

Yeah, hey, Caroline. Well, President Trump has often taken the stick-versus-carrot approach, saying no to those subsidies and incentives instead of yes to his tariff plans, as you alluded to there. Bloomberg News reporting that John Voigt and his agent met with President Trump at Mar-a-Lago over the weekend and asked him to put forward

some tax incentives, including expanding a current tax credit that would help boost production in the U.S. But there's still, now that he is pursuing this tariff route, there's a lot of big questions here, including how will a movie actually be valued for tariff purposes? Movies are, of course, more of a service instead of a good, not to mention that one film could be produced in multiple locations. Does this extend to foreign-based production companies or U.S.-based production companies that make their movies overseas? What we do know is that

President Trump has indicated that he would invoke these tariffs on the basis of national security concerns. That signals two things for us. One, that's likely the justification that this White House will take whether or not that means they're going to invoke IEPA or Section 232 really remains to be seen since we haven't actually seen an executive order

putting these into motion. We do know that the USTR and Commerce Department are working on looking into this. And the second thing it indicates is that these tariffs would likely face some heavy legal scrutiny if they are put into effect. As you mentioned, the movie industry was caught pretty off guard by the announcement.

I mean, we're seeing certain analysts saying this would just wreak devastation upon the U.S. entertainment industry, Tyler. More broadly, costs would rise for many. But remind us of perhaps what the anxiety has been. Why other countries, U.S., outside the U.S., we think the U.K., we think Canada, have managed to pull away a lot of U.S. production?

Right, and that really does have to do with the tax incentives and lower labor costs as well as production costs. And the Motion Picture Association does say that employs about 2.32 million people in the U.S. in this industry alone. But I actually pulled some other statistics for you, which is that U.S. spending on film and TV production fell 28% between 2021 and 2024, according to data from research firm Prod.

PRO and it's countries that you're talking about like Australia New Zealand the UK also Canada that have really pulled ahead when it comes to lessening these these higher costs in order to make movies and quickly I will just throw one other country in there because this isn't the

first time that we've seen movies come into this trade war calculation and talk. It's China actually, not necessarily that they've been taking U.S. production, but of course, as you well know, last month they did say that they were going to restrict U.S. films access to their market. So it's kind of continuing how we're seeing these tariffs really go beyond just what we traditionally think about.

Certainly, Tyler Kendall with all the latest from the White House. We thank you. Now let's get more market reaction, not just media entertainment stocks, but more broadly. Daniel Morgan's with us, Senior Portfolio Manager at Synovus Trust Company. And Daniel, you focus mainly on the magnificent seven big tech and chips more broadly rather than media names, but it does feel that once again tariffs are the eye of the storm.

Yeah, so Carolina, I mean, it keeps extending to different groups. I mean, obviously it's going to affect a company like Netflix, which is kind of used to be in the talk of those saying Magnificent Seven.

But again, you know, Caroline, if you look at the tariffs in terms of all these different industry groups, it seems like technology is the hardest hit. Even though there's a reprieve on PCs and smartphones, you don't know if that reprieve is going to be lifted up. And chips, another sector that is obviously heavily impacted by tariffs. So that's really been the...

you know, black cloud over the group that's kind of kept it from rebounding like the S&P 500 has. It's still down about 15% to 16% off mid-February highs, where the S&P is only off about maybe 8% to 10%. So it's a tough sector, not only media and movies, but also...

in the tech sector. Let's get into individual names, Daniel, because of course we just talked about how Apple has switched places with Microsoft. It's no longer the most valuable company on the S&P, for example. We seem to see hardware hit the hardest at the moment. Is Apple just one that you cannot re-buy into until there's a future catalyst?

Caroline, Apple's a tough stock because before the tariffs even came out, there were a lot of concerns that there would be a delay in users upgrading to the new iPhones because they didn't have the same AI, Siri, personal assistant technology that everybody was hoping for that would be unveiled. It looks like it's going to go into the iPhone 17. That's not coming out until the fall. If you look at the most recent quarter, even though there were no

Direct tariffs at the time. I mean iPhone revenues were only up about 2% So they are in a really difficult position Carolina because they are so heavily entrenched in the Pacific Rim Not just China, but through all their supply chains and manufacturing They do about 15% in India But for them to move that out of that part of the world is going to be very challenging So they have a very tough road to go and there were

factors and headwinds that were up against them even before the whole tariff news. Daniel, we actually at least got some sort of admission of a lack of clarity from executives and we got some feeling for fundamentals in earnings. We've still got earnings to come. I know you've been thinking about what AMD is going to give us. Tonight we get Palantir and it's been a real winner over the last year or so, but even software feels a little bit of pressure today. What do you look for in some of these earnings still left?

Well, Palantir is a whole different game, Caroline, because they're in the defense industry, but they're a tech sector. But, you know, looking into, let's say, advanced micro devices, which reports on Tuesday, we know that Intel, when they reported two weeks ago, their data center group revenues were up 10%. We'll get another window into data center revenues. Yeah.

I'm afraid, Daniel, I'm going to have to leave it there for a moment. So kind of you to join us, but we have to go over to the Milken Conference in Los Angeles. Treasury Secretary Scott Besson has started speaking. In the 1970s, he had the rare combination of guts and intellect to defy the Wall Street consensus with his heterodox approach to junk bonds. He pioneered a new asset class known today as high-yield bonds.

By staying true to his vision, Mike overturned decades of economic orthodoxy. He bootstrapped entirely new industries by redirecting billions of dollars in capital to non-investment grade companies. His colleagues on Wall Street told him he was delusional and a fool, but ultimately history proved him right. Sound familiar?

Like Mike Milken, President Trump has no shortage of critics in establishment circles. But he proved them wrong in his first term, and he is proving them wrong again today. On President Trump's first day in office, he vowed to usher in

a new golden age for our country. A golden age America deserves a golden age economy. So for the past 100 days, we've been preparing the soil. We have uprooted government waste and harmful regulations. We have planted the seeds of private investment. And we have fertilized the ground with fresh tax legislation.

Next, we harvest. And we want you to harvest with us. America is the shelling point of global finance. We have the world's reserve currency and the deepest and most liquid capital markets and the strongest property rights. For these reasons, the United States is the premier destination for international capital, and the administration's goal is to make it even more appealing for investors like you.

This morning, I will explain how we plan to achieve that goal. The primary components of the Trump economic agenda, trade, tax cuts and deregulation, are not stand-alone policies. They are interlocking parts of an engine designed to drive long-term investment in the American economy.

Our goal with trade policy is to level the playing field for our great American workers and companies. With a level playing field, American industry can out-compete all challengers.

Tariffs are engineered to encourage companies like yours to invest directly in the United States. Hire your workers here. Build your factories here. Make your products here. You'll be glad you did, not only because we have the most productive workforce in the world, but because we will soon have the most favorable tax and regulatory environment as well. This is where tax incentives and deregulation come into play.

You may have heard one big beautiful bill floating around Congress. This bill is big and beautiful for Main Street America and investors alike.

The President's signature tax legislation will prevent an enormous tax hike on Main Street by making the small business deduction permanent. It will also provide tax credits and deductions for research and innovation to stimulate investment in high-tech operations. It will restore 100% expensing for equipment while expanding that incentive to new factory construction.

The objective: to accelerate investment in American industry. To make that investment as seamless and rewarding as possible, President Trump has embraced an ambitious deregulation agenda. This includes expansive permitting reform. The president doesn't want to just drill baby drill, he wants to build baby build.

To that end, he has signed executive orders to reduce the federal approval process for new energy and construction projects from several years to just a few months. This simple reform will unleash the creative potential of America's builders. It will empower business leaders like you to put your capital to work as quickly and efficiently as possible.

The building renaissance will be fueled by the president's energy dominance agenda. Energy is the base layer of all economic activity. That's why the administration champions an all-of-the-above approach to energy development to drive down the cost of doing business. I hope you can see the bigger picture now.

The Trump economic agenda is more than the sum of its parts. Trade, tax cuts and deregulation may be three distinct policies, but each policy is mutually reinforcing and acting in concert, they push toward the same goal: to solidify our position as the home of global capital. The result of the President's economic plan will be more.

More jobs, more homes, more growth, more factories, more critical manufacturing plants, more semiconductors, more energy, more opportunity, more defense, more economic security, more innovation. In short, more of all things we need the most.

The President believes we can achieve more together. This is the abundant vision he has for the future. He wants everyone to be a part of it. Thousands of businesses are now catching the President's vision. Since he assumed office in January, companies have pledged to invest trillions into the U.S. economy.

President Trump has secured more investment for our country in 100 days than President Biden did during all four years. Entrepreneurs, too, are starting to understand what the president is trying to accomplish. March saw one of the highest levels ever recorded for new business applications. Many of these men and women, like many of you, are grasping that America first is a blueprint for a more abundant world.

For now, a parting thought. When I entered public service, I spent more than 40 years in the asset management business. There, one mantra guides one of the world's most successful investors: "Never bet against America." Warren Buffett coined the phrase, and it's been his lodestar as long as he's been in the game. "Never bet against America" captures a time-tested truth.

The American economy is unstoppable. Throw whatever you will at our capital markets, the Great Depression, two world wars, 9/11, a COVID recession of the last few years, or sky-high inflation, each time the American economy gets knocked down, it gets back up again. And it gets back up even stronger than it was before.

U.S. markets are anti-fragile. Indeed, the entire history can be distilled into just five words, up and to the right. On a long-term horizon, it's never a bad time to invest in America, but especially now.

The United States is entering a new golden age of economic prosperity for both Main Street and Wall Street, and we don't want anyone to get left behind. Come with us so we can build a more abundant America together. Thank you all. Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

and EY Consulting. Technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But let's

But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge. But here's the best part.

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Please welcome Institute Chairman Michael Milken. So as a scholar in college, a leading university, an accomplished fund manager, former professor and distinguished career in finance and academia, your range of life options was unlimited. What inspired you to choose

the field of public service, joining President Trump's administration in a very high profile and, I should say, high pressure role. I would agree on all the above.

So, Mike, there was a long arc desire for public service. I had tried or considered going to the Naval Academy, and I was applying in 1979. I wanted to serve my country. Due to sexual orientation, I was unable to. So even since I was a teenager, I wanted to serve my country, and I'd had the

a great career like many people in this room in finance. The country had been good to me. And as a economic history scholar, I was shocked at what was happening with these budget deficits. So last year, 6.7%

of GDP, highest ever when we weren't at war, weren't in a recession. And I wanted to come out from behind my desk and be part of the solution because I was afraid that four more years of that and it was kind of a deeply cynical plan, I thought, run up the debt and then have to raise taxes and really stymie the American engine of growth, innovation and opportunity.

Well, once again, we're very happy you took up that mission, and I can't think of a better person at this time to be the Secretary of the Treasury. Let me try. Over the years, we've had a number of Secretaries of Treasuries that were not really into financial markets, and so you're the right person at the right time.

But it's interesting when I think about it, how do you strike the balance between the administration's goal of re-industrialization in the U.S. and the risk of isolating the U.S. economy?

Well, I think that they're not mutually exclusive. And as I've said many times, that obviously in this trade puzzle, China is the biggest piece. Where do we end up with China?

And I said during IMF week in Washington, said, you know, it's possible that we could, as Ray Dalio might say, do a big, beautiful rebalancing. That if we want more manufacturing, everyone agrees, except Chinese leadership, that they need more consumption. We could actually do that together. And then, look, on the other side,

that getting better terms of trade is not always a

straight line, it's not always a pleasant process, but I think at the end, the trading relationships will be stronger, our security and values ties will still be there. I look back and I think about the example of NATO and German fiscal spending. So I lived in London for a long time, ran the Soros office there,

And since the, well, forever actually, whether it was a French president, the Italian prime minister, people in Brussels were trying to break open the German piggy bank.

And President Trump, not in a straight line, not in what would be what anyone would call a diplomatic manner, has gotten NATO countries to step up and meet their spending requirements. I think these numbers are approximate, but I think only 25 percent

When he came in in 2017, only 25% of NATO countries were meeting their spending requirements. Now I think only 25% aren't. So the Germans, for the first time, are going to allegedly do a big fiscal spin, which will drive European growth. And so can we do the same thing on trade? I think so. So let's talk maybe about a specific situation.

You recently signed an historic economic partnership with Ukraine. And as you said, there was a little few bumps along the way. Can you walk us through the role that the Treasury played and what is expected to come out of this agreement? And let's walk backwards. I was...

bemused, gratified to see that on Saturday, as I was coming out here, excuse me, Friday, as I was coming out here, Washington Post lead headline was Russia now nervous after U.S.-Ukraine signed deal and that

I believe that this would happen in February. President Trump believed that it would happen in February. And this was President Trump's idea. He likes negotiating, as you know. A lot of people in this room probably know. And he likes creating negotiating leverage for himself. And the Ukraine Investment Partnership, the economic partnership, was his idea. And he believed that it would...

do several things. One, it would create more leverage for him with the Russian leadership when it was time to go to them. So the idea was start with Ukraine, sign a deal that shows that there is no daylight between the U.S. and the Ukrainian people.

It would be a symbol to Ukrainian people that the U.S. is still there. It would be a symbol to a tired American public, skeptical of more financial commitments, that it was possible to have a shared prosperity with Ukraine.

And then it would, in essence, be a tacit security guarantee because of the economic partnership. I went to – and just to give you the timeline, so he tasked me with drawing up the document, speaking with Ukrainians. I thought it was a good idea to actually go to Kyiv for anyone who –

hasn't been, you fly to Poland, you take a 10 hour night train into Kyiv and you do that to keep from getting shot down, which is good. Everyone was saying, oh, this isn't a good deal, this isn't a good deal. I said, well, if it's not a good deal, why did the Russians bomb Kyiv for the first time? So I went on February 10th, the Russians bombed Kyiv

at four in the morning for an hour for the first time since November because they knew the train arrived at eight and uh so before I got there so if the Russians uh if we were pro-Russian and this was a terrible deal for the Ukrainians why didn't the Russians want it signed so uh then

President Zelensky elected not to sign it that day. He elected not to sign it at the Munich Security Conference a few days later. There was a little incident at the White House some of you may have seen. President Trump called it great TV. And when...

when the deal went south that day, and I actually think in terms of the final deal, and Mike, I'm sure you, everyone in this room has seen it, that sometimes the blow-up, you end up with a better deal. So February 28th was the blow-up in the Oval, and what was going to be signed that day was actually just a four-page memorandum of understanding. After that blow-up, Treasury made the decision

to try to make the blow up into an opportunity. And my team, I instructed my team to go straight to writing the full agreement, which is six different agreements, varying lengths, but hundreds of pages. So we worked on that document. And then when there was the kind of recovery and trust between President Trump, President Zelensky, after the

meeting at the Vatican, we signed the deal a few days later. And look, I think it's win-win. What it is not is one of these rapacious Chinese deals. Sign here. It's loan to own.

You're going to default on the debt. We're going to own all your minerals and that's life. This is economic partnership. They put in assets. We put in capital from the DFC, American Best Practices and Know How. And it's 50/50. It's equity, not debt. And some of our European partners were criticizing me at the G7. And I said, you know, guys, if you want to trade, if you want to do a debt for equity swap,

Why don't you write off your Ukraine debt and we'll let you into our partnership? No one's called me yet. Well, you know, I think what struck me, Mr. Secretary, was this major oil fine off Guyana. And Venezuela rattling the sabers and had sent a couple military ships. The U.S. then asked them, what you're doing because that's Exxon, that's a U.S. company. And I think...

And that, to me, underlined part of the strength of this agreement you struck. Let's talk about one element that many people have been concerned about, and that is, what are the key components of deregulation? I know it's part of your economic strategy to spur growth. Are there any specific regulations that are at the top of your list for reform?

Yes, as I said at one of the smaller group meetings last night, maybe a few people in the room interested in private credit. And Treasury is taking the lead on financial deregulation. And I think private credit is an incredible new-- the bolt-on to the world's deepest-- the breadth and depth to the world's deepest capital markets. But the growth of private credit

Tells me that the regulated banking system has been too tightly constrained. So We have set up a Treasury I convened something called F sock financial stability oversight council and President Trump tasked me with helping him choose the leaders for the financial regulators so we

have installed a new vice chair for supervision at the Fed, Mickey Bowen. We are going to have a new OCC head, FDIC

Paul Atkins has just taken over the SEC. Brian Quinn is at CFTC. So the regulators are aligned, and we're going to be safe, sound, and smart in redoing regulated financial entities. And then, as I mentioned in my talk, energy...

That's a pretty easy playbook, but the real impetus is going to be on permitting across all industries, and that's where the EPA comes in, putting pressure on state and regular... The federal government's going to put pressure on state and local governments to speed up the process, the permitting process. So what's the use in giving...

one year depreciation if it's 36 months to break ground. One CEO recently told me, he was talking about the difference between doing business in Texas and Illinois, and he said, "We started a project in Texas from the day we went to the city of Houston to talk about it to the day I cut the ribbon, took two and a half years."

In Chicago, we are still seven years into the planning process. So we want to make everyone look more like Texas. Well, you're in an area here called Malibu where maybe in 15 years you can build a house. So we are very accustomed to this. Let me talk about another issue.

It was in 2017 that our theme of the global conference was "Building Meaningful Lives." Part of that was a reflection on the disruptions we saw emerging from advances in AI, robotics, digital assets. The world, we felt, was heading for significant change, and we scheduled dozens of sessions around that area.

Eight years later, you're now the Treasury Secretary, navigating the nation through these various changes. Give us a broad view as to how you see these issues today. Well, I said in my confirmation hearing that we have to win in AI and quantum.

That if the United States doesn't take the lead if we don't win Every everything else doesn't matter that if we if we lose the edge there and and I think China's catching up which is natural, but I think we will maintain the our leadership on that and

And again, what we are trying to do is not pick winners and losers. We are just trying to set the environment for the best opportunity for our entrepreneurs to succeed, stop intellectual property theft. And in terms of making it accessible to all Americans, I think that's going to be very important. I was out on the campaign trail with President Trump

And I was struck by there had been a big migration by the venture capital community, President Trump. So on one side, you've got the VCs, the most innovative people in the world. You've got Elon Musk, the richest person in the world. And the president's penultimate rally that I went to was in Pittsburgh.

these steel workers showed up and they got their vests on, they got their hard hats, they got their families. And the real idea is to make sure that innovators can innovate and steel workers can have the same quality of life and opportunity and that their kids

could be the Silicon Valley entrepreneurs, or they can stay and have the same life or better that their folks had in Pittsburgh. Well, that is a great goal and we hope we achieve it from that standpoint.

Interest rates. You know, you've often talked how important that 10-year interest rate level is. And when I look at financial markets over a long period of times, I can sometimes identify when that individual had come into financial markets by what period of time and the interest rates. So in the 1970s particularly, the volatility of financial markets

You saw over the next decade many of the people that were CFOs became CEOs because how you financed your company allowed it to exist. In the last few years, we've lost three as independent companies, major financial institutions,

due to the fact that they had bought a quarter of a trillion of U.S. government intermediate securities and borrowed overnight. So when you look at interest rates in the 10-year, and as I mentioned to you, I got this app on my phone that any time the U.S. government's prices change by more than 2% in two hours, off my phone goes. So

In the 1950s... Please don't share that with the president. So in the 1950s, if you were trading governments, it was like watching paint dry. You could see an entire variation of maybe 2% in price in an entire decade. We now have seen a variation of more than 2% occur in more than one day. How do you see the importance of the level of interest rates...

in our economy and what you want to achieve? I think that I'm not going to talk about the Fed. I said I won't talk about their future mistakes. I'll only talk about their past mistakes.

So I thought it was important to focus on the 10-year. And the 10-year has a lot of things wrapped in it. It's the short-term rates. It's the term premium. And we're focused on creating the...

best environment for stable rates. And I think a lot of what we saw in April was this periodic unwinding that I've experienced, you've experienced, most people in this room have experienced in their career. I'm a big believer in the Hyman-Minsky, stability leads to instability. So I think we probably had a very stable period

A lot of leverage players built up very large positions. There was an uncertainty shock there out. But what we're trying to do is to create, go back to the Trump 1.0 noninflationary growth. So I think if we can put noninflationary growth in place and take away, back to your initial question, why am I sitting here, is to take away the credit risk of the U.S. government.

then I think rates will naturally come down. And as I've said before, there's an opportunity here that if we can do it, the goal on one side, I call it reprivatizing the government or reprivatizing the U.S. economy.

On one side, we want to bring down government borrowing slowly, maybe decrease the deficit by 1% a year. So by the time President Trump leaves office, we're back at the long-term average of about 3.5% deficit to GDP, and the denominator grows faster than the numerator. Debt to GDP goes down. So we're decreasing debt.

the government and the economy. At the same time, we are right-sizing government spending and

government employment, and then on the other side, through financial deregulation, we're re-leveraging the private sector, and then the excess employment that was shed in the government economy can go to the private sector. One thing, I've never lived in D.C. before, but one thing that really struck me was within a 10-mile radius of D.C., 25% of the nation's economy pulses through there.

And that's too much. Traditionally, it's about 21%. And we've got to make sure we have a stewardship obligation to make sure that that is spent wisely. So we were making decision where to have the Milken Institute School of Public Health

Besides the fact the executive office building is one block away from GW, but every major decision on medical was located within a mile or so. And so the decision ultimately with the talent we had there with Len Goldman and others was we would go to GW because the decisions were being made there.

Now, as you know, we spent 12 years building this building across the street from your new home at the Treasury and the Center for the American Dream. And we thought it was a four-year project. It turned out to be a 12-year project. But this passion for the ideal of American Dream, I believe, is something you truly believe in.

We've been asking 10,000 individuals in more than 100 countries around the world that live there or have come here how they interpret that phrase. What does that mean? What does the American dream that you're going to protect for so many of us, what does it mean to you?

It means a shared vision. We're going to approach the 250th anniversary next year, or we will have the 250th anniversary next year. And it's what does the next 250 look like? And to me, it's the equal opportunity for great outcomes. Like I said, it's equal opportunity if everybody

You're one of the children of the construction workers in the Duquesne Arena on November 4th that you might be sitting here because you founded a financial services company or because you're a medical researcher or it's the opportunity for people in this room to continue to prosper. But to me, it's two things.

is the fact that the system works and that there is mobility, that we get rid of these discouraging surveys of families and children who don't think they're going to do as well as their parents.

We need a belief in the system, and we need to continue making sure that the system works. So to me, that's the American dream. Well, you've wrapped that up in a bow for us here. What we have found in every survey for 12 years is the number one essential condition that exists for the American dream was freedom to live your life, whether you wanted to be a steelworker,

or whether you wanted to work in finance or wherever you wanted to pursue or whether you wanted to be the soccer coach of your daughter's soccer team. So, Mr. Secretary, we couldn't be happier that you took up the mantle of public service, and we look forward to your stewardship for the next few years. Thank you very much. Thank you. Thank you.

You were listening to US Treasury Secretary Scott Besson, of course, with Michael Milken at the Milken Conference over in Los Angeles, just tying up some of the statements that were made more broadly by the Treasury Secretary, talking about how the United States is anti-fragile. In particular, they dwelt upon the 10-year, important to focus on the 10-year Treasury, and has lots of components to it. He's saying they're trying to create the best environment for stable rates.

He wanted to go back to Trump, 1.0 noninflationary growth for the US economy, take credit risk out of government debt and bonds more broadly, rates can drop, he thinks. And there's too much of the US economy pulsing around Washington DC in particular. Talked about his view on the American dream, but also a little hint at what means for security more broadly, talking about the US Ukraine deal being a win-win.

wanting for the banking sector that stability, but talking about the system being too tightly constrained, too over-regulated. And then to technology we turn, and he said that the US must win on AI and quantum, but that China is indeed catching up. Let's check in on these markets post-

the Treasury Secretary's comments. We're still down 0.5%, if you look at the NASDAQ 100, have been trading around this range throughout the day. This is more a symptom of what's happening in the grander scheme of macro, worried about trade, tariff concerns, particularly focused on the world of Hollywood right now, where indeed the milking conference is upon us. Move on and have a look at what's happening. Crypto has been a risk asset that's been selling off as well. Bitcoin down by about 2%. We're at 93,853, just showing that risk-off attitude. But the individual stocks that we want to keep an eye on

Because, look, you are seeing pressure throughout the tech sector today. Netflix and the eye of the storm was worried about the movie industry and about content being produced abroad. We're down by 1.6%. Dig into that in a moment. We've still got earnings this week. The AMD on Tuesday. Palantir comes after the bell tonight. We're down 0.3%. Remember, this stock has been on a tear, up more than 60% so far this year. Software has won out.

and even when they're really focused on the defense sector, Apple, off by more than 3%. It is no longer the most valuable company in the United States on the S&P 500. It's been supplanted by Microsoft. We're in so many problems for Apple right now post their earnings. Let's dig into it because Bloomberg's Mark Gurman is standing by. He too in L.A., but...

Look, Mark, in this week's Power On newsletter, you write that Apple faces like a make-or-break moment, a laundry list of once-in-a-decade problems hitting at the same time. Tariffs front and center, but so much more, Mark.

Yeah, that's right. I mean, Apple is able to deal with a lot, right? But right now they have, I would say, more than a lot going on. They have tariffs, right? That could upend product pricing, device planning, its supply chain. You had a judge in California rule last week that Apple must stop charging developers for in-app purchases completed outside of the App Store. Obviously, the vast majority of revenue Apple gets from the App Store is in-app purchases. That's why Apple tried to protect Apple's

that 27%, 30% commission at such an extensive level. You have the threat of losing another $20 billion business, the search deal with Google. Google obviously pays Apple that much to make the Google search engine the default provider on the Safari web browser across all of Apple's products and services. And so that is another lever that could potentially hurt Apple. You have the ongoing struggles in AI. You have a developer conference in June.

You have the ongoing DOJ lawsuit. You have increased scrutiny happening in the European Union, in Korea, in Japan. Constantly new threats of fines for a large percentage of their local businesses. And of course, the backdrop is the company's performance in China, where a turnaround is very much needed after continued annual declines there. And we saw that in their earnings posted just last week. Mark Gurman, it's...

Or as always, a must read. I urge our viewers to go and check out Power On. Thanks for summarizing it for us. Meanwhile, let's get over to the world of big tech, from big tech to the big screen, because media stocks, they're under pressure after President Trump announced his plans to impose tariffs on movies produced overseas. Lucas Shaw standing by with more. And look, this feels, this truth social post where we learn about a potential 100% tariff has more questions than answers for the industry right now.

I mean, without question, a lot of people were thrown off guard, very confused by what exactly it meant and also what Trump's real intentions are. Based on our reporting, we know that he spent some of the weekend with actor Jon Voight and Voight's manager, Stephen Paul. Jon Voight is one of Trump's ambassadors to try to figure out how to bring production back to this country. Keep in mind, there's still a lot of production that happens in the United States, but there has been...

a lot of production that has moved to places like the UK and Canada. You know, I think they talked about things like incentives, but Trump loves a tariff, and so he started talking about tariffs. More stick than carrot. And so we see who most implicated here, because Barclay's already coming out with a note basically saying, we export more than three times than we import in terms of movie making, and you're hurting the very industry you're trying to help.

Yeah, the Motion Picture Association, which is the trade group that represents all the Hollywood studios, has not said anything publicly, but they do have reports where they show that the U.S. is a net exporter, that we have a positive trade balance with every other country. I mean, you just think about it, the biggest...

highest-grossing movies of the year, every year tend to be U.S. movies, the most watched TV shows, the most popular streaming services. All of these are American products for the most part. In terms of the impact, it's really hard to know without knowing how the tariffs would be applied. A lot of people have asked me, like, how do you even tariff a movie? And I'm not sure what to tell them.

Exactly. What value is the movie at and where exactly are you finding that revenue stream to hit? Lucas Shaw, we appreciate it. I'm sure we'll have plenty more questions coming your way soon. Meanwhile, though, coming up, Elon Musk says AI should be used to replace the functions currently done by some public workers. That conversation's up next. Plus, so much more from the Milken Conference, a conversation with BNY CEO Robin Vince. This is Bloomberg Technology.

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Let's go back to the Milken Conference now for a conversation with BNY CEO Robin Vince. Romain Bostic, Shinali Basak, they're standing by. Thanks, Caroline. Live here on the Milken stage, the CEO of BNY joins us right now, Robin Vince. Robin, you're a man who's been traveling the world. You're a man with $2 trillion in assets under management, $53 trillion under your custody.

What are your clients asking you right now? Yeah, well, there's a lot going on. So it's great, first of all, great to be with you, great to be here at Milken. This is one of those places where everything comes together from around the world. As you said, I have been traveling. And actually, you just hear different things from clients in different places according to where you are. I've been in Europe. I've been in India. I've been in the Middle East. That's all over the course of the past couple of weeks.

And I would say the sentiment varies a little bit. We're having to explain. So first of all, there is a signal and noise problem when we talk to our clients internationally. People can't really tell the difference between the tactics and the strategy of what's coming out.

What's the difference between tariffs and real trade policy? What does it mean on deregulation? Why are these things happening? And so I think all U.S. CEOs find themselves in this perspective. We were joking about this earlier on, but we kind of have to be a bit explainers in chief first and foremost. So what's actually going on? That's what they're interested in.

within those continents, there are different perspectives as well. So in India, there was a lot of conversation about, okay, what are the opportunities for India? What might a trade deal look like? How could India benefit from the opportunities associated with all of this? In Europe, a little bit more.

What on earth is going on? Is the U.S. a reliable partner? It's one thing to be confused by what's going on in the U.S., but are those clients actively or at least specifically talking about pulling away from the U.S.? Well, I think some of them are thinking about it. And so in Europe, I would say there's a little bit more

of that narrative, less so in the Middle East. The Middle East, a recognition that they sort of sit in the middle of the world geographically and also geopolitically in some cases. And so they observe what's going on. They take some reaction to it. But at the end of the day, they're interested in long-term relationships. In Europe, I would say there's a little bit more of a reaction against it. Maybe they feel a little bit more that they've been put on the spot.

And there are certainly conversations about can they de-risk? Now I'll say, de-risking is a little easier said than done sometimes. There's a reason why the US capital markets are the world's greatest, the most liquid, the dollar supremacy, the Treasury is the risk-free asset, the growth in the United States. It's not so easy to just say, hey, we're out. Back to the Treasury market, because this is where

BNY Mellon is a huge player. BNY is this massive central intermediary. What is the risk? Ultimately, it's not just the

We've seen in the midst of the trade war. It is also what we're going to see in the future as we get closer to that X date. Do you have any concerns around how countries around the world might view the treasury? Well, I think we all have to be very realistic about the fact that the treasury market is one of the world's most important markets, as you said. Yes, liquidity was reduced. The depth at the top of the order book was down probably about 80% or so.

at one point two or three weeks ago. Now that doesn't mean that the market wasn't functioning, it was working really well. We were settling over 20 trillion dollars of treasuries a day and it was all working but it was harder to move blocks of risk. Now

It's a complicated problem because yes, we've got the X-State. Yes, 7% deficit is a significant thing to be running and at some point that has to be brought under control. That is not a long-term tenable situation. It's got to be brought down to a more manageable number. So people are looking at that.

Compounding all of that is the question of, okay, do people still have the faith in the United States and the Treasury market? That's why I would say, of course, people are talking about it. But there are a lot of things that underpin the U.S. Treasury markets and the confidence, the dollar supremacy, the rule of law, the liquidity. And it's easier said than done to pull away from something like that. The Treasury Department has been talking about the potential to provide relief for the banking system via the SSI.

SLR, the supplementary leverage ratio, in order to make treasury markets function

more easily in times of these sorts of stress. Do you think that's necessary? Does there need to be regulatory relief more immediately? And will it fix the problem? Well, I think it will be helpful is the punchline answer to your question. And Secretary Besson's been pretty clear about this. He is a supporter of making sure that we have the deepest, most liquid market in the world in the Treasury market

to benefit the US taxpayer and the US economy. And so the question is, what are all of the things that can be brought to bear to make that true? And this is a little bit of an extension of what the Secretary Besson and President Trump have said in terms of the policy. It's a three-legged stool. They have an objective around trade, they have an objective around taxes, and they also have a deregulatory agenda.

And what we need is we need banks and other market participants to be able to fully access the market and to intermediate and keep them liquid in the treasury market. I think SLR reform is part of that equation. Is that liquidity there right now? And I specifically go back to the start of April when you had the big sell-off in financial markets, which a lot of people speculate was tied to a potential gum-up.

and what was going on in fixed income, specifically with treasuries. Well, I wouldn't say there was a gum up. The infrastructure was working fine. The rails were in good shape. What there was was a lack of buyers and we had a reduced liquidity in the market for sure. And that's not the same as, I don't want to get into semantics, but isn't that

The gum up? If the buyers aren't there, then what happens? I think they're two different things. One is, is there an actual good operation in the market? Are things functioning properly? If you do a big trade, will it settle? Will it flow through? We've had problems in the past in the markets, but that hasn't been true. We didn't have any of those issues this time. This was a question of buyers and sellers coming together in the marketplace, and was there enough liquidity? And it was down a lot.

But that's where I think things like SLR reform could be helpful because we want intermediaries to play a role. Banks have to play an important role in the treasury market. They used to, but they've been moved out of the treasury market by rules like the SLR. And we're certainly actively in favor of thinking about that leverage ratio reform as the regulators are now talking about it. The other problem you brought up was the deficit. Realistically, another part of the agenda here for the White House

is the tax reform as well. If you do see some of the president's measures get passed, do you have faith that the deficit has any chance of being anything closer to being closed?

closed? Well, it's going to be important that ultimately it happens. 7% is not a long-term tenable situation to have as a gap. And so we need to see either on the tax side or on, of course, the growth of the economy side. If you have a bigger economy, you can actually collect more taxes, even if taxes at the same level are reduced. And so we want the economy to grow. Growth enables everything else.

All right, Robin, we have to leave it there. Really appreciate you taking time. We're going to check out your panel a little bit later live from the Milken stage. Robin Vince, the CEO of BNY. Caroline? Great interview. Shanani Basak, Romaine Bostic. This is Brunei Tech.

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