Welcome back to Money Movers. The market on edge as investors try to make sense of the escalating tariff threats. Joining me here first on CNBC at the World Economic Forum is Commerce Secretary Howard Lutnick. It's great to see you here.
We have a lot to talk about. So the market is a little unnerved today about these new tariff threats against European allies on Greenland. Is this serious? Is this happening?
I think the Western Hemisphere for the United States is really important to us, and our national security team is all over it. I'm going to leave that to them. But what I would say is our tariff deals, our trade deals with Europe, with the UK, these are durable and stable. There's nothing about them. The Europeans don't want to change their auto tariffs back to the way they were in April. They don't want to change pharmaceuticals. They don't want to change semiconductors. They're going to think better of change. And what it means is they're going to talk and they're going to think about things and they're going to work together. And diplomacy will come back to the top of the stage. So I think that's the way to think about these.
European trade deals intact. This is a deal you worked very hard on.
Yeah, I don't see it changing. I don't see it changing. And if it did change, it wouldn't change in the benefit of Europe. That means they want cars the way they have it. They want pharmaceuticals the way they have it. It's been very successful. I mean, think about it. Their stock market's up strong double digits, right? So why would they mess with that? They really need to understand that they should keep the pressure and temperature low. This is just let's talk to President Trump and let's talk together. Let's work it out together.
So you're not like drafting new tariffs at the moment to start on European allies. And by the way, how would that happen? Would that be under IEEPA also, or national security?
When the president speaks, I promise you we all go to work. I promise you we go to work. But I'm going to leave it at that.
Why? Some people are wondering why we want to pick a fight with our close ally, both geopolitically, but also, you know, from a trading perspective, they buy a lot of American stuff.
No, I don't think this changes the fact that these are allies. You can have a fight with your allies, you can disagree with your allies. It doesn't stop them from being your allies or your big trading partners. It just means you have a disagreement. So what? You have a disagreement. That's the way things work, really. And I think President Trump understands it. And their leadership, as you saw, they're going to talk to the president. They're going to talk with him, think about it and discuss it. And where that goes, I'll leave to them. But the fact is he is saying, you better be talking to me.
You just came off of a panel here at the World Economic Forum where you were talking about globalization, which in many ways, I think for a long time the World Economic Forum has been a bit of a celebration around. But you're making the point that things are different now, right?
I mean, think about what globalization is. Let's find the cheapest labor in the world and do it. And what that means is that the workers in Ohio who make cars, in Michigan who make cars, everybody remember, once upon a time Intel made semiconductors, and now they're all made in Taiwan. Why have we allowed our industrial base in America, and really in Europe and in the UK, to be just completely hollowed out beneath us? It didn't work for the workers. It didn't work for our economy. What it did is it exported our economy to the rest of the world. And so how did the US grow? Kind of about the same as the rest of the world, right? We were in the twos, they were in the high ones. Now what's happened? Think about it. We're at the one-year anniversary of Donald Trump. In the third quarter, we grew 4.3%. And I'm telling you, in the first quarter, what we're in right now, I think we're going to grow over 5%. The $30 trillion US economy is now going to be growing at 5% or more, because we are taking care of ourselves. We finally have an industrial policy that is sensible for America, right? It's going to grow manufacturing in America. It's going to... I was in Syracuse. We announced the opening of a $100 billion, $100 billion mega fab building high-bandwidth memory right in upstate New York. When was the last time upstate New York had any investment, let alone one that's going to bring in 25,000 jobs? The Micron's investment in America of $200 billion. It's going to bring in 90,000 jobs to America, and we have over $750 billion of that coming to America. This is how you reindustrialize America. This is how you do it under Donald Trump.
It takes time to do that. But also, you know, how are we, Secretary Lutnick, we've seen job growth deteriorate in the manufacturing sector. Why do you think that is?
That's a housing thing, okay. You have high interest rates. High interest rates mean our housing starts, right? Our new housing, we're just not building new houses because interest rates are high. That's why Donald Trump talks about the fact that our interest rates are too high. But what you will see over the course of 2026 is like we... I saw a report that there were 30 groundbreakings coming in the next 45 days. And these are massive projects. And what happens is you start with construction and then ultimately it's the factory. But don't deny the fact that when you build hundreds of billions of dollars of factories, that's GDP, that's construction, construction, construction. If we finally cut interest rates, remember, one of my points.
Is we've been cutting interest rates.
75 basis points. That's like milk in your coffee. That's not like the real thing. Okay. The real thing is the United States is the greatest credit on earth, the best credit on earth, and we have the highest interest rates. Why does everybody around us, everyone you speak to, everyone you see here has lower interest...
...rates because they have lower growth and not as high inflation.
But no, no, no, we have very low inflation and everybody knows it. The fact is our rates are much, much too high. Hundreds of basis points too high. What used to happen in America is when we would grow, they'd raise rates to try to put the brakes. And when we were having trouble, then they'd cut rates to add a little gas. But basically it was designed to have the United States be mediocre. And Donald Trump thinks make America great again. Why can't we have growth if we have low inflation, have low interest rates, and if we cut interest rates 100 basis points, you're going to see the United States grow 6% or more. And that is something that no economist has ever thought was even possible. And you're going to see it in the United States of America in the back end of 2026, when rates finally start to get...
