Head of Public Policy Jason Cole provides his latest briefing from Washington. Jason updates the team on critical policy developments impacting markets and shaping the Trump administration’s economic agenda. Jason joins SVP of Investment Research Andrew Korz and Investment Research Associate Alan Flannigan to cover the uncertain path forward for tariffs, the looming government shutdown and the evolution of U.S. industrial policy in an AI-driven world.

[00:00:00] Alan Flannigan: Welcome back. You're listening to a podcast from Future Standard. Today we'll be discussing the latest policy developments with our head of public policy, Jason Cole.

We'll keep today's conversation focused on the policy issues shaping our economy and markets. Recognizing that moments like these remind us of the very human context in which policy debates unfold. There's a widening gap between the financial world and real world. Stocks are at all time highs, even as the economy appears to be weakening, rates have declined as the market looks forward to fed rate cuts. But the debate over the independence of the central bank remains a legitimate concern. And in the middle of all of this government policy and the uncertainty that seemingly surrounds it at all times remains central to the outlook for the economy and markets. To an extent, I can't recall in recent memory.

Let's start with tariffs, which are reshaping America's trading relationships while also affecting the economic reality on either side of the Fed's dual mandate. Jason, welcome to the show.

[00:01:09] Jason Cole: Alan, thanks for having me. It's great to be back up here in Philadelphia.

[00:01:13] Alan Flannigan: and we're also joined on the show by our executive Vice President of Investment Research, Andrew Korz, my usual co-host in podcasting.

[00:01:23] Andrew Korz: Absolutely. It's great to be here, Alan.

[00:01:25] Alan Flannigan: So Jason, thinking about the IEP tariffs, they've been all across the headlines and the business journals. They're going to the Supreme Court, which tariffs does this cover really just level set the playing field for the conversation with us? What percentage of the overall tariff rate, what are the administration's options to get it struck down? Where do we sit today?

[00:01:45] Jason Cole: Yeah, it's a great question. Let's take a quick step back, right. IEEPA, international Emergency Economic Powers Act, and that's one power and authority the president used to levy tariffs. The president's actually levied two different types of tariffs to date.

One on sectors, steel, aluminum, copper, now derivative parts of those products. So if you're buying a chair from Ikea, that's probably going to be tariffed if there's steel on that product, autos, auto parts, semiconductors are coming, pharmaceuticals are coming, lumber is coming.

All of that has been done under section 2 32 of the Trade Act, which really stipulates that if the president can identify an emergency or that there's a national security issue, he or she would, he in this instance, can levy tariffs after the United States Commerce Department conducts an investigation that takes six or nine months. And so it's a slower process, but it's a process that had been underway and he was able to do that relatively quickly on those sectoral level products. And those are very sticky. The law is very clear on that, and I think there's a lot of certainty around those tariffs that when it's all said and done, if the threats around semi's, pharma, lumber come, we're looking at about at $1.8 trillion worth of imports or roughly half of our trade.

Then you have the country level tariffs, and these are the tariffs that were invoked under the statute IEEPA that you mentioned.