00:07Let me do just a couple of things for you, then we'll take you for questions.
00:11Because I came out this morning to talk to Maria Bartiromo on Fox Business for
00:18a very specific reason.
00:20There's been a lot of news in the world.
00:22And one of the things that happened this week, which was really important,
00:26that didn't get virtually any ink, was an increase in tariffs on aluminum and
00:32steel from 25% to 50%.
00:36And that's really important for this country because steel and
00:39aluminum are critical to our national security.
00:42And President Trump began the process of reviving those two industries back
00:49in his first term, but Joe Biden let that go by the wayside.
00:54We lost two major smelters in the aluminum industry, which is a lot,
00:59during Biden's regime.
01:02And then the steel industry, we've seen a dramatic fall in its capacity utilization.
01:09Its profitability was negative in the fourth quarter of 2024.
01:15And we can't tolerate the problem that we're facing.
01:19I mean, you may think 50% tariffs is high, but the problem we've been facing is that we
01:25have so much overcapacity of steel in the world because of China.
01:30China is by far the most massive steel producer.
01:35What China has been doing is dumping that steel in the market.
01:38And they do it directly, but they also do it through what's called transshipping.
01:43And if you know this term, it's basically when China uses other countries to ship and avoid
01:51tariffs and things like that into this country.
01:53In this case, one of the worst offenders is Vietnam.
01:57We saw the, and this is like interesting math.
02:02We saw Vietnam's deficit with China go up by about $16 billion last year.
02:11It surged to the highest on record.
02:14And at the same time, its surplus with the United States surged up to $12 billion.
02:22So you can see kind of what's going on.
02:24And if you look at the different products, the rebar, the standard pipe, the oil country
02:30tubular, the good stuff of steel, it's all coming in from Vietnam.
02:35It's coming in also from Korea, Taiwan, Japan.
02:39And so this action by President Trump is really important.
02:44Same thing with aluminum.
02:45We want to get our smelters back.
02:47I think one of the things we've already seen with respect to the aluminum industry is we've
02:53had the announcements of two new smelters.
02:55Great news, Century Aluminum and also a conglomerate from the Emirates.
03:02Okay, that's aluminum steel.
03:04I'm sure you want to talk about the Elon Musk issue.
03:08The only thing I want to talk about with respect to that, and again, I was on FoxBiz and I
03:15even talked to investors.
03:17I did a piece for the Hill this last week, which goes over the following numbers.
03:23What you do is when you look at the big, beautiful tax bill and evaluate the claim by the Congressional
03:33Budget Office that has been widely disseminated by the press that the bill will add to the debt in the order of magnitude of several trillion dollars over the next 10 years.
03:46It's just dead wrong for two reasons, one of which the CBO has already confessed to.
03:53First of all, the CBO assumes a growth rate of 1.7 percent for the GDP, which is absolutely anemic.
04:05When you simply increase that by a point, which is consistent where we think that forecast is going to be,
04:12it's a $2 trillion swing in the amount of revenues you raise because when you grow faster you generate more tax revenues.
04:19It's just simple math.
04:21And lest you think that we're speculating, we have history on our side as we always do because this is the second term.
04:32In the first term the CBO did the same thing during the tax bill of 2017 when we got that tax bill passed.
04:40They underestimated growth by about a point and therefore underestimated how much money we would actually do.
04:50And it's a case of there they go again.
04:53So when you correct for that, you get halfway to the point where this $5 trillion swing happens.
05:01And then, which was really heartening to me, and I don't know if my piece in the Hill had anything to do with it,
05:07pointing out that when you count the tariff revenues, it's another $2 trillion.
05:11So it's a $5 trillion swing.
05:13So with respect to what Mr. Musk has been saying about the big beautiful bill and overspending and things like that,
05:20I think that that dog won't hunt when you do the math properly.
05:25And that's all I want to say about that.
05:29So I'll take a few questions.
05:31Let's keep it.
05:32Here as an economist and an analyst, not, I don't want to do it.
05:39This relates to the economy, but it is related to Elon Musk as well.
05:44I'm curious what you make of Elon Musk's comments that Trump's tariffs will send the U.S. into a recession later this year.
05:52Well, look, Elon Musk does not like tariffs, full stop.
05:59He's made that clear from day one and going back to the first term.
06:04He's not a tariff guy, which is fine.
06:06We can have disagreements about it.
06:08But I would simply say that everybody during our first term who said that the tariffs were going to be recessionary and inflationary were obviously, obviously and widely wrong.
06:24All we got was price stability and growth.
06:27And again, if you do the numbers, if you understand how gross domestic product is calculated, okay, if you've ever gone through that math, it's four inches of growth.
06:39It's consumption, investment, government spending, and what we call net exports, net exports, which is the difference between what we sell to the world and what they sell to us.
06:50And when you have them selling us more than we sell them, in the math of the GDP, growth goes down.
07:00So every quarter, when those numbers get reported, when you see what the net number is, that number would probably be about a point or more higher if we didn't run a trade deficit.
07:13So the idea that these tariffs are somehow going to be recessionary is wrong.
07:20I mean, there's two things going on.
07:23With the tariffs, we make more things here.
07:25We employ more people in the short run.
07:28And in the longer run, we get more capital investment.
07:33And therefore, we employ more people and produce more goods.
07:36So the math doesn't work there.
07:38Given your disagreements on tariffs with the oil that you just laid out, are you glad to see now that these houses are?
07:45No, I'm not glad or whatever.
07:47People come and go from the White House.
07:50We use a special government employee with an expiration date.
07:53I work with the Doge folks a lot here.
07:57And I've got a very special project, which at some point I'll come out here and talk about with them, which has been great.
08:05We've gone into one particular agency and we've taken a computer program that's very important that is run like a 1950s IBM punch card operation at great expense to the American people.
08:22And we're going to turn that from a Model T into a Ferrari.
08:28And it's going to transform a bunch of people's lives and save American taxpayers a lot of money.
08:34So that's good.
08:36Which program is better?
08:37Didn't I just tease you and say I'd be out here again?
08:40I had to try.
08:41Yeah, you had to try.
08:42What's the time?
08:43Stay tuned.
08:44Okay, so do you have a question, ma'am?
08:47Is it falling out that we've seen on social media in those efforts in the future?
08:52No.
08:53Look, waste fraud and abuse, unfortunately, is alive and well in America.
08:58And the Doge folks here, they're good folks.
09:02And when you work with them and bring to them the institutional knowledge of how bureaucracies work and what's important in a bureaucracy and what's not, when you wet that, it's a great thing.
09:15So we're happy.
09:16So I had my piece on Elon.
09:18I'm happy to talk about other things.
09:20But that one's over.
09:21Yes, ma'am.
09:22Can you have a status update on the trade market?
09:24Yes, ma'am.
09:25I never thought you all would ask.
09:27There was a very good phone call yesterday.
09:30It ran about 90 minutes between the two presidents of the greatest economic power in the world, the United States, and one of the two most populous countries in the world.
09:43In China, we've set in motion a process in which, as the President said, Jameson, Howard, and Scott will be going.
09:53That's Secretary of Commerce Lutnik, Secretary of the Treasury Scott Besson, and the United States Trade Rep Jameson Greer.
10:04And there was a clear mandate between and understanding between the two presidents.
10:12And we expected that the meeting will take place within seven days.
10:17And either I or, more likely, Scott Howard Jameson will come out to the sticks and let you know, or the President will let you know about it.
10:28But it was a very good call.
10:30Mr. Navarro, may I ask a question about Europe?
10:32Where did the negotiation with Europe with steel and aluminum stand at the moment, the negotiation after the meeting in Paris?
10:41Sir?
10:42I don't understand.
10:43I don't understand.
10:44We put tariffs on, and the President has a policy of no exemptions, no exclusions, full stop.
10:50Okay?
10:51All right, that's about it.
10:52I think I've been generous.
10:53Just the German Chancellor meeting yesterday.
10:57Oh, I have no comment on that.
10:59It's not my name.
11:00Hey, any time?
11:01Just to, I've come out, maybe a bunch of time.
11:04What does the President mean to Congress about rare earth rules?
11:07What does the President like to see?
11:10Well, let's see what happens with the negotiations.
11:14But the President was very clear that the rare earth issue would be key to that negotiation,
11:20and the two Presidents have a very clear understanding of the outcome.
