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00:00From the world of politics I abhor bullying and abuse of power anywhere in politics. This party or any other party to the world of business. Not all recessions are created equal either. You know what kind of recession we might be in is just as important. This is balance of power with David Westin. From Bloomberg World Headquarters in New York to our television and radio audiences worldwide. Welcome now to Balance of Power at this hour. The Conservative Party leadership is scheduled to meet in London to decide once again the fate of Prime Minister Boris Johnson. For the latest we welcome now Bloomberg's Alex Wickham from London. So Alex thanks for being with us. We've seen the prime minister quite a bit today in parliament itself before this liaison committee. What is going on. Yes it really does feel like it's his end game. Boris Johnson's premiership here today. The Conservative Party's 1922 committee that's the all powerful committee of Tory backbenchers is meeting right now to basically decide to change the rules that will to allow them to have a vote to get rid of Boris Johnson. We've also got a delegation of Boris Yeltsin's top cabinet ministers about to head to Downing Street. Meet the prime minister in person and tell him the time's up. It's time to go. Is there any doubt in most people's minds over there in London's point that it actually is the end game. And if so how long may it take. Is is some thing of today next week. How long would it take to using. We've been marched up this hill many times before but it really does feel like this time it is. It is the final moments of Boris Johnson's premiership. I think tonight or tomorrow perhaps as late as Monday it will be decided. And then it's a question. Very much of is it a handover of power to over it over a sort of timetable period to the next leader. Or does Boris Johnson go immediately. That's the question. That will be next on everyone's lips. OK Alex thank you so much for joining us here. That's Bloomberg's Alex Wickham reporting from London. And now we go to somebody who really knows the politics and the people of Great Britain terribly well. He's Joe Twyman. He is co-founder and director of Delta Poll. That's an independent British research firm. So. Thanks so much for being with us. You just heard our reporter say it looks like the end game. Do you agree with that. Yes the indications are that this time is different. Boris Johnson has been in many scrapes and battles over the last few months as the same story has played out where where accusations have been made accusations have been denied. Ministers and others have gone out to publicly support the prime minister on his position only for that position to subsequently change. And the latest story played out in the same way. The difference however was that two senior cabinet ministers the chancellor of the Exchequer who she soon CAC and Health Secretary Sajid Javid they resigned last night. And it was that change that that really led to the momentum that now culminates in this meeting that's being reported in Downing Street with senior cabinet ministers confronting the prime minister and telling him really how to go. Up until that point it had been a solid wall of support by all members of the cabinet showing a united front. But once chinks in that armor began to emerge. Inevitably the momentum started to be a start to be gained. And it appears that the amendment is just too large now. And it also becomes a becomes a sort of technical practical implication as well. With so many people now resigning from the government it's very difficult to see how those roles can be replaced given that Boris Johnson it would appear has so few friends left. And if that is the case then how does the government function. It becomes a matter of practicality as much as politics. Now the wall of support may not be quite as solid but the one thing it seems to be solid as of right now is Prime Minister Johnson's really resolved to remain in power. Earlier today in parliament. This is what he had to say when asked whether he might step down. The job of a prime minister in difficult circumstances when he's been handed a colossal mandate is the key. So keep going. What if he does decide to keep going despite the delegations despite the 1922 committee. What happens. Well no one's quite sure. Things could get. Things could get very interesting. Of course this could just be all bluster. More than three decades ago Margaret Thatcher in similar circumstances said she fights. So said I fight on. I fight to win. And only lasted a few more days. Suits could simply be a reflection of that. Boris Johnson is of course a he's a student of political history and so will be aware of a historical precedent. He could dig his heels in and refuse to leave. It would take a changing of the rules by the influential 1922 committee this committee that IBEX we can refer to backbench Conservative MP that sets the rules for the leadership. It would take a change in their in their rules to bring about another no confidence vote. But even a no confidence vote could technically speaking simply be ignored by the prime minister. All there is what many are saying is the nuclear option where he could go to where he could go to the palace and ask the queen to call a general election or at least the threat of that he hopes could could keep him in could keep him in place. But there are various constitutional questions about whether the queen would be obliged to accept that given the circumstances. Ultimately there are lots of unknowns and so many with inside the Conservative Party it would appear are hoping that Boris Johnson will do the decent thing I guess is the best way of putting it. But of course anyone who has studied Boris Johnson after that over the last few years and indeed decades knows that he's not exactly famous for doing the honourable thing when it comes to various aspects of his life. And so it might be a surprise if he changed that habit tonight. And Joe I mean as you say there have been quite a few scrapes in the past for Mr. Boris Johnson at the same time. Ultimately my impression is he's gotten through them largely because of the support of so much of the British populace. You were really a specialist. You understand how the British people feel about this. Where are they right now on Boris Johnson. What does your polling tell you. Well it's certainly true that the boys Johnson won a large a large majority at the general election in 2019. But since. And particularly since the since the end of focus on the Covid pandemic he really has seen his ratings suffer at the moment more than two thirds of the British public believe that. Believe that he is doing a bad job. 40 percent believe that he's doing a very bad job. And that includes more than half of conservative more than half of conservative supporters at the moment. And it's worth pointing out that that poll was conducted just before this most recent most recent developments. So it's highly likely that that in more recent polling he will have suffered even further. And to come back from that kind of position is very difficult. But more so than that the position that he finds himself in when it comes to views of his own personal attributes by the public whether the public think he can be trusted whether the public think he has good judgment whether the public thinks that he plays by the rules all of those metrics show him in a very very difficult position. And turning around a narrative like that in the short term the medium term all the long term has traditionally been extremely difficult in British politics. Now Boris Johnson is seen as very unusual in many respects and has up until now survived the kind of the kind of slings and arrows that other political leaders would have been defeated by. But it may well be that he has simply run out of road and this time particularly with the resignation of two leading members of his cabinet last night. That simply is a bridge too far for this prime minister. And finally Joe let's assume you're right as I'm sure you are you know it terribly well that he has run out of road to use your expression. What comes next. And in that I mean both who is likely to come next. And will it make a difference in policy. We do all after all have some issues for the British government now including its economy. Well this is the major. Will it make a difference is the major question that Conservative MPs have been asking themselves over the last few weeks and indeed months. Up until now the calculation has been for many of them that the the opportunity to change to another leader simply presents too much of a risk. Could they guarantee that the new leader whoever that was would be more successful at the ballot box and more successful in the court of public opinion. Boris Johnson And up until now the risk has simply been seen as too large for many. But as the Prime Minister's ratings have fallen yet further as his situation has worsened that risk has diminished. And for many they've changed their minds. And ultimately a lot of this comes down to the question of who would be best to replace the prime minister when we're in this situation previously with Theresa May. Boris Johnson was the person who loomed large over over British politics as a an obvious replacement. There is no obvious replacement this time. And though people like Sajid Javid the health minister who resigned really soon axed the chancellor of the exchequer who resigned Nadeem Zahar with the current chancellor of the Exchequer who who stayed with Boris Johnson. Though they are all possible options none of them are particularly well known in the public. And so it represents a risk. But clearly despite an obvious candidate the consensus it appears among Conservative MPs is that the situation simply cannot continue. It's really helpful to have you with this. Thank you so much. That's Joe Twyman. He is the co-founder and director of Delta Pull Over in England. Coming up we go through a possible reductions of US tariffs on goods from China with Linda Cutler of the Asia Society. This is balance of power on Bloomberg television and on radio. This is balance of power on Bloomberg television and radio. I'm David Westin want to keep up to date with news from all around the world. For that we turn to Riddick Gupta here with the first word. Thanks David. Boris Johnson is facing an onslaught of resignations from his government that threatened to bring an end to his premiership even as he vowed to fight any attempt to oust him. Five more junior ministers resigned at 1:00 today in what appeared to be a coordinated attempt to inflict maximum pressure on Johnson. The prime minister has lost now lost almost 30 people from his government. A meeting is being held at this hour to discuss a possible confidence vote. More than 600000 immigrants who entered the U.S. as children and left permanent legal status are anxiously awaiting a federal appeals court that could determine whether they can remain in the country. The so-called Dreamers are part of a 2012 program under former President Barack Obama called Deferred Action for Childhood Arrivals. States including Texas and Missouri claim DAX was created illegally. And appellate panel in New Orleans is hearing arguments in the case. Today Ukraine is casting doubt that a deal will be reached soon to resume crop exports from the nation's Black Sea. On Tuesday Turkish President Megaupload once said an agreement could come within a week to 10 days. The blockade of Ukraine's agriculture exports has raised fears over escalating global hunger. The country is one of the world's largest shippers of corn wheat and sunflower oil. And a bulk carrier that's been stranded off the coast of Sydney Australia for three days has reached port has warned conditions that caused widespread flooding eat. The rescue came after several failed attempts in a huge swell 170 metre vessel carrying about a thousand tonnes of fuel oil. Although rain is easing across Sydney about 85000 residents are still under the threat of flooding globally is 24 hours a day. On and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts and more than 120 countries and Rich could get to. This has been back. DAVID DAX REDICAN Well the boat station has been talking about it for a while now. The possibility of removing or at least modifying tariffs that were imposed during the Trump administration on goods shipped from China and to China because there were tariffs and counter tariffs. And now we've learned that the secretary of the Treasury Janet Yellen has had a video camera with her counterpart over in China. And so it looks like they may well be on the table to bring us up to speed on where we think we are. Well now Wendy Cutler she's vice president of the Asia Society. Wendy always good to have you here. What do you know about what they're thinking about doing at least. Well first it's important to remember it's just about four years since the first tariffs against China were imposed and four years later we're kind of at the same place. We have lots of tariffs in place. China hasn't changed its unfair trade practices and we're really not talking that much with China. But it seems that the Biden administration after deliberating on what to do on China trade for a year and a half is going to make a decision very soon on perhaps lifting a limited number of tariffs of household items perhaps a reinstate the exclusion process to allow businesses to apply for limited exceptions to the tariffs but also to launch a new trade law investigation on Chinese industrial subsidies in an effort to really try and get at those practices that are creating such distortions in the international trading system. Well Wendy for me at least this goes to the question of what is the strategy the trade strategy from the buy demonstration. Because I'm not sure I've heard it articulated completely. And as I look at the items that are subject to tariffs that we've imposed now putting aside the ones China's opposed. It's a wide range of issues is still a lot of products aircraft parts semiconductors but it's also fabric and chemicals and furniture. So what's the theory here from the United States point of view. What is strategically important to us and what is not. Yes. So if we would call it that trade war what happened was that China responded with tariffs against us. Then we came back with tariffs. And at this point we have tariffs and about two thirds of our trade with China. But a lot of that trade is just not strategic. It's not. It's not strategic. It's not sensitive. And I think what the Bush administration would like to do is to find a way to raise tariffs on those items in the high tech area in the transportation area where where this could help us and hurt China and lift the tariffs in areas like toys and bicycles and close areas where you know lower lower taxes lower tariffs could help our consumers particularly during these times of high inflation. Wendy we heard at one point from the trade representative Catherine Tye saying that she was reluctant to with pullback on the tariffs because of the leverage they gave the United States and gave her frankly in negotiations with China. Have they worked that way. Have we gotten much out of that leverage. Well we haven't. But that said and I'm a former trade negotiator I understand you don't want to give up anything for nothing. And so I think it's a question of what's the what's the range and the amount of tariffs you left. You don't have to keep them all in place to have leverage. In fact if you made them more strategic maybe we'd even have more leverage while again addressing the harm that it's causing to our consumers our businesses and our workers. I wonder about the biting assertion approach overall to trade particularly with Asia. As you say you are trade negotiation and you were involved in the Trans-Pacific Partnership. You also have been involved in China trade negotiations. We had President Biden go over the region and announced this Indo-Pacific economic framework that seemed to address some issues but not tariffs. As I understand specifically it's more things like worker conditions and other rules of the road as it were. Is that their strategy. Yeah. I mean the strategy is we're not going to pursue traditional trade agreements. They've just been too divisive at home and have led to too many complaints that we're outsourcing jobs and they're not benefiting us. And so therefore the Biden administrations come up with kind of a new approach which is not pursuing traditional trade agreements pursuing some elements of trade but also broadening the issues we're addressing to address trade and climate. To address supply chain resiliency to address infrastructure. These are pressing issues in the right in the region and they need to be addressed. So you know this approach. It's new. We'll see. We'll have to see how it plays out in the region. What already we have seen 13 other countries in the end of Pacific region join this initiative. So that's some support. To be clear one last one here on China if we could. I've heard reports from various people who know about these things that there really has been a fall off in the level of communication first under the administration but continuing into the Bush administration between U.S. officials and their counterparts in China. I've also been told it's not just the US's fault. This is not just Donald Trump deciding he doesn't like China. The Chinese cutback as well. Where does that stand. Are we talking to another. Even if we're disagreeing it helps to talk. Well we're certainly not talking to each other the way we used to. Either the frequency or the intensity. That said you know just this past week Secretary Yellin has had a conversation with her counterpart. We understand Secretary Blinken will be meeting Foreign Secretary Wang Yi on the margins of the G. 20 meeting in Indonesia this week. And there's talk of a possible she Biden call this month. So we are seeing more engagement but the differences I don't think this engagement is leading to more cooperation necessarily. I think it's more about managing a relationship that is so full of tension and so prone to kind of misunderstandings or too kind of unintended incidents which could flare up quickly into a crisis if there isn't at least some channels of communication kept open. OK. Thank you so much Wendy. It's always a treat to have you with us Wendy Cutler. She's Asia Society vice president. Coming up we get a preview of the Fed minutes coming out just over an hour and a half from right now. This is balance of power on Bloomberg television and on radio. This is balance of power on Bloomberg television or radio. I'm David Westin at 2:00 this afternoon Eastern Time. We're gonna get the minutes of the last Fed FOMC meeting. And we always look forward to this meeting to try to glean some insight in what the Fed is thinking now. I'll always there backward looking at the same time. They may give us some indication of what it means to hike into a slowing economy to give us a preview of what he's expecting he's looking for. We welcome no Michael McKee. He's Bloomberg International Economics and policy correspondent. So Mike I know they're backward looking at same time we're looking anywhere we can forward backward to the side. What do you think we're gonna learn from these. I don't know that we're going to learn very much the expectations got raised when we saw the January minutes in February and they talked about the possibility of having to raise rates faster. That caught the market's attention. But in this case it's been three weeks and the market has moved significantly in the direction of pricing in a slower economy. So unless there's a major surprise in there I don't know that it's going to move a whole lot. Today we got some news that the economy is not slowing as much as maybe some people on Wall Street thought with the ESM services index number coming in stronger than expected not as strong as last month but still a respectable number. And the new orders index doing reasonably well. The employment index fell a little bit but that's because companies say they still can't find workers. So the economy seems to be running fairly strong. The JOLTS numbers came in again today and of course they showed that there still more than 11 million open jobs out there. So the Fed says 75 in June and probably today's minutes aren't going to disabuse anybody of that. I wonder Mike whether we may get some indication of exactly what the appetite the stomach as it were is for the FOMC to really put us into a recession because the markets clearly seem to have had a second thought. At first it really could grow. And now they're thinking well maybe not so much to me. Back off. Well they're going to be looking for a euphemism for recession. We'll do whatever it takes. Comments from Chairman Jay Powell are pretty much as close as they are going to get. We may hear some voices in the minutes suggests that they know that the economy could go into some sort of slowdown. Maybe somebody might even use the word contraction if they go too far but they will pledge that they're sort of not going to do that. Now the opposite question from is the economy strong enough. Is is inflation going to keep going. And we get a CPI report on the 13th of July. And I want to show you. You have this chart here and I'm sorry for the people on radio but you can just imagine lines going up that suddenly roll over. And that's oil and gasoline prices and agricultural commodities and used cars. Some of the biggest movers in the CPI have started to go down which is good news for Joe Biden I suppose. But it also suggests the Fed may want to be careful about how much it raises rates going forward if inflation is indeed starting to ease up a little bit. Well exactly. We are watching on TV and for radio it's exactly Michael just said that you're basically saying maybe they're starting to get their arms around inflation. Is it too soon to tell. Well I think in this case it's probably too soon to tell because it's only been a couple of weeks for all of these things. But the Fed doesn't really have anything to do with most of those things that used cars. They obviously have car loans that make a difference. But the oil prices are coming down for because basically the markets think we're headed into recession and demand will fall. Gasoline. Following that and then agriculture commodities we've had a better planting year. So the Fed will take luck. We all will sooner or later. Thank you so much Mike McKee from Bloomberg. Coming up we'll talk with famed pollster Frank Luntz about how Americans are responding on abortion and guns and the possible political consequences. This is Bloomberg. This is balance of power on Bloomberg television or radio. I'm David Westin well we thought that we knew with the midterm elections come November we're going to be about in the United States of America. But then the Supreme Court came along and issued a couple of quite controversial opinions one involving the Second Amendment guns. The other of course involving abortion. And the question now is what is that doing to the populace. Might it change things in terms of going into those midterm elections. For some answers we turn out a famed pollster and political strategist Frank Luntz. You CEO of FIA Inc. Frank great to have you back with us. So it was so give us your take about what you think the American people are likely respond to these two controversial decisions from the Supreme Court. Well both of them are problematic for the Republicans in the the issue of guns and it's not been taken off the table. Congress is passing of the most significant gun legislation in decades makes it more likely that voters will turn to other issues such as quality of life the economy and particularly prices that you've been talking about on this show. But the abortion issue is another challenge for the GOP because for them it's an issue of principle as it is for the Democrats. But the politics of abortion advantageous the Democrats that more people are pro-life and pro-choice. More people would rather the Supreme Court not have done what it did two weeks ago. It mobilized Democratic voters progressive voters. And it will be a challenge as state after state makes decisions on abortion that while it pleases those who are pro-life agitates and concerns those who are pro-choice. And you'll notice I'm being very careful about my language because an issues like this language and messaging matters. But if the issues are about the economy about public safety about international security the Republicans have the clear advantage. If they aren't about these social issues such as guns and abortions the Democrats have the advantage. Well give us a sense if you segmented as it were the populous who cares the most about these issues. Well the group that's actor two groups that I'm watching very closely in the election campaign the first are middle aged ages thirty to forty nine white women in the suburbs who have been voting Democrat since Donald Trump was the Republican nominee. And they were beginning to shift towards the Republicans because they are economic voters. But they saw this abortion decision. They did not like it. And I've seen that shift towards the Republicans. And and it's actually starting to move back towards the Democrats. And they are a significant voter bloc. The other group that I'm watching are Hispanics and Latinos. And there's been a dramatic Sikhism between the black and brown communities in this country. Latinos used to vote about 28 30 percent for the Democrat for the Republicans. Now we're looking at a vote of in the low 40s. And all you have to do is look at that Texas congressional race that took place three weeks ago to see the impact of of the black brown community. And frankly if they move that could be worth as many as 12 seats in the House and two seats in the Senate. Frank you've spent a career a distinguished career I must say focusing not just on what is said but how it is said because words and phrases really matter when it comes to politics and much of the rest of life. Is there a danger of the Democrats overplaying their hand depending on how they put the issue on guns or abortion. And similarly for the Republicans there is for the Democrats the challenge for them is to focus on the policy without seeking to appear to be making political gain. And the phrase have always used is the Democrats never miss an opportunity to miss an opportunity. This could be one of those cases. If they are seen as fighting for women's rights if they are seen as fighting for public safety they can take advantage of these two issues that they are seen as trying to pad their voter pool and trying to appeal for political reasons. The public will say hell no. On the Republican side it's actually not about the economy. It is about quality of life. Yes people are concerned about their standard of living with prices going up. But if you're talking to them about their quality of life concerns and day to day prices and most importantly the phrase the word affordability you and I talk about inflation. The average American talks about affordability. If the Republicans appeal to voters using day to day language like that they're in a position to score some some significant gains come November. And Frank what about the standard bearers for the two parties at this point. I mean you have President Biden obviously but. But he I think it's fair to say is struggling. Certainly if you look at the approval ratings he's struggling and similar. You have Donald Trump the former president but he's not necessarily a lock to be the leader of that party. Are there others willing to step in. We saw for example Gavin Newsom start to run ads and. Florida for goodness sakes of all things and you also have you for example you have a Liz Cheney stepping forward. You have you have Ron DeSantis stepping where other standard bearers there serve likely to come in and play a role in this election. Well let's talk about the two frontrunners in their parties. Joe Biden has the lowest approval rating of any president since Jimmy Carter. So you have to go back 40 years to see someone who's been experiencing this and the polling that's been done recently. Sixty percent of the country does not want him to run again. And significantly a third of the Democrats don't want him to run again. On the Republican side Donald Trump actually fares just a bit better than Joe Biden. But you still have a majority of Republicans who'd rather see somebody else running the American people looking at these two individuals. And frankly they're coming to the conclusion that it'd be better to see somebody else somebody new or somebody fresher enter the political stage. And by the way Biden's approval rating on some of the key issues such as inflation handling the economy public security frankly they're in the tank and the vice president's numbers are not much better in terms of who would replace them. There is no front runner on the Democratic side on the Republican side. It's Governor Rhonda Santos. And there is a poll now in New Hampshire that has the Santos beating Donald Trump for the first time. Just to put this in context. We went to the same kind of election in 2008 when Hillary Clinton was running against Barack Obama. She was beating Obama by 50 percent to 10 percent nationwide. But in the key states of Iowa New Hampshire and South Carolina he was doing quite good. We see that same thing now. Donald Trump is dominant nationwide in all the polling but in Iowa New Hampshire and South Carolina. Ron DeSantis has already begun to move. His numbers are quite favorable. No states. And quite frankly if Trump and de Santos running against each other you can't call it at this point. Frank finally briefly here at the end one person who's not doing so well today is somebody I think you know pretty well which is Boris Johnson the prime minister of Britain. You spent a lot of time there. As I said you were to school with him. What do you make of what we're seeing right now over in London. The public is prepared to accept missteps. They're prepared to even accept mistakes but not in issues of integrity. And that's something with the British audiences. And the American audiences are the same. We expect you to tell the truth look straight into camera and tell the truth. I love that visual that you've got him right there. The British public has said is becoming starting to say enough is enough. And even in his own party people are turning against him. Honesty and integrity are core issues to the American people and to the British people. And they've come to believe that Boris Johnson is not as honest and as forthright as he should be which is why you see all this consternation right now. I question whether Boris Johnson will still be the prime minister 14 days from today. Yeah we've heard people say something very similar but. But let me push on this just a little bit. One more Frank because you do do you do know him. Why did it take that long for the British people to come to that conclusion. I mean I have nothing either for or against the prime Minister Johnson at all. But if you look back at his career there've been a lot of questions about his relationship with the truth going back to when as a columnist over in Brussels for goodness sakes. So why are they surprised. And then they sort of knew what they were getting much the way the American people knew what they were doing with Donald Trump is the proverbial straw that breaks the camel's back that he was given a pass unlike most politicians just as Donald Trump was in America. But at a certain point the public looks at that elected official. This is a warning for Donald Trump. They were prepared to accept Boris Johnson's missteps again and again. But when it came to the integrity of the people who he's entrusting in his administration and when that when that integrity was being challenged the public and his own party said I've had enough. Donald Trump is not in jeopardy in this country because his January 6 hearings he's in jeopardy because Republicans who are watching are starting to wonder do I really want to go through this again for another four years. There is a lot of differences between the two countries. But in this case being fed up wanting to have a change the similarities may be significant. OK. It's always wonderful to have you with us Frank. That's Frank Luntz. He's that famed pollster and political strategist. He is the CEO of FTSE Inc. Coming up here we're going to talk with Ian Bremmer of the Eurasia Group and G. 0 about the state of Europe in the wake of the summit meetings last week. This is balance of power on Bloomberg television and radio. This is balance of power on Bloomberg television or radio. I'm David WESSEL. Next week President Biden is headed over the Middle East. But last week he spent most the week over in Europe at a G7 meeting and then a NATO summit as well. We're a lot got done focusing on Ukraine and Russia. One of the attendees of that of course was Boris Johnson who's in the news right today. Ian Bremmer founder and president of Eurasia Group and Al Jazeera Media is also the author of The Power of Crisis How Three Threats and Our Response Will Change the World. So Ian thanks for being with us. Before we get to G-7 and NATO let's spend just a minute on Boris Johnson because news just cross that the 1922 committee which is the backbenchers as I understand the Conservative Party have just decided not to change the rules to sort of vote on no coffins for him until next week. So he's got it looks like he may have a few more days to go but what do you make of what's going on with Boris Johnson right now. Yeah he was by far the weakest leader at the G7. And everyone knew that before the latest scandal got you know made headlines that on top of how poorly the British economy is doing inflation worse than the United States and Europe. He's not only lost all of his popularity in the country he's lost most of his popularity in his own party. A majority of conservative voters now want Boris Johnson to resign. He is hemorrhaging cabinet ministers and members of his coalition on a daily basis. I think the only question is whether he sticks it out to an actual second no confidence vote which he will lose or does he resign right before that when he sees that the writing is on the wall. But it's surely at this point his tenure is is written in days not even weeks. So so enlist come back to those summits those two meetings set of meetings over in Europe last week. You've written about the both. And then I'll pick and you do a little bit. You like to say gee zero because we can't get together. Is it at least G7 now because the G7 seemed like they actually were together. G7 Absolutely. And this was a response to the Russia invasion. This is a very different summit than any of the G7 as we've watched over past years. It wasn't about the BI laterals it wasn't about the communique at the end. It was a crisis summit. And all of the attendees responded to that crisis. And one thing that we can say is that they all have the same basic view that they're all doing everything they can to support the Ukrainians. And they're doing everything they can to punish the Russians now for something that's politically and economically more damaging than others. And for some IT support for Ukraine means more economic support and less military support. But the alignment for the G7 and of course the alignment for NATO and here including Asian allies like Japan South Korea Australia New Zealand all of whom unprecedentedly were in attendance. There's no question that what Putin has done over the last four months has built a much stronger coalition of advanced industrial democracies around the world to ensure that this does not stand much more powerful coalition. But both meetings G7 NATO I daresay had an audience of one who's Vladimir Putin didn't make any difference to. Vladimir Putin is going to change his behavior. I think it's going to change his behavior. I think it's going to make him more aggressive towards those countries. I mean he's not going to leave Ukraine. That's pretty clear. So I mean if the intention of the sanctions is to force him to back down he's not backing down. If the intention of the sanctions is given that he doesn't back down that you are going to severely punish the Russian economy structurally and that you're also going to send a message to other countries around the world that this kind of behavior won't be tolerated and that the Ukrainians don't suffer tragically in vain. I think that message is being sent and you see that NATO is expanding that their rapid deployment forces are going to go up within one year from 40000 to 300000 that the Germans are spending 2 percent of GDP going forward on defense. These are all messages to Putin not just symbolic messages but they deeply undermine his own sense of security. And I expect in the same way that he has ratcheted down the gas that's being provided from Russia through Nord Stream one to Germany. You'll see other steps that are made by the Russians like on cyber attacks espionage escalation disinformation attacks. We may not be talking as much about Ukraine in six months time. We will be talking a lot more about the Russia confrontation with NATO. And a message clearly being sent to Vladimir Putin in Moscow. There were also some messages being sent to President Xi and China. I dare say they added for example Japan South Korea Australia New Zealand. What about the reaching out. And by the way in the strategic straight framework they mentioned China specifically. They did. And last time there was a strategic framework for NATO which was back in 2010 China was mentioned as a partner. This time China's mentioned as an adversary. How quickly these things change and a threat to a rules based order something the G7 talked about an awful lot as well. But the Chinese don't like at all the fact that the developed world is increasingly aligning and coordinating their policies at least in terms of national security visa vs China. And the Chinese in turn they had their virtual summit the week before the BRICS summit. Putin of course was there. But so to a lot of developing countries and the Chinese are trying to expand the BRICS into the BRICS plus. What does that mean that they want to see the developing world increasingly aligned against the advanced industrial economies. Now this isn't a new global Cold War because there's a lot of economic interdependence but it is a lot more confrontation. It's a lot more sand in the gears. One thing I would say though where the where the summits weren't successful is that everyone wants to have something that competes with China's belt and road. This massive effort to devote trillions of dollars of investment to developing countries around the world. Well NATO and the G7 have been working on a competitive plan but the money is not there. And Biden announced a nominal 200 billion figure. But I mean frankly the DFC and the need for the Americans to come up with that funding. He's not going to Congress for it right now. I don't see that cash. So I mean heading in the right direction in terms of trying to invest more but they don't yet have the ability to make it work. Always so great to have you on. Thank you for being us. Ian Bremmer of the Eurasia Group. Coming up our editor in chief emeritus Matt Winkler gives us a report card on Boston's pathbreaking mayor. Half a year into her tenure. This is balance of power on Bloomberg television and radio. This is BOVESPA Bloomberg Television or radio. I'm David Westin. Last November Boston elected a new mayor a woman and then she is really a path breaker. Our editor in chief of marriage is Matt Winkler is taking a look at her tenure so far and he has a report. Matt. Great to have you with us as always. How's she doing. She's doing fine so far. She's got all the problems that every big city mayor has got some crime got some affordable housing that doesn't exist that she'd like to have. But aside from that she's sitting on probably the best asset any mayor could have. And that's biotechnology and pharmaceuticals. And here Boston is unequalled in the world. There really isn't a city that has the combination of biotech and pharmaceuticals that Boston has. I learned that from your column. And is that mainly because at M.I.T. and Harvard. Well they have something to general what do they have something to do with it. But this goes back a long way and it's been percolating. But if you just look at for example Madonna is obviously a company everybody knows right now. And that's among dozens of companies that have outperformed comparable companies anywhere in the United States. And so this is a very big part of the story that she inherits. Now what makes her interesting is she's a mayor first. She's the first woman of color as mayor in Boston old town Beantown. And she's the first woman mayor. And that makes her very different from her predecessors. But one thing that she has done right away is she said I'm going to do everything I can to make Boston the greenest city in America. And she's used every dollar she could from Covid-19 relief funds right away. She wants to make transit free public transit free to the extent that she can. And she's obviously very concerned about education. She inherited a dysfunctional sadly public education system that she has to rectify. Not an easy thing. And she's wrangling with the state over that. But she is interested in education as you would expect from somebody who is an immigrant daughter. Taiwanese parents went to Harvard College then Harvard University Law School. And she has been committed to for example early childhood education which is something that she started just today. So those are things we talk about not everyday pretty close to everyday basic infrastructure things like transportation things like education system takes a while to turn that around. Does she have enough time to make a real difference. Well she would argue that you know and she does say in fact that it's in the bones of Boston that this is a place where long before she arrived at city hall that believes in innovation that is all about education. You know Boston and Massachusetts actually stand out in that respect. It's been more like in terms of economic performance a southwest or southeast state in terms of population increase. If you look at the last census Boston just tops every northeastern state. You know east of Mississippi Minnesota south north of Dover Delaware. I learned that from your column and I was surprised. I said I had no idea. Yeah. So and a lot of that has to do with the innovation is that it's of course a mecca for higher education. You got more than 150000 students who are in Boston proper if you like. And that does make a big difference because it's a young city. Yeah it's a fascinating story. I really as I say I learned so much from your column. Always do. But thank you so much for being with us Matt. Matt Winkler. He's editor in chief emeritus of Bloomberg. Check out the Balance of Power newsletter on the terminal and also online. Coming up balance of power will continue on Bloomberg Radio. In our second hour we're going to talk to former Commerce Secretary Carlos Gutierrez about Biden administration trade policy. What are they doing right. Could what could they do better. This is balance of power. Bloomberg Television and Bloomberg Radio.

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Balance of Power Full Show (07/06/2022)

On Bloomberg’s ‘Balance of Power’ with David Westin: Joe Twyman, Deltapoll director & co-founder, on Boris Johnson's mounting pressure to resign; Wendy Cutler, Asia Society Vice President, on China tariffs; Frank Luntz, FIL CEO, on the politics of abortion; Ian Bremmer, Eurasia Group president, on Russia-Ukraine war. (Source: Bloomberg)