>> REPORTER: .
>> REPORTER: YES, EXACTLY.
MARIA: JOINING US NOW, JOHN
HILSENRATH.
GOOD MORNING TO YOU.
WHAT STRUCK AS FAR AS THE
DEBATES LAST NIGHT OR HEADLINES
COMING OUT OF OSAKA, WHAT'S
STRIKING YOU THIS MORNING?
>> I'M FOCUSED ON THE TALKS
BETWEEN PRESIDENT TRUMP AND
PRESIDENT XI OF CHINA.
THERE'S A LOT AT STAKE.
I THINK IT'S CLEAR AT THIS POINT
THAT THE IDEA OF A BIG
BREAKTHROUGH, A DEAL HAPPENING
RIGHT NOW IS PRETTY LOW.
IT'S STRIKING TO ME THAT GOING
INTO THE MEETING, THE CHINESE
ARE BASICALLY RAISING THEIR
DEMANDS BY PUTTING HUAWEI ON THE
TABLE AND SAYING THAT WE HAVE TO
REMOVE OUR EXPORT BANS ON HUAWEI
FOR THEM TO DO A DEAL.
SO THEY'RE BASICALLY INCREASING
THEIR DEMANDS GOING INTO THIS
CONVERSATION.
I THINK THE BEST THAT WE CAN
EXPECT FOR THE TWO SIDES IS TO
AGREE TO START TALKING AGAIN.
THEY STOPPED TALKING IN APRIL
WHEN THE U.S. FELT THAT THE
CHINESE BALKED AT WHAT THEY
AGREED ON.
MAYBE THEY START TALKING AGAIN.
MAYBE THEY SET A DEADLINE TO
REACH A DEAL LATER IN THE YEAR.
MARIA: THE PRESIDENT, WHEN HE
JOINED ME EARLIER THIS WEEK, WAS
NOT BACKING DOWN AT ALL.
WHEN I SAID LOOK, DO YOU HAVE A
PLAN B IF PLAN A DOESN'T WORK
OUT IN TERMS OF A DEAL WITH
CHINA.
HE SAID YEAH, PLAN B IS PLAN A
AND THAT IS TARIFFS.
AND HE SAID BY THE WAY, IT
DOESN'T HAVE TO BE 25%.
HE THREW IN LET'S DO 10%.
SO HE'S ALREADY THINKING ABOUT
HOW HE'S GOING TO APPROACH THIS
32
$325 BILLION IN REMAINING GOODS
COMING IN FROM CHINA AND SAYING
LOOK, I NO PROBLEM WITH 10%.
>> I THINK IT'S CLEAR AT THIS
POINT THAT THIS PRESIDENT LIKES
TARIFFS.
HE THINKS IT HITS BACK AT
AMERICA'S TRADE COMPETITORS.
AND HE SEES IT AS A SOURCE OF
REVENUE FOR THE U.S. GOVERNMENT.
HE SAYS ALL THE TIME, THIS IS
BRINGING IN TENS OF BILLIONS,
HUNDREDS OF BILLIONS OF DOLLARS
INTO THE U.S. TREASURY.
I THINK THAT HIS POINT OF VIEW
IS THAT HIS FALLBACK PLAN IS
SOMETHING THAT HE LIKES, WHICH
IS INCREASING TARIFFS.
MARIA: I KNOW YOU DON'T LOVE
THIS, DAGEN, BUT YOU KNOW,
BOTTOM LINE IS THE PRESIDENT OF
CHINA COMES IN LAST NIGHT WITH
ALL OF THESE DEMANDS, LIFT THE
BAN ON HUAWEI, TAKE AWAY
PUNITIVE TARIFFS.
I DIDN'T THINK THAT WAS GOING TO
GO WELL WITH PRESIDENT TRUMP.
DAGEN: THEY'RE USING HIS
NEGOTIATING TACTICS.
YOU TAKE THE HARDEST POSITION
POSSIBLE.
I SAID THIS YESTERDAY, IT SEEMS
LIKE CHINA IS SAYING TO THE
U.S., THIS IS SQUARE ONE.
WE'RE STARTING ALL OVER AGAIN.
JOHN, TO YOUR POINT, THE
PRESIDENT LOVES TO BRAG ABOUT
THE MONEY COMING INTO THE U.S.
TREASURY.
LET'S SAY WHAT THIS IS.
IT'S A CONSUMPTION TAX OR
VALUE-ADDED TAX THAT FALLS ON
AMERICAN COMPANIES OR IMPORTERS
HERE AND ON CONSUMERS.
AFTER WATCHING THE DEBATE LAST
NIGHT, THAT'S SOMETHING YOU
WOULD EXPECT OUT OF THE MOUTHS
OF A DEMOCRAT.
>> IT'S INTERESTING, WATCHING
THESE DEBATES AND LISTENING TO
THIS TALK ABOUT -- THE PRESIDENT
TALKING ABOUT TRADE.
THERE ISN'T A TOTALLY FREE
MARKET CANDIDATE IN THIS 2020
ELECTION.
AT LEAST WHEN YOU'RE LOOKING AT
TRADE, THIS PRESIDENT IS NOT A
FREE MARKET GUY.
HE BODIES A AGREE WITH -- HE
WOULDDISAGREE WITH YOU ON THE
QUESTION OF WHO WOULD GET TAXED
WHEN TARIFFS ARE IMPOSED.
HE WOULD SAY TARIFFS ARE HITTING
THE CHINESE, THERE'S A LOT OF
DISAGREEMENT ABOUT THAT AMONG
ECONOMISTS.
I THINK WHAT HAPPENS REALLY IS
WHEN WE PUT TARIFFS ON, IT FEEDS
LIEU THROUGH A ACROSS THE SUPPLY
CHAIN.
SOME OF IT MIGHT HIT CHINESE
PRODUCERS.
SOME OF IT DOES FEED INTO U.S.
CONSUMERS.
MARIA: I'VE GOT TO PUSH BACK ON
THAT, TO SAY THAT THE PRESIDENT
IS NOT A FREE MARKET GUY, YES,
TARIFFS OR NO TARIFFS, HE HAS
BEEN SHOWING REAL FREE MARKET
POLICIES AND HE WANTS TO SEE
COMPETITION AS WELL AS LOWER
TAXES MOVE THROUGH THIS ECONOMY.
SO, YES, YOU'RE RIGHT, HE LIKES
TARIFFS BUT TO SAY HE'S NOT A
FREE MARKET, I'VE GOT TO PUSH
BACK ON THAT.
>> ON TRADE, I DON'T THINK -- ON
TRADE, I DON'T SEE HOW YOU COULD
ARGUE THAT, BECAUSE WE HAVE
TAKEN A VERY AGGRESSIVE STANCE
ON PUTTING UP BARRIERS FOR
TRADE.
DAGEN: THE PRESIDENT -- HE'S
ANXIOUS TO GO AFTER EUROPE NEXT.
HE SAYS EUROPE IS WORSE THAN
CHINA.
>> I THINK WE'RE MISSING THE
POINT.
WHY DOES HE USE TARIFFS?
IT'S THE ONLY TOOL HE HAS TO
STOP THE UNFAIR TRADING
PRACTICES.
DAGEN: THAT'S NOT NECESSARILY
TRUE.
WE COULD ARGUE FOR DAYS AND
WEEKS AND MONTHS AND YEARS ABOUT
THAT, GOVERNOR.
>> I THINK HE'S A FREE TRADER.
I THINK HE BELIEVES THAT AMERICA
HAS BEEN GETTING THE SHORTENED
OF THE STICK AND HE'S GOING TO
USE THE STICK AGAINST THE PEOPLE
WHO CHEATED AND ROBBED US AND
MADE IT HARD FOR US AND THEY'VE
DONE NOTHING IN TERMS OF
ENVIRONMENTAL CONCERNS BUT WE'RE
HAVING TO PAY THE PRICE.
MARIA: WITH CHINA, HE COULD
HAVE DONE SOMETHING TO ZTE AND
MAYBE HUAWEI SOONER.
DAGEN: YOU RAISED THIS ISSUE
WITH HIM, YOU COULD HAVE STAYED
IN THE TPP, COULD HAVE LOCKED
ARMS WITH ALL OF YOUR OTHER
ALLIES.
MARIA: IT WOULD HAVE BEEN A
DISASTER, HE SAID.
DAGEN: EVEN SOME REPUBLICANS
SAY IT WOULDN'T HAVE BEEN A
DISASTER AND WOULD HAVE HELPED
US TAKE ON CHINA WITH THE REST
OF ASIA.
IT WAS DESIGNED TO TAKE THE
POWER AWAY FROM CHINA.
JOHN, THE PRESIDENT, IF HE WANTS
TO GET REELECTED NEXT YEAR, HE'S
COUNTING ON A STRONG ECONOMY AND
RIGHT NOW BASED ON A LOT OF
MEASURES IT IS STILL INCREDIBLY
L HEALTHY.
BUT HE SEEMS TO BE COUNTING ON
THE FEDERAL RESERVE TO, LIKE,
STEP INTO THE FRAY AND HELP THE
ECONOMY OUT WITH MONETARY
STIMULUS AS HE FIGHTS THESE
TRADE BATTLES.