Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Markets, bouncin as the Trump administration signals a deal could
Speaker 2: be reached to relieve tariffs on Mexico and Canada joining
Speaker 2: US now is the man behind the negotiations, the forty
Speaker 2: first United States Secretary of Commas, Howard Lantnik missed the
Speaker 2: Secretary before we get go in a warm congratulations from
Speaker 2: the team here at Bloomberg Surveillance on your confirmation.
Speaker 1: Oh thanks so much.
Speaker 3: It wasn't last night's speech amazing. I really I could
Speaker 3: have been more proud of President Trump.
Speaker 2: We'll get into the niceties on that in just a moment.
Speaker 2: Let's kick it off, sir with a question about your
Speaker 2: comments yesterday when you suggested that maybe there could be
Speaker 2: a compromise on trade between the United States, Mexico and
Speaker 2: Canada and maybe we'd hear more about that today. Has
Speaker 2: the President confirmed that is that still the plan?
Speaker 1: Well?
Speaker 3: I think what happened is you have the trade ministers
Speaker 3: and all the people from Canada really working hard with
Speaker 3: our homeland security people.
Speaker 1: Remember, this is not a trade war. This is a
Speaker 1: drug war.
Speaker 3: We've got fentanyls still pouring into the country, and it's
Speaker 3: got to stop.
Speaker 1: So what's happened is they're showing us even more.
Speaker 3: Ways to try to stop the floor of fentanyl and
Speaker 3: if they can stop the floor of fenyl. The President
Speaker 3: is open minded. There are going to be tariffs, let's
Speaker 3: be clear. But what he is thinking about is which
Speaker 3: sections of the market that can maybe maybe he'll consider
Speaker 3: giving them relief until we get to, of course, April second,
Speaker 3: But I don't want anybody to forget. April second is
Speaker 3: the day that we announced our reciprocal tariffs around the world,
Speaker 3: and so April second is coming.
Speaker 1: But this is about fentanyl this month.
Speaker 2: Got that. Just want additional clarity, Just to be very
Speaker 2: clear on this. Yesterday when you said I think the
Speaker 2: President's going to figure out you do more and on
Speaker 2: meet you in the middle, we're probably going to announce
Speaker 2: that tomorrow as in today, can we no longer respect
Speaker 2: that announcement?
Speaker 1: No, no, no, no, I didn't say that.
Speaker 3: I said, is it in is listening to the offers
Speaker 3: from Mexico and Canada. He's thinking about trying to do
Speaker 3: something in the middle. He's thinking about it, We're talking
Speaker 3: about it. We're going to what I leave here, I'm
Speaker 3: going to go talk about it with him, and I
Speaker 3: think early this afternoon or this afternoon, we expect to
Speaker 3: make an announcement. And my my thinking is it's going
Speaker 3: to be somewhere in the middle, So not one hundred
Speaker 3: percent of all products and not none, somewhere in the middle,
Speaker 3: because I think Mexico and Canada are trying the best
Speaker 3: and let's see where we end up. So I do
Speaker 3: think somewhere in the middle is a likely outcome.
Speaker 2: When you say somewhere in the middle, do you mean
Speaker 2: somewhere in the middle on tariffs, as in somewhere between
Speaker 2: zero and twenty five or do you mean that certain groups,
Speaker 2: certain industries will just get a carve out. And would
Speaker 2: that carve out be say the autos, because the President
Speaker 2: mentioned last night he'd spoken to the auto's CEOs. It
Speaker 2: carve outs we should be thinking about here.
Speaker 3: Yeah, I think I think it's by product and by regent.
Speaker 3: Remember the USMCA, right, the United States, Mexico and Canada
Speaker 3: agreement set up some policies that said you've got to
Speaker 3: have a certain amount of US content in your products
Speaker 3: to be USMCA compliant. So I think he's thinking about
Speaker 3: those categories. The USMCA compliant and does not make sense
Speaker 3: to you. Right, if you complied with the agreement, then
Speaker 3: maybe you avoid tariffs. And if you didn't comply with
Speaker 3: the agreement, well you did so at your own risk.
Speaker 2: You knew you.
Speaker 3: Weren't complying, and therefore it seems likely that's a place
Speaker 3: where the President will go. Again, the President gets to
Speaker 3: make the decision. I'm there talking with him about.
Speaker 1: It, and so is the team.
Speaker 3: But our expectation is that it'll be categories. It will
Speaker 3: be twenty five percent, but it'll be there will be
Speaker 3: some categories left out. It could well be autos, could
Speaker 3: be others as well. USMCA go look at that. That
Speaker 3: was the agreement we made with US, Mexico and Canada
Speaker 3: saying those products are exempt.
Speaker 1: Everyone who didn't.
Speaker 3: Live under those terms and did so at their own
Speaker 3: risk knew they were doing it at their own risk.
Speaker 1: Always.
Speaker 4: Secretary Latna, good morning. Would you say right now that
Speaker 4: you think that US autos like GM and Ford are
Speaker 4: compliant under USMCA.
Speaker 3: That is my understanding is the Big Three say they
Speaker 3: produce cars that are compliant under US MCA, which means
Speaker 3: they have sufficient US content in them to be part
Speaker 3: of the US MCA agreement. So I think that's part
Speaker 3: of our discussion and the president's really thinking about that.
Speaker 4: So it's fair to assume then, especially given the constituencies
Speaker 4: of auto workers that the President was able to pick
Speaker 4: up in this past election, that it is the auto
Speaker 4: industry that can potentially get that exemption later this afternoon.
Speaker 3: It's not really the deceemption, remember, it's it's we're trying
Speaker 3: to end fetanyl.
Speaker 1: Coming into the country.
Speaker 3: So we're trying to set a message that fetanyl has
Speaker 3: got to end coming in from Mexico and and it
Speaker 3: just has to end. And they've done a reasonable job
Speaker 3: on the border, and they're going to do a better
Speaker 3: job on the border.
Speaker 1: But this is memory.
Speaker 3: It's a key about fentanyl for this month April. Second,
Speaker 3: we could talk about the rest, but this month it's
Speaker 3: about fentanyl, and the President's trying to give.
Speaker 1: Mexico and Canada some statement, some move.
Speaker 3: Forward because they are doing they are trying their hardest,
Speaker 3: and we believe they're trying their hardest. But the fact
Speaker 3: is that we're got to put something on because deaths
Speaker 3: in America have not decreased in a way that is sufficient.
Speaker 4: Deaths of in America many families will sympathize with this,
Speaker 4: remarks me myself, I know families who have been at
Speaker 4: the end of the suffering when it comes to fentanyl.
Speaker 4: But yesterday though, the President questioned the fairness of Canadian banks,
Speaker 4: So what is it about. Is it about Canada's banking
Speaker 4: system or is it really about fentanyl?
Speaker 3: So this month, right now, is about fentanyl. When we
Speaker 3: talk about April second, we will talk about the bigger
Speaker 3: trade picture between our trading partners Canada and our trading
Speaker 3: parts of Mexico. So April second, I'll be happy to
Speaker 3: come on and talk to you about our thinking and
Speaker 3: our thoughts about a broad trading model. But right now
Speaker 3: it's about fentanyl. This is a drug related issue. Drugs
Speaker 3: coming into the United States of America have got to
Speaker 3: stop the border. It's got to remain closed. That's the
Speaker 3: key of how you treat your great trading partner. You
Speaker 3: treat your great trading partner with respect, and you stop
Speaker 3: letting fentanyl into the country. So my view is the
Speaker 3: President is thinking about it. He's thinking about autos, he's
Speaker 3: thinking about USMCA. He's going to come up with a plan.
Speaker 3: This afternoon, We're going to announce that plan. I think
Speaker 3: it's going to be in the middle somewhere. There's going
Speaker 3: to be twenty five percent tariffs. It's not the middle
Speaker 3: as in a number. I think it's a middle in
Speaker 3: terms of USMCA, not USMCA. But the President will decide
Speaker 3: that this afternoon and then we'll go on from there.
Speaker 1: But think about that.
Speaker 3: If you were compliant with USMCA, you did with President
Speaker 3: Trump asked in his last term, and if you weren't compliant,
Speaker 3: you did that at your own risk.
Speaker 5: Secretary Lutnik, I just want to make sure that I
Speaker 5: understand this correctly. You're talking about the idea that this
Speaker 5: all has to do with the drug wars, and at
Speaker 5: the same time, some people have speculated this could lead
Speaker 5: to a renegotiation of USMCA that would lead all around
Speaker 5: to even lower tariffs than before. Are you saying that's
Speaker 5: off the table. The tariffs are still part of this
Speaker 5: at the twenty five percent level.
Speaker 3: Well, remember April second, we begin our reciprocity model, which
Speaker 3: is how you treat us as how we treat you,
Speaker 3: and that is going to be part of this exception
Speaker 3: part of his tarr policy. And then he's got industries, autos, semiconductors, pharmaceuticals,
Speaker 3: steal and aluminum and copper lumber. These issues need to
Speaker 3: come home. We need to help our domestic industries grow
Speaker 3: and flourish, and so we called out those product sets
Speaker 3: for extra focus.
Speaker 1: But that's April second.
Speaker 3: So on April second, our reciprocal trade policy will come out.
Speaker 3: In twenty twenty six, we renegotiate USMCA with Canada and Mexico,
Speaker 3: and we're going to have really clear analysis and clear
Speaker 3: focus on how that changes. But right today, let's be clear,
Speaker 3: today is about fentanyl.
Speaker 5: We heard from last night the President. He said that
Speaker 5: he was fine with a little disturbance, but going forward
Speaker 5: there will be all of these gains realized. Secretary Lutnik,
Speaker 5: are you concerned about the level of uncertainty express not
Speaker 5: just in markets, but just even from people who you
Speaker 5: used to work with, where they're saying, we don't have
Speaker 5: a clear sense of what the goal is. And I
Speaker 5: understand you're saying it'll come on April second, but in
Speaker 5: the meantime people are just putting all plans on hold.
Speaker 3: Well, I'm not seeing all plants at all. In fact,
Speaker 3: I'm seeing the opposite. Right, we saw Apple commit to
Speaker 3: five hundred billion dollars. We saw open Ai an oracle
Speaker 3: commit to five hundred billion dollars of investments. TSMC just
Speaker 3: the other day saying one hundred billion dollar investment in America.
Speaker 3: Sawt Bank two hundred billion dollar investment in America.
Speaker 1: So a trillion, three hundred billion dollars.
Speaker 3: And you think people are waiting on the sidelines, We
Speaker 3: feel it every day. All these companies are coming, they're
Speaker 3: building in America, they're committing to America.
Speaker 1: We agree April second is coming.
Speaker 3: We have to do our work before we announce our
Speaker 3: plans on April second. Of course, we have to do
Speaker 3: our work and do it properly and do it thoughtfully.
Speaker 1: But in this period of time, America needs.
Speaker 3: A president to protect people from fentanyl that shouldn't be
Speaker 3: killing people in our country. China still has fentanyl as
Speaker 3: a highest list of subsidies.
Speaker 1: Subsidies.
Speaker 3: They subsidize the production of precursors, the ingredients to fetanol.
Speaker 3: They send it to Mexico and Canada and into the
Speaker 3: country it comes. So our president has said enough already,
Speaker 3: enough already, and that's why he's come up with this
Speaker 3: tariff plan today. April second will be a fairness plan,
Speaker 3: and fairness plan is not that hard to figure out if.
Speaker 1: You have a look it.
Speaker 4: Can I jump in there on the on the fairness plan,
Speaker 4: is that an initial, partial assessment and response or will
Speaker 4: tariffs actually hit on April second?
Speaker 3: Well, there are a whole variety of laws in the
Speaker 3: United States of America that we will follow with precision.
Speaker 1: Some tariffs will come on right away, and then some.
Speaker 3: Tariffs will go be registered and they will take three
Speaker 3: weeks or four weeks, and they will come on in
Speaker 3: due course.
Speaker 1: So there's a process for tariffs in America.
Speaker 3: But we will announce them and we will be negotiating
Speaker 3: with all these countries thereafter, and then they go into
Speaker 3: effect over a period of months, so basically April second. No,
Speaker 3: we'll announce them and then they come in.
Speaker 4: Because there's months of studies, massive report, public opinion. This
Speaker 4: can take a very long time. So legally there's no
Speaker 4: law that's short enough really to put tariffs in place
Speaker 4: on the second. So how long between April second till
Speaker 4: the tariffs actually hit do you think we'll see?
Speaker 3: As I said there, we launched our studies on January twentieth,
Speaker 3: so April second, those studies are done. Some tariffs can
Speaker 3: come straight away, some can come weeks later, some can
Speaker 3: some can take over a month or two to come online.
Speaker 1: But it will be very, very.
Speaker 3: Thoughtful, very organized, and we begin on April second. We've
Speaker 3: announced it from January twentieth that April second was the day.
Speaker 3: We're sticking with our day. We're sticking with reciprocity. It
Speaker 3: is time for America to be treated fairly. And that's
Speaker 3: what the President Trump is going to do. He's going
Speaker 3: to make sure we are treated fairly. He's talked about
Speaker 3: it last night. He's made this clear. So Mexico and
Speaker 3: Canada is about fentanyl today for the month of March,
Speaker 3: but on April second, it's about fairness. And yes, that
Speaker 3: is a process that comes in that is strictly specific
Speaker 3: to the laws, but it'll.
Speaker 1: Take over a month or two months to come in.
Speaker 3: But once it's in, they will stick, which is treat
Speaker 3: us fairly, treat us properly, or don't trade with us.
Speaker 2: Miss the Secretary, I was a man of my word.
Speaker 2: I am a man of my word, and I promise
Speaker 2: we'd come back to the address last night. So let's
Speaker 2: finish there. The President of the United States talked about
Speaker 2: a big, beautiful drop in interest rates. A lot of
Speaker 2: people in this market are curious whether the president is
Speaker 2: no longer sensitive to the deadI girations of the equity market.
Speaker 2: The focus, the emphsis now is on the bondom market.
Speaker 2: Is that the shift is that the way to understand things.
Speaker 1: Well, I think that is too specific.
Speaker 3: I mean, let's face it, if we balance the budget
Speaker 3: of the United States of America, interest rates are going
Speaker 3: to come smashing down. And I don't mean ten basis points,
Speaker 3: I mean one hundred and fifty basis points. You're going
Speaker 3: to have an explosion in the housing market. You're going
Speaker 3: to have an explosion in the equity markets. Because this
Speaker 3: is not a manufactured cut in the interest rates like
Speaker 3: you saw last time with this huge money supply which
Speaker 3: created the vast inflation.
Speaker 1: This is the right way to do it.
Speaker 3: You stop printing money, you stop running deficits, You balance
Speaker 3: the budget of the United States of America. You smash
Speaker 3: interest rates down, you produce enormous amounts of energy, drive
Speaker 3: those prices down, and you will see the greatest equity
Speaker 3: market and the greatest economy in the United States of America. Now,
Speaker 3: remember this president is worried about the United States of America.
Speaker 3: Sometimes I can asked questions about am I worried about
Speaker 3: Canadam I worried about Mexican And am I worried about
Speaker 3: the EU? My president is worried about the United States
Speaker 3: heats of America. And you are going to see the
Speaker 3: greatest equity market and buyd markets under President Trump.
Speaker 1: Well, let's you.
Speaker 2: Worry about the American data right now because equities have
Speaker 2: rolled over just a little bit, you know, the market. Well,
Speaker 2: I won't make a big deal of it. We're just
Speaker 2: a bit softer at the back of this data from ADP,
Speaker 2: which is a downside surprise at seventy seven K. The
Speaker 2: estimate was one forty. So with sub one hundred, we'll
Speaker 2: see what we get on the m later on this
Speaker 2: morning and on payrolls on Friday. But as you know,
Speaker 2: mister Secretary, the data over the last few weeks hasn't
Speaker 2: been great. The survey data has been softer, and a
Speaker 2: lot of these companies in these surveys have pointed to
Speaker 2: tariff uncertainty. Do you accept that the business community needs
Speaker 2: some clarity or whether it's twenty five, fifteen, ten, whatever,
Speaker 2: the number is going to be that the volatility around
Speaker 2: the trade story, the cumulative effect of persistent uncertainty is
Speaker 2: starting to wink into this economy a little bit.
Speaker 1: No way.
Speaker 3: I mean, the President spoke about him last night. He
Speaker 3: said Biden left them a pile a poop. He left
Speaker 3: him allows the economy that he's trying to fix. You're
Speaker 3: looking at data that's Biden data. Do not try to
Speaker 3: besmirch my President Trump with Biden's nonsense.
Speaker 2: Do you hear the manufacturing number is Biden data? I
Speaker 2: just want to be very clear, that's your opinion. You're
Speaker 2: entitled to it. You think that's his dates, not your
Speaker 2: my opinion.
Speaker 1: Okay, what possible could change? Seriously, we are in early March.
Speaker 1: My president took over January twentieth.
Speaker 3: You think economic data coming out in early March is
Speaker 3: Donald Trump related data?
Speaker 1: Monthly?
Speaker 2: MISSUS Secretary? Are you okay? Are you suggesting we don't
Speaker 2: have to get into an argument about it? You suggesting
Speaker 2: so when bone yields drop in a market that's worth
Speaker 2: trillions of dollars and investor's place bets off the back
Speaker 2: of that economic data, that that data doesn't count front
Speaker 2: of think that that data somehow misleading.
Speaker 1: I think that.
Speaker 3: Data is leading you to understand. If Joe Biden was
Speaker 3: still in charge, you'd be in trouble. But you have
Speaker 3: a new president. There's a new sheriff in town, and
Speaker 3: I would bet, I would bet on the economic growth
Speaker 3: that is coming from Donald Trump.
Speaker 1: You see the investments. You see it already.
Speaker 3: There's trillions of dollars of manufacturing moving to America. It's
Speaker 3: moving to America. That means the cavalry is coming. For
Speaker 3: every trillion dollars that invests in the United States of America,
Speaker 3: that produces one percent of GDP growth, imagine that you
Speaker 3: have a president bringing GDP growth directly to his economy.
Speaker 1: That's amazing.
Speaker 2: Mister Secretary. We appreciate your time and your opinion. As always, Sir,
Speaker 2: the US Commerce Secretary, how would love maca on the
Speaker 2: economic data, financial markets, and what's going to happen with
Speaker 2: trade