WEBVTT - U.S. Is An Importer, Not Exporter, Sec. Ross Says 0:00:06.320 --> 0:00:13.040 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:16.960 Jay Leye. We bring you insight from the best in economics, finance, 0:00:17.040 --> 0:00:23.520 investment and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.640 Bloomberg dot Com, and of course on the Bloomberg Ready. 0:00:33.640 --> 0:00:35.640 Please to say, a friend of this program and an 0:00:35.680 --> 0:00:37.879 old friend of mine, Danny Blanche Flack enjoyed us now 0:00:38.000 --> 0:00:42.000 Dartmouth College, professor of Economics and former member of the 0:00:42.159 --> 0:00:45.400 MPC at the Bank of England. Danny, your thoughts as 0:00:45.440 --> 0:00:49.360 we switched from seven to to six three at the 0:00:49.360 --> 0:00:54.720 b o E. Well that's really quite a surprise. So 0:00:54.840 --> 0:00:57.720 if you're Andy Haldane, you have to explain to me 0:00:57.960 --> 0:01:01.520 and to other connentators why last month and the month 0:01:01.600 --> 0:01:05.120 before you voted against a rate rise and since then 0:01:05.240 --> 0:01:08.480 the data of all worth, every piece of data that exists, 0:01:08.520 --> 0:01:11.600 has got worse. So the question simply is did you 0:01:11.640 --> 0:01:13.520 make a mistake then are you making a mistake now? 0:01:13.520 --> 0:01:17.280 Of both um, the answer clearly is that the economy 0:01:17.400 --> 0:01:21.319 is flowing. Industrial production figures got a pretty bad no 0:01:21.440 --> 0:01:24.760 way it grows at all, Brexit them having a major 0:01:24.800 --> 0:01:28.600 impact on investment so I'm haven't had chance. That's obviously 0:01:28.640 --> 0:01:32.320 a decision has just can't. But this is completely astonishing. 0:01:32.319 --> 0:01:34.480 And how you to possibly vote for a rate wise 0:01:34.959 --> 0:01:38.199 in these circumstances seems to me to be a major puzzle. 0:01:38.520 --> 0:01:40.600 Um And I asked this question, and I'm happy for 0:01:40.959 --> 0:01:43.640 anybody to call in and tell me. Tell me any 0:01:43.760 --> 0:01:47.120 data in the real world that actually sustains a claim 0:01:47.200 --> 0:01:50.360 that you should raise rates. There is none well, especially 0:01:50.400 --> 0:01:52.600 in the Indian Kingdom at the moment, Danniel. For our 0:01:52.640 --> 0:01:54.800 listeners that might not be familiar with the members of 0:01:54.800 --> 0:01:57.040 the Monetary Politicy Committee at the Bank of England, the 0:01:57.080 --> 0:01:59.800 two individuals that have been hiking or at least voting 0:01:59.800 --> 0:02:02.800 for great hike at the b O A Michael Saunders 0:02:02.840 --> 0:02:06.480 formerly of City Group, Ian McCafferty. These are the hawks 0:02:06.520 --> 0:02:08.360 on the Bank of England. We expect those two to 0:02:08.400 --> 0:02:11.840 pop up. Andy Haldane is not just the chief economist, Danny, 0:02:12.040 --> 0:02:15.760 He's been the chief due what's going on there when 0:02:15.760 --> 0:02:18.080 he wandered he made a very strange, strange speech the 0:02:18.120 --> 0:02:21.200 other day which had really nothing to do with Monty policy. 0:02:21.280 --> 0:02:24.080 I mean, I'm finding it pretty hard to understand. I mean, 0:02:24.200 --> 0:02:27.639 especially because of the bank failures in its forecast, to 0:02:27.760 --> 0:02:32.360 forecast wage growth, to forecast productivity. I'm trying to find 0:02:32.400 --> 0:02:35.560 where it says the reason that he voted for this rise, 0:02:36.280 --> 0:02:40.320 and I'm really afraid I'm struggling to see it. Um. 0:02:40.400 --> 0:02:44.000 Maybe maybe others can see, but I don't quite understand 0:02:44.040 --> 0:02:47.480 why he's changed his position. Um. I think it's a 0:02:47.480 --> 0:02:51.120 pretty embarrassing change because there's the question that everybody should 0:02:51.120 --> 0:02:53.680 ask him. Blasfere would like to ask you a single question, 0:02:54.080 --> 0:02:57.040 what data in the world A has been there and 0:02:57.080 --> 0:02:59.640 B has changed since he voted against one a month ago, 0:02:59.720 --> 0:03:03.160 And the answer is there is none. Just to bring 0:03:04.680 --> 0:03:06.600 got to jump in. Danny gotta say good morning to 0:03:06.639 --> 0:03:09.200 my car anchor, Tom Kane. I'm good money to you, Tom. 0:03:09.480 --> 0:03:11.840 The Bank of England, the consensus is that they slow 0:03:11.919 --> 0:03:16.560 down in the first quarter is temporary. That it's temporary. David, 0:03:16.560 --> 0:03:19.320 you've pushed against us to great criticism. The conservators love 0:03:19.360 --> 0:03:21.280 to go after you because you're doom and gloom and 0:03:21.600 --> 0:03:25.240 there's no economic growth for a spot spout. There wasn't 0:03:25.280 --> 0:03:28.480 even in the United States or substantial economic growth. But 0:03:28.639 --> 0:03:33.280 we are not seeing the blanche flower industry wages go up, 0:03:34.080 --> 0:03:37.440 and and I'm fascinated the United Kingdom, how you raise 0:03:37.600 --> 0:03:41.480 raids into flat or even negative real wages. Does that 0:03:41.520 --> 0:03:45.080 ever happen in monetary theory. No, So we've just kind 0:03:45.080 --> 0:03:47.800 of studied on it. The real wages today in the 0:03:47.920 --> 0:03:50.600 UK are six and a half percent below what they 0:03:50.640 --> 0:03:53.160 were in two thousand and eight, and the study has 0:03:53.160 --> 0:03:55.640 been done showing this is the worst performance of real 0:03:55.680 --> 0:03:58.320 wages in two hundred ten years of which we have data. 0:03:58.840 --> 0:04:02.160 So so basically the I've just found the paragraph it's 0:04:02.160 --> 0:04:07.160 a wing and a prayer. Um, everything's really bad. But honestly, boss, honestly, honestly, honestly, 0:04:07.200 --> 0:04:09.680 it's going to get better. It was erratic as due 0:04:09.680 --> 0:04:12.200 to the weather, it's due to who knows what sounds like, 0:04:14.120 --> 0:04:17.160 sounds like review, you know it's going to get better 0:04:17.360 --> 0:04:23.000 from ver erratic. Sorry, So let's make this a little 0:04:23.040 --> 0:04:26.640 bit more broader, Danny, that just seems to be willingness 0:04:26.680 --> 0:04:29.480 a month central bankers right now to get away from 0:04:29.480 --> 0:04:32.719 emergency policy settings. Let's be clear, they're at about fifty 0:04:32.720 --> 0:04:34.840 basis points at the Bank of England. The ECB is 0:04:34.839 --> 0:04:38.000 a negative forty basis points. Quite clearly, we don't have 0:04:38.040 --> 0:04:41.760 an economic situation that warrants an emergency policy setting on 0:04:41.800 --> 0:04:45.120 a global basis, Danny, So what are they doing and 0:04:45.320 --> 0:04:47.480 what do you think has really made them maybe a 0:04:47.480 --> 0:04:51.080 little bit more nervous about the future. Well, I don't know. 0:04:51.120 --> 0:04:53.640 I'm I'm reading this through. They say, we're they don't 0:04:53.680 --> 0:04:56.240 think there are benefits of waiting for additional information. That 0:04:56.400 --> 0:05:00.440 seems I mean, I think the obvious argument is that 0:05:00.520 --> 0:05:04.360 bankers want rates to be higher. They obviously realized that 0:05:05.200 --> 0:05:07.440 at some point they're they're going to need to cut 0:05:07.480 --> 0:05:10.000 them again. But this is this is this is the 0:05:10.040 --> 0:05:12.480 economics of making up things as you go along, and 0:05:12.640 --> 0:05:15.800 you raise rates and that's gonna because you worry about 0:05:15.800 --> 0:05:18.400 a recession. But by raising rates, you cause the recession. 0:05:18.720 --> 0:05:22.320 I mean that that's the reality. Um. I mean, if 0:05:22.360 --> 0:05:24.000 you if you look at what they said, there is 0:05:24.040 --> 0:05:26.880 absolutely nothing in what they say. They say, honestly, it's 0:05:26.880 --> 0:05:29.200 all going to get better, And we don't believe anything 0:05:29.240 --> 0:05:31.440 in the real world. We just know that things are 0:05:31.800 --> 0:05:34.040 fine and we can raise rates. Well that's just gibberish. 0:05:35.040 --> 0:05:39.440 Nothing in the data whatsoever to sustain that. Quickly here, professor, 0:05:39.480 --> 0:05:42.280 we've got to move on to important topics. But what 0:05:42.279 --> 0:05:45.920 what is the catalyst for central banks to cave in 0:05:46.640 --> 0:05:49.440 given this difficult data? How do they how do they 0:05:49.440 --> 0:05:52.680 get there and safe face? Well, obviously I think you're 0:05:52.680 --> 0:05:54.560 asking the wrong person. I mean, it has to be 0:05:54.640 --> 0:05:57.760 based on a forecast. It has to be that as 0:05:57.839 --> 0:06:02.880 unemployment moves to the lower everything in the past is 0:06:02.880 --> 0:06:06.760 going to generate for you wage growth and that's inflation. 0:06:06.800 --> 0:06:08.880 And you care about information, so you want to get 0:06:08.880 --> 0:06:10.960 your risk out here. Okay, first, but they've been saying 0:06:10.960 --> 0:06:13.560 that for the last ten years. We haven't seen any 0:06:13.600 --> 0:06:17.000 of that. It's complete misunderstanding of the labor market. Papers 0:06:17.040 --> 0:06:20.080 says exactly that. So I just think this is you know, 0:06:20.200 --> 0:06:22.880 these people are just very pulsing because they've they're stuck 0:06:22.880 --> 0:06:28.240 in the nineties seventies. No, no, FIFA is stuck in 0:06:28.240 --> 0:06:31.599 the nine seventies. And now for our global audience, we 0:06:31.640 --> 0:06:35.120 go to the important topic of the game. Professor Blanche Flower, 0:06:35.279 --> 0:06:38.680 would you explain why Gareth Bale is not playing for 0:06:38.760 --> 0:06:42.760 the United Kingdom in the World Cup. I mean, Wales 0:06:42.880 --> 0:06:46.680 can't even score against the Republic of Ireland, they're thrown out. 0:06:47.200 --> 0:06:50.760 Wouldn't England have a better chance against Germany and belgiumir 0:06:50.760 --> 0:06:53.440 in a couple of days if Gareth Bale was playing 0:06:53.480 --> 0:06:56.360 for them and not this this view of the nineties 0:06:56.480 --> 0:07:00.159 seventies of Wales or Scotland, the two Brits on this 0:07:00.600 --> 0:07:04.880 cool We'll find it extremely hard to explain why all 0:07:04.960 --> 0:07:08.400 four countries played together in the Olympics but in soccer 0:07:08.480 --> 0:07:11.440 they don't. So clearly having a bigger pool to pull 0:07:11.560 --> 0:07:15.400 from is better. But England ly speech tunis yet my 0:07:16.640 --> 0:07:18.640 team ain't there, just like the America. I want to 0:07:18.680 --> 0:07:20.920 ask a really important question and it's going to give 0:07:21.120 --> 0:07:23.120 Tom a little bit of an insight to the competitive 0:07:23.200 --> 0:07:26.480 nature of the United Kingdom. Um does the Welsh Danny 0:07:26.520 --> 0:07:32.600 Blanche Flyer support England when they play Panama this weekend? Uh? Well, 0:07:32.680 --> 0:07:36.960 Cardig didn't. Do you hear the hesitation? Hesitations are? Do 0:07:37.000 --> 0:07:41.000 you hear that? You love how that works? The rest 0:07:41.040 --> 0:07:43.280 of the world thinks we're friends. This is not how 0:07:43.320 --> 0:07:49.560 it works. Are you really going to root for Panama 0:07:49.640 --> 0:07:57.480 this weekend? Professor, No, I can't watch it. I just 0:07:57.600 --> 0:08:00.480 learned a lot. You know, folks, your work in here, 0:08:00.480 --> 0:08:02.320 and I'll tell you I just learned a lot about 0:08:02.360 --> 0:08:06.679 this disunited I'm so competitive, Professor Blanche Flower goal away, 0:08:06.800 --> 0:08:09.720 thank you so much. He's with Darkness College and ever John, 0:08:09.760 --> 0:08:13.320 I am learning so much about this idiocy. Isn't it ridiculous? 0:08:15.440 --> 0:08:18.640 Said Everyone outside the UK looks in and thinks it's 0:08:18.640 --> 0:08:21.160 a United Kingdom. I mean, when it comes to sport, 0:08:21.200 --> 0:08:23.520 it couldn't be more at this united And am I 0:08:23.640 --> 0:08:26.520 right if he said correctly that in the Olympics you're 0:08:26.560 --> 0:08:29.960 all in it together, but not Yeah, team g B, 0:08:30.200 --> 0:08:32.000 team Great Britain. But when it comes to when it 0:08:32.040 --> 0:08:35.920 comes to football, Michael Barr didn't know this until like 0:08:36.160 --> 0:08:39.080 a week ago. Ferrell, that's like the Olympics for the US, 0:08:39.160 --> 0:08:42.000 We're all in until it comes to Vane just David 0:08:42.040 --> 0:08:45.319 Blanche Flower pause. He will not support English? Can we go? 0:08:45.440 --> 0:09:03.800 Bloomberg headline, Flower, thank you. We need to draw your 0:09:03.800 --> 0:09:07.560 attention to Forbes magazine a number of days ago with 0:09:07.760 --> 0:09:12.520 a lengthy article on how Secretary of Commerce Wilbur Ross 0:09:12.520 --> 0:09:16.400 has trying to extricate himself from his investments as he 0:09:16.520 --> 0:09:20.640 joined the Trump administration. Now in conversation with our David Weston, 0:09:20.960 --> 0:09:24.280 here is Secretary Ross Bloomberg Television. As we talked with 0:09:24.320 --> 0:09:26.600 the man at the center of the United States trade policy. 0:09:26.679 --> 0:09:29.280 Secretary of Commerce Wilbur Ross coming to us today from 0:09:29.320 --> 0:09:32.320 Select USA Investment Summit in Washington. Thank you very much, 0:09:32.360 --> 0:09:35.920 Mr Secretary for being with us, well, thank you for 0:09:35.960 --> 0:09:38.680 having me. H. We all have been focusing in part 0:09:38.760 --> 0:09:40.319 on what the central bankers have been saying over the 0:09:40.360 --> 0:09:42.400 ECB meetings in Europe, and I'm sure you have been 0:09:42.440 --> 0:09:45.439 as well. And j Pal, the Fed chair, actually talked 0:09:45.520 --> 0:09:48.920 yesterday about the extent to which he's seeing businesses really 0:09:49.000 --> 0:09:53.080 looking at the trade tensions, frictions, even perhaps incipient war. 0:09:53.320 --> 0:09:54.840 Listen to what he had to say. I'm sure you 0:09:54.840 --> 0:09:56.120 know what it was, but listen to what he had 0:09:56.160 --> 0:09:59.920 to say. We have a very wide, wide range of 0:10:00.120 --> 0:10:02.720 context in the business world in the United States and 0:10:02.720 --> 0:10:05.880 around the world, and as we talk to them, uh, 0:10:05.920 --> 0:10:10.920 they continually and increasingly expressed concern over trade developments. Those 0:10:10.960 --> 0:10:13.200 concerns seem to be rising for the first time. We're 0:10:13.200 --> 0:10:18.960 hearing about decisions to postpone investment, postpone hiring so much 0:10:19.000 --> 0:10:20.640 a secondary You heard what he had to say. He 0:10:20.800 --> 0:10:23.599 is seeing really postponement of decisions to invest. One of 0:10:23.640 --> 0:10:25.760 the things that's been a priority for this administration. Are 0:10:25.800 --> 0:10:31.760 you seeing that now? I'm here at select USA, which 0:10:31.840 --> 0:10:36.680 is our big annual foreign direct Investment conference. We have 0:10:36.800 --> 0:10:41.960 over three thousand delegates here from sixties six foreign countries, 0:10:42.440 --> 0:10:46.800 and they are all here because they're interested in increasing 0:10:47.040 --> 0:10:50.920 their investment in the United States. And I believe over 0:10:50.960 --> 0:10:53.760 the next couple of days we will have some very 0:10:53.840 --> 0:10:58.560 big announcements to make about new transactions that these folks 0:10:58.640 --> 0:11:02.560 are entering into. So I don't think that that's true 0:11:03.040 --> 0:11:07.120 that there's some big change. I think the media have 0:11:07.280 --> 0:11:11.120 been very negative on the Trump administration. They pick out 0:11:11.240 --> 0:11:15.680 some little companies somewhere, then they say, oh, my goodness, uh, 0:11:15.720 --> 0:11:19.640 this guy is having troubles, and they extrapolate that into 0:11:19.760 --> 0:11:22.160 the whole country. Okay, fair enough, Mr. Second, Let's take 0:11:22.200 --> 0:11:24.600 one that's not a little company. Let's take Daimler, which 0:11:24.640 --> 0:11:27.040 is a big company that this this morning said because 0:11:27.280 --> 0:11:30.199 of the issues with China, they're taking down their profitiment 0:11:30.360 --> 0:11:32.400 and that, as you probably know, the stock price went 0:11:32.440 --> 0:11:34.480 down and took the stock six sounded round with it 0:11:34.600 --> 0:11:36.720 and actually took SMP futures with that with it. That's 0:11:36.720 --> 0:11:41.680 not a small company, sir, No, it's not. But I 0:11:41.720 --> 0:11:45.960 don't hear what we've done that hurt them. Well, what 0:11:46.080 --> 0:11:49.160 it is is the position in position by China of 0:11:49.200 --> 0:11:52.400 tariffs in response to what we've done on exporting SUVs 0:11:52.400 --> 0:11:54.880 from South Carolina to China, and that was in direct 0:11:54.920 --> 0:12:01.040 response to the actions we've taken, oh the Retalia and short. Well, 0:12:01.120 --> 0:12:06.320 naturally there's going to be some retaliation by the foreign company, 0:12:06.520 --> 0:12:10.400 but countries and they will try to pick out politically 0:12:10.520 --> 0:12:13.960 sensitive areas to deal with. But at the end of 0:12:13.960 --> 0:12:19.120 the day, we are a net importer, not a net exporter. 0:12:19.640 --> 0:12:24.880 And that means a very fundamental truth. Take China, they 0:12:24.880 --> 0:12:28.000 sell us around a half a billion, half a trillion 0:12:28.040 --> 0:12:31.640 dollars a year of goods. We only sell them around 0:12:31.679 --> 0:12:36.679 a hundred and fifty billion. That means once they put tariffs, 0:12:36.679 --> 0:12:40.520 if it went that far on the whole hundred and fifty, 0:12:40.600 --> 0:12:43.559 they have nothing more that they can do. We could 0:12:43.559 --> 0:12:46.640 go theoretically all the way up to the five hundred. 0:12:47.400 --> 0:12:50.720 That's not a very easy game for them to play. 0:12:50.920 --> 0:12:54.720 And it's similar ratios with the other countries. That's what 0:12:54.840 --> 0:12:58.600 President Trump means when he says that if it really 0:12:58.679 --> 0:13:01.520 does get to be a big war, we have many 0:13:01.600 --> 0:13:04.600 more bullets than any of these other countries right when 0:13:04.600 --> 0:13:07.920 it comes to tariffs, But there are other ways obviously 0:13:07.920 --> 0:13:10.840 of hurting imports non tariff barriers. And in the last 0:13:10.840 --> 0:13:13.920 stambout of China, actually what they specifically said was quantitative 0:13:14.000 --> 0:13:16.920 and qualitative so that terrifs are not the only way 0:13:16.920 --> 0:13:21.960 that they can retaliate. No, it's true, and it's nor 0:13:22.040 --> 0:13:25.640 are they the only way that we can retaliate. The 0:13:25.679 --> 0:13:29.800 truth is that China, Europe, a lot of other big 0:13:29.840 --> 0:13:34.400 countries have been using non tariff trade barriers for a 0:13:34.440 --> 0:13:39.040 long long time. They put on weird standards that it's 0:13:39.080 --> 0:13:43.000 impossible for American products to meet. They put in all 0:13:43.080 --> 0:13:48.199 sorts of elaborate and non science based restrictions. For example, 0:13:48.360 --> 0:13:52.880 some of these countries keep complaining, oh, we can import 0:13:53.040 --> 0:13:57.280 US beef because of mad cow disease. Well, do you 0:13:57.360 --> 0:14:01.040 think mad cow disease is really rampant in the US? 0:14:01.240 --> 0:14:04.640 I have been heard a report a bit in years. Similarly, 0:14:04.840 --> 0:14:09.240 some countries say, well, we can't import your chickens because 0:14:09.320 --> 0:14:12.360 of asion flew. Whence the last time you heard a 0:14:12.440 --> 0:14:16.239 case of asion flew in the United States. It's all nonsense. 0:14:16.800 --> 0:14:21.040 The truth is that they've been very protectionists. We have 0:14:21.160 --> 0:14:24.840 been very close to free market, and now that we're 0:14:24.920 --> 0:14:30.160 trying to defend ourselves against their bad practices, they're screaming 0:14:30.200 --> 0:14:34.160 and yelling. Well, they've been spoiled for many, many years 0:14:34.240 --> 0:14:38.200 and that game is over. And Mr Second, I really 0:14:38.240 --> 0:14:40.040 think there's no one who knows about the situation who 0:14:40.080 --> 0:14:42.920 would deny that China has been protectionists in all sorts 0:14:42.960 --> 0:14:44.920 of different ways. I don't think anyone would take issue 0:14:44.920 --> 0:14:47.840 with that in the media or otherwise. At the same time, 0:14:48.120 --> 0:14:50.600 what happens when there's a tension between on the one hand, 0:14:50.800 --> 0:14:54.000 growth and jobs, which was what the President's first order 0:14:54.000 --> 0:14:56.080 of business was tension between that on the one hand, 0:14:56.200 --> 0:14:59.320 and getting fairness and reciprocity. If you have to choose 0:14:59.360 --> 0:15:01.840 between the two, which you either have less trade and 0:15:01.920 --> 0:15:07.440 less growth and have it be fairer and more reciprocal, well, 0:15:07.560 --> 0:15:12.200 we wanted to be fairer and more reciprocal. Reciprocity is 0:15:12.240 --> 0:15:16.720 an important keynote to our trade policy. The question is 0:15:17.040 --> 0:15:19.760 how do you get there? And the only way we're 0:15:19.760 --> 0:15:25.560 gonna get foreign countries to lower their inordinate barriers is 0:15:25.600 --> 0:15:29.640 by making it more painful for them to continue those 0:15:29.680 --> 0:15:32.960 practices than to get rid of them. That's what this 0:15:33.080 --> 0:15:37.160 is all about. This is about an endgame that really 0:15:37.440 --> 0:15:43.040 is free, fair and reciprocal trade. It's not about trying 0:15:43.080 --> 0:15:45.800 to make money out of tariffs. So that's not really 0:15:45.840 --> 0:15:49.640 the endgame here at all. But we need something to 0:15:49.840 --> 0:15:54.120 induce changes in their behavior, and it's already happening and 0:15:54.320 --> 0:15:59.520 seal and aluminum. Once we put our tariffs on, suddenly 0:15:59.720 --> 0:16:04.040 you're up is taking safeguard measures all over the place 0:16:04.320 --> 0:16:07.760 to protect their border. They weren't doing that before we 0:16:07.880 --> 0:16:12.440 put the tariffs on. Japan had never had a trade 0:16:12.600 --> 0:16:18.480 enforcement group in matting their big government agency. Now they 0:16:18.520 --> 0:16:22.520 have the twenty person trade enforcement group. We're going to 0:16:22.720 --> 0:16:27.320 fix the problem of protectionism around the world, and we're 0:16:27.360 --> 0:16:30.400 going to fix it by making it more painful for 0:16:30.480 --> 0:16:34.800 those countries to do bad practices than to do the 0:16:34.920 --> 0:16:38.400 right thing, which is to lower the trade barriers and 0:16:38.520 --> 0:16:41.560 lower their tower and once againistrict. I don't think anyone 0:16:41.560 --> 0:16:44.680 would quibble with that as a goal, a laudatory goal. 0:16:44.960 --> 0:16:47.360 The question is, though, how much pain are we willing 0:16:47.360 --> 0:16:48.920 to suffer in order to get that done? Because the 0:16:48.960 --> 0:16:51.560 pain goes both ways, and for example, Deutsche Bank is 0:16:51.600 --> 0:16:54.440 out with estimates that in fact, a trade war actually 0:16:54.480 --> 0:16:57.040 could take three tents off of GDP growth. If you 0:16:57.120 --> 0:16:59.520 knew today that that was the price you had to pay, 0:16:59.680 --> 0:17:01.440 would be willing to pay it in order to get 0:17:01.440 --> 0:17:05.760 to reciprocal trade. Well, it's very hard to make an 0:17:05.760 --> 0:17:09.199 omelet if you don't break some eggs, and so we 0:17:09.359 --> 0:17:12.960 really have to. We have no choice but to change 0:17:13.240 --> 0:17:18.000 the way that these other Benese can in countries using 0:17:18.200 --> 0:17:22.920 unfair trade practices against us. We have to do it. 0:17:23.280 --> 0:17:26.720 It's unfortunate that it wasn't done at an earlier point 0:17:26.760 --> 0:17:30.120 in time. Would have been a lot simpler, a lot easier, 0:17:30.480 --> 0:17:34.160 and a lot less painful. But it's really important that 0:17:34.200 --> 0:17:38.919 we do it because we're talking about our future and 0:17:38.960 --> 0:17:41.440 that is more important than the growth goal, because, I mean, 0:17:41.840 --> 0:17:44.720 the Republicans came up with the President put forward a 0:17:44.800 --> 0:17:48.600 tax plan that really was growing GDP nicely. Are you 0:17:48.640 --> 0:17:50.720 getting a fair amount of that back in order to 0:17:50.760 --> 0:17:55.119 get to the reciprocal world that you want? But we 0:17:55.160 --> 0:17:58.440 don't think so. And uh, we think that you will 0:17:58.680 --> 0:18:03.960 continue to see very strong employment. The biggest problem most 0:18:04.000 --> 0:18:09.520 American companies have now is finding enough qualified labor to 0:18:09.720 --> 0:18:13.680 do the expansions that they're putting forward. That's why you're 0:18:13.720 --> 0:18:18.080 seeing all of these apprenticeship programs, all of these joint 0:18:18.119 --> 0:18:23.400 programs with local community colleges. Finding workers is the biggest 0:18:23.440 --> 0:18:28.880 problem right now for American industry, not anything else. Because 0:18:28.960 --> 0:18:34.040 we've cut the regulations, released those shackles. We've cut both 0:18:34.119 --> 0:18:40.600 individual and corporate taxes, making America a wonderful destination for 0:18:40.600 --> 0:18:45.000 foreign investment and direct US And that's why we have 0:18:45.200 --> 0:18:50.879 here at Select USA Summit, well but three thousand attendees. 0:18:51.400 --> 0:18:56.280 We have sixties six countries represented here. That's fifteen more 0:18:56.359 --> 0:19:00.720 countries than we had a year ago. We have Cabinet 0:19:00.800 --> 0:19:06.919 secretaries here, We've got fourteen ambassadors, US ambassadors to foreign countries. 0:19:07.400 --> 0:19:10.280 This is a real turnout, and we will be making 0:19:10.320 --> 0:19:16.440 some announcements about new foreign direct investment into the US. 0:19:16.440 --> 0:19:21.119 That's the real world, not the whiners who have criticized 0:19:21.240 --> 0:19:25.240 every single thing that the President has done. They said 0:19:25.240 --> 0:19:27.960 he'd never get a tax bill through, Well he did. 0:19:28.520 --> 0:19:30.919 Then they said, well, it won't do any good for 0:19:30.960 --> 0:19:35.679 the economy, that will only help rich people. Well, unemployment 0:19:36.119 --> 0:19:43.880 is that record lows um corporate enthusiasm, corporate optimism relatively 0:19:43.960 --> 0:19:50.080 all time highs, small business optimism, low unemployment overall, very 0:19:50.119 --> 0:19:55.719 low unemployment for women, very low unemployment for African Americans, 0:19:56.240 --> 0:20:00.359 very low unemployment for Hispanics. So anybody with thinks the 0:20:00.400 --> 0:20:04.880 economy is being wrecked simply doesn't know what they're talking about. No, Joe, 0:20:04.880 --> 0:20:06.919 please only us understanding. I was not suggesting all the 0:20:07.160 --> 0:20:09.040 economy is being wrecked. The question is is there a 0:20:09.040 --> 0:20:11.600 price being paid? Let me ask a specific question that's 0:20:11.600 --> 0:20:13.240 come up in the trade context, and that is the 0:20:13.320 --> 0:20:16.760 ZTE situation. I know that we're negotiations last night up 0:20:16.760 --> 0:20:18.879 in Capitol Hill. Do you believe that there would be 0:20:18.920 --> 0:20:21.600 a compromise that will allow ZT to continue to do 0:20:21.640 --> 0:20:26.560 business the United States? Well, there may very well be. 0:20:26.960 --> 0:20:30.639 The President and Secretary Minuchtion and I met with a 0:20:30.680 --> 0:20:35.480 bunch of Republican congressional leaders yesterday and that was one 0:20:35.480 --> 0:20:38.639 of the many topics that we covered. I think the 0:20:38.720 --> 0:20:43.239 important thing is to modify z TES behavior from what 0:20:43.320 --> 0:20:47.639 it was before. We have now taken over two billion 0:20:47.760 --> 0:20:51.440 dollars and finds out of them. For the first time ever, 0:20:51.960 --> 0:20:56.440 we've had the ability to implant into a country company 0:20:56.600 --> 0:21:01.879 that had violated sanctions our code of our Code of 0:21:02.600 --> 0:21:08.440 Export Control and we have unfettered access to the company 0:21:08.560 --> 0:21:12.879 in order to monitor it. If there are any further violations, 0:21:13.160 --> 0:21:15.800 we will shut them down just as we did before, 0:21:16.040 --> 0:21:18.600 and we have the power to do that. Okay. Finally, 0:21:18.640 --> 0:21:21.760 Mssion Secretary, there's been this issue about short selling some 0:21:21.880 --> 0:21:23.600 shares in a shipping company. I don't want to go 0:21:23.640 --> 0:21:25.359 into the details of that. Frankly, I'm not sure I 0:21:25.440 --> 0:21:27.639 fully understand them, but you've certainly had to talk about 0:21:27.640 --> 0:21:30.320 them plenty. I have a more general question. Many of 0:21:30.359 --> 0:21:33.240 us were surprised in fact that senior government officials are 0:21:33.280 --> 0:21:36.720 involved in short selling or derivatives of any sort. For example, 0:21:36.720 --> 0:21:39.480 here at Blueboard, we're not allowed to do that. In retrospect, 0:21:39.480 --> 0:21:41.119 given what you've been put through, would it be a 0:21:41.160 --> 0:21:44.159 better policy or rule to just say senior government officials 0:21:44.280 --> 0:21:48.479 shouldn't be engaged in things like short selling at all. Now, 0:21:48.720 --> 0:21:53.080 this is not what you would call a typical short sale. 0:21:53.160 --> 0:21:58.879 What happened some shares in one company we're not physically 0:21:59.080 --> 0:22:02.359 in my possession, and there was a whole process I 0:22:02.440 --> 0:22:05.720 had to go through to get them into possession so 0:22:05.800 --> 0:22:09.080 I could sell them. I had begun selling those shares 0:22:09.160 --> 0:22:12.440 the ones that I did have possession of months before. 0:22:13.160 --> 0:22:16.520 So when I learned about the new shares, wanted to 0:22:16.560 --> 0:22:19.200 close out that holding. What happened to be a company 0:22:19.240 --> 0:22:24.760 called Navigator, And it was when the shares were delivered 0:22:24.800 --> 0:22:29.320 to me my own shares, I used them to substitute. 0:22:29.400 --> 0:22:32.720 So there was no profit or loss on the so 0:22:32.800 --> 0:22:37.320 called short sale. It was simply a means of implementing 0:22:37.440 --> 0:22:40.840 a transaction, and then I had no gain or loss 0:22:40.920 --> 0:22:43.520 by change in the market. Please understand, there was nothing 0:22:43.520 --> 0:22:45.800 in my question. It's just anything improper had been done 0:22:45.880 --> 0:22:48.720 or anything that gotten gains, nothing like that. I'm actually 0:22:48.720 --> 0:22:50.879 asking a more basic question, sort of a concession to 0:22:50.920 --> 0:22:52.840 the shortness of life as it were. I mean, I'm 0:22:52.840 --> 0:22:54.240 sure it wasn't pleasant for you to even have to 0:22:54.280 --> 0:22:56.480 explain all this, wouldn't it just be better just have 0:22:56.520 --> 0:22:59.600 a simple rule that said, senior gard officials don't participate 0:22:59.680 --> 0:23:04.520 in thing like short telling. Well, this is not a 0:23:04.840 --> 0:23:09.080 typical short sale. A typical short sale is you borrowed 0:23:09.119 --> 0:23:13.240 stock that you do not own. You sell the borrowed stock, 0:23:13.640 --> 0:23:17.879 putting up collateral for it, and then when the stock 0:23:17.920 --> 0:23:20.960 goes down, you cover it and make a profit. That 0:23:21.160 --> 0:23:25.160 simply is not what happened here. I do think that 0:23:25.160 --> 0:23:28.200 that kind of short sale is not a good thing 0:23:28.320 --> 0:23:31.879 for government officials to do. But this is simply a 0:23:32.040 --> 0:23:36.359 technical means of complying with the delivery rules of the 0:23:36.400 --> 0:23:40.480 New York stock exchanged. I didn't gain or lose regardless 0:23:40.520 --> 0:23:44.560 of what the stock did after I entered into the transaction, 0:23:45.200 --> 0:23:48.359 whereas in a short sale, if the stock went down, 0:23:48.560 --> 0:23:51.679 I would profit. If the stock went up, I would lose. 0:23:52.440 --> 0:23:57.440 My situation was one where I was totally indifferent as 0:23:57.520 --> 0:24:00.439 to the subsequent price of the stock and us it 0:24:00.520 --> 0:24:04.040 happens the stock is now at a higher level than 0:24:04.119 --> 0:24:07.800 it was when I sold it. Anyway, Okay, fair enough, 0:24:08.520 --> 0:24:10.840 I think I do understand. I really want to thank 0:24:10.880 --> 0:24:13.560 you for taking a time, Mr Secretary. I know you 0:24:13.600 --> 0:24:16.520 want to get back to your investment summit there in Washington. 0:24:16.720 --> 0:24:17.959 It's good if you to spend time with this, as 0:24:17.960 --> 0:24:21.960 Wilber Ross, US Commerce Secretary. Well from David Weston with 0:24:22.119 --> 0:24:37.479 the Secretary of Commerce and now joining us from Vienna 0:24:37.840 --> 0:24:40.119 gentleman who has been a great supporter of the program. 0:24:40.240 --> 0:24:43.920 Is classic, the Commanding Heights and the original the prize. 0:24:44.040 --> 0:24:46.919 In a way underestimated, and I urge all of you 0:24:46.960 --> 0:24:51.280