thoughts on the administration's trade and tariff policies. >> good morning. >> hello, everyone, and good morning. thanks for coming here this morning. my name is doug palmer. i'm the senior trade reporter at politico and privileged to be joined by linda sanchez to talk about the topic that is on everybody's mind these days. trade. representative sanchez is the new ranking member of the house ways and means trade committee and first woman to hold that position.

since we have a short amount of time, let's jump right into the topics. let's begin with this tariff threat against canada, mexico, and china. those have now been paused by canada and mexico. they are still in effect in china, and overnight china indicated about how it would retaliate. what do you think of president trump's actions generally, and how do you think it will impact the country, your district, california? ms. sanchez: i think that the singular term that can best describe trump's position on trade is chaotic, since he has on a whim announced tariffs. it has thrown things into upheaval. and he announcees things and gets scared and withdraws them

and leaves fragments in place and delays others on a whim. it's clear that his trade policy is not very well thought out. and in addition, you can see it's not about leveling the playing field or investing in jobs here at home, because these are broad tariffs which includes everything. so tariffs are meant to be a tool to level the playing field when somebody is not playing fair or cheating on trade, and it's like using a sledge hammer when you should be using a scalpel. there are industries we have and concerned about for some time. you can target those industries, but broad-based tariffs do nothing but cause markets to be

spooked, business owners and farmers wonder what's next. many of our employers here in the united states have integrated supply chains with canada and mexico, and if you start slapping tariffs and then the potential for retaliatory tariffs, that means prices are going to go up for consumers. and the number one pledge that trump made was he was going to bring down the cost of everyday goods. but we see that by targeting canada and mexico, who are some of our staunchest allies -- i mean, canada is a member of nato -- to really to bully them to extract concessions is not the way to go about things. what he got was nothing. the concessions that mexico and canada, those were things they already pledged to do, were already doing.

mexico already has 15,000 troops on the border to try to stem immigration flows. and canada, which trump seems very concerned about the fentanyl issue and wanting canada to step up its enforcement, most of the country 's fentanyl does not come through the canadian border nor on the back of immigrants coming from the southern border. 90% comes from packages that come into this country under the dominium standard. they come through the ports of entry. and so to threaten our allies and tried to bully them and get concessions that weren't concessions means he has accomplished nothing, which fully underscores that it is performative, theatrical. he wants to seem like he is doing something grand and in effect it is scooping the

markets and creating uncertainty, which any business owner will tell you the thing they most need is certainty so they can plan for the future. his trade policy is not going very well. >> you said you think he was scared of the market reaction, or scared that -- ms. sanchez: he pays a lot of the reaction to the stock market. i think he did get spooked by the market's response to his announcements. >> mentioned the program, for people who aren't familiar, this program waives tariffs on low-value shipments, less than $800, but critics say it is a loophole for fentanyl to come in the united states and erodes the tariffs on larger volume shipments. his executive order actually suspended it for china, canada and mexico. do you approve of the action in

that area, at least? ms. sanchez: these are temporary. that in order for it to be permanent, congress needs to act, because that is our jurisdiction. and unless you get at the transshipment issue, which is goods that are sent to us by a third country and shipped to the united states, you aren't going to get at the fentanyl issue. it may temporarily slow things down, but it is not a permanent solution. you have to address the transshipment issue in the de minimis issue and you need a comprehensive issue in federal law. >> you see congress getting there this year? they haven't been able to get it across the finish line. ms. sanchez: i would like to see my republican colleagues step up and support this.

it will be interesting because i have heard not a peep out of my republican colleagues who are typically very free-trade, antiterrorist. -- anti-tariff. they seem to acquiesce what the president is doing and look to stand up and say no, this is congress' jurisdiction and we need to attack this in a comprehensive way. >> in terms of that, the separation of power between the congress and the white house, president trump has taken us down this tariff road, tariffs on china and steel and aluminum. do you think congress should be standing up and saying, we gave too much authority to the president, time for us to take some of it back? ms. sanchez: congress needs to reassert its jurisdiction in that area.

and there have been attempts against republican and democratic administrations to try to pull back that power because giving the president unchecked power and the track record he has had the last few days is a recipe for disaster. we need congress to step up and to reassert our jurisdiction in that area and to legislate. that's our job. >> i know two members of the trade subcommittee, representative delbene and representative beyer, have put out a bill that would require congressional approval of tariffs implemented under the international economic emergency powers act. do you support that legislation? ms. sanchez: that's a bill that i am in the process of reviewing. but i think they are on the right track. >> ok. well, cool. we talked about that you are the first woman to be ranking member of the trade subcommittee, how does trump's actions so far, how

does that color what you think you are going to be doing in this job this year? ms. sanchez: it's interesting because the republicans control all the levers of power. they set the agenda. however, i fully believe they are going to need democratic support to get bills across the finish line. i think it is a good time to look at what is on the trade table and what do we need to address. so i fully expect and might be a role that i will be doing a lot of oversight over the administration. i have been -- democrats, not just me, and my predecessor have been advocating to get trade adjustment assistance renewed, because that has expired, and that is a program that helps people who have been displaced

by our trade policies get retraining so they can switch careers or burnish their skills to get other jobs, and they have allowed that to lapse and not allowed us to integrate into the trade bills we thought were moving. we are going to start the renewal process for usmca. and let's be clear eyed. canada and mexico are two of our largest trading partners, and we can't throw our weight around and bully them into concessions. we are going to need them. they are allies. and i think we can accomplish a lot more with diplomacy than with than trying to beat them over the head. so review of usmca, ogoa, the african initiative needs to be renewed and i will be looking to see if we can find partnership

with republicans to get that across the finish line as well. >> the african growth and opportunity act, that waives tariffs and imports from developing countries generally. is there republican, a -- it seems like we are in an era where people are talking about putting tariffs on rather than waving tariffs. is there republican, a bipartisan support for renewing those programs? ms. sanchez: the chairman took a delegation to meet with african leaders to talk about agoa and there are probably some modifications or improvements that we could make to it. but many of the goods that come in tariff free are not goods that compete with u.s. businesses.

they are things like artisanal handicrafts and things like that that developing countries rely on to keep the economies afloat, but they don't really impact u.s. industry. >> all right. i wonder if you could talk about your trade policy. i know you voted for the u.s. mexico and canada agreement in 2020, but on some other trade agreement issues i believe you have been on the other side of the fence. i believe you voted against trade promotion authority and perhaps against some previous free trade agreements. ms. sanchez: that is correct. >> how would you describe yourself? ms. sanchez: coming from the background i come from, i am a union member, so i look to our trade agreements to balance the interests of not harming our domestic industry. in many prior trade agreements, they did not have labor standards that would allow the

u.s. to compete fairly. i feel like i'm in a unique position to bridge the gap of -- between the progressive wing of our caucus and the more free-trade centered part of our caucus, and that i understand these trade issues and their impacts we have on workers. trade adjustment assistance should be a no-brainer. that impacts all of our districts. there are distortions and job losses in every district, blue or red, and yet republicans have been unwilling to renew that program which gives people an opportunity. so i think that i can hopefully speak to both of those wings and bridge the gap and get us moving in the direction because we need to be engaged with the world economically. china is eating our lunch in africa and latin america because we have been absent and they are stepping in to fill that void.

china is our largest economic competitor. if we want to be competitive, we need to do more trade but in a way that is more balanced and it is not just an economic tool, but also a diplomatic tool. we need to be more engaged in trade. >> i want to switch topics a little bit. republicans and the trump administration are interested in renewing the 2017 tax cuts, and i have two questions related to that. what do you think about extending the tax cuts generally? and then secondly, there is this idea of using tariff revenue to help pay for some of the tax cuts, even like legislating 10% universal tariff. what do you think about that

idea? ms. sanchez: i think that's a terrible idea. the 2017 tax cuts and jobs act was terrible. the bulk of the benefits went to the highest income earners and to corporations who did not ask for a 21% tax rate. many who came into my office would have been happy with 28% or 25%. and i am one of the few ways and members who was around in 2017 when we debated tc j, and they said these tax cuts were going to pay for themselves and did not, and say it was going to simplify that you could file your tax return on a post card. i don't know anybody who files their tax return on a postcard these days. it put us in the hole trillions of dollars. the talk of extending them means we are going to put ourselves

more into debt, something that republicans scream about when there is a democratic administration, but when there is a republican administration, they don't mind adding trillions our debt. and to use tariffs to pay for that tariffs are going to increase the cost of goods for everyday americans. these are the people that voted in trump believing he was going to lower the price of gasoline, eggs, and groceries. so to extend these tax cuts that are going to benefit the top income earners, and to have every day americans who are struggling to pay for it to me seems completely tone deaf to what is going on with the average american family. i think it's a terrible idea to extend those tax cuts without making it more balanced and without paying for it with something other than tariffs. >> how would you gauge the chances of that happening of tariffs being passed by

congress? ms. sanchez: if i had a crystal ball, i would pull it out. i don't know what the republicans -- they are in disagreement about how to get this over the finish line and pay for it. those are headaches they have to deal with if they are going to go it alone. if they engage with democrats, we can talk about ways to scale it back to make it more balanced, but that is something they are going to have to figure out. >> there is so much uncertainty around trade policy, i was hoping you could definitively tell me what is going to happen around that tickler issue -- on that one particular issue. ms. sanchez: we'll work on that. >> we have a few more minutes left, but i know your platform states that you want to bring

the "made in america" label to more countries. and what you are working on in congress to promote that idea? ms. sanchez: the made in america holds value overseas. when people see products made in the u.s.a., they know there are certain standards that they are held to before they are allowed to be manufactured or created. and so, it still -- our brand is still a strong brand overseas. the problem is we don't do a lot of exporting to more than one country -- small businesses don't. i'm going to explain this. small businesses might export to one country, but once you have the template, you can export to other countries, right? and one of the things i have done in my district, i brought folks in to talk to small businesses about how to export because the made in u.s.a. label

holds a lot of allure for overseas consumers. in my district, beauty products, because we are los angeles and hollywood has a mystique, anything made in the usa beauty products wise has huge appeal overseas. many of these countries were exporting to maybe one other country, but we brought folks in from treasury and and sort of simplified the process, explained it to them so they could be successful to exporting to more than one country. we are a multilingual, multicultural country. we have the opportunity to export to many countries and yet people aren't quite there. try to give small businesses and medium-sized businesses what they need to grow and expand and

create even more jobs. >> i think that is a fabulous topic to end on, since we are out of time. i'll wrap up the conversation. thank you, congresswoman sanchez, for being here. everybody please stand by for our next conversation with the trade subcommittee chair, representative adrian smith and my political colleague, victoria guida. thank you very much. [applause] >> congressman, thanks for joining us. delighted to have you here on tariff day. could not be better timing. so, yeah, i want to jump right in. we have some tariffs taking effect. we have the north american tariffs still sort of entrained

but delayed for a month for now. my first question is, what is congress' role here? mr. smith: the new administration has outlined even before the election they wanted to move on some tariffs. and these are, i think, to be expected. what we have seen over the last few days, canada and mexico responded with a posture of cooperation. and i think that's a step in the right direction. and i have long said i am not a huge fan of tariffs. i understand there needs to be a tool in the tool box and we need to come to terms with the fact that president trump is going to use those tools. this is after four years where it was unclear what our trade policy was, even though the previous trump administration was very active, very vigorous in terms of a trade agenda and

bringing people together, and that led to usmca, and i think one of the most bipartisan trade agreements. >> you mentioned that you have not been a big fan of tariffs. true of a lot of people in your party. and we didn't see much public pushback from republicans in congress to what we have seen over the last few days. why is that? smith: it is -- mr. smith: it is all still very fresh as well. and looking at what the response has been from canada and mexico shows that we'll hope for a negotiation, ultimately negotiation by our trading partners and move forward from there hopefully in a productive way. >> during trump's brief spat with columbia, there was talk to back up those tariffs. do you expect congress to legislate on tariffs? whether it is reenforcing these one-off actions or something

a little bit more formalized? mr. smith: i don't expect congress to have the votes to grab everything back. and i think -- however -- watching the administration and hearing from the administration on a vigorous trade agenda, it can lead to positive results. we saw that last time, and i say that not as a huge fan of tariffs, but a vigorous trade agenda from the previous trump administration led to the usmca and led to a trade agreement with kenya, which was pretty much ready to go, and nothing was done by the biden administration. in fact, the biden administration said we'll talk to kenya, but not about tariffs, even the kenya is already an agoa country with tariff relief. i'm bewildered by the fact that

so little was done but more specifically that we didn't engage more with kenya on a continent that i think provides huge promise for what our needs are economically and what the opportunities can be across the continent of africa, and then we aren't as depended on our other trade partners as we have become. >> in terms of opportunities, i mean, it doesn't seem like there is much talk of expanding our exports right now. and nebraska, your district, agricultural trade is a key component. would you like to see more of a focus on that? or just extend this out, the trade war, a lot of the way this may play out would be delegation on u.s. agricultural experts. we might be going the other direction. mr. smith: it is a concern, and former committee chairman kevin brady was quick to say about buy

american, and he said let's make sure we can sell american, and that's important in my district, obviously, a huge agriculture district. but i also think our engagement in the world has been lacking so much that other countries expect more of us. we look at the indo pacific economic framework. ipef. i've nicknamed that i-puff because it is such a light touch when other countries were expecting more out of the united states. we have a new administration and clearly president trump has higher expectations of our trading partners, and i think they are taking this very seriously, and i think a vigorous trade agenda could help our country and help elevate our engagements around the world. >> do you worry that some of

these actions could make it harder for the u.s. to reach trade agreements? tariffs he has threatened on canada and mexico would blow up usmca. the question becomes, why negotiate a trade deal if the president might go after those countries for drug trade and stuff? rep. smith: if you look at what usmca did, trump, i would like to remind folks that was a trump priority amidst a pelosi speakership. that can get done, pretty much anything can. but it extended into a new administration. i am glad we had that when i see that sicko attempted to shut out our biotech corn. -- when i see that mexico attended to shut out our biotech corn. i would be concerned because my district is a big producer of that product, but such a fragrant violation -- flagrant violation by mexico of the trade

agreement, that took about four years to get worked out. president biden had nothing to say about it ever. a lot of these interactions and agreements are not just about the short-term, it is more about the long-term and how the world views us as engaging. obviously they want access to our markets, number one market in the world, and we have tended to give other countries more access to our markets than they have been willing to give us access to there's -- to theirs. president trump has drawn more attention to that. that is a fair analysis. there can be a variety of responses for how we should move forward. clearly the american people elected president trump pretty strongly, and i think moving forward other countries are expecting us to be more aggressive. victoria: just on principle, do

you think countries that have free-trade agreements with the u.s. should be excluded from some kind of universal tariff? rep. smith: i would be interested in that, but again, the details, and the fact of the matter is the usmca is different than other agreements, just as an example. so there is some updating to do. that is why i think engagement and really elevating the trade discussions are what are so important and what we are so lacking four years prior that obviously president trump's approach is a shock to the system because so little had happened, and i think you're seeing differences now -- i think we are seeing differences now moving forward, and we need to be ready for even more discussions moving forward. victoria: on china, the treasury secretary has talked about how china is not living up to its obligations in terms of act purchases. is that something you have talked to him about one else in

the administration russian mark -- the administration? rep. smith: that was a previous concern. as numbers were not met even though those commitments were made. that will get more discussion moving forward, probably quite a bit even today. victoria: you support this latest round of 10% tariffs from china? rep. smith: i am not a huge fan of tariffs, but i understand they need to be in the toolbox. we have seen an unlevel playing field. i certainly respect the president for his position moving forward with this. i think elevating the discussions that need to be had, just ignoring them does not make an unlevel playing field go away. there is a lot of room for improvement, so i want to keep an open mind in terms of how to best approach that, and

ultimately i want to be careful that we are not going to see huge increases in cost consumers. >> yeah, and on china specifically. you said you're not a big fan of tariffs but do you feel like china is different with these tariffs feel a little different than some of the other countries because they have, you know, various forms of trade barrier s? >> every country going for a different dynamic on trade whether it's geographically or philosophically or technologically. naturally the white house indicated it's difference in well in difference of numbers and going for the top 25%. >> talk about retaliation a bit. china has rolled out some retaliation this morning. seem as little bit targeted. if the trade wars expanded, we

could see a lot manufacture tech athletics rale ya -- more retaliation and canada had agricultural products on there. do you expect congress to top up some of the funds for, you know, may recollecting farmers whole -- making farmers whole or partially whole for the retaliation? >> i think we want to keep our options open there. hearing from producers, they really prefer to produce for a market and not just looking for payments and it's very temporary. it's temporary in its overall application. >> to some extent, the president is moving ahead with these tariffs and you kind of might just have to -- i mean, i guess congress could respond but you could just take it as input. if retaliations are coming, retaliation is coming. i guess do you support being prepared in that situation? >> we need to be prepared and we

want to be effective in our approach and like i said, i think folks cross the economy going for the moments too. there's a little attention out there certainly, but i think it's healthy that we are engaging in a way that elevates expectation and i think ultimately, i think our trading partners expect us as well, and of course they don't like the tariffs, i get it. but elevated engagement is what has been missing, and we're now entering a new phase. >> if you were to add some of that retaliation that also -- or funds in response to retaliation, that also costs more money at a time when republicans are also looking to cut taxes. so is that a concern? how worried are you about the debt effects of the republican agenda? >> that's a major component of

discussion we're having as we speak. in terms of seeing the tax cuts and jobs act. a lot of that about to expire and need to extend that or make it permanent. we're having vigorous discussions on how fast to treat those numbers moving forward and how we can look at the fiscal matters facing our country. some would suggest letting everything expire and helps our economy and our debt across the board. i doubt that to be the case. we need to go with a fine tooth comb look at spending side and savings there and look at tax side of what has been most productive. reversing the trend of inversions for example, that doesn't get as much discussion as i believe it should. when you look at many, many inversions that were taking place before tcja but not after

so interesting to hear critics of tcja describe it in a way that's not very accurate but we are more competitive as a country because of tcja and corporate rate, whether it's rnd leading to environment of innovation, ultimately post-tcja, revenues were up. that's often not reflected on by critics as well. >> you've mentioned multiple times not the biggest fan of tariffs but i guess do you support having a lower income tax but higher tariffs if that's what you have to make? >> i'm uneasy with that clearly, but when you look -- and i tell people that tariffs, most successful tariff is one that doesn't generate any revenue,

but being a tool to say, hey, let's level the playing field here. can be very effective. i'm also very clear in saying i don't want to become dependent on tariff revenue and that's the fact it's another tax. we want the aggressive and effective application of tariff and moving forward and ultimately level that playing field. >> you were installing versions of tcja and part of that is for productive business wasment. are you worried that this trade uncertainty generally, whether there's tariffs or not going to have more tariffs and worry that's going to stymie business investment and slow the economy? >> there's potential moving forward and i think the urgency of getting this worked out is a

major dynamic of that bringing folks ultimately together to arrive at an agreement and hopefully in this case that we've been reading about in the last few days, that brings about more cooperation from our trading partners, whether fentanyl or other areas as well. >> are you hearing from businesses and what are you hearing in the last few days from people in your district as people digest the fact that we might have tariffs on our biggest trade partners? >> from a manufacturer that said they need zinc in the products and only place to get it is canada. this dynamic was similar during the previous trump administration, exclusion process was vigorous and i think, and i hope that kemp can move forward in a similar way of time if necessary. we need to be mindful of what is does to our domestic manufacturers if the only place to get in this case zinc from

canada. and i doubt that it's very feasible to find a -- stand up for a domestic source of zinc in a timely fashion. deal with it in a substantive and expected way. >> is the administration sensitive to these types of concern s? >> i believe so. they showed they were sensitive to the various concerns that domestic manufacturers have on their inputs so, yes. >> you want to talk about being the head of the training subcommittee and what's on your agenda? what do you want to get done? >> looking at the review process coming up for usmca, i think we want to get a good start on that to reflect on what needs to take place moving forward.

like i said, we just came off of dispute, resolution panel that was formed in response to mexico shutting out the corn. one thing i've come to appreciate on trace issues and the pocket that the world is watching. the world is watching, what is our response for example to mexico shutting out our corn. the world was watching and all sorts of folks at usmc a and nafta could never be re-nerve nucleus yore gaited and it goal -- renegotiated and it got done in a bipartisan manner. four years ago about now, the success of usmca passing in such a bipartisan fashion would actually tee up the opportunity to use a similar frame work with other potential trade agreements around the world and that happened.

i think we've learned a lot over the last four years, holiday years and moving forward, that's all very instructive for us to take away, look at that data and that cooperation and the world is changing a lot. every day. so we nighed to be mindful of modern icing the policies and usmca, yes, it was an agreeable frame work time. times are different now perhaps. see what else needs to be changed moving forward. and i just see more engagement and higher level of engagement pointing back to early trump administration before in a district like mine, the the issue of trade was becoming more negative than it should have been. so president trump then elevating the discussions on trade actually elevated the

discussion across districts like mine, and i think across america for a more accurate discussion of what trade policy is, what it can do and can't do. even what tariffs are, what they're not, and moving forward, i just think that an elevated engagement as we are now seeing can be healthy and certainly we want to be wise about all this but also our trading partners have expected this and i think they expected more out of us over the last fur years and that's why they didn't get it. times are different. >> any thought at this juncture of usmca might be improved? >> well, we'll go through that process. i think that looking at what mexico tried with shutting out our bio-tech corn, of course we won seven points o f that case and all seven points.

we prevailed on and so i'm wanting to learn more why they thought that that would be acceptable. and -- because it kind of undermines and i'm concerned that so little response -- well, no response from president biden himself and again, the world saw that or failed to see a response from president biden when he could have said something and in his own style, i'd respect that and told people he didn't need to stand in front of corn stock in a field to send a message that what mexico had done or was about to do for a lot of term was wrong. and it undermines all of the rules-based trade. let's dbrox very clear in working together to develop an appreciation for rules-based trade and what that means.

so that enforcement is workable and understandable and that we don't just constantly have to be in a state of dispute because rule's-based trade can do over time. going for the rules best trade. going for the rules-based trade organization and is that a nonfactor now. consensus-based body and not as relevant as i'd like it to be and ultimately what it was intended to be. you look at how we allowed trips waiver to take place that didn't

move the needle on public health. i fail to understand why that seemed to be such a high priority of biden administration that we'd give away intellectual property from our company and not the capacity to produce the vaccine and saying it's okay, we're going to allow the countries to have access to this select chill property with the vaccine. the select chill property, yes, that's valuable but so is production capacity. and the application capacity as well to actually roll out and distribute all those vaccines and so i think there's a lot to learn over the last few years and i want to apply that moving forward. >> thank you so much, congressman. that's all the time we v. up next, we have a conversation between white house senior councilman peter navarro and

stasha burns. [ applause ] >> good morning. >> thank you for doing this. >> pleasure. >> you're a little busy these days. >> grade autoyens. always a great audience. we were just talking backstage a bit. you've been around the block a few times with this president. how different is 45 versus 47? >> quantum leap i would say. >> interesting. jaire here's the thing, i'm one of the only three people who was with the boss from the 2016 campaign all the way till now with steven miller and anybody heard of that? >> a few people know that. >> yes, they was the president's

great tweak meister or truth meister as the case may be. >> back then we were at bottom of the learning curve and there was tremendous resistance. not among the american people but among the media, the intellectual leaps of the country to the president's agenda. >> and the republican. >> include them in that whole ball of wax and the things we were able to do then with respect for example for historic china and tariffs to renegotiate going for them and nafta tritreaty and solar and things like that. deregulation. it was met with skepticism and turned out to be over for prosperity. it was a tough road and there was a lot of bumps in the road and bot to thes and -- potholes and curves. this time we're at the top of the learning curve, and you've

seen the president on day one sign over 200 executive orders. hitting the ground running in terms of personnel and great surge owe came to know as publisher or one of my books and he's a great friend of the president and doing an amazing job with personnel and we've got more people already in the bureaucracy than we had at this time and most people i think the american public wants what the president is moving forward on border security i think was a huge part of why he got elected and also fair trade issues. so we're moving at warp speed and good for the american people and it's golden age i think. and she says, let's see what happens. >> when it was announced that

you were sitting down with us, i got a lot of people coming up for me and very excited to hear from you because of everything we've seen in the last 24-48 hours, this is a very timely interview and you're a lucky bunch here because i think everyone is curious to hear directly from you so take us behind the scenes and we were moments away from tariffs on canada and then suddenly things changed. what can you tell us about that. how did the conversation with justin trudeau play out? >> what's important to start with is day one. the overall signed hundreds of executive orders and the second to last order she signed was the america first trade policy, presidential memorandum and what that did, and i would urge everybody here to look at that if you're curious about trajectory of trade policy and shut down across like 15

different dimensions all with different things the president intends to do and trade policy going with global tariff. there's, that was the first section and everything is data driven and presidential memo sets for a requirement to do investigative studies to level set everything and going on for the currency and violation and export controls and there's discussions about thanksgiving the confection for going on with respect to mexico and canada and china and that's wherever folks are listening, watching the media reading about it and i think the biggest failure of the media is talking about tariffs. they're always kind of warning

you about the downside, rather than explaining why. and in this particular case, the why is 75,000 americans dying every year from deadly fentanyl and originates with precursor chemicals in china that is processed by mexican drug cartels, both in mexico and in canada and comes across the border, not just as fentanyl but also as parols to fentanyl and spice from everything with heroin and speed to cocaine. so what's happening is you see this is the president fight ago drug war, it's not a trade war. media immediately came out talking trade war, this that and the other thing. this particular action is a drug

war and what we've seen is a lot of perplexing that was announced but we've seen immediate results from mexico and canada and the mexicans have cooperative and senator -- secretary of state marco rubio, love the guy. just he's been, i want to talk alaska the broader trade team if you wouldn't mind. but he has done a very good job along with steven miller and personnel at dhs going through a checklist of things that we need for mexico and we're making progress on that front, hence the 30 day extension. prime minister trudeau and his initial reaction was kind of similar reaction we got back during the first term.

it's like okay, we're going to tariff you if you tariff us and we're going to go up the ladder and i think you looked at the problem and looked at what mexico was willing to do and he came to understand this is a drug war and not a trade war. this is what the president is concerned about in this case and we got the news yesterday on the call, he was on the call and president's art of the deal going for fentanyl czar and getting billions of dollars spent on this, branding terrorists and drug cartels as a terrorist organization. there's a number of other steps. that's how they do it. >> one of the thing withs canada was sort of already in the works and i'm curious what's going on with canada of this and canada and mexico coming to the drug war and coming to immigration, two very different stories and then 2.2% of u.s. border fentanyl seizures are at the

canadian border and three pounds of fentanyl at canadian border at last fiscal year compared to 21,000 pounds in mexico and what's he really after with canada? >> interesting you say that. the problem is first of all that the mexican drug cartels are rapidly expanding in canada and that's dangerous. second of all, there's something, i don't know if you noticed this and kind of went unnoticed by much of the press, but there's a thing called de minimis. >> explain. >> de minimis is a rule that says that anything of $800 or less that comes across our boarders is not subject to terrific riffs. weariness having that kind of

policy and other countries around the world will do that but the limit is something like $30 or $20. and so what the cartels in china have done is exploit that loophole to smuggle in mott just fentanyl but all sorts of drugs and canada is a leading source of that avenue for drugs so what the executive order did in this case is say de minimis is suspended for the three countries and we're going to be able to examine that and the other thing is this is not just a drug war but a terrorist war and border invasion war and if you read these executive orders carefully, that's all embedded in that as well. supporting the use of international verge of economic powers act and we're in a

situation now where almost 100 people have come in to canada on the terrorist watch list alone. only takes one tabella something up here. we know that. so canada's visa issues are big so we got to kind of deal with that and the bottom line is the end state and what's the end state and secure borders and illegal immigrants coming across the border and countries taking back the illegal aliens that were coming here during the biden regime and stopping the slaughter of americans and i don't know how anybody could disagree with that and only issue is how we get to that. >> do you think businesses see it that way as a drug war and not a trade war and particularly businesses that do a lot of trade and rely heavily on the partnership withs canada and

mexico. what do you say to american businesses and essentially foreign businesses that want to invest here and are concerned about the uncertainty going forward? >> depends on how well we do our job right here and the media. the media does a terrible job and the media. >> how well are you. >> the media does a terrible job covering trade issues because first thing out of their mouth is -- well -- >> that was not the first thing out of my mouth, sir. >> no, no, i'm not accusing you. >> let me read this thing and then -- >> i want to make a point. this is from 2016 from politico, typical story. i'm not picking on you guys because this would be a story that would be new york times, washington post, all the nightly

news. donald trump's presidency weakening the country and driving the u.s. into a lengthily recession and 7.5 million job losses and 5.5 unemployment and according to moody analytics. okay, politico rights that and reality was real gdp increase almost 3% in 2018, household income went and of course as you know, may have noticed we had price stability so what's happening now as this story unfolds is rather than talk about it being a drug war, rather than a trade war. rather than talking about americans dying and talking about. talking about that and illegal alien crimes on american citizens crime is out of control rather than talking about how real wages are going down and in the government statistics

millions of illegal aliens have replaced american workers. what is different is we have experience. >> making it easier for businesses to operate, a researcher said they talked about tariffs as essential for ambitions.

has ambition been tempered by reality? >> it does not match the reality. we as trump says are the world's sucker with the lowest tariffs.

that's a fact. we have a trade deficit transferring a trillion dollars to foreigners who are not our friends. we do nothing about that and millions of jobs are lost. in a world in which we had blue-collar folks in swing states, the context for the

agenda is fair trade, europe is sticking it to us. you ever see an american car in tokyo? no you don't. >> concessions are not concessions. >> why do you think they're minor? i thought it was washington journal, 10,000 troops on the border, drug cartels and terrorist organizations. >> what happens? that'll be your headline

tomorrow, he gets his headlines wrong. reframe the question. >> concessions deal with a drug problem and immigration problem, is he going to ask for concessions? >> let's talk about concessions. trump is able to talk candidly. calling that a concession diminishes mexico, and canada,

they agreed to enter into a dialogue to deal with a border invasion, that's a good start. what about all these other issues like the trade deficit? i refer you to the memo, we will handle the problems inflicted upon americans through a dozen different kinds of approaches. that's what that does, so i can

say the first hundred days are laid out. what's important about the trade team is it delegates different tasks so you have howard lutnick the commerce secretary nominee and he will take point on tariff issues including things like steel and aluminum, medicine and minerals. are we in a position where imports harm our ability to produce and threatens the safety and security?

scott bessent treasury secretary, i know him well. he was the publisher of my first trump book memoir, got to know scotty really well. howard and scott are the new blood, they are like geniuses, it is a delight to work with them, scott handles what foreigners can buy, currency and fall of's -- bob renegotiated the terrible treaty that is coming up as a guest talked about, for your review.

the beauty is i don't advocate, i let people do their jobs and have a handle. the other person's cabin, chair of economic advisers, understanding macro aspects, if -- if -- if -- if president trump succeeds we will have a structural shift in the economy from overreliance on the irs to one aligned -- reliance on external revenue. it is in the memo, under howard

lutnick and scott bessent and it's a beautiful thing. gosh, nobody knows this. unless you are a hardcore looker . this country was built on tariffs. mckinley ran on a tariff platform, a great chart shows percentage of revenue. it's near 100% like this and it goes just like this, flat lines. the point is that -- that tariff revenues play a very important role as part of a long-term transition, countries don't have to pay tariffs if they invest.

host: let's talk about china. why 10% for china were an ally like canada? guest: we already had substantial tariffs. host: trump talked about 60% tariffs on china, is that on the table? guest: again i urge everyone to read the memorandum and we will proceed in a measured way using investigative studies that will be foundational. host: that is not super measured so it's not likely? guest: what jamieson greer will do is recalibrate section 301

tariffs on china and what exactly they've been doing. did they live up to the agreement they signed? stopped the seven deadly sins in intellectual property and currency manipulation. this will be measured in a way to benefit the american people and not getting headlines speculating about with the president will do, we will let him do his thing. trust in trump, when he does stuff and it looks like things are a little chaotic it is not. it is genius. and deliberate. >> chaos is not chaos?

>> not to us. >> china are retaliating on oil, coal, autos, export controls on metals, probe into google. a bunch of businesses rely on these goods, what should they prepare for? guest: you could've said here yesterday and said the same thing. it's up to the boss. if i got ahead of the boss i wouldn't be here. >> import taxes will definitely happen with the eu and u.k., look at that look like? >> let's see what happens. >> oh, peter. >> i'm part of a trade team, the

finest trade team ever assembled, definite upgrade from last time all point in the same direction. several newcomers and three veterans, we are going to go through the presidential memorandum made its going to be beautiful, just be patient. host: are universal tariffs on the table? guest: the first section of the memorandum makes it clear we are studying damages caused by the trillion dollar trade deficit, the president will figure out if it indicates damages and

possibility of supplementary tariffs. let's not again -- this is -- we've got to be measured. india and -- and -- and everyone else, people get stirred up and then figure out wow that was pretty good. we are restoring america's time. just relax. >> also see markets reacted, businesses said we are behind trump but the uncertainty is a challenge, it's difficult to make decisions when they don't know where things are heading.

guest: before i came here i was on foxbusiness. she provided the answer to this question, the point i made was we get volatility in the market on rumors and headlines rather than looking deeper and my point here is what is happening is happening within a larger agenda that points toward growth in wages and stability, i remember

was one of the most fun days, the day after the election in 2016 with two minutes to speak on the squawk box. andrew, becky and joe said it was like the market was going to totally melt down and it's like i came on there and it's like ok, let's look at the chessboard, what is trump going to do with the four wheels on the ferrari here, strategic energy dominance is what he is going to do. we are going to dig -- let me finish, this is important. were going to hit that again but

also had a positive supply shock for businesses, cheaper oil, cheaper oil is not just cheaper gasoline, it is cheaper fertilizer, tax burden will be lower and lowered by the way by ability to use tariff revenues in negotiations to what they call score that and then the fair trade, again if you are a key and you know this, running a trade deficit is in traction to gdp growth rate so if you lower the deficit you get growth so my point here is as all the trade policy goes to work you will have other elements in trump's agenda pushing the economy

forward to create prosperity and reduce inflation and that's a beautiful thing. host: that's a good point but when you see strategy, not every business sees it that way, markets and businesses don't love uncertainty, we don't know what will happen, do you worry whiplash could discourage investment in factories, hiring workers? guest: my point here is the media is responsible for chaos because it does not report the broader -- hang on, the broader

context and in the first term of the trump administration none of these skies are following things happened. it is night and day because every time someone says in the media the sky is going to fall i can give you a date where you said that in 20 17. if you were wrong -- host: can you promise the tariff strategy won't mean higher costs? guest: drill, baby drill, deregulation, tax cuts. let me -- let me walk through

the economics. ok? this is important. everyone said we would have inflation. host: we have limited time. can you make that promise? guest: when we put a tariff on the biggest market in the world on a country heavily export dependent they reduce prices, then supply chains move to moderate, third thing is more investment creates jobs and improves wages so what i can promise is the president's agenda will create a golden age, real raises will go up as they did first term, they went down

during joe biden's. robust gdp growth and security, not just national but economic security. host: i have a couple more questions. president acknowledged tariffs and policies may come with some pain so should americans prepare for sacrifices? guest: all i can say is the plans we have will lead to price stability far more during trump's tenure then the biting regime -- joe's regime. what was -- you -- look, we had

$50 oil during trump. during joe biden spill is 75. you know what a shock status? drill, baby, drill. you have doug burgum, i had the great pleasure of meeting him on the canada mexico drug war and i mean, it's going to be a golden age. host: what is the lesson big picture that american families in trading partner should take away from the last day? >> trust in trump. he -- t -- p -- p -- he has a that. trust in trump. you saw what he did over the

last 24-48 hours. this is how we roll, remember the story, 75,000 americans -- raise your hand if you don't know somebody either close to you, friend or friend of a friend who died of a drug overdose. probably. that -- that is astonishing and we say no more, that ain't gonna happen, so that's what this round is about. it is a drug war, not a trade war. >> what is the goal with the tariff strategy? is he negotiating?

guest: the goal of the trade policy, tariffs are one tool, to make sure american workers face a level playing field measured by the jobs in factories and the fall from a trillion dollar deficit down to zero with the rise of the external revenue service. those tariffs will pay for no tax on tips. it happening. that i can promise you. host: it there potential for a problem if you threaten, back

down, threatened, back down? guest: not with donald trump. with joe biden, obama or anyone else -- look, we are at war around the world because foreign leaders did not respect or fear joe biden. think about that. the one change like reagan from carter, hostages released, peace. you've got to remember, you asked me what's different, first term we had no wars, north korea was not shooting missiles in the air, setting off bombs so they can take out seattle.

baran was quiet, russia did not invade anybody. at least partially with the china issue on trade finish that. so that's the thing, the beauty of all of this is speculation, donald trump a record, trust in trump. host: let's look shorter term. guest: you keep saying that, just one more question. all right. guest: it's not like i don't have anything to do today. about to save the free world. one more question and it better be good. no pressure. host: some of the challenges

that we've heard from canadians is what the president wanted was vague, they came up with solutions. are there metrics over the course of 30 days to figure out is this working? >> echo terry of state rubio and payton miller and others, they are working and negotiating. blood, sweat and tears goes into negotiations. it's like very good here, this cabinet. cannot imagine a finer cabinet.

will move faster not just at the secretary level, but it is the tragedy of government that it takes 18 years to get a government in place. that's not how it should be. i think you got your money's worth out of this. host: thank you for your time and for joining us. next week energy and agriculture so i hope you will come back despite the length of the conversation, thank you.

over three hours. [inaudible