SMOOT-HAWLEY-STYLE TRADE WAR.
PERHAPS THE MARKET IS REALIZING
THAT AS WE LOOK AT MARKET UP
317.
>>> MANY ESTABLISHMENT
REPUBLICANS ARE FIRED UP OVER
THESE TARIFFS.
THEY'RE SAYING AS IT PLAYS IN
PEORIA BUT WILL IT REALLY?
TRADE WAS A MAJOR ISSUE FOR
TRUMP VOTERS IN STEEL-PRODUCING
STATES LIKE OHIO AND
PENNSYLVANIA.
WHERE WHITE WORKING CLASS
AMERICANS HAVE SEEN WAGES
STAGNATE OVER LAST 30 YEARS?
CONGRESSIONAL CANDIDATE CONNOR
LAMB SAYS CHINA HAS BEEN MAKING
CHEAP STEEL, IT IS NOT FAIR, NOT
RIGHT.
I THINK THIS IS LONG OVERDUE.
GOSH, LIKE THE PARTIES ARE
SWITCHING AROUND.
SUDDENLY DEMOCRATS ARE FISCAL
CONSERVATIVES.
I HAVE DEMOCRATS THINKING THAT
THE AGREEING WITH THE
PRESIDENT'S TRADE POLICY WHAT
DOES IT MEAN FOR 2008?
JOINING ME WITH MORE, FOX NEWS
CONTRIBUTOR KARL ROVE.
KARL, EVERYBODY IS GOING THIS
WAY OR THAT WAY AND TRADITIONAL
PARTY PLATFORMS ARE IN SOME WAY
BEING RATHER ABANDONED.
>> WELL, FOR ME IT IS DEJA VU
ALL OVER AGAIN SINCE IN 2002 THE
BUSH ADMINISTRATION APPLIED A
MUCH NARROWER SET OF TARIFFS
DESIGNED TO GET AT CHINESE
DUMPING.
FOR EXAMPLE, MEXICO AND CANADA
WERE EXCLUDED FROM THEM BUT BY
THE END OF 2003 OUR TRADING
PARTNERS HAD USED THE, USED
THEIR POWER TO PUT TARIFFS OR
THREATEN TARIFFS NOT ONLY ON
THINGS LIKE BOURBON MADE IN
MITCH McCONNELL'S HOMETOWN OR
MOTORCYCLES BUILT IN PAUL RYAN'S
HOME STATE BUT ON REAL THINGS
AND REAL PEOPLE AROUND THE WORLD
BOUGHT FROM THE UNITED STATES.
TRISH: YOU DIDN'T LIKE THEM?
>> THE PRICE OF KEEPING THEM IN
PLACE WAS TOO HIGH.
AND THOSE WERE NARROWLY-DRAWN.
LOOK, CARTER, MR. LAMB THERE,
CONNOR LAMB RUNNING FOR CONGRESS
IN PENNSYLVANIA, THE PROBLEM IS
CHINA.
WE OUGHT TO DO SOMETHING ABOUT
CHINA.
CHINA REPRESENTS 2% OF THE
IMPORTS.
IF WE'RE TRYING TO GET AT CHINA,
WHY DON'T WE TALK ABOUT CHINESE
DUMPING PRACTICES, HIT CHINA
WHICH IS DUMPING STEEL, RATHER
THAN OUR NEIGHBORS CANADA AND
MEXICO NOT SELLING AT SUBSIDIZED
PRICE BUT MARKET PRICE.
TRISH: MAYBE ITS ABOUT SOMETHING
ELSE, KARL, AS ART LAFFER WAS
SAYING EARLIER.
MAYBE THIS IS ABOUT NAFTA?
>> MAYBE IT IS.
BUT YOU KNOW WHAT?
HERE'S THE DEAL.
I'M WILLING TO EXCLUDE CANADA
AND MEXICO IF THEY DO SOMETHING
FOR ME.
REMEMBER WHAT WE WANT FROM
MEXICO AND CANADA, WE WANT TWO
THINGS.
ONE IS, WE WANT THE ABILITY TO
END THE AGREEMENT FIVE YEARS
AUTOMATICALLY.
HAS TO BE RENEWED EVERY FIVE
YEARS.
WHAT COMPANY WILL SAY I WILL
COMMIT TO LONG-TERM SUPPLY
CHAIN, THAT COULD DISAPPEAR IN
FIVE YEARS?
SECOND OF ALL, WE WANT TO HAVE
EVEN HIGHER MESSAGE OF THE
CONTENT OF AUTOMOBILES MADE IN
THE NORTH, IN THE HEMISPHERE TO
BE MADE OUT OF AMERICAN CONTENT.
WELL WE ALREADY ARE TESTING THE
LIMITS OF WHAT THE WORLD TRADING
ORGANIZATION WOULD CONSIDER TO
BE A PROTECTION MEASURE, WE WANT
TO RAISE IT EVEN HIGHER.
THE PRESIDENT KEEPS MAKING
STATES SIMPLY NOT TRUE WITH ALL
DUE RESPECT.
WE HAVE A BIG TRADE DEFICIT HE
SAYS WITH CANADA.
NOT TRUE!
WE HAVE A TRADE SURPLUS.
THEY BUY MORE GOODS WE BUY MORE
FOOD IN THEM THAN THEY BUY US
FROM, BUT WE BUY MORE SERVICES
FROM THEM.
WE RUN SEVERAL BILLIONS OF
DOLLARS A YEAR TRADE SURPLUS
WITH CANADA.
THE PRESIDENT CAN'T ACKNOWLEDGE
THAT.
TRISH: LOOK AT THIS NUMBER, I
WILL CONFIRM WITH MY PRODUCING
TEAM IN CONTROL ROOM,
$17.6 BILLION TRADE DEFICIT WITH
CANADA.
I HEAR WHAT YOU'RE SAYING.
>> NO, NO, NO.
THAT IS INCORRECT.
IN GOODS ONLY.
DOESN'T TAKE INTO ACCOUNT
SERVICES.
>> OKAY.
GOODS ONLY.
>> SELLING INSURANCE IS AS JOB
IN COLUMBUS, OHIO MAKING
SOMETHING.
TRISH: HERE IS THE PROBLEM
THOUGH, KARL, I DON'T KNOW THE
ANSWER, I'M NOT GOING TO TAKE A
SIDE IN THIS DEBATE HERE WITH
YOU, BUT THE CHALLENGE IS, YOU
GO THROUGH ALL THESE SMALL
TOWNS, I KNOW YOU VISIT A LOT OF
THEM IN MIDDLE AMERICA.
>> YEAH.
TRISH: THERE WERE PEOPLE THERE
THAT ONCE HAD THE OPPORTUNITY TO
EARN A GOOD LIVING AND ONE
PARENT WORKING, TAKE CARE OF
THEIR FAMILY.
GO ON ANNUAL FAMILY VACATION,
TWO CARS, DOG, PICKET FENCE, THE
WHOLE NINE YARD.
WE DON'T HAVE THAT ANYMORE.
>> YEAH.
IN A LOT OF PLACES.
TRISH: MANUFACTURING, MAYBE THEY
CAN'T SELL INSURANCE.
MAYBE THAT IS DIFFERENT
SKILLSET.
WHAT DO WE DO ABOUT ALL THE
PEOPLE THAT DEPENDED ON THOSE
JOBS?
THEY CAN GET -- THEY'RE NOT
GOING TO TURN INTO ENGINEERS.
>> THERE IS NO EASY ANSWER TO IT
BECAUSE LOOK AT KIND OF STEEL
COMPANIES AROUND THE WORLD THAT
ARE MAKING MONEY TODAY.
THEY'RE HIGHLY MECHANIZED,
HIGHLY AUTOMATED WITH MUCH
SMALLER WORKFORCE.
AN EXAMPLE TALKED ABOUT IN THE
"WALL STREET JOURNAL" IN
AUSTRIA.
WITH 14 EMPLOYEES, IT MAKES, OR
EXCUSE ME, 140 EMPLOYEES, IT
MAKES AS MUCH STEEL WIRE AS A
FACTORY WITH 1000 EMPLOYEES USED
TO MAKE.
SO ONE OF THE PROBLEMS WE'RE
GOING TO HAVE IS, THOSE JOBS
THAT HAVE GONE AWAY, EVEN IF WE
BRING THEM BACK, IT WILL BE
RESULT OF A, CAPITAL INVESTMENT
AND B TRAINING OUR WORKERS FOR
AUTOMATED SKILLS NEEDED TO RUN
TODAY'S FACTORIES.
SOMEPLACES ARE DOING IT WELL.
LOOK AT NORTHEAST OHIO, FOR
EXAMPLE, TIMKIN, WHICH MAKES
SOPHISTICATED BALL BEARING
ASSEMBLIES.
THEY FOCUSED HOW WE HAVE
WORKFORCE WE CONTINUALLY UPGRADE
AND TRAIN WITH SKILLS TO MAKE US
COMPETITIVE ON THE WORLD TRADE.
HOW DO WE CONTROL OUR COST,
NAMELY, BIGGEST ONE, ENERGY, IN
ORDER TO BE COMPETITIVE.
THEY HAVE ACHIEVED THIS.
NOT EVERYBODY IS THOUGHTFUL AND
SMART AS TIMKINS FACING THE
FUTURE, WE HAVE OBLIGATION TO
PEOPLE IN OUR COMMUNITY, MAKE
SURE THE COMMUNITY COLLEGE,
LOCAL COLLEGES AND OUR OWN
TRAINING PROGRAMS EQUIP THEM FOR
JOBS THAT ARE GOOD.
TRISH: KARL, WHAT DOES IT MEAN
FOR MIDTERMS?
I WAS LOOKING THROUGH, 25 RACES
UP FOR GRABS HERE.
YOU HAVE A LOT OF RACES LIKE
PENNSYLVANIA, MINNESOTA, SOME
AREAS THAT WOULD RESPOND I THINK
POLITICALLY WELL TO THE TARIFFS?
>> WELL, WE'LL SEE BECAUSE THIS
IS THE FIRST ACT.
AND PRESIDENT, WE'LL SEE FIRST
OF ALL WHEN DETAIL COMES OUT
NEXT WEEK.
WILL WE REALLY PUNISH NEIGHBORS
AND ALLIES LIKE CANADA?
IN A TIME OF WAR, QUOTE, FOR
NATIONAL SECURITY REASONS WE
WOULD WANT NEIGHBORS WITH STRONG
STEEL INDUSTRIES TO SUPPORT US.
SECOND OF ALL, WHAT HAPPENED TO,
140,000 PEOPLE WORK IN STEEL.
6.5 MILLION PEOPLE WHO USE METAL
IN THEIR INDUSTRIES.
WHAT WILL HAPPEN THERE?
AND THIRD, WHAT IS GOING TO
HAPPEN WHEN THEY START
SANCTIONING SALE OF U.S.
SOYBEANS OR OTHER U.S.
COMMODITIES OR GOODS IN
RETALIATION?
CAN'T BE GOOD FOR US, BUT THIS
IS JUST THE OPENING STAGE.
WE'LL SEE HOW WELL THE PRESIDENT
PLAYS HIS HAND.
TRISH: LOOK, I JUST KEEP
THINKING ABOUT THE SMALL TOWNS
IN AMERICA WHERE THEY FEEL LIKE
THEY HAVEN'T BEEN SERVED BY
THEIR POLITICIANS.
BASICALLY ALL THOSE JOBS WERE
EXPORTED OVERSEAS.
>> WELL, YOU KNOW WHAT?
A LOT OF THOSE JOBS WENT AWAY.
IF YOU TAKE A LOOK AT OUR
ECONOMY TODAY, PERCENTAGE OF OUR
ECONOMY COMES FROM MANUFACTURING
ESSENTIALLY THE SAME IT HAS BEEN
FOR DECADE, UPON DECADE.
BUT NUMBER OF PEOPLE WORKING IN
MANUFACTURING SOMETHING
CONSIDERABLY LESS, TAKES US
TODAY, IN ORDER TO BE
COMPETITIVE WE HAVE TO BE MORE
PRODUCTIVE.
WE DO MORE WITH LESS PEOPLE
BECAUSE WE USE AUTOMATION AND
SKILLSETS THAT HAVE GONE, THAT
THOSE JOBS, AS THEY USED TO BE
CONSTITUTED HAVE GONE AWAY.
WE HAVE TO FIGURE OUT HOW TO
TRAIN OUR WORKERS BETTER, AND
ASSIST THEM WHERE THE JOBS ARE.