Mr. Secretary, thank you for making time for us on a busy morning for you and the team. Appreciate it as always. Let's talk about those deadlines, those dates. Baseline tariffs start on April 5th, higher tariffs start on April 9th. What happens between now and then?
Well, it really — we are talking to all the trade ministers, but nothing really happens between now and then. What CEOs are thinking about is finally, let's think about building in America. You've got almost $5 trillion of commitments coming to America to build their factories. That number is only going to grow as people realize it's time to bring manufacturing home to America, where the greatest economy and the greatest market in the world is. It's time for America to stop taking care of every other economy in the world and building them up. Let's build the American economy up. Let's build American GDP, and you're going to see great growth from America.
Mr. Secretary, as you know, capital around the world watching this program right now want to understand what they can do between now and then to avoid those tariffs. What do they need to do? Have you communicated any metrics to them whatsoever?
Well, we've been talking to the trade ministers of the major trading partners for more than a month, and we've been talking to them. And so you have to understand — and this is what's difficult for your audience to understand — the tariffs are easy to understand, right? We have a 2.5% tariff on autos, and Europe has a 10% tariff, and other people have a 20% or 15% tariff, and that's sort of easy. So they can all come down. But it's the non-tariff trade barriers that are the difference. Some countries have a VAT, and they take that VAT tax of 20% and they use it to subsidize the production of their domestic industries. That's why we can't sell cars there, because they give a rebate — either they give it directly — one country told me yesterday that they give it directly to their car manufacturer to make their cars cheaper. That's why they sell successfully and we don't. Others take the money and use it and give cheap energy costs to this production, and that's why the steel industry — why is everybody else so good at steel and we're not? It's because their governments subsidize it. So we really need to change the way trade works around the world. It's tariffs, but don't get confused that these non-tariff trade barriers — they are the monster that needs to be slayed.
You've been consistent about this argument — subsidized production, manipulated currencies, foreign trade barriers — something the president addressed just last night. Can we just sit on the numbers just for a moment? The EU, 20%, 24% on Japan, 34% on China. Just what exactly was the methodology to go through all those different barriers to entry that you want to knock down? How did you come up with these numbers?
Well, the Council of Economic Advisers — you know, the PhD economists of the administration, coupled with us, the United States Trade Representative — they publish a book called Trade Barriers about this thing, right? And they've been analyzing for decades all of these different tools that these other economies use to hurt America, right? They won't take our corn in India. They won't take our beef almost anywhere. It's unbelievable. They won't take our agricultural products. They just treat us badly because we've allowed them to treat us badly. And when you finally go back at them and say this has got to end, it's going to be tough for them because they've built their whole social network, their whole economies on basically exploiting America. And Donald Trump has said it's time for America to change that. It's going to be difficult for them to change that, but eventually America is going to be treated fairly, and the production of American factories is going to be incredibly strong growth, and you're going to see that growth reverberate through GDP. Remember, people forget the D — gross domestic production. If you buy a foreign-made Toyota, that is not domestic production. Making a car in America — that's domestic production.
Mr. Secretary, if we could just sit on the methodology just for a bit longer and address it directly — this is what we understand, what most people understand. You did that essentially: you divided the country's trade paid surplus with the United States by the total exports, and then divided the number by two and produced this discounted rate. If you're a trade partner right now and you've just watched how America has put together that policy, how are you meant to negotiate with that? What are those countries meant to say? What are they meant to do?
The countries understand that their trade policies were an exploitation of America. Everybody understands. One country actually said to me, 'I was amazed that we were able to get away with it for this long.' I mean, imagine that.
So can you share that country with us? Because they don't say this — they never say this on the record. You've got the potential, the option, the ability right now to share that directly. Say on the record, who's saying that to you?
No, come on. Oh, stop. I mean, the country — one country told us that they give the subsidy to the car companies. Another country admitted that they give their subsidy to their steel companies. I mean, they're not going to repeat it on here. What's on here is that this is going to change. That it's time for these things to change, and they're going to be more fair, and America is going to do well. And in the middle of that time, all the factories are going to come back to America. You're going to see an enormous number of factories come back to America, or you're going to see incredible change globally. It's going to take time, but the factories are going to be built in America. That's the most important thing. Donald Trump wants to see steel and aluminum made in America so we can defend ourselves. He's going to want to see pharmaceuticals made in America. Who on your audience doesn't want us to make the ingredients for pharmaceuticals? Did anybody ever ask themselves why the ingredients for drugs should be made in China? Why? Why is that? That's not cheap labor. That's high-tech factories in China. Why? Because their government helped create it. They created cheap goods there. They oversupply them. They drive the capitalist American who don't think like this out of business, and then they make it in China. And Donald Trump has said, 'I've had enough of this.'
I think they'd totally agree with you. They would totally agree with you because China is an adversary. It is not a partner for the United States. Europe would make a very different argument, and Europe might be wondering this morning why they're being thrown into the same bucket as the Chinese. What explanation can you give them?
Europe does not treat our products fairly. They do not treat our companies fairly. They treat themselves incredibly well to the detriment of the United States of America. Right? It is time for them to treat us fairly, and that is the point. This is not — it's not free and fair trade. Their tariffs are higher. The non-tariff trade barriers are incredible. Like I asked you, why don't they take our beef? Why don't they take our agricultural products? Why? Because they don't want them. Because they want to make the money themselves. Why is it okay for every other country to feel this way and it's not okay for America? I tell you why: because we were the world's piggy bank. And Donald Trump has said our $36 trillion deficit, our $1.2 trillion trade deficit — $1.2 trillion — we buy other people's things more than we sell them ours. Has got to be rebalanced. It's a national emergency. Let's fix America, and we can.
Mr. Secretary, for you it's beef. For the president, I know it's Ford and Berlin's. But there are products that Europe takes, things like LNG, things like Microsoft services. Do you want to see balanced trade product by product?
No, no, no. It's not product by product. It's a big macro issue. Okay? Fairness comes when one decides that they can stop — they can't get away with it any longer. So let's make a great deal with the United States of America. Okay? They've got core issues. They have a VAT tax of 20% or 20 — Europe has 21%. I mean, so when our goods are sold there, we pay 21%. They say everybody pays that, and then they use that money to beat us down in other ways. I mean, come on. We need to have fair trade macro, not product by product. But I think that the way Donald Trump looks at it is country by country. And what's going to happen is you're going to see domestic production grow. You're going to see interest rates come down in America. You're going to see growth in America, great jobs in America. Robotics is going to come to America. It's going to replace cheap labor overseas. Robots can make things, and you know what the job — there's going to be mechanics who fix robots, kind of like a high-end BMW. Robots are going to need to be fixed, and those jobs are going to be high-paying jobs, and they're going to be here. We're tired of them being overseas.
For some countries, there's the 10% base, and that's the only levy that they were hit with yesterday. I'm thinking of the United Kingdom. I'm thinking of Australia. But those countries have a trade surplus with the United States. So why put the tariff on?
Well, I think the president understands that all of these countries, even if they have a trade surplus, if you dig into it — like for instance, the UK, their trade surplus counts that they have this London Metals Exchange, and so gold and silver bullion going in counts. I mean, come on, that doesn't really count. So, and Australia, which is a wonderful partner of ours, they buy a lot of our planes, right? And if you buy our commodity gas, I mean, that's really what you need, not really what we need to sell you. It's not the same. So the president decided, why don't we have a baseline of 10%? Okay, to really understand that everybody needs our economy. Our economy is the magnet of the world. Everybody needs our economy. Let them pay coming in, and let's change that deficit of $1.2 trillion, and let's make America's economy grow, and let's balance that out. Let's fix that first, and then we'll go readdress the rest of the world. But we need to fix our trade deficit, $1.2 trillion. It's unbelievable why we don't have those jobs and the rest of the world does.
Treasury Secretary Scott Bessent told me last night this is a ceiling potentially. We can see a different floor. Are you prepared to negotiate all of these rates? Is this truly the start of a negotiation?
Well, it's a start of a rebalancing of the way the world works. I agree with the secretary that our view is that the only way these rates are going up is if countries decide to retaliate. But why would you retaliate against your biggest client? Your biggest client says, 'I want to reorder things.' I mean, the United States of America is the largest client in the world, and yes, of course the countries are going to talk to us, but they talk too casually. They always talk about their tariff rates. I mean, it's like they say, 'Oh, I'm going to cut my tariff rate.' You think the reason we don't sell a car is because Europe charges a 10% tariff and we were only charging two and a half? That was outrageous. But the key is they have all these rules, rules, and rules, and rules. Like one of my favorites is the Koreans. When we made a deal with them in 2012, we took their cars, right, Kia and Hyundai, and we were going to sell agricultural products to them, right? And when McDonald's went to send in french fries, they wouldn't let them go in because we couldn't prove the origin of the potato. I mean, you don't understand the scale and depth of how they keep our products out. And Donald Trump has said, 'I've had enough. We are going to be treated better. America is going to be treated better,' and that starts today.
Mr. Secretary, why exactly wasn't Russia on that list yesterday?
