MARIA: JOINING ME RIGHT NOW IS
U.S. COMMERCE DEPARTMENT FORMER
DEPUTY DIRECTOR, CHRIS GARCIA.
GOOD TO SEE YOU.
THANKS FOR JOINING US.
>> GOOD MORNING.
MARIA: WHAT'S YOUR VIEW OF ALL
OF THIS?
THERE'S A TRADE STORY HERE, A
NATIONAL SECURITY ISSUE AROUND
BEIJING AND OBVIOUSLY THIS
PRESIDENT IS NOT BACKING DOWN.
WILL THIS BE A PROBLEM FOR THE
ECONOMY IN THE U.S. AND MARKETS
HERE?
>> WELL, I THINK MARKETS NEED TO
BRACE, MARY
BRACE MMARY
BRACE MARRY
BRACE MARIA FOR A LONG AND
EXTENDED NEGOTIATION PROCESS.
CHINA HAS KICKED THE CAN DOWN
THE ROAD, TRIED TO RUN THE CLOCK
OUT ON PREVIOUS ADMINISTRATIONS.
THIS TIME THEY'RE TRYING TO RUN
THE CLOCK OUT ON THE TRUMP
ADMINISTRATION.
THE TRADING RELATIONSHIP IS LIKE
A BAD CONTRACT WITH YOUR CABLE
PROVIDER.
YOU KNOW YOU'RE GETTING RIPPED
OFF.
YOU KNOW YOU CAN GET A BETTER
DEAL SOMEWHERE ELSE.
IT'S NOT UNTIL YOU THREATEN TO
LEAVE THAT THEY TREAT YOU LIKE A
VALUED CUSTOMER AGAIN.
THIS TIME WE'RE DEALING WITH
TRILLIONS OF DOLLARS AND
NATIONAL SECURITY.
MARIA: YOU'VE GOT SUPPLIERS TO
HUAWEI, FOR EXAMPLE, SUSPENDING
BUSINESS AFTER THE BAN IN THE
UNITED STATES.
THESE ARE COMPANIES LIKE INTEL,
QUALCOMM.
THEY SUPPLY PRODUCT TO HUAWEI
AND THE TWO DO BUSINESS BACK AND
FORTH.
THIS WHIM
THIS WILM
THIS WILL IMPACT EARNINGS IN THE
U.S., CORRECT?
>> YES, IT WILL IMPACT EARNINGS.
YOU'RE CUTTING OFF A KEY BUYER.
THIS IS A HUGE HAY MAKER THE
UNITED STATES LANDED TO MAKE
SURE CHINA KNOWS WE'RE NOT
PLAYING GAMES.
IN CHINA DECIDES THEY WANT TO
COMPLETELY VIOLATE, FOR EXAMPLE,
THE IRANIAN SANCTIONS, WE SAW
THE OUTRIGHT BAN OF ZTE IN 2018.
THIS MIGHT BE A LITTLE BIT
DIFFERENT.
THIS IS A LITTLE BIT MORE OF AN
OLIVE BRANCH BEING EXTENDED BY
THE UNITED STATES, WE'RE DOING
IT ON A CASE BY CASE BASIS BUT
YOU'RE COMPLETELY BANNING THE
OUTRIGHT SALE OF SOFTWARE.
YOU'VE GOT HARDWARE THAT THEY'RE
NOT ABLE TO SOURCE FROM KEY
SUPPLIERS.
THESE ARE THINGS THAT WE HAVE
WARNED CHINA ABOUT FOR YEARS.
HAVE YOU TO STOP PLAYING THESE
GAMES.
HAVE YOU TO STOP CHEATING A AND
WE HAVE TO OPEN UP A FOR FAIR,
FREE AND RECIPROCAL TRADING
RELATIONSHIP WITH.
MARIA: WALL STREET IS WRITING
ABOUT THIS.
A COUPLE ANALYSTS BELIEVE THAT
WINNERS COULD BE NOKIA AND
ERIKSON.
THEY'RE WELL PLACED TO BENEFIT
FROM ANY DISRUPTION FROM HUAWEI.
GOOGLE REPORTEDLY CUTTING TIES
WITH THE CHINESE TELECOM CLIENT.
CHINA WILL NOT HAVE ACCESS TO
PARTS OF GOOGLE'S ANDROID
OPERATING PLATFORM, THE FUTURE
VERSIONS OF HUAWEI'S SMARTPHONES
THAT RUN ON ANDROID WILL LOSE
ACCESS TO THE POPULAR SERVICES
LIKE G MAIL AND YouTUBE.
SO GOOGLE, EVEN THOUGH AMONG
THOSE TECH COMPANIES THAT HAVE
BEEN ENTRENCHED IN CHINA, IT TOO
PULLING BACK FROM HUAWEI.
>> OH, YEAH.
GOOGLE, THAT IS THE HAY MAKER.
THAT IS THE HAMMER THAT'S BEING
DROPPED.
ANY U.S. SOFTWARE THAT USERS
THAT ARE USING A HUAWEI DEVICE
OR USED TO HAVING AVAILABLE AT
THEIR FINGERTIPS, THEY WON'T BE
ABLE TO USE THOSE.
IF THEY CONTINUE TO USE THE
EXISTING DEVICE, THAT MEANS
FUTURE SOFTWARE UPDATES WILL
LEAVE THEM VULNERABLE TO
ATTACKS.
IF YOU CONTINUE TO LIE, CHEAT,
STEAL, NOT RESPECT THE U.S.
TRADING REA LAYINGS SHIP AND THE
NORMS, THEN JUST LIKE SEINFELD
SAID, NO SOUP FOR YOU.
MARIA: ALL RIGHT.
SO WE'VE GOT MARKETS I GUESS
THAT SO FAR ARE SIDING WITH THE
PRESIDENT.
IT HASN'T BEEN ALL THAT BAD IN
TERMS OF PERFORMANCE.
SO YOU FEEL LIKE MAYBE, I DON'T
KNOW IF THEY'RE UNDERESTIMATING
THIS OR JUST EXPECTING A DEAL AT
SOME POINT BUT SUPPORTING THE
PRESIDENT'S ACTIONS.
WHAT ABOUT USMCA, THE PRESIDENT
LOOKS TO MOVE THIS TRADE
AGREEMENT ALONG.
HE WITHDREW THE TARIFFS ON
BILLIONS OF DOLLARS IN STEEL AND
ALUMINUM FROM CANADA AND MEXICO.
KEVIN MCCARTHY AND DEBBIE DINGLE
JOINED ME YESTERDAY ON SUNDAY
MORNING FUTURES.
BOTH SAID THIS IS A GOOD SIGN AS
THIS IS EXPECTED TO PASS BUT
NANCY PELOSI HAS TO BRING IT TO
THE FLOOR.
HERE'S WHAT THEY SAID.
>> ONE OF THE REQUIREMENTS THAT
DEMOCRATS HAVE HAD IS THAT THEY
CHANGE THEIR LABOR LAWS.
THAT HAS PASSED THE SENATE IN
MEXICO.
SO NOW THERE IS NOTHING HOLDS US
BACK TO PASS THE BILL THAT WOULD
BRING MORE JOBS TO AMERICA AND
THE TIMING COULD NOT BE MORE
PERFECT.
IT WILL ONLY MAKE US STRONGER IN
THIS BATTLE WITH CHINA WHERE
CHINA DOESN'T WANT TO HAVE A
FAIR TRADE AGREEMENT.
BUT IT WOULD UNITE AMERICA.
AND THAT IS SOMETHING THAT WOULD
BE STRONGER IN THIS DEBATE GOING
FORWARD.
>> IT'S GOT TO BE STRONGER ON
ENFORCEMENT OF THE LABOR
PROVISIONS.
THEY'VE GOT TO MAKE IT THERE.
GENERAL MOTORS PUT A BLAZER
PLANT IN MEXICO AND IS PAYING
$1.50 AN HOUR.
WE'RE COMPETING WITH THAT.
IT'S NOT TOUGH ENOUGH TO MAKE
SURE THAT THAT DOESN'T HAPPEN,
AND QUESTION
AND TUESTION
AND THESTION
AND THEREION
AND THERE AN
AND THERE ARE PHARMACEUTICAL
PROVISIONS THAT WILL INCREASE
THE COST OF DRUGS.
WE NEED TO ADDRESS THOSE AND
AMBASSADOR LIGHTHIZER KNOWS THEY
HAVE TO BE ADDRESSED.
HE'S DEALING.
MARIA: THIS IS STILL BEING SEEN
AS REALLY A POLITICAL FOOTBALL,
CHRIS.
BUT IF USMCA DOES NOT PASS, IS
THAT A BIG PROBLEM FOR THE
ECONOMY HERE, AND MARKETS?
BECAUSE NANCY PELOSI HAS YET TO
COMMIT SHE WILL BRING IT TO THE
FLOOR FOR A VOTE.
>> THIS IS A KEY PART OF THE
NEGOTIATION WITH CHINA.
THIS WHY THE PRESIDENT SET IT UP
THIS WAY.
BY LEVERAGING OUR REGIONAL
ALLIES, NOT JUST CANADA AND
MEXICO BUT ALSO THE E.U. AND
JAPAN WHERE THE PRESIDENT
DECIDED TO FOREGO THE TARIFF ON
AUTOS FOR SIX MONTHS.
WE HAVE TO PASS USMCA TO BUILD A
REGIONAL COALITION OF THE
WILLING SO-TO-SPEAK TO INCREASE
THE PRESSURE ON CHINA, TRY TO
ISOLATE CHINA AND JUST LIKE
LARRY KUDLOW WOULD SAY EARLY ON,
HE WOULD TALK ABOUT NEEDING TO
HAVE AND CERTAINLY KEVIN HASSETT
AND BOB LIGHTHIZER, NEEDING TO
HAVE A COALITION OF THE WILLING.
THIS HAS TO SPAN MULTIPLE
ADMINISTRATIONS.
IF WE CAN PASS USMCA, IF WE CAN
GET PRESSURE FROM JAPAN AND THE
E.U., WE CAN PUT CHINA IN A
CORNER TO MAKE SURE THEY FOLLOW
THESE NORMAL TRADING RULES OF
THE NEW TRADING ORDER.
MARIA: THEY'RE GOING TO HAVE TO
TOPROVE TO THE WORLD THEY'RE
TRUSTWORTHY.
I IMAGINE THESE THINGS MATTER TO