CONNELL: WE DO HAVE NEW NUMBERS
SHOWING THE U.S. TRADE DEFICIT
GROWING.
THOSE NUMBERS IN FROM THE
COMMERCE DEPARTMENT, WIDENING BY
1.3%.
$77.2 BILLION IN THE MONTH OF
OCTOBER.
PRESIDENT TRUMP GETS SET TO
LEAVE TOMORROW FOR G20 SUMMIT IN
ARGENTINA WHERE HE DOES HAVE THE
BIG MEETING WITH CHINESE
PRESIDENT XI XINPING.
THERE IS ALL THIS TALK WHETHER
WE GET A BREAKTHROUGH THIS
WEEKEND ON TRADE.
LET'S BRING IN AUTHOR, FOREIGN
AFFAIRS JOURNALIST, GORDON
CHANG.
I MENTIONED THE TRADE DEFICIT
LARGELY BECAUSE THE PRESIDENT
MENTIONS IT SO MUCH, TO GET OUT
OF THE WAY, TO ME IT IS NOT VERY
USEFUL METRIC LOOKING AT ALL OF
THIS.
MEANS WE'RE IMPORTING MORE THAN
EXPORTING.
THE ECONOMY IS STRONG.
DO YOU DISAGREE?
WHAT DO YOU MAKE AFTER WIDENING
TRADE DEFICIT?
>> WHEN YOU HAVE VIBRANT ECONOMY
AMERICANS WILL SPEND.
THIS IS HEADING TO
CHRISTMASTIME.
OF COURSE THE TRADE DEFICIT IS
GOING TO BE BIG.
IT'S A SIGN OF A SUCCESSFUL
ECONOMY.
IT IS NOT A SIGN OF AN
UNSUCCESSFUL POLICY WITH REGARD
TO CHINA.
THAT IS NOT A METRIC OF THAT.
CONNELL: THE PRESIDENT USES
TRADE DEFICIT METRIC AS FLAWED
AS IT MAY BE, AS HE GOES INTO
WEEKEND MEETING WITH XI XINPING,
WHAT WOULD BE A BETTER WAY TO
DEAL WITH IT?
>> MOST IMPORTANT THING PROTECT
U.S. PROPERTY FROM INTELLECTUAL
THEFT.
THEY ARE TAKING HUNDREDS OF
BILLIONS OF DOLLARS THIS YEAR.
CONNELL: HOW DO YOU DO THAT THIS
WEEKEND?
>> CHINA THERE IS NO DEAL, WE'LL
CONTINUE TO IMPOSE STUFF, UNTIL
CHINA STOPS STEALING OUR STUFF
AND STOP PREDATORY TRADE
PRACTICES STOP ALL.
THEY AGREE ALL THE TIME TO STOP
STEALING.
XI XINPING WAS STANDING IN THE
ROSE GARDEN, SENT 2015 SAID WE
ARE NOT GOING TO HACK THE
COMPANIES OF THE OTHER COUNTRY
FOR COMMERCIAL PURPOSES.
CHINA NEVER STOPPED HACKING OUR
COMPANIES.
CONNELL: YOU'RE SAYING THE
PRESIDENT SHOULD BASICALLY WALK
OUT OF MEETING WITH NOTHING
HAVING BEEN ACCOMPLISHED?
I HAVE RESEARCH IN FRONT OF ME,
DAN CLIFTON I WAS RAIDING THIS
MORNING.
I THINK THERE IS A PROBLEM WITH
WHAT YOU'RE SAYING.
FROM THE FINANCIAL MARKET THE
POINT OF VIEW, THEY'RE LOOKING
WHAT THE SCENARIOS MIGHT BE.
HE SAID THE FRAMEWORK SET UP
RESULT SCENARIOS, 40%
PROBABILITY, CEASE-FIRE WOULD BE
A TRUCE IS 30%.
THAT GETS US TO 70, RIGHT?
BIGGER THAN EXPECTED DEAL IS
20%.
SO NOT A VERY GOOD CHANCE.
FAILURE, WHICH IS ESSENTIALLY
WHAT YOU'RE SAY SOMETHING 10%.
AND THAT WOULD BE A DISASTER FOR
MARKETS.
IF WHAT YOU SAY SHOULD HAPPEN,
DOES HAPPEN, THE 600 POINTS WE
HAVE TODAY COULD BE, TURNED
AROUND AND EVEN MORE THAN THAT
ON MONDAY?
>> SURE.
WE SHOULDN'T THINK AFTER DECADES
OF MISGUIDED TRADE POLICY THERE
ARE ANY NO COST SOLUTIONS.
IF YOU'RE SAYING, WELL LOOK,
LET'S DO SOMETHING GREAT FOR
FINANCIAL INVESTORS BUT THE
POINT IS, WHAT ARE YOU GOING TO
DO 10 YEARS FROM NOW, 20 YEARS
FROM NOW WE BECOME JUST AN
EXPORTER OF ONLY PRIMARY
AGRICULTURAL PRODUCTS?
WE DO NOT NEED TO BE A THIRD
WORLD ECONOMY.
THIS WILL BE PAINFUL.
CONNELL: MEANTIME A LOT OF THESE
COMPANIES, A LOT OF THESE
FARMERS COULD GO UNDER?
>> THEY COULD BUT IT IS UNLIKELY
BECAUSE YOU KNOW, I HEARD
SOMEONE, ONE OF OUR GUESTS TALK
ABOUT, WELL, BRAZIL IS SELLING
STUFF TO CHINA.
THERE ARE ONLY SO MANY SOYBEANS
IN THE WORLD.
BRAZIL IS NOT SELLING TO
TRADITIONAL CUSTOMERS.
MEANS AMERICANS WILL DO THAT.
AMERICAN SOYBEAN FARMERS ARE
PLANTING OTHER STUFF.
THEY KNOW --
CONNELL: THEY'RE FORCED TO.
THEY'RE FORCED TO MAKE
ADJUSTMENTS AT SOME POINT THEY
MIGHT BE FORCED TO SELL THEIR
FARM OR THEIR FARM MIGHT GO DOWN
IN VALUE.
>> SURE.
CONNELL: THERE IS SOME PRETTY
BIG PROBLEMS WITH THOSE PEOPLE.
>> OF COURSE.
THIS IS WHY YOU HAVE A
GOVERNMENT BECAUSE YOU CAN HAVE
SUPPORT FOR FARMERS, AS WE DO.
WE SUPPORT FARMERS ANYWAY.
WE CAN JUST INCREASE THAT.
BUT THE POINT IS, THAT YOU KNOW,
IF YOU WANT AN ECONOMY WITH NO
GOOGLE, NO AMAZON, NO MICROSOFT,
NO WHATEVER, THEN, YEAH, THAT IS
WHERE WE'RE GOING.
YOU HAVE TO DO SOMETHING ABOUT
IT.
OR IT WILL HURT.
CONNELL: CHINA HAS TO GIVE IN,
QUICK FINAL POINT DO YOU THINK
THEY DO?
DEFINITELY NOT THIS WEEKEND.
A LONG WAY OFF.
>> XI XINPING BELIEVES IN STATE
DOMINATED ECONOMY.