LIZ: BY THE WAY, WE SHOULD TELL
YOU THAT THE TEN-YEAR TREASURY
YIELD HIT SESSION HIGHS,
ACTUALLY HIT THREE-WEEK HIGHS,
THE MINUTE THAT NEWS ABOUT THE
POSSIBILITY WHICH HAS BEEN
DENIED BY TREASURY, BUT THAT
STEPHEN MNUCHIN, TREASURY
SECRETARY, IS CONSIDERING
DROPPING TARIFFS OR LOWERING
THEM ON CHINA TO GET A DEAL
DONE.
AS SOON AS THAT NEWS HIT THE
TAPE, YOU SAW THREE-WEEK HIGHS
FOR THIS YIELD WHICH NOW STANDS
FOR THE TEN-YEAR AT 2.74%.
FOLKS, LET ME JUST RESET THE
BUTTON HERE.
THERE ARE TWO DIFFERENT
HOURGLASSES RIGHT NOW.
ONE TICKING DOWN ON THE CHINA
TRADE DEAL, ACTUALLY IT'S A
TRUCE RIGHT NOW, COME MARCH IT'S
OVER AND THE PRESIDENT SAYS HE
WILL PUT IN NEW TARIFFS.
THEN YOU HAVE THE ONE REGARDING
BREXIT.
THERE'S A NEW DEADLINE THERE BUT
WE NEED TO KNOW WHAT OUR VIEWERS
ARE MOST CONCERNED ABOUT AND HOW
BOTH DRAMAS MIGHT IMPACT THEIR
INVESTMENTS WHICH LEADS US TO
OUR NEXT GUEST.
THE FORMER BRITISH AMBASSADOR TO
THE U.S. WHO HAS DEALT WITH
TRADE ON MANY DIFFERENT LEVELS.
WE WELCOME SIR PETER WESTMACOTT
IN A FOX BUSINESS EXCLUSIVE.
TO THE BREAKING NEWS AND THE
IMPLICATIONS AT THE MOMENT,
TREASURY'S DENYING IT.
THEY SAY NO, WE ARE NOT
CONSIDERING DROPPING TARIFFS ON
CHINA JUST TO CALM MARKETS AND
HASTEN A TRADE DEAL, BUT "WALL
STREET JOURNAL" DOESN'T PULL
THIS OUT OF THE AIR.
THERE IS A POSSIBILITY THAT
COULD BE HAPPENING BEHIND THE
SCENES?
>> WELL, THIS IS A STORY ON
WHICH I HAVEN'T GOT INSIDE
INFORMATION BUT IT WOULD NOT
SURPRISE ME BECAUSE THE WAY IN
WHICH THE PRESIDENT SLAPPED THE
ADDITIONAL TARIFFS ON CHINA TOOK
A LOT OF PEOPLE BY SURPRISE, AND
BECAUSE OF THE DEPENDENCE OF A
LOT IN THE INDUSTRY, ESPECIALLY
THE AUTOMOBILE INDUSTRY, ON
IMPORTED STEEL, IT HAS TENDED TO
MAKE A LOT OF U.S. MANUFACTURED
GOODS LESS COMPETITIVE.
IN ORDER TO DE-DRAMATIZE THE
DEAL WITH CHINA, CHINA DOES NOT
WANT A TRADE DEAL WITH THE
UNITED STATES AND IS ITSELF
LOOKING FOR WAYS TO IMPROVE
IMPORTS TO THE UNITED STATES, IT
SEEMS TO ME NOT IMPOSSIBLE.
OF COURSE, WE HAVE TO WAIT AND
SEE WHETHER THIS STORY IS
CONFIRMED.
IT'S NOT SURPRISING TO SEE THE
MARKETS RALLY A LITTLE ON THE
BACK OF THAT, BECAUSE FRANKLY,
NOBODY HAS AN INTEREST IN A
TRADE WAR BETWEEN THE UNITED
STATES AND CHINA.
LIZ: LET'S TALK ABOUT TRADE AND
SORT OF SHIFT THIS A LITTLE BIT,
IF WE CAN PIVOT TO THE UK AND
THE SITUATION GOING ON THERE.
YOU STILL HAVE MARKETS IN EUROPE
DOWN BECAUSE WE DON'T HAVE
CLARITY ON WHAT'S GOING ON WITH
BREXIT.
I WILL SAY THIS, AND YOU'VE GOT
40 YEARS OF DIPLOMACY UNDER YOUR
BELT SO I'M REALLY INTERESTED IN
HEARING YOUR PERSPECTIVE ON
THIS, AS THE WORLD WATCHES,
THERESA MAY, THE PRIME MINISTER,
IS SAYING SHE'S NOW GOING TO GO
FOR BREXIT PLAN B.
WE DON'T KNOW WHAT THAT'S GOING
TO LOOK LIKE BUT ALREADY, MANY
DIFFERENT PARTIES INCLUDING
LABOUR AND THE NORTHERN IRELAND
PARTY, NOT TO MENTION SCOTLAND,
SAY WE WON'T EVEN GO TO THE
TABLE UNLESS YOU TAKE HARD
BREXIT OFF THE TABLE.
IS THAT LIKELY?
BECAUSE YOU WOULD HAVE TO CHANGE
THE LAW TO DO THAT, RIGHT?
>> NO, YOU WOULDN'T HAVE TO
CHANGE THE LAW TO DO THAT.
WHAT THEY ARE SAYING IS THAT
HARD BREXIT IS SUCH A TERRIBLE
OPTION BECAUSE IT DISRUPTS
ECONOMY, LIFE, TRAVEL, SOCIETY,
ENERGY SUPPLIES, FLIGHTS,
DRIVING LICENSE, TAKING YOUR PET
DOG ACROSS THE CHANNEL, A WHOLE
LOT OF STUFF.
IT'S TERRIBLY DISRUPTED IF WE
HAVE A HARD BREXIT AND MARKETS I
THINK AT THAT POINT WOULD GO
SHARPLY DOWN.
SO THE OTHER POLITICAL LEADERS
WHOM THERESA MAY IS TRYING TO
REACH OUT TO AT THE MOMENT TO
SEE IF THERE'S SOME SORT OF
CONCILIATION THAT CAN BE
ACHIEVED BETWEEN DIFFERENT
PARTIES ON SOME FORM OF BREXIT
DEAL, THEY ARE SAYING LET'S
REMOVE THAT REALLY HARD OPTION.
NOW, THERE ARE DIFFERENT
MECHANISMS THAT YOU CAN USE TO
REMOVE IT.
ON THE ONE HAND, YOU CAN SAY
POLITICALLY THE GOVERNMENT WON'T
GO ALONG WITH IT, BUT OF COURSE,
AS THE EXPERTS KNOW, THE DEFAULT
POSITION IF THERE IS NO
AGREEMENT ON ANOTHER DEAL IS
THAT WE DO CRASH OUT WITH NO
DEAL ON BREXIT ON THE 29th OF
MARCH.
SO THERE'S A NUMBER OF DIFFERENT
THINGS THAT CAN BE DONE AND
THERE IS ONE PARTICULAR MOTION
WHICH HAS BEEN TABLED BY A
COUPLE CONSERVATIVE MPs WHICH
WOULD HAVE THE PRACTICAL EFFECT
OF ENSURING WE COULD NOT CRASH
OUT, BECAUSE IT WOULD MEAN THAT
WE WOULD WITHDRAW FROM THE
ARTICLE 50 PROCESS.
IN THE EVENT THERE WASN'T AN
AGREEMENT ON SOMETHING ELSE.
LIZ: MAY I ASK YOU THIS, SIR
PETER, BECAUSE LOOKING TOWARD
OUR VIEWERS AND THEIR INTERESTS,
THERE SEEMS TO BE REAL INTEREST
ON BEHALF OF BREXITEERS AND
CERTAINLY HERE IN THE UNITED
STATES FOR A BILATERAL UK/U.S.
TRADE DEAL.
BUT IF THEY ARE BEHOLDEN, IF THE
UNITED KINGDOM IS BEHOLDEN TO
THE EUROPEAN UNION IN SOME WAY,
SHAPE OR FORM AND THERE'S A
BREXIT WITH A DEAL FOR THE EU TO
BE HAPPY, DOES THAT IMPEDE THE
CHANCES OF A CLEAR BILATERAL
TRADE DEAL BETWEEN THE UK AND
THE U.S.?
>> ABSOLUTELY IT DOES.
BECAUSE IT IS ONLY IF YOU CRASH
OUT AS WE SAY, AND YOU SEVER ALL
YOUR TRADING LINKS WITH THE
EUROPEAN UNION WHICH EXISTS AT
THE MOMENT, THE SINGLE MARKET
CUSTOMS UNION, ONLY IF THAT GOES
IS THE UNITED KINGDOM FREE TO
NEGOTIATE ITS OWN FREE TRADE
AGREEMENTS WITH OTHER COUNTRIES
SO THAT WOULD BE A PROBLEM.
ON THE OTHER HAND, I WOULD SAY
THIS IS SOMETHING WHICH HAS BEEN
DRESSED UP AS BEING A HUGE SHINY
OBJECTIVE WHICH SOUNDS GREAT,
BUT IN PRACTICE, IT WOULD NOT BE
THE ANSWER TO ALL OF OUR
PRAYERS.
WE ALREADY HAVE MORE BUSINESS
AND INVESTMENT WITH THE UNITED
STATES THAN ANY OTHER COUNTRY IN
THE WORLD, AND IF WE WERE LEFT
TO NEGOTIATE A FREE TRADE
AGREEMENT ALL BY OURSELVES, IT
WOULD TAKE A VERY LONG TIME AND
THERE WOULD BE A LOT OF VERY
DIFFICULT THINGS LIKE FINANCIAL
SERVICES AND AGRICULTURE AND
BEEF HORMONES AND ALL THAT KIND
OF STUFF WHICH WOULD BE VERY
DIFFICULT TO NEGOTIATE.
IN PRACTICE, OUR TRADING LINKS,
OUR INVESTMENT LINKS WITH THE
UNITED STATES ARE PROBABLY
BETTER SERVED BY THE UNITED
KINGDOM STAYING INSIDE THE EU
AND BEING PART OF THE EUROPEAN
UNION NEGOTIATING BLOC WHICH
DOES A FREE TRADE AGREEMENT WITH
THE UNITED STATES.
THAT'S WHAT WE WERE TRYING TO
NEGOTIATE A COUPLE YEARS BACK.
LIZ: WELL, WE ARE ALL WAITING