>> WELL YOU KNOW THE LIST, IT'S
DEALING IN TECHNOLOGY OR
TRANSFERRING TECHNOLOGY, STEAL
ING OUR INTELLECTUAL
PROPERTY RIGHTS THEY HAVE HIGH
TARIFFS THEY'VE GOT MAIN
BARRIERS, OF NOT NEAR ENOUGH
MARKET ACCESS FOR FOREIGN
COUNTRIES LIKE THE USA SO ALL
THAT STUFF HAS GOT TO BE
DISCUSSED, NEGOTIATED AND
EVENTUALLY CHANGED.
LOOK, END OF THE DAY, CHINA'S
UNFAIR AND ILLEGAL TRADING
ACTIONS ARE DAMAGING TO ECONOMIC
GROWTH FOR THE U.S. , FOR CHINA,
AND THE REST OF THE WORLD.
MARIA: YEAH.
THEY ARE REPRESENTING PREVENTING
A MUCH STRONGER GLOBAL ECONOMY
AND DOING DAMAGE TO AMERICAN
EXPORTS AND THE PRESIDENT IS THE
FIRST GUY WITH THE BACKBONE IN
DECADES, MARIA, TO ACTUALLY GO
AFTER IT.
NOT JUST WISPER IT BUT TO GO
AFTER IT WITH AT LEAST
PRELIMINARY ACTIONS.
MARIA: THAT WAS PART OF MY
INTERVIEW WITH NATIONAL ECONOMIC
COUNCIL DIRECTOR LARRY KUDLOW ON
THURSDAY ON MORNINGS WITH MARIA
ON THE FOX BUSINESS NETWORK JUST
A SHORT TIME AGO THE PRESIDENT
TWEETED ABOUT THIS AND HE SAID
PRESIDENT XI AND I WILL ALWAYS
BE FRIENDS NO MATTER WHAT
HAPPENS WITH OUR DISPUTE ON
TRADE.
CHINA WILL TAKE DOWN ITS TRADE
BARRIERS BECAUSE IT IS THE RIGHT
THING TO DO.
TAXES WILL BECOME RECIPROCAL AND
A DEAL WILL BE MADE ON
INTELLECTUAL PROPERTY.
GREAT FUTURE FOR BOTH COUNTRIES,
BUT FEARS OF A LOOMING TRADE WAR
WITH CHINA SENT THE MARKETS
PLUNGING ON FRIDAY BY THE CLOSE
THE DOW WAS DOWN 572 POINTS, THE
S&P 500 WAS DOWN 58 POINTS AND
THE NASDAC PLUNGED 161 POINTS IN
STEP WITH THE MASSIVE VOLATILITY
AND FOR NOW IT'S STILL JUST A
LOT OF TOUGH TALK ON BOTH SIDES
OF THE PACIFIC SO THE MARKETS
HAVE IT WRONG.
IS THERE HOPE WASHINGTON AND
BEIJING CAN NEGOTIATE?
GORDON CHANG IS THE AUTHOR OF
THE COMING COLLAPSE OF CHINA.
ONE OF THE EXPERTS ON CHINA AND
IT'S GOOD TO SEE YOU THIS
MORNING.
>> THANKS MARIA.
MARIA: IS THIS THE RIGHT ATTACK
THE PRESIDENT IS TAKING?
>> IT'S ABSOLUTELY TRUE.
YOU'VE GOT TO REMEMBER THAT WHAT
CHINA IS DOING ESPECIALLY FOR
THE LAST SIX OR SEVEN YEARS
ESPECIALLY UNDER THE CURRENT
RULER HAS BECOME ESPECIALLY
CLOSING OFF THEIR MARKETS
ATTACKING FOREIGN COMPANIES AND
ALSO ATTACKING DOMESTIC PRIVATE
COMPANIES SO YOU KNOW THIS IS
REALLY THE EMPHASIS ON STATE
ENTERPRIZES AND THIS IS
COMPLETELY UNSUSTAINABLE AS THE
PRESIDENT SAID ON FRIDAY IF HE
COULD IGNORE IT BUT HE WOULDN'T
BE DOING HIS JOB SO HE'S DOING
ABSOLUTELY THE RIGHT THING.
MARIA: BUT THE MARKETS ARE
GETTING NERVOUS ABOUT THIS AND
THINK THIS IS GOING TO RESULT IN
A TRADE WAR INITIALLY PETER
NAVARRO AT THE WHITE HOUSE TOLD
ME WE'RE NOT GOING TO SEE
BEIJING COME OUT AND SAY THAT WE
WANT THAT BUT WE HAVE SEEN THAT
THAT'S WHAT WE ARE SEEING SO IS
THIS THE BEGINNING OF A TRADE
WAR?
>> WELL I THINK THE TRADE WAR
HAS GONE ON FOR DECADES BUT
CERTAINLY IT'S A BEGINNING OF A
TIT FOR TAT PHASE OF THAT TRADE
WAR AND WE'RE GOING TO SEE MORE
OF IT.
IF THIS WERE JUST A MATTER OF
ECONOMICS THERE WOULD BE NO
TRADE FRICTION.
THE CHINESE WOULD BE OVERWHELMED
BY THE UNITED STATES BUT THIS IS
NOT JUST A MATTER OF ECONOMICS
IT'S A MATTER OF CHINESE POLITIC
S, THE CHINESE RULER HAS
ACCUMULATED ABSOLUTE POWER OR
CLOSE TO ABSOLUTE POWER AND THAT
MEANS HE BECOMES RESPONSIBLE FOR
EVERYTHING.
IF YOU HAVE A PROBLEM IN A TRADE
WITH THE UNITED STATES, HE KNOWS
THAT HE'S GOT TO INTIMIDATE US
SO HE'S GOING TO USE ALL THESE
POWER AND AUTHORITY TO GO AFTER
US SO THIS COULD GET UGLY.
MARIA: LOOK THE PRESIDENT SAID I
NEVER SAID THERE WAS NOT GOING
TO BE PAIN.
THERE MAY BE SHORT TERM PAIN BUT
LONG TERM, WE'RE GOING TO BE IN
A BETTER POSITION AS A COUNTRY,
SO RIGHT NOW, I KNOW THAT CHINA
HAS LIKE 10 INDUSTRIES OUT THERE
THAT THEY ARE OFF LIMITS TO
FOREIGNERS.
YOU CAN'T EVEN GET 49% AND IF
YOU DO END UP GETTING A POSITION
IN A FOOTHOLD IN CHINA YOU CAN
ONLY OWN 49% OF A JOINT VENTURE.
IS THAT THE KIND OF RESTRICTIONS
YOU WANT TO SEE IN THE U.S.
BECAUSE I KNOW YOU'RE A
FREE MARKETS GUY SO HOW MUCH OF
THE GOVERNMENT BITE DO YOU WANT
TO SEE HERE?
>> WELL I THINK WE HAVE TO HAVE
SOME RECIPROCAL RELATIONS WHICH
MEANS IF THEY PUT A TARIFF OF 25
% ON OUR CARS, OUR TARIFFS
HAVE TO GO UP TO 25%.
MARIA: RIGHT NOW IT'S 25% VERSUS
2.5%.
IT'S NUTS LICK THAT RIGHT?
>> IT MAKES NO SENSE THE DEAL
THAT WAS NEGOTIATED IN PRIOR
ADMINISTRATIONS BUT THE OTHER
THING IS IT'S TECHNOLOGY.
THE CHINESE HAVE BEEN CLOSING
OFF THEIR TECH SECTOR.
WE'VE GOT TO DO THE SAME THING.
IT'S REALLY UNFORTUNATE.
NO ONE WANTS TO DO IT BUT WE'RE
SEEING A NEW ATTITUDE NOT ONLY
ON THE PART OF THE REPUBLICANS,
NOT ONLY THE PART OF THE
PRESIDENT BUT DEMOCRATS AS WELL
THAT WE NEED TO PROTECT OUR TECH
START UPS AND OUR TECH COMPANIES
BECAUSE THIS IS WHERE THE
COMPETITION FOR CHINA AND THE
UNITED STATES IS GOING TO BE
PLAYED OUT.
YEAH, TRADE IS IMPORTANT, BUT
IT'S GOING TO BE WHO OWNS 5 G,
QUANTUM COMPUTING, QUANTUM
COMMUNICATIONS AND ARTIFICIAL
INTELLIGENCE.
MARIA: THIS IS A REALLY GOOD
POINT BECAUSE I'VE GOT A REPORT
HERE THAT SAYS THAT CHINA HAS
NOW BEEN PARTICIPATING IN UP TO
10% OF VENTURE CAPITAL DEALS IN
THE UNITED STATES.
THEY'RE BASICALLY JUST PUTTING
THEIR MONEY THERE SO THAT THEY
COULD INVEST IN THESE COMPANIES
BUT ULTIMATELY GET THE SECRETS
AND THE TECHNOLOGY OF SOME OF
THE MOST IMPORTANT INDUSTRIES OF
TOMORROW, LIKE AI, LIKE ROBOTICS
, LIKE SHIPPING, ALL OF
THESE THINS THAT ARE SUPPOSED TO
DRIVE GROWTH HERE.
>> ABSOLUTELY AND YOU KNOW, THE
CHINESE HAVE BEEN DOING THIS
WHILE THEY CLOSE OFF THEIR
MARKET TO OURS AND SO THIS IS
JUST COMPLETELY UNRECIPROCAL.
THE PRESIDENT TALKS ABOUT
RECIPROCAL TRADE RELATIONS,
WE'RE GOING TO HAVE TO DO
SOMETHING.
WORK A LITTLE HARDER SACRIFICE A
LITTLE MORE BECAUSE THE
PRESIDENT IS FIGHTING FOR THE
FUTURE OF OUR COUNTRY.
MARIA: SO IS IT JUST CHINA
THAT'S REALLY THE BAD ACTOR HERE
, BECAUSE INITIALLY, THE
PRESIDENT CAME OUT WITH THOSE
STEEL AND ALUMINUM TARIFFS WHICH
CAUSED A LOT OF DEBATE ABOUT
WHETHER OR NOT WE SHOULD BE
PUNISHING ALL OF THE JOBS OF THE
COMPANIES THAT INPUT ALUMINUM
AND STEEL TO SAVE THE TWO
ALUMINUM AND STEEL INDUSTRIES.
>> YEAH, THE SECTION 232 TARIFF
S WHICH YOU'RE TALKING
ABOUT ARE ESSENTIALLY I THINK A
NATIONAL SECURITY ISSUE MEANT
REALLY TO PROTECT THE U.S.
INDUSTRIAL BASE BECAUSE
WE'RE NOT TAKING A LOT OF THE
STEEL AND ALUMINUM THE DEFENSE
DEPARTMENT USES AND I KNOW THIS
IS A LONG TERM CONCERN AND I
KNOW IT'S NOT DEFENSIBLE FROM A
TRADE POINT OF VIEW, BUT FROM A
NATIONAL SECURITY ONE I THINK WE
HAVE TO LOOK AT IT IN A
DIFFERENT WAY.
MARIA: WE WILL LEAVE IT THERE
GORDON WE'LL BE WATCHING THE