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So here's the nightstest. This morning, the President of the United States, Donald Trump canceling European tariffs that were sent to begin February first. After reaching a framework deal over Greenland. The US COMMAS Secretary Howard Latnik joined us. Now making some waves of the World Economic Forum over the last couple of days. Mister secretary is going to see you.
Great to see you.
Let's cut through the drama. Let's get to the big point in the elephant in the room. What happened at dinner time the other night. I've heard all kinds of stories booming, Legarde storming at the room. What happens?
Oh, this is so silly.
So at the end of the evening they called on me. I just published an op ed in the Financial Times, and so they called on me. I gave two three minutes of my ft, which basically said that globalization right and the outsourcing of your industry to the lowest cost in the world right, had really left, had really harmed American and had harmed Europe, and it had failed, and it failed us, and that we need to reshure, need to take care of our own citizens.
So that's basically the model.
And when I was done with that two or three minutes, one person of the two hundred odd people in the room booed, and I felt honored because it was Al Gore on alcore Bood, and I was like, really, so.
I wasn't throwing bread rolls a year from the bank. That wasn't happening nout it.
I put it in the ft. I mean, I wasn't like trying to be quiet about it. I mean I think that globalization, right, and the idea of global supply chains and finding the lowest cost, I mean, that is just not the way to take care of your auto workers, right, who are in Ohio and Michigan. And so we're bringing that back. So think about this. When we were done with we started auto tariffs. We started working on it in March and we finished in November, and we were
done the last day. When we finished, General motives in Ford stocks each went up ten percent. General Motives end of the year of sixty percent. If I told you on January first that General Motives was going to be on sixty percent, you would all say, oh, stop it, and how about this. On that same day, Sean Fame, who runs the United Auto Workers called me and said, I can't believe I'm calling a Republican Secretary of Commerce
to say thank God for you and your administration. The first administration is actually taking care of the auto.
Workers of America. So think about that.
You can, if you really think it through, you can take care of the company and the worker. You don't have to pick sides because we want union labor growth in America.
These are great jobs. Why wouldn't we want them in America.
So that's why Donald Trump wins the union vote, because he's actually pro these workers. He literally is pro these workers. It's not a political thing. It's these are great jobs for Americans. Let's go get more of them.
There's a lot of money set to come into the United States and big bets, a ton of FDM. We could get into that in just a moment. I just want to stay on G seven, allies, this week's been quite a week. Emmanuel Macron, the French president, has said basically accused of the US of trying to subordinate the Europeans. The Prime Minister of Canada, I'm sure you heard his speech, Mark Conney the other day, said this is not a
transition it's a rupture. How would you describe relations with those countries at the moment.
I think our relations are perfectly fine. Right.
I described the relationship with respect to the whole when Greenland was going back and forth before we sort of settled it with a framework agreement.
Right, I called it a kerf fluffle. Right.
It's basically like if you have an argument with your spouse that's not real.
You know, it's not a real one. It's like a small thing.
My spouse doesn't go out there and deliver a speech after that argument. It's the end of the relationship.
Fair enough, But you're right, and I think they overreacted. And it's proof that they overreacted because a day or two later, there's a framework that makes sense.
Right.
What did we say? We said we cared about it for national security. Right, we said we care about a national security. I mean, it's obvious we care about it for national security. Because if you're going to build a golden dome over the United States of America, right, wouldn't
you prefer the golden dome cover Greenland? So when you're knocking out the missiles, you're not knocking them out right over your head like we've all seen Israel like knocking out the missiles right over their head with their iron dome. Wouldn't you prefer to knock out the missiles if you live on the East coast of the United States of America over Greenland, a couple of thousand miles away where
there's no people, right, does not sound better. So this is sort of where we're thinking about it and how our national security team is thinking about it. Let's actually the framework, Well, the framework is a national security based framework that that's what the United States cares about. We care about our national security, and we care about the shipping lanes. So let's talk about the national security and shipping lanes and let's see if we can't figure out
a framework to do that together. And I think that's what the President truthed about. He said, we're going to try to figure that out together because those were the key points that the States of America cared about. And I think the President's been clear about and he just wants people at the table dealing with it swiftly. I mean to think about this, he sends out a truth and like within four days, right, we have a framework agreement Like that's by the way, it's a pretty effecise.
We had TIFFs, we had tariffs on tariff's off.
They were never as to do, they were never on the threat of them, were coming on for February first. What does this do now for the agreement you were and your team struck with Brussels because the legal implementation has now been put on hold.
Oh, I think it'll be put on unhold probably tomorrow. I mean, come on, That's why I said it's an overreaction. I mean, they know when the President says, this is what's going to happen. I mean what provoked the president. What provoked the President was that they sent military people to Greenland. I mean, they didn't send military people to Ukraine. Like, why aren't they sending military people to Greenland?
You know, it was so it seemed like a provocation.
We spoke to the Finish leader and he suggested that was a miscommunication, and he cleared that up pretty quickly. There's something I want to get into with you that I think is quite important. This, of course, is the art of the deal. We talk about it on the program all the time. The President anchors the story to the extreme and then gets a favorable deal for the United States. I think that's whe I understood. Something happened though in the last twelve months that I think is
really interesting. He tried the same thing with Canada and totally upended the election in Canada. North of the border. POLYEF was going to sail away with that. The reason Mark Carney's here as Prime Minister is because the President took such an assertive stance on Canada. Now at the time, I was finding the humor in the conversation. Then the Canadian started lighting up the Bloomberg terminal sending messages. They were deeply offended and we've seen that damage the economic
relationship with Canada and the United States. And the risk came mists the Secretary, and I'd love your thoughts on it and your reaction, because I think this is really important regard to the Europeans. The points you're making about Europe and have made over the last week are valid points and they're actually well received by a lot of Europeans, but the style in which is being delivered at the
moment some of them are finally get offensive. D you think it's a risk here that we damage the economic relationship with the Europeans in the same way we do with the Canadians, and for that matter, derail the conservative movement in Europe as well.
Underway, I don't.
I think the fact is that you need to rethink. I think Europe is amazing and it's got extraordinary opportunity and a twenty trillion dollar economy. But think about this, if they had the right digital rules, meaning similar digital rules to the United States. We have six trillion dollars with the committed investment to build data centers in America, and we have a.
Thirty trillion dollar economy.
So if they had a twenty trillion dollar economy, you'd say, okay, if they had the same rules, they could.
Get four trillion, or how about two trillion.
You realized two trillion for their economy, right, would be ten points a GDP S right over three or four years. I mean, that would produce amazing growth. And let me sort of explain how that works. So we did a deal with Micron. Right, they're going to build two hundred billion dollars in America. So on Friday last Friday, we did a ground breaking of their megafab, one hundred billion dollar fag fab. And where did they do it? They
did it in Upstate New York conserractives. Now, there hasn't been industrial building in Upstate New York in probably forty years. But if you think about it, it had a huge industrial base once upon a time.
So what does it have. It has power because it has the power infrastructure for that.
So what that does is it creates like this enormous uplift. And I think Europe can do the same thing. I think the UK can do the same thing. And Canada is just thinking in this arrogant kind of thought.
Well, but just to build on what John is talking about, it's a style question. Can you get the same results without using words like calling leaders week or their economy is decaying?
Right?
Is it necessary to provoke the visceral feeling that we feel among a lot of leaders here and in conversations with international investors? I mean, is there any other way? Is that style more harmful than it is helpful?
Well?
I think it creates listening, Like people pay attention to it and listen to it. If you just sort of blend in, no one hears anything in Davos, right, everybody says the same blah blah blah blah blah. And if you need to break out and you need to say it. So my view is right that Canada has never expressed to the world that they have the best deal, the
second best deal in the world. The best deal in the world is Mexico because remember they have USMCA, which means eighty five percent of the Canadian economy comes into the United States for zero. And there he is complaining that he's going to go to China and improve it.
What's he going to do? China's delighted to sell to him.
But do you think China's going to open their economy to accept exports from Canada. This is the silliest thing I've ever seen. They have the second best deal because Mexico's got a little better deal. They have twenty five percent on the extra fifteen percent, whereas Canada's got thirty five percent on the extra fifteen percent. But give me a break. They have the second best deal in the world. And all I got to do is listen to this guy wind and complain.
Mister Secretary. In fairness, you've seen from the airplanes. You've seen in about a thirty percent decline in Canadian visitors to the United States, if not significantly more. You've seen a similar type of decline from China. European travelers inbound have come down. There is a sense that people do not want to come to the culture of the US,
and there is this anchor about it. I just wonder if you think that that's just temporary, or you just sort of dismiss that, or you think it's irrelevant to the actual issues.
I think what that is is political marketing. Right, the Canadians have the second best deal in the whole wide world. If they continue this path, right, which is a political path of a certain thing. I'm going to go fly to China. I'm going to open up my markets to China. I'm going to take Chinese electric cars and do all
sorts of this stuff. Then when USMCA gets renegotiated this year, this year, sort of like towards the end of the summer, in the middle of the summer, do you think the President of the United States is going to say you should keep having the second best deal in the world. I mean, you guys are such great friends. I mean they are playing with a except of rules that they haven't really thought.
I can hear it in your voice. You're excited about negotiating this aren't you lay this year?
Well, they've sort of given a sort of a roadmap of saying, so I guess we should change the whole deal.
Right, you want to be like the rest of the world.
You don't want to be this favored neighbor because you've taken it so for granted that you're willing to come to Davos and say, there's two higemic powers in the world, and we're going to decide which one we're going to work with. Really, you're going to either work with the United States of America, where seventy five percent of your economy is totally tied to it, or China.
Why would you say that? It just I think it's political, you know.
I think if we take it correctly, we should look at it as just political noise coming out of a prime minister and maybe this is working for his election, right, because I don't think it can be real, Because if you took out the math of Canada's economy and doing business with the United States of America's thirty trillion dollars economy, there's no such thing as changing what they have today.
No one would vote for changing.
What they head today now, not think they're marketing as well, but they're just for their politics, but they're surely not marketing it well for their fundamental economics for long term.
The United States, the US are doing deals with China, and i'd love you to walk us through what's going on with the Age twenties. Is it accurate now that basically for China to get the Age twenty chips, Taiwan needs to send them to America for US to put a tariff on them to make money off it, and then send to China.
And is it your understanding that China might.
Be suspectable now to these chips suspect because they're entering through the United States.
So it's the Age two hundred, right, So that's the chip we're talking about. And Jensu Wang came to the Oval office and he argued that this is a better chip than they can actually make in any scale. Right, So if we sell them to China, right, and Chinese businesses, then they'll start using them and they'll develop on the American tech stack and that will take some money away from the Chinese tech stack. And that's it's an interesting argument.
There are two sides. There are strong two sides. We shouldn't sell them any or we should sell them the which and I stayed right in the middle. It was a really really good discussion, okay. And the President decided that fine, we'll sell the h two hundreds to them, okay.
And he made that decision, and after.
He was done, he said, and you know what, I think if we do that, we should get twenty five percent for the American taxpayers, right, because we're creating something.
I think China wants to buy them, knowing that they're going from Taiwan now back to the US.
Coming to the United States.
Because in order to collect twenty five percent, right, the process matter to do it, right is he imported, put a tariff on it, and then export it again. Okay. And so that's the model. It's the process model to execute a plan that the President United States of America made, right. So that's just the execution model of how to do it. It's not it's just process, right. And it's the same age two hundred chip. And the question will find out is that businesses in China want to buy that's for sure.
The question is does China central government right want you know when they have that same argument too, I want to give my companies this chip that they're all clamoring for, or do I want to force them to take the pain of using lesser chips that are domestically made, but helping our domestic companies grow.
And that's a question. We're going to see how it goes.
But I think the President put that question out there, and I think it's a really interesting one. I didn't say there's not two sides of that coin, right, but the President thought having Chinese developers on the US tech stack, right, given sort of the middle, he falls that way. And it was really robust discussion. Both sides of the discussion were in the room. It was a deep and thoughtful discussion, and that's where he came out and that's why.
He's the president.
So you know, I'm just a final thought just listening to this engaging conversation of the last fifteen minutes or so. Do you fancy the FED seat over the Federal Reserve? I can see comma section, you can see him in the the ecles. Can you imagine the magic of that news conference? These news conferences?
With the news conference, I'd be going.
I know what I call that. I call that an Amy winehouse. No, No, no.
I call that box office. It's going to see you, the Secretary, thank you. I'm just making sure Missus Farrow hasn't scheduled a speech. I don't want that, do we, Missus Secretary, thank you, appreciate your time.