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Bloomberg Audio Studios. Podcasts. Radio. News. We begin this hour with markets looking ahead to high-stakes trade talks between the U.S. and China and Switzerland this weekend. Joining us now, I'm very pleased to say, Peter Navarro, the Director of the Office of Trade and Manufacturing Policy at the White House. Dr. Navarro, it's been too long, sir. It's good to see you. Thanks for being here. It's been a long time, John, and it is good to see you too, sir. Thank you, sir. First class trade.
Diggs here, my friend. Well, I'm pleased we're looking after you. Let's kick it off with these talks this weekend. We just heard from the president just moments ago, and he mentioned an 80% tariff might be about right. It's up to the Treasury Secretary. We understand you won't want to get ahead of those negotiations, but I just wonder, could you offer some clarity on what about right means? When the president says 80% tariff on China seems right, seems right for the talks this weekend or seems right for the foreseeable future?
I was one of three people that was with the White House the first term for all four years. One of the big reasons is I never got ahead of the president. But let me tell you about Geneva, which is kind of – I've got very warm memories. It was my finest hour as a negotiator. I went there to lead the negotiations there.
for the United Postal Union reforms that essentially got China rates fair to, we saved billions on that. But I mention this because Geneva has symbolic value in this negotiation. It is the headquarters
of the World Trade Organization. And the scariest thing I ever saw in Geneva was the size of the China delegation at the World Trade Organization. And they played the WTO like a fiddle. So let's see what happens tomorrow. I'd be happy to come back on Monday and do the debrief, but I don't want to get ahead of the boss.
or Scott Besson. And don't forget, Scott's going with Jameson Greer, the United States trade representative. He's the guy who learned at the knee of Bob Lighthizer the first time around, was there for all the China stuff. And he's the guy who was the architect, along with Howard Lutnick, of the UK deal.
uh... let let's see what happens is it's in the very best set was said in chile weekend for the markets will pencil in an appearance with you for monday no worries about that i'm looking forward to that conversation just going to the weekend reflected on your experience dealing with the chinese then on the u_k_ this is not the same relationship
the trade relationship is tremendously unbalanced and has been for a long, long time. Can you frame for us how difficult it has been previously for you to negotiate with the Chinese and how much longer it could take with the Chinese relative to, say, the UK and other trade partners? Well, I can tell you, I think I sat face to face with the China team
maybe seven times during the first term and twice Xi Jinping was there. It was G7, excuse me, the G20. Both, I think it was Tokyo and Buenos Aires. What's interesting, so what's so interesting to me, Jonathan, about China is that they have continuity. The same people are going to be in Geneva were the same people back then. And our...
Regimes change. We have different governments and things like that, but they have the advantage of that kind of continuity. But look, it'll be interesting. Again, I don't want to get ahead of Scott and Jameson or the president. I think let's see what happens. My role...
And we've got 15 countries we run enormous trade deficits with that we've got to renegotiate the whole structure of those deals. And there's another 100 countries that cheat us in some ways, but smaller ways.
My role in the administration on all of this is to do the background analytics to see how each country is cheating us, which basically sets up the terms of the negotiation. And every country is like fingerprints. Like India is the Maharaja tariffs. They have the highest tariffs of any of our major trading partners. Japan is the most clever at protecting its own markets with a combination of domestic
protectionism, non-tariff barriers. You know, Germany, they have auto tariffs at 10 percent. We have them at 2.5 percent, but they also have the VAT tax, which acts as another 29-- what is it? 19 percent tariff and an export subsidy. So what I do is do the background and look at kind of what-- how these countries are doing what to us.
We get great deals from New York people. I think the UK deal is very interesting. I think the significance is not just that it's a deal, but that it's a template for the future deals. What we do, Jonathan, is there's like four or five verticals we look at. It's the tariffs, the non-tariff barriers, the digital taxes, and then the various kinds of cheating, the dumping, the currency manipulation, and things like that.
And then from there, we assess what the asks are, what we need, and go forward from there. You're going to see a steady wave of deals. The USTR building is right across the street from the White House. It's got the most staff negotiating these deals.
And it's like you go to the deli and you have to take a number and get in line. Every day there's delegations from around the world lining up to meet with Jameson Greer and Howard Lutnick.
And I've seen, I looked yesterday at the schedule, it was kind of fun, out to July, and it's just, you know, one after the other. Well, Peter, looking at the countries lining up, one key aspect of the U.K. deal was, of course, bringing down the auto tariff to 10%. So right now you have a tariff rate that's lower for Bentleys, which is a car that most American families can't afford, made in the U.K., where Chevys have a higher rate if they're made in Canada or Mexico. Is there an expectation?
expectation that the next trade deals, auto tariffs will be coming down those rates?
It's going to be country by country. I mean, the beauty about the UK is that it's a very small amount of exports they send us, and we have a hard cap. I think it's 100,000 units where it goes right back up to 25%. And, again, we're trying to do something that's mutually beneficial to both countries to get to a better place while at the same time
changing the level of the playing field so that it is more level. I think, for me, the beauty of the UK deal, besides that, was all of the good stuff we had for ag. I mean, one of the problems we have is this...
Non-tariff barriers like phytosanitary standards. What's that? That's like these things they do to keep our pork out, our chicken out, our beef. Right now, we're going to be able to sell a lot more beef, poultry, dairy. And ethanol?
I mean, they had a really high tariff, like almost a lockout tariff on ethanol, and that's made from corn, so the folks in Iowa are very happy about that. So this is the way we're going to go forward on net. The United States is going to be far better off
And all we're doing is trying to level the playing field. I saw the EU kind of rattling sabers, I think it was yesterday, about some kind of retaliation. And I would just say to anybody who's in the European Union, I mean, how can you look us in the face and threaten us?
when your tariffs are higher, you have lost cases repeatedly at the WTO on us selling you things like beef and poultry, and you won't even honor that. - Peter, yesterday the president called Ursula von der Leyen fantastic and he said he hopes to meet her, but are you saying that the European Union is not as high on the priority list than say other trading partners like South Korea and Japan?
Not at all. The EU, to be clear here, we have the second highest trade deficit with the EU behind China. So they're very high on the list. All I'm saying here is that I found it unfortunate that the EU kind of fired, I think some term was fired, shots across our bow. It's like
Retaliation will not work against the United States. We shouldn't have that. Let's talk. Let's figure this out. And it would be nice... Here, let's give peace a chance here. All we're asking for here in the United States of America is fairness. I mean, would you agree? Is there any disagreement on this set or on your set that the tariffs of the EU are higher and that the non-tariff barriers are higher?
And that the WTO in Geneva is basically sanctioning that through two things. One is the... But would you agree with that? If I said anything that you would like to fact-check there. There's a bigger question here. There's a bigger question here. And this is something that the German finance minister has come out and talked about.
which is they'd be willing to drop all tariffs to zero. If the U.S. were willing to drop all tariffs to zero, there is a willingness to negotiate, ground the board to a lower tariff regime. Would that be acceptable to you, or is 10% the new floor? So stay with that. See, that's such a misdirection, okay? It's the non-tariff barrier, stupid, to kind of paraphrase Trump.
Bill Clinton. It's like, it's the non-tariff barriers. So when countries like Vietnam or entities like the EU say to us, "Oh, let's all go to zero tariffs and everything will be okay." That's not the problem. It's part of the problem.
But the bigger problem is the non-tariff barriers. In Europe, it's the VAT tax. I mean, I don't know if you know this, but the United States has tried going back to the 1970s to get equity treatment for the VAT tax, which most countries in the world use, versus the income tax, which we use. We haven't been able to get it because the WTO has a majority of people who benefit from sticking it to the United States.
So they do. So the zero tariff thing, that's misdirection. And on your set, you should call it on that. When they say, let's lower the non-tariff barriers and let's give you relief on the VAT tax, now we're talking. The VAT tax is a slightly different mechanism. This is all going to take a long time. And there are a lot of competing factors here in terms of who can possibly pull these levers. And I'm just wondering, we've got two months left.
in this 90-day negotiating period that is paused for the retaliatory tariffs. Does that just get extended out another 90 days as you have to deal with different legislative bodies to possibly remedy what you see? Well, we don't have to deal with legislative body. Well, okay, in the EU perhaps, but I coined a term in Trump time, which is to say do it as fast as possible without screwing it up. And that's all we're trying to do. I go back to the observation
that the United States Trade Representative and that building, which is a historic building, by the way, beautiful to see if you ever get there, the lines, you know, they're coming in and out, and we're talking and we're talking. And, you know, as the boss says, let's see what happens. I mean, it's in everybody's interest around the world to level the playing field with the United States in a way which allows us to restructure this international trade environment, which is fundamentally...
skewed against the United States. I mean, we're losing...
Because of this system, the United States is losing our manufacturing base, we're losing our defense industrial base, and when push comes to shove and folks around the world are looking for the United States to help defend them, I mean, if we get to a point where we can't do that, what good is that? So trade, economic security is national security. It's one of the guiding principles of President Trump and his administration. So we're just trying to get fairness here, give fairness a chance here and work with us.
Looking forward to an update on Monday, sir. It's good to see you once again. Yes, sir. Thank you. Dr. Navarro, Director of the Office of Trade and Manufacturing Policy at the White House. Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for
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