>>> GOOD EVENING. I’M CHRIS MATTHEWS IN
WASHINGTON.
WASHINGTON. PRESIDENT TRUMP IS ROILING
FINANCIAL MARKETS TODAY AROUND
THE WORLD, ESCALATING HIS TRADE
WAR WITH CHINA AND ATTACKING THE
CHAIR OF THE FEDERAL RESERVE.
ALL THIS AS HE HEADS OFF TO
HERALD THE STRENGTHS OF THE U.S.
ECONOMY AT THE G-7 SUMMIT THIS
WEEKEND IN FRANCE.
RESPONDING TO A RETALIATORY MOVE
BY CHINA EARLIER TODAY, THE
PRESIDENT TONIGHT DECLARED HE’S
HIKING TARIFFS ON BEIJING,
RAISING EXISTING RATES AS WELL
AS THOSE SET TO KICK IN NEXT
MONTH.
MONTH. IT COMES AFTER CHINA ANNOUNCED
THIS MORNING THEY’RE IMPOSING A
NEW ROUND OF TARIFFS ON $75
BILLION WORTH OF AMERICAN GOODS.
THE NEWS WAS MET WITH OUTRAGE AT
THE WHITE HOUSE WHERE THE
PRESIDENT TOOK TO TWITTER AND
ATTEMPTED TO ORDER ALL AMERICAN
COMPANIES TO CUT THEIR TIES WITH
CHINA.
CHINA. ALL AMERICAN COMPANIES.
NO MORE TRADE WITH CHINA.
OF COURSE, THAT’S RIDICULOUS.
TRUMP TWEETED WE DON’T NEED
CHINA AND FRANKLY WE WOULD BE
BETTER OFF WITHOUT THEM.
OUR GREAT AMERICAN COMPANIES ARE
HEREBY ORDERS TO IMMEDIATELY
START LOOKING FOR AN ALTERNATIVE
TO CHINA INCLUDING BRINGING YOUR
COMPANIES HOME AND MAKING YOUR
PRODUCTS IN THE USA.
THAT’S THE PRESIDENT THIS
MORNING TRUMPETING POWERS HE
DOESN’T POSZ.
DOESN’T POSZ. HOWEVER, "THE WASHINGTON POST"
POINTS OUT THE WHITE HOUSE DOES
NOT HAVE THE AUTHORITY TO FORCE
COMPANIES TO FOLLOW SUCH
DIRECTIVES AS THAT.
ACCORDING TO THE CENSUS BUREAU,
THE UNITED STATES HAS $380
BILLION TRADE DEFICIT WITH CHINA
IN 2018.
IN 2018. A DEFICIT THAT APPEARS TO BE
INCREASING THIS YEAR.
TRUMP’S TWEETING IGNITED A
SELLOFF ON WALL STREET.
THE DOW THAT HAD BEEN IN
POSITIVE TERRITORY, PLUNGED AND
WENT DOWN 623 POINTS IN ONE DAY.
IT REMAINS NEAR ITS AVERAGE FOR
THE SUMMER.
THE SUMMER. EARLIER TODAY, THE PRESIDENT
APPEARED TO JOKE ABOUT THE
MARKET’S DECLINE, SAYING THE DOW
IS DOWN, PERHAPS ON THE NEWS
THAT REPRESENTATIVE SETH MOULTON
MOULTON, HOWEVER THAT MAY BE,
HAS DROPPED OUT OF THE 2020
PRESIDENTIAL RACE.
PRESIDENTIAL RACE. WHAT A CARD.
ALL THIS COMES AFTER FED CHAIR
JEROME POWELL SAID THIS MORNING
THE TRADE POLICY UNCERTAINTY
SEEMS TO BE PLAYING A ROLE IN
THE GLOBAL SLOWDOWN.
HIS SPEECH, WHICH WAS INTENDED
TO REASSURE MARKETS, INSTEAD
PROMPTED AN ATTACK FROM THE
PRESIDENT.
PRESIDENT. QUOTE, AS USUAL, THE FED DID
NOTHING.
NOTHING. IT IS INCREDIBLE THAT THEY CAN
SPEAK WITHOUT KNOWING OR ASKING
WHAT I AM DOING.
WHICH WILL BE ANNOUNCED SHORTLY.
WE HAVE A VERY STRONG DOLLAR AND
A VERY WEAK FED.
AND THEN IN A STUNNING MOVE, THE
PRESIDENT ADDED, MY ONLY
QUESTION IS, WHO IS OUR BIGGER
ENEMY, JAY POWELL OR CHAIRMAN XI
OF CHINA?
OF CHINA? I’M JOINED BY BEN RHODES, FORMER
DEPUTY NATIONAL SECURITY ADVISER
TO PRESIDENT OBAMA.
JILL CORBEN, AND MICHAEL FROMAN,
A FORMER U.S. TRADE REP IN THE
OBAMA ADMINISTRATION.
OBAMA ADMINISTRATION. THIS IS GOING TO BE VERY
POWERFUL.
POWERFUL. LET’S TALK ABOUT -- I’M A BIG
BELIEVER THAT THE TRADE DEFICIT
WITH CHINA HAS TO BE DEALT WITH
BECAUSE CHINA KEEPS MAKING MONEY
OFF US, WHICH THEY DO BY SELLING
US GREAT GOODS, NO DOUBT ABOUT
IT, WE LOVE THEIR STUFF.
ESPECIALLY THEIR COTTON GOODS
AND ALL THAT STUFF, BUT THEY USE
ALL THAT EXCHANGE THEY BET FROM
US TO BUY THE REST OF THE WORLD,
ESPECIALLY AFRICA.
ESPECIALLY AFRICA. I DON’T LIKE IT, BEN.
YOUR THOUGHTS ABOUT WHAT SHOULD
WE BE DOING IF NOT THIS?
BUT LET’S START WITH TRUMP.
WHAT’S HE DOING?
WHAT’S HE UP TO?
>> THE PROBLEM IS HE DOESN’T
REALLY KNOW WHAT HE’S DOING,
CHRIS.
CHRIS. HE’S GOTTEN INTO THIS, AND THE
ONLY PLAY HE’S HAD IS TO
ESCALATE THIS TRADE WAR WITH THE
CHINESE.
CHINESE. I DON’T THINK ANYBODY KNOWS
WHERE THIS IS LEADING.
AND THE CHINESE HAVE CLEARLY
DECIDED TO DIG IN AND TO MATCH
HIM MOVE FOR MOVE.
AND THE RISK IS THAT HE’S NOT
ONLY RAISING PRICES ON
AMERICANS, HURTING AMERICAN
SECTORS LIKE THE AGRICULTURAL
SECTOR, BUT HE’S DRAGGING DOWN
THE ENTIRE GLOBAL ECONOMY.
THE WAY TO DO THIS, IF YOU
WANTED TO STAND UP TO CHINA’S
UNFAIR TRADE PRACTICES, IF YOU
WANTED TO STAND UP FOR AMERICAN
WORKERS AND BUSINESSES, IS NOT
TO ALIENATE THE UNITED STATES
FROM THE REST OF THE WORLD AND
TAKE ON THE CHINESE ALONE.
IT WOULD BE TO RALLY ALL OF OUR
ALLIES, THE PEOPLE HE’S SEEING
AT THE G MF 7, THE COUNTRIES WE
NEGOTIATED WITH, THAT MIKE
FROMAN NEGOTIATED WITH, SO WE
HAVE A UNITED FRONT WITH OTHER
COUNTRIES TO GO TO THE CHINESE
AND SAY YOU NEED TO CUT OUT YOUR
THEFT OF INTELLECTUAL PROPERTY.
>> HAS -- BEN, HAS ANYONE BEEN
ABLE TO DO THAT, GET THE WORLD
TO TAKE ON CHINA, BECAUSE
THEY’RE THE BIG MONSTER?
HAS ANY PRESIDENT, INCLUDING
OBAMA, BEEN ABLE TO DO THAT?
>> WELL, CHRIS, UNFORTUNATELY,
WE WERE BUILDING UP TO THAT TYPE
OF CAPACITY.
OF CAPACITY. THE TRADE AGREEMENT THAT WE
NEGOTIATED, THE TRANSPACIFIC
PARTNERSHIP, WITH A NUMBER OF
THE LEADING ASIA PACIFIC
ECONOMIES, WAS MEANT TO GIVE
PRESIDENT OF THE UNITED STATES
GREATER LEVERAGE FOR THAT TYPE
OF CONFRONTATION.
OF CONFRONTATION. I THINK WHAT YOU NEED TO DO --
>> YOU’RE SO RIGHT.
BUT HILLARY WOULDN’T GO ALONG
WITH IT.
WITH IT. >> THAT WAS A MISTAKE BY
HILLARY.
HILLARY. AND FRANKLY, I THINK THE
DEMOCRATS HAVE TO LEARN, TOO,
CHRIS, LOOK, IT’S NOT JUST ABOUT
FREE TRADE.
FREE TRADE. IT’S ABOUT TRADE AGREEMENTS THAT
CAN WORK FOR AMERICAN BUSINESSES
AND WORKERS.
AND WORKERS. TRADE AGREEMENTS THAT ARE MORE
PROGRESSIVE.
PROGRESSIVE. IF VOTERS ARE LOOKING FOR
SOMEONE WHOS’S GOING TO TEAR UP
TRADE AGREEMENTS, THEY THAT HAVE
IN DONALD TRUMP.
I THINK DEMOCRATS CAN AFFORD A
DIFFERENT ALLEY.
DIFFERENT ALLEY. >> BEN, YOU’RE THE BEST.
I’M NOT GETTING INTO THE CLINTON
WAR BECAUSE THERE WAS AN
INTERESTING WAR, BECAUSE BILL
CLINTON, I WAS IN TOKYO WHEN HE
SAID HE THOUGHT IT WAS A
FABULOUS AGREEMENT, THE TTP.
AND YOU KNOW POLITICS IN THIS
COUNTRY.
COUNTRY. HILLARY CAME OUT AGAINST IT.
I KNOW HOW POLITICS WORK.
LET’S GO TO YOU.
YOU’RE WITH THE ASSOCIATED
PRESS.
PRESS. TELL ME, DOES TRUMP JUST GET
PETULANT?
PETULANT? OR DOES HE HAVE A STRATEGY TO
REALLY TAKE ON CHINA?
SOMEBODY HAS TO TAKE ON CHINA.
>> THE PRESIDENT HAS BEEN SAYING
NOW FOR DECADES CHINA HAS BEEN
RIPPING THE U.S. OFF.
>> THEY ARE.
>> AS HE STOOD THERE AS WE SAW
ON THE SOUTH LAWN AND SUMMONED
THE SKY AND SAID HE HAD BEEN
APPOINTED, HE WAS THE CHOSEN ONE
TO TAKE ON CHINA.
HE DOES FEEL LIKE CHINA IS
RIPPING US OFF.
>> DOES ANYONE DISAGREE WITH
THAT PREMISE THAT SOMEBODY HAS
TO DO IT?
TO DO IT? >> I THINK THAT’S A PRETTY --
EVEN AS THE TPP AGREEMENT WAS
TRYING TO ADDRESS, ABSOLUTELY.
AND SO HE BELIEVED HE IS THE ONE
TO DO THIS, AND THAT IT MAKES
SENSE FOR HIM TO RISK SOME
POTENTIAL ECONOMIC HARDSHIP IN
ORDER TO GET THAT DONE, IN ORDER
TO SEEM STRONG, BUT THE PROBLEM
IS THE WAY HE’S BEEN DOING THIS
HAS CREATED THE ECONOMIC RIPPLE
EFFECTS ACROSS THE GLOBE THAT
REALLY ARE NOW THREATENING HIS
RE-ELECTION CHANCES.
RE-ELECTION CHANCES. >> EARLIER THIS MORNING, PETER
NAVARRO SAID CHINA’S LATEST
ROUND OF TARIFFS SHOULDN’T
AFFECT FINANCIAL MARKETS.
>> $75 BILLION WORTH OF TARIFFS
IN TERMS OF, WHAT, THE COMBINED
$30 TRILLION ECONOMY IS NOT
SOMETHING FOR THE STOCK MARKET
TO WORRY ABOUT.
AND WE’RE COOL HERE.
>> HOW CAN YOU BEAT THE CHINESE?
IT’S A COMMAND ECONOMY.
A COMMAND SOCIETY.
XI IS THE BOSS.
HE CAN DO THIS STUFF THAT TRUMP
THINKS HE CAN DO.
TELL AMERICAN COMPANIES THEY
CAN’T TRADE WITH CHINA.
HOW DO YOU BEAT THEM?
>> I THINK YOU ORGANIZE ALL YOUR
LIKE-MINDED COMPANIES.
LIKE-MINDED COMPANIES. EUROPE, JAPAN, MAJOR EMERGING
ECONOMIES TO PUT PRESSURE ON
CHINA ON ISSUES THAT ARE OUT
THERE, INCLUDING OVERCAPACITY.
THAT’S WHAT WE WERE DOING AT THE
END OF THE OBAMA ADMINISTRATION.
YOU ORGANIZE THE COUNTRIES IN
THE REGION TO SET HIGHER
STANDARDS AND RULES FOR TRADE
THAT CHINA WILL BE FORCED TO
COMPETE WITH, AND YOU USE ALL
THE TOOLS AT YOUR DISPOSAL TO
HOLD CHINA FOR ACCOUNT.
>> YOU THINK CHINA CAN BE BEATEN
IN THIS WAR?
THE WAY THEY’RE GOING, THEY WILL
BEAT US.
BEAT US. >> I THINK THEY HAVE A STRATEGY
THEY’RE EXECUTING ON WELL.
I THINK IT’S IMPORTANT FOR US TO
ALSO HAVE A STRATEGY, INCLUDING
A DOMESTIC STRATEGY AROUND
INVESTING AND RESEARCH AND
TECHNOLOGY, LIFELONG LEARNING,
ALL THE THINGS WE NEED, WHETHER
IT’S TRADE OR TECHNOLOGY, THAT’S
GOING TO AFFECT THE AMERICAN
WORKER.
WORKER. WE HAVE TO MAKE SURE THE AMERICA
AMERICAN WORKER CAN SUCCEED.
>> ARE WE BETTER THAN THEY IN
INNOVATION?
INNOVATION? CAN WE WIN THAT WAR?
WE CAN’T WIN IN POPULATION.
THEY OUTPOPULATE US.
>> WE HAVE GREAT UNIVERSITIES.
>> MOST OF THE GREAT
UNIVERSITIES ARE HERE.
>> WE’RE A LEADER IN INNOVATION,
BUT THEY’RE ALSO CATCHING UP
QUITE A BIT IN A NUMBER OF
AREAS.
AREAS. ACCORDING TO SOME, AHEAD OF US
IN SOME AREAS.
WE SHOULDN’T BE COMPLACENT ABOUT
IT.
IT. WE HAVEN’T INVESTED IN THE SAME
WAY DOMESTICALLY AS THEY HAVE.
>> WHY DON’T WE BUY ANYTHING
FROM VIETNAM?
FROM VIETNAM? >> WE ARE BUYING A CERTAIN
AMOUNT.
AMOUNT. >> WOULDN’T THAT SCREW THE
CHINESE IF WE SAID WE’RE GOING
TO BUY STUFF FROM VIETNAM NOW?
>> CHINA IS THE SECOND LARGEST
ECONOMY, THE FIRSTEST LARGEST
CONSUMER ECONOMY.
CONSUMER ECONOMY. IT’S IMPORTANT FOR OUR WORKERS
AND FARMERS TO HAVE ACCESS TO
THAT MARKET.
THAT MARKET. GETTING MARKET ACCESS, LEVELING
THE PLAYING FIELD, HAVING FAIR
TRADE WITH THEM IS IMPORTANT.
I THINK THE PRESIDENT HAS
CREATED A CERTAIN AMOUNT OF
LEVERAGE IN HIS INITIAL
THREATENING OF PUTTING TARIFFS
ON.
ON. YOU HAVE TO TRANSLATE TO ACTUAL
AGREEMENTS.
AGREEMENTS. THAT’S THE HARD PART.
IT’S EASY TO IMPOSE TARIFFS.
IT’S HARD TO TAKE THEM OFF.
ONCE TARIFFS ARE IN PLACE FOR A
WHILE, PEOPLE GET USED TO THEM.
>> LET ME GET BACK TO BEN.
I THINK WE OUGHT TO FIGHT WITH
CHINA.
CHINA. TRUMP MAY BE DOING IT THE WRONG
WAY.
WAY. THE CULTURE IS SO LONG TERM.
THEIR INDIFFERENCE CURVE IS SO
LONG.
LONG. THEY’LL TAKE EONS TO GET WHAT
THEY WANT TO GET.
LET ME ASK YOU ABOUT A FIGHT
THAT SEEMS TO BE STUPID.
WHY IS HE ATTACKING HIS FED
CHAIRMAN SO PUBLICLY?
DOES HE THINK HE CAN GET LOWER
RATES AND HELP THE ECONOMY GET
SOME MORE SOUP IN IT IF HE JUST
BASHES THIS GUY EVERY DAY ON
TELEVISION?
TELEVISION? >> NO, CHRIS.
HERE’S WHAT I THINK IS GOING ON.
RIGHT.
RIGHT. WE ARE POTENTIALLY HEADING INTO
AN ECONOMIC DOWNTURN,
POTENTIALLY A RECESSION BECAUSE
OF THE RECKLESS LEADERSHIP OF
DONALD TRUMP.
DONALD TRUMP. THE TOOLS YOU WOULD HAVE IN
PLACE TO TRY TO STIMULATE AN
ECONOMY, WE DON’T HAVE THOSE IN
PLACE BECAUSE DONALD TRUMP GAVE
AWAY A TRILLION DOLLARS IN HIS
TAX BILL, LARGELY IN CORPORATE
TAX CUTS, TAX CUTS TO THE
WEALTHY.
WEALTHY. THE FED ALREADY HAS LOW RATES.
DONALD TRUMP IS LOOKING FOR
OTHER PEOPLE TO BLAME IF THE
RECESSION COMES, THE DOWNTURN
COMES BEFORE HIS ELECTION.
SO HE’S SET UP THE FED.
HE’S SET UP XI JINPING.