TRADE AND TARIFFS, SO LET'S CONTINUE THE CONVERSATION WITH THE FORMER COMMERCE SECRETARY OF THE U.S., WILBUR ROSS, WHO SERVED IN THE TRUMP ADMINISTRATION PRIOR TO BACK. HE CONTINUES AS CHAIRMAN AND CEO OF ROSS ACQUISITION CORP. GREAT TO HAVE YOU ON THE PROGRAM. KIND OF FITTING THAT THE G7 IS TALKING ABOUT THOSE TARIFFS THAT ORIGINATED NOT ONLY FROM THE TRUMP ADMINISTRATION, BUT SPECIFICALLY FROM YOUR DEPARTMENT, AS WELL. WE NOW HAVE THE ABILITY TO LOOK BACK . HAVE THE STARFISH IS BEING? SEC. ROSS: SEEMS THEY HAVE BEEN, IN SEVERAL REGARDS. -- HAVE THOSE TARIFFS BEEN EFFECTIVE? SEC. ROSS: SEEMS THEY HAVE BEEN, IN SEVERAL REGARDS. THEY SHOWED THAT THE PRESIDENT IS WILLING TO FIX THE BALANCE, AND TWO, HE WAS WILLING TO BREAK WITH THE TRADITION PRIOR PRESIDENTS HAD SET UP. I THINK THESE PRESENT TARIFFS PRESIDENT BIDEN IS PUTTING IN ARE AN EXTENSION OF THE THINKING THAT WE HAVE BEFORE. THE AUTO VEHICLE TARIFF ON ELECTRIC VEHICLES, FOR EXAMPLE, WE STARTED. AND IN THOSE DAYS, THERE WEREN'T EVEN ANY ELECTRIC VEHICLES SOLD TO THE U.S. FROM CHINA. SO IT WAS EASY TO GET IT INTO THE AGREEMENT, BECAUSE IT DIDN'T HURT THE EXPERTS. BUT IT SET THE PATTERN. AND I THINK THIS IS WHAT IS NOW BEING FOLLOWED THROUGH. ROMAINE: THERE HAS BEEN A BIG QUESTION AS TO WHAT, IF ANYTHING, GETS US TO THE POINT IN OUR RELATIONSHIP WITH CHINA NETWARE MAY BE THOSE TARIFFS COULD BE REDUCED, OR EVEN ELIMINATED. HOW DO YOU FEEL ABOUT THE PROGRESS OF OUR RELATIONSHIP WITH THE CHINESE, AND WHETHER WE WILL GET TO A POINT WHERE IT IS MORE AMICABLE? SEC. ROSS: WELL, I DON'T THINK THAT HAS EVER BEEN PROVED THAT RUNNING A BIG TRADE DEFICIT WITH ANOTHER COUNTRY MAKES THEM A TRUE ALLY. I THINK THAT IS ONE OF THE MANY FICTIONS THAT THE SO-CALLED FREE TRADE PEOPLE HAD PROMPTED OVER THE YEARS. I THINK IT IS ESSENTIAL THAT BIDEN TOOK THE STEPS THAT HE HAS TAKEN, AND I WONDER A LITTLE BIT WHY IT TOOK THREE AND A HALF YEARS TO GET THERE, BECAUSE CHINA HAS BEEN RAMPING UP THE EVS FOR QUITE A WHILE. BUT AT LEAST HE IS NOW DOING IT. AND I THINK THAT IS GOOD AND IT IS CONSISTENT WITH TRYING TO CREATE A BETTER CLIMATE SITUATION. BUT TO DO IT WITHOUT HURTING OUR BALANCE OF. -- OF PAYMENTS. ALIX: PRESIDENT TRUMP TALKED ABOUT HIGHER TARIFFS IN EXCHANGE FOR LOWER TAXES? DOES THAT CREATE A DIFFERENT ECONOMIC PROBLEM? SEC. ROSS: REMEMBER, TARIFFS GO INTO THE FEDERAL BUDGET AS RECEIPTS. EVERY BIT AS MUCH AS TAXES DUE. SO IN AN ARITHMETIC SENSE, IT IS CLEARLY CORRECT THAT ONE COULD VERY WELL OFFSET THE OTHER. PRESIDENT TRUMP IS ALWAYS LIKED THE IDEA OF TARIFFS AS A REVENUE SOURCE. THAT IS WHY HE WENT WITH THE IDEA OF TARIFFS ON PRODUCTS FROM DAY ONE, RATHER THAN HAVING QUOTAS AND IF THE COUNTRY EXCEEDS THOSE QUOTAS, THEN PUTTING IN THE TARIFFS. SO HE VIEWS IT AND HAS VIEWED IT PARTLY AS A REVENUE MEASURE. BUT MORE THAN THAT, IT IS TO MAKE A FAIR ARRANGEMENT BETWEEN THE COUNTRIES. ALIX: THERE SEEMS TO BE A LOT OF QUESTIONS NOW AS TO TRUMP 2.0 ECONOMIC PLAN. IS THAT INFLATIONARY? WE TALK ABOUT TARIFFS THERE IS DEBATE AS TO WHETHER OR NOT TARIFFS ARE INFLATIONARY OR NOT, BUT REDUCED IMMIGRATION SHRINKS THE WORKFORCE, RENEWED TAX CUTS WITH MORE FISCAL STIMULUS, THE QUESTIONS ABOUT FED INDEPENDENCE. WHAT SAY YOU? SEC. ROSS: WELL, THAT IS A WHOLE LOT OF QUESTIONS. ALIX: [LAUGHTER] IT IS. [LAUGHTER] SEC. ROSS: SEC. ROSS: I WILL TRY TO ANSWER THEM ONE BY ONE. GO BACK TO THE TRUMP-ERA, THERE WAS NO BIG RUNAWAY INFLATION. SO THE IDEA THAT THE TARIFFS THAT WE PUT IN WERE SOMEHOW GOING TO HURT THE WORKING PEOPLE, CHARGE THEM TOO MUCH FOR GOODS, PROVED TO BE INCORRECT. DESPITE THE FACT THAT WE HAD UNEMPLOYMENT DOWN BELOW THE 4% LEVEL. SO THERE IS NO EVIDENCE THAT THE TRUMP TARIFFS REALLY WERE INFLATIONARY. SECOND, THE REASON FOR THAT IS, TO SOME EXTENT, THE OTHER COUNTRIES ABSORBED IT THEMSELVES , THAT NEITHER THE EXPORTERS OR, IN SOME CASES, THE GOVERNMENT THEY ARE PROVIDING THEM WITH SUBSIDIES. SO IT IS JUST NOT THE SAME THING AS THE NAYSAYERS HAD ANTICIPATED. IT IS NOT WHAT THE RECORD SHOWS. ROMAINE: MR. SECRETARY -- SEC. ROSS: AND THEN I THINK YOUR OTHER QUESTION WAS ABOUT WHAT DOES THAT DO TO RELATIONSHIPS? IT SEEMS TO ME THAT WE HAVE DONE AT LEAST AS MUCH DAMAGE TO THE RELATIONSHIP BY CONSTANTLY PROVOKING CHINA WITH TAIWAN. AND WITH SOME OF THE OTHER ACTIONS THAT THE GOVERNMENT HAS TAKEN. THIS ADMINISTRATION'S POLICY TOWARDS CHINA AND, FRANKLY, TOWARDS A LOT OF OTHER COUNTRIES, HAS BEEN A LITTLE BIT SCHIZOPHRENIC, IN THAT ON THE ONE HAND, HE SENT TO, HE SENDS ANTHONY BLINKEN AND HE SENDS ALL KINDS OF PEOPLE OVER THERE TO NEGOTIATE, AND THAT HE KEEPS ATTACKING THEM VERBALLY. I THINK A BETTER SOLUTION WOULD BE TEDDY ROOSEVELT'S SOLUTION, SPEAK SOFTLY, CARRY A BIG STEAK, RATHER THAN SPEAK LOUDLY AND CARRY A LITTLE STICK. ROMAINE: OK. I AM CURIOUS, MR. SECRETARY, ARE YOU STILL ADVISING DONALD TRUMP AND HIS CAMPAIGN AND HIS POTENTIAL CANDIDACY FOR PRESIDENT? SEC. ROSS: I CERTAINLY HAVE BEEN SUPPORTING HIM BOTH IN TERMS OF MY ENDORSEMENT A FEW MONTHS AGO, AND IN TERMS OF MONETARY CONTRIBUTION. SO, YES, I AM VERY MUCH IN FAVOR OF HIS REELECTION. ROMAINE: THERE WAS A MEETING EARLIER TODAY IN WASHINGTON, THE BUSINESS ROUNDTABLE HOST TODAY. I KNOW THESE MEETINGS ARE STANDARD DURING CAMPAIGNS, THEY MEET WITH BOTH MAJOR PARTY CANDIDATES AND TO WAS TRUMP'S TERM. WHAT IS THE MESSAGE YOU WOULD WANT THE BUSINESS COMMUNITY TO HEAR OUT OF THIS TRUMP CAMPAIGN AS THEY DECIDE WHAT THE OUTCOME MIGHT ACTUALLY BE? SEC. ROSS: WELL, FIRST OF ALL, QUITE A FEW SENIOR BUSINESS PEOPLE ARE, IN FACT, SUPPORTING TRUMP. A NUMBER OF THEM FORMERLY HAD BEEN MUCH MORE IN THE FREE-TRADE CAMP THAN THEY ARE NOW, BECAUSE THEY HAVE SEEN THE ACTUAL RESULTS OF THE TRUMP POLICIES, AND THEY HAVE SEEN THE CHINESE GOVERNMENT AND OTHERS TAKING MORE CONTROL OF THE PRIVATE SECTOR. AND THAT IS WORRISOME TO THEM. YOU PROBABLY SAW THAT SOME OF THEM ARE MOVING BIG FACILITIES TO INDIA. OTHERS ARE MOVING THEM TO VIETNAM. QUITE A FEW MOVING THEM TO MEXICO. SO, THEY ARE STILL LOOKING FOR LOW COST PRODUCTION. BUT THEY ARE BEING WEANED A LITTLE BIT OF THE IDEA THAT YOU CAN HAVE A REALLY COMPLICATED AND REALLY ELONGATED SUPPLY CHAIN. ALIX: ONE LAST QUESTION, BILL GROSS, LEGENDARY BOND KING, WROTE IN AN OP-ED, IN THE FINANCIAL TIMES, THAT TRUMP IS THE MORE BEARISH OF THE CANDIDATES FOR TREASURIES, SIMPLY BECAUSE HIS PROGRAMS ADVOCATE CONTINUED TAX CUTS AND MORE EXPENSIVE THINGS. BOTH CANDIDATES WILL BE NEGATIVE FOR THE FISCAL DEFICIT THE, BUDGET DEFICIT WILL CONTINUE TO RISE, BUT TRUMP WILL BE WORSE. WHAT DO YOU SAY TO THAT? SEC. ROSS: THAT IS HIS OPINION. BUT THE TRUTH IS, DEFICITS ARE RUNNING VERY, VERY HIGH AND THE PRESIDENT BIDEN. THE DIFFERENCE IS THAT THESE MEASURES, THESE -- TO THE PUBLIC ARE PUTTING MONEY INTO THE POCKETS FOR THE MOST PART, OF PEOPLE NOT WORKING, AS OPPOSED TO CREATING JOBS FOR THEM TO FILL. AND I THINK THAT IS PART OF THE REASON WHY INFLATION HAS BEEN AS STICKY AS IT IS, AND AS YOU KNOW, THE FEDERAL RESERVE JUST DECIDED NOT TO MAKE A CUT. BECAUSE IT WORRIES ABOUT CONTINUED INFLATION. I THINK IT'S INHERENTLY MORE INFLATIONARY TO PUT OUT MONEY FROM THE GOVERNMENT THAT DOESN'T GO TO PRODUCTIVE USE, THAN IT IS TO PUT OUT MONEY THAT GOES TO PRODUCTIVE USE. I WOULD ARGUE THAT THE INFLATIONARY PRESSURES ARE MUCH MORE LIKELY TO BE SEVERE UNDER PRESIDENT BIDEN THAN THEY WOULD