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Commerce Secretary Howard Lutnik, Mister secretary, we appreciate your time as we consider the deals that have yet to be made with other trading partners. Is the message this one sends to them that sectoral tariffs are up for negotiation, but that ten percent base rate is not right.
So reciprocal tariffs, if you think about it, is how open is your economy to our exports, how fair is it to our exports? What kind of trade deficit you do? And that sets that line. So ten percent is the bottom line for that. But as the President said, many of those will be higher. Of course, you can bring them down by opening your government, opening your economy to
US exports, and then the sectoral tariffs. That's where you can be super smart if you're opening your market to us, and that's what the UK did.
The UK said I'm going.
To let you export into the UK five billion dollars more of services. That's great for American exports. We'll pay you six billion dollars in tariffs, but help us out on cars and steal in aluminum.
They were never our problem.
They nationalized their steel industry. They don't really have much of a steel industry. They agreed to come on and do it with us. So they're going to put the same kind of tariffs, the same kind of quotas, keep out the bad guys, and let's build our steel and
aluminum industries inside our walled countries together. And that was These are sort of the key parts of being super smart, being super rigorous, and trying to figure out the right answer how to do trade deals that no one's ever done before.
We're talking about the rigor here, But Secretary Lutnik tell us a little bit about what the China angle is with the US UK agreement. We've heard that China should be pressured by some of these countries that the US strikes up agreements with.
Yeah, that's not our strategy at all. I want to be clear, that is not our strategy. Our strategy is to do fair and reciprocal trade, to open these markets to trade, and that's what we're going to do now.
There are some countries that have huge trade deficits with China and huge trade surpluses with US, like take Vietnam, right, they buy eighty five billion dollars worth of goods on a trade deficit with China, and then they run one hundred and ten or one hundred and five one hundred and ten billion dollar trade surplus with US as they assemble those things and ship it to US. So Vietnam's
got issues, to Thailand's got issues. All those countries that are really China's proxies to US are going to have issues because our view is going to be whatever the tariff results on China should be their tariff on their business with them. Now, probably the most interesting country I can tell you that has a huge trade deficit with China and a huge trade surplus with US is the European Union.
And no one thinks.
About that, but a huge amount of the European Union is really a tariff arbitrage from China through the European Union into the American economy. And that is one of those sort of really really interesting sticking points when we sit down and we talk to the European Union.
And what's the goal with the UK when it comes to China. Is there an expectation that then the UK should actually also be pressing China.
No, not so much.
We're not with the UK again. We had a balanced budget was really about our exports.
We are not focused in sort of this, you know, singling out China, you know, any of that stuff.
That's just not the president's goal.
The president's goal is to drive the American economy. Hopefully the meetings this weekend will de escalate things and put things back on the right track with China and the US on trade. But our objective with all these countries is whatever rate we set for China should be for the countries that trade with China and send it into US, that.
Should be about the same for those two. That makes some sense.
And otherwise, let's grow our exports, and let's grow our tariff revenues. Let's grow our exports, and let's take this trade deficit down. Remember, if you have a one point two trillion dollar trade deficit and you cut it to nine hundred billion, you only cut of twenty five percent.
You grow our GDP one percent.
Imagine the guy sitting in the building behind me grows our economy one percent. And then you bring in all these building, right, the trillions and trillions of investment, that's probably gonna bring.
Two points of GDP.
No one ever thinks about the fact that the US doesn't. Our economy grows similar to everybody else. And you know why, because we export four points a year of GDP growth to the rest of the world. When Donald Trump brings that home, you're going to see our economy grow like fire. And that's what he's talking about, and that's what he talked about today, Secretary.
And your last answer, you referred to a few other trading partners, the European Union, Vietnam you also called out. Is that where we should look to see the next deal a merger We likely to see other partners like Japan and India.
First, Well, I think we would like to do one in Asia so we can show that kind of arrangement. We want to do one in Latin America. We're trying to show people a framework of how to do business so that we can roll much more quickly. Right, So, once you do one trade in Latin America, you do one in the Caribbean, you can then say, look, here's a template. Why don't you all think about it and see does that work for you? And if you want
to modify and modify it. But then what will happen is we'll do one, and then we'll do ten, and then we'll do one and then we'll do fifteen, right, and we want to do big But obviously, when you talk about Japan, I mean, come on, you've got to spend an enormous amount of time with Japan Korea.
These are not going to be fast deals. Now.
India has been leaning in really hard, right, you know, I love doing a deal with India.
That's certainly a possibility. But this is a lot of work.
These are a lot of lines where remember this was not sort of a just a gloss over handshake trade deal. This was two thousand, six hundred lines of tariffs changing, modifying and coming down.
And you know when you talk about India, it's probably seven thousand lines. It just takes time and it just takes work.
So give us a chance.
Don't be pushing rushing, But let me tell you, each one of these trade deals is going to feel the same.
You're going to feel huge.
Export opportunity coming from America, huge tariff revenue coming in right, and a dramatic improvement of the United States economy as we reshore the industrial base of America.
Mister Secretary, should we see the deal between the US and UK as basically a roadmap or a blueprint of how future trade deals in the next two months will look exactly right.
So people understand, Okay, there's the baseline.
If you want your tarer or your.
Reciprocal tariff rate low, you've got to attack.
The trade deficit.
You've got to open your market, you've got to let us export, you gotta have those things be together. And then if you want to talk and really be smart and really be thoughtful, then let's talk sectoral tariff. So open your market big, and then if you want to talk to us, we'll try to come up with the smartest answer like we did with the UK. Right, they want to sell Rolls Royce engines to Boeing. Right, so we made a deal and said, you know what, you
can sell your parts to Boeing. Tarafree Airbus makes planes in America. Can sell those parts to Tarafree. And then what happens with it. They buy ten billion dollars with the Boeing planes today as part of the deal. So this is the kind when you have the right partner, you can come up with really really smart, thoughtful and rigorous trade deal like we've.
Done with the UK.
Well, and as you've alluded to, mister Secretary, you believe this will result in higher revenue for the United States. If we're going to get all this revenue from tariffs, why would the president be pushing for higher taxes on anybody? Because our understanding is for the wealthy. He's looking at a new rate of thirty nine six percent, and I thought the Republican Party didn't stand for that kind of thing.
Well, you realize that the tariff revenues doesn't count toward the reconciliation numbers.
Don't ask why.
I can't understand why we're running it like twenty twenty five billion a month and they're not counting it. But we'll leave that aside for another day. This is this is Washington. They have their own accounting practices. So the president's trying to make sure he gets no tax on tips, no tax on overtime overtime, and no tax on Social Security. And if he says, look the richest Americans, remember he cut it from thirty nine point six to thirty seven. So if he just goes back to what he did
last time, you know, I'm in favor of that. I think it's smart as long as it's a redistribution to his priorities of no tax on tips, no tax on overtime and no tax on Social Security.
I think it's smart.
But what you'll see next year is you'll see the revenues from tariffs are so great and our deficit is lower.
Then you've got the gold you know.
The Trump Card coming out, and that's going to raise you know, raise revenues and drive that lower, and you're going to see interest rates lower. You're going to see the deficit lower, and next year is going to be one happy year.
Commerce Secretary Howard Lutnick, thank you so much for joining