John Kennedy Is Stunned By Howard Lutnick’s Answer About Reciprocity And Tariffs

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At today's Senate Appropriations Committee hearing, Sen. John Kennedy (R-LA) had a viral moment grilling Commerce Secretary Howard Lutnick about tariffs and reciprocity.

Transcript

00:00If Vietnam, for example, came to you tomorrow and said, okay, Mr. Secretary, you win.

00:07We're going to remove all tariffs and all trade barriers.

00:15Would the United States please do the same?

00:19Would you accept that deal?

00:20Absolutely not.

00:22Absolutely not.

00:23That would be the silliest thing we could do.

00:25Why is that?

00:26Vietnam has a $125 billion exports to us and imports from us $12.5 million.

00:38And you're thinking, Vietnam exports $125 billion?

00:42I'm aware of the figures, but tell me why.

00:44Where did they get it from?

00:44They buy $90 billion from China, then they mark it up and send it to us.

00:48They're just a pathway of China to us.

00:51You wouldn't accept that deal?

00:53No, it's a terrible deal.

00:54We're the one with money.

00:55We're the one with the store.

00:56Of course they want it to take down.

00:57What's the purpose of reciprocity, then?

01:00Is reciprocity not one of your goals?

01:03Are you telling the president that we shouldn't seek reciprocity?

01:07If that's what you're telling him, why are you trying to do these trade deals?

01:11What do we want?

01:13We want to encourage Vietnam to produce products.

01:16They're great at producing.

01:17But I want to get back to reciprocity.

01:18You just said you don't accept reciprocity as a goal.

01:23What are you negotiating in these trade deals?

01:25But why would we open our bank account and their bank account when ours is $10 billion?

01:29Why are you negotiating trade deals?

01:30You're trying to get other countries to lower their tariffs and trade barriers in return for us lowering ours.

01:37That's true for the things that they'll take from us.

01:41That's called reciprocity.

01:43Of course.

01:44So are you or are you not seeking reciprocity in these trade deals?

01:50We are thinking we are absolutely seeking reciprocity with respect to things that can be reciprocal.

01:55But you just said that if a country came to you and offered you the ultimate reciprocity,

02:05no tariffs, no trade barriers in return for us doing the same, you would reject that.

02:11Of course, because they buy from China and send it to us.

02:14Don't you agree with me?

02:15Suppose they said we won't buy from China.

02:17Now we're talking.

02:18Now we're talking.

02:19If it was Vietnam.

02:21Would you accept that deal?

02:23We would consider it.

02:24For what things?

02:26For products?

02:26What would you want to change?

02:28Well, there are certain products we want to reassure.

02:31We don't want other people making them.

02:33We want to make pharmaceuticals here.

02:35We need to protect ourselves for certain things.

02:37Let me ask you this because I'm going to run out of time.

02:39Are trade deficits, are you advising the president that trade deficits are always bad in every situation?

02:51No.

02:52Okay.

02:52When are trade deficits good?

02:58Trade deficits, for instance, let's say there was a company that had the cure for cancer.

03:03Let's call it cancer cure.

03:06And we were buying it and it was located in another country.

03:08We would obviously have a trade deficit with them because they have the only one of it.

03:15An example, our technology companies, our great technology companies, we're the only ones with it.

03:20So a trade deficit is okay if they're products we really need.

03:25If they're the only ones with it and we can't do it, then of course it's fine.

03:31But if we can do it, then we darn well better think about whether we're supposed to do it.

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