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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Markets, bouncin as the Trump administration signals a deal could

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Speaker 2: be reached to relieve tariffs on Mexico and Canada joining

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Speaker 2: US now is the man behind the negotiations, the forty

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Speaker 2: first United States Secretary of Commas, Howard Lantnik missed the

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Speaker 2: Secretary before we get go in a warm congratulations from

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Speaker 2: the team here at Bloomberg Surveillance on your confirmation.

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Speaker 1: Oh thanks so much.

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Speaker 3: It wasn't last night's speech amazing. I really I could

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Speaker 3: have been more proud of President Trump.

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Speaker 2: We'll get into the niceties on that in just a moment.

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Speaker 2: Let's kick it off, sir with a question about your

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Speaker 2: comments yesterday when you suggested that maybe there could be

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Speaker 2: a compromise on trade between the United States, Mexico and

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Speaker 2: Canada and maybe we'd hear more about that today. Has

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Speaker 2: the President confirmed that is that still the plan?

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Speaker 1: Well?

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Speaker 3: I think what happened is you have the trade ministers

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Speaker 3: and all the people from Canada really working hard with

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Speaker 3: our homeland security people.

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Speaker 1: Remember, this is not a trade war. This is a

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Speaker 1: drug war.

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Speaker 3: We've got fentanyls still pouring into the country, and it's

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Speaker 3: got to stop.

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Speaker 1: So what's happened is they're showing us even more.

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Speaker 3: Ways to try to stop the floor of fentanyl and

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Speaker 3: if they can stop the floor of fenyl. The President

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Speaker 3: is open minded. There are going to be tariffs, let's

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Speaker 3: be clear. But what he is thinking about is which

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Speaker 3: sections of the market that can maybe maybe he'll consider

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Speaker 3: giving them relief until we get to, of course, April second,

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Speaker 3: But I don't want anybody to forget. April second is

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Speaker 3: the day that we announced our reciprocal tariffs around the world,

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Speaker 3: and so April second is coming.

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Speaker 1: But this is about fentanyl this month.

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Speaker 2: Got that. Just want additional clarity, Just to be very

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Speaker 2: clear on this. Yesterday when you said I think the

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Speaker 2: President's going to figure out you do more and on

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Speaker 2: meet you in the middle, we're probably going to announce

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Speaker 2: that tomorrow as in today, can we no longer respect

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Speaker 2: that announcement?

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Speaker 1: No, no, no, no, I didn't say that.

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Speaker 3: I said, is it in is listening to the offers

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Speaker 3: from Mexico and Canada. He's thinking about trying to do

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Speaker 3: something in the middle. He's thinking about it, We're talking

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Speaker 3: about it. We're going to what I leave here, I'm

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Speaker 3: going to go talk about it with him, and I

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Speaker 3: think early this afternoon or this afternoon, we expect to

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Speaker 3: make an announcement. And my my thinking is it's going

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Speaker 3: to be somewhere in the middle, So not one hundred

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Speaker 3: percent of all products and not none, somewhere in the middle,

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Speaker 3: because I think Mexico and Canada are trying the best

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Speaker 3: and let's see where we end up. So I do

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Speaker 3: think somewhere in the middle is a likely outcome.

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Speaker 2: When you say somewhere in the middle, do you mean

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Speaker 2: somewhere in the middle on tariffs, as in somewhere between

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Speaker 2: zero and twenty five or do you mean that certain groups,

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Speaker 2: certain industries will just get a carve out. And would

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Speaker 2: that carve out be say the autos, because the President

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Speaker 2: mentioned last night he'd spoken to the auto's CEOs. It

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Speaker 2: carve outs we should be thinking about here.

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Speaker 3: Yeah, I think I think it's by product and by regent.

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Speaker 3: Remember the USMCA, right, the United States, Mexico and Canada

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Speaker 3: agreement set up some policies that said you've got to

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Speaker 3: have a certain amount of US content in your products

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Speaker 3: to be USMCA compliant. So I think he's thinking about

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Speaker 3: those categories. The USMCA compliant and does not make sense

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Speaker 3: to you. Right, if you complied with the agreement, then

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Speaker 3: maybe you avoid tariffs. And if you didn't comply with

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Speaker 3: the agreement, well you did so at your own risk.

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Speaker 2: You knew you.

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Speaker 3: Weren't complying, and therefore it seems likely that's a place

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Speaker 3: where the President will go. Again, the President gets to

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Speaker 3: make the decision. I'm there talking with him about.

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Speaker 1: It, and so is the team.

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Speaker 3: But our expectation is that it'll be categories. It will

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Speaker 3: be twenty five percent, but it'll be there will be

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Speaker 3: some categories left out. It could well be autos, could

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Speaker 3: be others as well. USMCA go look at that. That

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Speaker 3: was the agreement we made with US, Mexico and Canada

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Speaker 3: saying those products are exempt.

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Speaker 1: Everyone who didn't.

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Speaker 3: Live under those terms and did so at their own

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Speaker 3: risk knew they were doing it at their own risk.

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Speaker 1: Always.

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Speaker 4: Secretary Latna, good morning. Would you say right now that

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Speaker 4: you think that US autos like GM and Ford are

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Speaker 4: compliant under USMCA.

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Speaker 3: That is my understanding is the Big Three say they

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Speaker 3: produce cars that are compliant under US MCA, which means

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Speaker 3: they have sufficient US content in them to be part

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Speaker 3: of the US MCA agreement. So I think that's part

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Speaker 3: of our discussion and the president's really thinking about that.

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Speaker 4: So it's fair to assume then, especially given the constituencies

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Speaker 4: of auto workers that the President was able to pick

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Speaker 4: up in this past election, that it is the auto

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Speaker 4: industry that can potentially get that exemption later this afternoon.

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Speaker 3: It's not really the deceemption, remember, it's it's we're trying

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Speaker 3: to end fetanyl.

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Speaker 1: Coming into the country.

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Speaker 3: So we're trying to set a message that fetanyl has

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Speaker 3: got to end coming in from Mexico and and it

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Speaker 3: just has to end. And they've done a reasonable job

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Speaker 3: on the border, and they're going to do a better

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Speaker 3: job on the border.

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Speaker 1: But this is memory.

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Speaker 3: It's a key about fentanyl for this month April. Second,

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Speaker 3: we could talk about the rest, but this month it's

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Speaker 3: about fentanyl, and the President's trying to give.

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Speaker 1: Mexico and Canada some statement, some move.

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Speaker 3: Forward because they are doing they are trying their hardest,

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Speaker 3: and we believe they're trying their hardest. But the fact

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Speaker 3: is that we're got to put something on because deaths

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Speaker 3: in America have not decreased in a way that is sufficient.

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Speaker 4: Deaths of in America many families will sympathize with this,

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Speaker 4: remarks me myself, I know families who have been at

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Speaker 4: the end of the suffering when it comes to fentanyl.

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Speaker 4: But yesterday though, the President questioned the fairness of Canadian banks,

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Speaker 4: So what is it about. Is it about Canada's banking

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Speaker 4: system or is it really about fentanyl?

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Speaker 3: So this month, right now, is about fentanyl. When we

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Speaker 3: talk about April second, we will talk about the bigger

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Speaker 3: trade picture between our trading partners Canada and our trading

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Speaker 3: parts of Mexico. So April second, I'll be happy to

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Speaker 3: come on and talk to you about our thinking and

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Speaker 3: our thoughts about a broad trading model. But right now

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Speaker 3: it's about fentanyl. This is a drug related issue. Drugs

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Speaker 3: coming into the United States of America have got to

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Speaker 3: stop the border. It's got to remain closed. That's the

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Speaker 3: key of how you treat your great trading partner. You

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Speaker 3: treat your great trading partner with respect, and you stop

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Speaker 3: letting fentanyl into the country. So my view is the

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Speaker 3: President is thinking about it. He's thinking about autos, he's

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Speaker 3: thinking about USMCA. He's going to come up with a plan.

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Speaker 3: This afternoon, We're going to announce that plan. I think

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Speaker 3: it's going to be in the middle somewhere. There's going

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Speaker 3: to be twenty five percent tariffs. It's not the middle

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Speaker 3: as in a number. I think it's a middle in

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Speaker 3: terms of USMCA, not USMCA. But the President will decide

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Speaker 3: that this afternoon and then we'll go on from there.

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Speaker 1: But think about that.

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Speaker 3: If you were compliant with USMCA, you did with President

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Speaker 3: Trump asked in his last term, and if you weren't compliant,

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Speaker 3: you did that at your own risk.

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Speaker 5: Secretary Lutnik, I just want to make sure that I

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Speaker 5: understand this correctly. You're talking about the idea that this

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Speaker 5: all has to do with the drug wars, and at

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Speaker 5: the same time, some people have speculated this could lead

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Speaker 5: to a renegotiation of USMCA that would lead all around

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Speaker 5: to even lower tariffs than before. Are you saying that's

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Speaker 5: off the table. The tariffs are still part of this

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Speaker 5: at the twenty five percent level.

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Speaker 3: Well, remember April second, we begin our reciprocity model, which

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Speaker 3: is how you treat us as how we treat you,

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Speaker 3: and that is going to be part of this exception

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Speaker 3: part of his tarr policy. And then he's got industries, autos, semiconductors, pharmaceuticals,

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Speaker 3: steal and aluminum and copper lumber. These issues need to

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Speaker 3: come home. We need to help our domestic industries grow

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Speaker 3: and flourish, and so we called out those product sets

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Speaker 3: for extra focus.

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Speaker 1: But that's April second.

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Speaker 3: So on April second, our reciprocal trade policy will come out.

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Speaker 3: In twenty twenty six, we renegotiate USMCA with Canada and Mexico,

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Speaker 3: and we're going to have really clear analysis and clear

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Speaker 3: focus on how that changes. But right today, let's be clear,

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Speaker 3: today is about fentanyl.

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Speaker 5: We heard from last night the President. He said that

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Speaker 5: he was fine with a little disturbance, but going forward

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Speaker 5: there will be all of these gains realized. Secretary Lutnik,

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Speaker 5: are you concerned about the level of uncertainty express not

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Speaker 5: just in markets, but just even from people who you

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Speaker 5: used to work with, where they're saying, we don't have

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Speaker 5: a clear sense of what the goal is. And I

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Speaker 5: understand you're saying it'll come on April second, but in

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Speaker 5: the meantime people are just putting all plans on hold.

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Speaker 3: Well, I'm not seeing all plants at all. In fact,

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Speaker 3: I'm seeing the opposite. Right, we saw Apple commit to

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Speaker 3: five hundred billion dollars. We saw open Ai an oracle

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Speaker 3: commit to five hundred billion dollars of investments. TSMC just

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Speaker 3: the other day saying one hundred billion dollar investment in America.

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Speaker 3: Sawt Bank two hundred billion dollar investment in America.

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Speaker 1: So a trillion, three hundred billion dollars.

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Speaker 3: And you think people are waiting on the sidelines, We

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Speaker 3: feel it every day. All these companies are coming, they're

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Speaker 3: building in America, they're committing to America.

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Speaker 1: We agree April second is coming.

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Speaker 3: We have to do our work before we announce our

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Speaker 3: plans on April second. Of course, we have to do

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Speaker 3: our work and do it properly and do it thoughtfully.

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Speaker 1: But in this period of time, America needs.

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Speaker 3: A president to protect people from fentanyl that shouldn't be

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Speaker 3: killing people in our country. China still has fentanyl as

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Speaker 3: a highest list of subsidies.

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Speaker 1: Subsidies.

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Speaker 3: They subsidize the production of precursors, the ingredients to fetanol.

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Speaker 3: They send it to Mexico and Canada and into the

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Speaker 3: country it comes. So our president has said enough already,

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Speaker 3: enough already, and that's why he's come up with this

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Speaker 3: tariff plan today. April second will be a fairness plan,

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Speaker 3: and fairness plan is not that hard to figure out if.

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Speaker 1: You have a look it.

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Speaker 4: Can I jump in there on the on the fairness plan,

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Speaker 4: is that an initial, partial assessment and response or will

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Speaker 4: tariffs actually hit on April second?

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Speaker 3: Well, there are a whole variety of laws in the

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Speaker 3: United States of America that we will follow with precision.

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Speaker 1: Some tariffs will come on right away, and then some.

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Speaker 3: Tariffs will go be registered and they will take three

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Speaker 3: weeks or four weeks, and they will come on in

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Speaker 3: due course.

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Speaker 1: So there's a process for tariffs in America.

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Speaker 3: But we will announce them and we will be negotiating

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Speaker 3: with all these countries thereafter, and then they go into

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Speaker 3: effect over a period of months, so basically April second. No,

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Speaker 3: we'll announce them and then they come in.

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Speaker 4: Because there's months of studies, massive report, public opinion. This

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Speaker 4: can take a very long time. So legally there's no

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Speaker 4: law that's short enough really to put tariffs in place

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Speaker 4: on the second. So how long between April second till

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Speaker 4: the tariffs actually hit do you think we'll see?

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Speaker 3: As I said there, we launched our studies on January twentieth,

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Speaker 3: so April second, those studies are done. Some tariffs can

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Speaker 3: come straight away, some can come weeks later, some can

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Speaker 3: some can take over a month or two to come online.

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Speaker 1: But it will be very, very.

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Speaker 3: Thoughtful, very organized, and we begin on April second. We've

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Speaker 3: announced it from January twentieth that April second was the day.

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Speaker 3: We're sticking with our day. We're sticking with reciprocity. It

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Speaker 3: is time for America to be treated fairly. And that's

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Speaker 3: what the President Trump is going to do. He's going

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Speaker 3: to make sure we are treated fairly. He's talked about

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Speaker 3: it last night. He's made this clear. So Mexico and

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Speaker 3: Canada is about fentanyl today for the month of March,

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Speaker 3: but on April second, it's about fairness. And yes, that

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Speaker 3: is a process that comes in that is strictly specific

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Speaker 3: to the laws, but it'll.

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Speaker 1: Take over a month or two months to come in.

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Speaker 3: But once it's in, they will stick, which is treat

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Speaker 3: us fairly, treat us properly, or don't trade with us.

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Speaker 2: Miss the Secretary, I was a man of my word.

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Speaker 2: I am a man of my word, and I promise

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Speaker 2: we'd come back to the address last night. So let's

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Speaker 2: finish there. The President of the United States talked about

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Speaker 2: a big, beautiful drop in interest rates. A lot of

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Speaker 2: people in this market are curious whether the president is

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Speaker 2: no longer sensitive to the deadI girations of the equity market.

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Speaker 2: The focus, the emphsis now is on the bondom market.

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Speaker 2: Is that the shift is that the way to understand things.

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Speaker 1: Well, I think that is too specific.

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Speaker 3: I mean, let's face it, if we balance the budget

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Speaker 3: of the United States of America, interest rates are going

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Speaker 3: to come smashing down. And I don't mean ten basis points,

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Speaker 3: I mean one hundred and fifty basis points. You're going

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Speaker 3: to have an explosion in the housing market. You're going

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Speaker 3: to have an explosion in the equity markets. Because this

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Speaker 3: is not a manufactured cut in the interest rates like

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Speaker 3: you saw last time with this huge money supply which

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Speaker 3: created the vast inflation.

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Speaker 1: This is the right way to do it.

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Speaker 3: You stop printing money, you stop running deficits, You balance

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Speaker 3: the budget of the United States of America. You smash

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Speaker 3: interest rates down, you produce enormous amounts of energy, drive

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Speaker 3: those prices down, and you will see the greatest equity

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Speaker 3: market and the greatest economy in the United States of America. Now,

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Speaker 3: remember this president is worried about the United States of America.

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Speaker 3: Sometimes I can asked questions about am I worried about

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Speaker 3: Canadam I worried about Mexican And am I worried about

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Speaker 3: the EU? My president is worried about the United States

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Speaker 3: heats of America. And you are going to see the

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Speaker 3: greatest equity market and buyd markets under President Trump.

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Speaker 1: Well, let's you.

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Speaker 2: Worry about the American data right now because equities have

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Speaker 2: rolled over just a little bit, you know, the market. Well,

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Speaker 2: I won't make a big deal of it. We're just

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Speaker 2: a bit softer at the back of this data from ADP,

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Speaker 2: which is a downside surprise at seventy seven K. The

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Speaker 2: estimate was one forty. So with sub one hundred, we'll

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Speaker 2: see what we get on the m later on this

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Speaker 2: morning and on payrolls on Friday. But as you know,

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Speaker 2: mister Secretary, the data over the last few weeks hasn't

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Speaker 2: been great. The survey data has been softer, and a

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Speaker 2: lot of these companies in these surveys have pointed to

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Speaker 2: tariff uncertainty. Do you accept that the business community needs

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Speaker 2: some clarity or whether it's twenty five, fifteen, ten, whatever,

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Speaker 2: the number is going to be that the volatility around

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Speaker 2: the trade story, the cumulative effect of persistent uncertainty is

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Speaker 2: starting to wink into this economy a little bit.

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Speaker 1: No way.

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Speaker 3: I mean, the President spoke about him last night. He

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Speaker 3: said Biden left them a pile a poop. He left

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Speaker 3: him allows the economy that he's trying to fix. You're

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Speaker 3: looking at data that's Biden data. Do not try to

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Speaker 3: besmirch my President Trump with Biden's nonsense.

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Speaker 2: Do you hear the manufacturing number is Biden data? I

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Speaker 2: just want to be very clear, that's your opinion. You're

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Speaker 2: entitled to it. You think that's his dates, not your

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Speaker 2: my opinion.

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Speaker 1: Okay, what possible could change? Seriously, we are in early March.

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Speaker 1: My president took over January twentieth.

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Speaker 3: You think economic data coming out in early March is

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Speaker 3: Donald Trump related data?

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Speaker 1: Monthly?

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Speaker 2: MISSUS Secretary? Are you okay? Are you suggesting we don't

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Speaker 2: have to get into an argument about it? You suggesting

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Speaker 2: so when bone yields drop in a market that's worth

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Speaker 2: trillions of dollars and investor's place bets off the back

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Speaker 2: of that economic data, that that data doesn't count front

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Speaker 2: of think that that data somehow misleading.

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Speaker 1: I think that.

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Speaker 3: Data is leading you to understand. If Joe Biden was

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Speaker 3: still in charge, you'd be in trouble. But you have

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Speaker 3: a new president. There's a new sheriff in town, and

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Speaker 3: I would bet, I would bet on the economic growth

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Speaker 3: that is coming from Donald Trump.

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Speaker 1: You see the investments. You see it already.

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Speaker 3: There's trillions of dollars of manufacturing moving to America. It's

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Speaker 3: moving to America. That means the cavalry is coming. For

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Speaker 3: every trillion dollars that invests in the United States of America,

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Speaker 3: that produces one percent of GDP growth, imagine that you

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Speaker 3: have a president bringing GDP growth directly to his economy.

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Speaker 1: That's amazing.

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Speaker 2: Mister Secretary. We appreciate your time and your opinion. As always, Sir,

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Speaker 2: the US Commerce Secretary, how would love maca on the

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Speaker 2: economic data, financial markets, and what's going to happen with

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Speaker 2: trade