WEBVTT - This is a Calculated Strategy, Peter Navarro Says 0:00:00.080 --> 0:00:13.840 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jailie. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.879 Bloomberg dot Com, and of course, on the Bloomberg. The 0:00:33.920 --> 0:00:37.199 news over the weekend softening the trade war talk was 0:00:37.240 --> 0:00:41.040 the Treasury Secretary Stephen Manu Chin speaking to Fox News 0:00:41.080 --> 0:00:44.960 on Sunday. We're having very productive conversations with the Chinese. 0:00:45.280 --> 0:00:49.800 I'm cautially hopeful that will reach an agreement. Jim Glassman 0:00:49.840 --> 0:00:52.760 with US JP Morgan, head economist of Commercial Banking here 0:00:52.760 --> 0:00:55.720 in New York. Jimmy, you cautiously hopeful that'll reach an 0:00:55.760 --> 0:00:58.960 agreement with the Chinese. Yeah, you know, because obviously we 0:00:59.040 --> 0:01:01.880 don't like the sound of terriffs. Tariffs remind us of 0:01:02.320 --> 0:01:05.160 global trade wars from a hundred years ago, in nineteen thirties. 0:01:05.600 --> 0:01:08.000 But the truth is, if if you really look past 0:01:08.040 --> 0:01:12.520 all the noise, the real argument here is a beef 0:01:12.560 --> 0:01:16.679 with China and intellectual property rights and technology transfers. I've 0:01:16.680 --> 0:01:19.479 been hearing that story from businesses for a long time, 0:01:19.520 --> 0:01:22.160 so I think what we're hoping is this is part 0:01:22.160 --> 0:01:24.840 of a big negotiating strategy and what it's gonna do 0:01:25.560 --> 0:01:28.280 is make China realize they need to work harder to 0:01:28.319 --> 0:01:30.800 figure out how to how to take care of this issue. 0:01:31.200 --> 0:01:32.720 So I think at the end of the day, this 0:01:32.800 --> 0:01:34.679 is not going to spark global trade war. It's not 0:01:34.760 --> 0:01:37.360 in anyone's interest. We would lose as much as anybody 0:01:37.400 --> 0:01:40.800 else would. And I think there's reason to be to 0:01:40.840 --> 0:01:43.119 give them the benefit of the doubt that if this 0:01:43.640 --> 0:01:46.960 actually sets the States for some real negotiations behind these 0:01:47.160 --> 0:01:49.520 on the scenes, and we don't need tariffs, fine, I 0:01:49.600 --> 0:01:52.240 mean we we've already seen many of the still a 0:01:52.320 --> 0:01:55.600 luminate tariffs most countries were exempted from. They have been 0:01:55.640 --> 0:01:58.760 big coughs out for for a lot of countries. There 0:01:58.840 --> 0:02:02.120 is a fairbout Jim, this neghost yadding tactic. If you 0:02:02.160 --> 0:02:04.400 want to frame the approach of this administration, that why 0:02:04.720 --> 0:02:07.600 um gets out of control and wrong and thing's gonna 0:02:07.600 --> 0:02:10.320 be dangerous base case though, Jim, I think the base 0:02:10.360 --> 0:02:13.040 cases there's too much at stake here for both China 0:02:13.200 --> 0:02:17.160 and US and everybody else. Uh. And it's it's it's 0:02:17.200 --> 0:02:20.320 bizarre to me that after having gone through all this 0:02:21.000 --> 0:02:22.959 effort to get the taxed before them and get a U. S. 0:02:23.000 --> 0:02:25.040 Tax code in a line with everybody else, We're gonna 0:02:25.120 --> 0:02:27.359 come along and do something on the trade front to 0:02:27.360 --> 0:02:30.520 totally undermine that it doesn't make sense. So I'm willing 0:02:30.560 --> 0:02:33.519 to I'm willing to give them the benefit of the 0:02:33.560 --> 0:02:35.720 doubt that the real goal here is to try to 0:02:35.840 --> 0:02:39.080 address these violation of intellectual property rights. We've been using 0:02:39.080 --> 0:02:42.200 you this morning, Jim Glass, to give us great international economics. 0:02:42.240 --> 0:02:43.880 We had met on the guard On earlier. We got 0:02:43.880 --> 0:02:47.120 Peter Navarro coming up, Like, folks, I'm gonna get out 0:02:47.120 --> 0:02:49.200 in front of this because Dr Navarro has got some 0:02:49.240 --> 0:02:52.280 real strong views that many of our listeners frankly agree with. 0:02:52.480 --> 0:02:55.640 Their basic idea off of his books is China's bad, 0:02:56.440 --> 0:02:59.520 China's evil, and we got to go head on against China. 0:03:00.040 --> 0:03:03.920 What's the price of a Navarro approach to China. We 0:03:03.960 --> 0:03:09.280 all lose, China loses, us loses. We all lose because 0:03:09.639 --> 0:03:12.440 because what's going on here is Asia is where half 0:03:12.480 --> 0:03:16.359 the world lives. In Asia, they're going through an industrial revolution. 0:03:16.800 --> 0:03:21.560 Are the industrial revolution benefited fift of the world's population Europe, 0:03:21.600 --> 0:03:24.680 In the US what's going on now is benefiting half 0:03:24.680 --> 0:03:26.680 the world's population. But the thing is, it's not just 0:03:26.720 --> 0:03:29.720 benefiting them, it's benefiting all of us. Our business community 0:03:29.800 --> 0:03:33.120 is engaged there, and so if we do something to 0:03:33.160 --> 0:03:37.120 try to stymy what's going on in Asia, we all 0:03:37.120 --> 0:03:41.680 lose out. It's all it's all about future possibilities, future opportunity. 0:03:41.760 --> 0:03:43.280 And I think that's why you kind of be to 0:03:43.360 --> 0:03:45.440 my team. My mind. You kind of have to look 0:03:45.480 --> 0:03:47.880 past I can understand why politicians don't like to do this, 0:03:48.320 --> 0:03:50.920 but there's gonna be a lot of abuses when when 0:03:50.920 --> 0:03:55.200 you have large countries growing rapidly rising, there's gonna be abuses. 0:03:55.440 --> 0:03:59.560 And I'm sure the Brits complained about American businesses stealing 0:04:00.440 --> 0:04:03.600 technology in the old days and a couple of years ago. 0:04:03.840 --> 0:04:06.320 This is just what happens. And I think that over 0:04:06.360 --> 0:04:09.800 time here, as the region rises, we're going to find 0:04:09.800 --> 0:04:11.600 out that there's so much benefit for all of us. 0:04:11.640 --> 0:04:13.640 But Jim, at least just to sit here and say 0:04:13.680 --> 0:04:16.000 that it's okay for one nation to cheat, even if 0:04:16.000 --> 0:04:18.599 they're the second biggest economy on the planet. It's okay 0:04:18.640 --> 0:04:22.680 for that to cheat because the status quo still benefits US. Yeah, 0:04:22.680 --> 0:04:25.360 I think everybody cheats frankly, and it's a question of 0:04:25.520 --> 0:04:28.960 I think it's not surprising that when China is growing 0:04:29.000 --> 0:04:31.960 so rapidly. I remember the complaints about Japan in the 0:04:32.000 --> 0:04:34.400 early days they were copying a lot of processes here 0:04:34.440 --> 0:04:38.560 doing the better. But I think as countries mature, they 0:04:38.600 --> 0:04:41.400 realize that it's important to respect rule of law and 0:04:41.440 --> 0:04:44.680 intellectual property rights because Chinese will be inventing things as well. 0:04:45.000 --> 0:04:47.680 So I think I think it's it's hard for politicians 0:04:47.680 --> 0:04:49.000 to do this, but I think if you think about 0:04:49.000 --> 0:04:53.000 the big picture what lies ahead, there's so much possibility 0:04:53.080 --> 0:04:55.400 coming for a world, and honestly, I don't think we 0:04:55.440 --> 0:04:58.400 can stop it. I think when people are poor and 0:04:58.440 --> 0:05:00.560 they found a way to make it happened. I mean, 0:05:00.560 --> 0:05:03.159 it's interesting to me that Chinese love American products. You 0:05:03.240 --> 0:05:06.320 agree with with Brad DeLong and Danny Roderick and others. 0:05:06.320 --> 0:05:08.920 At the heart of the matter here is we we 0:05:09.000 --> 0:05:12.840 had an agreement with the American worker that if we 0:05:12.880 --> 0:05:17.440 did globalization, you'd somehow be compensated for the loss of 0:05:17.480 --> 0:05:21.839 your blue collar manufacturing job in North Carolina. That's the failure. 0:05:22.120 --> 0:05:25.320 That's the failures failure. We all failed. We so we 0:05:25.320 --> 0:05:27.440 we we economys tend to look at I really think 0:05:27.560 --> 0:05:29.720 the problem for the guy in Ohio and and the 0:05:29.760 --> 0:05:33.159 guy working the auto plant is automation. We saw that 0:05:33.279 --> 0:05:35.200 coming and we think, well, that's the great that's the 0:05:35.240 --> 0:05:37.839 way it always is, and we forget that it's disruptive 0:05:37.839 --> 0:05:40.839 and people lose jobs and lose opportunity. And I think 0:05:40.880 --> 0:05:45.480 the failure was not working hard to find alternatives for 0:05:45.520 --> 0:05:48.200 people and helping them get skilled up. And then a 0:05:48.200 --> 0:05:49.919 lot of that work used to be done by unions, 0:05:50.160 --> 0:05:52.440 so we don't do that. To be clear, and you're 0:05:52.480 --> 0:05:54.880 wonderful power points you put together, and then all the 0:05:54.920 --> 0:05:58.599 work that JP Morgan does with the Chasman team, what 0:05:58.839 --> 0:06:04.160 is the mix of domestic economic growth near boom and 0:06:04.240 --> 0:06:09.520 the foreign dampening that comes from larger large imports lesser exports. 0:06:09.920 --> 0:06:13.080 You know, it's it's really hard to tell because our 0:06:13.120 --> 0:06:16.080 exports have risen a huge amount too. So what that 0:06:16.160 --> 0:06:20.719 means is um if we could somehow close the trade 0:06:20.720 --> 0:06:24.680 gap and not harm everybody else, we would probably be 0:06:24.720 --> 0:06:26.560 able to There would be more jobs here. But the 0:06:26.560 --> 0:06:29.960 problem is this process of letting free trade open up, 0:06:30.000 --> 0:06:33.360 even though it means trade deficits, it's also creating new jobs, 0:06:33.400 --> 0:06:37.000 and so it's difficult to know exactly. And I think 0:06:37.000 --> 0:06:39.800 that's the problem for most Americans. They see the jobs 0:06:39.839 --> 0:06:42.400 that might have migrated to Michigan, I mean, to to 0:06:42.400 --> 0:06:44.920 to Mexico or to China, but they can't see the 0:06:45.040 --> 0:06:49.240 jobs that are getting created by this globalization that's happening 0:06:49.240 --> 0:06:52.440 around us. If the world if the problem is it's 0:06:52.440 --> 0:06:55.800 not a zero sum pie. The world pie is growing, 0:06:56.360 --> 0:06:58.880 and so we are an important part of that. And 0:06:58.920 --> 0:07:02.240 I think you know, you look at how the U. S. 0:07:02.279 --> 0:07:04.440 Economy is performing. We're doing really well. Now we're back 0:07:04.440 --> 0:07:07.160 to we're close to full employment. The big challenge has 0:07:07.200 --> 0:07:10.240 been for people who are working in the industries where 0:07:10.280 --> 0:07:15.160 automation is displacing routine work. Jim Glassman, thank you so much, 0:07:15.160 --> 0:07:34.239 greatly appreciative. He charges in with hostile intent for over 0:07:34.360 --> 0:07:37.480 after over, He even races back to his mark with 0:07:37.720 --> 0:07:42.080 unrelenting purpose. Wagner took just three wickets in the match, 0:07:42.160 --> 0:07:46.200 but one of them critically with his last ball before dinner, 0:07:46.840 --> 0:07:50.840 was that of Stokes. John. Let's do cricket for like 0:07:50.960 --> 0:07:53.440 thirty seconds. We're here with the Consul General of the 0:07:53.520 --> 0:07:57.840 United Kingdom, and sir, you're apault. Is it an international 0:07:57.920 --> 0:08:02.040 incident that Australia Tampa the ball and England can't beat 0:08:02.120 --> 0:08:05.720 New Zealand? Is this like international? Is this risen to 0:08:05.760 --> 0:08:08.920 an international event? No? I don't think it has. I 0:08:08.960 --> 0:08:11.560 think the ball tempering is pretty appalling, but I can't 0:08:11.560 --> 0:08:13.840 put it better than the Australian Prime minister. And as 0:08:13.880 --> 0:08:15.840 for US losing to New Zealand, world, there's a second 0:08:15.880 --> 0:08:18.280 test soon and as I once said before on Bloomberg, 0:08:18.640 --> 0:08:20.800 at least the baseball season starts soon. There you go 0:08:21.120 --> 0:08:24.040 in basic, can you tamper with the ball in base Oh? 0:08:24.080 --> 0:08:26.560 We got, yes, we got that. A spit and a 0:08:26.640 --> 0:08:29.160 spinder used to be legal, and then it was made 0:08:29.200 --> 0:08:31.440 ill you can't do. Then you would sit in the 0:08:31.480 --> 0:08:35.360 backyard and practice it, and then your father would cuff 0:08:35.400 --> 0:08:38.040 you across the head and say, if you do a 0:08:38.080 --> 0:08:42.160 spinner in little league, you will not eat for a week. Interesting. 0:08:42.360 --> 0:08:44.959 I wonder if Anthony Phillipson would prefer to talk about 0:08:44.960 --> 0:08:48.719 cricket or Brexit politics Anthony in the United Kingdom, this 0:08:49.000 --> 0:08:52.680 conversation about the city of London improved equivalence. I think 0:08:52.760 --> 0:08:56.760 is the jargon for improve the covalence. Is that right? 0:08:57.240 --> 0:08:59.800 What is that? So? I think I would take us 0:08:59.800 --> 0:09:02.560 back to the Chancellor made a speech in the City 0:09:02.559 --> 0:09:05.480 of London on March seventh where he set out in 0:09:05.559 --> 0:09:10.520 some detail what our our proposals were for the new 0:09:10.559 --> 0:09:12.360 relationship between the UK and the EU and the area 0:09:12.400 --> 0:09:15.520 financial services and talked a lot about a system of 0:09:15.559 --> 0:09:20.240 reciprocal regulatory equivalents with a degree of common supervision, common 0:09:20.280 --> 0:09:24.120 dispute resolution mechanism, etcetera, etcetera, all designed to sort of 0:09:24.200 --> 0:09:26.920 ensure that as we remain engaged, which is our ambition, 0:09:27.280 --> 0:09:31.080 there will continue to be sort of the necessary degree 0:09:31.080 --> 0:09:33.719 of financial stability expurence in both directions. So if you're 0:09:33.720 --> 0:09:36.080 a bank in the City of London and this is 0:09:36.080 --> 0:09:40.080 the agreement, are they going to get the certainty they need? Well? 0:09:40.080 --> 0:09:42.640 I think they will, and maybe in two regards. First 0:09:42.679 --> 0:09:44.680 of all, one thing that they will get through the 0:09:44.679 --> 0:09:49.679 implementation period is certainty and clarity out to December twenty twenty, 0:09:49.679 --> 0:09:52.160 by which time we will have the new partnership ready 0:09:52.200 --> 0:09:55.280 to come into place. And then if we achieve our 0:09:55.320 --> 0:09:57.280 ambition has set out as a say in the Chancellor speech. 0:09:57.320 --> 0:09:59.520 But also I would say reflected in the guidelines that 0:09:59.520 --> 0:10:02.679 the counts all the twenty seven member states meeting as 0:10:02.679 --> 0:10:05.439 the Council on Friday issue to the commissioned and I 0:10:05.480 --> 0:10:07.160 think will be in a good place. Is it up 0:10:07.200 --> 0:10:09.800 for the Europeans post twenty to just decide on a 0:10:09.840 --> 0:10:13.480 whim whether there is equivalence or not. Well, that's why 0:10:13.520 --> 0:10:15.800 I think we need this, this mechanism that has both 0:10:15.800 --> 0:10:18.320 sides with with a stake in the discussion, because we 0:10:18.360 --> 0:10:20.920 need the certainty and we need we need both sides 0:10:20.960 --> 0:10:23.920 to have the necessary certainty in order to to provide 0:10:23.920 --> 0:10:26.720 that assurance going forward. It's become very, very difficult to 0:10:27.120 --> 0:10:29.120 make an agreement with the Europeans at a time when 0:10:29.280 --> 0:10:31.880 the United States is pushing for agreements new agreements from 0:10:32.000 --> 0:10:36.480 from almost everyone has Brexit politics and making trade agreements 0:10:36.480 --> 0:10:41.520 got harder over the last weeks and not easier. I 0:10:41.559 --> 0:10:43.679 don't know. I'm not sure it's as a binary sort 0:10:43.679 --> 0:10:44.800 of one way or the other. I mean, it's a 0:10:44.880 --> 0:10:48.160 very fluid situation. International trade has always been quite fluid. 0:10:48.200 --> 0:10:51.240 I would say the UK, we have our objectives with 0:10:51.280 --> 0:10:53.679 regard to that. You we have our objectives with regard 0:10:53.679 --> 0:10:55.760 to the US, and we'll gear up for and drive 0:10:55.840 --> 0:10:58.640 momentum towards as we as we prepare and then leave 0:10:59.040 --> 0:11:01.400 the EU, and we'll continue to sort of push in 0:11:01.400 --> 0:11:04.480 both directions at once. How do you sell exports in 0:11:04.520 --> 0:11:07.839 the United States? How do you get US? I mean, 0:11:08.000 --> 0:11:10.559 you want us to buy hardware and all the fancy 0:11:10.640 --> 0:11:13.600 value add stuff. But how do you get those cookies 0:11:13.640 --> 0:11:15.240 they have in Herod's as you go in and you 0:11:15.280 --> 0:11:17.280 go back three rooms. How do you move more of 0:11:17.280 --> 0:11:20.920 those in the United States? Well, one thing I would 0:11:20.920 --> 0:11:22.840 point out is that we've been quite successful at this 0:11:23.120 --> 0:11:25.640 for a while. I mean, the US single biggest export 0:11:25.679 --> 0:11:28.520 market across the whole variety of sectors. How about that 0:11:28.640 --> 0:11:31.880 Blackhead we put up against the Confederacy in eighteen sixty three. 0:11:32.000 --> 0:11:34.920 That worked out well. We all learn lessons from history, um, 0:11:35.040 --> 0:11:38.120 so as we look forward. I think there's actually one 0:11:38.160 --> 0:11:40.480 thing I would say in Washington last week we did 0:11:40.480 --> 0:11:43.760 with our colleagues at USTR and Commerce set up a 0:11:43.800 --> 0:11:46.920 really good and sort of successful sm dialogue. And the 0:11:47.080 --> 0:11:49.520 reason I mentioned that is because even before we leave 0:11:49.600 --> 0:11:51.120 the EU, there's so much that we can do to 0:11:51.160 --> 0:11:53.840 continue to help UK companies exports to the US and 0:11:53.920 --> 0:11:56.600 US companies export to the UK, and some of it 0:11:56.640 --> 0:11:58.240 is just sort of explaining to each other how our 0:11:58.280 --> 0:12:00.680 systems work and what the benefit are of being in 0:12:00.720 --> 0:12:03.320 each other's. Well, what's your reciprocity headache? Right now? The 0:12:03.320 --> 0:12:06.880 President was mental about China reciprocity. We have an issue. 0:12:06.880 --> 0:12:09.600 What's a product in the United Kingdom where the United 0:12:09.600 --> 0:12:14.319 States are better? Out of shape about reciprocity. I think 0:12:14.480 --> 0:12:16.560 if okay, if I had to pick one, I probably 0:12:16.600 --> 0:12:18.120 would say that one of the things that our companies 0:12:18.160 --> 0:12:22.920 wrestle with are things like federal and state level procurement rules. Um. 0:12:22.960 --> 0:12:26.599 You know, there are things that are a an impediment 0:12:26.679 --> 0:12:28.880 to trade investment between US and there's those are the 0:12:28.920 --> 0:12:30.800 sorts of things. Now I'm believing I'm not saying that 0:12:30.840 --> 0:12:32.679 I expect the US to sort of remove their procurement 0:12:32.720 --> 0:12:35.000 rules entirely. It's one of the reasons why we encourage 0:12:35.000 --> 0:12:36.800 sort of UK companies to invest here and then they 0:12:36.840 --> 0:12:39.560 become effectively sort of U S entities and and can 0:12:39.800 --> 0:12:43.440 can invent themselves in local economy. Um. I mean another 0:12:43.480 --> 0:12:46.559 report we did recently is we we mapped by congressional 0:12:46.600 --> 0:12:50.120 district the exports from those districts to the UK and 0:12:50.160 --> 0:12:53.240 the US jobs that rely on them, and we're talking 0:12:53.240 --> 0:12:55.400 a hundreds of thousands. With the statistic we like to use, 0:12:55.440 --> 0:12:57.120 is it every day a million brands going to work 0:12:57.120 --> 0:12:58.880 for American companies and a million Americans got to work 0:12:58.880 --> 0:13:00.840 for British company Council Journal will thank you so much, 0:13:00.920 --> 0:13:04.400 Mr Phillipson. It's with the United Kingdom and Consulate General 0:13:04.760 --> 0:13:20.840 offices here in New York. Joining us now Peter Navarro. 0:13:20.960 --> 0:13:24.719 He is Assistant to the President for Trade and Manufacturing 0:13:24.800 --> 0:13:28.240 policy and has been a lightning rod of debate and 0:13:28.280 --> 0:13:32.120 criticism as we have moved to a new trading strategy. 0:13:32.200 --> 0:13:35.440 Dr Navarro, wonderful day have you with us right now? 0:13:35.880 --> 0:13:40.240 Your arch critics would suggest that you and the Secretary 0:13:40.320 --> 0:13:44.520 Commerce Mr Ross are immune to the game theory the 0:13:44.720 --> 0:13:49.640 responses that are made to us action. What will be 0:13:49.720 --> 0:13:53.560 the game theoretic response of China to the events you 0:13:53.640 --> 0:13:59.160 have proposed and now the actions we see from the President. Well, Tom, 0:13:59.160 --> 0:14:02.160 I'm good to be here with you. First of all, Um, 0:14:02.440 --> 0:14:04.240 not in a world of game theory. We're in a 0:14:04.320 --> 0:14:07.920 real world and we have, as we're speaking, efforts by 0:14:08.240 --> 0:14:12.560 the Secretary of Treasury Steve Anusian and Ambassador Robert Leichheiser 0:14:12.720 --> 0:14:17.199 to continue to engage the Chinese side, which we've been 0:14:17.200 --> 0:14:22.600 doing since they wanted this administration, seeking to address a 0:14:22.680 --> 0:14:25.840 couple of things. One is the massive trade imbalance we 0:14:25.960 --> 0:14:29.960 have with China, which costs US factories, jobs, wages, and 0:14:30.040 --> 0:14:35.880 the like. But also this pernicious practice of the transfer 0:14:36.080 --> 0:14:40.360 of US technology and electoral property to China, not just 0:14:40.520 --> 0:14:44.960 through theft, which most Americans understand that China engages in, 0:14:45.880 --> 0:14:49.080 but also through this pernicious practice of what's called forced 0:14:49.400 --> 0:14:54.320 technology transfer, whereby an American corporation which goes to China 0:14:54.840 --> 0:14:57.640 to try to sell into that market sincerely must be 0:14:57.680 --> 0:15:02.480 a minority partner and surrender their case. Okay, this is unacceptable. 0:15:02.560 --> 0:15:05.720 Well it's unacceptable, but but but Dr Navarro, there seems 0:15:05.760 --> 0:15:08.280 to be a shift and discourse and rhetoric. Here. We 0:15:08.280 --> 0:15:11.600 went after aluminum and steel, we backed away from that 0:15:11.680 --> 0:15:14.600 with all sorts of trading partners, and now we're going 0:15:14.680 --> 0:15:19.040 after a tariff theory to then go after the intellectual 0:15:19.080 --> 0:15:21.640 property debate. Why do we need to screw around with 0:15:21.720 --> 0:15:25.000 tariffs if the real issue is to go after intellectual 0:15:25.040 --> 0:15:29.920 property and forced technology transfer? Uh? Tom whot me? You 0:15:29.960 --> 0:15:34.000 first address the the aluminum steel because because when you 0:15:34.200 --> 0:15:38.000 dismissed that, I think is is U doesn't do justice 0:15:38.040 --> 0:15:41.680 to the situation. Um. What we've done with aluminum steel 0:15:41.760 --> 0:15:45.760 is imposed tariffs across the board. Uh and for a 0:15:45.880 --> 0:15:50.360 very temporary period through May one, we're giving a selecting 0:15:50.440 --> 0:15:56.320 number of countries the opportunity to negotiate a better deal 0:15:56.720 --> 0:15:59.000 that will be in the interest in national security. But 0:15:59.360 --> 0:16:01.960 and this is a egg butt, Tom, the proviser is 0:16:02.000 --> 0:16:05.440 going to be that any country that does not be 0:16:05.600 --> 0:16:09.840 subject to the tariffs have a quota or some other 0:16:09.880 --> 0:16:12.600 strict restrictions so that we can maintain the defense of 0:16:12.640 --> 0:16:16.520 our aluminum stealingscry. So there's no letting people out the door, 0:16:16.560 --> 0:16:19.960 willy nilly. This is a very calculated, important strategy for 0:16:20.000 --> 0:16:23.880 the American people with respect to your question of how 0:16:23.920 --> 0:16:28.240 to address the Chinese problem with respect to the the intellectual property. 0:16:28.280 --> 0:16:31.960 It's a two prompt strategy. One carreiffs, the other is 0:16:32.040 --> 0:16:37.480 investment restrictions, which Secretary Treasury Steven Nutin will be vailing 0:16:37.960 --> 0:16:40.520 in the not too distant future. Why do we need 0:16:40.520 --> 0:16:43.440 to caress the reason why we need fifty billion dollars 0:16:43.440 --> 0:16:46.520 worth of tariffs is because that's the harm that China 0:16:46.640 --> 0:16:49.160 does to us annually. You can think of it as 0:16:49.280 --> 0:16:53.600 a compensatory damages, and it is quite damaging. And it 0:16:53.680 --> 0:16:56.640 doesn't even take into account the hundreds of billions of 0:16:56.680 --> 0:17:00.200 dollars that have been estimated to cost the American bill 0:17:00.240 --> 0:17:05.240 annually from other types of transfer like cyberstp SO tariffs 0:17:05.280 --> 0:17:10.240 to recover damages. Investment restrictions basically focus on what is 0:17:10.640 --> 0:17:14.119 a very large pool of Chinese money coming into the 0:17:14.200 --> 0:17:20.680 United States and targeting strategically key technology industries, not so 0:17:20.720 --> 0:17:22.560 that they can make a rate to return like you 0:17:22.640 --> 0:17:25.639 and I would normally do in a free market, but 0:17:25.800 --> 0:17:29.399 you're doing that for strategic purposes to enhance their military 0:17:29.480 --> 0:17:33.159 security and their eco security at expense. If you're just 0:17:33.240 --> 0:17:35.480 joining us as Peter Navar with this Assistant to the 0:17:35.480 --> 0:17:38.600 President for Trade and Manufacturing policy, and we're thrilled to 0:17:38.680 --> 0:17:41.359 have Washington join us right now Bloomberg Daybreak in a 0:17:42.840 --> 0:17:45.919 FM Washington as well. We welcome all of you worldwide 0:17:45.920 --> 0:17:50.520 and across this UH nation. Peter Navarro, what's the common 0:17:50.600 --> 0:17:56.200 ground of Peter Navarro with Lawrence cut Love, Oh, Larry. 0:17:56.480 --> 0:17:58.199 Larry is a very good friend of mine, we go 0:17:58.320 --> 0:18:01.520 back more than a deck a when when I was 0:18:01.600 --> 0:18:04.360 on him, was on his show frequently in that Yeah, 0:18:04.359 --> 0:18:06.360 but he's a free trade guy. He's going to tell 0:18:06.440 --> 0:18:09.159 you stop at China is not evil, that there's a 0:18:09.280 --> 0:18:12.320 joint price to going after China where it's going to 0:18:12.359 --> 0:18:16.600 be the common ground with you with let's step back 0:18:16.680 --> 0:18:22.320 and look at four point program for the president's. President 0:18:22.320 --> 0:18:26.879 Trump's brilliant economic plan is deregulation. Check that box with 0:18:27.000 --> 0:18:30.040 Larry and I. Tax cuts, and check that box with 0:18:30.160 --> 0:18:34.040 Larry and I. Unleashing the energy sector so we're gonna 0:18:34.040 --> 0:18:37.240 have low cost for our manufacturers and consumers. Check that 0:18:37.280 --> 0:18:40.080 box with Larry and I. When it comes to trade, 0:18:40.520 --> 0:18:44.000 Larry has been quite vocal about the China issue. He 0:18:44.160 --> 0:18:47.720 has said, as we all have in this administration, that 0:18:48.000 --> 0:18:52.959 China basically needs to become a free trader, not an 0:18:53.040 --> 0:18:56.280 unfair trader. And so a lot of common ground with 0:18:56.480 --> 0:19:00.119 Larry Cudlow and I on the China issue. But and 0:19:00.200 --> 0:19:02.199 he said that it's gonna be great to be in 0:19:02.840 --> 0:19:05.800 with the President and have discussions where there's different points 0:19:05.800 --> 0:19:08.840 of view, and that's you didn't have different points whatever. 0:19:09.040 --> 0:19:11.520 And I will suggest as Dr Navars. You and I 0:19:11.520 --> 0:19:14.120 have known each other for well over a decade. You 0:19:14.400 --> 0:19:18.360 came advertised with your books. Now the Coming China Wars 0:19:18.800 --> 0:19:21.440 was one of your most successful books. You have a 0:19:21.560 --> 0:19:25.800 chapter They're Made in China, the ultimate warning label. Are 0:19:25.840 --> 0:19:28.480 you going to change with your policy with the President? 0:19:28.920 --> 0:19:34.359 That label made in China? I don't understand that question 0:19:35.520 --> 0:19:37.960 here and Tom, but my job here in the White 0:19:37.960 --> 0:19:43.000 House is to create manufacturing jobs for the men and 0:19:43.040 --> 0:19:46.199 women of America, doing the best things I can and 0:19:46.280 --> 0:19:49.560 providing the best possible advice I can to the President, 0:19:49.640 --> 0:19:53.880 and he gets advice from many different quarters. Key, President Trump, 0:19:54.119 --> 0:19:57.240 this is his vision, right, he is his own man. 0:19:58.280 --> 0:20:01.160 I will agree with that, that's true. What how can 0:20:01.200 --> 0:20:05.480 you think anybody that I somehow be able to push 0:20:05.560 --> 0:20:08.200 him in one direction or another. That's silly. He just 0:20:08.400 --> 0:20:16.600 wants advice. But Dr Devar, is his vision for a 0:20:16.640 --> 0:20:23.159 mercantilist America? Absolutely not, Tom. We are free traders. We 0:20:23.240 --> 0:20:26.439 are free traders. But what the President has said is 0:20:26.480 --> 0:20:29.520 that we have a structural problem in the global economy, 0:20:29.920 --> 0:20:33.800 massive trade imbalances which are fueled by unfair and non 0:20:33.840 --> 0:20:38.160 reciprocal trade. And the President Trump's vision, which is brilliant 0:20:38.560 --> 0:20:41.320 is the restructure of the global trading environment in a 0:20:41.359 --> 0:20:44.399 way where trade is pair and reciprocal. There's no reason 0:20:44.960 --> 0:20:48.200 why the United States has to face fire terrace when 0:20:48.240 --> 0:20:51.399 it sends its cars to China or Europe than those 0:20:51.800 --> 0:20:55.000 countries in that block does when it sends them here. 0:20:55.000 --> 0:20:56.760 It's silly. I mean, if you want to sell sell 0:20:56.760 --> 0:20:59.920 a car from Detroit to China, you pay a twenty 0:21:00.040 --> 0:21:02.840 five percent. If they want to sell a car from 0:21:02.840 --> 0:21:07.080 Shanghai here, it's two point five percent. And when you 0:21:07.200 --> 0:21:09.720 try to sell a guard to Europe you have a 0:21:09.840 --> 0:21:13.639 similar kind of the disadvantage. It's it's not quite of 0:21:13.680 --> 0:21:18.359 the same magnitude, but it's very significant. That's not fair trade. 0:21:18.680 --> 0:21:21.840 And and Tom, I mean, look, do you think that 0:21:21.920 --> 0:21:24.320 China should be stealing our I p of course not. 0:21:24.640 --> 0:21:27.480 Do you think that they should force Americans? But I 0:21:27.480 --> 0:21:31.000 would suggest respectfully that in the last two weeks, Start Navarra, 0:21:31.119 --> 0:21:35.359 we have conflated a tariff debate with an intellectual property debate. 0:21:35.440 --> 0:21:37.400 Let me do this, Peter naviar We want to continue 0:21:37.440 --> 0:21:40.000 this conversation, and we can do that by bringing in 0:21:40.040 --> 0:21:43.399 my colleague John Farrell. John Farrell with Peter Navarral coast 0:21:43.400 --> 0:21:46.359 to coast Dotor Navarre. We've spoken before, of course, and 0:21:46.400 --> 0:21:49.160 you've identified a problem that I think most economists would 0:21:49.160 --> 0:21:52.359 agree with, and that's China has cheated the international system. 0:21:52.359 --> 0:21:54.560 I think there's a real debate about the approach at 0:21:54.560 --> 0:21:57.480 the moment, about whether this approach actually brings China to 0:21:57.600 --> 0:22:01.080 the negotiation table or forced to China the other way. 0:22:01.160 --> 0:22:03.240 How confident are you that this actually brings them to 0:22:03.280 --> 0:22:07.680 the negotiating typo. Well, there there, we are already at 0:22:07.680 --> 0:22:12.720 the negotiating table. As the Secretary of the Treasury, Stevenutchen 0:22:12.760 --> 0:22:16.840 said over the weekend, he and Ambassador Robert Leightheiser actively 0:22:16.880 --> 0:22:19.960 engaged with the Chinese side. Add we have been engaged 0:22:19.960 --> 0:22:23.240 with the Chinese side since day one of this administration. 0:22:23.320 --> 0:22:27.880 Remember in April there was the Mari Lago Summit. Then 0:22:28.200 --> 0:22:31.760 a hundred days later we revisited these issues, and all 0:22:31.760 --> 0:22:34.200 along the way we've been talking. But the problem is 0:22:34.520 --> 0:22:38.000 talk isn't cheap with the Chinese side. It's been very expensive. 0:22:38.280 --> 0:22:42.640 And the history of dialogue with the Chinese, precisely over 0:22:42.680 --> 0:22:45.720 these issues dates back to two thousand three and the 0:22:45.760 --> 0:22:51.320 Bush administration, when the Bush administration instituted these annual dialogues 0:22:51.400 --> 0:22:53.840 with the Chinese. They went on for every year right 0:22:53.920 --> 0:22:57.640 up until the Trump administration, and all of its happened. 0:22:57.760 --> 0:23:00.639 Is the deficit with China has swelled Olden. They just 0:23:00.720 --> 0:23:04.160