STUART: HE'S WITH US.
LARRY KUDLOW RIGHT THERE.
YES.
HEADS UP THERE, LARRY.
THANKS FOR BEING WITH US.
WE ALWAYS APPRECIATE IT.
FORGIVE ME, BUT I WANT TO START
WITH SOMETHING A LITTLE
DIFFERENT FROM WHAT I WAS JUST
TALKING ABOUT A MOMENT AGO.
PETER THIEL CALLED OUT GOOGLE
LAST NIGHT, SAID THEY SHOULD BE
INVESTIGATED BY THE FBI AND THE
CIA.
HE SAYS THEY'RE WORKING FOR
CHINA'S MILITARY AND NOT OURS.
THAT'S A PRETTY STRONG CHARGE.
HE CALLED GOOGLE TREASONOUS.
YOU ON BOARD WITH THAT?
>> NO, I'M NOT.
LOOK, I HAVE NOT SPOKEN TO PETER
THIEL ABOUT THIS.
I DID READ SOME NEWS STORIES,
NOT SURE WHERE HE'S GOING, WHAT
HE'S POINTING TO.
I MEET WITH GOOGLE, I MEET WITH
GOOGLE'S CEO ON A REGULAR BASIS.
I THINK THEY'RE WORKING FOR
AMERICA, FOR OUR MILITARY, NOT
FOR CHINA.
I DON'T KNOW -- PETER THIEL IS A
GOOD MAN, HAS BEEN A GREAT
SUPPORTER OF THE TRUMP
ADMINISTRATION, HE'S A VERY
SMART GUY.
I'M JUST NOT SURE WHERE HE'S
GOING ON THIS.
SO I HAVE MY DOUBTS BUT ONE
NEVER KNOWS.
JUST LET ME SAY, YOU KNOW,
GOOGLE, I GUESS IT'S VERY
FASHIONABLE TO PICK ON SOME OF
THESE BIG TECH COMPANIES.
MAYBE SOME DESERVE IT, MAYBE
SOME DON'T.
BUT I WANT TO SAY IN MY TENURE
HERE IN THE PAST YEAR AND A
HALF, I'VE HAD LONG DISCUSSIONS
WITH THE GOOGLE PEOPLE, WITH
THEIR CEO, THEIR NEW CEO, LONG
DISCUSSIONS WITH TIM COOK OF
APPLE.
I HAVE NOT MET WITH ALL THE TECH
COMPANIES BUT MY SENSE IS THEY
ARE VERY SUPPORTIVE OF A, THIS
COUNTRY, B, THIS PRESIDENT AND
HIS AGENDA.
I HAVE NOT FOUND PROBLEMS THERE.
AND I THINK THEY'RE WORKING HARD
AND I DON'T BELIEVE FOR ONE
MINUTE THAT GOOGLE IS SOMEHOW
COMMITTING QUOTE UNQUOTE,
TREASON.
I DON'T GET THAT.
I HAVE TO HEAR MR. THIEL'S WHOLE
STORY.
STUART: COULD YOU UPDATE US ON
TRADE?
I MEAN TRADE BETWEEN THE U.S.,
MEXICO, CANADA, USMCA, TRADE
BETWEEN THE U.S. AND JAPAN,
TRADE BETWEEN THE U.S. AND THE
EUROPEAN UNION, AND OF COURSE,
TRADE BETWEEN THE UNITED STATES
AND CHINA.
IT SEEMS LIKE THERE'S NOT A LOT
GOING ON IN THESE TRADE AREAS.
CAN YOU GIVE US AN UPDATE,
ANYTHING POSITIVE?
>> WELL, YEAH.
I THINK THERE'S A LOT OF
CONSTRUCTIVE THINGS GOING ON.
LET ME JUST START WITH USMCA,
WHICH IS A TERRIFIC TRADE DEAL,
NEGOTIATED BY AMBASSADOR
LIGHTHIZER.
HE'S WORKING VERY HARD UP ON THE
HILL WITH, I MIGHT ADD, THE
COOPERATION OF SPEAKER PELOSI.
I'M OPTIMISTIC WE HAVE A VERY
GOOD CHANCE OF GETTING THAT
THROUGH.
THAT USMCA DEAL, BY THE WAY, IS
WORTH ABOUT A HALF A PERCENT OF
ADDITIONAL REAL GDP PER YEAR TO
THE UNITED STATES.
STUART: CAN YOU GET IT THROUGH
CONGRESS?
WILL A DIVIDED HOUSE DO IT?
>> WELL, LOOK, I THINK WHEN
SPEAKER PELOSI GIVES US THE VOTE
AND I REMAIN OPTIMISTIC ON THAT,
I REMAIN OPTIMISTIC, THAT'S JUST
ME TALKING, I THINK IT CAN PASS
BUT AGAIN, AMBASSADOR LIGHTHIZER
CONTINUES TO DISCUSS WITH HER
AND HER LEADERS, I THINK THAT'S
A VERY GOOD SIGN.
SO WITHOUT PUTTING ANY
TIMETABLES ON IT, YES, I REMAIN
VERY CONSTRUCTIVE AND I JUST
WANT TO SAY ONE MORE THING HERE.
ONE MORE TIME, HOW STRONG THIS
IS FOR THE AMERICAN ECONOMY
WHICH IS WHY WE BELIEVE WE WILL
GET BIPARTISAN SUPPORT, NOT JUST
GDP, BUT ALSO PERHAPS A COUPLE
HUNDRED THOUSAND NEW JOBS,
PERHAPS $100 BILLION IN NEW
DIRECT INVESTMENT.
THERE IS OLD ECONOMY AND NEW
ECONOMY PROVISIONS IN THERE.
THERE'S CURRENCY STABILITY,
THERE'S LABOR PROVISIONS,
THERE'S ENVIRONMENTAL
PROVISIONS.
IT'S THE MOST REMARKABLE TRADE
DEAL AND I BELIEVE AT THE END OF
THE DAY, SOMETIME THIS YEAR, WE
ARE GOING TO GET A POSITIVE
VOTE.
STUART: CAN YOU GIVE ME AN
UPDATE ON CHINA TRADE TALKS?
I ASK THIS QUESTION BECAUSE WE
GOT NEWS THIS MORNING THAT
CHINA'S ECONOMY IS GROWING AT
ITS SLOWEST RATE IN ALMOST 30
YEARS.
MY QUESTION IS, IS THAT BECAUSE
OF THE TRADE FIGHT WITH AMERICA,
OR IS IT BECAUSE THERE'S
SOMETHING FUNDAMENTALLY WRONG
WITH THE CHINESE ECONOMY?
>> WELL, MAYBE A LITTLE BIT OF
BOTH.
IT'S A VERY STATE-CONTROLLED
GOVERNMENT-ORIENTED ECONOMY.
TO ME, THAT'S DAMAGING RIGHT
THERE, LACKS THE KIND OF FREE
ENTERPRISE VIBRANCY THE UNITED
STATES HAS, FOR EXAMPLE.
I THINK CHINA HAS BEEN HURT.
WE TALKED A LOT ABOUT THE
ECONOMIC BURDEN OF PRESIDENT
TRUMP'S TARIFFS FALLING MORE
HEAVILY ON CHINA.
BIG STORY IN THE PAPER TODAY,
BUNCH OF COMPANIES ARE ACTUALLY
LEAVING CHINA, CHANGING THEIR
SUPPLY CHAINS AND MOVING
ELSEWHERE.
SOME WILL GO TO OTHER COUNTRIES
IN ASIA.
SOME FRANKLY, WE HAVE HAD
REPORTS, ARE COMING TO THE
UNITED STATES.
I THINK THIS HAS HURT THE
CHINESE A LOT.
REGARDING THE TALKS, LIGHTHIZER
AND SECRETARY MNUCHIN HAVE BEEN
TALKING TO CHINA'S TOP PEOPLE.
THERE MAY BE A FACE-TO-FACE
MEETING IN THE CARDS, THOUGH IT
HASN'T BEEN FORMALLY DECIDED
YET, AS FAR AS I KNOW.
I WILL ADD ONE LAST THING.
PRESIDENT TRUMP HAS SAID ON
SEVERAL OCCASIONS HERE IT'S A
GOOD THING TO RESTART THE TALKS.
WE HAVE OPENED THE DOOR SLIGHTLY
TO NON-NATIONAL SECURITY
TRANSACTIONS WITH HUAWEI AND WE
HAVE FOR THE MOMENT SUSPENDED
ANY NEW TARIFFS, BUT, BUT, BUT,
BUT, BUT, WE DIDN'T EXPECT THE
CHINESE TO BE LAUNCHING A
SIGNIFICANT PURCHASE OF U.S.
AGRICULTURE PRODUCTS, GOODS AND
SERVICES.
WE HAVEN'T SEEN THAT QUITE YET.
BUT WE ARE VERY KEENLY WATCHING
THE DEVELOPMENTS THERE AND I
HOPE THAT THEY MAKE GOOD ON THAT
PROMISE.
STUART: ARE THEY BALKING AT HOW
MUCH AGRICULTURAL PRODUCE WE
WANT THEM TO BUY?
>> STU, I DON'T WANT TO GET INTO
DETAILS ON THAT.
ALL I'M SAYING IS WE'RE WAITING
FOR SOME ANNOUNCEMENTS ON THEIR
SIDE.
THAT WAS COVERED DURING THE
DISCUSSIONS IN OSAKA AND I KNOW
THAT SECRETARY MNUCHIN AND
AMBASSADOR LIGHTHIZER HAVE
MENTIONED THIS IN THEIR
CONVERSATIONS WITH CHINESE
OFFICIALS.
STUART: WE HAD REPORTS THIS
MORNING THAT PRESIDENT TRUMP IS
NOT HAPPY WITH THE WILBUR ROSS
COMMERCE SECRETARY IN PART
BECAUSE THAT QUESTION ON
CITIZENSHIP WAS NOT GOTTEN INTO
THE CENSUS, AND THE CENSUS
DEPARTMENT IS PART OF COMMERCE
DEPARTMENT WHICH IS RUN BY
WILBUR ROSS.
HAVE YOU HEARD ANYTHING ABOUT
MR. ROSS LEAVING?
>> I HAVE NOT.
WILBUR AND HIS DEAR WIFE HILARY
ARE LONG TIME, LONG TIME
MULTI-DECADE FRIENDS OF THE
KUDLOW FAMILY.
I LOVE WORKING WITH WILBUR IN
THIS ADMINISTRATION.
HE BY THE WAY WAS A GREAT STAR
IN "THE KUDLOW REPORT" MANY
YEARS AGO ON ANOTHER NETWORK.
I KNOW I'M NOT ALLOWED TO SAY
THAT.
I JUST LET THE CAT OUT OF THE
BAG.
HE'S DONE A FINE JOB AT THE
COMMERCE DEPARTMENT AND SO FAR
AS I KNOW, I HAVE NOT SPOKEN TO
THE PRESIDENT ABOUT ANY OF THESE
RECENT EVENTS, BUT WILBUR ROSS
IS A GOOD MAN AND HAS DONE A
GOOD JOB RUNNING COMMERCE.
STUART: LATER THIS HOUR, I THINK
IT'S LATER THIS HOUR, THE
PRESIDENT'S GOING TO BE ON THE
SOUTH LAWN HOSTING THE THIRD
ANNUAL MADE IN AMERICA PRODUCT
SHOWCASE.
MANUFACTURERS ARE MOVING OUT OF
CHINA BECAUSE OF THOSE TARIFFS.
CAN YOU TELL US HOW MANY OF
THOSE MANUFACTURERS ARE ACTUALLY
MOVING BACK TO THE UNITED
STATES?
I KNOW THERE'S A BIG STORY ABOUT
THAT THIS MORNING.
IS THERE A REAL FLOOD COMING
BACK HERE OR IS IT A FLOOD GOING
TO OTHER PARTS OF ASIA?
>> I THINK IT'S A LITTLE OF
BOTH.
THERE'S A LOT OF MOVEMENT OUT OF
CHINA INTO ASIA AND THERE'S ALSO
MOVEMENT OUT OF CHINA INTO THE
UNITED STATES.
I'M NOT GOING TO GO INTO A LOT
OF HEAVY DETAIL.
LOOK, USA, WE ARE VERY
HOSPITABLE ENVIRONMENT, FRANKLY,
MORE HOSPITABLE THAN CHINA, I
THINK.
I MEAN, WE GOT 21% CORPORATE TAX
RATE.
WE HAVE ROLLED BACK SO MANY
REGULATIONS ACROSS THE BOARD.
THE DOLLAR IS THE DOMINANT
CURRENCY IN THE WORLD, AS THE
PRESIDENT TWEETED JUST A FEW
DAYS BACK.
I THINK IT'S A GREAT PLACE TO
INVEST.
SO COME TO AMERICA, BUY AMERICA,
COME BACK TO AMERICA.
I WILL PERSONALLY SHAKE
EVERYBODY'S HAND THAT COMES BACK
TO THE COUNTRY.
I BET YOU PRESIDENT TRUMP DOES,
TOO.
WE ARE VERY OPTIMISTIC ABOUT
THAT PART OF THE STORY.
AND I'M SHOCKED, STUART, I MEAN,
I'M SHOCKED, HERE WE ARE, EIGHT
OR TEN MINUTES INTO THIS
GRUELING INTERVIEW THAT YOU HAVE
SUBJECTED ME TO, IT'S ABOUT 120
OUTSIDE HERE, AND YOU HAVEN'T
MENTIONED THE STRONG AMERICAN
ECONOMY.
YOU HAVEN'T MENTIONED THE
FABULOUS JOBS REPORT THAT'S
GOING ON.
YOU HAVEN'T MENTIONED THE BIG
STOCK MARKET RALLY.
YOU HAVEN'T MENTIONED THE FACT
THAT BLUE COLLAR WORKERS AND THE
SO-CALLED NON-SUPERVISORY
WORKERS ARE THE BIGGEST
BENEFICIARIES OF THIS BOOM.
I'M SHOCKED, IF I REACH OVER, I
NEED SOME WATER TO COOL MYSELF
DOWN.
STUART: HAD YOU BEEN APPEARING
ON A DIFFERENT NETWORK, YOUR OLD
NETWORK, THEY WOULD OF COURSE
HAVE RAISED THE ISSUE OF THE
WONDERFUL ECONOMY, THE WONDERFUL
MARKET, THE EXTREME
PROFITABILITY, WOULDN'T THEY?
>> WELL, I DON'T WANT TO MAKE
PRESUPPOSITIONS ON THAT.
I LOVE COMING ON THE STUART
VARNEY SHOW.
THAT'S WHY I'M ON THIS THING
MORE.
AT SOME POINT, YOU ALL ARE GOING
TO HAVE TO GIVE ME A BOX OF
CIGARS OR SOMETHING AS PAYMENT.
I KNOW WE CAN'T DO DIRECT CASH.
BUT LOOK, I DO WANT TO SAY, I DO
WANT TO SAY AND REPEAT THAT THE
U.S. ECONOMY IS VERY STRONG AND
THAT'S WHAT THE JOBS REPORT AND
WAGES ARE RISING AND I GROW
WEARY, I WANT TO MAKE ONE POINT,
I GROW WEARY AS I READ THESE
ARTICLES AND SOME OF OUR
CRITICS, SOME OF WHOM, I'M NOT
POLITICAL SO I CAN'T GO DOWN
THAT ROAD, BUT SOME OF WHOM
APPEAR TO BE RUNNING FOR HIGHER
OFFICE AND THEY ARE PAINTING A
PICTURE OF AN ECONOMY DEEP INTO
RECESSION.
WE ARE IN A STRONG PROSPERITY
BOOM AND EVERY DATA POINT SHOWS
THAT AND WHEN WE GO INTO THE
DISTRIBUTION OF THESE ECONOMIC
BENEFITS, IT IS PRECISELY THE
BOTTOM HALF, IN SOME CASES THE
LOWEST 10% THAT HAVE ACTUALLY
DONE THE VERY BEST IN THIS
ECONOMY.
SO I WISH YOU WOULD ASK ME ABOUT
THAT.
STUART: OKAY.
HERE'S WHAT I WILL ASK YOU, IN
THE LAST 20 SECONDS I'VE GOT
AVAILABLE HERE.
SECOND QUARTER OF THIS YEAR,
WHAT'S OUR RATE OF ECONOMIC
GROWTH?
>> WELL, WE'LL SEE WHAT THE LAST
DETAILS COME IN.
WE DON'T HAVE ALL --
STUART: UNDER 2%?
>> I THINK WE ARE ON A 3% GROWTH
PATH.
WE HAD 3.1% AND 3.2% IN THE
FIRST QUARTER.
WE ARE STAYING WITH OUR 3%
GROWTH PATH TO THE YEAR.
THE TRENDS LOOK VERY GOOD.
AGAIN, AGAIN, I GUESS IN THE
BACK DOORWAY, THE ECONOMY,
CONSUMERS, WE ARE SEEING A
PICKUP OF BUSINESS PROFITS, THEY
WILL OUTPERFORM THE USUAL DOOM
AND GLOOM.
I'M KIND OF THE HAPPY CAMPER
TODAY EVEN THOUGH I'M WILTING IN
THIS SUN.
STUART: SORRY.
GO BACK TO AIR CONDITIONING,
LARRY.
I UNDERSTAND THESE THINGS.