FULL: National Economic Council Director Kevin Hassett Speaks To Jake Tapper About Trump's Tariffs

Summary

In a detailed conversation with Jake Tapper, National Economic Council Director Kevin Hassett discusses the intricacies and rationale behind President Trump's tariff policies. Hassett explains the significance of 232 trade actions as crucial measures to safeguard national security, differentiating between various categories of goods and their importance to U.S. defense systems. Amidst concerns from small businesses about unpredictability due to tariff policies, Hassett assures efforts towards stabilization and highlights the administration’s strategic focus on reducing foreign dependency by encouraging domestic production. Throughout the discussion, Hassett defends the administration's approaches, emphasizing positive impacts on American labor markets despite escalating fears of economic downturns among some observers.

Highlights

• National Economic Council Director Kevin Hassett explains the logic behind Trump's use of 232 tariffs as strategic actions against potential national security threats. 🔍
• Rising concerns from small businesses about unpredictable tariffs are met with Hassett’s assurance of a ‘two-minute offense’ strategy by the administration to stabilize the situation. 📈
• President Trump is described as setting straightforward policymaking pathways, which Hassett and his team are tasked with executing effectively. 🗺️
• Hassett expresses optimism about reshoring efforts and the beneficial impact of tariffs on U.S. manufacturing and labor markets. 💪
• Emphasis is placed on the perception that these strategies will lead to a rise in American wages and increased domestic job creation. 💵
• Complex negotiations with over 130 countries are part of the administration's broader strategy to secure fair trade deals benefiting the U.S. 🌐
• Hassett suggests that the fear of a recession is not supported by 'hard data' such as job creation, but rather by 'soft data' perspectives and sentiments. 📉

Key Takeaways

• Trump's tariff policies aim to address national security threats by implementing strategic trade actions known as 232s. 🛡️
• Concerns from small businesses regarding the unpredictability of tariffs are acknowledged, yet efforts are in place to stabilize and reassure stability in the business environment. 📊
• Hassett emphasizes the administration's aggressive efforts in reshoring manufacturing and decreasing U.S. dependence on foreign goods. 🇺🇸
• The conversation underlines the administration's view that the policies will ultimately benefit U.S. labor markets, despite some fears of economic instability. 💼
• Ongoing negotiations with multiple countries show positive momentum in adjusting tariff rates, although the process remains complex and time-consuming. 🌍

Overview

In a candid discussion hosted by Jake Tapper, National Economic Council Director Kevin Hassett sheds light on the Trump administration’s rationale behind its controversial tariff policies. At the heart of the strategy lies the concept of 232 trade actions, designed to protect U.S. national security by imposing tariffs on imported goods deemed crucial for defense and safety. Hassett clarifies these moves are not whims but are calculated actions to enhance national resilience.

As small business owners express concerns over the unpredictability and impact of fluctuating tariffs, Hassett advocates for the administration's current strategies. He likens their approach to a fast-paced ‘two-minute offense’ in football, aiming to rapidly navigate and stabilize domestic and international economic terrain. Efforts to reduce dependency on foreign manufacturing are highlighted as central goals of these policies, intending to boost American production and labor.

Despite fears of impending economic downturns, Hassett stands firm in his optimism about the robust job market and projected wage growth. He argues that the administration’s steps are beneficial for U.S. workers and industries, even amidst ongoing international negotiations. Hassett emphasizes that while the fears reflected in survey data indicate anxiety, the ‘hard data’—especially in job creation—paints a promising picture of economic resilience and growth.

Chapters

• 00:00 - 01:00: Introduction and Market Analysis The chapter titled 'Introduction and Market Analysis' features a discussion with Kevin Hasset from the White House National Economic Council. The conversation centers around recent economic events where the global market experienced significant volatility, with trillions lost and only partially recovered in stock value. There is a notable plunge in the strength of the dollar, and consumer sentiment has hit lows comparable to the Great Recession. The White House claims these developments are part of a strategic economic plan, although the specifics of the trade plan are not detailed in the transcript.
• 01:00 - 02:30: Explanation of 232s and Trade Actions The chapter discusses 232s, a trade action used by the United States government when something poses a serious threat to national security. An example given is the hypothetical scenario of needing to buy cannonballs from an adversary to protect the nation with cannons.
• 02:30 - 04:30: Trade Policy and National Security In this chapter, the discussion revolves around the role of trade policy in national security, specifically focusing on Section 232 tariffs. The example given involves imposing a tariff on cannonballs to incentivize domestic production, ensuring that in times of conflict, the country would be self-sufficient in its protective needs. It highlights how certain critical components, like semiconductors, linked to defense equipment, could be subjects of Section 232 investigations to determine their security implications while being exempt from new trade actions. This underscores the careful study necessary in deciding what should fall under such tariffs to balance both trade and national security interests.
• 04:30 - 08:00: Small Business Concerns and Trade Negotiations The chapter discusses the implications of trade negotiations on small businesses, with a focus on the strategic importance of onshoring to protect national interests. Semiconductors are highlighted as a critical component, exempt from certain trade actions due to an executive order addressing their import and export. The discussion suggests media coverage has often been superficial, missing the nuanced logic of these negotiations, which the chapter aims to elaborate on through in-depth analysis.
• 08:00 - 09:30: Role of the National Economic Council The chapter titled 'Role of the National Economic Council' discusses the perceived urgency and reasons behind addressing the increasing influence of China on the national security and economic sectors of the United States. Over the past four years, Chinese influence has expanded significantly, impacting even critical areas such as weapon systems. The chapter highlights President Trump's concerns and his stance on the need to tackle these issues effectively.
• 09:30 - 13:30: Tariff Exemptions and National Security The chapter discusses President Trump's announcement regarding tariffs and his firm stance on maintaining them. However, shortly after, he issued a 90-day pause on most tariffs, citing concerns from bond markets. The narrative includes feedback from a small business owner on CNN about the impact of these changes.
• 13:30 - 16:30: Economic Impact and Wage Growth The chapter discusses the challenges faced by small businesses due to economic uncertainty and unpredictable changes in tariffs. Sarah Wells, a small business owner, shares her experience of facing difficulties in making long-term business decisions. The chapter also touches on the impacts of such economic whiplash on wage growth and the broader economy.
• 16:30 - 19:00: Conclusion and Economic Outlook The chapter discusses the current state of the country, countering the notion that it is run by capricious whim. Instead, it likens the previous administration's approach to 'running out the clock,' whereas the Trump administration is described as employing a 'two-minute offense.' This illustrates a sense of urgency and proactive measures in policy areas like tax relief and deregulation, highlighted by the swift passage of a reconciliation bill to achieve these goals.

FULL: National Economic Council Director Kevin Hassett Speaks To Jake Tapper About Trump's Tariffs Transcription

• 00:00 - 00:30 white House National Economic Council Director Kevin Hasset Kevin good to see you again So hey Jake Good The White House says everything that happened over the last week and a half went according to plan Over the course of just a few days the global market lost trillions in stock value Regained some of it but not all of it The strength of the dollar right now is plunging Consumer sentiment is worse than at any time during the Great Recession Is all of this part of the plan right In fact let's talk about what the trade plan is because I think that it's very very important for people to understand you know why we're doing
• 00:30 - 01:00 what we're doing and how we got to the point where this is the right strategy The bottom line is that uh in the United States there are these things called 232s You've heard people talk about it It's a trade action where uh the government decides that there's something that's a serious threat to national security if we don't do something about it And so an example just hypothetical would be suppose that in order to protect ourselves from an adversary we had cannons but we had to buy the cannonballs from them Well then
• 01:00 - 01:30 you could put a 232 tariff on the cannonball Uh and then we'd have to make it here and then that would make it so that if we ever did have a situation where we're in conflict that we'd had everything we need to protect ourselves And so the 232 things were always uh excluded They weren't covered by the new actions that you discussed at the opening And so it's not like so for example semiconductors are the key important uh part of a lot of defense equipment and there's going to be a semiconductor 232 that studies those things carefully and decides what it has
• 01:30 - 02:00 to what has to be onshored in order to protect America And so it was always the case in annex 2 in the reciprocal act that semiconductors were going to not be covered by that action because there's a 232 action that was announced in in the uh executive order uh that is going to address it And so and so I don't think that the anything really should be a surprise if people stopped and studied But it seems like a lot of the coverage people are going to rush to get the coverage out and didn't really think through the the logic of it Which is why we have a a longer form show with you
• 02:00 - 02:30 here right Jake where we can talk about what what exactly is going on And then uh finally why is it that people think that there is an emergency about this well it's because especially over the last four years uh the the influence of China into every little corner of our country has just gotten bigger and bigger and bigger And so it actually is the case that it's a very uncomfortable amount of Chinese uh input in our actual weapon systems Jake in our actual weapon systems And so President Trump thinks it's urgent that we address these matters Okay let's talk about the uh
• 02:30 - 03:00 overall investment environment Nine days ago President Trump announced uh to the whole world that those were the rules for doing business in America going forward The tariffs were here to stay His policies were not going to change I'm just quoting him from his from his uh truth social messages And then of course on Wednesday he issued this 90-day pause on most of the tariffs And in his own words it was because the bond markets were getting queasy and yippy So here's what one small business owner told CNN about the impact that this
• 03:00 - 03:30 whiplash is having on her A pause is better than no pause But the uncertainty is still really chaotic for a small business like me And now even if I move out of China how am I going to be certain that if I place an order today I won't find a new tariff tomorrow this up and down is just something as a small business I I can't pivot to So that's Sarah Wells from Sarah Wells Bags Well what do you say to small business owners or even big business owners who say they're having difficulty making long-term business decisions because the
• 03:30 - 04:00 country seems right now to be run by capricious whim Oh I don't think at all it's run by capricious whim The the way that I would think about it is that in the previous administration you can sort of say uh if you're thinking about it in a football analogy is that they were running out the clock And that what's going on now in the Trump administration is across a wide array of policy areas Uh we're in a two-minute offense And the two-minute offense is pushing as you've seen the reconciliation bill through so that we get tax relief for American people uh deregulation and of course
• 04:00 - 04:30 trade policy Now on the trade policy the whole point of the trade policy is to address the national emergency that we're too dependent on uh foreign products uh in the US especially if we were at a time of conflict And we're doing something about that And the reciprocal act was basically guys if you come to the table and negotiate us with us and treat us the same way we treat you then we'll you know get your rate really low And so right now 130 countries 130 countries have responded
• 04:30 - 05:00 and we're negotiating with them and they've got their rate down to 10% And so really it's it's kind of almost a two- world system There's there's a process about China and and that's very very naent if at all and then the process for everybody else So the process for everybody else is orderly It's clear People are coming uh to town with great great uh offers We've got Japan Korea India I was just talking to the uh foreign minister of India and everything is moving forward very quickly and so I guess that the bottom
• 05:00 - 05:30 line is that that the the small business owner has experienced over the last few weeks the the start of a process that's settling down really quite quickly Again 130 countries are at 10% now So let's talk about these 130 countries because as you know better than I do uh it typically typically takes months if not years to negotiate trade deals um Trump's signature trade deal from his first term a great achievement according to both Democrats and Republicans a NAFTA 2 or the US MCA that took 15 months to put together How exactly are
• 05:30 - 06:00 you and your team and the USR team how are you going to negotiate deals that actually deliver for the American people with more than 100 countries in less than three months oh yeah You know first of all uh I I just a little bit of more clarification One of the things I like to ask people is who's the chairman of the National Economic Council and then everybody think "Oh it's you Kevin." Well no I'm I'm the director The chairman of the National Economic Council is President Trump And so what President Trump does is he sets out a
• 06:00 - 06:30 path for everybody for for Howard Lutnick and Scott Bessett and and for Jameson on how they would move forward on a particular policy matter And then it's my job as director to make sure that the president's wishes are being fulfilled I'm kind of there to help everybody succeed And I can tell you I've been watching the people who are assigned to different assignments working really really hard on getting trade deals forward over the last uh many weeks And so one of the things that we were thinking about this week was that we had a few of these deals that are so close to baked that we could
• 06:30 - 07:00 announce that we have a deal in principle You're right that getting the fine print out would maybe take a little longer but we were thinking about announcing a deal in principle even this week But then we were making so much progress so rapidly that the president decided to instead instead of having one or two things right now just go for the 10% pause and I think it was the right answer uh given the massive amount of momentum that we've been seeing Yeah So let's talk about uh Lutnik and Jameson Greer because last Sunday the Secretary of Commerce Howard Lutnik was on a
• 07:00 - 07:30 different show He was talking about tariffs um and he was saying that these that what these are going to do is going to it's going to bring iPhone manufacturing to the United States 5 days ago US Trade Representative uh Jameson Greer told senators quote "The president has been clear with me and with others that he does not intend to have exclusions and exemptions," unquote to these tariffs Uh but now we know about these carveouts for electronics imported to the US that we talked about you talked about at the top uh smartphones computers chips It's it's a
• 07:30 - 08:00 contradictory message I mean I understand that you're saying that this was the plan but Lutnik it seems like nobody told Lutnik and Greer No no I I disagree with that I think that absolutely the the characterization that I gave you at the top of the hour is the thing that everybody understood all along But it I could see that when you're getting interviewed here interviewed there and that that somehow like not having the time like you and I have now to show the big picture can make it so that people don't have a complete picture of what's going on in
• 08:00 - 08:30 Senate Think about it this way No but but but think about this way again that there are these 232s uh which are coming that are announced in the reciprocal trade act and the things that are going to be in the 232s like the cannonballs that we need so that we can have something to put in the cannon Those things are in progress and while those are in progress these uh say 10% on most of the world tariffs will not apply to those things And so then there's a question an interpretation what you say okay if you're not applying a semiconductor to those things then what
• 08:30 - 09:00 does that exactly mean because the US doesn't really import a whole lot of just semiconductors the semiconductors are in things and it's very very natural for the commerce department and I think that the secretary of commerce Howard Lutnik is one of the the best cover secretaries I've ever worked with uh that that he have his team go through and say well what does it mean uh to comply with this order and that's what came out I don't think that it was rushed or disorganized at These exemptions are only for items that will help our defense department needs It's
• 09:00 - 09:30 not iPhones in general It's not semiconductors in general for commercial use The there there's a long list uh which you could put a put a graphic up of the things that are uh that we're planning 232 actions on because they're necessary for national security And those things that are on that long list are things that will uh be exempt until those 232s happen But you understand how some people might look at this and say this doesn't really make sense in terms of the president's larger goal if the President Trump and and and you and your
• 09:30 - 10:00 team are all trying to reshore manufacturing so that American manufacturing for phones and computers uh is happening here in the United States and along with all these great middle class uh jobs that would go with it that you're exempting those items while at the same time the reshoring and manufacturing of of the man of the production of sneakers and t-shirts uh would happen here And that seems to be completely the opposite of the goal
• 10:00 - 10:30 right that's just a perspective If you think that we're going to fail to deliver on the 232s then your question would be you one to wonder about But the 232s will be successful We've already got 232 on steel and aluminum for example and so that would be covered by the reciprocal part And and we've got 232 on autos that's not covered by the reciprocal part So those other things are going to happen and it makes a great deal of sense So the the one final thing I want to say is going back to like why are we doing this in the first place
• 10:30 - 11:00 there's the national security matter but there's also what what it means for the American worker And so when we look at say the small business person who's concerned that the price of their goods is going to be higher uh when they sell it to their customers the thing that they also have to remember is that these policies which the president successfully enacted in the first term are going to increase the demand for labor increase wages up by almost $6,500 in the first three ter three years of the Trump administration And so what it means is that even if you accept the naysayers's perspective on what might
• 11:00 - 11:30 happen to the price of a cup of coffee that the person walking into the coffee shop is going to have a lot more money In the 15 years after China entered the WTO real wages went down So wages went down by more than prices as we thought these cheap goods were going to revolutionize America In fact it was the opposite Welfare went down We had Angus Eaton write a whole book about the deaths of despair that were related to this And so I think we're very optimistic about the fact that people are going to have more money in their pockets and that they're going to have a higher standard of living Well right now I mean wealth has disappeared uh from
• 11:30 - 12:00 the market and as you know the fears of a global recession or a United States recession have increased even among uh business supporters business leaders who support President Trump Well what you're seeing is that the survey data is uh what we call is soft data The survey data has been showing that people are anxious about the changes a little bit But the hard data have been really really strong as you know Uh in fact if you look at the latest jobs report it was way way above even what I expected And so what's happening is that people are racing to
• 12:00 - 12:30 create jobs and to make stuff here in the US If they make it in the US they're not going to pay any tariff And there's an explosion in the labor market This really surprised me Right And and so you can't have a lot of new employment and then have like a recession It's just but you know the jobs the jobs data was from before the liberation day I mean there's before all these uh global well not not all those but but but also uh it was clear I think that the jobs data were anticipation of something happening something big that would be only
• 12:30 - 13:00 rational for firms to think that way All right Kevin Hassa thank you so much for your time this morning Really appreciate it project