Walz Clashes With Noem Over ICE Shooting Probe; Trump’s Tariffs Face Supreme Court Test

0:00Donald Trump is rewriting the Washington rulebook and reshaping the global economy. If you're trying to connect the dots behind the headlines, Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, head of government and economics at Bloomberg. Every week, I'll bring you a smart, focused conversation with reporters and experts from Washington, Wall Street and beyond. Listen to new episodes every Wednesday and follow Trumponomics wherever you listen. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy.

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1:14All investing is subject to risk, Vanguard Marketing Corporation Distributor. Bloomberg Audio Studios. Podcasts. Radio. News. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with another shooting involving federal agents, this time in Portland, Oregon. Let's get the latest from Bloomberg's John Tucker. John. And Nathan, the Department of Homeland Security said a Border Patrol agent in Portland, quote, fired a defensive shot at a vehicle after the driver, quote, weaponized it and drove off. Oregon's governor is Tina Kotek. We are all shaken and outraged by another terrible, unnecessary, violent event instigated by the reckless agenda of the Trump administration.

2:04Portland Police Chief Bob Day told reporters that two people were later taken to a hospital. He did not know their conditions. We found a male and a female with apparent gunshot wounds. Officers applied a tourniquet and summoned emergency medical personnel. The Portland shooting occurs a day after an ICE officer shot and killed a woman in Minneapolis. In that shooting, the FBI is taking control over the probe, over the objections of Governor Tim Walz. A state authority's question whether a federal probe could be trusted, especially given comments by Trump administration officials, but seemed to exonerate the officer in that fatal shooting.

2:40Homeland Security Secretary Kristi Noem said Minnesota doesn't have jurisdiction. Vice President J.D. Vance said the agent who fired the deadly shot is protected by absolute immunity. I'm John Tucker, Bloomberg Radio. All right, John, thank you. We want to get to breaking news out of the White House. President Trump said he's canceling a planned second wave of strikes on Venezuela. In a Truth Social post overnight, the president said the country is releasing large numbers of political prisoners as a sign of seeking peace. And both countries are working well together to rebuild Venezuela's oil and gas infrastructure.

3:15President Trump's post comes as he prepares to host nearly 20 U.S. energy executives at the White House today. The president also said he's open to meeting with Venezuela's opposition leader, Maria Corrino Machado. I understand she's coming in next week sometime. And I look forward to saying hello to her. And I've heard that she wants to do that. That would be a great honor. President Trump spoke there on Fox News. In the Truth Social post, the president said all ships will stay in place around Venezuela for safety and security reasons. And staying with foreign policy, Karen, the U.S. is reportedly considering paying Greenland's residents up to$100 ,000 each.

3:51That's according to Reuters, which says the payments would be intended to convince Greenland to split from Denmark. Wendy Schiller is a professor of political science at Brown University. The Republicans are going to have to go home and they will have to interact with their constituents, even though most people like to avoid town hall now. And they're going to have to explain why U.S. resources are both in Venezuela and possibly going after Greenland, which I think Congress would probably stand up and say, no, you can't use U.S. money to buy Greenland or even go into Greenland for any length of time.

4:23Brown University's Wendy Schiller, Secretary of State Marco Rubio, has said he will meet with Danish officials next week. Well, we head to the Middle East now, Nathan, where Iran is restricting Internet and phone access after thousands of demonstrators took to the streets across the country to protest a loss-of-living crisis. Begin more from Bloomberg News Middle East Managing Editor Paul Wallace. The unrest worsened last night quite significantly. We saw very big crowds in Tehran by all accounts. While information is coming out of Iran, it's very hard to verify at the moment. It does seem that what happened last night were certainly the biggest protests in the capital since this all began in late December.

5:04Bloomberg's Paul Wallace says the demonstration started after a sharp decline in the value of Iran's currency worsened a cost of living crisis in the sanctions hit economy. Turning back to the nation's capital now, Karen. The Supreme Court's got an opinion day today, and we could see some major decisions handed down. Bloomberg's Amy Morris reports from Washington. The justices could make a decision on the legality of the Trump tariffs. The administration invoked the International Emergency Economic Powers Act, normally used to address national security threats. Lower courts have already struck down the president's use of that act to impose tariffs.

5:40A ruling against Trump would undercut his signature economic policy and deliver his biggest legal defeat since returning to the White House. The court could also rule in a major redistricting case that could help Republicans keep control of Congress in this year's midterm elections. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. Staying in Washington, the House has taken action on the expired health insurance subsidies that forced a government shutdown. A band of swing state Republicans joined with Democrats to restore the Obamacare tax credits to the rest of President Trump's term.

6:13On this vote, the yeas are 230, the nays are 196. The bill is passed, and without objection, the motion to reconsider is laid on the table. Seventeen House Republicans voted to send the three-year extension to the Senate. It's a blow to House Speaker Mike Johnson. I think it's a really bad policy and, you know, I wish they hadn't, but everybody had to vote to conscience. And House Democratic leader Hakeem Jeffries says now it's the Senate's turn to act. John Thune needs to bring the bill up for a vote immediately. Senate Majority Leader John Thune has said the bill is dead on arrival in his chamber.

6:52A group of senators led by Maine Republican Susan Collins is working on a deal to revive the subsidies with modifications. All right, let's turn to markets now, Karen. Futures are a little bit higher this morning, while the dollar is trading at a one-month high ahead of this morning's key jobs report. Economists anticipate 70 ,000 new positions were added to the U.S. economy in December. We get more from Bloomberg's Michael McKee. Investors, analysts, economists, and politicians are awaiting the December jobs numbers with great enthusiasm. October and November's data were affected by the government shutdown.

7:27Last month's numbers will be the first clean read since September. A lot is riding on what that reading is. Job growth appears to have been slowing or even falling for the past half year, but unemployment has barely changed. Weak December jobs would suggest more rate cuts from the Fed, but a drop in unemployment, which is forecast, would argue the opposite. Although any conclusions will be tempered because the shutdown meant there was no October unemployment figure and we could see big revisions to the delayed October and November numbers. The data may be clean, but it's not certain how clear they will be in setting a rate cut agenda.

8:04Michael McKee, Bloomberg Radio. All right, Mike, thank you. Well, President Trump is telling the New York Times he's made up his mind on his Fed chair pick but did not disclose his choice to replace Jay Powell. Treasury Secretary Scott Besson says he anticipates the decision will come this month. I would expect presidents going to Davos, I think, in two weeks. So I don't know whether it will be right before or right after. And Besson says there are four candidates for the Fed chair. National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, and BlackRock Executive Rick Reeder.

8:38In company news, Karen, we may have a huge deal in the works in the mining industry. Rio Tinto is in talks to buy Glencore. If completed, this would create the world's biggest mining company with a combined market value of more than$200 billion. A tie-up between Rio and Glencore would represent the largest ever deal in mining and create a new behemoth to rival BHP.

9:04Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. New York, Minnesota, and other Democratic-led states sued the Trump administration in a bid to restore$10 billion in federal aid for child care and other services for poor families. The administration announced the funding freeze Tuesday, escalating a conflict that has grown over accusations that Minnesota officials allowed massive fraud in programs supporting child care. In their lawsuit, the states accused the administration of freezing the assistants to punish them for their political leadership.

9:42The director of the White House Office of Administration and the architect working on the President Trump White House ballroom revealed more details about the destruction of the East Wing and future renovations they envision for the White House. The two testified before the National Capital Planning Commission Thursday. architect Salome Baranis offered new specs for the ballroom and says a future plan will include adding the second story to the historic west wing. It's designed to accommodate a thousand, approximately a thousand seated guests at a formal dinner. The total area of the two above ground visible east wing floors, that's two floors, including the colonnade and the ballroom structure is just slightly over 89 ,000 square feet.

10:31Architect Salome Baranis. Investigators say Wednesday's shooting outside a church in Salt Lake City that killed two people and injured six others grew out of a dispute between people who knew each other and were attending a funeral. No suspect is in custody. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Darren. What a game in Phoenix. College football playoff semifinals, Miami and Ole Miss. Six lead changes, four in the fourth quarter, three in the last five minutes.

11:08Miami quarterback Carson Beck scored on a three-yard touchdown run with 18 seconds to go. The Hurricanes won 31-27. They'll play for the national championship, and they'll get to play that game at home against the winner of tonight's game in Atlanta between Indiana and Oregon. Speaking of Miami, the Dolphins fired coach Mike McDaniel. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy.

11:44Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com slash audio. That's Vanguard.com slash audio.

12:20All investing is subject to risk, Vanguard Marketing Corporation Distributor.

12:50Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts.

13:25Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager and Wall Street is watching to see whether this is the day the Supreme Court decides on President Trump's emergency tariffs. The justices are scheduled to release their first opinions of the year later this morning. White House Trade Advisor Peter Navarro is watching. We think that the most important thing to do now is focus on winning that case at the Supreme Court. That's where we're at. If we lose, then we have a plan B.

14:01That was White House Trade Advisor Peter Navarro on the latest episode of Bloomberg's Michelle Hussain Show. This morning, we're joined by Bloomberg News Global Trade Editor Brendan Murray. And, Brendan, we should emphasize that we don't know for certain whether the Supreme Court is going to rule on the president's tariffs this morning. But what are the potential plan B's for the White House? Good morning. Good morning. The White House has a couple of options should they lose this case today. And again, like you said, we don't know. At 10 a.m. in Washington, they'll start reading some opinions.

14:31And one of those might be this tariff case. But the main option that most people think that the U.S. government could use is something known as the Section 122. And that would basically let the president issue a blanket up to a 15 percent tariff on all trading partners. But that's pretty time limited. It's 150 days. And so that is really just a Band-Aid. But that should buy them time to come around with some other authorities that they could use. We've heard them talk about 301s, and those are the ones that are currently used against China. And there are other pending 232 cases. That's the authority that's used to impose tariffs on steel and aluminum and cars already.

15:19So there are things, powers that the president has waiting in the wings that they could kind of roll out. But it's definitely going to be disruptive and create some uncertainty going forward as to the timing and the level of any new tariffs. Again, should the president lose, we don't really know how the justices are going to come down on this. But the hearing that they held two months ago suggested that at least a couple of the conservatives were leaning, were pretty skeptical of the president's case in this regard. Those are some interesting numbers that you mentioned there out of the 1974 Trade Act.

15:56We've heard that Section 232 mentioned a lot, but 122, 301, how tested are these potential provisions when it comes to levying tariffs? Well, the 232s and the 301s are as legally sound as any of these get. The 122 hasn't been used much at all, but legal experts would say that that is the route. And lower courts, when they struck down, when they ruled against Trump in the lower courts, have said that's probably the authority you should be using here. So we would expect, and you played the tape of Peter Navarro, and we've heard Howard Lutnick, And he's the Commerce Secretary say that these are these these these numbers that they've thrown out there are the are the plan B's that they would roll out probably fairly quickly.

16:50Maybe not hours after, but within days they would have these ready to go. The president posted on social media last night that he hopes the Supreme Court is aware of how resilient the U.S. economy has been and that he called this the most important decision ever. Obviously, more hyperbole, but obviously the president thinks that this is really crucial to his ability to negotiate trade deals, bring manufacturing jobs home. If he doesn't have this, these other authorities are going to have to take their place. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

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18:11I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.