During a CNN interview on Sunday, National Economic Council Director, Kevin Hassett, spoke about contradictory messages from the Trump Administration on tariff policy.
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00:00Yeah, so let's talk about Lutnick and Jameson Greer, because last Sunday, the Secretary of Commerce, Howard Lutnick, was on a different show.
00:07He was talking about tariffs, and he was saying that what these are going to do, it's going to bring iPhone manufacturing to the United States.
00:16Five days ago, U.S. Trade Representative Jameson Greer told senators, quote,
00:20the president has been clear with me and with others that he does not intend to have exclusions and exemptions, unquote, to these tariffs.
00:28But now we know about these carve-outs for electronics imported to the U.S. that you talked about at the top, smartphones, computers, chips.
00:37It's a contradictory message.
00:40I mean, I understand that you're saying that this was the plan, but Lutnick, it seems like nobody told Lutnick and Greer.
00:47No, I disagree with that.
00:49I think that absolutely the characterization that I gave you at the top of the hour is the thing that everybody understood all along.
00:55But I can see that when you're getting interviewed here, interviewed there, that somehow, like, not having the time like you and I have now to just show the big picture can make it so that people don't have a complete picture of what's going on.
01:07Greer is in Senate testimony.
01:08Well, think about it this way.
01:09No, but think about it this way, again, that there are these 232s, which are coming, that are announced in the Reciprocal Trade Act.
01:16And the things that are going to be in the 232s, like the cannonballs that we need so that we can have something to put in the cannon, those things are in progress.
01:24And while those are in progress, these, say, 10 percent on most of the world tariffs will not apply to those things.
01:32And so then there's a question, an interpretation, what you say, OK, if you're not applying a semiconductor to those things, then what does that exactly mean?
01:39Because the U.S. doesn't really import a whole lot of just semiconductors.
01:43The semiconductors are in things.
01:44And it's very, very natural for the Commerce Department, and I think the Secretary of Commerce, Howard Ludwig, is one of the best Commerce Secretaries I've ever worked with, that he had his team go through and say, well, what does it mean to comply with this order?
01:58And that's what came out.
01:59I don't think that it was rushed or disorganized at all.
02:01So these exemptions are only for items that will help our Defense Department needs?
02:08It's not iPhones in general?
02:10It's not semiconductors in general for commercial use?
02:12There's a long list, which you could put a graphic up, of the things that we're planning 232 actions on because they're necessary for national security.
02:23And those things that are on that long list are things that will be exempt until those 232s happen.
02:30But you understand how some people might look at this and say, this doesn't really make sense in terms of the president's larger goal.
02:36If President Trump and you and your team are all trying to reshore manufacturing so that American manufacturing for phones and computers is happening here in the United States and along with all these great middle class jobs that would go with it, that you're exempting those items while at the same time the reshoring and manufacturing of the production of sneakers and T-shirts would happen here.
03:04And that seems to be completely the opposite of the goal, right?
03:09That's just a perspective.
03:11If you think that we're going to fail to deliver on the 232s, then your question would be one to wonder about.
03:17But the 232s will be successful.
03:19We've already got 232 steel and aluminum, for example, and so that wouldn't be covered by the reciprocal part.
03:26And we've got 232 on autos.
03:28That's not covered by the reciprocal part.
03:29So those other things are going to happen, and it makes a great deal of sense.
03:33So the one final thing I want to say is going back to, like, why are we doing this in the first place?
03:38There's the national security matter, but there's also what it means for the American worker.
03:43And so when we look at, say, the small business person who's concerned that the price of their goods is going to be higher when they sell it to their customers,
03:50the thing that they also have to remember is that these policies, which the president successfully enacted in the first term,
03:56are going to increase the demand for labor, increase wages, up by almost $6,500 in the first three years of the Trump administration.
04:04And so what it means is that even if you accept the naysayer's perspective on what might happen to the price of a cup of coffee,
04:10that the person walking into the coffee shop is going to have a lot more money.
04:14In the 15 years after China entered the WTO, real wages went down.
04:17So wages went down by more than prices as we thought these cheap goods were going to revolutionize America.
04:22In fact, it was the opposite. Welfare went down.
04:24We had Angus Deaton write a whole book about the deaths of despair that were related to this.
04:28And so I think we're very optimistic about the fact that people are going to have more money in their pockets
04:32and that they're going to have a higher standard of living.