WATCH THEIR EARNINGS DOWNGRADED
NEXT YEAR UNTIL WE GET A DEAL
WITH CHINA.
ASHLEY: WHAT I'M GETTING FROM
THAT, LARRY, IT IS NOT ONLY
APPLE HURTING IN CHINA, OTHER
COMPANIES, U.S. COMPANIES DOING
BUSINESS THERE BECAUSE THE
CHINESE ECONOMY IS DECELERATING.
HE IS SAYING THAT'S A GOOD
THING.
I THINK ULTIMATELY BECAUSE IT
DOES PUT MORE PRESSURE ON CHINA,
TO GET A DEAL DONE.
IT GIVES THE TRUMP
ADMINISTRATION THE UPPER HAND IN
TRADE TALKS, WOULD YOU AGREE
WITH THAT?
>> WELL, LET'S SEE.
THOSE ARE, IT IS, YOU HAVE ASKED
A STRING OF QUESTIONS.
THEY'RE ALL GOOD QUESTIONS BY
THE WAY.
LET ME TRY TO TAKE EACH BLOCK AT
ONE TIME.
FIRST OF ALL KEVIN HASSETT IS
ONE OF THE SMARTEST PEOPLE I
KNOW.
WE WENT BACK AND TOOK A LOOK AT
THE CHINESE PROFIT STORY.
HERE'S WHAT WE FOUND.
IF ALL AMERICAN COMPANIES
OPERATING IN CHINA, OKAY,
AMERICAN COMPANIES IN CHINA MADE
NO PROFITS AT ALL, ZERO, IT
WOULD ONLY HAVE A SMALL IMPACT
ON OVERALL PROFITS, 1.7% OF
TOTAL PROFITS.
THAT IS VERY UNLIKELY.
AMERICAN COMPANIES WILL MAKE
SOME MONEY IN CHINA, BUT I'M
JUST SAYING THAT 1.7% IT'S A
PRETTY SMALL NUMBER.
SO I WOULDN'T TAKE THAT TOO FAR.
POINT NUMBER TWO, THE CHINESE
ECONOMIC SLUMP HAS BEEN GOING ON
FOR A WHILE.
YOU CAN RUN THE CHARTS YOURSELF
RIGHT AT YOUR DESK OFF YOUR
COMPUTER.
YOU'RE LOOKING AT 15, ALMOST 20
YEAR SLUMP IN RETAIL SALES AND
BUSINESS INVESTMENT.
AS I SAY, I THINK, I THINK THE
HEYDAY OF THE CHINESE
MARKET-ORIENTED REFORMS HAVE
PASSED.
AND NUMBER THREE, REGARDING
U.S.-CHINA RELATIONS ON TRADE
AND THE ECONOMY, LOOK, WE CAN
HELP THEM, OKAY.
NOW WE WANT A LEVEL PLAYING
FIELD, RIGHT?
WE WANT TO END UNFAIR TRADING
PRACTICES.
AS THE PRESIDENT OFTEN SAYS WE
WANT RECIPROCITY, RECIPROCITY,
OKAY?
THREE ZEROS, NONE TARIFF
BARRIERS AND SUBSIDIES.
I BELIEVE STRONGLY THESE KINDS
OF REFORMS CHINA OPENS UP ITS
MARKETS AND SLASHES THEIR
BARRIERS AND IF THEY PLAY BY THE
RULES REGARDING TECHNOLOGY, WILL
HELP CHINA.
GIVE AMERICAN COMPANIES, THIS IS
KIND OF AN OFFSHOOT, I DON'T
HEAR ENOUGH OF THIS, AMERICA IS
THE MOST COMPETITIVE ECONOMY IN
THE WORLD TODAY.
WE'RE THE HOTTEST ECONOMY IN THE
WORLD TODAY AS PER THE NUMBERS
TODAY AS WELL AS OTHERS.
MONEY IS FLOCKING TOE AMERICA,
TREMENDOUS INVESTMENT, LONG-TERM
INVESTMENT.
NOW IF YOU GIVE US AN
OPPORTUNITY TO EXPORT MORE TO
CHINA, BRING THOSE TARIFF WALLS
DOWN, BRING THOSE BARRIERS DOWN,
IF THEY GIVE IT TO US, WE WILL
BENEFIT, OUR TRADE GAP WILL
NARROW, OUR EXPORTS WILL CREATE
JOBS EVERYWHERE, INCLUDING
GOOD-PAYING, HARD-HAT
MANUFACTURING BLUE-COLLAR JOBS
BUT CHINA WILL BENEFIT.
CHINESE COMPANIES, CHINESE
PEOPLE, WILL GET THE BEST
QUALITY GOODS AT THE LOWEST
PRICES AROUND THE WORLD IF THEY
GIVE AMERICA MORE FREEDOM TO GO
INTO CHINA.
IT WILL GET THEM ON THE MARKET
PATH.
THEN THEIR SLUMP, WHICH REALLY
IS ABOUT 15 YEARS OLD CAN END,
ALL RIGHT?
MARKET-BASED REFORMS.
THAT IS WHAT WE'RE ASKING AND
WE'RE ALSO ASKING TO PROTECT OUR
TECHNOLOGY, THE FAMILY JEWELS.
SO LOOK, THE CATCH-ALL, OKAY?
MR. TIM COOK IS WORRIED.
HE IS A GOOD MAN.
TALK TO HIM FREQUENTLY.
RUNS A GREAT BUSINESS OUT THERE.
MR. COOK SHOULD HELP US GET THE
TRADE REFORMS THROUGH BECAUSE IT
WILL BE GOOD FOR CHINESE GROWTH
AND GOOD FOR APPLE iPHONES BE
MAKING IN CHINA.
ASHLEY: SO HOW CAN TIM COOK HELP
YOU?
>> TIM COOK -- ANY CEO CAN HELP
US.
TALK TO THE CHINESE LEADERSHIP,
FOR EXAMPLE.
TALK TO THE LOCALS TALK TO THE
STATE PEOPLE, TALK TO THE TOP
COUNCILS, TALK TO PRESIDENT XI,
TALK TO MY FRIEND VICE PREMIER
LEE WHO IS I THINK GENUINE
REFORMER IF THE UPPER ECHELON
GIVES HIM THE RUNNING ROOM.
THE CHINESE MARKET IS BIG, WE
GET THAT, WE WOULD LIKE MORE
FREEDOM AND OPEN BUT, BUT, BUT,
PRESIDENT TRUMP SAYS A LOT OF
TIMES, IF CHINA WILL NOT
COOPERATE, THEN OUR TARIFF RATES
MAY GO UP AND OUR TARIFF
COVERAGE MAY INCREASE BECAUSE
RIGHT NOW, IT IS AN UNFAIR
SITUATION.
ASHLEY: SO WHAT DOES YOUR GUT
TELL YOU, LARRY, WITH REGARD TO
THE MARCH 1st DEADLINE?
CAN WE GET SOMETHING DONE BEFORE
THOSE TARIFFS KICK IN ON
MARCH 1st?
>> YES, WE CAN.
I DON'T WANT TO GET AHEAD OF IT.
WE'RE FOCUSED ON THAT.
WE'RE FOCUSED ON THE NEXT COUPLE
MONTHS.
BEYOND THAT WE'LL WAIT AND SEE.
THAT IS PRESIDENT TRUMP AND SO
FORTH.
BUT YES, MANY THINGS CAN GET
DONE.
WE'RE GOING THERE.
OUR GROUP IS GOING OVER THERE.
WE EXPECT A HIGHER LEVEL CHINESE
GROUP TO BE COMING HERE IN DUE
COURSE BEFORE THE DEADLINE.
SO LET'S BE REALISTIC BUT LET'S
BE, LET'S BE OPTIMISTIC ABOUT.
LET'S BE, I DON'T KNOW THE WHAT
IS THE RIGHT WORD, GUARDEDLY
OPTIMISTIC.
YOU KNOW ME.
I'M AN OPTIMIST.
IF THERE IS A WILL THERE IS A
WAY.
YOU TALK ABOUT LIGHTHIZER, WHO
IS THE BEST TRADE NEGOTIATOR IN
THE BUSINESS, HE WILL TELL YOU
WE LOVE TO WORK THESE THINGS
THROUGH.
WE HAVE A CLEAR LIST.
THEY KNOW WHAT WE'RE ASKING.
I JUST OUTLINED MUCH OF IT TO
YOU MOMENT AGO, THAT IS WHAT OUR
DEPUTIES WILL CARRY BUT
MR. LIGHTHIZER TAUGHT ME DOWN
THROUGH THE YEARS CHINESE
PROMISES HAVE TO BE BACKED UP BY
ENFORCEMENT.
ENFORCEMENT, TIMETABLES, TRUST
BUT VERIFY.
CAN WE DO IT?
OF COURSE WE CAN DO IT.
WILL WE DO IT?
WELL, LET'S SEE.
ASHLEY: PETER NAVARRO IS NOT
GOING ON THIS TRIP NEXT WEEK,
RIGHT?
HE IS CONSIDERED, QUITE, FOR
WONT OF A BETTER WORD, QUITE
HAWKISH AND STRONG WHERE THE
U.S. STANDS.
DOES THAT SUGGEST A MORE SOFTER
APPROACH AT LEAST AT THIS LEVEL?
>> [LAUGHTER] PETER NAVARRO IS
AN OLD FRIEND OF MINE.
HE IS A GREAT AMERICAN.
I LOVE HIM.
ASHLEY: THAT IS ALL YOU'RE GOING
TO SAY?
BUT HE IS CONSIDERED TO TAKE
KIND OF A STRONGER, MORE OF A
STICK THAN CARROT APPROACH.
YOU DON'T THINK THAT'S NEEDED AT
THIS POINT?
>> LOOK, AS I SAID BEFORE, YOU
MENTIONED STICKS AND CARROTS.
I GUESS THAT'S AN ENGLISH,
STICKS AND CARROTS.
ASHLEY: I THINK IT IS AMERICAN.
I DON'T KNOW.
>> ANYWAY, IT COULD ACTUALLY BE
AMERICAN.
LOOK OUR TRADE PRINCIPLES GROUP
WORKS TOGETHER VERY, VERY
CLOSELY.
I DARE SAY WE'RE ON THE SAME
PAGE.
AGAIN A QUICK REPEAT.
WE KNOW WHAT WE NEED WITH CHINA.
CHINA KNOWS WHAT WE'RE ASKING.
BUT PART OF THE WHOLE
NEGOTIATIONS SIMPLY MUST BE
ENFORCEMENT.
ENFORCEMENT, OKAY?
TRUST BUT VERIFY.
THIS IS SO IMPORTANT.
THAT SHOULD NOT BE AN OBSTACLE
BY THE WAY BUT IT'S GOT TO BE
PART AND PARCEL AT THE CENTER OF
ANY REFORM DECISIONS AND ANY
POLICY CHANGES.
I THINK OUR WHOLE GROUP IS
COMPLETELY UNIFIED ON THAT.
I BELIEVE PRESIDENT TRUMP ALSO