Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Let's turn to Tariff's the big story, the President doubling
Speaker 2: down on his trade agenda.
Speaker 3: An unfortunate ruling from the United States Supreme Court. Almost
Speaker 3: all countries and corporations want to keep the deal that
Speaker 3: they already made. The legal power that I, as President
Speaker 3: have to make a new deal could be far worse
Speaker 3: for them.
Speaker 2: The President pledging to use alternative legal authorities to impose
Speaker 2: new duties following the Supreme courts ruling against the tariff agenda.
Speaker 2: I'm very pleased to say they'll make it some time
Speaker 2: for us. This morning, it's the US Trade Representative Jamieson Greer.
Speaker 2: Ambassador Greer, Welcome to the program, sir. We need to
Speaker 2: spend some time with you talking about the next year,
Speaker 2: particularly the next one hundred and fifty days. But there
Speaker 2: is some intrigue over the last week. Let's talk about
Speaker 2: the last week and particularly on Friday. There is now
Speaker 2: a new baseline tariff of ten percent. Why did we
Speaker 2: start with ten percent when the President appears to one fifteen.
Speaker 1: So the authority that we're using right now, which is
Speaker 1: a temporary one hundred and fifty day authority, that's five months,
Speaker 1: one hundred and fifty days. And we have a lot
Speaker 1: of countries out there that for a long time have
Speaker 1: had ten percent. We have some that have hire at
Speaker 1: fifteen percent. And so our goal with all of this
Speaker 1: is to have continuity. So we want to have the
Speaker 1: ten percent. It'll and we're looking about how to implement
Speaker 1: the fifteen percent that the present indicated, because we want
Speaker 1: to have continuity, We want the countries, we want the companies,
Speaker 1: we want people to understand that what we were doing before,
Speaker 1: we're going to reconstruct with alternative tools because we want
Speaker 1: to keep going maintain the policy.
Speaker 4: We'll just have a change in the legal implementing authority.
Speaker 2: And bestially giving me the impression that this is still
Speaker 2: under conversation negotiation, perhaps internally, when the President was pretty
Speaker 2: explicit over the weekend in its own words, I, as
Speaker 2: a president of the United States of America, will be
Speaker 2: effective immediately raising the ten percent worldwide tarifim countries, many
Speaker 2: of which have been ripping the usof for decades without
Speaker 2: retribution to the fully allowed and legally tested fifteen percent level.
Speaker 2: How can we sort of explain that which is rather
Speaker 2: explicit with the more nuanced time you're offering this morning, So.
Speaker 1: We'll put out a supplemental proclamation that the President will
Speaker 1: sign going to fifteen percent where appropriate. Remember, before the
Speaker 1: Supreme Court struck down the tariffs, a lot of these
Speaker 1: countries had agreed to have US tariffs on them of
Speaker 1: eighteen percent, nineteen percent, twenty percent. So going up to
Speaker 1: fifteen percent for them, at least temporarily, it's better than
Speaker 1: the deal that they had. And so the President wants
Speaker 1: to make sure again that we have continuity in this process,
Speaker 1: that folks who acknowledged they had giant trade surpluses with us,
Speaker 1: they had unfair trading practices affecting their trade, and who
Speaker 1: agreed agreed to pay the tariff, that they actually are
Speaker 1: in a position to do it until we can get
Speaker 1: the more durable and long lasting measures in place.
Speaker 5: And master agreed. When you say one appropriate, is that
Speaker 5: this week? Or are you looking to do this after
Speaker 5: the one hundred and fifty days runs out of the
Speaker 5: ten percent level we currently have.
Speaker 1: Oh, it'll be, it'll be in coming days. It's soon, right,
Speaker 1: I mean, the President put out of this direction to
Speaker 1: your point, and so that all of that is in development,
Speaker 1: so that will be soon again The idea is to
Speaker 1: establish a through line from the policy that the President
Speaker 1: has implemented successfully over the past year and continue it
Speaker 1: over the one hundred and fifty days, and as we
Speaker 1: build up appropriate terror prates using other investigations and means.
Speaker 5: So when you do raise the one twenty two terror
Speaker 5: to fifteen percent, what's your argument going to be to
Speaker 5: the Europeans? Because this is stacking on top of most
Speaker 5: favored nation rates. That means that for the Europeans that
Speaker 5: agreed on to fifteen percent the highest level they would
Speaker 5: agree to accept, this new rate for some products will
Speaker 5: be above fifteen percent. What's going to be the argument
Speaker 5: to Brussels.
Speaker 1: So I've been in constant contact with my counterparts and Brussels,
Speaker 1: the UK and elsewhere. And the way to think about
Speaker 1: this is every country has domestic procedures that they need
Speaker 1: to go through to come into compliance with a deal.
Speaker 1: With Brussels, we gave them a good rate on cars
Speaker 1: that stays the same.
Speaker 4: With the UK, we gave.
Speaker 1: Them a quote on cars. We gave them a quota
Speaker 1: of beef to import duty free that stays the same.
Speaker 1: So a lot of these parts stay the same. But
Speaker 1: just like Brussels, hasn't fully implemented its deal, or the
Speaker 1: UK hasn't fully implemented its deal. We also need a
Speaker 1: couple months now to have some domestic procedures because the
Speaker 1: Supreme Court struck down all of this. It's pretty normal
Speaker 1: when you have a trade deal to implement over time.
Speaker 1: Most trade deals take years to implement. We're on the
Speaker 1: fast track and so we're just going to have to have,
Speaker 1: you know, a couple three months to make sure that
Speaker 1: we rejigger the tariffs in a way that comply with
Speaker 1: our end of the deal. And we expect the EU
Speaker 1: and the UK to hold up their end of the
Speaker 1: bargain too.
Speaker 5: But does this new one fifteen percent now basically break
Speaker 5: the EU Trade Agreement given where most favored nation products
Speaker 5: are and those rates.
Speaker 1: So right now, as we talked about ten percents in place,
Speaker 1: there will be a proclamation raising it to fifteen percent
Speaker 1: appropriate and so once that comes out, I'm happy to
Speaker 1: come back on and explain how that might accommodate other
Speaker 1: countries where there's a deal.
Speaker 6: Well, any of the rates on any country stay at
Speaker 6: ten percent.
Speaker 4: Well we will.
Speaker 1: We want to make through that we go through the
Speaker 1: legal process and we get out of proclamation. Again, this
Speaker 1: is anytime we put on a tariff, we're going to
Speaker 1: have foreign interest who want to bring it down, so
Speaker 1: people are going to sue us. So I'm not going
Speaker 1: to get ahead of the President. I'm not going to
Speaker 1: get ahead of the White House Counsel and all these
Speaker 1: folks who are implementing this. So when that comes out,
Speaker 1: it will be very clear what and how and why investador.
Speaker 6: In some of your comments, it seems like you're suggesting
Speaker 6: that the rate could go above fifteen percent, and I
Speaker 6: just am curious what exactly you're planning to use. It's
Speaker 6: been discussed that section three oh one in particular will
Speaker 6: be used to go after places like China, which it
Speaker 6: has been used for before. Is that still in the cards.
Speaker 4: Yes.
Speaker 1: So Section three oh one is a country specific tool,
Speaker 1: and it allows the President to investigate unfair trading practices
Speaker 1: by countries. And again, this is what we've been getting
Speaker 1: at over the past year, as we've concluded deals with
Speaker 1: over a dozen countries. They have agreed to eliminate unfair
Speaker 1: barriers to our trade, take down their tariffs, you know,
Speaker 1: eliminate fake regulatory barriers, etc. And so we can actually
Speaker 1: conduct these investigations under Section three oh one on a
Speaker 1: country by country basis, figure out exactly what they're doing
Speaker 1: that's been so problematic, and negotiate with those countries, but
Speaker 1: also impose a tariff as enforcement to make sure that
Speaker 1: they eliminate those practices in China certainly, but also other
Speaker 1: countries Vietnam, Southeast Asia, the Europeans potentially. But the point
Speaker 1: is to recreate the policy that we've developed over the
Speaker 1: past year, to give continuity and be able to be
Speaker 1: in a position where we can honor the deals but
Speaker 1: also have enforcement available. That's the only reason why these
Speaker 1: countries have made all these concessions, because they know the
Speaker 1: presence willing to enforce, willing to raise tariffs if he
Speaker 1: needs to.
Speaker 5: Have you started the three on one investigations.
Speaker 1: So there are couple that are that have already started.
Speaker 1: We opened a Section three oh one investigation on Brazil
Speaker 1: a few months ago, we opened up one on China
Speaker 1: a few months ago about compliance with the Phase one deal,
Speaker 1: and we have many others that we are preparing right
Speaker 1: now we expect to launch in the coming days and weeks,
Speaker 1: such as related to forced labor and supply chains, industrial
Speaker 1: access capacity or unfair trading practices with respect to fishing
Speaker 1: or seafood or rice, or subsidies for certain products and
Speaker 1: that kind of thing.
Speaker 5: So, Invessiger, you were potentially planning to use three on
Speaker 5: one because when I spoke to you and your colleagues
Speaker 5: in the past, there was this concern Supreme Court could
Speaker 5: strike down AEPA. So why didn't you do these investigations
Speaker 5: from the very beginning.
Speaker 1: AIPA was the most appropriate tool to use because we
Speaker 1: are facing an emergency in this country. In the five
Speaker 1: years prior to President Trump's second term, are US trade
Speaker 1: deficit exploded by forty percent to reach one point two
Speaker 1: trillion dollars, the largest trade deficit in human history. And
Speaker 1: the trade deficit was a manifestation of many things, but
Speaker 1: one of them is a lot of offshoring of production
Speaker 1: to other countries, jobs and manufacturing that went to China, Vietnam, Mexico, etc.
Speaker 1: To the point where our defense industrial base was challenged,
Speaker 1: our manufacturing base and jobs were hollowed out. And this
Speaker 1: was an emergency and is an emergency, and so the
Speaker 1: President used an emergency power to move very very quickly
Speaker 1: Section three oh one and Section two thirty two.
Speaker 4: Some of our alternative tools.
Speaker 1: They take more time, they take more process, They're very effective,
Speaker 1: but they didn't have the flexibility and the speed we
Speaker 1: needed to really out the gate, make these points, get
Speaker 1: the deals with the countries, and now we can go
Speaker 1: back and make them firm.
Speaker 2: Ambassada, Canada, and Mexico of course will be down separately.
Speaker 2: But does the President feel constrained by USMCI.
Speaker 1: So, I wouldn't say feel constrained. We're in the middle
Speaker 1: of a review that we have to conduct in the
Speaker 1: United States. I'm in contact with my counterparts from both
Speaker 1: Mexico and Canada. There are things in you SMC that
Speaker 1: makes sense that you don't get a lot of news
Speaker 1: because they function fine, but there are a lot of
Speaker 1: things where we don't have the type of market access
Speaker 1: we want, whether it's in goods or services. We have
Speaker 1: Mexico that historically, over the past few years, has been
Speaker 1: discriminating against US energy.
Speaker 4: Producers and service providers.
Speaker 1: We have Canada that limits our access for dairy, has
Speaker 1: taken American wine and spirits off its shelves.
Speaker 4: So we have a lot of issues like that. We
Speaker 4: also have.
Speaker 1: Concerns about transhipment through Canada and Mexico of goods from
Speaker 1: third countries coming through and benefiting from duty free treatment
Speaker 1: from USMCA, And so we want to make sure that
Speaker 1: if there's an agreement with either of these countries, that
Speaker 1: it really benefits these countries and not third countries that
Speaker 1: might use Canada or Mexico as an export hub into
Speaker 1: the United States.
Speaker 2: I'm sure you followed the story Josh Wing Grove and
Speaker 2: the team Dan in Bloomberg News in Washington, d C.
Speaker 2: Reporting more recently that the President is privately musing about
Speaker 2: exiting the North American Trade Pact. What can you share
Speaker 2: with this this morning about the prospect of that, Hamnck.
Speaker 1: Well, it's not just privately. He talks about a public
Speaker 1: it's not a secret. I don't think that's super neosy,
Speaker 1: to be honest. The President has been really clear this
Speaker 1: year that he's concerned with the performance of USMCA. He
Speaker 1: doesn't feel that we should just rubber stamp this agreement.
Speaker 1: I'm having separate negotiations with Canada and Mexico because our
Speaker 1: relationships with those countries are so different, and so I
Speaker 1: think we'll have over the coming year the conversations. Maybe
Speaker 1: we'll have separate protocols with Canada and Mexico that we
Speaker 1: tack on to USMCA. We just have to fix some
Speaker 1: of the gaps in that the President has already taken
Speaker 1: action on autos, which is a big problem. We've seen
Speaker 1: a huge influx of imports of autos from Mexico over
Speaker 1: the past few years, when really we want to be
Speaker 1: making those things here. And we're already seeing Stilantis, GM
Speaker 1: and others announce new lines and using up open capacity
Speaker 1: in the United States to make more cars here. So
Speaker 1: we're already seeing a good effect from the present's trade
Speaker 1: policies with respect to Canada and Mexico.
Speaker 5: So sounds like a review and improve is the path
Speaker 5: you're on, Ambassador Gear. When it comes to the one
Speaker 5: twenty twos, are you prepared potentially for or suits as
Speaker 5: well using that legal authority.
Speaker 1: Well, any legal authority the President uses to impose tariffs,
Speaker 1: foreign interests are going to sue, right, people who are
Speaker 1: importing from foreign companies and foreign workers they're going to sue,
Speaker 1: So of course we expect that that comes along. However,
Speaker 1: I would say that the lower courts and even the
Speaker 1: Supreme Court expressed that one twenty two is an authority
Speaker 1: that the president can use. We put out the proclamation
Speaker 1: last week that lines out exactly how the president can
Speaker 1: use this and why he's using it in the declarations
Speaker 1: he's making. Are people going to sue? I expect they will.
Speaker 1: We feel confident in the case.
Speaker 5: In July of last year, though, the president's own lawyers
Speaker 5: said that one twenty two wasn't applical. They said that
Speaker 5: this is the appeal of the Court of International Trade decision.
Speaker 5: They said, basically, nor does it have any obvious application
Speaker 5: here one twenty two, where the concerns the president identified
Speaker 5: and declaring an emergency arise from trade deficits, which are
Speaker 5: conceptually distinct from balance of payment deficits. So why do
Speaker 5: you think it works now when it didn't work over
Speaker 5: the summer.
Speaker 1: So I will say first of all that I think
Speaker 1: that there's more context of that statement. And further, a
Speaker 1: balance of payments is not identical to a trade deficit.
Speaker 1: People have kind of set up this straw man that's
Speaker 1: just wrong. If people go back and actually read the
Speaker 1: proclamation that went out, it talks about the actual balance
Speaker 1: of payments deficit.
Speaker 4: It refers to the current account.
Speaker 1: Now, the trade deficit is a big portion of the
Speaker 1: current account, so it certainly is a driver of it.
Speaker 1: But we also talk about things like our net investment
Speaker 1: income position where we're twenty six trillion dollars in the hole.
Speaker 1: So there are a variety of things that contribute to
Speaker 1: a balance of payments deficit. And so folks who are
Speaker 1: out there with this kind of over simple straw man
Speaker 1: argument that we're just equating a trade deficit to a
Speaker 1: balance payments deficit, they're just wrong.
Speaker 4: They don't even understand. I don't think they've read the proclamation.
Speaker 2: And bestI can we finish on the dright deficit quite
Speaker 2: and recently, and just to wrap up the conversation, help
Speaker 2: explain to us what the metric for success is actually
Speaker 2: going to be for the administration to demonstrate to the
Speaker 2: American public that this effort is actually working.
Speaker 1: Sure, so when the President put his trade program into
Speaker 1: place starting in April, every month from April through December
Speaker 1: twenty twenty five, the trade deficit goods went down year
Speaker 1: on year.
Speaker 4: That's exactly what happened.
Speaker 1: So from April to December, the trade deficit and goods
Speaker 1: went down by seventeen percent. When we look at you know,
Speaker 1: is the trade policy working. We're looking at the direction
Speaker 1: and the trend and the trade deficit, so that's going
Speaker 1: the right way. We're looking at real wages. Are they
Speaker 1: going up? Are people being paid more to produce here?
Speaker 1: And they are. We have average weekly earnings or four
Speaker 1: point four percent over the year. And we're looking at
Speaker 1: what's happening with manufacturing and we're seeing a lot more
Speaker 1: purchases of capital goods. We're seeing starts on factories and
Speaker 1: so that's going the right direction. We're seeing productivity and
Speaker 1: manufacturing surging, so all of that's going in the right direction.
Speaker 1: And we're seeing things like you know, ge has announced
Speaker 1: you know, another three billion dollars worth of investment, a
Speaker 1: thousand jobs across five states, Georgia, Tennessee, et cetera. So
Speaker 1: we're seeing it in the data and we're seeing it
Speaker 1: in the actual expansion of manufacturing in America.
Speaker 2: Ambassador, and you've got a run. Thanks for making some
Speaker 2: time for us. Look forward to catching up again soon.
Speaker 2: Thank you, sir, Thank you very much. The US Trade
Speaker 2: Representative Jamison Greer on metrics for success after that trade
Speaker 2: deficit was much wider than expected at the previous read