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

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Speaker 2: Let's turn to Tariff's the big story, the President doubling

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Speaker 2: down on his trade agenda.

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Speaker 3: An unfortunate ruling from the United States Supreme Court. Almost

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Speaker 3: all countries and corporations want to keep the deal that

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Speaker 3: they already made. The legal power that I, as President

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Speaker 3: have to make a new deal could be far worse

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Speaker 3: for them.

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Speaker 2: The President pledging to use alternative legal authorities to impose

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Speaker 2: new duties following the Supreme courts ruling against the tariff agenda.

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Speaker 2: I'm very pleased to say they'll make it some time

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Speaker 2: for us. This morning, it's the US Trade Representative Jamieson Greer.

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Speaker 2: Ambassador Greer, Welcome to the program, sir. We need to

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Speaker 2: spend some time with you talking about the next year,

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Speaker 2: particularly the next one hundred and fifty days. But there

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Speaker 2: is some intrigue over the last week. Let's talk about

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Speaker 2: the last week and particularly on Friday. There is now

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Speaker 2: a new baseline tariff of ten percent. Why did we

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Speaker 2: start with ten percent when the President appears to one fifteen.

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Speaker 1: So the authority that we're using right now, which is

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Speaker 1: a temporary one hundred and fifty day authority, that's five months,

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Speaker 1: one hundred and fifty days. And we have a lot

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Speaker 1: of countries out there that for a long time have

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Speaker 1: had ten percent. We have some that have hire at

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Speaker 1: fifteen percent. And so our goal with all of this

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Speaker 1: is to have continuity. So we want to have the

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Speaker 1: ten percent. It'll and we're looking about how to implement

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Speaker 1: the fifteen percent that the present indicated, because we want

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Speaker 1: to have continuity, We want the countries, we want the companies,

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Speaker 1: we want people to understand that what we were doing before,

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Speaker 1: we're going to reconstruct with alternative tools because we want

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Speaker 1: to keep going maintain the policy.

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Speaker 4: We'll just have a change in the legal implementing authority.

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Speaker 2: And bestially giving me the impression that this is still

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Speaker 2: under conversation negotiation, perhaps internally, when the President was pretty

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Speaker 2: explicit over the weekend in its own words, I, as

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Speaker 2: a president of the United States of America, will be

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Speaker 2: effective immediately raising the ten percent worldwide tarifim countries, many

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Speaker 2: of which have been ripping the usof for decades without

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Speaker 2: retribution to the fully allowed and legally tested fifteen percent level.

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Speaker 2: How can we sort of explain that which is rather

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Speaker 2: explicit with the more nuanced time you're offering this morning, So.

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Speaker 1: We'll put out a supplemental proclamation that the President will

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Speaker 1: sign going to fifteen percent where appropriate. Remember, before the

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Speaker 1: Supreme Court struck down the tariffs, a lot of these

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Speaker 1: countries had agreed to have US tariffs on them of

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Speaker 1: eighteen percent, nineteen percent, twenty percent. So going up to

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Speaker 1: fifteen percent for them, at least temporarily, it's better than

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Speaker 1: the deal that they had. And so the President wants

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Speaker 1: to make sure again that we have continuity in this process,

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Speaker 1: that folks who acknowledged they had giant trade surpluses with us,

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Speaker 1: they had unfair trading practices affecting their trade, and who

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Speaker 1: agreed agreed to pay the tariff, that they actually are

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Speaker 1: in a position to do it until we can get

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Speaker 1: the more durable and long lasting measures in place.

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Speaker 5: And master agreed. When you say one appropriate, is that

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Speaker 5: this week? Or are you looking to do this after

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Speaker 5: the one hundred and fifty days runs out of the

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Speaker 5: ten percent level we currently have.

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Speaker 1: Oh, it'll be, it'll be in coming days. It's soon, right,

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Speaker 1: I mean, the President put out of this direction to

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Speaker 1: your point, and so that all of that is in development,

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Speaker 1: so that will be soon again The idea is to

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Speaker 1: establish a through line from the policy that the President

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Speaker 1: has implemented successfully over the past year and continue it

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Speaker 1: over the one hundred and fifty days, and as we

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Speaker 1: build up appropriate terror prates using other investigations and means.

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Speaker 5: So when you do raise the one twenty two terror

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Speaker 5: to fifteen percent, what's your argument going to be to

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Speaker 5: the Europeans? Because this is stacking on top of most

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Speaker 5: favored nation rates. That means that for the Europeans that

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Speaker 5: agreed on to fifteen percent the highest level they would

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Speaker 5: agree to accept, this new rate for some products will

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Speaker 5: be above fifteen percent. What's going to be the argument

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Speaker 5: to Brussels.

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Speaker 1: So I've been in constant contact with my counterparts and Brussels,

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Speaker 1: the UK and elsewhere. And the way to think about

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Speaker 1: this is every country has domestic procedures that they need

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Speaker 1: to go through to come into compliance with a deal.

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Speaker 1: With Brussels, we gave them a good rate on cars

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Speaker 1: that stays the same.

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Speaker 4: With the UK, we gave.

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Speaker 1: Them a quote on cars. We gave them a quota

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Speaker 1: of beef to import duty free that stays the same.

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Speaker 1: So a lot of these parts stay the same. But

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Speaker 1: just like Brussels, hasn't fully implemented its deal, or the

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Speaker 1: UK hasn't fully implemented its deal. We also need a

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Speaker 1: couple months now to have some domestic procedures because the

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Speaker 1: Supreme Court struck down all of this. It's pretty normal

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Speaker 1: when you have a trade deal to implement over time.

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Speaker 1: Most trade deals take years to implement. We're on the

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Speaker 1: fast track and so we're just going to have to have,

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Speaker 1: you know, a couple three months to make sure that

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Speaker 1: we rejigger the tariffs in a way that comply with

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Speaker 1: our end of the deal. And we expect the EU

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Speaker 1: and the UK to hold up their end of the

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Speaker 1: bargain too.

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Speaker 5: But does this new one fifteen percent now basically break

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Speaker 5: the EU Trade Agreement given where most favored nation products

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Speaker 5: are and those rates.

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Speaker 1: So right now, as we talked about ten percents in place,

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Speaker 1: there will be a proclamation raising it to fifteen percent

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Speaker 1: appropriate and so once that comes out, I'm happy to

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Speaker 1: come back on and explain how that might accommodate other

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Speaker 1: countries where there's a deal.

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Speaker 6: Well, any of the rates on any country stay at

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Speaker 6: ten percent.

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Speaker 4: Well we will.

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Speaker 1: We want to make through that we go through the

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Speaker 1: legal process and we get out of proclamation. Again, this

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Speaker 1: is anytime we put on a tariff, we're going to

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Speaker 1: have foreign interest who want to bring it down, so

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Speaker 1: people are going to sue us. So I'm not going

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Speaker 1: to get ahead of the President. I'm not going to

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Speaker 1: get ahead of the White House Counsel and all these

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Speaker 1: folks who are implementing this. So when that comes out,

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Speaker 1: it will be very clear what and how and why investador.

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Speaker 6: In some of your comments, it seems like you're suggesting

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Speaker 6: that the rate could go above fifteen percent, and I

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Speaker 6: just am curious what exactly you're planning to use. It's

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Speaker 6: been discussed that section three oh one in particular will

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Speaker 6: be used to go after places like China, which it

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Speaker 6: has been used for before. Is that still in the cards.

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Speaker 4: Yes.

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Speaker 1: So Section three oh one is a country specific tool,

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Speaker 1: and it allows the President to investigate unfair trading practices

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Speaker 1: by countries. And again, this is what we've been getting

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Speaker 1: at over the past year, as we've concluded deals with

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Speaker 1: over a dozen countries. They have agreed to eliminate unfair

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Speaker 1: barriers to our trade, take down their tariffs, you know,

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Speaker 1: eliminate fake regulatory barriers, etc. And so we can actually

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Speaker 1: conduct these investigations under Section three oh one on a

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Speaker 1: country by country basis, figure out exactly what they're doing

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Speaker 1: that's been so problematic, and negotiate with those countries, but

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Speaker 1: also impose a tariff as enforcement to make sure that

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Speaker 1: they eliminate those practices in China certainly, but also other

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Speaker 1: countries Vietnam, Southeast Asia, the Europeans potentially. But the point

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Speaker 1: is to recreate the policy that we've developed over the

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Speaker 1: past year, to give continuity and be able to be

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Speaker 1: in a position where we can honor the deals but

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Speaker 1: also have enforcement available. That's the only reason why these

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Speaker 1: countries have made all these concessions, because they know the

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Speaker 1: presence willing to enforce, willing to raise tariffs if he

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Speaker 1: needs to.

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Speaker 5: Have you started the three on one investigations.

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Speaker 1: So there are couple that are that have already started.

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Speaker 1: We opened a Section three oh one investigation on Brazil

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Speaker 1: a few months ago, we opened up one on China

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Speaker 1: a few months ago about compliance with the Phase one deal,

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Speaker 1: and we have many others that we are preparing right

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Speaker 1: now we expect to launch in the coming days and weeks,

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Speaker 1: such as related to forced labor and supply chains, industrial

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Speaker 1: access capacity or unfair trading practices with respect to fishing

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Speaker 1: or seafood or rice, or subsidies for certain products and

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Speaker 1: that kind of thing.

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Speaker 5: So, Invessiger, you were potentially planning to use three on

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Speaker 5: one because when I spoke to you and your colleagues

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Speaker 5: in the past, there was this concern Supreme Court could

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Speaker 5: strike down AEPA. So why didn't you do these investigations

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Speaker 5: from the very beginning.

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Speaker 1: AIPA was the most appropriate tool to use because we

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Speaker 1: are facing an emergency in this country. In the five

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Speaker 1: years prior to President Trump's second term, are US trade

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Speaker 1: deficit exploded by forty percent to reach one point two

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Speaker 1: trillion dollars, the largest trade deficit in human history. And

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Speaker 1: the trade deficit was a manifestation of many things, but

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Speaker 1: one of them is a lot of offshoring of production

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Speaker 1: to other countries, jobs and manufacturing that went to China, Vietnam, Mexico, etc.

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Speaker 1: To the point where our defense industrial base was challenged,

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Speaker 1: our manufacturing base and jobs were hollowed out. And this

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Speaker 1: was an emergency and is an emergency, and so the

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Speaker 1: President used an emergency power to move very very quickly

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Speaker 1: Section three oh one and Section two thirty two.

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Speaker 4: Some of our alternative tools.

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Speaker 1: They take more time, they take more process, They're very effective,

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Speaker 1: but they didn't have the flexibility and the speed we

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Speaker 1: needed to really out the gate, make these points, get

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Speaker 1: the deals with the countries, and now we can go

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Speaker 1: back and make them firm.

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Speaker 2: Ambassada, Canada, and Mexico of course will be down separately.

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Speaker 2: But does the President feel constrained by USMCI.

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Speaker 1: So, I wouldn't say feel constrained. We're in the middle

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Speaker 1: of a review that we have to conduct in the

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Speaker 1: United States. I'm in contact with my counterparts from both

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Speaker 1: Mexico and Canada. There are things in you SMC that

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Speaker 1: makes sense that you don't get a lot of news

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Speaker 1: because they function fine, but there are a lot of

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Speaker 1: things where we don't have the type of market access

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Speaker 1: we want, whether it's in goods or services. We have

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Speaker 1: Mexico that historically, over the past few years, has been

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Speaker 1: discriminating against US energy.

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Speaker 4: Producers and service providers.

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Speaker 1: We have Canada that limits our access for dairy, has

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Speaker 1: taken American wine and spirits off its shelves.

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Speaker 4: So we have a lot of issues like that. We

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Speaker 4: also have.

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Speaker 1: Concerns about transhipment through Canada and Mexico of goods from

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Speaker 1: third countries coming through and benefiting from duty free treatment

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Speaker 1: from USMCA, And so we want to make sure that

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Speaker 1: if there's an agreement with either of these countries, that

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Speaker 1: it really benefits these countries and not third countries that

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Speaker 1: might use Canada or Mexico as an export hub into

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Speaker 1: the United States.

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Speaker 2: I'm sure you followed the story Josh Wing Grove and

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Speaker 2: the team Dan in Bloomberg News in Washington, d C.

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Speaker 2: Reporting more recently that the President is privately musing about

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Speaker 2: exiting the North American Trade Pact. What can you share

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Speaker 2: with this this morning about the prospect of that, Hamnck.

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Speaker 1: Well, it's not just privately. He talks about a public

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Speaker 1: it's not a secret. I don't think that's super neosy,

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Speaker 1: to be honest. The President has been really clear this

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Speaker 1: year that he's concerned with the performance of USMCA. He

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Speaker 1: doesn't feel that we should just rubber stamp this agreement.

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Speaker 1: I'm having separate negotiations with Canada and Mexico because our

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Speaker 1: relationships with those countries are so different, and so I

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Speaker 1: think we'll have over the coming year the conversations. Maybe

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Speaker 1: we'll have separate protocols with Canada and Mexico that we

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Speaker 1: tack on to USMCA. We just have to fix some

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Speaker 1: of the gaps in that the President has already taken

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Speaker 1: action on autos, which is a big problem. We've seen

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Speaker 1: a huge influx of imports of autos from Mexico over

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Speaker 1: the past few years, when really we want to be

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Speaker 1: making those things here. And we're already seeing Stilantis, GM

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Speaker 1: and others announce new lines and using up open capacity

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Speaker 1: in the United States to make more cars here. So

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Speaker 1: we're already seeing a good effect from the present's trade

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Speaker 1: policies with respect to Canada and Mexico.

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Speaker 5: So sounds like a review and improve is the path

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Speaker 5: you're on, Ambassador Gear. When it comes to the one

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Speaker 5: twenty twos, are you prepared potentially for or suits as

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Speaker 5: well using that legal authority.

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Speaker 1: Well, any legal authority the President uses to impose tariffs,

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Speaker 1: foreign interests are going to sue, right, people who are

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Speaker 1: importing from foreign companies and foreign workers they're going to sue,

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Speaker 1: So of course we expect that that comes along. However,

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Speaker 1: I would say that the lower courts and even the

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Speaker 1: Supreme Court expressed that one twenty two is an authority

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Speaker 1: that the president can use. We put out the proclamation

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Speaker 1: last week that lines out exactly how the president can

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Speaker 1: use this and why he's using it in the declarations

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Speaker 1: he's making. Are people going to sue? I expect they will.

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Speaker 1: We feel confident in the case.

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Speaker 5: In July of last year, though, the president's own lawyers

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Speaker 5: said that one twenty two wasn't applical. They said that

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Speaker 5: this is the appeal of the Court of International Trade decision.

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Speaker 5: They said, basically, nor does it have any obvious application

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Speaker 5: here one twenty two, where the concerns the president identified

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Speaker 5: and declaring an emergency arise from trade deficits, which are

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Speaker 5: conceptually distinct from balance of payment deficits. So why do

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Speaker 5: you think it works now when it didn't work over

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Speaker 5: the summer.

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Speaker 1: So I will say first of all that I think

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Speaker 1: that there's more context of that statement. And further, a

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Speaker 1: balance of payments is not identical to a trade deficit.

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Speaker 1: People have kind of set up this straw man that's

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Speaker 1: just wrong. If people go back and actually read the

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Speaker 1: proclamation that went out, it talks about the actual balance

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Speaker 1: of payments deficit.

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Speaker 4: It refers to the current account.

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Speaker 1: Now, the trade deficit is a big portion of the

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Speaker 1: current account, so it certainly is a driver of it.

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Speaker 1: But we also talk about things like our net investment

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Speaker 1: income position where we're twenty six trillion dollars in the hole.

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Speaker 1: So there are a variety of things that contribute to

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Speaker 1: a balance of payments deficit. And so folks who are

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Speaker 1: out there with this kind of over simple straw man

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Speaker 1: argument that we're just equating a trade deficit to a

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Speaker 1: balance payments deficit, they're just wrong.

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Speaker 4: They don't even understand. I don't think they've read the proclamation.

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Speaker 2: And bestI can we finish on the dright deficit quite

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Speaker 2: and recently, and just to wrap up the conversation, help

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Speaker 2: explain to us what the metric for success is actually

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Speaker 2: going to be for the administration to demonstrate to the

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Speaker 2: American public that this effort is actually working.

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Speaker 1: Sure, so when the President put his trade program into

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Speaker 1: place starting in April, every month from April through December

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Speaker 1: twenty twenty five, the trade deficit goods went down year

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Speaker 1: on year.

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Speaker 4: That's exactly what happened.

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Speaker 1: So from April to December, the trade deficit and goods

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Speaker 1: went down by seventeen percent. When we look at you know,

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Speaker 1: is the trade policy working. We're looking at the direction

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Speaker 1: and the trend and the trade deficit, so that's going

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Speaker 1: the right way. We're looking at real wages. Are they

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Speaker 1: going up? Are people being paid more to produce here?

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Speaker 1: And they are. We have average weekly earnings or four

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Speaker 1: point four percent over the year. And we're looking at

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Speaker 1: what's happening with manufacturing and we're seeing a lot more

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Speaker 1: purchases of capital goods. We're seeing starts on factories and

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Speaker 1: so that's going the right direction. We're seeing productivity and

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Speaker 1: manufacturing surging, so all of that's going in the right direction.

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Speaker 1: And we're seeing things like you know, ge has announced

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Speaker 1: you know, another three billion dollars worth of investment, a

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Speaker 1: thousand jobs across five states, Georgia, Tennessee, et cetera. So

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Speaker 1: we're seeing it in the data and we're seeing it

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Speaker 1: in the actual expansion of manufacturing in America.

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Speaker 2: Ambassador, and you've got a run. Thanks for making some

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Speaker 2: time for us. Look forward to catching up again soon.

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Speaker 2: Thank you, sir, Thank you very much. The US Trade

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Speaker 2: Representative Jamison Greer on metrics for success after that trade

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Speaker 2: deficit was much wider than expected at the previous read