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Speaker 1: Bloomberg Audio Studios, podcasts, radio news optimism of a FED

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Speaker 1: rate cut. We are seeing across the board a sense

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Speaker 1: of calm after a pretty volatile two weeks. We do

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Speaker 1: see a sense that even in bond markets there is

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Speaker 1: a bid, with don yields down just about two basis

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Speaker 1: points four point five percent. Meanwhile, crude prices lower yet

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Speaker 1: again after declining almost four percent last week. Traded on

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Speaker 1: the IMAX down now just three tenths of a percent.

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Speaker 1: And this comes as trade talks between the US and

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Speaker 1: the European Union are underway in Europe. The EU sharing

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Speaker 1: it doesn't expect a deal to lower tariffs on steel

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Speaker 1: and other products. Joining US now from Brussels is US

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Speaker 1: Commerce Secretary Howard Lucknick. Secretary Lutnik, thank you so much

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Speaker 1: for being with us. I want to start on your

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Speaker 1: discussions with the European Union. We were hearing some noise

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Speaker 1: that it doesn't necessarily include reducing steel and aluminum tariffs

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Speaker 1: from fifty percent to fifty percent. Is that off the

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Speaker 1: table for now?

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Speaker 2: No, what we're talking about. Everything is on the table.

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Speaker 2: When you have such a great partner as the European Union.

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Speaker 2: They have four hundred and fifty million people and a

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Speaker 2: twenty trillion dollar economy, so the opportunity is great. They

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Speaker 2: would like to have steel and aluminum as part of

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Speaker 2: this package, and we think it is very very important

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Speaker 2: that they understand our digital companies and they reconsider their

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Speaker 2: digital regulations to be more inviting to our big companies.

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Speaker 2: They tend to tax our big companies and attack our

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Speaker 2: big companies, and they're not getting the investment that we're getting. Right,

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Speaker 2: You're seeing trillions of dollars of our tech companies investing

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Speaker 2: in building data centers in America and they're not getting

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Speaker 2: them here. So we're talking to them about take your

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Speaker 2: foot off the regulatory statement, build those data centers in America,

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Speaker 2: and in exchange for that, we'll come up with a

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Speaker 2: cool steal and aluminum deal that we'll all be together.

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Speaker 3: So it's all all trading. These are trade deals.

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Speaker 2: You're talking about opportunities together. Let's bring it all on

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Speaker 2: the table. Let's see what we can accomplish.

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Speaker 1: Secretary Lutnik, what's the threshold in terms of reducing certain

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Speaker 1: regulations in Europe on US tech companies that's required in

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Speaker 1: order to create some sort of framework for this deal?

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Speaker 2: Well, what the European Union does is they say, well,

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Speaker 2: our digital rules they only touch companies above a certain threshold.

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Speaker 2: Of course, the only companies above those threshold are all

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Speaker 2: American companies.

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Speaker 3: So come on, that can't be the rule. Let's take

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Speaker 3: it off.

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Speaker 2: Let's settle the outstanding cases against Google and against Microsoft

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Speaker 2: and against Amazon.

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Speaker 3: Let's put them behind us.

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Speaker 2: Let's come up with a reasonable framework where these companies

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Speaker 2: can grow and build, and then those companies will agree

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Speaker 2: to invest hundreds of billions of dollars of data centers here.

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Speaker 2: So the idea is, if they take their foot off

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Speaker 2: this regulatory framework and make it more inviting for our companies,

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Speaker 2: they can get the benefit of hundreds of billions, possibly

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Speaker 2: a trillion dollars of investment a year. So the idea is,

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Speaker 2: I'm trying to convince them that winning the way Donald

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Speaker 2: Trump is winning in America is the way to go.

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Speaker 2: Look at America, look at these growth rates. Come on

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Speaker 2: to realize our investment in ai Cape's last quarter exceeded

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Speaker 2: consumer spending in America. We had three point eight percent

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Speaker 2: GDP growth. We're going to grow over four percent, and

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Speaker 2: next year we could grow over five percent. You got

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Speaker 2: to embrace what's coming. The AI world is coming. Come on,

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Speaker 2: embrace it. That's what we're here doing. Try to bring

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Speaker 2: and make our deal with Europe, which has a great

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Speaker 2: deal done by Donald Trump.

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Speaker 3: Let's make that deal better.

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Speaker 4: Secretary Letnik, just on that point and point take in

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Speaker 4: on what you see as the benefit to embracing that

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Speaker 4: tech with the EU over and over again has insisted

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Speaker 4: that it's digital laws are not up for discussion. Are

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Speaker 4: you seeing any sort of relenting from them as you've

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Speaker 4: been pushing it. Does it seem like they would agree

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Speaker 4: to you on this point.

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Speaker 2: Well, you know, I see a lot of ministers. Remember

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Speaker 2: there's twenty seven countries, so some are.

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Speaker 3: More open minded than others.

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Speaker 2: But you know, it's a process which is talking to

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Speaker 2: them and telling them that if they want to get

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Speaker 2: that kind of investment here, they've got to change the model.

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Speaker 3: So there's the carrot and the stick. You know, if

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Speaker 3: you keep taxing these companies, they're not going to give

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Speaker 3: you the investment. So that's my job.

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Speaker 2: To sort of talk about it and help those American

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Speaker 2: companies find their way clear to invest here and to

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Speaker 2: grow here. And another example for them, I show them

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Speaker 2: that you know they're ruling out clean diesel for batteries,

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Speaker 2: and I try to remind them you don't make.

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Speaker 3: Batteries in Europe.

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Speaker 2: Come on, guys, don't make rules that harm yourself cause

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Speaker 2: you don't make batteries. That's not a good idea. Stick

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Speaker 2: with clean diesel, stick with combustion engines. Come on, be

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Speaker 2: clever about yourselves and just common sense. This is the

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Speaker 2: common sense Trump administration here in Europe, trying to remind

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Speaker 2: them that they have an amazing economy that can grow

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Speaker 2: and build.

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Speaker 3: Will help them grow and build with great trade with America.

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Speaker 2: But you can't be silly and sort of embrace just

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Speaker 2: batteries which you don't make in Europe. So these are

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Speaker 2: the kind of conversations I have. They're pretty fun if

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Speaker 2: you ask me, because I get to point to the

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Speaker 2: growth in America and say, come on, follow our lead

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Speaker 2: and we will have a bigger, better, stronger trade deal.

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Speaker 2: We'll add to it, will add excitement to it.

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Speaker 3: But you've got to come along with.

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Speaker 4: Us, Secretary intern that's the model the growth we've been

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Speaker 4: seeing because the AI has been contributing a lot to

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Speaker 4: this American economy. And as a lot of us been

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Speaker 4: said about the two speed nature of it that on

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Speaker 4: one hand AI is doing and on the other hand,

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Speaker 4: you have consumers that are still feeling high prices. You

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Speaker 4: saw that play out through the most recent elections. There's

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Speaker 4: been a renewed concentration from this Trump administration to try

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Speaker 4: to reduce teriffs, especially on things like food, give food,

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Speaker 4: food goods. Are you and the rest of this administration

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Speaker 4: as you negotiate terror specifically looking at that, trying to

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Speaker 4: find terrists to bring down to lower the cost of

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Speaker 4: everyday household items for American consumers.

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Speaker 3: Exactly.

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Speaker 2: The Trump administration is exactly about affordability. We are going

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Speaker 2: through every line item to try to make sure we

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Speaker 2: can drive affordability across the American consumer landscape.

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Speaker 3: Two things though.

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Speaker 2: American earnings are growing, right, the average earnings of America,

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Speaker 2: their income is growing. So as that grows and we

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Speaker 2: drive prices down, you're going to feel that golden age coming.

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Speaker 3: So it's the.

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Speaker 2: Combination of earnings growing and we raizor focus on bringing

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Speaker 2: down prices. That's one of the things we're doing here today,

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Speaker 2: working together to try to bring down prices on average

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Speaker 2: daily products. We are working on it. The Trump Administration

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Speaker 2: is on it. We have a clear direction from the President.

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Speaker 2: We are going to lower prices and like things more affordable.

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Speaker 2: We're also going to raise income, raising income as well.

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Speaker 1: Just to build on what Dan's talking about. Though, there

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Speaker 1: is a feeling that there is a limit to how

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Speaker 1: much tariffs can go up or how much the Trump

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Speaker 1: administration may have to reduce tariffs going forward in order

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Speaker 1: to address some concerns about cost of living. Has that

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Speaker 1: affected your negotiations at all.

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Speaker 3: No, I think it's pretty easy.

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Speaker 2: The world understands that there's given take in these trade deals,

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Speaker 2: and the benefits are clear that the Trump administration has

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Speaker 2: created the greatest set of trade deals. You know, the

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Speaker 2: President has talked about a two thousand dollars tariff dividend

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Speaker 2: coming back to the American people who got the one

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Speaker 2: big beautiful bill which is going on cut and there's

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Speaker 2: going to be significant income growth from people next year

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Speaker 2: as that bill comes into play, and we are going

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Speaker 2: to focus on the affordability. You saw coffee and cocoa

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Speaker 2: and bananas and all those kind of things. Those prices

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Speaker 2: came down. You're going to see prices continuously come down,

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Speaker 2: energy prices down. You're going to see affordability across the

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Speaker 2: board here, Trump administration is going to win in affordability

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Speaker 2: and income, two sides of the coin.

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Speaker 3: We're going to win.

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Speaker 1: Secretary Latnik, there's been a huge focus, and you've been

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Speaker 1: talking about how US tech has definitely been the passion

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Speaker 1: of the economic growth over the past couple of years.

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Speaker 1: As the Trump administration decided whether or not to allow

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Speaker 1: Nvidia to sell the H two hundred chips into China,

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Speaker 1: that's been a discussion and something that increasingly people are

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Speaker 1: speculating about.

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Speaker 3: Well, I've seen that speculation.

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Speaker 2: That kind of decision sits right on the desk of

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Speaker 2: Donald Trump.

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Speaker 3: Right.

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Speaker 2: He's got Jensen from Nvidio who really wants to sell

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Speaker 2: those chips, and he's got a good reasons for it.

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Speaker 2: There's an enormous number of other people who think that

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Speaker 2: that's something that should be deeply considered. And the benefit

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Speaker 2: that we have is we have Donald Trump in the

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Speaker 2: Oval office. He is going to weigh those decisions. He

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Speaker 2: understands President she the best. He will decide whether we

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Speaker 2: go forward with that or not. That's on his desk

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Speaker 2: with lots of different advisors. The President loves to hear

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Speaker 2: lots of different voices to make those kind of decisions,

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Speaker 2: and he'll decide whether we sell those chips or not,

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Speaker 2: and then we will go execute it.

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Speaker 3: However he decides to go forward.

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Speaker 1: There's a bigger question here, Secretary Lutnik, about what national

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Speaker 1: security is. Is it more of a national security risk

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Speaker 1: to give China some of these high powered chips or

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Speaker 1: is it more of a national security risk to.

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Speaker 3: Not have US tech in China?

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Speaker 1: Has your view on that changed?

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Speaker 2: Well, that's the question exactly as well put and in

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Speaker 2: front of the president, which is, do you want to

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Speaker 2: sell China some chips and keep them using our tech

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Speaker 2: and our tech stack, or do you say to them, look,

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Speaker 2: we're not going to sell you our best chips. We're

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Speaker 2: just going to hold off on that and we're going

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Speaker 2: to compete in the AI race ourselves. So that is

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Speaker 2: the question. It's in front of the president. He's going

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Speaker 2: to decide. It's a really really interesting question. He's got

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Speaker 2: all the information, he's got lots and lots of experts

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Speaker 2: talking to him, and he's going to decide which way

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Speaker 2: he wants to go forward.

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Speaker 4: Secretary Lutnick. Meanwhile, use of IEPA for terroriffts in front

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Speaker 4: of the Supreme Court, the feedback has been skepticism so

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Speaker 4: far from many of the justices, conservative ones included. As

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Speaker 4: this plays out, can you walk us through how you

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Speaker 4: prioritize the different alternatives should the administration's use of terrorists

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Speaker 4: via IEPA get struck down.

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Speaker 2: So I was in the Supreme Court. I sat through

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Speaker 2: the whole argument. The justices were tough on the beginning

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Speaker 2: on the Department of Justices, you know, our person, but

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Speaker 2: then they were much tougher on the other side, much

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Speaker 2: much tougher. So I left that day feeling very confident

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Speaker 2: that we and the President was going to prevail on

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Speaker 2: these IEPA tariffs. So I think you're hearing it from me.

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Speaker 2: I think I was there in the courtroom. I heard

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Speaker 2: it all the way through. I didn't sort of write

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Speaker 2: my story halfway through. I sat all the way through

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Speaker 2: to the end. The President's going to win that case

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Speaker 2: because that makes sense for him to win. But I

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Speaker 2: want to remind you the president has lots of other authorities.

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Speaker 2: He has two thirty twos, he has three oh one's,

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Speaker 2: he has three thirty eights, he has a whole variety.

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Speaker 3: One twelve, one, twenty two. He's got all sorts of

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Speaker 3: other powers.

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Speaker 2: And tariffs are going to be part of this administration

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Speaker 2: going forward, but I don't think they're going to be

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Speaker 2: necessary because the President's going to win the IEPA case

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Speaker 2: in front of the Supreme Court.

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Speaker 1: Secretary Lutnik. Theoretically, if the US did lose that court

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Speaker 1: in front of the Supreme Court, in terms of AIPA

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Speaker 1: as justification, how quickly could you roll out that package

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Speaker 1: of additional measures, whether it's Section three h one or

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Speaker 1: Section two thirty two.

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Speaker 3: I think many of them come very very quickly.

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Speaker 2: I really I don't think most of the big deals

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Speaker 2: I don't think are in jeopardy. I think the people

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Speaker 2: who did those deals, they don't want their tariffs to

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Speaker 2: go up. They want their auto tariffs that's durable. That

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Speaker 2: was in a nine to zero at the Supreme Court.

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Speaker 2: You have auto tariffs, you have semiconductors, you have pharmaceuticals,

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Speaker 2: you have steel and aluminum, you have lumber.

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Speaker 3: All of those are durable tarffs. They're not going anywhere.

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Speaker 2: I think our big trade deals are here to stay

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Speaker 2: the way they are now, right and the others. I

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Speaker 2: think we're going to win the case, but I think

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Speaker 2: it would be relatively straightforward for the President to replace

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Speaker 2: it with other means, but it's not going to be

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Speaker 2: necessary because the President has used IEPA correctly and he's

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Speaker 2: going to win that case.

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Speaker 1: Secretary letnik, We know you've got a really busy morning.

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Speaker 1: But before we let you go, has the Supreme Court

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Speaker 1: case influenced any of your discussions at all with trade

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Speaker 1: partners in terms of what the potential limits are to

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Speaker 1: your ability to negotiate? Are potentially key some of the

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Speaker 1: ongoing negotiations that have been already struck.

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Speaker 2: So that's exactly the point I'm here in Europe. It

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Speaker 2: hasn't come up at all. The fact is we've made

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Speaker 2: a great deal with Europe. They think it's important to them,

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Speaker 2: it's important to us. It includes semiconductors, it includes pharmaceuticals,

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Speaker 2: it includes autos. These are things that are important to

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Speaker 2: the European Union, and they're important. The whole trade deal

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Speaker 2: is important to America. I think this deal stands. I

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Speaker 2: think the question that we are negotiating is how to

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Speaker 2: make the deal bigger, how to make it stronger, how

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Speaker 2: to make it more inclusive, how to bring in these

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Speaker 2: Digital Markets Act and try to improve that for digital America,

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Speaker 2: How to maybe do steal and aluminum, and how to

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Speaker 2: include that, how to do things bigger and better together

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Speaker 2: between our two great economies. I think they're going to

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Speaker 2: do it standards, make sure they take us autos here,

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Speaker 2: and make sure we are working together to extend both

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Speaker 2: the European Union standards and American standard throughout the world.

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Speaker 2: I don't feel that the AIPA case is here at all.

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Speaker 2: I think the opportunities for us to grow and do

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Speaker 2: business together. People want to have their trade deals with America,

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Speaker 2: and I think these deals are durable.

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Speaker 1: US Commerce Secretary Howard Lutnik, thank you so much for

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Speaker 1: your time and good luck over there in Europe