WEBVTT - Bloomberg Surveillance: Adewale Adeyemo on Inflation

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<v Speaker 1>The Biden administration appearing to declare victory on inflation.

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<v Speaker 2>We have seen some turnaround in sentiment in recent months.

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<v Speaker 2>The University of Michigan Consumer Sentiment Index has moved up

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<v Speaker 2>quite a lot. Inflation is now near term at close

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<v Speaker 2>to the lowest levels we've seen in that survey. So

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<v Speaker 2>I think Americans do believe inflations under control.

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<v Speaker 1>Secretary Yeah of making the case for a self landing

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<v Speaker 1>as fourth quarter GDP tops estimates and inflation continues to call,

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<v Speaker 1>I'm pleased to say joining us this program exclusively the

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<v Speaker 1>US Deputy Treasury Secretary Wally at Amo, Deputy Treasury Secretary

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<v Speaker 1>Wander for to catch up with you against sir and

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<v Speaker 1>to have a longer conversation about the US economy. Was

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<v Speaker 1>that a declaration of victory on inflation yesterday?

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<v Speaker 3>So I was listening to the show before I came on,

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<v Speaker 3>and you talked about all the people who have changed

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<v Speaker 3>their mind. So the truth is, Secretary Yellen, it's been consistent.

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<v Speaker 3>If you go back a year ago, she made very

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<v Speaker 3>clear that we could grow the economy, bring down inflation,

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<v Speaker 3>and keep a tight labor market. And that's exactly what

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<v Speaker 3>we're doing. What she was saying yesterday was that we

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<v Speaker 3>have seen progress made in terms of making sure that

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<v Speaker 3>the middle class has more money to spend at the

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<v Speaker 3>end of the month. Because gas prices are down a

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<v Speaker 3>dollar ninety. We know that there's more that we need

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<v Speaker 3>to do in terms of trying to make sure that

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<v Speaker 3>we put more pocket in the more money in the

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<v Speaker 3>pockets of the middle class in America. And that's exactly

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<v Speaker 3>what the President of the Secretary committed to doing. We're

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<v Speaker 3>not declaring victory. Rather, we're saying we've made progress and

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<v Speaker 3>we're going to continue to make that progress going forward.

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<v Speaker 4>Deputy Secretary, why do you think there is such a

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<v Speaker 4>huge gap between the sentiment and the economic indicators that

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<v Speaker 4>seem to be making a really positive case for the economy.

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<v Speaker 3>I think the most important thing we have to continue

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<v Speaker 3>to remember, and I just came back from a trip

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<v Speaker 3>literally around the world, is that people are still impacted

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<v Speaker 3>by the pandemic and the ways that it impacted their lives.

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<v Speaker 3>But the thing we have going for us in the

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<v Speaker 3>United States is that because of the work that our

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<v Speaker 3>businesses have done, the American people have done, we're better

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<v Speaker 3>positioned as an economy to deal with that. You think

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<v Speaker 3>about the investments we made in things like the Advanced

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<v Speaker 3>Child Tax Credit, which gave the American families tax relief

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<v Speaker 3>in the midst of the pandemic, and the relief that

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<v Speaker 3>we gave to small businesses. And today we've seen sixteen

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<v Speaker 3>million applications for new small businesses in America. We're seeing progress.

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<v Speaker 3>But what I know that has happened to the American people,

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<v Speaker 3>but people around the world, is that the pandemic had

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<v Speaker 3>an impact that has in lots of ways still continuing.

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<v Speaker 3>But our economy is better positioned today than any economy

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<v Speaker 3>of a major of major country around the world because

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<v Speaker 3>of the decisions and choices the President and the Secretary

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<v Speaker 3>have made and our goals to make sure that we

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<v Speaker 3>continue from that position of strength to invest in the

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<v Speaker 3>American economy.

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<v Speaker 4>Debut. Secretary, you're talking about getting more dollars in people's pockets,

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<v Speaker 4>and we heard Janet Yellen, a Treasure Secretary, yesterday, talking

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<v Speaker 4>about the potential for prolonging some of the tax cuts

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<v Speaker 4>for people making less than four hundred thousand dollars a year.

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<v Speaker 4>How concerned are you the getting additional dollars in people's

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<v Speaker 4>pockets will just fuel another round of inflation, which really

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<v Speaker 4>gave people a lot of the negativity to start with.

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<v Speaker 3>I think the most important thing that we should look

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<v Speaker 3>at is one of the biggest drivers of the inflationary

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<v Speaker 3>I pressions we saw in our economy was on the

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<v Speaker 3>supply side. Supply chains were snarled, and you've see in

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<v Speaker 3>a huge decrease in supply chain challenges in the economy.

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<v Speaker 3>Energy is a great place to start. Just look at

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<v Speaker 3>what we've seen in terms of the dollar nine dy

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<v Speaker 3>reduction in the cost of gas, but throughout our supply chains,

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<v Speaker 3>we've seen them improved to put us in a better

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<v Speaker 3>position to meet the demand in the economy. And it's

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<v Speaker 3>important to remember what the Secretary said for the middle class,

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<v Speaker 3>we're not going to increase their taxes. We're going to

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<v Speaker 3>look for ways to provide relief to families, but we're

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<v Speaker 3>also going to look to modestly increase taxes on the wealthy,

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<v Speaker 3>on large corporations, because the Secretary and the President believe

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<v Speaker 3>that over the medium term, we need to make sure

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<v Speaker 3>that we have a fiscally sustainable outlook, which is very

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<v Speaker 3>different than the last administration.

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<v Speaker 5>Well, you just got back from Japan, and I understand

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<v Speaker 5>that Syphius is still under review for Japan's takeover of

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<v Speaker 5>US Steel. We have the Prime Minister of Japan joining

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<v Speaker 5>US for a state dinner upcoming in April. Will we

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<v Speaker 5>get a decision on this soon?

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<v Speaker 3>So, as you know, we don't talk about any syfious

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<v Speaker 3>cases if they exist or if they don't publicly, it's

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<v Speaker 3>a private it's a private matter. If there's a CFIUS case.

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<v Speaker 3>What I can say is that CIFIUS is a process

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<v Speaker 3>of been set up to look at national security risk

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<v Speaker 3>and make sure that we in the United States, as

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<v Speaker 3>we support foreign direct investment in the United States, we're

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<v Speaker 3>also very mindful of the national security risk that some

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<v Speaker 3>foreign direct investment presents. Stepping away from a specific case,

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<v Speaker 3>one of the things that we believe deeply in is

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<v Speaker 3>the importance of a yawn of strong US steel industry.

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<v Speaker 3>That's why we've made investments like the Inflation Reduction Act

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<v Speaker 3>and the investments that we've made in rebuilding our infrastructure.

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<v Speaker 3>And ultimately, what we want to see is more companies

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<v Speaker 3>like US Steel in the United States that have union

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<v Speaker 3>workers or paid a good living wage. And that's exactly

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<v Speaker 3>why we're making the investments we're making. The US economy today.

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<v Speaker 5>But I'm looking at your readout and it says the

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<v Speaker 5>Deputy Secretary thanked his government counterparts for Japan's leadership. How

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<v Speaker 5>is this the national security concern when it's one of

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<v Speaker 5>the United States strongest allies in the Asia Pacific.

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<v Speaker 3>So, as I said, I'm not able to talk about

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<v Speaker 3>whether there is a case or isn't their case when

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<v Speaker 3>it comes to pacipious process is one that will work

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<v Speaker 3>through and take some time, and I expect that any

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<v Speaker 3>Sofia's case that comes through will be treated in a

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<v Speaker 3>manner that's consistent with the law. And ultimately, Congress passed

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<v Speaker 3>the law that gave Sophius certain authorities, and we plan

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<v Speaker 3>to do our jobs in terms of reviewing the national

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<v Speaker 3>security risk of any transaction that comes a Forsyphius. One

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<v Speaker 3>of the.

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<v Speaker 5>Policies you were discussing, of course, in Japan, was the

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<v Speaker 5>future of what is going on with Russia's invasion of Ukraine.

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<v Speaker 5>Where are you in the status of talks with your

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<v Speaker 5>partners about Russia's assets. Do you see a legal path

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<v Speaker 5>forward with Russia's stranded assets to give them to Ukraine?

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<v Speaker 3>Samory, As you mentioned, one of the topics of conversation

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<v Speaker 3>amongst the G seven and our coalition more broadly, is

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<v Speaker 3>how we make sure that Russia compensates Ukraine for the

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<v Speaker 3>damage they've done to their economy. Our leaders at the

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<v Speaker 3>beginning of the war immobilized Russia's sovereign assets that were

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<v Speaker 3>held in our countries so Putin couldn't use them to

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<v Speaker 3>fund his illegal war. Now they've said very clearly that

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<v Speaker 3>Putin is not getting back those assets until he pays

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<v Speaker 3>for the damage that's been done in Ukraine. And they've

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<v Speaker 3>asked US experts amongst the G seven to think about

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<v Speaker 3>what we can do to try and compensate the Ukrainians

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<v Speaker 3>for the damage that's been done in Europe. They're talking

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<v Speaker 3>about things like windfall profit taxes, for debating a number

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<v Speaker 3>of other ideas, with the idea being that ultimately we

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<v Speaker 3>need to make sure that Russia is the one that

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<v Speaker 3>pays to help rebuild Ukraine in order to make sure

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<v Speaker 3>they have a thriving economy as well as a thriving democracy.

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<v Speaker 1>Deputy Secretary, appreciate your time this morning. I just wanted

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<v Speaker 1>to squeeze in one further question actually about trade. The

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<v Speaker 1>former president is on the campaign trail talking at the

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<v Speaker 1>potential of a blanket ten percent tariffs on imports since

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<v Speaker 1>the United States this administration has maintained tariffs on China

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<v Speaker 1>from the previous administration. What is your position on that now?

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<v Speaker 3>So, I think the blanket ten percent tariff that isn't

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<v Speaker 3>well targeted would hurt the American people. And what we've

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<v Speaker 3>done instead of looking to simply do blanket tariffs is

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<v Speaker 3>try to work with our allies and partners to hold

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<v Speaker 3>China accountable for the things that they are doing that

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<v Speaker 3>violate trade rules going forward, because ultimately, what we know

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<v Speaker 3>is that the best way to make sure that China

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<v Speaker 3>lives by the rules of the road that we've all

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<v Speaker 3>set is by doing that with our allies and partners

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<v Speaker 3>rather than taking a go at loan approach. That's exactly

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<v Speaker 3>what the President's going to continue to do.

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<v Speaker 1>Do you think the US car manufacturers can compete with

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<v Speaker 1>Chinese automakers without those tariffs.

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<v Speaker 3>I think the US car manufacturers can compete with anyone

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<v Speaker 3>in the world if they're playing on a level playing field.

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<v Speaker 3>And the problem today for them is that in China

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<v Speaker 3>there are subsidies that are being given to not only Carcum,

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<v Speaker 3>but throughout the ecosystem that are making the possible to

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<v Speaker 3>produce cars that are lost leaders. And ultimately the reason

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<v Speaker 3>that in the United States but also in Europe people

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<v Speaker 3>are concerned about Chinese vehicles flooding the market is because

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<v Speaker 3>they're being produced in ways that violate basic trade rules,

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<v Speaker 3>and it's why we're looking all at our options here.

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<v Speaker 3>But I know that Europe is also looking at their

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<v Speaker 3>options to ensure that we don't end up in a

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<v Speaker 3>place where Chinese over capacity floods our markets.

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<v Speaker 1>What did those options look like, sir.

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<v Speaker 3>Well, I'm not going to get into them with you here,

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<v Speaker 3>but we're having serious conversations with our allies and partners

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<v Speaker 3>to ensure that we're in a position to make sure

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<v Speaker 3>that our companies are able to compete on a level

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<v Speaker 3>playing field.

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<v Speaker 1>That's why we do those interviews, Wally, we try and

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<v Speaker 1>make it happen. Well, you appreciate your time that the

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<v Speaker 1>US Deputy Treasury Secretary