Fox Business Network

Fox Business Network 13 Jan 2020

Art Laffer: China trade deal is a win-win for the world

Description:

Former Reagan economist Art Laffer adds his perspective on the signing of ‘phase one' of the U.S.-China trade deal.


After more than two years of escalating tarrifs and a seemingly never-ending trade war, the US and China have agreed on a first step towards a truce.
If it holds, it could be a boost for U.S. President Donald Trump in an election year.
But who will benefit the most from this initial phase of a broader trade agreement?
China has promised to open up its markets and buy more US goods.
In exchange, the US will lift some tarrifs. Yet most will stay in place - and that's where the problems start.
So, could this really be the beginning of the end of the trade war between the US and China?
Presenter: Richelle Carey
Guests
Dan Wang, analyst for the Economist Intelligence Unit's Access China Service.
Hosuk Lee-Makiyama, Director of the European Centre for International Political Economy and a former Swedish Representative to the World Trade Organization.
Phil Caruso, Member of the Defense Council at the Truman National Security Project and a former Intelligence officer in the US Air Force.
Mike Greenberg, Keyshawn Johnson, Cliff Avril, Dan Graziano, Bobby Carpenter and Laura Rutledge contend that it is too soon for the Cleveland Browns to give up on quarterback Baker Mayfield, and explain why he hasn't been placed in a position to be successful to this point.
Marcus Spears and Dan Orlovsky agree that Philip Rivers is not a QB upgrade over Jacoby Brissett for the Indianapolis Colts.
#GetUp #NFL

✔️
Roughly 2,000 years before ancient Egyptians, the Chinchorro civilization developed a mummification process in northern Chile and southern Peru.
Americas Now correspondent Joel Richards went to northern Chile to see the millennia-old mummies.

… show captions ↓
CHERYL; WE'LL DIG INTO THE
NUMBERS.
EDWARD LAWRENCE LIVE AT
WHITE HOUSE.
"THE WALL STREET JOURNAL"
BREAKING DOWN LAST TWO YEARS
WITH CHINA AND UNCERTAINTY
IMPACT ON THE ECONOMY.
JOURNAL SAYS THE TRADE WAR TOOK
A TOLL ON THE UNITED STATES, BUT
NOT A BIG ONE.
BRING IN FORMER REAGAN
ECONOMIST, ART LAFFER.
>> HEY, CHAIRMAN.
CHERYL; FIRST ONE WAS AMERICAN
FARMERS AND SOYBEAN PRODUCERS
THAT WERE HIT OVER THE TRADE
DEAL.
CAN THEY RECOVER AND HOW
QUICKLY?
>> THEY CAN RECOVER, AND NOT
ONLY REGAIN THE SIZE.
TRUMP ALWAYS CLAIMED HE WAS A
FREE TRADER AND THIS IS PROOF
POSITIVE HE IS A FREE TRADER.
HE IS TRYING TO MAKE THE U.S.
ECONOMY BETTER.
I'M VERY PLEASED WITH THIS TRADE
DEAL.
I'M EXCITED BEYOND BELIEF.
TRADE IS MY SPECIALTY AIR AND IT
IS WONDERFUL.
CHERYL: THAT IS WHY YOU'RE HERE.
LET ME ASK YOU THIS, THIS IS THE
JOURNAL'S WORDS NOT MINE BUT I
WANT TO GET YOUR REACTION.
CHINA IS SET TO DO LITTLE MORE
WHEN THEY SIGN THE DEAL, RESTORE
AGRICULTURAL PURCHASES AND SAY
NICE WORDS ON FINANCIAL SERVICES
AND PROPER PROPERTY.
WHAT DO YOU SAY TO THAT?
>> I WOULD SAY THAT IT'S A
LITTLE UNDERSTATED.
I THINK IT IS MUCH MORE THAN
THAT.
I THINK CHINA IS READY TO PUT
WHOLE HOG ON THE DEAL AND READY
TO MAKE A BIG TRADING EXPANSION
WITH THE UNITED STATES OVER
TIME.
I THINK IT IS MUCH MORE THAN A
SMALL LITTLE STEP BACK WHERE WE
WERE.
I THINK IT WILL BE A FIRST STEP
FOR A BIG, BIG RELATIONSHIP WITH
CHINA.
CHINA IS OUR NATURAL TRADING
PARTNER IN THIS WORLD.
IF EVER TWO COUNTRIES THAT COULD
GET THE GAINS FROM TRADE IT IS
THE UNITED STATES AND CHINA AND
I'M VERY EXCITED.
I WAS ONE OF THE FIRST GROUP TO
GO TO CHINA 1970, OCTOBER OF
1970 I WENT WITH GEORGE SHULTZ
AND JOHN ERHLICHMAN.
WE DID THE PREKISSINGER TRIP.
I ALWAYS FALLEN IN LOVE WITH
CHINA AND I THOUGHT THE
RELATIONSHIP BETWEEN CHINA AND
THE U.S. WOULD BE A TREMENDOUS
FOR BOTH COUNTRIES AND I STILL
DO.
CHERYL: LET ME ASK YOU THIS, THE
IMPACT ON THE ECONOMY, THAT IS
WHAT THE JOURNAL IS TALKING
ABOUT, THE PRESIDENT SAID BEFORE
HE WOULD LIKE TO SEE 3% ANNUAL
ECONOMIC GROWTH BUT WE MAY BE
MORE AROUND 2% FOR 2019.
I KNOW YOU'RE BULLISH ABOUT
SIGNING THE DEAL WITH THE
CHINESE.
WHAT DO YOU THINK IMPACT WILL BE
FOR 2020 ECONOMIC GROWTH?
>> LET ME JUST SAY, THAT I
UNDERSTAND THE 3% NUMBER.
I LIKE IT.
ALL THAT IS GOOD.
THIS ECONOMY HAS DONE EXTREMELY
WELL OVER THE LAST TWO YEARS.
IF YOU LOOK AT OUR ECONOMY IN
THE CONTEXT OF THE WORLD, ALL OF
THE REST OF THE WORLD HAS BEEN
DECLINING DRAMATICALLY.
WE HAVE NOT DECLINED
DRAMATICALLY.
WE'RE THE ONE SHINING LIGHT ON
THE GLOBAL COMMUNITY, THAT HAS
DONE REALLY WELL.
I LIKE TO LOOK AT THE U.S.
ECONOMY RELATIVE TO THE REST OF
THE WORLD.
IT HAS DONE NOTHING BUT EXPAND,
EXPAND, EXPAND.
OUR GDP TODAY IS 2 1/2% HIGHER
THAN IT WOULD HAVE BEEN HAD WE
GROWN AT RATE OF THE EUROZONE
FOR THE LAST TWO YEARS.
THAT IS A HUGE, THAT IS
$700 BILLION.
I MEAN IT IS AMAZING WHAT THE
TAX BILL DID, WHAT THE
DEREGULATION HAS DONE.
I HAVE NO HOLD BACK ON THE U.S.
ECONOMY.
IT IS PERFORMING MAGNIFICENTLY.
IF THE REST OF THE WORLD TURNS
AROUND IN ANY WAY, SHAPE, FORM
IN 2020, THAT WILL PUSH U.S.
ECONOMIC GROWTH EVEN HIGHER.
I COULDN'T BE HAPPIER HOW THE
ECONOMY HAS PERFORMED.
I'M ANTICIPATING A REALLY GOOD
YEAR IN 2020.
CHERYL: LET ME ASK YOU BEFORE
YOU GO, WHO WINS IN ALL OF THIS?
WE TALKED ABOUT FARMERS.
WHAT ABOUT THE AUTO INDUSTRY?
WHAT ABOUT FURNITURE MAKERS?
WHAT ABOUT FIREWORKS COMPANIES?
WE TALKED OVER THE LAST FEW
YEARS HERE AT FOX BUSINESS ABOUT
SOME OF THESE INDUSTRIES THAT
WERE IMPACTED BY THE TRADE WAR.
WHO IS THE FIRST WINNER, WHO IS
THE BIG WINNER?
>> THE BIGGEST WINNERS ARE THE
U.S. AND CHINA AND THE REST OF
THE WORLD.
IT'S A WIN-WIN FOR EVERYONE.
THESE ARE CALLED THE GAINS FROM
TRADE.
COMPARATIVE ADVANTAGE, DAVID
RICARDO.
IT'S A WIN-WIN FOR THE WORLD,
THIS FREE-TRADE AGREEMENT.
THE FURTHER WE GO ON FREE TRADE,
THE BIGGER THE WINS WILL BE.
THE ONLY LOSERS I CAN SEE ARE
SOME DEMOCRATIC NAYSAYERS WHO
WERE REALLY, NEVER GOING TO
WORK.
HE IS A PROTECTIONIST.
HE IS TARIFF MAN, ALL OF THAT,
THEY'RE THE LOSERS.
THE WINNERS ARE ALL THE AMERICAN
PEOPLE AND REST OF THE WORLD.
IT IS NOT US VERSUS THEM.
IT IS US WITH THEM MAKING IT
MORE PROFITABLE WORLD FOR
EVERYONE.
CHERYL: ART LAFFER.
THANK YOU FOR BEING HERE.
APPRECIATE IT.
>> CHERYL, YOU'RE DOING A GREAT
JOB.
TAKE OVER THE SHOW MORE OFTEN.
I LOVE COMING ON WITH YOU.
CHERYL: CHARLES WOULD LOVE TO
HEAR THAT, THANKS.
[LAUGHTER].

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