AND THAT'S JUST NOW.
WE'RE BARELY INTO THIS, JUST A
FEW HOURS INTO THIS.
>>> ALL RIGHT, IN THE MEANTIME,
STOCKS PARING THEIR LOSSES ON
THE PRESIDENT'S EARLIER REMARKS.
REMEMBER, THEY WERE SORT OF
DIGESTING THE SIGNIFICANCE OF
THE TRADE IN YOUR FACE APPROACH
THE PRESIDENT TOOK YESTERDAY.
HE DOUBLED DOWN ON THAT WITH A
TWEET THIS MORNING, TRADE WARS
ARE GOOD AND EASY TO WIN.
LET'S GET THE READ WITH FORMER
NEW YORK LIEUTENANT GOVERNOR
BETSY MCCAUGHEY AND BRIAN
REILLY.
BETSY, TO THAT POINT THAT TRADE
WARS ARE EASY TO WIN, ARE THEY?
>> WELL, IN THIS CASE THE
PRESIDENT'S REAL CONCERN IS NOT
JUST WITH TRADE WARS, IT'S WITH
REAL WARS.
AND IF ANYBODY READS THIS REPORT
PUT OUT BY THE COMMERCE
DEPARTMENT LAST MONTH, YOU WILL
BE CONVINCED THAT THESE TARIFFS
ARE NECESSARY BECAUSE THIS
REPORT SHOWS THAT THE AMERICAN
STEEL INDUSTRY IS IN SUCH A
RAPID DECLINE THAT IT COULD NOT
RAMP UP FOR A MAJOR MILITARY
EMERGENCY.
IT SAYS RIGHT ON PAGE 49 THAT
UNLIKE WORLD WAR II WHERE STEEL
PRODUCTION HAD TO INCREASE 200%
BETWEEN 1938 AND 1942, THIS TIME
AROUND THE U.S. WILL NOT BE
READY.
AND WHO IS READY?
CHINA.
CHINA'S STEEL PRODUCTION
CAPACITY IS 12 TIMES AS GREAT AS
THE UNITED STATES.
THEY PRODUCE MORE STEEL IN A
MONTH THAN WE DO IN AN ENTIRE
YEAR.
IN FACT, THEIR EXCESS CAPACITY
IS BIGGER THAN OUR ENTIRE
CAPACITY.
SO THE U.S. STEEL INDUSTRY HAS
TO BE BOLSTERED WITH THESE
TARIFFS NOT TO MAKE PEOPLE ON
WALL STREET RICH, IT'S TO MAKE
US PREPARED FOR A MAJOR MILITARY
CONFLICT.
NEIL: ALL RIGHT.
BRIAN, I DO KNOW THAT THE STEEL
INDUSTRY HAS, YOU KNOW, DATING
BACK TO JOHN KENNEDY, MAYBE EVEN
SOONER, YOU KNOW, GONE TO THE
WHITE HOUSE EITHER TO COMPLAIN
OR TO ASK FOR HELP OR TO, IN THE
CASE OF JOHN KENNEDY, EASE UP ON
THE BADGERING TALK THAT THEY
WERE RAISING PRICES AT A BAD
TIME.
AND YET, YOU KNOW, PRESIDENT BY
PRESIDENT, YEAR BY YEAR, DECADE
BY DECADE, THEIR INFLUENCE HAS
LESSENED.
CAN A PRESIDENT, CAN A COUNTRY
CHANGE THAT WITH ITS POLICY BY
SINGLING OUT COUNTRIES LIKE
CANADA, BRAZIL, SOUTH KOREA,
SOME OF THESE OTHERS?
>> WELL, I THINK THE FUNDAMENTAL
CHOICE THAT PRESIDENT TRUMP IS
FACING IS DO I WANT TO GO DOWN
IN HISTORY AS THE NEXT HERBERT
HOOVER OR THE NEXT RONALD
REAGAN.
AND IT'S NOT A HARD CHOICE AT
ALL.
WE KNOW WHAT HAPPENS WHEN YOU GO
DOWN THE PATH OF TRADE WARS.
AND BY THE WAY, THE DEFENSE
THAT WE HAVE PLENTY OF STEEL,
PLENTY OF ALUMINUM TO SUPPLY OUR
DEFENSE NEEDS --
NEIL: BUT, BRIAN, YOU MENTIONED
RONALD REAGAN, HE RESPONDED TO
THE JAPANESE DUMPING COMPUTER
CHIPS ON OUR COUNTRY IN THE
'80s, SO HE WASN'T ABOVE TRADE
WARS OF HIS OWN.
>> YEAH, HE SPOKE LOUD AND CLEAR
ABOUT THE NEED TO AVOID TRADE
WARS, TO AVOID A RETURN TO THE
GREAT DEPRESSION.
SURE, HE HAD SOME TARGETED
MEASURES, BUT HE LOOKED AT
CREATING NAFTA, THE WORLD TRADE
ORGANIZATION --
NEIL: SO YOU THINK WHAT
PRESIDENT TRUMP IS DOING IS
SETTING US ON THE WRONG COURSE,
WHAT YOU'RE SAYING MIGHT BE A
LEGITIMATE ISSUE, BUT THE WRONG
REMEDY.
>> IT'S UNDERMINING EVERYTHING
THAT HE'S TRYING TO DO TO MAKE
AMERICA A BETTER PLACE TO DO
BUSINESS.
NEIL: BETSY, WHAT DO YOU THINK
OF THAT?
>> THAT'S SIMPLY NOT TRUE.
THE UNITED STATES DOES HAVE THE
COMMERCIAL POWER TO WIN THESE
TRADE WARS.
WE PRODUCE 24% OF THE GOODS AND
SERVICES PRODUCED IN THE ENTIRE
WORLD, BUT RIGHT NOW WE ARE
GETTING OUR CLOCKS CLEANED IN SO
MANY AREAS OF TRADE.
NOT JUST STEEL, TAKE A LOOK AT
PHARMACEUTICALS.
IT'S THE SAME THING.
NEIL: SO LOOK AT ALL OF IT,
BRIAN, I MEAN, I ALWAYS PLEDGE
THAT WE USE THE MARKET AS SORT
OF A GAUGE, AND YOU'RE QUITE
RIGHT TO SAY LET'S NOT OBSESS
TOO MUCH ON THAT, IT'S NOT LIKE
MARKETS ARE ALWAYS RIGHT, BUT
THESE ARE LARGELY FREE MARKET
EARS TO -- MARKETEERS.
BUT I DO WONDER WHAT HAPPENS
NEXT.
LET'S SAY, BRIAN, RIGHT NOW THAT
THE CANADIANS ARE ALREADY
LOOKING AT RESPONDING, TARGET
SOME OF OUR AGRICULTURAL
PRODUCTS OR IN EUROPE THE
EUROPEAN UNION ALSO NOT PLEASED
WITH THIS, DECIDES TO SKIP
BOEING AND GO RIGHT TO AIRBUS TO
ORDER ITS NEXT LOT OF PLANES.
THEN WHAT?
>> THERE'S ALWAYS THIS CHANCE
FOR A TIT FOR TAT TRADE WAR.
NOBODY CAN PREDICT THE FUTURE,
BUT I CAN GUARANTEE PUTTING A
$9-$10 BILLION A YEAR TAX ON
AMERICANS IS CERTAINLY NOT A
GOOD IDEA, AND THE COMMERCE
SECRETARY MUST HAVE SEEN THE
MOVIE "OFFICE SPACE," THE IDEA
WE'LL MAKE EVERY PAY A LITTLE
BIT MORE FOR A CAN OF SOUP AND A
CAR --
NEIL: YEAH, I HAD NO IDEA WHERE
HE WAS GOING WITH THAT.
>> THAT'S HORRIBLE ECONOMIC
POLICY AND BAD FOR AMERICA.
>> IF I COULD MAKE A PREDICTION
ON THE BASIS OF DONALD TRUMP'S
SUCCESS IN THE PAST NEGOTIATING
DEALS, I PREDICT THAT SOME OF
THESE COUNTRIES WILL COME TO THE
TABLE AND OFFER CONCESSIONS
BEFORE THERE'S A TRADE WAR.
NEIL: WELL, I THINK THAT IS THE
STRATEGY HERE.
I THINK THAT'S WHAT HE'S HOPING,
THAT THEY'LL AVOID THIS BY DOING
SOMETHING EITHER TO EXPAND A
PLAN IN THE U.S. OR SOMETHING
LIKE THAT.
BY THE WAY, ONE COMPANY --
SWEDEN'S ELECTROLUX -- HAS
HALTED AN INVESTMENT IN THE U.S.
UNTIL THIS ISSUE IS RESOLVED.
SO FROM THAT, BRIAN, I'D HAVE TO
WORRY WHETHER WE'RE GOING TO SEE
THAT ANYTIME SOON.
>> IT'S JUST ANOTHER EXAMPLE OF
THE GOVERNMENT PICKING WINNERS
AND LOSERS THROUGH THE POLITICAL
PROCESS.
WE SHOULD MET THE MARKET RULE --
LET THE MARKET RULE.
AND, LOOK, IF YOU LOOK AROUND
THE WORLD, THE COUNTRIES MOST
PROSPEROUS HAVE THE MOST
ECONOMIC FREEDOM AND THOSE THAT
GIVE PEOPLE THE FREEDOM TO
CHOOSE HOW TO SPEND THEIR MONEY.
WE DON'T WANT DONALD TRUMP OR
NANCY PELOSI OR ANYBODY ELSE --
>> I WOULD SUPPORT THAT AS LONG
AS WE'RE JUST TALKING ABOUT
ECONOMICS, BUT THAT'S NOT WHAT
THIS REPORT IS ABOUT.
WE ARE TALKING ABOUT NATIONAL
DEFENSE, AND IT HAS ALWAYS BEEN
THE PRESIDENT'S PREROGATIVE,
MOREOVER HIS DUTY, TO INSURE
THAT OUR TRADE NEGOTIATIONS
PROTECT INDUSTRIES THAT ARE
VITAL TO NATIONAL DEFENSE.
>> AND IF YOU CUT OFF, BETSY, IF
WE CUT OFF THE SUPPLY OF STEEL
AND ALUMINUM, WE'RE DRIVING UP
COSTS IN THE UNITED STATES, AND
WE'RE HURTING OUR NATIONAL
SECURITY, MAKING THE WORLD LESS
SECURE, NOT MORE SECURE.
NEIL: IF I HAVE TO BRING UP THIS