WEBVTT - US Trade Rep. Greer Talks 15% Tariff, USMCA, EU Trade Deal

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Let's turn to Tariff's the big story, the President doubling

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<v Speaker 2>down on his trade agenda.

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<v Speaker 3>An unfortunate ruling from the United States Supreme Court. Almost

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<v Speaker 3>all countries and corporations want to keep the deal that

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<v Speaker 3>they already made. The legal power that I, as President

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<v Speaker 3>have to make a new deal could be far worse

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<v Speaker 3>for them.

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<v Speaker 2>The President pledging to use alternative legal authorities to impose

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<v Speaker 2>new duties following the Supreme courts ruling against the tariff agenda.

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<v Speaker 2>I'm very pleased to say they'll make it some time

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

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<v Speaker 2>Ambassador Greer, Welcome to the program, sir. We need to

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<v Speaker 2>spend some time with you talking about the next year,

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<v Speaker 2>particularly the next one hundred and fifty days. But there

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<v Speaker 2>is some intrigue over the last week. Let's talk about

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<v Speaker 2>the last week and particularly on Friday. There is now

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<v Speaker 2>a new baseline tariff of ten percent. Why did we

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<v Speaker 2>start with ten percent when the President appears to one fifteen.

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<v Speaker 1>So the authority that we're using right now, which is

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

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<v Speaker 1>one hundred and fifty days. And we have a lot

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<v Speaker 1>of countries out there that for a long time have

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<v Speaker 1>had ten percent. We have some that have hire at

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<v Speaker 1>fifteen percent. And so our goal with all of this

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<v Speaker 1>is to have continuity. So we want to have the

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

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<v Speaker 1>the fifteen percent that the present indicated, because we want

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<v Speaker 1>to have continuity, We want the countries, we want the companies,

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<v Speaker 1>we want people to understand that what we were doing before,

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<v Speaker 1>we're going to reconstruct with alternative tools because we want

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<v Speaker 1>to keep going maintain the policy.

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<v Speaker 4>We'll just have a change in the legal implementing authority.

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<v Speaker 2>And bestially giving me the impression that this is still

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<v Speaker 2>under conversation negotiation, perhaps internally, when the President was pretty

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<v Speaker 2>explicit over the weekend in its own words, I, as

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<v Speaker 2>a president of the United States of America, will be

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<v Speaker 2>effective immediately raising the ten percent worldwide tarifim countries, many

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<v Speaker 2>of which have been ripping the usof for decades without

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<v Speaker 2>retribution to the fully allowed and legally tested fifteen percent level.

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<v Speaker 2>How can we sort of explain that which is rather

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

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<v Speaker 1>We'll put out a supplemental proclamation that the President will

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<v Speaker 1>sign going to fifteen percent where appropriate. Remember, before the

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<v Speaker 1>Supreme Court struck down the tariffs, a lot of these

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<v Speaker 1>countries had agreed to have US tariffs on them of

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<v Speaker 1>eighteen percent, nineteen percent, twenty percent. So going up to

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<v Speaker 1>fifteen percent for them, at least temporarily, it's better than

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<v Speaker 1>the deal that they had. And so the President wants

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<v Speaker 1>to make sure again that we have continuity in this process,

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<v Speaker 1>that folks who acknowledged they had giant trade surpluses with us,

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<v Speaker 1>they had unfair trading practices affecting their trade, and who

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<v Speaker 1>agreed agreed to pay the tariff, that they actually are

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<v Speaker 1>in a position to do it until we can get

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<v Speaker 1>the more durable and long lasting measures in place.

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<v Speaker 5>And master agreed. When you say one appropriate, is that

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<v Speaker 5>this week? Or are you looking to do this after

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<v Speaker 5>the one hundred and fifty days runs out of the

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<v Speaker 5>ten percent level we currently have.

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

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<v Speaker 1>I mean, the President put out of this direction to

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<v Speaker 1>your point, and so that all of that is in development,

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<v Speaker 1>so that will be soon again The idea is to

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<v Speaker 1>establish a through line from the policy that the President

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<v Speaker 1>has implemented successfully over the past year and continue it

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<v Speaker 1>over the one hundred and fifty days, and as we

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<v Speaker 1>build up appropriate terror prates using other investigations and means.

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<v Speaker 5>So when you do raise the one twenty two terror

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<v Speaker 5>to fifteen percent, what's your argument going to be to

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<v Speaker 5>the Europeans? Because this is stacking on top of most

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<v Speaker 5>favored nation rates. That means that for the Europeans that

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<v Speaker 5>agreed on to fifteen percent the highest level they would

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<v Speaker 5>agree to accept, this new rate for some products will

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<v Speaker 5>be above fifteen percent. What's going to be the argument

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<v Speaker 5>to Brussels.

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

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<v Speaker 1>the UK and elsewhere. And the way to think about

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<v Speaker 1>this is every country has domestic procedures that they need

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<v Speaker 1>to go through to come into compliance with a deal.

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<v Speaker 1>With Brussels, we gave them a good rate on cars

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<v Speaker 1>that stays the same.

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<v Speaker 4>With the UK, we gave.

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<v Speaker 1>Them a quote on cars. We gave them a quota

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<v Speaker 1>of beef to import duty free that stays the same.

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<v Speaker 1>So a lot of these parts stay the same. But

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<v Speaker 1>just like Brussels, hasn't fully implemented its deal, or the

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<v Speaker 1>UK hasn't fully implemented its deal. We also need a

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<v Speaker 1>couple months now to have some domestic procedures because the

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<v Speaker 1>Supreme Court struck down all of this. It's pretty normal

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<v Speaker 1>when you have a trade deal to implement over time.

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<v Speaker 1>Most trade deals take years to implement. We're on the

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<v Speaker 1>fast track and so we're just going to have to have,

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<v Speaker 1>you know, a couple three months to make sure that

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<v Speaker 1>we rejigger the tariffs in a way that comply with

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<v Speaker 1>our end of the deal. And we expect the EU

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<v Speaker 1>and the UK to hold up their end of the

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<v Speaker 1>bargain too.

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<v Speaker 5>But does this new one fifteen percent now basically break

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<v Speaker 5>the EU Trade Agreement given where most favored nation products

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<v Speaker 5>are and those rates.

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<v Speaker 1>So right now, as we talked about ten percents in place,

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<v Speaker 1>there will be a proclamation raising it to fifteen percent

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<v Speaker 1>appropriate and so once that comes out, I'm happy to

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<v Speaker 1>come back on and explain how that might accommodate other

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<v Speaker 1>countries where there's a deal.

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<v Speaker 6>Well, any of the rates on any country stay at

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<v Speaker 6>ten percent.

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<v Speaker 4>Well we will.

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<v Speaker 1>We want to make through that we go through the

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<v Speaker 1>legal process and we get out of proclamation. Again, this

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<v Speaker 1>is anytime we put on a tariff, we're going to

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<v Speaker 1>have foreign interest who want to bring it down, so

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<v Speaker 1>people are going to sue us. So I'm not going

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<v Speaker 1>to get ahead of the President. I'm not going to

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<v Speaker 1>get ahead of the White House Counsel and all these

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<v Speaker 1>folks who are implementing this. So when that comes out,

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<v Speaker 1>it will be very clear what and how and why investador.

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<v Speaker 6>In some of your comments, it seems like you're suggesting

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<v Speaker 6>that the rate could go above fifteen percent, and I

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

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<v Speaker 6>been discussed that section three oh one in particular will

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<v Speaker 6>be used to go after places like China, which it

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<v Speaker 6>has been used for before. Is that still in the cards.

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<v Speaker 4>Yes.

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<v Speaker 1>So Section three oh one is a country specific tool,

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<v Speaker 1>and it allows the President to investigate unfair trading practices

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

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<v Speaker 1>at over the past year, as we've concluded deals with

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<v Speaker 1>over a dozen countries. They have agreed to eliminate unfair

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<v Speaker 1>barriers to our trade, take down their tariffs, you know,

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<v Speaker 1>eliminate fake regulatory barriers, etc. And so we can actually

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<v Speaker 1>conduct these investigations under Section three oh one on a

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<v Speaker 1>country by country basis, figure out exactly what they're doing

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<v Speaker 1>that's been so problematic, and negotiate with those countries, but

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<v Speaker 1>also impose a tariff as enforcement to make sure that

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<v Speaker 1>they eliminate those practices in China certainly, but also other

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<v Speaker 1>countries Vietnam, Southeast Asia, the Europeans potentially. But the point

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<v Speaker 1>is to recreate the policy that we've developed over the

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<v Speaker 1>past year, to give continuity and be able to be

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<v Speaker 1>in a position where we can honor the deals but

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<v Speaker 1>also have enforcement available. That's the only reason why these

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<v Speaker 1>countries have made all these concessions, because they know the

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<v Speaker 1>presence willing to enforce, willing to raise tariffs if he

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<v Speaker 1>needs to.

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<v Speaker 5>Have you started the three on one investigations.

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<v Speaker 1>So there are couple that are that have already started.

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<v Speaker 1>We opened a Section three oh one investigation on Brazil

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<v Speaker 1>a few months ago, we opened up one on China

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<v Speaker 1>a few months ago about compliance with the Phase one deal,

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<v Speaker 1>and we have many others that we are preparing right

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<v Speaker 1>now we expect to launch in the coming days and weeks,

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<v Speaker 1>such as related to forced labor and supply chains, industrial

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<v Speaker 1>access capacity or unfair trading practices with respect to fishing

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<v Speaker 1>or seafood or rice, or subsidies for certain products and

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<v Speaker 1>that kind of thing.

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<v Speaker 5>So, Invessiger, you were potentially planning to use three on

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<v Speaker 5>one because when I spoke to you and your colleagues

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<v Speaker 5>in the past, there was this concern Supreme Court could

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<v Speaker 5>strike down AEPA. So why didn't you do these investigations

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<v Speaker 5>from the very beginning.

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<v Speaker 1>AIPA was the most appropriate tool to use because we

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<v Speaker 1>are facing an emergency in this country. In the five

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<v Speaker 1>years prior to President Trump's second term, are US trade

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<v Speaker 1>deficit exploded by forty percent to reach one point two

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<v Speaker 1>trillion dollars, the largest trade deficit in human history. And

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<v Speaker 1>the trade deficit was a manifestation of many things, but

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<v Speaker 1>one of them is a lot of offshoring of production

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

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<v Speaker 1>To the point where our defense industrial base was challenged,

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<v Speaker 1>our manufacturing base and jobs were hollowed out. And this

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<v Speaker 1>was an emergency and is an emergency, and so the

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<v Speaker 1>President used an emergency power to move very very quickly

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<v Speaker 1>Section three oh one and Section two thirty two.

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<v Speaker 4>Some of our alternative tools.

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<v Speaker 1>They take more time, they take more process, They're very effective,

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<v Speaker 1>but they didn't have the flexibility and the speed we

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<v Speaker 1>needed to really out the gate, make these points, get

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<v Speaker 1>the deals with the countries, and now we can go

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<v Speaker 1>back and make them firm.

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<v Speaker 2>Ambassada, Canada, and Mexico of course will be down separately.

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<v Speaker 2>But does the President feel constrained by USMCI.

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

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<v Speaker 1>of a review that we have to conduct in the

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<v Speaker 1>United States. I'm in contact with my counterparts from both

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<v Speaker 1>Mexico and Canada. There are things in you SMC that

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<v Speaker 1>makes sense that you don't get a lot of news

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<v Speaker 1>because they function fine, but there are a lot of

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<v Speaker 1>things where we don't have the type of market access

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

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<v Speaker 1>Mexico that historically, over the past few years, has been

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<v Speaker 1>discriminating against US energy.

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<v Speaker 4>Producers and service providers.

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<v Speaker 1>We have Canada that limits our access for dairy, has

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<v Speaker 1>taken American wine and spirits off its shelves.

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<v Speaker 4>So we have a lot of issues like that. We

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<v Speaker 4>also have.

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<v Speaker 1>Concerns about transhipment through Canada and Mexico of goods from

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<v Speaker 1>third countries coming through and benefiting from duty free treatment

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<v Speaker 1>from USMCA, And so we want to make sure that

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<v Speaker 1>if there's an agreement with either of these countries, that

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<v Speaker 1>it really benefits these countries and not third countries that

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<v Speaker 1>might use Canada or Mexico as an export hub into

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<v Speaker 1>the United States.

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<v Speaker 2>I'm sure you followed the story Josh Wing Grove and

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<v Speaker 2>the team Dan in Bloomberg News in Washington, d C.

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<v Speaker 2>Reporting more recently that the President is privately musing about

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<v Speaker 2>exiting the North American Trade Pact. What can you share

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<v Speaker 2>with this this morning about the prospect of that, Hamnck.

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

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

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<v Speaker 1>to be honest. The President has been really clear this

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<v Speaker 1>year that he's concerned with the performance of USMCA. He

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<v Speaker 1>doesn't feel that we should just rubber stamp this agreement.

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<v Speaker 1>I'm having separate negotiations with Canada and Mexico because our

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<v Speaker 1>relationships with those countries are so different, and so I

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<v Speaker 1>think we'll have over the coming year the conversations. Maybe

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<v Speaker 1>we'll have separate protocols with Canada and Mexico that we

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<v Speaker 1>tack on to USMCA. We just have to fix some

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<v Speaker 1>of the gaps in that the President has already taken

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

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<v Speaker 1>a huge influx of imports of autos from Mexico over

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<v Speaker 1>the past few years, when really we want to be

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

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<v Speaker 1>and others announce new lines and using up open capacity

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<v Speaker 1>in the United States to make more cars here. So

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<v Speaker 1>we're already seeing a good effect from the present's trade

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<v Speaker 1>policies with respect to Canada and Mexico.

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<v Speaker 5>So sounds like a review and improve is the path

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

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<v Speaker 5>twenty twos, are you prepared potentially for or suits as

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<v Speaker 5>well using that legal authority.

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<v Speaker 1>Well, any legal authority the President uses to impose tariffs,

0:11:09.160 --> 0:11:11.320
<v Speaker 1>foreign interests are going to sue, right, people who are

0:11:11.320 --> 0:11:14.079
<v Speaker 1>importing from foreign companies and foreign workers they're going to sue,

0:11:14.120 --> 0:11:18.840
<v Speaker 1>So of course we expect that that comes along. However,

0:11:19.280 --> 0:11:21.520
<v Speaker 1>I would say that the lower courts and even the

0:11:21.559 --> 0:11:25.320
<v Speaker 1>Supreme Court expressed that one twenty two is an authority

0:11:25.320 --> 0:11:28.280
<v Speaker 1>that the president can use. We put out the proclamation

0:11:28.440 --> 0:11:31.760
<v Speaker 1>last week that lines out exactly how the president can

0:11:31.840 --> 0:11:33.719
<v Speaker 1>use this and why he's using it in the declarations

0:11:33.760 --> 0:11:36.920
<v Speaker 1>he's making. Are people going to sue? I expect they will.

0:11:37.280 --> 0:11:38.520
<v Speaker 1>We feel confident in the case.

0:11:38.679 --> 0:11:41.000
<v Speaker 5>In July of last year, though, the president's own lawyers

0:11:41.040 --> 0:11:44.160
<v Speaker 5>said that one twenty two wasn't applical. They said that

0:11:44.200 --> 0:11:46.679
<v Speaker 5>this is the appeal of the Court of International Trade decision.

0:11:47.040 --> 0:11:50.319
<v Speaker 5>They said, basically, nor does it have any obvious application

0:11:50.400 --> 0:11:53.079
<v Speaker 5>here one twenty two, where the concerns the president identified

0:11:53.080 --> 0:11:56.719
<v Speaker 5>and declaring an emergency arise from trade deficits, which are

0:11:56.760 --> 0:12:00.400
<v Speaker 5>conceptually distinct from balance of payment deficits. So why do

0:12:00.400 --> 0:12:02.160
<v Speaker 5>you think it works now when it didn't work over

0:12:02.200 --> 0:12:02.679
<v Speaker 5>the summer.

0:12:03.880 --> 0:12:06.040
<v Speaker 1>So I will say first of all that I think

0:12:06.080 --> 0:12:09.000
<v Speaker 1>that there's more context of that statement. And further, a

0:12:09.040 --> 0:12:12.080
<v Speaker 1>balance of payments is not identical to a trade deficit.

0:12:12.360 --> 0:12:14.360
<v Speaker 1>People have kind of set up this straw man that's

0:12:14.400 --> 0:12:17.000
<v Speaker 1>just wrong. If people go back and actually read the

0:12:17.040 --> 0:12:20.199
<v Speaker 1>proclamation that went out, it talks about the actual balance

0:12:20.240 --> 0:12:21.520
<v Speaker 1>of payments deficit.

0:12:22.000 --> 0:12:23.439
<v Speaker 4>It refers to the current account.

0:12:23.480 --> 0:12:25.600
<v Speaker 1>Now, the trade deficit is a big portion of the

0:12:25.640 --> 0:12:28.400
<v Speaker 1>current account, so it certainly is a driver of it.

0:12:28.840 --> 0:12:31.000
<v Speaker 1>But we also talk about things like our net investment

0:12:31.000 --> 0:12:34.640
<v Speaker 1>income position where we're twenty six trillion dollars in the hole.

0:12:35.200 --> 0:12:37.160
<v Speaker 1>So there are a variety of things that contribute to

0:12:37.160 --> 0:12:39.560
<v Speaker 1>a balance of payments deficit. And so folks who are

0:12:39.600 --> 0:12:42.679
<v Speaker 1>out there with this kind of over simple straw man

0:12:42.760 --> 0:12:44.920
<v Speaker 1>argument that we're just equating a trade deficit to a

0:12:44.960 --> 0:12:46.560
<v Speaker 1>balance payments deficit, they're just wrong.

0:12:46.600 --> 0:12:48.760
<v Speaker 4>They don't even understand. I don't think they've read the proclamation.

0:12:49.000 --> 0:12:51.360
<v Speaker 2>And bestI can we finish on the dright deficit quite

0:12:51.440 --> 0:12:54.600
<v Speaker 2>and recently, and just to wrap up the conversation, help

0:12:54.679 --> 0:12:57.920
<v Speaker 2>explain to us what the metric for success is actually

0:12:57.920 --> 0:13:00.440
<v Speaker 2>going to be for the administration to demonstrate to the

0:13:00.480 --> 0:13:03.440
<v Speaker 2>American public that this effort is actually working.

0:13:04.520 --> 0:13:08.360
<v Speaker 1>Sure, so when the President put his trade program into

0:13:08.360 --> 0:13:11.920
<v Speaker 1>place starting in April, every month from April through December

0:13:11.960 --> 0:13:14.480
<v Speaker 1>twenty twenty five, the trade deficit goods went down year

0:13:14.520 --> 0:13:14.920
<v Speaker 1>on year.

0:13:15.559 --> 0:13:16.640
<v Speaker 4>That's exactly what happened.

0:13:16.640 --> 0:13:19.000
<v Speaker 1>So from April to December, the trade deficit and goods

0:13:19.040 --> 0:13:22.920
<v Speaker 1>went down by seventeen percent. When we look at you know,

0:13:23.040 --> 0:13:25.720
<v Speaker 1>is the trade policy working. We're looking at the direction

0:13:25.760 --> 0:13:27.720
<v Speaker 1>and the trend and the trade deficit, so that's going

0:13:27.760 --> 0:13:30.640
<v Speaker 1>the right way. We're looking at real wages. Are they

0:13:30.640 --> 0:13:33.720
<v Speaker 1>going up? Are people being paid more to produce here?

0:13:33.800 --> 0:13:37.440
<v Speaker 1>And they are. We have average weekly earnings or four

0:13:37.440 --> 0:13:39.920
<v Speaker 1>point four percent over the year. And we're looking at

0:13:39.960 --> 0:13:42.920
<v Speaker 1>what's happening with manufacturing and we're seeing a lot more

0:13:42.960 --> 0:13:46.000
<v Speaker 1>purchases of capital goods. We're seeing starts on factories and

0:13:46.040 --> 0:13:48.400
<v Speaker 1>so that's going the right direction. We're seeing productivity and

0:13:48.440 --> 0:13:51.079
<v Speaker 1>manufacturing surging, so all of that's going in the right direction.

0:13:51.320 --> 0:13:54.160
<v Speaker 1>And we're seeing things like you know, ge has announced

0:13:54.320 --> 0:13:56.760
<v Speaker 1>you know, another three billion dollars worth of investment, a

0:13:56.840 --> 0:14:00.520
<v Speaker 1>thousand jobs across five states, Georgia, Tennessee, et cetera. So

0:14:00.520 --> 0:14:02.400
<v Speaker 1>we're seeing it in the data and we're seeing it

0:14:02.920 --> 0:14:06.920
<v Speaker 1>in the actual expansion of manufacturing in America.

0:14:07.040 --> 0:14:09.040
<v Speaker 2>Ambassador, and you've got a run. Thanks for making some

0:14:09.080 --> 0:14:10.679
<v Speaker 2>time for us. Look forward to catching up again soon.

0:14:10.720 --> 0:14:12.680
<v Speaker 2>Thank you, sir, Thank you very much. The US Trade

0:14:12.679 --> 0:14:16.559
<v Speaker 2>Representative Jamison Greer on metrics for success after that trade

0:14:16.559 --> 0:14:19.560
<v Speaker 2>deficit was much wider than expected at the previous read