Speaker 1: Bloomberg Audio Studios, podcasts, radio news optimism of a FED
Speaker 1: rate cut. We are seeing across the board a sense
Speaker 1: of calm after a pretty volatile two weeks. We do
Speaker 1: see a sense that even in bond markets there is
Speaker 1: a bid, with don yields down just about two basis
Speaker 1: points four point five percent. Meanwhile, crude prices lower yet
Speaker 1: again after declining almost four percent last week. Traded on
Speaker 1: the IMAX down now just three tenths of a percent.
Speaker 1: And this comes as trade talks between the US and
Speaker 1: the European Union are underway in Europe. The EU sharing
Speaker 1: it doesn't expect a deal to lower tariffs on steel
Speaker 1: and other products. Joining US now from Brussels is US
Speaker 1: Commerce Secretary Howard Lucknick. Secretary Lutnik, thank you so much
Speaker 1: for being with us. I want to start on your
Speaker 1: discussions with the European Union. We were hearing some noise
Speaker 1: that it doesn't necessarily include reducing steel and aluminum tariffs
Speaker 1: from fifty percent to fifty percent. Is that off the
Speaker 1: table for now?
Speaker 2: No, what we're talking about. Everything is on the table.
Speaker 2: When you have such a great partner as the European Union.
Speaker 2: They have four hundred and fifty million people and a
Speaker 2: twenty trillion dollar economy, so the opportunity is great. They
Speaker 2: would like to have steel and aluminum as part of
Speaker 2: this package, and we think it is very very important
Speaker 2: that they understand our digital companies and they reconsider their
Speaker 2: digital regulations to be more inviting to our big companies.
Speaker 2: They tend to tax our big companies and attack our
Speaker 2: big companies, and they're not getting the investment that we're getting. Right,
Speaker 2: You're seeing trillions of dollars of our tech companies investing
Speaker 2: in building data centers in America and they're not getting
Speaker 2: them here. So we're talking to them about take your
Speaker 2: foot off the regulatory statement, build those data centers in America,
Speaker 2: and in exchange for that, we'll come up with a
Speaker 2: cool steal and aluminum deal that we'll all be together.
Speaker 3: So it's all all trading. These are trade deals.
Speaker 2: You're talking about opportunities together. Let's bring it all on
Speaker 2: the table. Let's see what we can accomplish.
Speaker 1: Secretary Lutnik, what's the threshold in terms of reducing certain
Speaker 1: regulations in Europe on US tech companies that's required in
Speaker 1: order to create some sort of framework for this deal?
Speaker 2: Well, what the European Union does is they say, well,
Speaker 2: our digital rules they only touch companies above a certain threshold.
Speaker 2: Of course, the only companies above those threshold are all
Speaker 2: American companies.
Speaker 3: So come on, that can't be the rule. Let's take
Speaker 3: it off.
Speaker 2: Let's settle the outstanding cases against Google and against Microsoft
Speaker 2: and against Amazon.
Speaker 3: Let's put them behind us.
Speaker 2: Let's come up with a reasonable framework where these companies
Speaker 2: can grow and build, and then those companies will agree
Speaker 2: to invest hundreds of billions of dollars of data centers here.
Speaker 2: So the idea is, if they take their foot off
Speaker 2: this regulatory framework and make it more inviting for our companies,
Speaker 2: they can get the benefit of hundreds of billions, possibly
Speaker 2: a trillion dollars of investment a year. So the idea is,
Speaker 2: I'm trying to convince them that winning the way Donald
Speaker 2: Trump is winning in America is the way to go.
Speaker 2: Look at America, look at these growth rates. Come on
Speaker 2: to realize our investment in ai Cape's last quarter exceeded
Speaker 2: consumer spending in America. We had three point eight percent
Speaker 2: GDP growth. We're going to grow over four percent, and
Speaker 2: next year we could grow over five percent. You got
Speaker 2: to embrace what's coming. The AI world is coming. Come on,
Speaker 2: embrace it. That's what we're here doing. Try to bring
Speaker 2: and make our deal with Europe, which has a great
Speaker 2: deal done by Donald Trump.
Speaker 3: Let's make that deal better.
Speaker 4: Secretary Letnik, just on that point and point take in
Speaker 4: on what you see as the benefit to embracing that
Speaker 4: tech with the EU over and over again has insisted
Speaker 4: that it's digital laws are not up for discussion. Are
Speaker 4: you seeing any sort of relenting from them as you've
Speaker 4: been pushing it. Does it seem like they would agree
Speaker 4: to you on this point.
Speaker 2: Well, you know, I see a lot of ministers. Remember
Speaker 2: there's twenty seven countries, so some are.
Speaker 3: More open minded than others.
Speaker 2: But you know, it's a process which is talking to
Speaker 2: them and telling them that if they want to get
Speaker 2: that kind of investment here, they've got to change the model.
Speaker 3: So there's the carrot and the stick. You know, if
Speaker 3: you keep taxing these companies, they're not going to give
Speaker 3: you the investment. So that's my job.
Speaker 2: To sort of talk about it and help those American
Speaker 2: companies find their way clear to invest here and to
Speaker 2: grow here. And another example for them, I show them
Speaker 2: that you know they're ruling out clean diesel for batteries,
Speaker 2: and I try to remind them you don't make.
Speaker 3: Batteries in Europe.
Speaker 2: Come on, guys, don't make rules that harm yourself cause
Speaker 2: you don't make batteries. That's not a good idea. Stick
Speaker 2: with clean diesel, stick with combustion engines. Come on, be
Speaker 2: clever about yourselves and just common sense. This is the
Speaker 2: common sense Trump administration here in Europe, trying to remind
Speaker 2: them that they have an amazing economy that can grow
Speaker 2: and build.
Speaker 3: Will help them grow and build with great trade with America.
Speaker 2: But you can't be silly and sort of embrace just
Speaker 2: batteries which you don't make in Europe. So these are
Speaker 2: the kind of conversations I have. They're pretty fun if
Speaker 2: you ask me, because I get to point to the
Speaker 2: growth in America and say, come on, follow our lead
Speaker 2: and we will have a bigger, better, stronger trade deal.
Speaker 2: We'll add to it, will add excitement to it.
Speaker 3: But you've got to come along with.
Speaker 4: Us, Secretary intern that's the model the growth we've been
Speaker 4: seeing because the AI has been contributing a lot to
Speaker 4: this American economy. And as a lot of us been
Speaker 4: said about the two speed nature of it that on
Speaker 4: one hand AI is doing and on the other hand,
Speaker 4: you have consumers that are still feeling high prices. You
Speaker 4: saw that play out through the most recent elections. There's
Speaker 4: been a renewed concentration from this Trump administration to try
Speaker 4: to reduce teriffs, especially on things like food, give food,
Speaker 4: food goods. Are you and the rest of this administration
Speaker 4: as you negotiate terror specifically looking at that, trying to
Speaker 4: find terrists to bring down to lower the cost of
Speaker 4: everyday household items for American consumers.
Speaker 3: Exactly.
Speaker 2: The Trump administration is exactly about affordability. We are going
Speaker 2: through every line item to try to make sure we
Speaker 2: can drive affordability across the American consumer landscape.
Speaker 3: Two things though.
Speaker 2: American earnings are growing, right, the average earnings of America,
Speaker 2: their income is growing. So as that grows and we
Speaker 2: drive prices down, you're going to feel that golden age coming.
Speaker 3: So it's the.
Speaker 2: Combination of earnings growing and we raizor focus on bringing
Speaker 2: down prices. That's one of the things we're doing here today,
Speaker 2: working together to try to bring down prices on average
Speaker 2: daily products. We are working on it. The Trump Administration
Speaker 2: is on it. We have a clear direction from the President.
Speaker 2: We are going to lower prices and like things more affordable.
Speaker 2: We're also going to raise income, raising income as well.
Speaker 1: Just to build on what Dan's talking about. Though, there
Speaker 1: is a feeling that there is a limit to how
Speaker 1: much tariffs can go up or how much the Trump
Speaker 1: administration may have to reduce tariffs going forward in order
Speaker 1: to address some concerns about cost of living. Has that
Speaker 1: affected your negotiations at all.
Speaker 3: No, I think it's pretty easy.
Speaker 2: The world understands that there's given take in these trade deals,
Speaker 2: and the benefits are clear that the Trump administration has
Speaker 2: created the greatest set of trade deals. You know, the
Speaker 2: President has talked about a two thousand dollars tariff dividend
Speaker 2: coming back to the American people who got the one
Speaker 2: big beautiful bill which is going on cut and there's
Speaker 2: going to be significant income growth from people next year
Speaker 2: as that bill comes into play, and we are going
Speaker 2: to focus on the affordability. You saw coffee and cocoa
Speaker 2: and bananas and all those kind of things. Those prices
Speaker 2: came down. You're going to see prices continuously come down,
Speaker 2: energy prices down. You're going to see affordability across the
Speaker 2: board here, Trump administration is going to win in affordability
Speaker 2: and income, two sides of the coin.
Speaker 3: We're going to win.
Speaker 1: Secretary Latnik, there's been a huge focus, and you've been
Speaker 1: talking about how US tech has definitely been the passion
Speaker 1: of the economic growth over the past couple of years.
Speaker 1: As the Trump administration decided whether or not to allow
Speaker 1: Nvidia to sell the H two hundred chips into China,
Speaker 1: that's been a discussion and something that increasingly people are
Speaker 1: speculating about.
Speaker 3: Well, I've seen that speculation.
Speaker 2: That kind of decision sits right on the desk of
Speaker 2: Donald Trump.
Speaker 3: Right.
Speaker 2: He's got Jensen from Nvidio who really wants to sell
Speaker 2: those chips, and he's got a good reasons for it.
Speaker 2: There's an enormous number of other people who think that
Speaker 2: that's something that should be deeply considered. And the benefit
Speaker 2: that we have is we have Donald Trump in the
Speaker 2: Oval office. He is going to weigh those decisions. He
Speaker 2: understands President she the best. He will decide whether we
Speaker 2: go forward with that or not. That's on his desk
Speaker 2: with lots of different advisors. The President loves to hear
Speaker 2: lots of different voices to make those kind of decisions,
Speaker 2: and he'll decide whether we sell those chips or not,
Speaker 2: and then we will go execute it.
Speaker 3: However he decides to go forward.
Speaker 1: There's a bigger question here, Secretary Lutnik, about what national
Speaker 1: security is. Is it more of a national security risk
Speaker 1: to give China some of these high powered chips or
Speaker 1: is it more of a national security risk to.
Speaker 3: Not have US tech in China?
Speaker 1: Has your view on that changed?
Speaker 2: Well, that's the question exactly as well put and in
Speaker 2: front of the president, which is, do you want to
Speaker 2: sell China some chips and keep them using our tech
Speaker 2: and our tech stack, or do you say to them, look,
Speaker 2: we're not going to sell you our best chips. We're
Speaker 2: just going to hold off on that and we're going
Speaker 2: to compete in the AI race ourselves. So that is
Speaker 2: the question. It's in front of the president. He's going
Speaker 2: to decide. It's a really really interesting question. He's got
Speaker 2: all the information, he's got lots and lots of experts
Speaker 2: talking to him, and he's going to decide which way
Speaker 2: he wants to go forward.
Speaker 4: Secretary Lutnick. Meanwhile, use of IEPA for terroriffts in front
Speaker 4: of the Supreme Court, the feedback has been skepticism so
Speaker 4: far from many of the justices, conservative ones included. As
Speaker 4: this plays out, can you walk us through how you
Speaker 4: prioritize the different alternatives should the administration's use of terrorists
Speaker 4: via IEPA get struck down.
Speaker 2: So I was in the Supreme Court. I sat through
Speaker 2: the whole argument. The justices were tough on the beginning
Speaker 2: on the Department of Justices, you know, our person, but
Speaker 2: then they were much tougher on the other side, much
Speaker 2: much tougher. So I left that day feeling very confident
Speaker 2: that we and the President was going to prevail on
Speaker 2: these IEPA tariffs. So I think you're hearing it from me.
Speaker 2: I think I was there in the courtroom. I heard
Speaker 2: it all the way through. I didn't sort of write
Speaker 2: my story halfway through. I sat all the way through
Speaker 2: to the end. The President's going to win that case
Speaker 2: because that makes sense for him to win. But I
Speaker 2: want to remind you the president has lots of other authorities.
Speaker 2: He has two thirty twos, he has three oh one's,
Speaker 2: he has three thirty eights, he has a whole variety.
Speaker 3: One twelve, one, twenty two. He's got all sorts of
Speaker 3: other powers.
Speaker 2: And tariffs are going to be part of this administration
Speaker 2: going forward, but I don't think they're going to be
Speaker 2: necessary because the President's going to win the IEPA case
Speaker 2: in front of the Supreme Court.
Speaker 1: Secretary Lutnik. Theoretically, if the US did lose that court
Speaker 1: in front of the Supreme Court, in terms of AIPA
Speaker 1: as justification, how quickly could you roll out that package
Speaker 1: of additional measures, whether it's Section three h one or
Speaker 1: Section two thirty two.
Speaker 3: I think many of them come very very quickly.
Speaker 2: I really I don't think most of the big deals
Speaker 2: I don't think are in jeopardy. I think the people
Speaker 2: who did those deals, they don't want their tariffs to
Speaker 2: go up. They want their auto tariffs that's durable. That
Speaker 2: was in a nine to zero at the Supreme Court.
Speaker 2: You have auto tariffs, you have semiconductors, you have pharmaceuticals,
Speaker 2: you have steel and aluminum, you have lumber.
Speaker 3: All of those are durable tarffs. They're not going anywhere.
Speaker 2: I think our big trade deals are here to stay
Speaker 2: the way they are now, right and the others. I
Speaker 2: think we're going to win the case, but I think
Speaker 2: it would be relatively straightforward for the President to replace
Speaker 2: it with other means, but it's not going to be
Speaker 2: necessary because the President has used IEPA correctly and he's
Speaker 2: going to win that case.
Speaker 1: Secretary letnik, We know you've got a really busy morning.
Speaker 1: But before we let you go, has the Supreme Court
Speaker 1: case influenced any of your discussions at all with trade
Speaker 1: partners in terms of what the potential limits are to
Speaker 1: your ability to negotiate? Are potentially key some of the
Speaker 1: ongoing negotiations that have been already struck.
Speaker 2: So that's exactly the point I'm here in Europe. It
Speaker 2: hasn't come up at all. The fact is we've made
Speaker 2: a great deal with Europe. They think it's important to them,
Speaker 2: it's important to us. It includes semiconductors, it includes pharmaceuticals,
Speaker 2: it includes autos. These are things that are important to
Speaker 2: the European Union, and they're important. The whole trade deal
Speaker 2: is important to America. I think this deal stands. I
Speaker 2: think the question that we are negotiating is how to
Speaker 2: make the deal bigger, how to make it stronger, how
Speaker 2: to make it more inclusive, how to bring in these
Speaker 2: Digital Markets Act and try to improve that for digital America,
Speaker 2: How to maybe do steal and aluminum, and how to
Speaker 2: include that, how to do things bigger and better together
Speaker 2: between our two great economies. I think they're going to
Speaker 2: do it standards, make sure they take us autos here,
Speaker 2: and make sure we are working together to extend both
Speaker 2: the European Union standards and American standard throughout the world.
Speaker 2: I don't feel that the AIPA case is here at all.
Speaker 2: I think the opportunities for us to grow and do
Speaker 2: business together. People want to have their trade deals with America,
Speaker 2: and I think these deals are durable.
Speaker 1: US Commerce Secretary Howard Lutnik, thank you so much for
Speaker 1: your time and good luck over there in Europe