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

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Speaker 2: As you know our top story worldwide, President Donald Trump

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Speaker 2: and leashing a major tariff push, imposing levies on all

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Speaker 2: of America's major trade partners. The COMMA Secretary Howard Latnik

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Speaker 2: playing a key role in President Trump's tariff announcement just

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Speaker 2: last night. The COMMA Secretary joins us now for more.

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Speaker 2: Mister Secretary, thank you for making time for us on

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Speaker 2: a busy morning for you and the team appreciate it.

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Speaker 2: As always, Let's talk about those deadlines those dates. Baseline

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Speaker 2: tariff start on April fifth, higher tarif star on April ninth.

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Speaker 2: What happens between now and then.

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Speaker 1: Well it really We are talking to all the trade ministers,

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Speaker 1: but nothing really happens between now and then. What CEOs

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Speaker 1: are thinking about is, finally, let's think about building in America.

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Speaker 1: You've got almost five trillion dollars of commitments coming to America.

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Speaker 3: To build their factories.

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Speaker 1: That number is only going to grow as people realize

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Speaker 1: it's time to bring manufactured bring home to America, where

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Speaker 1: the greatest economy and the greatest market in the world is.

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Speaker 1: It's time for America to stop taking care of every

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Speaker 1: other economy in the world and building them up. Let's

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Speaker 1: build the American economy up. Let's build American GDP, and

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Speaker 1: you're going to see great growth from America.

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Speaker 2: Mister Secretary, as you know, capitals around the world watching

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Speaker 2: this program right now wants to understand what they can

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Speaker 2: do between now and then to avoid those tariffs. What

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Speaker 2: do they need to do. Have you communicated any metrics

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Speaker 2: to them, whatsoever.

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Speaker 1: Well, we've been talking to the trade ministers of the

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Speaker 1: major trading partners for more than a month and we've

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Speaker 1: been talking to them, and so you have to understand,

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Speaker 1: and this is what's difficult for your audience to understand.

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Speaker 3: That tariffs are easy to understand.

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Speaker 1: Right, we have a two and airf percent tariff on autos,

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Speaker 1: and Europe has a ten percent tariff, and other people

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Speaker 1: have twenty percent or fifteen percent tariff, and that's sort

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Speaker 1: of easy, so they.

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Speaker 3: Can all come down.

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Speaker 1: But it's the non tariff trade barriers that are the difference.

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Speaker 1: Some countries have that and they take that that tax

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Speaker 1: of twenty percent and they use it to subsidize the

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Speaker 1: production of their domestic industries. That's why we can't sell

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Speaker 1: cars there because they give a rebate either they give

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Speaker 1: it directly. One country told me yesterday that they give

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Speaker 1: it directly to their car manufacturer to make their cars cheaper.

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Speaker 3: That's why they sell successfully and we don't.

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Speaker 1: Others take the money and use it and give cheap

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Speaker 1: energy costs to this production. And that's why the steel industry.

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Speaker 1: Why is everybody else so good at steel and we're not.

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Speaker 1: It's because their governments subsidize it. So we really need

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Speaker 1: to change the way trade works around the world. It's tariffs,

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Speaker 1: but don't get confused that these non tariff trade barriers,

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Speaker 1: they are the monster that needs to be slaved.

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Speaker 2: You've been consistent about this argument. Subsidized production, manipulated currencies,

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Speaker 2: and trade barrier is something the President addressed just last night.

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Speaker 2: Can we just sit on the numbers just for a moment,

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Speaker 2: the EU twenty percent, twenty four percent on Japan, thirty

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Speaker 2: four percent on China. Just what exactly was the methodology

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Speaker 2: to go through all those different barriers to entry that

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Speaker 2: you want to knock down.

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Speaker 4: How did you come up with these numbers?

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Speaker 1: Well, the Council of Economic Advisors, you know, the PhD

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Speaker 1: economists of the administration, coupled with USTR, the United States

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Speaker 1: Trade Representative. They publish a book called Trade Barriers about

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Speaker 1: this thick right, and they've been analyzing for decades all

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Speaker 1: of these different tools that these other economies use to

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Speaker 1: hurt America.

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Speaker 3: Right.

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Speaker 1: They won't take our corn in India, they won't take

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Speaker 1: our beef almost anywhere, it's unbelievable. They won't take our

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Speaker 1: agricultural products. They just treat us badly because we've allowed

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Speaker 1: them to treat us badly.

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Speaker 3: And when you finally go back at them and say

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Speaker 3: this is it's got.

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Speaker 1: To end, it's going to be tough for them because

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Speaker 1: they've built their whole social network, their whole economies on

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Speaker 1: basically exploiting America. And Donald Trump has said it's time

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Speaker 1: for America to change that. It's going to be difficult

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Speaker 1: for them to change that. But eventually America is going

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Speaker 1: to be treated fairly and the production of American factories

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Speaker 1: is going to be incredibly strong growth, and you're going

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Speaker 1: to see that growth reverberate through GDP. Remember, people forget

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Speaker 1: the d gross domestic production. If you buy a foreign

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Speaker 1: made Toyota, that is not domestic production. Making a car

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Speaker 1: in America that's domestic.

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Speaker 4: It's a secritificate.

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Speaker 2: Just sit on the methodology just for a bait longer

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Speaker 2: and address it directly. This is what we understand, what

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Speaker 2: most people understand.

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Speaker 4: You did that.

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Speaker 2: Essentially, you divided the country's trade surplus with the United

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Speaker 2: States by the total exports and then divided the number

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Speaker 2: by two and produce this discounted rate. If you're a

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Speaker 2: trade partner right now and you've just watched how America's

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Speaker 2: put together that policy, how are you meant to negotiate

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Speaker 2: with that?

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Speaker 4: What are those countries meant to say? What are they

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Speaker 4: meant to do?

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Speaker 1: The countries understand that their trade policies were exploited, an

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Speaker 1: exploitation of America.

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Speaker 3: Everybody understands.

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Speaker 1: One country actually said to me, I was amazed that

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Speaker 1: we were able.

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Speaker 3: To get away with it for this long. I mean,

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Speaker 3: imagine that's.

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Speaker 2: Because I never say this on the record. You've got

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Speaker 2: the potential, the option, the ability right.

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Speaker 4: Now to share. They're not going to say it on

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Speaker 4: the who's saying that to you?

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Speaker 3: Come on? Oh? Stop?

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Speaker 1: I mean the country One country told us that they

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Speaker 1: give the subsidy to the car companies. Another country admitted

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Speaker 1: that they give their subsidy to their steel companies. I mean,

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Speaker 1: they're not going to repeat it on here. What's on

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Speaker 1: here is that this is going to change. That it's

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Speaker 1: time for these things to change and going to be

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Speaker 1: more fair, and America is going to do well. And

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Speaker 1: in the middle of that time, all the factories are

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Speaker 1: going to come back to America. You're going to see

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Speaker 1: an enormous number of factories come back to America, or

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Speaker 1: you're going to.

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Speaker 3: See incredible change globally.

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Speaker 1: It's going to take time, but the factories are going

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Speaker 1: to be built in America.

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Speaker 3: That's the most important thing.

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Speaker 1: Donald Trump wants to see steel, an aluminum made.

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Speaker 3: In America so we could defend ourselves.

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Speaker 1: He's going to want to see pharmaceuticals made in America.

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Speaker 1: Who on your audience doesn't want us to make the

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Speaker 1: ingredients for pharmaceuticals Todaybody ever ask themselves why the ingredients

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Speaker 1: for our drugs should be made in China? Why is

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Speaker 1: that that's not cheap labor, that's factor, that's high tech

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Speaker 1: factories in China. Why because their government helped create it.

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Speaker 1: They created cheap goods there, they oversupply them, They drive

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Speaker 1: the capitalist America who don't think like this out of business,

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Speaker 1: and then they make it in China, and Donald Trump

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Speaker 1: has said, I've.

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Speaker 2: Had nothing, Secretary, most people are totally agree with you.

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Speaker 2: They would totally agree with you because China is an adversary.

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Speaker 2: It is not a partner for the United States. Europe

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Speaker 2: would make a very different argument. And Europe might be

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Speaker 2: wondering this morning why they're being thrown into the same

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Speaker 2: buncket as the Chinese. What explanation can you give them?

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Speaker 1: Europe does not treat our products fairly. They do not

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Speaker 1: treat our companies fairly. They treat themselves incredibly well, to

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Speaker 1: the detriment of the United States of America. Right, it

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Speaker 1: is time for them to treat us fairly. And that

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Speaker 1: is the point. This is not it's not free and

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Speaker 1: fair trade. Their tariffs are higher, the non tariff trade

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Speaker 1: barriers are incredible. Like I'd asked you, why don't they

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Speaker 1: take our beef? Why don't they take our agricultural products?

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Speaker 1: Why because they don't want them? Because they want to

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Speaker 1: make the money themselves. Why is it okay for every

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Speaker 1: other country to feel this way?

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Speaker 3: And it's not okay for America. I tell you why.

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Speaker 3: Because we were the world's piggybank.

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Speaker 1: And Donald Trump has said our thirty six trillion dollar deficit,

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Speaker 1: our one point two trillion dollar trade deficit one point

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Speaker 1: two trillion dollars.

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Speaker 3: We buy other.

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Speaker 1: People's things more than we sell them ours. Is got

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Speaker 1: to be rebalanced. It's a national emergency. Let's fix America

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Speaker 1: and we can.

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Speaker 5: Mister Secretary, for you, it's beef for the president. I

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Speaker 5: know it's Ford and Berlin's, but there are products that

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Speaker 5: Europe takes, things like LNG, things like Microsoft services. Do

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Speaker 5: you want to see balance trade product by product?

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Speaker 3: No, no, no, it's it's not product by product. It's

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Speaker 3: it's a big macro issue. Okay.

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Speaker 1: Fairness comes when one decides that they can stop. They

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Speaker 1: can't get away with it any longer. So let's make

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Speaker 1: a great deal with the United States of America. Okay,

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Speaker 1: they've got core issues. They have a that tax of

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Speaker 1: twenty percent or twenty Europe has twenty one percent. I mean,

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Speaker 1: so when our goods are sold there, we paid twenty

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Speaker 1: one percent.

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Speaker 3: They say everybody pays that, and then they.

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Speaker 1: Use that money to beat us down in other ways.

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Speaker 3: I mean, come on, we need to have.

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Speaker 1: Fair trade macro, not product by product. But I think

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Speaker 1: the way Donald Trump looks at it is country by country,

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Speaker 1: and what's going to happen is you're going to see

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Speaker 1: domestic production grow.

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Speaker 3: You're going to see interest rates come down.

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Speaker 1: In America. You're going to see growth in America. Great

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Speaker 1: jobs in America. Robotics he's going to come to America.

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Speaker 1: It's going to replace cheap labor overseas. Robots can make things,

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Speaker 1: you know what. The job there's going to be mechanics

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Speaker 1: who fix robots, kind of like a high end BMW robot,

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Speaker 1: so are going to need to be fixed and those

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Speaker 1: jobs are going to be high paying jobs and they're

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Speaker 1: going to be here.

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Speaker 3: We're tired of them being overseas.

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Speaker 5: For some countries, there's the ten percent base. That's the

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Speaker 5: only levee that they were hit with yesterday. I'm think,

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Speaker 5: give you United Kingdom and think of Australia. But those

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Speaker 5: countries have a trade surplus with the United States.

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Speaker 4: So why put the terrified.

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Speaker 1: Well, I think the President understands that all of these countries,

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Speaker 1: even if they have a trade surplus, if you dig

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Speaker 1: into it, like for instance, the UK, they are trade

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Speaker 1: surplus counts that they have this London Medals exchange.

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Speaker 3: And so gold and silver bullion going in counts. I mean,

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Speaker 3: come on, that doesn't really count.

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Speaker 1: So and Australia, which is a wonderful partner of ours,

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Speaker 1: they buy a lot of our planes, right, and if

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Speaker 1: you buy our commodity gas, I mean, that's really what

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Speaker 1: you need, not really what we need to sell you.

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Speaker 3: It's not the same.

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Speaker 1: So the President decided, why don't we have a baseline

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Speaker 1: of ten percent to really understand that everybody needs our economy.

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Speaker 1: Our economy is the magnet of the world.

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Speaker 3: Everybody needs our economy.

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Speaker 1: Let's them pay coming in and let's change that deficit

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Speaker 1: of one point two trillion dollars and let's make America's

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Speaker 1: economy grow.

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Speaker 3: And let's balance that out. Let's fix that first, and.

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Speaker 1: Then we'll go and readdress the rest of the world.

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Speaker 1: But we need to fix our trade deficit one point

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Speaker 1: two trillion dollars.

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Speaker 3: It's unbelievable.

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Speaker 1: Why we don't have those jobs and the rest of

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Speaker 1: the world does.

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Speaker 5: Treasury Secretary Scott Besson told me last night, this is

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Speaker 5: a ceiling. Potentially we can see a different floor. Are

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Speaker 5: you prepared to negotiate all of these rates? Is this

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Speaker 5: truly the start of a negotiation?

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Speaker 1: Well, it's the start of a rebalancing of the way

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Speaker 1: the world works. I agree with the Secretary that our

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Speaker 1: view is that the only way these rates are going

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Speaker 1: up is if countries decide to retaliate. But why would

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Speaker 1: you retaliate against your biggest client, your biggest clients is

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Speaker 1: I want to reorder things. I mean, the United States

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Speaker 1: of America is the largest client in the world. And yes,

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Speaker 1: of course the countries are going to talk to us,

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Speaker 1: but they talk too casually. They always talk about their

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Speaker 1: tariff rates. I mean it's it's like they say, oh,

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Speaker 1: I'm going to cut my tariff.

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Speaker 3: Right. You think the reason we don't sell.

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Speaker 1: A car is because Europe charges a ten percent tariff

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Speaker 1: and we were only charging two and a half.

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Speaker 3: That was outrageous. But the key is they have.

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Speaker 1: All these rules, rules and rules and rules. Like one

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Speaker 1: of my favorites is the Koreans. When we made a

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Speaker 1: deal with them in twenty twelve, we took their cars, right,

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Speaker 1: Kia and Hundai, and we were going to sell.

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Speaker 3: Agricultural products to them, right.

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Speaker 1: And when McDonald's went to send in French fries, they wouldn't.

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Speaker 3: Let them go in because we couldn't.

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Speaker 1: Prove the origin of the potato I mean, you don't

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Speaker 1: understand the scale and depth of how they keep our

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Speaker 1: products out. And Donald Trump is I've had enough. We

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Speaker 1: are going to be treated better. America is going to

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Speaker 1: be treated better, and that starts.

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Speaker 2: Today, missus Sancrigary, Why exactly wasn't Russia on that list yesterday?

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Speaker 1: Because we have sanctions against Russia, North Korea, Belarus, and Cuba,

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Speaker 1: and so we're not supposed to be trading with them.

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Speaker 4: Thanks for clearing that up.

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Speaker 2: The additional question that other people had too about Mexico

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Speaker 2: and Canada, they were also noticeably absent.

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Speaker 1: Why would they absent, Well, they are operating under a

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Speaker 1: rule that was set on for fentanyl right that they

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Speaker 1: needed to close the border and stop fentanyl. And what

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Speaker 1: that rule is that USMCA, right, the major trading is exempt, right,

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Speaker 1: and the other products that they do have a twenty

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Speaker 1: five percent tariff when that is resolved, So we're not

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Speaker 1: going to double counted.

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Speaker 3: That's just not the way it works.

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Speaker 1: When that's resolved, they will fall into a model like this.

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Speaker 1: But I think USMCA in the order, USMCA continues to

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Speaker 1: be exempted, so car parts, for instance, are don't come

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Speaker 1: with a tariff. If they end up being finished in

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Speaker 1: American car. So if you're building your car in America

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Speaker 1: and you're getting parts from Canada and Mexico, that's fine.

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Speaker 3: The American cars still come with no.

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Speaker 4: Tarr Okay, that's how full.

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Speaker 2: The additional question we had on just a few numbers

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Speaker 2: because we're all trying to make sense of this in

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Speaker 2: real time, and you've got the numbers. What's the tariff

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Speaker 2: on China? Now, the complete tariff including everything? What is

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Speaker 2: that number?

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Speaker 3: Now?

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Speaker 1: Well, there was a twenty percent tariff because they continue

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Speaker 1: to make the ingredients for fentanel and send them out right,

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Speaker 1: and those ingredients have the highest subsidy rate in China,

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Speaker 1: meaning the Chinese government is pay these factories to make

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Speaker 1: these goods that the ingredients for fentanyl, which is killing Americans. Right, So,

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Speaker 1: Donald Trump, twenty percent taff on that and now the

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Speaker 1: regular trade deficit number, right, the analysis by the Council

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Speaker 1: of Economic Advisors and the United States Trade Representative, we

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Speaker 1: have a thirty four percent TAFT. So it's fifty four percent.

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Speaker 1: But when they stop making the ingredients for fentanyl, and

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Speaker 1: I want to point out in twenty nineteen, President she

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Speaker 1: told President Trump that he would put the death penalty

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Speaker 1: on anyone who made fentanyl, and now he's actually subsidizing them.

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Speaker 3: And that's just it's just so so so.

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Speaker 1: Wrong that Donald Trump is just he's not going to

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Speaker 1: stand for it, and he's got to hit them with

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Speaker 1: the only thing.

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Speaker 5: You get, Secretary Lutnik, which is economy from China as well.

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Speaker 4: On China as well.

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Speaker 5: What about the three oh one terrors that were put

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Speaker 5: in place under Trump one point zero and then carried

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Speaker 5: on to the Biden administration, it's about twenty five percent.

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Speaker 5: Are those still in place? Do they get added to

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Speaker 5: this cumulative number?

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Speaker 1: They do, indeed, but those are on specific product segments

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Speaker 1: and those still are as well.

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Speaker 3: Autos are not. So we're talking about seventy nine.

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Speaker 5: So we're talking about seventy nine percent for some imports cumulative,

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Speaker 5: we're talking about a seventy nine percent tariff from China.

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Speaker 3: Is that accurate.

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Speaker 1: On certain products? That could be true? Sure, But they've

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Speaker 1: got to stop the U eight. All they have to

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Speaker 1: have is a phone call. All they have to have

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Speaker 1: is a phone call from President She to President Trump

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Speaker 1: saying I'm going to end fentanyl production that's killing Americans,

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Speaker 1: and it drops twenty percent. I mean, that's a pretty

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Speaker 1: inexpensive phone call.

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Speaker 3: But you have to make the decision.

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Speaker 1: You got to stop killing Americans, and so far they

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Speaker 1: haven't made that decision.

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Speaker 3: Shocking, but they haven't made that decision. And you really

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Speaker 3: got to think about that for a minute. Think about

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Speaker 3: that for a minute.

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Speaker 1: A phone call would save them twenty percent on all

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Speaker 1: their products, but they'd have to stop making the ingredients

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Speaker 1: of fentanyl, and they refuse outrageous.

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Speaker 5: Has your counterpart reached out to set up that phone

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Speaker 5: call between President Trump and Shujipeing?

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Speaker 3: You know President Trump and President.

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Speaker 1: She they have they're not going to be when their

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Speaker 1: phone call gets made.

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Speaker 3: I don't think they're asking me to set it up.

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Speaker 3: I think that's above me.

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Speaker 4: Missus Secretary.

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Speaker 2: Does that tell you something about maybe the lenfor is

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Speaker 2: you think you have perhaps you don't have over the Chinese,

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Speaker 2: the fact that they aren't reaching down, they aren't doing

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Speaker 2: those things, despite the fact you've put taras up as

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Speaker 2: much as you have.

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Speaker 3: Well we'll see.

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Speaker 1: Remember these tariffs are just going into place, and you know,

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Speaker 1: I think they will have that phone call and they

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Speaker 1: will have lots of conversation together. I think for me,

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Speaker 1: The greatest thing for me is that Donald Trump is

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Speaker 1: sitting behind the resolute desk in the Oval Office, and

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Speaker 1: he is the greatest deal maker, and he will decide

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Speaker 1: how he wants.

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Speaker 3: To play his hand.

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Speaker 1: But the way he's played his hand now is he's

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Speaker 1: been talking about this for thirty five years. He wants

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Speaker 1: to reorder trade, to have the world stop exploding us,

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Speaker 1: to bring the factories back, to.

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Speaker 3: Bring employment back.

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Speaker 1: You know, no one thought about when NAFTA, which he

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Speaker 1: called yesterday the worst trade deal ever. When NAFTA did

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Speaker 1: it gave Canada and Mexico sort of the economic right

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Speaker 1: to be a state of the United States without paying

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Speaker 1: federal tax and without respecting the Constitution. But you could

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Speaker 1: build in Mexico and drive to Texas and build.

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Speaker 3: In Canada, just drive across the border.

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Speaker 1: Was all fine and no, you know, economically equal to

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Speaker 1: being Alabama and Georgia.

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Speaker 3: And so what happened is.

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Speaker 1: Our manufacturing left America and put those Americans out of jobs.

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Speaker 1: And Donald Trump wants to bring back factories, bring back

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Speaker 1: those jobs, and they can come back. Five trillion dollars

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Speaker 1: worth of commitments to bring back those jobs is pretty

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Speaker 1: unbelievably impressive.

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Speaker 3: And that's what Donald Trump's capable of.

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Speaker 2: Also impressive is the sell of this morning and a

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Speaker 2: big question the market's asking how much pain you're willing

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Speaker 2: to tolerate. The SMP's down by three p seven percent.

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Speaker 2: The dollar is being sold quite aggressively against the euro.

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Speaker 2: Was saying one of the biggest moves we've seen in

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Speaker 2: the last decade, mister secretary, how much pain are you

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Speaker 2: willing to tolerate? How much market pain are you willing

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Speaker 2: to tolerate?

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Speaker 1: Donald Trump has focused on the economic pain that the

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Speaker 1: United States of America has suffered over decades since NAFTA,

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Speaker 1: ninety thousand factories, not jobs, factories, five million high paying

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Speaker 1: jobs gone overseas. He's focused on the US worker and

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Speaker 1: the US economy. And what's going to happen is people

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Speaker 1: are going to realize it is the great American economy

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Speaker 1: that is the winner here, and anyone who doubts it,

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Speaker 1: and anybody who shorts Donald Trump or anybody who doubts

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Speaker 1: the strength and the power of the American economy is

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Speaker 1: making a foolish bet.

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Speaker 3: Sure, importers are going.

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Speaker 1: To have a tough time figuring out what to do,

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Speaker 1: because they went and found the cheapest production in the world.

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Speaker 1: It's time to bring that production home, to have the smart,

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Speaker 1: amazing people who run American companies figure it out, bring

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Speaker 1: robotics back to America. And I would say that United

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Speaker 1: States domestic growth is going to have the greatest resurgence

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Speaker 1: ever under Donald Trump.

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Speaker 3: And that's what he has set in motion yesterday.

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Speaker 2: You'll accept it takes time to engineer a supply side response, though, sir,

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Speaker 2: and in the mad time you can see bad things happen.

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Speaker 4: Do you accept that?

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Speaker 3: Well, what I can accept.

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Speaker 1: Of course, takes time to build factories, but companies understand

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Speaker 1: how to do it, they will do it. The United

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Speaker 1: States of America is the greatest economy in the world.

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Speaker 3: People have to do business with it.

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Speaker 1: The rest of the world will bring down their trade barriers,

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Speaker 1: and you'll see a great resurgence in our ability to

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Speaker 1: sell agriculture overseas. You'll see factories being built here and

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Speaker 1: that factory production will be faster. So sure, there will

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Speaker 1: be a reb balancing of those who make things in

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Speaker 1: cheap labor markets figuring out how to make them here.

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Speaker 1: But ultimately speaking, and I think in much less time

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Speaker 1: than you think, the world will re order itself will

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Speaker 1: figure it out, and the United States growth rate will

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Speaker 1: turbocharge compared to the rest of the world.

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Speaker 3: We've been too close to them because we've been you know,

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Speaker 3: our presidents have been presidents of the world. And Donald

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Speaker 3: Trump ran on the policy that he.

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Speaker 1: Was going to be the president of the United States

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Speaker 1: of the workers of the United States, and he was

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Speaker 1: going to place American workers first. And that's what he

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Speaker 1: did yesterday. And that's what everybody's feeling. Those workers have

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Speaker 1: been disrespected and now they're going.

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Speaker 3: To be respected.

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Speaker 4: Missus.

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Speaker 2: Secondar you just the final question, if we might any

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Speaker 2: call schedule for today with the Europeans to those negotiations

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Speaker 2: start this morning immediately.

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Speaker 4: Can you give us a sense of things.

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Speaker 1: Absolutely, we are our teams are talking to all the

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Speaker 1: great trading partners today and we are available for our

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Speaker 1: great trading partners every day.

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Speaker 3: It is time for them to do deep soul.

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Speaker 1: Searching of how they treat us poorly and how to

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Speaker 1: make it right.

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Speaker 3: It is time for them to do that.

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Speaker 1: That is going to be difficult for them because they've

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Speaker 1: taken advantage of us for so long.

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Speaker 3: They should just be disappointed that the free ride is over.

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Speaker 1: It's time for them to be realistic and to change

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Speaker 1: the way they look at the United States of America.

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Speaker 1: And I think that's going to happen starting today.

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Speaker 2: I think it's changing in real time, set in many ways.

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Speaker 2: Miss the Secretary, I appreciate your time. The US Commas

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Speaker 2: Secretary Hamut Latank on the trade tariffs announced overnight from

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Speaker 2: the United States of America.