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Feb. 4, 2025 22:01-23:28 - CSPAN
01:26:55
Peter Navarro & Lawmakers on Tariffs
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President Trump's senior advisor on trade and manufacturing said the Trump administration's threat of tariffs against Mexico and Canada have brought leaders of the two neighboring countries to the negotiating table.
His remarks came during a conversation with Politico reporters.
We begin the discussion with Representatives Linda Sanchez and Adrian Smith and their thoughts on the administration's trade and tariff policies.
Good morning.
Well, thank you.
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 I'm privileged to be joined by California Representative Linda Sanchez to talk about the topic that's on everybody's mind these days, trade.
Representative Sanchez is the new ranking member of the House Ways and Means Trade Committee, and she's the first woman to hold that chair or to hold that position.
Excuse me, there.
Since we only have a short amount of time, let's jump right into the topics.
And let's begin with this tariff threat against Canada, Mexico, and China.
Those have now been paused on Canada and Mexico.
They're still in effect on China at the moment.
And then overnight, China indicated a little bit about how it would retaliate.
What do you think of President Trump's actions generally?
And how do you think it'll impact the country, your district, California?
Sure.
So I think that the singular term that could best describe Trump's position on trade is chaotic.
And I think that since he has, you know, on a whim, announced tariffs, it has really thrown things into upheaval.
And he announces things, then he gets scared and he withdraws them or retracts them.
He leaves fragments in place.
He delays other on a whim.
So it's clear that his trade policy is not very well thought out.
And in addition, you can see that it's not about helping American manufacturers or 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 they're cheating on trade.
And it's like using a sledgehammer when you should be using a scalpel.
There are specific industries that we've been concerned about for some time.
You can use tariffs to target those industries, but broad-based tariffs do nothing but cause markets to be spooked, business owners and farmers to wonder what's next.
Many of our employers, our manufacturers here in the United States, have very integrated supply chains with Canada and Mexico.
And if you start willy-nilly slapping tariffs and then the potential for retaliatory tariffs, what that means is that prices are going to go up for U.S. consumers.
And the number one pledge that Trump made when he was running for office was that he was going to bring down the cost of everyday goods.
But we see by targeting Canadian allies and Canada and Mexico, who are some of our staunchest allies.
I mean, Canada is a member of NATO.
You know, to really try to bully them to extract concessions is not the way to go about things.
What he got was nothing.
Right, right.
The concessions that Mexico and Canada gave, those were things that they had already pledged to do, were already doing.
In fact, Mexico already has 15,000 troops on the border to try to stem the immigration flows.
And Canada, which, you know, Trump seems very concerned about the fentanyl issue and wanting Canada to step up its enforcement.
Most of the fentanyl that comes into this country doesn't come through the Canadian border, nor does it come on the back of immigrants that are coming from the southern border.
90% of fentanyl in this country comes from packages that entered in this country under the de minimis standard.
They come through the ports of entry.
And so to threaten our allies and to try to bully them and to get concessions that weren't really concessions means that he has accomplished nothing, which fully underscores the fact that it's performative, it's theatrical, it's, you know, he wants to seem like he's doing something grand.
In effect, it's spooking the markets and it's creating uncertainty, which any business owner will tell you the thing that they most need is certainty so they can plan for the future.
So his trade policy is not going very well.
Right, right.
And you said you think he got scared, that he was scared of the market reaction or scared that.
He pays a lot of attention to the stock market, and I think he did get spooked by the market's response to his announcements.
Yeah, yeah.
You mentioned the de minimis program.
I mean, that's kind of a nerdy term.
For people who aren't familiar, it's this program that waives tariffs on low-value shipments, less than $800.
Shippers love this program, but critics say it's like a loophole for fentanyl to come into the United States in these packages, and it erodes the tariffs that are on larger volume shipment.
His executive orders actually suspended de minimis for China, Canada, and Mexico.
I mean, do you approve of the action in that area at least?
Well, it's important to remember that these are temporary.
Okay.
That in order for it to be permanent, Congress needs to act because that is our jurisdiction in trade.
And unless you get at the transshipment issue, which is goods that are sent to a third country and then shipped to the United States, you're not going to really get at the fentanyl issue.
It may temporarily slow things down, but it's not a permanent solution.
You really have to address the transshipment issue in the de minimis issue, and you really need a comprehensive approach to de minimis in federal law, so that's Congress's job.
Right.
Do you see Congress getting there this year?
They haven't quite been able to get across the finish line on de minimis.
That is one of the areas that I am working very hard on, and 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, very anti-terrorism.
They just seem to acquiesce to what the President is doing.
And I'm looking for those that are willing to stand up and assert, no, this is Congress's jurisdiction.
We need to attack this problem in a comprehensive way, and we need to do it legislatively.
Right.
Well, in terms of that, I mean, the separation of power between the Congress and the White House.
I mean, President Trump has taken us down this tariff road before in his first term, tariffs on China, tariffs on steel and aluminum.
I mean, do you think Congress should be standing up and saying, you know, we gave too much authority to the President, it's time for us to take some of that back?
I think Congress really does need to reassert its jurisdiction in that era, in that area, I should say.
And there have been attempts against Republican and Democratic administrations to try to pull back that power because giving the president unchecked power, especially given the track record that he's had these last few days, is a recipe for disaster.
We really do need Congress to step up and to reassert our jurisdiction in that area and to legislate.
That's our job.
That's who you should be handling.
Right.
But I know two members of the trade subcommittee, I think Representative Delbeni and Representative Bayer, they have put out a bill that would basically require congressional approval of tariffs implemented under IEPA, the International Economic Emergency Powers Act.
Do you support that legislation?
Yeah, that's a bill that I am in the process of reviewing to see.
But I think they're on the right track.
I certainly think that they are on the right track.
Okay.
Well, cool.
So we talked about this, that you're the first woman to be ranking member of the trade subcommittee.
How does Trump's action so far, how does that color what you think you're going to be doing in this job this year and next?
Well, it's really interesting because right now the Republicans control all the levers of power.
So they really set the agenda.
However, I fully believe that they are going to need Democratic support to get many bills across the finish line.
So I think it's a good time to sort of look at what is on the trade table and what do we need to address.
So I fully expect in my new role that I will be doing a lot of oversight over the administration.
I have been, Democrats, not just me and my predecessor, really have been advocating to try 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 that they can switch careers or burnish their skills to get other jobs.
And they have allowed that to lapse.
They've not allowed us to integrate it into any of the trade bills that we thought were moving.
We're going to start the review process for USMCA, so our agreement with Mexico and Canada.
And let's be very clear-eyed on this.
Canada and Mexico are two of our largest trading partners.
And we can't afford to just throw our weight around and try to 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 trying to beat them over the head with a cudgel.
So review of USMCA, AGOA, the African Initiative, needs to be renewed.
And so I will be looking to see if we can find partnership with Republicans to get that across the finish line as well.
Right.
But on AGOA, African Growth and Opportunity Act, that basically waives tariffs on goods from sub-Saharan African countries.
And then there's this bigger program, GSP, that waives it on imports from developing countries generally.
I mean, it seems like we're in an era where people are talking about putting tariffs on rather than waiving tariffs.
I mean, do you think, is there Republican, is there bipartisan support for renewing those programs?
Well, I know that the chairman took a trade delegate, or I mean, took a delegation to Africa 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 under AGOA are not goods that compete with U.S. businesses.
They're things like artisanal handicrafts and things like that that developing countries rely on to keep their economies afloat, but they don't really impact U.S. industry.
Okay.
All right.
I wonder if you talk a little bit more about your trade philosophy.
I know you voted for the U.S.-Mexican-Canada agreement in 2020, but I believe that like on some other trade agreement issues, you've been on the other side of the fence.
I think you voted against Trade Promotion Authority and perhaps against some previous free trade agreements.
That's correct.
So how would you describe your trade philosophy?
Sure.
So I think, you know, coming from the background that I come from, I'm a union member.
So I always look to our trade agreements to balance the interests of not harming our domestic industry or creating job losses for our workers here.
In many of prior trade agreements, they did not have labor standards that would allow the U.S. to compete fairly.
So I feel like I'm in a unique position to try to bridge the gap between the progressive wing of our caucus and the more free trade-centered part of our caucus in that I understand these trade issues and their impacts that we have on workers.
And like I said, I mean, trade adjustment assistance, that should be a no-brainer because 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 a direction because we need to be engaged with the world economically.
China right now 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 we need to do it in a way that's balanced and that, you know, it's not just an economic tool, it's also a diplomatic tool.
So we need to be more engaged in trade in the world.
Okay.
I want to switch topics a little bit.
I mean, Republicans and the Trump administration are very interested in renewing the 2017 tax cuts.
And I have two questions related to that.
I mean, what do you think about extending the tax cuts, you know, generally?
And then secondly, there's this idea of using tariff revenue to help pay for some of the tax cuts, you know, even like legislating a 10% universal tariff.
What do you think about that idea?
Yeah, I think that's a terrible idea.
I think the 2017 TCJ, the Tax Cuts and Jobs Act, was terrible.
The bulk of the benefits went to the highest income earners and to corporations who, by the way, did not ask for a 21% tax rate.
Many who came into my office would have been happy with 28 or 25.
And I'm one of the few Ways and Means members that was around in 2017 when we actually debated TCJA, and they kept saying that these tax cuts were going to pay for themselves.
They did not.
They kept saying it was going to simplify the tax code so much that you could file your tax return on a postcard.
I don't know anybody that files their tax return on a postcard these days.
And it put us in the hole trillions of dollars.
So the talk about extending them means we are going to put ourselves more into debt, something that Republicans scream about when there's a Democratic administration, but somehow when there's a Republican administration, they don't mind adding trillions to our debt.
And to use tariffs to pay for that means tariffs are going to increase the cost of goods for everyday Americans.
These are the people that voted for Trump believing that he was going to lower the price of gasoline and lower the price of eggs and lower the price of groceries.
So to extend these tax cuts, again, that are going to benefit the top income earners and to have everyday Americans who are struggling to make ends meet pay for it through increased tariffs, to me seems completely tone deaf to what is going on with the average American family today.
So 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.
Right.
I mean, how would you gauge the chances of that happening, of tariffs being passed by Congress?
You know, if I had a crystal ball, I would pull it out.
I don't know what the Republicans are in a little bit of disagreement about how they're going to get this over the finish line and how they're going to pay for it.
So those are headaches that they have to deal with if they're going to try to go it alone and do it with only Republican votes.
They want to engage with Democrats.
We can talk about ways in which we can pay for it or scale it back to make it more balanced.
But that's something that they're going to have to, they're going to have to figure that out.
Right.
Well, there's so much uncertainty around trade policy.
I was hoping that you could just tell me definitively what was going to happen on that one particular issue.
Let me invest in a crystal ball and we'll work on that.
Yeah, that would be great.
And then we just have a few more minutes left, but I know that your platform states that you want to bring the Made in America label to more U.S. countries.
Could you talk about that and is there anything you're working on in Congress right now to promote that idea?
Yeah, so the Made in America label still holds a lot of value overseas.
When people see products that are made in the USA, they know that there are certain standards that they are held to before they're allowed to be manufactured or created.
And so it still is, our brand is still a very strong brand overseas.
The problem is we don't do a lot of exporting to more than one country.
And small businesses don't.
I'm going to explain this.
Small businesses might export to one country, but once you sort of have the template, you can export to other countries, right?
Right.
And one of the things that I have done in my district, I brought folks in to talk to small businesses about how to export, because again, the Made in the USA label holds a lot of allure for overseas consumers.
In my particular district, beauty products, because we are Los Angeles and Hollywood has a mystique.
Anything that's made in the USA that's beauty products-wise has huge appeal overseas.
And many of these companies, as I said, were exporting to maybe one other country.
But we brought folks in from Treasury and sort of simplified the process, explained it to them so that they could be more successful in exporting to more than one country.
We are a multilingual, multicultural country.
We have the opportunity to export to many countries around the world, and yet people aren't quite there.
So try to give small businesses and medium-sized businesses the information, the resources, and the expertise that they need in order to grow and expand, create even more jobs here.
Great, great.
Well, I think that's a fabulous topic to end on.
And since we're out of time, I'll wrap up the conversation.
Thank you, Congresswoman Sanchez, for being here today.
And everybody, please stand by for our next conversation with Trade Subcommittee Chair, Representative Adrian Smith, and my political colleague, Victoria Guida.
Thank you very much.
you.
Congressman, thanks for joining us.
Delighted to have you here on Tariff Day.
As Annie said, 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 in train, but delayed for a month from now.
And so my first question is, what is Congress's role here?
Well, obviously, the new administration, as outlined even before the election, wanted to move on some tariffs.
And so these, I think, are to be expected.
Now, what we've seen over the last few days, you know, Canada and Mexico responded with, I would say, a posture of cooperation.
And I think that's a step in the right direction.
And I've long said I'm not a huge fan of tariffs.
I do understand they need to be a tool in the toolbox.
And I think we need to come to terms with the fact that President Trump is going to use those tools.
And this is after four years where it was really unclear what our trade policy was, even though the previous Trump administration was very active, very vigorous in terms of a trade agenda, and actually bringing people together.
And that led to USMCA and I think one of the most bipartisan trade agreements probably in history.
Yeah, you mentioned that you've not historically been a big fan of tariffs, which is true of a lot of people in your party.
And we didn't really see much public pushback from Republicans in Congress to what we've seen over the last few days.
Why is that?
Well, it's all still very fresh as well.
And I think looking at what the response has been from Canada and Mexico shows that we'll hope for a negotiation, ultimately cooperation by our trading partners and move forward from there, hopefully in a productive way.
So during Trump's brief spat with Columbia, there was talk of potentially legislation to back up those tariffs.
Do you expect Congress to actually legislate on tariffs, whether it's reinforcing some of these one-off actions or something a little bit more formalized?
Well, I don't expect Congress to ultimately have the votes to just grab everything back.
And I think, however, watching the administration and hearing from the administration on a vigorous trade agenda, I think can lead to some positive results.
We saw that last time.
And I say that, again, not as a huge fan of tariffs, but a vigorous trade agenda from the previous Trump administration led to USMCA. led to a preparation of a trade agreement with Kenya, for example, that was pretty much ready to go and then nothing was done by the Biden administration.
In fact, the Biden administration said, well, we'll talk to Kenya, but not about tariffs, even though Kenya is already in a GOAT country with tariff relief.
I'm still bewildered by the fact that so little was done, but even 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, what the opportunities can be across the continent of Africa, and then we aren't as dependent perhaps on some of our other trade partners as we have become.
Yeah, in terms of opportunities, I mean, it doesn't seem like there's much talk of expanding our exports right now.
And Nebraska, your district, agricultural trade is a key component.
So would you like to see more of a focus on that?
Or, I mean, just to sort of extend this out, right, like the trade war, a lot of the way this might play out is just retaliation on U.S. agricultural exports.
We might be going the other direction.
That's a concern.
Certainly it is.
And, you know, former committee chairman Kevin Brady was always quick to say in response to questions about buy American.
He said very appropriately, let's make sure that we can sell American.
Now, that's important to my district, obviously, a huge agriculture district.
But I also think that our engagement in the world that has been lacking so much, other countries expect more of us.
I mean, you look at the Indo-Pacific Economic Framework, IPEF, I've nicknamed that IPUF, because it was such a light touch when other countries were expecting more out of the United States of America.
They weren't seeing it.
And now we have a new administration.
And clearly, President Trump has higher expectations of our trading partners.
And I think they're taking this very seriously.
And a vigorous trade agenda, I think, can end up helping our country, helping elevate our engagement around the world.
Do you worry that some of these actions will make it harder for the U.S. to reach new trade agreements?
Because, you know, for example, the tariffs that he threatened on Canada and Mexico would essentially blow up USMCA.
And so, you know, the question becomes, well, why negotiate a trade deal if the president might go after those countries for drug trade stuff?
Well, when you look at what USMCA did, Trump, I like to remind folks that that was a Trump priority amidst a Pelosi speakership, and it got done.
If that can get done, pretty much anything can get done.
But it extended into a new administration.
And I'm glad we had that when I see that Mexico attempted to shut out our biotech corn, for example.
Now, naturally, I would probably be concerned about that because of my district being the number one producer of that product.
But it was such a flagrant violation from Mexico of the trade agreement, and that took about four years to finally get worked out.
Sadly, President Biden had nothing to say about it ever.
But, you know, it's not about a lot of these trade interactions and trade agreements aren't about just the short term.
It's more about the long term and how the world views us as engaging.
And obviously, they want access to our markets, number one market in the world.
And we've tended to give other countries more access to our markets than they've been willing to give us access to theirs.
And President Trump is drawing more attention to that.
I think that that's a fair analysis.
There can be a variety of responses of 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, and they're seeing that.
Just on principle, do you think that countries that have free trade agreements with the U.S. should be excluded from some kind of universal tariff?
I think, you know, I would be interested in that, but again, the details and the fact of the matter is, USMCA is a little bit different than other trade agreements as well, just as an example.
And so there's some updating to do.
And that's why I think engagement and really elevating the trade discussions are what are so important and what were so lacking four years prior that obviously President Trump's approach is a little bit of a shock to the system because so little had happened.
And I think we're seeing differences now moving forward and we need to be ready for even more discussions moving forward.
On China, you know, Treasury Secretary Besson has talked about how China hasn't lived up to some of its obligations in terms of ag purchases.
Is that something that you've talked to him about or anyone else in the administration?
Well, that is a huge concern that a previous Trump administration had China phase one, phase two.
Those numbers weren't met even though those commitments were made.
So that'll get more discussion here moving forward, probably quite a bit even today.
Do you support this latest round of 10 percent tariffs on China?
You know, like I said, I'm not a huge fan of tariffs, but I understand they need to be a tool in the toolbox.
And we've seen an unlevel playing field.
And so 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.
And there's a lot of room for improvement.
And so I want to keep an open mind in terms of how best to approach that.
And ultimately, I want to be careful that we're not going to see huge increases in costs to consumers.
That can hurt us economically as well.
Yeah, well, and just on China specifically, I mean, I know you've said that you're not a big fan of tariffs, but do you feel like China is different, where maybe these tariffs feel a little different than some of the other countries because they have various forms of trade barriers?
Well, every country is going to offer a little different dynamic on trade, whether it's geographically or philosophically or technologically.
So naturally, the White House has indicated that it's different as well, just in the difference of the numbers, the 10% compared to the 25%.
So, you know, let's talk about retaliation a little bit.
China has rolled out some retaliation this morning.
It seems a little bit targeted.
But if these trade wars expand, we could see a lot more retaliation.
We saw Canada had a bunch of agricultural products that were on there.
So do you expect Congress to top up some of these funds for making farmers whole or partially whole for some of this retaliation?
Well, I think that 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 so whatever might be done, I hope, is very temporary in need and temporary in its overall application.
But I mean, to some extent, the President is just moving ahead with these tariffs, right?
And so you kind of might just have to, I mean, I guess Congress could respond, but you could just take it as an input.
I mean, if retaliation is coming, retaliation is coming.
And so, you know, I guess do you support being prepared in that situation?
We do need to be prepared, and so we want to be effective in our approach.
And like I said, I think folks across the economy have been preparing for these 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 the expectations.
And I think ultimately, I think our trading partners expect this 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.
But 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 the 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 the need to extend that or make it permanent.
So we're having obviously vigorous discussions on how best to treat those numbers moving forward and how we can look at the fiscal matters facing our country.
Now some would suggest letting everything expire just helps our economy and our debts across the board.
I doubt that to be the case.
So we need to, with a fine-tooth comb, look at the spending side, look for savings there, look at the 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 the many, many inversions that were taking place before TCJA, but not after.
And so it's interesting to hear critics of TCJA describe it in a way that it's just not very accurate.
But we are more competitive as a country because of TCJA, whether it's the corporate rate, whether it's RD leading to an environment of innovation, and ultimately, post-TCJA, revenues were up.
That is often not reflected on by critics as well.
But policy is all about trade-offs, right?
And you've mentioned multiple times that you're not the biggest fan of tariffs.
But I guess do you support having a lower income tax but higher tariffs if that's the trade-off you have to make?
Well, I'm uneasy with that clearly.
But When you look, and I tell people that tariffs, you know, the most successful tariff was one that doesn't generate any revenue, but is 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 because that speaks to the fact that it's just another tax.
So we want to be aggressive and effective with the application of tariffs moving forward and ultimately level that playing field.
And you were just extolling the virtues of the TCJA, which it seems like at least part of that is to spur productive business investment.
Are you worried that this trade uncertainty generally, whether there are tariffs or not, there's sort of this sort of Damocles hanging over the situation of whether or not we're going to have more tariffs.
Do you worry that that's going to stymie business investment and slow the economy?
Oh, there's that potential moving forward, but I also think the urgency of getting this worked out is a major dynamic that brings folks ultimately together to arrive at an agreement and hopefully in this case that we've been reading about over the last few days that brings about more cooperation from our trading partners, whether it's fentanyl or other areas as well.
Are you hearing from businesses?
I mean, what have you been hearing in the last few days from people in your district as people sort of digest the fact that we might have tariffs on our biggest trading partners?
I heard from a manufacturer who said they need zinc in their product and the only place to get it is Canada.
Now, this dynamic was very similar during the previous Trump administration.
The exclusion process was vigorous and I think and I hope that we can move forward in a similar way this time if necessary.
But we need to be mindful of what it does to our domestic manufacturers if the only place to get, in this case, zinc is from Canada.
I doubt that it's very feasible to find a domestic, you know, stand up a domestic source of zinc in a timely fashion.
So let's deal with the realities that exist and ultimately, though, have the expectation, the higher expectation of our trading partners to engage in a substantive and effective way.
Do you think that the administration is sensitive to these types of concerns?
I do believe they are.
Looking back at the previous Trump administration, they showed that they were sensitive to the various concerns that domestic manufacturers had on their inputs.
So, yes.
So I do want to talk about you're the head of the trade subcommittee.
What's on your agenda?
What do you want to get done?
Well, 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 the dispute resolution panel that was formed in response to Mexico shutting out our corn.
But one thing I've really come to appreciate working on trade issues is the fact that the world is watching.
The world is watching, you know, what is our response, for example, to Mexico shutting out our corn.
The world was watching when all sorts of folks said USMCA, you know, NAFTA could never be renegotiated, and yet it was a priority, and it got done.
It got done in a bipartisan fashion.
And it was my hope, you know, four years ago, about now, that the success of USMCA passing in such a bipartisan fashion would actually tee up the opportunity to use a similar framework with other potential trade agreements around the world, and just did not happen.
So I think we've learned a lot over the last four years, call it eight years.
And moving forward, I think all of that is very instructive for us to take away, you know, look at that data and that cooperation.
And the world is changing a lot every day.
So we need to be mindful of how we can modernize our policies, even though, for example, USMCA, yes, it seemed to be an agreeable framework.
Times are different now, perhaps.
Let's see what else needs to be changed moving forward.
And I just see more engagement, a higher level of engagement.
And I point back to early Trump administration before, when even in a district like mine, the issue of trade was becoming more negative than it should have been.
And so President Trump then elevating the discussions on trade actually elevated the discussions across districts like mine and I think across America for a more accurate discussion of what trade policy is, what it can do, what it 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 of this.
But also, our trading partners have expected this.
And I think they expected more out of us over the last four years as well.
And they didn't get it.
So times are different.
Do you have any thoughts at this juncture as to USMCA, how that might be improved?
Well, we'll go through that process.
I think that looking at what Mexico tried with shutting out our biotech corn, of course, we won, what was it, seven points of that case, all seven points we prevailed on.
And so I'm wanting to learn more why they thought that that would be acceptable.
Because it kind of undermines, and I'm concerned that so little response, well, actually no response from President Biden himself, again, the world saw that or failed to see a response from President Biden when he could have said something in his own style.
I would respect that.
And as I've told people, he didn't even need to stand in front of corn stocks in a field to send the message that what Mexico had done or was about to do for a lot of the term was wrong.
And it undermines all of rules-based trade.
Let's be 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 a rules-based trade can deliver more,
as it has tended to do over time, but also to set out a clear path for resolution when necessary.
Well, speaking of rules-based trade, what about the World Trade Organization?
Is that sort of a non-factor now?
Do we still care about the WTO?
You know, its operation and structure as a consensus-based body, I just, I don't see it being as relevant as I would like it to be and ultimately what it was intended to be.
You look at how we allowed the 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 the Biden administration that we would give away intellectual property from our country.
And there was not the capacity to produce the vaccines.
I mean, the fact that we would say, hey, it's okay, we're going to allow other countries to have access to this intellectual property with the vaccines.
Well, the intellectual property, yes, that's valuable, but so is the 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.
Well, thank you so much, Congressman.
That's all the time we have.
Up next, we have a conversation between the White House Senior Counselor Peter Navarro and Politico's very own White House Bureau Chief, Dasha Burns.
dasha burns ▲ ● ▼
Good morning.
Thank you so much for doing this.
You're a little bit busy these days.
peter navarro ▲ ● ▼
Lovely audience, Sherry.
dasha burns ▲ ● ▼
Great audience, always a great audience.
We were just talking backstage a little bit.
You've been around the block a few times with this president.
How different is 45 versus 47?
peter navarro ▲ ● ▼
Quantum leap, I would say.
dasha burns ▲ ● ▼
Quantum leap.
peter navarro ▲ ● ▼
Quantum leap.
Here's the thing.
I am one of only three people who was with the boss from the 2016 campaign all the way till now.
Stephen Miller, who he may.
Anybody heard of?
You might have known.
dasha burns ▲ ● ▼
I think a few people know that name.
peter navarro ▲ ● ▼
And Dan Scavino, who is the president's great tweetmeister, or now truthmeister, as the case may be.
dasha burns ▲ ● ▼
Experts.
peter navarro ▲ ● ▼
Back then, we were at the bottom of the learning curve, and there was tremendous resistance, not among the American people, but among the media, the intellectual elites of this country to the president's agenda.
dasha burns ▲ ● ▼
And Republicans.
peter navarro ▲ ● ▼
I include them in that whole ball of wax.
And the things we were able to do then, with respect, for example, to the historic China tariffs, to renegotiating the Shafta-NAFTA treaty, solar, things like that, the deregulation, all of that was met with skepticism initially.
And it turned out to be the road to prosperity.
But it was a tough road.
There's a lot of bumps in that road, a lot of potholes, a lot of 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.
He is hitting the ground running.
In terms of personnel, the great Sergio Gore, who I came to know as a publisher or one of my books, he's a great friend of the president.
He's doing an amazing job with personnel.
We've got more people already in the bureaucracy than we had at this time.
And most importantly, I think that 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 the fair trade issues.
So we're moving at warp speed, and it's good for the American people.
It's going to be a golden age, Dasha, I think.
And as he says, let's see what happens.
dasha burns ▲ ● ▼
Well, I got to tell you, when it was announced that you were sitting down with us, I got a lot of people coming up to me, very excited to hear from you because of everything that we've seen in the last 24 to 48 hours.
This is a very timely interview.
You guys are a lucky bunch here because I think everyone is curious to hear directly from you.
So take us behind the scenes a little bit here because we were moments away from tariffs on Canada and then suddenly things changed.
What can you tell us about that phone call with Canadian Prime Minister Justin Trudeau?
How did all of that play out?
peter navarro ▲ ● ▼
I think what's important to start with is day one.
We were in the Oval.
He had signed hundreds of executive orders.
And the second, the last order he signed was the American First Trade Policy Presidential Memorandum.
And Dasha, what that did, and I would urge everybody here to look at that if you're curious about the trajectory of trade policy.
It set down across like 15 different dimensions all the different things the president intends to do in trade policy.
Talking about a global tariff, that was the first section.
Everything we're doing is going to be data-driven.
That presidential memo sets forth a requirement to do investigative studies to kind of level set everything, see where we're going.
But there's currency manipulation, there's export controls, there's discussions about getting the steel and aluminum tariffs repaired.
So that's the context for what's going on right now with respect to Mexico, Canada, and China.
And I think whenever folks are listening, watching the media, reading about it in the paper, I think the biggest failure of the media is when they talk about tariffs, they are always kind of warning you about the downside rather than explaining why.
And in this particular case, Dasha, the?
Why is 75,000 Americans dying every year from deadly fentanyl that originates as 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 particles of fentanyl that spikes everything from heroin and speed to cocaine.
So what's happening as you see this is the president fighting a drug war.
This is not a trade war.
Media immediately came out and talking trade war and this, that, and the other thing.
This particular action is a drug war.
And what we've seen is a lot of pearl clutching when this was announced.
But we've also seen immediate results from Mexico and Canada.
Now the Mexicans Been very cooperative.
And Senator Marco, excuse me, Secretary of State Marco Rubio, love the guy.
He's been, and I want to talk about the broader trade team in a minute, if you wouldn't mind, but he has done a very good job along with Stephen Miller and personnel at DHS going through a checklist of things that we need from Mexico.
So we're making progress on that front, hence the 30-day extension.
Prime Minister Trudeau, 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 that ladder.
And I think he looked at the problem.
He looked at what Mexico is willing to do.
And I think he came to understand that this is a drug war, not a trade war, that what the president is concerned about in this case is American science.
So we got the news yesterday on a call.
He was on a call, President Art of the Deal.
We're getting a fentanyl czar.
We're getting billions of dollars spent on this.
We're branding terrorists, drug cartels as terrorist organizations.
And there's a number of other steps.
dasha burns ▲ ● ▼
A lot of that's Canada, though, was sort of already in the works.
And I'm curious what's going on with the Canada of this, because Canada and Mexico, when it comes to the drug war and when it comes to immigration, two very different stories.
I mean, only 2.2% of U.S. border fentanyl seizures are at the Canadian border.
I mean, customs agencies 43 pounds of fentanyl at the Canadian border in the last fiscal year compared to 21,000 pounds in Mexico.
So what's he really after with Canada?
peter navarro ▲ ● ▼
So interesting you say that.
The problem is, first of all, that the Mexican drug cartels are rapidly expanding in Canada, and that's a danger.
Second of all, there was something, I don't know if you noticed this, it kind of went unnoticed by much of the press, but there's this thing called de minimis.
Are you familiar with that?
dasha burns ▲ ● ▼
Explain.
peter navarro ▲ ● ▼
Okay, see, this is the buried lead.
De minimis is a rule that says that anything of $800 or less that comes across our borders is not subject to tariffs.
And we are sui generis in terms of having that kind of policy.
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 not 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, Dasha, is say de minimis is suspended for these three countries, and we're going to be able to examine that.
Now, the other thing is, this is not just a drug war, it's a terrorist war and a border invasion war.
And these, if you read the executive orders carefully, that's all embedded in that as well to support the use of the International Emergency Economic Powers Act.
And we're in a situation now where almost 100 people have come in through Canada on the terrorist watch list alone.
It only takes one to blow something up here.
We know that.
So Canada's visa issues are big, so we've got to kind of deal with that.
And the bottom line is the end game, what's the end state?
The end state is secure borders, only legal immigrants coming across the borders, countries taking back the illegal aliens that were coming here during the Biden regime, and stopping the slaughter. of Americans.
I don't know how anybody could disagree with that.
The only issue is how we get to that.
dasha burns ▲ ● ▼
Well, do you think businesses see it that way, though, as a drug war, not a trade war, particularly businesses that do a lot of trade and rely heavily on our partnerships with Canada and Mexico?
What do you say to American businesses and potentially foreign businesses that want to invest here who are concerned about the uncertainty going forward?
peter navarro ▲ ● ▼
I think it depends on how well we do our job right here.
dasha burns ▲ ● ▼
How well do you think?
peter navarro ▲ ● ▼
The media does job.
The media does a terrible job.
The media...
dasha burns ▲ ● ▼
But how well are you doing?
Because Trump said he was going to...
peter navarro ▲ ● ▼
Let me finish the thought.
The media does a terrible job covering trade issues because the first thing out of their mouth is there's going to be...
I did...
I told you I was going to say.
dasha burns ▲ ● ▼
That was not the first thing out of my mouth, sir.
peter navarro ▲ ● ▼
No, no, no, no, I'm not accusing you.
dasha burns ▲ ● ▼
Well, but let me ask you this, and I'll let you read yourself.
peter navarro ▲ ● ▼
I just want to make this point.
All right, all right.
So again, 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, okay?
Donald Trump's presidency would significantly weaken the country, driving the U.S. into a lengthy recession with nearly 3.5 million job losses, 7 percent unemployment rate, according to Moody Analytics.
So Politico writes that.
The reality was real GDP increased almost 3% in 2018.
Household income went.
And of course, as you know, you 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 all the Americans dying, rather than talking about the threats from terrorism, rather than talking about how illegal alien crime on American citizen crime is out of control, rather than talking about how real wages are going down.
And in the government statistics of our own government, which shows millions of illegal aliens have displaced American workers, all we hear about is the danger of a trade war and threats to our economy.
And that's wrong because what we have here, what's different here, your first question, what's different?
What's different is we have the experience of the first term, historic tariffs on China, historic renegotiations of trade deals, solar, steel, and limit tariffs.
All we got was prosperity.
dasha burns ▲ ● ▼
But a lot of those deals were focused on the economy.
And I think so much of his promises on the campaign trail were about getting the American economy back, lowering prices for American families, making it easier for businesses to operate here.
I want to read you a quote.
An economic researcher sent me this.
He said that he has talked about tariffs as a replacement for income taxes, as essential for U.S. manufacturing, as a means of coercion for his territorial ambitions.
Now they just spent a bargaining chip for small gains on drug interdiction.
Has ambition been tempered by reality here?
This is a researcher at Heart Research.
peter navarro ▲ ● ▼
Yeah, okay.
So you met my research team back there, right?
dasha burns ▲ ● ▼
Yeah.
peter navarro ▲ ● ▼
Okay, so what I asked my, I got some folks work with me in the office, and they are busy compiling a list of everything everybody said about Trump's first term in the media, on the Hill, and everywhere in between.
And it's like breams of data about how people say that kind of stuff, and it just doesn't match. with reality.
I think it's this is probably a good time to make this point.
We, the United States of America, as President Trump says as often as he can, is the world sucker.
We have the lowest tariffs in the world.
That's a fact.
We have the lowest non-tariff barriers in the world.
That's a fact.
We run a $1 trillion, $1 trillion a year trade deficit, which has, among other bad things besides shipping off our factories and jobs, that's like transferring a trillion dollars of American assets to foreigners, many of whom are not our friends, every single year.
And we do nothing about that.
Nothing.
And the consequences of that are millions of jobs lost, millions of jobs lost, tens of thousands of factories shut, and a world in which we used to have blue-collar folks living behind white picket fences.
Many of them, particularly in the swing states, Dasha, are divorced, alcohol, drug addicts are dead.
So the context for the president's fair trade agenda is simply to have fair trade.
The president, today he talked about how Europe is sticking it to us with their VAT tax, and we run a $350 billion deficit, and they won't buy our cars.
Japan, do you ever see an American car in Tokyo?
You ever?
No, you don't see that.
Why?
dasha burns ▲ ● ▼
Sir, to that point, these concessions that we got from Canada and Mexico are not concessions on the economy.
peter navarro ▲ ● ▼
Why do you think they're minor?
And besides, it's a 30-day thing.
It's like this is the kind of spin.
I thought it was from the Wall Street Journal because they came out with that crap.
10,000 more troops on the border in Mexico, another 10,000 in Canada, a fentanyl czar.
They agree that drug cartels are terrorist organizations.
dasha burns ▲ ● ▼
So in 30 days, is he going to ask for more concessions on the economy?
What happens in the 19th century?
peter navarro ▲ ● ▼
What's the boss's three favorite words?
You know what, let's see what happens, right?
That's four, actually.
I know you're ready.
unidentified
None of us are going to be able to do that.
peter navarro ▲ ● ▼
That'll be the headline tomorrow.
Navarro gets his numbers wrong.
dasha burns ▲ ● ▼
No, but I think it's a valid question from, again, particularly...
peter navarro ▲ ● ▼
Reframe the question.
I don't quite understand what you're asking.
dasha burns ▲ ● ▼
Okay, the question being, Trump ran on economic promises in addition to immigration.
These concessions from Canada and Mexico deal with, potentially deal with a drug problem and an immigration problem.
Is he going to escalate to also ask them for concessions on economic issues, not immigration issues?
So why not?
peter navarro ▲ ● ▼
First of all, let's talk about the word concessions.
I mean, look, among nations, what I love about President Trump, among other things, is he's able to talk candidly to world leaders, and they respect him.
And so when you call something like that a concession, I think that diminishes Mexico and Canada in a way, which is not really productive.
What Canada and Mexico have agreed to do is begin to enter into a dialogue and specific actions to deal with 75,000 Americans getting killed every day, terrorists coming in, and a border invasion.
And that's a good start.
But it's a 30-day interim period.
Now, to your question about what about all these other issues like the trade deficit and economic issues, I refer you back to the presidential memo on day one.
I refer you all to that.
And we're going to handle the problems that unfair trade inflict, and that's the proper word, upon the American people through a dozen different kinds of approaches.
In this particular case, this IEPA action is designed expressly and explicitly to deal with a drug war.
And that's what that one does.
That doesn't rule out doing other things on many other things.
And so all you've got to do is see how it's going to unfold.
I can say that the first 100 days are laid out in that.
I think it's probably a good time to talk about the team here, if I may, Dasha, because what's important about the trade team is it delegates different kind of tasks and authorities to each of the different ones.
So you have Howard Lutnick is the Commerce Secretary nominee, and his vote comes up next week.
He's going to take point on a lot of the tariff issues, particularly what we call the 232 things that have to do with things like steel and aluminum, essential medicines, critical minerals and the like.
And the issue there is that are we in a position as a country where imports are harming the ability of us to produce those things in a way which threatens the safety and security of the country.
So he's going to be handling stuff like that.
You go to Scott Besant, the Treasury Secretary.
I happen to know Scott well.
He actually was the publisher of my first Trump book memoir, the in Trump time one.
I got to know Scotty really well.
The guy is Howard and Scott, they're the new blood.
They are like geniuses in their own right.
It's a delight to work with them.
Scott will handle things like the CFIS, which governs what foreigners can buy things, the currency manipulation, things like that.
You got Jamison Greer.
He was Bob Leidheiser's lieutenant, as it were, during the first term.
Bob was the United States trade representative who renegotiated under the direction of President Trump the terrible NAFTA SHAFTA treaty.
And so that's coming up, as the guest earlier talked about the importance.
That's up for its four-year review.
dasha burns ▲ ● ▼
What will you advocate on that front?
peter navarro ▲ ● ▼
Well, see, the beauty of that is that I don't advocate anything.
I let people do their jobs.
Jameson will take point on that under the direction of the president, and everybody will have a hand on that.
The fourth person to mention is Kevin Hassett.
He was the chair of the Council of Economic Advisors.
He's a superb economist, and he understands the macro aspects of tariffs.
We are going to, if President Trump succeeds like he wants to succeed, we are going to structurally shift the American economy from one over-reliant on income taxes and the Internal Revenue Service to one which is also reliant on tariff revenues and the external revenue service.
dasha burns ▲ ● ▼
Has that been created?
peter navarro ▲ ● ▼
This is going to be, it's in the presidential memo.
And that's going to be under Howard Luttnick's and Scott Besson's thing.
And it's a beautiful thing.
Here's the thing, Dasha.
Prior to 1913, I don't know if you know this.
Probably nobody knows this unless you're a hardcore looker.
This government, the United States was built on tariffs.
Jefferson, Hamilton, McKinley, McKinley ran on a platform.
I'm a tariff man running on a tariff platform.
And Boss got this great chart, right?
Imagine this, where it shows the percentage of revenue from tariffs.
dasha burns ▲ ● ▼
He loves it.
peter navarro ▲ ● ▼
It's up there, right?
And it's like near 100%.
It goes along like this, and then we pass the income tax, and it goes just like this, flat lines.
And the point is that tariff revenues are going to play a very important role, and it's going to be part of a long-term transition.
See, as President Trump loves to say, countries don't have to pay tariffs if they invest here.
dasha burns ▲ ● ▼
Well, let's talk about China, because that is a big factor here.
I'm curious why 10% for China, an adversary, but 25% for an ally like Canada.
peter navarro ▲ ● ▼
Well, it's the size of the market and the economy.
And we already have substantial tariffs on communist China.
dasha burns ▲ ● ▼
Trump talked about on the campaign trail about 60% tariffs on China.
Is that still on the table?
peter navarro ▲ ● ▼
Again, I urge everybody to read that presidential memorandum and understand that we are going to proceed in a measured way using investigative studies that will be foundational to the actions taken.
Everything is going to be data-driven.
dasha burns ▲ ● ▼
60% isn't supermeasured, so that's not likely to be.
peter navarro ▲ ● ▼
And in that memo, Dasha, what Jamison Greer is going to do as the USTR is he's going to go back and recalibrate the Section 301 tariffs on China and see exactly what they've been doing.
Have they lived up to the Phase 1 agreement that they signed?
Have they stopped what I at one point called the seven deadly sins, things like intellectual property and currency manipulation, the use of state-owned enterprise?
This is going to be done in a measured way, and it's going to be done in a way that will benefit the American people.
And we're not going to get headlines speculating about what the president may or may not do.
We're going to let him do his thing because by now it's trust in Trump.
This is the latest example of when he does stuff and it looks like things are a little chaotic.
It's not.
It's genius, and he delivers, and that's what...
dasha burns ▲ ● ▼
So the chaos is not chaos, is what you're saying.
peter navarro ▲ ● ▼
Not to us.
dasha burns ▲ ● ▼
Let me ask.
China announced retaliatory tariffs, right?
They're talking about levies of 15% for U.S. coal and LNG, 10% for crude oil, farm equipment, some autos, imposing export controls on five key metals, a probe into Google.
What should American businesses that rely on these goods prepare for?
peter navarro ▲ ● ▼
Let's see what happens with the call today.
We could have sat here yesterday and you would have said the same thing about Mexico.
dasha burns ▲ ● ▼
So there's a possibility that China gets an extension and a delay as well?
peter navarro ▲ ● ▼
It's up to the boss.
I never get ahead from the boss.
That's why I'm sitting here.
If I got ahead of the boss, I never would have lasted this long.
dasha burns ▲ ● ▼
The president also told reporters recently that import taxes will definitely happen with the EU and possibly the UK as well.
What could that look like and how soon could that happen?
peter navarro ▲ ● ▼
Let's see what happens.
It's part of the presidential tax.
dasha burns ▲ ● ▼
Oh, Peter.
peter navarro ▲ ● ▼
Look, I'm part of a trade team that is the finest trade team ever assembled.
It's a definite upgrade from the last time around.
We're all pulling in the same direction, and we've got a combination of several newcomers and three seasoned veterans.
And I just, we're going to go through the presidential memorandum agenda, and it's going to be a beautiful thing.
You've just got to be patient.
dasha burns ▲ ● ▼
We're not good at that.
peter navarro ▲ ● ▼
No scoops here today.
dasha burns ▲ ● ▼
Are universal tariffs?
peter navarro ▲ ● ▼
No scoops.
dasha burns ▲ ● ▼
Are universal tariffs still on the table?
peter navarro ▲ ● ▼
The first section of the presidential memorandum makes it clear that we are studying the damages that are caused by a $1 trillion trade deficit.
The president will figure out what to do about that if the study indicates that there are significant damages.
And it's mentioned right in that, the possibility of supplementary global tariffs.
Yes.
The president has made no secret about it, but let's not, again, we've got to be measured about this.
dasha burns ▲ ● ▼
Well, the reason I ask.
peter navarro ▲ ● ▼
Both in the media and everybody else, because all that happens is people get stirred up and then you figure out, well, oh, wow, that was pretty good.
We're a step closer now to fewer Americans dying from fentanyl.
Whereas yesterday, it was like everybody's...
unidentified
So I'm just...
dasha burns ▲ ● ▼
No, but people get stirred up because you also see markets reacting.
You see real impact in the financial sector.
There are businesses that I've been talking to who say, look, we're behind Trump.
We're supportive of him.
But the uncertainty is a challenge.
It's difficult for businesses to make decisions and for American families to make decisions when they don't know where things are headed.
peter navarro ▲ ● ▼
Before I came here, I was on Maria in the morning on Fox Business.
dasha burns ▲ ● ▼
Did she scoop me?
unidentified
Fox?
peter navarro ▲ ● ▼
Not at all.
But she did provide the answer to this question.
I'm going to give it to you.
And it's just, I mean, it's 400 North Capital.
It's a 10-minute walk over here.
And the point I made there is that when you get all these day traders and all this volatility in the market and the market goes up or down, whatever, on all of these rumors that the media loves to throw at you in big headlines rather than kind of look kind of more deeper at the thing.
My point here, Dasha, is that what is happening with respect to the trade agenda is happening within the broader context of a larger economic agenda that points inexorably towards growth, rising real wages, and stability.
Let me just walk you through it.
I remember it was one of the most fun days I ever had.
It was the day after the election in 2016 and got about two minutes of sleep and I'm on squawk box, CNBC, and get in the chair and Andrew Becky and Joe are, you know, they want to eat me alive because the futures are dead red now.
I mean, it looks like the market's going to totally melt down because nobody expected Trump to win.
And it's like I get on there and it's like, all right, let's look at the chessboard here.
What is Donald Trump going to do?
It's like four wheels on the Ferrari here.
You're going to have the strategic energy dominance and cheap oil.
And that's exactly what he's going to do this time.
And that's going to be the biggest inflation fighter we're going to have.
We're going to do dig, let me finish the four, this is important, deregulation.
We're going to hit that again, but also add a doge component.
That's what we call a positive supply shock.
That's good for all the businesses who are concerned.
Cheaper oil.
And cheaper oil, by the way, isn't just cheaper gasoline prices and home eating oil prices.
It's cheaper fertilizer prices.
It's all across.
Then it's the tax burden, which is going to be lowered and it's going to be lowered, by the way, by the ability to use tariff revenues in the negotiations with Congress to what they call score that.
And then the fair trade to the, again, if you do the math, if you're like a geek and you know this, it's like when you run a trade deficit, that's a direct subtraction to the real GDP growth rate if you just do that.
So if you lower the trade deficit, you get growth.
So the point here is that as all of this trade policy goes forward, you're going to have all these other elements of the Trump agenda pushing our economy forward in a way which is going to simultaneously create prosperity and reduce inflation.
And that's a beautiful thing.
And that's what I try to assure businesses about.
dasha burns ▲ ● ▼
Well, that's a good point.
But when you see strategy in the chaos, not every business sees it that way.
The markets don't love uncertainty.
Businesses don't love uncertainty.
We don't know what's going to happen 30 days from now with Mexico and Canada.
Do you worry that this whiplash we've witnessed could discourage investment?
Like, why would businesses invest in new factories, hire workers when they don't know how this is going to unfold?
peter navarro ▲ ● ▼
My point here, if you remember anything, this is.
My point here is that the media itself is in part responsible for the chaos because it doesn't accurately report two things.
One, the broader context that these policies are happening in, and the fact that in the first term of the Trump administration, none of these sky or falling kind of things happen.
dasha burns ▲ ● ▼
But you said this is night and day.
It has very different things.
peter navarro ▲ ● ▼
It is night and day.
And one of the reasons this is night and day is every time somebody says in the media that the sky is going to fall, I go, wait a minute, you said that, you know, and I can give you a date where you said that back in 2017 or 2018 or 2017.
And you were wrong.
dasha burns ▲ ● ▼
To the American people, sir, who voted for President Trump because they wanted lower prices.
They wanted a stronger economy.
Can you promise American families that this tariff strategy is not going to lead to higher costs for them?
peter navarro ▲ ● ▼
Drill, baby, drill, deregulation, tax cuts.
Let's walk through the tariffs.
dasha burns ▲ ● ▼
Can you make that promise to the US?
peter navarro ▲ ● ▼
Let's make the tariffs.
unidentified
Am I a candidate for any office here?
peter navarro ▲ ● ▼
No, I'm not.
dasha burns ▲ ● ▼
You're making big decisions for the money.
peter navarro ▲ ● ▼
Let me walk you through the economics and try to explain why we didn't have inflation the last time, okay?
This is important.
It's a simple point.
Because everybody said we were going to have inflation, right?
China and all that stuff.
dasha burns ▲ ● ▼
So let's just take a last time, but we do have limited time.
peter navarro ▲ ● ▼
I'm just going to make this point.
I can make this point.
That when we put a tariff on, as the biggest market in the world, on a country that is heavily export-dependent, the first thing that happens is they reduce their prices.
The second thing that happens is supply chains move around in a way to moderate any inflationary effects.
The third thing that happens is we get more investment here, not there.
That creates jobs and improve wages here.
So what I can assure you of, what I can promise you is that the President's agenda will create a golden age of prosperity.
Real wages will go up as they did in the first term of the Trump administration while they went down in Biden's.
We'll have robust GDP growth and we'll have security here from the steps that are taken, not just national security.
As we like to say in the White House, economic security is national security.
dasha burns ▲ ● ▼
So we're running out of time, so I just have a couple more questions.
The President did acknowledge himself that tariffs and some of his policies may come with some pain.
He said that in a Truth Social Post.
So should American people prepare to make some sacrifices in the short term for this longer-term vision he has?
peter navarro ▲ ● ▼
Look, all I can say is that the plans we have in place will lead to price stability far more than they had during the Biden regime and prosperity.
And again, you can't isolate the trade and not think about $50 a barrel oil.
Look, we had around $50 a barrel oil through the Trump term.
You know what it was during Biden's?
It was like 75 to 80.
You know what a price shock that is?
I mean, drill, baby, drill.
Again, the personnel of this administration are unparalleled.
You got Doug Bergham, who I had the great pleasure meeting while we were working on the Canada-Mexico drug war issue, and Chris Wright at Energy.
I mean, it's going to be a golden age, as the President says.
That's what I can promise.
dasha burns ▲ ● ▼
So what is the lesson, big picture, that we in this room, that American families, that businesses, and our trading partners should take away from the last 24 hours?
peter navarro ▲ ● ▼
Trust in Trump.
He's earned that.
Trust in Trump.
You saw what he did with trade policy in the first term.
You saw what he did over the last 24 to 48 hours.
This is how we roll, as it were.
And let's remember where this started, Dasha.
75,000 Americans.
I mean, somebody raise your hand if you don't know somebody who hasn't died of fentanyl.
Everybody in this room knows somebody either close to them or a friend or a friend of a friend who has died of a drug overdose and probably fentanyl.
That's astonishing.
And we say no more, no mas.
That ain't going to happen under Donald Trump.
So that's what this particular round is about.
It's a drug war, not a trade war.
dasha burns ▲ ● ▼
Well, and tangentially, big picture.
unidentified
What is the goal with the tariff strategy?
dasha burns ▲ ● ▼
Is it purely a negotiating tactic, or is he trying to remake some fundamentals of the American economy?
peter navarro ▲ ● ▼
Well, the goal of the trade policy, tariffs are but one tool of the trade policy, is to make sure that American workers and families face a level playing field in the international environment.
And that'll be measured by the jobs and factories that are created and by the fall from a trillion-dollar a year trade deficit down to zero.
And you'll see the rise of the External Revenue Service, and you'll be less hounded by the Internal Revenue Service.
And those tariffs are going to pay for things like no tax on tips.
dasha burns ▲ ● ▼
And is that still happening?
peter navarro ▲ ● ▼
Oh, that's happening.
dasha burns ▲ ● ▼
You can promise that?
peter navarro ▲ ● ▼
Yeah, take that to the bank.
That I can promise you.
dasha burns ▲ ● ▼
Is there a potential for a boy who cried wolf problem if you threaten tariffs back down, threaten terrorists back down, the pattern that we're seeing here?
Could you get into that cycle?
peter navarro ▲ ● ▼
Not with Donald Trump.
If Joe Biden or Barack Obama or anybody else tried it, but President, I mean, look, people are at war around the world because foreign leaders didn't respect or fear Joe Biden.
Think about that.
With one change, it was like Reagan coming in for Carter, hostages immediately released.
Peace.
You got to remember here, first term.
You asked me about what's different.
First term, we didn't have any wars.
North Korea wasn't shooting missiles up in the air, testing their missiles or setting off bombs so that they could take out Seattle.
Iran, we almost broke them and they were quiet.
Russia didn't invade anybody.
We dealt at least partially with the China issue on trade and would have finished that in a second term.
So that's the thing, Tasha.
The beauty of all this is that amidst all this speculation, Donald Trump has a record.
Trust in Trump.
dasha burns ▲ ● ▼
Let's look a little shorter term before I let you go.
In 30 or so days.
peter navarro ▲ ● ▼
You keep saying that, doesn't you?
Have you noticed that?
Just one more question.
dasha burns ▲ ● ▼
I know.
It is money.
peter navarro ▲ ● ▼
We're at zero on the clock.
dasha burns ▲ ● ▼
We're at zero on the clock.
I've got you too long.
You've got too much to share with us.
I promise you this is.
unidentified
It's not like I don't have anything to do today.
dasha burns ▲ ● ▼
We've got you traveled.
peter navarro ▲ ● ▼
Help the bus save the free world here.
And there's just one.
unidentified
Go ahead.
peter navarro ▲ ● ▼
One more question.
dasha burns ▲ ● ▼
One more question.
I'll let you.
peter navarro ▲ ● ▼
It better be good and you be the judge of that, okay?
No pressure.
dasha burns ▲ ● ▼
30 days.
30 days.
Some of the challenges that we've heard from our Canadian counterparts is that what the president wanted from them was somewhat vague.
They came up with some of those solutions.
Are there metrics you all are using over the course of these next 30 days to figure out, okay, is this working?
Do we need to push for more?
peter navarro ▲ ● ▼
That's where Secretary of State Rubio and Secretary Christy Noam and Stephen Miller and others come.
That's where the work of the negotiations go.
It's not just phone calls between the top leaders.
It's all the blood, sweat, and tears that go into those kinds of negotiations.
And what I would just say to the American people, I'd say to you, it's like you're in very good hands right now.
Very good hands.
This cabinet is, I can't imagine a finer cabinet right now.
The only thing I wish is that Hill behind us there would move damn faster getting confirmations done, not just at the secretary level, but at the undersecretary, the deputy secretary, the assistant secretary.
It's the tragedy of government, of this government, that it takes 18 months to get a government in place.
And that's almost half the time of a term of office.
And that shouldn't be.
dasha burns ▲ ● ▼
Almost half the time of this interview.
peter navarro ▲ ● ▼
I think you got your money's worth of checks in the mail.
dasha burns ▲ ● ▼
Thank you so much for your time.
And thank you all for joining us for this conversation.
Next week, we've got more for you.
Energy and agriculture.
So come back and serve, please.
I hope you'll come back despite the length of this conversation.
Thank you.
unidentified
Appreciate it.
Bye-bye.
On Thursday, Trump U.S. Trade Representative nominee Jameson Greer will be on Capitol Hill for his confirmation hearing.
Mr. Greer has worked in international trade law and previously served as chief of staff to the U.S. Trade Representative during the first Trump administration.
From the Senate Finance Committee, watch live at 10 a.m. Eastern on C-SPAN 3.
C-SPAN now, our free mobile app, or online at c-span.org.
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