Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: We were speaking earlier about tariff's. President Trump, answering a
Speaker 2: wide range of questions, touched on a lot of issues
Speaker 2: today during the first official cabinet meeting of his second term.
Speaker 2: They covered the doge, a minerals deal with Ukraine, and yes,
Speaker 2: a renewed tariff threat.
Speaker 3: Mister President, can you clarify the Canada mex So Co tariffs?
Speaker 1: You had put that thirty day pause, but you just
Speaker 1: referred to a when does it go into event?
Speaker 3: April second April, Canada mix core and for everything.
Speaker 2: Joining us now for the latest on these upcoming teriffs
Speaker 2: and a lot more. Is a man who was sitting
Speaker 2: right behind President Trump as he was conducting that meeting today,
Speaker 2: Peter Navarro, White House, Senior Counselor for Trade and Manufacturing
Speaker 2: with us from the North Lawn. It's great to see you,
Speaker 2: mister Davara. Welcome back with this little bit of confusion
Speaker 2: about some of the conversation we heard with reporters today,
Speaker 2: and so we really appreciate your joining us to maybe
Speaker 2: clear this up. Are these tariffs still set to take
Speaker 2: effect next week? Is March fourth the deadline? And what
Speaker 2: specifically could Canada and Mexico do to keep them from
Speaker 2: taking effect.
Speaker 4: Well, First of all, in order to understand the trajectory
Speaker 4: of the President's trade policy, I'd urge everyone watching this show,
Speaker 4: and presumably most are investors, to read the Presidential Memorandum
Speaker 4: of Day one of this administration, which lays out all
Speaker 4: the different types of actions as for today, I was sitting,
Speaker 4: as you said, right behind the President. I thought he
Speaker 4: was quite clear in what he was going to do.
Speaker 5: For me.
Speaker 4: I came out here hoping to discuss this week's trade
Speaker 4: actions kind of in my lane. We did two really
Speaker 4: important things which for investors really your market moving.
Speaker 5: In the sense.
Speaker 4: The first was the digital service tax action we took.
Speaker 4: The President has directed the US Trade Representative to resume
Speaker 4: action on these digital service taxes and for the benefit
Speaker 4: of your viewers. A digital service tax is something that
Speaker 4: was effectively invented in France in twenty nineteen. It's a
Speaker 4: tax on things like cloud computing, digital advertise, all of that.
Speaker 4: But it was done in a way in France which
Speaker 4: only targeted American companies, specifically the big ones like Amazon, Google, Meta, Netflix,
Speaker 4: and Microsoft, and essentially the President back in twenty nineteen.
Speaker 4: Saw immediately that this was both a punishment and a
Speaker 4: discriminatory way of American companies, but also a tax grab
Speaker 4: from the US Treasury. And so the way that works
Speaker 4: is these digital taxes are put on and they gone
Speaker 4: revenues that is, reduced profits, probably reduced profits, then reduce
Speaker 4: it's like stock prices, and then also reduce revenues from
Speaker 4: the corporate tax. And what about Medico, well with respect
Speaker 4: to digital service taxes, well, Canada has one, Mexico does.
Speaker 5: We're just trying to.
Speaker 2: Clear up what we heard today from the President, Peter.
Speaker 2: I'm sorry, I just we're.
Speaker 1: Trying to understand what we're going to be across purposes,
Speaker 1: because I made it clear that what the President said
Speaker 1: just go back and play the clip, and he gave
Speaker 1: you a timeline.
Speaker 5: The underlying issue.
Speaker 4: There, the underlying the deadline, underlying issues, sir, is that
Speaker 4: too many Americans anywhere from fifty thousand on the low
Speaker 4: end of three hundred thousand, which I think is the
Speaker 4: accurate number for the President die every year from fentanyl
Speaker 4: that comes in from communist shine and big chemical barrels.
Speaker 4: It goes to the drug cartels in Mexico and the
Speaker 4: Mexican cartels then bring some of that up to Canada
Speaker 4: and it comes across our border and people either take
Speaker 4: it in in the fentanyl direct form, where it's laced
Speaker 4: with other drugs like speed or heroin or whatever, and
Speaker 4: Americans are dying. So to the extent that that problem
Speaker 4: is going to be dealt with, I'm not in the
Speaker 4: center of those negotiations that be done by others in
Speaker 4: the administration. I would think as long as we have
Speaker 4: some progress, uh, then we'll see what we will see.
Speaker 5: But it's up to the President.
Speaker 4: But the underlying probably the thing is, sir, It's like
Speaker 4: whenever I talk to people in the news about tariffs,
Speaker 4: they also want to cut to this chase over here
Speaker 4: about what's going to happen, or like I was raising inflation,
Speaker 4: and they never ask why the terriffs. In this case,
Speaker 4: it is feminel's killing Americans. It's slaughtered.
Speaker 2: A good conversation with you, and we understand, but we
Speaker 2: just want to get some answers for our listeners and
Speaker 2: viewers about when these might take effect. This isn't about inflation,
Speaker 2: and it's not about the why. We just want to know.
Speaker 4: When asked an answer, I told you you will go
Speaker 4: listen to what the President had to say. It's contingent
Speaker 4: on Mexico's cooperation in Canada's cooperation in terms of killing
Speaker 4: Americans with fentanyl. What I'm trying to share with you,
Speaker 4: which I think is for the for the longer term
Speaker 4: more germane, is this copper proclamation we did yesterday and
Speaker 4: the one earlier in the week on digital service taxes
Speaker 4: has tremendous importance for people.
Speaker 3: We like to talk about that. We would love to
Speaker 3: talk to you. We would love to talk to people.
Speaker 3: I'm trying to ask you about them right now. I
Speaker 3: like to talk about the copper Executive Order specifically, when
Speaker 3: we're talking about a commodity like that, do we have
Speaker 3: the capacity domestically to make up for anything that may
Speaker 3: be offset by not being able to import or as
Speaker 3: much If all of this is about trying to protect
Speaker 3: American commodity production to what degree into how quickly can
Speaker 3: that be ramped up to make sure that it's still
Speaker 3: able to meet demand.
Speaker 4: So this is never a question of not being able
Speaker 4: to have enough. It's just a question of what kind
Speaker 4: of steps we take to protect the domestic copper industry
Speaker 4: across the smelting and refining process in the mining, so
Speaker 4: we don't really have to worry about We're not putting
Speaker 4: up a wall to imports themselves. We're just trying to
Speaker 4: deal with this central problem now and it's a problem
Speaker 4: across a lot of commodities we have right now. We
Speaker 4: have a very large over capacity in copper world raw wide.
Speaker 4: That results in significant dumping into the marketplace here in
Speaker 4: America and thereby suppresses our ability to open new minds,
Speaker 4: which we have and there's two.
Speaker 5: Great ones in Arizona we get developed. One up in.
Speaker 4: Alaska we get developed the smelting itself, which we haven't
Speaker 4: opened any new smelters in a long time, and others
Speaker 4: are being open around the world, and we're simply not
Speaker 4: having enough refining capacity. That's what we're trying to establish.
Speaker 4: And the problem is, if you look at the curves,
Speaker 4: we got a tremendous surge in demand for copper over
Speaker 4: the next decade because of the electrification of our economy,
Speaker 4: in part due to things like AI and so when
Speaker 4: you charge well.
Speaker 3: And that's why I asked you the question about whether
Speaker 3: shortages could result if you do see that increase in.
Speaker 4: Industry pay we'll just pay the terroriffs will be paid.
Speaker 4: We'll get whatever we need. And in the meantime, as
Speaker 4: we saw with steel and aluminum, we went from a
Speaker 4: seventy percent capacity utilization in the first Trump term to
Speaker 4: eighty in profitability.
Speaker 5: We had fifteen billion.
Speaker 4: Dollars of new investment, we had new mills built. And
Speaker 4: then in the four years of Biden, we lost two
Speaker 4: aluminum foundries and capacity utilization went back down to the
Speaker 4: low seventies. So what we're trying to do is build
Speaker 4: a sustainable investment environment for key commodities and products which
Speaker 4: are critical to our national security. And by the way,
Speaker 4: why copper, I mean it seems well, copper is like
Speaker 4: the second most important thing that Defense Department uses for
Speaker 4: its weapon systems, and it's also part of everything that's
Speaker 4: high technology, is part of the electrification of the grid.
Speaker 4: And we've had a situation where we used to have
Speaker 4: zero import dependence. We're up to about fifty percent now.
Speaker 4: And if you just keep those lines going, that import
Speaker 4: dependence is going to increase and increase, and we're going
Speaker 4: to be vulnerable to shocks and geopolitical problems. And President
Speaker 4: Trump says that's not the world we're going to live
Speaker 4: in We're going to live in one.
Speaker 5: It's a safe, secure, and prosperous.
Speaker 4: All right.
Speaker 3: Peter Navarro, White House, Senior Counselor for Trade and Manufacturing,
Speaker 3: appreciate the time