>>> WELCOME BACK TO "VELSHI AND RUHLE."
RUHLE." JUST AFTER MIDNIGHT ON FRIDAY,
THE UNITED STATES MADE GOOD ON
ITS THREAT TO IMPOSE 25% TARIFFS
ON $34 BILLION WORTH OF CHINESE
IMPORTED GOODS.
IMPORTED GOODS. CHINA RESPONDED WITH TARIFFS OF
ITS OWN TARGETING $34 BILLION
WORTH OF U.S. EXPORTS TO THEIR
COUNTRY.
COUNTRY. TARIFFS AND COUNTERTARIFFS MARK
THE START OF AN ALL-OUT TRADE
WAR, AND IT IS NOT JUST CHINA
THAT WE’RE FIGHTING WITH.
IN TOTAL, PRESIDENT TRUMP HAS
NOW SLAPPED HEFTY TARIFFS ON $85
BILLION WORTH OF IMPORTS FROM
AMERICA’S TOP TRADING PARTNERS.
CHINA, CANADA, MEXICO, THE
EUROPEAN UNION AND JAPAN.
ALL BUT JAPAN HAVE RETALIATED
WITH SIMILAR TARIFFS OF THEIR
OWN, BRINGING THE TOTAL TALLY TO
$165 BILLION WORTH OF TRADE HIT
SO FAR THIS WEEK IN THE GLOBAL
TRADE WAR.
TRADE WAR. BUT TRUMP HAS THREATENED TO DO
MUCH MORE DAMAGE SAYING HE’S
READY TO PUT TARIFFS ON ANOTHER
$400 BILLION WORTH OF CHINESE
IMPORTS.
IMPORTS. AND THE PRESIDENT’S TEAM IS
LOOKING INTO POSSIBLE TARIFFS ON
$360 BILLION WORTH OF AUTO,
TRUCK, AND CAR PARTS THAT WERE
IMPORTED LAST YEAR.
BUT CURRENTLY, OUR ECONOMY IS
INCREDIBLY STRONG ADDING 213,000
JOBS LAST MONTH WITH A LOW 4%
UNEMPLOYMENT RATE.
UNEMPLOYMENT RATE. IF THE U.S. ECONOMY CONTINUES TO
ADD 200,000 JOBS EACH MONTH, THE
TRADE WAR WILL NOT IMMEDIATELY
HURT TRUMP POLITICALLY.
BUT IF A DRAWN-OUT TRADE WAR
TRIGGERS A WAVE OF LAYOFFS AT
U.S. EXPORT FIRMS, WELL, THEN
ALL BETS ARE OFF.
>> THAT’S REALLY HARD TO
CALCULATE BECAUSE THE ECONOMY IS
MUCH BIGGER, WILDER ANIMAL THAN
CAN BE CONTROLLED BY THE
PRESIDENT OF THE UNITED STATES.
JOINING US IS FORMER UNDER
SECRETARY OF COMMERCE FOR
INTERNATIONAL TRADE UNDER
PRESIDENT GEORGE W. BUSH, FRANK
LAVEN.
LAVEN. IT’S A DANGEROUS GAME TO PLAY
BECAUSE STEPHANIE IS RIGHT.
UNEMPLOYMENT HAS BEEN TRENDING
LOWER FOR MANY, MANY YEARS AND
CONTINUES UNDER PRESIDENT TRUMP.
BUT THERE ARE POTENTIAL
UNINTENDED CONSEQUENCES OF A
TRADE WAR.
TRADE WAR. >> I THINK YOU’RE EXACTLY RIGHT.
WHEN YOU PUT IN TARIFFS, YOU’RE
ADDING COST TO BUSINESS.
YOU’RE HURTING CONSUMERS.
SLOWING DOWN ECONOMIC GROWTH.
SO IT’S NEVER GOOD NEWS FOR THE
ECONOMY PUTTING IN TARIFFS.
SOMETIMES IT’S A NECESSARY
TACTICAL MOVE TO HELP SOLVE A
PROBLEM, BUT, BOY, DON’T LET IT
BECOME AN END IN ITSELF.
BE LIGHT, SHORT TERM IF YOU’LL
USE TARIFFS.
USE TARIFFS. >> WELL, CHINA AND THE UNITED
STATES BOTH BELIEVE THEY HAVE
THE UPPER HAND IN THIS.
THERE’S NO NEGOTIATIONS THAT
WE’RE AWARE OF CURRENTLY UNDER
WAY.
WAY. SO BETWEEN THESE -- SO HOW LONG
CAN THIS GO ON?
>> WELL, YEAH, STEPH, THAT’S
ALSO REFLECTS THERE’S A
POLITICAL DIMENSION TO THIS AS
AN ECONOMIC DIMENSION.
BOTH COUNTRIES HAVE THEIR
POLITICS.
POLITICS. NOBODY IN CHINA CAN APPEAR JUST
TO BE COMPLIANT OR SUBMISSIVE TO
A FOREIGN POWER.
SO THEY HAVE TO AT LEAST
INITIALLY COME ACROSS AS DEFIANT
AND REBUFF THE UNITED STATES.
NOW AFTER A BIT OF A STALEMATE
YOU CAN WORK OUT A SOLUTION.
I’M GENERALLY OPTIMISTIC THAT
WE’RE GOING TO GET THERE.
BUT IT MIGHT BE A FEW MONTHS OF
FRICTION AND BAD ECONOMIC NEWS
BEFORE THIS IS FINALLY RESOLVED.
>> WHEN PRESIDENT TRUMP IS
TALKING TO NATO COUNTRIES,
GENERALLY SPEAKING, THOSE
LEADERS ARE ALL IN A SIMILAR
POSITION TO HIS, RIGHT?
STRONG POSITIONS HELP YOU OUT
POLITICALLY, DOMESTICALLY.
POLITICALLY, DOMESTICALLY. BUT WHEN DEALING WITH CHINA, THE
MATH IS A LITTLE DIFFERENT
BECAUSE PRESIDENT XI IS
PRESIDENT FOR AS LONG AS HE’D
LIKE TO BE AND THE CHINESE
GENERALLY WORK OFF OF FIVE-YEAR
AND LONGER PLANS.
SO THE POLITICAL IMPACT IN CHINA
FROM THESE INCREASED COSTS IS
DIFFERENT FROM THE POLITICAL
IMPACT IN AMERICA.
>> YEAH.
>> YEAH. I THINK HE HAS MORE LEEWAY, BUT
HE ALSO HAS A PUBLIC PERSONA AND
A PUBLIC ROLE, AND HE HAS TO
POSITION HIMSELF AS THE STEWARD
OF BROAD, NATIONAL INTEREST.
SO, YEAH, HE’S NOT GOING TO GET
DAY-TO-DAY CRITICISM, BUT DONALD
TRUMP, THE U.S. PUBLIC WILL GIVE
A U.S. PRESIDENT A LOT OF LEEWAY
AS WELL IF YOU SAY, WE NEED TO
BE TOUGH WITH CHINA, GO BE TOUGH
WITH CHINA.
WITH CHINA. IF THAT STARTED HURTING THE
OVERALL ECONOMY THEN YOU START
PAYING A PRICE FOR IT.
A LOT OF PEOPLE ARE ASKING, WHY
DID YOU GET IN A QUARREL WITH
CANADA ABOUT MILK AND GERMANY
ABOUT STEEL.
ABOUT STEEL. ARE THESE FRONT AND CENTER
ISSUES?
ISSUES? ARE THESE REALLY AS IMPORTANT AS
CHINA?
CHINA? >> IT’S INTERESTING YOU SAY
THAT.
THAT. VAUGHN HILLIARD AND BEN HOPKIN
OUR REPORTERS HAVE BEEN OUT
TALKING TO FARMERS, LOBSTERMEN,
WHISKEY PRODUCERS.
WHISKEY PRODUCERS. >> THEY’RE GIVING TRUMP SOME
TIME.
TIME. >> MAYBE THIS IS GOOD.
WHEN I SPOKE TO SOMEBODY IN
CANADA ABOUT HOW ARE CANADIANS
RESPONDING TO THE TOUGH TALK
FROM TRUDEAU?
FROM TRUDEAU? THEY’RE GIVING TRUDEAU TIME.
THEY LIKE IT WHEN THEIR LEADERS
FEEL A LITTLE TOUGH.
>> LET’S REMEMBER, THE U.S.
ECONOMY IS PERFORMING VERY
STRONGLY.
STRONGLY. THE GOOD NEWS SORT OF NOW
OVERWHELMS THE BAD NEWS.
SO THIS IS -- THESE TARIFFS ARE
A COST TO THE ECONOMY.
THEY DEFINITELY AREN’T HELPFUL
BUT THERE’S SO MUCH GOOD NEWS
OUT THERE THAT THERE’S A LITTLE