JD Vance Discusses Trump Administration Vision For 'Rebalancing The Global Economy Vis-A-Vis China'

Forbes Breaking News

In remarks at a Munich Security Conference event in Washington, D.C., on Monday Vice President JD Vance discussed rebalancing the global economy and trade with China.

Transcript

00:00Great, thank you very much.

00:02If I can just offer two footnotes to that.

00:06I think for us, Europeans living as neighbors of Ukraine,

00:12and if you wish also as neighbors of Russia,

00:16we have begun to understand that what we're looking at here

00:20is not just the defensive war by Ukraine against the Russian aggression,

00:26it is also a confrontation that puts at risk all of European security.

00:34In other words, it's indirectly our defense also.

00:39It's not just Ukraine.

00:41And this is why we're so desperately interested in seeing that this comes to an end,

00:47hopefully, and I think the real trick for negotiations and for a conclusion of this

00:52is going to be that it's going to be lasting and not broken in the next three, six, or nine months again.

01:01Let me, Mr. Vice President, since we have so little time, there are so many issues.

01:06If you allow, let me turn to another issue, China.

01:11That's a key, as we understand, a key challenge for the United States, for your foreign policy.

01:19It's also of tremendous interest for us in Europe.

01:23So the United States has defined China as the key strategic challenge going forward for coming probably many years.

01:34This has also been the justification, the reasoning, when American staff members of yours tell us

01:45the United States must be much more present in Asia

01:49and will therefore need to reduce their presence, their strength, et cetera, in Europe.

01:57But now there are some signals in the media that you, that the United States government,

02:04that the White House might actually be interested in a strategic deal with China,

02:09maybe even including on Taiwan.

02:12Could you talk a little bit about the China strategy of the Trump administration?

02:17Yeah, so I haven't seen those reports that you mentioned, a strategic deal on Taiwan,

02:21so I wouldn't speak to that.

02:23I certainly would say that there has been no conversation between our governments about a strategic deal

02:28on that particular question.

02:30What we have talked about, of course, is that we cannot absorb the producer surplus of the entire world.

02:37That has been the role of the American economy for the past 30 years.

02:41In some cases, vis-a-vis Europe, and by the way, we don't blame, for example, the Germans

02:45for pursuing a policy that makes their exporters strong.

02:48We just wish that American leadership had pursued a policy that made our exporters strong,

02:52because now we find ourselves in a very precarious place.

02:56When I say we, I mean the entire West.

02:58I mean the NATO alliance.

02:59I mean the United States and Europe, which is that we become, in a world of hyper-complicated,

03:05hyper-globalized supply chains, we find ourselves more and more reliant on countries

03:12that may not have our best interests at heart.

03:13And even if they're halfway decent trading partners, it's still a little bit risky to put all of your eggs

03:19in one proverbial basket economically.

03:22And what the president has said is we must rebalance the global economy vis-a-vis China.

03:27We cannot absorb hundreds of billions of dollars, close to a trillion dollars per year,

03:35an annual surplus, most of it coming from the People's Republic of China.

03:39And what that's going to mean in the rebalancing is that we think that the PRC

03:44is going to have to frankly let their own population consume a little bit more.

03:49They've held consumption levels down in order to increase these massive exports.

03:54It means that American manufacturers are going to have to be treated more fairly

03:57in some of these global trade deals.

03:59It means we're going to have to cut some new trade deals with some of our friends in Europe,

04:03but also with some of our more adversarial nations.

04:06But that also, you know, we have to be careful here because while we want to rebalance global trade,

04:13and that has certainly been the explicit goal of our policy,

04:16we also want to make sure that we do this in the right way.

04:19And yes, you've seen media reports that the Chinese reached out to the United States.

04:24Of course we're going to sit down and talk to them.

04:26I'm not going to divulge too many details or prejudge the negotiations,

04:30but we want to rebalance trade in the interests of American workers,

04:34in the interests of American manufacturers.

04:36That is our policy.

04:38We think that we can do that while preserving at least an open dialogue with the PRC

04:43and with a lot of other nations all over the world,

04:46but that doesn't mean the old way of doing business is going to be stable

04:50or that it's going to persist.

04:52It simply cannot.

04:53It was not sustainable 10 years ago.

04:56It was certainly not sustainable four years ago,

04:58and we're very, very committed to changing it.

05:00But we're open to having conversations with both, again,

05:03our friends and more adversarial nations about what that rebalancing ultimately looks like.

05:08And people have to remember, you know, Liberation Day,

05:11which was where the president announced this fundamental change,

05:16I think, in the global trading system,

05:17that was almost exactly 30 days ago.

05:20So we are in the early innings of a very significant shift.

05:24I think that shift is going to really inure to the benefit of both the United States

05:29but also of Europe.

05:30But it's fundamentally it has to happen,

05:33and it's going to happen under President Trump's leadership.

05:36All right.

05:38I think it's great if there are beginning discussions between you and the Chinese.

05:44Could you expand a little more on what would your expectations be

05:51for an EU-US successful discussion of these trade issues?

05:58Is there any message that we can take home to our friends in Brussels?

06:03Because that's also, from our point of view, obviously a very urgent issue.

06:07Yeah, so to put it very simply,

06:11and we've obviously had great conversations with a lot of our European friends

06:15at the very senior levels between, you know, the president and heads of state,

06:19between me and officials in European governments,

06:22but also with trade representatives

06:24and also the very nitty-gritty technical details of a trade agreement.

06:28So these conversations are ongoing.

06:30But I'll throw a few general principles out there.

06:32I think the first is that, again, America wants its exporters

06:37and, by implication, its workers to be treated much more fairly.

06:41We want American markets, sorry, excuse me,

06:44in the same way that American markets have been open to a lot of European goods,

06:48we'd like a lot of European markets to be open to American goods.

06:51Now, there's an agriculture component to that.

06:53There's a value-added manufacturing component to that.

06:56We think that we have, in both the software

06:58but also the more harder technology side,

07:00we have some great defense technology firms

07:03where, on the one hand, we have our European friends saying,

07:08we want to actually build up our defense,

07:10we want to do more burden sharing,

07:12but on the other hand, it seems like some of our European friends

07:16are less open for business

07:17if the people selling software and hardware are American firms.

07:21Well, we think that's inconsistent.

07:23We think that we have some of the best military hardware and software in the world,

07:26and we think part of being good allies is, yes,

07:29we obviously want the Europeans to take a bigger role in the continental defense,

07:33but we also think that there are a lot of great American companies that they can work with,

07:37and so, again, this doesn't have to be a zero-sum dynamic.

07:40This can be a very synergistic relationship,

07:42but the fundamental principle is we think that most nations,

07:46most nations in the world have been way too hard on American exporters and American firms.

07:52We want to make the entire world a little bit more open to the products built by American workers.

07:57We're obviously biased.

07:58We think that they're the best in the world,

08:00and we think that we can have a much better trading relationship

08:03with a lot of our European friends

08:06if they just drop some of those both tariff but also non-tariff trade barriers.

08:11There are regulatory barriers.

08:13Sometimes you have an official at the Ministry of Defense

08:16completely disconnected, as far as we can tell,

08:19from an actual law or regulation who will just say,

08:22we're not buying American products.

08:24Sometimes you have officials in Europe who will say,

08:27well, we're going to penalize American technology firms

08:30in a way that we would never penalize European technology firms.

08:33We just want a little bit more fairness,

08:35or, to use the president's favorite word, reciprocity.

08:38And again, with Europe, we think that's a very, very easy conversation to have.

08:43We hope our European friends agree.

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