Mnuchin Talks Tariffs And Gary Cohn

Please see below for the transcript to Treasury Secretary Steven Mnuchin’s interview with Maria Bartiromo that aired live this morning on FOX Business Network’s Mornings with Maria (weekdays, 6-9AM/ET).
MARIA BARTIROMO, FOX BUSINESS NETWORK ANCHOR: Our top story this morning, the fallout from the latest White House shakeup. Gary Cohn, the top economic adviser to President Trump, announced he will resign. Yesterday, Cohn’s exit from the White House comes after he was unable to persuade President Trump to forego plans to implement tariffs on steel and aluminum imports.
Joining me now in a Fox Business exclusive is Treasury Secretary Steven Mnuchin.
Secretary, it’s good to see you this morning. Thanks so much for joining us.
STEVEN MNUCHIN, TREASURY SECRETARY: Hi, Maria. Great to be with you. Thank you.
BARTIROMO: What — what happened with Gary Cohn?
MNUCHIN: Maria, first of all, I’ve known Gary for a long time. He has been a terrific partner in working here on tax reform and other things.
As you know, there was a lot of speculation after tax reform whether he’d say or not and Gary decided to — to move on.
But we have a terrific economic team here. And we’re going to consistently execute the president’s strategy.
BARTIROMO: Let me ask you about that strategy, because, obviously, this idea about tariffs has created a lot of upset. There’s a split between the president and leaders on Capitol Hill. There’s a split between the president and “The Wall Street Journal” op-ed, CEOs across country.
Have you had conversations with Republican lawmakers who are also pushing back on this idea?
MNUCHIN: Maria, I’ve had — I’ve had lots of conversations. And this is nothing new. So let me just say, from day one, going back to the campaign, the president’s been very consistent. His number one objective is economic growth. We’ve talked about tax reform, regulatory relief and trade. These are all issues we’ve talked consistently about.
MNUCHIN: So, first —
MNUCHIN: First we executed on tax reform and regulatory relief. We’re focused on renegotiating trade deals. The secretary of commerce, who I’ve worked with for a long time, he delivered the 232. This is nothing new, Maria. So this is — this is part of a focused strategy and the president is delivering for the economy.
BARTIROMO: It’s interesting that you mentioned — I’m glad you brought up 232, because this 232 notion that this is a national security risk is one of the reasons that people are questioning, actually, because after the president said that this was a national security risk, he tweeting out that Canada and Mexico will not get subject to these tariffs if, in fact, we get a good NAFTA deal. So is this national security or is this just sort of playing poker on NAFTA?
MNUCHIN: No, it is national security, but Canada is a very important national security partner with us. We have good two-way trade on steel with them. I — the president has spoken to Trudeau. I spoke to Bill Morneau yesterday, the finance minister, and we’re cautiously optimistic on NAFTA. This is part of those discussions. But assuming we get the new NAFTA deal done, they will be exempted.
BARTIROMO: Has anything changed in terms of their positioning as a result of this tactic, as a result of instituting or announcing an instituting of these tariffs?
MNUCHIN: I don’t know if anything’s changed or not changed. But what I would say is, it’s — it’s a priority of ours. The president, again, going back to the campaign, has been very clear. NAFTA’s an old deal. He wants to renegotiate that deal. We’re in the midst of renegotiating it. Ambassador Lighthizer just got back from Mexico as part of those negotiations. And these — these are all part of our overall economic strategy.
You know, there’s a feeling that, on the one hand, the president is right, $800 billion in a trade deficit and then losses year-over-year that the — that the U.S. is constantly on the losing end of a trade deal is — is — is an issue for sure. But is there another way to get a better trade situation away from these tariffs, 25 percent tariff on steel, because even Republicans in the — in Congress will say maybe there’s a better way to do it, a more surgical way to do it? Is there a different solution here away from these tariffs?
MNUCHIN: Well, again, I think you’re talking about different issues. So on trade overall, again, we have a very clear strategy on renegotiating. This is about making sure that American companies have a level playing field. So we’ve talked very specifically about China. Last week I had very direct discussions with my counterpart on Chinese trade. The president just discussed this with President Xi. And we’re determined to make sure that we have reciprocal trade with China.
BARTIROMO: If this is about China, secretary, why not just do something specifically with China? Why a tax, a tariff, on all makers of aluminum, all makers of steel coming into the country? Why not just deal specifically with China?
MNUCHIN: Because — again, we’ll do that as well. But as it relates to the steel, OK, the president is determined that we maintain the steel industry. This is not new. Other presidents have done similar types of things. So let me just remind you, this is not the first time this has ever been done. And we’ve done a careful analysis and looking at this. And as I said, we have a mechanism to carve out countries. We’ll consider these things. And, you know, this is — we’re moving forward with the ability to do this on steel and aluminum and move forward with our strategy.
BARTIROMO: Do you worry that while you’re trying to protect the hundreds of thousands of jobs in the steel industry, you’re threatening millions of jobs in other industries? So you’ve got a steel industry that you’re talking about, what, 600,000 jobs or 650,000 jobs, but you’re talking about 6.5 million jobs of those companies that are actually importing steel, importing aluminum. Their costs will go up.
MNUCHIN: Maria, I can assure you, the president is very focused on jobs. As you know, it’s his number one priority. The president is not going to do anything that creates job loss in these other areas.
Again, we have a — a thought-out process. This is something we’ve been talking about for a long period of time. And, again, it’s just part of the overall economic plan. So we’re comfortable with the economic impact and we’re going to be careful. Again, there’s — there’s a process, whether it’s specific steel that we need, that there will be a process to exempt certain things that we can’t make here. Again, we’re going to be very focused on the impact on jobs.
BARTIROMO: What is the impact on growth, secretary? I know that your priority has been jobs and economic growth. But if you actually see these tariffs take away from that growth, was it worth it?
MNUCHIN: Again, Maria, I — we are very focused. I think we’ve talked about 3 percent sustained economic growth. Last year there were a lot of people who said that would never be achievable. We’ve had two quarters so far of above 3 percent.
I can tell you, the president couldn’t be more focused on growth. That’s the number one area of focus.
BARTIROMO: So what you’re saying is, these tariffs will not impact economic growth?
MNUCHIN: We’re comfortable that we’re going to manage through this so it is not detrimental to our growth projections.
BARTIROMO: You know, people are questioning whether or not having a trade deficit is just sort of the way of the world when you’re growing. I mean what’s more important, economic growth or a trade deficit — or having a trade surplus? If you have a trade deficit and that’s impacting growth, does the trade deficit become less important?
MNUCHIN: Maria, I think — I think they’re different issues. So, again, if you go back to the president believes in free trade more than anybody else. And when he talks about free trade, he wants reciprocal and fair trade. So where we have issues — and a big reason why we have trade deficits is because we don’t have reciprocal trade. So, again, we want our markets to be the same with China as their markets. And the president — and China is, obviously, our largest portion of the trade deficit, and the president is very focused on making sure American companies are treated fairly. That’s what this is all about, free trade will lead to smaller trade deficits.
BARTIROMO: Secretary, let me ask you about the retaliatory issue here, because a lot of people are worried about the Europeans instituting a 25 percent tariff on U.S. exports. Is that happening?
MNUCHIN: Again, I haven’t had any direct discussions with my European counterparts, so I can’t component on that. As I said, I have had conversations with Canada, where we do have good two-way trade of steel. That’s something that we’ve talked about. And, again, we’re cautiously optimistic on NAFTA. That’s a big focus of Ambassador Lighthizer’s and he’s doing a great job in those negotiations.
BARTIROMO: But would you expect the president to ease up on this should we see a 25 percent tariff coming out of Europe?
BARTIROMO: This is the report right now. You saw the story, that the Europeans are threatening that they’re going to put a 25 percent tariff on U.S. goods if the president goes through with this.
MNUCHIN: Maria, look, we’re negotiating deals. And, again, we have to stand up for American companies and American workers. And we’re going to do that in a way that’s prudent and good for the economy. That’s what we’re focused on, Maria.
And I think you should look at, this administration has already delivered on substantial economic items. People said we’d never get tax reform done. It took 30 years. We got tax reform done. So we’re now focused on trade deals. And I’m confident the president’s a great negotiating and I’m confident that we’re going to end up with deals that are better for American companies and American workers.
BARTIROMO: Well, I’m glad you said it that way, this is a negotiations, because we’ve got a couple of weeks here. The deadline in terms of instituting these things aren’t until April. Do you think the president is, in fact, this is just a negotiating tactic. Maybe he’s not going to end up with a 25 percent tariff on steel and 10 percent on aluminum?
MNUCHIN: No, we are — we are definitely going to end up with these tariffs and we’re going to roll this out very, very quickly. But, again, there will be a mechanism where, to the extent that the president wants to give waivers, the president can do that.
BARTIROMO: But, you know, you’re —
MNUCHIN: But, again, we are moving forward with these tariffs and that’s the plan.
BARTIROMO: Even though there’s this concern over a trade war? “The Wall Street Journal” the other day called it the biggest mistake of the president’s presidency in terms of his economic plan. Companies are trying to urge you to change this because this could lead to a trade war. I mean what do you have to say to those companies that feel that this is going in the wrong direction, creating a protectionist view of America?
MNUCHIN: Maria, I have a lot of respect for “The Wall Street Journal,” but I don’t always agree with every signage one of their editorials. And, again, what I’d just say here is, the president understands the economy. He understands business. He’s literally met with thousands of business leaders since he’s been here and on the campaign. And he’s very focused.
But, again, he is looking out for American companies and American workers with trade deals that are just not fair. And he’s not afraid to get into a trade war, although that’s not what we want. Let’s be very clear, we’re not looking into getting into trade wars. We’re just looking for free and fair sand reciprocal trade.
BARTIROMO: Where are other holes in terms of fair reciprocal trade? What can we expect in terms of other tariffs away from aluminum and steel? Is that on the table, other tariffs on other products?
MNUCHIN: Well, Maria, you know, our focus right now, as we’ve talked about, is this 232, OK? We’re also in very direct discussions with China about trade there. As you know, we’re very focused on NAFTA, OK? The president is focused on chorus (ph). These are the trade priorities at the moment and we’re working very closely. Ambassador Lighthizer, myself, Secretary Ross, the whole team is working very closely together on executing the president’s strategy.
BARTIROMO: Does the president want to hear another view? I mean Gary Cohn sort of represented a different view, I think, than some of the insiders in his administration. Looking to who might take Gary Cohn’s place, does he want someone with that kind of outside thinking to push him on different ideas, like a Larry Kudlow, for example?
MNUCHIN: I’m not going to speculate on who he’s going to choose. But what I’d say is, and the president said this yesterday, he likes different views. He listens to different views. As you know, I’ve known him for a long time. I’ve worked with him since the campaign. I’ve never been shy or bashful about giving him my views.
MNUCHIN: But the president is the president, and he has a laid out economic strategy and whoever’s on the team, we’re focused on what the president’s economic agenda. And I go back to, again —
MNUCHIN: Tax reform, regulatory relief and trade. And the president has delivered. So whether —
BARTIROMO: Yes, I understand that. And you’re right —
MNUCHIN: Whether, you know —
BARTIROMO The president has delivered. And, you know, when you look at the impact of the tax plan and the — and the regulatory rollback, people are just wondering, OK, we don’t want that to change. Even the supporters of those plans are worried that new tariffs take away some of that growth that you’ve been able to spark.
MNUCHIN: I wouldn’t underestimate the president’s ability to renegotiate trade deals and his determination to do that.
MNUCHIN: And just as we were as determined to get tax reform done —
MNUCHIN: Which was 30 years, we’re going to change the landscape so we have free and fair trade.
BARTIROMO: Real quick, secretary, before you go, I’ve got to ask you about these sanctions on North Korea.
Now we hear that the hermit kingdom is allegedly going to be open talking to the United States. They are open to talking to the South. Why institute new sanctions on North Korea now?
MNUCHIN: Well, Maria, as I’ve said before, we believe that sanctions work. They worked in Iran. They’ve worked in North Korea. In my mind, one of the major reasons why they’re coming to the table is because of the economic sanctions. And we’re not going to change those sanctions. We will continue to put sanctions in place until they agree to fully denuclearizing the peninsula. It’s something that we can hold them accountable for and verify.
BARTIROMO: Do you believe Kim Jong-un, that he’s going to stop military — that he’s going to stop these missile testing while he talks to the U.S.? Will the U.S. talk to North Korea?
MNUCHIN: I’m not going to speculate that on it one way or another. Again, I think that, as the president said, we’re happy to talk and negotiate, but we’re not stopping sanctions or anything else until we have firm commitments.
BARTIROMO: Already, secretary, good to see you this morning. Thanks very much.
MNUCHIN: Thank you, Maria.
BARTIROMO: We appreciate it very much.
Secretary Steven Mnuchin joining us at the White House.