tv Christian Science Monitor Breakfast with National Economic Council Director... CSPAN April 6, 2019 3:56pm-5:03pm EDT
classes at universities. by the time there -- by the time he is killed in dallas there are computer classes everywhere. air travel is replacing automobile and train travel in many ways. people are flying more and more, hub airports are being developed across the country, so it was the jet age, the space-age. kennedy grabbed onto it and made that the cornerstone of the new frontier. 8:00 easternht at on c-span's q and a. house economic advisor larry kudlow. he sat down with her reporters to discuss china, brexit, and humanitarian aid for venezuela. he also talked about president trump's threat to close the u.s. southern border and steps the u.s. government might take to ease any economic strain. the christian science monitor hosted this event. let me guess, we are on the record? [laughter]
great. thank you. >> want me to introduce you, and then you can make brief opening remarks? of thei'm linda feldman christian science monitor. our guest today is larry kudlow, his first appearance at a monitor breakfast. welcome. i thinkkip the bio, everybody knows who mr. kudlow is. show onmembered for his cnbc, the kudlow report. it has been a year since mr. kudlow was tapped by the president to serve as director of the national economic council. we are delighted to have him
here. on the ground rules, we are the record. please, no live blogging or tweeting, and short, no filing of any kind while the breakfast is underway, and there is no embarq out when the session ends at -- there is no embargo when the session ends at 10:00. a you would like to ask question, send me a signal and i will call on as many of you as time permits. mr. kudlow, if you would like to make brief opening remarks, the floor is yours. mr. kudlow: thank you. i appreciate it. i don't have much to say at the opening. would say we are always worried about the health of the american economy, jobs, the national economic council and so forth. and things are looking up. i'm just happy to see some good numbers coming in. sloppy, sloppyd
winter and sloppy seasonal adjustments and sloppy government shutdown and i noticed the atlanta fed, the gdp is up to 2.1 for the first quarter, and that was zero or 0.3. if you add on the seasonal miss that happens every year for the last eight years, about 8/10 of a percentage point, we may be hovering around 3%. muche the ifn reports very -- the imf reports very much. profits look good. cap goods look ok. i think our plan of lower tax ands and deregulation opening up energy and trade reform, which will continue to beat the building blocks of economic policy in the trump administration, i think it is working. , and 2.5%,ast year
so we are moving at a higher trajectory. i know there is a lot of skepticism about this around town. i respect that even though i may disagree. supply-side tax cuts, we are boosting the employment, production, business side of the economy. so i know this isn't exactly breaking news with me, but more people working me.he dollar looks fine to on the whole, well-balanced. i think that is enough. i could say. you take it where you want to go. with all kick things off question and moved to reporters around the room, starting with bbc.
i want to ask you about the border. you spoke about finding a way to secure the border without damaging the economy. how is that possible to do both at the same time? -- >> i don't know how you process that. what we need a serious immigration reform in this country. i think the mexicans are trying to help out. i am not an expert on that subject. economic the impact of closing the border -- the president has not made a decision, as you know -- one
area we have explored is to keep the lanes open. dhs, ando officials at that is possible. if you asked me the mechanics of it, i am not the guy. that is possible. that would help the supply chain issues. we are very integrated with the mexican economy. that gives me a chance to plug mca, a trade you i hope will pass in congress this year. robert lighthizer is optimistic. , exploringing at it it. we will do the best we can if that becomes necessary. >> do you believe security is more important in trade? look, i think they are both essential. in a funny way i totally support
him and his efforts to try to solve this border crisis and the issue of border security. it is not an easy thing to do. it may not be cost-free, i understand that, but i don't think it is one or the other. security,ms of border in addition to the humanitarian problems, the drug trafficking problems, they are economic issues. you are flooding south texas, new mexico, arizona, california -- for the local economies it is very disruptive. america is a humane country. ,e want to do the best we can even though i think we are running short of facilities, frankly. someone about
these things. have become the two intertwined, trade, safety, security, hard to separate them out. i don't think the president was choosing one or the other. wand, could wave a magic ,e just need immigration reform and we have some awfully good ideas in the administration. we would love to work bipartisan to get something done, try to solve that. work with mexico to solve their issues from the south. we have been coordinating with them. thingssame time, doing to make our economy a better economy, create more jobs. i don't want to create a dichotomy. andow it came out that way,
the president knows they are intertwined. >> bbc. >> thank you for coming this morning. i wonder what you make of the andit process unfolding what the consequences would be sums kind ofin customs union with the european union. >> nice going over there. nice going. what is up with that? i don't know. i don't want to choose. i don't one offer the prime minister any advice. i supported brexit several years ago, as did the president. i continue to support it. 2.0.l it magna charta i thought it would give the british more autonomy, really have a stronger economy, get rid of the regulations, taxes, legal
burdens and so forth. there was a time when i thought i understood british politics. i know a lot of the tory people, boris johnson. i don't know what will happen, sir. i don't want to speculate. >> donald trump warned if britain still had a relationship with the eu, it would make more difficult for the u.s. to have a bespoke trade deal. a> we would love to do an ft with the u.k. , as mattersand it , we can. someone said there is a two-year
gap. i don't know if that is 100% true. if there were a so-called clean break, maybe we would not have to wait two years. we would love to have a trade deal with britain. whether we are allowed to do that are not -- >> -- toagain, i don't want forecast. i don't understand politics over there anymore. in fact, i probably don't understand politics here either. [laughter] favor brexit. we would love to do a trade deal with the united kingdom. i wish the prime minister luck. i know her and many of her people and enjoyed meeting with them. you don't want me to forecast that. ap.arlene with the
>> how are you? you andou explain why the president are stepping up pressure on the fed to lower interest rates even though the fed is doing what you want in terms of pausing interest rate hikes. second, can you talk about stephen moore and how committed the white house is to his nomination? on the matter of the concur thatetely money looked too tight, particularly in the last couple of rate hikes. i don't want to obsess about ,his, but if i had my druthers i would love to see them take back 50 basis points. by the way, there was some
misquoting that i use the word "immediately." i never did. it was an incorrect report. i went soft on it. it is our point of view. independent. we are not trying to compromise that independence. i started my career at the fed a long time ago. i was there for the signing in 1913. [laughter] >> that was just a joke. i look at the yield curve, darling, and it looks too tight for me. know the global economy is extremely soft. the eurozone is close to recession. china is soft. we will not be immune from that.
that will not drive our economy. i note the inflation rate is theally coming down, one of fed's preferred measures. i think that is a big surprise for some people. that along believed strong economy and more people working and succeeding with wages going up is not necessarily inflationary. as models have not worked in decades. this is as supply-side economic , weation where the growth are not handing out one-time tax rebates. are to boosts investment and productivity is rising, hence real wages have plenty of room to go up, and the employment numbers, as supply-side phenomenon, people are offering up their labor. i call it coming out of the woodwork. it is one of the most significant surprises in our cycle.
if i get these numbers right, openingson job according to the report comes 6.5 million unemployment -- i think those are right. how are we going to do this? workers who have moved out of the labor force are coming back. ,hat can't be inflationary therefore, my suggestion is the federal reserve think about that and maybe they acted a little too hastily. i take your point. it now looks like there will be no rate hikes this year. i take that point. move when the fed moves. it has its own timetable and will take action when it sees fit to take action.
it is not a matter of pressure. it is just a matter of our point of view. the president is not bashful with respect to points of view on a number of subjects, including monetary policy. he is a successful investor and is quite a lot about it. i have spent the better part of my career doing the researcher covering it on tv. that is where we are. market,d in the futures the money markets are pricing in one rate hike -- i beg your pardon, one rate cut, and the small probability of a second rate cut. i think a lot of people in the investment world would agree with our point of view. , the fed is independent. it will act when it will act. my comments, the president's comments were not meant to "pressure" the fed.
that is not our intent. that is our point of view. >> -- >> i spoke to the president yesterday. he completely supports it. i do. people are being hard on him. i don't know. this town is a toxic town in some respects. so we are fully behind him. he is a smart guy. he would be a breath of fresh air in the fed. so far, all systems go. newsmax. >> thank you for coming here today. said tor, sarah sanders this reporter that there would be no infrastructure plan for
the rest of the year, and that was the key promise of the president in the campaign. now we are into another year. is there an infrastructure plan on the books? if so, how does the administration proposed to pay for it? >> we are developing an infrastructure plan. >> it will be ready this year? >> it could be. here is a case where we are and thewith congress new house leadership. i have met with a number of committee chairman in both houses and we have talked about a lot of things and the , bothsions are ongoing with respect to reauthorizing the highway bill, we also have some thoughts about infrastructure in the energy
sector. i and very keen on that myself. that is an executive order will be unveiled in due course that will try to help out our energy revolution and will open the door to additional pipelines, terminals, lng. that is a big part of our view. i have met with the key committee chairman and we will continue to work with them. people on the kudlow report make good later on. >> where is the money coming from? >> we have not priced it. we will see. duration.e the size, i don't want to give any details because we are working with those folks. it will be collaboration. i hope something comes of it, but i would not want to get into
any details. we are spending a good amount of the senate, house committee, and that is a good thing. >> the president is involved? >> of course the president is involved. >> hands-on. >> this is the most hands-on president you were ever see on any subject. i mean it, the most hands-on president. , closelyfor two involved with another. president trump is a decisive executive. >> npr. >> thank you. i want to go to the border. what are the odds he will close the border? theer two, if you do keep
truck lanes open and mitigate the economic damage to what leverage does the president have left? him, thes all up to decision to go are no go is completely up to him. i don't want to handicap it. we looked at it. we discussed it. there are a lot of angles here, political, security issues. he is going to make those announcements. is a to inflict pain on mexico to give him leverage to do what? what is the thinking? >> the only thing i say, as he has said -- i am just trying to go through his most recent , weements, even this week want more help from mexico, and
by the way, it appears we are getting more help from mexico. that is a good thing, a great thing. we would like some help in the congress, the democrats and republicans, for a comprehensive immigration bill, which in many ways, as you know, is at the heart of this. we have to make changes. we need reforms very badly. discussions.oing i would say right now the mexican government is doing better than some on the hill. >> how will the border closing help you get more help from the hill? point.s an exclamation it shows seriousness. he is telling the american people how serious this is and how committed he is to restoring some semblance of law and order down there and to genuinely
protect america's borders and its security. and these are hard things. i mean we went through this with the government shutdown. i was in the press room a bunch of times. i wasn't thrilled about the shutdown. nobody is thrilled about the shutdown. i don't want anyone to have a hardship if i can avoid it. there's a principle here. the principal is a clear border security program including a wall and many other things. he is underscoring that because matters are or have gotten out of hand. it's funny. it's obviously not my main policy area of expertise. when i heard 100,000 people coming through, i have seen friends of mine who worked in
the prior administration like jeh johnson and so forth. he is an awful good man. we are all shocked at this. you to do something. he has got to send a message of the seriousness of this and the desperate need to solve it. it effects america's life and future. i'm trying to paraphrase them. i don't know that i have it downright but i think he would say something like that. reporter: ok. i'm sorry. i don't know your name. reporter: if i can ask a question about sanctions. on venezuela and russia, on venezuela you seem to have pretty aggressive sanctions. how much is the actual reality of all of the investment on our
end limiting our ability to put pressure there? how much have you put in on venezuela sanctions? question, you know will read your words back to you, so i will be that person. i think your own words were something to the effect of we are the united front and you will have to stop doing things with russia. how have your views changed on sanctions as you look at russia which it seems to have no effect at all? mr. kudlow: did you go back and look at all my stuff? reporter: i tried, but you have a large library. mr. kudlow: i don't know what i was referring to at that if point. russia misbehaves we will take action. regarding venezuela where i am haveved in it, we sanctions, as you know.
the sanctions are working. we may take additional sanctions. we will do what is necessary. nicolas maduro has to be replaced. that is a humanitarian crisis. and it is a political crisis. it's a foreign interference crisis with cuba and russia and china. the people are starving on the streets. less the young folks forget the breakdown of socialism in the soviet union. let's use it as a bit of a refresher course. it became so with the chavez and leading to maduro. we want him out. reporter: how do you do that when the united states is
heavily invested in businesses like sicko? how do you navigate that? it is different because we have a financial stake in this. mr. kudlow: we do. yes. of course we do. i have met with all of the ceos. they are fully behind us on this. fully behind us. the sums are not insignificant. they completely back it. they are not happy either. we will be taking whatever steps necessary and if we have to take that up we will. reporter: do those include a rebuilding plan? mr. kudlow: that's good. i'm glad you asked that part. we call it day two. i'm heavily involved in that along with wilbur ross and working for mr. bolton.
we have a lot of plans to revitalize the venezuelan economy and to move very rapidly. there's financial planning. there's food planning. there's getting cash to the people on the streets planning. we have been working with banks in the region to help us. we have currency planning. we have imf planning. and i don't want to go into details at this point, but the answer is yes, absolutely. we will be moving as fast as we can. i hope the venezuelan people understand that. linda: jeff, from a reuters. can you give us a
sense of what was accomplished during the talks in beijing last week? good headway according to bob lighthizer and steven mnuchin. the talks go on. without getting into -- i can't comment on specific details. this is the largest scale, deepest discussion of trade between the two countries in history. we need a good deal. the president said we need a great deal to do this. talking is good. we are talking issues we have
never talked before, including enforcement. ip theft, forced transfer of technology, cyber hacking, enforcement, i will repeat. tariffs and nontariff barriers for various commodity trading. all on the table, all making good progress, all making good headway. we are not there yet. we are not there yet. we hope this week could get closer. reporter: is there any word on what that is going to look like? mr. kudlow: bob lighthizer outlined a plan when he spoke to the committee on the hill. i think a very good plan. multi tiered plan to deal with it. penalties if the complaints don't want tout i go into any of those details. linda: sean higgins, over here.
senator grassley is promoting legislation to rein in the section 232 tariffs. he wants to put a sunset on them . is that something the president would consider in any way? the president is not in favor of that in the moment. he conducts these needsg relations, that he maximum creative to bring home some deals. , for all theere talk the administration is professionalized, nationalist, whatever, here we are with a very good usmca deal, there's
one i could give lots of details on. it is a very good deal. it is an old economy and a new economy deal. nothing like it has ever been put together. hand.e that deal in we are looking toward voting in congress. pelosi has, speaker been very cooperative with bob lighthizer in allowing him access to her conference. he spoke to the whole democratic conference, which is very cool. we are gaining on the china deal. gotten deeper than anybody thought possible. we are engaged in talks with europe. we are engaged in talks with japan. we completed a good south korean deal.
again, for administration that is supposed to be whatever we are supposed to be, our trading relations are wide open and intense. we are trying to solve important problems in pursuit of free, fair, and reciprocal trade. a lot of the skeptics have been proving wrong on this. reporter: the section 232 tariffs are also sort of snagged on this. you have acknowledge that a lot of people in congress want them lifted. ambassador lighthizer is hard at negotiations with canada and mexico to try and solve it. he is hard at it. constant talks.
reporter: [indiscernible] mr. kudlow: the report was delivered to the president. he had 90 days. is it a month old? i don't remember. reporter: it has been more than a month. mr. kudlow: so it's being considered. no decisions have been made. by the way, under certain sections obviously not a lawyer but i have listened to the lawyers, that 90 days could stretch out quite a while if need be. hearstdan friedman from over at the other table. reporter: some of us were in an interview with the president in which we discussed the so called state and local tax that is having quite an impact on taxpayers in states like connecticut and new york and the president seemed a little surprised that this was an issue with middle class homeowners.
he thought it was more of a matter for the well healed and elsewhere. he did say that he had gotten calls on the issue. he was open to discussing it. i believe governor cuomo of new york took the cue and went down to washington to plead for some relief obviously not in this but in future tax years. is there anything percolating on that? do you think we will see any changes or adjustments to that going forward? mr. kudlow: i was in the meetings with governor cuomo. as a courtesy, i just met an his budget director talked about that and other things. i don't expect to see the tax reform opened up. i would add and i understand criticisms about it.
i understand that certain parts of the country may get hit harder than others. i just want to remind though in terms of tax legislation itself, you know, we basically did away with the amt. so many of the upper income brackets are actually getting a deduction. let's say they get the 10,000 where as before they wouldn't have gotten any. they would have been thrown in. just saying. that may not solve the problem to everyone's satisfaction. i understand that. that's there. a lot of people overlook that. second point onbviously, it's not breaking news, kudlow would like to see lower tax rates federally and in the states and cities. i had the pleasure of living in new york and connecticut.
do you want any tax advice from me? you know, we are always like to help out in new york for sure. i had a very cordial meeting with governor cuomo. he is graceful and we had a great conversation about a lot of topics when i was there. in terms of opening up the whole bill, i doubt it very much. left. to my reporter: thanks for doing this. thatrd somewhere capitalism is the best form of suppressed billing. mr. kudlow: hold that thought. reporter: at the moment a lot of americans are concerned about the fact that inequality seems to be growing and capitalism you need some people to be successful. is there a need for some kind of
upgrade so all boats rise at the same speed? mr. kudlow: i don't believe that. i think we all start at the same starting line. by law and tradition and freedom but we do not end at the same. equality of results is not part of the american tradition. never been part of the american tradition. i'm glad you opened this up. i want to make a point or two here. we mentioned it regarding venezuela. the issue of the democratic party tilting towards socialism is a significant political result. one which i believe would do great damage to the economy. you will hear more about this from the president and others,
perhaps myself. you want to talk about equality of results or people having more evenly distributed benefits. if you go to some sort of universal medicare or health care system, right? 180 million americans will lose their health insurance policies. 180 million. this is not all rich people. those are working folks. most people get their insurance from their businesses. right? that goes away. that is not fair. that is not fair. the cost estimates, that was priced out variously at $30 trillion or something over a
period of eight or 10 years. who do you think will pay for that? if you add in some of the green new deal proposals about financing people who were not working or don't wish to work, there is a whole laundry list of them. the idea that you'll raise the top tax rate to 70% or 80% or whatever wouldn't even remotely finance. the people that would pay the taxes, you will get tax hikes if you went down that road, you will get tax hikes, major tax hikes across the board. on everybody. the distribution tables are well known. this is a sophisticated crowd. the top 1% pays 40% of the income.
the bottom 50% pays about 3%. most progressive or one of the most progressive taxed industrial countries. progressive. my point is all of the folks that pay those taxes are going ly protect gargantuan more taxes to finance any of the socialist green new deal's. let's face it. i don't think the opposition party has been honest about this. i have seen price outs from left of center right of center think tanks. i don't see how that makes anything fair or more equitable or whatever. our own counsel of economic advisers looked at this. the brookings looked at this. lose 15% of gdp inside
of 10 years. socialism doesn't work. i think it will be a political burden for the opposition party that will be economic decimation. when grow down that road, you know, you have to consider the damage that will be done to everybody. socialism doesn't work. we'll be talking about that but in a more philosophical sense i think it is much more important to expand the economic pie and to exercise one's god given talents. i don't think we start -- we begin at the same starting line . by law and fortunately we have lots of safe gafrds thereguards -- lots of safeguards there.
mean we all end at the same. you will make more money than i do as i operate as a public servant. i will not complain. that was a joke. reporter: you have said the administration does not want to compromise the independence of the fed. appearance matters when you talk about the institution like that. how should we read into the president's tweets and comments from officials like you about where monetary policy should be headed? mr. kudlow: you could have views without breaking the independence of the fed. that has never been our intent. the fed will do what it is going to do. venezuela, you are talking about an economic
package, is there some sort of timeline about how long the administration is willing to before it is time to unleash the economic package? what does not look like? mr. kudlow: the timeline is to get rid of nicolas maduro. i have no idea when that will be. as far as our economic assistance and economic restructuring, that would begin immediately. is a question of getting a hold of what i call the machinery of government. we are working on that by the way. lots of discussions going on with people in the national assembly. be specific but we are developing a very well-rounded and what i think will be an effective plan.
the rescue plan, the restructuring plan would be a plan that will put cash into the hands of the people who are starving. it will be done in a way that is interesting to me. some very clever people are working on this inside of the government. banks, iphones, apps, many clever ways to get cash in there and the cash will bolivars,levards -- it will be there's no demand. dollars. theon't want to get of curb but we are ready to go. linda: we are running out of time. i want to get a few more in. reporter: what kind of timeline you have on the usmca? president trump said he will go
back and it is not a good idea, what is your view on that? mr. kudlow: whenever speaker pelosi gives us a vote. that will be.hen in has been very cooperative the relationship with bob lighthizer and others has been great. we are ready to vote. we would love to vote, as soon as we get a green light. reporter: why is it important for the fed to be viewed as independent? on trade, is the administration willing to roll back the tariffs on china upon the signing of a deal china wants? or is the administration demanding all tariffs remain in place and they will rollback over time if china is shown to comply? mr. kudlow: i can't be specific
because it is part of the enforcement discussion and continues. i just can't be specific. we'll wait and see. reporter: unfed independence, the administration keep saying it is important that the fed to be independent. why is that important? mr. kudlow: i think independent central banks are a good thing. it is a tradition. i think around the world, you know, for example countries with independent central banks tend to have much lower inflation and much better policies. central banks sometimes get it right and sometimes get it wrong. just like the rest of us. i think we have lord -- learned historically, argentina has been a learning experience. venezuela has been a learning experience. zimbabwe has been a learning experience. there is a lot of history about that. so i think that sort of independence is a is a good
thing. i don't think that precludes people having opinions about the fed, as you know. but in any statutory sense, i think it's a good thing to have an independent central bank. linda: it's 10:01. mr. kudlow: i'm stuck with you. but nick, i was thinking about you this morning. you're never far from my thoughts. you know, the president may have said that lovingly. very lovingly, you know what i mean? think about that. reporter: did he say it lovingly? mr. kudlow: i wasn't on the conversation. i'm just opening up that possibility. it might have been a very loving, affectionate kind of a huggy thing on the phone. reporter: what about byrnes in the 70s. is that an episode that would give you pause? mr. kudlow: i know that history. i knew arthur when i was here the first time.
historians disagree about all that. i know there is some evidence that he gunned the money supply because the white house wanted him to. i don't think we're in that situation at all. i don't want to bore you and take a lot of time. arthur, bless his soul, rest in peace. he was a very brilliant man. he was a longtime nixon guy. was the ca chairman under -- underd how are eisenhower and was a top nixon aide. i don't know. i don't see this as a similar situation. that's all i'll say. and, again, i want to reiterate, my comments in recent days, i never used the word -- it was soft. this is my view.
and it's also the president's view. we think they went too far. that's all. linda: so we're now at 10:03. we started a little weight, can we take some more? mr. kudlow: i'm here. i'm yours. reporter: just a follow-up question on border. apart from keeping open truck lanes, what are other strategies gnat administration is think bag to mitigate potential economic damage is the president decides to shut down the border? mr. kudlow: it's a hard thing. there is issues nancy, about individuals and groups getting to work. i understand how hard that is. tourism. i understand how hard that is. you know, saintly wife and i lived in the san diego area a long time ago and went across a couple of times. it may be possible. it's a multi, multi-lane highway kind of thing.
you could figure out ways to do that. i'm not saying it's easy. as i said earlier, you know, to my way of thinking, the truck -- the trucking lanes, and freight lanes, the supply chain stuff is really key. i would go there first. i would try to develop. i don't know if this will happen, the president will give his views today or as the days go by. anything we can do to ameliorate the economic story we will do. it is being looked at very carefully. reporter: do you have an estimate -- i was told yesterday that you and kevin hassett have been making the argument to the president through economic data and paper that, you know, gdp could take a hit. day by day with the border closure. what does that data tell you? what kind of hit to gdp could it take?
what information are you presenting to the president along those lines? mr. kudlow: i'm not sharing the internal stuff. just to say we felt the need to give him some advice. that's what we are there for. you give him good news. you give him bad news. linda: final question to the gentleman at the end the table and apologies to those who didn't get one. reporter: back to china briefly. do you believe our ability to impose punitive tariffs is the one thing that sticks in the craw of the chinese at this point? mr. kudlow: i'm sorry? reporter: our ability to impose punitive tariffs as necessary when rules are broken, is that the biggest stumbling block at the moment? mr. kudlow: speaking as an old free-trader, one of the things i've learned on this, the president's use of tariffs as a negotiating tool, i think he was right. i really do.
particularly in the chinese situation. i think he was right. it is not my normal habitat. when i saw how tough the the story was with china and all their violations, i came to the view that he was right. here we are deep into discussions nobody has come close to this, you know, he is the first president -- i don't know, ever, to hard headed with china and be unafraid to use tariffs to make his point. no other president has done this as far as i know. it's worked in the sense that it's certainly brought them to the table. and i mean, i think the chinese have been going the wrong way
deserting some of the marketplace reforms of the 80's and i think their economy has 90's. been on decline the last 15 years. i think the tariffs made that worse. if the world trading system is busted, frankly, it is. change is important. the president i think has taught us all a lesson about being a tough negotiator. i think that's really really part of the story here. and it may well pay off. i hope it pays off he has said he hopes it pay off. it's got to be a great deal for the u.s. and china too. yeah, i think we all learned something on this. and there is lots more work to be done. you got to play by the rules. and the trading system worked great for a long time.
then all of a sudden it hasn't worked great for several decades. we can go into detail. we don't have time. but i think potus is absolutely right. that's one of the reasons i've supported this, you know, the strenuously i still am supporting. reporter: when did it stop working? mr. kudlow: that's a good question. i don't know precisely. i think the breakdown inside the wto had something to do with it, the mislabeling of economies. if your second largest economy in the world is still labeled undeveloped, and no actions are taken to change that, huh? i think that china is not alone. , theyk they are the worst
have been the worst. i want to look at this positively. you've asked me questions about the talks. i can't be specific except to say, as bob plierds would say we're making headway and i hope we make more this woke. i think the chinese have acknowledged these problems for the first time. they were in denial. reporter: [indiscernible] mr. kudlow: all of them. all of them. the ip theft forced transfer, , lack of ownership, cyber hacking, they've acknowledged that. before that they wouldn't acknowledge it. i've been here a year and been deeply involved in this. we have had private meetings and this and that. line,t going line by the way lighthizer does things. he is a brilliant guy. you've a bunch of old reagan guys in the trump white house who are still kicking it.
i marvel at his energy. they have for the first time acknowledged that we have a point. several points. i think that has led to, you know, good negotiations. good negotiations. i was at the dinner in argentina, the buenos aires g20 dinner. i watch the chemistry between the presidents. it was fascinating. i hadn't seen them together. president xi wasn't saying no we didn't, no we didn't. he was open to listening. at the lower levels, we heard that. that's great progress. that's great progress. i understand there is different views about the president and his negotiating style. i understand all that. i'm just saying in one particular area he has taught me
something about negotiating. reporter: do you think the chinese will extend their visit? mr. kudlow: you know, that's a good question, because they might. there is no law against it. we'll see. thank you. great points. linda: and thank you so much for coming. reporter: one more question on china. if no agreement is reached in the next few weeks with the chinese, should the tariffs be increased to 25% immediately to put more pressure on them? or should they be kept where they are to encourage more negotiations and have a less damaging impact on the u.s. economy? mr. kudlow: i don't want to speculate on that. too many what ifs. reporter: en u.s. japan trade negotiations coming up this month, do you think it is necessary to negotiate increasing auto tariffs on japan
imports? do think that's a necessary part of the negotiation? mr. kudlow: the president many months ago at the u.n. b bilat, i was there with heme minister abe, it indicated that as long as talks were occurring no tariff actions would be taken. he has said that publicly. as you know, the japanese car makers are picking up their direct investment in a huge way. i had a message one night -- this is a funny anecdote -- the japanese ambassador to the united states calls me late in the office one night and said the prime minister told him to give me the press release for the new japanese direct investment and would i give it to the president, right away. so i was pleased to be the messenger. i like prime minister abe.
i think he is a smart guy. so i did. and that was done i think also in earnest to show good will, that they want to build as much as they can here in the states. far as i know, that commitment not to take any actions while we are in discussions is still ongoing. reporter: can you give us an update on what the status of president trump's executive order banning huawei, the chinese telecom company from selling -- mr. kudlow: we are still in discussion on that. reporter: have the chinese brought up that at the bargaining table? mr. kudlow: you know, the huawei stuff has generally not come up in the trade talks. we have looked at it as a legal matter so far.
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"afterwards," investigative ward on jarede trump from her new book. elizabetherviewed by spires. >> will donald trump -- this is really interesting dynamic, will they at some point become too much of an obstacle him that he just has to let them go? he goes back and forth on this. was furious with them over becausey misused emails that's what he'd gone after hillary clinton with and that to john kelly,ay can you just get rid of them, make life so unpleasant that don't want to work here but the irony is, it's trump, the can't pull the trigger on his own daughter and to forget about
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