LIZ: WE ARE GETTING THIS
BREAKING NEWS RIGHT NOW.
CHINA'S AMBASSADOR TO WASHINGTON
TELLING REUTERS THAT CHINA IS
HOPING FOR A DEAL WITH THE U.S.
ON TRADE, AND WARNS OF DIRE
CONSEQUENCES IF THE TRADE WAR
LEADS TO AN ECONOMIC SEPARATION.
PRESIDENT TRUMP ALREADY
PREDICTING IF THERE IS NO
BREAKTHROUGH AT THE G20 MEETING,
AND HE'S SUPPOSED TO MEET WITH
XI JINPING ON SATURDAY, THE
CHANCE THAT HE WON'T GO THROUGH
WITH FURTHER HIKING OF TARIFFS
ON CHINESE GOODS IS QUOTE,
HIGHLY UNLIKELY.
PRESIDENT TRUMP TELLING THE
"WALL STREET JOURNAL" THAT HE
WILL BE READY TO RAISE FROM 10%
TO 25%, THE TARIFFS ON $200
BILLION WORTH OF CHINESE GOODS,
AND THAT WILL START JANUARY 1.
NOT ONLY THAT, THE PRESIDENT
DECLARING AS WELL QUOTE, IF WE
DON'T MAKE A DEAL, THEN I'M
GOING TO PUT THE $267 BILLION
ADDITIONAL ON AT A TARIFF RATE
OF EITHER 10% OR 25%.
BOB HORMATS WAS IN CHINA LAST
WEEK.
THIS IS HIS FIRST INTERVIEW
SINCE HE RETURNED.
THE FORMER UNDERSECRETARY OF
STATE FOR ECONOMIC GROWTH IS
JOINING US NOW.
ALL RIGHT, WHAT'S THE ATMOSPHERE
ON THE GROUND THERE LIKE RIGHT
NOW?
>> SO FAR, THIS HAS NOT HAD A
MAJOR NEGATIVE IMPACT ON CHINA.
THE CHINESE ECONOMY IS WEAKENING
A LITTLE BIT BUT THE TRADE HAS
NOT -- TRADE POLICIES HAVE NOT
REALLY HIT THE ECONOMY BECAUSE A
LOT OF COMPANIES IN THE UNITED
STATES HAVE BEEN DOING EARLY
STAGE ORDERS TO BUILD UP A LOST
INVENTORY IN CASE HIGHER TARIFFS
ARE IMPOSED.
LIZ: LET'S PUT THAT ASIDE THEN.
THEY HAVE TO BE SCARED.
I HEAR FROM PEOPLE ON THE GROUND
THERE, THEY ARE EXTREMELY
NERVOUS ABOUT THIS.
>> THEY ARE VERY NERVOUS.
THEY ARE VERY NERVOUS ABOUT WHAT
COULD HAPPEN AND THE EVENTUALITY
THAT THE PRESIDENT DOES THE KIND
OF THINGS HE'S THREATENING TO
DO.
BECAUSE THIS IS THEIR BIGGEST
MARKET AND THEY HAVE INVESTED A
LOT OF MONEY IN CONTINUING TO
SERVE THIS MARKET, AND THERE'S A
LOT OF INTERRELATIONSHIP BETWEEN
CHINESE COMPANIES AND AMERICAN
COMPANIES.
A LOT OF AMERICAN COMPANIES
SOURCE INTERMEDIATE PRODUCTS
FROM CHINA SO OF COURSE, IT WILL
HAVE AN IMPACT ON CHINA BUT ALSO
THE UNITED STATES AND OF COURSE,
AMERICAN CONSUMERS.
LIZ: THEY WILL MEET FACE-TO-FACE
ON SATURDAY.
THEY MAY EVEN SEE EACH OTHER
BEFORE THEN BECAUSE OF COURSE,
AT THE G20 YOU HAVE THE FAMILY
PHOTO WHICH IS THE GROUP PHOTO
OF THE 19 LEADERS AND THE
EUROPEAN UNION MEMBERS.
SO IT ACTUALLY ENDS UP BEING
MORE THAN 20 PEOPLE.
HOW DO YOU SUPPOSE THEY ARE
GOING TO COME TOGETHER TO MEET
EYE-TO-EYE AND DO YOU HAVE HOPES
FOR SOME TYPE OF CONCRETE DEAL,
BECAUSE THE MARKET IS WAITING
AND WATCHING.
>> WELL, I WOULD LOVE TO SEE THE
DEAL OF THE KIND THAT LARRY
KUDLOW WAS TALKING ABOUT.
HE WAS VERY POSITIVE THAT HE
THOUGHT THERE COULD BE A DEAL.
BUT THEN HE IDENTIFIED A NUMBER
OF THINGS THAT HAD TO HAPPEN IN
ORDER FOR A DEAL ACTUALLY TO
OCCUR.
LIZ: HE SAID FORCED TECHNOLOGY
TRANSFERS MUST BE SOLVED.
HE WANTS TARIFF AND NON-TARIFF
BARRIERS DROPPED TO GO AWAY.
HE WANTS OWNERSHIP ISSUES
BECAUSE THE CHINESE KIND OF
REQUIRE THAT YOU HAVE A JOINT
VENTURE WITH A CHINESE COMPANY
ON THE GROUND AND THEN OF
COURSE, THEY END UP BORROWING
THE INTELLECTUAL PROPERTY OF THE
U.S. COMPANY.
HE WANTS ZERO TARIFFS, ZERO
SUBSIDIES.
IS PRESIDENT TRUMP GOING TO WALK
AWAY ON SATURDAY WITH ALL OF
THOSE THINGS?
>> I THINK THE PROBABILITY OF A
DEAL OF THAT MAGNITUDE, OF A
BREAKTHROUGH ON ALL THOSE
ISSUES, IS HIGHLY UNLIKELY
BECAUSE A LOT OF WORK WOULD HAVE
TO GO INTO PUTTING THAT TOGETHER
AND SO FAR AS I'VE SEEN, WE
HAVEN'T REALLY HAD ALL THE
PRELIMINARY MEETINGS OF PEOPLE
AT MIDDLE AND UPPER LEVELS
MAKING THE KIND OF ARRANGEMENTS
TO HAVE A DEAL LIKE THAT OCCUR.
I THINK LOOKING FOR A
BREAKTHROUGH WOULD BE VERY
OPTIMISTIC.
IT'S SETTING UP A PROCESS FOR
MOVING AHEAD TO DEAL WITH THOSE
ISSUES, WOULD BE POSSIBLE.
IN OTHER WORDS, IF THE LEADERS
WERE TO SAY WE WANT OUR TOP
PEOPLE TO SIT DOWN AND DEAL WITH
ISSUE X, Y AND Z, THAT WOULD BE
SOMETHING THAT I THINK COULD
HAPPEN.
THE QUESTION IS, DOES THAT
SATISFY PRESIDENT TRUMP.
LIZ: I THINK THE MARKETS BELIEVE
YOU.
WE JUST HIT SESSION HIGHS.
THE DOW UP 87.
WE HAD BEEN DOWN MORE THAN 240
POINTS.
SO IT'S BEEN A WILD SWING BUT
HOLDING TO THE UPSIDE HERE.
I DO NEED TO ASK YOU ABOUT
VLADIMIR PUTIN.
HE TOO WILL BE THERE.
WE JUST HAD A VERY SERIOUS
INCIDENT SUNDAY IN WHAT'S CALLED
THE KERCH STRAIT WHICH YOU KNOW.
THE RUSSIANS IN ONE OF THEIR
SHIPS, THEY RAMMED AND THEN
FIRED AND SEIZED THREE UKRAINIAN
BOATS.
THERE ARE HUGE TENSIONS BETWEEN
THESE COUNTRIES.
THESE WERE SUPPOSEDLY
INTERNATIONAL WATERS.
THE STRAIT IS SUPPOSEDLY
NAVIGABLE BY BOTH COUNTRIES AND
RUSSIA IS NOW SAYING YOU
COULDN'T GO THROUGH, THEY TRIED
TO STOP THE UKRAINIAN SHIPS.
HOW MUCH OXYGEN WILL BE TAKEN
OUT OF THE ROOM WHEN IT COMES TO
THAT ISSUE AND WHY DO YOU THINK
VLADIMIR PUTIN, IF THE RUSSIANS
STARTED THIS, AND IT LOOKS LIKE
THEY DID, DID THAT?
IS HE TRYING TO MAKE SURE HE'S
ON THE FRONT PAGE IN ARGENTINA?
>> THERE IS PROBABLY SOME OF
THAT.
HE'S TESTING POROSHENKO ON THE
WATER, ON THIS PARTICULAR AREA
OF CONTESTED WATER, WHERE THE
UKRAINIANS AND RUSSIANS HAVE
BEEN ABLE TO NAVIGATE FREELY
WITHOUT MAJOR INCIDENT FOR QUITE
SOME TIME.
ONCE IN AWHILE THERE ARE
PROBLEMS.
BUT BASICALLY, HE'S SAYING LOOK,
I'M NOW EXERTING MY POWER, I
HAVE SOME MUSCLE HERE, AND OF
COURSE, THE UKRAINIANS CAN'T
REALLY RESPOND NAVL
REALLY RESPOND NAVALLY BECAUSE
THEY DON'T HAVE THE CAPABILITY.
BUT NOW MARTIAL LAW HAS BEEN
DECLARED IN TEN PROVINCES IN
UKRAINE TO INDICATE UKRAINE WILL
RESIST THE RUSSIANS IF THEY USE
THIS AS A PRETEXT FOR MOVING
THEIR TROOPS.