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tv   Wall Street Journal CEO Council Discussion with Larry Kudlow  CSPAN  December 5, 2018 1:04am-1:37am EST

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and then to be mostly reported. and then investing in people. and then to reach across the competitors. that your employees are not safe and i think they realize that as an industry.
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. >> thank you for joining us larry. some type of agreement or a deal but it is an understanding. china saysom it will do something then it doesn't. how is this different? . >> we don't know that. i am hopeful and a couple of reasons why the discussions between the two sides that were broader more specific
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than we had before, i will give you an example. before that dinner on friday and saturday. and then to have a couple of meetings. but what struck me in all of these discussions he said we can move immediately with the world of trade issues. both sides agreed on that. there is more inclination so i
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said immediately immediately? what does that mean? you mean monday? and i don't know the answers to that end that car tariff but we are pretty far advanced here in the discussions. and that's the first time i had ever heard that. but i did go back to the beijing meeting when i first took this position.
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so along with the broad scope of topics that are on the table that was suggested to me without being definitive or short it is a bigger conversation. also if it is tuesday we have not seen anything immediately yet or acknowledge that 90 day conflict with which it would be. >> we will see. china has its own communications so i cannot speak to that. but the president drum set for
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quite some time that he had a good relationship t with the chinese president i have never seen them up close and personal. so at this dinner i saw a real chemistry between the two of them. and i will add two things where president xi agreed quickly. so president drum bass for the redefinition of the nl - - fenton all which is a very big issue in the white house. very big. china unfortunately does a lot of processing of that so that has important ramifications and president xi almost
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without hesitation said yes. second, later in the conversation president trump asked president xi if he would reconsider the qualcomm deal if it came up again? almost without pausing he said yes i will. but let me make my point. for many months i have said when i was a reagan cub scout mrs. reagan coined the phrase what should china do? and i would say tongue-in-chee tongue-in-cheek, try not to say yes because they never
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have any eight or nine months i've been involved in negotiations. i cannot say he will say yes but and then just say yes to a couple of them important things and that's why i am raising this. that is gracious in the meetings but you are asking them to do in the 90 days that has been accomplished but then they delay to hope the administration comes and goes and with that state owned enterprise and to hack
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companies to create unfair standards in the country. so in 90 days and to play the cynic it is hard to imagine that despite the relationship between mister xi and mister trump that they will move thisy time? . >> i had no assurances. i agree but others may disagree we have come further with the table of contents is larger of anything we have seen before. and the things that they are willing to talk about. and we have bob light heiser
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to be the negotiator. and then trust but verify. and it may not get done. i am just saying just like the ball is being lived in the right direction. and then say i can get this and then say i can get this what to use as a measuring stick forme success? what are we looking for by march 1 to determine to say we will begin progressing. and then at the end of the 90
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days. >> i abide by that. what should we look for? and with that list of specifics. said then to eliminate the car tariff. . >> this is in retribution. they could take it down to 25 percent then we are at where we were. so in retaliation it is so easy. so as they lower the tariff rates on agriculture and energy commodities wouldn't
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necessarily measure that against specifics. and you have the issues of macro economics of supply and demand. and with those other points and it is the technology and the list you gave is correct i have said this many times. we cannot let that happen. to get of applications entrepreneurial they cannot steal that. and thensh really at the heart
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of this and with those adventures but that is a sure form of technology. then we need to see some changes. i could give you page after page so let's take a look at it. >> the czar were the objectives. but at the same time we are asking not just to change that relationshipng and then to change the economy. and for patronage and to stay in their own power in china.
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so with that uncertainty to say we are not sure what will happen may be the trump administration will advance this and was being genuine. should we re- sync our - - rethink the supply-chain to diversify away from china? would you be encouraging them to do that i think american ceos should be realistic over thes past 20 years for my reading of history suggest they have fought the free-market advances which
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were terrific i don't think much has happened and there is h some evidence with entrenchment. has had a very good dinner with president xi but you have re be realistic i don't think a lot of people in american business but now i see changing attitudes and that's right. not going to encourage them to leave or stay i think these trade talks will be significant. i don't think these trade talks are designed to completely change the system. and on that specific issue
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inasmuch as we want to with the free-market model. . >> not sharing that we would get there in 90 days. but on specific matters but the president is very clear on this with the existing tariffs and they add to that so we will see and i understand being a journalist for a long long time you could be too
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cynical. so he could be too cynical. it is entirely possible. of the chinese have been masters policyol talking about 2025 where is our 2025 plan? . >> i don't want central planning. sometimes it works and sometimes it doesn't.
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he is not a central planner he is a capitalist so are the people around him. that is the tax cuts and deregulation and the energy programs are all about and that is what the trade talks are all about. he is a trade reformer and he would like to have zero tariffs. so we are not planners and i don't think that model will work. i believe history is on our side. i worked in the reagan administration and i learned from him with soviet communism when most people try to contain that and do business with it some of those share
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with china but anyway i want 2019 we hope to get there and we will have policies and by the way if you allow me those economic policies have done very well the economy is growing faster than almost any critic suggested. without booming ism. the many waves of recessionary pessimism but that evidence is quite different and the speculations. . >> you do not see a recession on the horizon? . >> i do not.
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>> can we get the graphic? . >> is this the bad thing that has happened? with the distance that percentage of gdp. and in 2018 that projection has gone on it is much more negative than the white house. by the way what does this mean? . >> so the level of the deficit
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it was $100 billion lower by the cbo estimates. so in her own estimates? . >> we don't agree with cbo we argue their economic estimates are way too low. and hence that deficit share of the gdp will gradually fall. i would argue that the success of the tax cuts already at least paying for two thirds and with nominal gdp. into suggest at least two
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thirds of the deficit. and as a rule they don't like the tax cuts. . >> and watching those own projections. . >> and with that upcoming fiscal year the deficit share of gdp comes down quites a bit and to be associated with reagan's rosy scenario which basically came true and it took a while but we are on target for our growth now the president has already
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announced and going across the board reduction in domestic spending that is pretty tough and the ritualist budgets we will see but we will fight that battle. with the omb budget hawk coming on board. but we are all budget hawks. including secretary mnuchin.
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and any more questions for larry kudlow? . >> there is a list of those items presented to the chinese so if they agree to the ip protection what else is important and high probability? . >> by the way i assume he meant --dash that disaster but that monitoring and enforcement trust but verify
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in the chinese are not fabulous on that we have a history so i just want to make that point but those various aspects of technology are so important that we are talking about commodities. i asked the uk and with his prior views in order to achieve increased purchasing. and i was delighted to hear that. it's a good thing but that is
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important so a quick plug on that they open their markets to us in the industrial area in fact, president xi talks about energy. i believe he will have an astronomical increase for the simple reason our economy is most competitive in the world right now. if you give us a chance that will benefit the economy and the manufacturers to benefit the chinese people. . >> that is very important that the technology related issues. >> one quick question before we go to break.
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>> what about the fact that chinese and in effect is an island that is stronger when we cannot really play that? i haven't heard much what we do with approval to get into that market. >> maybe it is unrealistic. >> as you know, , the limits on investments which go to the technology issues we put in tougher limits we're not ending investment not only in china but that was an
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important piece of legislation to protect us. i think we do telecom stuff better than they do it i want to make a federal case out of it right now but that is where it comes from? they do it on their own i pursue one - - presume they can do it on their own? that is above stealing at. i don't know if we are going to end that but the whole process which include cybersecurity issues maybe it comes down the more i think about this i'm not a china
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expert it just strikes me that the ownership issue is really important they need to change the so-called joint venture system. that is nearly the root of all evil i don't even know why. if they want american companies to come in but many have had to that gives the chinese the authority to get a pretty good look at our technology in whatever field that happens to be that it has to change. i will continue to emphasize
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that. that is essential and i'm glad to see a lot of american businessmen and women are talking about this w now because now the center is moving in that direction my friend hank paulson gave a speech on that that is good because really to have as much energy and soybeans that they want that those ownership issues, that has to be addressed and it is so important to the future of the united states and to our relationship and the potential trade deal. you hill or other people from the administration.
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i will tell you that this camper really wants palpable measured reforms. big reforms but that is the heart i cannot change the china central planning system. this other stuff has got to stop. we have put up with it too long so now at the center of the discussion is finally moving. i am not here to give political advice but i will just say this president trump inherited this including the wto. virtually every country agrees
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the wto has to be completely reformed. every country agrees with us france or canada with the whole issue of ownership problems it has to change and we do have a trade coalition of the living we had a trilateral document working for the e.u. and the united states and japan which explicitly discusses the nonmarket problems regarding china. we have got to make changes and in my view this is the crux of this conversation with
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china. i don't want to be pessimistic but i just want to say with the degrees of importance that has to be changed. >> thank you very much. [applause] . >> coffee and refreshments are outside of me will be back. abot politics. "the wall street journal" moderates our discussion. [applause] >> welcome. >> welcome. we will jump right into it. this morning we spent a lot of time talking [applause] welcome. we will jump right in this morning we spent time talking about business


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