WEBVTT - Ross Acquisition Corp Chairman, President & CEO Wilbur Ross Talks Tariffs  & Economy

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<v Speaker 1>Former Commerce Secretary of the United States, Wilbur Ross joining

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<v Speaker 1>us right now, who serve in the Trump administration. Prior

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<v Speaker 1>to that, he ran W L. Ross and continues as Chairman,

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<v Speaker 1>president and CEO of Ross Acquisition Corps. Mister Secretary, Great

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<v Speaker 1>to have you here on the program. Kind of fitting

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<v Speaker 1>that the G seven is talking about a lot of

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<v Speaker 1>those tariffs, tariffs that originated not only from the Trump administration,

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<v Speaker 1>but specifically from your department as well. We now have

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<v Speaker 1>an ability to look back over the last seven eight years.

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<v Speaker 1>Have those tariffs been effective?

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<v Speaker 2>Oh? I think they definitely have been in several regards.

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<v Speaker 2>One let everybody know that the President was serious about

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<v Speaker 2>fixing the balance of payments problem, and two that he

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<v Speaker 2>was willing to break with the tradition that prior presidents

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<v Speaker 2>had set up. So I think these president tariffs that

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<v Speaker 2>President Biden is putting in well really just an extension

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<v Speaker 2>of the thinking that we had before. The auto vehicle

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<v Speaker 2>tariff on electric vehicles, for example, we started and in

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<v Speaker 2>those days there weren't even any electric vehicles sold to

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<v Speaker 2>the US from China, and so it was easy to

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<v Speaker 2>get it into the agreement because it didn't hurt there.

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<v Speaker 2>Then exports, but it set the pattern, and I think

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<v Speaker 2>this is what's now being followed through.

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<v Speaker 1>There's been a big question as to what, if anything,

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<v Speaker 1>gets us to the point in our relationship with China

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<v Speaker 1>where maybe those tarrets could either be reduced or even eliminated.

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<v Speaker 1>How do you feel about the progress of our relationship

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<v Speaker 1>with the Chinese and whether we are going to get

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<v Speaker 1>to a point where it is more amicable.

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<v Speaker 2>Well, I don't think there's ever been proof that running

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<v Speaker 2>a big trade deficit with another country makes them a

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<v Speaker 2>true ally. I think that's one of the many fictions

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<v Speaker 2>that the so called free trade people had prompted over

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<v Speaker 2>the years. I think that it's essential that Biden took

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<v Speaker 2>the steps that he has taken. I wonder a little

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<v Speaker 2>bit why it took three and a half years to

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<v Speaker 2>get there, because China has been ramping up the ebs

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<v Speaker 2>for quite a while. But at least he's now doing it,

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<v Speaker 2>and I think that's good and it's consistent with trying

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<v Speaker 2>to create a better climate situation. But to do it

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<v Speaker 2>without hurting our balance of payments Secretary Ross.

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<v Speaker 3>President Trump floated lawmakers today higher tariffs in exchange for

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<v Speaker 3>lower taxes. Does that make logical sense, or does that

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<v Speaker 3>create a different economic problem.

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<v Speaker 2>Well, remember, tariffs go into the federal budget as receipts

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<v Speaker 2>every bit as much as taxes do, so in an

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<v Speaker 2>arithmetic sense, it's clearly correct that one could very well

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<v Speaker 2>offset the other. Prison Trump has always liked the idea

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<v Speaker 2>of tariffs as a revenue source, and that's why he

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<v Speaker 2>went with the idea of tariffs on products from day one,

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<v Speaker 2>rather than having quotas and if the country exceeds those quotas,

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<v Speaker 2>then putting in the tariffs. So he reviews it and

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<v Speaker 2>has viewed it partly as a revenue measure, but more

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<v Speaker 2>than that, it's to make a fair arrangement between the countries.

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<v Speaker 3>As a secretary, there seems to be a lot of questions, now,

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<v Speaker 3>is a Trump two point zero economic plan? Is that inflationary?

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<v Speaker 3>When we talk about tariffs, And there's a lot of

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<v Speaker 3>debate as to whether or not tariffs are inflationary or not.

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<v Speaker 3>But there's reduced immigration, which you could argue shrinks the workforce,

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<v Speaker 3>renewed tax cuts with more fiscal stimulus, and the questions

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<v Speaker 3>about fed independence.

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<v Speaker 2>What say you, Well, that's a whole lot of questions

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<v Speaker 2>fall in one question. So I'll try to answer them

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<v Speaker 2>one by one. Go back to the Trump years. There

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<v Speaker 2>was no big runaway inflation. So the idea that the

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<v Speaker 2>tariffs that we put in were somehow going to hurt

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<v Speaker 2>the working people charge them too much for goods proved

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<v Speaker 2>to be incorrect, despite the fact that we had unemployment

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<v Speaker 2>down below the four percent level. So there is no

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<v Speaker 2>evidence that the Trump tariffs really were inflationary. And second,

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<v Speaker 2>the reason for that is to some extent the other

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<v Speaker 2>countries absorb it themselves, that either the exporters or in

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<v Speaker 2>some cases the governments there providing them with subsidies. So

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<v Speaker 2>it's just not the same thing as the naysayers had anticipated.

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<v Speaker 2>That's not what the record shows.

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<v Speaker 1>That's the second.

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<v Speaker 2>Then I think your other question was about what does

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<v Speaker 2>that do to relationships. It seems to me that we've

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<v Speaker 2>done at least as much damage and relationship by constantly

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<v Speaker 2>provoking China, with Taiwan and with some of the other

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<v Speaker 2>actions that the government has taken. This administration's policy toward

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<v Speaker 2>China and frankly toward a lot of other countries has

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<v Speaker 2>been a little bit schizophrenic in that, on the one hand,

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<v Speaker 2>he sends Janet Yaleen he sends Anthony Blincoln, sends all

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<v Speaker 2>kinds of people over there to negotiate, and then he

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<v Speaker 2>keeps attacking them verbally. I think a better solution would

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<v Speaker 2>be Teddy Roosevelt's solution, speak softly and carry a big stick,

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<v Speaker 2>rather than speak loudly and carry a little stick.

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<v Speaker 1>Okay, are so I'm curious, mister a secretary, are you

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<v Speaker 1>still advising Donald Trump and his campaign and his potential

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<v Speaker 1>candidacy here for president?

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<v Speaker 2>Well, I'd certainly have been supporting him, both in terms

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<v Speaker 2>of my endorsement quite a few months ago and in

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<v Speaker 2>terms of monetary contribution. So yes, I'm very much in

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<v Speaker 2>favor of his reelection.

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<v Speaker 1>There's a meeting that was taking place earlier today in Washington.

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<v Speaker 1>The Business Roundtable hosted it. I know these meetings are

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<v Speaker 1>pretty standard during campaigns, they meet with both of other

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<v Speaker 1>major party candidates. Today was Trump's turn here. What is

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<v Speaker 1>the message that you would want the business community to

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<v Speaker 1>hear out of this Trump campaign as they decide what

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<v Speaker 1>the outcome might actually be?

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<v Speaker 2>Okay? Well, first of all, quite a few senior businesspeople

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<v Speaker 2>are in fact supporting Trump. A number of them formerly

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<v Speaker 2>had been much more in the free trade camp. Than

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<v Speaker 2>they are now because they've seen the actual results of

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<v Speaker 2>the Trump policies and they've seen the Chinese government and

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<v Speaker 2>others taking more control role of the private sector, and

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<v Speaker 2>that is worrisome to them. You probably saw that some

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<v Speaker 2>of them are moving big facilities to India, and others

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<v Speaker 2>are moving them to Vietnam, and quite a few are

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<v Speaker 2>moving them to Mexico. Yeah, so they're still looking for

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<v Speaker 2>low cost production, but they're being weaned a little bit

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<v Speaker 2>of the idea that you can have a really complicated

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<v Speaker 2>and really elongated supply chain.

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<v Speaker 3>Secretary one last question. Bill Gross, legendary bond King wrote

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<v Speaker 3>in an op ed in the Ft and he said

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<v Speaker 3>that Trump is the more bearish of the candidates for

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<v Speaker 3>treasuries is what he meant, simply because his programs advocate

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<v Speaker 3>continued tax cuts and more expensive things. Both candidates, the

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<v Speaker 3>idea are going to be negative for the fiscal deficit.

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<v Speaker 3>Budget deficit we can need to rise, but Trump will

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<v Speaker 3>be worse.

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<v Speaker 1>What do you say to that.

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<v Speaker 2>Well, I don't that's mister Gross's opinion. But the truth

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<v Speaker 2>is that deficits are running very, very high under President Biden.

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<v Speaker 2>The difference is that these measures, these expensures to the

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<v Speaker 2>public are putting money into the pockets for the most

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<v Speaker 2>part of people not working, as opposed to creating jobs

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<v Speaker 2>for them to fill. And I think that's part of

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<v Speaker 2>the reason why inflation has been as sticky as it is.

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<v Speaker 2>And as you know, the Federal Reserve just decided not

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<v Speaker 2>to make a cut because of worries about continued inflation.

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<v Speaker 2>I think it's inherently more inflationary to put out money

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<v Speaker 2>from the government that does not go to productive use

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<v Speaker 2>than it is to put out money that goes to

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<v Speaker 2>productive use. So I would argue that the inflationary precious

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<v Speaker 2>are much more likely to be severe under President Biden

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<v Speaker 2>than they would be under President Trump.

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<v Speaker 1>All right, mister Secretary, have to leave it there. I

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<v Speaker 1>appreciate you taking time for us while we're ross there

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<v Speaker 1>at the former US Secretary of Commerce