WEBVTT - Peter Navarro Is Doubling Down on Tariffs 0:00:02.720 --> 0:00:07.200 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.400 --> 0:00:13.119 I always trust in the president. He's playing three dimensional chess. 0:00:13.800 --> 0:00:16.160 You can have points of view, you win some, you 0:00:16.280 --> 0:00:18.600 lose some, but I always trust his judgment. 0:00:20.520 --> 0:00:25.320 Peter Navarro, economist, White House trade advisor, and the man 0:00:25.400 --> 0:00:27.800 who went to jail for President Trump. 0:00:28.080 --> 0:00:31.360 Yes, indeed, this morning I did walk out of a 0:00:31.560 --> 0:00:32.639 federal prisident. 0:00:33.440 --> 0:00:35.680 Who would you trust to continue this agenda? 0:00:36.560 --> 0:00:40.040 You got jd Vance's the vice president and Marco Rubio. 0:00:40.159 --> 0:00:42.839 That would be the great ticket. 0:00:44.600 --> 0:00:49.920 From Bloomberg Weekend. This is the Michelle Hussein Show. I'm 0:00:49.960 --> 0:00:56.800 Michelle Hussein. It's been a dramatic start to the new 0:00:56.880 --> 0:01:01.320 year for the Trump administration. First the season of Venezuela's leader, 0:01:01.440 --> 0:01:05.560 Nicholas Maduro and saying the US will be running that 0:01:05.800 --> 0:01:10.039 country at least for now, and then renewed talk of 0:01:10.240 --> 0:01:15.360 acquiring Greenland, which is part of Denmark, a NATO ally. 0:01:15.560 --> 0:01:19.760 Given Greenland's minerals and Venezuela's oil, all of this is 0:01:19.800 --> 0:01:24.920 another demonstration of just how acutely aligned US trade policy 0:01:25.400 --> 0:01:29.319 and foreign policy now are. But there's also a really 0:01:29.360 --> 0:01:32.960 important aspect to the trade story that is bubbling at 0:01:32.959 --> 0:01:36.640 home in the US, and it's part of this conversation 0:01:36.760 --> 0:01:40.680 with Peter Navarro, the man who has probably influenced Donald 0:01:40.680 --> 0:01:44.319 Trump on tariffs more than anyone else, a man who's 0:01:44.360 --> 0:01:48.680 been at his side for years. Right now, the administration 0:01:48.800 --> 0:01:51.480 is waiting for the Supreme Court to have it say 0:01:51.720 --> 0:01:55.600 on the legal basis for last year's tariffs, and if 0:01:55.600 --> 0:02:00.680 the White House loses, the implications are considerable. So keep 0:02:00.720 --> 0:02:03.800 that in mind as you listen. Navara and I spoke 0:02:03.840 --> 0:02:08.040 in Washington before the Venezuela developments, but the way he 0:02:08.120 --> 0:02:11.880 sees the world is a crucial insight into how the 0:02:11.919 --> 0:02:18.400 Trump circle thinks and why Dr Navara welcome, Thanks for 0:02:18.440 --> 0:02:19.000 being with us. 0:02:19.120 --> 0:02:19.960 Great to be with you. 0:02:20.080 --> 0:02:22.080 I wondered if we could start with the origins of 0:02:22.120 --> 0:02:24.680 your bond with the President. When did you meet him 0:02:24.720 --> 0:02:25.480 for the first time. 0:02:26.040 --> 0:02:31.320 It goes back to two thousand and six, when I 0:02:31.480 --> 0:02:36.240 wrote the first book in what would be my China trilogy. 0:02:36.360 --> 0:02:40.160 This is a book called The Coming China Wars, and 0:02:40.800 --> 0:02:46.240 at the time it was widely viewed as hyperbole. Right 0:02:46.280 --> 0:02:50.840 now it reads like a government report basically based on 0:02:50.919 --> 0:02:56.680 my research. I had parsed the Chinese economic model, the 0:02:56.960 --> 0:03:01.959 prevailing view in the early two thousand thousands, as China 0:03:02.000 --> 0:03:04.880 had joined the World Trade Organization it was beginning to 0:03:04.919 --> 0:03:09.000 inundate the world with their dump manufactured products. 0:03:09.120 --> 0:03:11.119 Was that it was simply cheap labor. 0:03:11.680 --> 0:03:15.640 And but my analysis showed that was a lot more 0:03:15.680 --> 0:03:18.600 than that. Things I would eventually call the seven Deadly 0:03:18.800 --> 0:03:22.119 Mercantile of sins, which is to say that China said 0:03:22.200 --> 0:03:28.120 about taking the world apart using things like high government subsidies, 0:03:28.880 --> 0:03:36.280 intellectual property, theft, unfasting, piracy, the whole state owned enterprise, 0:03:36.320 --> 0:03:39.520 the whole gamut. So I had spent several years doing 0:03:39.600 --> 0:03:45.160 research on that, published becoming China Wars. And then in 0:03:45.160 --> 0:03:51.000 twenty eleven President Trump was doing an interview and they 0:03:51.040 --> 0:03:56.040 asked him what his favorite books on China were, and 0:03:56.200 --> 0:04:00.480 mine was on the top ten list. So I sent 0:04:00.600 --> 0:04:05.680 him a note of thanks and we changed correspondences. There'll 0:04:05.680 --> 0:04:08.880 be type letters, but he'll always put a handwritten note 0:04:08.920 --> 0:04:14.040 in it. And that how that began. And when he 0:04:14.360 --> 0:04:18.760 went down the escalator with Milania and declared, I sent 0:04:18.880 --> 0:04:22.320 him a note, say, hey, you need anything, and they 0:04:22.360 --> 0:04:25.880 called me. In twenty sixteen, I was supposed to go 0:04:25.920 --> 0:04:28.280 out to New York just for a couple of days 0:04:28.880 --> 0:04:31.280 and I meet him there. 0:04:31.600 --> 0:04:32.920 It was pretty funny. 0:04:33.400 --> 0:04:37.520 I get into this black suv in the back seat, right, 0:04:38.360 --> 0:04:41.280 and we're getting ready to go to the airport and 0:04:41.520 --> 0:04:46.400 get in his plane to go to a rally, famous rallies. 0:04:47.040 --> 0:04:50.279 And he gets in the front seat and he's going, Hey, Rupert, 0:04:50.400 --> 0:04:53.800 what's going on. It's like he's stalking to Murdoch. And 0:04:53.839 --> 0:04:56.240 then he hangs up and he looks at back and 0:04:56.680 --> 0:05:00.480 he goes, who's that because you never seen me before? 0:05:00.800 --> 0:05:04.040 And I introduced myself and that's kind of how it happened. 0:05:04.080 --> 0:05:07.200 So you bonded. You bonded over China, essentially your views 0:05:07.200 --> 0:05:10.880 on China, and then China became a big rallying point 0:05:10.880 --> 0:05:13.400 for him in his first in his first run for 0:05:13.440 --> 0:05:15.680 the White House. I want to understand something about how 0:05:15.680 --> 0:05:18.920 your views evolved because you used to be a Democrat, right, 0:05:18.960 --> 0:05:22.440 You used to talk about how bad protectionism would be 0:05:22.680 --> 0:05:24.719 not only for the US but the global economy. 0:05:25.040 --> 0:05:29.760 Well, you're conflating a few things there, because historically Democrats 0:05:29.800 --> 0:05:34.360 were the ones who were protectionists, who were in favor 0:05:34.760 --> 0:05:41.239 of basically defending the American working class against unfair trade. 0:05:42.080 --> 0:05:46.800 And we had in our history of this republic, a 0:05:46.920 --> 0:05:51.120 very long history of defending our manufacturing base. If you 0:05:51.200 --> 0:05:56.640 go back to Alexander Hamilton, first Treasury secretary, he wrote 0:05:57.120 --> 0:06:00.960 a very stunning book about manufactur and the need to 0:06:01.000 --> 0:06:05.320 protect it. Lincoln was a tariff man. McKinley was a 0:06:05.360 --> 0:06:09.120 tariff man. Henry Clay was a tariff man. I mean, 0:06:09.200 --> 0:06:13.320 all of these famous figures, and up until nineteen thirteen, 0:06:13.600 --> 0:06:18.440 the United States actually funded its government entirely through tariff revenues, 0:06:18.760 --> 0:06:21.200 if you knew that. And then we had passed the 0:06:21.240 --> 0:06:24.640 income tax and kind of shifted away from that. And 0:06:24.720 --> 0:06:27.599 one of the running jokes the bosson I have is like, 0:06:27.760 --> 0:06:31.360 who figured the China thing out first? And of course 0:06:31.400 --> 0:06:35.279 he did, because if you go back, there's a famous 0:06:35.320 --> 0:06:38.920 interview with him in Oprah Winfrey back in the eighties, 0:06:39.560 --> 0:06:41.480 and he wasn't talking about China, but he was talking 0:06:41.480 --> 0:06:44.279 about Japan and how they were taking us apart with 0:06:44.400 --> 0:06:48.520 unfair trade, and everything he said back then would then 0:06:48.680 --> 0:06:52.359 fit the China model. Now, with respect to my evolution 0:06:52.480 --> 0:06:57.279 of thought, my first exposure to kind of the Chinese 0:06:57.360 --> 0:07:00.000 economic model was when I was in a peace corps 0:07:00.480 --> 0:07:05.400 in Thailand, and what was fascinating to me is that 0:07:05.839 --> 0:07:10.520 virtually everywhere you went in Asia, the commerce was run 0:07:10.560 --> 0:07:12.360 by Chinese. 0:07:12.600 --> 0:07:16.280 Even then it's before time, before Gint's joined the Double Well, this. 0:07:16.320 --> 0:07:21.320 Was the Chinese diaspora who had left because of miles, 0:07:21.320 --> 0:07:26.640 starvation and famine policies. So you fast forward to I'm 0:07:26.680 --> 0:07:30.240 teaching at the University of California Ravion business students who 0:07:30.240 --> 0:07:32.440 are fully employed. Right they come at night and on 0:07:32.480 --> 0:07:34.880 the weekends, and I'm noticing they're losing their jobs. 0:07:35.480 --> 0:07:37.000 I'm thinking, what's going on here? 0:07:37.040 --> 0:07:41.720 And this was circa two thousand and three, and curiously 0:07:41.760 --> 0:07:44.800 two years after China joined the World Trade Organization. So 0:07:45.080 --> 0:07:47.320 I looked into this and it's like all roads led 0:07:47.360 --> 0:07:51.840 to Beijing. I do the research project and I realized, hey, 0:07:51.920 --> 0:07:58.200 this this is cheating. It's devastating our manufacturing base, and 0:07:58.880 --> 0:08:01.360 I would continue that research. 0:08:01.720 --> 0:08:03.800 So bring us up to the present day. Then, because 0:08:03.800 --> 0:08:06.280 you were at President Trumps side in the first term, 0:08:06.680 --> 0:08:08.200 you went to jail for him. 0:08:08.600 --> 0:08:11.600 So to be clear, I went to prison in defense 0:08:11.680 --> 0:08:16.880 of the constitution, the constitutional separation of powers. Basically, what 0:08:17.280 --> 0:08:21.840 Congress did in the wake of the January sixth riots 0:08:21.840 --> 0:08:27.600 on Capitol Hill was engaging a partisan effort to unseat 0:08:27.680 --> 0:08:30.320 the president and make sure he never ran for office again. 0:08:30.600 --> 0:08:32.880 I wonder how much it changed you, because I'm struck 0:08:32.920 --> 0:08:35.760 reading your account of your prison days. How much you 0:08:35.880 --> 0:08:40.559 notice and document all the small pettiness, really, the meanness 0:08:41.080 --> 0:08:43.880 that you see around you, the withholding of medicines, the 0:08:44.840 --> 0:08:47.920 lack of fresh fruit and vegetables. Did you see a 0:08:48.080 --> 0:08:51.720 different America which has informed your politics? 0:08:51.880 --> 0:08:52.320 Now? 0:08:52.600 --> 0:08:55.360 I grew up poor, I grew up in that miliu. 0:08:55.840 --> 0:08:58.880 It just in prison didn't change me at all. I 0:08:58.960 --> 0:09:02.439 changed prison. I changed that place. I changed the system. 0:09:02.800 --> 0:09:08.359 I went in there to defend the Constitution on principle, 0:09:08.960 --> 0:09:14.000 and instead of crying in my beer, I turned myself 0:09:14.000 --> 0:09:18.120 into an investigative reporter and covered a five billion dollar scandal. 0:09:18.720 --> 0:09:22.240 And since I've been out, I've solved that scandal and 0:09:21.920 --> 0:09:23.520 that's a pretty good achievement. 0:09:23.600 --> 0:09:26.240 So presently changed me? I changed it. 0:09:26.520 --> 0:09:30.840 And now you've been his trade counselor and advisor through 0:09:30.880 --> 0:09:33.840 this period. How's the relationship between the US and China 0:09:33.880 --> 0:09:34.680 on trade going? 0:09:34.760 --> 0:09:34.960 Now? 0:09:35.040 --> 0:09:36.199 Help us understand it. 0:09:36.640 --> 0:09:41.200 Look, it's a work in progress, the relationship with China. 0:09:41.320 --> 0:09:44.480 I am a veteran of the first term. I spent 0:09:45.360 --> 0:09:48.800 months and months and months with then the United States 0:09:48.880 --> 0:09:54.040 Trade Representative Robert Leitthheiser, one of the great American patriots 0:09:54.080 --> 0:10:00.240 and thinkers in this country, and we negotiated with the 0:10:00.360 --> 0:10:05.040 Chinese a very very comprehensive trade deal. It was an 0:10:05.120 --> 0:10:08.520 amazing thing that would have been really good for China 0:10:08.600 --> 0:10:11.880 as well as the United States because it would have 0:10:11.920 --> 0:10:18.480 completely reform Chinese model, and they agreed to it, and 0:10:18.520 --> 0:10:23.880 then at the last minute, Chi Jinping said no, okay. 0:10:24.000 --> 0:10:26.600 So that was that's like really important to understand. 0:10:27.000 --> 0:10:30.560 We went for a long over a year negotiating what 0:10:30.600 --> 0:10:33.040 would have been a perfect deal, and then at the 0:10:33.120 --> 0:10:35.280 end they backed out of that. And then we signed 0:10:35.280 --> 0:10:39.080 what was called the Skinny Deal, and that was in 0:10:39.240 --> 0:10:42.520 January of twenty twenty, the last year the Trump administration, 0:10:42.960 --> 0:10:43.360 and they. 0:10:43.280 --> 0:10:45.640 Didn't abide by that. 0:10:45.960 --> 0:10:49.920 So the problem that we always faced with China is 0:10:49.960 --> 0:10:54.439 that you always kind of wonder whether they're just stretching 0:10:54.520 --> 0:10:57.760 you out, whether even if you sign a deal, they're 0:10:57.800 --> 0:10:58.680 going to retrade it. 0:10:59.040 --> 0:11:02.200 And the US administration, which is why I want to 0:11:02.240 --> 0:11:07.560 understand what the actions currently are. For example, President Trump 0:11:07.720 --> 0:11:11.360 meets Siegen Ping and Essentially, you end up with a 0:11:11.440 --> 0:11:15.960 deal which lowers some tariffs and which suspends heightened tariffs. 0:11:15.960 --> 0:11:19.920 So there's effectively a year long trade truce. Is that 0:11:20.080 --> 0:11:23.120 keeping with your mission to avoid death by China? 0:11:23.679 --> 0:11:27.480 So you're burying the lead here. What's the current tariff 0:11:27.559 --> 0:11:28.040 rate now? 0:11:28.440 --> 0:11:32.360 Well, the ones I'm referring to are the lowering. 0:11:31.920 --> 0:11:34.360 Of some of the Well, what's the current rate after 0:11:34.400 --> 0:11:35.160 they've been lowered. 0:11:35.400 --> 0:11:37.000 Well, it's ten percent on some things. 0:11:37.080 --> 0:11:42.800 Right now, totally, total tariff on China is almost fifty percent. Okay, 0:11:42.880 --> 0:11:45.560 let me say it one more time. It's almost fifty percent. 0:11:45.640 --> 0:11:48.880 So when you say that we lowered the rates, we 0:11:48.920 --> 0:11:54.280 only lowered them down to fortyk. 0:11:54.040 --> 0:11:59.520 Imposed to fentanyl flows, and there was a suspension ciprocal tariffs. 0:11:59.120 --> 0:12:02.480 You have to understand there was a baseline tariff because 0:12:02.520 --> 0:12:06.240 of the Section three oh one actions in the first term. 0:12:06.480 --> 0:12:09.960 One of the few things Joe Biden kept that we 0:12:10.040 --> 0:12:13.400 added the reciprocal tariff to which is still in place, 0:12:13.880 --> 0:12:16.800 and a twenty percent fentanyl tariff, which we only lowered 0:12:16.800 --> 0:12:21.320 by ten percent. So those are robust tariffs on China, 0:12:21.360 --> 0:12:26.480 and in fact, we are strongly encouraging Europe to adopt 0:12:26.559 --> 0:12:30.520 exactly the same level of tariffs that we adopt for 0:12:30.600 --> 0:12:36.360 the simple reason that when the President puts up tariffs 0:12:36.400 --> 0:12:41.200 to defend America from Chinese cheating, China can't sell as 0:12:41.280 --> 0:12:45.000 much here where does it sell it? Dumps it in Europe, 0:12:45.200 --> 0:12:48.360 dumps it in Mexico. Now as we are talking, just 0:12:48.600 --> 0:12:53.160 in the recent news, Mexico did exactly what I'm suggesting, 0:12:53.240 --> 0:12:56.000 did so at the urging of our trade team, which 0:12:56.040 --> 0:13:00.440 is to say, the Senate in Mexico passed fifty cars 0:13:00.880 --> 0:13:04.240 on China. And they did it because China was dumping 0:13:04.480 --> 0:13:08.920 goods which would otherwise go in America. And Europe should. 0:13:08.600 --> 0:13:12.200 Follow the US and Mexican lead, and there are doing that. 0:13:12.240 --> 0:13:15.440 They're doing that and steel, and I seeing that in 0:13:15.480 --> 0:13:18.600 other countries. But I'm sure that you can see why. 0:13:19.120 --> 0:13:23.560 Looking at the US China relationship, one can see the 0:13:23.600 --> 0:13:26.800 contrast between when President Trump first arrived and we end 0:13:26.880 --> 0:13:29.800 up with a meeting after which he talks about having 0:13:30.000 --> 0:13:33.040 enormous respect between the two countries and how honored he 0:13:33.200 --> 0:13:37.640 is that presidency has has authorized the purchase of soybeans 0:13:37.880 --> 0:13:40.800 and other goods. So there is a softening. 0:13:40.559 --> 0:13:46.400 No, there's no softening, understand trump diplomacy works. And the 0:13:46.440 --> 0:13:50.600 great thing that people, particularly on the left oone understand 0:13:51.320 --> 0:13:55.840 is that it's functional for President Trump to have open 0:13:55.920 --> 0:14:01.640 lines with Shijin Ping, Vladimir Putin, to wand in Turkey, 0:14:02.559 --> 0:14:08.040 all of the people that the world regards as vicious dictators, 0:14:08.280 --> 0:14:11.400 which they are, but they are part of the world 0:14:11.440 --> 0:14:15.079 stage where you have to negotiate. 0:14:15.280 --> 0:14:20.200 So we have them saying enormous respect for China. That's 0:14:20.200 --> 0:14:22.720 what he's talking about. Do you have enormous respect? 0:14:23.000 --> 0:14:25.520 I have enormous respect for the Chinese people. 0:14:25.960 --> 0:14:29.280 Okay, the Chinese people are under the boot of Chinese 0:14:29.280 --> 0:14:33.720 Communist Party. If China is going to escape its own 0:14:34.280 --> 0:14:39.880 mercantilist economic model, which is screwing the world, including Europe, 0:14:40.320 --> 0:14:44.560 and causing tremendous instability in the financial system and great 0:14:44.920 --> 0:14:48.640 anger towards China, it needs to do one simple thing. 0:14:49.040 --> 0:14:53.360 It needs to lower the savings rate in China by 0:14:53.440 --> 0:14:56.360 providing a social safety net for his people. 0:14:56.440 --> 0:14:58.200 It's extraordinary that. 0:14:58.240 --> 0:15:05.480 A communist social list country has no protections with respect 0:15:05.480 --> 0:15:08.600 to pensions or healthcare for its people. 0:15:09.160 --> 0:15:10.840 That's extraordinary. 0:15:11.360 --> 0:15:15.200 And instead, what the Chinese do, because that's the way 0:15:15.240 --> 0:15:20.280 they roll, is they let the Communist Party members become rich, 0:15:20.840 --> 0:15:26.880 they let a smaller slice of the entrepreneurial class become rich, 0:15:27.440 --> 0:15:30.160 and then everybody else is allowed by Jings. 0:15:30.360 --> 0:15:32.320 I know how strongly you feel about this. You've written 0:15:32.360 --> 0:15:35.680 about it in successive books. I wonder if there are 0:15:35.680 --> 0:15:39.560 other people who would prioritize doing business with China who 0:15:39.640 --> 0:15:44.160 have influence over the president in a way that makes 0:15:44.200 --> 0:15:48.120 you less than comfortable. Jensen Nibs managed to get Nvidia 0:15:48.360 --> 0:15:51.920 H two hundred chips being sold to China. Are you 0:15:52.000 --> 0:15:53.720 comfortable with that. 0:15:53.320 --> 0:15:56.920 That's a work in progress, that's an ongoing dialogue. I 0:15:56.960 --> 0:16:01.720 think people have to understand that there's a constant negotiation 0:16:02.080 --> 0:16:05.440 going on with countries around the world. I mean, and 0:16:05.760 --> 0:16:09.960 the China relationship is a very difficult one. I think 0:16:10.000 --> 0:16:14.640 you left out the part about how China has weaponized 0:16:15.440 --> 0:16:19.440 rare earth critical minerals, which you're a critical part of 0:16:19.600 --> 0:16:24.320 virtually every high technology product that's made around the world. 0:16:24.960 --> 0:16:30.320 And China has been flexing its muscles now in Europe 0:16:30.400 --> 0:16:34.240 and India and the United States saying basically, we're going 0:16:34.320 --> 0:16:37.080 to do what we want and if you try to 0:16:37.120 --> 0:16:41.440 stop us, we're going to take away your critical minerals 0:16:41.920 --> 0:16:45.000 because they have they think they have a monopoly on it. 0:16:45.040 --> 0:16:47.280 But that's just a matter of time. 0:16:47.360 --> 0:16:52.480 American innovation is going to quickly wipe away that weaponization. 0:16:52.960 --> 0:16:54.560 So what do you do in the meantime? 0:16:55.240 --> 0:16:59.120 You do diplomacy And if people want to call that soft, 0:16:59.640 --> 0:17:01.440 then they don't understand the chessboard. 0:17:01.560 --> 0:17:03.960 So are you comfortable with China being able to buy 0:17:04.000 --> 0:17:08.919 in the videos the specific game? But the next generation AI. 0:17:08.920 --> 0:17:10.439 Ships not my wane? Okay? 0:17:10.480 --> 0:17:13.679 I accept it enables a lot of competition then with 0:17:14.359 --> 0:17:15.439 USAI companies. 0:17:15.520 --> 0:17:19.200 Let me let your viewers know this. I'm one of only. 0:17:19.080 --> 0:17:24.800 Three people who served as a senior advisor in the 0:17:24.840 --> 0:17:28.480 first Trump administration from the beginning to the end. That 0:17:28.760 --> 0:17:32.159 happened because I stay in my lane and ships are 0:17:32.200 --> 0:17:32.720 not my waye. 0:17:49.520 --> 0:17:52.640 I know from one of your books, taking Back Trump's America, 0:17:52.720 --> 0:17:55.960 that you know exactly what it's like to be part 0:17:56.000 --> 0:17:59.160 of an administration where different people have influence, and how 0:17:59.200 --> 0:18:02.760 you worry about losing sight of a core agenda. You 0:18:02.840 --> 0:18:06.639 write essentially that people need to remember about delivering for 0:18:06.720 --> 0:18:12.119 working class Americans. So are there risks to the American 0:18:12.440 --> 0:18:15.720 people not understanding the agenda that you're trying to deliver 0:18:15.800 --> 0:18:18.719 now that we're in the run up to the midterms. 0:18:18.400 --> 0:18:22.080 Of course, and part of my job is to explain 0:18:22.400 --> 0:18:28.320 exactly what we've inherited, which is a mess, how we're 0:18:28.480 --> 0:18:32.919 addressing it, and how long it's going to take to 0:18:33.000 --> 0:18:36.359 see the fruits of the Trump policies. 0:18:36.400 --> 0:18:38.280 The model here, how long do you think it's going 0:18:38.320 --> 0:18:38.919 to do well? 0:18:39.160 --> 0:18:44.159 The model here is the transition from Jimmy Carter in 0:18:44.200 --> 0:18:50.160 the seventies era of stagflation to the presidency of Ronald Reagan. Carter, 0:18:51.040 --> 0:18:58.840 much like Biden Harris, created a tremendous problem with both 0:18:58.880 --> 0:19:01.720 inflation and recession because of their policies. If you think 0:19:01.720 --> 0:19:05.879 about what Biden set us up for, it was a 0:19:05.920 --> 0:19:09.800 stagflationary scenario. So Carter did the same for Reagan. So 0:19:09.880 --> 0:19:14.480 Reagan comes in, does their deregulation, positive supply shock, does 0:19:14.520 --> 0:19:19.359 the tax cuts, positive supply shock, makes adjustments, stops doing 0:19:19.400 --> 0:19:23.760 stupid stuff like Carter did. But it takes time, and 0:19:23.880 --> 0:19:27.600 for Reagan the time ran out because by the time 0:19:27.760 --> 0:19:31.640 the midterms rolled around two years after he assumed office, 0:19:32.240 --> 0:19:36.879 it was a bloodbath and the Democrats won the House 0:19:37.400 --> 0:19:41.800 and basically paralyzed government. But the next six years were 0:19:41.800 --> 0:19:45.800 a beautiful thing because Reagan's policies took hold and we 0:19:45.920 --> 0:19:46.439 had one of the. 0:19:46.440 --> 0:19:47.520 Most prosperous times. 0:19:47.560 --> 0:19:51.080 Now we understand that history, and we're trying to make 0:19:51.119 --> 0:19:54.480 sure we don't get caught in that same vice. So 0:19:54.600 --> 0:19:57.639 what we have to do is explain very clearly to 0:19:57.640 --> 0:19:58.399 American people. 0:19:58.600 --> 0:19:59.880 Let me give you a two exam. 0:20:00.119 --> 0:20:01.840 Wait, I do want to ask you this this point 0:20:01.840 --> 0:20:04.240 about the timeframe, so work in progress. You need to 0:20:04.280 --> 0:20:08.440 convince Americans and work hard on that. Twenty twenty eight 0:20:08.480 --> 0:20:11.800 in that election, who would you trust to continue this agenda. 0:20:13.200 --> 0:20:15.440 It's not for me to say, and that's not that's 0:20:15.520 --> 0:20:17.520 not my job. You got JD. 0:20:17.680 --> 0:20:20.800 Vance's the vice president and Marco Rubio. That would be, 0:20:21.119 --> 0:20:22.760 for example, a great ticket. 0:20:22.640 --> 0:20:24.040 With who at the top of the ticket. 0:20:24.680 --> 0:20:28.240 JD would be there, But Marco's already said that if JD. 0:20:28.119 --> 0:20:31.679 Runs, he would wouldn't challenge you. I love these guys, 0:20:31.880 --> 0:20:32.399 these are. 0:20:34.040 --> 0:20:37.720 I always admired Marco back in twenty sixteen. I always 0:20:37.720 --> 0:20:40.400 thought he was like of the people on that stage, 0:20:40.400 --> 0:20:43.680 the sixteen Republicans. I always thought he was the sharpest 0:20:43.680 --> 0:20:46.919 tool in the shed besides Donald Trump. Right, he couldn't 0:20:46.920 --> 0:20:50.840 hold a candle to Trump with respect to everything. But 0:20:51.280 --> 0:20:55.679 he's he's he's really a very capable person. But I 0:20:55.720 --> 0:20:59.119 think you're on some here with the messaging because people 0:20:59.680 --> 0:21:02.480 on your side of the Atlantic are You're going to 0:21:02.560 --> 0:21:06.080 be watching that election for Congress very carefully because what 0:21:06.280 --> 0:21:10.040 happened in twenty eighteen because we lost the House. I 0:21:10.080 --> 0:21:12.280 write about that in my book. There were some mistakes 0:21:12.280 --> 0:21:15.600 made that I hope we don't make again. It became, 0:21:18.200 --> 0:21:20.320 let's say, a crap show. That's a little easier way 0:21:20.320 --> 0:21:24.800 of saying it, because the Democrats just started issuing subpoenas 0:21:24.840 --> 0:21:26.479 and impeachments and all that. 0:21:26.520 --> 0:21:29.440 But we don't want to repeat that. But here's what 0:21:29.560 --> 0:21:30.240 we're up against. 0:21:30.480 --> 0:21:34.640 It's like, we come in and we got egg prices 0:21:34.800 --> 0:21:38.639 off the charts, and we got beef prices off the charts. 0:21:38.760 --> 0:21:40.639 Okay, it's like that's terrible. 0:21:40.680 --> 0:21:44.119 It's like it's as American as you can't scramble eggs 0:21:44.119 --> 0:21:47.919 and hamburgers, right, So with eggs, we've been able to 0:21:48.080 --> 0:21:52.360 dramatically reduce the price of eggs almost immediately. How did 0:21:52.400 --> 0:21:56.240 we get there? This is really interesting how politics works here. 0:21:56.680 --> 0:22:01.280 It's like the Democrats come in and the chickens. They 0:22:01.359 --> 0:22:05.800 kill eighty million chickens. Literally, Joe Biden slaughters eighty million 0:22:05.880 --> 0:22:09.000 chickens because he overreacts to an avian flu thing. At 0:22:09.040 --> 0:22:14.600 the same time, with beef, he reduces grazing land because 0:22:14.680 --> 0:22:16.960 they're like, they want to eat soy birders. 0:22:17.720 --> 0:22:20.560 And questions about your policy, aren't they? You mentioned beef, 0:22:20.600 --> 0:22:23.520 And I'm conscious of the fact that President Trump reduced 0:22:24.080 --> 0:22:28.719 tariffs on beef, tomatoes, coffee, and bananas exactly because of 0:22:28.760 --> 0:22:32.919 the pressures on the household budgets of ordinary Americans. So 0:22:33.240 --> 0:22:35.840 that's an acknowledgment, isn't it that some of the actions 0:22:35.840 --> 0:22:39.359 the administration has taken, including on tariffs of which you 0:22:39.440 --> 0:22:43.000 are the architect, they have played a role in hurting 0:22:43.320 --> 0:22:44.360 ordinary Americans. 0:22:44.440 --> 0:22:49.800 I'm totally supportive of no tariffs on products we don't 0:22:49.840 --> 0:22:53.960 make here. We don't make coffee here, so it made 0:22:54.040 --> 0:22:58.760 no sense. It happened, and now we make adjustments. That's 0:22:58.760 --> 0:23:01.920 what we do. We may adjustments, but if you look 0:23:01.960 --> 0:23:06.040 at the economics of that or elasticities of supplying the man, 0:23:06.160 --> 0:23:09.160 it's like, we don't make coffee, right, so we don't 0:23:09.200 --> 0:23:12.919 make chocolate, so we lower the price on that. In 0:23:13.000 --> 0:23:16.320 the short run, we can we can import a little 0:23:16.480 --> 0:23:20.959 little beef. But we just had oil drop below sixty 0:23:21.000 --> 0:23:24.439 dollars a barrel, which is where it was when we 0:23:24.560 --> 0:23:29.280 left office the first term for Trump. Okay, Biden jacked 0:23:29.280 --> 0:23:34.359 that price up is about seventy five dollars. And so 0:23:34.480 --> 0:23:37.919 what that does is not only increases the cost of 0:23:37.960 --> 0:23:41.520 heating your home and driving your car. It increases the 0:23:41.560 --> 0:23:46.159 cost of fertilizer for crops, so food prices go up. 0:23:46.200 --> 0:23:49.359 It increases the cost of transportation for more. 0:23:49.520 --> 0:23:53.159 Manufacturing jobs have declined for seven straight months. 0:23:53.240 --> 0:23:57.400 Let's shift to that. Let's think about that. Okay, that's 0:23:57.520 --> 0:24:00.359 my job. I'm the senior counselor for trade man. Actually, 0:24:00.840 --> 0:24:04.000 how long do you think it's me? I can tell you. 0:24:04.280 --> 0:24:07.800 I can tell you that with exactitude. Okay, here's how 0:24:07.840 --> 0:24:08.399 it works. 0:24:08.600 --> 0:24:10.159 No, how long is it going to take for you 0:24:10.200 --> 0:24:10.639 to be well? 0:24:10.680 --> 0:24:12.879 Let me let me just work you through the quick math. 0:24:13.119 --> 0:24:17.720 For you to have a new factory in this country 0:24:18.560 --> 0:24:22.320 ready to produce things and therefore have new manufacturing jobs, 0:24:22.760 --> 0:24:25.760 that's about two to three years. 0:24:26.440 --> 0:24:26.760 Now. 0:24:27.000 --> 0:24:29.600 What you see in the interim is this, We're having 0:24:29.760 --> 0:24:34.840 literally trillions of dollars of investment come in from abroad 0:24:35.000 --> 0:24:40.240 as well as domestically, which is, as we speak, beginning 0:24:40.760 --> 0:24:44.280 to design those factories and get ready to build them. 0:24:44.320 --> 0:24:48.199 Now what happens then you have a boom in construction jobs. 0:24:48.280 --> 0:24:51.000 That's the first phase of that. But you won't see 0:24:51.000 --> 0:24:54.439 any improvement in manufacturing right then. But then once you 0:24:54.640 --> 0:24:58.920 build the factories, that's when you see the manufacturing jobs. 0:24:59.119 --> 0:25:02.479 So home wasn't built in the day China took us 0:25:02.640 --> 0:25:06.600 to It's going on twenty five years now. Where they've 0:25:06.640 --> 0:25:10.359 taken us apart. It's not just the factories they took. 0:25:10.400 --> 0:25:13.960 They took our supply chains. And we can't like wave 0:25:14.000 --> 0:25:15.840 a magic wine, doesn't work like that. 0:25:16.480 --> 0:25:18.080 But if you simply. 0:25:17.720 --> 0:25:21.200