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00:00Let's start with some of the trade agreements, potentially the purchasing agreements we could
00:03see come out of this. The president was talking earlier to some of the press about Boeing jets,
00:08about 200 of them. A lot of reporting going into this is maybe they'd get as high as 500. We
00:12saw
00:12last night, maybe at a sign of goodwill, China renew licenses for beef imports. Are there soybeans?
00:18Are there energy? Can you walk us through some of the deliverables? Yeah, I'm happy to do that.
00:22So remember, we're in a situation where we're trying to rebalance our trade with China.
00:26We've had a lot of success in that. Our trade deficit with China went down by a third last year
00:31in one year. And so we're trying to manage the trade around the kinds of things we want to be
00:36selling to China, whether it's Boeings or soybeans or other ag or energy or medical devices. And so
00:42you can see us bit by bit building up this strategy. Coming out of this week, you heard the president
00:48today talk about the Boeings and hundreds of Boeings being purchased by China. We already have a soybean
00:54deal with them from our prior meetings of 25 million metric tons a year over the next three
00:58years. And we expect to also see an agreement for double digit billion purchases of ags over the
01:04next three years per year coming out of this visit. And that's more general. That's aggregate. That's
01:08not just soybeans. That's everything else. Are they keeping up with those agreements?
01:12They have been. So on the soybeans, you know, last year they needed to fill up 12 million metric tons
01:18at the end of last year. They did that. They've now, you know, we expect most of the soybean sales
01:23to go on in the later part of the year. But we've seen some there already. We saw, as you
01:28noted,
01:29things related to beef exports, registrations re-upped last night. So we're already seeing them
01:35start to fulfill some of their promises. When it comes to the detente, we have this trade agreement
01:39truce till October. Will that be extended on this trip? So we'll see about that. We have,
01:45we have, of course, the agreement that goes until this fall. That's all, that's all solid. That's
01:51all well and good. There's certainly a willingness on both sides that if this continues to work out
01:56well for each country to continue that and to extend this ability to make sure we're getting
02:02rare earths, that we're selling the types of things we should be selling to China, and we're trying to
02:06manage differences rather than escalate them. We hear that some firms, China is dragging their feet
02:11when it comes to licenses on rare earths. Was this discussed? We do discuss this. We discuss
02:18this at all levels. Do you think they are dragging their feet? So with a couple of things, sometimes
02:23they do. I would give them a passing grade on this. We've certainly seen the rare earths come
02:31back up to better levels. Sometimes it's slow. There are times when we have to go and make our point.
02:38You may have seen a couple of weeks ago, there were some big shipments of Vitrium that came across.
02:42That was after advocacy from the U.S. government. So whenever we see an issue or we hear from specific
02:48companies, we engage with our Chinese counterparts and we find them to be constructive.
02:52Where does this leave the 301 tariffs? Does China view this as retaliatory, given the fact that it seems
02:57like the relationship right now is stable and you're in the middle of the state taunt?
03:01So I haven't yet met a country where we've imposed tariffs and said, thank you. We love these tariffs.
03:06So no one really likes that other than our workers and our industries. What the Chinese know and what
03:13we've agreed that there's going to be a certain level of tariff on the Chinese. So I think as we're
03:17rolling out and concluding different investigations under Section 301, which again, don't just target
03:22China. They cover other countries as well. I think the Chinese are going to be looking at what we're doing
03:27there compared to agreements we've had in the past on certain tariff levels. And we'll just have to
03:33try to manage that. Will you get to the rate that the United States was at on China before the
03:39Supreme
03:39Court struck down IEPA and the fentanyl 10 percent? Well, I can't prejudge the outcome of these
03:45investigations. They're a legal process. They're ongoing right now. We've received comment. We've had
03:49hearings. We'll release the findings of these investigations within the next several weeks and
03:55we'll propose action if we think we need to take action. And so if tariffs are part of that action,
04:00you know, the world will see them. We'll be very transparent and public and people will be able
04:04to comment on that as well. So I don't, I can't really commit to a given rate or not at
04:10this point.
04:10We have to go through the investigations. Where did you leave the discussion on the board of trade?
04:14When does that begin? There's a lot of reporting. It's about $30 billion of goods on both sides. Is this
04:19all accurate? That's right. And so at the end of this, at the end of this meeting, we'll go back
04:23to the U.S.
04:24and the Chinese will be here. What we intend to do on the U.S. side is put out a
04:29call for public
04:30comment first and foremost and saying, hey, we're trying to manage this trade with China. We want
04:35to focus on nonsensitive goods. We think we should be selling them, things we think we should be buying
04:39from them, trying to facilitate trade in that area. And then from there, we'll be able to interact
04:46with our Chinese colleagues and negotiate with them over where we think we have the strongest mutually
04:50beneficial trade with our countries. Is there a chance, though, that with this board of trade,
04:55there'll be some goods coming from China that are a lower tariff rate than maybe an ally of the United
05:01States? I mean, I don't think we're comparing it necessarily to allies. And if you look at the
05:05president's tariff program over the past year, there are certain things that never have really been
05:09subject to tariff. Energy, energy goods, certain foods, fertilizers, things like that have never
05:14been subject to tariffs. There are certain things that we should be buying from China, I think, just
05:20like there are other countries where we should be buying things. You saw the president a week ago,
05:24he told the U.K. we're not going to have a tariff on whiskey from the U.K. So it's
05:28not out of the norm
05:29of what this administration is doing to have nuance and how we're approaching it, kind of picking and
05:33choosing how we want to trade with countries. When it comes to NVIDIA and chips, I bring this up
05:39because a lot of talk about Jensen Wong. You were on Air Force One. I mean, were you surprised to
05:44see
05:44him in Alaska at the refuel stop and getting on board? And there's a lot of speculation that something
05:49would be done here with chips. When it comes to the H200s, in January, the United States greenlit Chinese
05:55firms to be able to buy them. Will China allow their companies to buy them? Well, obviously, that's going to
06:01be a sovereign decision for China. With export controls, they're fluid, right? They change over
06:06time. It depends on what threats you see, what's commercially available worldwide, what the Chinese
06:10can already do. And so you want to make sure you strike a balance between national security,
06:14protecting high tech, but also making sure that we're benefiting from overseas markets. And so those
06:19are the kinds of things that went into the H200 decision. As to whether the Chinese are going to buy
06:24or not, again, they're making their own determinations. They're very committed to domestic production.
06:28They often see U.S. high tech sometimes as a threat to them because if we're ahead of the game,
06:35like we are on AI chips, sometimes they feel that that can stop their own growth. Obviously,
06:39we think it can be helpful to them in the long run, but they'll just have to make their decision
06:44on
06:44that. But there was a lot of speculation that this would be a tangible talking point at the table
06:48because of the presence of the NVIDIA boss. Did this come up, semiconductors? Well, so we have
06:5615 to 17 American business leaders here, and they had actually the opportunity yesterday in a meeting
07:02with President Trump and President Xi to come in, talk a little bit about their company. So
07:07Jensen was there. He spoke about NVIDIA. We also had a variety of other folks there,
07:13Cargill, Brian Sykes, and a variety of other companies. So all these things come up. This was
07:19not a major topic of discussion at the bilateral meeting. We did not talk about chip export controls
07:24at the meeting. When it comes to the Busan deal, you're really building on that. But since then,
07:29what we've seen China do is they've put in a lot of regulations and laws that actually make it
07:34difficult for American companies to get a foothold here. And some of them are even contradictory to
07:39some U.S. laws, which would mean that doing business here in China, they'd be against U.S. law.
07:44Did this come up? Do you find it harder or easier for American businesses to gain access to this
07:50market? Well, we have raised this with our counterparts. The Chinese in the past couple
07:55of weeks put into place supply chain rules that when I read them, it looks to me like they're
08:02saying if you're trying to reshuffle your supply chain or get closer to the United States or something
08:06like that, they might punish you. Which a lot of firms are doing. So that's a strong concern for me.
08:11The thing to remember is with the Busan agreement, what we're doing now, they build on each other,
08:17but they're not comprehensive. They don't solve every problem in the relationship. That's why
08:21something like the Board of Trade, we're focused on nonsensitive trade, because we know we're going
08:24to have differences in these other areas, whether it's export controls or high tech or critical
08:29infrastructure or things like that. So those are issues that we raise and we talk about, but we also
08:35try to be constructive. But I do wonder, you as a critical individual on China in the past,
08:40their rules, their regulations, the subsidies they give to their companies, do you actually
08:44welcome that in a sense that you can say to U.S. businesses, this is what I've been telling you,
08:48this is why it is hard to do business in China, and these are some of the traps that are
08:52set in place?
08:53Yeah, I guess what I would say is I am clear-eyed on these things, and I think it's helpful
08:58for our
08:58companies to be clear-eyed as well. And I think they're a lot more realistic about their expectations
09:03about operating in China's market and selling into this market than they were three years ago, certainly more
09:08than they were five years ago. So when these things happen, it's good for our companies to realize
09:13the objectives of the Chinese government, the Chinese economy, they're just different than the
09:18objectives we have. We're trying to make money and be capitalists and flow that money down to workers
09:23and families. You know, in China, there's just a political element to their economy that doesn't
09:27exist in the U.S.
09:28The other political element to all of this, of course, is while you were in this bilateral meeting
09:32with the president and Xi Jinping, we had the Chinese readout come out where they made it clear
09:36that Taiwan is the biggest issue for them. At the same time, the White House readout didn't mention
09:42Taiwan at all. How much is this going to be the biggest hurdle between this relationship and setting
09:47up potentially some of the broader discussions like Board of Trade?
09:50Well, again, well, I don't expect the Taiwan issue to bleed into Board of Trade. I just don't. We've known
09:56for a long
09:57time that the Taiwan issue is of key importance to the Chinese. The Chinese know that for us, we're interested
10:02in
10:04U.S. companies and U.S. workers being successful and leveling the playing field. So it's normal for different
10:09countries to have different key objectives. And so it's normal for them to raise that. It's normal for us to
10:14talk about
10:14wanting to have access to the market.
10:16But in 2017, you were actually here. I think you might be the only individual part of the president's cabinet
10:20now
10:20that was here in 2017. You were then the chief of staff of Ambassador Lighthizer. Do you think Xi's warning
10:26was the
10:27sharpest you've heard on Taiwan?
10:29So I would say no, right? There's a difference between the way we talk in a bilateral meeting and the
10:35statements that go out from the Chinese Ministry of Foreign Affairs, which is famously takes a wolf warrior
10:40approach. I would say that the meetings here between President Trump and President Xi, they were quite candid.
10:47You know, with the Chinese, when you meet with them, they always have a script and typewritten.
10:51points. And there certainly was some of that. But there was a lot of candid discussion, a lot of
10:54off-script discussion, which I think is really helpful when you're talking about the two leaders of
10:58the world's biggest economies.
10:59Well, Xi opened the bilateral talking about the acidity's trap, basically saying America is the
11:04established, more existing power. We are the rising one and the conflicts could emerge and brew from this
11:10sort of tension. And the president called the relationship fantastic. The two gave a toast to each other
11:14yesterday. It does feel like there is a warmness here. Do you feel like the relationship has changed from 2017?
11:20Well, certainly it's developed more. I mean, it's been nine years. And during those nine years, you know,
11:26obviously when President Trump was in office, they didn't have communication. But they have met regularly
11:30during that time, maybe more so than some of the other leaders that President Trump has interacted with.
11:36So it's, you know, listen, President Trump is the most powerful leader in the world. And President Xi is right
11:41up there
11:41with him. So I think it's natural for them to have a relationship. It doesn't mean there are no problems.
11:46It doesn't mean that there are serious challenges we have to face. It doesn't mean there are things
11:49we're trying to deal with to protect our workers and protect our industries. But it does mean that
11:54we have to have a constructive relationship. It just felt like the images and the rhetoric
11:57coming out of yesterday, potentially what we're going to see today, another bilateral meeting,
12:02didn't match the trade war that we were in a year ago. Are you happy with the direction of travel
12:09with this relationship? Well, for me, as the trade representative, I'm looking at outcomes.
12:15And one year in, our trade deficit with China has dropped by 33 percent. That's incredible.
12:20It went down by $130 billion last year. That's what we want to see. That means we're diversifying
12:25from China. We're making more stuff here. You know, we're seeing the manufacturing indicators
12:30and manufacturing labor indicators increase in the United States. That's what we're looking at.
12:34It's less, you know, it's not this issue of China versus America as much as it is we're pro-America.
12:39We want our domestic economy to do really well. And we have to kind of manage and control our
12:43economic relationship with China to make sure we can achieve our domestic economic goals.
12:47And just finally, on Iran, this was the major talking point on the White House readout.
12:53Do you believe Xi Jinping is going to help the United States in potentially reopening the
12:57trade of her moves, putting the pressure on the Iranian regime, and also at home telling
13:01their firms they need to abide by U.S. sanctions?
13:03So, first of all, it's really important for China to have the Straits of Hormuz open,
13:08no tolling, no military control. That was clear from the meeting. So we welcome that.
13:13With respect to Chinese involvement with Iran, our view is the Chinese are being very pragmatic.
13:19They don't want to be on the wrong side of this. They want to see peace in that area.
13:23President Trump wants to see peace in that area. So we have a lot of confidence
13:26that they will do what they can to limit any kind of material support for Iran.
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