LED THE BILL TO IMPOSE 35%
TARIFF ON CHINA, ALL GOODS, AND
THEY DID SO.
SOMEONE WITH FIRSTHAND
KNOWLEDGE OF HOW TARIFFS ON
STEEL CAN BACKFIRE IS WITH US
NOW LIVE FORMER U.S. SECRETARY
OF COMMERCE UNDER PRESIDENT
GEORGE W. BUSH, AND ALSO THE
FORMER CEO OF KELLOGG'S, CARLOS
GUTIERREZ.
GOOD TO SEE YOU.
>> NICE TO SEE YOU.
LIZ: YOU HAVE EXPERIENCE ON
THIS BECAUSE YOU JOINED THE
BUSH ADMINISTRATION SHORTLY
AFTER PRESIDENT BUSH HAD TO GET
RID OF THE TARIFFS HE IMPOSED
BECAUSE THERE WAS HUGE BLOWBACK
FROM U.S. COMPANIES.
TALK ABOUT THAT TIME AND WHAT
HAPPENED?
>> YEAH, THIS WAS BEFORE MY
TIME BECAUSE THAT WAS THE FIRST
TERM, BUT YOU KNOW WHAT
HAPPENED IS, YES, WE PUT IN THE
TARIFFS FOR A COUPLE OF YEARS,
JOBS HELD STEADY FOR A FEW
MONTHS BUT AFTER THAT, WHILE
THE TARIFFS WERE IN PLACE, JOBS
DECLINED.
WE HAVE TO REMEMBER THAT JOBS
PEAKED IN 1953.
SO WHAT WE HAVE HERE IS AN
INDUSTRY THAT IS IN LONG-TERM
DECLINE.
IT'S GOING TO BE VERY DIFFICULT
TO REVITALIZE THAT INDUSTRY BY
YOU KNOW, THE OTHER THING TOO
IS THERE'S BEEN A LOT OF
MINIMIZING OF THE IMPACT ON THE
ECONOMY, AND I'LL TELL YOU,
LIZ, IF YOU JUST TAKE ONE
PRODUCT AND SAY THAT STEEL IS
20% OF THAT PRODUCT, YOU'RE
GOING TO HAVE TO RAISE THE
PRICE OF THAT PRODUCT BY 5%.
AND YOU CAN GO UP FROM THERE.
IF IT'S 30, IF IT'S 40, IF IT'S
50.
THIS IS GOING TO HAVE A
CASCADING EFFECT.
IT'S ALSO GOING TO MAKE STEEL
AND ALUMINUM MORE EXPENSIVE IN
THE U.S., WHICH MEANS THAT IF
YOU'RE GOING TO BUILD A FACTORY
WHICH TAKES A LOT OF STEEL,
YOU'LL PROBABLY BUILD IT
SOMEPLACE ELSE.
LIZ: YEAH, WELL, INTERESTING.
LET'S JUST SAY THIS IS PART OF
PRESIDENT TRUMP'S DEAL MAKER IN
CHIEF SORT OF THEORY AND
STRATEGY.
LET'S SAY BY SAYING THERE WILL
BE NO EXEMPTIONS, EVERYBODY IS
HIT WITH THE TARIFFS ON STEEL
AND ALUMINUM.
HE KNEW THAT MEXICO AND CHINA
WOULD BE ABSOLUTELY FURIOUS
ABOUT THIS, AND THEN HE DANGLES
NAFTA AND THE RENEGOTIATION OF
NAFTA IN FRONT OF THEM AND SAYS
WELL, PLAY WITH US ON GAME X
AND I'LL LIFT PROBLEM Y FROM
I WILL THEN EXEMPT YOU.
LET'S HEAR EXACTLY HOW TREASURY
SECRETARY STEVEN MNUCHIN PUT
THAT INTO WORDS AND I'LL HAVE
YOU COMMENT.
>> TO THE EXTENT THAT WE'RE
SUCCESSFUL IN RENEGOTIATING
NAFTA, THOSE TARIFFS WON'T
APPLY TO MEXICO AND CANADA.
WE LOOK FORWARD TO THE
PRESIDENT RELEASING THE
SPECIFIC DETAILS AND WORKING
WITH OTHER PEOPLE.
WE'RE NOT LOOKING TO GET INTO
TRADE WARS, LOOKING TO MAKE
SURE U.S. COMPANIES CAN COMPETE
FAIRLY AROUND THE WORLD.
LIZ: THERE WAS A PLAY ON
BROADWAY CALLED IF, THEN.
IF THIS HAPPENS, THEN WE'LL DO
THIS.
THIS MAY WORK?
IS THIS A POSSIBILITY?
>> LET'S JUST SAY IT IS A
NEGOTIATING TACTIC.
THE PROBLEM IS THAT IT'S BEING
DONE IN PUBLIC, AND THERE IS
SUCH THING THAT GOES BEYOND THE
NUMBERS AND BEYOND THE
NEGOTIATION, WHICH IS NATIONAL
PRIDE AND NATIONAL HUMILIATION.
THIS IS JUST GOING TO MAKE
MEXICO AND CANADA DIG IN THEIR
HEELS.
WHY?
BECAUSE IT'S DONE IN SUCH A
PUBLIC FASHION.
SO, YOU KNOW, WE'RE LOOKING FOR
BETTER RULES OF ORIGIN
REGIONALLY.
PERHAPS WE CAN GET SOME OF.
THAT I DON'T THINK WE'RE GOING
TO COME UP WITH A DIFFERENT
NAFTA HAD WE NOT DONE THIS.
IF WE WOULD HAVE DONE THIS IN
PRIVATE, MAYBE, BUT I DOUBT.
LIZ: YOUR COUNTERPART WHO HAS
THE JOB RIGHT NOW, WILBUR ROSS,
OUT FRONT IMMEDIATELY AFTER THE
PRESIDENT ANNOUNCED NEXT WEEK
IT WILL HAPPEN.
HE WAS HOLDING UP CANS OF SOUP
ON OUR NETWORK, CANS OF BEER ON
OTHER NETWORKS, AND THE
BEVERAGE INDUSTRY, THEY EITHER
DIDN'T GET THE MESSAGE OR THEY
ABSOLUTELY PUSHED THE PLATE
AWAY ON THAT.
THEY DO NOT LIKE THIS AT ALL
BECAUSE THEY IMPORT A LOT OF
ALUMINUM TO BE USED IN THEIR
CANNING.
>> AND YOU KNOW WHAT?
THE WAY THAT SECRETARY ROSS,
WHO I HAVE A LOT OF RESPECT FOR
AND KNOW HIM BEFORE HE JOINED
GOVERNMENT, HE WAS COMPARING
THE INCREASE IN PRICES IN
PENNIES TO THE RETAIL PRICE AT
A 7-ELEVEN.
THE WAY BUSINESSES WILL DO IT
IS COMPARE THE INCREASE IN THE
COST AS A PERCENTAGE OF THE
COST, OF THE COST OF THE
PRODUCT.
SO AGAIN, IF STEEL IS 20% OF A
PRODUCT, IF IT GOES UP 25%,
THAT PRODUCT'S PRICE MUST GO UP
5%, AND THAT'S GOING TO HAVE A
RIPPLE EFFECT THROUGHOUT THE
ECONOMY.
LIZ: YOU JUST TALKED ABOUT THE
RIPPLE EFFECT, WE CALL IT THE
UNINTENDED EFFECTS.
YOU WERE THE CEO OF KELLOGG'S,
SITTING ON THE BOARD OF
OCCIDENTAL PETROLEUM.
YOU SAY THE BEST WAY IS TO KEEP
TURNED THE TABLE DISCUSSIONS SO
PEOPLE AND COUNTRIES AREN'T
HUMILIATEED?
>> I THINK BY NOW IT'S TOO
LATE.
THE CAT IS OUT OF BAG AND
EVERYONE KNOWS WHAT THE
PRESIDENT WANTS.
BUT ANY INDUSTRY THAT IS IN THE
BUSINESS OF BUILDING FACTORIES,
OF BUILDING MANUFACTURING
FACILITIES, YOU CAN IMAGINE THE
AMOUNT STEEL THAT GOES INTO A
MANUFACTURING FACILITY.
SO WHAT THIS MOVE WILL DO IS
MAKE BUILDING A PLANT IN THE
U.S. MORE EXPENSIVE.
SO IT'S GOING TO HAVE AN
UNINTENDED CONSEQUENCE.
IT'S GOING TO BE A