I GUESS WE'LL OFFICIALLY KNOW
MORE POTENTIALLY NEXT WEEK.
TRISH?
TRISH: THANKS SO MUCH.
BLAKE BURMAN.
JOINING ME WITH REACTION FORBES
MEDIA CHAIRMAN STEVE FORBES.
WE'RE LOOKING AT A MARKET OFF
529 POINTS, YOU, MR. FORBES, SAY
YOU'RE NOT SURPRISED?
>> NO.
TARIFFS ARE ANOTHER WORD FOR
TAXES.
IF WE CONTINUE PUTTING TAXES ON
IMPORTS, PERHAPS BLOWING UP
NAFTA, THAT IS GOING TO HURT THE
AMERICAN ECONOMY.
IT MAY HURT OTHER COUNTRIES LIKE
CHINA BUT IT IS GOING TO HURT
US.
AND SO THERE ARE BETTER WAYS TO
DEAL WITH CHINA AND THEIR TRADE
ABUSES THAN PUTTING TAXES ON THE
AMERICAN CONSUMER.
WHEN YOU PUT A TAX ON STEEL AND
ALUMINUM, THAT WILL LEAD TO
HIGHER PRICES.
HIGHER PRICES, NOT GOOD.
TRISH: YOU LOOK AT, FOR EXAMPLE,
THE PRESIDENT SAYING OKAY WE'LL
NOT ALLOW SOUTH KOREA TO DUMP
WASHING MACHINES HERE IN THE
U.S. ANYMORE.
SO WE'LL PUT A TARIFF ON THAT.
OF COURSE THEN THE PRICE OF
WASHING MACHINES FOR ALL
AMERICANS GOES UP.
THEY CAN NO LONGER BUY THE CHEAP
WASHING MACHINE FROM SOUGHT
CREE.
SO THE SAME -- SOUTH KOREA.
THE SAME KIND OF THING HAPPENING
WITH THE STEEL INDUSTRY, BUT,
BUSH, STEVE FORBES, HE MAKES A
VALID POINT IN THAT IF CHINA IS
SUBSIDIZING STEEL AS HEAVILY, AS
THEY ARE, THEREBY DUMPING IT
HERE IN THE U.S., HOW ARE
AMERICAN STEEL COMPANIES EVER
GOING TO COMPETE WITH THAT?
>> YOU LOOK AT THEIR STOCK
PRICES.
THEY'RE DOING VERY GOOD IN THIS
ECONOMY.
AND BECAUSE DEMAND IS GOING UP,
THE TAX CUTS CAME IN LATE
DECEMBER TAKING EFFECT THIS YEAR
ARE HAVING A POSITIVE IMPACT.
YOU SAW INCOMES IN JANUARY,
ESPECIALLY THE PRIVATE SECTOR
START TO RISE UP BUT --
TRISH: THAT IS ALL TAX REFORM.
>> CALL IT TAX CUTS.
TAX REFORM DOESN'T MEAN
ANYTHING.
TAX CUTS.
THEY'RE STARTING TO WORK.
STARTING TO WORK THEIR MAGIC BUT
TAX INCREASES DO THE OPPOSITE.
SO THERE ARE BETTER WAYS TO DEAL
WITH TRADE ABUSES THAN HURTING
AMERICANS.
TRISH: WHAT WOULD YOU PREFER HE
DO?
THIS IS A TRADE ABUSE.
IT IS NOT FAIR AND NOT RIGHT
THEY SUBSIDIZE INDUSTRIES AND
PUSH IT OVER HERE, HOW DO WE
COMPETE WITH THAT REALISTICALLY?
WE NEED TO PAY OUR WORKERS MORE.
>> IN THE BOOMING ECONOMY THE
STEEL INDUSTRY IS DOING WELL,
ALUMINUM INDUSTRY IS DOING
FAIRLY WELL.
IN TERMS OF CHINA TRADE ABUSES
IF YOU THINK YOU DO SOMETHING,
PUT QUOTAS ON, ONLY EXPORT SO
MUCH, RATHER THAN PUTTING A TAX
ON RAISING THE PRICE.
TRISH: ISN'T THAT THE SAME THING
IN A WAY?
>> LESS HARMFUL, LESS HARMFUL
WHEN YOU PUT A QUOTA ON THAN
HAVING A BIG PRICE INCREASE
BECAUSE THE PRICE INCREASE IS
GOING TO GET PASSED THROUGH.
THAT WILL SLOW THE ECONOMY DOWN.
YOU COMBINE THAT AGAIN WITH A
WEAK DOLLAR, WE SAW JIMMY
CARTER, AND OTHERS IN THE PAST
WHERE THAT LEADS.
TRISH: YOU AND I WERE TALKING
BEFORE WE WENT LIVE THERE.
WE WERE TALKING ABOUT HERBERT
HOOVER, WE WERE TALKING ABOUT
SMOOT-HAWLEY.
THE SMOOT-HAWLEY TARIFF OCCURRED
IN THE 1930s, WHY IT WAS SO
CHALLENGING TO GET OUT OF THE
GREAT DEPRESSION.
>> IT PRECIPITATED THE GREAT
DEPRESSION.
TRISH: YES, FORGIVE ME.
THAT IS ONE OF THE REASONS WHY
IS BASICALLY CONSTRICTED THE
ECONOMY.
TYPICALLY AS YOU STUDY ECONOMIC
HISTORY, TARIFFS ARE SEEN AS
SOMETHING VERY BAD BECAUSE YOU
DON'T WANT TO REDUCE TRADE IN
ANY WAY BUT I STILL, STEVE, AM
CHALLENGED BY THE ENVIRONMENT
WE'RE LIVING THROUGH RIGHT NOW
WHERE, I GO THROUGH SOME SMALL
TOWNS IN AMERICA, THEY'RE LIKE
GHOST TOWNS.
THESE ARE TOWNS THAT WERE
MANUFACTURING HUB.
>> THE QUESTION WHAT WILL HELP
BRING MANUFACTURING BACK?
HURTING THE AMERICAN ECONOMY IS
NOT GOING TO HELP PARTS OF THE
ECONOMY THAT HAVE BEEN HIT
HARDEST.
THAT IS WHY THE PRESIDENT'S
DEREGULATION, GOOD THING.
REDUCING TAXES GOOD THING.
BUT IN TERMS OF PUTTING
TARIFFS --
TRISH: LET ME COME AT IT ANOTHER
WAY.
SO, CHINA SENDING ALL THIS STUFF
HERE, CHEAPLY.
>> YOU MENTIONED THE WORD
SUBSIDIES.
IF YOU REALLY FEEL THAT STEEL
INDUSTRY IS ON ITS BACK, WHICH
THANKFULLY IT IS NOT, YOU CAN DO
THE SAME THING AS CHINA DID.
GIVE THEM A TAX CREDIT OR
SUBSIDY, BUT DON'T PUT A TAX --
TRISH: DOESN'T THAT COST THE
AMERICAN CONSUMERS AS WE, IT IS
BASICALLY OUR MONEY.
>> LESS HARMFUL, PUTTING A TAX
ON AND REDUCING ECONOMIC
ACTIVITY.
TRISH: BUT THEY'RE DOING THAT TO
US.
>> YEAH.
TRISH: SO IF WE SEND THINGS OVER
THERE, THEY PUT THE TAX ON
THEIR --
>> WE'RE NOT SENDING STEEL OVER
THERE BECAUSE THEY HAVE TOO MUCH
STEEL CAPACITY.
THAT IS WHY WE HAVE THIS
CHALLENGE IN THE FIRST PLACE.
THE QUESTION IS, WHAT DO YOU DO
ABOUT IT?
YOU JUST DON'T HAVE TO CONFINE
IT TO ECONOMICS.
CHINA, YOU DO, SAY, FOR EXAMPLE,
TWO GOOD THINGS, TO INCREASE
EVEN MORE NAVAL PATROLS IN THE
SOUTH CHINA SEA.
YOU START MAKING NOISES ABOUT
MAYBE WE INTRODUCE, WHICH WE
ONCE HAD IN SOUTH KOREA,
TACTICAL NUCLEAR WEAPONS.
WE TOOK THEM OUT OF SOUTH KOREA
IN THE EARLY 1990s.
THERE ARE OTHER WAYS TO BRING
PRESSURE ON CHINA THEY HAVE GOT
TO START BEHAVING THEMSELVES AND
HURTING AMERICAN CONSUMER.
>> MILITARY PRESSURE MAKES ME
MORE NERVOUS, I WOULD ALWAYS
PREFER TO EXERCISE ECONOMIC
PRESSURE I WOULD RISK DOLLARS
THAN LIVES.
>> THE WAY YOU PREVENT LOSING
LIVES, SHOWING YOU'RE BUILDING
UP ROBUST MILITARY, YOU'RE GOING
TO PROTECT OUR ALLIES.
MEANTIME, DON'T HURT THE
AMERICAN CONSUME.
BECAUSE THE AMERICAN CONSUMER
HURT THAT WILL HELP DEMOCRATS
AND WE KNOW --
TRISH: I DON'T THINK AMERICAN
>> HIGHER PRICES NOT GOING TO
HURT THEM?
TRISH: YOU KNOW, I SAID THIS
BEFORE, IN SOME WAYS, STEVE, I
THINK ABOUT THIS iPHONE,
RIGHT, WHAT DOES IT COST THESE
DAYS 1000 BUCKS TO BUY ONE OF
THESE THINGS?
>> YEAH.
TRISH: WHAT IF IT COSTS 1500?
PEOPLE PAYING 1500, GUESS WHAT
WE'RE EMPLOYING SOMEWHERE IN
AMERICA WHO CAN TAKE CARE OF HIS
OR HER FAMILY BECAUSE THEY'RE
MAKING DECENT ENOUGH WAGE.
GUESS WHAT?
YOU AND I DON'T HAVE TO
SUBSIDIZE THEM THROUGH
GOVERNMENT MEANS.
IN THEY NEEDLESS IN WAY OF
WELFARE BECAUSE THEY ACTUALLY
HAVE A JOB THAT I PASS THEM
ENOUGH TO LIVE ON?
>> IF YOU INCREASE THE PRICE OF
A PRODUCT 50%, THAT MEANS THERE
WILL BE LESS SALES, WHICH MEANS
APPLE WILL BE LAYING PEOPLE OFF,
RATHER THAN HIRING PEOPLE.
TRISH: IT IS GIANT RACE TO THE
BOTTOM.
THIS IS WHAT IS SCARY.
>> WE'RE GROWING.
WE'RE GROWING.
NOW WE'RE GOING TO DO WHAT WE
DID IN THE 1930S, GET IN TRADE
WAR?
NOT A GOOD THING.
THE REAL BIG THING, THESE
TARIFFS, IF YOU STOP WITH THE
TARIFFS WE COULD LIVE WIT, WE'LL
SURVIVE IT.
THE BIG WORRY WHAT WILL HAPPEN
WITH NAFTA.
IF NAFTA BLOWS UP, NOT 500 POINT
DAY, YOU WILL SEE THOUSANDS OF
POINTS DAYS.
NOT GOOD.
TAXES ARE NOT GOOD.
TRISH: ALL RIGHT.
>> REMEMBER THAT HOME.
TRISH: YOU KNOW I'M ALL ABOUT
LOW TAXES.
THAT IS, I GO TO BED AND GET UP
EVERY MORNING, SAYING I WANT
LOWER TAXES BUT I WANT US TO BE
AS COMPETITIVE AS POSSIBLE AS
WELL.
>> LOW TAXES IS THE BEST WAY TO
DO IT.
TRISH: YES.