Watch CNBC's full interview with U.S. Treasury Secretary Scott Bessent

now to our headline guest uh of the morning treasury secretary Scott uh bessent it's great to have you here great to have you on the so I think in general people would call this uh what we're doing kind of a radical departure I think from from Decades of what we've seen as far as our global trade policy we're as a leader of the free market world we have always been issued these assu these uh these tariffs Etc I think can you just make the case that that when we come out on the other side of

this we're going to say wow it was really really worth it I think you started to do that yesterday you started to talk about what that looks like can you can you fill in some of the blanks on how you you see this playing out sure Joe and I don't think it's it's a radical change it's just a much needed course adjustment and when we go back and look at what's happened there there's a new paper out called the the China shock and it talks about what happened post 2004 that some of the communities recovered

but the workers never recovered and that it it was much more devastating the on a human level and what we are trying to do is make Free Trade Fair Trade because the the trading systems have become incredibly imbalanced you see it with these gigantic the trade deficits that we run you see it with the big surpluses that other countries are accumulating so we're going through we're looking at tariff barriers non-tariff barriers currency manipulation government subsidies and in the EU some of these gigantic fines that they're putting on our tech companies just because they see a

big pool of capital and you we're going to push back on those and at the end of the day president Trump's been saying tariff is his favorite word I think reciprocal may be his second favorite word and we're we're going to put this at the feet of our trading partners on a April 2nd with we're going to come out talk about who who who's a good actor who's a bad actor to what degree they have put they put up barriers against us and it'll be a choice either the they can drop the all the market

manipulation and things like that that they've done that have hurt American workers and if they do that then we could have more frictionless trade or we'll put up the Tariff wall we'll collect a lot of money and we will make the the system fairer couple of things I I think you've made the point that unlike uh the printing of of too much fiat currency which might be an underlying cause of inflation the tariffs don't cause longterm inflation they could cause some price increases but but not longterm but then at the same time you said that

Americans don't necessarily just want everything to be really cheap they want our workers to be employed here and and that the prosperity here doesn't mean being able to buy cheap Goods it means being able to live the American dream through having a job and and and having a future Etc so we're going to have higher input costs forever so what higher input costs forever no it's it's the tariffs are one-time price price adjustment and everything else the administration's doing is I we're not getting much credit as of yesterday Energy prices were down 15% crudee was

down 15% since uh Inauguration Day 10year rates are down mortgages are down the spreads between the 10year rate and mortgages have come in so we we saw housing the we saw mortgage applications pop up last week I think if we can keep on that trajectory and you Joe the the American dream is to be able to buy a house we can't import houses this could all be a reflection of the economy that's what I was ask as an investor who who used to spend their day investing in all this stuff do you look at the

10 year do you look at all of the the the signs you just talked about WTI and everything else and say uh that is the work of the government and a newfound confidence in what's happening to the economy or that's actually a concern about what's going to happen to the economy well I I I think it's both because you know we we could have the worst of all worlds because look and I'm not new to this when I was on your show last time I I've been saying it for six or nine months I believe

that the Biden Administration and and it's back to Joe's question the on working Americans what is the American dream but the Biden Administration created this bad equilibrium where the top 10% people people in this room probably most of the people watching this show top 10% of Americans are 40 or 50% of consumption and that is an unstable equilibrium the bottom 50% of work work Americans have gotten killed uh we are trying to address that we're trying to get rates down and you know could we be seeing that the this economy that we inherited starting to

roll a bit sure and look there's going to be a natural adjustment as we move away from public spending to private spending the the market and the economy have just become hooked and we become addicted to this government spending and there's going to be a detox period there's going to be a detox period you I think that that temporary pain that you've acknowledged that the president has acknowledged um I think the question becomes is is temporary pain the new transitory inflation how do you know um that we get to the other side of this and

how long do you think it actually takes well look there there's an adjustment we we'll see whe whether there whether there's pain what we are trying to do I talked about it at the economic Club of New York yesterday we are trying to transition from public to private I talked about we are going to uh have safe and sound regulation to get our banking system going again so the banks should be generating loans to private companies employment should be from private companies not from government and you know I I'm confident if we have the right

policies it'll be a very smooth transition let ask you this I was with a whole bunch of CEOs last night and they were talking about investing in the United States question about bringing manufacturing back here what the tariffs would do and there's sort of a very interesting almost Behavioral Science question which is how long do the tariffs either have to be in place or do people have to believe that they are there and permanent forever before the companies decide okay actually we are going to invest knowing or thinking that maybe they're actually going to come

off later how do you think about that well look I I I think that Mo most CEOs and tariff is kind of the the word of the moment but I actually think what is going to determine that corporate behavior is going to be do we have good tax policy can we make the tax cuts and job act permanent the are we creating energy Securities so that they have the access to cheap energy are we going to deregulate which is another big story of what happened the past four years right the rationale for tariffs it it's

jumped around a little bit and I I can give you I I wrote a few down fentel is why we're we're doing this I guess currently with with Mexico uh and Canada and there's been and China they they Supply the precursor ingredients for fitel reciprocal trades you even have some of the Skeptics kind of go well that makes some sense want to bring in domestic manufacturing obviously what what you've talked about um trade deficits do you view those in as inherently bad I I know the president always points to that but we do consume and

we're always going to consume more in the rest of the world and if you do indeed want a strong dollar it seems like it's something we're going to have to live with couple of other ones uh punishing bad behavior security concerns with China that's a whole slew of of reasons to put on tariffs and it just at this point I guess critics would say it looks a little halfhazard the way they go on they come off we we talk to Mexico and Canada okay they we talk to the automakers they don't want us to do

it so we're not going to do it it just seems like it's being levied in a somewhat halfhazard way is that is that not fair uh of course it's not fair job but that's what you all do so not all I uh look it it it's not linear it's an it's an organic process but if we were to look back to a similar process o over well president Trump's talked about it his first Administration he talked about it in the campaign Trail he's talked about it since November is the need for Europeans to fund their

own defense and you just had a very long conversation with pascus and that all of a sudden voila this week this week after 25 years of baiting and conj joling president Trump achieved what five other presidents couldn't achieve the Europeans are going to up their defense spending the German debt break is coming off that was not a linear process that was not always an attractive process but now the Europeans say that they are going to pay their fair share I mean this could all make sense in terms of the art of the deal I mean

I I could see it working but I could also see it not lasting months or even years the tariffs I I could see because it it does seem near- term it could be disruptive to the stock market it could be disruptive to the bond Market it could be disruptive to the economy and to jobs and everything else but if there's a method to it where you know maybe they don't go on April 2nd if if if the president gets what he wants is are we necessarily going to be in a tariff world for the next

four years well look I I I think some level of tariffs are going to be necessary just given long long well we'll see long term but just given the level of imbalances and the the other thing too is if we take China China is most imbalanced unbalanced economy in modern times they have a very different economic system than we have and we have let them export their economic system to us which has resulted in uh lower wages loss of the manufacturing base one very good example would be you know as you could see uh president

Trump is scouring the Earth to make sure that we have our strategic critical minerals that's great but 85 % of the refining of those and processing happens in China every time a western company sets up a processing firm Chinese competitors drop their prices and put them out of business so how connected to in your mind are the tariffs to the later conversation you're going to be having this year around taxes meaning that you need the tariffs to deal with certain budgetary issues and then of course the question is going to be what the tax piece

looks like and and then of course the next question is going to be whether the tariffs then stay on to capture whatever savings you're trying to get so that you can make the budget work right so Andrew on I I was in the investment business for 35 years I thought I understood how crazy CBO scoring is and now that I'm on the other side of the Walling can to it's really crazy and very unlikely that we are going to get any credit in the CBO scoring the four tariffs but if you look back the the

China tariffs which the Biden Administration has kept on has brought in hundreds of billions of dollars and um you so we will be able to th those are going to continue likely go up and then we'll see what the other levels are but in terms of the actual budget negotiation tariffs won't be part of the pay Force they will be it will be something that's in the background I I I think um people wonder you you've La laid out a whole lot of reasons why there's unfair trade around the globe but I think people wonder

with why start with Canada and maybe even Mexico first um just the idea that they tend to be better trading partners we had a former US ambassador Bruce Heyman to the US ambassador to Canada here earlier this week he said you guys went after those three because that's where the money is because he thinks it is going to be used it's money you need you need to be able to show and bring start bringing that money in and and and that's why them first yeah no I the the the reason it's first is because of

the fol crisis that you know I'd have to vigorously disagree with Ambassador Hammond that it's the the fentol crisis s on the southern border on the northern border and all these precursor drugs from China the I I called it a radical departure maybe that's it's not really a radical departure I I want to talk about the dollar and wonder whether there's the slightest crack in what we've had from every treasure treasury secretary we always ask him the same thing over the years I've been here so long been through so many treasury secretaries I've never heard

a treasury secretary say that they're not for for a strong dollar but a weak dollar would would really be an answer to a lot of of of what you're talking about here in terms of trade deficits uh in in terms of we know what a weaker dollar does for future obligations that we have with 37 trillion uh in debt that makes it a little easier lower interest rates implies probably a weaker dollar would you accommodate a weaker dollar at all is there any motivation at all to to let that happen or or do we have

the strongest dollar policy that we've ever had well there there's no change in the strong dollar policy but I I can tell you when you think what does what does a strong dollar mean there's the the Bloomberg currency index and the dollar is very strong on that then there bilateral trading relationships and is the dollar strong or weak on that and is it strong because of us fundamentals and I can tell you we we are committ this Administration president Trump are committed to the policies that will lead to a strong dollar if we bring back

more manufacturing if we have cheap energy good tax policy deregulate we will end up with a strong dollar but what is unacceptable is in a bilateral relationship other countries trying to weaken their currency and so we are against the tra excuse me currency manipulation uh on a bilateral the basis but globally the the strong dollar is very important we will continue as a reserve asset and I um I I think any anyone who has an inclination that this Administration thinks differently on that's wrong as far as the um the president paying attention to the stock

market or the equities Market or not paying attention we in the past we've thought that that is how president Trump at some point gauges his success as president now he doesn't need to be reelected this time in four years it's the Market's been up 20% in the last two years obviously so is there any perception with him that that he's playing with some house money he said that at one point in the past and I guess what I'm getting to is how long or or what type of levels on the S&P do you think you

would need to see where he might that might influence some of his policy-making decisions yeah look president Trump takes in the a lot of lot of information every day and stockk stock market's part of it that again is somebody who was on the other side for a long for a long time and you say where you know where's the Trump put K in there there there's no Trump put well there there there's no put that you the Trump call on the upside is if we have good policies then the markets will go up he says

he's not watching the stock market very closely are you I I watch everything but and okay what's your what's the best inut I mean you are going you know how the media covers things and we're we're down 6% on the S&P from what you read on a daily basis it's feels like we're down 60 at times although the NASDAQ is down uh uh in correction territory at this point I'm just wondering what if we ever went down 20% on the NASDAQ or 15% on the S&P um with people that want Trump to fail that's going

to be splayed across every newspaper in the world I'm just wondering whether the tolerance for something like that for the administration well look uh as you said Joe market was up 20% last year 20% there some house money you're no I I'm going to put it in another way okay the did the Biden Administration succeed the American people weren't buying it just cuz the market was up they voted out they voted out the Democrats question related to the regulatory or deregulatory agenda which I think is part of what you're arguing on a long-term basis is

going to help the economy there's two things that I'm fascinated by one is that it sounds like the FTC at least and the administration is thinking of trying to extend or at least be very similar I mean that's to what the Biden agenda was before I don't know that was sort of some of the commentary about sort of what the the next version of regulations look like which surprised me the second thing that I was surprised by was actually uh mergers and Acquisitions activity in the month of January which I would have thought would have

been up but actually were was down 30% as if January was back in 2015 and what that says about the confidence to the extent that you believe that m&a activity is a barometer of confidence well Andrew Maga doesn't stand for make m&a great again but I I think that again with with deregulation with the more thoughtful oversight at the FTC and I I think the the two uh new new leaders at the top are are very thoughtful that we will see a pickup in corporate activity I think what we've seen over the past 60 days

or the past 6 weeks since president Trump's been in that doesn't tell us very much and and again what will we what will we have seen I I've been meeting with a lot of banking heads Investment Bank heads and you know I think that things are going to loosen up Mr secretary can we just talk a little bit about the Democrats got voted out in spite of the big run-ups in the market and I think a lot of that was because of inflation and because what average Americans were feeling at the grocery Mar store at

the uh the the the price at the pump what they were paying for insurance what they were paying for housing and rent um we did hear from a lot of CEOs this week who said that the tariffs could lead to price hikes almost immediately this week and next week the CEO of Target talking about prices for fruits and vegetables that we rely on so heavily on Mexico this time of year uh Best Buy saying that they would see price hikes that would go into Electronics automakers saying you could see price hikes pretty significantly um by

next week even um I just wonder how much tolerance you think there is from the American people um you're trying to help the bottom 50% of workers they feel those inflationary prices and it it hits home a lot harder well be Becky we we'll see how the overall inflation numbers that work out that obviously Energy's a a big component so we'll see that go down committee to unleash Prosperity Steve mois group has some very good data on how regular ation affected the average household so if we're cutting that so that that's why I keep urging

people to look across the the entire Spectrum if you get a onetime price adjustment and the other thing too is are we going to for the bottom 50% of wage earners can we see real income gains for working Americans because I think that was the problem last time that the top 10% did great and the the bottom 50% got crushed so if they start seeing real wage gains because the private sector as opposed to the government's producing the jobs then I think that would be a big offset the other night the uh president Trump said

that he wanted to balance the budget uh as well so we're going to have the big beautiful Bill eventually maybe uh and I guess the uh 2017 tax cuts would you like to see those extended permanently uh at this point if you add and where I'm getting to if you add in a lot of the other tax on tips the no tax on social security add it all in you're you're not going to get anywhere near a balanced budget unless there's some Some Cuts I don't know whether Doge does it what about Medicaid at this

point it's it it is the one I don't know if you want to call it an entitlement but it's been growing outpacing Medicare outp pacing Social Security and it may not be doing what it was designed to do at this point it's doing a lot more at least states have have tried to get it to do a lot more it's any Medicaid cut uh on the table well I I don't I don't know if it has to be a cut but certainly slow down in the increases well slow down in the increases or just looking

at the system and the empowering States we had a Governor's conference two weeks ago at the White House and a lot of the states would prefer to do it themselves and you know I'm sitting in the most prolific State for the Medicaid and it New York Illinois Chicago are are Big Spenders so could more States get more money some states have to rein in the overspending sure what else would would get us anywhere near a balanced budget if we have all these tax cuts that growth if we change the growth trajectory again was telling Andrew

that when I when I was on this side of the wall with CBO I think it doesn't hit anyone like the CBO scoring assumes 1.7 than 1.8% growth linearly so if you hike taxes growth doesn't move if you cut taxes the growth doesn't move so I I think if we the make the current tax regime permanent then we we will grow if if we um deregulate as we're planning to do and if if we reindustrialize is that a precursor for saying we're not going to look at the numbers or you're you're not going to look

at the numbers from from what the CBO says in terms of what the budget's going to look like it may not look balanced according to their numbers but it may be something that you guys say forget it we're not paying attention to well if someone were always wrong would you look at the numbers I mean it it was I I think there were a trillion and a half off in the last scoring yeah when you had your meeting with president zalinski and we've talked about this I don't know whether you're treasury Secretary State I don't

know I think you're a little bit of all those things and um you got Joe it's 100% treasury secretary I know but you were over there and I just want to get a feeling because was that last Friday was that when that the meeting was last Friday yeah it so we there have been disruptions in in maybe the the way we approach global trade and also maybe in what our allies think of this in terms of of security across Europe the Russia Ukraine situation I wanted to get your comments did you think he was going

to sign were you under the impression that when you were there that the deal was done and he was going to sign zinsky zalinski and did you were you treated badly can you give us an idea of of behind the scenes what what happened in that meeting or in Kei yes yeah so I I thought it was very important for uh for me to go to Kei and speak with president zalinski in person in his office uh we had a vigorous discussion for 45 minutes or an hour he did not want to sign the economic

partnership agreement there I explained to him that the purpose of the agreement was to bring the Ukrainian people closer to the US people that we wanted part of President Trump's peace plan was to show no daylight no daylight between Ukraine and the US so he did not want he chose not to sign the deal that day I asked him I said we're going to go out there there are 50 reporters what do you want to say and he said I am going to tell them that I will sign in Munich that he was meeting with

vice president Vance and secretary Rubio he didn't sign the deal in Munich so then the ukrainians requested to come to the White House and wanted to sign the deal and what do you think was going on though in his mind I mean you think he was pushing this out because he thought he could get a better deal he thought was punitive what was he I I I think he has this recursive Loop of the these two word security guarantee security guarantee and the security guarantee is twofold one that as as the US has more of

an economic stake in Ukraine in the success of of the future of Ukraine because I tell you like this deal there is nothing for the us if the Ukrainian economy doesn't succeed so there's an economic an implicit Economic Security guarantee and uh prior to his visit on Friday uh president Trump had hosted president macron of France prime minister stommer of UK these were fantastic meetings the European leadership to the extent they are the European leadership was on board with a plan for the Europeans to provide troops on the ground the security guarantee uh without Americans

the the American troops and the NATO back stop starts at the Polish border and president zalinski kept pushing for this security guarantee but I tell you this was one of the most epic on goals in diplomatic history all he all he had to do come in the White House have a press conference we were having a private lunch if he wanted to try to renegotiate that would have been the place to do it not on worldwide TV and then we were going to go sign the deal and and he says he'll sign it now where

do things stand well he he said he sign two other where things stand there what what's going on behind we're we're going to have to see the sequency sequencing was supposed to be economic deal and then again move the ukrainians closer to the American people get the confidence of the American people that their money is being spent wisely and then go and negotiate in a stronger position with Vladimir Putin so now I think after president zelinsky's performance last Friday we're going to have to see that he is in favor of a peace deal can I

ask you a question just about Russia and we were talking to Michelle Chris cab earlier do you imagine over the next couple of years that American businesses will return to Russia as part of whatever ultimately happens here uh and I again the The Situation's very fluid and everyone is kind of jumping to the next thing that there is definitely a peace deal president Trump wants a peace deal he is working hard and he's acknowledges that you have to speak to both sides and look he he's behind the scenes he is negotiating just as hard with

President Putin but you can't negotiate with him if you don't speak to him given what happened with you in keev and then with what you said was going to happen in Munich I I would think that maybe the president and the vice president that didn't occur in a vacuum what finally happened last Friday I mean they they knew full well what had been what had transpired at that point does that explain maybe how things went sideways so quickly no I I I look I were you treated well in ke I heard it was a dark

room that that he was uh I don't know there was some arrogance that the look I I I think president zalinski understandably is under a lot of pressure a lot of pressure cuz I I I can tell you in in his office the whole building's dark because and there's sandbags in the building because they're afraid of a drone getting in in the building all security yeah so I mean you think you have a lot of Ian Time Square and um but uh he I think has to ackowledge that the security guarantee is coming from the

Europeans have you spoken to him since sorry have you spoken to him since president zalinski when he when he came to the oval sure no I mean have you spoken to him since last Friday the well I I don't speak with president zalinsky and I have not been in touch with my counterpart the Finance Minister 100% treasure I think uh is although you just gave a pretty good all treasury all the time of of of what went on isn't being in business with Ukraine in the mineral business isn't is there an implied security there does

Russia not understand that there's an implied security Arrangement there with the United States Joe so it it's it's not only a mineral deal it's an energy deal and it's an infrastructure deal and my view of what what are the Russians thinking about this is so to get to keave you fly to Poland take a 10-hour Night Train in that 4 hours before I arrived for the first time since November the Russians bomb keep so I believe one person died four were injured including two children and so I believe that that's what the Russians think of

this deal they don't like it yeah let me ask you just a different question maybe this is a political question or philosophical question there there are some critics of what we're doing as it relates to minerals with Ukraine who say you know what uh the work that the US has done with Ukraine was done on behalf of democracy was done as a gift that it wasn't um a quid proquo for some kind of economic situation and it wasn't something um that you know I don't know if I don't know if you believe that the terms

of whatever the deal are too tough on Ukraine but what do you say to those people who say you know what we've gotten a benefit by supporting Ukraine thus far even without genuine economics this way look well I I would tell them to look look at the deal which most people you haven't seen can't see yet and let me tell you what the deal is not it's not one of these rapacious Chinese deals where we come in we we don't have any mineral rights we don't have any this this is an economic development deal so

this is to the extent I I've said a lot I said in my speech at the economic Club of New York yesterday Economic Security is National Security we want to help ukrainians succeed economically you know Poland which sits next door to Ukraine Poland and Ukraine when the Iron Curtain came down had the same size economies Poland is three and a half or four times bigger now and I'll tell you who doesn't like this deal is the Ukrainian oligarchs who tend to have their hand in the tip so you we we want to make sure that

the money goes to the Ukrainian people right you've got to be able to talk about everything Scott okay Bitcoin um The Reserve supposedly there is disappointment that we're not going to be buying Bitcoin outright using taxpayer dollars but if we can do it in a in a revenue neutral way we would uh number one our we were you a proponent for the the the reserve and two is there a way to buy Bitcoin not just acquire it through I don't know however we've gotten these 17 billion dollar worth at this point yeah so Joe I

I am a big proponent of the US taking the worldwide lead in crypto I think we have to bring it onshore and the use our best practices and regulation I think that the Bitcoin Reserve before you can accumulate it you have to stop selling it so what we have now is from a seized asset pool and I I wasn't there when it happened but I I believe what happened was about 500 million of Bitcoin was seized half of it was sold and what we have now that you know say it's over 10 billion 10 12

billion that's all through appreciation so the the first thing to do is to put is to stop the selling so we we are going to you know after the the the victims are paid and all of that we will any seized assets will go into this reserve and then you we'll see what the way forward is for more Acquisitions for the reserves and you know we're starting with Bitcoin but it's an overall crypto Reserve right how so how do you think about buying though and and how should taxpayers think about that because effectively we'll be

Levering ourselves to some degree given that we we don't have a surplus of money right now to make these Investments yeah so that that's why the first step is to stop selling and then we're going to put a plan in place from there so um we're we're having this crypto Summit I I'm going back to Washington uh this afternoon and then we'll talk about the way forward can I just ask you about the IRS it's the largest Bureau of the Treasury Department and Doge has U come up with a plan to cut about half of

the 90,000 workers there about 45,000 president was very clear this week that it's the secretaries who run the Departments not Doge I just wonder if you agree with a cut of that that size particularly when there have been points raised and studies done that suggest that for every dollar that the IRS spends on um enforcement and trying to go after uh bringing in Revenue brings in about $5 to2 yeah I'm not sure where where this cutting half the employees came from what we did was there were 15,000 new employees we did an evaluation we kept

about half the the ones that make you to your point were deemed essential to collections for somehow the other 7,000 United States of America collected taxes for 250 years without them and look this is playoff season for us that game day is April 15th and I I have three priorities with the IRS the collections privacy and customer service in that order so there's nothing nothing I'm going to do to hurt the collections uh over time the we we are in the midst of this great AI boom and you know I think increasing headcount now would

be just the wrong time as the private corporations are moving into Ai and you I I can't think of a better application for AI than audit auditing tax returns how are tax returns this year so far uh we we we don't have the data about the other thing too is when you ask about physical employees 90% % of the filing is now done online yeah I guess we started with tariffs maybe we should we should maybe end with tariffs and there's a piece in the journal today about the president's ability uh constitutionally to Levy tariffs

and that he has invoked some emergency powers in the fentel case to do it but the journal is basically questioning whether if you don't use sentinel as as a as a reason that whether a US president can can unilaterally Levy terrorists do you have a view on that well Joe if you want I could geek out for you so the yeah love GE it's my it's my natural habitat so um we that what what you're seeing now the the the tariffs based on the the fent null at at the border uh is something called aipa

that's an emergency statute but they're 301s or 23 32s there there's a whole range of actions Jameson Greer just came in uh was confirmed last week as USR he has a lot of experience and deep knowledge of the the legalities I am sure that he will be by the book I think that there were 4,000 legal challenges to president Trump's tariffs last time that withstood the test of time so U yes it's not the the administration doesn't have the ability to say Let There Be tariffs but everything we do is based on a specific rule

of law that we will invoke every time you you finished something I'm thinking about something else that I want to ask you I don't know where Alex is but can can I ask can we go a little bit longer fun really all right well the show's over at 9: I don't know whether I I I I I got to get to the crypto China uh would you ever say that that we're ready for a trade War we're ready for any kind of War I I thought that was a little bit strange to hear that coming

from China and I guess where I'm going is in a perfect world if if we could be uh rivals in terms of business with China but but loyal trading partners or at least trading partners it it would benefit both countries does does the president want to get there eventually with China well look I I think he wants to get to fair fair trading and we're a long way off and again I will point to look how he has gotten the Europeans to finally pay their fair share on the global defense budget for the Western Alliance

so can we China needs to rebalance so they have been exporting their economic practices to us can we use tariffs to push back against that and force a or encourage a rebalancing which almost every Economist but believes needs to happen and so the the China relationship is very complicated because in the past our economic Partners our biggest economic Partners were also our allies we are now military Rivals with China and economic Rivals so it's very tough to disaggregate that so are they using their big surpluses to build up for this big military buildup the answer

is yes uh could they uh tone down their military Ambitions maybe but again I like to stay in my economics Lane and there there's a lot to do there in terms of to get to fair trade and again that I I would say that anyone who is commenting on this doesn't understand that the the Surplus country the Surplus country is the one who will see the most problems in a trade War the deficit country will do better I don't know you seem very comfortable talking about security and you and Rubio I think there should be

like a hotline what should what should multinational companies who do business in China think so I know Apple of course is it you know has a lot of business in China uh they've now made a big pledge to do a lot of business in the US uh but does that change the dynamic in terms of will they ultimately get a carve out on tariffs um there's lots of other businesses that that invariably do business in China as well well I I I I know that apple is diversifying their supply chain they made a big push

the in into India we've seen Vietnam pick up as a trading partner so we we are already seeing corporates take action I I'm on the record is saying I think the only good thing to have come out of Co was it was a test run for what could happen if we really got into a deep economic war or the unthinkable happened and we got into a kinetic War so everyone has realized that optimal Supply chains are not reliable Supply chains do you think that uh president she will make a move on on Taiwan I I

asked by the way there was some very interesting comments by Elon Musk earlier this this week where he even seemed to suggest that there was a relationship that you know maybe this would actually happen sooner than later I I follow president Trump's lead and he is confident that President shei will not make that move during his presidency we wanted one more news flash I think we wanted you that that's what we live for thank you for for all the time that uh you gave us today Mr treasury secretary good to see you great to see

you come on back please good look your book Thank you very very much